Vonovia SE — Call Transcript 2019

Aug 2, 2019

H1 2019 Earnings Call August 2, 2019

Rolf Buch, CEO Helene von Roeder, CFO

Agenda
Highlights	Segment Results	NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix

Highlights	3
Segment Results	4
NAV & Valuation	14
Financing & LTV	18
European Activities	20
Guidance	21
Appendix	23

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Highlights H1 2019 Performance Y-o-y increase across all four segments Adj. EBITDA Total €872.8m (+22.2%) Group FFO €609.1m (+12.9%) and €1.12 per share (+7.7%; eop shares) NAV & Valuation Adj. NAV per share €48.51 (+8.0% since YE2018) H1 2019 valuation of ca. 2/3 of portfolio resulted in 7.9% total value growth of the revalued portfolio Capital Structure LTV 40.4% (-240bps since YE2018) Net debt/EBITDA multiple 11.2x Regulation The rent freeze draft legislation in Berlin is scheduled for later this year with the final law expected to go into effect in January 2020 in spite of fundamental constitutional concerns We expect the Federal Constitutional Court to rule the Berlin legislation as unconstitutional but a decision will take time We continue to see the spillover risk for our business outside of Berlin as extremely limited

We are continuing our solid performance and remain confident in our upward trajectory and ability to deliver sustainable growth for the remainder of the year and beyond.

• 22.2% Adj. EBITDA Total growth and 12.9% Group FFO growth on the back of a 3.8% larger portfolio and performance improvements.
• While the operating business with the rental and value-add segments remains the primary performance driver, recurring sales and development made an increasing contribution in H1 2019.

¹ Consolidation in H1 2019 (H1 2018) comprised intragroup profits of €23.9m (€16.1m), valuation result of development to hold of €17.7m (€2.7m), and IFRS 16 effects of €13.8m (€0.0m).

Adj. EBITDA Rental Up from Acquisitions and Organic Growth

EBITDA Operations margin Germany²

Rental Segment

¹ Prior-year adjusted to include transaction corporate costs.

² EBITDA Operations margin (Adj. EBITDA Rental + Adj. EBITDA Value-add – intragroup profits). 2019 margin includes positive impact from IFRS 16.

H1 2019 Earnings Call

• Organic rent growth of 4.0% in line with expectations and on track to achieve guidance of ca. ~4.4% for year end.
• Average in-place rent of €6.64 per sqm (+4.4% not like-for-like and including impacts from acquisitions and disposals).
• Vacancy rate of 2.9%, largely investment related.
• Maintenance expenses and capitalized maintenance stable on a per-square-meter basis.

Rental Segment

9-10% IRR target for investment program

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Portfolio Cluster Ca. 60% of German portfolio earmarked for investment strategy, safeguarding long-term sustainability of optimize apartment and upgrade building investment strategy. Non-core: 754 units sold in H1 2019 with a fair value step-up of 20.4%. Operate; 20% Invest; 60% Recurring Sales; 8% Non-core; 1% Austria; 6% Sweden; 5%

Rental Segment

		Fair value1		Residential	In-place rent
June 30, 2019	(€bn)	% of total	(€/sqm)	units	(€/sqm/month)
Operate	9.2	20%	1,784	75,046	6.92
Invest	27.5	60%	1,791	248,445	6.56
Strategic	36.8	80%	1,789	323,491	6.65
Recurring Sales	3.8	8%	1,920	28,686	6.79
Non-core	0.6	1%	1,231	5,263	6.11
Vonovia Germany	41.1	89%	1,789	357,440	6.65
Vonovia Austria	2.6	6%	1,394	22,661	4.59
Vonovia Sweden	2.3	5%	1,738	16,638	9.20
Vonovia Total	45.9	100%	1,759	396,739	6.64

Note: 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 tenants. The table above shows the rental level unadjusted to the German definition.

¹ Fair value of the developed land excluding €1,817.1m, of which €405.6m for undeveloped land and inheritable building rights granted, €414.0m for assets under construction, €495.5m for development, €272.1m IFRS 16 effect, and €230.5m for other.

