Deutsche Wohnen Se · XETR:DWNI

Deutsche Wohnen — H1 2020 Earnings Presentation

56 slides from Deutsche Wohnen's earnings presentation, Aug 13, 2020

  1. Slide 1: Deutsche Wohnen SE H1 2020 results

    Deutsche Wohnen SE H1 2020 results Conference Call 13 August 2020

  2. Slide 2: Agenda

    01 Strategy Update 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Agenda 01 Strategy Update 02 Market and Portfolio 03 Financials and Outlook 04 Appendix deutsche-wohnen.com 2

  3. Slide 3: Highlights H1-2020

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Highlights H1-2020 Operating business proves resilient ▪ Operational business on track despite Covid-19 challenges ▪ L-f-l rental growth at 1.7% for letting portfolio (2.8% excl. effects of Berlin rent free

  4. Slide 4: Deutsche Wohnen – focus on metropolitan regions and right product

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Deutsche Wohnen – focus on metropolitan regions and right product Unique market presence in dynamic regions Highlights Geographic distribution of DW portfolio and development pipeline based on latest ▪ Almo

  5. Slide 5: Only residential company with majority of assets in top 8 cities

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Deutsche Wohnen, the only residential company with majority of assets in top 8 cities Top 8 cities in Germany (in m inhabitants)1 Peer Analysis2 % of portfolio in top 8 cities (by units) Berlin 3.7 Deutsche

  6. Slide 6: Deutsche Wohnen – key strategic elements

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Deutsche Wohnen – key strategic elements Location Product1 Customer satisfaction ▪ Focus on metropolitan areas ▪ Focus on high quality products in terms of technical ▪ Combination of high service quality, h

  7. Slide 7: QUARTERBACK Immobilien AG – EUR 2bn residential development pipeline

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix QUARTERBACK Immobilien AG – EUR 2bn residential development pipeline ▪ Purchase of 40% shares of QBIAG plus direct investments Regional split of pipeline in several project companies with a total GDV of ~EU

  8. Slide 8: Expansion of total development pipeline to EUR >5bn

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Expansion of total development pipeline to EUR >5bn, focussed on dynamic hot spot regions Development projects by region Development projects by stage (in % of GDV)1 Other (in % of GDV)1 10% Planning phase

  9. Slide 9: Acquisitions – total volume of almost EUR 500m signed YTD

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Acquisitions – total volume of almost EUR 500m signed YTD Regional split Object of purchase ▪ 2,300 units, thereof 91% residential 35% 22% 20% Acquisition price ▪ EUR 460m / c. EUR 2,700 per sqm 12% 10% ▪ E

  10. Slide 10: Portfolio overview

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Portfolio overview Strategic cluster Residential units % of total In-place rent Fair value Multiple Multiple Vacancy (#) (measured by (EUR/sqm/month) (EUR/sqm) in-place rent re-letting rent3 (in %) 30/06/20

  11. Slide 11: Total like-for-like development at 1.7% y-o-y

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Total like-for-like development at 1.7% y-o-y Like-for-like Residential In-place rent In-place rent Change Vacancy Vacancy Change 30/06/2020 units 30/06/2020 30/06/2019 (y-o-y) 30/06/2020 30/06/2019 (y-o-y)

  12. Slide 12: Stable letting business

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Stable letting business Refurbishment & Maintenance per sqm in EUR m H1-2020 H1-2019 33.70 45.45 32.00 Income from rents (rental income) 421.8 411.1 Income relating to utility/ancillary costs 217.7 204.9 35

  13. Slide 13: Disposal business delivering double digit gross margins

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Disposal business delivering double digit gross margins Disposals Privatization Institutional sales Total with closing in H1-2020 H1-2019 H1-2020 H1-2019 H1-2020 H1-2019 No. of units 157 184 362 436 519 620

  14. Slide 14: Disposal of c. 6,400 non-strategic units

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Disposal of c. 6,400 non-strategic units ▪ 6,380 residential units Regional split Object of disposal ▪ 38 commercial units 50% ▪ Spread across 34 locations 43% Disposal price ▪ EUR 658m / c. EUR 1,540 per s

