Q1 2019 Results Presentation - Consus Real Estate AG 19 June 2019
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Q1 2019 Results Presentation
Consus Real Estate AG
19 June 2019Disclaimer
This presentation (“Presentation”) was prepared exclusively by Consus Real Estate AG (“Consus”) solely for informational purposes and has not been independently verified and
no representation or warranty, express or implied, is made or given by or on behalf of Consus. Nothing in this Presentation is, or should be relied upon as, a promise or
representation as to the future.
This Presentation does not constitute or form part of, and should not be construed as, an offer or invitation or inducement to subscribe for, underwrite or otherwise acquire, any
securities of Consus, nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Consus, nor shall
it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever.
Certain statements in this Presentation are forward-looking statements. These statements may be identified by words such as "expectation", "belief', "estimate", "plan", "target“ or
"forecast" and similar expressions, or by their context. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual
results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the
outcome and financial consequences of the plans and events described herein. Actual results may differ from those set forth in the forward-looking statements as a result of
various factors (including, but not limited to, future global economic conditions, changed market conditions affecting the industry, intense competition in the markets in which
Consus operates, costs of compliance with applicable laws, regulations and standards, diverse political, legal, economic and other conditions affecting Consus’ markets, and other
factors beyond the control of Consus). Neither Consus nor any of its respective directors, officers, employees, advisors, or any other person is under any obligation to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements,
which speak of the date of this Presentation. Statements contained in this Presentation regarding past trends or events should not be taken as a representation that such trends or
events will continue in the future. No obligation is assumed to update any forward-looking statements.
This document contains certain financial measures (including forward-looking measures) that are not calculated in accordance with IFRS and are therefore considered "non-IFRS
financial measures". Such non-IFRS financial measures used by the Consus are presented to enhance an understanding of the Consus's results of operations, financial position or
cash flows calculated in accordance with IFRS, but not to replace such financial information. A number of these non-IFRS financial measures are also commonly used by securities
analysts, credit rating agencies and investors to evaluate and compare the periodic and future operating performance and value of other companies with which the Consus
competes. These non-IFRS financial measures should not be considered in isolation as a measure of the Consus’s profitability or liquidity, and should be considered in addition to,
rather than as a substitute for, net income and the other income or cash flow data prepared in accordance with IFRS. In particular, there are material limitations associated with the
use of non-IFRS financial measures, including the limitations inherent in determination of each of the relevant adjustments. The non-IFRS financial measures used by the Consus
may differ from, and not be comparable to, similarly-titled measures used by other companies.
Certain numerical data, financial information and market data (including percentages) in this Presentation have been rounded according to established commercial standards.
Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts.
Accordingly, neither Consus nor any of its directors, officers, employees or advisors, nor any other person makes any representation or warranty, express or implied, as to, and
accordingly no reliance should be placed on, the fairness, accuracy or completeness of the information contained in the Presentation or of the views given or implied. Neither
Consus nor any of its respective directors, officers, employees or advisors nor any other person shall have any liability whatsoever for any errors or omissions or any loss
howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection there-with. It should be noted that certain financial
information relating to Consus contained in this document has not been audited and in some cases is based on management information and estimates.
By receiving this Presentation, you agree to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities
laws. This Presentation does not constitute investment, legal, accounting, regulatory, taxation or other advice.
