Adler Group Sa · XETR:ADJ
Adler Group Sa — H1 2023 Earnings Presentation
42 slides from Adler Group Sa's earnings presentation, Aug 29, 2023
Slide 1: Results presentation
Results presentation 29 August 2023
Slide 2: Content
Content 1 Strategy Update 2 Update on the Restructuring Plan 3 H1 2023 Overview 4 Portfolio & Operational Performance 5 Financial Performance 6 Concluding Remarks 7 Appendix 2 Kaiserstraße, Berlin
Slide 3: Strategy Update
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Slide 4: Update on Adler Group's Strategy
Update on Adler Group’s Strategy Continuous progress, albeit at a slower pace, in all Adler Group’s strategic pillars ✓ Controlled execution of disposal of yielding assets and development projects Portfolio Berlin-anchored portfolio with ✓ NRW portfolio, consisting of 6,790 residential units, has be
Slide 5: Update on the Restructuring Plan
Update on the Restructuring Plan 5
Slide 6: Update on the Restructuring Plan
Update on the Restructuring Plan The Group has completed its Restructuring Plan and is now focused on establishing a new foundation Recent events The Court of Appeal Launch of tender granted permission Implementation of offer and consent to appeal with the the amendments to Issuance of shares solici
Slide 7: H1 2023 Overview
H1 2023 Overview 7
Slide 8: Key Highlights
Key Highlights Strong operational performance combined with continuous focus on the disposal of yielding assets and developments PORTFOLIO FINANCIAL DISPOSALS & PERFORMANCE PERFORMANCE DEVELOPMENTS2 ◼ Lower NRI and FFO 1 on the back of decreased ◼ Market-leading brokers have been mandated for ◼ 3.1%
Slide 9: Portfolio & Operational Performance
Portfolio & Operational Performance 9
Slide 10: Berlin-anchored Portfolio
Berlin-anchored Portfolio Declining valuations due to the prevailing high interest rates Standing assets as per H1 20231 Fair value (€/sqm) 3,061 3,015 GAV 2,938 2,731 €4.8bn standing assets3 Berlin LIKE-FOR-LIKE Oberhausen FAIR VALUE Essen Duisburg DECREASE Dortmund Portfolio & Operational Performa
Slide 11: Strong Operational Performance Evidenced in Low Vacancy
Strong Operational Performance Evidenced in Low Vacancy... Vacancy remains at a structurally low level Like-for-like fair value growth (%) Yielding portfolio operational vacancy rate (%) 2.3% 1.6% LIKE-FOR-LIKE FAIR VALUE 1.4% DECREASE 1.3% (8.1%) YTD (vs FY 2022) 1.1% (1.9%) Portfolio & Operational
Slide 12: Combined with Increasing Average Monthly In-Place Rent
...Combined with Increasing Average Monthly In-Place Rent Residential and commercial average rent Like-for-like residential and commercial rental Detailed breakdown of the like-for-like (€/sqm/m) growth (%) residential and commercial rental growth (%) 7.69 3.1% Without CAPEX CAPEX 7.58 7.47 7.45 +4.
Slide 13: Anticipated Monthly Rent Increase for H2 2023 of 4.5-5.0%
Anticipated Monthly Rent Increase for H2 2023 of 4.5-5.0% Anticipated monthly rent for H2 2023 per region (€m) +4.7% 13.6 13.0 +4.3% 10.7 10.3 Portfolio & Operational Performance +6.2% 2.7 2.9 Berlin Other Total Monthly in-place rent per June 2023 Expected monthly in-place rent per December 2023 13
Slide 14: Financial Performance
Financial Performance 14
Slide 15: Portfolio GAV Impacted by Negative Revaluation
Portfolio GAV Impacted by Negative Revaluation GAV excluding BCP (€bn)1 Comments 1 Sale of a single yielding asset located in Duderstadt for c. €8m in GAV 7.3 0.0 (0.4) 2 During the second quarter, a revaluation loss of €437m was realized on (0.4) the yielding portfolio due to the prevailing high in
Slide 16: Debt Maturity Schedule
Debt Maturity Schedule Upcoming maturities covered by asset disposals, active refinancing and cash at hand Overview of debt maturities1 incl. BCP (€m) Comments Repayment of the €500m ADLER Real 3% 8% 32% 27% 9% 4% 15% 4% Estate 2018/2023 bond successfully executed Completion of tender offer for the
Slide 17: Planned €191m Placement to Refinance Upcoming Maturities
