Good afternoon, everyone, and welcome to the MUTARES earnings call for the full year 2023. On the call today, the CEO Robin Laik and the CFO Mark Friedrich will present the results and most relevant events of the full year 2023. After the presentation, they will be available to answer your questions. The presentation shown is available on the MUTARES website after the call. Before we start, I would like to remind you that this presentation contains forward-looking statements, including projections which may not develop as currently expected. I therefore kindly ask you to take note of the precautionary warning about forward-looking statements that is included in the materials on the website. Now let me hand over to Robin Laik.
Yes, good afternoon, dear shareholder, dear bondholder. My name is Robin Laik, and I'm the founder, the CEO, and the main shareholder of MUTARES Group. Today we are very happy that we can present you a very successful 2023. Before we start into our presentation, I would like to explain again what is MUTARES really doing. When we started this business 15 years ago, we wanted to go to big corporates and ask these big corporates, "Do you have assets that are underperforming?" For the key strengths of MUTARES, what we are doing is that we enter with an own team into these companies. This is our DNA. Our DNA is that we want to come into companies of big corporates, carve-outs of big corporates which are not performing.
Into these companies, we enter with an own team, and the team takes over a key management position. Can be a CEO position, can be a production manager, can be a sales manager, can be a controller. And that's what we are doing. So you see here the landscape where we are today. So we have 11 European offices, but we have also now an office that we plan in Chicago and China. And we also talk about India now. So we want to be known as guys who know how to do it.
So we like to have the saying, "First in mind, first in choice." When a big corporate decides to exit a company or to close down a production site, we think if we want to go to them and tell them it's always better before you decide to close down a plant to sell the plant to MUTARES, to sell the company to MUTARES, "First in mind, first in choice, this should be MUTARES." So in which companies do we invest? The first segment that we do invest: Automotive. Automotive suppliers for BMW, for Mercedes, for Stellantis. So worldwide, OEMs that we are supplying from our automotive subsidiaries. The next company, and that's we are, we were based here in Germany in the beginning, so it's a very engineering-driven company. So we have many engineers on board.
This is our sector, engineering and technology, machine tooling. We have a lot of machine tooling guys in our team. The third sector is a service business, where we do service business. Lastly, we just opened up a new sector which is retail and food. The target company that we want to buy is a company which should have like EUR 100 million-EUR 750 million in sales. We want to be known as the guys who can do the turnaround. So how are we structured as a group? Today we talk about 250 people. Out of these 250 people, more than 150 are operational consultants. When we acquire these companies, we send our own consultants into these companies. By this, we do generate already today a consulting income of EUR 10 million.
This is important for us, for this is really a resilient business model. This is a consulting business. As we want to grow our business, this number of consultants will as well grow. The second source of profit is when a company is turned around, they can pay us dividends. So we have this consulting income. Then we have dividends. The third column that we have is exit proceeds. When we were sitting together in 2008, 2018, so 10 years after we have started with this MUTARES adventure. At that time, here you see the figures of 2,220, but in 2018, we had three years in a row, EUR 1 billion turnover and EUR 20 million net income.
And then we said, "How can we grow this business?" And in 2018, we decided until 2028, this company should have a EUR 10 billion turnover and a EUR 200 million net profit. And we are very happy and grateful that we can announce that even today, we are talking about a EUR 5 billion turnover company and a EUR 100 million net profit company. And this net profit that we talk about is composed of out of these three pillars: consulting income, dividends, and exit proceeds. And as you can see here, we want now to have new targets. And you see that we also have new targets when it comes for you shareholders, also to the dividend. So we had before, we had a minimum dividend of EUR 1 and, base dividend.
Now we talk about a EUR 2 dividend that we want to pay to our shareholders each year. This year, as it was a very successful year, we decided to go for 2.25 in dividend. So we want to let participate all the players which are all the stakeholders which are involved in this MUTARES story. So how do we generate our profit again? We clustered all our portfolio into four different sectors. The first sector is the acquisition phase. So the company is cash losing. What we in general do, we go to the seller, which should be a big corporate, and we ask the seller to give us a strong balance sheet. This is the start of the MUTARES journey.
