Deutsche EuroShop: First half of 2024 characterised by investments

Deutsche EuroShop: First half of 2024 characterised by investments

• Several construction projects to increase the attractiveness of the centers
• Positive one-off effects in the first half of the previous year
• Stable property valuation
• Significant increase in consolidated net income
• Dividend proposal: € 2.60 per share

Hamburg, 14 August 2024 – Shopping center investor Deutsche EuroShop (DES) today published its results for the first half of 2024, which was characterised by extensive construction projects at several locations. Customer footfall and tenant sales once again developed positively. Compared to the first half of 2023, 1.0% more people visited the 21 DES shopping centers and the approximately 2,700 shops recorded 1.9% higher retail sales. The company is currently making significant investments in five locations in order to further optimise them and increase their attractiveness. This resulted in temporary vacancies, which led to a slight decline in sales.

Sales revenue -1.9%, but EBIT +7.0%

Sales revenue fell by 1.9% from € 135.4 million to € 132.8 million. Net operating income (NOI) was also slightly negative (-1.0%) at € 106.4 million. Earnings before interest and taxes (EBIT) rose by 7.0% to € 107.4 million, as the first half of the previous year was characterised by one-off expenses in connection with the change in the scope of consolidation.

EPRA earnings (-8.0%) and FFO (-9.7%)

Earnings before taxes and measurement (EBT excluding measurement) increased by 5.6% to € 82.1 million. In the first half of the previous year, there were one-off earnings effects from the acquisition of further shares in six property companies. EPRA earnings adjusted for valuation effects fell by 8.0% from € 87.6 million to € 80.6 million. Funds from operations (FFO) adjusted for valuation and special effects fell from € 87.5 million to € 79.0 million, which corresponds to a decrease of 9.7%. In 2023, both key figures benefited from one-off income from service charge settlements and the reversal of impairment losses.

Stable property values

Property valuations were largely stable in the first half of 2024 and, including the increased investments in the property portfolio, resulted in a negative valuation result of € 12.6 million. The changes in the market value of the individual property values ranged from -3.6% to +4.4%.

Consolidated net income +60.5%

At € 59.5 million, consolidated net income was € 22.4 million (+60.5%) higher than in the first six months of the previous year (€ 37.1 million) and earnings per share increased from € 0.50 to € 0.78.

Equity ratio, LTV and liquidity remain solid

Deutsche EuroShop's balance sheet ratios remain solid: the equity ratio was 51.2% and the loan-to-value (LTV) ratio 35.5% at the end of the first half of the year. Group liquidity increased from € 336.1 million to € 338.6 million since the end of 2023 due to operating income and borrowings, after Deutsche EuroShop had already distributed € 149.1 million as a special dividend in January of this year.

Forecast and dividend

Based on the results of the first six months, the Executive Board confirms the forecast for the 2024 financial year. On the basis of this development and the inflow of additional free liquidity from ongoing business operations and the successful conclusion of further loan agreements by subsidiaries, the Executive Board and Supervisory Board have resolved to increase the planned dividend of € 0.80 per share by € 1.80 per share. The distribution of a dividend of € 2.60 per share (€ 197.6 million in total) for the 2023 financial year will therefore be proposed to the Annual General Meeting on 29 August 2024 in Hamburg, of which € 0.22 per share is expected to be subject to capital gains tax.

Full half-year financial report

The full half-year financial report is available as a PDF document and in ePaper format. It can be downloaded from 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): 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 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 had increased in 2023 from 61,783,594 to 76,464,319 no-par-value shares. Furthermore, treasury shares acquired by 31 December 2023 or 30 June 2024 are taken into account when determining the weighted number.
⁷ Income and expenses from the change in the scope of consolidation have been reported in the Half-year Financial Report as at 30 June 2023 in measurement gains/losses – in contrast to 31 December 2023, when they were reported under other operating income and expenses. Furthermore, in deviation from 31 December 2023, no deferred taxes were recognised as part of the initial consolidation. The previous year’s figures have been adjusted to the year-end figures, taking deferred taxes into account.