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Deutsche Beteiligungs AG – Positive Quarterly Results

Deutsche Beteiligungs AG – Positive Quarterly Results. Frankfurt am Main, September 2004. Contents . 3rd Quarter 2003/2004 Changes to portfolio Profit and loss account 1st – 3rd quarter 2003/2004 Financial results Sources of income and expenses Debts and investments Share

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Deutsche Beteiligungs AG – Positive Quarterly Results

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  1. Deutsche Beteiligungs AG – Positive Quarterly Results Frankfurt am Main, September 2004

  2. Contents • 3rd Quarter 2003/2004 • Changes to portfolio • Profit and loss account • 1st – 3rd quarter 2003/2004 • Financial results • Sources of income and expenses • Debts and investments • Share • Developments of markets • Outlook • Appendix 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  3. 3rd quarter of Financial Year 2003/2004

  4. 3rd Quarter 2003/2004 – Changes to the portfolio • Home Care Supply realized • Due to deteriorated exchange rate of the dollar, no appreciable capital gain • Silent participation in HKL Baumaschinen GmbH repaid at nominal value, as scheduled • (Residual) interest in Schubert-&-Salzer GmbH (MBO entered in the 90s) sold • Book value < € 0.3 mn => Share of MBOs (direct and indirect) in the portfolio increased againOctober 31, 2003 60.9%April 30, 2004 67.7%July 31, 2004 69.2% 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  5. 3rd Quarter 2003/2004 – Profit and loss account • Positive result: € 0.6 mn, 3rd quarter previous: € 0.01 mn • No appreciable net realized gains • Stable current and one-time income from investments • Growing cost recovery through fee income from fund management business • Losses from investment disposals (€ 0.6 mn) due to exchange rate effects • Downward value adjustments € 0.5 mn • Essentially one smaller US investment 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  6. 1st – 3rd quarter of Financial Year 2003/2004

  7. Nine-months-results 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  8. Major sources of Income • Income from investments and gains from investment disposals 1st – 3rd quarter 2003/2004 € 17.4 mn1st – 3rd quarter 2002/2003 € 21.3 mn • Profit distribution Harvest Partners IV • Profit distribution subsequent to sales in preceding years • No other appreciable net realized gains • Other operating income 1st – 3rd quarter 2003/2004 € 9.3 mn1st – 3rd quarter 2002/2003 € 13.1 mn • Higher management-fee income through new co-investment fund DBAG Fund IV • Structuring fees • Previous year: valuation uplifts 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  9. Major expenses • Other operating expenses1st – 3rd quarter 2003/2004 € 8.6 mn1st – 3rd quarter 2002/2003 € 7.8 mn • Higher one-time charges (capital increase€ 2.6 mn) • Personnel costs 1st – 3rd quarter 2003/2004 € 7.9 mn1st – 3rd quarter 2002/2003 € 5.6 mn • Changes to Board of Management • Performance-related remuneration • Allocations to provisions 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  10. Balance sheet structure improved • Equity ratio rose to 69.6% (31 October 2003: 54.4%) 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  11. Debt significantly reduced Net-liabilities to banks 140 120 100 80 € mn 60 40 20 0 Apr 02 Jul 02 Oct 02 Jan 03 Apr 03 Jul 03 Oct 03 Jan 04 Apr 04 Jul 04 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  12. Increase of Investments 60,0 50,0 40,0 € mn 30,0 20,0 10,0 0,0 2001/2002 2002/2003 I - III-2003/2004 Data on 2002/03 and 2003/04 adjusted for effects from interim financings 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  13. DBAG (adjusted) S-Dax (indexed) Shares trade 24% below fair value Euro Fair Value Dax (indexed) FTSE InvestmentCompanies (indexed) • Fair value determined semi-annually (most recently at April 30, 2004) 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  14. Satisfactory market development • Stable dealflow • Corporate spin-offs predominate • Secondary buyouts increasing • High liquidity • Market entry by new banks overcompensated other institutes retreating • Growth trend still intact • Market drivers remain effective 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  15. Outlook

