32
ADLER Real Estate AG: H1 2019 results presentation August 2019
1
ADLER Real Estate AG:
H1 2019 results presentation August 2019
Agenda
2
Financial performance3
Operational performance2
ADLER Real Estate in the Capital Markets4
1 Introduction and executive summary
Guidance5
Appendix6
3
1. Introduction and executive summary
H1 2019 highlights
4
■ Like-for-like rental growth of 3.4%, average in-place rent increased to €5.54 per sqm/month as of H1 2019 (FY 2018: €5.49 per sqm/month)
■ Vacancy marginally increased by 0.4ppts to 6.4% as of H1 2019 as a result of capex measures and active asset management to reduce delinquencies across the portfolio. Consequently, year end 2019 guidance updated to 6.0%.
■ Significant increase in FFO I (+18.8%) from €35.1m in H1 2018 to €41.7m in H1 2019■ Fully diluted FFO I per share in H1 2019 at €0.53 (H1 2018: €0.44) (+20.5%)
Operating data
Financingand LTV
■ Successful placement of €400 million bond in April 2019 to refinance existing debt with a Coupon of 1.5%■ WACD stands at 2.08% as of H1 2019 ■ YoY LTV reduction of 8.8 ppts compared to H1 2018 (67.5%). As of H1 2019, LTV stood at 58.7%. Long term target of 50-
55% and guidance for FY 2019 of c.55%
Valuation and EPRA NAV
■ Fair value of investment properties (incl. inventories) as of H1 2019 at €5,008.2m (2018: €5,077.1m), slight decrease following sale of part of retail portfolio
■ Fully diluted EPRA NAV (excluding goodwill) per share of €22.23, +7% increase on FY 2018 (€20.77)
Acquisitions / Disposals and
other
■ Non-core residential portfolio sold in December 2018 – c.3,700 units with GAV of €179.2m sold at c.3% premium■ During the first half of 2019, 14 retail assets were sold with GAV of €321.7m (c.67% of BCP’s retail portfolio) at c.2.3%
discount to ADLER’s current book value
5
ADLER Real Estate at a glance
Note: 1 In percentage of gross asset value (“GAV”; investment properties and inventories)2 In percentage of total number of units of residential portfolio3 Riverside / Wasserstadt-Mitte, Berlin development project is currently valued at €392.8m 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 GPR General Index, SDAX, DIMAX, CDAX)
Total residential portfolio geographical split2Residential portfolio KPIs
Completed by the end
of 2019
Number of units 58,095
Rentable area (sqm) 3,546,082
Fair value (€/sqm) 1,136
Average rent (€/sqm/month) 5.54
Rental yield (%) 5.5%
Vacancy (%) 6.4%
LfL rental growth (%) 3.4%
31.5%
23.8%
3.3%
16.7%
6,7%
2.9%
6.2%
North Rhine-Westphalia13,808
Lower Saxony18,312 Berlin
1,699
Brandenburg3,595
Saxony-Anhalt3,877
Saxony9,679
Thuringia1,941
Otherunits843
1.4 %
2.6%
Bremen1,515
3.1%Schleswig-Holstein
1,800 1.8%
Mecklenburg-Pomerania1,026
Residential portfolio
80.5%
Retail Parks3.2%
Residential Development
8.4%
Berlin Riverside³
7.9%
Total GAV€5.0bn
6
Finalised internalisation driving operational improvements
2. Operational performance
Operational performance significantly improved following internalization of property and facility management…
7