Consus Real Estate AG 2Agenda
Section Page
I. Q1 2019 Operational and Financial Highlights 4
II. Development Portfolio Update 7
III. Financial Results Q1 2019 14
IV. Outlook 24
V. Appendix 27
Consus Real Estate AG 3Titel
I. Q1 2019 Operational and Financial Highlights
Consus Real Estate AGI. Q1 2019 Operational and Financial Highlights
✓ Development of GDV: total €9.6bn(1)
✓ Market Gross Asset Value of €3.07bn (31 December 2018: € 2.95bn)
Portfolio
✓ Forward Sales Q1 2019: three projects with total of €170m signed
Highlights
✓ LOI signed Q1 2019: one additional project with a GDV of €68m with LOI signed
✓ Upfront sales: expecting €1.8bn of GDV to rebalance portfolio and reduce leverage and cost of debt
– Project “416” in Leipzig sold with a GDV of €884m, expected Q3 closing
✓ Successful start to first quarter 2019
– Total income increased by 36% to €118m, overall performance of €132m
– Adjusted EBITDA (pre-PPA and one-offs) for Q1 2019 of €46.1m (Q1 2018: €38.9m)
Financial – Adjusted EBITDA pro forma LTM of €260m as of Q1 2019 (Q4 2018: €253m)
Highlights
– Net debt at €2,171m (31 December 2018: €2,104m)
– Net debt / adjusted EBITDA pro forma LTM remained unchanged at 8.3x
– Net debt / Market GAV reached c. 71%, unchanged compared to end of last year
(1) As of 31 March 2019. Includes three projects signed but not yet closed. On a 100% basis
Consus Real Estate AG 5I. Recent Developments after Reporting Date
✓ Real estate market update: Berlin Senate approves outline for freezing rental prices for
five years – not expected to have material impact on Consus business model due to focus on
new built residential
✓ New acquisitions: Signed purchase agreements for three new development projects
with GDV of €993m, closing of transactions expected within the second half of 2019
Recent ✓ Forward sales 2019 YTD: additional two projects with a GDV of €226m with LOI in negotiation
developments
✓ Year to date €2.7bn(2) of forward sales contracted/LOI (c. 28% of GDV)
✓ Successful placement of a €400 million senior secured corporate bond with
coupon of 9.625%, duration of five years (until 2024) and a non-call period of two years,
rated B-/B from Standard & Poor's (S&P) and Fitch Ratings
✓ Corporate rated B from Standard & Poor’s and Fitch
✓ Target €450m Adjusted EBITDA in 2020
Outlook ✓ Target Net Debt / Adjusted EBITDA of c.3x in the medium term
confirmed ✓ Target Adjusted EBITDA margin of 20%
(1) As of 31 March, 2019, Includes three projects signed but not yet closed. On a 100% basis
(2) Incl. LOIs of €68m and LOI under negotiation of €498m and pre-sold condominiums of €151m
Consus Real Estate AG 6Titel
II. Development Portfolio Update
Consus Real Estate AGII. Consus Demonstrated Ongoing Ability to Successfully Acquire
and Sell Projects (2) (3)
Consus continues to acquire attractive development projects… ....still in ramp-up phase as of 03/31/2019
Development portfolio under construction
€bn
(1,2) (3) 30% by 25% by
10 9.6 1,0
GDV Net Floor Area
(~40-50% Net
9 GDV: target) Floor Area:
- 0,9 €9.6bn(2)
2.1m m2 (2)
8 3,5
7
0,9
6
0,7 …with well-diversified portfolio across top 9 cities in Germany
5
Breakdown of the development portfolio by city (4)
4 Munich Dresden
Dusseldorf 5% 4%
4% Hamburg
3 20%
Cologne
4,6 11%
2 64 projects
in total(1) Stuttgart
Leipzig
18%
1 13%
Frankfurt Berlin
0 13%
GDV as of Organic Organic SSN GDV as of Closing New 12%
Dec 2017 acquisitions acquisitions acquisition March 2019 upfront sale acquisitions
H1 2018 H2 2018 Q3 YTD
(1) As of March 31, 2019, Includes three projects signed but not yet closed. On a 100% basis (2) Post GDV reduction by €122m through sales of Xberg and HAU BT 4-6 in December 2018 (3) Includes three new acquisitions of
Duesseldorf, Benrather Gärten with a GDV of €763m, Cologne Area, Wachendorff Quartier with a GDV of €147m and Erfurt, Braugold with a GDV of €82m (4) 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
Consus Real Estate AG 8II. Unique and Flexible Forward Sales Business Model
Portfolio with increased share of Forward Sales Forward sales multiple achieved on recent transactions
Project City Year multiple
Outright sale/- LOI signed
Cologneo I Corpus Cologne 2018 25.9x
18%
Vitopia Kampus Kaiserlei (G, H) Frankfurt 2018 25.3x
Carré Löbtau Dresden 2018 24.0x
Target Forward Sales
Condominium strategy GDV: 35%
Ernst-Reuter-Platz Berlin 2017 22.8x
20%
€9.6bn(1)
Institutional purchasers in 2018 + 2019 YTD
80% with forward sales
approach; 33% of which is
already forward sold or
under LOI(2)
Forward Sold(2)
