Deutsche EuroShop: Significant business recovery in third quarter / course of pandemic and official restrictions once again negative factors for center operations

• Customer footfall and tenants' revenues in third quarter at an average of 78 % and 89 %, respectively, of the previous year's level
• Strong improvement in cash collection ratio to 92 %
• Corona-related revenue shortfalls and write-downs on rent receivables have a negative impact on nine-month results
• EPRA earnings per share: EUR 1.47 (-24.6 %)
• FFO per share: EUR 1.47 (-18.8 %)
• Solid balance sheet structure (LTV: 31.5 %) and liquidity (EUR 213.3 million)

Hamburg, 12 November 2020 - The key operating figures of shopping center investor Deutsche EuroShop have recovered significantly in the third quarter following the coronavirus-related lockdown in the first half of 2020.

Until the end of September, footfall in the Deutsche EuroShop centers had risen to 78 % of the previous year's level, and tenants' revenues to 89 %. The ratio of rent paid to rent due, known as the collection ratio, has also improved significantly. After an average of only 55 % of all rent receivables were paid in the second quarter, the collection ratio for the third quarter was 92 %.

In operational terms, business was affected by massive restrictions, especially in the second quarter. In this situation, Deutsche EuroShop generated significantly lower net operating income (NOI) of EUR 121.1 million in the first nine months of 2020 due to higher write-downs on rent receivables, with revenue at EUR 164.4 million (-1.9 % compared with the same period in the previous year). EBIT decreased accordingly to EUR 118.1 million. Earnings before taxes and excluding measurement gains/losses dropped to EUR 93.4 million, corresponding to a 23.2 % decrease compared to the same period of the previous year. EPRA earnings decreased by 24.6 % to EUR 90.8 million and funds from operations by 18.6 % to EUR 90.9 million.

The coronavirus pandemic also had an impact on the valuation of the Group's real estate assets, which was carried out for the first time in the first half of the year, resulting in a valuation loss of EUR 221.3 million in total. As a result, consolidated profit decreased to EUR -105.5 million (previous year: EUR 93.3 million). Deutsche EuroShop continues to have solid key financial ratios. The loan-to-value ratio is 31.5 %, and liquidity is EUR 213.3 million.

"Overall, there has been a clearly positive trend since reopening, even though business activities in some segments were still far from their normal levels. This overall trend indicates for us that consumers continue to appreciate bricks and mortar retail and shopping in our attractive shopping centers. Even after the outbreak of the coronavirus pandemic there is a desire for the real shopping experience, and the current security requirements and restrictions are being accepted, so centers can be operated safely," says CEO Wilhelm Wellner, "However, the situation remains tense. The trend in infection figures in recent weeks and the associated official business closures and restrictions on operations, as well as consumer restraint, are again having a negative impact on our customer footfall and tenants' revenues."

There is still considerable uncertainty about what the future holds for the general economic situation and the coronavirus pandemic, as well as the impact they have on Deutsch EuroShop's business and its tenants. It is not possible to make a reliable forecast for financial year 2020 on this basis. However, the Executive Board believes that Deutsche EuroShop is still well equipped to meet the current challenges, thanks to the solid balance sheet, low debt and stable liquidity position.

Full interim report

The full interim report is available as a PDF document and in ePaper format. It can be downloaded from www.deutsche-euroshop.com/ir

Webcast of the teleconference

Deutsche EuroShop will hold a conference call for analysts in English at 10 a.m. on 13 November 2020, which will be carried out as a live webcast at www.deutsche-euroshop.com/ir

Deutsche EuroShop - The shopping center company

Deutsche EuroShop is the only public company in Germany to invest solely in shopping centers in prime locations. The SDAX-listed 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.

Update of November 2020 on the coronavirus pandemic

Deutsche EuroShop has been providing information on current developments and selected key figures from the 21 shopping centers in its portfolio since the start of the coronavirus pandemic (as at 12 November 2020):

Visitor numbers compared with the previous year:

Retail sales in the German centers compared with the previous year:

Trend in the collection ratio: