Adler Group Sa · XETR:ADJ
Adler Group Sa — ADO Properties — FY2016 Earnings Presentation
33 slides from Adler Group Sa's earnings presentation, Mar 22, 2017
Slide 1: Annual Results 2016
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Slide 2: Overview & Investment
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Slide 3: ADO – The Pure-Play Berlin Residential Specialist
ADO – THE PURE-PLAY BERLIN RESIDENTIAL SPECIALIST Investment highlights Key metrics (end of Q4 2016) Buildings 331 1 Berlin residential pure play with a € 2.3bn quality portfolio Residential units 17,701 Efficient, fully integrated and scalable platform with clear Commercial units 999 Total units 18
Slide 4: Highlights 2016
HIGHLIGHTS 2016 • Annual l-f-l rental growth of 6.0% beating our 5.0% guidance Strong • Vacancy reduction to 2.5% operational • Privatization target of 100 units achieved performance • Turn-around of Löwenberger Str. & Carlos successfully concluded • Acquisition of 3,084 units during 2016 Acquisitio
Slide 5: Highlights 2016 (continued)
HIGHLIGHTS 2016 (continued) • Strong operational performance with like-for-like OPERATIONS & BALANCE SHEET 2016 2015 rental growth of 6% above our target of 5% Rental growth l-f-l (LTM) 6.0% 7.3% Vacancy rate 2.5% 4.0% • Vacancy rate significantly improved by 150bps since the beginning of the year t
Slide 6: ADO Portfolio & Strategy
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Slide 7: New Clusters Methodology Provides More Insight into Portfolio
NEW CLUSTERS METHODOLOGY PROVIDES MORE INSIGHT INTO PORTFOLIO • The new clusters are based on • proximity to the city center and • construction year as an indicator for building style as large settlements were mainly built in the period 1960 – 1990 • It is based on postcode areas to provide a 100% c
Slide 8: New Clusters – Real Life Examples
NEW CLUSTERS – REAL LIFE EXAMPLES S-Bahn-Ring City Ring NEW MODEL Central S-Bahn-Ring (1960-1990) City Ring (1960-1990) District Charlottenburg Steglitz Neukölln Pankow Reinickendorf Property value in € m 8.0 5.6 176.7 31.5 235.6 Number of residential units 24 31 1,678 190 2,463 Avg. In-place rent i
Slide 9: Quality, Balanced, Berlin Focused Portfolio
QUALITY, BALANCED, BERLIN FOCUSED PORTFOLIO High quality turn of the century buildings… …with low number of restrictions remaining 3,000 2,824 36% % of Fair Value # of units 2,500 29% 2,000 18% 1,500 1,000 621 659 7% 7% 409 4% 500 90 86 29 0 1919- 1950- 1965- 1973- 1991- 2016 2017 2019 2021 2022 202
Slide 10: Strong Growth Profile
STRONG GROWTH PROFILE Continuing of strong growth profile with 3,084 units acquired in 2016, on track for our goal of 30,000 units by 2020 “Hohenzollerndamm”, “Horizon”, “Wilhelminenhofstr.”, Wilmersdorf Neukölln Köpenick S-Bahn Ring City Ring TOTAL ACQUISITIONS (2016) Central S-Bahn Ring (1960-1990
Slide 11: Further Units Acquired
FURTHER UNITS ACQUIRED 581 units acquired in 9 transactions since the end of Q4 Signed after Q4 2016 • € 124.2m of gross asset value, mostly Altbau, acquired in 9 transactions mixing asset and share deals. • 13 buildings in Central cluster, 8 buildings in S-Bahn Ring cluster and 1 building in City R
Slide 12: Strong Like-for-Like Growth Generated by Smart Targeted CAPEX Investments
STRONG LIKE-FOR-LIKE GROWTH GENERATED BY SMART TARGETED CAPEX INVESTMENTS L-f-L contribution by clusters Full year growth of 6.0% above our 2016 target of 5% S-Bahn Ring 8.0% S-Bahn (1960- 7.3% Ring 1990) 0.5% 0.4% Central 6.0% 3.3% 2.0% 3.8% 4.7% Guidance: 2.7% 5.0% 1.3% 1.6% 1.0% From modernizatio
Slide 13: Significant Vacancy Reduction of 150bps Delivers Additional Growth
SIGNIFICANT VACANCY REDUCTION OF 150BPS DELIVERS ADDITIONAL GROWTH • High completion rate of modernization works and subsequent letting results in a decrease of Vacancy split¹ vacancy by 150bps (compared to Q4 2015). Modernization of around 1,100 residential units 5.0% has been completed in 2016 of
Slide 14: Carlos Portfolio: 7.2% L-F-L Rental Growth in 2016
CARLOS PORTFOLIO: 7.2 % L-F-L RENTAL GROWTH IN 2016 Key metrics (per December 2016) Occupancy rate improved by 310 bps in 2016 99% Location Spandau & Reinickendorf 98.1% Acquisition cost € 408m/ € 1,022 per sqm 98% Current fair value € 534m/ € 1,339 per sqm 97% Number of residential 5,748 units 96%
Slide 15: Carlos Portfolio Generates Strong Value Growth
CARLOS PORTFOLIO GENERATES STRONG VALUE GROWTH Net rent & €/sqm – income growth (in € k) 2,200 € 5.45 € Residential Commercial Parking €/sqm resi 5.43 € 2,150 € 26 € 5.40 € 26 € 2,100 € 25 € 25 € 25 € 53 € 25 € 53 € 53 € 5.35 € 2,050 € 25 € 25 € 53 € 53 € 25 € 25 € 50 € 25 € 49 € 49 € 2,000 € 26 € 5
Slide 16: Case Study – Löwenberger Straße 2-4: Final Figures
CASE STUDY – LÖWENBERGER STRAßE 2-4: FINAL FIGURES Key metrics (December 2016) Key actions Location Lichtenberg • More than 250 of 379 units modernized (66% of total) Acquisition cost € 14.1m / € 1,215 per sqm Current Fair Value € 28.7m / € 2,472 per sqm • New lettings signed in 2016 with €11.69 per
Slide 17: Horizon Portfolio: First Steps After Takeover
HORIZON PORTFOLIO: FIRST STEPS AFTER TAKEOVER Integration and improvement started KEY METRICS (PER JANUARY, 2017) Location Neukölln Acquisition cost € 174m/ € 1,599 per sqm Current fair value € 177m/ € 1,626 per sqm Number of residential units 1,677 Avg. rent / sqm / month: At acquisition € 6.17 Cur
Slide 18: Privatization Activities on Target
PRIVATIZATION ACTIVITIES ON TARGET Privatization results and outlook Sales profit – Avg. sales price vs. portfolio value • 109 units sold in 2016 for gross proceeds of +7.6% 3,013 €/sqm 2,801 € 20m, generating close to 33% value uplift compared to average book value of Central Locations and 7.6% Avg
Slide 19: Financial Overview
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Slide 20: Overview of Balance Sheet
OVERVIEW OF BALANCE SHEET In € m Dec 31, 2016 Dec 31, 2015 Comments (Audited) (Audited) •1 1 The fair value of the portfolio was assessed by CBRE as of Dec Investment properties 1 2,291 1,459 31, 2016. Total portfolio value of € 2,319m as at Dec 31, 2016 Other non-current assets 6 4 includes investm
Slide 21: Total Portfolio Value: € 2.3bn with Further Upside
TOTAL PORTFOLIO VALUE: € 2.3BN WITH FURTHER UPSIDE S-Bahn Ring City Ring PORTFOLIO VALUATION1 Central S-Bahn Ring City Ring Total (1960-1990) (1960-1990) Fair Value (€m) 917 272 339 148 650 2,326 Fair Value (€/sqm) 2,270 2,034 1,810 2,127 1,377 1,836 Discount rate (%) 4.5% 4.6% 4.7% 4.8% 5.2% 4.7% A
Slide 22: Fair Market Value of Portfolio Increased by € 800m
FAIR MARKET VALUE OF PORTFOLIO INCREASED BY € 800 m, UP 55% COMPARED TO YEAR END 2015 Fair market value (in € m)1: 451 2,326 359 Yield effect 365 25 -17 92 Rent effect 1,502 FMV 2015 Acquisitions CAPEX Privatization Revaluation FMV 2016 1) Including condominium units with a fair market value of € 47
Slide 23: EPRA NAV Growing by Close to € 750m
EPRA NAV GROWING BY CLOSE TO € 750M EPRA NAV (in € m) EPRA NAV per share (in €) 451 1,591 10.25 36.08 Yield 8.16 Yield 359 effect effect 16 1.55 0.53 293 92 Rent effect 24.10 -0.35 2.09 Rent effect 844 -13 Growth of EPRA Net Asset Value per share mainly resulting from yield compression (34%) and ope
Slide 24: Solid Balance Sheet with Fixed Rate Financing
SOLID BALANCE SHEET WITH FIXED RATE FINANCING Key financing figures Diversified funding profile with weighted average debt maturity of approx. 5.3 years Bank debt (€m) • Total debt of € 905m, primarily mortgage backed/secured 1.7% 400 • Almost all loans are fixed interest rate or hedged 1.9% 322 • N
Slide 25: Overview of Profit and Loss
OVERVIEW OF PROFIT AND LOSS Comments In € m Year 2016 Year 2015 Q4 2016 1• Income from rental activities increased by 36% driven by l-f-l rental Net rental income 84.7 61.7 23.4 growth of 6% and acquisitions. Quarter-on-quarter growth was 4.5%. Q4 Income from facility services 5.1 4.1 1.2 2016 refle
Slide 26: Overview of FFO
OVERVIEW OF FFO Comments In € m Year 2016 Year 2015 Q4 2016 1• EBITDA from rental activities increased by 31% due to our strong 6% like- 1 for-like rental growth and successful acquisitions. Quarter-on-quarter EBITDA from rental activities 63.4 48.5 17.1 growth was 3%. The annualized Q4 figures repr
Slide 27: Guidance 2017
GUIDANCE 2017 We anticipate like-for-like rental growth going forward to be at least 5% which should positively 1 impact portfolio value, EPRA NAV and EPRA NAV per share We update our year-end 2017 FFO1 run-rate to be at least € 60m after investing our 2 cash position of around € 150m 3 Average cost
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Slide 29: Financial Calendar 2017
FINANCIAL CALENDAR 2017 May 02, 2017 Annual General Meeting May 03, 2017 Ex-Dividend date May 17, 2017 Publication Q1/2017 financial report Aug 17, 2017 Publication Q2/2017 financial report Nov 15, 2017 Publication Q3/2017 financial report “Leibnizstr.”, “Bötzowstr.”, “Ahornstr.”, “Gutenbergstr.”, “
Slide 30: Information on the Share
INFORMATION ON THE SHARE Share price development Shareholder structure 40.0 37.5 35.0 32.5 ADO Free Group 30.0 float 38.24% 27.5 61.76% 25.0 22.5 20.0 ADO (Xetra) SDAX FTSE EPRA/NAREIT Germany 17.5 31/12/15 31/03/16 30/06/16 30/09/16 31/12/16 KEY DATA ON THE SHARES OF ADO PROPERTIES S.A. Stock excha
Slide 31: Portfolio Valuation Overview – Old Clustering
PORTFOLIO VALUATION OVERVIEW – OLD CLUSTERING PORTFOLIO Central North East South West Total € 1,836 average value per sqm VALUATION1 Building locations: Fair Value (€ m) 1,063 346 224 316 377 2,326 N Central Locations North 1,511 Discount rate (%) 4.5% 5.1% 4.8% 4.7% 5.1% 4.7% Pankow East Reinickend
Slide 32: Portfolio Valuation Overview – New Clusters
PORTFOLIO VALUATION OVERVIEW – NEW CLUSTERS PORTFOLIO VALUATION S-Bahn Ring City Ring Central S-Bahn Ring City Ring Total 31/12/2016 (1960-1990) (1960-1990) Property value (in € m) 917 272 339 148 650 2.326 Number of units 5,507 1,613 2,988 825 6,768 17,701 Avg. In-place rent (in € / sqm / month) 6.
Slide 33: ADO Properties S.A.
ADO PROPERTIES S.A. 20 rue Eugène Ruppert L-2453 Luxembourg www.ado.properties 33