Deutsche EuroShop | Preliminary Results FY 2017
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The document provides preliminary results for the fiscal year 2017 for a company that owns and operates shopping centers. Key points include: - Retail turnover increased 0.0% in Germany and 5.4% abroad on a like-for-like basis. - EBIT increased 8% to €192 million and FFO per share increased 5.1% to €2.54, beating targets. - Net asset value (EPRA) increased 14.4% to €43.19 per share. - The portfolio was independently valued at €5.97 billion, with a like-for-like valuation increase of 0.6%.
![FINANCIALS
Net Finance Cost Bridge 2017
ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018
# 10
€M
1 without valuation result and swaps
2 Saarpark-Center
3 consolidated and at-equity
4 2017 absolute figures in brackets
+3.5 -24.3
-35
-35.1
+2.2 -3.4 +0.8
+0.6 -0.6
2016
Interest expense
(without Olympia) Olympia Saarpark-Center
At-equity
(without SPN )
At-equity
(valuation) Swaps
Minority
profitshare 2017
[4.4]
+1.8
[24.8][-50.7]4
[-3.4] [4.8]
-13.9
[3.5] [-18.5]
1 2 3](https://image.slidesharecdn.com/180305desfy2017prelimsafe-180307105941/85/Deutsche-EuroShop-Preliminary-Results-FY-2017-11-320.jpg)
Deutsche EuroShop | Preliminary Results FY 2017
- 1. CONFERENCE Call FY2017 – Preliminary Results 6 MARCH 2018
- 2. SHOPPING CENTERS Retail turnover 20171 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 1 Retail turnover development on a like-for-like basis: +0.0% +5.4% +0.8% 1 German centers on a like-for-like basis (turnover: €2.1 billion) 2 The sum may not equal the totals due to rounding RETAIL SECTOR % change in 2017 rent-to-sales ratio in % % of sales % of space DEPARTMENT STORES -0.7 6.2 7.4 13.1 FOOD -1.5 7.6 8.9 6.4 FASHION TEXTILES -1.0 12.2 29.3 39.4 SHOES & LEATHER GOODS -0.6 14.4 5.4 6.5 SPORTS -1.6 9.6 3.9 4.9 HEALTH & BEAUTY -1.4 7.2 11.9 6.0 GENERAL RETAIL -2.2 10.7 8.5 9.0 ELECTRONICS 5.0 3.8 15.2 8.5 SERVICES 2.3 5.1 4.7 1.7 FOOD CATERING 2.7 12.6 4.8 4.3 TOTAL 0.0 9.1 100² 100² Absolute retail turnover development: +0.6% +5.4% +1.5% Germany Abroad Total
- 3. SHOPPING CENTERS Tenants Structure Top 10 Tenants1 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 2 1 in % of total retail rents as at 31 Dec. 2017 2 consumer electronics and the food retail division of Metro AG were demerged in 2017 2017 2016 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% 1.9% Douglas 1.8% 2.0% Metro² 1.7% Rewe 1.6% 1.7% DM 1.4% 1.4% Total 21.8% 78% 22% TOP 10 Tenants LOW LEVEL OF DEPENDENCE ON THE TOP 10 TENANTS
- 4. SHOPPING CENTERS Maturity Distribution of Rental Contracts1 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 3 Long-term contracts base rental income Weighted maturity 5.5 years 1 as % of rental income as at 31 Dec. 2017 2023 et sqq: 49% 2022: 12% 2021: 21% 2020: 6% 2019: 9% 2018: 3%
- 5. FINANCIALS Target – Performance Comparison ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 4 218.5 Target Actual 192.4 Target Actual 200.8 202.9 205.1 218.5 2014 2015 2016 2017 177.5 176.3 178.6 192.4 2014 2015 2016 2017 REVENUE €m EBIT €m 216-220 187-191
- 6. FINANCIALS 153.3 Target Actual Target – Performance Comparison ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 5 2.54 Target Actual 125.0 127.0 134.5 153.3 2014 2015 2016 2017 2.23 2.29 2.41 2.54 2014 2015 2016 2017 EBT EXCL. VALUATION €m FFO PER SHARE € 145-148 2.42-2.46
