Vonovia SE — Call Transcript 2017

May 24, 2017

Q1 2017 Earnings Call May 24, 2017 Rolf Buch, CEO Dr. A. Stefan Kirsten, CFO

Q1 2017 Highlights

Built-in organic growth momentum will continue

• Accelerated organic rent growth of 3.4% y-o-y.
• Adj. EBITDA Operations up 8.7% y-o-y.
• FFO 1 per share up 17.5% y-o-y.

Execution of 2017 investment program well underway

• Majority of projects already kicked off; target investment volume of ~€730m in FY2017 confirmed.
• Pipeline of space creation projects for ~2,000 new units to be initiated in 2017.

conwert included in the results for the first time

• conwert is fully consolidated in the Q1 numbers.
• FFO and NAV accretion already visible in Q1.

Compelling guidance for 2017 including conwert

• Organic rent growth of 3.8% 4.0%.
• FFO 1 between €900m €920m (~€1.88 per share¹).

¹ Based on eop NOSH and current assumptions for additional shares from GAGFAH cross border merger and scrip dividend acceptance rate.

17.5% FFO growth on Stable Portfolio Size

• While the average portfolio size was similar in Q1 2017 vs. the prior-year period, the Adj. EBITDA Rental grew by 6.4% and the Adj. EBITDA Extension more than doubled for a combined Adj. EBITDA Operations growth of 8.7%.
• Further supported by 10.7% lower interest expenses, the FFO 1 per share was up 17.5%.

		Q1 2017	Q1 2016	Delta	Outlook
Average number of residential sqm	`000	22,276	22,203	+0.3%
Average number of residential units	#	356,411	355,954	+0.1%
Organic rent growth	%	3.4%	2.9%	+ 50 bps
In-place rent (eop)	€/month/sqm	6.06	5.84	+3.8%
Vacancy rate (eop)	%	2.7%	2.8%	- 10 bps
Rental income	€m	417.2	392.0	+6.4%	+€25.2m
Maintenance expenses	€m	-63.1	-58.6	+7.7%
Operating expenses	€m	-68.5	-64.4	+6.4%
Adj. EBITDA Rental	€m	285.6	269.0	+6.2%	+€16.6m
Adj. EBITDA Extension	€m	19.8	7.6	+160.5%
Adj. EBITDA Operations	€m	300.1	276.1	+8.7%	+€24.0m
FFO interest expense	€m	-76.8	-86.0	-10.7%
Current income taxes FFO 1	€m	-5.1	-3.8	+34.2%
FFO 1	€m	218.2	186.3	+17.1%	+€31.9m
FFO 1 per share (eop NOSH)	€	0.47	0.40	+17.5%
FFO 1 per share (avg. NOSH)	€	0.47	0.40	+17.5%

Accelerating Rent Growth Momentum

• Organic rent growth of 3.4% y-o-y with a first-time contribution from space creation.
• Positive momentum for rent growth leads to increased guidance of 3.8% 4.0% for organic rent growth in 2017.

In-place rent (€/month/sqm, eop)	Q1 2017	Q1 2016	Delta
In-place rent	6.06	5.84	3.8%
Rent growth drivers (last 12M)	Q1 2017	Q1 2016	Delta
Sitting tenants (incl. subsidized rents)	1.1%	1.2%	-10 bps
New lettings	0.5%	0.7%	-20 bps
Subtotal market-driven rent growth	1.6%	1.9%	-30 bps
Modernization	1.7%	1.0%	+70 bps
Subtotal l-f-l rent growth	3.3%	2.9%	+40 bps
Space creation	0.1%	0.0%	+10 bps
Subtotal organic rent growth	3.4%	2.9%	+50 bps
Portfolio management (+ acquisitions ./. sales)	0.4%	2.7%	-230 bps
Total rent growth	3.8%	5.6%	-180 bps

Investment Program well on Track

• Well underway to execute 2017 investment program at an average yield of ~7%.
• Majority of projects already started.
• Investment program includes Optimize Apartments, Upgrade Buildings, New Initiatives and Space Creation.

Note: Numbers include projects kicked off in 2016.

Continued EBITDA Expansion

• Rental income growth of 6.4% comes with similar increase in maintenance and operating expenses in the first quarter that fully includes conwert but no synergies yet, resulting in 6.2% Adj. EBITDA Rental growth.
• Adj. EBITDA Operations up by 8.7%, driven by 6.2% Adj. EBITDA Rental growth and doubling of Adj. EBITDA Extension contribution.
• EBITDA margin expansion continues with 90 bps improvement in Q1 2017.

