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Instone Real Estate Group AG
Quarterly Report • Aug 11, 2022
226_10-q_2022-08-11_37b202e8-2936-4dbe-9739-f781d072ed17.pdf
Quarterly Report
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INSTONE REAL ESTATE GROUP SE
INTERIM CONSOLIDATED REPORT Q2 2022
30 JUNE 2022
Key indicators
Interim group management report
Condensed consolidated interim financial statements
Other Information
| Key figures at a glance | TABLE 001 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | ||
| Key performance indicators | |||
| Volume of sales contracts | 145.6 | 207.7 | |
| Volume of new approvals 1 | 285.3 | 235.8 | |
| Revenue adjusted | 268.0 | 260.5 | |
| Key earnings figures | |||
| Gross profit adjusted | 68.8 | 76.7 | |
| Gross profit margin adjusted | In % | 25.7 | 29.4 |
| EBIT adjusted | 35.9 | 41.1 | |
| EBIT margin adjusted | In % | 13.4 | 15.8 |
| EBT adjusted | 28.5 | 33.5 | |
| EBT margin adjusted | In % | 10.6 | 12.9 |
| EAT adjusted | 19.6 | 23.4 | |
| EAT margin adjusted | In % | 7.3 | 9.0 |
| Key liquidity figures | |||
| Cash flow from operations | 19.5 | 146.2 | |
| Cash flow from operations without new investments |
90.2 | 192.0 | |
| Free cash flow | – 56.6 | 148.8 |
1 Excluding volume of approvals from joint ventures consolidated at equity.
| Key figures at a glance | TABLE 001 | ||
|---|---|---|---|
| In millions of euros | |||
| 30/06/2022 | 31/12/2021 | ||
| Key performance indicators | |||
| Project portfolio | 7,727.4 | 7,500.0 | |
| Key balance sheet figures | |||
| Total assets | 1,681.2 | 1,520.8 | |
| Equity | 567.7 | 590.9 | |
| Cash and cash equivalents and term deposits1 |
213.4 | 151.0 | |
| Net financial debt2 | 287.1 | 239.5 | |
| Leverage3 | 1.8 | 1.5 | |
| Loan-to-cost4 | In % | 23.0 | 20.1 |
| ROCE5 adjusted | In % | 18.5 | 22.0 |
| Employees | |||
| Number | 486 | 457 | |
| FTE6 | 409.2 | 387.6 |
1 Term deposits are comprised of cash investments of more than three months.
2 Net financial debt = financial liabilities less cash and cash equivalents and term deposits.
3 Leverage = net financial debt/12-month adjusted EBITDA.
4 Loan-to-cost = net financial debt/(inventories + contract assets).
5 Return on capital employed = LTM EBIT adjusted/(four-quarter average equity + net financial debt). 6 Full-time employees.
TABLE OF CONTENTS
Interim group management report
- Results of operations, net assets and financial position
- Project business at a glance
- Risk and opportunities report
- Outlook
Condensed consolidated interim financial statements
- Condensed consolidated income statement
- Condensed consolidated statement of comprehensive income
- Condensed consolidated statement of financial position
- Condensed consolidated statement of cash flows
- Condensed consolidated statement of changes in equity
- Selected explanatory notes to the condensed consolidated interim financial statements
Other information
- Insurance of legal representatives
- Review report
- Disclaimer
- Quarterly comparison
- Multi-year overview
- Contact / About us / Financial calendar
INTERIM GROUP MANAGEMENT REPORT
- Interim group management report
- Results of operations, net assets and financial position
- Project business at a glance
- Risk and opportunities report
- Outlook
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
Results of operations, net assets and financial position
Results of operations
The following presentation of the adjusted results of operations reflects the business of the Instone Group, which was largely influenced by project developments. The adjustments to the adjusted results of operations in relation to the income statement are described in the segment reporting on page 29.
| Adjusted results of operations | TABLE 002 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| Revenue adjusted | 268.0 | 260.5 | 2.9% |
| Project costs adjusted | – 199.2 | – 183.8 | 8.4% |
| Gross profit adjusted | 68.8 | 76.7 | – 10.3% |
| Gross profit margin adjusted | 25.7% | 29.4% | |
| Platform costs adjusted | – 34.4 | – 38.1 | – 9.7% |
| Share of results of joint ventures adjusted | 1.5 | 2.5 | – 40.0% |
| Earnings before interest and tax (EBIT) adjusted |
35.9 | 41.1 | – 12.7% |
| EBIT margin adjusted | 13.4% | 15.8% | |
| Income from investments adjusted | 0.0 | 0.1 | – 100.0% |
| Financial result adjusted | – 7.5 | – 7.6 | – 1.3% |
| Earnings before tax (EBT) adjusted | 28.5 | 33.5 | – 14.9% |
| EBT margin adjusted | 10.6% | 12.9% | |
| Income taxes adjusted | – 8.9 | – 10.1 | – 11.9% |
| Earnings after tax (EAT) adjusted | 19.6 | 23.4 | – 16.2% |
| EAT margin adjusted | 7.3% | 9.0% |
Revenue
Adjusted revenues improved by 2.9% to €268.0 million in the first six months of the 2022 financial year (previous-year period: €260.5 million). Due to the greater progress in construction in relation to the comparable period for the project developments already sold, revenue increased slightly, although sales were comparatively lower. In the same period of the previous year, two significant institutional sales had already been achieved that could not be achieved in the current financial year due to a reduced demand from investors due to the general environment of uncertainty.
The adjustment of effects from purchase price allocations weighed on the adjusted revenue in the amount of €0.9 million (previous-year period: €0.0 million). The separate measurement of share deals ("Westville" project) increased the adjusted revenue by €17.5 million (previous-year period: €20.1 million).
| Revenue | TABLE 003 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| Revenue | 249.6 | 240.3 | 3.9% |
| + effects from purchase price allocations | 0.9 | 0.0 | n/a |
| + effects from share deal agreements | 17.5 | 20.1 | – 12.9% |
| Revenue adjusted | 268.0 | 260.5 | 2.9% |
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
The adjusted revenues of the Instone Group are spread across the following regions:
1 Includes, among others, Potsdam (€5.8 million), Bamberg (€1.4 million) and Wiesbaden (€1.8 million)
Project costs
The adjusted project costs, mainly consisting of the cost of materials and changes in inventories, rose disproportionately to €199.2 million in the first six months of 2022 (previous-year period: €183.8 million). The sharper increase in project costs is already reflected in the significant increase in construction costs. The individual components of the project costs developed as follows: The increased purchases of land and the continuation of construction activities led to a significant increase in the cost of materials to €268.2 million (previous-year period: €198.6 million). The decreases in inventories of – €82.0 million (previous-year period: – €29.5 million) reflected the increasing level of sales of the projects being realised. Indirect sales expenses in the amount of €1.1 million
(previous-year period: €0.6 million) and material cost-related other operating income from grants and released liabilities of – €3.9 million (previous-year period: €0.0 million) were allocated to adjusted project costs in the first six months of 2022. The adjustment of the capitalised interest in the changes in inventories of €1.0 million (previous-year period: €1.2 million) added to the adjusted project costs. Effects from the amortisation of purchase price allocations reduced adjusted project costs by – €6.8 million (previous-year period: – €4.9 million). Due to the separate valuation of share deals, adjusted project costs again increased by €21.7 million (previous-year period: €17.9 million).
| Project costs | TABLE 004 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| Project costs | 186.2 | 169.1 | 10.1% |
| + effects from purchase price allocations | – 6.8 | – 4.9 | 38.8% |
| + effects from reclassifications | – 1.8 | 1.8 | n/a |
| + effects from share deal agreements | 21.7 | 17.9 | 21.2% |
| Project costs adjusted | 199.2 | 183.8 | 8.4% |
Gross profit
Due to the disproportionate increase in the cost of materials in the first half of 2022, adjusted gross profit decreased to €68.8 million (previous-year period: €76.7 million) compared with the previous year.
| Gross profit | TABLE 005 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| Gross profit | 63.4 | 71.3 | – 11.1% |
| + effects from purchase price allocations | 7.8 | 4.9 | 59.2% |
| + effects from reclassifications | 1.8 | – 1.8 | n/a |
| + effects from share deal agreements | – 4.2 | 2.2 | n/a |
| Gross profit adjusted | 68.8 | 76.7 | – 10.3% |
| Gross profit margin adjusted | 25.7% | 29.4% |
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
The adjusted gross profit margin – calculated from the adjusted gross profit relating to the adjusted revenue – amounted to 25.7% (previous-year period: 29.4%) and therefore remains at a high level even in comparison with the industry.
Platform costs
The adjusted platform costs, consisting of staff costs, other operating income and expenses and depreciation and amortisation, fell to €34.4 million (previous-year period: €38.1 million). In the period under review, indirect sales costs of –€1.1 million (previous-year period: – €0.6 million) and material cost-related other operating income of €3.9 million (previous-year period: €0 million) were reclassified in project costs.
| Platform costs | TABLE 006 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| Platform costs | 31.6 | 38.7 | – 18.3% |
| + effects from reclassifications | 2.8 | – 0.6 | n/a |
| Platform costs adjusted | 34.4 | 38.1 | – 9.7% |
Staff costs at the end of the second quarter of 2022 were €26.2 million (same period in the previous year: €25.1 million) – a year-on-year rise of around 4%. The higher number of employees as at 30/06/2022 of 486 (previous year: 437) to implement the medium-term growth targets as well as the corresponding increase in the FTE figure of 409.2 (previous year: 365.4) was the cause of the increase, while the lower expenses for performance-related bonuses compared with the same period in the previous year had the opposite effect. Other operating income increased to €9.4 million (previous-year period: €1.8 million) was mainly driven by the reversal of provisions for warranties that were no longer needed. Other operating expenses fell to €12.5 million in the period under review (previous-year period: €13.1 million), mainly due to lower warranty expenses. Depreciation and amortisation was €2.4 million (previous-year period: €2.3 million).
Share of results of joint ventures
The adjusted results from investments accounted for using the equity method of €1.5 million (previous-year period: €2.5 million) was almost entirely attributable to the construction activities of the sales from the Berlin Friedenauer Höhe joint ventures in the previous year.
Earnings before interest and tax (EBIT)
Adjusted earnings before interest and tax fell to €35.9 million, mainly due to the disproportionately higher material expenses (previous-year period: €41.1 million).
| EBIT | TABLE 007 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| EBIT | 33.2 | 35.1 | – 5.4% |
| + effects from purchase price allocations | 7.8 | 4.9 | 59.2% |
| + effects from reclassifications | – 0.9 | – 1.2 | – 25.0% |
| + effects from share deal agreements | – 4.2 | 2.2 | n/a |
| EBIT adjusted | 35.9 | 41.1 | – 12.7% |
| EBIT margin adjusted | 13.4% | 15.8% |
Investment and financial result
Adjusted income from investments fell in the period under review to €0 million (previous-year period: €0.1 million).
