2. Equity Story
๏ง Deutsche EuroShop is Germanyยดs only public company that invests solely in
shopping centers.
๏ง Shopping centers are attractive investments
because of
โ continuously positive development of rents
โ stable long term growth
โ prime locations
โ high quality standards
๏ง Deutsche EuroShop does not seek short-term success, but rather long-term growth
and the resulting stable increase in the value of the portfolio.
03.2016 COMPANY PRESENTATION
2
COMPANY
3. At a Glance
๏ง 19 shopping centers on high street and in established locations โ
16 in Germany and one each in Austria, Hungary and Poland.
๏ง 2015 portfolio valuation: approx. 5.5% net initial yield (before transaction costs)
๏ง Professional center management by ECE, the European market leader in this industry
03.2016 COMPANY PRESENTATION
3
COMPANY
1) 100%-view
Lettable space approx. 930,000 sqm
Retail shops approx. 2,350
Market value approx. โฌ4.3 billion1)
Rents per year โฌ260 million1)
Occupancy rate 99%
avg. lettable space
per DES-center:
inner city
39,200 sqm
est. Locations
100,900 sqm
5. Lease System
๏ง 10 years lease
๏ง no break-up option
๏ง turnover-linked rents
๏ง minimum rents are CPI-linked
๏ง avg. retail space rent per sqm and year: โฌ250
๏ง avg. turnover per sqm and year (productivity) in DES shopping centers: โฌ4,450
(avg. German retail: โฌ3,463, avg. German shopping centers: โฌ3,972)1) 2)
๏ง rent-to-sales-ratio: 7-11%
๏ง weighted maturity of rental contracts: 6.4 years1)
03.2016 COMPANY PRESENTATION
5
COMPANY
0%
1%
2%
3%
4%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
German inflation
avg. 1.6%
DESยด like-for-like revenue
avg. 2.1%
LIKE-FOR-LIKE REVENUE
1) Status: 31 Dec. 2014
2) incl. VAT
6. Targets
๏ง Long term net asset value enhancement
๏ง Main focus on NAV and dividend
๏ง โbuy & holdโ-strategy, Continuous growth
๏ง Stable and attractive dividends
Dividend yield: currently 3.5%
๏ง Investment-focus:
At least 75% Germany and up to 25% Europe
๏ง Portfolio extension
โ by acquisition of new shopping centers
โ by increasing existing amounts of holdings
โ by expansion of portfolio centers
03.2016 COMPANY PRESENTATION
6
COMPANY
17. Tenants Structure Top 10 Tenants
03.2016 COMPANY PRESENTATION
17
SHOPPING CENTERS
1) in % of total rents as at 31 Dec. 2014
2) in % of total rents as at 31 Dec. 2013
Low level of
dependence on
the top 10 tenants
Metro Group 5.6% 5.6%
Douglas Group 3.8% 4.5%
H&M 3.2% 3.2%
New Yorker 2.4% 2.3%
Peek & Cloppenburg 2.1% 2.1%
Deichmann 1.9% 1.9%
REWE 1.6% 1.6%
C&A 1.5% 1.5%
Inditex Group 1.3% 1.5%
Esprit 1.2% 1.4%
Total 24.6%1) 25.6%(2
Other tenants
Total 75.4%1) 74.4%(2
18. 03.2016 COMPANY PRESENTATION
18
SHOPPING CENTERS
Maturity Distribution of Rental Contracts1)
1) as % of rental income as at 31 Dec. 2014
๏ง Long-term
contracts
guarantee rental
income
๏ง Weighted
maturity
6.4 years
2020 et sqq:
64%
2015: 2%
2016: 9%
2017: 10%
2018: 9%
2019: 6%
19. Sector Mix1)
03.2016 COMPANY PRESENTATION
19
SHOPPING CENTERS
Balanced sector
diversification
fashion
51%
non-food/
electronics
19% department stores
11%
food
7%
health &
beauty
6%
catering
4%
services
2%
1) as % of rental space as at 31 Dec. 2014
20. 03.2016 COMPANY PRESENTATION
20
FINANCIALS
1) incl. non controlling interests
Key Figures 9M 2015
โฌ million 01.01.-30.09.2015 01.01.-30.09.2014 Change
Revenue 151.0 149.7 1%
