011_DBAG GB 2000 Innen E - Deutsche Beteiligungs AG

Creat ng Entrepreneurs 

C eat ng Ent ep eneu 

Creating 

Creating 

Entrepreneurs 

Creating Ent Entr 

Deutsche Beteiligungs AG 

Unternehmensbeteiligungsgesellschaft 

Emil-von-Behring-Straße 2 

D-60439 Frankfurt am Main 

Telephone: 00 49 (0) 69/9 57 87-01 

Telefax: 00 49 (0) 69/9 57 87-199 

E-mail: welcome@deutsche-beteiligung.de 

Internet: www.deutsche-beteiligung.de 

Registered office: 

Königstein/Taunus 

Incorporated in the Commercial Register 

at the District Court in Königstein/Taunus 

HRB No. B 2527 

Creating Entrepreneurs 

Deutsche Beteiligungs AG Annual Report 1999/2000 



Annual Report 

1999/2000

Highlights 

Highlights 

Highlights 

Highlights 

Highlights 

Highlights 

New investments and portfolio volume in millions of “ 

324 

251 

275 

77 

23 

1995/96 

Earnings per share and dividends in “ 

0.61 

0.43 

1995/96 

Changes in the performance of shares of Deutsche Beteiligungs AG and SDAX index in percent from January 1996 

600 

500 

400 

300 

200 

100 

0 

138 

72 

1996/97 

0.88* 0.72 

1996/97 

1996 1997 1998 1999 2000 

Performance index Deutsche Beteiligungs AG 

Source: Bloomberg L. P. 

138 

1997/98 

1.71 

1.28 

1997/98 

Earnings per share Dividends 

57 

New investments Portfolio volume 

1998/99 

3.13 

1.79 

1998/99 

*weighted average number of shares outstanding 

101 

1999/2000 

2.56* 

1.80 


SDAX index 

Earnings before taxes and net income in millions of “ 

42.5 43.0 

38.4 37.5 

32.1 

9.0 

5.5 

1995/96 

13.9 

9.3 

1996/97 

20.5 

1997/98 

Net income Earnings before taxes 

1998/99 


Equity less dividends in millions of “ 

58.9 

1995/96 

86.4 

1996/97 

91.5 

1997/98 

107.6 

1998/99 

172.5 


Concept and Design 

Golin/Harris B&L, Frankfurt am Main, Germany 

Photography 

Stefan Döberl, Darmstadt, Germany 

Photos special section, pages 13 to 19 

schlott sebaldus AG, Germany 

Typography/Lithography 

Studio Oberländer, Frankfurt am Main, Germany 

Printing 

Neiter & Kuhn GmbH, Hammersbach, Germany 

Translation 

Barbara Ziegner, Frankfurt am Main, Germany

3 

6 

9 

13 

20 

28 

31 

37 

47 

50 

56 

60 

71 

84 

86 

87 

89 

Contents 

Contents 

Letter to Shareholders 

The team at Deutsche Beteiligungs AG 

The private equity market: great potential 

Special report: A management buyout that triggered dynamic change 

Development of business fields 

Principal holdings of Deutsche Beteiligungs AG/DBG Auslands-Holding 

GmbH at October 31, 2000 

Majority investments 

Expansion financing 

Investments in funds 

Portfolio profile of Deutsche Beteiligungs AG/DBG Auslands-Holding 

GmbH at October 31, 2000 

Shares of Deutsche Beteiligungs AG 

Management's report 

Financial Statements 

Auditors' report 

Proposed profit distribution 

Report of the Supervisory Board 

Members of the Supervisory Board and Board of Management 

Contents 1 

Contents 

Conte 

Conten Inha 

Contents


2 



LetteLe 

Letter to Share 

Letter to Sha Le 

Brief an d 

Letter to Sh 

Letter Letter to Sh 


“Creating Entrepreneurs” 

Wilken Freiherr von Hodenberg, Torsten Grede, 

Reinhard Löffler, Helmut Irle (left to right)

Letter 

ie Aktinäre 

Letter to Shareholders 3 

to Shareholders 


Letter Letter to Shareholders to Shareholders 

tter areholders Letter to to Shareholders 

reholders Letter to Shareholders 

tter to Shareholders Aktionäre 

holders to Shareholders 

Dear Shareholders, 



Deutsche Beteiligungs AG is again pleased to report excellent results for 

the financial year 1999/2000. 

Pre-tax profit again surpassed that of last year 

Reaching a record “ 43.0 million, Deutsche Beteiligungs AG closed the 

1999/2000 financial year by achieving a pre-tax profit that even exceeded 

the previous year's excellent earnings, which totaled “ 42.5 million, 

continuing the pattern of progress exhibited in recent years. Due to a 

higher tax base however, the net income for the reporting year declined 

by “ 5.4 million to “ 32.1 million. 

Share price at new level/Share price up 57 % 

Parallel to the Company's very satisfactory progress, our shares also 

registered good performance. On October 29, 1999, shares of Deutsche 

Beteiligungs AG closed at “ 26.70; on October 31, 2000 they were 

quoted at “ 42.05. That represents a 57 percent rise in price. The SDAX 

performance index, in which our shares are included, only gained 15 percent 

from November 1, 1999 to October 31, 2000. 

The pricing of our shares was boosted by a study issued by Deutsche 

Bank AG and the new German tax legislation to become effective 

January 1, 2002. 

Capital increase successfully completed/Distribution to 

shareholders stays at high level 

In July 2000, the capital of Deutsche Beteiligungs AG was raised by “ 5.2 

million, from “ 31.2 million to “ 36.4 million, at a subscription ratio of 

6:1, using capital authorized for issuance. 

The 2,000,000 new shares will be entitled to the full dividends for the 

1999/2000 financial year. The new shares were offered to owners of old 

stock at a subscription price of “ 29. The offer created brisk demand. 

During the subscription period from July 13 to July 26, 2000, the price of 

our shares climbed from “ 36.50 to “ 40.00. The overwhelming majority 

of our shareholders exercised their subscription rights. In total, the issue 

generated proceeds of “ 58 million, which will serve to finance further 

growth.

4 


As a result of the capital increase and a higher tax base this reporting 

year, earnings per share amount to “ 2.56 (previous year “ 3.13). 

Shareholders of Deutsche Beteiligungs AG will continue to profit from 

the Company's progress through the performance of our stock and high 

dividend earnings. A major part of the annual profit will again be distributed 

to shareholders. At this year's Annual Meeting, we will recommend 

paying dividends of “ 1.80 (previous year “ 1.79) per share. Including a 

corporate tax credit for eligible shareholders, the total distribution will 

amount to “ 2.57 per share. Based on the closing price at the beginning 

of the financial year (“ 26.95), that brings the dividend yield for shares 

of Deutsche Beteiligungs AG to 6.68 percent (including the corporate tax 

credit 9.54 percent). 

Profitable realizations in Germany and internationally 

In Germany, we profitably exited six investments this past business year, 

including our stake in Sebaldus Druck und Verlag GmbH. We also sold 

GAH Anlagentechnik AG, successfully completing the first public-toprivate 

transaction by a financial investor in Germany. 

Another profitable realization was transacted internationally. DBG Osteuropa-Holding 

GmbH, a private equity fund we manage, sold its interest 

in Czech On Line a.s., the leading internet provider in the Czech 

Republic. This deal represents the largest internet transaction and one of 

the most successful private equity investments to date in eastern Europe. 

New investments 

Deutsche Beteiligungs AG invested “ 101 million this past 1999/2000 

financial year. Including the investments placed by the parallel fund, the 

total sum invested amounts to “ 153 million. 

The proceeds from the sale of our shares in the media systems group 

Sebaldus to Schlott AG, a quoted company, were remitted partly in cash 

and partly in the form of shares in the new schlott sebaldus AG. We currently 

hold about 25 percent of the stock jointly with our co-investment 

fund, making Deutsche Beteiligungs AG the largest shareholder of 

schlott sebaldus AG. We acquired interests in Rheinhold & Mahla AG 

and ad pepper media N.V. to provide expansion capital. We also purchased 

a stake in Edscha AG. 

Deutsche Beteiligungs AG was a partner in a corsortium that purchased 

Andritz AG, Austria, in a management buyout in December 1999. The 

Lette 

Letter

Letter Letter to Shareholders Shareholders 


Brief an die Letter to Shareholders 

r to Shareholders Letter to 



Letter to Shareholders 5 




Brief an die Aktinäre 





consortium was led by our Austrian private equity partner, Unternehmens 

Invest AG (UIAG), whose principal shareholder is Deutsche Beteiligungs AG. 

In a cooperative project with Harvest Partners, our private equity partner in 

the USA, we purchased the Global Energy Equipment Group (Global Energy), 

sited in Oklahoma, USA. In France, we committed “ 34.5 million to the first 

fund raised by Quartus Gestion S.A., making Deutsche Beteiligungs AG 

the largest investor. This company operated under the name of Quadran 

Gestion S.A. until April 1, 2000. In conformity with our fund investment 

strategy, we have a substantial co-investment right with this fund. 

Changes in the Board of Management 

Having reached retirement age, Karl-Heinz Fanselow left his position on 

the Board in March 2000. Effective July 15, 2000, the Supervisory Board 

appointed Wilken Freiherr von Hodenberg to the Board of Management 

and elected him as the Board's Spokesman. Axel Dorn left the Board by 

mutual agreement on December 31, 2000. The Supervisory Board 

appointed Torsten Grede and Helmut Irle to the Board of Management 

as of January 1, 2001. Both have served for many years on the Company's 

management team. Dr. Günther R. Niethammer will leave Deutsche 

Beteiligungs AG by mutual agreement at the end of February 2001. 

As of March 1, 2001, the Board of Management of Deutsche Beteiligungs 

AG will consist of Wilken Freiherr von Hodenberg (Spokesman), Torsten 

Grede, Helmut Irle and Reinhard Löffler. 

Outlook 

The European and – in particular – the German private equity markets 

are presently experiencing double-digit growth rates. The new German 

tax amendment will exempt capital gains from the sale of domestic 

investments from taxation starting in 2002. This will create additional 

earnings potential for the Company. 

In light of current business opportunities, we feel confident that we will be 

able to continue the good progress at Deutsche Beteiligungs AG in the 

future. 

January 2001 

(Wilken Freiherr von Hodenberg) 

Spokesman of the Board of Management

6 




The team The team 

“Creating Entrepreneurs” 

The team at Deutsche Beteiligungs AG

The team 


The team at Deutsche Beteiligungs AG 7 

at Deutsche Deutsche Beteiligungs AGBeteiligungs 

AG 



The team at Deutsche Beteiligungs AG has many years of experience in 

private equity, investment banking and industry. In addition to the Board 

of Management, the team includes qualified investment managers. The 

members of the Board of Management (at March 1, 2001) are: 

Wilken Freiherr von Hodenberg 

Born in 1954, Wilken Freiherr von Hodenberg studied law in Hamburg 

and Lausanne. He started his career at the JP Morgan Bank in New York 

and Frankfurt. Later, he worked for the Tengelmann group, Mühlheim/ 

Ruhr, where his last position was vice managing director. In 1993, he 

joined Baring Brothers GmbH, Frankfurt, as the managing director, serving 

for a period of five years. He then became the managing director of 

the Frankfurt branch office of Merrill Lynch Capital Markets Bank Ltd. 

Wilken Freiherr von Hodenberg has been a member of the Board of 

Management and Spokesman of Deutsche Beteiligungs AG since mid- 

July 2000. 

Torsten Grede 

Born in 1964, Torsten Grede studied business administration in Cologne 

and St. Gallen following a bank traineeship. After receiving his degree, 

he started his career at Deutsche Beteiligungs AG in 1990. He became a 

director in 1995. Torsten Grede has been a member of the Board of 

Management since the beginning of 2001. 

Helmut Irle 

Born in 1955, Helmut Irle studied business administration in Frankfurt 

am Main, following a bank traineeship. He first worked for Deutsche 

Bank AG. In 1987 he joined Deutsche Beteiligungs AG, where he held 

various staff assignments. He then changed over to the operative business 

in 1989 and became a director in 1991. Helmut Irle has been a 

member of the Board of Management since the beginning of 2001. 

Das team

8 


The team at Deutsche The team at Deutsche Beteiligungs AG AG 

Reinhard Löffler 

Das team 

The team at Deutsche Das Beteiligungs team AG 


Born in 1944, Reinhard Löffler studied industrial engineering at the University 

of Karlsruhe. He has 14 years of experience in mid-sized industry. 

At the beginning of his career, he worked for the Filitz-Metzler Group, 

Mühlacker, a company in the fine mechanics/optical industry, where his 

last position was head of controlling. He then became the director of 

finance at Papst Motoren GmbH & Co. KG, St. Georgen, a company in the 

electrotechnology branch that manufactures small motors and ventilators. 

In 1985, Reinhard Löffler became a director at WFG Deutsche Gesellschaft 

für Wagniskapital bmH, Frankfurt am Main. Since 1989, he has been a 

member of the Board of Management of Deutsche Beteiligungs AG.

Private equity market 


The private equity market: great potential 

Throughout the world, private equity has been strongly gaining in importance 

in recent years – a trend reflected by the dynamic growth the 

market is currently exhibiting. 

Forerunner: USA 

The US market is still the forerunner in private equity. In 1999, private 

equity companies provided capital of US $ 51 billion for investment – 

nearly double the amount the year before. This record high is expected 

to be surpassed again in 2000. Private equity in the USA is also heading 

for another record mark in new investments. During the first nine months 

of 2000, a total of US $ 79.9 billion was invested, representing a rise of 

137 percent against the same period the previous year. 

Growth throughout Europe 

Private equity market 9 

Private equity market Private equity ma 

The European market also experienced dynamic growth in recent years, 

reaching another record high in 1999. European private equity companies 

have capital available for investment amounting to “ 25.4 billion, 

an increase of 25 percent compared with 1998. New capital invested 

rose by 74 percent, from “ 14.5 billion to “ 25.1 billion. By the end of 

1999, the portfolio volume in Europe totaled “ 58.0 billion, up 39 percent 

against the same period in 1998. 

Rapid growth in sums invested 

in millions of “ 

666 

4,880 

715 

6,373 

1,326 

8,329 

1995 1996 1997 1998 

1,948 

12,513 

1999 

3,159 

21,957 

Germany Europe without Germany Source: European Venture Capital Association 

Private equity marke 

Private equity market

vate equ ty 

Private equ 

10 



Private equity mar 

Great Britain remains the largest European private equity market by far – 

both in respect of newly invested funds (46 percent of the European 

total) and portfolio volume at year-end (48 percent of the European 

total). Germany is the largest market in continental Europe, with France 

ranking second. At year-end 1999, 14 percent of total European private 

equity were invested in Germany, whereas France accounted for 9 percent. 