- 7. FINANCIALS Profit and Loss Account ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 6 in € thousand 01.01. – 31.12.2017 01.01. – 31.12.2016 CHANGE Revenue 218,491 205,136 7% Property operating and management costs -21,539 -20,398 Net operating income 196,952 184,738 7% Other operating income 2,035 1,410 Corporate costs -6,619 -7,522 EBIT 192,368 178,626 8% Other financial income and expenses 3,005 2,648 Interest expense -54,023 -52,918 At equity result 34,451 54,283 Profit/loss attributable to limited partners -18,522 -17,894 Net finance costs -35,089 -13,881 153% Measurement gains/losses 8,550 116,774 EBT 165,829 281,519 -41% Taxes -31,496 -59,762 Consolidated profit 134,333 221,757 -39%
- 8. FINANCIALS Valuation – Investment Properties 2017 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 7 * Atrributable to group shareholders in € thousand 2017 2016 CHANGE Revaluation 19,709 148,350 -128,641 Revaluation at-equity 4,396 28,711 -24,315 Acquisition expenses 0 -686 686 Goodwill impairment -140 0 -140 Other impairment -34 0 -34 Minority interest -10,985 -30,890 19,905 Valuation result before taxes 12,946 145,485 -132,539 Deferred taxes -3,646 -32,763 29,117 Valuation result after taxes* 9,300 112,722 -103,422 Like-for-like measurement gains: +0.6%
- 9. FINANCIALS Valuation1 – Investment Properties 2017 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 8 1 External appraisers: since 2015: JLL 5.64 5.80 5.89 5.92 5.98 5.97 5.87 5.46 5.24 5.23 5.37 5.52 5.61 5.64 5.70 5.69 5.53 5.13 4.94 4.93 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net operating yield in % Net initial yield in % IN € THOUSAND Basis change of -25bps change of +25bps Rent increase rates 1.47% -128,800 +164,700 Discount rate 5.90% +80,700 -75,000 Capitalization rate 5.11% +134,300 -121,900 Cost ratio 10.14% +13,900 -9,300 SENSITIVITY ANALYSIS
- 10. FINANCIALS Revenue Bridge 2017 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 9 €M 205.1 15.3 -1.9 218.5 2016 Olympia Standing assets 2017 Like-for-like revenue development: €-1.5M = -0.7%
- 11. FINANCIALS Net Finance Cost Bridge 2017 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 10 €M 1 without valuation result and swaps 2 Saarpark-Center 3 consolidated and at-equity 4 2017 absolute figures in brackets +3.5 -24.3 -35 -35.1 +2.2 -3.4 +0.8 +0.6 -0.6 2016 Interest expense (without Olympia) Olympia Saarpark-Center At-equity (without SPN ) At-equity (valuation) Swaps Minority profitshare 2017 [4.4] +1.8 [24.8][-50.7]4 [-3.4] [4.8] -13.9 [3.5] [-18.5] 1 2 3
- 12. FINANCIALS EBT Bridge 2017 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 11 €M 1 without valuation result and swaps 2 incl. in at-equity result as part of the financial result 281.5 +4.2 +0.6 +3.5 -132.6 -1.9 165.8 2016 Olympia (EBT) Saarpark-Center Standing assets Valuation result Swaps Deferred taxes at-equity 2017 1 1 +10.5 2
- 13. FINANCIALS Profit Bridge 2017 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 12 €M 1 without valuation result and swaps 2 related to investment properties 221.8 -103.4 +3.5 +0.5 134.3 +9.1 +3.9 -1.1 2016 Olympia Saarpark-Center Standing assets Valuation result Swaps Other deferred taxes 20171 1 2
- 14. FINANCIALS 2.29 2.42 2016 2017 Earnings per Share (EPRA) ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 13 in € thousand 2017 per share1 2016 per share1 Consolidated net profit 134,333 €2.31 221,757 €4.11 - Changes in value of investment properties2 -13,120 €-0.23 -146,171 €-2.71 - Swaps2 -3,443 €-0.06 -2,910 €-0.05 + Goodwill impairment 140 €0.00 0 €0.00 + Other results from revaluations 34 €0.00 686 €0.01 + Deferred tax in respect of EPRA adjustments2,3 23,084 €0.40 49,220 €0.91 + Acquisition costs 276 €0.00 1,093 €0.02 EPRA Earnings 141,304 €2.42 123,675 €2.29 Weighted number of shares 58,248,007 53,945,536 1 The sum of the earnings per share amounts may not equal the totals due to rounding 2 Including the share of joint ventures and associated companies recognized at equity 3 Affects deferred taxes on investment properties and derivative instruments € +5.7%
