Accentro Real Estate AG

Quarterly Report • Nov 30, 2023

Q3 2023

Key Figures

INCOME STATEMENT

TEUR

	01/01/2023 – 30/09/2023	01/01/2022 – 30/09/2022
Revenues	56,644	144,555
Gross profit (interim result)	9,656	35,391
EBIT	– 28,035	9,552
EBT	– 49,188	– 4,610
Consolidated total income	– 48,222	– 7,079
Earnings per share (EUR)	– 1.49	– 0.22

BALANCE SHEET RATIOS

TEUR

	30/09/2023	31/12/2022
Non-current assets	454,809	453,615
Current assets	301,146	423,511
Cash and cash equivalents	31,323	100,784
Equity ratio	26.4 %	28.2 %
Total assets	755,955	877,126
Loan to Value (LTV)	61.0 % / 61.0 %*	57.9 % / 51.0 %*

* based on the definition specified in the terms of the 2020/2026 bond

** based on the definition specified in the terms of the 2021/2029 bond

OTHER KEY FIGURES

	30/09/2023	31/12/2022
Shares outstanding	32,437,934	32,437,934
Market capitalisation (EUR)	52,549,453	72,012,213
Total portfolio (units)	5,731	5,903
Employees	88	123

Contents

• Letter to the Shareholders
• Preliminary Remarks
• Earnings, Financial Position and Assets
• Opportunity and Risk Report
• Forecast Report
• Consolidated Balance Sheet
• Consolidated Statement of Comprehensive Income
• Consolidated Statement of Changes in Equity
• Consolidated Cash Flow Statement
• Other Disclosures
• Forward-Looking Statements
• Financial Calendar
• Imprint

Letter to the Shareholders

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Dear Shareholders, Ladies and Gentlemen,

The development of the German residential property market continues to be severely impacted by the difficult economic environment. One important indicator is the transaction volume, which fell to its lowest level since 2010 in the period from January to September 2023.

Accordingly, ACCENTRO's business performance in the first nine months of 2023 continued to be affected by the weak market environment. Consolidated revenues fell to EUR 56.6 million (comparable period: EUR 144.6 million) and consolidated earnings before interest and taxes (EBIT) fell to EUR –28.0 million (comparable period: EUR 9.6 million). The earnings development was also affected by impairments of receivables totalling EUR 14.6 million. Consolidated total income fell to EUR –48.2 million (comparable period: EUR – 7.1 million) and consolidated earnings per share to EUR – 1.49 (comparable period: EUR – 0.22).

The effects of the general restraint and uncertainty among investors, which has persisted for some time, are strongly noticeable in apartment sales and the sales volume is significantly below the previous year's level. Accordingly, revenues fell to EUR 42.6 million (comparable period: EUR 130.7 million).

Through the expansion of the portfolio last year and rent increases, however, rental revenues again developed positively and exceeded the previous year's level at EUR 13.7 million (comparable period: EUR 12.7 million). Net rental income also improved significantly to EUR 5.7 million (comparable period: EUR 0.1 million).

Due to the still unpredictable business environment with a still tense market situation and persistently weak demand on the housing market, it is still not possible for the Management Board to provide a well-founded and reliable forecast scope for the current financial year. However, a significant reduction in consolidated revenues and consolidated EBIT compared to the previous forecast (revenues: EUR 100 to 120 million; EBIT: EUR 0 to 2 million) must still be expected for the 2023 financial year.

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Even if the market environment is likely to remain challenging for the time being, we are nevertheless looking to the future with more confidence. If inflation continues to fall, experts believe that interest rates will at least stagnate in the coming months. In addition, no further sharp falls in residential property prices are expected in the near future. A more stable financing environment and price level as a result are important prerequisites for investors' planning certainty to increase again and consequently could lead to a revival on the German residential property market – a market with a steadily increasing demand for housing and a supply that will be far too scarce for a long time, which offers great longterm growth potential and in which our company is ideally positioned with its many years of leading expertise in residential property privatisation and its attractive property portfolio.

Thank you for your trust!

Jörg Neuß Chief Executive Officer

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Preliminary Remarks

The condensed interim consolidated financial statements of ACCENTRO Real Estate AG (hereinafter referred to as "ACCENTRO Group" or "ACCENTRO") on which this report is based were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Currency figures quoted in this report are denominated in euros (EUR). Both individual and total values represent the value with the smallest rounding difference. Adding up the values of the individual line items may therefore result in minor differences compared to the reported totals.

