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Vonovia SE

Investor Presentation • Sep 28, 2017

477_ip_2017-09-28_3d24662e-2c1c-406f-a28f-f59df15b959b.pdf

Investor Presentation

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Company PresentationMorgan Stanley Fixed Income Real Estate Conference

Dr. A. Stefan Kirsten, CFOOlaf Weber, Head of Finance and Treasury

1. Our Market

  1. Our Company

  2. Our Numbers

  3. Our Financing

German Residential – Favorable Fundamentals

Low home ownership ratio – Germans prefer to rent Rental housing very affordable in Germany

  • With the exception of Switzerland, Germany has the lowest homeownership ratio in Europe.
  • Rental regulation, favorable tenant laws, the general perception that home buying is a life-time decision and comparatively stringent financing requirements are main drivers for low homeownership rate.

Home ownership rate 2015 in %

  • Affordability in Germany is higher than in the UK or France.
  • Whereas most other European countries saw an increase, the share of rent-related payments in relation to disposable income declined in Germany between 2005 and 2015.

Rent as % of disposable household income

Sources: Federal Statistics Office, Eurostat

German Residential – Landlords Benefit from Structural Imbalance between Supply and Demand

New supply falls short of demand

  • Consensus estimates see a current shortage of around 1 million apartments in urban areas. Three main constraints stand in the way of material changes in the short and even medium term:
  • Building permits often take several years because city administrations lack qualified personnel.
  • Severe shortage of building capacity after years of downsizing.
  • Substantial gap between in-place values and market replacement cost render construction in affordable segment economically unfeasible.

Sources: Federal Statistics Office, IW Köln, GdW (German Association of Professional Homeowners)

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Vonovia History

  • Seed portfolios of today's Vonovia have origin in public housing provided by government, large employers and similar landlords with a view towards offering affordable housing.
  • At beginning of last decade, private equity invested in German residential on a large scale including into what is Vonovia today (mainly Deutsche Annington and Gagfah then).
  • IPO in 2013.
  • Final exit of private equity in 2014.

Vonovia at a Glance

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1 Free float according to Deutsche Börse is 92.5%, as Norges stake is not counted towards the free float

If You Want to Know Where Germans Live - Follow the Light

Illustration of Germany at Night

Illustration of Germany at Night

Note: Vonovia Strategic PortfolioHigh-influx cities ("Schwarmstädte"). For more information: http://investoren.vonovia.de/websites/vonovia/English/4050/financial-reports-_-presentations.html

Proven and Unchanged Strategy since IPO

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  1. Our Company

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Track Record

Robust business modell delivers growing cash-flows.

Growing Investment Volume

  • Investments into the portfolio are increasingly meaningful organic growth drivers and provide independence from acquisition opportunities.
  • Average 7% hurdle rate (unlevered) for each program year with investments in year one generally lead to rent growth in year two.
  • Increasing scope of work from single apartment over whole building to entire neighborhoods including modular space creation.

Accelerating Rent Growth Momentum

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3.8-4.0% organic rent growth for 2017 partly driven by ca. €470m investment volume in 2016. This year's investment volume of ca. €730m is expected to push organic rent growth above 4%

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1. Our Market

  1. Our Company

  2. Our Numbers

4. Our Financing

Our financing strategy pursues various goals:

  • The maintenance of our investment grade credit rating.
  • A balanced structure and maturity of our debt capital.
  • The optimisation of our financing costs.
  • To obtain adequate liquidity at all times.
  • An open and transparent relationship with our financing partners.

The de-risking character of our financing strategy is reflected in the following achievements:

  • Balanced and weighted maturity profile with max. 15% of total debt matures in one year.
  • Balanced debt composition through
  • •unsecured corporate bonds,
  • •hybrid instruments,
  • •securitisations and structured loans,
  • •low-interest mortgages (e.g. KfW and EIB loans).
  • Investment grade rating of "BBB+" from Standard & Poor's (S&P)

S&P´s view on Vonovia

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Rational:

  • Good asset allocation mainly in German cities that enjoy healthy economic and demographic trends.
  • Strong rental income supported by highly diversified asset and tenant base.
  • Low cost of debt and strong capacity to cover interest.
  • High investment and leverage policy.

Smooth Maturity Profile with Diverse Funding Mix

Average financing cost of debt maturing in the relevant year. 2 Weighted avg. financing cost excl. Equity Hybrid. Including Equity Hybrid the avg. interest rate of debt maturing in 2021 is 3.7%. 3 Net Debt as of June 30 over H1 EBITDA Operations annualized.

  • Well established Issuer Curve supports pricing efficiency and risk management approaches (e.g. for creditors).
  • Secondary spreads trade stable within tight borders for a long period of time.
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r 6		 FY
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lts
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No
v 6		 Int
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Re
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9M
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m
su

Appendix

Guidance Unchanged and Confirmed

  • Half way into the year we can fully confirm the 2017 guidance.
  • Final 2017 guidance and initial 2018 guidance with 9M results in November.
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First Call Date of Hybrid Bonds

Valuation methodology for German residential properties is primarily based on market prices for assets – not on interest rates

  • While market prices are affected by general interest rate levels, there is no significant correlation.
  • Other factors such as supply/demand imbalance, rental regulation, market rent growth, location of assets etc. outweigh the impact of interest rates when it comes to pricing residential real estate.
  • The steep decline in interest rates (down by 760bps since 1992) is not mirrored by asset yields (down by 120bps since 1992).
  • Asset yields outperformed interest rates by 240bps on average since 1992 and 550bps in June 2016.

