Deutsche EuroShop: Operating business picks up in financial year 2023

• Increasing customer footfall and rising tenant sales
• Share acquisitions prop up growth in earnings
• Positive non-recurring effects from the operating business
• Valuation losses in the real estate portfolio due to higher interest rates
• Reintroduction of full guidance

Hamburg, 19 March 2024 – The shopping center investor Deutsche EuroShop this evening announced its preliminary and as yet unaudited results for financial year 2023.

“We recorded significant growth in 2023, both in operational terms and in relation to our investment portfolio. Customer footfall and sales of our tenants continued their recovery. 5.7% more people visited our shopping centers and our tenants increased their retail sales by 8.6% compared to 2022,” explains Executive Board member Hans-Peter Kneip. “In addition to this recovery in the existing portfolio, the acquisitions of shares in six shopping centers at the beginning of the year also had a positive impact on our key performance indicators.”

The Shopping Center Company was able to increase its operating earnings, while consolidated profit was down due to measurement losses on the back of higher interest rates. The balance sheet remains solid and long-term financing is secured.

To improve comparability, the figures for 2022 relate to a pro forma group. It is assumed that the acquisition of the additional shares in six property companies had already taken place at the beginning of 2022:

Deutsche EuroShop posted a slight increase in revenue to €273.3 million (+3.2%, like-for-like). At €212.7 million, earnings before interest and taxes (EBIT) were 9.5% higher than in the previous year, while earnings before taxes (EBT) excluding measurement gains/losses rose by 13.3% to €169.5 million.

Hans-Peter Kneip had the following to say about these significant improvements: “In 2023, the provisions for non-allocable ancillary costs and maintenance that had been formed in 2020 and 2021 due to the coronavirus pandemic were able to be released with ancillary costs. It also became apparent that write-downs on receivables were not necessary in the amount initially recognised, resulting in a partial reversal. This led to a non-recurring special effect in other operating income in the amount of approx. €15 million.”

With interest rates stabilising at a higher level, this development had a negative impact on the valuation of the Group’s real estate assets (IAS 40) in the 2023 reporting year and resulted in a measurement loss of €209.1 million (2022: €-116,7 million). The average value of Group properties, after ongoing investments, fell by -4.2% (2022: -3.0%). The key indicator “EPRA net tangible assets” (EPRA NTA) decreased by 8.5% to €31.58 per share. The occupancy rate at the end of the year was 93.3%, partly due to temporary vacancies within the context of major restructuring measures (2022: 94.3%).

The measurement loss resulted in a consolidated loss of €-38.3 million in 2023, after a consolidated profit of €30.4 million in the previous year. Earnings per share was €-0.51 (2022: €0.40). EPRA earnings, which exclude measurement gains/losses, increased to €172.4 million or €2.29 per share (pro forma: +15.4%). Funds from operations (FFO) were up by 14.5% to €171.3 million or €2.28 per share.

For financial year 2024, management is once again publishing full guidance for the four most important key indicators, as was always the case before the outbreak of the pandemic:

• Revenue: €268 million to €274 million
• EBIT: €204 million to €210 million
• EBT excluding measurement gains/losses: €149 million to €155 million
• FFO: €146 million to €152 million, or €1.91 to €1.99 per share

Deutsche EuroShop will publish its final audited figures and the dividend proposal with the annual report on 26 April 2024.

Webcast of teleconference

Deutsche EuroShop will hold a conference call for analysts in English at 10 a.m. on Wednesday, 20 March 2024, which will be transmitted 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 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 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 increased from 61,783,594 to 76,464,319 no-par value shares, as well as the 9,000 treasury shares acquired by 31 December 2023.

⁴ Including third-party interests in equity

⁵ 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).

⁶ 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.

⁷ The pro-forma figures given relate to a comparable group, which was prepared under the assumption that the acquisition of the six property companies had already taken place at the beginning of 2022. Non-recurring effects resulting from the change in the consolidation method and the initial consolidation were not taken into account. Likewise, no ancillary acquisition costs were recognised in the pro-forma figures. For the purpose of improving comparability, the same weighted number of no-par value shares issued was used in the disclosure of consolidated key figures per share.

⁸ The disclosure of granted rental incentives was changed in the reporting year and is now recognised under investment properties. The previous year has been adjusted to aid comparability.

Explanations of the key financial figures used can be found at
www.deutsche-euroshop.de/Investor-Relations/Service/Glossary