In 1999, 13 percent of the new investments in Europe were made 

in Germany and 11 percent in France. 

More than half the invested capital (53 percent) was used to finance 

buyouts. Expansion capital ranked second (30 percent). Venture capital 

for start-ups and early-stage financing accounted for 13 percent of the 

funds invested. An analysis of the five-year period shows that buyout 

financing and venture capital have continued to grow in importance. 

In the buyout market, there has been a clear trend towards ever larger 

transactions over the last few years. 

Private equity: becoming a standard form of financing in Germany 

Germany, our home market, has experienced phenomenal development 

in recent years. In 1999, the capital available to private equity companies 

for investing activities totaled “ 4.6 billion. This is 145 percent more than 

the previous year (“ 1.9 billion). The investor structure has seen a distinct 

change. In the early 80s, banks were the dominant investors. By the late 

90s, private and institutional investors had clearly gained in importance 

as sources of capital. The number of market participants is also on the 

rise. In 1990, the Bundesverband Deutscher Kapitalbeteiligungsgesellschaft/ 

German Venture Capital Association e.V. (BVK) listed 63 members. That 

number has grown to 162 in 2000. Approximately 200 private equity 

companies are sited in Germany. The appeal of the German market is 

mirrored by the fact that nearly 50 percent of the available funds come 

from international sources. 

New sums invested and the portfolio volume reached new record highs 

year after year. In 1999, “ 3.2 billion were invested, or 60 percent more 

than in 1998 (“ 2.0 billion). The portfolio volume at year-end 1999 

climbed to “ 7.9 billion, 42 percent above that of the year before (“ 5.6 

billion). Although the final figures for the year 2000 are not yet available, 

last year's record is expected to be broken again. In the first six months 

of 2000, “ 1.6 billion were placed in new investments. At June 30, 2000, 

the total capital invested amounted to “ 8.2 billion. 

Pr

mar- 

ity market 

et 

vate equity Private equity market 

Compared with its economic strength, the German market still needs to catch up to 

international standards 

Private equity investments in percent of the gross national product in 1999 

Great Britain 

Sweden 

Netherlands 

Europe 

Belgium 

Iceland 

France 

Finland 

Norway 

Switzerland 

Italy 

Germany 

Ireland 

Spain 

Portugal 

Denmark 

Greece 

Austria 

0.07 

0.06 

0.05 

0.21 

0.21 

0.19 

0.18 

0.16 

0.14 

0.13 

0.12 

Pr vate equ ty-Mark 

Private equity market 11 

Despite this dynamic growth, experts categorize Germany as an early-stage 

market. An indicator used to quantify this market evaluation is the ratio 

of private equity investments to the gross national product. In relation to 

the gross national product, private equity investments in Germany amount 

to merely one sixth of those in Great Britain. The following chart illustrates 

the potential inherent in the German market on a European comparison. 

0.18 

0.31 

0.29 

0.28 

0.48 

0.58 

0.69 

Source: European Venture Capital Association 

Private equity market

12 

Private Private equity equity market market 


Private equity mar- 




Equity needed for start-ups, expansion financing and buyouts has been 

driving the market's enormous growth. New fields of business have also 

emerged. For quoted companies currently not in the limelight of investors' 

interest, the capital markets may not be available as an option. Private 

equity investment companies can offer attractive alternatives. Another 

factor influencing the growing capital needs of mid-sized enterprises is 

the change in policy by banks, requiring higher equity from companies 

wanting to raise loans. 

The new German tax legislation is also expected to fuel the private equity 

business. The planned tax exemption for capital gains from the sale of 

domestic investments will favorably impact earnings. The reform will also 

spur the market, since the tax exemption will foster spin-offs of non-core 

businesses and facilitate the sale of mid-sized companies for successorship 

reasons. 

Deutsche Beteiligungs AG is poised to profit from the market potential.

SPECIAL REPORT 

A management buyout that 

triggered dynamic change 

Case study: The Sebaldus Group 


13

The Seba 

The Sebaldus Group 

14 

Case study: The Sebaldus Group

dus roup 

Sebaldus-Gruppe 

Case study: The Sebaldus Group 15 

Case The Sebaldus studyGroup 

Special report: 

A management buyout that triggered 

dynamic change 

“It is not the companies in the portfolio that are decisive for the value 

of Deutsche Beteiligungs AG – but what we make of those companies.” 

One portfolio company is particularly demonstrative of this fact. The 

management buyout we led at Sebaldus Druck und Verlag GmbH in 

1997 triggered dynamic developments. 

The “original company” of the Sebaldus group was a printing and publishing 

establishment founded in 1658 by laymen of the Catholic Church. 

Following its eventful history over centuries up to World War II, Sebaldus 

then began entering new business fields. In the 70s and 80s the group's 

activities extended to publishing, printing, direct marketing and electronic 

media, advancing to become one of Germany's largest media houses. 

Complex shareholder and corporate structures 

The historical development not only led the Sebaldus Group to diversify 

into four business fields, but to expand geographically as well. Moreover, 

the ownership base had grown to 197 shareholders – primarily the result 

of legacy issues. 

The complexly structured shareholder base and the disparity of interests 

arising in this environment considerably limited the company's flexibility 

in its operative and strategic decision-making scope – a significant disadvantage, 

particularly in view of the dramatic change this market has 

been subjected to. 

The majority of the shareholders was convinced that an experienced, 

flexible financial investor would be supportive of the Sebaldus group's 

sustained development, despite hotly contested markets and restricted 

capacity for its printing operations in the historical center of the city of 

Nuremberg. The supervisory board was commissioned to find a buyer 

capable of recognizing the potential inherent in such a heterogenic 

organization as both an opportunity and a challenge.

16 


Sale to pave way for expansion 

In the sales process, the bid by a consortium of financial investors led by 

Deutsche Beteiligungs AG was accepted. We structured the transaction 

and acquired 99 percent of the shares in the group by way of a management 

buyout in 1997. 

When negotiating the buyout concept with the management, key importance 

was placed on installing incentives. Offering the management a 

holding at preferential terms created the platform to achieve coherency 

in the objectives set. The co-investors in the consortium were involved in 

the transaction at the earliest possible stage: they had already committed 

as early as the due diligence process. Sebaldus' house banks seemed fitting 

partners to finance the acquisition. They were familiar with the 

group's complex structures and its economic situation – particularly with 

the flow of yields. This proved to be beneficial in negotiating the financing 

terms and expediting the deal. Our know-how in structuring transactions 

and Deutsche Beteiligungs AG's standing proved to be extremely 

helpful as confidence-building factors. 

Takeover followed by considerable M&A activity 

Since the takeover, the Sebaldus group has successfully worked to strategically 

position the company as a full-service media systems provider. 

Projects were installed to optimize performance and streamline costs. But 

above all, the new strategic direction helped to accelerate the restructuring 

program. 

One of the group’s marginal activities without synergies to core businesses 

was its electronic media division (largely involving investments in radio 

stations). This line of business was sold to a Bavarian syndicate led by 

Burda Verlag in autumn 1999. Numerous potential buyers were interested 

in purchasing this and other marginal activities of the Sebaldus group, 

opening excellent opportunities to profitably spin off these lines of business.

Sizeable investments were made in the company's core businesses of 

printing, direct marketing and publishing – for instance in Germany’s 

most sophisticated 48-page rotary offset printing press, an investment of 

“ 11 million. 

To further expand its market position as a publisher of popular magazines, 

Gong Verlag successfully launched “TV direkt”, a new bi-monthly 

TV magazine incorporating the world’s first direct index, thereby developing 

a new market segment for low-cost bi-monthly TV magazines. This is 

particulary noteworthy, in that Germany's market for TV magazines is, by 

international standards, highly competitive. Gong Verlag also acquired a 

51 percent interest in Metro Verlag of Austria, a publisher of popular 

magazines such as “Die Wienerin” and “Skip.” In November 1998, 

Computec Media AG, Germany’s leading magazine publisher for computer 

games, achieved a listing on the Neuer Markt segment of the 

stock exchange. 

Networking old contacts 

Case study: The Sebaldus Group 17 

The Sebaldus group's restructuring was completed in 1999. Jointly with 

the other co-investors, we realized the sizeable added value that was 

created by selling to listed Schlott AG in December 1999. Prior to the sale, 

both enterprises were leading publisher-independent printing houses. 

The business combination created Germany’s largest independent media 

systems provider. The combined company is also well positioned in the 

European marketplace. It has been operating under the name of schlott 

sebaldus AG since May 2000. 

Schlott AG was no stranger to us. Deutsche Beteiligungs AG had owned 

a stake in Schlott AG in the past and led this company to a stock market 

listing. A fund managed by Deutsche Beteiligungs AG had retained a 

share in Schlott subsequent to the company's flotation. In conjunction 

with the sales transaction, Deutsche Beteiligungs AG re-invested in 

Schlott by way of a capital increase. Jointly with our co-investment fund 

we hold 25 percent of the stock, making Deutsche Beteiligungs AG the 

largest shareholder. 

For financial year 2000, the new schlott sebaldus AG has forecast sales 

of “ 600 million. From a business point of view, the Sebaldus transaction, 

following the flotation of Schlott AG, may be seen as another, indirect 

public offering for the newly positioned and stronger schlott sebaldus AG.

18 

Case study: 

The Sebaldus Group 

The Seb Seba 

WAZ Media Group – a strong partner for Gong Verlag 

Prior to the sale of the Sebaldus group to Schlott AG, Sebaldus’ publishing 

activities, combined in Gong Verlag GmbH, had been split off. 75 percent 

of the shares in Gong Verlag were held by the former shareholders 

of the Sebaldus group, the remaining 25 percent by schlott sebaldus AG. 

In November 2000, we sold the interests in Gong Verlag held by the former 

shareholders to the WAZ Media Group, Essen. schlott sebaldus AG 

continues to hold the remaining 25 percent. 

With the WAZ Media Group, Gong Verlag has gained a strong partner to 

further develop its core business of “general-interest magazines” and 

“publishing services.” WAZ Media Group plans to enhance its magazine 

activities by this purchase. The Group publishes 275 general and special 

interest magazines as well as customer periodicals in Germany. The company 

is also present in eastern Europe, where it issues 28 magazines. In 

addition to its stake in RTL-TV, WAZ Media Group holds interests in 

numerous radio and television broadcasters. 

In conjunction with the sale of the Gong group, we acquired a 49 percent 

interest in Metro-Zeitschriftenverlags GmbH of Austria, a subsidiary 

of Gong Verlag GmbH. The move is targeted at bundling Metro's successful 

publishing business (“Die Wienerin,” “Skip” etc.) with other 

Austrian publishing activities. 

Looking back on a successful investment 

We look back upon three eventful years, which have not only paid off in 

attractive earnings. New, interesting and, above all, well positioned business 

entities were created with strong potential for the future. As the 

largest shareholder of schlott sebaldus AG, we are poised to continue to 

be supportive of the company's progress and to profit from its good 

perspectives.

aldus dus Group Group 

Case studyThe 

Sebaldus Group 

Case study: The Sebaldus Group 19

Business 

fields 

Business 

fields 

fields 


20 


Edscha AG 

Geschäftsfelder 

Geschäftsfelder 

“In Deutsche Beteiligungs AG we found a 

shareholder who thinks like we do: 

entrepreneurial and profit-oriented.” 

Horst Kuschetzki, Chairman of the Board 

of Management of Edscha AG


The total portfolio consists of the portfolio of Deutsche Beteiligungs AG 

and the investments of DBG Auslands-Holding GmbH, our investment 

arm for businesses sited outside the European economic region prior to 

the second amendment to the German Law on Private Equity Investment 

Companies. Subsequent to this amendment, Deutsche Beteiligungs AG 

has been able to directly invest outside the European Union. 

At October 31, 2000, Deutsche Beteiligungs AG invested “ 324 million 

in 50 companies. The following table gives a detailed survey of the portfolio 

development of Deutsche Beteiligungs AG, including DBG Auslands- 

Holding, a subsidiary of Deutsche Beteiligungs AG. 

Portfolio development of Deutsche Beteiligungs AG in 1999/2000 

Development of business fields 21 

Volume Number 

November 1, 1999 “ 275 million 47 

Investments “ 101 million 9 

Disposals/Repayments “ 52 million 6 

October 31, 2000 “ 324 million 50 

We also manage parallel funds that co-invest largely in the same companies. 

The total portfolio of Deutsche Beteiligungs AG and managed thirdparty 

funds amounted to “ 491 million invested in 61 companies. Our 

portfolio investments are categorized in majority investments, expansion 

financing and funds. A detailed report concerning the development of 

these business fields can be found on the pages to follow.

22 

Business fields fi 



Business fields 



Development of majority investments in 1999/2000 

Volume Number 





We significantly contribute to the strategic development of companies in 

which we (alone or jointly with other financial investors) hold a majority 

interest. After having identified and acquired a promising business, we 

strategically realign it in a close collaborative effort with the management 

to optimally exploit its development potential. An important key to success 

is the management's involvement as shareholders in the business 

(management buyout/buy-in). 

We generally source these investments from family-owned businesses 

seeking succession arrangements or spin-offs of non-core businesses from 

large corporations. 

The acquisition of quoted companies is another field that is gaining in 

importance. After purchasing a majority interest from principal shareholders 

and raising the share quota by a tender offer, the company is then 

delisted and taken private. An example of this is the acquisition of GAH 

Anlagentechnik AG (see page 23). 

Business fields

elds 



In the past financial year we (alone or jointly with other financial 

investors) assumed the position of majority shareholder in the following 

companies: Andritz AG, Edscha AG, Global Energy Equipment Group, 

and Gong Verlag GmbH. You will find further information about these 

transactions in the section “Principal holdings,” starting on page 28. 

GAH Anlagentechnik successfully divested 

In a management buyout in July 1998, we purchased a 97 percent interest 

in GAH Anlagentechnik AG, Heidelberg, at that time a listed company. 

In conformity with German Stock Corporation Law, the remaining shareholders 

were offered a choice between a cash payment or shares of the 

purchasing company. In November 1998, the company was taken private 

and delisted on the stock exchange. 

A successful profit center-based restructuring program led to a significant 

improvement in the company’s profitability. Earnings from ordinary activities 

rose from “ –10.6 million in 1997 to “ +17.8 million (1999). GAH strategically 

realigned its activities to meet market developments, expanding its 

communications services into a stand-alone business field, which is profiting 

from the dynamic growth in mobile telephony and generating sales 

of about “ 80.0 million (1999). The company also strongly enhanced its 

activities in technical systems and services for buildings and technical 

facility management as a “general technical contractor.” 