  15. Slide 15: Stable EBITDA contribution from Nursing business

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Stable EBITDA contribution from Nursing business Operations (in EUR m) H1-2020 H1-2019 Total income 116.1 112.0 in EUR m H1-2020 H1-2019 Total expenses (106.9) (102.5) Nursing & Assisted Living 104.4 102.9 EBITDA operations

  16. Slide 16: Adjusted EBITDA margin at 80.8%

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Adjusted EBITDA margin at 80.8% in EUR m H1-2020 H1-2019 Development of cost ratio1 Earnings from Residential Property Management 370.7 365.1 12.3% 11.7% Earnings from Disposals (3.6) 23.6 11.1% Earnings from Nursing and Ass

  17. Slide 17: FFO I per share at EUR 0.80

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix FFO I per share at EUR 0.80 in EUR m H1-2020 H1-2019 EBITDA (adjusted) FFO I margin development1 363.7 389.1 Earnings from Disposals 3.6 (23.6) 67.9% 63.5% 64.5% 65.3% Corporate Expenses for Disposals 1.6 1.6 62.0% 59.2% Lon

  18. Slide 18: Adjusted NAV per share at EUR 47.40

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Adjusted NAV per share at EUR 47.40 in EUR m 30/06/2020 31/12/2019 Equity (before non-controlling interests) 12,230.0 12,700.4 Adj. NAV2 per share (undiluted) in EUR Fair values of derivative financial instruments 62.6 50.8

  19. Slide 19: Conservative long-term capital structure

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Conservative long-term capital structure A- (negative outlook) / Rating A3 (negative outlook) ▪ Issuance of approx. EUR 1.2 bn corporate bonds with an average maturity of 7.5 years and 1.25% interest rate Ø maturity ~ 7.0 ye

  20. Slide 20: Outlook 2020

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Outlook 2020 FY-2019 reported FY 2020 Guidance / comments FFO I1 538.1 ▪ FFO I flat (EUR m) FY 2019 35.4% LTV ▪ 35-40% target range FY 2019 Like-for-like 3.40% ▪ C. 1% l-f-l rental growth on a cash flow basis rental growth F

  21. Slide 21: Appendix

    Appendix

  22. Slide 22: ESG

    ESG

  23. Slide 23: Ideally positioned to benefit from megatrends and committed to ESG

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Deutsche Wohnen – ideally positioned to benefit from the existing megatrends and committed to ESG concerns Persistent low Urbanization Aging society interest rate period Further increase in demand for care

  24. Slide 24: Improvement of energy efficiency of our properties

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Improvement of energy efficiency of our properties Energy efficiency 2015 – 2019 Achievements in kWh/sqm per year ▪ Energy efficiency improved from 139.1 kWh/sqm p.a. 139.1 (2015) to 128.9 kWh/sqm p.a. (201

  25. Slide 25: Energy intensity of our properties better than German average

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Energy intensity of our properties better than German average Energy efficiency classes based on final energy need Results in % of our portfolio ~ 64% above Ø energy efficiency performance Ø 128.9 kWh/sqm ▪

  26. Slide 26: A socially reliable landlord who goes beyond legal requirements

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Deutsche Wohnen - a socially reliable landlord who goes beyond legal requirements EUR 30m Corona aid fund for our tenants and partners Our promise to our tenants: In more than 800 cases no rent increases du

  27. Slide 27: Deutsche Wohnen provides affordable housing

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Deutsche Wohnen provides affordable housing Distribution of rent levels Apartment size Affordability of average Deutsche Wohnen flat in Berlin in Berlin in Berlin In-place rent Apartment size (Ø 60 sqm) DW

  28. Slide 28: Responsible corporate management

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Responsible corporate management Corporate Governance Strategically manage sustainability activities ▪ Supervisory board: ▪ Concept for incorporating the recommendations of → 1/3 are female TCFD into Group