Rental Segment

Regional Cluster

Highlights Segment Results			NAV & Valuation		Financing & LTV		European Activities		Guidance		Appendix
	Fair value1						In-place rent
Regional Market	(€m)	(€/sqm)	Residential units	Vacancy (%)	Total (p.a., €m)	Residential (p.a., €m)	Residential (€/sqm/ month)	Organic rent growth (LTM, %)	Multiple (in-place rent)	Purchase power index (market data)2	Market rent increase forecast Valuation (% p.a.)	Average rent growth (LTM, %) from Optimize Apartment
Berlin	7,171	2,594	42,042	1.6	224	212	6.73	4.1	32.1	80.4	1.8	49.6
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	4,191	2,346	27,530	1.6	175	169	8.17	4.5	24.0	105.0	1.8	38.5
Rhineland (Cologne, Düsseldorf, Bonn)	3,610	1,839	28,803	2.6	167	159	7.11	3.6	21.7	102.0	1.7	29.9
Southern Ruhr Area (Dortmund, Essen, Bochum)	3,579	1,326	43,382	3.5	191	185	6.04	5.1	18.8	88.5	1.5	31.8
Dresden	3,432	1,499	38,485	3.8	163	154	6.09	3.5	21.1	81.8	1.7	30.1
Hamburg	2,567	2,003	19,829	2.0	108	104	7.03	3.6	23.7	98.4	1.6	39.9
Munich	2,170	3,322	9,661	1.2	65	61	8.12	3.2	33.4	121.8	1.8	51.3
Kiel	2,051	1,473	23,373	2.3	104	99	6.25	4.3	19.8	74.8	1.7	38.2
Stuttgart	2,008	2,254	13,797	1.9	84	80	7.89	3.1	24.0	104.5	1.8	37.8
Hanover	1,773	1,694	16,310	3.3	82	79	6.59	4.7	21.7	90.1	1.7	36.9
Northern Ruhr Area (Duisburg, Gelsenkirchen)	1,580	974	26,009	3.6	109	106	5.70	3.9	14.5	81.7	1.2	25.1
Bremen	1,134	1,533	11,862	3.9	50	47	5.74	3.8	22.7	84.2	1.8	28.0
Leipzig	910	1,465	9,188	4.3	43	41	6.00	2.6	21.1	74.5	1.7	22.9
Westphalia (Münster, Osnabrück)	861	1,381	9,494	3.6	44	43	6.04	5.1	19.5	92.4	1.5	38.9
Freiburg	630	2,263	4,033	2.0	25	24	7.37	3.5	25.7	85.4	1.7	45.9
Other Strategic Locations	2,673	1,536	26,808	3.2	136	131	6.64	4.1	19.6	-	1.5	37.3
Total Strategic Locations Germany	40,342	1,802	350,606	2.8	1,769	1,694	6.66	4.0	22.8	-	1.7	35.6
Non-Strategic Locations	739	1,295	6,834	6.5	39	34	6.22	1.0	18.8	-	1.6	22.3
Germany total	41,080	1,789	357,440	2.9	1,808	1,727	6.65	4.0	22.7	100.0	1.7	35.5
Austria	2,563	1,394	22,661	4.8	106	89	4.59	1.8	24.1	-	1.2	-
Sweden	2,260	1,738	16,638	1.6	141	130	9.20	5.4	16.0	-	2.0	-
Total Vonovia	45,903	1,759	396,739	2.9	2,056	1,946	6.64	4.0	22.3	-	1.7	n/a

Note: 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 tenants. The table above shows the rental level unadjusted to the German definition.

¹ Fair value of the developed land excluding €1,817.1m, of which €405.6m for undeveloped land and inheritable building rights granted, €414.0m for assets under construction, €495.5m for development, €272.1m IFRS 16 effect, and €230.5m for other. ² Source: GfK (2018). Data refers to the specific cities indicated in the tables, weighted by the number of households where applicable.

