Chief Executive Officer, Mutares
Vantage: Turnaround titan – learning about Mutares’s success and ambitions with CEO Robin Laik
Vantage explores the innovative business model of Mutares, a company that specialises in acquiring struggling businesses, turning them around and exiting profitably. In this insightful interview, founder Robin Laik reveals how Mutares identifies and acquires underperforming companies from major corporations, injects operational expertise and transforms them into profitable ventures. Gain valuable insights into Mutares's global expansion, successful exits like the UK's Special Melted Products, funding strategies through equity and debt, and the impact of being listed on Germany's SDAX index. Ex...
About Robin Laik
Robin Laik, founder and CEO of Mutares, discussed the company's business model and growth ambitions in a May 2024 interview. He stated that Mutares acquires underperforming companies from large corporations, injects operational expertise, and aims to make them "strong again to be profitable again." Laik noted that the company achieved about €100 million in net income at the holding level and plans to reinvest 50% of retained earnings into growth, with a target of increasing sales from €5 billion to €10 billion by 2028. He also mentioned that Mutares has raised capital through equity and a €250 million listed bond facility. Laik highlighted the benefits of Mutares being listed on Germany's SDAX index, saying it has increased attention from corporates approaching him about potential carve-out acquisitions. He cited the successful exit of UK-based Special Melted Products as an example of a profitable disposal. Laik emphasized that Mutares' public listing provides transparency, as works councils and stakeholders can review the company's annual accounts.
Transcript (20 segments)
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Interviewer0:06
Welcome back to Vantage. Occasionally we get lucky we get to cover entrepreneurial stories. The founder of this business started his business with 50,000. It's now generating sales of over 5 billion EUR. It's a great story to look at. Let's go take a look. Welcome back to Vantage. The last time I was with this company I was actually at their offices in Germany. A lot has happened since then. They've joined one of the major indexes in Germany. They are going to be participating in our growth conference on the 14th of May. Exciting times ahead. Welcome back to Advantage, Robin. For those who don't know, Mutares, could you just give us a quick overview of the business and also your role within that.
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Robin Laik0:49
Yeah, thank you. So I'm Robin and I'm the founder of the group. From background I studied finance, and then I started at big corporates. I was working for L'Oreal group, for Escata group. And 15 years ago I decided to build up my own structure which is called Mutares, with only 50,000. And today we talk about the business which achieves 5 billion EUR in sales and 100 million net profit.
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Interviewer1:16
Wow, congratulations. So you know, I think that it's great to see the business sort of progress. And you know, you buy businesses, improve them, etc. So could you discuss your pipeline of buy-side opportunities in the current environment? One of the things that we've seen is rates have gone up, the cost of living has impacted, etc. So curious to see how that environment has changed. And also particular focus on China, which I understand you're quite active in as well. So maybe, maybe, what is Mutares doing in general?
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Robin Laik1:51
So we are going to these big corporates and we ask them, 'Do you have companies that do not work?' Yeah, so companies which are cash losing and where there's really operational improvement potential. And we tell them, listen, it is for you better than closing down a business or trying to do it yourself, which you have already tried over the last years, is to carve it out and to sell it to Mutares. And then we enter with our own team. So today we have like 150 own operational people working then on the plant and we do together with the management the turnaround of this business. We want to make this company strong again, to be profitable again. And this is our DNA. Our DNA is that we enter into these companies and that we make them strong again. That's what we for example did with a company here in the UK called Special Metal Products. The company which was in a very difficult situation, only 20 million in sales and 10 million of losses. And we sent our own team into this company and after 18 months the company was 100 million and 10 million profit. Wow. So this is a bit what we are doing. And we exited this business last year for net proceeds of 60 million.
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Interviewer3:06
Okay. So China is a growing opportunity for you. So what are you seeing there and what kind of things are you looking at now?
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Robin Laik3:15
We had today, so we started the business in Munich and my first office was Munich. We just started with two people. And today we talk about 11 European offices. So one of the offices here in UK, in London. But we in all metropoles in Europe we have now our own offices. Then we said we want to be a global player and we opened up an office in Shanghai, now in Mumbai and in Chicago. So Mutares, when we want that worldwide, when a company thinks about selling off, carving out a business, it must be first in mind, first in choice. It should be us. They should think about Mutares. So that's what has happened now over the last years. And China is for us of course a big market, and we already have several subsidiaries there. And that's why we hired a Chinese individual to run our Chinese companies, and we have a quite nice pipeline also in China.
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Interviewer4:11
Um, how do you plan to fund the continued acquisition activity? And also within that context, I know you recently did a bond tap issue. So maybe you can explain how that sort of fits into your funding plans.
