Mutares SE & Co. KGaA

A very warm welcome to our H1 2025 earnings call. I'm very happy to introduce you to a new format of the earnings call, which from now on we would like to share with you and we would like to host you. And in the new format, we want to introduce and we want to have more detailed insight on our portfolios. And as you can see, we are here now in a studio at the Magirus Museum in Ulm, presenting the Magirus Museum in Ulm. And later on, you will even get more insights on Magirus presented by the CEO of the company. Let me first get you through the agenda. So we're going to kick off with a reminder on a business model. Then Mark will lead through H1 financials. I'll give you a portfolio update where we will do some changes here. And then after the Margiris Insight, you also get an outlook on the second half of 2025. But first of all, let me remind you on our business model. And looking back on H1, I think it's also needed after facing the results out of the Gotham report, having the BaFin part, having the Seneca year and things. So I'm very sure H2 will be a very business focused, buying companies, selling companies, making shareholders, stakeholders and at the end also our people happy. Let me remind you quickly on the business model. Our mission is to transform these stressed companies. In other words, turning garbage into diamonds. Our values, entrepreneurship. I just came out of an interview and the most important character working for us is entrepreneurship. We are the normal ones and we are the trustable ones and we take entrepreneurial risk in order to create the diamonds. We want to be the global leader in special carve out situation. We want to be the first in mind, first in choice when it comes to corporates or large companies want to divest part of their business. And at the end of the day, we all do this to create shareholder value. Looking quickly on the investment highlights. Investing into Mutaris means you're investing in one of the leading global firms when it comes to de-stress assets turnaround situation. When it comes to that loss-making business, and yesterday we announced that we acquire business from Yoast, a grain business, mobile grains for trucks, for cars, and for marine applications. In this company, not much works. We have an oversized facility, a factory in Italy, which we need to work. We have working capital from here to the end of the world. And we have quality issues. We have unsatisfied customers. We have a sales network which doesn't work enough. And this is all what we have to fix. This is all what we have to fix in our turnaround scenario. You're investing in a very balanced portfolio. We have early cycle businesses, we have late cycle businesses, we have non-cycle businesses. So at any time, we have a chance to buy a company, we have a chance to sell a company, and we have a very stable deliverable throughout the entire portfolio. And at the end of the day, we do that for returns. We do that for shareholder valuation. We want to have an increased stock price. We want to have a proper dividend at the year end. And we want to satisfy all shareholders and stakeholders. Summarizing the operating model. We buy companies. That's the very first step. We have to acquire them. And for the second half of the year, the acquisition, when I go through the segments, what is our focus? On the acquisition side, on the automotive and mobility segment, which is one of our first, which is the first segment, we very much cherry pick. We want to focus to make our groups complete, the Amaneos Group, the Ferrell United Group. In engineering technology, we want to focus on the energy segment and on the building materials segment. For goods and services, industrial services is a big topic. With Nervion in Spain, we have just acquired a company which we want to further build also throughout the year. And then we want to focus on logistic companies. We have just acquired Intime, we have acquired Fuentes, and we want to focus also on the chemical part. So overall, I'm very convinced that we buy, again, companies with a total turnover in 25 of around a billion and above. And then we need to turn them around. Realignment optimization phase. This is where our 160 consultants work day and night, give everything and fight to make the company tomorrow a little bit better than the company is today. This is where we generate holding revenues through consulting fees, and this is where we generate holding income through dividends. And last but not least, and this is just a repetition of what we have said, in 2025 we want to achieve at least 200 million of exit proceeds throughout the entire year. Having started off with divestment of Steyr, having started off with divestment of Lokafarm, having starting off with the IPO of Terranor. There will be more in the second half of 2025 and I'm convinced to reach the 200 million here. And with that reminder, I would like to hand over to Mike to give you more insights on the H1 2025.

