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Adler Group
Quarterly Report • Nov 30, 2021
9962_10-q_2021-11-30_35d906c3-95d2-430d-a168-584c7db5f3af.pdf
Quarterly Report
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QUARTERLY FINANCIALSTATEMENTS 2021
Key FiguresQ3
Profit and loss statement
For the nine months ended For the three months ended
For the year ended
In EUR thousand
| Income from rental activities |
|---|
| EBITDA from rental activities |
| EBITDA from rental activities margin |
| EBITDA Total |
| FFO 1 (from rental activities) |
| In EUR thousand | 30 Sep 2021 |
30 Sep 2020 |
30 Sep 2021 |
30 Sep 2020 |
31 Dec 2020 |
|---|---|---|---|---|---|
| Income from rental activities | 344,350 | 266,114 | 113,843 | 118,217 | 383,906 |
| EBITDA from rental activities | 169,180 | 133,771 | 56,636 | 56,450 | 187,014 |
| EBITDA from rental activities margin | 65.2% | 65.8% | 66.4% | 63.8% | 63.7% |
| EBITDA Total | 238,389 | 157,710 | 71,199 | 72,030 | 247,349 |
| FFO 1 (from rental activities) | 101,900 | 74,738 | 35,098 | 31,804 | 107,128 |
| FFO 2 (incl. disposal results and development activities) | 148,963 | 73,670 | 59,657 | 25,500 | 126,654 |
Further KPIs
| Residential(*) | 30 Sep 2021 | 31 Dec 2020 |
|---|---|---|
| Monthly in-place rent (EUR per m2) | EUR 6.61 | EUR 6.30 |
| Total vacancy rate | 3.3% | 3.4% |
| Number of units | 69,435 | 69,722 |
| Like-for-like rental growth | 3.9% | 2.2% |
Balance sheet
| In EUR thousand except per share data | 30 Sep 2021 | 31 Dec 2020 |
|---|---|---|
| Fair value of properties | 13,018,158 | 11,430,611 |
| LTV | 57.0% | 53.4% |
| EPRA NRV | 6,599,040 | 6,037,159 |
| EPRA NRV per share (EUR) | 56.16 | 51.38 |
| EPRA NTA | 5,005,812 | 4,442,583 |
| EPRA NTA per share (EUR) | 42.60 | 37.81 |
(*) Including ground floor commercial units and excluding units under renovation and development projects.
We want to ensure people have the living space they need – today and tomorrow. We provide affordable contemporary housing and create new visionary real estate projects that are fit for the future.
4 Adler Group Q3 2021 Quarterly Financial Statements Adler Group Q3 2021 Quarterly Financial Statements
To our Shareholders
Interim Management Report
- Fundamentals of the Group
- Portfolio Overview
- Financial Overview
- Material Events in the Reporting Period and Subsequent Events
- Forecast Report
- Responsibility Statement
Condensed Consolidated Interim Financial Statements
- 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
Financial Calendar & Imprint
Content
Welcome to Adler Group
Adler Group is a leading housing company in the German residential real estate market. With a portfolio comprising about 70,000 residential units spread out across Germany and a development pipeline of approximately 12,000 flats in the country's top 7 cities, we are actively shaping the future of the German real estate market.
ADLER can look back on a long and distinguished history. As a manufacturer of bicycles, cars and typewriters the Company has been a household name since 1880 and has become a synonym for reliability and pioneering spirit. Adler Group aspires to nurture this spirit and as a housing company create living spaces where people feel comfortable and will wish to live for years to come.
We excel through our role as a pioneer in the field of technology and our pursuit of perfection. We are a modern company which goes about doing what it does best with true passion: the creation of holistic, visionary and sustainable living spaces.
As a brand that can fall back on a long tradition in Germany, we see ourselves as being an integral part of the society we live in. And we are here to stay.
RESIDENTIAL RENTAL PORTFOLIO
69,435 units
DEVELOPMENT PIPELINE
c. 12,000 units
What the Numbers say
Key facts & figures (*)
AVERAGE RESIDENTIAL RENT
TOP 13 CITIES 6.93 EUR/m²/month
AVERAGE RESIDENTIAL RENT
TOTAL
RESIDENTIAL RENTAL PORTFOLIO
RESIDENTIAL RENTAL PORTFOLIO
69,435 units
DEVELOPMENT PIPELINE
(*) As at 30 September 2021, not considering any potential impact from the intended portfolio disposals that were announced in October 2021.
1 TO OUR SHAREHOLDERS Key Facts & Figures
Maximilian Rienecker Co-CEO
Thierry Beaudemoulin Co-CEO
Dear Investors,
Your Adler Group has experienced eventful times and once again delivered very solid operational figures in Q3 2021. Residential property values throughout Europe, including Germany, continue to increase in the second half of 2021, supported by increasing rents, decreasing yields and backed by robust demand from private and institutional investors. Our residential average rent per sqm increased slightly to EUR 6.61, representing a like-for-like rental growth of 3.9%. Our vacancy rate decreased to 3.3% and we can report a like-for-like value uplift of 8.7%. This means we are on track to deliver on our raised FY 2021 guidance, which we announced on 31 August 2021.
After the end of the third quarter, we took advantage of the favourable market developments. With the announced sale of two large residential portfolios, we accel-
erate our deleveraging path and intensify our focus on the top 7 German cities simultaneously. With these two transactions, which together are valued at approximately EUR 2.4 billion, Adler has completed the strategic asset disposals announced on 4 October. Both sales hold a premium to the appraised book value, thus confirming once again the quality of our assets and the liquidity of the respective market. Adler now continues to focus on the planned disposals of non-strategic development projects to further reduce debt and decrease development exposure.
Shareholder Letter Q3
The selected financial assets/receivables are expected to fall below EUR 300 million as of year-end 2021, compared to over EUR 1 billion at mid-year 2021. This is due to expected incoming payments from disposed development projects, among others. Crucial to mention: all major receivables are backed by assets as collaterals.
Please let us give you an update on our assets and what has happened in the last couple of months. The high standard of our assets and the resilience of the appraisals on our assets by CBRE and NAI Apollo is also proven by the two above-mentioned transactions. The completed portfolio sales of the last five years add up to a sales price of around EUR 3.54 billion, which exceeded the respective assets' carrying amounts by around EUR 230 million.
All transactions have been executed at arm's length, analysed and accompanied by external consultants and audited as part of the consolidated financial statements. In none of the transactions mentioned, the ultimate beneficiary owner was classified as a related party and/or person as defined by law or under IAS 24.
The above-mentioned total amount does not include the sale of 75% of the Düsseldorf Glasmacherviertel Gerresheim project, which has now been reversed as the project now perfectly fits into our build-to-hold approach after the nature of the expected zoning permit has been changed from mainly condominiums to now rented apartments. Important to note: no cash will be paid to any party involved, nor has any cash been paid to any other party since the sale.
The real estate value recorded in Adler's balance sheet has been determined by independent market-leading real estate property appraisers CBRE and NAI Apollo based on state-of-the art valuation methods. The derived valuations have been reviewed and the relevant balance sheet positions have been audited. In addition, the property values have – in parts, where necessary – been independently assessed by our experienced financing banks. CBRE and NAI Apollo will again perform independent external valuations for the entire Adler portfolio for year-end 2021.
Nevertheless, we have engaged external independent auditors to conduct a comprehensive review, in particular the third-party transactions. The outcome of this analysis will be made public once available.
We are consistently adhering to the implementation of our strategy and successfully further developing our business, which is also demonstrated by the fact that we have been able to strengthen our top management team in project development with Dr. Bernd Schade as Chief Development Officer (CDO) as of 1 November 2021. Dr. Schade is regarded as a renowned and experienced project developer in the industry.
We therefore look to the future with confidence and positivity and thank you for your trust along the way.
2021 Milestones
An overview
1 TO OUR SHAREHOLDERS 2021 Milestones
JANUARY
MARCH
APRIL
MARKET ACTIVITIES
Berlin rent freeze overturned by Germany's Constitutional Court
On 15 April 2021, the Federal Constitutional Court declared the Berlin rent freeze unconstitutional and obsolete. As 19,853 out of 69,712 of our flats are located in Berlin, which represents 54% of total gross asset value and 37% of net rental income, the court ruling has material impact on the business. Adler Group welcomes the unambiguous ruling as it restores legal certainty and confidence in the Berlin housing market, which is in the interest of tenants, housing providers and investors alike.
CAPITAL MEASURES
Successful placement of a EUR 1.5bn 5- and 8-year dual tranche bond
| JANUARY | |
|---|---|
| EUR 1.5bn dual tranche bond |
|
| FEBRUARY |
On 8 January 2021, the Group successfully placed a EUR 1.5 billion dual tranche bond comprising a EUR 700 million 5-year maturity with a 1.875% fixed coupon and a EUR 800 million 8-year maturity with a 2.25% fixed coupon. The Notes were placed with institutional investors across Europe with a total order book of EUR 4.0 billion. Together with existing liquidity, all upcoming debt maturities in 2021 are covered.
CORPORATE ACTIVITIES
Corporate structure further simplified
On 20 April 2021, WESTGRUND, a subsidiary of Adler Group, announced a squeezeout of the remaining minority shareholders in order to further simplify the corporate structure. The shareholders will receive a cash compensation of EUR 13.24 per WESTGRUND share. The resolution of the transfer was passed at the extraordinary general meeting of WESTGRUND, which was held on 9 June 2021.
2021 Milestones
Significant achievements since January
APRIL
EUR
MAY
JUNE
CORPORATE ACTIVITIES
Great progress on build-to-hold projects
In June, Adler Group and the City of Hamburg agreed the urban development plan for the Holsten Quartier in Hamburg-Altona. The Group will build approximately 1,200 apartments. Currently, the project is valued with a GAV of EUR 364 million. Completion is expected by the end of 2026.
