Branicks : Financial year 2023 Annual report

Focused on operational strength

Annual Report 2023

Branicks Group AG at a glance

Key financial figures

in EUR million	2023	2022	|Δ|
Gross rental income	188.3	176.0	12.3
Net rental income	164.6	152.5	12.1
Real estate management fees	50.9	88.4	37.5
Proceeds from sales of property	558.6	51.5	507.1
Profits on property disposals	8.2	12.7	4.5
Share of the profit or loss of associates	6.4	18.9	12.5
Funds from Operations excluding non-controlling
interest (FFO)	51.9	114.2	62.3
Funds from Operations II (excluding non-controlling
interest, including profit on disposals)	59.4	126.9	67.5
EBITDA	164.5	194.4	29.9
EBIT	8.5	120.5	112.0
Result for the period	- 70.7	42.9	113.6
Cash flow from operating activities	97.1	158.9	61.8
Key financial figures
per share in EUR 1	2023	2022	|Δ|
FFO per share (excluding non-controlling interest)	0.62	1.38	0.76
FFO II per share (excluding non-controlling interest)	0.71	1.53	0.82
Earnings per share (excluding non-controlling interest)	- 0.79	0.38	1.17

• All per share figueres adjusted in accordance with IFRSs (average number of shares 12M 2023: 83,427,284; 12M 2022: 82,689,478).

Balance sheet figures

in EUR million	31.12.2023	31.12.2022
Investment property	3,398.6	3,673.3
Non-current assets held for sale (IFRS 5)	237.5	540.8
Equity	1,527.1	1,664.1
Financial liabilities (incl. IFRS 5)	2,974.2	3,138.4
Total assets	4,846.2	5,180.3
Loan-To-Value ratio (LTV)2	60.1 %	57.8 %
Adjusted LTV 2, 4	57.6 %	54.7 %
NAV per share (in Euro)1, 5	15.54	19.16
Adjusted NAV per share (in Euro)4, 5	17.63	22.71
Key operating figures
	31.12.2023	31.12.2022
Number of properties	351	360
Assets under Management in EUR billion	13.2	14.7
Rental space in sqm	4,609,408	4,794,600
Letting result in sqm	446,600	374,900
Key operating figures (Commercial Portfolio)3
	31.12.2023	31.12.2022
Annualised rental income in EUR million	179.1	203.8
EPRA vacancy rate in %	5.3	4.3
WALT in years	4.9	5.5
Avg. rent per sqm in EUR	8.92	8.26
Gross rental yield in %	5.2	4.8

• All per share figueres adjusted in accordance with IFRSs (number of shares 31.12.2023: 83,565,510; 31.12.2022: 83,152,366).

• Adjusted for warehousing.

• Calculated for the Commercial Portfolio only, without repositioning and warehousing.
  4 Incl. full value of Institutional Business.
  5 previous year as of December 31, 2022 amount adjusted.

smart logistics

Logistics that simply work.

new work

Offices to enjoy working in.

sustainable management

Sustainability throughout the entire real estate life cycle.

Contents

1. Welcome to Branicks!

1. Who we are

1. What we offer

1. Our approach

1. To our shareholders
2. Investor relations and capital markets

25 Report of the Supervisory Board

1. Combined management report
2. Fundamental information about the group

38 Report on economic position

1. Non-financialkey performance indicators

1. Report on expected developments, risks and opportunities

1. Other disclosures

1. Corporate governance statement

1. Consolidated financial statements
2. Consolidated income statement
3. Consolidated statement of comprehensive income
4. Consolidated balance sheet
5. Consolidated statement of cash flows
6. Consolidated statement of changes in equity

114 Notes to the consolidated financial statements

180 Independent auditor's report

1. Overview

1. Legal notes

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Branicks Annual Report 2023

5

Welcome to Branicks!

Our teams did an exceptional job.

Sonja Wärntges

Dear Shareholders,

Despite all the adverse circumstances in the real estate market and macroeconomic environment, we came through 2023 with robust operations and continue to operate on

a stable basis. Nevertheless, we have had to steer Branicks through some turbulent waters.

We succeeded in doing so because we have a clear plan, reviewed and confirmed by experts, that demonstrates how we can keep the Company's strategy on track and strengthen our balance sheet in the long term. We have received widespread support from our banks and lenders and can now turn our full attention back to implementing our operating targets.

Understandably, our focus is on ensuring continuity in our exceptionally well positioned operating business. These efforts will increasingly also involve the transaction business again as the situation in the transaction market eases, albeit at a restrained pace initially. Our clearly defined transaction pipeline, together with our knowledge of and proximity to properties, clients and regions, means we are prepared for this shift in the transaction market from opportunistic activities to a continuum of real estate transactions.

The Branicks team once again did an exceptional job during the year under review and demonstrated the attributes that have set the Company apart and made it successful through the highs and lows of a history stretching back more than 25 years: the ability to adapt to change quickly and flexibly, uncover opportunities in every situation, and develop viable solutions.

Our company has been named Branicks Group AG since 2 October 2023. After 25 years of DIC Asset AG and its unparalleled track record of success, this new name not only marks the start of a new era but also an explicit recognition of the skills of our employees.

