Instone Real Estate Group AG

Interim / Quarterly Report • Nov 7, 2024

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Instone

Group

Instone Real Estate Group SE

Quarterly statement Q3 2024

30 September 2024

TABLE OF CONTENTS

4 REPORT ON THE GROUP'S POSITION

5 Results of operations, net assets and financial position
17 Project business at a glance
23 Risk and opportunities report
24 Outlook

25 CONSOLIDATED FINANCIAL STATEMENTS

26 Consolidated income statement
27 Consolidated statement of comprehensive income
28 Consolidated statement of financial position
30 Consolidated statement of cash flows
32 Segment reporting
34 Appendix (methods, addendum)

35 OTHER INFORMATION

36 Disclaimer
37 Quarterly comparison
38 Multi-year overview
40 Contact/Legal notice/Financial calendar

REPORT ON THE GROUP'S POSITION

5 Results of operations, net assets and financial position
17 Project business at a glance
23 Risk and opportunities report
24 Outlook

Results of operations, net assets and financial position

• Results of operations, net assets and financial position

Project business at a glance

Risk and opportunities report

Outlook

Consolidated financial statements

Other information

Results of operations, net assets and financial position

Cumulative financial key performance indicators				TABL 802
In millions of euros
		9M 2024	9M 2023	Change in \%
Revenues adjusted ${ }^{1}$		384.5	433.3	$-11.3$
Gross profit adjusted		92.9	110.7	$-16.1$
Gross profit margin adjusted ${ }^{1}$	In \%	24.2	25.5
EBIT adjusted		45.4	65.8	$-31.0$
EBT adjusted		39.7	53.2	$-25.4$
EAT adjusted ${ }^{1}$		29.0	37.1	$-21.8$
${ }^{1}$ Financial performance indicators.

Results of operations

To present the results of operations, some items in the income statement are combined into the following items:
$\rightarrow$ Cost of materials and changes in inventories form project costs.
$\rightarrow$ The gross profit item is the balance of revenue and project costs.
$\rightarrow$ Other operating income, staff costs, other operating expenses, and depreciation and amortisation are summarised under platform costs.
$\rightarrow$ The consolidated earnings from operating activities and share of results of joint ventures form earnings before interest and tax (EBIT).

The results of operations show all income as positive and all expenses as negative.

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 results of operations 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 therefore 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, non recurring expenses relating to the valuation of inventories, costs for company 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, writeups on non-current assets, refunds of taxes from previous years based on audits, reversals of provisions for extraordinary events and merger gains.

Key indicators
- Report on the Group's position			TABLE 003
- Results of operations, net assets and financial position
Project business at a glance
	Risk and opportunities report	In \%	24.2	25.5
Outlook
Consolidated financial statements
Other information			45.4	65.8
	Other information	In \%	11.8	15.2
			39.7	53.2
	EBT margin adjusted	In \%	10.3	12.3
	Income taxes adjusted		$-10.6$	$-16.1$
	Earnings after tax (EAT) adjusted		29.0	37.1
			7.5	8.6

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 results of operations.

The calculation of the individual adjusted items is based on the following items in the income statement and the above-mentioned consolidated items:
$\rightarrow$ Adjusted revenue is revenue adjusted for the effects from purchase price allocations, also taking into account effects from share deals.
$\rightarrow$ The adjusted project costs include the project costs adjusted for the effects from purchase price allocations, the effects from share deals, other operating income after subtracting the cost of materials (income opposed by a directly attributable item in cost of materials), indirect selling expenses and capitalised interest. They thus reflect the external costs allocated to the project developments.
$\rightarrow$ Adjusted gross profit is the result of adjusted revenue less adjusted project costs.
$\rightarrow$ 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.
$\rightarrow$ The adjusted share of results of joint ventures are the pro rata earnings contributions from associated company and joint venture companies which are included in the consolidated financial statements using the equity method.
$\rightarrow$ 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.
$\rightarrow$ The adjusted results from investments and financial result comprise the total of other results 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

		9M 2024	9M 2023	Change in \%
Revenues adjusted		384.5	433.3	$-11.3$
Project costs adjusted		$-291.6$	$-322.6$	$-9.6$
Gross profit adjusted		92.9	110.7	$-16.1$
Gross profit margin adjusted	In \%	24.2	25.5
Platform costs adjusted		$-55.8$	$-50.9$	9.6
Share of results of joint ventures adjusted		8.3	6.0	38.3
Earnings before interest and tax (EBIT) adjusted
		45.4	65.8	$-31.0$
EBIT margin adjusted	In \%	11.8	15.2
Financial result adjusted		$-5.7$	$-12.6$	$-54.8$
Earnings before tax (EBT) adjusted		39.7	53.2	$-25.4$
EBT margin adjusted	In \%	10.3	12.3
Income taxes adjusted		$-10.6$	$-16.1$	$-34.2$
Earnings after tax (EAT) adjusted		29.0	37.1	$-21.8$
EAT margin adjusted	In \%	7.5	8.6

$\rightarrow$ Adjusted earnings before tax is based on adjusted earnings before interest and tax less the adjusted results from investments and financial result.
$\rightarrow$ Adjusted income taxes correspond to income taxes adjusted for the tax effects of purchase price allocations, share deals and non recurring effects.
$\rightarrow$ Adjusted earnings after tax are the adjusted earnings before tax less the adjusted income taxes.

Key indicators

• Report on the Group's position
• Results of operations, net assets and financial position

Project business at
a glance

Risk and opportunities report

Outlook

Consolidated financial statements

Other information

Revenue

Adjusted revenue in the first three quarters of 2024 amounted to $€ 384.5$ million (previous-year period: $€ 433.3$ million), around $-11.3 \%$ below the previous year's figure. The decline in sales is mainly due to a reduction in construction services compared to the previous-year period.

