Deutsche Konsum Real Estate Ag · XETR:DKG
Deutsche Konsum Real Estate — Deutsche Konsum REIT-AG — 9M 2017/2018 Earnings Presentation
42 slides from Deutsche Konsum Real Estate's earnings presentation, August 2018
Slide 1: Deutsche Konsum REIT-AG (DKR) 9M Results 2017/2018
Deutsche Konsum REIT-AG (DKR) 9M Results 2017/2018
Slide 2: Agenda
Agenda Summary of the 9M 2017/2018 Real Estate Portfolio – Key figures, recent developments, tenancy and valuation potential Financial structure Financials 9M 2017/2018 DKR shares, analysts, guidance and dividend policy Finance calendar FY 2017/2018 Appendices Strategy Management External partners C
Slide 3: Summary of the 9M 2017/2018
Summary of the 9M 2017/2018 3
Slide 4: DKR's major achievements in 9M 2017/2018
Summary DKR‘s major achievements in 9M 2017/2018 >> Steady growth and constant KPI improvements: ➢ Acquisition of 32 new properties with a total volume of circa 112 mEUR within the first nine months of the FY 2017/2018 ➢ Proforma portfolio now consists of 94 properties with a book value of circa 415
Slide 5: Financial key figures
Financial key figures Continuous and solid growth of financial figures in 9M 2017/2018 Rental income (kEUR) FFO (kEUR) FFO per share (EUR) 25,000 12,000 11,372 0,5 20,914 10,000 0.43 20,000 13,754 8,000 7,076 0,4 15,000 6,000 0.33 10,000 54% 4,000 51% 0,3 of RI 5,000 2,000 of RI 0,000 0,000 0,2 9M 2
Slide 6: Retail property portfolio
Retail property portfolio 6
Slide 7: Property portfolio: key portfolio figures as at June 2018
Property portfolio Key portfolio figures as at 30 June 2018 Annualised rent (mEUR) Vacancy (%) >> Portfolio snapshot 15,0 14.6 30.0 ➢ Key figures based on 84 properties accounted as 30 14,0 at 30.06.2018 13,0 24.8 25 12,0 ➢ Portfolio GAV of about 352 mEUR 11.2 11,0 ➢ Vacancy level dropped due to the
Slide 8: Property map and top assets
Property map 94 properties with > 525,000 sqm lettable space and 415 mEUR GAV >> DKR’s top assets > 10 mEUR asset fair value as at 30.06.2018: 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 L
Slide 9: Portfolio map and property photos
Oer-Erkenschwick Weißwasser „Südpassage“ Bitterfeld „BiTZ“ Meißen Erfurt Elsterwerda „Elster Center“ Portfolio as at 30.06.2018 (84 properties) Transfer of ownership occured after June 2018 (5 properties) Acquired notarised assets (5 properties) Leipzig „Löwenpark“ Plauen Werdau „Pleissen-Center“ 9
Slide 10: Total investments in FY 2017/2018 already above plan
Portfolio Total investments in FY 2017/2018 already above plan >> Major FFO contribution in Q4 2017/2018: Transfer of Annualised rent # Location Main tenants Investment (mEUR) Details ownership (mEUR) Transfer of ownerships occured in Q1 and Q2 1.7 15.8 71 Dierdorf Fressnapf, Kik April 18 0.1 72 Wei
Slide 11: Latest acquisitions
Portfolio Latest acquisitions >> FFO contribution in Q4 2017/2018 expected: Location 1 Rudolstadt Location 2 Salzwedel Location 3 Uelzen Location 4 Wolgast Location 5 Reinsdorf Space (sqm) 2,900 Space (sqm) 5,300 Space (sqm) 3,300 Space (sqm) 2,900 Space (sqm) 1,400 Annualised rent 130 Annualised re
Slide 12: Tenant mix
Tenant mix High quality tenants and 70% 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 5.5 3.4 Other cyclical uses Schwarz Group 5.6 6.1 6.1 Metro Group 2.5 10.0 Bartels-Langnes
Slide 13: Leases: DKR as a reliable partner
Leases DKR as a reliable partner for long-lasting tenancies >> Multiple leases with the same tenants foster the relationship1: >> Annualised rents allocated to years of lease contract maturities of the portfolio1: 35 18.000.000 30 1 16.000.000 25 7 14.000.000 No. of lease contracts Rent p.a. EUR 1 1
Slide 14: Valuation potential
Valuation potential Share price currently trades at attractive 7.4% 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) outsta
Slide 15: Financial structure
Financial structure 15
Slide 16: Solid and efficient debt structure
Financial structure Solid and efficient debt structure >> Debt structure of DKR: Debt allocation (mEUR initial nominal debt) 30.06.2018 30.09.2017 37.0 Corporate Bond 40.0 Debt from loans and convertible bonds (IFRS), mEUR 209.3 118.9 13.0 Average nominal interest of loans, % p.a. 2.01 2.38 Converti
Slide 17: Debt metrics have significantly improved
Financial structure Debt metrics have significantly improved >> Development of debt metrics over the last 21 months: Average interest rate Average duration LTV ICR 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 LTV (%) Avg. I
Slide 18: Scope Rating: Senior secured debt BBB
Scope Rating Senior secured debt „BBB“ (Investment grade) >> Scope initial rating as of 31 May 2018 (extract of rating report): 18
Slide 19: Financials 9M 2017/2018
Financials 9M 2017/2018 19
Slide 20: Condensed IFRS balance sheet
Financials 9M 2017/2018 Condensed IFRS balance sheet kEUR 30.06.2018 30.09.2017 kEUR 30.06.2018 30.09.2017 Assets Equity and liabilities Pro forma portfolio of Investment properties 352,398.5 275,443.9 Subscribed capital 27,236.3 24,760.3 Increased equity due mEUR 415 including the latest notarised