The reported financial result improved in the financial year to – €8.4 million (previous-year period: – €8.8 million). The reduction in interest expenses is mainly attributable to the decrease in gross debt in previous years.
- Group interim report
- Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
The adjusted financial result also improved to – €7.5 million (previous-year period: – €7.6 million). It includes reclassifications of capitalised interest from project financing prior to the start of sales in the amount of €0.9 million (previous-year period: €1.2 million), which reduced the adjusted project costs by the same amount.
Earnings before tax (EBT)
Adjusted earnings before tax decreased to €28.5 million due to the disproportionate increase in the cost of materials (previous-year period: €33.5 million).
| EBT | TABLE 008 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| EBT | 24.9 | 26.4 | – 5.7% |
| + effects from purchase price allocations | 7.8 | 4.9 | 59.2% |
| + effects from share deal agreements | – 4.2 | 2.2 | n/a |
| EBT adjusted | 28.5 | 33.5 | – 14.9% |
| EBT margin adjusted | 10.6% | 12.9% |
Income taxes
The tax rate in the adjusted results of operations in the first six months of 2022 was 31.2% (previous-year period: 30.1%).
Earnings after tax (EAT)
As a result of the effects mentioned above, the adjusted earnings after tax of the Instone Group totalled €19.6 million (previous-year period: €23.4 million).
Earnings after tax and after minority interests
The non-controlling interests in adjusted earnings after tax amounted to – €0.9 million (previous-year period: – €2.4 million).
Earnings per share
Adjusted earnings per share in the first six months were €0.44 (previous-year period: €0.55) below the value in the same period of the previous year.
| Earnings per share | TABLE 009 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| Shares (in thousands of units)1 | 46,774.0 | 46,988.3 | – 0.5% |
| Owners of the Company | 17.9 | 20.2 | – 11.4% |
| Earnings per share (in euros) | 0.38 | 0.43 | – 11.6% |
| Owners of the Company adjusted | 20.5 | 25.8 | – 20.5% |
| Earnings per share adjusted (in euros) | 0.44 | 0.55 | – 20.0% |
1 Average weighted number of shares as at 30/06/2022.
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
| Condensed statement of financial position1 | TABLE 010 | ||
|---|---|---|---|
| In millions of euros | |||
| 30/06/2022 | 31/12/2021 | Change | |
| Non-current assets | 86.6 | 70.2 | 23.4% |
| Inventories | 925.7 | 843.7 | 9.7% |
| Contract assets | 342.2 | 358.0 | – 4.4% |
| Other current assets | 113.3 | 97.9 | 15.7% |
| Cash and cash equivalents and term deposits | 213.4 | 151.0 | 41.3% |
| Assets | 1,681.2 | 1,520.8 | 10.5% |
| Equity | 567.7 | 590.9 | – 3.9% |
| Liabilities from corporate finance | 202.2 | 199.1 | 1.6% |
| Liabilities from project-related financing | 298.3 | 191.4 | 55.8% |
| Provisions and other liabilities | 612.9 | 539.3 | 13.6% |
| Equity and liabilities | 1,681.2 | 1,520.8 | 10.5% |
1 Items have been adjusted: Term deposits have been allocated to liquid assets due to short- to medium-term availability, and financial liabilities allocated on the basis of their use in corporate finance or project financing.
Net assets The total assets of the Instone Group increased to €1,681.2 million as at 30 June 2022 (31 December 2021: €1,520.8 million). This was mainly attributable to the increase in inventories and liquid assets.
As at 30 June 2022, inventories had risen to €925.7 million (31 December 2021: €843.7 million). This increase in inventories is mainly the result of the purchase of new land for future residential project developments. As at 30 June 2022, acquisition costs and incidental acquisition costs for land amounting to €681.0 million (31 December 2021: €631.9 million) were included in inventories.
Receivables from customers for work-in-progress (gross contract assets) already sold and valued at the current completion level of development rose to €1,000.6 million as at 30 June 2022 (31 December 2021: €858.6 million) due to the increased completion of work-in-progress. Advance payments received from customers amounted to €665.3 million as at 30 June 2022 (31 December 2021: €506.6 million). The increase reflects the progress made in construction in the financial year linked to advance payments from customers.
| Contract assets | TABLE 011 | ||
|---|---|---|---|
| In millions of euros | |||
| 30/06/2022 | 31/12/2021 | Change | |
| Contract assets (gross) | 1,000.6 | 858.6 | 16.5% |
| Payments received | – 665.3 | – 506.6 | 31.3% |
| 335.3 | 352.0 | – 4.7% | |
| Capitalised costs to obtain a contract | 6.9 | 6.0 | 15.0% |
| Contract assets (net) | 342.2 | 358.0 | – 4.4% |
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
Trade receivables fell to €1.6 million as at 30 June 2022 (31 December 2021: €48.2 million). This decline is mainly due to agreed payments for property sales made in December 2021.
The shares accounted for using the equity method, which also included investments in project companies, rose in the first six months of 2022 from €30.8 million to €41.3 million as a result of a capital injection into our Stuttgart joint venture for the "Europaviertel" project and the construction progress of project developments in other joint ventures.
Cash and cash equivalents and term deposits of €213.4 million (31 December 2021: €151.0 million) increased mainly as a result of the expansion of project financing. As at the reporting date, the term deposits amounted to a total of €80.0 million (31 December 2021: €20.0 million) and had a maturity of more than three months.
Non-current financial liabilities increased to €325.1 million as at 30 June 2022 (31 December 2021: €220.9 million). During the same period, current financial liabilities rose to €175.4 million (31 December 2021: €169.6 million). The increase in financial liabilities entirely resulted from the increased utilisation of project financing lines in line with the scheduled construction progress of our projects.
Trade payables fell during the first six months of 2022 to €110.4 million (31 December 2021: €125.1 million) and mainly included the services provided by contractors.
The increase in other current liabilities to €372.3 million (31 December 2021: €292.4 million) resulted mainly from advance payments received for the "Westville" project in the amount of €263.2 million (31 December 2021: €241.4 million) and liabilities from government grants in the amount of €91.3 million (31 December 2021: €29.8 million).
The equity ratio as at 31 March 2022 was 33.8% (31 December 2021: 38.9%). As at the reporting date, group equity included 810,038 treasury shares with acquisition costs of €11.4 million.
Leverage increased slightly compared with 31 December 2021, but remains at a low level.
| Financial liabilities | TABLE 012 | ||
|---|---|---|---|
| In millions of euros | |||
| 30/06/2022 | 31/12/2021 | Change | |
| Non-current financial liabilities | 325.1 | 220.9 | 47.2% |
| Current financial liabilities | 175.4 | 169.6 | 3.4% |
| Financial liabilities | 500.5 | 390.5 | 28.2% |
| – Cash and cash equivalents and term deposits | – 213.4 | – 151.0 | 41.3% |
| Net financial debt (NFD) | 287.1 | 239.5 | 19.9% |
| Inventories and contract assets/liabilities | 1,247.8 | 1,190.1 | 4.8% |
| Loan-to-cost 1 | 23.0 % | 20.1 % | |
| EBIT adjusted (LTM²) | 150.5 | 155.7 | – 3.3% |
| Depreciation and amortisation (LTM²) | 4.7 | 4.6 | 2.2% |
| EBITDA adjusted (LTM²) | 155.2 | 160.3 | – 3.2% |
| Leverage (NFD/EBITDA adjusted [LTM ²]) | 1.8 | 1.5 |
1 Loan-to-cost = net financial debt/(inventories + contract assets/liabilities). 2 LTM = last twelve months.
The increased net debt due to financing-related costs from the project business and the lower result increased leverage slightly to 1.8 times the adjusted EBITDA. At the same time, the ratio of net debt to balance sheet inventories, contract assets and contract liabilities improved to 23.0% (31 December 2021: 20.1%).
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
Financial position
In the first six months of 2022, the utilisation of corporate financing lines remained unchanged at €197.5 million (31 December 2021: €197.5 million). Utilisation of project-financing lines rose to €298.0 million (31 December 2021: €190.9 million). The total funding available, then amounting to €968.8 million (31 December 2021: €612.1 million) increased in the financial year due to the conclusion of new conventional project financing. As at 30 June 2022, loan amounts totalling €601.3 million (31 December 2021: €295.6 million) were available from project financing and €367.5 million (31 December 2021: €316.5 million) from corporate finance.
The balance sheet liabilities from corporate financing valued at the current repayment amount rose to €202.2 million in the first six months of the 2022 financial year (31 December 2021: €199.1 million). Recognised liabilities from project-related financing increased to €298.3 million (31 December 2021: €191.4 million). Recognised total liabilities from financing operations thus increased to €500.5 million at the reporting date (31 December 2021: €390.5 million). The current project financing included in this is comprised of option agreements for extension.
The maturities of the non-discounted repayment amounts are as follows:
| Financial liabilities | TABLE 013 | ||
|---|---|---|---|
| In millions of euros | |||
| Due in | Credit amount | Utilisation as at 30/06/2022 |
|
| Corporate finance | |||
| Promissory note loan | 2022 | 69.5 | 69.5 |
| Promissory note loan | 2024 | 28.0 | 28.0 |
| Promissory note loan | 2025 | 100.0 | 100.0 |
| Syndicated loan | 2023 | 10.0 | 0.0 |
| Syndicated loan | 2024 | 110.0 | 0.0 |
| Syndicated loan | 2024 | 50.0 | 0.0 |
| 367.5 | 197.5 | ||
| Project financing | |||
| Term < 1 year | 2022 | 123.8 | 72.3 |
| Term > 1 and < 2 years | 2023 | 210.9 | 119.1 |
Term > 2 and < 3 years 2024 37.3 37.1 Term > 3 years > 2024 229.3 69.4
601.3 298.0
Group interim report
- Results of operations, net assets and financial position
- Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated
interim financial
statements
Other Information
| Condensed statement of cash flows | TABLE 014 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| Cash flow from operations | 19.5 | 146.2 | – 86.7% |
| Cash flow from investing activities | – 76.1 | 2.6 | n/a |
| Free cash flow | – 56.6 | 148.8 | n/a |
| Cash flow from financing activities | 59.0 | – 103.7 | n/a |
| Cash change in cash and cash equivalents | 2.4 | 45.1 | – 94.7% |
| Cash and cash equivalents at the beginning of the period |
131.0 | 87.0 | 50.6% |
| Other changes in cash and cash equivalents | 0.0 | 0.0 | n/a |
| Cash and cash equivalents at the end of the period |
133.4 | 132.1 | 1.0% |
The cash flow from operations of the Instone Group of €19.5 million in the first half of 2022 (previous-year period: €146.2 million) was essentially due to the increased payment flows to suppliers for current projects with simultaneous purchase price payments and land acquisition taxes for land plots totalling €70.7 million (previous-year period: €45.8 million).
