DGAP-News: Consus Real Estate AG has a successful third quarter 2019 - delivering strong growth and significant deleveraging

12 December 2019

Consus Real Estate AG has a successful third quarter 2019 - delivering strong growth and significant deleveraging

- Pro Forma Adjusted LTM EBITDA ("PF LTM EBITDA") of EUR 438 million (FY 2018: EUR 246 million)

- Significant reduction in leverage : Net debt / PF LTM EBITDA reduced to 5.7x (Q2 2019: 7.8x)

- Average run-rate interest rate at 7.9%, down 60 basis points sequentially, with expensive mezzanine debt reduced by c. EUR 125 million

- Continued portfolio growth: GDV increased from EUR 10.0 billion to EUR 10.3 billion, with further project acquisitions in progress

- Three additional LOIs signed post 30 September 2019 bringing the total of both forward sales signed and LOI's signed to EUR 419 million for the year to date.

- Six projects, with a total GDV of c. EUR 650 million, currently in negotiation for a forward sale.

Berlin - 12 December, 2019. Consus Real Estate AG ("Consus", ISIN DE000A2DA414, CC1), the leading property developer in Germany's top 9 cities, today released the figures for the first nine months of 2019.

In the first nine months of 2019, Consus achieved a total revenue of EUR 525 million, and an Overall performance of around EUR 609 million. The majority of the revenue is attributable to a combination of upfront sales and real estate development. Our key performance indicator EBITDA pre PPA and pre-one offs ("Adjusted EBITDA") increased to EUR 285 million as of 30 September 2019 (Q3 2018: EUR 93 million) and resulted in an Adjusted EBITDA margin of 54%, and growth of over 200%. Reported EBITDA was EUR 220 million as of 30 September 2019 (Q3 2018: EUR 38 million).

The adjusted last 12 months EBITDA pro forma for the SSN acquisition ("Pro Forma LTM Adjusted EBITDA") amounted to EUR 438 million. This is a significant increase compared to the Pro Forma Adjusted EBITDA of EUR 246 million as of 31 December 2018, and reflects the strong growth of the business on a like-for-like basis, including the successful upfront sale of the Leipzig project.

Pro Forma LTM Adjusted Net Income came to EUR 127 million, and reported Net Income was EUR 29 million (Q3 2018: EUR -17 million) due to increased revenues and profits offsetting higher net financial expenses of EUR 172 million (Q3 2018: EUR 63 million) which rose due to increased debt, including the SSN acquisition and the bond issuance.

Strong deleveraging of the business as profitability increases
Group leverage based on Pro Forma LTM Adjusted EBITDA fell to 5.7x in the quarter, down from 7.8x in Q2 2019, reflecting the strongly increase in EBITDA and marginally reduced Net Debt. This significant decrease highlights the excellent progress Consus' made in the deleveraging of its business, and the underlying strength of the Consus group and its development portfolio.

Net debt decreased marginally to EUR 2,480 million as of 30 September 2019 (Q2 2019: EUR 2,503 million) . Consus' equity amounted to EUR 1,137 million as of 30 September 2019 (FY 2018: EUR 1,154 million).

Reduction of average interest rate
The average run-rate interest rate decreased to 7.9% as of 30 September 2019 (Q2 2019: 8.5%), taking into account recent refinancings at development projects in Berlin, Frankfurt and Hamburg, and also the sale in Leipzig. The refinancings and repayments reduced the rate from 8.5% as at 30 June 2019.

Consus has reduced its outstanding expensive mezzanine debt by circa EUR 125 million to c. EUR 400 million as at 30 September, through refinancings, and through further repayments and refinancing aims to reduce expensive mezzanine to levels that are not material in H1 2020.

Continued growth in development and in the development portfolio
As of 30 September 2019, and adjusted for the sale in Leipzig, the total GDV has increased to EUR 10.3 billion, from EUR 10.0 billion as of 30 June 2019, with a total area to be developed of 2.2 million m² and the total number of development projects now at 67 following the hand-over of one project during the quarter.

The volume of projects forward sold or under negotiation came to EUR 2.8 billion as at 30 September 2019, corresponding to 27% of the development portfolio in terms of GDV as of 30 September 2019. Six projects, with a total GDV of c. EUR 650 million, are currently in negotiation for a forward sale. Three LOIs were signed in October, with signed agreements expected for these projects sold in the near term. In addition, Consus is targeting a further upfront sale of around EUR 800 million which is currently under LOI, which it expects to sign in Q1 2020.

Development of the group
Following the expansion of our portfolio, Consus is now executing the plan to further integrate our operating subsidiaries. In the third quarter, SSN Group made the change to operate under the Consus brand. Development projects are now directly managed by Consus.

Guidance
Consus continues to target an Adjusted EBITDA of EUR 450 million in 2020 and an Adjusted EBITDA margin of around 20% in the medium term. Consus also intends to reduce its Net Debt/Adjusted EBITDA to circa 3x and its average interest cost to circa 6% in the medium term. The significant rise in the Q3 LTM Adjusted EBITDA reflects both the strong results in Q3 2019, as well as the benefit in Q4 2018 of an upfront sale. The full year 2019 Adjusted EBITDA will not reflect the benefit of the Q4 2018 upfront sale, and therefore will be below Q3 Pro Forma LTM Adjusted EBITDA.

Andreas Steyer, CEO of Consus Real Estate AG, comments: "The third quarter of 2019 again demonstrated the continued delivery of our key goals -growth in Adjusted EBITDA, reduction in leverage and reduction in average interest cost. Our ability to grow our impressive portfolio and replace development schemes following successful project sales leaves us well positioned to pursue further value-creating opportunities."

The report for the first nine months of 2019 has been published on Consus' website under investors/ financial reports and presentations (https://www.consus.ag/financial-reports-presentations-2019).

Invitation to the conference call on 12 December, 2019, 13:00 (CET)

The Management Board of CONSUS Real Estate AG invites all investors and interested parties to the results presentation of the Q3 2019 results in a telephone conference on 12 December 2019 at 13:00 (CET).

The results presentation will also be broadcasted live via webcast. Please use the link https://webcasts.eqs.com/consus20191212/no-audio

A presentation of the results will also be available for download on our website https://www.consus.ag/financial-reports-presentations-2019?lang=en.

For the audio broadcast, please use the dial-in numbers listed below. Please join the event 5-10 minutes prior to scheduled start time. When prompted, provide the confirmation code or event title.

France: +33 (0)1 70 72 25 50
Germany: +49 (0)69 2222 25574
Switzerland: +41 (0)44 580 7206
UK: +44 (0)330 336 9125
USA: +1 929-477-0402

Investor Relations
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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 property developer in the top 9 cities in Germany. The development portfolio of Consus had a gross development value (GDV) of EUR 10.3 bn as of 30 September 2019. Consus focuses on the development of entire neighbourhoods ('quartiers') and standardised flats that it forward sells to institutional investors. The in-house construction expertise and the digitalisation of construction processes allow Consus to operate along the entire property development value chain. Consus implements development projects from planning through construction to transfer of ownership, as well as delivering property management and related services through its subsidiaries CG Gruppe AG and Consus Swiss Finance AG. Consus' shares are included in the Scale segment of the Frankfurt Stock Exchange and the m:access segment of the Munich Stock Exchange and are traded on XETRA in Frankfurt, among others.