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Robin Laik4:28
Yeah, so we are not a typical fund. We are a stock-listed company. This is the DNA of our company. And we did on the equity side we did several capital raises. But also on the debt side, as you mentioned, we just tapped the bond. We have now a 250 million bond facility. This is the listed bond which we did with Pareto. And today we are on both on the equity side and on the debt side, and we are able to raise additional funds if needed, both on the equity side or on the debt side.
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Interviewer4:58
And do you, I mean within that, if you're exiting businesses, I'm assuming that you have a regular flow of money to just recycle into those businesses as well. Is that also part of your planning in terms of how you're looking at your acquisition pipeline and where you're deploying capital?
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Robin Laik5:17
So what we do is we have, as already mentioned in the beginning, we look at our holding level. And on holding level we achieve this year about 100 million net income, so not adjusted EBIT, but really net income. And this net income, we are very dividend-friendly, but like 50% of the results which remain will remain in the holding and will be reinvested into the growth of the business. Our guidance is, today we have like 5 billion in sales, but until 2028 we want to grow this business to 10 billion.
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Interviewer5:50
Okay, encouraging. So talk to me about the major successes in terms of profitable disposals that you've seen over the last 6-12 months. Does this company that I just mentioned, what was called Special Metal Products?
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Robin Laik6:06
Yeah, so they were specialized in special metals. And these metals are used both in the aviation industry and in nuclear power plants. In the UK, there's not a single power plant in the UK where our special metal products are not used. And our main customer was Rolls-Royce, which are doing the turbines for the aviation industry. And what we were able to do is to fix problems. There were problems when it comes to the costs, when it comes to quality. And our team fixed together with management the key problems. And then we sold it to an Italian individual, so it was the Kagi Group, which then acquired this business. They didn't want to build up a known structure, but they had this profitable plant which was when we sold it 120 million, and this was a very successful exit for us.
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Interviewer7:02
Okay. There has been a sort of recent trend towards deglobalization, and that's led to supply chain diversification, the 'China plus one' sort of approach that you often see companies talk about. How has that impacted your portfolio and your investment activities?
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Robin Laik7:20
Yeah, we are a global player. So we bought several plants in the UK, in Germany. And if our customer, which could be for example Rolls-Royce or could be BMW, is not willing to buy from China, we are able to produce the same product also from Germany. So this is what we originally do. We buy companies which are based in high-cost Europe.
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Interviewer7:44
Okay, interesting. Um, you recently successfully closed the sale of Fro Scandia. Could you elaborate a little bit more on this exit?
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Robin Laik7:54
Yeah, maybe this is interesting. We bought from the Norwegian state. So we are quite a reliable brand today and have a quite strong success rate. We bought many companies from the state; these are privatizations. So we bought Fro Scandia, which is a cooling logistics business in the Nordics, so in Sweden, Finland, Denmark, from Norwegian Post. So what are we doing? We are supplying, for example, when you go to an IKEA shop, the meatball that you eat there will always be delivered from Fro Scandia, also here in the UK. So this is our business. And it was a turnaround case, and the state was not able to do the turnaround. We did the turnaround, and we successfully managed then to sell it to a German strategic partner, to Duxa Group, which wanted to enter into this Nordic market in cooling logistics.
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Interviewer8:50
Okay. So at the start of this, I love these stories where entrepreneurial businesses grow up into sizable businesses. And I think it was great to see the recognition when, after the last interview, Mutares has entered into the SDAX index. As a founder, I'm sure that's a great moment for you. But what is the actual impact of that on the business? Has it led to suddenly more investors coming onto the radar of more investors? Has it led to more interest in the business, more opportunities coming through for you?
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Robin Laik9:28
So I went for an IPO in the very early days. I didn't get a lot of money at that moment, but I wanted to be a publicly listed company because if I buy a company, or if we as Mutares buy companies, our seller like Siemens, like a state, like last week we bought from IO Ico a company, these companies and also the works council, they want to understand what we are doing. And they look exactly into our annual accounts and everything is public. So for us to be public is quite important because we buy situations which are difficult and we are liable for the people that we take over. So this is the background. As we are now in the SDAX, of course this makes me happy. Because there's much more attention to it. So today I'm approached by a lot of corporates telling me, 'Well, I have companies that are in a carve-out situation, and are you willing to take over?' So yesterday I was at an investment conference here in London and two corporates approached me, telling me that they would have carve-outs, whether I would be interested or we would be interested in taking over. So it's a real tangible benefit.
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Interviewer10:43
Look, Robin, it's been great to have you back on the cameras. For those who actually want to see the man in person, or Mutares present in person, of course I mentioned the conference on the 14th of May that we're hosting. Please let us know if you have any interest in attending. We'll send you details. Once again, thank you very much for coming back to Advantage cameras. It's been a pleasure talking to you.
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Robin Laik11:04
Thanks for hosting. Thank you.