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ePaper created 2015-05-08, 10:57:20 | version 1.38.0
60 ANNUAL REPORT 2014Deutsche EuroShop MANAGEMENT REPORT Financing analysis: improved interest rate conditions As at 31 December 2014, Deutsche EuroShop Group reported the following key financial data: € million 2014 2013 Change Total assets 3,492.2 3,394.9 +97.3 Equity (including third-party inter- ests) 1,751.2 1,642.4 +108.8 Equity ratio (%) 50.1 48.4 +1.7 Net financial liabilities 1,371.8 1,445.9 -74.1 Loan to value ratio (%) 40 43 -3 At €1,751.2 million, the Group’s economic eq- uity capital, which comprises the equity of the Group shareholders (€1,524.4 million) and the equity of the third-party shareholders (€226.8 million), was €108.8 million higher than in the previous year. At 50.1%, the equity ratio was higher than in the previous year (48.4%). FINANCIAL LIABILITIES € million 2014 2013 Convertible bond 95,264 93,556 Non-current bank loans and overdrafts 1,279,539 1,295,996 Current bank loans and overdrafts 55,282 97,207 Total 1,430,085 1,486,759 Cash and cash equivalents -58,284 -40,810 Net financial liabilities 1,371,801 1,445,949 Current and non-current financial liabilities decreased from €1,486.8 million to €1,430.1 million in the year under review, a decline of €56.7 million. In contrast, cash and cash equivalents rose by €17.5 million, leading net financial liabilities to fall by €74.1 million, from €1,445.9 million to €1,371.8 million. The net financial liabilities existing at the end of the year are used exclusively to finance non-current assets. As a result, 40% of non- current assets were financed by loans in the year under review. The Group has access to a credit line in the amount of €150 million until end-2016. As at the balance sheet date, €35.5 million had been drawn down. Net debt finance terms (including the con- vertible bond) as at 31 December 2014 re- mained fixed at 3.76% p.a. (2013: 3.88% p.a.) for an average residual maturity of 6.6 years (2013: 7.0 years). Deutsche EuroShop main- tains credit facilities with 20 banks, all of which are German banks. Of 19 loans across the Group, 12 are subject to credit covenants with the financing banks. This includes a total of 18 different covenants on debt service cover ratios (DSCRs), interest cover ratios (ICRs), changes in rental income and the loan to value ratio (LTV). All condi- tions were met. Based on the budgeted figures, compliance with the covenants may also be as- sumed in the current financial year. Scheduled repayments amounting to €18.6 million will be made from current cash flow during the 2015 financial year. Over the period from 2016 to 2019, average annual repayments will be around €18.0 million. Two loans of €61.6 that have already been extended will expire in the 2015 financial year. We anticipate an annual interest rate of under 2% with a fixed-rate period of ten years. In 2016 a loan in the amount of €77.3 million will be up for extension. The convertible bond must be repaid in 2017 if the bond holders have not made use of their conversion rights by then. Other loans totalling €71.2 million must be ex- tended in 2018 and €119.3 million in 2019. Current and non-current financial liabili- ties totalling €1,430.1 million were recognised in the balance sheet at the reporting date. The difference compared with the amounts stated here of €2.3 million relates to deferred interest and repayment obligations that were settled at the beginning of 2015. Investment analysis: investments below previous year’s level Investments made during the 2014 financial year amounted to €9.7 million, compared with €89.4 million in the previous year. They relate almost exclusively to ongoing investments in portfolio properties. Liquidity analysis: liquidity further increased The Group’s operating cash flow of €133.3 million (2013: €129.8 million) comprises the amount generated by the Group for sharehold- ers through the leasing of shopping center floor space after deduction of all costs. It primarily serves to finance the dividends of Deutsche EuroShop AG and payments to third-party shareholders. Cash flow from operating activities amounted to €132.8 million (2013: €99.4 million) and contains, in addition to operat- ing cash flow, changes in receivables and other assets as well as other liabilities and provisions. The decline in liabilities was primarily due to the payment of taxes. Cash flow from financing activities rose from €-136.8 million to €-139.8 million. Cash