As one of the large providers in Germany for technical systems and services 

for buildings and technical facility management as well as energy, 

industrial/plant and communications technology, the GAH group operates 

a broad-based network of subsidiaries and branch offices. Employing 

a staff of approximately 5,000, sales of the GAH group rose 9 percent 

to more than “ 706 million in financial year 1999. 

Deutsche Beteiligungs AG sold the GAH group, located in Heidelberg, 

to Aare-Tessin AG für Elektrizität in Olten, Switzerland. This transaction 

took effect retroactively as of January 1, 2000. 

In partnership with the GAH management, we significantly enhanced the 

company’s value and realized that new value by the divestment. The GAH 

transaction represents the first successfully completed public-to-private 

transaction by a financial investor in Germany.

24 


Other sales 

We also sold our investment in the Hübner/Medopharm group, which 

we held via Euvita GmbH & Co. KG, to Nordzucker AG. The sale of 

Gong Verlag GmbH in November 2000, subsequent to the close of 

financial year 1999/2000, marks the successful completion of the 

restructuring of the Sebaldus group. You will find a detailed account of 

this project in “Special report: A management buyout that triggered 

dynamic change” on pages 13-19. 


Development of expansion financing in 1999/2000 

Business 

Busin 

fields Business 

Volume Number 





Expansion financing investments focus on supporting investee companies 

in reaching commonly defined objectives. Our capital and know-how 

allow achieving these objectives more effectively and within a shorter 

timespan. A typical example is an investment in a company in the pre-IPO 

stage. Frequently, enterprises will seek a stock market listing, but require 

additional capital and support to create the organizational structures for 

flotation. 


In 1999/2000, three new projects in this business field were: ad pepper 

media N.V., Rheinhold & Mahla AG and schlott sebaldus AG.

fields ss fields Business fields 



Development of fund investments in 1999/2000 



Volume Number 





Investments in private equity funds which invest outside Germany constitute 

the platform for our cross-border business. In attractive international 

markets, we work with private equity companies whose investment policies 

are similar to ours. To strengthen the working relationship and partnership 

with these private equity companies, we not only invest in their 

funds, but in the management companies as well. We will, however, 

only commit to funds, if Deutsche Beteiligungs AG is granted co-investment 

rights. Exercising these co-investment rights allows us to invest 

directly in portfolio companies purchased by the fund, thereby generating 

additional investment opportunities. 

Fund investments initially involve a commitment to invest. The capital is 

then paid successively in tranches. The committed sums become due as 

the fund’s investing activity progresses.

26 


International private equity partners 

We have been working with Harvest Partners Inc., New York, a very successful 

American private equity company, since 1985. To date, Deutsche 

Beteiligungs AG has profitably invested in three funds raised by Harvest 

Partners. 

Our partnership with Unternehmens Invest AG, a quoted company sited 

in Vienna, dates back to 1992. Deutsche Beteiligungs AG is the largest 

shareholder, owning 25.1 percent of the stock, and also holds the chair 

on the Supervisory Board. We are also the largest investor in Univest AG, 

a fund launched in 2000. 

We profit from the potential of the French market through our investment 

in Quartus Gestion S.A., Paris, which we founded jointly with the 

company's management in 1998. Deutsche Beteiligungs AG is the initiator 

and largest investor in the fund raised by Quartus Gestion. 

We have been operating in eastern Europe via a management company 

since 1996. The company manages a fund volume of “ 46 million. The 

investment strategy is focused on later-stage investments in privatizations, 

management buyouts/buy-ins and expansion financing. Geographically, 

the fund primarily invests in Poland, the Czech Republic, Hungary, and 

Slovakia. Via the management company, we profit from realizations 

through our variable management fee, which is linked to the size of the 

deal. 

To date, the fund has invested in two businesses in Poland, one in the 

Czech Republic and one in Hungary. A further investment, involving a 

cross-border concept for the development and distribution of computer 

games, was made just recently. In a first step, market-leading distributors 

in the Czech Republic and Poland were acquired. Add-on purchases of 

smaller game developers will follow.

Business 



Business fields fields 

27 

Development of business of business fields fields 



One company, Czech On Line a.s., Prague, Czech Republic, was profitably 

divested this past financial year. In April 2000, just two years after 

acquiring the company in a management buyout, it was sold to Telekom 

Austria. This deal constitutes both the largest internet transaction and 

one of the most successful private equity investments to date in eastern 

Europe. 87 percent of the shares in Czech On Line a.s. were held by the 

fund we manage. The remaining shares were owned by the management 

of Czech On Line. 

We anticipate that the fund’s capital will be invested completely this 

current fiscal year and plan to raise a follow-up fund.

28 Principal holdings 

Principal holdings 

Principal rincipal 


holdings 




Rheinhold & Mahla AG 

“By guaranteeing the capital increase for 

Rheinhold & Mahla, Deutsche Beteiligungs AG 

provided the financial backing for our further growth.” 

Dr. Robert Mueller, Bernd P. Kröger (Spokesman), 

Heinz K. Schmitt, Dr. Gunther G. Küspert, 

Board of Management of 


(from left to right)

Principal holdings of Deutsche Beteiligungs AG/ 

DBG Auslands-Holding at October 31, 2000 

The following pages contain a detailed report on the development of our 

ten largest investments, measured by their book value. These holdings 

represent almost half of the portfolio. The report is followed by an 

overview of the 18 next-largest investments, which, added to the ten 

largest, represent 90 percent of the book value of our portfolio. The 

presentation of these portfolio companies is structured according to our 

three business fields: majority investments, expansion financing and 

investments in funds. 

Book value in Share of Presented 

millions of “ portfolio on page 

Bauer AG 27.6 9.0 % 38 

Lignum Technologie AG 21.9 7.1 % 39 

schlott sebaldus AG 17.4 5.7 % 37 

Harvest Partners International (III) Inc. 17.0 5.5 % 47 

Hörmann GmbH & Co. Beteiligungs KG 13.7 4.5 % 40 

Hucke AG 12.0 3.9 % 41 

Edscha AG 11.7 3.8 % 31 

Gong Verlag GmbH 10.9 3.5 % 32 

Rheinhold & Mahla AG 10.6 3.4 % 42 

HKL Baumaschinen GmbH 10.3 3.3 % 43 

Total, 10 largest investments 153.1 49.7 % 

Total, 18 next-largest investments 123.8 40.3 % 

Total, 28 largest investments 276.9 90.0 % 

Total, remaining 22 investments 36.2 10.0 % 

Investment sum in book value 313.1 100.0 % 

Principal holdings 29

30 

Principal 

Principal 

holdings 

holdings 


You will also find a detailed report on our new investments. schlott 

sebaldus AG, Rheinhold & Mahla AG, Gong Verlag GmbH, and Edscha 

AG constitute four new investments that rank among the ten largest. 

Principal holding 

Principal holdings holdi 

Presented on page 

schlott sebaldus AG 37 

Quartus Capital Partners I S.A. 48 

Gong Verlag GmbH 32 

Andritz AG 33 

Rheinhold & Mahla AG 42 

ad pepper media N.V. 44 

Global Energy Equipment Group 33 

Edscha AG 31

s 

gs 


Edscha AG 

Principal holdings 31 

Sales 1999/00 Employees 1999/00 First invested in 

“ 593 million 4,320 September 2000 

Invested capital Equity shares 

Total T“ 23,385 15.0 % 

– thereof, Deutsche Beteiligungs AG T“ 11,693 7.5 % 

– thereof, parallel funds T“ 11,693 7.5 % 

In September 2000, Deutsche Beteiligungs AG acquired an investment in 

Edscha AG, a listed automotive supplier sited in Remscheid, from a private 

equity fund that was in the process of being dissolved. The investment 

consists of a block of shares amounting to a 15 percent stake (Deutsche 

Beteiligungs AG: 7.5 percent) and a shareholder loan. Deutsche Beteiligungs 

AG, other financial investors and the chairman of the board of 

management together hold some 71 percent of the stock. Approximately 

29 percent of the shares are on free float. 

Subsequent to its recent acquisition of JAG, an American group of companies, 

Edscha generates annual worldwide sales of more than “ 700 

million. The Edscha group employs a staff of some 4,320 at 22 locations 

in 14 countries. A developer and manufacturer of hinge systems for 

vehicles (primarily for doors, hoods, trunk lids, as well as door stops), 

Edscha is the world market leader in this field. Edscha has also achieved 

a leading position, particularly in Europe, in convertible roof systems and 

sliding roofs for trucks. 

Edscha integrated key trends in the automotive industry – such as globalization, 

focusing on core activities, outsourcing development projects – 

into its corporate strategy early on. The company only operates in those 

business fields in which it holds a leadership position or sees prospects of 

achieving that leadership position in the mid-term. By focusing on innovation 

and an international positioning, the company aims to grow faster 

than the automotive market.

32 


The company’s very satisfactory progress since the acquisition confirms 

our assessment. In financial year 1999/2000 (July 1 to June 30) Edscha 

AG continued its pattern of growth exhibited in recent years. Consolidated 

earnings before taxes and interest (EBIT) rose by 54.3 percent to 

“ 40.9 million (previous year: “ 26.5 million). Sales, up 20.5 percent to 

“ 593.2 million (previous year: “ 492.1 million), reached a new record 

high. The net profit climbed to “ 14.0 million (previous year: “ 3.0 million). 

For financial year 2000/2001, Edscha anticipates another year of 

growth in sales and earnings clearly topping the market average, despite 

the sluggishness in the worldwide automotive industry. 

Gong Verlag GmbH 

Sales 1999 Employees 1999 First invested in 

“ 130 million 340 December 1999 

Invested capital Equity share 

Total T“ 10,909 26.67 % 


In conjunction with the divestment of the media group Sebaldus to 

Schlott AG, the group's publishing activities, comprised in Gong Verlag, 

were split off. Subsequent to this transaction, we held a 75 percent 

interest in Gong Verlag jointly with our co-investors. 

Gong Verlag possesses a broad magazine portfolio, including such popular 

titles as “TV-direkt”, “BILD+FUNK”, “Gong” and “die aktuelle”. 


In November 2000 we sold our interest in Gong Verlag, Nuremberg, to 

the WAZ Media Group, Essen. The remaining 25 percent of the stock are 

still held by schlott sebaldus AG. Gong Verlag has found a strong partner 

in the WAZ Media Group to further develop its core businesses of “general-interest 

magazines” and “publishing services.” As the largest shareholder 

of schlott sebaldus AG, Deutsche Beteiligungs AG will continue 

to follow and back Gong's publishing activities. Both schlott sebaldus AG 

and Deutsche Beteiligungs AG will profit from the business combination 

with the WAZ Media Group. 

Princi Princ




pal holdings 


Global Energy Equipment Group 


US $ 275 million 905 August 2000 


Total T“ 6,159 4.6 % 



In a cooperative project with Harvest Partners, our private equity partner 

in the USA, we financed a management buyout of Global Energy Equipment 

Group (Global Energy), Tulsa, Oklahoma (USA), in August 2000. 

Generating sales of approximately US $ 400 million in financial year 

2000, Global Energy is the world's leading manufacturer of equipment 

for gas turbine-operated power plants. The company’s leadership position 

is rooted in superior engineering know-how and a broad product 

range which comprises suction, filter, and exhaust systems as well as specialized 

generators for waste heat recovery. This strongly growing company 

is profiting to an above-average extent from the compelling advantages 

that gas turbine technology has in the production of electricity and, 

therefore, from the present capacity expansion in power production. 

Spurred by high market demand and new product developments, Global 

Energy is planning consistent growth in the years to come. 

Andritz AG 


“ 766 Million 3,122 December 1999 


Total T“ 7,675 8.15 % 


– thereof, parallel funds T“ 3,837 4.07 %

34 



Deutsche Beteiligungs AG was a partner in a syndicate that purchased 

Andritz AG, Graz, Austria, in a management buyout in December 1999. 

The syndicate was led by our Austrian private equity partner Unternehmens 

Invest AG (UIAG), whose principal shareholder is Deutsche Beteiligungs 

AG. Jointly with UIAG, we hold a 25 percent interest in Andritz. This 

company, which manufactures production facilities for the paper, steel 

and feed industries, generated sales of “ 766 million in 1999. The syndicate’s 

investment is targeted at supporting Andritz's ongoing program 

of expansion and internationalization, thereby furthering the excellent 

progress this company has made over the last few years. 

In May 2000, Andritz acquired a 50 percent interest in the Ahlstrom 

Machinery Group of Finland. Andritz may also exercise put/call options, 

which would give Andritz the sole ownership over the Ahlstrom Machinery 

Group. Ahlstrom is the leading manufacturer of facilities for the production 

of chemical cellulose, including lye recovery and chemical retrieval 

plants required for the process. Ahlstrom ideally complements Andritz’s 

product and service range as world market leader for wood processing 

technology (bark stripping and chopper plants), particularly in refiner 

systems for cellulose production and cellulose drying plants. Through this 

acquisition, Andritz significantly enhanced its worldwide market leadership 

in cellulose and paper technologies. 

In November 2000, Andritz continued its acquisition strategy by purchasing 

Universal Milling Technology, making the company the world market 

leader in feed technologies. 

For financial year 2000, Andritz anticipates a rise in consolidated sales to 

approximately “ 900 million and a sustained improvement in earnings by 

having exploited synergies – primarily through the Ahlstrom acquisition. 

Additionally, the economic uptrend in a number of regions – particularly 

in China and other Asian countries as well as South America – is expected 

to favorably impact the company's results. A restructuring and efficiency 

program will improve cost structures. 

The acquisition of the Ahlstrom Machinery Group brought Andritz AG a 

significant step towards a public offering.

Principal Principal holdings holdings 



Other investee companies from the business field of majority investments are presented in 

the tabular overview below: 

Libro AG, Guntramsdorf, Austria Investment Equity share 

Total: T“ 10,706 14.72 % 

Media retailer thereof, 

Deutsche Beteiligungs AG: T“ 9,038 12.35 % 

thereof, parallel funds: T“ 1,668 2.37 % 

Sales 1999/2000: “ 378.30 million 

Employees 1999: 2,600 First invested in: February 1997 

Edgen Corp., Baton Rouge, Louisiana, USA 

(formerly Thomas Pipe & Steel Inc.) 

