Vonovia SE

Investor Presentation • Nov 6, 2024

VOROUIA

9M 2024

Earnings Call Presentation \& Organic Growth Initiatives

Agenda

9M 2024 Update pages 3-8
2.
Organic Growth Initiatives pages 10-19
3.

Appendix pages 21-51

Key Highlights

Stabilization Phase Completed - Return to Growth

Leverage-

driven disposal program completed

Leverage

under control

Operations

strong

• 2024 disposal target of $€ 3$ bn achieved.
• Going forward, disposal pricing decisions will no longer be driven by cash generation but focus on profitability.
• Commitment to debt KPI target ranges to safeguard strong investment grade rating remains but right direction of travel.
• Pro-active balance sheet stabilization therefore no longer required.
• Operating business well on track. First signs of increasing traction in non-rental segments ${ }^{1}$.
• Structural growth drivers provide longrunning, recurring, and growing income.

Next phase of growth strategy

Initial 2025
Guidance

2028
Objective

• Strong addressable market opportunity.
• Vonovia platform well-positioned.
• Multiple organic growth initiatives to develop non-rental activities.
• $\sim 4 \%$ organic rent growth.
• Increasing momentum in non-rental segments ${ }^{1}$.
• €2.7bn - €2.8bn Adj. EBITDA Total.
• €1.75bn - €1.85bn Adj. EBT.
• Adj. EBITDA Total of €3.2bn - €3.5bn (from $<€ 2.6$ bn in 2023).
• Estimated contribution from non-rental segments ${ }^{1}$ of $€ 0.5 \mathrm{bn}-€ 0.7 \mathrm{bn}$, equaling 20-25\% of 2028E Adj. EBITDA Total (vs. $\sim 7 \%$ in 2023).

Prioritized disposals going forward

Disposal pricing decisions will no longer be driven by cash generation but focus on profitability

327
Additional disposals in the pipeline for remainder of 2024 and beyond.

After $\sim € 1.5$ bn disposal proceeds reported with H1 results, Vonovia has made further progress and achieved its 2024 disposal target of $€ 3$ bn.
Disposals since H1 reporting include:
Nursing: Ca. $€ 300 \mathrm{~m}$ proceeds from Deutsche Wohnen's disposal of 27 nursing homes incl. the underlying operating business.
HIH deal 1: Disposal of 11 development projects for ca. $€ 500 \mathrm{~m}$ to a fund co-owned by HIH and Vonovia.

• Total fund volume of ca. $€ 650 \mathrm{~m}$. Vonovia equity participation of just inside $€ 200 \mathrm{~m}$ ( $49 \%$ stake). Remaining $51 \%$ owned by HIH Invest.
• Vonovia serves as property manager to the fund, HIH Invest as fund and asset manager.
• Fund structure is an attractive sales channel and enables Vonovia to deploy its operating platform to assets away from own balance sheet and generate attractive returns outside the core rental business.
• Vonovia will also participate in the fund's profit distribution as well as in the value creation when the assets are sold after the targeted holding period of 10 years.
  HIH deal 2: Disposal of 10 development projects for ca. $€ 500 \mathrm{~m}$ to a second fund co-owned by HIH and Vonovia.
• Similar structure (incl. 49\% VNA equity stake), responsibilities, and business plan as in HIH deal 1.

Earnings \& Cash Flow Summary

	9M 2024	9M 2023 ${ }^{1}$	Delta (\%)
Adj. EBITDA Rental	1,801.9	1,818.6	$-0.9 \%$
Adj. EBITDA Value-add	145.5	73.3	$+99.0 \%$
Adj. EBITDA Recurring Sales	38.9	51.6	$-24.6 \%$
Adj. EBITDA Development	0.8	14.9	$-100 \%$
Adj. EBITDA Total	1,986.2	1.958 .4	$+1.4 \%$
Adj. Net Financial Result	$-528.7$	$-461.8$	$+14.5 \%$
Depreciation	$-84.3$	$-83.0$	$+1.3 \%$
Intragroup profit (-)/loss (+)	$-10.6$	6.6	-
Adj. Earnings before Taxes (EBT)	1,363.9	1,420.2	$-4.0 \%$
Adj. Earnings before Taxes (EBT) p.s. ${ }^{2}$	1.62	1.77	$-5.7 \%$
Adj. EBT attributable to minorities	121.4	94.8	$+28.1 \%$
Adj. EBT after minorities	1,242.5	1,325.4	$-6.3 \%$
Adj. EBT after minorities p.s. ${ }^{2}$	1.52	1.65	$-7.9 \%$
Depreciation	84.3	83.0	$+1.3 \%$
Capitalized maintenance	$-179.0$	$-184.0$	$-2.7 \%$
Cash taxes	$-175.4$	$-87.4$	$>100 \%$
Book value of sold assets (Recurring Sales only)	242.0	146.3	$+65.4 \%$
Development to Sell	Net working capital	161.3	$-364.1$
Dividends paid to JV minorities \& other	$-117.0$	$-18.4$	$>100 \%$
Operating Free Cash Flow (OFCF) ("Vonovia AFFO")	1,379.2	995.7	$+38.6 \%$
Operating Free Cash Flow (OFCF) ("Vonovia AFFO") p.s. ${ }^{2}$	1.69	1.22	$+38.5 \%$

• Underlying operations remain highly favorable with growing rents and virtually full occupancy \& high collection rates; 9M 2024 impacted by 6k fewer units (y-o-y) and more normalized level of maintenance and operating expenses (following very stringent cash focus in prior year).
• Value-add segment includes €62m from lease agreement on coax network. ${ }^{3}$
• Recurring Sales volumes up 58\% but still on lower margin.
• Development to Sell with a gross margin of 14\%.
• Adj. net financial result largely driven by full-year effect of 2023 refinancings.
• Higher cash taxes related to disposals.
• Cash dividends in OFCF mainly driven by Apollo JVs.
  [^0]
  [^0]: ${ }^{1}$ Previous year's figures (9M 2023) adjusted to current tax figures and segment definition. ${ }^{2}$ Based on the weighted average number of shares carrying dividend rights. ${ }^{3}$ Finance taxes under 1995 US requires full earnings to be accounted for at beginning of 10-year contract period.

