Hello here from the headquarters in Munich, a warm welcome to everybody joining our earnings call for the first six months of this year. I'm here with our Vice President, Finance, Florian Winkel, who will give you some more color on our numbers. Let me start and jump straight to the highlights of the first half-year. The headlines here are very strong performance of our existing portfolio companies, a very strong deal pipeline and deal activities in the first six months so far, and a very positive outlook based on these two first bullet points I've just mentioned. The total group consolidated revenue went up slightly compared to the first six months in 2020, and given that some companies like GHOTEL, Office Depot, several different entities of Office Depot, Metz and Bertram, were still contributing to their revenue in the first six months of 2020. This is quite a nice outcome. This is also then reflected in the annualized numbers where we can see EUR 2.736 billion turnover, which is reflecting the deal activities in the last couple of months. The main number here I would like to drive your attention to is the operating EBITDA in the first six months, which went up by 63 percentage points compared to the first six months in 2020 to now EUR 122.4 billion. This is mainly on the back of our newly acquired portfolio companies like Zentia, GKN, Nedis and Distrelec. They were all acquired back in 2020 and are therefore still in the improvement phases. Also some of the companies which are with us already since quite a while, like VAG or Rivus, they are contributing quite nicely and above our average to this strong outcome. In total, even the strong Q1 numbers, we can see an even stronger operating EBITDA and operating results in the second quarter, and therefore a very strong outcome for the first six months. This is also reflected in the net asset value, which went up by 14 percentage points to EUR 1.14 million compared to the full year 2020, which means by end of 2020. If you would just take the portfolio companies, the net asset value of the portfolio companies, then the increase would be even higher by 26 percentage points. As we do have this segment, others, where the non-cash generating units and cash is included as well. Therefore, this is a little bit diluted based on the, for example, dividend payment, which means less cash, and therefore the overall outcome is a 14 percentage points increase, which is an absolutely tremendous success for us. The business the pipeline on the transaction side touched base on already, I will talk about in more detail in a minute. We have seen seven transactions so far. We have, as you might know, have been a little bit more picky last year and really we're hunting for the Getronics, Solidus, and other similar companies of the future, of tomorrow, and not necessarily just to increase our revenue. Really for the real non-core assets of bigger enterprises and not only to increase our revenue. I think this is what is paying off now, as we can see in the strong numbers for the first six months. I would like now to hand over to Florian, who will lead you through the numbers in more detail. Thank you, Matthias, and a warm welcome also from my side to our earnings call today for the first six months of 2021. We came out with our half year figures this morning. Let's start now and have a look at the numbers beginning on page number five. Our total consolidated revenues came in with almost EUR 1.7 billion, approximately the same number as for half year 2020, although we sold some of our portfolio companies back in 2020, as Matthias already mentioned. On an annualized basis, the revenues from continued operations end up at EUR 2.7 billion, related to EUR 2 billion in 2020. This is mainly related to the acquisitions we made within the second half year of 2020, as well as our newly acquired portfolio companies within the first six months of this year. In this context, I would like to point out that we already regrouped our portfolio company, Office Depot Europe, to discontinued operations as of the June 30th. As it was stated also in our press release this morning, as part of the strategic decisions to consolidate the Office Depot businesses. Among other things, negotiations are currently being conducted with some investors to sell the remaining activities of the company. That is the reason why we reclassified now Office Depot Europe to discontinued operations. As a result, the annualized revenue from continued operations for both for 2020 and 2021 is now lower than what was already stated in our Q1 press release, because at that point of time, Office Depot was shown in our continued operations. Cash from ongoing group is down to EUR 124 million after EUR 258 million in the previous year. Almost exclusively based on the lower bargain purchase in the last six months. As always, we have three different sources of earnings I would like to present to you. A bargain purchase is shown in our P&L when the purchase price we paid for a company is lower than the net assets or the equity we acquired. With regard to the acquisitions we had in the first half year, so the add-on acquisition of AutoRestore, Movement Group, and GSB Gerüstbau, as well as our new platform investment, Hüppe. Just a small bargain purchase of EUR 0.6 million has been booked so far. Almost all of these purchase price allocations we have