€m (unless indicated otherwise)	Q1 2017	Q1 2016	Delta
Rental income	417.2	392.0	+6.4%
Maintenance expenses	-63.1	-58.6	+7.7%
Operating expenses	-68.5	-64.4	+6.4%
Adj. EBITDA Rental	285.6	269.0	+6.2%
Extension income	215.8	138.7	+55.6%
of which external	51.4	27.2	+89.0%
of which internal	164.4	111.5	+47.4%
Operating expenses	-196.0	-131.1	+49.5%
Adj. EBITDA Extension	19.8	7.6	>100%
Adj. EBITDA Other1	-5.3	-0.5	>100%
Adj. EBITDA Operations	300.1	276.1	+8.7%

¹ Mainly consolidation

Smooth Maturity Profile with Diverse Funding Mix

Weighted avg. financing cost p.a.¹ 1.9% 1.9% 3.7% 1.9% 3.4%² 1.4% 2.6% 1.3% 1.6% 1.5% 1.8% 1.7% 2.0% 2.0% 1.9% % of debt maturing 11.4% 8.5% 9.5% 15.1% 12.0% 10.8% 9.1% 7.5% 4.8% 4.2% 3.6% 0.1% 0.1% 0.1% 3.3% Debt maturity profile (€ m) 1.0% 2.0% 3.0% 4.0% 500 1,000 1,500 2,000 2,500 3,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 from 2031 Mortgages Structured Loans Bond Debt Hybrid Equity Hybrid conwert Bank Loans conwert Bond avg. financing cost Current unsecured reoffer yield (7-8 years)

¹ Average financing cost of debt maturing in the relevant year. ² Weighted avg. financing costs excl. Equity Hybrid. Including Equity Hybrid avg. interest rate of debt maturing in 2021 is 3.7%. ³ Net Debt as of March 31 over Q1 EBITDA Operations annualized.

LTV Well within Target Range Debt/EBITDA Multiple of 11.1x

• LTV temporarily up by 280 bps towards upper end of low to mid forties target range as a result of cash settlement of conwert acquisition.
• Portfolio valuation as of Q2 is expected to positively impact the LTV.
• Debt/EBITDA multiple of 11.1x¹

€m (unless indicated otherwise)	Mar. 31, 2017	Dec. 31, 2016	Delta
Non-derivative financial liabilities	14,435.3	13,371.0	+8.0%
Foreign exchange rate effects	-194.8	-209.9	-7.2%
Cash and cash equivalents	-1,007.9	-1,540.8	-34.6%
Net debt	13,232.6	11,620.3	+13.9%
Sales receivables	-144.4	-135.4	+6.6%
Additional loan amount for outstanding acquisitions	275.0	---
Adj. net debt	13,363.2	11,484.9	+16.4%
Fair value of real estate portfolio	29,607.6	27,115.6	+9.2%
Shares in other real estate companies	520.4	503.1	+3.4%
Adj. fair value of real estate portfolio	30,128.0	27,618.7	+9.1%
LTV	44.4%	41.6%	+ 280 bps

¹ Net Debt as of March 31 over Q1 EBITDA Operations annualized.

FFO 1 per Share +17.5%

Adj. EBITDA Operations growth combined with lower interest expenses translates into 17.5% FFO per share growth.

€m (unless indicated otherwise)	Q1 2017	Q1 2016	Delta
Adj. EBITDA Operations	300.1	276.1	8.7%
FFO interest expense	-76.8	-86.0	-10.7%
Current income taxes FFO 1	-5.1	-3.8	34.2%
FFO 1	218.2	186.3	17.1%
of which attributable to Vonovia's shareholders	206.2	173.3	19.0%
of which attributable to Vonovia's hybrid capital investors	10.0	10.0	0.0%
of which attributable to non-controlling interests	2.0	3.0	-33.3%
Capitalized maintenance	-13.6	-14.6	-6.8%
AFFO	204.6	171.7	19.2%
Current income taxes FFO 2	-11.0	-26.2	-58.0%
Adjusted EBITDA Sales	19.1	35.0	-45.4%
FFO 2	226.3	195.1	16.0%
FFO 1 € / share (eop NOSH)	0.47	0.40	17.5%
FFO 1 € / share (avg. NOSH)	0.47	0.40	17.5%

Pro-active Portfolio Management Clustering

• Strategic units of conwert portfolio have initially all been included in Operate and will be reclassified to UB and OA in the context of the annual portfolio clustering in the fall.
• 96% of total fair value in Strategic and Privatize Clusters.

Mar. 31, 2017	Residential units	In-place rent	Vacancy rate	Fair value	Fair value
		(€/sqm)	(%)	(€bn)	(%)
Operate	105,895	6.25	2.4	9.2	31%
Upgrade Buildings (UB)	125,067	5.95	2.6	9.5	32%
Optimize Apartments (OA)	89,266	6.18	1.9	7.8	27%
Subtotal Strategic Clusters	320,228	6.12	2.3	26.6	90%
Privatize	16,688	5.99	4.2	1.5	5%
Non-strategic	9,948	4.84	8.1	0.4	1%
Non-core	6,425	5.06	6.7	0.3	1%
Total Germany	353,289	6.06	2.7	28.8	98%
Vienna1	2,236	6.11	3.4	0.6	2%
Total Residential Portfolio	355,525	6.06	2.7	29.4	100%

¹ including 3% of units in Austria but outside of Vienna.