So we ask them, "Can you give us funds that we can do the turnaround, and this is cheaper for you, big corporate, than a close down, and it is cheaper for you than do it by yourself?" For in many cases, these big corporates have tried already. They have sent in external consultants. They tried everything, but it didn't work out. And then our secret sauce starts, "Why is our USP?" It's an entrepreneurship. And we enter then with our own teams into the acquisition phase. So we have a cash out for a purchase price, but then we have a cash in for day one, we send our consultants in. The second time is then the realignment phase. So the team is already in, and we bring back the company to break even. That, in general, we buy companies.
Let's, let's assume EUR 100 million in sales, but EUR 10 million of losses. And we get then from the seller, in many cases, a balance sheet which allows us to have like 12-18 months until the company is cash flow positive again. That's the time which we call realignment. And then we come to an optimization stage. In this stage, optimization, we think about, "How can we develop sales? Can we buy maybe another company to enter a new market? Do we have the product which we need? What can we do to grow the business?" Optimization stage, in many cases, then we take our consultants out and bring them in the new challenge into a new company. And then it comes to harvesting, harvesting a time when we can take dividends, when we get exit proceeds. So this is a life cycle of, of MUTARES.
Over all of these life cycles, we said on holding level, we wanted to achieve EUR 100 million. That's what we promised you to the shareholders, and that's what we delivered. Over the last years, we overdelivered on our own promises. Here you have an overview about our portfolio. You see here automotive, engineering, and technology, goods and services, and retail and food. I would like to name some of the companies to give you some flavor what we are doing. So we talk about Steyr Motors. We sent our team in, and the team, they were doing their engines for special vehicles. The quality was bad. The pricing was not okay. We had tough times before it was COVID. Then there was a raw material price increase.
When we entered, the company had decided to go into different kind of products which were not yet needed by the market. And then we concentrate our product portfolio. And in the beginning, in many cases, we have to bring the cost down. So we had also to talk to our employees very openly and tell them, "Here, in this case, it's too expensive. We need to take out people." That's what no one likes to do, to reduce overhead costs. But in this case, it was necessary. And then we went to our customer, and our customer even didn't want to see us. So we scheduled a dinner before we had the operational meeting in the morning.
And the customer didn't want to show up, for they were really unsatisfied with the quality and the delivery of our product. And then in this evening, we listened, and we tried to understand, "What is really your issue?" And then we assured them that we will be able to produce the quality that they need, that we will invest into the R&D facilities. And then we achieved to bring a company which was cash losing today to a company which has 20% EBITDA and is running quite profitable. Maybe another company that I want to name is Conexus. Conexus is a company in the high voltage which we acquired in Italy from Sirti Group, and where we put in Marco and other individuals who were then turning around the business, which is in this energy market.
Just yesterday, we announced that we bought now, from Eltel, a company in Poland, our first Polish transaction that we did. I'm very happy for Dominik and the team there. But we are able to, to grow now this business which is running quite profitable with a 10% EBITDA margin. And then you see retail and food, the last sector that we just opened where we bought several companies also last year and which are also quite development. For us, when we buy these companies, for us, it's important that we do not buy only in Germany. That's why we are, a really a worldwide player today, for we don't want to be dependent on risks which are only on one market or only on one stage. So we buy early cycle, we buy late cycle, and we buy non-cyclical businesses.
This gives us a balance when it comes to the operational risk of the market. Some key figures, maybe the companies, we are quite an active fund. We bought 16 companies last year in all over the sector. We bought, for example, Gläserne Molkerei in the dairy industry where we produce milk, butter, cheese, and sell it mainly in Germany today. We bought many other companies, as you can see here, some really substantial brands. For example, we're now the owners of Peugeot Motocycles, the two-wheeler business. We also increased our bond. But you can see that the bond is now a EUR 250 million bond in total.
And all of this with a new dividend strategy, with the achievement of the promises that we delivered really on our promises, we were able to be now included in the SDAX, which is for the team, of course, a very nice appreciation. And we were also able to sell 7 companies last year. And here, what influenced, of course, our results of last year is Special Melted Products. So Special Melted Products was a company bought in the UK. And we sent our team, and we sent Ran and an individual to run the business together with many others, Thomas in the finance department, Dario in the sales department. So we had a very strong sales team there. But we were able to bring the quality back on track. This is what we are doing.
