Company Presentation Consus Real Estate AG April 2019 Disclaimer - - PowerPoint PPT Presentation
Company Presentation Consus Real Estate AG April 2019 Disclaimer - - PowerPoint PPT Presentation
Company Presentation Consus Real Estate AG April 2019 Disclaimer Titel 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
Titel
Consus Real Estate AG
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 exclusively by Consus Real Estate AG (“Consus”) 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 Consus. 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 Consus, 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 Consus, 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 the purposes of the Prospectus Directive (as defined below). Any offer of securities of Consus will be made by means of a prospectus or offering memorandum that will contain detailed information about Consus and its management as well as risk factors and financial statements. Any person considering the purchase of any securities of Consus must inform itself independently based solely on such prospectus or offering memorandum (including any supplement thereto). This Presentation is being made available to you solely for your information and background and is not to be used as a basis for an investment decision in securities of Consus. 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 Consus operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting Consus’ markets, and other factors beyond the control of Consus). Neither Consus 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. You should not place undue reliance 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 the Consus are presented to enhance an understanding of the Consus'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 the Consus competes. These non-IFRS financial measures should not be considered in isolation as a measure of the Consus’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 the Consus 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 Consus 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 Consus 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 Consus 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 Consus’ business and does not purport to include all aspects and details regarding Consus. This Presentation is furnished solely for your information, 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 Consus 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. By receiving this Presentation, you agree to be bound by the foregoing limitations. 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.
Titel
Consus Real Estate AG
- I. Overview
Consus Real Estate AG
Consus - the leading real estate developer in Germany
4 €
Breakdown of the development portfolio by city(5)
Frankfurt 13% Berlin 12% Dusseldorf 4% Leipzig 13% Stuttgart 18% Cologne 11% Hamburg 20% Munich 5% Dresden 4%
(1) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed; (2) As of 31 Mar 2019, incl. LOIs of €68m, LOIs under negotiation of €498m and pre-sold condominiums of €151m; (3) EBITDA pre Purchase Price Allocation (PPA) and pre one-off costs; (4) As appraised by third party appraiser as of 31 Dec 2018; (5) Dortmund is included in Düsseldorf, Erfurt is included in Leipzig; Böblingen, Karlsruhe and Mannheim are included in Stuttgart, Bayreuth and Passau are included in Munich, Offenbach is included in Frankfurt am Main
Development portfolio breakdown
64 projects in total(1)
Focus on Forward Sales
▶
The leading German residential developer, with focus on top 9 German cities
▶
Strong market share in undersupplied German residential real estate market with focus on affordability
▶
Forward sale-oriented business model de-risks development, financing and exit
▶
Fully integrated real estate platform covering the entire value chain
▶
Headquartered in Berlin with ~780 employees currently focused on construction and sales
▶
PF FY2018 Revenues of €656m and Adjusted EBITDA of €253m
Unique business model Key financials + KPIs
~20%
Targeted Medium-term Adjusted EBITDA margin
€2.95bn
Market GAV(4)
€9.6bn GDV(1)
development portfolio across
64 projects €2.5bn
GDV in forward sales volume contracted + LOI(2)
3.0x
Targeted Medium-term Net Debt / Adjusted EBITDA
Diversified across the top 9 cities in Germany
GDV: €9.6bn(1)
Target Forward Sales 35% Forward Sold(2) 26% Condominiums 20%
Development portfolio breakdown
Upfront sale/LOI signed 18% 80% with forward sales approach; 33% of which is already forward sold or under LOI(2)
€450m
Targeted Adjusted EBITDA(3) 2020
Consus Real Estate AG
Consus has 20+ years of experience in the real estate development business in Germany
5
(1) On a fully diluted basis; (2) Includes 5 new projects with a total GDV of €750m that have been secured from 16 April 2018
1995 Foundation of CG Gruppe 2007 2007: Start Project development 2009 2009: First forward sales to institutional purchasers 2010: Started expanding in Germany 2010 2017 Aug 2017: Acquisition of 50% stake in CG 2018 Q1 2016 Significant investment in CG by Aggregate Nov 2017: Issue of €200m convertible bond Dec 2017: Consus stake in CG increased to 59%(1) April 2017: Listing of Consus on XETRA Dec 2017: €680m forward sale April 2018: €750m development growth(2) June 2018: Equity raise of €131m to support further growth August 2018: Agreement to increase stake in CG up to 75%(1) November 2018: Acquisition of SSN Q4 2018: Consus signed forward sale agreements with a GDV of €443m 2019 Q1 2019: Consus signed 3 forward sale agreements with a GDV of €170m
Consus Real Estate AG
Consus is the leading real estate developer in Germany’s top 9 cities
6
Footprint in Germany further enhanced by the acquisition of SSN
(1) Bulwiengesa study based on projects until 2023; Consus’ long-term projects that will be completed after 2023 such as Hamburg Holsten and Stuttgart Vaihingen are not included; Current Consus total development area of 2.1m m2
Area 369 km² €1,930m GDV 20% of total GDV #1 Hamburg Area 364 km² €1,720m GDV 18% of total GDV #2 Stuttgart Area 536 km² €1,277m GDV 13% of total GDV # 4 Leipzig Area 198 km² €1,176m GDV 12% of total GDV #3 Berlin Significant increase in development activities through SSN acquisition Berlin Leipzig Dresden Frankfurt Dusseldorf Cologne Hamburg Stuttgart Munich
CG SSN
SSN acquisition rationale A leading development platform in Germany Excellent portfolio fit, enhancing Consus’ German footprint Attractive land plots in Germany’s top metropolitan areas Strategic fit of SSN forward sales business model Significant synergy potential The leading property developer in Germany’s top 9 cities(1)
Note: Bulwiengesa Projektentwicklerstudie Top 9 Cities in Germany as of 21 Mar 2019
500 1,000 1,500 2,000 Büschl PROJECT PI Pandion Groß & Partner BPD Bonava Instone Zech Group Consus
in m2 ’000s
Development area (‘000 sqm)
(1)
Consus Real Estate AG
Consus’ management team
A strong and proven management team across the group
7
» Over 25 years operational and leadership experience in German real estate companies » Former CEO of publicly listed DEMIRE, expansion of buy-to-hold assets >€ 1bn » Previously Deka Immobilien and partner at Ernst & Young Real Estate
Andreas Steyer CEO Consus
» Over 25 years experience in the financial industry with 14 years at UBS (IB) » Previously at Aggregate Holdings, the majority shareholder of Consus » 5 years of experience as board member and CFO of a publicly listed company
Benjamin Lee CFO Consus
» Several years of experience in the financial sector in Amsterdam and Frankfurt » Formerly at ABN Amro and Bethmann Bank » Responsibilities at SSN Group include Finance, Business Development, Debt Advisory, Risk Management
Theo Gorens Deputy CFO and CRO Consus
» Founder and CEO of CG Gruppe and one of the leading entrepreneurs in the German real estate development sectors » Leading innovation in the industrialization and digitalisation of the real estate development
Christoph Gröner CEO CG Gruppe
»
- Mr. Kutz has been Deputy-CEO and COO since 2011 and is in charge of the project development,
forward sales and the financing of projects of CG Gruppe » Previously Senior Real Estate Asset Manager with Lone Star Funds, and before CEO of Alpine Finanz Group
Jürgen Kutz COO CG Gruppe
» CEO and founder of SSN Group » He founded SSN Group in 2004 and has a development track record of €7.5bn GDV since its foundation
Michael Tockweiler CEO SSN
Titel
Consus Real Estate AG
- II. Company highlights
Consus Real Estate AG
Company highlights
Strong operational capabilities and track record IV. Unique and flexible business model II. Robust development portfolio III. Solid cash flow generation model and performance visibility V. Exposure to Germany’s favorable macro conditions in highly attractive locations I. Experienced management team VI.
