Deutsche Wohnen Se · XETR:DWNI
Deutsche Wohnen — 9M 2012 Earnings Presentation
43 slides from Deutsche Wohnen's earnings presentation, Nov 12, 2012
Slide 1: Deutsche Wohnen AG 9m 2012 results
Deutsche Wohnen AG » 9m 2012 results Conference Call, 12 November 2012 1 1
Slide 2: Agenda
» Agenda 1 Key figures 9m 2012 2 Development of business segments 3 Financial performance and position 4 Updated guidance 2012 5 Status on integration BauBeCon 6 Background on EGM on 4 December 2012 7 Q&A 2
Slide 3: Key figures 9m 2012
. ) a Deutsche Wohnen » Key figures 9m 2012 deutsche-wohnen.com
Slide 4: Key figures 9m 2012 at a glance
» Key figures 9m 2012 at a glance • Strategic core and growth regions (letting portfolio) • In-place rent: 5.63 EUR/sqm like-for-like: + 2.5% • Vacancy: 1.8% Performance • Core+ regions (letting portfolio) • In-place rent 5.84 EUR/sqm like-for-like: + 3.0% (y-o-y) • New-letting rent 1): 7.14 EUR/sqm
Slide 5: Development of business segments
» Development of business segments 5
Slide 6: 95% of total Fair Value is located in strategic core and growth regions
» 95% of total Fair Value is located in strategic core and growth regions Residential Share in Area Fair Share in Fair Multiple Multiple Residential units terms of Value terms of Value in-place market units Fair Value rent rent # % k sqm EUR m % EUR/sqm Total 73,164 100% 4,474 4,204 100% 914 13.8 12
Slide 7: 70% of total Fair Value is located in core+ regions: our 'stars'
» 70% of total Fair Value is located in core+ regions: our ‘stars’ Residential Share in Fair Share in Fair Multiple Multiple Residential units terms of Value terms of Value in-place market units Fair Value rent rent # % EUR m EUR/sqm + Core 46,228 63% 2,926 70% 1,030 14.9 12.5 Letting portfolio 42,7
Slide 8: 25% of total Fair Value is located in core regions: our 'cash cows'
» 25% of total Fair Value is located in core regions: our ‘cash cows’ Residential Share in Fair Share in Fair Multiple Multiple Residential units terms of Value terms of Value in-place market units Fair Value rent rent # % EUR m EUR/sqm Core 21,796 30% 1,088 25% 766 12.2 11.5 Letting portfolio 19,32
Slide 9: Only 5% of total Fair Value is located in non-core regions
» Only 5% of total Fair Value is located in non-core regions Residential Share in Fair Share in Fair Multiple Multiple Residential units terms of Value terms of Value in-place market units Fair Value rent rent # % EUR m EUR/sqm Non-core 5,140 7% 190 5% 558 10.0 9.3 Disposal 2,397 3% Other 2,743 4% N
Slide 10: Compelling like-for-like rental growth in our core+ regions
» Compelling like-for-like rental growth in our core+ regions In-place rent (like-for-like) and vacancy (like-for-like) Residential In-place rent 1) Vacancy ∆ in % (like-for-like) units EUR/sqm in % 30/09/2012 30/09/2011 y-o-y 30/09/2012 30/09/2011 Strategic core and growth regions 40,140 5.73 5.59
Slide 11: Focused and sustainable investments in our core+ & core regions
» Focused and sustainable investments in our core+ & core regions Maintenance and modernisation 9m/2012 9m/2011 Signed rent increases in 9m/2012 with a EUR m EUR/sqm EUR m EUR/sqm full year effect of EUR 4.3m thereof Maintenance 21.0 8.59 20.1 8.95 EUR 2.5m result from reletting/ Ongoing & small-sca
Slide 12: Our core+ regions are underrented by 22%
» Our core+ regions are underrented by 22% Rent potential 30/09/2012 31/12/2011 Letting portfolio New-letting In-place Rent New-letting Rent exluding BauBeCon rent 2) rent 1) potential 3) rent 2) potential 3) + Core 7.14 5.85 22.1% 6.91 20.4% Greater Berlin 6.66 5.59 19.1% 6.41 17.2% Rhine-Main 8.33
Slide 13: Ongoing strong privatisation business
» Ongoing strong privatisation business Signed in 9m/2012 Transaction Fair Privatisation signed 1) Units Margin incl. overhang 2011 volume value (units and transaction volume) # EUR m EUR m EUR m % volume in 56.1 75.9 83.8 Privatisation 1,590 113.0 83.5 29.5 35% EUR m Institutional sales 1,342 48.1
Slide 14: Nursing and Assisted Living – stable EBITDA contribution
