Good afternoon, everyone, and welcome to the Mutares conference call on the first quarter of 2022. On the call today, the CIO, Johannes Laumann, and the CFO, Mark Friedrich, will present the results and most relevant events of the first quarter of 2022. 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. 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 Johannes Laumann.
Good afternoon, everybody, and welcome to our Q1 earnings call 2022. As you are aware, I will take you through the key highlights of Q1 and then finish on the outlook of Q2, and Mark will do the financial part of it. On the key highlights of Q1, I would like to stress, first of all, point number one, the M&A circus is still active, and despite all circumstances of inflation, war, COVID, and so on, we have a very strong pipeline on the buy side. We do see a lot of attractive targets on the buy side. We do see also incoming interest on the sell side.
However, number two, as a key highlight, or it's rather on the low light side, of course, we also have significant pressure on raw material prices in our portfolio, especially on the automotive side. The pricing and the availability of raw material is impacted at the moment, which you also see on the Q1 figures, which is especially happening in March. Then last but not least, the auto sector is already a little bit in trouble by OEMs canceling shifts and they're building cars. We see here a good order intake, but we just don't get it out of the door. However, looking at our guidance of 2022 and the one of 2023, we still stick to the guidance.
We do see at least EUR 4 billion of turnover in the group, and we do see at least EUR 72 million on the lower side of the net holding income, which will then develop over the duration of the years. What happened in Q1. Maybe I would like to stress three things out. The number one is the acquisition, signing and closing of Polar Frakt, which is an add-on for the Frigoscandia company in the Nordics. We basically add strategically the northern Norway part of business. We also will see soon an announcement happening on Frigo as well, which clearly underlines that we are going to build and execute our strategic approach in Frigoscandia, and we will build a diamond in cooling logistics up there in the Nordics.
We are very optimistic to see a very, very fast movement of executing our strategy. Number two, the acquisitions, especially of ATI, then from Siemens Energy in Spain, and the Vallourec acquisition, which we signed, three acquisitions in three months. We are on track with our one time a month target, and those acquisitions will be closed. ATI and Vallourec will be closed in Q2. Siemens Energy in Spain will be closed in Q3. The last highlight I want to put up there is the office in Helsinki, which is established for the Finnish market. We also have further plans in the year. We'll come to that later. We are planning for an office of Eastern Europe towards the end of the year, and we also would like to go abroad into America.
Very quick, a reminder on our business model, a reminder of what we do and what are the plans. Also here are three things. First of all, when you look at the three segments, we are active, which is automotive and mobility, engineering and technology, and then finally, goods and service. If you look at automotive, of course, I said it before, significant upward pressure on the raw material in March and April. January, February was still fine. The engineering and technology segment was still good, and the goods and service segment is as expected as well. For some of the companies, we are back on pre-COVID level when it comes to sales and when it comes to profitability. We are on track on the goods and service part when it comes to our plans, intention and budgets. The second one is the company sizes.
We are looking at EUR 100-EUR 750. Clearly, we see in our pipeline things are moving in that direction and the pipeline is growing also with larger transactions, where I'm absolutely certain that in Q2 and in Q3 we will see quite a handful of them. Last but not least, you see the growth on the bottom and the growth of the holding income, the growth of the revenue. Here, I would like to stress out that we as a management, we are fully behind this growth. We believe in this growth. We believe in the profitability. We maintain our shareholding of more than 35% in total.
You have seen recent director dealings which undermine this, and for further commitment of the management. Last but not least, on the business model section, how do we grow our business? How do we earn? The focus is on the realignment, optimization and harvesting. When it comes to the realignment for this Q1, Mark will report the figures later, but we see a very good development. We do expect between EUR 70 million and EUR 80 million of turnover by pure consulting management income, which is mainly earned in the realignment phase, which is the first phase after the acquisition. The second phase is the optimization phase, where we also see very strong income potential for 2022. More, of course, towards the end of the year.