All Strategic Markets Show Upward Potential

	Fair Value		In-place rent
Regional Market	(€m)	(€/sqm)	Residential units	Living area ('000 sqm)	Vacancy (%)	Total (p.a., €m)	Residential (p.a., €m)	(€/sqm)	Change like-for-like (%)	Multiple (in-place rent)	Average annual rent growth forecast CBRE (5 yrs, %)	Average rent growth (%) from Optimize Apartments
Berlin	4,287	1,686	38,609	2,446	1.7	188	178	6.16	3.0	22.7	3.2	42.8
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	3,096	1,697	28,134	1,794	1.8	163	158	7.48	3.7	18.9	3.3	39.5
Rhineland (Cologne, Düsseldorf, Bonn)	2,979	1,407	30,713	2,059	2.7	167	159	6.60	4.3	17.9	2.9	30.1
Dresden	2,506	1,070	38,606	2,196	2.3	152	142	5.52	3.4	16.5	3.2	35.0
Southern Ruhr Area (Dortmund, Essen, Bochum)	2,494	898	44,488	2,716	2.9	179	173	5.47	3.7	13.9	2.0	28.8
Hamburg	1,739	1,601	16,608	1,053	1.9	87	82	6.61	3.5	20.0	3.1	37.4
Munich	1,650	2,495	9,771	643	0.8	62	58	7.55	3.1	26.8	4.6	52.0
Stuttgart	1,580	1,701	14,261	898	1.9	82	78	7.38	1.8	19.3	2.9	37.2
Northern Ruhr Area (Duisburg, Gelsenkirchen)	1,322	764	27,519	1,709	3.7	106	103	5.21	3.5	12.4	1.8	23.5
Hanover	1,042	1,170	13,846	876	2.6	63	61	5.94	2.6	16.5	2.9	33.3
Kiel	864	1,026	13,988	812	1.6	56	53	5.56	2.9	15.4	2.3	35.0
Bremen	789	1,059	11,923	723	3.2	47	44	5.30	2.8	16.9	3.1	33.7
Leipzig	647	1,042	9,185	588	3.6	41	38	5.60	1.1	15.8	2.5	20.2
Westphalia (Münster, Osnabrück)	594	937	9,650	625	2.5	41	40	5.42	3.2	14.6	2.6	30.2
Freiburg	494	1,763	4,060	277	1.5	23	22	6.80	3.7	21.5	3.8	40.1
Other Strategic Locations	1,930	1,239	23,994	1,522	2.6	114	110	6.17	4.1	16.9	3.1	33.5
Total Strategic Locations	28,014	1,298	335,355	20,939	2.4	1,572	1,498	6.11	3.4	17.8	2.9	34.0

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.

NAV

• Adj. NAV up 1.4% driven by Q1 results plus first-time consolidation of conwert.
• Valuation update with Q2 2017 numbers.

€m (unless indicated otherwise)	Mar. 31, 2017	Dec. 31, 2016	Delta
Equity attributable to Vonovia's shareholders	12,706.5	12,467.8	+1.9%
Deferred taxes on investment properties and assets held for sale	4,827.4	4,550.3	+6.1%
Fair value of derivative financial instruments1	29.0	44.4	-34.7%
Deferred taxes on derivative financial instruments	-14.3	-15.4	-7.1%
EPRA NAV	17,548.6	17,047.1	+2.9%
Goodwill	-2,931.8	-2,718.9	+7.8%
Adj. NAV	14,616.8	14,328.2	+2.0%
EPRA NAV €/share	37.43	36.58	+2.3%
Adj. NAV €/share	31.18	30.75	+1.4%

¹ Adjusted for effects from cross currency swaps.

Additional Value from Extension Business

• NAV does not account for Vonovia's Extension Segment.
• Cash flows generated in Extension Segment have the same stability as the rental business, as they are directly linked to the apartment or tenant.
• Applying the impairment test WACC¹ to the 2017E Adj. EBITDA Extension translates into an additional value of ~€5.2 per share (~17% on top of Adj. NAV)

¹ Pre-tax WACC of 4.1% as per Dec. 31, 2016.

Sales Continue to Provide Steady Cash Flow at Attractive Margins

• Overall sales volume lower than in Q1 2016, largely because the prior year included the portfolio sale to LEG, which also included privatization units. Adjusted for this effect the sales volume is broadly stable.
• Slightly improved privatization margin in Q1 2017 in spite of increased fair values.