outflows from financial liabilities total- ling €58.4 million reflected the repayment of a credit line used in 2013 and the repayment of current credit liabilities. Dividends paid to shareholders totalled €67.4 million. Dividend payments to third-party shareholders came to €14.0 million. Cash and cash equivalents rose by €17.5 million in the year under review to €58.3 mil- lion (2013: €40.8 million). Net assets Balance sheet analysis The Group’s total assets increased by €97.3 million from €3,394.9 million to €3,492.2 million. € thousand 2014 2013 Change Current assets 71,946 55,698 16,248 Non-current assets 3,420,212 3,339,165 81,047 Current liabilities 79,770 123,353 -43,583 Non-current liabilities 1,888,046 1,842,561 45,485 Equity 1,524,342 1,428,949 95,393 Total assets 3,492,158 3,394,863 97,295 Current assets slightly higher At the end of the year, current assets amounted to €71.9 million, up €16.2 million compared to the previous year (2013: €55.7 million). This was the result of the cash and cash equivalents which were higher by €17.5 million at the re- porting date. By contrast, trade receivables fell €1.1 million year-on-year to €4.5 million (2013: €5.6 million). Other assets rose slightly by €2.9 million, from €6.3 million to €9.2 million. Cash and cash equivalents amounted to €58.3 million (2013: €40.8 million) at the re- porting date. Non-current assets higher as a result of value increases Non-current assets rose by €81.0 million, from €3,339.2 million to €3,420.2 million, in the year under review. Investment properties gained €98.0 million. While costs of investments in portfolio proper- ties amounted to €9.7 million, revaluation of our property portfolio resulted in valuation gains of €88.3 million. At-equity investments increased by €17.5 mil- lion from €341.9 million to €359.4 million. This is exclusively attributed to the difference between the share in the earnings and losses for the financial year. Other financial assets saw a net drop from the previous year by €34.4 million, which was primarily the result of the payment of the pro- ceeds from the previous year’s sale of Galeria Dominikanska to Deutsche EuroShop AG. Current liabilities down Current liabilities fell by €43.6 million, from €123.4 million to €79.8 million, due in par- ticular to the decrease in short-term bank loans and liabilities (€-41.9 million). Other current liabilities declined €1.7 mil- lion in net terms. Non-current liabilities up Non-current liabilities rose by €45.6 million, from €1,842.6 million to €1,888.0 million. The increase was the result of the allocation to the deferred tax liabilities (€+29.0 million), from the redemption entitlements of third- party shareholders that increased by €13.4 mil- lion and from higher other liabilities (€+17.8 million). These were offset by financial liabili- ties that were lower by just €14.7 million. Equity At €1,524.3 million, Group equity was up €95.4 million against the previous year (€1,428.9 million). The increase over the year under review primarily comprises the difference between consolidated profit at €177.4 million and the €67.4 million paid as a dividend in June 2014. In contrast, the development of the swaps at €14.6 million negatively impacted equity. LOAN STRUCTURE AS AT 31 DECEMBER 2014 Interest rate lock-in as % of loan € million Average residual maturity (yrs) Average interest rate Up to 1 year 54.1 1.0 1.49 1 to 5 years 435.1 3.7 4.14 5 to 10 years 790.9 7.3 3.59 0ver 10 years 147.7 12.3 4.05 Total 1,427.8 6.6 3.76 3.8 30.5 55.4 10.3 100.0 BALANCE SHEET STRUCTURE € million 2014 2013 3,492.2 3,394.9 123.4 1,428.9 1,842.6 79.8 1,524.3 1,888.1 Liabilties 2013 2014 3,394.9 3,492.2 3,339.2 55.7 3,420.2 72.0 Assets Current assets Non-current assets Current liabilities Non-current liabilities Equity € million 20142013 Change Total assets 3,492.23,394.9 +97.3 ests) 1,751.21,642.4 +108.8 Equity ratio (%) 50.148.4 +1.7 liabilities 1,371.81,445.9 -74.1 ratio (%) 4043 -3 € million 20142013 Convertible bond 95,26493,556 and overdrafts 1,279,5391,295,996 overdrafts 55,28297,207 Total 1,430,0851,486,759 Net financial liabilities 1,371,8011,445,949 € thousand 20142013 Change Current assets 71,94655,69816,248 assets 3,420,2123,339,16581,047 Current liabilities 79,770123,353 -43,583 liabilities 1,888,0461,842,56145,485 Equity 1,524,3421,428,94995,393 Total assets 3,492,1583,394,86397,295 54.11.01.49 435.13.74.14 790.97.33.59 147.712.34.05 Total 1,427.86.63.76 20142013 3,492.23,394.9 20132014 3,394.93,492.2