CORPORATE ACTIVITIES
First ESG report measurable goals set for future climate protection
On 4 May 2021, Adler Group published its first ESG report in which a detailed ESG strategy is outlined for the entire Group. Three sustainability priorities were defined: sustainability in construction, sustainable relationships with tenants and employees, and sustainable management through digitalisation. The Company's goal is to reduce CO2 emissions within the whole portfolio by 50% until 2030.
CAPITAL MEASURES
Successful refinancing through a placement of a EUR 500m 6-year bond
On 21 April 2021, the Group successfully placed a EUR 500 million single tranche bond with a 6-year maturity and a 2.25% fixed coupon under its newly established EMTN programme. The Notes were placed with institutional investors across Europe with a total order book of EUR 1.1 billion. The proceeds will be used to call and repay the EUR 450 million 9.625% high yield bond issued by Consus Real Estate AG which enabled the Group to realise EUR 33 million annualised financial synergies.
CORPORATE ACTIVITIES
AGM and dividend payment
On 29 June 2021, the Group held its annual General Meeting and declared a dividend payment of EUR 0.46 per share. The aggregate dividend amount of EUR 54,054,707 was paid out to our shareholders on 1 July 2021.
MAY reduce CO2 emissions by 50% until 2030
JUNE
EUR
54.0m aggregate dividend payout
JUNE
Completion of 1,200
new flats by end of 2026
APRIL
EUR 500m single tranche bond
JULY
CORPORATE ACTIVITIES
German Association of Sustainable Building membership
On 6 July 2021, Adler Group became a member of the German Association of Sustainable Building (DGNB). It has committed to ensuring that all new buildings will comply with the DGNB Gold standard or the comparable LEED standard, building carbon-neutral buildings for a better future.
CORPORATE ACTIVITIES
Global Compact Network membership
On 15 July 2021, Adler Group became an active member of the United Nations Global Compact. By taking this approach, the Company is particularly able to positively impact on eight selected principles.
PORTFOLIO DISPOSALS
Disposal of non-core office development project at book value
On 20 July 2021, Adler Group sold an office development project for EUR 185 million at book value to a project developer. The building was part of the upfront sales of the build-to-sell development pipeline, in a prime location in the financial metropolis Frankfurt. This disposal is an important milestone in the process of streamlining and simplifying the portfolio and strengthening the balance sheet in line with the Group's strategy.
CORPORATE ACTIVITIES
Sustainalytics rating
On 16 August 2021, Sustainalytics assigned a new rating to Adler Group of 10.7, ranking the Company as the 46th best real estate company in Sustainalytics' global coverage of 1,001 real estate companies. This is a very strong rating and positions the Company in the top 5% of the real estate coverage in terms of ESG.
JULY
EUR 185m disposal of non-core development project
AUGUST
New ESG rating
Top 5% of global real estate companies
SEPTEMBER
OCTOBER
CORPORATE ACTIVITIES
Review of strategic options regarding residential yielding portfolio
On 4 October 2021, Adler Group decided to initiate a review of strategic options after being approached multiple times by institutional parties interested to acquire parts of the Company's residential yielding portfolio. This process could result in the sale of a significant part of Adler Group's yielding assets above book value, thereby achieving material value creation for the Company's stakeholders. Proceeds from such disposals are intended to significantly reduce leverage and also to return capital to bond and equity holders.
PORTFOLIO DISPOSALS
Adler Group concludes term sheet with LEG
On 11 October 2021, Adler Group signed a term sheet with LEG Immobilien SE regarding the sale of approximately 15,500 units. The transaction is based on a real estate portfolio value in an amount of approximately EUR 1.4 billion which is above the respective book values as of 30 June 2021. Proceeds from this disposal are intended to accelerate deleveraging towards the LTV target of below 50%. The assets to be disposed of are located amongst others in Wilhelmshaven, Göttingen and Wolfsburg, leading to a remaining portfolio being more focussed on Germany's top 7 cities. The closing of the transaction is expected to take place by the end of 2021.
PORTFOLIO DISPOSALS
Additional portfolio disposal to accelerate deleveraging
On 26 October 2021, Adler Group signed a term sheet with a leading alternative investment firm in order to sell approximately 14,300 units for the agreed transaction valuation of approximately EUR 1 billion. This is a premium compared to the respective book values as of 30 June 2021 and would lead to an LTV of below 50%. The units are mainly located in the Eastern part of Germany which will further increase the quality of the remaining portfolio. This intended transaction with expected closing in Q1 2022 concludes the initiated strategic review process.
CORPORATE ACTIVITIES
Dr. Bernd Schade becomes new CDO of the Adler Group
On 1 November 2021, Dr. Bernd Schade joined Adler Group as new Chief Development Officer. Bernd Schade has decades of experience in project management of real estate projects throughout Germany. Prior to joining Adler Group, Dr. Schade was member of the Management Board of Bauwert AG.
OCTOBER
EUR 1.4bn disposal of yielding assets
1 TO OUR SHAREHOLDERS 2021 Milestones
Adler Group Share
The share
Share information (as at 30 September 2021)
| 1st day of trading | 23 July 2015 |
|---|---|
| Subscription price | EUR 20.00 |
| Price at the end of Q3 2021 EUR 14.70 | |
| Highest share price LTM | EUR 29.00 |
| Lowest share price LTM | EUR 14.70 |
| Total number of shares | 117.5 million |
| ISIN | LU1250154413 |
| WKN | A14U78 |
| Symbol | ADJ |
| Class | Dematerialised shares |
| Free float | 68.39% |
| Stock exchange | Frankfurt Stock Exchange |
| Market segment | Prime Standard |
| Market index | SDAX |
| ERPA indices | FTSE EPRA / NAREIT |
| Global Index, FTSE EPRA / | |
| NAREIT Developed Europe | |
| Index, FTSE EPRA / | |
| NAREIT Germany Index |
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 2021, the shares traded between EUR 14.70 and EUR 29.00. Adler Group shares are included in the SDAX index of Deutsche Börse and the relevant real estate sector indices of the EPRA index family.
Shareholder structure
As at 30 September 2021, the total number of outstanding shares of Adler Group amounted to 117.5 million. On that date, the main shareholders with holdings of over 5% were(*): Aggregate Holdings S.A. (26.59%) and Fairwater Multi-Strategy Investment ICAV (5.02%). The remaining 68.39% free float shares are mainly held by institutional investors.
As notified on 15 October 2021, Fairwater Multi-Strategy Investment ICAV reduced its stake to 0.04% with effect from 13 October 2021. Therefore, the free float shares increased to approximately 73.4%.
Dividend policy
As a dividend policy, the Company intends to pay dividends in an amount of approximately 50% of FFO 1. In accordance with this dividend policy, the amount shall be distributed as annual dividends to the shareholders. The distribution of dividends is subject to a respective resolution of the annual General Meeting (AGM).
For the 2020 financial year, the Company paid out a dividend amounting to 50% of FFO 1 realised in full year 2020. This equalled EUR 54 million or EUR 0.46 per share and was confirmed by the shareholders at the AGM in June 2021.
(*) According to official notifications received from the shareholders.
Shareholder structure
(as at 30 September 2021)
Free Float Shares 68.39%
Aggregate Holdings S.A. 26.59%
Fairwater Multi-Strategy Investment ICAV 5.02%
Interim Management Report
- Fundamentals of the Group
- Portfolio Overview
- Financial Overview
- Forecast Report
- Responsibility Statement
- Material Events in the Reporting Period and Subsequent Events
-
-
Interim Management Report
RESIDENTIAL RENTAL PORTFOLIO
69,435 units
OPERATIONAL EMPLOYEES
1,337 people
Fundamentals of the Group
Business model
Adler Group S.A. is a well-diversified residential real estate company with properties in Germany valued at EUR 13.0 billion. We hold and manage approximately 70,000 apartments across Germany, with an additional 12,000 units under development in Germany's top 7 cities.
Our business model focuses on asset and portfolio management, property and facility management and identifying residential properties throughout Germany that present opportunities to create value by increasing rents and decreasing vacancy. With our strategic land bank in the top 7 German cities and our highly experienced development platform, we expect the build-to-hold development projects to be completed over the next 6-8 years. We will deliver approximately 12,000 new residential units in a strategic effort to address the ongoing housing shortage in Germany. Our 1,337 operational employees are based modernise, refurbish and/or re-position our properties allowing for higher rent levels. Lastly, we reduce the portfolio vacancy through active marketing with an approach tailored to the respective micro-location.
pipeline, which will further improve the quality of our portfolio. Furthermore, we also expect to benefit from Consus' ongoing forward sales and condominium sales of its development projects to yield NAV accretive growth over the next three to four years.
We are committed to adding value through development and modernisation thereby driving organic growth.
In 2020, we combined our business with ADLER Real Estate AG ("ADLER") and Consus Real Estate AG ("Consus") in order to create one of the largest listed residential real estate companies in Germany. Through the integration of the assets held by ADLER, we have grown and diversified our business and by integrating Consus, we have secured a clear and profitable organic growth path, which rests upon our high-quality build-to-hold development pipeline with a gross asset value (GAV) of EUR 2.0 billion. We aim to develop approximately 1.1 million m² of additional rental area across c. 12,000 additional rental units in Germany's top 7 cities over the next 6-8 years. In addition to that, selected CAPEX and modernisation measures in our core portfolio will elevate the quality of our rental portfolio and simultaneously improve the energy efficiency.
