Adler Group S.A. with continued solid operational performance in Q1 2024

• Net rental income of €51m in Q1 2024, 4% lower compared to €53m in Q1 2023 due to portfolio disposals in 2023
• Like-for-like rental growth of 5.1%, vacancy rate at 1.7%, average residential rent at €7.63/sqm/month
• FY 2024 net rental income guidance confirmed
• Completed disposals of the development projects in Berlin and Leipzig with total cash proceeds of €43m received year-to-date
• Rising interest costs and high one-off expenses for restructuring continue to weigh on net income
• Binding agreement with bondholders for a comprehensive recapitalization enables extended runway for orderly disposal of assets and strengthening of the group’s equity position

Luxembourg, 28 May 2024 – Adler Group S.A. ("Adler Group") announces its results for the three-month period ending March 2024 with a solid operational performance. Net rental income decreased only slightly by 4% from €53m in the previous year to €51m due to portfolio sales that have since then been completed, e.g. the Wasserstadt transaction in 2023. The decrease in size was partly compensated by like-for-like rental growth of 5.1% resulting in an average residential rent of €7.63/sqm/month for the core portfolio as per March 2024. The operational vacancy rate stood at 1.7% as per end of Q1 2024. Adler Group confirms its guidance for the net rental income expected in the full year 2024 between €200m and €210m.

As per 31 March 2024, Adler Group’s residential core portfolio (not comprising units owned by the subsidiary BCP) includes 25,015 units, with the majority of 17,733 units located in Berlin. Compared to the year-end 2023, the portfolio value remains unchanged at €4.2bn as there was no portfolio revaluation in Q1 2024. The next portfolio revaluation will be concluded in Q2 2024.

In Q1 2024, Adler Group signed disposals of condominium units in Berlin for a total sales price of c. €6m. Additionally, yielding asset sales for a total price of c. €4m were signed in Q1 2024. The disposal of the development project Wasserstadt Tankstelle in Berlin was completed in Q1 2024 with cash proceeds of €17m received. Subsequent to the Q1 reporting period, the Leipzig FourLiving VauVau development project was sold to the city of Leipzig with net proceeds of €26m received.

“We continue to make good progress step by step in various parts of our business – operations, asset disposals and corporate financing. In particular, by reaching a binding agreement with a large part of our bondholders for a comprehensive recapitalization to reprofile maturities and strengthen the equity position of the Group, we will stabilise the platform for the years to come. While current market conditions are still somewhat adverse, we expect better conditions in our industry over the period of our reprofiled maturities” comments Thierry Beaudemoulin, CEO of Adler Group.

The income from operating activities amounted to €12m in the first three months of the current financial year (previous year: minus €32m). The net result of minus €81m (previous year: minus €55m) was negatively impacted by extraordinary advisory costs for the restructuring update as well as increased interest expenses. The weighted average cost of debt stood at 6.3% as per March 2024. At the end of Q1 2024, Adler Group had cash and cash equivalents of €353m, a reduction of €25m compared to the December 2023 balance sheet.

The negative net earnings situation is also reflected in the financial key figures FFO, EPRA NTA and EPRA LTV. FFO I was negative at minus €27m (previous year: plus €16m) due to the increasing interest burden. The EPRA NTA amounted to €448m, or €2.96 per share, as of 31 March 2024, compared to €529m or €3.49 per share as of 31 December 2023. EPRA LTV stood at 99.1% (97.6% at the end of 2023). Following the successful amendment of the terms and conditions of the bonds as part of the restructuring plan, Adler Group is currently not subject to any financial covenants.

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