Adler Group Sa · XETR:ADJ
Adler Group Sa — FY2021 Earnings Presentation
63 slides from Adler Group Sa's earnings presentation, May 3, 2022
Slide 1: Governance update & results presentation
Governance update & results presentation 3 May 2022
Slide 2: Update on recent events
Update on recent events 2
Slide 3: Corporate governance update
Corporate governance update Recent events Listen, Learn, Lead Appointment of Dr. Vonovia has FY21 financial ◼ Process: Schade as Chief become the largest accounts have been Development Officer shareholder of Adler audited by KPMG, ◼ Special investigations into the allegations accelerated and scope o
Slide 4: Corporate restructuring
Corporate restructuring REASSESSMENT GOODWILL RESTARTING REVERSAL OF SIGNIFICANT OF THE IMPAIRMENT, CONSTRUCTION THE SALE TO PROGRESS ON DEVELOPMENT NO IMPACT ON WITH CAPEX PARTNERS VARIOUS SALES PIPELINE EPRA NTA COVERED IMMOBILIEN CAPITAL MANAGEMENT Since Q3 2021, Adler Group Recent economic Progr
Slide 5: Successfully concluded €2.3bn of disposals above book value
Successfully concluded €2.3bn of disposals above book value Additional €1.3bn of GAV anticipated to be disposed of on the back of the potential sale of BCP GAV yielding portfolio (€bn) Comments 9.1 1 Sale of approximately 15,500 units in northern regions to LEG 1.3 for €1.3bn and transferred in Dece
Slide 6: Pro forma development of cash position
Pro forma development of cash position LEG exercising its option for BCP would lead to a cash receipt of c.€768m Gross cash position, theoretical approach (€m)1 351 975 410 165 c. 1,560 27 768 400 470 687 804 112 c. 700 36 174 556 Update on recent events 396 Q3 2021 LEG (North Debt Other2 FY 20213 K
Slide 7: Liquidity requirement until 2023 year-end covered
Liquidity requirement until 2023 year-end covered Anticipated cash inflow (€m) Anticipated cash outflow (€m) 614 4,610 1.73x 1,245 Worst case scenario provides sufficient liquidity to cover anticipated outflow at 1.17x 1.17x 1,489 356 2,662 1,121 549 772 Update on recent events 7131 412 Apr 22 PF Ma
Slide 8: Operating within the boundaries of the bond covenants
Operating within the boundaries of the bond covenants Numerous routes to increasing unencumberance ratio to >125% Bond covenants Possible routes to bring unencumbered assets ratio back to >125% Required Current level Covenants Routes / Scenarios Description level (FY 2021) LTV • Buyback the two inst
Slide 9: Q&A
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Slide 10: Content
Content 1 Key Highlights 2 Portfolio Optimisation 3 Corporate Restructuring 4 Balance Sheet Strengthened 5 Acceleration of Construction in Developments 6 Guidance 7 Appendix 10 Braunschweiger Strasse, Berlin
Slide 11: Key highlights
Key highlights Learning from the past to shape the future CORPORATE FINANCIAL PORTFOLIO & GOVERNANCE PERFORMANCE DEVELOPMENTS ◼ Appointment of Prof. Dr. Kirsten as Chairman of ◼ NRI +18% to €346m ◼ Since Q3 2021, €2.3bn2 of disposals above the Board latest book value, LEG closed in December ◼ FFO 1
Slide 12: Portfolio Optimisation
FIADLER GROUP Portfolio Optimisation
Slide 13: Significant increase in portfolio quality
Significant increase in portfolio quality Post non-strategic disposals, a high-quality Berlin anchored portfolio remains Standing assets as per FY 2021 & disposals per region1 Fair value (€/sqm) 3,015 GAV 333 2,640 42 2,268 372 €5.6bn standing assets3 Berlin 252 2,016 1,887 LFL fair Oberhausen value
Slide 14: Reshaping the portfolio is pushing vacancy to all time lows