Thanks Johannes. Moving directly to the first slide, the key financials of the Mutaris Group and the Mutaris Holding. Starting with revenue, and you see here right away that we try to better explain the link between the different actions that we just heard from Johannes in the different lifecycle stages on our key financials. And starting on the left with revenue, we have increased the revenue by 20% in the group to more than 3 billion. And this was mainly driven by the number of acquisitions. Obviously, the acquisitions that we executed in the second half of 24 that have not contributed to the comparable number that you see here in 24, and also the acquisitions that we did already in the first half of the year. And these acquisitions also contribute substantially to the EBITDA. The EBITDA has reached almost 600 million in the first half and was mainly driven by the bargain purchases that we were able to negotiate in the big acquisitions of Magiros, Buderos, SFC Climate, and a couple of other acquisitions. And on the other hand, in the first half of 2025, also we have a major contribution from EXETS. in the group, namely the Steyr divestment, partial divestment, that we have done here and executed in the first half. And you see here below that we say part of it comes from the acquisitions. That is the first step in our lifecycle that we just saw. And the final step is the harvesting, the divestment. And this also contributes positively to the EBITDA in the first half. Then we have all that is in between realignment and optimization, and that is the main driver for the adjusted EVTA. The adjusted EVTA gives you an insight, and I will show on the next page the adjusted EVTA for the different segments. This gives you an insight where we stand in the progress in the acquisitions that we did, normally that we did months ago, because the newly acquired entities like Maggiros, like Buderos, they are coming to us because they have a need for restructuring, a need for transformation, and that comes along with substantial losses, substantial negative EBTAs, adjusted EBTAs in that case. And this brings me to the final figure, the holding figure. The holding key financial is for us the net result. And we saw on the last page that Johannes presented that we have inflows from our consulting that contribute to the net income. inflows from dividends and from exits, but all flows into the net reside of the holding. And you see here that we were able to increase it to almost 70 million in the first half of 2025, a substantial increase also compared to the first half in 2024. And this was again mainly influenced by the partial divestment of Steyr. In this figure, we have not any contribution yet from the partial divestment of Lokafarm or the IPO of Terranorm. Coming to the different segments, and here you see that we are quite okay in the automotive and mobility, even though it's still quite challenging due to the postponement of the start of new production lines or the shortfall in the call-offs from customers. Nevertheless, the segment was progressing well in the acquisition, namely here, Maticon. and SFC Climate were actually doing already well in the first half. Then, engineering and technology, a segment that you see here is substantially negative, even though we are always quite, or speak quite positive about the segment, and we still do it, because the setbacks that you see here, the substantial negative adjusted EVDA, is mainly driven by Maggiros and Buderos that aren't, by nature, big acquisitions that contribute substantially negative in the beginning. That's a business model. And on the other hand, we have companies that are operating already quite well and along the budget or even outperform the budget. And we just mentioned two here, EFASEC, who is producing energy infrastructure components, and DONGES, that is profiting quite well here in Germany from the governmental focus on the refurbishment of bridges in Germany. Then we have goods and services, also a segment that is actually in the past always positive. Today, we have here a slightly negative adjusted DBDA in the first half. This is mainly driven by the planned setback in Stewart. We acquired the company and knew that we will lose one of the major customers and have to replace it over time by new customers. And that is planned here that we have a reduction in revenue and therefore a bit higher negative adjusted EBITDAs. And on the other end, we have a positive momentum at Terranor and Conexus that actually perform quite well. And then retail and food as the last segment, mainly influenced still by La Paire in France, where we see that we are still substantially negative and the market had been still out there. The team is focusing quite a lot on internal improvements, but also on increasing sales and convincing customers that we are the best place to buy. Coming today already on the last slide. So we all the time speak about the lifecycle because it provides some more transparency and you see it here again that we have quite diversified distribution of our portfolio companies along these three different lifecycle stages. Once they are in our portfolio realignment, optimization and harvesting. And when you see on the right, Realignment substantially negative in adjusted EBITDA, big jump forward in revenue that is due to the major acquisitions done here in this segment. And on the other end, in the harvesting stage, you see that also here we have now a lot of different portfolio entities, and they are obviously in adjusted EBITDA positively. In the middle, we have here the big automotive companies, Ferry United, Amaneos, and also Hilo, that are in the automotive segment and form pretty much half of it. And we have LaPierre in here. And therefore, it's for the first half negative. And on the other hand, some of them were positively. So it's overall actually something that should be closer to zero. We work on this and look forward to a change here in the second half of 2025 and with that i hand over back to johannes thank you mark i'm happy to give you a little bit more insight on a portfolio update and um