26%
Condo sales
6%
LOI signed
3%
LOI under €2.7bn YTD
negotiation
20% €2.5bn(2) (28% of total GDV)
Forward sold
71%
(1) As of March 31, 2019, Includes three projects signed but not yet closed. On a 100% basis
(2) Incl. LOIs of €68m and LOI under negotiation of €498m and pre-sold condominiums of €151m as of March 31, 2019
Consus Real Estate AG 9II. Overview of Total Forward Sales/LOI Year to Date
The forward sales and condominium business models allow for strong cash flow visibility, while minimising development risk
I 03/31/2019 YTD
» Letter of intent in negotiation with institutional purchasers
Letter of intent » Expected to be converted in signed letter of intent within 3-6 months and 8 ~€500m ~€660m
in in signed forward sale agreements within 6-12 months
projects GDV GDV
negotiation
institutional purchasers
II » Two additional LOIs in negotiation increasing the total to 10 projects
Projects sold to
» Signed letter of intent with institutional purchasers, expected to be 1 ~€70m ~€70m
converted into forward sale agreements within 3-6 months project GDV GDV
Letter of intent
signed
III
» Signed binding agreements between Consus and institutional purchasers
» Up to c.30% upfront cash payment received upon signing 18 ~€1,800 ~€1,800
Forward Sales projects m GDV m GDV
» Future cash inflows under forward sale agreements upon achieving
Signed defined milestone
IV » Signed projects sold to retail purchasers rather than institutional purchasers
Units sold to
» 30% upfront payment received on signing up forward purchasers for the ~€150m ~€160m
retail
Condo Sales 6
condominium projects GDV GDV
Started
» Focused on higher value properties where materially higher prices can be
achieved from retail sales
€2.7bn GDV forward sold or under LOI YTD allows for strong visibility on future €2.5 bn €2.7 bn
performance
Consus Real Estate AG 10II. Forward Sales Q1 2019
Consus continues to execute on forward sales pipeline
Forward Sales Development /
City / Project KPIs Pictures Acquisition Construction Delivery
Sale Date Status Forward sale
GDV €57m
Forward » A well-known institutional purchaser acquired the ‘Ostplatz’ project in Leipzig
Leipzig, Completion 2020
Q1’19 Sold for for €64m with an additional upside of up to €16m (+25%) if rents above current
Ostplatz Asset type Mixed
c. €64m market rent will be achieved
Area (k sqm) 17
GDV €68m Forward » Centrally located in Berlin-Charlottenburg, this modern office building with
Berlin, Completion 2020 Sold with around 11,000 m2 of rental office will be certified with the highest sustainability
Q1’19
Franklinstr. Asset type Commercial upside of criteria, “LEED Gold”. This project was forward sold to BNP Paribas REIM in
Area (k sqm) 11 up to 26% February 2019.
GDV €884m
» Consus sold the project to a real estate developer with significant EBITDA pre-
Leipzig, Completion Sold Upfront
Q1’19 PPA realised to balance its portfolio across Germany. The purchase price
Project 416 Asset type Mixed sale
reflects the current status of the development.
Area (k sqm) 268
GDV €41m
Leipzig, Forward
Completion 2021 » Consus forward sold this development project in fast growing Leipzig to a well-
Q1’19 Dessauer-/ Sold for
Asset type Mixed known institutional purchaser.
Hamburger Str. c. €40m
Area (k sqm) 12
Consus Real Estate AG 11II. Forward Sales/LOI Update 2019 - Selection of Projects
Forward Sales Development /
City / Project KPIs Pictures Acquisition Construction Delivery
Sale Target Status Forward sale
GDV €68m
Dresden,
Completion 2021 » LOI of a forward sale signed in February 2019 for a €68m residential
Q3’19 Palaisplatz LOI signed
Asset type Residential development in a prime location of Dresden
Neubau
Area (k sqm) 15
Stuttgart GDV €47m
» LOI in negotiation for a development with 107 city apartments in the Stuttgart
region, Completion 2021
Q3’19 LOI in neg. region for approx. €47m. Böblingen is home to the largest Mercedes-Benz
City-Carré Asset type Mixed
factory globally.
Böblingen Area (k sqm) 9
GDV €101m
Hamburg, Completion 2021 » LOI in negotiation for a residential development in the popular district
Q3’19 Von-Sauer- LOI in neg. Hamburg-Altona with 281 apartments, commercial spaces and underground
Asset type Mixed
Straße parking for approx. €101m.
Area (k sqm) 19.1
GDV €30m
» LOI in negotiation for a residential development in the Erfurt city center with
Erfurt, Completion 2022
Q3’19 LOI in neg. 120 1- to 3-room apartments, two commercial units and about 50 parking
TAP Hochhaus Asset type Residential
spaces.
