Instone Real Estate Group (INS) Q1 2025 earnings summary

Executive summary

• Achieved strong B2C sales momentum in Q1 2025, with retail sales up 52% year-over-year despite macroeconomic and political uncertainties in Germany.

• Institutional sales pipeline is progressing, with several transactions expected to close in H2 2025.

• New product launches tailored to tax incentives, especially for buy-to-let investors, have driven demand.

• Project portfolio expanded to €6,971.4 million (43 projects), with 93% of under-construction units pre-sold and diversified across key German metropolitan regions.

• Management reaffirmed 2025 guidance, expecting adjusted revenue of €500–600 million, gross profit margin of ~23%, and adjusted EAT of €25–35 million.

Financial highlights

• Q1 2025 adjusted revenues were €105 million, down 12.1% year-over-year, with gross margin at 26.8%.

• Adjusted EAT was €7.5 million, down 21.9% year-over-year.

• Sales contracts volume reached €41.6 million, significantly below the prior year due to a large institutional sale in Q1 2024.

• Adjusted EBIT was €12.9 million (down 18.4% year-over-year); adjusted EBITDA was €13.9 million (down 18.7%).

• Cash and cash equivalents stood at €252.2 million, with operating cash flow over the past two years totaling around €210 million.

Outlook and guidance

• Full-year 2025 guidance confirmed: adjusted revenue €500–600 million, gross profit margin ~23%, adjusted EAT €25–35 million, and sales contracts volume >€500 million.

• Management expects a significant recovery in demand in H2 2025, particularly for institutional sales, but not a full return to pre-crisis sales volumes.

• Continued focus on growth investments and land acquisitions, with several deals in advanced negotiation.

• Sales target remains above €500 million, with a roughly 50/50 split between institutional and private clients, though private demand may exceed.

• Lower gross margin expected in coming quarters as planned.