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Adler Group
Quarterly Report • Nov 28, 2023
9962_10-q_2023-11-28_f83ba485-95fb-4e87-b06d-341e2391cee0.pdf
Quarterly Report
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QUARTERLY FINANCIAL
Key FiguresQ3
Profit and loss statement
| For the nine months ended | For the three months ended |
For the year ended |
|||
|---|---|---|---|---|---|
| In EUR thousand | 30 Sep 2023 |
30 Sep 2022 |
30 Sep 2023 |
30 Sep 2022 |
31 Dec 2022 |
| Income from rental activities | 237,041 | 281,317 | 79,333 | 85,888 | 369,354 |
| Adj. EBITDA from rental activities | 86,095 | 118,237 | 25,906 | 32,359 | 148,235 |
| Adj. EBITDA from rental activities margin | 53.8% | 63.1% | 49.5% | 57.1% | 60.6% |
| Adj. EBITDA Total | 19,721 | 79,334 | 16,114 | 27,594 | 95,080 |
| FFO 1 (from rental activities) | (6,592) | 67,968 | (14,792) | 18,062 | 86,779 |
| FFO 2 (incl. disposal results and development activities) | (175,213) | (1,237) | (64,249) | 3,880 | (15,806) |
Further KPIs
| Residential(*) | 30 Sep 2023 | 31 Dec 2022 |
|---|---|---|
| Monthly in-place rent (EUR per m2) | 7.39 | 7.58 |
| Total vacancy rate | 1.6% | 1.3% |
| Number of units | 25,047 | 26,202 |
| Like-for-like rental growth (LTM) | 2.4% | 1.5% |
(*) All values include ground floor commercial units and exclude units under renovation and development projects.
Balance sheet
| In EUR thousand except per share data | 30 Sep 2023(*) | 31 Dec 2022(*) |
|---|---|---|
| EPRA LTV | 89.1% | 74.5% |
| EPRA NRV | 1,199,084 | 2,540,793 |
| EPRA NRV per share (EUR) | 7.91 | 21.62 |
| EPRA NTA | 1,102,959 | 2,440,111 |
| EPRA NTA per share (EUR) | 7.27 | 20.77 |
(*) Adjusted for BCP IFRS 5 illustration which has been disregarded; the corresponding line items have been reversed into respective balance sheet positions.
Content
To our Stakeholders
Interim Management Report
- 10 Fundamentals of the Group
- Portfolio Overview
- Financial Overview
- Material Events
- Forecast Report
- Responsibility Statement
Condensed Consolidated Interim Financial Statements
- 42 Condensed Consolidated Interim of Financial Position
- Condensed Consolidated Interim of Profit or Loss
- Condensed Consolidated Interim of Comprehensive Income
- Condensed Consolidated Interim of Cash Flows
- Condensed Consolidated Interim of Changes in Equity
Financial Calendar & Imprint
About the Group
The Adler Group S.A. (the Company) is a Luxembourgbased real estate holding company with more than 500 subsidiaries (Adler Group) mainly operating in Germany. It specialises in the management and development of income-producing, multi-family residential real estate.
Adler Group owns and manages 25,047 residential rental units, largely concentrated in Berlin (around 71% of properties) and North-Rhine-Westphalia (around 28% of properties). Most of the properties fall into the market segment of affordable housing.
Besides the residential rental portfolio, Adler Group owns a portfolio of development projects located in some of the largest cities of Germany. Adler Group does not intend to hold them but rather to generate cash flow and earnings through either forward sales or upfront sales.
As of 30 September 2023, Adler Group had 619 employees based in Luxembourg and in several locations across Germany.
RESIDENTIAL RENTAL PORTFOLIO
Rental portfolio as at 30 September 2023(*)
Residential rental portfolio locations
(*) Residential rental portfolio showing all locations with >100 rental units, not considering any assets classified as held for sale.
Adler Group Share
The share
Share information (as at 30 September 2023)
| 1st day of trading | 23 July 2015 |
|---|---|
| Subscription price | EUR 20.00 |
| Price at the end of Q3 2023 | EUR 0.486 |
| Highest share price LTM | EUR 2.090 |
| Lowest share price LTM | EUR 0.405 |
| Total number of shares outstanding | 151.6 million |
| Total number of listed shares | 141.0 million |
| Total number of unlisted shares(1) | 10.6 million |
| ISIN | LU1250154413 |
| WKN | A14U78 |
| Symbol | ADJ |
| Class | Dematerialised shares |
| Free float | 79.11% |
| Stock exchange | Frankfurt Stock Exchange |
| Market segment | Prime Standard |
| EPRA indices | FTSE EPRA / NAREIT Global Index, FTSE EPRA / NAREIT Devel oped Europe Index, FTSE EPRA / NAREIT Germany Index |
Shareholder structure(2)
(as at 30 September 2023)
Free float shares 79.11%
Vonovia SE 15.88%
Taconic Capital Advisors 5.01%
(1) The share capital of Adler Group S.A. amounts to EUR 188,016.37, divided into 151,626,107 dematerialised shares with no par value. 141,012,279 shares (ISIN LU1250154413) are admitted to trading on the stock exchange. 10,613,828 shares (ISIN LU2615168379) are not admitted to trading. In connection with the restructuring of Adler Group S.A., the share capital was increased as consideration for the provision of a secured debt financing and new Adler Group S.A. shares were given to the investors participating in the debt financing. For time and cost reasons, it was agreed with these investors to partially admit the new shares to trading and use the prospectus-exemption. For this purpose, lock-up agreements were concluded with the investors. Currently, 10,613,828 shares are still subject to such lock-up agreements.
(2) According to the official notifications received from the shareholders.
Key stock market data
Adler Group shares are traded on the Prime Standard of the Frankfurt Stock Exchange. During the 12 months ended 30 September 2023, the shares traded between EUR 0.405 and EUR 2.090. Adler Group shares are included in the relevant real estate sector indices of the EPRA index family.
Shareholder structure
As at 30 September 2023, the total number of outstanding shares of Adler Group amounts to 151.6 million. At that time, the main shareholders with holdings of over 5% were: Vonovia SE (15.88%) and Taconic Capital Advisors (5.01%), according to the official notifications received from the shareholders. The remaining 79.11% free float shares were mainly held by institutional investors.
Dividend
Following the implementation of the proposed amendments pursuant to the Restructuring Plan, the Company is not permitted to declare or pay any dividends to shareholders for the year 2022 and thereafter.
Interim Management Report
Interim Management Report
- 10 Fundamentals of the Group
- Portfolio Overview
- Financial Overview
- Material Events
- Forecast Report
- Responsibility Statement
Fundamentals of the Group
Business model
Adler Group S.A. is a residential real estate company which – through its more than 500 subsidiaries – holds and manages 25,047 rental units, primarily based in Berlin and North-Rhine-Westphalia. This rental portfolio is valued at EUR 4.4 billion. Besides the rental portfolio, Adler Group owns a portfolio of development projects in some of the larger cities in Germany valued at EUR 1.6 billion. In agreement with the bondholders under the terms of the Restructuring Plan, these development projects shall be sold – some sales processes have already begun, others are to be initiated.
Hence, the Adler Group's business model focuses on asset and portfolio management, property and facility management, aiming at improving operating results by increasing rents and decreasing vacancies in its existing portfolio. The portfolio shall be further optimised depending on opportunities or necessities.
The 619 operational employees are based in Luxembourg and in several locations across Germany in order to bring Adler Group as close as possible to assets and tenants.
Objectives and strategy
Focus on active management of the portfolio to grow earnings and improve EBITDA margins.
Adler Group focuses on increasing rents through active asset management and targeted investments to modernise, refurbish and re-position properties, while constantly screening and anticipating developments in different sub-markets. In order to realise upside potential, Adler Group pursues regular rent increases up to the market levels within the regulatory and legal limits without CapEx investment. In addition, Adler Group continuously reviews rent potentials and pursues growth beyond the rent tables through targeted CapEx investments to modernise, refurbish and/or re-position properties.
25,047 units
RENTAL PORTFOLIO
Vacancies are kept low through active marketing tailored to the respective micro-location.
As apartments are typically renovated to market standard after a tenant has moved out, Adler Group is in the position to rent vacant apartments to higher quality tenants and thus to continuously improve the tenant structure and average rent.
Optimise the portfolio and recycle capital through selective investments and disposals.
By disposing of non-core assets, Adler Group aims to streamline the rental portfolio and to focus on mid- and large-size cities where a critical mass of assets can be managed thereby improving profitability and portfolio KPIs. When selling selected assets, Adler Group aims to sell at or around book value and has supporting documents proving it has been able to do so in the past, thus demonstrating the resilience of the German residential real estate market. Active capital recycling enables Adler Group to reduce leverage and ultimately to improve its capital structure.
Committed to adding value through refurbishment and modernisation.
Investing selected CapEx in refurbishment and modernisation measures in the existing portfolio will elevate the quality of the rental portfolio, improve energy efficiency in line with sustainability targets to reduce greenhouse gas emissions and thus add value overall.
Corporate Governance
The Company's corporate governance practices are governed by Luxembourg Law (particularly the Luxembourg law of 10 August 1915 on commercial companies, as amended) and the Company Articles. As a Luxembourg company with its shares admitted to trading on the regulated market (Prime Standard) of the Frankfurt Stock Exchange, the Company is not subject to any specific mandatory corporate governance rules. The corporate governance practices applied by the Company are those applied under general Luxembourg law.
Composition of the Board
As at 30 September 2023, the Board comprises the following members:
Prof. Dr. A. Stefan Kirsten, Chairman Independent Director
Dr. Heiner Arnoldi Independent Director
Mr Stefan Brendgen Independent Director
Mr Thilo Schmid Independent Director
Mr Thomas Zinnöcker Independent Director
Mr Thierry Beaudemoulin Director
Mr Thomas Echelmeyer Director
Portfolio Overview
Business performance highlights
As at 30 September 2023, the residential rental portfolio has a strong focus on Berlin as well as some other larger cities primarily in North-Rhine-Westphalia such as Duisburg and Düsseldorf.
The figures presented in this section show the rental portfolio without assets classified as held for sale (i.e, primarily the assets owned by BCP).
| Location | Fair value EUR m Q3 23 |
Fair value EUR/m2 Q3 23 |
Units | Lettable area m2 |
NRI(**) EUR m Q3 23 |
Rental yield (in-place rent) |
Vacancy Q3 23 |
Vacancy Δ YoY LFL |
Q3 23 Avg. rent EUR/m2/ month |
NRI Δ YoY LFL |
Rever sionary potential |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Berlin | 3,753 | 3,059 | 17,742 | 1,226,853 | 116 | 3.1% | 1.4% | (0.2%) | 7.91 | 2.4% | 24.4% |
| Other | 639 | 1,375 | 7,305 | 464,632 | 33 | 5.2% | 2.0% | 0.3% | 6.04 | 2.4% | 14.6% |
| Total | 4,392 | 2,597 | 25,047 | 1,691,486 | 149 | 3.4% | 1.6% | (0.1%) | 7.39 | 2.4% | 22.2% |
Portfolio overview(*)
(*) All values include ground floor commercial units and exclude units under renovation and development projects.