So we are producing their special steels, which are used in the aviation industry and which is also used in the nuclear power plants. And the company, when we bought it, was a EUR 20 million company with more than EUR 10 million of losses, EUR 20 million pensions sitting on the balance sheet. And when we entered, everyone, especially my supervisory board, told me, "Mr. Laik, don't buy this company." But then we were, we looked at the markets. And we knew that aviation industry, this is an industry which can come. We were quite advanced in improving then the quality for the turbine. Rolls-Royce was one of our biggest customers. And then we sold this company to an Italian strategic for EUR 160 million, more than EUR 160 million. We were able to have its exit proceeds.
This was also the reason why we had these nice results last year for the exits. One of the three pillars very nicely worked out last year with Ivo and the British team. We were able to generate these high exit proceeds. Very happy that in our market segment, especially in the UK, we were awarded to have the best turnaround in the UK. Another company where I was on the 100-day meeting this week, we flew in there on Tuesday morning. This is a company called Efacec, a company that we bought in Portugal. They are doing transformers, but they are mainly responsible for the electric diversification and the distribution of electronics in Portugal. This was a state-owned company. But as you can see here, huge losses due to inefficient projects that they have taken.
And our team there is now concentrating on the projects for future. For example, we do the electronic charging systems for the highways. And we do here also the transformers for the nuclear power plants. And what we did here in the beginning, we concentrated on the main issues, what is the core of our business. And from this basis on, we have now a very strong pipeline in place. The order intake was substantial. And we are very confident that this will be one of the grounds of MUTARES in the years to come, for we see a very good order intake. We see a very good backlog. And we see that the turnaround plan that we did there is quite substantial. So what is key?
What is key is in all of these cases that I present to you is that we go there with our own team. All of this is only the team who can make the turnaround. These are not external consultants. This is us. This is a very direct approach. We take as we take over, in many cases, the key management positions. It is not an external passive fund. We are the active investors. We are the guys who enter into the companies. We do the turnaround by ourselves. By this, I would like to hand over to Mark.
Thank you. Thanks, Robin. Thanks, Robin. Starting the financials with, again, the overview of the financials and the development over the last three years.
What you see here pretty much is that we continued our way of growing the MUTARES group in a very decent pace of approximately 25%-30% each year in revenues reaching EUR 4.7 billion in 2023. More important for us also, we see the development of the Adjusted EBITDA that improved year by year. Even though we added a lot of loss-making by nature, loss-making entities and portfolio companies to the group, we still were able to improve the Adjusted EBITDA to a positive level of full year to EUR 3.5 million, showing the development, the underlying development in the portfolio towards a positive contribution here. We will see it in the segments in more detail where we perform really well and where we have added a lot of loss-making entities and can work on it in the next couple of months.
The financials of MUTARES Holding here also pretty much follow always the group financials with revenues, so consulting revenues, reaching more than EUR 100 million. The run rate is approximately EUR 120 million based on the development of the full group here. The net result, Robin already explained it, quite dominated by the biggest exit in MUTARES history of SMP, reaching also more than EUR 100 million. For fiscal year 2024, we already guided here for approximately EUR 6.6 billion in group revenues and, again, a net income of 1.8%-2.2%, resulting in EUR 108 million-EUR 132 million of net income of the holding. The development quarter by quarter reveals a bit that it fluctuates more than we would like to see it here.
You see that the development, especially in goods and services, is the most stable when it comes to positive contribution here, also compared to last year, still pretty much doubled. And on the other hand, here, we see the biggest turnaround in automotive and mobility. We'll explain it in more detail on the next page what we did here, which is a substantial turnaround, but still a way to go. Coming to the details of the segments, starting with the biggest segments in terms of revenue, almost EUR 2 billion here. And you see that we were actually quite active in the segment but still have only five groups. And on the right side, you see that we added more than EUR 700 million of revenues through acquisitions.
And that's mainly due to the add-on acquisitions that we did for FerrAl United and Hailo Group at the end of the year because we strongly believe that in this segment, size matters. And that's why we have invested so much in the buildup of FerrAl United that combines more than EUR 1 billion of revenues, run rate. And we strongly believe that this is the right way forward. Also, Hailo Group was pretty much substantially increased in the end of 2023 with the two add-ons that we did here. On the other hand, we saw some really, really good development in the transformation and restructuring of SFC and LMS, both part of the Amaneos Group. And therefore, we ended here with an adjusted EBITDA of EUR 3.3 million compared to minus EUR 9.49 million in 2022.
