Mutares SE & Co. KGaA · XETR:MUX
Mutares SE & Co. KGaA — Investor Day (October 2019)
59 slides from Mutares SE & Co. KGaA's investor day presentation, Oct 22, 2019
Slide 1: Capital Markets Day 2019: Realizing untapped value potential
Capital Markets Day 2019 Realizing untapped value potential Frankfurt/Main, 22nd October 2019
Slide 2: Agenda
Agenda 1 Keynote Robin Laik, CEO 2 Lifecycle Management Mark Friedrich, CFO 3 Balcke Duerr Group Arne Amann, CFO Balcke Duerr Group 4 Donges Group Johannes Laumann, CIO 5 Summary Robin Laik, CEO 2
Slide 3: Mutares has grown from EUR 6m to > EUR 1,000m in 11 years
1 Capital Markets Day 2019 – Keynote Mutares has grown from EUR 6m to > EUR 1’000m in 11 years Growing from a purely Munich based to a European group CAGR: > 1.000 900 865 > 60% 648 684 648 650 347 310 128 159 61 6 08 09 10 11 12 13 14 15 16 16 17 18 19e Sales in mEUR HGB IFRS 3
Slide 4: Today: European group with soon 6 offices
1 Capital Markets Day 2019 – Keynote Today: European group with soon 6 offices Extensive and regionally-oriented M&A network for deal sourcing Munich (HQ) Paris Milano 2008 2015 2017 London Helsinki Frankfurt/Main 2018 2019 opening 2020 4
Slide 5: Searching for hidden value gems
1 Capital Markets Day 2019 – Keynote Searching for hidden value gems Who takes over a company like this? Company characterized by: ¬ High level of intransparency ¬ Inefficient equipment utilization ¬ Complex product portfolio ¬ Product pricing with negative margins ¬ Lack of cooperation between func
Slide 6: Mutares Mission: A+F as example for driving change
1 Capital Markets Day 2019 – Keynote Mutares Mission: A+F as example for driving change for success German producer for end-of-line packaging machines What we found Unbalanced customer portfolio: customers in dairies contributing >70% to sales Acquisition rationale of Mutares Claims and loss of cust
Slide 7: Already transactions in 2019, bid submitted for 8th transaction
1 Capital Markets Day 2019 – Keynote Already 7 transactions in 2019, bid submitted for 8th transaction Strategy of international hub of M&A offices delivering convincing results Normek FDT TrefilUnion Plati Sales EUR 65m EUR 54m EUR 42m EUR 38m Products Roof and facade Cable harnesses and Roofing me
Slide 8: Already transactions in 2019, bid submitted for 8th transaction
1 Capital Markets Day 2019 – Keynote Already 7 transactions in 2019, bid submitted for 8th transaction Strategy of international hub of M&A offices delivering convincing results keeeper KICO Ruukki 1) Q Logistics 2) Sales EUR 65m EUR 110m EUR 130m EUR 250m Products Household plastic Safety, locking
Slide 9: Q-Logistics GmbH
1 Capital Markets Day 2019 – Keynote Q-Logistics GmbH Potential first transaction involving a state-owned company (ÖBB) Details of binding offer Products and markets ¬ Potential new platform investment, transaction still ▪ Transport: Groupage goods & charter (including Products subject to approval b
Slide 10: European group with international footprint
1 Capital Markets Day 2019 – Keynote European group with international footprint Currently, five Mutares offices and 13 portfolio companies with activities worldwide FR Helsinki London Frankfurt FR Munich Paris Milan FR FR Mutares HQ Mutares offices Planned Mutares office 10
Slide 11: Value creation based on entrepreneurial approach
1 Capital Markets Day 2019 – Keynote Value creation based on entrepreneurial approach Strong links between M&A and consulting for a strategic and hands-on approach Mission of Mutares: Realize untapped value potential and help seller to focus on core activities and actively support acquired companies
Slide 12: Operational value creation translates into sustainable dividends
1 Capital Markets Day 2019 – Keynote Operational value creation translates into sustainable dividends 2019 dividend yield of 11%; in last four years, a total of EUR 45.2m was payed out Objective: High and sustainable dividend capacity Since its foundation, Mutares let shareholders participate in the
Slide 13: Ambition for 2019 overshot, for 2020 keeping momentum is objective
1 Capital Markets Day 2019 – Keynote Ambition for 2019 overshot, for 2020 keeping momentum is objective Our objective is even more active portfolio management for sustained value creation 2019e 2020e Dividend Ensure & prepare payout of EUR 1.00/share in 2020 Transactions 8 Buy- and sell-side In 2019
Slide 14: Summary
1 Capital Markets Day 2019 – Keynote Summary Mission: Realize untapped value potential ✓ Mutares core competency is realizing untapped value potential ✓ 2019ytd with record number of acquisitions ✓ Integrated approach of M&A and hands-on consulting is key value driver ✓ Active life cycle management
