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Instone Real Estate Group AG
Investor Presentation • Nov 7, 2024
226_ip_2024-11-07_83431a66-6342-4104-acad-36a33ba66a30.pdf
Investor Presentation
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Results Presentation
Q3-2024
Essen, 07/11/2024
Q3-2024 Highlights
Q3 Highlights \& Outlook
Accelerating sales momentum since September 2024
| - Sales: | |
|---|---|
| Operational | - Retail demand with accelerating positive momentum in past weeks, investor sentiment clearly improving |
| Highlights | - Institutional investors overall still cautious - signing of at least one deal in Q4-24 expected |
9M results: leading profitability maintained - On track for full year targets
| - Revenues: $€ 384.5 \mathrm{~m}(-11.3 \% \mathrm{yo} \mathrm{y})$ | |
|---|---|
| 9M-2024 | - Gross profit margin: $24.2 \%$ (9M-2023: $25.5 \%)$ |
| Results | - EAT: $€ 29.0 \mathrm{~m}(-21.8 \% \mathrm{yo} \mathrm{y})$ |
| - Sales: $€ 156.6 \mathrm{~m}(+71.5 \% \mathrm{yo} \mathrm{y})$ |
Outlook for 2024 confirmed - Strong Q4 sales seasonality expected
| - Revenues: $€ 500-600 \mathrm{~m}$ | |
|---|---|
| 2024 | - Gross profit margin: $\sim 22 \%$ |
| - EAT: $€ 30-40 \mathrm{~m}$ | |
| - Sales: $>€ 300 \mathrm{~m}$ |
Sales ratio: Recovery is gaining traction
Quarterly development of retail sales
- Continued sales recovery from previous year's trough levels (private sales up from $€ 39.2 \mathrm{~m}$ to $€ 88.5 \mathrm{~m}$ in 9 M )
- Jump in lead indicators (reservations and notary appointments) promises strong Q4
- Institutional investors overall still cautious but signing of at least one deal in Q4-2024 expected
- Sales ratio 1.7\% (43 CW): 7 avg. weekly number of units sold / 410.5 avg. number of units on offer - in line with long term mean
New builds prices have bottomed out; only moderate CPI growth
House price inflation ${ }^{1}$
In $\%$
Construction price inflation²
- Q3 figures confirm that new build prices have passed the bottom of the cycle
- Relatively moderate price correction in new builds implies significant outperformance vs. existing stock
- Overall construction price inflation stabilising at a moderate level
- CPI for larger projects is even lower - costs largely stable for INS
Continued dynamic rent growth remains key value driver
New-build rent development - strong momentum persists ${ }^{1}$
66 New build rents continue to rise faster than existing rents...In a year-on-year comparison, average asking rents in Germany increased by 7
| per cent | |||
|---|---|---|---|
| Source: immoscout Wohnbarometer | |||
| (c) Instone Group | 1 Bulwiengesa: newly built apartments, top-7 cities average Monthly net cold rent / net disposable income Total mortgage payments per months (inc. 2\% redemption) / net disposable income |
Buying becoming cheaper than renting again - affordability improving
| € | 2022 | 2024 |
|---|---|---|
| Price/sqm (€) | 6,000 | 5,400 |
| Apartment value (85 sqm) (€) | 510,000 | 459,000 |
| Total purchase price (€) | 550,800 | 495,720 |
| Rent/sqm (€) | $\Delta$ | |
| Rental yield (\%) | $3.1 \%$ | $3.9 \%$ |
| Equity (€) | $\rightarrow$ | |
| Mortgage rate (\%) | $\Delta$ | |
| Debt (LTV 70\%) (€) | $\checkmark$ | |
| Total mortgage payments per months (€) | $\Delta$ | |
| Net disposable income (€) | $\Delta$ | |
| Rent ratio ${ }^{2}(\%)$ | $38 \%$ | $39 \%$ |
| Mortgage ratio ${ }^{2}(\%)$ | $30 \%$ | $35 \%$ |
| $\rightarrow$ | Arrow indicates change 2024 vs. 2022 |
- Decrease in interest rates from peak levels, positive wage growth in a robust labour market and moderate price correction have led to an improvement in affordability in recent months