Area (k sqm) 7.1
GDV €111m » This 107m landmark tower will be home of 192 apartments. The addition of
Stuttgart area, Completion 2020 one floor to the hotel (building permit already available) has increased the
Q4’19 Schwabenland- LOI in neg.
Asset type Mixed number of hotel rooms to 164. Completion of the tower and hotel by the end of
tower
Area (k sqm) 15.9 2020.
Berlin, GDV €98m » Just 5.5 km from Berlin city center, in the family-friendly district of Pankow, the
Staytion Completion 2021 shopping and commercial center Staytion Berlin-Pankow, formerly Forum
Q4’19 LOI in neg. Pankow will be developed. CG Gruppe is constructing a total of seven new
(Forum Asset type Mixed
Pankow) Area (k sqm) 18.8 buildings to create a mixed neighborhood.
GDV €125m » At one of Düsseldorf's main transport hubs, a sophisticated new Quartier will
Duesseldorf, Completion 2022 be developed. Apartments for different target groups are being built. Future
Q4’19 Upper Nord LOI in neg.
Asset type Mixed residents will benefit from the convenient location and excellent connections to
Quartier
Area (k sqm) 24.6 the city center, airport and surrounding area.
Consus Real Estate AG 12II. New Development Project Acquisitions
Acquisitions agreed in Q2 YTD demonstrate ability to source attractive projects. Closing expected in H2 2019
Development /
City / Project KPIs Pictures Acquisition Construction Delivery
Forward sale
GDV €147m
» Development of a new city quartier in Bergisch Gladbach. Planning comprises 7
Cologne area, Completion 2023 residential complexes, a nursing home and boarding house, assisted living, a
Bergisch Gladbach
Asset type Mixed Kindergarten, a district center and a parking garage with about 110 parking
Wachendorff Quartier
spaces.
Area (k sqm) 31
GDV €763m
Duesseldorf, Completion tbd » Large quartier development in Duesseldorf-South on a 149k sqm plot of land
Benrather Gärten Asset type Mixed with excellent connections to the city center, airport and surrounding area.
Area (k sqm) 149
GDV €82m
Erfurt, Completion 2023 » Residential quartier development in an old brewery location with close proximity
Braugold Quartier Asset type Residential to one of Germany´s most important high-speed train terminal
Area (k sqm) 17
Total GDV: 993m
Potential acquisitions continually being evaluated
to replace projects sold/developed
Consus Real Estate AG 13Titel
III. Financial Results Q1 2019
Consus Real Estate AGIII. Q1 2019 Key Group Metrics
Key Income Statement Figures Key Balance Sheet & Cash Flow Figures
Q1 2018 Q1 2019 as of 03/31/2019
Net Debt €2,171m
Total
€87.1m €118.4m
Income
Market
€3,067m
Gross Asset Value
Adjusted
€38.9m €46.1m
EBITDA(1) Operating
€(19.2)m
Cash Flow
Prepayments
€52.2m
Received
Financial Result €(20.1)m €(39.6)m
Net Debt /
PF Adjusted 8.3x
EBITDA(1)
Consolidated
€4.9m €(9.9)m
Net Income Net Debt /
71%
Market GAV
(1) EBITDA adjusted for Purchase Price Allocation (“pre-PPA”) and one-off expenses
Consus Real Estate AG 15III. Consolidated Q1 2019 Financials – Income Statement
Income Statement Comments
1.• Revenue of €118.4 million reflected
in k € Q1 2018 Q1 2019
Income from letting activities 11,398 3,342 progress in development including two
Income from property development 75,661 113,788 institutional forward sales
Income from service, maintenance and management activities - 1,282
Total income 87,059 1. 118,413
2.• Change in project related inventory
Change in project related inventory 1,280 13,649
provides net impact of positive project
Overall performance 88,339 2. 132,062
Expenses from letting activities development pre sale and negative
(3,869) (2,389)
Cost of materials (37,621) (69,553) impact of forward sales
3.
Other operating income 986 5,203
Personnel expenses (6,720) 3. (13,822) 3.• Growth in costs reflects growth in
Other operating expenses (12,558) 3. (24,630) business including SSN acquisition and
EBITDA 28,557 4. 26,869 corporate transactions
Depreciation and amortization (513) (1,470)
EBIT 28,044 4. 25,400
Financial income 6,047 11,813 4.• Reported figures depressed by PPA
Financial expenses (26,128) (51,401) impact of €18.1m
5.
