Successful turnarounds supported by add-on acquisitions allowed Mutares AG (DE:MUXG) 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-Dürr Group and La Meusienne. Despite the recent positive developments, MUX’s shares have been under pressure and currently trade at a 30.0% discount to last reported NAV.
Successful M&A driving earnings growth
MUX posted solid FY17 results, with sales growing by 38.4% y-o-y to €899.7m and EPS reaching €2.9 (up 65% y-o-y). This was largely driven by six portfolio exits (in particular EUPEC Germany and A+F) translating into disposal gains and four acquisitions resulting in income from bargain purchases. Earnings growth was also assisted by operational improvements in the automotive (STS Group, Elastomer Solutions) and engineering & technology (Balcke-Dürr, A+F) segments.
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