• Sales up 3 %
• Income from investments up 48 %
• Free cash flow up 8 %
• Consolidated net income Euro 4.1 million

Hamburg, 15 November 2004 – In the first nine months of financial year 2004 Deutsche EuroShop (ISIN: DE0007480204) realised a consolidated net income of Euro 4.1 million (prior-year period: Euro 1.1 million). Compared to the first nine months of financial year 2003 the EBITDA increased by approximately 14 % from Euro 33.5 million to Euro 38.3 million. The increase is a result of the disposal of the Italian shopping center in Udine in line with a portfolio optimisation.

Sales up 3%
Sales in the first nine months totalled Euro 36.8 million, an increase of just 0.4% on the prior-year period (Euro 36.7 million). After adjustment for the rental income from the shopping center in Udine, sales in the reporting period increased by 3% year-on-year.

48% increase in income from investments
With the shopping centers in Dresden and Kassel clearly generating higher income, and new equity interests in Wroclaw and Pécs contributing to earnings for the first time, income from investments jumped 48% from Euro 5.1 million to Euro 7.5 million.

Euro 3.5 million book profit from sale of center in Udine
Other operating income of Euro 4.6 million is primarily due to the book profit of approximately Euro 3.5 million from the sale of the shopping center in Udine and approximately Euro 0.8 million in price gains from the sale of shares in money market funds.

Investment in Wetzlar results in increased costs
At approximately Euro 9.4 million, other operating expenses were up almost Euro 2.2 million year-on-year. Of this figure, Euro 1.4 million is accounted for by the Forum Wetzlar shopping center that is currently under construction. The remaining additional expenditure is due among other things to roof renovation work completed in the middle of July on the shopping center in Udine, which has since been sold.

Net interest income/expense down in line with expectations
At Euro 1.7 million, interest income was down by around Euro 2.5 million due to the high level of investments and the investment of cash and cash equivalents in money market funds. Interest expenses rose by Euro 1.4 million to Euro 15.4 million. The increase is exclusively due to construction period interest for Forum Wetzlar. The total overall net interest/income expense thus amounted to Euro -13.7 million (prior-year period: Euro -9.9 million).

Consolidated net income for the period totals Euro 4.1 million
The result from ordinary activities rose by Euro 1.1 million year-on-year to Euro 8.8 million (prior-year period:Euro 7.7 million). After adjustment for the investment-related negative results recorded by Forum Wetzlar, the rise would have been Euro 3.9 million. After the deduction of taxes and minority interests, the consolidated net income for the period amounted to Euro 4.1 million, compared with Euro 1.1 million in the prior-year period.

Outlook
The management board expects the Group's earnings situation to improve further in the current fourth quarter. The Phoenix-Center in Hamburg, which was opened on 29 September 2004 and has since been inundated with visitors, will also contribute to this increase for the first time.

Construction work at Forum Wetzlar continues to progress according to plan, which means the opening, scheduled for the middle of February 2003, looks certain to be on time. With the exception of a few retail units, the center is already totally let. In the middle of October 2004 the occupancy rate was 93% of the total space.

Building work has also started on Deutsche EuroShop’s most recent acquisition, the City Arkaden in Klagenfurt in Austria. The opening is planned for early 2006. More than 50% of the retail space has already been leased on a long-term basis.

After investing almost half of the sales proceeds from Udine in the City Arkaden in Klagenfurt, the remaining liquidity reserve is approximately Euro 30 million. Due to the lead time required for acquisitions, the management board does not envisage investing in any new shopping centers until 2005.

From today's perspective, Deutsche EuroShop will slightly exceed its target of generating a distributable free cash flow of Euro 30 million in financial year 2004. In the first nine months of the current financial year, the free cash flow improved by 8% to Euro 22.5 million. On this basis the management board again expects a dividend of Euro 1.92 per share in 2004.

Key Group Figures

* after adjustment for the rental income from the shopping center in Udine
** including investment income

Complete report available as download
Both the English and German versions can be downloaded as PDF files on the Internet at http://www.deutsche-euroshop.com