Instone Real Estate Group AG: 2020 adjusted net income exceeds expectations; 2021 adjusted net income guidance confirmed despite lower expected 2021 adjusted revenues

DGAP-News: Instone Real Estate Group AG / Key word(s): Preliminary Results/Forecast
23.02.2021 / 18:16
The issuer is solely responsible for the content of this announcement.

2020 adjusted net income exceeds expectations; 2021 adjusted net income guidance confirmed despite lower expected 2021 adjusted revenues

- 2020 adjusted revenues of approx. EUR 480 million in line with guidance (EUR 470-500 million)

- 2020 adjusted earnings after tax amount to approx. EUR 40 million, substantially exceeding previously communicated expectations (EUR 30-35 million) as well as analysts' consensus estimates

- 2020 adjusted gross margin of approx. 30% (forecast > 28%) a major driver of positive earnings development

- Based on preliminary earnings, management expects a dividend proposal of EUR 0.26 per share

- 2021 lowered adjusted revenue guidance of EUR 820-900 million (previously EUR 0.9-1.0 billion) reflects increased Covid-19 related risks of delayed regulatory approvals

- 2021 adjusted earnings after tax guidance of EUR 90-95 million confirms previous communication and reflects increased margin expectations

Essen, Germany, 23 February 2021
Instone Real Estate Group AG ("Instone") has published preliminary, unaudited figures for its 2020 financial year. Instone reports 2020 adjusted revenues of around EUR 480 million, in line with its most recent EUR 470-500 million guidance. The effects of the COVID-19 pandemic, in particular with regard to the postponement of sales and construction starts, had a negative impact on revenues. 2020 adjusted earnings after tax have come in at approximately EUR 40 million, exceeding previous company expectations of EUR 30-35 million as well as analyst consensus estimates (median of EUR 35.2 million).
Prices achieved in Q4 institutional as well as retail sales, reduced project costs as well as lower than anticipated platform costs have all contributed to the better than expected bottom line. The positive developments are evidenced by our gross margin, which is expected to be approximately 30% for fiscal year 2020 (forecast > 28%).
The sales volume for the reporting period amounts to around EUR 460 million.

Based on preliminary earnings and the planned payout ratio of 30.0%, the Management Board believes that it will be able to propose a dividend of EUR 0.26 per share for the previous financial year. Instone reiterates its target payout ratio of 30.0% of adjusted earnings after tax also for fiscal year 2021.

Instone continues to benefit from the ongoing positive demand environment for German residential properties in metropolitan regions. However, regulatory approvals for certain Instone projects are at risk to be delayed versus Instone's previous expectations due to the ongoing COVID-19 related lock-down. As a result the management board now expects 2021 adjusted revenues to amount to EUR 820-900 versus previous guidance of EUR 0.9-1.0 billion. Previous expectations with respect to 2021 earnings after tax, however, are confirmed at EUR 90-95 million as the positive pricing environment, a beneficial project sales mix and construction cost benefits across our projects are expected to continue to materialise throughout fiscal year 2021. In line with these expectations management guides for a 2021 adjusted gross margin of 26-27% and 2021 volume of concluded sales contracts of at least EUR 900 million.

"Instone's business model has proven itself to be very resilient, even throughout the COVID-19 crisis. Demand for our newly built properties has increased once again. Despite the current negative effects of the pandemic, we are optimistic about the future and expect a significant increase in revenue and earnings over the coming years", says Kruno Crepulja, Chairman of the Management Board/CEO of Instone Real Estate Group AG.

Instone will publish its final results and annual report for 2020 on 18 March 2021, as planned.

The definitions of the alternative key performance indicators mentioned in the statement can be found in the glossary on the company's homepage at:

Investor Relations
Instone Real Estate Group AG
Burkhard Sawazki
Grugaplatz 2-4
45131 Essen, Germany
Tel.: +49 (0)201 45355-137

23.02.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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