(**)Annualised net rental income.
In addition to the financial performance indicators, Adler Group also uses the following non-financial operating performance indicators.
The vacancy rate shows the ratio of m² of vacant units in the portfolio to total m² of the portfolio. Vacancy rate is used as an indicator of the current letting performance.
The in-place rent per m² provides an insight into the average rental income from the rented properties. It serves as an indicator of the current letting performance.
The like-for-like rental growth is the change rate of the net rents generated by the like-for-like residential portfolio over the last 12 months.
All of the above-described non-financial performance indicators are key drivers for the development of rental income.
The total amounts spent on maintenance and CapEx in relation to the total lettable area of the portfolio are further operational figures to ensure an appropriate level of investment in the real estate portfolio.
Portfolio performance
Rental portfolio(*)
| 30 Sep 2023 | 31 Dec 2022 | |
|---|---|---|
| Number of units | 25,047 | 26,202 |
| Average rent/m²/month (EUR) | 7.39 | 7.58 |
| Vacancy | 1.6% | 1.3% |
(*) All values include ground floor commercial units and exclude units under renovation and development projects.
The average rent per m2 amounted to EUR 7.39 as at 30 September 2023, a slight reduction mainly due to the disposal of the "Wasserstadt" portfolio in Berlin, comprising c. 700 non-rent-regulated rental units. The vacancy rate remained at a low level of 1.6%.
Like-for-like rental growth(*)
| In % | LTM(**) 30 Sep 2023 |
1 Jan - 31 Dec 2022 |
|---|---|---|
| Like-for-like rental growth | 2.4% | 1.5% |
(*) All values include ground floor commercial units and exclude units under renovation and development projects. (**) Last 12 months (LTM).
Like-for-like rental growth of the portfolio amounted to 2.4% over the last twelve months, both in Berlin and in the other cities combined.
Adler Group's fully integrated active asset management is focused on rental growth and employs dedicated strategies to drive all relevant components. In units that require modernisation, Adler Group invests CapEx to improve quality to meet today's standards and regulations. Applying the relevant regulatory framework accurately and efficiently is key to successfully maximising rental growth for let units.
Portfolio Overview
Maintenance and CapEx
| In EUR million | 1 Jan - 30 Sep 2023 |
1 Jan - 31 Dec 2022 |
|---|---|---|
| Maintenance | 8.1 | 9.9 |
| CapEx | 21.1 | 35.9 |
| Total | 29.2 | 45.8 |
| In EUR per m² | 1 Jan - 30 Sep 2023 |
1 Jan - 31 Dec 2022 |
|---|---|---|
| Maintenance | 4.5 | 4.7 |
| CapEx | 11.9 | 17.0 |
| Total | 16.4 | 21.7 |
In the first nine months of 2023, total investment in the core portfolio amounted to EUR 29.2 million resulting in maintenance and CapEx expenses per m2 of EUR 16.4.
Vacancy split
Adler Group's active asset management aims to minimise the vacancy rate while keeping the necessary flexibility for portfolio optimisation.
Vacancy(*)
| 30 Sep 2023 | 31 Dec 2022 | |
|---|---|---|
| Total vacancy (units) | 375 | 321 |
| Total vacancy (m²) | 26,008 | 22,521 |
| Total vacancy rate | 1.6% | 1.3% |
(*) All values include ground floor commercial units and exclude units under renovation and development projects.
VACANCY RATE 1.6%
Financial Overview
Financial performance indicators
As outlined at various places in this report (e.g., refer to the section "Material Events"), Adler Group has been exposed to a challenging situation that was partly self-inflicted and largely caused by external factors throughout the financial year 2022. The situation itself manifested in liquidity constraints, lack of financing capacities and dried real estate markets that made portfolio sales almost impossible. By coping with this situation, management decided to focus on always preserving enough liquidity as well as on net rental income as the main key performance indicators. The other financial performance indicators outlined below were not suspended but were followed with a much lower focus than usual. Consequently, we waive the explicit description of the financial performance indicators listed below.
The European Public Real Estate Association (EPRA) changed its definition of net asset value (NAV) in October 2019 and it was applied for the first time in the 2020 financial year. The key figures NAV and NNNAV have been replaced by three new figures: Net Reinstatement Value (NRV), Net Tangible Asset (NTA) and Net Disposal Value (NDV).
In addition to the new EPRA NAV metrics, we continue to show EPRA NAV based on the previous EPRA Best Practice Recommendations (BPRs).
EPRA NAV represents the fair value of net assets on an ongoing, long-term basis. Assets and liabilities that are not expected to crystallise in normal circumstances, such as the fair value of financial hedging derivatives and deferred taxes on property valuation surpluses, are therefore excluded. Similarly, trading properties are adjusted to their fair value under the EPRA NAV measure.
EPRA NAV makes adjustments to IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with a long-term investment strategy.
Adler Group has an outstanding convertible bond, which might be converted into equity at maturity. To take this fact into account, we present all the NAV metrics on a diluted basis as well, which includes the fair value of the convertible bond and the fully diluted number of shares at the corresponding reporting date.
Calculation of EPRA NAV
Total equity attributable to owners of the Company
- (+) Revaluation of inventories1)
- (–) Fair value of financial instruments2)
- (–) Deferred taxes3)
= EPRA NAV
1) Difference between inventories carried in the balance sheet at cost (IAS 2) and the fair value of inventories.
2) Fair value of financial instruments that are used for hedging purposes where the Company has the intention of keeping the hedge position until the end of the contractual duration.
3) For EPRA NAV and EPRA NRV: Deferred tax as per the IFRS balance sheet in respect of the difference between the fair value and the tax book value of investment property, development property held for investment, intangible assets, or other non-current investments. For EPRA NTA: Only deferred taxes relating to the proportion of the portfolio that is intended to be held in the long-run and not sold are excluded.
The objective of the EPRA NRV measure is to highlight the value of net assets on a long-term basis. Assets and liabilities that are not expected to crystallise in normal circumstances, such as the fair value movements on financial hedging derivatives and deferred taxes on property valuation surpluses, are therefore excluded. Since the indicator also aims at reflecting what would be needed to recreate the Company through the investment markets based on its current capital and financing structure, related costs (such as real estate transfer taxes) are included.
Calculation of EPRA NRV
Total equity attributable to owners of the Company
- (+) Revaluation of inventories1)
- (–) Fair value of financial instruments2)
- (–) Deferred taxes3)
- (+) Real estate transfer tax4)
= EPRA NRV
4) For EPRA NRV: Real Estate Transfer Tax on investment properties is the gross value as provided in the valuation certificate (i.e., the value prior to any deduction of purchasers' costs). For EPRA NTA: The Company has a history of successfully completing share deals; and there is a reasonable expectation that the Company can also do so in the future. Therefore, transfer tax optimisation adjustment has been used by applying the implied average transfer tax consistently achieved in the past.
The underlying assumption behind the EPRA Net Tangible Assets calculation assumes that entities buy and sell assets, thereby crystallising certain levels of deferred tax liability.
Calculation of EPRA NTA
Total equity attributable to owners of the Company
- (+) Revaluation of inventories1)
- (–) Fair value of financial instruments2)
- (–) Deferred taxes3)
- (–) Goodwill
- (+) Real estate transfer tax4)
= EPRA NTA
EPRA Net Disposal Value presents a scenario where deferred tax, financial instruments and certain other adjustments are calculated as to the full extent of their liability, including tax exposure not reflected in the balance sheet, net of any resulting tax. This measure should not be viewed as a "liquidation NAV" because, in many cases, fair values do not represent liquidation values.
Calculation of EPRA NDV
Total equity attributable to owners of the Company
- (+) Revaluation of inventories1)
- (–) Fair value of fixed interest rate debt5)
- (–) Goodwill
= EPRA NDV
5) The difference between the fair value of fixed interest rate debt and book value included in the balance sheet as per IFRS.
NOI (net operating income) equals total revenue from the property portfolio less all reasonably necessary operating expenses. Aside from rent, a property might also generate revenue from parking and service fees. NOI is used to track the real estate portfolio's capability of generating income.
Adj. EBITDA from rental activities is an indicator of a company's financial performance and is calculated by deducting the overhead costs from NOI. It is used as a proxy to assess the recurring earnings potential of the letting business.
Adj. EBITDA Total can be derived by adding the net profit from project development activities, the fair value gain from build-to-hold development and the net profit from privatisations to Adj. EBITDA from rental activities.
In addition, we present the NOI margin from rental activities – calculated as NOI divided by net rental income, as well as Adj. EBITDA margin from rental activities – calculated as Adj. EBITDA from rental activities divided by net rental income. These metrics are useful to analyse the operational efficiency at real estate portfolio level as well as at Company level.
Calculation of Adj. EBITDA (from rental activities)
Net rental income
- (+) Income from facility services and recharged utilities costs
- = Income from rental activities
- (–) Cost from rental activities6)
- = Net operating income (NOI) from rental activities
- (–) Overhead costs from rental activities7)
= Adj. EBITDA from rental activities
6) Cost from rental activities is the aggregate amount of (a) Salaries and other expenses related to rental activities; (b) Net cost of utilities recharged; and (c) Property operations and maintenance, excluding one-off costs. Adjustments for one-off costs include items that are of a non-periodic nature, recur irregularly, are not typical for operations, or are non-cash-effective.
7) Overhead costs from rental activities represent the "General and administrative expenses" from the profit or loss statement excluding one-off costs and depreciation and amortisation relating to rental activities. Adjustments for oneoff costs include items that are of a non-periodic nature, recur irregularly, are not typical for operations, or are non-cash-effective like impairment losses on trade receivables.