	PRIVATIZATION		NON-CORE / NON STRATEGIC		TOTAL
€m (unless indicated otherwise)	Q1 2017	Q1 2016	Q1 2017	Q1 2016	Q1 2017	Q1 2016
No. of residential units sold	535	890	1,157	14,661	1,692	15,551
Income from disposal	72.0	73.8	420.2	616.7	492.2	690.5
Fair value of disposal	-54.9	-56.4	-410.9	-594.3	-465.8	-650.7
Adj. profit from disposal	17.1	17.4	9.3	22.4	26.4	39.8
Fair value step-up (%)	31.1%	30.9%	2.3%	3.8%

Selling costs	-7.3	-4.8
Adj. EBITDA Sales	19.1	35.0

Guidance Update incl. conwert

	2016 Actuals	2017 Guidance (March 2017, excl. conwert)	2017 Guidance (May 2017, incl. conwert)
Organic rent growth (eop)	3.3%	3.5%-3.7%	3.8%-4.0%
Vacancy (eop)	2.4%	<2.5%	<2.5%
Rental Income (€m)	1,538.1	1,530-1,550	1,660-1,680
FFO1 (€m)	760.8	830-850	900-920
FFO1 (€/share)	1.63	1.78-1.82	~1.881
Maintenance (€m)	~320.1	~340	~340
Modernization & Investments (€m)	472.3	700-730	~730
Privatization (#)	2,701	~2,300	~2,300
FV step-up (Privatization)	36.2%	~35%	~30%
Non-core (#)	23,930	opportunistic	opportunistic
FV step-up (Non-Core)	5.4%	>0%	>0%
Dividend/share	€1.12	~70% of FFO 1	~70% of FFO1

¹ Based on eop NOSH and current assumptions for additional shares from GAGFAH cross border merger and scrip dividend acceptance rate.

Attractive Dividend Policy

1 Rental income + EBITDA Extension and Other; excluding sales effects. ² Based on eop NOSH and current assumptions for additional shares from GAGFAH cross border merger and scrip dividend acceptance rate.

Capital Markets Day June 19 and 20 in Bochum

• We invite capital market participants from the buy-side investment and sell-side research communities for an extensive view into Vonovia's machine room and a better understanding on how we run our operating platform.
• Schedule:
• Monday, June 19: Welcome dinner in Bochum starting at 19:00.
• Tuesday, June 20: Management presentation and break-out sessions in the morning and site visits to a modular construction project and our state-of-the-art service center in the afternoon. CMD finishes by around 5:00 p.m.
• Please contact the Investor Relations team no later than May 26 to register for the event.

Built-in organic growth momentum will continue

High degree of visibility on investment program 2017 including space creation

conwert integration fully on track

Compelling guidance for 2017

Valuation update with Q2 reporting on August 2

IR Contact & Financial Calendar

Rene Hoffmann Head of Investor Relations Vonovia SE Philippstraße 3 44803 Bochum Germany

+49 234 314 1629 rene.hoffmann@vonovia.de www.vonovia.de

Contact Financial Calendar 2017 May 29 Management Roadshow, Frankfurt May 30 Management Roadshow, London Jun 1 Kepler Cheuvreux German Property Day (Paris) Jun 7 Kepler Cheuvreux European One Stop Shop Tour (Dublin) Jun 7 Goldman Sachs European Financials Conference (Madrid) Jun 8 Kempen European Property Seminar (Amsterdam) Jun16 Estimated dividend payment date (cash option) Jun 21 Estimated dividend payment date (share option) Jun 19-20 Vonovia Capital Markets Day (Bochum) June 22 dBAccess Berlin Conference (Berlin)

Aug 2 Interim results 6M 2017

Sep 13 BoAML Global Real Estate Conference (NYC)

Sep 18 Berenberg / GS German Corporate Conference (Munich) Sep 19 Baader Investment Conference (Munich) Sep 29 Societe Generale Pan-European RE Conference (London) Nov 8 Interim results 9M 2017 Nov 28 UBS Global Real Estate CEO/CFO Conference (London) Nov 29 Societe Generale The Premium Review Conference (Paris) Dec 5 Berenberg European Corporate Conference (Pennyhill) Dec 11 HSBC Global Real Estate Conference (Cape Town)

Vonovia Investor Relations Tablet App

Now available for iOS and Android

Appendix

Proven and Unchanged Strategy since IPO

VONOVIA

		Reputation & Customer Satisfaction
al n o diti Tra	Property Management 1	Systematic optimization of operating performance and core business productivity through leveraging scaling effects High degree of standardization and industrialization throughout the entire organization
	Financing 2	Ensure well-balanced financing mix and maturity Mergers & 5 profile with low financing costs, investment Acquisitions grade credit rating and adequate liquidity at all times Fast and unfettered access to equity and debt capital markets at all times Continuous review of on- and
	Portfolio Management 3	off-market opportunities to lever economies of scale and apply Portfolio optimization by way of tactical strategic pillars 1-4 to a growing acquisitions and non-core/non-strategic portfolio disposals to ensure exposure to strong local markets All acquisitions must meet the stringent acquisition criteria Pro-active development of the portfolio through investments to offer the right products in the right markets and on a long-term basis
e v ati v o n n I	4 Extension	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 Insourcing of services to ensure maximum process management and cost control

