DES_H1_2021

DES_H1_2021_E

H1 2021 / Half-year Financial Repor t dated 30 June 2021 LETTER FROM THE EXECUTIVE BOARD Dear Shareholders, Dear Readers, People are returning to shopping centers. After the remaining store closures in Germany were lifted at the beginning of June, footfall has risen again significantly and by the end of July had reached KEY CONSOLIDATED FIGURES in € million Revenue 5 Net operating income (NOI) EBIT EBT (excluding measurement gains / losses 1) EPRA 2 earnings FFO Consolidated profit in € EPRA 2 earnings per share FFO per share Earnings per share Weighted number of no- par-value shares issued 01.01. – 30.06.2021 01.01. – 30.06.2020 104.9 112.3 71.9 70.5 55.7 54.3 54.3 36.8 80.0 78.5 62.1 59.8 59.9 -129.3 01.01. – 30.06.2021 01.01. – 30.06.2020 0.88 0.88 0.60 0.97 0.97 -2.09 + / - -6.5% -10.2% -10.2% -10.2% -9.2% -9.3% + / - -9.3% -9.3% 61,783,594 61,783,594 0.0% in € million 30.06.2021 31.12.2020 2,355.4 2,314.8 1,893.1 1,922.6 4,248.5 4,237.4 2,350.1 2,309.7 + / - 1.8% -1.5% 0.3% 1.8% 1.7% around 77% of pre-coronavirus levels. The visitors to our centers Equity 3 continue to exhibit great discipline in observing the measures imple- mented to contain the pandemic so that the centers and stores can be operated safely. Together with our tenants and ECE, our part- ner for center management, we are able to ensure risk-free visits to our retail properties and shops even during times of coronavirus. Liabilities Total assets EPRA 2 NTA EPRA 2 NTA per share in € 38.03 37.38 Centers and stores are not and have never been coronavirus hot- Equity ratio in % 3 spots. We continue to work in collaboration with the world of poli- LTV ratio in % 4 55.4 31.9 54.6 32.9 tics via the relevant associations to make sure that this fact is also taken into account should the pandemic situation deteriorate again – which unfortunately cannot be ruled out – so that the shops and shopping centers can remain open throughout. That is our assump- tion at present. As footfall has improved, so has the revenue of our tenants. In June 2021, it averaged at 85% of pre-crisis levels. The key operating figures thus show a clearly positive trend, although they still have signifi- cant ground to make up in some areas, as they did after the first lock- down in 2020 and as they do now just after the full store openings. To mitigate the negative impact and after-effects of the lockdown phases on the bricks-and-mortar retail trade, it is therefore necessary to con- Cash and cash equivalents 268.1 266.0 0.8% 1 Including the share attributable to joint ventures and associates accounted for using the equity method 2 European Public Real Estate Association 3 Including third-party interests in equity 4 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) 5 Figures shown within net operating income were changed as at 31 December 2020 and the previous year’s quarterly figures have been adjusted for easier comparability. Please refer to the comments in the notes to the 2020 consolidated financial statements under section “4. New accounting standards and changes in presentation”. tinue with the temporary support offered to many of our tenants in at year-end 2020. One focus of our activities is to fill these vacancies order to safeguard the properties’ continued existence. For our main resulting from the coronavirus with attractive concepts. A number of market of Germany, the recent significant improvement in govern- specific approaches and negotiations with tenants are already under- ment support programmes has also provided some relief for retail- way in this area, although we expect that it will take some time before ers. As it stands, our occupancy rate is 93.8%, compared with 95.4% the gaps that have emerged can be closed again. Deutsche EuroShop 1

H1 2021 / Half-year Financial Repor t dated 30 June 2021 The negative impact of the pandemic is reflected in our key financials The end of the lockdown represents a major milestone on the road for the first half of 2021. Revenue and EBIT were significantly lower to the normalisation of economic life, although the bricks-and-mor- than in the first half of 2020, at €104.9 million (-6.5%) and €70.5 mil- tar retail trade continues to face particular challenges, resulting in lion (-10.2%) respectively, which had already been affected – albeit increased uncertainties in terms of business performance. Based on to a lesser extent – by the business closures during the first lock- the current situation, we expect funds from operations (FFO) of €1.70 down. Earnings before taxes and measurement gains / losses (EBT to €1.90 per share for the 2021 financial year (2020: €2.00). before measurement) also fell by 10.2% to €55.7 million. EPRA earn- ings and FFO adjusted for measurement and special effects were both This assumes that the pandemic situation will be brought under last- €54.3 million lower, down 9.2% and 9.3% on the previous year. The col- ing control without renewed store closures or significant restrictions lection ratio has continued to improve as the reopenings have pro- on center operations, a continued uptick in private consumer spend- gressed, already reaching 94% for the month of July. Including the ing over the course of the year and an associated further recovery effects of repaying our credit line at the beginning of the year, Group in tenant revenues and the collection ratio. These forecasts are also liquidity improved further, bolstered by lower capital expenditure due based on the assumption that the government coronavirus support to the closure periods. programmes promised in Germany will be granted to a significant pro- We were able to successfully conclude all pending refinancing of our loans for the current financial year at attractive conditions. A total of Since the pandemic broke out in March 2020 and until the bricks-and- four loans with a combined volume of €191 million have been extended mortar retail trade was reopened just recently, we have continued to or replaced with our banking partners. In this ongoing exceptional sit- take quick and decisive action to implement the necessary measures uation, we are coordinating with our financial partners on an ongoing to safeguard the sustainable development of Deutsche EuroShop. We basis and in a spirit of trust. thank you for your trust in this exceptional situation. portion of our affected tenants and paid out promptly. Hamburg, August 2021 Wilhelm Wellner Olaf Borkers Deutsche EuroShop 2

