Half Year 2026 Deutsche Beteiligungs AG Earnings Call

August 6, 2026

Operator: Ladies and gentlemen, welcome to the publication of the H1 financial report 2026 analysts conference call. I am Healy, the conference call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Tom Alzin. Please go ahead.

Speaker #1: Ladies and gentlemen, welcome to the publication of the half-yearly financial report 2026 Analysts Conference call. I am Hilly, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded.

Speaker #1: The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone.

Speaker #1: For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Tom Alzin.

Speaker #1: Please go ahead.

Speaker #2: Yes, hello, and a warm welcome on behalf of Brigitte and myself. On what was a very busy, but I’m satisfying, quarter. So, we are busy because we signed seven transactions. We bought three companies and exited four, which is quite a high number in terms of activity.

Tom Alzin: Yes, hello, and a warm welcome on behalf of Brigitte and myself, on what was a very busy, but unsatisfying quarter. We busy because we signed seven transactions. We bought three companies, exited four, which is quite a high number in terms of activity. I'm very pleased also that especially two out of the three investments were acquired through bilateral transactions, not providing for necessarily much cheaper entry points, but certainly for much better due diligence and a better process and more thorough due diligence. On the new investment front, also given the backdrop of the German economy, we focus really on scalable business models and structurally growing markets. On the negative side, our existing portfolio was significantly impacted by strong negative multiple effects. We will come to that later in the presentation here.

Speaker #2: And I'm very pleased also that especially two out of the three investments were acquired through bilateral transactions, not providing for necessarily much cheaper entry points, but certainly for much better due diligence and a better process, and more thorough due diligence.

Speaker #2: On the new investment front, also given the backdrop of the German economy, we focus really on scalable business models and structurally growing markets. And on the negative side, our existing portfolio was significantly impacted by a strong negative multiple effect.

Speaker #2: So we will come to that later in the presentation here. We distributed 26 million to shareholders through dividend, a mix of dividends and buybacks, as we also intend to do it going forward, although no new share buyback program has yet been decided.

Tom Alzin: We distributed EUR 36 million to shareholders through a mix of dividends and buybacks, as we also intend to do it going forward, although no new share buyback program has yet been decided. We updated our guidance on the downside on the back of a very tough H1, where as of now it would not be prudent to keep holding on the existing guidance, which was deemed conservative, but unfortunately was not conservative enough. What does that mean in numbers? We distributed, as I said, EUR 26 million as dividends and buybacks. On the next slide, you see that's roughly EUR 1.5 per share. Given it combined with the decline in multiples, our NAV per share has come down from EUR 36 to EUR 33.65. On the NAV, our NAV stood at EUR 580 million.

Speaker #2: We updated our guidance on the downside on the back of a very tough first half of the year, whereas as of now, it would not be prudent to keep holding on the existing guidance, which was deemed conservative but unfortunately was not conservative enough.

Speaker #2: What does that mean in numbers? So we distributed, as I said, €26 million in dividends and buybacks. On the next slide, you see that's roughly €1.51 per share.

Speaker #2: Give it combined with a decline in multiples our NAV per share has come down from 36 to 33.65. On the NAV, our NAV, so that's 580 million.

Tom Alzin: The only bright side is that we have continued to increase our assets under management of the back of the Solvares continuation fund. Our assets under management have increased to EUR 2.9 billion, small number. You don't see it yet in the EVT in Fund Investment Services because also here H1 was hampered by the placement fees and setup fees for the Solvares continuation fund. This effect will not be recurring in the second half of quarter. That's combined with strict cost control, one of the reasons why we increased our guidance on the Fund Investment Services side. Nevertheless, group income for the H1 is a very unsatisfying EUR -34 million or minus nearly EUR 2 per share. You see on the slide with the sector diversification, you see that IT services and software, against the backdrop in valuation, has increased to 28%.

Speaker #2: The only bright side is that we have continued to increase our assets under management off the back of the Survival Continuation Fund. Our assets under management have increased to €2.9 billion—a small number.