- 15. FINANCIALS Funds from Operations (FFO) ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 14 in € thousand 2017 per share1 2016 per share1 Consolidated net profit 134,333 €2.31 221,757 €4.11 - Changes in value of investment properties2 -13,120 €-0.23 -146,171 €-2.71 + Costs conversion privilege 781 €0.01 967 €0.02 + Goodwill impairment 140 €0.00 0 €0.00 + Other results from revaluations 34 €0.00 686 €0.01 + Deferred taxes2 25,937 €0.45 52,650 €0.98 FFO 148,105 €2.54 129,889 €2.41 Weighted number of shares 58,248,007 53,945,536 € 1 The sum of the amounts may not equal the totals due to rounding 2 Including the share of joint ventures and associated companies recognized at equity 3 2013 - 2017, Compound Annual Growth Rate (CAGR) 2.08 2.23 2.29 2.41 2.54 2013 2014 2015 2016 2017 +5.1%3
- 16. FINANCIALS Balance Sheet ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 15 in € thousand 31.12.2017 31.12.2016 Change Non-current assets 4,504,878 4,036,533 468,345 Current assets 122,121 77,924 44,197 Total assets 4,626,999 4,114,457 512,542 Group equity 2,237,376 1,916,148 321,228 Right to redeem of limited partners 337,479 324,559 12,920 Total equity 2,574,855 2,240,707 334,148 Financial liabilities 1,546,672 1,445,581 101,091 Deferred tax liabilities 439,800 359,365 80,435 Other liabilities 65,672 68,804 -3,132 Total equity and liabilities 4,626,999 4,114,457 512,542 1 incl. non controlling interests 3 Ratio of net financial liabilities (financial liabilities minus cash and cash equivalents) to 2 Ratio of net financial liabilities (financial liabilities minus cash and cash equivalents) to long-term assets, calculated on the basis of the groups share long-term assets (investment properties and financial assets recorded on the balance sheet according to the equity-method) 31.12.2017 31.12.2016 Equity ratio1 55.6% 54.5% LTV ratio (consolidated)2 32.4% 34.2% LTV ratio („look-through“)3 34.5% 36.8%
- 17. FINANCIALS Net Asset Value (EPRA) ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 16 in € thousand 2017 2016 Change3 total per share total per share Equity 2,237,376 €36.21 1,916,148 €35.52 16.8% Fair value of financial instruments1 40,405 €0.66 50,499 €0.94 -20.0% Deferred taxes1,2 444,392 €7.19 365,927 €6.78 21.4% Goodwill as a result of deferred tax -53,727 €-0.87 0 €0.00 NAV EPRA 2,668,446 €43.19 2,332,574 €43.24 14.4% Weighted number of shares 61,786,594 53,945,536 8.0% 1 Including the share of joint ventures and associated companies recognized at equity 3 absolute 2 on investment properties and financial instruments
- 18. FINANCIALS Net Asset Value (EPRA) ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 17 30.59 33.17 39.12 43.24 43.19 2013 2014 2015 2016 2017 53.95 53.95 53.95 53.95 61.78 2013 2014 2015 2016 2017 NUMBER OF SHARES mn NAV PER SHARE €
- 19. FINANCIALS Loan Structure1,2 1 as of 31 December 2017 2 excl. non-consolidated loans 21 German and 4 foreign bank partners Weighted maturity of fixed interest periods 5.6 years1 INTEREST LOCKIN DURATION PRINCIPLE AMOUNTS (€ MILLION) SHARE OF TOTAL LOAN AVG. INTEREST RATE Up to 1 year 22.3 1.4% 3.80% 1 to 5 years 3.6 724.2 47.0% 3.83% 5 to 10 years 8.1 658.0 42.7% 2.70% Over 10 years 11.0 137.0 8.9% 1.84% Total1 5.6 1,541.5 100% 2.89% PAGE XY 3.88 3.76 3.69 3.67 2.89 0 2 4 6 8 2.00 2.50 3.00 3.50 4.00 2013 2014 2015 2016 2017 avg. interest rates weighted maturities yrs% ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 18
