FY 2018 results presentation March 2019 1 Agenda Introduction and - - PowerPoint PPT Presentation
ADLER Real Estate AG: FY 2018 results presentation March 2019 1 Agenda Introduction and executive summary 1 2 FY 2018 Operational performance FY 2018 Financial performance 3 4 ADLER Real Estate in the Capital Markets Guidance 5
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March 2019
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FY 2018 Financial performance
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FY 2018 Operational performance
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ADLER Real Estate in the Capital Markets
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Introduction and executive summary Guidance
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Appendix
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■ Like-for-like rental growth of 3.4%, average in-place rent increased to €5.49 per sqm/month as of Dec 2018 (2017: €5.21 per sqm/month), outperforming the 2018 guidance ■ Vacancy rate further reduced by 1.9ppts from 7.9% in 2017 to 6.0% in 2018 as guided ■ FFO I almost doubled again from €40.5m in 2017 to €74.2m in 2018, in line with the 2018 guidance ■ Fully diluted FFO I per share in 2018 at €0.94 (2017: €0.51) Rental
Financing and LTV ■ Successful placement of €800 million bonds in April 2018 to refinance bridge loan facility and buyback of €200m 2015/2020 4.75% bonds ■ WACD decreased by 0.49ppts from 2.72% at end of 2017 to 2.23% in 2018, outperforming the 2018 guidance ■ Temporary increase in LTV due to the acquisition of BCP in April 2018. As of Dec 2018, LTV stood at 61.4% (2017: 59.4%) with pro-forma as of 28 March 2019 of 58.3%. Long term target of 50-55% and guidance for FY 2019 of c.55% Valuation and EPRA NAV ■ 2018 fair value of investment properties (incl. inventories) reached €5,077.1m (2017: €3,021.5m) following acquisition
■ Fully diluted EPRA NAV (excluding goodwill) per share of €20.77, up 35.1% on FY 2017 (€15.37) Acquisitions / Disposals and
■ Strong growth through acquisition of BCP in April 2018 ■ Non-core residential portfolio sold in December 2018 – c.3,700 units with GAV of €179.2m sold at c.3% premium ■ Sale of €180.6m (c.37%) of the retail portfolio on 25 March 2019 at c.7.6% premium to the book equity value. Remaining of the retail portfolio is expected to be sold by the end of 2019.
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Note: 1 In percentage of gross asset value (“GAV”; investment properties and inventories)
2 In percentage of total number of units of residential portfolio 3 Riverside / Wasserstadt-Mitte, Berlin development project is currently valued at €332.7m and is due to be completed by the end of 2019. Further information on page 12
Company description Total portfolio sector split1
■ ADLER Real Estate AG is one of Germany’s leading residential property companies. ADLER owns c.58k residential units primarily located in - or on the outskirts of - large and growing conurbations in Northern, Eastern and Western Germany. ■ Focus on affordable housing in specific regions in Germany, with a portfolio with considerable upside potential in terms of rent uplifts, vacancy reduction and revaluation gains. Benefitting from favourable market dynamics in German B-cities ensuring recurring and predictable cash flows. ■ The main business objective is the letting of residential property. Recently, ADLER has also selectively engaged in residential developments (limiting exposure in developments to an amount which complies with IG credit rating) in order to complement and diversify the existing portfolio. ■ Focus on value creation through organic growth and M&A strategies. In recent years, the company has grown rapidly by making acquisitions, the latest one being Brack Capital Properties N.V. in April 2018 ■ SDAX-listed since 2015 (also included in FTSE EPRA/NAREIT Global Real Estate Index, GPR General Index, DIMAX, CDAX)
