Deutsche Wohnen AG.» H results. Conference Call, 14 August PDF

Description
Deutsche Wohnen AG» H results Conference Call, 14 August » Agenda 1 Highlights H Portfolio development & operations 3 Financials 4 Outlook 5 Q & A 2 » Highlights H » Highlights

Please download to get full document.

View again

of 28
All materials on our website are shared by users. If you have any questions about copyright issues, please report us to resolve them. We are always happy to assist you.
Information
Category:

Government & Politics

Publish on:

Views: 14 | Pages: 28

Extension: PDF | Download: 0

Share
Transcript
Deutsche Wohnen AG» H results Conference Call, 14 August » Agenda 1 Highlights H Portfolio development & operations 3 Financials 4 Outlook 5 Q & A 2 » Highlights H » Highlights H Operations (y-o-y) Very strong like for like rental growth +3.6% (Letting Portfolio Core + and Core) 1) Significantly increased NOI / sqm / month EUR 4.28 sqm (+5.4%) Value creation by strong privatization business 45% gross margin above book value Successful portfolio clean up 6% gross margin above book value Financials (y-o-y) EBITDA (adjusted) EUR 244m (+83%) FFO (w/o disposals) EUR (+88%) FFO (w/o disposals) per share EUR 0.40 (+5%) EPRA NAV per share EUR (+1.5% vs. Dec. 13) Integration of GSW AGM s of DW and GSW voted for the domination agreement, no objections were filed Exchange ratio offer of 7 Deutsche Wohnen shares for 3 GSW shares or guaranteed dividend of EUR 1.40 per share (net) Well on track in regard to cost savings and synergies: EUR 10m P&L effect in 2014 expected Guidance uplift Increased FFO guidance based on operations EUR 220m (+5%) 1) Incl. pro forma GSW portfolio last 12 months 4 » Portfolio development and operations 5 » Strong earnings and cash contributions from letting Earnings from letting: + EUR 120.4m (+86.4%) Cash flow + EUR 76m ( %) in EUR m H H Current gross rental income Non-recoverable expenses (6.8) (2.8) Rental loss (4.1) (2.1) Maintenance (39.6) (21.3) Others (3.2) (2.6) Earnings from Residential Property Management Personnel, general and administrative expenses (20.9) (12.7) Net Operating Income (NOI) NOI margin 76.2% 75.3% NOI in EUR / sqm / month in EUR m H H Net operating income (NOI) Cash interest expenses (90.5) (54.3) Cash flow from portfolio after cash interest expenses Interest cover ratio In-place rent: H1-14: EUR 5.62 / sqm Maintenance 1) H1-14: EUR 8.51 /sqm (H1-13: EUR 8.19 /sqm) additional EUR 19.1m for modernisation (EUR 4.11 /sqm in H1-14) NOI increased by EUR 112.2m (89%) due to 2013 acquisitions w/o EUR 1.9m for nursing and assisted living in H NOI-margin Improved mainly due to lower personnel and admin expenses NOI in EUR / sqm / month + 5.4% due to changes in portfolio structure resulting from GSW acquisition among others 1) extrapolated 12 months 6 » Overview of portfolio as at 30 June /06/2014 Residential units Strategic core and growth regions # Area 1) K sqm In-place rent 2) EUR/sqm Vacancy % Fair Value 3) (FV) EUR m Share in terms of FV % FV 4) EUR/sqm Multiple in-place rent Yield % Multiple market rent 145,367 8, ,686 99% Core + 118,142 7, ,313 83% Core 27,225 1, ,374 16% Yield % Non-core 2, % Disposal Other 2, Total 148,035 8, , % Dynamic Core + regions comprise 80% of total units and 83% of total fair value Attractive spread between multiples of in-place rent and market rent offering further potential for NAV-growth Very successful ongoing disposal of non-core portfolio 1) Only residential area 2) Contractually owed rents from rented apartments divided by rented area 3) Fair Value including residential, commercial and parking spaces 4) Fair Value divided by residential and commercial area 7 » Pro forma like for like overview of portfolio as at 30 June 2014 In-place rent (like-for-like) and vacancy (like-for-like) 2) Like-for-like 30/06/2014 Strategic core and growth regions (letting portfolio) Residential units # In-place rent 1) 30/06/2014 EUR/sqm In-place rent 1) 30/06/2013 EUR/sqm in % y-o-y Vacancy 30/06/2014 in % Vacancy 