Improvements Across All KPIs

			Q1 2017	Q1 2016	Delta
	Average number of residential sqm	`000	22,276	22.203	+0.3%
	In-place rent (eop)	€/month/sqm	6.06	5.84	+3.8%
	Organic rent growth	%	3.4%	2.9%	+ 50 bps
	Vacancy rate (eop)	%	2.7%	2.8%	- 10 bps
+8.6% per avg. unit	Rental income	€m	417.2	392.0	+6.4%
(€842 vs. €776)	Cost per average unit	€	151	161	-6.2%
	Adj. EBITDA Operations	€m	300.1	276.1	+8.7%
	Rental	€m	285.6	269.0	+6.2%
	Extension	€m	19.8	7.6	>100%
	Other (i.e. consolidation)	€m	-5.3	-0.5	>100%
	FFO 1	€m	218.2	186.3	+17.1%
+16.8% per unit	FFO 1 per share (eop NOSH)	€	0.47	0.40	+17.5%
(€612 vs. €524)	FFO 1 per share (avg. NOSH)	€	0.47	0.40	+17.5%
	AFFO	€m	204.6	171.7	+19.2%
	Adj. EBITDA Sales	€m	19.1	35.0	-45.4%
	Adj. EBITDA (Total)	€m	319.2	311.1	+2.6%
	FFO 2	€m	226.3	195.1	+16.0%
+0.9% per sqm (€1,276 vs.			Mar. 31, 2017	Dec. 31, 2016	Delta
€1,264)	Fair value of real estate portfolio	€m	29,607.6	27,115.6	+9.2%
	EPRA NAV	€/share	37.43	36.58	+2.3%
	Adj. NAV	€/share	31.18	30.75	+1.4%
	LTV	%	44.4%	41.6%	+280 bps

Maintenance

Reconciliation IFRS Profit to FFO

€m (unless indicated otherwise)	Q1 2017	Q1 2016	Delta
PROFIT FOR THE PERIOD	130.7	79.2	+65.0%
Financial result	83.0	131.3	-36.8%
Income taxes	83.0	42.8	+93.9%
Depreciation and amortization	7.1	4.4	+61.4%
= EBITDA IFRS	303.8	257.7	+17.9%
Non-recurring items	13.9	26.7	-47.9%
Total period adjustments from assets held for sale	1.5	26.7	-94.4%
= ADJUSTED EBITDA	319.2	311.1	+2.6%
Adjusted EBITDA Sales	-19.1	-35.0	-45.4%
= ADJUSTED EBITDA OPERATIONS	300.1	276.1	+8.7%
Interest expense FFO	-76.8	-86.0	-10.7%
Current income taxes FFO 1	-5.1	-3.8	+34.2%
= FFO 1	218.2	186.3	+17.1%
Capitalized maintenance	-13.6	-14.6	-6.8%
= AFFO	204.6	171.7	+19.2%
Current income taxes FFO2	-11.0	-26.2	-58.0%
FFO 2 (FFO 1 incl. Adjusted EBITDA Sales/current income taxes Sales)	226.3	195.1	+16.0%
FFO 1 per share in € (eop NOSH)	0.47	0.40	+17.5%
AFFO per share in € (eop NOSH)	0.44	0.37	+17.7%
Number of shares (million) eop	468.8	466.0	+0.6%

€m (unless indicated otherwise)	Q1 2017	Q1 2016	Delta
0 Income from property letting	586.7	556.6	5.4%
Other income from property management	10.0	9.3	7.5%
Income from property management	596.7	565.9	5.4%
Income from disposal of properties	492.2	690.5	-28.7%
Carrying amount of properties sold	-476.7	-683.0	-30.2%
Revaluation of assets held for sale	9.4	5.6	67.9%
Profit on disposal of properties	24.9	13.1	90.1%
Net income from fair value adjustments of investment properties	n/a	n/a
Capitalized internal expenses	85.4	49.4	72.9%
Cost of materials	-274.3	-244.1	12.4%
Personnel expenses	-102.0	-92.9	9.8%
Depreciation and amortization	-7.1	-4.4	61.4%
Other operating income	26.5	23.6	12.3%
Other operating expenses	-59.7	-57.3	4.2%
Financial income	7.3	9.5	-23.2%
Financial expenses	-84.0	-140.8	-40.3%
Earnings before tax	213.7	122.0	75.2%
Income taxes	-83.0	-42.8	93.9%
Profit for the period	130.7	79.2	65.0%
Attributable to:
Vonovia's shareholders	116.6	56.5	106.4%
Vonovia's hybrid capital investors	7.4	7.4	0.0%
Non-controlling interests	6.7	15.3	-56.2%
Earnings per share (basic and diluted) in €	0.25	0.12	108.3%