The operating cash flow, adjusted for payments for land, in the period under review was €90.2 million (previous-year period: €192.0 million).
| Cash flow from operations | TABLE 015 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | Change | |
| EBITDA adjusted | 38.3 | 43.3 | – 11.5% |
| Other non-cash or reclassified items | – 9.0 | – 6.9 | 30.8% |
| Taxes paid | – 0.9 | – 7.4 | – 88.1% |
| Change in net working capital1 | – 8.9 | 117.2 | n/a |
| Cash flow from operations | 19.5 | 146.2 | 86.7% |
| Payments for land | 70.7 | 45.8 | 54.5% |
| Cash flow from operations without new investments |
90.2 | 192.0 | – 53.0% |
1 Net working capital is made up of inventories, contract assets and trade receivables less contract liabilities and trade payables.
Cash flow from investing activities in the first six months of 2022 amounted to –€76.1million (previous-year period: €2.6 million). This was mainly due to new short-term deposits in the amount of €60.0 million and the investment in the capital of our joint venture for the "Europaviertel" project, Stuttgart, amounting to €8.5 million.
The cash flow from financing activities as at 30 June 2022 stood at €59.0 million (previous-year period: – €103.7 million). This was mainly due to the dividend payment of €28.8 million and the net take-up of finance facilities in the amount of €105.3 million. This includes payments received from new finance facilities taken out in the amount of €138.2 million, and repayments for terminated finance facilities in the amount of €32.9 million.
As at 30 June 2022, financial resources excluding term deposits increased to €133.4 million (31 December 2021: €131.0 million).
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
Project business at a glance
| Real estate business key performance indicators | TABLE 016 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2022 | 6M 2021 | ||
| Volume of sales contracts | 145.6 | 207.7 | |
| Volume of sales contracts | In units | 287 | 541 |
| 30/06/2022 | 31/12/2021 | ||
| Project portfolio (existing projects) | 7,727.4 | 7,500.0 | |
| of which, already sold | 2,891.4 | 3,038.9 | |
| Project portfolio (existing projects) | In units | 16,644 | 16,418 |
The uncertainty among private and institutional investors, which was noticeable in the Q1 quarterly report in 2022 as a result of the changed financing environment due to increased equity shares for private real estate financing and increased interest rates, had a significant impact on the sales process in the second quarter of 2022. At €145.6 million and 287 units, the volume of sales contracts achieved is therefore below the originally anticipated speed of sales. The sales increase in Q2 2022 in individual unit sales was almost halved compared with Q1 2022, meaning that the sales activities in our projects with individual unit sales led to a volume of €115 million and 239 units. Beyond the investor sales realised in the first quarter of 2022 – the "Lagarde 8" projects and the sale of a day care centre in the "Parkresidenz" project – there were no further investor sales in the second quarter of 2022. The increase in the sales volume in the area of investor goods mainly resulted from purchase price adjustments depending on building cost indexing.
The aforementioned sales effects for Q2 2022 also essentially describe the lower volume of sales contracts in the period under review compared with the previous year (€207.7 million). In the comparative consideration of the sales units of 287 as at 30 June 2022 and of 541 units as at 30 June 2021, it should be taken into account that the number of sales in 2021 includes a non-recurring effect from the consolidation of the plans for our "Schönhof-Viertel, Frankfurt" project in the amount of 186 sales units.
The realised volume of sales contracts of around 80% as at 30 June 2022 was mainly focused on the most important metropolitan regions of Germany. Around 20% is located in other prosperous medium-class cities.
1 includes Berlin, Hamburg, Munich and Stuttgart 2 mainly includes Potsdam and Wiesbaden
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
The following projects essentially contributed to successful marketing in the first six months of 2022:
| Real estate business key performance indicators – volume of sales contracts |
TABLE 017 | |||
|---|---|---|---|---|
| In millions of euros | ||||
| Volume | Units | |||
| Parkresidenz | Leipzig | 37.7 | 90 | |
| Seetor "City Campus" | Nuremberg | 30.3 | 58 | |
| "Wohnen im Hochfeld" Unterbach | Dusseldorf | 18.9 | 26 | |
| Bamberg, Lagarde | Bamberg | n/a | 46 | |
| "Schönhof-Viertel" | Frankfurt am Main | 14.7 | 19 | |
| Rote Kaserne West – "Fontane Gärten" | Potsdam | 8.3 | 13 | |
| "Fuchsgarten" – Nuremberg Boxdorf | Nuremberg | 5.4 | 10 | |
The sales supply of our individual sales projects on the market was increased in comparison with the first quarter of 2022 (248 residential units) and stood at 326 residential units with an expected revenue volume of €225 million. The increase in the sales supply can mainly be explained by the start of sales of two sub-projects of the "Parkstadt Leipzig" project, the start of sales of "Fuchsgarten" in Nuremberg-Boxdorf and the continued successful sale of several units from the existing sales portfolio.
In addition to the changes in the financing environment described above compared with the previous year and the resulting reluctance to purchase, Instone is examining the bottlenecks caused in particular by the Russian attack on Ukraine and increases in construction costs for each project that is ready for sales. In individual cases, this may lead to delays in the start of sales for individual sales properties and sales decisions in the case of institutional sales. This will also have an impact on the volume of sales contracts and the sales supply on the market over the course of the year.
Development of the project portfolio as at 30/06/2022
As at 30 June 2022, Instone Real Estate's project portfolio comprised 54 projects, from which we then anticipated a total volume of sales contracts of €7,727.4 million1 , representing an increase from that of 31 December 2021 (€7,500.0 million). In the second quarter of 2022, two new projects with an expected revenue volume of €185.4 million were acquired. In addition to the "Wendenschlossstraße" property in Berlin, which was removed from the portfolio calculation at the end of the first quarter of 2022 following its handover to the investor, further completions were successfully implemented in the second quarter of 2022 with the "St. Marienkrankenhaus" project in Frankfurt am Main and the "Bleichertwerken" project in Leipzig, and were therefore removed from the project portfolio. The existing projects also resulted in realised and expected revenue increases of approximately €249 million due to the further consolidation of the plans and changes to the sales concepts and increases in sales prices as a result of indexing.
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
In addition to the supply bottlenecks resulting from the Covid-19 pandemic, the increase in energy and material prices fuelled by the Russian attack on Ukraine as well as further supply bottlenecks, if evident and expected, were taken into account in the valuation of the project portfolio in Q2 2022. The price developments currently assumed on the sales and cost side result in an expected project gross profit margin on the project portfolio excluding the major "Westville" project in Frankfurt of around 24% as at the reporting date (31 December 2021: around 25%).2
1 This included approved investment authorisations with a prospective project volume of around €73 million in which the process of securing the land is still being fleshed out.
be about 23% (31 December 2021: around 24%).
€7.7 billion 16,644 units 54 projects
2 If the large "Westville" project were to be taken into consideration, the expected project gross profit margin for the project portfolio would
The majority – approximately 87% – of the anticipated overall volume of revenue from the project portfolio as at 30 June 2022 is located in the most important metropolitan regions of Germany: Berlin, Bonn, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Leipzig, Munich, Nuremberg and Stuttgart. Around 13% is attributable to other prosperous medium-sized cities.
Project portfolio by group Basis: Sale proceeds
Internal sector:
Sold Unsold
In %
30.4
20.9
North Rhine-Westphalia
1.9 Berlin
Frankfurt a. M.
1 2.8% of the project portfolio has already been handed over.
1 Included Wiesbaden, Hanover, Potsdam, Bamberg
Hamburg 6.4
Project portfolio by region
3.6 Munich
In %
Nuremberg 8.8
Stuttgart 7.8 Leipzig 7.1
Rest1 13.1
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
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Based on the continuous growth of our project portfolio in recent years, the majority of our ongoing projects were in the "pre-sale" stage of development.
The comparison with 31 December 2021 showed a slight decline in the "under construction" category by approx. 1.1 percentage points, which can mainly be explained by the completion and withdrawal of the "St. Marienkrankenhaus" project from the project portfolio and the opposing effects from the start of construction in nine projects. Accordingly, the "pre-construction" category, mainly due to the aforementioned construction starts, fell from 12.7% at the end of the year to approx. 10.4%.
Compared with the 2021 annual financial statements (55.8%), the "pre-sale" category increased to 59.1%. The main drivers of this are the investment approvals and additions to the project portfolio for the "Nuremberg-Lichtenreuth", "Hainburg, Am Kaiserberg" and "Nauen" projects in the first half of the year. The successful sale of a "Lagarde 8" sub-project in Bamberg and the initiation of marketing for the "Fuchsgarten, Nuremberg-Boxdorf" project and two construction fields of the "Parkresidenz" project had a negative impact in this category.
In addition, the preceding diagram shows that, as at 30 June 2022 we have already sold approximately 37% of the anticipated overall revenue volume of the project portfolio. In terms of the anticipated revenue volume, approximately 92% of the "under construction" and "pre-construction" projects were sold as at 30 June 2022.
In addition to the 54 projects, Instone Real Estate's project portfolio will be supplemented by three further projects that will be realised in joint ventures. Overall, a total volume of sales of over €1 billion (Instone share approx. €500 million) and the development of approximately 1,800 residential units was expected for these projects. Successful progress towards realisation was achieved last year through the sale of three project sections of the "Friedenauer Höhe" quarter in Berlin. In addition to the sale to Quantum Immobilien KVG at the beginning of 2021, three construction fields with 396 rental apartments were sold to DWS at the end of 2021 together with OFB as part of a forward deal. Both the start of construction and the start of sales for another construction site in the southern area took place in the second quarter.
