Vonovia SE

Earnings Release • Aug 6, 2021

News Details

Corporate | 6 August 2021 07:01

Vonovia SE: Vonovia shows stable development and is raising its annual targets for 2021 (news with additional features)

DGAP-News: Vonovia SE / Key word(s): Half Year Report

06.08.2021 / 07:01

The issuer is solely responsible for the content of this announcement.

**Results as of 30 June 2021

Vonovia shows stable development and is raising its annual targets for 2021**

– Further improvements in customer satisfaction

Continued reduction of CO 2 levels within the property portfolio; Sustainability Performance Index expected to reach around 105% in 2021

– Increased earnings forecast for the full year 2021

– Segment revenues in H1 2021 grew by around 10% to € 2.3 billion, the Adjusted EBITDA total improved by around 8% to € 1.0 billion, and the Group FFO increased by around 13% to € 765 million

– Property portfolios in Germany, Sweden and Austria have increased by around € 4.2 billion; strong development in large cities in western Germany and Saxony and in the urban conglomerations of Stockholm and Gothenburg in Sweden

Bochum, 6 August 2021 – Vonovia SE (“Vonovia”) can look back to a successful first half of 2021. All key performance indicators are showing a positive development, coupled with yet another rise in customer satisfaction. Building on this stable economic development, the Bochum-based housing company is now raising its forecast for 2021.

“We’re still on track – both economically and in the satisfaction of our tenants. It’s very much to the credit of our workforce that we’re getting so much positive feedback – despite the coronavirus pandemic,” says CEO Rolf Buch. “And another area that’s paid off is our endeavours to build a climate-neutral building portfolio, as we’ve made further progress in reducing CO 2 emissions in our buildings. We are progressing even faster than planned.”

Sustainability Performance Index expected to be well above target in 2021

The first six months of 2021 saw yet another increase in customer satisfaction, with a 4.2% year-on-year rise in the relevant index CSI. The decisive factors for this improvement primarily included a better rating for Vonovia’s accessibility by phone, the on-site services provided by its property managers and the landscaping of the outdoor residential space .

Employees of the housing company are continuing to work in the flooded areas, where they are helping people and providing support in cleaning up debris and restoring safety. Many of the apartments in Vonovia’s portfolio are located in Cologne/Bonn, Aachen, Eschweiler and Bergisches Land, which were affected particularly badly by the floods. In these areas, around 3,000 tenants are currently battling with the consequences of the heavy rainfalls that hit their homes, basements and neighbourhoods.

The rise in customer satisfaction is reflected in Vonovia’s Sustainability Performance Index (SPI), a non-financial indicator that measures its sustainability strategy. Vonovia is expecting to see an SPI of around 105% for 2021 as a whole, a value which is significantly above the original target of around 100%. In addition to customer satisfaction, this SPI value is due, in particular, to Vonovia’s reduction of CO 2 emissions in its building portfolio.

Earlier this month, the rating agency Sustainalytics ranked Vonovia as number 18 among more than 13,500 rated companies in a global sustainability ranking (3rd place in the ranking of 1,001 rated real estate companies). This represents yet again an improvement over the excellent results of the previous year, confirming Vonovia’s secure position in the German DAX 50 ESG index.

Increase in profit forecast for the entire year 2021

The successful first half of the year has also led to an upward revision of the forecast for 2021 as a whole. Adjusted EBITDA Total is expected to be between € 2,055 million and € 2,105 million (+ € 80 million), and Group FFO within a bandwidth of € 1,465 million and € 1,515 million (+ € 50 million).

Economic growth continued to be robust in H1

The segment revenue total rose by 10.0%, from € 2,101.9 million in the first half of 2020 to € 2,312.3 million in the first half of 2021. This was largely due to the sale of 1,865 single residential units (Recurring Sales), the sale of properties in the Development segment as well as organic growth and efficiency increases in core business operations.

Adjusted EBITDA Total improved by 8.4% to € 1,021.8 million (H1 2020: € 942.2 million). Adjusted EBITDA in the Rental business was € 823.8 million (H1 2020: € 781.4 million). Earnings from residential services (Value-add) also increased, growing by 17.2% to € 79.2 million (H1 2020: € 67.6 million). Recurring Sales EBITDA rose by 73.6% to € 83.5 million (H1 2020: € 48.1 million).

Group FFO rose by 13.1% to € 764.7 million (H1 2020: € 676.3 million). A positive effect could be observed, in particular, from organic growth through new construction, modernisation and Recurring Sales.

Significant increase in property values

As at 30 June 2021, Vonovia was managing around 414,000 of its own rental units (H1 2020: 415,000). With around 354,000 apartments in Germany, Vonovia has a market share of approx. 1.5%.

