The Grounds Company presentation - The Grounds Real Estate Development AG
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The Grounds
Company presentation
January 2021
The Grounds Real Estate Development AG
Charlottenstrasse 79/80, 10117 Berlin Tel.: +49 30 2021 6866 Fax: +49 30 2021 6849 info@the-grounds-ag.com www.thegroundsag.com
HIGHLIGHTS IN 2020
Value generation from the existing portfolio together with Key Group figures
Core privatisation and development of residential real estate
properties Revenues (in EUR thousands)
business
31,104 >30,000
18,945
13,940
Essential steps for strategic realignment as a residential real
Trans- estate property company completed through the sale of a
formation logistics property in Grünheide
2017 2018 2019 FC 2020
EBIT (in EUR thousands)
Implementation of residential property projects in German
metropolitan regions and in towns and cities with a
Focus positive population trend and good economic prospects 11,367
>6,800
1,355 1,971
• Acquisition of eight real estate property projects with a
2017 2018 2019 FC 2020
Track total purchase volume of approx. EUR 40 million
record • Sale of a logistics real estate property at a selling price
significantly above the current book value of EUR 11.5 Annual result (in EUR thousands)
million
>4,000
4,188
Multiple increase in the profits forecast for 2020. The
Financial company plans a consolidated profit of approx. EUR 4
performance million and revenues in the double-digit millions region. 1,197
54
2017 2018 2019 FC 2020
The Grounds Real Estate Development AG 2
A specialist for German residential properties
Development and existing portfolio Value generation from the
Focus on project development in the residential
existing portfolio and development
real estate property area together with building
up and managing an existing residential property
portfolio
Yields from rental Yields from sales
Focus on Berlin’s affluent suburbs and on aspiring metropolitan regions
Purchase of:
Plots of building land for residential property
construction Financing through banks and the capital market
Residential parks and residential portfolios
Residential companies
Purchasing side: attractive project pipeline of
Freehold apartment packages
ca. EUR 600 million
The Grounds Real Estate Development AG 3
An experienced management team
in the real estate property sector
Management Board
Arndt Krienen (Capital market, finances and law)
Attorney
Formerly the CEO of Westgrund AG and Adler Real Estate AG
Supervisory Board Chairman of DIOK Real Estate AG and Grillador AG
Jacopo Mingazzini (Project developments, acquisitions and marketing)
Business graduate and real estate economist ebs
Formerly Management Director and founder of Accentro GmbH,
formerly the CEO of Accentro Real Estate AG
University lecturer at the IREBS, inter alia member of the Management Board
Arndt Jacopo
of the “Liberal Real Estate Property Circle“ and of the “Association for the
Krienen Mingazzini
Promotion of Residential Real Estate Property in Berlin“
Supervisory Board
Eric Mozanowski (Chairman of the Supervisory Board)
Businessman; formerly CSO of Estavis AG, founder and former member of the Management Board of The Grounds
Real Estate Development AG. Focus on project development, renovating and marketing residential real estate
properties.
Armin Hofmann (Deputy Chairman of the Supervisory Board)
Lawyer and managing partner of the Millennium Group. In his company group, Mr. Hofmann has decades of
experience in real estate property investment and in various other sectors, such as medical technology, software and
the Internet. Moreover, in recent years he has been a member of various oversight committees in the USA and
Germany.
Hansjörg Plaggemars
Eric Business graduate and management consultant; inter alia on the Management Boards of Altech Advanced Materials
Mozanowski
Chairman of the Supervisory AG, Alpha Cleantec AG and 4basebio AG, and undertakes executive management functions in the context of
Board consultancy mandates, including on the Supervisory Board of Azure Minerals Limited.
The Grounds Real Estate Development AG 4
Strong growth in the second half of 2020
July 2020: non-cash capital increase – majority December 2020: economic transfer of a real estate
takeover (89.9%) of Capstone Opportunities AG property portfolio with 250 residential and
commercial units for the existing portfolio.
Equity capital increase of EUR 2.7 million to EUR 17.8 million
Introduction of five projects with a total investment volume Medium- and long-term development potential through
of > EUR 100 million, the majority with building rights opportunities for densification and further energy
remediation measures
This increases the total investment volume of The Grounds
to over EUR 400 million (on turnkey finalisation) Almost fully-let. Annual net rent incomes of around
EUR 0.9 million.
