26.04.2018
DEMIRE Deutsche Mittelstand Real Estate AG DE000A0XFSF0
DGAP-News: DEMIRE AG: First Positive Effects of DEMIRE 2.0 Strategy Felt during 2017 Financial Year
DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s): Final
Results/Statement
DEMIRE AG: First Positive Effects of DEMIRE 2.0 Strategy Felt during 2017
Financial Year
26.04.2018 / 07:00
The issuer is solely responsible for the content of this announcement.
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DEMIRE AG: First Positive Effects of DEMIRE 2.0 Strategy Felt during 2017
Financial Year
* FFO I forecast achieved at EUR 11.7 million (31/12/2016: EUR 8.1
million)
* Net Loan-to-Value drops to 60.1% (31/12/2016: 62.8%)
* Diluted EPRA-NAV per share rises by EUR 0.34 to EUR 4.94 (31/12/2016:
EUR 4.60)
* EPRA vacancy rate declines by 220 bp to 9.4% (31/12/2016: 11.6%)
* Forecast for 2018: FFO I of c. EUR 16-18 million, rental income EUR
71-73 million
* Board publishes statement of position pursuant to Art. 27, Sec. 3,
Securities Acquisition and Takeover Act, regarding takeover bid by AEPF
III 15 S.à.r.l
Langen, 26 April 2018 - Today, DEMIRE Deutsche Mittelstand Real Estate AG
(ISIN: DE000A0XFSF0) published its annual report for the 2017 financial
year. It shows that DEMIRE achieved its primary objectives for the year as
well as its forecast concerning the funds from operations (FFO I, after
taxes and before minority interests) while also collecting the full amount
predicted in terms of rental income. As of the balance sheet date, the FFO I
totalled EUR 11.7 million (31 December 2016: EUR 8.1 million). The increase
in FFO I year on year is specifically attributable to the improved current
financial results and to a decrease in current income taxes. With a view to
its robust performance, DEMIRE had already raised the FFO I year-end
forecast for 2017 on the strength of its nine months' revenues from EUR 8-10
million up to EUR 11-12 million. The earnings before interest and tax (EBIT)
increased by EUR 1.5 million over prior year up to EUR 84.7 million (2016
financial year: EUR 83.2 million), more or less matching the prior-year
level. With the one-year drop in proceeds from property sales taken into
account, the funds from operations (FFO II) after taxes and before minority
interests added up to EUR 12.6 million (2016 financial year: EUR 13.0
million), and equalled EUR 6.5 million (2016 financial year: EUR 7.5
million) after taxes and after minority interests.
Ralf Kind, CEO/CFO of DEMIRE AG, commented: "The concluded financial year
confirmed that we are following a successful approach with the consistent
implementation of our DEMIRE 2.0 strategy. In addition to the further
efforts to optimise our Group structure, we will focus specifically on the
upcoming growth stages and thus on the expansion of our real estate
portfolio. We are therefore pleased to have found another experienced
strategic investor in Apollo who, together with our other anchor
shareholder, Wecken & Cie, fully backs our DEMIRE 2.0 strategy and moreover
actively supports the planned growth of DEMIRE."
Major Reduction of the Net Loan-to-Value ratio
The rent revenues of the DEMIRE Group totalled EUR 73.7 million (2016: EUR
76.4 million) and thus fall within the range of the raised forecast of c.
EUR 74 million that was made in November 2017. The decline over prior year
is explained by the disposal of non-strategic properties, and it should be
added that the drop in rent revenues caused by the sales was largely
compensated through the successful elimination of vacancies. The profit for
the period dropped to EUR 19.4 million (31 December 2016: EUR 27.6 million),
which is essentially due to the one-off increase in financial results.
Included in the sum are one-off expenses in the amount of c. EUR 16.4
million, specifically pre-repayment penalties for the premature redemption
of existing financing arrangements through the new 2017/2022 corporate bond.
Compared to year-end 2016, the net loan-to-value ratio improved
significantly by around 270 basis points to 60.1% (31 December 2016: 62.8%).
The improvement of net loan-to-value ratio year on year is essentially
explained by the appreciation of portfolio real estate and the increase in
means of payment over prior year as of the balance sheet date.
As of 31 December 2017, the shareholders' equity of DEMIRE had increased by
EUR 10.5 million to EUR 319.1 million (31 December 2016: EUR 308.6 million).
The basic EPRA-NAV per share rose to EUR 5.96 (31 December 2016: EUR 5.69)
while the diluted EPRA-NAV per share climbed by EUR 0.34 to EUR 4.94 (31
December 2016: EUR 4.60). This means that the diluted EPRA-NAV per share
went up by 7.4% in spite of certain one-off expenses (especially for the
refinancing arrangement).
