Adler Group (ADJ) Investor Update summary

Audit completion and financial statements

• Audited consolidated financial statements and annual accounts for 2022 and 2023 have been published, both receiving unqualified audit opinions, with no restatements required except for minor cash flow statement presentation.

• Audited annual reports for 2022 and 2023 were published on 30 September 2024 after a lengthy auditor appointment process following the resignation of the previous auditor in May 2022.

• Multiple audit firms were engaged for different entities within the group, with AVEGA Revision S.à r.l. appointed for the consolidated financial statements.

• Unaudited reports for 2022 and 2023, previously published, are now superseded by the audited versions.

• The going concern assumption is based on the successful recapitalisation completed on 19 September 2024.

Recapitalisation and capital structure

• A comprehensive recapitalisation was completed in September 2024, converting most 2L notes into perpetual notes classified as equity, extending bond maturities to 2028–2030, and providing up to €337m in additional liquidity.

• €93m in new money was raised and up to €250m in disposal proceeds retained, strengthening the financial base.

• Bondholders now hold 75% of voting rights via new securities, while common shares retain 25% of voting rights and 100% of distribution rights.

• Two financial restructuring processes were managed over the past two years in a challenging market environment.

• The new financial structure provides a solid foundation for future strategy execution.

Business performance and financial highlights

• Net rental income for 2023 was €210 million, within the guidance range of €207–219 million, with like-for-like rental growth of 5.1% and a record-high occupancy rate of 98.9%.

• The average rent per m² increased to €7.60, and the portfolio was further concentrated in Berlin (71% of units).

• Over €530 million in gross proceeds were generated from asset disposals in 2023, including the sale of the 'Wasserstadt' portfolio at nearly book value.

• FFO 1 and FFO 2 were negative, impacted by higher interest expenses from the New Money Facility and bond interest step-ups.

• EPRA LTV rose to 97.6% (from 74.5% in 2022), and EPRA NRV per share dropped to €4.42 (from €21.62), reflecting asset revaluations and disposals.