H1 2021 / Half-year Financial Repor t dated 30 June 2021 BASIC INFORMATION ABOUT THE GROUP Group business model Deutsche EuroShop is an Aktiengesellschaft (public company) Management system The Executive Board of Deutsche EuroShop AG manages the Com- under German law. The Company’s registered office is in Hamburg. pany in accordance with the provisions of German company law and Deutsche EuroShop is the only public company in Germany to invest with its rules of procedure. The Executive Board’s duties, responsi- solely in shopping centers in prime locations. A total of 21 shop- bilities and business procedures are laid down in its rules of proce- ping centers in Germany, Austria, Poland, Hungary and the Czech dure and in its schedule of responsibilities. Republic are held in the real estate portfolio. The Group generates its reported revenue from rental income on the space it lets in the The management indicators (performance indicators) are based on shopping centers. the targets of having shopping centers with sustainable and stable value growth and generating a high liquidity surplus from their long- The shopping centers are held by independent companies, with term leases. These indicators are revenue, EBIT (earnings before Deutsche EuroShop holding stakes of 100% in twelve of them and interest and taxes), EBT (earnings before taxes) excluding measure- between 50% and 75% in the other nine. The operational manage- ment gains / losses and FFO (funds from operations). ment of the shopping centers is contracted out to external service providers under agency contracts. Due to the higher rent defaults and arrears as a result of the corona- virus, these management metrics currently have only limited infor- The Group managing company is Deutsche EuroShop AG. It is mation value in some cases, so the collection ratio will be used for responsible for corporate strategy, portfolio and risk management, management purposes as a supplement until further notice. The col- financing and communication. The Deutsche EuroShop Group has a lection ratio measures the ratio of incoming payments to rent and central structure and lean personnel organisation. ancillary cost receivables from tenants. The share capital amounted to €61,783,594 on 30 June 2021 and was composed of 61,783,594 no-par-value registered shares. The notional value of each share in the share capital is €1.00. Objectives and strategy The management focuses on investments in high-quality shopping centers in city centers and established locations offering the poten- tial for stable, long-term value growth. A key investment target is the generation of high surplus liquidity from leases in shopping centers, of which a significant part can be paid out to shareholders in the form of an annual dividend. To this end, the Company invests its cap- ital in shopping centers in different European regions in accordance with the principle of risk diversification. Germany is the main focus of investment. Indexed and revenue-linked commercial rents ensure that high earnings targets are achieved. The Company may invest up to 10% of equity in joint ventures in shopping center projects in the early stages of development. New investments should be financed from a balanced mix of sources, and external financing may not account for more than 55% of financing across the Group over the long term. As a general rule, long-term interest rates are fixed when loans are taken out or renewed, with the goal of keeping the term (average fixed interest period) at over five years. Deutsche EuroShop 3

H1 2021 / Half-year Financial Repor t dated 30 June 2021 ECONOMIC REVIEW Bricks-and-mortar non-food retailing benefited from the first reopenings, but some businesses are still lagging well behind pre- crisis levels. According to the Federal Statistical Office, German retail Macroeconomic and sector-specific conditions The coronavirus pandemic led to a renewed decline in economic sales (including online spending) rose by 1.6% year on year in real terms in the first six months of 2021. Online and mail- order were output in the first half of 2021. Private consumption was especially again the main growth drivers (+26.1%), whereas bricks and mortar affected by this, primarily due to the lockdown measures, which retailers were affected by the restrictions and reported a decline in lasted all the way into June with brief interruptions and regional revenue (-2.5%). After the lockdown measures were lifted, significant differences. In Germany, Deutsche EuroShop’s main market, gross increases (+8.7% in real terms) were observed on a monthly basis in domestic product (GDP) rose by 1.5% in real terms in the second June in the non-food retail sector. The textiles, apparel, footwear and quarter, following a 2.1% decline in the opening quarter of 2021. The leather goods industries, which were hit particularly hard by the store unemployment rate at the end of June 2021 stood at 5.7% (end-June closures caused by the federal emergency brake, posted a 70.5% 2020: 6.2%). Despite prolonged lockdown phases, consumer sen- increase in revenue compared with May 2021, the first time it had timent in Germany has recovered since the beginning of the year. climbed back above the pre-crisis level of February 2020 (+ 4.8%). In There has been a positive trend in both economic and income expec- the retail trade involving goods of various types (including department tations and in the propensity to spend money stores), revenue was up 34.3% compared with the previous month and 7.6% higher than before the coronavirus. RESULTS OF OPERATIONS in € thousand Revenue Operating and administrative costs for property Write-downs and derecognition of receivables NOI Other operating income Other operating expenses EBIT At-equity proﬁt / loss Measurement gains / losses (at equity) Deferred taxes (at equity) At-equity (operating) profit / loss Interest expense Profit / loss attributable to limited partners Other financial gains or losses Financial gains or losses (excl. measurement gains / losses) EBT (excl. measurement gains / losses) Measurement gains / losses Measurement gains / losses (at equity) Measurement gains / losses (including at-equity profit / loss) Taxes on income and earnings Deferred taxes Deferred taxes (at equity) Deferred taxes (including at equity) CONSOLIDATED PROFIT 01.01. – 30.06.2021 01.01. – 30.06.2020 (adjusted) 1 104,928 -14,962 -18,103 71,863 2,309 -3,650 70,522 11,512 -20,483 -5,807 4 -14,774 55,748 -11,313 -1,479 -6,149 36,807 -37,300 49,171 -146 -168,702 -49,171 28,564 146 13,278 -1,777 11 -13,090 1,777 -6,138 -11 Change + / - -7,346 -1,736 899 -8,183 220 -14 -7,977 -213 1,496 391 -2 1,672 -6,305 112,274 -13,226 -19,002 80,046 2,089 -3,636 78,499 11,725 -21,979 -6,198 6 -16,446 62,053 -217,873 206,560 -2,195 716 28,710 -34,859 -129,305 166,112 in % -6.5 -13.1 4.7 -10.2 10.5 -0.4 -10.2 -1.8 6.8 6.3 -33.3 10.2 -10.2 94.8 32.6 1 Figures shown within net operating income were changed as at 31 December 2020 and the previous year’s quarterly figures have been adjusted for easier comparability. Please refer to the comments in the notes to the 2020 consolidated financial statements under section “4. New accounting standards and changes in presentation”. Deutsche EuroShop 4