Lower Refinancing Costs
In the course of 2017, the average nominal interest rate of the company's
financial liabilities was reduced from 4.4% p.a. as of 31 December 2016 down
to 3.0% at the end of the reporting period. The decrease is mainly due to
the initial placement of an unsecured, rated corporate bond over EUR 270
million in July 2017 and the successful increase of that same bond to a
total of EUR 400 million in September 2017 for refinancing purposes and the
associated redemption of expensive financial liabilities. The reduced
interest and redemption expenses will lead to a significant increase in the
annual cash flow by a total of c. EUR 18 million in 2018 and subsequent
years. As of the balance sheet date of 31 December 2017, unsecured property
assets accounted for around 45% of the DEMIRE Group's total portfolio.
EPRA Vacancy Rate Declines
As of 31 December 2017, the book value of the proprietary portfolio equalled
EUR 1,034.1 million (31 December 2016: EUR 1,005.6 million). At around 4.9
years, the weighted average lease expiry remains more or less as high as it
was (31 December 2016: 5.3 years). The property portfolio achieved a net
increase in value of EUR 48.6 million (2016: EUR 38.4 million) during the
2017 financial year. This translates into gross rental returns of 7.0% as of
the balance sheet date for the proprietary portfolio and into a square-metre
value of EUR 1,067.
Owing to the robust letting performance in the course of the financial
year-meaning as a result of new rentals and with sold properties taken into
account-the EPRA vacancy rate of the proprietary portfolio dropped by a
total of 220 basis points to 9.4% at the end of the financial year (31
December 2016: 11.6%). The annualised rental income of the proprietary
portfolio, adjusted by acquisitions and disposals (like-for-like approach),
rose by 2.6% during the 2017 financial year.
Forecast for 2018 by the Executive Board
During the 2018 financial year, DEMIRE plans to generate rental income of
around EUR 71-73 million from the real estate it held in its portfolio by 31
December 2017 (after the disposal of properties already sold and taking into
account planned sales). Considering both the anticipated rental income and
the positive effects of the first DEMIRE 2.0 strategy milestones that were
implemented during the 2017 financial year, DEMIRE expects to see a
substantially increased FFO I result of EUR 16-18 million in 2018.
Particularly the significant reduction in current interest expenses and the
successful tax optimisation within the Group structure by the end of 2017
will cause the FFO I (after taxes, before minority interests) to go up as
expected.
DEMIRE Publishes Statement of Position Regarding Takeover Bid by AEPF III 15
S.à.r.l
In accordance with Art. 27, para. 3 of the German Act on Securities
Acquisition and Takeovers (WpÜG), the Executive Board and the Supervisory
Board of DEMIRE Deutsche Mittelstand Real Estate AG published their joint
statement of position today concerning the mandatory offer (cash offer)
submitted by AEPF III 15 S.à.r.l.
Considering the comments in the statement and taking into account the
overall circumstances of the offer, the Executive Board and the Supervisory
Board believe that the cash consideration offered by the bidder in the
amount of EUR 4.35 per share in cash to be fair within the meaning of
Section 31 para. 1 of the German Securities Acquisition and Takeover Act
(WpÜG). Both the Executive Board and the Supervisory Board are of the
opinion that the offer reflects the company's interests. The Executive Board
and the Supervisory Board therefore support the offer and recommend that the
shareholders of the target company accept the offer.
For the full-length statement by the Executive Board and the Supervisory
Board of DEMIRE Deutsche Mittelstand Real Estate AG, please click the link
below to go to the company homepage:
https://www.demire.ag/en/investor-relations/takeover-offer-by-aepf-iii-15-s-r-l
DEMIRE 2.0 - Strategy for the Company's Next Growth Phase
The "DEMIRE 2.0" strategy signifies the Company's next growth phase. The
implementation of an integrated action plan-which, among other things, seeks
to reduce the financing costs, optimise costs and to streamline the Group
structure-is a cornerstone of the plan to expand the current portfolio to a
volume of EUR 2 billion. The business model's focus remains on the
acquisition of commercial property in German secondary locations. The cost
base will continue to be optimised under this programme through permanent
improvements in efficiency and economies of scale in real estate management
resulting from the Company's growth. Further optimisation of the financing
mix and, specifically, continuous examination of potential refinancing
options in the debt and equity markets is expected to bring down the average
interest costs and to lower the loan-to-value ratio down to around 50% in
the medium term. In addition to increasing its market capitalisation, DEMIRE
also aims to position its risk profile in the "investment grade" category to
secure sustainable long-term financing on favourable terms with a view to
future growth. DEMIRE's anchor shareholders back the DEMIRE 2.0 strategy and
intend moreover to support the growth of DEMIRE.
To download the 2017 Annual Report, use the following link to the homepage
of DEMIRE: https://www.demire.ag/en/investor-relations/reports-results/2017
Invitation to the Conference Call on 26 April 2018
DEMIRE's Executive Board member, Ralf Kind (CEO / CFO), invites anyone
interested to join him for a conference call at 11:00 am (CEST) for a
presentation of the 2017 financial year.