9
Consus Real Estate AG
Exposure to Germany’s favourable macro conditions in highly attractive locations
Attractive housing sector fundamentals in the strongest European economy I.
10
0.0% 1.1% 0.4% 1.1% 0.9% Germany UK France Spain EU
- 8.0%
- 6.0%
- 4.0%
- 2.0%
0.0% 2.0% 4.0% 6.0% 70 80 90 100 110 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Rental-price index GDP growth 1.3% 1.3% 0.9% 0.4% 1.0% Germany UK France Spain EU
Germany as “safe haven” economy
Source: EIU
GDP CAGR 2008-2018
Source: EIU, Bloomberg as of 21 Mar 2019 64% 87% 98% 98% 82%
10-year government yield Mar-2019
Government debt (2017, % of GDP)
Largest housing market in Europe
82.5 67.3 65.7 46.5 18.2 41.5 28.1 30.4 18.9 8.0 Germany UK France Spain EU Forecast of total population per country in 2020 (m) Forecast of total households per country in 2020 (m) Source: BMI 51.4% 65.0% 64.4% 77.1% 69.3% Germany UK France Spain EU Source: Eurostat Source: Destatis, EIU Source: Eurostat 20.6% 29.6% 22.6% 32.1% 24.7% Germany UK France Spain EU
Share of rent in disposable household income as % of total (2017)
Strong and consistent rental price growth
No decline in rental prices in over 20 years across the economic cycle (1) Average based on 28 EU member countries; (2) Average based on 25 EU member countries excluding Estonia, Luxembourg and Malta
(2) (1) (1) (1) (1)
Lowest “risk free” rate in Europe Strong rental culture; low home ownership Rent affordability remains healthy
Home ownership rate (%) (2017)
2018
Consus Real Estate AG
Exposure to Germany’s favourable macro conditions in highly attractive locations
Excellent business opportunity for residential developers
11
I.
» Since 2015 apartment prices exceed construction costs for the first time since reunification in Germany making it more attractive for developers » Due to reluctance against homeownership in Germany, property prices have stagnated/partly decreased for almost two decades (1995-2015) » Development sector is highly fragmented in Germany, with limited large scale companies » Residential market is highly undersupplied due to population growth and low development activities » With c. 285,000 completed apartments in 2017, supply is still below the annual requirement of c. 400,000 apartments(2)
…and provides market opportunities for developers(3) Supply mismatch led to rising rents and declining vacancies…(1)
2,966 2,813 €/m2
(1) Empirica, CBRE;(2) Welt.de – Real Estate; (3) Statistisches Bundesamt, Savills, UBS Research, Destatis/Empirica
2
€/m2 1,500 2,000 2,500 3,000 3,500
Construction Cost (Land & Construction Cost) Condominium Prices
1.0% 2.5% 4.0% 5.5% 4.0 5.0 6.0 7.0 8.0 Rent Price (€/m p.m., LHS) Vacancy Rate (%, RHS)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Consus Real Estate AG
Unique and flexible business model Forward sales business model reduces development risks
Key advantages of the forward sale business model
Flexibility to optimise development pipeline based on local demand Faster project development through high volume sales to institutional purchasers Well balanced projects’ cash flows through development milestones Future upside from rental increases built in the forward sale agreements Well positioned for “Quartier” development, in line with the institutional purchasers’ investment policy (mix of residential and commercial tenants) Stable and broad relationships with authorities as institutional purchasers are “good landlords” focused on middle-income tenants Attractive rental spreads over bund yields for institutional purchasers
(1) As of 31 Mar 2019, incl. LOIs of €68m, LOIs under negotiation of €498m and pre-sold condominiums of €151m; (2) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed; (3) Selection of Consus’ forward sale investors
II.
12 ~80% of the portfolio based on forward sales… Germany: attractive rental yield spreads vs. 10y Bunds …to large institutional purchasers (3) GDV: €9.6bn(2)
Target Forward Sales 35% Forward Sold(1) 26% Condominiums 20%
€2.5bn already forward sold(1) (24%) €1.8bn upfront sale (incl. LOI signed) (18%) €7.6bn of entire GDV with forward sales approach (80%)
Development portfolio breakdown
0.0% 2.0% 4.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Bundesbank 10Y year-end yield Rental yield in Germany
Source: Bulwiengesa , Bloomberg
Global financial crisis Expected economical recovery and loosening monetary policy Upfront sale / LOI signed 18% 80% with forward sales approach; 33% of which is already forward sold or under LOI(1)
€3.4bn to be forward sold (37%)
Consus Real Estate AG
Unique and flexible business model Core business model consists of forward sales to institutional purchasers
13
Consus acquires land plots and lays out overall project structure Finalize the project and obtain building permits for residential developments with commercial potential Prior to starting construction, projects are forward-sold to institutional purchasers Construction begins after completion of the forward-sale and is paid on the basis of pre- agreed milestones over the construction period
Forward sales model targeting a cash flow positive profile as soon as the first payment is received Flexibility to optimise development pipeline based on local demand Reduced requirement for capital due to early capital recycling Minimize “lock-in” period of equity investment given forward sale business model
GDV: €9.6bn(1)
80% with forward sales approach
Business model focused on Forward Sales – existing project portfolio enables dynamic portfolio management I II. III. IV.