Yearly asset yields vs. rolling 200d average of 10y interest ratesSources: Thomson Reuters, bulwiengesa

Three Valuation Layers with Different Volatilities

High degree of stability and predictability of underlying business (layer 1) and portfolio valuation (layer 2) is not reflected in share price development (layer 3), as equity markets appear to apply valuation parameters that are substantially less material for Vonovia's operating performance.

Company Presentation – September 2017 page 27

LTV Well within Target RangeDebt/EBITDA Multiple of 11.2x

LTV down to 43.2% and well within target range of 40%-45%.

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Debt/EBITDA multiple is net debt as of June 30 over H1 EBITDA Operations annualized.

Investment Program well on Track

  • Fully on track to execute 2017 investment program at an average yield on cost of ~7% unlevered.
  • 98% of projects committed or already completed.

Note: Numbers include projects kicked off in 2016.

Ramping Up Space Creation

  • The bottleneck is not availability of projects, building capacity or financing but construction permits including all preliminary approvals necessary.
  • By way of planning, applying for building permits and doing construction work for different projects in parallel, Vonovia is developing a pipeline to ensure a steady flow of project completions going forward to achieve a target run rate of 2,000 new apartments p.a.

Vonovia's strategy: planning, applying for construction permits and building a multitude of projects in parallel

Note: indicated durations are averages based on Vonovia's experience and can vary between different projects.

Growing Contribution from Value-add Business

Concept

  • Expansion of core business to extend the value chain by offering additional services and products that are directly linked to our customers and/or the properties and offer the same cash flow stability as the rental business.
  • Insourcing of services to ensure maximum process management and cost control.
  • Two types of Value-add Business
    1. External income (e.g. multimedia, smart metering)
    1. Internal savings (e.g. craftsmen, resi environment)
  • New initiatives always follow same low risk pattern of
  • Prototype development
  • Proof of concept in pilot phase
  • Roll-out across portfolio

Economics

  • NAV does not account for Vonovia's Value-add Business.
  • Applying the impairment test WACC1 to the 2017E Adj. EBITDA Value-add Business translates into an additional value of ~€5.1 per share (~16% on top of Adj. NAV).
io
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Sales – Steady Cash Flow at Attractive Margins

  • Overall sales volume lower than in prior-year period mostly as a result of portfolio transaction with LEG including privatizations in H1 2016.
  • Non-core / Non-strategic sales include a relatively large share of commercial properties from conwert portfolio.
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B
I
T
D
A
Sa
les		 4
4.
3		 4
6.
5

Improvements Across All KPIs

H
1
2
0
1
7		 H
1
2
0
1
6		 l
De
ta
`0
0		 2
2,
2
2		 21
9
3
8
,		 3
%
+1
/m
h
/sq
€
t
on
m		 6.
1		 5.
8
9		 +3
9
%
% 3. 2.
8		 0.
9p
p
% 2. 2.
8		 +0
.1p
p
€m 8
3
3.		 77
4.7		 6
%
+7
€ 27 27
7		 -0
%
.4
€m 6
0
7.		 5
5
8.
1		 +8
9
%
€m 5
7
3.		 5
3
5.
6		 +7
.1
%
€m 45 2
6.
0		 %
+7
5.
4
€m -1 -3
.5		 1
0
0
%
+>
€m 45 3
8
7.
8		 +1
8.
0
%
0.
9		 0.
8
3		 +1
5.
7
%
€ 0.
9		 0.
8
3		 +1
8.
1
%
€m 4
27		 3
5
8.
7		 +1
9.
1
%
€m 44 4
6.
5		 -4
.7
%
€m 6
5
1.		 6
0
6
4.		 8
%
+7
€m 8
9
4
1.		 0
9.
3
4		 %
+1
7.7
Ju
3
0,
2
0
1
7
n.		 De
3
1,
2
0
1
6
c.		 De
l
ta
€m 3
0,
8
3
0.		 27
11
5.
,		 3.
%
+1
7
€
/s
ha		 3
9.		 3
6.
5		 +7
3
%
€
/s
ha		 3
3.
1		 3
0.		 +7
6
%
% 4
3.
2		 41
6		 -4
2p
p
0
€
re
re		 6
2
7
9
2
6
6
5
6
1.5
7.7
6
8
2
3
9
2
25
0		 6
8
75

