DES GB2015 Englisch

We constantly monitor what is available on the transaction market. We are currently examining an opportunity to participate in an interesting center in Germany that would be a good fit for our portfolio. WILHELM WELLNER: The disadvantage of that perfectly sensible idea is the question of reinvestment. Where would we invest the funds? If we didn’t reinvest the money in the acquisition of another center, we could, of course, pay it back to our shareholders. But our shareholders would then also be asking them- selves the question of which other investment with a comparable risk would provide at least the same return. Besides, tax issues would make the paying of special dividends a fairly unattractive option. OLAF BORKERS: The briefest way to summarise them would be to tell you that we concluded the 2015 financial year with a record result. Revenue rose by one per cent to €202.9 million. EBIT, i.e. earnings before interest and taxes fell slightly by 0.7 per cent to €176.3 million. Valuation effects had a considerable positive impact on both the fi- nancial result and the measurement gains/losses, with the result that consolidated profit was significantly better than the very good result from the previous year. OLAF BORKERS: A particularly significant factor in this appreciation was the further con- siderable fall in comparative yields observed in the transaction market in Germany and abroad against a background of rising prices. Our new expert valuers Jones Lang LaSalle, who, in the course of a normal rotation, have replaced our previous ex- pert valuer team of FERI Rating and GfK Geomarketing, subjected our centers to an intense initial evaluation. On average, the overall value of our shopping centers rose in line with the market. These measurement effects from investees recognised at equity amounted to €47.2 million in our income statement. The Group’s measurement gains also improved substantially to €220.6 million. The value of Group properties therefore increased by 9.4 per cent on average. Net asset value as at 31 December 2015 was €39.12 per share, an increase of 18 per cent. We have, however, always emphasised that valuations are not a one-way street. Real estate values are subject to normal cyclical variations and we are currently in a phase where prices are very high. That is why we are now concentrating on operating profit. Would it not be an idea to take advantage of the current price levels to sell some properties? Mr Borkers, could you summarise the results of the financial year for us? That sounds a bit like an understatement, given that these valuation effects actually amounted to a little under €268 million. What is behind this? OLAF BORKERS: What is strik- ing is that it resulted in us gener- ating more profit than revenue. It’s something that is not unusual for real estate companies, due to un- realised valuation increases that exist only on paper. The results therefore need to be interpreted correctly. Deutsche EuroShop’s consolidated profit grew by 74.3 per cent to €309.3 million, which represents earnings per share of €5.73. Funds from op- erations, the figure that is key to evaluating operational perfor- mance, increased by 2.4 per cent to €123.4 million, which equates to €2.29 per share. WILHELM WELLNER: We will subtract our lending from the funds from operations and distribute a dividend, with the remainder being used for invest- ments.We announced three years ago that we would pay a dividend of €1.35 per share in 2015, which is 3.8 per cent above the previous year. We will, of course, be keep- ing that promise. Thank you for the explanations about the valuation. What effects did it have on the results? How will shareholders benefit from this positive development? 9 INTERVIEW

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