LEG Immobilien SE

Investor Presentation • Nov 8, 2024

LEG Immobilien SE
9M-2024 Results
8 November 2024

9M-2024 Results - Agenda
1 Highlights 9M-2024
3 Financial Performance
2 Portfolio \& Operating Performance
4 Outlook

Disclaimer

While LEG Immobilien SE ("The Company") has taken all reasonable care to ensure that the facts stated in this presentation are accurate and that the opinions contained in it are fair and reasonable, this presentation is selective in nature and is intended to provide an introduction to, and an overview of the Company's business. Any opinions expressed in this presentation are subject to change without notice and neither the Company nor any other person is under any obligation to update or keep current the information contained in this presentation. Where this presentation quotes any information or statistics from any external sources, you should not interpret that the Company has adopted or endorsed such information or statistics as being accurate.

This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realised from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation, and supply and demand. The Company has based these forwardlooking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and the Company does not undertake any duty to update the information and forward-looking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations.

This presentation does not constitute an offer or invitation to purchase or sell any shares in the Company and neither this presentation or anything in it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever.

Highlights 9M-2024

Financial Summary

LEG

9M-2024

Operating results		9M-2024	9M-2023	$+/-$ \%	Balance sheet		30.09.2024	31.12.2023	$+/-$ \%
Net cold rent	€m	643.8	623.5	$+3.3 \%$	Investment properties	€m	17,761.9	18,101.8	$-1.9 \%$
NOI (recurring)	€m	530.3	516.9	$+2.6 \%$	Cash and cash equivalents ${ }^{3}$	€m	867.3	405.5	$+113.9 \%$
EBITDA (adjusted)	€m	491.7	507.3	$-3.1 \%$	Equity	€m	7,338.9	7,488.2	$-2.0 \%$
FFO I ${ }^{1}$	€m	329.3	352.6	$-6.6 \%$	Total financing liabilities	€m	9,800.0	9,375.8	$+4.5 \%$
AFFO	€m	152.0	176.9	$-14.1 \%$	Net debt ${ }^{4}$	€m	8,919.6	8,954.4	$-0.4 \%$
AFFO per share	€	2.05	2.39	$-14.2 \%$	LTV	\%	48.5	48.4	+10bps
Operating cashflow	€	286.6	306.7	$-6.6 \%$	Average debt maturity	years	5.8	6.2	$-0.4 y$
NOI margin (recurring)	\%	82.4	82.9	-50bps	Average debt interest cost	\%	1.61	1.58	+3bps
EBITDA margin (adjusted)	\%	76.4	81.4	-500bps	Equity ratio	\%	37.2	38.8	$-160 \%$
FFO I margin	\%	51.1	56.6	-550bps	EPRA NTA, diluted	€m	9,264.6	9,379.9	$-1.2 \%$
AFFO margin	\%	23.6	28.4	-480bps	EPRA NTA per share, diluted	€	124.41	126.57	$-1.7 \%$
Portfolio		30.09.2024	30.09.2023	$+/-$ \%
Residential units	number	165,299	166,827	$-0.9 \%$
In-place rent (I-f-I)	€/sqm	6.78	6.57	$+3.2 \%$
Investments (adj.) ${ }^{2}$	€/sqm	24.63	22.32	$+10.3 \%$
EPRA vacancy rate (I-f-I)	\%	2.4	2.5	-10bps

1 No steering KPI - for information purpose only. 2 Excl. new construction activities on own land, own work capitalised, consolidation effects and after subsidies.
3 Including short-term deposits of €404.4m as of 9M-2024 ( $F 9$ - 2023: €126.5m) 4 Excl. lease liabilities according to IFRS \% and incl. short-term deposits.

On track for 2024 - further AFFO growth ahead for 2025

On the back of stabilizing valuations

Financials

• AFFO - 14.1\% to $€ 152.0 \mathrm{~m}$
• Operating cashflow - 6.6\% to $€ 286.6 \mathrm{~m}$
• FFOI-6.6\% to $€ 329.3 \mathrm{~m}$
• Adj. EBITDA-Margin 76.4\%
• LTV 48.5\%
• Debt @ 1.61\% for $\varnothing 5.8 y$
• NTA p.s. $€ 124.41$

Operations

• Net cold rent $+3.3 \%$
• I-f-I rental growth $+3.2 \%$, thereof freefinanced $+3.8 \%$
• I-f-I vacancy 2.4\% ( 10bps)

ESG

• Score of Sustainalytics ESG Risk Rating further improved to 6.3. and ranked no. 12 out of 1,007 real estate companies globally
• Top result with latest Great place to work survey ( $74 \%$ Trust Index and high participation rate of $76 \%$ )
• Field test of 1,000 termios thermostats within the LEG portfolio

Guidance 2024 confirmed at €190 - 210m AFFO
Strong operational momentum - financing costs remain low

Stabilization of valuations
H2-24 valuation expected to be $0 \%$ to $+0.5 \%$

Guidance 2025 offers further AFFO growth of $+7.5 \%{ }^{1}$
Higher rental growth (3.4-3.6\%) and higher adj. invest. ( $>€ 35 / \mathrm{sqm}$ )
In total proceeds of c. $€ 330 \mathrm{~m}$
Disposals of 3,400 units signed