Calculation of Adj. EBITDA Total
Income from rental activities
- (+) Income from property development (+) Income from real estate inventories disposed of (+) Income from other services (+) Income from selling of trading properties = Revenue (–) Cost from rental activities6) (–) Other operational costs from development and privatisation sales8) = Net operating income (NOI) (–) Overhead costs from rental activities7) (–) Overhead costs from development and privatisation sales9) (+) Profit from portfolio sales10) (+) Fair value gain from build-to-hold development11) = Adj. EBITDA Total (–) FFO 2 net interest expenses12)
- (+/–) Other net financial costs13)
- (–) Depreciation and amortisation
- (+) Change in fair value of investment properties
- (+/–) Other expenses/income14)
- (–) Net income from at-equity valued investment15)
= EBT
8) Other operational costs from development and privatisation sales is the aggregate amount of (a) Costs of real estate inventories disposed of; (b) Costs of property development; and (c) Costs of selling of trading property (condominiums) excluding one-off costs and depreciation and amortisation. Adjustments for oneoff costs include items that are of a non-periodic nature, recur irregularly, are not typical for operations, or are non-cash-effective.
9) Overhead costs from development and privatisation sales represent the "General and administrative expenses" from the profit or loss statement excluding one-off costs and depreciation and amortisation excluding costs relating to rental activities. Adjustments for one-off costs include items that are of a non-periodic nature, recur irregularly, are not typical for operations, or are non-cash-effective.
10) Profit from portfolio sales includes the disposals of IAS 40 properties. This position compares the proceeds generated from the disposal with the last recognised book value and also deducts the related costs of this sale.
11) Our internally developed build-to-hold portfolio allows the Company to generate fair value gain.
12) FFO 2 net interest expenses is equal to "Interest on other loans and borrowings", excluding day-1 fair value non-cash adjustment and interest capitalised for development projects, plus the nominal interest expense on bonds.
13) Other net financial costs is equal to the total "Net finance costs" from the profit or loss statement less "Net cash interest" as calculated in footnote 11) above.
14) Other expenses/income relates to adjustments for one-off costs which include items that are of a non-periodic nature, recur irregularly, are not typical for operations, or are non-cash-effective.
15) Net income from at-equity valued investment from the profit and loss statement.
Starting with Adj. EBITDA from rental activities, we calculate the main performance figure in the sector, the FFO 1 (from rental activities). This KPI serves as an indicator of the sustained operational earnings power after cash interest expenses and current income taxes of our letting business.
Calculation of FFO 1 (from rental activities)
Adj. EBITDA from rental activities
(–) FFO 1 net interest expenses16)
(–) Current income taxes relating to rental activities17)
(–) Interest of minority shareholders18)
= FFO 1 (from rental activities)
16) FFO 1 net interest expenses is equal to "Interest on other loans and borrowings" relating to rental activities, excluding day-1 fair value non-cash adjustment, plus the nominal interest expense on bonds.
17) Only current income taxes relating to rental activities.
18) Interest of minority shareholders in Adler's subsidiary Brack Capital Properties N.V. ("BCP") as Adler's share is only 62.78% as at 31 December 2022.
Starting from Adj. EBITDA Total, we calculate FFO 2 (incl. disposal results and development activities). FFO 2 is used to indicate the total operational earnings power.
Calculation of FFO 2
(incl. disposal results and development activities)
Adj. EBITDA Total
- (–) FFO 2 net interest expenses12)
- (–) Current income taxes19)
- (–) Interest of minority shareholders18)
= FFO 2
(incl. disposal results and development activities)
19) Current income taxes as presented in the financial statements exclude the income tax relating to the disposal of the non-core portfolio.
EPRA has introduced a new metric, the EPRA loan-to-value (LTV) ratio which has been included in the EPRA Best Practices Recommendations (BPR) Guidelines 2022, as part of the EPRA Performance Measures which became effective in 2022.
The Adler Group LTV has been replaced by EPRA LTV and will be reported from the publication of the 2022 Annual Report onwards. EPRA LTV illustrates the relationship between net debt and total property value of a real estate company and thus evaluates the gearing of shareholder equity.
EPRA LTV calculation as well as the information taken from the Adler Group balance sheet is depicted below:
| Calculation of EPRA LTV | Group as reported |
Share of joint ventures27) |
Share of material associates27) |
Non controlling interests28) |
Total29) | |
|---|---|---|---|---|---|---|
| Borrowings from financial institutions20) | ||||||
| (+) | Commercial paper | |||||
| (+) | Hybrids21) | |||||
| (+) | Bond loans22) | |||||
| (+) | Foreign currency derivatives | |||||
| (+) | Net payables23) | |||||
| (+) | Owner-occupied property (debt) | |||||
| (+) | Current accounts (equity characteristic) | |||||
| (–) | Cash and cash equivalents | |||||
| = | Net Debt | |||||
| Owner-occupied property | ||||||
| (+) | Investment properties at fair value | |||||
| (+) | Properties held for sale24) | |||||
| (+) | Properties under development25) | |||||
| (+) | Intangibles | |||||
| (+) | Net receivables23) | |||||
| (+) | Financial assets26) | |||||
| = | Total property | |||||
| = EPRA LTV in % |
20) Including current and non-current other loans and borrowings.
21) Including convertible bonds.
22) Containing current and non-current corporate bonds.
23) Net payables are equal to payables less receivables on the IFRS balance sheet if that number is positive. Net receivables are equal to receivables less payables on the IFRS balance sheet if that number is positive. The position includes:
Investments in financial instruments
- (+) Advances related to investment properties
- (+) Restricted bank deposits
- (+) Contract assets
- (+) Trade receivables
- (+) Other receivables and financial assets
- (+) Advances paid on inventories
- (–) Other financial liabilities
- (–) Pension provisions
- (–) Other payables
- (–) Contract liabilities
- (–) Trade payables
- (–) Provisions
- (–) Prepayments received
- (–) Non-current liabilities held for sale
= Net amount
24) Incorporating inventories at fair value and non-current assets held for sale. 25) This position is included in investment properties at fair value.
26) Containing other financial assets.
27) Net debt and total property value of joint ventures and associated companies are disregarded due to immateriality reasons.
28) Non-controlling interests are only adjusted for minority shareholders in Adler's subsidiary Brack Capital Properties N.V. for reasons of materiality, thus any other minority shareholders are not considered due to their insignificancy. 29) Total column illustrates the combined values of the previous columns.
We believe that the alternative performance measures described in this section constitute the most important indicators for measuring the operating and financial performance of the Group's business.
We expect all of the above-described alternative performance measures to be useful for our investors when evaluating the Group's operating performance, the net value of the Group's property portfolio and the level of the Group's indebtedness.
Due to rounding, the figures reported in tables and cross-references may deviate from their exact values as calculated.
Profit situation
Income from rental activities and Net operating income (NOI) decreased proportionally in the first nine months of 2023, following the decrease in the number of rental units as a result from recent disposals such as the Eastern portfolio to Velero/KKR, the Waypoint portfolio and the Leipzig portfolio disposal by BCP (all in the course of 2022), as well as the disposal of the "Wasserstadt" portfolio in August 2023. The resulting decrease in rental income was only partly offset by rent increases. Overhead costs from rental activities increased due to general cost increases which resulted in a decrease of the Adj. EBITDA margin from rental activites.
The decrease in Adj. EBITDA Total was mainly due to the lower income from both property development and real estate inventory disposed of. Income from property development includes revenue recognition from forward sales and condo sales. Due to the reduced number of projects in the pipeline, associated revenues reduced compared to the previous year. Income from real estate inventory disposed of decreased vs. the prior year as 2022 entailed the sales of the development projects Ostend Quartier, LEA B, Neues Korallusviertel and Kreuzstraße. In the current period, this position includes the sale of the asset "Parkhaus am Jäger" in the amount of EUR 17.5 million.
FFO 1 and FFO 2 were both negatively impacted from the significant increase in net interest expenses due to the New Money Facility of EUR 937.5m with a PIK interest of 12.5% as well as the 2.75% PIK interest step-up on the Adler Group S.A. bonds, all having become effective in April 2023 as part of the Restructuring Opinion.
EBITDA
Adj. EBITDA from rental activities
| For the nine months ended | For the three months ended |
For the year ended |
|||
|---|---|---|---|---|---|
| In EUR thousand | 30 Sep 2023 |
30 Sep 2022 |
30 Sep 2023 |
30 Sep 2022 |
31 Dec 2022 |
| Net rental income | 159,972 | 187,477 | 52,293 | 56,690 | 244,506 |
| Income from facility services and recharged utilities costs | 77,069 | 93,840 | 27,040 | 29,198 | 124,848 |
| Income from rental activities | 237,041 | 281,317 | 79,333 | 85,888 | 369,354 |
| Cost from rental activities | (101,623) | (118,793) | (38,235) | (38,775) | (159,166) |
| Net operating income (NOI) from rental activities | 135,418 | 162,524 | 41,098 | 47,113 | 210,188 |
| NOI from rental activities margin (%) | 84.7% | 86.7% | 78.6% | 83.1% | 86.0% |
| Overhead costs from rental activities | (49,323) | (44,288) | (15,193) | (14,755) | (61,954) |
| Adj. EBITDA from rental activities | 86,095 | 118,237 | 25,906 | 32,359 | 148,235 |
| Adj. EBITDA margin from rental activities (%) | 53.8% | 63.1% | 49.5% | 57.1% | 60.6% |
160.0 million
Financial Overview
Adj. EBITDA Total
| For the nine months ended | For the three months ended |
For the year ended |
|||
|---|---|---|---|---|---|
| In EUR thousand | 30 Sep 2023 |
30 Sep 2022 |
30 Sep 2023 |
30 Sep 2022 |
31 Dec 2022 |
| Income from rental activities | 237,041 | 281,317 | 79,333 | 85,888 | 369,354 |
| Income from property development | 23,898 | 97,940 | 13,461 | 88,382 | 115,481 |
| Income from other services | 8,216 | 13,944 | 3,340 | 6,177 | 18,498 |
| Income from real estate inventory disposed of | 19,300 | 228,750 | - | 211,750 | 228,750 |
| Income from sale of trading properties | 890 | 1,994 | 435 | 699 | 2,389 |
| Revenue | 289,345 | 623,945 | 96,569 | 392,896 | 734,472 |
| Cost from rental activities | (101,623) | (118,793) | (38,235) | (38,775) | (159,166) |
| Other operational costs from development and privatisation sales | (102,922) | (357,918) | (27,208) | (303,798) | (389,593) |
| Net operating income (NOI) | 84,800 | 147,234 | 31,126 | 50,323 | 185,713 |
| Overhead costs from rental activities | (49,323) | (44,288) | (15,193) | (14,755) | (61,954) |
| Overhead costs from development and privatisation sales | (15,756) | (23,613) | 181 | (7,974) | (28,679) |
| Adj. EBITDA Total | 19,721 | 79,334 | 16,114 | 27,594 | 95,080 |
| FFO 2 net interest expenses | (180,405) | (63,600) | (76,757) | (18,144) | (83,281) |
| Other net financial costs | (194,697) | (383,313) | (15,362) | (8,481) | (452,049) |
| Depreciation and amortisation | (12,321) | (17,415) | (6,854) | (5,101) | (20,288) |
| Other income/(expenses) | (223,201) | (170,912) | (43,570) | 23,885 | (584,990) |
| Change in valuation | (755,004) | (369,704) | (13,433) | (222,256) | (761,851) |
| Net income from at-equity valued investments | (2,650) | 443 | (1,697) | (95) | 208 |
| EBT | (1,348,557) | (925,167) | (141,559) | (202,597) | (1,807,171) |
FFO
FFO 1 (from rental activities)
| FFO 1 per share | (0.05) | 0.58 | (0.10) | 0.17 | 0.74 |
|---|---|---|---|---|---|
| No. of shares(*) | 137,453 | 117,510 | 151,626 | 117,510 | 117,510 |
| FFO 1 (from rental activities) | (6,592) | 67,968 | (14,792) | 18,062 | 86,779 |
| Interest of minority shareholders | (4,831) | (7,295) | (1,565) | (2,418) | (9,732) |
| Current income taxes | (9,004) | (5,978) | (3,836) | (1,840) | (5,004) |
| FFO 1 net interest expenses | (78,852) | (36,996) | (35,297) | (10,039) | (46,720) |
| Adj. EBITDA from rental activities | 86,095 | 118,237 | 25,906 | 32,359 | 148,235 |
| In EUR thousand | 30 Sep 2023 |
30 Sep 2022 |
30 Sep 2023 |
30 Sep 2022 |
31 Dec 2022 |
| For the nine months ended | For the three months ended |
For the year ended |
(*) The number of shares is calculated as weighted average for the related period.