We are working in the four segments. Mark has just reported the H1 figure. And as most of you know, there was a segment which we introduced roughly two years ago. Segment was called retail and food, where we have made acquisitions such as Gläserne Molkerei, Brinatal, which are still here on our asset side. Going forward, going with the market, we have realized that other industries become much more sexy for us, much more interesting for us, and there's much more out there in the market. And on the other side, we have experienced that the retail segment is very difficult to contribute our expected return on investments, which is 7 to 10 times what we have given. So therefore, we have decided to slow down the pace on the retail and food, be extremely selective going into this, and also step by step if the time is right, divest the assets which we have in this segment. So on the other side, we see that there is much more out there. So the new segmentation starting from today is automotive and mobility. We remain that with the two large groups into there. I'll go into details and show you what is in there in a few seconds. Engineering technology is the second one, as Markus said, very nicely contributing. And we want to introduce a new one, which is called infrastructure and special industries. Here we focus on logistics, here we focus on defense, and here we will focus on chemical. And boy, I can tell you out there in the market at the moment, there is so much to buy in this. And there are so much assets we are looking at the moment that this is something for the next month and years, which will create and make diamonds for us. And that's why we go in this new segmentation and we will focus away from retail and food, more into infrastructure, more into logistics, more into chemical and more into defense. Going quickly through the details so you have a view. Auto and mobility. We have the two groups, Feral United, where we summarize everything which is not plastic, basically. The Amaneos group. And we have the SFC Solutions group, a group which Mark mentioned already contributed positively to H1. a group which is expected to be beyond 30 million of operating profit for 2025. And last but not least, we have Peugeot Motorcycles in there. As you also see where we are here on the realignment phase, very difficult market, lately also seen with the insolvency procedures for KTM, which is one of the market leading brands in the segment. So Peugeot Motorcycles at the moment, rather a bit difficult. and on the lower end of the performance and on the upper end of the performance. When we look at engineering technology, and I would like that we focus on the top three left ones, Guasco, NEM, and Klezim. And those companies are in very early stage when it comes to the holding period, but already in harvesting. And I call that the Trump effect. Those are companies looking on the energy side. Those are companies in the oil and gas world. Those are companies producing equipment for coal, all traditional energy. And they are going through the roof. So order books are full. We currently shuffle around. We have to postpone order intake because we just can't handle it. There's too much. And those are, in our business model, short-term exit candidates. When we look at the new segment, infrastructure in special industries, and we just have acquired there a lot. On the logistics side, we acquired Intime. Recently, we closed the deal. Buderus is new. Magirus is new. We acquired Fuentes in Spain. So on the logistics side, on the defense side, on the mission-critical component side, this is where we want to focus. TerraNo, we have successful IPOs. TerraNo will benefit in the future a lot from Sweden becoming part of the NATO. because the roads are not up to the requirements of the NATO. So there needs to be lots of investment going into road maintenance and road work, where Terranor will be one of the beneficiary. Magieris you will see in a lot. Buderus has a quite good portion of defense products, which go into the typical customer base you would expect defense metal products going into. And Fatmir, the CEO of Magirus, will speak about that company in a minute. And then last but not least, the goods and service portfolio. And you see there's something which is maybe also not expected. Go Collective, on the very top in the harvesting, not having for long in a holding period. We bought this from Arriva before Arriva was exited, ultimately from Deutsche Bahn. So it's a super fast turnaround. We divested the Serbian business. We restructured the Polish business, and we basically put to life again the Danish business. I think I confess this was one of the best or the best turnaround I have witnessed in my Mutaris history of the past almost 10 years. So this is one of the... I call it sexy portfolios what we have where we will have a lot of fun and where definitely a diamond is created and we hopefully find the right buyer to pay for this diamond. This will be the segmentation going forward. This will be the segmentation how we report. This will be but also the segmentation how we buy, how we put the focus on the buy side and how we put the focus on the sell side. And now I would go and like to introduce you to Magirus more in detail, which we bought beginning of the year as garbage. And we are on the way to make it a fantastic diamond. Warm welcome to the CEO, Fatmir Vesely, who will introduce Magirus. Water on, my friend.