BCP - a perfect match, adding $>5 \%$ to LEG's portfolio
$>90 \%$ regional overlap strengthens existing locations while Leipzig will become a new hub

BCP - Shifting BCP towards the LEG profitability level in the midterm

Margins as reported $\mathrm{H} 124^{1}$ reflect profitability upside

Adj. / EBITDA
BCP
LEG
$65 \%$
$76 \%$

FFO / FFO I

BCP
LEG
$31 \%$
$51 \%$

AFFO

BCP
LEG
$15 \%$
$26 \%$

Synergies ramp up over time

• //lustrative -
  

• Financing synergies: BCP
  benefitting from LEG
  financing conditions

• Operations \& admin
  synergies from $\mathbf{9 0} \%$ overlap
  and mid-term streamlining of
  BCP corporate structure
• Capex raise to LEG levels

Operations \& admin	Aligning capex
Financing synergies

2 Portfolio \& Operating Performance

Roughly $€ 330 \mathrm{~m}$ and almost 3,400 units of disposals YTD

Majority to be transferred in Q4

Portfolio development - Divestments

Number of units

Disposal proceeds
Net proceeds

• From the start of our disposal programme in Q1-2022 until 9M-2024 c. 3,200 units transferred for c. $€ \mathbf{2 2 0} \mathrm{m}$
• Additionally, so far c. 2,200 units expected to be transferred until year end / Q1-2025 with corresponding proceeds of c. $€ \mathbf{2 4 3 m}$
• More disposals in the pipeline

Signed disposals YTD (not yet transferred)
Price $€ \mathrm{~m}$
Units

Existing portfolio
Hanover area (Lower Saxony)	61	766
Essen (NRW) UPDATE	5	84
Recklinghausen (NRW)	22	409
Other incl. commercial UPDATE	19	164
Radevormwald (NRW) NEW	19	324

New built
Essen/ Duesseldorf (NRW) UPDATE 80 270
Bremen (Bremen) 37
Total
c. 243
2,156

• Signings reflect recovery of transaction markets
• Disposals at low end as well as high end of quality spectrum
• Rigorous price discipline continued - in total, disposals transacted above book values
• Buyers range from HNWIs, pension funds to smaller domestic and international institutionals

Portfolio transactions

No dramatic changes overall from our portfolio management actions

Number of units based on date of transfer of ownership ${ }^{1,2}$

Disposals

• YTD disposals incl. transfer of ownership for $\mathbf{1 , 2 5 9}$ units above book value at $€ 87$ m - translating into proceeds of $€ 44 \mathrm{~m}$
• Transfer of three larger portfolios with around 450 units in total
• Additionally, c. 2,200 units are expected to be transferred until year end/ Q1-2025 with corresponding proceeds of c. $€ 243 \mathrm{~m}$
• The additions to the portfolio ytd solely relate to conversions

Rental growth guidance confirmed

Free financed rent growth for FY-2024 expected to be 3.8 - 4.0\% (excl. new construction)

I-f-I rent development

€/sqm/month

Residential rent

Free financed rent

• Free-financed part increased by $\mathbf{3 . 8 \%}$ - guidance unchanged ( $\mathbf{3 . 8 \%}$ - $\mathbf{4 . 0 \%}$ l-f-I at year-end 2024)
• No cost rent adjustment in 2024; next increase will be in 2026
• Tenant fluctuation stays at low level of $\mathbf{9 . 4} \%$ yoy

Capex and Maintenance

Moderate increase - Guidance of $€ 34$ per sqm reaffirmed

3
Financial Performance

Financial highlights 9M-2024

On track for a steadier AFFO distribution throughout the year

Net cold rent

€m

EBITDA (adjusted)
€m

9M-2023

Net operating income (recurring)
€m

AFFO
€m

Net cold rent

• Growth mainly driven by $\mathbf{3 . 2 \%}$ I-f-I rent growth

Net operating income (recurring)

• Increase by $\mathbf{2 . 6} \%$ mainly driven by higher net cold rent

EBITDA (adjusted) and AFFO

• Decline in AFFO by $14.1 \%$ to $€ 152 \mathrm{~m}$ in particular due to
• Missing contribution from the green electricity production $(-€ 19.9 \mathrm{~m})$ - forward sale business at peak prices in 2022 for 2023
• Higher investments $(-€ 15.4 \mathrm{~m})$
• Higher interest payments $(-€ 9.9 \mathrm{~m})$
• Partly off by effects from subsidies $(+€ 9.1 \mathrm{~m})$

AFFO Bridge 9M-2024

Overall on track for guidance

Portfolio values 9M-2024

LEG

Valuations troughing with $0 \%$ to $+0.5 \%$ expected for H2 2024

Market segment	Residential Units	$\begin{gathered} \text { GAV } \ \text { Residential } \ \text { Assets }(\mathrm{Km}) \end{gathered}$	$\begin{gathered} \text { GAV/ } \ \text { sqm }(\mathrm{K}) \end{gathered}$	Gross yield	In-Place Rent Multiple	$\begin{gathered} \text { GAV } \ \text { Commercial/ } \ \text { Other }(\mathrm{Km}) \end{gathered}$	Total GAV (Km)
High- Growth Markets	49,780	7,121	2,209	$4.1 \%$	24.5 x	295	7,398
Stable Markets	66,524	6,350	1,503	$5.1 \%$	19.5 x	246	6,592
Higher- Yielding Markets	48,995	3,318	1,131	$6.3 \%$	15.8 x	90	3,413
Total Portfolio	165,299	16,789	1,617	$4.9 \%$	20.3 x	631	17,403

Gross yields
$8 \%$

[^0]
[^0]: 1 GAV of IAS 40 portfolio (including leasehold, land value and assets under construction) was 617.762 m .