IFRS Balance Sheet (1/2 – Total Assets)

€m (unless indicated otherwise)	Mar 31, 2017	Dec. 31, 2016	Delta
Assets
Intangible assets	2,958.8	2,743.1	7.9%
Property, plant and equipment	129.2	115.7	11.7%
Investment properties	29,463.0	26,980.3	9.2%
Financial assets	618.0	585.9	5.5%
Other assets	14.9	15.2	-2.0%
Deferred tax assets	24.9	19.6	27.0%
Total non-current assets	33,208.8	30,459.8	9.0%
Inventories	6.7	5.0	34.0%
Trade receivables	183.3	164.4	11.5%
Financial assets	166.5	153.2	8.7%
Other assets	171.7	102.7	67.2%
Income tax receivables	39.1	34.6	13.0%
Cash and cash equivalents	1,007.9	1,540.8	-34.6%
Assets held for sale	64.1	61.6	4.1%
Total current assets	1,639.3	2,062.3	-20.5%
Total assets	34,848.1	32,522.1	7.2%

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

€m (unless indicated otherwise)	Mar 31, 2017	Dec. 31, 2016	Delta
Equity and liabilities
Subscribed capital	468.8	466.0	0.6%
Capital reserves	5,421.9	5,334.9	1.6%
Retained earnings	6,784.8	6,665.4	1.8%
Other reserves	31.0	1.5	>100%
Total equity attributable to Vonovia's shareholders	12,706.5	12,467.8	1.9%
Equity attributable to hybrid capital investors	1,011.5	1,001.6	1.0%
Total equity attributable to Vonovia's shareholders and hybrid capital investors	13,718.0	13,469.4	1.8%
Non-controlling interests	552.6	419.0	31.9%
Total equity	14,270.6	13,888.4	2.8%
Provisions	612.1	607.9	0.7%
Trade payables	0.6	1.3	-53.8%
Non derivative financial liabilities	12,003.9	11,643.4	3.1%
Derivatives	23.3	19.1	22.0%
Liabilities from finance leases	94.6	94.7	-0.1%
Liabilities to non-controlling interests	10.0	9.9	1.0%
Other liabilities	81.2	83.3	-2.5%
Deferred tax liabilities	4,002.3	3,769.5	6.2%
Total non-current liabilities	16,828.0	16,229.1	3.7%
Provisions	378.9	370.8	2.2%
Trade payables	137.0	138.8	-1.3%
Non derivative financial liabilities	2,431.4	1,727.6	40.7%
Derivatives	69.3	57.5	20.5%
Liabilities from finance leases	11.4	4.5	153.3%
Liabilities to non-controlling interests	0.3	2.7	-88.9%
Other liabilities	721.2	102.7	602.2%
Total current liabilities	3,749.5	2,404.6	55.9%
Total liabilities	20,577.5	18,633.7	10.4%
Total equity and liabilities	34,848.1	32,522.1	7.2%

Substantial Reduction of Portfolio Locations

Vonovia location

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

Bonds / Rating

Corporate Investment grade rating

Rating agency	Rating	Outlook	Last Update
Standard & Poor's	BBB+	Stable	06. Sep 16