Speaker #2: You don't see it yet in the EBITDA in fund investment services, because also here, the first half was shaped by the placement fees and setup fees for the Survival Continuation Fund.

Speaker #2: This effect will not be recurring in the second half of the quarter, and that's combined with strict cost control—one of the reasons why we increased our guidance on the fund investment service side here.

Speaker #2: Nevertheless, group income for the first half of the year is a very, very satisfying—very unsatisfying—negative €34 million, or minus nearly €2 per share. Given, you see on the slide with the sector diversification, you see that IT services and software, against the backdrop in valuation, has increased to 28%.

Tom Alzin: That's given the most recent continuation fund in Solvares, so top up there, and our investment in MAIT, which has kicked in. Also on the back of what continues to be very strong earnings in that sector, that has to be said. Nevertheless, I reiterate it time and time again, we want to continue and intend to do so to maintain a diversified portfolio by sector. Also you see the entrance of Hipp coming in and pushing our healthcare forward. As a rule of thumb, any new investment is roughly around 3% to 5%. The numbers can move quickly and we want to keep it below 30. I must say with a pinch of salt that I feel if we only see multiple stabilizing in the IT software and services space, our exposure could grow to 30 plus, given the strong earnings trajectory there.

Speaker #2: That's given the most recent continuation fund in Solvaris, the top-up there, and our investment in Mate, which has been kept in. And also, on the back of what continues to be very strong earnings in that sector, that has to be said.

Speaker #2: Nevertheless, I reiterated time and time again, we want to continue and intend to do so to maintain a diversified portfolio by sector. So also you see the entrance of HIP coming in and pushing our healthcare forward as a rule of thumb.

Speaker #2: Any new investment is roughly around 3% to 5%. So the numbers can move quickly, and we want to keep it below 30. I must say, with a pinch of salt, that I feel if we only see multiples stabilizing in the IT software and services space, our exposure could grow to 30-plus.

Speaker #2: Given the strong earnings trajectory there, we don't intend to increase our exposure right now through new deals, but we still see very strong performance in that space.

Tom Alzin: We don't intend to increase our exposure right now through new deals, but we still see very strong performance in that space. Once multiple stabilizes, we could see an increase here going forward. That's just as my personal five cents on how I feel the portfolio. In terms of diversification, in terms of numbers, you see that the top five make 35%. We are in the market with Cartonplast out there, and also maybe freiheit.com is earmarked for a later exit this year. congatec and Itelyum feel like strong exit candidates for 2027, although it's still early to say. We feel that this concentration is temporary, and it has really grown in an organic way because some clear winners have shown strong performance and thus a significant wealth increase, yeah. We did a new long-term investment, very small one in Bug Bounty.

Speaker #2: And once multiple stabilizes, we could see an increase here going forward. So that's just as my personal five cents on how I feel the portfolio.

Speaker #2: In terms of diversification, in terms of numbers, you see that the top five make up 35%. We are in the market with Carbon Plus out there, and also maybe FlyHigh.com is earmarked for a later exit this year.

Speaker #2: So, Conga Tech and Italian feel like strong exit candidates. For 2027, although it's still early to say, we feel that this concentration is temporary and has really grown in an organic way because some clear winners have shown strong performance and thus significant wealth increase.

Speaker #2: We did a new long-term investment, very small one, but bounty it's a bit unusual. It's a series B investment in a profitable venture but still a gross series companies profitable.

Tom Alzin: It's a bit unusual. It's a Series B investment in a profitable venture, but still a growth series. The company is profitable. It's the clear market leader for penetration tests and ethical hacking in Switzerland. We also, for example, the National Cyber Security Centre of Switzerland is a key client, but also a lot of banks. We think that the product is great, the team is great, and we expect also across our existing portfolio of 37 companies, some cross-benefits being engaged into this company. Let's see, it was a EUR 7 million investment in total, so nothing spectacular. If things come together, it should have a very asymmetric payoff, yeah. On the DBAG ECF IV side, we invested in TNL Group. TNL is a leading planning platform focused on the energy industry or train infrastructure.