The adjustment of effects from purchase price allocations reduced the adjusted revenue by $€-0.5$ million (previous-year period: $€ 2.5$ million). The separate valuation of share deals ("Westville" project) increased the adjusted revenue by $€ 69.3$ million (previous-year period: $€ 54.8$ million).

Revenue				TABLE 004
In millions of euros
	9M 2024	9M 2023	Change in \%
Revenue	315.8	376.0	-16.0
+ effects from purchase price allocations	$-0.5$	2.5	n/a
+ effects from share deal agreements	69.3	54.8	26.5
Revenues adjusted	384.5	433.3	$-11.3$

The adjusted revenue of the Instone Group was almost exclusively generated in Germany and broken down across the regions as follows:

Sales (adjusted) by region 9M 2024
In millions of euros
10.4
Munich ${ }^{2}$
17.3
Stuttgart ${ }^{3}$
23.7
Leipzig
31.4
Hamburg	Adjusted total revenue
	$€ 384.5$ million
39.8
Nuremberg
	North Rhine-Westphalia

[^0]
[^0]: ${ }^{1}$ Includes Frankfurt / Main, Wiesbaden, Maintai and Heusenstamm.
${ }^{2}$ Includes Rottenburg and Schorndorf.
${ }^{3}$ Includes Augsburg and Rosenheim.
${ }^{4}$ Includes Potsdam.

Key indicators

• Report on the Group's position
• Results of operations, net assets and financial position

Project business at
a glance

Risk and opportunities report

Outlook

Consolidated financial statements

Other information

Project costs
The adjusted project costs, essentially consisting of the cost of materials and the changes in inventories, also fell in the reporting period to €-291.6 million (previous-year period: €-322.6 million). The significantly reduced land purchases and the reduced construction activity compared to the same period of the previous year led to a reduction in the cost of materials to $€-307.8$ million (previous-year period: $€-402.8$ million). The decrease in changes in inventories to $€ 73.0$ million (previous-year period: $€ 132.9$ million) reflects, on the one hand, the lower volume of land purchases compared to the same period of the previous year and, on the other hand, the increased volume of sales contracts in the reporting period.

Indirect sales expenses in the amount of $€-1.3$ million (previous-year period: $€-1.7$ million) and other operating income after subtracting the cost of materials of $€ 14.9$ million (previous-year period: $€ 10.3$ million), of which $€ 13.0$ million from grants, were allocated in the reporting period to adjusted project costs. The adjustment of the capitalised interest in the changes in inventories of $€-10.4$ million (previous-year period: $€-8.9$ million) was added to the adjusted project costs. Effects from the amortisation of purchase price allocations reduced the adjusted project costs by $€ 7.8$ million (previous-year period: $€ 1.9$ million). Due to the separate valuation of share deals, adjusted project costs again increased by $€-67.9$ million (previous-year period: $€-54.3$ million).

Project costs
TABLE 005
In millions of euros

	9M 2024	9M 2023	Change in \%
Project costs	-234.8	-270.0	-13.0
+ effects from purchase price allocations	7.8	1.9	310.5
+ effects from reclassifications	3.2	$-0.3$	n/a
+ effects from share deal agreements	$-67.9$	$-54.3$	25.0
Project costs adjusted	$-291.6$	$-322.6$	$-9.6$

Gross profit

Adjusted gross profit, at $€ 92.9$ million (previous-year period: $€ 110.7$ million), was down on the previous year.

Gross profit
in millions of euros
	9M 2024	9M 2023	Change in \%
Gross profit	81.0	106.0	-23.6
+ effects from purchase price allocations	7.2	4.5	60.0
+ effects from reclassifications	3.2	-0.3	n/a
+ effects from share deal agreements	1.4	0.5	180.0
Gross profit adjusted	$\mathbf{9 2 . 9}$	$\mathbf{1 1 0 . 7}$	-16.1

The adjusted gross profit margin - calculated from the adjusted gross profit relating to the adjusted revenue - amounted to $24.2 \%$ in the reporting period (previous-year period: $25.5 \%$ ).

Key indicators
- Report on the Group's position	Platform costs
- Results of operations, net assets and financial position	Adjusted platform costs deteriorated to $€-55.8$ million compared to the previous-year period (previous-year period: $€-50.9$ million). This is essentially the result of an increase in costs for warranties in the amount of $€ 2.5$ million and of increased staff costs related to the valuation of the provision for the share-based remuneration in the amount of $€ 2.4$ million as a result of the increased average share price applicable for the valuation. In the reporting period, indirect sales costs of $€ 1.3$ million and other operating income after subtracting the cost of materials in the amount of $€ 14.9$ million were reclassified as project costs and other non recurring effects were adjusted in the amount of $€ 0.5$ million.
Risk and opportunities report	Platform costs		TABLE 007
	In millions of euros
Outlook		9M 2024	9M 2023
Consolidated financial statements	-42.7	$-45.4$	$-5.9$
Other information	0.5	3.1	$-83.9$

At $€-37.8$ million, reported staff costs were slightly lower than the previous year's level (previous-year period: $€-38.1$ million), creating a year-on-year decrease of around - $1 \%$. Ongoing staff costs decreased by $7.6 \%$ compared to the same period of the previous year due to the structural reorganisation measures introduced. This development was mainly compensated for by the increased provision in connection with share-based remuneration due to the higher average share price applicable for the valuation.

