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Ladies and gentlemen, thank you for standing by. I am Yasmin, your Chorus Call operator. Welcome and thank you for joining the Q1 quarterly statement as at 31 March 2019. [Operator Instructions].I would now like to turn the conference over to Mr. Wilhelm Wellner. Please go ahead.
Ladies and gentlemen, good morning from the team of Deutsche EuroShop. This is Wilhelm Wellner speaking, and today I would like to present you our results for the first 3 months of financial year 2019. I'm in this call together with my colleague, Olaf Borkers; and Patrick Kiss, our Head of IR.Introduction. I would like to start with operation at the retail turnover of our tenants and the split-up by segments starting on Slide 2. The retailers in our centers started with relatively mixed picture into the year 2019. As we had some special effects in Q1 2019, it is difficult to compare the turnover with our retailers with Q1 2018. The most important effect here was Easter and the corresponding Easter sales. These were rather late in the second half of April. That year, Easter and the Holy Saturday, one of the most frequented days in the stationary retail, fell on 31st of March and therefore was included in the Q1 numbers. It seems that we have to wait for the first half year results to have a proper comparability. Other effects were restructuring measures, but we also had in Pécs and Magdeburg and especially in Poland the step-by-step reduction of Sunday openings, which became legally mandatory and which started in March 2018. But let's start with the overall picture. We've seen a minus of 1.6% of the absolute turnover, tenant -- retail turnover of our tenants, and this decreased abroad by 1.8% and in Germany by 1.6%. On a like-for-like basis, our retailers saw a minus of 2.5% abroad and a 1.2% in Germany in Q1. That's in total a minus of 1.5% on a like-for-like basis. Here it is still worth mentioning that in Gdansk, on the opening of a major competitor, the Forum Gdansk, by end of May 2018 showed still its impact. This has led to shifts in turnover and footfall. But this, however, as we mentioned before, should normalize over time. Looking at the segments, there has been a visible spread between the performances of the various segments. In our German centers and on a like-for-like basis, department stores saw a minus of 5.6%; general retail, minus 5.5%. This includes bookstores, toys, household goods and jewelry. Service, minus 5.5%; and food, minus 3.3%. These were the weaker segments. On the other hand, shoes and leather saw a strong plus 5.7% and electronics a nice 2 -- plus 2.2%. Also, food catering was plus 0.6% and sports was plus 0.5% developed positively in the first quarter compared to Q1 2018. Fashion, which accounts for approximately 40% of our space and 30% of our turnover, came in with a slight minus of 0.3% with the numbers [ already in ] the sales region of now 10% -- to 9.5% up from 9.3% at year-end 2018. Customer footfall decreased also slightly in the first 3 months. We saw a minus of 1.8% for Germany and for our international centers compared to Q1 2018. And the main reason here, again, was the fact that Easter sales only took place in the second half of April, and so the turnover numbers for our retailers, we have to wait here for the full half year results to better compare those numbers. Let's now continue with the financials and start on Page 3 with revenues. The numbers after the first 3 months of this year look as expected, and a continued demand in stationary retail and leasing environment, revenues increased slightly by 0.3% on a year-on-year basis. You can see also that on the slide that the share of the revenues for our German centers and the properties abroad was almost unchanged. On the next page, we show you the development of our EBIT. The EBIT increased to EUR 49.3 million, which corresponds to a plus of 0.6% due to slightly lower operating and administration costs for the properties. The cost ratio now stands at 10%. It is well within our budgeted range. And the center operational cost comprised mainly of center management fees, non-allocatable ancillary costs, maintenance and write-downs on rent receivables. On Page 5, you can see the development of our financial results. This improved by EUR 2.5 million from minus EUR 9.5 million to now 7 -- minus EUR 7 million. Two major effects are responsible for this improvement. On the one hand, and on a continuous basis, the interest expenses decreased due to regular loan repayment and a favorable refinancing of our Altmarkt-Galerie in Dresden, which kicked in, in the end of Q4 2018. On the other hand, and as a one-off, other financial income grew substantially. This comes from an expected interest income in relation to now expected trade tax refund for previous financial year. The background to this is the announcement of a ruling made by the Grand Senate of the German Federal Fiscal Court, the BFH, at the end of March regarding the applicability of the so-called extended trade tax deduction, a very special feature of the German tax system. For the native German speakers on the call, that feature is called the [Foreign Language]. Without going into too many complex tax details, the announcement of this ruling of the Grand Senate of the BFH is very positive for Deutsche EuroShop because it allows now most of the income of Deutsche EuroShop to be tax exempt from trade tax. This trade tax exemption had been denied since 2010 by an earlier ruling of Lower Chamber of BFH. But Deutsche EuroShop has already successfully changed its tax structure soon after 2010 to avoid a major part of the trade tax going forward. It is a decision concerning our appeals against corresponding tax -- trade tax billed for the periods prior to 2010 