Deutsche Wohnen Se · XETR:DWNI
Deutsche Wohnen — 9M 2017 Earnings Presentation
24 slides from Deutsche Wohnen's earnings presentation, Nov 14, 2017
Slide 1: Deutsche Wohnen SE 9M 2017 results
Deutsche Wohnen SE » 9M 2017 results Conference Call, 14 November 2017 1
Slide 2: Agenda
» Agenda 1 Highlights 9M 2017 2 Portfolio 3 Financials 4 Appendix 2
Slide 3: Highlights 9M 2017
» Highlights 9M 2017 Strong operating business L-f-l rental growth of 4.2% for letting portfolio – for Berlin even at 5.0% as Mietspiegel effects start to come through Adjusted EBITDA (excl. disposals) up 7.5% yoy to EUR 435.3m Attractive NOI margin of 77.4% despite increased maintenance costs Capex
Slide 4: Market and sector specific trends underpin the investment case
» Market and sector specific trends underpin the investment case Net immigration and new construction in Berlin Berlin with strongest population growth forecast Development of residents: Boomtown Berlin 300,000 Change in number of residents 2015 - 2035 (in %) 20 254,500 14.5 250,000 15 Berlin expect
Slide 5: Current level of rents and prices offer significant growth potential
» Current level of rents and prices offer significant growth potential Asking prices multifamily housing (in EUR / sqm) Asking rents in German top cities (in EUR / sqm) DW Berlin DW Berlin (book value) 1,884 (re-letting rent) 8.31 Dusseldorf Berlin 2,499 9.79 Cologne Dusseldorf 2,627 10.00 Berlin Co
Slide 6: Portfolio update 9M 2017 – attractive reversionary potential
» Portfolio update 9M 2017 – attractive reversionary potential Strategic cluster Residential % of total In-place rent1) Fair value Multiple Multiple Rent potential2) Vacancy units measured by in-place market fair value EUR/sqm/month EUR/sqm rent rent in % in % Strategic core and growth 159,496 99.6%
Slide 7: Strong like-for-like development in particular in Berlin
» Strong like-for-like development in particular in Berlin 2) 2) Like-for-like Residential units In-place rent In-place rent Change Vacancy Vacancy Change 30/09/2017 number 30/09/2017 30/09/2016 y-o-y 30/09/2017 30/09/2016 y-o-y EUR/sqm EUR/sqm in % in % Strategic core and growth regions Core+ 131,6
Slide 8: Focused and increasing investments into the portfolio
» Focused and increasing investments into the portfolio 9M 2017 9M 2016 Modernization & Maintenance per sqm EUR / EUR / 16.51 19.98 24.92 ~30 EUR m EUR m sqm1) sqm1) Maintenance (expensed 74.1 9.95 64.4 8.75 through p&l) ~ 20 15.29 Modernization 10.53 (capitalized on 142.1 19.08 83.5 11.34 6.92 bala
Slide 9: NOI margin at 77.4%
» NOI margin at 77.4% in EUR m 9M 2017 9M 2016 Rental income 553.4 526.1 Non-recoverable expenses (8.0) (6.2) Rental loss (4.3) (4.8) Maintenance (74.1) (64.4) Others (5.4) (6.0) Maintenance expenses as a percentage of rental income increased from 12.2% to 13.4% Earnings from Residential Property 46
Slide 10: Attractive margins of disposal business despite significant revaluations
» Attractive margins of disposal business despite significant revaluations Disposals Privatization Institutional sales Total with closing in 9M 2017 9M 2016 9M 2017 9M 2016 9M 2017 9M 2016 No. of units 571 1,061 1,603 2,544 2,174 3,605 Proceeds (EUR m) 83.8 125.5 115.7 175.5 199.5 301.0 Book value 6
Slide 11: Increasing FFO contribution from Nursing and Assisted Living
» Increasing FFO contribution from Nursing and Assisted Living Operations (in EUR m) 9M 2017 9M 2016 in EUR m 9M 2017 9M 2016 Total income 69.4 52.4 Nursing 53.9 41.5 Total expenses (63.1) (47.1) Living 6.5 4.9 EBITDA operations 6.3 5.3 Other 9.0 6.0 EBITDA margin 9.1% 10.1% in EUR m 9M 2017 9M 2016
Slide 12: EBITDA margin continues to be strong
» EBITDA margin continues to be strong in EUR m 9M 2017 9M 2016 Development of cost ratio Earnings from Residential Property Management 461.6 444.7 11.6% 10.0% 10.5% Earnings from Disposals 28.5 46.4 Earnings from Nursing and Assisted Living 36.9 13.7 Segment contribution margin 527.0 504.8 Q3 2015
