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Adler Group Investor Presentation 2021
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Investor Presentation
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NADLER GROUP
2021
Results presentation
30 November 2021
2
Braunschweiger Strasse, Berlin
Content
- Q3 2021 Overview
- Portfolio & Operational Performance
- Financial Performance
- Guidance 2021
- Appendix
Q3 2021 Overview
Strong Q3 2021 results
FINANCIAL PERFORMANCE
- NRI +28% to €259m
- FFO 1 +36% to €101.9m
- NTA per share up +13% to €42.60/share
- LTV stands at 57.0%
- Average cost of debt at 2.1%
PORTFOLIO & DEVELOPMENTS
- +3.9% like-for-like rental growth
- Avg. residential rent €6.61/sqm
- +8.7% like-for-like fair value uplift in the yielding portfolio
- Vacancy at 3.3%, down from 3.9%
- Build-to-hold under construction at 36% completion
ESG ACHIEVEMENTS
- Entering the top 5% of real estate companies globally
- ESG report published
- Sustainalytics rating obtained
- Strong commitment to further enhance ESG rating
Keep up traction
-
☑ Strong +8.7% value uplift
CAPEX and strong rental growth driving portfolio valuations -
☑ Upcoming maturities well covered
Given cash on hand, disposal proceeds and liquidity facilities -
☑ Term sheets signed for strategic asset disposals
Two transactions valued at c. €2.4bn proving the quality of our assets -
☑ Guidance confirmed
NRI full-year guidance of €340-345m, FFO 1 of €135-140m
3
NADLER GROUP
Portfolio & Operational Performance
NADLER GROUP
Portfolio & Operational Performance
Strong LFL rental growth of +3.9% driving valuation
| TERM SHEET WITH LEG CONCLUDED | ADDITIONAL PORTFOLIO DISPOSAL | VALUE UPLIFT AND FURTHER PORTFOLIO IMPROVEMENTS | UPDATE ON DEVELOPMENTS |
|---|---|---|---|
| ✓ Term sheet signed with LEG Immobilien SE on 11 October regarding the sale of c. 15,500 units based on a real estate value of c. €1.4bn which is above the respective book values | |||
| ✓ With disposed units located in Wilhelmshaven and other medium-sized cities, the remaining portfolio will be more focused on Germany's top 7 cities | |||
| ✓ Closing of the transaction is expected to take place by the end of 2021 | ✓ On 26 October, term sheet signed with a leading alternative investment firm in order to sell c. 14,300 units for the agreed transaction valuation of c. €1bn (premium to the book values) | ||
| ✓ 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 | ✓ Portfolio value of yielding assets increased by €626m resulting in a +8.7% LFL uplift in the first nine months of 2021 on the back of a +3.9% LFL rent increase | ||
| ✓ Residential average rent increased significantly from €6.20/sqm to €6.61/sqm | |||
| ✓ Vacancy of the total portfolio at a structurally low level of 3.3% | ✓ Gerresheim added to the build to hold developments | ||
| ✓ Preparation work at Holsten Quartier started on-site | |||
| ✓ 3 forward sales (Residenz Ernst-Reuter-Platz, Franklinhaus, Magnolia) completed and (about to be) handed over | |||
| ✓ Topping-out ceremony at Quartier Hoym in Dresden | |||
| ✓ Strong investor appetite for our non-strategic development projects and active discussions ongoing |
5
PADLER GROUP
Enhancing portfolio quality through active capital recycling...
Consistent high quality of yielding assets with GAV and fair value per sqm at record levels
Number of rental units over time (in thousand)
Yielding assets GAV (€bn)
Fair value (€/sqm)
Please note that the KPIs presented on this page include ground level commercial units and exclude units under renovation and development projects. Please also note that the numbers for the years 2015-2019 are provided for your convenience and serve for illustrative purposes of combining ADO Properties and ADLER Real Estate only. Metrics have been computed by using weighted averages on the back of publicly available information.
NADLER GROUP
Portfolio & Operational Performance – Rental Portfolio
7
… structurally driving value, up +8.7% until Q3 2021
Fair value increase on the back of strong LFL rental growth and further positive yield development and CAPEX investments across the core yielding portfolio
Like-for-like fair value growth (%)
Yielding portfolio vacancy rate (%)
Please note that the KPIs presented on this page include ground level commercial units and exclude units under renovation and development projects. Please also note that the numbers for the years 2015-2019 are provided for your convenience and serve for illustrative purposes of combining ADO Properties and ADLER Real Estate only. Metrics have been computed by using weighted averages on the back of publicly available information.
NADLER GROUP
Accelerated LFL rental growth across the yielding portfolio
Portfolio continues its trend of delivering sector leading LFL growth across Berlin as well as our other locations, driving consistently superior value uplift profile
Residential average rent (€/sqm/m)
LFL residential rental growth (%)
LFL rental growth breakdown (%)
Please note that the KPIs presented on this page include ground level commercial units and exclude units under renovation and development projects. Please also note that the numbers for the years 2015-2019 are provided for your convenience and serve for illustrative purposes of combining ADO Properties and ADLER Real Estate only. Metrics have been computed by using weighted averages on the back of publicly available information.
