Instone Real Estate Group Se · XETR:INS
Instone Real Estate — Q3 2023 Earnings Presentation
35 slides from Instone Real Estate's earnings presentation, Nov 9, 2023
Slide 1: Results Presentation Q3 2023
Results Presentation Q3 2023
Slide 2: Disclaimer
Disclaimer 2 | 09.11.2023 | Q3-2023
Slide 3: Highlights
INSTONE REAL ESTATE Highlights
Slide 4: Highlights
Highlights Continued modest improvement in B2C business, sales starts add positive momentum Sales: Private customer demand shows modest improvement, institutional buyers in ‘wait and see’ mode, Private investors: encouraging initial results from new sales starts in Q4 Operational Positive impa
Slide 5: Sales ratio: Continued moderate improvement from depressed levels
Sales ratio: Continued moderate improvement from depressed levels Sales ratio1 In % Influenced Long term Instone sales ratio Sales ratio by bloc sale 4.5 4.2 4.2 4.0 3.8 3.7 Pull- forward 3.5 3.5 3.6 3.6 3.4 3.5 3.5 effects in Leipzig 3.4 3.5 3.0 3.2 3.3 3.3 3.3 3.33.3 3.33.33.2 project due to 3.1 3
Slide 6: New build prices with only moderate decline; CPI stabilisation
New build prices with only moderate decline; CPI stabilisation House price inflation1 Construction price inflation2 In % In % 9.1 y-o-y q-o-q y-o-y q-o-q 8.7 7.4 7.5 7.5 7.6 7.3 7.2 6.7 17.6 16.516.9 6.4 20.0 14.4 14.3 15.1 4.8 12.6 15.0 3.2 8.8 10.0 6.4 6.4 2.8 0.1 0.7 2.3 2.3 4.1 3.8 3.4 1.6 1.6 1
Slide 7: Price development: yield expansion partly compensated by further accelerating rent growth
Price development: yield expansion partly compensated by further accelerating rent growth House price sensitivity: price impact in different scenarios1 New-build rent development2 - accelerating positive momentum y-o-y Rent Yield / Rent Multiple In % 4.2% 4.0% 3.8% 3.7% 3.6% 3.4% 3.3% 3.2% 3.1% 6.2%
Slide 8: Under construction projects de-risked as 90% sold
Under construction projects de-risked as 90% sold Project portfolio as of 30/09/2023 by development (GDV) Pre sale: €3.8bn Under construction: €3.1bn t/o sold €2.8bn Projects with GDV of €3.1bn are “under Total GDV construction” of which 90% (€2.8bn) already sold €7.0bn Of the €2.8bn sold volume
Slide 9: Q3 2023 Financial Performance & Outlook
Q3 2023 Financial Performance & Outlook
Slide 10: Adjusted Results of Operations
Adjusted Results of Operations High profitability maintained – Well on track to reach FY earnings targets €m Q3 2023 Q3 2022 Change 9M 2023 9M 2022 Change Revenues 153.8 173.9 -11.6% 433.3 441.9 -1.9% Majority of revenues is based on pre-sold units Project cost -115.3 -129.0 -10.6% -322.6 -328.2 -
Slide 11: Bulk of 2023 adjusted revenues target already logged in
Bulk of 2023 adjusted revenues target already logged in Concluded sales contracts – expected development in 2023 Adj. revenues – expected development in 2023 In €m In €m >150 600-700 Retail sales Institutional sales Expected sales 20 154 18 156 53 123 Q1 23 Q2 23 Q3 23 Q4 23e FY 23e Q1 23 Q2 23 Q3 2
Slide 12: Rock solid balance sheet maintained
Rock solid balance sheet maintained €m 30/09/2023 30/06/2023 31/12/2022 Corporate debt 165.6 1 Project debt 283.9 Further improved balance sheet ratios in Q3 Financial debt1 449.5 535.6 520.6 Cash and cash equivalents and term deposits1 -177.0 Very moderate LTC Net financial debt1 272.5 322.0 26
Slide 13: Strong Q3-cash flow further strengthens financial profile
Strong Q3-cash flow further strengthens financial profile t/o t/o Cash Flow (€m) Q3 2023 Q3 2022 9M 2023 9M 2022 Liquidity (€m) Total drawn available EBITDA adj. 23.7 26.3 69.5 64.6 Corporate debt Other non-cash items 3.1 -3.6 -3.7 -12.7 Promissory notes 165.5 165.5 - Taxes paid -23.7 -2.0 -27.0 -2.
