COMPANY PRESENTATION

Transcription

1 COMPANY PRESENTATION

2 COMPANY # Equity Story Deutsche EuroShop is Germany s only public company that invests solely in shopping centers Shopping centers are attractive investments because of Continuously positive development of rents Stable long term growth Prime locations High quality standards Deutsche EuroShop does not seek short-term success, but rather long-term growth and the resulting stable increase in the value of the portfolio

3 COMPANY # 2 At a Glance 2 shopping centers on high street and in established locations 7 in Germany and one each in Austria, Czech Republic, Hungary and Poland 207 portfolio valuation: approx. 4.93% net initial yield (after transaction costs) Professional center management by ECE, the European market leader in this industry Lettable space Approx.,087,000 sqm Retail shops Approx. 2,700 Market value approx. 5. billion (DES-share 4. bn.) Rents per year 296 million (DES-share 233 mn.) Occupancy rate, 2 99% Avg. GLA per DES-center: inner city 40,400 sqm est. locations 99,900 sqm 00%-view ² as % of rental space

4 COMPANY # 3 Key Figures REVENUE m +2.9% EBIT m +2.7% FFO m +7.% 28,5 77,5 76,3 78,6 92,4 20,5 23,4 29, ,8 202,9 205, NUMBER OF SHARES mn +2.6% DIVIDEND PER SHARE +3.7% NAV PER SHARE (EPRA) +9.2% 53,95 53,95 53, , ² 33,7 39,58 43, , Compound Annual Growth Rate (CAGR) 2 proposal 3 weighted, taking into account the fact that the convertible bond was nearly fully converted at the end of its term

5 COMPANY # 4 Lease System 0 years lease No break-up option Turnover-linked rents Minimum rents are CPI-linked Avg. retail space rent per sqm and year: 270 Avg. turnover per sqm and year (productivity) in DES German shopping centers: 3,960,2 (avg. German retail: 3,489, avg. German shopping centers: 3,933),3 Rent-to-sales-ratio: 7.5.5% Weighted maturity of rental contracts: 5.5 years LIKE-FOR-LIKE REVENUE 3% 2% % 0% -% German inflation avg..3% DES like-for-like revenue avg..5% Status: 3 Dec excl. VAT 3 Source: GfK Geomarketing

6 COMPANY # 5 Targets Long term net asset value enhancement Stable and attractive dividends Main focus on NAV and dividend Investment-focus: at least 75% Germany and up to 25% Europe Dividend yield: currently 4.7% Buy & hold -strategy, continuous growth Portfolio extension By acquisition of new shopping centers By increasing existing amounts of holdings By expansion of portfolio centers

7 SHOPPING CENTERS # 6 German prime shopping center yields E % COMPRESSION DECOMPRESSION POLARISATION COMPRESSION Passau 5.5% A0 6.5% Billstedt 6.0% Magdeburg 5.9% Norderstedt 6.% Dresden 5.4% Neunkirchen 5.0% Forecast Brno 5.0% 4 German shopping center prime yields 3 2 Euro Swap Rate Source: JLL, EUR Midswaps 7 years

8 SHOPPING CENTERS # 7 Acquisition of Olympia BRNO Deutsche EuroShop acquired 00% of the shares in Olympia SPV from Rockspring and ECE European Prime Shopping Centre Fund I (50% each) Closing: 3 March 207 Total investment: approx. 382 million, net purchase price excl. debt of SPV and excl. acquisition costs: approx. 207 million Financing by long term debt (approx. 27 million, 57%) and proceeds of capital increase (approx. 65 million, 43%) Annualised rents 207: 20. million NOI yield: 5.%, net initial yield: 5.0% The SPV is fully consolidated as of 3 March 207

9 SHOPPING CENTERS # 8 Success factors of a modern shopping center LOCATION More than 70 million customers per year ASSET MANAGEMENT ECE, a leading center manager in Europe CONVENIENCE At Your Service program started TENANT MIX Food Courts and popular tenants AMBIENCE Mall Beautification program started DIGITALIZATION LOGISTICS Click & Collect, Digital Mall Center Apps, Future Lab

10 SHOPPING CENTERS # 9 Investments: Mall beautification & convenience Design studies

11 FINANCIALS # 0 Investments: Capex covered by FFO 00% 90% ,60 2,40 2,20 2,00 Concentration of At-your-service program in 208/9 80% 70% 60%,80,60,40,20,00 0,80 0,60 Balance Budgeted capex Principal payments Dividend Payout ratio Expected for : million per year on avg million per year on avg increase per year (guidance until 209) 50% Payout ratio in % 40% * 208* 209* 0,40 0,20 FFO per share 0,00 in -0,20 * Forecast dividend per share: proposal

