Instone Group has a very solid start to the year; signs of a pickup in
demand

EQS-News: Instone Real Estate Group SE / Key word(s): Quarter Results
Instone Group has a very solid start to the year; signs of a pickup in
demand

08.05.2024 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.

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Instone Group has a very solid start to the year; signs of a pickup in
demand

  * Adjusted revenues were nearly stable at EUR 119.5 million in Q1-2024
    (Q1-2023: EUR 123.5 million), mainly based on construction of sold units
    progressing according to plan

  * A continued high adjusted gross profit margin of 27.4 percent (Q1-2023:
    27.4 percent) underscores the quality of Instone Group projects and cost
    discipline

  * Sales amounting to EUR 88.0 million (Q1-2023: EUR 52.7 million) confirm
    a continued moderate recovery in demand

  * Very solid earnings after tax of EUR 9.6 million, slightly above the
    previous year also as a result of improvements in efficiency (Q1-2023:
    EUR 8.5 million)

  * A strong balance sheet remains a key pillar of the business model
    (loan-to-cost: 17.3 percent)

  * Resumption of acquisitions; initial transactions are in advanced
    negotiations

  * Outlook for 2024 reiterated adjusted revenues of EUR 500 to 600 million,
    adjusted earnings after tax of EUR 30 to 40 million, sales of over EUR
    300 million

Essen, Germany, 8 May 2024: Instone Real Estate Group SE ("Instone Group")
had a very solid start to the year in an industry environment that remains
challenging. Based on a high number of projects already sold, adjusted
revenues on the basis of the planned construction progress was around the
same level as in the previous year. Thanks to a continuing high adjusted
gross profit margin, successful improvements in efficiency and a lower tax
rate, earnings after tax increased slightly at the start of the year
compared to the previous year's level.

Following the sharp rise in construction costs and interest rates, demand
still poses the biggest challenge. However, there was an upturn in retail
sales during the second half of 2023 and particularly in the final quarter.
Taking into account the seasonal factors, overall, this trend continued in
the first quarter of 2024. The institutional transaction market is still
characterised by strong restraint. Nevertheless, increasing investor
interest can also be observed here again and a first sale to an
institutional investor was already concluded in the first quarter of 2024.
Sales in the first quarter of 2024, at EUR 88.0 million, were significantly
higher than the previous year's low level (Q1-2023: EUR 52.7 million).

Instone Group maintains leading profitability in a difficult market
environment

Adjusted revenues in Q1-2024 amounted to EUR 119.5 million, almost at the
previous year's level (Q1-2023: EUR 123.5 million). The Instone Group
continues to benefit from the high share of projects that have already been
sold. Of the projects under construction, with a volume of around EUR 2.9
billion, around 90 percent had already been sold by the end of the quarter,
thus largely securing the expected cash flows from these projects.

The adjusted gross profit margin in the first quarter of 2024 was 27.4
percent (Q1-2023: 27.4 percent), still on a high and industry-leading level.
The company benefits from fixed-price contracts and economies of scale in
purchasing, the structural advantages of a high level of vertical
integration and its many years of expertise in construction. Based on the
expected mix of projects, a slightly lower gross margin is expected for the
full year, as planned.

On the cost side, the measures implemented to increase efficiency have
contributed to a noticeable reduction in platform costs.

The adjusted operating profit (adjusted EBIT) therefore remained stable at
EUR 15.8 million (Q1-2023: EUR 15.8 million). At EUR 9.6 million, adjusted
earnings after tax (EAT) in the first quarter of 2024 were slightly up on
the previous year, partly due to a lower tax rate (Q1-2023: EUR 8.5
million).

Moderate pickup in demand continues

In the first quarter, the Instone Group sold properties worth EUR 88.0
million, which is significantly higher than the previous year's low level
(Q1-2023: EUR 52.7 million). An institutional sale with a volume of around
EUR 62 million contributed significantly to this. Overall, the institutional
market is still characterised by a pronounced reluctance to buy, but
investor interest is growing again.. In retail sales, the trend of a
moderate recovery in demand continued also at the start of the year, taking
seasonal effects into account. The introduction of increased tax
depreciation for new buildings as part of the implementation of the new
Growth Opportunities Act should generate additional positive boosts in
demand.

