MPC Münchmeyer Petersen Capital AG (MPCK) Earnings Call Transcript & Summary

I'm very sorry for the tech issues. If you may have some and get out of the Zoom call and use this link I just posted in the chat box. Ladies and gentlemen, I'm sorry for the technical hiccups. We are meeting in an additional meeting room. I just posted the link here in our chat, and I will close the Zoom room now. Please copy the link, and I will see you my colleague Morgan will see you in the additional room. Thank you, and bye-bye.

Welcome you to our earnings call in connection with today's publication of the half year report 2026, which is actually our first results release as Oceania Group. Let me briefly outline today's agenda. I will start with an introduction, followed by a business update, focusing on the key operational developments in the first half of 2026, and Philipp will then take you through the H1 financials in a bit more detail. And finally, I will then come back to share some thoughts on the outlook and the months and quarters ahead, and then we will open the floor for a Q&A. Let me start on the next slide with an important milestone for our group. And as I mentioned just now, and as of the beginning of September, we are now sailing forward under a new name, MPC Oceanic Group. And this change was approved at our AGM, which took place last Friday, the 28th of August and took legal effect today following its entry into the commercial register. So what does the new brand reflect? It reflects the strategic repositioning of our group over the past decade with a clear focus on industrial services and investments in the Maritime and Energy sectors. And let me also briefly explain what that stands for. we kept that because that represents our heritage with more than 30 years of experience and also a trusted name worldwide. Oceanic, the second part reflects our world, the world in which we operate the ocean carries global trade and also powers renewable energies, and it sits at the very heart of everything we do. And group last but not least, reflects our structure, bringing our industrial services and investment activities. -- together under one roof. So this is no change in strategy, just a name that basically catches up on who we've become. Let me now give you the key takeaways for today before we dive into the detail. Firstly, and on this slide, we have put a few points up and perhaps most visibly our maritime service business. That has developed into genuine industrial backbone of our group. We provide a broad range of services, which we will elaborate in a bit more detail later on this commercial and technical management for more than 400 ships today. And this now the loss also a significant recurring contribution to our income stream. Secondly, the Maritime Investment business. This remains highly dynamic, we currently have close to 40 newbuilding projects underway, representing a project volume of around USD 2.5 billion across a wide range of investment path. Thirdly, our earnings base is highly visible. It underpinned -- it's basically underpinned by the recurring revenues that I alluded to, but also contracted transaction fees and co-investment income, a combination that gives us good forward visibility in terms of earnings. And fourth, our balance sheet, which remains built for opportunities to make use of opportunities with net cash of million and the equity ratio have ample flexibility to pursue further growth while staying disciplined on our capital allocation principles. Let me now turn to our performance for the first half 2026. Overall, it was a strong 6-month period, a resilient revenue base, combined with strong co-investment returns. And as a result, we have, last week, upgraded our financial guidance for the full year. Let me now walk you through the key messages on this slide. Let's start with resilience. Our business model continues to prove highly durable. Management Services revenues increased to EUR 18.7 million now accounting for more than 80% of total revenue. This underscores just how much visibility and stability sits underneath our phone. On top of that, our co-investment performance was particularly strong this half of the year. Income was up 36% to EUR 14.2 million, and that is driven by strong recurring earnings, mainly from our strategic maritime investments. Put together, this translated into significant earnings growth. EBIT increased by 34% to EUR 17.1 million, while earnings per share rose by 22% to EUR 0.39. Given this momentum, we have decided to, as I mentioned, raised our guidance for the full year 2026. We now expect full year revenues of around EUR 50 million to EUR 53 million and EBIT of EUR 30 million to EUR 33 million, and this is up from our previous guidance. Just briefly on the KPIs. On the right-hand side, total income increased to EUR 37 million, EBT is up 34% and assets under management grew by 6% compared to last year to EUR 5.6 million whereas earnings per share have increased by 22% compared to the same period last year. Overall, this performance underlines the strength of our platform and also firms our confidence that we are very well positioned to continue our growth path. Now let me now turn to the business update section with the integrated business model and our owner operator approach. This slide illustrates our fully integrated owner-operator model. It hasn't changed, but it's the foundation basically of both how we run the business and also how we will take today's discussion and talk about some of the activities and review the first half of 2026. In practice, what does this mean in operator model, it means we combine investment expertise with operational capabilities to cover the entire value chain from origination of a deal to actually operating the assets. Starting with the investment business side, we are active across 3 areas: project development, which is effectively the origination, structuring and development of projects and opportunities investment management, where we execute the transactions and manage portfolios on behalf of our clients and very importantly, also our co-investment element where we selectively put our own balance sheet to work alongside investment partners. Looking at the first half of 2026. This side of the business showed strong momentum our contracted newbuilding program volume, as I said, executed on behalf of clients or together with partners, increased to USD 2.5 billion. We also launched a new investment platform, but more on that later on. On the service business side, we again operate across 3 key pillars: commercial management, where we cover chartering and ship broking, technical management, providing full-scope vessel operations and a variety of ancillary services, which include performance management and vessel IT services. Here too, the first half of 2026 was a period of continued expansion, commercial management is showing on the back of strong container shipping markets. We also completed the integration of our technical ship management setup and our digital services are opening the door for new clients. Taken together, this integrated setup remains a key differentiator for NPC Oceania Group. It lets us generate recurring revenues, stay close to our assets and our clients and capture value across the full life cycle. Now let me walk you through the key developments in our investment business itself. Starting with our newbuilding program. We now have 37 newbuilding projects under construction, all initiated by MPC, representing a total volume of around USD 2.5 billion. as these assets will be delivered over the coming years, this volume will progressively flow through into our assets under management and hence, increase our earnings capacity and we still have a further well pipeline of projects in development or in negotiation. Then there's our diversified maritime strategy. We launched the MPC store maritime opportunities. platform raising USD 35 million at first close, and we have already put the capital to work, acquiring the first 3 vessels across different maritime sectors, and the pipeline for follow-on deals looks promising and strong, and we actually advanced in preparing for a second equity raise in the next couple of quarters. We have also progressed on our new offshore service platform, where we have created a deccaded investment vehicle for offshore service vessels. Four OSVs are currently on order with delivery in '26 and '27 with additional options still attached, and this represents currently a total project volume of EUR 80 million. And finally, in energy, we are developing a new 30-megawatt peak solar PV project in El Salvador. We also secured an 18-year direct via PPA with K+S for a wind farm in Hess in Germany. And at the same time, we took the opportunity to sell down on a few solar PV projects, Salvador, Colombia and also in Guatemala. So basically recycling capital as we go. Overall, this reflects strong momentum across all areas of our investment business. Let me now turn to our time service business, which continues to be well positioned and diversified starting from left to right here with our commercial management strong in Brazil in container shipping markets are basically driving chartering activity. This includes extensive forward fixtures stretching over multiple years. and providing good visibility. In fact, we currently have 5G high in terms of number of vessels under commercial container chartering. On the technical management side, the picture is similarly encouraging. The platform is well positioned with good business development momentum across the board. The cost synergies from our past M&A activities have, in the meantime, fully materialized, and our target structure is now in full operational swing, and we are seeing fresh momentum on third-party clients. And in the performance management side of things, we keep pushing our AI-powered solutions further on our fully digitized platform, optimizing energy efficiency as well as regulatory compliance and we are introducing new products to sharpen performance management even further and today, service approximately 450 individual ships globally for a broad range of ship owners charterers and also ship managers. Again, overall, this underlines the continued strength of our Maritime Services business and its growing contribution also to our recurring earnings base. And with that, I'm happy to hand over to Philipp, who will take you through our first half financial highlights.