Buy
Plots
I.
Plan
Project
II.
Sell
Forward
III.
Build
& Deliver
IV.
(1) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed
Development portfolio Post building permit, construction phase takes ~24-36months
II.
Consus Real Estate AG
Unique and flexible business model Condominium units sold to retail purchasers complement the core business model
14
Consus acquires land plots and lays out overall project structure Finalize the project and obtain building permits Condominium units sold to retail purchasers with higher margins compared to forward sales Significant amount of construction cost covered by regular payments with final instalment received at completion
Complements the core business model as condominiums are often a part of larger quartier developments Pre-defined payment schedule with typical 30% payment upfront and pre-agreed payment milestones Favourable legal framework with the customer liable in full for the scheduled payments unless incurred during personal bankruptcy Majority of construction costs can be covered by financing secured on the customer’s payments Focused on higher value properties where materially higher pricing obtained through to retail sales
GDV: €9.6bn(1)
20% with condominium sales approach
Business model for Condominium projects I II. III. IV.
Development portfolio
Buy
Plots
I.
Plan
Project
II.
Sell
III.
Build
& Deliver
IV.
Post building permit, construction phase takes ~24-36months
II.
(1) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed
Consus Real Estate AG
Unique and flexible business model €680m forward sale of “VauVau” shows ability to execute large projects with minimum development risks
15
II.
» Renovation and conversion of office buildings and high-rises into modern residential and commercial complexes » Located in major cities under the brand VauVau » The VauVau concept offers smart and efficient usage of space and combines new ways of living and technology (shared office space, integrated services etc.) » Phasing of the projects: Construction of 4 of the 5 projects initiated and VauVau Dusseldorf construction to start in April 2019
The €220m prepayments received from VauVau projects in 2018, on total forward sale contracts of €680m, demonstrate the strong FCF conversion capacity of the forward sales model Five individual projects under the brand VauVau forward sold to an institutional purchaser
DRESDEN – Annenstr. LEIPZIG – Pragerstr. OFFENBACH/FRANKFURT DUSSELDORF – Mercedesstr. COLOGNE – Stolkgasse
# units 191 Residential space 11,155 m2 Commercial space 3,323 m2 Completion date 2020/2021 # units 296 Residential space 16,042 m2 Commercial space 4,250 m2 Completion date 2020 # units 632 Residential space 31,538 m2 Commercial space 6,207 m2 Completion date 2020/2021 # units 423 Residential space 23,972 m2 Commercial space 1,094 m2 Completion date 2022 # units 202 Residential space 10,207 m2 Commercial space 11,604 m2 Completion date 2020
Consus Real Estate AG
Unique and flexible business model Bottom-up approach to forward sale price negotiation aims to lock-in profitability
16
II.
Land acquisition costs Planning costs Other costs Contracted cash inflow Rent upside potential
Land acquisition costs: 19-25% Construction costs (excl. planning) Planning costs 15% of Total Construction costs
Indicative overview of cost structure Indicative cost and profit structure
20% Targeted Adjusted EBITDA margin
I II III IV
Illustrative example Total Construction costs: 75-81%
Further upside Construction costs
Land acquisition access and sourcing » Broad network with strong access to municipalities and key decision makers » Well established market player with robust reputation » Ability to develop complex large-scale projects with quartier / phasing approach Re-development potential with minimized cost
- verrun risk
» Focus on turnkey contracts with 3rd party contractors minimising cost over-runs where possible » Integrated development platform with in-house development capabilities, facilitates re-development owing to lack of such competences in the market » Up to 30% construction costs future reduction potential through digitalization Contractually agreed cash inflows with significant rent upside potential » “Minimum price” forward sale contract with institutional purchasers targeted to fully cover the construction costs » Contracts structured to provide upside from rent increases upon construction completion/renting of finished projects » Capitalize on potential operational synergies through accretive acquisitions I II III IV
Ability to budget project costs enables upside potential
Illustrative example
Consus Real Estate AG
Robust development portfolio A sizeable €9.6bn GDV portfolio still in ramp-up phase
17
III.
Asset class
Standardised rental apartment blocks and integrated residential and commercial developments (“Quartier”)
Location
Focus on top 9 German cities
Size
Standardised 100+ apartments
Forward sale focus
Forward sale to institutional purchasers, with target of forward selling price agreed before start of construction
Lot Size
Sized for demand (1-2 bedroom with 50-70m2) + VauVau concept at around approx. 50m2
Investment criteria
(1) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed; (2) Reflects GDV reduction by € 122m through sales of Xberg and HAU BT 4-6 in December 2018
Consus has achieved a sizeable portfolio of projects....
4.6 9.6 0.7 0.9 3.5
1 2 3 4 5 6 7 8 9 10 GDV as of Dec 2017 Organic acquisitions H1 2018 Organic acquisitions H2 2018 SSN acquisition GDV as of Dec 2018(1) (2)
....still in ramp-up phase
€bn
GDV: €9.6bn(1)
30% under construction (~40-50% target)
Development portfolio
Consus Real Estate AG
Robust development portfolio Strong existing development portfolio in top 9 German cities
18
III.