Rental Segment

Rental KPIs Remain Highly Robust

• Accelerating market rent growth but fluctuation remains low.
• Vacancy rate only a function of turnaround time in case of fluctuation.
• Virtually full rent collection.

Vacancy rate (eop, \%)

Sep 30, 2023

Sep 30, 2024

Fluctuation rate (\%) ${ }^{1,2}$

9M 2023
9M 2024

Collection rate for rental income and all ancillary expenses (\%) ${ }^{1}$

14.4
15.4

Sep 30, 2023

9M 2024

Fluctuation rate (\%) ${ }^{1,2}$

9M 2023
9M 2024

Capitalized maintenance
$\square$ Expensed maintenance

[^0]
[^0]: 1 German portfolio. ${ }^{2}$ Fluctuation at 1011 was ca. $11 \%{ }^{3}$ OVM $=$ local comparative rent.

Financial KPIs

Still Slightly above Internal Target Ranges But Well under Control

• Pro forma cash position of $€ 4.6 \mathrm{bn}^{1}$ covers all near-term maturities.
• Debt KPIs well under control to safeguard good investment grade rating; direction of travel is the right one for all three debt KPIs.
• Prioritization of cash generation over earnings is over.

KPI / criteria	Sep. 30, 2024	Jun. 30, 2024	Dec. 31, 2023	Target range
LTV (pro forma)	46.0\%	47.3\%	46.7\%	40-45\%
ND / EBITDA multiple (pro forma)	15.1 x	15.8 x	15.3 x	14-15x
ICR	3.7 x	3.6 x	4.0 x	$\geq 3.5 x$
Fixed/hedged debt ratio	98\%	99\%	98\%
Average cost of debt	1.9\%	1.8\%	1.7\%
Weighted average maturity (years)	6.4	6.7	6.9
Average fair market value of debt	92\%	89\%	89\%

Maturity profile for the next 24 months ( $€ \mathrm{~m}$ )

Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026
Bank financing Unsecured bonds

Rating Agency	Rating	Outlook	Last update
S\&P	BBB+	Stable	Aug. 23, 2024
Moody's	Baa1	Stable	Feb. 1, 2024
Fitch	BBB+	Stable	Mar. 28, 2024
Scope	A-	Negative	Jul. 2, 2024

[^0]
[^0]: ${ }^{1}$ Consisting of $€ 2.5 b n$ cash on hand (Sep. 30, 2024 and including term deposits) plus $€ 2.1 b n$ disposals signed but not yet closed. In addition, Venera has $€ 3 b n$ RCP/CP (undrawn).

Guidance 2024 Confirmed

		Guidance 2024 (6M 2024 reporting)	Final Guidance 2024 (9M 2024 reporting)
Rental Revenue	€3,253m	$\sim € 3.3 b n$	$\sim € 3.3 b n$
Rent growth	Organic rent growth: 3.8\% Additional irrevocable rent increase claim: $1.8 \%{ }^{1}$	Organic rent growth: Upper end of $3.8-4.1 \%$ range Additional irrevocable rent increase claim: $\sim 2 \%{ }^{1}$	Organic rent growth: Upper end of $3.8-4.1 \%$ range Additional irrevocable rent increase claim: $\sim 2 \%{ }^{1}$
Adj. EBITDA Total	€2,584m	Upper end of $€ 2.55 b n-€ 2.65 b n$ range	Upper end of $€ 2.55 b n-€ 2.65 b n$ range
Adj. EBT	€1,866m of which $€ 136$ m attributable to minorities	Upper end of $€ 1.7 b n-€ 1.8 b n$ range of which $\sim 10 \%$ attributable to minorities	Upper end of $€ 1.7 b n-€ 1.8 b n$ range of which $\sim 10 \%$ attributable to minorities
Dividend	€0.90 p.s.	$\sim € 1 b n$ dividend capacity	$\sim € 1 b n$ dividend capacity
Sustainability Performance Index (SPI)	$111 \%$	$\sim 100 \%$	$\sim 100 \%$
Cash generation through disposals	$\sim € 4 b n$	at least $€ 3 b n$	at least $€ 3 b n$

[^0]
[^0]: ${ }^{1}$ Additional irrevocable rent increase claim on the apartment level in relation to the local comparable rent (GVM) that is guaranteed by law but can only be implemented once the three-year period for maximum rent growth ("Kappungsgrenze") has lapsed. Additional rent increase claims cannot be added v. n. 1 , as the \% figure always refers to the total cumulative additional irrevocable rent increase claim at the time.

Agenda

1.

2.

Organic Growth Initiatives pages 10-19

Appendix pages 21-51

Strong Structural Market Drivers for Vonovia...

Structural Market Drivers

Supply/Demand Imbalance

Cumulative housing shortage up to 830 k by 2027E, government target of $€ 100$ bn investment volume p.a.

Climate Change

$39 \%$ reduction in GHG emissions required to reach government goal by 2030.
Required investment volume of $€ 120$ bn p.a.