12 SHOPPING CENTERS # Germany CITY- ARKADEN ALLEE- CENTER BILLSTEDT- CENTER PHOENIX- CENTER HEROLD- CENTER STADT- GALERIE A0 CENTER ALTMARKT- GALERIE ALLEE- CENTER FORUM MAIN- TAUNUS- ZENTRUM RHEIN- NECKAR- ZENTRUM Wolfsburg Hamm Wuppertal Kassel Wetzlar Neunkirchen Norderstedt Hamburg Hameln Sulzbach/Frankfurt Viernheim/Mannheim Wildau/Berlin Magdeburg Dessau Dresden RATHAUS CENTER CITY- GALERIE CITY- POINT SAARPARK- CENTER Passau STADT- GALERIE

13 SHOPPING CENTERS # 2 Europe OLYMPIA GALERIA BAŁTYCKA CITY ARKADEN ÁRKÁD Gdansk Poland Brno Czech Republic Klagenfurt Austria Pécs Hungary

14 SHOPPING CENTERS # 3 Our Tenants Selection of our well known tenants

15 SHOPPING CENTERS # 4 Tenants Structure Top 0 Tenants LOW LEVEL OF DEPENDENCE ON THE TOP 0 TENANTS H&M 3.5% 3.6% Ceconomy² 2.7% Deichmann 2.5% 2.0% Peek & Cloppenburg 2.3% 2.2% New Yorker 2.3% 2.4% C&A 2.0%.9% Douglas.8% 2.0% Metro².7% Rewe.6%.7% DM.4%.4% Total 2.8% Top 0 tenants 22% Other tenants 78% in % of total rental income as at 3 Dec consumer electronics and the food retail division of Metro AG were demerged in 207

16 SHOPPING CENTERS # 5 Maturity Distribution of Rental Contracts Long-term contracts base rental income Weighted maturity 5.5 years 208: 3% 209: 9% 2020: 6% 2023 et sqq: 49% 202: 2% as % of rental income as at 3 Dec : 2%

17 SHOPPING CENTERS # 6 Sector Mix Balanced sector diversification Non-food/ electronics 9.% Department stores.6% Food 6.3% Health & beauty 6.0% Catering 4.4% Services.6% Fashion 5.% as % of rental space as at 3 Dec. 207

18 FINANCIALS # 7 Key Figures 3M 208 million CHANGE Revenue % Net operating income (NOI) % Earnings before interest and tax (EBIT) % Financial gains / losses % Measurement gains/losses % Earnings before tax (EBT) % Consolidated profit % FFO per share ( ) % EPRA Earnings per share (, undiluted) % million CHANGE Total equity 2, ,574.9 % Liabilities 2, % Total assets 4, ,627.0 % Equity ratio 56.0% 55.6% Loan to value ratio (consolidated) 2 3.5% 32.4% Cash and cash equivalents % including third-party interest in equity 2 Ratio of net financial liabilities (financial liabilities less cash and cash equivalents) to non current assets (investment properties and investments accounted for using the equity method)

19 FINANCIALS # 8 Valuation Investment Properties Net operating yield in % Net initial yield in % SENSITIVITY ANALYSIS in thousand Basis change of -25bps change of +25bps Rent increase rates.47% -28, ,700 Discount rate 5.90% +80,700-75,000 Capitalization rate 5.% +34,300-2,900 Cost ratio 0.4% +3,900-9,300 External appraisers: since 205: JLL

20 FINANCIALS # 9 PAGE XY Loan Structure,2 INTEREST LOCKIN DURATION PRINCIPLE AMOUNTS ( MILLION) SHARE OF TOTAL LOAN AVG. INTEREST RATE Up to year 6.8.% 3.80% to 5 years % 3.75% 5 to 0 years % 2.70% Over 0 years % 2.04% Total 6., % 2.76% 2 German and 4 foreign bank partners 4, Weighted maturity of fixed interest periods 6. years 3,50 3, ,50 2 2,00 % yrs 0 avg. interest rates weighted maturities as of 3 March excl. non-consolidated loans

