Roadshow Presentation - January Lars Schnidrig, CFO | Dr. Kai Klinger, CMO - Corestate Capital
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Roadshow Presentation January Lars Schnidrig, CFO | Dr. Kai Klinger, CMO
Disclaimer
This presentation contains forward-looking statements that are subject to various Glossary
risks and uncertainties. Such statements are based on a number of assumptions,
estimates, projections or plans that are inherently subject to significant risks, as € = Euro;
well as uncertainties and contingencies that are subject to change. $ = (US)Dollar;
Actual results can differ materially from those anticipated in the forward-looking % = percentage;
statements of CORESTATE Capital Holding S.A. (the “Company”) as a result of a a = actual;
variety of factors, many of which are beyond the control of the Company,
including those set forth from time to time in the Company’s press releases and
acc. = according;
reports and those set forth from time to time in the Company’s analyst and adj. = adjusted;
investor calls and discussions. The company does not assume any obligation to
aggr. = aggregated;
update the forward-looking statements contained in this presentation.
approx. = approximately;
This presentation does not constitute an offer to sell or a solicitation or offer to c(a) = circa;
buy any securities of the Company, and no part of this presentation shall form the
basis of or may be relied upon in connection with any offer or commitment e = expected;
whatsoever. This presentation is being presented solely for information purposes (F)Y = (financial) year(s);
and is subject to change without notice.
H = half year(s);
LTM = last twelve months;
M = month(s);
Q = quarter(s);
Extent and impact of the corona pandemic on the course of business in 2020
cannot yet be conclusively assessed. The company is therefore monitoring further tba = to be announced
developments and their impact on business activities very closely and will always k = thousand(s);
present reliable information transparently in a timely manner.
m = million(s);
bn = billion(s)
2
A Fully Integrated and Specialized Real Estate Investment Manager
€ >28bn >55%
Assets under EBITDA
Management Margin
(pre COVID)
~800 FTEs | 45 Offices | 9 Countries
BB (negative) € >4.0bn € c1.3bn
Corporate Credit Deal Pipeline in Fund Volume
Rating selected countries in Real Estate
Mezzanine
3
Attractive Offerings for our Clients in Various Asset Classes
Key product range
Products
Residential City Quarters Office Logistics Micro Living Mezzanine
Return1 3.5%-4.5% 3.5%–5% 3.5%–4% 4%-6% 5%–5.5% 10%–13%
One-Stop-Shop
integrated Asset & Property Management
Platform
Fundraising, Reporting, Risk Management, Financing etc.
Clients / Semi Institutional Institutional Retail
Investors (>300) (>100) (>70.000)
Significant underallocation to (German) Real Estate: currently 9.8%, target between 11-13%2
1 after costs
2 research as of 2019
4Highlights of Q3-2020
Operations Recovering Based on an Improved Transaction Environment
▪ Deal appetite focusing on lower risk/return profiles – market uncertainty and investment pressure aspiring
to new equilibriums
▪ Organic growth in Q3 of +1.2% is mainly backed by Core/Core+ transactions
▪ € 300m landmark deal signed – acquisition of Germany´s largest city quarter development
in Nuremberg for BVK
▪ Revenues from AM & PM and mezzanine lending reveal high resilience through the crisis
▪ On track to deliver on financial guidance
▪ Extension of Management Board and appointment of a new CEO
Capital Increase on 11 September 2020 as One Key Initiative On Deleveraging Path
▪ Issue of 4,186,382 new shares increases share capital by 19.5%; placed at market price (€ 17,82)
▪ Gross proceeds of issue € 74.6m
▪ Use of proceeds: primarily reduction of net financial debt in the short term, but also increase of
entrepreneurial flexibility for further significant organic growth
5Management Board Strengthened & New CEO
Enlargement of Management Board to Four Members
René Parmantier (aged 45) joined the Management Board as new CEO
on 1 December 2020 for an initial term of three years
− More than 25 years of experience in financial industry