Slide 15: Agenda
Agenda 1 Keynote Robin Laik, CEO 2 Lifecycle Management Mark Friedrich, CFO 3 Balcke Duerr Group Arne Amann, CFO Balcke Duerr Group 4 Donges Group Johannes Laumann, CIO 5 Summary Robin Laik, CEO 15
Slide 16: Outlook on full year results
2 Capital Markets Day 2019 - Lifecycle Management Outlook on full year results Compared to FY2018, acquisitions will affect EBITDA and Adjusted EBITDA in Q3 mEUR 2019H1 FY2019e FY2018 Group revenues 443.2 865.1 Group EBITDA 67.1 49.6 Group Adjusted EBITDA 0.0 4.5 Group cash & equivalents 80.9 108.1
Slide 17: More transparency of Mutares consolidated figures: revenues
2 Capital Markets Day 2019 - Lifecycle Management More transparency of Mutares consolidated figures Existing portfolio vs new acquisitions: Impact of transaction activity on revenues Growth objective of Mutares translates into increasing group revenues and average revenue per portfolio company Group
Slide 18: More transparency of Mutares consolidated figures: Adj. EBITDA
2 Capital Markets Day 2019 - Lifecycle Management More transparency of Mutares consolidated figures Existing portfolio vs new acquisitions: Impact of transaction activity on Adj. EBITDA Objective of Mutares’ portfolio management is to have always sufficient profitable companies to sustain dividend c
Slide 19: Results of organizational initiative become effective
2 Capital Markets Day 2019 - Lifecycle Management Results of organizational initiative become effective Preparation aimed at mastering digitalization, including trends & further growth of group M&A Consulting Assessment process optimized and For holistic approach, ensure key Growth objective require
Slide 20: Value driver M&A – Using network of 5 offices
2 Capital Markets Day 2019 - Lifecycle Management Value driver M&A – Using network of 5 offices Deal sourcing, execution and support of portfolio companies Sales EBITDA Acquisition Realignment Repositioning Buy-&-build Value creation Deal sourcing Negotiation Follow-up International teams in ¬ Negot
Slide 21: Value driver Consulting – Active support
2 Capital Markets Day 2019 - Lifecycle Management Value driver Consulting – Active support Hands-on approach and local support of portfolio companies for fast improvements Sales EBITDA Acquisition Realignment Repositioning Buy-&-build Value creation Due diligence phase Post-acquisition Post-stabiliz
Slide 22: Value driver Portfolio Management
2 Capital Markets Day 2019 - Lifecycle Management Value driver Portfolio Management Integrated approach of Holding, M&A and Consulting as key success factor Sales EBITDA Acquisition Realignment Repositioning Buy-&-build Value creation Due diligence Review / 100 days plan Business development Consult
Slide 23: Active portfolio management throughout lifecycle stages
2 Capital Markets Day 2019 - Lifecycle Management Active portfolio management throughout lifecycle stages For every company, regular re-assessment of potential for strategic development Harvesting Optimization Realignment 2009 2013 2016 2017 2018 2019 Year of entry in portfolio 23
Slide 24: Dividend capacity
2 Capital Markets Day 2019 - Lifecycle Management Dividend capacity Shareholder value and dividend capacity as #1 objective Recent major exits A+F STS Group AG ? Sale Partial IPO EUR 24m proceeds EUR 28m proceeds 2017 2018 2019/2020 ¬ Active portfolio management to sustain and plan for attractive di
Slide 25: Investment case
2 Capital Markets Day 2019 - Lifecycle Management Investment case Why Mutares shares are a good investment ▪ Management committed to let shareholders participate in success Reliable dividend ▪ Business model generates steady stream of income to holding payments ▪ Active portfolio management to gener
Slide 26: Agenda
Agenda 1 Keynote Robin Laik, CEO 2 Lifecycle Management Mark Friedrich, CFO 3 Balcke Duerr Group Arne Amann, CFO Balcke Duerr Group 4 Donges Group Johannes Laumann, CIO 5 Summary Robin Laik, CEO 26
Slide 27: Balcke Duerr | Value Creation Process
Balcke Duerr | Value Creation Process Capital Markets Day 2019
Slide 28: Agenda & presenter introduction
Agenda & presenter introduction 1 Company Profile 2 Product Portfolio 3 Value Creation 4 Key Messages 28
Slide 29: Balcke Duerr at a glance
3 Balcke Duerr Group – Company overview Balcke Duerr at a glance Balcke Duerr is a leading supplier of components and services for increasing energy efficiency and reducing environmental impact ¬ Blue-chip customer base: Company rich in history and longstanding customer relations across relevant ind