Demographic Change

$>31 \%$ of German population 65 or older by 2050.

Fragmented Market
Market opportunity from inefficiencies and lack of consolidation.

Vonovia's Right to Win

Focus on Urban Growth Areas
Pro-active geographic focus on urban areas with greatest supply/demand imbalance.

Market-leading in Modernization Energy efficiency of portfolio significantly ahead of German average.

Unparalleled Scale

Industry-leading number of apartments ready for senior citizens, through vacant unit refurbishments.

Unparalleled Moat

Most efficient platform and proven best-inclass ability to roll up market.

Vonovia's Strategic Evolution

Increased share of wallet

Expansion into $3^{\text {rd }}$ party market

Overview of Organic Growth Drivers

2028E Objective: €3.2bn-€3.5bn Adj. EBITDA Total (€2.7bn-2.8bn rental ${ }^{1}$ and €0.5bn-€0.7bn non-rental)

Evolution of Value-Add

Evolution of Recurring Sales

Will Include Contribution from Stranded Assets

[^0]
[^0]: ${ }^{1}$ Stranded average assets refer to existing residential assets with less energy efficiency. In light of EU Buildings Directive requiring $16 \%$ reduction in average primary energy consumptions of all buildings in Germany by 2030.

Evolution of Development

Growth Reflects Capital Investment Target of 3-4\% of Total Asset Value

Evolving the Capital Allocation Focus - Key Priorities for Vonovia

Strategic Priorities

Capital Allocation

Shareholder Value Creation

Financial Strength

Ratings, Covenants \& Liquidity Preserving a robust capital structure

Investment Program

Dividend

M\&A

Financial Strength

Ratings, Covenants \& Liquidity Preserving a robust capital structure

• General preference for allocating capital to highest-yielding measure.
• Investment to address the megatrends driving the sector.
• Drives organic earnings and value growth.
• $\sim € 1 b n$ dividend capacity - to fund progressive dividend policy.
• $50 \%$ Adj. EBT plus surplus liquidity paid out as dividend.
• Potential for opportunistic share buybacks.
• Disciplined and opportunity-driven approach.
• Must deliver returns in excess of cost of capital on a risk-adjusted basis.
• Impeccable track record of execution.

Value Accretion

Cash Generation

2025 Guidance \& 2028 Objective

		Actuals 2023	Final Guidance 2024	Initial Guidance 2025	Objective 2028
Rental Revenue		€3.253bn	$\sim € 3.3 b n$	€3.3bn - €3.4bn	€3.7bn - €3.8bn
Organic rent growth ${ }^{1}$		$3.8 \%$	Upper end of $3.8-4.1 \%$ range	$\sim 4 \%$	$\sim 4 \%$
Adj. EBITDA Total		€2.584bn	Upper end of €2.55bn - €2.65bn range	€2.7bn - €2.8bn	€3.2bn - €3.5bn
Rental	Contribution to Adj. EBITDA Total	$\begin{gathered} 93 \% \ 4 \% \end{gathered}$	$\begin{gathered} 91 \% \text { (9M } 2024 \text { actuals) } \ 7 \% \text { (9M } 2024 \text { actuals) } \end{gathered}$	n/a	$\begin{gathered} 75-80 \% \ 9-12 \% \end{gathered}$
Value-add		2\%
Recurring Sales		$1 \%$		$n / a$	$5-8 \%$
Development		$1 \%$	0\% (9M 2024 actuals)	n/a	$4-5 \%$
Adj. EBT		€1.866bn (of which 136 m attributable to minorities)	Upper end of €1.7bn - €1.8bn range (of which $\sim 10 \%$ attributable to minorities)	€1.75bn - €1.85bn (of which $\sim 10 \%$ attributable to minorities)	n/a
Investments ${ }^{2}$		€762m	$\sim € 0.9 b n$	$\sim € 1.2 b n$	$\sim € 2 b n$
Sustainability Performance Index (SPI)		$111 \%$	$\sim 100 \%$	$\sim 100 \%$	$\sim 100 \%$

Unchanged dividend policy: 50\% Adj. EBT plus surplus liquidity paid out as dividend

[^0]
[^0]: ${ }^{1}$ In light of the long-term expectation of $\sim 4 \%$ organic rent growth per year, General will no longer show the additional irreversible rent increase separately. ${ }^{2}$ Real, Development to be

• Successfully navigated through a challenging period and delivered on promise to put cash generation and financial strength first.
• Pro-active balance sheet repair now over.
• Refocus on earnings growth.
• Organic growth initiatives reflect not only attractive market dynamics but also confidence in our platform.
• Traditional non-rental businesses to return to pre-crisis levels - but on a 50\% larger scale.
• Increased investments within the confines of leverage targets - exploiting our scale and innovative strength to take investment program to a new level.
• Deploy skillset to assets outside own balance sheet - develop "2nd Vonovia."

Agenda

1
9M 2024 Update pages 3-8
Organic Growth Initiatives pages 10-19
3.
Appendix pages 21-51

Appendix

22-29 Organic Growth Initiatives
30-39 Additional Material 9M 2024
40-46 Portfolio data
47-48 ESG
49 Domination Agreement between Vonovia and Deutsche Wohnen
50 IR Contacts \& Financial Calendar
51 Disclaimer

• $19 \%$ cost advantage for internal use from VAT exemption.
• Purchasing advantages through high volume.
• Internalizing margin of service provider.
• Reduction of complexity in service provider management.
• Important USP in 'one-stop shop' for third-party market.

