Deutsche Konsum Real Estate Ag · XETR:DKG
Deutsche Konsum Real Estate — Deutsche Konsum REIT-AG — 9M 2018/2019 Earnings Presentation
45 slides from Deutsche Konsum Real Estate's earnings presentation, Aug 14, 2019
Slide 1: 9M 2018/2019 results
1 9M 2018/2019 results 1 October 2018 to 30 June 2019 14 August 2019 9M 2018/2019 Results | Deutsche Konsum REIT-AG
Slide 2: Agenda
Agenda 2 Highlights 9M 2018/2019 Property Portfolio Financial structure Financials 9M 2018/2019 Appendix Strategy Management External partners Revitalisation / Value add Property overview as at 30 June 2019 Glossary 9M 2018/2019 Results | Deutsche Konsum REIT-AG
Slide 3: Highlights 9M 2018/2019
Highlights 9M 2018/2019 3 Strong portfolio growth ➢ Acquired 34 retail properties with a total investment volume of 160 mEUR at an average yield of 9.3% ➢ (Proforma) portfolio now generates annualised rents of 49.2 mEUR Operational business in good shape ➢ FFO margin increased to 64% (+10pp) ➢ 1.1%
Slide 4: 9M 2018/2019 results
4 9M 2018/2019 results 9M 2018/2019 Results | Deutsche Konsum REIT-AG 4
Slide 5: Financial key figures
Financial key figures 5 Strong and continuous growth Rental income (kEUR) FFO (kEUR) FFO per share (EUR) 19,159 0.65 30,136 20,914 11,372 64 % of 0.43 RI 54 % of RI 9M 2017/2018 9M 2018/2019 9M 2017/2018 9M 2018/2019 9M 2017/2018 9M 2018/2019 aFFO per share (EUR) Investment properties (kEUR) EPRA NA
Slide 6: Property portfolio
6 Property portfolio 9M 2018/2019 Results | Deutsche Konsum REIT-AG 6
Slide 7: Property portfolio
Property portfolio 7 Key portfolio figures as at 30 June 2019 Annualised rent (mEUR) Vacancy (%) >> Portfolio snapshot: ➢ Key portfolio figures based on 113 properties 42.5 accounted as at 30.06.2019 9.6 ➢ Vacancy level mainly dropped due to the latest addition of assets with high occupancy 9.2 rate
Slide 8: Property portfolio
Property portfolio 8 Portfolio consists of 123 properties with 727,000 sqm Schleswig- Mecklenburg- >> Top 10 assets with the highest fair values (as at 30 June 2019): Holstein Pommerania City Lettable Year of Annual Fair Valuation space acquisition rent value gain since (sqm) (mEUR) (mEUR) acquisiti
Slide 9: Selection of the latest property acquisitions
Property portfolio 9 Selection of the latest property acquisitions >> 9M 2018/2019 total investment volume amounts to 160 mEUR: Location Chemnitz – Vita Center Eggesin Lübz (Saxony) (Mecklenburg-Pommerania) (Mecklenburg-Pommerania) Space (sqm) 42,000 1,200 1,700 Annualised rent (kEUR) 2,900 126 146
Slide 10: Tenant mix
Tenant mix 10 Rent contribution from non-cyclical tenants of c. 68% >> Rent contribution by tenant classification (mEUR)1: >> Rent contribution by major tenants1 : Rents WALT Tenant group Brands (mEUR) in years Schwarz Group 6.9 5.5 Edeka Group 6.8 6.7 Other cyclical uses 10.9 Rewe Group 3.3 6.7 Met
Slide 11: Leases
Leases 11 DKR as a reliable partner for stable long-term tenancies >> Multiple leases with the same tenants1: >> Annualised rents allocated to years of lease contract maturities1: 45 25.000.000,00 40 2 20.000.000,00 35 7 No. of lease contracts 30 3 4 15.000.000,00 Rent p.a. EUR 25 6 19 10 20 10.000.