Bond ratings

Name	Tenor & Coupon	ISIN	Amount	Issue price	Coupon	Final Maturity Date	Rating
Bond 002 (EUR-Bond)	6 years 3.125%	DE000A1HNW52	€ 600m	99.935%	3.125%	25 July 2019	BBB+
Bond 003 (USD-Bond)	4 years 3.200%	US25155FAA49	USD 750m	100.000%	2.970%1	02 Oct 2017	BBB+
Bond 004 (USD-Bond)	10 years 5.000%	US25155FAB22	USD 250m	98.993%	4.580%1	02 Oct 2023	BBB+
Bond 005 (EMTN)	8 years 3.625%	DE000A1HRVD5	€ 500m	99.843%	3.625%	08 Oct 2021	BBB+
Bond 006 (Hybrid)	60 years 4.625%	XS1028959671	€ 700m	99.782%	4.625%	08. Apr 74	BBB
Bond 007 (EMTN)	8 years 2.125%	DE000A1ZLUN1	€ 500m	99.412%	2.125%	09 July 2022	BBB+
Bond 008 (Hybrid)	perpetual 4%	XS1117300837	€ 1,000m	100.000%	4.000%	perpetual	BBB
Bond 009A (EMTN)	5 years 0.875%	DE000A1ZY971	€ 500m	99.263%	0.875%	30 Mar 2020	BBB+
Bond 009B (EMTN)	10 years 1.500%	DE000A1ZY989	€ 500m	98.455%	1.500%	31 Mar 2025	BBB+
Bond 010A (EMTN)	2 years 0.950%+3M EURIBOR	DE000A18V120	€ 750m	100.000%	0.835% hedged	15 Dec 2017	BBB+
Bond 010B (EMTN)	5 years 1.625%	DE000A18V138	€ 1,250m	99.852%	1.625%	15 Dec 2020	BBB+
Bond 010C (EMTN)	8 years 2.250%	DE000A18V146	€ 1,000m	99.085%	2.250%	15 Dec 2023	BBB+
Bond 011A (EMTN)	6 years 0.875%	DE000A182VS4	€ 500m	99.530%	0.875%	10 June 2022	BBB+
Bond 011B (EMTN)	10 years 1.500%	DE000A182VT2	€ 500m	99.165%	1.500%	10 June 2026	BBB+
Bond 012 (EMTN)	2 years 0.380%+3M EURIBOR	DE000A185WC9	€ 500m	100.000%	0.140% hedged	13 Sep 2018	BBB+
Bond 013 (EMTN)	8 years 1.250%	DE000A189ZX0	€ 1,000m	99.037%	1.250%	06 Dec 2024	BBB+
Bond 14A (EMTN)	5 years 0.750%	DE000A19B8D4	€ 500m	99.863%	0.750%	25 Jan 2022	BBB+
Bond 14B (EMTN)	10 years 1.750%	DE000A19B8E2	€ 500m	99.266%	1.750%	25 Jan 2027	BBB+
conwert Bond	5 years 5.75%	AT0000A0VAL3	€ 65m	99.936%	5.750%	19 June 2017	not rated

¹ EUR-equivalent Coupon

Bond KPIs	Covenant	Level	Mar. 31, 2016
	LTV
	Total Debt / Total Assets	<60%	41%
	Secured LTV		11%
	Secured Debt / Total Assets	<45%
	ICR	>1.80x	3.81x
	Last 12M EBITDA / Last 12M Interest Expense
	Unencumbered Assets	>125%	219%
	Unencumbered Assets / Unsecured Debt

Rating KPIs	Covenant	Level (BBB+)
	Debt to Capital Total Debt / Total Equity + Total Debt	<60%
	ICR Last 12M EBITDA / Last 12M Interest Expense	>1.80x

Conservative Valuation

In-place valuations are still only half of replacement values, in spite of accelerating valuation growth in recent years.

Note: VNA 2010 – 2014 refers to Deutsche Annington Portfolio at the time; construction costs excluding land.

Acquisitions – Opportunistic but Disciplined

.

.

Historical Key Figures (1/2)

Financial Key Figures in € million	2016	2015	2014	2013
Rental income	1,538.1	1,414.6	789.3	728.0
Adjusted EBITDA Operations	1,094.0	957.6	503.4	442.4
Adjusted EBITDA Rental	1,046.2	924.4	482.6	433.0
Adjusted EBITDA Extension	57.0	37.6	23.6	10.5
Adjusted EBITDA Other	-9.2	-4.4	-2.8	-1.1
Income from disposal of properties	1,227.9	726.0	287.3	353.5
Adjusted EBITDA Sales	92,5	71.1	50.1	27.7
Adjusted EBITDA	1,186.5	1,028.7	553.5	470.1
EBITDA IFRS	1,083.7	838.4	500.3	431.0
FFO 1	760.8	608.0	286.6	223.5
thereof attributable to Vonovia shareholders	713.4	555.5	275.1	218.4
thereof attributable to Vonovia hybrid capital investors	40.0	33.0	-	-
thereof attributable to Non-controlling interests	7.4	19.5	11.5	5.1
FFO 2	823.8	662.1	336.7	251.2
AFFO	689.2	520.5	258.3	203.5
FFO 1 per share in €	1.63	1.30	1.00	0.95
Income from fair value adjustments of investment properties	3,236.1	1,323.5	371.1	553.7
EBT	3,859.8	1,734.5	589.1	689.6
Profit for the period	2,512.9	994.7	409.7	484.2
Cash flow from operating activities	828.9	689.8	453.2	259.6
Cash flow from investing activities	416.4	-3,239.8	-1,177.9	171.3
Cash flow from financing activities	-2,812.4	4,093.1	1,741.7	-353.2
Maintenance and modernization	792.4 320.1	686.3 330.7	345.5 173.8	228.4 157.6
thereof for maintenance expenses and capitalized maintenance thereof for modernization	472.3	355.6	171.7	70.8

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)

