Deutsche Wohnen Se · XETR:DWNI

Deutsche Wohnen — H1 2016 Earnings Presentation

30 slides from Deutsche Wohnen's earnings presentation, Aug 12, 2016

  1. Slide 1: Deutsche Wohnen AG H1 2016 results

    Deutsche Wohnen AG » H1 2016 results Conference Call, 12 August 2016 1

  2. Slide 2: Agenda

    » Agenda 1 Highlights H1 2016 2 Portfolio 3 Financials 4 Guidance & Outlook 5 Q&A 2

  3. Slide 3: Financial highlights H1 2016

    » Financial highlights H1 2016 Operational development KPIs In EUR m H1 2016 YoY In EUR m H1 2016 YoY NOI letting 272.9 +15.2% FFO I (after minorities) 196.7 +37.8% NOI margin 78.5% +2.9ppt in EUR/ share1) 0.58 +24.2% Like-for-like rental growth 3.8% +1.3ppt FFO I margin 56.6% +11.1ppt Vacancy rate

  4. Slide 4: Focused and concentrated portfolio with attractive reversionary potential

    » Focused and concentrated portfolio with attractive reversionary potential Strategic cluster Residential units % of total In-place rent1) Rent potential2) Vacancy measured by 30/06/2016 30/06/2016 30/06/2016 fair value EUR/sqm/month in % in % Strategic core and growth regions 153,869 98.2% 6.02 21%

  5. Slide 5: Strong dynamics in Core+ underpinned by EUR 731m value uplift

    » Strong dynamics in Core+ underpinned by EUR 731m value uplift Summary Key figures H1 2015 FY 2015 H1 2016  Revaluation of EUR ~0.73bn or EUR 901) per sqm leading to a Total fair value in EUR 10.3bn 11.7bn 13.5bn multiple expansion by 1.0x to 19.1x Area (sqm) in m 8.9 9.1 9.8  Uplift in Greater B

  6. Slide 6: Attractive spread between in-place and market rent multiples offer further potential for NAV growth

    » Attractive spread between in-place and market rent multiples offer further potential for NAV growth 1) 1) Residential FV FV Multiple Multiple Multiple Fair Value Regions units (30/06/2016) (30/06/2016) in-place rent market rent in-place rent (31/12/2015) # EUR m EUR/sqm (30/06/2016) (30/06/2016) (

  7. Slide 7: Price development in Berlin outpaces other metropolitan areas

    » Price development in Berlin outpaces other metropolitan areas Price development (multifamily) in EUR per sqm Valuation by Berlin cluster (H1 2016) 5,117 (+46%) FV in multiple in- multiple Subcluster # of units in % EUR/ sqm place rent market rent 3,500 Hot spot 34,046 31.8 1,716 22.2x 18.1x 2,703

  8. Slide 8: Strong fundamentals support capital growth

    » Strong fundamentals support capital growth Unemployment Berlin and Germany  Strong increase of disposable income coupled with lower unemployment support increases in rents and prices 16%  Supply demand imbalance will tighten further in 14% metropolitan areas, in particular in Berlin with expecte

  9. Slide 9: Nursing and assisted living market in Germany

    » Nursing and assisted living market in Germany Top 10 private operators 2015  Nursing market with c. EUR 40bn annual turnover 30 220 4th largest sub-segment within healthcare sector # of places # of homes (€27.6bn in- and €12.3bn outpatient nursing care) Tausende 25 20 103 123 123 93 51 72 52 49 2

  10. Slide 10: Acquisition overview

    » Acquisition overview  28 nursing (c. 3.700 places) and assisted living Object of facilities (c. 400 places) with 180k sqm purchase  Only assets acquired, not the operating  Facilities of high quality in good locations predom- business inantly in West Germany  Good market positioning from a pri

