Mutares SE & Co. KGaA ($MUX)

Welcome, everybody, to the Q1 update call of the Mutares Group. My name is Mark Friedrich, CFO of the group next to me is Johannes, CIO of the group, and we will hold or will run you through the presentation today. As last time, I will start with the management summary and then dig into Q1 2026. Johannes will take over again, portfolio updates and the outlook. Since we just spoke 2 weeks ago, I just want to repeat the management summary that we already presented last time. So last year, we reached quite a significant number in terms of holding net income, EUR 130 million, we reach our target here, where we're in the range. Also group revenues were in the range and communicated a guidance of EUR 7.9 billion to EUR 9.1 billion in group revenues and holding net income of EUR 165 million to EUR 200 million for 2026. The basis for this is actually the pipeline on sell side and buy side here. And actually, the basis for this, again, forms in the successful capital increase that we completed by the end of April. When looking ahead already, next milestone for us where we see each other then is the Annual Charter Meeting beginning of July, where the company proposed a EUR 2 dividend per share. When looking at Q1 financials, we again made a step forward in the group, reaching EUR 1.7 billion in revenues. Second half will be much stronger in terms of revenue and also EBITDA and adjusted EBITDA usually the completion of the already signed transactions, namely the ones that we presented last time, [ Borealis ] and -- or [indiscernible] at that will then massively contribute to the financials in the second half of the year. EBITDA, again, EUR 160 million due to the banking purchases of support transactions that we closed in Q1. I will mention the once we look at the life cycle. Adjusted EBITDA of EUR 11 million made a big step forward compared to last year across a lot of different portfolio companies here. Also here, I would name a few when we look into the segment. The net income of the holding is pretty much flat here compared to last year where we had EUR 30 million due to the exit of Steyr last year. This one -- this year, we had no exit in Q1 instead we already included here the consent fee of approximately EUR 6 million as an expense already. Therefore, you see a negative result. Otherwise, we would have been positive, as we communicated all the time that due to the consulting business, we also generate positive earnings. Looking at the portfolio and the different segmentation now for the first time with the 5 new segments that we have communicated here that we here also in the future. You see that 4 out of the 5 segments have a positive adjusted EBITDA reached in Q1 and only the one Goods & Services, it includes the majority of the retail part is still negative. When starting at the top Automotive & Mobility, we still have here reached a positive adjusted EBITDA in due to the big progress here in SFC Group and also [ Mans ] Group. Last year, we had a one-off year. That's why you see a substantial amount. But here again, I think it's a good progress when looking at the different portfolio companies here. Engineering & Technology did a turnaround here from minus 15% to plus 21%. Here, we have included NEM Energy and Efacec, especially and both have pretty much made a big, big step forward compared to last year, contributing massively positive to this segment. The new segment Infrastructure and Defense also made a big step forward here. And here, we have included, especially also Magirus that is a big step forward in terms of adjusted EBITDA, and we continue to do so throughout the year. I already mentioned Goods & Services, which remains in terms of the retail part, the complicated one, but we have also here in the segment quite a lot of different good ones. And these ones are performing well. And once reaching the life cycle will also dig into the different entities. Chemical Materials as a new segment introduced due to the upcoming acquisition of [ Jadeed ] now we have here included Holiday Pigments. But once we have reached the second half of the year, we will see here also much higher numbers. As always, we update our life cycle and the cluster into the 3 phases that we communicate all the time. And we have highlighted here in the life cycle the portfolio companies in green that we have upgraded, we have downgraded any entity and say we have upgraded 12 entities. And as you are familiar with our business model. We also target to divest already from optimization phase, but the majority should come from harvesting. When starting here also with the realignment phase, you see the companies at the bottom left. So ones that we closed in Q1, Haro, Holiday pigments, [ Perri ] and [indiscernible] and these combined entities contribute massively in terms of bag-in purchase. On the right side, you see the financials attached and it looks like quite sound, quite a key negative in terms of profitability and realignment, breakeven in optimization and substantially positive in harvesting. And when looking at the harvesting phase, we see here a lot of entities, and that's pretty much the transparency about what we had in the management summary where we said that we have a big pipeline in terms of exit potential. I mean looking at the life cycle, pretty much, this is what we actually also intend to deliver here throughout '26 and '27. And with this, I already hand over to Johannes for full year update.