Here, you clearly can name companies like SABO, Terranor, Donges, or also the LMS Group. Last but not least, the harvesting phase, and I'll come to that later. I think on the harvesting phase, we will see also on the exit side, things happening. We have closed the bulk of the exits in Q1, and there are more to come and bigger things to come in Q2, in Q3, and Q4, and I will emphasize that a little bit later. When you look at our portfolio, the automotive sector, I would like to highlight one company here, which is ISH and KICO.
The KICO ISH Group, they're clearly on the right path to materialize the synergies they have to get the business in and to base and found on the ground of a combination of the two companies with a very, very strong footprint in Europe and in Asia. We are very, very happy with the development of this company in Q1 and also in Q4 last year, despite all the circumstances and all the hits you have in the automotive world. When it comes to engineering technology, we see La Rochette, a company doing papers in France very, very strongly coming into Q1, despite the fact of significant high energy costs and raw material costs, which of course a paper maker has to digest. The business is good.
The contribution to Q1 EBITDA was very, very good here, and we also see a very, very strong outlook into the year. Last but not least, Frigoscandia. I already mentioned the Polar Frakt acquisition, which was the first one right after we bought the platform last year or end of last year. This is a company where we see great potential. This is a raw diamond which we just have to work on and bring it home then through the entire life cycle. Just the three highlights, and Mark will go much more in detail of the portfolio companies with the numbers. We are in total automotive under pressure, but very nice developments on KICO & ISH. Engineering technology, satisfaction. Goods and services, satisfaction. Highlights here, La Rochette and Frigoscandia. With that, we'll run through the financials. Mark.
Thank you, Johannes. I start my presentation with the same set of figures that we introduced in the financial call for 2021, where we start with the group revenues quite strong and pretty much increased 70% what we pretty much announced four weeks ago and achieved more than EUR 850 million. On the other hand, you see in the profitability figures, EBITDA and adjusted EBITDA, what Johannes was pretty much describing. The adjusted EBITDA decreased substantially compared to the first quarter of 2021, and I will go into more detail when we go into the segments where we see the different development in the segments.
Overall, we saw that the addition of the newly acquired companies that we acquired throughout the year 2021 contributes substantially negatively into the adjusted EBITDA. That's what we see here, and I will explain this when we go into segment, but already give you some highlights that especially the big ones that we added. It is the Lapeyre Group, it is the LMS Group that contribute substantially negatively into that figure. On the other hand, Mutares Holding also grows with the revenues and also with the net income. That is pretty much in line with what we expected when we saw the additions in the portfolio in 2021.
Where we see already the high increase in the revenues due from consulting across the group, and also had some one-off effects in the net result in 2021 with the exercise of share options, which contributed negatively into 2021. What we didn't have in the first quarter 2022, so we were able to contribute more from just the operating part, so the revenues of the holding into the net result. But on the other hand, we were able to control costs better and ended up the quarter with approximately EUR 7 million of net result already. Starting with the first segment, the automotive and mobility segment. Johannes already mentioned it.
On the one hand, we had a very strong first quarter in 2021 after the COVID year, 2020, where pretty much all the portfolio companies contributed positively. We see the EUR 4 million of adjusted EBITDA in 2021. We pretty much had also a very good start into the year 2022 in terms of sales. On the other hand, we had already the, at that point in time, substantial increases in costs. That's what we see really across all portfolio companies that contribute pretty much all into the negative adjusted EBITDA of almost EUR 19 million.
We foresee that there is some light at the end of the tunnel already in Q2, but most likely in the second half also that the portfolio companies will contribute more positively in the remainder of the year. Coming to engineering and technology, a way more balanced segment, and what we see here also the profitability figure that we are close to breakeven. Here we have some companies that only contribute negatively, and it's mainly the Balcke-Dürr Group, which in the business model has a very weak first quarter all the time, all the years.
On the other hand, we saw some very good development in the Donges Group, especially in the northern part, but also at Lacroix + Kress and the French entities, La Rochette, JAPY, and especially also Clecim. Last segment, goods and services, also a segment with the biggest increase in terms of revenues due to the M&A activity, but also with a high negative adjusted EBITDA here in the first quarter, and that is mainly attributable to the Lapeyre Group, which contributes EUR -10 to this adjusted EBITDA. On the other hand, we had a very decent start into the year at Terranor and also at SABO in 2021, and see some good developments in the restructuring at Ganter, but also at Frigoscandia and Repartim.
