Deutsche EuroShop: Portfolio and results growth

• Optimisation of the portfolio structure through the acquisition of additional minority interests in six shopping centers
• Successful cash and non-cash capital increase
• Significant increase in earnings due to expanded scope of consolidation and good operating growth
• Dividend proposal for financial year 2022: €2.50 per share
• FFO forecast 2023: €2.00 to €2.10 per share

Hamburg, 11 May 2023 – The shopping center investor Deutsche EuroShop (DES) today presented its results for the first three months of financial year 2023. “We have achieved some encouraging results, both strategically and operationally,” explains Executive Board member Hans-Peter Kneip. “On the one hand, acquisitions of additional shares in six of our existing shopping centers led to significant portfolio growth as well as an improvement in key performance indicators. On the other hand, our operating business continued to make good progress thanks to a continued recovery in customer footfall and tenant turnover in our shopping centers.”

Strategic portfolio optimisation

Deutsche EuroShop’s portfolio structure was optimised in February 2023 by increasing its stake in six shopping centers from the existing portfolio from 75% to 100%. With this the management strengthened its financial profile, which will benefit the company in the context of future financing measures and will also improve its ability to pay dividends. Furthermore, the share acquisitions bolster our flexibility with regard to possible future portfolio adjustments.

These share acquisitions were financed by means of a capital increase with subscription rights against cash and non-cash contributions. The DES management raised €315.6 million by issuing 14,680,725 new shares at a ratio of 21:5 and a subscription price of €21.50 per share. €304.1 million was used to acquire shares, while €11.5 million of the proceeds from the issue are available for a possible future acquisition of additional minority interests.

This portfolio optimisation has significantly improved Deutsche EuroShop’s key performance indicators. But even without the share acquisitions, the operating performance trended higher. Rental income increased by 3.9% on a like-for-like basis. DES tenant partner sales continued to perform well, reaching 97.5% of 2019 levels in the first quarter. “Adjusted for inflation, you can see a trend towards more targeted visits to our shopping centers with increased sales per guest”, notes Executive Board member Hans-Peter Kneip.

Significant increase in earnings

The share acquisitions and the operational revival had a clear positive impact on the financial figures in the first quarter. Revenue increased by 30.2% to €67.8 million, and net operating income (€54.5 million, +35.1%) and EBIT (€57.4 million, +46.2%) rose significantly compared with the same quarter of the previous year, also because significantly lower write-downs on rent receivables needed to be recognised. Earnings before taxes and measurement gains/losses (EBT excluding measurement) climbed by 36.4% to €45.5 million, while EPRA earnings were up by 41.2% to €44.2 million. FFO adjusted for valuation and special effects rose by equal measure (€44.2 million, +41.2 %). Group liquidity has increased from €334.9 million to €404.5 million since year-end 2022.

FFO forecast at €2.00 to €2.10 per share

For the current financial year, the Executive Board expects FFO of €2.00 to €2.10 per share – based on a time-weighted number of 75,137,020 no-par value shares issued for financial year 2023.

€2.50 per share proposed as dividend

The Executive Board and Supervisory Board intend to propose a dividend of €2.50 per share for financial year 2022 to the Annual General Meeting in order to distribute to shareholders portions of the earnings retained for precautionary reasons during the coronavirus pandemic. The Annual General Meeting is scheduled to be held as an in-person event on 29 August 2023.

Full quarterly statement

The full quarterly statement is available as a PDF document and in ePaper format. It can be downloaded from www.deutsche-euroshop.com/ir

Deutsche EuroShop – The Shopping Center Company

Deutsche EuroShop is the only public company in Germany to invest exclusively in shopping centers in prime locations. The company currently has investments in 21 shopping centers in Germany, Austria, Poland, the Czech Republic and Hungary. The portfolio includes the Main-Taunus-Zentrum near Frankfurt, the Altmarkt-Galerie in Dresden and the Galeria Baltycka in Gdansk, among many others.

Key consolidated figures