The reported other operating income, at $€ 20.7$ million (previous-year period: $€ 20.4$ million), was almost at previous-year's level. This included other operating income after subtracting the cost of materials of $€ 14.9$ million (previous-year period: $€ 10.3$ million), which were reclassified as project costs. Included in this in particular is income from the realisation of grants of $€ 13.0$ million (previous-year period: $€ 9.3$ million). In addition,
income was realised from the reversal of provisions and project-related liabilities released and other liabilities in the amount of $€ 3.7$ million (previous-year period: $€ 3.0$ million). In the previous-year period, one-off income in the amount of $€ 2.8$ million was reported from the deconsolidation of a subsidiary.

The reported other operating expenses decreased to $€-21.8$ million in the reporting period (previous-year period: $€-23.9$ million). Other operating expenses mainly include costs for warranties, consulting expenses, sales costs and IT costs, as well as court costs, attorneys' and notaries' fees.

The reported depreciation and amortisation was $€-3.9$ million (previousyear period: $€-3.7$ million), a slight increase compared with the previous year.

Share of results of joint ventures

The adjusted share of results of joint ventures of $€ 8.3$ million (previous-year period: $€ 6.0$ million), which matches the reported earnings, was mainly attributable during the financial year to construction activities and the sale of the Berlin joint venture Friedenauer Höhe, and reflects the expected development of this project.

Key indicators

• Report on the Group's position
• Results of operations, net assets and financial position

Project business at
a glance

Risk and opportunities report

Outlook

Consolidated financial statements

Other information

Earnings before interest and tax (EBIT)

At $€ 45.4$ million, adjusted earnings before interest and tax fell according to plan compared to the previous year (previous-year period: $€ 65.8$ million).

EBIT

In millions of euros

EBIT

• effects from purchase price allocations

• effects from reclassifications

• non recurring effects
• effects from share deal agreements

EBIT adjusted

EBIT margin adjusted

9M 2024	9M 2023	Change in \%
46.6	66.6	$-30.0$
7.2	4.5	60.0
-10.4	$-8.9$	$>100.0$
0.5	3.1	$-83.9$
1.4	0.5	180.0
45.4	65.8	$-31.0$
11.8	15.2

Investment and financial result
As in the same period of the previous year, there was no materially adjusted income from investments in the reporting period.

The reported financial result improved significantly to $€-16.0$ million in the reporting period (previous-year period: $€-21.5$ million). This improvement is primarily due to the increase in finance income associated with the interest on bank balances.

The adjusted financial result likewise improved significantly to $€-5.7$ million (previous-year period: $€-12.6$ million) in the reporting period. Capitalised interest from project financing before the start of sales in the amount of $€ 10.4$ million (previous-year period: $€ 8.9$ million) was reclassified as project costs.

Earnings before tax (EBT)

Adjusted earnings before tax fell to $€ 39.7$ million compared to the same period of the previous year (previous-year period: $€ 53.2$ million).

EBT

In millions of euros

EBT

• effects from purchase price
  allocations
• non recurring effects
• effects from share deal
  agreements
  EBT adjusted
  EBT margin adjusted

9M 2024	9M 2023	Change in \%
30.5	45.1	$-32.4$
7.2	4.5	60.0
0.5	3.1	$-83.9$
1.4	0.5	180.0
39.7	53.2	$-25.4$
10.3	12.3

Income taxes

The tax rate in the adjusted results of operations in the reporting period was $26.8 \%$ (previous-year period: $30.2 \%$ ). The decline in the tax rate is the result of our assessment of the planned tax rate for the 2024 financial year as of the reporting date. Due to an expected high earnings contribution from projects that will be realised in joint ventures as well as projects sold in the form of a share deal, compared to the previous year we expect a lower group tax rate in the 2024 financial year, as these results are only subject to corporation tax.

As a result of the effect mentioned above and taking into account the effects of audits for previous years, income taxes on the reported earnings amounted in total to $€ 6.6$ million (previous-year period: $€ 15.9$ million).

Key indicators

• Report on the Group's position
• Results of operations, net assets and financial position

Project business at
a glance

Risk and opportunities report

Outlook

Consolidated financial statements

Other information

Earnings after tax (EAT)

As a result of the effects mentioned above, the adjusted earnings after tax of the Instone Group totalled $€ 29.0$ million in the reporting period (previousyear period: $€ 37.1$ million). Before adjustment for effects from purchase price allocations, effects from share deals and non recurring effects, reported earnings after tax were $€ 23.9$ million (previous-year period: $€ 29.2$ million).

				TABLE 000
	9M 2024	9M 2023	Change in \%
EAT	23.9	29.2	$-18.2$
+ effects from purchase price allocations	4.6	3.0	53.3
+ non recurring effects	$-0.9$	4.4	n/a
+ effects from share deal agreements	1.4	0.5	180.0
EAT adjusted	29.0	37.1	$-21.8$
EAT margin adjusted	In \%	7.5	8.6

Earnings after tax and after minority interests

The non-controlling interests in reported and adjusted earnings after tax amounted to $€ 0.4$ million (previous-year period: $€-0.3$ million).

Earnings after tax and after minority interests				TABLE 000
In millions of euros
	9M 2024	9M 2023	Change in \%
EAT after minority interests	23.6	29.5	$-20.0$
+ effects from purchase price allocations	4.6	3.0	53.3
+ non recurring effects	$-0.9$	4.4	n/a
+ effects from share deal agreements	1.4	0.5	180.0
EAT adjusted after minority interests	28.7	37.5	$-23.5$
Earnings per share
Adjusted earnings per share in the first quarter of 2024 were $€ 0.66$ (previous-year period: $€ 0.86$ ), also below the previous year's level as expected.
Earnings per share				TABLE 012
In millions of euros
		9M 2024	9M 2023	Change in \%
Shares $^{1}$	In thousands units	43,322.6	43,358.7	$-0.1$
Owners of the Company		23.6	29.5	$-20.0$
Earnings per share	In euros	0.54	0.68	$-20.6$
Owners of the Company adjusted		28.7	37.5	$-23.5$
Earnings per share adjusted	In euros	0.66	0.86	$-23.3$

${ }^{1}$ Average weighted number of shares as at 30/09/2024 and 30/09/2023.

