Instone Real Estate Group Se · XETR:INS
Instone Real Estate — Q2 2023 Earnings Presentation
34 slides from Instone Real Estate's earnings presentation, Aug 10, 2023
Slide 1: Results Presentation Q2 2023
Results Presentation Q2 2023
Slide 2: Disclaimer
Disclaimer 2 | 10.08.2023 | Q2-2023
Slide 3: Highlights
INSTONE REAL ESTATE Highlights
Slide 4: Highlights
Highlights Modest improvement in B2C business from low level; high margins maintained ✓ Sales: Retail demand shows modest improvement, institutional buyers in ‘wait and see’ mode, ✓ No market recovery in institutional business before beginning of 2024 expected Operational ✓ Construction costs: Mater
Slide 5: Sales ratio: Moderate improvement from depressed levels
Sales ratio: Moderate improvement from depressed levels Sales ratio1 In % Influenced Long term Instone sales ratio Sales ratio 5.0 by bloc sale 4.6 4.6 4.4 4.5 4.2 4.2 4.2 Pull- forward 4.0 3.8 3.7 3.6 3.6 effects in Leipzig 3.4 3.5 3.5 3.5 3.5 project due to 3.4 3.4 3.5 3.2 3.3 3.3 3.3 3.3 3.3 3.3
Slide 6: New build prices slightly decreasing; CPI growth receding
New build prices slightly decreasing; CPI growth receding House price inflation1 Construction price inflation2 In % In % y-o-y q-o-q y-o-y q-o-q 9.1% 8.7% 7.4% 7.5% 7.5% 7.6% 17.6 16.516.9 7.3% 7.2% 20.0 6.7% 6.4% 15.1 14.4 14.3 12.6 15.0 4.8% 3.2% 8.8 10.0 6.4 4.8 4.7 4.1 0.7% 3.8 3.4 3.0 3.1 2.8%
Slide 7: Price development: yield expansion partly compensated by further accelerating rent growth
Price development: yield expansion partly compensated by further accelerating rent growth House price sensitivity: price impact in different scenarios1 New-build rent development2 - accelerating positive momentum In % y-o-y Rent Yield / Rent Multiple 4.0% 3.8% 3.7% 3.6% 3.4% 3.3% 3.2% 3.1% 25x 26x 2
Slide 8: Under and pre-construction projects de-risked as 90% pre-sold
Under and pre-construction projects de-risked as 90% pre-sold Project portfolio as of 30/06/2023 by development (GDV) Pre sale: €4.0bn Under construction: €3.1bn t/o sold €2.8bn ✓ Projects with GDV of €3.2bn are in “pre- t/o unsold Total GDV construction” or “under construction” of which 90% €7.2bn
Slide 9: Q2 2023 Financial Performance & Outlook
Q2 2023 Financial Performance & Outlook
Slide 10: Adjusted Results of Operations
Adjusted Results of Operations High profitability maintained – On track to reach FY targets €m Q2 2023 Q2 2022 Change H1 2023 H1 2022 Change Revenues 156.0 149.5 4.4% 279.5 268.0 4.3% ✓ Majority of revenues is based on pre-sold units Project cost -117.6 -115.9 1.5% -207.3 -199.2 4.1% Gross profit 38
Slide 11: Bulk of 2023 adjusted revenues target already logged in
Bulk of 2023 adjusted revenues target already logged in Concluded sales contracts – expected development in 2023 Adj. revenues – expected development in 2023 In €m In €m >150 600-700 Retail sales Institutional sales 18 156 53 123 Q1 23 Q2 23 H2 23e FY 23e Q1 23 Q2 23 H2based H2 constron H2 based H2
Slide 12: Rock solid balance sheet maintained
Rock solid balance sheet maintained €m 30/06/2023 31/03/2023 31/12/2022 Corporate debt 200.9 Project debt1 334.7 ✓ Improved balance sheet ratios in Q2 Financial debt1 535.6 511.5 520.6 Cash and cash equivalents and term deposits1 -213.6 ✓ Moderate 24.2% LTC Net financial debt1 322.0 351.3 265.1 ✓ So
Slide 13: Financially strong position
Financially strong position t/o t/o Cash Flow (€m) Q2 2023 Q2 2022 H1 2023 H1 2022 Liquidity (€m) Total drawn available EBITDA adj. 28.8 20.1 45.8 38.3 Corporate debt Other non-cash items -5.5 -2.7 -6.8 -9.0 Promissory notes 170.5 - - Taxes paid -2.0 -0.5 -3.3 -0.9 Revolving Credit Facilities 170.0