Slide 13: FFO growth of 9% mainly driven by operations and acquisitions
» FFO growth of 9% mainly driven by operations and acquisitions in EUR m 9M 2017 9M 2016 FFO I margin development EBITDA (adjusted) 463.8 451.4 64.8% 61.6% 59.6% Earnings from Disposals (28.5) (46.4) 57.6% Long-term remuneration component 51.3% 1.2 1.6 48.4% (share based) At equity valuation 1.3 1.5
Slide 14: EPRA NAV per share stable in 9M 2017
» EPRA NAV per share stable in 9M 2017 in EUR m 30/09/2017 31/12/2016 EPRA NAV(1) per share (undiluted) in EUR Equity (before non-controlling interests) 8,842.2 7,965.6 29.68 31.55 6% 23.01 Fair values of derivative financial 20.0 47.0 + 29% instruments Deferred taxes (net) 2,328.7 2,004.4 EPRA NAV
Slide 15: Early refinancing of the convertible bonds due 2020 and 2021
» Early refinancing of the convertible bonds due 2020 and 2021 Refinancing CB 2020 in Feb 2017 Refinancing CB 2021 in Sep 2017 Notional amount €250m €800m €400m €800m Issue date Nov 2013 Feb 2017 Aug 2014 Oct 2017 Maturity Nov 2020 Jul 2024 Sep 2021 Jan 2026 Coupon p.a. 0.500% 0.325% 0.875% 0.600% I
Slide 16: Conservative long term capital structure
» Conservative long term capital structure Rating A- / A3; stable outlook Low leverage, long maturities and strong rating Ø maturity1) ~ 8.2 years Flexible financing approach to optimize financing costs – unencumbered assets increased to > EUR 4bn % secured bank debt1) 66% No significant maturities
Slide 17: Appendix
» Appendix deutsche-wohnen.com .
Slide 18: Bridge from adjusted EBITDA to profit
» Bridge from adjusted EBITDA to profit in EUR m 9M 2017 9M 2016 in EUR m 9M 2017 9M 2016 EBITDA (adjusted) 463.8 451.4 Interest expenses (74.8) (79.3) Depreciation (5.2) (4.6) In % of rental income ~14% ~15% At equity valuation 1.3 1.5 Non-cash interest expenses (17.2) (9.9) (91.4) (92.0) (89.2) Fi
Slide 19: Summary balance sheet
» Summary balance sheet Assets Equity and Liabilities in EUR m 30/09/2017 31/12/2016 in EUR m 30/09/2017 31/12/2016 Investment properties 17,941.0 16,005.1 Total equity 9,146.6 8,234.0 Other non-current assets 132.2 108.6 Financial liabilities 4,793.6 4,600.0 Deferred tax assets 0.7 0.7 Convertibles
Slide 20: Full year guidance remains unchanged
» Full year guidance remains unchanged 2017 2016 update Main drivers Guidance FFO I (EUR m) 384 ~425 Operational performance and recent acquisitions Dividend per Based on 65% pay-out ratio from FFO I 0.74 ~0.78 share (EUR) and current shares outstanding 35-40% LTV 37.7% (target Aim to keep current r
Slide 21: Strong like-for-like development in particular in Berlin
» Strong like-for-like development in particular in Berlin 2) 2) Like-for-like Residential units In-place rent In-place rent Change Vacancy Vacancy Change 30/09/2017 Number 30/09/2017 30/09/2016 y-o-y 30/09/2017 30/09/2016 y-o-y EUR/sqm EUR/sqm in % in % Letting portfolio1) 150,302 6.32 6.07 4.2% 1.
Slide 22: The Berlin portfolio at a glance
» THE BERLIN-PORTFOLIO AT A GLANCE Reinickendorf Pankow # 9,443 • 6.33 • 1.8% # 9,781 • 6.89 • 2.6% Mitte Friedrichshain-Kreuzberg # 4,602 • 6.68 • 2.6% # 8,005 • 6.13 • 4.5% Lichtenberg # 8,702 • 6.34 • 0.8% Spandau # 13,777 • 6.23 • 1.9% Marzahn-Hellersdorf # 14,874 • 5.67 • 0.6% Charlottenburg-Wi
Slide 23: Disclaimer
» Disclaimer This presentation contains forward-looking statements including assumptions, opinions and views of Deutsche Wohnen or quoted from third party sources. Various known and unknown risks, uncertainties and other factors could cause actual results, financial positions, the development or the
Slide 24: Deutsche Wohnen SE contact details
Deutsche Wohnen SE Mecklenburgische Straße 57 14197 Berlin Phone: +49 30 897 86 5413 Fax: +49 30 897 86 5419 © 2017Deutsche Wohnen SE