Investment Equity share 

Leading wholesaler for steel tubes and Total: T“ 8,658 11.33 % 

other steel components for the oil, thereof, 

chemical and construction industries 

Sales 1999: US $155.9 million 

DBG Auslands-Holding: T“ 8,658 11.33 % 

Employees 1999: 271 First invested in: October 1996 

Communication Dynamics, Inc., Hershey, 

Pennsylvania, USA 


Total: T“ 8,621 9.70 % 

Specialized components for cable thereof, 

TV networks and remote control 

Sales 1999: US $373.4 million 


Employees 1999: 380 First invested in: May 1996 

IntelliRisk Management Corporation, 

Columbus, Ohio, USA 


Total: T“ 15,668 14.80 % 

Accounts receivable collection/ hereof, 

call center services DBG Auslands-Holding: T“ 7,834 7.40 % 

Sales 1999: US $ 179.2 million 


Employees 1999: 4,015 First invested in: August 1998

36 


Principal holdings h 



Zapf GmbH + Co., 

Bayreuth, Germany 


Total: T“ 14,418 84.70 % 

System provider for prefabricated thereof, 

town houses and garages Deutsche Beteiligungs AG: T“ 7,209 42.35 % 

Sales 1999: “ 301.3 million 


Employees 1999: 1,343 First invested in: October 1999 

Lund Holdings Inc., 

Anoka, USA 


Total: T“ 6,986 10.10 % 

Accessories for SUVs and utility vehicles thereof, 



Employees 1999: 1,352 First invested in: September 1997 

DS Technologie Werkzeugmaschinenbau 

GmbH, Mönchengladbach, Germany 


Total: T“ 20,519 85.40 % 

Specialty machine tool construction thereof, 




Employees 1999: 856 First invested in: July 1998 

Home Care Supply Inc., 

Beaumont, Texas, USA 


Total: T“ 10,483 11.10 % 

Home health-care products thereof, 




Employees 1999: 940 First invested in: February 1998 

Andritz AG, Graz, Austria 

(see page 33) 


Total: T“ 7,675 8.15 % 

Machinery and facilities for the thereof, 

paper, steel and feed industries DBG Beteiligungs AG: T“ 3,837 4.07 % 



Employees 1999: 3,122 First invested in: December 1999

oldings 


schlott sebaldus AG 




“ 524 million* 4,045* December 1999 

*Pro forma calculation by Deutsche Beteiligungs AG 


Total T“ 19,757 24.99 % 



In December 1999, we sold our interest in the media systems group 

Sebaldus to Schlott AG, Freudenstadt, a quoted company. This business 

combination has created Germany's largest independent media systems 

provider and a leading player in the European marketplace. For financial 

year 2000, the new schlott sebaldus AG has forecast consolidated sales 

of some “ 600 million, and a result from ordinary activity of “ 23 million. 

A part of the proceeds from the sale of Sebaldus to Schlott was paid in 

the form of shares. Jointly with a parallel fund, Deutsche Beteiligungs 

AG controls almost 25 percent of the stock, making us the largest shareholder 

of schlott sebaldus AG. 

Since the takeover, the complete group has been strategically realigned. 

schlott sebaldus focuses on its core businesses of high-performance 

printing, direct marketing and digital services. The group also provides 

full-service solutions to the advertising industry in classical print media, 

on-line media and one-to-one marketing. schlott sebaldus is well poised 

to profit from the significant growth potential of the market, particularly 

in its business fields of direct marketing and digital services. Cross-field 

services and customer solutions as well as acquisitions and internationalization 

are targeted at enhancing value. We anticipate additional profitability 

from synergies ensuing from the ongoing integration process 

within the group as well as from the new plant in Nuremberg. The production 

operations are successively being relocated out of Nuremberg's 

historical inner city.

38 


Principal holdings h 

schlott sebaldus generated some “ 406 million in sales revenues in the 

first nine months of financial year 2000 (previous year: “ 107 million). 

Earnings before interest, taxes and depreciation (EBITDA) climbed from 

“ 14.8 million to approximately “ 51.7 million, more than tripling over 

the previous year. Despite special acquisition-related charges (good will, 

interest expenses for the acquisition financing), the result from ordinary 

activity increased by about “ 5.4 million to a total of some “ 12.2 million. 

We plan to realize a sizeable increase in the value of our investment 

through the implemention of the new strategy. 

Bauer AG 


“ 466,0 million 3,388 September 1996 


Total T“ 27,594 41.2 % 


We acquired a 31 percent share in Bauer AG by way of a capital increase 

in 1996. This past business year, we again participated in a capital increase, 

raising our investment quota to 41.2 percent. The Bauer family remains 

the principal shareholder, owning 55.8 percent of the stock. 

Bauer AG is the world’s market leader for machinery and equipment 

used by the special deep foundation industry and is among the largest 

suppliers of special deep foundation construction services. Number one 

in Germany, Bauer AG is a technology leader in its field and operates 

worldwide. 

In financial year 2000, the company significantly improved its profitability. 

Additionally, the integration of Ing. G. Klemm Bohrtechnik GmbH, 

Drolshagen, a competitor acquired the previous year, was successfully 

completed. To further optimize operations, the two business fields of 

special deep foundation construction services and machine construction 

will be split off to form legally separate business entities. 

A public offering has been targeted for Bauer for the mid-term range. 

The company's excellent market position is a good platform on which to 

achieve that goal.

oldings 




Lignum Technologie AG 



“ 593 million 4,509 January 1997 


Total T“ 21,883 20.68 % 


Deutsche Beteiligungs AG owns a 20.68 percent share in Lignum Technologie 

AG, Schopfloch, formed by the merger of the core business 

activities of Homag AG and IMA Klessmann GmbH. 

We invested in Homag Maschinenbau AG in January 1997. Today, the 

company has a 20 percent market share and is present in over 50 countries, 

making this global player the undisputed world market leader in its 

field of business. The company's service spectrum extends from engineering 

and consulting, the manufacture of high-tech machinery and 

sophisticated facilities to software and e-commerce. Its product range 

encompasses virtually all machinery and facilities for the furniture manufacturing 

industry. Its core technologies are saws, edge-working machines 

(finishings for cutting edges) and boring machines (for joints and fittings, 

for instance). Conveyor systems linking individual work stages and 

assembly systems round off the product range. 

In the first three quarters of financial year 2000, Lignum generated sales 

of some “ 577 million, a gain of 18 percent, thereby even outpacing the 

fast-growing branch average. Earnings have grown more strongly than 

sales – largely the result of synergies created by the merger and the 

strong economy in the North American market. 

For the remainder of the fiscal year, the board of management anticipates 

a strong rise in sales in excess of “ 716 million (previous year: “ 593 

million) and overproportionate growth in earnings. Lignum is working 

towards a public offering as soon as the situation in the capital market 

allows.

40 


Hörmann GmbH & Co. Beteiligungs KG 


“ 269 million 3,028 May 1997 


Total T“ 13,750 28 % 

– thereof, Deutsche Beteiligungs AG T“ 13,750 28 % 

Deutsche Beteiligungs AG purchased 28 percent of the stock of Hörmann 

GmbH & Co. KG, Kirchseeon, in 1997 by way of a capital increase. The 

majority shareholder is the company founder. 

Hörmann is a group of companies operating in the fields of industrial 

services, communications services and electronic equipment. The Hörman 

group consists of about thirty subsidiaries. The objective of this investment 

is to increase the company's value by optimizing internal processes and 

by making complementary acquisitions. Subsequent to our commitment, 

all three business fields were expanded through add-on acquisitions. 

A highlight in business year 2000 was an IPO for Funkwerk AG, which 

comprises Hörmann's communications systems activities. Funkwerk AG is 

an innovative, rapidly growing telecommunications provider for traffic 

systems. The company's listing was a success, despite the difficult stock 

market environment. The IPO raised about “ 40 million for the company. 

Its market capitalization at year-end is some “ 180 million. Subsequent 

to the listing, Hörmann holds 63 percent of the stock of Funkwerk AG. 

In its business field of industrial technology, Hörmann entered into a joint 

venture with DIW (Deutsche Industriewartung AG) to further future growth. 

Hörmann, a leading supplier of industrial services to the automotive 

industry, holds a 74.8 percent interest in this joint venture.


Principal Principal holdings 

Principal Beteiligungs holdings 


Hucke AG 


“ 401 million 2,075 February 1995 


Total T“ 11,977 26.6 % 


Through Bowa Beteiligungsgesellschaft mbH & Co. KG, Deutsche Beteiligungs 

AG and two other investors have held a 38 percent interest in 

Hucke AG since 1995. 

Hucke AG is one of Germany’s leading manufacturers of women's, men's 

and children's apparel. The fashion house of Basler GmbH belongs to the 

Hucke group through MHM Mode Holding München AG. Apart from 

Basler, however, Hucke was unable to counter the unsatisfactory development 

which has struck Germany's apparel industry in recent years. 

Due to a particularly difficult environment in the mid-market segment, 

on which Hucke primarily focuses, group sales again fell to “ 401 million 

in financial year 1998/99. Charged with significant restructuring costs, 

group earnings were “ –14.6 million. 

The 1999/2000 business year saw the implementation of an extensive 

restructuring program. By selling Otto Kern and ARA, Hucke parted with 

two loss-making companies. A change in the trade's purchasing patterns 

caused another decline in some segments. Contrary to the market trend, 

Basler again achieved above average sales and earnings. In light of the 

very satisfactory development of Basler’s business as well as the restructuring 

and cost-cutting programs, Hucke anticipates that earnings will be 

positive for the year. 

Hucke recently acquired two attractive and promising licenses for “West 

Sports” (Reemtsma) and “Harry Potter” (Time Warner), which will favorably 

influence sales and earnings. Expanding the license business is an 

integral part of Hucke's future corporate strategy. 

Principal holdings

42 




“ 671 million 8,145 December 1999 


Total T“ 21,190 27.0 % 



In October 2000, Deutsche Beteiligungs AG raised its interest in Rheinhold 

& Mahla AG, a quoted company, to 27 percent, after having purchased 

an initial tranche via a capital increase in May 2000. The capital 

increase served to improve the equity ratio which had declined due to 

leveraged acquisitions. 

Rheinhold & Mahla belongs to that group of companies which is presently 

not in the limelight of investors' interest, but which has a key position in 

the marketplace, exhibits attractive earnings potential and is growing 

strongly. Rheinhold & Mahla operates both in industry (insulation systems, 

ship insulation, industrial services) and in construction (insulation solutions, 

facade technology, refrigerated storage construction). Following the 

takeover of Willich, a former competitor, in 1999, Rheinhold & Mahla is 

today the European leader in industrial insulations. 

From our point of view, the company is well poised in the marketplace, 

but the current price of its shares does not yet reflect the company's 

earnings and development potential. Despite the difficult stock market 

climate, our investment creates the platform for this listed company to 

continue its successful program of sustained strategic expansion. 

In financial year 1999, Rheinhold & Mahla generated consolidated sales 

of “ 671 million, a rise of 33 percent. Earnings before taxes grew by 

some “ 10 million to approximately “ 16 million. Both business fields 

contributed to Rheinhold & Mahla’s excellent progress. 

The first nine months of the current financial year confirm the high 

expectations placed in this company.





Principal Principal holdings holdings 


HKL Baumaschinen GmbH 


“ 171 million 851 February 1995 


Total T“ 10,277 n.a 

– thereof, Deutsche Beteiligungs AG T“ 10,277 n.a 

In February 1995, we entered into a silent partnership with HKL Baumaschinen 

GmbH, Hamburg, to support the company’s further growth. 

Founded in 1970, HKL has developed into a leading manufacturer-independent 

sales and rental organization for construction machinery, building 

equipment and containers. The company deals in sales and rentals of 

new and used machinery and spare parts. It also provides assembly and 

maintenance services. 

Despite adverse market conditions in the construction industry in recent 

years, HKL has grown continuously. In financial year 1999/2000 (ending 

February) sales climbed to “ 171 million (previous year: “ 161 million), 

up by “ 10 million or 6.2 percent. This satisfactory progress stemmed 

from the company’s ability to respond flexibly to the market, while 

consistently optimizing its network of branch outlets. With the market 

expected to remain difficult, HKL will continue to pursue this strategy for 

the current fiscal year.

44 


ad pepper media N.V. 



“ 3.5 million 44 May 2000 


Total T“ 5,525 3.6 % 



In May 2000, we acquired a 5 percent interest in ad pepper media, 

Nuremberg. This commitment enhanced ad pepper media’s financial 

scope for further growth, which the company used to strategically drive 

its program of global expansion and its plans for an IPO. 

Since the company's founding in 1999, ad pepper media has grown 

stronger and faster than the market. ad pepper now ranks among the 

top five on-line advertising marketers in Europe. The company currently 

operates 22 branch offices in 13 European countries and the USA. 

ad pepper was listed on the Neuer Markt in October 2000. The downward 

stock market trend in the fourth quarter of 2000 has meanwhile 

had a negative impact on ad pepper media's share price. The proceeds 

from the issue amounted to some “ 50 million, giving the company 

sufficient resources to realize its corporate concept and then profit, overproportionately, 

from the emerging consolidation trend. The company 

will continue to drive its successful business model of internationalization 

based on lean organizational and cost structures. A break-even is 

planned for 2002.




Other investee companies from the business field of expansion 

financing are presented in the tabular overview below: 

AvK/SEG Holding GmbH & Co., Kempen 

Germany 


Total: T“ 8,912 51.02 % 

Manufacturer of facilities and components thereof, 

for power generation and protective devices Deutsche Beteiligungs AG: T“ 8,912 51.02 % 

First invested in: 

Capital invested as a 

September 1996 

Sales 1999: “ 77.3 million silent partner: T“ 2,045 

Employees 1999: 574 Term: December 31, 2001 

HAWE KG Fabrik für Oel-Hydraulik 

GmbH & Co. KG, Munich, Germany 


Total: T“ 7,767 25.00 % 

Manufacturer and distributor of hydraulic thereof, 

components and equipment 



Employees 1999: 1,056 First invested in: January 1997 

Unternehmensgruppe Dr. Werner Vogler, 

Bad Homburg v.d.H., Germany 


Total: T“ 8,146 30.00 % 

Regional representative for a leading German thereof, 

automobile manufacturer, used-car dealer Deutsche Beteiligungs AG: T“ 5,545 – 

and repair shop thereof, parallel funds: T“ 2,601 30.00 % 

First invested in: February 1975 



Employees 1999: 397 Term: unlimited terminable annually

46 


Otto Sauer Achsenfabrik Keilberg, 

Bessenbach, Germany 


Total: T“ 5,138 – 

Manufacturer and distributor of axles thereof, 

for heavy-duty truck trailers Deutsche Beteiligungs AG: T“ 5,138 – 



April 1997 


Employees 1999: 843 Term: September 30, 2003 

JCK Holding GmbH Textil KG, 

Quakenbrück, Germany 


Total: T“ 16,005 16.00 % 

Manufacturer and distributor of apparel thereof, 

(ladies', men's and children's wear, Deutsche Beteiligungs AG: T“ 3,601 3.60 % 

sports and leisure wear) thereof, parallel funds: T“ 12,404 12.40 % 



Juni 1992 

Sales 1999: “ 239.6 million silent partner: T“ 818 

Employees 1999: 240 Term: December 31, 2001 

Victorvox AG, 

Krefeld, Germany 


Total: T“ 20,513 24.10 % 

Independent telecommunications thereof, 

service provider Deutsche Beteiligungs AG: T“ 10,257 12.05 % 



Employees 1999: 177 First invested in: April 1999




holdings 

47 


Harvest Partner International (III) Inc. 