Total residential portfolio geographical split2 Residential portfolio KPIs
Number of units 58,113 Rentable area (sqm) 3,547,275 Fair value (€/sqm) 1,095 Average rent (€/sqm/month) 5.49 Rental yield (%) 5.6% Vacancy (%) 6.0% LfL rental growth (%) 3.4%
Completed by the end
Residential portfolio 76,5% Retail Parks 9,8% Residential Development 7,1% Berlin Riverside³ 6,6%
Total GAV €5.1bn
€181m sold 25 Mar 19, remaining exposure 6.5% of GAV
30.3% 24.7% 3.2% 17.1% 6.5% 2.7% 5.9%
North Rhine-Westphalia 15,325 Lower Saxony 18,767 Berlin 1,699 Brandenburg 3,625 Saxony-Anhalt 4,053 Saxony 10,609 Thuringia 1,966
Other units 1,044 1.7 % 2.4%
Bremen 1,515
3.1%
Schleswig-Holstein 1,899
2.4%
Mecklenburg-Pomerania 1,508
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7 Total number of residential units* Investment properties Residential portfolio vacancy rate Residential portfolio LfL rental growth Residential portfolio FV per sqm Residential average rent (€/sqm/month)
Residential 5,02 4,93 5,04 5,21 5,49 4,60 4,70 4,80 4,90 5,00 5,10 5,20 5,30 5,40 5,50 5,60 2014 2015 2016 2017 2018 €/sqm/month 0,3% 1,2% 1,5% 3,8% 3,4% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% 3,5% 4,0% 2014 2015 2016 2017 2018 12,8% 11,2% 8,6% 7,9% 6,0% 0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% 2014 2015 2016 2017 2018 24.086 48.218 47.662 46.179 58.113 10.000 20.000 30.000 40.000 50.000 60.000 70.000 2014 2015 2016 2017 2018 Retail 4.579 1.171 2.235 2.442 3.022 5.077 1.000 2.000 3.000 4.000 5.000 6.000 2014 2015 2016 2017 2018 €m 732 735 817 928 1.095 200 400 600 800 1.000 1.200 2014 2015 2016 2017 2018 €/sqm
Note: * Residential units only; excludes commercial units in the multi-family houses
8 Berlin – Beusselstr./Sickingenstr.
Towers Erfurt
was finished
Osterholz-Scharmbeck
areas
Jena – Am Herrenberge Duisburg
Wilhelmshaven
10,7% 2,0%
2017 2019
6,39€ 8,06€
2017 2019
0,00€ 6,65€
2016 2018
10,0% 1,0%
2016 2018
10,1% 4,1%
2017 2018
5,25€ 5,40€
2017 2018
4,5% 3,9%
2015 2018
9,54€ 10,48€
2015 2018
7.3% 2.6%
2015 2018
4.71€ 5.50€
2015 2018
8,8% 7,3%
2015 2018
4.65€ 5.06€
2015 2018
▪ Some of the properties require specific measures for successful vacancy reduction and rent increase
Vacancy rate (%) In place-rent (€/sqm/month)
9 Overview of top cities (Residential portfolio) ▪ Top 20 locations account for c. 63% of total portfolio in terms of units ▪ BCP assets have enhanced overall portfolio diversification with c. 12k residential units in high growth markets such as Leipzig, Dortmund and Hannover
Overview
■ Wilhelmshaven is ADLER´s TOP location concerning number of
development in the last four years has been stable given the ever-increasing use of the Jade- Weser Port, Germany’s only deep-sea harbor, and the increasing importance of the naval base Wilhelmshaven. Further increases in the population can be expected in the future. ■ In locations with vacancy rates above 10%, ADLER has targeted tenant improvement capex measures.
