PATRIZIA 9M 2024 financial results impacted by extraordinary items and still subdued market environment, while market sentiment keeps improving

PATRIZIA 9M 2024 financial results impacted by extraordinary items and still subdued market environment, while market sentiment keeps improving
 

• Increase in equity raised by 168.0% y-o-y to over EUR 0.7bn indicating stronger client interest in real asset investments
• AUM at EUR 55.9bn (31 December 2023: EUR 57.3bn) driven by only moderate negative valuation effects
• Total service fee income down to EUR 198.7m (9M 2023: EUR 228.3m) due to market driven decline in management and performance fees
• Continuous cost discipline could not offset decrease in total service fee income
• EBITDA at EUR 13.4m (9M 2023: EUR 50.2m) impacted by negative results from a temporarily consolidated at-equity investment and extraordinary items
• PATRIZIA confirms FY 2024 EBITDA guidance range of EUR 30.0m - 60.0m

Augsburg, 13 November 2024. PATRIZIA today published its 9M 2024 interim statement. While financial results were still burdened by subdued market environment as well as temporary negative consolidation effects and extraordinary items, market sentiment continues to show signs of improvement.

Equity raised from clients for future investments in real assets increased by 168.0% to EUR 0.7bn (9M 2023: EUR 0.3bn). While signed transactions still came in below last year’s level (-21.6% y-o-y), PATRIZIA was able to close transactions of almost EUR 2.2bn (+2.5% y-o-y) on behalf of its clients in the first nine months of the year 2024, thereof EUR 1.3bn acquisitions and EUR 0.9bn disposals.

Assets under Management (AUM) decreased only moderately by 2.3% to EUR 55.9bn (31  December 2023: EUR 57.3bn) mainly due to negative valuation effects of EUR 1.1bn (or -1.9%) during 9M 2024 which could not be fully compensated by closed acquisitions for clients, which supported the development of AUM with a positive net effect of EUR 0.4bn.

Management fees decreased to EUR 171.6m (9M 2023: EUR 187.7m; -8.6%) as a result of valuation effects, lower development service fees for clients and the absence of client debt structuring fees which supported management fees in the period under comparison. Transaction fees remained stable at EUR 8.9m (9M 2023: EUR 8.8m). Performance fees came in at EUR 18.2m (9M 2023: EUR 31.7m; 
-42.6%), driven by lower annual carry payments and the lower number of sales for clients. As a result, total service fee income decreased by 13.0% to EUR 198.7m (9M 2023: EUR 228.3m).

Net sales revenues and co-investment income came in at EUR -4.9m (9M 2023: EUR 4.4m) mainly due to the earnings attribution from a temporarily consolidated at-equity investment (amounting to a negative EUR -13.4m) which is expected to be deconsolidated during the fourth quarter of the year. PATRIZIA hence expects a positive contribution to EBITDA in the fourth quarter from deconsolidation.

Operating expenses improved moderately by 2.8% to EUR -193.6m (9M 2023: EUR -199.1m) due to continued cost discipline. Staff costs as part of operating expenses decreased to EUR -124.2m
(9M 2023: EUR -129.6m; -4.2%) as a result of the reorganisation measures implemented in 2023 and despite inflation-driven salary adjustments made in H1 2024. Excluding negative extraordinary items of EUR 5.4m operating expenses would have been down by -5.5% to EUR -188.1m.

Other income decreased by -20.3% to EUR 13.2m (9M 2023: EUR 16.5m) but still reflected a material contribution to EBITDA in the first nine months of the year 2024.

As a result, EBITDA decreased to EUR 13.4m (9M 2023: EUR 50.2m) and EBITDA margin decreased to 6.9% (9M 2023: 21.6%) in the first nine months of the year 2024.

Results from fair value adjustments on temporarily consolidated properties and income tax payments continued to have a negative impact on the net results for the period.

Nevertheless, PATRIZIA maintains a solid balance sheet with a net equity ratio of over 61% and available liquidity of over EUR 120m, ready to seize opportunities when they arise, together with open equity commitments for transactions of EUR 1.7bn available for investments via managed funds.

PATRIZIA expects that the negative impact from a temporarily consolidated at-equity investment that burdened EBITDA during 9M 2024 will mostly unwind during Q4 2024 and hence have a subsequent positive impact on the financial results for Q4 2024.

PATRIZIA confirms the FY 2024 EBITDA guidance range of EUR 30.0m - 60.0m with the level of EBITDA yet dependent on timing of fee recognition and potential deconsolidation effects during the fourth quarter of 2024.

Statements by CEO and CFO
Asoka Wöhrmann, CEO of PATRIZIA SE comments: “We are seeing increased signs of investment activity, with more capital being reallocated to real estate and infrastructure, also fuelled by recent interest rate cuts. Clients are looking to broaden their risk and return profiles, in particular in residential, value-add and European infrastructure investments.  Our five strategic growth areas - Living, Value-add, Smart Cities, Infrastructure, and our independent investment platform Advantage Investment Partners (AIP) - resonate strongly with their investment focus. And we can offer clients attractive real asset solutions to drive value as the new cycle continues to build momentum.”

Martin Praum, CFO of PATRIZIA SE adds: “The first nine months 2024 financial performance reflects the still challenging market environment PATRIZIA operates in. Additionally, the negative effect of a temporary consolidated at-equity investment had a negative impact on our result, overshadowing the positive effects from the cost measures we initiated and implemented. We will nevertheless continue to focus on platform efficiency and tightly manage costs.”

 
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 https://www.patrizia.ag/en/ and www.patrizia.foundation/en.

Contact
Investor Relations Team
Phone: +49 821 509 10 600 
investor.relations@patrizia.ag