Financial profile

Very low average interest costs of 1.6\% support margins going forward

Pro forma maturity profile ${ }^{1}$
$\mathbb{C m}$	Loans = Convertibles	$\begin{aligned} & \text { = Bonds } \ & \text { = Sustainable bonds } \end{aligned}$
2024			Weighted avg. interest
2025	801		$1.49 \%$
2026	1,043		$1.48 \%$
2027	1,211		$1.82 \%$
2028	1,048		$1.25 \%$
2029	777		$1.20 \%$
2030	1,045		$2.05 \%$
2031	976		$0.95 \%$
2032	779		$2.24 \%$
2033	892		$1.80 \%$
2034	901		$1.81 \%$
2035+	385		$1.99 \%$

Average debt maturity years
9M-2024 5.8
9M-2023 6.6

Average interest cost

\%
9M-2024 1.61
9M-2023 1.42

Loan-to-value

\%
9M-2024 48.5
Q4-2023 48.4

Highlights

• All 2024 maturities refinanced
• Liquidity of $>\boldsymbol{\epsilon} \mathbf{8 6 0} \mathrm{m}^{2}$ plus sales proceeds cover BCP acquisition as well as all maturities into late 2025
• Liquidity supported by issuance of convertible bond in September with a volume of $€ 500 \mathrm{~m}$ and maturity until 2030
• Opportunistic refinancing now also for the 2026 maturities on the agenda
• Undrawn RCFs in the amount of $€ 750 \mathrm{~m}$ as well as an unused CP program of $€ 600 \mathrm{~m}$
• Average debt maturity of 5.8 years with average interest cost of $1.61 \%$
• Average interest hedging rate c.95\%
• LTV at $\mathbf{4 8 . 5 \%}$ as of 30 September 2024
• Interest Coverage Ratio (ICR) at 4.1x

Guidance 2024: AFFO of €190m - €210m confirmed

Midpoint of guidance points to AFFO per share growth of c. $+10 \%$

Guidance 2024 ${ }^{1}$

AFFO	€190m - 210m
Adj. EBITDA margin	c.77\%
I-f-I rent growth	3.2\% - 3.4\%
Investments	c.34€/sqm
LTV	Medium-term target level max. 45\%
Dividend	100\% AFFO as well as a part of the net proceeds from disposals
Disposals	Not reflected ${ }^{1}$
Environment	2024-2027 Installation and commissioning of 2,000 air-to-air heat pumps in 2027 in LEG's portfolio and in third-party portfolios
	4,000 tonnes $\mathrm{CO}_{2}$ reduction from modernisation projects and customer behaviour change
Social	2024-2027 Acceleration of the processing time of total LEG tenant complaints by $\mathbf{1 0 \%}$ by 31 December 2027 based on the averaged processing time of resolved complaint tickets from March 2024 and September 2024
	2024 Use of 100 LEG staff hours to design, organise or implement intercultural projects until 31 December 2024
Governance	2024 85\% of TSP employees, 99\% of employees in staff holding LEG group companies have completed the "IT Security" training until 31 December 2024

Guidance 2025: Further AFFO increase towards €205 - 225m

Stronger rent growth and smart spending allows for higher cash generation

Guidance 2025 ${ }^{1}$

AFFO	$€ 205 \mathrm{~m}-225 \mathrm{~m}$
Adj. EBITDA margin	c. $76 \%$
I-f-I rent growth	$3.4 \%-3.6 \%$
Investments	$>35 € /$ sqm
LTV	Medium-term target level max. $45 \%$
Dividend	100\% AFFO as well as a part of the net proceeds from disposals
Disposals	Not reflected ${ }^{1}$
Acquisitions	$B C P$ reflected ${ }^{1}$

FFO I/ AFFO calculation

$\epsilon$ m	9M-2024	9M-2023
Net cold rent	643.8	623.5
Profit from operating expenses	$-16.5$	$-16.8$
Personnel expenses (rental and lease)	$-86.2$	$-79.4$
Allowances on rent receivables	$-13.5$	$-14.0$
Other income (rental and lease)	$-2.2$	0.8
Non-recurring special effects (rental and lease)	4.9	2.8
Net operating income (recurring)	530.3	516.9
Net income from other services (recurring)	1.6	23.1
Personnel expenses (admin.)	$-28.7$	$-23.0$
Non-personnel operating costs	$-16.1$	$-19.1$
Non-recurring special effects (admin.)	4.5	9.4
Administrative expenses (recurring)	$-40.3$	$-32.7$
Other income (admin.)	0.1	0.0
EBITDA (adjusted)	491.7	507.3
Net cash interest expenses and income FFO I	$-104.9$	$-94.9$
Net cash income taxes FFO I	$-0.2$	$-4.6$
Maintenance (externally-procured services)	$-77.5$	$-63.7$
Subsidies recognised in profit or loss	9.1	-
Own work capitalised	14.0	11.4
FFO I (including non-controlling interests)	332.2	355.5
Non-controlling interests	$-2.9$	$-2.9$
FFO I (excluding non-controlling interests)	329.3	352.6
FFO II (including disposal of investment property)	324.7	349.4
Capex (recurring)	$-177.3$	$-175.7$
AFFO (capex-adjusted FFO I)	152.0	176.9

