Deutsche EuroShop | Company Presentation | 04/11
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Deutsche EuroShop is Germany's only public company that solely invests in shopping centers. It owns 18 shopping centers located primarily in Germany but also in Poland, Austria, and Hungary. The company focuses on a "buy and hold" strategy to grow its net asset value and pay stable dividends over the long term. Its goals include extending its property portfolio by 10% annually and maintaining a focus on investments in Germany.
Deutsche EuroShop | Company Presentation | 04/11
- 2. Company I Equity Story p y q y y Deutsche EuroShop is Germany´s only public company that invests solely in shopping centers centers. Shopping centers are attractive investments because of b f continuously positive development of rents stable long term growth prime locations high quality standards Company Presentation | 04/11 page 2
- 3. Company I At a Glance p y 18 shopping centers on high street and in established locations – 14 in Germany 2 in Poland and one each Germany, in Austria and Hungary Lettable space approx. 842,000 approx 842 000 sqm* Retail shops approx. 2,145* Market value a et a ue app o €3 3 b o approx. €3.3 billion* Rents per year €219 million* Occupancy rate > 99% 2010 portfolio valuation: 5.89% net initial yield Professional center management by ECE, the European market leader in this industry *incl. development/extension of A10, Dresden and Sulzbach, 100%-view Company Presentation | 04/11 page 3
- 4. Company I Key Figures p y y g Revenue EBIT NAV per share 160 140 28 27.43 2) 144.22) 124.0 26.91 26.63 26 63 140 127.6 120 110.7 26.142) 120 115.3 98.1 26 25.53 100 95.8 86.3 100 92.9 78.5 80 80 24 60 60 +12%1) 40 +10%1) 40 22 +0.6%1) 20 20 0 0 20 €m 2006 2007 2008 2009 2010 €m 2006 2007 2008 2009 2010 € 2006 2007 2008 2009 2010 FFO per share Dividend per share 1,15 1,50 1.38 1.40 1.402) 1.103) 1,10 1.08 1.12 1.05 1.05 1.05 1.05 1,00 1,05 1,00 0,50 +10%1) 10% +1.2%1) 1 2% 0,95 0,00 0,90 € 2006 2007 2008 2009 2010 € 2006 2007 2008 2009 2010 1) 2006-2010, Compound Annual Growth Rate (CAGR) 2)preliminary results 3) probable proposal Company Presentation | 04/11 page 4
- 5. Company I Lease System p y y 5 rent 4 General form of lease contracts turnover-linked rent for DES-tenants 3 2 Participation in sales growth of 1 retail industry 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 | 04/11 page 5
- 6. Company I Lease System p y y avg. rent per sqm and year: €250 avg. avg turnover per sqm and year: €4 700 €4,700 avg. avg German retail: €3,420 Rent-to-sales-ratio: 7-11% weighted maturity of rental contracts: 6.7 years € million 5% 144.2* 140 4% 127.6 115.3 115 3% 2.8% 2.6% 95.8 92.9 2.0% 90 2% 2.4% 1.8% 1.8%* 2.2% 2 2% 72.1 61.4 65 1% 0% 40 2004 2005 2006 2007 2008 2009 2010 Revenue Rate of turnover-linked rent *preliminary results Company Presentation | 04/11 page 6
- 7. Company I Targets p y g Long term net asset value enhancement Main focus on NAV and dividend “buy & hold”-strategy Continuous growth Stable and attractive dividends Dividend yield: currently 4.1% Investment-focus: At least 75% Germany and up to 25% Europe Portfolio extension by 10% per year by acquisition of new shopping centers by increasing existing amounts of holdings by expansion of portfolio centers Company Presentation | 04/11 page 7
- 8. Shopping Centers I Overview pp g 1. Wildau/Berlin 2. Sulzbach/Frankfurt 3. Viernheim 4. Dresden 5. Hamburg Poland 6. Hamm 7. Wetzlar 8. Dessau 8 D 9. Wolfsburg Germany 10. Kassel 11. 11 Wuppertal 12. Passau 13. Hameln Hungary 14. 14 Gdansk Austria 15. Klagenfurt 16. Pécs 17. Wroclaw 18. Hamburg Company Presentation | 04/11 page 8