Continued Dynamic Growth in Adj. EBITDA Value-add

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix

Value-add Segment

• Two types of value-add: (i) internal savings mainly via craftsmen organization and (ii) additional revenue through external income by offering services at market prices but on a lower cost basis due to efficiencies and size.
• Insourcing of services to ensure maximum process management and cost control.
• Expansion of core business to generate additional revenues by walking back the value chain and offering services that were previously provided by third parties (internalization of margin).
• Cash flows from Adj. EBITDA Value-add are not included in the portfolio valuation, and as a consequence largely ignored in NAV.
• Applying the impairment test discount rate¹ to the 2019E Adj. EBITDA Value-add suggests an additional value of ~€4.50 per share (~9% of top of H1 2019 Adj. NAV).

¹ Pre-tax WACC in impairment test of 5.1%. ² Distribution based on FY2019 expectations

• Stable sales volume but higher proceeds and fair value step-up y-o-y.
• Ca. three quarters of the gross proceeds are attributable to Germany and the remaining one quarter to Austria.
• FV step-up improvement driven by disposals in Austria.
• Avg. sales prices up 9% y-o-y.

Recurring Sales Segment (€m)	H1 2019	H1 2018	Delta
Units sold	1,234	1,200	+2.8%
Gross proceeds	174.9	156.3	+11.9%
Fair value	-124.5	-114.5	+8.7%
Adjusted earnings	50.4	41.8	+20.6%
Fair-value step-up	40.5%	36.5%	+400bps
Selling costs1	-8.0	-6.9	+15.9%
Adj. EBITDA Recurring Sales	42.4	34.9	+21.5%

¹ Prior-year adjusted to exclude transaction corporate costs.

• This segment includes the contribution of to-sell and to-hold constructions of new buildings. Not included is the construction of new apartments by adding floors on top of existing buildings because this happens in the context of and is accounted for under modernization.
• Ca. three quarters of development-to-hold volume in H1 2019 was in Germany and the rest in Austria.
• Slightly more than half of H1 2019 development-to-sell volume in Austria and the rest in Germany.

Development Segment (€m)	H1 2019	H1 2018	Delta
Income from disposal of "to sell" properties	124.9	73.5	+69.9%
Cost of Development to sell	-95.2	-60.6	+57.1%
Gross profit Development to sell	29.7	12.9	>100%
Fair value Development to hold	103.8	25.5	>100%
Cost of Development to hold	-86.1	-22.8	>100%
Gross profit Development to hold	17.7	2.7	>100%
Operating expenses Development segment	-16.7	-7.7	>100%
Adj. EBITDA Development	30.7	7.9	>100%

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix New rental apartments for our own portfolio ("to hold") Vonovia's Contribution towards Reducing the Housing Shortage 11% 9% Under construction Short-term pipeline Longer-term pipeline 433 units completed in H1 2019 (including new units through floor Pipeline with ca. 29,000 apartments additions that are built in the context of and are accounted for under modernization investments and that are not included in the Development Segment). Total pipeline of ca. 29,000 units, of which more than 80% in Germany and the remainder in Austria and Sweden. Development Segment

• Average apartment size between 60-70 sqm and broadly in line with overall portfolio average.

• The development to-hold investment volume is part of the overall investment program.

• 379 units completed in H1 2019.

• Total Pipeline volume of ca. €2.2bn (ca. 6,700 apartments), of which ca. 55% in Germany and ca. 45% in Austria.
• Investment capital for Development to sell is not part of investment program.
• Average apartment size between 70-80 sqm.
• Average investment volume of €4-4.5k per sqm.
• Expected gross margin between 20-25% on average.