Strong footprint in Germany’s top economic regions – 64 projects with GDV of € 9.6bn(1)
Consus has a flexible portfolio extending until 2026 under the current business plan
(1) ) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed; Dortmund is included in Düsseldorf, Erfurt is included in Leipzig; Böblingen, Karlsruhe and Mannheim are included in Stuttgart, Bayreuth and Passau are included in Munich, Offenbach is included in Frankfurt am Main
Leipzig/Erfurt GDV in €m: 1,277 Area in k m²: 536
- Avg. Sales Price:
2.390 % of total GDV: 13% Projects: 17 Cologne/Aachen GDV in €m: 999 Area in k m²: 209
- Avg. Sales Price:
4.772 % of total GDV: 10% Projects: 5 Frankfurt/Offenbach GDV in €m: 1,238 Area in k m²: 173
- Avg. Sales Price:
7.154 % of total GDV: 13% Projects: 7 Hamburg GDV in €m: 1,930 Area in k m²: 369
- Avg. Sales Price:
5.231 % of total GDV: 20% Projects: 6 Berlin GDV in €m: 1,177 Area in k m²: 198
- Avg. Sales Price:
5.183 % of total GDV: 12% Projects: 9 Dresden GDV in €m: 416 Area in k m²: 93
- Avg. Sales Price:
4.496 % of total GDV: 4% Projects: 6 Dusseldorf/Dortmund GDV in €m: 369 Area in k m²: 65
- Avg. Sales Price:
5.685 % of total GDV: 4% Projects: 4 Stuttgart/Karlsruhe GDV in €m: 1,720 Area in k m²: 364
- Avg. Sales Price:
4.718 % of total GDV: 18% Projects: 7
Berlin Leipzig Dresden Frankfurt Dusseldorf Cologne Hamburg Stuttgart Munich
Munich GDV in €m: 478 Area in k m²: 67
- Avg. Sales Price:
7.078 % of total GDV: 5% Projects: 3
Consus Real Estate AG
Robust development portfolio Balanced distribution of properties to be developed in the short and medium term
19
III.
# Entity Project Name City GDV in €m % of Total GDV % Residential Net floor area in m² Status Development Time-frame 1 Garden Campus Stuttgart 976 10% 79% 186,581 Planning 2020 – 2025 2 416 (Freiladebahnhof)* Leipzig 884 9% 53% 267,941 Planning 2020 – 2025 3 Holsten Quartiere Hamburg 876 9% 71% 145,749 Planning 2021 – 2026 4 Cologneo I Cologne 389 4% 37% 90,607 Construction 2018 – 2021 5 Quartier C Karlsruhe 371 4% 64% 111,249 Planning 2021 – 2025 6 The Wilhelm Berlin 366 4% 85% 17,720 Construction 2018 – 2021 7 Neuländer Quarree Hamburg 357 4% 37% 81,315 Planning 2020 – 2023 8 Cologneo II Cologne 351 4% 64% 71,583 Planning 2022 – 2025 9 Covent Garden Munich 296 3% 93% 26,952 Planning 2020 – 2022 10 Frankfurt Ostend Frankfurt 283 3% 54% 39,000 Planning 2021 – 2023 Top 10 5,147 53% 61% 1,038,967
Main focus on residential and “quartier” developments Approach to develop large projects in phases All “quartier” developments include commercial properties
* Signed sale contract
€9.6bn(1)
64 projects
Residential 60.3% Other 7.4% Retail, Office & Hotel 32.3%
(1) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed
Commercial units linked to residential projects sold as a combined development project
Consus Real Estate AG
Strong operational capabilities and track record Competitive advantage through digitalisation IV.
20
Full digitalization expected to be implemented by the end of 2020 with 20 development projects already using BIM
(1) Based on management estimates
Reduce labour costs per m2/ concrete Ability to pre-fabricate wall and ceiling units for ~1,950 residential units per year(1) Wall units up to 30% cheaper than market price level(1) Plant will be one of Europe’s
Digital-oriented construction process with potential to drive substantial cost and time savings
Digital construction and development platform
» Digitalized offering to include component catalogue, procurement platform, floor plan generator and configurator » Further supported by the recent acquisition of the PropTech company DIPLAN
Introduction
- f new
building standards
» Building Information Modelling (BIM): 6 dimensional approach to construction processes » 2D = Architectural planning; 3D = Digital 3D plan; 4D = Time; 5D = Cost; 6D = Lifecycle » Reduced procurement costs via direct supply chain management
Pre-fabrication
- perations
with partner
» Setting up a highly automated pre-fabrication plant in Erfurt in partnership with European Modular Constructions GmbH » Plant will be one of Europe’s largest for construction elements » Targeted to start production in 2020 with focus on massive concrete parts Save up to 6 months in the development timeline(1) II III I
Consus Real Estate AG
Strong operational capabilities and track record Over €450m forward sales and substantial development milestones achieved in 2018
21
IV.
–
» A well-known institutional investor acquired part of the ‘Cologneo I’ mixed quartier development for €241m with an additional upside of up to €36m (+15%), if rents above current market rent will be achieved
City/Project KPIs Pictures
GDV € 846m Completion 2021 to 2025 Asset type Mixed Area (sqm) 184,790 » Historical residential project in sought after quarter Frankfurt Westend with sales progressing well with c. 77% of condominiums already sold
Delivery Construction Development / Forward sale Acquisition
GDV € 92m Completion 2020 Asset type Residential Area (sqm) 9,108 GDV € 57m Completion 2020 Asset type Residential Area (sqm) 11,054 GDV € 145m Completion Sold Asset type Mixed Area (sqm) 59,591 » Successful ground breaking for 141 apartments with a size ranging from 35 to 161 sqm in Charlottenburg » The project has been forward sold to an institutional investor
2020
Cologne, Cologneo I-III Frankfurt, Grand Ouest Berlin, Ernst-Reuter- Platz Berlin, HAU & X-Berg » Consus sold the plot to a commercial real estate developer with a significant gain to focus on its core competencies in residential property development
Sales Status
Forward Sold for €241m Condo Sales at c. 77% Forward Sold for
- c. €60m
Significant gain realized » Currently the building plan is expected to be amended by with the local authorities to increase the constructible area » The entire Kaiserlei Quartier represents a GDV of around €409m with the largest part of the project being placed with a pension fund at the end of 2017 GDV € 95m Completion 2020 Asset type Commercial Area (sqm) 18,686 Forward Sold for up to €95m GDV € 70m Completion 2021 Asset type Residential Area (sqm) 13,985 Forward Sold for
- c. €70m
» In the city center of Mannheim a new hotel and office building in the up-and- coming Mannheim business district is currently being developed » The project was forward sold at the end of 2018 to a well-known institutional purchaser Mannheim, No.1 Frankfurt, Campus Kaiserlei (BT G,H) GDV € 38m Completion 2019 Asset type Residential Area (sqm) 10,400 Forward Sold for
- c. €38m
» A well-known institutional investor purchased the Carree Löbtau development for €38m with an additional upside of up to 12%, if rents above current market rent will be achieved Dresden, Carree Löbtau
Consus Real Estate AG
Strong operational capabilities and track record Forward sales: continued progress year-to-date 2019
22
IV.