Speaker #2: It's the clear market leader for penetration tests and ethical hacking in Switzerland. We also, for example, the national cybersecurity agency of Switzerland is a key client, but also a lot of banks we think that the product is great.

Speaker #2: The team is great, and we also expect, across our existing portfolio of 37 companies, some cross-benefits being engaged into this company. So, let's see.

Speaker #2: It was 7 million euro investment in total. So nothing spectacular. But if things come together, it should have a very asymmetric payoff here. On the ECF4 side, we invested in TNL Group.

Speaker #2: TNL is a leading spending platform focused on the energy industry or train infrastructure. So for example, if you want to buy to get permits for a new energy line or a train track, you have to have an environmental study.

Tom Alzin: For example, if you want to get permits for a new energy line or a train track, you have to have an environmental study, and that's what these kind of folks do. Very defensive business, still very nicely growing. We see also a very fragmented market here, which should leave us with a lot of room to grow via an organic buy and build. We identified it through our own network, did it in a bilateral way, and it's a clear primary transaction signed in May 2026, where we are very pleased that we have been able to do that, yeah. Let's see. I think this will be a very pleasant one going forward. Moving over to the numbers and give you more granularity on the NAV, the walkthrough to the NAV per share development.

Speaker #2: And that's what these kind of folks do. Very defensive business, still very nicely growing. We also see a very fragmented market here, which should leave us with a lot of room to grow via anorganic buy and build.

Speaker #2: We identified it through our own network, did it in a bilateral way, and it's a clear primary transaction signed in May 2026. We are very, very pleased that we have been able to do that here.

Speaker #2: Let's see. But I think this will be a very pleasant one going forward here. Now moving over to the numbers and give you more granularity on the NAV.

Speaker #2: The walkthrough to the NAV, the share development. As we said, net negative income of minus €2.7 in the first half of the year. The buybacks and dividends of €1.5 per share would add up synthetically to the NAV, always equal to 35.216.

Tom Alzin: As we said, net negative income of -2.7 in H1. The buybacks and dividends of EUR 1.5 per share, which add up synthetically the NAV all else equal to EUR 35.216. Nevertheless, I think the more telling is on the next slide. You see that we have had a healthy development in terms of additional sales disposal. We continue to generate liquidity. The company is itself in a very strong position to take advantage of what is a complicated but also interesting environment. Not to sell, definitely not, but to buy. I am happy that we already did the disposals of duagon and Kraft & Bauer.

Speaker #2: Nevertheless, I think the more telling information is on the next slide. You see that we have had a healthy development in terms of additions versus disposals.

Speaker #2: So we continue to generate liquidity, to put the company itself in a very strong position to take advantage of what is a complicated but also interesting environment—not to sell.

Speaker #2: Definitely not, but to buy. So I am happy that we already completed the disposals of Dürrgon and Kraft & Bauer. In terms of the earmarked exits of Carbon Plus and Fly Height, given the very complicated environment, I think we have marked them cautiously.

Tom Alzin: In terms of the earmarked exits of Cartonplast and freiheit.com, given the very complicated environment, I think we have marked them cautiously, but I would not expect large write-ups and certainly not write-ups in the tune of duagon should we be able to exit them during the course of this year. On the next slide, you see the change in value, and that's for me the most spectacular slide because you see that all in all, on a net basis, our companies have had a positive change in earnings. Earnings are growing. Some of that has been based or fueled by an organic M&A and also a change in debt, which was running against this earning increase. Nevertheless, the operating performance through the portfolio has been positive and especially positive in the IT and software services space, I must say.

Speaker #2: But I would not expect large write-ups, and certainly not write-ups in the tune of Duergon, should we be able to exit them during the course of this year.

Speaker #2: On the next slide, you see the change in value. And that's, for me, the most spectacular slide, because you see that, all in all, on a net basis, our companies have had a positive change in earnings.

Speaker #2: So earnings are growing. Some of that has been based on, or fueled by, inorganic M&A. Hence, there was also a change in debt, which was running against this earnings increase.

Speaker #2: Nevertheless, the operating performance throughout the portfolio has been positive—and especially positive in the IT, software, and services space, I must say.