to perform under IFRS 3 are not audited yet, most of the acquisitions I mentioned will end up with a goodwill also after the audit. Last year number was EUR 145 million. As mentioned before, this is also the main reason for the decrease in total EBITDA. Maybe one remark in this context, the closing of the Belgium-based, Norsk Hydro Precision Tubing. This deal is planned for the upcoming weeks, for this transaction, we are expecting a bargain purchase as well. The restructuring expenses went down from EUR 44 million- EUR 37 million and reflect, again, the good operational performances of our portfolio within the first six months of this year. The gains on exits went down from EUR 82 million to approximately EUR 38 million. Last year, especially, the GHOTEL sale, so our hotel chain here in Germany, was included in this line. We finally end up with a very good operational performance/EBITDA of EUR 122.4 million. That means an increase of 36% compared to the last half year operational result. Moreover, we now already reached 75% of our 2019 and 2020 operating EBITDA number. If we should be able to continue this performance in the second half of this year, it looks like an extremely good year for AURELIUS. This result, once again underlines the statement we made back in May when we had our conference call for the Q1 figures. Our subsidiaries have came through the pandemic very well. Even if I repeat myself now, although the total consolidated revenues didn't increase compared to the first half year of 2020, this gives evidence that we made the right decisions last year, especially in terms of all the companies that were offered to us during the COVID-19 pandemic. In general, our main goal is still not to increase sales numbers or to focus on revenues only and buy as many companies as possible, but rather to look for the right targets with room for operational improvement. Only this approach will lead to shareholder value from our point of view. The decline in cash can be traced back to a number of factors. First of all, we had our dividend payment of almost EUR 29 million back in May. Additionally, as mentioned before, we acquired some new companies, so one platform deal, three add-on acquisitions so far, and two co-investments in the first half year. Moreover, if you look at our balance sheet as well as our cash flow statement, we have a huge decrease in our financial liabilities. These repayments also have a big impact and we end up with approximately EUR 272 million in cash as of June 30th. Thereof, at that point in time, almost 30%, so approximately EUR 80 million, is free holding cash. Finally, the equity ratio went up to 23.1%, from 21.3% at year-end 2020. This increase already included the dividend payment I just mentioned we made back in May amounting to EUR 28.7 million. Next slide, number six. You see the cut through our portfolio in terms of total consolidated revenue as well as our operating EBITDA by the three categories. Segment, stage of the portfolio status, and by vintage. The main messages here from my side, operating EBITDA margin of our segments, services and solutions, as well as industrial production, almost reached 10% each, while the retail and consumer parts achieved almost 7%. A very good performance. Yes, we still have a significant exposure in retail and consumer, but as we already stated in our earlier conference calls, they are not only losers, but also winners of the pandemic in the sectors, for instance, our U.K. home shopping retailer, Ideal Shopping, or Silvan, our Do-it-yourself retail chain in Denmark. When we come to revenue and EBITDA by portfolio status as well as by vintage, you see that almost 50% and more is coming from the companies in the improvement stage, as well as from companies with a holding period of more than three years respectively. This is a confirmation or proof of what one would expect, that the oldest part of our portfolio is in charge of the majority of our EBITDA distribution. This is again an evidence that the AURELIUS business model works. It is also worth mentioning that our recent acquisitions, so companies in the growth sector and/or with a holding period of less than 18 months, have a material impact of our EBITDA. Okay. I would like to move on to slide number seven, the net asset value calculation of our portfolio. As Matthias already stated, compared to year-end 2020, the total NAV went up to EUR 1.145 billion, a significant increase of 14% compared to last year. This increase affects all operating segments and sectors, while the segment other shows a decrease. The valuation leads to a NAV per share of EUR 38.46 after EUR 33.67 at year-end 2020. With regard to this NAV per share, you have to keep in mind that we still have more than 1 million in treasury shares, as stated below the table. On the next slide, number eight, you'll find a detailed analysis regarding the different sectors of the NAV. This page was shown in the conference call for our Q1 numbers in May for the first time, and is one more step of our transparency initiative. To give you a bit more color with regard to the different sectors, in industrial production, we had a material increase of 36%, roughly from EUR 343 million up to EUR 468 million. This is related to different topics. First of all, we did the first fair value valuation of our portfolio company called GKN Wheels & Structures, our