AI Terminal
Instone Real Estate Group AG
Quarterly Report • Aug 26, 2021
226_10-q_2021-08-26_12703542-57f4-4b35-a9b8-e341e0ebb881.pdf
Quarterly Report
Open in ViewerOpens in native device viewer
Interim group management report
Condensed consolidated interim financial statements
| Overview of key figures | TABLE 001 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | ||
| Performance indicators | |||
| Volume of sales contracts | 207.7 | 123.5 | |
| Volume of new approvals1 | 235.8 | 186.9 | |
| Revenues adjusted | 260.5 | 179.6 | |
| Key earnings figures | |||
| Gross profit adjusted | 76.7 | 57.8 | |
| Gross profit margin adjusted | In % | 29.4 | 32.2 |
| EBIT adjusted | 41.1 | 28.2 | |
| EBIT margin adjusted | In % | 15.8 | 15.7 |
| EBT adjusted | 33.5 | 18.7 | |
| EBT margin adjusted | In % | 12.9 | 10.4 |
| EAT adjusted | 23.4 | 13.7 | |
| EAT margin adjusted | In % | 9.0 | 7.6 |
| Key liquidity figures | |||
| Cash flow from operations | 146.2 | – 37.8 | |
| Cash flow from operations without new investments |
192.0 | 12.5 | |
| Free cash flow | 148.8 | – 49.3 | |
| Cash and cash equivalents and term deposits 2 |
272.1 | 60.0 |
| Overview of key figures | TABLE 001 | ||
|---|---|---|---|
| In millions of euros | |||
| 30/06/2021 | 31/12/2020 | ||
| Performance indicators | |||
| Project portfolio | 6,268.1 | 6,053.6 | |
| Key balance sheet figures | |||
| Total assets | 1,379.7 | 1,283.1 | |
| Equity | 527.8 | 521.0 | |
| Net financial debt1 | 128.8 | 249.7 | |
| Leverage | 1.3 | 2.8 | |
| Loan-to-Cost 2 | In % | 12.5 | 25.7 |
| ROCE 3 adjusted |
In % | 13.4 | 10.3 |
| Employees | |||
| Quantity | 437 | 413 | |
| FTE4 | 365.4 | 342.5 |
1 Net financial debt = financial liabilities less cash and cash equivalents and term deposits.
2 Loan-to-cost = net financial debt/(inventories + contract assets).
3 Return on capital employed = LTM EBIT adjusted/(four-quarter average equity + net financial debt). 4 Full-time employees.
1 Excluding volume of approvals from joint ventures consolidated at equity.
2 Term deposits are comprised of cash investments of more than three months.
OVERVIEW H1 2021
TABLE OF CONTENTS
| Interim group management report | 5 |
|---|---|
| Business model and organisational structure | 6 |
| Strategy | 7 |
| Corporate governance key performance indicators | 8 |
| Results of operations, net assets and financial position | 9 |
| Project business at a glance | 19 |
| Risk and opportunities report | 23 |
| Outlook | 24 |
| Condensed interim consolidated financial statements | 25 |
| Condensed consolidated income statement | 26 |
| Condensed consolidated statement of | |
| comprehensive income | 27 |
| Condensed consolidated statement of financial position | 28 |
| Condensed consolidated statement of cash flows | 30 |
| Condensed consolidated statement of changes in equity Selected explanatory notes to the condensed interim |
32 |
| consolidated financial statements | 33 |
| Other information | 45 |
| Responsibility statement of the legal representatives | 46 |
| Review report | 47 |
| Disclaimer | 48 |
1
2
3
Contact / About us / Financial calendar 49
INTERIM GROUP MANAGEMENT REPORT
- Interim group management report
- Business model and organisational structure
- Strategy
- Corporate governance key performance indicators
- Results of operations, net assets and financial position
- Project business at a glance
- Risk and opportunities report
- Outlook
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Business model and organisational structure
The Instone Real Estate locations have their own on-site teams responsible for acquisition, planning, construction management, and marketing and sales management, while strategic decisions are coordinated and implemented jointly with headquarters.
Instone Real Estate is one of the leading developers of residential real estate in Germany. The share is listed on the SDAX of the Frankfurt Stock Exchange. The Instone Group develops attractive residential buildings and apartment complexes and also operates in the publicly subsidised residential construction sector. It also works on contemporary urban planning and the refurbishment of listed buildings. These are marketed to owner-occupiers, retail buy-to-let investors and institutional investors. Over the past 30 years, Instone has handled more than one million square metres of real estate. The Company employs 437 employees across nine locations in Germany. As at 30 June 2021, the project portfolio of Instone Real Estate included 52 development projects with an anticipated gross development value of approximately €6.3 billion and 14,338 units.
As at 30 June 2021, approximately 90% of our portfolio (based on anticipated revenue volume after completion of development) was located in the most important conurbations and metropolitan areas in Germany (Berlin, Bonn, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Leipzig, Munich, Nuremberg and Stuttgart) and approximately 10% in other prosperous medium-sized cities. Well-connected suburbs and medium-sized cities in the metropolitan regions are becoming increasingly attractive and can thus help to meet the generally high demand for residential space.
Coverage of the entire value chain
Instone Real Estate is the only listed developer in Germany that exclusively focuses on residential real estate and also covers the entire value chain. The Instone Group offers a fully integrated platform across Germany which covers land acquisition, land development, concept planning and construction management through to marketing and sales.
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Risk and
opportunities report
Condensed consolidated interim financial statements
Strategy
- → Continued focus on the most attractive metropolitan regions and conurbations in Germany
- → Growth through expansion of our innovative "Affordable housing" product
- → Taking advantage of short-term market opportunities, particularly in terms of land acquisitions
- → Using competitive advantages based on comprehensive expertise at all stages of the value chain
- → Exploiting efficiency gains through digitisation
- → Implementing a sustainability strategy and sustainability management
Boosting efficiency through digitisation
Key performance indicators
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Financial and real estate business key performance indicators
Important key performance indicators
In order to manage our sustainable economic success, we use the profit-based key performance indicators (KPIs) of adjusted revenue, adjusted gross profit margin and adjusted earnings after tax (EAT) as financial performance indicators and the real estate business key performance indicator of volume of sales contracts as a non-financial performance indicator.
Other important key performance indicators
In addition, the management of Instone Real Estate uses the following KPIs for analysis and reporting: current offer for sale, project portfolio, volume of new approvals, project gross profit or loss and project gross profit margin.
Further information on corporate governance key indicators, in particular regarding their calculation, can be found on pages 93–94 in the 2020 Annual Report.
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Results of operations, net assets and financial position
| Cumulative key financial performance indicators | TABLE 002 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| Revenues adjusted 1 | 260.5 | 179.6 | 45.0% |
| Gross profit adjusted | 76.7 | 57.8 | 32.7% |
| Gross profit margin adjusted 1 | 29.4% | 32.2% | |
| EBIT adjusted | 41.1 | 28.2 | 45.7% |
| EBT adjusted | 33.5 | 18.7 | 79.1% |
| EAT adjusted 1 | 23.4 | 13.7 | 70.8% |
1 Financial performance indicators.
Results of operations
To present the results of operations, some items in the income statement are combined into new items:
- → Cost of materials and changes in inventories form project costs.
- → The gross profit item is the balance of revenue and project costs.
- → Other operating income, staff costs as well as other operating expenses and depreciation and amortisation are summarised under the heading Platform costs.
→ The consolidated earnings from operating activities and share of results of joint ventures form earnings before interest and tax (EBIT).
From the results of operations, the following adjustments are made to the adjusted results of operations, which are relevant from the point of view of the Management of the Instone Group:
As part of the adjusted earnings situation of the Instone Group, revenue recognition will continue to reflect share deals and asset deals in the same way and similarly in accordance with IFRS 15, irrespective of a decision by the IFRS IC to exempt share deals from revenue recognition over time under IFRS 15.
Adjusted earnings after tax are intended to reflect the sustained profitability and are thus adjusted for non-recurring effects relating to other periods. In particular, the following significant expenses are adjusted for disposal losses from sales of tangible or financial assets or securities, unscheduled depreciation and amortisation of tangible and financial assets, costs for acquisitions, merger losses, contractual penalties, demands for additional taxes from previous years (e.g. based on audits), severance payments to the Management Board, and personnel reductions and restructuring to a greater extent, if these do not meet the strict criteria set out in IAS 37. The adjustment of material income includes, in particular, income from capital gains arising from sales of non-current assets, compensation for damages, write-ups on non-current assets, refunds of taxes from previous years based on audits, reversals of provisions for extraordinary events and merger gains.
The ongoing effects from purchase price allocations following the expansion of the scope of consolidation in previous years have also been eliminated in the adjusted income figures.
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
The calculation of the individual adjusted items results from the following items in the income statement and the above-mentioned consolidated items:
- → Adjusted revenue is revenues adjusted for the effects from purchase price allocations and including effects from share deal agreements.
- → The adjusted project costs include the project costs adjusted for the material cost-induced other operating income (income opposed by a directly attributable item in cost of materials), indirect selling expenses and capitalised interest. It thus reflects the external costs allocated to the project developments.
- → Adjusted gross profit is the result of adjusted revenues less adjusted project costs.
- → Adjusted platform costs are the platform costs less other operating income after subtracting the cost of materials and indirect sales expenses allocated to project costs and adjusted for non-recurring effects.