- Rising property yields exceeding mortgage rates imply that buying has become cheaper than renting again
- Additionally, private buy-to-let investors benefit from attractive tax incentives from Growth Opportunities Act
- Attractive new support schemes for subsidised/affordable housing create attractive investment product for institutional investors
Under construction projects de-risked with $91 \%$ sold
Project portfolio as of 30/09/2024 by development (GDV)
- Projects with GDV of c. $€ 2.9$ bn are "under construction" of which $91 \%$ already sold
- Of the c. $€ 2.7$ bn sold volume as of the reporting date, c. $€ 2.23$ bn has been recognised in revenues
- Some $€ 1.65$ bn of land bank with zoning rights obtained (GDV)
- Land value c. $€ 450 \mathrm{~m}+$ outstanding land payment c. $€ 150 \mathrm{~m}$ (c.15\% of pre-sales GDV)
Q3-2024 Financial Performance \& Outlook
Adjusted Results of Operations: Solid profitability maintained
| Cm | Q2-2024 | Q3-2023 | Change | 9M-2024 | 9M-2023 | Change |
|---|---|---|---|---|---|---|
| Revenues | 129.1 | 153.8 | (16.1\%) | 384.5 | 433.3 | (11.3\%) |
| Project cost | (101.8) | (115.3) | (11.7\%) | (293.7) | (322.6) | (9.6\%) |
| Gross profit | 27.3 | 38.5 | (29.1\%) | 92.9 | 110.7 | (16.1\%) |
| Gross margin | 21.1\% | 25.0\% | 24.2\% | 25.5\% | ||
| Platform cost | (18.9) | (17.9) | 5.6\% | 55.8 | (50.9) | 9.6\% |
| Share of results of JVs | 3.6 | 1.9 | 8.3 | 6.0 | ||
| EBIT | 12.0 | 22.5 | (46.7\%) | 45.4 | 65.8 | (31.0\%) |
| EBIT margin | 9.3\% | 14.6\% | 11.8\% | 15.2\% | ||
| Financial \& other results | 0.0 | (2.6) | (5.7) | (12.6) | ||
| EBT | 11.9 | 19.9 | (40.2\%) | 39.7 | 53.2 | (25.4\%) |
| EBT margin | 9.2\% | 12.9\% | 10.3\% | 12.3\% | ||
| Taxes | (3.3) | (6.7) | (10.6) | (16.1) | ||
| Tax rate | 28.1\% | 33.5\% | 26.8\% | 30.2\% | ||
| EAT | 8.5 | 13.2 | (35.6\%) | 29.0 | 37.1 | (21.8\%) |
| EAT margin | 6.6\% | 8.6\% | 7.5\% | 8.6\% | ||
| EAT post minorities | 8.2 | 13.3 | (37.8\%) | 28.7 | 37.5 | (23.5\%) |
| EPS ${ }^{1}$ | 0.19 | 0.31 | (37.7\%) | 0.66 | 0.86 | (23.4\%) |
(1) Lower construction output, in line with expectations - bulk of revenues is derived from pre-sold units
(2) Gross margin level (well within the budget) reflects quality of projects and cost control with inhouse construction management
(3) Platform costs: slight increase mainly attributable to exceptionally higher provisions; underlying staff costs decreased by $-7.6 \%$ as result of implemented cost saving measures
(4) JV result reflects positive contribution of Berlin JV
(5) Improved financial result mainly due to a reduction in net debt and some higher capitalised project-related interest costs
(6) Lower tax rate of c. $27 \%$ in FY-2024 expected mainly due to higher expected share of earnings from JV
Very strong balance sheet
| $\mathrm{Km} \quad 30 / 09 / 2024$ | $31 / 12 / 2023$ | ||
|---|---|---|---|
| Corporate debt | 136.3 | ||
| Project debt ${ }^{1}$ | 241.6 | ||
| Financial debt ${ }^{1}$ | 377.9 | 454.5 | |
| Cash and cash equivalents and term deposits ${ }^{1}$ | (269.9) | ||
| Net financial debt ${ }^{1}$ | 108.0 | 186.8 | |
| Inventories and contract asset / liabilities | 1,224.1 | ||
| $\mathrm{LTC}^{1,2}$ | 8.8\% | $15.1 \%$ | |
| Adjusted EBIT (LTM) ${ }^{3}$ | 65.7 | ||
| Adjusted EBITDA (LTM) ${ }^{3}$ | 70.8 | ||
| Net financial debt ${ }^{1} /$ adjusted EBITDA | $1.5 x$ | $2.1 x$ | - LTC dropped to a very low level of $8.8 \%$... - ... and very solid net debt/adjusted EBITDA of $1.5 x$ at the trough of the cycle - Balance sheet offers ample headroom for growth investments |
Financially very strong position
| Cash Flow (€m) | Q3-2024 | Q3-2023 | 9M-2024 | 9M-2023 |
|---|---|---|---|---|
