Deutsche EuroShop | Company Presentation | 01/10
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Deutsche EuroShop is Germany's only public company that solely invests in shopping centers. It owns interests in 16 shopping centers located primarily in Germany, but also in Poland, Austria, and Hungary. The company aims to grow its portfolio value and dividends through a buy and hold strategy focused on high-quality shopping centers with long-term leases. Deutsche EuroShop has seen strong and consistent growth in revenue, earnings, funds from operations, and dividends in recent years.
Deutsche EuroShop | Company Presentation | 01/10
- 1. 01/10 feelestate.de Company Presentation “The Third Place”
- 2. Company I Equity Story Deutsche EuroShop is Germany´s only public Pure Player company that invests solely in shopping centers. Shopping centers are attractive investments because of continuously positive development of rents yp p stable long term growth prime locations high q g quality standards y COMPANY PRESENTATION | 01/10 2
- 3. Company I At a Glance 16 shopping centers on high street and in established 16 Centers locations – 12 in Germany, 2 in Poland and one each in Austria and Hungary Lettable space approx. 645,000 sqm Retail shops p approx. 1,675 pp , Market value approx. €2.6 billion Rents per year €167 million Occupancy rate > 99% Portfolio l ti P tf li valuation: 5 64% net i iti l yield 5.64% t initial i ld FFO Yield 2008: approx. 7% Professional center management by ECE, the European market leader in this industry COMPANY PRESENTATION | 01/10 3
- 4. Company I Key Figures Revenue EBIT 98.1 FFO per share 100 120 115.3 1,50 1.45 86.3 95.8 78.5 100 92.9 80 1.08 1.12 80 72.1 57.5 1,00 0.97 60 0.86 61.4 61 4 49.8 49 8 60 40 40 +19%* 0,50 +14%* +17%* 20 20 0 0 0,00 €m 2004 2005 2006 2007 2008 €m 2004 2005 2006 2007 2008 € 2004 2005 2006 2007 2008 EPS 2.92 NAV per share Dividend per share 3,00 28 27.43 1,10 2.74 26.91 2,50 26 25.53 1.05 1.05 1.05 1,05 2.00 2,00 24 1.55 23.11 1.00 1,50 1,00 21.98 22 1,00 0.89 0.96 +22%* 20 +6.0%* 0,95 +2.3%* 0,50 0,00 18 0,90 € 2004 2005 2006 2007 2008 € 2004 2005 2006 2007 2008 € 2004 2005 2006 2007 2008 *2004-2008, Compound Annual Growth Rate (CAGR) COMPANY PRESENTATION | 01/10 4
- 5. Company I Lease System 5 rent General form of lease contracts for DES-tenants 4 turnover-linked rent 3 Participation in sales growth of 2 retail i d il industry 1 CPI-linked minimum rent 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 years Lease standards: 10 years lease only no break-up option turnover-linked rents t li k d t minimum rents are CPI-linked COMPANY PRESENTATION | 01/10 5
- 6. Company I Lease System avg. rent per sqm and year: €250 avg. German retail: avg. turnover per sqm and year: €4,700 €3,330 Rent to sales ratio: 6.5 9.5% Rent-to-sales-ratio: 6.5-9.5% weighted maturity of rental contracts: >7 years € million 5% 115.3 115 3 115 4% 95.8 92.9 3% 2.8% 90 2.6% 2 6% 2.4% 2.2% 72.1 2.0% 2% 1.8% 61.4 65 57.9 1% 0% 40 2003 2004 2005 2006 2007 2008 Revenue Rate of turnover linked rent turnover-linked COMPANY PRESENTATION | 01/10 6
- 7. Company I Targets Long term net asset value enhancement Main focus on “buy & hold”-strategy NAV and dividend Stable and attractive dividends Dividend yield: currently 4.2% Continuous growth Investment-focus: Germany and up to 25% Europe Portfolio expansion by 10% per year by acquisition of new shopping centers by increasing existing amounts of holdings by expanding holdings COMPANY PRESENTATION | 01/10 7
- 8. Shopping Centers I Overview 1. Frankfurt 2. Viernheim 3. Dresden 4. Hamburg 5. Hamm 6. Wetzlar 7. Dessau 8. Wolfsburg 9. Kassel 10. Wuppertal 11. Passau 12. Hameln 13. Gdansk 14. Klagenfurt 15. Pécs 16. Wroclaw COMPANY PRESENTATION | 01/10 8