Net cold rent

• $+\epsilon 20.3 \mathrm{~m}$ or $+3.3 \%$ driven by rent increases

Personnel expenses (rental and lease; admin)

• Increase mainly driven by higher wages and one-time inflation compensation payment in Q1 ( $€ 3.9$ m treated as non-recurring special effect)

Net income from other services (rec.)

• Lower income due to absence of positive effects from forward sale of green electricity ( $€ 19.9$ m yoy AFFO impact)

Net cash interest expenses and income

• Increase $(-€ 9.9 \mathrm{~m})$ due to refinancings partly offset by higher cash interest income

Investments (maintenance and capex)

• Lower level in previous year, steering adjusted to equally spread expenses over the four quarters of 2024

EPRA NRV - NTA - NDV

€m

	30.09.2024			31.12.2023
	EPRA NRV - diluted	EPRA NTA - diluted	EPRA NDV - diluted	EPRA NRV - diluted	EPRA NTA - diluted	EPRA NDV - diluted
IFRS equity attributable to shareholders (before minorities)	7,313.9	7,313.9	7,313.9	7,463.2	7,463.2	7,463.2
Hybrid instruments	28.5	28.5	28.5	28.5	28.5	28.5
Diluted NAV (at Fair Value)	7,342.4	7,342.4	7,342.4	7,491.7	7,491.7	7,491.7
Deferred tax in relation to fair value gains of IP and deferred tax on subsidised loans and financial derivatives	1,942.2	1,935.4	-	1,943.4	1,935.2	-
Fair value of financial instruments	$-9.2$	$-9.2$	-	$-42.0$	$-42.0$	-
Intangibles as per the IFRS balance sheet	-	$-4.0$	-	-	$-5.0$	-
Fair value of fixed interest rate debt	-	-	405.1	-	-	744.0
Deferred taxes of fixed interest rate debt	-	-	$-88.5$	-	-	$-156.7$
Estimated ancillary acquisition costs (real estate transfer tax)	1,744,1	-	-	1,759.4	-	-
NAV	11.019,5	9,264.6	7,659.0	11,152.5	9,379.9	8,079.0
Fully diluted number of shares	74,469,665	74,469,665	74,469,665	74,109,276	74,109,276	74,109,276
NAV per share (€)	147.97	124.41	102.85	150.49	126.57	109.01

Balance sheet

€m	30.09.2024	31.12.2023
Investment property	17,761.9	18,101.8
Other non-current assets	590.0	559.0
Non-current assets	18,351.9	18,660.8
Receivables and other assets	646.5	287.4
Cash and cash equivalents	462.9	277.5
Current assets	1,109.4	564.9
Assets held for sale	253.5	77.9
Total Assets	19,714.8	19,303.6
Equity	7,338.9	7,488.2
Non-current financing liabilities	7,969.0	8,004.4 ${ }^{1}$
Other non-current liabilities	2,092.9	2,102.3 ${ }^{1}$
Non-current liabilities	10,061.9	10,106.7 ${ }^{1}$
Current financing liabilities	1,831.0	1,371.4 ${ }^{1}$
Other current liabilities	483.0	$337.3^{1}$
Current liabilities	2,314.0	1,708.7 ${ }^{1}$
Total Equity and Liabilities	19,714.8	19,303.6

LEG

Equity ratio: 37.2\% (FY-2023: 38.8\%)
Investment property

• Capex: $+€ 169.5 \mathrm{~m}$
• New construction/completions: $+€ 40.1 \mathrm{~m}$
• Revaluation: -€292.6m
• Reclassification for assets held for sale (IFRS 5): -€260.2m
  Receivables and other assets
• Increase in short term deposits ( $+€ 276.4 \mathrm{~m}$ )

Cash and cash equivalents

• Operating activities: $+€ 286.6 \mathrm{~m}$
• Investing activities: -€373.8m
• Financing activities: $+€ 272.6 \mathrm{~m}$ (including dividend of -€153.2m)

Financing liabilities

• IAS 1 amendments led to a shift in maturities of financial liabilities and the embedded derivatives of convertibles from medium to short-term ( $€ 991.7 \mathrm{~m}$ ) - FY-2023 figures adjusted
• Increase due to issuance of convertible bond with a nominal volume of $€ 500.0 \mathrm{~m}$

