Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Deutsche Beteiligungs AG (FRA:DBAN, Financial) achieved a successful exit with in-tech, realizing a money multiple of over 3 times in less than three years.
- The company completed six add-on acquisitions in Q3, demonstrating active portfolio management and growth strategy.
- A EUR100 million convertible bond was issued, providing capital to seize attractive investment opportunities in a favorable market environment.
- The company reported a 63% uplift in valuations on the book value for the sale of in-tech, indicating strong valuation practices.
- Deutsche Beteiligungs AG (FRA:DBAN) is confident in its position as a market leader and anticipates benefiting from industry consolidation.
Negative Points
- The year-to-date NAV growth of 4.2% is considered unsatisfactory by the management.
- The company narrowed its guidance to the lower end, reflecting cautious expectations for the remainder of the year.
- Operating performance in the first nine months was slightly negative, with a loss of EUR0.7 million.
- The introduction of a private market factor has temporarily hampered NAV growth, adding to volatility concerns.
- The company faces challenges in maintaining consistent performance amidst market volatility, impacting investor confidence.
Q & A Highlights
Q: Can you elaborate on the rationale behind issuing a convertible bond in such turbulent times?
A: Tom Alzin, Spokesman of the Management Board, explained that despite the challenging environment, the issuance of a EUR100 million convertible bond was strategic. It was aimed at capitalizing on a high opportunity funnel, allowing the company to pick and choose investments at attractive conditions. The bond issuance is expected to be accretive for shareholders in the midterm, despite not being placed at the best terms.
Q: How has the company's NAV per share performed year-to-date, and what are the expectations moving forward?
A: Tom Alzin noted that the NAV per share has grown by 4.2% year-to-date, which is unsatisfactory. The company is working to address this underperformance, although some portfolio companies face headwinds. The focus is on maintaining a clean book and improving performance.
Q: What impact has the share buyback program had on the company's financials?
A: The share buyback program, which involved a EUR20 million payout, has reduced the NAV forecast by the same amount. However, Tom Alzin emphasized that the buyback is a very accretive measure, especially given the current share prices, and is expected to benefit long-term shareholders.
Q: Can you provide insights into the company's transaction activity and valuation approach?
A: The company successfully exited in-tech with a 63% uplift in valuation, demonstrating confidence in their fair valuations. Tom Alzin highlighted that the company is serious about its marks and aims for significant uplifts upon selling assets, ensuring transparency and shareholder confidence.
Q: What are the expectations for the Fund Investment Services segment?
A: Roland Rapelius, Head of Investor Relations, stated that the segment is on track to achieve its guidance of EUR9 million to EUR13 million EBT for the full year. The top line is increasing, driven by the ECF IV fund and Luxembourg activities, with cost increases being lower than the top line growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
