Mutares SE & Co. KGaA: Record figures in financial year 2019 for Group revenues, Group EBITDA and adjusted EBITDA – increased net profit (EUR 22.5 million, +12 %) – dividend proposal at previous year’s level of EUR 1.00 per share
- Group annual revenues of EUR 1,015.9 million (+17 %) in 2019 exceed the billion-euro mark for the first time – including seven completed acquisitions
- Positive earnings development in 2019: Group EBITDA EUR 79.2 million (+61 %), adjusted group EBITDA EUR 7.5 million (+67 %), net profit of Mutares SE & Co. KGaA EUR 22.5 million (+12 %)
- Continuation of the long-term sustainable dividend policy with a dividend proposal of again EUR 1.00 per share for the financial year 2019
- Current outlook marked by uncertainty due to the corona pandemic, but also by confidence in the long-term sustainability of the Mutares business model
Munich, 9 April, 2020 – Mutares SE & Co. KGaA (ISIN: DE000A2NB650), an investor specializing in companies in transition, today published its financial statements and annual report for the year 2019.
The past financial year 2019 of Mutares Group was marked by growth and success. The high acquisition activity with a total of ten acquisitions (seven of which were legally completed in 2019) as well as operational progress in various portfolio companies should be highlighted. Group annual revenues of EUR 1,015.9 million (+17 %) in 2019 exceeded the billion-euro mark for the first time and the group EBITDA climbed to a record level of EUR 79.2 million (+61 %). Adjusted EBITDA, which is adjusted for the special effects that the transaction- and restructuring-oriented business model regularly causes, also increased by 67 % to EUR 7.5 million and reflects the operational progress of various portfolio companies of Mutares Group. In order to allow shareholders to participate in the business’ success, the Management Board and Supervisory Board will propose to the Annual General Meeting on 18 May 2020, against the background of an increased net profit of Mutares SE & Co. KGaA of EUR 22.5 million (+12 %), a dividend of EUR 1.00 per share as in the previous year. This proposal to continue the long-term sustainable dividend policy of Mutares Group is made by the Management Board and Supervisory Board in joint confidence in the long-term sustainability of the Mutares business model.
Acquisition activity, consolidated revenues and consolidated earnings at record levels
In 2019, the high level of acquisition activity, unprecedented in the Company’s history, was achieved with a total of ten acquisitions.
The Automotive & Mobility and Goods & Services segments were strengthened by the total of six platform investments namely TréfilUnion, Plati Group, keeeper Group, KICO Group, BEXity Group and PrimoTECS. A further four transactions were implemented as add-on acquisitions for the expansion and further development of existing investments. The Donges Group has successfully completed two add-on aquisitions with the purchase of Normek and FDT. The completion of the acquisition of Ruukki Building Systems Oy, which was agreed in July 2019, is still pending as a further highlight of the Donges Group. In addition, the first add-on for the keeeper Group, which was only acquired in summer 2019, has already been won with Metsä’s napkin business in December 2019. The financial year 2020 got off to a successful start with the signing of the acquisition of the Italian postal business of PostNL and the takeover of Loterios as an add-on for the Balcke-Dürr Group.
Including the seven acquisitions legally completed in the financial year 2019, consolidated annual revenues in 2019 exceeded the billion-euro mark for the first time in the Company’s history: The Mutares Group achieved consolidated revenues of EUR 1,015.9 million in 2019, an increase of 17.4 % (previous year: EUR 865.1 million); on an annualized basis including the acquisitions, consolidated revenues already exceed EUR 1.5 billion.
Mutares also recorded positive successes in 2019 in terms of earnings development. The Group EBITDA reached a record level of EUR 79.2 million (previous year: EUR 49.1 million) with an increase of 61 %.
| EUR million / Mutares – Group | 2019 | 2018 |
| Revenues | 1,015.9 | 865.1 |
| EBITDA | 79.2 | 49.1 |
| Income from bargain purchases | -102.6 | -32.3 |
| Restructuring and other non-recurring expenses | 31.0 | 28.6 |
| Deconsolidation effects | 0.0 | -40.9 |
| Adjusted EBITDA | 7.5 | 4.5 |
| Consolidated Group net income | 16.7 | 12.0 |
| Earnings per share1 (in EUR) | 1.37 | 0.96 |
1) Diluted and undiluted
According to the Mutares Group business model, which is based on transactions and restructuring, the portfolio companies usually undergo the Group´s three operational phases of realignment, optimization and harvesting during their participation.
| Operative Phase according to the Mutares Group business model | Allocated Participations on December 31, 2019 |
| Realignment |
Plati Group KICO Group PrimoTECS2) TréfilUnion keeeper Group BEXity Group |
| Optimization |
Donges Group Gemini Rail Group Cenpa |
| Harvesting |
Elastomer Solutions Group STS Group Eupec Balcke-Dürr Group Klann Packaging |
2) Closing on Januar 31, 2020
The adjusted EBITDA, figure used for corporate controlling – in which special effects related to the business model are adjusted – differs significantly along these three phases. As expected, the platforms acquired in financial year 2019 make a negative contribution (EUR -13.6 million) to the adjusted EBITDA in their realignment phase. However, the positive contributions from the optimization (EUR 1.4 million) and the harvesting (EUR 25.3 million) phases result in a positive adjusted EBITDA for the Group. The 67 % growth in the Group adjusted EBITDA over the previous year clearly shows the positive operating performance of the Mutares Group in the year 2019.