- → Earnings of associates are the pro rata earnings contributions of subsidiaries included in the consolidated financial statements using the equity method.
- → Adjusted earnings before interest and tax are the adjusted gross profit reduced by the adjusted platform costs, plus the earnings of companies consolidated at equity.
- → Adjusted investment and financial result is the total of other income from investments, finance income, finance costs, and depreciation and amortisation on securities classified as financial assets less capitalised interest.
Adjusted results of operations TABLE 003
| In millions of euros | |||
|---|---|---|---|
| 6M 2021 | 6M 2020 | Change | |
| Revenues adjusted | 260.5 | 179.6 | 45.0% |
| Project costs adjusted | – 183.8 | – 121.8 | 50.9% |
| Gross profit adjusted | 76.7 | 57.8 | 32.7% |
| Gross profit margin adjusted | 29.4% | 32.2% | |
| Platform costs adjusted | – 38.1 | – 29.9 | 27.4% |
| Share of results of joint ventures adjusted | 2.5 | 0.3 | n/a |
| Earnings before interest and tax (EBIT) adjusted |
41.1 | 28.2 | 45.7% |
| EBIT margin adjusted | 15.8% | 15.7% | |
| Income from investments adjusted | 0.1 | – 0.6 | n/a |
| Financial result adjusted | – 7.6 | – 8.9 | – 14.6% |
| Earnings before tax (EBT) adjusted | 33.5 | 18.7 | 79.1% |
| EBT margin adjusted | 12.9% | 10.4% | |
| Income taxes adjusted | – 10.1 | – 4.9 | n/a |
| Earnings after tax (EAT) adjusted | 23.4 | 13.7 | 70.8% |
| EAT margin adjusted | 9.0% | 7.6% | |
- → Adjusted earnings before tax results from adjusted earnings before interest and tax less the adjusted investment and financial result.
- → Adjusted income taxes correspond to income taxes adjusted for the tax effects of purchase price allocations, share deal agreements and non-recurring effects.
- → Adjusted earnings after tax are the adjusted earnings before tax less the adjusted income taxes.
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Other information
Revenue
In the first six months of the 2021 financial year, adjusted revenue rose by around 45% to €260.5 million (previous-year period: €179.6 million). This increase in revenue is due to the successful marketing and on-schedule construction progress of the ongoing project developments. It also reflects the continued strong demand for residential real estate in contrast to the significant Covid-19 related slump in sales in the same period of the previous year.
Effects from purchase price allocations had an impact of €0.0 million on reported revenue (previous-year period: €0.3 million). The separate valuation of share deals ("Westville" project) increased the adjusted revenue by €20.1 million (previous-year period: €10.5 million).
| Revenue | TABLE 004 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| Revenue | 240.3 | 168.9 | 42.3% |
| + effects from purchase price allocations | 0.0 | 0.3 | – 100.0% |
| + effects from share deal agreements | 20.1 | 10.5 | 91.4% |
| Revenues adjusted | 260.5 | 179.6 | 45.0% |
The adjusted revenue of the Instone Group was almost exclusively generated in Germany and spread across the following regions:
Sales (adjusted) by region
1 Includes Potsdam, among others (€7.4 million) and Wiesbaden (€1.4 million)
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Project costs
The adjusted project costs, significantly influenced by the cost of materials and changes in inventories, rose to €183.8 million in the first half of 2021 (previous-year period: €121.8 million).
Purchases of land, which were at the same level as in the same period of the previous year, and the increased construction activity compared to the same period of the previous year led to an increase in the cost of materials to €198.6 million (previous-year period: €162.2 million). Changes in inventories fell to €29.5 million (previous-year period: €54.3 million) mainly due to higher inventory reductions from the sales of project developments.
Indirect sales expenses allocated to the project costs amounted to €0.6 million as at 30 June 2021 (previous-year period: €1.1 million). The adjustment of the capitalised interest in the changes in inventories of €1.2 million (previous-year period: €3.1 million) added to the project costs. The elimination of effects from purchase price allocations reduced the adjusted project costs by €-4.9 million (previous-year period: €– 0.3 million). Due to the separate valuation of the share deals, project costs increased by €17.9 million (previous-year period: €10.1 million).
| Project costs | |||||
|---|---|---|---|---|---|
| In millions of euros | |||||
| 6M 2021 | 6M 2020 | Change | |||
| Project costs | 169.1 | 107.8 | 56.9% | ||
| + effects from purchase price allocations | – 4.9 | – 0.3 | n/a | ||
| + effects from reclassifications | 1.8 | 4.2 | – 57.1% | ||
| + effects from share deal agreements | 17.9 | 10.1 | 77.2% | ||
| Project costs adjusted | 183.8 | 121.8 | 50.9% |
Gross profit
The adjusted gross profit improved by around 33% compared to the previous-year figure, reaching €76.7 million (previous-year period: €57.8 million), due to the increase in revenue in the first half of the year.
| Gross profit | TABLE 006 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| Gross profit | 71.3 | 61.1 | 16.7% |
| + effects from purchase price allocations | 4.9 | 0.6 | n/a |
| + effects from reclassifications | – 1.8 | – 4.2 | – 57.1% |
| + effects from share deal agreements | 2.2 | 0.4 | 450.0% |
| Gross profit adjusted | 76.7 | 57.8 | 32.7% |
| Gross profit margin adjusted | 29.4% | 32.2% |
The adjusted gross profit margin – calculated from the adjusted gross profit relating to the adjusted revenue – amounted to 29.4% (previous-year period: 32.2%). As expected, the adjusted gross profit margin fell in the first half of the year compared to the same period in the previous year.
Platform costs
The adjusted platform costs increased to €38.1 million (previous-year period: €29.9 million). In the first half of 2021, indirect sales costs of €0.6 million (previous-year period: €1.1 million) were reclassified in project costs.
| Platform costs | TABLE 007 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| Platform costs | 38.7 | 31.0 | 24.8% |
| + effects from reclassifications | – 0.6 | – 1.1 | – 45.5% |
| Platform costs adjusted | 38.1 | 29.9 | 27.4% |
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
In the first six months of the 2021 financial year, staff costs rose to €25.1 million compared to the previous year (previous-year period: €20.0 million). This is mainly due to the higher number of employees as at the reporting date of 437 (30 June 2020: 391) and the corresponding increase in the FTE figure of 365.4 (30 June 2020: 323.1). Other operating income dropped to €1.8 million mainly due to lower income from settlements in connection with legal disputes (previous-year period: €4.6 million). Other operating expenses decreased to €13.1 million in the period under review (previous-year period: €13.6 million). Depreciation and amortisation was €2.3 million (previous-year period: €2.0 million), the same level as last year.
Share of results of joint ventures
The adjusted share of results from joint ventures amounting to €2.5 million (previous-year period: €0.3 million) was mainly generated from a joint venture's successfully marketed project development.
Earnings before interest and tax (EBIT)
Adjusted earnings before interest and tax rose significantly by around 46% to €41.1 million in the first half of 2021, mainly due to the higher revenue volume and the improved gross profit (previous-year period: €28.2 million).
| EBIT | TABLE 008 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| EBIT | 35.1 | 30.3 | 15.8% |
| + effects from purchase price allocations | 4.9 | 0.6 | n/a |
| + effects from reclassifications | – 1.2 | – 3.1 | – 61.3% |
| + effects from share deal agreements | 2.2 | 0.4 | 450.0% |
| EBIT adjusted | 41.1 | 28.2 | 45.7% |
| EBIT margin adjusted | 15.8% | 15.7% |
Investment and financial result
The adjusted result from investments amounted to €0.1 million in the first half of 2021 (previous-year period: €– 0.6 million) and thus had no material impact on results of operations.
The financial result decreased in the first six months of 2021 to €– 8.8 million (previous-year period: €– 12.0 million). The scheduled reduction in interest expenses is mainly due to the refinancing to better conditions successfully carried out in 2020 and the lower utilisation of project financing in the current period under review compared to the previous-year period.
The financial result, adjusted for the interest from project financing capitalised in the changes in inventories before the start of sales in the amount of €1.2 million (previous-year period: €3.1 million), improved to €– 7.6 million (previous-year period: €– 8.9 million).
Earnings before tax (EBT)
Adjusted earnings before tax rose significantly to €33.5 million (previous-year period: €18.7 million) mainly due to the increase in revenue, the improved gross profit and the reduced interest expenses.
| EBT | TABLE 009 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| EBT | 26.4 | 17.7 | 49.2% |
| + effects from purchase price allocations | 4.9 | 0.6 | n/a |
| + effects from share deal agreements | 2.2 | 0.4 | 450.0% |
| EBT adjusted | 33.5 | 18.7 | 79.1% |
| EBT margin adjusted | 12.9% | 10.4% |
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Income taxes
Adjusted income taxes amounted to €10.1 million in the first half of the year (previous-year period: €4.9 million). The tax rate in the adjusted results of operations was around 30% in the reporting period (previous-year period: around 26%).
Income taxes in the reported earnings amounted to an expense of €8.6 million (previous-year period: €4.7 million).
