Preliminary FY 2019 results presentation including Coronavirus - - PowerPoint PPT Presentation
Preliminary FY 2019 results presentation including Coronavirus update 23 April 2020 Agenda I Financial and Operational Highlights 2019 Financial and Operational Highlights 2019 4 II II Coronavirus update Coronavirus update 8 III III
Consus Real Estate AG
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Financial and Operational Highlights 2019 Financial and Operational Highlights 2019 4
Development Portfolio Update Development Portfolio Update 14 14
Financial Results 2019 Financial Results 2019 26 26
Outlook Outlook 34 34
Appendix Appendix 37 37
Coronavirus update Coronavirus update 8
ADO / ADLER transaction ADO / ADLER transaction 11 11
Consus Real Estate AG
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» 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 at Deka Immobilien and Partner at Ernst & Young Real Estate and Arthur Andersen Real Estate » 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
» Several years of experience in the financial sector in Amsterdam and Frankfurt » Formerly at ABN Amro / Fortis and Bethmann Bank » Responsibilities at SSN included Finance, Business Development, Debt Advisory, Risk Management » CFO of Consus RE and Consus Swiss Finance (formerly CG Gruppe and SSN Group)
Theo Gorens CRO / Deputy-CFO
» 10 years in various management positions for the national and international development business of ECE Projektmanagement GmbH & Co. KG with overall responsibility for the national and international development business » CEO of Consus RE and Consus Swiss Finance (formerly CG Gruppe and SSN Group)
Jens Jäpel CDO (since March 20, 2020) Andreas Steyer CEO
Consus Real Estate AG
Consus Real Estate AG
Total revenue of € 671.0 million (FY 2018: € 485.5 million), overall performance of € 863.8 million (FY 2018 : € 466.5 million) – Growth of 38% and 85% respectively reflecting ramp-up of business and acquisition of SSN Adjusted EBITDA of € 344.4 million (PF FY 2018: € 253.2 million, FY 2018 : € 197.2 million) as business expanded – Adjusted EBITDA margin of 51% Reported Net Income of € (5) million (FY 2018: € (3) million) Net debt at € 2,699.9 million (FY 2018: € 2,104 million) – Increase reflects funding of business growth through project acquisitions, inventory build and contract assets Net debt / Adjusted EBITDA at 7.8x (FY 2018 pro forma for bond issuance : 8.7x; H1 2019 : 7.8x) – Increase from Q3 based on timing differences of inclusion on upfront sales in LTM, as previously noted Average run-rate interest rate reduced 0.1% to 7.8% These results are preliminary and unaudited. The preparation of the financial statements has been finalised; however, due to the impact of remote working requirements resulting from the Coronavirus, delivery of the audit opinion is expected to occur shortly. Financial Highlights 5 Continued strong growth in the business
FY 19 Highlights FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
Portfolio Continued portfolio growth: GDV increases to € 12.3 billion from € 9.6 billion as at 31 December 2018 Market Gross Asset Value increased to € 3.62 billion as at 31 December 2019 (FY 2018: € 2.95 billion) Forward Sales volume at € 2.8 billion (FY 2018: € 2.5 billion) Upfront sales : LOI signed for Hamburg Holsten with ADO for € 320 million in Q1 2020 Recent events Jens Jäpel joined Consus group as Chief Development Officer Full integration of CG Gruppe, now led by Consus CDO and name changed to Consus RE Strategic Cooperation with ADLER progressing well Portfolio Highlights and recent developments 6
FY 19 Highlights FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
Coronavirus update All construction sites operating and existing forward sales largely unaffected Certain upfront sales and new forward sales are currently delayed Consus believes that German residential real estate will prove to be one of the most robust asset classes Cash in group of over € 190m, and undrawn credit lines of over € 200m Outlook Adjusted EBITDA of c. € 450m in 2020, adjusted EBITDA margin of c. 20% and target Net Debt / adjusted EBITDA of ~ 3x in medium term, as previously communicated As at reporting date, Consus does not assume that Coronavirus pandemic will have material impact on Group’s business Significant forward and upfront sales planned for 2020 Coronavirus update and outlook 7
FY 19 Highlights FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
Consus Real Estate AG
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Construction :
availability of labour and certain materials now resolved
limited rise in costs and limited delays to completion.