Expectations \& Assumptions

• EBITDA growth determined by
• Yielding portfolio investment and maintenance volume
• VTS margin (ambition level of up to 10\% EBITDA margin)
• Productivity and efficiency gains
• VTS Transformation Program underway to optimize operations, reduce complexity and leverage synergies.

Return to Performance: Recurring Sales

Condo Portfolio

• $\sim 47 \mathrm{k}$ condo units with individual title safeguard long-term pipeline.
• Flexibility to add to the pipeline if needed/helpful.
  

Expectations \& Assumptions

• EBITDA growth determined by
• Return towards pre-crisis volumes and possibly more (ambition level is to sell 3-3.5k units p.a.)
• Increase margin from current levels closer to historic levels (ambition level is $30-35 \%$ ).
• Monetize historic pricing spread between retail \& wholesale.
• Increased product appeal because of scarcity value and regulation.
• Benefit from growing supply/demand imbalance in the rental market that drives more households into ownership.
• Spread to fair values traditionally higher for disposals to owneroccupiers.

Expanded Business Areas: Energy Operation

Tenant electricity and heat pumps as key products for Energy Operations Expected IRR of $>10 \%^{1}$

Estimated
long-term
distribution of portfolio heating sources

Expectations \& Assumptions

• EBITDA growth determined by
• Energy generation capacity (MWp)
• Margin on investment
  (current investment amount of $\sim € 1.5 \mathrm{k}$ per kWp)
• Growing customer base for tenant electricity
• Large-scale roll-out of heat pumps
• Intelligent EMS² for optimal energy sourcing and distribution

Estimated potential from energy generation capacity (MWp)

[^0]
[^0]: ${ }^{1}$ The initial yield is expected to be largely similar to the IRR given the limited growth momentum once a product is up and running. ${ }^{2}$ EMS = Energy Management System. ${ }^{3}$ Whtorts in Savory.

Expanded Business Areas: Occupancy Rights

Can Corporate Housing Help With Germany's Skilled Labor Shortage?
"The tight rental market is becoming an increasing burden on the economy. Companies are facing growing challenges in their attempts to attract talent because of the lack of available apartments."

Handelsblatt 03/2024

A New Job But No Place to Live

"It is easy to find a job these days - labor is in high demand. Finding an apartment, however, can quickly turn into a nightmare."

Zeit Online 03/2024

Corporate Housing is Making a Return

"In order to attract employees, more and more employers offer accommodation alongside the job."

FAZ 06/2024

Square Meters for Skilled Labor

"Corporate Housing has a growing appeal in an increasingly tight rental market. It could be one lever to pull in Germany's attempt to attract skilled labor."

Markt \& Mittelstand 10/2024

Expectations \& Assumptions

• EBITDA growth determined by
• Suitable apartments and their churn rate
• Value of occupancy right
• Occupancy rights to Vonovia apartments are sold to third parties (similar to "corporate housing").
• $3^{\text {rd }}$ party purchases the right to let certain units, once they become vacant.
• Vonovia continues to manage the apartment and the rent level irrespective of the $3^{\text {rd }}$ party's right to nominate the tenant.
• Price point example: Occupancy rights have been sold for $10 \mathrm{k} € /$ unit in the past to a public institution.
• Specific price levels will have to be determined based on specific market and demand situation.

Expanded Business Areas: $3^{\text {rd }}$ Party Market

Vonovia has built the best-in-class platform

• Scalable
• Integrated systems
• Standardized Processes
• Lean organization with well-defined roles
  

Expectations \& Assumptions

• EBITDA growth determined by
• Number of units under management
• Management fee
• Institutional owners, family offices, funds and other larger landlords own a total of ca. 6 million rental apartments.
• The vast majority of them share the pain point of finding a provider for transparent, high quality property management and craftsmen services to maintain their assets and to execute their decarbonization plan.
• Vonovia has a strong track record of efficiently managing large portfolios across Germany.
• Vonovia's cost per unit of just over $€ 300$ vs. synergies achieved in M\&A transactions (between $\sim € 500$ and $\sim € 1,000$ per unit) suggest substantial property management fee potential.
• Specific price levels will be subject to B2B negotiations.

Rental Segment

• Increased revenue driven by rental growth on a smaller portfolio.
• Maintenance and operating expenses higher $y$-o-y as a result of more stringent cash focus in 2023 and inflationary effects.

Rental Segment (Cm)
Rental revenue

Maintenance expenses

Operating expenses

Adj. EBITDA Rental ${ }^{1}$

9M 2024	9M 2023¹	Delta
2,481.8	2,429.3	$+2.2 \%$
-344.8	$-311.1$	$+10.8 \%$
-335.1	-299.6	$+11.8 \%$
1,801.9	1,818.6	$-0.9 \%$

Rental revenue by geography

Scale and efficiency gains in Germany ${ }^{2}$

Avg. number of units ( 000 ) Cost per unit $\rightarrow$ Adj. EBITDA Operations margin
${ }^{1}$ Previous year's figures for 9M 2023 adjusted to current key figures and segment definition. ${ }^{2}$ Adj. EBITDA Operations margin (Adj. EBITDA Rental + Adj. EBITDA Value-add - intragroup profits) / Rental revenue. Margin 2019 and beyond includes positive impact from JFKS 16. Cost per unit is defined as (Rental revenue - EBITDA Operations + Maintenance) / average no. of units. 2022 and onwards incl. Deutsche Wohnen.

