Mutares Initiates €25M Bond Repurchase After Covenant Breach, Q1 EBITDA Reaches €11.1M

Mutares is walking a delicate line. The Munich-based holding company has launched a bond buyback programme after breaching its net-debt-to-equity covenant, while simultaneously reporting a swing to positive adjusted EBITDA in the first quarter and preparing its largest-ever acquisition. The dual narrative — debt reduction on one hand, aggressive portfolio expansion on the other — sets the tone for the year ahead.

Operationally, the first quarter delivered the turnaround investors had been waiting for. Group revenue climbed 10% year on year to €1.68 billion, and adjusted EBITDA came in at €11.1 million, a sharp improvement from the loss posted in the same period of 2024. That metric is more than a quarterly snapshot at Mutares; it signals that portfolio restructuring is gaining traction. The holding-level net result remained marginally negative at minus €0.9 million, a figure that matters most for future dividend capacity.

The bond buyback, which opened on Monday, targets up to €25 million of the variable-rate notes. Mutares is offering 101.00% of par plus accrued interest, with the acceptance window running until 2 June. This is the first of a planned quarterly buyback series aimed at reducing total bond debt from the current €385 million to no more than €300 million by the end of 2026. Management expects to bring the leverage ratio back within covenant limits as early as end-June, helped by the recently signed acquisitions of Wärtsilä Gas Solutions and SABIC’s engineering thermoplastics business.

Exits are providing the liquidity to support both debt reduction and the balance sheet. Peugeot Motocycles, a business that generated roughly €140 million in sales, was sold to its management team on 6 May. Kalzip and WIJ Special Media had already been divested in the first quarter. For the inTime Group, Relobus and Conexus, sale agreements have been signed. The company describes the current pipeline of exits as the largest in its history — and it is precisely these transactions that will determine how quickly the holding’s net income catches up.

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On the acquisition side, the spotlight remains on SABIC Engineering Thermoplastics. The deal, which would add around €2.0 billion in revenue, is Mutares’s most ambitious purchase to date and is expected to close in the second quarter. The new Chemicals & Materials segment is still small but will grow significantly once the transaction is completed. In the first quarter, the largest revenue contributions came from Automotive & Mobility at €699.9 million and Infrastructure & Defense at €455.1 million.

The full-year outlook remains ambitious. Management targets group revenue in a range of €7.9 billion to €9.1 billion, with holding net income of €165 million to €200 million. The long-term goal is annual growth of at least 25% in both metrics through 2030. Meanwhile, shareholders are in line for a base dividend of €2.00 per share for the past financial year, subject to approval at the annual general meeting in early July.

At the stock market, the response has been muted. The shares traded at €26.35 on Tuesday, barely changed from the previous session and only a fractional move from the prior day’s close of €26.25. The year-to-date decline stands at roughly 12%, reflecting the market’s focus on when — not if — the exit pipeline will translate into a visible improvement in holding earnings.

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Beyond Europe, Mutares is also laying groundwork for a larger US presence. A second American office is planned, complementing the existing Chicago location. The current transaction pipeline in North America includes potential acquisition targets with combined revenue of around €4.8 billion. Success across the Atlantic would provide an additional growth engine for the years ahead.

The next crucial test will come with the closing of the SABIC acquisition. If that deal goes through as planned, Mutares will have to prove it can manage both an enlarged portfolio and a disciplined deleveraging — all while showing the market that its record exit machine can finally deliver the numbers that a net cash holding company should produce.

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