Earnings, Financial Position and Assets

Earnings Position

ACCENTRO Group's key revenue and earnings figures developed as follows in the period from 1 January to 30 September 2023

EARNINGS POSITION

IN EUR M

9 MONTHS 2023	9 MONTHS 2022
56.6	144.6
– 28.0	9.6
– 48.2	– 7. 1

Consolidated revenues totalled EUR 56.6 million in the first nine months of the 2023 financial year (comparable period: EUR 144.6 million) and fell significantly by EUR 88.1 million or 67.4% compared to the previous year. This is primarily due to the decline in revenues from the sale of inventory

properties (reporting period: EUR 42.6 million, comparable period: EUR 130.7 million), which, in addition to the difficult market conditions, is also a consequence of the decline in notarisation volume since the second half of the previous year. The price trend on the market also had an impact on the gross margin trend in the trading and privatisation business (reporting period: EUR 1.5 million, comparable period: EUR 33.8 million). In the portfolio business, however, rental income increased again by 7.9 % to EUR 13.7 million (previous year: EUR 12.7 million) because of the expanded portfolio in the previous year and rent increases. Furthermore, the contribution margin of the portfolio business (revenues less property management costs) also significantly grew year-on-year to EUR 5.7 million (comparable period: EUR 0.1 million). In the previous year, various maintenance measures were carried out to reduce vacancies, which had a negative impact on the contribution margin. In the reporting period, these were only necessary on a selective basis.

At EUR 7.2 million, payroll and benefit costs were slightly below the level of the comparable period (EUR 7.8 million), which is attributable to restructuring measures and the resulting development of the average number of employees (reporting period: 102, comparable period: 118). As at 30 September 2023, ACCENTRO had 88 employees (30 September 2022: 123 employees).

The increase in depreciation and amortisation of intangible assets and property, plant and equipment in the amount of EUR 2.0 million results from scheduled depreciation and amortisation of acquisition costs capitalised in previous financial years relating to the expansion of the PropRate digital platform. Impairment losses of EUR 14.6 million (comparable period: EUR 4.1 million) were recognised on other receivables and other assets. Impairment losses of EUR 13.3 million were recognised on the purchase price receivable from the reversal of the acquisition of shares in DIM Holding AG and EUR 1.3 million as a result of overdue tenant receivables and specific valuation allowances.

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Other operating expenses totalling EUR 12.3 million were on previous year's level (EUR 12.2 million). The main items are legal and consulting costs (EUR 4.9 million), IT costs for administration and system integration services (EUR 1.8 million), expenses for preparing and auditing the financial statements (EUR 0.8 million) and increased advertising activities compared to the previous year (EUR 1.6 million).

Earnings before interest and taxes (EBIT) totalled EUR –28.0 million in the reporting period (comparable period: EUR 9.6 million). The year-on-year decline by EUR –37.6 million is mainly due to the result from the sale of inventory properties (EUR –32.2 million) and the impairment of receivables (EUR –14.6 million). This was offset by an increase in net rental income (EUR 5.6 million).

The interest result of EUR –21.2 million in the first nine months of the 2023 financial year (comparative period: EUR –14.4 million) is mainly driven by the effects of the refinancing of the two bonds issued in 2020/2026 (formerly the 2020/2023 bond) and 2021/2029 (formerly the 2021/2026 bond). The increase in interest expenses totalling EUR 24.7 million (comparative period: EUR 17.5 million) was offset by interest income of EUR 3.5 million (comparative period: EUR 3.1 million). In addition to the higher bond interest (EUR 13.1 million; comparative period: EUR 9.9 million), the significant increase is also due to the distribution of refinancing costs over the term of the bonds in accordance with IFRS 9 and the resulting increase in the effective interest rate of EUR 6.4 million (comparative period: EUR 3.0 million).

Earnings before taxes totalled EUR –49.2 million after EUR –4.6 million in the same period of the previous year. Considering income taxes totalling EUR 1.0 million (comparable period: EUR –2.5 million), consolidated total income amounted to EUR –48.2 million (comparable period: EUR –7.1 million), of which EUR –47.8 million is attributable to the shareholders of the parent company and EUR –0.4 million to non-controlling interests.

Financial position

KEY FIGURES FROM THE CASH FLOW STATEMENT

IN EUR M

	9 MONTHS 2023	9 MONTHS 2022
Cash flow from operating activities	28.8	69.9
Cash flow from investing activities	– 3.3	– 12.2
Cash flow from financing activities	– 94.8	– 56.4
Net change in cash and cash equivalents	– 69.2	1.2
Consolidation change in cash and cash equivalents	– 0.2	– 1.0
Cash and cash equivalents at the beginning of the period	100.8	121.5
Cash and cash equivalents at the end of the period	31.3	121.7

Cash flow from operating activities totalled EUR 28.8 million in the reporting period (comparable period: EUR 69.9 million). The declining but positive cash flow from operating activities in the financial year is mainly due to the decrease in the number of residential units sold as part of the privatisation process and the associated lower cash inflows (reporting period: EUR –5.5 million, comparable period: EUR 13.5 million). Trade receivables have an impact on cash flow, mainly due to impairments (EUR 13.2 million), cash inflows from contract assets (EUR 4.7 million) and the offsetting capitalisation of allocable operating costs during the year (EUR – 6.5 million) amounting to EUR 13.6 million (comparable period: EUR 2.2 million). Trade payables, on the other hand, had no significant impact (reporting period: EUR 0.2 million, comparable period: EUR 6.6 million). Significant cash changes resulted from the reduction in the portfolio of inventory properties totalling EUR 34.4 million (comparable period: EUR 56.3 million). Due to the classification of the properties as trading properties, investments in inventories are allocated to operating activities. Interest expenses from

financial liabilities and bonds are recognised separately and no longer under other non-cash expenses/income for a more transparent presentation.