All Strategic Markets Show Upward Potential

Fair
Va		 lue In-p
lace
t
ren
io
l
ke
Re
M
t
g
na
ar		 (€m
)		 (€/s
qm)		 Res
iden
tial unit
s		 Livi
rea ('00
ng a
m)
0 sq		 Vac
anc
y (%)		 l (p.a
Tota
m)
., €		 Res
tial (p.a
iden
m)
., €		 (€/s
qm)		 Org
anic
t grow
ren
th (%)		 tiple (in-
Mul
plac
nt)
e re		 h
Ave
t gr
owt
rage
ren
fore
CB
RE (
5 yr
s) (%)
cast		 h
Ave
t gr
owt
rage
ren
(%)
fro
ize Apa
m O
ptim
rtm
ents
rlin
Be		 4,
6
25		 1,
8
2
0		 3
8,
5
8
2		 2,
44
4		 1.7 1
8
9		 17
9		 6.
21		 3.
2		 24
.4		 3.
3		 45
.5
nkf
Rh
ine
M
ain
Ar
(
Fra
urt
ea
,
dt,
bad
)
Da
sta
W
ies
rm
en		 3,
1
9
6		 1,
75
7		 2
8,
0
5
2		 1,
7
8
9		 1.
8		 1
6
4		 15
9		 7.5
4		 3.
9		 1
9.5		 3.
2		 4
0.
3
Rh
ine
lan
d (
Co
log
ne
,
Dü
ldo
rf,
Bo
)
sse
nn		 3,
1
0
5		 1,
4
6
4		 3
0,
75
6		 2,
0
6
3		 3.
1		 1
6
7		 15
9		 6.
6
5		 4.
3		 1
8.
5		 2.
8		 2
9.4
Dre
sde
n		 2,
6
97		 1,
15
3		 3
8,
6
0
3		 2,
1
9
6		 2.5 15
6		 14
6		 5.
6
7		 5.
5		 17
3		 3.
6		 3
5.
2
So
uth
Ru
hr
Are
ern
a
(
Do
rtm
d,
Ess
Bo
chu
m)
un
en
,		 2,
6
7
8		 9
6
3		 44
5
2
8
,		 2,
7
21		 3.
3		 1
8
1		 17
4		 5.
5
2		 4.
1		 14
8		 2.
1		 2
9.
1
Ha
mb
urg		 1,
7
8
7		 1,
6
4
8		 1
6,
5
8
4		 1,
0
5
1		 2.
2		 8
7		 8
3		 6.
6
7		 3.
7		 2
0.
5		 3.
0		 3
8.
6
Mu
nic
h		 1,
6
9
2		 2,
6
5
4		 9,
2
75		 6
2
4		 0.
8		 6
2		 8
5		 6
0
7.		 3.
4		 27
3		 4.
5		 6.
4
5
Stu
ttg
art		 1,
5
9
2		 1,
71
7		 14
2
3
5
,		 8
9
6		 1.
8		 8
2		 7
8		 7.4
2		 1.
9		 1
9.
3		 2.
8		 3
8.
4
No
rth
Ru
hr
Are
a (
Du
isb
ern
urg
,
Ge
lse
nk
irc
he
n)		 3
2
6
1,		 77
4		 27
2
8
1
,		 6
9
3
1,		 4.
1		 0
1
5		 0
2
1		 24
5.		 3.
4		 2.
6
1		 1.7 2
2.
9
Ha
nov
er		 0
0
1,
1		 2
3
6
1,		 3,
8
2
6
1		 8
75		 3.
0		 6
3		 6
1		 6.
0
1		 3.
2		 3
17		 2.7 3
4.
1
l
Kie		 9
2
8		 1,
1
0
3		 1
3,
9
8
3		 8
11		 1.
8		 5
6		 5
4		 5.
6
0		 3.
0		 1
6.
5		 2.
2		 3
5.
9
Bre
me
n		 8
5
4		 1,
14
7		 9
21
11
,		 2
3
7		 3.
7		 47 44 3
5.
4		 8
1.		 8.
2
1		 2.
9		 3
3.
6
Lei
ig
pz		 6
8
0		 1,
0
9
6		 9,
17
1		 5
8
7		 4.
2		 41 3
8		 5.
6
9		 1.
6		 1
6.
5		 2.4 21
.7
ha
lia
(
We
stp
Mü
nst
er,
brü
ck)
Os
na		 6
1
3		 9
6
8		 9,
6
5
1		 6
25		 2.
2		 41 4
0		 5.
4
6		 2.
8		 14
9		 2.5 3
0.
9
ibu
Fre
rg		 5
0
8		 1,
8
1
6		 4,
0
5
5		 27
7		 1.
8		 2
3		 2
2		 6.
8
3		 3.
4		 2
2.
1		 3.
7		 45
6
he
Ot
r S
tra
teg
ic L
tio
oca
ns		 1,
9
6
7		 1,
2
6
1		 24
0
1
2
,		 1,
5
24		 2.
9		 11
5		 11
1		 6.
2
2		 4.4 17
.1		 3.
1		 3
4.
6
To
tal
St
rat
ic
Lo
tio
eg
ca
ns		 2
9,
3
4
9		 1,
3
6
1		 3
3
4,
9
9
2		 2
0,
9
1
6		 2.
6		 1,
5
8
2		 1,
5
0
8		 6.
17		 3.
7		 1
8.
6		 2.
9		 3
4.4

Note: Difference between number of resi units in strategic locations and number of resi units in strategic clusters is due to privatization units that are included in the strategic locations but not in the strategic clusters.

Vonovia location

High-influx cities ("Schwarmstädte"). For more information: http://investoren.vonovia.de/websites/vonovia/English/4050/financial-reports-_-presentations.html

€
m
(
les
in
d
ica
d o
he
ise
)
te
t
un
s
rw		 H
1
2
0
1
7		 H
1
2
0
1
6		 l
D
t
e
a		 €
7.
2
/
sq
m		 €
6.
7
/
sq
1,
4		 1,
3
fo
Ex
in
t
p
e
ns
e
s
r m
a
e
na
nc
e		 -1
2
7.
3		 -1
1
9.
0		 7.
0
%
C
l
d
i
t
ize
in
t
p
m
e
na
nc
e
a
a
a		 -3
1.
5		 -2
9.
3		 7.
5
%		 5,
7		 5,
4
l
To
t
a		 -1
5
8.
8		 -1
4
8.
3		 7.
1
%
l
Ma
in
i
iza
io
t
t
t
e
na
nc
e
c
a
p
a
n		 2
0
%		 2
0
%		 2
0
H
1
1
7		 2
0
6
H
1
1
t
io
ra		 Ex
fo
in
te
p
en
se
s
r m
a
na
nc
e