Moving on to engineering and technology, a segment where we have added quite a lot and sold quite a lot over the last 18 months. You see it in the first bullet point here on the right side that we have acquired a lot of entities, NEM, Guascor, SMP, and so on, and divested also a lot. Therefore, quite a mix here, quite a movement in the segment, and quite an interesting segment because here are a couple of entities that we have here in the segment that are really on a good way, namely here, the NEM Group, also Guascor, quite improved now in the beginning of 2024. And Robin also explained already Efacec and Steyr, especially Efacec, quite heavily influenced the Adjusted EBITDA in Q4, so acquired 1st of November, because we had to restart pretty much the production. It was quite empty.
The amounts here are quite substantial. What you see here pretty much on the left as Adjusted EBITDA for full year is almost only Efacec. Then goods and services, the best-performing segment, quite a broad range here of different portfolio companies. You see that the Adjusted EBITDA almost doubled. And here, we see or saw in 2023 some decent development at Terranor, Frigoscandia, already sold here, but also Ganter. And quite positive when it comes to the development of a handful of other companies that we added to the segment, namely here, GoCollective, but also REDO, Conexus, and, again, the Terranor Group. Last segment, the one that we newly formed here out of goods and services, the retail and food segment where we have with Lapeyre, Keeeper, FASANA, three companies that we already had in the goods and services segment.
You see the three acquisitions that we did here, that contributed only a bit to the overall revenue and segment because the acquisitions were closed, mostly in the second half of the year. We saw here still some headwind in the market for Lapeyre. On the other hand, a good development at Keeeper and FASANA and a promising development, especially at Gläserne Molkerei and Terranor. Coming to the last page, again, the current lifecycle, we see actually, like, a bit like always, it, it looks quite sound, and you see pretty much that we did a lot of acquisitions here. That's what you see in realignment, lots of companies combining EUR 2.2 billion of revenues and substantially negative in 2023.
We will take out here a couple of entities and move them on to optimization in the Q1 presentation because optimization here also, a lot of, pretty much well-developing entities, EUR 1.7 billion of revenues here. You see already here the newly formed Hailo Group in there and the combination of NEM and Balcke-Dürr. Profitability reached a positive level. Then in the end, we have just a handful of assets in harvesting, most likely also for Q1. We will here see a bit of change, adding a couple of companies and having here less revenues than last year because we sold part of the Donges Group. But again, a quite positive Adjusted EBITDA due to the performance of the companies that you see here. With it, I already hand back to Robin.
Yeah. Thank you, Mark. For me also, this is a moment where we can say a big thank you to Mark.
I mean, Mark already 12 years with the company, since nine years the CFO. And when you have a company which is only EUR 1 billion, and today we talk about a EUR 5 billion company, it's a lot of work when it comes to year-end accounts. And, Mark, what you did here together with your team, Simon, and many more, it's really incredibly strong. And, thanks a lot for all of this work, for what we are doing. And that's maybe for you as shareholder, we are really the guys who are on the ground. We fly into these companies. We take over responsibility. And, what we have shown, and this is, for you as shareholders or as bondholders, is a very attractive access to the private equity market.
What we are doing is private equity, but based on a family business, based on a business which is still in the hands of entrepreneurs. Our dividend strategy speaks for itself. We were always increasing our dividend. We had several years now EUR 1, then EUR 1.50, then EUR 1.75. This year, it tops with EUR 2.25. I think the development of the share speaks for itself. We want to be super highly transparent. This is also important. We buy a lot of companies also from state. As mentioned, Efacec, for example, from the Portuguese state. The finance minister of Portugal. He told me before we acquired, Mr. Laik, you are now in charge for so many employees. I help you. I give you a strong balance sheet. I give you even a cash salary.
But what is for me important is that you are now in charge, but you are quicker. You are more entrepreneur. You will make it happen. And of course, we are long-term, substantially orientated. So this is, for us, I think, key and for you as investors, as bondholders, that we believe that we have a resilient business model which is growing. As mentioned, we want to be the really worldwide player. Before, I always said I wanted to be, or we wanted to be the German number one in private equity. And we were awarded by Focus Money three times now in a row to be the best private equity company in Germany.
