Mutares increases net income of the Holding in the first quarter of 2024 thanks to successful exit - expansion into the growth market India initiated

Promising start to the year: Mutares increases net income of the Holding in the first quarter of 2024 thanks to a successful exit - expansion into the growth market India initiated

• Revenues from consulting services and management fees of Mutares Holding grew by 8% to EUR 29.3 million in the first quarter of 2024 (previous year: EUR 27.1 million)
• Net income of Mutares Holding reaches EUR 51.3 million in the first three months of 2024 (previous year: EUR 8.2 million), benefiting in particular from the exit of Frigoscandia
• Group revenues increase by 21% to EUR 1,346.1 million (previous year: EUR 1,108.0 million), Adjusted EBITDA improves to EUR 14.0 million (previous year: EUR 5.1 million)
• Successful tap issue of the bond with a volume of EUR 100 million in the first quarter of 2024

Munich, May 7, 2024 – Mutares SE & Co. KGaA (ISIN: DE000A2NB650) ("Mutares" or "Mutares Holding" and, together with its subsidiaries, "Mutares Group") today published its figures for the first quarter of 2024. At Mutares Holding level, an increase in net income was achieved. At Group level ("Mutares Group") revenues and Adjusted EBITDA increased significantly due to restructuring and development progress.

Significant growth at Holding company and Group level

The revenues of Mutares Holding, which result from consulting services and management fees from the portfolio companies, increased by 8% to EUR 29.3 million in the first quarter of the fiscal year 2024 (previous year: EUR 27.1 million). In particular, the increase is due to portfolio growth in the fiscal year 2023 due to the high transaction activity. The net income of Mutares Holding amounted to EUR 51.3 million for the first three months of 2024 (previous year: EUR 8.2 million) and benefited significantly from the exit of Frigoscandia in the first quarter of 2024.

At Group level, Mutares generated revenues of EUR 1,346.1 million in the first quarter of 2024 (previous year: EUR 1,108.0 million). The increase is due in particular to the high level of acquisition activity in the fiscal year 2023. Group EBITDA (earnings before interest, taxes, depreciation and amortization) is regularly influenced by transaction-related effects such as gains from bargain purchases of completed acquisitions and deconsolidation effects and amounted to EUR 66.1 million in the first three months of 2024 (previous year: EUR 112.4 million). Adjusted EBITDA, adjusted in particular for transaction-related effects, amounted to EUR 14.0 million in the first quarter of the fiscal year 2024 (previous year: EUR 5.1 million).

The Group's cash and cash equivalents amounted to EUR 527.0 million as at March 31, 2024 (December 31, 2023: EUR 520.2 million) and the equity ratio was 25% (December 31, 2023: 26%).

Successful continuation of high transaction activity

The period from January to March 2024 was again characterized by a high level of transaction activity, with two completed transactions on the exit side and the closing of the acquisitions of PRINZ Kinematics from AL-KO and Temakinho from Cigierre as well as the signing of an agreement for the acquisition of Magirus from Iveco Group.

With the acquisition of PRINZ Kinematics and its subsidiaries from AL-KO as an add-on investment, Mutares strengthens the HILO Group with a leading global system supplier for high-quality kinematic systems for OEMs in the automotive technology sector.

The acquisition of Temakinho from Cigierre serves as a platform investment to strengthen the Retail & Food segment. The well-known Italian restaurant chain offers Japanese-Brazilian cuisine in ten directly managed restaurants in Milan, Rome, Bologna and Florence, three franchise restaurants at Italian airports and one franchise restaurant in Lyon (France) at prime locations.

Mutares has also signed an agreement for the acquisition of Magirus from Iveco Group. The acquisition is expected to be completed no later than January 2025. The renowned provider of vehicles, ladders and other products as well as related aftersales services in the field of firefighting and disaster control is intended as a platform investment for the Engineering & Technology segment and generates annual revenues of over EUR 300 million.

On the exit side, Mutares completed two transactions in the first three months of the fiscal year 2024. The portfolio company VALTI, a European manufacturer of seamless precision steel tubes, was sold to the company's management. In addition, the sale of Frigoscandia, a full-service provider for temperature-controlled logistics, to Dachser was completed following a successful repositioning. The transaction makes a significant contribution to the net income of Mutares Holding in the first quarter of 2024.

Setting the course for further growth in the first quarter – expansion in growth market India

Mutares has taken further important decisions in the first quarter of 2024. In the newly formed HILO Group, Mutares bundles the portfolio companies KICO and Innomotive Systems Hainichen (ISH) together with the recently completed add-on acquisitions of PRINZ Kinematics and High Precision Components (HPC) as a globally active system supplier for high-quality automotive technology.

In addition, the bond was increased by a further EUR 100 million to the maximum volume of EUR 250 million under the existing increase option. The capital inflow from the bond tap enables Mutares to take maximum advantage of the opportunities arising on the buy side.

Following the recent opening of an office in Shanghai (China), Mutares is continuing its expansion into Asia with a further office in Mumbai (India). The market entry in India is a logical step for Mutares after the portfolio companies SFC Solutions and MoldTecs (both part of Amaneos) already have activities in this fast-growing market. India offers enormous opportunities for Mutares as a target market with strong economic growth expected in the coming years. According to current forecasts, India will become the third-largest economy in the world by the end of the decade. Favorable conditions for foreign direct investment and, in particular, the Indian government's agenda for planned infrastructure development and investment are fully in line with Mutares' target industries.

