DEFAMA Deutsche Fachmarkt AG

Equities

DEF

DE000A13SUL5

Real Estate Development & Operations

Market Closed - Xetra Other stock markets 11:36:18 2024-05-24 EDT			Pre-market 01:32:01
25 ^EUR	-0.79%		24.9	-0.40%

2023	DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the Nine Months Ended September 30, 2023	CI
2023	DEFAMA Deutsche Fachmarkt AG acquired Einkaufszentrum Reutter Zell from GRR Real Estate Management GmbH.	CI

DEFAMA Deutsche Fachmarkt : “Growth well on track after a good start to 2021 and a new acquisition”

June 03, 2021 at 06:49 am

DEFAMA Deutsche Fachmarkt AG

(General Standard, Real Estate, DEF GR)

RESEARCH

Buy

Value Indicators:

EUR

Warburg ESG Risk Score:

2.3

Description:

ESG Score (MSCI based):

3.0

NAV (WRe) 23e:

24.25

Commercial real estate company

Balance Sheet Score:

3.8

focused on retail parks in Northern

EUR 24.60

FFO-Yield 23e:

24.80

(EUR 24.00)

Market Liquidity Score:

0.0

and Eastern Germany

Market Snapshot:

EUR m

Shareholders:

Key Figures (WRe):

2020e

Price	EUR 21.60	Market cap:	95.47	Freefloat	65.0 %	LTV:	60.2 %
No. of shares (m):	4.42	MSC Invest GmbH	29.0 %	Equity Ratio:	18.4 %

Upside	13.9 %	Freefloat MC:	62.06	Geminus GmbH	4.0 %
		Ø Trad. Vol. (30d):	26.57 th	Supervisory board	2.0 %

Growth well on track after a good start to 2021 and a new acquisition

Stated Figures Q1/2021:				Comment on Figures:
						 Sound growth rates as shown in DEFAMA's recently published Q1
	in EUR m	Q1/21	Q1/21e	Q1/20	+/- in %
	support our positive view of the growth prospects in 2021 and beyond.

	Revenues	4,05	4,32	3,13	30%	 Impressive EBITDA and EBT growth rates of 29% and 21% respectively
	EBITDA	2,56	2,47	1,98	29%	reflect strong portfolio growth in 2020 and already include a minor
	EBIT	1,57	1,48	1,27	24%	burden from the pandemic (WRe: EUR 100k). The collection ratio stood
	EBT	0,95	0,94	0,78	21%	at a solid 92%, showing the resilience of DEFAMA's business model.
	Net profit	0,70	0,71	0,59	18%	 Financial ratios remain solid with an LTV of 59% and eligible liquidity
	EPS (€)	0,16	0,16	0,13	19%	(incl. credit lines) of EUR ~8m. NAV improved 16% in the last 12 months
	FFO	1,69	1,67	1,31	29%	to EUR 17.09.
	FFO-margin	42%	39%	42%
		 Management confirmed its guidance for 2021 with an FFO of EUR 7.3m
	FFOPS (€)	0,38	0,38	0,30	29%
	and a net profit of EUR 3.1m excl. the successful and attractive disposal
	LTV (%)	60,2%	60,5%	60,5%
		of the retail park in Bleicherode for a multiple of 14.7. We estimate an
	NAV/share (€)	17,09	17,02	14,78	16%
	adjusted net profit of EUR 3.05m.

In 2021 so far, DEFAMA has acquired two properties with an investment volume of EUR 12m. The purchase price of the recent acquisition in Barsinghausen (near Hannover) was EUR 3.6m for an annual net rent contribution of ~EUR 340k. The paid multiple of 10.6 is in line with DEFAMA's target multiples of around ~10. Core tenants are Netto and Dänisches Bettenlager and several smaller tenants retailing goods and services for daily needs. DEFAMA's annualised rent improved to EUR 15.3m and annualised FFO stands at EUR 7.5m (~FFOPS EUR 1.70). Therefore, DEFAMA is well on track to achieve its FY target for annualised FFO of EUR 8m at the end of 2021. The acquisition volume should again be at the upper end of DEFAMA's annual target range (EUR 15-20m) despite a selective investment approach.
We increase our price target to EUR 24.60 which is now based on 2023 estimates. FFO yield on annualised FFO of nearly 8% remains attractive.