Rent Growth

Organic Rent Growth Expected at $\sim 4 \%$ Going Forward for Longer Term

Regulation update

• Mietpreisbremse extended, as initially agreed in coalition agreement.
• Association of Retail Landlords (Haus \& Grund) announced intention to challenge this in the Federal Constitutional Court.
• According to the real estate's leading association ZIA, other regulatory measures that had been initially agreed by the coalition (e.g. reduction of Kappungsgrenze, extension of Mietspiegel look-back period) are now off the table, i.e. no further regulatory risk.
  

SM 2024 Update

Illustrative rent growth dynamics

Value-add Segment

• Internal revenues up, largely driven by craftsmen organization.
• Includes $€ 62 \mathrm{~m}$ from lease agreement on coax network. ${ }^{1}$
• Expansion of solar energy expected to be a key driver of external revenue growth.

Value-add Segment ( $\mathbf{€ m})$

Revenue Value-add	1,009.7	904.7	$+11.6 \%$
of which external	149.1	94.9	$+57.1 \%$
of which internal	860.6	809.8	$+6.3 \%$
Operating expenses Value-add	-863.8	-831.4	$+3.9 \%$
Adj. EBITDA Value-add	$\mathbf{1 4 5 . 9}$	$\mathbf{7 3 . 3}$	$\mathbf{+ 9 9 . 0 \%}$

Extensive testing and measured rollout of value-add initiatives to minimize risk

[^0]
[^0]: ${ }^{1}$ Financial lease under HWA 16 requires full earnings to be accounted for at beginning of 10-year contract period. ${ }^{2}$ Previous year's figures 19M 2022L adjusted to current key figures and segment definition.

Recurring Sales Segment

• Volumes largely back to pre-crisis level but with lower margin.
• High demand in the context of housing shortage and interest rate stability.
• Prioritization of volume and capital release over profitability in 9M 2024.

Historical Recurring Sales volumes and FV step-up ${ }^{3}$

[^0]
[^0]: ${ }^{1}$ Revenue minus selling costs minus taxes. ${ }^{2}$ Free cash in relation to revenue. ${ }^{3} 2018$ onwards also including Recurring Sales in Austria. ${ }^{4}$ Previous year's figures (9M 2023) adjusted to current tax figures and segment definition.

Development Segment

• Gross margin of close to $14 \%$ in a challenging market.
• YTD focus has been on liquidity generation over price optimization.
• 2024 investments volume of $\sim € 700 \mathrm{~m}$ to finish ongoing development to sell projects.
• Operating expenses include $€ 12.8 \mathrm{~m}$ FV adjustments of Development to sell assets (9M 2023: €0.0m) ${ }^{3}$

Development Segment (Cm)

Revenue from disposal of to-sell properties	190.6	267.9	$-28.9 \%$
Cost of Development to sell	$-136.6$	$-233.4$	$-41.5 \%$
Carrying amount of sold Development to Sell assets ${ }^{2}$	$-27.8$	0.0	-
Gross profit Development to sell	26.2	34.5	$-24.1 \%$
Gross margin Development	$13.8 \%$	$12.9 \%$	$+0.8 p p$
Rental revenue Development	4.8	3.5	$+37.1 \%$
Operating expenses Development	$-31.0$	$-23.1$	$+34.2 \%$
Adj. EBITDA Development	0.0	14.9	$-100 \%$

[^0]
[^0]: ${ }^{1}$ In prior years, the Adjusted EBITDA Development included the fair value step-up for properties completed in the reporting period that were transferred to Vonovia's own portfolio. At the end of the fourth quarter of 2023, the reporting of earnings contributions from Development to Hold was changed and is now excluded from the Development Segment. All earnings contributions from Development to Hold are recognized in the valuation result and therefore outside of the Adjusted EBITDA. This change ensures alignment with the IPRS standard on the fair value measurement of investment properties (14540). The previous year's figures were adjusted accordingly. ${ }^{2}$ Completed Development to Sell assets that have seen a valuation gain in the context of the fair value measurement of the portfolio. In prior years, this effect would have been shown within Cost of Development to Sell. ${ }^{3}$ In accordance with IAN 3 accounting.

EPRA NTA

EPRA NTA (Cm) (unless indicated otherwise)	Sep. 30, $2024$	Dec. 31, $2023$	Delta
Total equity attributable to Vonovia shareholders	24,445.4	25,682.6	$-4.8 \%$
Deferred tax in relation to FV gains of investment properties	13,688.1	13,895.3	$-1.5 \%$
FV of financial instruments	36.7	$-13.4$	-
Goodwill as per IFRS balance sheet	$-1,391.7$	$-1,391.7$	-
Intangibles as per IFRS balance sheet	$-32.2$	$-32.0$	$+0.6 \%$
EPRA NTA	36,746.3	38,140.9	$-3.7 \%$
NOSH (million)	822.9	814.6	$+1.0 \%$
EPRA NTA (C/share)	44.66	46.82	$-4.6 \%$

Debt Structure

Well-balanced and Long-term Maturity Profile with Diverse Funding Mix

• Diverse funding mix with no more than $12 \%$ of debt maturing annually.
• Combination of debt KPIs, fixed/hedged debt ratio and maturity profile remains key in overall funding strategy.
• Well-balanced maturity profile and the heterogeneous funding mix safeguard sufficient flexibility for future refinancings.
  

