Consus Real Estate AG: Consus Real Estate AG has a successful first quarter 2020 – continued growth and substantial pro forma debt reduction
– Adjusted LTM EBITDA of EUR 373 million (FY 2019: EUR 344 million)
– Announced upfront sales of EUR 4.3bn GDV for total transaction value of around EUR 1.1 billion
– Significant pro forma reduction in net debt to circa EUR 1,750 million pro forma for announced upfront sales (FY 2019 EUR 2,700 million)
– Pro forma average run-rate interest rate reduced to 7.4%, with EUR 350 million reduction of high cost mezzanine debt
Berlin – 29 May, 2020. Consus Real Estate AG (“Consus”, ISIN DE000A2DA414, CC1), a leading property developer in Germany’s top 9 cities, today released the figures for the first three months of 2020. The company has achieved continued growth in the first quarter, and subsequently announced upfront sales of GDV EUR 4.3 billion.
Andreas Steyer, CEO of Consus Real Estate AG, comments: “We have achieved significant strategic milestones while continuing to operate the business through the challenges of the Coronavirus pandemic. Our targets on debt reduction, upfront sales and cost of debt reduction are all expected to be exceeded. The announced transactions will focus the portfolio, substantially reduce net debt, and achieve a simplified corporate structure.”
In the first three months of 2020, Consus achieved a total revenue of EUR 126 million, and an overall performance of EUR 228 million, primarily attributable to real estate development. Our key performance indicator EBITDA pre PPA and pre-one offs (“Adjusted EBITDA”) reached EUR 57 million as of 31 March 2020 (Q1 2019: EUR 27 million) and resulted in an Adjusted EBITDA margin of 45%, and growth of over 100%. Reported EBITDA was EUR 46 million as of 31 March 2020 (Q1 2019: EUR 27 million). The Adjusted LTM EBITDA amounted to EUR 373 million (FY 2019: EUR 344 million), reflecting growth of 8% over the quarter.
Adjusted LTM Net Income was EUR 68 million, and reported Net Income was EUR (19) million in Q1 2020 (Q1 2019: EUR (10) million) with the positive developments due to increased revenues and profits being offset by higher net financial expenses of EUR 71 million (Q1 2019: EUR 40 million).
Strong deleveraging of the business
Pro forma for the announced transactions, net debt would be circa EUR 1,750m, leading to a Pro Forma Net Debt / Adjusted LTM EBITDA below 5x, a very significant decrease.
The reduction in net debt from the announced transactions is expected to be over EUR 1.05bn, including a reduction in high cost mezzanine debt of over EUR 350 million. The pro forma average run-rate interest rate for 31 March is 7.4%, below the target for FY 2020 of 7.5%, with further reductions possible.
Reported Net debt/ LTM Adjusted EBITDA as of 31March 2020 is 7.6x (FY 2019 7.8x), with the reduction due to the increase in EBITDA, offset by an increase in Net Debt. Reported net debt was EUR 2,817 million as of 31 March 2020 (FY 2019: EUR 2,700 million), with the increase due primarily to construction activities. Consus’ equity amounted to EUR 1,045 million as of 31 March 2020 (FY 2019: EUR 1,064 million).
Upfront sales of GDV EUR 4.3billion
Consus announced in May 2020 two separate upfront sales for a combined GDV of EUR 4.3 billion, resulting in pro forma GDV of EUR 8.0 billion for the remaining portfolio as at 31 March 2020. Total transaction value will be around EUR 1.1 billion, with a reduction of over EUR 850 million of gross debt directly related to the projects. Consus will have materially exceeded its upfront sales target of GDV EUR 2 billion as it delivers on its deleveraging strategy.
Following these upfront sales, Consus will have increased the proportion of residential in developments to over 62%, and the remaining development portfolio is almost exclusively in Germany’s top 9 cities. The transactions are subject to closing adjustments and conditions, and are expected to close in or before Q3 2020.
In addition, in the first quarter Consus signed an LOI with ADO Properties, the strategic partner of Consus, for the upfront sale of Holsten Quartiere. Consus strategic co-operation agreement with ADO Properties is operating well, and the companies continue to have a good dialogue across the portfolio.
Acquisition of minority stake in Consus RE
Consus has in principle decided to acquire the remaining 25% minority stake in Consus RE AG (formerly CG Gruppe AG) for a preliminary consideration of 24.75m Consus shares and a EUR 27.5m cash component, subject to further steps. The acquisition of the minority in Consus RE, the largest subsidiary, is the final step in simplifying Consus corporate structure, including fully unifying management across all assets.
All construction sites are continuing to operate, and significant disruption is not expected going forward. The impact in the short-term was therefore a limited rise in costs and limited delays to completion. Future forward sales to institutions are currently delayed. Condominium sales slowed while restrictions on movement were in place, but interest has now increased again strongly.
Consus currently has cash throughout the group of over EUR 200m. In addition, the company has undrawn credit lines at the project level of over EUR 250m.
Due to the current Coronavirus pandemic, the date of the AGM has been moved to 1 October, 2020.
Consus continues to maintain its previously communicated guidance of an Adjusted EBITDA of approx. EUR 450m in 2020, an adjusted EBITDA margin of approx. 20% and a target Net Debt / adjusted EBITDA of around 3x in the medium term.
Consus does not assume at this point in time that the Coronavirus pandemic will have a material impact on the Group’s business. Existing forward sales contracts are continuing largely unaffected; however, certain upfront sales and new forward sales are currently delayed and our plans, including these sales being completed as originally assumed, are dependent on the scale of negative impacts caused by the Coronavirus pandemic and the success of any counter measures. Although there is a risk to asset prices, Consus continues to believe that German residential real estate will prove to be one of the most robust asset classes despite the Coronavirus pandemic.
Consus Real Estate AG: Invitation to the results call on 29 May, 2020, 13:00 (CEST)
The Management Board of CONSUS Real Estate AG invites all investors and interested parties to the Q1 2020 results presentation in a telephone conference on 29 May 2020 at 13:00 (CEST).
The presentation will be broadcasted via webcast. Please use the link: https://webcasts.eqs.com/consus20200529/no-audio.
For the audio broadcast, please use the dial-in numbers listed below. Please make use of the early dial-in opportunity (5 – 10 minutes before the start of the event) so that we can start the event on time. When prompted, provide the passcode.
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|Switzerland , Zurich ;||+41 (0)44 580 7230|
|United Kingdom , Local ;||+44 (0)330 336 9104|
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+49 30 965 357 90 264
About Consus Real Estate AG
Consus Real Estate AG (“Consus”), with its headquarters in Berlin, is the leading real estate developer in the top 9 cities in Germany. As of 31 March 2020, Consus’ development portfolio had a gross development value (GDV) of EUR 12.3 billion. Pro forma for the two upfront sales announced in May 2020, the development portfolio has a GDV of EUR 8.0 billion. Consus focuses on the development of neighbourhoods and standardised multi-storey residential construction, which are sold to institutional investors through forward sales. Due to its own construction expertise and the digitalisation of construction processes, Consus operates along the entire value chain of real estate development. Consus provides the realisation of projects from planning and execution to handover, property management and related services through its subsidiaries Consus RE AG and Consus Swiss Finance AG. The shares of Consus are included in the scale segment of the Frankfurt Stock Exchange and the m:access segment of the Munich Stock Exchange and are traded via XETRA in Frankfurt, among others.