DGAP-News: Consus Real Estate AG: Preliminary Full year results 2019 and Coronavirus update

Berlin, April 23, 2020
Consus Real Estate AG: Preliminary Full year results 2019 and Coronavirus update

- Strong growth in portfolio GDV

- Adjusted EBITDA increased to EUR 344.4m

- Forward sales of EUR 2.8bn

- Strategic partnership with ADO and potential full takeover

- Coronavirus not impacting ongoing operations at this time

Berlin, 23 April 2020 -CONSUS Real Estate AG ("Consus", ISIN DE000A2DA414, CC1) published its preliminary 2019 annual results today, and has demonstrated strong growth in the portfolio and Adjusted EBITDA.

Strengthened position as leading developer in Germany's Top 9 Cities
As of December 31, 2019, Consus' development portfolio comprised 65 residential projects with a Gross Development Value (GDV) of around EUR 12.3bn, and a total net area of 2.25m square meters. The significant increase in scale was achieved through a combination of acquisitions and development gains.

Strong performance: Consus adjusted EBITDA increased to EUR 344m
Consus reports sales of EUR 671.1m and an overall performance EUR 873.8m for 2019, driven by strong growth in forward sales revenue and also an increase in upfront sales. Adjusted EBITDA amounted to EUR 344.4m, with reported EBITDA at EUR 236.4m. The Adjusted EBITDA includes EUR 66m PPA write-back primarily from the Leipzig project sale, and EUR 42m one-offs primarily due to restructuring charges following the departure of Christoph Gröner. Reported net financial expenses were EUR 216.5m, relating to both project level as well as group financing. Reported Net Income amounted to EUR (5.0) m.

In 2019, Consus operating cash flow was EUR (74.1) m, reflecting the investment in the portfolio and a rescheduling of certain forward sales to 2020. Inventory increased to EUR 2,472.6m from EUR 2,139.8m, and contract assets increased to EUR 335.2m from EUR 221.6m.

The net debt at year end was EUR 2,699.9m, with the increase in net debt largely reflecting the growth of the portfolio. Net debt / Adjusted EBITDA decreased to 7.8x from 8.7x FY 2018 adjusted for the initial EUR 400m senior secured bond issuance.

These results are preliminary and unaudited. The preparation of the financial statements has been finalised; however, due to the impact of remote working requirements resulting from the Coronavirus, delivery of the audit opinion is expected to occur shortly.

Forward Sales: total of EUR 2.8bn
Consus continued to successfully implement its unique focus on forward sales. Forward sales, either signed, in LOI or under negotiation increased to EUR 2.8bn, and eight sales with a value of over EUR 500m were signed in 2019.

Full integration of CG Gruppe
CG Gruppe AG has been fully integrated in the Consus group. Christoph Gröner, the founder of CG Gruppe, has left the executive board and moved to the CG Gruppe supervisory board of CG Gruppe. Jens Jäpel, CDO of Consus group, was appointed as the new CEO. The name of CG Gruppe has been changed to Consus RE AG and management functions are now completely integrated.

ADO strategic co-operation and call-option
Consus has signed a strategic cooperation agreement with ADO Properties S.A. ("ADO"). The strategic co-operation agreement is working well, and an LOI has been signed for the Hamburg Holsten project. Consus believes that the newly enlarged ADO/ADLER Real Estate group is a strong partner.

ADO has stated that it expects to exercise the option when the combined company will achieve its target capital structure and when market dynamics are favourable.

Coronavirus operating update
All construction sites are operating. There are now no material shortages and significant disruption is not expected going forward.

The impact in the short-term on the construction operations is therefore a limited rise in costs and limited delays to completion. In the medium term, Consus expects to benefit from reduced construction cost pressures, and residential supply favourably impacted.

Existing forward sales are continuing to operate, and Consus does not expect to pay any penalties from late delivery due to the Coronavirus pandemic.

Future forward sales are currently delayed as institutions and individuals evaluate the implications of the Coronavirus pandemic. The demand for long-life high-quality yielding assets in Germany's top 9 cities in a low yield environment is not expected to materially change. The restrictions put in place as part of the pandemic have highlighted the importance of living space to individuals.

Upfront sales are less impacted. Expressions of interest continue to be received, although timing of transactions is uncertain in the current environment.

Liquidity overview in Coronavirus environment

Consus projects under construction are generally funded either through prepayments or through construction loans. Prepayments and drawdowns regarding projects under construction are ongoing, and no new construction projects are being commenced unless fully funded.

Consus is currently evaluating various additional financing options, including government-backed loans. Consus aims to be in a position to access these financing options, if required.

Consus currently has cash throughout the group of over EUR 190m. In addition, the company has undrawn credit lines at the project level of over EUR 200m.

Actions taken to mitigate the impact

Consus has implemented a cost cutting programme based on the full integration of all operations and postponed all non-essential expenditure and recruitment. No new project acquisitions will be signed and a programme of portfolio GDV reductions to reduce leverage is being evaluated.

Outlook

Consus has 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.

As of the reporting date, 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 will continue to assess any potential macro-economic and industry-related impacts as well as any impact on the Group's business, either directly or from reduced economic visibility, and will update the market as appropriate.

"We achieved strong growth in our portfolio and in our economic performance in 2019.", says Andreas Steyer, CEO of Consus, and he adds: "Consus, as the leading real estate developer in the top 9 cities in Germany, attracted ADO as a strategic partner, which has the potential to transform the business. Our current focus is on the Coronavirus, where the existing business continues to operate in this challenging environment. "

The current company presentation has been published on the website of the company under investors/ financial reports and presentations (https://www.consus.ag/financial-reports-presentations-2019?lang=en)

Consus Real Estate AG: Invitation to the conference call on 23 April, 2020, 14:00 (CEST)

The Management Board of CONSUS Real Estate AG invites all investors and interested parties to the preliminary results presentation of FY 2019 results in a telephone conference on 23 April 2020 at 14:00 (CEST).

It will also be broadcasted live via webcast. Please use the link: https://webcasts.eqs.com/consus20200423/no-audio

For the audio broadcast, please use the dial-in numbers listed below. You will be greeted by an operator and put through to the conference after giving your name. Please make use of the early dial-in opportunity (15 minutes before the start of the event) so that we can start the event on time. When prompted, please provide the passcode.

Contact
Investor Relations : +49 30 96535790264
Email: [email protected]

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 December 2019, Consus' development portfolio had a gross development value (GDV) of EUR 12.3 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.