Branicks is a play on words using the words "Brains" - the expertise, experience and skills of our employees - and the term "Bricks", in reference to the genuine property value we create and maintain for our clients. Last but not least, Branicks has an international ring to it that chimes perfectly with our future ambitions to think beyond national borders, particularly in the logistics segment.

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6

The introduction of a consistent brand strategy under the punchy shared name of Branicks sends a strong message in challenging times. After acquiring GEG, RLI and VIB in recent years, we are now establishing a shared identity in Branicks that underscores our philosophy, simplifies and facilitates our decision-making processes and increases our profile in the markets and in the public eye. By pooling our resources and sharing best practices, we can consistently communicate our message across all channels and to all stakeholders.

Let's take a look at what affected our business in 2023, how we reacted and what action we have taken.

After a long period of strong growth, the commercial real estate market has involved into one dominated by existing properties. We haven taken advantage of individual opportunities as they arose, but returning to a normal transaction business - that is, continuous buying and selling activity - has proven to be an unexpectedly arduous marathon with each passing month during the past year. By cleaning up our peripheral activities in other asset classes and focusing on logistics and office assets, we are sharpening Branicks' contours. Our logistics portfolio is compelling to national and international investors. Here we take advantage of market opportunities and are in constant communication with investors. In the letting business, the commercial sector stands out from the residential market in one key respect, namely that a far greater proportion of leases in the housing market are indexed, which means rents rise automatically in line with inflation and protect value in real terms.

We took swift and decisive action to restructure many areas of the Company.

We launched our "Performance 2024" action plan to strengthen our liquidity for the long term and reduce our liabilities more quickly. This includes continuing to sell properties from our proprietary portfolio, strengthening our portfolio business with strong letting performance, placing alternative investment vehicles, and optimising and reducing our operating costs.

We are now focusing even more on activities to preserve and enhance the value of our properties.

In addition to preventative maintenance, this primarily includes structural and technical portfolio developments such as harnessing the potential of renewable energy. Our proactive thinking and actions address two key topics of the future, digitalisation and ESG, both of which are now crucial to a property's sustained value and future viability. We are also taking New Work to the next level in order to meet the needs of different target groups and create flexible workspaces.

In addition, we have created a valuation department that enables us to identify each property's individual needs in a targeted way. As one of the biggest players in the market, we have an extraordinary amount of expertise. With their regional presence and national network, our experts can focus specifically on the properties in our proprietary portfolio as well as providing support for third parties.

They deliver the best possible analysis with precise recom- mendations. Another factor that sets us apart is the fact that all modernisation and revitalisation work is managed by our own teams. There is no faster or more direct way to get the job done.

We boost the effectiveness of our property management and development by bundling and directly assigning each property to an asset manager. Our colleagues now cover a larger radius around each property, have their own decision-making powers and responsibilities, and can act quickly and appropriately.

Under the new model, four or five properties are managed by a single manager. Our agile management approach allows us to take a holistic view of our assets, develop them systematically and thus enhance their value. At the same time, this approach improves the efficiency and productivity of our own processes, saves resources and reduces costs.

We want to drive our business forward, support our partners in shaping a sustainable future and develop new strength from this. It is something we call "Focused on operational strength". Smarter, more creative and more agile, instead of further, higher and faster.

Ihre Sonja Wärntges

Chairwoman of the Executive Board

Branicks Annual Report 2023

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One Brand.

One Team.

Sonja Wärntges	Johannes v. Mutius
CEO and CFO	CIO
Sonja Wärntges joined the Management	Since April 2015, Johannes von Mutius
Board in the role of CFO in May 2013, and	has been in charge of the transaction
has headed Branicks Group AG as CEO	business of Branicks Group AG as
since 1 October 2017, being in charge of	Chief Investment Officer.
Strategy, Human Resources, IT,
Corporate Finance & Controlling,
Corporate Communications,
Investor Relations and M&A.

Torsten Doyen	Christian Fritzsche
CIBO	COO
Torsten Doyen has been Chief Institutional	Christian Fritzsche has been the
Officer at Branicks Group AG since	Chief Operations Officer (COO) at
January 2023. Prior to his appointment to	Branicks Group AG since January 2023.
the Management Board of Branicks Torsten	He has been employed by companies
Doyen was Managing Director at GEG	of the Branicks Group AG in leading
German Estate Group GmbH. The banking	positions since 2010, most recently as
economist and graduate real estate	Managing Director of Branicks Onsite
economist has more than 20 years of	GmbH. The business graduate has more
management experience in raising capital in	than 20 years of experience in the real
the real estate and fund industry.	estate industry.

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WHO WE ARE

Branicks is your reliable partner in commercial real estate.

We are your sparring partner and are always on hand to offer in-depth expertise. We bring investors together, buying and selling properties and operating and developing them for ourselves or third parties. We structure investment products and advise tenants, owners and investors.

Our business is built on a flexible platform that puts the right expertise for every situation at our fingertips. This diversification gives Branicks stability and resilience, especially in turbulent times.

360°

SUSTAINABLE

BUSINESS

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