Identifying potential. Exploiting potential. SECA Conference Zurich, 3 July 2013

Transcription

1 Identifying potential. Exploiting potential SECA Conference Zurich, 3 July 2013

2 Deutsche Beteiligungs AG at a glance Well established in German private equity market More than 300 private equity investments dating back to 1965 Dedicated focus on investing in Mittelstand companies 1.3bn assets under management Remarkable success story 15.1% after tax RoE per share (on average, 15 years), 13.8% (on average, 10 years) Largest listed German private equity player Listed since 1985 Member of S-Dax, LPX Indices and Stoxx Private Equity 20 Market cap ~ 260mn Free float ~ 70% Strong market position Leading position in German mid-market private equity Experienced investor in buyouts as well as in growth financings 2

3 Business model: Advantages through coinvestment funds Direct investment company invests alongside institutional funds (limited partnerships) managed or advised by DBAG Co-investment funds enable Higher risk diversification for DBAG (Partial) coverage of management cost Management of target company (in case of an MBO) DBAG Team Parallel Fund DBAG and its parallel investing funds (fixed ratio) Target company 3

4 DBAG s investment strategy Focus on market-leading industrial companies ( German engineering ): Buyouts and growth financings with transaction value of 50mn to 250mn in German-speaking countries Earnings growth opportunities Core sector focus Value creation by portfolio companies Earnings growth (business & geographical expansion, operational excellence) Improvement of strategic positioning Corporate governance & management incentives Exit DBAG delivers transformed companies that are attractive to strategic acquirers 40 Transactions since 1997 Split by sector Mechanical Engineering Industrial Services Automotive Suppliers Building Supplies Industry Industrial Automation Other 4

5 Stock market rewards performance Performance of DBAG shares and NAV per share (1 November June 2013, Index: 1 November 2004 = 100) DBAG shares Dax LPX Direct DBAG NAV per share plus dividends Reference point 1 Nov. 2004, since IFRS-based data for previous periods does not exist 5

6 Shareholders profit from investment performance Dividends and dividend yield (relative to opening NAV per share at start of financial years) % 21.8% % % % % 4.3% 7.2% 5.7% /04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 Dividende Sonderdividende Ausschüttungsrendite (bezogen auf EK je Aktie zum Start des GJ abz. Div.) Dividend Surplus dividend Return on NAV per share at start of FY (less dividends) 6

7 Appendix 7

8 First six months of the financial year at a glance Consolidated net income Six months ended Six months ended 30 April 2013/ 30 April 2012/ 30 April October mn 27.7mn* Financial resources 123.1mn 105.8mn Net asset value 268.7mn 266.2mn * incl. one-off effects of 9.3mn net (reversal of provisions, fundraising costs) 8

9 Brisk investment activity Five new investments agreed in the six months ended 30 April 2013 New investment of 26.8mn 7.7mn invested prior to 30 April 2013 (Heytex, PSS) 15.6mn invested in Q3 (Formel D, Stephan Machinery, inexio) Nov. 12 Dez. Dec. 12 Feb. 13 Mrz. Mar. 13 Apr. 13 Gesamt Total im invested 1. Hj. investiert 1 HY (Mio. ( mn) ) noch still to zu be investieren/zugesagt invested/committed (Mio. ( mn) ) 9

10 Result for six-month period: P&L Net result of valuation and disposal of financial assets and loans and receivables T 1 Nov Apr Nov Apr ,135 23,559 Current income from financial assets and loans and receivables Personnel costs -6,733-7,066 Other operating income 10,733 18,185 Other operating expenses -7,735-7,090 Depreciation and amortisation on property, plant and equipment and intangible assets Net interest Net income before taxes 19,859 28,399 Income taxes Minority interest Consolidated profit 18,946 27,747 Earnings per share (in, undiluted)

11 Statement of financial position: Financial resources of ~ 123mn at reporting date Assets ( mn) 30 Apr Oct Liabilities ( mn) 30 Apr Oct Financial assets and loans* Equity Other Financial resources* Non-current liabilities Current liabilities Increase in financial resources due to inflows from realisations transacted in FY 2011/2012; outflows i.a. for dividend payment ( 16.4mn), new investments (i.a. in Formel D, 10.4mn) * Financial resources: liquid funds and long-term securities 11