Earnings after tax (EAT)
As a result of the effects mentioned above, the adjusted earnings after tax of the Instone Group totalled €23.4 million (previous-year period: €13.7 million). Before adjustment for effects from purchase price allocations as well as effects from share deal agreements, reported earnings after tax were €17.8 million (previous-year period: €13.0 million).
| EAT | TABLE 010 | 2020, 10 million new shares were issued as part of a capital increase. | ||||
|---|---|---|---|---|---|---|
| In millions of euros | ||||||
| 6M 2021 | 6M 2020 | Change | Earnings per share | |||
| EAT | 17.8 | 13.0 | 36.9% | In millions of euros | ||
| + effects from purchase price allocations | 3.4 | 0.4 | n/a | |||
| + effects from share deal agreements | 2.2 | 0.3 | 633.3% | Shares (in thousands of units)1 | 46,988.3 | 39,299.6 |
| EAT adjusted | 23.4 | 13.7 | 70.8% | |||
| EAT margin adjusted | 9.0% | 7.6% | Owners of the Company | 20.2 | 13.0 | |
Earnings after tax and after minority interests
The non-controlling interests in reported and adjusted earnings after tax amounted to €–2.4 million (previous-year period: €0.0 million).
| Earnings after tax and after minority interests | TABLE 011 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| EAT after minority interests | 20.2 | 13.0 | 55.4% |
| + effects from purchase price allocations | 3.4 | 0.4 | n/a |
| + effects from share deal agreements | 2.2 | 0.3 | 633.3% |
| EAT adjusted after minority interests | 25.8 | 13.7 | 88.3% |
Earnings per share
Adjusted earnings per share after minority interests were significantly higher in the first half of 2021 at €0.55 (previous-year period: €0.35). In the second half of
| Earnings per share | TABLE 012 | ||
|---|---|---|---|
| In millions of euros | |||
| 6M 2021 | 6M 2020 | Change | |
| Shares (in thousands of units)1 | 46,988.3 | 39,299.6 | 19.6% |
| Owners of the Company | 20.2 | 13.0 | 55.4% |
| Earnings per share (in euros) | 0.43 | 0.33 | 30.0% |
| Owners of the Company adjusted | 25.8 | 13.7 | 88.3% |
| Earnings per share adjusted (in euros) | 0.55 | 0.35 | 57.5% |
1 Average weighted number of shares as at 30 June 2020 adjusted due to the issue of bonus shares
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
| Net assets | |
|---|---|
| ------------ | -- |
| Condensed statement of financial position 1 | TABLE 013 | ||
|---|---|---|---|
| In millions of euros | |||
| 30/06/2021 | 31/12/2020 | Change | |
| Non-current assets | 57.4 | 52.9 | 8.5% |
| Inventories | 807.3 | 777.8 | 3.8% |
| Contract assets | 219.4 | 194.2 | 13.0% |
| Other receivables and assets | 23.5 | 26.3 | – 10.6% |
| Cash and cash equivalents and term deposits | 272.1 | 232.0 | 17.3% |
| Assets | 1,379.7 | 1,283.1 | 7.5% |
| Equity | 527.8 | 521.0 | 1.3% |
| Liabilities from corporate finance | 227.0 | 207.2 | 9.6% |
| Liabilities from project-related financing | 173.9 | 274.5 | – 36.6% |
| Provisions and other liabilities | 451.0 | 280.4 | 60.8% |
| Equity and liabilities | 1,379.7 | 1,283.1 | 7.5% |
1 Items have been adjusted: term deposit have been allocated to liquid assets due to short- to medium-term availability, financial liabilities are classified on the basis of their use in corporate finance or project financing.
The total assets of the Instone Group increased to €1,379.7 million as at 30 June 2021 (31 December 2020: €1,283.1 million). This is mainly due to the increase in cash and cash equivalents brought about by the inflow from the operating cash flow.
As at 30 June 2021, inventories had risen to €807.3 million (31 December 2020: €777.8 million). On the one hand, this increase in inventories results from the additions from the purchase of new land for future residential project developments and capitalised construction services, and on the other, from disposals in connection with concluded sales agreements. As at 30 June 2021, historical acquisition costs and incidental acquisition costs for land amounting to €599.4 million (31 December 2020: €583.7 million) were included in inventories. The receivables from customers for work-in-progress already sold (contract assets, gross) and valued at the current fulfilment of development had increased to €606.1 million as at 30 June 2021 (31 December 2020: €573.1 million) due to increased completions and sales. Payments received from customers amounted to €391.8 million as at 30 June 2021 (31 December 2020: €383.5 million). The capitalised direct distribution costs increased to €5.0 million (31 December 2020: €4.6 million). The balance of these items resulted in an increase in the contract assets recognised in the balance sheet to €219.4 million (31 December 2020: €194.2 million).
| Contract assets | TABLE 014 | ||
|---|---|---|---|
| In millions of euros | |||
| 30/06/2021 | 31/12/2020 | Change | |
| Contract assets (gross) | 606.1 | 573.1 | 5.8% |
| Payments received | – 391.8 | – 383.5 | 2.2% |
| 214.3 | 189.6 | 13.0% | |
| Capitalised costs to obtain a contract | 5.0 | 4.6 | 8.7% |
| Contract assets (net) | 219.4 | 194.2 | 13.0% |
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 2019 financial year, as at 30 June 2021 inventories and contract assets still included write-ups of €38.1 million (31 December 2020: €43.0 million) from purchase price allocations. Based on current estimates, the Instone Group expects these effects to expire in 2024.
The shares accounted for using the equity method, which also include investments in project companies, rose in the first half of 2021 to €13.4 million (31 December 2020: €10.9 million) due to project developments in joint ventures starting to be realised.
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
The non-current financial receivables without term deposits amounting to €23.4 million (31 December 2020: €21.5 million) included loans to joint ventures accounted for using the equity method and grew in the first half of 2021 due to further payments to joint ventures.
Cash and cash equivalents as well as long-term and short-term deposits of €272.1 million (31 December 2020: €232.0 million) increased mainly as a result of the positive inflow of cash from operations. In the period under review, project financing was also reduced. As at the reporting date, the term deposits amounted to a total of €140.0 million (31 December 2020: €145.0 million) and had a maturity of more than three months. For more information, please refer to the Group's consolidated statement of cash flows. Page 30 et seq.
Non-current financial liabilities decreased to €286.4 million as at 30 June 2021 (31 December 2020: €313.7 million). In the same period, current financial liabilities decreased to €114.5 million (31 December 2020: €168.0 million).
Liabilities from net assets attributable to non-controlling interests amounting to €0.0 million (31 December 2020: €10.3 million) related to shares of the non-controlling interests of "Projekt Wilhelmstraße Wiesbaden GmbH & Co. KG". This reduction resulted from the scheduled withdrawal of the shareholders from the company's assets.
Trade payables increased during the first half of 2021 to €91.2 million (31 December 2020: €68.9 million) and essentially comprise the services provided by contractors that had not yet been settled as at the reporting date.
Other short-term liabilities of €252.0 million (31 December 2020: €88.7 million) mainly included advance payments received for work-in-progress.
The equity ratio as at 30 June 2021 was 38.3% (31 December 2020: 40.6%).
Net financial debt and debt-to-equity ratio TABLE 015
In millions of euros
| 30/06/2021 | 31/12/2020 | Change | |
|---|---|---|---|
| Non-current financial liabilities | 286.4 | 313.7 | – 8.7% |
| Current financial liabilities | 114.5 | 168.0 | – 31.8% |
| Financial liabilities | 400.9 | 481.7 | – 16.8% |
| – Cash and cash equivalents and term deposits | – 272.1 | – 232.0 | 17.3% |
| Net financial debt (NFD) | 128.8 | 249.7 | – 48.4% |
| Inventories and contract assets | 1,026.7 | 971.9 | 5.6% |
| Loan-to-cost 1 | 12.5% | 25.7% | |
| EBIT adjusted (LTM²) | 96.7 | 83.8 | 15.4% |
| Depreciation and amortisation (LTM²) | 4.3 | 4.1 | 4.9% |
| EBITDA adjusted (LTM²) | 101.0 | 87.9 | 14.9% |
| Leverage (NFS/EBITDA adjusted [LTM ²]) | 1.3 | 2.8 |
1 Loan-to-cost = net financial debt/(inventories + contract assets). 2 LTM = last twelve months.
Leverage has decreased compared to the corresponding value of the previous year. The disproportionately reduced net debt of €128.8 million (31 December 2020: €249.7 million) resulting from the positive operating cash inflow has reduced the leverage to 1.3 times (31 December 2020: 2.8 times) adjusted EBITDA. At the same time, the ratio of net debt to balance sheet inventories and contract assets improved to 12.5% (31 December 2020: 25.7%).
Deferred tax liabilities as at 30 June 2020 amounted to €28.8 million (31 December 2020: €22.9 million). The increase is due primarily to the increase in contract assets and the associated positive realisation of earnings.
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Financial position
Utilisation of lines of corporate finance amounted to €206.0 million (31 December 2020: €206.0 million). Utilisation of lines of project financing decreased to €174.5 million (31 December 2020: €275.9 million). The total funding available, now amounting to €634.7 million (31 December 2020: €798.7 million), decreased during the period under review as more project financing came to an end than was newly agreed. As at 30 June 2021, there were unused credit lines available to Instone Real Estate amounting to €133.5 million (31 December 2020: €163.7 million) from project financing and €119.0 million (31 December 2020: €119.0 million) from corporate finance.