Growth in 2019 reflected also in the balance sheet total increase
The high level of acquisition activity is also reflected in an increase in the balance sheet total. The decline in the equity ratio is mainly attributable to the balance sheet extension due to the mandatory first-time application of the new leasing regulations of IFRS 1633).
| EUR million / Mutares – Group | 31 Dec 2019 | 31 Dec 2018 |
| Balance sheet total | 848.5 | 630.8 |
| of which: cash and cash equivalents | 79.7 | 108.1 |
| of which: equity | 208.2 | 208.1 |
| Equity ratio | 24.5 % | 33.0 % |
3) According to the new leasing regulations of IFRS 16, a distinction between operating and finance leases is no longer required and all leases must be recognized in the balance sheet with only a few exceptions.
Favorable operating development in 2019
Key Figures 2019 by segments:
| in EUR million | Revenue | EBITDA | Adjusted EBITDA |
| Automotive & Mobility | 450.4 | 13.6 | 15.6 |
| Engineering & Technology | 482.0 | -3.8 | 4.7 |
| Goods & Services | 83.5 | 79.5 | -7.3 |
In the Automotive & Mobility segment, revenues for the financial year 2019 increased to EUR 450.4 million (previous year: EUR 437.0 million) due to the first-time inclusion of the new platform investments. The EBITDA of this segment amounts to EUR 13.6 million (previous year: EUR 10.5 million). As expected, adjusted EBITDA, which is adjusted for special effects, declined to EUR 15.6 million (previous year: EUR 17.5 million) due to the still negative earnings contributions from the segment’s new platform acquisitions.
The Engineering & Technology segment became the largest segment of Mutares Group in terms of revenues in financial year 2019. Revenues climbed significantly to EUR 482.0 million (previous year: EUR 298.6 million). This strong increase is the result of the full year effect of the acquisitions of Kalzip and Gemini in 2018 and the add-on acquisitions for the Donges Group (Normek and FDT) completed in 2019. The EBITDA decrease to EUR – 3.8 million (previous year: EUR 24.0 million) results, on the one hand, from the current losses of the newly acquired companies and, on the other hand, from a lower earnings effect from the acquisitions compared with the previous year (profits from favorable acquisition, “bargain purchase”). However, the adjusted EBITDA rose to EUR 4.7 million (previous year: EUR – 1.0 million) and thus reflects in particular the very positive annual course of the restructuring measures at Kalzip and Gemini.
Revenues of the Goods & Services segment, which was expanded through the three platform investments TréfilUnion, keeeper and BEXity, amount to EUR 83.5 million in financial year 2019 (previous year: EUR 48.7 million). BEXity does not yet generate any revenues for the Group since the transaction was closed at the end of the financial year. Benefiting from the income from bargain purchases in connection with the three transactions mentioned above, EBITDA amounted to EUR 79.5 million (previous year: EUR 2.9 million). Adjusted EBITDA for financial year 2019 was burdened by the negative earnings contributions of the new investments and amounted to EUR – 7.3 million (previous year: EUR 3.3 million). The development of the platform investment keeeper Group, which achieved important milestones of the restructuring plan in financial year 2019, was very favorable. The further development of keeeper Group will be positively accelerated by the integration of the napkin business (renamed “keeeper Tableware”), acquired from Metsä.
Invitation to Annual General Meeting with dividend proposal
In line with the long-term sustainable dividend policy of the Group, the Management Board and Supervisory Board have decided to propose to this year’s Annual General Meeting of Mutares SE & Co. KGaA a dividend of EUR 1.00 per share for the completed financial year 2019. If approved by the Annual General Meeting, this dividend, which remains unchanged from the previous year, corresponds to a dividend yield of 13.9 % based on the closing price of the Mutares´ share on 31 March 2020, thus ensuring that shareholders will participate significantly in the success of the growth strategy, irrespective of the current pandemic-related volatility of the Mutares share price.
This proposal for the continuation of the long-term sustainable dividend policy of the Mutares Group for the completed financial year 2019 is made by the Management Board and the Supervisory Board, despite the outlook marked by uncertainty due to the Corona pandemic, in joint confidence in the long-term sustainability of the Mutares business model.
Outlook 2020 under the current influence of the COVID-19 pandemic
With already two further transactions, including the purchase of the Italian Nexive business of PostNL with revenues of more than EUR 200 million, whose closing will be postponed to summer 2020 due to the coronavirus pandemic, and the acquisition of Loterios for the Balcke-Dürr Group, as well as the successful placement of a bond with a volume of EUR 50.0 million, Mutares has had a good start into 2020.
Given the ongoing COVID-19 pandemic, it is not yet possible to make a reliable statement on its economic impact on the Mutares Group. However, a significant decline in profitability can be selectively assumed for some portfolio companies. On the other hand, additional opportunities in the area of M&A on the purchase side can be expected in the second half of the year at the latest. Thanks to the strong focus on restructuring, the current crisis also represents significant opportunities for Mutares’ business model, for which Mutares is well prepared with its growing team of international transaction and restructuring experts.
The annual result of Mutares is based on various factors, on the one hand, from increasing consolidated revenues and the resulting income from the consulting business, on the other hand from dividends from portfolio companies and exit proceeds from the disposal of participations. Even in an operationally difficult year for many portfolio companies, Mutares generally considers itself in a position to achieve a high enough net income for the year to be able to continue its long-term sustainable dividend policy. Against this background, Mutares continues to see the chance to carry on its long-term and sustainable dividend policy of EUR 1.00 per share in the current financial year 2020, which is characterized by the coronavirus pandemic.