12 Portfolio: Current investments of high quality Current portfolio value (mainly) based on 2013 budgets Budgets 2013 exceed 2012 actual figures Portfolio value split by underlying EBITDA multiple NAV split by net debt / EBITDA % 11% 36% 34% 63% 55% < < 6.0 >= 6.0x < < < 3.0 Basis: Financial assets at 30 April 2013, less investment in Coveright, MCE AG (retention for warranties), DBG Eastern Europe, Harvest Partners, shelf companies and companies mainly attributable to third parties; net debt and 2013 EDBITDA based on portfolio companies budgets or analysts estimates (Homag Group AG; 2013) 12

13 Portfolio: Is uro crisis a threat? German manufacturing companies Market leading companies operating on global scale Strong growth prospects in emerging economies Geographical revenue split Spheros 48% 8% 44% Europe Romaco 53% 8% 31% 8% Europe excl. Eastern Europe Homag Clyde- Bergemann 21% 57% 24% 13% 42% 5% 18% 12% 6% Eastern Europe (incl. Russia) North America Asia/Pacific Broetje- Automation 78% 20% Other 13

14 Other operating income: DBAG Fund VI augments basis for future income Management fee income to cover basic operating costs, target: TER < 3% 2011/12: fee income of 11.7mn for management services to co-investment funds Starting Q2 2013, additional fee income for management services to DBAG Fund VI 2012/13e: 16.4mn Fee income from fund advisory and management services 20,0 15,0 10,0 5,0 0,0 DBAG Fund IV Fonds I / Fonds III DBAG Fund IV DBAG Fund V DBAG ECF DBAG Fund V DBAG Fund VI DBAG ECF DBAG Fund VI 14

15 Current portfolio companies (l) Company Revenue 2012 mn Broetje-Automation GmbH, Wiefelstede Clyde-Bergemann- Gruppe, Wesel/Glasgow/Delaware FDG-Gruppe, Orly, Frankreich Formel D GmbH, Troisdorf Grohmann GmbH, Prüm 85 (FY 11/12) 447 (US-$; FY 11/12) No. of staff Core business 390 A developer and manufacturer of machines and complete lines for the automated production of aircraft 1,700 A developer and manufacturer of components for power plants Non-food category management for supermarkets in select product lines 124 2,500 A globally operating services provider to the automotive manufacturing and supplier industry 111* 850 A developer and provider of plants for industrial automation Markets worldwide worldwide France, neighbouring countries worldwide worldwide * tentative 15

16 Current portfolio companies (ll) Company Heytex Bramsche GmbH, Bramsche Homag Group AG, Schopfloch inexio KGaA, Saarlouis JCK Holding GmbH, Quakenbrück Plant Systems & Services PSS GmbH, Bochum Revenue 2012 mn 20 (FY 11/12) No. of staff Core business A manufacturer of print media for the advertising industry and technical textiles for a variety of other industrial applications A provider of woodworking machines and plants for the furniture and construction supplies industries 105 A provider of broadband connections Markets worldwide worldwide Germany, Belgium, Luxembourg 480* 990 A marketer of textiles Germany An industrial services group for components and support services for the energy and process industries Germany, Netherlands * tentative 16

17 Current portfolio companies (lll) Company Revenue 2012 mn No. of staff Core business Markets Romaco-Gruppe, Karlsruhe Spheros GmbH, Gilching Stephan Machinery GmbH, Hameln 109 (FY 11/12) 450 A developer and manufacturer of machines and complete lines for packaging and processing applications A developer and manufacturer of air conditioning systems, engineindependent heating systems, water pumps and roof hatches in buses A developer of machines for food production processes worldwide Europe, Latin America, Asia worldwide * tentative 17

18 Case study Coperion: Realisation of a successful investment (1/2) Leading manufacturer of compounding systems and bulk materials handling equipment Revenues (2012) ~ 550mn 2,000 employees Investment 10.4mn invested (July 2007) DBAG owned 18.8% (another 78.0% held by DBAG Fund V) Realisation completed in November 2012 Invested capital quadrupledategic interests 18