Adjusted revenue
In the first fix months of 2022, we achieved adjusted revenue of €268.0 million (previous year: €260.5 million). The following projects contributed significantly to the adjusted revenues in the period under review:
Key projects revenue realisation (adjusted) TABLE 018
In millions of euros
| Revenue volume (adjusted) | |||
|---|---|---|---|
| "Wohnen im Hochfeld" Unterbach | Dusseldorf | 34.6 | |
| Seetor "City Campus" | Nuremberg | 33.3 | |
| "Schönhof-Viertel" | Frankfurt a. M. | 28.2 | |
| Parkresidenz | Leipzig | 27.1 | |
| Westville | Frankfurt a. M. | 17.5 | |
| Beethovenpark ("Augusta and Luca") | Augsburg | 14.7 | |
| Rote Kaserne West – "Fontane Gärten" | Potsdam | 13.1 | |
| west.side | Bonn | 12.4 | |
| Niederkasseler Lohweg | Dusseldorf | 12.0 | |
| S'LEDERER | Schorndorf | 11.1 |
The building blocks of success for realising the adjusted revenues were steady marketing progress and a further development process in the structural implementation of our projects. For this reason, in addition to the marketing progress achieved, the start of construction and progress in the projects under construction, in particular, contributed to the generation of revenue. Construction started in nine projects in the period under review. This included a second neighbourhood section with two construction fields in the "Schönhof-Viertel" project in Frankfurt. Around 210 apartments, a student hostel and a four-to five-group children's nursery will be built on the two areas already sold to the Nassauische Heimstätte group in 2019. Construction began on the penultimate sub-project of the "Wohnen im Hochfeld" neighbourhood in Düsseldorf-Unterbach, with around 60 apartments, 78% of which have already been sold in
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
Other Information
individual sales. In addition, in the "Neckar.Au Viertel" project in Rottenburg, construction started on the site sold to The Liebenau Foundation in late 2021. The concept provided for the construction of inclusive living space over a floorspace of around 1,630 m². Last year, the branch in Leipzig started selling and constructing the first construction areas for the "Parkresidenz" neighbour hood and sales of two further construction fields started in the second quarter of 2022. The first six months of 2022 also saw the start of construction work on further construction phases for a total of around 250 residential units.
The development of projects already under construction is solid, but there is a negative development with regard to the planned progress of some projects. The material and supply bottlenecks caused by the attack on Ukraine, which were already noticeable in Q1 2022, are increasingly delaying the progress of ongoing projects. Furthermore, the increase in the prices of materials and energy, which has been significant in some cases, continues to have a noticeable impact on our construction costs. As a result, both the sales targets for 2022 and the gross profit margin of the project portfolio have been negatively impacted.
We continue to monitor all developments on the market and in our projects closely and compensate for them as far as possible by making the appropriate adjustments to relevant processes. The handover processes for the projects already completed so far ran according to schedule.
At completion, Instone Real Estate projects reported a 100% sales ratio in almost all cases. In the case of fully completed projects, our portfolio does not contain any more than 1% of unsold units.
Group interim report
Results of operations, net assets and financial
Project business at a glance
Risk and
Other Information
Outlook
opportunities report
Condensed consolidated interim financial statements
position
Risk and opportunities report
At Instone Real Estate, risk and opportunities management is an integral part of the Group-wide system of corporate governance. For a detailed overview of our risk and opportunities management processes as well as the risk and opportunities situation, please refer to the "Risk and opportunities report" on pages 144–160, of the 2021 Annual Report.
The risk and opportunities situation developed unfavourably for the Instone Group in comparison to our disclosure in the 2021 management report, due in particular to the direct and indirect effects of the Russian occupation of Ukraine.
The material risks are presented below.
In order to counteract the high inflation in the European Union, the Council of the European Central Bank raised the key interest rate for the first time in eleven years in 2022. The resulting historically strong rise in interest rates for real estate financing could adversely affect the affordability of residential real estate for individual customer groups and a general increase in uncertainty among investors could have a further dampening effect on demand. In addition, our projects are usually financed by a mix of bank loans and equity. The now rising interest rates mean higher financing costs for our projects. Instone Real Estate considers the impact in the short to medium term to be relevant in the interest rate risk sub-category.
Instone Real Estate still considers the project implementation/construction risk sub-category to be relevant and has reassessed it against the backdrop of the Russian attack on Ukraine. This conflict results in risks with regard to the speed of construction, as it places an additional strain on supply chains, both as a result of the (EU) sanctions against Russia and the destruction in Ukraine. In addition, this crisis is fuelling the increase in energy and material prices.
The changes in the risk and opportunities situation were continuously monitored, assessed and, if necessary, incorporated into the ongoing forecast. From the current perspective, there were no identifiable risks that risked jeopardising the continued existence of the Instone Group.
Group interim report
Results of operations, net assets and financial position
Project business at a glance
Risk and opportunities report
Outlook
Condensed consolidated interim financial statements
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Outlook
Against the backdrop of the deterioration in the framework conditions for the project business caused by Russia's attack on Ukraine, the Management Board suspended the forecast for the current 2022 financial year in May.
Instone's industry environment is characterised by significantly higher construction costs, in particular due to rising costs of materials and energy. There was a marked exacerbation of the shortage of material availability, which could have negative effects on construction speed and revenue recognition.
The general increase in inflationary tendencies has also triggered a sharp rise in mortgage interest rates. This may adversely affect the affordability of Instone products for individual groups of buyers, increase the short-term uncertainty for customers overall, and therefore lead to a slowdown in the speed of sales.
Based on the business development in the first half of 2022 and updated planning, the Management Board has derived a new forecast for the current 2022 financial year.
The Management Board now expects the financial and operating performance indicators to develop as follows:
| Forecast | TABLE 019 |
|---|---|
| In millions of euros | |
| 2022 | |
| Adjusted revenue | 600 to 675 |
| Adjusted gross profit margin | ≥ 25 % |
| Adjusted earnings after tax | 40 to 50 |
| Volume of sales contracts | around 350 |
The forecast is based on the assumptions that the current slowdown in the speed of sales to private individuals will continue, that the conclusion of transactions with institutional investors could largely be postponed to the next financial year, that costs for construction materials will remain at the current high level and that material availability will remain limited until the end of the year.
CONDENSED CONSOLI-DATED INTERIM FINANCIAL STATEMENTS
Condensed consolidated interim financial statements
- Condensed consolidated income statement
- Condensed consolidated statement of comprehensive income
- Condensed consolidated statement of financial position
- Condensed consolidated statement of cash flows
- Condensed consolidated statement of changes in equity
- Selected explanatory notes to the condensed consolidated interim financial statements
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other Information
Condensed consolidated income statement
| CONSOLIDATED INCOME STATEMENT | TABLE 020 | |
|---|---|---|
| In thousands of euros | ||
| 01/01/–30/06/2022 | 01/01/–30/06/2021 | |
| Revenue | 249,615 | 240,348 |
| Changes in inventories | 82,020 | 29,539 |
| 331,635 | 269,886 | |
| Other operating income | 9,433 | 1,779 |
| Cost of materials | – 268,240 | – 198,593 |
| Staff costs | – 26,177 | – 25,141 |
| Other operating expenses | – 12,471 | – 13,072 |
| Depreciation and amortisation | – 2,393 | – 2,273 |
| Consolidated earnings from operating activities | 31,788 | 32,586 |
| Share of results of joint ventures | 1,460 | 2,550 |
| Other results from investments | 29 | 87 |
| Finance income | 750 | 7 |
| Finance costs | – 9,112 | – 8,722 |
| Other financial result | – 38 | – 122 |
| Consolidated earnings before tax (EBT) | 24,876 | 26,387 |
| Income taxes | – 7,860 | – 8,576 |
| Consolidated earnings after tax (EAT) | 17,017 | 17,810 |
| Attributable to: | ||
| Group interests | 17,946 | 20,222 |
| Non-controlling interests | – 929 | – 2,411 |
| Weighted average number of shares (in units) | 46,774,026 | 46,988,336 |
| Basic and diluted earnings per share (in €) | 0.38 | 0.43 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other Information
Condensed consolidated statement of comprehensive income
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | TABLE 021 | |
|---|---|---|
| In thousands of euros | ||
| 01/01/–30/06/2022 | 01/01/–30/06/2021 | |
| Consolidated earnings after tax | 17,017 | 17,810 |
| Items which are not reclassified into the consolidated earnings in future periods | ||
| Actuarial gains and losses | – 135 | 1,382 |
| Income tax effects | 43 | – 442 |
| Income and expenses after tax recognised directly in equity | – 92 | 940 |
| Total comprehensive income for the financial year after tax | 16,924 | 18,750 |
| Attributable to: | ||
| Group interests | 17,854 | 21,161 |
| Non-controlling interests | – 929 | – 2,411 |
| 16,924 | 18,750 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other Information
Condensed consolidated statement of financial position
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | TABLE 022 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2022 | 31/12/2021 | |
| ASSETS | ||
| Non-current assets | ||
| Goodwill | 6,056 | 6,056 |
| Intangible assets | 1,192 | 1,446 |
| Right of use assets | 8,469 | 9,376 |
| Property, plant and equipment | 2,071 | 2,274 |
| Interests in joint ventures | 41,259 | 30,845 |
| Other investments | 479 | 469 |
| Financial receivables | 24,864 | 17,580 |
| Other receivables | 64 | 5 |
| Deferred tax | 2,142 | 2,142 |
| 86,595 | 70,193 | |
| Current assets | ||
| Inventories | 925,723 | 843,703 |
| Financial receivables | 80,165 | 20,046 |
| Contract assets | 342,221 | 358,017 |
| Trade receivables | 1,575 | 48,202 |
| Other receivables and other assets | 111,109 | 47,988 |
| Income tax assets | 420 | 1,639 |
| Cash and cash equivalents | 133,362 | 130,969 |
| 1,594,575 | 1,450,564 | |
| TOTAL ASSETS | 1,681,170 | 1,520,756 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other Information
Condensed consolidated statement of financial position (continued)
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | TABLE 022 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2022 | 31/12/2021 | |
| Equity and liabilities | ||
| Equity | ||
| Share capital | 46,988 | 46,988 |
| Capital reserves | 358,983 | 358,983 |
| Group retained earnings/loss carryforwards | 175,574 | 186,378 |
| Accumulated reserves recognised in other comprehensive income | – 1,557 | – 1,465 |
| Treasury shares at acquisition cost | – 11,385 | 0 |
| Equity attributable to shareholders | 568,603 | 590,884 |
| Non-controlling interests | – 869 | 61 |
| 567,735 | 590,945 | |
| Non-current liabilities | ||
| Provisions for pensions and similar obligations | 4,791 | 4,398 |
| Other provisions | 4,143 | 6,140 |
| Financial liabilities | 325,068 | 220,943 |
| Liabilities from net assets attributable to non-controlling interests | 0 | 5 |
| Leasing liabilities | 5,345 | 6,474 |
| Deferred tax | 46,205 | 45,630 |
| 385,552 | 283,591 | |
| Current liabilities | ||
| Other provisions | 20,968 | 24,050 |
| Financial liabilities | 175,432 | 169,606 |
| Leasing liabilities | 3,389 | 3,193 |
| Contract liabilities | 20,112 | 11,667 |
| Trade payables | 110,393 | 125,112 |
| Other liabilities | 372,297 | 292,439 |
| Income tax liabilities | 25,293 | 20,153 |
| 727,883 | 646,220 | |
| Total equity and liabilities | 1,681,170 | 1,520,756 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other Information
Condensed consolidated statement of cash flows
| CONSOLIDATED STATEMENT OF CASH FLOWS TABLE 023 |
|---|
| 01/01/–30/06/2022 | 01/01/–30/06/2021 | |
|---|---|---|
| Consolidated earnings after tax | 17,017 | 17,810 |
| (+) Depreciation and amortisation / (–) Write-ups of non-current assets | 2,393 | 2,273 |
| (+) Profit / (–) Loss on disposals of property, plant and equipment | 4 | 0 |
| (+) Increase / (–) Decrease in provisions | – 4,945 | 1,870 |
| (+) Current income tax income / (–) Current income tax expense | 7,242 | 2,732 |
| (+) Deferred income tax income / (–) Deferred income tax expense | 618 | 5,402 |
| (+) Income from equity carrying amounts / (–) Expenses | – 1,460 | – 2,550 |
| (+) Profit from the investment result of minority interests / (–) Expenses | – 29 | 5 |
| (+) Interest income / (–) Interest expenses | 8,400 | 8,836 |
| (+/–) Change in net working capital 1 | – 8,892 | 117,245 |
| (+) Income tax reimbursements / (–) Income tax payments | – 883 | – 7,414 |
| = Cash flow from operations | 19,464 | 146,210 |
| (–) Outflows for investments in intangible assets | – 12 | – 396 |
| (+) Proceeds from disposals of property, plant and equipment | 18 | 0 |
| (–) Outflows for investments in property, plant and equipment | – 396 | – 330 |
| (+) Proceeds from disposals of investments | 0 | 115 |
| (–) Outflows for investments in financial assets | – 6,726 | – 21,896 |
| (–) Outflows for investments in unconsolidated companies and other companies | – 8,955 | 0 |
| (+) Proceeds due to financial investments within the scope of current financial planning | 0 | 125,000 |
| (–) Disbursements due to financial investments within the scope of current financial planning | – 60,000 | – 100,000 |
| (+) Interest received | 0 | 78 |
| = Cash flow from investing activities | – 76,071 | 2,571 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other Information
Condensed consolidated statement of cash flows (continued)
CONSOLIDATED STATEMENT OF CASH FLOWS TABLE 023
In thousands of euros
| 01/01/–30/06/2022 | 01/01/–30/06/2021 | |
|---|---|---|
| (–) Acquisition of treasury shares | – 11,303 | 0 |
| (+) Contributions from minority shareholders | 0 | 16,849 |
| (–) Payments to minority shareholders | 0 | – 363 |
| (+) Proceeds from loans and borrowings | 138,211 | 39,693 |
| (–) Repayments of loans and borrowings | – 32,893 | – 142,312 |
| (–) Payments from lessees to repay liabilities from lease agreements | – 1,873 | – 1,891 |
| (–) Interest paid | – 4,393 | – 3,440 |
| (–) Dividends paid | – 28,750 | – 12,217 |
| = Cash flow from financing activities | 59,000 | – 103,682 |
| Cash and cash equivalents at the beginning of the period | 130,969 | 87,044 |
| (+/–) Change in cash and cash equivalents | 2,393 | 45,099 |
| = Cash and cash equivalents at the end of the period | 133,362 | 132,143 |
1 Net working capital is composed of inventories, contract assets and trade receivables less contract liabilities and trade payables.