Real estate property portfolio
Stendal/Prignitz
Frankfurt Commercial Development
Plot size m² 29,195
Remscheid Commercial Development
Rentable area m² 16,209
Meppen Residential Single sale
Investment volume EUR ‘000 12,800
Magdeburg Residential Development
Annual net rent incomes EUR ‘000 948
Magdeburg Commercial Development
The Grounds Real Estate Development AG 5
Strong growth in the second half of 2020
December 2020: first already phased privatisation December 2020: acquisition of a plot of land in
project in Berlin acquired. The project consists of Erkner. We plan to construct 34 buildings (17 semi-
two modern residential apartment blocks and com- detached houses) together with 68 parking spaces
prises 24 residential units together with 16 parking not far from the newly-emerging Tesla Gigafactory.
spaces
Building permit to be obtained in 2021 and project
Exclusive marketing to capital investors through a implementation up to the end of 2023
cooperation partner
Apartment blocks
Pankow - Berlin Plot of land in Erkner
Plot size m² 2,025 Plot size m² 9,020
Rentable area m² 1,858 Planned living area m² 3,842
Residential units 24 Number of buildings 34
Year of construction 1997 Planned selling price EUR ‘000 16,048
Investment volume EUR ‘000 6,300
Annual net rent incomes EUR ‘000 189
The Grounds Real Estate Development AG 6
Portfolio
Project developments
Usable area Planned selling price*
capital increase
From non-cash
Location Project in m² in EUR thousands Type
Frankfurt Commercial 9,593 56,600 Development / Forward sale
Magdeburg Residential 5,100 24,450** Development / Single sale
Magdeburg Commercial 12,210 52,000 Development / Forward sale
Total 27,643 136,000
Usable area Planned selling price*
Location Project in m² in EUR thousands Type
The Grounds
Magdeburg Residential 31,343 113,313 Development / Forward sale
Bad Mainly
36,635 146,000 Development / Single sale
Zwischenahn residential
Leipzig Residential 3,136 13,500** Development / Forward sale
Magdeburg Residential 3,460 13,000 Development / Single sale
Erkner Residential 3,842 16,048 Development / Single sale
Total 78,416 301,861
*Planned selling price on completion, according to the current business plan, prior intermediate sale with building rights is possible
**Sale situation: project in Leipzig already fully sold; 98% of the apartments in the Magdeburg project are already sold
The Grounds Real Estate Development AG 7
Portfolio
Portfolio and privatisation
Portfolio
Annual rental Vacancy Rate of
Usable area incomes in EUR rate return
Location Project in m² thousands in m² in % Special feature Type
Closing in December 2020
Stendal Residential 16,914 948 640 7 Investment volume Portfolio
EUR 12.8 million
Privatisation
Annual rental
Usable area incomes in EUR Planned selling margin Special feature Type
Location Project in m² thousands in %
Project introduction via
non-cash capital increase
Meppen Residential 3,211 199 58* Capstone AG. Portfolio / Single sale
New building potential on
the plot
Berlin Expansion potential on
Residential 1,858 189 32* Portfolio / Single sale
Pankow the plot
Total 5,069 388
*before selling costs and contribution effects
The Grounds Real Estate Development AG 8
Strategic realignment through
sale of logistics real estate property
Sale of the commercial plot completed in December Future potential yield:
2020 at a basic selling price significantly above the
current book value of EUR 11.5 million. Income & adjustment bond through additional
purchase price payment of up to EUR 9.75 million is
Earnings forecast in 2020 of EUR 2 million increased possible after successful conclusion of a
to EUR 4 million. development plan procedure
Hangelsberg logistics property
Plot size m² 350,673
Usable area (including open space) m² ca. 58,400 MDSG Hangelsberg property Site plan
Total annual incomes EUR ‘000 ca. 1,000
The Grounds Real Estate Development AG 9
Share information and performance
Basic data
ISIN/Securities Identification Number
Revitalisation of The Grounds share through DE000A2GSVV5 /A2GSVV
management change and positive business Segment Primary market Düsseldorf
development in 2020 XETRA, Quotation Board
Frankfurt Stock Exchange
Management also invests in the company
Number of shares 17,805,517
Market capitalisation (31 Dec. 2020) EUR 50.9 million
THE GROUNDS SHARE
Shareholder structure % EUR (XETRA)
3,5
Millennium Verwaltungs GmbH 17.1
3
Deutsche Balaton Gruppe 16.9
2,5
ZuHause Immobilien Handelsgesellschaft mbH
12.9 2
(E. Mozanowski)
Tarentum GmbH (Single Family Office) 12.4 1,5
RESI Beteiligungs GmbH 10.4 1
Management 5.5 0,5
Free float (approx.) 24.8 0
100.0
The Grounds Real Estate Development AG 10Outlook
An attractive growth story
Strategic objectives
Implementation of the attractive project pipeline of more than EUR 400 million in
the next three years
Stronger focus on the capital market and continuation of the growth pathway
Streamlining the portfolio and concentration on residential real estate properties
Milestones in 2020
Over-fulfilment of the original earnings forecast
Strategic realignment onto residential real estate properties sharpened through
sale of the logistics property
Strong expansion of the residential properties portfolio through investment in
diversified real estate property projects with attractive yields and planned sale
margins completed
Outlook
Closing the Bad Zwischenahn purchased acquisition in 2021, and further
expansion of the real estate properties portfolio is planned
The Grounds Real Estate Development AG 11Appendix
Many thanks
for your attention!
