DEFAMA Deutsche Fachmarkt AG
(CDAX, 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: | 34.53 | |||||||||||||||||||||||
Commercial real estate company | ||||||||||||||||||||||||
EUR 31.90 | FFO-Yield 23e: | 29.52 | Balance Sheet Score: | 3.8 | focused on retail parks in Northern | |||||||||||||||||||
Market Liquidity Score: | 0.0 | and Eastern Germany | ||||||||||||||||||||||
Market Snapshot: | EUR m | Shareholders: | Key Figures (WRe): | 2021e | ||||||||||||||||||||
Price | EUR 28.00 | Market cap: | 123.76 | Freefloat | 65.0 % | LTV: | 58.1 % | |||||||||||||||||
No. of shares (m): | 4.42 | MSC Invest GmbH | 29.0 % | Equity Ratio: | 17.8 % | |||||||||||||||||||
Upside | 13.9 % | Freefloat MC: | 80.44 | Geminus GmbH | 4.0 % | |||||||||||||||||||
Supervisory board | 2.0 % | |||||||||||||||||||||||
Ø Trad. Vol. (30d): | 51.01 th | |||||||||||||||||||||||
2021 guidance fulfilled; Growth expected to continue in 2022 | ||||||||||||||||||||||||
Stated Figures Q4/2021: | Comment on Figures: | |||||||||||||||||||||||
Preliminary figures show that DEFAMA has met its 2021 guidance with | ||||||||||||||||||||||||
in EUR m | 2021 | 2021e | 2020 | +/- in % | an FFO figure of EUR 7.1m and net profit of EUR 5m. | |||||||||||||||||||
Even though the doubling of net profit and EPS includes a positive one- | ||||||||||||||||||||||||
Revenues | 17,0 | 17,77 | 14,58 | 17% | off impact of EUR ~2m (net) from the property sale in Bleicherode, the | |||||||||||||||||||
Net profit | 5,0 | 5,13 | 2,51 | 101% | adjusted growth of nearly 20% was impressive. The FFO also improved | |||||||||||||||||||
by 20% while the FFO margin of 42% (WRe) showed a slight increase. | ||||||||||||||||||||||||
EPS (€) | 1,14 | 1,16 | 0,57 | 101% | ||||||||||||||||||||
Our estimates were slightly higher due to temporary differences in the | ||||||||||||||||||||||||
revenue contributions of acquisitions and properties undergoing | ||||||||||||||||||||||||
FFO | 7,1 | 7,25 | 5,87 | 20% | refurbishment. | |||||||||||||||||||
2021 FFO yield stands at 5.6% and at 6.7% on achieved annualized | ||||||||||||||||||||||||
FFO-margin | 42% | 41% | 40% | FFO of EUR 8.5m which provides a good base to reach the FY 22 target | ||||||||||||||||||||
FFOPS (€) | 1,60 | 1,64 | 1,33 | 20% | of EUR 8.5m. | |||||||||||||||||||
DPS | 0,51 | 0,55 | 0,48 | 6% | The dividend proposal leads to a current dividend yield of nearly 2%. | |||||||||||||||||||
- DEFAMA's 2022 guidance for FFO of EUR 8.5m (WRe: EUR 8.41m) and net profit of EUR 3.5m (WRe: EUR 3.56m) is in line with our expectations. The targeted annualised FFO of EUR 10m at year-end 2022 is ambitious but achievable given the expected contribution from the company's own investments in the portfolio (2022 ~EUR 4m) and new acquisitions (target >previous level of 15-20m; 2021: EUR 29.7m). The FFO guidance might be affected by the possibility of attractive disposals (at higher multiples) which would strengthen the cash position and enable a higher gross acquisition volume.
- Against the background of a potentially higher acquisition volume and ongoing attractive investments in the existing portfolio, management is considering a small capital increase of 5-10% in the event of successful negotiations with sellers (acquisitions) and tenants (rental contracts). Considering the following possible positive effects from these investments, no dilution effect should be expected after the achievement of full positive effects.
Guidance | 2021 | WRe 2021 | Guidance 2022 | 2022 | WRe 2022 | |
FFO | 7,1 | 7,25 | FFO | 8,5 | 8,41 | |
FFOPS | 1,60 | 1,64 | FFOPS | 1,92 | 1,90 | |
Net profit (HGB) | >5 | 5,13 | Net profit (HGB) | 3,5 | 3,56 | |
EPS | >1.13 | 1,16 | Annualised FFO | 10,0 | Current figure 8,5 |
- We confirm our Buy recommendation with an unchanged price target of EUR 31.90 as we see ongoing improvements for the FFO and the possibility of attractive disposals after quality improvements in DEFAMA's properties.
