Corestate today announces its preliminary unaudited results for the 2021 financial year. In the financial year 2021, Corestate successfully increased its aggregated revenues and gains to a total of € 245.5m (previous year: € 191.4m).
Frankfurt, 8 March 2022 – CORESTATE Capital Holding S.A. (CORESTATE), a leading independent real estate investment manager in Europe, today announces its preliminary unaudited results for the 2021 financial year. In the financial year 2021, Corestate successfully increased its aggregated revenues and gains to a total of € 245.5m (previous year: € 191.4m). The Property Management business, which is to be sold, contributed € 30.1m (previous year: € 29.4m) to aggregated revenues and gains. In 2021, income generated by continued core activities increased by 33% to € 215.4m (previous year: € 162.0m). On the cost side, acquisition and transformation related one-off charges amounting to € 17.4m were incurred in 2021. Adjusted EBITDA increased substantially from € 16.2m in the previous year to the current level of € 89.8m. Adjusted net profit also saw a huge improvement from € -45.4m in 2020 to the current level of € 59.4m. Corestate has thus achieved the 2021 financial guidance, which had been given including discontinued operations, at all levels.
Corestate will continue to streamline its internal structures and processes in 2022. This will entail focusing strictly on its core real estate asset management business and divesting low-yield peripheral activities. The focus will remain on further improving profitability and adjusting assets under management accordingly. An ongoing efficiency program will deliver sustainable cost savings of around € 10m per year from 2023 at the latest. Provisions of € 6.5 million for expenses relating to the efficiency program were set aside in 2021. A comprehensive rebranding of the Corestate umbrella brand and a broad repositioning on the real estate and capital markets are also planned for the second half of the year. On the balance sheet due to delays in the placement of non-essential assets, net debt improved to € 526.5m at the end of December 2021 (31 December 2020: € 531.4m). Real estate assets under management within Corestate’s core business remained unchanged at around € 19bn as of 31 December 2021, the total assets under management stood at € 27bn at the end of the year.
To best implement this systematic repositioning of the Group and strengthen the governance structure on a stainable basis, the Supervisory Board resolved the following personnel matters at its meeting today: Stavros Efremidis, previously Chairman of the Supervisory Board, will join the Management Board as CEO. Izabela Danner will also join the Management Board as COO from within Corestate itself, while Ralf Struckmeyer will join as CIO. In Ralf Struckmeyer, Corestate is gaining a highly experienced real estate expert who has worked successfully on the management boards of various real estate companies for many years. René Parmantier will immediately take over the management of the real estate financing business, which is of key importance to the success of the Group in order to drive forward with the planned growth in this area. He is leaving the Group’s Management Board for regulatory and supervisory reasons. Together with CFO Udo Giegerich, the new Management Board will consist of four members. The previous Deputy Chairman, Dr. Bertrand Malmendier, will take over as Chairman of the Supervisory Board. Dr. Roland Folz joins the Supervisory Board as a new member, thereby enhancing the Group’s expertise in the important field of digitalisation.
One of the primary objectives of the newly formed Corestate management team is to significantly reduce its financial liabilities and complete the scheduled refinancing before the summer. The basis for this is a substantial and sustained reduction of net debt to a leverage ratio of 2x to 3x, accompanied by a long-term enhancement of the business model’s risk profile.
The noticeable upturn in the market environment and growing investment pressure from institutional investors are resulting in sustained high demand for profitable real estate investments. Against this backdrop, the company anticipates further growth in 2022 with aggregated revenues in core business of between € 210m and € 230m and EBITDA ranging from € 90 million to € 110 million. On this basis, the Management Board and the Supervisory Board are aiming to resume the dividend payments suspended in the wake of the Corona pandemic and are planning a distribution of at least € 0.50 per share from 2022 earnings in the following year.
CEO Stavros Efremidis stated: “Focusing on our core business while establishing new and transparent corporate governance with a dynamic team will help to leverage numerous previously untapped potentials. Against this backdrop and given the ongoing positive market development in the real estate sector, we expect annual organic growth in assets under management of around 5 to 10 percent in the medium term. We are also stepping up our efforts to reduce our co-investments in the coming months and will be lowering our leverage ratio to 2x to 3x in 2022 – in the medium term it should even fall below 2x. Once the refinancing is completed, we will position Corestate as an attractive growth and dividend stock.”
Stavros Efremidis added: “Our previous CEO, René Parmantier, has done an outstanding job for the company over the past 15 months. He achieved an impressive turnaround and now intends to tap into the potential of the debt business resulting from the Group’s current and future market opportunities. I am deeply grateful for his initiative in this matter and very much look forward to continuing to work with him and my new colleagues on the Management Board and Supervisory Board.”
The auditor Ernst & Young has not yet fully completed its audit procedures in certain subdivisions with a focus on Corestate Bank. As a result, the publication of the audited consolidated financial statements has been postponed. The Company is therefore publishing the preliminary and unaudited business figures from 2021 today and expects the audited consolidated financial statements to be published promptly, but no later than 31 March 2022. The company has already prepared the 2021 annual financial statements in full and firmly believes that the ongoing audit procedures will have no impact on the stated figures.
About CORESTATE Capital Holding S.A. (CORESTATE)
CORESTATE is an investment manager and co-investor with around € 27 billion in assets under management (as of 31 Dec 2021). The company sees itself as a manager for the entire length of the real estate value chain. Thanks to its fully integrated real estate platform, it is able to offer investors a wide range of services, especially the opportunity to invest in large-scale societal trends such as urbanisation, demographic shifts or sustainability – trends that will continue to have a decisive influence on the living and working environment in the long term. The consistent focus on asset classes that will be successful in the long run constitutes a central cornerstone of the company strategy. At CORESTATE, all concepts are supported with ESG expertise that is unique to the industry. With some 850 experts, CORESTATE offers clients and investors a full range of services and consultation from a single source, from project financing and real estate management to sales. CORESTATE is listed on the Frankfurt Stock Exchange and operates as a respected business partner for institutional and semi-institutional investors as well as high-net-worth private investors in 11 countries across Europe, with offices in Frankfurt, Vienna, Zurich, Paris, Madrid and London. Please visit www.corestate-capital.com for further information.
Forward-looking statements
This press release may contain certain forward-looking statements based on current assumptions and forecasts made by our management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial position, development or performance of the Company and the estimates given here. These factors include those described in published reports. These reports are available on our website www.corestate-capital.com. The Company assumes no obligation whatsoever to update these forward-looking statements or to conform them to future events or developments. No inappropriate significance should be attached to forward-looking statements, which apply only to the date of this communication.