The Grounds Real Estate Development AG 12Consolidated Group income statement (IFRS)
2020 half-year 2019 2018
EUR EUR EUR
Sales revenues 555,263.63 13,939,957.67 31,104,058.50
Change in value of real estate properties held as financial investments 1,500,000 35,589,670 2,045,444.00
Other operating income 471,326.99 1,303,391.64 2,304,329.81
Inventory changes 15,687.26 -1,147,113.32 -154,436.28
Overall performance 2,542,277.88 14,131,825.66 35,299,396.03
Cost of materials -115,452.23 -9,515,087.56 -20,806,396.25
Personnel costs -267,410.76 -443,875.31 -543,146.62
Depreciation and amortisation costs on intangible assets and on plant
-12,819.11 -32,414.54 -35,946.74
& equipment
Other operating expenses -725,736.98 -2,169,518.03 -2,546,809.64
Operating result (EBIT) 1,420,858.80 1,970,930.22 11,367,096.78
Earnings from associated companies 0.00 -7,393.09 1,843.33
Interest income 30,908.46 75,299.56 56,240.95
Interest expenditure -120,134.25 -2,056,567.24 -2,779,105.05
Earnings before taxes (EBT) 1,331,633.01 -17,730.55 8,646,076.01
Taxes on income -310,210.61 71,968.39 -4,458,334.84
Consolidated profit 1,021,422.40 54,237.84 4,187,741.17
Earnings per share (EUR) 0.06 0.00 0.23
The Grounds Real Estate Development AG 13Consolidated balance sheet (IFRS)
30.06.2020 31.12.2019 31.12.2018 30.06.2020 31.12.2019 31.12.2018
ASSETS LIABILITIES
EUR EUR EUR EUR EUR EUR
Long-term assets 13,728,194.74 11,167,453.97 11,298,996.88 Equity capital 13,015,384.02 11,993,961.62 12,558,109.01
Intangible assets 11,807.85 12,479.65 16,654.65 Attributable to parent
11,920,675.87 10,964,564.20 10,869,976.12
company shareholders
Goodwill 777,753.85 777,753.85 777,753.85
Allocable to the non-
Property, plant & equipment 176,975.14 144,400.00 228,413.87 1,094,708.15 1,029,397.42 1,688,132.89
controlling shareholders
Real estate properties held as 11,926,830.05 9,600,000.00 9,500,000.00 Long-term liabilities 6,649,486.52 4,300,839.09 16,719,521.24
financial investment
Financial liabilities 4,345,537.59 2,467,447.92 15,070,783.89
Shareholdings 16,602.79 25,129.79 9,537.00
Other liabilities 79,904.01 97,794.54 0.00
Company shares accounted for 0.00 0.00 24,202.92
using the equity method Deferred income tax
2,224,044.92 1,735,596.63 1,648,737.35
liabilities.
Other financial assets 10,000 10,000.00 5,000.00
Short-term liabilities 17,749,051.84 16,116,224.96 27,090,653.71
Deferred income tax assets 808,225.06 597,690.68 737,434.59
Provisions & accrued
Short-term assets 23,685,727.64 21,243,571.70 45,069,287.08 697,032.35 655,611.57 2,346,222.26
liabilities
Inventories 17,650,660.11 14,174,059.71 15,609,504.53 Financial liabilities 11,117,538.62 18,839,159.97 18,839,159.97
Accounts receivable from trading 4,928.30 153,797.24 19,392,723.98 Advance payments
0.00 0.00 21,196.80
received
Other receivables 4,404,699.51 5,585,343.06 7,658,463.08 Current income tax
4,110,658.86 4,120,177.16 4,549,651.93
liabilities
Liquid funds 1,625,439.72 1,330,371.69 2,408,595.49
Trade accounts payable 489,012.11 770,879.86 886,616.42
Balance sheet total 37,413,922.38 32,411,025.67 56,368,283.96
Other liabilities 1,334,809.90 283,533.41 447,806.33
Balance sheet total 37,413,922.38 32,411,025.67 56,368,283.96
The Grounds Real Estate Development AG 14Financing structure
The Grounds – Financing strategies Financing structure as on 30 June 2020
Short-term financing along the project development phases
Addition of subordinated loans to utilise further growth
opportunities
Increase in financial liabilities through the integration of 89.9% of EUR 1.2 million
Capstone AG and other purchased acquisitions in the second
half-year of 2020
EUR 14.3
million
Nominal value Average interest
Financial liabilities
(EUR rate (%)
Bank loan 14,272 2.5
Shareholder loan 1,203 12 Bank loan Shareholder loan
Total 15,475 3.3
The Grounds Real Estate Development AG 15DISCLAIMER
This document is not a securities prospectus, and the information contained therein does not constitute an offer to sell, or a solicitation of an offer to buy, securities of The Grounds in the
Federal Republic of Germany or in any other country, specifically not if such an offer or solicitation is prohibited or not approved.
