DER AKTIONÄR: Mr. Täubl, many economic sectors were ravaged by the coronavirus pandemic in 2020. How badly were AURELIUS and its portfolio companies impacted by the economic repercussions of the pandemic?

Matthias Täubl: Our portfolio companies were not immune to the repercussions of the coronavirus pandemic, which could well be the greatest economic crisis of our generation. However, we benefitted from the extremely close relationships between our roughly 100 operational experts and our portfolio companies. With now more than 15 years’ experience dealing with companies in turnaround and exceptional situations, our operational experts are in close contact with our companies on an everyday basis, so that necessary adjustments can be made quickly and resolutely. As a result, we have so far weathered the crisis much better than we had feared at the start of the pandemic.

Not all companies have been equally affected by the pandemic. What are the “coronavirus winners” in your portfolio?

Matthias Täubl: Take our subsidiary Conaxess, a distributor of fast-moving consumer goods. Most people are still spending much more time at home than before the crisis, driving considerably higher sales of everyday foodstuffs like rice, pasta and crispbread, as well as hygiene products. Conaxess has benefitted from this trend. It is building on this successful development with add-on acquisitions such as the recently announced acquisition of the Swedish Movement Group. And Silvan, our Danish chain of DIY home improvement stores, has benefitted from the fact that people are using their time to beautify their homes, balconies and gardens. Finally, our British home shopping provider Ideal Shopping is benefitting from higher online and telephone sales, which gave the company a substantial growth boost in 2020.

Without being able to state concrete numbers yet, how badly has the coronavirus pandemic impacted the operating profit of AURELIUS Equity Opportunities in 2020?

Matthias Täubl: I can only state concrete numbers after we publish the preliminary results for the 2020 financial year on March 12. But I can already say this much: It appears that 2020 was a good year for us despite the coronavirus pandemic. Besides the older subsidiaries, those companies that were acquired in the last two years, such as the VAG Group and Rivus Fleet, as well as the above-mentioned Conaxess, Ideal Shopping and Silvan, all contributed to the positive development of operating results.

What can you say about your M&A activity in 2020? Did you achieve your goals despite the coronavirus pandemic?

Matthias Täubl: Six promising acquisitions, add-on acquisitions for existing portfolio companies, and several exits: I am very satisfied with that. We added some very attractive companies to our portfolio and pulled off a great exit with the sale of GHOTEL hotel & living in early 2020. Generally speaking, however, 2020 was not really a year for exits because many market players have been busy repositioning themselves. We used the time to further optimize our portfolio companies and strengthen them with add-on acquisitions. And so we now anticipate further exits in the current year. We are also very active on the acquisition side. In times of radical change, an old adage is more relevant than ever: Selectivity is the key to later profits. We have always followed and continue to follow this important principle.

You mentioned add-on acquisitions. How important are they to your portfolio and what where the highlights of 2020?

Matthias Täubl: Strengthening our portfolio companies with add-on acquisitions has always been an important aspect of our strategy for profitable growth. The most successful exits in the history of AURELIUS can also be credited to our long-term add-on strategy. With regard to 2020, I would like to emphasize the add-on acquisition for our Norwegian subsidiary NDS Group: Sola Shipping, a distributor of maritime products, complements the product portfolio of NDS ideally and expands the company’s market share considerably. Other add-ons will follow for NDS and other portfolio companies.

What transaction tempo can your investors expect in 2021? Do you stand to benefit from the heightened turnaround needs of many companies, or do you fear that new deals will be delayed by the second wave of the pandemic?

Matthias Täubl: We anticipate a considerably faster transaction tempo and we are highly confident that we will be able to announce new acquisitions in the near future, including both the above-mentioned add-ons and much larger platform transactions in some cases. We are therefore investing in personnel by successively expanding our team of experts. In fact, we recently added two highly experienced partners to our task force.

The market is in a state of upheaval. Companies are repositioning themselves and pulling out of individual markets and countries in the midst of the coronavirus crisis. We are therefore taking a close look at and seeking to acquire the most promising companies.

You announced in October that you are considering the option of co-investment funds to diversify your financing strategy. How far have these plans progressed in the meantime?

Matthias Täubl: In addition to our regular transaction focus, we see great potential for AURELIUS by expanding the business model to include larger transactions in conjunction with the operational effectiveness of our task force. We have therefore taken a closer look at the possibility of co-investment funds to complement the more customary financing instruments. Our preparations in this area are progressing according to plan.

How do you explain the significant discount of the AURELIUS share price to the stated net asset value per share? Can a bigger correction of the NAV be expected?

Matthias Täubl: As of September 30, 2020, the net asset value of the AURELIUS portfolio was EUR 950.7 million, which translates to EUR 30.90 per share. The quarterly update for the fourth quarter in connection with the 2020 financial statements, which our colleagues are currently working on, points to a positive development. Certainly, our shareholders cannot be happy with the fact that the share is currently trading at a very sharp discount of 30 percent to the stated portfolio value, compared to the historical average; nonetheless, I am confident that this imbalance will be corrected in the coming months and we can deliver good arguments for this. In the short term, the stock market is not always as efficient as the textbooks say, but in the longer term share prices always approach the fair value.

Thank you for the interview, Mr. Täubl.

Link to the Interview at DER AKTIONÄR