Restructuring and development progress characterize development of Adjusted EBITDA

Revenues in the Automotive & Mobility segment amounted to EUR 605.9 million in the first quarter of 2024 (previous year: EUR 448.7 million). This increase was primarily due to the acquisitions made in the fiscal year 2023, above all Peugeot Motocycles and the add-on acquisitions for the FerrAl United Group (in particular MMT-B). EBITDA in the Automotive & Mobility segment amounted to EUR 29.7 million in the first quarter of 2024 (previous year: EUR 65.9 million). Adjusted EBITDA was impacted by the still negative earnings contributions from the new acquisitions but amounted to a pleasing EUR 22.3 million in the first three months of 2024 and was therefore significantly higher than the previous year's figure of EUR -6.9 million.

The portfolio companies in the Engineering & Technology segment generated revenues of EUR 224.3 million in the first quarter of 2024 (previous year: EUR 263.1 million). Segment EBITDA amounted to EUR -11.7 million (previous year: EUR 10.2 million). Adjusted EBITDA amounted to EUR -7.7 million (previous year: EUR 0.7 million) and was negatively impacted in particular by the still negative earnings contributions from the new acquisitions from the fourth quarter of fiscal year 2023 (Efacec and Byldis), which more than offset the positive developments at other portfolio companies in the segment.

Revenues in the Goods & Services segment amounted to EUR 286.4 million in the first quarter of 2024 (previous year: EUR 190.4 million)¹. In addition to the inclusion of the acquisitions from the fiscal year 2023, above all GoCollective, ReloBus and MobiLitas (together formerly: Arriva Group) and Palmia, Terranor Group and Conexus in particular showed pleasing organic revenue growth. The segment's EBITDA amounted to EUR 52.8 million in the first quarter of 2024 (previous year: EUR 6.9 million) and benefited significantly from the sale of Frigoscandia. Adjusted EBITDA amounted to EUR 0.2 million in the first quarter (previous year: EUR 3.7 million).

The Retail & Food segment generated revenues of EUR 230.1 million in the first quarter of 2024 (previous year: EUR 207.0 million). The increase reflects the acquisition of Gläserne Molkerei in the third quarter and the acquisition of Prénatal and TeamTex in the fourth quarter of 2023. The decline in revenues at Lapeyre due to a challenging market environment had the opposite effect. EBITDA for the segment amounted to EUR -13.5 million in the first quarter of 2024 (previous year: EUR 20.1 million). Adjusted EBITDA amounted to EUR -9.7 million (previous year: EUR -2.3 million).

Adjusted EBITDA fluctuates significantly along the three phases of value creation that investments usually go through during their affiliation with Mutares (Realignment, Optimization and Harvesting). As in previous years, the classification of portfolio companies into the three phases was adjusted in the first quarter on the basis of the progress made in the transformation and the approved budgets.

Condensed consolidated statement of profit and loss

Condensed consolidated balance sheet

Outlook

Against the background of the transactions completed and signed in the fiscal year 2023, the transaction-rich first quarter of 2024 and the assumptions regarding further intended transactions in the course of the year as well as the plans for the individual portfolio companies, the Management Board confirms the forecast for the fiscal year 2024 and continues to expect revenues for the Mutares Group to increase to between EUR 5.7 billion and EUR 6.3 billion.

The annual net income of Mutares SE & Co. KGaA should regularly be in a range of 1.8% to 2.2% of the consolidated revenues of the Mutares Group. Based on the expected revenues for the Mutares Group of EUR 6.0 billion on average, the Management Board therefore expects a net income of EUR 108 million to EUR 132 million in the fiscal year 2024. All sources from which the net income of Mutares SE & Co. KGaA is generally fed, namely revenues from the consulting business on the one hand and dividends from portfolio companies and, in particular, exit proceeds from the sale of investments on the other, are expected to contribute to this.

Conference call today at 02:00 PM

A video and telephone conference (webcast) in English will be held today at 02:00 PM (CEST) for analysts, investors and members of the press. Registrations for this are possible by e-mail to ir@mutares.de.

The webcast presentation can then be downloaded at https://ir.mutares.com/en/publications.

Company profile of Mutares SE & Co. KGaA

Mutares SE & Co. KGaA, Munich (www.mutares.com), a listed private equity holding company with offices in Munich (HQ), Amsterdam, Frankfurt, Helsinki, London, Madrid, Milan, Mumbai, Paris, Shanghai, Stockholm, Vienna and Warsaw, acquires companies in special situations which show significant operational improvement potential and are sold again after undergoing a repositioning and stabilization process. For the fiscal year 2024, consolidated revenues of EUR 5.7 billion to EUR 6.3 billion are expected. Based on this, consolidated revenues are to be expanded to approx. EUR 7 billion by 2025 and EUR 10 billion by 2028. As the portfolio grows, so do consulting revenues, which together with portfolio dividends and exit proceeds accrue to the Mutares Holding. On this basis, the Holding Company is expected to generate a net income of EUR 108 million to EUR 132 million for the fiscal year 2024, EUR 125 million to EUR 150 million for the fiscal year 2025 and EUR 200 million for the fiscal year 2028. 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) and have been part of the selection index SDAX since December 2023.

For more information, please contact:

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

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

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

Press Contact in UK
14:46 Consulting
Tom Sutton
Phone: +44 7796 474940
E-mail: tsutton@1446.co.uk
 

¹⁾ The comparative figures from the first quarter of 2023 have been adjusted to reflect the reorganization of the segment structure.

²⁾ Adjusted EBITDA is an EBITDA key performance indicator adjusted for special effects, in particular due to the effects of regular changes in the composition of the portfolio that are inherent to the business model. The calculation is based on reported Group EBITDA, adjusted for transaction-related effects (gains from favorable acquisitions or deconsolidation effects) as well as restructuring and other one-off expenses and income.