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Cash flow from investing activities totalled EUR –3.3 million in the reporting period (comparable period: EUR 12.2 million). The negative cash flow is mainly due to payments for the acquisition of investment property as a result of refurbishment measures totalling EUR –2.1 million (comparative period: EUR –18.8 million) and investments in the PropRate Online platform (intangible assets) amounting to EUR –0.9 million (comparable period: EUR –0.5 million). In the previous year, on the other hand, ACCENTRO made portfolio purchases in the financial assets, which led to payments totalling EUR –18.8 million.

At EUR –94.8 million (comparable period: EUR –56.4 million), cash flow from financing activities in the reporting period was influenced by the cash outflow from the redemption of bonds and financial loans totalling EUR –80.7 million (comparable period: EUR –85.9 million). This includes a special repayment of EUR 25 million to the bondholders in March of the financial year. Interest and financing costs totalled EUR –31.1 million in the reporting period (comparable period: EUR –17.9 million), which is attributable to the prolongation of the two bonds and the associated increase in cash interest expenses and refinancing costs. This contrasts with cash inflows of EUR 48.6 million from taking out financial loans in the same period of the previous year, compared to EUR 17.1 million in the reporting period.

Cash and cash equivalents decreased by EUR 69.5 million in the reporting period (30 September 2023: EUR 31.3 million, 31 December 2022: EUR 100.8 million). This is mainly a result of the increased repayment of bonds and financial liabilities. The restrained operational privatisation business was only able to compensate for these cash outflows to a limited extent.

Financial position

BALANCE SHEET KEY FIGURES

IN EUR M

	30/09/2023	31/12/2022
Non-current assets	454.8	453.6
Intangible assets and goodwill	21.4	23.2
Owner-occupied properties and buildings	23.2	23.6
Property, plant and equipment	2.6	2.9
Investment properties	363.6	361.5
Non-current other receivables and other assets	29.4	27.5
Equity investments and equity interests accounted for using the equity method	13.6	13.4
Other non-current assets	1.0	1.5
Current assets	301.1	423.5
Inventories	203.9	234.9
Receivables and other current assets	95.9	87.8
Cash and cash equivalents	31.3	100.8
Equity	199.6	247.7
Non-current liabilities	358.3	220.6
Current liabilities	198.1	408.9
Total assets	756.0	877.1

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Total assets decreased by EUR 121.2 million to EUR 756.0 million compared to the reporting date of 31 December 2022 (31 December 2022: EUR 877.1 million). Inventories decreased by EUR 31.0 million to EUR 203.9 million (31 December 2022: EUR 234.9 million) as a result of the sale of properties in the trading portfolio. In addition, contract assets from the recognition of revenue over time in connection with the conversion of attic flats decreased by EUR 4.7 million to EUR 0.8 million (31 December 2022: EUR 5.5 million) due to purchase price payments. Loan repayments, impairments and the reversal of cash procurement costs capitalised as at 31 December 2022 in connection with the refinancing of the bonds reduced current other receivables and other assets by EUR 22.7 million to EUR 38.0 million (31 December 2022: EUR 60.8 million). In the third quarter, ACCENTRO partially adjusted the purchase price receivable from the reversal of the acquisition of shares in DIM Holding AG in the amount of EUR 13.3 million (for further details, see the section on the opportunity and risk report). The decrease in cash and cash equivalents of EUR 69.5 million in the first nine months of the financial year is characterised by interest and repayment obligations in connection with bond and financial liabilities as well as the restrained operational privatisation business.

Non-current liabilities of EUR 358.3 million (31 December 2022: EUR 220.6 million) increased by EUR 137.7 million in the first nine months of the financial year. Non-current liabilities mainly increased as a result of the extension of the two bonds 2020/2026 (formerly the 2020/2023 bond) and 2021/2029 (formerly the 2021/2026 bond) by three years each as at 6 March 2023. The 2020/2026 bond – nominal EUR 250.0 million – was still reported under current liabilities as at 31 December 2022 and is now reported under non-current liabilities. In contrast, bond liabilities totalling EUR 25.0 million were repaid and a further EUR 40.0 million in repayments were reported under current liabilities. Furthermore, non-current financial liabilities decreased in the financial year by EUR 35.8 million due to redemption payments and reclassifications due to time limits to current financial liabilities.