Net Asset Value (EPRA NTA) was € 39.4 billion and thus 10.9% higher than at the end of 2020 when it had been € 35.5 billion. Because of market dynamics, Vonovia has revalued three quarters of its portfolio. The € 4.2 billion increase in property values during H1 2021 (including investments) can be attributed to a high demand for housing in Germany, though also in Sweden and Austria. This dynamic can be observed almost everywhere in Germany, such as the Rhine-Main region, in Dresden and Leipzig as well as the Ruhr area. In Sweden, dynamic developments are particularly in evidence in the conurbations around Stockholm and Gothenburg. Another factor that has contributed to the increase in value is Vonovia’s investment programme for modernisation and new construction. The company is expecting to see a further increase in value from valuation effects and investments during the second half of 2021.

The vacancy rate in its residential stock at the end of June 2021 was 2.7%, slightly below the corresponding figure for 2020, which was 2.8%. The market-driven increase in rents was 0.9% (H1 2020: 1.0%). Investments in modernisation with a view to higher energy efficiency led to a 2.0% increase (H1 2020: 2.3%), while investments in new construction and additional floors created a further 0.5% (H1 2020: 0.6%). The effective average monthly rent at the end of June 2021 was € 7.29 per square metre in the group and € 7.09 per square metre in Germany.

Vonovia announces takeover bid to Deutsche Wohnen shareholders

As announced yesterday, Vonovia has decided to submit a new takeover bid to the shareholders of Deutsche Wohnen before the end of August 2021. BaFin, the German Federal Financial Supervisory Authority, has already given the go-ahead for a renewed takeover bid.

Faced with major challenges in the housing market – climate protection, affordable housing and new construction – the two companies agree that such issues can be addressed far more effectively by pooling their resources and that a merger will be of benefit to shareholders, tenants and the housing market alike.

Greater volume of new construction and more maintenance work

Climate protection, demographic change and the housing shortage in urban areas continue to be high on Vonovia’s corporate agenda.

In total, Vonovia invested € 868.0 million in maintenance, modernisation and new construction between January and June 2021 (H1 2020: € 859.1 million). At € 291.0 million, maintenance work during the first six months of 2021 was up 17.4% compared with the previous year (€ 247.9 million). In the first half of the year, Vonovia upgraded more than 5,268 apartments to make them senior-friendly and renovated 6,651 apartments to make them more energy-efficient. New construction also increased, reaching € 227.2 million (up 30.5%). In total, Vonovia completed 841 new residential units (H1 2020: 617). The modernisation volume, on the other hand, declined, mainly due to the – now discontinued – rent freeze in Berlin and the restrictions imposed under the coronavirus pandemic.

In cases where tenants run into financial difficulties, Vonovia finds specially tailored solutions, thanks to its own hardship management scheme, launched in 2018. On this basis, Vonovia worked with other housing companies in the second quarter of 2021 in defining a set of standard rules for mitigating cases of hardship in modernisation projects. The new rules are also supported by the German Tenants’ Association (Deutscher Mieterbund). “These guidelines put the main focus on the actual tenants. They provide greater reassurance than ever before that we will find solutions for every customer who faces economic difficulties. This is important for the people who live in our properties, it empowers their neighbourhoods, and it preserves the tenant structures that have grown within them,” says Arnd Fittkau, CRO of Vonovia.

Moody’s rating for the first time

In May 2021, Moody’s became the third major rating agency to publish a rating for Vonovia. It awarded an A3 investment grade and described Vonovia’s outlook as stable. Vonovia’s LTV (loan-to-value ratio) was 40.5% at the end of June 2021 and thus 1.1 percentage points higher than at the end of 2020.

In June, Vonovia issued a total of five unsecured fixed-interest bonds, worth € 4 billion in all. The bonds have an average coupon of 0.6875% and terms between 3.25 and 20 years (average: 9.5 years). Vonovia issued its first green bond for € 600 million in the first quarter. This green bond, which has a ten-year term and an interest rate of 0.625%, is a further step in the company’s sustainability strategy.

The full quarterly report can be found at the following web addresses:

DE: https://reports.vonovia.de/2021/q2/de

EN: https://reports.vonovia.de/2021/q2/en

Further details, photographic material and video footage can be found in the Press section and the Media Library

Financial calendar 2021:

4 November 2021: Interim Statement for the first nine months of 2021

Financial Key Figures in € million		H1 2020		H1 2021		Change in %
Total Segment Revenue		2,101.9		2,312.3		10.0
Adjusted EBITDA Total		942.2		1,021.8		8.4
Adjusted EBITDA Rental		781.4		823.8		5.4
Adjusted EBITDA Value-add		67.6		79.2		17.2
Adjusted EBITDA Recurring Sales		48.1		83.5		73.6
Adjusted EBITDA Development		45.1		35.3		-21.7
Group FFO		676.3		764.7		13.1
Profit for the period		1,618.1		2,680.1		65.6
Total cost of maintenance, modernization and new construction (to hold)		859.1		868.0		1.0
thereof for maintenance expenses and capitalized maintenance		247.9		291.0		17.4
thereof for modernization		437.1		349.8		-20.0
thereof for new construction (to hold)		174.1		227.2		30.5