H1 2021 / Half-year Financial Repor t dated 30 June 2021 Revenue affected by the coronavirus pandemic Revenue for the reporting period came in at €104.9 million. On a like- Other operating income and expenses Other operating income, stemming primarily from the reversal of for-like basis, this constituted a decrease of 6.5% compared with provisions, income from rental receivables for which impairment the same period last year (€112.3 million) due to the longer closure losses had been recognised in previous years and from arrears periods compared with the first half of 2020. In our foreign markets, payments with respect to ancillary costs, amounted to €2.3 million, statutory regulations, among other things, provided for the tempo- representing a slight increase on the previous year. Other operating rary suspension of payment obligations under rental agreements for expenses, which mainly comprised general administrative costs and tenants affected by the closures. Other factors responsible for the personnel costs, were the same year on year at €3.7 million. decline in revenue, mainly due to the pandemic, included losses from tenants who encountered payment difficulties, lower revenue-linked rents as well as longer re-letting periods and higher vacancy rates. Center operating expenses up on previous year due to higher non-apportionable ancillary costs Center operating costs of €15.0 million in the reporting period, mainly comprising center management fees, non-apportionable ancillary costs, land taxes, building insurance and maintenance, EBIT lower than last year Earnings before interest and taxes (EBIT) were €70.5 million, down on the figure for the previous year (€78.5 million), to a significant extent due to the coronavirus-driven decline in revenue. Improvement in financial gains or losses excluding measurement effects At €-14.8 million, net financial gains or losses (excluding measure- increased year on year by 13.1%. This was due to higher vacancy- ment gains / losses) improved year on year (€-16.4 million). related, non-apportionable ancillary costs, which could not be offset in full despite the timely implementation of appropriate cost reduc- As in the same period of the previous year, at-equity (operat- tion measures. Coronavirus-related write-downs weigh on first half of the year Write-downs and the derecognition of receivables weighed heav- ing) earnings in the first half of 2021 were negatively impacted by coronavirus-related write-downs on rent receivables and revenue arrears and, at €11.5 million, were practically on a par with the prior year (€11.7 million). The interest expenses of Group companies were reduced by a further €1.5 million. In addition to scheduled repay- ily on the first half of 2021 as well, at €18.1 million (previous year: ments, the more attractive follow-up financing for the City-Arkaden €19.0 million). The extent of the write-downs is dependent on the Wuppertal had a positive effect here. The share of earnings attrib- current status of negotiations with tenants regarding lockdown- utable to limited partners decreased by €0.4 million in line with the related rent reductions as well as on tenant payment patterns. reduced EBIT. Write-downs and the derecognition of receivables in the first half of the year of €14.0 million took into account both the rental conces- sions already contractually agreed and the further rental conces- sions expected on receivables outstanding as at the reporting date. In addition, receivables had to be derecognised or written down indi- vidually (€4.1 million), in particular due to insolvency. Deutsche EuroShop 5