manufacturer of off-highway wheels. Q1, the valuation of GKN, based on the purchase price we paid and at half year, we now performed the first DCF valuation for this portfolio company. Besides the valuation of GKN, we have a very good operational performance of last year acquisition, Zentia, with its divisions of mineral fiber ceiling tiles and grid systems that we bought from Knauf International back in 2020. In addition to Zentia, we continuously have a positive development of VAG, our supplier of water works for water infrastructure, with production facilities in several countries all around the world. The stock price of our listed portfolio company, HanseYachts, went up compared to year-end 2020. Finally, Hüppe, our new platform acquisition, and one of Europe's leading manufacturers of shower equipment and bathroom accessories, is included for the first time this year. Despite the very good development in the sector, there's still room for improvement because, for instance, the valuation of ZIM Aircraft Seating, our manufacturer of aircraft seats, is still very low after they filed for administration last year. In our second sector, retail and consumer products, we also have an 11% increase from EUR 345 million up to EUR 384 million. This is due to, again, very strong operational performances of Nedis and Distrelec in the second quarter. Nedis, our wholesaler of entertainment, electronics, and household appliances, and Distrelec, a multi-channel retail enterprise, were bought from the Swiss-listed Dätwyler Group also back in 2020. Furthermore, the new add-on acquisition Movement Group, an add-on of the Danish Conaxess Trade Group is shown at purchase price within the segment. The third topic I would highlight is, in general, an overall positive retail market outlook due to the progress we have in terms of vaccinations and declining corona incidences. Finally, we have our last operating sector, services and solutions. There we have an increase of approximately 41%, so up to EUR 150 million in comparison to EUR 82 million at year-end. This increase is coming from a strong operational performance, especially of Rivus Fleet Solutions. Our fleet operator and management service provider in the U.K. Also two of our 2021 add-on acquisitions. Namely GSB Gerüstbau, an add-on of BPG Building Group, located in Berlin, and AutoRestore, an additional add-on of the previous mentioned Rivus Fleet, are part of this development. For the segment other, you see a decrease of roughly EUR 58 million compared to year-end. This number includes the dividend payment of EUR 28.7 million in the second quarter, as well as the purchase prices we paid for our fixed acquisitions this year. As mentioned before, the one platform, Hüppe, the three add-on acquisitions, as well as the two co-investments we made with the fund. I guess this is well known, but nevertheless, worth mentioning, the valuation of the sector other consists of the cash of the listed AURELIUS Equity Opportunities and the non-operating holding companies. Additionally, the treasury shares of AURELIUS Equity Opportunities are included, as well as our brand company. Finally, the nominal amount of our Nordic bond is deducted in this segment. Lastly, we have our complete new line item in the NAV table, our co-investments. Together with the newly launched AURELIUS European Opportunities IV fund, we co-invest in the European mid-market. Matthias will go into this a bit more in detail later on, I guess page 10. The number of EUR 3.3 million listed in the table on slide seven shows our co-equity funding only. There is also debt funding for the co-investment as well as earn-outs, but both of them are not shown. Please mind that the co-investments included here will be shown at fair value at this year-end for the first time. It's only the purchase price. Let's move on to the last page slide with numbers, page nine. This table presents the NAV by vintage, and shows that the largest spike of the NAV is resulting from the oldest part of our portfolio. Companies that have been acquired for more than three years ago. This part reflects approximately 40% of the total NAV. Furthermore, some more information about the NAV calculations are stated here, but I guess all of them or most of them are well known. The NAV still based on a DCF model, and we used actuals as of June 30th, including the budgets, respectively, the forecasts of the portfolio companies till year-end 2023. We still assumed a conservative growth rate of 0.5%, and we have an WACC of 10.3% on average. This WACC is lower than for year-end. At this point in time, it was approximately 10.9%, but the WACC still includes a risk premium for a lot of our portfolio companies. Moreover, for example, in comparison to year-end 2019, we still have an increase of 2% in the WACC. Now it's still 2% more in the WACC on average than at year-end 2019. Therefore, there's also still a lot of potential in our NAV just from a WACC perspective. Now before I hand over back to Matthias again, maybe one last remark from my side. As already stated in our earnings call in May, we will, beginning from Q3, publish a full set of financial figures, including a balance sheet and profit and loss at each quarter end. This set of numbers will replace our press releases as our new Q1 and Q3 reportings. One additional step in terms of more transparency, and due on