Private equity investments

DRIVING
EXPANSION.
ENSURING
CONTINUITY.
DEUTSCHES
EIGENKAPITALFORUM
24/25 NOVEMBER 2015
AGENDA
Business model
Private equity investments
Investing: Current portfolio
Developing: Case study Coperion
Realising: Companies attract strategic buyers
Fund management
Performance
Appendix
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DBAG: IMPRESSIVE TRACK RECORD OVER FIVE DECADES
1965
DBAG founded
1985
DBAG‘s IPO
2002
DBAG Fund IV raised
First German PE company
PE became
accessible to
broad groups
of shareholders
DBAG opened up to institutional
investors and entered the fund
advisory business
Income predominantly
generated from direct
investments
Fund investment
services became a
second major
pillar of earnings
Invested capital came
from own shareholder
base
DM473
million
DM139
million
2008
Income from
fund services
more than
€10mn for the
first time
2013
DBAG Fund VI
raised
DBAG raised the
largest buyout
fund ever by a
German PE
company
DM283
million
€228
million
€434
million
€142
million
€700
million
DBAG Expansion
Capital Fund
DBAG Fund VI
DBG Fonds I
DBG Fonds II
DBG Fonds III
DBAG Fund IV
DBAG Fund V
1965
1975
1998
2002
2006
2013
2011
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BUSINESS MODEL TODAY: FUND INVESTMENT SERVICES
AND PRIVATE EQUITY INVESTMENTS
THE BUSINESS MODEL
FUND INVESTMENT
SERVICES
PRIVATE EQUITY
INVESTMENTS
Raising of DBAG funds
v
Investing
Advisory services to funds
Developing
v
DBAG FUNDS
Income
Investment
services
German and
international
v
institutional
investors
Realising the value created
Co-investmentagreement
Alignment of interest
Enlargement of capital base
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PRIVATE EQUITY INVESTMENTS: “INVESTING”
OUR INVESTMENT CRITERIA
Direct
contacts
M&A
Advisors
Investment
banks
> 250
First check
~ 200
LOI
< 100
Due Diligence
~ 20
7 new portfolio companies in
2014/2015
COMPANY
PERSPECTIVE
A mid-sized
company holding a
strong market
position
A company with
development
potential
MANAGEMENT
SECTORS
Proven management
that operates
entrepreneurially and
also has a stake in
the company
Focus on industrial
business models
On the whole, there must be convincing
arguments
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CURRENT PORTFOLIO: MAINLY HIDDEN CHAMPIONS
OF „GERMAN MITTELSTAND“
DBAG
Fund VI
DBAG
ECF
DBAG
Fund V
DBAG
7/7
6/6
7/11
1/10
Fund IV
Direct
investments
<2001
<2006
…
2010
2011
2012
D E U T S C H E S E I G E N K A P I TA L F O R U M · F R A N K F U R T, 2 4 / 2 5 N O V E M B E R 2 0 1 5
2013
2014
2015
6
CASE STUDY COPERION: DEVELOPMENT
OF A SUCCESSFUL INVESTMENT (1/2)
Start of investment in July 2007
− €10.4mn invested from DBAG's
balance sheet
− Interest of 18.8% acquired
− A further 78.0% held by DBAG Fund V
End of investment in November 2012
550
Investment performance: Invested
capital quadrupled
MILLION EURO IN REVENUES
2,000
EMPLOYEES
LEADI N G M AN UFACTURER
O F CO M PO UN DI N G SYSTEM S
AN D BULK M ATERI AL HAN DLI N G
PLAN TS
Value appreciation reflects
successful divestment to an
industrial buyer with strategic
interests
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CASE STUDY COPERION: DEVELOPMENT
OF A SUCCESSFUL INVESTMENT (2/2)
Business performance highly cyclical
− 2007/2008: Record order intake followed by record revenues and record earnings
− 2008/2009: Order intake of new machine business plummets by 90%
(economic crisis)
− 2009/2010: Trough in revenues and earnings
− 2010/2011: Order intake recovers, (crisis-related) low margins
− 2011/2012: Further recovery in all key indicators
Value appreciation based on significant changes
− Organisation: Uniform management structure, clear decision-making processes
− Production: More flexible cost structure, lower break-even point
(e.g., by standardising machine designs)
− Market & products: Expansion of service business,
acquisitions broaden product range
− Finances: Significant reduction in current assets
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REALISING THE VALUE CREATED: COMPANIES
PARTICULARLY ATTRACT STRATEGIC BUYERS
Company
Invested
Divested
Holding
Exit route
period
Capital
multiple
Schoeller & Hoesch KG
Libro AG
May-97
Feb-97
Nov-98
Oct-99
1.5
2.7
Trade Sale
Trade Sale
2.6
1.6
Sebaldus GmbH
Aug-97
Dec-99
2.3
Trade Sale
3.5
Euvita KG
Jul-97
Jul-00
3.0
Trade Sale
0.9
GAH AG
Jul-98
Jul-00
Trade Sale
3.7
Edscha AG
Andritz AG
Babcock Borsig Service GmbH
Otto Sauer Achsenfabrik GmbH
Zapf GmbH
HT Engineering GmbH
DS Technologie GmbH
AkSys GmbH
Lewa GmbH
MCE AG
Heim & Haus GmbH
Preh GmbH
Coperion GmbH
ICTS Europe B.V.