Total number of residential units* Investment properties
Residential portfolio vacancy rateResidential portfolio LfL rental growth (YoY)
Residential portfolio FV per sqm
Residential average rent (€/sqm/month)
Residential Retail
Note: * Residential portfolio only; includes commercial units within the multi-family houses
24,086
48,218 47,662 46,179
58,113 58,095
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2014 2015 2016 2017 2018 H1 2019
5.02 4.93
5.04
5.21
5.49 5.54
4.60
4.80
5.00
5.20
5.40
5.60
2014 2015 2016 2017 2018 H1 2019
€/sqm/month 12.8%
11.2%
8.6%7.9%
6.0% 6.4%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2014 2015 2016 2017 2018 H1 2019
0.3%
1.2% 1.5%
3.8%
3.4% 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 H1 2019
4,578 4,848
1,171
2,235 2,442
3,022
5,077 5,008
0
1,000
2,000
3,000
4,000
5,000
6,000
2014 2015 2016 2017 2018 H1 2019
€m
732 735 817
928
1,095 1,136
0
200
400
600
800
1,000
1,200
2014 2015 2016 2017 2018 H1 2019
€/sqm
Growing property portfolio in attractive B locations
8
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
ADLER Real Estate portfolio at a glance
Overview
v
■ Wilhelmshaven is ADLER´s TOP location concerning number of units. The demographic 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
Location Units
Lettable
area
sqm
NRI
€m
Q2 2019
NRI
€/sqm/month
Q2 2019
NRI
€/sqm/month
Q2 2018
YoY NRI Δ€/sqm/month
Vacancy
rate
Q2 2019
Vacancy
rate
Q2 2018
YoY
vacancy Δ
Fair Value
€m
Q2 2019
Fair Value
€/sqm
Q2 2019
Rental
yield (in-
place rent)
Wilhelmshaven 6,896 406,713 23.1 5.10 5.00 2.0% 7.3% 8.1% -0.8% 382.1 939 6.0%
Duisburg 4,925 305,003 19.5 5.51 5.39 2.3% 3.6% 2.9% 0.8% 327.8 1,075 5.9%
Leipzig 4,738 254,003 16.5 5.77 5.59 3.2% 6.1% 6.3% -0.2% 380.8 1,499 4.3%
Cottbus 1,868 110,045 5.8 4.75 4.65 2.3% 6.8% 15.0% -8.1% 84.5 768 6.9%
Halle (Saale) 1,858 105,895 5.3 4.79 4.78 0.4% 12.2% 13.7% -1.5% 88.5 835 6.0%
Dortmund 1,770 102,251 6.9 5.78 5.61 3.1% 3.2% 2.4% 0.8% 111.7 1,092 6.2%
Berlin 1,699 111,736 7.6 5.88 5.80 1.5% 3.3% 2.6% 0.8% 242.6 2,171 3.1%
Göttingen 1,377 85,238 5.9 5.98 5.85 2.2% 3.5% 4.1% -0.6% 124.2 1,457 4.8%
Wolfsburg 1,301 87,614 6.4 6.25 6.07 3.0% 3.3% 5.7% -2.4% 132.4 1,511 4.8%
Helmstedt 1,219 70,703 4.4 5.23 5.17 1.3% 1.7% 3.7% -2.0% 65.4 925 6.7%
Hannover 1,115 63,349 5.3 7.15 6.85 4.3% 2.7% 4.4% -1.7% 118.6 1,872 4.5%
Essen 1,039 65,921 4.4 5.76 5.61 2.7% 2.9% 3.9% -1.0% 85.3 1,294 5.2%
Kiel 967 66,588 5.3 6.71 6.44 4.3% 0.8% 3.2% -2.4% 96.7 1,452 5.5%
Borna 900 50,189 2.2 4.68 4.60 1.8% 22.5% 18.6% 3.8% 36.7 731 5.9%
Bremen 873 53,645 3.9 6.24 5.94 5.1% 2.8% 4.3% -1.5% 72.4 1,350 5.4%
Chemnitz 850 53,070 2.4 4.78 4.72 1.2% 13.2% 23.8% -10.6% 42.7 805 5.6%
Schöningen 846 50,192 2.5 5.01 5.06 -0.9% 17.2% 18.5% -1.4% 40.6 809 6.2%
Oberhausen 819 62,642 3.6 5.07 4.92 3.0% 5.3% 4.2% 1.1% 53.7 858 6.7%
Schwerin 816 48,021 2.6 4.81 4.72 1.9% 5.8% 8.7% -2.9% 43.4 904 6.0%
Norden 795 50,217 3.2 5.44 5.23 4.0% 1.4% 2.3% -1.0% 52.0 1,035 6.2%
Top 20 total 36,671 2,203,036 136.8 5.51 5.38 2.4% 5.9% 7.0% -1.1% 2,582.1 1,172 5.3%
