The international financial markets were comparatively stable in 2004. With economic activity still moderate, the oil price rising to record highs and the US dollar weak, the momentum achieved in the previous year eased slightly. Nevertheless, leading European equity indices closed the year on an upward note. Investors continued to favour second-line stocks. This also benefited Deutsche EuroShop’s shares, which in September were admitted to the MDAX, Germany’s leading mid-cap index.
Events on the DAX, Germany’s premier equity index, were calmer in 2004 than they had been in previous years (2002: -44%, 2003: +37%). The index rose by 7.3% overall, from 3,965 to 4,256 points, and was thus only slightly down on its 52-week high on the last day of trading. As in 2003, second-line stocks last year met with keen interest on the part of investors: the MDAX index of mid-cap stocks gained 20.3% from its 2003 year-end close and climbed to a new all-time high, surpassing even the previous high reached in March 2000. The SDAX, comprising the top 50 companies below the MDAX, rose even more sharply, adding 21.6% in the course of the year. Only the TecDAX, the benchmark index for technology and growth stocks, recorded a slight fall of 3.8%.
*) Corio, Eurocommercial Properties, Klepierre, Liberty International und Rodamco Europe
On 20 September 2004, Deutsche EuroShop’s shares joined the MDAX, the German mid-cap index. Deutsche Börse AG’s Equity Indices Working Group gave the go-ahead for the switch to the MDAX after our shares fulfilled both criteria (market capitalisation and market turnover) required for admission to the index for the first time in August. This means that we achieved one of our most important medium-term goals just 18 months after joining the Prime Standard. Our average daily trading volume almost tripled, rising from 6,200 shares in the previous year to 18,300 shares in financial year 2004 and thus cementing our place in the MDAX.
As expected, our shares were admitted to the EPRA Index (European Public Real Estate Association), a leading global index for property shares, on 1 January 2004. Then in April 2004, they were admitted to the second recognised index for property shares, the GPR 250 (GPR – Global Property Research). We hope that the increased profile that comes with belonging to the various indices will enable us to reach even more investors and convince them of the benefits of our shopping center shares.
In 2004, we continued our IR activities, which aim to attract additional investors for Deutsche EuroShop’s shares. We presented our Company to international investors at seven national and international roadshows and four major capital market conferences, where we met with a positive response. We also held numerous one-on-one meetings with investors and analysts. Nine analysts (as at 31 March 2005) at well-known institutions in Germany and other European countries now monitor our shares on a regular basis, opening up new groups of investors as a result of their recommendations. For further information on the individual recommendations, please visit our website at www.deutsche-euroshop.com/research. Other banks are also planning to start research coverage of Deutsche EuroShop.
One of the most important IR events each year is the Ordinary General Meeting, which last financial year we convened for 17 June in Frankfurt am Main. The 120 or so shareholders in attendance represented 67.6% of the capital and unambiguously approved all agenda items with over 99.6% of the votes. The main items on the agenda concerned the creation of authorised capital, the relocation of the Company’s domicile from Eschborn to Hamburg and the election or re-election of three Supervisory Board members. In this context, DB Real Estate Management GmbH completed the process of hiving off Deutsche EuroShop from the Deutsche Bank Group by foregoing its right, in accordance with the Articles of Association, to appoint two Supervisory Board members.
In 2004, Deutsche EuroShop received the “Capital Investor Relations Prize” in the SDAX category for its investor relations activities. Each year, the financial magazine Capital awards this well-known prize in recognition of the best communication with the financial markets, judging companies on the criteria timeliness, credibility, quality and corporate governance. We took part in Manager Magazin’s “Best Annual Report” ranking for the first time with our 2003 annual report and ranked a respectable fourth in the SDAX category, only just failing to make it into the top three. In the “International ARC Awards – The World’s Best Annual Reports” competition, our 2003 annual report received two awards, one in the “Real Estate” category and one in the “Judges’ Choice” category.
In June 2004, we re-launched our website with an improved structure and new layout. While the modern design follows the annual and quarterly reports, we have focused the content even more tightly on investor relations and providing information for the capital markets. New features include our online annual report, which enables readers to gain a quick overview of business developments on the Internet – with just a few clicks and without a long search. It was so well received by our online visitors that we will also prepare interactive, online versions of our quarterly reports in future (www.deutsche-euroshop.com/reports). In the IR Benchmark 2004 ranking by NetFederation and Handelsblatt, which focused mainly on content and service, the new website went straight to third place in the MDAX.
Unlike the more common bearer shares, our registered shares offer us the opportunity to “spoil” our shareholders with extra services. For example, Deutsche EuroShop’s shareholders regularly receive all interim and annual reports by post – something that contributes greatly to enhanced shareholder relationships and loyalty. Via our website, shareholders can view and update the addresses stored for them in the share register and add an e-mail address, for example. There are currently around 7,000 shareholders (as at 31 March 2005) on Deutsche EuroShop’s register, over 15% more than there were in March 2004.
On 21 October 2004, around 150 industry experts, investors, analysts and journalists from Germany and abroad met in Frankfurt am Main for the fourth Initiative Immobilien-Aktie (Property Share Initiative) conference. Interest in this initiative, which was co-founded by Deutsche EuroShop, grows from year to year. For the first time, the event was designed as a capital market conference: in addition to Deutsche EuroShop, six other listed German property companies gave presentations, and a number of one-on-one and group meetings with investors and analysts took place during the event. The main subject of the fourth conference was the possible introduction in Germany of REITs (Real Estate Investment Trusts).
The Anlegerschutzverbesserungsgesetz (AnSVG – Investor Protection Improvement Act) has been in force since 30 October 2004. It implements the European Market Abuse Directive into national law and reformulates and tightens the legislation governing insider trading, ad hoc disclosures and directors’ dealings. At the same time, a series of new and extensive requirements were put in place, such as the requirement to maintain insider lists. Deutsche EuroShop's actions and communication have always been based on transparency and honesty. We therefore welcome the introduction of this Act and support its further development and implementation.
By preparing our annual financial statements in accordance with IFRSs, we are removing a handicap that, under HGB accounting, previously made it difficult for us to communicate with investors outside Germany. Our results are now internationally comparable and require fewer explanatory notes. Having laid the foundations in this way, our goal this year is to increase awareness abroad of Deutsche EuroShop’s positive outlook and potential, but without neglecting our domestic market. Foreign investors are increasingly interested in our shares – not least due to the plans to introduce REITs in Germany. Between November 2004 and March 2005 alone, their share in the Company more than tripled from 4% to almost 13%.
The Executive Board and the Supervisory Board will again propose the distribution of a dividend of € 1.92 per share for financial year 2004 to the Annual General Meeting, which is to be held in Hamburg on 23 June 2005. With our long-term strategy of a dividend policy based on continuity and a comparatively high yield of around 5% (on the 2004 year-end closing price of € 38.51), we hope to cement the confidence of our existing shareholders and attract new shareholders. In future too, we intend to distribute a dividend of at least € 1.92 per share.
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Keen interest in second-line stocks
Market capitalisation increased
Low volatility of
High trading volume
Member of the EPRA Index
Strong interest
Quick overview on the Internet
Foreign investors discover
Dividend strategy
Requirement fulfilled |
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