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other Information
Condensed consolidated statement of changes in equity
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY TABLE 024
In thousands of euros
| Total | Share capital | Capital reserves | Group retained earnings/loss carryforwards |
Accumulated reserves recognised in other comprehen sive income |
Treasury shares at acquisition cost |
Equity attributable to shareholders |
Non-controlling interests |
|
|---|---|---|---|---|---|---|---|---|
| As at: 31 December 2020 | 521,033 | 46,988 | 358,983 | 115,544 | – 2,080 | 0 | 519,435 | 1,598 |
| As at: 01 January 2021 | 521,033 | 46,988 | 358,983 | 115,544 | – 2,080 | 0 | 519,435 | 1,598 |
| Consolidated earnings after tax | 17,810 | 0 | 0 | 20,222 | 0 | 0 | 20,222 | – 2,411 |
| Changes in actuarial gains and losses | 940 | 0 | 0 | 0 | 940 | 0 | 940 | 0 |
| Total comprehensive income | 18,750 | 0 | 0 | 20,222 | 940 | 0 | 21,161 | – 2,411 |
| Dividend payments | – 12,217 | 0 | 0 | – 12,217 | 0 | 0 | – 12,217 | 0 |
| Other neutral changes | 239 | 0 | 0 | 0 | 0 | 0 | 0 | 239 |
| – 11,978 | 0 | 0 | – 12,217 | 0 | 0 | – 12,217 | 239 | |
| As at: 30 June 2021 | 527,804 | 46,988 | 358,983 | 123,548 | – 1,141 | 0 | 528,379 | – 575 |
| As at: 31/12/2021 | 590,945 | 46,988 | 358,983 | 186,378 | – 1,465 | 0 | 590,884 | 61 |
| As at: 01 January 2022 | 590,945 | 46,988 | 358,983 | 186,378 | – 1,465 | 0 | 590,884 | 61 |
| Consolidated earnings after tax | 17,017 | 0 | 0 | 17,946 | 0 | 0 | 17,946 | – 929 |
| Changes in actuarial gains and losses | – 92 | 0 | 0 | 0 | – 92 | 0 | – 92 | 0 |
| Total comprehensive income | 16,924 | 0 | 0 | 17,946 | – 92 | 0 | 17,854 | – 929 |
| Acquisition of treasury shares | – 11,301 | 0 | 0 | 0 | 0 | – 11,301 | – 11,301 | 0 |
| Transaction costs net of tax effect | – 84 | 0 | 0 | 0 | 0 | – 84 | – 84 | 0 |
| Changes to the scope of consolidation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividend payments | – 28,750 | 0 | 0 | – 28,750 | 0 | 0 | – 28,750 | 0 |
| – 40,135 | 0 | 0 | – 28,750 | 0 | – 11,385 | – 40,135 | 0 | |
| As at: 30 June 2022 | 567,735 | 46,988 | 358,983 | 175,574 | – 1,557 | – 11,385 | 568,603 | – 869 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
Selected explanatory notes to the condensed consolidated interim financial statements
Basis of the condensed consolidated interim financial statements
Basis for preparing the condensed consolidated interim financial statements
The condensed consolidated interim financial statements of Instone Real Estate and its subsidiaries as at 30 June 2022 have been prepared in accordance with the International Accounting Standard (IAS) 34 "Interim reporting" and the German Accounting Standard (DRS) 16 "Semi-annual financial reporting".
They should be read in conjunction with the consolidated financial statements and the notes thereto in the Company's Annual Report for the year ended 31 December 2021, which have been prepared in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the related Interpretations (IFRIC) of the IFRS Interpretations Committee (IFRS IC) as they applied on the balance sheet date, in accordance with Regulation No 1606/2002 of the European Parliament and of the Council on the application of international accounting standards in the European Union and the supplementary disclosures in accordance with Section 315e HGB.
The preparation of the interim report requires management to make a series of assumptions and estimates. This may lead to discrepancies between the values shown in the interim report and the actual values.
Various items from the condensed consolidated statement of financial position and the condensed consolidated income statement are combined into one item for a better overview. The condensed consolidated income statement is prepared according to the nature of expense method.
The condensed consolidated interim financial statements are prepared in euros, which is the functional currency and the reporting currency of the Group. All amounts are expressed in thousands of euros (€ thousand) unless otherwise stated. Commercial rounding may lead to immaterial rounding differences in the totals.
First-time application of accounting standards in the current financial year
In recent years, the International Accounting Standards Board (IASB) has made various changes to existing IFRSs and published new IFRSs as well as Interpretations of the IFRS Interpretations Committee (IFRS IC). In addition, the IASB has published amendments to existing standards as part of the Annual Improvement Project (AIP). The primary aim of the collective standards is to clarify inconsistencies and formulations.
The changes to the accounting standards that came into effect on 1 January 2022 have no impact on these condensed consolidated interim financial statements.
Scope of consolidation
As at 30 June 2022, in addition to Instone Real Estate Group SE, a total of 18 (31 December 2021: 18) domestic and two (31 December 2021: two) European foreign companies are part of these condensed consolidated interim financial statements and are fully consolidated.
As at 30 June 2022, eight joint ventures (31 December 2021: eight) and one associated company (31 December 2021: one) were valued using the equity method.
In total, six group entities (31 December 2021: six) had a low business volume or no business operation and were not consolidated for reasons of materiality. They are reported under other investments.
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
Segment reporting
Operating segment reporting in accordance with IFRS 8 is based on the management approach and thus corresponds to the management and reporting system that Instone Real Estate uses for its segments. Instone Real Estate operates in only one business segment and one geographical segment and generates revenue and holds assets mainly in Germany.
However, the internal reporting for the single business segment differs from the figures in IFRS accounting. In its internal reporting, Instone Real Estate focuses in particular on the development of housing projects. For this reason, Instone Real Estate conducts segment reporting for this one business segment.
Internal corporate governance for this segment is based in particular on the internal reporting system for the presentation of key developments relating to real estate and financial key performance indicators, supplemented by an examination of key project milestones and liquidity development.
Instone Real Estate manages its segment through the adjusted results of operations using key performance indicators adjusted revenue, adjusted gross profit and adjusted earnings after interest and tax.
Adjusted revenue
The performance of the business segment is reported via adjusted revenue on the basis of revenue recognition over time. Adjusted revenue is calculated by adding the revenue recognition from share deals in the same way as from asset deals, without the effects from purchase price allocations.
Adjusted gross profit
The adjusted gross profit is used to analyse the project-based company performance and is determined on the basis of the adjusted revenue less the cost of materials, changes in inventories, other operating income after subtracting the cost of materials, indirect distribution costs and capitalised interest, but excluding effects from purchase price allocations and share deals.
Adjusted earnings after tax
Adjusted earnings after tax is calculated on the basis of adjusted gross profit less platform costs, consisting of staff costs, other operating income and expenses, depreciation and amortisation, income from investments and other earnings, financial result and income taxes, but is also adjusted for the effects from purchase price allocations and share deals, as well as any nonrecurring effects, where applicable. The results of joint ventures are included in adjusted earnings before interest and tax, as future earnings of project companies to be recorded under this item are to be allocated to operating earnings.
The effects of the adjusted results of operations are derived from the following:
Share deal effects
The project companies Westville 2 GmbH, Westville 3 GmbH, Westville 4 GmbH and Westville 5 GmbH are commercially conceived as asset management companies and constitute one major project in Frankfurt am Main. Instone Real Estate has already sold these project companies in the form of a share deal with the obligation to build a residential complex. In the adjusted results of operations, the overall "Westville" project is managed in the same way as the other projects in the Instone Group, with revenue recognition over time in accordance with IFRS 15. These companies are valued and included in the consolidated financial statements in accordance with IAS 2. The effects from this different valuation are reflected in the revenues of €17,482 thousand (previous-year period: €20,129 thousand) and project costs of – €21,662 thousand (previous-year period: – €17,912 thousand). In the period under review, an adjustment was made to determine the tax expense for share deal effects on the expected minimum taxation of the companies' sales revenues.