Source: ADLER Research * Information in 2018 includes BCP
Location Units Lettable area sqm NRI €m NRI
€/sqm/month
2018 NRI
€/sqm/month
2017 YoY NRI Δ
€/sqm/month
Vacancy rate 2018 Vacancy rate 2017 YoY vacancy Δ Fair Value €m Fair Value €/sqm Rental yield (in-place rent) Wilhelmshaven 6,897 406,835 22.8 5.05 4.98 1.5% 7.4% 7.7%
368.5 906 6.2% Duisburg* 4,925 305,003 19.6 5.50 5.32 3.4% 2.8% 2.7% 0.1% 324.0 1,062 6.0% Leipzig* 4,742 254,174 16.4 5.71 4.55 25.6% 5.2% 4.6% 0.6% 362.1 1,425 4.5% Cottbus 1,868 110,045 5.7 4.72 4.62 2.3% 8.9% 14.4%
81.1 737 7.0% Halle (Saale)* 1,858 105,895 5.4 4.81 4.59 4.8% 10.9% 13.6%
85.0 802 6.4% Dortmund* 1,770 102,251 6.8 5.71 4.89 17.0% 2.0% 2.6%
110.3 1,078 6.2% Berlin 1,699 111,736 7.6 5.86 5.77 1.4% 3.1% 2.1% 1.1% 229.8 2,057 3.3% Göttingen* 1,377 85,238 5.8 5.94 5.46 8.7% 4.3% 3.2% 1.2% 120.2 1,410 4.8% Wolfsburg 1,301 87,614 6.1 6.13 5.99 2.4% 6.0% 5.0% 1.1% 127.8 1,458 4.7% Helmstedt 1,219 70,703 4.3 5.20 5.12 1.5% 2.9% 4.3%
61.0 863 7.0% Hannover* 1,120 63,454 5.1 6.99 5.81 20.2% 3.4% 5.8%
113.1 1,782 4.5% Essen* 1,040 66,033 4.4 5.70 4.88 16.8% 2.5% 4.6%
83.5 1,265 5.2% Kiel* 967 66,588 5.2 6.58 6.30 4.5% 0.5% 4.7%
94.6 1,421 5.5% Borna 900 50,189 2.4 4.64 4.59 1.1% 13.7% 14.6%
36.6 730 6.6% Bremen* 873 53,645 3.9 6.20 4.85 27.7% 2.4% 2.9%
68.5 1,277 5.7% Chemnitz 851 53,080 2.4 4.79 4.71 1.7% 14.2% 22.5%
42.3 797 5.8% Schöningen 846 50,192 2.5 5.08 5.06 0.4% 16.6% 19.5%
38.0 757 6.7% Oberhausen 819 62,642 3.6 5.04 5.19
3.8% 1.2% 2.6% 51.9 828 7.0% Schwerin* 816 48,021 2.7 4.81 4.68 2.7% 4.0% 9.3%
42.2 879 6.3% Norden* 795 50,217 3.1 5.31 5.06 4.9% 1.9% 4.7%
50.5 1,006 6.2% Top 20 total 36,683 2,203,555 136.0 5.46 5.10 7.1% 5.6% 7.3%
2,490.9 1,130 5.5% Other locations 21,430 1,343,721 82.9 5.53 5.36 3.2% 7.0% 8.9%
1,393.5 1,037 6.0% Total 58,113 3,547,275 218.9 5.49 5.21 5.4% 6.0% 7.9%
3,884.4 1,095 5.6%
10 Residential portfolio capex & maintenance (€m) Residential portfolio capex & maintenance (€/sqm)
■ In 2019, in addition to ongoing capex / maintenance ADLER will be spending an incremental €40-50m capex for tenant improvement / vacancy reduction
Tenant improvement program in 2019 ADLER’s modernisation program – key measures
Modernisation project Investment volume IRR (levered) Completion Göttingen €150m 13% 3 years Wolfsburg €130m 13% 3 years
11,0 16,8 32,9 46,4 21,1 27,5 22,5 22,3 32,1 44,4 55,4 68,7 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 2015 2016 2017 2018 €m Capex Maintenance 4,35 5,62 10,46 12,11 8,40 9,18 7,15 5,81 12,7 14,8 17,6 17,9 0,00 5,00 10,00 15,00 20,00 2015 2016 2017 2018 €/sqm Capex Maintenance
new windows
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■ ADLER will complement future growth through acquisitions with selective developments in A locations at attractive yields ■ Development pipeline of €1.7bn to be completed over the next 6-7 years ■ For developments built to keep ADLER targets 4-5.5% net initial yield
Development pipeline Developments split by GAV
Düsseldorf
Grafenberg (Zauberberg)
GDV: €132m # units: 84 Completion: Q3-2022 Type: Luxury
Gerresheim (Glasmacherviertel)
GDV: €704m # units: 1,600+ Completion: 2027 Type: Mid Range condo
Grafental I
GDV: c. €408 Of Which sold: € 396 # units: 900+ Completion: Q4-2019 Type: Mid Range Apt.
