Instone Real Estate Group AG

Investor Presentation • May 11, 2022

Q1 2022 Results Presentation

Disclaimer

Highlights

Portfolio Update

Q1 Financial Performance

Outlook

Appendix

Highlights

Highlights

Solid start to the year with continued high margins – High short term uncertainties

Operational Highlights	 Sales: Q1 demand continued at elevated levels; initial signs of demand slow down in our retail projects
	 Institutional customers still lacking attractive alternative investment opportunities
	 Supply: Supply bottlenecks have intensified as result of the war in Ukraine
	 Broad based material shortages likely to increasingly impact construction progress
	 Subcontractors lack visibility and are reluctant to fix prices for new contracts
	 Construction costs: Expect double digit y-o-y 2022 CPI growth; INS's margins benefit from high levels of pre-contracted fixed price works and conservative budgeting

Q1 in line with budget – Prior year benefitted from institutional deals

	 Adjusted revenues: €118.5m (Q1 2021: €128.1m, -7.5%)
Q1 2022	 Adjusted gross profit margin: 29.7% (Q1 2021: 31.6%)
Results	 Adjusted EBIT: €17.0m (Q1-2021: €26.7m, -36.3%)
	 Adjusted earnings after tax (EAT): €9.3m (Q1 2021: €15.8m, -41.1%)

Guidance for FY-2022 suspended due to low short term visibility

2.9 3.0 2.9 3.2 3.5 3.4 4.1 3.5 3.4 3.4 2.9 3.0 3.1 2.9 2.7 4.6 4.2 4.6 4.4 3.0 3.4 2.6 2.3 1.9 0.9 1.4 2.3 1.9 2.2 1.8 2.3 3.1 3.4 4.2 3.0 2.8 2.9 3.0 3.5 3.8 3.5 3.2 3.4 3.3 3.5 3.6 3.3 3.1 3.3 3.6 3.3 3.3 4.2 3.3 3.3 3.2 3.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 Robust retail demand despite crisis and rise in interest rates Sales ratio In % Influenced by bloc sale Influenced by bloc sale Long term Instone sales ratio Sales ratio

Retail sales ratio remains above long term mean since end of 1st lockdown; early indicators point to normalisation

Pricing expected to remain robust

Economic indicators point to rising short term risks

Price expectations building construction²

Material shortage in building construction² - Worsening since February again

Material shortages have intensified since Russia's invasion

• Worst material shortage in many decades due to disruptions in supply chains and relevance of Ukraine and Russia on the supply side (e.g. for wooden flooring, bitumen, reinforcing steel)
• Supply bottlenecks imply rising risks for construction delays (revenues recognition)
• Rise in construction costs of +15% y-o-y expected despite very high share of fixed price supplier contracts (>70% of expected construction volume 2022e)
• Margins remain relatively robust considering pre-agreed contracts and generous budgeting as well as ongoing positive price trends

Jump in interest implies rising uncertainty – positive price trend continued in Q1

Interest - Average 10y-fixed rate mortgage²

House price inflation¹

• Strong jump in interest rates within very short time period negatively effects affordability for certain customer groups
• Strong volatility in interest rates contributes to a rising uncertainty especially of private investors despite structurally strong demand (risk for slowdown in sales speed i.e. revenue recognition)

• Additional equity requirements imposed on banks by financial regulator (Bafin) might cause delays in lending processes and contribute to rising mortgage costs

  • Bundesbank: Mortgage loans for private households³ reached record high in March. Q1 2022 at €83.7bn (+21.2% qoq / +15.5 % yoy)

• Q1 signals a continued positive price trend

• Buying remains affordable compared to renting
• Instone price index captures official sales price list, inflation of condo sales during marketing phase only

Portfolio Update

Significant pipeline supports visibility for coming years

In €m New approvals Change in 03/2022 sales volume 12/2021 Completed projects 1 1 New approvals Completed 05/2022 projects

New project approvals	Exp. sales volume (€m)	Exp. units
YTD 2022
Metropolitan area NRW	14	34
Metropolitan area Nuremberg	85	140
Metropolitan area Berlin	145	361
Metropolitan area Frankfurt/Main	41	100
Total	285	635