Slide 14: Balanced maturity profile without major short-term maturities
Balanced maturity profile without major short-term maturities Maturity profile (corporate debt) as of 30/06/2023 Secured/unsecured as of 30/06/2023 In €m Project debt, secured Corporate debt 100.0 31.6% 50.0 30.0 Total: €619m 15.5 0.0 68.4% 2023 2024 2025 2026 2027 Weighted average corporate debt ma
Slide 15: Outlook 2023: on track for full year targets
Outlook 2023: on track for full year targets €m Forecast 2023 Key assumptions: Revenues (adjusted) 600-700 ✓ No significant institutional sales included in 2023 guidance Gross profit margin (adjusted) ~25% ✓ Expect mid-single digit construction price inflation EAT (adjusted) 40-50 Volume of conclude
Slide 16: Appendix
INSTONE REAL ESTATE Appendix
Slide 17: Project portfolio key figures
Project portfolio key figures €m Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Volume of sales contracts 18.4 52.7 42.0 104.6 58.0 87.6 761.7 170.7 89.1 Project Portfolio 7,182.6 7,600.4 7,668.8 7,827.4 7,727.4 7,567.7 7,500.0 7,154.9 6,268.1 thereof already sold 2,868.8 2,
Slide 18: Diversified project portfolio across most attractive German regions
Diversified project portfolio across most attractive German regions Project portfolio as of 30/06/2023 by region (GDV) In % Berlin Munich Hamburg 2.1 4.0 4.5 Frankfurt ✓ 49 projects / 15,148 units Leipzig 33.0 4.6 ✓ 88% in metropolitan regions Stuttgart 7.8 ✓ ~77 average sqm / unit Total: €7.2bn ✓ ~
Slide 19: Significant pipeline allows opportunistic investment strategy
Significant pipeline allows opportunistic investment strategy Project portfolio development (GDV) In €m 2 12/2022 Completed Updated 06/2023 projects project assessment 1 1 incl. first time consolidation of one project as “at-equity” as well as changed sales strategy to land sale in two projects 19 |
Slide 20: Expected future cash flows suggest significant upside
Expected future cash flows suggest significant upside1 Fundamental Instone value rests on three distinct pillars (As of 30 June 2023; in EUR million) Pre-sold projects - c.€3.1bn currently under construction De-risked free cash flow from projects under construction1 c.550m - t/o c.€2.8bn pre-sold (9
Slide 21: Substantial cash return to shareholders
Substantial cash return to shareholders Share Buyback SBB I SBB II Total No. of shares1 2,349,416 1,349,417 3,698,833 ✓ Share buy back completed; used full existing authorisation Percentage of share capital (%) 5.00 2.87 7.87 Volume (€ million) 25.4 11.4 36.9 ✓ Two consecutive programmes: 18 March 2
Slide 22: Status of building rights
Status of building rights Project portfolio as of 30/06/2023 by building right status (GDV) Master plan ~81% Building permit granted granted 62.5% Building permit application filed ~7% ~12% Building permit application in Master plan in preparation progress 13.9% 13.9% Master plan in preparation 23.6
Slide 23: Project portfolio as of 30/06/2023
Project portfolio as of 30/06/2023 (projects > €30m sales volume, representing total: ~ €7.2bn) Sales volume Land plot Building right Sales Construction Project Location (expected) acquired obtained started started Hamburg SE - Kösliner Weg Norderstedt-Garstedt 104 Mio. € H - Sportplatz Bult Hannove
Slide 24: Project portfolio as of 30/06/2023
Project portfolio as of 30/06/2023 (projects > €30m sales volume, representing total: ~ €7.2bn) Sales volume Land plot Building right Sales Construction Project Location (expected) acquired obtained started started Rhine-Main WI - Delkenheim Wiesbaden 114 Mio. € F - Schönhof-Viertel Frankfurt am Mai
