Search Follow us
2 May 2017 · 3 min read

Deutsche Beteiligungs – significant uplift to FY17 earnings guidance

FY17 net income projected to exceed comparable FY16 net income by more than 20%

Deutsche Beteiligungs (DBAG) has announced that it expects to report net income for the year to 30 September 2017 that significantly exceeds the €46.3m comparable income for the prior year, equating to net income of more than €56m for FY17. Previous guidance, first given at the time of the FY16 results and confirmed with Q117 results, was for a moderate 10% to 20% decline in net income. The revised forecast is based on c €44m preliminary net income for H117, which follows DBAG’s announcement today of the divestment of its stake in Romaco Group.

DBAG’s new guidance for €56m FY17 net income compares to the €37m to €42m range implied by management’s previous guidance, representing a significant uplift, largely reflecting a strong performance in H117, which saw the divestments of Grohmann Engineering and FDG Group, and will also reflect the divestment of Romaco Group, announced today.

The pre-announced c €44m preliminary net income for H117 implies c €30m net income in Q217, following €14.1m reported for Q117, which included a €7.3m income contribution from DBAG’s divestment of Grohmann Engineering. Although DBAG has announced the divestments of FDG Group and Romaco, which will be reflected in Q217 results, the c €30m implied net income suggests a significant contribution from other investment activity during the quarter, in addition to the positive effect from rising market valuation multiples.

DBAG today announced the divestment of Romaco for more than 2.0x cost, generating a c €6m income contribution in Q217. While the divestment of FDG Group was announced in March 2017, the sale price was already reflected in its end-December 2016 valuation.

DBAG is scheduled to report its H117 results in full, covering the six months to 31 March 2017, on 9 May 2017.

Read Edison’s most recent research report on DBAG here.

Disclaimer - Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. This document may contain materials from third parties, which are supplied by companies that are not affiliated with Edison Investment Research. Edison Investment Research has not been involved in the preparation, adoption or editing of such third-party materials and does not explicitly or implicitly endorse or approve such content. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of publication and is subject to change without notice. While based on sources believed reliable, we do not represent this material as accurate or complete. Any views or opinions expressed may not reflect those of the firm as a whole. Edison Investment Research does not engage in investment banking, market making or asset management activities of any securities. The material has not been prepared in accordance with the legal requirements designed to promote the independence or objectivity of investment research.