CORESTATE Capital Company Presentation February 2018
Disclaimer This presentation contains forward-looking statements that involve a number of risks and uncertainties. Such statements are based on a number of assumptions, estimates, projections or plans that are inherently subject to significant risks, as well as uncertainties and contingencies that are subject to change. Actual results can differ materially from those anticipated in the forward-looking statements of CORESTATE Capital Holding S.A. (the Company ) as a result of a variety of factors, many of which are beyond the control of the Company, including those set forth from time to time in the Company s press releases and reports and those set forth from time to time in the Company s analyst calls and discussions. The Company does not assume any obligation to update the forward-looking statements contained in this presentation. This presentation does not constitute an offer to sell or a solicitation or offer to buy any securities of the Company, and no part of this presentation shall form the basis of or may be relied upon in connection with any offer or commitment whatsoever. This presentation is being presented solely for information purposes and is subject to change without notice. All information on FY 2017 is preliminary and not-audited. Glossary: = Euro; $ = (US)Dollar; (F)Y = (financial) year(s); H = half year(s); M = month(s); Q = quarter(s); % = percentage; a = actual; acc. = according; adj. = adjusted; aggr. = aggregated; approx. = approximately; ca. = circa; e = expected; k = thousand(s); m = million(s); bn = billion(s) CORESTATE Capital HoldingS.A. Page 2
Agenda 1 Business model and investment highlights 2 Financial and operating performance 3 Update on corporate acquisitions and outlook CORESTATE Capital HoldingS.A. Page 3
CORESTATE at a glance A leading real estate investment manager Assets under management (AuM) of approx. 22bn (1) with efficient balance sheet structures Diversified offering across all relevant asset and risk types (residential, office, retail, student housing, microliving) Matching needs of different investor types (institutional, family office and retail) Tangible pipeline of 6.0bn reflects strong sourcing capabilities for organic growth Extensive local and international footprint Mainoffices Secondary offices ATOS Madrid London Essen Solingen Hanover Zurich Hamburg Berlin Magdeburg Leipzig Dusseldorf Gera Dresden Luxembourg(HQ) Koblenz NeuIsenburg Frankfurt Nuremberg Stuttgart Augsburg Ulm Munich Pullach Vienna Baar Wollerau Accretive growth strategy in a fragmented market from a solid base in Germany Singapore Guidance 2018 (2) Agg. revenues 230-240m Adj. EBITDA 155-165m Adj. net income 120m - 130m More than 530 FTEs in 41 offices in 6 countries with direct access to local real estate markets (1) The key figures of the Hannover Leasing Group (HL), Helvetic Financial Services AG (HFS) and ATOS have already been taken into account in the corporate figures of the CORESTATE Group on this page. (2) Adjusted for one-off items (i.e. M&A transaction-related expenses, etc.); gross debt defined as the sum of financial liabilities to banks and shareholders; net debt defined as gross debt minus cash & cash equivalents (incl. restricted cash) CORESTATE Capital HoldingS.A. Page 4
A fully integrated real estate investment manager Institutional clients Including pension funds, insurance companies Semi-institutional clients Including UHNW, family offices Real estate equity Real estate debt Established in 2006 Residential, high street, micro-living Strong sourcing network Established in 2006 Office Well known asset manager Established in 1981 Core office Long track record Established in 2009 Real estate debt Market leader in German-speaking region (DACH) Best-in-class sourcing platform with long track record throughout all risk and asset classes providing stable fee income Covering the real estate investment lifecycle Phase 1 Deal structuring / acquisition Phase 2 Holding period Phase 3 Exit / realization Transaction-related fees Asset management fees Exit / success-based fees CORESTATE Capital HoldingS.A. Page 5