Net operating income 135.9 136.0 -0%
EBIT 131.0 132.3 -1%
Net finance costs -37.2 -41.7 11%
Valuation result -2.8 -4.4 36%
EBT 91.0 86.2 6%
Consolidated profit 73.6 69.5 6%
FFO per share (โฌ) 1.68 1.64 3%
Earnings per share (โฌ, undiluted) 1.37 1.29 6%
โฌ million 30.09.2015 31.12.2014 Change
Total equity1) 1,759.2 1,751.2 0%
Financial liabilities 1,418.9 1,430.1 -1%
Other debt (incl. Deferred taxes) 314.0 310.9 1%
Total assets 3,492.1 3,492.2 0%
Net financial liabilities 1,362.1 1,371.8 1%
Equity ratio1) 50.4% 50.1%
LTV ratio 40% 40%
Gearing1) 99 99
21. 03.2016 COMPANY PRESENTATION
21
FINANCIALS
Valuation1) โ Investment Properties
1) External appraiser since 2015: Jones Lang
LaSalle (2003-2014: Feri Research and GfK
Geomarketing)
2) Status: 7 January 2016
5.46
5.39 5.40
5.64
5.82
5.89
5.92
5.98
5.97
5.87
5.50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
net initial yield (before transaction costs)
%
๏ง 2015 valuation gain expected to be โฌ260 million (previous year: โฌ89.7)
๏ง Approx. โฌ215 million (previous year: โฌ77.0 million) from the fully consolidated centers
๏ง Approx. โฌ45 million (previous year: โฌ12.7 million) from the centers, which are accounted
for using the equity method
๏ง Average valution uplift approx. +8%
22. 03.2016 COMPANY PRESENTATION
22
FINANCIALS
Interest lockin Duration
Principle amounts
(โฌ thousand)
Share of
total loan
avg.
interest rate
Up to 1 year 33.0 2% 0.62%
1 to 5 years 2.9 437.6 31% 4.15%
5 to 10 years 6.5 790.9 56% 3.59%
Over 10 years 11.6 147.7 11% 4.08%
Total 2015 5.9 1,409.2 100% 3.76%
Loan Structure1) 2) incl. Convertible Bond
1) as of 30 September 2015
2) excl. non-consolidated loans
๏ง 20 German Banks
๏ง Weighted maturity
of fixed interest periods
5.9 years
5.03
4.59
4.16
3.88
3.76 3.76
0
1
2
3
4
5
6
7
8
3,50
4,00
4,50
5,00
5,50
6,00
2010 2011 2012 2013 2014 2015
avg. Interest rates
yrs%
1)
23. 03.2016 COMPANY PRESENTATION
23
FINANCIALS
in โฌ thousand
end of fixed interest
periods respectively
expiring loans avg. interest rate
regular redemption
payments total maturities
2015 0 4,500 4,500
2016 79,800 4.92% 18,400 98,200
2017 96,100 1.75% 16,500 112,600
2018 72,100 4.60% 17,800 89,900
2019 119,300 4.78% 18,500 137,800
Maturities until 20191) 2)
1) as of 30 September 2015
2) excl. non-consolidated loans
367,300
in โฌ thousand
end of fixed interest
periods respectively
expiring loans avg. interest rate DESโ share
2015 0
2016 144,900 4.94% 50%
2017 0
2018 0
2019 0
Non-consolidated loans1)
City-Arkaden, Klagenfurt:
โฌ91.8m; 4.30% interest rate
Phoenix-Center, Hamburg:
โฌ53.1m; 6.06% interest rate
26. 03.2016 COMPANY PRESENTATION
26
SHOPPING CENTER SHARES
Dividend & Performance
1) respectively paid for the previous FY
2) 2016: as of 9 March 2016
3) paid on 19 June 2015
4) as of 31 Dec. 2015
5) EPRA/NAREIT Europe
6) German government bonds index
7) proposal
8) Open ended real estate funds
Dividend1) Share price2)
0.96 0.96
1.00
1.05 1.05 1.05 1.05
1.10 1.10
1.20
1.25
1.303)
1.357)
1.407)
19.26
23.73
28.08
23.50 24.30 23.67
28.98
24.80
31.64 31.83
36.20
40.46
38,88
10,00
15,00
20,00
25,00
30,00
35,00
40,00
45,00
0,90
1,00
1,10
1,20
1,30
1,40
1,50
1,60
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PERFORMANCE4)
DES DAX EPRA5) REX6) OEF8)
1 year (2015) +15.3% +9.6% +20.0% +0.5% +3.3%
3 years +41.8% = +12.3% p.a. +12.2% p.a. +18.5% p.a. +2.3% p.a. +2.2% p.a.
