MBB: Bargain Deals with Solid Numbers

Last Updated: 1. Dezember 2023By

Today I would like to take a look at another company that presented itself at the German Equity Forum in Frankfurt this week and left a good impression. This is the medium-sized investment company MBB.

The company recently presented solid figures for the first nine months of this year, has a full cash box and is a real value bargain. Let’s first take a look at the numbers:

Nine-Month Figures in Focus MBB increased sales in the first nine months of the current year by 8.2% to 691.0 million euros. However, the adjusted earnings before interest, taxes and depreciation (adjusted EBITDA) fell in the same period.

The decline in the adjusted EBITDA margin to 7.2% is mainly due to one-time project-related charges at the listed MBB subsidiary Friedrich Vorwerk.

MBB’s net liquidity (cash balance minus bank debts) stood at 320.6 million euros at the end of September. This currently covers more than 75% of the total market value (plus the value of the investments).

Why MBB is a Value Bargain The latest MBB figures show that most of the subsidiaries do not have a growth problem, but a short-term profitability problem. This is especially true for the energy infrastructure subsidiary Friedrich Vorwerk (errors in the order calculation were made at Vorwerk due to the outbreak of war in Ukraine).

If the company shows in the future that high sales growth and full order books are possible even with high margins, this could give a massive boost to the MBB share.

A possible IPO of the IT security subsidiary DTS also has the potential to drive up the MBB share significantly. On the other hand, since negative scenarios are already priced in with regard to the high net cash position, in my opinion, the chance/risk profile at MBB is very interesting.

The following sample calculation of the net asset value (NAV) also illustrates this: The current market value of MBB is 422 million euros. If we subtract the cash balance minus liabilities of 321 million euros, 101 million euros remain. This is opposed by 238 million euros, which is the value of MBB’s share in the listed subsidiaries Delignit, Aumann and Vorwerk alone.

In addition, MBB still has some non-listed subsidiaries. This includes the IT security specialist DTS, which should be worth at least a low three-digit million euro amount even conservatively calculated. Therefore, the MBB share is worth a look. Investors should, however, bring some patience.