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ePaper created 2014-08-13, 09:54:36 | version 1.32.01
deutsche euroshoP InterIm rePort h1 2014 02 management system The Executive Board of Deutsche EuroShop manages the Company in accordance with the provisions of German company law. The Executive Board’s duties, responsibilities and business procedures are laid down in its rules of procedure and in its schedule of respon- sibilities. The management indicators are based on the targets of having shopping centers with sustainable and stable value growth and a high liquidity surplus generated by long-term leases. These indica- tors are revenue, EBT (earnings before taxes) excluding valuation gains/losses and FFO (funds from operations). Economic Review mAcROEcOnOmic And sEctOR-sPEciFic cOnditiOns Germany continued to be Europe’s economic dynamo. The German economy grew by 0.8% in the first quarter of 2014, primarily due to a good investment ratio. The companies largely rate their business situation as positive and benefit from continued stability in terms of domestic demand, not least as a result of pleasing salary develop- ments and low interest rates on investments. Retail sales grew in real terms by 1.5% in the first six months of the year. Unemployment levelled off at a relatively low level of 6.5%. The mild winter brought less pronounced growth in unemployment figures at the beginning of the year and this increase was also reduced again sooner and at an even faster rate. 2.83 million people were registered as unem- ployed in June. All in all, last year’s positive showing appears to be persisting. Ten- sion in the Middle East and Ukraine, however, could cause economic developments to deteriorate. Basic Information about the Group gROuP stRuctuRE And OPERAting ActiVitiEs busIness model Deutsche EuroShop AG is the only public company in Germany to invest solely in shopping centers in prime locations. On 30 June 2014, the Company held investments in 19 shopping centers in Ger- many, Austria, Poland and Hungary. The Group generates its reported revenue from rental income on the space which it lets in the shopping centers. Due to its lean personnel structure, Deutsche EuroShop Group is centrally organised. The parent company, Deutsche EuroShop AG, is responsible for corporate strategy, portfolio and risk management, financing and communication. The Company’s registered office is in Hamburg. Deutsche EuroShop is an Aktiengesellschaft (public company) under German law. The individual shopping centers are managed as separate companies and, depending on the share of nominal capital owned, are either fully consolidated or accounted for using the equity method. The share capital amounts to €53,945,536 and comprises 53,945,536 no-par value registered shares. The notional value of each share is €1.00. objectIves and strategy The management focuses on investments in high-quality shopping centers in city centers and established locations offering stable long-term value growth. Another key investment target is the gen- eration of high surplus liquidity from long-term leases in shopping centers, which is paid out to shareholders in the form of an annual dividend. In order to achieve these targets, the Company invests its capital in shopping centers in different European regions in accord- ance with the principle of risk diversification. Germany is the main focus for investment. Indexed and turnover-linked commercial rent ensure that we achieve our high earnings targets. The Company may invest up to 10% of equity in joint ventures in shopping center projects in the early stages of development. New investments should be financed through a balanced mix of equity and borrowing, whereby external financing may not exceed 55% of the Group’s total assets over the long term. As a general rule, long-term interest rates are fixed when loans are taken out or renewed with the goal of keeping the duration (average fixed interest period) at over five years.