5 years +67.4% = +10.8% p.a. +9.2% p.a. +14.3% p.a. +4.0% p.a. +2.3% p.a.
Since IPO (2001) +285.4%= +9.4% p.a. +3.5% p.a. +8.9% p.a. +4.7% p.a. +3.4% p.a.
27. Shareholder Structure1)
03.2016 COMPANY PRESENTATION
27
SHOPPING CENTER SHARES
1) Status: 8 March 2016
๏ง 10,200 shareholders
๏ง Free float 82.7%
Institutional Investors
55.5%
Private
Investors
19.6%
Alexander Otto
17.3%
BlackRock 4.2%
US 8%
Germany 59%
NL 8%
BE 2%
GB 9%
FR 7%
Other 1%
NO 2%
CH 4%
Johannes Schorr 3.4%
28. Analystsโ Consensus1)
03.2016 COMPANY PRESENTATION
28
SHOPPING CENTER SHARES
1) aggregated by DES
2) according to Bloomberg as of Feb. 2016
avg. / in โฌ 2015 2016
EBIT (โฌ million) 179.4 181.8
FFO per share 2.26 2.32
NAV per share 37.19 39.06
Dividend 1.35 1.40
Price target 43.22
Status: 15 Feb. 2016
๏ง 24 analysts: one of the
best covered real estate
companies in Europe2)
Sell Underperform Neutral Outperform Buy
๏ง ABN Amro
๏ง Baader Bank
๏ง Bankhaus Lampe
๏ง Berenberg Bank
๏ง DZ Bank
๏ง Kepler Cheuvreux
๏ง Metzler
๏ง Natixis
๏ง Societe Generale
๏ง Commerzbank
๏ง Deutsche Bank
๏ง Hamburger
Sparkasse
๏ง HSBC
๏ง Independent
Research
0%
100%
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
Q1
06
Q2
06
Q3
06
Q4
06
Q1
07
Q2
07
Q3
07
Q4
07
Q1
08
Q2
08
Q3
08
Q4
08
Q1
09
Q2
09
Q3
09
Q4
09
Q1
10
Q2
10
Q3
10
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
Q3
12
Q4
12
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
Q1
16
positive neutral negative
๏ง J.P. Morgan Cazenove
๏ง Kempen & Co
๏ง M.M. Warburg
๏ง NORD/LB
๏ง Oddo Seydler
๏ง Green Street
Advisors
๏ง UBS
๏ง BHF Bank
๏ง Equinet
๏ง BofA Merrill Lynch
29. 10 Reasons to Invest
1. The only public company in Germany to invest solely
in shopping centers
2. Prime locations
3. Proven, conservative strategy
4. Stable cash flow with long term visibility
5. Shareholder-friendly dividend policy
6. Experienced management team
7. Excellent track record
8. Centers almost 100% let
9. Inflation-protected rental agreements
10.Solidity combined with growth potential
03.2016 COMPANY PRESENTATION
29
SHOPPING CENTER SHARE
30. Listed since 02.01.2001
Nominal capital โฌ53,945,536.00
Outstanding shares 53,945,536
Class of shares Registered shares
Dividend 2014 (paid on 19 June 2015) โฌ1.30
52W High โฌ48.33
52W Low โฌ36.58
Share price (9 March 2016) โฌ38.88
Market capitalisation โฌ2.10 billion
avg. turnover per day last 12 months (XETRA) 160,400 shares
Indices
MDAX, EPRA, GPR, MSCI Small Cap,
EURO STOXX, STOXX Europe 600
Official market
Prime Standard
Frankfurt and XETRA
OTC market
Berlin-Bremen, Dusseldorf, Hamburg,
Hanover, Munich and Stuttgart
ISIN DE 000 748 020 4
Ticker DEQ, Reuters: DEQGn.DE
Market maker Oddo Seydler
Key Data of the Share
03.2016 COMPANY PRESENTATION
30
APPENDIX
31. Amount โฌ100 million
Principal amount โฌ100,000 per Bond
Issue date 20 Nov. 2012
Maturity date 20 Nov. 2017
Coupon 1.75%
Price (9 March 2016) 127.45%
