Tag Immobilien Ag U/Adr

Yeah, many thanks and good morning all. This is Martin from TIE. Many thanks for dialing in into our Q1 2025 conference call. As always, I will run through the presentation, which should be perhaps today quite a short one, as we just have spoken six or seven weeks ago in connection with the publishing of our annual report. And Q1 normally is not a dead spectacular quarter. But yeah, let's start with the presentation and then of course we have time to discuss afterwards. So let's take a quick look at the highlights slide on page number four of the presentation. We think it's fair to say that it was a good start into the year. So if you look at the FFO1 development, we've been even slightly above, quite strong, fourth quarter 2024 with 44.9 million. But perhaps even more important was the good development in the operational segment. That means the EBITDA adjusted from the rental business was up to 62.8 billion in Q1 2025. And if you compare it with the previous quarter and also with the first quarter of 2024, this is quite a strong increase despite the disposals that we still had in financial year 2024 in Germany that have been now effective at the end of 2024 and at the beginning of 2025. So therefore, operational results are still growing despite these disposals. Very strong rental growth in Germany and in Poland, 3.0% like-for-like rental growth in both markets. Looking at the stage segment, In Poland, the result was lower in Q1 2025. It's just 5 million compared to the previous quarter and also compared to the first quarter of 2024. But this is not a concern for us. It's more, let's say, a technical issue, you know, that the results always depends on the number of units handed specifically over in one quarter. And we already expected that the first quarter of this year is weaker simply due to lower number of handovers planned. But our guidance still assumes that we have more handovers in the course of the year. And we are very confident that this will happen. So we should see very naturally higher earnings in the next quarters in line with our guidance. Quite positive development in the number of units sold. So we sold almost close to 600 units in the first quarter in Poland of 2025 compared to roughly 500 units in the previous quarter and still on a high sales price level. And we reported that the sales prices in Poland have increased really significantly So all in all, nearly 45% increase in the last three years. We still see a year-on-year increase of around 5%, or in some markets even up to 10% in Poland. So therefore, on this high basis, a higher number of units sold should be a good sign. APRA NTA and the LTV developed very positively in the first quarter of 2025. So the APRA NTA per share stands now at 19 euros and 75 cents. This is a 3% increase compared to the previous quarter and a 6% increase year on year. LTV was reduced to 45.6%. So we are basically at our LTV target, which is approximately 45%. This is a reduction of 130 basis points in comparison to year end 2024. Reasons for that are, of course, our really strong operational cash flow that we have from our ongoing business, but also some disposals that we already signed in financial year 2024, now closed in the first quarter of 2025. And we also benefited from a little bit stronger slotting at the end of the first quarter. If you ask us, well, what's the trend regarding APRAE TV and LTV when it comes to the property valuation, I mean, we cannot give a very specific guidance for the half-year valuation, but for us it's clear that first year we will see in Poland further value growth, so as we have seen in the past two or three years. And for us it's also clear, and perhaps you have seen our comment in the press release, that in Germany, regarding the property valuation, the times of devaluation is behind us. So we already saw in the second half of 2024 a value increase of 0.9% in the German property portfolio. Again, we cannot give a specific guidance in terms of number, but a similar value increase like we saw in the second half of 2024 for the first half of 2025 in Germany would be a kind of base case for us. And that means simply, and that should be good news, that we are now entering a time where values in Germany are at least slightly growing again. Looking at our liquidity position, this is in the meanwhile very strong. So we have nearly, or exactly, 1 billion euros of free cash in the balance sheet. And this strong cash position was also the result of a quite successful issuance of convertible bonds of $332 million in March 2025. And this forms the basis not only for the refinances that we have in the next two, three years in terms of upcoming unsecured debt maturities. So this is basically all done, including the convertible bonds of 470 million that is due in August next year. This is, and that's also important to mention, really a very good basis to grow our Polish rental portfolio in the next years, which is clear for us. So a preference when it comes to capital allocation. Today we confirm all guidance for financial year 2025. If you look at the runway for FFO1, we should be on a very good way to achieve the guidance. I explained that the net income from sales in Poland in the first quarter is seasonally or technically lower. So we're still confident or very confident that we achieved the full year guidance. And we will also distribute a dividend after two years of dividends as pension when it comes to this year's AGM, which takes place tomorrow. We will also offer, as already announced, to our shareholders a choice between cash dividend and new TAG shares. Just to make clear, potential new TAG shares that come from script dividend are already factored into the guidance. So when we confirm the guidance for financial year 2025, It's very clear any potential new shares from this dividend will not lead to a change in the guidance when it comes to the FFO, one per share, for example. So the script dividend could support our growth opportunities that we simply see as of today, especially in the Polish rental market. On the next slides, you'll see some more details on the highlights of our German and Polish portfolio. I think we can skip that. Let's take a quick look at page number eight, where we have, as