H1 2021 / Half-year Financial Repor t dated 30 June 2021 EBT (excluding measurement gains / losses) down as a result of the pandemic The improved net financial income (excluding measurement gains / losses) was not enough to offset the decline in EBIT, with the result that EBT (excluding measurement gains / losses) fell year on year from €62.1 million to €55.7 million (-10.2%). Small net measurement loss in a changed market environment In the previous year, the coronavirus pandemic likewise had a signif- icant negative impact on the measurement of the Group’s real estate assets in accordance with IAS 40. In the current environment where retail and gastronomy businesses have been reopening subject to conditions and good progress has been made with the pace of vac- cinations, property values remained largely stable and resulted in a net measurement loss of €11.3 million. This included a positive measurement effect of €4.0 million from the revaluation of an unde- veloped and currently unused piece of land. Of this measurement loss, €-13.1 million after minority interests was EPRA EARNINGS 01.01. – 30.06.2021 01.01. – 30.06.2020 in € thousand per share in € in € thousand per share in € Consolidated profit 36,807 0.60 -129,305 -2.09 Measurement gains / losses on investment properties 1 Measurement gains / losses on derivative financial instruments 1 Deferred tax adjustments pursuant to EPRA 2 11,313 0.18 217,873 3.53 0 0.00 -88 0.00 6,149 0.10 -28,710 -0.47 0.97 EPRA EARNINGS 54,269 0.88 59,770 Weighted number of no-par-value shares issued 61,783,594 61,783,594 attributable to the measurement of the real estate assets reported by the Group and €1.8 million to the measurement of the real estate 1 Including the share attributable to joint ventures and associates accounted for using the equity method 2 Relates to deferred taxes on investment properties and derivative financial assets of joint ventures accounted for using the equity method. instruments The average value of Group properties after ongoing investments fell by -0.3% in the first half of 2021; the range of changes in market Development of funds from operations Funds from operations (FFO) are used to finance our ongoing invest- value was between +1.7% and -3.4%. The occupancy rate was 93.8%, ments in portfolio properties, scheduled repayments on our long- compared with 95.4% at the end of 2020. term bank loans and as the basis for the distribution of dividends. Taxes on income and earnings Taxes on income and earnings fell to €1.5 million (previous year: Significant non-recurring effects that are not part of the Group’s operating activities are eliminated in the calculation of FFO. FFO declined from €59.9 million to €54.3 million or by €0.09 per share to €2.2 million) as a result of the decline in profit. Deferred taxes €0.88. As an income-based figure, FFO does not reflect the increase resulted in an expense of €6.1 million (previous year: tax income of in outstanding rent receivables due to the coronavirus, with the €28.7 million) due to write-downs of tax balance sheet values and result that it also necessary to analyse tenants’ payment behaviour devaluations of real estate assets. expressed in the collection ratio (see below: Net assets and liquid- ity). This amounted to 80% in the first half of 2021. EPRA earnings down; consolidated profit significantly higher EPRA earnings, which exclude measurement gains / losses, fell significantly to €54.3 million or €0.88 per share, due mainly to the decline in revenue. At €36.8 million, consolidated profit jumped by €166.1 million year on year (€-129.3 million) due to the high measure- ment losses in the previous year, while earnings per share increased FUNDS FROM OPERATIONS 01.01. – 30.06.2021 01.01. – 30.06.2020 in € thousand per share in € in € thousand per share in € from €-2.09 to €0.60. Consolidated profit 36,807 0.60 -129,305 -2.09 Measurement gains / losses on investment properties 1 Deferred taxes 1 11,313 6,149 0.18 217,873 0.10 -28,710 FFO 54,269 0.88 59,858 3.53 -0.47 0.97 Weighted number of no-par-value shares issued 61,783,594 61,783,594 1 Including the share attributable to joint ventures and associates accounted for using the equity method Deutsche EuroShop 6

H1 2021 / Half-year Financial Repor t dated 30 June 2021 RE VENUE in € million 112.3 104.9 EBIT in € million EBT * in € million FFO PER SHARE in € 0.97 0.88 78.5 70.5 62.1 55.7 -6.5% -10.2% -10.2% -9.3% H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 * excluding measurement gains / losses FINANCIAL POSITION AND NET ASSETS NET ASSETS AND LIQUIDITY The collection ratio, representing the ratio of incoming payments to rent and ancillary cost receivables from tenants, showed the following The Deutsche EuroShop Group’s total assets increased slightly movements in each individual month in 2020 up to the end of July 2021 by €11.1 million compared with the year-end figure for 2020 to as a result of the coronavirus (adjustments from agreed rent reduc- €4,248.5 million. The main influencing factor on the change was the tions already taken into account): coronavirus-related increase in receivables, which was offset by a decline in the market value of real estate. The Group’s receivables (after write-downs) increased accordingly 30.06.2021 31.12.2020 Change Group’s liquidity, excluding draw-downs on the short-term credit line, by €10.1 million to €29.9 million (previous year: €19.8 million). The 12,423 -1,268 improved by €32.1 million to €268.1 million compared with the previ- ous reporting date; the lower capital expenditure due to business clo- sures and a €5.1 million increase in credit also had an impact here. in € thousand Current assets Non-current assets 3,932,456 3,933,724 316,080 303,657 Current liabilities 199,209 211,169 -11,960 Non-current liabilities 1,693,915 1,711,441 -17,526 Equity (including third-party interests) 2,355,412 2,314,771 40,641 TOTAL ASSETS 4,248,536 4,237,381 11,155 Deutsche EuroShop 7

H1 2021 / Half-year Financial Repor t dated 30 June 2021 COLLEC TION R ATIO in % Q1 2020 99% Q2 2020 71% Q3 2020 96% Q4 2020 93% Q1 2021 76% Q2 2021 84% Q3 2021 100 98 98 96 96 95 97 92 90 94 89 76 72 64 78 78 72 81 81 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Jul. Equity ratio of 55.4% The equity ratio (including the shares of third-party shareholders) We were able to successfully conclude all pending refinancing of our loans for the current financial year at attractive conditions. A was 55.4%, slightly up compared with the last reporting date (54.6%) total of four loans with a combined volume of €191 million have been and still at a very healthy level. Leverage ratio remains low As at 30 June 2021, current and non-current financial liabilities extended or replaced with our banking partners. We are now negoti- ating or coordinating with banks for the upcoming refinancings from 2022 and with regard to the potential impact of pandemic- related business closures on our key financial indicators and loan cove- stood at €1,507.9 million, €33.6 million lower than at the end of 2020. nants. As at 30 June 2021, the loan covenants had been met or tem- In addition to scheduled repayments, the €30 million drawn-down porarily suspended by the banks due to this extraordinary situation. at short notice against the credit line beyond the reporting date was repaid. The loan-to-value is a very solid 31.9% (31 December 2020: 32.9%). BAL ANCE SHEE T STRUC TURE in € million Assets Liabilities 4,237.4 4,248.5 4,248.5 4,237.4 303.7 316.1 199.2 211.2 3,933.7 3,932.4 1,693.9 1,711.4 2,355.4 2,314.8 Current assets Non-current assets 2020 2021 2021 2020 Current liabilities Non-current liabilities Equity (includ- ing third-party interests) Deutsche EuroShop 8