Grafental II
GDV: c.€420m # units: 700+ Completion: Q1-2025 Type: Mid Range Apt.
Aachen (Tuchmacherviertel)
GDV: €116m # units: 217 Completion: 2021 Type: Mid Range Apt.
Berlin, Riverside Berlin, Schönefeld
Project cost: €107m # units: 520 Completion: Q3 -2020 Type: Mid Range Apt. GDV: €452m # units: 755 Completion: Q3-2019 Type: Mid Range Apt.
Dresden, Trachau
Project cost: €99m # units: 340 Completion: NA Type: Mid Range Apt.
Note: 1 Riverside / Wasserstadt-Mitte, Berlin development project is currently valued at €332.7m and is due to be completed by the end of 2019. Further information on page 12 Berlin, Riverside¹ 48% Other developments 49% Land bank 3%
Total GAV €0.7bn
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▪ Secured contract with general contractor ▪ Strategically located in the government district close to Berlin’s main station ▪ Currently in ADLER’s balance sheet at €332.7m with 4.9% NIY ▪ GDV at completion is €451.8m ▪ Overall 755 residential units (498 apartments and 255 micro- apartments) ▪ Expected completion by the end of 2019 ▪ Full rental income from September 2020 onwards
Project information ▪ Total rentable space of c. 50,240 sqm and landbank with a planning permission for c. 10,600 sqm GFA ▪ Financing secured and in line with target to reduce LTV < 55% ▪ Strengthening of position in attractive Berlin market
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14 € m FY 2018 FY 2017 FY 2018 vs FY 2017 (%) Net rental income
238.4 170.3 40.0%
Earnings from property lettings (NOI)
203.7 125.8 61.9%
165.4 128.4 28.8%
FFO I
74.2 40.5 83.2%
▪ ADLER Real Estate has significantly improved its operational performance Solid operational performance € m FY 2018 FY 2017 FY 2018 vs FY 2017 (%) Investment properties (incl. inventories)
5,077.1 3,021.5 68.0%
EPRA NAV
1,632.7 1,207.2 35.2%
Adjusted diluted EPRA NAV (excl. goodwill)
1,639.0 1,230.5 33.2%
Equity ratio (%)
27.0% 27.5%
LTV (excl. convertibles) (%) - Net debt over GAV
61.4% 59.4% 2.00 ppts
WACD (%)
2.23% 2.72%
15 Net rental income (€m) FFO I (€m) Diluted EPRA NAV per share (excl. goodwill) Diluted FFO I per share (€) EPRA NAV (excl. goodwill) Adjusted EBITDA (€m)
56,1 131,6 160,9 170,3 238,4 0,0 50,0 100,0 150,0 200,0 250,0 300,0 2014 2015 2016 2017 2018 €m 27,2 95,6 124,3 128,4 165,4 0,0 20,0 40,0 60,0 80,0 100,0 120,0 140,0 160,0 180,0 2014 2015 2016 2017 2018 €m
16,1 27,3 40,5 74,2