We seek to optimise our portfolio and recycle capital through selective investments and disposals. By disposing of non-core assets, we aim at streamlining our rental portfolio by increasing our focus on large cities where we can manage a critical mass of assets and simultaneously improve our profitability and portfolio KPIs. By selling selected assets above book value, we aim to continuously demonstrate the resilience of the German residential real estate market. Active capital recycling enables us to fund the construction of our development Our financial policy includes a target of LTV below 50% in the medium-term, without equity raising requirements. This is to be achieved via the following measures: (1) the two disposals of portfolios announced in October 2021, (2) the sale of identified non-core assets in line with the strategic focus of the Group, (3) projects being forward sold to institutional purchasers prior to the start of construction, thereby minimising development risks and pre-funding the developments, and further development profits from condo sales, (4) German residential properties continue to be considered a safe haven, and we expect positive valuation effects at least in line with like-forlike rental growth and (5) operational performance of the newly formed combined Group. Ultimately, it is our focus to obtain an investment grade credit rating.
in our office in Berlin as well as in several locations across Germany bringing us closer to our assets and tenants.
Objectives and strategy
We focus on actively managing our core portfolio to grow earnings and improve EBITDA margins.
By focussing on increasing rents through active asset management and targeted modernisation investments, we refurbish and re-position our properties, while constantly screening and anticipating developments in different sub-markets. Our strategy to realise upside potential consists of the following approaches: We pursue regular rent increases up to the market levels (i) within the regulatory and legal limits as well as (ii) through tenant fluctuation without CAPEX investment. In addition, we continuously review rent potentials and pursue growth beyond the rent tables through targeted CAPEX investments to
We plan to further simplify our capital structure.
We will leverage operational and financial synergies to be realised from streamlining our operations and financial discipline.
By integrating ADLER and Consus into Adler Group, it allows us to capitalise on significant run-rate synergies with reduced debt and simplified capital structure.
We target continuous dividends with a payout ratio of up to 50% of our annual FFO 1 (from rental activities).
Our portfolio and operational excellence combined with our sustainable financing strategy allows us to distribute stable dividends on an annual basis with a targeted payout ratio of up to 50% of FFO 1 (from rental activities).
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's articles of association. 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 2021, the Board comprised as follows:
Dr. Peter Maser, Chairman Independent Director
Mr Maximilian Rienecker
Director
Mr Thierry Beaudemoulin
Director
Ms Arzu Akkemik Independent Director
Dr. Michael Bütter
Independent Director
Mr Claus Jørgensen
Independent Director
Mr Thilo Schmid
Independent Director
Mr Thomas Zinnöcker
Independent Director
Note: the composition of the Board remains unchanged as at the time of publication of this report.
portfolio
Portfolio Overview(*)
Adler Group is a pure play German residential company with a well-diversified portfolio focussing on the top German metropolitan areas. The 12,000 units under development will further improve the quality of the portfolio by strengthening our position in the top 7 German cities.
LIKE-FOR-LIKE RENTAL GROWTH
3.9%
AVERAGE RESIDENTIAL IN-PLACE RENT
EUR/M2/MONTH
6.61
Portfolio overview(*)
| Location | Fair value EUR m Q3 21 |
Fair value EUR/m2 Q3 21 |
Units | Lettable area m2 |
NRI(**) EUR m Q3 21 |
Rental yield (in-place rent) |
Vacancy Q3 21 |
Vacancy Δ YoY |
Q3 21 Avg. rent EUR/m2/ month |
NRI Δ YoY LFL |
Rever sionary potential |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Berlin | 4,855 | 3,535 | 19,845 | 1,373,165 | 131.7 | 2.7% | 1.1% | (0.3%) | 7.98 | 3.0% | 21.4% |
| Leipzig | 506 | 1,988 | 4,746 | 254,601 | 18.2 | 3.6% | 2.8% | (0.2%) | 6.16 | 2.3% | 20.0% |
| Wilhelmshaven | 439 | 1,083 | 6,889 | 405,137 | 26.2 | 6.0% | 4.8% | 0.5% | 5.70 | 8.8% | 14.0% |
| Duisburg | 385 | 1,262 | 4,922 | 305,003 | 20.6 | 5.3% | 1.5% | (0.4%) | 5.72 | 2.6% | 11.0% |
| Wolfsburg | 182 | 2,072 | 1,301 | 87,614 | 6.5 | 3.6% | 2.5% | 0.3% | 6.58 | 0.5% | 34.3% |
| Göttingen | 163 | 1,916 | 1,377 | 85,238 | 6.0 | 3.7% | 1.3% | (0.2%) | 6.11 | (2.5%) | 38.0% |
| Dortmund | 162 | 1,583 | 1,770 | 102,251 | 7.6 | 4.7% | 0.9% | (0.9%) | 6.27 | 5.4% | 17.8% |
| Hanover | 142 | 2,243 | 1,113 | 63,298 | 5.6 | 3.9% | 1.7% | 0.5% | 7.40 | 1.9% | 22.6% |
| Kiel | 135 | 2,022 | 970 | 66,768 | 5.8 | 4.3% | 0.3% | (1.0%) | 7.24 | 3.8% | 17.6% |
| Düsseldorf | 130 | 3,524 | 577 | 36,779 | 3.7 | 2.9% | 2.1% | 0.4% | 8.50 | 3.8% | 24.1% |
| Halle (Saale) | 105 | 992 | 1,857 | 105,875 | 5.8 | 5.5% | 9.0% | (2.2%) | 5.37 | 9.0% | 23.2% |
| Essen | 105 | 1,575 | 1,043 | 66,341 | 4.8 | 4.6% | 3.2% | 1.1% | 6.11 | 2.4% | 21.9% |
| Cottbus | 93 | 859 | 1,847 | 108,773 | 6.1 | 6.5% | 6.8% | 1.1% | 5.25 | 8.1% | 17.8% |
| Top 13 total | 7,401 | 2,418 48,257 3,060,843 | 248.6 | 3.4% | 2.4% | (0.1%) | 6.93 | 3.6% | 20.2% | ||
| Other | 1,662 | 1,252 | 21,178 | 1,327,609 | 87.3 | 5.3% | 5.4% | (1.3%) | 5.84 | 4.1% | 17.3% |
| Total(*) | 9,063 | 2,065 69,435 4,388,452 | 335.8 | 3.7% | 3.3% | (0.6%) | 6.61 | 3.9% | 19.5% |
(*) All values include ground floor commercial units and exclude units under renovation and development projects.
(**) Annualised net rental income.
In addition to our financial performance indicators, we also use the following non-financial operating performance indicators.
The vacancy rate shows the ratio of m² of vacant units in our properties to total m². 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 our portfolio are further operational figures to ensure an appropriate level of investment in our real estate portfolio.
Portfolio performance
Residential portfolio(*)
| 30 Sep 2021 | 31 Dec 2020 | |
|---|---|---|
| Number of units | 69,435 | 69,722 |
| Average rent/m²/month | EUR 6.61 | EUR 6.30 |
| Vacancy | 3.3% | 3.4% |
| Number of units | 69,435 | 69,722 |
|---|---|---|
| Average rent/m²/month | EUR 6.61 | EUR 6.30 |
(*) All values include ground floor commercial units and exclude units under renovation and development projects.
The average rent per m2 increased to EUR 6.61 in the course of the year, while the vacancy rate marginally decreased to 3.3%.
VACANCY RATE
TOP 13 CITIES
Like-for-like rental growth(*)
| In % | LTM(**) 30 Sep 2021 |
1 Jan - 31 Dec 2020 |
|---|---|---|
| Like-for-like rental growth | 3.9% | 2.2% |
(*) 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 our Berlin portfolio amounted to 3.0% while like-for-like rental growth of the remaining portfolio stood at 4.5%.
Our fully integrated active asset management is focused on rental growth and employs dedicated strategies to drive all relevant components. In units that require modernisation, we invest CAPEX to improve quality to meet today's standards and regulations. Applying the relevant regulatory framework accurately and efficiently is key to our success in maximising rental growth for our let units.
Maintenance and CAPEX
| In EUR per m² | 1 Jan - 30 Sep 2021 |
1 Jan - 31 Dec 2020 |
|---|---|---|
| Maintenance | 4.0 | 6.3 |
| CAPEX(*) | 19.2 | 24.4 |
| Total | 23.2 | 30.7 |
(*) Includes EUR 2.9 of modernisation CAPEX.
Maintenance and CAPEX
| In EUR million | 1 Jan - 30 Sep 2021 |
1 Jan - 31 Dec 2020 |
|---|---|---|
| Maintenance | 17.6 | 30.5 |
| CAPEX(*) | 85.0 | 118.4 |
| Total | 102.6 | 148.9 |
(*) Includes EUR 13.0 million of modernisation CAPEX.
Total investment in the portfolio amounted to EUR 102.6 million resulting in the maintenance and CAPEX cost per m2 in the first nine months of 2021 of EUR 23.2.
Vacancy split
Our active asset management aims to minimise our vacancy rate while keeping the necessary flexibility for our portfolio optimisation.
Vacancy(*)
| 30 Sep 2021 | 31 Dec 2020 | |
|---|---|---|
| Total vacancy (units) | 2,374 | 2,523 |
| Total vacancy (m²) | 144,241 | 149,369 |
| Vacancy rate (top 13) | 2.4% | 2.3% |
| Total vacancy rate | 3.3% | 3.4% |
(*) All values include ground floor commercial units and exclude units under renovation and development projects.
Financial performance indicators
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 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.
Financial Overview
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 which are not expected to crystallise in normal circumstances, such as the fair value movements on financial 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.
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.
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 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 EBITDA margin from rental activities – calculated as 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 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)
= 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.