Key Balance Sheet Figures in € million	Dec. 31, 2016	Dec. 31, 2015	Dec 31, 2014	Dec 31, 2013
Fair value of the real estate portfolio	27,115.6	24,157.7	12,759.1	10,326.7
Adjusted NAV	14,328.2	11,273.5	6,472.0	5,123.4
Adjusted NAV per share in €	30.75	24.19	22.67	21.74
LTV (%)	41.6	46.9	22.67	48.1
Non-Financial Key Figures	2016	2015	2014	2013
Number of units managed	392,350	397,799	232,246	201,737
thereof own apartments	333,381	357,117	203,028	175,258
thereof apartments owned by others	58,969	40,682	29,218	26,479
Number of units bought	2,815	168,632	31,858	0
Number of units sold	26,631	15,174	4,081	6,720
thereof Privatize	2,701	2,979	2,238	2,576
thereof Non-Core	23,930	12,195	1,843	4,144
Vacancy rate (in %)	2.4	2.7	3.4	3.5
Monthly in-place rent in €/sqm	6.02	5.75	5.58	5.40
Monthly in-place rent in €/sqm like-for-like	6.01	5.82	-	-
Number of employees (as at Dec. 31)	7,437	6,368	3,850	2,935
EPRA Key Figures	2016	2015	2014	2013
EPRA NAV	17,047.1	13,988.2	6,578.0	5,123.4
EPRA NAV per share in €**	36.58	30.02	23.04	21.74
EPRA NNNAV	12,034.4	9,739.8	-	-
EPRA Earnings	448.5	329.2	-	-
EPRA Net Initial Yield in %	4.1	4.5	-	-
EPRA "topped-up" Net Initial Yield in %	4.1	4.5	-	-
EPRA Vacancy rate in %	2.2	2.5	3.0	3.1
EPRA Cost Ratio (incl. direct vacancy costs) in %	28.4	31.9	-	-
EPRA Cost Ratio (excl. direct vacancy costs) in %	27.0	30.2	-	-

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.

Vonovia at a Glance

Germany's largest residential landlord with national footprint in urban regional markets

• Residential real estate company with B-to-C characteristics.
• Industrialized approach leverages economies of scale in a highly homogeneous asset class.
• Strong internal growth profile via sustainable market rent growth, additional rent growth from portfolio investments and dynamic extension business.
• Market leadership with nationwide footprint offers additional growth opportunities.
• Robust business model delivers highly stable and growing cash flows.
• Predictable top and bottom line with downside protection and upside potential.
• 355k apartments
• Average apartment size of ~61 sqm
• Vacancy ~2.7% almost fully let
• 13.5 years average tenure
• ~ €1,670m stable rental income¹
• ~ €910m operating profit before sales (FFO 1)¹
• Dividend policy: approx. 70% of FFO 1

¹ Midpoint 2017 guidance.

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

Illustration of Germany at Night

Strong Overlap with Vonovia Portfolio

Illustration of Germany at Night

*Other shared services: Internal Audit, Communications, Central Procurement, Insurances, Investor Relations, Accounting

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.

Q1 2017 Earnings Call

Liquid Large-cap Stock

Q1 2017 Earnings Call

Innovation as Growth Driver

Continuous flow of innovative projects that are all immediately linked to the apartment or customer/rental contract.

German Residential – Safe Harbor and Low Risk

German residential market: important pillar of the German economy

• With a GDP contribution of more than €500bn the German residential real estate industry represents more than 18% of Germany's GDP.
• Germany and its resilient economy provide a comparatively safe harbor for foreign investments.
• Germany is the economic powerhouse and growth engine of Europe.
• Due to its regulatory structure, the German residential rental market is largely immune to macro-economic fluctuations and offers high cash flow visibility.
• Residential market provides superior returns especially in low interest rate environment.

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

New Supply falls short of demand

• After record construction volumes in the 1990s, new volumes have plummeted as Germany has reduced its building capacity.
• While volumes have been recovering from all-time lows in 2009 and 2010, the current levels are still short of demand.
• Large gap between building permits and actual new constructions during last seven years.
• Discrepancy between new demand and new supply is forecast to continue and add to supply/demand imbalance already evident in many urban areas.
• Substantial disconnect between in-place values and market replacement cost.

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

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 – Favorable Fundamentals

• 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.

Ownership structure (million units)

Listed sector represents ~4% of total rental market.

Fragmented ownership structure 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 towards smaller households.
• The household growth is driven by various demographic and social trends including divorce rates, employment mobility etc.

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

Asset yields outperformed interest rates by 2.2% on average since 1992 and 5.4% in June 2015.

¹ Yearly asset yields vs. rolling 200d average of 10y interest rates

Sources: 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.

¹ Based on eop NOSH and current assumptions for additional shares from GAGFAH cross border merger and scrip dividend acceptance rate.

Q1 2017 Earnings Call page 48

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.