TAG Immobilien AG concludes 2021 financial year successfully and sets course for future growth prospects

DGAP-News: TAG Immobilien AG / Key word(s): Annual Results/Annual Report
15.03.2022 / 06:55
The issuer is solely responsible for the content of this announcement.


TAG Immobilien AG concludes 2021 financial year successfully and sets course for future growth prospects

- FFO I increased by more than 5% year-on-year (EUR 182.0m vs. EUR 172.6m); EPRA NTA per share up by approx. 16% to EUR 25.54 vs. EUR 21.95 reported at 31 December 2020

- Dividend per share proposal for FY 2021 at EUR 0.93 (from EUR 0.92) due to FFO I 2021 reaching the upper end of the guidance

- Introducing FFO II as a key metric to reflect the evolution of TAG's Polish business activities: new FFO II guidance for 2022 of EUR 247-253m (up by 32% vs. EUR 188.8m in 2021)

- Expansion of Poland footprint: Acquisition of ROBYG development platform with a pipeline of c. 25,500 units to create Poland's leading residential landlord - antitrust clearance received, closing expected on 31 March 2022

- Second investment grade credit ranking obtained: BBB- with stable outlook awarded by S&P Global

- TAG firms up ESG strategy and quantifies path to decarbonization - moderate level of current carbon emissions and related capex requirements to ensure an efficient and value maximizing investment program

Hamburg, 15 March 2022

TAG Immobilien AG (TAG) today published its 2021 Annual Report, reporting on another successful financial year. TAG COO Claudia Hoyer comments: "2021 has been another very successful year for TAG in operational as well as financial terms despite the continued challenges imposed by the Covid-19 pandemic which demonstrates the resilience of TAG's business model and its leading market position for affordable housing in Germany as well as its growing business in Poland. We have also set course in relation to key future aspects of our business in the last year, such as the firm establishment and quantification of TAG's path to decarbonisation, which is a key component of our ESG strategy. We are pleased to see our portfolio on a very good way in terms of its CO2 footprint and related capex requirements going forward. Moreover, we are very proud of the performance, contribution and loyalty of our employees in 2021."

Successful business operations

FFO (defined as FFO I excluding net income from sales in Germany and the result from operations in Poland) increased by EUR 9.4m or more than 5% to EUR 182.0m (EUR 1.24 per share vs. guidance at EUR 1.23 per share) compared to the previous year, reaching the upper end of the guidance range of EUR 178-182m. Following TAG's dividend policy to distribute 75% of FFO I to its shareholders, the dividend proposal to the AGM in May 2022 will be increased to EUR 0.93 per share (from EUR 0.92 per share).

At EUR 25.54, net asset value in the form of EPRA net tangible assets (NTA per share) was approximately 16% above the level of EUR 21.95 reported at 31 December 2020. The result from portfolio valuation contributed significantly to this development. The total year-on-year portfolio value growth was 10.0% (of which 9.0% from valuation gains and 1.0% from investments). As of the reporting date, TAG's residential portfolio is valued at an average of around EUR 1,200 per sqm or a 5.3% gross yield.

At 43.2%, the loan-to-value (LTV) ratio as at 31 December 2021 is below the target LTV of 45.0%. The average interest rate on financial debt decreased from 1.5% to 1.4% in 2021, with an average remaining maturity of 6.3 (previous year: 6.8) years.

TAG's annual like-for-like rental growth of 1.5% and 1.3% (including vacancy reduction) was around previous year's figures of 1.4% and 1.5% respectively. In Q4 2021, vacancy in the Group's residential units was reduced by 30bps to 5.4% compared to 5.3% at the beginning of the year.

The FFO I and dividend guidance for the 2022 financial year, as published in November 2021, remains unchanged as follows:

- FFO I: EUR 188-192m (EUR 1.30 per share, based on 146.4m shares outstanding)

- Dividend per share: EUR 0.98

Furthermore, and for the first time, TAG is introducing guidance on FFO II, defined as FFO I plus net income from sales in Germany and the results from operations in Poland, for 2022 in order to reflect the strong cash flow generation characteristics of its residential business in Poland, which is EUR 247-253m (EUR 1.71 per share, based on 146.4m shares outstanding) for 2022. As currently a material net income from sales in Germany is not planned, the main reason for this expected strong year on year increase by 32% will be the results from TAG's existing Polish platforms Vantage (full FY 2022) and ROBYG (expected to contribute to FFO II from April 2022 onwards).

Acquisition of ROBYG platform and update on TAG Poland

In December 2021, TAG announced the acquisition of Poland's leading residential development platform ROBYG S.A. for an expected final purchase price of c. PLN 2,450m (c. EUR 540m). The secured pipeline currently consists of c. 25,500 units in the major Polish cities of Warsaw, Tri-City, Wroclaw and Poznan. With the acquisition, TAG strengthens its presence in Poland and gains direct access to local Warsaw market. Antitrust clearance by the Polish authorities has been received in February without any conditions. Upon closing, which is expected on 31 March 2022, TAG will become the largest player in the Polish residential market with a total pipeline of c. 38,100 units of which more than 20,000 units are earmarked for the build-to-hold business.

"With the acquisition of ROBYG S.A., TAG has successfully secured substantial value creation potential for the years ahead. We are convinced about the fundamental prospects of the Polish residential segment which is characterised by structural market undersupply.", says Martin Thiel, CFO of TAG. "This will put TAG into the fortunate position to show attractive growth across our key metrics even despite the still very stable, but extremely competitive acquisition market in Germany."