CORESTATE has reached critical size in terms of AuM Overview of selected European listed alternative and real estate investment managers Comments AuM ( bn) 9 49 Market capitalisation (1) ( bn) 58 15.4 EBITDA 2017e (2) ( m) 591 Sufficiently large AuM facilitating broad market coverage, diversification and comprehensive solutions for institutional clients (3) 3 28 24 2 30 27 1.8 3.4 81 192 Market capitalisation exceeding 1bn providing attractive acquisition currency and potential to significantly increase trading liquidity 2 16 10 12 6 22 1.0 123 2.2 na (preliminary results FY 2017) Considering only real estate, CORESTATE already amongst largest listed managers in Europe 4 4 0.2 36 (4) (5) 3 3 0.7 98 Real estate Diversified alternative assets Source: Company information. (1) Factset as of 29 November 2017. FX rates as of 29 November 2017 (2) Factset as of 29 November 2017; management guidance for CORESTATE (3) The numbers do not include the announced acquisition of Rockspring Property Investment Managers LLP (4) Company information (5) DIC Asset runs hybrid model, i.e. 1.7bn own portfolio, 1.3bn funds and 0.4bn other investments as of 30 June 2017 CORESTATE Capital HoldingS.A. Page 6
Ample room for growth in European sector landscape acquisition opportunities for CORESTATE High degree of fragmentation providing consolidation opportunities (1) Number of asset managers by size 47 20 3 6 23 > 30bn 10-30bn < 10bn Real estate managers Concentration of real estate AuM by top 5 managers (2) Top 5 Managers 16% 94 Average AuM ( bn) Comments The European real estate asset management market is fragmented there are over 90 asset managers with AuM below 10bn (1) Financial institutions are refocusing on their core business and are considering the sale of non-strategic assets High and rising regulatory costs impose a meaningful burden on smaller asset managers that lack scale Client demand and market requirements are becoming increasingly sophisticated, giving larger asset managers a competitive edge Rest 84% (3) (1) Property Funds Research and Institutional Real Estate Inc., Global Investment Managers 2016 (2) Includes short-term, intermediate-term, long-term, multisector, high-yield, bank-loan and retirement-income categories CORESTATE Capital HoldingS.A. Page 7
Investment highlights 1 Fully integrated real estate investment manager with 22bn (1) AuM and diversified product offering 2 Strong recurring fee income streams (approx. 85%) provide stability 3 Unique sourcing capabilities with 6.0bn pipeline drive superior organic AuM growth 4 Diversified investor base with growing allocation to real estate provides sustainable fundraising base 5 Accretive external growth opportunities from sector consolidation based on a scalable platform 6 Strong profitability, efficient balance sheet structures and attractive dividend capacity (1) Including HFS, HL and ATOS. Total AuM as per year-end 2017 CORESTATE Capital HoldingS.A. Page 8
Agenda 1 2 3 Business model and investment highlights Financial and operating performance Update on corporate acquisitions and outlook CORESTATE Capital HoldingS.A. Page 9
Highlights of Q4 2017 Delivered as promised Performance 2017 guidance significantly outperformed Solid and diversified deal sourcing pipeline increased to > 6bn to support organic growth Intention to double dividend to 2.00 per share for FY 2017 (total dividends amounts ~ 42m) Corporate Platform Integration of acquisitions and major group initiatives ahead of schedule Set up of a comprehensive and integrated multi-boutique platform Group wide SAP implementation accomplished in Dec 2017 as scheduled Further substantial strengthening of the company s management team Balance sheet structure and capital markets access improved Capital Markets & Financing BB+ outlook stable rating (S&P) and issue of 200m convertible bond with 1.375% coupon Premature refinancing of 150m acquisition loan and nearly halved group financing costs Two additional brokers initiated research coverage with buy recommendation (Commerzbank & Jefferies) CORESTATE Capital HoldingS.A. Page 10