always, the calculation of the EBITDR, the FFO1, and the AFFO. I mean, I already mentioned the most important developments, but just a quick comment on the AFFO development, which is up year on year by around 6 million. but not year-on-year, but quarter-on-quarter. So we ended up with $27.9 million compared to $21.4 million quarter-on-quarter. So generally good that we increased our AFFO. And as explained, we also had a slightly increased FFO1. But don't read too much into a kind of swing, for example, in capitalized maintenance that you see here, which was reduced by roughly $8 million. This is simply something seasonally. So for the full year 2025, we expect when it comes to capex levels, so whether this is capitalized maintenance or monetization capex, roughly the same amounts like in the previous year. Page 9 shows the APRA NTA calculation. Again, 3% increase quarter-on-quarter and a 6% increase year-on-year. And the 6% increase year-on-year, just to make this clear, includes also the evaluation that we still had in the first half of 2024. So in rough numbers, we know if the APRA NTA is based on a zero validation result, we achieved currently an annual growth of around seven to 8%. So if we achieve that's even a slight value increase in Germany, we are quite quickly at a double digit APRA NTA growth on a year on year basis, which would be a quite good figure. Page number 10 shows the financing structure. As mentioned, we are regarding the LCV almost to our LCV target. Perhaps a comment on discussions with rating agencies. You see here on the bottom right that we have two investment grade ratings, both on the same levels of BA3 at Moody's and BBB- and S&P, both as a stable outlook. S&P finished their review in April, 2035 and confirmed the rating. We're right now in discussions with Moody's in the annual rating meeting. I think they will publish something in the next weeks. It's fair to say that with both rating agencies, we are on a good way towards a clear positive trend regarding the rating. Perhaps we need some more patience when it comes to really positive rating actions, but simply looking at the financial metrics that we have, we are already above our current rating level. So that should be a really big basis for improvement in ratings in the next quarter. Page number 11 shows the maturity profile. I already mentioned that we basically have refinanced all upcoming capital markets debt in the next years, especially the 470 million convertible bonds that we will repay from existing cash and also the 125 corporate bond, which matures in June this year. You see in these orange boxes outstanding bonds that we, or more specifically our subsidiary Robic, has issued in the Polish market. We will continue issuing these Polish bonds because we think it's a value that, first of all, Robic has its own financing sources and had this for many years and is here quite strong and active in the Polish market. These are strategies simply to keep the sales business, which is mostly represented by Robic, self-financing, and therefore these smaller Polish bonds will also continue in the future. Page number 13 shows some operational developments in Germany. So it's already mentioned a good like for like rental growth with 3% including vacancy reduction and 2.5% and excluding impacts from vacancy reduction. Top right of this slide shows you our total maintenance and capex levels on a per square meter basis. Again, the 21.1 euros per square meter is somewhat lower than three years before. But for the full year, we expect a similar level like in the past three years. Page 14 shows the vacancy rate development in our German portfolio. We should not be concerned by a slight increase in vacancy rate by 30 basis points in the first quarters. If we look at Q1 2024, Q1 2023, you will also see a slight increase in this case by 20 basis points. But honestly, the difference between 20 and 30 basis points is more rounding difference. So therefore, Very similar like in the first quarter of the previous years, we saw a slight increase for the full year. We are still very optimistic because of the strong demand that we see in the market that we can reduce vacancy further compared to the 3.6% that we had at the beginning of the year. Let's take a quick look at the Polish portfolio when it comes to the rental portfolio. You see the details on page number 16, so 3,350 units now on the market. Total vacancy rate of the portfolio stood at 6.3%, but this little bit higher vacancy rate compared to the end of the previous year is simply the effect of some units that are finished in the first quarter of 2021. So if we just look at units that have been on the market for more than one year, the vacancy rate of that unit is very low. It stands around 1.9%. I think I've already mentioned main trends regarding sales results in Poland and handovers. You'll see more details in comparison to the previous quarters on the pages number 17 and 18. So therefore, finally, a quick comment on page number 20, which shows you the guidance for financial year 2025. As said, we leave all guidance unchanged. First quarter of the year should have been a good start, especially looking at the development of our rental business. So regarding the EBITDR and also the FFO1 in total, we are quite comfortably positioned with our current guidance. So this should be a good basis for the following quarters to come. Yeah, that's it already from my side as a quick overview. But I'm, of course, now very happy to take your questions.

The first question from the phone comes from Mariusz Pastu with Bernstein. Please go ahead.

Hi, good morning. Thank you for taking my questions. Both actually relate to Poland. Maybe if we split out sales and handovers into two separate questions. Firstly, really on the quantum of sales in Poland, I think if we annualize the first quarter, you're tracking slightly below your guidance for 450 million euros this year. So I wanted to check how demand is trending. and if you're still seeing support on pricing. And then question two on handovers, a slower start, but technical, as you mentioned. So what proportion of the 2,100 unit handovers you target this year are secured? We're just trying to ascertain the level of visibility you have here. Thank you.