Bond Covenants

Bond covenants	Required level	Current level (Sep. 30, 2024)
LTV (Total financial debt / total assets)	$<60 \%$	43.1 bn	$\rightarrow 47.3 \%$
		91.0 bn
Secured LTV (Secured debt / total assets)	$<45 \%$	12.9 bn	$\rightarrow 14.2 \%$
		91.0 bn
ICR (LTM Adj. EBITDA / LTM net cash interest)	$>1.8 \times$	2,561m	$\rightarrow 3.7 \times$
		692 m
Unencumbered assets (Unencumbered assets / unsecured debt)	$>125 \%$	47.1 bn	$\rightarrow 156 \%$
		30.2 bn

EBT, OFCF, and Dividend Expectations

EBT, OFCF, and dividend funding excluding any disposal proceeds outside Recurring Sales \& Development to Sell segments.

Yield Dispersion between Reported and Implied Numbers

	Based on P\&L and balance sheet (9M 2024)	Based on share price (Sep 30, 2024)
Gross rental yield	$4.2 \%$ Rental income ${ }^{1} /$ FV	4.9\% Rental income ${ }^{1}$ / implied EV ${ }^{2}$
Net rental yield	$3.4 \%$ Gross yield * $80 \%$ margin	$3.9 \%$ Gross yield * $80 \%$ margin
Adj. EBITDA yield	$3.4 \%$ Adj. EBITDA Total ${ }^{1}$ FV	$4.0 \%$ Adj. EBITDA Total ${ }^{1}$ / implied EV ${ }^{2}$
Adj. EBT Yield	$4.4 \%$ Adj. EBT ${ }^{1}$ / EPRA NTA	$6.0 \%$ Adj. EBT ${ }^{1}$ / market cap
Dividend Yield	$2.7 \%$ FY2024 dividend estimate / EPRA NTA	$3.7 \%$ FY2024 dividend estimate / share price
TSR	$10.9 \%$ (Dividend + organic value growth) ${ }^{3}$ / NTA	$14.9 \%$ (Dividend + organic value growth) ${ }^{3}$ / market cap
FV (€/sqm)	2,226 Fair value / sqm	1,904 Implied EV $^{1}$ / sqm

[^0]
[^0]: ${ }^{1}$ Based on 2024 guidance, EBT after minorities. ${ }^{2}$ FV = enterprise value (calculated as net debt plus market cap). ${ }^{3}$ Calculated as $=€ 180$ dividend capacity plus $=€ 380$ organic value growth (from rental growth; if market yields are stable).

Robust Long-term Upward Trajectory for Vonovia's Rent Levels Increasing Real Market Levels As Supply/Demand Imbalance Trumps Regulation

• Average reversionary potential for Vonovia's current in-place rent of up to $38 \%$ vs. Vonovia reletting rent and $96 \%$ vs. real market reletting rents.
• For Vonovia's largest market, Berlin, average reversionary potential of up to $51 \%$ vs. Vonovia reletting rent and $171 \%$ vs. real market reletting rents.
• Wide disparity of gross initial yields based on in-place values.
• Structural supply/demand imbalance keeps upward pressure on real market rents, and Vonovia's rents are expected to follow on a robust long-term upward trajectory at an annual rate of ca. $4 \%$.

Germany (current rent level C/sqm)

[^0]
[^0]: - Source: Value Markets/atentarek (formerly America oystems), Q2 2024. Asking rents excluding furnished apartments and new constructions, Market data reflects the weighted average for Vonovia's German portfolio.

Robust Long-term Upward Trajectory for Vonovia's Rent Levels Increasing Real Market Levels As Supply/Demand Imbalance Trumps Regulation

Vonovia					Real market ${ }^{4}$		Delta between real market and Vonovia in-place rent
Regional Market	\% of total assets ${ }^{1}$	In-place rent $^{2}$	Reletting rent range ${ }^{3}$		Asking rent range ${ }^{3}$
Berlin	$30 \%$	7.77	8.72	11.74	15.06	21.07
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	$8 \%$	9.63	10.68	12.85	13.58	16.54
Southern Ruhr Area (Dortmund, Essen, Bochum)	$9 \%$	7.24	7.56	9.70	8.69	10.37
Rhineland (Cologne, Düsseldorf, Bonn)	$7 \%$	8.34	8.72	11.10	11.49	13.86
Dresden	$9 \%$	6.95	7.10	8.51	8.92	11.17
Hamburg	$4 \%$	8.33	8.87	11.65	12.74	15.55
Hanover	$5 \%$	7.61	7.95	10.23	9.97	12.00
Kiel	$5 \%$	7.60	8.08	10.69	10.56	12.82
Munich	$2 \%$	9.74	12.14	14.63	18.10	21.66
Stuttgart	$3 \%$	9.04	9.76	11.73	13.17	15.76
Northern Ruhr Area (Duisburg, Gelsenkirchen)	$5 \%$	6.63	7.08	8.64	7.53	8.78
Leipzig	$3 \%$	6.83	7.39	8.77	8.82	10.99
Bremen	$2 \%$	6.92	7.76	8.73	10.49	12.67
Westphalia (Münster, Osnabrück)	$2 \%$	7.35	8.31	9.53	9.71	11.66
Freiburg	$1 \%$	8.73	9.26	11.95	13.96	17.25				Lower end
Other Strategic Locations	$6 \%$	7.69	8.18	10.12	10.16	12.07				Upper end
Non-Strategic Locations	$1 \%$	7.50	8.16	10.71	10.59	12.34
Total Germany	100\%	7.81	8.46	10.77	11.96	15.30

[^0]
[^0]: ${ }^{1}$ Residential Germany (based on no. of units). ${ }^{2}$ Vonovia average in-place rent as of Q3 2024. ${ }^{3}$ Lower end of range: reletting rent without invest; upper end of range: reletting rent with invest. ${ }^{4}$ Source: Value Marktdatenbank (formerly empirica-systeme), Q3 2024. Market data reflects the weighted average for Vonovia's German portfolio. Asking rents excluding furnished apartments and new constructions. ${ }^{5}$ Lower end: median (proxy for reletting without invest); upper end: $80 \%$ percentile (proxy for reletting with invest).

