Vonovia SE — Call Transcript 2019

May 7, 2019

Q1 2019 Earnings Call May 7, 2019

Rolf Buch, CEO Helene von Roeder, CFO

Agenda
Highlights	Segment results	NAV & Valuation	Financing & LTV	Guidance	Appendix

Highlights	3
Segment results	4
NAV & valuation	16
Financing & LTV	17
Guidance	19
Appendix	22

Highlights Q1 2019

Highlights	Segment results NAV & Valuation	Financing & LTV	Guidance	Appendix
Performance	All four segments well on track Adj. EBITDA Total €429.9m (+29.3%) Group FFO €303.6m (+20.0%) Group FFO per share €0.59 (+13.5%)
NAV & Valuation	Adj. NAV €23,613.1m or €45.48 per share (+1.5% compared to Dec. 31, 2018) Next portfolio valuation end of Q2 2019. Current indications suggest a stronger valuation uplift than in H1 2018
Capital Structure	LTV 42.4% in the middle of our target range Net debt/EBITDA multiple 11.4x
Guidance Update	Adj. EBITDA Total: €1,700m - IFRS 16 effects Group FFO: €1,165m - €1,215m (€2.25 - performance growth IFRS 16 effects are included in Adj. EBITDA	€1,750m.	Guidance increased by €50m, of which ~€30m from €2.35 per share). Guidance increased by €25m from Total but excluded from Group FFO

We are off to a good start into the year and remain confident in our upward trajectory and ability to deliver sustainable growth in 2019 and beyond.

• Q1 2019 including and Q1 2018 excluding Buwog and Victoria Park.
• While the operating business via the rental and value-add segments clearly remain the main performance drivers, recurring sales and development made an increasing contribution in Q1 2019 and underline Vonovia's superior earnings and cash flow potential.

¹ Consolidation in Q1 2019 (Q1 2018) comprises intragroup profits of €11.1m (€5.3m), valuation result of development to hold of €5.3m (€0.3m), and IFRS 16 effects of €7.5m (€0.0m).

Q1 2019 Earnings Call

Adj. EBITDA Rental Up from Acquisitions and Organic Growth

Rental Segment

¹ Prior-year adjusted to include transaction corporate costs. ² EBITDA Operations margin for Vonovia Germany (Adj. EBITDA Rental + Adj. EBITDA Value-add – intragroup profits). Q1 2019 includes positive impact from IFRS 16.

Q1 2019 Earnings Call

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix Efficiency Analysis: Increasing EBITDA Operations Margin (Germany) Rental Segment

Average German portfolio in Q1 was 4.1% larger y-o-y but delivered 8.3% Rental income growth and 12.6% EBITDA Operations growth.

Vonovia Germany		Q1 2019	Q1 2018	Delta (€m %)
Average number of residential units	`000	358	344	4.1%
Rental income	€m	446.8	412.4	34.4 8.3%
Maintenance expenses	€m	-66.6	-60.8	-5.8 9.6%
Operating expenses	€m	-53.8	-52.8	-1.0 2.0%
Adj. EBITDA Rental	€m	326.4	298.9	27.5 9.2%
Adj. EBITDA Value-add	€m	35.2	17.8	17.4 97.9%
Adj. EBITDA Operations1	€m	350.5	311.4	39.1 12.6%
EBITDA Operations (incl. maintenance)	%	78.4%	75.3%
EBITDA Operations (excl. maintenance)	%	93.2%	90.0%

¹ Including consolidation effects, i.e. €11.1m intragroup profits in Q1 2019 and €5.3m in Q1 2018

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix Operating KPIs Rental Segment

• Organic rent growth of 4.0% in line with expectations.
• Average in-place rent of €6.56 per sqm (+6.1%, not like-for-like and largely impacted by non-core disposals).
• Vacancy rate of 2.9%, largely investment related.
• Maintenance expense and capitalized maintenance stable on a per-square-meter basis.

Rental Segment

Comprehensive Investment Program Well on Track

Highlights Segment results NAV & Valuation Financing & LTV 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: 713 units sold in Q1 2019 with a fair value step-up of 15.7%.