conditions, with construction cost pressures reduced and costs potentially falling, and residential supply favourably impacted Personnel:
Eastern Europe Prepayments:
contract Forward sales :
Coronavirus pandemic
negotiate Forward sales to institutions:
pandemic
not expected to materially change
Forward sales of condominiums:
Coronavirus pandemic is controlled
importance of living space to individuals Upfront sales:
Existing projects New sales Actions taken
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Coronavirus Coronavirus ADO / Adler transaction
Consus Real Estate AG
10 Liquidity status and actions
Current cash throughout the group of over € 190m Undrawn project credit lines of over € 200m Projects subject to forward sale agreements – Funded from prepayments – Limited working capital requirements Projects for condominiums – Construction loans Consus is currently evaluating various additional group financing options – Includes loans from the German state-owned development bank KFW and German Government guarantees via the German- Wirtschaftsstabilisierungsfonds – Consus aims to be in a position to access these financing options if required – Other payment deferrals utilised as appropriate Medium term, material proceeds expected from upfront sales
Operating cashflows largely unchanged with cashflows from certain new sales delayed
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Coronavirus Coronavirus ADO / Adler transaction
Consus Real Estate AG
Consus Real Estate AG
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ADO + ADLER
Consus
Call option for acquisition of an additional 51% stake in Consus from majority shareholder Aggregate Holdings ■ Exchange ratio of 0.2390 ADO shares per Consus share ■ ADO may exercise option until June 2021 ■ Aggregate Holdings holds a put option which can be exercised in the event of a change of control at ADO Acquisition of 22% stake in Consus in cash ■ Adler Real Estate group now owns 25% of Consus ■ Strategic cooperation agreement with Consus, providing the right to ADO to allow it to match any offer from a third party on residential development projects worked on together
Consus
ADO Aggregate Holdings Others
~25% 51% 24%
■ ADO has committed to a voluntary takeover offer for minorities on the same financial terms as the call option 1 2
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction ADO / Adler transaction
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currently on working together on up to five projects
entire portfolio
works together with Consus for mutual benefit
Hamburg Holsten Quartier project for € 320m and received total exclusivity in return for a prepayment
decision process and improved financing solutions
interest to ADLER are not advanced until the status is agreed Mutually beneficial strategic co-operation agreement progressing well Mutually beneficial strategic co-operation agreement progressing well Strategic Co-operation Update
residential real estate company in Germany, with enhanced liquidity and likely MDAX candidate in the near-term
cities, diversifying outside of Berlin and across Germany
Top-9 cities, where the ongoing housing shortage is perceived to be strongest
value-creating growth path for future NAV accretion
reduced refinancing costs ADO / Adler strategic rationale for transactions
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction ADO / Adler transaction
Consus Real Estate AG
Consus Real Estate AG
15 Consus with attractive development projects… Key financials + KPIs
Targeted Medium-term Adjusted EBITDA margin
Targeted Medium-term Adjusted EBITDA margin
€ 12.3 billion GDV(1)
development portfolio across
€ 12.3 billion GDV(1)
development portfolio across
GDV in forward sales volume contracted + LOI(2)
GDV in forward sales volume contracted + LOI(2)
Targeted Medium-term Net Debt / Adjusted EBITDA
Targeted Medium-term Net Debt / Adjusted EBITDA
Targeted Adjusted EBITDA(4) 2020
Targeted Adjusted EBITDA(4) 2020
Breakdown of the development portfolio by city (3)
Dusseldorf 12% Leipzig 7% Stuttgart 21% Cologne 10% Hamburg 17% Munich 4% Dresden 2%
65 projects in total(6)
Frankfurt 12% Berlin 14%
(1) As of December 31, 2019. On a 100% basis; (2) Incl. Forward sales in negotiation and LOI signed of €785m and pre-sold condominiums of €225m; (3) Including investment properties, which will be sold over time; (4) EBITDA pre Purchase Price Allocation (PPA) and pre one-off costs; (5) Based on external valuation by JLL on 100% basis as of December 31, 2019 (6) 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. (7) As at reporting date, Consus does not assume that Coronavirus pandemic will have material impact on Group’s business. Consus will continue to assess any potential macro-economic and industry-related impacts as well as any impact on the Group’s business, either directly or from reduced economic visibility
4,6 12.3 1,6 3,5
1,2 2,0
2 4 6 8 10 12 GDV as of Dec 2017 Organic acquisitions 2018 SSN acquisition Closing upfront sale 2019 New acquisitions 2019 Development gain GDV as of Dec 2019
(1)
Portfolio with increased share of Forward sales GDV: €12.3bn(1)
Target Forward Sales (3) 49% Forward Sold (2) 23% Condominium sales 21% Upfront sale LOI signed 7% FY 19 Highlights Portfolio Update Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
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Consus has a flexible portfolio extending until 2029 under the current business plan Consus has a flexible portfolio extending until 2029 under the current business plan
(1) As of December 31, 2019. On a 100% basis; (2) Adjusted for dilution from Leipzig Plagwitz investment property Note: 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: 807 Area in k m²: 340
3,292 (2) % of total GDV: 7% Projects: 16
Cologne
GDV in €m: 1,277 Area in k m²: 240
5,324 % of total GDV: 10% Projects: 7
Frankfurt/Offenbach
GDV in €m: 1,456 Area in k m²: 187
7,784 % of total GDV: 12% Projects: 7
Hamburg
GDV in €m: 2,110 Area in k m²: 373
5,655 % of total GDV: 17% Projects: 6
Berlin
GDV in €m: 1,687 Area in k m²: 219
7,699 % of total GDV: 14% Projects: 9
Dresden
GDV in €m: 291 Area in k m²: 63
4,649 % of total GDV: 2% Projects: 4
Dusseldorf
GDV in €m: 1,427 Area in k m²: 265
5,374 % of total GDV: 12% Projects: 4
Stuttgart/Karlsruhe
GDV in €m: 2,695 Area in k m²: 485
5,552 % of total GDV: 22% Projects: 9
Berlin Leipzig Dresden Frankfurt Dusseldorf Cologne Hamburg Stuttgart Munich
22%
Munich area
GDV in €m: 533 Area in k m²: 75
7,093 % of total GDV: 4% Projects: 3
4% 10% 12% 12% 17% 14% 7% 2%
Main focus on residential and “quartier” developments Approach to develop large projects in phases All “quartier” developments include commercial properties
65 projects with GDV of € 12.3 billion(1)and thereof 31% under construction
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Consus Real Estate AG
17 Significant portion of Top 25 projects are forward sold and under construction
Please note: Figures as of Dec 31, 2019.
