Mutares SE & Co. KGaA: Mutares increases consolidated revenues by 30% in the first half of the year – significant increase in profitability in all segments

Mutares increases consolidated revenues by 30% in the first half of the year – significant increase in profitability in all segments

• Revenues from consulting services and management fees of Mutares Holding grow by 82% to EUR 52.1 million in the first half of 2023 (H1 2022: EUR 28.7 million)
• Net income of Mutares Holding reaches EUR 13.2 million in the first half of 2023 (H1 2022: EUR 14.2 million) despite one-off expenses for bond refinancing
• Group revenues increase by 30% to EUR 2,273.6 million (H1 2022: EUR 1,754.6 million), Adjusted EBITDA improved to EUR 41.2 million (H1 2022: EUR -32.9 million)
• Successful refinancing of bond sets course for further growth

Munich, August 10, 2023 – Mutares SE & Co. KGaA (ISIN: DE000A2NB650) ("Mutares" or "Mutares Holding" and, together with its subsidiaries, "Mutares Group") today published its figures for the first half of 2023. A significant increase in revenues was achieved both at the Company level ("Mutares Holding") and at the Group level ("Mutares Group").

Successful development at Holding and Group level

Revenues of the Mutares Holding, i.e. Mutares SE & Co. KGaA, resulting from consulting services and management fees from portfolio companies increased by 82% to EUR 52.1 million in the first half of 2023 (H1 2022: EUR 28.7 million). The increase is due to portfolio growth in fiscal year 2022 and the first half of 2023 as a consequence of the high transaction activity. The "Portfolio Income^“1) also amounts to EUR 52.1 million for the reporting period (H1 2022: EUR 32.6 million), as naturally no dividends were received from the portfolio in the first half of the fiscal year. The net income of Mutares Holding amounts to EUR 13.2 million in the first half of the year (H1 2022: EUR 14.2 million). This already includes the usual market expenses of EUR 5.7 million for the successful refinancing and increase of the bond, while the previous year included positive one-off income of EUR 7.2 million.

The Mutares Group generated revenues of EUR 2,273.6 million in the first half of 2023 (H1 2022: EUR 1,754.6 million). The increase is mainly due to the high acquisition activity in the second half of 2022 as well as in the reporting period itself. The Group’s EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) regularly benefits from gains from favorable acquisitions ("bargain purchases") of the completed acquisitions and amounted to EUR 405.4 million in the first half of 2023 (H1 2022: EUR 66.0 million). Adjusted EBITDA²⁾, adjusted in particular for the effects of regular changes in the composition of the portfolio (gains from favorable acquisitions and deconsolidation effects) inherent in the business model, amounts to EUR 41.2 million for the first half of 2023 (H1 2022: EUR -32.9 million). This reflects the successfully implemented operational optimization programs in the portfolio.

Most successful exit in the Company's history and expansion of industry focus

Mutares signed agreements for two acquisitions with BEW Umformtechnik and Efacec in the first six months of 2023 and already successfully completed the acquisition of BEW Umformtechnik in the reporting period. In addition, four acquisitions were completed in the first half of 2023 with MMT-B, the acquisition of business activities in Denmark, Serbia and Poland from Arriva Group, Peugeot Motocycles and Palmia, for which acquisition agreements had already been signed in fiscal year 2022. Transaction activity in the first half of the year was also characterized by those on the exit side, with Mutares successfully placing Japy Tech, the activities of Ganter in France, Lacroix + Kress and FDT Flachdach Technologie in the hands of new owners. The highlight on the transaction side in the first half of 2023 is the agreement signed in May for the sale of Special Melted Products ("SMP"). This transaction is expected to close in the third quarter of 2023, subject to regulatory approval. Taking into account deductible items, variable compensation and transaction costs, the company expects an inflow in the triple-digit million range of up to EUR 150 million and a contribution to the net income of the Mutares Holding in the triple-digit million range.

After the end of the reporting period, Mutares added a fourth segment to the previous three segments. With the signing of an agreement to acquire Gläserne Molkerei from Emmi Group in July 2023, the first step towards strengthening this new segment was implemented. Together with Lapeyre, keeeper Group, FASANA and SABO (previously part of the Goods & Services segment), Gläserne Molkerei will form the Retail & Food segment in the future.

Setting the course for growth

With the early refinancing and redemption of the existing EUR 80 million bond maturing in 2024, in the first quarter of the year, the issuance of a new EUR 100 million bond maturing in 2027 and its increase to a nominal volume of EUR 150 million during the reporting period, Mutares has also laid the financial foundation for the Company’s further growth.

In addition, following the opening of an office in Warsaw in May this year, Mutares has planned its next growth steps in the USA and China. The opening of offices outside of Europe is the next logical step in Mutares' expansion strategy, after having established itself as a leading European private equity investor for special situations through its pan-European presence with eleven offices.

Positive Adjusted EBITDA in all segments

Revenues in the Automotive & Mobility segment amounted to EUR 932.0 million in the reporting period (H1 2022: EUR 457.5 million). The significant growth of almost 104% is mainly attributable to the contribution of MoldTecs and Cimos Group as well as Peugeot Motocycles and MMT-B, which were acquired in the second half of 2022 and the first half of 2023. Segment EBITDA amounted to EUR 128.7 million in the first half of 2023 (H1 2022: EUR -40.3 million) and was positively impacted by the gains from favorable acquisitions of the reporting period (MMT-B, PMTC and BEW). The increase in Adjusted EBITDA to EUR 11.5 million (H1 2022: EUR -36.5 million) reflects the extraordinary improvement in profitability after the burdens from external conditions in the previous year's period (declining sales volumes and significant price increases in the area of energy and raw materials) as well as the successful implementation of the optimization programs.