Rental Segment

		Fair value1		Residential	In-place rent
Mar. 31, 2019	(€m)	% of total	(€/sqm)	units	(€/sqm/month)
Operate	8,707	20%	1,686	74,920	6.88
Invest	25,896	60%	1,685	248,457	6.51
Strategic	34,603	80%	1,685	323,377	6.60
Recurring Sales	3,610	8%	1,818	28,975	6.74
Non-core	572	1%	1,255	5,321	6.08
Vonovia Germany	38,785	90%	1,688	357,673	6.60
Vonovia Austria	2,493	6%	1,354	22,649	4.51
Vonovia Sweden	1,781	4%	1,602	14,287	9.10
Vonovia Total	43,059	100%	1,661	394,609	6.56

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 €1,484.1m, of which €401.0m for undeveloped land and inheritable building rights granted, €364.7m for assets under construction, €537.5m for development and €180.9m for other.

Rental Segment

Regional Cluster

Highlights	Segment results		NAV & Valuation			Financing & LTV			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 Apartments
Berlin	6,583	2,382	42,027	1.5	222	211	6.69	4.4	29.6	80.4	1.8	49.2
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	3,945	2,208	27,537	1.6	173	167	8.11	4.2	22.8	105.0	1.8	39.7
Rhineland (Cologne, Düsseldorf, Bonn)	3,441	1,752	28,818	2.8	165	158	7.07	3.5	20.8	102.0	1.7	29.7
Southern Ruhr Area (Dortmund, Essen, Bochum)	3,379	1,252	43,408	3.8	188	183	5.97	4.7	17.9	88.5	1.5	31.6
Dresden	3,126	1,368	38,452	3.6	162	153	6.06	3.6	19.2	81.8	1.7	29.9
Hamburg	2,466	1,924	19,839	2.1	107	103	6.98	3.5	23.0	98.4	1.6	40.9
Munich	2,050	3,135	9,667	1.1	65	61	8.10	3.9	31.6	121.8	1.8	54.2
Stuttgart	1,936	2,171	13,808	2.0	83	80	7.82	3.0	23.3	104.5	1.8	39.2
Kiel	1,916	1,376	23,377	2.2	103	98	6.20	4.4	18.6	74.8	1.6	40.0
Hanover	1,633	1,559	16,317	3.5	81	78	6.52	4.5	20.2	90.1	1.7	36.7
Northern Ruhr Area (Duisburg, Gelsenkirchen)	1,566	963	26,076	3.7	109	105	5.67	4.0	14.4	81.7	1.2	25.2
Bremen	1,081	1,463	11,860	3.9	49	47	5.69	3.5	21.9	84.2	1.8	28.6
Leipzig	870	1,399	9,190	3.8	43	41	5.97	3.2	20.1	74.5	1.7	22.7
Westphalia (Münster, Osnabrück)	793	1,272	9,495	3.9	44	43	6.00	5.1	18.1	92.4	1.5	40.3
Freiburg	603	2,166	4,034	1.9	25	24	7.34	3.7	24.6	85.4	1.7	47.0
Other Strategic Locations	2,638	1,514	26,838	3.2	136	131	6.60	4.5	19.4	-	1.6	40.1
Total Strategic Locations Germany	38,028	1,698	350,743	2.8	1,756	1,681	6.61	4.1	21.7	-	1.7	36.1
Non-Strategic	756	1,310	6,930	5.9	40	34	6.20	0.6	19.0	-	1.6	22.4
Germany total	38,785	1,688	357,673	2.9	1,796	1,715	6.60	4.0	21.6	100.0	1.7	36.0
Austria	2,493	1,354	22,649	4.6	104	87	4.51	3.1	23.9	-	0.9	-
Sweden	1,781	1,602	14,287	1.4	120	109	9.10	-	14.8	-	2.0	-
Total Vonovia	43,059	1,661	394,609	2.9	2,020	1,912	6.56	4.0	21.3	-	1.6	-

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. Data for Strategic Locations also includes Recurring Sales assets in those markets.

