Mutares SE & Co. KGaA

Dear ladies and gentlemen, a warm welcome to the preliminary financials of the fiscal year 2024 and the Q1 2025 earnings call of Mutaris SE. All participants have been placed on a listen-only mode. This conference also will be recorded. In case of any questions, please reach out to us via ir.mutaris.de. Let me now turn the floor over to your host, Mark Friedrich.

Thank you, everyone, and welcome to this call today, as we planned, but had to publish yesterday, that we only can publish preliminary financial statements. And that is mainly due to what you read here again on the page and what you read yesterday in the press release, that we have more documentation requirements and more auditing work to be done, especially for one complex special situation that we experienced here over the last couple of months. And let me give you here a bit of more color what happened over the last couple of months, especially since this is due to one topic that you are all aware of, which is called Seneca, where we experienced a situation where standard accounting frameworks meet a situation that is non-standard. Like we experienced here with Zernike what we had to discover after the acquisition in December and therefore had long discussions with our auditor and also long discussions internally how to reflect this properly in our financial statements and consolidated financial statements. And we demonstrated over the last couple of months that we had no control. over Zernike and therefore do not consolidate Zernike in our group financial statements. The auditor obviously has to really look into this in very detailed and also inside internally and finally also came to the conclusion that our assessment is right, that we had no control and therefore it's appropriate to not consolidate Zernike in our group financial statements. And what you saw, what we published here yesterday reflects the current picture that is from also the auditor's perspective as of today, the right one. And therefore we also felt comfortable in order to publish this with the current standards. And you saw that we also already yesterday announced that we want to pull forward the publication of Q1 and put this forward to this morning because we wanted to demonstrate here solid progress like we also explained on the 4th of October, where we highlighted pretty much the way forward. Back in October, we looked forward until the end of the year. Johannes will talk about this in more detail. I will talk about this when talking about Q1 in terms of holding figures. But we wanted to demonstrate here and clearly show that the figures are going in the right direction and that we move the group in the right direction as we outlined on the 4th of October. Looking again back, what are the next steps? So you hear us today talking about preliminary financials for 24 and the Q1 financials 25, which we consider final. And we have agreed with our auditor that we have a kind of a agreed time plan to publish our then audited financial statements and consolidated financial statements for 24 on the 20th of May. And we agreed this morning that the annual general shareholder meeting can be held on the 2nd of July and the calendar will be adjusted accordingly. And with this, we move on to the agenda and I hand over to Johannes.

Thanks so much, Mark. And also from my side, a warm welcome to this earnings poll here on the 29th of April. So I will guide you quickly, backflash, and then the company and business model reminder. Key highlights before I hand back to Mark for the preliminary financials 24 and the Q1 2015. So I said a little backflash. On October, that was the last time we heard each other in that kind of forum. And we're also considering for this year that maybe closer to the summer and closer to Christmas, maybe we will have another informal call where we give a business update. But in October, that was the last time we met in this forum. And what have we promised in October is, firstly, we continue to grow with larger acquisitions. also in the non-auto segment, which we did with Magirus, which we did with, for example, Budero's Edelstahl. Both acquisitions are running quite nicely. We just passed the 100 days roughly after acquisition, and they are developing as expected or even slightly above expectation, for example, for Budero's Edelstahl, where we also benefit significantly from the defense hype. Secondly, we continue to grow profitable, which you see as we have achieved our guidance on the holding level on 24. And as you see also, it continues in Q1 2025. Thirdly, stabilize and improve the strategic performance of the automotive and mobility segment. I'll come to that later and give you a little bit of insight on the war story as well, where I think in the current circumstance that it was one of our main exposures is in auto. And obviously the circumstances are not the brightest one at the moment, but we managed to stabilize it, even improve it. And we are in a good position, in a very good position to participate now differently also in the market. And last but not least, initiation of and deliver of sell side transactions. which we have done with Steyr and which we have also done in Q1 with Alcura. And there will be much more in Q2 where we are really, really on the final line at the moment with several transactions. Last but not least, Q1 confirms what we have promised Also in October 2024, we continue to parse, we continue the journey here as well. And maybe an insight from not the CFO of the business, but the guy sharing the office with them. I think what happened in the last weeks, also together with the auditors and with every stakeholder involved, we tried to build up the complexity. This was a great team spirit, team spirit of being world champion. And with no hierarchies, we just tried to deliver. And this was a great spirit. And I'm very happy