FFO 2 (incl. disposal results and development activities)
| For the nine months ended | For the three months ended |
For the year ended |
|||
|---|---|---|---|---|---|
| In EUR thousand | 30 Sep 2023 |
30 Sep 2022 |
30 Sep 2023 |
30 Sep 2022 |
31 Dec 2022 |
| Adj. EBITDA Total | 19,721 | 79,334 | 16,114 | 27,594 | 95,080 |
| FFO 2 net interest expenses | (180,405) | (63,600) | (76,757) | (18,144) | (83,281) |
| Current income taxes | (9,698) | (9,676) | (2,040) | (3,152) | (17,873) |
| Interest of minority shareholders | (4,831) | (7,295) | (1,565) | (2,418) | (9,732) |
| FFO 2 | (175,213) | (1,237) | (64,249) | 3,880 | (15,806) |
| No. of shares(*) | 137,453 | 117,510 | 151,626 | 117,510 | 117,510 |
| FFO 2 per share | (1.27) | (0.01) | (0.42) | 0.03 | (0.13) |
(*) The number of shares is calculated as weighted average for the related period.
Financial and asset position
The decrease in Investment properties was due to the revaluation of yielding assets (c. EUR -0.4 billion) and development assets (c. EUR -0.2 billion) both taken into account in H1 2023, and the disposal of the "Wasserstadt" portfolio and other yielding assets (c. EUR -0.4 billion) in Q3 2023. Other non-current assets include other financial assets of EUR 149 million (mainly comprising loans against non-controlling shareholders of subsidiaries), as well as restricted bank deposits of EUR 40 million. Inventories primarily include land from forward and upfront sales. Other current assets include other receivables (EUR 139 million), restricted bank deposits (EUR 65 million), trade receivables (EUR 64 million) and contract assets (EUR 54 million). Non-current assets held for sale mainly relate to BCP. Per September 2023, assets of BCP decreased in the course of its asset revaluation in H1 2023, asset disposals as well as the loan repayment of EUR 75 million to Adler RE. Interest-bearing debts does not contain debts held at BCP level, as they are shown separately as liabilities held for sale. Other liabilities include other current payables (EUR 266 million) with the majority referring to income tax payables, other long-term financial liabilities (EUR 123 million) incl. accrued interest of EUR 109 million, provisions (EUR 91 million) and trade payables (EUR 84 million). Deferred tax liabilities decreased following the negative results from the revaluation of the real estate assets in June 2023. The Group's total equity decreased in the amount of the negative net result of EUR 1,226 million for the reporting period, negative other comprehensive income of EUR 30 million and other transactions recognised directly in equity of EUR -14 million, as shown in the Condensed Consolidated Interim Statement of Changes in Equity.
As at 30 September 2023, the total interest-bearing nominal debt amounted to around EUR 6,521 million. As at Q3 2023, the average interest rate on all outstanding debt is 5.7%, with a weighted average maturity of 2.9 years.
| 30 Sep 2023 | 31 Dec 2022 |
|---|---|
| 5,374,250 | 6,344,294 |
| 306,164 | 324,913 |
| 5,680,414 | 6,669,207 |
| 431,727 | 386,985 |
| 621,462 | 678,572 |
| 336,084 | 325,758 |
| 1,389,273 | 1,391,315 |
| 1,348,767 | 1,648,991 |
| 8,418,454 | 9,709,513 |
| 6,118,749 | 5,980,366 |
| 670,537 | 611,821 |
| 379,406 | 525,715 |
| 607,073 | 678,548 |
| 7,775,765 | 7,796,450 |
| 238,069 | 1,417,112 |
| 404,620 | 495,951 |
| 642,689 | 1,913,063 |
| 8,418,454 | 9,709,513 |
In the tables below we present the new EPRA key figures as presented in the new EPRA BPRs and compare them with the previous EPRA NAV definition.
EPRA NAVs
| In EUR thousand | NAV | NRV | NTA | NDV |
|---|---|---|---|---|
| Total equity attributable to owners of the Company | 238,069 | 238,069 | 238,069 | 238,069 |
| Revaluation of inventories | (4,162) | (4,162) | (4,162) | (4,162) |
| Deferred tax | 497,004 | 497,004 | 497,004 | - |
| Goodwill | - | - | - | - |
| Fair value of financial instruments | 2,177 | 2,177 | 2,177 | - |
| Fair value of fixed interest rate debt | - | - | - | 1,694,432 |
| Real estate transfer tax | - | 465,997 | 369,871 | - |
| EPRA NAV | 733,088 | 1,199,084 | 1,102,959 | 1,928,339 |
| No. of shares | 151,626 | 151,626 | 151,626 | 151,626 |
| EPRA NAV per share | 4.83 | 7.91 | 7.27 | 12.72 |
| Convertibles | 101,689 | 101,689 | 101,689 | 101,689 |
| EPRA NAV fully diluted | 834,777 | 1,300,774 | 1,204,648 | 2,030,028 |
| No. of shares (diluted) | 152,810 | 152,810 | 152,810 | 152,810 |
| EPRA NAV per share fully diluted | 5.46 | 8.51 | 7.88 | 13.28 |
(*) Adjusted for BCP IFRS 5 illustration which has been disregarded; the corresponding line items have been reversed into respective balance sheet positions.
| 31 Dec 2022(*) | ||||
|---|---|---|---|---|
| In EUR thousand | NAV | NRV | NTA | NDV |
| Total equity attributable to owners of the Company | 1,417,112 | 1,417,112 | 1,417,112 | 1,417,112 |
| Revaluation of inventories | (2,260) | (2,260) | (2,260) | (2,260) |
| Deferred tax | 597,505 | 597,505 | 597,505 | - |
| Goodwill | - | - | - | - |
| Fair value of financial instruments | 806 | 806 | 806 | - |
| Fair value of fixed interest rate debt | - | - | - | 1,698,375 |
| Real estate transfer tax | - | 527,630 | 426,948 | - |
| EPRA NAV | 2,013,163 | 2,540,793 | 2,440,111 | 3,113,227 |
| No. of shares | 117,510 | 117,510 | 117,510 | 117,510 |
| EPRA NAV per share | 17.13 | 21.62 | 20.77 | 26.49 |
| Convertibles | 100,503 | 100,503 | 100,503 | 100,503 |
| EPRA NAV fully diluted | 2,113,666 | 2,641,296 | 2,540,614 | 3,213,730 |
| No. of shares (diluted) | 118,694 | 118,694 | 118,694 | 118,694 |
| EPRA NAV per share fully diluted | 17.81 | 22.25 | 21.40 | 27.08 |
(*) Adjusted for BCP IFRS 5 illustration which has been disregarded; the corresponding line items have been reversed into respective balance sheet positions.
Adler Group Q3 2023 Quarterly Financial Statements 25
30 Sep 2023(*)
EPRA loan-to-value
The table below shows the loan-to-value (LTV) according to the latest definition by EPRA.
| EPRA loan-to-value | 86.7% | 52.0% | 89.1% |
|---|---|---|---|
| Total property value | 7,495,804 | (480,848) | 7,014,955 |
| Financial assets | 149,427 | 149,427 | |
| Net receivables | |||
| Intangibles | |||
| Properties under development | |||
| Properties held for sale(**) | 1,966,067 | (480,848) | 1,485,218 |
| Investment properties at fair value | 5,374,250 | 5,374,250 | |
| Owner-occupied property(*) | 6,060 | 6,060 | |
| Net financial liabilities | 6,499,182 | (250,094) | 6,249,088 |
| Cash and cash equivalents | (431,727) | (431,727) | |
| Current accounts (equity characteristics) | |||
| Owner-occupied property (debt) | |||
| Net payables | 812,160 | (250,094) | 562,066 |
| Foreign currency derivatives | |||
| Bond loans | 3,613,429 | 3,613,429 | |
| Hybrids | 101,689 | 101,689 | |
| Commercial paper | |||
| Borrowings from financial institutions | 2,403,631 | 2,403,631 | |
| In EUR thousand | Group loan-to-value | Non-controlling interests(***) |
Total |
| 30 Sep 2023 |
(*) The balance sheet position property, plant and equipment contains owner-occupied property in the amount of EUR 6,060 thousand.
(**) Considers inventories at fair value (EUR 617,300 thousand) as well as non-current assets held for sale.
(***) Considers the interest of minority shareholders in ADLER's subsidiary Brack Capital Properties N.V. ("BCP").
| In EUR thousand | Group loan-to-value | Non-controlling interests(***) |
Total |
|---|---|---|---|
| Borrowings from financial institutions | 1,645,817 | 1,645,817 | |
| Commercial paper | - | ||
| Hybrids | 100,503 | 100,503 | |
| Bond loans | 4,234,046 | 4,234,046 | |
| Foreign currency derivatives | |||
| Net payables | 867,711 | (304,289) | 563,422 |
| Owner-occupied property (debt) | |||
| Current accounts (equity characteristics) | |||
| Cash and cash equivalents | (386,985) | (386,985) | |
| Net financial liabilities | 6,461,092 | (304,289) | 6,156,803 |
| Owner-occupied property(*) | 6,107 | 6,107 | |
| Investment properties at fair value | 6,344,294 | 6,344,294 | |
| Properties held for sale(**) | 2,325,303 | (580,144) | 1,745,159 |
| Properties under development | |||
| Intangibles | |||
| Net receivables | |||
| Financial assets | 168,961 | 168,961 | |
| Total property value | 8,844,665 | (580,144) | 8,264,521 |
| EPRA loan-to-value | 73.1% | 52.5% | 74.5% |
| (*) The balance sheet position property, plant and equipment contains owner-occupied |
property in the amount of EUR 6,107 thousand.