10 | 11.05.2022 | Q1-2022 1) Share of at-equity JV not included

Project portfolio development (GDV)

Pre-sold units support future cash flow and earnings visibility

Project portfolio as of 31/03/2022 by region (GDV)

55 projects / 16,607 units

• 87% in metropolitan regions
• ~80 average sqm / unit
• ~€5,456 ASP / sqm
• Additional three JV projects (Instone share of GDV: ~€500m)

Project portfolio as of 31/03/2022 by building right status (GDV)

Kategorie 1 Kategorie 2

Project portfolio as of 31/03/2022 by development (GDV)

-150 -140 -130 -120 -110 -100 -90 -80 -70 -60 -50 -40 -30 -20 -10 0

102030

The scaling of the business continues to gain momentum

Adjusted revenues

Units under construction – ramping up the business

Construction starts

Q1 2022 Financial Performance

Adjusted Results of Operations

Leading profitability maintained

€m	Q1 2022	Q1 2021	Change
Revenues	118.5	128.1	-7.5%
Project cost	-83.3	-87.6	-4.9%
Gross profit	35.2	40.5	-13.1%
Gross Margin	29.7%	31.6%
Platform cost	-18.7	-16.3	14.7%
Share of results of joint ventures	0.6	2.5
EBIT	17.0	26.7	-36.3%
EBIT Margin	14.3%	20.8%
Financial and other results	-3.7	-4.1
EBT	13.4	22.6	-40.7%
EBT Margin	11.3%	17.6%
Taxes	-4.1	-6.8
Tax rate	30.6%	30.2%
EAT	9.3	15.8	-41.1%
EAT Margin	7.8%	12.3%
EAT post minorities	9.4	16.1	-41.6%
EPS	0.20	0.34	-41.2%

• Lower revenues as prior year's figure benefitted from signing of institutional deals
• Industry leading gross margin maintained, underpinning strength of INS's business model
• Lower EBIT and EAT margin mainly due to lower Q1-topline
• Decreasing interest expenses due to lower gross financial debt position

Strong balance sheet secures defensive profile and leaves headroom for growth

€m	31/03/2022	31/12/2021
Corporate debt	200.3	199.1
Project debt	227.5	191.4
Financial debt	427.7	390.5
Cash and cash equivalents and term deposits	-160.3	-151.0
Net financial debt	267.4	239.5
Inventories and contract asset / liabilities	1,223.9	1,190.1
LTC*	21.8%	20.1%
Adjusted EBIT (LTM)**	146.0	155.7
Adjusted EBITDA (LTM)**	150.6	160.3
Net financial debt / adjusted EBITDA	1.8	1.5

• 21.8% LTC implies very low financial gearing
  • Reminder: inventories are recorded at historical costs
  • Significant hidden reserves provide additional downside cushion
• Also net debt/adjusted EBITDA of 1.8x confirms strength of the INS balance sheet
• Strong balance sheet is cornerstone for low risk profile; significant headroom for future growth

Financially strong position

Cash Flow (€m)	Q1 2022	Q1 2021
EBITDA adj.	18.2	27.9
Other non-cash items	-6.4	-2.5
Taxes paid	-0.4	-8.5
Change in working capital	-24.1	134.4
Operating cash flow	-12.7	151.3
Land plot acquisition payments (incl. 38.1 RETT*)		8.7
Operating cash flow excl. investments	25.4	160.0

Positive CF pre land investments

Negative operating cash flow in 2022 expected due to planned investment in land plots for future growth

Liquidity (€m)	Total drawn		t/o available
Corporate debt
Promissory notes	197.5	197.5	0.0
Revolving Credit Facilities	119.0	0.0	119.0
Total	316.5	197.5	119.0
Cash and cash equivalents and term deposits			160.3
Total corporate funds available			279.3
Project debt
Project finance**	390.9	226.9	164.0

Ample financial headroom for future growth

Well balanced financing structure at attractive terms

Maturity profile (corporate debt) as of 31/03/2022

Weighted average corporate debt maturity	2.2 years
Weighted average corporate interest costs	3.33%
Share of corporate debt with floating interest	24.1%

Secured/unsecured as of 31/03/2022

Project financing is variable but typically floored at EURIBOR of 0% (currently around -40 bps). This rise in interest has overall only very limited impact on bottom line results.