- 9. Shopping Centers I Germany pp g y A10 Center Main-Taunus-Zentrum Altmarkt-Galerie Location Wildau/Berlin Sulzbach/Frankfurt Dresden Investment 100% 52.0% 52 0% 67.0% 67 0% Lettable space sqm 120,000 117,000* 76,500 Parking 3,800 4,500* 500 Number of shops approx. approx 180 approx. 180 approx 180* approx. approx 220 Occupancy rate 100% 100% 98% Catchment area approx. 1.2 m. inhabitants approx. 2.2 m. inhabitants approx. 1.0 m. inhabitants Opening / refurbishm. p g 1996 / 2011 1964 / 2004 / 2011 2002 / 2011 *incl. extension (MTZ opening autumn 2011) Company Presentation | 04/11 page 9
- 10. Shopping Centers I Germany pp g y Rhein-Neckar-Zentrum Phoenix-Center Billstedt-Center Location Viernheim Hamburg Hamburg Investment 99.9% 99 9% 50.0% 50 0% 100% Lettable space sqm 69,000 38,700 38,100 Parking 3,500 1,600 1,500 Number of shops approx. approx 110 approx. approx 110 approx. approx 110 Occupancy rate 100% 100% 100% Catchment area approx. 1.4 m. inhabitants approx. 0.6 m. inhabitants approx. 0.7 m. inhabitants Opening / refurbishm. p g 1972 / 2003 2004 1969 / 1977 / 1996 Company Presentation | 04/11 page 10
- 11. Shopping Centers I Germany pp g y Allee-Center Forum Rathaus-Center Location Hamm Wetzlar Dessau Investment 88.9% 88 9% 65.0% 65 0% 94.9% 94 9% Lettable space sqm 34,000 34,300 30,400 Parking 1,300 1,700 840 Number of shops approx. approx 85 approx. approx 110 approx. approx 80 Occupancy rate 100% 100% 98% Catchment area approx. 1.0 m. inhabitants approx. 0.5 m. inhabitants approx. 0.5 m. inhabitants Opening / refurbishm. p g 1992 / 2003 / 2009 2005 1995 Company Presentation | 04/11 page 11
- 12. Shopping Centers I Germany pp g y City-Galerie City-Point City-Arkaden Location Wolfsburg Kassel Wuppertal Investment 89.0% 89 0% 100% 100% Lettable space sqm 30,800 28,200 28,700 Parking 800 220 650 Number of shops approx. 90 approx. 70 approx. 80 Occupancy rate 100% 100% 100% Catchment area approx. 0.3 m. inhabitants approx. 0.8 m. inhabitants approx. 0.7 m. inhabitants Opening / refurbishm. p g 2001 / 2006 2002 / 2009 2001 / 2004 Company Presentation | 04/11 page 12
- 13. Shopping Centers I Germany pp g y Stadtgalerie Stadt-Galerie Location Passau Hameln Investment 75.0% 75 0% 100% Lettable space sqm 27,300 25,900 Parking 500 500 Number of shops approx. 90 approx. 100 Occupancy rate 100% 100% Catchment area approx. 0.4 m. inhabitants approx. 0.4 m. inhabitants Opening / refurbishm. p g 2008 2008 Company Presentation | 04/11 page 13
- 14. Shopping Centers I Europe pp g p Galeria Bałtycka City Arkaden Árkád Location Gdansk, Poland Klagenfurt, Austria Pécs, Hungary Investment 74.0% 74 0% 50.0% 50 0% 50.0% 50 0% Lettable space sqm 39,500 36,900 35,000 Parking 1.000 880 850 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 p g 2007 2006 2004 Company Presentation | 04/11 page 14
- 15. Shopping Centers I Europe pp g p Galeria Dominikanska Location Wroclaw, Poland Investment 33.3% 33 3% Lettable space sqm 32,000 Parking 900 Number of shops approx. 100 Occupancy rate 100% Catchment area approx. 1.3 m. inhabitants Opening p g 2001 Company Presentation | 04/11 page 15
- 16. Shopping Centers I Acquisition of Billstedt-Center pp g q originally opened in 1969 and 1977, reopening: 1996 (after a major refurbishment and expansion) approx. 40,000 sqm retail space on 2 levels (incl. Karstadt which is owned by a third party) 735,000 735 000 people are living in the catchment area occupancy rate: 100% (incl. office and residential) investment: approx. €160 million expected annualised rents for 2011: approx. €11 million expected gross yield (2011): 6.9% expected net initial yield (2011): 6.0% Company Presentation | 04/11 page 16
- 17. Shopping Centers I A10 Center Wildau pp g one of the biggest shopping centers in Germany grand opening: autumn 1996, new development (A10 Triangle): 6 April 2011 approx. 120,000 sqm lettable space (incl. Triangle), thereof 66,000 sqm retail space Total investment: approx. €265 million (incl. Triangle) pp ( g ) letting status: 100% expected annualised rents from 2011 €19.4 million expected gross yield (i l T i t d i ld (incl. Triangle): 7.3% l ) 7 3% expected net initial yield (NOI, incl. Triangle): 6.5% Company Presentation | 04/11 page 17