Reshaping the portfolio is pushing vacancy to all time lows… Like-for-like fair value growth (%) Yielding portfolio operational vacancy rate2 (%) -2.3% 10.1% 3.8% LIKE-FOR-LIKE 3.4% FAIR VALUE 1.0% GROWTH 2.8% 6.7% 10.1% 0.2% 2.6% YoY Ongoing Sales and Portfolio Optimisation 1.5% VACANCY 1.1% 1.1% D
Slide 15: Increasing the average monthly in-place rent significantly
… and increasing the average monthly in-place rent significantly Residential and commercial average rent Like-for-like residential rental growth (%) Like-for-like rental growth breakdown2 (%) (€/sqm/m) 7.45 4.3% 2.6% 2.5% 2.5% 7.22 0.23 6.82 0.40 0.09 6.64 0.18 6.55 6.30 1.7% 2.6% 0.0% 2.6% 0.1% 2.6
Slide 16: Corporate Restructuring
Corporate Restructuring 16
Slide 17: Comprehensive reassessment of the development pipeline
Comprehensive reassessment of the development pipeline Build-to-hold focus increases on projects with a high proportion of residential in Germany’s top cities Changes in GAV per segment KPIs per segment as per FY 2021 Q3 20211 A Build-to-hold development pipeline Condominium Build-to-hold ◼ Since Q3
Slide 18: Focus on top cities and residential assets
Focus on top cities and residential assets Reassessment of the development pipeline, leading to the proposed sale of several development projects ANTICIPATED PROGRESS ON SUCCESSFUL PENDING SALES DECISION MADE EXERCISE OF BUILD-TO-HOLD HANDOVER OF TO SELL OPTION BCP SIX PROJECTS FURTHER PROJECTS €1.3
Slide 19: Receivables backed by underlying assets and on track
Receivables backed by underlying assets and on track GERRESHEIM PICM GRÖNER ACCENTRO PROJECT Type: Reversal Type: Disposals Type: Disposals Type: Disposals €209m €165m €84m €59m Gerresheim project retained and Partners Immobilien Capital Gröner Group bought 17 non-strategic Adler Real Estate AG sold
Slide 20: Goodwill write-down of €1.1bn reflecting new environment
Goodwill write-down of €1.1bn reflecting new environment On the back of recent economic developments and reshaping the build-to-hold pipeline Goodwill (€m) Comments 1,175 Recent economic developments and the effects of the COVID-19 pandemic have significantly affected Consus’ current net assets, fin
Slide 21: Balance Sheet Strengthened
Balance Sheet Strengthened 21
Slide 22: Total GAV decreased to €8.3bn
Total GAV decreased to €8.3bn Significant disposals of both development projects and yielding assets decreased the Group’s balance sheet GAV (€bn) Comments 1 Sale of approximately 15,500 units in northern regions to LEG for €1.3bn 13.3 0.6 2 Positive value changes on the back of revaluation of yield
Slide 23: Disposals decrease leverage significantly since Q3 2021
Disposals decrease leverage significantly since Q3 2021 Pro forma LTV evolution1,2 (%, incl. convertibles) Comments 57.0% 1 Sale price of €1.5bn, including €135m deferred tax liabilities, implying a c.15.3% premium to latest book value. The corresponding notional debt reduction amounts to €425m and
Slide 24: Balanced debt maturity schedule
Balanced debt maturity schedule Upcoming maturities covered by cash at hand Overview of debt maturities1 (€m) Comments Upcoming maturities are 11% 14% 13% 11% 20% 8% 6% 18% covered through a combination of €556m2 cash on hand as per FY 2021, expected receivables and active capital recycling measures
Slide 25: CAPEX 2022-2028E funded by cash reserves and envisaged disposals
CAPEX 2022-2028E funded by cash reserves and envisaged disposals With a more balanced build-to-hold portfolio, the anticipated cash requirements diminish to healthy levels Annual overview of envisaged construction CAPEX for the build-to-hold development projects (€m)1 Funded by cash Funded by envisa
Slide 26: Acceleration of Construction in Developments
