Megatrends and SMEs – MBB is committed to this combination. The investment company invests in medium-sized companies that are looking for a succession solution, with a focus on companies whose growth is driven by sustainable trends. MBB itself is also family-owned. The founders Christof Nesemeier and Gert-Maria Freimuth, who launched the company in 1995, own 66% of the shares. They are still involved in the Board of Directors – Nesemeier as Executive Chairman and Freimuth as Deputy Chairman.

„For entrepreneurs who sell their life's work, family identity is essential,“ emphasises Managing Director Constantin Mang, who is in charge of operations. For him, Vorwerk and Aumann, both with their own stock market listing, as well as the IT company DTS are the „driving forces“ of the portfolio. Vorwerk is benefiting from the reorganisation of the energy infrastructure, Aumann from the trend towards e-mobility, and DTS from the increased focus on IT security. Aumann and DTS have grown by 16% per year since 2021, Aumann by 34%, Mang said in an interview with Börsen-Zeitung.

„Since 2023, we have invested more than 100 million euros in shares in our own companies,“ says the CEO. Around 37 million euros went into Vorwerk shares, 23 million euros into Aumann shares, and 45 million euros into MBB shares. Mang justifies the share buybacks with the attractive valuations, particularly in comparison to the M&A market. „The opportunities in our own portfolio were so great that we preferred to invest here.," he says. Although the free floats are decreasing as a result of the share buybacks, there are no plans to delist.

However, Mang is now focussing more on the acquisition of new companies. This is because the persistently high multiples in the M&A market have fallen. „That has changed – many companies that were valued at an EBITDA multiple of eight or nine two years ago are now available for seven again", he says. As a result, more and more private companies are coming onto the market at attractive valuations.

Potential acquisitions initially involve the expansion of existing subsidiaries. For example, Aumann has taken over the laminating and coating specialist Lacom. „But we are also thinking about completely new investment lines,“ says Mang. There is an „interesting pipeline“ focussing on areas such as consumption or services. The target companies must be sustainably profitable and structurally growing. Their turnover should be between 50 million and 200 million euros.

The group can draw on ample net liquidity for company acquisitions, which totalled almost 400 million euros at the end of March. Of this, 277 million euros were attributable to the parent company MBB. The equity ratio is at a high 66%, which indicates that there may also be room for manoeuvre on the debt side. According to Mang, the dividend has been rising for 14 years, most recently to 1.01 euros per share. In Germany, there are only two companies with a longer history of dividend increases, namely Cewe and Fuchs, according to a study by the Deutsche Schutzvereinigung für Wertpapierbesitz (DSW).

MBB is targeting sales of 1 billion euros and a margin before interest, taxes, depreciation and amortisation (EBITDA) of 10% for the current year. In comparison: in 2023, the Group generated revenue of 955 million euros and an EBITDA margin of 8.4%.

While Vorwerk accounts for 373 million euros, Aumann for 290 million euros and DTS for 108 million euros in revenue, other investments are in the double-digit million euro range. According to Mang, plywood manufacturer Delignit (turnover of 86 million euros in 2023) had a challenging first half of 2024, as the caravan business, which benefited greatly from the coronavirus pandemic, was in the doldrums. „The coronavirus effect reversed,“ Mang notes. However, business should recover in the second half of the year. MBB holds 60.4% of Delignit shares, the rest are in free float. Despite the manageable market capitalisation of around 35 million euros, Mang intends to maintain the listing of the subsidiary. The free float was only expanded last year in the course of a capital increase.

The small online mattress provider CT Formpolster, which achieved sales of 34 million euros in 2023, is also facing a decline in revenue and profit. Tissue producer Hanke aims to maintain turnover at 64 million euros in 2024. On the earnings side, Hanke will benefit from the expiry of the high electricity price commitments that weighed on earnings last year. The strategic importance of these two companies has diminished, Mang admits. Neither CT Formpolster nor Hanke correspond one hundred per cent to the current search profile for new acquisitions. However, the companies have a long-term perspective: „There is therefore no reason to part with them", he says. „Selling is not part of our DNA. We want to develop companies in the long term.“

DTS is forecasting a significant increase in turnover and EBITDA. New regulations and geopolitical threats are seen as drivers. New IT security products would accelerate growth. With a margin of 14% last year, DTS stands out in the portfolio in terms of profitability. Aumann, which sells special machines and automation solutions for electromobility, is targeting a 10% margin for 2024 (2023: 7.3%). According to Mang, Vorwerk, which is active in pipeline and plant construction for gas, electricity and hydrogen, is facing a „strong 2024“ after the „transition year 2023“ with an expected margin increase to 11% to 13% (2023: 8.6%). Drivers include the new electricity motorways and the hydrogen network.