- 18. Shopping Centers I Extension Altmarkt-Galerie Dresden pp g lettable area: additional 32,000 m² (before 44,500 m²) 90 new shops extension includes 2,900 m² office space and 5,300 m² for a hotel (signed) Approx. Approx €165 million total investment volume (approx. €110 million for DES) opened: 31 March 2011 letting stat s 100% status: expected net initial yield: approx. 5.6% Company Presentation | 04/11 page 18
- 19. Shopping Centers I Extension Main-Taunus-Zentrum pp g selling area: additional 12,000 m² (currently 79,000 m²) 70 new shops approx. approx €74 million total investment volume (approx. €38.5 million for DES) opening planned for autumn 2011 March 2011 pre letting stat s appro 80% pre-letting status: approx. expected net initial yield: approx. 8.9% Company Presentation | 04/11 page 19
- 20. Shopping Centers I Our Tenants pp g Well-known tenants Company Presentation | 04/11 page 20
- 21. Shopping Centers I Retail turnover 2010* pp g % change rent-to-sales % of % of Retail sector in 2010 ratio in % sales space p Department stores -4.4 5.1 7.0 14.3 Food -0.4 6.5 10.2 7.0 Fashion textiles +6.5 10.9 27.9 34.7 Shoes & leather goods +5.5 12.8 5.5 6.9 Sports +6.1 8.2 4.7 5.5 Health & Beauty -0.5 7.4 10.7 6.3 General Retail -0.2 10.2 11.0 11.2 Electronics -3.1 2.5 15.2 8.5 Services +4.8 5.0 3.6 1.4 Food catering -0.9 13.2 4.2 4.2 Total -0.1 8.2 100.0 100.0 *all German centers on a like-for-like basis (12 centers with a 2010 turnover of €1.4 billion) Company Presentation | 04/11 page 21
- 22. Shopping Centers I Tenants Structure Top 10 tenants* pp g p Metro-Group 4.6% Douglas-Group 4.6% Peek & Cloppenburg 2.5% 2 5% Low level of H&M 2.5% dependence on the top 10 tenants New Yorker 2.2% Inditex 2.0% 2 0% Deichmann 2.0% C&A 1.8% dm-Drogeriemarkt dm Drogeriemarkt 1.4% 1 4% Esprit 1.3% Other tenants total 24.9% total 75.1% *in % of total rents as at 31 Dec 2009, excluding A10, Billstedt and extensions Company Presentation | 04/11 page 22
- 23. Shopping Centers I Maturity Distribution of Rental Contracts* pp g y 2015 et sqq: 62.7% Long-term contracts guarantee rental income 2010: 2.9% 2011: 9.3% Weighted maturity 6.7 years y 2012: 13.3% 2013: 3.2% 2014: 5.6% *as % of rental income as at 31 Dec 2009, excluding A10, Billstedt and extensions Company Presentation | 04/11 page 23
- 24. Shopping Centers I Sector and Retailer Mix* pp g non-food/electronics 21% department stores 10% food 7% health & beauty 6% catering 4% fashion services 51% 1% inter-/national Balanced sector and retailers retailer diversification 47% local entrepreneurs p 27% regional retail chains % 26% *in % of lettable space as at 31 Dec 2009, excluding A10, Billstedt and extensions Company Presentation | 04/11 page 24
- 25. Financials I Key Figures 2010 y g € million 01.01.-31.12.2010* 01.01.-31.12.2009 +/- Revenue 144.2 127.6 13% Net operating income 128.9 114.5 13% EBIT 124.0 110.7 12% Net finance costs -60.1 -55.9 -8% EBT before valuation 63.9 63 9 54.9 54 9 16% Valuation result 32.9 -14.8 EBT 96.8 40.1 141% Consolidated profit p 80.8 34.4 135% FFO per share (€) 1.40 1.40 0% Earnings per share (€) 1.77 0.88 101% € million 30.09.2010 31.12.2009 +/- Total equity 1,172.4 1,044.4 12% Interest bearing debt 1,091.0 934.2 17% Other debt 56.5 48.0 18% Total assets 2,410.4 2,112.1 14% Equity ratio 48.6% 49.5% LTV ratio ti 47% 46% *preliminary results Company Presentation | 04/11 page 25
