Aroundtown : FY 2019 Preliminary Financial Results Presentation

FULL YEAR 2019

PRELIMINARY

FINANCIAL RESULTS

MAR 2020

FY 2019 PRELIMINARY RESULTS

	2019		2018
	in € millions
Revenue	894.8		747.1
Net rental income	765.7		633.0
Adjusted EBITDA	772.7		606.0
FFO I	503.4		405.7
FFO I per share	0.43		0.39
FFO I per after perpetual notes attribution (in €)	0.38		0.34
FFO II	814.3		574.6
ICR	4.8x		4.7x
Profit for the year	1,709.1		1,827.8
EPS (basic) (in €)	1.12		1.54
EPS (diluted) (in €)	1.11		1.49
Dividend per share (in €)	0.28*		0.25

*2019 dividend distribution is subject to the next AGM approval and based on a payout ratio of 65% of FFO I per share

SOLID ORGANIC GROWTH FROM INTERNAL SOURCES

OCCUPANCY	TOTAL	IN-PLACE
LIKE-FOR-LIKE
L-F-L	RENT L-F-L
+0.6%	+4.2%	+3.6%
2019	2019	2019

2019 full audited financial results will be published on March 26th, 2020	Berlin

	Dec 2019	Dec 2018
	in € millions
Total Assets	25,444.7	19,040.8
Total Equity	13,378.9	9,944.3
Cash and liquid assets	3,043.8	1,600.6
Unencumbered assets ratio	81%	72%
Equity Ratio	53%	52%
Loan-to-Value	34%	35%

	NAV	EPRA NAV	EPRA NAV
	including
in € millions unless otherwise indicated			perpetual notes
Dec 2019	11,942.8	10,633.4	13,117.4
Dec 2019 per share (in €)	9.8	8.7	10.7
Per share growth(dividend adjusted)	+23%	+16%	+20%
Dec 2018	9,309.5	8,742.4	10,290.1
Dec 2018 per share (in €)	8.2	7.7	9.1

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HIGH LIQUIDITY, CONSERVATIVE FINANCIAL POLICY

AND DEFENSIVE CAPITAL STRUCTURE

AROUNDTOWN BENEFITS FROM STRONG CAPITAL STRUCTURE WITH BEST IN CLASS METRICS AND HIGH CASH BALANCE

• Substantial amount ofcash balance of €2.8bn(March 2020, incl. TLG)
• Low leverage sustained on a long term basis
• Double layered headroom:
• • Headroom to limits of internal conservative financial policy
  • Each of the bond covenants is met with a significant headroom
• High unencumbered ratio of 73%(€16.2bn)
• Long standing track record of successfully accessing the capital markets in several different instruments (straight bonds, convertible, mandatory convertible, perpetual, equity) in many different countries and currencies (all hedged to Euro)
• Longstanding relationships with large range of financial institutions, providing further capital sources
• Long average debt maturity of 6.8 years with no significant maturities in upcoming years

BEST IN CLASS RATIOS AND METRICS

(INCLUDING TLG)

€16.2bn	6.8
Unencumbered
assets	years Ø
73%	maturity
by rent
94%	1.6%
interest	Ø cost of
hedged	debt

SIGNIFICANT HEADROOM TO ALL ITS

COVENANTS

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Frankfurt

VERY STRONG EXCESS LIQUIDITY TO PROVIDE STABILITY

AND ABILITY TO CAPTURE ATTRACTIVE OPPORTUNITIES

	Overview for the next 24 months
Liquidity Sources	Liquidity Uses
Cash balance - March 2020	~€2,800 million	Debt repayments	€387 million
FFO - Aroundtown*		Group dividend**	€830 million
€1,058 million	Dividend for perpetual and mandatory convertibles
(Q4 19 Annualized for 2 years)	€207 million
		holders
FFO - TLG (AT's share)*	€225 million	Committed acquisitions and capex	€150 million
(Q3 19 Annualized for 2 years)
Total of €4,083 million	Total of €1,574 million