Speaker #2: But nevertheless, multiples especially in that peer group and also in the industrial tech peer group where Conga Tech sits have hampered positive development for DBAG shareholders and our LPs for the time being.

Tom Alzin: Nevertheless, multiples, especially in that peer group and also in the industrial tech peer group where congatec sits have hampered positive development for DBAG shareholders and our LP for the time being. Let's see. I think multiples have come down quite a lot, but it's too early to tell. We had some reverse movement already from March to April, and then software continued to trend downwards. I will not take any view here. We focus on increasing our earnings, and then let's see what the market will do in the next four years. We have provided also more granularity, as we usually don't tend to do, on what this means of our peer groups.

Speaker #2: Let's see. I think multiples have come down quite a lot. In. But it's too early to tell. We had some reverse movements already in from March to April and then software continued to pure play software.

Speaker #2: I'm talking continued to trend downwards, so I will not take any view here. We focus on increasing our earnings, and then let's see what the market will do in the next four years.

Speaker #2: We have provided also more granularity, as we usually don't tend to do, on what this means for our peer groups. And you see it's a very distinct way, with one very negative outlier.

Tom Alzin: You see this is a very distinct way with one very negative outlier, meaning the -33% development in the software and IT services space, at least to our peer group, which is also, to be fair, a bit narrower than a broader iShares sector peer group in that space. That adds a bit even more to the folder. That's where we start. All in all, yes, definitely, stock market has been quite positive, but nevertheless, we have seen quite a negative decline here, especially in one insulated segment. Coming over to the Fund Investment Services, as I said, nothing spectacular here. Earnings would have grown, but if it would not have been for the placement agency for the vast continuation fund, that is now done, and this effect will not be repeated in H2, we should see an increase in earnings there.

Speaker #2: Meaning the minus 33% development in the software and IT services space—at least to our peer group, which is also, to be fair, a bit narrower than a broader iShares sector peer group in that space.

Speaker #2: So, that adds a bit even more to the fall there, but that's where we start. So, all in all, yes, definitely the stock market has been quite positive.

Speaker #2: But nevertheless, we have seen quite a negative decline here, especially in one isolated segment. Coming over to the fund investment services, as I said, nothing spectacular here.

Speaker #2: Earnings would have grown if it had not been for the placement agencies for the vast continuation fund. That is now done, and this effect will not be repeated in the second half.

Speaker #2: So we should see an increase in earnings there. On the next slide, you also see that given our disposables, we have a very good financial and healthy basis.

Tom Alzin: On the next slide, you also see that given our disposals, we have a very good financial and healthy basis, and I'll continue to actively look for new opportunities so as to roll out a bit to profit from the still interesting investment environment. Coming to the guidance and outlook, we sit at a very unsatisfactory NAV per share of EUR 33.6 million per 13 June. Our old guidance, which was conservative, expected 36 to 40. We took that down to 32 to 36. It is what it is. It's personally a huge disappointment, but we will continue to fight and keep a growing earnings space, which should be the fundamental diagnosis of our investments. On the Fund Investment Services side, as I said, our old guidance was EUR 5 to 9 million.

Speaker #2: And we continue to actively look for new opportunities so as to roll out a bit to profit from the still interesting investment environment here.

Speaker #2: So, coming to the guidance and outlook. We sit at a very unsatisfactory NAV per share of €33.6 as of 13 June.

Speaker #2: Our old guidance, which was conservative, expected 36 to 40. We took that down to 32 to 36. It is what it is. I mean, it's a personally huge disappointment, but we will continue to fight and keep a growing earnings base, which should be the fundamental guidance of our investments.

Speaker #2: On the EBITDA investment fund size, I said our old guidance was 5 to 9 million. There we see expect now 9 to 11 million also on the basis of cost control and a bit growth in our assets under management.

Tom Alzin: There we expect now EUR 9 to 11 million also on the basis of cost control and a bit growth in our assets under management. With that, I would already conclude our call and leave it open for questions where I feel you obviously have probably quite a lot to ask.