Investment Program

Average Net Initial Yield of 6-7\%

Population Growth In Germany In Urban Areas

Vonovia Has Actively Managed Its Geographic Exposure to Urban Areas

The Future of housing is in urban areas...

...and that is where Vonovia has concentrated its portfolio

• Current demographic forecasts estimate an overall population growth of as much as $\mathbf{6 \%}$ by $2050^{1}$ including the required 400 k labor immigrants p.a. to balance the negative impact from Germany's adverse age demographics².
• However, the demographic development is very different between urban and rural areas.
• Following the IPO in 2013, Vonovia pro-actively managed its geographic exposure, and today's portfolio of $540 \mathrm{k}^{3}$ apartments is located in urban growth areas as a result of
• nine large acquisitions and the seamless integration of $>450 \mathrm{k}^{3}$ apartments;
• $>100 \mathrm{k}$ units sold to focus the portfolio on urban growth regions.

Germany's rental market ${ }^{4}$ and Vonovia's exposure

2021
2023

[^0]
[^0]: ${ }^{1}$ German Federal Statistics Office, Stomario 3, assuming moderate development for birth \& life expectancy and high migration balance. ${ }^{2}$ Federal Labor Agency. ${ }^{3}$ Of which 60k outside Germany, ${ }^{4}$ www.ouhnwetterkarte.de by had and bulebergase.

Regional Markets
Balanced Exposure to Relevant Growth Regions

Fair value ${ }^{1}$				In-place rent
Regional Markets (Sep. 30, 2024)	(Kbn)	(€/aym)	Residential units	Vacancy (\%)	Total (p.a., Kbn)	Residential (p.a., Kbn) ${ }^{2}$	Residential (€/aym/ month) ${ }^{3}$	Organic rent growth (y-x-y, \%)	Multiple (in-place rent)	Purchase power index (market data) ${ }^{4}$	Market rent increase forecast (YAL)
Berlin	23,515.3	2,669	143,007	0.8	829	791	7.77	3.5	28.4	86.0	2.3
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	6,491.8	2,758	36,364	2.4	271	259	9.63	4.0	24.0	102.2	2.2
Southern Ruhr Area (Dortmund, Essen, Bochum)	5,102.0	1,894	42,928	2.5	231	224	7.24	3.0	22.1	89.2	1.8
Rhineland (Cologne, Düsseldorf, Bonn)	5,017.1	2,349	31,409	1.9	216	203	8.34	2.6	23.3	100.5	2.0
Dresden	4,915.2	1,843	43,588	2.2	220	205	6.95	2.8	22.3	86.5	2.0
Hamburg	3,205.7	2,478	20,089	1.5	130	124	8.33	4.0	24.7	96.8	2.1
Hanover	2,773.3	1,940	22,058	2.4	130	124	7.61	3.1	21.4	90.1	2.0
Kiel	2,750.6	1,856	25,077	1.7	134	129	7.60	3.8	20.6	75.9	2.0
Munich	2,695.2	3,873	10,380	1.2	82	77	9.74	3.3	33.0	119.2	2.3
Stuttgart	2,238.7	2,628	13,140	1.9	92	88	9.04	2.2	24.4	102.0	2.1
Northern Ruhr Area (Duisburg, Gelsenkirchen)	2,022.9	1,339	24,270	2.8	120	116	6.63	3.6	16.9	80.5	1.5
Leipzig	1,910.4	1,901	14,370	2.9	80	75	6.83	5.7	23.8	79.5	2.0
Bremen	1,405.5	1,932	11,667	2.3	60	58	6.92	4.4	23.5	83.2	2.0
Westphalia (Münster, Osnabrück)	1,099.2	1,774	9,408	2.5	54	53	7.35	4.3	20.4	89.8	1.9
Freiburg	725.2	2,644	3,849	1.0	29	28	8.73	3.2	24.9	86.5	2.0
Other Strategic Locations	3,347.4	1,889	27,087	3.3	162	152	7.69	3.7	20.7		2.0
Total Strategic Locations	69,215.6	2,283	478,691	1.8	2,838	2,706	7.81	3.4	24.4		2.1
Non-Strategic Locations	446.8	1,747	2,371	5.8	27	13	7.50	2.5	16.7		1.9
Total Germany	69,082.4	2,278	481,082	1.8	2,864	2,719	7.61	3.4	24.5		2.1
Vonovia Sweden	6,311.4	2,059	39,640	4.5	369	342	10.59	6.3	17.1		2.1
Vonovia Austria	2,703.5	1,594	20,917	4.6	126	100	5.69	5.0	21.4		1.7
Total	78,027.3	2,226	541,619	2.1	3,359	3,162	7.94	3.8	23.4		2.1

[^0]
[^0]: ${ }^{1}$ Fair value of the developed land excluding €A (Bn., of which €0.5bn for undeveloped land and inheritable building rights granted), €0.3bn for assets under construction, €2.3bn for development, €0.5bn for nursing portfolio (Discontinued Operations) and €0.4bn for other.
${ }^{2}$ Source: GIN (2024). Data refers to the specific cities indicated in the table, weighted by the number of households where applicable. ${ }^{3}$ Based on the country-specific definition. In-place rents in Austria and Sweden are not fully comparable to Germany, as Sweden includes ancillary costs and Austria includes maintenance and property improvement contributions from benefits. The table above shows the rental level unadjusted to the German definition.