Fund value First invested in 

US $ 362 million October 1997 


Total T“ 33,959 13.8 % 



Our very successful working relationship with Harvest Partners, a private 

equity company sited in New York, dates back to 1985. By its focused 

investment strategy, Harvest Partners has had a track record of outstanding 

performance in recent years. Harvest Partners has invested some 

US $ 550 million in 30 companies to date, 17 of which have already been 

profitably exited. The capital managed by Harvest Partners rose from 

US $ 100 million in the late 80s to some US $ 600 million today. In addition 

to investing in Harvest Partner funds, Deutsche Beteiligungs AG has 

also co-invested directly in investee companies. Our fund investments 

and co-investing activities have yielded sizeable earnings. 

To continue our successful investing strategy in the USA, we committed 

US $ 50 million to the Harvest Partners III fund in October 1997, becoming 

the largest investor. The committed sums fall due as the fund's 

investing activity progresses. A co-investment right also creates opportunities 

for us to invest directly in the portfolio companies. Most recently, 

we exercised this right in the Global Energy Equipment Group project. 

In addition to the Global Energy Equipment Group acquisition, Harvest 

Partners has raised its stake in existing investments, particularly in buyand-build 

projects. Parallel to the progress of Harvest Partners III fund's 

investing activity, we paid in several tranches in the third quarter of the 

1999/2000 financial year, increasing our investment to US $ 35.5 million. 


Principal Principal holdings hold

48 

rincipal holdings 


holdings 

Quartus Capital Partners I S.A. 


Principal Principal holdings 

holdings 

Fund value First invested in 

“ 111 million July 1998 


Total T“ 3,873 31.0 % 



Jointly with a team of experienced French fund managers, we sponsored 

the fund management company Quartus Gestion S.A., Paris, in 1998. On 

December 31, 1999, the company successfully closed the fund raising for 

its first fund, Quartus Capital Partners I. Financial investors committed a 

total of “ 111 million. The fund will be focusing its investing activity on 

buyouts and expansion financing in France. As the fund's initiator and 

largest investor, we committed 31 percent of the capital, paving the way 

for Deutsche Beteiligungs AG to co-invest directly in French companies. 

This strategic partnership also puts us in an outstanding position to transact 

German-French cross-border deals. 

The fund made its first portfolio investment in January 2000. A further 

acquisition is anticipated to be completed shortly. The fund management 

company operated under the name of Quadran Gestion S.A. and the fund 

under the name of Quadran Capital Partners I until April 1, 2000.


Other fund investments from this business field are presented in the tabular overview 

below: 

Unternehmens Invest AG, 

Vienna, Austria 


Total: T“ 17,554 25.12 % 

Private equity company thereof, 



Equity capital 1999: T“ 58.4 million First invested in: March 1993 

HSBC Private Equity Funds II Limited, 

Cayman Islands 


Total: T“ 7,243 1.90 % 

Private equity fund thereof, 


Fund value: US $ 525 million First invested in: May 1997 

MG Capital Italy, 

Morgan Greenfell Capital Italy, 


S.c.p.a Luxemburg Total: 

thereof, 

T“ 4,061 9.40 % 

Private equity fund Deutsche Beteiligungs AG: T“ 4,061 9.40 % 

Fund value: Lira 181 billion First invested in: May 1996

Portfolio 

Portfolio 

profile 

profile 

Portfolio profile 

50 




GAH Anlagentechnik AG 

“Deutsche Beteiligungs AG was the right 

partner for us to strategically develop GAH.” 

Jürgen E. Gaida, Johannes Jürgen Albus (Spokesman), 

Board of Management of GAH Anlagentechnik AG 

(from left to right)

Portfolio profile of Deutsche Beteiligungs AG/ 

DBG Auslands-Holding GmbH at 

October 31, 2000 

Constituents of our investment policy: 

• To channel two thirds of our resources into transactions in Germany 

and one third internationally. 

• In Germany: to invest at least “ 5 million per portfolio company. 

Portfolio profile 51 

• Of the funds to be invested in Germany, to place at least 80 % in 

majority acquisitions, the remaining amount in expansion financing. 

• Internationally: to acquire majority holdings jointly with our private 

equity partners and invest in their funds. 

• To build and sustain a portfolio independent of industrial branches.

52 


Portfolio 

Portfolio 

Portfolio 

profile 

profile 

Portfolio profile profile 


Portfolio volume registers steady growth 


The portfolio volume recorded steady growth in past years. At November 1, 

1999, the portfolio of Deutsche Beteiligungs AG, including DBG Auslands- 

Holding, totaled “ 275 million invested in 47 companies. At October 31, 

2000, “ 324 million had been invested in 50 companies. These figures 

reflect the policy we have been pursuing towards higher investments per 

transaction. The average amount invested per business rose from “ 5.8 

million to “ 6.5 million. 

Sustained growth in portfolio volume 

138 

251 

77 

44 48 51 47 

1995/96 1996/97 1997/98 1998/99 

Number of portfolio companies Volume in millions of “ 

275 

50 

324 

1999/2000

profile 

Larger investments per transaction 


We aim to invest a minimum of “ 5 million per portfolio company. This 

policy applies to our investing activity in Germany. Internationally, we 

accept smaller investments per business, since we invest parallel to our 

private equity partners, thereby jointly reaching an adequate investment 

sum per transaction. We have consistently pursued this policy in recent 

years, which is mirrored by the development of our portfolio profile. To 

date, 86 percent of our resources are invested in projects of more than 

“ 5 million each. In the previous year, investments of “ 5 million in any 

one business represented 84 percent of the portfolio. The category above 

this investment size exhibits even more distinct growth: Investments valued 

at more than “ 10 million accounted for 68 percent of the portfolio. In 

1998/99, investments of this size represented 45 percent of the portfolio. 

These figures demonstrate that our new investments clearly exceed the 

minimum investment sum. 

Portfolio according to investment size 

less than “ 2.5 million 

“ 2.5 to 5 million 

“ 5 to 10 million 

“ 10 to15 million 

more than “ 15 million 

Invested capital Number 

5% 36% 

9% 14% 

28 % 24 % 

32 % 18 % 

26 % 8 % 

Investments in Germany and internationally 

As in the previous year, the geographic distribution of our investment 

capital is consistent with our investing target. Two thirds of our funds are 

invested in Germany, one third internationally. The greater part of our 

international portfolio value is invested in the USA (63 percent). 

Portfolio investments Germany/international 

Germany 

International 

66 % 

34 % 


42 % 

58 %

54 



Portfol 

Portf 

Some 52 percent of the portfolio volume are attributable to expansion 

financing, 33 percent to majority investments and 15 percent to fund 

investments. We hold several large investments in companies to which we 

have provided expansion capital and which we plan to lead to a public 

offering. 

For the reporting year, the largest part of income from investments stems 

from majority investments, totaling 89.0 percent. Expansion financing 

projects contributed another 8.7 percent. Our fund investments are still 

in the investment phase. Their contribution to earnings is therefore only 

marginal, amounting to 2.3 percent. 

Portfolio according to business fields 



Fund investments 

52 % 


33 % 32 % 

15 % 

20 % 

48 %

io 

olio 

Portfolio 

profile 

profile 




profile 


Portfolio ranges broadly across branches 

There has been practically no change in the branch profile of the portfolio 

against the prior year. Our investing activity ranges broadly across branches. 

We do not focus on any selected segments. More than 50 percent of our 

resources are invested in diverse segments in the capital goods, consumer 

goods and trade and services sectors. Similar to previous years, each of 

the other branches in which we invest accounts for less than 15 percent 

of our business. 

Branch profile of portfolio 

Consumer goods 

Capital goods 

Construction 

Information 

technology 

Apparel and 

textiles 

Trade and 

services 

Automobile 

suppliers 

Funds 

Invested Capital Number 

13 % 10 % 

28 % 22 % 

14 % 8% 

3% 2% 

5% 4% 

11 % 22 % 

11 % 12 % 

15 % 20 %

Shares 

56 Shares 

Shares 

Shares 

Shares Shares 

Lignum Technologie AG 

“Deutsche Beteiligungs AG‘s investment 

gives us additional entrepreneurial scope 

to achieve our common goal: an IPO 

for Lignum Technologie AG.” 

Klaus Bukenberger, Spokesman of the Board of 

Management of Lignum Technologie AG, 

Gerhard Schuler, Spokesman of the Supervisory 

Board of Lignum Technologie AG (from left to right)

Shares of Deutsche Beteiligungs AG 

Shares 57 

The price of Deutsche Beteiligungs AG stock has risen continually in the 

past years, clearly outperforming the SDAX index since 1998. The difference 

was particularly pronounced in financial year 1999/2000, which 

saw serious setbacks in the Neuer Markt and an end to the upward trend 

in prices for DAX blue chips. Against this difficult stock market backdrop, 

the price of shares of Deutsche Beteiligungs AG rose notably by 56 percent. 

On November 1, the first day of trading in the 1999/2000 financial 

year, the price of our shares closed at “ 26.95. On October 31, 2000 

they were quoted at “ 42.05. They reached their highest price point 

of “ 43.40 on February 9 and 10, 2000. Our shares are quoted consecutively 

in Xetra trading and on the Frankfurt and Düsseldorf stock 

exchanges. They are OTC-traded at the stock exchanges in Berlin, 

Hamburg, Munich and Stuttgart. 

Changes in the performance of shares of Deutsche Beteiligungs AG and SDAX 

index in percent from January 1996 

600 

500 

400 

300 

200 

100 

0 

1996 1997 1998 1999 2000 

Performance index Deutsche Beteiligungs AG 

SDAX index 

Source: Bloomberg L. P.

Shares 

58 

Shares 

Shares 

Shares 

Capital increase 

In July 2000, the capital was raised to finance the Company's further 

growth and, in part, to repay loans. Using capital authorized for issuance, 

the subscribed capital was increased by “ 5.2 million, from “ 31.2 million 

to “ 36.4 million, at a subscription ratio of 6:1. 

The 2,000,000 new shares were offered to owners of old shares at a 

subscription price of “ 29. The new shares are entitled to the full dividends 

for the 1999/2000 financial year. The offer met with brisk demand. 

During the subscription period from July 13 to July 26, 2000, the price of 

Deutsche Beteiligungs AG stock climbed from “ 36.50 to “ 40.00. The 

overwhelming majority of our shareholders exercised their subscription 

rights. The proceeds from the capital increase amount to “ 58 million. 

Sustained shareholder value 

Shares 

Shares 

Shares of Deutsche Beteiligungs AG exhibited very satisfactory performance 

in past years. Investors who purchased shares worth “ 10,000 on 

November 1, 1995, re-invested the cash dividends each year to purchase 

further stock and participated in new share issuances without investing 

further funds would have had shares in their portfolio valued at “ 70,811 

at the end of financial year 1999/2000. This corresponds to an annual 

average return of 47.9 percent. 

Dividends remain at high level/Total distribution to shareholders 

up 17 percent 

At this year's Annual Meeting on March 27, 2000, we will recommend 

raising the dividends from DM 3.50 (“ 1.79) to “ 1.80. The orientation 

mark for this year was the pre-tax profit, which was only slightly above 

that of the previous year. As as result of the capital increase, the total 

sum for dividends paid will amount to “ 25.2 million, a rise of 17 percent 

over the previous year. For new shares issued on July 28, 2000 at 

“ 29 per share, this corresponds to a dividend yield of 6.21 percent or, 

including the corporate tax credit, 8.86 percent for eligible shareholders. 

Based on the share price at the beginning of the financial year, the 

1999/2000 dividends represent a return of 6.68 percent, or 9.54 percent 

including the corporate tax credit.

Balanced shareholder profile 

Shareholder profile stays balanced 

Free float 

55% 

Deutsche Bank AG 

15 % 

Gerling- 

Konzern 

15 % 

Vermögensverwaltung 

Wilhelm von Finck 

15 % 

Shares 59 

The subscribed capital of Deutsche Beteiligungs AG totaling “ 36.4 million 

is denominated to 14 million shares. Subsequent to the capital increase, 

the Company's three principal investors, Deutsche Bank AG, Gerling- 

Konzern and Vermögensverwaltung Wilhelm von Finck, continued to 

hold a 15 percent interest each, or a total of 45 percent of the subscribed 

capital. The remaining 55 percent of our shares are on free float. 

A survey among shareholders in November 2000 showed that other 

institutional investors hold an additional one third of the stock. Consequently, 

financially strong institutional investors or funds mostly committed 

to a long-term investment strategy own a total of about 77 percent 

of the stock. The remaining 23 percent are distributed among some 

6,000 portfolios owned by private investors or industrial enterprises. The 

stock held by this group of shareholders has declined 10 percent, compared 

with the shareholder profile two years ago, but still totals more 

than 40 percent of the shares on free float. On the other hand, the 

quota owned by funds grew strongly, now amounting to approximately 

10 percent. This profile shows that Deutsche Beteiligungs AG is genuinely 

a public company. Significant gains in value and dividends, which have 

risen consecutively over many years, have contributed to the appeal of 

Deutsche Beteiligungs AG stock for institutional and private investors.

Management’s report 

report 

60 

Management’s Management’s report report 

Management 


Czech On Line a.s. 

“In DBG Osteuropa I found the right partner to 

develop my business and profitably sell it.” 

Mariano Pireddu, former CEO and managing 

partner of Czech On Line a.s.


I. Market development 

Management’s report 61 

The private equity market in Germany experienced another year of dynamic 

growth. Based on the development until June 30, 2000 as reported by 

the Bundesverband Deutscher Kapitalbeteiligungsgesellschaften/German 

Venture Capital Association e.V. (BVK), investments in 2000 will reach 

another record high. During the first half of the year, gross investments 

totaled “ 1.6 billion, representing a 74 percent rise against the same 

period the previous year. The total portfolio volume at June 30, 2000 

amounted to “ 8.3 billion, or 50 percent over the value at June 30, 

1999. Market observers also expect significant growth for the European 

private equity market. 