− Focus on Strategy/Business Development & Private Debt, Equity Raising
− Prior: CEO of Oddo Seydler Bank
Daniel Loehken (aged 41) became Management Board Member as Chief Legal & HR
Officer on 1 November 2020 for an initial term of three years
− Responsibilities: HR, Legal, Compliance, Risk-Management, Internal Audit and ESG
− More than 10 years of experience in capital market law, compliance and real estate
− Since 2/2018 Corestate, prior: Vonovia, IKB, Clifford Chance
▪ Lars Schnidrig returns to his previous role as Chief Financial Officer with focus on net deb reduction, de-
leveraging and preparation of refinancing (needed no earlier than end of 2022)
▪ Clear division of Management Board responsibilities in operations (clients/investments) and
corporate functions
6COVID-19 Accelerates Group’s Strategic Re-Positioning
COVID-19 as Catalyst for
Enhanced Market Approach Shift of Investment Focus
▪ Consistent changes in product offerings with high
focus on core/core+
Risk
▪ Improvement of private debt business 2019
2020
▪ Examples of current product range: residential in B-cities, Shift in pro- Oppor-
logistic, student housing, city quarters, affordable housing duct range tunistic
in A-cities, commercial with A-tenants Value-add
Core+
▪ Comprehensive re-branding and new positioning
Core
scheduled for 2021
Return
▪ Strengthening of equity raising in DACH region
▪ Group-wide efficiency program launched:
simplification, productivity and digitalization
7Assets under Management on Record High
Assets under Management Sourcing Pipeline
▪ +4.1% net organic growth in RE AuM in 2020 so far ▪ Deal pipeline impacted by COVID-19
▪ Planned decrease in non-Real Estate AuM of ▪ Typical seasonality in RE with strong
€ 0.3bn since 2019 focus on Q4 is considerably reduced
in 2020
28.4bn
25bn 26bn in exclusivity / DD
non Real Estate 3.2bn non-RE 16%
Logistic/other +10.5% 9%
22bn +10%
Retail 14%
Office +28% € 4.2bn
31% in LOI
Micro Living 25.2bn RE 11%
22.2bn
Residential 20.7bn 21%
16.2bn
+440% under review / identified
3bn 25% 73%
FY-2016 FY-2017 FY-2018 FY-2019 9M-2020
8 8Real Estate Debt with Robust Performance
Uses of Mezzanine Funds at the End of Sept 2020
▪ Total committed fund volume: c € 1.3bn Retail
Residential
▪ # of financed projects: 57 68%
16%
▪ Ø size of mezzanine financing: c € 23m 57
projects
▪ Pipeline of potential financings on record high Office
16%
Regional Break Down of Current Outstanding Financings
in m€
c 70% of lending volume goes to
Top7 cities in Germany
270
204
127 118 42
61 91 18 11
50 59
9Investor Base and Performance of HFS Stratos Funds
Mezzanine Funds Showing Strong Organic Growth Stable and Loyal Investor Landscape
(in bn€)
▪ Stable double-digit returns since inception Pension Funds
2009 and very efficient deployment of funds 12% Investment
Insurers Funds 8%
▪ 3Y-CAGR since acquisition (H1-2017): +7.4%
23% Others 3)
7%
1.400 c 1.3 c 70
1.300 1.25 institutional
1.200 1.11
1.165 clients
1.100
0.96
1.000
900 Pension Schemes
800 0.76 50%
700
KPIs 2015 2016 2017 2018 2019 H1-2020
▪ Increasing demand for new
Committed 1) 99.2% 98.6% 99.3% 99.2% 99.1% 99.3% commitments from existing and
Investor
13.2% 12.8% 12.0% 11.2% 10.4% 5.6% 2)
new investors backed by an
Returns outstanding performance in the
crisis
Average commitment of fund volume to projects
Semi Annual Cash Dividend Distribution of H1-2020; FY2020 Fund accounts not yet finalized, 3) Others incl. Banks, Foundations etc…
10Private Debt – More Than Stable in the Upcoming Years
Bright Outlook for HFS Business
▪ All market drivers intact: investor base, product focus, demand, competition
− Product sweet spot: metropolises in Germany with focus on residential and city quarters (mixed
use) in A & B locations have been rising for more than 10 years and continue also during the
crisis
− HFS project portfolio largely immune to the impact of COVID-19
− Banks have tightened underwriting criteria and limited lending on higher risk profiles in RE
→ short-term credit crunch
▪ Tangible pipeline of requested financings on record level (c € 0.5 billion)
▪ Further organic growth in mezzanine fund volumes in 2021 (5-10%)