Key indicators
- Report on the Group's position
- Results of operations, net assets and financial position	30/09/2024	$31 / 12 / 2023$	Change in \%
Project business at a glance	88.2	81.4	8.4
Risk and opportunities report	1,158.9	1,085.8	6.7
Outlook	83.7	177.1	$-52.7$
Consolidated financial statements	105.8	111.7	$-5.3$
Other information	429.9	383.6	12.1
	1,866.5	1,839.6	1.5
	586.1	576.0	1.8
	136.3	176.8	$-22.9$
	353.4	355.8	$-0.7$
	790.7	731.0	8.2
Equity and liabilities	1,866.5	1,839.6	1.5
Items have been adjusted: Term deposits have been allocated to cash and cash equivalents due to short- to medium-term availability, and financial liabilities allocated on the basis of their use in corporate finance or project financing.

As at 30 September 2024, the Instone Group's total assets rose to $€ 1,866.5$ million (31 December 2023: $€ 1,839.6$ million). This is due in particular to an increase in inventories and cash and cash equivalents.

As at 30 September 2024, inventories rose to $€ 1,158.9$ million (31 December 2023: $€ 1,085.8$ million). This increase in inventories is mainly due to the construction progress of the unsold projects that are currently being realised.

As at 30 September 2024, acquisition costs and incidental acquisition costs for land amounting to $€ 678.5$ million (31 December 2023: $€ 694.3$ million) were included in inventories.

Receivables from customers for work-in-progress (gross contract assets) already sold and valued at the current completion level of development fell to $€ 286.3$ million as at 30 September 2024 (31 December 2023: $€ 603.2$ million), as expected due to transfers in the reporting period. Payments received from customers amounted to $€-207.2$ million as at 30 September 2024 (31 December 2023: €-430.1 million).

Contract assets
In millions of euros
Contract assets (gross)	286.3	603.2	$-52.5$
Payments received	$-207.2$	$-430.1$	$-51.8$
	79.1	173.1	$-54.3$
Capitalised costs to obtain a contract	4.6	4.0	15.0
Contract assets (net)	83.7	177.1	$-52.7$

Trade receivables in the reporting period increased to $€ 7.9$ million (31 December 2023: $€ 6.5$ million). The receivables essentially include withholdings in connection with the transfer of projects.

The shares accounted for using the equity method, which mainly include investments in project companies, rose in the reporting period from $€ 51.7$ million to $€ 60.6$ million due mainly to the sale and construction progress of project developments in joint ventures.

The non-current financial receivables amounting to $€ 11.2$ million (31 December 2023: $€ 10.3$ million) include loans to joint ventures.

Key indicators	The current financial receivables amounting to $€ 24.0$ million (31 December 2023: €23.3 million) mainly relate to a loan to a joint venture.
- Report on the Group's position	Other current receivables and other assets decreased from €74.6 million to €65.6 million. These items consist largely of approved public grants of $€ 48.9$ million (31 December 2023: €51.6 million) for the construction of buildings, including subsidy of the KfW efficiency programme. Prepayments on land for which the transfer of benefits and encumbrances takes place after the balance sheet date remained unchanged at €14.1 million in the reporting period due to a lack of new investment (31 December 2023: $€ 14.1$ million).
- Results of operations, net assets and financial position	Cash and cash equivalents and term deposits increased in the reporting period to $€ 429.9$ million (31 December 2023: €383.6 million). This includes cash and cash equivalents from subsidised loans taken out for customers in the amount of $€ 160.0$ million (31 December 2023: $€ 115.9$ million). For more information, please refer to the Group's consolidated statement of cash flows, $\operatorname{£}$ page 30 .
- Project business at a glance	Non-current financial liabilities were reduced to $€ 361.0$ million as at 30 September 2024 (31 December 2023: €396.6 million). Current financial liabilities also fell during the same period, to $€ 128.7$ million (31 December 2023: €136.1 million). The decline in financial liabilities is due to scheduled repayments of corporate finance and project financing in the reporting period.
Consolidated financial statements	The other non-current liabilities amounting to $€ 48.2$ million (31 December 2023: $€ 37.8$ million) are completely related to interest and repayment subsidy in connection with subsidised loans.

Trade payables fell in the reporting period to $€ 130.5$ million (31 December 2023: €142.2 million) and mainly included the services provided by contractors. The fall corresponds to the decrease in output in the reporting period and is also related to the reporting date.

Other current liabilities of $€ 500.7$ million (31 December 2023: $€ 431.9$ million) include mainly payments received for the "Westville" project in the amount of $€ 471.6$ million (31 December 2023: $€ 383.5$ million). The fall in liabilities from government grants in the amount of $€ 17.5$ million (31 December 2023: $€ 32.4$ million) largely corresponds to the construction of the corresponding projects.

The equity ratio as at 30 September 2024 was 31.4\% (31 December 2023: $31.3 \%)$.

As at 30 September 2024, the Company held an unchanged number of 3,665,761 treasury shares. This corresponds to a proportion of $7.8 \%$ of the shares. As at 30 September 2024, the number of shares adjusted for the Company's treasury shares was 43,322,575 shares.

The leverage (excluding the subsidised loans for the "Westville" project) decreased slightly compared to the previous year's figure. It is at a historically low level. Despite the lower operating result, the substantially decreased net debt has reduced the leverage to 1.5 times the adjusted EBITDA. The ratio of net debt to balance sheet inventories, contract assets and contract liabilities fell to $8.8 \%$ (31 December 2023: 15.1\%).