# Project name City GDV (k€) Planned construction period Net floor area (sqm) % Residential net floor area 1 VAI Campus Stuttgart 1,127,352 € 2021 - 2026 185,417 65% 2 Benrather Gärten Dusseldorf 1,109,782 € 2023 - 2029 210,840 45% 3 Holsten Quartiere Hamburg 890,475 € 2021 - 2026 134,573 66% 4 Quartier C Stuttgart / Karlsruhe 579,726 € 2021 - 2026 111,249 70% 5 GEM H Portfolio Stuttgart / Karlsruhe 542,877 € until 2025 113,661 16% 6 The Wilhelm Berlin 504,845 € 2018 - 2024 17,222 93% 7 Neuländer Quarree Hamburg 428,262 € 2021 - 2025 90,390 29% 8 2stay Frankfurt 412,348 € 2021 - 2023 31,705 0% 9 Cologneo II Cologne 402,228 € 2022 - 2025 73,607 57% 10 Steglitzer Kreisel Parkhaus & Sockel Berlin 382,007 € 2020 - 2024 46,474 0% 11 Ostend Frankfurt 328,666 € 2025 - 2026 42,552 62% 12 Covent Garden Munich 313,005 € 2021 - 2025 29,273 92% 13 Billwerder Neuer Deich Hamburg 265,159 € 2022 - 2024 52,005 0% 14 NY Hamburg 249,624 € 2022 - 2024 42,449 55% 15 Cologneo I Corpus Sireo Cologne 241,544 € 2019 - 2022 53,803 63% 16 Steglitzer Kreisel Tower Berlin 229,751 € 2017 - 2021 27,317 88% 17 Wachendorff Quartier Cologne / Bergisch-Gladbach 220,082 € 2022 - 2024 45,740 77% 18 Forum Pankow Berlin 216,719 € 2020 - 2025 39,559 49% 19 NewFrankfurt Towers VauVau Frankfurt / Offenbach 215,277 € 2018 - 2021 37,740 84% 20 Westend Ensemble - Upper West Frankfurt 207,601 € 2020 - 2023 19,843 75% 21 Plagwitz Development Leipzig 180,742 € 2019 - 2023 65,610 18% 22 Bundesallee (incl. MOMENTE) Berlin 174,437 € 2021 - 2026 28,668 25% 23 UpperNord Tower VauVau Dusseldorf 168,535 € 2019 - 2022 25,640 94% 24 Neues Korallusviertel Hamburg 163,649 € 2020 - 2023 34,792 98% 25 Vitopia-Kampus Kaiserlei Comm Frankfurt / Offenbach 138,969 € 2022 - 2024 31,870 0%
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Forward Sales Signed » Letter of intent in negotiation with institutional purchasers » Expected to be converted to signed letter of intent within 3-6 months and in signed forward sale agreements within 6-12 months » Existing development projects being prepared for negotiations to start » Signed letter of intent with institutional purchasers, expected to be converted into signed forward sale agreements within 3-6 months » Forward sale LOIs signed for projects in Leipzig and Passau (part of development) » Signed binding agreements between Consus and institutional purchasers » Condominiums sold to retail purchasers rather than institutional purchasers Letter of intent signed Forward sale 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
€665m GDV €121m GDV €1,780m GDV €225m GDV
€2.8 billion GDV forward sold or under LOI allows for strong visibility on future performance
6 projects 2 projects 18 projects 7 projects
31/12/2019
€2.8 bn GDV Certain forward sales on hold subject to Strategic Cooperation agreement with ADLER
FY 19 Highlights Portfolio Update Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
» Quartier Kreuzstrasse with 190 2 to 4-room apartments was forward sold to an institutional investor in Q4 2019. The project consists of two industrial monuments, which will be renovated as well as two new buildings on the southern and eastern edge
» A well-known institutional purchaser acquired the ‘Ostforum’ project in Leipzig for €67m with an additional upside of up to €13m (+20%), if rents above current market rent will be achieved. The two front buildings will have 14,500 m² of commercial space, and the rear building will house 48 apartments.