Slide 25: Project portfolio as of 30/06/2023
Project portfolio as of 30/06/2023 (projects > €30m sales volume, representing total: ~ €7.2bn) Sales volume Land plot Building right Sales Construction Project Location (expected) acquired obtained started started Baden-Wurttemberg S - City-Prag Stuttgart 135 Mio. € WN - Schorndorf Schorndorf N/A T
Slide 26: No major impact from new subsidy scheme expected
No major impact from new subsidy scheme expected The German government plans to invest >1bn p.a. to support owner-occupiers (help-to-buy) and new build of rental apartments • Name: “Wohneigentum für Familien” = homes for families • Name: “Klimafreundlicher Neubau” = climate friendly new-build Progra
Slide 27: 2022 ESG achievements and disclosures
2022 ESG achievements and disclosures • EU Taxonomy related disclosure • 96.5% of Instone 2022 revenues are eligible for EU taxonomy assessment • 86.7% of Instone 2022 revenues are EU taxonomy aligned • 94.2% of individual buildings contributing to Instone 2022 revenues are taxonomy aligned • Scope
Slide 28: ESG: Top rating underscores commitment to industry leadership
ESG: Top rating underscores commitment to industry leadership ✓ INS among the top 3% of the 288 global real estate development companies ✓ Top 5% across all sectors 28 | 10.08.2023 | Q2-2023
Slide 29: Major ESG-KPIs – achievements and targets
Major ESG-KPIs – achievements and targets Major KPIs 2021 2022 Targets Taxonomy-compliant revenues (in %) n/a 86.7 Predominantly taxonomy-compliant Share of projects/objects with energy requirements at least NZEB - ~82.5% ~97.4% 100% of project/object portfolio in 2030 10%1 GHG emissions / scope 1 a
Slide 30: 87% of revenues are compliant with EU Taxonomy
87% of revenues are compliant with EU Taxonomy Proportion Climate Climate Absolute revenue of total change change • Instone reports according to Art. 8 of the Taxonomy revenues mitigation adaptation Ordinance on non-financial reporting according to the A. Taxonomy-eligible activities NFRD/HGB for th
Slide 31: Clear pathway to reduce GHG emissions scope 1 to 3
Clear pathway to reduce GHG emissions scope 1 to 3 Projected versus actual climate targets Scope 3 emissions target curve based on SBTi4 CO2e in t €m kgCO2e/m2 Total Gesamt Upstream Vorgelagert Downstream Nachgelagert To 2030: at least -42% in line with the 3,000 SBTI -1.5°C scenario: 2,500 1.5°C pa
Slide 32: Instone share
Instone share Basic data Shareholder structure (August 2023) • ISIN: DE000A2NBX80 • Ticker symbol: INS Activum 25.95% • No of shares: 46,988,336 • Market cap 1: €305.4m • Average daily trading volume: €0.42m • Market segment: Prime Standard, Frankfurt Others 48.05% DAMAC Properties 10.04% Ranger Glo
Slide 33: Financial calendar
Financial calendar 2023 August 10 Group Interim Report for the first half of 2023 September 05 Commerzbank and ODDO BHF Corporate Conference, Frankfurt September 14 Roadshow UK, London, Deutsche Bank September 18 Berenberg and Goldman Sachs 12th German Corporate Conference, Munich September 19 Baade
Slide 34: Investor Relations Contacts
Investor Relations Contacts Burkhard Sawazki Head of Business Development & Communication T +49 201 45355-137 M +49 173 2606034 burkhard.sawazki@instone.de Simone Cujai Tania Hanson Senior Investor Relations Manager Roadshows & Investor Events T +49 201 45355-428 T +49 201 45355-311 M +49 162 803579
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