30/06/ , % 2.2% 2.5% Core + 109, % 2.0% 2.2% Greater Berlin 100, % 2.1% 2.2% Rhine-Main 8, % 1.7% 2.5% Rhineland 1, % 2.9% 2.6% Core 22, % 3.0% 3.8% Hanover / Brunswick / Magdeburg 10, % 3.7% 5.4% Rhine Valley South 4, % 1.1% 1.6% Rhine Valley North 2, % 1.3% 1.3% Central Germany 3, % 3.7% 3.6% Others 1, % 6.0% 5.4% in % Strong rental growth in our strategic core and growth regions Core + regions with compelling rental growth (l-f-l) and a very low vacancy rate stars Driven by new-letting rents and execution of Berlin rent index ( Mietspiegel ) Core regions with accelerating rental growth (l-f-l) and a low vacancy rate cash cows Total like-for-like rental growth of 3.4% y-o-y for 141,468 residential units 1) Contractually owed rent from rented apartments divided by rented area 2) Including GSW 8 » Dynamic rent potential in Core + regions (letting portfolio) 1) 3) New-letting rent in In-place rent in EUR/sqm Rent potential EUR/sqm 2) New-letting contracts 4) Core % ,142 Greater Berlin % ,534 Rhine- Main % Rhineland % Current tenant turnover: 7% annualised in Core + Regions Note: incl. acquisition 1) Contractually owed rent from rented apartments divided by rented area 2) Contractually owed rent for newly concluded contracts for units not subject to rent control effective in 2014 respectively 3) Rent potential = New-letting rent compared to in-place rent 4) Unrestricted units as at 30/06/2014 9 » Focused and sustainable investments in the portfolio Maintenance and modernization H H EUR m EUR/sqm 1) EUR m EUR/sqm 1) Maintenance Modernization Total We continue to target a high level for maintenance and modernization on the basis of portfolio analysis to ensure our quality standards for a sustainable portfolio. H H H maintenance in EUR/sqm modernization in EUR/sqm 1) Based on the quarterly average area; extrapolated 12 months 10 » NAV contribution by strong disposal business Closed in EUR m H H Sales proceeds Cost of sales (6.0) (3.8) Net sales proceeds Free cash flow from sales activities of EUR 71.5m (1,133 closed privatization units and 1,119 closed units institutional sales) Carrying amounts of assets sold (106.8) (46.7) Earnings from Disposals Privatization (closed) (gross margin & sales price / sqm) Non-core properties (units) 35% 1,096 48% 44% 1,183 1,198 5,304 Portfolio clean-up almost completed: only 473 units for disposals left in the non-core portfolio (H1-2013: 2,154 units) 2,668 30/06/ /06/ /06/2014 EUR/sqm Margin 30/06/ /06/ » Signed units for privatization business & non-core disposals Signed with expected closing in ) Units Transaction volume Fair value Gross Margin # EUR m EUR m EUR m % 2) Privatization 1, % Institutional sales 1, % Thereof non-core properties 1, % 71% of privatization business from condominium sales in Berlin Ongoing and successful focus on disposals in none-core regions In total 3, % Berlin: Papageienviertel Hanover: Bemerode/Kronsberg Berlin: Hufeisensiedlung Berlin: Steglitz 1) Incl. overhang ) (Transaction volume divided by Fair Value)-1 12 » Nursing and Assisted Living increasing FFO contribution in EUR m H H Income Nursing Living Other Total income Costs 30/06/2014 Facilities Places Greater Berlin 12 1,442 Saxony Others In total 21 2,174 Average Occupancy Nursing and corporate expenses (8.9) (7.2) Staff expenses (16.6) (14.3) Total costs (25.5) (21.5) Earnings from Nursing and Assisted Living Cash interest expenses (1.9) (1.7) FFO contribution /06/ /06/ of 21 facilities are owned by Deutsche Wohnen with Fair Value of the properties of EUR 144.9m More than 50% of targeted earnings achieved in H » Financials 14 » Benchmark EBITDA margin among the Peer Group in EUR m H H Earnings from Residential Property Management EBITDA margins H H adj. EBITDA / gross rents 77.9% 79.1% Earnings from Disposals Earnings from Nursing and Assisted Living adj. EBITDA excl. disposals / gross rents 69.7% 71.8% Segment contribution margin Corporate expenses (45.8) (22.2) Other operating expenses/income (7.5) (2.9) EBITDA Restructuring & Reorganization