H1 2021 / Half-year Financial Repor t dated 30 June 2021 Non-current deferred tax liabilities increased slightly by €5.9 million to €330.8 million. Other current and non-current liabilities and pro- visions decreased by €1.8 million. Net tangible assets according to EPRA Net tangible assets (NTA) as at 30 June 2021 were €2,350.1 million, compared with €2,309.7 million at the end of 2020. This was equiva- lent to a modest increase in NTA per share of €0.65, from €37.38 to €38.03 per share (1.7%). EPRA NTA Equity Derivative financial instruments measured at fair value 1 Equity excluding derivative financial instruments Deferred taxes on investment properties and derivative financial instruments 1 Intangible assets Goodwill as a result of deferred taxes EPRA NTA 30.06.2021 31.12.2020 in € thousand per share in € in € thousand per share in € 2,036,696 27,294 2,063,990 337,906 -41 -51,719 2,350,136 32.96 0.44 33.40 5.47 0.00 -0.84 38.03 2,003,246 26,138 2,029,384 332,059 -13 -51,719 2,309,711 32.42 0.42 32.84 5.38 0.00 -0.84 37.38 Number of no-par-value shares issued as at the reporting date 61,783,594 61,783,594 1 Including the share attributable to equity-accounted joint ventures and associates REPORT ON EVENTS AFTER THE REPORTING DATE No significant events occurred between the reporting date of 30 June 2021 and the date of preparation of the financial statements. Deutsche EuroShop 9

H1 2021 / Half-year Financial Repor t dated 30 June 2021 OUTLOOK Economic conditions For 2021, the German Council of Economic Experts forecast the Ger- However, some of the key operating figures are currently well below pre-crisis levels and the first half of 2021 was still dominated by store closures, so further lockdown and insolvency-related rent reductions or rent losses are to be expected. Added to this, it is uncertain to what extent the progress made in vaccinations will man economy to recover by 3.1% in real terms. With regard to price be sufficient to maintain business openings during the autumn and trends, the experts at the Federal Ministry for Economic Affairs and winter months and also to protect against possible new virus var- Energy anticipate the inflation rate to increase to 1.5% and the num- iants. The bricks-and-mortar retail trade will thus continue to face ber of unemployed to stagnate on an annual average. Economists special challenges, resulting in persistently elevated uncertainty expect this to be accompanied by a robust recovery in private con- with regard to economic trends and business performance. sumer spending of 5.3% in nominal terms and a corresponding decline in the savings ratio from 16.3% to 14.1% of disposable income. This money will also benefit retailers, though they may struggle to make up for the revenue lost during the lockdown periods. FFO PER SHARE in € Result 2.42 Result 2.00 Goal 1.70 – 1.90 For the coming year, the German Council of Economic Experts con- siders it possible that the German economy will continue to recover, although this will depend on the future course of the pandemic. Pos- sible further waves of infection could pose a major risk to the econ- omy if they lead to restrictions or even business closures in industry, according to the economic experts. On the other hand, advances with vaccinations, new drugs, improved testing and protection strategies could have a beneficial effect on economic momentum. Expected results of operations and financial position As reopenings continued in the second quarter of 2021, our tenants’ operating figures – particularly customer foot traffic and tenant rev- enue – have trended upwards, and collection ratios have also contin- ued to improve of late. This development shows that the bricks-and- 2019 2020 2021 mortar retail trade, also supported by the progressive networking of offline and online shopping, continues to offer a lot of appeal for con- sumers. People still enjoy shopping as an experience where they can Based on the current situation, we expect total funds from opera- meet other people and touch and feel the merchandise. With stores tions (FFO) of €1.70 to €1.90 per share for the 2021 financial year opening their doors again, we are therefore confident that the direc- (2020: €2.00). This assumes that the pandemic situation can be tion of travel in the second half of 2021 will continue to be positive brought under lasting control without store closures or signifi- for our tenants and that we will once again be able to achieve rev- cant restrictions on center operations, a continued uptick in pri- enue volumes that are significantly more stable and easier to plan. vate consumer spending over the course of the year and an asso- ciated further recovery in tenant revenue and the collection ratio. These forecasts are also based on the assumption that the govern- ment coronavirus support programmes promised in Germany will be granted to a significant proportion of our affected tenants and paid out promptly. Deutsche EuroShop 10

H1 2021 / Half-year Financial Repor t dated 30 June 2021 RISK REPORT There have been no significant changes since the beginning of the financial year with regard to the risks associated with future busi- ness performance. We do not believe that the Company currently faces any risks capable of jeopardising its continued existence. The information provided in the risk report of the consolidated finan- cial statements as at 31 December 2020 is therefore still applicable (Annual Report 2020, p. 19 ff.). CONSOLIDATED BALANCE SHEET ASSETS in € thousand ASSETS Non-current assets Intangible assets EQUITY 30.06.2021 31.12.2020 in € thousand 30.06.2021 31.12.2020 EQUITY AND LIABILITIES Equity and reserves 51,760 51,732 Subscribed capital Property, plant and equipment 287 330 Capital reserves Investment properties 3,429,078 3,437,145 Retained earnings Investments accounted for using the equity method 451,331 444,517 Total equity Non-current assets 3,932,456 3,933,724 Current assets Trade receivables Other current assets Cash and cash equivalents Current assets 29,918 18,071 19,822 17,805 268,091 266,030 316,080 303,657 Non-current liabilities Financial liabilities Deferred tax liabilities 61,784 61,784 1,217,560 1,217,560 757,352 723,902 2,036,696 2,003,246 1,335,260 1,359,612 330,846 324,978 Right of redemption of limited partners 318,716 311,525 Other liabilities 27,809 26,851 Non-current liabilities 2,012,631 2,022,966 Current liabilities Financial liabilities Trade payables Tax liabilities Other provisions Other liabilities Current liabilities 172,592 181,816 2,767 989 5,576 3,303 456 8,313 17,285 17,281 199,209 211,169 TOTAL ASSETS 4,248,536 4,237,381 TOTAL EQUITY AND LIABILITIES 4,248,536 4,237,381 Deutsche EuroShop 11