Dynamic expansion in the private equity market, now extending over a 

number of years, has been spurred particularly by the need to achieve 

global competitiveness. To this end, the process of concentrating on core 

lines of business generated numerous – in part, larger – divestments this 

past year. Looking to enhance shareholder value, many large quoted corporations 

have spun off non-core subsidiaries. To an increasing extent, 

the buyers have been financial investors. This is reflected in the trend 

towards higher investment sums per transaction to which financial 

investors commit. 

Another source of growth in the private equity business are family-owned 

companies seeking successorship.

Management’ 

Management’s 


Managemen 

report 

report 


62 



II. Development of the portfolio 

The development of Deutsche Beteiligungs AG's international business is 

largely determined by the activities of DBG Auslands-Holding GmbH. For 

this reason, the following report will refer to the development of the 

portfolio in total. 

Investments in 1999/2000 totaled “ 100.7 million, which is distinctly 

more than the previous year's “ 57.5 million. The rise was predominantly 

due to numerous new projects, which represent a 61 percent share of 

total investments for the 1999/2000 financial year. In 1998/99 the quota 

of new investee companies was 36 percent. In total, “ 61.0 million were 

invested in nine new projects and “ 39.7 million in increasing the Company's 

investment in existing portfolio companies. 

Six investments at acquisition costs of “ 44.5 million were completely 

released from the portfolio. Including repayments and partial sales, the 

acquisition costs of the portfolio were reduced by a total of “ 51.7 million. 

At October 31, 2000, there were 50 businesses in the portfolio at total 

acquisition costs of “ 324 million. In the previous year, the portfolio 

consisted of 47 companies or groups of companies at acquisition costs 

of “ 275 million. The average amount invested per portfolio company 

rose from “ 5.8 million to “ 6.5 million. 

To finance the “ 49.0 million rise in the portfolio, there was a capital 

increase of “ 58.0 million in July 2000. The sum of subscribed capital 

and reserves, including an allocation of “ 5.0 million to retained earnings, 

rose by “ 63.0 million, from “ 101 million to “ 164 million in 

1999/2000.

III. Results of 1999/2000 financial year for 



The data in the profit and loss account of Deutsche Beteiligungs AG is 

presented in accordance with commercial code requirements. To facilitate 

an analysis of the performance of Deutsche Beteiligungs AG, the data 

has been reclassified in the overview below: 

in T“ 

Income from investment 

Notes 1999/2000 1998/1999 Changes 

activity 

Result of adjustments in 

7, 8, 9, 12*, 13 60,769 50,795 9,974 

valuation/provisions 1, 10, 12* –11,402 –1,260 –10,142 

Net expense for investment 

management 

Result of ordinary 

1, 10, 11, 12 –6,353 –7,002 649 

activity 43,014 42,533 481 

Net income 

Earnings per share in “ 

32,079 37,526 –5,447 

(weighted) 2.56 3.13 –0.57 

* Some expenses that were clearly attributable to profits and losses of certain investments 

and which do not represent management expenses were included under 

“Other operating expenses”.

64 

Managem Manage 

Management’s R 



III. 1. Result of ordinary activity up 1.1 percent over previous year 

The result of ordinary activity advanced by 1.1 percent over the prior 

year's excellent “ 42.5 million to “ 43.0 million in 1999/2000. This new 

record high corresponds to a 40.0 percent return on the equity available 

at the beginning of the business year. Compared with the previous year's 

peak rate of 46.5 percent, the decline in the return on equity is largely 

due to the increase in the equity base, with earnings rising slightly. Net 

income of “ 32.1 million in 1999/2000 did not reach last year's level of 

“ 37.5 million, which, in part, benefited from tax-exempt realizations of 

investments. Consequently, earnings per share declined to “ 2.56 per 

share this past financial year, following “ 3.13 the year before. The average 

number of shares outstanding for the financial year were weighted 

to determine the earnings per share. 

III. 2. Dividends increased slightly to ¢ 1.80 per share 

The Board of Management and the Supervisory Board will recommend 

another increase in the distribution to shareholders at the Annual Meeting. 

The dividend payment is planned to be raised slightly from DM 3.50 per 

share (approximately “ 1.79) to “ 1.80 per share. The dividends will 

additionally provide for the full tax credit of “ 0.77 per share, meaning 

that the total distribution to eligible shareholders will be “ 2.57 (previous 

year: “ 2.56) per share. The new shares issued in conjunction with the 

capital increase in July 2000 will be entitled to the full dividends. Consequently, 

the sum distributed to shareholders will total “ 25.2 million, 

which represents a 17.4 percent rise compared with last year's “ 21.5 

million. Shareholders will thus receive 79 percent of the net income 

earned this year. 

III. 3. Income from investment activity increased markedly by 

19.6 percent 

Income from investment activity was “ 60.8 million, up 19.6 percent 

over the prior year's total of “ 50.8 million. The rise largely resulted from 

the profitable realizations of our investments in Sebaldus Druck und Verlag 

GmbH and GAH Anlagentechnik AG.


ent’s report 

III. 4. Net value adjustments for portfolio investments clearly 

negative at ¢ –11.4 million 

Business development in some portfolio companies required a reduction 

in valuation totaling “ 17.2 million. This is “ 15.9 million more than the 

previous year's risk provisions of “ 1.3 million. These write-downs were 

only partially compensated by write-ups, in conformity with the commercial 

code requirements to reinstate original values. Net value adjustments 

total “ –11.4 million. 

III. 5. Net expenses for investment management improved by 

¢ 0.65 million 

Expenses for canvassing new business and portfolio management, netted 

against income from related activities, improved by “ 0.65 million from 

“ –7.0 million to “ –6.4 million for the reporting year. The rise results 

from higher income from management fees for third-party investment 

funds. This income, however, did not take effect to the full extent, since 

it was offset by lower structuring fees and the cost of the capital 

increase.

66 


IV. Platform for future progress 


Managem Manage 


IV. 1. Key factors for success and risk exposure in private equity 

Success in private equity is determined by a number of factors. In principle, 

the aim is to 

• invest in promising businesses, 

• sustain and enhance the value of existing and new investments, and 

• realize the value added through current income from investments and 

through capital gains from the sale of investments. 

Success in private equity requires a highly qualified, motivated team and 

a network of contacts to solicit a continual stream of investment opportunities. 

Since investments are, in part, exited via the stock exchange, 

progress in private equity also depends on prevailing stock market conditions. 

Moreover, general economic and business trends are another factor 

influencing success in private equity. There are excellent opportunities for 

exceptionally high returns. But, by the nature of private equity, there may 

also be a need to perform write-offs on investments in certain cases. 

IV. 2. Strategy of Deutsche Beteiligungs AG 

The key factors for success and risk exposure discussed above are also 

applicable to Deutsche Beteiligungs AG. In the past and, in particular, in 

recent years, Deutsche Beteiligungs AG has demonstrated that the Company 

has recognized these factors and developed strategies to meet them. 

Success for the future also means developing and implementing the right 

strategy. To invest in promising businesses and warrant the value of existing 

and new investments, Deutsche Beteiligungs AG pursues the following 

portfolio strategy.

eport 

ent’s ent’s report report 


IV. 2.1. Company-specific portfolio strategy 


For the last four years, Deutsche Beteiligungs AG has focused on majority 

takeovers or investments in which we hold a majority interest jointly with 

other financial investors. This investment strategy is based on experience 

of earlier years and the capital gains realized with majority investments in 

the past. A majority shareholding positions us to influence an investee 

company's strategic direction. Furthermore, we now only invest in minority 

holdings, if a stock market listing seems a realistic option for an exit. To 

minimize the risk inherent in early-stage and smaller businesses, we principally 

invest in established companies that generate sales clearly in excess 

of “ 50 million annually. This strategy is mirrored in the market development, 

which shows a trend towards larger transactions for investments 

in established businesses. 

We limit the maximum sum invested in any one portfolio company to 10 

percent of our total financial investments. This is an effective instrument 

in curbing the risk exposure linked with any one investee business. 

Currently, Bauer AG constitutes our largest single investment, representing 

9.0 percent of the total book value of our portfolio, following an 

increase of our investment in this company in the reporting year. We 

presently still have equity shares from earlier acquisitions in the portfolio 

that no longer meet our investment focus. However, these investments 

only amount to “ 15.6 million, or 5.1 percent of total investments. 

Deutsche Beteiligungs AG does not concentrate on any particular industry 

in which to invest. This avoids risks that may arise from dependence 

on a certain branch of industry and from that industry's susceptibility to 

certain business developments. Nevertheless, the portfolio may come to 

exhibit certain focal points over the years. Currently, investments in capital 

goods manufacturing companies account for 28.0 percent of the 

portfolio book value. This – at first glance relatively high – percentage is 

put into perspective by the fact that these manufacturing companies 

operate in various segments of the capital goods industry.

68 


To further avoid or reduce the exposure to risks from the unsatisfactory 

development of individual investments, a comprehensive monitoring 

system has now been in place for a number of years. The monitoring 

system is adapted and improved on an ongoing basis. To this end, 

Deutsche Beteiligungs AG receives reports from the portfolio companies 

about their business development, mostly at monthly intervals. Additionally, 

members of the Board of Management and other directors hold 

offices in supervisory or advisory bodies in major portfolio companies. 

This puts us in a position to take early counteraction to negative developments, 

if necessary. For three fund investments, which amount to 3.8 

percent of the portfolio, the reporting is on a semi-annual basis. We consider 

this appropriate, due to the low risk profile of fund investments. 

Despite all risk reduction procedures, we will not be able to entirely prevent 

write-offs on investments in certain individual cases. We can, however, 

reduce their effects on the Company's earnings by adherence to 

our investing strategy. 

IV. 2.2. International portfolio strategy 

A company's geographic focus could also materially affect the success of 

its business – as the economic crises in Asia and Latin America have 

shown. Deutsche Beteiligungs AG recognized this risk years ago and 

allows for it by its strategy. To reduce dependence on the economic 

situation in Germany, we pursue a strategy of investing one third of our 

capital internationally – largely in Europe and the USA. This reduces the 

risk of having a serious, sustained recession in Germany or even in Europe 

negatively affect our own development. Currently, economic forecasts 

indicate that no such developments are anticipated in either Germany or 

Europe. At October 31, 2000, investments outside Germany accounted 

for 33.2 percent of the portfolio, and 24.4 percent of our capital was 

invested outside Europe. 

Consistently adhering to this portfolio strategy warrants a balanced 

portfolio profile in relation to company size, investment sum, branch of 

industry and geographic dissemination. This minimizes the value at risk 

in the portfolio.


Management’s Management’s report report 



Risks from the operative side of the business of Deutsche Beteiligungs 

AG play a subordinate role in view of the relatively low number of transactions 

and employees and the involvement of several employees when 

transacting larger deals. 

IV. 2.3. Focus on profitable realizations 

A key factor for success in our business is the realization of capital gains. 

Even prior to making an acquisition, we intensively investigate ways to 

profitably exit that investment again, following a period of enhancing 

the portfolio company's value. We regularly look into several exit options 

in order to have alternatives at hand. Moreover, we work on a number 

of exits simultaneously during the course of a financial year. That reduces 

the risk of depending too greatly on a single realization. Nevertheless, 

our realizations are subject to certain deadline problems related to the 

year-end closing date. We need to accept that complex transactions may 

not always be completed in a financial year as planned, even though the 

value created may be attributable to that year. We principally will not 

invest in a portfolio company, if we do not recognize realistic exit opportunities 

in the mid-term. 

IV. 2.4. Identifying new investment opportunities 

To ensure a steady stream of new investment opportunities, Deutsche 

Beteiligungs AG has access to a large national and international network 

of contacts to enterprises, investment banks, auditors, attorneys, etc. 

We naturally also benefit from our position as the private equity partner 

to Deutsche Bank. 

The portfolio strategy, with its focus on majority acquisitions of larger 

companies and our earnings expectations, is supportive of the Company's 

selectivity in its acquisition policy. Fluctuations in the number of new 

investments when comparing specific periods are therefore normal in our 

line of business and reflect the rigid standards we apply in profitable 

investments.

70 


IV. 2.5. People 

As discussed above, Deutsche Beteiligungs AG needs a qualified, highly 

motivated team to realize its objectives. We have that team. However, it 

takes more than a competitive, performance-based emolument scheme 

to attract and retain outstanding people. We have installed lean reporting 

lines, manage projects by teamwork and pass responsibility onto our 

people as early as possible. 

On average over the year, Deutsche Beteiligungs AG employed a staff of 

50, two of whom were apprentices. 

V. Outlook 

Since the beginning of this current financial year, we have invested “ 4.4 

million in one new project and in raising the Company's investment in 

existing portfolio companies. Two investments at acquisition costs totaling 

“ 12.4 million were exited. We are currently working on several attractive 

investment projects. We feel confident that 2000/2001 will see another 

year of good performance.