Loan to Value

€m	30.09.2024	31.12.2023
Financial liabilities	9,800.0	9,375.8
Excluding lease liabilities (IFRS 16)	13.1	15.9
Cash \& cash equivalents ${ }^{1}$	867.3	405.5
Net Debt	8,919.6	8,954.4
Investment properties	17,761.9	18,101.8
Properties held for sale	253.5	77.9
Participation in other residential companies	368.1	340.1
Property values	18,383.5	18,519.8
Loan to Value (LTV) in \%	48.5	48.4

Loan to Value

• Slight increase by 10bps to $48.5 \%$ ytd, devaluation of portfolio offset by lower net debt
• Strong increase of cash and cash equivalents by $€ 461.8 \mathrm{~m}$ reflects issuance of convertible bond

Participation in other residential companies

• BCP stake ( $\mathbf{3 5 . 7 \%}$ ) included with market value of $€ 196.3 \mathrm{~m}(+€ 28.0 \mathrm{~m}$ ytd) based on a share price of $€ 71.22$ at Tel Aviv Stock Exchange as at 30 Sept. 2024 ( $€ 61.04$ as at 31 Dec 2023)

Income statement

€m	9M-2024	9M-2023
Net operating income	461.6	450.3
Net income from the disposal of investment property	$-2.4$	$-1.2$
Net income from the valuation of investment property	$-292.6$	$-1,495.0$
Net income from the disposal of real estate inventory	$-0.3$	$-0.2$
Net income from other services	1.2	22.7
Administrative and other expenses	$-47.4$	$-44.5$
Other income	0.1	0.1
Operating earnings	120.2	$-1,067.8$
Net finance costs	$-111.4$	$-152.7$
Earnings before income taxes	8.8	$-1,220.5$
Income tax expenses	1.6	250.6
Consolidated net profit	10.4	$-969.9$

Net operating income

• Increase of $+€ 11.3 \mathrm{~m}$ mainly driven by higher net cold rent

Net income from valuation

• Significantly lower devaluation (-1.6\% for residential portfolio) compared to H1-2023 (-7.4\%)

Net income from other services

• Decline due to absence of positive effects from forward sale of green electricity ( $€ 19.9 \mathrm{~m}$ yoy AFFO impact)

Net finance cost

• Positive valuation effect from the stake in BCP
• Negative impact from the remeasurement of derivatives in connection with the convertible bonds $(-€ 25 m)$

Latest IAS 1 amendments lead to reclassification of liabilities

No effect on economic maturities, no effect on covenants, no effect on LTV - mere change in disclosure

CHANGE IN

IAS 1

IMPACT ON BALANCE SHEET

NO

IMPACT ON MATURITIES

• Shift in the maturities of financial liabilities from the medium-term to the short-term range
• According to the amendment of IAS 1.69 in conjunction with IAS 1.76 A/B, the liabilities from convertible bonds were reclassified as short-term debt, as a conversion of the instruments is technically possible at any time - regardless the economic rationale
• Changes reflect exclusively the two convertible bonds
• The IAS 1 amendment leads to a shift of $€ 991.7 \mathrm{~m}$ (previous year: $€ 925.7 \mathrm{~m}$ ) from medium-term to short-term financial liabilities, i.e. including to notional and the embedded option
• The reclassification according to IAS 1 has no impact on the contractually agreed residual maturities
• Therefore, the maturity dates of the 2017/2025 €400m as well as the 2020/2028 €550m convertible bonds remain unchanged. The contractual maturities are reflected in the maturity profile on page 18 of this presentation.

Contractually agreed maturities of financing liabilities from real estate financing according to IAS 1 before amendments
€ million	Remaining term < 1 year	Remaining term $>1$ to 5 years	Remaining term $>5$ years	Total
30.09.2024	832.9	4,481.9	4,378.4	9,693.2
31.12.2023	438.5	4,450.7	4,375.7	9,264.9

IAS 1 maturities of financing liabilities from real estate financing

	Remaining term $<1$ year	Remaining term $>1$ to 5 years	Remaining term $>5$ years	Total
€ million	1,824.6	3,929.6	3,939.0	9,693.2
31.12.2023	$1,364.2^{1}$	$3,525.0^{1}$	4,375.7	9,264.9

Portfolio valuation H1-2024
Valuation bottoming out - trough in sight

Valuation decline by markets ${ }^{1}$

Peak to
trough (\%)

	Total
H1	FY
24	23
$-1.6$
	$-4.9$
	$-11.9$

High-growth
H1	FY	H2	H1	H2
24	23	23	23	22
$-1.7$
			$-5.3$
				$-9.0$
		$-15.8$
			$-18.8$

Higher-yielding

H1	FY	H2	H1	H2
24	23	23	23	22
$-1.8$
		$-4.3$	$-6.1$

$-10.1$

$-13.7$

Highlights

• Devaluation of $\mathbf{- 1 . 6 \%}$ in H1-2024, pressure easing off; similar trend in all markets
• Residential transaction market with slight recovery in Q2-2024² (€3.3bn in H1-2024, $+25 \%$ yoy)
• Since peak in H1-2022 combined devaluation effect of c. $16.8 \%$
• Average object-specific discount rate increased to 5.0\% (FY-2023 4.7\%), cap rate increased to 5.8\% (FY-2023 5.7\%)

[^0]
[^0]: ${ }^{1}$ Property valuation with cut-off date as of 31 March 2024 and revaluation date as of 30 June 2024.
2 Source: MVP Real Estate for transactions $>30$ units.