Current liabilities decreased by EUR 210.8 million compared to 31 December 2022 (EUR 408.9 million) to EUR 198.1 million, mainly due to the reclassification of the 2020/2026 bond from current to non-current liabilities in the first quarter of the financial year. As at the reporting date, there were current interest and redemption liabilities from bonds amounting to EUR 41.0 million (31 December 2022: EUR 255.1 million). In addition, other liabilities decreased by EUR 3.6 million, partly due to the offsetting of other purchase price liabilities against the receivable from the reversal of the acquisition of the shares in DIM Holding AG (EUR 2.6 million). In contrast, current financial liabilities increased by EUR 3.4 million as a result of the reclassification from non-current financial liabilities and by EUR 6.6 million due to increased advance payments received from operating costs not yet invoiced.

The ACCENTRO Group's equity fell from EUR 247.7 million as at 31 December 2022 to EUR 199.6 million as a result of the consolidated total income by EUR –48.1 million in the reporting period. By contrast, the equity ratio amounted to 26.4% compared to 28.2% as at 31 December 2022. The structure of the balance sheet has not changed significantly compared to the end of 2022. Reporting on the LTV (loan to value) is based on the respective bond terms, as the LTV is also monitored and reported internally in this way. Both the LTV for the 2020/2026 bond at 61.0% (31 December 2022: 57.9%) and the LTV for the 2021/2029 bond at 61.0% (31 December 2022: 51.0%) increased in the reporting period, but are within reasonable limits.

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Opportunity and Risk Report

The opportunities and risks to which the ACCENTRO Group is exposed in the course of its ongoing business activities were presented in detail in the 2022 Annual Report (published on 28 April 2023). In the course of the 2023 financial year to date, two known material risks have developed as follows:

Bad debt risk – DIM Holding AG

By share purchase agreement dated 29 December 2020, DIM Holding AG, Berlin, was acquired with economic effect from 1 January 2021. The provisional purchase price amounted to EUR 15.3 million, of which EUR 11.3 million related to the acquisition of 100% of the bearer shares and EUR 4.0 million to the assumption of a shareholder loan. The basis for the purchase price calculation was an externally commissioned expert opinion by a renowned tax consultancy firm.

The reason for the transaction was to bundle the entire property management of a significantly increased property portfolio with rental intentions from nine different managers to one manager. The economically attractive opportunity to take over the management of additional third-party units in the short term was also an important part of the purchase decision.

On 12 May 2021, ACCENTRO Real Estate AG withdrew from the aforementioned share purchase agreement with effect from 1 January 2021. The reasons for this rescission and the conclusion of the corresponding termination agreement were violations of the contractual agreements by the other party in the view of ACCENTRO Real Estate AG.

In the termination agreement of 12 May 2021, it was agreed that the repayment of the purchase price in the amount of EUR 15.3 million and the redemption amount of the assumed shareholder loan in the amount of EUR 3.0 million plus interest (5%) would be deferred until 12 May 2022.

As of 30 June 2022, the receivable from PVBI Property Value GmbH ("PVBI") was valued at EUR 17.5 million. This is EUR 2.2 million less than on the reporting date of 31 December 2022 (EUR 19.7 million). This amount is made up of the interest that continues to accrue (EUR 0.4 million), minus an offset (EUR –2.6 million). An offsetting agreement was concluded in this regard.

Selected collateral agreements were concluded to secure the claims.

• 1. PVBI has pledged the 1,208 shares in DIM Holding AG in favour of ACCENTRO Real Estate AG
• 1. SPREE Erste Beteiligungs GmbH has issued an acknowledgement of debt in favour of ACCENTRO Real Estate AG in the amount of EUR 15.8 million plus interest of 12% p.a. from 30 April 2021 with a submission to execution;
• 1. Cornelius I. RE GmbH, Storkwinkel 2 Immobilien GmbH, Koenigsallee 16 GmbH and North Gate Besitz GmbH have each encumbered their properties with a total land charge of EUR 20.0 million in favour of ACCENTRO Real Estate AG

In addition to realising the above collateral, an attempt was made to sell the GmbH shares in Cornelius I. RE GmbH, Storkwinkel 2 Immobilien GmbH and Koenigsallee 16 GmbH to ACCENTRO Real Estate AG, whereby the purchase prices for the respective GmbH shares were to be offset against PVBI's debt so that PVBI's debt would be partially reduced. The purchase agreements for the GmbH shares in Cornelius I. RE GmbH, Storkwinkel 2 Immobilien GmbH and Koenigsallee 16 GmbH were each subject to the condition that the financing banks had to approve the change in shareholders. However, as these approvals were not granted, the purchase agreements for the GmbH shares lapsed and cancellation had to be declared in each case. It was no longer possible to partially offset the purchase prices

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

from the above purchase agreements with payment claims against PVBI arising from and in connection with the cancellation of a share purchase agreement due to the respective declarations of rescission.

For this reason, due to the payment claims against PVBI, enforcement was initiated on the basis of the acknowledgement of debt issued by SPREE Erste Beteiligungs GmbH dated 28 April 2021, so that SPREE Erste Beteiligungs GmbH was requested to submit a statement of assets in September 2023.