Supervisory Board Appoints New Group CEO Dr. Michael Bütter as new CEO from 1 May 2018 More than 18 years expertise in real estate and corporate governance, studied law and economics Currently CEO of Immobilien Scout and member of the management board of Scout24 as well as supervisory board member at TLG Immobilien AG, ADO Properties S.A. and board member of RICS Germany Former management board member at Deutsche Annington Immobilien SE (Vonovia) and real estate & private equity partner at Hogan Lovells As future CORESTATE CEO in charge of i.a. strategy, international expansion, M&A, HR, legal, client relations Member of CORESTATE s Senior Advisory Board since 2016 Sascha Wilhelm will leave the Company on the best of amicable terms and with special thanks for his continued commitment and merits CORESTATE Capital HoldingS.A. Page 11
Preliminary Results of FY 2017 Key P&L figures 1) Comments (in m) 195m All financial and operational targets 2017 achieved or over-achieved 2017 guidance corridor of 170-180m 123m guidance 115-120m 93m guidance 85-90m Aggr. Revenues 2) amounts to 195m ( 60m in FY 2016) major impact from pro rata consolidation of strategic acquisitions in H2 high portion of recurring fee income (approx. 85%) Adj. EBITDA amounts to 123m ( 23m in FY 2016) Adj. Net Profit amounts to 93m ( 19m in FY 2016) EPS on Net Profit at 3.28 ca. +120% compared to FY 2016 ( 1.47) Aggregate Revenues 2) Adjusted EBITDA Adjusted Net Profit 1) All figures are preliminary, not audited and may include rounding differences 2) Aggregate Revenues include Revenues and Gains from Real Estate Investment Management, Share of Profit and Loss from Associates and Joint Ventures, and Total Income from Real Estate Operations / Warehousing CORESTATE Capital HoldingS.A. Page 12
Fully integrated investment manager with diversified product offering AuM breakdown by asset type (2017) Infrastructure Aviation Media Other RE (1) Micro-living 6% 3% 6% High street 3% Other (2) 15% 13% 3% AuM 22bn 22% 30% Residential Office Comments Clear focus on real estate Broad range of asset classes providing flexibility and diversification Media, Infrastructure and Other types are non-strategic assets in run-off mode after acquisition of Hannover Leasing AuM breakdown by capital type (2017) Comments Debt / mezzanine 23% AuM 22bn Provide broader product offering and capture broader portfolio allocation Cross-selling opportunities 77% Equity (1) Other real estate include among others educational facilities, data centres, mixed-use assets (2) Other include ships, life insurance, solar CORESTATE Capital HoldingS.A. Page 13
Strong pipeline provides visibility on near-term organic growth CORESTATE deal sourcing pipeline Large and diversified pipeline Particular importance of pipeline for growth in current market environment Unique sourcing capabilities grown over the past 10 years 6.0bn In exclusivity 12% In LOI / due diligence 15% Intergroup synergies lead to high percentage of off-market transactions In-depth footprint in DACH region with increased focus on European countries Creation of a broad platform from opportunistic to core Long-standing trackrecord and sourcing competence in secondary markets Under review / identified 73% Additional sourcing potential from future cross-selling effects with HFS, HL and Atos CORESTATE Capital HoldingS.A. Page 14
Agenda 1 Business model and investment highlights 2 Financial and operating performance 3 Update on corporate acquisitions and outlook CORESTATE Capital HoldingS.A. Page 15