Planned €191m Placement to Refinance Upcoming Maturities CURRENT PLANNED ACTIONS ANTICIPATED STATUS RESULT ◼ Placement of up to €191m of new payment-in- ◼ Payment at maturity of convertible bond and ◼ Adler Group S.A.’s €165m convertible bonds kind senior secured “1.5 Lien” notes by way of loan note
Slide 18: EPRA LTV bridge
EPRA LTV bridge Negative revaluation significantly impacts EPRA LTV position EPRA LTV evolution1 (%) Comments 87.7% 2.0% 1 Sales of yielding assets, Arthur-Hoffmann-Straße project, as well as 0.5% condominium units for a total amount of €24m 0.6% 2.1% 2 Revaluation loss of €716m, including mainly a
Slide 19: Overview of Debt KPIs as per H1 2023
Overview of Debt KPIs as per H1 2023 Debt KPIs for H1 2023 Sources of funding Restructuring security package - 2nd lien3 Total nominal interest-bearing debt (€m) 6,815 2.0% EPRA LTV1 87.7% 30.7% Secured debt Fixed / hedged debt 100.0% 41.1% 31.0% Weighted average cost of debt 5.5% Weighted average m
Slide 20: Development of Cash Position – Changes during Q2 2023
Development of Cash Position – Changes during Q2 2023 Cash change driven by financing, CAPEX and advisory fees to restructuring Cash position, excluding BCP (€m) (36) 81 (65) 235 2 231 3 12 Restricted cash1 Financial Performance 42 Q1 2023 Yielding sales Project sales Financing Dev. CAPEX Restructur
Slide 21: Concluding Remarks
Concluding Remarks 21
Slide 22: Concluding Remarks
Concluding Remarks Objectives Concluding remarks Restructuring Plan completed, paving the way to the Group stabilisation Full-year 2023 guidance Due to the restructuring efforts, the company is facing an increased interest rate of 5.5% Rödl & Partner has commenced as ADLER Real Estate’s auditor Net
Slide 23: Q&A
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Slide 24: Appendix
Appendix 25-27 Portfolio & Operational Performance 28-32 Financials 33-36 Debt Overview 37-38 Development Projects 39 Mietspiegel Overview 40-41 Corporate Governance 42 Corporate Agenda 24 Kaiserstraße, Berlin
Slide 25: Detailed Breakdown of the Like-for-like Rental Growth
Detailed Breakdown of the Like-for-like Rental Growth Berlin properties as per H1 2023 (%) Non-Berlin properties as per H1 2023 (%) Consumer price index (CPI) linked leases as per H1 2023 (%) Without CAPEX CAPEX Without CAPEX CAPEX Based on units Based on NRI +5.0% +4.5% 2.7% 3.2% 0.6% 2.7% 35.6% 0.
Slide 26: CAPEX and Maintenance in H1 2023
CAPEX and Maintenance in H1 2023 Total CAPEX and maintenance (€m) Maintenance expense (€/sqm) Maintenance CAPEX 8.6 7.2 6.7 6.3 5.2 4.6 165 3.1 149 2.0 41 132 31 120 2017 2018 2019 2020 2021 2022 H1 2022 H1 2023 34 23 95 CAPEX invested (€/sqm) 26.1 24.4 31 21.8 62 18.9 124 118 17.4 13 14.7 98 97 App
Slide 27: Portfolio Breakdown of Standing Assets and Developments
Portfolio Breakdown of Standing Assets and Developments Yielding portfolio per city, incl. BCP1 Development projects per city, incl. BCP2 # City Value (€m) Value (%) # City Value (€m) Value (%) FY 2022 figures unaudited 1 Berlin 4,135 71.9 1 Berlin 586 28.3 2 Duisburg 442 7.7 2 Düsseldorf 459 22.2 3
Slide 28: Profit and Loss Statement
Profit and Loss Statement P&L statement Comments In € million H1 2023 H1 2022 1 Compared to H1 2022, net rental income decreased to €108m mainly due to the disposal of Net rental income 108 1 131 the Eastern portfolio to Velero/KKR, the Waypoint portfolio and the portfolio disposal by BCP Income fro
Slide 29: EBITDA from Rental Activities and EBITDA Total
EBITDA from Rental Activities and EBITDA Total EBITDA from rental activities EBITDA Total In € million H1 2023 H1 2022 In € million H1 2023 H1 2022 Net rental income 108 131 Income from rental activities 158 195 Income from facility services and recharged utilities costs 50 65 Income from property d
Slide 30: FFO calculation
FFO 1 and FFO 2 FFO 1 calculation FFO 2 calculation In € million, except per share data H1 2023 H1 2022 In € million, except per share data H1 2023 H1 2022 Net rental income 108 131 EBITDA total 4 1 52 Income from facility services and recharged utilities costs 50 65 Net cash interest (104) (45) Inc
