Mutares publishes annual report 2022 and records renewed growth: Mutares Holding’s net income rises to record level of EUR 72.9 million in 2022 and is expected to continue to grow strongly in 2023
- Mutares Holding’s revenues from consulting services and management fees increase to EUR 71.1 million (previous year: EUR 50.5 million)
- Net income of Mutares Holding for the financial year 2022 of EUR 72.9 million (previous year: EUR 50.7 million) within the expected range
- Resilient business model secures net income even in uncertain times
- Stable base dividend of EUR 1.00 per share planned (previous year: EUR 1.00), additional performance dividend of up to EUR 1.00 per share (previous year: EUR 0.50) dependent on further exit proceeds up to the Annual General Meeting
- Group revenues rise to EUR 3.8 billion (previous year: EUR 2.5 billion), Group EBITDA at EUR 181.5 million (previous year: EUR 566.5 million)
- Forecast for the financial year 2023: the Management Board expects net income of the Mutares Holding in the range of EUR 92 million to EUR 112 million on consolidated Group revenues of EUR 4.8 billion to EUR 5.4 billion
Munich, 18 April 2023 –Mutares SE & Co. KGaA (ISIN: DE000A2NB650) today published its annual report and figures for the financial year 2022. Thanks to its business model, which is resilient even in challenging times, renewed growth, both in the Group (Mutares Group) and the Company (Mutares Holding), was achieved in the financial year 2022. The growth is mainly driven by the high transaction activity with twelve completed acquisitions in 2022 and is supported by all segments across the Mutares portfolio. On the sell side, Mutares was able to close six exits in the financial year 2022.
Net income of Mutares Holding shows robustness of business model
The revenues of Mutares Holding resulting from consulting services to and management fees from the portfolio companies increased to EUR 71.1 million in the financial year 2022 (previous year: EUR 50.5 million). The 41% increase is due to the high transaction activity and the related portfolio growth. Revenues and dividends from the portfolio result in the so-called “portfolio income”, which more than doubled to EUR 139.8 million (previous year: EUR 64.9 million) for the financial year 2022. Net income of the Mutares Holding increased by 44% to EUR 72.9 million (previous year: EUR 50.7 million).
In order to allow shareholders to participate in the success on a sustainable basis, the Management Board proposes to this year’s Annual General Meeting to distribute a base dividend of EUR 1.00 per share (previous year: EUR 1.00) for the financial year 2022. An additional performance dividend of up to EUR 1.00 per share (previous year: EUR 0.50) is to be proposed, depending on further successful exits up to the date of the Annual General Meeting on 10 July 2023. In determining the final dividend amount, including the performance dividend, the Management Board will be acting prudently and, above all, with a view to growth.
High acquisition activity ensures dynamic growth
The Mutares Group generated consolidated revenues of EUR 3,751.7 million in the financial year 2022 (previous year: EUR 2,504.0 million). The significant year-on-year growth of 50% again reflects the high acquisition activity. Group EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to EUR 181.5 million in the financial year 2022 (previous year: EUR 566.5 million). In a year-on-year comparison, it should be taken into account that the previous year was extraordinarily positively favored by the acquisition of Lapeyre and the associated high profit from the bargain purchase. The gains from bargain purchases associated with the acquisition activities in the financial year 2022 amounted to EUR 262.0 million (previous year: EUR 692.7 million).
Adjusted EBITDA[1] was EUR -32.7 million in the financial year 2022 (previous year: EUR -41.3 million) and was negatively impacted by price increases on the procurement markets and the still negative earnings contributions from the investments acquired in the past twelve months. Adjusted EBITDA improved continuously over the course of the quarter. The improvement in adjusted EBITDA compared with the previous year and the improvement over the quarter are the result of successfully implemented optimization programs. The Goods & Services segment in particular recorded an extraordinary year-on-year improvement in profitability.
Cash and cash equivalents in the Group amounted to EUR 246.6 million as of 31 December 2022 (31 December 2021: EUR 255.1 million). The equity ratio was 24% as of the balance sheet date 31 December 2022 compared to 29% as of 31 December 2021.
Transaction record with 14 acquisitions and 6 exits – promising transaction pipeline
On the acquisition side, Mutares benefits from its strong reputation as a special situations investor, resulting in constant access to attractive acquisitions. In the financial year 2022, Mutares signed agreements in the three segments Automotive & Mobility, Engineering & Technology, and Goods & Services for a total of 14 acquisitions – thereof eleven platform and three add-on investments – and successfully closed ten of these acquisitions in the reporting year and two others that were already signed in the previous year.