City / Project KPIs Pictures Delivery Construction Development / Forward sale Acquisition Sales Status
GDV €67m Completion 2022 Asset type Mixed Area (k sqm) 18 Leipzig, Ostforum » 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 (k sqm) 268 Upfront sale Leipzig, 416 » 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 €83m Completion 2020 Asset type Commercial Area (k sqm) 11 Forward Sold to BNP Paribas REIM Berlin, Franklinhaus » Consus forward sold this development project with 187 units in fast growing Leipzig to a well-known institutional purchaser. 51 high-quality, classic 2 to 4-room apartments (51 to 121 m²) as well as 136 space-optimised 2-room flats (40 to 66 m²), suitable for all ages, all with balcony, loggia or terrace, are being constructed in two buildings. GDV €39m Completion 2021 Asset type Residential Area (k sqm) 10 Forward Sold for
Leipzig, Magnolia Forward Sold for
19
» The Königshöfe development in a prime old town location of Dresden comprises 192 modern rental apartments with 2 to 5 rooms, a balcony or a loggia. This project was forward sold to Commerz Real and Wertgrund in Q2 2019. GDV €71m Completion 2022 Asset type Mixed Area (k sqm) 15 Dresden, Königshöfe im Barockviertel Forward Sold for
GDV €53m Completion 2022 Asset type Residential Area (k sqm) 12 Leipzig, Kreuzstraße project Forward Sold for
FY 19 Highlights Portfolio Update Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Consus agreed € 510m of Sales (Forward + Upfront) in 2019, with over € 1,000m forward sale and over € 2,000m upfront sales GDV targeted for 2020
Consus Real Estate AG
» Forward sale in negotiation for a residential development in the Erfurt city center with 122 1- to 3-room apartments, two commercial units and about 50 parking spaces. » This 107m landmark tower will contain 194 apartments. The addition of one floor to the hotel (building permit already available) has increased the number of hotel rooms to 164. » Just 5.5 km from Berlin city center, in the family-friendly district of Pankow, the shopping and commercial center Staytion Berlin-Pankow will be developed. Consus is constructing a total of seven new buildings to create a mixed neighborhood. » At one of Düsseldorf's main transport hubs, a sophisticated new Quartier will be
benefit from the convenient location and excellent connections to the city center, airport and surrounding area.
City / Project KPIs Pictures Delivery Construction Development / Forward sale Acquisition Status
» Forward sale in negotiation for a development with 107 city apartments in the Stuttgart region for approx. €55m. Böblingen is home to the largest Mercedes-Benz factory globally. GDV €55m Completion 2022 Asset type Mixed Area (k sqm) 9 Stuttgart region, City-Carré Böblingen » Forward sale in negotiation for a residential development in the popular district Hamburg-Altona with 289 apartments, commercial spaces and underground parking for approx. €114m. GDV €114m Completion 2022 Asset type Mixed Area (k sqm) 19 Hamburg, Bahrenfelder Carrée GDV €32m Completion 2022 Asset type Residential Area (k sqm) 8 Erfurt (near Leipzig), TAP Hochhaus GDV €117m Completion 2021 Asset type Mixed Area (k sqm) 16 Stuttgart region, Schwabenlandtower GDV €217m Completion 2025 Asset type Mixed Area (k sqm) 40 Berlin, Forum Pankow (Staytion) GDV €132m Completion 2023 Asset type Residential Area (k sqm) 25 Dusseldorf, Upper Nord Quartier
€ 790 million of forward sales currently in negotiation or with LOI signed 20
In neg. In neg. In neg. In neg. In neg. In neg. FY 19 Highlights Portfolio Update Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
» Residential quartier development in an old brewery location with close proximity to one
» Project debt: € 8m at 3.5% interest rate » 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 450 parking spaces. » Project debt: € 22m at 3.1% interest rate
City / Project KPIs Pictures
GDV €220m Completion 2024 Asset type Mixed-use NFA (k sqm) 46 Cologne area, Bergisch Gladbach Wachendorff Quartier GDV €89m Completion 2024 Asset type Residential NFA (k sqm) 20 Erfurt, Braugold Quartier » Large quartier development in Dusseldorf-South on a 148k sqm plot of land with excellent connections to the city center, airport and surrounding area. » Project debt: € 109m at 5.6% interest rate GDV €1,110m Completion 2029 Asset type Mixed-use NFA (k sqm) 211 Dusseldorf, Benrather Gärten
Delivery Construction Development / Forward sale Acquisition
» Large mixed-use quartier development with c. 1000 apartments next to Dusseldorf central terminal. GDV €612m Completion 2025 Asset type Mixed-use NFA (k sqm) 86 Dusseldorf, Grand Central
Signed: Q4 19 | Not closed
FY 19 Highlights Portfolio Update Portfolio Update Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Acquisitions agreed in last twelve monthsdemonstrate ongoing ability to source attractive projects
Consus Real Estate AG
Quartiers overview Digitalisation
» Digitalized offering to include component catalogue, procurement platform, floor plan generator and configurator » Further supported by acquisition of digital planning company DIPLAN » 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 » Setting up a highly automated pre-fabrication plant in Erfurt in partnership with European Modular Constructions GmbH » Large plant for construction elements » Targeted to start production in 2021 with focus on massive concrete parts