NADLER GROUP
Portfolio & Operational Performance – Developments
Recent activity on the build-to-hold pipeline and divestments
Build-to-hold portfolio overview
- €bn GAV Projects
- Area (sqm): c.1,100k sqm
- Number of projects: 14
Recent developments
Status
- Completion of the build-to-hold pipeline should add c.12,000 units to the rental portfolio at an anticipated gross yield on cost of 4.0%
- Given the central locations of the build-to-hold projects, obtaining construction permits is only a matter of time – no execution risk
- Currently, €705m of GDV is under construction
- The projects under construction are steadily progressing with 36% of construction completed
Project updates
- Gerresheim project retained and added to the build-to-hold development portfolio
- Preparation work at Holsten Quartier started on-site
- 3 forward sales projects (Residenz Ernst-Reuter-Platz, Franklinhaus, Magnolia) completed and (about to be) handed over
- Topping-out ceremony at Quartier Hoym in Dresden
5
10
NADLER GROUP
Financial Performance
30
RADLER GROUP
Financial Performance
Significant operational improvements driving operational growth
Total revenue (€m)
EBITDA from rental activities (€m)
Net rental income (€m)
FFO 1 (€m)
Financial Performance
NADLER GROUP
Further simplification of capital structure through deleveraging
BOND ISSUANCE AND FURTHER FINANCING
- €1.5bn bonds issued in January to repay €330m ADLER RE 2021 notes and refinance mezzanine. April issuance of €500m 6yr bond used for prepayment of €450m 9.625% Consus HY bond
- Initiated €500m commercial paper programme and drawn €300m of RCF as a further liquidity cushion and to extend the Group's flexibility
- Arranged several secured loans in an aggregate volume of €677m with maturities ranging from 4 to 10 years yielding between 0.8%-1.6% p.a. over 9M 2021
DELEVERAGING VIA PORTFOLIO OF TIMISATION
- Disposal of c. 15,500 units to LEG in a volume of €1.4bn generating c. €800m in net cash proceeds after repayment of around €379m project debt, among others
- Further transaction of c. €1.0bn for around 14,300 units signed with a leading alternative investment firm will lead to liquidity inflow of c. €600m after repayment of €355m secured loans, among others
- The cash proceeds of the announced strategic project and yielding asset disposals will be used to deleverage the Group and decrease the LTV to our target range of 45-50%
FINANCIAL METHODS OF THE GROUP
- Average cost of debt reduced significantly to 2.1% as of Q3 2021 from 3.0% at FY 2020
- Average debt maturity of 4.2 years as of Q3 2021
- The Group's Net LTV incl. convertibles stands at 57.0% as of Q3 2021 (55.4% excl. convertibles)
- Significant liquidity buffer with €396m of cash on balance sheet as of 30 September 2021
FINANCIAL SUMMARY AND KEY MESSAGES
- No refinancing risk as most of early maturing debt has been refinanced
- Upcoming maturities are well covered with cash on hand, disposal proceeds and liquidity facilities
- Favourable secured lending market at attractive terms to further improve debt KPIs
- Further cash inflow expected from receivables, build-to-sell division and capital recycling measures
FEDERAL BANK OF ENGLAND
Balanced maturity profile with strengthened financial KPIs
Debt KPIs for Q3 2021
| Total interest-bearing net debt (€m) | 8,323 |
|---|---|
| Net LTV | 55.4%^{1}/ 57.0%^{2} |
| ICR (x) | 3.2 |
| Fixed / hedged debt | 95.3% |
| Unsecured debt | 62.4% |
| Weighted average cost of debt | 2.1% |
| Weighted average maturity | 4.2 |
| Corporate rating S&P | B+/Watch Neg/B |
| Bond rating S&P | BB- |
Sources of funding
Bank debt Corporate bonds Convertibles
Bond covenants
| Covenants | Required level | Current level (30 Sep 2021) |
|---|---|---|
| LTV (Financial indebtedness / total assets) | <60% | 53.4% |
| Secured LTV (Secured debt / total assets) | <45% | 21.3% |
| ICR (LTM Adj. EBITDA / LTM net cash interest) | >1.8x | 3.2x |
| Unencumbered assets (Unencumbered assets / unsecured debt) | >125% | 130.0% |
-
Excluding convertibles.
-
Including convertibles.
RADLER GROUP
Maturity schedule
Comments
- Upcoming maturities are covered through a combination of €396m cash on hand, expected receivables and active capital recycling measures including the recently announced transactions
- In particular, the 2021 maturing ADLER RE 2021 note of €170m will be repaid by existing liquidity. Furthermore, minor financing tranches totalling €30m are in advanced discussions and likely to be rolled over, €5m has been repaid post reporting date and €17m will be also funded by cash on balance sheet.
- Financing instruments maturing in 2022 totalling €237m are in advanced extension discussions and €619m are covered by the expected €1.4bn in net cash proceeds of ongoing disposals
LTV moving towards <50% on the back of anticipated disposals
Key
- Retention of the Gerresheim project at a book value of €270m, leading to the unwinding of the associated financial asset and investment in real estate companies, whilst adding back the project debt
- During the quarter, a revaluation gain of €158m was realised on the yielding asset portfolio
- In July we have paid out a dividend of €0.46/share, a cash out of c.€54m
- Expected closing of non-strategic disposals during Q4 2021 2stay and Arthur Hoffmann as well as the NewFrankfurt Towers in Offenbach
- Expected closing of the LEG transaction
- Expected revaluation of 2.2% to materialise by year-end 2021, which would bring the total revaluation of our yielding asset portfolio to a solid 10% for the full year
- Throughout 2022 further efforts will be undertaken to bring leverage down – with the envisaged closing of the East Portfolio sale as the first substantial trigger towards the end of Q1 2022
General: Based on managerial assumptions.