November 11th for the first time. Thanks a lot from my side. Matthias, please go ahead with some more information about the investment focus and the transactions that already took place this year. Thank you, Florian. Before I will talk about the transactions and the outlook for the upcoming months, let me briefly remind you on our enlarged investment focus and outline again our enlarged investment focus on page 10. Besides the first two pillars, platform and add-ons, we are more than pleased that we have now the possibility also to co-invest in bigger deals together with the AURELIUS European Opportunities IV fund. All three pillars have in common, and there is one big bracket for all the three pillars, is a strong operational involvement needed. This comes into play when our task force around about 100 colleagues, operational people on the ground supporting the portfolio companies, especially at the beginning when it is a carve-out situation or a special situation where a lot of additional manpower is needed on the ground. This is when our task force comes into play. This is the bracket for all the three pillars. The platform investments, pretty much the same sweet spots that we had in our history already, focusing on corporate carve-outs and special situations. Tickets, equity tickets, around up to EUR 10 million. We have the add-on acquisitions as a second pillar, where we are focusing on accelerating the transformation and the growth of our existing portfolio companies by bolting on different other targets to strengthen the existing portfolio companies. The third pillar is, as just mentioned before already, is the co-investment, where we invest in portfolio companies together with the fund. Equity tickets here are up to EUR 100 million. The same sweet spot when it comes to the special situation and the corporate carve-out structure. Let me talk first about the first pillar, the platform acquisitions, two of them so far this year. The first one is Hüppe, manufacturer of shower enclosures, shower trays, and bathroom accessories with two production sites in Germany and in Turkey. This is a very typical AURELIUS blueprint case and transaction. We are talking here around about EUR 70 million in size, 500 employees. It's an healthy underlying market and an healthy core of this business, but it has nevertheless significant upside in the profitability, when we will take this to a standalone company, as it was not core of Masco, of this bigger enterprise, for quite a while, and therefore there is still some profitability left on the table. In addition, it's a very fragmented market with a lot of local players who focus on local markets only. Therefore, this gives us quite a nice platform possibility to add on different targets when it comes from a geographical point of view, but also when it comes to adding on maybe different other products and services to Hüppe in the upcoming years. This normally is when we have a look on our most successful portfolio companies in the past, add-on acquisition was always a very important lever. This is why we think this is a really nice platform investment. The second transaction was Norsk Hydro Precision Tubing. This deal we signed beginning of July this year. It's not closed yet. We expect the closing to be done in the upcoming days. This company has been acquired from Norsk Hydro, and I will talk about this in more detail in a minute. On page 12, the second pillar of our investment focus, add-on acquisitions. The first one was for our portfolio company, Conaxess Trade, with Movement. Movement is a company of around about EUR 20 million revenues, Swedish sales, marketing, and distribution company for fast-moving consumer goods. Pretty much a perfect fit for Conaxess Trade. Highly synergetic add-on acquisition. Not the first one, and we have a nicely filled pipeline for Conaxess, and hopefully therefore see some more of similar add-ons in the near future. This also counts for BPG, our Building Partners Group. They have done some add-on acquisitions under the ownership of AURELIUS in the past already as well. Just recently in March this year, have added another business, GSB Gerüstbau. It's scaffolding business based in Germany, EUR 8 million revenues and 50 employees. The third one is for our portfolio company, Rivus Fleet Solutions in the U.K. They have acquired AutoRestore, EUR 12 million in size revenue wise, and they are providing mobile accident body repair services and operating a fleet of over 130 mobile repair vans in the U.K. This is where we do see more and more activities. We're talking here about smaller companies. Some of them are struggling as the support measures, the governmental support schemes and measures and different legal restrictions and countries are coming to an end. Postponed payments like tax payments, for example, are leading to some difficulties for these companies. We are talking about ramping up the business again, which normally means you need some kind of working capital. This is where we do see a lot of opportunities for our existing portfolio companies to add on highly synergetic smaller companies. On page 13, the third pillar, the newly established co-investment strategy together with the AURELIUS Fund IV. The first acquisition we have done under this scheme is Advanced Power Solutions, how it is now called. This is the consumer battery business from