▪ Cross-Selling opportunities for Corestate´s RE equity business
− City quarters and conversion of former industrial or commercial plots in metropolitan areas
− Affordable housing in A-cities
− Residential projects in A & B cities (“ABBA”)
▪ Launch of whole-loan fund in 2021 (postponed due to COVID-19)
11Fully on Track to Revenue Guidance 2020
and a Promising Approach to 2021
Revenue Split-up for actual 9M-2020 vs. FY-2020e Prospects for FY-2021
(in m€)
Tendency Main Drivers
Acquisition Related Fees 23 25-35 ▪ Pick-up in investment activities
▪ Transaction volumes € 2-3bn
Asset & Property Mgt. Fees ▪ Growing AuM base
106 135-155
(incl. CPF & Sales/Promote Fees) ▪ Prospering RE debt business (CPF)
Mezzanine Loans 7 5-10 ▪ Steady level of bridge loans
Warehousing / RE Operations 3 0-10 ? ▪ Placement of inventories
▪ 2020 burdened by extraordinary
Alignment Capital 0 5-10 ? valuation effects (€ 10-15m)
▪ Tangible upside potential
Aggr. Revenues 143 185-210 accelerated by a normalized
market environment
12Changing Market Conditions Burdening Cost Structure
Key P&L Figures 9M-2020
in m€
Aggr. revenues & gains 142.7 100%
▪ OpEx ratio (>50%) burdened by fixed costs and
Expenses from RE investment mgt. -64.7 45.3% significantly reduced revenues esp. in warehousing
and alignment capital – efficiency enhancement
Alignment capital expenses -9.2 6.5%
program will tackle this
Warehousing expenses -5.1 3.7% ▪ G&A burdened by HR related one-off items from
cost adjustments
G&A expenses -24.4 17.1%
▪ D&A includes IFRS 16 effect and consolidation of
Other income 6.9 4.8% STAM
EBITDA 46.1 32.3% ▪ Adjustments on net profit level
− Asset management contracts € 19m
D&A -24.8 17.4%
− DTA € -2.5m
EBIT 21.3 14.9%
Financial result -16.2 11.4%
Net profit 4.4 3.1%
Adj. net profit 20.8 14.7%
13Key Balance Sheet Figures
Debt Overview at the End of September 2020
in m€
▪ Proceeds from capital increase and positive operational
597 1) 148 cash flow in Q3 lowered net debt position by € 81m
Bank &
other debt 107 to € 449m
(incl. € 33m in
warehousing
▪ Reiteration of net debt reduction plans
debt) 449 − Placements out of inventories, associates/JVs and
financial instruments (>€ 200m in 18-24M)
Senior
296 − Cash flow from operations
bond
▪ Financial leverage IFRS 16-adjusted at 3.7x 3)
mid-term target range of between 2.0x and 3.0x
remains in place
Convertible
194
bond ▪ Main financial instruments not affected by higher leverage
(>3.5x limits only issuing of new debt instruments)
Total debt 1) Cash 2) Net debt
1) Total financial debt adjusted for rental and leasing liabilities of € 29.3m
2) incl. restricted cash
3) Net debt / EBITDA LTM of € 121m; excl. IFRS 16 adjustments financial leverage would be at 4.0x
14Outlook 2020
Financial Guidance 2020 Confirmed
Aggr. Revenues EBITDA Adj. Net Profit
€ 185-210m € 55-80m € 25-50m
▪ Several transactions in advanced status to be signed
▪ First pickings from cash conversion initiative
▪ Intensified AM & PM services on properties affected by the pandemic
▪ Transaction volumes of c€ 1.5bn predominantly in core/core+
15Transaction Market in 2021: Continuous Recovery
Market Uncertainties to Prevail in the first Half and to Vanish Gradually in H2
Q1-2021 Still impact from COVID-19; focus on Core/Core+ transactions
Q2-2021 Continuously less impact from the pandemic, more deals to come
H2-2021 Deal volumes tend to normalize – first “spice deals” in the market
Essential Product Offer 2021 Driven by Agile Investment Approach and Proven Track Record
Residential City Quarters Office Logistics Micro Living Mezzanine
3.5%-4.5% 3.5%–5% 3.5%–4% 4%-6% 5%–5.5% 10%–13% Returns1
▪ All long-term fundamental market drivers are intact and highly supportive for organic growth
prospects in our core disciplines RE equity and RE debt
▪ Anchored on a superior core/core+ pipeline and amplified by advanced niche products and
opportunistic deals esp. from repricing in sub-sectors
▪ Comprehensive re-branding and strengthening of equity raising in DACH region
▪ Expected transaction volumes in 2021: € 2-3bn
1) The returns are based on average performance from the past. All figures are preliminary and only represent forecasts that are not guaranteed.