In the first half of 2021, recognised liabilities from corporate finance increased to €210.0 million (31 December 2020: €206.9 million). Recognised liabilities from project-related financing decreased to €173.9 million (31 December 2020: €274.5 million). Loans received from minority shareholders amounted to €16.8 million (31 December 2020: €0 million). Recognised total liabilities from financing operations thus fell to €400.9 million on the reporting date (31 December 2020: €481.5 million). The current project financing included in this is comprised of option agreements for extension.
309.7 174.5
The maturities of the non-discounted repayment amounts are as follows:
| Financial liabilities | TABLE 016 | |||
|---|---|---|---|---|
| In millions of euros | ||||
| Due by | Credit line | Utilisation as at 30/06/2021 |
Interest rate conditions |
|
| Corporate finance | ||||
| Promissory note loan | 02/08/2021 | 8.5 | 8.5 | 3.10% |
| Promissory note loan | 31/08/2022 | 69.5 | 69.5 | 2.50% |
| Promissory note loan | 31/08/2024 | 28.0 | 28.0 | 2.50% |
| Syndicated loan | 31/08/2025 | 100.0 | 100.0 | 4.00% |
| Current account loans < 1 year | 31/12/2023 | 94.0 | 0.0 | 2.85% |
| Current account loans > 1 and < 2 years | 30/06/2022 | 5.0 | 0.0 | 2.00% |
| Current account loans > 2 and < 3 years | 30/06/2023 | 20.0 | 0.0 | 2.85% |
| 325.0 | 206.0 | |||
| Project financing | ||||
| Term < 1 year | 30/06/2022 | 113.1 | 101.2 | 1.45% to 2.25% |
| Term > 1 and < 2 years | 30/06/2023 | 42.5 | 35.3 | 1.60% to 1.95% |
| Term > 2 and < 3 years | 30/06/2024 | 139.2 | 23.3 | 1.25% to 2.38% |
Term > 3 years 30/06/2024 14.9 14.7 2.04%
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Risk and
opportunities report
Condensed consolidated interim financial statements
| Condensed statement of cash flows | TABLE 017 |
|---|---|
| ----------------------------------- | ----------- |
In millions of euros
| 6M 2021 | 6M 2020 | Change | |
|---|---|---|---|
| Cash flow from operations | 146.2 | – 37.8 | n/a |
| Cash flow from investing activities | 2.6 | – 11.5 | n/a |
| Free cash flow | 148.8 | – 49.3 | n/a |
| Cash flow from financing activities | – 103.7 | – 7.8 | n/a |
| Cash change in cash and cash equivalents | 45.1 | – 57.1 | n/a |
| Cash and cash equivalents at the beginning of the period |
87.0 | 117.1 | – 25.7% |
| Other changes in cash and cash equivalents | 0.0 | 0.0 | n/a |
| Cash and cash equivalents at the end of the period |
132.1 | 60.0 | 120.2% |
The cash flow from operations of the Instone Group of €146.2 million in the first half of 2021 (previous-year period: €– 37.8 million) was essentially due to the increased payment flows from customer payments for current projects with simultaneous purchase price payments and land acquisition taxes for land plots totalling €45.8 million (previous-year period: €50.3 million).
In the first six months of the 2021 financial year, the Instone Group was able to achieve a positive overall cash flow from operations and thus strengthen its position in terms of cash and cash equivalents. The operating cash flow, adjusted for payments for land, in the period under review was distinctly positive at €192.0 million (previous-year period: €12.5 million). This underpins the sustained positive return flows of liquidity to the Instone Group from the current residential property developments, in spite of the ongoing restrictions due to the coronavirus crisis.
Cash flow from operations TABLE 018 In millions of euros
| 6M 2021 | 6M 2020 | Change | |
|---|---|---|---|
| EBITDA adjusted | 43.3 | 30.2 | 43.4% |
| Other non-cash items | – 6.9 | 0.5 | n/a |
| Taxes paid | – 7.4 | – 7.1 | 4.2% |
| Change in working capital | 117.2 | – 61.5 | n/a |
| Cash flow from operations | 146.2 | – 37.8 | n/a |
| Payments for land | 45.8 | 50.3 | – 8.9% |
| Cash flow from operations without new investments |
192.0 | 12.5 | n/a |
Cash flow from investing activities amounted to €2.6 million in the period under review (previous-year period: €– 11.5 million). This was mainly influenced by the change in non-current and current financial assets in terms of free liquidity in the amount of €5.0 million, the repayment of a loan to the minority shareholders of a Group company in the amount of €1.7 million.
The cash flow from financing activities as at 30 June 2021 was at €–103.7 million (previous-year period: €–7.8 million). This was mainly due to the repayment of loans in the amount of €142.3 million, cash inflows from new loans of €39.7 million, the paid dividend of €12.2 million and payments of €16.6 million from a minority shareholder as a loan as well as €0.2 million as equity.
As at 30 June 2021, financial resources had increased to €132.1 million (31 December 2020: €87.0 million). This includes committed funds amounting to €13.1 million (31 December 2020: €8.3 million) to secure ongoing project financing.
As at 30 June 2021, the guarantee facilities of the credit insurers had been further increased to €309.0 million (31 December 2020: €272.4 million).
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Project business at a glance
Condensed consolidated interim financial statements
Other information
Project business at a glance
| medium-class cities. |
|---|
| Marketing in 6M 2021 by region |
| Berlin |
| Munich |
| Hamburg |
| 0.7 |
of which already sold In units 5,679 5,381
The positive sales development from the first quarter was maintained in the further course of 2021. As a result, a volume of sales contracts of €207.7 million and 541 units was achieved for the first half of 2021. This was mainly due to the consistently high rate of sales for our unit sales projects on the market. In total, some 276 units were sold with a volume of €162.9 million. For three of our projects in individual sales, we also achieved full commercialisation of all residential units in the second quarter. The sales success in the first half of 2021 was enhanced by package and property sales with a volume of €44.8 million.
Compared to the half-year value for 2020 (€123.5 million and 456 units), our volume of sales contracts increased significantly. This is due in particular to the temporarily restrained willingness to make purchases in the first half of 2020 and the limited opportunities in addressing the market due to the Covid-19 pandemic in the previous year. The stabilisation of demand on the market for residential
property, which returned at the beginning of the second half of 2020, was not affected by the renewed lockdown measures in the first half of 2021. In particular, there was continuously high demand for the projects that entered commercialisation in the first half of 2021. This led to an increase in the volume of sales contracts from new projects to €162.9 million and 276 units compared to the previous year's level of €95.7 million and 156 units.
The volume of sales contracts realised as at 30 June 2021 is concentrated almost exclusively in the most important metropolitan regions in Germany, accounting for approximately 92% of the total. Around 8% is located in other prosperous
1 mainly includes Potsdam
Marketing in 6M 2021 by region
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
The following projects mainly contributed to successful marketing in the 2021 period under review:
TABLE 020
Volume units
Real estate business key performance indicators - Volume of sales contracts 6M 2021
In millions of euros
| "Wohnen im Hochfeld" Unterbach | Düsseldorf | 41.3 | 65 |
|---|---|---|---|
| St. Marienkrankenhaus | Frankfurt a. M. | 31.8 | 22 |
| "Neckar.Au Viertel" | Rottenburg | 30.6 | 89 |
| Seetor "City Campus" | Nuremberg | 19.5 | 35 |
| "Carlina Park", Schopenhauerstraße | Nuremberg | 15.7 | 22 |
| Rote Kaserne West - "Fontane Gärten" | Potsdam | 15.4 | 25 |
| Schulterblatt "Amanda" | Hamburg | 14.5 | 17 |
| "Lokhöfe" Rosenheim, Bahnhofsareal Nord | Rosenheim | 11.2 | 67 |
| "Schönhof-Viertel" 1 | Frankfurt | 6.3 | 186 |
| Kitzmann, Südliche Stadtmauerstr. | Erlangen | 5.3 | 1 |
1 Contractually agreed extra revenues from the additional spaces during the course of consolidating planning.
As at 30 June 2021, ten unit sales projects were on the market with an offer of sale of 334 units and a remaining volume of sales contracts of around €168 million. The supply base of residential units was therefore increased compared to 31 March 2021 (305 units). The start of sales in the "Lokhöfe, Bahnhofsareal Nord" project in Rosenheim, with 143 units and an expected volume of sales contracts of around €25 million, contributed to this. As expected, the sales process for the second sales phase of the "Fontane Gärten" project in Potsdam, with 54 units and a sales volume of approx. €31 million, has also begun. The excellent figures for the projects had a negative impact on the market supply at the same time. In the case of the "Lokhöfe, Bahnhofsareal Nord" project in Rosenheim, for example, almost half of the residential units were sold within the second quarter of 2021 following the start of sales in April 2021.
Compared with the end of the first half of 2020, when the offer of sale was 385 units (€273 million), the supply base on the market as at 30 June 2021 (334 units) was slightly lower. This is due, among other things, to the high speed of sales in 2021. Thus, the planned sales launches, the sales speed at a very high level and
the existing reservations and notary appointments at the end of the half-year provide a good basis for successful commercialisation in the second half of the 2021 financial year.