(**) Considers inventories at fair value (EUR 676,312 thousand) as well as non-current assets held for sale.
(***) Considers the interest of minority shareholders in ADLER's subsidiary Brack Capital Properties N.V. ("BCP").
EPRA LTV
89.1%
The table below shows the breakdown of net payables as included in the EPRA LTV calculation presented above. For the detailed methodology of the EPRA LTV calculation, please also refer to the section 'Fundamentals of the Group'.
Net payables
| In EUR thousand | 30 Sep 2023 | 31 Dec 2022 |
|---|---|---|
| Investments in financial instruments | 19,231 | 19,234 |
| Advances related to investment properties | 0 | 0 |
| Restricted bank deposits | 104,790 | 77,885 |
| Contract assets | 87,529 | 86,862 |
| Trade receivables | 69,269 | 95,672 |
| Other receivables and financial assets | 138,574 | 118,853 |
| Advances paid on inventories | 9,544 | 9,194 |
| Deduct: | ||
| Other financial liabilities | (124,442) | (16,029) |
| Pension provisions | (720) | (719) |
| Other payables | (265,759) | (341,504) |
| Contract liabilities | (18,950) | (13,924) |
| Trade payables | (84,433) | (78,242) |
| Provisions | (91,193) | (75,580) |
| Prepayments received | (48,527) | (70,865) |
| Non-current liabilities held for sale | (607,073) | (678,548) |
| Net payables | (812,160) | (867,711) |
Material Events
In the reporting period
1. On 9 January 2023, the local court of Berlin-Charlottenburg appointed KPMG AG Wirtschaftsprüfungsgesellschaft as auditor of ADLER Real Estate AG ("Adler RE"). The judicial appointment required the acceptance of the audit mandate by the auditor, which KPMG AG Wirtschaftsprüfungsgesellschaft rejected on 11 January 2023. As of the date hereof, Adler Group did not have an auditor and continued its intensive efforts to engage an auditor. On 24 April 2023, Adler RE announced that Rödl & Partner had agreed to accept an appointment as auditor for the audit of the standalone and the consolidated financial statements of Adler RE for the financial year 2022.
2. On 11 January 2023, AGPS BondCo PLC (the "New Issuer") was substituted in place of Adler Group as issuer of its six series of senior unsecured notes ("SUNs") (the "Issuer Substitution"). In connection with the Issuer Substitution, Adler Group provided irrevocable and unconditional guarantees in relation to the obligations and liabilities under the SUNs, including (but not limited to) payment of the principal of, and interest on, the SUNs. On 24 February 2023, a holder of the SUNs, Plan.e.Anleihe GmbH, commenced proceedings in the Frankfurt Regional Court against Adler Group seeking a declaration that the Issuer Substitution was invalid and unenforceable. Adler Group opposes the relief sought on the grounds that the Issuer Substitution was effected in accordance with the terms and conditions governing each series of SUNs (the "Terms and Conditions"), and is and continues to be valid as a matter of German law and will vigorously defend against such declaration in any such proceedings. The proceedings are ongoing.
3. On 16 February 2023, the New Issuer completed the downlisting of its EUR 400,000,000 1.500% unsecured notes due 2024 ("2024 Notes"), which were admitted to trading on the regulated Market of Luxembourg Stock Exchange, on the Euro MTF. The purpose of the downlisting was to harmonise the 2024 Notes with the other five series of SUNs.
4. On 23 February 2023, BNP Paribas, as principal paying agent, received notices of termination under the Terms and Conditions from certain holders of SUNs (representing approximately 6% of the aggregate principal amount of the SUNs). Such notices were rejected by the New Issuer for procedural deficiencies. On 10 March 2023, the notices of termination were resubmitted. The New Issuer rejected one resubmitted notice for procedural deficiencies and rejected all resubmitted notices on the basis that no valid grounds for such termination exist and therefore considered the purported declarations to be invalid. On 24 March 2023, BNP Paribas again received resubmitted termination notices, which were similarly rejected by the New Issuer on the basis that no valid grounds for such termination exist and that the noteholders of the respective notes were not entitled to terminate the notes due to the presence of an ongoing Restructuring Plan proceeding.
5. On 28 February 2023, S&P downgraded the issuer rating of Adler RE from CCC- to CC with outlook negative. Adler Real Estate's EUR 300,000,000 3.000% senior unsecured notes due 27 April 2026 ("Adler RE 2026 SUNs") were also downgraded from CCC- to CC. The CCC- rating on EUR 500,000,000 1.875% senior unsecured notes due 27 April 2023 ("Adler RE 2023 SUNs") and on Adler Real Estate's 2.125% EUR 300,000,000 notes due 2024 ("Adler Re 2024 SUNs") was affirmed.
6. On 17 March 2023, the Group sent a request to Adler RE to squeeze-out the remaining minority shareholders of Adler RE. Subsequently on the same date, the Group and Adler RE published an ad-hoc notification disclosing the EUR 8.76 per share cash compensation to be paid to the squeezed-out minority Adler RE shareholders.
7. On 21 March 2023, meetings of holders of the SUNs (the "Plan Meetings") were held to consider and vote on the Group's proposed Restructuring Plan (the "Restructuring Plan"), which aimed to facilitate a successful implementation of amendments to the SUNs and complete the wider financial restructuring of the Group (the "Restructuring"), and in doing so help resolve the financial difficulties faced by the Group. Subsequently on 21 March 2023, the Group announced the voting results of the Plan Meetings, noting a strong level of support for the Restructuring Plan and, more broadly, the Group's comprehensive Restructuring proposal.
8. On 31 March 2023, Adler RE signed a comfort letter ("Comfort Letter") in relation to the intra-group loan agreement dated 23 May 2022 on the granting of a loan in an amount of up to EUR 200,000,000 to its subsidiary, Brack Capital Properties N.V. ("BCP"). Pursuant to the Comfort Letter, Adler RE undertook to prolong the maturity of part of the loans granted under the intra-group loan agreement in an amount of EUR 70,000,000 ("Prolonged Loans") by six months until 30 June 2024 if certain conditions are met. These conditions require, among others, that the Prolonged Loans have been secured by collateral provided by BCP in favour of Adler RE. BCP will provide market standard collateral as consideration for the Prolonged Loans, and the interest rate for the Prolonged Loans will be increased with effect from the original maturity date to 3-month-Euribor plus a margin reflecting the then prevailing market conditions (provided that such margin shall be no lower than 200 basis points). The remaining EUR 130,000,000 part of the loans will maintain the original maturity date of 29 December 2023.
9. On 12 April 2023, the High Court of Justice of England and Wales (the "High Court") made an order sanctioning the Restructuring Plan (the "Sanction Order") with the final judgement published on 21 April 2023 (the "Judgement"). At the hearing of the High Court's decision to sanction the Restructuring Plan on 12 April 2023, the ad hoc group of noteholders (the "AHG") opposing the Restructuring Plan stated that it would seek permission to appeal. The New Issuer opposed this application. On 25 April 2023 the High Court declined to grant AHG the permission to appeal. On 16 May 2023, the AHG filed an application with the Court of Appeal for permission to appeal and requested that the application for permission to appeal and the substantive hearing of the appeal be dealt with by the Court of Appeal on an expedited basis. The Group has made submissions to the Court of Appeal opposing the AHG's request for expedition and intends to oppose the AHG's application for permission to appeal (as well as its appeal, if permission is granted).
10. On 13 April 2023, the Group announced completion of the Restructuring Plan. Pursuant to the Restructuring Plan, on 17 April 2023, the SUNs were amended in accordance with the amended Terms and Conditions governing each series of SUNs, which included, among other changes:
- 10.1 2.75% coupons increase until 31 July 2025; after which time, the coupons revert to their respective prior levels;
- 10.2 extension of the maturity date of the 2024 Notes from 26 July 2024 until 31 July 2025;
- 10.3 amendments restricting the incurrence of certain indebtedness by the Group, subject to certain carveouts such as allowing the Group to incur the New Money Funding (as defined below) and refinance certain existing indebtedness;
- 10.4 amendments to the reporting covenants that temporarily alleviate the reporting obligations placed on the Group; and
- 10.5 amendments to certain other restrictive covenants to support the new capital structure and liquidity position of the Group.
| EUR 400,000,000 1.500% unse cured notes due 2024 |
EUR 400,000,000 3.250% unse cured notes due 2025 |
EUR 700,000,000 1.875% unse cured notes due 2026 |
EUR 400,000,000 2.750% unse cured notes due 2026 |
EUR 500,000,000 2.250% unse cured notes due 2027 |
EUR 800,000,000 2.250% unse cured notes due 2029 |
|
|---|---|---|---|---|---|---|
| Maturity | 31 July 2025 | As initially scheduled (5 Aug 2025) |
As initially scheduled (14 Jan 2026) |
As initially scheduled (13 Nov 2026) |
As initially scheduled (27 Apr 2027) |
As initially scheduled (14 Jan 2029) |
| Interest from 13 April 2023 to 31 July 2025 |
4.250% | 6.000% | 4.625% | 5.500% | 5.000% | 5.000% |
| Interest after 31 July 2025 |
past maturity date | 3.250% | 1.875% | 2.750% | 2.250% | 2.250% |
| Reporting covenant amendments |
The audited year-end financials for the years ending on 31 December 2022 and 31 December 2023 each to be delivered by 30 September 2024 |
|||||
| Financial maintenance covenant |
A maintenance loan-to-value ratio ("Maintenance LTV Ratio") covenant that will require the Maintenance LTV Ratio to not exceed 87.5% on each maintenance reporting date (first cove nant testing date 31 December 2024) |
A Maintenance LTV Ratio covenant that will require the Maintenance LTV Ratio to not exceed 87.5% on each maintenance reporting date on and prior to 31 Decem ber 2025, and 85% thereafter (first covenant testing date 31 December 2024) |
||||
| Limitations on incurrence of debt |
The incurrence of debt other than the New Money Facilities (as defined below), certain refinancing indebtedness, and a general basket indebtedness of up to EUR 150,000,000 will not be permitted |
The key amendments are summarised in the table below:
11. On 13 April 2023, Adler Group completed a reorganisation of the Group's corporate structure. Following the completion of the reorganisation (i) Adler Group became the sole shareholder of the newly incorporated Luxembourg entity Adler Group Intermediate Holding S.à r.l. ("Adler Group Intermediate Holding"), which became the sole shareholder of three newly incorporated Luxembourg entities (collectively, the "Collateral LuxCos") and (ii) all shares in Adler RE, Consus Real Estate AG ("Consus") and certain other subsidiaries, which were previously directly or indirectly held by Adler Group (except for the New Issuer and for a certain number of the shares in such subsidiaries, which continue to be held by Adler Group), were transferred to the Collateral LuxCos.
