Peach Property Group AG: Financial year 2022 with highest operating result in Group's history

Zürich (pta008/21.03.2023/07:00 UTC+1)

Ad hoc announcement pursuant to Art. 53 LR

• FFO I of EUR 19.2 million marks a record result (+88 percent)
• Net rental income increased by 16 percent (like-for-like: 5.1 percent) to EUR 116.5 million
• Vacancy rate reduced to 6.9 percent (2021: 8.0 percent)
• Loan-to-value ratio (LTV) remains stable at approx. 52 percent on a pro forma basis, taking into account the mandatory convertible bond issued shortly after year-end (2021: 51.9 percent).
• Market value of real estate portfolio of 27 550 units remained stable at approx. EUR 2.6 billion (2021: EUR 2.6 billion)
• Net foreign exchange losses recorded within net financial expenses of EUR 30 million
• Operating result (EBIT) 2022: EUR 43.7 million
• Guidance for 2023: Net rental income in a range of EUR 121-123 million, FFO I in a range of EUR 21-23 million

Peach Property Group AG, a real estate investor with an investment focus on residential rental properties in Germany, completed the 2022 financial year with the highest operating result in the Group's history to date. Funds from operations (FFO I) reached EUR 19.2 million and were up by approximately 90 percent year-on-year. The operational profitability was achieved through the full integration of the 4 300 residential units acquired in June 2021, a further increase in occupancy whereby the vacancy rate reduced from 8 percent to 6.9 percent, a moderate rent adjustment, and a reduction in management costs through efficiency measures. The net rental income increased by 16 percent to EUR 116.5 million (+5.1 percent on a like-for-like basis), ending at the upper end of the guidance. The average rent per square meter of the properties is, at approximately EUR 6, still 18 percent below the average market rent, which underlines the further potential of the Group's portfolio.

In the current market environment, property valuations and financing costs are decisive success factors in the real estate business. Peach Property Group's existing portfolio of approximately 27 550 residential units was valued by an external property appraiser at approximately EUR 2.60 billion at the 2022 financial year-end. The valuation included a slight devaluation of EUR 12 million, which was offset by investments in modernization measures and a smaller acquisition. Thus, the valuation of Peach Property Group's real estate portfolio remains virtually unchanged compared to the previous year (2021: EUR 2.54 billion).

The average book value of a square meter of residential space from the Group's portfolio is EUR 1 450, and is at a very attractive level in a sector comparison. The net tangible asset value (NTA) according to EPRA is EUR 64.88 per share (2021: EUR 66.40 per share). Taking into account the issuance of approximately 3.8 million new shares on April 12, 2023 in connection with the mandatory convertible bond announced in December 2022, the EPRA NTA will be approximately EUR 55, on a pro forma basis. Peach Property Group AG (PEAN; ISIN CH0118530366) shares are thus currently trading at approximately 70 percent below the pro forma EPRA NTA per share.

In line with its active capital management, Peach Property Group kept its debt financing costs stable compared with the previous year, with an average interest rate of approximately 2.7 percent at year-end. In order to further strengthen the balance sheet, a short-termed mandatory convertible bond was issued in January 2023 (complete conversion on April 12, 2023). It was primarily subscribed to by the Company's anchor shareholders. The proceeds of approximately EUR 68 million were used in full to repay debt. This reduced the loan-to-value ratio (LTV) per January 2023 from 54.7 percent to 52 percent. The average maturity of all financing of Peach Property Group remains unchanged at 3.7 years. This action by Peach Property Group AG's management followed in response to the abrupt turnaround in central banks' monetary policy, and the massive increase of interest rates.

The Group's result before taxes was negatively affected by non-cash foreign exchange losses. The Company's equity is denominated in Swiss francs. Capital raised in Swiss francs and subsequently utilized to finance Euro denominated operations may result in non-cash foreign exchange movements from intra-group financing. This resulted in accounting losses of approximately EUR 30 million due to the further weakening of the Euro against the Swiss franc. The non-cash foreign exchange loss impact combined with valuation gains on investment properties not materializing, resulted in a reduction in the result after taxes to EUR -15 million (2021: EUR 186.1 million). The EBIT of Peach Property Group in 2022 amounts to EUR 43.7 million (2021: EUR 315 million).

Development project "Peninsula Wädenswil" in Switzerland

Peach Property Group achieved a further important milestone with its last remaining development project in Wädenswil, Switzerland. In December 2022, the groundbreaking ceremony for the project took place. Of the 57 upscale residential units being built in a sought-after location on the shores of Lake Zurich, around 60 percent had already been sold or reserved before the groundbreaking ceremony. The development project has a total estimated market value of CHF 138 million. Peach Property Group plans to complete the project by early 2025.

First ESG risk rating

An ESG risk rating for Peach Property Group was established in 2022 for the first time by Morningstar Sustainalytics. With a rating score of 11.5 the Group's ESG risk was assessed to be "low". This places Peach Property Group in the top four percent of over 15 000 companies assessed by Morningstar Sustainalytics globally.