were still pending. On the basis of the latest ruling, we assume that our appeals will now be granted. In case of interest, and for further information on this topic, please see also the information made available on Page 188 of our Annual Report 2018, which we just had published on April 29. After this short excursion into the German tax system, I would like to explain you the overall change of the financial result of EUR 2.5 million, again, by following the bridge and starting from left part, left side. You see realized interest cost savings for the portfolio of EUR 800,000. The operational and equity profit was unchanged. Stocks contributed minus EUR 0.7 million. And, as just mentioned, EUR 2.6 million came from that one-off interest income. Minority profit share remained almost unchanged on the prior year level. This leads us to the EBT adjusted for the valuation results, and you'll find that on Page 6. That result rose from 39.2 -- sorry, EUR 39.5 million to EUR 42.3 million, which is a nice plus of 7.2%. Here again, the major effect came from the one-off interest income resulting from the expected tax refund, which contributed, as just mentioned, EUR 2.6 million. Interest savings accounted for EUR 800,000, and the rest came, that is EUR 100,000, from standing assets. Looking at the EPRA earnings on Page 7, that means the following. So the operating profit, excluding valuation, increased from EUR 36.9 million to EUR 47.6 million, again due to the expected trade tax reimbursement itself of EUR 7.1 million and for the other reasons just mentioned before. EPRA earnings per share, therefore, increased from EUR 0.60 to EUR 0.77. Excluding the nonrecurring effect from the tax reimbursement, our EPRA earnings would have risen from EUR 36.9 million to EUR 37.9 million. That's plus of 2.9% on a per share basis, a plus EUR 0.01 to now EUR 0.61. Now I'd like to turn to the consolidated profit of the group on the next page. And here you see that it has increased by EUR 9 million and now stands at EUR 39.4 million. Again here you see the same effects. A one-off trade reimbursement -- trade tax reimbursement, including a corresponding interest income. This amounts to plus EUR 9.7 million. And the profit of the other standing assets improved the result by a further EUR 1 million. Valuation results are -- particularly accounted for minus EUR 1 million of the change, while other changes resulting from non-efficient interest swaps and deferred taxes were very limited. So earnings per share increased from EUR 0.49 to EUR 0.64. And excluding the one-off items, EPS would have decreased from -- by EUR 0.01 to EUR 0.48. This is due to higher CapEx. On Page 9, we have outlined the development of the FFO. For the first 3 months, the FFO, which excludes the valuation results and the one-off tax items, rose from EUR 37.8 million to now 80 -- EUR 38.4 million or, on a per share basis, from EUR 0.61 to EUR 0.62. You can find the detailed FFO calculation on the right side of this slide. So coming now from the P&L to our balance sheet on Page 10. Our total assets were slightly higher, and they now stand at EUR 4.66 billion. That's a plus of EUR 48.3 million compared to the last reporting date end of the year. And the main effect here comes from the increase of the liquidity by some EUR 40 million. As at end of March 2019, current and noncurrent financial liabilities stood at EUR 1.5 billion, which was EUR 1.6 million lower (sic) [ higher ] than at the end of 2018, and this followed schedule of repayments. Noncurrent deferred tax liabilities increased by EUR 5.7 million to now EUR 458 million, and this mainly results from regular tax depreciation. Other current and noncurrent liabilities and provisions also remained rather unchanged. So total equity, including minorities, increased by EUR 39.4 million. As you can see, our equity ratio remains at a strong 56.1%, and the consolidated LTV now stands at 30.9%. On a look-through basis, that's the LTV calculated on a fully proportionally basis. According to our group share, the LTV now stands at 33%, also a very reasonable level. On the next 2 pages, that is 11 and 12, we get you some information on our debt. Of our consolidated debt, some EUR 760 million mature in the next 4 years. We still see, as in the past, potential for some reductions in our interest costs over the next years. Currently, our consolidated debt bears an average interest rate of 2.51%. The average interest rate already came down significantly in the last years. And given the actual interest rate environment and quotations from banks, we could refinance our debt around 1.5% for 10 years in Germany. Our weighted maturity of our loan portfolio now stands at 5.9 years. And on the right side of Page 12, you will see some details for loans which we have already extended. As an example, we just have a fixed loan of close to EUR 140 million at 1.68% interest rate for 10 years for our center close to Berlin, the A10 Center, and another loan of EUR 59 million at 1.09% for 9 years for the Saarpark-Center. So after the detailed financial information, let's now come to the guidance for 2019, which we slightly updated with the publication of our Annual Report 2018 end of April. In the annual report, we also added our expectations for 2020, and you'll find all such information on Slide 13. We expect that the revenues remain stable within a range of EUR 222 million to EUR 226 million in this year and next year. And correspondingly, we're also forecasting the EBIT between EUR 194 million and EUR 198 million for both years. For 2019, we raised our forecast for EBT, excluding valuation, slightly to a range of EUR 159 million to EUR 162 million. The previous forecast was EUR 158 million to EUR 161 million, and this is due to the expected additional