16Appendix
Appendix: Corestate diversified geographic exposure
and expected near-term expansion
c.€3.3bn Norway
Sweden
BeNeLux c.€1.8bn
RoW c.€3.2bn
c.€16.6bn
Denmark
Micro
Living
Ireland Hamburg
Oxford
Poland
London Leipzig
c.€0.4bn
c.€1.2bn
Luxemburg Frankfurt
Paris Munich
France Zurich
Vienna
Wollerau
c.€0.4bn
c.€0.2bn Milan
Micro
Living Italy
Portugal
Micro
Living Madrid
Headquarters
Main offices
Short-term expansion
18Appendix: Breakdown RE AuM
AuM Distribution Completion/Status Risk Classes
(RE AuM) (RE standing AuM)
Non-Real Estate Opportunistic Core
11% Under 39%
6
construction Standing Value-
29% assets
Real add RE AuM
AuM Estate RE AuM 71% 5% € 16.0bn
Real
Estate
€ 28.4bn equity € 25.2bn (Standing Assets)
debt 62%
27% Core+
50%
Countries (RE AuM) Clients (RE AuMs) Funds structures (RE AuM)
Other
others 2% Alignment 6%
Germany Separate Closed ended
3%
64% Pension accounts funds 21%
Austria & Retail 6% Funds 35% 52%
Switzerland
5% Family open ended
RE AuM RE AuM RE AuM
France Offices 12% funds 9%
€ 25.2bn € 25.2bn € 25.2bn
6%
Private
BeNeLux Equity 13% JVs 5%
8% other inst. investors
Banks Other
UK 15% 12%
5% Insurance companies 13%
8%
19Appendix: Maturity, Risk Segment, Asset Classes Profile
Asset Classes AuM Risk Cluster Asset Classes in Risk Segment
in Risk Segment Core/Core+ (Standing Assets) Value-Add/Opportunistic
Logistics et al 9%
Micro Living 51%
Office 37% Retail
Residential
10%
11%
Value-Add / Logistics/
Core/Core+ RE Equity
Retail AuM Opportunistic Other AuM
86% AuM 15%
13% € 15,0 bn 14% € 2.4bn
€ 17.4bn
Office
Micro 24%
Living 30%
RE Equity AuM (€ 16.8bn) Maturity Profile & Risk Segments (in €bn)
Core/Core+ Value-Add/Opportunistic
8,7
Relatively high portion of property management contracts
running out but being renewed regularly
4,1
3,5
2,6 2,6
1,6 1,8
2020 2021 2022 2023 2024 2025-2029 2030 and beyond
20Appendix: ESG Strategy – Road to 2025 and YoY Progress (2018-2019)
Reduction in Increase in Reduction in water Reduction in
Co2-emissions* by energy efficiency* by comsumption* by residual waste*
2% annually - 12 % 5% annually - 10 % 2% annually - 12 % 2% annually - 13 %
20% by 2025
20% by 2025 30% by 2025 20% by 2025
Increase in the proportion of Introduction of a Development of at least Support of
women in management Guideline for employee 5 ESG partnerships A CC Charity incl.