Introduction of new building standards Digital planning and construction platform Pre-fabrication operations with partner I II III VAI Campus
GDV: €1,127m Area: 186,417m² Completion of entire Quartier: 2026 City: Stuttgart Asset type: Mixed
Holsten Quartier
GDV: €890m Area: 134,573m² Completion of entire Quartier: 2026 City: Hamburg Asset type: Mixed
Benrather Gärten
GDV: €1,110m Area: 210,840m² Completion of entire Quartier: 2029 City: Dusseldorf Asset type: Mixed
Quartier C
GDV: €580m Area: 111,249m² Completion of entire Quartier: 2026 City: Karlsruhe Asset type: Mixed Save up to 6 months in the development timeline (1) Savings potential up to 30% due to integrated planning and prefab-based construction process Currently 27 projects using BIM and all new projects to implement Ability to pre- fabricate wall and ceiling units for ~1,950 residential units per year(1)
(1) Based on management estimates
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Consus Real Estate AG
23 Management of CG assets fully integrated in to Consus management – Jens Jaepel, Chief Development Officer of Consus, is CEO of former CG Gruppe – Theo Gorens, Deputy CFO of Consus, is CFO of former CG Gruppe – Juergen Kutz remains as Deputy CEO Christoph Gröner moves to position of Supervisory Board of Consus RE (former CG Gruppe) – Stepped down from CEO role on 20 March, 2020 CG Gruppe renamed as Consus RE Consus now operating as one fully integrated development platform Entire Consus group under one unified management team Significant further synergies expected
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(Deutsche Wohnen invests billions in new builds – 25/03/2020)
(Expansion in development: Vonovia SE acquires Bien-Ries AG - 05/03/2020
apartments and homes in the next 4 years. This is absolutely necessary“ (1) Consus is the leading residential developer in Top 9 cities Recent acquisitions of residential developers Consus has a strong market position as the leading residential developer in the top 9 German cities
Source: bulwiengesa Projektentwicklerstudie 2020
(1) Source: German Chancellor Angela Merkel, Die Bundesregierung, May 26, 2018
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Consus Real Estate AG
25
locations
strength of residential focus
locations
strength of residential focus
volume mixed-use projects
volume mixed-use projects
highlight existing value
highlight existing value
stage repayment of investment
stage repayment of investment
mixed-use sites
mixed-use sites
advantage
advantage
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Consus Real Estate AG
Consus Real Estate AG
Key Income Statement Figures - Preliminary Key Balance Sheet & Cash Flow Figures - Preliminary FY 2018 FY 2019 Total Income Total Income Adjusted EBITDA(1) Adjusted EBITDA(1) Financial Result Financial Result Net Income Net Income Net Debt Net Debt Operating Cash Flow Operating Cash Flow Prepayments Received Prepayments Received Market Gross Asset Value Market Gross Asset Value € 2,700m € (74)m € 789m € 3,620m Net Debt / PF Adjusted EBITDA(1)
(1) EBITDA adjusted for Purchase Price Allocation (“pre-PPA”) and one-off expenses (2) Net Debt pro forma for the initial € 400m senior secured bond issuance
7.8x 75% Net Debt / Market GAV € 486m € 197m € (114)m € (3)m
27
Overall Performance Overall Performance € 466m € 671m € 344m € (217)m € (5)m € 864m € 2,209m (2) € 133m € 557m € 2,952m 8.7x (2) 75% (2) FY 2018 FY 2019
FY 19 Highlights Portfolio Update Results FY 19 Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
28 Consus has successfully grown the business and will focus on deleveraging in 2020
FY 19 Highlights Portfolio Update Results FY 19 Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
» Total GAV has increased as Consus has acquired projects and invested in their development » Debt has risen in line with GAV increase » GDV has risen materially more than the GAV increase » In 2020, Consus is targeting forward sales with a GDV of over € 1bn » In addition, upfront sales with a GDV of over € 2bn are under consideration » The combination of new forward and upfront sales will significantly reduce debt and leverage » Consus’ approach to reduce GAV will release cash
328 351 390 384 1
26 2.140 2.345 2.284 2.473 222 297 308 335
1.000 1.500 2.000 2.500 3.000 3.500 FY18 H1 19 Q3 19 FY 19
Gross Asset Value has increased over time
Investment properties Held for sale WIP Contract assets
Comments
Consus Real Estate AG
48% 49% 50% 59% 62% 11% 11% 11% 12% 12% 28% 27% 25% 19% 20% 12% 12% 13% 10% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% PF 2018 Q1 2019 Q2 2019 Q3 2019 FY 2019 Senior debt Junior debt Expensive mezzanine debt Other mezzanine debt
29
from € 500 million level at June 30
to no longer be material
high cost mezzanine and junior debt
more efficient financing and absolute reductions
development in Dusseldorf in Q4 with ‘Schuldscheindarlehen’ at 5.6% average interest rate
Reduction of mezzanine debt from 40% to 26% of total project debt
8.1% 8.5% (1) 7.9%
Reduction in average interest rate over 2019 Key Highlights
Project-level debt to be reduced through repayment from upfront + forward sales
2. 3. 1. 4.