All calculations based on drawn values

Intrinsic pipeline value indicates fundamental upside

Additional upside from planned future growth investments

Prospective NAV (€m)	31/03/2022
Expected selling prices of project pipeline (GDV)	7,568	7,500
Payments received	-1,297	-1,191
Expected project costs	-4,240	-4,293
Net debt*	-241	-240
Expected proceeds from "at-equity" projects	132	132
Prospective Net Asset Value	1,921	1,909
Number of shares (m)**	46.9	47.0
Prospective Net Asset Value per share (€)	40.96	40.62

• Payments received reflect project related income received to date from pre-sale of pipeline and rental income
• Expected project costs include future expected payouts required to complete INS project pipeline
• Proceeds from "at-equity" projects reflect profit from subsidiaries accounted for "at-equity"

* Net debt incl. expected incoming short term payments that are not shown in Project NAV ** Number of shares excluding treasury shares as at 31/03/2022

Appendix

2021 ESG achievements and disclosures

	• Scope 1, 2 and 3 GHG1 emissions according to TCFD3 guidelines
Environment	SBTI2 • compliant net zero targets (Net zero climate neutrality by 2045)
	• Qualitative climate-scenario analysis
	• Declared membership of German Sustainable Building Council (DGNB), pre-certification of pilot project nyoo in platinum (requirement for series certification)
	• Completed first stakeholder survey, initiated platform for continuous dialogue
	• Started construction of first two affordable housing projects under Instone innovative "nyoo" brand
Social	• Confirmed Instone's position as an attractive employer
	• Re-iterated affirmative diversity policy
	• Confirmed Instone's responsibility for work standards at our contractors
	• Established first independent ESG rating by Sustainalytics; ranked top 2% among global developers
	• Strengthened ESG governance structure
Governance	• Established 3 people strong dedicated ESG team
	• Established sustainability targets in management compensation scheme
	• Launched ESG website

1) GHG=Greenhouse gas emissions / Scope 1-3: classification of emissions (direct and indirect) according to GHG Protocol

2) SBTI=Science-Based Targets Initiative / New approach for setting emissions reduction targets with focus on the amount of emissions that have to be reduced in order to meet the goals of the Paris Agreement, limiting global warming to 1.5°C

21 | 11.05.2022 | Q1-2022

3) Task Force on Climate Related Financial Disclosures

GHG emissions of the INS portfolio significantly below German average

GHG emissions Instone portfolio¹

22 | 11.05.2022 | Q1-2022

• High-quality insulation and modern heating technology lead to significantly reduced GHG emissions for Instone projects compared to average of existing resi buildings in Germany
• Instone targets share of buildings with primary energy demand of less than 90% compared to NZEB² (NZEB -10%) by 2030 of 100%

Project portfolio per energy efficiency standard (as of 31/12/2021)3

2) As defined as of December 31, 2021

3) Based on share of surface area / Portfolio: All buildings planned, under construction and completed in 2021

Major ESG-KPIs – achievements and targets

	Major KPIs	2020	2021	Targets
	Expected GHG emissions of portfolio in use	11 kg CO2e/m²	9.5 kg CO2e/m²	-50% (2030 vs. 2020)
E	Share of projects with renewable energy supply	~14%	~22%	At least 40% (2030)
	Share of projects with energy requirements at least NZEB -10%	~79.6%	~82.5%	100% of project portfolio in 2030
	GHG emissions / scope 1 and 2 abs.	3,387 t CO2e	3,456 t CO2e	-42% (2030 vs. 2020)
	GHG emissions / scope 1 and 2 Intensity	0.024 t CO2e/sqm	0.010 t CO2e/sqm	-42% (2030 vs. 2020)
	GHG emissions / scope 3 abs.	110,058 t CO2e	147.849 t CO2e	Net zero climate neutrality (2045)
	GHG emissions / scope 3 Intensity	0.766 t CO2e/sqm	0.416 t CO2e/sqm	Net zero climate neutrality (2045)
	Charging stations for EVs	~330	~734	From 2025, 100% of projects in construction to provide charging stations
	Brownfield developments (land plot size)	833.746sqm	690,204sqm	Acquisition focus on brownfield projects
	Collection of environmental KPIs (e.g. environmental diversity, waste, water and recycling)	/	ongoing	100% data delivered by 2025
S	Shares of affordable housing: social / subsidized / privately financed (incl. nyoo)	15% / 2% / 83%	17% / 1.5% / 81.5%	at least 50% share of revenues with affordable housing (social / subsidized / nyoo) by 2030
	Share of female employees in management positions (below C-level)	25% (1st)* / 22% (2nd)	25% (1st)* / 23% (2nd)	at least stable
	Employee satisfaction and loyalty	75%	70% / 76%	75% / 80%
	Code of Conduct for employees and contractors (UN Charter)	100%	100%	100%
G	Employee compliance and data protection training	96%	99%	100%
	Compliance cases (suspected)	2	0	0
	Independent Supervisory Board	100%	100%	100%
	of ESG targets into management compensation scheme (1st Integration management level)	Implemented	Implemented	Continuous evaluation and adoption