Key Balance Sheet Figures in € million		Dec. 31, 2020		June 30, 2021		Change in %
Fair value of the real estate portfolio		58,910.7		63,099.4		7.1
EPRA NTA		35,488.6		39,373.2		10.9
EPRA NTA pro Aktie in €*		62.71		68.44		9.1
LTV in %		39.4		40.5		1.1 pp

Non-financial Key Figures		H1 2020		H1 2021		Change in %
Number of units managed		488,367		485,739		-0.5
thereof own apartments		414,879		414,068		-0.2
thereof apartments owned by others		73,488		71,671		-2.5
Number of new apartments completed		617		841		36.3
thereof own apartments		534		389		-27.2
thereof apartments for sale		83		452		>100
Vacancy rate in %		2.8		2.7		-0.1 pp
Organic rent increase (in %)		7.03		7.29		3.7
Number of employees (as of June 30/Dec. 31)		10,440		10,793		3.4

* Based on the shares carrying dividend rights on the reporting date June 30, 2020: 542,273,611, June 30, 2021: 575,257,327 and Dec. 31, 2020: 565,887,299.

About Vonovia

Vonovia SE is Europe’s leading private residential real estate company. Vonovia currently owns around 414,000 residential units in all attractive cities and regions in Germany, Sweden and Austria. It also manages around 72,000 apartments. Its portfolio is worth approximately € 63.0 billion. As a modern service provider, Vonovia focuses on customer orientation and tenant satisfaction. Offering tenants affordable, attractive and livable homes is a prerequisite for the company’s successful development. Therefore, Vonovia makes long-term investments in the maintenance, modernization and senior-friendly conversion of its properties. The company is also creating more and more new apartments by realizing infill developments and adding to existing buildings.

The company, which is based in Bochum, has been listed on the stock exchange since 2013. Since September 2015 Vonovia has been a constituent in the DAX 30 and since September 2020 in the EURO STOXX 50. Vonovia SE is also a constituent of additional national and international indices, including DAX 50 ESG, Dow Jones Sustainability Index Europe, STOXX Global ESG Leaders, EURO STOXX ESG Leaders 50, STOXX Europe ESG Leaders 50, FTSE EPRA/NAREIT Developed Europe, and GPR 250 World. Vonovia has a workforce of more than 10,000 employees.

Additional Information:

Approval: Regulated Market/Prime Standard, Frankfurt Stock Exchange

ISIN: DE000A1ML7J1

WKN: A1ML7J

Common code: 094567408

Registered headquarters of Vonovia SE: Bochum, Germany, Bochum Local Court, HRB 16879

Business address of Vonovia SE: Universitaetsstrasse 133, 44803 Bochum, Germany

This press release has been issued by Vonovia SE and/or its subsidiaries solely for information purposes. This press release may contain statements, assumptions, opinions and predictions about the anticipated future development of Vonovia (“forward-looking statements”) that reproduce various assumptions regarding, e.g., results derived from Vonovia’s current business or from publicly available sources that have not been subject to an independent audit or in-depth evaluation by Vonovia and that may turn out to be incorrect at a later stage. All forward-looking statements express current expectations based on the current business plan and various other assumptions and therefore come with risks and uncertainties that are not insignificant. All forward-looking statements should not therefore be taken as a guarantee for future performance or results and, furthermore, do not necessarily constitute exact indicators that the forecast results will be achieved. All forward-looking statements relate solely to the day on which this press release was issued to its recipients. It is the responsibility of the recipients of this press release to conduct a more detailed analysis of the validity of forward-looking statements and the underlying assumptions. Vonovia accepts no responsibility for any direct or indirect damages or losses or subsequent damages or losses, as well as penalties that the recipients may incur by using the press release, its contents and, in particular, all forward-looking statements or in any other way, as far as this is legally permissible. Vonovia does not provide any guarantees or assurances (either explicitly or implicitly) in respect of the information contained in this press release. Vonovia is not obliged to update or correct the information, forward-looking statements or conclusions drawn in this press release or to include subsequent events or circumstances or to report inaccuracies that become known after the date of this press release.

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Additional features:

File: Vonovia shows stable development and is raising its annual targets for 2021_PI_210806

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06.08.2021 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.

The issuer is solely responsible for the content of this announcement.

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Language:	English
Company:	Vonovia SE
	Universitätsstraße 133
	44803 Bochum
	Germany
Phone:	+49 234 314 1609
Fax:	+49 234 314 2995
E-mail:	investorrelations@vonovia.de
Internet:	www.vonovia.de
ISIN:	DE000A1ML7J1
WKN:	A1ML7J
Indices:	DAX
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID:	1224541

End of News	DGAP News Service