–
» A well-known institutional purchaser acquired the ‘Ostplatz’ project in Leipzig for €64m with an additional upside of up to €16m (+25%), if rents above current market rent will be achieved
City / Project KPIs Pictures Delivery Construction Development / Forward sale Acquisition Sales Status
GDV € 57m Completion 2020 Asset type Mixed Area (sqm) 16,869 Leipzig, Ostplatz Q1’19
Forward Sale Date
» Consus sold the project to a real estate developer with significant EBITDA pre- PPA realised to balance its portfolio across Germany. The purchase price reflects the current status of the development. GDV € 884m Completion Sold Asset type Mixed Area (sqm) 267,941 Upfront sale Leipzig, Project 416 Q1’19 » Centrally located in Berlin-Charlottenburg, this modern office building with around 11,000 m2 of rental office will be certified with the highest sustainability criteria, “LEED Gold”. This project was forward sold to BNP Paribas REIM in February 2019. GDV € 68m Completion 2020 Asset type Commercial Area (sqm) 11,268 Forward Sold with upside of up to 26% Berlin, Franklinstr. Q1’19 » Consus forward sold this development project in fast growing Leipzig to a well- known institutional purchaser. GDV € 41m Completion 2021 Asset type Mixed Area (sqm) 12,311 Forward Sold for
- c. € 40m
Leipzig, Dessauer-/ Hamburger Str. Q1’19 Forward Sold for
- c. €64m
» LOI in negotiation for a residential development with 107 city apartments in the Stuttgart region for approx. € 50m. Böblingen is home to the largest Mercedes factory globally. GDV € 50m Completion 2020 Asset type Mixed Area (sqm) 8,955 LOI in neg. Stuttgart region, City-Carré Böblingen Q2’19 » LOI of a forward sale signed in February 2019 for a €68m residential development in a prime location of Dresden GDV € 68m Completion 2021 Asset type Mixed Area (sqm) 14,782 LOI signed Dresden, Palaisplatz Neubau Q2’19
Consus Real Estate AG
Strong operational capabilities and track record Potential new project acquisitions
23
IV.
–
» Residential quartier development in an old brewery location with close proximity to one of Germany s most important high-speed train terminal » Development of a new city quartier in Bergisch Gladbach. Planning comprises 7 residential complexes, a nursing home and boarding house, assisted living, a Kindergarten, a district center and a parking garage with about 110 parking spaces.
City / Project KPIs Pictures Delivery Construction Development / Forward sale Acquisition
GDV € 147m Completion 2023 Asset type Mixed Area (sqm) 30,915 Cologne area, Bergisch Gladbach Wachendorff Quartier GDV € 82m Completion 2023 Asset type Residential Area (sqm) 17,148 Leipzig area, Erfurt, Braugold Quartier » Large quartier development in suburb of Stuttgart in the form of a "Zero Energy District“, combining flexible forms of living and work. GDV € 275m Completion 2024 Asset type Mixed Area (sqm) 73,360 Stuttgart area, Otto-Quartier Wendlingen
Pipeline of new projects continuously being evaluated to replace projects sold and developed
Consus Real Estate AG
Strong operational capabilities and track record Long term development track record
24
IV.
Consus was able to deliver profitable projects throughout the cycle, and is uniquely positioned to further grow at this positive point in German residential cycle
CARRÉ PARKAUE Berlin, 2011 / 2012 CARRÉ CHARLOTTE Berlin, 2014 / 2016 CARRÉ RAIMAR Berlin, 2015 LKG CARRÉ Leipzig, 2015 / 2016 WEISSERITZ GÄRTEN Dresden, 2016 / 2017
€1,804m
GDV & Residential Units delivered by CG Gruppe
€1,406m
2000–2012 2013–2015 2016 2018
€177m €701m €911m
1,920 units 1,738 units 762 units 967 units
2017
€1,100m
681 units
2019YTD
840 units
FEUERLANDHÖFE Berlin, 2018
Cumulative GDV development (€m)
(1) Cumulative projects sold and under construction / delivered
(1) (1) (1) (1) (1) (1)
Consus Real Estate AG
Solid cash flow generation model and performance visibility Consus developments become cash flow positive prior to construction start
(1) Delivery includes finalization of construction and tenancy
25
V.
Delivery Construction Development / Forward sale Acquisition
30% 60% 10% 20% 5% 54% 1%
- 20%
5% 11% 20%
Land Acquisition Development / Forward Sale Construction Delivery
Project Cash Collection Project Cash Costs Cumulated Project Cash Flow Margin Cash flow positive as construction starts First cash inflow as forward sale is entered into Projects become cash flow positive prior to construction start Balanced payments profile 90% of the cash inflows are received during the construction phase Small remaining payment at delivery Limited working capital consumption Regular payments from buyers to cover construction costs Minimal working capital needs throughout the life of the project High profitability Targeted Adjusted EBITDA margin of 20% at delivery, with upside potential based on outperforming occupancy and rent levels achieved
Illustrative forward sales business model cash flow profile
Project cash flow breakeven
(1)
Consus Real Estate AG
Solid cash flow generation model and performance visibility Strong visibility on future performance
26
V.
Forward Sales Signed
» Letter of intent in negotiation with institutional purchasers » Expected to be converted in signed letter of intent within 3-6 months and in signed forward sale agreements within 6-12 months » Signed letter of intent with institutional purchasers, expected to be converted into forward sale agreements within 3-6 months » Signed binding agreements between Consus and institutional purchasers » Up to c.30% upfront cash payment received upon signing » Future cash inflows under forward sale agreements upon achieving defined milestone » Signed projects sold to retail purchasers rather than institutional purchasers » 30% upfront payment received on signing up forward purchasers for the condominium » Focused on higher value properties where materially higher prices can be achieved from retail sales
Letter of intent signed Letter of intent in negotiation Condo Sales Started
Projects sold to institutional purchasers Units sold to retail
The forward sales and condominium business models allow for strong cash flow visibility, while minimising development risk
~€500m GDV ~€70m GDV ~€1,800m GDV ~€150m GDV II III I IV €2.5bn GDV forward sold or under LOI allows for strong visibility on future performance(1)
(1) As of 31 Mar 2019, incl. LOIs of €68m; LOIs under negotiation of €498m and pre-sold condominiums of €151m
8 projects 1 project 18 projects 6 projects
Consus Real Estate AG
100 200 300 400 500
2019 2020
Solid cash flow generation and performance visibility
Forward sale business model provides high visibility on expected revenue and EBITDA
27
200 400 600 800 1,000 1,200
2019 2020
Revenue visibility through the forward sale model… …providing visibility
- n the future
profits Overview of the revenue and Adjusted EBITDA visibility based on the portfolio of projects forward sold(1)
V.