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 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)
- (+) Fair value gain from build-to-hold development10)
- = EBITDA Total
- (–) Net cash interest11)
- (+/–) Other net financial costs12)
- (–) Depreciation and amortisation
- (+) Change in fair value of investment properties
- (+/–) Other expenses/income13)
- (–) Net income from at-equity valued investment14)
= 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.
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) Our internally developed build-to-hold portfolio allows the Company to
generate fair value gain.
11) Net cash interest 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.
12) 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.
13) 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.
14) Net income from at-equity valued investment from the profit and loss statement.
Starting with 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)
EBITDA from rental activities
- (–) Net cash interest relating to rental activities15)
- (–) Current income taxes relating to rental activities16)
- (–) Interest of minority shareholders17)
= FFO 1 (from rental activities)
15) Net cash interest relating to rental activities is equal to "Interest on other loans and borrowings" relating to rental activities, excluding day-1 fair value noncash adjustment, plus the nominal interest expense on bonds.
16) Only current income taxes relating to rental activities. 17) Interest of minority shareholders in ADLER's subsidiary Brack Capital Properties N.V. ("BCP") as ADLER's share is only 69.80%.
Starting from EBITDA Total, we calculate FFO 2 (incl. dis-
posal 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)
EBITDA Total
- (–) Net cash interest11)
- (–) Current income taxes18)
- (–) Interest of minority shareholders17)
= FFO 2
(incl. disposal results and development activities)
18) Current income taxes as presented in the financial statements exclude the deferred taxes and current taxes relating to the disposal of the non-core portfolio. The loan-to-value ratio (LTV ratio) indicates the degree to which the net financial liabilities, calculated as the book value of the interest-bearing loans and borrowings plus bonds less cash and cash equivalents, are covered by the fair market value of the real estate portfolio. This indicator helps us to ensure a sustainable ratio of borrowings compared to the fair value of our real estate portfolio.
The LTV ratio was adjusted to align with the methodology of ADLER Real Estate AG. The net financial liabilities are adjusted for selected financial assets like purchase price receivables and financial assets, among others. The fair value of the properties includes advances paid in respect of investment properties and is adjusted for property, plant and equipment used for energy management and property management services and for investments in real estate companies.
Calculation of LTV
Bonds, other loans and borrowings
(+) Convertible bonds (–) Cash and cash equivalents (–) Selected financial assets19) (–) Contract assets (–) Assets and liabilities classified as held for sale = Net financial liabilities (+) Fair value of properties20) (+) Investment in real estate companies21) = GAV (Gross Asset Value)
= Loan-to-value ratio (LTV ratio)
19) Including financial receivables, trade receivables from the sale of real estate investment and other financial assets.
20) Including investment properties and inventories at their fair value, advances paid in respect of investment properties as well as property, plant and equipment used for energy management and property management services at its book value as at the reporting date.
21) Including investment in financial instruments and investments in associated companies from the consolidated financial statements.
INCOME FROM RENTAL ACTIVITIES
EUR
344.4 million
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 of use for our investors in 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
At the beginning of the second quarter of 2020, the Adler Group gained control of ADLER and its subsidiaries and consolidated the company and its subsidiaries for the first time. At the beginning of the third quarter of 2020, the Adler Group gained control of Consus and its subsidiaries and consolidated the company and its subsidiaries for the first time. A comparison with the previous year's figures is therefore only possible to a limited extent.
Income from rental activities and EBITDA from rental activities increased in the first nine months of the year on a year-on-year basis mainly due to the first-time consolidation of ADLER and the unconstitutionality of the Berlin rent freeze.
The illustrated EBITDA Total / EBT calculation as of 30 September 2020 deviates from the condensed consolidated interim statement of profit and loss as of 30 September 2020 on page 60 compared to the report published in the prior year for the purpose of comparability. The prior period's revenue (EUR -29.5 million), cost of sales (EUR -27.3 million) and profit (EUR -2.2 million) were adjusted retrospectively according to IFRS 3.45 (refer to note 5 Annual Report 2020).
At 30 September 2021 the net interest-bearing debt amounted to around EUR 8.3 billion. As at Q3 2021, our average interest rate on all outstanding debt is 2.1%, with a weighted average maturity of 4.2 years and an interest coverage ratio of 3.2(*). The weighted average cost of debt on Consus side is around 3.9% with an average maturity of 1.6 years.
(*) The interest coverage ratio ("ICR") is defined as the EBITDA Total relative to the Net cash Interest in the most recent four consecutive quarters.
EBITDA
EBITDA from rental activities
In EUR thousand
| For the nine months ended For the three months ended | For the year ended |
||||
|---|---|---|---|---|---|
| In EUR thousand | 30 Sep 2021 |
30 Sep 2020 |
30 Sep 2021 |
30 Sep 2020 |
31 Dec 2020 |
| Net rental income | 259,329 | 203,223 | 85,312 | 88,432 | 293,387 |
| Income from facility services and recharged utilities costs | 85,021 | 62,891 | 28,531 | 29,785 | 90,519 |
| Income from rental activities | 344,350 | 266,114 | 113,843 | 118,217 | 383,906 |
| Cost from rental activities | (133,746) | (101,916) | (43,826) | (48,078) | (153,274) |
| Net operating income (NOI) from rental activities | 210,604 | 164,197 | 70,017 | 70,139 | 230,633 |
| NOI from rental activities margin (%) | 81.2% | 80.8% | 82.1% | 79.3% | 78.6% |
| Overhead costs from rental activities | (41,424) | (30,427) | (13,382) | (13,689) | (43,619) |
| EBITDA from rental activities | 169,180 | 133,771 | 56,636 | 56,450 | 187,014 |
| EBITDA margin from rental activities (%) | 65.2% | 65.8% | 66.4% | 63.8% | 63.7% |
EBITDA Total
For the nine months ended For the three months ended year ended
For the
| In EUR thousand | 30 Sep 2021 |
30 Sep 2020 |
30 Sep 2021 |
30 Sep 2020 |
31 Dec 2020 |
|---|---|---|---|---|---|
| Income from rental activities | 344,350 | 266,114 | 113,843 | 118,217 | 383,906 |
| Income from property development | 78,544 | 141,506 | 19,636 | 117,536 | 134,634 |
| Income from other services | 10,446 | 4,538 | 5,568 | 4,538 | 14,893 |
| Income from real estate inventory disposed of | - | - | - | - | 218,667 |
| Income from sale of trading properties | 5,122 | 4,724 | 205 | 1,973 | 6,637 |
| Revenue | 438,462 | 416,882 | 139,252 | 242,264 | 758,737 |
| Cost from rental activities | (133,746) | (101,916) | (43,826) | (48,078) | (153,274) |
| Other operational costs from development and privatisation sales | (74,674) | (111,920) | (9,119) | (93,558) | (330,162) |
| Net operating income (NOI) | 230,041 | 203,045 | 86,307 | 100,628 | 275,302 |
| Overhead costs from rental activities | (41,424) | (30,427) | (13,382) | (13,689) | (43,619) |
| Overhead costs from development and privatisation sales | (11,612) | (14,909) | (1,726) | (14,909) | (24,114) |
| Fair value gain from build-to-hold development | 61,384 | - | - | - | 39,780 |
| EBITDA Total | 238,389 | 157,710 | 71,199 | 72,030 | 247,349 |
| Net cash interest | (69,560) | (68,173) | (14,691) | (38,455) | (101,954) |
| Other net financial costs | (176,120) | (144,702) | (73,582) | (20,137) | (88,112) |
| Depreciation and amortisation | (11,397) | (6,922) | (3,813) | (4,162) | (11,304) |
| Other income/(expenses) | 10,220 | 16,691 | (9,517) | (27,643) | (65,667) |
| Change in valuation | 509,397 | 189,084 | 30,829 | 47,856 | 373,895 |
| Net income from at-equity valued investments | (47) | (1,373) | 53 | (1,737) | (5,666) |
| EBT | 500,882 | 142,315 | 478 | 27,752 | 348,542 |
| Income from rental activities | 344,350 | 266,114 | 113,843 | 118,217 | 383,906 |
|---|---|---|---|---|---|
| Income from property development | 78,544 | 141,506 | 19,636 | 117,536 | 134,634 |
| Income from other services | 10,446 | 4,538 | 5,568 | 4,538 | 14,893 |
| Income from real estate inventory disposed of | - | - | - | - | 218,667 |
| Income from sale of trading properties | 5,122 | 4,724 | 205 | 1,973 | 6,637 |
| Revenue | 438,462 | 416,882 | 139,252 | 242,264 | 758,737 |
| Cost from rental activities | (133,746) | (101,916) | (43,826) | (48,078) | (153,274) |
| Other operational costs from development and privatisation sales | (74,674) | (111,920) | (9,119) | (93,558) | (330,162) |
| Net operating income (NOI) | 230,041 | 203,045 | 86,307 | 100,628 | 275,302 |
| Overhead costs from rental activities | (41,424) | (30,427) | (13,382) | (13,689) | (43,619) |
| Overhead costs from development and privatisation sales | (11,612) | (14,909) | (1,726) | (14,909) | (24,114) |
| Fair value gain from build-to-hold development | 61,384 | - | - | - | 39,780 |
| EBITDA Total | 238,389 | 157,710 | 71,199 | 72,030 | 247,349 |
| Net cash interest | (69,560) | (68,173) | (14,691) | (38,455) | (101,954) |
| Other net financial costs | (176,120) | (144,702) | (73,582) | (20,137) | (88,112) |
| Depreciation and amortisation | (11,397) | (6,922) | (3,813) | (4,162) | (11,304) |
| Other income/(expenses) | 10,220 | 16,691 | (9,517) | (27,643) | (65,667) |
| Change in valuation | 509,397 | 189,084 | 30,829 | 47,856 | 373,895 |
| Net income from at-equity valued investments | (47) | (1,373) | 53 | (1,737) | (5,666) |
| EBT | 500,882 | 142,315 | 478 | 27,752 | 348,542 |
Financial Overview
FFO
FFO 1 (from rental activities)
| FFO 1 per share | 0.87 | 1.06 | 0.30 | 0.32 | 1.34 | |
|---|---|---|---|---|---|---|
| No. of shares(*) | 117,510 | 70,565 | 117,510 | 97,991 | 79,771 | |
| FFO 1 (from rental activities) | 101,900 | 74,738 | 35,098 | 31,804 | 107,128 | |
| Interest of minority shareholders | (5,799) | (3,999) | (1,956) | (2,047) | (6,080) | |
| Current income taxes | (5,013) | (4,688) | (833) | (1,971) | (3,648) | |
| Net cash interest | (56,468) | (50,346) | (18,749) | (20,628) | (70,157) | |
| EBITDA from rental activities | 169,180 | 133,771 | 56,636 | 56,450 | 187,014 | |
| In EUR thousand | 30 Sep 2021 |
30 Sep 2020 |
30 Sep 2021 |
30 Sep 2020 |
31 Dec 2020 |
|
| 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)
| Interest of minority shareholders | (5,799) | (3,999) | (1,956) | (2,047) | (6,080) |
|---|---|---|---|---|---|
| Current income taxes | (14,067) | (11,868) | 5,105 | (6,028) | (12,660) |
| Net cash interest | (69,560) | (68,173) | (14,691) | (38,455) | (101,954) |
| EBITDA Total | 238,389 | 157,710 | 71,199 | 72,030 | 247,349 |
| In EUR thousand | 30 Sep 2021 |
30 Sep 2020 |
30 Sep 2021 |
30 Sep 2020 |
31 Dec 2020 |
| 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.