In 2022, Peach Property Group modernized approximately 2 160 individual rental units. Of these, 110 rental units underwent a comprehensive energy-efficient refurbishment, for example by replacing windows or installing thermal insulation. In addition, around 40 heating systems serving around 700 rental units were renewed or refurbished. These measures have improved the Group's carbon footprint while reducing energy consumed by tenants. The work based on the decarbonization path, with the goal of a climate-neutral real estate portfolio by 2050, was also further advanced in 2022.

Peach Property Group continues to place a strong emphasis on tenant satisfaction. Against the backdrop of a higher number of self-administered rental units, around 113 000 tenant tickets were processed in 2022, an increase of over 40 percent compared to 2021. Still, processing times by Peach Points and by Peach Property Group's external partners were further reduced significantly. At over 78 percent, tenant satisfaction was around 8 percentage points up on the previous year.

For the 2022 financial year, Peach Property Group will publish a sustainability report according to Global Reporting Standards (GRI) in May 2023 for the first time.

Guidance - rental income and FFO I continue to rise

Peach Property Group expects the net rental income to continue to increase to between EUR 121 million and EUR 123 million in the 2023 financial year, due to the continued strong demand for affordable housing and rising market rents. This corresponds to an estimated like-for-like growth of 4 percent.

The Group expects the operating result (FFO I) to be in a range between EUR 21 million to 23 million. In the 2023 financial year, Peach Property Group will continue its efforts to achieve additional efficiency gains.

Dr. Thomas Wolfensberger, CEO Peach Property Group AG:

"Particularly in times like these, with inflation and interest rate developments not seen for a long time, operating performance plays an even more important role. We are proud to have made great progress on all key operating metrics over the past year: FFO at an all-time high, the lowest vacancy rate ever, cost reductions and in addition, market rents that are now rising faster than ever before. Our team did a great job last year, as seen in the operating numbers, as well as the high tenant satisfaction. Although the current environment is challenging for real estate companies, we are very optimistic about the future: The properties in our portfolio are proving to be very stable in value and are attractively valued with a gross initial yield of 4.95%. Furthermore, the demand for affordable housing is constantly increasing and we are well positioned with our product to meet this demand."

Thorsten Arsan, CFO Peach Property Group AG:

"Our most important task in the past financial year was the sustainable organization of our financing base. We successfully strengthened our financial profile in the past fiscal year and kept the Group's loan-to-value ratio stable. The subscription of the mandatory convertible bond at year-end 2022 was a strong commitment by our anchor shareholders to Peach Property Group and to the potential of our business model. In 2023, we will continue to dedicate ourselves to cost and balance sheet optimizations."

The detailed Annual Report 2022 is available on the website at the following link: https://www.peachproperty.com/en/news-en/annual-reports/

An analyst and media conference call will be held today at 11 a.m. (CET) in English with CEO Dr. Thomas Wolfensberger and CFO Thorsten Arsan.

The webcast can be accessed at the following link: https://register.vevent.com/register/BIfa00aadb266447f7bbbc7055d5be403b

Contact:

Media, investors, and analysts

Dr. Thomas Wolfensberger, Chief Executive Officer, Thorsten Arsan, Chief Financial Officer, and Stefan Feller, Head of Investor Relations
+41 44 485 50 18 | investors@peachproperty.com

Media Germany

Edelman Smithfield, Ruediger O. Assion
+49 (0) 221 8282 8111 | mobile: +49 (0) 162 4909624 | ruediger.assion@edelmansmithfield.com

About Peach Property Group AG

Peach Property Group is a real estate investor with an investment focus on residential real estate in Germany. The Group stands for many years of experience, competence, and quality. Innovative solutions that cater to tenants' needs, strong partnerships, and a broad value chain round off the profile while digitalization and sustainability underpin the operational activities. The portfolio consists of high-yield properties, typically in German Tier II cities in the commuter belt of metropolitan areas. The activities, therefore, span the entire value chain, from location evaluation and acquisition to active asset management and the letting or sale of properties. In addition, the Group develops selected properties in Switzerland to be sold as condominiums, of which the "Peninsula Wädenswil" development project is the final such development project.

Peach Property Group AG has its registered office in Zurich and the Group is headquartered in Cologne. Peach Property Group AG is listed on SIX Swiss Exchange (PEAN, ISIN CH0118530366). Its Board of Directors consists of Reto Garzetti (President), Peter Bodmer, Dr. Christian De Prati, Kurt Hardt and Klaus Schmitz.

More information at https://peachproperty.com/en/

(end)

Emitter:	Peach Property Group AG Neptunstrasse 96 8032 Zürich Switzerland
Contact Person:	Thomas Wolfensberger, Thorsten Arsan and Stefan Feller
Phone:	+41 44 485 50 00
E-Mail:	investors@peachproperty.com
Website:	www.peachproperty.com
ISIN(s):	CH0118530366 (Share)
Stock Exchange(s):	SIX Swiss Exchange; Free Market in Berlin, Frankfurt, Stuttgart