Adler Group S.A. reaffirms guidance for fiscal year 2021 based on strong operational 9M performance

• Like-for-like ("LFL") rental growth of +3.9% YoY, 9M NRI increased by +28% YoY to €259m
• LFL revaluation gain for the yielding assets of +8.7% or €626m materialised during the first nine months
• Strategy of focusing on residential real estate in top 7 German cities consistently implemented: strategic asset disposals with a combined value of c. €2.4bn
• Rental income for fiscal year 2021 expected in range of €340-345m, FFO 1 expected in range of €135-140m, in line with previously announced guidance

Berlin, 30 November 2021 - Based on a positive development of key operating figures in the first nine months of 2021, Adler Group S.A. ("Adler Group") reaffirms its increased full year guidance as announced in August 2021. Accordingly, the group continues to expect a net rental income in the range of €340-345m and funds from operations from its rental business (FFO 1) in the range of €135-140m.

The third quarter of 2021 continued to show a strong performance of the yielding portfolio. Net rental income increased by +28% to €259.3m in 9M 2021 from €203.2m in 9M 2020, primarily due to +3.9% LFL rental growth and the first-time consolidation effect of ADLER Real Estate AG at the beginning of April 2020.

EBITDA from rental activities increased by +26% year-to-date compared to the first nine months in 2020 and stands at €169.2m. In the first nine months, FFO 1 amounted to €101.9m compared to €74.7m in the same period of 2020. This leads to an FFO 1 per share of €0.87 (9M 2020: €1.06 with a significantly lower average number of shares).

The average in-place rent of the rental portfolio increased slightly to €6.61/sqm/month as of
30 September 2021, representing a LFL rental growth of +3.9%. Vacancy at the end of September was reduced to 3.3% from 3.9% as of 30 September 2020 partly due to the sale of assets with higher vacancies announced at the end of last year.

Fair value of portfolio keeps growing

Year-to-date, the yielding portfolio experienced a LFL value uplift of +8.7%. Income from the revaluation of the entire portfolio amounted to €571m year-to-date including the negative effect of €127m from the Gerresheim reversal.

As of 30 September 2021, the fair value of the entire portfolio amounted to €13.0bn (year-end 2020: €11.4bn) and comprised of 69,435 residential units.

The EPRA NTA amounted to €5,006m (€42.60 per share), an increase of +13% compared to the value at the end of 2020 of €4,443m (€37.81 per share).

Strategic focus on top 7 cities implemented - Transactions underpin quality and value of portfolio

As part of the strategy of accelerated debt reduction and an increased focus on Germany's top 7 cities, after the end of the third quarter 2021, Adler Group announced the sale of two large residential portfolios together comprising ca. 29,800 units. Both sales with a combined total volume of c. €2.4bn are expected to close at a premium versus latest appraised book values, thereby confirming the high quality of the portfolio and the robustness of the asset valuations in general. With these envisaged transactions, Adler Group will complete the strategic asset disposals announced on 4 October. The group continues to focus on the planned disposals of non-strategic development projects to further reduce debt and decrease development exposure.

As of end of September, the loan-to-value (LTV) incl. convertibles increased temporarily from 54.7% at the end of H1 2021 to 57% at the end of Q3, mainly driven by the Gerresheim retention, dividend payment and capex spent on development projects. Adler Group confirms its expectation to reach an LTV of below 50% after closing of the announced strategic disposals. The selected financial assets are expected to fall below €300m as of year-end 2021, compared to over €1bn at mid-year 2021. This is due to expected incoming payments from disposed development projects, among others. All major receivables are backed by assets as collateral.

With these strong results, operational achievements and an enhanced focus on Germany's top 7 cities, Adler Group is not only on track to deliver on the increased guidance for FY 2021, but also best positioned to deliver sustainable value for all its stakeholders in the upcoming quarters.

Earnings call
An Analyst & Investor webcast and conference call will be held today, 30 November 2021, at 3pm CET / 2pm GMT / 9am EDT.
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