Deutsche Konsum Real Estate Ag · XETR:DKG
Deutsche Konsum Real Estate — Deutsche Konsum REIT-AG — FY2017/2018 Earnings Presentation
44 slides from Deutsche Konsum Real Estate's earnings presentation, December 2018
Slide 1: Deutsche Konsum REIT-AG (DKR) Financial Year Results 2017/2018
Deutsche Konsum REIT-AG (DKR) Financial Year Results 2017/2018
Slide 2: Content
Content Summary of the 12M 2017/2018 Real Estate Portfolio – Key figures, recent developments, tenancy and valuation potential Financial structure Financials 12M 2017/2018 DKR shares, analysts, guidance and dividend policy Finance calendar FY 2018/2019 Appendices Strategy Management External partner
Slide 3: Summary of the Financial Year 2017/2018
Summary of the Financial Year 2017/2018 3
Slide 4: Summary: Achievements in FY 2017/2018
Summary Achievements in FY 2017/2018 >> Strong portfolio growth and reduction of debt costs have increased the profitability: 1 Proforma portfolio grew to 103 properties with a book value of circa 460 mEUR generating annualised rents of 39.5 mEUR 2 Accounted property portfolio as at 30 Sep 2018 rose
Slide 5: Financial key figures
Financial key figures Continuous and solid growth of financial figures in 12M 2017/2018 Rental income (kEUR) FFO (kEUR) FFO per share (EUR) 40,000 20,000 0,7 16,647 0.62 28,601 30,000 15,000 0,6 19,249 10,260 20,000 10,000 0,5 0.46 58% 53% of RI 10,000 5,000 0,4 of RI 0,000 0,000 0,3 2016/2017 2017/
Slide 6: Retail property portfolio
Retail property portfolio 6
Slide 7: Property portfolio: key portfolio figures as at September 2018
Property portfolio Key portfolio figures as at 30 September 2018 Annualised rent (mEUR) Vacancy (%) >> Portfolio snapshot 40 15,0 14.6 35.5 14,0 ➢ Key figures based on 90 properties accounted as 35 13,0 at 30.09.2018 12,0 30 11,0 ➢ Portfolio GAV of about 418 mEUR 24.8 9.6 25 10,0 9,0 ➢ Vacancy level
Slide 8: Property map
Property map 108 properties with 635,000 sqm lettable space and 490 mEUR GAV >> DKR’s top assets > 10 mEUR asset fair value as at 30.09.2018: City Lettable Acquisi Annual Fair value Valuation space tion by rent (mEUR) gain since (sqm) DKR (mEUR) acquisition (%) 1 Erfurt 16,920 2015 2.2 31.0 +44 2 Le
Slide 9: Portfolio map as at 17.12.2018
Oer-Erkenschwick Weißwasser „Südpassage“ Bitterfeld „BiTZ“ Meißen Erfurt Elsterwerda „Elster Center“ Portfolio as at 30.09.2018 (90 properties) Transfer of ownership occured after 30.09.2018 (9 properties) Acquired notarised assets (10 properties) Leipzig „Löwenpark“ Plauen Werdau „Pleissen-Center“
Slide 10: Overview of latest property acquisitions (1)
Property portfolio Overview of latest property acquisitions (1) >> 10 retail assets with a total investment volume of 35 mEUR acquired: Location Schwedt (Brandenburg) Frankfurt Oder Hof (Bavaria) Erkner (Brandenburg) Bad Harzburg (Lower Saxony) (Brandenburg) Space (sqm) 12,000 11,700 7,800 5,800 4,0
Slide 11: Overview of latest property acquisitions (2)
Property portfolio Overview of latest property acquisitions (2) >> 10 retail assets with a total investment volume of 35 mEUR acquired: Location Weida (Thuringia) Mainleus (Bavaria) Dortmund (Northrhine- Merseburg (Saxony-Anhalt) Altentreptow Westphalia) (Mecklenburg- Pommerania) Space (sqm) 1,200 1
Slide 12: Tenant mix
Tenant mix High quality tenants and 68% non-cyclical rents >> Rent contribution by sector (mEUR)1: >> Annualised rent contribution by major tenants1 : Rents WALT in Tenant group Brands (mEUR) years Edeka Group 6.2 4.0 Other cyclical uses Schwarz Group 5.6 5.8 7.7 Metro Group 2.5 9.6 Bartels-Langness
Slide 13: Leases
Leases DKR as a reliable partner for long-lasting tenancies >> Multiple leases with the same tenants1: >> Annualised rents allocated to years of lease contract maturities of the portfolio1: 35 30 1 16.000.000,00 7 14.000.000,00 25 No. of lease contracts Rent p.a. EUR 1 12.000.000,00 20 3 4 10.000.00
Slide 14: Valuation potential