Please use the following dial-in numbers:
Germany: +49 (0)69 2222 13420
UK: +44 (0)330 336 9105
USA: +1 323-794-2551
France: +33 (0)1 76 77 22 74
Switzerland: +41 (0)44 580 7206
PIN: 1635165
The earnings presentation will also be broadcast live via webcast. Please
use the link www.audio-webcast.de and the following login: demire0418. To
hear the presentation, please use the dial-in numbers above. The
presentation will also be made available on our website at www.demire.ag
shortly before the call.
Selected Group Key Figures of DEMIRE Deutsche Mittelstand Real Estate AG
01/01/201- 01/01/201-
7- 6-
31/12/201- 31/12/201-
7 6
Consolidated statement of
income (in EUR millions)
Rental income 73,716 76,371
Profit/loss from the 55,632 58,570
rental of real estate
Gain or loss on fair 48,560 38,414
value adjustments of
investment properties
General and 22,828 21,872
administrative expenses
and other operating
expenses
EBIT 84,671 83,169
Financial result -57,042 -43,207
Net profit/loss for the 19,432 27,649
period
- thereof attributable to 13,783 24,670
parent company
shareholders
FFO I (after taxes, 11,738 8,095
before minority
interests)
FFO II (after taxes, 12,600 13,019
before minority
interests)
Basic/diluted earnings 0.25 / 0.48 /
per share (EUR) 0.22 0.39
Consolidated balance 31/12/201- 31/12/201-
sheet (in EUR millions) 7 6
Total assets 1,147,116 1,094,006
Investment properties 1,021,847 981,274
Cash and cash equivalents 73,874 31,289
Real estate held for sale 12,262 24,291
Equity 319,101 308,637
Equity ratio (in % of 27.8 28.2
total assets)
EPRA NAV attributable to 323,572 / 300,459 /
DEMIRE shareholders (EUR, 335,620 312,506
basic/diluted)
EPRA NAV per share (EUR, 5.96 / 5.54 /
basic/diluted) 4.94 4.60
Net financial liabilities 621,041 631,354
Net Loan-to-value (net 60.1 62.8
LTV) in %
Portfolio key figures 01/01/2017 - 01/01/2016-
31/12/2017 31/12/2016
Properties (number of) 86 174
Gross asset value (in EUR 1,034.1 1,005.6
millions)
Gross rental income p.a. (in 72.1 74.1
EUR millions)
GRI yield (in %) 7.0 7.4
EPRA vacancy rate (in %) * 9.4 11.6
WALT (in years) 4.9 5.3
* Excluding properties held for sale
The Executive Board
Contact
DEMIRE Deutsche Mittelstand Real Estate AG
Robert-Bosch-Strasse 11
D-63255 Langen
Phone: +49 (0) 6103 - 372 49 - 0
Fax: +49 (0) 6103 - 372 49 - 11
[email protected]
www.demire.ag
Press Contact Investor Relations
RUECKERCONSULT GmbH DEMIRE Deutsche Mittelstand Real Estate AG
Nikolaus von Raggamby Peer Schlinkmann
Tel.: +49 30 28 44 987 40 Tel.: +49 6103 372 49 44
Email: [email protected] Email: [email protected]
About DEMIRE Deutsche Mittelstand Real Estate AG
DEMIRE - First in Secondary Locations
DEMIRE Deutsche Mittelstand Real Estate AG has commercial real estate
holdings in mid-sized cities and up-and-coming locations bordering German
metropolitan areas. The company's specific forte is its focus on these
second-tier cities-its claim being "First in Secondary Locations"-and on a
range of assets that appeals to both internationally active and regionally
rooted tenants. Having expanded rapidly between 2013 and 2016 both by buying
single properties and by acquiring equity interests, DEMIRE held a portfolio
with a combined lettable area of around 1 million sqm and a fair market
value of more than EUR 1 billion by the end of the 2017 financial year.
The portfolio focus on office, retail and logistics assets results in
exactly the kind of risk/reward structure that DEMIRE considers appropriate
for the business line of commercial real estate. The Company puts a premium
on long-term contracts with solvent tenants in anticipation of stable and
sustainable rent revenues. DEMIRE has set itself the goal to keep optimising
its corporate structure. To this end, it pursue an active property
management approach out of the conviction that it is the best way to achieve
economies of scale and portfolio optimisations.
DEMIRE Deutsche Mittelstand Real Estate AG shares (ISIN: DE000A0XFSF0) are
listed in the Prime Standard segment of the Frankfurt Stock Exchange.
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26.04.2018 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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Language: English
Company: DEMIRE Deutsche Mittelstand Real Estate AG
Robert-Bosch-Straße 11 im 'the eleven'
63225 Langen (Hessen)
Germany
Phone: +49 6103 37249-0
Fax: +49 6103 37249-11
E-mail: [email protected]
Internet: www.demire.ag
ISIN: DE000A0XFSF0
WKN: A0XFSF
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Stuttgart,
Tradegate Exchange
End of News DGAP News Service
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