Mutares SE & Co. KGaA ($MUX)

Welcome, everybody, ladies and gentlemen, for our fiscal year 2025 earnings call. With me today is, again, Johannes. And I will start today, running you through the management summary and reminder on [indiscernible]. Starting with the management summary, I want to highlight the financials. Obviously, in the beginning, we achieved a net result in the holding within the guidance, EUR 130.4 million and also made again a big step forward in group revenues. So the group again expanded quite a lot in '25, reaching EUR 6.5 billion and also with the preliminary financials and also with the press release today, we again repeated our midterm target of an annual growth of group revenues of at least 25% until 2030. Together with the financial statements, we published also dividend proposed by Board -- Supervisory Board and Management Board together proposed EUR 2 to [Audio Gap] which are a key success factor for us that for us, especially result normally first in acquisitions in the countries or regions. And then the team is also responsible [Audio Gap] and we want to use the portfolio that we have now built up for our increase in profitability. [Audio Gap] This, we want to achieve a return on invested capital within our holding period of 3 to 5 years of 7 to 10x. [indiscernible] step forward compared to last year. Most -- our biggest impact comes obviously from acquisitions, mainly the ones that we executed in the beginning of the year, [indiscernible] that were contributing to group revenues more than EUR 0.5 billion in 2025. EBITDA, also quite influenced by the acquisitions due to the buying purchases that we normally have due to the nature of our business model since we acquired a lot of assets and equity for a low price because the assets have a need for turnaround and transformation. And therefore, we have reached almost EUR 700 million of EBITDA. And adjusted EBITDA on the other side that is normalized for the one-off effects due to in and out in the group has also improved significantly, and we will see it on the next page in the different segments. From minus EUR 85 million to minus EUR 31 million, quite a big step forward especially in auto engineering and technology. Holding net income has reached EUR 130 million, mainly due to the exits that we executed in '25, namely [indiscernible], Fuentes and also [indiscernible]. When looking at the development of the different segments, the group. And you see here 4 segments by the end of '25, when we see each other in a couple of weeks and talk about Q1, you will see the new segments, Chemicals and Materials, by the end of 2025, we stick to the 4 segments that you are familiar with, and you see that we made quite a good progress in automotive in terms of the turnaround here from minus almost EUR 50 million adjusted EBITDA to minus EUR 9 million, mainly due to the development of SFC and the [indiscernible] Group. In engineering and technology, you see the biggest step forward here in 2025 in profitability. So [indiscernible], Donges and also here, it's a Goscor Group, which made a big step forward in 2025. Infrastructure & Special industries remained negative or turned negative compared to last year. Here, we had [indiscernible], which was actually quite a good from holding perspective, quite a good transaction, but obviously contributed to negative due to the acquisition in Q1. And also Magirus is in the bucket here. that's worth undergoing a quite substantial turnaround in 2025. And in combination, this ended up with minus EUR 40 million adjusted EBIT. Last segment, Goods and Services remained quite flat, obviously, quite dominated still from [indiscernible]. The headwinds remain, especially across Europe when it comes to retail. And I think we already said a year ago that this is a segment that might have no future within the Mutares Group. Looking at the life cycle, we see the familiar 3 phases here, busy realignment and you see a substantial loss in adjusted EBITDA, which is normal for us with more than EUR 160 million. The bucket is quite packed here, and you see also names that we talked about quite a lot. You see Efacec in there, but also Magirus where we communicate that these are value [indiscernible] and they are. They will move forward here when we talk about it in Q1 already. Optimization, you see that we are now actually where we need to be. We are close to the breakeven level when it comes to adjusted EBITDA this year, also slightly positive with plus 10%. But the biggest step forward was clearly in the harvesting phase, where we see also the biggest jump here of almost EUR 120 million in adjusted EBITDA. And Pretty much all of the 10 entities contribute positively to that amount here of EUR 120 million, almost EUR 120 million. And you see also here the names that we talked about it that we consider quite valuable also when it comes to an exit. And Johannes will go into details for some of them. And with that, I hand over to you.