| EBITDA adj. | 13.1 | 23.7 | 49.2 | 69.5 |
| Other non-cash items | (1.8) | 3.1 | (5.5) | (3.7) |
| Taxes paid | (4.7) | (23.7) | (12.4) | (27.0) |
| Change in working capital | 101.1 | 56.0 | 95.7 | (20.1) |
| Operating cash flow | 107.8 | 59.1 | 127.1 | 18.7 |
| Land plot acquisition payments (incl. RETT) | 1.6 | 0.5 | 3.4 | 10.2 |
| Operating cash flow excl. investments | 109.4 | 59.6 | 130.5 | 28.9 |
- Very strong cash generation from high share of pre-sold projects and highly predictable milestone payments
- Significant positive operating cash flow expected for FY-2024
| Liquidity (€m) | Total | t/o drawn | t/o available |
|---|---|---|---|
| Corporate debt | |||
| Promissory notes | 135.0 | 135.0 | - |
| Revolving Credit Facilities | 161.6 | - | 161.6 |
| Cash and cash equivalents and term deposits ${ }^{2}$ | 269.9 | ||
| Total corporate funds available | 431.5 | ||
| Project debt ${ }^{2}$ | |||
| Project finance ${ }^{2,3}$ | 396.0 | 230.5 | 165.5 |
- Significant cash position provides substantial financial flexibility giving INS a major competitive advantage
- Clear intention to seize growth opportunities in the land market from a position of strength
Financing: Well balanced maturity profile
Maturity profile (corporate debt) as of 30/09/2024
Secured/unsecured as of 30/09/2024
Project debt, secured
Corporate debt
- Successful smoothing of maturity profile through partial extension of the $€ 100 \mathrm{~m}$ promissory note in $\mathrm{Hl}-€ 35 \mathrm{~m}$ extended to $2026 \& 2028^{1}$
- Majority of financial debt is project related
- Significant net cash position on corporate level
Outlook: Fully on track for FY-2024 targets
$\mathcal{E m}$
Revenues (adjusted)
500-600
Gross profit margin (adjusted)
$\sim 22 \%$
EAT (adjusted)
$30-40$
Volume of concluded sales contracts
300
Appendix
Project portfolio key figures
| $\mathbb{C m}$ | Q3-2024 | Q2-2024 | Q1-2024 | Q4-2023 | Q3-2023 | Q2-2023 | Q1-2023 | Q4-2022 | Q3-2022 |
|---|---|---|---|---|---|---|---|---|---|
| Volume of sales contracts | 34.7 | 34.0 | 88.0 | 120.1 | 20.2 | 18.4 | 52.7 | 42.0 | 104.6 |
| Project portfolio | 7,111.0 | 7,124.9 | 6,885.8 | 6,972.0 | 7,015.5 | 7,182.6 | 7,600.4 | 7,668.8 | 7,827.4 |
| thereof already sold | 2,675.8 | 2,784.8 | 2,781.1 | 2,693.4 | 2,822.7 | 2,868.8 | 2,958.7 | 2,987.3 | 2,945.4 |
| thereof already realized revenues | 2,231.6 | 2,246.3 | 2,140.7 | 2,022.5 | 2,089.4 | 2,002.2 | 1,944.7 | 1,902.7 | 1,721.0 |
| Units | Q3-2024 | Q2-2024 | Q1-2024 | Q4-2023 | Q3-2023 | Q2-2023 | Q1-2023 | Q4-2022 | Q3-2022 |
|---|---|---|---|---|---|---|---|---|---|
| Volume of sales contracts | 55 | 68 | 213 | 195 | 37 | 28 | 110 | 44 | 199 |
| Project portfolio | 14,650 | 14,760 | 14,252 | 14,252 | 14,269 | 15,148 | 16,107 | 16,209 | 16,580 |
| thereof already sold | 6,074 | 6,448 | 6,430 | 6,217 | 6,588 | 7,017 | 7,198 | 7,309 | 7,265 |
(Unless otherwise stated, the figures are quarterly values)
Diversified project portfolio across most attractive German regions
Project portfolio as of 30/09/2024 by region (GDV)
- 45 projects / 14,650 units / 1,304m sqm of saleable space
- $96 \%$ in metropolitan regions
- 78 average sqm / unit
- €5,731 ASP / sqm
- Additional four JV projects (INS share of GDV: €635m)
Significant pipeline; well prepared to seize market opportunities
Project portfolio development (GDV)
Growth Opportunities Act with attractive tax incentives for newbuild properties (scenario analysis)
| Model assumptions | |
|---|---|
| Price / sqm | $€ 5,700$ |
| Lettable space | 85 sqm |
| Purchase price | $€ 484,500$ |
| Ancillary costs | $€ 38,760$ |
| Land (18\% of total purchase price) | $€ 94,187$ |
| Building costs | $€ 429,073$ |