Maintenance

Reconciliation IFRS Profit to FFO

€m
(u
nle
ind
ted
he
)
ica
ot
ise
ss
rw		 20
H1
17		 20
16
H1		 lta
De
RS
OF
FO
OD
IF
PR
IT
R T
HE
PE
RI		 1,
0
6
4.
6		 14
7.
9		 1
0
0
%
+>
l re
sul
Fin
cia
t
an		 14
8.
6		 27
6.
1		 -4
6.
2
%
Inc
e t
om
axe
s		 5
8
8.
0		 1
0
9.
9		 1
0
0
%
+>
De
cia
tio
nd
ort
iza
tio
pre
n a
am
n		 14
9		 1
0.
0		 +4
9.
0
%
e f
fa
of
Inc
ir v
alu
dju
stm
ts
inv
est
nt
rtie
om
rom
e a
en
me
pro
pe
s		 -1
1
6
4.7
,		 --- ---
= E
BI
TD
A I
FR
S		 6
5
1.4		 5
4
3.
9		 +1
9.
8
%
No
rrin
ite
n-r
ecu
g
ms		 6.
3
4		 9.
4
1		 %
-5
.7
To
tal
rio
d a
dju
fro
he
ld f
sal
stm
ts
ets
pe
en
m
ass
or
e		 -3
2.
9		 21
.1		 0
0
%
1
->
e f
oth
l es
Inc
in
stm
ts
in
tat
nie
om
rom
ve
en
er
rea
e c
om
pa
s		 -1
2.
9		 -9
.5		 1
0
0
%
->
= A
DJ
US
TE
D E
BI
TD
A		 6
5
1.
9		 6
0
4.
6		 +7
8
%
Ad
ted
ale
jus
EB
ITD
A S
s		 -4
4.
3		 -4
6.
5		 -4
.7
%
= A
DJ
US
TE
D E
BI
TD
A O
PE
RA
TI
ON
S		 6
0
7.
6		 5
5
8.
1		 +8
9
%
Int
FF
O
st
ere
ex
pe
nse		 -1
3
8.
0		 -1
6
2.
8		 -1
5.
2
%
Cu
inc
s F
FO
1
nt
e t
rre
om
axe		 -1
1.
9		 -7
.5		 8.
%
+5
7
= F
FO
1		 45
7.7		 3
8
7.
8		 +1
8.
0
%
Ca
ita
lize
d m
ain
ten
p
an
ce		 -3
0.
5		 -2
9.
1		 +4
8
%
O
= A
FF		 4
27
2		 3
5
8.
7		 +1
9.
1
%
Cu
FO
2
nt
inc
e t
s F
rre
om
axe		 -2
0.
1		 -2
5.
0		 -1
9.
6
%
2 (
1 i
l. A
dju
d E
ale
s/
inc
FF
O
FF
O
ste
BI
TD
A S
nt
e t
nc
cu
rre
om
ax
es
Sa
les
)		 4
8
1.
9		 4
0
9.
3		 +1
7.7
%
ha
FFO
1
in €
NO
SH		 0.
9		 0.
8
3		 +1
5.
7
%
(eo
)
pe
r s
re
p		 6
ha
(eo
)
AF
FO
in €
NO
SH
pe
r s
re
p		 0.
9
0		 0.
77		 +1
6.
5
%
mb
of
sha
(m
illio
n)
Nu
er
res
eo
p		 47
6.
5		 4
6
6.
0		 +2
2
%

IFRS P&L

(
les
d
d o
he
)
€m
in
ica
te
t
ise
un
s
rw		 H1
2
0
17		 H1
2
0
1
6		 De
l
ta
Inc
fro
let
ing
ert
t
om
e
m
p
rop
y		 1,
17
1.
6		 1,
1
0
0.
0		 6.
5
%
he
fro
Ot
r in
ert
t
co
me
m
p
rop
y
ma
na
g
em
en		 2
0.
8		 9.4
1		 7.
2
%
fro
In
ty
t
co
me
m
p
ro
p
er
m
an
ag
em
en		 1,
1
9
2.4		 1,
11
9.
4		 6.
5
%
Inc
fro
d
isp
l o
f p
ies
ert
om
e
m
os
a
rop		 7
0
1.
9		 8
5
0.
5		 %
-1
7.5
f p
l
d
Ca
ing
nt
ert
ies
rry
am
ou
o
rop
so		 -6
6
9
4.		 -8
3
0.
4		 -1
9.
9
%
Re
lua
ion
f a
he
l
d
for
le
t
ts
va
o
sse
sa		 5
3.
1		 17
0		 >1
0
0
%
f
it
d
isp
l o
f p
ies
Pr
t
o
on
os
a
ro
p
er		 9
0.
1		 3
7.
1		 0
0
%
>1
inc
fro
fa
ir
lue
d
j
f
inv
ies
Ne
t
tm
ts
tm
t p
t
om
e
m
va
a
us
en
o
es
en
ro
p
er		 6
1,
1
4.
7		 -
lize
d
l e
Ca
ita
int
p
er
na
xp
en
se
s		 9
9.5
1		 25
0
1		 5
9.
6
%
Co
f m
ls
st
ate
ria
o		 -5
6
9.5		 -5
0
6.
6		 1
2.4
%
Pe
l e
rso
nn
e
xp
en
se
s		 -2
0
7.
6		 -1
8
4.
6		 2.5
1
%
d a
De
iat
ion
rt
iza
t
ion
p
rec
an
mo		 9
-1
4.		 0.
0
-1		 4
8.
4
%
Ot
he
ing
in
t
r o
p
era
co
me		 5
1.5		 4
9.
8		 3.
4
%
he
Ot
t
ing
r o
p
era
ex
p
en
se
s		 -1
24
.4		 -1
0
6.
4		 0
%
17
Fin
ia
l in
an
c
co
me		 3.
4
7		 21
6		 >1
0
0
%
Fin
ia
l e
an
c
xp
en
se
s		 -1
7
2.
9		 -2
8
7.5		 -3
9.
9
%
ing
be
fo
Ea
ta
rn
s
re
xe
s		 1,
6
2.
6
5		 25
8
7.		 >1
0
0
%
Inc
e t
om
ax
es		 -5
8
8.
0		 -1
0
9.
9		 >1
0
0
%
f
it
fo
he
io
d
Pr
r t
o
p
er		 1,
0
6
4.
6		 14
7.
9		 >1
0
0
%
bu
b
le
At
tr
i
ta
to
:
Vo
via
's
ha
ho
l
de
no
s
re
rs		 9
9
3.
2		 11
0.
0		 >1
0
0
%
's
hy
br
d c
l in
Vo
via
i
ita
sto
no
ap
ve
rs		 14
8		 14
8		 0.
0
%
No
l
lin
int
tro
sts
n-c
on
g
ere		 5
6.
6		 2
3.
1		 >1
0
0
%
Ea
ing
ha
(
ba
ic
d
d
i
lut
d
)
in
€
rn
s p
er
s
re
s
an
e		 2.
1
2		 0.
24		 >1
0
0
%