0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 2014 2015 2016 2017 2018 €m
0,25 0,39 0,51 0,94
0,00 0,20 0,40 0,60 0,80 1,00 2014 2015 2016 2017 2018 € 358,1 783,9 971,9 1.230,5 1.639,0 0,0 200,0 400,0 600,0 800,0 1.000,0 1.200,0 1.400,0 1.600,0 1.800,0 2014 2015 2016 2017 2018 €m 9,10 12,24 13,79 15,37 20,77 0,00 5,00 10,00 15,00 20,00 25,00 2014 2015 2016 2017 2018 €
16 Debt maturity schedule Debt KPIs LTV WACD ICR Sources of funding
4,15% 3,99% 3,69% 2,72% 2,23% 0,00% 0,50% 1,00% 1,50% 2,00% 2,50% 3,00% 3,50% 4,00% 4,50% 2014 2015 2016 2017 2018 1,30 1,43 1,59 1,71 2,33 0,00 0,50 1,00 1,50 2,00 2,50 2014 2015 2016 2017 2018 Secured bank loans 43,3% Corporate bonds 53,5% Convertibles 3,2%
Total interest-bearing debt (€m) 3,739 Net LTV 61.4% ICR 2.33x Fixed / hedged debt 88.8% Unsecured debt 56.7% Weighted average cost of debt 2.23% Weighted average maturity 3.9 years Corporate credit rating (S&P) BB
74,9% 73,7% 59,9% 59,4% 61,4% 58,3% 40,0% 45,0% 50,0% 55,0% 60,0% 65,0% 70,0% 75,0% 80,0% 2014 2015 2016 2017 2018 Pro forma* LT target 50-55% 223,3 434,5 1.241,4 222,2 751,5 375,6 108,7 401,9 0,0 200,0 400,0 600,0 800,0 1.000,0 1.200,0 1.400,0 2019 2020 2021 2022 2023 2024 2025 >2025 Secured debt Corporate bonds Convertibles
* Refer to page 17 for explanation of pro-forma LTV
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2017A 2018A Sale of Cluster A (c.37% of retail) 2018 pro-forma after achieved measures Treasury shares at cost base Sale of the rest
2018 pro-forma LTV excluding convertible bonds 59.4% 61.4%
60.6%
58.3%
Sale of Cluster A Sale of other retail ■ Sale of €180.6m of commercial real estate signed on 25 March 2019 ■ Sale of the remaining retail portfolio expected by the end of 2019, which would complete portfolio streamlining and further strengthen and simplify ADLER’s balance sheet
18 Current maturity profile
BV Dec 2018 €m Volume €m Maturity Nominal interest rate Other comments Premature redemption Rate, at which premature redemption is possible
Bonds
2015/20 299 300 08 Apr 20 4.75% Anytime ▪100.0 from 8/4/2019 2017/21 492 500 06 Dec 21 1.50% Anytime ▪Under condition of make whole 2017/24 301 300 06 Feb 24 2.10% Anytime ▪Under condition of make whole 2018/23 495 500 27 Apr 23 1.90% Anytime ▪Under condition of make whole 2018/26 298 300 27 Apr 26 3.00% Anytime ▪Under condition of make whole
Total 1,885 1,900 4.1 years 2.33% Convertibles
2016/21 119 138 19 Jul 21 2.50% Strike price of €12.55, no.