H1 2021 / Half-year Financial Repor t dated 30 June 2021 CONSOLIDATED INCOME STATEMENT in € thousand Revenue Property operating costs Property management costs Write-downs and disposals of financial assets Net operating income (NOI) Other operating income Other operating expenses Earnings before interest and taxes (EBIT) Share in the profit or loss of associates and joint ventures accounted for using the equity method Interest expense Profit / loss attributable to limited partners Interest income Financial gains or losses Measurement gains / losses Earnings before tax (EBT) Taxes on income and earnings CONSOLIDATED PROFIT Earnings per share (€), undiluted and diluted 01.04. – 30.06.2021 01.04. – 30.06.2020 (adjusted) 1 01.01. – 30.06.2021 01.01. – 30.06.2020 (adjusted) 1 53,024 -5,204 -2,259 -6,235 39,326 1,525 -1,772 39,079 8,890 -10,278 -3,514 2 -4,900 -15,933 18,246 -3,761 14,485 0.24 55,092 -4,046 -2,398 -18,632 30,016 1,434 -1,258 30,192 -43,817 -10,976 -1,796 1 -56,588 -163,967 -190,363 33,024 -157,339 -2.54 104,928 -9,901 -5,061 -18,103 71,863 2,309 -3,650 70,522 13,278 -20,483 -5,807 4 -13,008 -13,090 44,424 -7,617 36,807 0.60 112,274 -8,176 -5,050 -19,002 80,046 2,089 -3,636 78,499 -37,300 -21,979 -6,198 6 -65,471 -168,702 -155,674 26,369 -129,305 -2.09 1 Figures shown within net operating income were changed as at 31 December 2020 and the previous year’s quarterly figures have been adjusted for easier comparability. Please refer to the comments in the notes to the 2020 consolidated financial statements under section “4. New accounting standards and changes in presentation”. STATEMENT OF COMPREHENSIVE INCOME in € thousand Consolidated profit Items which under certain conditions will be reclassified to the income statement in the future: Actual share of the profits and losses from instruments used to hedge cash flows Deferred taxes on changes in value offset directly against equity Total earnings recognised directly in equity TOTAL PROFIT Share of Group shareholders 01.04. – 30.06.2021 01.04. – 30.06.2020 01.01. – 30.06.2021 01.01. – 30.06.2020 14,485 -157,339 36,807 -129,305 1,335 -291 1,044 2,229 -495 1,734 -1,156 270 -886 4,003 -888 3,115 15,529 -155,605 35,921 -126,190 15,529 -155,605 35,921 -126,190 Deutsche EuroShop 12

H1 2021 / Half-year Financial Repor t dated 30 June 2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY in € thousand 01.01.2020 Total profit Dividend payments 30.06.2020 01.01.2021 Total profit Dividend payments 30.06.2021 Number of shares outstanding Share capital Capital reserves Other retained earnings Statutory reserve Cash flow hedge reserve Total 61,783,594 61,784 1,217,560 993,900 2,000 -25,671 2,249,573 0 0 0 0 -129,305 0 0 0 3,115 -126,190 0 0 61,783,594 61,784 1,217,560 864,595 2,000 -22,556 2,123,383 61,783,594 61,784 1,217,560 742,183 2,000 -20,281 2,003,246 0 0 0 0 36,807 -2,471 0 0 -886 0 35,921 -2,471 61,783,594 61,784 1,217,560 776,519 2,000 -21,167 2,036,696 CONSOLIDATED CASH FLOW STATEMENT in € thousand Consolidated profit Income taxes Financial gains or losses Amortisation / depreciation of intangible assets and property, plant and equipment with a finite life Unrealised changes in fair value of investment property and other measurement gains / losses Distributions and capital repayments received Changes in trade receivables and other assets Changes in current provisions Changes in liabilities Cash flow from operating activities Interest paid Interest received Income taxes paid Net cash flow from operating activities Outflows for the acquisition of investment properties Inflows from the disposal of investment properties Outflows for the acquisition of intangible assets and property, plant and equipment Cash flow from investing activities Inflows from financial liabilities Outflows from the repayment of financial liabilities Outflows from the repayment of lease liabilities Payments to limited partners Payments to Group shareholders Cash flow from financing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of period CASH AND CASH EQUIVALENTS AT END OF PERIOD 01.01. – 30.06.2021 01.01. – 30.06.2020 36,807 7,617 13,008 63 13,090 6,464 -10,815 -2,737 -696 62,801 -20,333 4 -494 41,978 -3,110 0 - 36 -3,146 5,059 -38,785 -45 -529 -2,471 -36,771 2,061 266,030 268,091 -129,305 -26,369 65,471 72 168,702 6,104 -21,190 -2,429 3,369 64,425 -21,883 6 -1,494 41,054 -6,037 490 - 3 -5,550 7,416 -8,401 -45 -3,757 0 -4,787 30,717 148,087 178,804 Deutsche EuroShop 13

