Edison Investment Research - mutares AG (A2NB65) Mutares - Buy-and-build strategy fuels expansion

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Edison Investment Research

Milosz Papst

Mutares - Buy-and-build strategy fuels expansion

Successful turnarounds supported by add-on acquisitions allowed Mutares (MUX) to post record FY17 results. Improvements across the P&L resulted from profitable exits as well as bargain purchases. The shift in strategy towards platform investments is expected to further validate the benefits of the buy-and-build approach originally introduced in STS Group. MUX is now trying to replicate the concept for Balcke-DÃ¼rr Group and La Meusienne. Despite the recent positive developments, MUXâ€™s shares have been under pressure and currently trade at a 30.0% discount to last reported NAV.

28/06/2018 4 EN

Underlying

mutares AG

Mutares AG. Mutares AG is a Germany-based holding company focused on acquiring companies in special situations, such as owner or management succession and re-funding. It is active in the Automotive, Construction and Infrastructure, Consumer Goods and Logistics, Engineering and Technology, and Wood and Paper sectors. Its Automotive portfolio includes Elastomer Solutions, a manufacturer of rubber moldings, and STS Group, a producer of acoustic and thermal insulation. In the Construction and Infrastructure segment it manages manufacturing companies La Meusienne (stainless steel tubes), EUPEC (pipeline coatings) and BSL Pipes and Fittings (pipeline components). The Consumer Goods portfolio includes KLANN, a manufacturer of tinplate packaging. The Engineering and Technology portfolio includes Balcke-Duerr, a manufacturer of power plant components. Manufacturing companies Cenpa (core board), Zanders (specialty paper) and Norsilk (wood paneling and floor coverings) comprise the Wood and Paper segment.

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DE000A0SMSH2 Germany

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Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Milosz Papst

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Mutares - Buy-and-build strategy fuels expansion

Mutares SE & Co. KGaA: 1 director

Mutares - Focus on engineering & technology

Mutares - New platform investments on board

Tinexta - Typical seasonality in Q124

Dentsu Group - FY24 prospects weighted to H2

Record - AUME momentum and a sharper focus

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