Adler Group Sa · XETR:ADJ
Adler Group Sa — Q3 2021 Earnings Presentation
35 slides from Adler Group Sa's earnings presentation, Nov 30, 2021
Slide 1: Results presentation
Results presentation 30 November 2021
Slide 2: Content
Content 1 Q3 2021 Overview 2 Portfolio & Operational Performance 3 Financial Performance 4 Guidance 2021 5 Appendix 2 Braunschweiger Strasse, Berlin
Slide 3: Strong Q3 2021 results
Strong Q3 2021 results FINANCIAL PORTFOLIO & ESG PERFORMANCE DEVELOPMENTS ACHIEVEMENTS ◼ NRI +28% to €259m ◼ +3.9% like-for-like rental growth ◼ Entering the top 5% of real estate companies globally ◼ FFO 1 +36% to €101.9m ◼ Avg. residential rent €6.61/sqm ◼ ESG report published ◼ NTA per share up +
Slide 4: Portfolio & Operational Performance
Portfolio & Operational Performance 4
Slide 5: Strong LFL rental growth of +3.9% driving valuation
Strong LFL rental growth of +3.9% driving valuation TERM SHEET ADDITIONAL VALUE UPLIFT UPDATE ON WITH LEG PORTFOLIO AND FURTHER DEVELOPMENTS CONCLUDED DISPOSAL PORTOLIO IMPROVEMENTS Term sheet signed with LEG On 26 October, term sheet signed Portfolio value of yielding assets Gerresheim added to the
Slide 6: Enhancing portfolio quality through active capital recycling
Enhancing portfolio quality through active capital recycling… Consistent high quality of yielding assets with GAV and fair value per sqm at record levels Number of rental units over time (in thousand) Yielding assets GAV (€bn) Fair value (€/sqm) POWERED BY STRONG 81.8 9.0 9.1 8.6 75.7 8.3 2,065 70.7
Slide 7: Structurally driving value, up +8.7% until Q3 2021
… structurally driving value, up +8.7% until Q3 2021 Fair value increase on the back of strong LFL rental growth and further positive yield development and CAPEX investments across the core yielding portfolio Like-for-like fair value growth (%) Yielding portfolio vacancy rate (%) 8.0% 8.7% 8.5% LIKE
Slide 8: Accelerated LFL rental growth across the yielding portfolio
Accelerated LFL rental growth across the yielding portfolio Portfolio continues its trend of delivering sector leading LFL growth across Berlin as well as our other locations, driving consistently superior value uplift profile Residential average rent (€/sqm/m) LFL residential rental growth (%) LFL
Slide 9: Recent activity on the build-to-hold pipeline and divestments
Recent activity on the build-to-hold pipeline and divestments Build-to-hold portfolio overview Recent developments ◼ Completion of the build-to-hold pipeline should add c.12,000 units to the rental portfolio at an anticipated gross yield on cost of 4.0% 2 ◼ Given the central locations of the build-t
Slide 10: Financial Performance
FIADLER GROUP Financial Performance
Slide 11: Significant operational improvements driving operational growth
Significant operational improvements driving operational growth Total revenue (€m) EBITDA from rental activities (€m) 438.5 169.2 416.9 +5% +26% 133.8 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Net rental income (€m) FFO 1 (€m) 259.3 101.9 Financial Performance +28% 74.7 +36% 203.2 Q3 2020 Q3 2021 Q3 2020 Q3 2
Slide 12: Further simplification of capital structure through deleveraging
Further simplification of capital structure through deleveraging BOND ISSUANCE DELEVERAGING FINANCIAL FINANCIAL AND FURTHER VIA PORTFOLIO METRICS OF SUMMARY AND FINANCING OPTIMISATION THE GROUP KEY MESSAGES €1.5bn bonds issued in January Disposal of c. 15,500 units to LEG Average cost of debt reduce
Slide 13: Balanced maturity profile with strengthened financial KPIs
Balanced maturity profile with strengthened financial KPIs Debt KPIs for Q3 2021 Sources of funding Bond covenants Secured debt 38% Total interest-bearing net debt (€m) 8,323 Required Current level Covenants level (30 Sep 2021) 3% Net LTV 55.4%1/ 57.0%2 LTV (Financial indebtedness / <60% 53.4% ICR (
Slide 14: Maturity schedule
Maturity schedule Overview of debt maturities (€m) Comments Upcoming maturities are covered through a 3% 10% 12% 15% 11% 18% 7% 25% combination of €396m cash on hand, expected receivables and active capital recycling measures including the recently 2,151 announced transactions In particular, the
Slide 15: LTV moving towards <50% on the back of anticipated disposals
LTV moving towards <50% on the back of anticipated disposals Pro-forma LTV evolution (%) Key 57.0% 1 Retention of the Gerresheim project at a book 0.8% 0.8% value of €270m, leading to the unwinding of the 0.7% 0.4% associated financial asset and investment in real 1.8% estate companies, whilst addin
Slide 16: Guidance 2021
Guidance 2021 16
Slide 17: Guidance FY2021 confirmed
Guidance FY2021 confirmed 2021 guidance Concluding remarks Full-year guidance Yielding asset portfolio value increased by €626m Net rental resulting in a +8.7% LFL value uplift in the first nine €340-345m income (€m) months of 2021 on the back of a +3.9% LFL rent increase FFO 1 (€m) €135-140m Vacanc
Slide 18: Subsequent events - Continuous progress
Subsequent events - Continuous progress A Strategic asset disposals – substantial progress ◼ On 4 October, we announced a strategic review of our portfolio ◼ The contemplated portfolio transaction with LEG, regarding 15,500 units and a total value of c. €1.4bn is in the final stages of negotiation a