2019 target: 1,500 – 2,000 completions

Pipeline with ca. 6,700 apartments

Valuation KPIs	Vonovia					H1 2019
June 30, 2019	Total	Germany	Sweden	Austria	Value growth drivers	€m	%
In-place rent multiple	22.3x	22.7x	16.0x1	24.1x1	Performance3	754	2.4%
Fair value				Investments 1,394 Yield compression		279	0.9%
€/sqm	1,759	1,789	1,738			1,480	4.7%
Fair value €bn	47.72	41.1	2.3	2.6	Total4	2,513	7.9%

¹ 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 tenants. The data above shows the rental level unadjusted to the German definition. ² Including €1.8bn for undeveloped land, inheritable building rights granted, assets under construction, development, IFRS16 and other. ³ Includes currency impact from value changes in Swedish Krona (-€56m) and IFRS16 (+€4m) impacts. ⁴ excl. €136m capitalized investments outside of revalued portfolio.

H1 2019 Earnings Call

Broad-based Value Growth across All German Regional Markets

H1 2019 Earnings Call

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Goodwill Impairment as a Result of Ongoing Value Growth

• The H1 2019 valuation led to a substantial increase of the investment properties.
• The valuation was classified as a triggering event and resulted in an impairment of €1.901m because the IAS 40 value growth increased the book value of the cash generating units (CGUs), thus decreasing the headroom to the earnings value of these cash generating units.
• The organizational restructuring of the rental segment from six to four regions as of July 1, 2019, brings with it an adjustment of the goodwill allocation, which in turn leads to an additional impairment of ca. €200m. This will be accounted for in the 9M financial accounts. Including this impact the remaining goodwill in the Rental Germany CGUs will be ca. €160m with the remaining goodwill of ca. €575m in the CGUs Sweden, Value-add and Development.

Evolution of adj. NAV and goodwill 12/2018 to 06/2019 (€bn)

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Adj. NAV Growth of +8.0% per share

• Adj. NAV increased by 13.1% to €26.3bn
• Adj. NAV per share increased by 8.0% on a 4.7% higher number of shares
• June 30, 2019, pro forma² EPRA NAV of ca. €49.9

€m (unless indicated otherwise)	Jun 30, 2019	Dec 31, 2018
Equity attributable to Vonovia's shareholders	18,264.2	17,880.2
Deferred taxes on investment properties	8,900.5	8,161.1
Fair value of derivative financial instruments1	103.2	87.2
Deferred taxes on derivative financial instruments	-27.3	-23.5
EPRA NAV	27,240.6	26,105.0
Goodwill	-935.6	-2,842.4
Adj. NAV	26,305.0	23,262.6	+13.1%

EPRA NAV €/share	50.23	50.39
Adj. NAV €/share	48.51	44.90	+8.0%
Number of shares (eop)	542.3	518.1

¹ Adjusted for effects from cross currency swaps. ² Adjusted for expected impairment due to organizational restructuring.

Note: Per-share numbers are based on outstanding shares as of the reporting dates Jun. 30, 2019 (542.3m) and Dec. 31, 2018 (518.1m).

	LTV at Lower End of Target Range
Highlights	Segment Results	NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix

• LTV as of June 30, 2019, was 40.4%; Net debt/EBITDA multiple¹ was 11.2x.
• Against the background of the stable cash flows and the strong long-term fundamentals in our portfolio locations we see continued upside potential for our property values and do not see material long-term downside risks for our portfolio.

€m (unless indicated otherwise)	Jun 30, 2019	Dec 31, 2018
Non-derivative financial liabilities	20,526.4	20,136.0
Foreign exchange rate effects	-34.9	-33.5
Cash and cash equivalents	-1,280.6	-547.7
Net debt	19,210.9	19,554.8
Sales receivables	15.0	-256.7
Adj. net debt	19,225.9	19,298.1
Fair value of real estate portfolio	47,449.0	44,239.9
Shares in other real estate companies	127.4	800.3
Adj. fair value of real estate portfolio	47,576.4	45,040.2
LTV	40.4%	42.8%
LTV (incl. perpetual hybrid)	42.5%	45.1%
Net debt/EBITDA multiple1	11.2x	11.4x

¹ Adj. net debt quarterly average over Total EBITDA (LTM); adj. for IFRS 16 effect.