Coming now to the final slide for me, the life cycle that we changed compared to the Q4 that we presented four weeks ago. As in the last years, we want to keep that stable throughout the year 2022, and therefore we pretty much also want to kind of signal with the allocation here what we have in mind with the portfolio companies in the next 12 months. When you look at the very top, so I start this time with the harvesting phase, where we listed quite a lot of companies that I mentioned already during the segment explanations.
Here it's namely the SABO, Terranor, La Rochette, Clecim and JAPY and Wolber, that all together with Donges Group, contribute positively into one with more than EUR 6 million of adjusted EBITDA and where we obviously expect then some kind of divestment in the next 12 months. The optimization phase is now also quite crowded, when I look at the adjusted EBITDA, something to be improved throughout the year 2022, where we have in Q1 EUR -13 million. That is pretty much coming from the Balcke-Dürr, also from Cipa, but part of it also from the KICO & ISH Group. On the other hand, we also have here some promising portfolio companies in the bucket, namely the Frigoscandia, Ganter, but also Lacroix + Kress and Repartim.
The realignment phase is the first phase of our business model, and this is the phase that most likely will, throughout the year, become more negative since we want to add more portfolio companies into that phase. We see here a very broad range of areas or let's say the newly acquired portfolio companies and that, where we have a lot of work to do still, and namely in the big ones, LMS and Lapeyre. With this we come to the final outlook that is presented by Johannes.
Thanks, Marc. Let me take you on the outlook of Q2 and that's gonna be pretty exciting. If you look at the buy side, we currently look at 88 projects, EUR 11 billion. We have roughly EUR 1 billion under negotiations sitting at the table. As we speak, most probably or roughly 50% of the entire M&A and legal workforce here in the holding sit somewhere and try to bring home transactions. We have already signed EUR 1.1 billion, and we do expect 12 signings at least this year. On the buy side, we have done three already.
I'm absolutely sure that we will have three in quarter two, that we have a lot to talk in the next weeks and until the end of June, which then makes the closure of quarter two. We will be on track on quarter two, having the six acquisitions. The ones to come in quarter two, they are big. When it comes to the exit side, Mark mentioned it, predominantly we have 26 companies. Three of them are signed and not closed. Four of them are in live exit processes. Live exit processes in different stages. One stage is quite advanced, where we will have most probably something to tell already in quarter two. Then the other three are more towards the end of quarter three, beginning of quarter four.
I'm very confident that we also not only can transact on the buy side, but can also transact on the sell side. We have a very, very strong position here on most of the cases. I'm very, very confident that again, we don't show nice pictures and nice slides. We start working and we will deliver. Last but not least, when it comes to the outlook, guidance 2022, 2023, I'm fully confident that also with the increase of our footprint, and we have decided to, you know, move more towards the Prague office than the Warsaw office. We have decided to make an intense study in America where to hit the ground there.
I'm very, very confident that we will hit our 2022 targets and that we will achieve our 2023 targets, which were set in the middle of 2020. Just to recall, in the middle of 2020, we set a target in 2023 to become from EUR 1 billion to EUR 5 billion, from EUR 20 million profit to the range of EUR 90 million to EUR 110 million. That's what we set in the mid of 2020, which was just after the Brexit, which was before the second wave of COVID, which was before the chip crisis, which was before the war which happened in Ukraine right now.
By that, you can see not only that we have a very, very robust model when it comes to what we do at Mutares, but you can also see that we do our utmost to deliver what we promise. Thank you very much for listening and attending the Q1 earnings call. I hope we see you all on the seventeenth of May for our annual meeting. Stay safe and stay strong, and we promise we will deliver. See you soon. Thank you very much.
Dear ladies and gentlemen, we will now begin the question and answer session. If you have a question for our speakers, please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial zero two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. The first question is coming from Tom Mills at Jefferies. Your line is now open.