Slide 19: Financial Calendar & Contacts
Financial Calendar & Contacts Adler Group S.A. results publication dates 2022 Investor relation contacts Mario Groß 31 March 2022 Publication Annual Report 2021 Head of IR & PR [email protected] 31 May 2022 Publication Q1 2022 Results 31 August 2022 Publication Q2 2022 Results Julian Mahlert I
Slide 20: Appendix
FIADLER GROUP Appendix
Slide 21: Q3 2021 – Company KPIs
Q3 2021 – Company KPIs Assets overview - breakdown (€m) Q3 2021 Q3 2020 YoY delta (%) Operating results (€m) Q3 2021 Q3 2020 YoY delta (%) Yielding portfolio value 9,063 7,766 17% Total revenue 438.5 416.9 5% Development pipeline value 4,144 3,634 14% Net rental income 259.3 203.2 28% Build-to-hold
Slide 22: Rental portfolio - realising +3.9% LFL rental growth
Rental portfolio - realising +3.9% LFL rental growth Strong performance in Q3 2021 with sector-leading LFL rental growth of 3.9% Lettable Rental yield Q3 21 avg. NRI Strong growth Fair value Fair value NRI1 Vacancy Vacancy Reversionary Location Units area (in-place rent Δ YoY €m Q3 21 €/sqm Q3 21 €m
Slide 23: Rental portfolio - CAPEX and maintenance
Rental portfolio - CAPEX and maintenance Consistent and effective maintenance spending requires less modernisation CAPEX going forward Total CAPEX and maintenance (€m) Maintenance expense (€/sqm) PROCUREMENT Maintenance OPTIMISATION 8.9 Modernisation CAPEX 8.6 AND INCREASED CAPEX SCALE 7.2 6.5 6.7 6
Slide 24: Build-to-hold portfolio
Build-to-hold portfolio Five projects under construction Construction Building Construction Area Total CAPEX % of CAPEX GAV Yield on # Project name City period permit started (k sqm) (€m) spent (€m) cost1) (%) 1 SLT 107 Schwabenlandtower Stuttgart 2019-2022 ✓ ✓ 16 63 30% 69 3.9% € 2 CologneApart Vau
Slide 25: Forward sales
Forward sales Fully de-risked and self funded through forward sales to institutional buyers, three projects to be delivered by YE 2021 Area Stage of # Project name City Buyers Construction period GAV (€m) ▪ Ernst-Reuter-Platz, (k sqm) completion (%)1 fully leased and handed over to the 1 Residenz am
Slide 26: Condominium projects
Condominium projects Palatium, Dreizeit and Westend condo projects expected to be handed over to buyers in the coming months Construction Area Stage of # Project name City GAV (€m) #Units % units sold period (k sqm) completion (%) 1 Westend Ensemble - Grand Ouest - LEA A Frankfurt 2017-2021 9 90 164
Slide 27: Strategic upfront disposals
Strategic upfront disposals Three projects sold in Q3 2021 with closing expected before year end Area # Project name City Remarks (k sqm) 1 2stay Frankfurt Frankfurt 41 Sold in Q3, expected closing Q4 2021 2 Arthur-Hoffmann-Straße Leipzig 2 Sold in Q3, expected closing Q4 2021 3 NewFrankfurt Towers
Slide 28: Composition of debt structure and average cost of debt
Composition of debt structure and average cost of debt Volume €m IFRS €m Maturity Nominal interest rate Other comments Premature redemption Conditions for premature redemption ADLER Real Estate bonds (unsecured) 2017/21 170 170 6 Dec 2021 1.50% Anytime Subject to make-whole provision 2017/24 300 292
Slide 29: Profit & Loss statement
Profit & Loss statement P&L statement Comments In € million 9M 2021 9M 20201 Compared to 9M 2020, net rental income as of Q3 2021 has improved to €259m mainly due to Net rental income 259 1 203 1 consolidation of ADLER Real Estate into the Group as per April 2020 and ruling that the Income from faci
Slide 30: EBITDA from rental activities and EBITDA total
EBITDA from rental activities and EBITDA total EBITDA from rental activities EBITDA Total In € million 9M 2021 9M 2020 In € million 9M 2021 9M 2020 Net rental income 259 203 Income from rental activities 344 266 Income from facility services and recharged utilities costs 85 63 Income from property d
Slide 31: FFO calculation
FFO 1 and FFO 2 FFO 1 calculation FFO 2 calculation In € million, except per share data 9M 2021 9M 2020 In € million, except per share data 9M 2021 9M 2020 Net rental income 259 203 EBITDA total 238 1 158 Income from facility services and recharged utilities costs 85 63 Net cash interest -70 -68 Inc
Slide 32: Balance sheet
Balance sheet Balance sheet Comments In € million Q3 2021 FY 2020 1 The fair values of the build-to-hold project developments and the yielding investment properties Investment properties including advances 11,213 1 10,111 were assessed by CBRE and NAI Apollo, respectively and show the impact of posi
Slide 33: EPRA NAV metrics
EPRA NAV metrics EPRA NAV metrics calculation In € million, except per share data Q3 2021 FY 2020 EPRA Measure NAV NRV NTA NDV NAV NRV NTA NDV Total equity attributable to owners of the Company 4,441 4,441 4,441 4,441 4,146 4,146 4,146 4,146 Revaluation of inventories 81 81 81 81 52 52 52 52 Deferre
Slide 34: Net LTV
Net LTV LTV calculation Comments The selected financial assets have declined to €563m and contain purchase price receivables In € million Q3 2021 FY 2020 1 amongst others. They include 1) netted financial receivables (€28m) which were reduced due Corporate bonds and other loans and borrowings 8,337
Slide 35: Disclaimer
Disclaimer THIS PRESENTATION AND ITS CONTENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. This presentation (“Presenta