IFRS Balance Sheet (1/2 – Total Assets)

€m
(
les
in
d
ica
d o
he
ise
)
te
t
un
s
rw		 Ju
3
0,
2
0
17
n.		 De
3
1,
2
0
1
6
c.		 De
lta
As
ts
se
i
b
le
Int
ts
an
g
as
se		 8
2,
95
7.		 2,
74
3.
1		 8
%
7.
lan
d e
Pro
ert
t a
ip
nt
p
p
n
q
me
y,
u		 1
3
0.
5		 11
5.
7		 2.
8
%
1
Inv
tm
t p
ert
ies
es
en
rop		 3
0,
4
95
.7		 2
6,
9
8
0.
3		 3.
0
%
1
Fin
ia
l a
ts
an
c
sse		 6
4
8.
4		 5
8
5.
9		 1
0.
7
%
Ot
he
ts
r a
sse		 1
0
9.4		 15
2		 >1
0
0
%
De
fer
d t
ts
re
ax
as
se		 24
9		 1
9.
6		 27
0
%
To
l n
ta
nt
et
on
-c
ur
re
a
ss
s		 3
3
6
6.
4,
7		 3
0,
9.
8
45		 1
2.
8
%
Inv
rie
to
en
s		 8
5.		 0
5.		 1
6.
0
%
de
b
les
Tr
iva
a
re
ce		 2
2
0.
7		 1
6
4.4		 3
2
%
4.
l a
Fin
ia
ts
an
c
sse		 1
0
2.
1		 15
3.
2		 -3
3.
4
%
he
Ot
ts
r a
sse		 1
6
5.
1		 1
0
2.7		 6
0.
8
%
b
les
Inc
e t
iva
om
ax
re
ce		 2
8.
4		 3
4.
6		 -1
7.
9
%
Ca
h a
d c
h e
iva
len
ts
s
n
as
q
u		 3
7
8.
1		 1,
5
4
0.
8		 -7
5.
5
%
As
he
l
d
for
le
ts
se
sa		 25
4.
1		 6
6
1.		 >1
0
0
%
l c
To
ta
nt
et
re
a
ss
s
ur		 1,
15
4.
3		 2,
0
6
2.
3		 0
%
-4
4.
To
l a
ta
et
ss
s		 3
5,
5
21
0		 3
2,
5
2
2.
1		 9.
2
%

IFRS Balance Sheet (2/2 – Total Equity and Liabilities)

(u
nle
ind
ted
he
)
€m
ica
ot
ise
ss
rw		 Jun
30
20
17
,		 De
31
20
16
c.
,		 lta
De
Eq
uit
nd
lia
bil
itie
y a
s
Su
bsc
rib
ed
ita
l
cap		 47
6.
5		 4
6
6.
0		 2.
3
%
Ca
l re
ita
p
ser
ve
s		 5,
6
7
3.
4		 5,
3
3
4.
9		 6.
3
%
Re
tai
ned
rni
ea
ng
s		 7,
1
3
6.
3		 6,
6
6
5.
4		 7.
1
%
Ot
he
r re
ser
ve
s		 8
8
1.		 1.5 >1
0
0
%
tal
uit
ibu
tab
le
via
's
sh
ho
lde
To
ttr
to
Vo
eq
y a
no
are
rs		 1
3,
3
6
8.
0		 1
2,
4
6
7.
8		 2
%
7.
ibu
tab
le t
o h
bri
d c
l in
Eq
uit
ttr
ita
sto
y a
y
ap
ve
rs		 1,
0
21
.4		 1,
0
0
1.
6		 2.
0
%
To
tal
uit
ttr
ibu
tab
le
to
Vo
via
's
sh
ho
lde
d h
bri
d c
ita
l in
sto
eq
y a
no
are
rs
an
ap
ve
rs
y		 14
3
8
9.
4
,		 1
3,
4
6
9.
4		 6.
8
%
No
llin
int
tro
sts
n-c
on
g
ere		 8
8
5.
7		 41
9.
0		 >1
0
0
%
To
tal
uit
eq
y		 15
27
5.
1
,		 1
3,
8
8
8.
4		 0.
0
%
1
Pro
vis
ion
s		 5
95
.4		 6
0
7.
9		 -2
.1
%
de
ab
les
Tra
pay		 0.
6		 1.
3		 -5
3.
8
%
fin
No
n d
eri
vat
ive
cia
l lia
bili
tie
an
s		 11
77
1.1
,		 6
3.
11
4
4
,		 1.1
%
riv
ati
De
ve
s		 8.
1
0		 1
9.
1		 8
%
-5
bili
s f
fin
lea
Lia
tie
rom
an
ce
ses		 94
.5		 94
.7		 -0
2
%
bili
olli
Lia
tie
s t
ntr
int
sts
o n
on
-co
ng
ere		 4.
9		 9.
9		 -5
0.
5
%
Ot
he
r li
ab
iliti
es		 8
0.
8		 8
3.
3		 -3
0
%
De
fer
red
x l
iab
iliti
ta
es		 9
2.
6
4,
4		 3,
6
9.5
7		 1
9.
2
%
tal
t l
iab
ilit
ies
To
no
n-c
ur
ren		 17
0
5
7.
9
,		 1
6,
2
2
9.
1		 5.
1
%
Pro
vis
ion
s		 3
6
0.
8		 3
7
0.
8		 -2
.7
%
Tra
de
ab
les
pay		 2
3.
1
5		 3
8.
8
1		 -1
1.
0
%
No
n d
eri
ive
fin
cia
l lia
bili
tie
vat
an
s		 2,
8
4
6.
5		 27
1,
7
6		 3.
9
%
4
De
riv
ati
ve
s		 2
9.
9		 5
7.5		 8.
0
%
-4
bili
s f
fin
lea
Lia
tie
rom
an
ce
ses		 11
2		 4.
5		 >1
0
0
%
Lia
bili
tie
olli
int
s t
ntr
sts
o n
on
-co
ng
ere		 0.
4		 2.7 -8
5.
2
%
Ot
he
r li
ab
iliti
es		 17
5.
7		 0
2.7
1		 71
.1
%
tal
lia
bil
itie
To
nt
cu
rre
s		 3,
1
8
8.
0		 2,
4
0
4.
6		 3
2.
6
%
tal
lia
bil
itie
To
s		 2
0,
24
5.
9		 1
8,
6
3
3.
7		 8.
7
%
To
tal
uit
nd
lia
bil
itie
eq
y a
s		 3
21
0
5,
5		 3
2,
2
2.
1
5		 9.
2
%