	Changes in Estimates:										Comment on Changes:
				+ / -		2022e		+ / -  Decrease in top-line estimates due to expectation of lower ancillary costs
	FY End: 31.12.		2021e
	in EUR m		(old)						(old)				paid by tenants as the ratio of rental income to total revenues should
														increase slightly.
	FFO I		7.39		-2.1 %		8.56	-2.0 %

					 The modest reduction in our FFO estimate is driven by the disposal of
	FFOPS I		1.67		-2.1 %		1.94	-2.0 %
	Net income		5.51		-6.4 %		3.67	-3.0 %		Bleicherode (annual FFO-impact of EUR ~160k).
					 Net income adjustment is affected by higher estimated taxes.
	EPS		1.25		-6.4 %		0.83	-3.0 %



							FY End: 31.12.			CAGR
							in EUR m			(20-23e)		2017	2018	2019	2020	2021e	2022e	2023e

							Rental income					5.10	7.61	9.53	12.19	14.93	16.89	18.95

							Change yoy				67.9 %	49.2 %	25.1 %	27.9 %	22.5 %	13.2 %	12.2 %
							EBIT					2.67	3.59	4.50	5.62	9.21	7.60	8.53
							FFO I					2.58	3.65	4.62	5.87	7.23	8.38	9.45
							FFO I-margin				50.6 %	47.9 %	48.4 %	48.2 %	48.5 %	49.6 %	49.9 %
							EBT					1.77	2.25	2.78	3.49	6.67	4.79	5.42
							Net income					1.36	1.68	2.06	2.51	5.15	3.56	4.03

							EPS					0.38	0.46	0.51	0.57	1.17	0.80	0.91

							FFOPS I					0.73	1.01	1.14	1.33	1.64	1.90	2.14
							DPS					0.34	0.40	0.45	0.48	0.55	0.60	0.65
							Dividend Yield				3.8 %	3.4 %	2.9 %	2.7 %	2.5 %	2.8 %	3.0 %

					Book Value / Share			3.18	4.10	5.50	5.61	6.23	6.43	6.69
	Rel. Performance vs General

	1 month:		8.1 %			P / E				23.2 x	25.0 x	30.1 x	30.9 x	18.5 x	26.8 x	23.7 x

	6 months:		-14.9 %			Price / Book					2.8 x	2.6 x	2.5 x	3.1 x	3.5 x	3.4 x	3.2 x


				P / NAVPS					1.1 x	1.2 x	1.3 x	1.2 x	1.3 x	1.2 x	1.1 x


	Year to date:		-8.8 %

		FFO I-Yield			8.2 %	8.7 %	7.5 %	7.6 %	7.6 %	8.8 %	9.9 %
	Trailing 12 months:		-27.7 %


				ROE			12.4 %	12.3 %	10.2 %	10.2 %	19.7 %	12.7 %	13.9 %
							LTV			61.1 %	62.0 %	58.2 %	60.2 %	58.1 %	59.1 %	59.5 %
	Company events:
				Guidance:		2021e: FFO of EUR ~7.1m, Net profit (HGB) of EUR 3.1m








Analyst
Andreas Pläsier				COM M ENT		Published 02.06.2021 08:15			1


aplaesier@warburg-research.com

+49 40 309537-246

DEFAMA Deutsche Fachmarkt AG

RESEARCH

EPRA-NAV per share development	FFO per share development
in EUR	in EUR

Source: Warburg Research	Source: Warburg Research

Company Background

Founded in 2014 and headquartered in Berlin, DEFAMA focuses on the acquisition, ownership and management of retail parks in German small and medium-sized cities, predominantly in Northern and Eastern Germany.
The investment strategy is to "buy and hold" assets with high occupancy and minor capex needs for a purchase price of ~10x annual rent.
Investment volumes are EUR 1 - 5 million per asset. Anchor tenants are nationwide retailers.

Competitive Quality

Real estate competence: founder, major shareholder and CEO Matthias Schrade, previously oversaw as a board member responsible for acquisitions for a non-listed real estate company based in Munich.
Unique focus: the company competes for assets that are too large for individual investors and too small for institutional investors and can "buy low".
Strong access to local public banks networks, for whom real estate financings for DEFAMA projects are large and important deals. They in turn know smaller tenants well.
Focus on leading centers in smaller cities ("big fish in a small pond").