that we could achieve the numbers of 24. And I'm very happy that we already closed the Q1 2025 with very successful results here as well. Reminding you quickly on the business model and our target. operating more globally every day, more and more. So we have opened Chicago, we have opened Shanghai, we have opened Mumbai, and we also see assets in our buy-side pipeline and also in the build-up of our portfolio where we really have a global footprint, where we really operate with the different offices, We run currently, for example, a project where almost every continent is involved. We talk about 35 sites, which the asset has. So our global footprint really pays off. We are in four. Segments where automotive is still the largest one. I'll come to that later on and give you a little bit more insight into that. But surely we have risks, but we also have every day a chance in that portfolio due to the great diversification. Target company size, we still speak about 100 to 750 million. Personally, I would believe our sweet spot is somewhere between two and four or 500 million now. And this is also what we currently look into the pipeline more and more. The best example is Buderus and Magirus, for example, who are exactly in that range. And last but not least, I think we have our turnaround specialists. We have our turnaround heroes. flying around from Monday to Friday, trying to make the companies better, and especially in critical situations, but also in up-current situations like we have in our portfolios where there is, for example, defense involved. We need them, and they are the greatest assets we have, and it's very nice to see also the development of this over the years. we aim for is still the same so we acquire companies we acquire loss making shitty businesses which needs operational improvement and we restructure them we optimize them at the end of the day we sell them and the main driver of success in my personal view is the first stage the realignment stage together with the acquisition stage we need to have a proper plan we need to make a good acquisition we need to save the money on the buy side part And then the first 100, 150 days are important to really change the culture, change the mentality, and pull the right strings in order to flip around the company as quick as possible, optimize it later on, and then prepare it properly for the exit, which we have done at the end of last year, also beginning of this year. We are currently out in the market with more than 10 processes. where in Q2 we will already see a good portion of that materializing into a signing, and then the second part in the second half of the year. So with a holding period of five years when we started a growth, this is exactly the year of harvesting, and I'm super optimistic. We had started with Steyr, we have continued with Alcura, and I'll give you further insight in a few seconds there as well. Looking at our portfolio, we have the four segments, as I said, automobility, and let me spare a few minutes here on this one. The challenge of automobility is the change, more or less the daily change. If it comes to tariffs, if it comes to availability of parts, if it comes to strategic changes of the OEMs, when it comes to electrical vehicles, EV or ICE vehicles. So we are constantly in a changing mode. The industry is not settled, it's not down. The industry is just simply changing day to day. And the strategy we started a couple of years back where we said we want to consolidate, we want to have the large groups, we want to have the plastic group and the metal group really, really, really paid off. Very simple example. I think the size of the business helped us to really have another word, really have the right ears and the right people we talk to at our customer base. So with Amaneos, I was personally involved. We had a company, order book is full. We received a lot of orders, but the call-off didn't count. The call-off was just 30, 40, 50% down compared to what we have planned, compared where the investments were made for. and compared to what we were awarded. Now, this is a discussion you have to hold with the OEMs. And if you are a 60, 70, 80, 90 million business, the power of negotiation is very little. With our large groups, with us being motorists, having close to a 3 billion exposure in the automotive, We get to listen. They have to listen to us and we listen to them. And at the end, we find a really good solution. So that the Amaneos group, where this company was in, is now in a very good shape. It's in a very good shape, a very good status to accommodate what is expected from Amaneos in the future. We are one of the leading plastic injection molding business, interior and exterior. And this is what we want to be. We always wanted to be, and we wanted to be one of the significant players in this industry, in this specific market. And I think we are there yet. We need to build it up. We need to harmonize it. We need to stabilize it. And then this is the right asset also for the years to come in a divestment situation. On the engineering technology side, as I said before, there's always a risk in a portfolio, but due to the diversification, there's also a chance, right? So we were very frightening looking yesterday to Spain and Portugal with the shutdown. We have EFASEC, the largest manufacturer in Spain and Portugal for transformers. So there is a chance. There is a chance every time. Steyr, I recall when we acquired Steyr, we had long and intense discussions internally in the board, but also with the supervisor board. Is it too small? Do we really want to go into defense? Is that the right thing? Boy, this was the right decision to do, and I'm very happy that we have it. So in general, the engineering technology segment is one which is – Going quite well on the project business side. We are very happy with the early developments of