EBT 7,963 (14,188)
5.• Financial expenses reflect acquisition of
Income tax expenses (3,068) 4,257
Consolidated Net income 4,894 4. (9,932) SSN. Financial income positively
impacted by accounting for convertible
Adjusted EBITDA Bridge Q-o-Q / LTM bond
in k €
LTM LTM
Q1 2018 Q1 2019 •
6.
Last 12 months (LTM) Adjusted EBITDA
Q4 2018 Q1 2019 increased, including PPA adjustments
EBITDA 155,470 143,806 40,693 26,869 from forward sales
PPA Adjustments 82,262 102,123 (1,747) 18,114
One-off expenses 15,458 14,366 215 1.088
Adjusted EBITDA(1) 253,190 6. 260,295 38,946 46,071
(1) EBITDA adjusted for Purchase Price Allocation (“pre-PPA”) and one-off expenses
Consus Real Estate AG 16III. Consolidated Q1 2019 Financials – Balance sheet: Assets
Current & Non-current Assets Comments
in k € FY 2018 1 Q1 2019 •1. Investment properties increased due to
capex spend
Investment property 328,027 334,493
1.
Property, plant and equipment 8,771 9,344 •2. Right of use asset reflects new IFRS 16
lease accounting standard
Right of use asset - 2. 11,597
Goodwill 1,032,480 1,032,552 •3. Work-in-progress reflects net impact of
project development pre-sale and
Other intangible assets 6,158 5,971 reclassification impact of forward sales
Investments accounted for using the equity method 21,590 20,573
•4. Contract assets increased materially
Financial assets 10,037 10,637 through initial forward sales and further
Contract assets 237,882 4. 224.547 construction on projects forward sold
Total non-current assets 1,644,944 1,649,715
Work-in-progress incl. acquired land and buildings 1,826,022 3. 1,880,232
Trade and other receivables 53,933 46,617
Receivables from related parties 62,853 61,275
Tax receivables 8,644 7,175
Financial assets 38,439 39,407
Other assets 15,499 16,895
Contract assets 190 4. 55,235
Cash and cash equivalents 91,603 68,968
Assets held for sale 1,329 1,329
Total current assets 2,098,511 2,177,133
Total assets 3,743,455 3,826,848
(1) Adjusted due to IFRS 16 and update on IAS 23
Consus Real Estate AG 17III. Consolidated Q1 2019 Financials –
Balance sheet: Equity & Liabilities
Equity and liabilities Comments
in k € FY 2018 1
1.• Total equity of €1,164m
Q1 2019
Subscribed capital 134,040 134,527
Capital reserves 904,233 907,464 2.• Gross debt and net debt were €2,240m
and €2,171m respectively
Other reserves (28,477) (34,689)
Non-controlling interest 151,629 147,165
1,161,425 1. 1,154,466
3.• Liabilities to related parties include
Total equity €40m shareholder loan from Aggregate,
Financing liabilities 1,049,150 2. 1,071,672 which was exchanged as part of the
Provisions 1,712 1,772 bond issue
Other liabilities 15,017 44,555
- 32,096
4.• Contract liabilities of €32.1m reflect
Contract liabilities 4. prepayments received before revenue
Deferred tax liabilities 113,900 110,748 recognised
Total non-current liabilities 1,179,779 1,260,843
Financing liabilities 1,146,374 2. 1,168,588 5.• Trade payables increase reflects
Provisions 4,735 4,606 increase in construction activity
Trade payables 41,913 5. 65,943
Liabilities to related parties 43,196 3. 56,891
Tax payables 44,389 43,993
Other liabilities 75,771 71,518
Contract liabilities 45,872 4. -
Total current liabilities 1,402,251 1,411,539
Total liabilities 2,582,030 2,672,382
Total equity & liabilities 3,743,455 3,826,848
(1) Adjusted due to IFRS 16 and update on IAS 23
Consus Real Estate AG 18III. Consolidated Q1 2019 Cash Flow Statement
Cash flow Comments
in k € Q1 2018 Q1 2019 1.• Limited deprecation and amortisation as
business driven by inventory
Profit (loss) before tax 7,963 (14,188)
Depreciation and amortisation 513 1. 1,470
Depreciation and impairment of property, plant and equipment 513 892 2.• Material portion of interest is accrued
Amortisation and impairment of intangible assets - 23
Depreciation on right-of-use asset 555 •
3.