Key indicators	Net financial debt and debt-to-equity ratio			TABLE 99
- Report on the Group's position	30/09/2024	31/12/2023	Change in \%
- Results of operations, net assets and financial position	249.2	318.4	$-21.7$
Project business at a glance	128.7	136.1	$-5.4$
Risk and opportunities report	377.9	454.5	$-16.9$
Outlook	$-269.9$	$-267.7$	0.8
Consolidated financial statements	108.0	186.8	$-42.2$
Other information
	1,224.1	1,240.8	$-1.3$
In millions of eures
	8.8	15.1
EBIT adjusted (LTM) ${ }^{a}$	65.7	86.1	$-23.7$
Depreciation and amortisation (LTM) ${ }^{a}$	5.1	5.0	2.0
EBITDA adjusted (LTM) ${ }^{a}$	70.8	91.1	$-22.3$
Leverage (NFD/EBITDA adjusted (LTM) ${ }^{a}$	1.5	2.1	0.0
${ }^{a}$ Excluding financial liabilities of €111.8 million (31 December 2023: €78.1 million) from the subsidised loan for the "Westville" project. ${ }^{b}$ Excluding €160.0 million (31 December 2023: €115.9 million) in restricted cash and cash equivalents from the "Westville" subsidised loan. ${ }^{c}$ Loan-to-cost = net financial debt/(inventories + contract assets/liabilities). ${ }^{d}$ LTM = last twelve months.

Financial position

In the first three quarters of 2024, the nominal value of financial liabilities from corporate finance fell to $€ 135.0$ million (31 December 2023: €175.0 million) owing to scheduled repayments; no syndicated loans were drawn as at the balance sheet date, as at 31 December 2023. Utilisation of lines of project financing (excluding the subsidised loans for the "Westville" project) decreased to $€ 230.5$ million (31 December 2023: €278.8 million). The total funding available (excluding the subsidised loans for the "Westville" project) amounting to $€ 692.6$ million (31 December 2023: $€ 758.3$ million) decreased in the reporting period due to the scheduled repayment of project financing. As at 30 September 2024, cash and cash equivalents totalling $€ 396.0$ million (31 December 2023: $€ 423.3$ million) were available from project financing (excluding the subsided loans for the "Westville" project) and in the amount of $€ 296.6$ million (31 December 2023: $€ 335.0$ million) from corporate finance. These corporate finance agreements contain financial ratios that are described in the "Other disclosures" section of the notes to the consolidated financial statements in the annual report for the 2023 financial year, $\mathbb{C}$ page 241.

In the balance sheet as at 30 September 2024, the liabilities from corporate finance amounted to $€ 136.3$ million (31 December 2023: $€ 176.8$ million) and liabilities from project-related financing (including the subsidised loans for the "Westville" project) amounted to $€ 353.4$ million (31 December 2023: $€ 355.8$ million). Recognised total liabilities from financing operations thus decreased to $€ 489.7$ million at the reporting date (31 December 2023: $€ 532.6$ million). The current project financing included in this is composed of option agreements for extension.

[^0]
[^0]: ${ }^{1}$ This includes interest and repayment subsidy of $€ 48.2$ million that is recognised under other non-current liabilities.

Key indicators	Cash flow from operations		TABLE 018
- Report on the Group's position	9M 2024	9M 2023	Change in \%
- Results of operations, net assets and financial position	49.2	69.5	$-29.2$
Project business at a glance	$-5.4$	$-3.7$	46.2
	$-12.4$	$-27.0$	$-54.1$
Risk and opportunities report	95.7	$-20.1$	n/a
Outlook	127.1	18.7	$-579.7$
Consolidated financial statements	3.4	10.2	$-66.6$
Other information	130.5	28.9	350.9

The Instone Group's cash flow from operations of €127.1 million in the first three quarters of 2024 (previous-year period: $€ 18.7$ million) was influenced mainly by payments from buyers for project handovers as well as by payments by purchasers during construction. Purchase price and land transfer tax payments for land amounted to $€ 3.4$ million in the reporting period (previous-year period: $€ 10.2$ million). In addition, income tax payments amounting to $€ 12.4$ million were made in the reporting period (previous-year period: $€ 27.0$ million).

The operating cash flow, adjusted for payments for land in the reporting period, has significantly improved at $€ 130.5$ million (previous-year period: $€ 28.9$ million) compared with the previous-year period.

As at 30 September 2024, financial resources rose to $€ 429.9$ million (previous-year period: $€ 259.8$ million).

Key indicators

• Report on the Group's position

Results of operations, net assets and financial position

• Project business at a glance

Risk and opportunities report

Outlook

Consolidated financial statements

Other information

Project business at a glance

Real estate business key performance indicators

In millions of euros

	9M 2024	9M 2023
Volume of sales contracts ${ }^{1}$	156.6	91.3
Volume of sales contracts	In units	336

	30/09/2024	31/12/2023
Project portfolio (existing projects) ${ }^{2}$	7,111.0	6,972.0
of which already sold	2,675.8	2,693.4
Project portfolio (existing projects)	In units	14,650
of which already sold	In units	6,074

${ }^{1}$ Volume of sales contracts reflects the revenue-relevant (adjusted) volume of contracts of our projects. It
${ }^{2}$ Voting comprises all sales-related transactions, such as notorised real estate purchase agreements,
individual orders from clients and rental income.
Volume of sales contracts is also referred to as sales volume.
${ }^{3}$ The portfolio value as at the reporting date is the anticipated overall volume of revenue from all projects listed in the project portfolio. The Instone Group divides its project portfolio into three different groups depending on the stage of development. For projects with the status "pre-sale", the land has been already purchased, secured or claimed by us in a binding offer, but marketing has not yet begun. Following sales release and the initiation of marketing, projects are transferred to a "pre-construction" status. Projects with a completed start of construction have an "under construction" status until complete handover. Projects are removed from the portfolio the reporting month after all construction obligations have been fulfilled, the project has been sold (except when selling units individually, then once the percentage of units left to be sold is less than $2 \%$ ) and handover is complete.