Thanks, Constantin, and good morning, everyone. Before I go into the details of the first half of this year, let me maybe briefly frame a little bit on the next slide where we've been coming from over the past years in terms of financial performance. as I guess this sets the stage nicely for discussing the financial development in the first 6 months of this year. as we develop the group from a strategic perspective, the strategic development has nicely translated into positive developments of our financial KPIs across the board. As you will see, we have a solid and growing revenue base. Management fees have grown over the years, every single year. As a matter of fact, and transaction fees have also become de facto recurring revenue base in a certain magnitude. Coal investments become a real stronghold of our business, along with the ramp-up of our co-investment portfolio over the years. and earnings growth has been ahead of revenue growth, as a matter of fact, with EBT more than doubling over the past 5 years which is basically driven by strong deal flow, high core investment returns and cost discipline on the back of a growing revenue base. And last but not least, obviously, a rock-solid balance sheet that should be giving us plenty of optionalities to develop the business further. And the first half of this year continues along all of those trends and maybe starting with the P&L. Total revenue for the first half of this year came in at EUR 22.8 million, which is up 6% compared to the prior year period. And looking at the composition management fees increased by 4% to EUR 18.7 million, now comprising above 80% of total revenue. which is certainly worth noting given that this is the contractually recurring part of our business. And as we've discussed on previous occasions, by now covers almost the entire cost base of our operations. Transaction fees up 19% year-on-year, coming in at EUR 3.7 million. mainly reflecting the high level of activities in our Maritime investment business as Constantin alive to a minute ago. And regarding total revenue, it's worth noting that total revenue came in above the prior year period despite a weaker dollar, which impacts our business, obviously, given the revenue base and the euro cost base. The negative effect of the weaker dollar compared to the first year of 2025 is about EUR 1 million on our earnings revenues and earnings. So this should be taken into account when reading the financials. Moving down the P&L. On the cost side, personnel expenses increased reflecting the build-out of our platform, in particular, the service platform. But this was more than offset with lower other operating expenses, which came in at EUR 6.5 million. And as you will recall, we have seen quite a number of changes in our cost base over the past 2 years. along with the development of our Maritime Services business and related M&A and integration work. With this behind us, you can now take the H1 2026 cost base as a recurring level of cost going forward. The financial results increased substantially, core investment return above EUR 14 million in the first half. And with this earnings before taxes disproportionately increased by EUR 34 million -- 34% to EUR 17.1 million, up from shape below 13% in first half of 2025. We have higher minority interest in the first half of this year, which is attributable to our core investment portfolio. So net earnings per share are up 20% year-over-year coming at EUR 0.39 per share for the first half. Let me turn to the balance sheet and our financial positions. I'll keep it short because the structure has not changed. Overall, the balance sheet is built for opportunities. As Constantin mentioned it. We look at very low leverage basically no leverage, meaningful cash position and a growing core investment portfolio, which continues to generate substantial returns. Our cash position slightly below EUR 40 million and equity ratio improved further to 89% as of the end of H1. Let me drill a little bit into the core investment portfolio because it is the most important and more substantial part of our asset side of the balance sheet. As a reminder, on the German gap we are recording our co-investments at historical acquisition costs. On that basis, the portfolio stood at just shy of EUR 100 million as of end of June '26. On a mark-to-market basis, the portfolio is worth EUR 78 million. So we do see a substantial headend reserves in our balance sheet which then obviously translate into embedded earnings potential from our core investments for the coming years, which will be realized over the coming years as we go along. On the allocation to asset classes measured in book values, the maritime part of our core investment portfolio is the dominant 1 with almost 3 quarters measured in market values, you would see that the portion of the core investment -- Maritime co-investment portfolio is even higher than the 3 quarters, which is also a good reflection of where value is created today in our group. And on the income side, as mentioned, co-investment income rose to EUR 14.2 million in the first half of this year. And it's not only an increase compared to the prior year. It's also a step-up in particular, the yield from existing co-investments, which is the lower part of right most illustration. So we do see higher recurring income from our co-investments and we had quite substantial incomes from exits also in the first half of this year, which contributed to earnings significantly. Maybe a word on capital allocation. For completeness, for FY '25, we paid out a dividend of EUR 0.27 per share. which corresponds to a payout ratio of 41%, which is well in line with our dividend policy of distributing up to 50% of consolidated net profit. As in prior years, the dividend was paid out from the tax contribution account. And if we take a step back since '21 where we initiated our dividend payouts the dividend yield averaged around 6%. As I said, again, on a tax-free basis, and our approach going forward will remain unchanged. We will see distributions while retaining flexibility in the distribution because we see, I mentioned significant growth potentials in our business -- as you will hear from Constantin, the plant is well fields. So we will continue to balance growth with dividend payouts in a disciplined manner as did in the past years. And then on guidance and outlook, as you've seen, we've upgraded our guidance based mainly on a strong performance of the first half year. and strong expected transactions in the second half of the year and continued healthy cost and returns, we now expect revenues to come in between EUR 50 million and EUR 53 million in earnings before taxes between EUR 30 million and EUR 33 million. So that's on the midpoint on a 20% increase in revenues compared to 2025 and in terms of EBT at 25% up and EBIT on the midpoint guidance compared to 2025. As you will see from the guidance, revenues in the second half of the year expected to be above the first half of the year. Management fees will be slightly up, and we expect to see a significant step-up in transaction and project fees in the second half of the year. And at the same time, we expect the return from our coal investment portfolio to be slightly lower in the second half of the year, which is mainly due to the fact, as I mentioned, that we saw significant exit returns in the first half of the year, which we not expect to see in the second half. So it will be a strong contribution from transaction and project fees in the second half of the year, which mainly drove the upward correction of our guidance. And with this, I'll pass it back to Constantin for an outlook and a summary.

