Deutsche Beteiligungs AG – Quarterly figures as of 30 April 2005Frankfurt, 14 June 2005
2
Speakers and topics
Wilken von Hodenberg, Spokesman of the Board of Management
Gustav Egger,CFO
Thomas Franke,Head of IR
Introduction
Sound financial performance – First half of Financial Year 2004/2005
Compelling business model
Strong positioning as leading market player
Key investment highlights
Appendix
3
Clear positioning
– 40 years of experience– More than 300 German
„Mittelstand“ transactions– ~ €500m assets under
management
– 40 years of experience– More than 300 German
„Mittelstand“ transactions– ~ €500m assets under
management
Well established in German private equity
market
Well established in German private equity
market– Leading position in
German mid-market private equity
– Focus on MBOs in a growing market
– Leading position in German mid-market private equity
– Focus on MBOs in a growing market
Strong market positionStrong market position
– Listed since 1985– Free float of 60.3%– Market cap: ~ €230m
– Listed since 1985– Free float of 60.3%– Market cap: ~ €230m
Largest quoted German private equity player
Largest quoted German private equity player
– 15.0% pre tax RoE p.a.(1994/95 to 2003/04)
– 15.0% pre tax RoE p.a.(1994/95 to 2003/04)
Remarkable success story
Remarkable success story
Introduction
Financial year 2004/05
5
Financial year 2004/05 – At a glance
First-half net profit: 29.8 million euros
Net asset value per share: 13.84 euros at 30 April 2005
Rise in net asset value of 12.7 percent since beginning of financial year (1 November 2004, including dividend of € 0.33)
Disinvestment of schlott gruppe AG
Babcock Borsig Service GmbH sold (April 2005)
New investment Clyde Bergemann (May 2005)
Results significantly improved
Sound financial performance
6
€0,33
11
12
13
14
15
Oct 03* Oct 04 Jan 05 Apr 05
€ NAV
€11.97 €12.57 €13.62 €14.17 / 13.84**
Development of net asset value per share (a)
Valuation of portfolios according to IFRS rules
Sound financial performance
* adjusted for capital increase in March 2004** dividend payment for financial year 2003/04 of € 0.33 in March 2005
7
First half: Development of the net asset value per share (b)
Sound financial performance
12.57 €
0.32 €
0.94 €
- 0.05 €
0.63 €
13.84 €-0.26 €
0.02 €
0.33 €
11.50 €
12.00 €
12.50 €
13.00 €
13.50 €
14.00 €
14.50 €
NAV at 31 Oct 2004
Stock market prices
Earnings/multiples
Exchange rates Other valuation changes/
Realisations
Currentincome
Others Dividend NAV at 30 Apr 2005
8
First-half result
T €1 Nov 2004
- 30 Apr 2005
1 Nov 2003 - 30 Apr
2004
Net result of valuation and disposal of financial assets and loans and receivables
34,219 12,515
Current income from financial assets and loans and receivables
477 10,506
Personnel costs 6,399 5,278
Other operating income 7,249 6,910
Other operating expense 4,716 4,114
Depreciation and amortisation on property, plant and equipment and intangible assets
100 100
Net interest - 546 - 2,376
Result of ordinary activity 30,184 18,063
Income taxes 392 391
Minority interest 10 0
Consolidated net profit / loss 29,802 17,672
Earnings / loss per share 1.60 1.14Sound financial performance
9
Balance sheet: Net cash position
Assets (mn €) 30 Apr
2005
30 Oct
2004
Liabilities (mn €)
30 Apr
2005
30 Oct
2004
Long-term assets
251.6 258.4 Equity 259.6 235.7
Current assetsReceivables, SecuritiesCashIncome tax assetsOther assets
4.3
33.014.5
13.8
5.6
1.214.2
37.0
Liabilities to banks
Other liabilities
0
57.6
28.0
52.7
317.2 316.4 317.2 316.4
Sound financial performance
10
Significant improvement in earnings
up to FY 1999/2000: AG alone; up to FY 2003/04: HGB, since FY 2004/05: IFRS
Sound financial performance
Consolidated net income/loss in million €
4.4 5.59.3
20.5
37.532.1
9.2
-15.8
3.1
18.2
29.8
94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05(6 mths)
11
Promising outlook
Sound financial performance
Sound portfolio with potential forvalue growth
Net asset value upside potential
Attractive investment
opportunities
Restructuring in Germany continues
Growing acceptance of private equity
DBAG well placed to benefit from
market development
Leading position in German mid market MBOs
12
Share price below NAV – still offering upside potential
Sound financial performance
Current share price (€ 12.30) below NAV (€ 13.84)
Dividend yield (3%) exceeds S-Dax average
DBAG (adjusted)
Dax
SDax
FTSE Investment Companies
8.00
8.50
9.00
9.50
10.00
10.50
11.00
11.50
12.00
12.50
13.00
1.11.04 1.12.04 1.1.05 1.2.05 1.3.05 1.4.05 1.5.05 1.6.05
Compelling Business Model
14
Clear and focused strategy
Investments
Fund management- Successfully raised €228m with Fund IV in 2003
Number of invest-ments
Current Value (IFRS)
Direct MBOs 14 €117.3 (47.7%)
Fund investments in foreign countries (indirect MBOs)
12 €61.8m (25.1%)
Growth financings (minority Investments)
11 €66.9m (27.2%)
Status: 30 April 2005
Compelling business model
15
Strong focus on MBOs
Seven new management buyouts since 2001
Ten Growth financings sold since 2001
Compelling business model
16
Focused MBO strategy in German-speaking regions
Group spin-offs / „Mittelstand“ businesses- Old economy industry, industrial
service sectors- Turnover up to €750m p.a.