German residential market

A highly fragmented market - dominated by private owners

Professional owners $34 \%$
$66 \%$ Private owners

Demand - supply imbalance will persist

New supply continues to erode while population will remain at high level

German population at highest level ever in 2023
in million

New apartments completed

No. of building permissions for apartments continues to drop

in $\%$ vs previous year month

LEG's portfolio comprises of c. 165,300 units

Well balanced portfolio with significant exposure also in target markets outside NRW

As at 30 September 2024

Total portfolio ${ }^{1}$

(c. 165,300 units)
by units

by GAV
€m $20 \%$

by rent regulation
Normal vs. tense markets ${ }^{2}$

Portfolio KPIs

Rent increases alongside vacancy reduction

Market split (GAV)

$\%$

High-growth
Stable
Higher-yielding

In-place rent, I-f-I

High-growth
Stable
Higher-yielding

Vacancy, I-f-I

$\%$
High-growth
Stable
Higher-yielding

Markets

	Total portfolio		High-growth		Stable		Higher-yielding
	9M-2024	$\Delta$ (YOY)	9M-2024	$\Delta$ (YOY)	9M-2024	$\Delta$ (YOY)	9M-2024	$\Delta$ (YOY)
# of units	165,299	$-0.9 \%$	49,780	$-0.3 \%$	66,524	$-0.4 \%$	48,995	$-2.3 \%$
GAV residential assets ( $€ \mathrm{~m}$ )	16,789	$-5.4 \%$	7,121	$-6.0 \%$	6,350	$-4.3 \%$	3,318	$-6.0 \%$
In-place rent $\left(\mathrm{m}^{2}\right), \mathrm{I}-\mathrm{f}-\mathrm{I}$	€6.78	$+3.2 \%$	€7.60	$+3.0 \%$	€6.53	$+3.5 \%$	€6.19	$+2.9 \%$
EPRA vacancy, I-f-I	2.4\%	-10bps	1.4\%	-20bps	2.2\%	0bps	4.2\%	+10bps

Rent regulation in Germany

LEG

Free-financed units

81\% of LEG's units ( 135,000 units)

Non-tense markets
-110,000 units

Rent increase

• Max. 20\% within 3 years
• Max. increase to local reference rent ${ }^{1}$

Modernisation levy

• Annual rent can be increased by $\mathbf{8 \%}$ of modernisation costs
• Limit: $€ \mathbf{3}$ per sqm (rent/sqm/month $>€ \mathbf{7}$ ) or $€ \mathbf{2}$ per sqm (rent/sqm/month $<€ \mathbf{7}$ ) over $\mathbf{6}$ years

No regulations

Rental brake (Mietpreisbremse)

• Increase of max. $10 \%$ on local reference rent ${ }^{1}$

Rent restricted units

19\% of LEG's units ( 31,000 units)

Cost rent adjustment

• Every third year (i.e. last was in 2023, next will be in 2026)
• After full repayment of the underlying subsidised loan, the residential unit gets out of rent restriction and regular code applies
• In the case of early repayment, rent restriction continues for another 10 years (tenant protection); then regular code for freefinanced units applies

Top locations upcoming rent tables (MSP - Mietspiegel)
Offering the basis for further growth

Location	# Residents	LEG market segment	# LEG free financed units	\% of total free financed portfolio	Current MSP type	Current MSP valid since	New MSP expected type	New MSP expected time of update
Detmold	$>50,000$	Stable	1,117	0.8	Qualified	12/2021	Qualified	07/20241
Bonn	$>100,000$	High-growth	1,527	1.1	Qualified	06/2022	Qualified	12/2024
Remscheid	$>100,000$	Higher-yielding	1,521	1.1	Qualified	12/2022	Qualified	12/2024
Wuppertal	$>100,000$	Stable	1,350	1.0	Qualified	12/2022	Qualified	12/2024
Dortmund	$>100,000$	Stable	9,620	7.2	Qualified	01/2023	Qualified	01/2025
Herne	$>100,000$	Higher-yielding	2,925	2.2	Simple	01/2023	Qualified	01/2025
Herten	$>50,000$	Higher-yielding	1,204	0.9	Simple	01/2023	Qualified	01/2025
Neuss	$>100,000$	High-growth	668	0.5	Simple	01/2023	Qualified	01/2025
Siegen	$>100,000$	Stable	1,360	1.0	Simple	01/2023	Simple	01/2025
Braunschweig	$>100,000$	High-growth	1,987	1.5	Qualified	09/2022	Qualified	03/2025
Bochum	$>100,000$	Stable	1,224	0.9	Qualified	04/2023	Qualified	04/2025

[^0]
[^0]: 1 Publication delayed

Subsidised units account for around 19\% of the portfolio

Reversionary potential amounts to $55 \%$ on average

Rent potential subsidised units

• Until 2028, around 19,000 units will come off rent restriction
• Units show significant upside to market rents
• The economic upside can theoretically be realised the year after restrictions expire subject to general legal and other restrictions ${ }^{4}$

Around 60\% of units to come off restriction until 2028

[^0]
[^0]: 1Average rent value that could theoretically be achieved, not implying that an adjustment of the in-place rent to the market rent is feasible, as stringent legal and contractual restrictions regarding rent increases exist.
245 years $=2024-2028 ; 6-10$ years $=2029-2033 ;+10$ years $=2034 \mathrm{ff} \quad 3$ Rent upside is defined as the difference between LEG in-place rent and market. 4 For example rent increase cap of $10 \%$ (torsor markets) or $20 \%$ for three years.

