Adler Group S.A. reports solid operational performance in Q1 2022

• Like-for-like (“LFL”) rental growth of +2.1% YoY, with a vacancy rate of 1.2% remaining at a very low level
• Net rental income in first quarter 2022 at €71.1m, FFO 1 at €29.7m
• Strong cash position of €760m at end of Q1 2022
• Execution of portfolio disposals well on track with 97% of assets closed and transferred to KKR
• FY 2022 guidance confirmed with net rental income expected in range of €203-212m, FFO 1 expected in range of €73-76m

Luxembourg, 30 May 2022: Adler Group S.A. (“Adler Group”) reports a solid operational performance in the first three months of the fiscal year 2022. While the significantly reduced size of the yielding portfolio translated into correspondingly lower figures for funds from operations (FFO 1) and EBITDA from rental activities, the EBITDA margin from rental activities showed an increase compared to Q1 2021. “The earnings quality and substance of our existing portfolio have been noticeably enhanced by the portfolio transactions realised in recent months", commented Thierry Beaudemoulin, CEO of Adler Group.

The first quarter of 2022 continued to show a strong performance of the yielding portfolio. Net rental income was at €71.1m compared to €84.3m in the first quarter of 2021, while the residential portfolio was significantly reduced due to the completed disposal of c. 15,500 rental units to LEG. The ongoing sale of c. 14,400 rental units to KKR/Velero is now 97% completed[1], but did not yet impact net rental income in the first quarter of the year.

Funds from operations from rental activities (FFO 1) totalled €29.7m as a result of sales, compared to €32.3m in the same period of 2021. This corresponds to a FFO 1 per share of €0.25 (Q1 2021: €0.28).

EBITDA from rental activities was down to €48.6m from €54.2m in Q1 2021, as a result of sales. The operational margin improved EBITDA margin of 68.5%, compared to 64.3% in the same period 2021 following the recent portfolio optimization. 

The average rent of the core rental portfolio[2] increased slightly to €7.46/sqm/month at reporting date, representing a like-for-like rental growth of 2.1% on a 12-months-base. At 1.2% as of 31 March 2022, the vacancy rate of the portfolio remained at historical low levels compared to 1.1% as of 31 December 2021.

Year-to-date, the yielding portfolio experienced a LFL value uplift of +8.6% YoY, bringing the average fair value to €3,060/sqm, a value 58% higher than a year ago, reflecting the high-quality Berlin anchored portfolio remaining post the non-strategic disposals. In total, during the first quarter, a revaluation gain of €79m was realised on the yielding asset portfolio.

In Q1 2022, the condominium and forward sales projects Stuttgart-Dreizeit and Leipzig-Magnolia were handed over to the buyers amounting to a GAV of €71m.

As of 31 March 2022, the fair value of the entire real estate portfolio including developments amounted to €10.1bn (year-end 2021: €10.0bn). The EPRA NTA as of 31 March 2022 amounted to €4,198m or €35.72 per share, compared to €4,269m / €36.33 per share as of 31 December 2021.

Due to further proceeds from disposals of investment properties, the liquidity position of Adler Group grew by more than €200m over the last three months to a very solid figure of €760m as of 31 March 2022.

The Loan-to-Value (LTV) ratio of Adler Group marginally increased to 52.0% (50.9% as of end 2021). More than half of the debt expirations in 2022 are repaid on schedule or extended, including the €400m Adler Real Estate bond which matured in April 2022.

Outlook 2022 reiterated: net rental income in the range of €203-212m

Following significant disposals made from the yielding asset portfolio, Adler Group expects to generate net rental income for the full year 2022 in the range of €203-212m and FFO 1 in the range of €73-76m.

Earnings call

An Analyst & Investor webcast and conference call will be held on Tuesday, 31 May 2022, at 11 am CET.

PLEASE USE THIS LINK FOR THE WEBCAST:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=28WbUBRP

Contact

Investor Relations:
T +352 278 456 710
F +352 203 015 00
E investorrelations@adler-group.com

^[1] As of 30 May 2022
^[2] Excluding assets classified as held for sale