Adler Group Sa · XETR:ADJ
Adler Group Sa — ADO Properties — FY2019 Earnings Presentation
42 slides from Adler Group Sa's earnings presentation, Mar 31, 2020
Slide 1: Full year 2019 results presentation
Full year 2019 results presentation Creating a major new residential player with a fully integrated platform Berlin – 31 March, 2020
Slide 2: Today's presenters
Today’s presenters Maximilian Rienecker Thierry Beaudemoulin Co-Chief Executive Officer ADLER Chief Executive Officer ADO ◼ ADLER Co-CEO since December 2017. Prior to that, ◼ Covivio Germany CEO and member of the Executive he was Head of Corporate Finance and Strategy board from 2006 to 2019 ◼ Previ
Slide 3: Agenda
Agenda 1 Takeover of ADLER to be completed 2 Well diversified €8.6bn German residential portfolio 3 Full year 2019 results 4 The new combination going forward 5 Increased focus on developments 6 Outlook 7 Appendices 3
Slide 4: COVID-19 Update
COVID-19 Update ◼ German authorities have eased the rules for short time work: employees will receive 60% to 67% of their net income for non-worked hours ◼ Requirements for obtaining a housing allowance are also being relaxed and the process is simplified to support citizens in their rent Actions by
Slide 5: 1. Takeover of ADLER to be completed
1. Takeover of ADLER to be completed
Slide 6: 1. Successful public offer for ADLER
1. Successful public offer for ADLER After the extended tender period 94.15% of ADLER shares have been tendered Financing Acquisition Integration started Next steps secured to be completed ▪ €3.2 billion (>93%)of ADLER ▪ Additional acceptance period ▪ Appointment of Maximilian ▪ Intention of public
Slide 7: 2. €8.6bn German residential portfolio
2. €8.6bn German residential portfolio
Slide 8: 2. Well diversified €8.6bn German residential portfolio
2. Well diversified €8.6bn German residential portfolio Creating a well balanced geographical portfolio of ADO and ADLER Development of number of units over time1 100,000 ADO Properties ADLER Real Estate Gewobag 5,900 units 80,000 75,721 60,000 40,000 20,000 0 2014 2015 2016 2017 2018 2019 Developme
Slide 9: 2. Key portfolio metrics
2. Key portfolio metrics Key cities in a well diversified portfolio Fair Value Fair Value Lettable area NRI Rental yield Vacancy Vacancy FY 19 NRI NRI Location Units €m FY19 €/sqm FY19 sqm €m FY19 (in-place rent) FY19 Δ YoY €/sqm/month Δ YoY ADLER 265.3 2,374 1,699 111,736 7.9 3.0% 1.8% -42.3% 5.97
Slide 10: 3. Full year 2019 results
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Slide 11: 3. FY 2019 Highlights of ADO Properties & ADLER Real Estate
3. FY 2019 Highlights of ADO Properties & ADLER Real Estate ▪ €6.2 residential rent/sqm/month (€7.4 for ADO and €5.6 for ADLER), up from €6.0 in 2018 (€6.7 for ADO and €5.5 for ADLER) Operational ▪ 3.3% like-for-like rental growth (5.0% for ADO and 2.4% for ADLER), down from 4.2% in 2018 (5.6% for A
Slide 12: 3. Joining forces to enhance operational performance
3. Joining forces to enhance operational performance Total number of units Investment properties (€m) Combined residential portfolio FV/sqm (€) ADO Properties ADLER Real Estate ADO Properties ADLER Real Estate 2,000 100,000 10,000 1,635 1,553 80,000 1,452 8,000 4,989 58,113 4,920 1,215 58,083 60,000
Slide 13: 3. Sources of funding and debt profile of the new combination
3. Sources of funding and debt profile of the new combination Combined loan to value1 Combined weighted average cost of debt Combined Interest cover ratio 80% 4.0% 3.8% 4 67.3% 3.3% 63.3% 3.5% 2.9% 3.0 51.0% 52.9% 53.8% 51.4% 3 2.8 3.0% 44.5% 2.3 2.4 2.5% 2.2% 40% 2.0% 1.9% 1.8 2.0% 2 1.6 1.5% 1.0%
Slide 14: 4. The new combination going forward
4. The new combination going forward
Slide 15: 4. Mietendeckel update (Berlin rent freeze)
