Vonovia SE

Investor Presentation • Aug 1, 2024

VOROUIA

H1 2024

Earnings Call Presentation

Agenda

2 .
H1 2024 Update pages 3-12
3.

Appendix pages 15-39

Key Highlights

Stabilization Phase Largely Completed
$\sim$ €1.5bn disposals signed 2024 YTD. Capital release through disposals will continue at least until €3bn disposal target for 2024 has been reached.

H1 2024 valuation decline decelerated to $1.4 \%$. Values appear to have reached trough levels and will allow us to stop playing defense no later than 2025.

Positive rent growth momentum continues. Structural supply/demand imbalance keeps upward pressure on real market rents, and Vonovia's rents are expected to follow the much higher real market on a robust long-term upward trajectory at an annual rate of ca. 4\%.

Guidance increased to upper end of range for organic rent growth, Adj. EBITDA and Adj. EBT. All other guidance items confirmed.

Disposals 2024 YTD

$\sim € 1.5$ bn Signed and Fully on Track towards €3bn Target for 2024

Plus opportunistic disposals from remaining portfolio as appropriate

7068
164
207
246

Following $€ 700 \mathrm{~m}$ sold to the City of Berlin ("Prima") and $€ 363 \mathrm{~m}$ in various transactions and across different sales channels, Vonovia continued to deliver on its disposal target since Q1 reporting with an additional volume of $€ 483 \mathrm{~m}$ :

• Three larger residential transactions from core, MFH and non-core portfolios ${ }^{1}$ with gross yields of just outside $4 \%$ for MFH/core assets and $\sim 5 \%$ for non-core assets. Some of the assets have deferred maintenance and capex backlog.
• €85m (576 units located in greater Frankfurt area)
• €59m (461 units located in Rhine Main area)
• €154m (933 units located in Rhine Main area) ${ }^{2}$
• €185m additional disposals in various transactions and across different sales channels.

All disposals were at least in line with respective asset's fair value.

[^0]
[^0]: ${ }^{1}$ Including assets owned by Deutsche Wohnen. ${ }^{2}$ Closing is subject to financing; a contractual penalty has been agreed in case closing conditions are not met by the buyer.

Valuation

H1 2024 Decline of 1.4\% Suggests Values Appear to Have Reached Trough Levels

Valuation KPIs Jun. 30, 2024 (Standing Portfolio ${ }^{4}$ )

	Germany	Sweden	Austria	VNA Total
In-place rent multiple	24.6	$17.1^{2}$	$21.5^{2}$	$\mathbf{2 3 . 6}$
Fair value €/sqm	2,269	2,041	1,590	$\mathbf{2 , 2 1 7}$
L-f-I value growth ${ }^{3,5}$	$-1.6 \%$	$0.0 \%$	$-1.2 \%$	$\mathbf{- 1 . 4 \%}$
Fair value €bn ${ }^{4}$	69.5	6.3	2.7	$\mathbf{7 8 . 5}$

Value decline since 06/2022 peak valuation

Gross value decline
Rent growth \& modernization
$1-\mathrm{f}-\mathrm{I}$ value loss

• L-f-I Value decline of $1.4 \%$ in H1 2024.
• Standing portfolio now valued at $23.6 x$ in-place rent equaling a gross initial yield of $4.2 \%$ and $3.4 \%$ on a net basis. ${ }^{1}$
• Value per sqm of €2,269 (German portfolio) including land compares to
• $\sim € 3,360$ median purchase price for existing condos ${ }^{6}$;
• $\sim € 5,300$ median purchase price for new constructions ${ }^{6}$.
• Value decline from 06/22 peak strongest historic correction with $-23 \%$ (gross) and $-15 \%$ net (including compensatory effects from rent growth and modernization).

[^0]
[^0]: ${ }^{1}$ Gross yield of $4.2 \%$ and $80 \%$ E8/TOA margin. ${ }^{2}$ 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. ${ }^{3}$ Local currency. ${ }^{4}$ Fair value of the developed land excluding $€ 4.0 b n$, of which $€ 0.3 b n$ for undeveloped land and imbertable building rights granted, $€ 0.3 b n$ for assets under construction, $€ 2.2 b n$ for development, $€ 0.5 b n$ for nursing portfolio and $€ 0.5 b n$ for other. ${ }^{5} \mathrm{~L}$-f-I calculation of property portfolio excl. undeveloped land etc. ${ }^{6}$ Value Data Insights (formerly empirice systems), Q2 2024.