¹ Fair value of the developed land excluding €1,484.1m, of which €401.0m for undeveloped land and inheritable building rights granted, €364.7m for assets under construction, €537.5m for development and €180.9m 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

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

Value-add Segment (€m)	Q1 2019	Q1 2018	Delta	Value-add EBITDA mostly from internal savings
				Craftsmen cost savings (VTS)
Income	358.8	265.9	34.9%	Multimedia
of which external	80.2	52.0	54.2%	Residential environment
				Smart metering
of which internal	278.6	213.9	30.2%	Energy
Operating expenses Value-add	-323.0	-248.1	30.2%	Other (e.g. 3rd party management)
Adj. EBITDA Value-add	35.8	17.8	>100%

Two types of value-add business: (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).
• Adj. EBITDA Value-add is not included in the EPRA NAV or Adj. NAV.

Applying the impairment test discount rate¹ to the 2019E Adj. EBITDA Value-add suggests an additional value of ~€5 per share (~10% of top of Q1 2019 Adj. NAV).

Value-add Segment

• Q1 2019 with higher recurring sales volume, gross proceeds and fair value step-ups.
• Ca. three quarters of the gross proceeds are attributable to recurring sales in Germany and the remaining one quarter to recurring sales in Austria.
• FV step-up partly driven by disposals in Austria.
• Avg. sales prices up 19% y-o-y.

Recurring Sales Segment (€m)	Q1 2019	Q1 2018	Delta
Units sold	809	594	36.2%
Gross proceeds	109.0	67.1	62.4%
Fair value	-79.4	-52.6	51.0%
Adjusted earnings	29.6	14.5	>100%
Fair-value step-up	37.2%	27.6%	9.6pp
Selling costs1	-3.3	-3.0	10.0%
Adj. EBITDA Recurring Sales	26.3	11.5	>100%

¹ Prior-year adjusted to exclude transaction corporate costs.

• The 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.
• Entire development-to-hold volume in Q1 2019 was in Germany.
• Ca. one third of Q1 2019 development-to-sell volume in Germany and ca. two thirds in Austria.

Development Segment (€m)	Q1 2019	Q1 2018	Delta
Income from disposal of "to sell" properties	59.4	0.0	-
Cost of development to sell	-46.1	0.0	-
Gross profit development to sell	13.3	0.0	-
Fair value development to hold	47.3	6.1	>100%
Cost of development to hold	-42.0	-5.8	>100%
Gross profit development to hold	5.3	0.3	>100%
Operating expenses Development segment	-8.2	0.0	-
Adj. EBITDA Development	10.4	0.3	>100%

Vonovia's Contribution towards Reducing the Housing Shortage

• 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.

Development Segment

• The new IFRS 16 accounting framework is mandatory for companies reporting under IFRS from January 1, 2019, onwards.
• IFRS 16 governs the accounting, valuation and reporting of lease businesses. The objective is to provide more transparency by ending off-balance lease financing and to ensure that lease activities are generally accounted for on the balance sheet. This shall enhance comparability between companies that lease and companies that buy.
• For Vonovia as a lessee (heritable building rights, vehicle and IT leasing, etc.), this means that leasing expenses are capitalized on the balance sheet, representing an asset which in turn leads to a right-of-use on the liabilities side.
• In the profit and loss statement, lease expenses are no longer reported; instead, the P&L only shows the interest expense and any depreciation/fair value adjustments.
• Vonovia applied IFRS 16 in Q1 2019 for the first time and reported an impact of +€7.5m for the first three months 2019. For the full year 2019 the IFRS 16 impact is estimated to be ca. +€30m. Prior-year numbers remain unadjusted.

	IFRS Accounts	Adj. EBITDA Total	Group FFO	LTV
IFRS 16 impact

IFRS 16 changes the accounting for leases but does not have a cash impact. As a consequence, Vonovia will be reporting Group FFO (basis for the dividend) and LTV excluding any IFRS 16 contribution.

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix Organic NAV Growth of +1.5% in Q1

• No portfolio valuation in Q1.¹
• Next portfolio valuation end of Q2 2019. Current indications suggest a stronger valuation uplift than in H1 2018.
• Similar to prior years, the H1 valuation will include ca. 2/3 of the portfolio via the 26 largest/most dynamic locations in Germany plus Vienna (plus a full valuation for Sweden).