Solid Capital Structure with Smooth Maturity Profile and Diverse Funding Mix

Highlights	Segment Results	NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix
			KPI / criteria		Jun. 30, 2019	Dec. 31, 2018
•	Unwavering commitment to BBB+		Corporate rating (S&P)		BBB+	BBB+
rating		LTV		40.4%	42.8%
		debt/EBITDA multiple1 Net		11.2x	11.4x
•	Maintain diverse funding mix to		ICR		4.7x	4.7x
			Fixed/hedged debt	ratio2	97%	96%
	preserve best possible optionality		Average cost of	debt2	1.7%	1.8%
LTV target range of 40%-45% •			Weighted average maturity (years)2	8.1	7.8
			Unencumbered assets		54%	56%

¹Adj. net debt quarterly average over Total EBITDA (LTM); adj. for IFRS 16 effect. ²Excl. equity hybrid.

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix European Activities

• Cautious step-by-step approach to minimize risk. Currently ca. 10% of the portfolio are located outside Germany. We will continue to monitor the German market and our defined European target markets in accordance with our acquisition criteria.
• Germany is expected to remain the dominant market also in the foreseeable future. No specific target rate or ratios in terms of German vs. non-German exposure but highly opportunistic approach as is the case for our German M&A activities.

	Austria (run a scalable business)	Sweden (main focus)	France (biggest long-term potential)	The Netherlands (open for opportunities)
% of total portfolio	~6%	~5%	Not meaningful	0%
Next steps	• Gradual asset rotation via recurring sales of mature assets and development of new assets in a similar magnitude • Run scalable operating business • Follow accretive acquisition opportunities on an opportunistic basis	• Pursue accretive acquisition opportunities on an opportunistic basis • Add Vonovia experience and skill set and use Victoria Park as a platform to further grow in the Swedish residential market • Demonstrate success and sustainability of Vonovia business model to show it also works outside of Germany	• Utilize 10% stake in SNCF portfolio to gain more profound understanding of the market • Safeguard pole position and first-mover advantage for potential opening of social housing to commercial ownership • Continue to actively engage with relevant French players to seek opportunities for taking the next steps	• Continue market research • Be prepared for accretive acquisition opportunities on an opportunistic basis

Highlights	2019 Guidance Confirmed Segment Results NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix
				2019 Guidance
	Organic rent growth (eop)			~4.4%
	Rental Income (€m)		2,020	– 2,070
	Recurring Sales (# of units)			~2,500
	FV step-up Recurring Sales			~30%
	Adj. EBITDA Total (€m)			1,700 – 1,750
	Group FFO (€m)			1,165 – 1,215
	Group FFO (€/share)			2.15 – 2.24
	Dividend			~70% of Group FFO
	Modernization & New Construction (€m)		1,300	- 1,600
	Underlying number of shares (million)			542.3

IR Contact & Financial Calendar

Highlights	Segment Results	NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix
	Contact			Financial Calendar 2019
Rene Hoffmann			Aug 2	Interim results 6M 2019
Head of Investor Relations			Aug 27 & 28	Roadshow in Kopenhagen	& Helsinki (Hauck & Aufhäuser)	1
Vonovia SE			Sep 10	Roadshow Madrid (KeplerCheuvreux)
Universitätsstraße 133 44803 Bochum			Sep 10 & 11	Conference in New York (BAML)
Germany			Sep 16	1 Roadshow Vienna (KeplerCheuvreux)
			Sep 20	Conference in London (Société	Generale)
			Sep 23	Conference in Munich (Goldman Sachs / Berenberg)
+49 234 314 1629			Sep 24	Conference in Munich (Baader) 1
rene.hoffmann@vonovia.de	investorrelations@vonovia.de		Oct 15 – 18	Roadshow Asia in Tokyo, Seoul, Hongkong, Singapore (BAML)
			Nov 5	Interim results 9M 2019
			Nov 6	Roadshow Paris
	App & Website		Nov 7	Roadshow Amsterdam
			Nov 8	Roadshow Frankfurt
			Nov 11 & 12	Roadshow London
			Nov 13	Conference in London (UBS)
			Nov 21	Roadshow in Zurich
			Dec 3	Conference in London (UBS)
			Dec 5	Conference Pennyhill (Berenberg)
			Dec 12 & 13	HSBC Real Estate Conference 2019 Cape Town

https://investors.vonovia.de

The most up-to-date financial calendar is always available online.