Thank you so much, Mark. We will use these earnings calls also a little bit to dive into our portfolio and give you a little bit of update in the earnings calls of the quarter. So you typically will see one of our portfolios more in detail, and I will summarize a couple of them going forward in the next minutes. So when you look at our portfolio overall, we consider 5 segments in 2026, as Mark has said, auto, engineering, predominantly energy segment, Infrastructure and Defense, goods and services, predominantly B2B services and then chemicals and materials as the new segment where the SABIC transaction took place. So overall, those segments are roughly 40 companies. more than EUR 10 billion of annualized sales. And when you see our business model, right? And we buy these underperforming assets and we buy times like this where uncertainty in the world, geopolitical crisis, those are diamond for us. This is brilliant in order to acquire [indiscernible] businesses, which we want to turn around and make money out of it later on. So however, we buy the uncertainty. We buy a business which is not working. We identify it and with our operational forces, we try to turn around the business. And when you look at the overall portfolio and roughly 10% of what we buy we made the wrong estimations. We took the risk, but it doesn't materialize. 70% of what we buy exactly materializes in the way like we have planned. So we go in, we do the restructuring plan, we make our management -- consulting fees. We potentially take out some dividends if things are going well. And at the end, [indiscernible] return on invested capital. over the life cycle. So -- and then we have 20%, which outperform which performed much better and which gives us a much better return than we have expected. So in the past years, for example, [indiscernible] was one of these exits. I wouldn't be honest if I would say I knew it when I acquired [indiscernible] a couple of years back. But obviously, we had a plan with [indiscernible] going forward, make 7 to 10x cash and ultimately, it brought us EUR 170 million, so a lot, lot more than we have expected. So those are the 20% bucket which is the one which outperforms. And in the next couple of minutes, I will introduce you to 3 of this 20% bucket. So I will also introduce you to the 3 of this 20% bucket, which are potentially coming to an exit scenario in the next 12, 18 months, which also is reflected in kind of some sort of soft announcement we have made. So one of the companies, which is the one where we believe it's going much, much better is Efacec. So Efacec we bought from the Portuguese state and negotiated a deal starting in '21 with our Madrid office with Santiago -- and we turned the business around. So from minus EUR 70 million, the business is double-digit million positive. Business is growing, and Efacec predominantly does transformers, transformers for grid upgrades, transformers for centers together with switch gears, the package, which it makes money. We have slightly invested into upgrading test facilities in order to increase even further the output. And certainly in this current environment, Efacec could be in the next 12 to 18 months, a very lucrative candidate [indiscernible]. Next one is the NEM group. NEM Group we acquired from Siemens Energy is a heat transforming business. very much related and connected to the gas turbine. So wherever you need a gas turbine, you need a heat transfer system to control the in and outflow of it. And the company we bought from Siemens we have restructured the business. We have a huge order book. We have just also won a very large order in the LNG part offshore LNG in Europe and around. We have made it stable. We've made it enterpreneal and obviously, in the actual moment of the hot assets of energy, this is something we might also consider to divest. And last but not least, the third one, which was in the soft announcement already yesterday was Magirus. Magirus, a manufacturer of mission-critical vehicles. You see 2 pictures here on the slide. firefighting trucks, but also military trucks, military applications. Magirus as a company, we have acquired from Iveco. We have gone through a heavy restructuring think last quarter, [indiscernible], the CEO, was here presenting Magirus in a nutshell. And this is certainly a company defense sector, infrastructure critical, which will make us a lot of fun in the future and especially on the exit side. Coming to a quick outlook and also there, I would like to deep dive a little bit into portfolios rather than giving the general outlook, at all. So we are expecting 2 closings of buy-side transactions in the coming months. And I would like to go a little bit deeper into that and introduce them. So one is, as Mark mentioned, from [indiscernible] gas solution, a liquefaction business. So we do products, we do processes of liquifaction of gas, any kind of gas starting from biogas, LNG, ammonium, you name it. And obviously, this is a market currently, which is extremely growing. So we are back in the energy sources to the traditional energy, oil, gas, [indiscernible] project Borealis is one of the beneficiary of that -- the beneficiary of those investments. So whenever you need to transport gas and liquefying gas, you need a company like Borealis, it's an oligopoled market. Order intake is super high and profitability is double digit. It outperforms at the moment what was our expectation in the very beginning. So we're very much looking forward to close this transaction with [indiscernible], own the business and then drive it further. Currently, the company makes EUR 450 million of turnover. The order book is close to EUR 700 million. So a very, very bright outlook here. thanks to the change in the perception of the energy you're using. And then I think the company which was discussed the most was a project called Jadeed, the ETB business of SABIC predominantly in the U.S., which we acquired. In January, we signed a deal. We do expect a transaction close here also in the next months. We need to overcome here anyhow a heavy load of restructuring, but obviously, current market situation and being in the U.S., thanks to Uncle Donald here, Jadeed is one of the beneficiaries here as well. We benefit on the one side because we have a lot of manufacturing capacities in the U.S., we benefit from the tariffs. The U.S. have applied for imports, number one. And number two, we benefit from the price increases we could materialize towards customers because, obviously, resource of oil. It's very much linked to the oil price, the sales price of the product. So the higher the oil price, the higher the sales price of our product is. There is a direct link to that. So we are very optimistic also there to close the transaction in the next couple of weeks. And then on the business and take the joy of owning a business, which has had a great help for market at the moment. Those 2 transactions will bring a different picture, obviously, also to the group financials. We'll bring a lot of equity into the picture. We'll bring a lot of sales in the picture. And in addition, especially Jadeed. Jadeed marks a milestone in our U.S. story U.S. is a market where we want to grow. We see a huge pipeline. Fabio Picconeri and his team and we really want to go into the market of energy to the market of chemicals and metals and infrastructure into America. And this is the growth market in 2026 and onwards. And maybe to close today's earnings call, and I don't want to repeat all what Mark said. But we had -- 2025 was a record year, and this record year is only possible with a lot of people and a great, great team. And I'm very proud that I can lead this quad of some of the people you see here in the picture, who've done the hard work, go the extra mile, who always stay positive for fight day-to-day on the turnaround to fight day to day on a deal, we fight day to day on an exit to fight day to day on all the supporting functions to make this great, great results happen what we have and to make the great outlook we have in '26, '27 and on what's happened. So thanks a lot, at least to the team, and you deserve this, and it makes so much fun to stand here present the results and know what all happened in the background to make this happen. So thank you very much for today's call. Thanks for joining us. stay tuned, stay with us, and we are looking forward for another record year 2026 with Mutares, which I'm very sure we will achieve because we always delivered what we promised. Thank you very much.