Welcome to the Annual Meeting 2008

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1 Welcome to the Annual Meeting 2008

2 2008 Annual Meeting 2 Financial year 2006/2007: Record profit and record return Quarterly closing at 31 January 2008 Outlook: New investment in ICTS Europe Positive result expected for full 2007/2008 financial year

3 2006/2007: Third consecutive record year 3 Consolidated profit mn (previous year: 82.7 mn) Return on equity 56.2% (previous year: 36.4%) Average return on equity per share over ten-year period 21.4% (after taxes) New investment 40.3 mn Stake increased in Homag Group AG New MBOs: MCE AG and Coperion Group

4 4 Portfolio companies made good progress Robust economic environment supported value growth Upbeat sentiment on stock markets until summer 2007 smoothed the way to IPOs Portfolio companies well poised profiting from strong growth in aspiring Asian countries reaping benefits from commodity surge

5 5 Highly selective approach is basis for success: More than 40 years of investing experience Particularly competitive sectors of German industry are DBAG s core sectors Industrial services and logistics; 7% Trade; 4% Consumer goods; 8% Speciality chemicals; 2% Automotive supplies; 9% Portfolio by industrial sectors Others; 5% Homag Group AG; 29% Mechanical engineering; 36% Status: 31 January 2008, IFRS value

6 Portfolio has grown more valuable 6 Portfolio value ( mn) 2006/ / Portfolio value = financial assets, without shell companies and investments of co-investment funds, the majority of which is is held by other shareholders

7 7 Value growth is mirrored in the income statement Net result of valuation and disposal reached mn (previous year: 93.9 mn) thereof, (unrealised) value gains: 92.2 mn realised profits: 61.2 mn Net result of valuation and disposal ( mn) 2006/ / nicht unrealised realisierte value Wertveränderungen gains Realisierte realised profits Erträge Sonstiges others 2.0

8 Changes in stock market conditions affect valuations Change in stock market pricings taken directly to income statement Quoted investments valued at price quotation on balance sheet date Earnings multiples that derive from stock market pricings applied in determining value of unquoted investments For example: Homag Group AG Negative contribution to result in 1st quarter 2007/2008: 23.6 mn Potential positive contribution to result in 2nd quarter 2007/2008 (quote yesterday = quote at 30 April): almost 9.0 mn 8

9 Key sources of income 9 Net result of valuation and disposal of financial assets (unrealised) value changes realised income/expense Current income from financial assets Profit shares from investments Interest from shareholder loans Other operating income Management fee income from co-investment funds Reversals of write-downs on current assets and provisions Net result of investment activity

10 Current income down 10 Profit shares from portfolio companies of decreasing significance) Interest from shareholder loans Special effect in 2005/06: profit share from coinvestment fund largely attributable to minority interest 2006/07 9.9mn 2005/ mn

11 11 Other operating income up, after start of DBAG Fund V Key item: management fee income and consultancy fees Fees paid by co-investment funds cover large part of current costs Broader base through DBAG Fund V in FY 2006/2007 (start of investment phase in February 2007 ) 2006/ Management fee income Structuring and consultancy fees 2005/ mn Others

12 Other operating expense down 12 Lower costs for investment management activity 2006/ mn 2005/ mn

13 Personnel costs down 13 Lower performance-linked income components, despite profit increase (Basis: realised profits, not value changes ) 2006/07 6.8mn 17.9mn Total personnel costs 2005/ mn thereof, performancelinked 8.9mn

14 Net interest up, due to higher liquidity 14 Interest income: 5.9 mn Interest expense (largely Revenue Office): 1.1 mn 2006/07 4.8mn 2005/06 1.8mn

15 15 Net asset value (equity) per share: Indicator derives from balance sheet Assets ( mn) 31. Oct Oct 2006 Shareholders equity and liabilities ( mn) 31. Oct Oct 2006 Financial assets Equity Others Non-current liabilities Cash funds Current liabilities

