Deutsche Wohnen Se · XETR:DWNI

Deutsche Wohnen — Q1 2019 Earnings Presentation

32 slides from Deutsche Wohnen's earnings presentation, May 14, 2019

  1. Slide 1: Deutsche Wohnen SE Q1 2019 results

    Deutsche Wohnen SE Q1 2019 results Conference Call 14 May 2019

  2. Slide 2: Agenda

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

  3. Slide 3: Highlights Q1 2019

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Highlights Q1 2019 Operating business remains strong ▪ L-f-l rental growth at 3.4% (Berlin at 3.7%) ▪ Adj. EBITDA margin (ex disposals) and adjusted for maintenance and accounting effects increased by 1.7% to 79.3% yoy ▪ FFO

  4. Slide 4: Strong reversionary potential

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Strong reversionary potential Strategic cluster Residential units % of total In-place rent Fair value Multiple Multiple Reversionary Vacancy (#) (measured by (EUR/sqm/month) (EUR/sqm) in-place rent re-letting rent potential1

  5. Slide 5: Total like-for-like development at 3.4% yoy

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Total like-for-like development at 3.4% yoy Like-for-like Residential In-place rent In-place rent Change Vacancy Vacancy Change 31/03/2019 units 31/03/2019 31/03/2018 (y-o-y) 31/03/2019 31/03/2018 (y-o-y) (#) (EUR/sqm/month)

  6. Slide 6: Berlin rent index outcome below market development - as expected

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Berlin rent index outcome below market development - as expected Historical development of Berlin rent index EUR/sqm Growth in 2y 7.00 9.4% 10% 6.50 9% 7.9% 6.72 6.39 8% 6.00 6.3% 5.2% 7% 6.0% 5.9% 5.8% 5.50 5.84 6% 5.54 5.0

  7. Slide 7: Strong letting business

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Strong letting business Refurbishment & Maintenance per sqm in EUR m Q1-2019 Q1-2018 41.05 24.15 28.29 Income from rents (rental income) 204.7 192.9 30.91 15.33 20.84 Income relating to utility/ ancillary costs 104.6 101.8 1

  8. Slide 8: Disposal business expected to gain pace in 2019

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Disposal business expected to gain pace in 2019 Disposals Privatization Institutional sales Total with closing in Q1-2019 Q1-2018 Q1-2019 Q1-2018 Q1-2019 Q1-2018 No. of units 108 76 38 273 146 349 Proceeds (EUR m) 47.3 17.0

  9. Slide 9: Increasing EBITDA contribution from Nursing business

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Increasing EBITDA contribution from Nursing business Operations (in EUR m) Q1-2019 Q1-2018 Total income 55.7 23.5 in EUR m Q1-2019 Q1-2018 Total expenses -51.2 -22.2 Nursing & Assisted Living 51.2 20.5 EBITDA operations 4.5

  10. Slide 10: Adj. EBITDA margin increased to 83%

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Adj. EBITDA margin increased to 83% in EUR m Q1-2019 Q1-2018 Development of cost ratio1 Earnings from Residential Property Management 183.7 163.7 11.5% 10.9% Earnings from Disposals 19.9 4.8 10.0% Earnings from Nursing and A

  11. Slide 11: FFO I per share at EUR 0.40

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix FFO I per share at EUR 0.40 in EUR m Q1-2019 Q1-2018 EBITDA (adjusted) 203.6 162.0 FFO I margin development1 Earnings from Disposals (19.9) (4.8) 69% 66% 65% Corporate Expenses for Disposals 0.8 0.7 61% Finance lease broadba

  12. Slide 12: EPRA NAV per share at EUR 42.54

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix EPRA NAV per share at EUR 42.54 in EUR m 31/03/2019 31/12/2018 Equity (before non-controlling interests) 11,628.2 11,559.1 EPRA NAV per share (undiluted) in EUR Fair values of derivative financial instruments 37.7 14.6 +17%

  13. Slide 13: Conservative long-term capital structure

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Conservative long-term capital structure Rating A- / A3; stable outlook Ø maturity ~ 7.8 years ▪ Successful refinancing of EUR 221m corporate bond (notional EUR 500m) and approx. EUR 200m forward interest rate hedges % secur

  14. Slide 14: Guidance 2019 unchanged

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Guidance 2019 unchanged FY-2018 FY-2019 Main drivers comments Reported Guidance ▪ Approximately EUR 535m1 (+12% yoy) FFO I 535 479.4 ▪ Unchanged dividend payout ratio of 65% of FFO I (EUR m) 2018 2019 guidance ▪ EUR 0.872 pe