from conversion 9.4m Conversion from 19 July 2019 ▪At face value, if trading at more than 130% of strike price for at least 20 out of 30 trading days
Total 119 138* 2.6 years 2.50% BCP bonds
Debenture A 30 27 Jul 20 4.80% Permitted ▪Under condition of make whole Debenture B 48 44 Dec 24 3.29% Permitted ▪Under condition of make whole Debenture C 38 35 Jul 26 3.30% Permitted ▪Under condition of make whole
Total 116 106 5.5 years 3.67% Bank debt 1,619 1,623 3.6 years 2.00%
Total interest bearing debt 3,739 3,767 3.9 years 2.23% * Conversions are not reflected
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Key metric In € EPRA NAV/share (excl. goodwill), basic / diluted 23.93 / 20.77
Upside Potential vs. EPRA NAV/share (basic / diluted)
Broker consensus for EPRA NAV/share (FY 2019, median) 20.63
Upside potential vs. broker consensus
Share price (close as at 26 March 2019) 13.34
▪ ADLER is trading at significant discount to EPRA NAV with the broker community consensus upside of c.35% vs. current trading levels
Key broker recommendations Key trading considerations ADLER Real Estate shareholders’ structure
Share information Total voting rights 71,063,622 Treasury shares 2,583,232 Listed/Stock exchange Prime Standard/Frankfurt am Main Indices: SDAX, CDAX, FTSE EPRA/NAREIT Global Real Estate Index, GPR General Index, DIMAX 3M / 6M ADTV 109k shares (€1.43m) / 92k shares (€1.25m)
Key share information (31 December 2018)
Mezzanine IX 14.4% Wecken 14.7% Fairwater 13.5% Thomas Bergander 6.7% Tresury Shares 3.6% Free Float 47.1% Anchor shareholders 42.6%
Company Recommendation Target (€) Date Berenberg buy 17.40 Nov-18 Deutsche Bank buy 20.00 Aug-18 DZ Bank buy 17.00 Mar-19 Equinet (ESN) buy 20.00 Mar-19 HSBC buy 21.00 Jan-19 Kempen & Co. neutral 14.00 Mar-19 National Bank buy 18.00 Nov-18 ODDO neutral 15.91 Feb-19 Consensus (median) 17.70
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22 ADLER Real Estate historical review and guidance
Key metrics 2017 2018 Target FY 19 as at Mar 19
Net rental income (€m) 170.3 238.4 235-240 Historical guidance n/a c.230 Achieved n/a
✓
Vacancy rate 7.9% 6.0% 5.0% Historical guidance 7.0% 6.0% Achieved
✓
Ø rent (€/sqm/month) 5.21 5.49 5.60-5.65 Historical guidance 5.08 5.45 Achieved
✓ ✓
FFO I (€ m) 40.5 74.2 80-85 Historical guidance 40 73-75 Achieved
✓ ✓
LTV (excl. convertibles) 59.4% 61.4% c.55% Historical guidance 55% c.55% Achieved
WACD 2.72% 2.23% 2.0-2.1% Historical guidance 3.45% 2.24% Achieved
✓ ✓
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Note: 1 Total offer enterprise value
Corporate M&A 2014
■ First public takeover by ADLER Real Estate, offer initially accepted by 92.7% of shareholders ■ The acquisition also brought its ESTAVIS’ subsidiary ACCENTRO, focused on the privatisation of residential housing
2015
■ Second takeover by ADLER Real Estate, adding c. 21,000 units to the Group ■ WESTGRUND had a business model very similar to ADLER Real Estate, but with key focus in medium and large towns in North and East Germany
2016
■ Initial stake bought in August 2015 ■ In January 2017 ADLER Real Estate received € 422 m in connection with the successful tender of its 26% share in conwert Immobilien Invest to Vonovia ■ Economic profit amounting to c. € 48 m ■ Additional c. € 10 m in FFO I and LTV ratio and WACD improvements
2017