  11. Slide 11: Portfolio details (1/2)

    » Portfolio details (1/2) Distribution by operators Distribution by location 7% 3% Bavaria 24% 3% 7% 4% North-Rhine Westphalia 22% Pro Seniore 79% 7% Lower Saxony 16% Phönix (Korian) 7% 24% 14% Rheinland Palatinate 15% Casa Reha (Korian) 7% 15% Baden-Württemberg 14% 79% 22% Hamburg 4% Cura 7% 16% Th

  12. Slide 12: Portfolio details (2/2)

    » Portfolio details (2/2) Pro Seniore Residenz (Oberau, Bavaria) Pro Seniore Residenz (Kempten, Bavaria) Pro Seniore Residenz (Radolfzell, Baden-Württemberg) Sozialkonzept Cäcilienhof (Garbsen, Lower Saxony) 12

  13. Slide 13: Strong earnings and cash contributions from letting

    » Strong earnings and cash contributions from letting in EUR m H1 2016 H1 2015 Development of operational line items Non-rec. exp. Rental loss Admin exp. Rental income 347.8 313.3 31.8 32.7 27.0 Non-recoverable expenses (4.4) (6.9) Rental loss (3.4) (3.5) Maintenance (43.7) (39.2) 20.9 22.3 19.2 Oth

  14. Slide 14: Growing prices as demonstrated by disposal business

    » Growing prices as demonstrated by disposal business Disposals Privatization Institutional sales Total with closing in H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 No. of units 749 950 1,505 6,379 2,254 7,329 Proceeds (EUR m) 90.0 93.4 130.9 413.7 220.9 507.1 Book value 65.2 65.0 113.0 383.8 178

  15. Slide 15: Attractive FFO contribution from Nursing and Assisted Living

    » Attractive FFO contribution from Nursing and Assisted Living in EUR m H1 2016 H1 2015 # of facilities # of places Income KATHARINENHOF 20 2,048 Nursing 27.4 26.1 Acquired portfolio 28 4,132 Living 3.2 3.0 Total pro forma 48 6,180 Other 4.0 3.8 Total income 34.6 32.9 Costs Average occupancy KATHARI

  16. Slide 16: Best in class EBITDA margin

    » Best in class EBITDA margin in EUR m H1 2016 H1 2015 Development of cost ratio 11.7% Earnings from Residential Property Management 292.1 259.1 Earnings from Disposals 36.7 46.2 9.9% Earnings from Nursing and Assisted Living 8.7 7.9 Segment contribution margin 337.5 313.2 H1 2015 H1 2016 Cost Ratio

  17. Slide 17: Operational improvements and acquisitions drive FFO growth

    » Operational improvements and acquisitions drive FFO growth in EUR m H1 2016 H1 2015 FFO per share development in EUR EBITDA (adjusted) 303.2 271.4 0.69 Earnings from Disposals (36.7) (46.2) 0.62 At equity valuation 0.9 0.9 0.11 0.15 + 23% Interest expense/ income (52.7) (68.6) 0.58 Income taxes (1

  18. Slide 18: Steady increase of EPRA NAV per share

    » Steady increase of EPRA NAV per share in EUR m 30/06/2016 31/12/2015 NAV per share undiluted in EUR Equity (before non-controlling interests) 7,067.7 6,653.5 25.04 23.01 + 9% Fair values of derivative financial 17.86 64.8 44.8 + 28% instruments Deferred taxes (net) 1,316.8 1,064.1 EPRA NAV (undilu

  19. Slide 19: Guidance for 2016 increased

    » Guidance for 2016 increased (base case1) Guidance 2016 2015 H1 2016 Mid-term outlook Old New EPRA NAV per 23.01 25.04 25 - 26 >26 share (undiluted) FFO I in EUR m 303 197 >360 >380 Dividend per 0.54 n/a ~0.70 >0.73 share LTV2) 43%* 41% <40% <40% 1) Without acquisitions and opportunistic portfolio