€m (unless indicated otherwise)	Mar. 31, 2019	Dec. 31, 2018
Equity attributable to Vonovia's shareholders	18,044.9	17,880.2
Deferred taxes on investment properties	8,347.7	8,161.1
Fair value of derivative financial instruments2	84.2	87.2
Deferred taxes on derivative financial instruments	-24.1	-23.5
EPRA NAV	26,452.7	26,105.0
Goodwill	-2,839.6	-2,842.4
Adj. NAV	23,613.1	23,262.6
EPRA NAV €/share	51.06	50.39
Adj. NAV €/share	45.58	44.90

1 Victoria Park does a quarterly portfolio valuation and the Q1 2019 result was +€51.9m. ² Adjusted for effects from cross currency swaps. Per-share numbers are based on number of shares outstanding as of both reporting dates: 518,077,934.

LTV in the Middle of Target Range
Highlights	Segment results	NAV & Valuation	Financing & LTV	Guidance	Appendix

• LTV as of March 31, 2019, was 42.4%; Net debt/EBITDA multiple¹ was 11.4x.
• 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.

€m (unless indicated otherwise)	Mar. 31, 2019	Dec. 31, 2018
Non-derivative financial liabilities	20,879.7	20,136.0
Foreign exchange rate effects	-38.2	-33.5
Cash and cash equivalents	-1,873.2	-547.7
Net debt	18,968.3	19,554.8
Sales receivables	-24.6	-256.7
Adj. net debt	18,943.7	19,298.1
Fair value of real estate portfolio	44,543.0	44,239.9
Shares in other real estate companies	127.4	800.3
Adj. fair value of real estate portfolio	44,670.4	45,040.2
LTV	42.4%	42.8%
LTV (incl. perpetual hybrid)	44.6%	45.1%
Net debt/EBITDA multiple1	11.4x	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	Guidance	Appendix
			KPI / criteria		Mar. 31, 2019
•	Unwavering commitment to investment		Corporate rating (S&P)		BBB+
grade rating			LTV		42.4%
			Net debt/EBITDA multiple1		11.4x
•	Maintain diverse funding mix to		ICR		4.7
			Fixed/hedged debt	ratio2	96%
	preserve best possible optionality		debt2 Average cost of		1.8%
•	LTV target range of 40%-45%		Weighted average maturity2		8.2 years
			Unencumbered assets		54%

¹Adj. net debt quarterly average over Total EBITDA (LTM); adj. for IFRS 16 effect. ²Excl. equity hybrid. ³ Repayment of €700m debt hybrid bond already considered.

page 18

2019 Guidance Increase
Highlights	Segment results	NAV & Valuation	Financing & LTV	Guidance	Appendix

• ~€50m Adj. EBITDA Total guidance increase (of which ~€30m from IFRS 16 effects).
• ~€25m Group FFO guidance increase driven by performance growth.
• IFRS 16 accounting changes have an impact on earnings but not on cash flow and are included in Adj. EBITDA Total but excluded from Group FFO.

	initial 2019 Guidance	2019 Guidance update
Organic rent growth (eop)	~4.4%	 ~4.4%
Rental Income (€m)	2,020 – 2,070	 2,020 – 2,070
Recurring Sales (# of units)	~2,500	 ~2,500
FV step-up Recurring Sales	~30%	 ~30%
Adj. EBITDA Total (€m)	1,650 – 1,700	1,700 – 1,750
Group FFO (€m)	1,140 – 1,190	1,165 – 1,215
Group FFO (€/share)	2.20 – 2.30	2.25 – 2.35
Dividend (€/share)	~70% of Group FFO	~70% of Group FFO
Modernization & New Construction (€m)	1,300 - 1,600	 1,300 - 1,600
Underlying number of shares (million)	518.1	518.1