Financial Financial Statements 

State- Jahresabschlus 



Financial Statements 71 

Financial Statements 1999/2000 


Unternehmensbeteiligungsgesellschaft Königstein/Taunus 

Assets, equity and liabilities of Deutsche Beteiligungs AG 

(in millions of “) 

40 253 

Assets 293 

Current Assets Long-term Assets 

71 24 198 

Capital 293 

Liabilities Provisions Stockholders’ Equity

72 50 Financial Jahresabschluß Statements · Bilanz zum 31. Oktober 2000 



St 

Balance Sheet for the year ended October 31, 2000 

Assets 

Liabilities and shareholders’ equity 

Notes Oct. 31,2000 Oct.31,1999 

T“ T“ T“ 

Fixed assets 476 665 

Equity shares in associated companies 804 4,605 

Loans to associated companies 0 767 

Equity shares 243,203 209,508 

Loans to companies in which equity 

shares are held 8,180 15,930 

Investments 252,187 230,810 

Long-term assets 1 252,663 231,475 

Receivables from associated companies 2 6,127 6,681 

Receivables from companies 

in which equity shares are held 2 4,223 25,955 

Other assets 3 29,271 20,624 

Securities, own shares 4 71 0 

Cash and cash equivalents 13 124 

Current assets 39,705 53,384 

Prepayments 56 34 

292,424 284,893 

Trustee claims 2,045 22,956 

Notes Oct. 31,2000 Oct.31,1999 

T“ T“ T“ 

Subscribed capital 36,400 30,678 

Capital reserve 102,194 49,858 

Legal reserve 403 403 

Reserve for own shares 71 0 

Other revenue reserves 25,298 20,298 

Retained earnings 25,772 20,701 

Distributable profit 33,341 27,807 

Total shareholders' equity 4 197,707 129,044 

Pension provisions 7,424 6,738 

Tax provisions 10,039 18,319 

Other provisions 6,354 7,329 

Provisions 5 23,817 32,386 

Liabilities to banks 45,094 113,903 

Trade accounts payable 386 457 

Liabilities to associated companies 0 557 

Accounts payable to companies 

in which equity shares are held 11,335 6,311 

Other liabilities 14,085 2,235 

Liabilities 6 70,900 123,463 

292,424 284,893 

Trustee liabilities 2,045 22,956

Jahresabschluß · Bilanz zum Financial 31. Oktober Statements 2000 73 51 

tements 

Profit and Loss Account 

for the period from November 1, 1999 to 


Notes 1999/2000 1998/1999 

T“ T“ 

Income from investments 7 20,986 29,597 

Gains from investment disposals 8 56,794 26,014 

Losses from investment disposals 9 8,225 134 

Write-offs on investments 1 17,184 1,260 

Other operating income 10 18,558 9,707 

Personnel costs 11 10,029 9,347 

Depreciation on fixed assets 1 310 319 

Other operating expenses 12 14,478 8,731 

Net interest 13 –3,098 –2,994 

Result of ordinary activity 43,014 42,533 

Taxes 14 10,935 5,007 

Net income 32,079 37,526 

Profit carried forward 6,333 3,063 

Transfer to other revenue reserves 5,071 12,782 

Distributable profit 33,341 27,807

Fina 

74 50 Financial Jahresabschluß Statements · Bilanz zum 31. Oktober 2000 

Financial S 


Cash Flow Statement 

for the period from November 1, 1999 to 


Increase (+)/decrease (–) in cash and cash equivalents 1999/2000 1998/1999 

T“ T“ 

Net income 32,079 37,526 

Write-offs on investments 17,184 1,260 

Depreciation on fixed assets 310 319 

Reversals –6,555 0 

Cash flows from income 43,018 39,105 

Increase (–)/decrease (+) in accounts receivable 22,286 –21,677 

Increase (–)/decrease (+) in other assets/ 

securities/pre-paid expenses –8,740 –993 

Increase (+)/decrease (–) in provisions –8,569 –7,383 

Increase in non-bank liabilities/deferred income 16,246 6,122 

Cash flows from operating activities 64,241 15,175 

Investments –79,251 –45,272 

Investment disposals 47,246 23,707 

Capital expenditure on fixed assets/ 

intangible assets (net) –122 –352 

Net investment –32,127 –21,917 

Dividends paid for prior year –21,474 –15,339 

Increase in equity capital 58,058 0 

Net increase/decrease in cash and cash equivalents 68,698 –22,081 

Bank loan repayments 68,698 0 

New borrowings 0 22,081 

Frankfurt am Main, December 22, 2000 

The Board of Management 

Wilken Freiherr von Hodenberg Axel Dorn 

Reinhard Löffler Dr. Günther R. Niethammer

ncia State 

tatements 


Jahresabschluß · Bilanz zum Financial 31. Oktober Statements 2000 75 51 

Notes to the Financial Statements 1999/2000 

The profit and loss account has been prepared using the expenditure format. 

To provide for the special circumstances governing the private equity 

business, the legally required structure of the profit and loss account was 

modified according to Article 265, section 6 of the German Commercial 

Code to include the positions of “Gains from investment disposals” and 

“Losses from investment disposals”. 

For the sake of clarity and in compliance with Article 265, section 7, No. 2 

of the German Commercial Code, individual positions in the profit and 

loss account have been combined; detailed disclosures are contained in 

the notes. 

“Gains from investment disposals” discloses the net proceeds between 

realized revenue and the book value. 

Contained under “Losses from investment disposals” are the net losses, 

insofar as realized revenue is less than the book value. 

For a better overview, the legally required information and explanations 

on individual positions in the balance sheet and the profit and loss 

account as well as the explanations which may either be contained in 

the balance sheet, the profit and loss account or the notes to the financial 

statements are all shown in the notes to the financial statements. 

Fixed assets are valued at purchase cost, less regular depreciation 

(straight-line method). Depreciation is based on normal useful life. 

Assets of a minor value are written off in the year of acquisition. 

Minor value assets are treated as disposed in the assets account of the 

following year. 

Financial investments are generally valued at acquisition cost. Longlasting 

reduction in the value of an investment is accounted for by 

non-scheduled depreciation. 

General notes 

Accounting policies 

Long-term assets

Current assets 

Provisions 

Liabilities 

Currency translation 

Trust assets 

Financial 

76 50 Financial Jahresabschluß Statements · Bilanz zum 

Statements 

31. Oktober 2000 


Receivables and other assets are, in principle, carried at face value. 

Recognizable risks have been accounted for. 

Marketable securities are valued at the lower of cost, market or professional 

valuation. 

Provisions covering all recognizable risks and contingent liabilities are 

calculated at their probable realistic value at the balance sheet date. 

Pension obligations were determined on the basis of the accrued benefit 

valuation method, which is applied for disclosures in conformity with the 

“International Accounting Standards” (IAS). The discount rate is 5.5 percent 

p.a. Factors influencing valuation are expected attrition and future 

salary and benefit increases. These were accounted for at an assumed 

annual trend rate of 2.5 percent p.a. 

Liabilities are carried at their repayment amount. 

Financial investments in foreign currency are principally translated at the 

exchange rate at the time of purchase; receivables and accounts payable 

denominated in foreign currency are translated at the lower of currency 

rate at the purchasing date, balance sheet date or repayment date. 

Foreign currency items in the profit and loss account are translated at the 

exchange rate at the date of payment or receipt of payment. 

The trust assets disclosed consist of receivables valued at acquisition cost.

Financial Statements 77 

51 


Remaining Remaining 

Acquisition cost Cumulated book value book value Depre- 

Nov. 1, 1999 Additions Disposals Book depre- Oct. 31, Rever- Oct. 31, ciation 

in T“ 

Property and 

transfers ciation 2000 sals 1999 1999/2000 

equipment 1,303 153 229 0 751 476 0 665 310 

Fixed assets 

Equity shares in 

1,303 153 229 0 751 476 0 665 310 

associated companies 

Loans to associated 

4,605 3,074 6,875 0 0 804 0 4,605 0 

companies 767 0 767 0 0 0 0 767 0 

Equity shares 

Loans to companies in 

which equity shares are 

216,638 67,357 34,539 5,981 12,234 243,203 6,555 209,508 11,662 

held 15,930 8,820 9,221 –5,981 1,368 8,180 0 15,930 1,367 

Investments 237,940 79,251 51,402 0 13,602 252,187 6,555 230,810 13,029 

239,243 79,404 51,631 0 14,353 252,663 6,555 231,475 13,339 

Additions to movable fixed assets during the first half of the year are 

depreciated at the full annual rate; additions during the second half of 

the year are written off at half the annual rate. 

Cumulated depreciation on investments and loans involves seven holdings. 

Write-offs on financial investments contain a direct write-off 

amounting to T“ 4,155. 

Oct. 31, 2000 Oct. 31, 1999 

in T“ in T“ 

Associated companies 6,127 6,681 

Companies in which equity shares are held 4,223 25,955 

(thereof, maturing in more than 1 year) (21) (21) 

10,350 32,636 

Notes to the balance sheet 

1 Assets 

2 Receivables

3 Other assets 

4 Shareholders' equity 

Fina 

78 

50 Financial Jahresabschluß Statements · Bilanz zum 31. Oktober 2000 

Financial Stat 

Accounts receivable from associated companies and companies in which 

equity shares are held constitute profit and interest entitlements as well 

as a partial disposal. 

Other assets largely pertain to receivables from the sale of an investment 

as well as tax credits. 

Subscribed Capital Retained 

in thousands of “ capital reserve earnings 

At Nov. 1, 1999 30,678 49,858 20,701 

Conversion of subscribed capital 522 –522 

Capital increase 5,200 52,858 

Transfer to Retained earnings 5,071 

At Oct. 31, 2000 36,400 102,194 25,772 

At the Annual Meeting on March 16, 2000, the shareholders resolved to 

convert the subscribed capital of Deutsche Beteiligungs AG from TDM 

60,000 to T“ 30,678. T“ 522 from the capital reserve disclosed in the 

balance sheet at October 31, 1999 were converted to subscribed capital. 

The increase was performed without the issuance of new shares. The 

subscribed capital of Deutsche Beteiligungs AG was therefore raised to 

T“ 31,200. Arithmetically, the capital attributable to each of the 

12,000,000 common shares is “ 2.60. The authorized capital was converted 

from TDM 30,000 to T“ 15,339. 

Based on the authorization provided for by the articles of association and 

with the approval of the Supervisory Board on June 23, 2000, the subscribed 

capital was raised from T“ 31,200 by T“ 5,200 to T“ 36,400 

through an issuance of new shares at a subscription price of “ 29 per 

share. The Company's subscribed capital is now denominated into 

14,000,000 common shares without par value. Arithmetically, the capital 

attributable to each share remains unchanged at “ 2.60 per share. The 

authorized capital has thus been reduced by T“ 5,200 to T“ 10,139, 

and it is valid until May 27, 2003. It can be used to increase the subscribed 

capital by an issuance of new shares against cash.

ncia State 

Financial Statements 79 51 

ments Financial Statements 


The shares of Deutsche Beteiligungs AG are traded consecutively on the 

stock exchanges in Frankfurt am Main and Düsseldorf and OTC-traded 

on the stock exchanges in Berlin, Hamburg, Munich and Stuttgart. 

The Board of Management offers employees and former employees of 

Deutsche Beteiligungs AG and associated companies an employee stock 

purchase plan at preferential conditions which are orientated on tax legislation 

and limits. This has resulted in the following transactions with 

the Company's own shares in financial year 1999/2000: 

Purcase/ No. of Share of subscribed 

sales price 

per share 

shares capital 

“ T“ ‰ 

Date of purchase 

May 12, 2000 39.42 3,380 8.8 0.3 

July 28, 2000 

Date of sale/transfer 

29.29 564 1.5 0.0 

July 19, 2000 26.60 –1,792 –4.7 0.1 

August 24, 2000 29.29 –266 –0.7 0.0 

At Oct. 31, 2000 1,886 4.9 0.1 

Retained earnings developed as follows: 

Legal Reserve Other 

reserve for own retained Retained 

in T“ shares earnings earnings 

At Nov. 1, 1999 403 0 20,298 20,701 

Transfers from net income 1999/2000 0 71 5,000 5,071 

At Oct. 31, 2000 403 71 25,298 25,772 

The legal reserve remained unchanged, since the amount under this item 

plus the capital reserve total one tenth of the subscribed capital, as is 

required by Article 272, section 2, No. 1 of the German Commercial Code. 

Reserves for own shares were made in the amount disclosed on the asset 

side. 

The distributable profit contains a profit carryforward of T“ 6,333 

(previous year: T“ 3,063).

5 Provisions 

6 Liabilities 

Notes to the profit and 

loss account 

Fina 

Financial 

80 

50 Financial Jahresabschluß Statements · Bilanz zum 

Statements 



7 Income from investments 



Pension provisions 7,424 6,738 

Tax provisions 10,039 18,319 

Other provisions 6,354 7,329 

23,817 32,386 

The 1998 actuarial charts by Klaus Heubeck were used to determine the 

pension provisions. 

Other provisions pertain to remuneration of the Supervisory Board, the 

cost for preparing the Annual Report, the Annual Meeting, audit and 

consultancy fees, personnel-related costs, anticipated obligations from 

profit sharing and outstanding accounts. 


Total due in less Total due in less 

in T“ than 1 year than 1 year 

Liabilities to banks 45,094 45,094 113,903 103,677 

Trade accounts payable 386 386 457 457 

Accounts payable to associated companies 

Accounts payable to companies 

0 0 557 557 

in which equity shares are held 11,335 11,335 6,311 6,311 

Other liabilities 14,085 14,085 2,235 2,082 

(thereof, related to taxes) (155) (155) (0) (0) 

70,900 70,900 123,463 113,084 

in T“ 1999/2000 1998/1999 

Income from equity shares 20,073 28,558 

((thereof, from associated companies) (0) (9,951) 

Income from loan investments 913 1,039 

(thereof, from associated companies) (0) (36) 

20,986 29,597

ncia State 




Gains from investment disposals incurred at intermediate investment 

holding companies are credited to Deutsche Beteiligungs AG as distributed 

profit and included under “Income from equity shares”. 

Income from equity shares also contains income from silent partnerships 

to which Deutsche Beteiligungs AG is entitled, irrespective of the partner 

company's annual profit situation. The greater part of income from equity 

shares is attributable to profit entitlements. 

Income from equity shares also includes tax credits from distributed profit 

of domestic companies and withholding tax on income from international 

shareholdings. 

Capital gains from the sale of investments relate to four portfolio companies. 

Losses from investment disposals relate to three divestments. 

Other operating income includes earnings from fees for services rendered 

to Deutsche Beteiligungs mbH & Co. Fonds I KG, Deutsche Beteiligungsgesellschaft 

Fonds III GmbH and DGB Auslands-Holding GmbH, as well 

as consultancy fees. 

This position also includes write-ups on the book value of investments 

totaling T“ 6,555 and income of a non-periodic nature amounting to 

T“ 406 (previous year: T“ 532). 

8 Gains from investment 

disposal 

9 Losses from investment 

disposal 

10 Other operating income

11 Personnel costs 

12 Other operating 

expenses 

13 Net interest 

14 Taxes 

Fina 

Financial 

82 50 Financial Jahresabschluß Statements · Bilanz zum 

Statements 




Wages and salaries 8,574 8,233 

Social security costs, 

pensions and support 1,455 1,114 

(thereof, for pensions) (1,000) (674) 

10,029 9,347 

Other operating expenses include consultancy and audit costs as well as 

costs for preparing the Annual Report, the Annual Meeting and the 

capital increase. This item also contains non-deductible taxes, expenses 

resulting from litigation, entitlements from garanteeships and other 

expenses from current operations. 


Other interest and similar income 1,382 432 

Interest and similar expenses 4,480 3,426 

–3,098 –2,994 


Income taxes 10,931 5,030 

Other taxes 4 –23 

10,935 5,007 

In determining the income taxes, tax-exempt earnings from international 

holdings, tax regulations regarding the treatment of write-offs on investments 

and the proposed profit distribution were taken into account. 

As a private equity company, Deutsche Beteiligungs AG is exempt from 

municipal trade tax.

ncia State 




At October 31, 2000, other financial obligations amounted to T“ 26,231 

for payments which may be called for by international investment funds, 

depending on the progress of the investment activity. The remaining 

other financial obligations totaled T“ 1,534 and represent liability for 

additional cover at DGB Auslands-Holding GmbH and long-term contractual 

obligations. 

Contingent liabilities 



Liabilities from guarantees 511 511 

Other contingent liabilities 91,934 36,410 

92,445 36,921 

The rise in contingent liabilities results from guarantees in conjunction 

with the sale of investments. 