Historical Key Figures (1/2)

Fin
cia
l K
Fig
s (
€m
les
ed
oth
ise
)
tat
an
ey
ure
un
s s
erw
,		 H1
2
0
17		 2
0
1
6		 2
0
15		 2
0
14		 2
0
1
3
Re
l in
nta
co
me		 8
3
3.
2		 3
8.
1,
5
1		 6
1,
41
4.		 8
9.
3
7		 2
8.
0
7
A
d
j
d
EB
IT
DA
Op
ion
te
t
us
era
s		 6
0
7.
6		 0
94
0
1,		 95
6
7.		 0
3.
5
4		 2.4
44
A
d
j
d
EB
IT
DA
R
l
te
ta
us
en		 5
7
3.
5		 0
6.
2
1,
4		 9
24
.4		 8
2.
6
4		 3
3.
0
4
A
d
j
d
EB
IT
DA
V
lue
d
d
Bu
ine
te
us
a
-a
s
ss		 45
6		 5
7.
0		 3
7.
6		 2
3.
6		 1
0.
5
A
d
j
d
EB
IT
DA
Ot
he
te
us
r		 -1
1.5		 -9
2		 -4
.4		 -2
8		 -1
.1
Inc
fro
d
isp
l o
f p
ies
ert
om
e
m
os
a
rop		 7
0
1.
9		 1,
2
27
9		 7
2
6.
0		 2
8
7.
3		 3
5
3.
5
A
d
j
d
EB
IT
DA
S
les
te
us
a		 44
3		 9
2,
5		 71
.1		 5
0.
1		 27
.7
A
d
j
d
EB
IT
DA
te
us		 6
5
1.
9		 1,
1
8
6.
5		 1,
0
2
8.
7		 3.
5
5
5		 0.
1
47
EB
IT
DA
IF
RS		 6
5
1.4		 1,
0
8
3.
7		 8
3
8.
4		 5
0
0.
3		 4
3
1.
0
FF
O
1		 45
7.7		 7
6
0.
8		 6
0
8.
0		 2
8
6.
6		 2
2
3.
5
he
f a
bu
b
le
ha
ho
l
de
t
ttr
i
ta
to
Vo
via
reo
no
s
re
rs		 4
3
1.1		 71
3.
4		 5
5
5.
5		 27
5.
1		 21
8.
4
he
f a
bu
b
le
hy
br
d c
l in
t
ttr
i
ta
to
Vo
via
i
ita
sto
reo
no
ap
ve
rs		 2
0.
0		 4
0.
0		 3
3.
0		 - -
he
f a
bu
b
le
l
lin
t
ttr
i
ta
to
No
tro
int
sts
reo
n-c
on
g
ere		 6.
6		 7.4 1
9.5		 11
.5		 5.
1
FF
O
2		 8
4
1.
9		 8
2
3.
8		 6
6
2.
1		 3
3
6.
7		 25
1.
2
O
AF
F		 27
2
4		 6
8
9.
2		 5
2
0.
5		 25
8.
3		 2
0
3.
5
O
ha
€
FF
1 p
in
er
s
re		 0.
9
6		 1.
6
3		 1.
3
0		 1.
0
0		 0.
95
fro
fa
lue
d
f in
Inc
ir v
j
tm
ts
stm
t p
ert
ies
om
e
m
a
a
us
en
o
ve
en
rop		 1,
1
6
4.7		 3,
2
3
6.
1		 1,
3
2
3.
5		 3
71
.1		 5
5
3.
7
EB
T		 1,
6
5
2.
6		 3,
8
5
9.
8		 1,
7
3
4.
5		 5
8
9.
1		 6
8
9.
6
Pro
fit
for
he
io
d
t
p
er		 0
6
6
1,
4.		 2,
2.
9
5
1		 9
94
.7		 0
9.7
4		 8
2
4
4.
Ca
h
f
low
fro
ing
ivi
ies
t
t
t
s
m
op
era
ac		 47
5.
4		 8
2
8.
9		 6
8
9.
8		 3.
2
45		 25
9.
6
Ca
h
f
low
fro
inv
ing
ivi
ies
t
t
t
s
m
es
ac		 9.
0
1,
17
-		 6.
41
4		 -3
2
3
9.
8
,		 9
-1
17
7.
,		 3
17
1.
Ca
h
f
low
fro
fin
ing
ivi
ies
t
t
s
m
an
c
ac		 9.
-4
5
1		 -2
8
2.4
1
,		 0
9
3.
4,
1		 1,
74
1.7		 -3
3.
2
5
Ma
int
d m
de
iza
ion
t
en
an
ce
a
n
o
rn		 6.
45
4		 7
9
2.4		 6
8
6.
3		 3
45
.5		 2
2
8.
4
he
f
for
int
d c
ita
lize
d m
int
t
reo
m
a
en
an
ce
ex
p
en
se
s a
n
ap
a
en
an
ce		 15
8.
8		 3
2
0.
1		 3
3
0.
7		 17
3.
8		 15
7.
6
he
f
for
de
iza
ion
t
t
reo
m
o
rn		 2
97
6		 47
2.
3		 3
5
5.
6		 17
1.7		 7
0.
8