4. Mietendeckel update (Berlin rent freeze) Summary of the Mietendeckel law / Berlin rent freeze ■ The rental freeze (“Mietendeckel”) law came in force on 23 February 2020 after adoption by the Berlin Senate ■ Existing rental contracts will be subject to (i) a freeze of rent levels effective as of 1
Slide 16: 4. Pro forma net rental income of €340-360m for 2020
4. Pro forma net rental income of €340-360m for 2020 Pro forma NRI post integration in the range of €340-360m for existing portfolio for 2020 Legend 340-360 1▪ First full year effect from the €920m disposal of 5,900 units to Gewobag effective 1 December 2019 2▪ Berlin rental growth at zero under new
Slide 17: 4. Growing pro forma FFO I to €120-140m for 2020
4. Growing pro forma FFO I to €120-140m for 2020 Pro forma FFO I post integration of €120-140m generated by existing portfolio* for 2020 Legend ▪1 First full year effect from the €920m disposal to Gewobag, corrected for impact of lower overhead and lower financing costs 120-140 ▪2 First full year ef
Slide 18: 5. Increased focus on developments
5. Increased focus on developments
Slide 19: 5. Development allows growth in most attractive German cities
5. Development allows growth in most attractive German cities Map of top 9 cities Comments Focus on top German cities ▪ Housing shortage is the highest in the larger cities ▪ Rental prices and values will continue to rise in the largest cities ▪ Continuation of above average population growth in lar
Slide 20: 5. Increased focus on developments in top German cities
5. Increased focus on developments in top 9 German cities ◼ Adding housing stock in cities with high housing shortage (Wolfsburg and Göttingen of the ADLER portfolio) Extensions / ◼ Development of new apartments in combination with significant tenant improvements increasing occupancy redevelopments
Slide 21: 5. Extensions and redevelopments in rental portfolio
5. Extensions and redevelopments in rental portfolio Solving local housing shortage via densification within own portfolio Wolfsburg & Göttingen – realizing additional value Tenant improvement & modernisations ▪ Wolfsburg and Göttingen are two key cities in the 4 million Hanover- ▪ Modernisation of
Slide 22: 5. Residential developments – to Hold
5. Residential developments – to Hold Majority of €0.7bn GDV developments at ADLER completed Berlin, Riverside Düsseldorf, Grafental Hold Potsdam Develop to hold Develop to hold Develop to hold ▪ 49,356 sqm of lettable area (incl. 5,562 sqm of ▪ 43,466 sqm of lettable area (incl. 1,460 sqm of ▪ 6,82
Slide 23: 5. Residential developments – to Sell
5. Residential developments – to Sell Düsseldorf, Glasmacherviertel Düsseldorf, Grafental Sale Düsseldorf, Grafenberg Develop to sell Develop to sell Develop to sell ▪ 187,000 sqm of lettable area ▪ 414 residential units developed in phases. ▪ 13,674 sqm of resi lettable area ▪ 84 residential units
Slide 24: 5. Adding housing stock in Berlin and Dresden on land positions
5. Adding housing stock in Berlin and Dresden on land positions Dresden, Trachau Berlin, Schönefeld Berlin, Späthstrasse Develop to hold Develop to hold Develop to hold ▪ 36,796 sqm of lettable area (incl. 5,887 sqm of ▪ 236,679 sqm of lettable area (incl. 79,148 sqm ▪ 19,035 sqm of lettable area (i
Slide 25: 6. Guidance
6. Guidance
Slide 26: 6. Guidance and outlook 2020
6. Guidance and outlook 2020 Objectives 2020 2020 Pro-forma 2019 Combined result 2020 Guidance guidance €134m (ADO) Net rental income (€m) €280-300m €340-360m €249m (ADLER) Ahornstraße Steglitz €63m (ADO) FFO I (€m) €105-125m €120-140m €84m (ADLER) Dividend (€/share) €0.75/share (ADO) 50% of FFO I -
Slide 27: Contact
Contact ADO Properties and ADLER Real Estate Maximilian Rienecker Thierry Beaudemoulin Tina Kladnik Co-CEO ADLER CEO ADO Head of IR ADLER Joachimsthaler Straße 34 1B Heienhaff Joachimsthaler Straße 34 10719 Berlin 1736 Senningerberg 10719 Berlin www.adler-ag.com Grand Duchy of Luxembourg www.adler-a
Slide 28: 7. Appendices
na SN 4 iY we a aw Fhe ie 7 7. Appendices