Panasonic in Europe. Three locations with the headquarter in Belgium, EUR 230 million revenue, 900 employees, and pretty much the same than what I've mentioned before for Hüppe blueprint case how a complex cross-border divestment can be handled, and I think this is why AURELIUS is the number one for carve-outs for bigger enterprises, and this is why Panasonic did finally choose for AURELIUS as the buyer of this Advanced Power Solutions business. The second one is SSE, providing mechanical, electrical, rail, street, and lighting engineering services to install and maintain key infrastructure in the U.K. and in Ireland. We acquired this business from SSE. It's GBP 320 million in revenue, talking here about 1,900 employees. Again, we do see a lot of potential here in taking this company to a standalone basis. First of all, it's becoming core for us. It's a core business for us. Therefore, we have identified a lot of different levers how to take this company to the next level and increase profitability in a sustainable way. On the exit side, needless to say, not a big surprise that so far, corona pandemic was not necessarily the right moment to exit portfolio companies without any need. Therefore, we would have diluted maybe some of the shareholder value. We might see some smaller exits in the upcoming months and then some bigger ones from 2022 onwards again. Not a big surprise that we haven't focused so much on exiting companies. We have been approached for our portfolio companies, but we think when there are some more months of current trading, unadjusted current tradings, then it's the right moment to ask for the right multiplier for our really profitable and successful businesses. We have only seen Office Depot Europe has sold its Italian business to Bruneau, a French strategic in March of this year. Let me talk about one company we haven't touched base on as it was just signed in early of July, a little bit more in detail. This is Norsk Hydro Precision Tubing, EUR 50 million in revenue, 200 employees at one production site in Belgium. They are producing tubes for industrial products, heating, ventilation, and air conditioning. Based in Belgium, as I mentioned before, the production site, and are servicing customers in 30 countries with the main focus on Western Europe. Main markets here are Germany, France, Poland, and the United Kingdom, U.K. Similar criteria or similar description, what I've done before for Hüppe. It's a really healthy, growing underlying market. The company itself has a long-standing reputation for high-quality products and therefore a high customer satisfaction over several years already. Besides that it is with EUR 50 million revenue in size, quite decent in size. It's a nice platform. Again, a very fragmented market, a lot of local players. Also a lot of smaller players in different niche markets of this industry. Therefore, we do think this is a nice opportunity besides the standalone upside and the different levers to increase the profitability on a standalone basis to also take this as a platform and do some nice add-on acquisitions here for this company. This brings me to the current status of our portfolio. What we do see here is a very well-balanced portfolio by industry, by geography, but also in size. Especially what Florian mentioned before already is that we can see also the companies which have been newly acquired, which means in the last couple of years, and they are still in the improvement phases. They are contributing quite nicely to the overall operating EBITDA, which we can see on the right-hand side. Therefore, a nicely balanced portfolio. As you might notice, graph on the X-axis, we can see the year when this company has been acquired. On the Y-axis, we do three different stages of maturity, improvement, optimization, and growth phases. Typically, the companies which are in the growth phases already and therefore the most profitable ones, but also contributing to the net asset value above average. These are the companies where we typically start thinking about an exit sooner than later. Overall, very pleased with the overall development of our portfolio. Very pleased at our strategy that also newly acquired companies or the companies we are acquiring need to have a decent level of profitability. This is paying off, and therefore I'm quite optimistic when it comes to the upcoming months, the operating performance of our portfolio companies. This brings me to the end of our presentation. Again, very pleased with the really strong numbers. I think what I've outlined before, that we were a little bit more picky last year when it did come to doing transactions, really focusing on the real non-core units of bigger enterprises and not so much only on businesses which might have had some health issues prior to the COVID crisis already. We are looking for the Getronics, Solidus, and Secop of tomorrow, not only growth in revenue. This is something which has paid off. We have a tremendous increase in our operating EBITDA. I think, therefore, this is the evidence that the strategy or the decision to go for the strategy was the right one. We do see a lot of opportunities in all the three different pillars I've mentioned in different areas on the platform investments and also for the co-investments. We have a nicely filled pipeline. We do think that the really strong months when it comes