The increasing maturity of the investments acquired in recent years and, in particular, the successful optimization activities enable a growing number of investments to have completely passed through the life cycle as part of the Mutares value creation process and reached the so-called “harvesting” phase. This is underpinned by the sell-side transactions implemented in the financial year 2022: Mutares was thus able to transfer six companies into the hands of new owners.
The pipeline of acquisition opportunities is also promising with a view to the financial year 2023. On the exit side, Mutares has also initiated further sales processes for some of the “mature” investments.
Growth in all three segments
In the Automotive & Mobility segment, revenues increased to EUR 1,081.6 million in the financial year 2022 (previous year: EUR 719.9 million). In particular, Light Mobility Solutions (LMS), which was acquired in the second half of 2021, and the acquisitions of MoldTecs and Cimos, which were completed in the second half of 2022, contributed to the increase in the segment’s revenue. The segment’s EBITDA was EUR 34.8 million, compared with EUR 86.4 million in the previous year, and was again boosted by bargain purchases. Adjusted EBITDA adjusted for special effects amounted to EUR -49.0 million (previous year: EUR -20.0 million), in particular, due to higher raw material and energy prices and the still negative earnings contributions from the new acquisitions.
The Engineering & Technology segment recorded an increase in revenues to EUR 1,176.0 million in the reporting year (previous year: EUR 872.0 million). The main contributors to the increase were the acquisitions made in the reporting year (above all Special Melted Products and VALTI) and the first full-year inclusion of La Rochette Cartonboard. Segment EBITDA reached EUR 138.5 million in the reporting period (previous year: EUR 64.3 million), benefiting in particular from the bargain purchase gains from the aforementioned acquisitions. Adjusted EBITDA was EUR -3.9 million, compared to EUR -2.0 million in the previous year, partly due to the still negative earnings contributions from the new acquisitions.
Revenues in the Goods & Services segment increased to EUR 1,494.2 million in the financial year 2022 (previous year: EUR 912.4 million). The increase is mainly due to the first-time full-year inclusion of the Lapeyre Group, which was acquired in June 2021, as well as the acquisitions of Frigoscandia, Asteri and Ganter Group in the fourth quarter of the financial year 2021. Segment EBITDA amounted to EUR 23.7 million after the previous year’s figure of EUR 450.8 million, which was extraordinarily favored by the purchase of Lapeyre and the resulting bargain purchase in the amount of EUR 460.8 million. Adjusted EBITDA amounted to EUR 24.8 million in the financial year 2022 (previous year: EUR -13.2 million). The pleasing restructuring successes at Terranor Group, Frigoscandia Group and Ganter more than compensated for the negative effects from the new acquisitions.
Adjusted EBITDA differs significantly along the three phases of value creation that investments usually go through during their affiliation with the Mutares Group (Realignment, Optimization and Harvesting).
| Operational phase within the framework of the Mutares business model | Allocated investments as of 31 December 2022[2] | Revenues in EUR million | Adj. EBITDA in EUR million |
| Realignment | Automotive & Mobility
Engineering & Technology
Goods & Services
|
1,510.6 | -54.1
(-3.6%) |
| Optimization | Automotive & Mobility
Engineering & Technology
Goods & Services
|
1,279.7 | -23.2
(-1.8%) |
| Harvesting | Engineering & Technology
Goods & Services
|
963.9 | +49.2
(+5.1%) |
Outlook
Mutares again achieved record results in a financial year characterized by supply chain disruptions, significant price increases for raw materials, intermediates and energy, and overall challenging economic conditions. The Company’s expanded pan-European presence in recent years, combined with the trust it has built up and its track record to date, means that there are further extensive opportunities for growth in the future. Based on the already completed and additional signed transactions of the financial year 2023, the promising acquisition pipeline as well as the plans of the individual portfolio companies, the Management Board expects annualized revenues of the Mutares Group to increase to EUR 4.8 billion to EUR 5.4 billion in the financial year 2023. The net income of Mutares Holding is expected to be in a range of EUR 92 million to EUR 112 million.
At the same time, the Management Board confirms the medium-term targets, which envisage an increase in consolidated revenues to approx. EUR 7.0 billion by the financial year 2025. On the basis of Mutares Holding, net income is expected to increase accordingly to a range of EUR 125 million to EUR 150 million by 2025.
[1] Adjusted EBITDA is an EBITDA performance indicator adjusted for special factors. The calculation is based on reported Group EBITDA adjusted for transaction-related income (“bargain purchases”), restructuring and other non-recurring expenses, and deconsolidation effects.
[2] The investments sold in the course of the financial year 2022 contribute pro rata temporis, i.e. until completion of the respective exit, to revenue and adjusted EBITDA in the respective value creation phase.