Other locations 21,424 1,343,047 82.7 5.58 5.45 2.5% 7.5% 8.7% -1.3% 1,444.8 1,076 5.7%
Total 58,095 3,546,082 219.5 5.54 5.40 2.5% 6.4% 7.7% -1.3% 4,026.9 1,136 5.5%
Capex, maintenance & modernisationIncreased capital expenditure leading to portfolio valuation upside and FFO accretion
9
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
Capex Maintenance
• Modernisation of the facade with exterior insulation and finish system and new windows
• Extension of the building with elevators
• Renewal of the entrance areas
• Modernisation of the fresh water with counter and sewage lines
• Modernisation of the stairways and electrical lines
• Roof renovation incl. improvement of thermal insulation
• Addition of a full floor with modern floor plans
Capex Maintenance
11.0 16.8
32.9 46.4
20.1 27.8
21.1
27.5
22.5
22.3
9.5
9.8 32.1
44.4
55.4
68.7
29.6
37.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
2015 2016 2017 2018 H1 2018 H1 2019
€m
4.35 5.62
10.46 12.11 11.28 15.59 8.40
9.18
7.15 5.81
5.31
5.49
12.7 14.8
17.6 17.9 16.6
21.1
0.00
5.00
10.00
15.00
20.00
25.00
2015 2016 2017 2018 H1 2018 H1 2019
€/sqm
DevelopmentsGrowth through selective development projects in A locations at attractive yields
10
■ 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)
Gerresheim (Glasmacherviertel)
Grafental I
Grafental II
Aachen (Tuchmacherviertel)
Berlin, Riverside Berlin, Schönefeld
Dresden, Trachau
Note: 1 Riverside / Wasserstadt Mitte, Berlin development project is currently valued at €392.8m and is due to be completed by the end of 2019. Further information on page 12
Berlin, Riverside¹
48%
Other developments
49%
Land bank3%
Total GAV€0.8bn
Developments breakdown
11
Developments currently under construction Future pipeline
Total construction costs
Düsseldorf, Gerresheim (Glasmacherviertel)Gross area: 187,000 sqmExpected construction costs: 2,300 €/sqmCurrent status: Land development plan in proposal
Düsseldorf, Grafenberg (Zauberberg)Gross area: 27,000 sqmExpected construction costs: 2,800 €/sqmCurrent status: Land development plan in proposal
Berlin, SchönefeldGross area: 304,000 sqmExpected construction costs: 2,400 €/sqmCurrent status: Land development plan in proposal
Dresden, TrachauGross area: 45,000 sqmExpected construction costs: 2,200 €/sqmCurrent status: Land development plan in proposal
Berlin, RiversideGDV: €454.2mUnits: 753
Düsseldorf, Grafental IGDV: 88% of units sold, remaining GDV €79.4mUnits: 855
Aachen, TuchmacherviertelGDV: €115.7mUnits: n/a
Düsseldorf, Grafental IIGDV: €409.7mUnits: 468
Riverside project (Wasserstadt Mitte)Inner-city district in the area between Berlin Central Station and the Government District
12
▪ Secured contract with general contractor▪ Strategically located in the government district close to Berlin’s main
station▪ Currently in ADLER’s balance sheet at €392.8m with 4.9% NIY▪ GDV at completion is €454.2m▪ Overall 753 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
13