19 Case study Coperion: Realisation of a successful investment (2/2) Performance highly cyclical 2007/2008: Record orders, followed by record revenues and record earnings 2008/2009: Orders in new machine business plummeted by 90% (economic crisis) 2009/2010: Low point in revenues and earnings 2010/2011: Orders recovered, (crisis-related) low margins 2011/2012: Further recovery in all indicators Value gain based on significant improvements Organisation: Homogeneous leadership structure, explicit decision-taking processes Production: Flexibilisation of cost structure, lower break-even point (e.g. by standardising machine designs) Market & products: Service business expanded; acquisitions broadened product range Finance: Current assets clearly reduced 19

20 Investments in the portfolio: Acquisition of Heytex Bramsche GmbH (1/2) Leading manufacturer of textile print media and technical textiles Revenues ~ 77mn (2012) 300 employees Technology leader and European market leader in core business of print media, featuring broad product range Production in Germany and China, distribution offices also in the US, Brazil and China 20

21 Investments in the portfolio: Acquisition of Heytex Bramsche GmbH (2/2) Investment 6.4mn invested (Dec. 2012) DBAG holds 17.1% (another 70.7% held by DBAG Fund V) Investment case Expansion of distribution activities Stronger internationalisation Intensification of R&D activity 21

22 Investments in the portfolio: Investment in Plant Systems & Services PSS GmbH (1/2) Nucleus for group of specialised industrial services companies Services for the energy and process industries (power plants, chemical companies, tank farms) Revenues 52mn (2012) 290 employees Cross-regional approach Broad range of services covering clients entire value chain 22

23 Investments in the portfolio: Investment in Plant Systems & Services PSS GmbH (2/2) Investment 1.2mn invested (Dec. 2012) DBAG holds 10.2% (another 14.2% held by DBAG ECF) Majority shareholder holds 75.6% Future growth will allow to increase the stake in PSS Investment case Build a group that combines the benefits of mid-market structures with engineering and systems competence and the finance capabilities of a holding 23

24 Investments in the portfolio: Acquisition of Formel D GmbH (1/2) Broadly positioned services provider to carmakers and their suppliers Revenues (2012) 124mn 2,500 employees Focus on services that address quality issues Strong internationalisation: 64 locations, incl. Germany, USA, Brazil, Russia, India and China 24

25 Investments in the portfolio: Acquisition of Formel D GmbH (2/2) Investment 10.4mn (May 2013) for 15.1 percent interest (DBAG) Another 62.4 percent held by DBAG Fund V Founding partners and managers hold remaining shares Investment case Expand market position Continue pattern of rapid growth Expand sales organisation Plan succession at top management 25

26 Investments in the portfolio: Acquisition of Stephan Machinery GmbH (1/2) Technology leader in machines for food production processes (thermal processing of liquid or semi-liquid food) Revenues (2012) 42mn 180 employees Competence for complete processing lines Leading position in small niche markets 26

27 Investments in the portfolio: Acquisition of Stephan Machinery GmbH (2/2) Investment 3.5mn for 19.0 percent interest Another 78.5 percent held by DBAG Fund V Investment case Expand service business Magnify internationalisation via own sales organisation Participate in growing market for convenience foods and baby food 27

28 Investments in the portfolio: inexio Informationstechnologie und Telekommunikation KGaA (1/2) Strongly growing provider of broadband connections in rural areas Total output (2011/12) 20mn 105 employees Equity investment to accelerate growth Infrastructure build-out secures attractive long-term revenue streams 28

29 Investments in the portfolio: inexio Informations- technologie und Telekommunikation KGaA (2/2) Investment Minority investment of 1.7mn for 4.2 percent interest; another 2.4mn can be drawn down along with further growth Another 5.8 percent held by DBAG Expansion Capital Fund Investment case Expand proven business model by adding new local networks Acquire smaller competitors or cable infrastructure, if appropriate 29

30 Portfolio* (IFRS value) Number of investments Current value (IFRS) Direct MBOs Expansion financings (minority investments) Fund investments in foreign countries (indirect MBOs) Direct MBOs Status: 30 April 2013 * Portfolio value: without shares in shelf companies and companies largely attributable to third parties 30