- 26. Financials I Loan Structure* bank debt: €929 million Principle amounts Share of avg. avg Interest lockin Duration (€ thousand) total loan interest rate avg. interest rate Up to 1 year 1.0 13,399 1.4% 5.27% 5.27% 1 to 5 years 4.3 43 424,071 424 071 45.7% 45 7% 5.48% 5 48% Weighted maturity 5 to 10 years 7.8 382,151 41.1% 5.10% 7.1 years Over 10 years 16.8 109,400 11.8% 5.06% Total 2009 7.1 929,022 100% 5.27% Total 2008 7.0 894,945 5.33% *as of 31 December 2009 Company Presentation | 04/11 page 26
- 27. Financials I Valuation – Investment Properties p Rating External appraisers: Feri Research and 50% DES‘ portfolio was rated very good (A) 50% GfK GeoMarketing Profitability Property Rating discounted cash-flow method 2009 2010 actual Macro-location 20.0% expected yield of 10-year Competitive environment 6.4% German federal bonds 4.48% 4.44% 3.33%1) average applied risk premiums 2.38% 2.21% Micro-location 9.6% average discount rate 6.80% 6.75% Property q p y quality y 4.0% average property operating Tenants risk 10.0% 4) and management costs 11.40% 11.70% 11.40% net initial yield 5.82% 5 82% 5.89% 5 89% 5.82% ) 5 82%4) 1) Status: 1 April 2011 ) Company Presentation | 04/11 page 27
- 28. Forecast € million 180 149-152 160 Revenue 184-188 144.2 140 127.6 120 115.3 100 92.9 95.8 80 CAGR 60 +3% +20% +11% +13% +29% +6% +15% 40 190 170 EBIT1) 157-161 127-130 127 130 150 130 124.0 110.7 110 98.1 90 73.6 77.2 70 CAGR 50 +5% +27% +13% +12% +28% +6% 30 +17% +28% 85 1) 2) 75-78 75 EBT 63.9 64-66 65 54.8 55 49.9 45 36.1 37.7 CAGR 35 25 +4% +32% +10% +17% +20% +5% +16% 15 € 1.60 1,60 FFO per share 1.48-1.52 1.45-1.50 1.38 1.40 1.40 1.08 1.12 1.10 1,10 CAGR +4% +23% +1% +0% +7% +6% 0.60 0,60 +7%3) 2006 2007 2008 2009 2010 2011 2012 4) 2006 2007 2008 2009 2010 2011 2012 1) 2) 3) 4) adjusted for one-time proceeds from disposals excl. valuation result incl. dilution preliminary results Company Presentation | 04/11 page 28
- 29. Shopping Center Share I Shareholder Structure pp g 10,000 shareholders Institutional Germany Investors 72% Free float 85.0% 52.5% BlackRock 3.3% Private Otto family Investors 15.0% 29.2% Other 2% NO FR USA 2% CH BE UK 8% 3% 3% 4% 6% *Status: 1 April 2011 Company Presentation | 04/11 page 29
- 30. Shopping Center Share I Dividend & Performance pp g Dividend1) Share price in € in € 1,25 28.98 30,00 28.08 26 942) 26.94 23.73 24.30 25,00 1,15 23.50 23.67 1.103) 19.26 19 26 20,00 20 00 16.88 1.05 1.05 1.05 1.05 1,05 1.00 15,00 0.96 0.96 0.96 0,95 10,00 0,85 5,00 2003 2004 2005 2006 2007 2008 2009 2010 2011 Performance DES: DAX: 1 year (2010): +28.1% +16.1% 3 years: +41.2% = +12.2% p.a. –5.0% p.a. 5 years: +50.6% = +8.5% p.a. +5.0% p.a. 1) 2) 3) respectively paid for the previous financial year status: 31 Mar 2011 planned proposal for AGM Company Presentation | 04/11 page 30
- 31. Shopping Center Share I Analysts‘ Consensus pp g y avg. / in € 2010 2011 EBIT (€ million) 123.8 147.2 FFO per share 1.35 1 35 1.50 1 50 Buy: 8 EPS 1.56 1.83 Dividend 1.09 1.15 Outperform: 3 Price target 27.51 Neutral: 11 Underperform: 3 Sell: 1 ABN Amro equinet Rabobank 26 analysts: Aurel Hamburger Sparkasse Silvia Quandt Bank one of the best covered Bankhaus Lampe HSBC Societe Generale real estate Bank of America Merrill Lynch Kempen & Co. UBS companies in Europe* Berenberg Bank Kepler Capital Markets Unicredit Close Brothers Seydler Macquarie WestLB Commerzbank C b k Metzler M t l Credit Suisse M.M. Warburg & Co Deutsche Bank Petercam Bank DZ Bank ING Status: 31 Mar 2011 / * No. 1 according to EPRA survey 3/2011 Company Presentation | 04/11 page 31
- 32. Appendix I Key Data of the Share pp y Listed since 02.01.2001 02 01 2001 Nominal capital €51,631,400.00 Outstanding shares 51,631,400 Class of shares Registered shares Dividend 2010 (planned proposal) €1.10 52W High €29.00 52W Low €21.66 Share price (31.03.2011) €26.94 Market capitalisation €1.4 billion avg. turnover per day last 12 months 116,000 shares Indices MDAX, EPRA, GPR, MSCI Small Cap Prime Standard Official market Frankfurt and XETRA Berlin-Bremen, Dusseldorf, Hamburg, OTC market Hanover, Munich and Stuttgart ISIN DE 000 748 020 4 Ticker DEQ, Reuters: DEQGn.DE Market makers Close Brothers Seydler, WestLB Company Presentation | 04/11 page 32