Working capital movement impacted by
Financial expenses (income) 20,081 39,588 increase in contract assets not being
Financial income (6,047) (11,813) matched by prepayments in this quarter
Financial expenses 26,128 2. 51,401
Other non cash adjustments (2,869) (2,025) 4.• Investing activities primarily refer to
Other working capital adjustments 94,462 (44,170) investment properties
Decrease / (increase) in rent and other receivables 38,479 11,522
Decrease / (increase) prepayments, accrued income and other
(8,959) (1,182) 5.• Net cashflow from financing broadly
assets neutral
Decrease/ (increase) in inventories and contractual assets (26,976) 3. (135,670)
(Decrease) / increase in prepayments 86,452 52,215
Decrease in inventory property - (6,467)
(Decrease) / increase in trade, other payables and accruals,
5,465 35,410
contractual liabilities and other liabilities
Income tax paid (1,526) 117
Net cash flow from operating activities 86,121 (19,209)
Net cash flow from investing activities (9,179) 4. (10,421)
Net cash flow financing activities (99,580) 5. 6,859
Consus Real Estate AG 19III. Overview of Group Debt and Financing Costs
Gross debt evolution Q1 2019 Gross debt by entity
€m Outstanding
Consus SSN CG Entity
gross debt
2.500
2,196 2,240 Consus Real Estate AG 488
2.000
CG Gruppe 1,005
1,005 1.005
1.500 SSN 748
Total Gross debt 2,240
1.000
1.588 755 748
Cash and cash equivalents 69
500
; (1) ; (2) Net Debt 2,171
492 488
- Avg. cost of debt 8.1%
Dec-17 Dec-18 Mar-19
Comments
» Significant reduction in interest expense expected as higher cost of debt is refinanced
» Targeting up to 2% average interest rate reduction in medium term
» Successful refinancing of The Wilhelm project in Berlin prime location next to British Embassy
• Amount refinanced: €148.5m with promissory notes
• Average interest-rate on project reduced by over 7%
19
» €19.4m bond proceeds have already been utilised to refinance higher cost project debt
(1) Includes €33m of debt at Pebble Investment GmbH level (100% owned by Consus), (2) Includes €34m of debt at Pebble Investment GmbH level (100% owned by Consus)
Consus Real Estate AG 20III. Simplified Group Structure – Q1 2019
Legend
Shareholder
Other
Operating SPVs Aggregate
shareholders
Debt facility ~57% ~43%
Consus
ownership
Consolidated GAV(1) Senior Secured Notes: €250m
est. €3.07bn Consus Convertible: €190m
Other debt: €48m(2)
75.0%(3) 93.4%5
Gröner(4) CG Gruppe SSN Group
SPVs % of total CG & SSN debt SPVs
Type (6)
52 projects 12 projects
Senior 49%
Junior (7) 11%
CG Development and SSN Development and
Construction Debt: €1,004m Mezzanine 40% Construction Debt: €748m
Note: Simplified structure on a 100% basis. Debt as of 31 March 2019 pro forma for Bond
(1) Estimated market GAV as of 31 March 2019; (2) Includes €34m of debt at Pebble Investment GmbH level (100% owned by Consus), €21.7m of 2020 Facility with Aggregate (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 of SSN, Consus also acquired additional 38.9% of the shares in SG Development GmbH, resulting in Consus direct and indirect ownership of 86.5% (6) Project-related group debt included in respective Junior- and Mezzanine debt
percentages (7) Includes €23.8m debt at SG Development
Consus Real Estate AG 21III. Financing Strategy - Successful Placement of Rated
€400m Inaugural Bond in May 2019
Senior Secured Notes 2019/2024 Initial step towards long-term financing strategy
Issuer » CONSUS Real Estate AG
» Proceeds used to refinance acquisition facility for SSN, make final payments
Issue » Senior Secured Notes on the agreement to increase stake in CG to 75% on a fully diluted basis,
Currency » EUR refinance short term shareholder loans and expensive junior debt
Amount » 400m » Bond ratings from S&P and Fitch of B-/B and company ratings of B/B (stable
Maturity » May 15, 2024 (5 years) outlook)
Coupon » 9.625% » Strong commitment to reduce junior debt at the project level and increasing