23 | 11.05.2022 | Q1-2022

KPI definitions and further explanations can be found in our Annual Report 2021, p. 60

Project Portfolio Key Figures

€m	Q1 2022	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020
Volume of sales contracts	87.6	761.7	170.7	89.1	118.6**	246.0	94.9	54.1*	69.4
Project Portfolio	7,567.7	7,500.0	7,154.9	6,268.1	6,054.2	6,053.6	5,937.5	5,701.3	5,744.4
thereof already sold	3,070.1	3,038.9	2,308.7	2,444.0	2,360.5	2,328.8	2,108.6	2,017.1	2,189.0
thereof already realized revenues	1,684.0	1,621.0	1,276.2	1,436.1	1,307.8	1,265.5	n.a.	n.a.	n.a.
Units	Q1 2022	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020
Volume of sales contracts	191	1,906	468	169	372**	708	128	347*	109
Project Portfolio	16,607	16,418	15,913	14,338	13,678	13,561	13,374	13,075	12,952
thereof already sold (Unless otherwise stated, the figures are quarterly values)	7,404	7,215	5,401	5,679	5,510	5,381	4,770	4,648	4,799

*Of which €24.3m (303 units) from updated business plan of already sold project Westville.

**Of which €6.3m (186 units) from updated business plan of already sold project part in "Schönhof-Viertel", Frankfurt.

Project Portfolio as of 31/03/2022

(projects > €30m sales volume, representing total: ~ €7.6bn)

Project	Location	Sales volume (expected)	Land plot acquired	Building right obtained	Sales started	Construction started
Hamburg
Schulterblatt "Amanda"	Hamburg	96 Mio. €
Kösliner Weg	Norderstedt-Garstedt	93 Mio. €
Sportplatz Bult	Hannover	120 Mio. €
Rothenburgsort	Hamburg	215 Mio. €
Büntekamp	Hannover	146 Mio. €
Saeseler Chaussee 211	Hamburg	84 Mio. €
Berlin
Rote Kaserne West	Potsdam	67 Mio. €
NRW
Niederkasseler Lohweg	Düsseldorf	N/A
Unterbach / Wohnen am Hochfeld	Düsseldorf	197 Mio. €
Literaturquartier	Essen	N/A
REME	Mönchengladbach	118 Mio. €
west.side	Bonn	202 Mio. €
Gartenstadtquartier	Dortmund	103 Mio. €
Bickendorf	NRW	716 Mio. €
Projekt NRW - I	NRW	73 Mio. €

Semi-filled circle means that the milestone has already been achieved for sections of the project (land plot acquisition, start of sales or construction). Concerning the building rights the semi-filled circle means that the zoning process has been initiated. No circle for "land plot acquired" means that the land has not yet been purchased but secured by contract.