Acceleration of Construction in Developments 26
Slide 27: Construction ongoing across the development pipeline
Construction ongoing across the development pipeline Königshöfe - Dresden Quartier Hoym - Dresden Kornversuchsspeicher - Berlin Forward sale Forward sale Build-to-hold Address: Theresienstr. 4 Address: Rampische Str. 4–18 & Landhausstr. 3–15 Address: Heidestr. 20C June 2021 July 2021 June 2018 Accel
Slide 28: Guidance
Guidance 28
Slide 29: Setting the goals for 2022
Setting the goals for 2022 Objectives Concluding remarks Strengthening of the balance sheet following successful Full-year 2022 guidance disposals of €2.3bn yielding assets followed by potential sale of BCP; targeted loan to value of 47.2%2 Disposals of non-strategic assets increased the quality of
Slide 30: Guidance: Net rental income for FY 2022E of €203-212m
Guidance: Net rental income for FY 2022E of €203-212m NRI in the range of €203-212m for existing portfolio for FY 2022E Comments 1 Sale of approximately 15,500 units in northern regions to 200 162 1091 LEG for €1.3bn 346 2 Sale of approximately 14,400 units in eastern regions to Velero/KKR for €1.0b
Slide 31: Guidance: FFO for FY 2022E of €73-76m
Guidance: FFO 1 for FY 2022E of €73-76m FFO 1 in the range of €73-76m for existing portfolio for FY 2022E Comments 1 Sale of approximately 15,500 units in northern regions to LEG for €1.3bn 137 2 Sale of approximately 14,400 units in eastern regions to Velero/KKR for €1.0bn. 97% of the assets have b
Slide 32: Appendix
Appendix 32
Slide 33: Profit and loss statement
Profit and loss statement P&L statement Comments In € million FY 2021 FY 20201 1 Compared to FY 2020, net rental income in FY 2021 improved to €346m mainly due to the Net rental income 346 1 293 consolidation of ADLER Real Estate into the Group as per April 2020, partly offset by various disposals t
Slide 34: EBITDA from rental activities and EBITDA Total
EBITDA from rental activities and EBITDA Total EBITDA from rental activities EBITDA Total In € million FY 2021 FY 20201 In € million FY 2021 FY 20201 Net rental income 346 293 Income from rental activities 495 384 Income from facility services and recharged utilities costs 149 91 Income from propert
Slide 35: FFO calculation
FFO 1 and FFO 2 FFO 1 calculation FFO 2 calculation In € million, except per share data FY 2021 FY 20201 In € million, except per share data FY 2021 FY 20201 Net rental income 346 293 EBITDA total 208 1 282 Income from facility services and recharged utilities costs 149 91 Net cash interest (98) (10
Slide 36: Balance sheet
Balance sheet Balance sheet Comments In € million FY 2021 FY 20201 1 The fair values of the build-to-hold project developments and the yielding investment properties show Investment properties including advances 7,116 1 10,111 the impact of the disposal of the northern portfolio to LEG and the recla
Slide 37: EPRA metrics
EPRA metrics EPRA metrics calculation In € million, except per share data FY 2021 FY 20201 EPRA Metrics NAV NRV NTA NDV NAV NRV NTA NDV Total equity attributable to owners of the Company 2,990 2,990 2,990 2,990 4,122 4,122 4,122 4,122 Revaluation of inventories 8 8 8 8 52 52 52 52 Deferred tax 948 9
Slide 38: Net LTV
Net LTV LTV calculation Comments In € million FY 20211 FY 20202 1 The selected financial assets have declined to €745m and contain purchase price Corporate bonds and other loans and borrowings 7,440 7,708 receivables amongst others. They include 1) netted financial receivables (€312m) which were red
Slide 39: Overview of debt KPIs as per FY 2021