Coveright Surfaces GmbH
Homag Group AG
Oct-00
Dec-99
Nov-03
Feb-04
Nov-99
Jun-02
Jul-98
Nov-01
Oct-05
Apr-07
Sep-06
Oct-03
Jul-07
Mar-08
Jun-03
Feb-07
Nov-02
Jun-03
Apr-05
Mar-06
Apr-06
Jun-06
Oct-07
Oct-08
Aug-09
Oct-09
Mar-11
Jun-11
Nov-12
Dec-12
Jan-13
Oct-14
2.0
2.1
3.5
1.4
2.1
6.4
4.0
9.3
6.9
3.8
2.5
4.5
7.7
5.3
4.8
9.6
7.7
Secondary Buyout
IPO
Trade Sale
Secondary Buyout
Trade Sale
Trade Sale
Trade Sale
Trade Sale
Trade Sale
Trade Sale
Buy Back
Trade Sale
Trade Sale
Write off
Trade Sale
IPO/Trade Sale
1.8
2.0
5.8
4.1
0.1
6.1
1.3
0.1
7.3
4.1
1.9
3.1
4.1
0.0
1.2
2.9
Average
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4.4
2.7
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FUND INVESTMENT SERVICES: DBAG IS MORE THAN A
PORTFOLIO OF PRIVATE EQUITY INVESTMENTS
Established provider of fund
investment services to institutional PE
investors
− 23-member investment team
− More than 200 years of experience in
private equity
− First-rate network
DBAG‘s
investmentteam
DBAG: A brand that stands for 50 years
of investment performance in
Germany’s ‘Mittelstand’
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FUND INVESTMENT SERVICES: CONSISTENTLY EXPANDED
IN THE PAST 10 YEARS
MANAGED AND ADVISED ASSETS
(€MN)
€1,249mn
DEVELOPMENT OF MANAGEMENT
AND ADVISORY FEE INCOME (€MN)
25
20
615
15
€615mn
9.6
13.5
108
239
268
31. Oct. 2004
378
256
10
12.6
5
6.6
31. Oct. 2014
Outstanding investment commitments DBAG funds
Invested capital DBAG funds
Invested capital DBAG + debt/financial ressources DBAG
5.6
11.1
11.0
11.0
11.7
9.3
7.2
8.2
0
2004/05
2006/07
2008/09
Management fee income
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2010/11
2012/13
Advisory fee income
11
PAST PERFORMANCE AND CURRENT TRADING AT A
GLANCE
136.5
41.3
82.7
-16.6
-51.1
04/05
20.0
06/07
36.4
08/09
10/11
Guidance 2014/2015
Consolidated net
income
Guidance 2014/2015
16.8 11.5 15.8
7.3 12.7
06/07
20 - 25
MILLION EUROS
12/13
56.2
-6.2
-17.5
04/05
44.5 32.3 47.8
19.6 34.1
08/09
10/11
Return on net asset
value per share
7-9
PERCENT
12/13
500
2014/2015
250
Total return to
shareholders
0
Nov/ 04 Nov/ 06 Nov/ 08 Nov/ 10 Nov/ 12 Nov/ 14
DBAG
Dax
S-Dax
LPX Direct
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20.9
PERCENT
12
DIVIDEND IMPORTANT PART OF VALUE CREATION
FOR SHAREHOLDERS
Eight surplus dividends in ten years*
Average dividend yield of 9.3% over ten years, 6.2% adjusted for 2005/06 and
2006/07
Average pay-out ratio of 53% over ten years (47% adjusted for 2005/06 and
2006/07)
€3.50
€3.00
Surplus dividend
Dividend
Return on NAV per share at start of
FY (less dividends)
21.5%
€1.40
21.8%
€0.80
€1.20
€1.00
€0.66
5.7%
€0.40
5.4%
7.9%
4.3%
€2.00
€1.20
7.2%
6.6%
10.4%
1.9%
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
*2004/2005 bonus on the occasion of the Company’s anniversary
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APPENDIX
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CONSOLIDATED FINANCIAL STATEMENTS
(€mn)
Q1-3 2014/15 /
31 July 2015
Q1-3 2013/14 /
31 July 2014
Net result of fund services and investment activity
29,078
44,644
Fee income from fund management and advisory services
15,960
16,851
-11,422
-14,362
5,345
5,659
-11,314
-12,304
265
208
27,912
40,696
Income taxes
-49
–399
Minority interest (gains)/losses
468
-663
28,331
39,634
-732
–583
27,599
39,070
Personnel costs
Other operating income
Other operating expenses
Net interest
Net income before taxes
Consolidated net income
Other comprehensive income
Total comprehensive income
Round-off differences may occur
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STATEMENT OF FINANCIAL POSITION AT
31 JULY 2015: FINANCIAL RESOURCES OF ~ €57MN
Assets
(€mn)
Financial assets
31 July 2015
252.7
Other
23.0
Financial
resources
56.9
332.6
31 Oct. 2014
Equity and
liabilities (€mn)
166.2 Equity
28.5
Non-current
liabilities
148.8 Current liabilities
343.5
31 July 2015
31 Oct. 2014
303.3
303.1
15.5
19.7
13.8
20.6
332.6
343.5
Financial resources declined notably