Financial and asset position
The Group's total assets increased from EUR 14.8 billion on 31 December 2020 to EUR 15.8 billion as at 30 September 2021. The Company has updated the fair value of the yielding properties based on a third-party valuation.
Financial position
| In EUR thousand | 30 Sep 2021 | 31 Dec 2020 |
|---|---|---|
| Investment properties and advances related to investment properties | 11,212,701 | 10,110,842 |
| Other non-current assets | 1,427,934 | 1,839,086 |
| Non-current assets | 12,640,635 | 11,949,928 |
| Cash and cash deposits | 395,944 | 371,574 |
| Inventories | 1,711,400 | 1,254,460 |
| Other current assets | 1,046,883 | 1,122,316 |
| Current assets | 3,154,227 | 2,748,350 |
| Non-current assets held for sale | 36,628 | 139,361 |
| Total assets | 15,831,490 | 14,837,639 |
| Interest-bearing debts | 8,552,204 | 7,965,429 |
| Other liabilities | 1,014,133 | 994,171 |
| Deferred tax liabilities | 1,073,128 | 933,226 |
| Liabilities classified as available for sale | - | 27,271 |
| Total liabilities | 10,639,465 | 9,920,097 |
| Total equity attributable to owner of the Company | 4,441,326 | 4,145,531 |
| Non-controlling interests | 750,699 | 772,011 |
| Total equity | 5,192,025 | 4,917,542 |
| Total equity and liabilities | 15,831,490 | 14,837,639 |
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
| 30 Sep 2021 | ||||
|---|---|---|---|---|
| In EUR thousand | NAV | NRV | NTA | NDV |
| Total equity attributable to owners of the Company | 4,441,326 | 4,441,326 | 4,441,326 | 4,441,326 |
| Revaluation of inventories | 80,932 | 80,932 | 80,932 | 80,932 |
| Deferred tax | 1,177,334 | 1,177,334 | 1,015,818 | - |
| Goodwill | - | - | (1,174,561) | (1,174,561) |
| Fair value of financial instruments | 3,294 | 3,294 | 3,294 | - |
| Fair value of fixed interest rate debt | - | - | - | 316,880 |
| Real estate transfer tax | - | 896,155 | 639,004 | - |
| EPRA NAV | 5,702,885 | 6,599,040 | 5,005,812 | 3,664,577 |
| No. of shares | 117,510 | 117,510 | 117,510 | 117,510 |
| EPRA NAV per share | 48.53 | 56.16 | 42.60 | 31.19 |
| Convertibles | 98,663 | 98,663 | 98,663 | 98,663 |
| EPRA NAV fully diluted | 5,801,549 | 6,697,704 | 5,104,475 | 3,763,240 |
| No. of shares (diluted) | 118,694 | 118,694 | 118,694 | 118,694 |
| EPRA NAV per share fully diluted | 48.88 | 56.43 | 43.01 | 31.71 |
EPRA NAVs
| 31 Dec 2020 | ||||
|---|---|---|---|---|
| In EUR thousand | NAV | NRV | NTA | NDV |
| Total equity attributable to owners of the Company | 4,145,531 | 4,145,531 | 4,145,531 | 4,145,531 |
| Revaluation of inventories | 52,160 | 52,160 | 52,160 | 52,160 |
| Deferred tax | 1,010,868 | 1,010,868 | 868,304 | - |
| Goodwill | - | - | (1,204,934) | (1,204,934) |
| Fair value of financial instruments | 5,315 | 5,315 | 5,315 | - |
| Fair value of fixed interest rate debt | - | - | - | (328,791) |
| Real estate transfer tax | - | 823,284 | 576,207 | - |
| EPRA NAV | 5,213,874 | 6,037,159 | 4,442,583 | 2,663,966 |
| No. of shares | 117,510 | 117,510 | 117,510 | 117,510 |
| EPRA NAV per share | 44.37 | 51.38 | 37.81 | 22.67 |
| Convertibles | 97,623 | 97,623 | 97,623 | 97,623 |
| EPRA NAV fully diluted | 5,311,497 | 6,134,782 | 4,540,205 | 2,761,588 |
| No. of shares (diluted) | 119,427 | 119,427 | 119,427 | 119,427 |
| EPRA NAV per share fully diluted | 44.47 | 51.37 | 38.02 | 23.12 |
Loan-to-value
We fund our properties based on a conservative financing strategy with a mix of secured mortgage loans and capital market instruments.
| In EUR thousand | 30 Sep 2021 | 31 Dec 2020 |
|---|---|---|
| Corporate bonds and other loans and borrowings | 8,336,630 | 7,653,457 |
| Convertible bonds | 215,574 | 311,972 |
| Cash and cash equivalents | (395,944) | (371,574) |
| Selected financial assets(*) | (562,956) | (1,194,866) |
| Net contract assets | (113,275) | (136,606) |
| Assets and liabilities classified as held for sale | (36,628) | (112,090) |
| Net financial liabilities | 7,443,401 | 6,150,293 |
| Fair value of properties (including advances) | 13,018,158 | 11,430,611 |
| Investment in real estate companies | 33,027 | 84,816 |
| Gross asset value (GAV) | 13,051,185 | 11,515,427 |
| Net loan-to-value | 57.0% | 53.4% |
| Net loan-to-value excluding convertibles | 55.4% | 50.7% |
(*) Including net financial receivables (EUR 28 million), trade receivables from the sale of real estate investment (EUR 267 million) and other financial assets (EUR 268 million).
For the LTV calculation, the net financial liabilities are adjusted for selected financial assets like purchase price receivables, among others. The fair value of the properties including advances is adjusted for property, plant and equipment used for energy management and property management services and for investments in real estate companies.
As at the reporting date, our net loan-to-value (LTV) was 57.0%.
Material Events in the Reporting Period and Subsequent Events
A. On 30 January 2020, the World Health Organisation (WHO) declared an international health emergency due to the outbreak of the coronavirus. Since 11 March 2020, the WHO has classified the spread of the coronavirus as a pandemic. Adler Group is continuously assessing the impact of Covid-19. The valuation of the investment properties, financial assets and financial liabilities as at 30 September 2021 as disclosed in these consolidated interim financial statements reflects the economic conditions in existence at that date. The Company does not expect the crisis to have any material impact on rental income. In Germany, rents are still continuing to rise and the demand for living space is increasing as well. This leads to a very low risk of losing tenants and a high occupancy rate due to a change in the general condition on the residential markets.
B. On 7 January 2021, Consus, a 94 percent subsidiary of the Group, successfully completed the disposal of 24 non-strategic projects. Together with proceeds received from the successful closing of the disposal of approximately 5,000 residential units as announced in September 2020, the Group generated total proceeds in the amount of EUR 850 million. These proceeds were used to repay existing debt, to further smoothen the maturity profile and to reduce the average cost of debt.
C. On 8 January 2021, the Group successfully placed EUR 1.5 billion fixed rate senior unsecured notes comprising of two tranches, a EUR 700 million 5-year maturity with a 1.875 percent fixed coupon and a EUR 800 million 8-year maturity with a 2.25 percent fixed coupon. The proceeds of the issue of the notes were used to repay existing indebtedness, to further smoothen and extend the Group's debt maturity profile and as a next step to achieve the targeted financial synergies. Subsequent to the placement, the Group redeemed approximately EUR 329 million of ADLER Real Estate AG's EUR 500 million bond due in December 2021.
D. In January 2021, BCP, a subsidiary of the Group, signed a refinancing agreement with a German banking corporation for a loan of approximately EUR 100.5 million. The loan bears an average annual interest rate of approximately 1.41% with maturity date in June 2023.
E. In January 2021, the outstanding amount under the bridge loan facility agreement (outstanding volume as at 31 December 2020: EUR 371 million) was repaid. At the same time the bridge loan facility agreement was terminated.