Call protection » NC2 (50%, 25%, par) the group level debt
Corporate rating » B/B » Consus with stronger access to capital markets, evolution of financing
Issue rating » B- / B structure will provide further strategic flexibility towards reaching our mid-
term target to deleverage our balance sheet and decrease avg. cost of debt
Distribution » RegS / 144a
Governing law » New York law
Sources and uses
Sources €m Uses €m
New Senior Secured Notes 400 Repayment of SSN Acquisition Facility 253
2020 Related Party Loans exchange 39
Cash payments in connection with the acq. of shares in CG 43
Repayment of project finance debt 28
General corporate purposes 18
Total estimated costs, fees, and expenses 19
Total Sources 400 Total Uses 400
Consus financial targets: reduce the avg. interest rate by 200bps and delever
to Net debt/Adj. EBITDA approx. 3.0X in the medium term
Consus Real Estate AG 22III. Capital Structure Q1-pro forma for Bond Transaction
Capital structure Q1 2019 pro forma for Bond Transaction
Reported Pro Forma for Bond
(3)
(4)
(5)
(2)
Note: All items reflect the book value outstanding as of 31 Mar 2019 with the exception of the SSN Acquisition Facility and the convertible bond that are shown in nominal amount
(1) The New Senior Secured Notes share the same collateral package with the 2022 Convertible Bond, and additionally benefit from the upstream guarantees from Pebble Investment GmbH, SSN Group AG, Wilhelmstraße I GmbH and SG Development GmbH (2) Based on
Market GAV of the Consus property assets on 100% basis as estimated by management as of 31/03/2019 (3) Assumes full use of amounts allocated for refinancing (4) Net cash adjustment includes CG Gruppe acquisition cash payments, related party loan exchange, and
costs and expenses (5) Includes accrued interest
Consus Real Estate AG 23Titel
IV. Outlook
Consus Real Estate AGIV. Development in 2019 as expected - Guidance for 2020 confirmed
Overview of Key Financials Comments
» Total amount of projects of 64 with a development
timeline until 2026
Gross Development Volume
» €9.6bn in total
(GDV)(1) » GDV going forward influenced by timings of
acquisitions and disposals
» Strong growth in Adjusted EBITDA expected in 2019
Target 2020
» €450m » 2020 Adjusted EBITDA target increased from
Adjusted EBITDA
€300m to €450m post SSN acquisition
Target Medium-term Net » Deleveraging planned following acquisitions and
» ~ 3x
Debt / Adjusted EBITDA upfront sales
Target Adjusted » Expected tax rate ~30%
» c. 20%
EBITDA margin
(1) As of 31 March 2019, Includes three projects signed but not yet closed. On a 100% basis
Consus Real Estate AG 25IV. General Information – Stock Performance
Consus Share Stock Chart(1)
Volume Price (€)
€ Vol. k
10,00 2.500.000
ISIN DE000A2DA414
WKN A2DA41 9,00 2.000.000
Number of 8,00 1.500.000
135,107,236
Shares
7,00 1.000.000
Market Deutsche Börse Scale
Segment m:access 6,00 500.000
Stock 5,00 0
Xetra, München, Frankfurt
Exchanges Dez 2018 Jan 2019 Feb 2019 Mrz 2019 Apr 2019 Mai 2019 Jun 2019
Indices E&G-DIMAX Shareholder structure incl. recent contribution in kind
Financial Calendar
Market cap.(2)
€1,013m » Aggregate Group ~57%
19-Jun-2019 Publication of Consus Q1 Interim Statement
SRC Research: €13.0 BUY 26-Jun-2019 Consus Annual Shareholders Meeting
» Christoph Gröner 6% (CEO CG Gruppe)
Hauck & A.: €11.7 BUY 12-Sep-2019 Publication of Consus Half Year Results
Baader Bank: €12.5 BUY » Free Float ~37% 12-Dec-2019 Publication of Consus Q3 Interim Statement
Analysts
Deutsche Bank: €12.0
HOLD
UBS: €9.0 HOLD
(1) Bloomberg, Factset
(2) As of 17 June 2019
Consus Real Estate AG 26Titel
V. Appendix
Consus Real Estate AGII. Overview of Top 10 Projects
GDV in Net floor Development
# Entity Project Name City % of Total GDV % Residential Status
€m area in m² Time-frame
1 Garden Campus Stuttgart 979 10% 79% 186,581 Planning 2020 – 2025
