Deutsche Wohnen Se · XETR:DWNI
Deutsche Wohnen — H1 2019 Earnings Presentation
39 slides from Deutsche Wohnen's earnings presentation, Aug 13, 2019
Slide 1: Deutsche Wohnen SE H1 2019 results
Deutsche Wohnen SE H1 2019 results Conference Call 13 August 2019
Slide 2: Agenda
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Agenda 01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Deutsche Wohnen 2
Slide 3: Highlights H1 2019
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Highlights H1 2019 Strong operational business ▪ L-f-l growth at 3.4% for the total portfolio, 3.6% in Berlin ▪ Adj. EBITDA margin (excl. disposal and accounting effects) increased 2pp yoy ▪ FFO I per share growth of 13% to EUR 0.79 Upd
Slide 4: Political and regulatory environment
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Political and regulatory environment 18 June 2019 Until 13 September 2019 January 2020 Berlin senate agrees Consultation of experts and associations Implementation Rental freeze – on cornerstones for 5y rent freeze current situation / m
Slide 5: Stable like-for-like rental growth
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Stable like-for-like rental growth 1 1 Like-for-like Residential In-place rent In-place rent Change Vacancy Vacancy Change 30/06/2019 units 30/06/2019 30/06/2018 (y-o-y) 30/06/2019 30/06/2018 (y-o-y) (#) (EUR/sqm) (EUR/sqm) (in %) (in %
Slide 6: Continued strong fundamentals
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Continued strong fundamentals Regions Residential FV FV FV Multiple Change Multiple Change in Reversionary 1) units 30/06/2019 30/06/2019 31/12/2018 in-place rent in-place re-letting rent re-letting potential in (#) (EUR m) (EUR/sqm) (E
Slide 7: Strong letting business, rental income up 6%
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Strong letting business, rental income up 6% in EUR m H1-2019 H1-2018 Refurbishment & Maintenance per sqm (annualized) Income from rents (rental income) 411.1 387.3 28.66 41.05 33.70 up to ~40 Income relating to utility/ ancillary costs
Slide 8: Disposal business delivers attractive margins
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Disposal business delivers attractive margins Disposals Privatization Institutional sales Total with closing in H1-2019 H1-2018 H1-2019 H1-2018 H1-2019 H1-2018 No. of units 184 179 436 322 620 501 Proceeds (EUR m) 60.0 34.4 44.3 26.2 10
Slide 9: Stable EBITDA contribution from Nursing and Assisted Living
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Stable EBITDA contribution from Nursing and Assisted Living Operations (in EUR m) H1-2019 H1-2018 Total income 112.0 47.9 in EUR m H1-2019 H1-2018 Total expenses (102.9) (44.9) Nursing & Assisted Living 102.9 41.7 EBITDA operations 9.1
Slide 10: Robust growth of EBITDA margin to 82%
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Robust growth of EBITDA margin to 82% in EUR m H1-2019 H1-2018 Development of cost ratio1 Earnings from Residential Property Management 365.1 331.3 11.5% Earnings from Disposals 23.6 9.0 11.1% Earnings from Nursing and Assisted Living 4
Slide 11: FFO I per share growth of 13% yoy to EUR 0.79
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix FFO I per share growth of 13% yoy to EUR 0.79 in EUR m H1-2019 H1-2018 EBITDA (adjusted) 389.1 326.7 FFO I margin development1 Earnings from Disposals (23.6) (9.0) 67.9% 66.3% Corporate expenses for disposals 1.6 1.3 63.4% 61.0% 61.0% F
Slide 12: EPRA NAV per share increased by 3% in H1-2019
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix EPRA NAV per share increased by 3% in H1-2019 in EUR m 30/06/2019 31/12/2018 EPRA NAV per share (undiluted) in EUR Equity (before non-controlling interests) 11,770.3 11,559.1 +5% +13% +3% Fair values of derivative financial instruments
Slide 13: Conservative long-term capital structure
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Conservative long-term capital structure Rating A- / A3; stable outlook ▪ Successful refinancing of EUR 221m corporate bond (notional EUR 500m) and approximately EUR 200m forward interest rate hedges Ø maturity ~ 7.9 years ▪ Successful
Slide 14: Guidance 2019 unchanged
01 Highlights 02 Market and Portfolio 03 Financials 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 0.97 Dividend per share 0.