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Appendix

Strategy	24
Portfolio Evolution	26
Acquisition Track Record	27
Bond Data	29
Residential Market Data	31
Fair Value per sqm Evolution	35
VNA Shares	36
Management Compensation	39
Disclaimer	42

4+1 Strategy Has Evolved into 4+2 Strategy

H1 2019 Earnings Call

1 Historic range. 2 CAGR since 2013 fair value uplift through performance and investments (excluding yield compression).

Vonovia location

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

Acquisitions – Opportunistic but Disciplined

Acquisitions are shown for all categories in the year the acquisition process started.

Acquisition	Track Record
Highlights	Segment Results		NAV & Valuation	Financing & LTV	European Activities		Guidance		Appendix
					Fair Value (€/sqm)			In-place rent (€/sqm)
Year	Deal	Residential units #	TOP Locations	@ Acquisition	Jun 30, 2019	∆	@ Acquisition	Jun 30, 2019	∆
2014	DEWAG	11,300	Berlin, Hamburg, Cologne, Frankfurt/Main	1,344	2,341	74%	6.76	8.00	18%
	VITUS	20,500	Bremen, Kiel	807	1,470	82%	5.06	5.91	17%
	GAGFAH	144,600	Dresden, Berlin, Hamburg	889	1,729	95%	5.40	6.43	19%
2015	FRANCONIA	4,100	Berlin, Dresden	1,044	2,009	92%	5.82	6.78	17%
	SÜDEWO	19,400	Stuttgart, Karlsruhe, Mannheim, Ulm	1,380	2,062	49%	6.83	7.55	11%
2016	GRAINGER	2,400	Munich, Mannheim	1,501	2,309	54%	7.09	8.01	13%
	CONWERT (Germany & Austria)	23,400	Berlin, Leipzig, Potsdam, Vienna	1,353	1,926	42%	5.88	6.43	9%
	thereof Germany	21,200	Berlin, Leipzig, Potsdam	1,218	1,820	49%	5.86	6.38	9%

thereof Austria 2,200 Vienna 1,986 2,484 25% 6.11 6.84 12%

PROIMMO 1,000 Hanover 1,617 1,791 11% 6.63 6.88 4%

Villach 1,244 1,434 15%

Gothenburg 1,462 1,738 19%

5.10 5.33 4%

5.96 6.32 6%

4.21 4.38 4%

9.20 4%

8.83

Note: Excluding smaller tactical acquisitions.

BUWOG

VICTORIA PARK

(Germany & Austria) 48,300 Berlin, Lübeck, Vienna,

(Sweden) 14,000 Stockholm, Malmö,

Total 289,000

2017

2018

thereof Germany 27,000 Berlin, Lübeck, Kiel 1,330 1,645 24%

thereof Austria 21,300 Vienna, Villach, Graz 1,157 1,234 7%

Covenants and KPIs (June 30, 2019)
Highlights	Segment Results	NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix

Bond KPIs	Covenant	Level	June 30, 2019
	LTV	<60%	40%
	Total Debt / Total Assets
	Secured LTV	<45%	13%
	Secured Debt / Total Assets
	ICR		4.7x
	Last 12M EBITDA / Last 12M Interest Expense	>1.80x
	Unencumbered Assets	>125%	205%
	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

Bonds / Rating

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Corporate investment grade rating

Rating agency	Rating	Outlook	Last Update
Standard & Poor's	BBB+	Stable	08 May 2019