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
Effects from purchase price allocations
Due to the first-time consolidation of Instone Real Estate Development GmbH in 2014 and Instone Real Estate Leipzig GmbH in 2015 as well as the business activities of S&P Stadtbau GmbH in the 2020 financial year, as at 30 June 2022 inventories and contract assets still included write-ups of €23,580 thousand (31 December 2021: €31,358 thousand) from purchase price allocations. The ongoing amortisation of these purchase price allocations on the basis of the progressive implementation of the projects included in these initial consolidations is adjusted for internal reporting. The adjustment for the amortisation of purchase price allocations was attributable as follows: €932 thousand (previousyear period: – €17 thousand) to revenue, €0 thousand (previous-year period: €0 thousand) to cost of materials and €6,846 thousand (previous-year period: €4,940 thousand) to changes in inventories. Based on current estimates, the Instone Group expects these effects to expire in 2024.
Reclassifications and non-recurring effects
As at 30 June 2022, indirect sales expenses in the amount of €1,083 thousand (previous-year period: €566 thousand) as well as material cost-related other operating income in the amount of – €3,852 thousand (previous-year period: €0 thousand) were allocated to project costs. The adjustment of the capitalised interest in the changes in inventories of €938 thousand (previous-year period: €1,199 thousand) burdened the project costs.
In the following table, the differences arising from the valuation of the individual data are carried over from the adjusted results of operations into the consolidated reporting:
RECONCILIATION OF ADJUSTED RESULTS OF OPERATIONS 01/01–30/06/2022 TABLE 025
| Group interim report |
|---|
| ---------------------- |
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
| Adjusted results of operations |
Share deal effects | Reclassifications | Effects from PPA | Reported results of operations |
|---|---|---|---|---|
| 268,029 | – 17,482 | 0 | – 932 | 249,615 |
| – 199,206 | 21,662 | – 1,830 | – 6,846 | – 186,220 |
| – 265,471 | 0 | – 2,769 | 0 | – 268,240 |
| 66,266 | 21,662 | 938 | – 6,846 | 82,020 |
| 68,823 | 4,180 | – 1,830 | – 7,778 | 63,395 |
| – 34,376 | 0 | 2,769 | 0 | – 31,607 |
| – 26,177 | 0 | 0 | 0 | – 26,177 |
| 5,581 | 0 | 3,852 | 0 | 9,433 |
| – 11,387 | 0 | – 1,083 | 0 | – 12,471 |
| – 2,393 | 0 | 0 | 0 | – 2,393 |
| 1,460 | 0 | 0 | 0 | 1,460 |
| 35,907 | 4,180 | 938 | – 7,778 | 33,247 |
| 29 | ||||
| – 8,400 | ||||
| 28,475 | 4,180 | 0 | – 7,778 | 24,876 |
| – 8,870 | – 7,860 | |||
| 17,017 | ||||
| 29 – 7,461 19,605 |
0 0 |
0 – 938 |
0 0 |
RECONCILIATION OF ADJUSTED RESULTS OF OPERATIONS 01/01–30/06/2021 TABLE 026
Group interim report Condensed consolidated
interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
| In thousands of euros | |||||
|---|---|---|---|---|---|
| Adjusted results of operations |
Share deal effects | Reclassifications | Effects from PPA | Reported results of operations |
|
| Revenue | 260,459 | – 20,129 | 0 | 17 | 240,348 |
| Project costs | – 183,792 | 17,912 | 1,765 | – 4,940 | – 169,054 |
| Cost of materials | – 199,159 | 0 | 566 | 0 | – 198,593 |
| Changes in inventories | 15,367 | 17,912 | 1,199 | – 4,940 | 29,539 |
| Gross profit | 76,667 | – 2,216 | 1,765 | – 4,922 | 71,293 |
| Platform costs | – 38,141 | 0 | – 566 | 0 | – 38,707 |
| Staff costs | – 25,141 | 0 | 0 | 0 | – 25,141 |
| Other operating income | 1,779 | 0 | 0 | 0 | 1,779 |
| Other operating expenses | – 12,506 | 0 | – 566 | 0 | – 13,072 |
| Depreciation and amortisation | – 2,273 | 0 | 0 | 0 | – 2,273 |
| Share of results of joint ventures | 2,550 | 0 | 0 | 0 | 2,550 |
| EBIT | 41,076 | – 2,216 | 1,199 | – 4,922 | 35,136 |
| Other results from investments | 87 | 0 | 0 | 0 | 87 |
| Financial result | – 7,637 | 0 | – 1,199 | 0 | – 8,836 |
| EBT | 33,525 | – 2,216 | 0 | – 4,922 | 26,387 |
| Tax | – 10,095 | – 8,576 | |||
| EAT | 23,430 | 17,810 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
Disclosures about the condensed consolidated income statement
Revenue
Revenue is spread across the following regions:
| REVENUE BY REGION | TABLE 027 | |
|---|---|---|
| In thousands of euros | ||
| 01.01. – 30/06/2022 | 01.01. – 30/06/2021 | |
| Germany | 249,560 | 240,277 |
| Rest of Europe | 55 | 71 |
| 249,615 | 240,348 |
The composition of revenue by revenue type is shown in the following table:
| REVENUE BY REVENUE TYPE | TABLE 028 | |
|---|---|---|
| In thousands of euros | ||
| 01.01. – 30/06/2022 | 01.01. – 30/06/2021 | |
| Revenue from building contracts | ||
| Revenue recognised over time | 245,365 | 232,105 |
| Revenue recognised at a point in time | 755 | 5,250 |
| 246,120 | 237,355 | |
| Income from leases | 3,364 | 2,832 |
| Other services | 132 | 161 |
| 249,615 | 240,348 |
The total amount of unfulfilled or partly unfulfilled performance obligations as at the balance sheet date is €1,294,206 thousand (31 December 2021: €1,406,683 thousand).
Depreciation and impairment
There was no impairment of right of use assets, property, plant and equipment or intangible assets.
| DEPRECIATION AND AMORTISATION | TABLE 029 | |
|---|---|---|
| In thousands of euros | ||
| 01.01. – 30/06/2022 | 01.01. – 30/06/2021 | |
| Right of use assets | – 1,670 | – 1,779 |
| Property, plant and equipment | – 457 | – 477 |
| Intangible assets | – 266 | – 17 |
| – 2,393 | – 2,273 |
Income taxes
| INCOME TAXES | TABLE 030 | |
|---|---|---|
| In thousands of euros | ||
| 01.01. – 30/06/2022 | 01.01. – 30/06/2021 | |
| Current income tax | ||
| German trade tax | – 3,776 | – 1,152 |
| Corporation tax | – 3,466 | – 1,580 |
| – 7,242 | – 2,732 | |
| Deferred tax | ||
| Deferred tax | – 618 | – 5,844 |
| – 7,860 | – 8,576 |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
Disclosures about the condensed consolidated statement of financial position
Inventories INVENTORIES TABLE 031 In thousands of euros 30/06/2022 31/12/2021 Work-in-progress 925,667 843,647 Finished goods 56 56 925,723 843,703
Work-in-progress is subject to disposal restrictions due to project financing by banks amounting to €400,368 thousand (31 December 2021: €94,460 thousand).
Borrowing costs in the amount of €11,347 thousand (31 December 2021: €10,456 thousand) were capitalised as part of production costs recognised for inventories attributable to project-related financing based on individual agreements with external lenders.
The inventories were subject to impairment of €6,879 thousand (31 December 2021: €6,844 thousand ). Reversals of impairment losses in the period under review were €530 thousand (previous-year period: €0 thousand).
Contract assets
The structure of contract assets is composed as follows:
| CONTRACT ASSETS | TABLE 032 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2022 | 31/12/2021 | |
| Contract assets | 1,000,584 | 858,648 |
| Payments received | – 665,312 | – 506,601 |
| 335,272 | 352,047 | |
| Receivables from costs to obtain a contract |
6,949 | 5,970 |
| 342,221 | 358,017 |
The change in contract assets is due to the increase in fulfilment of the underlying contracts with customers and the parallel increase in advance payments.
The cycle of contract assets is – equivalent to the project term– an average of three years.
The amortisation of the costs to obtain a contract in the amount of €4,718 thousand (previous-year period: €1,071 thousand) offsets the fulfilment of the underlying contracts with customers.
Financial liabilities
| FINANCIAL LIABILITIES | TABLE 033 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2022 | 31/12/2021 | |
| Non-current | ||
| To financial institutions from project financing |
180,472 | 76,695 |
| To financial institutions from corporate financing |
27,913 | 27,868 |
| Loans from third parties | 99,539 | 99,439 |
| Liabilities to minority shareholders | 17,145 | 16,942 |
| 325,068 | 220,943 | |
| Current | ||
| To financial institutions from project financing |
100,246 | 97,335 |
| To financial institutions from corporate financing |
71,471 | 70,535 |
| Loans from third parties | 3,653 | 1,674 |
| Liabilities to minority shareholders | 62 | 62 |
| 175,432 | 169,606 | |
| 500,501 | 390,550 |
Group interim report
FINANCIAL LIABILITIES 2022 TABLE 034
| In thousands of euros | ||||||
|---|---|---|---|---|---|---|
| 30/06/2022 | 01/01/2022 | Cash flow from financing activities |
Neutral offsetting | Deferred interest |
Amortisation from the valuation using the effective interest method |
|
| Loans from banks | 380,102 | 272,433 | 105,127 | 0 | 2,074 | 469 |
| Loans from third parties | 103,192 | 101,113 | 191 | 0 | 1,984 | – 96 |
| Liabilities to minority shareholders | 17,207 | 17,004 | 0 | 0 | 203 | 0 |
| 500,501 | 390,550 | 105,318 | 0 | 4,260 | 373 | |
| FINANCIAL LIABILITIES 2021 | TABLE 035 | |||||
| In thousands of euros | ||||||
| Non-cash changes |
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
31/12/2021 31/12/2020 Cash flow from financing activities Non-cash changes Neutral offsetting Deferred interest Amortisation from the valuation using the effective interest method Loans from banks 272,433 380,943 – 110,606 0 895 1,201 Loans from third parties 101,113 100,713 224 – 11 0 187 Liabilities to minority shareholders 17,004 45 16,610 62 287 0 390,550 481,701 – 93,772 51 1,182 1,388
Current and non-current loans from banks consisted of fixed and variable interest rate loans issued by various banks.