Speaker #2: With that, I would already conclude our call and leave it open for questions, where I feel you obviously probably have quite a lot to ask.

Speaker #1: We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Stefan Schwarz from SRC Research GmbH. Please go ahead.

Speaker #1: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two.

Speaker #1: Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Stefan Schwarz from SRC Research GmbH.

Speaker #1: Please go ahead.

Speaker #3: Yeah, good morning, Tom. This is Stefan from SRC Research. I have one question about the topic of exits. If you look at Fund Seven, there were some transactions in 2019—NVIDIA, CloudFlight, and Carbon Plus.

Stefan Schwarz: Yeah. Good morning, Tom. Here is Stefan from SRC Research. I have one question about the topic of exits. If you look at the Fund VII, there were some transactions in 2019, evidia, Cloudflight, and Cartonplast, all firms now about 7 years in your portfolio. evidia is not so big in terms of stake, but in terms of revenues, the company has almost EUR 500 million. What can we expect in general and in particular from Fund VII in terms of exits in, let's say, the next 6 or 12 months?

Stefan Scharff: Yeah. Good morning, Tom. Here is Stefan from SRC Research. I have one question about the topic of exits. If you look at the Fund VII, there were some transactions in 2019, evidia, Cloudflight, and Cartonplast, all firms now about 7 years in your portfolio. evidia is not so big in terms of stake, but in terms of revenues, the company has almost EUR 500 million. What can we expect in general and in particular from Fund VII in terms of exits in, let's say, the next 6 or 12 months?

Speaker #3: All firms are now about seven years in your portfolio. And, okay, NVIDIA is not so big in terms of stake, but in terms of revenues, the company has almost $500 million.

Speaker #3: So, what can we expect in general and in particular from Fund Seven in terms of exits in, let's say, the next 6 or 12 months?

Speaker #2: We're looking to NVIDIA is only a stop. So we sold the majority of our investment to EQT already several years ago. And we reinvested I think 20% of our proceeds roughly.

Tom Alzin: evidia is only a stop, so we sold the majority of our investment to EQT already several years ago. We reinvested, I think, 20% of our proceeds, roughly. I think EQT will have two to three more years before exiting this investment. Here we are no longer in the driver's seat. Nevertheless, it's developing well, and we feel comfortable with that investment. Our money will be tied up for a bit longer than expected. In terms of otherwise, KEF and Cartonplast are firmly in the market, and we're trying our best to sell this. Especially for KEF, selling a German mechanical engineering company is quite difficult this year, given that everybody thinks that China will dominate any market. People and potential buyers are acting very cautiously, which makes the sale very difficult.

Speaker #2: I think EQT will have two to three more years before exiting this investment. But here we are no longer in the driver's seat. Nevertheless, it's developing well.

Tom Alzin: Here we are no longer in the driver's seat. Nevertheless, it's developing well, and we feel comfortable with that investment. Our money will be tied up for a bit longer than expected. In terms of otherwise, KEF and Cartonplast are firmly in the market, and we're trying our best to sell this. Especially for KEF, selling a German mechanical engineering company is quite difficult this year, given that everybody thinks that China will dominate any market. People and potential buyers are acting very cautiously, which makes the sale very difficult.

Speaker #2: And we feel comfortable with that investment, but our money will be tied up for a bit longer than expected. In terms of other matters, Test and Carbon Plus are firmly in the market.

Speaker #2: And we're trying our best to sell this, especially for KEF. Selling machinery for a mechanical engineering company in Germany, or a German mechanical engineering company, is quite difficult this year, given that everybody thinks that China will dominate any market.

Speaker #2: And so people and potential buyers are acting very, very cautiously, which makes the sale very difficult.

Stefan Schwarz: Okay. Can you say a bit more also about Braun Connectivity? Because this is a company.

Speaker #3: Okay, okay. Can you say a bit more also about Braun Connectivity? Because this is a company.

Stefan Scharff: Okay. Can you say a bit more also about Braun Connectivity? Because this is a company.