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%	repaid on 25 July 2019	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 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%	1.5000%	31 Mar 2025	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%	2.2500%	15 Dec 2023	BBB+
Bond 011A (EMTN)	6 years 0.875%	DE000A182VS4	€ 500m	99.530%	0.875%	10 Jun 2022	BBB+
Bond 011B (EMTN)	10 years 1.500%	DE000A182VT2	€ 500m	99.165%	1.5000%	10 Jun 2026	BBB+
Bond 013 (EMTN)	8 years 1.250%	DE000A189ZX0	€ 1,000m	99.037%	1.250%	06 Dec 2024	BBB+
Bond 014A (EMTN)	5 years 0.750%	DE000A19B8D4	€ 500m	99.863%	0.750%	25 Jan 2022	BBB+
Bond 014B (EMTN)	10 years 1.750%	DE000A19B8E2	€ 500m	99.266%	1.750%	25 Jan 2027	BBB+
Bond 015 (EMTN)	8 years 1.125%	DE000A19NS93	€ 500m	99.386%	1.125%	08 Sep 2025	BBB+
Bond 016 (EMTN)	2 years 3M EURIBOR+0.350%	DE000A19SE11	€ 500m	100.448%	3M EURIBOR+0.350%	20 Nov 2019	BBB+
Bond 017A (EMTN)	6 years 0.750%	DE000A19UR61	€ 500m	99.330%	0.750%	15 Jan 2024	BBB+
Bond 017B (EMTN)	10 years 1.500%	DE000A19UR79	€ 500m	99.439%	1.500%	14 Jan 2028	BBB+
Bond 018A (EMTN)	4.75 years 3M EURIBOR+0.450%	DE000A19X793	€ 600m	100.000%	0.793% hedged	22 Dec 2022	BBB+
Bond 018B (EMTN)	8 years 1.500%	DE000A19X8A4	€ 500m	99.188%	1.500%	22 Mar 2026	BBB+
Bond 018C (EMTN)	12 years 2.125%	DE000A19X8B2	€ 500m	98.967%	2.125%	22 Mar 2030	BBB+
Bond 018D (EMTN)	20 years 2.750%	DE000A19X8C0	€ 500m	97.896%	2.750%	22 Mar 2038	BBB+
Bond 019 (EMTN)	5 years 0.875%	DE000A192ZH7	€ 500m	99.437%	0.875%	03 Jul 2023	BBB+
Bond 020 (EMTN)	6.5 years 1.800%	DE000A2RWZZ6	€ 500m	99.836%	1.800%	29 Jun 2025	BBB+

¹ EUR-equivalent Coupon

In regulated markets like Germany, rent growth is on a sustainable upward trajectory and largely independent from

GDP developments

In unregulated markets like the USA, rents go up and down broadly in line with the GDP development

Sources: Federal Statistics Office, GdW (German Association of Professional Homeowners), REIS, BofA Merrill Lynch Global Research, OECD. 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.

Residential Market Fundamentals

Completions Substantially below Required Volumes

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix

Note: VNA 2010 – 2014 refers to Deutsche Annington Portfolio at the time; construction costs excluding land. The land value refers to the share of total fair value allocated to land. Allocation between building and land in Sweden assumed to be similar to Germany.

H1 2019 Earnings Call

Residential Market Fundamentals

Housing Affordability and Urbanization

Population living in urban areas (%)

¹ Share of disposable household income spent on housing, water, electricity, gas and other fuels

Sources: Eurostat, United Nations

Distribution of household sizes (million) 15.0 2.3 2.3 Amateur landlords Professional, not listed Government owned Ownership structure (million units) 15.4 5.2 4.9 4.0 4.4 40.1 43.2 41.4 1.4 1.4 1.1 4 persons 5 or more persons

• While the overall population in Germany is expected to slightly decline, the number of households is forecast to grow until at least 2035 with a clear trend towards smaller households.
• The household growth is driven by various demographic and social trends including divorce rates, employment mobility etc.

15.8 17.3 19.0

2008 2018 2035E

14.0

Cooperatives

Listed property companies

Churches and other

• 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.

