Deutsche EuroShop continues its growth trajectory in the first nine months of 2023

Hamburg, 14 November 2023 - Shopping center investor Deutsche EuroShop AG (DES) recorded solid growth in both its operating business and its investment portfolio in the first nine months of financial year 2023. The continuing recovery in customer footfall and tenant revenue is reflected in the following results.

Compared to the first nine months of the previous year, 7.4% more people visited DES shopping centers, while retail sales generated by tenants rose by 11.0%. In addition to this positive trend in the existing portfolio, the acquisitions of shares in six shopping centers at the beginning of the year also had a significant impact on key performance indicators.

In a pro forma comparison based on an identical portfolio, the results were as follows:

• Revenue grew 2.9%, from €197.5 million to €203.2 million.
• Net operating income (NOI) performed well and reached €160.2 million, partly due to lower write-downs of rent receivables.
• Earnings before interest and taxes (EBIT) recorded an increase of 17.9% to €168.7 million, mainly on the back of income from the release of provisions for non-allocable ancillary costs and maintenance as well as lower consulting costs.

"The first nine months of the 2023 financial year reinforced our stable growth trajectory. The recovery in retail sales and the positive developments in our portfolio reflect our commitment to sustainable success,” comments CEO Hans-Peter Kneip.

Earnings before taxes and measurement (EBT excluding measurement gains/losses) climbed by 24.1% to €135.4 million, and adjusted EPRA earnings, which are unaffected by measurement effects, were up by 23.3% from €105.2 million to €129.7 million. Funds from operations (FFO) adjusted for measurement gains/losses and non-recurring effects also rose from €111.0 million to €129.7 million, which represents a gain of 16.8%. At €68.2 million, consolidated profit was down by 12.4% year on year, mainly due to measurement gains/losses. After payment of the dividend (€191.2 million), Group liquidity totalled €280.6 million at the end of the period.

There was also good news from the center portfolio: The future “Foodgarden” under construction at the Main-Taunus-Zentrum is almost completely pre-let. Covering an area of around 7,000m² in the heart of the center, the food court – scheduled to open in spring 2025 – will feature eight local and international restaurant concepts, as well as complementary delicatessen offerings showcasing various culinary specialities.

Construction work and rental activities are also making considerable progress at the Rhein-Neckar-Zentrum. By mid-2024, two new developments will be built on the former site of a DIY store: a modern, free-standing restaurant building with attractive outdoor terraces, operated by L’Osteria, and premises for three new tenants including specialist bike shop B.O.C., the experience concept JUMP House, as well as another indoor entertainment provider.

Deutsche EuroShop is continuing its efforts to attract promising new tenants to its shopping centers. One such tenant worth special mention is Pepco, which has moved into various spaces left vacant following the insolvency of a shoe retail chain. Pepco offers a wide range of clothing, household goods and decorative items at its DES center stores. These new lettings underline the company's flexibility and commitment to continuously increasing the attractiveness of its locations.

Deutsche EuroShop remains on a solid growth path, underpinned by a stable financial basis and a strategically diversified portfolio. Executive Board member, Hans-Peter Kneip: “These latest results are a reflection of our strong position on the market and our solid portfolio geared to sustainable growth. We will continue to pursue this path and confirm our updated FFO forecast for financial year 2023, which we raised to between €2.08 and €2.18 per share in August."

Full quarterly statement

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

Webcast of teleconference

Deutsche EuroShop will hold a conference call for analysts in English at 11 a.m. CET on 15 November 2021, which will be streamed live at 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

¹ Including the share attributable to equity-accounted joint ventures and associates

² European Public Real Estate Association

³ Including third-party interests in equity

⁴ Loan-to-value ratio (LTV ratio): Ratio of net financial liabilities (financial liabilities less cash and cash equivalents) to non-current assets (investment properties and financial investments accounted for using the equity method).

⁵ EPRA loan-to-value ratio (EPRA LTV): Ratio of net debt (financial liabilities and lease liabilities less cash and cash equivalents) to real estate assets (investment properties, owner-occupied properties, intangible assets and other assets (net)). Net debt and real estate assets are calculated on the basis of the Group’s share in the subsidiaries and joint ventures.

⁶ The number of no-par value shares issued for the third quarter of 2023 takes into account, on a time-weighted basis, the capital increase against cash and non-cash contributions carried out at the beginning of 2023 and entered in the Commercial Register on 3 February 2023, as a result of which the number of Deutsche EuroShop AG shares in circulation increased from 61,783,594 to 76,464,319 no-par value shares.

⁷ The pro-forma figures given relate to a comparable group, which was prepared under the assumption that the acquisition of the six property companies had already taken place at the beginning of 2022. Non-recurring effects resulting from the change in the consolidation method and the initial consolidation were not taken into account. Likewise, no ancillary acquisition costs were recognised in the pro-forma figures. For the purpose of improving comparability, the same weighted number of no-par value shares issued was used in the disclosure of consolidated key figures per share.