Valuation potential Share price currently trades at a 7.7% yield >> NAV impact derived from factor increases (c.p.) leads to upside potential: Annualised total Hypothetical Hypothetical Portfolio value Net debt NAV Number of portfolio rent valuation Yield Net LTV NAV per share (mEUR) outstanding (mE
Slide 15: Financial structure
Financial structure 15
Slide 16: Solid and efficient debt structure
Financial structure Solid and efficient debt structure >> Financial KPIs: 30.09.2018 30.09.2017 % Debt allocation (mEUR initial nominal debt) Corporate Bond Total financial debt (loans / bonds / convertible bonds), 231.5 118.9 +95 40.0 37.0 mEUR Convertible bond II 7.0 Average nominal interest of lo
Slide 17: Debt metrics have significantly improved
Financial structure Debt metrics have significantly improved >> Development of debt metrics over the last 24 months: Average duration LTV ICR Average interest rate 60 6 50 5 40 4 30 3 20 2 10 1 0 0 30.09.2016 31.12.2016 31.03.2017 30.06.2017 30.09.2017 31.12.2017 31.03.2018 30.06.2018 30.09.2018 LTV
Slide 18: Financials 2017/2018
Financials 2017/2018 18
Slide 19: Condensed IFRS balance sheet
Financials 2017/2018 Condensed IFRS balance sheet kEUR 30.09.2018 30.09.2017 kEUR 30.09.2018 30.09.2017 Assets Equity and liabilities Pro forma portfolio Investment properties 418,707.3 275,443.9 Subscribed capital 27,236.3 24,760.3 Increased equity due currently mEUR 460 (including the latest to 10
Slide 20: LTV and EPRA NAV
Financials 2017/2018 LTV and EPRA NAV >> LTV (loan-to-value): >> EPRA NAV: kEUR 30.09.2018 30.09.2017 30.09.2018 30.09.2017 kEUR Bank loans 155,223.0 72,363.1 Total equity 209,762.4 154,736.0 Convertible bonds 36,098.9 35,541.0 Conversion of convertible bonds 0.0 0.0 Corporate bond 40,158.4 0.0 NAV
Slide 21: Condensed IFRS income statement
Financials 2017/2018 Condensed IFRS income statement kEUR 01.10.2017 – 01.10.2016 – 30.09.2018 30.09.2017 Rental income 28,601.3 19,248.9 Operating expenses -6,333.0 -4,743.2 Rent increases due to various acquisitions Net rental income 22,268.3 14,505.8 Income from property disposal 30.0 8.3 Opportu
Slide 22: FFO reconciliation
Financials 2017/2018 FFO reconciliation >> FFO/aFFO: kEUR 01.10.2017 – 01.10.2016 – 30.09.2018 30.09.2017 Total period income 30,918.5 37,405.0 +/- Income taxes 8.5 0.0 + Depreciation of other assets 1.3 0.9 +/- Gain/loss from fair value measurement of investment -16,336.8 -28,403.8 properties Conta
Slide 23: DKR shares
DKR shares 23
Slide 24: DKR Shares
DKR Shares Share price reflects the steady and accretive growth of DKR >> DKR share: 30.09.2018 ISIN DE000A14KRD3 WKN A14KRD3 Symbol DKG Number of shares 27,236,313 Nominal capital (kEUR) 27,236 Share class Bearer shares Stock exchanges XETRA, Frankfurt, Berlin Segment Prime Standard Indizes Prime a
Slide 25: Analysts
DKR Shares Analysts >> Analyst coverage: Publication date Bank Analyst Recommendation Price target 2 July 2018 Thomas Effler „Buy“ EUR 12.80 15 November 2018 Kai Klose „Buy“ EUR 13.00 13 Dezember 2018 Dr. Georg Kanders „Buy“ EUR 12.50 25
Slide 26: Stable shareholder structure
DKR Shares Stable shareholder structure >> DKR share developments in FY 2017/2018: >> Current shareholder structure (30.09.2018) : Carmignac Gestion ➢ Successful 10% share capital increase closed on 22 Nov 2018 Obotritia Capital Group 30.87% Parson GmbH 0,71 9,99 3,84 ➢ Issuance of 2.7 million new s
Slide 27: Guidance and dividend outlook
Guidance and dividend outlook 27
Slide 28: Outlook to Fiscal Year 2018/2019
Outlook and guidance Outlook to Fiscal Year 2018/2019 >> FFO-Guidance for FY 2018/2019: ➢ DKR expects FFO between 26.0 mEUR and 29.0 mEUR ➢ FFO run rate of 33.0 mEUR by the end of FY 2018/2019 >> Dividend outlook for FY 2018/2019: ➢ Based on current projections we expect a dividend of 0.40 EUR per s
Slide 29: Financial calendar
Financial calendar 29
Slide 30: Financial calendar
Financial calendar We keep you informed >> Financial calendar: >> Upcoming events: Date Date 15.11.2018 Publication of preliminary FY 2017/2018 figures 20.11.2018 Roadshow, London 18.12.2018 Publication of final annual report FY 2017/2018 26.11.2018 Eigenkapitalforum, Frankfurt 14.02.2019 Publicatio
Slide 31: Appendices