- 9. Shopping Centers I Germany Main-Taunus-Zentrum M i T Z t Rhein-Neckar-Zentrum Rh i N k Z t Altmarkt-Galerie Alt kt G l i Location Frankfurt Viernheim Dresden Investment 43.1% 99.9% 50.0% Lettable space sqm p q 103,400 , 63,900 , 44,500 , Parking 4,000 3,500 500 Number of shops approx. 100 approx. 100 approx. 110 Occupancy rate 100% 100% 99% Catchment area approx. 2.2 m. inhabitants approx. 1.4 m. inhabitants approx. 1.0 m. inhabitants Opening / refurbishm. 1964 / 2001-2004 1972 / 2000-2003 2002 COMPANY PRESENTATION | 01/10 9
- 10. Shopping Centers I Germany Phoenix-Center Allee-Center Forum Location Hamburg Hamm Wetzlar Investment 50.0% 88.9% 65.0% Lettable space sqm p q 39,200 , 35,100 , 34,300 , Parking 1,600 1,300 1,700 Number of shops approx. 110 approx. 85 approx. 110 Occupancy rate 100% 100% 100% Catchment area approx. 0.6 m. inhabitants approx. 1.0 m. inhabitants approx. 0.5 m. inhabitants Opening / refurbishm. 2004 1992 / 2002-2003 2005 COMPANY PRESENTATION | 01/10 10
- 11. Shopping Centers I Germany Rathaus-Center City-Galerie City-Point Location Dessau Wolfsburg Kassel Investment 94.9% 89.0% 90.0% Lettable space sqm p q 30,400 , 30,000 , 29,500 , Parking 850 800 220 Number of shops approx. 80 approx. 95 approx. 60 Occupancy rate y 98% 100% 100% Catchment area approx. 0.5 m. inhabitants approx. 0.3 m. inhabitants approx. 0.8 m. inhabitants Opening / refurbishm. 1995 2001 / 2006 2002 / 2009 COMPANY PRESENTATION | 01/10 11
- 12. Shopping Centers I Germany City-Arkaden Cit A k d Stadtgalerie St dt l i Stadt-Galerie St dt G l i Location Wuppertal Passau Hameln Investment 72.0% 75.0% 94.9% Lettable space sqm p q 28,700 27,400 25,000 Parking 650 500 500 Number of shops approx. 85 approx. 90 approx. 100 Occupancy rate 100% 100% 100% Catchment area approx. 0.7 m. inhabitants approx. 0.4 m. inhabitants approx. 0.4 m. inhabitants Opening / refurbishm. 2001 / 2004 2008 2008 COMPANY PRESENTATION | 01/10 12
- 13. Shopping Centers I Europe Galeria B łt k G l i Bałtycka City Arkaden Cit A k d Árkád Á kád Location Gdansk, Poland Klagenfurt, Austria Pécs, Hungary Investment 74.0% 50.0% 50.0% Lettable space sqm p q 48,600 36,700 35,200 Parking 1.050 880 850 Number of shops approx. 200 approx. 120 approx. 130 Occupancy rate 100% 100% 100% Catchment area approx. 1.1 m. inhabitants approx. 0.4 m. inhabitants approx. 0.5 m. inhabitants Opening 2007 2006 2004 COMPANY PRESENTATION | 01/10 13
- 14. Shopping Centers I Europe Galeria D i ik G l i Dominikanska k Location Wroclaw, Poland Investment 33.3% Lettable space sqm 32,800 Parking 900 Number of shops approx. 100 Occupancy rate 100% Catchment area approx. 1.3 m. inhabitants Opening 2001 COMPANY PRESENTATION | 01/10 14
- 15. Shopping Centers I Acquisition of A10 Center Wildau grand opening: autumn 1996, new development (A10 Triangle): spring 2011 p ( g ) p g approx. 120,000 sqm lettable space (incl. Triangle), thereof 66,000 sqm retail space one of the biggest shopping centers in Germany Total investment: approx. €265 million (incl. Triangle) 43% equity, 57% debt expected annualised rents from 2011 €19.4 million expected gross yield (incl. Triangle): 7.3% e pec ed e expected net initial yield (NOI, incl. Triangle): 6.5% a yed( O, c a g e) 6 5% COMPANY PRESENTATION | 01/10 15
- 16. Shopping Centers I Expansion of the Altmarkt-Galerie Dresden lettable area: add t o a 32,000 m² ettab e a ea additional 3 ,000 (currently 44,500 m²) 90 new shops expansion includes 2,900 m² office space 2 900 and 5,300 m² for a hotel (signed) Approx. €165 million total investment volume (approx. €82.5 (appro €82 5 million for DES) opening planned for spring 2011 Nov 2009 pre-letting status: approx. 50% expected net initial yield: approx. 5.6% COMPANY PRESENTATION | 01/10 16
