Deutsche Wohnen Se · XETR:DWNI

Deutsche Wohnen — Investor Presentation (August 2014)

32 slides from Deutsche Wohnen's investor presentation, August 2014

  1. Slide 1: Deutsche Wohnen AG Company presentation

    Deutsche Wohnen AG » Company presentation August 2014 1

  2. Slide 2: Key investment highlights of Deutsche Wohnen

    » Key investment highlights of Deutsche Wohnen 1 Diversified business model with focus on metropolitan growth regions 2 Best in class portfolio quality with highest rental growth of Peer Group 3 Leadership in cost efficiency due to asset concentration Proven track record of accretive portfolio acqui

  3. Slide 3: Deutsche Wohnen business model “Made in Germany”

    » Deutsche Wohnen business model “Made in Germany” Strong CF for Shareholder Return Dividends + NAV growth Nursing & Residential letting business Privatization & assisted living institutional >EUR 600m p.a. gross rents sales Backed by from high-quality portfolio1) demographic Additional cash trends

  4. Slide 4: Deutsche Wohnen portfolio focussed and concentrated

    » Deutsche Wohnen portfolio focussed and concentrated Portfolio development underlines shift to growth regions with significant upside potential Total residential holdings: ~150,000 units  Thereof ~80% in dynamic Core+-regions (~118,000 units) Hanover Berlin  Thereof ~73% in Greater Berlin (~107,0

  5. Slide 5: Portfolio structure – characteristics meeting strong demand

    » Portfolio structure – characteristics meeting strong demand In-place rent1) ( €5.53/sqm/month) Year of construction 25.4% 31.7% 29.5% 19.6% 15.4% 19.5% 11.9% 15.3% 6.9% 7.2% 3.1% 3.8% 1.5% 2.2% 3.1% 3.4% 0.6% > = 8.01 <=3.50 3.51 - 4.00 4.01 - 4.50 4.51 - 5.00 5.01 - 5.50 5.51 - 6.00 6.01 - 6.50 6

  6. Slide 6: Strong like-for-like development

    » Strong like-for-like development 1) Total Portfolio Letting Portfolio Core+ regions In-place rent (EUR/sqm) In-place rent (EUR/sqm)  Comprises ~ 84,700 units under management since Dec 2008  Comprises ~ 72,000 units under management since Dec 2008 Letting Portfolio Core regions Letting Portfolio

  7. Slide 7: Dynamic rent potential in Core+ regions (letting portfolio)

    » Dynamic rent potential in Core+ regions (letting portfolio) 1) 3) New-letting rent in New-letting In-place rent in EUR/sqm Rent potential EUR/sqm2) contracts4) Core+ 5.73 23.5% 7.07 4,142 Greater 5.61 21.3% 6.80 3,534 Berlin Rhine- 7.12 25.9% 8.97 514 Main Rhineland 6.56 21.7% 7.98 94  Current te

  8. Slide 8: Berlin residential real estate market offering attractive fundamentals

    » Berlin residential real estate market offering attractive fundamentals Demographics Supply and Demand  ~2.03m households with 54.3% single-person households  Number of inhabitants increases consistently (+1.3%pts. since 2007) and Ø 1.73 persons per (mainly because of net migration gain) househol

  9. Slide 9: Core+ and Core regions showing positive fundamentals

    » Core+ and Core regions showing positive fundamentals1) Rhine-Main region incl. Rhineland region incl. Hanover / Brunswick / Frankfurt/ Main Dusseldorf Magdeburg  One of the most important regions Focus on Dusseldorf:  Favourable location in the in Germany with 5.6 m inhabitants centre of Germany

  10. Slide 10: “Mietpreisbremse” – new rental cap

    » “Mietpreisbremse” – new rental cap Current situation and time table  draft bill to enable local governments to cap rental growth for new lettings in areas with “tight housing markets” to max. 10% above “comparable rent”  Ongoing discussions: Berlin Hanover  Definition of “tight housing market”

  11. Slide 11: Financials

    » Financials deutsche-wohnen.com . ) Deutsche Wohnen 11

  12. Slide 12: Highlights H1-2014

    » Highlights H1-2014 Operational development Key financials  In-place rent EUR 5.62 sqm  FFO (w/o disposals) EUR 114.2 (+88%)  Vacancy rate 2.5%  FFO (w/o disposals) per share EUR 0.40 (+5%)  NOI / sqm / month EUR 4.28 sqm (+5.4%)  FFO margin 36.4%2)  NOI margin 76.2% (+1.2%pts.)  FFO guidan