Considerably improved financial metrics on the back of refinancing activities
3. Financial performance
Results H1 2019 – highlights
14
€ m H1 2019 H1 2018H1 2019 vs
H1 2018 (%)
Net rental income 127.2 109.1 16.6%
Earnings from property lettings (NOI) 112.5 96.5 16.6%
Adj. EBITDA 85.0 76.5 11.1%
FFO I 41.7 35.1 18.8%
▪ ADLER Real Estate has significantly improved its operational performance
Solid operational performance
€ m H1 2019 FY 2018H1 2019 vsFY 2018 (%)
Investment properties (incl. inventories) 5,008.2 5,077.1 -1.4%
EPRA NAV 1,805.1 1,692.3 6.7%
Adjusted diluted EPRA NAV (excl. goodwill) 1,754.2 1,639.0 7.0%
Equity ratio (%) 28.3% 27.0% 1.30 ppts
LTV (excl. convertibles) (%) - Net debt over GAV 58.7% 61.4% -2.70 ppts
WACD (%) 2.08% 2.23% -0.15 ppts
Strong performance track record
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
109.1 127.2
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2014 2015 2016 2017 2018 H1 2018H1 2019
€m
-1.1
16.1
27.3
40.5
74.2
35.1 41.7
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
2014 2015 2016 2017 2018 H1 2018H1 2019
€m
-0.03
0.25
0.39
0.51
0.94
0.44 0.53
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
2014 2015 2016 2017 2018 H1 2018H1 2019
€
358.1
783.9 971.9
1,230.5
1,639.0 1,754.2
0.0
500.0
1,000.0
1,500.0
2,000.0
2014 2015 2016 2017 2018 H1 2019
€m
9.10
12.24 13.79
15.37
20.77 22.23
0.00
5.00
10.00
15.00
20.00
25.00
2014 2015 2016 2017 2018 H1 2019
€
27.2
95.6
124.3 128.4
165.4
76.5 85.0
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 H1 2018H1 2019
€m
Sources of funding and debt profile
16
Debt maturity schedule Debt KPIs
LTV WACD ICR
Sources of funding
74.9% 73.7%
59.9% 59.4% 61.4%
58.7% 55.0%
40.0%
45.0%
50.0%
55.0%
60.0%
65.0%
70.0%
75.0%
80.0%
2014 2015 2016 2017 2018 H12019
2019target
LTtarget
50-55%
4.15% 3.99% 3.69%
2.72%
2.23% 2.08%
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 H1 2019
100.9 138.5
1,270.4
577.8 624.7
384.8
111.4
564.6
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
€m Total interest-bearing debt (€m) 3,744
Net LTV 58.7%
ICR 2.4x
Fixed / hedged debt 89.3%
Unsecured debt 59.3%
Weighted average cost of debt 2.08%
Weighted average maturity 3.9 years
Corporate credit rating (S&P) BB
Secured bank loans40.7%
Corporate bonds56.0%
Convertibles3.3%
1.30 1.43
1.59 1.71
2.33 2.45
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2014 2015 2016 2017 2018 H1 2019
Debt schedule
17
Current maturity profile
BV
H1 2019
€m
Volume
€mMaturity
Nominal
interest rateOther comments
Premature
redemptionRate, at which premature redemption is possible
Bonds
2017/21 497 500 06 Dec 21 1.50% Anytime ▪Under condition of make whole
2017/24 297 300 06 Feb 24 2.10% Anytime ▪Under condition of make whole
2018/23 492 500 27 Apr 23 1.90% Anytime ▪Under condition of make whole
2018/26 294 300 27 Apr 26 3.00% Anytime ▪Under condition of make whole
2019/22 396 400 17 Apr 22 1.50% Anytime ▪Under condition of make whole
Total 1,976 2,000 3.9 years 1.90%
Convertibles
2016/21 122 130 19 Jul 21 2.50%
Strike price of €12.55, no.