| Building costs per sqm | $€ 5,048$ |
| Rental yield | $4 \%$ |
| Rental growth p.a. | $2.5 \%$ |
| Equity ratio (20\%) | $135,660 €$ |
| Debt interest rate | $3.5 \%$ |
| Income tax | $44 \%$ |
- Tax incentives allow for fast payback of capital and highly attractive inflation protected post tax returns for buy-to-let investors
- Tax free disposal gains after 10 years
| Payback of capital from tax incentives | ||
|---|---|---|
| 4 years | 10 years | |
| Total depreciation | $€ 142,658$ | $€ 218,532$ |
| Depreciation as \% of total purchase price | $27.3 \%$ | $41.8 \%$ |
| Tax incentive | $€ 63,212$ | $€ 96,831$ |
| Tax incentive as \% of total purchase price | $12.1 \%$ | $18.5 \%$ |
| Tax incentive as \% of equity | $46.6 \%$ | $71 \%$ |
| Attractive post tax returns | ||
|---|---|---|
| Average RoE (cash returns) | $14.5 \%$ | $10.7 \%$ |
| Tax free disposal gains after 10 years |
- Growth Opportunities Act:
- 5\% degressive on new build properties
- plus additional 5\% linear depreciation over 4 years (according to § 7) if tax relevant building costs are $<5,200 € /$ sqm and energy standard of QNG 40 certification is met
Project portfolio as of 30/09/2024
(Projects > €30m sales volume, representing total: $€ 7.1 \mathrm{bn}$ )
| Project | Location | Sales volume (expected) |
Lettable space (sqm) |
Land plot acquired |
Planning right obtained |
Sales start | Construction started |
|---|---|---|---|---|---|---|---|
| Hamburg | |||||||
| Kösliner Weg | Norderstedt | €94m | 24,642 | (1) | (2) | 2025 | |
| Sportplatz Bult | Hanover | €117m | 24,007 | 2029 | |||
| RBO | Hamburg | €220m | 29,876 | (3) | (4) | (5) | (6) |
| Büntekamp | Hanover | €169m | 25,044 | (7) | (1) | 2026 | |
| Berlin | |||||||
| Nauen | Nauen | €163m | 28,686 | (8) | (9) | 2026 | |
| Fontane Gärten | Potsdam | €66m | 9,563 | (10) | (11) | (12) | (13) |
| NRW | |||||||
| Unterbach | Düsseldorf | €200m | 38,537 | (14) | (15) | (16) | (17) |
| Literaturquartier | Essen | N/A | 17,981 | (18) | (19) | (20) | (21) |
| REME | Mönchengladbach | €128m | 28,315 | (22) | 2026 | ||
| west.side | Bonn | €204m | 63,739 | (23) | (24) | (25) | (26) |
| Gartenstadtquartier | Dortmund | €95m | 25,514 | (27) | (28) | 2025 | |
| Bickendorf | Cologne | €642m | 145,491 | (29) | 2028 | ||
| 6-Seen Wedau | Duisburg | €81m | 16,589 | (30) | (31) | 2024 | |
| Kempen | Kempen | €50m | 11,103 | (32) | (33) | 2025 | |
| Grafental | NRW | €187m | 29,693 | (34) | (35) | 2025 |
Project portfolio as of 30/09/2024
(Projects > €30m sales volume, representing total: $€ 7.1 \mathrm{bn}$ )
| Project | Location | Sales volume (expected) |
Lettable space (sqm) |
Land plot acquired |
Planning right obtained |
Sales start | Construction started |
|---|---|---|---|---|---|---|---|
| Rhine-Main | |||||||
| Delkenheim | Wiesbaden | €113m | 51,304 | (1) | (2) | (3) | (4) |
| Schönhof-Viertel | Frankfurt | €618m | 91,055 | (4) | (5) | (6) | (7) |
| Friedberger Landstr. | Frankfurt | €308m | 38,241 | (8) | 2027 | ||
| Elisabethenareal | Frankfurt | €85m | 9,989 | (9) | (10) | 2026 | |
| Steinbacher Hohl | Frankfurt | N/A | 13,746 | (11) | (12) | (13) | (14) |
| Westville | Frankfurt | N/A | 101,224 | (15) | (16) | (17) | (18) |
| Heusenstamm | Heusenstamm | €196m | 33,430 | (19) | 2026 | ||
| Kesselstädter | Mainta | €232m | 38,315 | (20) | 2026 | ||
| Polaris | Hofheim | €67m | 10,251 | (21) | (22) | 2025 | |
| Rheinblick | Wiesbaden | €315m | 51,751 | (23) | 2026 | ||
| Eichenheege | Mainta | €118m | 18,055 | (24) | 2027 | ||
| Lahnstraße | Frankfurt | €76m | 10,205 | (25) | (26) | 2025 | |
| Leipzig | |||||||
| Parkresidenz | Leipzig | €288m | 66,264 | (27) | (28) | (9) | (10) |