F. Upon entry into the commercial register on 23 February 2021, the debt-to-equity swap agreement concluded in 2020 became legally effective. As a result, the Group's share in ADLER Real Estate Aktiengesellschaft increased from approximately 93.9 percent to 96.6 percent. In the course of this transaction, Adler Group S.A. acquired 35,107,487 additional ADLER shares against contribution in kind of EUR 478 million. Due to the consolidation of ADLER, the step up did not have an impact on the Group's assets and liabilities. However, the Group adjusted the carrying amounts of the controlling and non-controlling interests to reflect the changes in the relative interests in the subsidiary accordingly.
G. On 15 March 2021, the Company signed a EUR 300 million syndicated revolving credit facility with JP Morgan, Deutsche Bank and Barclays as lenders for a 3-year term with two extension options, each for one year. At the same time the three bilateral RCFs with the same lenders were terminated. At the time of the approval of these consolidated financial statements, the total amount of EUR 300 million were borrowed under the RCF as a further liquidity cushion and to enhance the Group's flexibility.
H. In March 2021, Westgrund, a subsidiary of the Group, raised a secured loan of EUR 400 million with a 7-year term and a fixed interest rate of 1.6 percent, replacing the current outstanding loan of EUR 191 million due in December 2021.
I. In March and April 2021, the Group raised a secured banking loan of EUR 100 million in total. The loan has an interest rate of 1.25 percent p.a. and a maturity term to 2028.
J. On 16 April 2021, the Federal Constitutional Court in Karlsruhe ruled that Berlin's rent freeze is unconstitutional, thus declaring the highly controversial Act on Rent Restrictions in the Housing Sector in Berlin (MietenWoG Bln) incompatible with Basic Law and therefore null and void. In the opinion of the Second Senate of the Federal Constitutional Court, the state of Berlin had no right to limit rent levels by means of a so-called "rent freeze" in the German capital due to a lack of legislative competence, as the federal legislation had exhaustively regulated rent law in the German Civil Code (BGB). The Adler Group has offered its tenants individual solutions for repayments.
K. On 21 April 2021, Adler Group S.A. successfully placed EUR 500 million fixed rate senior unsecured notes with a 6-year maturity and a 2.25 percent fixed coupon under its newly established EMTN programme. The notes were placed with institutional investors across Europe with a total order book of EUR 1.1 billion. The proceeds of the issue of the notes were used to call and repay the EUR 450 million 9.625 percent high yield bond issued by Consus Real Estate AG. In addition to the announced EUR 93.8 million run-rate financial synergies, which were realised as at the end of 31 March 2021, this refinancing will enable Adler Group to realise a further EUR 33 million of annualised financial synergies. It will have a positive impact on all debt KPIs, including average cost of debt, which is expected to come down to 2.2 percent, as well as extending the debt maturity profile to 4.5 years. The notes are rated BB+ with S&P, driven by the strong recovery rating of the bonds and influenced by Adler Group's valuable asset base.
L. On 17 May 2021, the Consus Bond 2019/2024 with a nominal outstanding amount of EUR 450 million was redeemed before its due date. In connection with the redemption, early repayment fees of EUR 21.7 million were incurred. The derecognition of the bond including the embedded derivative led to a net loss of EUR 24.6 million which is shown in net finance costs.
M. In the second quarter of 2021, Adler Group increased its shareholding in Consus from 93.9 percent to 96.9 percent. The Group adjusted the carrying amounts of the controlling and non-controlling interests to reflect the changes in the relative interests in the subsidiary accordingly.
N. On 25 June 2021, Adler Group established a commercial paper programme which allows the Company to issue short-term notes up to a maximum aggregate amount of EUR 500 million for interim financings of general corporate purposes. As per the balance sheet date, an amount of EUR 5 million was outstanding under the commercial paper programme.
O. At the annual General Meeting of shareholders held on 29 June 2021, a dividend in an amount of EUR 0.46 per share (gross dividend in an aggregate amount of EUR 54.1 million) was declared.
P. On 20 July 2021, Adler Group sold 30,000 m² of the office development project in Frankfurt's banking district as part of the build-to-sell development pipeline (upfront sales) for EUR 185 million. Proceeds are expected to be received in Q4 of 2021 and will be used to repay debt in line with Group's deleveraging strategy. The sale follows the previously announced corporate strategy of focussing on the core business of residential real estate.
Q. On 11 August 2021, the international rating agency Standard and Poor's (S&P) published a full analysis report on Adler Group's "BB/stable" rating.
R. On 16 August 2021, Sustainalytics assigned a new ESG rating to Adler Group of 10.7, ranking the Group as the 46th best real estate company in Sustainalytics' global coverage of 1,001 real estate companies, positioning the Group in the top 5% of the real estate coverage. Adler Group has also become a member of the UN Global Compact and the German Association of Sustainable Building (DGNB), committing to build carbon-neutral buildings for a better future.
S. In August 2021 the Group learned that there are delays of the zoning plan approvals in connection with the Gerresheim project in Düsseldorf (Glasmacherviertel GmbH & Co. KG), which has already been sold, due to objections by Deutsche Bahn AG. According to the Group's estimation and based on the information provided to it by the authorities in Germany, the approval is expected during the year 2022. In order to prevent further delays caused by the objections of Deutsche Bahn AG, the Group is holding discussions with the Düsseldorf municipality regarding the possibility of dividing the zoning plan.
Due to the delays of the zoning plan approvals in connection with the project in Düsseldorf, which has already been sold, and the process initiated as a result to prepare a cancellation of the sales agreement, the Company reassessed its rights and obligations under the contract in particular its right to cancel the agreement. As a conclusion the Company effectively controls the investee which was previously held as an investment accounted for under the equity method. Therefore, the Company fully consolidated the investee which mainly includes a development property and the associated financing arrangement. As a main result of the full consolidation of the investee, the investment properties increased by EUR 270 million and other loans and borrowings by EUR 148 million respectively. In return, the at equity investment and purchase price receivable were derecognised, while the shareholder loan is consolidated again. The fair value measurement of the development according to IAS 40 led to a negative change in an amount of EUR 126 million (before deferred tax gain of EUR 20 million). The fair value of the investment property was determined by an independent valuation expert with appropriate, recognised professional qualifications and recent experience regarding the location and category of the properties being valued.
T. In the third quarter of 2021 the Group raised secured financings in an aggregate amount of approximately EUR 177 million with maturities ranging from 4 to 10 years and interest rates between 0.8% and 1.6%. A project loan of EUR 170 million carrying a coupon of 3.5% was repaid. The repayment of this loan for the Holsten Quartier project, a subsidiary of Consus, led to a further reduction of debt at the level of Consus in line with our financing strategy. The ADLER convertible bond 2016/2021 with a coupon of 1.5% was redeemed at maturity. The nominal amount at maturity that was not converted amounted to EUR 90.3 million.
U. On 4 October 2021 Adler Group decided to initiate a review of strategic options after being approached multiple times by interested institutional parties relating to its yielding assets portfolio which could result in a sale of a material part of its yielding assets, following strong inbound demand and recent upward market valuations. Proceeds from such disposals aim to significantly reduce leverage and also to return capital to bond and equity holders.
V. Adler Group has appointed KPMG's specialised forensic accounting division to review amongst others certain historical transactions. Adler Group will receive a full report from KPMG upon completion of its review and KPMG will in the meantime immediately notify Adler Group board of any material findings.
W. On 11 October 2021, the international rating agency Standard and Poor's (S&P) has downgraded Adler Group's rating to "B+/watch negative" from BB/stable. The notes are rated BB- with S&P.
X. On 11 October 2021, Adler Group and LEG Immobilien SE ("LEG") signed a term sheet setting out the key points of a transaction regarding the sale of a total of 15,350 residential units and 185 commercial units. The transaction is based on a real estate portfolio value of approximately EUR 1.4 billion. This is above the respective book values as of 30 June 2021. The assets to be disposed of are located amongst others in Wilhelmshaven, Göttingen and Wolfsburg, thus increasing the focus of the remaining Adler Group portfolio on Germany's strong top 7 cities. The transaction shall be executed by way of share deals. Therefore, the cash inflow, also due to customary purchase price adjustments, will deviate from the real estate valuation. The sale may lead to a significant reduction in ADLER's leverage and return capital to its bond holders. The closing of the transaction is subject to due diligence conducted by LEG, the conclusion of final agreements and the fulfillment of customary market conditions, in particular regulatory approvals, and is expected to take place by the end of 2021.
Y. On 26 October 2021, Adler Group signed a term sheet with a leading alternative investment firm setting out the key points of a transaction regarding a total of 14,368 units. These units are mainly located in the Eastern part of Germany. According to the term sheet, the agreed real estate value for the portfolio amounts to more than EUR 1 billion. This is a premium compared to the respective book values appraised by CBRE as of 30 June 2021. The sale may lead to a significant reduction in Adler Group's leverage and return capital to its bond holders.
The closing of the transaction is subject to due diligence conducted by the buyer, the conclusion of final agreements and the fulfillment of customary market conditions, in particular regulatory approvals, and is expected to take place in Q1 2022. As this transaction marks the end of the announced strategic asset disposals, Adler Group is now focussing on selling non-core development projects to further decrease its LTV and its development exposure.
Z. On 28 October 2021, Adler Group announced that as of 1 November 2021, Dr. Bernd Schade will become Chief Development Officer (CDO) of Adler Group. He will also join Theo Gorens on the Executive Board of the Group company Consus Real Estate AG. Bernd Schade succeeds Jürgen Kutz. Bernd Schade has decades of experience in project development and project management of real estate projects throughout Germany.