Interest payment date
payable semi-annually in arrear on
21 May and 21 November in each year
Conversion price โฌ31.651)
Dividend protection
Conversion Price adjustment for any
dividends paid (full dividend protection)
ISIN DE 000 A1R 0W0 5
Listing
Open Market (Freiverkehr) segment of the
Frankfurt Stock Exchange
Key Data of the Convertible Bond 1.75% 2017
03.2016 COMPANY PRESENTATION
31
APPENDIX
1) originally โฌ35.10, adjusted on 21 June 2013,
19 June 2014 and 19 June 2015
32. 03.2016 COMPANY PRESENTATION
APPENDIX
Retail sector % change
rent-to-sales
ratio in %
% of
sales
% of
space
Department stores -2.3 6.0 7.8 13.5
Food -0.6 7.5 9.1 6.3
Fashion textiles -1.6 12.1 30.2 39.8
Shoes & leather goods -2.4 14.2 5.4 6.4
Sports -1.1 8.9 4.0 4.6
Health & Beauty 3.8 7.0 11.7 5.8
General Retail -1.5 11.0 8.6 9.5
Electronics 1.7 4.1 14.1 8.5
Services 3.0 4.5 4.6 1.5
Food catering 1.8 13.3 4.5 4.2
Total2)
-0.2 9.1 100.0 100.0
Retail turnover 9M 20151)
1) German centers on a like-for-like
basis
2) Totals may include differences due to
rounding
๏ง like-for-like retail turnover development: Germany -0.2%, abroad 0.9%
DES-Portfolio overall: 0%
๏ง absolute retail turnover development: Germany -0.1%, abroad 2.1%
DES-Portfolio overall: 0.2%
3232
34. Online vs. stationary retail?
03.2016 COMPANY PRESENTATION
34
APPENDIX
Source: GfK
Pure online
purchases
Order in shop,
dispatch by post
Order online, pickup
in shop (click & collect)
Online search,
purchase in shop
Pure shop purchases
๏ง Stationary retail transforms from โPoint of Purchaseโ to โTouch Pointโ
(product experience).
๏ง New store concepts (flagship store, show room, multi-channel store, pick-up store),
click & collect, augmented reality, online goes offline, mobile services
๏ง โLocation, location, locationโ newly interpreted: โconvenience, attractivity & likeabilityโ
Turnover distribution of a fashion retailer
ยฃm
35. Our partner: ECE
๏ง ECE develops, plans, builds, leases and manages large commercial real estate in the
sectors shopping, office, industries since 1965
๏ง originally ECE was an abbreviation for the German word
Einkaufscenterentwicklung (Shopping center development)
๏ง 100% privately owned by the Otto family
๏ง active in 16 European countries
๏ง European market leader in the shopping center business
๏ง Assets under management:
โ 196 shopping centers
โ 7.0 million sqm overall sales area
โ approx. 20,000 retail businesses
โ 4.4 million daily visitors
โ โฌ28 billion assets under management
MANY INVESTORS RELY ON ECE:
03.2016 COMPANY PRESENTATION
35
APPENDIX
36. Environment
๏ง Climate protection is one of the most important issues for Deutsche EuroShop. We believe
that sustainability and profitability, the shopping experience and environmental awareness
are not opposing forces. Long-term thinking is part of our strategy. This includes playing our
part in environmental protection.