Hannover Leasing Contributing Reliable Profits Sustainable earnings progression from second half 2017 onwards Net profit first consolidation in July 2017 (in m) 0,4 4,6 5,3 (23,7) (28,9) (11,3) (22,4) (17,8) 2011 2012 2013 2014 2015 2016 3rd Quarter 2017 4rd Quarter 2017 Main driver for turnaround and growth catalysts Consistent release of new business projects i.a. closing of club deals (The Cloud, Amsterdam) or launch of new retail funds (Denkmal Münster, Leonardo Ulm) as well as successful fund exits (Colosseo) Comprehensive savings and efficiency program bear fruits Realignment of existing fees structures and initiation of additional service agreements CORESTATE Capital HoldingS.A. Page 16
Synergy Case Study Proving the Platform s Business Model Transaction In January 2018, CORESTATE acquired five micro living project developments in Germany The projects seller and developer is CG Gruppe AG which was sourced by HFS Fund investor Product design Asset sourcing The product and the client came from CORESTATE The combined asset value after completion will be 670m CORESTATE Capital HoldingS.A. Page 17
Outlook 2018 ASSUMPTIONS & KEY LEVERS FY 2018 includes ATOS which was acquired in Q4 2017 High client demand for attractive risk return profiles in real estate niche markets (micro-living, highstreet, mid-size cities) Guidance FY 2018 does not reflect any impact from further M&A and increasing platform synergies GUIDANCE FY 2018 Aggr. Revenues * 230 240m Adj. EBITDA 155 165m Adj. Group Net Profit 120 130m * Aggregate Revenues include Revenues and Gains from Real Estate Investment Management, Share of Profit and Loss from Associates and Joint Ventures, and Total Income from Real Estate Operations / Warehousing CORESTATE Capital HoldingS.A. Page 18
Appendix
Appendix Continued event-driven share price outperformance Share price performance 2017 (1) in % 300 250 200 150 100 50 8 May. 2017: Increase of 2017E earnings guidance to 36-37m 16 Dec. 2016: Announcement HL acquisition 1 Jul. 2017: Announcement HFS acquisition Increase of 2017E earnings guidance to 85-90m Closing HL acquisition 23 Feb. 2017: c. 23m capital increase 5 Jul. 2017: Closing HFS acquisition c. 345m capital increase (2) 20 Sep. 2017: Share placement of 157m by Flygon and other. Increased free float 6 Oct. 2017: ATOS Group Closing 1 Nov. 2017: Uplisting to Prime Standard 21 Nov. 2017: 200m convertible bond successfully placed +116% +23% Average target price 69 (100% Buy) 30% 13-Feb-18 36% 65 68 66 Shareholder structure Sandra Ketterer 8,9% 21,294,123 shares Management 4.69% 32% 54% 38% 77 69 7-Feb-18 15-Jan-18 7-Dec-17 27-Nov-17 Upside to price target (3) Buy Hold Sell Norbert Ketterer 9,6% Free float incl. shares held by Management 63,6% CORESTATE (CCAP) SDAX (SDXK, price index) Ralph Winter 17,8% Source: Factset as of 14 February 2018 and company information (1) Re-based to starting value of 100%, share price data from 30 December 2016 to 29 December 2017 (2) Based on 01 October, 2017 CCAP closing price of 47 per share issued against contribution in kind of all of the shares in Helvetic Financial Services (3) Based on closing price 50 on Feb 14, 2018 CORESTATE Capital HoldingS.A. Page 20
Appendix Update on Integration of Key Shared Services Completion Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Comments Sales / Investment / AM HR Finance / Accounting Infrastructure & Applications SAP Sales / Investment / AM HR 100% 100% 100% 0% 100% 100% 100% A B A. Integration to a great extent accomplished (in Q1 2018) Implementation of SAP and new treasury management system completed in all subsidiaries except ATOS Multi-Boutique Platform established Group-wide equity raising with Key Account system across multiple brands Functional setup of investment teams by asset classes Finance / Accounting Infrastructure & Applications SAP Sales / Investment / AM HR 100% 80% 100% 100% 100% B. Accelerated growth & enable scalability (from Q2 2018) Focused operational alignment Group-wide standardized core business processes Digital Strategy Plug-in capability for inorganic growth Finance / Accounting 85% Infrastructure & Applications 65% SAP 95% Today CORESTATE Capital HoldingS.A. Page 21