Geographical breakdown of rental	Rental income by sector
income	% of rental income
% of total rental income

Source: Warburg Research

COM M ENT	Published 02.06.2021	2

DEFAMA Deutsche Fachmarkt AG

RESEARCH

Valuation

	2017	2018	2019	2020	2021e	2022e	2023e

P / E	23.2 x	25.0 x	30.1 x	30.9 x	18.5 x	26.8 x	23.7 x
P / NAVPS	1.1 x	1.2 x	1.3 x	1.2 x	1.3 x	1.2 x	1.1 x
Price / Book	2.8 x	2.6 x	2.5 x	3.1 x	3.5 x	3.4 x	3.2 x
P / FFOPS I	12.2 x	11.5 x	13.4 x	13.2 x	13.2 x	11.4 x	10.1 x
FFO I-Yield	8.2 %	8.7 %	7.5 %	7.6 %	7.6 %	8.8 %	9.9 %
ROE	12.4 %	12.3 %	10.2 %	10.2 %	19.7 %	12.7 %	13.9 %
Equity Ratio	21 %	19 %	24 %	18 %	19 %	17 %	17 %

Company Specific Items

	2017	2018	2019	2020	2021e	2022e	2023e

NAV/Share	8.42	11.02	13.46	16.86	18.84	20.22	21.78
Vacancy Rate	2.7 %	4.3 %	4.0 %	3.7 %	3.7 %	4.0 %	4.0 %

COM M ENT	Published 02.06.2021	3

DEFAMA Deutsche Fachmarkt AG

RESEARCH

Consolidated profit and loss

In EUR m	2017	2018	2019	2020	2021e	2022e	2023e


Total revenues	5.83	9.09	11.21	14.58	17.77	20.11	22.56
Rental income	5.10	7.61	9.53	12.19	14.93	16.89	18.95
Change yoy	67.9 %	49.2 %	25.1 %	27.9 %	22.5 %	13.2 %	12.2 %

Property operating costs	1.24	2.21	2.63	3.40	4.21	4.67	5.23
Property management costs	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Rental profit	4.58	6.87	8.57	11.18	13.56	15.45	17.32
Income from property sales	0.00	0.00	0.00	0.00	2.60	0.00	0.00
Other revenues	0.12	0.08	0.07	0.12	0.14	0.16	0.18
Gross profit	4.70	6.95	8.64	11.30	16.30	15.61	17.50

Administration expenses	0.35	0.70	0.70	0.81	1.00	1.13	1.26
Personnel expenses	0.47	0.72	1.04	1.50	1.83	2.05	2.30
Other operating income/expenses	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Unfrequent items	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
EBITDA	3.89	5.53	7.04	8.99	13.48	12.43	13.94

Valuation result	0.00	0.00	0.00	0.00	2.60	0.00	0.00
Depreciation of fixed assets	1.22	1.95	2.55	3.36	4.27	4.83	5.41
EBITA	2.67	3.59	4.50	5.62	9.21	7.60	8.53
Amortisation of intangible assets/Goodwill	0.00	0.00	0.00	0.00	0.00	0.00	0.00
EBIT	2.67	3.59	4.50	5.62	9.21	7.60	8.53

Interest income	0.00	0.00	0.01	0.01	0.00	0.00	0.00
Interest expenses	0.90	1.34	1.73	2.14	2.54	2.81	3.11
Other financial income (loss)	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Financial result	-0.90	-1.34	-1.72	-2.13	-2.54	-2.81	-3.11
EBT	1.77	2.25	2.78	3.49	6.67	4.79	5.42
Margin	30.4 %	24.8 %	24.8 %	24.0 %	37.5 %	23.8 %	24.0 %

Total taxes	-0.41	-0.55	-0.71	-0.71	-0.71	-1.23	-1.38
thereof cash taxes	-0.28	-0.36	-0.42	-0.42	-0.42	-0.73	-0.83

Net income from continuing operations	1.36	1.70	2.07	2.51	5.16	3.56	4.04
Income from discontinued operations (net of tax)	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Net income before minorities	1.36	1.70	2.07	2.51	5.16	3.56	4.04
Minority interest	0.00	0.02	0.01	0.00	0.00	0.00	0.00
Net income	1.36	1.68	2.06	2.51	5.15	3.56	4.03
Number of shares, average	3.55	3.62	4.05	4.42	4.42	4.42	4.42
FFO (II)	2.58	3.65	4.62	5.87	7.23	8.38	9.45
FFO I-margin	50.6 %	47.9 %	48.4 %	48.2 %	48.5 %	49.6 %	49.9 %
FFOPS I	0.73	1.01	1.14	1.33	1.64	1.90	2.14
EPS	0.38	0.46	0.51	0.57	1.17	0.80	0.91
EPS adj.	0.38	0.43	0.47	0.57	1.17	0.80	0.91
*Adjustments made for:

Guidance: 2021e: FFO of EUR ~7.1m, Net profit (HGB) of EUR 3.1m

Financial Ratios

	2017	2018	2019	2020	2021e	2022e	2023e

Property operating costs / Rental Income	24.4 %	29.1 %	27.6 %	27.9 %	28.2 %	27.6 %	27.6 %
Operating Leverage (Real Estate)	2.4 x	2.9 x	5.0 x	4.6 x	5.5 x	8.8 x	9.3 x
Rental profit / interest expenses	5.1 x	5.1 x	5.0 x	5.2 x	5.3 x	5.5 x	5.6 x

Revenues, EBITDA	Operating Performance	Performance per Share
in EUR m	in %

Source: Warburg Research	Source:		Source: Warburg Research

	COM M ENT	Published 02.06.2021		4

DEFAMA Deutsche Fachmarkt AG

RESEARCH

Consolidated balance sheet

In EUR m	2017	2018	2019	2020	2021e	2022e	2023e

Assets

Goodwill and other intangible assets	0.01	0.01	0.03	0.02	0.02	0.02	0.02
thereof other intangible assets	0.00	0.00	0.00	0.00	0.00	0.00	0.00
thereof Goodwill	0.01	0.01	0.03	0.02	0.02	0.02	0.02
Property, plant and equipment	0.03	0.08	0.11	1.39	1.41	1.42	1.43
Investment properties	51.96	81.10	93.14	127.79	141.79	156.64	170.88
Financial assets	0.24	0.26	1.70	0.12	0.45	0.45	0.45
Other long-term assets	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Fixed assets	52.24	81.44	94.98	129.33	143.67	158.53	172.79
Inventories	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Accounts receivable	0.22	0.51	0.00	0.80	0.91	0.93	0.95
Liquid assets	2.49	2.80	6.98	4.28	4.45	4.43	4.56
Other short-term assets	0.83	0.59	-2.56	-0.66	-0.94	-0.94	-1.09
Current assets	3.17	4.34	9.29	7.38	6.37	6.37	6.54
Total Assets	55.41	85.79	104.28	136.71	150.04	164.91	179.33

Liabilities and shareholders' equity

Subscribed capital	3.55	3.90	4.42	4.42	4.42	4.42	4.42
Capital reserve	6.15	10.03	17.31	17.31	17.31	17.31	17.31
Retained earnings	1.59	2.06	2.56	3.07	5.80	6.70	7.86
Other equity components	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Shareholders' equity	11.29	15.99	24.29	24.81	27.53	28.43	29.59
Minority interest	0.10	0.38	0.39	0.40	0.40	0.40	0.40
Provisions	0.36	1.01	0.43	0.51	0.51	0.51	0.51
thereof provisions for pensions and similar obligations	0.18	0.21	0.21	0.25	0.25	0.25	0.25
Financial liabilities (total)	43.07	67.79	76.52	110.25	120.74	134.70	147.97
Short-term financial liabilities	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Accounts payable	0.19	0.30	0.51	0.29	0.42	0.42	0.42
Other liabilities	0.51	0.70	2.54	0.86	0.84	0.84	0.84
Liabilities	44.13	69.79	79.99	111.91	122.51	136.47	149.74

Total liabilities and shareholders' equity	55.41	85.79	104.28	136.71	150.04	164.91	179.33

Financial Ratios

	2017	2018	2019	2020	2021e	2022e	2023e

Return on Capital
ROA	3.1 %	2.4 %	2.2 %	2.1 %	3.6 %	2.3 %	2.3 %
ROE	12.4 %	12.3 %	10.2 %	10.2 %	19.7 %	12.7 %	13.9 %
FFO I / Equity	0.2 x	0.3 x	0.2 x	0.2 x	0.3 x	0.3 x	0.3 x
Solvency
Net Debt	40.76	65.20	69.75	106.23	116.55	130.52	143.66
Net Financial Debt	40.58	64.99	69.54	105.98	116.29	130.27	143.41
Net Fin. Debt / EBITDA	10.4 x	11.7 x	9.9 x	11.8 x	8.6 x	10.5 x	10.3 x
LTV	61.1 %	62.0 %	58.2 %	60.2 %	58.1 %	59.1 %	59.5 %
Equity Ratio	20.5 %	19.1 %	23.7 %	18.4 %	18.6 %	17.5 %	16.7 %

LTV	ROE	Book Value per Share
	in %	in EUR

Source: Warburg Research	Source: Warburg Research	Source: Warburg Research

	COM M ENT		Published 02.06.2021	5

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Defama Deutsche Fachmarkt AG published this content on 03 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 June 2021 10:48:05 UTC.