(1) Increase impacted by issuance of €400m senior secured notes
7.8%
Average interest rate
8.1%
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Consus Real Estate AG
30 Income Statement
in k € Preliminary FY 2018 Preliminary FY 2019 Income from letting activities 32,796 21,340 Income from real estate inventory disposed of 163,515 204,541 Income from property development 278,992 401,621 Income from service, maintenance and management activities 10,199 43,613 Total income 485,502 671,115 Change in project related inventory
192,700 Overall performance 466,498 863,815 Expenses from letting activities
Cost of materials
Net income from the remeasurement of investment properties 25,631 31,943 Other operating income 13,241 20,360 Personnel expenses
Other operating expenses
EBITDA 101,440 236,435 Depreciation and amortization
EBIT 99,265 227,992 Financial income 9,001 28,160 Financial expenses
EBT
11,486 Income tax expenses 12,198
Net income
in k € PF FY 2018 FY 2019 EBITDA 155,470 236,435 PPA Adjustments 82,262 66,007 One-off expenses 15,458 41,950 Adjusted EBITDA(1) 253,190 344,392 Adjusted EBITDA Bridge Y-o-Y / LTM
(1) EBITDA adjusted for Purchase Price Allocation (“pre-PPA”) and one-off expenses
project
and inclusion of SSN
demonstrates acquisitions and project development
inclusion of SSN and incremental personnel increases
increase in debt, with average interest rate falling
deferred tax asset impacts
costs including write-downs relating to Christoph Groner departure as CEO of CG Gruppe
Comments
3.
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1. 2. 2. 3. 4. 5. 6. 7. 4. 5. 6. 7. 1.
Consus Real Estate AG
Non-current & Current Assets
in k € Preliminary FY 2018 Preliminary FY 2019 Investment property 328,027 384,044 Property, plant and equipment 8,771 11,076 Right of use assets 17,144 Goodwill 1,036,920 1,036,489 Other intangible assets 6,158 4,919 Investments accounted for using the equity method 21,590 21,046 Receivables from related parties
Financial assets 10,037 73,559 Other assets
Contract assets 23,095 13,856 Total non-current assets 1,434,598 1,562,511 Work-in-progress incl. acquired land and buildings 2,139,761 2,472,621 Trade and other receivables 53,933 41,663 Receivables from related parties 62,853 109,082 Tax receivables 8,644 11,572 Financial assets 38,439 31,101 Other assets 15,499 28,707 Contract assets 198,505 321,347 Cash and cash equivalents 91,603 150,613 Assets held for sale 1,329 26,100 Total current assets 2,610,565 3,192,805 Total assets 4,045,163 4,755,315
31
capex as well as value growth
done or profits earned prior to prepayments received
acquisitions and development expenditure versus sales
project financing
Comments
1. 1. 2. 2. 3. 4. 3 4.
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5. 5.
Consus Real Estate AG
Equity and liabilities
in k € Preliminary FY 2018 Preliminary FY 2019 Subscribed capital 134,040 136,582 Capital reserves 904,233 877,132 Other reserves
Non-controlling interests 148,341 132,286 Total equity 1,126,106 1,064,394 Financing liabilities 1,049,150 1,655,621 Provisions 1,712 2,843 Liabilities to related parties 27,500 27,500 Other liabilities 43,388 32,572 Deferred tax liabilities 90,508 111,232 Total non-current liabilities 1,212,259 1,829,767 Financing liabilities 1,146,374 1,194,880 Provisions 4,735 7,426 Trade payables 41,913 97,576 Liabilities to related parties 43,196 53,299 Tax payables 44,389 53,038 Prepayments received 323,986 305,777 Other liabilities 70,047 95,993 Contract liabilities 32,158 53,166 Total current liabilities 1,706,799 1,861,154 Total liabilities 2,919,058 3,690,921 Total equity & liabilities 4,045,163 4,755,315
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increases
dividend obligation
related to land are recognised directly on the balance sheet, as not offset against contract asset as the income has not been recognised
prepayments in excess of contract assets for specific projects
Comments
1. 2.