Slide 30: History
3 Balcke Duerr Group – Company overview History Extensive history aids accumulation of technology 1883 Founding of "Düsseldorf-Ratinger Röhrenkesselfabrik Dürr & Co.“ 1894 Invention of the natural draft cooling tower and founding of Balcke & Co. 1972 Merger to form Balcke Duerr AG, part of Deutsche
Slide 31: Key Differentiators
3 Balcke Duerr Group – Company overview Key Differentiators Technologically advanced products with impressive references ¬ World‘s largest Regenerative Heat Exchanger (Duisburg Walsum, Germany*) ¬ World‘s largest Moisture Separator Reheater (Olkiluoto, Finland)* and largest high-pressure Feedwater H
Slide 32: Mutares' Investment Hypothesis
3 Balcke Duerr Group – Company overview Mutares’ Investment Hypothesis Attractive Both Balcke Duerr as well as Rothemühle are global brands with Market Position a loyal blue-chip customer base Extensive Own Worldwide installed base generating sustainable and recurring Installed Base revenue streams
Slide 33: Balcke Duerr at a glance: Products & Services overview
3 Balcke Duerr Group – Product portfolio Balcke Duerr at a glance: Products & Services overview Water- Steam- Cycle Decomissioning Flue- Gas- Path 33
Slide 34: Water- Steam- Cycle: Shift in product application
3 Balcke Duerr Group – Product portfolio Water- Steam- Cycle: Shift in product application Products and Services Applications Customers ▪ Feedwater Heaters ▪ Turbine Condensers ▪ TEMA Heat Exchangers Nuclear Chemical ▪ Rotor Air Coolers ▪ Cold-End Systems ▪ Moisture Separator Reheaters ▪ POWERVANES
Slide 35: Decommissioning: A future value driver
3 Balcke Duerr Group – Product portfolio Decommissioning: A future value driver ▪ Decommissioning and dismantling of ▪ Radiation testing, protection and release nuclear installations ▪ Consulting, project management and ▪ Permit Management implementation 35
Slide 36: Flue- Gas- Path: Growth through modernization
3 Balcke Duerr Group – Product portfolio Flue- Gas- Path: Growth through modernization Products and Services Applications Customers ▪ Air Preheaters ▪ Gas-Gas-Heaters ▪ LUGAT®-Compact Heat Exchangers Coal Oil ▪ DELTA WINGS ▪ Electrostatic Precipitators ▪ Filter Upgrades Refineries Waste>Energy Paper
Slide 37: Delta Wings Deep Dive
3 Balcke Duerr Group – Product portfolio Balcke Duerr at a glance: Delta Wings ® Deep Dive Proprietary technology Delta Wings ® allow for higher contractual performance commitment as competitors Improvements by Delta Wings ® Key applications Delta Wings ® Visible improvements Proven significant perf
Slide 38: Value creation: What we found I/II
3 Balcke Duerr Group – Value creation Value creation: What we found I/II Situation of the company worse than anticipated Sales 2016 -8% ¬ Between submission of the binding offer and 151 139 actual closing of the transaction, the situation in the company has worsened significantly ¬ This was caused m
Slide 39: Value creation: What we found II/II
3 Balcke Duerr Group – Value creation Value creation: What we found II/II Distraction of sale process evident in order backlog Balcke Duerr Group P&L In EUR m 188 x Low order intake in 2016 142 139 x Extremely high cost structure x Subpar project management x No sales strategy visible x Inadequate a
Slide 40: Value creation: Measures
3 Balcke Duerr Group – Value creation Value creation: Measures Heavy operational involvement in first 18 months of ownership Realignment Stabilization Grow 2017 2018 2019 Structure adapted Processes adjusted Organic growth ▪ Site consolidation ▪ Project management ▪ Re-enter chemical industry ▪ Head
Slide 41: Value creation: Impact
3 Balcke Duerr Group – Value creation Value creation: Impact Targeted cost saving almost reached Summary of measures Adj. In EUR m EBITDA 2018 4.6 4.9 2.7 ✓ Structural changes in organization 1.8 ✓ Extreme cost control in all entities ✓ Improved processes 15.8 ✓ Investment in energy efficiency Posit
Slide 42: Value creation: Balcke Duerr in Numbers
3 Balcke Duerr Group – Value creation Value creation: Balcke Duerr in Numbers Implemented measures validated by the Business Revenue and adj. EBITDA In EUR m 4.2% 4.8% 2.8% 139 121 117 124 -10.6% 2016 2017 2018 2019F Adj. EBITDA % Rothemühle Balcke Duerr 42
Slide 43: Key Messages
3 Balcke Duerr Group – Summary Key Messages Mutares’ approach provided company with solid basis for successful future ¬ Favourable transaction terms: Part of the value creation process was in the terms negotiated with the seller ¬ Experienced team: A team of 5 Mutares managers was present from day o