» Nursing and Assisted Living – stable EBITDA contribution in EUR m 9m/2012 9m/2011 Income Average occupancy Nursing 26.8 25.3 Living 1.5 2.2 Other 2.6 3.0 Total income 30.9 30.5 Costs Nursing and corporate expenses -8.0 -8.5 Staff expenses -15.2 -14.7 Total costs -23.2 -23.2 Earnings from Nursing a
Slide 15: Financial performance and position
» Financial performance and position 15
Slide 16: Ongoing increased earnings and cash contribution from letting
» Ongoing increased earnings and cash contribution from letting in EUR m 9m/2012 9m/2011 Current gross rental income 164.1 144.7 Earnings Non-recoverable expenses -3.7 -4.4 from letting: Rental loss -1.7 -1.2 + EUR 17.0m Maintenance -21.0 -20.1 Others -2.3 -0.6 Earnings of Residential Property Manag
Slide 17: Adjusted EBT increased by 60% (y-o-y)
» Adjusted EBT increased by 60% (y-o-y) in EUR m 9m/2012 9m/2011 Adjusted EBITDA increased by ~ EUR 23m EBITDA (adjusted) 1) 132.1 108.8 thereof ~ EUR 17m attributable to Depreciation -2.2 -2.5 increasing earnings from letting and ~ EUR 7m attributable to increased earnings Financial result (adjuste
Slide 18: Strong recurring FFO performance in 9m 2012: 31% (y-o-y)
» Strong recurring FFO performance in 9m 2012: 31% (y-o-y) in EUR m 9m/2012 9m/2011 Profit 50.8 19.7 Earnings from Disposals -14.6 -7.2 Depreciation 2.2 2.5 FFO (incl. 37.7 47.3 67.0 disposals) Valuation SWAP 0.1 0.2 in EUR m Non-cash financial expenses 8.2 9.3 + 66% Deferred taxes 12.5 15.6 Tax ben
Slide 19: Balance sheet – Assets
» Balance sheet – Assets in EUR m 30/09/2012 31/12/2011 Increase mainly due to closing of Investment properties 4,275.0 2,928.8 BauBeCon; unchanged valuation matrix Other non current assets 22.8 21.7 Deferred tax assets 77.6 63.0 Non current assets 4,375.4 3,013.5 Trade receivables 30/09/2012 Rental
Slide 20: Balance sheet – Equity and Liabilities
» Balance sheet – Equity and Liabilities + Profit EUR 50.8 - Cash flow hedge EUR -33.3 - Pensions EUR -4.3 + Net proceeds (less tax effect) in EUR m 30/09/2012 31/12/2011 from capital increase EUR 449.2 - Dividend EUR -23.5 Total equity 1,522.3 1,083.4 Financial liabilities 2,631.0 1,834.7 LTV at 56
Slide 21: LTV at 56.8%; low average interest rate: 3.76%
» LTV at 56.8%; low average interest rate: 3.76% Financial liabilities in EUR m Mark-to-market 2,631.0 Debt structure LTV (%) 56.8% Nominal value 2,735.3 LTV (%) 59.2% Average interest rate: ~ 3.76 % Average mandatory redemption p.a.: ~ 1.7 % Debt service Average weighted maturity: ~ 8.5 years Inter
Slide 22: Updated guidance 2012
» Updated guidance 2012 deutsche-wohnen.com ) a Deutsche Wohnen 22
Slide 23: Updated guidance 2012 – FFO (w/o disposals): at least EUR 65m
» Updated guidance 2012 – FFO (w/o disposals): at least EUR 65m After having increased our full-year FFO-guidance for 2012 in conjunction with our H1/2012- reporting we, again, increase or guidance due to the very successful course of business of Deutsche Wohnen in the first nine months of 2012: Gui
Slide 24: Status on integration BauBeCon
» Status on integration BauBeCon 24
Slide 25: Integration of BauBeCon is well on track
» Integration of BauBeCon is well on track Integration/Migration of decentralised functions 17 Aug. 2012 31 Oct. 2012 01 Nov. 2012 01 Jan. 2013 01 Feb. 2013 31 May 2013 Closing Step 1 Step 2 Step 3 Step 4 End - Signing of - Integration of - Integration of - Integration of - Official termination 10,5
Slide 26: Background on EGM on 4 December 2012
» Background on EGM on 4 December 2012 26
Slide 27: Deutsche Wohnen prepares for further accretive growth
» Deutsche Wohnen prepares for further accretive growth Equity from June 2012 capital increase substantially invested in accretive transactions Further transformational deals lie ahead as secular consolidation trend continues Deutsche Wohnen announced extraordinary general meeting for 4 December 201
Slide 28: 96% of capital increases has been invested highly accretively
» 96% of capital increases has been invested highly accretively Sources & Uses of Funds (EUR m) Sources Uses Net proceeds from capital increases Acquisitions of portfolios November 2011 179 Rhineland (1,160 units) 29 June 2012 444 BauBeCon (> 23,000 units) 460 Greater Berlin (1,500 units) 31 Brunswi
