Mutares SE & Co. KGaA (Xetra:MUX) Q3 2026 Earnings Call

0:00 A very warm welcome to our Q3 figures and in one of maybe the most exciting times of at least for me being board member of Mutaris since 2019. My name is Johannes Laumann, I'm the chief investment officer and with me today Mike Friedrich, my roommate and CFO of the company. Maybe short logistics you have seen we have published our figures just shortly before this meeting I have decided to do so just in order to attract a little bit more and we expect a little bit more participants in the earnings call because I think we want to be closer to you as our shareholders and stakeholders so that is also what we will continue to do now in the next earnings calls as well.

0:46 Let's dive in the momentum of just now and we are facing and we are looking forward to the next record year 2026. short management summary sorry for the technical issues here short management summary holding at income 33 million group revenue 4.5 we do expect 25% growth year by year until 2030 which was our guidance In Q3 we are exactly on track when it comes to consulting revenues which we aim for having 100 million per year. We have more flat development in Europe while we have a steep increase here in the US to come. We are hiring significant people in America who have settled in already and there will be more to come.

1:44 We want to do the refinancing of the bond. There's a reduction of bond volume and the refinancing will happen still this quarter where the 2027 instrument will be partially repaid and partially rolled over. Mike will say a lot more on this in the following couple of minutes. Significant exit proceeds expected. So this was Thursday and I tell you it was a crazy week for me following long weekends and long weeks and months before. So we have signed a transaction of Magirus firefighting business to Morita. We have signed yesterday the transaction of Quascor selling to Oak Tree. and as you have seen in past press release NordGaS Solutions and Efrosec are performing outstandingly good and we are considering there also our options going forward.

2:39 Next point was closed, our largest acquisition coming from SABIC predominantly in the US, also a little bit in Europe. This will be our ground investment on the chemical sector where we base our UX expansion on. We are working there also on more projects in the chemical sectors in the US. We have closed one deal already there and we are working heavily to sign another one even in this quarter. Today, again, I think, as always, we confirm the guidance of 2026, also the medium-term outlook. As you're used, we promise and we deliver. Let's summarize our strategy quickly. It's the build.

3:28 It's the create value with our consultants holding period of three to five years. And then it's the exit of the business. We want to have a healthy balance sheet on holding level and we want to reinvest in growth. We want to reinvest into expansion. SE & Co. KGaA When you look at the portfolio, the current group portfolio, we have a focus area. The clear focus area in the portfolio is the energy technology segment, it's the infrastructure and defence segment, and it's the chemicals and materials segment, where we see great opportunities on energy technology, infrastructure and defence on the sales side.

4:20 which we have executed. I mean, if you look at these years, we've executed NEM, we have executed Magirus, we have executed the Guascore exit, and there is EFESEC, and there is Nord Gas Solutions, all in these segments, infrastructure, defence, energy and technology. On the buy side, we see a lot of opportunities in the chemical. This is a segment at the moment where no one wants to touch it, but that's the right moment for us to jump in and to really create value, buy businesses, create value, and then have a clear exit path in the years going forward. Automotive and mobility, we still believe and we will prove that in the next weeks and months that this is a segment for us. We will be more selective here in the past. We see great opportunities now also coming up in China, in India, in the US here. Europe a little bit more conservative.

5:14 Goods and services. We still have a strong appetite for B2B service businesses and industrial services, data center services like Alterga, for example, is into that. And we have, as we said, we have executed, especially in Q3 on the retail segment, our exit, our goodbye, and also following by a balance sheet impact on holding level, a write-off of the same. When you see the top three segments, and I have dived into this already, a strong growth momentum coming from the exit. We have executed NEM, which we divested to Unai Power Systems, the Koreans, and they will develop the company further with their manufacturing footprint in Asia and a global setup here.

