Mutares: Eight acquisitions in 2019 drive growth to EUR 1.5 billion in annualized Group sales

Group sales in the third quarter of the fiscal year at EUR 285 million (Q3/2018: EUR 182 million)
EBITDA increased by 15% to EUR 6 million compared to Q3/2018 due to transactions and, as expected, Adjusted EBITDA decreased by 8% to EUR 6 million
Acquisitions in fiscal year drive annualized sales to EUR 1.5 billion
First Capital Markets Day meets with great interest

Munich, November 07, 2019 – In the first nine months of 2019, the Mutares Group (ISIN: DE000A2NB650) generated total revenues of EUR 728.1 million (Q1-Q3/2018: EUR 649.5 million). The increase in revenue is mainly due to the acquisitions in the current fiscal year. At the same time, the operating result (EBITDA) more than doubled to EUR 73.3 million (Q1-Q3/2018: EUR 27.0 million). Adjusted EBITDA adjusted for transaction effects and restructuring expenses amounted to EUR 5.8 million (Q1-Q3/2018: EUR 15.7 million). As expected, especially the companies newly acquired in the last twelve months contributed negatively to Adjusted EBITDA with operating losses of EUR 6.5 million. The restructuring measures at KiCo, keeeper, Plati, Trefil Union and FDT Flachdachtechnologie (part of the Donges Group) are progressing positively and in some cases slightly better than planned.

As of September 30, 2019, the Group’s cash and cash equivalents amounted to EUR 65.3 million (December 31, 2018: EUR 108.1 million), while the equity ratio of the Mutares Group at 26% is still below the equity ratio as of December 31, 2018 (33%), due in particular to the mandatory application of IFRS 16 leasing regulations for the first time in 2019.

Strategic development of Donges Group progresses
In the Engineering & Technology segment, the integration and optimization measures initiated are on schedule, so that the strategic development of the investments, in particular of the Donges Group, continues to show pleasing progress. As expected, the latest acquisitions of the Donges Group, FDT and Normek, contributed losses to Adjusted EBITDA in line with their portfolio phase. The implemented improvement measures are expected to lead to a significant earnings contribution from the companies within the Donges Group next year. The business of customer-specific roof and façade solutions under the Kalzip brand, which was acquired by Donges Group in October 2018, has developed well above expectations and is expected to contribute a record year to Donges Group in 2020.

Significant growth through acquisitions in all segments in the current year
On the transaction side, two acquisitions were announced in the third quarter: For the Automotive & Mobility segment, Mutares acquired with Kico a new platform investment (revenue FY2018: EUR 100 million) in Germany and Donges Group (Engineering & Technology segment) acquired with Ruukki (revenue FY2018: EUR 130 million) a further strategic add-on in Finland (closing of the transaction pending). In addition, with the signing of the purchase agreement for Q Logistics (revenue FY2018: EUR 250 million), an excellently positioned platform investment for the Goods & Services segment was acquired after the reporting period.

Strong outlook
Following the eight acquisitions already made in the current financial year, the Management Board considers the portfolio to be diversified and sustainably positioned with a view to achieving the desired dividend capacity. Further operational progress in the now fourteen investments and one further transaction are expected for the end of the year.

Net asset value of the portfolio
Based on developments in the segments and the relevant markets in the third quarter of 2019, the net asset values (NAV) for the segments were updated as at 30 September 2019. The NAV is calculated as the sum of the segment valuations (assets less the market value of debt plus net funds) with a company-specific WACC of 6 % to 11 % (average: 9 %) and a uniform conservative growth rate of 0.5 %. For the calculation of the NAV, only the sum-of-the-parts value of the individual segments is considered, i.e. transaction activity, turnaround expertise and the brand strength of Mutares are not included in the following calculation:

Segment	NAV as of 30.09.2019 (in EUR million)	NAV as of 30.06.2019 (in EUR million)
Automotive & Mobility	39.1	44.8
Engineering & Technology	135.0	125.0
Goods & Services	16.5	16.5
Net cash & equivalents	5.5	9.4
Total NAV per share (in EUR)	196.1 12.87	195.7 12.85

Notes on the NAV in Q3/2019:
Automotive & Mobility: STS Group AG was valued as at 30 September 2019 on the basis of the stock market price (XETRA) and the stake held by Mutares SE & Co. KGaA.

Conference call today at 2:00 p.m. (CET)
A conference call in English will be held today at 14:00 (CET) for analysts, investors and press representatives. Registrations can be sent by e-mail to [email protected]. The webcast presentation can be downloaded at www.mutares.de/investor-relations