H1 2021 / Half-year Financial Repor t dated 30 June 2021 DISCLOSURES REPORTING PRINCIPLES The Investment Properties (IAS 40) were measured at fair value. Measurements were performed by the appraiser JLL as at 31 December 2020 and 30 June 2021. As in previous years, the dis- counted cash flow method (DCF) was used as at 31 December 2020. Please refer to the notes on the DCF method in our 2020 Annual Report on pages 46 ff. This is a Level 3 measurement method in the These interim financial statements of the Deutsche EuroShop Group fair value hierarchy of IFRS 13. as at 30 June 2021 have been prepared in compliance with IAS 34 (Interim Financial Reporting) in an abridged form. The abridged The following overview shows the key assumptions used by JLL to interim financial statements are to be read in conjunction with the determine the market values: consolidated financial statements as at 31 December 2020. The interim financial statements have been prepared in accordance Measurement parameters in % 30.06.2021 31.12.2020 with the International Financial Reporting Standards (IFRS), as they Rate of rent increases 1 must be applied in the EU. The accounting policies applied corre- Cost ratio spond to those used in the last consolidated financial statements Discount rate as at the end of the financial year. For a detailed description of the methods applied, please refer to the notes to our consolidated finan- Capitalisation interest rate 1.41 11.60 6.06 5.24 1.00 12.00 6.07 5.25 cial statements for 2020 (2020 Annual Report, p. 42 ff.). The new accounting standards and interpretations for which application became compulsory on 1 January 2021 were observed; 1 Nominal rate of rent increases using the DCF method during the 10-year measurement period, including inflation-related rent indexing and changes in the occupancy rate however, these did not have any impact on the presentation of the JLL’s market value assessment was carried out under uncertainty. financial statements. For example, since the outbreak of the pandemic there have been very few market transactions in the shopping center real estate seg- The interim financial statements as at 30 June 2021 have neither ment. There was also a higher degree of uncertainty when estimat- been audited in accordance with Section 317 of the German Com- ing future rental payments. JLL has accounted for this increased mercial Code (HGB) nor reviewed by an auditor. uncertainty by, among other things, adjusting revenue-linked rents, DISCLOSURES ON THE CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED INCOME STATEMENT lower or stable market rents, and conservative re-letting assump- tions. In response to these circumstances, the expert opinions included a special warning on this subject as recommended by RICS (“Impact of Covid-19”). Investment properties Investment properties performed as follows in the first half of 2021: of real estate appraisals would have the following pre-tax impact on measurement gains / losses (including the share attributable to A 25 or 100 bp change in a material parameter (sensitivity analysis) at-equity consolidated companies): in € thousand 2021 2020 Carrying amount at 01.01. 3,437,145 3,822,786 Disposals of investment properties Recognised construction measures 0 3,110 -490 6,037 Sensitivity analysis – Measurement parameters Change in parameter in points Basis in € million in % Unrealised changes in fair value -11,177 -192,461 Rate of rent increases 1.41 Carrying amount at 30.06. / 31.12. 3,429,078 3,635,872 Cost ratio Discount rate Capitalisation interest rate 11.60 6.06 5.24 + 0.25% - 0.25% + 1.00% - 1.00% + 0.25% - 0.25% + 0.25% - 0.25% 153.1 -104.7 -41.9 41.8 -66.7 67.8 -103.1 116.7 4.3 -2.9 -1.2 1.2 -1.9 1.9 -2.9 3.3 Deutsche EuroShop 14

H1 2021 / Half-year Financial Repor t dated 30 June 2021 The appraisal showed that for the first half of 2021, the real estate The fair values of financial liabilities measured at amortised portfolio had a net initial yield before transaction costs of 5.76% cost were equal to the net present value of debt-related pay- compared with 5.73% in 2020, and a net initial yield after transac- ments based on current yield curves (Level 2 under IFRS 13) and tion costs of 5.43% compared with 5.41% in 2020. amounted to €1,547.0 million as at 30 June 2021 (31 December 2020: Outstanding tenant incentives granted and still to be spread over the €1,566.2 million). term of the leases amounting to €9.0 million were deducted from the The derivative financial instruments measured at fair value were appraisal value. These were reported under other assets and trade interest rate hedges. Here the fair value was equivalent to the cash receivables. Financial instruments With the exception of derivative financial instruments and other financial investments measured at fair value, financial assets and lia- bilities were measured at amortised cost. Due to the predominantly short-term nature of trade receivables, other assets and other lia- bilities, and cash and cash equivalents, the carrying amounts on the reporting date did not deviate significantly from the fair values. value of future net payments expected to be received from hedging transactions (Level 2 in accordance with IFRS 13) based on current yield curves. Liabilities from interest rate hedges totalled €27.3 mil- lion as at 30 June 2021 (31 December 2020: €26.1 million). Deutsche EuroShop 15