12. On 17 April 2023, S&P downgraded the issuer ratings of both Adler Group and Adler RE from CC to SD (selective default). The rating of the unsecured debt for both Adler Group and Adler RE was lowered from CC to D (default). The ratings on Adler RE 2023 SUNs and Adler RE 2024 SUNs unsecured debt was affirmed at CCC-. S&P stated that it will reassess its ratings on Adler Group and Adler RE after the Restructuring is implemented.
13. In accordance with the Restructuring Plan, the Restructuring and related committed funding of up to EUR 937,474,000 (the "New Money Funding"), a special purpose vehicle established for the sole purpose of the Restructuring ("LendingCo") issued EUR 937,474,000 12.500% notes due 30 June 2025 (the "New Money Notes") and subsequently LendingCo lent the New Money Notes proceeds to the Group via loan facilities (the "New Money Facilities") under a facilities agreement dated 22 April 2023 (the "New Money Facilities Agreement"):
13.1 EUR 322,474,000 term loan facility with Adler Group, with proceeds funding (i) the repayment of the existing upstream loan from Adler RE and (ii) the payment of fee incurred in relation to the New Money Funding;
- 13.2 EUR 235,000,000 term loan facility ("Facility ARE") with Adler Group, with proceeds funding a noninterest bearing shareholder loan to Adler RE to fund repayment of the Adler RE 2023 SUNs in full on its maturity date (27 April 2023). The non-interest bearing shareholder loan to Adler RE was entered into on 27 April 2023;
- 13.3 Up to EUR 80,000,000 term loan facility with Consus subsidiaries, with proceeds funding certain capital expenditures; and
- 13.4 EUR 300,000,000 term loan facility ("Facility 2024") with Adler Group, to fund a non-interest bearing shareholder loan to Adler RE to, in turn, fund the repurchase and/or repayment of the Adler RE 2024 SUNs.
14. Further to the public announcement issued by the Group on 23 February 2023 relating to results of ADLER Real Estate consent solicitations, the terms and conditions of the Adler RE 2024 SUNs and the Adler RE 2026 SUNs were amended. The amendments allow ADLER Real Estate to provide liens over its assets to secure the Adler RE 2024 SUNs, the Adler RE 2026 SUNs, Facility ARE, Facility 2024 and the payment-in-kind interest related to Facility ARE and Facility 2024.
15. Certain members of the Group provided guarantees and transaction security in favour of Global Loan Agency Services GmbH, as security agent, to secure the claims under the New Money Facilities. In addition, two intercreditor agreements were executed on 22 April 2023 to govern the enforcement of collateral and the waterfall for the distribution of enforcement proceeds amongst the different classes of Group creditors.
16. On 24 April 2023, Adler Group increased its share capital by EUR 42,303.68 from EUR 145,712.69 to EUR 188,016.37 by issuing 34,115,874 new shares from the authorised capital. The new shares were delivered to the New Money Investors.
17. On 27 April 2023, the Adler RE bond 2018/2023 with a nominal outstanding amount of EUR 500 million was repaid.
18. On 27 April 2023, S&P upgraded the issuer ratings of both Adler Group and Adler RE from SD to CCC+ with outlook negative. Furthermore, the issue rating on the Adler Group bond which had been extended from 2024 to 2025 and the two Adler RE AG bonds due in 2024 and 2026 were upgraded to CCC+. The rating of the remaining Adler Group bonds was raised to CCC-. The New Money Funding note was assigned a rating of B.
19. On 28 April 2023, the general meeting of Adler RE resolved on the squeeze out. However, the decision has not yet been implemented because actions for rescission and nullity are still pending at the competent regional court in Berlin.
20. On 9 May 2023, Adler RE announced a tender offer and consent solicitation in respect of its outstanding EUR 300,000,000 2.125% notes due 2024. The consent solicitation shall eliminate certain restrictive covenants and other provisions of the indenture of the bond in their entirety as well as almost all Events of Default (as defined in the indenture). By 7 June 2023, 98.86% of the outstanding notes have been validly tendered.
21. On 24 May 2023, BCP engaged with a German bank in an agreement, according to which it will extend a loan of approximately EUR 95 million by another three years.
22. On 1 June 2023, Adler Group announced the extension of its Senior Management as part of the implementation of the Restructuring Plan. With effect from 19 June 2023, Hubertus Kobe was appointed as Chief Restructuring Officer (CRO) thereby joining the Senior Management of Adler Group. The responsibilities of the newly created CRO position will primarily include overseeing the restructuring of Adler Group in accordance with the approved Restructuring Plan. Also, the employment contract of Chief Executive Officer (CEO) Thierry Beaudemoulin was renewed.
23. On 21 June 2023, the annual General Meeting (AGM) was held. All proposed resolutions were adopted with large majorities up to 100%. Thomas Echelmeyer was appointed to become Director and member of the Board of Directors in addition to his current role as CFO. The annual General Meeting also approved the appointment of both Dr. Heiner Arnoldi and Stefan Brendgen as members of the Board of Directors. Prof. Dr. A. Stefan Kirsten, Thierry Beaudemoulin, Thilo Schmid and Thomas Zinnöcker remain members of the Board of Directors. The Group's Board of Directors thus consists of seven individuals, five of them independent, with extensive expertise in corporate governance, real estate, finance, restructuring and capital markets.
24. On 21 June 2023, the extraordinary General Meeting (EGM) approved continuing the Company.
25. On 28 June, 2023, investigators from the Frankfurt Public Prosecutor's Office and the Federal Criminal Police Office seized business records at Adler Group premises. The court-ordered investigations took place against the background of business transactions of ADLER Real Estate AG in 2019 extending into 2020. The business transactions in question relate to the "Gerresheim" project and the relevant accounting as well as payments under two consulting agreements with one of the defendants. The investigations are expressly not directed against the members of the Board of Directors of the Adler Group. The Adler Group is cooperating with the authorities and fully supports the facts being clarified as quickly as possible.
26. On June 29, 2023, the Board of Directors expressed its full confidence in and support for Senior Management member Sven-Christian Frank. Previously, Sven-Christian Frank had asked to be temporarily released from his duties and responsibilities in connection with the investigations by the public prosecutor's office in which he is listed as an accused. The Board of Directors did not comply with this request.
27. On 3 July 2023, ADLER Real Estate AG agreed with its parent company Adler Group to grant it a loan of up to EUR 75 million and a term until 30 June 2025 with interest at market rates.
28. On 9 August 2023, BCP completed an exchange tender offer for its bonds (Series B), as part of which BCP repaid EUR 97,132 thousands (ILS 390,324,629) par value of bonds (Series B) in consideration for EUR 53,180 thousands (ILS 213,702,734) par value of bonds (Series C) and EUR 53,385 thousands (ILS 222,563,103) in cash.
29. On 29 August 2023, Adler Group announced that its affiliate Adler RE will receive an early repayment of an intracompany loan from its subsidiary BCP in a partial amount of EUR 75 million by 31 August 2023. The early repayment is part of an original intercompany loan facility of EUR 200 million from which EUR 150 million had been drawn. Beside the early repayment of EUR 75 million, another EUR 75 million of the drawn credit will be prolonged until 29 December 2024. The remaining undrawn credit line of EUR 50 million will be terminated.
30. On 5 September 2023, Adler Group announced the completion of the sale of the Staytion - Forum Pankow development project in Berlin. Adler Group's subsidiary Consus sold its shares in the joint venture to its JV partner Kondor Wessels. The transaction, which was completed in August, generated proceeds of approximately EUR 36 million for the Adler Group. The transaction contributes to the stated goal of further deleveraging the Group in 2023 and beyond.
31. On 8 September 2023, Adler Group announced the notarisation of the sale of the so called "Mannheim No.1" development portfolio located in Mannheim. Closing of the transaction took place in October 2023. Consus, a subsidiary of Adler Group, sold its respective assets to FONDSGRUND Investment, an investment and asset management company based in Hamburg. The Mannheim No. 1 building is adjacent to the main railway system and combines predominately commercial units with some residential units. The recently developed project consists of a lettable area of around 19 thousand sqm. The transaction generates net proceeds of approximately EUR 70 million for Adler Group. The selling price reflects a discount of around 10% to the valuation (GAV) of the portfolio as of 30 June 2023. The transaction contributes to the stated goal of further deleveraging the Group in 2023 and beyond.
32. On 11 September 2023, Adler Group announced the completion of the sale of the so called "Wasserstadt" rental portfolio located in Berlin. Adler RE, a subsidiary of Adler Group, sold its shares to a real estate investor advised by Quantum. The Wasserstadt portfolio is located in Berlin-Mitte and consists of a lettable area of around 47 thousand sqm. The portfolio was completed in 2019 after a construction period of around two years. It is mainly for residential use and encompasses around 700 flats including more than 200 co-living spaces. The portfolios "Wasserstadt Tankstelle" and "Wasserstadt Kornversuchsspeicher" do not belong to the sold portfolio and will be marketed separately. The transaction generated net proceeds of approximately EUR 130 million for Adler Group. The selling price was broadly in line with the valuation (GAV) of the portfolio as of 30 June 2023, resulting in a discount of about 0.7%. The transaction contributes to the stated goal of further deleveraging the Group in 2023 and beyond. The sale of Wasserstadt has been one of the largest transactions in the European real estate market in 2023, demonstrating Adler Group's ability to close significant deals in a challenging environment.
Subsequent events
The Group evaluated transactions or other events in the financial statements that ocurred between the reporting date 30 September 2023 and 27 November 2023 (the date of finalisation of the condensed interim financial statements), and classifies the following as subsequent events.