Slide 29: Overview of debt instruments
Overview of debt instruments Full year 2019 financials
Slide 30: Overview of debt instruments
Overview of debt instruments Instruments at FY19 Volume €m Maturity Nominal interest rate Other comments Premature redemption Rate, at which premature redemption is possible ADL Bonds 2017/21 500 06 Dec 2021 1.50% Anytime Under condition of make whole 2017/24 300 06 Feb 2024 2.10% Anytime Under cond
Slide 31: ADO Properties
ADO Properties Full year 2019 financials
Slide 32: ADO – Portfolio KPI's
ADO – Portfolio KPI’s Total number of residential units Investment properties (€m) Residential portfolio FV per sqm (€) 5,000 4,000 25,000 4,000 2,966 20,000 22,202 3,000 20,649 4,050 2,488 3,000 3,631 2,198 15,000 17,701 3,306 1,836 16,255 2,000 14,856 1,407 10,000 2,000 1,305 2,291 1,000 5,000 6,5
Slide 33: Profit and loss statement
Profit and loss statement Profit and loss statement per 31 December 2019 Comments In €m, except per share data FY 2019 FY 2018 1 Net rental income increased on the back of strong like-for-like rental growth of 1. Net rental income 134 1 128 5.0% Selling of condominiums 15 20 Income from facility ser
Slide 34: Statement of other comprehensive income
Statement of other comprehensive income Other comprehensive income per 31 December 2019 Comments In €m, except per share data FY 2019 FY 2018 1 Reserve financial asset measures the difference in value of the strategic 1. Profit for the year 607 397 stake in Consus between the acquisition date and th
Slide 35: Balance sheet
Balance sheet Balance sheet per 31 December 2019 Comments In €m FY 2019 FY 2018 1 The fair value of the portfolio was assessed by CBRE as at Dec 31, 2019 and 1. Investment properties including advances 3,631 1 4,050 shows the combined impact of positive revaluation, the ongoing privatizations Invest
Slide 36: FFO and EPRA NAV bridge
FFO and EPRA NAV bridge FFO calculation EPRA NAV calculation In €m, except per share data FY 2019 FY 2018 In €m, except per share data FY 2019 FY 2018 EBITDA from rental activities 92 94 Total equity attributable to owners of the Company 2,647 2,151 Net cash interest -27 -25 Fair value of derivative
Slide 37: ADLER Real Estate
ADLER Real Estate Full year 2019 financials
Slide 38: ADLER – Portfolio KPI's
ADLER – Portfolio KPI’s Total number of units Investment properties (€m) Residential portfolio FV per sqm (€) 70,000 6,000 2,000 60,000 5,000 58,113 58,083 4,989 4,920 50,000 4,000 1,167 1,095 40,000 48,218 47,662 46,179 928 3,000 1,000 817 732 735 30,000 3,019 2,000 2,442 20,000 24,086 2,235 10,000
Slide 39: Profit and loss statement
Profit and loss statement Profit and loss statement per 31 December 2019 Comments In €k FY 2019 FY 2018 1 Gross rental income increased due to 2.4% like-for-like rental growth, 1. Gross rental income 370 1 350 including a further reduction of vacancy to 5.4%, partly offset by disposals of Expenses f
Slide 40: Balance sheet
Balance sheet Balance sheet per 31 December 2019 Comments In €m FY 2019 FY 2018 1 Investment properties shows a combined effect of most notably positive 1. Investment properties 4,920 1 4,989 revaluations (€363m) and reclassifications to assets held for sale (€689m) Other non-current assets 369 244
Slide 41: FFO and EPRA NAV bridge
FFO and EPRA NAV bridge FFO Calculation EPRA NAV calculation In €m, except per share data FY 2019 FY 2018 In €m, except per share data FY 2019 FY 2018 Consolidated net profit 368 332 Equity attributable to ADLER shareholders 1,446 1,217 Financial result 19 131 Deferred tax liabilities 517 465 Income
Slide 42: Disclaimer
Disclaimer This presentation is for informational purposes only. This presentation is not intended to form the basis of any investment decision and should not be considered as a recommendation by ADO Properties S.A. and/or ADLER Real Estate Aktiengesellschaft (together, the “Companies”) or any other