  29. Slide 29: CSR Ratings continuously improved

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix CSR Ratings continuously improved Participation Rating Rating Rating Rating Rating (a) = active DW since 2015 2016 2017 2018 2019 (r) = reactive Most Improved Gold 2015 No award No award Gold Award Gold Awa

  30. Slide 30: Nursing & Assisted Living

    Nursing & Assisted Living

  31. Slide 31: Nursing portfolio – regional distribution

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Nursing portfolio – regional distribution Region Facilities Beds1 Occupancy rate Geographical allocation of the nursing and assisted living portfolio Managed by owner2 # # Greater Hamburg 17 3,380 87.6% Gre

  32. Slide 32: Demographic trends in Germany underpin rising demand

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Demographic trends in Germany underpin rising demand Increasing share of age groups 65+ and 80+ Ageing population leads to increasing demand for nursing homes ▪ Nursing care market driven by (irreversible)

  33. Slide 33: Overview of elderly care market in Germany

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Overview of elderly care market in Germany Description Payment regulation ▪ Covers all levels of inpatient care ▪ Reimbursement level depending on extend of care required (5 degrees available) Nursing homes

  34. Slide 34: Overview of regulatory environment for nursing homes (1/2)

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Overview of regulatory environment for nursing homes (1/2) ▪ No formal permission (except for building laws) required to set up new nursing homes New homes ▪ Operators entitled to enter into new supply cont

  35. Slide 35: Overview of regulatory environment for nursing homes (2/2)

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Overview of regulatory environment for nursing homes (2/2) Standard daily cost breakdown of nursing homes 14% Nursing services costs ▪ Germany is one of few countries which requires all citizens to have 22%

  36. Slide 36: Why we target to increase our investment in nursing market

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Why we target to increase our investment in nursing market Increasing demand for nursing Well funded long-term care insurance Strong Robust cash demographic flows trends Fragmented market with need for c. 2

  37. Slide 37: Nursing & Assisted Living – Strategy update

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Nursing & Assisted Living – Strategy update ▪ Deutsche Wohnen is targeting an EBITDA contribution of 15% in the medium-term ▪ Segment contribution to group EBITDA at c. 10% ▪ Further investments envisaged ▪

  38. Slide 38: Best in class Nursing and Assisted Living portfolio

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Best in class Nursing and Assisted Living portfolio Uferpalais, Berlin Im Schlossgarten, Brandenburg Wolkenstein, Saxony Wilsdruff, Saxony Am Schwarzen Berg, Lower Saxony Holstenhof, Hamburg Am Albertpark,

  39. Slide 39: Highly fragmented market structure for nursing home operators

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Highly fragmented market structure for nursing home operators Nursing home operators split by type (# of beds) 5% ▪ Nursing home operator market is very fragmented Non-profit operators − Top ten private ope

  40. Slide 40: Diverse

    Diverse

  41. Slide 41: Robust business model throughout COVID-19

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Robust business model throughout COVID-19 ▪ Residential business: ▪ Employees work with increased safety measures, technical possibilities allow employees to work from home if necessary ▪ Customer service i

  42. Slide 42: Update on Share Buyback program

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Update on Share Buyback program (as of 10 August 2020) Key Terms of SBB Development of SBB – average price vs volume in shares Price No. of shares ▪ Volume 45 EUR 200.000 ▪ up to EUR 25m shares, or 43 EUR 1

  43. Slide 43: Like-for-like development by regions

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Like-for-like development by regions 2 2 Like-for-like Residential In-place rent In-place rent Change Vacancy Vacancy Change 30/06/2020 units 30/06/2020 30/06/2019 (y-o-y) 30/06/2020 30/06/2019 (y-o-y) (#)

  44. Slide 44: Fair Values across regions

    01 Strategy Update & Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Fair Values across regions Regions Residential units FV FV Multiple Multiple Multiple 1 (#) 30/06/2020 30/06/2020 in-place rent re-letting rent spread (EUR m) (EUR/sqm) 30/06/2020 30/06/2020 Core+ 148,584 2