Unit sales kept pace with the previous quarter, Q2 2024 (€32.0 million), reaching a volume of $€ 31.2$ million in the third quarter. The success of unit sales in the reporting period ( $€ 88.7$ million/170 units) therefore remains significantly above that of the comparable period in the previous year (9M 2023: $€ 39.2$ million/76 units).

In addition, the "4Living" project in Erlangen was successfully sold in the 2024 reporting period. In addition to further increases in revenue from projects already sold, the volume of sales contracts of our institutional projects in the first half of the current financial year amounts to around $€ 68$ million and 166 units.

This means that a total sales volume of $€ 156.6$ million with 336 sales units was achieved in the reporting period. Based on the sales value of the first nine months of 2023 ( $€ 91.3$ million/175 units), this represents an increase of around $72 \%$. This is further confirmation of the assumption made in the 2023 Annual Report regarding the revival of sales activities in 2024.

The full realised volume of sales contracts as at 30 September 2024 was focused on the most important metropolitan regions of Germany.

Key indicators

• Report on the Group's position

Results of operations, net assets and financial position

• Project business at a glance

Risk and opportunities report

Outlook

Consolidated financial statements

Other information

17.5

Hamburg

Includes North Rhine-Westphalia and Berlin
${ }^{2}$ Includes Frankfurt / Main, Wiesbaden, Mainta, Hofheim and Heusenstamm.
${ }^{3}$ Also includes Bamberg and Regensburg.

The following projects mainly contributed to successful marketing in the reporting period:

Real estate business key performance indicators Volume of sales contracts 9M 2024
In millions of euros
Individual sale		Volume	Units
"Urban:Isle Campus"	Hamburg	27.2	54
"Parkresidenz"	Leipzig	19.2	51
"Schönhof-Viertel"	Frankfurt a. M.	12.9	14
"Neckar:Au Viertel"	Rottenburg	8.7	20
"Fontane Gärten"	Potsdam	6.7	11
Other	Other	13.9	20
Investor goods
"4Living"	Nuremberg	67.9	166
Other	Other

The offer for sale of our individual sales projects on the market as at 30 September 2024 includes 413 units with an expected revenue volume of €258 million. The reduction in the sales offer compared to the 2023 endyear value (584 units and $€ 345$ million) is due mainly to the sale of a total of 170 units in the reporting period.

As at 30 September 2024, the Instone Group's project portfolio comprised 45 projects, from which we currently anticipate a total volume of sales contracts of $€ 7,111.0$ million, representing an increase from the figure as at 31 December 2023 ( $€ 6,972.0$ million). The increase in portfolio value in the reporting period is mainly due to the acquisition of two projects in Frankfurt am Main and Dusseldorf (volume: $€ 261.6$ million). The objective of profiting from attractive potential acquisitions in the current environment has therefore already been implemented successfully in terms of an initial step. The portfolio value was increased by changes in revenue amounting to $€ 50.9$ million. The revised plans for the "Semmelweis" project in Leipzig, switching from a property sale to an implementation project, made a particularly large contribution to the change in revenue. The revenue drop associated with the conversion of the "Gallus" project in Frankfurt am Main from a newbuild project to a renovation was for the most part offset by moderate changes in the sales price forecasts for various projects.

Completion of the "Marina Bricks" project in Rosenheim ( $€-30.0$ million) and the "Beethovenpark" ("Augusta and Luca") project in Augsburg ( $€-143.5$ million) had a countereffect.

We have already realised adjusted revenue of $€ 2,231.6$ million from the current project portfolio, of which some $€ 1,080.5$ million has already been handed over.

As at 30 September 2024, the forecast gross profit margin on the project portfolio, excluding the "Westville" project in Frankfurt am Main, is around $23.0 \%$. In addition to the continued modest assessment of the sales price forecasts for projects not yet in distribution, the changed assessment of future construction cost increases in particular has had an impact on the earnings calculation, meaning that the project gross profit margin on the project portfolio has decreased compared to the previous year's final figure (31 December 2023: $24.6 \%$ excluding the "Westville" project).

[^0]
[^0]: ${ }^{1}$ If the large "Westville" project is taken into consideration, the expected project gross profit margin for the project portfolio is about $22.1 \%$.

[^0]The majority - approximately $96 \%$ - of anticipated overall volume of revenue from the project portfolio as at 30 September 2024 is located in the most important metropolitan regions of Germany: Berlin, Dusseldorf, Frankfurt am Main, Hamburg, Cologne/Bonn, Leipzig, Munich, Nuremberg and Stuttgart. Around $4 \%$ is attributable to other attractive, medium-sized cities.

[^0]: ${ }^{1}$ Also includes Potsdam and Neuen.
${ }^{2}$ Also includes Augsburg and Rosenheim.
${ }^{3}$ Also includes Rottenburg and Herrenberg.
${ }^{4}$ Also includes Bamberg.
${ }^{5}$ Includes Frankfurt / Main, Wiesbaden, Maintai, Hofheim and Heusenstamm.