Total excessliquidity of over €2.5 billion

Substantial cash position provides strength and firepower

to capture attractive acquisitons opportunities

In addition, the group currently hasa high pool of unencumbered assets of €16.2bnwhich isnot included above and is another source ofadditional potential liquidity

*Based on last published quarterly results. 2020 guidance will be published with full year results	4

** 65% of the annualized FFO of AT and TLG, subject to AGM approval

Hamburg

HIGHLY DIVERSIFIED OVERVIEW PROVIDES STABILITY

The combined portfolio of AT and TLG provides additional strength and diversification

• Aroundtown is showing the highest asset type diversification among the commercial real estate market. The largest asset type is office which together with the resilient German residential makes up around 60% of the portfolio.
• The portfolio is focused on the strongest economies in Europe, Germany and the Netherlands, both AAA rated countries
• Focus on central locations of top tier cities (Top 3 cities are Berlin, Munich, Frankfurt)
• Within each asset class, Aroundtown focuses on a very high tenant diversification, as well as industry diversification of its tenants. Aroundtown has of over 4,000 tenants and the Top 10 tenants make up only 20% of rent
• Focus on top tier locations which embeds potential for asset type conversion when market dynamics shift
• Most diverse and longest lease structure with a long WALT of 7.9 years

Frankfurt

STRONG DIVERSIFICATION AMONG ASSET CLASSES

WITH DIFFERENING FUNDAMENTAL DRIVERS

€26 BN

*Proforma including TLG portfolio and proportion in GCP including land for development & other rights

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HIGHLY DIVERSIFIED OFFICE PORTFOLIO

• Each of the top office locations has different key industries driving the business demand. Therefore, AT's tenants have strong presence in a diverse universe of key sectors.
• Highly diversified and thus low dependency in terms of
• • Locations (Top 3 cities are Berlin, Frankfurt, Munich)
  • Strong tenants from various different industries
  • • Very diversified industry sectors. Top industries are Governmental, Insurance & Banking, IT, Health Care, Energy, Infrastructure, Telecommunications, Professional services
    • Insignificant amount of office tenants with high sensitivity to the COVID- 19 outcomes, such as air travel, oil and tourism
    • Diverse tenant base with strong top tenants, such as German and Dutch Government, Deutsche Bundesbank, Siemens, Deutsche Bahn, Orange, Allianz etc.
    • Diversified lease structure with long WALT of of 4.5 years

WELL LOCATED OFFICES IN TOP TIER CITIES MAINLY IN GERMANY

AND NETHERLANDS (INCL. TLG)

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Cologne

HOTEL PORTFOLIO

	WELL DISTRIBUTED HOTEL PORTFOLIO ACROSS EUROPE
➢Hotel portfolio consisting of 24% of the total portfolio	WITH A FOCUS ON THE 4 STAR CATEGORY
(INCL. TLG)

• Portfolio including 177 hotels well distributed mainly in top tier cities in Europe
• The rental agreements are double or triple net, fixed plus CPI linked. The lease agreements are fixed and have no variable element or links to operational results of the hotel. Lease periods arelong-term (up to 25 years). WALT of hotels is 14.8 years
• Lease agreements include set of strong securities, ranging from bank guarantee, parent guarantee, pledge over bank accounts, pledge over FF&E, and more
• 84% of the hotels are branded 4 star hotels, benefiting from the largest diverse market segment, including business and leisure - which is expected to recover fastest
• Options to convert hotels to micro apartments in case of long term travel shut down

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Berlin

HOTEL PORTFOLIO

Current update from our hotel tenants

• Hotel operators have insurances which are expected to cover business interruptions, which is expected to cover losses from the current situation
• Hotels which were forced to shut down by the government can claim for government compensation and/or business interruption insurance
• 7 Center Parcs were forced to shut down two weeks until the 6thof April
• 2 hotels located in Germany were forced to shut down
• 4 hotels closed down voluntarily and use the opportunity to accelerate the capex works planned for 2020
• All tenants are taking extreme cost savings measures