NADLER GROUP
Guidance 2021
17
GUIDANCE 2021
GU
Guidance FY2021 confirmed
2021 guidance
| Full-year guidance | |
|---|---|
| Net rental income (€m) | €340-345m |
| FFO 1 (€m) | €135-140m |
| Dividend (€/share) 2021e | €0.57-0.60 implied^{1} |
| 50% of FFO 1 | |
| Mid-term guidance | |
| LFL rental growth (%) | c. 3% |
| Medium-term LTV target (%) | <50% |
Concluding remarks
- Yielding asset portfolio value increased by €626m resulting in a +8.7% LFL value uplift in the first nine months of 2021 on the back of a +3.9% LFL rent increase
- Vacancy of the total portfolio at a structurally low level of 3.3%
- Negotiations on portfolio transactions with LEG and an institutional buyer in advanced stages
- No refinancing risk as most of early maturing debt has been refinanced
- Upcoming maturities are well covered with cash on hand, disposal proceeds and liquidity facilities
- Independent report on allegations of a short seller anticipated to be completed in early 2022
1 Implied dividend range on basis of FFO guidance range of €135-40m, and company dividend policy of 50% payout ratio, subject to final Board approval and shareholder approval in the 2022 annual general meeting.
1 Gutenbergstrasse, Berlin
2 Ruddestrasse, Berlin
18
GUIDANCE 2021
18
Subsequent events - Continuous progress
A Strategic asset disposals – substantial progress
- On 4 October, we announced a strategic review of our portfolio
- The contemplated portfolio transaction with LEG, regarding 15,500 units and a total value of c. €1.4bn is in the final stages of negotiation and could materialize promptly
- Negotiations on the portfolio transaction with a leading alternative investment firm for 14,300 and a total value of c. €1bn are progressing well and should lead to a deal during Q1 2022
B Chief Development Officer
- Dr. Bernd Schade has been appointed as Chief Development Officer as of 1 November and will be leading our development efforts going forward
C Specialised forensic accountants of KPMG
- 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
- KPMG will in the meantime immediately notify Adler Group's board of any material findings
FEDERAL BANK OF ENGLAND
Financial Calendar & Contacts
Adler Group S.A. results 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 |
Online Financial Calendar
www.adler-group.com
Imprint
Adler Group S.A.
18 Heienhoff
1736 Senningerberg
Grand Duchy of Luxembourg
[email protected]
www.adler-group.com
Investor relation contacts
Mario Groß
Head of IR & PR
[email protected]
Julian Mahlert
IR Manager
[email protected]
Carl-Philip Schniewind
IR Manager
[email protected]
NADLER GROUP
Appendix
RADLER GROUP
21
Q3 2021 – Company KPIs
| Assets overview - breakdown (€m) | Q3 2021 | Q3 2020 | YoY delta (%) |
|---|---|---|---|
| Yielding portfolio value | 9,063 | 7,766 | 17% |
| Development pipeline value | 4,144 | 3,634 | 14% |
| Build-to-hold | 1,950 | 1,231 | 58% |
| Build-to-sell | 2,194 | 2,403 | -9% |
| Total portfolio value^{1} | 13,207 | 11,400 | 16% |
| Total assets | 15,831 | 14,599 | 8% |
| Yielding portfolio - KPIs | Q3 2021 | Q3 2020 | YoY delta (%) |
| --- | --- | --- | --- |
| Yielding residential units (#) | 69,435 | 70,741 | -2% |
| Lettable area (k sqm) | 4,388 | 4,461 | -2% |
| LFL rental growth (%) | 3.9 | 1.4 | 250bps |
| LFL fair value uplift (%) | 8.7 | 6.6 | 210bps |
| Fair value (€/sqm) | 2,065 | 1,741 | 19% |
| Average rent (€/sqm/m) | 6.61 | 6.25 | 6% |
| Vacancy rate (%) | 3.3 | 3.9 | -60bps |
| Development portfolio – KPIs^{2} | Build-to-hold | Build-to-sell | |
| --- | --- | --- | |
| Current # of projects | 14 | 34 | |
| thereof completed / sold | - | 4 | |
| Residential and commercial units (#) | 12,000 | 5,900 | |
| Lettable area (k sqm) | 1,122 | 700 | |
| GDV (€bn) | 6.4 | - | |
| GDV (€/sqm) | c.5,700 | - | |
| CAPEX (€bn) | excluding land | 3.6 | - |
| CAPEX (€/sqm) | excluding land | c.3,200 | - |
| Operating results (€m) | Q3 2021 | Q3 2020 | YoY delta (%) |
| --- | --- | --- | --- |
| Total revenue | 438.5 | 416.9 | 5% |
| Net rental income | 259.3 | 203.2 | 28% |
| EBITDA from rental activities | 169.2 | 133.8 | 26% |
| EBITDA total | 238.4 | 157.7 | 51% |
| Weighted avg. shares (#) | 117.5 | 70.6 | 67% |
| FFO 1 | 101.9 | 74.7 | 36% |
| FFO 1 per share (€/share) | 0.87 | 1.06 | -18% |
| FFO 2 per share (€/share) | 1.27 | 1.04 | 22% |
| Balance sheet (€m) | Q3 2021 | FY 2020 | YTD delta (%) |
| --- | --- | --- | --- |
| Total assets | 15,831 | 14,599 | 7% |
| Net debt | 7,443 | 6,150 | 21% |
| Cash and cash equivalents | 396 | 372 | 6% |
| Equity | 5,192 | 4,918 | 6% |
| LTV incl. convertibles (%) | 57.0 | 53.4 | 360bps |
| Average cost of debt %) | 2.1 | 3.0 | -90bps |
| EPRA NRV | 6,599 | 6,037 | 9% |
| EPRA NRV (€/share) | 56.16 | 51.38 | 9% |
| EPRA NTA | 5,006 | 4,443 | 13% |
| EPRA NTA (€/share) | 42.60 | 37.81 | 13% |
- GAV according to latest external valuation reports 2. Development portfolio KPIs subject to change on the back of planning and permitting, build-to-sell including strategic upfront disposal pipeline.