| Rosa-Luxemburg | Leipzig | €171m | 26,657 | (29) | (30) | 2025 | |
| Heide Süd | Halle | €59m | 10,521 | (31) | (32) | 2026 | |
| Semmelweiss | Leipzig | €73m | 24,096 | (33) | (34) | 2025 |
Project portfolio as of 30/09/2024
(Projects > €30m sales volume, representing total: $€ 7.1 \mathrm{bn}$ )
| Project | Location | Sales volume (expected) |
Lettable space (sqm) |
Land plot acquired |
Planning right obtained |
Sales start | Construction started |
|---|---|---|---|---|---|---|---|
| Baden-Württemberg | |||||||
| Rottenburg | Rottenburg | $€ 171 \mathrm{~m}$ | 33,785 | ||||
| Herrenberg III, Schäferlinde | Herrenberg | $€ 78 \mathrm{~m}$ | 14,238 | 2026 | |||
| Herrenberg II, Zeppelinstraße | Herrenberg | $€ 80 \mathrm{~m}$ | 14,886 | 2025 | |||
| Bavaria South | |||||||
| Ottobrunner | Munich | $€ 109 \mathrm{~m}$ | 10,869 | 2026 | |||
| Bavaria North | |||||||
| Eslairner Straße | Nuremberg | N/A | 12,570 | ||||
| Lagarde | Bamberg | $€ 90 \mathrm{~m}$ | 17,774 | ||||
| Schopenhauer | Nuremberg | $€ 65 \mathrm{~m}$ | 11,206 | ||||
| Seetor | Nuremberg | $€ 112 \mathrm{~m}$ | 16,134 | ||||
| Boxdorf | Nuremberg | $€ 66 \mathrm{~m}$ | 10,099 | ||||
| Thumenberger | Nuremberg | $€ 126 \mathrm{~m}$ | 16,548 | 2025 | |||
| Worzeldorf | Nuremberg | $€ 69 \mathrm{~m}$ | 11,428 | 2026 | |||
| Lichtenreuth | Nuremberg | $€ 87 \mathrm{~m}$ | 11,558 | 2026 |
Favourable regulatory framework leading to attractive cash flow profile
Private customer's payment profile for German residential development projects
German regulatory framework for customer payments compared to other European markets
- De risked: B2C development process per se low-risk via regulatory framework ("MaBV")'
- Certainty: No cancellation possibilities
- Capital-light: Predefined payment schedule limiting equity requirement from Instone
- Very favourable payment schedules vs. other European countries, particularly UK, Ireland and Spain
Significant amount of construction costs covered by customers' regular payments
1 MaBV: Real estate agent and commercial construction industry ordinance ("Makler- und Bauträgerverordnung")
Funding requirements minimized due to high pre-sales levels
Illustrative cumulative financing profile of a typical B2C Instone project
- Debt financing land c.50\% (with zoning c.75\%)
- Debt financing construction up to c.80\%
- Revenue recognition: GDV $x$ sales progress (\%) $x$ construction progress (\%)
Supportive German subsidy schemes
Key positives from new subsidy scheme
The German government increases tax depreciation and invests $>\in$ lbn p.a. to support owner-occupiers (help-to-bug) and new build of rental apartments
| Programme details | - Name: Social housing subsidies Budget: €3.00m in 2012 (€18.5bn total volume until 2027) - 40\% of investment born by the federal states |
- Name: Degressive Depreciation (Growth Opportunities Act) - Volume: 5\% depreciation p.a.; can be combined with 5\% special depreciation ( 57 Est G) if tax relevant selling price excl. land is below $€ 5,200 /$ $\operatorname{sqm}$ (QNG criteria must be met) |
- Name: "Wohneigentum für Familien" homes for families - Volume: $€ 050 \mathrm{~m}$ - Start: 16/10/2023 |
- Name: "Klimafreundlicher Neubau" climate friendly new-build - Volume: $€ 0.76 \mathrm{~bn}(€ 7 \mathrm{~N})^{2}$ - Start: 2023; Renewal: February-2024 |
- Name: "Klimafreundlicher Neubau im Niedrigpreissegment" = climate friendly new-build in the affordable segment - Volume: €2bn - Start: Oct-24 - Dec-25 |
|---|---|---|---|---|---|
| Recipient | - Beneficiary: Housing companies, institutional and private investors - Eligibility: - New construction, extension or conversion of new living space - Modernisation of existing space - Social rental apartments or owneroccupied residential properties |