Tom Alzin: Yes. Unfortunately, Braun Connectivity has left our portfolio in just two weeks ago, through insolvency, but it was market zero for us already.

Speaker #2: Yes, unfortunately, Brown Connectivity has left our portfolio just two weeks ago due to insolvency, but it was already marked zero. So, okay.

Stefan Schwarz: Okay. Just because of the difficult situation in German car industry, I guess.

Stefan Scharff: Okay. Just because of the difficult situation in German car industry, I guess.

Speaker #3: Just because of the difficult situation in the German car industry, I guess.

Speaker #2: Yeah. For a long time already, Brown had only option value for us.

Tom Alzin: Yeah. For a long time already, Braun had only option value for us.

Speaker #3: Oh, okay. Okay. Is there some burden to come in the second half of the year due to the Brown case? Oh, okay. Okay.

Stefan Schwarz: Okay. Is there some burden to come in H2 due to the Braun case?

Stefan Scharff: Okay. Is there some burden to come in H2 due to the Braun case?

Tom Alzin: No.

Stefan Schwarz: Okay. Also there's a healthcare company from 2017 in your portfolio. It's named POLYTECH. It's the breast and body implants topic.

Stefan Scharff: Okay. Also there's a healthcare company from 2017 in your portfolio. It's named POLYTECH. It's the breast and body implants topic.

Speaker #3: And also, there's a healthcare company from 2017 in your portfolio. It's named Polytech. It's the breast and body implants topic. How is this case going?

Tom Alzin: Yeah.

Stefan Schwarz: How is this case going?

Stefan Scharff: How is this case going?

Speaker #2: Very nicely. I don't want to go into too much detail. But the company is on track for record earnings, double digit growth. EBITDA margin is north of 20%.

Tom Alzin: Very nicely. I don't want to go into too much detail, but the company is on track for record earnings, double-digit growth. EBITDA margin is north of 20%. Nevertheless, you're right, it's about time to let it go, yeah.

Speaker #2: But nevertheless, you're right. It's about time to let it go, yeah.

Stefan Schwarz: Okay. If you buy in the H2, it will be again in the topics of, let's say, healthcare like you did with the good transaction on Hipp, or also in this area of cybersecurity or IT services?

Stefan Scharff: Okay. If you buy in the H2, it will be again in the topics of, let's say, healthcare like you did with the good transaction on Hipp, or also in this area of cybersecurity or IT services?

Speaker #3: Okay, okay. And if you buy in the second half of the year, will it be again in the areas of, let's say, healthcare, like you did with the good transaction on HIP, or also in the area of cybersecurity or IT services?

Tom Alzin: No, not so much IT services. More, well, let's say IT, as I said, I already feel that organically our sector exposure will increase, given that we still see very good earnings in that space, yeah.

Speaker #2: No, not so much IT services. More, well, let’s say AC, but I don’t want to—as I said, I already feel that, organically, our sector exposure will increase, given that we still see very good earnings in that space, yeah.

Speaker #2: I mean, all of our companies in that space are ahead of their business plan for this year. So despite the valuation contraction, yeah.

Tom Alzin: I mean, all of our companies in that space are ahead of their business plan for this year.

Tom Alzin: Despite the valuation contraction, yeah.

Speaker #3: Okay.

Stefan Schwarz: Okay.

Stefan Scharff: Okay.

Tom Alzin: Companies in consulting business like TNL is something we like. We're also looking a bit more into B2B services. Let's see.

Speaker #2: But companies in the consulting business, like TNL, are something we like. We're also looking a bit more into B2B services. So let's see.

Tom Alzin: Companies in consulting business like TNL is something we like. We're also looking a bit more into B2B services. Let's see.

Speaker #3: Okay, I see. So it's.

Stefan Schwarz: Okay, I see.

Stefan Scharff: Okay, I see.

Speaker #2: There's nothing we intend to sign in the next couple of weeks. The acquisition side.

Tom Alzin: There's nothing we intend to sign in the next couple of weeks.

Stefan Schwarz: Okay

Stefan Scharff: Okay

Tom Alzin: On the acquisition side.