2.1

0.9

0.6

Listed sector represents ~4% of total rental market.

3 persons

1 person 2 persons

13.6

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Residential Market Fundamentals (Germany) Household Sizes and Ownership Structure Growing number of smaller households Fragmented ownership structure

Liquid Large-cap Stock

VNA share price performance since IPO vs. DAX and EPRA Europe Index

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.

0 5 10 15 20 15 20 25 30 35 40 45 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Average market cap (Euro bn) VWAP (Euro/share) Average market cap (Euro bn) VWAP (Euro/share) Share price and market capitalization DAX MSCI inclusion inclusion Stoxx 600 inclusion Südewo acq. (20k units) MDAX inclusion S-DAX inclusion DeWAG & Vitus acq. (41k units) Gagfah acq. (140k units) conwert acq. (24k units) Announcement cooperation with French CDC Habitat (former "SNI") Announcement Buwog (48k units) Takeover Offer Victoria Park (14k units)

Source: Factset, company data

Reconciliation of Shares Outstanding

Highlights Segment Results	NAV & Valuation	Financing & LTV European Activities	Guidance	Appendix
Date	NOSH (million)	Comment
December 31, 2016	466.0
March 31, 2017	468.8	conwert acquisition
June 30, 2017	476.5	Scrip dividend
September 30, 2017	485.1	Gagfah cross-border merger
December 31, 2017	485.1
March 31, 2018	485.1
June 30, 2018	518.1	€1bn ABB in 05/2018;	scrip dividend
September 30, 2018	518.1
December 31, 2018	518.1
March 31, 2019	518.1
June 30, 2019	542,3	€744m ABB in 05/2019; scrip	dividend

The number of outstanding shares is always available at https://investoren.vonovia.de/websites/vonovia/English/2010/basic-information.html

Management Board Compensation - Overview

Highlights Segment Results NAV & Valuation Financing & LTV European Activities Guidance Appendix Fixed Remuneration (incl. Pension) Bonus / STIP LTIP • Criteria/Targets: Group FFO, adj. NAV/share, adj. EBITDA Total, personal targets agreed with SVB • Bonus Cap at predetermined amount • Payout: Cash • Annually granted remuneration component in the form of virtual shares • Criteria/Targets: relative TSR, adj. NAV/share, Group FFO/share, Customer Satisfaction Index (CSI) • Performance Period: 4 years • Payout: Cash • Cap: 250% of grant value • Monthly fixed compensation paid in 12 equal installments • Annual pension contribution (alternative: cash payout) Management Board compensation is based on three pillars

Share Holding Provision

• Mandatory share ownership

• 100% of annual fixed remuneration (excl. pension) (accumulation on a pro rata basis during first 4 years)

• Bonus cap at predetermined amount

• Cash payout

• Group FFO is the key figure for managing the sustained operational earnings power of our business.

• Adj. NAV/share as standard figure for the value of our property assets (calculation according to EPRA best practice standards, after corrections for goodwill).
• Adj. EBITDA Total: aggregate EBITDA across the four segments, reflecting the sustainable earnings strength of the business before interest, taxes, depreciation and amortization.

• Personal targets related to individual department responsibilities or overlapping targets (e.g. integration projects).

• LTIP aims to ensure that remuneration structure focuses on sustainable corporate development.

• Relative TSR is from an investor perspective a well-established and accepted performance measure, focusing on share return, relative to a selected peer group. Hence, it is adequate for comparison with relevant competitors.
• Customer Satisfaction Index (CSI): Based on customer surveys and reflects how our services are perceived and accepted by our customers.
• Shareholder alignment safeguarded by (i) relative performance targets (Group FFO/share and Adj. NAV/share) as well as (ii) calculation method which takes actual share price performance into account.

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.

For Your Notes
Highlights	Segment Results	NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix

For Your Notes
Highlights	Segment Results	NAV & Valuation	Financing & LTV	European Activities	Guidance	Appendix