RADLER GROUP
22
Rental portfolio - realising +3.9% LFL rental growth
Strong performance in Q3 2021 with sector-leading LFL rental growth of 3.9%
| Location | Fair value €m Q3 21 | Fair value €/sqm Q3 21 | Units | Lettable area sqm | NRI¹ €m Q3 21 | Rental yield (in-place rent) | Vacancy Q3 21 | Vacancy Δ YoY | Q3 21 avg. rent €/sqm/month | NRI Δ YoY LFL | Reversionary 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% |
| Other commercial | 562 | 12.9 | |||||||||
| Grand total | 9,624 | 348.8 |
- Annualised Net Rental Income (in-place-rent).
Please note that the KPIs presented on this page include ground level commercial units and exclude units under renovation and development projects.
Strong growth
- Annualised residential NRI stands at €336m at the end of Q3 2021
- The portfolio has ample room for future growth with a reversionary potential of 20.2% for the top 13 cities and 19.5% for the entire portfolio
- Through active management, the portfolio generated +3.9% LFL rental growth
RADLER GROUP
Rental portfolio - CAPEX and maintenance
Consistent and effective maintenance spending requires less modernisation CAPEX going forward
Total CAPEX and maintenance (€m)
Maintenance expense (€/sqm)
CAPEX invested (€/sqm)
PROCUREMENT OPTIMISATION AND INCREASED SCALE
Please note that the numbers for the years 2015-2019 are provided for your convenience and serve for illustrative purposes of combining ADO Properties and ADLER Real Estate only. Metrics have been computed by using weighted averages on the back of publicly available information.
24
NADLER GROUP
Build-to-hold portfolio
Five projects under construction
| # | Project name | City | Construction period | Building permit | Construction started | Area (k sqm) | Total CAPEX (€m) | % of CAPEX spent | GAV (€m) | Yield on cost^{1)} (%) |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | SLT 107 Schwabenlandtower | Stuttgart | 2019-2022 | ☑ | ☑ | 16 | 63 | 30% | 69 | 3.9% |
| 2 | CologneApart VauVau | Cologne | 2018-2023 | ☑ | ☑ | 23 | 85 | 50% | 105 | 3.2% |
| 3 | UpperNord Tower VauVau | Düsseldorf | 2018-2023 | ☑ | ☑ | 25 | 137 | 40% | 107 | 3.0% |
| 4 | Grafental II - WA 12 & III WA 13 social | Düsseldorf | 2020-2023 | ☑ | ☑ | 28 | 91 | 40% | 35 | 3.5% |
| 5 | Wasserstadt - Konversuchsspeicher & Building 7 | Berlin | 2018-2024 | ☑ | ☑ | 11 | 38 | 25% | 54 | 4.8% |
| 6 | Neues Korallusviertel | Hamburg | 2021-2024 | ☐ | ☐ | 34 | 116 | 15% | 53 | 3.7% |
| 7 | COL III (Windmühlenquartier) | Cologne | 2022-2024 | ☐ | ☐ | 24 | 91 | 5% | 26 | 4.5% |
| 8 | Grand Central DD | Düsseldorf | 2022-2026 | ☑ | ☐ | 78 | 282 | 5% | 208 | 3.7% |
| 9 | Holsten Quartier | Hamburg | 2022-2026 | ☐ | ☐ | 148 | 382 | 5% | 364 | 4.3% |
| 10 | Ostend Quartier | Frankfurt | 2023-2027 | ☐ | ☐ | 44 | 120 | 10% | 107 | 4.0% |
| 11 | VAI Campus Stuttgart-Vaihingen (incl. Eiermann) | Stuttgart | 2022-2028 | ☐ | ☐ | 184 | 562 | 5% | 277 | 4.5% |
| 12 | Gerresheim | Düsseldorf | 2022-2030 | ☐ | ☐ | 164 | 414 | 5% | 270 | 3.6% |
| 13 | Benrather Gärten | Düsseldorf | 2023-2029 | ☐ | ☐ | 162 | 506 | 0% | 149 | 4.5% |
| 14 | Schönefeld Nord Residential & Commercial | Berlin | 2024-2030 | ☐ | ☐ | 181 | 743 | 0% | 128 | 4.5% |
| Total | GDV €6.4bn | 1,122 | 3,630 | 36%^{2)} | 1,952 |
- Yield on cost has been calculated based on underwriting ERV / expected total cost, including land; 2. Rounded, calculated weighted average on projects where construction has officially started.