Key indicators	Adjusted revenue
- Report on the Group's position
Results of operations, net assets and financial position		TABL 031
- Project business at a glance		Revenue volume (adjusted)
Risk and opportunities report	"Schönhof-Viertel"	Frankfurt a. M.
Outlook	"Westville"	Frankfurt a. M.
Consolidated financial statements	"Urban.lsle Campus"	Hamburg
Other information	"Parkresident"	Leipzig
	"Literaturquartier"	Essen
	"Steinbacher Hohl"	Frankfurt a. M.
	"Neckar.Au Viertel"	Rottenburg
	"Wiesbaden-Delkenheim"	Wiesbaden
	"4Living"	Nuremberg
	"Lagarde"	Bamberg

The building blocks of success for realising the adjusted revenue were steady marketing progress and a further development process in the structural implementation of our projects. For this reason, in addition to the marketing progress achieved, progress in the projects under construction, in particular, has contributed to the generation of revenue.

In the reporting period, construction work began on sub-projects of both the "Parkresidenz" and "Neckar.Au Viertel" projects and the "4Living" project in Nuremberg with a total of 288 units. A total of 3,673 units are currently in the construction phase at the same time.

The transfers in the reporting period include a volume of around $€ 466$ million and 1,566 successfully transferred units. The "Beethovenpark" ("Augusta and Luca") project in Augsburg with 429 units and sub-projects of the "Schönhof-Viertel" project in Frankfurt am Main with 401 units and the "Urban.lsle Campus" project in Hamburg with 477 successfully transferred residential units accounted for a sizeable portion of this amount.

The completed projects of Instone Real Estate's project portfolio continue to have a high sales ratio of about $98 \%$.

Risk and opportunities report

Key indicators

• Report on the Group's position

Results of operations, net assets and financial position

Project business at a glance

• Risk and opportunities report

Outlook

Consolidated financial statements

Other information

At the Instone Group, risk and opportunities management is an integral part of the Group-wide system of corporate governance. For a detailed overview of our risk and opportunities management processes as well as the risk and opportunities situation, please refer to the "Risk and opportunities report" shown in the combined management report on pages $\sum$ pages 156-173 of the 2023 Annual Report.

There was no material change in the risk and opportunities situation in comparison to our presentation in the 2023 Annual Report.

The risk and opportunities situation is continuously monitored, assessed and, if necessary, incorporated into the ongoing forecast. From the current perspective, there were no identifiable risks that could jeopardise the continued existence of the Instone Group.

Outlook

Our forecast for business development for 2024, which we announced with the publication of the 2023 Annual Report in March 2024, continues to be confirmed.

The Management Board now expects the financial and operating performance indicators to develop as follows:

Forecast	TABL# 022
In millions of euros	2024
Adjusted revenue	$500-600$
Adjusted gross profit margin	$\sim 22 \%$
Adjusted earnings after tax	$30-40$
Volume of sales contracts	$>300$

The forecast is based, among other things, on a historically lower speed of sales of our unit sales projects and a sustained reluctance on the part of institutional investors as a result of the significant rise in interest rates.

CONSOLIDATED FINANCIAL STATEMENTS

26 Consolidated income statement
27 Consolidated statement of comprehensive income
28 Consolidated statement of financial position
30 Consolidated statement of cash flows
32 Segment reporting
34 Appendix (methods, addendum)

Consolidated statement of comprehensive income

Report on the

Group's position

• Consolidated financial statements

Consolidated income statement

• Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of cash flows

Segment reporting

Appendix
(methods, addendum)
Other information

Consolidated statement of comprehensive income
in thousands of euros

Consolidated earnings after tax

Items which are not reclassified into the consolidated earnings in future periods
$\begin{array}{ll}\text { Actual gains and losses } & 544 \ \text { Income tax effects } & -94\end{array}$

-94	-81

Income and expenses after tax recognised directly in equity	450	174
Total comprehensive income for the financial year after tax	24,372	29,387

Attributable to:

Owners of the Company
Non-controlling interests
24,372
29,712
355
24,372
29,387

Consolidated statement of cash flows

Key indicators

Report on the

Group's position

• Consolidated financial statements

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

• Consolidated statement of cash flows

Segment reporting

Appendix
(methods, addendum)
Other information

Consolidated statement of cash flows
in thousands of euros

Consolidated earnings after tax
(+) Depreciation and amortisation/(-) reversal of impairments of property, plant and equipment
(+) Loss/(-) Profit on disposals of property, plant and equipment
(+) Increase/(-) Decrease in provisions
(+) Current income tax income/(-) current income tax expense
(+) Deferred income tax income/(-) deferred income tax expense
(+) Expense/(-) income from interests in joint ventures
(+) Change in net assets attributable to non-controlling interests
(+) Interest expenses/(-) interest income
(+) Proceeds from public grants
(+) Other non-cash income/(-) Expenses
(+) Change in net working capital
(+) Income tax reimbursements/(-) income tax payments
- Cash flow from operations
(-) Outflows for investments in intangible assets
(-) Outflows for investments in property, plant and equipment
(-) Proceeds from disposals of investments
(-) Outflows for investments in financial assets
(-) Proceeds from disposals of unconsolidated companies and other companies
(-) Outflows for investments in unconsolidated companies and other companies
(-) Interest received
- Cash flow from investing activities

0.0101-30/09/2024	$0.0101-30/09 / 2023$
23,922	29,213
3,855	3,749
0	1
3,532	$-44$
12,245	17,337
5,530	$-1,411$
$-8,330$	$-5,996$
33	0
16,008	21,497
0	1,398
1,965	0
95,703	$-20,054$
-12,427	$-26,995$
127,046	18,695
$-556$	0
$-54$	$-31$
0	8,729
-1,249	$-7,232$
6	0
551	0
7,716	3,039
5,312	4,505

Consolidated statement of cash flows (continued)

Key indicators

Report on the Group's position

• Consolidated financial statements

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

• Consolidated statement of cash flows

Segment reporting

Appendix
(methods, addendum)
Other information

Consolidated statement of cash flows
in thousands of euros

0	$-4,548$
$(-)$ Acquisition of treasury shares	0
$(+)$ Proceed from loans and borrowings	0
$(-)$ Repayments of loans and borrowings	98,215
$(-)$ Payments from lessees to repay liabilities from lease agreements	$-142,578$
$(-)$ Interest paid	$-24,289$
$(-)$ Dividends paid	$-14,296$
- Cash flow from financing activities	$-86,093$
	383,605
Cash and cash equivalents at the beginning of the period	255,592
(+/-) Cash change in cash and cash equivalents	5,243
(+/-) Exchange rate, scope of consolidation and valuation-related changes in cash and cash equivalents	-987
- Cash and cash equivalents at the end of the period	$\mathbf{4 2 9 , 8 7 1}$
*Net working capital is made up of inventories, contract assets and trade receivables, other receivables less contract liabilities and trade payables and other liabilities.