31 Ten largest investments account for 90 percent of portfolio value* (IFRS) Company (alphabetical order) Investment (historical cost, mn) Equity share DBAG (%) Broetje-Automation GmbH Clyde-Bergemann-Gruppe Sector DBG Eastern Europe II L.P Buyout funds Mechanical engineering and plant construction Mechanical engineering and plant construction FDG-Gruppe Industrial services Grohmann GmbH Harvest Partners IV Buyout funds Mechanical engineering and plant construction Heytex Bramsche GmbH Speciality Chemicals Homag Group AG Romaco-Gruppe Mechanical engineering and plant construction Mechanical engineering and plant construction Spheros GmbH Automotive suppliers Status: 30 April 2013 * Portfolio value: without shares in shelf companies and companies largely attributable to third parties 31

32 Portfolio profile (measured by IFRS portfolio value, 30 April 2013) Graphic split of investments 5% 5% 3% Germany USA Holding periods for investments 27% 22% < 2 years 2 to 5 years 87% Other Europ. Countries Rest of world 37% 15% 5 to 10 years > 10 years Sector splits of investments 7% 7% 9% 3% 6% Mechanical engineering and plant construction Industrial services and logistics Consumer goods Automotive suppliers Specialty Chemicals Valuation methods applied for investments 12% 10% 33% Acquisition costs Stock market Multiples 68% Other 45% Other 32

33 Investment environment: Buyout market stable Volume of buyout investments stable, clear rise in second half of year (17 of 29 transactions) MBOs in Germany s mid-market segment (transaction value 50mn to 250mn) Number Value Source: CMBOR and Deutsche Beteiligungs AG/FINANCE (2011 and 2012) Number Anzahl Wert Value 33

34 Homag transaction DBAG minority shareholder since January 1997 (21.4%) Acquisition cost ~ 6.00 per share First increase in interest February 2007 DBAG, DBAG Fund IV and DBAG Fund V acquired another 39%, thereof DBAG 5.5 percentage points Acquisition cost per share IPO in July 2007 DBAG and funds sell 40.3% of their interests for per share Second increase in interest in 2012 DBAG, DBAG Fund IV and DBAG Fund V acquire another 6.1%, thereof DBAG 2.7 percentage points Acquisition cost ~ per share IPO (and dividends) return more than 1.4x the entire acquisition costs to date; DBAG still holds 3.1 million Homag shares (20.1%) 34

35 Long-term performance Return p.a. (10-year average, ) 16% 14% 12% 10% 8% 6% 4% 2% 0% 10.5% 8.6% 7.0% 10.9% 13.8% JP Morgan Euro Bonds HSBC Small Company Equity FTSE Europe European Buyout Funds DBAG (2002/ /12) Return on NAV outperforms other asset classes Ten-year average return for DBAG improved to 13.8% for period from 2002/ /12 Source: EVCA 2012 Pan-European Private Equity Performance Benchmarks Study; same patterns of cash flows assumed over time in all asset classes as in the private equity data set, all indices as total return indices, DBAG as stated. 35

36 Structure: Management company to safeguard investors interests Investment team initialises decision process on investments and manages the portfolio through a management company 80 percent of voting rights in management company in the hands of members of DBAG Board of Management => Safeguards independence of management company against changes at DBAG level DBAG earns fee income from co-investment funds via the management company Shareowners 100% economic interest Management 80% of voting rights Investors in coinvestment funds ( LPs ) DBAG Management company manages / advises LP Funds 20% of voting rights 36

37 Co-investment funds of DBAG DBAG Fund IV ( 228mn) Investment period Sept Feb Investment ratio DBAG-Fund: 29 to 71, total assets 321.6mn Ten investments: Seven exited completely, two partially DBAG Fund V ( 434mn) Investment period Feb Feb Investment ratio DBAG-Fund: 19 to 81, total assets 539.1mn Eleven investments: Three exited completely, another partially DBAG Fund VI ( 567mn) Investment period started Feb Investment ratio DBAG-Fund: 19 to 81, total assets 700mn DBAG Expansion Capital Fund ( 142mn) Investment period started Aug Investment ratio DBAG-Fund: 42 to 58, total assets 242mn Two investments 7.9% of commitments drawn down (31 May 2013) 37