SPREE Erste Beteiligungs GmbH did not fulfil this obligation towards the bailiff, so that an arrest warrant was issued against the debtor in this regard. However, SPREE Erste Beteiligungs GmbH notified ACCENTRO Real Estate AG of a private list of assets. ACCENTRO Real Estate AG subsequently applied for an attachment and transfer order in relation to the domestic account of SPREE Erste Beteiligungs GmbH at Berliner Sparkasse, which was issued by Charlottenburg Local Court on 17 November 2023. In addition, the proceedings to seize various foreign accounts are currently still ongoing.

The pledged shares of DIM Holding AG are still available as collateral for ACCENTRO Real Estate AG. With DIM Holding AG filing for insolvency under self-administration on 26 July 2023, these shares currently only represent collateral to a limited extent. Insolvency proceedings against the assets of DIM Holding AG were opened on 1 November 2023 due to insolvency and over-indebtedness.

As a result of the proceedings to date, the company is aware of some of the debtor's assets. However, the efforts of ACCENTRO Real Estate AG are currently not producing the desired result, with the result that the company has significantly written down the purchase price receivable by EUR 13.3 million. The balance of the remaining receivable as at 30 September 2023 is EUR 4.4 million. The specified collateral (including a global

land charge) remains in place on the properties and realisation efforts are continuing, meaning that the company currently assumes a probability of occurrence of a complete default on the residual receivable described of > 5% to 25%. This means that the risk of default is material and unlikely at < EUR 4.4 million (matrix box 2).

Bad debt risk – Green Living GmbH

On 31 May 2022, the ACCENTRO Group granted Green Living GmbH a short-term loan in the amount of EUR 15 million for the implementation and realisation of the project (former GDR State Security building in Hohenschönhausen) with a term until 31 December 2022. In the course of the loan agreement, the borrower granted collateral in the form of a land charge. The notarised land charge was created on 30 May 2022 to secure the loan. Furthermore, the parent company of Green Living GmbH has issued a letter of comfort as additional security.

The borrower did not meet the agreed repayment date (31 December 2022). The company is in close communication with the borrower. Green Living GmbH has been able to credibly demonstrate to ACCENTRO Real Estate AG that delays were caused by various circumstances beyond its control, by a change of architect, as well as by further enquiries from the building authorities and a slow process at the authorities, which were unexpected but in no way call the project into question. The company has been informed that Green Living GmbH is expecting a large influx of funds in the near future, but this has been delayed. When the borrower receives the funds, it intends to settle the claim plus interest in full. The borrower has stated that it will repay the full amount of the loan plus interest in the current financial year.

The loan receivable is being closely monitored and managed at the highest management level within the framework of risk management in order to achieve an amicable solution with a focus on the repayment of the loan amount plus interest.

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Should this not occur, ACCENTRO Real Estate AG would have options from the collateral granted to it to satisfy itself from the land charge of the company or other properties of the borrower. This claim could also lead to a repayment of the outstanding liquid funds within the framework of a sale of receivables. Initial efforts have already been made in this regard.

ACCENTRO Real Estate AG is in permanent contact with Green Living GmbH and regards the risk of default to be very unlikely at 5% (EUR 0.8 million) of the loan amount.

Forecast Report

Due to the still unpredictable business environment with a still tense market situation and persistently weak demand on the housing market, it is still not possible for the Management Board to provide a well-founded and reliable forecast scope for the current financial year. However, a significant reduction in consolidated revenues and consolidated earnings before interest and taxes (EBIT) compared to the previous forecast (revenues: EUR 100 to 120 million; EBIT: EUR 0 to 2 million) must still be expected for the 2023 financial year.

Consolidated Balance Sheet – Assets

30/09/2023

TEUR

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

	30/09/2023	31/12/2022
ASSETS
Non-current assets
Intangible assets and goodwill	21,414	23,245
Owner-occupied properties and buildings	23,246	23,611
Property, plant and equipment	2,575	2,865
Investment properties	362,950	361,458
Advance payments on investment properties	628	0
Other receivables and other assets	29,408	27,471
Equity investments	7,540	7,470
Equity interests accounted for using the equity method	6,035	5,954
Deferred tax assets	1,013	1,541
Total non-current assets	454,809	453,615
Current assets
Inventory properties	203,899	234,935
Contract assets	782	5,504
Trade receivables	24,257	17,753
Other receivables and other assets	38,038	60,755
Current income tax receivables	2,848	3,780
Cash and cash equivalents	31,323	100,784
Total current assets	301,146	423,511
Assets	755,955	877,126

