Deutsche Wohnen Se · XETR:DWNI

Deutsche Wohnen — FY2013 Earnings Presentation

40 slides from Deutsche Wohnen's earnings presentation, Mar 28, 2014

  1. Slide 1: Full year results 2013

    Deutsche Wohnen AG » Full year results 2013 Conference Call, 28 March 2014 1

  2. Slide 2: 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

  3. Slide 3: Agenda

    » Agenda 1 Operational Development and Capital Market 2 Financials 3 Guidance 2014 & Strategic outlook 3

  4. Slide 4: Operational Development and Capital Market

    » Operational Development and Capital Market 4

  5. Slide 5: Strong operational performance sets benchmark

    » Strong operational performance sets benchmark In-place rent and vacancy DeuWo stand alone Rent potential DeuWo stand alone 4) (like-for-like) Residential In-place rent 1) Δ in % Vacancy 1) units EUR/sqm in % 3) 31/12/2013 31/12/2012 y-o-y 31/12/2013 31/12/2012 Strategic core and growth regions 61,

  6. Slide 6: Overview of portfolio changes in 2013

    » Overview of portfolio changes in 2013 End of year: 2013 20121 ∆ Delta Residential Fair Value Residential Fair Value Residential Fair Value FV in % Units (EUR m) Units (EUR m) Units (EUR m) Total 150,219 8,881 82,738 4,794 +67,481 +4,087 +85.3% Strategic core and growth 146,675 8,743 77,007 4,586 +

  7. Slide 7: Overview of portfolio valuation as at 31 December 2013

    » Overview of portfolio valuation as at 31 December 2013 31/12/2013 Residential Share in Area 1) In-place Vacancy Fair Share in Fair Multiple Yield Multiple Yield units terms of 2) 3) terms of Value 4) in-place % market % rent Value units Fair Value rent rent # % k sqm EUR/sqm % EUR m % EUR/sqm Tota

  8. Slide 8: Attractive financing structure with further upside potential

    » Attractive financing structure with further upside potential Long-term maturities profile Attractive financing structure EUR m (nominal values)  Ø interest rate: ~ 3.3% 1) 250 931  Ø mandatory redemptions p.a.:1.55% 852 883 732 503 455  Ø weighted maturity: 8.1 years 368 420 110  Interest rate

  9. Slide 9: Convertible bond 2013 – Benchmark transaction

    » Convertible bond 2013 – Benchmark transaction Attractive terms demonstrate financing potential of Deutsche Wohnen  EUR 250m issue size  Coupon of 0.5% p.a. significantly below average interest rate Terms and conditions  Premium of 30% at issuance date of DeuWo  7Y maturity (22 Nov. 2020) conve

  10. Slide 10: Strong position in the capital markets

    » Strong position in the capital markets Most investable German listed real estate company Impressive track record of placements  Free float market cap increased by ~ 85% from EUR 2,0bn (Dec. 2012) to EUR 3,7bn (Dec. 2013)  3 structured equity transactions in 2013  Largest free float of all resid

  11. Slide 11: Financials

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

  12. Slide 12: All major P&L key performance indicators increased y-o-y

    » All major P&L key performance indicators increased y-o-y Key lines from P&L statement in EUR m 2013 2012 Δ in % Earnings from Residential Property Management 292.3 194.4 50% Earnings from Disposals 23.0 19.9 16% Earnings from Nursing and Assisted Living 13.2 9.9 33% Corporate expenses -52.9 -40.4

  13. Slide 13: Increasing FFO-yields despite substantial EPRA NAV growth

    » Increasing FFO-yields despite substantial EPRA NAV growth FFO (w/o disposals) and -yields 2013 (pro forma)1) 2013 2012 FFO (w/o disposals) in EUR m 178.8 2) 114.5 68.2 FFO (w/o disposals) per share in EUR 0.62 3) 0.65 4) 0.54 5) EPRA NAV in EUR m as of 31/12 4,004.7 4,004.7 1,824.4 6) 6) EPRA NAV