Appendices 31
Slide 32: Transforming non-institutional properties into an institutional asset class
Strategy Transforming non-institutional properties into an institutional asset class Owner B Owner C Owner A Owner D Owner E Owner F One owner: Deutsche Konsum REIT-AG ➢ Ownership of German basic retail properties highly fragmented among many private owners ➢ Bundling numerous single properties to a
Slide 33: Investment approach
Strategy Investment approach Idealistic value cycle of a retail property Investment criteria: Possible sale 1. Retail properties in established and stable micro locations and catchment area in regional and mid-sized cities in Germany Property value / WALT 2. Retail tenants with goods of daily needs
Slide 34: Sourcing process for retail properties
Strategy Sourcing process for retail properties Typical set of sellers Analysing process at DKR DKR portfolio Private owners ➢ CIO investment team analyses a Funds in yearly property volume of up to liquidation Remaining 3bn EUR due to age properties of of investors portfolio ➢ Rigorous compliance w
Slide 35: Basic retail threatened less by E-Commerce (1)
Strategy Basic retail threatened less by E-Commerce (1) >> Market research according to 13. Retail Real Estate Report Germany 2018/2018 by bulwiengesa / Hahn1: 35 ill. 1 ill. 2 ill. 3 ill. 4 Results of the statistical data: ➢ E-Commerce grows steadily in the general retail sector but especially in t
Slide 36: Basic retail threatened less by E-Commerce (2)
Strategy Basic retail threatened less by E-Commerce (2) >> Biggest grocery delivery services compared to DKR property portfolio Focused on big cities with > 500k inhabitants: ➢ Biggest deliverers offer services mainly in metropolitan areas ➢ Pick up services as a comfortable combination of online or
Slide 37: Very lean admin structure of the REIT
Strategy Very lean admin structure of the REIT Typical RETT-Blocker structure REIT Holding Verwaltungs GmbH PropCos … … … … REIT-AG vs. … … … … … … … … … … ➢ Many legal entities with high admin efforts ➢ One single legal entity ➢ High attention to legal and tax topics what needs personnel capacities
Slide 38: Experienced and committed management
Management Experienced and committed management Rolf Elgeti (CEO) Rolf has been the founder of Deutsche Konsum REIT-AG, which is a spin-off of his investment company Obotritia Capital. Before he was the CEO of TAG Immobilien AG, Hamburg, which experienced an enormous growth under his leadership and
Slide 39: Strong external partners
Partners Strong external partners >> DKRs external management partners: Elgeti Brothers 39
Slide 40: Value add by extensive property redevelopments
Revitalisation Value add by extensive property redevelopments >> Current major revitalisation projects: Location Domcenter Location Kirschbergcenter Location Kolumbuspassage Location Lindencenter Greifswald Hohenmölsen Rostock Stralsund Space (sqm) 9,410 Space (sqm) 7,797 Space (sqm) 4,492 Space (sq
Slide 41: Portfolio overview
Portfolio overview DKRs current property portfolio Please find DKR‘s current portfolio overview online under the following link: DKR property portfolio overview as at 30th September 2018 41
Slide 42: Glossary
Glossary >> Calculation of financial figures: Financial KPI Calculation Average debt interest rate Weighed average interest rates of financial instruments divided by nominal financial debt EPRA NAV per share Total equity modified according to EPRA guidelines divided by number of shares FFO Funds Fro
Slide 43: IR contact
IR contact Get in touch with us >> IR contact: Stefanie Frey August-Bebel-Str. 68 14482 Potsdam sf@deutsche-konsum.de + 49 (0331) 740 076 533 43
Slide 44: Disclaimer
Disclaimer The material in this presentation has been prepared by Deutsche Konsum REIT-AG (Deutsche Konsum) and is general background information about Deutsche Konsum’s activities current as at the date of this presentation. This information is given in summary form and does not purport to be compl
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