Deutsche EuroShop AG — Call Transcript 2015

Mar 19, 2015

CONFERENCE CALL

FY2014 Preliminary Results 19 March 2015

FY 2014

RETAILERS

Retail turnover 2014*

Retail sector	% change in 2014	rent-to-sales ratio in %	% of sales	% of space
Department stores	-2.6	5.8	7.6	13.1
Food	-0.7	7.3	9.1	6.2
Fashion textiles	-1.5	12.0	29.5	39.1
Shoes & leather goods	-0.2	14.0	5.5	6.4
Sports	0.2	8.7	4.0	4.6
Health & Beauty	2.4	7.2	11.6	6.1
General Retail	-1.2	10.0	11.8	11.1
Electronics	-1.2	3.0	11.9	7.7
Services	2.9	4.5	4.7	1.6
Food catering	-1.0	13.2	4.3	4.1
Total	-0.7	8.9	100.0	100.0

* German centers on a like-for-like basis (turnover: €2.0 billion)

• retail turnover development abroad on a like-for-like basis: -0.4% DES-Portfolio overall: -0.6%
• absolute turnover development: Germany +0.3%, Abroad +0.2% DES-Portfolio overall: +0.3%

SHOPPING CENTERS

Tenants Structure Top 10 Tenants*

	2014	2013
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%	25.6%

Low level of dependence on the top 10 tenants

* in % of total rents as at 31 Dec. 2014

Target – Performance Comparison FINANCIALS 1) excl. capital gain REVENUE €m EBIT €m EBT BEFORE VALUATION1) €m 200.8 Target Actual 177.5 Target Actual 125.0 Target Actual 198-201 174-177 120-123 Equity method Equity method

63.9 86.6 95.1 113.4 125.0 2010 2011 2012 2013 2014

Balance Sheet

in € thousand	31.12.2014	31.12.2013	Change
Non-current assets	3,420,212	3,339,165	81,047
Current assets	71,946	55,698	16,248
Total assets	3,492,158	3,394,863	97,295
Group equity	1,524,342	1,428,949	95,393
Non controlling interest	226,849	213,422	13,427
Total equity	1,751,191	1,642,371	108,820
Financial liabilities	1,430,085	1,486,759	-56,674
Deferred tax liabilities	227,455	198,491	28,964
Other liabilities	83,427	67,242	16,185
Total equity and liabilities	3,492,158	3,394,863	97,295
	31.12.2014	31.12.2013
Equity ratio*	50.1%	48.4%
LTV ratio	40%	43%

^* incl. non controlling interests

Valuation – Investment Properties 2014

FINANCIALS

in € thousand	2014	2013	Change
Revaluation	88,302	60,538	+27,764
Acquisition expenses	0	-64	+64
Minority interest	-11,316	-4,492	-6,824
Valuation result before taxes	76,986	55,982	+21,004
Deferred taxes	-14,924	-10,186	-4,738
Valuation result after taxes (attributable to Group shareholders)	62,062	45,796	+16,266

like-for-like measurement gains: +3.0%

Sensitivity analysis

in € thousand	Basis	change of -25bps	change of +25bps
Rent increase rates	1.70%	-117,500	+123,000
Discount rate	6.44%	+107,700	-102,600
Net initial yield	5.87%	+157,300	-144,400
Cost ratio	11.00%	+10,300	-10,300

* External appraisers: Feri Research and GfK GeoMarketing

Net Asset Value (EPRA)

in € thousand	2014		2013		Change*
	total	per share	total	per share
Equity	1,524,342	€28.26	1,428,949	€26.49	6.7%
deferred taxes	227,455	€4.22	198,491	€3.68	14.6%
Fair value of Swaps	48,194	€0.89	30,760	€0.57
deferred taxes	-10,602	€-0.20	-7,762	€-0.14
NAV EPRA	1,789,389	€33.17	1,650,438	€30.59	8.4%
Number of shares	53,945,536		53,945,536		0%

	Change*
ıre
49	6.7%
68	14.6%
57
14
59	8.4%
	0%

* of total amount

NAV PER SHARE

Loan Structure incl. Convertible Bonds*

Interest lockin	Duration	Principle amounts (€ thousand)	Share of total loan	avg. interest rate
Up to 1 year		54.1	4%	1.49%
1 to 5 years	3.7	435.1	31%	4.14%
5 to 10 years	7.3	790.9	55%	3.59%
Over 10 years	12.3	147.7	10%	4.05%
Total 2014	6.6	1,427.8	100%	3.76%

• Weighted maturity of fixed interest periods 6.6 years
• Weighted maturity of the loans >10 years

Maturities until 2019*

in € thousand	end of fixed interest periods respectively expiring loans	avg. interest rate	regular redemption payments	total maturities
2015	35,500	1.49%	18,600	54,100
2016	77,300	4.92%	18,400	95,700
2017	95,300	1.75%	16,500	111,800
2018	71,200	4.60%	18,700	89,900
2019	119,300	4.78%	18,500	137,800

398,600

• as of 31 Dec. 2014

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Profit and Loss Account
in € thousand	01.01 – 31.12.2014	01.01 – 31.12.2013	Change
Revenue	200,785	187,987	7%
Property operating and management costs	-18,984	-17,775
Net operating income	181,801	170,212	7%
Other operating income	1,889	2,837
Corporate costs	-6,184	-7,285
EBIT	177,506	165,764	7%
Income from investments	1	16,688
Interest rate swap expenses	-610	-4,550
Interest income	348	448
Interest expense	-58,570	-57,827
At equity result	35,129	27,024
Profit/loss attributable to limited partners	-16,117	-15,939
Net finance costs	-39,819	-34,133	17%
Measurement gains/losses	76,986	55,982
EBT	214,673	187,613	14%
Taxes	-37,247	-16,570
Consolidated profit	177,426	171,043	4%

