Mutares SE Deep Dive 2023 | Strategic Insights into Goods, Services, and Retail & Food Segments

Thank you. My name is Lennart Schley. I'm with Mutares for 13 years now and I'm running as a managing director the two segments goods and services, as well as the newly formed segment retail and food. Both segments represent a well-diversified portfolio of pan-European production and service companies of various sizes. We go from roughly 30 million in sales to 700 million in sales. Generally you could say the scope of the industries is less exposed to economic peaks, since all the products and services are essential elements of our day-to-day life. For example, Fana is producing napkins for home and out-of-use, and they possibly might be impacted by bad weather in summer, but on the other hand benefit from big seasonal swings and revenue push during Easter or Christmas. On the other hand we have, for example, LAA, a French version of a DIY store, Home Center, which has a pretty uniform distribution of demand during the years, but nevertheless overall demand is depending on the willingness of the B2C customers to refurbish their homes, and by that revenues are somewhat correlated with the overall economic situation.

So let's give you a quick sniff in the segment retail and food. Let me quickly walk you through the segment before we're doing a deep dive into one of the companies. So lap and Fana I just mentioned. Keeper is producing plastic products for households, kitchen storage application. We have successfully turned it around and focuses now on the very profitable kit segment, and of course in the overall ESG discussions we came up with a sustainable product line with recycled plastic granulates. The Glaz Moai is a dairy company. It is a divestment of Swiss Emy group and a producer of milk, yogurt, butter, and cheese in organic quality. This was a recent acquisition, so we are currently still in the process of setting up the details of the restructuring plan, but we will definitely focus on expanding the product portfolio, and we will also check for options for producing milk alternatives such as vegan drinks.

Coming now to the goods and service segment. Ariva we will cover in a minute, so I will directly move to our Nordic companies Asteri and Palmia. Asteri is a Swedish provider for cleaning services, whereas Palmia is covering the same and even more services for daily life, for example security, cen management, property maintenance, the Finnish market. And with the companies Exi and City, they are planning and constructing the hardware for mobile networks and low to high voltage power supplies in Italy. Generally speaking, following the trend of setting up the infrastructure for renewable energies, the synergies between the two companies have been successfully generated, and hence this will result in a soon-to-be merger of the two companies and the rebranding of them into Connectus. Frosia is a reasonable player in the temperature-controlled logistics services in the Nordic markets, mainly Denmark, Norway, Sweden, and Finland. It operates various warehouses for chilled and frozen food, as well as operates transportation services with own trucks and via network partners.

Let's go to Ganta. Ganta is a general contractor and expert for high-quality interior fittings and building of stores, e.g., for big German corporates or even US-based retail and tech brands. Due to the very premium services, Ganta is not impacted right now of the high interest rates and the general lower demand in the building and construction sector. So we have successfully positioned the company in the high profitable niche. G Team is a French service provider for maintenance and refurbishment services of private homes with either own and subcontracted painters, joiners, or electricians. Main customers are insurance companies sending basically Ripa Team to fix damages in private homes, which is covered by the insurance policy, and according to the new push on electrical vehicles, we also installed electrical charging stations in private homes. Redo is our recent Finnish acquisition. It is providing remediation services for buildings, for example after water or fire damages, and based on our experience with Ripa Team how to run that kind of business, we believe that we are able to quickly understand the domestic specifics of that business and can add value there very fast. Since it has been recently acquired, we are still in setting up our turnaround program. Stuart is signed, not yet closed. It is currently in the consultation process with works councils in France, and hopefully we can welcome it until year-end as part of the Mutares group as a considerable member. Stuart itself is a sizable urban logistics player in the B2B market with very strong growth and scalable potential. The company offers services accessible via a platform for companies to connect via carriers for urban deliveries such as restaurants, fast food, but also home decorations. Tero is a company providing road services in the Nordics, deicing during winter and maintenance during summer, and is currently highly successful in gaining market share through the winning of numerous tenders and extending their service portfolio.

Let's now do a deep dive into Ariva, which also has been acquired pretty recently from Deutsche Bahn. It is three domestic operations of public and private transportation in Denmark, Poland, and Serbia. We currently have more than 3,000 employees and we operate quite a considerable number of trains, buses, and also water ferries, as well as the franchise of Share Now in Denmark, the leading European car sharing company. We are currently in the process of finalizing the pillars for this very interesting asset, but we were already very successful in winning a considerable share in recent bus tenders. Nevertheless, the targets have already been set to which areas and which thresholds we want to grow the revenues during our holding period, and we believe that we can grow the company by one third to approximately 400 million euros in revenues and a benchmark EBIT range of 5%. And of course, while doing that, we will reach out to the very best-in-class targets in every one of our businesses, and of course I have to comply to the upcoming legislation of emission-free transportation in the cities.

This was a snapshot on the segments goods and services and retail and food. Thank you very much for your kind attention. All the best and see you soon with other news of the Mutares portfolio.