Overview of debt KPIs as per FY 2021 Debt KPIs for FY 2021 Sources of funding Unsecured debt 63% Total nominal interest-bearing debt (€m) 7,811 3% Net LTV 50.9%1,2 ICR (x) 2.12 36% Fixed / hedged debt 98.7% Unsecured debt 63.3% 61% Weighted average cost of debt 2.2% Weighted average maturity 4.1 Sec
Slide 40: Covenants overview: Adler Group
Covenants overview: Adler Group All Adler Group covenants are incurrence-based covenants 1 LTV: defined as net debt / total assets (<60%) 2 Secured LTV: defined as secured debt / total assets (<45%) Secured debt In € million In € million FY 2021 Pro forma3 FY 2021 Pro forma3 Pro forma3,4 Consolidate
Slide 41: Covenants overview: Adler Real Estate
Covenants overview: Adler Real Estate All Adler RE covenants are incurrence-based covenants except the ICR which is a maintenance-based covenant 1 LTV: defined as net debt / total assets (<60%) 2 Secured LTV: defined as secured debt / total assets (<40%) Secured debt In € million In € million FY 202
Slide 42: €400m Adler Real Estate 2019/22 bond has been repaid in April
€400m Adler Real Estate 2019/22 bond has been repaid in April Volume (€m) IFRS (€m) Maturity Nominal interest rate Other comments Premature redemption Rate, at which premature redemption is possible Adler Real Estate Bonds (unsecured) 2017/24 300 293 6 Feb 24 2.10% Anytime Under condition of make wh
Slide 43: Capex and maintenance in 2021
Capex and maintenance in 2021 Total CAPEX and maintenance (€m) Maintenance expense (€/sqm) PROCUREMENT Maintenance OPTIMISATION 8.9 CAPEX 8.6 AND INCREASED SCALE 7.2 6.5 6.7 6.3 5.2 165 149 41 132 31 120 2015 2016 2017 2018 2019 2020 2021 34 23 95 CAPEX invested (€/sqm) 26.1 CAPEX DRIVING 24.4 76 31
Slide 44: Build-to-hold projects
Build-to-hold projects Two projects under construction Total Construc. remaining Construc. Building Construc. Land plot Area Land value CAPEX GAV GDV YoC # Project name1,2 City Zoning construc. period permit started (k sqm) (k sqm) (€m) spent (€m) (€m) (%) CAPEX (€m) (€m) Wasserstadt 1 Berlin 2018 -
Slide 45: Upfront sale projects
Upfront sale projects Eleven projects under construction # Project name1 City Construc. period Zoning Building permit Construc. started Land plot (k sqm) Area (k sqm) 1 NewFrankfurt Towers VauVau 2 Offenbach 2018 - 2023 ✓ ✓ ✓ 12 38 Vitopia-Kampus Kampus Kaiserlei PROJECTS SOLD 2 Offenbach 2018 - 202
Slide 46: Forward sale projects
Forward sale projects Five projects under construction Total remaining Construc. Construc. Land plot Area GAV construc. GDV # Project name City Zoning Building permit period started (k sqm) (k sqm) (€m) CAPEX (€m) (€m) 1 Magnolia (Dessauer Str.)1 Leipzig 2019 - 2022 ✓ ✓ ✓ 5 10 38 0 39 Quartier Bunde
Slide 47: Condominium projects
Condominium projects Three projects under construction Total remaining Construc. Construc. Land plot Area GAV construc. GDV # Project name1 City Zoning Building permit period started (k sqm) (k sqm) (€m) CAPEX (€m) (€m) Palatium (Palaisplatz 1 Dresden 2019 - 2022 ✓ ✓ ✓ 2 5 23 1 25 HANDED OVER Altbau
Slide 48: Projects sold, closing pending and projects handed over
Projects sold, closing pending and projects handed over # Project name City Zoning Building permit Construc. started Area (k sqm) 1 Residenz am Ernst-Reuter-Platz1 Berlin ✓ ✓ Completed 11 FORWARD SALE 2 Franklinhaus 2 Berlin ✓ ✓ Completed 12 PROJECTS HANDED 3 MaryAnn Apartments VauVau2 Dresden ✓ ✓ C
Slide 49: Shareholder structure
Shareholder structure Largest shareholders1 Vonovia 20.5% 7.4% Gerda Caner 6.1% 66.0% Aggregate Holdings Free Float Appendix 49 1. Notification of Vonovia as at 26 April 2022, notification of Gerda Caner as at 18 January 2022, notification Aggregate Holdings as at 22 February 2022.