Slide 44: Agenda
Agenda 1 Keynote Robin Laik, CEO 2 Lifecycle Management Mark Friedrich, CFO 3 Balcke Duerr Group Arne Amann, CFO Balcke Duerr Group 4 Donges Group Johannes Laumann, CIO 5 Summary Robin Laik, CEO 44
Slide 45: Donges Group
Mutares Capital Markets Day 2019 DONGES GROUP
Slide 46: Mutares real rationale at closing in November 2017
4 Donges Group – The Story Mutares real rationale at closing in November 2017 Donges SteelTec was a great fit to our investment strategy 1 Potential for Buy and Build strategy 2 Bridge market grows due to infrastructure 3 Operations with significant turnaround potential 4 Reputable Japanese seller o
Slide 47: Mutares strategy after 100-day plan
4 Donges Group – The Story Mutares strategy after 100-day plan Mutares clearly outlined the steps to kickstart Donges’ growth The strategy after our first 100 days evaluation was based on 4 pillars of success: I. II. III. IV. Market Differentiation Diversification Products Use the market Extend the
Slide 48: Donges Group's growth strategy
4 Donges Group – The Story Donges Group‘s growth strategy Donges followed Mutares’ buy-and-build strategy and developed into a unique group 11/2017 10/2018 02/2019 03/2019 06/2019 Q1/2020* Acquisition from Acquisition from Acquisition from Acquisition from Acquisition from Acquisition from MHPS Euro
Slide 49: Donges product portfolio
4 Donges Group – The Story Donges product portfolio Roofs, façade and bridges form the core products of Donges 49
Slide 50: Donges product portfolio
4 Donges Group – The Story Donges product portfolio Donges operates 6 different brands within its core competences Product Description Materials Brands Customer-specific Roofs aluminum roofs and membrane roof systems Aluminum, membranes Unique façade systems Façade and glass façade solutions Aluminu
Slide 51: Outstanding growth story was created in 2018/19
4 Donges Group – Our Case Outstanding growth story was created in 2018/19 Since inception, the company grew at a CAGR of 147% Revenues1 in mEUR Mutares operational excellence comprised entire company: 41 1. Reshape the organisation with lean leadership 2017 structure 2. Empower responsibility, trust
Slide 52: How customers benefit from Donges Group synergies
4 Donges Group – Our Case How customers benefit from Donges Group synergies Realized and potential projects combining products and services Novatron Tampere Finland Logistics Center Germany Red Bull Arena Germany Airport expansion Qatar EUR EUR 4Q19 4Q19 tbd 1Q20 tbd 1Q20 290k 59k ORDER START OF ORD
Slide 53: How Donges Group and shareholders benefit from synergies
4 Donges Group – Our Case How Donges Group and shareholders benefit from synergies Existing products will penetrate existing sales channels for common growth Estimated synergies "The build-up of Donges Group in less than 2 years was the most smart, Sales > EUR 10.0m efficient and best-in-class movem
Slide 54: Donges group poised for accelerated growth
4 Donges Group - Outlook Donges group poised for accelerated growth A great year 2020 is ahead for Donges Group! Market Footprint Turnover annualized Workforce planned 6 Brands >365 >1,250 mEUR employees Employees Production sites Adjusted EBITDA Shared experience 12 >5.0 >400 Plants Percent Years A
Slide 55: As part of Mutares, Donges Group contributes in four ways
4 Donges Group - Outlook As part of Mutares, Donges Group contributes in four ways Since acquisition, Donges Group already contributed significantly to Mutares’ success Four different streams of revenues to Mutares ✓ Dividend contribution after repositioning has been ✓ Consulting fees during reposit
Slide 56: Create.Success.Together.
Create.Success.Together.
Slide 57: Agenda
Agenda 1 Keynote Robin Laik, CEO 2 Lifecycle Management Mark Friedrich, CFO 3 Balcke Duerr Group Arne Amann, CFO Balcke Duerr Group 4 Donges Group Johannes Laumann, CIO 5 Summary Robin Laik, CEO 57
Slide 58: Mutares realizes untapped value potential
5 Capital Markets Day 2019 - Summary Capital Markets Day 2019 Mutares realizes untapped value potential Mutares ▪ Management committed to driving sustainably attractive returns to shareholders ▪ Mutares excellently positioned to source deals with its extensive European M&A network ▪ Attractive exit
Slide 59: Disclaimer
Disclaimer This document has been prepared by Mutares SE & Co. KGaA solely for the use in this presentation. The information contained in this document has not been independently verified. No representation or warranty - whether expressed or implied – is made as to, and no reliance should be placed