  14. Slide 14: Pro forma P&L 2013

    » Pro forma P&L 2013 Deutsche Wohnen GSW Group Deutsche Wohnen Group stand-alone stand-alone Group pro forma in EUR m in EUR m in EUR m Current Gross Rental Income 353,5 236,1 589,7 Rental loss -4,0 -5,2 -9,2 Non-recoverable expenses -8,9 -7,9 -16,8 Maintenance Costs -58,1 -21,3 -79,4 Others -6,2 -0

  15. Slide 15: Guidance 2014 & Strategic outlook

    » Guidance 2014 & Strategic outlook 15

  16. Slide 16: Guidance 2014

    » Guidance 2014 FFO (w/o disposals): min. EUR 210m FFO expected 1  EUR 203m considering 8% minority share = EUR 0.71 per share (+9.2% growth) 2 Dividend policy: 60% of FFO (w/o disposals) = EUR 0.42 per share (+23.5% growth) Synergies: EUR 15m generated in 2014, thereof EUR 10m effective/ realised

  17. Slide 17: Positioning of DeuWo in listed residential landscape

    » Positioning of DeuWo in listed residential landscape Strenghts/ Weaknesses Like for like rental growth Portfolio quality  Locations  technical DeuWo Sustainable business model ahead  Areas/ diversification B A of it‘s Peers  CF generation C- • Dividend policy D Efficiency/ Cost ratio Total cap

  18. Slide 18: Q&A

    »Q&A deutsche-wohnen.com vr) a Deutsche Wohnen 18

  19. Slide 19: Appendix

    » Appendix deutsche-wohnen.com ‘ ) a Deutsche Wohnen 19

  20. Slide 20: Segment – Residential Property Management

    Segment – Residential Property Management 20

  21. Slide 21: Overview of portfolio as at 31 December 2013

    » Overview of portfolio as at 31 December 2013 31/12/2013 Residential Share in Area 1) In-place Vacancy Fair Share in Fair Multiple Multiple units terms of rent 2) Value 3) terms of Value 4) in-place market units Fair Value rent rent # % k sqm EUR/sqm % EUR m % EUR/sqm Total 150,219 100% 9,131 5.54

  22. Slide 22: Details on regions of portfolio as at 31 December 2013

    » Details on regions of portfolio as at 31 December 2013 31/12/2013 Residential Share in Area In-place Vacancy Commercial Parking units terms of units rent 1) units spaces # % k sqm EUR/sqm % # # Total 150,219 100% 9,131 5.54 2.4% 2,146 31,833 Strategic core and growth regions 146,675 98% 8,902 5.56

  23. Slide 23: Focused and sustainable investments in the portfolio

    » Focused and sustainable investments in the portfolio Maintenance and modernisation 2013 2012 EUR m EUR/sqm 1) EUR m EUR/sqm 2) Maintenance 59.4 10.36 34.7 9.68 Ongoing & small-scale 45.5 7.94 23.8 6.66 maintenance Deutsche Wohnen stand alone Reletting 13.9 2.42 10.8 3.02  Reletting and modernisat

  24. Slide 24: Strong earnings and cash contributions from letting

    » Strong earnings and cash contributions from letting in EUR m 2013 2012 Current gross rental income 372.9 240.1 Earnings Non-recoverable expenses -9.6 -4.1 Maintenance from letting: Rental loss -4.9 -3 in FY13: EUR 10.36 sqm + EUR (in 2012: EIR 9.68 sqm) Maintenance -59.4 -34.7 97.9m additional EUR

  25. Slide 25: Segment – Disposals

    Segment — Disposals deutsche-wohnen.com ‘ ) a Deutsche Wohnen 25

  26. Slide 26: Very strong privatisation business & successful non-core disposals

    » Very strong privatisation business & successful non-core disposals 2013 Transaction Privatisation (i.e. sales of individual Units Fair Value Gross Margin volume appartments) # EUR m EUR m EUR m % 1)  In 2013 1,342 units closed. Privatisation 1,342 100.7 68.6 32.1 47%  Gross margin of ~ 47% Insti

  27. Slide 27: Segment – Nursing and Assisted Living

    Segment – Nursing and Assisted Living 27

  28. Slide 28: Nursing and Assisted Living − increasing EBITDA contribution

    » Nursing and Assisted Living − increasing EBITDA contribution in EUR m 2013 2012 31/12/2013 Facilities Places Income Greater Berlin 12 1,434 Nursing 52.0 36.4 Saxony 7 475 Living 3.0 2.0 Others 2 257 Other 4.9 3.6 In total 21 2,166 Total income 59.9 42.0 Average Occupancy Costs Nursing and corporat