21 FINANCIALS # 20 Maturities until 2023,2 IN MILLION END OF FIXED INTEREST PERIODS RESPECTIVELY EXPIRING LOANS AVG. INTEREST RATE REGULAR REDEMPTION PAYMENTS TOTAL MATURITIES % % % % % % Already fixed: 7.6m,.63%, 0y (0/208) 32.2m, 2.2%, 0y (08/209) 4.9m,.68%, 6y (0/2020) At-equity consolidated loans IN MILLION END OF FIXED INTEREST PERIODS RESPECTIVELY EXPIRING LOANS AVG. INTEREST RATE DES SHARE % 50% % 50% % 50% Saarpark-Center, Neunkirchen Phoenix-Center, Hamburg, Saarpark-Center, Neunkirchen as of 3 March excl. at-equity consolidated loans

22 FINANCIALS # 2 German Consumer Price Index % since Apr LAST 2 MONTHS +.6% since May Apr-0 Oct-0 Apr- Oct- Apr-2 Oct-2 Apr-3 Oct-3 Apr-4 Oct-4 Apr-5 Oct-5 Apr-6 Oct-6 Apr-7 Oct-7 Apr- Source: Destatis

23 FINANCIALS # 22 Forecast REVENUE m EBT EXCL. VALUATION m FFO m +2.5% +5.9% +4.9% EBIT m NUMBER OF SHARES 2 mn FFO PER SHARE +2.7% +3.4% +.4% Conversion of convertible bond Compound Annual Growth Rate (CAGR) weighted, taking into account the fact that the convertible bond was nearly fully converted at the end of its term in November 207

24 SHARE # 23 Dividend & Performance TREND OF SHARE Dividend,60,50,40,30,20,0,00 0,90,05,05,0,0,20,25,30,35 43, PERFORMANCE 2 3,34 NAV per share Share price ,00 40,00 35,00 30,00 25,00 20,00 5,00 0,00 DES DAX EPRA 4 REX 5 OEF 6 year (207) -8.6% +2.5% +3.4% -.0% +5.5% 3 years +4.% = +.3% p.a. +9.6% p.a. +8.9% p.a. +0.6% p.a. +4.2% p.a. 5 years +28.0% = +5.% p.a. +.2% p.a. +2.4% p.a. +.7% p.a. +2.6% p.a. Since IPO (200) %= +7.6% p.a. +4.2% p.a. +8.2% p.a. +4.2% p.a. +3.4% p.a. respectively paid for the previous FY 2 as of 3 Dec : as of 4 June EPRA/NAREIT Europe 5 German government bonds index 6 Open ended real estate funds 7 paid on 3 July planned proposal

25 SHARE # 24 Shareholder Structure Alexander Otto 7.5% Private Investors 2.9% BlackRock 4.8% Johannes Schorr 3.5% State Street 3.0% US 9% UK 9% Status: 5 June 208 Institutional Investors 49.3% Germany 68% 2,000 shareholders Free float 82.5% FR 3% NL 3% NO 2% CH 3% Other 3%

26 SHARE # 25 Analysts Consensus avg./in EBIT ( million) FFO per share NAV per share Dividend Price target (mean) SELL UNDERPERFORM NEUTRAL OUTPERFORM BUY Kempen & Co. BA Merrill Lynch Commerzbank Deutsche Bank Equinet Green Street Advisors GSC Research J.P. Morgan Cazenove NORD/LB Oddo BHF Baader Bank Bankhaus Lampe Berenberg Bank DZ Bank HSBC Independent Research Kepler Cheuvreux Metzler M.M. Warburg Natixis Societe Generale 00% 80% 60% 40% 20% 0% Q2 04 Q3 05 Q4 06 Q 08 Q2 09 Q3 0 Q4 Q 3 Q2 4 Q3 5 Q4 6 Q 8 negative neutral positive aggregated by DES, median values, status: 5 May. 208, 20 analysts

27 SHARE # 26 0 Reasons to Invest The only public company in Germany to invest solely in shopping centers Prime locations Proven, conservative strategy Stable cash flow with long term visibility Shareholderfriendly dividend policy Experienced management team Excellent track record Centers almost 00% let Inflationprotected rental agreements Solidity combined with growth potential