Slide 12: Revaluation uplift by 6.9% as at June 2019
Property portfolio 12 Revaluation uplift by 6.9% as at 30 June 2019 >> Portfolio development within the last 21 months: 30.09.2017 30.09.2018 30.06.2019 Proforma ➢ DKRs avg. acquisition price of c. 595 EUR / sqm (portfolio as of 30 portfolio June 2019) far below replacement costs (including signed a
Slide 13: Valuation potential
Valuation potential 13 Share price currently trades at a 6.7% yield >> NAV impact derived from factor increases (c.p.) leads to upside potential: Annualised Hypothetical Hypothetical Portfolio Net debt NAV Number of total portfolio valuation Yield Net LTV NAV per share value (mEUR) outstanding (mEUR
Slide 14: Financial structure
14 Financial structure 9M 2018/2019 Results | Deutsche Konsum REIT-AG 14
Slide 15: Financial structure
Financial structure 15 Conservative and efficient debt structure Debt allocation (mEUR initial nominal debt) Corporate bond 2019/2024 >> Financial KPIs: (unsecured) 50.0 37.0 30.06.2019 30.09.2018 % 29.5 Total financial debt (loans / bonds / convertible bonds), mEUR 312.5 231.6 +35 Corporate bond 40
Slide 16: Reduced interest costs while solvency has strongly increased
Financial structure 16 Reduced interest costs while solvency has strongly increased >> Development of debt metrics over the last 24 months: Average duration ICR LTV Average interest rate 60 6 50 5 40 4 30 3 20 2 10 1 0 0 30.06.2017 30.09.2017 31.12.2017 31.03.2018 30.06.2018 30.09.2018 31.12.2018 31
Slide 17: Financials 9M 2018/2019
17 Financials 9M 2018/2019 9M 2018/2019 Results | Deutsche Konsum REIT-AG 17
Slide 18: Condensed IFRS balance sheet
Financials 9M 2018/2019 18 Condensed IFRS balance sheet kEUR 30.06.2019 30.09.2018 kEUR 30.06.2019 30.09.2018 Assets Equity and liabilities Pro forma portfolio Increased equity currently mEUR 625 Investment properties 546,821.0 418,707.3 Subscribed capital 29,959.9 27,236.3 due to 10% Capital (inclu
Slide 19: LTV and EPRA NAV
Financials 9M 2018/2019 19 LTV and EPRA NAV >> LTV (loan-to-value): >> EPRA NAV: kEUR 30.06.2019 30.09.2018 kEUR 30.06.2019 30.09.2018 Bank loans 181,822.3 155,223.0 Total equity 283,728.6 209,762.4 Convertible bonds 36,125.8 36,098.9 Conversion of convertible bonds 0.0 0.0 Corporate bond 90,226.5 4
Slide 20: Condensed IFRS income statement
Financials 9M 2018/2019 20 Condensed IFRS income statement 01.10.2018 – 01.10.2017 – kEUR % 30.06.2019 30.06.2018 Rental income 30,136.0 20,914.4 44.1 Rental income has mainly increased in the course of the property portfolio growth Income from recharched operating costs1 4,289.3 1,788.6 >100.0 Oper
Slide 21: FFO reconciliation
Financials 9M 2018/2019 21 FFO reconciliation >> FFO/aFFO: 01.10.2018 – 01.10.2017 – kEUR % 30.06.2019 30.06.2018 Total period income 50,193.1 25,425.5 97.4 +/- Income taxes 0.0 10.5 >-100.0 Contains non-cash items due to IFRS revaluation + Depreciation of other assets 0.8 0.7 23.2 of convertible bo
Slide 22: DKR shares
22 DKR shares 9M 2018/2019 Results | Deutsche Konsum REIT-AG 22
Slide 23: DKR share performance reflects the scalability of the business model
DKR shares 23 DKR share performance reflects the scalability of the business model >> DKR shares: 12.08.2019 ISIN DE000A14KRD3 WKN A14KRD3 Symbol DKG Number of shares 29,959,944 Nominal capital 29,959 (kEUR) Share class Bearer shares Stock exchanges XETRA, Frankfurt, Berlin Segment Prime Standard In
Slide 24: Analyst research
DKR shares 24 Analyst research >> Analyst coverage: Publication date Bank Analyst Recommendation Price target 13 August 2019 Kai Klose „Buy“ EUR 18.90 9 August 2019 Dr. Georg Kanders „Buy“ EUR 18.50 21 February 2019 Thomas Effler „Buy“ EUR 12.80 9M 2018/2019 Results | Deutsche Konsum REIT-AG
Slide 25: Stable shareholder structure
DKR shares 25 Stable shareholder structure >> DKR share developments in 9M 2018/2019: >> Current shareholder structure (30 June 2019) : Carmignac Gestion Midgard Beteiligungsgesellschaft mbH/ EFa Vermögensverwaltungs KG 0.43 Parson GmbH 0.75 ➢ Successful 10% share capital increase closed on 22 Nov 2
Slide 26: Guidance
26 Guidance 9M 2018/2019 Results | Deutsche Konsum REIT-AG 26
Slide 27: Outlook and guidance
Outlook and guidance 27 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 pe
Slide 28: Financial calendar
28 Financial calendar 9M 2018/2019 Results | Deutsche Konsum REIT-AG 28
Slide 29: DKRs next financial events
Financial calendar 29 DKRs next financial events >> Financial calendar: >> Upcoming events: Date Date Country 02.09.2019 Roadshow, Helsinki Publication of the quarterly statement for the third quarter of 14.08.2019 2018/2019 financial year 04.09.2019 Roadshow, London 10.09.2019 Roadshow, Brussels Pu
