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ePaper created 2015-05-08, 10:57:20 | version 1.38.0
ANNUAL REPORT 2014 59ANNUAL REPORT 2014 Deutsche EuroShop MANAGEMENT REPORT Another significant change in tax position Taxes on income and earnings amounted to €37.2 million compared to €16.6 million in the previous year. Deferred trade tax provi- sions totalling €12.6 million were released in 2013. In 2014, deferred trade tax provisions were reduced by a further €7.2 million because another company met the criteria for the ex- tended trade tax deduction. Meanwhile, allo- cations for deferred income taxes generated expenditures of €39.0 million during the year under review. Tax expense for income tax pay- ments amounted to €5.4 million (Germany: €4.5 million, international: €0.9 million) in the year under review. Consolidated profit 3.7% higher than previous year Earnings before interest and taxes (EBIT) climbed 7.0%, from €165.8 million to €177.5 million, in the year under review. At €214.7 million, earnings before taxes (EBT) were 14.4% up on the previous year (€187.6 mil- lion). The consolidated result increased to €177.4 million, thus exceeding the previous year’s figure (€171.0 million) by 3.7%. Strong valuation gains drive earnings per share Earnings per share (consolidated net profit per share) amounted to €3.29 in the reporting year, comparedwith€3.17inthepreviousyear(+3.7%). Of this amount, €1.84 (2013: €1.74) was attrib- utable to operations and €1.32 (2013: €0.87) to valuation gains. Moreover, earnings per share for the 2014 financial year were positively impacted by tax income in the amount of €0.13 per share (2013: €0.27). 2013 also saw proceeds from the saleofapropertyintheamountof€0.29pershare. € per share 2014 2013 Consolidated net profit 3.29 3.17 Valuation in accordance with IAS 40 -1.42 -1.03 Valuation gains/losses for equity-accounted companies -0.24 -0.04 Deferred taxes 0.34 0.20 Tax income from past years -0.13 -0.27 Proceeds from sales 0 -0.29 EPRA* earnings 1.84 1.74 Weighted no. of shares in thousands 53,946 53,946 * European Public Real Estate Association Funds from operations (FFO) up 7.6% Funds from operations (FFO) are used to finance our ongoing investments in portfolio properties, scheduled repayments on our long- term bank loans and the distribution of divi- dends. During the year under review, FFO of €120.5 million was generated (2013: €112.0 million). The FFO per share rose by 7.6% from €2.08 to €2.23. € thousand 2014 2013 Consolidated profit 177,426 171,043 Proceeds from sales 0 -15,799 Valuation gains/losses -76,986 -55,982 Valuation gains/losses for equity-accounted companies -12,688 -2,410 Bond conversion expense 967 940 Deferred taxes 31,805 14,208 FFO 120,524 112,000 FFO per share 2.23€ 2.08€ Weighted no. of shares in thousands 53,946 53,946 Dividend proposal: €1.30 per share Based on a successful financial year, we are able to maintain our dividend policy, which is geared towards the long term and continuity. The Executive Board and Supervisory Board will therefore propose to the shareholders at the Annual General Meeting in Hamburg on 18 June 2015 that a dividend of €1.30 per share, 4% or €0.05 higher than the previous year, be distributed for the financial year 2014. An estimated €0.65 per share of the dividend will be deductible as capital gains tax. Financial position Principles and objectives of financial management For the purposes of financing its investments, Deutsche EuroShop uses the stock exchange to raise equity, as well as the credit and capital markets to borrow funds. Within the Group, both the individual property companies and Deutsche EuroShop AG borrow from banks and serve as bond issuers. Deutsche Euro- Shop’s credit standing has been shown to be advantageous when negotiating loan terms. The Group can also arrange its financing inde- pendently and flexibly. Loans and bonds are taken out in euros for all Group companies. In general, the use of equity and loans for investments should be equally weighted and the equity ratio in the Group (including third-party interests) should not fall significantly below 45%. We finance our real estate projects on a long-term basis and also use derivative finan- cial instruments to hedge against rising capital market rates. Hedging transactions are used to hedge individual loans. An available credit line enables Deutsche EuroShop to react quickly to investment opportunities. Until used for investment, any cash not needed is invested short-term as time deposits to finance ongo- ing costs or pay dividends. INCOME STATEMENT OF THE JOINT VENTURES € thousand 31.12.2014 31.12.2013 Difference Change in % Allee-Center, Magdeburg 8,021 7,945 76 1.0 Stadt-Galerie, Passau 7,151 6,938 213 3.1 Phoenix-Center, Hamburg 6,218 6,144 74 1.2 Altmarkt-Galerie, Dresden 0 5,636 -5,636 -100 City-Arkaden, Klagenfurt 5,995 5,890 105 1.8 Árkád, Pécs 3,531 3,487 44 1.3 Others 606 676 -70 -10.4 Revenue 31,522 36,716 -5,194 -14.1 Property operating costs -1,496 -1,739 243 Property management costs -1,624 -1,904 280 Net operating income 28,402 33,073 -4,671 Other operating income 852 65 787 Other operating expenses -334 -322 -13 Earnings before interest and taxes (EBIT) 28,920 32,816 -3,896 Interest income 9 19 -10 Interest expense -6,415 -8,147 1,732 Net finance costs -6,406 -8,127 1,721 Valuation gains/losses 12,689 2,410 10,279 Earnings before tax (EBT) 35,203 27,099 8,104 Taxes on income and earnings -75 -76 1 Share in the profit/loss of joint ventures 35,128 27,024 8,104 FFO PER SHARE € 2010 20142011 2012 2013 1.40 2.23 1.61 1.66 2.08 EARNINGS PER SHARE €, undiluted Extraordinary revenue Extraordinary tax effect2010 20142011 2012 2013 -0.17 3.291.92 2.36 3.17 0.95 1.36 0.05 1.19 0.73 0.29 0.27 1.74 0.87 0.98 0.54 -1.70 1.32 1.84 0.13 Valuation gains/losses Operating profit EBIT € million 2013 165.8 2014 177.5 € per share 20142013 Consolidated net profit 3.293.17 Deferred taxes 0.340.20 earnings 1.841.74 in thousands 53,94653,946 € thousand 20142013 Consolidated profit 177,426171,043 Bond conversion expense 967940 Deferred taxes 31,80514,208 FFO 120,524112,000 in thousands 53,94653,946 € thousand 31.12.201431.12.2013 Difference Change in % Allee-Center, Magdeburg 8,0217,945761.0 Stadt-Galerie, Passau 7,1516,9382133.1 Phoenix-Center, Hamburg 6,2186,144741.2 Altmarkt-Galerie, Dresden 05,636 -5,636 -100 City-Arkaden, Klagenfurt 5,9955,8901051.8 Árkád, Pécs 3,5313,487441.3 Others 606676 -70 -10.4 Revenue 31,52236,716 -5,194 -14.1 Property operating costs -1,496 -1,739243 Property management costs -1,624 -1,904280 Net operating income 28,40233,073 -4,671 Other operating income 85265787 Earnings before interest and taxes (EBIT) 28,92032,816 -3,896 Interest income 919 -10 Interest expense -6,415 -8,1471,732 Net finance costs -6,406 -8,1271,721 Valuation gains/losses 12,6892,41010,279 Earnings before tax (EBT) 35,20327,0998,104 Taxes on income and earnings -75 -761 Share in the profit/loss of joint ventures 35,12827,0248,104 20102014201120122013 2014201120122013 -0.173.291.922.363.17