28 APPENDIX # 27 Key Data of the Share Listed since Nominal capital 6,783, Outstanding shares 6,783,594 Class of shares Registered shares Dividend 207 (proposal).45 52W High W Low Share price (4 June 208) 3.34 Market capitalisation Avg. turnover per day last 2 months (XETRA) Indices Official market OTC market.94 billion 206,400 shares MDAX, EPRA, GPR, MSCI Small Cap, F.A.Z.-Index Prime Standard Frankfurt and XETRA Berlin-Bremen, Dusseldorf, Hamburg, Hanover, Munich and Stuttgart ISIN DE Ticker Market maker DEQ, Reuters: DEQGn.DE Oddo Seydler

29 APPENDIX # 28 Retail turnover 3M 208 RETAIL SECTOR % change in 208 rent-to-sales ratio in % DEPARTMENT STORES FOOD FASHION TEXTILES SHOES & LEATHER GOODS SPORTS HEALTH & BEAUTY GENERAL RETAIL ELECTRONICS SERVICES FOOD CATERING TOTAL ² 00² % of sales % of space Germany Abroad Total Retail turnover development on a like-for-like basis: -0.5% +3.0% +0.2% Absolute retail turnover development: +0.2% +3.6% +0.9% German centers on a like-for-like basis (turnover: 2.2 billion) 2 The sum may not equal the totals due to rounding

30 APPENDIX # 29 Online vs. stationary retail? TURNOVER DISTRIBUTION OF A FASHION RETAILER Pure online purchases Order in shop, dispatch by post Order online, pickup in shop (click & collect) Online search, purchase in shop Pure shop purchases Stationary retail transforms from Point of Purchase to Touch Point (product experience) New store concepts (flagship store, show room, multi-channel store, pick-up store), click & collect, augmented reality, online goes offline, mobile services Location, location, location newly interpreted: Convenience, attractivity & likeability Source: GfK

31 APPENDIX # 30 The customer journey in our Shopping centers Love2shop app center website social media Easy to Park card QR code car finder 3D wayfinding systems indoor navigation InfoGate gift-wrapping and packaging services personal shopper guest card same day delivery service prepaid parking cards cell phone charging stations quiet zones/lounge areas Selfie photo boxes free Wi-Fi Source: ECE

32 APPENDIX # 3 Ecommerce: Growth without end? PROGRESSION OF ONLINE RETAIL TO MARKET MATURITY Source: GfK

33 APPENDIX # 32 Our partner: ECE develops, plans, builds, leases and manages large commercial real estate in the sectors shopping, office, industries since 965 Originally ECE was an abbreviation for the German word Einkaufscenterentwicklung (Shopping center development) 00% privately owned by the Otto family Active in 2 European countries European market leader in the shopping center business Assets under management: approx. 200 shopping centers 7.2 million sqm overall sales area approx. 2,000 retail businesses 4.3 million daily visitors 33.4 billion assets under management MANY INVESTORS RELY ON ECE: Austria Czech Republic Denmark Germany Hungary Italy Lithuania Poland Qatar Russia Slovakia Turkey

34 APPENDIX # 33 Environment Climate protection is a top priority for Deutsche EuroShop. We firmly believe that sustainability and profitability are not mutually exclusive. Neither are shopping experience and environmental awareness. Long-term thinking is part of our strategy, and that includes a commitment to environmental protection. In 207, 9 of our 2 shopping centers had contracts with suppliers that use renewable energy sources, such as hydroelectric power, for their electricity needs. The EnergieVision organisation certified the green electricity for our centers in Germany with the renowned ok-power accreditation in 207. We also plan to switch the remaining centers over to green electricity wherever possible within the next few years. The 9 centers used a total of around 7.6 million kwh of green electricity in 207. This represented 00% of the electricity requirements in these shopping centers, Based on conservative calculations, this meant a reduction of around 25,75 tonnes in carbon dioxide emissions, which equates to the annual CO 2 emissions of more than,00 two-person households. The use of heat exchangers and energy-saving light bulbs allows us to further reduce energy consumption in our shopping centers. Deutsche EuroShop also supports a diverse range of local and regional activities that take place in our shopping centers in the areas of the environment, society and the economy.