As at the interim reporting date, Instone Real Estate's project portfolio comprised 52 projects, from which we currently anticipate total volume of sales contracts of €6,268.1 million, and was therefore expanded in comparison to 30 March 2021 (€6,054.2 million). In addition to the acquisition in the first quarter (€70 million), two further projects were acquired with an expected volume of sales contracts of approx. €166 million and 275 units in the second quarter of 2021. At the same time, the property sale "Kitzmann, Südliche Stadtmauer, Erlangen" was handed over to the purchaser in the second quarter of 2021 (€5 million) and therefore added to the two projects completed in the first quarter of 2021 and removed from the portfolio (€87 million). Further concretisation of planning and changes in sales concepts in the portfolio projects led to realised and expected revenue increases of around €71 million.
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Condensed consolidated interim financial statements
Taking into account an assumed price development for projects not yet in distribution – of 1.5% per annum on the revenue side and 3.5% per annum on the construction cost side – this results in an anticipated project gross profit margin on the project portfolio of about 26% as at the reporting date, exclusive of the large "Westville" project in Frankfurt am Main.1)
1 If the major "Westville" project is taken into consideration, the expected project gross profit margin for the project portfolio is about 25%.
1 Includes Wiesbaden, Hanover, Potsdam, Bamberg
The majority – approximately 90% – of anticipated overall volume of sales contracts from the project portfolio as at 30 June 2021 is located in the most important metropolitan regions of Germany: Berlin, Bonn, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Leipzig, Munich, Nuremberg and Stuttgart. Around 10% is attributable to other prosperous medium-sized cities.
Project portfolio by groups; Basis: Sale proceeds
In %
1
7.4% of the project portfolio has already been handed over.
Based on the continuous growth of our project portfolio in recent years, the majority of our ongoing projects are in the "pre-sale" stage of development. Compared with 31 March 2021, the three categories "pre-construction" 13.7% (13.2%), "under construction" 28.6% (29.6%) and "pre-sales" 57.7% (57.2%) are at a comparable level.
In addition, the preceding diagram shows that, as at 30 June 2021 we have already sold approximately 39% of the anticipated overall volume of sales contracts of the project portfolio. In terms of the anticipated volume of sales contracts, approximately 92% of the "under construction" and "pre-construction" projects were sold as at 30 June 2021.
Group interim report
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Project business
at a glance
Condensed consolidated interim financial statements
In addition to the 52 projects, Instone Real Estate's project portfolio will be supplemented by two further projects that will be realised in companies accounted for using the equity method. In Berlin and the Frankfurt am Main region, two neighbourhoods are being built with an expected volume of sales contracts of around €600 million (Instone's share approx. €300 million) and 1,416 units. In the Berlin project "Friedenauer Höhe", a construction phase comprising 537 rental flats has already been sold to Quantum Immobilien KVG and is under construction.
Adjusted revenue
Adjusted revenue amounted to €260.5 million as at 30 June 2021 (previous-year period: €179.6 million). The following projects carried out contributed in particular to the adjusted revenue in the period under review:
| Key projects revenue recognition | TABLE 021 |
|---|---|
| (adjusted) 6M 2021 |
| Revenue volume (adjusted) | ||
|---|---|---|
| St. Marienkrankenhaus | Frankfurt a. M. | 43.0 |
| "Wohnen im Hochfeld" Unterbach | Düsseldorf | 24.0 |
| west.side | Bonn | 21.7 |
| Westville | Frankfurt a. M. | 20.1 |
| Schulterblatt "Amanda" | Hamburg | 16.7 |
| "Carlina Park", Schopenhauerstraße | Nuremberg | 15.3 |
| City-Prague – Wohnen im Theaterviertel | Stuttgart | 14.4 |
| Schwarzwaldstraße | Herrenberg | 12.4 |
| S`LEDERER | Schorndorf | 11.4 |
| Stephanstraße | Nuremberg | 11.1 |
In the first half of 2021, the first construction phase of the "Westville" major project with around 330 residential units began to be realised. In addition, the first construction phase of around 55 residential units was in Potsdam as part of the "Fontane Gärten" project. As expected, no other projects entered the construction phase in the second quarter of 2021. For the second half of 2021, we expect there to be a significant increase in construction starts, provided that there is no pandemic-related delay in building authority procedures.
The projects that are already under construction progressed according to plan in the first half of 2021. Although isolated cases of Covid-19 were reported in various trades, these were identified and isolated at an early stage, so that the effects remained manageable both in terms of people's health and the construction process, and the production process continued uninterrupted. The handover processes for the projects already completed also went according to plan.
At completion, Instone Real Estate projects have 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.
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Risk and
opportunities report
Condensed consolidated interim financial statements
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 2020 Annual Report, pages 123–138, "Risk and opportunities report".
Despite the third wave of Covid-19 and a renewed lockdown in the first half of 2021, there was no material change in the risk and opportunities situation compared to our presentation in the 2020 Annual Report. From today's perspective, there are no identifiable risks that jeopardise the continued existence of the Instone Group.
Outlook
Business model and organisational structure
Corporate strategy and management
Results of operations, net assets and financial position
Outlook
Condensed consolidated interim financial statements
Our forecast for business development for the 2021 financial year, which we published in the 2020 Annual Report, is fully confirmed.
The Management Board now expects the financial and operational key indicators to develop as follows:
| Forecast | TABLE 022 |
|---|---|
| In millions of euros | |
| 2021 |
| Revenues (adjusted) | 820 to 900 |
|---|---|
| Gross profit margin (adjusted) | 26 to 27% |
| Earnings after tax (adjusted) | 90 to 95 |
| Volume of sales contracts | greater than 900 |
These forecasts are based, among other things, on the assumption that – despite continuing uncertainties – there will be no renewed intensified restrictions as a result of the Covid-19 pandemic in the further course of the year which could have a temporary negative impact on Instone Real Estate's sales activities or construction performance.
CONDENSED CONSOLIDATED 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
Condensed consolidated income statement
| CONSOLIDATED INCOME STATEMENT | TABLE 023 | |
|---|---|---|
| In thousands of euros | ||
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
| Revenue | 240,348 | 168,876 |
| Changes in inventories | 29,539 | 54,349 |
| 269,886 | 223,226 | |
| Other operating income | 1,779 | 4,599 |
| Cost of materials | – 198,593 | – 162,150 |
| Staff costs | – 25,141 | – 19,959 |
| Other operating expenses | – 13,072 | – 13,597 |
| Depreciation and amortisation | – 2,273 | – 2,028 |
| Consolidated earnings from operating activities | 32,586 | 30,090 |
| Share of results of joint ventures | 2,550 | 255 |
| Other results from investments | 87 | – 616 |
| Finance income | 7 | 48 |
| Finance costs | – 8,722 | – 11,958 |
| Other financial result | – 122 | – 97 |
| Consolidated earnings before tax (EBT) | 26,387 | 17,722 |
| Income taxes | – 8,576 | – 4,693 |
| Consolidated earnings after tax (EAT) | 17,810 | 13,029 |
| Attributable to: | ||
| Owners of the Company | 20,222 | 13,023 |
| Non-controlling interests | – 2,411 | 6 |
| Weighted average number of shares (in units) | 46,988,336 | 39,299,574 |
| Basic and diluted earnings per share (in euros)1 | 0.43 | 0.33 |
1 The weighted average number of shares was adjusted retroactively due to the issuing of new shares with subscription rights in the 2020 financial year.