Speaker #3: Okay, okay. That's nice. Yeah, I think it's more a valuation topic now because if most companies are doing well, the valuations will come back.

Stefan Schwarz: Okay. That's nice. Yeah, I think it's more a valuation topic now because if most companies are doing good, the valuations will come back. Then you can also perhaps increase your guidance later the year or at the beginning of next year.

Stefan Scharff: Okay. That's nice. Yeah, I think it's more a valuation topic now because if most companies are doing good, the valuations will come back. Then you can also perhaps increase your guidance later the year or at the beginning of next year.

Speaker #3: So then you could also perhaps increase your guidance later this year or at the beginning of next year.

Tom Alzin: I'm not sure. Honestly, I'm not sure if valuations will come back, because just all the AI models like Mistral or ChatGPT, they just have the hype vibe on their side. Every time they release a new model, there's a scare running through the software sector. I think for some time until we see clearer what AI ultimately can do and cannot do, we will be capped, I think, in terms of valuation there. I don't expect valuations jumping back sharply. I mean, it would be very nice. It's not my base case expectation.

Speaker #2: I'm not sure. Honestly, I'm not sure if valuations will come back, because just all the AI models, like Midjourney or ChatGPT, they just have the hype vibe on their side.

Speaker #2: And every time they release a new model, there's a scare running through the software sector. So I think for some time, until we see clearer what AI ultimately can do and cannot do, we will have some sort of—we will be capped, I think, in terms of valuation there.

Speaker #2: So I don't expect valuations to jump back sharply. I mean, it would be very nice, but it's not my base case expectation. And so we continue to focus on what we can influence—namely, increasing sales and earnings at our companies.

Tom Alzin: We continue on what we can influence, increasing sales and earnings from our companies.

Stefan Schwarz: I know. It is a bit difficult. Ask the SAP shareholders about their feelings the last quarters. Let us see. It is not easy to see if their valuations come back in the software area or not. Thank you.

Speaker #3: know. I know. It's a bit difficult. Ask the SAP shareholders about their feelings the last quarters. So yeah, let's see. It's not easy to see if their valuations come back in the software area or not.

Stefan Scharff: I know. It is a bit difficult. Ask the SAP shareholders about their feelings the last quarters. Let us see. It is not easy to see if their valuations come back in the software area or not. Thank you.

Speaker #3: Yeah. Thank you.

Operator: The next question comes from the line of Milosz Papst from Edison Group. Please go ahead.

Speaker #1: The next question comes from the line of Milos Pars from Edison Group. Please go ahead.

Speaker #4: Hi, good morning. Thank you for the presentation. I have only one question, but it's quite broad-based, I would say. Can you give us a sense of the share of overseas revenues across your portfolio, maybe by sector?

Milosz Papst: Hi. Good morning. Thank you for the presentation. I have only one question, but it is quite broad-based, I would say. Can you give us a sense of the share of overseas revenues across your portfolio, maybe by sector? I mean, I understand that, of course, mid-market companies tend to have great exposure to domestic market, but maybe you could give us a sense of the potential for growth in international revenues for some of the sectors where maybe, especially those where maybe you feel that there is not so much structural growth in the local market. Thank you.

Speaker #4: I mean, I understand that, of course, mid-market companies tend to have great exposure to domestic market, but maybe you could give us a sense of the potential for growth in international revenues for some of the sectors where maybe especially those where maybe you feel that there is not so much structural growth in the local market.

Speaker #4: Yep, thank you.

Speaker #2: Yeah, I think that a fair answer is that we have moved from a very international company. Like 10 years ago, we had a lot of exposure to engineering and automotive, quite frankly.

Tom Alzin: Yeah. I think the fair answer is that we have moved from a very international company when we, like 10 years ago, we had a lot of exposure to engineering and automotive. Quite frankly, we had much more international revenues than we do have today, especially in the software, but also B2B side. Well, software, Volaris is fully international, but otherwise it's a lot of domestic market. I don't have the right number, but I think that roughly 80% of our revenues ballpark should be German-centric. Yeah. It'd be perfect. Thank you.