Yes. Thanks, Philipp. Let me continue with the outlook section. And when doing so, let me take a step back and look at how our platform has developed and how this supports our future growth ambition on the next slide, please. As you can see on the left-hand side, our assets under management have grown significantly over the past decade from around EUR 1.7 billion to EUR 5.4 billion in 2015 and even a tad more today. And that's an annual average growth rate of roughly 12% per annum. A key contributor to this growth has also now increasing exposure to energy transition-related assets, which includes fleet renewal and shipping, but also other energy-related projects, and they have expanded at a faster pace and now represent a meaningful share of our overall and AUM. And this track record gives us the -- build a strong foundation for the next phase of our development. And looking ahead, we intend to continue this trajectory and we see basically 3 structural drivers that support this. Firstly, we do operate in structural growth markets, and I think this is a very important aspect, the energy and maritime sectors basically shaped by not only the energy transition, but also evolving market dynamics and matters like supply chain security. They require substantial long-term investments. And this drives a sustained demand for capital and certainly for expertise, and we believe this is exactly the sweet spot where we operate. Secondly, our industrial or let's call it, owner-operator approach. This, in our view, remains a clear differentiator and allows us to serve investors, maritime clients and other partners in a fairly integrated form and fashion and allows us to capture value across the full life cycle. And thirdly, and it's a repeating scheme, obviously, and we continue to operate from a very healthy and resilient base, which includes the balance sheet measures like equity ratio or also our cash position gives us the confidence, but also the flexibility and stability that we need in order to pursue our growth ambition. On top of these structural drivers, we also have a very tangible and I would say, near-term source of growth already locked in referring to the 37 new buildings currently under construction, but also other potential inflows in terms of AUM and pipeline that we are working on. Overall, we believe this combination of track record positioning, market dynamics and also contracted pipeline puts us in a very strong position to continue the expansion of our platform going forward. Now before we open the floor for questions, let me summarize our outlook. If there's 1 headline, I would like you to take away from this page. It's the headline here and that is that we have a very high earnings visibility in combination with high flexibility as far as our balance sheet is concerned. We have recurring service revenue, contracted transaction fee and the co-investment income that together give us a clear line of sight on earnings going forward. And that visibility is really the foundation for the following points on this slide. I mean build on that foundation, there are basically 3 things that we are focusing on, firstly, we want to continue to scale our Maritime service platform. It's now well established, and we see substantial growth opportunities ahead, both organically but we also see next to growing with our existing clients, certain anagenic opportunities where we certainly remain open to further consolidate opportunities in what is still a fairly fragmented market. Secondly, we intend to convert our investment pipeline into growth. Our already contracted projects will contribute to midterm growth. and we are already initiating new platforms to build on this. And thirdly, we remain focused on navigating macro uncertainty, which is obviously all around us. So the world is not an easy place, but we believe that our diversified business model gives us resilience on the 1 hand in what remains a volatile environment, but also allows us to actually create opportunities out of the volatility. So overall, we're well positioned to continue delivering sustainable and also profitable growth and build on the continued effort of our colleagues across the group and the ongoing trust and support by our partners and shareholders, we look forward to what's ahead. And with that, I would like to hand back the word to Monika to take your questions.