Consolidated statement of cash flows

In thousands of euros
( - ) Acquisition of treasury shares
(-) Payments for transaction costs related to issued capital
(-) Proceed from loans and borrowings
(-) Repayments of loans and borrowings
(-) Interest paid
(-) Dividends paid
- Cash and cash equivalents at the end of the period
Net working capital is made up of inventories, contract assets and trade receivables, other receivables less contract liabilities and trade payables and other liabilities.

Segment reporting

Reconciliation of adjusted results of operations 01/01-30/09/2024

In thousands of euros

	Adjusted results of operations	Share deal effects	Non recurring effects	Reclassifications	Effects from PPA	Reported results of operations
Revenue	384,490	$-69,265$	0	0	547	315,771
Project costs	$-291,620$	67,850	0	$-3,245$	$-7,792$	$-234,807$
Cost of materials	$-294,226$	0	0	$-13,601$	0	$-307,828$
Changes in inventories	2,606	67,850	0	10,356	$-7,792$	73,020
Gross profit	92,870	$-1,415$	0	$-3,245$	$-7,246$	80,964
Platform costs	$-55,847$	0	$-484$	13,601	0	$-42,730$
Staff costs	$-37,835$	0	0	0	0	$-37,835$
Other operating income	5,786	0	0	14,938	0	20,724
Other operating expenses	$-19,942$	0	$-484$	$-1,337$	0	$-21,764$
Depreciation and amortisation	$-3,855$	0	0	0	0	$-3,855$
Share of results of joint ventures	8,330	0	0	0	0	8,330
EBIT	45,353	$-1,415$	$-484$	10,356	$-7,246$	46,565
Other results from investments	$-27$	0	0	0	0	$-27$
Financial result	$-5,651$	0	0	$-10,356$	0	$-16,008$
EBT	39,675	$-1,415$	$-484$	0	$-7,246$	30,530
Tax	$-10,650$					$-6,608$
EAT	29,026					23,922

Appendix

Key indicators

Report on the
Group's position

• Consolidated financial statements

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of cash flows

Segment reporting

• Appendix
  (methods, addendum)

Other information

Appendix

(methods, addendum)

Basis of the quarterly statement

For the quarterly statement as at 30 September 2024, the accounting policies applied when preparing the consolidated financial statements as at 31 December 2023 were generally adopted without change.

The consolidated financial statements for the Instone Group as at 31 December 2023 were prepared on the reporting date on the basis of section 316e(f) HGB in accordance with the 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 apply 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.

The quarterly statement is 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 stated otherwise. Commercial rounding may lead to immaterial rounding differences in the totals.

Events after the balance sheet date

There were no events of particular significance to report after the reporting date of 30 September 2024.

Other information

36 Disclaimer
37 Quarterly comparison
38 Multi-year overview
40 Contact/Legal notice/Financial calendar

Disclaimer

Forward-looking statements

This quarterly 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 the content of 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 the Instone Group 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 2023 consolidated report that is combined with the management report, as well as in this quarterly report. Furthermore, business development and economic results may also be encumbered by other factors. Following publication of this quarterly report, there are no plans to update the forward-looking statements made herein or to adjust them to events and developments.

Rounding of figures

Some figures disclosed in this quarterly 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 performance indicators and percentage changes are calculated on the basis of the underlying data and shown in the unit "thousands of euros".

$\rightarrow$

Key indicators

Report on the

Group's position

Consolidated financial statements

• Other information

Disclaimer

Quarterly comparison

Multi-year overview

• Contact / Legal notice / Financial calendar

Contact

Head of IR and Capital Market
Communication \& Strategy
Burkhard Sawazki

Instone Real Estate Group SE

Grugaplatz 2-4, 4513I Essen, Germany

Phone: +49 201 45355-137
Fax: +49 201 45355-904
Email: burkhard.sawazki@instone.de

Legal notice

Instone Real Estate Group SE

Grugaplatz 2-4
4513I Essen
Germany

Phone: +49 201 45355-0
Fax: +49 201 45355-934
Email: info@instone.de

Management Board

Kruno Crepulja (Chairman/CEO)
David Dreyfus
Andreas Gräf

Chairman of the Supervisory Board
Stefan Brendgen

Commercial Register

Registered in the Commercial Register of the Essen Local Court under HRB 32658

VAT ID number
DE 300512686

Concept, design and implementation

RYZE Digital
www.ryze-digital.de

Financial calendar

$07 / 11 / 2024$	Publication of quarterly statement as at 30 September 2024
18/03/2025	Publication of financial report as at 31 December 2024
08/05/2025	Publication of quarterly statement as at 31 March 2025
07/08/2025	Publication of half-year report as at 30 June 2025
06/11/2025	Publication of quarterly statement as at 30 September 2025

Instone Real Estate Group SE

Grugaplatz 2-4
45131 Essen
Germany

Email: info@instone.de
www.instone-group.de