Adler Group Sa · XETR:ADJ
Adler Group Sa — FY2020 Earnings Presentation
46 slides from Adler Group Sa's earnings presentation, Mar 31, 2021
Slide 1: Results presentation
Results presentation 31 March 2021
Slide 2: Welcome to the Adler Group
Welcome to the Adler Group Well diversified €11.4bn pan German Adler Group in short Driving future growth residential real estate portfolio Rental units1 EPRA NRV Adler Group is a pure play German residential company with a unique development pipeline, Schleswig-Holstein Mecklenburg- striving to del
Slide 3: Highlights – Fully integrated platform
Adler Group | Full year results 2020 Highlights – Fully integrated platform €293m of NRI realized over 2020, up from €134m in 2019 mainly on the back of the consolidation of ADLER Real Estate as per 9 April 2020 €6.30/sqm/month average residential rent, up from €6.19/sqm/month in 2019 Operationa
Slide 4: Highlights – Proposing dividend of €0.46 per share
Adler Group | Full year results 2020 Highlights – Proposing dividend of €0.46 per share 3.04% weighted average cost of debt as per the end of 2020 on the back of consolidation of Consus Financing and As per today, the weighted average cost of debt has been decreased further to 2.57% and which
Slide 5: Agenda
01. Integration update 02. Operational performance 03. Financing structure 04. Developments 05. ESG targets 06. Guidance 2021 07. Appendix 5 Holsten Quartier, Hamburg
Slide 6: Integration update
Integration update 6
Slide 7: Integration project roadmap
Integration project roadmap The dedicated integration project is well on track to execute a thorough integration Dedicated integration project Phased roadmap Steering Committee (C-Level and IMO) Full Full (bi-)monthly exchange Reporting, project plan, decision needs, risks Time till Service Agreemen
Slide 8: Integration scope and rationale
Integration scope and rationale Delivery of the integrated organisation follows a clear logic – progress is significant Common Vision and Mission elaborated, communicated, Change Management ongoing Vision, Mission Common Values elaborated, communicated, Change Management ongoing Values Joint s
Slide 9: Synergy realization beats guidance: €113m realized
Synergy realization beats guidance: €113m realized Achievements Run-rate synergies (€m) During 2020 we have met and significantly Operational synergies Financial synergies outperformed on all synergy targets on the back of higher financing volume at lower financing costs and 179.0 will continue to w
Slide 10: Operational performance
Operational performance 10
Slide 11: Operational highlights, portfolio optimization ongoing
Operational highlights, portfolio optimization ongoing ✓ ✓ ✓ ✓ Successful sale of Operational efficiency Further rent increase Value uplift non-core assets improvements ✓ We successfully sold c. 5,000 units with a ✓ Active capital recycling has resulted in a ✓ The portfolio outside Berlin continues
Slide 12: Fair value and quality continues to increase
Fair value and quality continues to increase Development of GAV (€m) Development of number of units Development of fair value (€/sqm) 10,000 90,000 2,000 1,887 9,039 81,807 9,000 8,551 80,000 1,800 8,313 75,721 1,635 8,000 69,722 1,600 1,553 70,000 68,149 66,362 1,452 63,957 7,000 1,400 6,325 60,000
Slide 13: Positive trend in average monthly rents
Positive trend in average monthly rents Residential average rent (€/sqm/m) LfL residential rental growth FY 2020 Residential portfolio vacancy rate 7.0 5.0% 9.0% 6.19 6.30 8.0% 6.02 8.0% 6.0 3.9% 5.60 4.0% 5.35 5.13 7.0% 5.0 3.0% 6.0% 5.7% 5.0% 4.0 2.2% 5.0% 4.3% 2.0% 4.0% 3.0 4.0% 3.4% 1.0% 3.0% 2.