Portfolio Clustering

Megatrends

Three Dominant Megatrends in Residential Real Estate

Supply-/ Demand Imbalance

Climate Change

Demographic Change

€100bn investment volume every year to complete

400k apartments per year. ${ }^{1}$

Up to $€ 120$ bn investment volume every year to decarbonize Germany's housing stock. ${ }^{2}$

Shortage of 2 million apartments

suitable for elderly people. ${ }^{3}$

• A decaying construction industry and an ever-growing supply/demand gap are not a sustainable situation. Required investment volumes are much too high to be delivered by government or through subsidies.
• Any meaningful investment volume will require an investment and regulatory environment that is sufficiently attractive for private funding.

Commitment to Sustainability

Science-based Decarbonization Roadmap with Measurable Interim Targets

• Accelerated decarbonization with near $\mathrm{CO}_{2}$ neutrality by 2045.
• Following CRREM MFH 1.5 degree pathway.
• Including Scope 1, 2 and 3.3.
  

Energy Efficiency Classes

Substantial Progress since IPO Puts Vonovia Ahead of the Market

Domination Agreement between VNA and DW

Reduction of Complexity, Governance Clean-up

• DW fully integrated operationally, $€ 130$ synergies realized.
• Next logical step now: reduction of complexity in governance structure and the day-to-day interaction between both companies.
• Today's situation "works" but (i) $12 \%$ minorities without dividend payout, (ii) legal vetting of every DW decision in light of minority rights is complex, inefficient, and not sustainable over longer term and requires clean-up and simplification.
• Domination agreement ("DPLTA") is considered best option. Gives DW minorities two choices: (i) exchange their Deutsche Wohnen shares into Vonovia shares at a certain ratio; or (ii) remain a shareholder of Deutsche Wohnen and receive a fixed annual compensation payment for the duration of the DPLTA. The exchange ratio and the fixed annual compensation still have to be agreed between Vonovia and Deutsche Wohnen and will be made in accordance with legal requirements.
• As a next step in preparing for a domination agreement, a holding company was set up to own ca. 20\% of Deutsche Wohnen's share capital. Vonovia holds 49\%, Apollo ${ }^{1} 51 \%$. Slightly more than €1bn investment by Apollo in exchange of guarantee dividend (inside $€ 70 \mathrm{~m}$ p.a.) Apollo dividend to be funded by (i) fixed annual compensation payment that all DW minority shareholders receive (unless they tender under the DPLTA) and (ii) "top-up" to compensate for holding company's lock-up agreement of DW shares.
• Processes to determine exchange ratio and fixed annual compensation payment well underway.
• EGMs of both Vonovia and Deutsche Wohnen to vote on the conclusion of the DPLTA expected to take place in January 2025.

IR Contact \& Financial Calendar

Contact

Rene Hoffmann (Head of IR)
Primary contact for Sell side, Buy side
+492343141629
rene.hoffmann@vonovia.de

Stefan Heinz
(Primary contact for Sell side, Buy side)
+492343142384
stefan.heinz@vonovia.de

Oliver Larmann
(Primary contact for private investors, AGM, financial regulator)
+492343141609
oliver.larmann@vonovia.de

Simone Kaßner

(Primary contact for private investors, ESG)
+492343141140
simone.kassner@vonovia.de
General inquiries
investorrelations@vonovia.de

Financial Calendar

2024

Nov 7
Nov 11
Nov 12
Nov 13
Nov 13
Nov 14
Nov 14
Nov 20
Nov 20
Nov 25 - 27
Nov 27
Nov 28
Dec 4
Dec 5
Dec 11-12
2025
Jan 9
Jan 10
Jan 14-15
Jan 21
Feb 26
Mar 19
May 7
May 28

2024

Nov 7
Nov 11
Nov 12
Nov 13
Nov 13
Nov 14
Nov 14
Nov 20
Nov 20
Nov 25 - 27
Nov 27
Nov 28
Dec 4
Dec 5
Dec 11-12
2025
Jan 9
Jan 10
Jan 14-15
Jan 21
Feb 26
Mar 19
May 7
May 28

Financials

Deutsche Bank Roadshow, Frankfurt am Main
Kempen Roadshow, Amsterdam
Goldman Sachs Roadshow, London
UniCredit \& Kepler Cheuvreux Pan-European Real Estate Conference, London
SEB Real Estate Konferenz, Stockholm (without management)
Goldman Sachs Roadshow, London
CoBa German Corporate Day, London (without management)
Berenberg Property Seminar, Paris
Kempen Generalist Conference, London
Eigenkapitalforum, Frankfurt
Société Générale Flagship Conference, Paris
Warburg Roadshow, Warsaw (without management)
UBS Global Real Estate CEO/CFO Conference, London
Berenberg European Conference, Pennyhill London
Jefferies Real Estate Conference, Miami (without management)
Barclays European RE Equity \& Debt Credit Conference, London
ODDO BHF Forum, Lyon (without management)
CoBa/ODDO BHF German Investment Seminar, NYC
UniCredit \& Kepler Cheuvreux German Corporate Conference, Frankfurt
ING Real Estate Conference, London
Full Year results 2024
Interim results 3M 2025
Annual General Meeting

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.
Per share numbers for 2013-2014 are TERP adjusted (TERP factor: 1.051). Subscription rights offering in 2015 due to Südewo acquisition.
Per share numbers for 2013-2020 are TERP adjusted (TERP factor: 1.067). Subscription rights offering in 2021 due to Deutsche Wohnen acquisition.