- 20. FINANCIALS Maturities until 20231,2 ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 19 1 as of 31 Dec. 2017 2 excl. at-equity consolidated loans IN € MILLION END OF FIXED INTEREST PERIODS RESPECTIVELY EXPIRING LOANS AVG. INTEREST RATE REGULAR REDEMPTION PAYMENTS TOTAL MATURITIES 2018 71.6 4.60% 22.3 93.9 2019 123.1 4.73% 19.9 143.0 2020 134.1 4.52% 19.5 153.6 2021 198.3 4.48% 16.0 214.3 2022 217.8 3.26% 16.5 234.3 2023 209.0 2.99% 10.6 219.6 953.9 At-equity consolidated loans1 IN € MILLION END OF FIXED INTEREST PERIODS RESPECTIVELY EXPIRING LOANS AVG. INTEREST RATE DES‘ SHARE 2018-2019 0 2020 35.0 4.00% 50% 2021 63.3 4.59% 50% 2022 12.1 4.90% 50% 2023 0 Phoenix-Center, Hamburg, Saarpark-Center, Neunkirchen Saarpark-Center, Neunkirchen Already fixed: €71.6m, 1.63%, 10y (10/2018) €12.2m, 1.91%, 7.3y (10/2019) €4.9m, 1.68%, 6y (01/2020)
- 21. COMPANY Outlook ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 20 1 Compound Annual Growth Rate (CAGR) 2014 – 2018 2 weighted, taking into account the fact that the convertible bond was nearly fully converted at the end of its term in November 2017 REVENUE €m EBT EXCL. VALUATION €m FFO €m EBIT €m NUMBER OF SHARES2 mn FFO PER SHARE € 120.5 123.4 129.9 148.1 145- 148 2014 2015 2016 2017 2018 53.95 53.95 53.95 58.25 61.78 2014 2015 2016 2017 2018 2.23 2.29 2.41 2.54 2.35- 2.39 2014 2015 2016 2017 2018 125.0 127.0 134.5 153.3 154- 157 2014 2015 2016 2017 2018 200.8 202.9 205.1 218.5 220- 224 2014 2015 2016 2017 2018 177.5 176.3 178.6 192.4 193- 197 2014 2015 2016 2017 2018 +2.5%1 +5.6%1 +5.0%1 +2.4%1 +3.4%1 +1.5%1 S A V E T H E D A T E Conversion of convertible bond
- 22. COMPANY Outlook ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 21 Rollout of “At your Service” and Mall Beautification in 5 Centers: Altmarkt-Galerie Dresden, Billstedt-Center Hamburg, Allee-Center Magdeburg, Rhein-Neckar-Zentrum and Herold-Center Norderstedt Refinancings of approx. €120 million in the next month Increase in dividend to €1.45 per share - for all shares SAVE THE DATE Publication of the Annual Report 2017: 27 April 2018 At your Service: Rhein-Neckar-Zentrum (visualisation)
- 23. APPENDIX Financial Calendar ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 22 2018 21.-23.03. Roadshow USA, Berenberg 27.03. Commerzbank German Real Estate Forum, London 12.04. HSBC German Real Estate Conference, Frankfurt 23.04. Roadshow Geneva, Metzler 27.04. Publication of the Annual Report 2017 15.05. Quarterly Statement 3M 2018 17.-18.05. Roadshow Scandinavia, equinet 23.05. Berenberg European Conference, Tarrytown 29.05. Kepler Cheuvreux German Property Day, Paris 29.-30.05. Roadshow Abu Dhabi and Dubai, Berenberg 30.05. Kempen & Co European Property Seminar, Amsterdam 08.06. Deutsche Bank dbAccess Conference, Berlin 19.06. Roadshow London, Societe Generale 28.06. Annual General Meeting, Hamburg 14.08. Half-year Financial Report 2018 29.08. Berenberg Real Estate Seminar, Helsinki 30.08. Commerzbank Sector Conference, Frankfurt 04.-06.09. EPRA Annual Conference, Berlin 24.-26.09. Goldman Sachs & Berenberg German Conference, Munich 24.-27.09. Baader Investment Conference, Munich 28.09. Societe Generale Pan European RE Conference, London 08.-10.10. Expo Real, Munich 23.10. Roadshow Madrid, M.M. Warburg 24.10. Roadshow Paris, Natixis 14.11. Quarterly Statement 9M 2018 20.11. DZ Bank Equity Conference, Frankfurt 03.-06.12. Berenberg European Conference, Pennyhill
- 24. APPENDIX Contact ANNUAL EARNINGS CONFERENCE CALL – FY 2017 PRELIMINARY RESULTS – 6 MARCH 2018 # 23 NICOLAS LISSNER Manager Investor & Public Relations OLAF BORKERS Chief Financial Officer WILHELM WELLNER Chief Executive Officer PATRICK KISS Head of Investor & Public Relations Deutsche EuroShop AG Investor & Public Relations Heegbarg 36 22391 Hamburg Tel. +49 (40) 41 35 79 – 20/ – 22 Fax +49 (40) 41 35 79 – 29 E-Mail: [email protected] Web: www.deutsche-euroshop.com 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.