Proven management
Leading market position
Profitable, with growth potential
Transaction value €50 – 250m
Compelling business model
Investment criteria
17
Market-leading companies
No. 1 Europe
No. 1 World
No. 1 World
No. 1 World
No. 1 Europe
No. 2 Europe
Compelling business model
18
Ten largest investments represent 78% of current IFRS value
Status: 30 April 2005
Compelling business model
Company(in alphabetical order)
Date of
invest-
ment
Invest-ment (cost) € m
Percentage owned
Type Sales 2004 € m
Industry
Bauer AG 09/96
27.6 41.2% Growth
614 Special construction
Coveright Surfaces GmbH
07/03
8.5 14.0% MBO 283 Surface materials
Grohmann GmbH 10/86
2.1 25.1% Growth
55 Automation technology
Harvest Partners Intl. III
10/97
15.2 6.9% Fund n.a. Buyout fund
Harvest Partners Intl. IV
04/01
31.8 9.9% Fund n.a. Buyout fund
Hochtemperatur Engineering GmbH
06/02
4.5 27.6% MBO 216 Engineering
Homag Group AG 01/97
22.6 21.4% Growth
692 Wood processing machinery
Otto Sauer GmbH 03/04
7.0 26.5% MBO 328 Automotive supplier
Preh GmbH 11/03
7.3 13.0% MBO 240 Automotive electronics
Quartus Capital Partners I
11/98
9.6 15.5% Fund n.a. Buyout fund
19
Recent investments: pipeline for future exits
Compelling business model
Highlights strong market position
Investment date Details
Mai 2005 Clyde Bergemann Group – MBOComponent supplier for coal-fired power plants – Investment €7.7 m
April 2004 Otto Sauer Achsenfabrik GmbH - MBOSupplier to manufactures of commercial vehicles – Investment €7.8 m
November 2003 Preh GmbH – Management buyoutAutomotive supplier – Investment €12.8m
20
New in the portfolio – Clyde Bergemann
Company- World market leader as a component
supplier for coal-fired power plants in a niche market:
- Soot blowers used to clear incineration residue in utility boilers (world market share> 50 %)
- Ash handling systems for coal-fired power plants (world market share > 20 %)
- Sales in 2004/05; $180 mn (€140 mn),~ 900 employees
Investment- Management buyout led by Deutsche
Beteiligungs AG- Investment €7.7 mn
www.clydebergemann.com
Compelling business model
Key investment highlights
22
Key investment highlights
Strong market outlook
Strong market outlook
Well balanced portfolio
Well balanced portfolio
Leading position
in German mid-market
private equity
Leading position
in German mid-market
private equity
Highly experienced investment
team
Highly experienced investment
team
Strong track record of
profitability
Strong track record of
profitability
Unparalleled access to
proprietary deal channels
Unparalleled access to
proprietary deal channels
Leading mid-market player
23
Strong market outlook
Spin-offs of non-core activities by large corporations
Secondary Buyouts
Leading mid-market player
Encouraging mid-market development
Growth drivers for mid-market deals
Key growth driver
Other growth drivers
Regulatory pressure on banks to cut back on lending (Basel II)
Succession issue for family-owned companies
- More than 10,000 mid-market companies targeted by DBAG
Restructuring situations Private equity underdeveloped in
Germany - Investments in % of GDP: 0.12% vs.