€
705m
GDV
RADLER GROUP
Appendix
55
Forward sales
Fully de-risked and self funded through forward sales to institutional buyers, three projects to be delivered by YE 2021
| # | Project name | City | Buyers | Construction period | Area (k sqm) | GAV (€m) | Stage of completion (%)^{1} |
|---|---|---|---|---|---|---|---|
| 1 | Residenz am Ernst-Reuter-Platz | Berlin | wirttembergsche | ||||
| in Teich der Bredach | 2017-2021 | 11 | 54 | 100% | |||
| 2 | Franklinhaus | Berlin | DHP PARISAS | ||||
| REAL ESTATE | 2018-2021 | 12 | 76 | 95% | |||
| 3 | Magnolia (Dessauer Str.) | Leipzig | COMPETATE | ||||
| ROAD | 2019-2021 | 10 | 36 | 95% | |||
| 4 | Quartier Bundesallee und Momente | Berlin | LKW WALTER | 2016-2022 | 8 | 42 | 95% |
| 5 | MaryAnn Apartments VauVau | Dresden | BVK / COMPETATE | ||||
| ROAD | 2017-2022 | 14 | 55 | 85%^{1} | |||
| 6 | Königshöfe im Barockviertel | Dresden | COMMERZ REAL | 2019-2022 | 15 | 42 | 65% |
| 7 | Quartier Hoym | Dresden | Aberdeen | 2018-2023 | 28 | 96 | 65% |
| 8 | Ostforum | Leipzig | ampega. | ||||
| TRAIN & TRAIN | 2019-2023 | 18 | 17 | 15% | |||
| 9 | Quartier Kreuzstraße | Leipzig | COMPETATE | ||||
| ROAD | 2021-2023 | 13 | 13 | 10% | |||
| 10 | Cologneo I Corpus Sireo | Cologne | CORPUS SIREO | 2019-2024 | 55 | 123 | 35% |
| Total | 184 | 552 | 70% |
- Ernst-Reuter-Platz, fully leased and handed over to the buyer
- Franklinhaus, first tenants moving in
- Magnolia (Dessauer Str.) handover expected by the end of the year
- MaryAnn apartments leasing ongoing
- Calculated based on total construction costs and costs spent to date.
Condominium projects
Palatium, Dreizeit and Westend condo projects expected to be handed over to buyers in the coming months
| # | Project name | City | Construction period | Area (k sqm) | GAV (€m) | #Units | % units sold | Stage of completion (%) |
|---|---|---|---|---|---|---|---|---|
| 1 | Westend Ensemble - Grand Ouest - LEA A | Frankfurt | 2017-2021 | 9 | 90 | 164 | 100% | 85% |
| 2 | Palatium (Palaisplatz Altbau) | Dresden | 2019-2021 | 5 | 19 | 52 | 100% | 95% |
| 3 | Dreizeit – Wohnen an der Villa Berg | Stuttgart | 2019-2021 | 4 | 30 | 48 | 100% | 95% |
| 4 | Steglitzer Kreisel Tower | Berlin | 2017-2024 | 24 | 124 | 328 | 31%^{1} | 30% |
| 5 | The Wilhelm | Berlin | 2018-2024 | 16 | 226 | 105 | 10% | 25% |
| 6 | Grafental III WA 14 | Düsseldorf | 2023-2024 | 15 | 25 | 135 | To start | - |
| 7 | Grafenberg | Düsseldorf | 2023-2025 | 14 | 47 | 84 | To start | - |
| 8 | Covent Garden | Munich | 2023-2026 | 28 | 130 | 323 | To start | - |
| Total | 116 | 690 | 1,485 | 54%^{2} |
- Taking into account contract reversals from buyers due to changes in planning.
- Percentage calculated only on projects of which sales trajectories have been either completed or are currently ongoing.
NADLER GROUP
Appendix
57
Strategic upfront disposals
Three projects sold in Q3 2021 with closing expected before year end
| # | Project name | City | Area (k sqm) | Remarks |
|---|---|---|---|---|
| 1 | 2stay Frankfurt | Frankfurt | 41 | Sold in Q3, expected closing Q4 2021 |
| 2 | Arthur-Hoffmann-Straße | Leipzig | 2 | Sold in Q3, expected closing Q4 2021 |
| 3 | NewFrankfurt Towers | Offenbach | 88 | Sold in Q3, expected closing Q4 2021 |
| 4 | FourLiving Vau Vau | Leipzig | 20 | Advanced discussions |
| 5 | No.1 Mannheim | Mannheim | 19 | Advanced discussions |
| 6 | Eurohaus | Frankfurt | 19 | LOI signed, further negotiations ongoing |
| 7 | Westend Ensemble - Upper West - LEA B | Frankfurt | 20 | Indicative offers received and discussions ongoing |
| 8 | UpperNord Quarter | Düsseldorf | 23 | Negotiations ongoing |
| 9 | Staytion - Forum Pankow | Berlin | 39 | Negotiations ongoing |
| 10 | Steglitzer Kreisel Parkdeck + Sockel | Berlin | 48 | Negotiations ongoing |
| 11 | Parkhaus | Hamburg | n/a | Yielding asset |
| 12 | Tuchmacherviertel | Aachen | 6 | Initial discussions started |
| 13 | UpperNord Office | Düsseldorf | 5 | |
| 14 | Mensa FLI | Leipzig | 2 | Initial discussions started |
| 15 | Späthstrasse | Berlin | 49 | |
| 16 | Hufewiesen (Trachau) | Dresden | 23 | |
| Total | 405 |
Composition of debt structure and average cost of debt
| Volume €m | IFRS €m | Maturity | Nominal interest rate | Other comments | Premature redemption | Conditions for premature redemption | |
|---|---|---|---|---|---|---|---|
| ADLER Real Estate bonds (unsecured) | |||||||
| 2017/21 | 170 | 170 | 6 Dec 2021 | 1.50% | Anytime | Subject to make-whole provision | |
| 2017/24 | 300 | 292 | 6 Feb 2024 | 2.10% | Anytime | Subject to make-whole provision | |
| 2018/23 | 500 | 493 | 28 Apr 2023 | 1.90% | Anytime | Subject to make-whole provision | |
| 2018/26 | 300 | 286 | 27 Apr 2026 | 3.00% | Anytime | Subject to make-whole provision | |
| 2019/22 | 400 | 398 | 17 Apr 2022 | 1.50% | Anytime | Subject to make-whole provision | |
| Total | 1,670 | 1,639 | 1.9 years | 1.97% | |||
| BCP bonds (secured) | |||||||
| Debenture B | 40 | 39 | 1 Dec 2024 | 3.29% | Permitted | Subject to make-whole provision | |
| Debenture C | 38 | 37 | 1 Jul 2026 | 3.30% | Permitted | Subject to make-whole provision | |
| Total | 78 | 76 | 3.9 years | 3.25% | |||
| Adler Group bonds (unsecured) | |||||||
| 2019/24 | 400 | 398 | 26 Jul 2024 | 1.50% | Permitted | Subject to make-whole provision | |