But what our target is, of course, is that we are the worldwide player when it comes to development, to growth, growth in both, in sales, in number of companies that we acquire, and in profitability on holding level. So what we want to report in future, and that's what we did in the last years, we want to show what is our net result on holding level. And this result of EUR 100 million that we achieved now, this was a dream many years ago. And now we have new dreams. And I want you, of course, to follow us in this development. As I can show you here, we have already set a target for this year. With three acquisitions in the beginning of the year, we think that we will be able to increase our sales number.
But we also want to increase our result level, net result on holding level, which is based on the three pillars, which is based on consulting, on dividend, and exit proceeds. And our long-term target, when it comes to the dividend, we already mentioned that we want to pay out a minimum of EUR 2 in the future. And we are quite positive that this is achievable. Thanks a lot for your attendance. And by this, I would like to hand over to the operator.
Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press 9 and star on your telephone keypad. In case you wish to withdraw your question, please press 9 and star again. Please press 9 and star now to register for a question. And the first question comes from Marie-Thérèse Grübner from Hauck Aufhäuser Investment Banking.
Over to you. Good afternoon, Robin. Good afternoon, Mark. Congrats on this fantastic year, first of all. If I may, I have a few questions which I would like to ask, one after the other because otherwise, we all get lost. So, do you hear me, first of all? Yeah. No, it's very difficult to hear you. Oh, okay. Sorry about that. Now, can you hear me better? Very interrupted. Okay. I hope it's better now. Hello? Now it's better. Now it's better. Okay. Yeah. My first question pertains to the guidance given from net income. Can you give us at least an indication of the breakdown between dividends, consulting is it, proceeds you are budgeting in that figure of on the holding guidance net income level for the guidance, please?
Yeah. Marie-Thérèse, it was still interrupting. So I repeat what I understood. So you were asking for a bit more color on the input factors for the guidance of the holding, right?
Exactly. Yes. The breakdown, if you can give us an indication. Yes.
Yeah. Yeah. Yeah. All right. So, the revenue that we foresee for the holding will be around EUR 120 million. And based on this, we came to the net result. And the underlying assumption here is that we have net proceeds of more than EUR 100 million from exits. And therefore, the start into the year with Frigoscandia, where we have already more than EUR 50 million, was quite good.
So we are halfway there and have started a handful of other exit processes so that we are quite confident with communicating this guidance that we have here in the presentation.
Great. Thank you very much. That was clear. Can you give us maybe you said that consulting revenues were EUR 100 million in the one at the end of last year? Is this the amount we should assume for 2024, or should it be a bit more?
For 2024, you should assume EUR 120 million.
Okay. Okay. Thank you. And then, on the maybe upcoming exits, or companies that you've been trying at least to sell in the past, for example, La Rochette, is there any update on that one? Can you comment on any pending exits maybe in Q1 or Q2? Or Q1, we had already Frigoscandia, but Q2.
Actually, we don't want to go into the detail here. For this is confidential information. But you can assume that the companies which we're harvesting, we are checking regularly whether we are able to have a good buyer. And we are not in a situation where we are like a typical fund where there's an exit pressure. We try to sell the companies, as we are a stock-listed company, when we believe this is the right price.
Okay. Understood. And then last but not least, if you can comment on any upcoming deal activity in China and the U.S., where you recently established a presence. And that would be it from my side. Thank you.
Yeah. So we are looking in the US into different companies. There's one automotive supplier, turnover like EUR 200 million, cash losing, so typical MUTARES business model. And we are also looking in China to an automotive supplier. So in both countries, I think that we will have at least one deal to be announced in this year.
Okay. Thanks a lot. These were my questions. Thank you very much.
Thank you. And at the moment, there are no further questions. So if you have any additional questions, please press 9 and star now on your telephone keypad. 9 and star for any additional questions. As there are no further questions, I give the floor back to Robin Laik and Mark Friedrich. Over to you.
Yeah. This is today, of course, the time to say thank you to our employees. Worldwide, we have achieved now a fantastic result. We are growing. This is all only possible due to you, due to your immense dedication to the companies. Thanks a lot. Thanks to you as shareholders and as bondholders for your trust. We promised, and we delivered. That's the target for us. We have ambitious targets, and we want to grow this business. I hope that you stay with us and that you help us to fulfill our targets. Thanks a lot, and speak to you soon. Thank you. Bye-bye.
Thank you very much for participating in this call today. We wish you a great rest of the day. Until next time. Bye-bye.