Slide 15: Appendix
Appendix
Slide 16: Portfolio and financials
Portfolio and financials
Slide 17: Dynamic transaction market
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Dynamic transaction market Transaction volume in German Residential (EUR bn)1 Development of rents in Berlin (EUR/sqm/month)2 Volume in bn Units sold +2% +9% +5% 30 400.000 10.34 10.56 361.000 9.83 9 25 300.000 2016 2017 2018 H1 2019 20
Slide 18: Dynamic transaction market
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Dynamic transaction market Development of asking prices (condominiums) Development of asking prices Development of asking rents (EUR/sqm/month) (multi family homes) DW Greater Berlin DW Greater Berlin DW Greater Berlin (book value) 2,45
Slide 19: Re-letting rents continue to outpace in-place rents
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Re-letting rents continue to outpace in-place rents Rent development in Greater Berlin Development of multiples in Greater Berlin1 29.9x 29.8x 10.34 10.56 9.83 27.1x 9.00 9.08 9.09 7.9x 8.53 23.7x 8.47 spread 34% 22.0x 21.7x 7.60 revers
Slide 20: Spread between in-place and re-letting rent multiples
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Spread between in-place and re-letting rent multiples Regions Residential units FV FV Multiple Multiple Multiple Fair Value (#) 30/06/2019 30/06/2019 in-place rent re-letting rent in-place rent 31/12/2018 (EUR m) (EUR/ sqm) 30/06/2019 3
Slide 21: Like-for-like development as of 30 June 2019
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Like-for-like development as of 30 June 2019 2 2 Like-for-like Residential In-place rent In-place rent Change Vacancy Vacancy Change 30/06/2019 units 30/06/2019 30/06/2018 (y-o-y) 30/06/2019 30/06/2018 (y-o-y) (#) (EUR/ sqm) (EUR/ sqm)
Slide 22: Bridge from adjusted EBITDA to profit
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Bridge from adjusted EBITDA to profit in EUR m H1-2019 H1-2018 EBITDA (adjusted) 389.1 326.7 Increase in depreciation mainly because of adjusted accounting Depreciation (19.7) (4.0) effects of leasing contracts as well as depreciation o
Slide 23: Investments into the portfolio
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Investments into the portfolio H1-2019 H1-2018 Refurbishment & Maintenance per sqm (annualized) EUR / EUR / up to EUR m EUR m 28.66 41.05 33.70 ~40 sqm1 sqm1 Maintenance (expensed 42.4 8.20 44.0 8.76 through p&l) 30.91 ~30 25.50 19.90 R
Slide 24: Summary balance sheet
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Summary balance sheet Assets Equity and Liabilities in EUR m 30/06/2019 31/12/2018 in EUR m 30/06/2019 31/12/2018 Investment properties 24,523.0 23,781.7 Total equity 12,129.2 11,908.1 Other non-current assets 446.2 291.2 Financial liab
Slide 25: Strong generation of total shareholder return
01 Highlights 02 Market and Portfolio 03 Financials 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% 35.74 +23%
Slide 26: Deutsche Wohnen's residential portfolio is best-in-class
01 Highlights 02 Market and Portfolio 03 Financials 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, Berlin deutsche
Slide 27: Portfolio structure – characteristics meeting strong demand
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Portfolio structure – characteristics meeting strong demand Apartment size (Ø 60 sqm) Year of construction Rental restrictions In-place rent (expiring over time) (Ø EUR 6.75/ sqm/ month)1 30.0% 29.8% 28.6% 27.8% 11% ~9% 18% 18.6% 18.0%
Slide 28: Development of Berlin rent index
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Development of Berlin rent index 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 5.00 5.21 5% 5.4% 4.50 4.75 4.83 4% 4.49 3% 4.0
Slide 29: The Berlin portfolio at a glance
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix The Berlin portfolio at a glance Pankow Reinickendorf # 9,957 | 2.9% # 9,743 | 1.0% EUR 7.42 | EUR 3,138 EUR 6.80 | EUR 2,359 Lichtenberg Mitte # 8,803 | 1.0% # 4,599 | 1.7% EUR 6.72 | EUR 2,528 EUR 7.22 | EUR 2,820 Friedrichshain- Kreu
Slide 30: CSR at Deutsche Wohnen
CSR at Deutsche Wohnen
Slide 31: Strategic sustainability programme (1/2)
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Strategic sustainability programme (1/2) Strategic targets Examples of operationalized targets & achievements ▪ Integration of long-term sustainability targets as component of the remuneration system for the Management Board and executi
Slide 32: Strategic sustainability programme (2/2)
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Strategic sustainability programme (2/2) Strategic targets Examples of operationalized targets & achievements ▪ Combination of measures to permanently avoid CO2 emissions by sourcing green power, operating PV systems and CHP plants → Fo
Slide 33: Deutsche Wohnen provides affordable housing
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Deutsche Wohnen provides affordable housing Distribution of rent levels Appartment size Affordability of average Deutsche Wohnen flat in Berlin DW in-place DW re-letting In-place rent Market rent1 Apartment size (Ø 60 sqm) rent rent (Ø
Slide 34: A socially reliable landlord who goes beyond legal requirements
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Deutsche Wohnen - a socially reliable landlord who goes beyond legal requirements Letting flats means taking responsibility Our promise to our tenants ▪ Investments in our properties should not be at the ▪ to increase rents after modern
Slide 35: Environment & climate
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Environment & climate ▪ In Germany rented units account for ~ 40% of final energy consumption and are responsible for 1/3 of the carbon emissions → Key role of housing industry to achieve national climate targets Achievements Targets ▪
Slide 36: Energy intensity of our properties better than German average
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Energy intensity of our properties better than German average Energy efficiency classes based on final energy needs (kWh/sqm p.a.) in % of our portfolio ~ 60% above Ø energy efficiency performance Ø 132.3 kWh/sqm ▪ 60% of our units perf
Slide 37: Energy efficiency consistently improved to 132.3 kWh/sqm p.a.
01 Highlights 02 Market and Portfolio 03 Financials 04 Appendix Energy efficiency consistently improved to 132.3 kWh/sqm p.a. Development of energy efficiency in our portfolio (in kWh/sqm) ▪ Energy efficiency improved from 139.1 kWh/sqm p.a. (2015) to 139.1 132.3 kWh/sqm p.a. (2018) ▪ 3,750 units wi
Slide 38: 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
Slide 39: 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