- 17. Shopping Centers I Expansion of the Main-Taunus-Zentrum selling area: additional 12 000 m² 12,000 (currently 79,000 m²) 70 new shops approx. €72 million total investment volume (approx. €31 million for DES) opening planned for autumn 2011 Nov 2009 pre-letting status: approx. 20% expected net initial yield: approx. 8.9% COMPANY PRESENTATION | 01/10 17
- 18. Shopping Centers I Our Tenants Well-known tenants COMPANY PRESENTATION | 01/10 18
- 19. Shopping Centers I Tenants Structure Top 10 tenants* Low level of Metro-Group 5.1% dependence on the top 10 tenants Douglas-Group 4.6% Peek & Cloppenburg 2.7% H&M 2.2% Inditex 2.0% New Yorker 1.9% Deichmann 1.9% dm-Drogeriemarkt 1.4% REWE 1.3% Engelhorn & Sturm 1.3% Other O h tenants total 24.4% total 75.6% *in % of total rents as at 31 Dec 2008 COMPANY PRESENTATION | 01/10 19
- 20. Shopping Centers I Maturity Distribution of Rental Contracts* Long-term contracts guarantee rental income 2014 et sqq: 69.4% 2009: 2.1% 2010: 2.3% Weighted maturity > 7 years 2011: 10.0% 2012: 12.8% 2013: 3.4% *as % of rental income as at 31 Dec 2008 COMPANY PRESENTATION | 01/10 20
- 21. Shopping Centers I Sector and Retailer Mix* non-food/electronics 20% department stores Balanced sector and 13% retailer diversification food 7% health & beauty 6% inter-/national retailers catering 49% 4% fashion services 49% 1% local entrepreneurs 26% regional retail chains 25% *in % of lettable space as at 31 Dec 2008 COMPANY PRESENTATION | 01/10 21
- 22. Financials I Key Figures 01.01.- 01.01.- € million 30.09.2009 30.09.2008 +/- Revenue 94.4 84.1 12% Net operating income 83.8 83 8 73.4 73 4 14% EBIT 80.9 70.5 15% Net finance costs -36.9 -32.3 -14% EBT 46.2 37.9 22% Consolidated profit 38.5 31.3 23% FFO per share (€)* 1.11 1.02 9% Earnings per share (€)* 1.09 0.91 20% € million 30.09.2009 31.12.2008 +/- Total equity 1,051.1 977.8 7% Interest bearing debt 925.4 899.8 3% Other debt 44.1 47.0 -6% Total assets 2,110.6 2 110 6 2,006.8 2 006 8 5% Equity ratio 49.8% 48.7% LTV ratio 45.6% 46.1% *undiluted COMPANY PRESENTATION | 01/10 22
- 23. Financials I Loan Structure* Principle amounts Share of avg. bank debt: €894 million Interest lockin Duration (€ thousand) total loan interest rate Up to 1 year 1.0 10 59,485 59 485 6.6% 6 6% 5.93% 5 93% avg. avg interest rate 5.33% 1 to 5 years 4.7 348,155 38.9% 5.28% Weighted maturity 5 to 10 years 7.2 367,405 41.1% 5.38% 7.0 years Over 10 years 17.3 119,900 13.4% 5.05% Total 7.0 894,945 100% 5.33% * as of 31 December 2008 COMPANY PRESENTATION | 01/10 23
- 24. Financials I Valuation – Investment Properties Rating External appraisers: 50% DES‘ portfolio was rated very good (A) 50% Feri Research and GfK GeoMarketing Profitability Property Rating discounted cash flow method cash-flow 2007 2008 actual Macro-location 20.0% expected yield of 10-year Competitive environment 6.4% German federal bonds 4.78% 4.58% 3.37%1) average applied risk premiums li d i k i 1.60% 1 60% 2.10% 2 10% Micro-location Micro location 9.6% 9 6% average discount rate 6.38% 6.68% Property quality 4.0% average inflation rate 1.70% 1.70% +0.40%2) Tenants risk 10.0% average property operating and management costs3) 13.50% 13.10% 12.40%4) net initial yield 5.49% 5.64% 5.85%4) 1) Status: 11 January 2010 2) German Federal Statistical Office, November 2009 3) Investment properties 4) Plan 2009 COMPANY PRESENTATION | 01/10 24