Management Board Changes

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix

• Klaus Freiberg (57) has decided to step down from Vonovia's Management Board, effective from the end of the Annual General Meeting scheduled for May 16, 2019. He joined the Vonovia Management Board in 2010 from Arvato (Bertelsmann Group) where he had served in various senior positions between 1995 and 2010. Klaus Freiberg's entrepreneurial skills and his strategic vision were instrumental to Vonovia's success story. During his tenure Vonovia's workforce grew to more than 10,000 employees with a responsibility for almost 400k apartments.
• Arnd Fittkau (46) has been appointed by Vonovia's Supervisory Board and will assume the position of Chief Rental Officer (CRO). He started his career with the company in 2002 and has been serving as Executive Director for Vonovia's rental operations for the last three years. Prior to that, he held various senior positions in financial controlling, third-party management and rental operations. Arnd Fittkau is an experienced real estate specialist with an excellent nationwide network in the housing industry and political community.

New Vonovia Management Board1
Rolf Buch Chief Executive Officer	Helene von Roeder Chief Financial Officer	Arnd Fittkau Chief Rental Officer	Daniel Riedl Chief Development Officer

1 Effective from the end of the Annual General Meeting scheduled for May 16, 2019.

IR Contact & Financial Calendar

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix Rene Hoffmann Head of Investor Relations Vonovia SE Universitätsstraße 133 44803 Bochum Germany +49 234 314 1629 rene.hoffmann@vonovia.de investorrelations@vonovia.de Contact Financial Calendar 2019 May 8 & 9 Roadshow London (Morgan Stanley) May 14 Roadshow Paris (UBS) May 16 Annual General Meeting May 17 Conference in Paris (Kepler Cheuvreux)¹ May 21 & 22 Roadshow US (Berenberg) May 23 Conference in Tarrytown, New York (Berenberg) 1 May 22 Conference in Amsterdam (Kempen) May 24 Conference in Frankfurt (HSBC)¹ Jun 4-5 Capital Markets Day Jun 6 Conference in Berlin (Deutsche Bank) Jun 12 Conference in Paris (Exane BNP Paribas) Jun 27 Issuer & Investor Debt Forum in Frankfurt (Deutsche Bank) Jul 2 & 3 Roadshow Milan, Lugano, Geneva (Berenberg) 1 Jul 16 & 17 Roadshow Israel¹ Aug 2 Interim results 6M 2019 Sep 10 & 11 Conference in New York (BAML) Sep 20 Conference in London (Société Generale) Sep 23 Conference in Munich (Goldman Sachs / Berenberg) Sep 24 Conference in Munich (Baader) 1 Sep 26 Fixed Income RE Conference in London (Morgan Stanley) Nov 5 Interim results 9M 2019 The most up-to-date financial calendar is always available online. App & Website https://investors.vonovia.de

¹ IR only

Appendix
Highlights	Segment results	NAV & Valuation	Financing & LTV	Guidance	Appendix

Strategy	23
Fair Value per sqm Evolution	25
Portfolio Evolution	26
Acquisition Track Record	27
European Expansion Overview	29
Bond data	30
Residential Market Data	32
VNA Shares	36
Management Compensation	39
Disclaimer	42

4+1 Strategy Has Evolved into 4+2 Strategy

Q1 2019 Earnings Call

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

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix Conservative Valuation Levels

In-place values are still way below 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. The land value refers to the share of total fair value allocated to land.