6:00 We have divested the firefighting business of Magirus. We retained the very promising looking defense business. in Tyrol in Austria. The firefighting business, the management performed a great restructuring there. It's now at a point where there is a need for someone else to step in and really grow the business internationally. And I believe Morita is a great, great partner facing the challenges of the coming years, you know, slow down call offs, et cetera, et cetera, and developing of new products. SE & Co. KGaA Nord Gas Solutions and EFESEC.

7:03 Nord Gas Solutions is a deal which is very close to my heart because it's a lot coming also from the history. We have a business in the gas liquefaction. We have a business which we are in the business roughly since a year. We have doubled the order book, we have doubled the EBITDA and we have almost doubled the sales of the business in the year we are in. MarketOps obviously helps us there. We are onshore, a very strong player in the shipyard, very strong player in the marine business, but we're even a stronger player in the downstream. We're even a stronger player on the onshore for gas storage, LNG terminals, et cetera, et cetera. We're going into the ammonium business, ammoniac business. This is really, really great. And if you want to hear more, there is also the president and CEO of the business coming to our Capital Markets Day next week in London. And then Efersek, I think it's going to be the rock star of the business.

8:00 Let's see what happens. I can tell you the machine room is already electrified and we are working with a large group of people to make this one of very something very very very nicely here and with no gas elation in EFESEC I think I don't tell you a secret we believe that those are can become the next two large exit and the largest one in Mutaris history This will kind of, you know, create another momentum, create a game changer for us. Those significant exits coming up with Quasco, with Magirus, with NEM, with Nordgas, with Efrisec, all in this energy segment, all in this deep in an infrastructure segment. This will bring us to another level, I'm very sure, and will be the game changer for the next months and years to come.

8:50 With that, I would like to hand over to the Q3 financials and then come back at the end again.

8:56 Thanks, Johannes. Welcome everybody from my side. Today I want to start my part with the holding view and I will also close my part with the holding view. When looking at the year-to-date net income of the holding of 33 million, it might seem to be mixed. But let me reassure you here that from a CFO perspective, I'm quite satisfied with where we are today and the current portfolio development that we already have reflected here in the Q3 financials of the holding. We were able to divest NEM where Johannes already talked about it, but we were also able to refocus a bit our management capacities toward the three segments that Johannes talked about it and were able to clean the portfolio in the major parts here in the retail segment which is part of goods and services and this is reflected here in our Q3 financials already besides this we were able to close the lawsuit that we had followed the Seneca transaction which is also reflected here in the Q3 financials and you could read that in or that the other party claimed quite a high amount of 100 million but The final verdict was only 7.5 and we had provided for part of it but approximately 4 million that we had to step up here and included in Q3. On top of it we had substantial

10:29 one-off costs for the capital markets initiatives that we had, the capital increase but also the written procedure that we had in the beginning which combined approximately 10 million of one-offs included here and in addition we have some higher advisor costs for these big transactions like the acquisition of Nord Gas and the acquisition of NexPoint where we are quite confident that this will pay off in the future. Coming to the group, Janice said it already, group revenue reached 5.4 billion. We have now included these big new portfolio companies like Nextpoint, Nordgas, but also Ameritrepens and others that contribute to the substantial increase. We are looking forward to the Q4 where we will see some kind of acceleration since these entities will now contribute with the full three months.

11:28 EBITDA reached a record high of more than 2 billion as of Q3, mainly driven by the acquisition of NEXTPOINT and this even does not include the purchase price allocation step up where we have to identify and evaluate the reserves that are on the balance sheet and we have not completed it and therefore we decided to not include this here in the year-to-date financials. it already is a big big step forward reaching 2 billion obviously boosting our equity and therefore making our group balance sheet looking much more sound now adjusted EBTA reached almost 60 million so you might have figured out that this is a step back compared to Q2 so we have minus 9 million in the Q3 standalone SE & Co. KGaA SE & Co. KGaA SE & Co. KGaA SE & Co.