- Buy-to-let investors - For newly built residential properties |
- Families with at least 1 child < 18 years living in their household - Household income of max. $€ 90,000$ (up from $€ 60,000$ previously) plus $€ 10,000$ per child - Required to own at least $50 \%$ of the building (tax only home in Germany) |
- Resi landlords, other institutional or private investors | - Private investor, corporates or other investors |
| Objective | Support the construction and modernisation of social housing | - Expected to have a positive impact on the return expectations - Increased willingness to pay from private buy-to-let investors (due to full tax deductibility from personal income) - Boost construction of rental apartments |
- Help-to-bug: Build or buy new home/condominium for own use for the first time (for at least 10 years) - Energy efficiency: - At least energy standard KfW40 (plus additional requirements regarding GHG emissions defined in regulation "Qualitätssiegel Nachhaltiges Gebitude") - Higher subsidies possible with the additional certificate for sustainable buildings "QNG" |
- New build of energy efficient buildings - Energy efficiency - At least energy standard KfW40 (plus additional requirements regarding GHG emissions defined in regulation "Qualitätssiegel Nachhaltiges Gebitude") - Higher subsidies possible with additional certificate for sustainable buildings "QNG" - Use of fossil fuels not allowed |
- Increase supply in the affordable rental segment (space efficient and climate friendly) - Energy efficiency: - Energy standard 55 (no fossil fuels) - Emission targets over the life cycle have to be met (including construction) - QNG - Cap for construction costs and floor space |
| Subsidies | - Loan per apartment: $€ 200 \mathrm{k}$ - Amortisation discount: 30-35\% - Interest rate: 0-0.5\% - Required minimum energy standard of 55 |
- Increase of depreciation on newly built residential properties from (currently) $3 \%$ linear to $5 \%$ degressive p.a.; threshold for special depreciation from $€ 4,800$ to $5,200 / \operatorname{sqm}$ | - No direct grant; max. one housing unit - Subsidized mortgages, reduced interest costs ( $0.01 \%-0.8 \%$ ) by federal KfW Bank - $€ 90-270 \mathrm{k}$ loan volume (with QNG certificate) - Will be accepted as equity substitute |
- No direct grant - Subsidized mortgages ( $2.52 \%-3.02 \%$ ) by federal KfW Bank (volumes per unit) - Max. $€ 100,000$ loan volume - Up to $€ 150,000$ with QNG certificate |
- No direct grant - Subsidized loans - $€ 100,000$ per apartment - Different durations (e.g. 1\% for 10 yrs) |
Driving sustainable success: how value creation is linked to sustainability
Major ESG-KPIs achievements
- EU Taxonomy-compliant revenues: c.90\% in FY-2023 (up from 86.7\% in FY-2022)
- Improved share of projects / objects with energy requirements at least NZEB -10\%: 100\% in FY-2023 (up from 97.4\% in FY-2022)
- GHG emissions scope 1 and 2 reduced by $46.1 \%$ from the base year 2020, in line with SBTi
- Implementation of 5 working groups with focus on ESG topics (predominantly reduction Scope 3 emissions) comprising 30 employees
- Social impact scoring model which is applied to each project
- Successfully implementation of the diversity target by increasing female representation on the supervisory board to $>30 \%$
- On track with implementation of CSRD/ESRS reporting
Key objectives
Predominantly EU taxonomy-compliant
100\% of project/object portfolio with energy requirements of NEZB-10\% by 2030
GHG emissions scope 1 and 2 reduction target of $42 \%$ reached. Review of new targets.