  13. Slide 13: Strong earnings and cash contributions from letting

    » Strong earnings and cash contributions from letting in EUR m H1-2014 H1-2013 In-place rent: H1-14: EUR 5.62 / sqm Current gross rental income 313.4 168.1 Earnings Non-recoverable expenses (6.8) (2.8) from letting: Rental loss (4.1) (2.1) Maintenance1) + EUR H1-14: EUR 8.51 /sqm 120.4m Maintenance

  14. Slide 14: NAV contribution by strong disposal business

    » NAV contribution by strong disposal business Closed in EUR m H1-2014 H1-2013  Free cash flow from sales Sales proceeds 138.4 62.8 activities of EUR 71.5m (1,133 closed privatization units and Cost of sales (6.0) (3.8) 1,119 closed units institutional Net sales proceeds 132.4 59.0 sales) Carrying

  15. Slide 15: Nursing and Assisted Living − increasing FFO contribution

    » Nursing and Assisted Living − increasing FFO contribution in EUR m H1-2014 H1-2013 30/06/2014 Facilities Places Income Greater Berlin 12 1,442 Nursing 27.6 25.0 Saxony 7 475 Living 3.0 1.0 Others 2 257 Other 3.2 2.0 In total 21 2,174 Total income 33.8 28.0 Costs Average Occupancy Nursing and corpo

  16. Slide 16: Benchmark EBITDA margin among the Peer Group

    » Benchmark EBITDA margin among the Peer Group in EUR m H1-2014 H1-2013 EBITDA margins H1-2014 H1-2013 Earnings from Residential Property Management 259.7 139.3 adj. EBITDA / gross rents 77.9% 79.1% Earnings from Disposals 25.6 12.3 adj. EBITDA excl. disposals / 69.7% 71.8% gross rents Earnings from

  17. Slide 17: Adjusted EBT increased by ~104% (y-o-y)

    » Adjusted EBT increased by ~ 104% (y-o-y) in EUR m H1-2014 H1-2013 in EUR m H1-2014 H1-2013 EBITDA (adjusted) 244.0 133.0 Interest expenses (92.4) (56.0) Non-cash interest expenses (7.7) (5.5) Depreciation (3.2) (2.7) 2) 2) (100.1) (61.5) Financial result (net) (99.6) (61.0) Interest income 0.5 0.5

  18. Slide 18: Recurring FFO per share performance +5.3% (y-o-y)

    » Recurring FFO per share performance +5.3% (y-o-y) in EUR m H1-2014 H1-2013 FFO development in EUR m Profit 94.6 50.2 41.9 72.9 139.0 Earnings from Disposals (25.6) (12.3) Depreciation 3.2 2.7 24.82) Valuation SWAP and Convertible Bond 24.0 0.0 Non-cash financial expenses 7.7 5.5 Deferred taxes 10.

  19. Slide 19: Integration of GSW well on track

    » Integration of GSW well on track H1-2013 in EUR m H1-2014 (pro forma) Earnings from Residential Property Management 259.7 241.8 Earnings from Disposals 25.6 17.4 Earnings from Nursing and Assisted Living 8.3 6.5 Savings of EUR 6m in Corporate expenses (45.8) (51.9) corporate expenses demonstrate t

  20. Slide 20: Balance sheet

    » Balance sheet Assets Equity and Liabilities in EUR m 30/06/2014 31/12/2013 in EUR m 30/06/2014 31/12/2013 Investment properties 8,888.1 8,937.1 Total equity 3,954.5 3,944.3 Other non-current assets 550.5 554.9 Financial liabilities 4,985.2 5,154.6 Deferred tax assets 291.8 280.5 Convertible 258.3

  21. Slide 21: EPRA NAV per share up by 1.5%

    » EPRA NAV per share up by 1.5% in EUR m 30/06/2014 31/12/2013 in EUR m 30/06/2014 31/12/2013 Equity (before non-controlling EPRA NAV per share in EUR 3,779.7 3,777.8 14.20 13.99 interests) (undiluted) Fair value adjustment of Adjusted NAV per share in 8.2 (2.2) 12.48 12.27 convertible bond EUR (und