1. On 29 September 2023, Adler Group S.A. successfully placed EUR 191,000,000 senior secured notes due 31 July 2025 (the "New Notes"). The New Notes will be issued at 100% of their nominal value and accrue an annual PIKamount of 21%. The New Notes are secured in ranking after the relevant asset level financings and the Company's financing obtained in connection with the restructuring under the Company's existing intercreditor agreement (i.e., secured on a "1.5 Lien" basis). The net proceeds from the issuance of the New Notes will be used to repay the Company's outstanding EUR 165,000,000 senior secured convertible notes due 23 November 2023 (the "Convertible Notes") and certain promissory notes (Schuldscheine) issued by ADO Lux Finance S.à r.l. and guaranteed by the Company. The Company intends for the New Notes to be quoted on the Open Market (Freiverkehr) of the Frankfurt Stock Exchange. The issuance closed on 9 October 2023.
2. On 9 October 2023, Adler Group announced the results of the tender offer launched on 29 August 2023 (the "Tender Offer") to repurchase its outstanding EUR 165,000,000 senior secured Convertible Notes due 23 November 2023. The total tendered (and not validly withdrawn) amount under the Tender Offer is EUR 69,500,000 (representing 42.12% of the nominal amount outstanding). The Company accepts the full tendered amount for a purchase price of EUR 97,000 per EUR 100,000 principal amount plus accrued interest. The Tender Offer was settled on 12 October 2023. The Tender Offer will be financed with the net proceeds from the placement of new EUR 191,000,000 senior secured notes due 31 July 2025, which closed on 9 October 2023.
3. On 16 October 2023, Adler Group announced that it had successfully completed its search for an auditor for the financial years 2022 and 2023. The Board of Directors of Adler Group received a declaration of acceptance of a corresponding engagement from AVEGA Revision S.à r.l. ("AVEGA") and set in motion the convening of a General Meeting (GM) for the appointment of the auditor, which took place on 27 November 2023. A resolution was passed at the general meeting, that AVEGA will be responsible for the audit of the annual and consolidated financial statements of Adler Group for the financial years 2022 and 2023. Three other auditing firms will be responsible for the audit of the sub-areas relevant to the Group ("component audit"): Rödl & Partner had already been appointed by the court to audit the 2022 annual and consolidated financial statements of Adler RE. Morison Köln AG was commissioned with the sub-area audit of the subgroup Consus Real Estate AG. DOMUS Steuerberatungs-AG Wirtschaftsprüfungsgesellschaft will audit the individual financial statements of the German property companies of Adler Group.
4. On 19 October 2023, Adler Group announced that the competent local court in Berlin entered the resolution on the transfer of the shares of the remaining minority shareholders of Adler RE to Adler Group as the majority shareholder in the commercial register. The corresponding resolution of the annual General Meeting of Adler RE of 28 April 2023 thus became effective. The entry was made possible after the competent Superior Court in Berlin determined in a release procedure ("Freigabeverfahren") that the pending actions for avoidance do not prevent the entry. The minority shareholders are entitled to an appropriate cash compensation for the transfer of their shares, which was set at EUR 8.76 per share of Adler RE which was resolved upon by the Annual General Meeting. The cash compensation has been paid out in exchange for the shares being derecognised. On 2 November 2023, Adler RE was delisted from the regulated market (Prime and General Standard).
Additional information can be found on the Adler Group website: https://www.adler-group.com/en/investors/ publications/news
Forecast Report
Forecast for 2023
The current political and economic environment, including the price increases in construction and energy costs, the rising interest rates and the negative development of the real estate market as well as of the general economy are affecting Adler Group's performance, especially the performance of its development business. Therefore, Adler Group stated in its annual financial statements 2022 that it intends to dispose actively of selected portfolios and development projects and to focus on a Berlinanchored yielding portfolio with limited development exposure. All projects, which will not be completed in the short-term (until 2025) and delivered as forward sale or condominium projects, have been classified as upfront sales.
Following significant disposals made from the yielding asset portfolio already in 2021 and 2022, Adler Group expects to generate net rental income for 2023 in the range of EUR 207-219 million.
Following the sanctioning of the Restructuring Plan, the Company refrained from announcing an FFO 1 guidance for the year 2023 due to the current situation of the Group which is primarily focused on steering its liquidity situation and de-leveraging through asset and portfolio disposals.
Adler Group successfully addressed its 2023 refinancing requirements and accumulated a cash position of EUR 432 million to continue with its plan in 2024. From today's perspective, Senior Management does not see above all certain financial and financing risks and Company-specific as well as governance risks that could jeopardize mid-term the continuation of the Adler Group as a going concern in terms of its results of operations and/or net assets.
Responsibility Statement
We confirm, to the best of our knowledge, that the Condensed Interim Financial Statements of Adler Group S.A. presented in this Q3 2023 Quarterly Financial Statements, prepared in conformity with the International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union, give a true and fair view of the net assets, financial and earnings position of the Company, and that the Interim Management Report includes a fair review of the development of the business, and describes the main opportunities, risks and uncertainties associated with the Company for the remaining three months of the year.
Thierry Beaudemoulin CEO
Thomas Echelmeyer CFO
Condensed Consolidated Interim Financial Statements
Condensed Consolidated Interim Financial Statements
- 42 Condensed Consolidated Interim Statement of Financial Position
- Condensed Consolidated Interim Statement of Profit or Loss
- Condensed Consolidated Interim Statement of Comprehensive Income
- Condensed Consolidated Interim Statement of Cash Flows
- Condensed Consolidated Interim Statement of Changes in Equity
Condensed Consolidated Interim Statement of Financial Position
| In EUR thousand | 30 Sep 2023 | 31 Dec 2022 |
|---|---|---|
| Assets | ||
| Non-current assets | ||
| Investment properties | 5,374,250 | 6,344,294 |
| Investments in financial instruments | 19,231 | 19,234 |
| Investments accounted under the equity method | 2,062 | 25,530 |
| Property, plant and equipment | 19,716 | 24,981 |
| Other financial assets | 149,427 | 168,961 |
| Derivatives | 8,201 | 8,053 |
| Restricted bank deposits | 39,974 | 40,621 |
| Right-of-use assets | 34,043 | 12,234 |
| Other intangible assets | 302 | 646 |
| Contract assets | 33,648 | 22,087 |
| Deferred tax assets | (440) | 2,566 |
| Total non-current assets | 5,680,414 | 6,669,207 |
| Current assets | ||
| Inventories | 621,462 | 678,572 |
| Restricted bank deposits | 64,816 | 37,264 |
| Trade receivables | 69,269 | 95,672 |
| Other receivables and financial assets | 138,574 | 118,853 |
| Contract assets | 53,881 | 64,775 |
| Cash and cash equivalents | 431,727 | 386,985 |
| Advances paid on inventories | 9,544 | 9,194 |
| Total current assets | 1,389,273 | 1,391,315 |
| Non-current assets held for sale | 1,348,767 | 1,648,991 |
| Total assets | 8,418,454 | 9,709,513 |
3 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Interim Statement of Financial Position
| In EUR thousand | 30 Sep 2023 | 31 Dec 2022 |
|---|---|---|
| Shareholders' equity | ||
| Share capital | 188 | 146 |
| Share premium | 1,844,765 | 1,844,765 |
| Reserves | 163,854 | 193,852 |
| Retained earnings | (1,770,738) | (621,651) |
| Total equity attributable to owners of the Company | 238,069 | 1,417,112 |
| Non-controlling interests | 404,620 | 495,951 |
| Total equity | 642,689 | 1,913,063 |
| Liabilities | ||
| Non-current liabilities | ||
| Corporate bonds | 3,610,036 | 3,735,550 |
| Other loans and borrowings | 2,115,618 | 1,337,655 |
| Other financial liabilities | 122,527 | 14,114 |
| Derivatives | 2,177 | 800 |
| Pension provisions | 720 | 719 |
| Lease liabilities | 27,557 | 10,341 |
| Other payables | 92 | 46 |
| Deferred tax liabilities | 379,406 | 525,715 |
| Total non-current liabilities | 6,258,133 | 5,624,940 |
| Current liabilities | ||
| Corporate bonds | 3,393 | 498,496 |
| Convertible bonds | 101,689 | 100,503 |
| Other loans and borrowings | 288,013 | 308,162 |
| Other financial liabilities | 1,915 | 1,915 |
| Trade payables | 84,433 | 78,242 |
| Other payables | 265,665 | 341,458 |
| Provisions | 91,193 | 75,580 |
| Lease liabilities | 6,781 | 3,811 |
| Prepayments received | 48,527 | 70,865 |
| Contract liabilities | 18,950 | 13,924 |
| Derivatives | - | 6 |
| Total current liabilities | 910,559 | 1,492,962 |
| Non-current liabilities held for sale | 607,073 | 678,548 |
| Total shareholders' equity and liabilities | 8,418,454 | 9,709,513 |
Thierry Beaudemoulin CEO
CFO
Thomas Echelmeyer Date of approval: 27 November 2023
Condensed Consolidated Interim Statement of Profit or Loss
| For the nine months ended 30 Sep |
For the three months ended 30 Sep |
||||
|---|---|---|---|---|---|
| In EUR thousand | 2023 | 2022 | 2023 | 2022 | |
| Revenue | 289,345 | 623,945 | 96,569 | 392,896 | |
| Cost of operations | (275,375) | (552,787) | (60,282) | (333,995) | |
| Gross profit | 13,970 | 71,158 | 36,287 | 58,901 | |
| General and administrative expenses | (102,868) | (109,688) | (31,381) | (37,179) | |
| Other expenses | (161,281) | (150,766) | (49,148) | (13,194) | |
| Other income | 34,378 | 80,303 | 9,932 | 37,850 | |
| Changes in fair value of investment properties | (755,004) | (369,704) | (13,433) | (222,256) | |
| Results from operating activities | (970,805) | (478,697) | (47,743) | (175,878) | |