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
Condensed consolidated statement of comprehensive income
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | TABLE 024 | |
|---|---|---|
| In thousands of euros | ||
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
| Consolidated earnings after tax | 17,810 | 13,029 |
| Items which are not reclassified into the consolidated earnings in future periods | ||
| Actuarial gains and losses | 1,382 | 16 |
| Income tax effects | – 442 | – 5 |
| Income and expenses after tax recognised directly in equity | 940 | 11 |
| Total comprehensive income for the financial year after tax | 18,750 | 13,040 |
| Attributable to: | ||
| Owners of the Company | 21,161 | 13,034 |
| Non-controlling interests | – 2,411 | 6 |
| 18,750 | 13,040 |
Condensed consolidated statement of financial position
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
| In thousands of euros | ||
|---|---|---|
| 30/06/2021 | 31/12/2020 | |
| ASSETS | ||
| Non-current assets | ||
| Goodwill | 6,056 | 6,056 |
| Intangible assets | 1,311 | 932 |
| Right of use assets | 10,403 | 10,535 |
| Property, plant and equipment | 2,126 | 2,273 |
| Interests in joint ventures | 13,421 | 10,871 |
| Other investments | 455 | 445 |
| Financial receivables | 43,353 | 21,467 |
| Deferred tax | 264 | 297 |
| 77,389 | 52,876 | |
| Current assets | ||
| Inventories | 807,300 | 777,761 |
| Financial receivables | 120,669 | 155,750 |
| Contract assets | 219,382 | 194,158 |
| Trade receivables | 2,913 | 1,080 |
| Other receivables and other assets | 17,221 | 12,065 |
| Income tax assets | 2,660 | 2,359 |
| Cash and cash equivalents | 132,143 | 87,044 |
| 1,302,288 | 1,230,218 | |
| TOTAL ASSETS | 1,379,677 | 1,283,093 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 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
Condensed consolidated statement of financial position (continued)
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | TABLE 025 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2021 | 31/12/2020 | |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Share capital | 46,988 | 46,988 |
| Capital reserves | 358,983 | 358,983 |
| Group retained earnings/loss carryforwards | 123,548 | 115,544 |
| Accumulated reserves recognised in other comprehensive income | – 1,141 | – 2,080 |
| Equity attributable to shareholders | 528,379 | 519,435 |
| Non-controlling interests | – 575 | 1,598 |
| 527,804 | 521,033 | |
| Non-current liabilities | ||
| Provisions for pensions and similar obligations | 4,075 | 4,718 |
| Other provisions | 6,160 | 4,971 |
| Financial liabilities | 286,425 | 313,665 |
| Liabilities from net assets attributable to non-controlling interests | 13 | 10,337 |
| Leasing liabilities | 7,491 | 7,704 |
| Other liabilities | 4,980 | 4,977 |
| Deferred tax | 28,753 | 22,941 |
| 337,897 | 369,313 | |
| Current liabilities | ||
| Other provisions | 24,274 | 24,141 |
| Financial liabilities | 114,480 | 168,037 |
| Leasing liabilities | 3,174 | 3,036 |
| Contract liabilities | 18,849 | 25,554 |
| Trade payables | 91,193 | 68,895 |
| Other liabilities | 252,027 | 88,726 |
| Income tax liabilities | 9,978 | 14,359 |
| 513,975 | 392,748 | |
| TOTAL EQUITY AND LIABILITIES | 1,379,677 | 1,283,093 |
Condensed consolidated statement of cash flows
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
| In thousands of euros | ||
|---|---|---|
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
| Consolidated earnings after tax | 17,810 | 13,029 |
| (+) Depreciation and amortisation / (–) Write-ups of non-current assets | 2,273 | 423 |
| (+) Profit / (–) Loss on disposals of property, plant and equipment | 0 | 821 |
| (+) Increase / (–) Decrease in provisions | 1,870 | 511 |
| (+) Current income tax income / (–) Current income tax expense | 2,732 | 2,591 |
| (+) Deferred income tax income / (–) Deferred income tax expense | 5,402 | 1,118 |
| (+) Income from equity carrying amounts / (–) Expenses | – 2,550 | – 255 |
| (+) Profit from the investment result of minority interests / (–) Expenses | 5 | 625 |
| (+) Interest income / (–) Interest expenses | 8,836 | 11,921 |
| (+) Income / (–) Other non-cash expenses | 0 | 11 |
| (+/–) Change in net working capital 1 | 117,245 | – 61,517 |
| (+) Income tax reimbursements / (–) Income tax payments | – 7,414 | – 7,116 |
| = Cash flow from operations | 146,210 | – 37,838 |
| (–) Outflows for investments in intangible assets | – 396 | 0 |
| (+) Proceeds from disposals of property, plant and equipment | 0 | 7 |
| (–) Outflows for investments in property, plant and equipment | – 330 | – 1,139 |
| (+) Proceeds from disposals of investments | 115 | 450 |
| (–) Outflows for investments in financial assets | – 21,896 | – 10,995 |
(+) Proceeds due to financial investments within the scope of current financial planning 125,000 0 (–) Disbursements due to financial investments within the scope of current financial planning – 100,000 0 (+) Interest received 78 193 = Cash flow from investing activities 2,571 – 11,484
CONSOLIDATED STATEMENT OF CASH FLOWS 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
Condensed consolidated statement of cash flows (continued)
CONSOLIDATED STATEMENT OF CASH FLOWS TABLE 026
In thousands of euros
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
|---|---|---|
| (+) Contributions from minority shareholders | 16,849 | 0 |
| (–) Payments to minority shareholders | – 363 | – 390 |
| (+) Proceeds from loans and borrowings | 39,693 | 353,744 |
| (–) Repayments of loans and borrowings | – 142,312 | – 358,154 |
| (–) Payments from lessees to repay liabilities from lease agreements | – 1,891 | – 2,957 |
| (–) Interest paid | – 3,440 | 0 |
| (-) Dividends paid | – 12,217 | 0 |
| = Cash flow from financing activities | – 103,682 | – 7,757 |
| Cash and cash equivalents at the beginning of the period | 87,044 | 117,090 |
| (+/–) Change in cash and cash equivalents | 45,099 | – 57,080 |
| = Cash and cash equivalents at the end of the period | 132,143 | 60,010 |
1 Net working capital is composed of inventories, contract assets and trade receivables less contract liabilities and trade payables.
Condensed consolidated statement of changes in equity
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
| Condensed consolidated statement of changes in equity | ||||||
|---|---|---|---|---|---|---|
| ------------------------------------------------------- | -- | -- | -- | -- | -- | -- |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY TABLE 027
In thousands of euros
| Total | Share capital | Capital reserves | Group retained earnings/loss carryforwards |
Accumulated reserves recognised in other comprehen sive income |
Equity attributable to shareholders |
Non-controlling interests |
|
|---|---|---|---|---|---|---|---|
| As at: 31/12/2019 | 310,161 | 36,988 | 198,899 | 74,713 | – 1,364 | 309,236 | 924 |
| As at: 01/01/2020 | 310,161 | 36,988 | 198,899 | 74,713 | – 1,364 | 309,236 | 924 |
| Consolidated earnings after tax | 13,029 | 0 | 0 | 13,023 | 0 | 13,023 | 6 |
| Changes in actuarial gains and losses | 11 | 0 | 0 | 0 | 11 | 11 | 0 |
| Total comprehensive income | 13,040 | 0 | 0 | 13,023 | 11 | 13,034 | 6 |
| As at: 30/06/2020 | 323,201 | 36,988 | 198,899 | 87,735 | – 1,353 | 322,270 | 931 |
| As at: 31/12/2020 | 521,033 | 46,988 | 358,983 | 115,544 | – 2,080 | 519,435 | 1,598 |
| As at: 01/01/2021 | 521,033 | 46,988 | 358,983 | 115,544 | – 2,080 | 519,435 | 1,598 |
| Consolidated earnings after tax | 17,810 | 0 | 0 | 20,222 | 0 | 20,222 | – 2,411 |
| Changes in actuarial gains and losses | 940 | 0 | 0 | 0 | 940 | 940 | 0 |
| Total comprehensive income | 18,750 | 0 | 0 | 20,222 | 940 | 21,161 | – 2,411 |
| Dividend payments | – 12,217 | 0 | 0 | – 12,217 | 0 | – 12,217 | 0 |
| Other changes | 239 | 0 | 0 | 0 | 0 | 0 | 239 |
| – 11,978 | 0 | 0 | – 12,217 | 0 | – 12,217 | 239 | |
| As at: 30/06/2021 | 527,804 | 46,988 | 358,983 | 123,548 | – 1,141 | 528,379 | – 575 |
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
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 2021 and for the six months then ended 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 2020, 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 IFRS and published new IFRS 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 2021 have no impact on these condensed consolidated interim financial statements.
Scope of consolidation
As at 30 June 2021, in addition to Instone Real Estate Group AG, a total of 18 (31 December 2020: 18) domestic and two (31 December 2020: two) European foreign companies are part of these condensed consolidated interim financial statements and are fully consolidated.
As at 30 June 2021, seven joint ventures (31 December 2020: seven) were accounted for using the equity method.
In total, six group entities (31 December 2020: 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
Segment reporting
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 non-recurring 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 a 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 €20,129 thousand(previous-year period: €10,451 thousand),project costs of €–17,912 thousand (previous-year period: €–10,085 thousand) and income taxes of €– 36 thousand (previous-year period: €–58 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
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 2021 inventories and contract assets still included write-ups of €38,091 thousand (31 December 2020: €43,013 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: €17 thousand (previous-year period: €254 thousand) to revenue, €0 thousand (previous-year period: €–191 thousand) to cost of materials, €4,940 thousand (previous-year period: €524 thousand) to changes in inventories and €–1,483 thousand (previous-year period: €182 thousand) to income taxes. Based on current estimates, the Instone Group expects these effects to expire in 2024.