FY 19 Highlights Portfolio Update Results FY 19 Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
4. 5. 6. 3. 1. 2. 4. 5. 6. 3. 2.
Consus Real Estate AG
in k € Preliminary FY 2018 Preliminary FY 2019 Profit (loss) before tax (after discontinued operations)
11,486 Depreciation and amortisation 2,200 8,443 Depreciation and impairment of property, plant and equipment 1,723 2,666 Amortisation and impairment of intangible assets 477 1,680 Depreciation on right-of-use asset
Valuation gains on financial assets
Financial expenses (income) 114,444 216,506 Financial income
Financial expenses 124,600 244,666 Transition Adjustments IFRS 15
2,443 10,118 Other working capital adjustments 72,166 (279,655) Decrease / (increase) in rent and other receivables 22,064
Decrease / (increase) prepayments, accrued income and other assets
Decrease/ (increase) in inventories and contractual assets
(Decrease) / increase in prepayments on development projects 356,326 249,914 Decrease in inventory property
(Decrease) / increase in trade, other payables and accruals, contractual liabilities and other liabilities 39,045 77,542 Income tax paid
Net cash flow from operating activities 133,411
Net cash flow from investing activities 23,631
Net cash flow financing activities
338,845
Cash flow 33
activities reversed due to growth in inventories and contract assets
upfront sales in 2020 will drive improvement in operating cash flow through stronger prepayments
activities reflects further acquisitions and capex
impact of refinancing Cash increased from € 92m to € 151m
FY 19 Highlights Portfolio Update Results FY 19 Results FY 19 Outlook Appendix Coronavirus ADO / Adler transaction
Comments
1. 2. 3. 4. 1. 2. 3. 4.
Consus Real Estate AG
Consus Real Estate AG
Overview of Key Financials » As at reporting date, Consus does not assume that Coronavirus pandemic will have material impact on business » Existing forward sales contracts are continuing largely unaffected » However, certain upfront sales and new forward sales are currently delayed » Consus plans, including these sales being completed as originally assumed, are dependent on the scale of negative impacts caused by the Coronavirus pandemic and the success of any counter measures » Although there is a risk to asset prices, Consus continues to believe that German residential real estate will prove to be one of the most robust asset classes despite the Coronavirus pandemic » Consus believes that the advantages of its position as the largest German residential real estate developer in Germany’s top 9 cities will ultimately be demonstrated » Consus will continue to assess any potential macro-economic and industry-related impacts as well as any impact on the Group’s business, either directly or from reduced economic visibility, and will update the market as appropriate Current status Guidance Target Medium-term Net Debt / Adjusted EBITDA Target Medium-term Net Debt / Adjusted EBITDA » ~ 3x in the medium term » Reduction over time based on achieving steady- state level of forward sales and reducing level and cost of debt Target 2020 Adjusted EBITDA Target 2020 Adjusted EBITDA Gross Development Value (GDV) Gross Development Value (GDV) » Around €10bn billion in total » Current level of €12.3bn allows for significant planned upfront sales as well as forward sales » GDV targeted to reduce to below € 10bn by year end » No acquisitions signed in 2020 Target Adjusted EBITDA margin Target Adjusted EBITDA margin » c. 20% » Reflecting contributions from larger mixed use projects 35 » €450 million » Combination of planned upfront sales, new forward sales and existing forward sales Impact will be determined by length of disruption and speed of recovery Impact will be determined by length of disruption and speed of recovery
FY 19 Highlights Portfolio Update Results FY 19 Outlook Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
36 36
ISIN WKN
DE000A2DA414 A2DA41
Number of Shares
136.581.507
Market Segment
Deutsche Börse Scale m:access
Stock Exchanges
Xetra, München, Frankfurt
Indices
E&G-DIMAX
Market cap.(2)
€ 680m
Analysts
SRC Research: €10.0 BUY Baader Bank: €10.0 BUY Hauck & A.: €8.80 Updated to BUY Deutsche Bank: €7.0 BUY UBS: €7.30 HOLD
Financial Calendar Consus Share Share price development and shareholder structure
» Aggregate Group ~51% » ADO/Adler ~25% » Christoph Gröner ~6% » Free Float ~18%
(1) Bloomberg, Factset (2) As of April 22, 2020
24 Jun 2020 Consus Annual General Meeting
FY 19 Highlights Portfolio Update Results FY 19 Outlook Outlook Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
Consus Real Estate AG
Legend Shareholder Debt facility Operating SPVs Consus
Gröner(4)
Consus RE (formerly CG Gruppe)
SPVs 53 projects Estimated market GAV(1) €3.39 billion Senior Secured Notes: €450m Convertible: €174m Other debt: €32m(2) Development and Construction Debt: €1,198m
Consus Swiss Finance (former SSN Group)
SPVs 12 projects Development and Construction Debt: €845m Aggregate ADO / Adler 75.0%(3) ~51% ~25% 93.4%5