Thank you, Mark. I don't want to repeat what was said 2 weeks ago. However, I will take you quickly on the portfolio in a on the outlook, and I would like to do that to give you a little bit of insight on the operations side and specifically on one company called Donges and how we work, what is our day to day in and out challenges we have. And then on the outlook, I will give you a little bit of insight on the M&A work. So how do we made the [ SABIC ] transaction happen in the U.S., which is now planned to close by the end of June. So if you look at our portfolio, the 5 segments, we are leveling into the 5 segments, which also gives us a good portion to be risk balanced. We are focusing at the moment on the buy side on the Energy segment, on the Infrastructure segment, on the Defense on the Chemical segment and on Industrial Services segment, where we see great opportunities to grow further also in Europe, but also especially in America and Asia. And one of the companies on the infrastructure side, we're having here in our portfolio is Donges. And we would like to go a little bit into detail of Donges. I'll explain you a little bit how we work, what is the day-to-day challenge. So the [ junction ] was done in 2017, we bought a steel manufacture steel business from Mitsubishi Hitachi at that point in time. They were very busy in the energy segment on the coal side of the business. Very much into buildings and very little into bridges. And we took over this business in 2017 November. Actually, this was my last job as the CEO before I became a Board member in 2019. And I went in with a group of people. I went in with guys like [ Matures ], like Christian Klingler, like Chris Slade, who is today leading the Supervisory Board, and we made a restructuring plan. We made on a piece of paper, on a blank piece of paper. We made we draw the future of the business, what we want to achieve, where we want to go. So we want to cut off the energy in the coal segment and we want to go into bridges. This was the overall strategy, what we did. And step by step, we had to conduct some social plans. We had to shift capabilities. We had to shift capacities into this new operation. And step by step, we grew the company from a [indiscernible] in time, EUR 35 million in sales to today, more than EUR 110 million in sales, and we grew the company from negative profitability to almost 10% profitability today. So Donges is situated in Darmstadt in -- very close to Frankfurt and is the leading steel bridge maker in Germany today. Quite some impressive buildings. And quite some impressive bridges as well, constructed over the past years. And with that, I would like to give you a little insight on Donges more what they do, and we have a little clip for you. [Presentation]

This was an insight on Donges, a company we developed very well over the past years. under the leadership of [ Dr. Vodkanellus ], who you saw in the beginning and the end of the movie, which brings me over to the outlook because Wolf is our young creative spirit and secret weapon we have. And Wolf was a very, very big contributor also to the outlook on the M&A transaction of [ Jadeed ] of the SABIC ETP business. Would you have to give an insight a bit on how we made a deal, how we come to the deal and also give you an update where we stand and where the business are. How do we work on M&A side. So we got into contact on this transaction through our network, and then we were approached by investment banks and the investment banks came to us and say, do you want to have a look. And we immediately formed a global team because we have the U.S. part, but we also have a European part. So we formed the team in the U.S. and in Europe in order to collaborate on the transaction. And operationally, we added an operations team led by Wolf Cornelius to evaluate the operational situation, the market, the technical skills, the equipment we would acquire. And overall, this led to the fact that after a very intense negotiation over Christmas, over New Year. So for us and for the team, there was no Christmas and New Year [indiscernible] because we signed a deal on January 6 in London together with the seller side. This was an intense transaction where everything has to fall into each other and click together. So the M&A team is obviously the sourcing bit. And the heavy lifting there. But it needs to click in with the operational knowledge and the know-how brought into the picture. It needs to click in with all our stakeholders on the guarantee side, with our stakeholders on the financing side, with our stakeholders on the legal side, on the tech side, on all at the diligence side, it needs to click in. So putting a deal and assembling a deal together in the size of [ Jadeed ], is an absolute great teamwork, and everybody needs to be willing to fight for his or her colleague in order to make it happen in order to make it successful. We have transacted on January 6. The deal is planned to close by the end of Q2. And in the meanwhile, we are following up on the business. And on the business side, the company is developing as planned from an operational perspective. And obviously, we have now a little bit of support from the market due to the Iran conflict where oil prices go up and very much the sales price of our products selling to the oil price, which means higher oil price, higher sales price. The impact on the feedstock is not neglectable, but it's also not compensating this profitability. So at the moment, we are quite happy business is going in the right direction. The market is going in the right direction. And operationally, they have done what we have expected since we signed a deal on January it. There is still some restructuring necessary after we close the transaction. So in the summertime, there will be the heavy operational lifting then. Handover will happen to the operations team, and we will move forward with this transaction and then have it, as Mark mentioned before, in the second half of the year, full ownership of the ETP business from SABEC mainly in North America. So this should give you a little bit of insight how a deal on the M&A side is structured, very proud of this and can't wait to have it the life in quarter 3 with us. Thanks a lot for listening in. Shortly after the earnings call of '25, we hope to give you a little bit of update on Q1. We see each other again on the 18th of August, we will public our half year's results on the 13th of August and then have our call, the 18th of August. The difference in dates is just pure to the fact that I'm on holiday on the 13th. So we will hold the call on the 18th. Thank you very much for hanging in. Have a good time, and happy summer. Bye-bye.