Reclassifications and non-recurring effects
Indirect sales expenses of €566 thousand as at 30 June 2021 (previous-year period: €1,104 thousand) were allocated to project costs. The adjustment of the capitalised interest in the changes in inventories of €1,199 thousand (previousyear period: €3,110 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 to the consolidated reporting:
RECONCILIATION OF ADJUSTED RESULTS OF OPERATIONS 01/01–30/06/2021 TABLE 028
| 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 | 36 | 0 | 1,483 | – 8,576 |
| EAT | 23,430 | – 2,181 | 0 | – 3,439 | 17,810 |
RECONCILIATION OF ADJUSTED RESULTS OF OPERATIONS 01/01–30/06/2020 TABLE 029
| In thousands of euros | |||||
|---|---|---|---|---|---|
| Adjusted results of operations |
Share deal effects | Reclassifications | Effects from PPA | Reported results of operations |
|
| Revenue | 179,581 | – 10,451 | 0 | – 254 | 168,876 |
| Project costs | – 121,766 | 10,085 | 4,214 | – 333 | – 107,801 |
| Cost of materials | – 163,445 | 0 | 1,104 | 191 | – 162,150 |
| Changes in inventories | 41,679 | 10,085 | 3,110 | – 524 | 54,349 |
| Gross profit | 57,815 | – 366 | 4,214 | – 587 | 61,076 |
| Platform costs | – 29,882 | 0 | – 1,104 | 0 | – 30,986 |
| Staff costs | – 19,959 | 0 | 0 | 0 | – 19,959 |
| Other operating income | 4,599 | 0 | 0 | 0 | 4,599 |
| Other operating expenses | – 12,493 | 0 | – 1,104 | 0 | – 13,597 |
| Depreciation and amortisation | – 2,028 | 0 | 0 | 0 | – 2,028 |
| Share of results of joint ventures | 255 | 0 | 0 | 0 | 255 |
| EBIT | 28,189 | – 366 | 3,110 | – 587 | 30,345 |
| Other results from investments | – 616 | 0 | 0 | 0 | – 616 |
| Financial result | – 8,897 | 0 | – 3,110 | 0 | – 12,007 |
| EBT | 18,675 | – 366 | 0 | – 587 | 17,722 |
| Tax | – 4,933 | 58 | 0 | 182 | – 4,693 |
| EAT | 13,742 | – 308 | 0 | – 405 | 13,029 |
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
Disclosures about the condensed consolidated income statement
Revenue
Revenue is spread across the following regions:
| REVENUE BY REGION | TABLE 030 | |
|---|---|---|
| In thousands of euros | ||
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
| Germany | 240,277 | 168,857 |
| Rest of Europe | 71 | 20 |
| 240,348 | 168,876 |
The composition of revenue by revenue type is shown in the following table:
| REVENUE BY REVENUE TYPE | TABLE 031 | |
|---|---|---|
| In thousands of euros | ||
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
| Revenue from building contracts | ||
| Revenue recognised over time | 232,105 | 166,399 |
| Revenue recognised at a point in time | 5,250 | 0 |
| 237,355 | 166,399 | |
| Income from leases | 2,832 | 2,400 |
| Other services | 161 | 78 |
| 240,348 | 168,876 |
The total amount of unfulfilled or partly unfulfilled performance obligations as at the balance sheet date is €982,842 thousand (31 December 2020: €1,036,967 thousand).
Depreciation and impairment
There was no impairment of right of use assets, property, plant and equipment or intangible assets.
DEPRECIATION AND AMORTISATION TABLE 032
In thousands of euros
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
|---|---|---|
| Right of use assets | – 1,779 | – 1,605 |
| Property, plant and equipment | – 477 | – 405 |
| Intangible assets | – 17 | – 18 |
| – 2,273 | – 2,028 |
Income taxes
| TABLE 033 | ||
|---|---|---|
| INCOME TAXES | ||
| In thousands of euros | ||
| 01/01 – 30/06/2021 | 01/01 – 30/06/2020 | |
| Current income tax | ||
| German trade tax | – 1,152 | – 1,655 |
| Corporation tax | – 1,580 | – 937 |
| – 2,732 | – 2,591 | |
| Deferred tax | ||
| Deferred tax | – 5,844 | – 2,101 |
| – 8,576 | – 4,693 |
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
Disclosures about the condensed consolidated statement of financial position
| Inventories | ||
|---|---|---|
| INVENTORIES | TABLE 034 | |
| In thousands of euros | ||
| 30/06/2021 | 31/12/2020 | |
| Work-in-progress | 807,244 | 777,705 |
| Finished goods | 56 | 56 |
| 807,300 | 777,761 |
Work-in-progress is subject to disposal restrictions due to project financing by banks amounting to €309,655 thousand (31 December 2020: €313,056 thousand).
Borrowing costs in the amount of €2,132 thousand (previous-year period: €4,218 thousand) were capitalised as part of production costs recognised for inventories attributable to project-related financing based on individual agreements with external lenders.
As in the same period of the previous year, inventories were not subject to impairment. As in the same period of the previous year, reversals of impairment losses were not made in the period under review.
Contract assets
The structure of contract assets is composed as follows:
| CONTRACT ASSETS | TABLE 035 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2021 | 31/12/2020 | |
| Contract assets | 606,113 | 573,066 |
| Payments received | – 391,767 | – 383,546 |
| 214,346 | 189,520 | |
| Receivables from costs to obtain a contract |
5,036 | 4,638 |
| 219,382 | 194,158 |
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 €1,071 thousand (previous-year period: €2,238 thousand) offsets the fulfilment of the underlying contracts with customers.
Financial liabilities
| FINANCIAL LIABILITIES | TABLE 036 | |
|---|---|---|
| In thousands of euros | ||
| 30/06/2021 | 31/12/2020 | |
| non-current | ||
| Loans from banks | 167,169 | 213,094 |
| Loans from third parties | 102,601 | 100,526 |
| Liabilities to minority shareholders | 16,655 | 45 |
| 286,425 | 313,665 | |
| current | ||
| Loans from banks | 114,150 | 167,849 |
| Loans from third parties | 188 | 188 |
| Liabilities to minority shareholders | 142 | 0 |
| 114,480 | 168,037 | |
| 400,905 | 481,701 |
Condensed consolidated interim financial statements
Condensed consolidated income statement
Condensed consolidated statement of financial
Condensed consolidated statement of cash flows
Condensed consolidated statement of changes in
statement of comprehensive income
FINANCIAL LIABILITIES 2021 TABLE 037
| Non-cash changes | |||||
|---|---|---|---|---|---|
| 30/06/2021 | 01/01/2021 | Cash flow from financing activities |
Deferred interest |
Amortisation from the measurement using the effective interest method |
|
| Loans from banks | 281,319 | 380,943 | – 103,501 | 2,769 | 1,108 |
| Loans from third parties | 102,789 | 100,713 | 0 | 1,984 | 92 |
| Liabilities to minority shareholders | 16,798 | 45 | 16,610 | 142 | 0 |
| 400,905 | 481,701 | – 86,891 | 4,895 | 1,200 |
FINANCIAL LIABILITIES 2020 TABLE 038
In thousands of euros
| Non-cash changes | |||||
|---|---|---|---|---|---|
| 31/12/2020 | 01/01/2020 | Cash flow from financing activities |
Deferred interest | Amortisation from the measurement using the effective interest method |
|
| Loans from banks | 380,943 | 594,881 | – 225,698 | 11,338 | 422 |
| Loans from third parties | 100,713 | 588 | 98,600 | 1,468 | 58 |
| Liabilities to minority shareholders | 45 | 45 | 0 | 0 | 0 |
| 481,701 | 595,513 | – 127,098 | 12,807 | 479 |
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.
Selected explanatory notes to the condensed consolidated 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
Disclosures about the condensed consolidated statement of cash flows
In the period under review, cash flow from financing activities resulted in an amount of €16,225 thousand from the payment of a loan from a minority shareholder.
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.
Joint venture relations
Projektentwicklungsgesellschaft
| RELATIONSHIPS WITH JOINT VENTURES/OTHER INVESTMENTS |
TABLE 039 | ||
|---|---|---|---|
| In thousands of euros | |||
| 30/06/2021 | 31/12/2020 | ||
| Receivables | |||
| FHP Friedenauer Höhe Dritte GmbH & Co. KG | 4,504 | 4,410 | |
| FHP Friedenauer Höhe Erste GmbH & Co. KG | 3,817 | 3,783 | |
| FHP Friedenauer Höhe Sechste GmbH & Co. KG | 7,619 | 7,532 | |
| FHP Friedenauer Höhe Vierte GmbH & Co. KG | 7,354 | 5,742 | |
| Wohnpark Heusenstamm GmbH & Co. KG | 30 | 0 | |
| 23,323 | 21,467 | ||
| Liabilities |
Holbeinviertel mbH & Co. KG 77 81 Wohnpark Gießener Straße GmbH & Co. KG 145 107
221 188
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 and Wohnpark Gießener Straße GmbH & Co. KG consist of interest-free loans and have a residual term of up to one year.
Relationships with related persons
There were no material transactions between Instone Real Estate Group AG, Essen, Germany or a Group company and persons from the Management Board 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.
CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS IN 2021 TABLE 040
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
| In thousands of euros | ||||
|---|---|---|---|---|
| Carrying amount 30/06/2021 | 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 | 43,353 | 23,353 | 20,000 | 0 |
| current | 120,669 | 0 | 120,669 | 0 |
| 164,022 | 23,353 | 140,669 | 0 | |
| Other investments | 455 | 455 | 0 | 0 |
| Contract assets | 219,382 | 0 | 0 | 219,382 |
| Trade receivables | 2,913 | 0 | 2,913 | 0 |
| Other receivables and other assets | 17,221 | 0 | 14,461 | 2,760 |
| Cash and cash equivalents | 132,143 | 0 | 132,143 | 0 |
| 536,137 | 23,808 | 290,186 | 222,142 | |
| EQUITY AND LIABILITIES | ||||
| Financial liabilities | ||||
| Financial liabilities | ||||
| non-current | 286,425 | 0 | 286,425 | 0 |
| current | 114,480 | 0 | 114,480 | 0 |
| 400,905 | 0 | 400,905 | 0 | |
| Contract liabilities | 18,849 | 0 | 0 | 18,849 |
| Liabilities from net assets attributable to non-controlling interests |
13 | 13 | 0 | 0 |
| Trade payables | 91,193 | 0 | 91,193 | 0 |
| Other liabilities | 257,007 | 0 | 257,007 | 0 |
| 767,967 | 13 | 749,105 | 18,849 |
CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS IN 2020 TABLE 041
| 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
| In thousands of euros | ||||
|---|---|---|---|---|
| Carrying amount 31/12/2020 | 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 | 21,467 | 21,467 | 0 | 0 |
| current | 155,750 | 0 | 155,750 | 0 |
| 177,217 | 21,467 | 155,750 | 0 | |
| Other investments | 445 | 445 | 0 | 0 |
| Contract assets | 194,158 | 0 | 0 | 194,158 |
| Trade receivables | 1,080 | 0 | 1,080 | 0 |
| Other receivables and other assets | 12,065 | 0 | 10,265 | 1,800 |
| Cash and cash equivalents | 87,044 | 0 | 87,044 | 0 |
| 472,009 | 21,912 | 254,139 | 195,958 | |
| EQUITY AND LIABILITIES | ||||
| Financial liabilities | ||||
| Financial liabilities | ||||
| non-current | 313,665 | 0 | 313,665 | 0 |
| current | 168,037 | 0 | 168,037 | 0 |
| 481,701 | 0 | 481,701 | 0 | |
| Contract liabilities | 25,554 | 0 | 0 | 25,554 |
| Liabilities from net assets attributable to non-controlling interests |
10,337 | 10,337 | 0 | 0 |
| Trade payables | 68,894 | 0 | 68,894 | 0 |
| Other liabilities | 93,703 | 0 | 93,703 | 0 |
| 680,190 | 10,337 | 644,299 | 25,554 |
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
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 exceeds the carrying amount by €9,885 thousand as at 30 June 2021 (31 December 2020: €11,311 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. Non-current financial receivables, if they are interest-free or low in interest rates, are recognised at their fair value. 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 2021.