2 416 (Freiladebahnhof)(2) Leipzig 884 9% 53% 267,941 Planning 2020 – 2025
3 Holsten Quartiere Hamburg 878 9% 71% 145,749 Planning 2021 – 2026
4 Cologneo I Cologne 389 4% 37% 90,607 Construction 2018 – 2021
5 Quartier C Karlsruhe 371 4% 64% 111,249 Planning 2021 – 2025
6 The Wilhelm Berlin 366 4% 85% 17,720 Construction 2018 – 2021
7 Neuländer Quarree Hamburg 357 4% 37% 81,315 Planning 2020 – 2023
8 Cologneo II Cologne 351 4% 64% 71,583 Planning 2022 – 2025
9 Covent Garden Munich 297 3% 93% 26,952 Planning 2020 – 2022
10 Frankfurt Ostend Frankfurt 283 3% 54% 39,000 Planning 2021 – 2023
Top 10 5,154 53% 61% 1,038,967
(1) As of 31 Mar, 2019,Includes three projects signed but not yet closed. On a 100% basis (2) Signed sale contract, expected closing in Q3 2019
Consus Real Estate AG 28II. Robust Development Portfolio in Top 9 Cities
Consus with strong footprint in Germany’s top economic regions – 64 projects with GDV of €9.6bn(1)
Hamburg Berlin
GDV in €m: 1,928 GDV in €m: 1,177
Area in k m²: 369 Area in k m²: 227
Avg. Sales Price: 5.231 Hamburg Avg. Sales Price: 5.183
% of total GDV: 20% % of total GDV: 13%
Projects: 6 Projects: 9
Berlin
Dusseldorf/Dortmund Leipzig/Erfurt
GDV in €m: 369 GDV in €m: 1,277
Area in k m²: 65 Dresden Area in k m²: 534
Dusseldorf
Avg. Sales Price: 5.685 Avg. Sales Price: 2.390
Cologne Leipzig
% of total GDV: 4% % of total GDV: 12%
Frankfurt
Projects: 4 Projects: 17
Cologne/Aachen Dresden
GDV in €m: 999 GDV in €m: 416
Area in k m²: 209 Area in k m²: 93
Stuttgart
Avg. Sales Price: 4.772 Avg. Sales Price: 4.496
% of total GDV: 10% % of total GDV: 4%
Munich
Projects: 5 Projects: 6
Frankfurt/Offenbach Munich Stuttgart/Karlsruhe
GDV in €m: 1,238 GDV in €m: 476 GDV in €m: 1,716
Area in k m²: 173 Area in k m²: 67 Area in k m²: 364
Avg. Sales Price: 7.154 Avg. Sales Price: 7.078 Avg. Sales Price: 4.718
% of total GDV: 13% % of total GDV: 5% % of total GDV: 18%
Projects: 7 Projects: 3 Projects: 7
Consus has a flexible portfolio extending until 2026 under the current business plan
(1) As of 31 Mar, 2019, Includes three projects signed but not yet closed. On a 100% basis; 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
Consus Real Estate AG 29V. Illustrative Example of the PPA adjustment mechanism
» According to IFRS 3, an acquirer must record the net assets of the target on its balance sheet at fair value as at the date of the acquisition
» The process is known as purchase price allocation (PPA)
» All future additions to inventory post-acquisition are recorded at cost, with no further value adjustment
» Therefore, Consus accounts for its inventories (both for CG and SSN) at fair value as at the time of their acquisition
» The PPA impact is a one time activity and for all construction post acquisition of CG Gruppe and SSN, there would be no PPA adjustments
» At revenue recognition, the increased value of inventory due to the fair value process (PPA) reduces the reported EBITDA
» In order to provide the underlying profitability, Consus reverses the PPA adjustment to reflect underlying cost excluding the fair value impact, to provide
EBITDA pre-PPA
» This would be the EBITDA recorded if the assets had not been included at fair value and the purchase price allocated
» This adjustment is done only once a forward sale is entered into, ensuring clear allocation of the PPA adjustment and matching the cash flow profile
Illustration: Consus accounting for inventories acquired at CG Gruppe acquisition
» Margin for CG Gruppe: 10 + 10 = 20
Key elements of PPA adjustment
» Cash inflow for CG Gruppe / Consus: 20
» Effective margin for Consus: 20 – 10 = 10
10
120
EBITDA
50 reportable: 10
EBITDA pre-PPA
(adjusted): 20
10
60
50
Construction cost till Developer margin till Fair value / Price paid by Construction cost post acq. Margin on construction cost Sale value
Consus acq. Consus acq. Consus post acq.
Consus Real Estate AG 30You can also read