Slide 14: Investments in the rental portfolio continue
Investments in the rental portfolio continue Total CAPEX and Maintenance (€m) Maintenance expense (€/sqm) 8.9 8.6 7.2 6.5 6.7 6.3 40.8 30.5 34.4 2015 2016 2017 2018 2019 2020 31.3 CAPEX invested (€/sqm) 124.3 26.1 34.4 118.4 24.4 97.7 18.9 26.6 14.7 63.5 10.8 42.0 5.8 23.6 2015 2016 2017 2018 2019 2
Slide 15: Vacancy reduction and rent increase ongoing
Vacancy reduction and rent increase ongoing 17% without Berlin rent freeze 2020 Avg. Fair Value Fair Value Lettable area NRI Rental yield Vacancy Vacancy NRI Reversionary Location Units Rent €m 2020 €/sqm 2020 sqm €m 2020 (in-place rent) 2020 Δ YoY Δ YoY LFL potential €/sqm/month Berlin 4,461 3,248
Slide 16: Financing structure
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Slide 17: Successfully refinanced more than €3.5bn crystallizing financial synergies
Successfully refinanced more than €3.5bn crystallizing extensive financial synergies until 31 March 2021 ✓ ✓ ✓ ✓ Secured financing Financing and Refinancing of Rights issue and extended mezzanine debt and & Bond placement LTV maturities synergy generation ✓ Completion of €457m rights issue with ✓ Su
Slide 18: Significant improvement of the debt profile
Significant improvement of the debt profile WACD reduction from 3.7% (July 20) to 2.6% (March 21) and increased WAM from ∼3.0 yrs to 4.3 yrs at the same time Blended interest Blended debt Blended Blended debt Debt raised in 2020 Amount Debt repayments in 2020 Amount rate (%) maturity (yrs) interest
Slide 19: Potential to further improve financial KPIs
Potential to further improve financial KPIs The group anticipates a further strengthening of the capital structure as well as improvements of the average cost of debt and the average maturity Excludes future expected Net loan to value Weighted average cost of debt Interest coverage ratio operational
Slide 20: Further optimisation of the capital structure
Further optimisation of the capital structure Debt maturity schedule (€m) Debt KPIs Sources of funding (Pro-forma) FY 2020 Total interest-bearing net debt (FY20, €m) 7,594 Unsecured 2,500 Undrawn facilities (€m) 100 4% (54.5%) 2,000 1,704 Total interest-bearing net debt (PF21, €m) 7,806 1,533 1,500
Slide 21: Developments
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Slide 22: Enhanced focus on top cities and newly built flats
Enhanced focus on top 7 cities and newly built flats The portfolio today – Berlin anchored The portfolio in the future1 Other Geographical split 25.0% Other Berlin 39.4% 39.0% 53.7% Berlin 6.9% 36.0% Top 7 Top 7 16.0% Sector split 11.0% GAV GAV €11.4bn €13bn 73.0% 100.0% Residential rental portfolio
Slide 23: Pipeline with €4.7bn worth of future rental product
Pipeline with €4.7bn worth of future rental product Projects under build to hold strategy Total GDV = €4.7bn Portfolio overview Construction Area Yield on # Project Name City GAV (€m) Period (k sqm) cost2 (%) Hamburg 1 Schwabenlandtower (Residential)1 Stuttgart 2019 - 2022 11.5 46.1 3.9% 2 2 Grafent
Slide 24: Expected completions for build to hold projects
Expected completions for build to hold projects Annual overview of envisaged CAPEX for the build to hold development projects (€m) Envisaged capex Annual CAPEX as % of GAV1 464 449 Avg. 414 €347m CAPEX 336 327 pa 90 2021 2022 2023 2024 2025 2026 0.8% 2.8% 3.6% 4.0% 3.9% 2.9% CAPEX is expected to be
Slide 25: Build to hold project overview (I)
Build to hold project overview (I) BENRATHER GÄRTEN - DÜSSELDORF GRAND CENTRAL - DÜSSELDORF Address: Hildener Street 80, 40597 Dusseldorf Address: Erkrather Street 33, 40233 Dusseldorf KEY FACTS TIMELINE KEY FACTS TIMELINE Main use: Residential and commercial ‘19-‘23 Development planning process Mai
Slide 26: Build to hold project overview (II)
Build to hold project overview (II) VAI CAMPUS - STUTTGART HOLSTEN QUARTIERE – HAMBURG Address: Pascalstrasse 100, 70569 Stuttgart Address: Haubachstrasse 91, 22765 Hamburg KEY FACTS TIMELINE KEY FACTS TIMELINE Main use: Residential ‘17-‘22 Development planning process Main use: Residential and comm
Slide 27: Build to hold project overview (III)
Build to hold project overview (III) OSTEND QUARTIER - FRANKFURT Address: Danziger Platz 12, 60314 Frankfurt am Main KEY FACTS TIMELINE Main use: Residential and commercial ‘16-‘23 Development planning process Strategy: Build to hold ‘21 Zoning plan Status: Working on zoning plan ‘23 Building permit
Slide 28: ESG targets
GROUP FIADLER FIADLER GROUP
Slide 29: ESG has a high priority for Adler
ESG has a high priority for Adler ESG excellence is a key strategic pillar ESG ambitions in the context of new group setup Upgrade of ESG Value enhancement transparency More future Per m2 ✓ Close the gaps regarding missing and ✓ Continued improvement of value-relevant relevant ESG data ESG aspects ✓