− Outflows due to investment and dividends
− Further outflows in Q4 after new investment
− Repayments in Q3 after completion of a further refinancing
Asset structure substantially improved in favour of increased financial assets
Capital structure unchanged
− No liabilities to banks
Round-off differences may occur
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SEGMENTAL PERFORMANCE: CONTRIBUTIONS FROM
BOTH BUSINESS LINES
Private equity investments
Fund investment services
31.7.2015
31.7.2014
(9 months)
(9 months)
255.5
226.0
Managed assets
Financial resources
61.9
78.2
Pre-tax income**
Liabilities to banks
0.0
0.0
Net asset value
317.4
304.2
Co-investment
commitments
112.9
202.3
25.3
35.6
(€mn)
Portfolio value
Pre-tax income*
(€mn)
Assessment based on NAV, as for
investment trusts
31.7.2015
31.7.2014
(9 months)
(9 months)
1,120
1,238
2.6
5.1
Assessment based on PE ratio,
as for asset managers
*More than 50 percent of previous year’s value attributable to gain on Homag transaction.
**including internal synthetic fees by business line Investments of €1.9mn (31 July 2014), respectively €1.0mn (31 July 2015)
Presentation based on business performance, as discussed in the interim management report; values deviate from those in the IFRS-based notes.
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SHAREHOLDER PROFILE AS OF 15 SEPTEMBER 2015
1.2%
15 September 2015
5.0%
19.9%
42.9%
1.2%
10.1%
14.8%
Text
Private individual shareholders Germany
Private individual shareholders international
Rossmann Beteiligungs GmbH
Anpora Patrimonio
Institutional investors Germany
Institutional investors Europe
Institutional investors USA
Other
4.9%
Free-float ownership recently increased to 75.0%
− Determined as defined by Deutsche Börse and on the basis of voting rights notifications
Voting rights notifications in 2015
− 2 April 2015 – Rossmann Beteiligungs GmbH, Burgwedel < 20%
− 20 May 2015 – JPMorgan Asset Management Ltd., London > 5%
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LONG-TERM PERFORMANCE: DBAG SHARES IN
COMPARISON TO BENCHMARK INDICES
SHARE PERFORMANCE
1 NOVEMBER 2005 TO 31 OCTOBER 2015, INDEXED: 1 NOV. 2005=100
500
400
DBAG
300
Dax
S-Dax
200
LPX Direct
100
0
1. Nov.
2005
1. Nov.
2006
1. Nov.
2007
1. Nov.
2008
1. Nov.
2009
1. Nov.
2010
1. Nov.
2011
1. Nov.
2012
D E U T S C H E S E I G E N K A P I TA L F O R U M · F R A N K F U R T, 2 4 / 2 5 N O V E M B E R 2 0 1 5
1. Nov.
2013
1. Nov.
2014
19
OTHER INFORMATION
Symbol
Reuters: DBAG.n
Bloomberg: DBAN
ISIN code:
DE000A1TNUT7
Listed in the Prime Standard segment
Indices:
S-Dax
DAXsector All Financial Services
LPX50, LPX Europe, LPX Direct
Stoxx Private Equity 20
DBAG is a member of LPEQ:
www.LPEQ.com
Contact:
Thomas Franke
Head of Investor Relations
Telephone: +49 69 95787-307
Email: IR@dbag.de
Deutsche Beteiligungs AG
Börsenstrasse 1
60313 Frankfurt
www.dbag.de
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FORWARD-LOOKING STATEMENTS INVOLVE RISKS
This presentation contains forward-looking statements. Forward-looking statements are
statements that do not describe facts or past events; they also include statements about
our assumptions and expectations.
Any statement in this report that states our intentions, assumptions, expectations or
predictions and the underlying assumptions is a forward-looking statement. These
statements are based on plans, estimates and projections currently available to the Board
of Management of Deutsche Beteiligungs AG. Therefore, forward-looking statements only
relate to the date on which they are made. We do not assume any obligation to update
such statements in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. A number of
important factors may cause actual events to differ significantly from those in forwardlooking statements. Such factors include the conditions in the financial markets in
Germany, in Europe, in the United States and elsewhere – the key regions for our
investment activities.
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