35 APPENDIX # 34 Germany /2 MAIN- TAUNUS- ZENTRUM A0 CENTER ALTMARKT- GALERIE RHEIN- NECKAR- ZENTRUM HEROLD- CENTER RATHAUS- CENTER ALLEE- CENTER PHOENIX- CENTER LOCATION Sulzbach/ Frankfurt Wildau/ Berlin Dresden Viernheim/ Mannheim Norderstedt Dessau Magdeburg Hamburg INVESTMENT 52.0% 00% 00% 00% 00% 00% 50.0% 50.0% LETTABLE SPACE SQM 24,000 2,000 77,000 69,500 54,300 52,500 5,300 43,400 PARKING 4,500 4, , ,300,400 NUMBER OF SHOPS OCCUPANCY RATE² 00% 00% 00% 99% 98% 98% 98% 98% CATCHMENT 3. m. AREA inhabitants. m. inhabitants 2. m. inhabitants.5 m. inhabitants 0.5 m. inhabitants 0.5 m. inhabitants 0.8 m. inhabitants 0.6 m. inhabitants VISITORS m m m. 8.0 m m m m m. OPENING/ REFURBISHMENT 964/2004/ / /20 972/ /995/ / /206 approximately ² as % of rental space

36 APPENDIX # 35 Germany 2/2 BILLSTEDT- CENTER SAARPARK- CENTER FORUM ALLEE- CENTER CITY- GALERIE CITY- ARKADEN CITY- POINT STADT- GALERIE STADT- GALERIE LOCATION Hamburg Neunkirchen Wetzlar Hamm Wolfsburg Wuppertal Kassel Passau Hameln INVESTMENT 00% 50.0% 65.0% 00% 00% 00% 00% 75.0% 00% LETTABLE SPACE SQM 42,500 35,600 34,500 34,000 30,800 28,700 27,800 27,700 26,000 PARKING,500,600,700, NUMBER OF SHOPS OCCUPANCY RATE² 95% 99% 98% 99% 98% 99% 00% 00% 97% CATCHMENT.0 m. AREA inhabitants.4 m. inhabitants 0.5 m. inhabitants 0.7 m. inhabitants 0.5 m. inhabitants 0.8 m. inhabitants 0.8 m. inhabitants.2 m. inhabitants 0.4 m. inhabitants VISITORS m m m m. 7.0 m. 8.0 m m m m. OPENING/ REFURBISHMENT 969/977/ /999/ /2003/ / / /2009/ approximately ² as % of rental space

37 APPENDIX # 36 Europe OLYMPIA GALERIA BAŁTYCKA CITY ARKADEN ÁRKÁD LOCATION Brno, Czech Republic Gdansk, Poland Klagenfurt, Austria Pécs, Hungary INVESTMENT 00% 74.0% 50.0% 50.0% LETTABLE SPACE SQM 85,000 48,700 36,900 35,400 PARKING 4,000, NUMBER OF SHOPS OCCUPANCY RATE² 99% 00% 98% 99% CATCHMENT AREA.2 m. inhabitants. m. inhabitants 0.4 m. inhabitants.0 m. inhabitants VISITORS m m m m. OPENING/ REFURBISHMENT 999/ approximately ² as % of rental space

38 APPENDIX # 37 Financial Calendar Deutsche Bank dbaccess Conference, Berlin Roadshow London, Societe Generale Annual General Meeting, Hamburg Half-year Financial Report Berenberg Real Estate Seminar, Helsinki Commerzbank Sector Conference, Frankfurt EPRA Annual Conference, Berlin Goldman Sachs & Berenberg German Conference, Munich Baader Investment Conference, Munich Societe Generale Pan European RE Conference, London Expo Real, Munich Roadshow Madrid, M.M. Warburg Roadshow Paris, Natixis 4.. Quarterly Statement 9M DZ Bank Equity Conference, Frankfurt Berenberg European Conference, Pennyhill

39 APPENDIX # 38 Contact PATRICK KISS Head of Investor & Public Relations WILHELM WELLNER Chief Executive Officer OLAF BORKERS Chief Financial Officer NICOLAS LISSNER Manager Investor & Public Relations Deutsche EuroShop AG Investor & Public Relations Heegbarg Hamburg Tel. +49 (40) / 22 Fax +49 (40) ir@deutsche-euroshop.com Web: ir-mall.com facebook.com/euroshop flickr.com/desag slideshare.net/desag twitter.com/des_ag youtube.com/deutscheeuroshop Important Notice: Forward-Looking Statements Statements in this presentation relating to future status or circum-stances, including statements regarding management s plans and objectives for future operations, sales and earnings figures, are forward-looking statements of goals and expectations based on estimates, assumptions and the anticipated effects of future events on current and developing circumstances and do not necessarily predict future results. Many factors could cause the actual results to be materially different from those that may be expressed or implied by such statements. Deutsche EuroShop does not intend to update these forward-looking statements and does not assume any obligation to do so.