The key figures of prior years have been adjusted to match the definitions of the 2016 fiscal year. The key figures per share are based on the shares carrying dividend rights on the corresponding reporting date. Values for 2013 and 2014 are TERP-adjusted.

Historical Key Figures (2/2)

lan
Sh
s (
les
ed
oth
)
Ke
Ba
eet
Fig
€m
tat
ise
ce
ure
un
s s
erw
y
,		 3
0,
Ju
n.
2
0
17		 3
De
1,
c.
2
0
1
6		 3
De
1,
c.
2
0
15		 3
De
1,
c
2
0
14		 3
De
1,
c
2
0
1
3
Fa
ir v
lue
f r
l e
fo
lio
sta
te
ort
a
o
ea
p		 3
0,
8
3
0.
2		 27
11
5.
6
,		 24
15
7.7
,		 1
2,
75
9.
1		 1
0,
3
2
6.
7
A
d
j
d
NA
V
te
us		 15
77
1.
0
,		 3
2
8.
2
14
,		 27
3.
11
5
,		 6,
2.
0
47		 2
3.
5,
1
4
A
d
j
d
NA
V
ha
in
€
te
us
p
er
s
re		 3
3.
1
0		 3
0.
75		 24
.1
9		 2
2.
6
7		 21
.74
LT
V
(
%
)		 4
3.
2		 41
6		 47
3		 4
9.7		 4
9.
0
No
n-F
ina
nci
al
Ke
Fig
ure
y
s		 2
0
H1
17		 2
0
6
1		 2
0
15		 2
0
14		 2
0
3
1
f u
Nu
be
nit
d
m
r o
s m
an
ag
e		 41
6,
2
8
2		 3
9
2,
3
5
0		 3
97
7
9
9
,		 2
3
2,
24
6		 2
0
1,
7
3
7
he
f o
t
art
nts
reo
wn
ap
me		 3
5
2,
8
15		 3
3
3,
3
8
1		 3
5
7,
11
7		 2
0
3,
0
2
8		 17
5,
25
8
he
f a
d
by
he
t
art
nts
ot
reo
p
me
ow
ne
rs		 6
3,
6
4
7		 8,
9
6
9
5		 0,
6
8
2
4		 2
9,
21
8		 2
6,
9
47
Nu
be
f u
nit
bo
ht
m
r o
s
ug		 2
3,
74
5		 2,
8
15		 6
8,
6
3
2
1		 3
8
8
1,
5		 0
be
f u
nit
l
d
Nu
m
r o
s s
o		 8
4,
4
4		 2
6,
6
3
1		 15
17
4
,		 8
4,
0
1		 6,
7
2
0
he
f P
riv
ize
t
at
reo		 6
0
1,
1		 2,
0
7
1		 2,
97
9		 2,
2
3
8		 2,
6
5
7
he
f N
-C
t
reo
on
ore		 3,
3
24		 2
3,
9
3
0		 2,
95
1
1		 8
3
1,
4		 4,
14
4
Va
(
in
%
)
rat
ca
nc
e
eo
p
y
;		 2.
9		 2.4 2.7 3.
4		 3.
5
Mo
h
ly
in-
lac
in
€
/sq
nt
t
p
e r
en
m		 6.
2
1		 6.
0
2		 5.
75		 8
5.
5		 0
5.
4
Mo
h
ly
in-
lac
ic
h
(
%
)
nt
t o
t
p
e r
en
rg
an
g
row		 3.
7		 3.
3		 - - -
Nu
be
f e
loy
m
r o
mp
ee
s		 8,
25
7		 3
7,
4
7		 6,
3
6
8		 3,
8
0
5		 2,
9
3
5
EP
RA
Ke
Fig
y
ure
s		 H1
2
0
17		 2
0
1
6		 2
0
15		 2
0
14		 2
0
1
3
EP
RA
N
AV		 1
8,
7
0
2.
8		 17
0
47
.1
,		 1
3,
9
8
8.
2		 6,
5
7
8.
0		 5,
1
2
3.
4
EP
RA
N
AV
ha
in
€
**
p
er
s
re		 3
9.
25		 3
6.
5
8		 3
0.
0
2		 2
3.
0
4		 21
.74
EP
RA
N
NN
AV		 1
2,
0
3
4.4		 9,
7
3
9.
8		 - -
EP
RA
Ea
ing
rn
s		 44
8.
5		 3
2
9.
2		 - -
l Y
l
d
EP
RA
N
et
In
it
ia
ie
in
%		 4.
1		 4.
5		 - -
"to
d-
" N
l Y
l
d
EP
RA
et
In
it
ia
ie
in
%
p
p
e
up		 4.
1		 4.
5		 - -
EP
RA
V
te
in
%
ac
an
cy
ra		 2.
2		 2.5 3.
0		 3.
1
C
io
(
inc
l.
d
ire
)
in
%
EP
RA
t R
at
ct
sts
os
va
ca
nc
co
y		 2
8.
4		 3
1.
9		 - -
EP
RA
C
t R
io
(
l.
d
ire
)
in
%
at
ct
sts
os
ex
c
va
ca
nc
co
y		 27
0		 3
0.
2		 - -