Latest news about DEFAMA Deutsche Fachmarkt AG

DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the Nine Months Ended September 30, 2023	11-24	CI
DEFAMA Deutsche Fachmarkt AG acquired Einkaufszentrum Reutter Zell from GRR Real Estate Management GmbH.	11-23	CI
DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the Half Year Ended June 30, 2023	23-08-16	CI
DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the Full Year Ended December 31, 2022	23-05-09	CI
DEFAMA Buys Four Properties in Germany	22-08-24	MT
DEFAMA Deutsche Fachmarkt AG entered into an agreement to acquire Specialty store portfolio in Bavaria and Baden-Württemberg for 5.2 million.	22-08-23	CI
DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the Half Year Ended June 30, 2022	22-08-23	CI
DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the First Quarter Ended March 31, 2022	22-05-24	CI
DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the Full Year Ended December 31, 2021	22-05-10	CI
DEFAMA Deutsche Fachmarkt AG announced that it expects to receive €10.26 million in funding	22-03-29	CI
DEFAMA Deutsche Fachmarkt AG Reports Earnings Results for the Nine Months Ended September 30, 2021	21-11-02	CI
DEFAMA Deutsche Fachmarkt AG acquired Property located in Barsinghausen, Lower Saxony for €1.4 million.	21-10-06	CI
DEFAMA Deutsche Fachmarkt AG acquired Retail store in Melsungen for €4.5 million	21-10-05	CI
Defama Deutsche Fachmarkt Ag Reports Earnings Results for the Half Year Ended June 30, 2021	21-08-03	CI
DEFAMA Deutsche Fachmarkt AG acquired a Local Supply Center Near Hanover for € 3.6 million.	21-05-27	CI
Defama Deutsche Fachmarkt Ag Reports Earnings Results for the Full Year Ended December 31, 2020	21-04-28	CI
DEFAMA Deutsche Fachmarkt AG acquired DIY store and Photovolatic system.	20-07-23	CI
DEFAMA Deutsche Fachmarkt AG announced that it has received €4.236 million in funding	18-09-24	CI
DEFAMA Deutsche Fachmarkt AG cancelled the acquisition of Saline Passage.	17-12-14	CI
DEFAMA Deutsche Fachmarkt AG acquired Westerwald Portfolio for € 6.2 million.	17-04-12	CI
DEFAMA Deutsche Fachmarkt AG announced the acquisition of Saline Passage for €6.9 million.	16-12-14	CI
DEFAMA Deutsche Fachmarkt AG announced that it has received €1.93 million in funding	16-12-08	CI
DEFAMA Deutsche Fachmarkt AG acquired retail park near Berlin for approximately €1.4 million.	16-10-06	CI
DEFAMA Deutsche Fachmarkt AG acquired park in Traben-Trarbach, Rheinland Pfalz for €1.7 million.	16-06-20	CI
DEFAMA Deutsche Fachmarkt AG acquired Pasewalk-Center for €6 million.	16-04-28	CI

Chart DEFAMA Deutsche Fachmarkt AG

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Company Profile

Defama Deutsche Fachmarkt AG is a Germany-based real estate company. The Company focuses on retail properties in small and medium-sized cities, mainly in northern and eastern Germany, but also in Rhineland-Palatinate. The Company owns real estate in Apolda, Bleicherode, Brand-Erbisdorf, Goerlitz, Koenigsee, Merseburg, Pasewalk, Radeberg, Schneeberg and Traben-Trarbach, and rents out space to various clients, including Netto Marken-Discount, Daenisches Bettenlager, REWE, Ernsting's family, Apotheke, ALDI Nord, Deichmann, Kik, Hammer Fachmaerkte, NORMA, Sagasser Getraenke, Drogeriemarket Bernhardt, PENNY-Markt, WVG Getraenke, toom, Takko, TEDi, Konsum, RENO, AWG Mode, K+K Schuhe and LIDL, among others.

Sector

Real Estate Development & Operations

More about the company

Income Statement Evolution

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Ratings for DEFAMA Deutsche Fachmarkt AG

Trading Rating

Investor Rating

ESG Refinitiv

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Analysts' Consensus

Sell

Buy

Mean consensus

BUY

Number of Analysts

Last Close Price

25 EUR

Average target price

31.6 EUR

Spread / Average Target

+26.40%

Consensus

EPS Revisions

Estimates Revisions

Annual profits - Rate of surprise

Company calendar

Sector Retail Real Estate Development

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Retail Real Estate Development