12:24 KGaA Having said this, I want to briefly run you through the different developments in these segments. We can see that we managed to stabilize automotive and mobility where we really want to move forward. We announced it in our press release with divestments or partial divestments in the next 18 months. Energy & Technology & Infrastructure & Defense are the booming businesses that we see here in these segments. You see it here on the left side.

13:14 Well developing in terms of adjusted EBITDA. A lot of entities pretty much contributed, pretty much every entity that is in these two segments. goods and services does include the entities, the portfolio companies that operate in the retail part and therefore it's still kind of challenging and in addition we have here some new investments like HARO, MIMO and still LAPERRE which contribute almost half of it what you see here in adjusted EBITDA so we are constantly working on cleaning the portfolio Then we have built up the new segment, Chemicals and Materials. Since it's quite new, obviously also the performance is negative.

14:02 This is the nature of our business. Out of these minus 17 that you see here in adjusted DBTA, Next point contributes minus 13 and out of the minus 13 it's actually almost only Europe. There's a lot of focus obviously with the operations team here on fixing this, identifying the initiatives and executing it. same picture pretty much in our life cycle where you see that the entities that are in the harvesting phase or have been in the harvesting phase and are already divested towards the year combine an adjusted EBTA of more than 140 million so quite performing entities here and you can see that pretty much all entities that Johannes mentioned are included here and then we have Maggiros which is an optimization since we not change it throughout the year that's the case that we also divest from optimization phases. And when looking at optimization, it's close to break even here with minus five in terms of adjusted EBTA. We have a lot of the automotive entities or groups in here, pretty much all of it besides SFC, which is in the harvesting phase for a reason. And on the other hand, some entities that we are still working to divest in the next couple of months.

15:27 and are confident to also deliver here. Realignment comprises now especially the new entities in the chemicals and materials segment and also combines some of the major entities out of goods and services and therefore no surprise that is negative in adjusted EVTA with almost minus 100. A big topic for the remaining part of the year is the planned refinancing of our bond instruments. We have currently two instruments outstanding. One is due March 27 and obviously we communicated all the time that we intend to RE-ORGANIZE IT AND HAVE ONE OTHER INSTRUMENT OUTSTANDING THE BOND THAT HAS MATURITY IN SEPTEMBER 29 AND HAS SOME ROOM LEFT WE HAVE NOT DECIDED YET WHAT TO DO BUT THERE IS STILL SOME ROOM WHICH COULD BE USED AND THE FINAL FRAME IS 300 MILLION THAT FITS WELL TO OUR TARGET THAT WE HAVE COMMUNICATED ALL THE TIME THAT WE WANT TO BRING DOWN HOLDING DEBT to a level of 250 to 300 million by year end.

16:47 Like I said, I want to close my part here again with the holding. So we start with what we have achieved at the end of Q3 with the 33 million, which already included quite a lot of what we've done throughout the year and obviously also included what we know, especially what we know about the divestment of Lapea. On the other hand, we have signed now the transaction of Magiros and Guascor and these entities combine a profit contribution to holding of 110 million. Cash proceeds will be 120 million since we have SE & Co. KGaA SE & Co. KGaA SE & Co. KGaA SE & Co. KGaA And with this, I will hand over back to Johannes to sum it up with an invitation.

18:08 Thank you, Mark. Very quickly to close today's brief. You're warmly invited to our investor day, which happens on the 19th next week in London. And we have a quite interesting agenda for you. Few places are left. So if you still want to come, hurry up to sign up because at the CELAVY, there is a limited number of seats available. SE & Co. KGaA SE & Co. KGaA SE & Co. KGaA SE & Co. KGaA For the people in the call who know me, we will not finish by 8 or 9.

19:11 It will continue a bit longer. Last but not least, thank you very much for participating. Keep fingers crossed. Let us do our job. We will deliver what we promise, as always. And we will deliver another record year for the Mutaris Group, for the Mutaris Holding, for the Mutaris people, for the Mutaris stakeholders, and especially for the Mutaris shareholders. Thank you very much. We'll outperform. We will deliver. Thanks so much. End of brief.