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 | 16.98 | 19.52 | ||||||||||
Change yoy | 67.9 % | 49.2 % | 25.1 % | 27.9 % | 22.5 % | 13.7 % | 15.0 % | ||||||||||
EBIT | 2.67 | 3.59 | 4.50 | 5.62 | 9.28 | 7.72 | 8.88 | ||||||||||
FFO I | 2.58 | 3.65 | 4.62 | 5.87 | 7.25 | 8.41 | 9.84 | ||||||||||
FFO I-margin | 50.6 % | 47.9 % | 48.4 % | 48.2 % | 48.6 % | 49.5 % | 50.4 % | ||||||||||
EBT | 1.77 | 2.25 | 2.78 | 3.49 | 6.67 | 4.79 | 5.69 | ||||||||||
Net income | 1.36 | 1.68 | 2.06 | 2.51 | 5.13 | 3.56 | 4.26 | ||||||||||
EPS | 0.46 | 0.51 | 0.57 | 1.16 | 0.81 | 0.96 | |||||||||||
0.38 | |||||||||||||||||
FFOPS I | 0.73 | 1.01 | 1.14 | 1.33 | 1.64 | 1.90 | 2.23 | ||||||||||
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 % | 2.0 % | 2.1 % | 2.3 % | ||||||||||
Book Value / Share | 3.18 | 4.10 | 5.50 | 5.61 | 6.22 | 6.43 | 6.74 | ||||||||||
Rel. Performance vs CDAX: | |||||||||||||||||
1 month: | 6.9 % | P / E | 23.2 x | 25.0 x | 30.1 x | 30.9 x | 24.1 x | 34.8 x | 29.0 x | ||||||||
6 months: | 29.2 % | Price / Book | 2.8 x | 2.6 x | 2.5 x | 3.1 x | 4.5 x | 4.4 x | 4.2 x | ||||||||
P / NAVPS | 1.1 x | 1.2 x | 1.3 x | 1.2 x | 1.6 x | 1.5 x | 1.4 x | ||||||||||
Year to date: | 10.0 % | ||||||||||||||||
FFO I-Yield | 8.2 % | 8.7 % | 7.5 % | 7.6 % | 5.9 % | 6.8 % | 7.9 % | ||||||||||
Trailing 12 months: | 45.8 % | ||||||||||||||||
ROE | 12.4 % | 12.3 % | 10.2 % | 10.2 % | 19.6 % | 12.7 % | 14.6 % | ||||||||||
LTV | 61.1 % | 62.0 % | 58.2 % | 60.2 % | 58.1 % | 59.0 % | 59.4 % | ||||||||||
Company events: | |||||||||||||||||
Guidance: | 2022e: FFO of EUR ~8.5m, Net profit (HGB) of EUR ~3.5m | ||||||||||||||||
Analyst | |||||||||||||||||
Andreas Pläsier | COM M ENT | Published 01.03.2022 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 01.03.2022 | 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 | 24.1 x | 34.8 x | 29.0 x |
P / NAVPS | 1.1 x | 1.2 x | 1.3 x | 1.2 x | 1.6 x | 1.5 x | 1.4 x |
Price / Book | 2.8 x | 2.6 x | 2.5 x | 3.1 x | 4.5 x | 4.4 x | 4.2 x |
P / FFOPS I | 12.2 x | 11.5 x | 13.4 x | 13.2 x | 17.1 x | 14.7 x | 12.6 x |
FFO I-Yield | 8.2 % | 8.7 % | 7.5 % | 7.6 % | 5.9 % | 6.8 % | 7.9 % |
ROE | 12.4 % | 12.3 % | 10.2 % | 10.2 % | 19.6 % | 12.7 % | 14.6 % |
Equity Ratio | 21 % | 19 % | 24 % | 18 % | 18 % | 17 % | 16 % |
Company Specific Items
2017 | 2018 | 2019 | 2020 | 2021e | 2022e | 2023e | |
NAV/Share | 8.42 | 11.02 | 13.46 | 16.86 | 18.85 | 20.22 | 21.88 |
Vacancy Rate | 2.7 % | 4.3 % | 4.0 % | 3.7 % | 3.7 % | 4.0 % | 4.0 % |
COM M ENT | Published 01.03.2022 | 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 | 20.21 | 23.24 |
Rental income | 5.10 | 7.61 | 9.53 | 12.19 | 14.93 | 16.98 | 19.52 |
Change yoy | 67.9 % | 49.2 % | 25.1 % | 27.9 % | 22.5 % | 13.7 % | 15.0 % |
Property operating costs | 1.24 | 2.21 | 2.63 | 3.40 | 4.21 | 4.69 | 5.39 |
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 | 15.52 | 17.84 |
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 | 0.25 | 0.24 | 0.28 |
Gross profit | 4.70 | 6.95 | 8.64 | 11.30 | 16.41 | 15.76 | 18.12 |
Administration expenses | 0.35 | 0.70 | 0.70 | 0.81 | 1.00 | 1.13 | 1.30 |
Personnel expenses | 0.47 | 0.72 | 1.04 | 1.50 | 1.83 | 2.06 | 2.37 |
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 | 13.58 | 12.57 | 14.45 |
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 | 4.30 | 4.85 | 5.58 |
EBITA | 2.67 | 3.59 | 4.50 | 5.62 | 9.28 | 7.72 | 8.88 |