  45. Slide 45: Recent residential portfolio disposals

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Recent residential portfolio disposals Signing in 2019 Signing in 2020 Region Kiel, Lübeck, Chemnitz Berlin Across Germany (34 locations) No. of units 6,350 2,175 6,380 residential, 38 commercial Signing Aug 19 Dec 19 Jun 20

  46. Slide 46: Acquisition and disposal track record

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Acquisition and disposal track record Main acquisitions Fair Value In-place rent (>1,000 units deal size) in EUR/sqm in EUR/sqm Units Year Deal Location At acquisition 30/06/2020 ∆ At acquisition 30/06/2020 ∆ # Centuria 5,20

  47. Slide 47: Deutsche Wohnen's residential portfolio is best-in-class

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Deutsche Wohnen's residential portfolio is best-in-class Siemensstadt, Berlin Hellersdorf, Berlin Carl-Legien-Siedlung, Berlin Südwestkorso, Berlin Oranienkiez, Berlin Hufeisensiedlung, Berlin Dresden Otto-Suhr-Siedlung, Ber

  48. Slide 48: The Berlin portfolio at a glance

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix The Berlin portfolio at a glance Pankow Reinickendorf # 9,979 | 2.2% # 9,727 | 0.8% EUR 7.54 | EUR 3,279 EUR 6.87 | EUR 2,519 Lichtenberg Mitte # 8,803 | 0.9% # 4,571 | 1.1% EUR 6.80 | EUR 2,637 EUR 7.31 | EUR 2,921 Friedric

  49. Slide 49: Update on Berlin residential market

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Update on Berlin residential market Development of asking rents Development of asking prices for Development of asking prices for (EUR / sqm) multi-family-homes (EUR / sqm) condominiums (EUR / sqm) 6% 9% 5% 1% -1% 17% 15% 13

  50. Slide 50: Current level of rents and prices in TOP German cities

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Current level of rents and prices in TOP German cities Asking prices multifamily housing (in EUR / sqm)1 Development of rents (EUR/sqm/month)1 DW Berlin DW Berlin (book value) (re-letting rent) 6.91 2.420 +34% +49% Berlin Be

  51. Slide 51: Bridge from adjusted EBITDA to profit

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Bridge from adjusted EBITDA to profit in EUR m H1-2020 H1-2019 EBITDA (adjusted) 363.7 389.1 in EUR m H1-2020 H1-2019 Depreciation -19.0 -19.7 Interest expenses (69.0) (62.9) At equity valuation 1.1 1.9 In % of gross rents ~

  52. Slide 52: Ongoing investments into the portfolio

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Ongoing investments into the portfolio H1-2020 H1-2019 Refurbishment & Maintenance per sqm EUR m EUR / EUR m EUR / Sqm1 sqm1 33.70 45.45 32.00 ~ 40.00 Maintenance (expensed 45.9 9.00 42.4 8.20 through p&l) 35.53 ~30.00 25.50

  53. Slide 53: Strong generation of total shareholder return

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Strong generation of total shareholder return Development of dividend in EUR per share Development of adjusted NAV (undiluted) in EUR per share CAGR 2015-2019: +14% CAGR 2015-2019: +20% +11% +3% +9% +18% +8% 47.02 0.87 0.90

  54. Slide 54: Summary balance sheet

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Summary balance sheet Assets Equity and Liabilities in EUR m 06/30/2020 12/31/2019 in EUR m 06/30/2020 12/31/2019 Investment properties 25,441.9 25,433.3 Total equity 12,634.3 13,107.3 Other non-current assets 438.4 442.2 Fi

  55. Slide 55: 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 p

  56. Slide 56: Deutsche Wohnen SE

    Deutsche Wohnen SE Mecklenburgische Straße 57 14197 Berlin Phone +49 30 89786-5413 Fax +49 30 89786-5419 © 2020 Deutsche Wohnen Gruppe

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