Slide 14: Financing: No major maturities until H2-2025
Financing: No major maturities until H2-2025 Maturity profile (corporate debt) as of 30/09/2023 Secured/unsecured as of 30/09/2023 In €m Project debt, secured Corporate debt 100.0 29.5% 50.0 Total: €561.1m 15.51 0.0 0.0 70.5% 2023 2024 2025 2026 2027 Weighted average corporate debt maturity 2.4 year
Slide 15: Outlook 2023: well on track for full year targets
Outlook 2023: well on track for full year targets €m Forecast 2023 Revenues (adjusted) 600-700 Gross profit margin (adjusted) ~25% 40-50 EAT (adjusted) Volume of concluded sales contracts >150 15 | 09.11.2023 | Q3-2023
Slide 16: Appendix
INSTONE REAL ESTATE Appendix
Slide 17: Project portfolio key figures
Project portfolio key figures €m Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Volume of sales contracts 20.2 18.4 52.7 42.0 104.6 58.0 87.6 761.7 170.7 Project Portfolio 7,015.5 7,182.6 7,600.4 7,668.8 7,827.4 7,727.4 7,567.7 7,500.0 7,154.9 thereof already sold 2,822.7 2,
Slide 18: Diversified project portfolio across most attractive German regions
Diversified project portfolio across most attractive German regions Project portfolio as of 30/09/2023 by region (GDV) In % Berlin Munich Hamburg 2.1 4.1 4.6 Frankfurt 48 projects / 14,269 units Leipzig 4.7 34.1 88% in metropolitan regions Stuttgart 7.8 ~79 average sqm / unit Total: €7.0bn ~
Slide 19: Significant pipeline allows opportunistic investment strategy
Significant pipeline allows opportunistic investment strategy Project portfolio development (GDV) In €m 2 12/2022 Completed Updated 09/2023 projects project assessment 1 1 incl. deconsolidation of one project as “at-equity” as well as changed sales strategy to land sale 19 | 09.11.2023 | Q3-2023 2 E
Slide 20: Expected future cash flows suggest significant upside
Expected future cash flows suggest significant upside1 Fundamental Instone value rests on three distinct pillars (As of 30 September 2023; in EUR million) Pre-sold projects - c.€3.1bn currently under construction De-risked free cash flow from projects under construction1 c.500m - t/o c.€2.8bn pre-so
Slide 21: Substantial cash return to shareholders
Substantial cash return to shareholders Share Buyback SBB I SBB II Total No. of shares1 2,349,416 1,349,417 3,698,833 Share buy back completed; used full existing authorisation Percentage of share capital (%) 5.00 2.87 7.87 Volume (€ million) 25.4 11.4 36.9 Two consecutive programmes: 18 March 2
Slide 22: Status of building rights
Status of building rights Project portfolio as of 30/09/2023 by building right status (GDV) 63.2% ~85% Building permit granted Master plan granted ~3% Building permit application filed ~12% Building permit application in preparation Master plan in progress 13.9% 13.9% Master plan in preparation 22.9
Slide 23: Project portfolio as of 30/09/2023
Project portfolio as of 30/09/2023 (projects > €30m sales volume, representing total: ~ €7.0bn) Sales volume Land plot Building right Sales Construction Project Location (expected) acquired obtained started started Hamburg SE - Kösliner Weg Norderstedt-Garstedt 106 Mio. € H - Sportplatz Bult Hannove
Slide 24: Project portfolio as of 30/09/2023
Project portfolio as of 30/09/2023 (projects > €30m sales volume, representing total: ~ €7.0bn) Sales volume Land plot Building right Sales Construction Project Location (expected) acquired obtained started started Rhine-Main Update CO WI - Delkenheim Wiesbaden 114 Mio. € F - Schönhof-Viertel Frankf
Slide 25: Project portfolio as of 30/09/2023