Earnings per Share (EPRA)

in € thousand	2014	per share*	2013	per share*
Consolidated net profit	177,426	€3.29	171,043	€3.17
- IAS 40 valuation	-76,986	€-1.43	-55,982	€-1.03
- At-equity valuation	-12,688	€-0.24	-2,410	€-0.04
+ Deferred taxes	18,588	€0.34	10,975	€0.20
+ Tax expense for previous years	-7,174	€-0.13	-14,556	€-0.27
+ Capital gain	0	€0.00	-15,799	€-0.29
EPRA Earnings	99,165	€1.84	93,271	€1.74
Number of shares (adj.)	53,945,536		53,945,536

* The sum of the earnings per share amounts may not equal the totals due to rounding

€

Funds from Operations (FFO)

in € thousand	2014	per share1)	2013	per share1)
Consolidated net profit	177,426	€3.29	171,043	€3.17
- IAS 40 valuation	-76,986	€-1.43	-55,982	€-1.04
- At-equity valuation	-12,688	€-0.24	-2,410	€-0.04
+ Costs conversion privilege	967	€0.02	940	€0.02
+ Deferred taxes	31,805	€0.59	14,208	€0.26
- Capital gain	0	€0.00	-15,799	€-0,29
FFO	120,524	€2.23	112,000	€2.08
Number of shares (adj.)	53,945,536		53,945,536

2013	per share 1)
171,043	$\epsilon$ 3.17
-55,982	€-1.04
$-2,410$	€-0.04
940	€0.02
14,208	€0.26
$-15,799$	€-0,29
112,000	€2.08
53,945,536

1) The sum of the earnings per share amounts may not equal the totals due to rounding 2) Compound Annual Growth Rate (CAGR)

19

1.35 1.61 1.68 2.08 2.23 2010 2011 2012 2013 2014 +13.4%2)

COMPANY

Outlook

• Investments of €26.1 million for CAPEX in 2015
• Refinancings of €61.6 million in 2015
• New acquisitions?

• Increase in dividend to €1.35

• 1) Equity method

• 2) Compound Annual Growth Rate (CAGR) 2010-2016
• 3) incl. dilution

21

4) excl. capital gain

22

Rank Datenreihen1 Turnover Datenreihen2 Rank Market Cap

PERFORMANCE4)

		DES	DAX	EPRA5)	REX6)	OEF8)
1 year	(2014)	+17.7%	+2.7%	+26.5%	+7.1%	+1.6%
3 years	+64.2% =	+18.0% p.a.	+18.3% p.a.	+21.6% p.a.	+3.7% p.a.	+1.7% p.a.
5 years	+87.0% =	+13.3% p.a.	+10.4% p.a.	+14.1% p.a.	+4.7% p.a.	+1.9% p.a.
Since IPO (2001)	+236.2%=	+9.0% p.a.	+3.0% p.a.	+8.1% p.a.	+5.0% p.a.	n.a.

• 1) respectively paid for the previous FY
• 2) 2015: as of 17 March 2015
• 3) paid on 19 June 2014
• 4) as of 31 Dec. 2014
• 5) EPRA/NAREIT Europe
• 6) German government bonds index
• 7) proposal

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8) Open ended real estate funds

24

Key Data of the Share

APPENDIX

Listed since	02.01.2001
Nominal capital	€53,945,536.00
Outstanding shares	53,945,536
Class of shares	Registered shares
Dividend 2014 (proposal)	€1.30
52W High	€46.21
52W Low	€31.12
Share price (17 March 2015)	€45.30
Market capitalisation	€2.44 billion
avg. turnover per day last 12 months (XETRA)	123,300 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

Financial Calendar

18.03.	Preliminary Results FY 2014
26.03.	Bank of America Merrill Lynch European Real Estate Conference, London
30.03.	Roadshow Brussels, DZ Bank
30.03.	Roadshow Frankfurt, Bankhaus Metzler
31.03.	Roadshow Zurich, M.M. Warburg
31.03.	Roadshow Paris., Societe Gernerale
17.04.	Bankhaus Lampe Deutschland Conference, Baden-Baden
28.05.	Roadshow Milan, Lugano, Berenberg
29.04.	Publication of the Annual Report 2014
12.05.	Interim report Q1 2015
19.05.	Berenberg European Conference USA, New York
20.-21.05.	Commerzbank German Mid Cap Investor Conference, Boston & New York
29.05.	Societe Generale Nice Conference, Nice

09.06.	Roadshow Warsaw, Dom Inwestycyjny Investors
18.06.	Annual General Meeting, Hamburg
19.06.	Deutsche Bank dbAccess GSAC, Berlin
09.-10.07.	Roadshow Vienna & Linz, Berenberg
13.08.	Interim report H1 2015
20.-21.08	Deutsche EuroShop Real Estate Summer, Gdansk
21.09.	Goldman Sachs & Berenberg German Conference, Munich
01.10.	Societe Generale Real Estate Conference, London
02.10.	Roadshow Edinburgh, M.M. Warburg
12.11.	Nine-month report 2015
16.11.	DZ Bank Equity Conference, Frankfurt
16.11.	Roadshow Paris, Baader Bank
17.11.	Roadshow Zurich, Kepler Cheuvreux

APPENDIX

Contact

Deutsche EuroShop AG Investor & Public Relations Heegbarg 36 22587 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

Important Notice: Forward-Looking Statements

Statements in this presentation relating to future status or circumstances, including statements regarding management's 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.

Claus-Matthias Böge Chief Executive Officer

Olaf Borkers Chief Financial Officer

Wilhelm Wellner Chief Operating Officer

Patrick Kiss

Manager Investor & Public Relations

Head of Investor & Public Relations