Slide 31: Balance Sheet
Balance Sheet Balance sheet Comments In € million H1 2023 FY 20221 1 Fair value of investment properties decreased following a realised revaluation loss on the yielding Investment properties including advances 5,715 1 6,344 portfolio and development projects due to the prevailing high interest rates
Slide 32: EPRA NAV Metrics
EPRA NAV Metrics EPRA NAV metrics calculation In € million, except per share data H1 20232 FY 20221,2 EPRA NAV metrics NAV NRV NTA NDV NAV NRV NTA NDV Total equity attributable to owners of the Company 448 448 448 448 1,417 1,417 1,417 1,417 Revaluation of inventories (4) (4) (4) (4) (2) (2) (2) (2)
Slide 33: EPRA LTV - Methodology
EPRA LTV - Methodology EPRA LTV calculation for H1 2023 Comments Proportionate consolidation Group as Share of joint Share of material Non-controlling In € million reported ventures associates interests2 Combined The main objective of EPRA’s LTV metric is to provide 2,537 – – – 2,537 clarity on and
Slide 34: EPRA LTV - Overview
EPRA LTV - Overview EPRA LTV Comments In € million H1 2023 FY 20221 1 Interest-bearing debts slightly increased compared to FY 2022 figures on the back of the 2,537 1 1,646 drawdown of the New Money facilities as well as the repayment of the €500m ADLER Real Borrowings from Financial Institutions Es
Slide 35: Breakdown of Debt Maturities
Breakdown of Debt Maturities Volume (€m) IFRS (€m) Maturity Nominal interest rate Other comments Premature redemption Rate, at which premature redemption is possible ADLER Real Estate Bonds (secured) Tender offer completed 2017/24 3 3 6 Feb 24 2.10% Anytime Under condition of make whole 2018/26 300
Slide 36: Debt Maturity per Entity
Debt Maturity per Entity Upcoming maturities covered by active refinancing, cash at hand, and asset disposals Overview of debt maturity per entity1 incl. BCP (€m) Breakdown per entity 3% 8% 32% 27% 9% 4% 15% 4% Adler RE (excl. BCP) 2,210 11.9% €937m New Money Facility BCP 7.6% 1,813 Consus 4.0% 937
Slide 37: Upfront Sale Projects
Upfront Sale Projects Progress in disposals despite difficult market conditions Building Construc. Land plot Area (k CAPEX H1 Remaining CAPEX # Project name1 Entity City Zoning permit started (k sqm) sqm) 20232 (€m) 20232 (€m) 1 Offenbach project3,4 Consus Offenbach ✓ ✓ ✓ 33 88 3 1 PROJECT SOLD 2 Be
Slide 38: Forward Sale and Condominium Projects
Forward Sale and Condominium Projects Majority of projects to be completed and handed over by 2023 Remaining Total remaining Construc. Building Construc. Land plot Area GAV2 CAPEX H1 GDV # Project name1 Entity City Zoning CAPEX construc. period permit started (k sqm) (k sqm) (€m) 20233 (€m) (€m) 202
Slide 39: The Mietspiegel moderates the German housing market
The Mietspiegel moderates the German housing market by providing a comparative rent benchmark Mietspiegel in short Detailed vs simple MPS • The reform of the German rental index, called Mietspiegel (MSP), came into effect in July 2022 with the goal to preserve affordability to tenants in a predomina
Slide 40: Corporate Governance
Corporate Governance Current composition of the Board and Senior Management Prof. Dr. A. Stefan Kirsten Thomas Zinnöcker Thilo Schmid Dr. Heiner Arnoldi Stefan Brendgen Chairman of the Board Member of the Board Member of the Board Member of the Board Member of the Board Chairman of the Nomination &
Slide 41: Shareholder Composition
Shareholder Composition Adler Group’s Shareholder composition1 Vonovia 15.9% Taconic 5.0% Capital Advisors 79.1% Appendix Free Float 41 1. According to the official notifications received from the shareholders.
Slide 42: Corporate Agenda
Corporate Agenda Adler Group S.A. financial calendar 2023 Investor relations contacts 28 November 2023 Publication Q3 2023 Results Gundolf Moritz Head of IR 30 September 2024 (extended deadline) Publication Annual Report 2022, audited g.moritz@adler-group.com Julian Mahlert Senior IR Manager j.mahle