€450m target 2020 Adjusted EBITDA
Visibility of expected Adjusted EBITDA based on projects forward sold and upfront sales(1) Visibility of expected income based on projects forward sold and upfront sales(1)
Note: based on current management estimates; (1) Includes LOIs, LOIs under negotiation, and pre-sold condominiums; €m €m : expected gap to achieve €450m target 2020 Adjusted EBITDA
13 key projects already forward sold(1) provide the majority of our expected performance visibility. The development portfolio and the identified pipeline include the projects expected to fill the gap to achieve the Targeted 2020 Adjusted EBITDA
Consus Real Estate AG
Solid cash flow generation model and performance visibility Illustrative cash flow profile towards run-rate
28
Revenue Operating costs Adjusted EBITDA Capex ∆ in working capital Interest expense Taxes Free Cash Flow
Revenue visibility Profitability visibility Limited maintenance investment required
V.
Revenue
Run-rate revenue level as total portfolio GDV spread over the average life of the projects
I II III IV V VI VII
Operating costs
~80% of the forward sale price Turnkey agreements with contractors minimize cost overrun risk
Adjusted EBITDA
Target 20% margin in the medium-term
Capex
No Capex required as land acquisition, development, and construction costs run through operating costs and working capital
Working capital
Limited working capital consumption at run-rate as development portfolio replenishment is funded through existing projects sale Release of working capital in ramp-up phase as increasing percentage of projects is forward sold with related pre-payments
Interest expense
Decreasing over time (targeting up to 200bps average interest rate reduction in the medium term) Progressive rebalancing of senior/junior split at SPVs through corporate level refinancing and deleveraging via cash flows
Taxes
Indicative 30% corporate tax rate
Inventory release in ramp-up phase
Decreasing interest expense Strong FCF generation Free Cash Flow
Strong cash generation Used also to deleverage SPVs level debt VIII VI VII V IV III II I
VIII
Strong cash flow generation as the run-rate is achieved
Tit itel
Con
- nsu
sus s Rea eal Esta tate AG
- III. Financials
Consus Real Estate AG
Financing strategy
Evolving towards a cheaper and more flexible capital structure
30
Consus targets over time to reduce the average interest rate by 200bps in the medium term
Corporate level debt
SPV SPV Consus CG Gruppe SPV SPV SSN
» Project level debt as main source of funding, with recourse usually limited to the individual project SPV on which the debt is raised » Project level debt usually split among senior, junior, mezzanine » Junior and mezzanine tranches are expensive, as, while they are subordinated, they are focused only on the specific project whose cash flows are generated in the future as the project is forward sold » Corporate level debt as main source of funding, with recourse to the entire group which includes a large number of project SPVs » Corporate level debt benefits from the combined operations of the group creating a consistent stream of cash flows » Going forward, the financing strategy includes refinancing higher cost stand-alone project level debt at the Corporate level, which will reduce project level leverage and the overall interest expense of the group …to a strategy fitting a large, established, and mature developer From a early stage developer’s financing strategy…
Project level debt
senior, junior, or mezzanine
Currently represents c.25% of total indebtedness Currently represents c.75% of total indebtedness SPV SPV
Corporate level Project level Evolve towards a mature financing strategy by refinancing project level debt with corporate level debt
Consus Real Estate AG
Financing strategy
Proven deleveraging capacity
31
Gross debt evolution in 2018 (€m)
€ €
1,588 1,520 1,283 1,269 1,213(1) 250 755 500 1,000 1,500 2,000 2,500 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Consus SSN Acquisition Facility SSN
Note: Gross debt shown on a book value basis; (1) Includes €22m of 2020 Related Party loans from Aggregate as of 31 Dec 2018
Forward sale model allows for strong deleveraging targeting 3.0x Net Debt / Adjusted EBITDA in the medium term
Consus Real Estate AG 32 Company to provide Dec- 18 Adjusted EBITDA bridge components
103 155 253 52 82 15 50 100 150 200 250 300 Consus Pro Forma EBITDA SSN EBITDA Pro Forma EBITDA PPA adjustments One-off expenses Pro Forma Adjusted EBITDA
(1) Pro Forma for Consus Commercial Properties disposal and transaction adjustments related to the acquisition of SSN. It also includes 1 month of SSN EBITDA due to the date of consolidation being 3 Dec 2018; (2) Refers to 11 months of SSN EBITDA; (3) PPA is defined as the purchase price allocation, which occurred on the acquisition of CG Gruppe and SSN by Consus. The PPA figure adjusts for the effects resulting from the measurement of inventories and contract assets and liabilities in connection with past business combinations
Overview of Pro Forma Adjusted EBITDA bridge for 31 Dec 2018 (€m)
€m
(3) (1)
Pro Forma Adjusted EBITDA bridge
(2)
Consus Real Estate AG
Illustrative example of the PPA adjustment mechanism
33
50 60 120 10 50 10 Development and construction cost until Consus acq. Developer margin until Consus acq. Fair value / Price paid by Consus Development and construction cost post acq. Margin on construction cost post acq. Sale value
» According to IFRS 3, an acquirer must record the net assets of the target on its balance sheet at fair value as at the date of the acquisition » The process is known as purchase price allocation (PPA) » All future additions to inventory post-acquisition are recorded at cost, with no further value adjustment » Therefore, Consus accounts for its inventories (both for CG and SSN) at fair value as at the time of their acquisition » The PPA impact is a one time activity and for all construction post acquisition of CG Gruppe and SSN, there would be no PPA adjustments » At revenue recognition, the increased value of inventory due to the fair value process (PPA) reduces the reported EBITDA » In order to provide the underlying profitability, Consus reverses the PPA adjustment to reflect underlying cost excluding the fair value impact, to provide EBITDA pre-PPA » This would be the EBITDA recorded if the assets had not been included at fair value and the purchase price allocated » This adjustment is done only once a forward sale is entered into, ensuring clear allocation of the PPA adjustment and matching the cash flow profile
Key elements of PPA adjustment EBITDA reportable: 10 EBITDA pre-PPA (adjusted): 20
» Margin for CG Gruppe / SSN: 10 + 10 = 20 » Cash inflow for CG Gruppe / SSN / Consus: 20 » Effective margin for Consus: 20 – 10 = 10
Illustration: Consus accounting for inventories acquired at CG Gruppe / SSN acquisition
Consus Real Estate AG
Consolidated FY 2018 financials PF for SSN – Income statement
- Total PF income of EUR 656m reflects strong
forward sales and construction ramp up in 2018
- Includes Consus sale of its commercial buy-
and-hold properties
- Other operating expenses include significant
consulting fees which are mainly due to portfolio transactions incl. SSN acquisition, transition to IFRS and first time consolidations
- Includes derivative income from Consus
convertible bond driven by share price development
- Financial expenses relating to both group and
project level financing
- PPA Adjustments reverse all effects resulting
from revaluation of inventories and contractual assets & liabilities from any business combinations
- One-offs which are not capitalized and which
have an extraordinary character either in their nature or in their amount, and covers all Group entities.