Strong balance sheet combined with a large number of pre-sold projects
provides the basis for future cash flows

The Instone Group has a strong balance sheet, which is a key competitive
advantage in the current market environment. The ratio of net debt to
contract assets plus balance sheet inventories valued at cost (loan-to-cost,
LTC) at 31 March 2024 remains at a very low level of only 17.3 percent (31
December 2023: 15.1 percent). The ratio of net debt to adjusted EBITDA is
just 2.4x (31 December 2023: 2.1x).

Freely available cash amounted to over EUR 240 million as of 31 March 2024.
In addition, the company has substantial unused credit lines (RCFs) as well
as unused project financing lines.

First acquisitions since 2022 in advanced stages; focus is shifting back to
growth

The expected sales value of the Instone Group project portfolio (gross
development value, GDV) as at the end of the quarter was approximately EUR
6.9 billion (31 December 2023: EUR 7.0 billion). The current size of the
pipeline is already securing the business potential for the next few years.
The part of the portfolio that is under construction totals around EUR 2.9
billion, of which EUR 2.6 billion, or around 90 percent, has already been
sold. Once again, this provides high visibility with regard to the expected
future revenues and cash flows. This significantly mitigates the risk
profile of the Instone Group.

The company is now also back in advanced discussions for the first project
acquisitions since 2022 to strengthen the basis for a future return to
growth. Instone Group benefits from the current market environment, so these
projects should also be associated with above-average margins and returns in
the future.

"Our figures once again demonstrate that we are holding our position very
well in the ongoing crisis. While securing our strong balance sheet, we are
beginning to examine opportunities in the current environment and thus
setting the course for future growth", says Kruno Crepulja, CEO of Instone
Real Estate Group SE.

Outlook for 2024 confirmed

Based on the results of the first quarter of 2024, the Management Board
confirms the financial outlook for 2024 and continues to expect adjusted
sales of EUR 500 to 600 million, an adjusted gross profit margin of around
22.0 per cent, adjusted earnings after taxes of EUR 30 to 40 million and
sales of more than EUR 300 million.

The definitions of the key performance indicators mentioned in the release
can be found in the glossary on the company's website at: Glossary: Instone
Real Estate Group SE

About Instone Real Estate Group SE (Instone Group)

The Instone Group is one of the leading residential developers in Germany
and is listed on the Prime Standard of the German stock market. Since 1991,
we have been developing future-proof and sustainable urban residential
quarters with apartments for sale or rent throughout Germany - to provide a
long-lasting good life in the country's metropolitan areas. Our diverse
expertise, combined with efficient processes and a solid financial basis,
creates real added value for our stakeholders in environmental, social and
economic terms. This means we are taking responsibility for one of the most
pressing social issues of our time - creating needs-based and attractive
living space. The company employs 421 employees at nine locations across
Germany. As at 31 March 2024, the project portfolio included 45 development
projects with an anticipated overall sales volume of approximately EUR 6.9
billion and over 14,000 residential units. www.instone-group.de/en


Investor Relations

Burkhard Sawazki
Grugaplatz 2-4, 45131 Essen, Germany
Tel.: +49 (0)201 45355-137
Email: burkhard.sawazki@instone.de

Press

Franziska Jenkel
Chausseestr. 111, 10115 Berlin, Germany
Tel. +49 (0)30/6109102-36
Email: presse@instone.de


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   Language:       English
   Company:        Instone Real Estate Group SE
                   Grugaplatz 2-4
                   45131 Essen
                   Germany
   Phone:          +49 201 453 550
   E-mail:         Investorrelations@instone.de
   Internet:       www.instone.de
   ISIN:           DE000A2NBX80
   WKN:            A2NBX8
   Listed:         Regulated Market in Frankfurt (Prime Standard);
                   Regulated Unofficial Market in Berlin, Dusseldorf,
                   Munich, Stuttgart, Tradegate Exchange
   EQS News ID:    1897475

End of News EQS News Service
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1897475 08.05.2024 CET/CEST