expenses EBITDA (adjusted) Further improvements of EBITDA margins will occur with full realization of takeover synergies Cost Ratio 1) 14.6% in H vs. 17.3% FY-2013 (proforma incl. GSW) Redundancy payments Adj. EBITDA Increased by ~ EUR 111m mainly attributable to an increase of earnings from letting ~ EUR 120m and from disposals ~ EUR13m Margins EBITDA Margins underline the strengths of the portfolio and the operating platform 1) Corporate expenses (EUR 45.8m) divided by current gross rental income (EUR 313.4m) 15 » Adjusted EBT increased by ~ 104% (y-o-y) in EUR m H H EBITDA (adjusted) Depreciation (3.2) (2.7) 2) 2) Financial result (net) (99.6) (61.0) EBT (adjusted) Restructuring & Reorganization (3.7) 0.0 Valuation SWAP and Convertible Bond (24.0) (0.0) EBT Current taxes (8.5) (5.6) Deferred taxes (10.4) (13.5) in EUR m H H Interest expenses (92.4) (56.0) Non-cash interest expenses (7.7) (5.5) (100.1) (61.5) Interest income Financial result (net) (99.6) (61.0) Thereof EUR (14.3)m from valuation of swaps and EUR (9.7)m from convertible bond MV of convertible bond (30/06/2014): EUR 258.3m Profit Earnings per share 1) ) Based on weighted average shares outstanding (H1-14: m; H1-13: m) 2) Adjusted for Valuation of SWAP and Convertible Bond 16 » Recurring FFO per share performance +5.3% (y-o-y) in EUR m H H Profit Earnings from Disposals (25.6) (12.3) Depreciation Valuation SWAP and Convertible Bond Non-cash financial expenses FFO development in EUR m ) Deferred taxes Tax benefit from capital increase FFO attributable to non-controlling interest (3.8) 0.0 Restructuring & Reorganization expenses FFO (w/o disposals) % % Earnings from Disposals ) 12.3 FFO (incl. disposals) FFO (w/o disposals) per share 1) FFO (incl. disposals) per share 1) H H H Earnings from disposals FFO (w/o disposals) Accretive FFO (w/o disposals) per share development: +5.3% (y-o-y) 1) Based on weighted average shares outstanding (H1-14: m; H1-13: m) 2) Adjusted for non-controlling interest 17 » Integration of GSW well on track in EUR m H H (pro forma) Earnings from Residential Property Management Earnings from Disposals Earnings from Nursing and Assisted Living Corporate expenses (45.8) (51.9) Other (3.8) (1.1) Savings of EUR 6m in corporate expenses demonstrate the progress achieved in 6 months time EBITDA (adjusted) FFO (w/o disposals) FFO (w/o disposals) per share Successful AGM with vast majority of votes FOR the domination agreement As no objections were filed the registration is expected to occur in September Advanced negotiations with GSW works council Closing of holding functions scheduled for end of » Balance sheet Assets Equity and Liabilities in EUR m 30/06/ /12/2013 Investment properties 8, ,937.1 Other non-current assets Deferred tax assets Non current assets 9, ,772.5 Land and buildings held for sale Other current assets Cash and cash equivalents Current assets Total assets 10, ,173.1 in EUR m 30/06/ /12/2013 Total equity 3, ,944.3 Financial liabilities 4, ,154.6 Convertible Tax liabilities Deferred tax liabilities Derivatives Other liabilities Total liabilities 6, ,228.8 Total equity and liabilities 10, ,173.1 Investment properties represent ca. 90% of total assets Strong cash position and available credit lines give comfort for potential acquisition opportunities LTV reduced to 56.2% (FY-2013: 57.3%) 19 » EPRA NAV per share up by 1.5% in EUR m 30/06/ /12/2013 in EUR m 30/06/ /12/2013 Equity (before non-controlling interests) Fair value adjustment of convertible bond Fair values of derivative financial instruments 3, , (2.2) EPRA NAV per share in EUR (undiluted) Adjusted NAV per share in EUR (undiluted) Shares outstanding in m Deferred taxes (net) EPRA NAV (undiluted) 4, ,004.7 Goodwill (491.6) (491.6) Adjusted NAV (undiluted) 3, ,513.1 EPRA NAV per share Increased by 1.5% to EUR as at 30 June 2014, despite dividend payment Adjusted NAV Reflects (i.e. deducts) the goodwill from GSW transaction 20 » Outlook 21 22» Guidance 2014 (increase) 1 FFO (w/o disposals): EUR 220m 1) FFO expected (increase from EUR 210m 1) ) 2 Anticipation of EUR 5m expenses for re-letting in context with the delayed implementation of the expected new rent regulations ( Mietpreisbremse ) 3 Synergies: EUR 10m to be realised in Dividend policy: 60% of FFO (w/o disposals) 5 Opportunistic portfolio strategy: accretive acquisitions and disposals will continue 1) Before minorities » Q & A 23 » Appendix 24 » LTV at 56.2%; low average interest rate ~ 3.4% Debt structure Financial liabilities in EUR m Mark-to-market 5,243.5 LTV (%) 56.2% Nominal value 5,331.4 LTV (%) 57.1% Avg. interest rate incl. Convertible bond: ~ 3.4% Debt service Avg. mandatory redemptions p.a.: ~ 1.6% Avg. weighted maturity: ~ 7.7 years Interest rate fixed or hedged: ~ 90% Long-term maturities profile EUR m nominal values ) = Significant potential from due refinancing available in order to enhance FFO profile through a decrease of existing interest rate levels 1) Convertible Bond 25 » Details on regions of portfolio as at 30 June / 0 6 / R e s i d e n t i a l Sh a r e i n t e r ms C o mme r c i a l P a r k i n g u n i t s o f u n i t s A r e a I n - p l a c e r e n t 1) V a c a n c y u n i t s s p a c e s # i n % k s q m E U R / s q m i n % # # T o t a l 148, % 8, % 2,101 31,244 S t r a t e g i c c o r e a n d g r o w t h r e g i o n s 145,367 98% 8, % 2,066 30,373 Letti ng P or tf ol i o 138,956 94% 8, % 1,954 27,915 P r i vati sati on 6,411 4% % 112 2,458 C o r e + 118,142 80% 7, % 1,848 20,461 Letti ng P or tf ol i o 113,769 77% 6, % ,541 P r i vati sati on 4,373 3% % Gr eater B er l i n 107,361 73% 6, % 1,635 14,834 Letti ng P or tf ol i o 104,016 70% 6, % 1,589 14,168 P r i vati sati on 3,345 2% % Rhi ne-m ai n 8,966 6% % 177 4,904 Letti ng P or tf ol i o 8,084 5% % 121 4,007 P r i vati sati on 882 1% % Rhi nel and 1,815 1% % Letti ng P or tf ol i o 1,669 1% % P r i vati sati on 146 0% % C o r e 27,225 18% 1, % 218 9,912 Letti ng P or tf ol i o 25,187 17% 1, % 216 9,374 P r i vati sati on 2,038 1% % Hanover / B r unswi ck/ M agdebur g 11,010 7% % 111 2,755 Letti ng P or tf ol i o 10,210 7% % 110 2,500 P r i vati sati on 800 1% % Rhi ne V al l ey South 4,831 3% % 41 3,330 Letti ng P or tf ol i o 4,650 3% % 41 3,183 P r i vati sati on 181 0% % Rhi ne V al l ey Nor th 2,947 2% % 3 2,113 Letti ng P or tf ol i o 2,845 2% 184 5,21 1.4% 3 2,007 P r i vati sati on 102 0% % Centr al Ger many 5,720 4% % 55 1,157 Letti ng P or tf ol i o 5,720 4% % 55 1,157 P r i vati sati on 0 0% % 0 0 Other s 2,717 2% % Letti ng P or tf ol i o 1,762 1% % P r i vati sati on 955 1% % 1 30 N o n - C o r e 2,668 2% % Di sposal s 473 0% % Other 2, 195 1% % ) Contractually owed rents from rented apartments divided by rented area 26 » Disclaimer This presentation contains forward-looking statements including assumptions, opinions and views of Deutsche Wohnen or quoted from third party sources. Various known and unknown risks, uncertainties and other factors could cause actual results, financial positions, the development or the performance of Deutsche Wohnen to differ materially from the estimations expressed or implied herein. Deutsche Wohnen does not guarantee that the assumptions underlying such forward-looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecasted developments. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and accordingly, none of Deutsche Wohnen AG or any of its affiliates (including subsidiary undertakings) or any of such person s officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Deutsche Wohnen does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation. 27 Deutsche Wohnen AG Registered Office Pfaffenwiese Frankfurt/ Main Berlin Office Mecklenburgische Straße Berlin Phone: Fax: Deutsche Wohnen AG 28
Related Search
We Need Your Support
Thank you for visiting our website and your interest in our free products and services. We are nonprofit website to share and download documents. To the running of this website, we need your help to support us.

Thanks to everyone for your continued support.

No, Thanks