Slide 21: Condensed IFRS income statement
Financials 9M 2017/2018 Condensed IFRS income statement kEUR 01.10.2017 – 01.10.2016 – 30.06.2018 30.06.2017 Rental income 20,914.4 13,753.7 Operating expenses -5,501.4 -3,304.9 Rent increases due to various acquisitions Net rental income 15,413.0 10,448.8 Income from property disposal 30.0 8.3 Oppo
Slide 22: FFO and EPRA NAV reconciliation
Financials 9M 2017/2018 FFO and EPRA NAV reconciliation >> FFO/aFFO: >> EPRA NAV: kEUR 01.10.2017 – 01.10.2016 – 30.06.2018 30.09.2017 kEUR 30.06.2018 30.06.2017 Total period income 25,425.5 32,754.9 +/- Income taxes 10.5 0.0 Total equity 204,269.3 154,736.0 + Depreciation of assets 0.7 0.7 Conversi
Slide 23: DKR shares, analysts, guidance and dividend policy
DKR shares, analysts, guidance and dividend policy 23
Slide 24: DKR Shares
DKR Shares Share price reflects the steady and accretive growth of DKR >> DKR share: 14.05.2018 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 12 June 2018 Kai Klose „Buy“ EUR 12.50 16 Mai 2018 Dr. Georg Kanders „Buy“ EUR 12.00 25
Slide 26: Stable shareholder structure
DKR Shares Stable shareholder structure >> DKR share developments in FY 2017/2018: >> Current shareholder structure (30.06.2018) : ➢ Successful 10% share capital increase closed on 8 Dec 2017 Obotritia Capital Carmignac Gestion Group 30.45% 0.97 3.49 Aramis Holding GmbH 9.57 ➢ Issuance of 2,476,028
Slide 27: FFO guidance and dividend policy for FY 2017/2018
DKR Shares FFO-Guidance and dividend policy for Fiscal Year 2017/2018 >> FFO-Guidance for FY 2017/2018: ➢ Strong 4th quarter expected due to transfer of ownership of big hypermarkets ➢ DKR expects FFO between 16.0 mEUR and 18.0 mEUR ➢ FFO run rate at 23.0 mEUR by the end of FY 2017/2018 >> Dividend
Slide 28: Finance calendar
Finance calendar 28
Slide 29: Finance calendar
Finance calendar We keep you informed >> Finance calendar: >> Upcoming events: Date Date 14.08.2018 Publication of Q3 2017/2018 quarterly statement 29.08.2018 Berenberg Real Estate Helsinki Seminar, Helsinki 15.11.2018 Publication of preliminary FY 2017/2018 figures 06.09.2018 EPRA Conference 2018,
Slide 30: Appendices
Appendices 30
Slide 31: DKR Strategy at a Glance (1) - Focussing on high cashflows
Appendix I DKR Strategy at a Glance (1) - Focussing on high cashflows 2a Efficient Asset Management 1 ➢ Experienced inhouse 3 4a Sourcing and AM Lean admin Investment Collecting cash ➢ Stabilising assets structure and flows 5 ➢ Acquisition of retail ➢ Prolongation of access to capital properties in
Slide 32: DKR Strategy at a Glance (2) - Opportunities and capital recycling
Appendix I DKR Strategy at a Glance (2) - Opportunities and capital recycling >> Value add strategy: ➢ DKR invests in properties in stable and established micro locations at a low level 4b Sale of the value cycle (1) ➢ In many cases these properties are slightly undermanaged or need new concepts or
Slide 33: Experienced and committed management
Appendix II 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 34: Strong external partners
Appendix III Strong external partners >> DKRs external management partners: Elgeti Brothers 34
Slide 35: Value add by extensive property redevelopments
Appendix IV 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 (sqm)
Slide 36: Case 1: Bitterfeld - Revitalisation of BiTZ retail store
Appendix IV Case 1: Bitterfeld - Revitalisation of „BiTZ“ retail store At purchase Now progress Revitalisation process: Results: 1 New attractive tenants REWE (15 New utilisation concept by DKR‘s AM and years contract) and DM (12 years activation of unused land by new construction contract) and incr
Slide 37: Case 2: Ludwigslust - Extending the anchor of Lindencenter
Appendix IV Case 2: Ludwigslust - Extending the anchor of „Lindencenter“ At purchase Now progress Value-add measures: Results: 1 Prolongation of food retail anchor by At purchase through DKR the anchor tenant 10 years with same conditions was about to leave the asset. Started which increased the WAL
Slide 38: Case 3: Greifswald - Vacancy reduction through new concept
Appendix IV Case 3: Greifswald - Vacancy reduction through new attractive concept At purchase After rebuilding progress Revitalisation process: Results: 1 At purchase the retail centre had an uncertain Space expansion of food retail future stucking in a liquidation for years. anchor and fashion stor
Slide 39: DKR's current property portfolio
Appendix V DKRs current property portfolio Please find DKR‘s current portfolio overview online under the following link: DKR property portfolio overview as at 30th June 2018 39
Slide 40: 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 41: 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 41
Slide 42: 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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