In the 2021 financial year, TAG successfully handed over in Poland 575 build-to-sell units, which is slightly above guidance of c. 550 units (719 in financial year 2020). This resulted in EUR 63.4m revenues from sale of property. The result from operations in Poland, as a contribution to FFO II, amounted to EUR 6.7m (EUR 9.1m in financial year 2020). In 2021, the focus of business activities was still on sales. Rental income from build-to-hold units starting to contribute to earnings substantially from 2023/2024 onwards.

Second investment grade credit ranking obtained by S&P Global

On 14 March 2022, S&P Global, a leading international rating agency, assigned a long-term issuer rating at "BBB- /stable outlook" and an "A-3" short-term rating. TAG's views this second investment grade rating, alongside its already in-place rating from Moody's (Baa3/negative outlook and P-3 short-term rating), as a confirmation of its robust and conservative financial structure.

Fostering the ESG and decarbonization strategy for sustainable business development

In 2021, TAG systematically continued the sustainability activities it has been pursuing for years. Besides professional corporate governance and social targets, the reduction of carbon emissions is a clear target of TAG's effort for a sustainable business development. The decarbonization strategy includes maintenance and modernization needs as well as the entire supply chain and materials with internal emission control.

Current annual carbon emission levels of TAG's portfolio of 31.9 kg CO2/sqm in 2019 are already below average of other leading housing companies active in Germany. Approximately 60% of TAG's residential units feature an energy certification of C or better. Furthermore, TAG is determined to reduce the emission footprint further to less than 28 kg/sqm by 2025 and less than 22 kg/sqm by 2030. The long-term target is a reduction to less than 7 kg/sqm by 2045. This will be achieved by a sustainable investment programme with a total volume of c. EUR 690m to be invested until 2045. This translates into future capex requirements of on average c. EUR 19 per sqm annually (current capex of c. EUR 13-14 per sqm p.a.).

"We are pleased to report a leading position of TAG in relation to the challenge of decarbonization to our stakeholders which highlights the quality of our portfolio in terms of sustainability. This will enable TAG to not only be one of the leading companies on the path of decarbonization, but to also do this is in an efficient and value maximizing manner as our shareholders would expect from TAG.", adds Claudia Hoyer.

To further complete its ESG activities, TAG is currently working on a sustainable finance framework which is expected to be published by March 2022. TAG's sustainability report 2021, with further details on ESG activities and targets will be published on 21 April 2022.

Update on TAG management

As per year-end 2021, Dr. Harboe Vaagt stepped down from TAG's management board as CLO to retire. Appointed to the management board in April 2011, he had been with TAG since the 1990s and was responsible for human resources, legal, condominium management, IT, compliance, and internal audit. These responsibilities have been taken over by the current management board members Claudia Hoyer (COO) and Marin Thiel (CFO). "On behalf of the supervisory board, I would like to extend very special thanks to Mr. Vaagt for many years of service and strong contribution to the successful development of TAG. Due to his sound expertise and judgement, Harboe has been an esteemed colleague and has become a friend over the years. Now we wish him very well for this new stage of life.", says Rolf Elgeti, Chairman of the Supervisory Board of TAG.

TAG's support for people in the Ukraine

Please allow us to conclude this press release with a personal note. At TAG, we are deeply concerned about the fate of the people in Ukraine. Because of our business activities in Poland, the country's immediate neighbour, this tragedy feels very close to home. We are trying to help where we can. In Germany, we are making donations, providing logistical assistance, and offering apartments to accommodate Ukrainian refugees at our sites. In Poland, we are active through our subsidiaries and are providing support on the ground, including financial help. We can only hope that this conflict will soon be defused and that the people in Ukraine will be spared further suffering.

Please refer to the presentation published today and TAG's Annual Report 2021 at https://www.tag-ag.com/en/investor-relations/financial-statements/annual-reports for further details on the past financial year.

Key figures for the 2021 financial year and as at 31 December 2021

Income statement key figures in EURm 2021 2020 2019
Net actual rent 333.1 322.5 315.0
EBITDA (adjusted) 226.1 222.3 214.7
Consolidated net profit 585.6 402.6 456.4
FFO I per share in EUR 1.24 1.18 1.10
FFO I 182.0 172.6 160.6
AFFO per share in EUR 0.78 0.69 0.64
AFFO 113.9 100.9 93.9
FFO II per share in EUR 1.29 1.51 1.09
FFO II 188.8 221.9 160.2
Balance sheet key figures in EURm as at 12/31/ 2021 2020 2019
Total assets 7,088.6 6,478.0 5,647.0
EPRA NTA (fully diluted) per share in EUR 25.54 21.95 20.22
LTV in % 43.2 45.1 44.8
Portfolio data as at 12/31/ 2021 2020 2019
Units Germany 87,576 88,313 84,510
Units Poland (contractually secured pipeline) 12,557 8,742 -
GAV Germany (real estate assets) in EURm 6,387.4 5,834.3 5,302.4
GAV Poland (real estate assets) in EURm 347,9 150,1 0
Vacancy in % (total) 5.7 5.6 4.9
Vacancy in % (residential units) 5.4 4.5 4.5
l-f-l rental growth in % 1.5 1.4 1.9
l-f-l rental growth in % (incl. vacancy reduction) 1.3 1.5 2.4
Employees 2021 2020 2019
Number of employees 1,390 1,354 1,160

Press enquiries

TAG Immobilien AG
Dominique Mann
Head of Investor & Public Relations
Phone +49 (0) 40 380 32 305
Fax +49 (0) 40 380 32 390

15.03.2022 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.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de

Company:TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Phone:040 380 32 0
Fax:040 380 32 388
Listed:Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart, Tradegate Exchange
EQS News ID:1302201

End of NewsDGAP News Service

show this