Slide 30: Impact on Sustainable Development Goals
Impact on Sustainable Development Goals Eight of the UN Sustainable Development Goals were selected Our impact: Our impact: Our impact: Our impact: Preserve and Equal treatment of Renewal of Predominantly promote no women and men, heating systems, open-ended health endangering equal pay for switchin
Slide 31: Guidance 2021
Guidance 2021 31
Slide 32: Setting the goals for 2021 – Guidance
Setting the goals for 2021 – Guidance Objectives 2021 Key Takeaways • The acquisition of ADLER Real Estate has been 2021 Guidance successfully completed and Consus has been consolidated Net rental income (€m) €325-339m • Synergies realized at the end of the year have beaten the guidance by c€21m and
Slide 33: Guidance - Net rental income for FY21E of €325-339m
Guidance - Net rental income for FY21E of €325-339m NRI in the range of €325-339m for existing portfolio for 2021E Legend 325-339 1 First full year effect from the various disposals throughout 2020 2 The COVID pandemic does not impact NRI in 21E 3 The Mietendeckel became fully effective as of Novemb
Slide 34: Guidance – FFO 1 for FY21E of €127-133m
Guidance – FFO 1 for FY21E of €127-133m FFO 1 in the range of €127-133m for existing portfolio for 2021E Legend 127-133 1 First full year effect from the various disposals throughout 2020 2 The COVID pandemic does not impact FFO 1 in 21E 3 The Mietendeckel became fully effective as of November, 107
Slide 35: Appendix
GROUP FIADLER Appendix
Slide 36: FFO 1 and FFO 2
FFO 1 and FFO 2 FFO 1 calculation FFO 2 calculation In € thousand, except per share data FY 2020 FY 2019 In € thousand, except per share data FY 2020 FY 2019 Net rental income 293 134 EBITDA total 247 2 96 Income from facility services and recharged utilities 91 7 Net cash interest -102 3 -27 costs
Slide 37: Balance sheet
Balance sheet Balance sheet Comments In € thousand FY 2020 FY 2019 Investment properties including advances 10,109 1 3,631 1 The fair value of the portfolio was assessed by CBRE & NAI Apollo Other non-current assets 1,841 2 301 and shows the impact of positive revaluation of the combined group Non-c
Slide 38: EPRA NAV metrics
EPRA NAV metrics EPRA NAV metrics calculation In € thousand, except per share data FY 2020 FY 2019 EPRA Measure NAV NRV NTA NDV NAV NRV NTA NDV Total equity attributable to owners of the Company 1 4,146 4,146 4,146 4,146 2,647 2,647 2,647 2,647 Revaluation of inventories 52 52 52 52 13 13 13 13 Defe
Slide 39: Net LTV
Net LTV LTV calculation Comments 1 On the back of the combined consolidation of both ADLER RE and Consus into the In € thousand FY 2020 FY 2019 group, the associated debt has increased in line with the increased size of the Corporate bonds, other loans and borrowings and portfolio. 7,653 1 1,223 oth
Slide 40: Composition of the Board of Directors
Composition of the Board of Directors Dr. Peter Maser Maximilian Rienecker Thierry Beaudemoulin Arzu Akkemik Chairman Executive Director Executive Director Director German, born in 1961 German, born in 1985 French, born in 1971 Turkish, born in 1968 Partner Deloitte Co-CEO Adler Group Co-CEO Adler G
Slide 41: Experienced management team with a real estate track record
Experienced management team with a real estate track record Maximilian Rienecker Thierry Beaudemoulin Co-Chief Executive Co-Chief Executive Officer Officer Sven-Christian Frank Jürgen Kutz Theodorus Gorens Chief Legal Officer Group Development Group Integration Carsten Wolff Thorsten Arsan Michael G
Slide 42: Market outlook
Market outlook 42 Holsten Quartier, Hamburg
Slide 43: Economic trends
Economic trends GDP of Germany vs. European Unemployment rate Perceived burden of total housing peers costs2 110 50 100 104 COVID-19 49 90 4.3 3.9 3.5 3.2 3.0 4.0 102 48 80 105 47 46.5 46.5 70 100 46.2 46 45.8 59 58 57 58 57 45.3 60 45.0 98 100 45 50 44 43.6 44.1 44.7 45.1 44.7 96 40 29 30 29 31 3 3
Slide 44: Demographic trends
Demographic trends Population growth forecasts (m) Household size index development Development of households (m) 90 120 44 89 Projection Projection 19.3 22.8 26.0 26.3 27.4 115 88 43 87 110 43 86 105 85 42 84 100 83 95 42 82 81 90 41 80 85 79 41 0 0 40 2020 2030 2040 2050 2060 2015 2020 2025 2030 2
Slide 45: Demographic trends
Demographic trends Average rental prices (€/sqm) Housing stock Average GIY (lhs) versus HPI (rhs) 16 43.5 12 6.2% 140 15 10.5 11.0 11.4 11.5 12.7 11 43.0 120 14 42.5 10 42.5 100 13 +4.1% 42.2 9 42.0 12 42.0 8 41.7 80 41.4 41.4 41.5 7 11 41.5 41.3 6 60 10 41.0 41.0 40.8 5 9 40 40.5 4 8 3 20 0 0.0 0 0
Slide 46: 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