Buderus and Magirus. And obviously, everything around energy, everything around defense, everything around this is, at the moment, quite shiny and quite good. Goods and services. There we have a portfolio which is kind of mature over the other ones. So, for example, the top three, you see Palmyra, Connexus and Terranoa. We hold them since a certain period of time. We have done the turnaround. We have done the optimization, especially also for Terrano. We have buy and build. And those are all candidates for an exit. They are ready. We have done our bit. We have done the 80%. The operational team have done a great job there. And those companies are highly profitable. Order books are full. So there is a good chance that also those will be part of the exits in the next month to come. And then we have retail and food, where we carefully look on the development. We have divested Fasana and Tamarkinio in quarter one. We have acquired Natura, a very cosmetic and drug chain in Poland. The start looks very, very promising, even better than we thought at acquisition. Our team, I think, is doing a wonderful job there, and we are very optimistic when it comes to Natura. On the other side, we are carefully looking that retail and food segment. We have started that segment not long ago, and we will evaluate if this is the right industry for us to bring forward. Obviously, as you can imagine, retail is currently super, super challenging, and the customer on the B2C spend is quite careful to spend money. So we're carefully looking there. We have with Keeper a nice performing asset there. Klaessner Molkerei is doing okay. But the really retail part, such as Brennerthal and LaPair, is something we need to carefully watch. And we do carefully watch. So far, a little bit the insight on the portfolio to give you a first glance. Let me share with you the key highlights, key highlights of 2024 and the key highlights of quarter one. So in 2024, we have made 13 acquisitions. I want to stress out here that there were a lot of bold on acquisitions for candidates which we want to divest. So for example, we have there the bold on acquisitions also for Terranoff, for example, And we have strengthened the automotive groups with KMB, with Prince, with HPC. We have strengthened the automotive groups in order to finalize our build-up of these two large giants, Farrell United and Amaneos, to be a real, real partner for the OEMs. On the sell side, we have divested Frigos Cania, which was the largest exit last year, to Duxer, cooling logistic company, faster turnaround than expected. A great effort by the CEO, by Peter and his team at that point in time. And also on the sales side, we were quite successful. Geographically, I think an important to understand there, we want to be there in countries where others are leaving. And China and the US at the moment are those countries. So it was absolutely the right decision. In China, we have made the first deal, 24 with Pikachu. And there are more up. there in the pipeline, because companies are leaving China now due to fear, due to geopolitical situation, etc. Same happens for the US. So we are very optimistic that our newly formed office in Chicago, with Fabio leading that, is very successful. And we see also the first deal to come. We are an exclusivity for the first deal in the US to be made. So 2024 overall successful year on the buy side to strengthen the portfolio. First exits out of the growth case five years ago, and a lot more to come in 2025, which leads me to the quarter one in 2025. What have we done? Seven acquisitions, Magirus and Buderus Edelstrahl at the top, Nervion in Spain, very interesting industrial service business, logistic business two in the Nordics, After a super successful exit of Frigos Scania, before we have exited Bexity in Austria, I believe logistic is one of our rockstar industries. And with VR logistics in Finland and with GDL in Sweden, I think we have two good assets. We just have conducted the 50 days meeting for the Swedish business GDL, which looks very, very promising. Also on the sales side, we have divested the majority portion of Steyr very successfully. And we have divested a huge part of Alcura, which was always the strategy. When we acquired Alcura October last year and signed the deal, closed it out in November, we already wanted to split the service, the care business from the equipment business. And that is what we finally did. Revenue-wise, we kind of split away 30% of the revenue. But you can imagine multiples in medical care business are different than in, let's say, the automotive spot. So we received a very attractive multiple. The deal will be closed in May. And this is one of, to be fair, one of the larger exits in the last two to three years, despite the fact that the revenue is very low. And then the listing and the sell-down of Steyr Motors, where we listed it with 70 million of market cap. At the moment, the share price has tripled. There will be an annual meeting, I think, on the 7th or the 8th of May. Dividend of 55 cents per share is announced. So overall, from the thinking we had when we acquired it from Thales and the discussions we had to what is it now, I think, This is one of the most amazing stories of the last past years since we are here. And then last but not least, geographical extension, India, largest country in the world. We opened our Mumbai office. We are very, very close to make the first deal. I've physically been in India. Potentially, I need to go there next week as well to do the final shot there. And then we also have the first deal done in India, where I think there's also a great market for the future. And looking forward, I also believe that other countries in Asia, predominantly Japan and South Korea, are interesting markets for us. And with that, I will hand over to Mark, and then we will see each other for the outlook again.