  29. Slide 29: Derivation of FFO

    Derivation of FFO deutsche-wohnen.com ‘ ) a Deutsche Wohnen 29

  30. Slide 30: Adjusted EBITDA increased by ~ EUR 90m / + 50% (y-o-y)

    » Adjusted EBITDA increased by ~ EUR 90m / + 50% (y-o-y) Corporate expenses (in EUR m) 2013 2012 in EUR m 2013 2012 Staff expenses -31.8 -23.6 General and administration expenses -17.7 -12.7 Earnings from Residential Property Management 292.3 194.4 Third-party Property Management -3.4 -4.1 Earnings

  31. Slide 31: Adjusted EBT increased by ~ 68% (y-o-y)

    » Adjusted EBT increased by ~ 68% (y-o-y) in EUR m 2013 2012 in EUR m 2013 2012 4) EBITDA (adjusted) 270.2 180.6 2) Interest expenses -122.0 -89.6 Depreciation -5.5 -3.1 Non-cash interest expenses -11.8 -11.4 Financial result (net) -132.8 5) -99.0 3) -133.8 -101.0 EBT (adjusted) 131.9 78.5 Interest

  32. Slide 32: Strong recurring FFO per share performance +20% (y-o-y)

    » Strong recurring FFO per share performance +20%2) (y-o-y) in EUR m 2013 2012 Profit 212.7 145.5 Earnings from Disposals -23.0 -19.9 FFO (incl. disposals) in EUR m Depreciation 5.5 3.1 Valuation properties -100.9 -119.2 58.1 88.1 137.5 Valuation SWAP and Convertible Bond -10.6 0.2 Non-cash financia

  33. Slide 33: Balance sheet & debt financing

    Balance sheet & debt financing 33

  34. Slide 34: Balance sheet – Assets

    » Balance sheet – Assets Other non-current assets mainly increased to in EUR m 31/12/2013 31/12/2012 EUR 552.2m due to goodwill of the GSW- transaction (EUR 492m) Investment properties 8,937.1 4,614.6 Other non-current assets 552.2 24.1 Deferred tax assets increased mainly due to EUR 212.1m deferred

  35. Slide 35: Balance sheet – Equity and Liabilities

    » Balance sheet – Equity and Liabilities Equity in EUR m 31/12/2013 in EUR m 31/12/2013 31/12/2012 + Profit 212.7 Total equity 3,944.3 1,609.7 + Cash flow hedge 36.8 + Pensions 0.6 Financial liabilities 5,154.6 2,768.6 + Capital increase (less costs of capital increase, less tax effects) 1,952.5 Con

  36. Slide 36: EPRA NAV per share up by 12%

    » EPRA NAV per share up by 12% in EUR m 31/12/2013 31/12/2012 in EUR 31/12/2013 31/12/2012 Equity (before non-controlling interests) 3,777.8 1,609.3 EPRA NAV per share in EUR (undiluted) 13.99 12.48 Fair value adjustment of convertible bond -2.2 0.0 Adjusted NAV per share in EUR (undiluted) 12.27 12

  37. Slide 37: Strong like-for-like development including GSW

    » Strong like-for-like development including GSW 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 Let

  38. Slide 38: The Berlin-portfolio at a glance (incl. GSW)

    » THE BERLIN-PORTFOLIO AT A GLANCE (incl. GSW) Reinickendorf Pankow # 11,986 5.34 2.0% # 8,787 5.87 0.8% Mitte Friedrichshain-Kreuzberg # 3,776 5.62 1.2% # 7,983 5.53 1.1% Lichtenberg # 7,712 5.59 1.2% Spandau # 15,173 5.18 2.4% Marzahn-Hellersdorf # 8,668 4.87 2.8% Charlottenburg-Wilmersdorf # 8,00

  39. Slide 39: 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

  40. Slide 40: Deutsche Wohnen AG

    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 © 2014 Deutsche Wohnen AG 40

Deutsche Wohnen — FY2013 Earnings Presentation on 6ix