In accordance with the Group's policy, Instone Group's loans from banks are not the subject of contractual assurances and are instead secured by land charges.
| 481,701 | -93,772 | 51 | |
|---|---|---|---|
| 45 | 16,610 | 62 | |
| 100,713 | 224 | — 11 | |
| 380,943 | - 110,606 | O | |
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
Other disclosures
Disclosures about related persons and companies
Key related persons and companies include any material entities valued at equity and members of the Management Board and Supervisory Board.
Relationships with joint ventures
| RELATIONSHIPS WITH JOINT VENTURES/OTHER INVESTMENTS |
TABLE 036 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2022 | 31/12/2021 | |
| Receivables | ||
| FHP Friedenauer Höhe Dritte GmbH & Co. KG | 5,145 | 4,718 |
| FHP Friedenauer Höhe Erste GmbH & Co. KG | 9,886 | 3,807 |
| FHP Friedenauer Höhe Sechste GmbH & Co. KG | 8,692 | 7,954 |
| FHP Friedenauer Höhe Vierte GmbH & Co. KG | 513 | 513 |
| Projektentwicklungsgesellschaft Holbeinviertel mbH & Co. KG |
4 | 0 |
| Twelve GmbH & Co. KG | 28 | 7,524 |
| Wohnpark Heusenstamm GmbH & Co. KG | 62 | 31 |
| 24,329 | 24,546 | |
| Liabilities | ||
| Projektentwicklungsgesellschaft Holbeinviertel mbH & Co. KG |
400 | 400 |
| 400 | 400 |
The financial receivables from the four project companies FHP Friedenauer Höhe Dritte GmbH & Co. KG, FHP Friedenauer Höhe Erste GmbH & Co. KG, FHP Friedenauer Höhe Sechste GmbH & Co. KG and FHP Friedenauer Höhe Vierte GmbH & Co. KG consist of interest-free loans with residual maturities of between four and seven years. The financial liabilities to Projektentwicklungsgesellschaft Holbeinviertel mbH & Co. KG consist of interest-free loans and have a residual term of up to one year. The receivables from Twelve GmbH & Co. KG consist of an advance on costs and have a residual term of up to one year.
Relationships with related persons
There were no material transactions between Instone Real Estate Group SE, Essen, Germany, or a Group company and persons from the Management or related persons or companies during the reporting period. There are no conflicts of interest in terms of the participating members of the Management Board and the Supervisory Board.
Further disclosures on financial instruments
The carrying amounts for individual classes of financial instruments and the carrying amounts for individual categories are shown below in accordance with IFRS 7.
Group interim report
CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS IN 2022 TABLE 037
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
| In thousands of euros | ||||
|---|---|---|---|---|
| Carrying amount 30/06/2022 | Fair value through profit and loss |
At amortised costs | Not within the scope of application of IFRS 9 |
|
| ASSETS | ||||
| Financial assets | ||||
| Financial receivables | ||||
| Non-current | 24,864 | 0 | 24,864 | 0 |
| Current | 80,165 | 0 | 80,165 | 0 |
| 105,029 | 0 | 105,029 | 0 | |
| Other investments | 479 | 479 | 0 | 0 |
| Contract assets | 342,221 | 0 | 0 | 342,221 |
| Trade receivables | 1,575 | 0 | 1,575 | 0 |
| Other receivables and other assets | 111,172 | 0 | 111,172 | 0 |
| Cash and cash equivalents | 133,362 | 0 | 133,362 | 0 |
| 693,839 | 479 | 351,139 | 342,221 | |
| Equity and liabilities | ||||
| Financial liabilities | ||||
| Financial liabilities | ||||
| Non-current | 325,068 | 0 | 325,068 | 0 |
| Current | 175,432 | 0 | 175,432 | 0 |
| 500,501 | 0 | 500,501 | 0 | |
| Contract liabilities | 20,112 | 0 | 0 | 20,112 |
| Liabilities from net assets attributable to non-controlling interests |
0 | 0 | 0 | 0 |
| Trade payables | 110,393 | 0 | 110,393 | 0 |
| Other liabilities | 372,297 | 0 | 372,297 | 0 |
1,003,302 0 983,190 20,112
CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS IN 2021 TABLE 038
Group interim report Condensed consolidated
interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
| In thousands of euros | ||||
|---|---|---|---|---|
| Carrying amount 31/12/2021 | Fair value through profit and loss |
At amortised costs | Not within the scope of application of IFRS 9 |
|
| ASSETS | ||||
| Financial assets | ||||
| Financial receivables | ||||
| Non-current | 17,580 | 0 | 17,580 | 0 |
| Current | 20,046 | 0 | 20,046 | 0 |
| 37,626 | 0 | 37,626 | 0 | |
| Other investments | 469 | 469 | 0 | 0 |
| Contract assets | 358,017 | 0 | 0 | 358,017 |
| Trade receivables | 48,202 | 0 | 48,202 | 0 |
| Other receivables and other assets | 47,993 | 0 | 47,993 | 0 |
| Cash and cash equivalents | 130,969 | 0 | 130,969 | 0 |
| 623,276 | 469 | 264,790 | 358,017 | |
| Equity and liabilities | ||||
| Financial liabilities | ||||
| Financial liabilities | ||||
| Non-current | 220,943 | 0 | 220,943 | 0 |
| Current | 169,606 | 0 | 169,606 | 0 |
| 390,550 | 0 | 390,550 | 0 | |
| Contract liabilities | 11,667 | 0 | 0 | 11,667 |
| Liabilities from net assets attributable to non-controlling interests |
5 | 5 | 0 | 0 |
| Trade payables | 125,112 | 0 | 125,112 | 0 |
| Other liabilities | 292,439 | 0 | 292,439 | 0 |
819,773 5 808,100 11,667
Group interim report
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of comprehensive income
Condensed consolidated statement of financial position
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in equity
Selected explanatory notes to the condensed consolidated interim financial statements
Other information
With the short-term financial instruments accounted for at amortised costs, the carrying amount corresponds to the fair value, due to the short remaining term to maturity. In the case of non-current financial liabilities, the carrying amount of a part corresponds to the fair value due to the variable interest rate. A fair value was determined for the fixed-interest non-current liabilities, which is €12,478 thousand less than the carrying amount as at 30 June 2022. As at 31 December 2021: the fair value exceeded the carrying amount by €12,654 thousand. Non-current liabilities fall under fair value hierarchy level 2. The fair value was determined using a cash value method using company-specific current interest rates derived from the market. Long-term financial receivables are accounted for at amortised cost. Their fair value differs from the carrying amount by –€687 thousand. These bonds fall under fair value hierarchy level 2 and were determined using a cash value method taking into account current market interest rates.
Events after the balance sheet date
There were no events of particular significance to report after the balance sheet date on 30 June 2022.
Disclosures on preparation and approval
The Management Board of Instone Real Estate Group SE prepared the interim consolidated financial statements on 10 August 2022 and approved them for forwarding to the Supervisory Board.
Essen,Germany, 10 August 2022
The Management Board
Kruno Crepulja Dr Foruhar Madjlessi Andreas Gräf
OTHER INFORMATION
Other information
- Insurance of legal representatives
- Review report
- Disclaimer
- Quarterly comparison
- Multi-year overview
- Contact / About us / Financial calendar
Group interim report
Condensed consolidated interim financial statements
Other information
Insurance of legal representatives
Review report
Disclaimer
Quarterly comparison
Multi-year overview
Contact/About Us/ Financial Calendar
Insurance of legal representatives
To the best of our knowledge, we hereby declare that the semi-annual report for the interim consolidated financial statements accurately reflects the results of operations, net assets and the financial position of the Instone Group in accordance with applicable accounting principles and that the Company's management report together with the combined management report accurately reflect business performance, including the operating result and financial position, of the Instone Group, and that it also describes the significant opportunities and risks associated with the anticipated development of the Instone Group during the remainder of the financial year.
Essen, Germany, 10 August 2022 The Management Board
Kruno Crepulja Dr Foruhar Madjlessi Andreas Gräf
Group interim report
Condensed consolidated interim financial statements
Other information
Insurance of legal representatives
Review report
Disclaimer
Quarterly comparison
Multi-year overview
Contact/About Us/ Financial Calendar
Review report
To Instone Real Estate Group SE, Essen/Germany
We have reviewed the condensed consolidated interim financial statements – comprising the condensed consolidated statement of financial position as of 30 June 2022, the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of cash flows, the condensed consolidated statement of changes in equity for the six month period from 1 January to 30 June 2022 as well as selected explanatory notes to the condensed consolidated interim financial statements – and the interim group management report for the six month period from 1 January to 30 June 2022 of Instone Real Estate Group SE, Essen/Germany, that are part of the half-year financial report under Section 115 German Securities Trading Act (WpHG). The preparation of the condensed consolidated interim financial statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports is the responsibility of the executive directors. Our responsibility is to express a conclusion on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and of the interim group management report in compliance with German Generally Accepted Standards for Reviews of Financial Statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany). Those standards require that we plan and perform the review to obtain a certain level of assurance to preclude through critical evaluation that the condensed consolidated interim financial statements are not prepared, in
all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU or that the interim group management report is not prepared, in all material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and to analytical procedures applied to financial data and thus provides less assurance than an audit. Since, in accordance with our engagement, we have not performed an audit, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements of Instone Real Estate Group SE, Essen/Germany, are not prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU or that the interim group management report is not prepared, in all material respects, in accordance with the requirements of the WpHG applicable to interim group management reports.
Düsseldorf/Germany, 10 August 2022
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Signed: Prof. Dr Holger Reichmann Wirtschaftsprüfer (German Public Auditor)
Signed: Michael Pfeiffer Wirtschaftsprüfer (German Public Auditor)
Group interim report
Condensed consolidated interim financial statements
Other information
Insurance of legal representatives
Review report
Disclaimer
Quarterly comparison
Multi-year overview
Contact/About Us/ Financial Calendar
Disclaimer
Forward-looking statements
This interim group report contains forward-looking statements that are based on current management plans, goals and forecasts. However, these statements relate only to findings that are available as at the date this condensed consolidated interim report was prepared. Management does not guarantee that these forward-looking statements will necessarily materialise. Actual future development and the results actually achieved are subject to various risks and can therefore deviate significantly from the forward-looking statements. Several risk factors cannot be influenced by Instone Real Estate and therefore cannot be conclusively assessed in advance. These include changes in the economic and competitive environment, legislation, fluctuations in interest or exchange rates, legal disputes and investigative proceedings and the availability of financial resources. These and other risks are listed in the 2020 consolidated report, which is combined with the company management report, as well as in this condensed consolidated interim report. Furthermore, business development and economic results may also be encumbered by other factors. Following publication of this consolidated interim report, there is no intention to in any way update the forward-looking statements made herein or to adjust them to events and developments.