Net Zero climate neutrality by 2045
$>50 \%$ of revenues from affordable housing by 2030
Clear pathway to reduce GHG emissions scope 1 to 3
Scope 1 \& 2 emissions: projected vs. achieved
CO2 in $\mathrm{t} m$
20202021202220232024202520262027202820292030
Scope 3 emissions target curve (net zero) based on SBTi4
CO2 $\mathrm{kg} / \mathrm{m}^{2}$
- Scope 1 and 2 emissions reduced by $46.2 \%$ in 2023 vs. base year 2020 (in line with SBTI requirements) through gradual conversion from construction sites to green electricity and replacement of company vehicles with electric vehicles
- For scope 3 emissions ( 99\% of total emissions), an average reduction of energy intensity (GHG scope 3 emissions) by $5.9 \%$ in 2023 compared to the previous year
ESG: Top rating underscores commitment to industry leadership
Instone Real Estate Group SE
Real Estate Development Germany ETR.INS
ESG Risk Rating
$12.0 \quad-1.2$
Updated May 10, 2023
Momentum
Low Risk
| $\frac{\text { NEIN }}{\text { 0-10 }}$ | $\frac{\text { LOW }}{\text { 10-20 }}$ | MED | HIGH | SEVERE |
|---|---|---|---|---|
| 20-30 | 30-40 | 40+ |
ESG Risk Rating Ranking
| UNIVERSE | RANK (100 + lowest risk) |
PERCENTILE (100 + Top Score) |
|---|---|---|
| Global Universe | $592 / 15343$ | 5th |
| Real Estate INDUSTRY |
147/1057 | 15th |
| Real Estate Development SUBINDUSTRY |
6/288 | 3rd |
SUSTAINALYTICS
a Morningstar company
- INS among the top 3\% of the 288 global real estate development companies
- Top 5\% across all sectors
Major ESG-KPls - achievements
| Major KPls | 2023 | 2022 | |
|---|---|---|---|
| E | Taxonomy-compliant revenues (in \%) | 90.0 | 86.7 |
| GHG emissions / scope 1 and 2 abs. | $1,437 \mathrm{t} \mathrm{CO}_{2} \mathrm{e}$ | $2,390 \mathrm{t} \mathrm{CO}_{2} \mathrm{e}$ | |
| GHG emissions in relation to net project space | $1,447 \mathrm{~kg} \mathrm{CO}_{2} \mathrm{e} / \mathrm{sqm}$ | $1,537 \mathrm{~kg} \mathrm{CO}_{2} \mathrm{e} / \mathrm{sqm}$ | |
| Water consumption in relation to revenues | $0.000056 \mathrm{ccm} / €$ | $0.000056 \mathrm{ccm} / €$ | |
| Charging stations for EVs | 1,855 | 1,433 | |
| Brownfield developments (land plot size) | 423,793sqm | $\sim 532,000$ sqm | |
| S | Shares of affordable housing: social / subsidized / nyoo/ privately financed | $16 \% / 1 \% / 6 \% / 78 \%$ | $18 \% / 1 \% / 7 \% / 78 \%$ |
| Share of female employees in management positions (below C-level) | $20 \%$ (1st) / $28 \%$ (2nd) | $20 \%$ (1st) / $28 \%$ (2nd) | |
| Number of daycare places / playgrounds | $1,759 / 118$ | $1,713 / 109$ | |
| Code of Conduct for employees and contractors (UN Charter) | $100 \%$ | $100 \%$ | |
| G | Employee compliance and data protection training | $100 \%$ | $100 \%$ |
| Compliance cases (suspected) | 0 | 0 | |
| Diversity Supervisory Board (female share) | $33 \%$ | $20 \%$ | |
| Client Satisfaction (range 1-5; 1 best) | 1.3 | 1.7 |
Instone share
Basic data
- ISIN:
DE000A2NBX80
- Ticker symbol:
INS - No of shares:
46,988,336 - Market cap:
€398.5m - Average daily trading volume: $€ 0.2 \mathrm{~m}$
- Market segment: Prime Standard, Frankfurt
Financial calendar
| November | 2024 | 14 | Kepler Cheuvreux Pan-European Real Estate Conference, London |
|---|---|---|---|
| January | 2025 | 09 | Barclays European Real Estate Equity \& Credit Conference, London |
| January | 2025 | 23 | Kepler Cheuvreux German Corporate Conference, Frankfurt |
| March | 2025 | 18 | Annual Report 2024 |
| March | 2025 | 21 | BofA EMEA Real Estate CEO Conference 2025, London |
The Instone Management Board
Kruno Crepulja
CEO
- CEO since 2008 (of Instone's predecessor formart)
- Comprehensive experience as an engineer, site manager and project developer
- 17-year career on the management boards of large development companies
- Appointed until 31/12/2025
David Dreyfus
CFO
- CFO since September 1st, 2023
-
28 years of experience in corporate finance and capital markets, including as Director with Lazard and Senior Partner of Lilja \& Co.