Slide 30: Appendix
30 Appendix 9M 2018/2019 Results | Deutsche Konsum REIT-AG 30
Slide 31: DKR at a glance
DKR at a glance 31 Investment Highlights >> Growing BASIC RETAIL investor – biggest niche player in Germany: Retail property portfolio in Defensive and solvent tenant mix Stock exchange listed investor Solid and efficient funding established micro locations • 121 retail properties • Food-anchored an
Slide 32: Investment approach
Business Model & Strategy 32 Investment approach >> Growing BASIC RETAIL investor – biggest niche player in Germany: WALT 5 Yield 10 Highly fragmented niche to be Accepting short WALTs High-speed acquisition process Value enhancing asset consolidated management • Niche of properties in a range • We
Slide 33: Bundling single properties into an institutional asset class
Business Model & Strategy 33 Bundling single properties into an institutional asset class Owner B Owner C Owner A Owner E Owner F Owner D Owner: Deutsche Konsum REIT ➢ Strong and effective risk diversification of single properties by bundling them into a portfolio ➢ Synergies and stronger position t
Slide 34: Basic retail sector remains stable with best outlook
Business Model & Strategy 34 Basic retail sector remains stable with best outlook >> Main statistical data according to latest sector analysis 20171: 124m 4.2 % sqm Growth of the stationery retail Total retail in 2017 lease area in Germany • Strong German economy and increasing • Market share of DKR
Slide 35: Basic retail threatened less by E-Commerce (1)
Business Model & Strategy 35 Basic retail threatened less by E-Commerce (1) >> Market research according to 13. Retail Real Estate Report Germany 2018/2018 by bulwiengesa / Hahn1: fig. 3 fig. 4 Results of the statistical data: • Food sector and other goods of daily needs (basic retail) are hardly im
Slide 36: Basic retail threatened less by E-Commerce (2)
Business Model & Strategy 36 Basic retail threatened less by E-Commerce (2) >> Market research according to 13. Retail Real Estate Report Germany 2018/2018 by bulwiengesa / Hahn1: fig. 1 fig. 2 Results of the statistical data: • Yearly growth rate of general E-Commerce swings around 10% and grows es
Slide 37: Basic retail threatened less by E-Commerce (3)
Business Model & Strategy 37 Basic retail threatened less by E-Commerce (3) >> Biggest grocery delivery services compared to DKR property portfolio: • DKR portfolio with low overlapping with regions serviced by fresh food deliverers • In 2017 E-Commerce in the grocery business remained at a very sli
Slide 38: Sourcing process for retail properties
Acquisition process 38 Sourcing process for retail properties Private owners Funds in liquidation Remaining due to age properties of of investors portfolio transactions Deep asset Public auctions analysis before acquisition Tenants DKR network Brokers • Investment team analyses a yearly property vol
Slide 39: Experienced and committed management
Management 39 Experienced and committed management Alexander Kroth (CIO) Rolf Elgeti (CEO) Christian Hellmuth (CFO) Alexander joined DKR in January 2017 and initially Rolf has been the founder of Deutsche Konsum REIT-AG, which is Christian joined DKR in January 2017 and is set up the company togethe
Slide 40: Strong external property partners
Partners 40 Strong external property partners >> DKRs main external management partners: Asset Manager Elgeti Brothers GmbH Property Manager Appraiser Technical Property Developer IT and Management Software Providers 9M 2018/2019 Results | Deutsche Konsum REIT-AG
Slide 41: Value add by extensive property redevelopments
Revitalisiation 41 Value add by extensive property redevelopments >> Current major revitalisation projects: Location Domcenter Kirschbergcenter Kolumbuspassage Lindencenter Greifswald Hohenmölsen Rostock Stralsund Space (sqm) 9,410 7,797 4,492 5,775 Vacancy at start ~ 37% ~ 38% ~ 12% ~ 27% Project d
Slide 42: DKRs detailed property portfolio
Portfolio overview 42 DKRs detailed property portfolio Please find DKR‘s current portfolio in a detailed overview online under the following link: DKR property portfolio overview as at 30 June 2019 9M 2018/2019 Results | Deutsche Konsum REIT-AG
Slide 43: Glossary
Glossary 43 >> 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
Slide 44: IR contact
IR contact 44 Please get in touch >> IR contact: Stefanie Frey August-Bebel-Str. 68 14482 Potsdam sf@deutsche-konsum.de + 49 (0331) 740 076 533 9M 2018/2019 Results | Deutsche Konsum REIT-AG
Slide 45: Disclaimer
Disclaimer 45 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 co
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