to transactions are ahead of us. We haven't seen them yet. I think since February, March this year, we can see that many of the bigger enterprises are picking up these topics again, where when during the COVID crisis, they had to more focus on their core business and make sure that this core business will sail through the stormy COVID water in a steady way. They are now coming back and like to divest some of their non-core assets, and therefore, we think we are well-positioned in all the three areas. The last topic, of course, on the top of our agenda is the focus on our capital market communication to improve our transparency, talk about ESG on a daily basis. Therefore, we will not rest in bringing up new ideas and implement new measures to increase that transparency. Like Florian mentioned before, therefore, we will also, beginning from Q3 onwards, publish complete financial figures, which hopefully will give you all some more comfort, and will outline again the positive development in our portfolio, and therefore of AURELIUS as a company. Thank you very much for listening, and would like to open now for questions. The first question is from Gerhard Orgonas. Gerhard, your line is now open, please go ahead. Yeah, good afternoon. I just wanted to know of the cash that you have on the balance sheet, how much is investable at the holding level at the moment? Maybe because you've repaid some debt as well, what is your equity firepower if you were to take on more new debt, for future potential acquisitions? Okay. Let me take this question. With regard to cash. Yes, as I already mentioned, the EUR 272 million as of June 30th, thereof, approximately 30% non-operating cash, so approximately EUR 80 million of firepower as you described. I guess we see more cash coming in within the next months. Nevertheless, we are always looking for options to re-increase the cash on a holding level. We are currently discussing some measures, but these are not yet ready for use at this point in time, I guess. Maybe let me add, Gerhard, thank you for your question. Let me add, the cash inflow I just mentioned is mainly based on the strong performance of our portfolio companies, and therefore there is some non-operation, non-needed cash around which will be upstreamed in the upcoming months. Okay. Is there a leverage level on the holding or something that you would be comfortable with? For the overall company? Do you have any metrics in place for that or not really? You mean for the portfolio companies or for AURELIUS itself? For AURELIUS as a holding. Yeah. We do have different metrics. I think at the moment this is not a big issue, not a topic we are too much concerned about. Definitely there would be room for improvement if you see further opportunities or even bigger opportunities, which is the case, to be honest, that we see that the pipeline is really nicely filled. We do see nice opportunities in all the three different areas, and especially on the co-investment side, so going for bigger deals, which might lead to a situation where we say, okay, take on some additional cash. As we outlined, there is plenty of cash, non-operational needed cash in our portfolio companies as well. We will find the right balance here, but there's definitely room for headroom left here. Perfect. Thank you. The next question is from Alina Köhler, Hauck & Aufhäuser. Your line is now open. Please go ahead. Good afternoon. I actually have an add-on question to the same topic. What is currently the net debt at your holding level, and also what do you expect the net debt to be following the upstreaming of the cash? Two more questions. One would be an update on Bring Frigo. When do you expect the closing of this? On the third question, I was wondering, and this is just for clarification, if you use debt funding for co-investments, is this included in the other position, or will this be included in the co-investment position in the net asset value calculation? Alina, thanks for your question. Maybe I start with the last one, the debt funding. It's not included in the NAV because we show only our equity stake in the NAV, but it's a cash out on the other segment level. It is only a cash out, but yet not shown as a positive development in our NAV of the co-investments. With regards to your question of the net debt on holding level, in comparison with the Q1 numbers, we made the payout of the dividend, as I mentioned, at roughly EUR 29 million. The net debt on holding level increased a little bit in comparison with Q1. As I already mentioned and also Matthias stated, we see a lot of potential for upstreaming some cash, not needed operating cash in our portfolio companies. We should increase our cash number within the next weeks and months again. Okay. Thank you. We haven't received any further questions at this point. I hand back to the speakers for closing remarks. Again, thank you very much to everybody out there for listening. I hope you're as pleased as we are with the outcome of the first six months. Strong performance, a very positive outlook for the upcoming months when it comes to the performance of our existing portfolio of companies, but especially also when it comes to the opportunities for doing new deals, new transactions. Hopefully by 2022 also we'll see some bigger exits then again. Thank you very much for listening, and have a nice day.
Loading workspace