Slide 29: Strong track record of accretive external growth
» Strong track record of accretive external growth 2012 Acquisitions Deutsche Wohnen Deutsche Wohnen BauBeCon Other Acquisitions Deutsche Wohnen External growth 1) 7) 31 Dec 2011 Pro-forma Gross asset value (EUR m) 2,899 1,240 411 4,550 Financing Equity (EUR m) 1,232 460 140 1,832 Debt (EUR m) 1,667
Slide 30: Our acquisition outlook: Keen focus on accretive growth
» Our acquisition outlook: Keen focus on accretive growth ACQUISITION-PRICE SENSITIVE Project A Project B EXECUTION Project Project Project Project Focus on shareholder C D Project A B A Project value creation Project B Project D B STEP 1 STEP 2 STEP 3 FFO/share accretion − targeted on every Market-
Slide 31: Authorised capital is a precondition for further accretive growth
» Authorised capital is a precondition for further accretive growth Proposed new authorisation Capital category Shares % of outstanding Authorised capital 73.07m 50% Nota bene: Exemption of rights for both capital categories (authorised and contingent capital) of up to » cash 10.0% » in kind 20.0% Y
Slide 32: Q&A
»Q&A deutsche-wohnen.com . 32
Slide 33: Appendix – new acquisition signed
» Appendix – new acquisition signed 33
Slide 34: Signed add-on acquisition of 5,100 units
» Signed add-on acquisition of 5,100 units Units Area Residential Residential Signing in-place rent vacancy # k sqm EUR/ sqm % Hanover/Brunswick, Central Germany, ~ 5,100 310 4.93 4.5% September 2012 Greater Berlin Located in our region Hanover/Brunswick, Central Germany and Greater Berlin Net purch
Slide 35: Appendix - Other
» Appendix - Other deutsche-wohnen.com . ) a Deutsche Wohnen 35
Slide 36: Adjusted EBITDA increased by ~ EUR 23m / + 21% (y-o-y)
» Adjusted EBITDA increased by ~ EUR 23m / + 21% (y-o-y) in EUR m 9m/2012 9m/2011 Earnings from Residentail Property Management 135.4 118.4 Earnings from Disposals 14.6 7.2 Earnings from Nursing and Assisted Living 7.7 7.3 Segment contribution margin 157.7 132.9 Corporate expenses -25.2 -23.0 Other
Slide 37: NOI performance continuously increasing
» NOI performance continuously increasing Residential Property Management: Net Operating Income (NOI) per sqm and month1) +11.3 % +5.3 % +5.6 % 1) NOI: Net Operating Income of the period divided by months of the period and average floor space on quarterly basis in the period under review 37
Slide 38: Portfolio as at 30 September 2012
» Portfolio as at 30 September 2012 Residential Share in terms Area In-place Vacancy Commercial Parking units of units 1) units units rent # % k sqm EUR/sqm % # # Total 73,164 100% 4,474 5.56 2.5% 808 20,712 Strategic core and 68,024 93% 4,144 5.62 2.1% 754 18,951 growth regions Letting portfolio 62
Slide 39: Portfolio as at 30 September 2012 – details on regions
» Portfolio as at 30 September 2012 – details on regions Residential Share in Area In-place Vacancy Commercial Parking units terms of units rent 1) units units # % k sqm EUR/sqm % # # Total 73,164 100% 4,474 5.56 2.5% 808 20,712 + Core 46,228 63% 2,756 5.82 1.9% 574 9,307 Greater Berlin 35,282 48% 2
Slide 40: New portfolio cluster as at 30 June 2012
» New portfolio cluster as at 30 June 2012 For reconsiliation purpose, last reported portfolio as of 30 June 2012 in our newly used portfolio cluster Residential Share in terms Area In-place Vacancy Commercial Parking units of units 1) units units rent # % k sqm EUR/sqm % # # Total 49,099 100% 2,979
Slide 41: New portfolio cluster as at 30 June 2012 – details on regions
» New portfolio cluster as at 30 June 2012 – details on regions Residential Share in Area In-place Vacancy Commercial Parking units terms of units 1) units units rent # % k sqm EUR/sqm % # # Total 49,099 100% 2,979 5.65 2.2% 465 14,856 + Core 37,685 77% 2,256 5.81 1.8% 386 7,572 Greater Berlin 27,65
Slide 42: 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
Slide 43: Deutsche Wohnen AG contact details
Deutsche Wohnen AG Registered Office Berlin Office Pfaffenwiese 300 Mecklenburgische Straße 57 65929 Frankfurt/ Main 14197 Berlin Phone: +49 30 897 86 551 Fax: +49 30 897 86 507 © 2012 Deutsche Wohnen AG 43