Adler Group Sa · XETR:ADJ
Adler Group Sa — Q3 2023 Earnings Presentation
42 slides from Adler Group Sa's earnings presentation, Nov 28, 2023
Slide 1: Q3 Results 2023 presentation
Q3 Results 2023 presentation 28 November 2023
Slide 2: Content
Content 1 Strategy Update 2 Restructuring Plan Update 3 Q3 2023 Highlights 4 Portfolio & Operational Performance 5 Financial Update 6 Guidance and Concluding Remarks 7 Appendix 2 Albrechtstraße, Berlin
Slide 3: Strategy Update
1 Strategy Update 3
Slide 4: Strategy Update
Strategy Update Accelerated progress in all Adler Group’s strategic pillars, despite more adverse market conditions than expected ✓ Adler Group’s asset disposals progressing, at a slower pace than expected ✓ Successful disposal of the c.700 units, Berlin-based “Wasserstadt” rental portfolio at close
Slide 5: Restructuring Plan Update
2 Restructuring Plan Update 5
Slide 6: Restructuring Plan Update
Restructuring Plan Update The Group has completed its Restructuring Plan and is now establishing a new foundation Recent events Completion of tender offer with Appointment of 98.9% of the Dr. Heiner Arnoldi, Appeal hearing Implementation of outstanding 2017/ Stefan Brendgen before the Court of the a
Slide 7: Q3 2023 Highlights
3 Q3 2023 Highlights 7
Slide 8: Q3 2023 Highlights
Q3 2023 Highlights Cash position of €432m following successful disposal of yielding assets and development projects PORTFOLIO FINANCIAL DISPOSALS & PERFORMANCE PERFORMANCE DEVELOPMENTS ◼ ◼ 2.4% 2.4% like-for-like like-for-like rental rental growth 1 growth1 with upcoming ◼ Lower NRI and negative FFO
Slide 9: Portfolio & Operational Performance
4 Portfolio & Operational Performance 9
Slide 10: Berlin-anchored Yielding Asset Portfolio
Berlin-anchored Yielding Asset Portfolio Reduction in portfolio value due to disposals, and negative revaluation in June 2023 Number of rental units Residential core portfolio as per September 20231 26,202 25,784 25,047 OTHER CITIES €0.6bn GAV 7,305 Berlin units Oberhausen Dec-22 Jun-23 Sep-23 Essen
Slide 11: No Portfolio Revaluation in Q3 2023
No Portfolio Revaluation in Q3 2023 Negative year-to-date adjustment of (8.4%) driven by the portfolio revaluation in H1 2023; rental yield for assets outside Berlin remains significantly higher than yields observed in Berlin Like-for-like fair value development (%) Rental yield (%)3 10.1% 5.2% 4.9%
Slide 12: Stable Rental Growth on a Like-for-Like Basis
Stable Rental Growth on a Like-for-Like Basis Like-for-like rental growth mainly driven by vacancy reduction and indexation of in-place rent for existing tenants Average rent (€/sqm/month) Like-for-like rental growth (%)2 Detailed breakdown of the like-for-like rental €7.24 growth Sep-23 (%) 7.56 li
Slide 13: Anticipated Rent Increase in Q4 2023
Anticipated Rent Increase in Q4 2023 The Company expects an additional like-for-like increase in monthly rents of c.2.9% until the end of the fourth quarter resulting in an expected like-for-like rental growth of c.4.7-5.0% for the full year 2023 Anticipated monthly rent for Q4 2023 per region (€m)
Slide 14: Financial Update
5 Financial Update
Slide 15: Development of GAV in Q3 2023
Development of GAV in Q3 2023 Disposal of the Wasserstadt portfolio reduces the yielding asset portfolio by c.€0.4bn GAV excluding BCP (€bn)1 Comments 1 Completion of the sale of the “Wasserstadt” rental portfolio located in Berlin, comprising c.700 rental units, at close to book 6.4 value - 6.0 Sal
Slide 16: EPRA LTV Bridge
EPRA LTV Bridge Increase in interest expenses significantly impacted the increase in EPRA LTV EPRA LTV evolution (%) Comments 0.2% 1 Interest expenses for Q3 2023 include both paid and accrued 0.4% amounts (0.2%) 89.1% 1.2% (0.3%) 2 During Q3 2023, Adler Group spent €39m on development CAPEX, mostly
Slide 17: Financing Update