New construction - finishing the last projects - small in volume LEG

Small size of projects and investment volume, cash potential from built to sell

Completions

number of units per year
Development on own land
Acquisitions (3rd party developer)
396
0
2024e
Investment volume per year
€m

9M-2024

9M-2025e

Remaining completions until 2025

396 units

Remaining investment volume until 2025
€43m

Carbon Balance Sheet 2023

$27.3 \mathrm{CO}_{2} \mathrm{ekg} / \mathrm{sqm}$ on a market based and climate adjusted basis

Carbon balance sheet

• Bottom-up approach
• BAFA-factors in line with GHG-protocol
• Scope 1 and scope 2
• $27.3 \mathrm{CO}_{2} \mathrm{ekg} / \mathrm{sqm}$ based on heating energy

Heat energy by source ( $100 \%$ of portfolio)

Gas
District heating
Heating oil
Electricity for heating
Coal (local heating)
Other
$68.4 \%$
27.9\%

2.3\%

0.7\%

0.7\%

0.1\%

• Based on actual consumption 2022 ( $61 \%$ actuals, $37 \%$ energy performance certificates (EPC), $2 \%$ estimates)
• Extrapolated for 2023
• Limited assurance by Deloitte

Reflecting our roots

Energy efficiency of our portfolio of $144 \mathrm{kWh} / \mathrm{sqm}$ is a function of corporate DNA \& history:

• Providing affordable housing in post-war Germany

LEG portfolio by construction years vs. LEG market

• before 1948 ■ 1949 - 1978 $\quad \equiv 1979$ - 1994 ■ 1995 - 2009 ■ 2010-

Distribution by energy efficiency classes LEG

On track for our target towards climate neutrality

LEG

Nudging initiative pays-off and leads to strong and cost-effective contribution

• LEG fully committed to German Climate Change Act to achieve climate neutrality by 2045
• Aligned with strategy via STI/ LTIcomponent of compensation scheme
• $\mathrm{CO}_{2}$ reduction in 2023 by $2 \%$ to 32.6 kg (location based) and by $4 \%$ to 27.3 kg (market based)
• Key driver:
• 8,728: $\mathrm{CO}_{2}$ savings of which
• 6,011t from nudging-effects
• 2,717t from energetic refurbishments
• 2023 and 2024 STI component: 4,000 tons $\mathrm{CO}_{2}$ reduction from modernisation projects and customer behavior change
• 2023-26 LTI component envisages a 10\% efficiency improvement for investments undertaken

Among the best in class

Reflecting LEG's strong sustainability commitment

ESG		2019	2020	2021	2022	2023
MSCI 華	ESG Rating	(AA)	(AA)	(AA)	(AAA)	(AA)	Top rating since 2022
SUSTAINALYTICS 200mpm mean	ESG Rating	20.1	10.4	7.8	6.7	6.7	No. 6 out of 1,030 in global real estate ${ }^{1}$ No. 16 out of 16,009 in global total coverage ${ }^{1}$
$\begin{aligned} & \text { NCDP } \ & \text { NAL } \ & \text { SOI } \ & \text { RAC } \end{aligned}$	CDP Score				(B)	(B)	Since 2022 B-rated, score above sector (B-)
SCIENCE BASED TARGETS	SBTi target				SBTs submitted	SBTs approved	Approved 10/2023, amongst first German residential companies
ISS ESG $\gg$	$\begin{aligned} & \text { ISS } \ & \text { ESG } \end{aligned}$	$\mathrm{D}+$	C-	C-	$\mathrm{C}_{\text {B }}$	C	Prime Status since 2022
	E PRA SUSSESS	sBPR Award					Gold rating confirmed since 2020
DAX	ESG Index		DAX' 50 ESG	DAX' 50 ESG	DAX' 50 ESG	DAX' 50 ESG	Member since the beginning of the index
MSCI 華	ESG Indices						MSCI EAFE Choice ESG Screened Index MSCI World Custom ESG Climate Series MSCI OFI Revenue Weighted Global ESG Index

LEG

Sufficient bond covenants headroom

Unsecured financing covenants

Covenant	Threshold	9M-2024
Consolidated Adjusted EBITDA / Net Cash Interest	$\geq 1.8 \times$	$4.1 \times{ }^{1}$
Unencumbered Assets / Unsecured Financial Indebtedness	$\geq 125 \%$	$177.1 \%$
Net Financial Indebtedness / Total Assets	$\leq 60 \%$	$47.4 \%$
Secured Financial Indebtedness / Total Assets	$\leq 45 \%$	$18.1 \%$

Ratings (Moody's)

