LEG Immobilien SE looks back on a strong financial year 2024: Significant earnings growth - portfolio valuation stable

• AFFO rises to over EUR 200 million (+10.6 %)
• Convincing operating performance with vacancy rate l-f-l of 2.3 % (-30 bps), rental growth l-f-l of 3.4 % (+20 bps)
• Dividend proposal of EUR 2.70 per share
• Stabilization of property valuation (+0.4 % in H2-2024)
• AFFO in the range of EUR 205 to 225 million
• BCP integration on schedule – positive effects on earnings from 2026

LEG Immobilien SE performed very well in the 2024 financial year. At EUR 200.4 million, the key earnings indicator, AFFO, is slightly above the mid-point of the profit forecast, which the company had already raised significantly in mid-2024. The main drivers remain the continued high demand for affordable housing and a strong letting result. With the completion of the majority acquisition of Brack Capital Properties on January 3, 2025, LEG is dynamically expanding its portfolio by around 9,000 apartments.

Lars von Lackum, CEO of LEG Immobilien SE, says: "LEG delivers on promises: we were once again able to achieve or exceed our ambitious financial and operational targets in 2024. With a proposed dividend of EUR 2.70 per share for the 2024 financial year, our shareholders should participate from the good business performance. It is particularly noteworthy that earnings per share have risen continuously even in the past years of crisis in the real estate industry. With the acquisition of the majority stake and the start of the integration of over 9,000 apartments from Brack Capital Properties, we have already set an exclamation mark at the beginning of 2025 – at the same time, we remain prudent and are continuing our sales program in parallel."

Key figures on target or better

The EPRA vacancy rate (l-f-l) fell by a further 30 basis points year-on-year to 2.3 percent.

Like-for-like rent rose by 3.4 percent. The forecast rental growth for the 2024 financial year has been between 3.2 and 3.4 percent (l-f-l). The increase is solely due to rental growth in the free-financed segment, as the cost rents for subsidized housing, which accounts for almost 20 percent of the LEG portfolio, remained virtually unchanged following the regular adjustment in the previous year. The average basic rent for comparable space is therefore now EUR 6.80 per square meter or around EUR 440 per month for an average LEG apartment measuring around 65 square meters. LEG thus continues to focus clearly on the "affordable housing" segment for people on low and medium incomes.

AFFO improved by 10.6 percent to EUR 200.4 million (FY 2023: EUR 181.2 million). LEG was thus even able to more than compensate for the positive one-off effect from the sale of green energy from its biomass cogeneration plant, which had contributed EUR 25.8 million to AFFO in 2023. AFFO reflects free cash flow. LEG established AFFO as key performance indicator in the company at the end of 2022 in light of the sharp rise in interest rates and financing costs and will continue to use it in the 2025 financial year.

FFO I is slightly up to EUR 457.5 million in the 2024 financial year (FY 2023: EUR 453.9 million), reflecting LEG's continued high level of spending discipline. At EUR 436.5 million, total investments were roughly on a par with the previous year (FY 2023: EUR 440.1 million). As planned, investments per square meter amounted to around EUR 34.

Attractive dividend proposal of EUR 2.70 per share

The Executive and Supervisory Board will propose a dividend of EUR 2.70 per share for the 2024 financial year at the Annual General Meeting on May 28, 2025. This corresponds to a full distribution of AFFO and thus reflects the dividend policy adopted in November 2022. This means that the net proceeds from property sales in the 2024 financial year will remain in the company to strengthen its capital base. The dividend is again expected to be offered in cash and shares. Based on the share price at the end of 2024, this results in a dividend yield of 3.3 percent.

NTA per share is EUR 125.90 – portfolio valuation stabilizes

The EPRA NTA per share was EUR 125.90 as of December 31, 2024 (December 31, 2023: EUR 126.57 per share).

As in previous years, LEG revalued its real estate portfolio at the end of the fourth quarter of 2024. The value of the real estate assets has stabilized significantly in the second half of 2024. The valuation result most recently amounted at +0.4% in the second half of 2024 - after -1.6 percent in the first half of 2024. LEG's residential property portfolio is now on the books at an average of EUR 1,629 per square meter. LEG currently expects the further stabilization of portfolio values to continue in 2025. The next regular portfolio valuation will take place as usual on June 30, 2025. The gross yield of the total property portfolio amounted to 4.9 percent at the end of the year (FY 2023: 4.8 percent).

In 2024, around 2,500 apartments were sold for around EUR 255 million to strengthen the balance sheet. A book profit was achieved overall. The net sales proceeds in 2024 amounted to EUR 180 million. The transfer of ownership of a further 1,800 units already sold with an equivalent value of EUR 150 million is already certain. This will generate net sales proceeds of around EUR 62 million and also a book profit. LEG's sales program currently comprises a total of around 3,000 units. At the same time, the company continues to carefully monitor the transaction markets in order to identify favorable opportunities for value-enhancing acquisitions.