Appendix Profit & Loss statement of 9M 2017 1 2 3 4 5 ( m) unaudited 01.01.2017 30.09.2017 unaudited 01.01.2016 30.09.2016 Revenue from Acquisition Related Fees 13.7 5.5 Revenue from Asset and Property Management 31.9 17.7 Revenue from Promote Fees realised 14.1 6.1 Revenue from Real Estate Investment Management 59.7 29.2 Management expenses (32.3) (19.0) Earnings from Real Estate Investment Management 27.5 10.3 Net Rental Income 4.8 0.4 Revenue from Service Charges 0.8 94 Net Gain from Selling Property Holding Companies 13.0 8.5 Total Income from real estate Operations / Warehousing 18.6 9.1 Expenses from real estate Operations / Warehousing (2.6) (0.3) Earnings from Real Estate Operations / Warehousing 16.0 8.8 Earnings from Alignment Capital 4.4 1.0 General, Administrative and Other Expenses (21.2) (5.6) EBITDA 27.3 14.5 Depreciation and Amortisation (3.1) (0.2) EBIT 24.2 14.3 Net Financial Expenses (9.1) (2.5) EBT 15.1 11.7 Income Tax Expenses 1.6 (0.9) Net Profit for the Period 16.6 10.8 Minority interests (0.5) Adjustments 10.8 1.4 Adjusted Net Profit for the Period 26.9 12.2 Trading update (HFS Coupon Participation Fee) 35.4 Adjusted Net Profit for the Period incl. trading update 62.3 In % of mid-point Guidance 2017 71% Comments 1. Strong increase in Revenues from Real Estate Investment Management providing an attractive and stable source of recurring revenues 2. Showing a recurring income from sale of Warehousing Assets 3. Increase of G&A and Other Expenses is mainly driven by business combination of HL and HFS as well as one-off acquisition related expenses 4. Net financial expenses increase mainly due to the acquisition financing of HFS 5. Adjusted Net Profit including trading update fully on track with the 2017 Guidance HFS Coupon Participation Fee of 35.4 m has been booked in October 2017 and is not included in Q3 2017 financials CORESTATE Capital HoldingS.A. Page 22
Appendix Balance Sheet as of 30 September 2017 1 2 3 4 5 ( m) Non-Current Assets unaudited 30.09.2017 audited 31.12.2016 Goodwill 520.4 - Intangible Assets 150.7 0.9 Investment in Associates and Joint Ventures 105.6 35.7 Other Non-Current Assets 175.9 8.3 Total Non-Current Assets 952.7 44.9 Current Assets Inventories 109.6 15.9 Receivables 80.3 16.1 Other Current Assets 27.4 5.4 Cash and Cash Equivalents 104.4 48.2 Total Current Assets 321.7 85.6 Total Assets 1,274.4 130.6 Equity Total Equity 492.3 86.4 Non-Current Liabilities Long-term Financial Liabilities 171.7 14.1 Acquisition Financing HFS 168.9 - Other Non-Current Liabilities 112.8 9.8 Total Non-Current Liabilities 453.4 23.9 Current Liabilities Short-term Financial Liabilities 105.8 4.0 Other Short-term Provisions 45.5 - Short-term Liabilities to Shareholders 39.0 - Other Current Liabilities 138.3 16.2 Total Current Liabilities 328.6 20.2 Total Equity and Liabilities 1,274.4 130.6 Comments 1. Goodwill for the acquisition of HFS and HL 2. Other Non-Current Assets mainly contain loans to third parties as well as financial instruments held for sale 3. Total Equity increase based on the acquisition of HFS partially paid with shares in kind 4. Financial debt to finance HFS acquisition 5. Other Current Liabilities primarily include the trading update, liabilities regarding a new project in Dusseldorf and other CORESTATE Capital HoldingS.A. Page 23
Financial Calendar 2018 13 Mar 2018 Publication annual financial report 2017 27 Apr 2018 Annual General Meeting 15 May 2018 Publication Q1 financial report 14 Aug 2018 Publication H1 financial report 06 Sep 2018 Capital Markets Day 13 Nov 2018 Publication Q3 financial report Please note that these dates could be subject to change Investor Contact CORESTATE Capital Holding S.A. CORESTATE Capital Group 4, rue Jean Monnet L-2180 Luxembourg corestate-capital.com Dr. Kai G. Klinger Head of Investor Relations & Capital Markets Phone: +49 69 3535630-107 kai.klinger@corestate-capital.com