Aroundtown SA announces H1 2023 results with continued measures to strengthen the balance sheet

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAWS OR REGULATIONS

AROUNDTOWN ANNOUNCES H1 2023 RESULTS WITH CONTINUED MEASURES TO STRENGTHEN THE BALANCE SHEET

• Recurring net rental income of €589 million in H1 2023 lower by 2% as compared to €602 million in H1 2022 as a result of disposals, offsetting the total like-for-like rental income growth of 3.4%.
• Adjusted EBITDA of €498 million in H1 2023, decreasing by 3% as compared to €511 million in H1 2022.
• Disposals of approx. €545 million signed in 2023 YTD.
• Bonds repurchased in the amount of circa €1.3 billion in 2023 YTD at a 20% discount to par. New bank financing YTD of €790 million at an average margin of 1.4% plus Euribor and average maturity of 7 years.
• FFO I amounting to €175 million for H1 2023 and €0.16 per share, both down 6% YOY.
• Following external valuation of the full portfolio in H1 2023, the like-for-like value declined by 6% and amounted to €1.7 billion. Portfolio value per sqm of €2,518 per sqm as of June 2023.
• De-leveraging measures maintained LTV at 41% in June 2023, slightly up from 40% in December 2022, despite portfolio value decline.  ICR remained strong at 4.5x.
• Unencumbered assets amounting to €20 billion and representing 79% of total portfolio value providing additional financing flexibility.
• Net loss of €1.3 billion in H1 2023 reflecting basic loss per share of 0.95, mainly driven by the negative property revaluations.
• EPRA NTA amounting to €9.1 billion and EPRA NTA per share of €8.4 at the end of June 2023, down from €10.1 billion and €9.3 per share at the end of December 2022.
• Liquidity balance of €2.5 billion which together with expected proceeds from disposals cover debt maturities until mid-2026.
• Full year 2023 guidance slightly updated upward as a result of the solid operational result.

30 August 2023.

Aroundtown (‘the Company’ or ‘AT’) announces results for the first six months of 2023, with recurring long-term net rental income of €589 million, lower compared to €602 million in H1 2022 and Adjusted EBITDA of €498 million, lower compared to the €511 million of respective period of 2022. The decrease in both items was mainly driven by the high volume of disposals, which offset solid operational growth reflected in a like-for-like rental growth of 3.4%. Year-to-date Aroundtown signed disposals of approx. €545 million at slightly below book values, of which ca. €455 million in H1 2023, showing the Company’s ability to sell during challenging market conditions. FFO I amounted to €175 million in H1 2023, or €0.16 per share, decreasing from €186 million or €0.17 compared to the same period of 2022 as a result of the disposals, higher interest rates and higher coupons on perpetual notes. Due to the current market uncertainty and the impact on property valuations, Aroundtown externally revalued its full portfolio in H1 2023 and recorded a like-for-like value decline of 6% or 5.4% after adding back the capex invested in the portfolio. The revaluation loss of €1.7 billion is due to the higher discount and cap rates, impacting all portfolio locations and asset types.

Due to the solid operational performance reflected in a like-for-like increase of 3.4%, and the proactive liability management measures taken by the Company, the FFO I guidance was slightly updated to the range of €310 million to €340 million, from €300 million to €330 million. 

ACTIVE LIABILITY MANAGEMENT MEASURES SUPPORTING DELEVERAGING

Aroundtown maintained its strong liquidity position as of June 2023, covering its debt maturities until mid-2026, with €2.5 billion in cash and liquid assets, and an additional ca. €1 billion from signed but not closed disposals and vendor loans. Year-to-date AT repurchased approx. €1.3 billion (of which approx. €1.2 billion in H1 2023) in nominal value of bonds at an average discount of 20%, using its strong liquidity position helping to further support deleveraging. Utilizing its strong banking relationship, Aroundtown signed €790 million of new secured bank debt year-to-date (of which €430 million drawn in H1 2023), with an average margin of 1.4% plus Euribor and an average maturity of 7 years, providing additional liquidity to the Company and extending the time to refinance. The Company’s sizable pool of unencumbered assets of €20 billion provides financial flexibility and additional liquidity potential. High volume of disposals, bond buybacks at a discount, solid operational profitability, and the suspension of the 2022 dividend have allowed AT to maintain its LTV relatively stable at 41% as compared to 40% at year-end 2022, despite material negative revaluation impacts.

GREEN CERTIFICATION OF OFFICE PORTFOLIO WELL ON TRACK

Utilizing the knowledge of the initial pilot project in the Netherlands, which was started in 2021, Aroundtown expanded the scope to Germany and has been able to further increase the number of green certified office properties in its portfolio. In 2023 year-to-date, 22% of the office portfolio has been green certified, from 2% in 2020. Currently the remaining office properties in the Netherlands that have not yet been certified are in the certification process, which is expected to be finalized in the coming periods. At the same time, Aroundtown is continuing the process of certifying its German office properties. The Company is aiming to gradually increase the share of certified properties within its portfolio.

The Interim Consolidated Report for H1 2023 is available on the Company’s website:

https://www.aroundtown.de/investor-relations/publications/financial-reports/   

For definitions and reconciliations of the Alternative Performance Measures, please see the relevant sections in the pages 46-51 of the Interim Consolidated Report for H1 2023. You can find the Interim Consolidated Report for H1 2023 on AT’s website under Investor Relations > Publications > Financial Reports or under this link:

https://www.aroundtown.de/fileadmin/user_upload/04_investor_relations/downloads/2023/AT_Q2_2023.pdf

About the Company

Aroundtown SA (symbol: AT1), trading on the Prime Standard of the Frankfurt Stock Exchange, is the largest listed and highest rated (BBB+ by S&P) German commercial real estate company. Aroundtown invests in income generating quality properties with value-add potential in central locations in top tier European cities mainly in Germany/NL.

Aroundtown SA (ISIN: LU1673108939) is a public limited liability company (société anonyme) established under the laws of the Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) under number B217868, having its registered office at 37, Boulevard Joseph II, L-1840 Luxembourg, Grand Duchy of Luxembourg.

Contact

Timothy Wright
T: +352 288 313
E: info@aroundtown.de
www.aroundtown.de

DISCLAIMER

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE ORDER), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS COMMUNICATION MUST NOT BE READ, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (EEA) AND THE UNITED KINGDOM, THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE “QUALIFIED INVESTORS” WITHIN THE MEANING OF REGULATION (EU) 2017/1129, AS AMENDED (THE PROSPECTUS REGULATION) (QUALIFIED INVESTORS). ANY PERSON IN THE EEA OR THE UNITED KINGDOM WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN INVESTOR) OR TO WHOM ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. ANY INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT ANY SECURITIES ACQUIRED BY IT IN THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OR THE UNITED KINGDOM OTHER THAN QUALIFIED INVESTORS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA OR THE UNITED KINGDOM TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY AROUNDTOWN OR ANY OF THE MANAGERS OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS REGULATION.

THIS ANNOUNCEMENT MAY CONTAIN PROJECTIONS OR ESTIMATES RELATING TO PLANS AND OBJECTIVES RELATING TO OUR FUTURE OPERATIONS, PRODUCTS, OR SERVICES, FUTURE FINANCIAL RESULTS, OR ASSUMPTIONS UNDERLYING OR RELATING TO ANY SUCH STATEMENTS, EACH OF WHICH CONSTITUTES A FORWARD-LOOKING STATEMENT SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF AROUNDTOWN SA. ACTUAL RESULTS COULD DIFFER MATERIALLY, DEPENDING ON A NUMBER OF FACTORS.