| 2020/25 | 400 | 393 | 5 Aug 2025 | 3.25% | Permitted | Subject to make-whole provision | |
| 2020/26 | 400 | 390 | 13 Nov 2026 | 2.75% | Permitted | Subject to make-whole provision | |
| 2021/26 | 700 | 686 | 14 Jan 2026 | 1.88% | Permitted | Subject to make-whole provision | |
| 2021/27 | 500 | 490 | 27 Apr 2027 | 2.25% | Permitted | Subject to make-whole provision | |
| 2021/29 | 800 | 778 | 14 Jan 2029 | 2.25% | Permitted | Subject to make-whole provision | |
| Total | 3,200 | 3,135 | 5.1 years | 2.23% | |||
| Convertibles^{1} | |||||||
| Consus 2018/22 | 120 | 117 | 29 Nov 2022 | 4.00% | Strike price of €8.791 | At face value, if trading at more than 130% of strike price for at least 20 out of 30 trading days | |
| Adler Group 2018/23 | 102 | 99 | 23 Nov 2023 | 2.00% | Strike price of €53.159 | Conversion from 14 Dec 2021 | At face value, if trading at more than 130% of strike price for at least 20 out of 30 trading days |
| Total | 222 | 216 | 1.6 years | 3.04% | |||
| Bank debt | 3,549 | 3,487 | 4.6 years | 1.94% | |||
| Total interest-bearing debt | 8,719 | 8,552 | 4.2 years | 2.09% |
- Conversions are taken into account.
RADLER GROUP
Profit & Loss statement
P&L statement
| In € million | 9M 2021 | 9M 2020¹ |
|---|---|---|
| Net rental income | 259 | 203 |
| Income from facility services and recharged utilities costs | 85 | 63 |
| Income from property development | 79 | 112 |
| Other revenue | 15 | 9 |
| Revenue | 438 | 387 |
| Costs of operations | -210 | -194 |
| Gross profit | 228 | 193 |
| General and administrative expenses | -85 | -67 |
| Other expenses | -14 | -52 |
| Other income | 47 | 91 |
| Changes in fair value of investment properties | 571 | 189 |
| Results from operating activities | 747 | 354 |
| Net finance income / (costs) | -246 | -213 |
| Net income from investments in associated companies | 0 | -1 |
| Income tax expense | -121 | -43 |
| Profit (loss) for the period | 380 | 97 |
Comments
-
Compared to 9M 2020, net rental income as of Q3 2021 has improved to €259m mainly due to consolidation of ADLER Real Estate into the Group as per April 2020 and ruling that the "Mietendeckel" (Berlin rent freeze) is unconstitutional.
-
Apart from the net rental income, the Group's overall revenue has increased compared to Q3 2020 due to various sources of income streams relating to charged costs of utilities and facility services of €85m, property development income of €79m and other revenues of €15m mainly attributable to the sale of privatisation assets and other services.
-
Changes in the fair value of investment properties for the first nine months of 2021 amount to €571m mainly relating to the positive revaluation gain of our build-to-hold project developments (€71m) and the yielding asset portfolio (€626m) – partially offset against the loss on the reversal of Gerresheim (€127m).
-
Prior period's revenue (€ -29.5 million), cost of sales (€ -27.3 million) and profit (€ -2.2 million) retrospectively restated according to IFRS 3.45.
NADLER GROUP
Appendix
30
EBITDA from rental activities and EBITDA total
EBITDA from rental activities
| In € million | 9M 2021 | 9M 2020 |
|---|---|---|
| Net rental income | 259 | 203 |
| Income from facility services and recharged utilities costs | 85 | 63 |
| Income from rental activities | 344 | 266 |
| Costs from rental activities | -134 | -102 |
| Net operating income (NOI) from rental activities | 210 | 164 |
| Overhead costs from rental activities | -41 | -30 |
| EBITDA from rental activities | 169 | 1 |
1 EBITDA from rental activities improved mainly on the back of an increased net rental income due to the consolidation of ADLER Real Estate into the Group as per April 2020.
EBITDA Total
| In € million | 9M 2021 | 9M 2020 |
|---|---|---|
| Income from rental activities | 344 | 266 |
| Income from property development | 79 | 142 |
| Income from other services | 10 | 5 |
| Income from real estate inventory disposed of | - | - |
| Income from sale of trading properties | 5 | 5 |
| Revenue | 438 | 417 |
| Cost from rental activities | -134 | -102 |
| Other operational costs from development and privatisation sales | -74 | -112 |
| Net operating income (NOI) | 230 | 203 |
| Overhead costs from rental activities | -41 | -30 |
| Overhead costs from development and privatisation sales | -12 | -15 |
| Fair value gain from build-to-hold development | 61 | - |
| EBITDA Total | 230 | 1 |
RADLER GROUP
Appendix
31
FFO 1 and FFO 2
FFO 1 calculation
| In € million, except per share data | 9M 2021 | 9M 2020 |
|---|---|---|
| Net rental income | 259 | 203 |
| Income from facility services and recharged utilities costs | 85 | 63 |
| Income from rental activities | 344 | 266 |
| Costs from rental activities | -134 | -102 |
| Net operating income (NOI) from rental activities | 210 | 164 |
| Overhead costs from rental activities | -41 | -30 |
| EBITDA from rental activities | 169 | 134 |
| Net cash interest | -56 | -50 |
| Current income taxes | -5 | -5 |
| Interest of minority shareholders | -6 | -4 |
| FFO 1 (from rental activities) | 102 | 75 |
| No. of shares(*) | 118 | 71 |
| FFO 1 per share | 0.87 | 1.06 |
(*)The number of shares is calculated as weighted average for the reported period.
