Adler Group with robust operational performance in 2023

EQS-News: Adler Group S.A. / Key word(s): Annual Results
Adler Group with robust operational performance in 2023

25.04.2024 / 12:07 CET/CEST
The issuer is solely responsible for the content of this announcement.

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Adler Group with robust operational performance in 2023

  * 5.1% like-for-like rental growth compared to previous year and
    operational vacancy of 1.1%

  * Successful disposals in FY 2023 such as the "Wasserstadt" rental
    portfolio at close to book value and several development projects at
    expected prices contributing to c.EUR530m in gross proceeds

  * Stable liquidity position with EUR377m cashas a result of both the "New
    PIK 1.5L notes" placement and cash inflows from project sales, despite
    debt repayments in the amount of
    c. EUR280m in Q4 2023

  * Adler Group expects to generate net rental income in the range of
    EUR200m-210min FY 2024

  * Publication of the audited annual reports 2022 and 2023 by 30 September
    2024

  * Considerable steps taken to reinforce the Group's capacity to continue
    as a going concern, leading into a non-binding agreement in principle on
    a restructuring with bondholders

Luxembourg, 25 April 2024 - Adler Group S.A. ("Adler Group") concluded the
fiscal year 2023 with a robust operational performance, underlined by a
strong like-for-like rental growth of 5.1% over the financial year and a
vacancy rate of just 1.1%. The average residential rent per square meter
increased to EUR7.60 compared to EUR7.58 in 2022 despite the disposal of the
"Wasserstadt" portfolio in Berlin, with c.700 new built units not falling
under the Mietspiegel. By year-end 2023, the rental portfolio amounted to
25,043 units, of which 17,738 units are in the Berlin area.

The FY 2023 results reflect Adler Group's successful disposals of portfolio
assets, in order to generate liquidity, cover financial maturities and to
reposition the portfolio. The disposal of the Berlin-based "Wasserstadt"
rental portfolio was one of the largest transactions in the German
residential sector last year.

However, given the tough transaction market environment, disposals are
lagging the original plans. In response, Adler Group is proactively revising
its restructuring framework, focusing on two key pillars: (i) a revised
business plan to restructure the Group's most difficult assets and to
participate in the expected market recovery, and (ii) a financial
restructuring which improves the Group's cash position, stabilises the debt
structure by postponement of maturities beyond 2026/27 and provides a
sufficient equity position until maturity of Adler Group's prolonged debt in
order to provide a solid foundation for the Group's going concern for at
least, but not limited to the next two years. Management has reached a
non-binding agreement in principle on a restructuring with bondholders.
Based on the achievement thus far and considering alternative options
available, management takes the view that a solution can be implemented
until end of September 2024.

Commenting on the 2023 results, Thierry Beaudemoulin, CEO of Adler Group,
said: "The perfect storm in the financing and the transaction parts of our
industry is not yet over, but market turbulences have calmed down. We are
proud of the strong performance of our rental activities, being core
business and reflect Adler Group's strong position in the Berlin residential
market."

Net rental income was EUR210m compared to EUR245m in 2022, a decrease which was
mainly due to asset disposals, both in 2022 and 2023. Hence, the Company met
its FY 2023 guidance of EUR207m to EUR219m. Adj. EBITDA from rental income was
EUR110m (2022: EUR148m). For FY 2024, Adler Group expects net rental income in
the range of EUR200m to EUR210m.

The gross asset value (GAV) of the yielding portfolio came down from EUR5.2bn
as per December 2022 to EUR4.2bn as per December 2023 (of which EUR3.6bn in
Berlin), driven by both disposals and the portfolio revaluations. The l-f-l
yielding portfolio revaluation amounted to minus 12.8%. However, the pace of
devaluation slowed down significantly in the second half of 2023 compared to
the first half.

Commenting the financial performance, Thomas Echelmeyer, CFO of Adler Group,
said: "We successfully addressed all our financial obligations due in 2023,
secured new financing in a challenging environment and ensured sufficient
liquidity." In the fourth quarter 2023, Adler Group placed EUR191m of 1.5 lien
notes with annual PIK interest amount of 21% due end July 2025. Gross
proceeds from disposals amount to EUR530m with associated debt repaid of EUR270m
and net cash generation of EUR200m. The total cash position at year end 2023
amounts to EUR377m.

The financial results were, however, negatively impacted by extraordinary
expenses related to the restructuring program and its financing. Legal and
consultancy costs as well as interest expenses were particularly noticeable
here, as well as the significant devaluations of the real estate assets.
Overall, the aforementioned expenses resulted in a loss from operating
activities of EUR1,464m in FY 2023 (previous year: minus EUR1,272m). In
addition, there was a negative financial result of EUR497m (previous year:
minus EUR535m).

The negative earnings situation is also reflected in the key figures FFO,
EPRA NTA and EPRA LTV. For the first time, FFO I was negative at minus EUR43m
(previous year: plus EUR87m) due to the increasing interest burden. The EPRA
NTA amounted to EUR529m, or EUR3.49 per share, as of 31 December 2023, compared
to EUR2.4bn / EUR20.77 per share as of 31 December 2022. EPRA LTV was 97.6%
(74.5% at the end of 2022).

Referring to the outlook for 2024, Thierry Beaudemoulin explained: "2024 has
started with a robust operational performance again. Market conditions and
in particular financing of transactions remain somewhat uncertain, even
though most analysts expect lower interest rates in 2024, with the first
rate cut this summer. Regardless of this development, we will continue our
efforts to restructure the Company and will focus on our business."

The 2023 consolidated financial statements and annual accounts for Adler
Group published today are still unaudited. As the auditing process for the
2022 and 2023 consolidated financial statements and annual accounts is
ongoing as expected, the Company envisages the publication of these audited
figures by 30 September 2024.

Webcast

A webcast for analysts and investors will be held today, 25 April 2024, at
14:30 CET.

The webcast is available at the following link:

https://event.choruscall.com/mediaframe/webcast.html?webcastid=6KFOO7IE

Contact

Investor Relations:
T +352 203 342 10

E investorrelations@adler-group.com


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   Language:       English
   Company:        Adler Group S.A.
                   55 Allée Scheffer
                   2520 Luxembourg
                   Luxemburg
   Phone:          +352 278 456 710
   Fax:            +352 203 015 00
   E-mail:         investorrelations@adler-group.com
   Internet:       www.adler-group.com
   ISIN:           LU1250154413
   WKN:            A14U78
   Indices:        FTSE EPRA/NAREIT Global Index, FTSE EPRA/NAREIT
                   Developed Europe Index, FTSE EPRA/NAREIT Germany Index
   Listed:         Regulated Market in Frankfurt (Prime Standard);
                   Regulated Unofficial Market in Berlin, Dusseldorf,
                   Hamburg, Hanover, Munich, Stuttgart, Tradegate
                   Exchange; London, Luxembourg Stock Exchange, SIX
   EQS News ID:    1889625

End of News EQS News Service
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1889625 25.04.2024 CET/CEST