EQS-News: PATRIZIA H1 2024 financial results: EBITDA still impacted by volatile market environment, but platform shows slight improvement in operating expenses

• AUM at EUR 56.0bn (FY 2023: EUR 57.3bn) reflecting moderate valuation effects in line with management expectations
• EBITDA at EUR 19.2m (H1 2023: EUR 28.4m, -32.4% y-o-y), primarily driven by expected lower performance fees
• Operating expenses down 1.8% y-o-y to EUR 130.7m
• FY 2024 EBITDA guidance of EUR 30.0m - 60.0m confirmed with consolidation effects and one-off items possibly impacting FY 2024 financial results
• Strategy 2030 announced with clear roadmap to grow AUM to EUR 100bn

Augsburg, 13 August 2024. PATRIZIA today published its H1 2024 financial results. In a market environment still characterised by continued high uncertainty, the first six months of the year showed ongoing pressure on revenues but first signs of improvement in operating expenses.

Market environment and financial results

In the first half of 2024, PATRIZIA was able to close transactions of almost EUR 1.5bn on behalf of its clients, with major acquisitions in the infrastructure, logistics and in the residential sector as well as via the Advantage Investment Partners (AIP) fund of funds platform. The majority of disposals involved commercial real estate.

While signed transactions still came in below last year’s level (-18.3% y-o-y), equity raised from clients for future investments in real assets increased by 82.6% to EUR 387.3m (H1 2023: EUR 212.1m).

Assets under management (AUM) showed a moderate decline in H1 2024 by -2.1% y-t-d to EUR 56.0bn (FY 2023: 57.3bn; H1 2023: EUR 57.9bn, -3.2% y-o-y) reflecting continued valuation pressure which is in line with management expectations.

Management fees decreased by -4.2% to EUR 115.5m (H1 2023: EUR 120.6m) as a result of lower development service fees and valuation effects.

Transaction fees increased by 19.5% to EUR 4.9m (H1 2023: EUR 4.1m).

Performance fees came in at EUR 16.9m (H1 2023: EUR 27.1m; -37.7%), driven by lower performance realisations for clients. As a result, total service fee income decreased by -9.6% to EUR 137.2m
(H1 2023: EUR 151.8m).

Net sales revenues and co-investment income came in at EUR 1.4m (H1 2023: EUR 2.9m; -52.1%) due to the negative earnings from a temporarily consolidated at-equity investment.

Operating expenses improved slightly by 1.8% to EUR -130.7m (H1 2023: EUR -133.1m) due to continued cost discipline. Staff costs as part of operating expenses decreased to EUR –83.6m (H1 2023: EUR -85.8m) as a result of the reorganisation measures implemented in 2023, despite inflation-driven salary adjustments made in H1 2024.

Other income rose by 65.0% to EUR 11.2m (H1 2023: EUR 6.8m) mainly due to the reversal of variable staff cost liabilities as part of active cost management.

Market-driven decrease in total service fee income – especially performance fees – could not be compensated by cost items and other income, resulting in an EBITDA decrease to EUR 19.2m (H1 2023: EUR 28.4m; -32.4%) and an EBITDA margin decrease to 13.8% (H1 2023: 18.3%; -4.5pp).

Results from fair value adjustments on temporarily consolidated properties and a y-o-y increase in income tax payments had a subsequent negative impact on the net result for the period.

PATRIZIA confirms its financial guidance for FY 2024 with AUM in a range between EUR 54.0bn - 60.0bn and an EBITDA of between EUR 30.0m - 60.0m, equivalent to an EBITDA margin of between 11.0% - 19.2% for FY 2024.

The guidance assumes that client investment activity will pick up in the second half of FY 2024. Due to material downside and upside risks stemming from temporarily consolidated assets and funds as well as potential non-operational one-off items, a narrowing of the guidance range is expected later in 2024.

Strategy update

PATRIZIA has announced a new mid-term strategy with the ambition to reach EUR 100bn AUM within the next five years. The Company’s clear ambition is to become the go-to manager for smart Real Asset solutions by focusing on five key growth areas: Living, Value-add Strategies, Re-Infra Smart City Solutions, European Infrastructure, and its Independent Advantage Investment Partners (fund of funds) platform.

PATRIZIA will leverage its strong position in Germany with attractive real asset offerings and continue to grow internationally with a focus on its large scalable discretionary flagship funds in real estate and infrastructure, alongside creating a new ‘Re-Infra’ asset class that leverages the synergies between the two.

To effectively execute on its new mid-term strategy PATRIZIA has established a new Group Executive Committee (GEC) as part of a larger organisational adjustment. The new smaller GEC consists of six Executive Directors as the ultimate decision-making body for PATRIZIA’s business operations and responsible for implementing its growth strategy, replacing the former Executive Committee.

Statements by CEO and CFO

Asoka Wöhrmann, CEO of PATRIZIA SE comments: “We manage through a continued uncertain market environment, but we remain cautiously optimistic for the full year. We are seeing some operational improvements with more equity raised than last year, but continued pressure on revenues. However, we will remain cost conscious and stay close to our clients. We are offering them a broad range of smart investment solutions for real estate and infrastructure which helps them diversify their portfolios for long-term stable and attractive returns. Our clear ambition as a smart real assets manager of choice is to leverage our strong position in Germany, significantly grow in Europe and attract more international investors to our growing real estate, infrastructure and Re-Infra investment platform.”

Martin Praum, CFO of PATRIZIA SE adds: “The first half 2024 financial performance was still impacted by the current challenging market environment. The cost measures initiated by management show first smaller positive effects and we will continue focussing on platform efficiency improvements. In addition, consolidation effects, non-recurring expenses and other income items continue to characterise the financial results in the first half of the year and will likely also impact the second half of the year. With our solid balance sheet, we also realised investment opportunities for our clients and will remain an active buyer with the available firepower in our managed funds.”

PATRIZIA: A leading partner for global real assets

With operations around the world, PATRIZIA has been offering investment opportunities in real estate and infrastructure assets for institutional, semi-professional and private investors for 40 years. PATRIZIA manages approx. EUR 56bn in assets and employs around 900 professionals at 27 locations worldwide. PATRIZIA has been making an impact since 1984 by helping children in need, since 1992 in close collaboration with Bunter Kreis (“colourful circle”) in Germany for aftercare of children with severe diseases and since 1999 through its support for the PATRIZIA Foundation. The PATRIZIA Foundation has given more than 700,000 children and young people worldwide access to education, healthcare, and a safe home to get the chance to live a better self-determined life over the last 25 years. You can find further information at www.patrizia.ag and www.patrizia.foundation/en.

Contact

Dr Janina Rochell 

Director | Investor Relations

Phone: +49 821 509 10 600 

[email protected]