| Finance income | 43,865 | 81,339 | 13,049 | 13,410 | |
| Finance costs | (418,967) | (156,983) | (105,168) | (40,035) | |
| Impairments on trade and other receivables | - | (371,269) | - | ||
| Net finance income / (costs) | (375,102) | (446,913) | (92,119) | (26,625) | |
| Net income (losses) from investments in associated companies | (2,650) | 443 | (1,697) | (95) | |
| Profit before tax | (1,348,557) | (925,167) | (141,559) | (202,598) | |
| Income tax expense | 122,190 | 135,817 | (45,108) | 17,633 | |
| Profit for the period | (1,226,367) | (789,350) | (186,667) | (184,965) | |
| Profit attributable to: | |||||
| Owners of the Company | (1,149,834) | (747,261) | (215,344) | (166,224) | |
| Non-controlling interests | (76,533) | (42,089) | 28,677 | (18,741) | |
| Profit for the period | (1,226,367) | (789,350) | (186,667) | (184,965) | |
| Earnings per share in EUR (undiluted) | (8.36) | (6.36) | (1.31) | (4.55) | |
| Earnings per share in EUR (diluted) | (8.36) | (6.36) | (1.31) | (4.55) |
Condensed Consolidated Interim Statement of Comprehensive Income
| For the six months ended 30 Sep |
For the three months ended 30 Sep |
||||
|---|---|---|---|---|---|
| In EUR thousand | 2023 | 2022 | 2023 | 2022 | |
| Profit for the period | (1,226,367) | (789,350) | (186,667) | (184,965) | |
| Items that may be reclassified subsequently to profit or loss | |||||
| Effective portion of changes in fair value of cash flow hedges | (1,222) | 293 | 254 | (436) | |
| Related tax | (127) | 68 | - | (101) | |
| Currency translation reserve | (14,605) | 3,828 | 2,988 | 10,510 | |
| Reserve from financial assets measured at fair value through other compre hensive income |
(14,046) | (10,484) | (3,597) | 1,027 | |
| Total other comprehensive income / (loss) | (30,000) | (6,295) | (355) | 11,000 | |
| Total comprehensive income for the period | (1,256,367) | (795,645) | (187,022) | (173,965) | |
| attributable to: | |||||
| Owners of the Company | (1,179,834) | (753,556) | (215,711) | (155,224) | |
| Non-controlling interests | (76,533) | (42,089) | 28,689 | (18,741) | |
| Total comprehensive income for the period | (1,256,367) | (795,645) | (187,022) | (173,965) |
Condensed Consolidated Interim Statement of Cash Flows
| For the nine months ended 30 Sep |
For the three months ended 30 Sep |
||||
|---|---|---|---|---|---|
| In EUR thousand | 2023 | 2022 | 2023 | 2022 | |
| Cash flows from operating activities | |||||
| Profit for the period | (1,226,367) | (789,350) | (186,667) | (184,965) | |
| Adjustments for: | |||||
| Depreciation | 6,792 | 17,201 | 1,315 | 4,994 | |
| Change in fair value of investment properties | 755,005 | 369,704 | 13,434 | 222,256 | |
| Profit from selling portfolio | 439 | (28,891) | 878 | (9,995) | |
| Non-cash other income and expense | 38,075 | 141,535 | 46,048 | 68,307 | |
| Change in contract assets | (665) | 5,698 | (9,508) | (5,612) | |
| Change in contract liabilities | 5,026 | (19,610) | (1,386) | (20,906) | |
| Non-cash income from at-equity valued investment associates | 2,649 | (443) | 1,698 | 95 | |
| Net finance costs / (income) | 375,102 | 446,913 | 92,118 | 26,625 | |
| Income tax expense | (122,190) | (135,817) | 45,108 | (17,633) | |
| Share-based payments | (1) | 252 | (458) | 250 | |
| Change in short-term restricted bank deposits related to tenants | (157) | 3,074 | 14 | 1,663 | |
| Change in long-term restricted bank deposits from condominium sales | 648 | 818 | 543 | - | |
| Change in trade receivables | 14,276 | 42,093 | (3,040) | (152,376) | |
| Change in other receivables | (40,279) | (28,684) | 12,749 | (32,166) | |
| Change in inventories | 60,309 | 85,812 | 10,910 | 62,135 | |
| Change in advances received | (22,338) | (15,187) | (11,907) | 1,337 | |
| Change in trade payables | (13,046) | (87,539) | (22,458) | 33,190 | |
| Change in other payables | 61,220 | (66,360) | (28,662) | (39,282) | |
| Income tax paid | (5,801) | (28,643) | (3,674) | (2,677) | |
| Net cash from operating activities | (111,303) | (87,424) | (42,945) | (44,760) | |
| Cash flows from investing activities | |||||
| Purchase of and CapEx on investment properties | (53,230) | (120,973) | (12,424) | (27,307) | |
| Advances paid for purchase of investment properties | - | - | (300) | - | |
| Repayment of long-term loans granted | 12,300 | 952 | 12,300 | 952 |
| For the nine months ended 30 Sep |
||||||
|---|---|---|---|---|---|---|
| In EUR thousand | 2023 | 2022 | 2023 | 2022 | ||
| Proceeds from disposals of investment properties | 52,971 | 1,203,057 | 14,999 | 139,109 | ||
| Proceeds from selling portfolio in sharedeals | 117,140 | 244,878 | 117,140 | 1,680 | ||
| Disposal of shareholder loans in connection with a share deal | 6,934 | 6,934 | ||||
| Purchase of and CapEx on property, plant and equipment | (921) | (1,366) | (790) | (211) | ||
| Interest received | 3,972 | 7,833 | 1,456 | 4,458 | ||
| Proceeds from sale of financial instruments | 64,950 | - | - | |||
| Proceeds from sale of fixed assets | 3,695 | (656) | 3,695 | (60) | ||
| Purchase of other financial investments | - | - | - | |||
| Change in short-term restricted bank deposits, net | 235 | (21,499) | 473 | (625) | ||
| Net cash from (used in) investing activities | 143,096 | 1,377,176 | 143,483 | 117,996 | ||
| Cash flows from financing activities | - | |||||
| Acquisition of non-controlling interests | (29,727) | (40,587) | - | (3,549) | ||
| Repayment of bonds | (854,134) | (400,991) | (66,770) | (991) | ||
| Long-term loans received | 1,039,903 | 11,744 | 55,981 | 375 | ||
| Repayment of long-term loans | (149,223) | (645,904) | (21,209) | (149,440) | ||
| Proceeds from issuance of corporate bonds, net | 162,518 | - | - | |||
| Upfront fees paid for credit facilities | (560) | - | - | |||
| Short-term loans received | - | - | - | |||
| Repayment of short-term debt | (264) | - | (264) | - | ||
| Interest paid | (106,157) | (136,982) | (17,250) | (32,799) | ||
| Payment of lease liabilities | (6,247) | (2,938) | (2,923) | 752 | ||
| Transaction costs | (32,947) | (28,070) | - | (92) | ||
| Prepaid costs of raising debt | (973) | 250 | (232) | |||
| Net cash from (used in) financing activities | (138,796) | (1,082,743) | (52,185) | (185,976) | ||
| Change in cash and cash equivalents during the period | (107,003) | 207,009 | 48,353 | (112,740) | ||
| Changes in the carrying amount of cash and cash equivalents that are presented among assets held for sale as part of a disposal group |
151,745 | (147,634) | 152,363 | (42,906) | ||
| Cash and cash equivalents at the beginning of the period | 386,985 | 555,700 | 231,010 | 770,721 | ||
| Cash and cash equivalents at the end of the period | 431,727 | 615,075 | 431,726 | 615,075 |
Condensed Consolidated Interim Statement of Changes in Equity
| In EUR thousand | Share capital |
Share premium |
Hedging reserve |
Currency translation reserve |
Other capital reserves |
Reserve financial assets mea sured at FVTOCI |
Retained earnings |
Total | Non-con trolling interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 Jan 2023 |
146 | 1,844,765 | 903 | 10,772 | 315,746 | (133,568) | (621,651) | 1,417,113 | 495,951 | 1,913,064 |
| Total comprehensive income for the period |
||||||||||
| Profit for the period | - | - | - | - | - | - | (1,149,834) | (1,149,834) | (76,533) | (1,226,367) |
| Other comprehensive income, net of tax |
- | - | (1,349) | (14,605) | - | (14,046) | - | (30,000) | - | (30,000) |
| Total comprehensive in come (loss) for the period |
- | - | (1,349) | (14,605) | - | (14,046) | (1,149,834) | (1,179,834) | (76,533) | (1,256,367) |
| Transactions with owners, recognised directly in equity |
||||||||||
| Issuance of ordinary shares, net |
42 | - | - | - | - | - | - | 42 | - | 42 |
| Transactions with non-con trolling interest without a change in control |
- | - | - | - | 1 | - | 16 | 17 | (14,798) | (14,781) |
| Change in the scope of consolidation |
- | - | - | - | - | - | - | - | - | |
| Share-based payments | - | - | - | - | - | - | 731 | 731 | - | 731 |
| Balance as at 30 Sep 2023 |
188 | 1,844,765 | (446) | (3,833) | 315,747 | (147,614) | (1,770,738) | 238,069 | 404,620 | 642,689 |
3 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Condensed Consolidated Interim Statement of Changes in Equity
| In EUR thousand | Share capital |
Share premium |
Hedging reserve |
Currency translation reserve |
Other capital reserves |
Reserve financial assets mea sured at FVTOCI |
Retained earnings |
Total | Non-con trolling interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 Jan 2022 |
146 | 1,844,765 | 573 | 24,803 | 315,746 | (123,334) | 927,684 | 2,990,383 | 703,094 | 3,693,477 |
| Total comprehensive income for the period |
||||||||||
| Profit for the period | - | - | - | - | - | - | (747,261) | (747,261) | (42,089) | (789,350) |
| Other comprehensive income, net of tax |
- | - | 361 | 3,828 | - | (10,484) | - | (6,295) | - | (6,295) |
| Total comprehensive in come (loss) for the period |
- | - | 361 | 3,828 | - | (10,484) | (747,261) | (753,556) | (42,089) | (795,645) |
| Transactions with owners, recognised directly in equity |
||||||||||
| Transactions with non-con trolling interest without a change in control |
- | - | - | - | - | - | - | - | (4,177) | (4,177) |
| Change in consolidation scope related to sale |
- | - | - | - | - | - | (3,387) | (3,387) | (33,649) | (37,036) |
| Share-based payments | - | - | - | - | - | - | 252 | 252 | - | 252 |
| Balance as at 30 Sep 2022 |
146 | 1,844,765 | 934 | 28,631 | 315,746 | (133,818) | 177,288 | 2,233,692 | 623,179 | 2,856,871 |
Financial Calendar 2024
Adler Group S.A.
| 29 April 2024 | Publication Annual Report 2023, non-audited |
|---|---|
| 28 May 2024 | Publication Q1 2024 Results |
| 26 June 2024 | Annual General Meeting 2024 |
| 28 August 2024 | Publication Q2 2024 Results |
| 30 September 2024 (extended deadline) |
Publication Annual Reports 2022 and 2023, audited |
| 28 November 2024 | Publication Q3 2024 Results |
Online Financial Calendar
Imprint
Coordination:
Investor Relations Adler Group S.A.
Concept, Design & Artwork:
brandcooks GmbH by UPWIRE Group
Hamburg, Zurich, Cape Town
Felix Ernesti
Art Director & Graphic Designer, Berlin
Adler Group S.A.
55 Allée Scheffer 2520 Luxembourg Grand Duchy of Luxembourg
[email protected] www.adler-group.com