  22. Slide 22: Guidance 2014 (increase)

    » Guidance 2014 (increase) 1 FFO (w/o disposals): EUR 220m1) FFO expected (increase from EUR 210m1)) Anticipation of EUR 5m expenses for re-letting in context with the delayed implementation of the 2 expected new rent regulations („Mietpreisbremse“) 3 Synergies: >EUR 10m to be realized in 2014 4 Div

  23. Slide 23: Appendix

    » Appendix deutsche-wohnen.com ‘ ) a Deutsche Wohnen 23

  24. Slide 24: LTV at 56.2%; low average interest rate ~3.4%

    » LTV at 56.2%; low average interest rate ~ 3.4% Financial liabilities in EUR m Mark-to-market 5,243.5 Debt structure LTV (%) 56.2% Nominal value 5,331.4 LTV (%) 57.1%  Avg. interest rate incl. Convertible bond: ~ 3.4%  Avg. mandatory redemptions p.a.: ~ 1.6% Debt service  Avg. weighted maturity:

  25. Slide 25: Overview of portfolio as at 30 June 2014

    » Overview of portfolio as at 30 June 2014 30/06/2014 Residential Area 1) In-place Vacancy Fair Share in FV 4) Multiple Yield Multiple Yield 2) 3) units rent Value terms of in-place market (FV) FV rent rent # K sqm EUR/sqm % EUR m % EUR/sqm % % Strategic core and growth 145,367 8,822 5.63 2.3 8,686

  26. Slide 26: Details on regions of portfolio as at 30 June 2014

    » Details on regions of portfolio as at 30 June 2014 30/ 06/ 2014 R e s i d e n t i a l Sh a r e i n t e r ms C o mme r c i a l P ar ki ng 1 ) uni t s of uni t s Ar ea I n- pl ace r ent V acancy uni t s spaces # in % k sqm E U R / sqm in % # # T ot al 148, 035 100% 8, 992 5. 62 2. 5% 2, 101 31, 244

  27. Slide 27: The Berlin-Portfolio at a glance

    » The Berlin-Portfolio at a glance Reinickendorf Pankow # 11,832 5.40 2.3% # 8,738 5.95 1.0% Mitte Friedrichshain-Kreuzberg # 3,694 5.70 1.6% # 7,903 5.59 1.1% Lichtenberg # 7,604 5.65 1.4% Spandau # 14,980 5.30 2.7% Marzahn-Hellersdorf # 8,665 4.91 2.6% Charlottenburg-Wilmersdorf # 7,942 6.27 0.9%

  28. Slide 28: Berlin's key facts

    » Berlin's key facts (1) Population (2) Residential units Number of residential units Population Berlin (2012)(1) ca. 1.9m (12/2013)(1) ca. 3.45m Number of residential units for letting (2012)(6) ca. 1.6m Population Capital Region Berlin-Brandenburg Completed apartments 2013 (12/2013)(1) ca. 4.5m (2

  29. Slide 29: Hidden Champions – backbone of German economy

    » Hidden Champions – backbone of German economy Number of Hidden Champions Germany 1.307 Hidden Champion = 1. No. 1 on continent and/or Top 3 USA 366 worldwide in their sector 2. Revenues < 5 bn Euro Japan 220 3. Mainly family-owned, max 5,000 employees Austria 116 Switzerland 110 Main Reasons: Ital

  30. Slide 30: Management board and areas of responsibilities

    » Management board and areas of responsibilities Michael Zahn Andreas Segal Lars Wittan Chief Executive Officer Chief Financial Officer Chief Investment Officer (CEO) (CFO) (CIO) Areas of responsibility: Areas of responsibility: Areas of responsibility:  Strategy  Equity Financing  Accounting/Tax

  31. Slide 31: 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

  32. Slide 32: Deutsche Wohnen AG Pfaffenwiese 300 65929 Frankfurt/Main

    Deutsche Wohnen AG Registered Office Berlin Office Pfaffenwiese 300 Mecklenburgische Straße 57 65929 Frankfurt/ Main 14197 Berlin Phone: +49 30 897 86 5413 Fax: +49 30 897 86 5409 © 2014 Deutsche Wohnen AG 32

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