H1 2021 / Half-year Financial Repor t dated 30 June 2021 SEGMENT REPORTING Segment reporting by Deutsche EuroShop AG is carried out on the To assess the contribution of the segments to the individual perfor- basis of internal reports that are used by the Executive Board to mance indicators as well as to the Group’s performance, the income, manage the Group. Internal reports distinguish between shopping expenditure, assets and liabilities of the joint ventures are included centers in Germany (“domestic”) and other European countries in internal reporting in proportion to the Group’s share in them. Sim- (“abroad”). ilarly, for subsidiaries in which the Group is not the sole shareholder, income, expenditure, assets and liabilities are only consolidated in As the Group’s main decision-making body, the Deutsche EuroShop AG proportion to the corresponding Group share. This results in the fol- Executive Board first and foremost assesses the performance of the lowing breakdown by segment: segments based on revenue, EBIT and EBT excluding measurement gains / losses. The measurement principles for segment reporting cor- respond to those of the Group. BREAKDOWN BY SEGMENT in € thousand Revenue (01.01. – 30.06.2020) EBIT (01.01. – 30.06.2020) EBT excl. measurement gains / losses (01.01. – 30.06.2020) Domestic 92,598 (99,407) 63,578 (70,908) 46,705 (52,576) Abroad 19,871 (19,567) 14,766 (15,549) 11,349 (12,087) Total Reconciliation 112,469 (118,974) 78,344 (86,457) 58,054 (64,663) -7,541 (-6,700) -7,822 (-7,958) -2,306 (-2,640) Segment assets (31.12.2020) of which investment properties (31.12.2020) 3,082,324 (3,083,333) 2,895,171 (2,900,461) 720,212 (714,838) 677,388 (680,092) 3,802,536 (3,798,171) 3,572,559 (3,580,553) 446,000 (439,210) -143,481 (-143,408) 01.01. – 30.06.2021 104,928 (112,274) 70,522 (78,499) 55,748 (62,053) 30.06.2021 4,248,536 (4,237,381) 3,429,078 (3,437,145) The adjustment of the proportionate consolidation of the joint ven- In view of the geographical segmentation, no further information tures and subsidiaries in which the Group does not own a 100% pursuant to IFRS 8.33 is given. stake is carried out in the reconciliation column. Deferred tax liabili- ties are considered by the Executive Board of Deutsche EuroShop AG in a cross-segment manner and are therefore included in the recon- ciliation column of the segment liabilities. Accordingly, the goodwill from the acquisition of Olympia Brno was allocated to the reconcili- RELATED PARTIES FOR THE PURPOSES OF IAS 24 ation column of the segment assets. The reconciliation column also With regard to disclosures regarding related parties, please refer to contains the companies that are not allocated to either of the two the consolidated financial statements as at 31 December 2020 (2020 segments (Deutsche EuroShop AG, DES Management GmbH, DES Annual Report, p. 62), which did not undergo any material changes Beteiligungs GmbH & Co. KG). up to 30 June 2021. Deutsche EuroShop 16

H1 2021 / Half-year Financial Repor t dated 30 June 2021 OTHER DISCLOSURES Dividend On 18 June 2021, distribution of a dividend of €0.04 per share that was paid out on 23 June 2021 was approved for financial year 2020. Responsibility statement by the Executive Board To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim con- solidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the the performance of the business, including the operating results and the position of the Group, together with a description of the principal opportunities and risks associated with the expected performance of the Group for the remainder of the financial year. Hamburg, 12 August 2021 interim management report of the Group includes a fair review of Wilhelm Wellner Olaf Borkers THE SHOPPING CENTER SHARE KEY SHARE DATA After closing the year* 2020 at €18.45, the Deutsche EuroShop Sector / industry group Financial services / real estate Share capital as at 30.06.2021 €61,783,594.00 61,783,594 €0.04 €18.45 €20.00 €16.18 / €20.78 €1.2 billion Frankfurt and Xetra Berlin, Düsseldorf, Hamburg, Hanover, Munich and Stuttgart SDAX, EPRA, GPR 250, EPIX 30, MSCI Small Cap, HASPAX, F.A.Z. Index DE 000748 020 4 DEQ, Reuters: DEQGn.DE Deutsche EuroShop 17 share started the first weeks of 2021 with no clear trend, moving in a range of around €16 to €19. On both 18 and 19 February 2021, the share closed at €16.18, marking the low for the opening first half of the year. The DES share then performed erratically again, before entering a recovery phase from the beginning of June at prices around €20. The high for the period was reached on 8 June 2021 at Number of shares as at 30.06.2021 (no-par-value registered shares) Dividend for 2020 Share price on 30.12.2020 €20.78. The closing price on 30 June 2021 was €20.00. Taking into Share price on 30.06.2021 account the dividend of €0.04 per share paid on 23 June 2021, this Low / high for the period under review corresponds to a gain of +8.6%. The SDAX rose by 8.5% over the same period. Deutsche EuroShop’s market capitalisation stood at €1.2 billion at the end of the reporting period. * Unless otherwise specified, all information and calculations are based on Xetra closing prices. DEUTSCHE EUROSHOP VS. SDAX UND EPRA COMPARISON, JANUARY TO AUGUST 2021 indexed, base of 100, in % Deutsche EuroShop EPRA SDAX Market capitalisation on 30.06.2021 Prime Standard OTC markets Indices ISIN Ticker symbol 125 120 115 110 105 100 95 90 85 Jan. Feb. Mar. Apr. May Jun. Jul. Aug.

H1 2021 / Half-year Financial Repor t dated 30 June 2021 FINANCIAL CALENDAR 2021 12.08. 02.09. 20.09. Half-year Financial Report 2021 Commerzbank Sector Conference (virtual) Berenberg and Goldman Sachs German Corporate 11.11. 29.11. 01.12. Quarterly statement 9M 2021 Citi’s REIT Call Series (virtual) DZ Bank Equity Conference, Frankfurt Conference, Munich 21.09. Baader Investment Conference, Munich Our financial calendar is updated continuously. 22. – 23.09. Bank of America Global Real Estate Conference Please check our website for the latest events: (virtual) www.deutsche-euroshop.com/ir WOULD YOU LIKE ADDITIONAL INFORMATION? Then visit us online or call us: Patrick Kiss and Nicolas Lissner Phone: +49 (0)40 - 41 35 79 20/-22 Fax: +49 (0)40 - 41 35 79 29 www.deutsche-euroshop.de/ir E-Mail: ir@deutsche-euroshop.de Nicolas Lissner and Patrick Kiss Forward-looking statements This quarterly release contains forward-looking statements based Rounding and rates of change Percentages and figures stated in this report may be subject to round- on estimates of future developments by the Executive Board. The ing differences. The sign used to indicate rates of change is based on statements and forecasts represent estimates based on all of the economic considerations: improvements are indicated by a plus (+); information available at the current time. If the assumptions on deterioration by a minus (-). which these statements and forecasts are based do not materialise, the actual results may differ from those currently forecast. Deutsche EuroShop 18