The Company holds interests in the following large corporations: 

Bauer AG, Schrobenhausen 

Gong Verlag GmbH, Nuremberg 

Grohmann Engineering GmbH, Prüm 

Lignum Technologie AG, Schopfloch 

Rheinhold & Mahla AG, Munich 

schlott sebaldus AG, Freudenstadt 

Vogel Industrie GmbH, Karlsruhe 

The Board of Management's emoluments totaled T“ 3,640 for the 

reporting year. Payments to the Supervisory Board amounted to T“ 249. 

No shares of Deutsche Beteiligungs AG were held by members of the 

Board of Management; the members of the Supervisory Board held 80 

shares of Deutsche Beteiligungs AG. There were no options granted on 

shares of the Company's stock. 

The Company employed an average of 50 employees and two apprentices 

in 1999/2000. 

The listing of principal investments will be filed separately at the Court of 

Registration in Königstein/Taunus. We made use of the option of not disclosing 

the equity and net income for the past business year as provided 

for by Article 286, section 3, No. 2 of the German Commercial Code. 

Other information

Auditors’ 

84 

50 Auditors’ Jahresabschluß report· 

Bilanz zum 31. Oktober 2000 

Audito report 

Auditors’ report 




“We have audited the annual financial statements, together with the 

bookkeeping system, and the management report of Deutsche Beteiligungs 

AG Unternehmensbeteiligungsgesellschaft, Königstein/Taunus, 

for the business year from 1 November 1999 to 31 October 2000. The 

maintenance of the books and records and the preparation of the annual 

financial statements and management report in accordance with German 

commercial law are the responsibility of the Company's management. 

Our responsibility is to express an opinion on the annual financial statements, 

together with the bookkeeping system, and the management 

report based on our audit. 

We conducted our audit of the annual financial statements in accordance 

with § 317 HGB (“Handelsgesetzbuch” – German Commercial Code) 

and the generally accepted standards for the audit of financial statements 

promulgated by the Institut der Wirtschaftsprüfer (IDW). Those 

standards require that we plan and perform the audit such that misstatements 

materially affecting the presentation of the net assets, financial 

position and results of operations in the annual financial statements in 

accordance with German principles of proper accounting and in the 

management report are detected with reasonable assurance. Knowledge 

of the business activities and the economic and legal environment of the 

Company and evaluations of possible misstatements are taken into 

account in the determination of audit procedures. The effectiveness of 

the accounting-related internal control system and the evidence supporting 

the disclosures in the books and records, the annual financial statements 

and the management report are examined primarily on a test 

basis within the framework of the audit. The audit includes assessing the 

accounting principles used and significant estimates made by management, 

as well as evaluating the overall presentation of the annual financial 

statements and management report. We believe that our audit provides 

a reasonable basis for our opinion. 

Our audit has not led to any reservations.

Auditors’ report 85 

51 

s’ report 

Auditors’ 

Auditors’ 

report 

report 

In our opinion, the annual financial statements give a true and fair view 

of the net assets, financial position and results of operations of the Company 

in accordance with German principles of proper accounting. On the 

whole, the management report provides a suitable understanding of the 

Company's position and suitably presents the risks of future development. 

The legal regulations governing private equity investment companies 

(“Gesetz über Unternehmensbeteiligungsgesellschaften”) have been 

complied with.” 

Frankfurt am Main, January 15, 2001 

KPMG Deutsche Treuhand-Gesellschaft 

Aktiengesellschaft 

Wirtschaftsprüfungsgesellschaft 

(Dr. Lemnitzer) (Janus) 

Wirtschaftsprüfer Wirtschaftsprüfer 

(German Public Auditor) (German Public Auditor)

86 50 Proposed Jahresabschluß profit · distribution 

Bilanz zum 31. Oktober 2000 







Subsequent to appropriating “ 5,071,327.38 to retained earnings and 

including the profit carried forward from the prior year of “ 6,333,027.41 

the distributable profit amounts to “ 33,341,143.41. 

The Supervisory Board and the Board of Management propose using the 

distributable profit to pay a dividend of “ 1.80 per share, or a total of 

“ 25,200,000.00, and carry forward the remaining amount of 

“ 8,141,143.41.


Report 

Report of the Supervisory Board 87 

51 



The Supervisory Board was regularly informed by the Board of Management 

concerning the planned business policy, principal issues of future 

management, the Company's position and progress, as well as significant 

corporate issues, both verbally and in writing, and discussed these matters 

with the Board of Management. 

The Supervisory Board was informed in detail by the Board of Management 

about the Company's position in eight meetings held at regular 

intervals over the financial year. Key subjects discussed were new investments, 

the annual financial statements, the monitoring of existing investments, 

personnel issues concerning the Board of Management, and the 

Board of Management's risk management and surveillance system. The 

Supervisory Board reviewed significant corporate issues and made decisions 

on transactions requiring its endorsement. 

Between regular meetings, the chairman of the Supervisory Board maintained 

close contact with the Board of Management concerning the 

Company's business development as well as that of specific portfolio 

companies. 

The executive committee, consisting of the Chairman and Vice Chairman 

of the Supervisory Board as well as Professor Warnecke, convened four 

times in the course of fiscal year 1999/2000 and held numerous telephone 

conferences. At the request of Professor Warnecke, Dr. Binder took over 

Professor Warnecke's responsibilities at the end of the fiscal year. The 

Chairman of the Supervisory Board also has the Chair on the executive 

committee. This committee is a consultant to the Supervisory Board on 

personnel issues regarding the Board of Management; it is responsible 

for appointment contracts and amendments to these contracts. Apart 

from the executive committee, the Supervisory Board has not installed 

any other committees, since issues concerning the financial statements 

are dealt with by the general assembly of the Supervisory Board. 

The Supervisory Board reviewed the financial statements extensively with 

the Board of Management in the presence of the auditors. The auditors, 

including the auditor responsible for the audit, participated at the annual 

financial meeting of the Supervisory Board. The auditors reported about 

their audit in general and about specific focal points and provided in-depth 

information to inquiries by the members of the Supervisory Board. Additionally, 

the Board of Management kept the Supervisory Board regularly 

informed on the development of the investments.

Report of the 

88 

50 Report Jahresabschluß of the Supervisory · Bilanz zum Board 31. Oktober 2000 




port of the Supervisory Report Board of the Supervisory Board 

The financial statements and management's report for the 1999/2000 

financial year, including the accounting, were audited by KPMG Deutsche 

Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, 

Frankfurt am Main, who were appointed as auditors at the previous 

Annual Meeting, and endorsed with an unqualified certificate. The 

Supervisory Board approved the audit result. The Supervisory Board 

approved the financial statements in its meeting on February 7, 2001, 

which are thus adopted. In his report, the auditor also discussed the 

Board of Management's risk management and surveillance system and 

found it suitable for early identification of developments that may 

endanger the Company's existence. 

The Supervisory Board also reviewed the financial statements as at October 

31, 2000, management's report and the proposed appropriation of 

profits. It has no objections to raise. 

The Supervisory Board has approved the financial statements as presented 

by the Board of Management, which are thus adopted. The Supervisory 

Board agrees to the Board of Management's proposal for the appropriation 

of profits. 

Having reached retirement age, Karl-Heinz Fanselow left his position in 

March 2000. Effective July 15, 2000, the Supervisory Board appointed 

Mr. Wilken Freiherr von Hodenberg to the Board of Management of 

Deutsche Beteiligungs AG and elected him as the Board’s Spokesman. 

Axel Dorn left the Board by mutual agreement on December 31, 2000. 

The Supervisory Board appointed Torsten Grede and Helmut Irle to the 

Board of Management as of January 1, 2001. Both have served for many 

years on the Company's management team. Dr. Günther R. Niethammer 

will leave Deutsche Beteiligungs AG by mutual agreement at the end of 

February 2001. As of March 1, 2001, the Board of Management of 

Deutsche Beteiligungs AG will consist of Wilken Freiherr von Hodenberg 

(Spokesman), Torsten Grede, Helmut Irle and Reinhard Löffler. The Supervisory 

Board would like to thank the gentlemen leaving the Board for 

their service to the Company. At the Annual Meeting on March 16, 

2000, Mr. Stefan Volk was elected to the Supervisory Board. 

Frankfurt am Main, February 7, 2001 

The Supervisory Board 

Prof. Dr. Dieter Feddersen 

Chairman

Board of Management 

Supervisory Board 

Offices held on other statutory supervisory boards 

Offices held in comparable domestic and international supervisory bodies 

of commercial enterprises 

Professor Dr. Dieter Feddersen, Kronberg (Chairman) 

Attorney and associate of White & Case, Feddersen 

Drägerwerk AG, Lübeck (Chairman) 

Bankgesellschaft Berlin AG, Berlin (Chairman 

SAI Automotive AG, Frankfurt/Main (Chairman) 

Lindauer Dornier GmbH, Lindau (Chairman) 

Tarkett Sommer AG, Frankenthal 

Zeppelin Baumaschinen GmbH, Garching/Munich 

Gesellschaft für Industriebeteiligungen Dr. Joachim Schmidt AG & Co. 

Holding-KG, Berlin 

Karl Munte Bauunternehmung GmbH & Co. KG, Braunschweig 

Deutsche Beteiligungsgesellschaft Fonds III GmbH, Frankfurt/Main 

Professor Dr. h.c. Rolf-Dieter Leister, Lucerne (Vice Chairman) 

Economic Advisor 

Board of Management 89 51 




Board Members of Management 

of the Supervisory Board 

and Board of Management 

(Status at October 31, 2000) 

Berlinwasser Holding AG, Berlin (Chairman) 

BÖWE Systec AG, Augsburg 

Loewe AG, Kronach 

DaimlerChrysler Services (debis) AG, Berlin 

Südwestdeutsche Medien Holding GmbH, Stuttgart 

ASCOM AG, Bern 

AU-System Network AB, Stockholm 

Deutsche Beteiligungsgesellschaft Fonds III GmbH, Frankfurt/Main

90 

50 Board Jahresabschluß of Management 

oard of Management 

· Bilanz zum 31. Oktober 2000 

Board Board of Management of Management Board Board of Management of Management 


Dr. Hans-Peter Binder, Berg 

Managing Director Deutsche Bank AG 

Knorr-Bremse AG, Munich (Chairman) 

Dierig Holding AG, Augsburg (Chairman) 

Oberland Glas AG, Bad Wurzach 

SCA Hygiene Products AG, Munich 

Knorr-Bremse Systeme für Nutzfahrzeuge GmbH, Munich 

Osram GmbH, Munich 

A.W. Faber-Castell Unternehmensverwaltung GmbH & Co., 

Stein/Nuremberg 


Eberhard Buschmann, Munich 

Spokesman of the Board of Management of Wilhelm von Fink AG 


Dr. Claus-Michael Dill, Bergisch Gladbach (until Dec. 15, 1999) 

Chairman of the Board of Management of AXA Colonia Konzern AG 

Albingia Versicherungs-AG, Hamburg (Chairman) 

Albingia Lebensversicherungs-AG, Hamburg (Chairman) 

AXA Colonia Krankenversicherungs-AG, Cologne (Chairman) 

AXA Nordstern ART Versicherungs-AG, Cologne (Chairman) 

Sicher Direct Versicherungs-AG, Dreieich (Chairman) 

ROLAND Rechtsschutz-Versicherungs-AG, Cologne (Chairman) 

Rheinboden Hypothekenbank AG, Cologne 

AXA Nordstern Colonia Versicherungs-AG, Vienna (Chairman) 

AXA Colonia Österreich AG, Vienna (Chairman) 

Kölnische Rück, Cologne 

Tertia Handelsbeteiligungs GmbH, Cologne 


Stefan L. Volk (as of March 16, 2000) 

Gerling-Konzern Versicherungs-Beteiligungs AG, Cologne 

Gerling E&L Lebensversicherungs AG, Wiesbaden (Vice Chairman) 

SINEUS AG, Hamburg (Chairman) 

Gerling Investment Kapitalanlage GmbH, Cologne (Vice Chairman) 


Bo Board of

Board of Management 91 

51 

ard of Management 



Management 

Professor Dr. Hans-Jürgen Warnecke, Weil der Stadt 

President of Fraunhofer-Gesellschaft 

Deutz AG, Cologne 

Jenoptik AG, Jena 

Wanderer-Werke AG, Augsburg 

Howaldtswerke-Deutsche Werft AG, Kiel 

Microlog Logistics AG, Lorsch 

MAN Roland AG, Offenbach 

Dynamit Nobel AG,Troisdorf 

Mahle GmbH, Stuttgart 

Rohde & Schwarz Meßgerätebau GmbH, Memmingen 



Karl-Heinz Fanselow, Königstein/Taunus 

Spokesman of the Board of Management (until March 31, 2000) 

FEV Motorentechnik GmbH & Co. KG, Aachen 

Unternehmens Invest AG, Vienna, Austria (Chairman) 

Wilken Freiherr von Hodenberg, Königstein/Taunus 

Spokesman of the Board of Management (as of July 17, 2000) 

DBG Osteuropa-Holding, GmbH, Frankfurt/Main 

(Chairman as of Sept. 7, 2000) 

Axel Dorn, Usingen (until Dec. 31, 2000) 

MHM Modeholding München AG, Munich 

(Chairman as of June 19, 2000) 

Dechamps Textil AG, Aachen (Chairman) 

Hucke Aktiengesellschaft, Lübbecke (Chairman)

92 50 Board Jahresabschluß of Management · Bilanz zum 31. Oktober 2000 

Reinhard Löffler, Weil der Stadt 


Board Board of Management of Management 



Lignum Technologie AG, Schopfloch 

schlott sebaldus AG, Freudenstadt 

transtec computersystemvertriebs AG, Tübingen (Vice Chairman) 

tec2b AG, Tübingen 

Victorvox AG, Krefeld (Vice Chairman) 

EUVITA Holding GmbH & Co. KG, Ehrenkirchen (Chairman) 

Dr. Günther R. Niethammer, Nuremberg 

Bauer AG, Schrobenhausen (Vice Chairman) 

ad pepper media International N.V., Amsterdam 

Rheinhold & Mahla AG, Munich 

Gong Verlag GmbH, Nuremberg (Chairman) 

Hörmann GmbH & Co. Beteiligungs KG, Kirchseeon (Vice Chairman) 

Zapf GmbH, Bayreuth (Chairman) 

Schwan-Stabilo, Schwanhäußer Industrie Holding GmbH & Co., 

Heroldsberg 

Dehn + Sohn GmbH & Co. KG, Neumarkt

011_DBAG GB 2000 Innen E - Deutsche Beteiligungs AG

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