Good afternoon, guys. Thanks for the presentation and taking my question. Yeah, you sound very confident on outlook, which is reassuring. It sounds like the acquisition pipeline is particularly exciting at the moment and kind of somewhat front-end loaded. I'm just wondering, you know, you've spoken about sort of EUR 1 billion-ish of kind of contracted deals at this point. Are you, with some of these deals, seeing that you're wanting to kind of renegotiate the terms a little bit given what's going on in the background? Just kind of interested in how those dynamics are working. Also, are you seeing any kind of changing competitive dynamics around other potential acquirers of these assets? That'd be very helpful. Thanks very much.
Thanks, Tom, for the question. When it comes to the first one, renegotiate terms, we of course actively looking into the transaction we have. We have done the three transactions. To sum it up, it was Polar Frakt, which was the add-on for Frigoscandia. Basically delivering fish from the north of Norway to the mid of Norway. We pick it up and deliver it further. Not so much impact. No ground for reconsidering anything. The second one, which was from ATI, it's exactly the opposite. We don't want to renegotiate here anything, because the business is predominantly in the oil and gas environment, more towards Middle East and America, which is quite, you know, which is not bad at the moment.
That was a bit, you know, the upside here. And also gain from Vallourec. I mean, we bought it, we commit to something. We stand to our word. We stick to the transaction we have made, and we have made that with entrepreneurial risk, but also with entrepreneurial chances and opportunities. This is our business model, and this is what we do. When it comes to the competitive dynamic, what we see is that processes are getting a bit slower because we see that some of our competitors are a little bit more passive now in doing transactions, and they're afraid of doing transactions, to say it maybe in other words. Well, Tom, we have met before.
I'm not the type of a person who's afraid. I think we need to calculate the risk and then, you know, we take the opportunity and we take the chance of making transactions in this environment. This is how we define it and how we see it, and how I believe this is the success part of Mutares.
That was very clear, Johannes. Thanks very much. Cheers.
The next question is coming from Stefan Augustin at Warburg Research. Your line is now open.
Yes. Thank you. Just two short ones. The first one is could you give us a little bit color on the possible impact from exits on the net income on the holding in Q1? The second is the comments on Lapeyre in Q1 results sounded a bit to me that this has become a little bit more negative, but it could be misleading because Lapeyre is simply big, so it has a large influence on the loss side. Could you comment a little bit on the sequential development from the Q4 call to Q1 and how that looked in Lapeyre? That would be from my side.
Maybe to answer also shortly the impact of the exit is zero in Q1. To answer the Lapeyre, but there is a lot of one-off items in these Q1 figures, which is mainly resulting to tax and down payment of energy costs, which will harmonize throughout the year. To give you a flavor, Lapeyre was in Q1 when it comes to the profitability, EUR 700,000 behind budget. When you consider that Lapeyre makes EUR 750 million of turnover a year, I would consider they are on budget.
All right. I would have a follow-up question. In that one slide where you showed the holding incomes, the first line is, I mean, we have the consulting revenues, and then we have the consulting revenues plus the equity distribution. As the line were the same, my conclusion was that the difference to the net income in the holding needed to come from exits, as there were no equity distributions in it. That was the whole reason behind the question.
There were a couple of influence factors in the lines between. The most negative one, and it was a positive one in 2022, was the exercise of share options in Q1 2021, which contributed approximately EUR 4 million negatively. Payroll expenses that we had, and we haven't had that kind of influence in 2022. On the other hand, we have pretty much a growth margin just from consulting of approximately 50%, and that contributes substantially positive to the increase of consulting revenues directly into the net result because we have not, you know, extended the space here in Munich, for example.
On the other hand, we just had some minor positive impacts from the portfolio, but nothing that was shown as an exit in the lines.
All right, cool. Thank you very much.
As a reminder, if you have a question for our speakers, please dial zero one now to enter the queue. At the moment, there are no further questions for closing remarks by respective speakers.
Thank you very much. We take that as a compliment. There were only a few questions. Yeah, thanks again. I think most of you we will see virtually on the seventeenth of the annual shareholder meeting. Looking forward to this. There's more news than up there. We're strong, we are not afraid, and we are on track, and we will deliver. Thank you very much. Enjoy your afternoon. Bye-bye.
Bye.