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
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.