0.85% in UK and 0.54% in US*
* Status: 2003 data
24
Leading position inGerman mid market buyouts
Deal activity Germany – transaction value €50 – 250m
Source: Centre for Management Buy-out Research; 2003 and 2004, DBAG
Leading mid-market player
0
5
10
15
20
25
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
0
500
1.000
1.500
2.000
2.500
Number Value (mn €)
25
Other6%
Plant and machinery construction
18%
Trade8%
Consumer goods21%
Automotive supplies12%
Chemicals5%
Print, media, packaging
3%
Industrial services and logistics
11%
Building Industry15%
Well-balanced portfolio
Status: Acquisition costs, Date: 30 April 2005
Total investments
Leading mid-market player
26
Strong track record of profitability
* Source: Pan-European Survey of Performance, EVCA, March 2004 Base: European buyout funds, Horizon IRR 1995 to 2004, returns net to investors
Pan European total return analysis (1995 – 2004)
0%
2%
4%
6%
8%
10%
12%
14%
16%
DBAG Private equity MSCI Europe JPM Euro Bond
*
DBAG highlights
Leading mid-market player
15.0%(RoE, pre-
tax)
7.6%
11.4%
8.1%
Private equity returns higher than other asset classes
DBAG outperforms European sector
27
Unparalleled access toproprietary deal channels
Portfolio19%
Executive Circle12%
M&A Advisors
19%
Deutsche Bank23%
DBAG Partners
12%
Direct contacts
15%
26 investments in German-speaking countries (1997 – 2005)
Competitive edge through a strong network
Leading mid-market player
28
Management remuneration with strong incentive system
- Carried-interest scheme- Investment team must co-invest to
profit from performance of investments- Variable remuneration linked to parallel
funds
Highly experiencedinvestment team
Ø years of private equity experience at DBAG
5Members of board of management
> 10
5 Directors > 11
8 Investment Managers > 5
Leading mid-market player
Appendix
30
DBAG Fund IVDeutsche
Beteiligungs AG
Unique co-investment fund structure allows for benefits
Target company
Management of target company
1 % investment by carry team of
Deutsche Beteiligungs AG
Fee income for cost coverage
Access to larger transactions through additional financings (“parallel funds”)
Equity investment structure
1 2:
Benefits
Appendix
31
Successful fund management business
Deutsche Beteiligungs AG
Fund I & II Fund IV Fund III
1998 2002
Fund V
2005
Fund IV: €228 m committed – DBAG’s largest equity-raising program to date (raised 2003)
Increasing fee income- 2001/2002: €4.0m- 2003/2004: €7.3m
Further increase with increase in fund volume
Appendix
32
Shareholder profile:more international investors
Firm position in S-Dax: Market capitalisation of free float ~ 140 million euros
Status: 31 January 2005
Shareholder profile
15%
11%
8%
5%
19%
10%
7%
25%
Deutsche Bank AG
Gerling-Lebensversicherung
Wihelm von Finck
Kreissparkasse Biberach
Institutional investors, Germany
Institutional investors, UK/US
Institutional investors, othercountriesOther institutional investors andprivate shareholders
Appendix
33
Analysts’ recommendations for Deutsche Beteiligungs AG
Date Recommen-dation
Peter-Thilo Hasler,HVB Corporates & Markets
March 2005
“Outperform”
Patrick Hummel,Landesbank Baden-Württemberg
Feb. 2005 “Buy”
Ralph Jainz, Cazenove March 2005
“Outperform”
Jens Jung, Independent Research
Nov. 2004 “Buy”
Metehan Sen, Bankhaus Sal. Oppenheim
June 2005 “Buy”
Thomas Teetz, HSBC Trinkaus & Burkhardt
July 2004 “Buy”
Appendix
34
Financial calendar 2005/2006
3rd Quarter Report 14 September 2005
Analysts’ Conference Call
14 September 2005
HVB’s German Investments Conference, Munich
28 September 2005
Smart Equities Conference, Frankfurt
15/16 November 2005
Deutsches Eigenkapitalforum (Analysts’ Conference), Frankfurt
22 November 2005
Annual Press Conference
30 January 2006Appendix
35
Stock abbreviation: Reuters: DBAG.FBloomberg: DBA
ISIN code: DE0005508105
Stock market trading with official listing in PRIME STANDARD
Indices: S-DaxC-Dax-Industrial
For more information: www.deutsche-beteiligung.comDeutsche Beteiligungs AG Investor RelationsKleine Wiesenau 1 Thomas FrankeD-60323 Frankfurt am Main Tel.: +49 (69) 9 57 87-3 07Tel.: +49 (69) 9 57 87-01 Fax: +49 (69) 9 57 87-3 91
e-mail: [email protected]
Appendix
36
DisclaimerThis presentation contains forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Any statement in this presentation that states our intentions, beliefs, expectations or predictions (and the assumptions underlying them) is a forward-looking statement. These statements are based on plans, estimates and projections as they are currently available to the management of Deutsche Beteiligungs AG. Forward-looking statements therefore speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement. Such factors include the conditions in the financial markets in Germany, in Europe, in the United States and elsewhere from which we derive a substantial portion of our business.Appendix