Deutsche Beteiligungs AG: high level of investments in 2017/2018

• Seven management buyouts agreed upon
• Range of business models broadened: fibre optics and software, on top of investments in core sectors
• Net income of 33.6 million euros, reflecting negative capital markets impact
• DBAG ECF obtains additional funds from investors – swift investment progress and higher consultancy fees
• Dividend rises to 1.45 euros per share, offering above-average yield

Frankfurt am Main, 30 November 2018. Deutsche Beteiligungs AG (DBAG) generated net income of 33.6 million euros in the 2017/2018 financial year. The net figure reflects a burden of some ten million euros from capital market developments, which have been clearly negative recently – affecting the valuation of the Company's investments. Whilst the performance of the Private Equity Investments segment fell short of expectations, the Fund Investment Services segment outperformed projections. Following extensive investing activity, additional funds were committed by investors for one of DBAG's funds; the volume of assets under management increased accordingly. The listed private equity DBAG company – whose shares are included in the S-Dax – has published its annual report today, together with the consolidated financial statements as at 30 September 2018. The dividend proposal has been known since mid-November: according to the proposal, shareholders will receive 1.45 euros per share – up by five euro cents.

"Young portfolio offers potential for value appreciation"

DBAG's 2017/2018 was distinctly different from the previous year: whilst six companies were disposed of during the 2016/2017 financial year, yielding above-average returns compared to the long-term average, the focus more recently has been on investment: "We agreed upon seven management buyouts (MBOs), once again investing a significant amount of funds", said Torsten Grede, Spokesman of the Board of Management. DBAG invested approximately 85 million euros from its own funds into the portfolio, which now comprises 27 investments in (predominantly) German SMEs. Investments which are younger than two years account for more than half of the funds invested: "This translates into very promising potential for value appreciation for the years to come."

Ten-year average return on equity per share of 11.4 percent

DBAG’s net income of 33.6 million euros falls short of the previous year's figure of 82.0 million euros, and also of initial guidance. The fact that DBAG would not be able to offer as many mature companies as before had been incorporated in the planning – in fact, this explains the largest part of the year-on-year difference. Earnings were additionally affected by lower company valuations on the stock exchanges, which serve as reference values for the valuation of the Company's portfolio: in the end, they burdened results by some ten million euros. Moreover, change processes in individual portfolio companies did not make as much progress as anticipated, for various reasons. "Such developments are part and parcel of our business as equity investors. In such situations, the management of portfolio companies may carry out adjustments to planned measures, in terms of substance or timing, whilst in other cases, it may be necessary to provide additional capital, or to change the management of portfolio companies", said Mr Grede.

Net income of 33.6 million euros translates into return on equity per share of 7.8 percent – DBAG’s key management indicator – and thus once again clearly exceeds the cost of equity, which currently amounts to 6.0 percent. DBAG has generated average return on equity of 11.4 percent over a ten-year period.