2. 3. 4.
Income Statement Comments
in k € FY 2018 Consus Reported FY 2018 Consus PF SSN Income from letting activities 32,796 29,659 Income from real estate inventory disposed of 163,515 163,515 Income from property development 408,461 443,830 Income from service, maintenance and management activities 10,199 18,565 Total income 614,971 655,569 Change in project related inventory (147,352) (31,464) Overall performance 467,619 624,104 Expenses from letting activities (16,083) (14,741) Cost of materials (285,600) (367,182) Valuation result 25,631 25,631 Net result from the disposal of investment properties
- 529
Other operating income 13,241 14,113 Personnel expenses (36,911) (50,995) Other operating expenses (59,997) (75,989) EBITDA 107,901 155,470 Depreciation and amortization (2,175) (3,026) EBIT 105,726 152,444 Financial income 4,620 11,467 Financial expenses (121,834) (209,783) EBT (11,488) (45,872) Income tax expenses 11,192 21,617 Net income (Earnings after taxes) from continued operations (296) (24,255) Net income (Earnings after taxes) from discontinued operations 1,464
- Consolidated Net income
1,168 (24,255)
2. 4. 1. 5. 5. 6.
in k € FY 2018 Consus Reported FY 2018 Consus PF SSN EBITDA 107,901 155,470 PPA Adjustments 82,262 82,262 One-off expenses 13,493 15,458 Adjusted EBITDA(1) 203,656 253,190
Adjusted EBITDA Bridge
7. 6. 7.
(1) EBITDA adjusted for Purchase Price Allocation (“pre-PPA”) and one-off expenses
1. 3.
34
Consus Real Estate AG
Consolidated FY 2018 financials PF for SSN – Balance sheet: Assets
- Investment properties include yielding
properties within large developments
- Contract assets are for projects forward sold,
and reflects revenue recognised minus prepayments – i.e. net contract assets
- Work-in-progress is projects not yet forward
sold
- Market GAV of EUR2.95bn is the appraised
market value of the assets on 100% basis included in investment property, contract assets and work-in-progress
Comments Current & Non-current Assets
in k € FY 2018 Consus Reported Investment property 328,027 Property, plant and equipment 8,771 Goodwill 1,032,480 Other intangible assets 6,158 Investments accounted for using the equity method 21,590 Receivables from related parties
- Financial assets
10,037 Other assets
- Contract assets
235,011 Deferred tax assets
- Total non-current assets
1,642,073 Work-in-progress incl. acquired land and buildings 1,830,487 Trade and other receivables 53,933 Receivables from related parties 62,853 Tax receivables 8,644 Financial assets 38,439 Other assets 15,499 Contract assets 190 Cash and cash equivalents 91,603 Assets held for sale 1,329 Total current assets 2,102,977 Total assets 3,745,050
1. 2. 3. 2. 3. 2. 2. 1.
35
4. 4. 4. 4. 4.
Consus Real Estate AG
Consolidated FY 2018 Financials PF for SSN – Balance sheet: Equity and Liabilities
- Gross Debt and Net Debt are EUR 2,196m
and EUR 2,104m respectively, with gross debt of EUR 948m at CG and EUR 755m at SSN
- Total equity of EUR 1,163m
- Liabilities to related parties include
EUR 22m of 2020 Related Party loans from Aggregate
- Contract liabilities of EUR 45.9m reflect
prepayments received before revenue is recognised
Comments Equity and liabilities
in k € FY 2018 Consus Reported Subscribed capital 134,040 Capital reserves 904,233 Other reserves (27,363) Non-controlling interest 151,629 Total equity 1,162,539 Financing liabilities 1,049,150 Provisions 1,712 Other liabilities 15,017 Contract liabilities
- Deferred tax liabilities
114,380 Total non-current liabilities 1,180,259 Financing liabilities 1,146,374 Provisions 4,735 Trade payables 41,913 Liabilities to related parties 43,196 Tax payables 44,389 Other liabilities 75,771 Contract liabilities 45,872 Total current liabilities 1,402,251 Total liabilities 2,582,510 Total equity & liabilities 3,745,050
1. 1. 2. 1. 2. 3. 4. 3. 4.
36
Consus Real Estate AG
Consolidated FY 2018 Cash Flow statement – strong operating cash flow
- Limited depreciation and amortisation
- Gains on investment property include realized
- n existing and disposal of properties
- Portion of interest is accrued
- Significant positive working capital movement
- Key driver of positive working capital is
increase in funds received from prepayments in forward sales
- Strong operating cashflow
- Positive impact from investing activities
reflects nets proceeds from acquisitions and sales
2. 3. 5.