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

Acquisitions – Opportunistic but Disciplined

Q1 2019 Earnings Call

Acquisition Track Record

Highlights	Segment results	NAV & Valuation	Financing & LTV	Guidance	Appendix

					Fair Value (€/sqm)			In-place rent (€/sqm)
Year	Deal	Residential units #	TOP Locations	@ Acquisition	Dec. 31, 2018	∆	@ Acquisition	Dec. 31, 2018	∆
2014	DEWAG	11,300	Berlin, Hamburg, Cologne, Frankfurt/Main	1,344	2,227	66%	6.76	7.88	17%
	VITUS	20,500	Bremen, Kiel	807	1,383	71%	5.06	5.81	15%
	GAGFAH	144,600	Dresden, Berlin, Hamburg	889	1,602	80%	5.40	6.35	17%
2015	FRANCONIA	4,100	Berlin, Dresden	1,044	1,859	78%	5.82	6.70	15%
	SÜDEWO	19,400	Stuttgart, Karlsruhe, Mannheim, Ulm	1,380	1,993	44%	6.83	7.45	9%
2016	GRAINGER	2,400	Munich, Mannheim	1,501	2,202	47%	7.09	7.95	12%
	CONWERT (Germany & Austria)	23,400	Berlin, Leipzig, Potsdam, Vienna	1,353	1,826	35%	5.88	6.34	8%
2017	thereof Germany	21,200	Berlin, Leipzig, Potsdam	1,218	1,710	40%	5.86	6.29	7%
	thereof Austria	2,200	Vienna	1,986	2,436	23%	6.11	6.69	10%
	PROIMMO	1,000	Hanover	1,617	1,671	3%	6.63	6.77	2%
	BUWOG (Germany & Austria)	48,300	Berlin, Lübeck, Vienna, Villach	1,244	1,354	9%	5.10	5.25	3%
	thereof Germany	27,000	Berlin, Lübeck, Kiel	1,330	1,530	15%	5.96	6.19	4%
2018	thereof Austria	21,300	Vienna, Villach, Graz	1,157	1,190	3%	4.21	4.34	3%
	VICTORIA PARK (Sweden)	14,000	Stockholm, Malmö, Gothenburg	1,462	1,563	7%	8.83	9.11	3%
	Total	289,000

Note: Excluding smaller tactical acquisitions

Highlights Segment results NAV & Valuation Financing & LTV 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 (no active role)
% of total portfolio	~6%	~4%	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 • Pursue accretive acquisition opportunities on an opportunistic basis if and when legislation changes and allows the payout of economic dividends from social housing	• Continue market research • Be prepared for accretive acquisition opportunities on an opportunistic basis

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix Covenants and KPIs (March 31, 2019)

Bond KPIs	Covenant	Level	Mar 31, 2019
	LTV	<60%	41%
	Total Debt / Total Assets Secured LTV
	Secured Debt / Total Assets	<45%	12%
	ICR Last 12M EBITDA / Last 12M Interest Expense	>1.80x	4.7x
	Unencumbered Assets
	Unencumbered Assets / Unsecured Debt	>125%	204%

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

Bonds / Rating

Rating agency	Rating	Outlook	Last Update
Standard & Poor's	BBB+	Stable	02 Aug 2018

Bond ratings as of 2018-08-02

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 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%	repaid on 08 Apr 2019	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

Highlights Segment results NAV & Valuation Financing & LTV Guidance Appendix German Residential – Safe Harbor and Low Risk Rental regulation safeguards high degree of stability

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

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

page 32

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

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

German Residential – Favorable Fundamentals

Sources: German Federal Statistics Office, GdW (German Association of Professional Homeowners). 2035(E) household numbers are based on trend scenario of the German Federal Statistics Office.

European Residential Markets – Favorable Fundamentals

Sources: United Nations, JLL Research, European Commission, Federal Statistics Office, Eurostat

Liquid Large-cap Stock

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

Q1 2019 Earnings Call

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.

Reconciliation of Shares Outstanding

Highlights	Segment results	NAV & Valuation	Financing & LTV	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

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

Total remuneration cap

Share Holding Provision

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

Note: In line with the new KPI structure, especially Group FFO, the STIP and LTIP criteria will be changed accordingly from 2019 onwards.

• Bonus cap at predetermined amount
• Cash payout

Rationale

• FFO1 is key figure in the industry 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).
• EBITDA Sales: Measure of success of our sales activities.
• Personal targets related to individual department responsibilities or overlapping targets (e.g. integration projects).

Note: In line with the new KPI structure, especially Group FFO, the STIP and LTIP criteria will be changed accordingly from 2019 onwards.

• 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 (FFO/share and EPRA NAV/share) as well as (ii) calculation method which takes actual share price performance into account.

Note: In line with the new KPI structure, especially Group FFO, the STIP and LTIP criteria will be changed accordingly from 2019 onwards.

Rationale

Disclaimer
Highlights	Segment results	NAV & Valuation	Financing & LTV	Guidance	Appendix

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	Guidance	Appendix

For Your Notes
Highlights	Segment results	NAV & Valuation	Financing & LTV	Guidance	Appendix