The investments of the Engineering & Technology segment generated revenues of EUR 494.4 million in the first half of 2023 (H1 2022: EUR 551.2 million). The slight decline is due to the fact that the acquisitions of Guascor Energy, NEM Energy, SMP, VALTI and Steyr Motors could not fully offset the decline caused by the sale of Nordec Group in the fourth quarter of 2022 and the exit of FDT Flachdach Technologie and Japy Tech as well as Lacroix + Kress in the first quarter of 2023. Segment EBITDA amounted to EUR 6.6 million (H1 2022: EUR 99.6 million) and includes the deconsolidation gains from the exits. Adjusted EBITDA amounted to EUR 0.8 million (H1 2022: EUR 0.9 million) as a result of partly opposing developments.

Revenues of the Goods & Services segment amounted to EUR 848.7 million in the first half of 2023 (H1 2022: EUR 746.8 million). The increase was mainly driven by the acquisitions of Palmia and the business activities of Arriva in the reporting period. Segment EBITDA amounted to EUR 254.5 million (H1 2022: EUR 6.1 million), benefiting in particular from the gain on favorable acquisition of the Arriva business. Adjusted EBITDA of EUR 12.5 million in the first half of 2023 was significantly above the prior-year figure of EUR -0.2 million.

Adjusted EBITDA fluctuates significantly along the three phases of value creation that investments typically go through during their affiliation with Mutares (Realignment, Optimization and Harvesting).

Outlook

Mutares has set the short-, medium- and long-term course for a continuation of its growth path and expanded its position as Europe's leading specialist for carve-outs, restructurings and turnarounds. By broadening the industry focus with the addition of a fourth segment (Retail & Food) to the previous three segments and the geographic expansion to the USA and China, considerable, previously untapped growth opportunities are opening up, which could secure growth beyond the medium-term target of approximately EUR 7.0 billion in consolidated revenues and EUR 125 million to EUR 150 million in net income of the Mutares Holding formulated for 2025.

Based on the encouraging development in the first half of 2023 and assuming the successful completion of the SMP exit, the Management Board confirms the forecast for fiscal year 2023, which continues to envisage revenues of EUR 4.8 billion to EUR 5.4 billion for the Mutares Group and a net income of EUR 92 million to EUR 112 million for the Mutares Holding.

Earnings call today at 2:00 pm

A video and telephone conference (webcast) in English will be held today at 2:00 p.m. (CEST) for analysts, investors and members of the press. Registrations for this are possible by e-mail to ir@mutares.de.

The presentation shown via webcast can be downloaded afterwards at https://ir.mutares.de/en/publications/.

Capital Markets Day on October 12, 2023

The Capital Markets Day 2023 of Mutares SE & Co. KGaA will take place on October 12, 2023, at FIFTY HEIGHTS in Frankfurt am Main as a hybrid event. During the Capital Markets Day, the Management Board will provide insights into recent developments and outline the future strategy. In addition, portfolio managers will also provide an in-depth impression of the current developments of selected portfolio companies.

Company profile of Mutares SE & Co. KGaA

Mutares SE & Co. KGaA, Munich (www.mutares.com), as a listed private equity holding company with offices in Munich (HQ), Amsterdam, Frankfurt, Helsinki, London, Madrid, Milan, Paris, Stockholm, Vienna and Warsaw, acquires medium-sized companies in special situations, based in Europe, which show significant operational improvement potential and are sold again after undergoing a repositioning and stabilization process. For the fiscal year 2023, consolidated revenues of EUR 4.8 billion to EUR 5.4 billion are expected. Based on this, consolidated revenues are to be expanded to approx. EUR 7 billion by 2025. As the portfolio grows, so do consulting revenues, which together with portfolio dividends and exit proceeds accrue to the Mutares Holding. Accordingly, a net income in the holding company in the range of EUR 125 million to EUR 150 million is expected for the fiscal year 2025. The Management Board and Supervisory Board together hold more than one third of all Mutares shares with voting rights. The shares of Mutares SE & Co. KGaA are traded on the Regulated Market of the Frankfurt Stock Exchange under the symbol "MUX" (ISIN: DE000A2NB650).

For more information, please contact:

Mutares SE & Co. KGaA
Investor Relations
Phone: +49 89 9292 7760
E-mail: ir@mutares.de
www.mutares.de

Contact Press
CROSSALLIANCE communication GmbH
Susan Hoffmeister
Phone: +49 89 125 09 0333
E-mail: sh@crossalliance.de
www.crossalliance.de

Contact Press France
CLAI
Matthieu Meunier
Phone: +33 06 26 59 49 05
E-mail: matthieu.meunier@clai2.com

¹⁾ Revenues and dividends from the portfolio result in the so-called “Portfolio Income” of Mutares Holding.

²⁾ Adjusted EBITDA is an EBITDA performance indicator adjusted for special factors, in particular due to the effects of regular changes in the composition of the portfolio that are inherent in the business model. The calculation is based on reported Group EBITDA adjusted for transaction-related effects (bargain purchases or deconsolidation effects) and restructuring and other non-recurring expenses.