Mutares publishes half-year report 2018: Strong growth
- Group sales of EUR 467.0 million (+14% compared to prior-year period)
- First-time reporting of the additional key performance indicator “Adjusted EBITDA”
- Management expectations already fulfilled and very good outlook confirmed for 2018
Munich, September 27, 2018 – Mutares AG (ISIN: DE000A2NB650) today published its report for the first half of fiscal year 2018. Group sales in the reporting period amounted to EUR 467.0 million, an increase of around 14% over the same period last year (first half of 2017: EUR 410.1 million). The organic growth in the investments Elastomer and Cenpa, the acquisitions made in the course of 2017 with the two platform investments La Meusienne and Donges SteelTec as well as the strategic acquisition of plants in China, Mexico, Brazil, France and Germany for STS Group AG (ISIN: DE000A1TNU68) contributed to this increase.
Reported Group EBITDA was EUR 21.6 million and, as expected, below the EBITDA of the first half of 2017 (EUR 31.4 million), which was significantly influenced by transaction-related income (bargain purchases) of EUR 54.7 million in the Automotive and Construction & Infrastructure segments. STS Group AG will continue to be fully consolidated as a majority holding even after the successful IPO in the first half of the year. Gains from the IPO are therefore recognized in Group equity rather than in net income. The Group’s cash and cash equivalents amounted to EUR 108.2 million as of June 30, 2018.
New operating indicator Adjusted EBITDA
As announced, Mutares is introducing Adjusted EBITDA, a key indicator adjusted for non-recurring items, in order to improve transparency on the operating performance of the portfolio. The calculation is based on reported Group EBITDA, adjusted for transaction-related income (bargain purchases), restructuring and other non-recurring expenses, and deconsolidation effects.
This makes operating developments within the Group more transparent and communicates them more effectively. In the first half of 2018, Mutares generated adjusted EBITDA of EUR 9.3 million, more than double the figure for the same period of the previous year (EUR -13.5 million), which at that time was significantly influenced by the still clearly negative results of the Balcke-Dürr Group. The Automotive segment made a significant contribution of EUR 13.9 million to the positive result for the first six months of the current year, with the Wood & Paper and Consumer Goods & Logistics segments having a negative impact.
| In million EUR | 1. HY 2018 | 1. HY 2017 |
| Group EBITDA | 21.6 | 31.4 |
| Thereof: | ||
| Income from Bargain Purchases | -5.8 | -54.7 |
| Restructuring and other non-recurring expenses | 16.9 | 12.6 |
| Deconsolidation effects | -23.4 | -2.8 |
| Adjusted EBITDA | 9.3 | -13.5 |
Operating performance in line with expectations and five transactions in the first half of the year
As expected, in the first half of 2018 significant one-time operating expenses were incurred for the IPO of STS Group AG and for the settlement of a long-standing legal dispute. At the same time, substantial progress in the core segments Automotive, Engineering & Technology and Construction & Infrastructure contributed to the clearly positive earnings trend. Deconsolidation effects mainly result from the deconsolidation of Zanders GmbH.
On the transaction side, the successful placement of STS Group AG in the Prime Standard of the Frankfurt Stock Exchange was the focus of the first half of the year. Mutares was able to achieve an extremely successful capital multiplier of 22 with an equity valuation of EUR 120 million of the system supplier for the commercial vehicle industry developed with the buy-build strategy. Following the partial exit as part of the IPO, Mutares will continue to participate in the growth and performance of the STS Group as the majority shareholder.
Robin Laik, CEO of Mutares AG, sees the current business development as extremely positive and is confident that this trend will continue: “For the current fiscal year 2018, we have already met our ambitious transaction targets for 2018 with five transactions to date, including a significant partial exit, a platform acquisition and three strategic add-on acquisitions. In view of our pipeline and the general market development, we expect at least one additional transaction in the coming months”.
Net asset value of the portfolio
Based on developments and market conditions in the first half of the year, the net asset values (NAV) for the portfolio segments were updated as of 30 June 2018. The NAV is calculated as the sum of the segment valuations (assets less market value of debt plus net financial resources in Mutares AG excluding intermediate holding companies). For the calculation of the NAV, the sum-of-the-parts value of the individual companies continues to be taken into account, i.e. transaction activity, turnaround expertise and the brand strength of Mutares are not included in the following calculation:
| Segment | NAV as of 30 June 2018 (in million EUR) |
|
| Automotive | 103.4 | |
| Engineering & Technology | 69.6 | |
| Construction & Infrastructure | 25.7 | |
| Wood & Paper | 7.2 | |
| Consumer Goods & Logistics | 0.7 | |
| Net cash and cash equivalents | 41.4 | |
| Total | 248.0 | |
| NAV per share | 16.0 | |
Notes to the NAV in H1/2018:
- Automotive segment: STS Group AG was valued as of June 30, 2018, on the basis of the stock market price (XETRA) and the share held by Mutares AG in the total capital (64%).
- Engineering & Technology: Significant revaluation of Donges SteelTec on the basis of newly won projects, which are reflected in higher capacity utilization expected for subsequent years. The acquisitions Kalzip (add-on to Donges SteelTec) and Knorr Bremse Railway Services UK (platform), which had not yet been completed as of the reporting date, were not yet included in the valuation of the segment (closing still outstanding).
Conference call on September 27, 2018
A conference call in English will be held for analysts, investors and press representatives today at 14:00 (CEST). Registrations can be sent by e-mail to [email protected]