of potential ADLER shares
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 122 130* 2.1 years 2.50%
BCP bonds
Debenture A 30 30 Jul-20 4.80% Permitted ▪Under condition of make whole
Debenture B 51 48 Dec-24 3.29% Permitted ▪Under condition of make whole
Debenture C 40 38 Jul-26 3.30% Permitted ▪Under condition of make whole
Total 121 116 4.9 years 3.67%
Bank debt 1,525 1,527 4.0 years 2.10%
Total interest
bearing debt 3,744 3,773 3.9 years 2.08%
* Conversions are reflected
18
Trading at substantial discount to its EPRA NAV
4. ADLER Real Estate in the Capital Markets
Market cap and shareholder structure
19
Key metric In €
EPRA NAV/share (excl. goodwill), basic / diluted 26.36 / 22.23
Upside Potential vs. EPRA NAV/share (basic / diluted) c. 54% / 46%
Broker consensus for EPRA NAV/share (FY 2019, median) 20.63
Upside potential vs. broker consensus c. 41%
Share price (close as at 13 Aug 2019) 12.12
▪ ADLER is trading at significant discount to EPRA NAV with the broker community consensus upside of c.60% vs. current trading levels
Key broker recommendations Key trading considerations
ADLER Real Estate shareholders’ structure (31 July 2019)
Share information
Total voting rights 71,063,622
Treasury shares 1,603,232
Listed/Stock exchange Prime Standard/Frankfurt am Main
Indices: SDAX, CDAX, GPR General Index, DIMAX
3M / 6M ADTV 169k shares (€2.1m) / 157k shares (€2.0m)
Key share information (31 July 2018)
Company Recommendation Target (€) Date
Berenberg buy 17.40 May-19
Deutsche Bank buy 20.00 May-18
DZ Bank buy 16.80 Jul-19
Pareto Securities buy 22.00 Jul-19
HSBC buy 21.00 Jul-19
Kempen & Co. neutral 14.00 Jun-19
National Bank buy 18.00 May-18
ODDO buy 15.90 Aug-19
Consensus (median) 17.70
Mezzanine IX14.4%
Wecken14.7%
Fairwater13.5%
Thomas Bergander6.7%
Tresury Shares2.3%
Free Float48.4%
Anchor
shareholders
42.6%
20
Taking ADLER Real Estate to the next level
5. 2019 Guidance
ADLER Real Estate guidance and outlook 2019
21
ADLER Real Estate historical review and guidance
Key metrics 2017 2018Target FY 19
as at August 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% 6.0%
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 83-86
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 ✓ ✓
Guidance for vacancy updated from 5.0% to 6.0%
as a result of active portfolio management to
reduce delinquencies across the portfolio.
22
6. Appendix
ADLER Real Estate has shown a consistent track record of value creating M&A and successful integration
23Note: 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■ c. €6m of synergies identified already at announcement, with further potential gains in the medium-to-long term financing synergies through enhanced overall credit profile
Portfolioc. 2,400 units
Portfolioc. 8,500
units
ESTAVIS AGc. 2,100 units
Portfolioc. 4,300 units
2014
Portfolio 1,906 units
Westgrund AG Takeover offerc. 21,000 units
Ajax portfolioc. 2,700 units
Acquisition of 24.79% of ATX listed conwert Immobilien
Invest SE29,896 units
ADLER Real Estate announces a package
of measures to sustainably boost earnings strength
Portfolioc. 700 units
2015
Portfolioc. 6,750 units
Additional 5m shares in conwert
aquired
Stake in conwert sold to Vonovia SE
Portfolio160 units
Portfolioc. 200 units
Sale of 82% stake in ACCENTROc. € 180 mPortfolio
c. 2,500 units
Successful disposal of legacy Commercial assets
20172016 2018
Corporate Bond 14/19
€ 50 m
Capital increase in kind
€ 80 m
Tap 14/19Corporate Bond
€ 50 m
CapitalIncrease€ 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 Bond16/21
€ 137 m
Redemption Schuldscheindarlehen
€ 62 m
Redemption Schuldscheindarlehen
€ 30 m
Redemption Margin Loan
€ 200 m
Tap 14/19Corporate
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 offer
€ 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
c. 1,400 units(€61.5m)
Successful disposal of 3 of the BCP retail
assets3 retail assets
(€180.6m)
ADLER Real Estate management team
24
Tomas DE VARGAS MACHUCAChairman 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
operations since 2013■ 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 FRANKCOO, 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 RIENECKERChairman 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.