interest income in connection with the expected tax refund, as explained before. For 2020, EBT excluding valuation is expected to come in between EUR 161 million and EUR 164 million. And last but not least, for the FFO, our forecast is EUR 2.40 to EUR 2.44 per share for this year; and for next year, EUR 2.43 to EUR 2.47. So all those numbers. Now the lookout on Page 14. Looking at the operations, we continue to roll out our Mall Beautification and At Your Service programs just as we have done over last quarters already. Currently, the main activities are taking place in the Altmarkt-Galerie in Dresden, the Billstedt-Center in Hamburg and the Rhein-Neckar-Zentrum in Viernheim as well as the Herold-Center in Norderstedt. Additionally, we'll plan to start the programs in 3 more centers this year, namely the ones in Hamm, Dessau and Neunkirchen. While in general we made good progress with such programs, we had, as explained earlier already, hoped to be a bit quicker. Nevertheless, we are in good track when the first qualitative service show that our center in Magdeburg is well received by our customers and the shoppers, and they liked the new service and the atmosphere improvements very much. On the financing side, we are currently working on refinancing of the total amount of EUR 262 million maturing 2020 and 2022 and expect to sign here in the next 12 months or 15 months prolongations on new loans with banks. As before, the banking market is currently still positive, and we are confident to agree on attractive terms with the banks. Finally, we look forward to further increases in the dividend, that is to EUR 1.55 for financial year 2019 and to EUR 1.60 for the financial year 2020. Last but not least, and after all those numbers, you're currently invited to join us for the sixth edition of our Real Estate Summer on the 5th and 6th of September this year. We would like you -- like to show you our refreshed Rhein-Neckar-Zentrum close to Viernheim, where we will have accomplished the At Your Service and Mall Beautification programs by then. Additionally, we will walk with you through the Forum in Wetzlar and the Main-Taunus-Zentrum. And of course, we'll provide you with some nice and informative, supportive program with interesting speakers and presentations. One topic will be the digital mall, our step forward to combine the on and off-line world of shopping. Thank you so far for listening, and I'm now happy to take your questions. Operator, please go ahead.
[Operator Instructions] The first question comes from the line of Kai Klose of Berenberg.
I've got a question regarding the letting activities in the first quarter. Could you indicate either how many contracts or how many rents in your million is contracted rental volume that were extended in -- within the first quarter? And what was the revision, up or down? And what was the change in the lease duration compared to the prior lease maturities? And the second question would be on Page 14. How much was spent in the first quarter for the rollout investment program in your malls which you have described there?
Yes. First of all, the re-letting for 2019, we have some expectations of re-leasings of, I think, 6% to 7%. However, sometimes -- and these are the numbers by the contracts. But sometimes, you speak earlier to, let's say, to tenants or they speak to you earlier even if the rent only comes up or a contract comes up next year. And on the other hand, there are other instances like, for example, [ Car Diva ] where we're still waiting that they set up their mind. So on the exact terms, I mean -- and on a day-by-day basis, we do not count the contracts, but it's roughly 6% to 7% that we will re-lease. And again, as -- also, we have mentioned before there are some areas where we had some good numbers, improved numbers. That's always when we go to health and beauty where we see good re-leasing results. On the other hand, when we talk to the weaker part, that is fashion and shoes where we also have elaborated on we also see sometimes lower rents. So on average, as we have not any new addition to the portfolio, a 0.3% like-for-like growth is a fair view on average. But there's a range, of course, between the segments. [indiscernible].
I'm sorry, to be precise, the 6% to 7%, what was this number? You -- this was your target or assumption for the full year '19 or for the first quarter? I was -- for the quarter?
For the full year. For the full year, full year.
Like what is...
And now I'm not in a place to give you the exact number and a percent. However, sometimes, as I mentioned before, you start already much earlier than waiting for exactly, let's say, the leasing contract which matures in that month, yes?
And what was the amount in either square meter or annualized rental volume in Q1?
Yes. That's in percentage. I mean, if you would then elaborate on 220 -- the mid-range income is EUR 224 million. So if you take 6% to 7% and then divide that property to 4 quarters, then you probably have the number.
You don't have the exact number for Q1 now?
No. But we could give it to you afterwards, yes? And the amount that we spent, you'll see that in the valuation result. That is including the -- and equities which you do not see on the group balance sheet, but which are, of course, included in the equities. This is only EUR 2.5 million. We expect this number to increase in the second quarter when all, as I mentioned before, the activities for the other centers start and more CapEx is being spent in shorter time. But the number for the first quarter is EUR 2.5 million.
[Operator Instructions] There are no further questions at this time.
So if there are no further questions, we thank you very much for listening and attending the call. Ms. Alano?
Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.