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 | 9.28 | 7.72 | 8.88 |
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 | 2.62 | 2.93 | 3.19 |
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 | -2.62 | -2.93 | -3.19 |
EBT | 1.77 | 2.25 | 2.78 | 3.49 | 6.67 | 4.79 | 5.69 |
Margin | 30.4 % | 24.8 % | 24.8 % | 24.0 % | 37.5 % | 23.7 % | 24.5 % |
Total taxes | -0.41 | -0.55 | -0.71 | -0.71 | -0.71 | -1.23 | -1.42 |
thereof cash taxes | -0.28 | -0.36 | -0.42 | -0.42 | -0.42 | -0.73 | -0.87 |
Net income from continuing operations | 1.36 | 1.70 | 2.07 | 2.51 | 5.14 | 3.56 | 4.27 |
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 | 5.14 | 3.56 | 4.27 |
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 | 5.13 | 3.56 | 4.26 |
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 | 7.25 | 8.41 | 9.84 |
FFO I-margin | 50.6 % | 47.9 % | 48.4 % | 48.2 % | 48.6 % | 49.5 % | 50.4 % |
FFOPS I | 0.73 | 1.01 | 1.14 | 1.33 | 1.64 | 1.90 | 2.23 |
EPS | 0.38 | 0.46 | 0.51 | 0.57 | 1.16 | 0.81 | 0.96 |
EPS adj. | 0.38 | 0.43 | 0.47 | 0.57 | 1.16 | 0.81 | 0.96 |
*Adjustments made for: | |||||||
Guidance: 2022e: FFO of EUR ~8.5m, Net profit (HGB) of EUR ~3.5m |
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 | 8.5 x | 7.8 x |
Rental profit / interest expenses | 5.1 x | 5.1 x | 5.0 x | 5.2 x | 5.2 x | 5.3 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 01.03.2022 | 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 | 141.83 | 156.75 | 170.94 |
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 | 143.71 | 158.64 | 172.84 |
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 | 11.46 | 8.12 | 8.46 |
Other short-term assets | 0.83 | 0.59 | -2.56 | -0.66 | -7.95 | -4.63 | -4.99 |
Current assets | 3.17 | 4.34 | 9.29 | 7.38 | 13.39 | 10.07 | 10.44 |
Total Assets | 55.41 | 85.79 | 104.28 | 136.71 | 157.10 | 168.70 | 183.28 |
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 | 5.78 | 6.68 | 8.07 |
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 | 27.51 | 28.42 | 29.80 |
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 | 127.74 | 138.35 | 151.43 |
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 | 0.92 | 1.01 | 1.12 |
Liabilities | 44.13 | 69.79 | 79.99 | 111.91 | 129.59 | 140.29 | 153.48 |
Total liabilities and shareholders' equity | 55.41 | 85.79 | 104.28 | 136.71 | 157.10 | 168.70 | 183.28 |
Financial Ratios
2017 | 2018 | 2019 | 2020 | 2021e | 2022e | 2023e | |
Return on Capital | |||||||
ROA | 3.1 % | 2.4 % | 2.2 % | 2.1 % | 3.5 % | 2.2 % | 2.4 % |
ROE | 12.4 % | 12.3 % | 10.2 % | 10.2 % | 19.6 % | 12.7 % | 14.6 % |
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 | 116.53 | 130.48 | 143.23 |
Net Financial Debt | 40.58 | 64.99 | 69.54 | 105.98 | 116.28 | 130.23 | 142.97 |
Net Fin. Debt / EBITDA | 10.4 x | 11.7 x | 9.9 x | 11.8 x | 8.6 x | 10.4 x | 9.9 x |
LTV | 61.1 % | 62.0 % | 58.2 % | 60.2 % | 58.1 % | 59.0 % | 59.4 % |
Equity Ratio | 20.5 % | 19.1 % | 23.7 % | 18.4 % | 17.8 % | 17.1 % | 16.5 % |
LTV | ROE | Book Value per Share |
in % | in EUR |
Source: Warburg Research | Source: Warburg Research | Source: Warburg Research | |||
COM M ENT | Published 01.03.2022 | 5 | |||
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Defama Deutsche Fachmarkt AG published this content on 01 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 March 2022 09:07:05 UTC.