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Frankfurt

TENANTS AND BRANDS

Fixed of 10-25 years (WALT of 15 years incl. TLG) leases to over 30 different strong third party hotel operators, operating with high profitability for many years

Hilton group

Marriott group

Wyndham Brands

Radisson brands

IHG brand

Accor group

No dependency on any single tenant

No single tenant with more than 5% of the group's rental income

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Paris

FURTHER DIVERSIFICATION THROUGH ADDITIONAL ASSET TYPES

ADDITIONAL ASSET CLASSES INCLUDE RESIDENTIAL, RETAIL, WHOLESALE AND LOGISTICS

• 12% of the portfolio (through GCP) includes affordable residential properties, mainly in Germany, considered the most resilient real estate asset type in Europe
• • No material direct impact from COVID 19 on the underlying business operations
  • This segment is very resilient in the current market disruption
• Limited exposure to retail properties, which comprises only 10% of the total portfolio
• • Largest retail portfolio is focused onfood-anchored properties catering strong stable demand from local residential neighbourhoods. Food anchored properties are mainly long-leased retail boxes in locations with limited competition, such as EDEKA, NETTO, REWE, PENNY, LIDL and Kaufland
  • This segment is resilient in the current market disruption
• Logistic and wholesale portfolio consist of 7% of the total portfolio. This segment includes mainly last mile wholesale and logistic properties which are well located for these purposes. This segment is very resilient in the current market disruption.

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Cologne

SUBSTANTIAL HEADROOM TO COVENANTS

• Each of the bond covenants is met with a significant headroom. Internal financial policy is set at stricter levels
• ECB eligibility: Bonds issued under the EMTN Programme (Listed in the EU)*
• The bonds are unsecured and have the below covenant package:

Overview of Covenant Package

Covenant Type	EMTN programme covenants
1	Limitation on Debt	✓
	Total Debt / Total Assets	<=60%(1)
2	Limitation on Secured Debt	✓
	Secured Debt / Total Assets	<=45%(2)
3	Maintenance of Unencumbered Assets	✓
	Unencumbered Assets/Unsecured Debt	>= 125%(3)
4	Maintenance of Coverage Ratio	✓
	Adjusted EBITDA / Net Cash Interest	>=1.8x
5	Change of Control Protection	✓
Notes: 1)	Total Net Debt / Total Net Assets

• 1. Secured Net Debt / Total Assets
  2. Net Unencumbered Assets / Net Unsecured Indebtedness
• Excluding the NOK & HKD issuances

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Amsterdam

DISCLAIMER

IMPORTANT:

This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by the recipient to any other person. Receipt of this presentation constitutes an express agreement to be bound by such confidentiality and the other terms set out herein. This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of the Group ("forward-looking statements"). All forward-looking statements contained in this document and all views expressed and all projections, forecasts or statements relating to expectations regarding future events or the possible future performance of Aroundtown SA or any corporation affiliated with Aroundtown SA (the "Group") only represent the own assessments and interpretation by Aroundtown SA of information available to it as of the date of this document. They have not been independently verified or assessed and may or may not prove to be correct. Any forward-looking statements may involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. No representation is made or assurance given that such statements, views, projections or forecasts are correct or that they will be achieved as described. Tables and diagrams may include rounding effects. This presentation is intended to provide a general overview of the Group's business and does not purport to deal with all aspects and details regarding the Group. Accordingly, neither the Group nor any of its directors, officers, employees or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance should be placed on, the accuracy or completeness of the information contained in the presentation or of the views given or implied. Neither the Group nor any of its directors, officers, employees or advisors nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection therewith. Aroundtown SA does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation.

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