Disclosures on preparation and approval
The Management Board of Instone Real Estate Group AG prepared the interim consolidated financial statements on 25 August 2021 and approved them for forwarding to the Supervisory Board.
Essen/Germany, 25 August 2021
The Management Board
Kruno Crepulja Dr Foruhar Madjlessi Andreas Gräf
OTHER INFORMATION
Other information
Condensed consolidated interim financial statements
Insurance of legal representatives
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, 25 August 2021
The Management Board
Kruno Crepulja Dr Foruhar Madjlessi Andreas Gräf
Review report
Contact / About Us / Financial Calendar
Insurance of legal representatives
Condensed consolidated interim financial statements
Review Report
To Instone Real Estate Group AG, Essen/Germany
We have reviewed the condensed consolidated interim financial statements – comprising the condensed consolidated statement of financial position as of 30 June 2021, 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 2021 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 2021 of Instone Real Estate Group AG, 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 AG, 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, 25 August 2021
Deloitte GmbH
Wirtschaftsprüfungsgesellschaft
Prof. Dr Holger Reichmann Michael Pfeiffer Wirtschaftsprüfer Wirtschaftsprüfer (German Public Auditor) (German Public Auditor)
Condensed consolidated interim financial statements
Insurance of legal representatives
Disclaimer
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 includes a summary of the 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 tables and the respective analyses of them 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 figures and percentage changes shown are calculated on the basis of the underlying data in the unit "thousands of euros".
Condensed consolidated interim financial statements
Insurance of legal representatives
Contact / About Us / Financial Calendar
Contact
Business Development & Communication
Burkhard Sawazki
Instone Real Estate Group AG Grugaplatz 2– 4, 45131 Essen, Germany
Telephone: +49 201 45355-137 Fax: +49 201 45355-904 Email: [email protected] Grugaplatz 2 – 4 45131 Essen Germany Telephone: +49 201 45355-0
Instone Real Estate Group AG
Fax: +49 201 45355-934 Email: [email protected]
Management Board
Kruno Crepulja (Chairman/CEO), Dr Foruhar Madjlessi, Andreas Gräf
Chairman of the Supervisory Board
Stefan Brendgen
Commercial Register
Registered in the Commercial Register of the Essen Local Court under HRB 29362
Sales tax ID number DE 300512686
Concept, design and implementation
MPM Corporate Communication Solutions, Mainz, Germany www.mpm.de
About us Financial calendar
| 26/08/2021 | Publication of the semi-annual report as at 30 June 2021 |
|---|---|
| 18/11/2021 | Publication of the quarterly statement as at 30 September 2021 |
| Key indicators | MULTI-YEAR OVERVIEW | MULTI-YEAR OVERVIEW | QUARTERLY COMPARISON |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group interim report | In millions of euros | In millions of euros | |||||||||||
| 6M 2021 | 2020 | 2019 | 2018 | 6M 2021 | 2020 | 2019 | 2018 | Q2 2021 | Q2 2020 | ||||
| Condensed consolidated interim financial statements |
Key liquidity figures | Real estate business key performance indicators |
|||||||||||
| Cash flow from operations | 146.2 | 119.9 | – 205.1 | -40.4 | Volume of sales contracts | 207.7 | 464.4 | 1,403.1 | 460.8 | 89.1 | 54.1 | ||
| Other information | Cash flow from operations without new investments |
192.0 | 225.0 | 115.0 | 32.1 | Volume of sales contracts | In units | 541 | 1,292 | 2,733 | 1,033 | 169 | 347 |
| Free cash flow | 148.8 | – 64.2 | – 237.5 | -39.9 | Project portfolio (existing projects) |
6,268.1 | 6,053.6 | 5,845.7 | 4,763.2 | 6,268.1 | 5,701.3 | ||
| Insurance of legal representatives |
Cash and cash equivalents and term deposits1 |
272.1 | 232.0 | 117.1 | 88 | of which already sold | 2,444.0 | 2,328.8 | 2,174.0 | 998.2 | 2,444.0 | 2,017.1 | |
| Project portfolio (existing projects) |
In units | 14,338 | 13,561 | 13,715 | 11,041 | 14,338 | 13,075 | ||||||
| Review Report | Key balance sheet figures | of which already sold | In units | 5,679 | 5,381 | 4,814 | 2,395 | 5,679 | 4,648 | ||||
| Disclaimer | Total assets | 1,379.7 | 1,283.1 | 1,123.4 | 686.6 | Volume of new approvals6 | 235.8 | 489.9 | 1,284.2 | 1,298.0 | 165.9 | 186.9 | |
| Inventories | 807.3 | 777.8 | 732.1 | 404.4 | Volume of new approvals | In units | 436 | 1,171 | 3,857 | 3,314 | 275 | 492 | |
| Contract assets | 219.4 | 194.2 | 219.0 | 158.5 | |||||||||
| Equity | 527.8 | 521.0 | 310.2 | 246.9 | Adjusted results of operations | ||||||||
| Contact / About Us / | Financial liabilities | 400.9 | 481.7 | 595.5 | 265.6 | Revenues adjusted | 260.5 | 480.1 | 736.7 | 372.8 | 132.4 | 79.9 | |
| Financial Calendar | of which from corporate finance |
227.0 | 207.2 | 180.8 | 66.1 | Project costs adjusted | – 183.8 | – 333.5 | – 548.8 | – 266.3 | – 96.2 | – 51.8 | |
| Multi-year overview | of which from project financing |
173.9 | 274.5 | 414.7 | 199.5 | Gross profit adjusted | 76.7 | 146.6 | 187.8 | 106.4 | 36.2 | 28.1 | |
| Gross profit margin adjusted | 29.4% | 30.5% | 25.5% | 28.5% | 27.3% | 35.2% | |||||||
| Net financial debt2 | 128.8 | 249.7 | 478.4 | 177.5 | Platform costs adjusted | – 38.1 | – 65.5 | – 59.0 | – 56.9 | – 21.8 | – 18.0 | ||
| Leverage | 1.3 | 2.8 | 3.6 | 3.5 | Share of results of joint ventures adjusted |
2.5 | 2.7 | 0.7 | 0.0 | 0.0 | 0.0 | ||
| Loan-to-cost3 In % |
12.5 | 25.7 | 50.3 | n/a | Earnings before interest and tax (EBIT) adjusted |
41.1 | 83.8 | 129.6 | 49.6 | 14.4 | 10.2 | ||
| ROCE4 adjusted In % |
13.4 | 10.3 | 22.8 | 11.9 | EBIT margin adjusted | 15.8% | 17.5% | 17.6% | 13.7% | 10.9% | 12.8% | ||
| Income from investments adjusted |
0.1 | – 1.2 | – 5.7 | – 0.4 | 0.1 | 0.2 | |||||||
| Employees | Financial result adjusted | – 7.6 | – 23.2 | – 16.1 | – 7.7 | – 3.5 | – 4.2 | ||||||
| Quantity | 437 | 413 | 375 | 311 | Earnings before tax (EBT) adjusted |
33.5 | 59.4 | 107.8 | 41.5 | 10.9 | 6.2 |
FTE5 365.4 342.5 307.7 258.7 EBT margin adjusted 12.9% 12.4% 14.6% 11.5% 8.2% 7.8%
Dividend per share7 In euros 0.3 Dividends paid7 12.2
Earnings after tax (EAT)
Income taxes adjusted – 10.1 – 18.3 – 2.2 – 22.4 – 3.3 – 1.1
adjusted 23.4 41.1 105.6 19.1 7.6 5.0 EAT margin adjusted 9.0% 8.6% 14.3% 5.1% 5.7% 6.3% Earnings per share (adjusted) In euros 0.55 0.99 2.69 0.44 0.21 0.13
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.
Instone Real Estate Group AG
Grugaplatz 2 – 4 45131 Essen Germany
Email: [email protected] www.instone.de