by 5% annually well-being with major tenants Soli-Employee Days
updated every 12 months on track by 2025 annually from 2020 1 charity
30% by 2025 on track on track supported
Implementation of a Ensure that every employee Implementation of Compliance with the
Compliance & has signed an 12 ESG Comittees highest standards in
Governance Training ethics declaration to ensure compliance with set investor transparency
of all employees, annually from 2020 targets, annually as of 2019 continued and continuous
annually as of 2019 done done done done
1 per m² in the year of the total portfolio; 2 Figure reflects the development from December 2018 to December 2019; since summer 2019 (publication of ESG targets) the
share has increased by 7%. More details on the next page; 3 Will address changes from the corona crisis by including new work topics; 4 Postponed until 2021 due to corona
crisis, not communicated as annual target 21Appendix: Indicative Timeline – Structured Cash Conversion Program
> € 200m Impact on Net Debt Reduction from Schedule of Main Levers
Placements until FY2022
(in m€) • In 2020 partly wind down of STATOS
alignment and regular placement of co-
c 30 investments (c € 30m)
• Warehousing Asset (Giessen) until the end of
20-40 2021 (> € 70m)
• In 2021 Co-Investments (JVs) in Micro Living
and Student Housing (> € 20m)
60-80
• Latest until 2022 sale of co-investments in
Office (>€ 30m)
• Until 2022 co-investment from Opportunity
Fund (> € 40m)
60-80
H2-2020 H1-2021 H2-2021 H1-2022
22Appendix: 9M/2020 Profit & Loss Statement
(€ m) 9M/2020 9M/2019
Revenue from Acquisition Related Fees 23.3 24.0
Revenue from Asset and Property Management 105.8 103.6
Revenue from Promote and Sales Fees realized 3.2 0
Income from Mezzanine Loans 6.8 15.1
Revenue from Real Estate Investment Management 139.1 142.8
Management expenses (64.7) (61.9)
Earnings from Real Estate Investment Management 74.4 80.9
Net Rental Income 4.1 9.4
Revenue from Service Charges (0.4) 4.7
Net Gain from Selling Property Holding Companies (0.5) 8.9
Total Income from Real Estate Operations / Warehousing 3.3 22.9
Expenses from Real Estate Operations / Warehousing (5.1) (16.8)
Earnings from Real Estate Operations / Warehousing (1.9) 6.2
Earnings from Alignment Capital (8.9) 13.9
General and Administrative Expenses (24.4) (17.1)
Other Income 6.9 16.3
EBITDA 46.1 100.1
Depreciation and Amortisation (24.8) (25.3)
EBIT 21.3 74.8
Net Financial Expenses (16.2) (15.2)
EBT 5.1 59.6
Income Tax gains / expenses (0.7) (8.3)
Net Profit for the Period 4.4 51.3
of which attributable to equity holders 4.3 51.3
23Appendix: Balance Sheet as of 30 September 2020
(€ m) 30 Sept 2020 31 Dec 2019
Non-Current Assets
Goodwill 606.8 567.1
Other Financial Instruments 173.6 172.2
Intangible Assets 92.4 109.6
Investment in Associates and Joint Ventures 113.7 126.5
Other Non-Current Assets 112.1 104.9
Total Non-Current Assets 1,098.6 1,069.9
Current Assets
Inventories 63.0 62.3
Cash and Cash Equivalents 139.8 103.2
Other Current Assets 208.0 172.6
Total Current Assets 410.8 338.1
Total Assets 1,509.4 1,418.4
Total Equity 760.3 676.3
Long-term Financial Liabilities to Banks 41.5 17.0
Other Long-term Financial Liabilities 552.4 520.3
Other Non-Current Liabilities
23.1 35.2
(sum, incl. other non-current Liability positions)
Total Non-Current Liabilities 617.0 572.5
Current Liabilities
Short-term Financial Liabilities to Banks 15.5 37.7
Other Short-term Provisions 11.2 13.9
Other Current Liabilities
105.4 117.9
(sum, incl. other current Liability positions)
Total Current Liabilities 132.1 179.6
Total Equity and Liabilities 1,509.4 1,418.4
24Appendix: Shareholder Structure and Research
Shareholder Structure (acc. to latest public filing)
Free Float
Vestigo 90.1%
9.9% Number of shares
25,666,025
Average target price €28.5
€ 65
Buy/Add
€ 38 € 35 Hold
€ 23 € 18 € 20
€ 17 € 15 € 15 Sell
30 Nov 2020 02 Dec 2020 29 April 2020 10 Sept 2020 25 Feb 2020 02 Dec 2020 Suspended 01 Dec 2020 02 Dec 2020
25IR Contact and Financial Calendar 2021
Investor Contact Financial Calendar 2021
Dr. Kai G. Klinger
24 February Publication preliminary results for FY 2020
Chief Markets Officer
Phone: +49 69 3535630-106 24 March Annual financial report 2020
ir@corestate-capital.com
28 April Annual General Meeting
19 May Publication results for Q1
11 August Publication results for H1
10 November Publication results for first nine months
Please note that these dates
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