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DES GB2013 E

DEUTSCHEEUROSHOPANNUALREPORT2013/GROUPMANAGEMENTREPORT 121 COURSE OF BUSINESS As reported on previous occasions, the amendments to the Inter- national Accounting Standards regarding the permissibility of propor- tional consolidation of our joint ventures have been approved, but the changes only became mandatory as at 2014. Nevertheless, as previ- ously announced, we have chosen to recognise these companies using the equity method from 1 January 2013 pursuant to IAS 31. Consequently, the share in the revenue and costs of these companies will no longer be included in the consolidated financial statements. Instead, only the at-equity earnings of these shopping centers will be reported under net finance costs. The change will affect four joint ventures previously reported using the proportional method. The change in the accounting method has entailed a restatement of the 2012 annual financial statements, which also affects the figures provided by way of comparison in this report. Details of the changes to the 2012 consolidated financial statements can be found in the notes (changes in accounting policies). In addition, Stadt-Galerie Passau KG and Immobilien KG FEZ Harburg – which were previously included in the consolidated financial state- ments under a voting agreement – are now recognised as at-equity joint ventures from 1 January 2013. The voting agreements were ter- minated by mutual agreement at the end of 2012. FINANCIAL POSITION Deutsche EuroShop can look back on another successful financial year. Revenue and profit advanced significantly versus 2012. The acquisition of the Herold-Center in Norderstedt on 1 January 2013 boosted earnings considerably, as did the sale of our one-third inter- est in Galeria Dominikanska in Breslau. The acquisition of third-party interests in Altmarkt-Galerie Dresden and the subsequent consolida- tion of the center have also allowed us to optimise the Group’s legal structure. Net assets and our financial structure remain solid. Favourable refi- nancing arrangements have made a positive contribution to earnings. Revenue rose by 5.5% to €188.0 million, while consolidated profit came to €171.0 million (2012: €122.5). Earnings per share came in at €3.17 compared with €2.36 in 2012. Operating profit per share advanced 28% from €1.36 to €1.74. Valuation gains improved considerably in 2013 to €56.0 million, up from €13.9 million in 2012. The valuation gains on equity-accounted joint ventures came to €2.4 million, up €8.4 million versus 2012 (€–6.0 million). Earnings before tax climbed around 36% year-on-year to €129.2 million (2012: €95.1 million). After adjustments for the pro- ceeds of the sale of the interest in Ilwro Sp.zo.o (Galeria Dominikan- ska) totalling €15.8 million, earnings before tax were up around 19% at €113.4 million. The EPRA net asset value per share rose by 7.2% from €28.53 to €30.59. RESULTS OF OPERATIONS Revenue in the German retail trade (excluding the vehicle trade) rose by a nominal 1.4% over the reporting year, while the revenue of the tenants in our German shopping centers slipped 0.1%. In contrast, tenants in foreign properties posted revenue growth of 3.3%. CONSOLIDATED REVENUE UP 5.5% Consolidated revenue was up 5.5%, from €178.2 million to €188.0 mil- lion, in the financial year. The Herold-Center in Norderstedt, which was acquired on 1 January 2013, and the Altmarkt-Galerie Dresden, which was fully consolidated from 1 May 2013, contributed significantly to revenue growth. Meanwhile, revenue from the Stadt-Galerie in Passau and the Phoenix-Center in Hamburg are no longer recognised due to the switch to at-equity reporting in the year under review. These two properties generated revenue totalling €21.1 million in 2012. For ten properties, the rise in revenue was largely due to index- related rental increases. Renovation work at the Rhein-Neckar- Zentrum and one-off effects in the A10 Center saw revenues fall slightly. Overall, comparable revenue rose by 1.4% (1.3% in domestic, 2.4% international) on a like-for-like basis over the reporting year. International Domestic 188.0 2013 178.2 14.4 14.7 163.8 173.3 2012 REVENUE € MILLION 21.1 142.7

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