Thank you very much for your presentation, Constantin in Philipp. Ladies and gentlemen, it is your turn now as we move up to the Q&A session. [Operator Instructions] And there is a risen hand from Christian Bruns. I will allow you to mute yourself now, you should be able to ask your question.

Sorry. I need some clicks. Yes. Thank you very much for the presentation and also congratulations to your guidance upgrade. My question is on the -- you said you had a stronger also recurring earnings from strategic Maritime investments, which was a very impressive 36% up the co-investment performance. So where it does it come from mainly? I think it's mainly from the MPC containerships. Or could you give a little bit more detail on this?

Yes, sure. The question for the question. You're right. That mainly relates to our holding in NPC containerships, which drove the uptick in the yield from our investment portfolio. that's mainly due to that participation.

Okay. And maybe then another question on your dividend policy, I know that you have -- you pay out up to 50%. And -- but does it also depend on dividends paid by MPC containerships or what doesn't this play a role for you complete dividend?

I would say it plays a role as the development or other parts of the business play a role. I mean it's -- income from our participation in NPC containerships is important given it's our biggest co-investments or investment holding. But I mean we have a dividend policy that is linked to net earnings. So the profitability of our co-investments in the profitability of our operating platforms will drive the absolute level of dividend going forward. And as mentioned, it is by intent also a dividend policy that allows us to also balance obviously growth potentials, value-adding growth potentials that we see in our business. I think we have quite a good track record in terms of coinvestment performance being realized. So yes, it's kind of short, the earnings for MPC Container has play a role as all other parts of the business.

Okay. But then I would assume if you say it's mainly its dividend policy depends more, of course, on earnings and EPS, then I would assume that your dividends might go up in a similar way than your earnings?

That's based on the policy of fair assumption.