Project portfolio as of 30/09/2023 (projects > €30m sales volume, representing total: ~ €7.0bn) Sales volume Land plot Building right Sales Construction Project Location (expected) acquired obtained started started Baden-Wurttemberg S - City-Prag Stuttgart 135 Mio. € WN - Schorndorf Schorndorf N/A T
Slide 26: Opportunity Growth Act Introduction ("Wachstumschancen Gesetz")
Opportunity Growth Act Introduction (“Wachstumschancen Gesetz“) Key Positives from Increased Depreciation Expected Positive impact for buy-to-let investors expected Increase of depreciation on newly built residential properties from (currently) 3% linear to 6% degressive p.a. The higher deprec
Slide 27: No major impact from other new subsidy schemes expected
No major impact from other new subsidy schemes expected The German government plans to invest >1bn p.a. to support owner-occupiers (help-to- buy) and new build of rental apartments • Name: “Wohneigentum für Familien” = homes for families • Name: “Klimafreundlicher Neubau” = climate friendly new-buil
Slide 28: 2022 ESG achievements and disclosures
2022 ESG achievements and disclosures • EU Taxonomy related disclosure • 96.5% of Instone 2022 revenues are eligible for EU taxonomy assessment • 86.7% of Instone 2022 revenues are EU taxonomy aligned • 94.2% of individual buildings contributing to Instone 2022 revenues are taxonomy aligned • Scope
Slide 29: ESG: Top rating underscores commitment to industry leadership
ESG: Top rating underscores commitment to industry leadership INS among the top 3% of the 288 global real estate development companies Top 5% across all sectors 29 | 09.11.2023 | Q3-2023
Slide 30: Major ESG-KPIs – achievements and targets
Major ESG-KPIs – achievements and targets Major KPIs 2021 2022 Targets Taxonomy-compliant revenues (in %) n/a 86.7 Predominantly taxonomy-compliant Share of projects/objects with energy requirements at least NZEB - ~82.5% ~97.4% 100% of project/object portfolio in 2030 10%1 GHG emissions / scope 1 a
Slide 31: 87% of revenues are compliant with EU Taxonomy
87% of revenues are compliant with EU Taxonomy Proportion Climate Climate Absolute revenue of total change change • Instone reports according to Art. 8 of the Taxonomy revenues mitigation adaptation Ordinance on non-financial reporting according to the A. Taxonomy-eligible activities NFRD/HGB for th
Slide 32: Clear pathway to reduce GHG emissions scope 1 to 3
Clear pathway to reduce GHG emissions scope 1 to 3 Projected versus actual climate targets Scope 3 emissions target curve based on SBTi4 CO2e in t €m kgCO2e/m2 Total Gesamt Upstream Vorgelagert Downstream Nachgelagert To 2030: at least -42% in line with the 3,000 SBTI -1.5°C scenario: 2,500 1.5°C pa
Slide 33: Instone share
Instone share Basic data Shareholder structure (November 2023) • ISIN: DE000A2NBX80 • Ticker symbol: INS Activum 25.95% • No of shares: 46,988,336 • Market cap1: €274.9m • Average daily trading volume: €0.4m • Market segment: Prime Standard, Frankfurt Others 48.05% DAMAC Properties 10.04% Ranger Glo
Slide 34: Financial calendar
Financial calendar 2023 November 09 Quarterly Statement for the first nine months of 2023 November 14 Roadshow, Frankfurt (Deutsche Bank) November 15 Pan-European Real Estate Conference (Kepler Cheuvreux), London November 29 UBS Global Real Estate Conference, London 2024 January 11 Barclays European
Slide 35: Investor Relations Contacts
Investor Relations Contacts Burkhard Sawazki Head of Business Development & Communication T +49 201 45355-137 M +49 173 2606034 burkhard.sawazki@instone.de Tania Hanson Roadshows & Investor Events T +49 201 45355-311 M +49 152 53033602 tania.hanson@instone.de Instone Real Estate Group SE Grugaplatz
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