38 Investor base of buyout funds Country DBAG Fund IV DBAG Fund V DBAG Fund VI Germany 54% 32% 19% Great Britain 21% 9% 5% Rest of Europe 15% 28% 38% USA 6% 24% 25% Asia 4% 7% 14% Investor type DBAG Fund IV DBAG Fund V DBAG Fund VI Banks 47% 20% 8% Pension funds 16% 32% 35% Fund-of-funds 12% 23% 31% Foundations 5% 13% 7% Family Offices 8% 4% 1% Other 13% 8% 18% 38

39 Shareholders profit from investment performance Net value growth of about 300mn in nine years mn Equity (31 Oct. 2004) Dividends Share buybacks Net value growth Equity (30 April 2013) Reference point 1 Oct. 2004, since a capital increase significantly changed the balance sheet structure in spring

40 Share performance over ten years Share performance from 1 November 2002 to 16 May 2013 Index: 1 Nov = DBAG Dax S-Dax LPX Direct Nov. 02 Nov. 03 Nov. 04 Nov. 05 Nov. 06 Nov. 07 Nov. 08 Nov. 09 Nov. 10 Nov. 11 Nov

41 Shares trading at a small discount Discout /premium to net asset value per share (1 November June 2013) 10% 0% -10% -20% -30% Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 41

42 Performance: DBAG shares a good investment Performance of a DBAG portfolio over one, five and ten years (Initial investment of on 1 November, resp.) 1 year 11,328 12,788 12,444 13,329 5 years 8,631 6,870 9,213 12,185 S-Dax LPX Direct Dax DBAG 10 years 18,916 23,029 27,893 41,176 42

43 Electra GIMV Pantheon HgCapital Princess PE Better Capital Graphite HBM BioVentures LMS Capital F&C PE DBAG JZ Capital Partners Std Life Euro HarbourVest JPMorgan PE Candover NB PE Dunedin Henderson PE Dinamia Better Capital Trading in DBAG shares Trading volume in DBAG shares (average daily turnover on monthly basis) Jan 10 Apr 10 Jul 10 Okt 10 Jan 11 Apr 11 Jul 11 Okt 11 Jan 12 Apr 12 Jul 12 Okt tgl. daily Handelsvolumen turnover in in Euro tgl. daily Handelsvolumen turnover by no. in of Stück shares Average daily trading volumes of listed PE companies 2011 ( '000)

44 Shareholder profile Free float (as defined by Deutsche Börse) 69.9% Entrepreneur Dirk Roßmann increased his equity stake to over 25% in August 2012 Shareholder Portabella (Ventos S.A.) increased his equity stake to 5.1% in October 2012 Shareholder profile Nov % 25.0% 11.0% 10.8% 6.4% Private shareholders Dirk Roßmann Institutional investors rest of world Institutional investors USA Nov % 20.1% 8.9% 18.2% 12.6% Institutional investors D 44

45 Analysts ratings for Deutsche Beteiligungs AG Recent ratings Date Recommendation Close Brothers Seydler Research, Ivo Visic HSBC Trinkaus & Burkhardt, Thomas Teetz J.P. Morgan Cazenove, Christopher Brown/Matthew Hose Landesbank Baden-Württemberg, Hans-Peter Kuhlmann Warburg Research, Roland Rapelius June 2013 June 2013 June 2013 June 2013 June 2013 Hold Neutral Underweight Buy Buy 45

46 Next events Financial calendar Report on the Third Quarter 2012/2013 (Analysts Conference Call), Frankfurt am Main 16 September 2013 German Equity Forum, Frankfurt am Main 11 November

47 More information Symbol: ISIN-Code: Stock market trading with listing in Prime Standard Indices: Reuters: DBAG.F Bloomberg: DBA DE000A1TNUT7 (effective 1 July 2013) S-Dax Dax sector All Financial Services LPX50/Direct/Europe Stoxx Private Equity 20 DBAG is member of LPEQ: Contact: Thomas Franke Head of Investor Relations Phone: IR@deutsche-beteiligung.de Deutsche Beteiligungs AG Börsenstrasse Frankfurt Germany 47

48 Disclaimer This 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. 48