■ Successful disposal of the residential housing privatisation business ACCENTRO at a considerable premium to book ■ ACCENTRO will have delivered a contribution to equity of more than €70m over a 3 year period
Track record and key milestones 2018
■ Acquisition of 41% stake from main shareholder and tender offer for up to 70% in Brack Capital Properties NV. successfully achieved ■
Portfolio
Portfolio
units ESTAVIS AG
Portfolio
2014
Portfolio 1,906 units Westgrund AG Takeover offer
Ajax portfolio
Acquisition of 24.79% of ATX listed conwert Immobilien Invest SE 29,896 units ADLER Real Estate announces a package
sustainably boost earnings strength Portfolio
2015
Portfolio
Additional 5m shares in conwert aquired Stake in conwert sold to Vonovia SE Portfolio 160 units Portfolio
units Sale of 82% stake in ACCENTRO
Portfolio
units Successful disposal of legacy Commercial assets
2017 2016 2018
Corporate Bond 14/19 € 50 m Capital increase in kind € 80 m Tap 14/19 Corporate Bond € 50 m Capital Increase € 21 m Corporate Bond 15/20 € 300 m Mandatory Convertible Bond (IFRS Equity) € 175 m Tap Corporate Bond 15/20 € 50 m Change in the Group’s Management Board Convertible Bond 16/21 € 137 m Redemption Schuldscheindarlehen € 62 m Redemption Schuldscheindarlehen € 30 m Redemption Margin Loan € 200 m Tap 14/19 Corporate Bond € 30 m Tap Corporate Bond 15/20 € 150 m Buyback ACCENTRO convertible € 12 m Redemption Bond 14/19 € 130 m Corporate Bond 17/21-24 € 800 m Brack Capital Properties takoever offer annoucement € 1.5 bn1 Capital increase in kind € 190 m Completion of STO for Brack Capital Properties takeover
€ 1.5 bn1
2019
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M
Successful disposal of Berlin assets 1,174 units ADLER Real Estate AG and Benson Elliot Capital Management enter into a JV to opportunistically dispose of c. 2,300 (€118m) Residential Units Corporate Bond 18 / 23 - 26 € 800 m Disposal of residential units of non-core residential portfolio
(€61.5m) Successful disposal of 3 of the BCP retail assets 3 retail assets (€180.6m)
25 Tomas DE VARGAS MACHUCA
Chairman of the Management Board (Co-CEO), Chairman of the Executive Committee ■ Has assumed the role as Co-CEO as at 22nd December 2017 together with Maximilian Rienecker ■ Responsible for the Company’s Capital Markets
■ Before joining ADLER, Tomas de Vargas Machuca spent 15 years in the real estate business of which 10 years in banking ■ He was an Executive Director at UBS Investment Bank’s Real Estate Finance ■ He holds a B.A. in Economics and a M.A. in Management of International Firms from Bocconi University in Milan, Italy.
Sven-Christian FRANK
COO, Management Board, Executive Committee ■ COO since 9th June 2016 ■ Responsible for operational management (asset, property and facility mgmt) and transaction ■ Formerly held various leading positions in real estate business, notably at Gestrim Deutschland AG and Deutsche Real Estate AG ■ Born 1965, attorney at law, mediator (DAA), real estate asset manager (IREBS)
Maximilian RIENECKER
Chairman of the Management Board (Co-CEO), Executive Committee ■ Has assumed the role as Co-CEO as at 22nd December 2017 together with Tomas de Vargas Machuca ■ With ADLER since February 2017, when he was appointed Head of Corporate Finance and Strategy. ■ Maximilian Rienecker calls on more than 5 years of experience in the real estate industry after roles in Sales and Marketing at ING Investment Management in Hong Kong and Corporate Strategy and M&A at SBM Offshore in Monaco.