Financing Update Adler Group successfully addressed all its financial obligations due in 2023, secured new financing in a very challenging financial market environment, and ensured sufficient liquidity for the group NEW NOTES ISSUED BCP EXCHANGE OFFER REPAYMENTS ◼ On 29 September 2023, Adler Group S
Slide 18: Overview of Debt KPIs as per September 2023
Overview of Debt KPIs as per September 2023 As per September 2023, the weighted average cost of debt amounts to 5.7% Debt KPIs as per September 2023 incl. BCP Sources of funding incl. BCP Restructuring security package - 2nd lien6 Total nominal interest-bearing debt (€m)1 6,521 1.6% EPRA LTV2 89.1%
Slide 19: Debt Maturity Schedule
Debt Maturity Schedule No remaining outstanding maturities to be covered in 2023 Overview of debt maturities1 incl. BCP (€m) Comments By the end of November 2023, all 3% 6% 34% 29% 9% 4% 12% 4% 2023 maturities have been repaid or refinanced 2,198 The vast majority of 2024 maturities is asset-linked
Slide 20: Development of Cash Position – Changes during Q3 2023
Development of Cash Position – Changes during Q3 2023 Cash increase driven by disposal proceeds and partial BCP intercompany loan repayment Cash position, excluding BCP (€m) 85 56 (236) 30 (19) (39) (30) 432 (4) 2 344 231 12 Restricted cash1 Restricted cash1 5 | Financial Update 42 45 Jun-23 Operati
Slide 21: Guidance and Concluding Remarks
6 Guidance and Concluding Remarks 21
Slide 22: 2023 Guidance and Concluding Remarks
2023 Guidance and Concluding Remarks Adler Group successfully addressed its 2023 refinancing requirements and accumulated a cash position of €432m to continue with its plan in 2024 Objectives Concluding remarks Appointment of AVEGA Revision as auditor for the standalone and consolidated financial st
Slide 23: Q&A
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Slide 24: Appendix
Appendix 25-26 Portfolio & Operational Performance 27-31 Financials 32-36 Debt Overview 37-38 Development Projects 40-41 Corporate Governance 42 Corporate Agenda 24
Slide 25: Breakdown of the like-for-like Rental Growth and CPI-linked rent
Breakdown of the like-for-like Rental Growth and CPI-linked rent Berlin L-f-L as per September 2023 (%) Other cities L-f-L as per September 2023 (%) Consumer price index (CPI) linked leases as per September 2023 (%) Without CAPEX CAPEX Without CAPEX CAPEX Based on units Based on NRI +4.2% +4.2% 2.2%
Slide 26: CAPEX and Maintenance in 9M 2023 in the Yielding Asset Portfolio
CAPEX and Maintenance in 9M 2023 in the Yielding Asset Portfolio CAPEX and maintenance (€m) Maintenance expense (€/sqm) CAPEX invested (€/sqm) 46 4.7 17.0 10 4.5 29 3.2 11.9 25 8 7 8.5 36 21 18 FY 2022 9M 2022 9M 2023 FY 2022 9M 2022 9M 2023 FY 2022 9M 2022 9M 2023 Maintenance CAPEX Appendix General
Slide 27: Profit and Loss Statement
Profit and Loss Statement P&L statement Comments In € million 9M 2023 9M 2022 1▪ Compared to 9M 2022, net rental income and income from facility services and recharged Net rental income 160 1 187 utilities costs decreased mainly due to the disposal of the Eastern portfolio to Velero/KKR, the Income
Slide 28: Adj. EBITDA Rental and FFO
Adj. EBITDA Rental and FFO 1 Adj. EBITDA Rental and FFO 1 calculation Comments In € million 9M 2023 9M 2022 ▪1 Income from rental activities and NOI decreased proportionally following the decrease in the Net rental income 160 187 number of rental units as a result from recent disposals such as the E
Slide 29: Adj. EBITDA Total and FFO
Adj. EBITDA Total and FFO 2 Adj. EBITDA Total and FFO 2 calculation Comments In € million 9M 2023 9M 2022 ▪1 Income from property development includes revenue recognition from forward sales and condo Income from rental activities 237 281 sales. Due to the reduced number of projects in the pipeline,
Slide 30: Balance Sheet
Balance Sheet Balance sheet Comments In € million Sep-23 Dec-221 ▪1 Decrease in Investment properties due to the revaluation of yielding assets (c. €-0.4bn) and Investment properties including advances 5,374 1 6,344 development assets (c. €-0.2bn) both taken into account in H1 2023, and the disposal