Thank you, Johannes. Thank you, Mark. A short intro also to myself. I'm Fatmir. I'm with Magirus for a bit more than seven months. I've been part of the Mutaris group now for a bit more than six years, and I'm very delighted to give you a bit more insights about Magirus. We have bought the business from Iveco Group and we have started the journey beginning of January. Since then we achieved to reduce the cash rate or the cash burn rate by more than 70% and we are very happy that we are ahead of our transformation journey. We have been quite successful in implementing crucial initiatives in terms of the improvement and especially looking into the market we are very happy that we will be able to grow our order intake, grow our order book and also be able to contribute significantly to the need currently out there in the markets. Personally, I'm very delighted to lead this company because we are serving not only the society, but we are contributing significantly to helping our people, helping also our societies in countries. And to give you a bit more details about what Magirus is about and what we offer, we have prepared a short video and I'm very happy to show this to you now. For over 160 years, our name has stood for innovation in firefighting. As the world's leading provider of turntable ladders, we build equipment that helps first responders save lives. Our passion is to build the best firefighting vehicles, ladders and special units in the world. Many of us are firefighters ourselves. We understand what crews need and design vehicles for the toughest missions. Our offering spans intelligent turntable ladders, modern tank pumpers, tactical robots, digital fleet management systems and pumps, as well as versatile equipment and accessories. We are pursuing an ambitious plan to strengthen our presence worldwide, innovate our products and open more customer service centers. We are also investing in a civil protection division to develop specialized vehicles for disaster relief and focusing on reliability and customer experience. These steps show how we honor our heritage while preparing for a sustainable and successful future. Together with our shareholder Mutaris, we are shaping the future of firefighting technology. And for us, Magirus is much more than just a brand. Magirus is simply the future for me. Family. Interesting.

Everyone I know feels like a family member here.

Thank you Fatmir and I'm very proud that we own this iconic brand.

in the firefighting business and I'm very curious and grateful that we can make this a very large diamond. Thanks so much for the contribution here Fatmir and there's still a way to go but this is a company we would like to present to you and we will continue presenting details of individual portfolio companies now in every earnings call. having the outlook for the second half of the year to finalize and conclude this call. Magirus, as you just saw, is mission critical for our safety and for our security of our lives. And also for Mutaris, mission critical are what we describe as the four points. Transaction activity. So in the second half of 2025, we will conclude and achieve the cross proceeds of more than 200 million as a main focus on the transaction side. The guidance of 130, 260 million net holding profit is there, and I'm very certain that this will be achieved group values group revenues six and a half to seven and a half billion we're on the way further internationalization we're going to have the office up and running in japan next step for us and then last but not least in the different segments automotive as described we are cherry picking we are creating the two groups and sfc already performs well engineering technology we use the trump effect we use the effect of the old traditional energy where we have companies providing world-class equipment to them, and are sooner or later, and rather sooner than later, exit candidates. Our new segment, infrastructure and special industries, we just surf on the wave. We just surf on the wave of companies out there we can acquire who are distressed, who are carve-outs globally. And we want to surf on this wave, and we want to be the best surfer here. And last but not least, goods and service. This is what, for the good and the bad, I sometimes call the boring segment, but that delivers solid, plannable and accurate results. So with the outlook on the segments, with the outlook on the transaction activity, and with the outlook on our guidance for revenue and for holding profit, I would like to conclude this call. You like the new format. I hope you like the insights we have given you. Thanks for joining. We are looking forward to a very much business-focused H2. And I'm sure that we will achieve what we have promised. We will achieve and deliver what we have promised with the support of the best team in the world, where Robin, Mike, Leonard and myself are very proud to lead this team. Thank you very much for today. Have a great summer. Enjoy your vacation. Thank you so much.