  15. Slide 15: Appendix

    Appendix

  16. Slide 16: Like-for-like development by regions

    01 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 31/03/2019 units 31/03/2019 31/03/2018 (y-o-y) 31/03/2019 31/03/2018 (y-o-y) (#) (EUR/sqm) (EUR/sqm

  17. Slide 17: Attractive spread between in-place and re-letting rent multiples offer further potential for NAV growth

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Attractive spread between in-place and re-letting rent multiples offer further potential for NAV growth Regions Residential units FV FV Multiple Multiple Multiple (#) 31/03/2019 31/03/2019 in-place rent re-letting rent sprea

  18. Slide 18: 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

  19. Slide 19: 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 # 9,865 | 2.9% # 9,745 | 0.9% EUR 7.37 | EUR 3,031 EUR 6.76 | EUR 2,353 Lichtenberg Mitte # 8,803 | 1.2% # 4,565 | 1.7% EUR 6.69 | EUR 2,502 EUR 7.17 | EUR 2,660 Friedric

  20. Slide 20: Berlin – The place to be!

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Berlin – The place to be! Government Industry Innovation High-tech Tourism Science 2nd best • 6,500 technology Seat of parliament, Siemens signed biggest performing European firms Around 13.5 million Highest density of gover

  21. Slide 21: Re-letting rents continue to outpace in-place rents

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Re-letting rents continue to outpace in-place rents Rent development in Greater Berlin Development of multiples in Greater Berlin1 10.62 10.34 29.9x 29.8x 9.83 27.1x 9.00 9.08 8.99 8.53 8.47 23.7x 8.1x spread 7.60 22.0x 21.7

  22. Slide 22: Dynamic transaction market

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Dynamic transaction market Transaction volume in German Residential (EUR bn) Development of rents in Berlin (EUR/sqm/month) Volume in bn Units sold +3% +9% +5% 30 400.000 10.34 10.62 361.000 9.83 9.00 25 300.000 2016 2017 20

  23. Slide 23: Current level of rents and prices in TOP 7 German cities

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Current level of rents and prices in TOP 7 German cities Asking prices multifamily housing (in EUR/sqm)1 Development of rents (EUR/sqm/month)1 DW Greater Berlin DW Greater Berlin (book value) 2.404 (re-letting rent) 9.08 Col

  24. Slide 24: 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 Q1-2019 Q1-2018 EBITDA (adjusted) 203.6 162.0 in EUR m Q1-2019 Q1-2018 Depreciation (12.4) -1.9 Interest expenses (30.9) (23.6) At equity valuation 1.7 0.7 In % of gross rents ~

  25. Slide 25: Ongoing investments into the portfolio

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Ongoing investments into the portfolio Q1-2019 Q1-2018 Refurbishment & Maintenance per sqm EUR m EUR / EUR m EUR / sqm1 sqm1 19.46 24.15 28.29 ~ 40.00 Maintenance (expensed 19.2 7.45 22.1 8.82 through p&l) ~30 15.33 20.84 10

  26. Slide 26: Size matters – Deutsche Wohnen's below average apartment size is a clear affordability advantage

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Size matters – Deutsche Wohnen’s below average apartment size is a clear affordability advantage Affordability of average Deutsche Wohnen flat in Berlin Housing cost ratio DW In-place DW re-letting Market rent2 Housing cost

  27. Slide 27: 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 EPRA NAV (undiluted) in EUR per share CAGR 2014-2018: +18% CAGR 2014-2018: +24% +18% +9% +8% +20% +37% 42.26 0.87 0.80 +29

  28. Slide 28: 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 31/03/2019 31/12/2018 in EUR m 31/03/2019 31/12/2018 Investment properties 23,894.3 23,781.7 Total equity 11,980.6 11,908.1 Other non-current assets 446.3 291.2 Fi

  29. Slide 29: Management board and areas of responsibilities

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Management board and areas of responsibilities Michael Zahn Philip Grosse Lars Wittan Lars Urbansky Chief Executive Officer Chief Financial Officer Chief Operating Officer Succeeding Chief Operating Officer (appointed until

  30. Slide 30: Executive Board compensation system – as of 1 January 2018

    01 Highlights 02 Market and Portfolio 03 Financials and Outlook 04 Appendix Executive Board compensation system – as of 1 January 2018 1 Introduction of Share Ownership Guidelines (SOGs) 2 Conversion of the Stock Option Plan into a Performance Cash Plan Reduction of the plan’s complexity and meeting

  31. Slide 31: 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

  32. Slide 32: Deutsche Wohnen SE

    Deutsche Wohnen SE Mecklenburgische Straße 57 14197 Berlin Phone +49 30 89786-5413 Fax +49 30 89786-5419 © 2019 Deutsche Wohnen Gruppe

Deutsche Wohnen — Q1 2019 Earnings Presentation on 6ix