  16. Previous year's result exceeded • Principal target level: Return on equity of 15% before taxes on long-term average • Will not be achieved in 2003/2004 • Fair Value • Uplift in first six months: +7,9% • New investments developing very satisfactorily; recognition in fair value for FY 2004/2005 • Expectations for 2003/2004: Previous year's net income (€ 3.1 mn) will be exceeded • Net income up to 3rd quarter: € 4.1 mn • Potential for dividend payment 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  17. Deutsche Beteiligungs AG – Stocks with scope • Portfolio with appreciation potential • Successful investment strategy • Balance sheet structure strengthened for new investments • Shares traded below fair value Deutsche Beteiligungs AG – a good opportunity to invest 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  18. Appendix

  19. Total equity (less dividend) 250 214 200 173 172 158 155 150 108 92 100 € mn 50 0 Total equity Total equity (less dividend) 31.10. 31.10. 31.10. 31.10. 31.10. 31.10. 31.07. 1998 1999 2000 2001 2002 2003 2004 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  20. Long-term assets Book value of investments (purchase costs or lower) 350 292 270 270 300 257 252 231 250 211 200 € mn 150 100 50 0 31.10. 31.10. 31.10. 31.10. 31.10. 31.10. 31.7. 1998 1999 2000 2001 2002 2003 2004 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  21. Net income/loss 50 38 40 32 30 21 20 3.0 mn € 9 10 4.1 0 97/98 98/99 99/00 00/01 01/02 02/03 03/04 -10 (1st-3rd quarter) -20 -16 Net profit consolidated since 2000/01 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  22. Valuation principles according to International Accounting Standards (IAS) • Valuation principles based on IAS rules • Valuation based on • stock market prices • purchase offers • comparable transactions • Multiples method based on various financial data (EBIT, sales, net asset value and peer-group or industry comparisons) • “sum of the parts” valuation 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  23. Fair value of portfolio discloses valuation reserves • Valuation guidelines based on IAS rules • Disclosure of fair value since end of FY 2001/2002 Unrealized appreciation Current market value €311.7 mn € 27.6 mn € 284.1 mn Net asset value, based on German Commercial Code (acquisition cost or lower) Fair value Status: 30 April 2004 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  24. Structure of fund co-investment Benefits Equity investment structure Target company • Fee income for cost coverage • Access to larger transactions through additional financings (“co-investment funds”) ~10 % ~ 30 % ~ 60 % Deutsche Beteiligungs AG 1 : 2 DBAG Fund IV Management of target company 1 % investment by carry team of Deutsche Beteiligungs AG 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  25. 10 largest investments represent ~ 62% of book value Status: 31 July 2004 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  26. Development of fair value €12.91 €12.42* €11.97* €10.90* €1.48 €1.79 1.12 € 0.27 € €11.43 10.85 € 10.63 €10.63 € Oct 02 Apr 03 Oct 03 Apr 04 Equity Valuation reserve * Adjusted for effects of capital increase • Fair value = book value of equity per share (HGB) + valuation reserves per share • Portfolio valued according to IFRS rules • Valuation at 30 April 2004 based on expected business situation 2004 3rd quarter 2003/2004 1st – 3rd quarter 2003/2004 Outlook Appendix

  27. Contact and Information Stock abbreviation: Reuters: DBAG.F Bloomberg: DBA ISIN-Code: DE0005508105 Stock market trading with official listing in PRIME STANDARD Indices: S-Dax C-Dax-Industrial For more information: www.deutsche-beteiligung.com Deutsche Beteiligungs AG Investor RelationsKleine Wiesenau 1 Thomas Franke60323 Frankfurt am Main Phone.: +49 69 95787-307Phone.: +49 69 95787-01 Fax: +49 69 95787-391 Email: IR@deutsche-beteiligung.de

  28. Forward-looking statements 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, the geographic focus of our investment activity.

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