Forecast Report
Forecast for 2021
For the 2021 financial year, Adler Group expects to generate net rental income in the range of EUR 340-345 million and FFO 1 in the range of EUR 135-140 million.(*)
The Company has also added additional KPIs and targets to its guidance, all details of which are included in the table below:
FY 2021 guidance
| Net rental income | EUR 340-345m |
|---|---|
| FFO 1 | EUR 135-140m |
| Dividend | EUR 0.57-0.60 per share(**) |
| 50% of FFO 1 | |
|---|---|
Mid-term Guidance
| LFL rental growth | approx. 3% p.a. |
|---|---|
| Medium-term LTV target | <50% |
(*) Please note that the guidance for both net rental income and FFO 1 was increased in August 2021 on the back of the better-than-expected operational performance of the portfolio in cities outside Berlin as well as the cancellation of the Berlin rent freeze. (**) Implied dividend range on basis of the FFO 1 guidance range of EUR 135-140m, and company dividend policy of 50% payout ratio, subject to final board approval and shareholder approval in the annual General Meeting in 2022.
Maximilian Rienecker CO-CHIEF EXECUTIVE OFFICER
Thierry Beaudemoulin CO-CHIEF EXECUTIVE OFFICER
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 2021 Quarterly Financial Statements, prepared in conformity with 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.
3 Condensed Consolidated Interim Financial Statements
-
-
- 58 Condensed Consolidated Interim Statement of Financial Position
- 60 Condensed Consolidated Interim Statement of Profit or Loss
- 61 Condensed Consolidated Interim Statement of Comprehensive Income
- 62 Condensed Consolidated Interim Statement of Cash Flows
- 64 Condensed Consolidated Interim Statement of Changes in Equity
Annual Report 2020 Condensed Consolidated Interim Financial Statements
| In EUR thousand | 30 Sep 2021 | 31 Dec 2020 |
|---|---|---|
| Assets | ||
| Non-current assets | ||
| Investment properties | 11,210,596 | 10,108,888 |
| Investments in financial instruments | 23,030 | 23,219 |
| Investments accounted under the equity method | 33,027 | 84,816 |
| Advances related to investment properties | 2,105 | 1,954 |
| Property, plant and equipment | 35,008 | 36,663 |
| Other financial assets | 98,777 | 416,207 |
| Restricted bank deposits | 23,405 | 34,587 |
| Deferred expenses | 977 | 342 |
| Right-of-use assets | 16,019 | 17,858 |
| Goodwill | 1,174,561 | 1,204,934 |
| Other intangible assets | 3,424 | 4,538 |
| Contract assets | 11,126 | 8,044 |
| Deferred tax assets | 8,580 | 7,878 |
| Total non-current assets | 12,640,635 | 11,949,928 |
| Current assets | ||
| Inventories | 1,711,400 | 1,254,460 |
| Restricted bank deposits | 53,252 | 62,633 |
| Trade receivables | 351,191 | 424,998 |
| Other receivables | 519,858 | 477,248 |
| Contract assets | 110,933 | 154,432 |
| Cash and cash equivalents | 395,944 | 371,574 |
| Advances paid on inventories | 11,649 | 3,005 |
| Total current assets | 3,154,227 | 2,748,350 |
| Non-current assets held for sale | 36,628 | 139,361 |
| Total assets | 15,831,490 | 14,837,639 |
Shareholders' equity and liabilities Shareholders' equity Liabilities Non-current liabilities Current liabilities
| In EUR thousand | 30 Sep 2021 | 31 Dec 2020 |
|---|---|---|
| Shareholders' equity and liabilities | ||
| Shareholders' equity | ||
| Share capital | 146 | 146 |
| Share premium | 1,844,164 | 1,892,145 |
| Reserves | 206,073 | 197,551 |
| Retained earnings | 2,390,943 | 2,055,689 |
| Total equity attributable to owners of the Company | 4,441,326 | 4,145,531 |
| Non-controlling interests | 750,699 | 772,011 |
| Total equity | 5,192,025 | 4,917,542 |
| Liabilities | ||
| Non-current liabilities | ||
| Corporate bonds | 4,270,367 | 3,216,058 |
| Convertible bonds | 213,949 | 212,485 |
| Other loans and borrowings | 2,762,932 | 2,658,653 |
| Other financial liabilities | 34,434 | 38,878 |
| Derivatives | 3,377 | 20,848 |
| Pension provisions | 1,855 | 1,817 |
| Lease liabilities | 21,012 | 25,714 |
| Other payables | 11,117 | 11,905 |
| Deferred tax liabilities | 1,073,128 | 933,226 |
| Total non-current liabilities | 8,392,171 | 7,119,584 |
| Current liabilities | ||
| Corporate bonds | 579,293 | 512,904 |
| Convertible bonds | 1,625 | 99,487 |
| Other loans and borrowings | 724,038 | 1,265,842 |
| Other financial liabilities | 1,915 | 1,915 |
| Trade payables | 66,363 | 118,610 |
| Other payables | 622,497 | 440,842 |
| Lease liabilities | 7,303 | 8,019 |
| Prepayments received | 235,151 | 299,361 |
| Contract liabilities | 8,784 | 25,870 |
| Derivatives | 325 | 392 |
| Total current liabilities | 2,247,294 | 2,773,242 |
| Non-current liabilities held for sale | - | 27,271 |
| Total shareholders' equity and liabilities | 15,831,490 | 14,837,639 |
Condensed Consolidated Interim Statement of Financial Position
Date of approval: 29 November 2021
3 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Condensed Consolidated Interim Statement of Financial Position
Maximilian Rienecker CO-CHIEF EXECUTIVE OFFICER Thierry Beaudemoulin CO-CHIEF EXECUTIVE OFFICER
For the nine months ended 30 September
For the three months ended 30 September
| In EUR thousand | 2021 | 2020(*) | 2021 | 2020(*) |
|---|---|---|---|---|
| Profit / (loss) for the period | 379,521 | 97,637 | (8,701) | 11,947 |
| Items that may be reclassified subsequently to profit or loss | ||||
| Hedging reserve classified to profit or loss, net of tax | 317 | - | 256 | - |
| Effective portion of changes in fair value of cash flow hedges | 254 | 312 | (106) | (222) |
| Related tax | 159 | 73 | 61 | 138 |
| Currency translation reserve | 10,526 | (6,252) | 7,364 | (6,252) |
| Reserve from financial assets measured at fair value through other comprehensive income |
(2,734) | (4,883) | (2,350) | (320) |
| Items that may not be reclassified subsequently to profit or loss | ||||
| Reserve from financial assets measured at fair value through other comprehensive income |
- | (42,803) | - | (300) |
| Total other comprehensive income / (loss) | 8,522 | (53,553) | 5,225 | (6,957) |
| Total comprehensive income for the period | 388,043 | 44,084 | (3,476) | 4,990 |
| attributable to: | ||||
| Owners of the Company | 343,192 | 8,393 | 14,191 | (2,252) |
| Non-controlling interests | 44,851 | 35,691 | (17,667) | 7,242 |
| Total comprehensive income for the period | 388,043 | 44,084 | (3,476) | 4,990 |
(*) Prior period's profit (EUR -2.2 million) retrospectively restated according to IFRS 3.45. Refer to Note 5 Annual Report 2020.
Condensed Consolidated Interim Statement of Comprehensive Income
| For the nine months ended 30 September |
For the three months ended 30 September |
||||
|---|---|---|---|---|---|
| In EUR thousand | 2021 | 2020(*) | 2021 | 2020(*) | |
| Revenue | 438,462 | 387,429 | 139,252 | 212,811 | |
| Cost of operations | (209,939) | (194,296) | (63,084) | (120,116) | |
| Gross profit | 228,523 | 193,133 | 76,168 | 92,695 | |
| General and administrative expenses | (85,347) | (66,872) | (23,910) | (39,887) | |
| Other expenses | (13,984) | (51,638) | (1,886) | (26,696) | |
| Other income | 46,636 | 90,744 | 7,497 | 12,001 | |
| Changes in fair value of investment properties | 570,781 | 189,084 | 30,829 | 47,856 | |
| Results from operating activities | 746,609 | 354,451 | 88,698 | 85,969 | |
| Finance income | 117,459 | 62,325 | (7,483) | 58,002 | |
| Finance costs | (363,139) | (275,200) | (80,790) | (116,594) | |
| Net finance income / (costs) | (245,680) | (212,875) | (88,273) | (58,592) | |
| Net income (losses) from investments in associated companies | (47) | (1,373) | 53 | (1,737) | |
| Profit / (loss) before tax | 500,882 | 140,203 | 478 | 25,640 | |
| Income tax benefit (expenses) | (121,361) | (42,566) | (9,179) | (13,693) | |
| Profit / (loss) for the period | 379,521 | 97,637 | (8,701) | 11,947 | |
| Profit attributable to: | |||||
| Owners of the Company | 334,670 | 61,946 | 8,967 | 4,705 | |
| Non-controlling interests | 44,851 | 35,691 | (17,668) | 7,242 | |
| Profit / (loss) for the period | 379,521 | 97,637 | (8,701) | 11,947 | |
| Earnings per share in EUR (undiluted) | 2.85 | 0.88 | 0.08 | 0.05 | |
| Earnings per share in EUR (diluted) | 2.78 | 0.88 | 0.08 | 0.05 |
(*) Prior period's revenue (EUR -29.5 million), cost of sales (EUR -27.3 million) and profit (EUR -2.2 million) retrospectively restated according to IFRS 3.45. Refer to Note 5 Annual Report 2020.