๏ง In 2014, all our German shopping centers had contracts with suppliers that use renewable
energy sources, such as hydroelectric power, for their electricity needs. The โEnergieVisionโ
organisation certified the green electricity for our centers in Germany with the renowned
โok-powerโ accreditation in 2014. We also plan to switch our centers in other countries
over to green electricity wherever possible within the next few years.
03.2016 COMPANY PRESENTATION
36
APPENDIX
๏ง The German centers used a total of around
68.1 million kWh of green electricity in 2014. This
represented 100% of the electricity requirements
in these shopping centers. Based on conservative
calculations, this meant a reduction of around
24,080 tonnes in carbon dioxide emissions, which
equates to the annual CO2 emissions of around
1,100 two-person households. The use of heat
exchangers and energy-saving light bulbs allows
us to further reduce energy consumption in our
shopping centers.
๏ง Deutsche EuroShop, through its shopping centers, also supports a range of activities at local
and regional level in the areas of ecology, society and economy.
37. Financial Calendar
03.2016 COMPANY PRESENTATION
37
APPENDIX
2016
06.-08.04. Roadshow USA, Berenberg
06.04. Roadshow London, Metzler
07.04. Roadshow Paris, Natixis
18.04. Roadshow Munich, Baader Bank
18.04. Roadshow Frankfurt, HSBC
28.04. Publication of the Annual Report 2015
12.05. Interim report Q1 2016
26.05. Kempen European Property Seminar, Amsterdam
01.06. Kepler Cheuvreux German Property Day, Paris
01.06. Roadshow Warsaw, Erste Securities Polska
08.06.
Deutsche Bank dbAccess German Swiss &
Austrian Conference, Berlin
15.06. Annual General Meeting, Hamburg
01.07. ESN equinet European Conference, Frankfurt
07.07. Roadshow London, Societe Generale
07.07. Roadshow Zurich, Bankhaus Lampe
08.07. Roadshow Cologne-Dusseldorf, DZ Bank
08.07. Roadshow Stuttgart, ESN equinet
12.07. DSW Private Investors Forum, Frankfurt
15.08. Interim report H1 2016
17.08. Roadshow Helsinki, ESN equinet
13.09.
Bank of America Merrill Lynch Global Real Estate
Conference, New York
14.09. UBS Best of Germany Conference, New York
19.09.
Goldman Sachs & Berenberg German Conference,
Munich
20.09. Baader Investment Conference, Munich
04.-06.10. EXPO Real, Munich
10.10. Roadshow Madrid, M.M. Warburg
13.10. Roadshow Brussels, DZ Bank
14.11. Nine-month report 2016
16.11. Roadshow Amsterdam, ABN AMRO
16.11. Roadshow Geneva, Kepler Cheuvreux
17.11. Roadshow Zurich, Kepler Cheuvreux
22.11. German Equity Forum, Frankfurt
38. Important Notice: Forward-Looking Statements
Statements in this presentation relating to future status or
circumstances, including statements regarding managementโs
plans and objectives for future operations, sales and earnings
figures, are forward-looking statements of goals and expectations
based on estimates, assumptions and the anticipated effects of
future events on current and developing circumstances and do not
necessarily predict future results.
Many factors could cause the actual results to be materiallydifferent
from those that may be expressed or implied bysuch statements.
Deutsche EuroShop does not intend to update these forward-
looking statements and does not assume any obligation to do so.
Contact
03.2016 COMPANY PRESENTATION
38
APPENDIX
This presentation is a FSC certified product
Deutsche EuroShop AG
Investor & Public Relations
Heegbarg 36
22391 Hamburg
Tel. +49 (40) 41 35 79 - 20 / - 22
Fax +49 (40) 41 35 79 - 29
E-Mail: ir@deutsche-euroshop.com
Web: www.deutsche-euroshop.com
ir-mall.com
facebook.com/euroshop
flickr.com/desag
slideshare.net/desag
twitter.com/des_ag
youtube.com/DeutscheEuroShop
Patrick Kiss
Head of Investor & Public Relations
Nicolas Lissner
Manager Investor & Public Relations
Wilhelm Wellner
Chief Executive Officer
Olaf Borkers
Chief Financial Officer