- 33. Appendix I Environment pp Climate protection is one of the most important issues for Deutsche EuroShop. We believe that sustainability and profitability, the shopping experience and environmental awareness do not have to be opposites. Long-term thinking is part of our strategy. This includes playing our part in environmental protection. All our German shopping centers have contracts with suppliers that use pp g pp regenerative energy sources such as hydroelectric power for their electricity needs. The “EnergieVision” organisation certified the green electricity for eleven of our German centers with the renowned “ok-power” accreditation in 2009. We plan to switch the centers in other countries to p green electricity as well in the next few years. The twelve participating centers used a total of around 49 million kWh of green electricity. This represented 100% of the electricity requirements in our German shopping centers. As a result, based on conservative calculations this meant a reduction of around 19,300 tonnes in carbon dioxide emissions – this equates to the annual CO2 emissions of just under 900 two-person households. We have already reduced the energy consumption of our shopping centers by using heat exchangers and energy-saving light bulbs. Deutsche EuroShop, through its shopping centers, also supports a range of activities at local and regional level in the areas of ecology, society and economy. economy Company Presentation | 04/11 page 33
- 34. Appendix I Financial Calendar 2011 pp 05.-06.04. Deutsche Bank's VIP Real Estate Event, 16.06. Supervisory Board meeting, Hamburg Frankfurt, Berlin 21.-22.06. Bankhaus Lampe Hamburg Investment 12.04. WestLB German Property Day, London Conference 14.04. Audit Committee meeting, Hamburg 11.08. Interim report H1 2011 27.04. Supervisory Board meeting, Hamburg 22.09. Supervisory Board meeting, Hamburg 29.04. Annual earnings press conference, 27.-29.09. UniCredit German Investment Conference, Hamburg Munich 02.05. 02 05 Roadshow M i h B d B k R d h Munich, Baader Bank 04.-06.10. Expo Real, M i h 04 06 10 E R l Munich 13.05. Interim report Q1 2011 06.-07.10. Société Générale Pan European Real 17.05. Roadshow Luxembourg, Estate Conference, London Close Brothers Seydler 19.10. Real Estate Share Initiative, Frankfurt 18.05. Roadshow Paris, Bankhaus Lampe , p 10.11. Nine-month report 2011 p 24.05. Metzler Property Day, Frankfurt 14.11. Roadshow Zurich, Rabo 25.05. Kempen & Co. European Property 16.-17.11. WestLB Deutschland Conference, Frankfurt Seminar, Amsterdam 17.11. Supervisory Board meeting, Hamburg 31.05. Roadshow Stockholm, ABN-Amro 23.11. Roadshow Brussels, Petercam 09.06. Roadshow Vienna, Berenberg 16.06. Annual General Meeting, Hamburg Company Presentation | 04/11 page 34
- 35. Appendix I Contact pp Deutsche EuroShop AG Investor & Public Relations Oderfelder Straße 23 20149 Hamburg Claus-Matthias Böge Chief Executive Officer Tel. +49 (40) 41 35 79 - 20 / -22 Fax +49 (40) 41 35 79 - 29 E-Mail: [email protected] Web: www deutsche-euroshop com www.deutsche euroshop.com deutsche-euroshop.com/IRmall facebook.com/euroshop Olaf G. Borkers Chief Financial Officer 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 Patrick Kiss circumstances, including statements regarding manage- i t i l di t t t di Head of Investor & Public Relations ment’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 Nicolas Lissner different from those that may be expressed or implied by Manager Investor & Public Relations such statements. Deutsche EuroShop does not intend to update these forward-looking statements and does not assume any obligation to do so. Company Presentation | 04/11 page 35