- 25. Financials I Forecast € million 125-128 128-131 140 Revenue 120 115.3 100 92.9 95.8 CAGR 80 72.1 13% +13% 60 +29% +3% +20% +10% +2% 40 1 2 3 4 5 6 130 1) EBIT 105-108 109-112 110 98.1 90 77.2 CAGR 73.6 70 57.5 +14% 50 +28% +5% +27% +9% +4% 30 1 +28% 2 3 4 5 6 55 EBT1) 2) 49.9 50-52 53-55 45 37.7 CAGR 35 +14% 36.1 28.1 25 +28% +4% +32% +2% +6% 15 € 1.60 1,60 FFO per share 1.45 1.38-1.43 3) 1.41-1.453) 1.08 1.12 CAGR 1.10 1,10 0.97 +8%3) +11% +4% +29% -3% +2% 0.60 0,60 1 2 3 4 5 6 2005 2006 2007 2008 2009 2010 1) 2) 3) adjusted for one-time proceeds from disposals excl. valuation result incl. dilution COMPANY PRESENTATION | 01/10 25
- 26. Shopping Center Share I Shareholder Structure 8,600 shareholders Germany 74% Institutional Free float 81.5% Attfund Investors 5.0% 54.3% Otto family 18.5% Private Investors 22.2% Other 3% BE ZA 2% CH 5% 4% UK FR US 4% 4% 4% Status: 30 December 2009 COMPANY PRESENTATION | 01/10 26
- 27. Shopping Center Share I Dividend & Performance dividend Share price Sh i in € in € 1,25 28.08 30,00 30.00 23.73 24.30 23.67 23 67 25,00 25 00 25.00 1,15 23.50 19.26 20,00 20.00 16.88 1.05 1.05 1.05 1.05 1,05 15.50 1.00 1 00 15,00 15.00 0.96 0.96 0.96 0.96 0.95 0,95 10,00 0.85 0,85 5,00 2002 2003 2004 2005 2006 2007 2008 2009 Performance DES: DAX: 5 years: +51.3% = +8.6% p.a. +7.0% p.a. 3 years: -4.2% = -1.4% p.a. -3.3% p.a. 1 year (2009): +1.7% +23.9% COMPANY PRESENTATION | 01/10 27
- 28. Shopping Center Share I Analysts‘ Consensus avg. / in € 2009 2010 EBIT (€ million) 106.55 111.83 FFO per share 1.43 1.48 EPS 0.64 1.43 Dividend 1.07 1.12 Price target 26.30 Status: 8 January 2010 COMPANY PRESENTATION | 01/10 28
- 29. Appendix I Key Data of the Share Listed since 02.01.2001 Nominal capital €37,812,496.00 Outstanding shares 37,812,496 Class of shares Registered shares Dividend 2008 (01.07.2009) €1.05 52W High €25.07 52W Low €18,66 €18 66 Share price (12.01.2010) €24.39 Market capitalisation €920 million avg. turnover per day last 12 months 121,000 shares Indices MDAX, EPRA, GPR, MSCI Small Cap Prime Standard Official market Frankfurt and XETRA Berlin-Bremen, Dusseldorf, Hamburg, OTC market Hanover, Hanover Munich and Stuttgart ISIN DE 000 748 020 4 Ticker DEQ, Reuters: DEQGn.DE Market makers Close Brothers Seydler, WestLB COMPANY PRESENTATION | 01/10 29
- 30. Appendix I Financial Calendar 2010 19.01. Cheuvreux German Corporate Conference, Frankfurt 20.-21.04. 20 21 04 Credit Suisse Global Real Estate Conference, London Conference 30.04. Annual earnings press conference, Hamburg 12.05. Interim report Q1 2010 26.-27.05. Kempen & Co European Property Seminar, Amsterdam 09.06. Metzler Property Day, Frankfurt 17.06. Annual General Meeting, Hamburg 12.08. Interim report H1 2010 11.11. 11 11 Interim report Q1 3 2010 Q1-3 COMPANY PRESENTATION | 01/10 30
- 31. Appendix I Contact Deutsche EuroShop AG Investor & Public Relations Oderfelder Straße 23 20149 Hamburg Tel. +49 (40) 41 35 79 - 20 / -22 Claus-Matthias Böge Chief Executive Officer Fax +49 (40) 41 35 79 - 29 E-Mail: [email protected] Web: www.deutsche-euroshop.com www.deutsche euroshop.com facebook.com/desag slideshare.net/desag Olaf G. Borkers twitter.com/des_ag twitter.com/des ag Chief Financial Officer Important Notice: Forward-Looking Statements Statements in this presentation relating to future status or circumstances, circumstances including statements regarding manage- manage ment’s plans and objectives for future operations, sales and earnings figures, are forward-looking statements of Patrick Kiss goals and expectations based on estimates, assumptions Head of Investor & Public Relations 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 Nicolas Lissner forward-looking forward looking statements and does not assume any Manager Investor & Public Relations obligation to do so. COMPANY PRESENTATION | 01/10 31