Cash flow Comments
in k € FY 2018 Consus Reported Profit (loss) before tax (11,488) Depreciation and amortisation 2,175 Depreciation and impairment of property, plant and equipment 1,698 Amortisation and impairment of intangible assets 477 Valuation gains (28,524) Valuation gains on financial assets (2,893) Valuation gains on investment property (25,631) Financial expenses (income) 117,214 Financial income (4,620) Financial expenses 121,834 IFRS 15 transition adjustments (8,424) Other non cash adjustments 2,230 Other working capital adjustments 66,354 Decrease / (increase) in rent and other receivables 21,909 Decrease / (increase) prepayments, accrued income and other assets (18,581) Decrease/ (increase) in inventories and contractual assets (333,149) (Decrease) / increase in prepayments 356,326 (Decrease) / increase in trade, other payables and accruals, contractual liabilities and other liabilities 39,849 Income tax paid (7,525) Net cash flow from operating activities 132,012 Net cash flow from investing activities 25,195 Net cash flow pre-financing activities 157,207
2. 6. 1. 7. 7. 1. 4. 3. 4. 6. 5.
37
Consus Real Estate AG
Guidance Overview
Overview of Key Financials Comments Target Medium-term Net Debt / Adjusted EBITDA
~ 3x
Target 2020 Adjusted EBITDA
€450m
Gross Development Volume (GDV)(1)
€9.6bn in total
Target Medium-term Adjusted EBITDA margin
20%
(1) On a consolidated basis as of 31 Dec 2018; Includes three development projects of which the acquisition is signed but not yet closed
38
Deleveraging planned following acquisitions Targeting up to 200bps average interest rate reduction in the medium term 2020 Adjusted EBITDA target increased from €300m to €450m post SSN acquisition Total amount of projects is 64 with a development timeline until 2026 GDV going forward influenced by timings of acquisitions and disposals SSN projects are in-line with Consus target margins Expected tax rate ~30%
Titel
Consus Real Estate AG
- IV. Appendix
Consus Real Estate AG
33
- 5
13 Cash Inventory Contract assets Cumulative
- Adj. EBITDA
45
- 20
Cash Inventory Contract assets Cumulative
- Adj. EBITDA
(3)
Illustrative example of forward sale and contract assets accounting during the life of a project
40
Description Cumulative key accounting items (€m) Accounting entries (€m)
» Consus has €25m of cash and is looking to start a new project with a GDV of €100m » @ 20% target Adj. EBITDA margin the total project costs will be €80m
- »
Consus uses €25m to buy new land and sustain planning costs » Consus signs a forward sale agreement » Consus receives 30% of advance payment (€30m) » Until delivery, Consus incurs all the remaining €28m of construction costs » Consus receives all the outstanding payments (€40m) post delivery and letting
Note: Assumes cash purchase and no tax impact for illustrative purposes (1) The percentage of completion is computed based on the amount of cost incurred up to a certain step (e.g. in step 2 the PoC is computed as 25/80m); (2) Revenues are recorded on a Percentage of Completion basis (e.g. in step 2, the projects’ PoC is 31% so the revenues are 31% * €100m; (3) Contract assets are always shown net of advance payments on Consus’ balance sheet according to IFRS15
Cash (25) Inventory +25 Cash +30 Inventory (25) Gross Contract assets +31 Advance payments +30 Revenues(2) +31 Costs (25) » Consus incurs additional €27m of construction costs » Consus receives an additional 30% of pre-payments (€30m) Cash +3 Gross Contract assets +34 Advance payments +30 Revenues(2) +34 Costs (27) Cash +12 Gross Contract assets +35 Advance payments +40 Revenues(2) +35 Costs (28)
Percentage of Completion(1)
25
- Cash
Inventory Contract assets Cumulative
- Adj. EBITDA
(3)
- Adj. EBITDA
€6m
- Adj. EBITDA
€7m
- Adj. EBITDA
€7m
Event
Project is delivered Construction continues Forward sale agreement is signed New land is bought Starting point
1 2 3 4
0% 100% 65%
- 25
- Cash
Inventory Contract assets Cumulative
- Adj. EBITDA
(3)
30
- 1
6 Cash Inventory Contract assets Cumulative
- Adj. EBITDA
(3) (3)
0% 31%
Net change €1m Net change €4m Net change €(5)m All cash Adj. EBITDA
Consus Real Estate AG
» Aggregate Group ~57% » Christoph Gröner 6% (CEO CG Gruppe) » Free Float ~37%
Stock Info & Performance
41
Events
14-15-May-2019 UBS Pan-European Small & Mid Cap Conference Jun-2019 DB Access Conference 23-Sep-2019 Baader Investment Conference
Financial Calendar
19-Jun-2019 Publication of Consus Q1 Interim Statement 26-Jun-2019 Consus Annual Shareholders Meeting 19-Sep-2019 Publication of Consus Half Year Results
Consus Share
ISIN WKN DE000A2DA414 A2DA41 Number of Shares 134,526,580 Market Segment Deutsche Börse Scale m:access Stock Exchanges Xetra, München, Frankfurt Indices E&G-DIMAX Market cap.(2) € 982m Analysts Hauck & A.: €11.7 BUY Baader Bank: €12.5 BUY SRC: €13.0 BUY Deutsche Bank: €12.0 HOLD UBS: €9.0 HOLD
€
- Vol. k
Stock Chart(1) Shareholder structure incl. recent contribution in kind and other key information
(1) Source: Bloomberg, Factset (2) As of 26 April 2019
50 100 150 200 250 300 350 400 5.00 6.00 7.00 8.00 9.00 10.00 Oct 2018 Nov 2018 Dec 2018 Jan 2019 Feb 2019 Mar 2019 Apr 2019 Volume Price (€)
Consus Real Estate AG
Glossary
42
Acronym Definition Adjusted EBITDA EBITDA adjusted for Purchase Price Allocation (PPA) and one-off costs BIM Building Information Modelling software for integrated, model-based operations in construction that extends the classic range of tasks to visual, model-based procedures CG CG Gruppe GAV Gross Asset Value, representing the market value of gross assets of the development portfolio as of 31 December, 2018 estimated by an independent third party GDV Gross Development Value, representing the expected future revenue to be generated by a specific project LOI Letter of Intent PPA adjustments Purchase Price Allocation adjustments SPV Special Purpose Vehicle, referring to the entities owning the development projects and controlled by Consus SSN SSN Group
Glossary