26 Lean Governance structure ADLER REAL ESTATE AG Supervisory Board
Accounting, Controlling & Treasury Portfolio Management Bank Financing Investor Relations Legal Corporate Governance Compliance & Human Resources
Member of the EC
(Co-CEO, Digitalization, Corporate Finance)
Management Board
(COO, Project Development)
(Co-CEO, Chairman of the EC)
Project Development
Member of the EC
Member of the EC
Member of the EC
Member of the EC
Member of the EC
Member of the EC
27 ■ All items impacted by the acquisition of BCP ■ Earnings from the sale of properties almost entirely relate to BCP (€7.7m) ■ Personnel expenses and expenses from property lettings increased only disproportionally compared to increase in rental income. Increases were mainly due to internalization of property and facility management and acquisition of BCP. ■ Improvement in financial result is mainly due to efforts to reduce interest expenses and interest on ACCENTRO receivable Comments Operating results increased
28 Reflecting the company´s successful activities of financial consolidation Comments ■ Balance sheet extended by more than 40% following acquisition of BCP ■ Investment properties increased due to BCP consolidation (€1,616.6m) and due to fair value adjustments of properties (€465.1m) ■ Increase in equity due to net retained profit and acquisition of BCP ■ Current liabilities decreased as promissory notes reclassified to current liabilities were repaid
29 EPRA NAV calculation Comments
■ Net asset value (EPRA NAV), which is calculated in accordance with the guidelines issued by the European Public Real Estate Association (EPRA), reached €1,639.0m at the end FY 2018. ■ Increase of €408.5m compared to FY 2017 (€1,230.5m). ■ This corresponds to an increase of 33.2%, and is attributable to the increase in shareholders’ equity and the increase in deferred tax liabilities on investment properties. ■ Based on the total number of existing shares in circulation at the balance sheet date less treasury shares plus the shares resulting from the assumed conversion of the mandatory convertible bond counted as shareholders’ equity, undiluted EPRA NAV per share amounted to €23.84 at 2018 year end (2017: €17.80). ■ Diluted EPRA NAV per share amounted to €22.18 as of 31 December 2018 (2017: €16.64). ■ Adjusting for the goodwill in connection with the previous acquisitions, the diluted EPRA NAV per share stood at €20.77, 35% increase to 2017 year end.
30 LTV calculation Comments ■ Since the first quarter of 2018, ADLER has been calculating LTV as the ratio of financial liabilities (adjusted for cash and cash equivalents, non- current assets held for sale, purchase price receivables and liabilities held for sale) to ADLER’s total property assets – as is customary in the industry. ■ LTV was at the end of 2018 at 61.4%, increase of 200bps YoY (excluding convertibles, i.e. assuming that the convertible bonds outstanding at the reporting date were converted into shares as they are trading deeply in the money). ■ The acquisition of BCP in April 2018 had a significant influence on the temporary increase in LTV as the acquisition was financed completely with debt.
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This document and its contents are confidential and not meant for forwarding.
applicable laws. This document does not constitute an offer to sell or an invitation to make an offer to buy or subscribe for securities. This document and the information contained therein may not be distributed in the United States of America. Canada. Australia. Japan or other jurisdictions. in which such offer. respectively. such invitation to make an offer to buy or subscribe for securities is not allowed. This document does not constitute an offer to sell securities in the United States. Securities. including the securities of ADLER Real Estate Aktiengesellschaft may not be sold or offered for sale within the United States or to or for the account of / in favour of US citizens (as defined in Regulation S under the U.S. Securities Act of 1933 in the current version (the "Securities Act") unless they are registered under the regulations of the Securities Act or unless they are subject to an exemption from registration. This document includes 'forward-looking statements'. Forward-looking statements are all statements. which do not describe facts of the past. but containing the words "believe". "estimate". "expect". "anticipate". "assume". "plan". "intend". "could". and words of similar meaning. These forward-looking statements are subject to inherent risks and uncertainties since they relate to future events and are based on current assumptions and estimates of ADLER Real Estate Aktiengesellschaft. which might not occur at all or occur not as assumed. They therefore do not constitute a guarantee for the occurrence of future results or performances of ADLER Real Estate Aktiengesellschaft. The actual financial position and the actual results of ADLER Real Estate Aktiengesellschaft. as well as the overall economic development and the regulatory environment may differ materially from the expectations. which are assumed explicitly or implicitly in the forward-looking statements and do not comply to them. Therefore. investors are warned to base their investment decisions with respect to ADLER Real Estate Aktiengesellschaft on the forward-looking statements mentioned in this document.
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ADLER Real Estate AG Joachimsthaler Straße 34 10719 Berlin www.adler-ag.com Tel: +49 (0) 162 424 6833 E-mail: t.kladnik@adler-ag.com