Group governance organisational chart
25
Lean Governance structure
ADLER REAL ESTATE AG Supervisory Board
Dr. D. Hoffmann,T. Schmid, C. Jorgensen
Accounting, Controlling & Treasury
Portfolio Management Bank Financing Investor RelationsLegalCorporate Governance
Compliance &Human Resources
A. Gotthardt
Member of the EC
M. Rienecker(Co-CEO,
Digitalization, Corporate Finance)
Management Board
S. Frank(COO,
Project Development)
T. de Vargas Machuca(Co-CEO,
Chairman of the EC)
Project Development
F. Sitta
Member of the EC
C. Wolff
Member of the EC
P. Hoffmann
Member of the EC
T. Kladnik
Member of the EC
S. Frank
Member of the EC
S. Frank
Member of the EC
Executive Committee (EC)
Profit and loss statement H1 2019
26
■ All items impacted by the acquisition of BCP
■ 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
CommentsOperating results increased
Insourcing impacts structure of expenses
Balance sheet as of 31 March 2019
27
Reflecting the company´s successful activities of financial consolidation Comments
■ Balance sheet extended by more than 40%
following acquisition of BCP
■ Increase in equity due to net retained profit
and acquisition of BCP
■ Current liabilities decreased as promissory
notes reclassified to current liabilities were
repaid
EPRA NAV bridge as of 30 June 2019
28
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 €1,754.2m as of H1 2019.
■ 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 €26.36 as of H1 2019 (FY 2018: €24.71).
■ Diluted EPRA NAV per share amounted to €24.40 as of H1 2019 (FY 2018: €22.94).
■ Adjusting for the goodwill in connection with the previous acquisitions, the diluted EPRA NAV per share stood at €22.23 (FY 2018: €20.77).
LTV bridge as of 31 March 2019
29
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 as of H1 2019 at 58.7%, decrease of 270bps compared to FY 2018 (excluding convertibles, i.e. assuming that the convertible bonds outstanding at the reporting date were converted into shares as they are trading in the money).
■ The acquisition of BCP in April 2018 had a significant influence on the temporary increase in LTV.
Financial calendar 2019
30
21 January 18th German Corporate Conference 2019 (UniCredit & Kepler Cheuvreux), Frankfurt
30 January Roadshow London
20 February 13th ODDO BHF German Conference (ODDO BHF), Frankfurt
19 - 21 February Mid/Small Cap Forum Asia (Lond Capital), Hong Kong & Singapure
7 - 8 March European Property Seminar New York (Kempen), NYC
28 March Annual report 2018
1 - 4 April European Roadshow (Brussels, Nordics, London, Zurich)
15 May Q1 2019 report
22 - 23 May 17th European Property Seminar (Kempen), Amsterdam
24 May 14th HSBC European Real Estate Conference (HSBC), Frankfurt
11 June Annual General Meeting 2019
16 - 21 June EPRA Asia Week (EPRA), Singapore, Hong Kong, Taipei, Seoul & Tokyo
22 - 25 July US Roadshow (NYC, Boston)
14 August H1 2019 report
2 - 6 September European Roadshow
9 September NYC Roadshow
10 - 12 September EPRA Conference (EPRA), Madrid
23 - 24 September 8th German Corporate Conference (Berenberg & Goldman Sachs), Munich
25 - 26 September 6th Annual German Corporate Conference (Baader Bank), Munich
8 - 11 October US Roadshow
14 November Q3 2019 report
2 - 5 December Berenberg European Conference (Berenberg), London
Disclaimer
31
This document and its contents are confidential and not meant for forwarding. transmission. publication. duplication. or disclosure (in whole or part) to other persons. Outside of Germany the distribution of this document may be restricted by 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.
Contact
32
ADLER Real Estate AG
Joachimsthaler Straße 34
10719 Berlin
www.adler-ag.com
Tel: +49 (0) 162 424 6833
E-mail: [email protected]