Project Portfolio as of 31/03/2022

(projects > €30m sales volume, representing total: ~ €7.6bn)

	217 Mio. €
	306 Mio. €
	87 Mio. €
	56 Mio. €
	41 Mio. €
	N/A
	186 Mio. €
	156 Mio. €
Maintal	207 Mio. €
Hofheim	61 Mio. €
Wiesbaden	284 Mio. €
Maintal	97 Mio. €
Leipzig	109 Mio. €
Leipzig	260 Mio. €
Leipzig	109 Mio. €
Halle (Saale)	38 Mio. €
	Wiesbaden Frankfurt Frankfurt am Main Frankfurt am Main Frankfurt am Main Frankfurt am Main Frankfurt am Main Frankfurt am Main Wiesbaden Heusenstamm	106 Mio. € 604 Mio. €

Semi-filled circle means that the milestone has already been achieved for sections of the project (land plot acquisition, start of sales or construction). Concerning the building rights the semi-filled circle means that the zoning process has been initiated. No circle for "land plot acquired" means that the land has not yet been purchased but secured by contract.

Project Portfolio as of 31/03/2022

(projects > €30m sales volume, representing total: ~ €7.6bn)

Project	Location	Sales volume (expected)	Land plot acquired	Building right obtained	Sales started	Construction started
Baden-Wurttemberg
City-Prag - Wohnen im Theaterviertel	Stuttgart	128 Mio. €
Schwarzwaldstraße	Herrenberg	50 Mio. €
S`LEDERER	Schorndorf	N/A
Neckartalterrassen	Rottenburg	164 Mio. €
Schäferlinde	Herrenberg	61 Mio. €
Schwarzwaldstraße BA II	Herrenberg	70 Mio. €
Bavaria South
Ottobrunner Straße	München	100 Mio. €
Beethovenpark	Augsburg	N/A
Bavaria North
Schopenhauerstraße	Nürnberg	68 Mio. €
Stephanstraße	Nürnberg	N/A
Seetor	Nürnberg	112 Mio. €
Eslarner Straße	Nürnberg	50 Mio. €
Lagarde	Bamberg	81 Mio. €
Boxdorf	Nürnberg	59 Mio. €
Marina Bricks	Regensburg	30 Mio. €
Thumenberger Weg	Nürnberg	111 Mio. €
Worzeldorf	Nürnberg	68 Mio. €
Projekt Bayern Nord - I	Nürnberg	85 Mio. €

Semi-filled circle means that the milestone has already been achieved for sections of the project (land plot acquisition, start of sales or construction). Concerning the building rights the semi-filled circle means that the zoning process has been initiated. No circle for "land plot acquired" means that the land has not yet been purchased but secured by contract.

Instone Share

• ISIN: DE000A2NBX80 • Ticker symbol: INS • No of shares: 46,988,336 • Index: SDAX • Market cap*: €690m • Average daily trading volume: €1.4m • Free float (May 09, 2022): 99.2% • Market segment: Prime Standard, Frankfurt Basic data Shareholder structure (May 09, 2022) Fidelity 9.99% Janus Henderson 8.40% Activum 5.09% Capital 4.87% DWS 4.84% Union Investment 3.38% Allianz 3.31% Amundi 3.07% Schroders 3.07% Aberdeen 3.02% Treasury Shares 0.78% Others 50.18%

Financial Calendar

2022

May	12	Quarterly Statement for the first quarter of 2022
May	13	Roadshow Europe, Deutsche Bank (virtual)
May	16	Roadshow UK, Credit Suisse, (London)
May	19	German SMID Cap Forum, Stifel Europe, Frankfurt/Main
May	25	dbAccess German Corporate Conference, Fankfurt/Main
June	09	Annual General Meeting
June	16	Morgan Stanley Europe & EEMEA Property Conference, London
June	29	Pan-European Real Estate Conference, Kepler Cheuvreux, Paris
August	11	Group Interim Report for the first half of 2022
September	19	11th German Corporate Conference, Berenberg/Goldman Sachs, Munich
November	10	Quarterly Statement for the first nine months of 2022

Investor Relations Contacts

Burkhard Sawazki

Head of Business Development & Communication

T +49 201 45355-137 M +49 173 2606034 burkhard.sawazki@instone.de

Simone Cujai

Senior Investor Relations Manager

T +49 201 45355-428 M +49 162 8035792 simone.cujai@instone.de

Tania Hanson

Roadshows & Investor Events

T +49 201 45355-311 M +49 152 53033602 tania.hanson@instone.de

Instone Real Estate Group SE Grugaplatz 2-4, 45131 Essen E-Mail: investorrelations@instone.de Internet: www.instone.de/en