16 Development of NAV (equity) per share 16 Rise in NAV by 6.02 Dividend distribution for 2005/2006 (dividend of surplus dividend of 2.50) 3.00 Total value growth 9.02 per share = Return on equity per share 56.2% 24,00 20,00 16,00 12, % Oct Oct Dividends NAV per share

17 Following strong cash flows, liquidity level remains high Change in cash funds, i.e. through Investment in financial year 2006/ mn Dividend payment in March mn Share buybacks in June and Aug. - Oct mn Sale proceeds/loan repayments mn / mn 2005/ mn

18 Shareholders profit from strong cash flows from realisations: 200 mn since March 2005 Dividends of nearly 63 mn paid to shareholders since March 2005 Another 47.9 mn on Monday, 17 March 2008 (recommended) Nearly 88 mn returned to shareholders through share buybacks since July Date mn Date mn Dividend March Share buyback July Dividend March Share buyback July Dividend + surplus dividend Dividend + surplus dividend (recommended) March 2007 March Share buyback Share buyback June 2007 Aug. - Dec

19 Total dividend payment 47.9 million dividend of 3.50 per share Dividend geared to money market rate and net asset value per share => Consistent, calculable dividend payment Dividend recommendation: double dividend to 1.00 (previous year: 0.50 per share) 19 Surplus dividend of 2.50 per share (previous year: 2.50 per share), as a result of realised profits Total dividend payment 47.9 mn, corresponds to 82.8% of realised profits

20 Share buybacks in Scope from authorisation at 2007 Annual Meeting completely exhausted 1st buyback in June 2007: 750,000 shares from Gerling-LV Purchase price per share (10% below average 10-day quotation at the time) 2nd buyback from August to December 2007: 727,505 shares in on-market buyback Average purchase price per share Total purchase price 35.3 mn Shares cancelled without reducing share capital Number of issued shares since 2 January 2008: 13,676,359 shares

21 Share price trend mirrors DBAG s success, but also market sentiment Share performance 2006/2007: 57.2% Below-average trend since autumn Wertentwicklung Performance from vom 1 1. November 2006 to bis March März DBAG Dax S-Dax Nov Feb Mai Aug Nov Feb. 08 Performance: with distributions (dividends, subscription rights) re-invested

22 Private equity stock an indicator for capital market sentiment Private equity stock responds particularly to change in sentiment 110 Performance Wertentwicklung of PE stocks PE-Aktien since November seit Nov DBAG Dax LPX

23 Value growth of DBAG shares since Nov. 2002: 22.7% p.a. DBAG shares outperform relevant indices: DBAG 22.7% p.a., Dax 14.5%, S-Dax 18.2%, LPX50 7.1% Nov. 02 Wertentwicklung der Aktie seit 1. November 2002 Share performance since 1 November Nov Nov Nov Nov Nov. 07 DBAG Dax S-Dax LPX 50 Performance: with distributions (dividends, subscription rights) re-invested

24 24 Value growth of DBAG shares since Nov. 1997: 10.6% p.a. DBAG shares outperform relevant indices: DBAG 10.6% p.a., Dax 5.3% Wertentwicklung der Aktie seit 1. November 2002 Share performance since 1 November 1997 Nov. 97 Nov. 99 Nov. 01 Nov. 03 Nov. 05 Nov. 07 DBAG DAX Performance: with distributions (dividends, subscription rights) re-invested

25 German Financial Reporting Enforcement Panel examined 2004/2005 and 2005/2006 closings 25 Random checks and examinations with cause Two key aspects Consolidation rules Disclosures on related party transactions (in particular, carried interest scheme) DBAG s auditors (KPMG) and other prominent auditing firms confirmed DBAG s accounting policy Presentation of correct result beyond doubt All consolidated financial statements remain valid Alleged misstatement acknowledged to end the issue

26 26 Alleged misstatement for consolidated financial statements at 31 Oct and management s report 2004/2005 Missing consolidation of two companies of DBAG Fund IV as well as three jointly held investments ( Hochtemperatur Engineering, Clyde Bergemann and Otto Sauer Achsenfabrik ) in the consolidated financial statements (IAS 27.3) Issue not relevant for 2005/2006 (and the following) accounts, after restructurings under company law in FY 2005/2006

27 27 Alleged misstatement for consolidated financial statements at 31 Oct and management s report 2005/2006 Disclosures on related party transactions as in IAS 24 not transparent and systematic, besides being incomplete as to details on carried-interest investments by key management personnel the sale of shares in two shell companies collection of fees by DBAG for service on supervisory bodies of portfolio companies by members of DBAG management team management fees collected by DBAG from related parties Full presentation as defined by the FREP in the 2006/2007 financial statements (inter alia, Annual Report p. 118 to 126)

28 First-quarter result: Downtrend on stock markets leads to consolidated loss Consolidated loss in 1st quarter 2007/2008: 21.7 mn Negative contribution to result of 23.6 mn stems from price decline of Homag shares Net result delivered by remaining portfolio companies is positive Forecast for full financial year 2007/2008: Consolidated profit, despite first-quarter loss Assumption: no general downswing in the economy, no further deterioration of stock market conditions Long-term prognosis: Return target remains achievable (return on equity per share higher on long-term average than cost of equity) 28

29 More information in the Annual Report and on our website 29

Potential inherent in new investments: ICTS Europe Holdings B.V. purchased DBAG and DBAG Fund V will acquire leading provider of aviation security services Investment approx. 6.

30 Potential inherent in new investments: ICTS Europe Holdings B.V. purchased DBAG and DBAG Fund V will acquire leading provider of aviation security services Investment approx. 6.0 mn, DBAG share ~ 18% 30 Airport staff, passengers and baggage screens Security screens on behalf of airlines Freight screens Software solutions to improve security procedures

31 New investment ICTS Europe Holdings B.V. Company in a DBAG core sector Good position in a growing market Growth opportunities in eastern Europe and the US Sales of 320 mn (2007) Sales growth of 10% p.a. (2006 and 2007) locations in 24 countries More than 200 airlines in customer base Staff of 10,100

32 Financial year 2007/2008: Stable business trend expected for mid-market buyouts Credit crunch has changed the situation Banks returned to normal precautions Possible effects on enterprise values More competition Number Anzahl Deutsche German buyouts Buy-outs -- Transaction Transaktionswert value Mio. mn Source: Center for Management Buy-out-Research (1994 to 2005); FINANCE/DBAG (2006 and 2007)

33 Mid-term outlook: Optimism 33 Transition to genuine buyout house: More than 75% of portfolio value attributable to MBOs Higher return potential than from growth financings and fund investments Private equity market on growth trend in Germany over the long-range Growing number of transactions Investment team Long-standing investing experience in German Mittelstand Past accomplishment: NAV return after taxes of 21.4% on average from FY 1997/1998 to 2006/2007

34 34 Sponsorship for the Schirn Kunsthalle Women Impressionists audio guide

35 2008 Annual Meeting

36 Agenda Item 2 36 Appropriation of distributable profit

37 37 Agenda Item 3 Ratification of the actions of the members of the Board of Management for financial year 2006/2007

38 38 Agenda Item 4 Ratification of the actions of the members of the Supervisory Board for financial year 2006/2007

39 Agenda Item 5 39 Appointment of auditors for financial year 2007/2008

40 40 Agenda Item 6 Election to the Supervisory Board The Supervisory Board recommends nominating Dr. Hariolf Kottmann for election Member of the Board of Management of SGL Carbon AG (since 2001) Born 1955, studied Chemistry and Biochemistry Various assignments at Celanese AG and Hoechst AG Several offices on supervisory bodies of SGL Carbon subsidiaries (see Agenda, page 4)

41 41 Agenda Item 7 New Authorisation for the acquisition and disposal of own shares and the preclusion of pre-emptive tender rights for acquisitions and subscription rights for disposals

42 2008 Annual Meeting

43 Auf Wiedersehen in March 2009 For the latest news see

Deutsche Beteiligungs

Deutsche Beteiligungs Steady NAV growth in unquoted portfolio Half-year results Investment companies For the six months to 30 April 2014, Deutsche Beteiligungs (DBAG) reported a 6.7% ( 1.29) NAV total