FFO 2 calculation
| In € million, except per share data | 9M 2021 | 9M 2020 |
|---|---|---|
| EBITDA total | 238 | 158 |
| Net cash interest | -70 | -68 |
| Current income taxes | -14 | -12 |
| Interest of minority shareholders | -6 | -4 |
| FFO 2 | 149 | 74 |
| No. of shares(*) | 118 | 71 |
| FFO 2 per share | 1.27 | 1.04 |
(*)The number of shares is calculated as weighted average for the reported period.
- EBITDA from rental activities improved mainly on the back of an increased net rental income due to the consolidation of ADLER Real Estate into the Group as per April 2020.
- As of 30 September 2021, the FFO 1 amounts to €102m and translates into a per share basis of €0.87, whereas the FFO 2 accounts for €149m and €1.27 per share.
32
Apprendre
NADLER GROUP
Balance sheet
Balance sheet
| In € million | Q3 2021 | FY 2020 |
|---|---|---|
| Investment properties including advances | 11,213 | 10,111 |
| Other non-current assets | 1,428 | 1,839 |
| Non-current assets | 12,641 | 11,950 |
| Cash and cash equivalents | 396 | 372 |
| Inventories | 1,711 | 1,254 |
| Other current assets | 1,047 | 1,122 |
| Current assets | 3,154 | 2,748 |
| Non-current assets held for sale | 37 | 139 |
| Total assets | 15,831 | 14,838 |
| Interest-bearing debts | 8,552 | 7,965 |
| Other liabilities | 1,014 | 994 |
| Deferred tax liabilities | 1,073 | 933 |
| Liabilities classified as available for sale | - | 27 |
| Total liabilities | 10,639 | 9,920 |
| Total equity attributable to owners of the Company | 4,441 | 4,146 |
| Non-controlling interests | 751 | 772 |
| Total equity | 5,192 | 4,918 |
| Total equity and liabilities | 15,831 | 14,838 |
Comments
- The fair values of the build-to-hold project developments and the yielding investment properties were assessed by CBRE and NAI Apollo, respectively and show the impact of positive revaluation of the Group apart from project acquisitions.
- Other non-current assets mainly contain the goodwill of €1,175m which stems from the acquisition of Consus.
- The cash and cash equivalents item of €396m has slightly increased compared to FY 2020 figures.
- Apart from the cash item, current assets contain inventories relating to the Group's privatisation assets and build-to-sell project developments which have increased due to some project acquisitions. The remaining refers to restricted bank deposits, receivables and contract assets, among others.
- The Group's total equity has increased to €5,192m mainly on the back of revaluation gains.
RADLER GROUP
EPRA NAV metrics
EPRA NAV metrics calculation
| In € million, except per share data
EPRA Measure | Q3 2021 | | | | FY 2020 | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | NAV | NRV | NTA | NDV | NAV | NRV | NTA | NDV |
| Total equity attributable to owners of the Company | 4,441 | 4,441 | 4,441 | 4,441 | 4,146 | 4,146 | 4,146 | 4,146 |
| Revaluation of inventories | 81 | 81 | 81 | 81 | 52 | 52 | 52 | 52 |
| Deferred tax | 1,177 | 1,177 | 1,016 | - | 1,011 | 1,011 | 868 | - |
| Goodwill | - | - | -1,175 | -1,175 | - | - | -1,205 | -1,205 |
| Fair value of financial instruments | 3 | 3 | 3 | - | 5 | 5 | 5 | - |
| Fair value of fixed interest rate debt | - | - | - | 317 | - | - | - | -329 |
| Real estate transfer tax | - | 897 | 639 | - | - | 823 | 576 | - |
| EPRA NAV | 5,703 | 6,599 | 5,006 | 3,665 | 5,214 | 6,037 | 4,443 | 2,664 |
| No. of shares | 118 | 118 | 118 | 118 | 118 | 118 | 118 | 118 |
| EPRA NAV per share | 48.53 | 56.16 | 42.60 | 31.19 | 44.37 | 51.38 | 37.81 | 22.67 |
| Convertibles | 99 | 99 | 99 | 99 | 98 | 98 | 98 | 98 |
| EPRA NAV fully diluted | 5,802 | 6,698 | 5,104 | 3,763 | 5,311 | 6,135 | 4,540 | 2,762 |
| No. of shares (diluted) | 119 | 119 | 119 | 119 | 119 | 119 | 119 | 119 |
| EPRA NAV per share fully diluted | 48.88 | 56.43 | 43.01 | 31.71 | 44.47 | 51.37 | 38.02 | 23.12 |
- As per 30 September 2021, our EPRA NAV and EPRA NRV amount to €5,702 or €48.53 per share and €6,599 or €56.16 per share, thus providing an increase of 9% since the beginning of the year 2021.
- The two well-known NAV and NRV KPIs are complemented by the EPRA Net Tangible Assets (NTA) and the EPRA Net Disposal Value (NDV). The EPRA NTA assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability, whereas the EPRA NDV represents the value under a disposal scenario, net of any resulting tax. As of 30 September 2021 the EPRA NTA is €42.60 per share and the EPRA NDV €31.19 per share.