Consolidated Balance Sheet – Equity and Liabilities

30/09/2023

TEUR

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

	30/09/2023	31/12/2022
EQUITY
Subscribed capital	32,438	32,438
Capital reserves	79,988	79,958
Retained earnings	72,990	120,787
Other reserves	792	792
Attributable to parent company shareholders	186,208	233,975
Attributable to non-controlling interests	13,396	13,731
Total equity	199,604	247,706
LIABILITIES
Non-current liabilities
Provisions	46	46
Financial liabilities	72,594	108,383
Bonds	273,969	99,394
Deferred income tax liabilities	11,659	12,731
Total non-current liabilities	358,269	220,555
Current liabilities
Provisions	1,150	807
Financial liabilities	106,406	103,052
Bonds	41,033	255,929
Advance payments received	15,479	8,850
Current income tax liabilities	8,437	9,170
Trade payables	2,107	3,934
Other liabilities	23,471	27,124
Total current liabilities	198,083	408,865
Equity and liabilities	755,955	877,126

Consolidated Statement of Comprehensive Income

01/01/2023 – 30/09/2023

TEUR

		LETTER TO THE SHAREHOLDERS
--	--	----------------------------

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

	THIRD QUARTER 2023	THIRD QUARTER 2022	NINE MONTHS 2023	NINE MONTHS 2022 01/01/2022– 30/09/2022
	01/07/2023– 30/09/2023	01/07/2022– 30/09/2022	01/01/2023– 30/09/2023
Consolidated revenues	20,551	51,074	56,644	144,555
Revenues from sales of inventory properties	15,913	45,924	42,628	130,736
Expenses for sales of inventory properties	– 16,086	– 36,690	– 41,051	– 96,918
Capital gains from property sales	– 173	9,234	1,577	33,818
Letting revenues	4,566	4,914	13,710	12,701
Letting expenses	– 2,805	– 6,228	– 7,980	– 12,584
Net rental income	1,761	– 1,314	5,731	117
Revenues from services	72	235	305	1,117
Expenses for services	– 35	– 228	– 83	– 824
Net service income	37	7	223	293
Other operating income	122	916	2,126	1,163
Interim result	1,747	8,843	9,656	35,391
Gain or loss on fair value adjustments of investment properties	0	0	0	0
Payroll and benefit costs	– 1,922	– 2,623	– 7,164	– 7,805
Depreciation and amortisation of intangible assets and property, plant and equipment	– 1,256	– 574	– 3,641	– 1,649
Impairments of receivables and other assets	– 13,584	0	– 14,636	– 4,133
Other operating expenses	– 3,574	– 5,123	– 12,252	– 12,252
EBIT (earnings before interest and income taxes)	– 18,588	523	– 28,035	9,552

CONTINUED ON P.16

CONTINUED FROM P.15

TEUR

PRELIMINARY REMARKS

AND ASSETS

FORECAST REPORT

CHANGES IN EQUITY

OTHER DISCLOSURES

FINANCIAL CALENDAR

STATEMENT

IMPRINT

THIRD QUARTER 2023 01/07/2023– 30/09/2023 THIRD QUARTER 2022 01/07/2022– 30/09/2022 NINE MONTHS 2023 01/01/2023– 30/09/2023 NINE MONTHS 2022 01/01/2022– 30/09/2022 Net income from associates measured using the equity method 0 0 24 152 Income from equity investments 10 8 29 65 Interest income 1,490 891 3,488 3,106 Interest expenses – 8,234 – 5,666 – 24,693 – 17,485 Net interest result – 6,744 – 4,775 – 21,205 – 14,379 EBT (earnings before income taxes) – 25,323 – 4,244 – 49,188 – 4,610 Income taxes 1,662 – 556 966 – 2,469 Consolidated results for the period – 23,661 – 4,800 – 48,222 – 7,079 thereof attributable to non-controlling interests – 95 – 127 – 422 – 16 thereof attributable to shareholders of the parent company – 23,566 – 4,672 – 47,800 – 7,062 Undiluted net income per share (32,437,934 shares; previous year 32,437,934 shares) – 0.74 – 0.15 – 1.49 – 0.22 Diluted net income per share (32,437,934 shares; previous year 32,437,934 shares) – 0.74 – 0.15 – 1.49 – 0.22 Net gain / (loss) on equity instruments designated at fair value among the other comprehensive income 0 0 0 0 Other comprehensive income 0 0 0 0 Consolidated total income – 23,661 – 4,800 – 48,222 – 7,079 LETTER TO THE SHAREHOLDERS EARNINGS, FINANCIAL POSITION OPPORTUNITY AND RISK REPORT CONSOLIDATED BALANCE SHEET CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF CONSOLIDATED CASH FLOW FORWARD-LOOKING STATEMENTS