The key figures of prior years have been adjusted to match the definitions of the 2016 fiscal year. The key figures per share are based on the shares carrying dividend rights on the corresponding reporting date. Values for 2013 and 2014 are TERP-adjusted.

Vacancy Rates – Annual Comparison

German Residential – Safe Harbor and Low Risk

Evergreen contracts in a regulated market safeguard sustainable growth

  • Contrary to most other jurisdictions such as the USA, residential lease agreements are evergreen contracts; rental growth is regulated and not directly linked to CPI, GDP development etc.
  • Rents are regulated via "Mietspiegel" (city-specific rent indices), which look at the asking rents of the previous four years to determine a rent growth level for existing tenants for the next two years.

Sources: Federal Statistics Office, GdW (German Association of Professional Homeowners), REIS, BofA Merrill Lynch Global Research; BIP USA: IMF, Statista Note: Due to lack of q-o-q US rent growth data, the annual rent growth for a year is assumed to also be the q-o-q rent growth of that year

German Residential – Favorable Fundamentals

Fragmented ownership structure

  • Germany is the largest housing market in Europe with ~42m housing units, of which ~23m are rental units.
  • Ownership structure is highly fragmented and majority of owners are non-professional landlords.
  • Listed sector represents ~4% of total rental market.

Growing number of smaller households

  • While the overall population in Germany is expected to slightly decline, the number of households is forecast to grow until at least 2030 with a clear trend towardssmaller households.
  • The household growth is driven by various demographic and social trends including divorce rates, employment mobility etc.

Ownership structure (million units)

Distribution of household sizes (million)

Sources: Federal Statistics Office, GdW (German Association of Professional Homeowners)

Impressions

Frankfurt

Frankfurt

Frankfurt

Impressions

Dortmund

Dresden

Dresden

Dresden

Impressions

Essen

Dortmund

Dortmund

Optimize Apartment

Optimize Apartment

Before

Upgrade Building

Before

Company Presentation – September 2017 page 51

After

Upgrade Building

Before

After

Company Presentation – September 2017 page 52

Upgrade Building

Company Presentation – September 2017 page 53

Modernization - Impressions

Before

Addition of new floor plus modernization investment

Upgrade Building

Addition of new floor plus modernization investment

Upgrade Building

Floor Addition

Floor Addition

Pictures taken at the production site of our cooperation partner Modulbau Lingen.

Neighbourhood Development "Eltingviertel"

VTS Van

Disclaimer

This presentation has been specifically prepared by Vonovia SE and/or its affiliates (together, "Vonovia") for internal use. Consequently, it may not be sufficient or appropriate for the purpose for which a third party might use it.

This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by the recipient to any other person. Receipt of this presentation constitutes an express agreement to be bound by such confidentiality and the other terms set out herein.

This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of Vonovia ("forward-looking statements") which reflect various assumptions concerning anticipated results taken from Vonovia's current business plan or from public sources which have not been independently verified or assessed by Vonovia and which may or may not prove to be correct. Any forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date the presentation is provided to the recipient. It is up to the recipient of this presentation to make its own assessment of the validity of any forward-looking statements and assumptions and no liability is accepted by Vonovia in respect of the achievement of such forward-looking statements and assumptions.

Vonovia accepts no liability whatsoever to the extent permitted by applicable law for any direct, indirect or consequential loss or penalty arising from any use of this presentation, its contents or preparation or otherwise in connection with it.

No representation or warranty (whether express or implied) is given in respect of any information in this presentation or that this presentation is suitable for the recipient's purposes. The delivery of this presentation does not imply that the information herein is correct as at any time subsequent to the date hereof.

Vonovia has no obligation whatsoever to update or revise any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof.

This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities of the Company nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement to enter into any contract or commitment or investment decision whatsoever.

This presentation is neither an advertisement nor a prospectus and is made available on the express understanding that it does not contain all information that may be required to evaluate, and will not be used by the attendees/recipients in connection with, the purchase of or investment in any securities of the Company. This presentation is selective in nature and does not purport to contain all information that may be required to evaluate the Company and/or its securities. No reliance may or should be placed for any purpose whatsoever on the information contained in this presentation, or on its completeness, accuracy or fairness.

This presentation is not directed to or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

Neither this presentation nor the information contained in it may be taken, transmitted or distributed directly or indirectly into or within the United States, its territories or possessions. This presentation is not an offer of securities for sale in the United States. The securities of the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States. Consequently, the securities of the Company may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States unless registered under the Securities Act.

Tables and diagrams may include rounding effects.

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