Deutsche Euroshop Newsroom

Corporate News

09.03.2012

Deutsche EuroShop: revenue and operating profit up by a third in 2011

  • Results for 2011: revenue: EUR190.0 million, EBIT: EUR165.7 million
  • FFO: EUR1.61 per share, NAV per share: EUR27.65
  • Profit: EUR93.4 million
  • Dividend stable at EUR1.10 per share
  • 10% revenue growth and 8% earnings growth anticipated for 2012


Hamburg/Frankfurt am Main, 9 March 2012 – The shopping center investor Deutsche EuroShop AG, Hamburg, announced provisional results for financial year 2011 at today’s press conference in Frankfurt. Once again, the Company has exceeded its own revenue and earnings forecasts. Deutsche EuroShop added the Billstedt-Center in Hamburg and the Allee-Center in Magdeburg to its portfolio in 2011, as well as increasing its shareholdings in various other shopping centers.

 

Group revenue increased by 32%, from EUR144.2 million to EUR190.0 million, during financial year 2011. The first-time full consolidation of the Main-Taunus-Zentrum, the Phoenix-Center and the Billstedt-Center (latter two both in Hamburg) and the first-time consolidation of the Allee-Center Magdeburg made significant contributions to revenue growth. Rental income from the Altmarkt-Galerie and, after completion of the expansion measures, from the A10 Center also rose considerably. Rental income from portfolio properties increased by 1.2% on a like-for-like basis.

 

The vacancy rate for retail space remained stable below 1%, as in previous years, at 0.4%. At EUR0.4 million (2010: EUR0.6 million) or 0.2% (2010: 0.4%), the need for write-downs for lost rental income remained at an extremely low level. Olaf Borkers, CFO of Deutsche EuroShop, said: “Our centers have an outstanding tenant mix. Our retailers are happy with the volume of customers and sales, and we are pleased about the low level of lost rent, further reductions in the cost ratio – at 9.7% for 2011 this was below the previous year’s figure of 10.5% – and increasing rental income.”

 

Net finance costs increased by EUR18.9 million to EUR79.1 million (2010: EUR60.2 million), which can be attributed solely to the extended scope of consolidation and the financing of expansion measures at three centers. Measurement gains of EUR41.8 million were achieved in the year under review, representing an increase of EUR8.7 million over the previous year (EUR 33.1 million). Measurement of the portfolio properties led to measurement gains of EUR54.3 million, with an average increase in value of 1.9%. Net asset value (EPRA NAV) as at 31 December 2011 was EUR1,427.8 million (+4.9%), or EUR27.65 per share.

 

Earnings before interest and taxes (EBIT) increased by 34% in the year under review, from EUR124.0 million to EUR165.7 million. Earnings before taxes and measurement gains/losses (EBT before measurement) rose by 35% from EUR63.9 million to EUR86.5 million; with measurement gains included, EBT rose from EUR97.0 million to EUR128.4 million (+32%).

 

An unexpected change in the framework affected the tax result. Due to a ruling by the German Federal Fiscal Court (Bundesfinanzhof), the Company is unlikely to be able to continue applying the “extended trade tax deduction”. As a result, all domestic income will be subject to trade tax. This also affects past financial years and has led to an adjustment to the 2010 annual financial statements. Tax expense in the 2010 financial statements was increased by EUR87.5 million for deferred trade tax and EUR2.1 million for back-payments of trade tax. Consequently, the 2010 financial statements show a consolidated loss of EUR7.8 million. By contrast, consolidated profit for financial year 2011 was EUR93.4 million.

 

Earnings per share were EUR1.81, compared with EUR-0.17 in the previous year. Of this amount, EUR1.19 was attributable to operations (corresponding to the EPRA earnings definition; 2010: EUR0.98) and EUR0.62 to measurement gains (2010: EUR0.54).

 

During the year under review, FFO of EUR83.1 million was generated, a rise of 35% over the previous year (2010: EUR61.5 million). FFO per share rose by 19% from EUR1.35 to EUR1.61.

In view of the successful financial year, the Executive Board and Supervisory Board will propose to the shareholders at the Annual General Meeting in Hamburg on 21 June 2012 that an unchanged dividend of EUR1.10 per share be distributed for financial year 2011.

 

Outlook

For financial year 2012, Deutsche EuroShop expects to achieve an increase in revenues of around 10% to EUR207-211 million. “We are only planning based on our portfolio properties; we are cautiously optimistic as regards new investments,” states CEO Claus-Matthias Böge. “Last year, insurance companies and foreign pension funds were very active in the German shopping center market, although contrary to expectations the first ten weeks of the new financial year have been rather quiet.”

The Company forecasts that earnings before interest and taxes (EBIT) will rise to EUR177-181 million (+8%) in 2012. Earnings before taxes and measurement gains/losses (EBT before measurement) are expected to increase to EUR90-93 million (+6%) this year. The Company expects funds from operations (FFO) of EUR1.64-1.68 per share (+3%) in 2012.


Webcast of the conference call

Deutsche EuroShop will webcast its English conference call on Friday, 9 March 2012, at 3:00 p.m. CET live on the Internet. The webcast can be accessed at the Company's website at
http://www.deutsche-euroshop.com/ir.


Deutsche EuroShop – The Shopping Center Company

Deutsche EuroShop is Germany’s only public company, that invests solely in shopping centers in prime locations. The MDAX-listed Company currently has equity interests in 19 European shopping centers in Germany, Austria, Hungary and Poland. The portfolio includes the Main-Taunus-Zentrum near Frankfurt, the Altmarkt-Galerie in Dresden and the Galeria Baltycka in Gdansk, among many others.

 

Key Data of Deutsche EuroShop (IFRS)

in EUR million

2011

2010

+/-

Revenue

190.0

144.2

32%

EBIT

165.7

124.0

34%

Net finance costs

-79.1

-60.2

-31%

Measurement gains/losses

41.8

33.1

26%

EBT

128.4

97.0

32%

Consolidated profit

93.4

-7.8


FFO per share (€)

1.61

1.35

19%

Earnings per share (€)*

1.81

-0.17


Equity*

1,472.9

1,441.5

2%

Liabilities

1,752.2

1,522.1

15%

Total assets

3,225.1

2,963.6

9%

Equity ratio (%)*

45.7

48.7


LTV-ratio (%)

47

47


Gearing (%)*

119

106


Cash and cash equivalents

64.4

65.8

-2%

Net asset value (EPRA)

1,427.8

1,361.7

5%

Net asset value per share (€, EPRA)

27.65

26.37

5%

Dividend per share (€)

1.10**

1.10

0%


* incl. non controlling interests   ** proposal

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