Type	Rating	Outlook
Long Term Rating	Baa2	Stable
Short Term Rating	P-2	Stable

Financing mix

Fixed interest
Derivatives
Variable interest
$88.0 \%$
$\square$ $6.8 \%$
$\square$ $5.2 \%$

Key financial ratios
9M-2024 9M-2023
Net debt / adj. EBITDA ${ }^{2}$
LTV
48.5
46.8\%

Secured Debt / Total Debt
Unencumbered Assets / Total Assets
Equity ratio
38.1
$35.8 \%$
$43.0 \quad 42.2 \%$
$37.2 \quad 40.4 \%$

[^0]
[^0]: 1 Based on the adjusted EBITDA definition effective until business year 2022. Based on the adjusted EBITDA definition effective since business year 2023, i.e. excluding maintenance (externally-procured services) and own work capitalized, KPI is 4.7x.
2 Average net debt last four quarters / adjusted EBITDA LTM

Capital market financing

Corporate bonds

Maturity	Issue Size	Maturity Date	Coupon	Issue Price	ISIN	WKN
2019/2027	$€ 500 \mathrm{~m}$	28 Nov 2027	0.875\% p.a.	99.356\%	DE000A254P51	A254P5
2019/2034	$€ 300 \mathrm{~m}$	28 Nov 2034	1.625\% p.a.	98.649\%	DE000A254P69	A254P6
2021/2033	$€ 600 \mathrm{~m}$	30 Mar 2033	0.875\% p.a.	99.232\%	DE000A3H3JU7	A3H3JU
2021/2031	$€ 700 \mathrm{~m}^{1}$	30 Jun 2031	0.750\% p.a.	99.502\%	DE000A3E5VK1	A3E5VK
2021/2032	$€ 500 \mathrm{~m}$	19 Nov 2032	1.000\% p.a.	98.642\%	DE000A3MQMD2	A3MQMD
2022/2026	$€ 500 \mathrm{~m}$	17 Jan 2026	0.375\% p.a.	99.435\%	DE000A3MQNN9	A3MQNN
2022/2029	$€ 600 \mathrm{~m}^{2}$	17 Jan 2029	0.875\% p.a.	99.045\%	DE000A3MQNP4	A3MQNP
2022/2034	$€ 500 \mathrm{~m}$	17 Jan 2034	1.500\% p.a.	99.175\%	DE000A3MQNQ2	A3MQNQ

Financial
Covenants

Adj. EBITDA/ net cash interest $\geq 1.8 x$
Unencumbered assets/ unsecured financial debt $\geq 125 \%$
Net financial debt/ total assets $\leq 60 \%$
Secured financial debt/ total assets $\leq 45 \%$

Capital market financing

LEO

2017/2025

Issue Size
Term /
Maturity Date

Coupon

# of shares

Redemption Price
Initial Conversion Price

Adjusted Conversion Price ${ }^{1}$

Issuer Call

ISIN

WKN

2017/2025
€400m
8 years/
1 September 2025
0.875\% p.a.
(semi-annual payment:
1 March, 1 September)
$3,531,959$
$100.00 \%$
€118.4692
€113.2516
(since 2 June 2022)
From 22 September 2022, if LEG share price $>130 \%$ of the then applicable conversion price

DE000A2GSDH2
A2GSDH

2020/2028
€550m
8 years/
30 June 2028
0.400\% p.a.
(semi-annual payment:
15 January, 15 July)
$3,580,370$
$100.00 \%$
€155.2500
€153.6154
(since 7 June 2022)
From 5 August 2025, if LEG share price $>130 \%$ of the then applicable conversion price

DE000A289T23
A289T2

2024/2030
€500m
6 years/
4 September 2030
1.000\% p.a.
(semi-annual payment:
4 March, 4 September)
$4,256,231$
$106.34 \%$
€117.4748 (effective: €124.9227)
No adjustment so far
From 25 September 2028, if LEG share price $>130 \%$ of the then applicable conversion price

DE000A3L21D1
A3L21D

LEG share information

Basic data

Market segment
Stock Exchange
Total no. of shares
Ticker symbol
ISIN
Indices

Shareholder structure ${ }^{1}$

MFS
Blackrock
Other free float

10.0\%

9.5\%

Other free float
80.5\%

Share (05.11.2024; indexed; in \%; 01.02.2013 = 100)

1 Shareholdings according to latest voting rights notifications

Share price and market capitalisation since IPO

Financial calendar

For our detailed financial calendar, please visit https://ir.leg-se.com/en/investor-relations/financial-calendar

IR Contact

Investor Relations Team

Frank Kopfinger, CFA
Head of Investor Relations \& Strategy
Tel: +49 (0) 2114568 - 550
E-Mail: frank.kopfinger@leg-se.com

Karin Widenmann

Senior Manager Investor Relations
Tel: +49 (0) 2114568 - 458
E-Mail: karin.widenmann@leg-se.com

For questions please use ir@leg-se.com

Elke Franzmeier

Corporate Access \& Events
Tel: +49 (0) 2114568 - 159
E-Mail: elke.franzmeier@leg-se.com

Gordon Schönell, CIIA
Senior Manager Investor Relations
Tel: +49 (0) 2114568 - 286
E-Mail: gordon.schoenell@leg-se.com