Company Announcements

London, UK, 24 August 2023

Edison issues update on Deutsche Beteiligungs (DBAG)

Deutsche Beteiligungs (DBAG) posted a 20% NAV total return in the nine months to end-June 2023, thereby recouping the valuation loss in FY22. The uplift to last carrying value from its recently agreed sale of R+S (implying a healthy internal rate of return of over 40%) contributed €14m to its net income in Q323. As a result, management now expects FY23 results to be at the upper half of its guidance of net income at €85-115m and NAV of €610-715m. DBAG's asset management business delivered a profit of €11.3m in 9M23, on track to meet management's FY23 guidance of €13-15m. DBAG's shares currently trade at a c 15% discount to last reported NAV (with the latter not capturing the value of the asset management business).

While DBAG's new investment activity in the first nine months of FY23 (9M23) was centred on add-on investments, the company announced in July 2023 three new majority stake acquisitions: AOE Group (an agile software provider), Avrio Energy (a biogas platform) and TBD (a critical infrastructure service provider). These deals were at the lower end of DBAG's target range in terms of enterprise value (€50-250m). DBAG sees more opportunities in this market segment at present, given the better debt availability for funding smaller transactions. We note that the Avrio Energy and TBD investments, as well as the partial reinvestment of R+S proceeds into a minority stake in NOKERA (strategic buyer), indicate DBAG's growing interest in energy transition/sustainability themes.

  
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