Consolidated Statement of Changes in Equity

01/01/2023 – 30/09/2023

TEUR

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

	SUBSCRIBED	CAPITAL CAPITAL RESERVE	RETAINED EARNINGS	EC INSTRUMENTS AT FAIR VALUE IN OTHER COMPRE HENSIVE INCOME	ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS	NON CONTROLLING INTERESTS	TOTAL
As at 1 January 2023	32,438	79,958	120,787	792	233,974	13,731	247,705
Consolidated result for the period	0	0	– 47,800	0	– 47,800	– 422	– 48,222
Other comprehensive income	0	0	0	0	0	0	0
Consolidated total income	0	0	– 47,800	0	– 47,800	– 422	– 48,222
Reclassification of equity instruments at fair value in other comprehensive income	0	0	0	0	0	0	0
Change in non-controlling interests	0	0	0	0	0	87	87
Dividend payments	0	0	0	0	0	0	0
Acquisition of subsidiaries	0	0	0	0	0	0	0
Equity change from application of IFRS 2	0	30	0	0	30	0	30
Other effects	0	0	3	0	3	0	3
As at 30 September 2023	32,438	79,988	72,990	792	186,207	13,396	199,604

Consolidated Statement of Changes in Equity

01/01/2022 – 30/09/2022

TEUR

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

	SUBSCRIBED	CAPITAL CAPITAL RESERVE	RETAINED EARNINGS	EC INSTRUMENTS AT FAIR VALUE IN OTHER COMPRE HENSIVE INCOME	ATTRIBUTABLE TO PARENT COMPANY SHAREHOLDERS	NON CONTROLLING INTERESTS	TOTAL
As at 1 January 2022	32,438	79,825	135,127	0	247,390	13,247	260,637
Consolidated result for the period	0	0	– 14,731	0	– 14,731	494	– 14,238
Other comprehensive income	0	0	0	2,257	2,257	0	2,257
Consolidated total income	0	0	– 14,731	2,257	– 12,475	494	– 11,981
Reclassification of equity instruments at fair value in other comprehensive income	0	0	1,465	– 1,465	0	0	0
Change in non-controlling interests	0	0	0	0	0	0	0
Dividend payments	0	0	– 1,298	0	– 1,298	0	– 1,298
Acquisition of subsidiaries	0	0	0	0	0	215	215
Equity change from application of IFRS 2	0	133	0	0	133	0	133
Other effects	0	0	224	0	224	– 224	0
As at 30 September 2022	32,438	79,958	120,787	792	233,974	13,731	247,705

Consolidated Cash Flow Statement

01/01/2023 – 30/09/2023

	TEUR
LETTER TO THE SHAREHOLDERS
PRELIMINARY REMARKS		01/01/2023– 30/09/2023	01/01/2022– 30/09/2022
EARNINGS, FINANCIAL POSITION AND ASSETS	Consolidated result for the period	– 48,222	– 7,078
OPPORTUNITY AND RISK REPORT	+ Depreciation / amortisation of non-current assets	3,641	1,649
	+/– Losses / gains from the disposal of financial assets	0	– 709
FORECAST REPORT	–/+ At-equity earnings / net income from investments	0	– 218
CONSOLIDATED BALANCE SHEET	+/– Increase / decrease in provisions	344	169
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	+ Interest expenses from financial liabilities and bonds	29,295	0
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	+/– Other non-cash expenses / income	– 534	11,696
	+/– Loss / gain from the disposal of fully consolidated subsidiaries	67	0
CONSOLIDATED CASH FLOW STATEMENT	–/+ Increase / decrease in trade receivables and other assets that are not attributable to investing or financing activities	9,112	2,159
OTHER DISCLOSURES	+/– Increase / decrease in trade payables and other liabilities that are not attributable to investing or financing activities		6,587
FORWARD-LOOKING STATEMENTS	+/– Other income tax payments	595	– 718
FINANCIAL CALENDAR	= Operating cash flow before de-/reinvestment in inventory properties	– 5,521	13,538
IMPRINT	–/+ Cash investments in (–) / divestments of (+) inventory properties (net after partial non-cash debt assumption)	34,369	56,312
	= Cash flow from operating activities	28,848	69,850

CONTINUED ON P.20

CONTINUED FROM P.19

TEUR

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

		01/01/2023– 30/09/2023	01/01/2022– 30/09/2022
+	Interest received	145	1,295
+	Cash received from disposals of property, plant and equipment	151	0
–	Cash outflows for investments in intangible assets	– 946	– 531
–	Cash outflows for investments in property, plant and equipment	– 358	– 648
+	Cash received from disposals of financial assets	0	936
–	Cash outflows for investments in financial assets	– 70	– 70
–	Cash outflows for the purchase of investment property	– 2,120	– 18,834
–	Disbursements for loans granted	– 400	– 15,720
+	Cash received from distributions / disposals of shares accounted for using the equity method	0	16,000
+	Repayment of loans granted	263	5,394
=	Cash flow from investing activities	– 3,336	– 12,178
–	Dividend payments to shareholders	0	– 1,298
+	Cash proceeds from the issuance of bonds and from (financial) borrowings	17,056	48,634
–	Disbursements for the repayment of bonds and of (financial) borrowings	– 80,699	– 85,907
–	Interest paid and financing costs	– 31,141	– 17,873
=	Cash flow from financing activities	– 94,754	– 56,444
	Net change in cash and cash equivalents	– 69,242	1,228
+/–	Consolidation change in cash and cash equivalents	– 220	– 984
+	Cash and cash equivalents at the beginning of the period	100,784	121,502
=	Cash and cash equivalents at the end of the period	31,323	121,746