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Note: Simplified structure on a 100% basis. Debt as of 30 September 2019 pro forma for Bond (1) Estimated market GAV as of 30 September 2019; (2) Includes €26m of debt at Pebble Investment GmbH level (100% owned by Consus) (3) On a fully diluted basis and following completion of acquisition of additional shares as per SPAs; (4) Gröner refers to Gröner GbR, Gröner Unternehmensgruppe GmbH and Gröner Unternehmensbeteiligungen GmbH (5) Consus owns 93.4% of SSN Group. SSN holds 51.0% of the shares in SG Development GmbH, which holds nine out of twelve development projects. As part of the acquisition
Consus Development (former SG Development)
Other shareholders ~23%
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
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Financing synergies Operating synergies Total synergies
Unsecured bonds - €2.0bn €5m - €10m Medium term Bank loan - €1.6bn €4m - €8m ADO Group bonds - €0.3bn €1m - €1m Total financing synergies €10m - €19m
Total synergies €25m - €39m
€180m - €210m p.a. pre-tax FFO improvements through run-rate synergies €180m - €210m p.a. pre-tax FFO improvements through run-rate synergies
Mezzanine debt >10% - €0.6bn €83m - €85m 2020 Senior/Junior debt >5-10% - €0.4bn €15m - €17m 2020 Senior/Junior debt >3.5-5% - €0.5bn €5m - €8m 2020 Unsecured bond - €0.5bn €38m - €40m 2021 Other bank debt - €0.2bn €1m - €3m Medium term Total financing synergies €142m - €153m
Total synergies €155m - €171m
Upon acquiring control of Consus
■ Scale and efficiency driving reduction in opex ■ Savings from duplicate public company functions, IT, audit and other professionals service fees ■ Platform savings
€15m - €20m 12-24 months
■ Reduction in marketing expenses in relation to build to sell business ■ Platform savings ■ IT, audit, professional service and other general administrative savings
€13m - €18m 12-24 months FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
9,8 8 7,5 7,1 6,3 5,8 5,6 5,4 5 4,3 3,7
UK France Poland Hungary Italy Netherlands Austria Spain Germany Denmark Belgium
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Source: German Chancellor Angela Merkel, Die Bundesregierung, May 26, 2018
(1) Based on estimated average price of €325k per unit
German Chancellor Angela Merkel
(1)
Rent affordability remains healthy
New unit (70 sqm) price as a multiple of gross annual salary
Source: Deloitte Property Index 2018, Morgan Stanley Research
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 Source: Destatis, EIU
Strong and consistent rental price growth
No decline in rental prices in
economic cycle 2018 Source: Institut der deutschen Wirtschaft, July 2019
Demand of 3.2m new apartments until 2030
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
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Consus acquires land plots and lays
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
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
77% with forward sales approach
Business model focused on Forward Sales – existing project portfolio enables dynamic portfolio management
Plots
Project
Forward
& Deliver
(1) As of December 31, 2019. On a 100% basis;
Development portfolio Post building permit, construction phase takes ~24-36months Approach for condominium sales is similar under Germany´s highly regulated sales structure. Most significant difference is sales of apartments over time, versus 100% upfront, and financing structure
GDV: €9.6bn(2)
GDV: €12.3 bn(1)
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
(1) Delivery includes finalization of construction and tenancy
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Delivery Construction Development / Forward sale Acquisition
30% 60% 10% 20% 5% 54% 1%
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 Cash flow positive as construction starts
First cash inflow as forward sale is entered into Target to become cash flow positive prior to construction start
Balanced payments profile Balanced payments profile
90% of the cash inflows are received during the construction phase including payment for the land Small remaining payment at delivery
Limited working capital consumption Limited working capital consumption
Regular payments from buyers to cover construction costs Minimal working capital needs throughout the life of the project
High profitability High profitability
Targeted Adjusted EBITDA margin of 20% at delivery, with upside potential based on
achieved, and downside floor
Project cash flow breakeven
(1)
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Appendix Coronavirus ADO / Adler transaction
Consus Real Estate AG
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Revenue Operating costs Adjusted EBITDA Capex ∆ in working capital Interest expense Taxes Free Cash Flow
Revenue visibility Profitability visibility Limited maintenance investment required Revenue
Run-rate revenue level as total portfolio GDV spread over the average life
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 Strong cash flow generation as the run-rate is achieved
FY 19 Highlights Portfolio Update Results FY 19 Outlook Appendix Appendix Coronavirus ADO / Adler transaction