Condensed Consolidated Interim Statement of Profit or Loss
Condensed Consolidated Interim Statement of Cash Flows
| For the nine months ended 30 September |
For the three months ended 30 September |
||||
|---|---|---|---|---|---|
| In EUR thousand | 2021 | 2020(*) | 2021 | 2020(*) | |
| Cash flows from operating activities | |||||
| Profit / (loss) for the period | 379,521 | 97,637 | (8,701) | 11,947 | |
| Adjustments for: | |||||
| Depreciation | 11,098 | 6,922 | 3,694 | 4,129 | |
| Change in fair value of investment properties | (570,781) | (189,084) | (30,829) | (47,856) | |
| Non-cash other income and expense | (3,683) | (54,769) | (6,455) | 20,019 | |
| Change in contract assets | 24,419 | (70,139) | 17,731 | (70,139) | |
| Non-cash income from at-equity valued investment associates | 47 | 1,373 | (53) | 1,737 | |
| Change in contract liabilities | (24,817) | (4,187) | 2,169 | (4,187) | |
| Net finance costs / (income) | 245,680 | 212,875 | 88,273 | 58,592 | |
| Income tax expense | 121,361 | 42,566 | 9,179 | 13,693 | |
| Share-based payments | 567 | 358 | 189 | 131 | |
| Change in short-term restricted bank deposits related to tenants | 488 | (44,203) | 935 | (23,539) | |
| Change in long-term restricted bank deposits from condominium sales | 2,171 | (620) | 646 | (220) | |
| Change in trade receivables | 31,135 | 30,043 | (6,478) | 397,058 | |
| Change in other receivables | 63,431 | 52,181 | (16,191) | 47,732 | |
| Change in inventories | (257,786) | 48,543 | 3,084 | 43,549 | |
| Change in advances received | (64,210) | (22,995) | 2,314 | (22,995) | |
| Change in advances on development projects | - | 48,757 | - | 48,757 | |
| Change in trade payables | 3,040 | (55,501) | 4,506 | (425,811) | |
| Change in other payables | 60,466 | 96,621 | (9,431) | 119,868 | |
| Income tax paid | (19,646) | (4,328) | (12,442) | (3,727) | |
| Net cash from operating activities | 2,501 | 192,050 | 42,140 | 168,738 | |
| Cash flows from investing activities | |||||
| Purchase of and CAPEX on investment properties | (221,765) | (239,025) | (81,609) | (183,752) | |
| Advances paid for purchase of investment properties | (188) | 6,300 | (188) | - | |
| Grant of long-term loans | (3,704) | (103,547) | - | (60,005) | |
| Proceeds from disposals of investment properties | 189,638 | 38,129 | 24,108 | 107 | |
| Investments in financial instruments | (171,590) | (40,159) | (68,075) | 49,026 |
For the nine months ended 30 September
For the three months ended 30 September
| Proceeds from sale of financial instruments | 53,835 | 11,058 | 14,849 | 11,058 |
|---|---|---|---|---|
| Purchase of and CAPEX on property, plant and equipment | (2,765) | (1,969) | (1,174) | (1,196) |
| Interest received | 5,680 | 2,473 | 2,845 | 2,455 |
| Proceeds from sale of fixed assets | 698 | 17 | - | 17 |
| Acquisition of subsidiaries, net of acquired cash | 1,114 | (64,235) | 1,114 | - |
| Change in short-term restricted bank deposits, net | 4,666 | (601) (284) |
7 | |
| Net cash from (used in) investing activities | (144,381) | (391,559) | (108,414) | (182,283) |
| Cash flows from financing activities | ||||
| Acquisition of non-controlling interests | (78,461) | (20,220) | (18,000) | (13,962) |
| Issuance of ordinary shares | - | 457,338 | - | 457,338 |
| Repayment of bonds | (870,699) | (91,119) | (836) | |
| Long-term loans received | 832,611 | 1,376,821 | 258,634 | 53,631 |
| Repayment of long-term loans | (1,618,045) | (1,895,956) | (262,503) | (613,062) |
| Proceeds from issuance of corporate bonds, net | 1,951,053 | 390,601 | - | 390,601 |
| Short-term loans received | 314,999 | 175,522 | 314,999 | 522 |
| Upfront fees paid for credit facilities | (1,361) | (217) | (322) | - |
| Dividend distributed | (54,054) | - | (54,054) | - |
| Repayment of short-term loans | (55,387) | (284,703) | (619) | (284,703) |
| Interest paid | (216,609) | (115,703) | (49,332) | (76,583) |
| Payment of lease liabilities | (7,072) | (4,277) | (2,324) | (2,794) |
| Tax payments | (15,994) | - | (634) | - |
| Transaction costs | (13,496) | (25,137) | (2,011) | (18,481) |
| Prepaid costs of raising debt | (1,235) | (26,477) | (371) | (80) |
| Net cash from (used in) financing activities | 166,250 | 11,173 | 92,344 | (108,409) |
| Change in cash and cash equivalents during the period | 24,370 | (188,336) | 26,070 | (121,954) |
| Net cash and cash equivalents acquired as a result of business combination | - | 178,379 | - | 103,284 |
| Cash and cash equivalents at the beginning of the period | 371,574 | 387,558 | 369,874 | 396,271 |
| Cash and cash equivalents at the end of the period | 395,944 | 377,601 | 395,944 | 377,601 |
(*) Prior period's profit (EUR -2.2 million) retrospectively restated according to IFRS 3.45. Refer to Note 5 Annual Report 2020.
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 asset mea sured at FVTOCI |
Retained earnings |
Total | Non-con trolling interests |
Total equity |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2021 |
146 1,892,144 | (372) | (3,560) | 315,746 | (114,263) 2,055,689 4,145,530 772,010 4,917,540 | |||||
| Total comprehensive income / (loss) for the period |
||||||||||
| Profit / (loss) for the period |
- | - | - | - | - | - | 334,670 | 334,670 | 44,851 | 379,521 |
| Other comprehensive income / (loss), net of tax |
- | - | 730 | 10,526 | - | (2,734) | - | 8,522 | - | 8,522 |
| Total comprehensive income / (loss) for the period |
- | - | 730 | 10,526 | - | (2,734) | 334,670 | 343,192 | 44,851 | 388,043 |
| Transactions with owners, recognised directly in equity |
||||||||||
| Change in consolidation scope related to sale |
- | - | - | - | - | - | 17 | 17 | (920) | (903) |
| Changes in ownership interest without a change of control |
- | 6,074 | - | - | - | - | - | 6,074 (65,242) | (59,168) | |
| Changes in put option | - | - | - | - | - | - | - | - | - | - |
| Dividend distributed | - | (54,054) | - | - | - | - | - | (54,054) | - | (54,054) |
| Share-based payments | - | - | - | - | - | - | 567 | 567 | - | 567 |
| Balance as at 30 Sep 2021 |
146 1,844,164 | 358 | 6,966 | 315,746 | (116,997) 2,390,943 4,441,326 750,699 5,192,025 |
| In EUR thousand | Share capital |
Share premium |
Treasury shares |
Hed ging reser ve |
Cur rency trans lation reser ves |
Other capital reserves |
Reserve finan cial asset measu red at FVTOCI |
Retained earnings(*) |
Total(*) | Non-con trolling interests |
Total equity(*) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance as at 1 January 2020 |
55 500,608 | - (850) | - | 319,044 (67,510) 1,895,445 2,646,792 | 51,653 2,698,445 | ||||||
| Total comprehensive income / (loss) for the period |
|||||||||||
| Profit / (loss) for the period |
- | - | - | - | - | - | - | 61,946 | 61,946 | 35,691 | 97,637 |
| Other comprehensive income / (loss), net of tax |
- | - | - | 385 (6,252) | - | (47,686) | - | (53,553) | - | (53,553) | |
| Total comprehensive income / (loss) for the period |
- | - | - | 385 (6,252) | - (47,686) | 61,946 | 8,393 | 35,691 | 44,084 | ||
| Transactions with owners, recognised directly in equity |
|||||||||||
| Change relating to business combination ADLER |
34 600,396 (319,423) | - | - | - | - | - | 281,007 409,898 | 690,905 | |||
| Change relating to business combination Consus |
3 | 74,322 319,423 | - | - | - | - | - | 393,748 | 98,747 | 492,495 | |
| Issuance of ordinary shares, net |
38 | 445,832 | - | - | - | - | - | - | 445,870 | - | 445,870 |
| Transactions with non controlling interests without a change in control |
- | 99 | - | - | - | - | - | - | 99 (20,680) | (20,581) | |
| Changes in put option | - | - | - | - | - | (3,298) | - | - | (3,298) | 48,715 | 45,417 |
| Share-based payments | - | - | - | - | - | - | - | 358 | 358 | - | 358 |
| Balance as at 30 Sep 2020 |
130 1,621,257 | - (465) (6,252) | 315,746 (115,196) | 1,957,749 3,772,969 624,024 4,396,993 |
(*) Prior period's profit (EUR -2.2 million) retrospectively restated according to IFRS 3.45. Refer to Note 5 Annual Report 2020.
| 3 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
|---|
Condensed Consolidated Interim Statement of Changes in Equity
Financial Calendar 2022
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
The Company's quarterly financial statements are published in English and German. In case of conflicts, the English version shall always prevail. Both versions of the quarterly financial statements can be found on the website at:
Online Financial Calender
Adler Group S.A. publication dates 2022
| 31 March 2022 | Publication Annual Report 2021 |
|---|---|
| 31 May 2022 | Publication Q1 2022 Results |
| 31 August 2022 | Publication Q2 2022 Results |
| 30 November 2022 | Publication Q3 2022 Results |
Adler Group S.A.
1B Heienhaff 1736 Senningerberg Grand Duchy of Luxembourg
[email protected] www.adler-group.com