Slide 50: Corporate agenda
Corporate agenda Adler Group S.A. results publication dates 2022 Investor relation contacts Gundolf Moritz 30 April 2022 Publication Annual Report 2021 Head of IR g.moritz@adler-group.com 31 May 2022 Publication Q1 2022 Results 31 August 2022 Publication Q2 2022 Results Julian Mahlert Senior IR Mana
Slide 51: Overview of the composition of the interim Board
Overview of the composition of the interim Board Prof. Dr. A. Stefan Kirsten Chairman Co-founder and CFO of Monarch Thierry Beaudemoulin Chief Executive Officer Member of the Executive board Thilo Schmid Thomas Zinnöcker Director Director Investment Manager Care4 AG Ex-CEO ISTA International Appendi
Slide 52: 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
Slide 53: Supplementary update
Supplementary update 10 May 2022
Slide 54: Audit & Disclaimer of opinion
Audit & Disclaimer of opinion Delivery of financial statements and audit report by KPMG fulfilled the reporting obligations under our bonds Adler Group’s statement on KPMG’s statement (3 May 2022)1 auditor’s opinion ◼ We have been asked by investors to provide further details on our ◼ “KPMG Luxembou
Slide 55: Statement on Adler RE's upstream loan to Adler Group
Statement on Adler RE’s upstream loan to Adler Group Company’s statement ◼ Adler Real Estate Aktiengesellschaft (“Adler RE”) and Adler Group S.A. (“Adler Group”) received significant funds from asset disposals in December 2021. ◼ As a result, Adler RE had substantial cash amounts which would have tr
Slide 56: Major part of proceeds from FY21 project sales have been received
Major part of proceeds from FY21 project sales have been received Additional c.€100m of proceeds expected to be received in the course of 2022 Project disposals - Expected gross proceeds as per FY 2021 (€m)1 Comments 508 • The expected gross proceeds at the end of FY21 amounted to €508m2, of which c
Slide 57: High certainty in project sales
High certainty in project sales On the back of c.€200m signed project sales and c.€300m in exclusivity phase Expected gross sales proceeds between May and December 2022 (€m)1 Comments c.975 • Expected gross proceeds amounting to c.€975m relate to disposals of one yielding asset and eleven developmen
Slide 58: Net proceeds of c.€600m from sale of 14,400 units to KKR/Velero
Net proceeds of c.€600m from sale of 14,400 units to KKR/Velero Total proceeds from sale to Velero/KKR (€m)1 Comments •1 Total expected gross proceeds after debt repayment and other costs amount to c.€723m. The majority of these proceeds has been received as per April 2022, amounting to €687m. The r
Slide 59: Total development CAPEX amounting to c.€350m
Total development CAPEX amounting to c.€350m Of which €155m is committed development CAPEX Expected development CAPEX between May and December 2022 (€m)1 Comments 262 351 • Development CAPEX consist of committed and non-committed development CAPEX. Total development CAPEX in the period May – Decembe
Slide 60: Receivables backed by underlying assets and on track
Receivables backed by underlying assets and on track Overview of financial receivables1 Right of withdrawal / # Description Type Receivables (€m) Security Total selected financial assets per H1 20212 1,034 Gerresheim project retained and potentially sold to LEG in the course of a potential BCP trans
Slide 61: Secured bank debt spread over multiple lenders and time
Secured bank debt spread over multiple lenders and time Diversified maturity schedule and lending base with 23 banks providing secured debt Overview of secured bank debt maturities1,2 (€m) Breakdown per lending bank ◼ The secured bank debt is well spread over 23 lenders3, with the top 10 lenders res
Slide 62: Corporate agenda
Corporate agenda Adler Group S.A. results publication dates 2022 Investor relation contacts Gundolf Moritz 17 May 2022 Update on corporate governance Head of IR g.moritz@adler-group.com 31 May 2022 Publication Q1 2022 Results 29 June 2022 Annual General Meeting Julian Mahlert Senior IR Manager j.mah
Slide 63: 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