Rounding of figures
Some figures disclosed in this condensed consolidated interim report have been commercially rounded. As a result, there may be minor deviations between figures in the Tables and their analysis in the text of the condensed consolidated interim report, as well as between individual amount totals in Tables and the total values indicated in the text. All key performance indicators and percentage changes are calculated on the basis of the underlying data and shown in the unit "thousands of euros".
Quarterly comparison TABLE 039
| Group interim report | In millions of euros | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | |
|---|---|---|---|---|---|---|---|---|
| Condensed consolidated interim financial statements |
Real estate business key performance indicators |
|||||||
| Volume of sales contracts | 58.0 | 87.6 | 761.7 | 170.7 | 89.1 | 118.6 | ||
| Other information | Volume of sales contracts | In units | 96 | 191 | 1,906 | 468 | 169 | 372 |
| Project portfolio (existing projects) | 7,727.4 | 7,567.7 | 7,500.0 | 7,154.9 | 6,268.1 | 6,054.2 | ||
| Insurance of | of which already sold | 2,891.4 | 3,070.1 | 3,038.9 | 2,308.7 | 2,444.0 | 2,360.5 | |
| legal representatives | Project portfolio (existing projects) | In units | 16,644 | 16,607 | 16,418 | 15,913 | 14,338 | 13,678 |
| of which already sold | In units | 7,179 | 7,404 | 7,215 | 5,401 | 5,679 | 5,510 | |
| Review report | Volume of new approvals 1 | 185.5 | 99.8 | 254.0 | 1,097.6 | 165.9 | 69.8 | |
| Disclaimer | Volume of new approvals | In units | 461 | 174 | 517 | 2,292 | 275 | 161 |
| Adjusted results of operations | ||||||||
| Quarterly comparison | Revenue adjusted | 149.5 | 118.5 | 378.0 | 145.1 | 132.4 | 128.1 | |
| Project costs adjusted | – 115.9 | – 83.3 | – 277.5 | – 100.8 | – 96.2 | – 87.6 | ||
| Multi-year overview | Gross profit adjusted | 33.6 | 35.2 | 100.5 | 44.3 | 36.2 | 40.5 | |
| Gross profit margin adjusted | 22.5% | 29.7% | 26.6% | 30.5% | 27.3% | 31.6% | ||
| Contact/About Us/ Financial Calendar |
Platform costs adjusted | – 15.7 | – 18.7 | – 22.2 | – 20.2 | – 21.8 | – 16.3 | |
| Share of results of joint ventures adjusted | 0.9 | 0.6 | 12.0 | 0.1 | 0.0 | 2.5 | ||
| Earnings before interest and tax (EBIT) adjusted | 18.9 | 17.0 | 90.4 | 24.2 | 14.4 | 26.7 | ||
| EBIT margin adjusted | 12.6% | 14.3% | 23.9% | 16.7% | 10.9% | 20.8% | ||
| Income from investments adjusted | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | ||
| Financial result adjusted | – 3.8 | – 3.7 | – 9.1 | – 2.6 | – 3.5 | – 4.1 | ||
| Earnings before tax (EBT) adjusted | 15.1 | 13.4 | 81.3 | 21.7 | 10.9 | 22.6 | ||
| EBT margin adjusted | 10.1% | 11.3% | 21.5% | 15.0% | 8.2% | 17.6% | ||
| Income taxes adjusted | – 4.8 | – 4.1 | – 24.7 | – 4.8 | – 3.3 | – 6.8 | ||
| Earnings after tax (EAT) adjusted | 10.3 | 9.3 | 56.6 | 16.9 | 7.6 | 15.8 | ||
| EAT margin adjusted | 6.9% | 7.8% | 15.0% | 11.6% | 5.7% | 12.3% | ||
| Earnings per share (adjusted) | In euros | 0.24 | 0.20 | 1.19 | 0.36 | 0.21 | 0.34 |
1 Excluding volume of approvals from joint ventures consolidated at equity.
| Multi-year overview | TABLE 040 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| In millions of euros | In millions of euros | |||||||||||
| 6M 2022 | 2021 | 2020 | 2019 | 2018 | 6M 2022 | 2021 | 2020 | 2019 | 2018 | |||
| Key liquidity figures | Real estate business key performance indicators |
|||||||||||
| Cash flow from operations |
19.5 | 43.9 | 119.9 | – 205.1 | – 40.4 | Volume of sales contracts | 145.6 | 1,140.1 | 464.4 | 1,403.1 | 460.8 | |
| Cash flow from operations without new |
1,033 | |||||||||||
| 4,763.2 | ||||||||||||
| Cash and cash equivalents and term deposits1 |
213.4 | 151.0 | 232.0 | 117.1 | 88.0 | of which already sold | 2,891.4 | 3,038.9 | 2,328.8 | 2,174.0 | 998.2 | |
| Project portfolio (existing projects) | In units | 16,644 | 16,418 | 13,561 | 13,715 | 11,041 | ||||||
| Key balance sheet figures |
of which already sold | In units | 7,179 | 7,215 | 5,381 | 4,814 | 2,395 | |||||
| Total assets | 1,681.2 | 1,520.8 | 1,283.1 | 1,123.4 | 686.6 | Volume of new approvals6 | 285.3 | 1,587.4 | 489.9 | 1,284.2 | 1,298.0 | |
| Inventories | 925.7 | 843.7 | 777.8 | 732.1 | 404.4 | Volume of new approvals | In units | 635 | 3,245 | 1,171 | 3,857 | 3,314 |
| Contract assets | 342.2 | 358.0 | 194.2 | 219.0 | 158.5 | |||||||
| Equity | 567.7 | 590.9 | 521.0 | 310.2 | 246.9 | Adjusted results of operations | ||||||
| Financial liabilities | 500.5 | 390.5 | 481.7 | 595.5 | 265.6 | Revenue adjusted | 268.0 | 783.6 | 480.1 | 736.7 | 372.8 | |
| Of which, from corporate finance |
202.2 | 199.1 | 207.2 | 180.8 | 66.1 | Project costs adjusted | – 199.2 | – 562.1 | – 333.5 | – 548.8 | – 266.3 | |
| Of which, from project financing |
298.3 | 191.4 | 274.5 | 414.7 | 199.5 | Gross profit adjusted | 68.8 | 221.5 | 146.6 | 187.8 | 106.4 | |
| Gross profit margin adjusted | 25.7% | 28.3% | 30.5% | 25.5% | 28.5% | |||||||
| Net financial debt2 | 287.1 | 239.5 | 249.7 | 478.4 | 177.5 | Platform costs adjusted | – 34.4 | – 80.5 | – 65.5 | – 59.0 | – 56.9 | |
| Leverage | 1.8 | 1.5 | 2.8 | 3.6 | 3.5 | Share of results of joint ventures adjusted |
1.5 | 14.6 | 2.7 | 0.7 | 0.0 | |
| Loan-to-cost3 | 23.0 | 20.1 | 25.7 | 50.3 | n/a | Earnings before interest and tax (EBIT) adjusted |
35.9 | 155.7 | 83.8 | 129.6 | 49.6 | |
| ROCE4 adjusted | 18.5 | 22.0 | 10.3 | 22.8 | 11.9 | EBIT margin adjusted | 13.4% | 19.9% | 17.5% | 17.6% | 13.7% | |
| Income from investments adjusted | 0.0 | 0.1 | – 1.2 | – 5.7 | – 0.4 | |||||||
| Employees | Financial result adjusted | – 7.5 | – 19.3 | – 23.2 | – 16.1 | – 7.7 | ||||||
| Number | 486 | 457 | 413 | 375 | 311 | Earnings before tax (EBT) adjusted | 28.5 | 136.5 | 59.4 | 107.8 | 41.5 | |
| FTE5 | 409.2 | 387.6 | 342.5 | 307.7 | 258.7 | EBT margin adjusted | 10.6% | 17.4% | 12.4% | 14.6% | 11.5% | |
| Income taxes adjusted | – 8.9 | – 39.6 | – 18.3 | – 2.2 | – 22.4 | |||||||
| Earnings after tax (EAT) adjusted | 19.6 | 96.9 | 41.1 | 105.6 | 19.1 | |||||||
| EAT margin adjusted | 7.3% | 12.4% | 8.6% | 14.3% | 5.1% | |||||||
| Earnings per share (adjusted) | In euros | 0.44 | 2.10 | 0.99 | 2.69 | 0.44 | ||||||
| Dividend per share7 | In euros | 0.62 | 0.26 | |||||||||
| investments Free cash flow |
90.2 – 56.6 In % In % |
256.3 167.4 |
225.0 – 64.2 |
115 – 237.5 |
32.1 – 39.9 |
Volume of sales contracts Project portfolio (existing projects) |
In units | 287 7,727.4 |
2,915 7,500.0 |
1,292 6,053.6 |
2,733 5,845.7 |
Dividends paid7 29.1 12.2
1 Term deposits are comprised of cash investments of more than three months.
2 Net financial debt = financial liabilities less cash and cash equivalents and term deposits.
3 Loan-to-cost = net financial debt/(inventories + contract assets).
4 Return on capital employed = LTM EBIT adjusted/(four-quarter average equity + net financial debt).
5 Full-time employees.
6 Excluding volume of approvals from joint ventures consolidated at equity.
7 Current financial year: proposed dividend / proposed distribution for current number of entitled shares (46,988,336 shares)
Group interim report
Condensed consolidated interim financial statements
Other information
Insurance of legal representatives
Review report
Disclaimer
Quarterly comparison
Multi-year overview
Contact/About Us/ Financial Calendar
Contact About us
Business Development & Communication
Burkhard Sawazki
Instone Real Estate Group SE Grugaplatz 2– 4, 45131 Essen, Germany
Telephone: +49 201 45355-137 Fax: +49 201 45355-904 Email: [email protected]
Instone Real Estate Group SE
Grugaplatz 2–4 45131 Essen, Germany Germany
Telephone: +49 201 45355-0 Fax: +49 201 45355-934 Email: [email protected]
Management Board
Kruno Crepulja (Chair of the Management Board/CEO), Dr Foruhar Madjlessi, Andreas Gräf
Chairman of the Supervisory Board
Stefan Brendgen
Commercial Register
Registered in the Commercial Register of the Essen District Court under HRB 29362
Sales tax ID number DE 300512686
Concept, design and implementation
MPM Corporate Communication Solutions, Mainz www.mpm.de
Financial calendar
| 11/08/2022 | Publication of the semi-annual report as at 30 June 2022 |
|---|---|
| 10/11/2022 | Publication of the quarterly statement as at 30 September 2022 |
Instone Real Estate Group SE
Grugaplatz 2–4 45131 Essen Germany
E-Mail: [email protected] www.instone.de