- Already advised Instone in preparation and execution of its IPO in 2017 and 2018
- Appointed until 31/12/2027
Andreas Gräf
COO
- COO since 2008 (of Instone's predecessor formart)
- Established the residential development as a standalone business model at HOCHTIEF
- Working in the construction and real estate sector for 30 years
- Appointed until 31/12/2025
Investor Relations Contact
Burkhard Sawazki
Head of IR and Capital Market Communication \& Strategy
T +49 201 45355-137
M +49 1732606034
[email protected]
Tania Hanson
Roadshows \& Investor Events
T +49 201 45355-311
M +49 15253033602
[email protected]
Disclaimer
BY VIEWING THIS PRESENTATION, YOU AGREE TO BE BOUND BY THE FOLLOWING TERMS AND CONDITIONS REGARDING THE INFORMATION DISLLOSED IN THIS PRESENTATION. THIS PRESENTATION HAS BEEN PREPARED BY INSTONE REAL ESTATE GROUP SE (THE "COMPANY", TOGETHER WITH ITS SUBSIDIARIES, "INSTONE").
For the purposes of this notice, "presentation" means this document, its contents or any part of it. This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities of the Company, nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement to enter into any contract or commitment or investment decision whatsoever. This presentation is neither an advertisement nor a prospectus and recipients should not purchase, subscribe for or otherwise acquire any securities of the Company. This presentation is made available on the express understanding that it does not contain all information that may be required to evaluate, and will not be used by the attendees / recipients in connection with, the purchase of, or investment in, any securities of the Company. This presentation is accordingly not intended to form the basis of any investment decision and does not constitute or contain any recommendation by the Company, its shareholders or any other party. The information and opinions contained in this presentation are provided as at the date of this presentation, are subject to change without notice and do not purport to contain all information that may be required to evaluate the Company. The information in this presentation is in draft form and has not been independently verified. Parts of the financial information in this presentation are preliminary and unaudited. Certain financial information (including percentages) in this presentation has been rounded according to established commercial standards. As a result, the aggregate amounts (sum totals or sub totals or differences or if numbers are put in relation) may not correspond in all cases to the aggregated amounts of the underlying (unrounded) figures appearing elsewhere in this presentation. No reliance may or should be placed for any purpose whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. None of the Company, its shareholders, or any other party accepts any responsibility whatsoever for the contents of this presentation, and no representation or warranty, express or implied, is made by any such person in relation to the contents of this presentation. The information in this presentation is of a preliminary and abbreviated nature and may be subject to updating, revision and amendment, and such information may change materially. None of the Company, its shareholders, or any other party undertakes or is under any duty to update this presentation or to correct any inaccuracies in any such information which may become apparent or to provide you with any additional information. Recipients should not construe the contents of this presentation as legal, tax, regulatory, financial or accounting advice and are urged to consult with their own advisers in relation to such matters. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on any projections, targets, ambitions, estimates or forecasts contained in this presentation and nothing in this presentation is or should be relied on as a promise or representation as to the future. This presentation may contains forward looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "anticipates," "expects," "intends," "may," "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this presentation and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our prospects, growth, strategies, the industry in which Instone operates and potential or ongoing acquisitions or sales. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and that the development of our prospects, growth, strategies, the industry in which Instone operates, and the effect of acquisitions or sales on Instone may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the development of Instone's prospects, growth, strategies and the industry in which Instone operates are consistent with the forward-looking statements contained in this presentation, those developments may not be indicative of our results, liquidity or financial position or of results or developments in subsequent periods not covered by this presentation. Nothing that is contained in this presentation constitutes or should be treated as an admission concerning the financial position of the Company and/or Instone.
Thank you
Instone Real Estate Group SE
Grugaplatz 2-4, 45131 Essen
E-Mail: [email protected]
Internet: instone-group.de/en