Average financing costs at a low 1.5 percent

The average financing costs as of December 31, 2024, were 1.49 percent with an average term of the liabilities of 5.7 years as at the reporting date (December 31, 2023: 1.58 percent; 6.2 years). The average financing costs were thus reduced slightly, due to the issue of a convertible bond and the repayment of higher-interest liabilities.

Net debt has fallen by 2.2 percent to around EUR 8.8 billion. As a result, the ratio of net debt to real estate assets (loan to value/LTV) as of December 31, 2024, improved by 50 basis points year-on-year to 47.9 percent (December 31, 2023: 48.4 percent). The medium-term target for the LTV ratio remains unchanged at 45 percent.

The company was once again able to benefit from its excellent access to all capital market participants in 2024. For example, LEG placed a benchmark convertible bond with a total volume of EUR 700 million and a coupon of 1.0 percent on the capital market in 2024. Right at the beginning of 2025, the company successfully issued a ten-year bond of EUR 300 million with a coupon of 3.875 percent, which was oversubscribed several times. Also considering its high liquidity at the end of 2024 with cash and cash equivalents of more than EUR 900 million, the company has addressed all maturities until the end of 2025. This includes the purchase price of the BCP shares.

This shows the great solidity and robustness of the company's financing structure.

Positive outlook for 2025 confirmed

LEG is confident about the future and expects the housing industry to stabilize further in 2025. Thanks to its liquidity-oriented strategy and strict spending discipline, the company is well prepared for a longer phase of higher interest rates. LEG continues to consider the AFFO to be the most suitable performance indicator in 2025, a year that is still characterized by a great deal of uncertainty.

Lars von Lackum describes this as follows: " We currently expect property values to stabilize further in 2025, meaning that transactions on the market will continue to increase, but buyers will remain price-sensitive. This is why we will stick to our liquidity-oriented strategy in 2025 in the current volatile times."

Against this backdrop, LEG confirms its positive outlook for 2025 from November 2024. The company expects to achieve AFFO in the range of EUR 205 to 225 million in 2025. This means that AFFO per share could increase by more than 7.0 percent compared to 2024 - based on the mean value of the AFFO forecast. Effects from future portfolio optimization are not yet considered here.

Due to the continued high demand for affordable housing, rental momentum remains a driver for further organic growth. The company is also planning to slightly increase investments per square meters in 2025 for the first time in two years, from around EUR 34 in the previous year to over EUR 35 in the new financial year.

Ecological and economic goals go hand in hand

With its green start-ups, LEG wants to achieve its own environmental goals and at the same time exploit its business opportunities as a commercial solution provider for the decarbonization of the entire housing industry. Both aspects will be reflected in the company's sustainability targets from 2025 onwards, which will focus on the area of "E" or the environment. In the short term, LEG is aiming to save 6,000 tons of CO₂ in 2025. LEG's long-term goal is to achieve a cumulative FFOI-contribution of EUR 20 million from investment income and sales proceeds from its green ventures (RENOWATE, termios and dekarbo) in the period from 2025 to 2028. LEG is thus aligning its ecological targets with its financial targets as a listed company.

The LEG sustainability website provides a comprehensive overview of LEG's measures in all three sustainability dimensions E (environment), S (social) and G (governance): Sustainability.

Key figures 2024

About LEG

With around 167,000 rental flats (as at the end of 2024) and around 500,000 residents, LEG SE is a leading listed housing company in Germany. The company has eight branches and is also represented at selected locations with personal contacts on site. LEG SE generated income of EUR 1.303 billion from its core business of letting and leasing in the 2024 financial year, with an average rent of EUR 6.80 (l-f-l) per square metre. With a share of around one fifth of social housing and its ongoing commitment to efficient climate protection in the housing industry, including the establishment of green, digital start-ups for the smart control of existing heating systems (termios), the installation and maintenance of highly efficient air-to-air heat pumps (dekarbo) and digital, serial full refurbishment (RENOWATE), LEG underlines its sustainable commitment in various areas.

Contact Investor Relations:
Frank Kopfinger
Phone +49 211 45 68-550
E-mail: frank.kopfinger@leg-se.com

Contact Press:
Sabine Jeschke
Phone +49 211 45 68-325
E-mail: sabine.jeschke@leg-wohnen.de

Disclaimer

This publication constitutes neither an invitation to buy nor an offer to sell securities.
To the extent that we express forecasts or expectations in this document or make forward-looking statements, these statements may involve known and unknown risks and uncertainties. These statements express the intentions, opinions or current expectations and assumptions of LEG Immobilien SE. The forward-looking statements are based on current plans, estimates and forecasts that LEG Immobilien SE has made to the best of its knowledge, but do not claim to be correct in the future. Actual results and developments may therefore differ materially from the expectations and assumptions expressed.