Other Disclosures

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Directors and Officers

The Supervisory Board has appointed Dr Gordon Geiser as an additional member of the Management Board and Chief Investment Officer (CIO) of ACCENTRO Real Estate AG with effect from 10 February 2023. He is responsible for liquidity management and shares responsibility for the Transactions division (acquisitions, investments and disposals). Dr Geiser's appointment is limited in time in accordance with the terms of the refinancing transaction and will end as soon as the nominal value of the 2020/2026 bond is EUR 125 million or less due to the contractually guaranteed repayments.

At its meeting on 20 June 2023, the Supervisory Board mutually agreed with the Chairman of the Management Board (CEO) of ACCENTRO Real Estate AG, Mr Lars Schriewer, on an immediate termination of the contractual relationship. At the same Supervisory Board meeting, the company's former General Counsel, Mr. Jörg Neuß, was appointed as a member of the Management Board and Chairman of the Management Board (CEO) of ACCENTRO Real Estate AG with immediate effect. Mr Neuß has taken over the responsibilities of Mr Schriewer.

Events after the balance sheet date

On 8 November 2023, the company received a non-binding offer from NongHyup Bank Co. Ltd. as trustee of Shinhan AIM Structured General Private Investment Trust No. 5 and Nox Capital Holding GmbH following the non-binding expression of interest dated 20 July 2023. ACCENTRO reported on the main content in the ad hoc announcement dated 8 November 2023. The Management Board is still in the process of examining, in particular, whether phase 2 of the due diligence process can be entered into on the basis of the non-binding offer.

On 9 November 2023, the company announced that it would propose a new concept for mandatory special redemptions and interest to the holders of the 2023/2026 bond. The bondholders were invited to vote without a meeting in the Federal Gazette on 10 November 2023. The period for voting ends on 30 November 2023 at 24:00. The Management Board is expected to publish the result of the vote at the beginning of December.

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Forward-Looking Statements

This interim report contains certain forward-looking statements. Forwardlooking statements are all statements that do not relate to historical facts and events. This applies in particular to statements about future financial performance, plans and expectations regarding the business and management of ACCENTRO Real Estate AG, about growth and profitability, as well as economic and regulatory conditions and other factors to which ACCENTRO is exposed.

The forward-looking statements are based on current estimates and assumptions made by the Company to the best of its knowledge. Such forward-looking statements are based on assumptions and are subject to risks, uncertainties and other factors that may cause the actual results, including the financial position and performance of ACCENTRO, to differ materially from, or be more negative than, those expressed or implied by such statements. ACCENTRO's business activities are subject to a number of risks and uncertainties that may also cause a forward-looking statement, estimate or forecast to be inaccurate.

Financial Calendar

The financial year of ACCENTRO Real Estate AG corresponds to the calendar year. For further dates, please visit our website at the following URL:HTTPS://INVESTORS.ACCENTRO.DE/EN/SERVICE

28 APR 2023 PUBLICATION OF ANNUAL REPORT 2022

31 MAY 2023

PUBLICATION OF INTERIM STATEMENT AS AT 31 MARCH 2023

07 JUN 2023 ANNUAL GENERAL MEETING, BERLIN

31 AUG 2023

PUBLICATION OF INTERIM REPORT AS AT 30 JUNE 2023

1. NOV 2023

PUBLICATION OF INTERIM STATEMENT AS AT 30 SEPTEMBER 2023

LETTER TO THE SHAREHOLDERS

PRELIMINARY REMARKS

EARNINGS, FINANCIAL POSITION AND ASSETS

OPPORTUNITY AND RISK REPORT

FORECAST REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED CASH FLOW STATEMENT

OTHER DISCLOSURES

FORWARD-LOOKING STATEMENTS

FINANCIAL CALENDAR

IMPRINT

Imprint

ACCENTRO Real Estate AG Kantstraße 44/45 10625 Berlin Phone: +49 (0)30 887 181-0 Fax: +49 (0)30 887 181-11 Email: mail@ACCENTRO.de

Home: WWW.ACCENTRO.DE

Management Board

Jörg Neuß Dr. Gordon Geiser

Chairman of the Supervisory Board Axel Harloff, Hamburg

Contact

ACCENTRO Real Estate AG Investor Relations Phone: +49 (0)30 887 181-272 Fax: +49 (0)30 887 181-11 Email: ir@ACCENTRO.de

Concept, Editing, Layout

RYZE Digital www.ryze-digital.de

Photos

Image rights of all photos and visualisations: ACCENTRO AG

REAL ESTATE AG

www.accentro.de