NADLER GROUP
Appendix
34
Net LTV
LTV calculation
| In € million | Q3 2021 | FY 2020 |
|---|---|---|
| Corporate bonds and other loans and borrowings | 8,337 | 7,653 |
| Convertible bonds | 215 | 312 |
| Cash and cash equivalents | -396 | -372 |
| Selected financial assets | -563 | -1,195 |
| Net contract assets | -113 | -137 |
| Assets and liabilities classified as held for sale | -37 | -112 |
| Net financial liabilities | 7,443 | 6,150 |
| Fair value of properties (including advances) | 13,018 | 11,431 |
| Investment in real estate companies | 33 | 85 |
| Gross asset value (GAV) | 13,051 | 11,515 |
| Net loan-to-value | 57.0% | 53.4% |
| Net loan-to-value excluding convertibles | 55.4% | 50.7% |
Comments
-
The selected financial assets have declined to €563m and contain purchase price receivables amongst others. They include 1) netted financial receivables (€28m) which were reduced due to the Gerresheim reversal, 2) trade receivables from the sale of real estate investments (€267m) and 3) other financial assets (€268m).
-
In relation to the Group's development activities, an adjustment is made for the net position of contract assets and liabilities, basically representing unbilled receivables.
-
In Q3 2021, fair value of properties (including advances) increased to €13,018m, mainly reflecting the project acquisitions including the reversal of Gerresheim as well as the revaluation of project developments and the yielding asset portfolio.
-
As of 30 September 2021, our loan-to-value (LTV) excl. convertibles amounts to 55.4% (incl. convertibles 57.0%). Adler Group still pursues a sustainable financing strategy with an LTV target of below 50% in the medium term.
Disclaimer
THIS PRESENTATION AND ITS CONTENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL.
This presentation ("Presentation") was prepared by ADLER Group S.A. ("ADLER") solely for informational purposes and has not been independently verified and no representation or warranty, express or implied, is made or given by or on behalf of ADLER Group. Nothing in this Presentation is, or should be relied upon as, a promise or representation as to the future.
This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation or inducement to subscribe for, underwrite or otherwise acquire, any securities of ADLER Group, nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of ADLER Group, nor shall it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This Presentation is not an advertisement and not a prospectus for purposes of Regulation (EU) 2017/1129. Any offer of securities of ADLER Group will be made by means of a prospectus or offering memorandum that will contain detailed information about ADLER Group and its management as well as risk factors and financial statements. Any person considering the purchase of any securities of ADLER Group must inform itself independently based solely on such prospectus or offering memorandum (including any supplement thereto). This Presentation is being made available solely for informational purposes and is not to be used as a basis for an investment decision in securities of ADLER Group.
Certain statements in this Presentation are forward-looking statements. These statements may be identified by words such as "expectation", "belief", "estimate", "plan", "target" or "forecast" and similar expressions, or by their context. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial consequences of the plans and events described herein. Actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, but not limited to, future global economic conditions, changed market conditions affecting the industry, intense competition in the markets in which ADLER Group operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting ADLER Group' markets, and other factors beyond the control of ADLER Group). Neither ADLER Group nor any of its respective directors, officers, employees, advisors, or any other person is under any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No undue reliance shall be placed on forward-looking statements, which speak of the date of this Presentation. Statements contained in this Presentation regarding past trends or events should not be taken as a representation that such trends or events will continue in the future. No obligation is assumed to update any forward-looking statements.
This document contains certain financial measures (including forward-looking measures) that are not calculated in accordance with IFRS and are therefore considered "non-IFRS financial measures". Such non-IFRS financial measures used by ADLER Group are presented to enhance an understanding of ADLER Group's results of operations, financial position or cash flows calculated in accordance with IFRS, but not to replace such financial information. A number of these non-IFRS financial measures are also commonly used by securities analysts, credit rating agencies and investors to evaluate and compare the periodic and future operating performance and value of other companies with which ADLER Group competes. These non-IFRS financial measures should not be considered in isolation as a measure of ADLER Group's profitability or liquidity, and should be considered in addition to, rather than as a substitute for, net income and the other income or cash flow data prepared in accordance with IFRS. In particular, there are material limitations associated with the use of non-IFRS financial measures, including the limitations inherent in determination of each of the relevant adjustments. The non-IFRS financial measures used by ADLER Group may differ from, and not be comparable to, similarly-titled measures used by other companies. Certain numerical data, financial information and market data (including percentages) in this Presentation have been rounded according to established commercial standards. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts.
Accordingly, neither ADLER Group nor any of its directors, officers, employees or advisors, nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the fairness, accuracy or completeness of the information contained in the Presentation or of the views given or implied. Neither ADLER Group nor any of its respective directors, officers, employees or advisors nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection there-with. It should be noted that certain financial information relating to ADLER Group contained in this document has not been audited and in some cases is based on management information and estimates.
This Presentation is intended to provide a general overview of ADLER Group' business and does not purport to include all aspects and details regarding ADLER Group. This Presentation is furnished solely for informational purposes, should not be treated as giving investment advice and may not be printed or otherwise copied or distributed. Subject to limited exceptions described below, the information contained in this Presentation is not to be viewed from nor for publication or distribution in nor taken or transmitted into the United States of America ("United States"). Australia, Canada or Japan and does not constitute an offer of securities for sale in any of these jurisdictions. Any securities offered by ADLER Group have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state or other jurisdiction of the United States and such securities may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. This Presentation does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person or in any jurisdiction to whom or in which such offer or solicitation is unlawful.
Any failure to comply with these restrictions may constitute a violation of applicable securities laws. This Presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice.