Adler Group Sa · XETR:ADJ

Adler Group Sa — ADO Properties — Merger or Acquisition (December 2019)

26 slides from Adler Group Sa's merger presentation, Dec 16, 2019

  1. Slide 1: Creating a fully integrated housing platform in core German cities

    Creating a fully integrated housing platform in core German cities 16 DECEMBER 2019

  2. Slide 2: Transaction summary

    Transaction summary ADO Existing 33% stake All share voluntary tender offer for ADLER 1 NAV / NAV all share combination1 to become treasury shares ■ 0.4164 ADO Properties (“ADO”) shares for 1 ADLER share ADLER ■ 52.2% irrevocables received by ADLER shareholders2 ■ 17.3% premium to ADLER shareholders

  3. Slide 3: Terms of the transaction

    Terms of the transaction  ADO announces simultaneous transactions with ADLER and Consus:  Voluntary public tender offer for ADLER, 52% irrevocables Transaction  Acquisition of 22% stake in Consus, one of the largest residential developers in Germany  Call option secured on further 51% stake from

  4. Slide 4: Creating a leading platform for growth in German residential

    Creating a leading platform for growth in German residential Transformational transaction creating a roadmap to Top-3 listed residential real 1 estate company in Germany, with enhanced liquidity and likely MDAX candidate in the near-term 2 Balanced portfolios with exposure to strong locations and ne

  5. Slide 5: Creating an €8.6bn rental portfolio with a growth path into Germany’s core cities

    Creating an €8.6bn rental portfolio with a growth path into Germany’s core cities Combined portfolio geographical split Combined portfolio value1,4 and GDV (€bn) 15.4 Schleswig- 0.2 Holstein Mecklenburg- 0.1 Pomerania Hamburg 2.0 Bremen 0.1 0.2 Brandenburg 6.83 Lower 1.2 0.7 Berlin Saxony 3.6 Berlin

  6. Slide 6: The combination has compelling strategic rationale and creates significant value for shareholders

    The combination has compelling strategic rationale and creates significant value for shareholders  ■ Complementary portfolios concentrated in attractive cities and regions across Germany Strategic fit ■ Broadening our scope from Berlin to strong locations across Germany ■ Critical scale achieved –

  7. Slide 7: Key investment highlights

    1 foe Ae \ fell Zl bia Hag val Key investment highlights CONSUS

  8. Slide 8: Combined company will become the 3rd largest listed residential player in Germany

    Combined company will become the 3rd largest listed residential player in 1 Germany Top-20 listed Continental European players by GAV (€bn) Top-10 listed Continental European residential players by GAV (€bn) 58.3 47.9 47.9 25.6 12.01 11.5 8.6 8.0 5.4 5.1 5.0 4.7 3.6 1.3 25.6 25.1 23.0 21.5 19.6 15.0

  9. Slide 9: Enhanced liquidity and likely MDAX candidate in the near-term

    1 Enhanced liquidity and likely MDAX candidate in the near-term Pre-deal Post-deal1,3  ADLER 33.3%1  Klaus Wecken 7.0%  Union Investment 5.1%  Mezzanine IX Investors 6.8%  Vanguard 2.4%  Fairwater Capital 6.4%  Norges 2.2%  Free Float2 ~80%  Blackrock 2.1%  Union Invest 3.6%  Free Float2

  10. Slide 10: Combination delivers increased scale, profitability and investment grade profile

    1 Combination delivers increased scale, profitability and investment grade profile (€mm, unless stated otherwise) GRI1 160 371 530 NRI1 136 250 386 Financial EBITDA1 97 171 2684 EBITDA margin (rental) %2 71% 69% 69% GAV (€bn) ~3.6 ~5.0 ~8.6 EPRA NAV (€bn) ~2.8 ~2.0 ~4.75 Occupancy (%)3 97.4% 93.7% 9

  11. Slide 11: Combination delivers critical scale and diversification

    2 Combination delivers critical scale and diversification GAV (€bn) 3.6 5.0 8.6 Residential Residential Other development development 1% Other 5% 3% Commercial 3% Commercial 3% Commercial 18% 9% Split by type Residential1 80% Residential1 92% Residential1 87% Berlin Other 15% 31% Other Kiel Berlin 4

  12. Slide 12: Build-to-hold strategy to deliver +15k new units of housing in Top-9 cities

    Build-to-hold strategy to deliver +15k new units of housing in Top-9 cities, 3 where the ongoing housing shortage is perceived to be strongest Demand of 3.2m units with c. € 1 trillion GDV1 until 2030 Demand of 3.2m new apartments until 2030 Strong and consistent rental price growth Total demand Ren

  13. Slide 13: Overview of the transaction with Consus Real Estate

    3 Overview of the transaction with Consus Real Estate Transaction description Consus ownership and portfolio overview  Acquisition of 22% stake in Consus from existing Free Float 22% Stake minorities in cash Acquired 18%  ADO pays a cash consideration of €9.72 per share, or €294m in total 6% Pro-f

  14. Slide 14: Consus in-house development projects in Top-9 cities pave the way for NAV-enhancing growth

    Consus in-house development projects in Top-9 cities pave the way for NAV- 3 enhancing growth Stuttgart1 Berlin Leipzig1 GDV (€m) 2,139 GDV (€m) 1,355 GDV (€m) 531 Area (k sqm) 545 Area (k sqm) 207 Area (k sqm) 321 Avg. sales price (€/sqm) 3,923 Avg. sales price (€/sqm) 6,534 Avg. sales price (€/sqm

  15. Slide 15: Embedded value of c.€1.0bn in build-to-hold portfolio allows for NAV-accretive growth

    3 Embedded value of c.€1.0bn in build-to-hold portfolio allows for NAV-accretive growth in the next years Hold portfolio | Estimated value (€/sqm) Comments €/sqm  ADO is offering a weighted average price of €8.651 per share for Consus, valuing its on-balance sheet build-to-hold portfolio at an impl

  16. Slide 16: Consus build to hold portfolio provides an attractive secured land bank

    4 Consus build to hold portfolio provides an attractive secured land bank with full discretion to develop at our own pace Consus upon exercise of Fully integrated development platform: call option Majority to hold, with c.1/3 2020 for sale through de-risked  Over 895 employees across 9 cities, that

  17. Slide 17: Significant synergies unlocked through the combination

    5 Significant synergies unlocked through the combination Unsecured bonds - €2.0bn €5m - €10m Mezzanine debt >10% - €0.6bn €83m - €85m 2020 Senior/Junior debt >5-10% - €0.4bn €15m - €17m 2020 Bank loan - €1.6bn €4m - €8m Financing Medium Senior/Junior debt >3.5-5% - €0.5bn €5m - €8m 2020 synergies AD

  18. Slide 18: Strong operational overlap allowing synergetic business combination

    5 Strong operational overlap allowing synergetic business combination Headquarters and management offices Portfolio and geographical overview Portfolio overview Residential units 16,2631 57,155 Commercial units 1,3861 934 Portfolio mgmt.    Facility mgmt.   Condo sales   Development   Geogr

  19. Slide 19: Significant operational synergies identified for both ADLER and Consus

    5 Significant operational synergies identified for both ADLER and Consus Operational synergies (in €m) Comments  Identified operational run-rate synergies of €28-38m per 40 Run-rate 13 - 18 28 - 38 annum 35  Centralization of headquarters, management/supervisory boards and IT to enhance overall co

  20. Slide 20: Strong corporate governance and management, based on Business Combination Agreement

    6 Strong corporate governance and management, based on Business Combination Agreement 1 Tier Board structure to be expanded to 10 members Experienced management team combining knowledge of ADLER and ADO Luxembourg Company registered and Germany listed with Luxembourg Company structure Commitment to

  21. Slide 21: Experienced Management Team

    6 Experienced Management Team Maximilian Rienecker Thierry Beaudemoulin Sven-Christian Frank Co-Chief Executive Officer Co-Chief Executive Officer Chief Operating Officer  Experience in the real  Over 20 years of  Previously held senior estate industry after roles experience in the real positions

  22. Slide 22: Board of Directors consisting of 5 Independent Directors and a chairman with a casting vote

    Board of Directors consisting of 5 Independent Directors and a chairman with a 6 casting vote Dr. Peter Maser Tomas de Vargas Machuca Chairman Deputy Chairman German, born in 1961 British, born in 1974 CEO of BCP Partner Deloitte Arzu Akkemik Maximilian Rienecker Thierry Beaudemoulin Dr. Michael Büt

  23. Slide 23: Indicative timeline

    Indicative timeline Date Key dates 15 December 2019  Announcement of transaction for ADLER and 22% stake in Consus Mid December 20191  Closing of 22% stake acquisition in Consus 20 January 2020  Submission of offer document to BaFin 6 February 2020  Approval of offer document by BaFin expected 8

  24. Slide 24: Ultimate combination has a compelling strategic rationale for all parties

    Ultimate combination has a compelling strategic rationale for all parties De-risks business model Diversify outside Berlin Enhanced portfolio quality from build to sell to hold Cooperation with Consus provides Access to irreplicable portfolio Secured sales access to southern Germany in Berlin FFO ac

  25. Slide 25: Q&A

    1 foe Amn eg fall a bn Hag sivas Q&A CONSUS

  26. Slide 26: Disclaimer

    Disclaimer IMPORTANT: NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. This presentation is neither an offer to purchase nor a solicitation of an offer to sell s

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