  20. Slide 20: Appendix

    » Appendix deutsche-wohnen.com ‘ ) a Deutsche Wohnen 20

  21. Slide 21: Management board and areas of responsibilities

    » Management board and areas of responsibilities Michael Zahn Lars Wittan Philip Grosse Chief Executive Officer Chief Investment Officer Chief Financial Officer (CEO) (CIO) (CFO)1) Areas of responsibility: Areas of responsibility: Areas of responsibility:  Strategy  Asset Management  Equity Finan

  22. Slide 22: Strong like-for-like development as of 30 June 2016

    » Strong like-for-like development as of 30 June 2016 2) 2) Like-for-like Residential units In-place rent In-place rent Change Vacancy Vacancy Change 30/06/2016 number 30/06/2016 30/06/2015 y-o-y 30/06/2016 30/06/2015 y-o-y EUR/sqm EUR/sqm in % in % Letting portfolio1) 130,851 6.04 5.81 3.9% 1.4% 1.

  23. Slide 23: Focused and increasing investments into the portfolio

    » Focused and increasing investments into the portfolio H1 2016 H1 2015 EUR m EUR m Maintenance 43.7 39.2 (expensed through p&l) Modernization 43.2 33.4 (capitalized on balance sheet) Total 86.9 72.6 Total EUR/ sqm1) 17.70 16.04 Maintenance and capex will increase in the course of the year to EUR 25

  24. Slide 24: Bridge from adjusted EBITDA to profit

    » Bridge from adjusted EBITDA to profit in EUR m H1 2016 H1 2015 in EUR m H1 2016 H1 2015 EBITDA (adjusted) 303.2 271.4 Interest expenses (53.2) (69.1) Depreciation (3.0) (2.7) In % of rents ~15% ~22% At equity valuation 0.9 0.9 Non-cash interest expenses (5.5) 1.7 (67.4) Financial result (net) (58.

  25. Slide 25: Summary balance sheet

    » Summary balance sheet Assets Equity and Liabilities in EUR m 30/06/2016 31/12/2015 in EUR m 30/06/2016 31/12/2015 Investment properties 13,454.4 11,859.1 Total equity 7,324.3 6,872.0 Other non-current assets 615.8 614.3 Financial liabilities 4,444.0 3,780.4 Deferred tax assets 335.7 325.5 Converti

  26. Slide 26: Conservative long term capital structure with <1.7% interest costs

    » Conservative long term capital structure with <1.7% interest costs Rating A- / A3; stable outlook LTV 41.2%  Low leverage, long maturities and best in class rating ICR1) >5x  Flexible financing approach to optimize financing costs Ø maturity ~9 years  No significant maturities until and includi

  27. Slide 27: Strong generation of total shareholder return

    » Strong generation of total shareholder return Development of dividend in EUR per share Development of EPRA NAV (undiluted) in EUR per share >0.73 >26 23.01 +2.3% 0.54 17.86 0.44 14.51 0.34 12.48 0.21 2012 2013 2014 2015 2016e 2012 2013 2014 2015 2016e  Top line growth via acquisitions and operati

  28. Slide 28: The Berlin portfolio at a glance

    » THE BERLIN-PORTFOLIO AT A GLANCE Reinickendorf Pankow # 9,396  5.94  1.8% # 9,208  6.42  1.5% Mitte Friedrichshain-Kreuzberg # 3,348  6.06  1.0% # 7,766  5.93  1.7% Lichtenberg # 8,718  6.01  1.2% Spandau # 13,759  5.83  1.5% Marzahn-Hellersdorf # 14,878  5.30  1.3% Charlottenburg-Wi

  29. Slide 29: 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

  30. Slide 30: Deutsche Wohnen AG contact details

    Deutsche Wohnen AG Registered Office Berlin Office Pfaffenwiese 300 Mecklenburgische Straße 57 65929 Frankfurt/ Main 14197 Berlin Phone: +49 30 897 86 5413 Fax: +49 30 897 86 5419 © 2016 Deutsche Wohnen AG

Deutsche Wohnen — H1 2016 Earnings Presentation on 6ix