Slide 31: EPRA NAV Metrics
EPRA NAV Metrics EPRA NAV metrics calculation In € million, except per share data Sep-232 Dec-221,2 EPRA NAV metrics NAV NRV NTA NDV NAV NRV NTA NDV Total equity attributable to owners of the Company 238 238 238 238 1,417 1,417 1,417 1,417 Revaluation of inventories (4) (4) (4) (4) (2) (2) (2) (2) D
Slide 32: EPRA LTV - Methodology
EPRA LTV - Methodology EPRA LTV calculation as of September 2023 Comments Proportionate consolidation ▪ The main objective of EPRA’s LTV metric is to Group as Share of joint Share of material Non-controlling provide clarity on and assess the gearing of the In € million reported ventures associates i
Slide 33: EPRA LTV - Overview
EPRA LTV - Overview EPRA LTV Comments In € million Sep-23 Dec-221 1 Total interest-bearing debts of €6,119m slightly increased compared to December 2022 figures Borrowings from Financial Institutions 2,404 1 1,646 on the back of the drawdown of the New Money in the amount of €937m which was partly o
Slide 34: Breakdown of Debt Maturities per September 2023
Breakdown of Debt Maturities per September 2023 Nominal IFRS (€m) Maturity Nominal interest rate Other comments Premature redemption Rate, at which premature redemption is possible amount (€m) ADLER Real Estate Bonds (secured) Tender offer completed 2017/24 3 3 6 Feb 24 2.10% Anytime Under condition
Slide 35: Capital Structure (excl. Intercompany Loans)
Capital Structure (excl. Intercompany Loans) Repaid as per date of this presentation ADLER Real Estate AG – Capital structure Consus Real Estate AG – Capital structure Adler Group S.A. (standalone) – Capital structure In € million Amount O/S Maturity In € million Amount O/S Maturity In € million Amo
Slide 36: Debt Maturity Schedule 2024 by Subgroup
Debt Maturity Schedule 2024 by Subgroup Overview of quarterly 2024 debt maturities1 incl. BCP (€m) Comments Q1 2024 maturities primarily include the remaining €3m of the ADLER RE 2017/2024 192 bond that was not tendered in 2023 158 Q2 2024 maturities comprise the Wilhelm SSD 78 at Consus level (€114
Slide 37: Upfront Sale Projects
Upfront Sale Projects Substantial progress in disposals despite difficult market conditions Actual Remaining Building Construc. Land plot Area # Project name Entity City Zoning CAPEX 9M CAPEX Q4 permit started (k sqm) (k sqm) 20231 (€m) 20231 (€m) 1 Offenbach project2,3 Consus Offenbach ✓ ✓ ✓ 32 88
Slide 38: Forward Sale and Condominium Projects
Forward Sale and Condominium Projects Majority of projects to be completed and handed over by 2024 Total remaining Actual Remaining Construc. Building Construc. Land plot Area GAV1 GDV1 # Project name Entity City Zoning construc. CAPEX 9M CAPEX until period permit started (k sqm) (k sqm) (€m) (€m) C
Slide 39: Corporate Governance – Composition of the Board and Senior Management
Corporate Governance – Composition of the Board and Senior Management Current composition of the Board and Senior Management Prof. Dr. A. Stefan Kirsten Dr. Heiner Arnoldi Stefan Brendgen Thilo Schmid Thomas Zinnöcker Chairman of the Board Member of the Board Member of the Board Member of the Board
Slide 40: Corporate Governance – Shareholder Composition
Corporate Governance – Shareholder Composition Adler Group’s shareholder composition1 Vonovia 15.9% Taconic Capital 5.0% Advisors 79.1% Free Float Appendix 40 1. According to the official notifications received from the shareholders
Slide 41: Corporate Agenda
Corporate Agenda Adler Group S.A. financial calendar 2024 Investor relations contacts 29 April 2024 Publication Annual Report 2023, non-audited Gundolf Moritz Head of Financial & Corporate Communications 28 May 2024 Publication Q1 2024 Results g.moritz@adler-group.com 26 June 2024 Annual General Mee
Slide 42: Disclaimer
Disclaimer THIS PRESENTATION AND ITS CONTENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. This presentation (“Presenta