This document was prepared exclusively by The Grounds Real Estate Development AG“THE GROUNDS”) solely for informational purposes and has not been independently verified and no
representation or warranty, express or implied, is made or given by or on behalf of The Grounds . Nothing in this document is, or should be relied upon as, a promise or representation as to
the future.
This document contains forward-looking statements based on current estimates and assumptions made by the senior management of The Grounds . Forward-looking statements are
characterised by the use of words such as “expect,” “intend,” “plan,” “predict,” “assume,” “believe,” “estimate,” “anticipate” and similar forward-looking phrases. Such statements are not to
be understood as guarantee that predictions of this sort will prove to be correct. In particular, any statements on acquisitions presuppose the actual signing of the necessary contracts or the
successful procurement of the necessary equity and debt capital. The future development and actual results achieved by The Grounds and its affiliates are subject to a number of risks and
uncertainties, and may therefore differ materially from these forward-looking statements. Many of these factors are beyond The Grounds ’s control and cannot be accurately appraised in
advance, including the future economic environment or the actions of competitors and other market players. The Grounds does not intend to update its forward-looking statements. Neither
The Grounds nor any of its respective directors, officers, employees, advisors, or any other person is under any obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak of the date of this document. Statements contained
in this document regarding past trends or events should not be taken as a representation that such trends or events will continue in the future. No obligation is assumed to update any
forward-looking statements.
This document contains certain financial measures (including forward-looking measures) that are not calculated in accordance with IFRS and are therefore considered "non-IFRS financial
measures". Such non-IFRS financial measures used by The Grounds are presented to enhance an understanding of The Grounds ’s results of operations, financial position or cash flows
calculated in accordance with IFRS, but not to replace such financial information. A number of these non-IFRS financial measures are also commonly used by securities analysts, credit
rating agencies and investors to evaluate and compare the periodic and future operating performance and value of other companies with which The Grounds competes. These non-IFRS
financial measures should not be considered in isolation as a measure of The Grounds ’s profitability or liquidity, and should be considered in addition to, rather than as a substitute for, net
income and the other income or cash flow data prepared in accordance with IFRS. In particular, there are material limitations associated with the use of non-IFRS financial measures,
including the limitations inherent in determination of each of the relevant adjustments. The non-IFRS financial measures used by The Grounds may differ from, and not be comparable to,
similarly-titled measures used by other companies. Certain numerical data, financial information and market data (including percentages) in this document have been rounded according to
established commercial standards. Furthermore, in tables and charts, these rounded figures may not add up exactly to the totals contained in the respective tables and charts.
Accordingly, neither The Grounds nor any of its directors, officers, employees or advisors, nor any other person makes any representation or warranty, express or implied, as to, and
accordingly no reliance should be placed on, the fairness, accuracy or completeness of the information contained in the document or of the views given or implied. Neither The Grounds nor
any of its respective 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 there-with. It should be noted that certain financial information relating to The Grounds contained
in this document has not been audited and in some cases is based on management information and estimates.
This document is intended to provide a general overview of The Grounds ’ business and does not purport to include all aspects and details regarding The Grounds. This document is
furnished solely for your information, should not be treated as giving investment advice and may not be printed or otherwise copied or distributed. Subject to limited exceptions described
below, the information contained in this document is not to be viewed from nor for publication or distribution in nor taken or transmitted into the United States of America (“United States”),
Australia, Canada or Japan and does not constitute an offer of securities for sale in any of these jurisdictions. Any securities offered by The Grounds have not been, and will not be,
registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction of the United States and such securities may not
be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state
or local securities laws. This document does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person or in any jurisdiction to whom
or in which such offer or solicitation is unlawful.
The information contained in this document may not be distributed outside the Federal Republic of Germany, specifically not in the United States of America, to US persons (as defined in
Regulation S under the United States Securities Act of 1933) or to publications with a general circulation in the United States, unless such distribution outside the Federal Republic of
Germany is prescribed by mandatory provisions of applicable law. Any violation of these restrictions may constitute a breach of the securities laws of certain countries, in particular those of
the United States of America. Securities of The Grounds are not publicly offered for sale outside the Federal Republic of Germany.
By receiving this document, you agree to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. This
document does not constitute investment, legal, accounting, regulatory, taxation or other advice.
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