Speaker #2: We had much more international revenue than we do today, especially in software, but also on the B2B side. Well, software is also fully international, but otherwise, it's a lot of domestic market.

Speaker #2: So, I don't have the right number, but I think that, roughly, 80% of our revenues, ballpark, should be German-centric.

Speaker #4: Okay, perfect. Thank you.

Speaker #1: As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Gerhard Schwarz from Baader Bank.

Operator: As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Gerhard Schwarz from Baader Bank. Please go ahead.

Speaker #1: Please go ahead.

Speaker #3: Yes, thank you for taking my questions. I got two, actually. The first one would be on bug bounty. We had this kind of scandal over the last couple of days in Liechtenstein that a lot of data has been stolen by hackers.

Gerhard Schwarz: Yes, thank you for taking my questions. I got two, actually. The first one would be on Bug Bounty. We had this kind of scandal over the last couple of days in Liechtenstein that a lot of data has been stolen by hackers. Is this something that's good for Bug Bounty, or is Liechtenstein a client of Bug Bounty already and they have been passed in their security efforts? What's the role here of Bug Bounty? That would be my first question. The second question would be on the portfolio valuation side. In the past, you had a slide or a table where you showed the portfolio valuation relative to acquisition costs. That's no longer there. When we look at the growth sectors and in particular at the software and IT services segment, are we trading now the portfolio value above acquisition costs or below? Thank you.

Speaker #3: Is this something that's good for bug bounty, or are they is Liechtenstein a client of bug bounty already, and they have been passed in their security efforts?

Speaker #3: So what's the role here of bug bounty? That would be my first question. The second question would be on the portfolio valuation side. In the past, you had a slide or a table where you showed the portfolio valuation relative to acquisition cost.

Speaker #3: That's no longer there. When we look at the growth sectors, and in particular at the Software and IT Services segment, are we now trading in the portfolio value above acquisition costs or below?

Speaker #3: Thank you.

Speaker #2: I think on the software side, we're still trading above acquisition costs, but we will follow up laterally. But it's also, yeah, no, definitely above acquisition costs.

Tom Alzin: I think on the software side, we still are trading above acquisition costs, but we will follow up bilaterally. It's definitely above acquisition costs. We will provide you on the back to that. As for the other slide, we're looking into it. We could reintegrate it. That's no big issue. Regarding Bug Bounty, the Liechtenstein company has not been a client of ours. Yes, these kind of headlines tend to help Bug Bounty, definitely, yeah. Especially financial services, insurance companies are using their services.

Speaker #2: But we will provide you feedback on that. And as for the other slide, we're looking into it. We could reintegrate it; that's no big issue.

Speaker #2: Regarding bug bounty, the Liechtenstein company has not been a client of ours. And yes, these kinds of headlines tend to help bug bounty, definitely, yeah.

Speaker #2: So, especially in financial services, bug bounty programs are expensive. And especially financial services and insurance companies are using these services here.

Speaker #3: Okay, thank you.

Gerhard Schwarz: Okay. Thank you.

Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Tom Alzin for any closing remarks.

Speaker #1: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Tom Alzin for any closing remarks.

Tom Alzin: Yes, as I said, a very unsatisfactory quarter. We were very busy, sometimes you don't get paid for that. We will not complain. We will double down our efforts on keeping increasing sales and earnings until this type of war has abated and continue to generate nice opportunity which like HIP or especially also TNL, I have very high conviction of having deployed money in a very accretive way. Let's see.

Speaker #2: Yes, as I said, very unsatisfactory quarter. We were very busy, but sometimes you don't get paid for that. We will not complain. We will double down our efforts on keeping increasing sales and earnings until the takeoff war has abated, and continue to generate lines of opportunity which, like HIP or especially also TNL, I have very high conviction of having deployed money in a very accretive way, but let's see.

Speaker #1: Ladies and gentlemen, the conference is now over. Thank you for choosing Coverage Call, and thank you for participating in the conference. You may now disconnect your lines.

Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Conference Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.

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Half Year 2026 Deutsche Beteiligungs AG Earnings Call

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