Market Voices

JLL (July 25, 2024)

"Higher wages coupled with lower financing costs and price corrections are creating more attractive conditions for the purchase of residential property. Due to the sharp rise in rental prices, the ratio between rental and purchase costs has also shifted slightly in favor of purchase costs. This has recently been reflected in rising transaction volumes, which in turn is having an impact on the development of residential property prices."

Imтoмeelt (July 23, 2024)

"The significant fall in prices following the interest rate shock two and a half years ago has made buying a property more affordable again. In addition, construction interest rates are currently lower than last year. As a result, interest in buying property is gradually returning and prices are already rising again in a good half of all major cities."

JLL (July 19, 2024)

"Transaction market almost back to long-term average levels."
"Q2 transaction level higher than Q1 both in terms of volume and number of transactions."
"Transaction market characterized by smaller lot sizes."

LBBW (July 10, 2024)

"Loan agreements for condominiums climbed to their highest level since the third quarter of 2022."

ImmoScout24 (July 9, 2024)

"Increasing signs of a further upturn in the market for properties for sale: interest rates remain constant, demand continues to increase, and financing inquiries are soaring. As a result, there is increasing momentum in the market."
"The wait-and-see phase is over for both buyers and sellers. Both contact and financing inquiries on our platform are increasing significantly."

CBRE (July 8, 2024)

"Increasing shortage of core assets."
"Buyers have strong local expertise or are international investors who consider the reduced price levels and strong rent growth as an opportunity."

Deutsche Bank (July 8, 2024)

"Regulatory pressure is easing. First signs of increasing prices. Price discovery probably over soon."

BulwienGesa (April 14, 2024)

"Due to the continued stable demand and the limited increase in supply in the coming years, we consider the risk of further significant price corrections to be low."

Earnings \& Cash Flow Summary

	H1 2024	H1 2023 ${ }^{1}$	Delta (\%)
Adj. EBITDA Rental	1,191.6	1,209.0	$-1.4 \%$
Adj. EBITDA Value-add	56.8	44.1	$+28.8 \%$
Adj. EBITDA Recurring Sales	22.2	37.0	$-40.0 \%$
Adj. EBITDA Development	$-4.3$	9.7	-
Adj. EBITDA Total	1,266.5	1,299.8	$-2.6 \%$
Adj. Net Financial Result	$-320.5$	$-304.2$	$+5.4 \%$
Depreciation	$-55.9$	$-54.9$	$+1.8 \%$
Intragroup profit (-)/loss (+)	$-2.8$	5.1	-
Adj. Earnings before Taxes (EBT)	887.2	945.8	$-6.2 \%$
Adj. Earnings before Taxes (EBT) p.s. ${ }^{2}$	1.09	1.19	$-8.3 \%$
Adj. EBT attributable to minorities	82.9	63.3	$+31.0 \%$
Adj. Earnings before Taxes (EBT) after minorities	804.3	882.5	$-8.9 \%$
Adj. Earnings before Taxes (EBT) after minorities p.s. ${ }^{2}$	0.99	1.11	$-10.9 \%$
Depreciation	55.8	54.9	$+1.8 \%$
Capitalized maintenance	$-107.8$	$-106.7$	$+0.3 \%$
Cash taxes	$-57.3$	$-58.5$	$-2.3 \%$
Book value of sold assets (Recurring Sales only)	132.8	97.1	$+35.9 \%$
Development to Sell	Net working capital	3.8	$-153.0$
Dividends paid to JV minorities \& other	$-114.5$	$-15.1$	$>100 \%$
Operating Free Cash Flow (OFCF) ("Vonovia AFFO")	800.3	764.5	$+4.7 \%$
Operating Free Cash Flow (OFCF) ("Vonovia AFFO") p.s. ${ }^{2}$	0.98	0.96	$+2.4 \%$

• Rental Segment: 3.8\% organic rent growth; occupancy (97.8\%) and collection rate (99.6\%) continuously high.
• Profitability in Recurring Sales and Development to Sell remained negatively impacted by strategy to prioritize cash generation over profitability.
• Adjusted Net financial result was down by $€ 16 \mathrm{~m}$, largely impacted by full-year effect of 2023 refinancings.
• Increase in EBT minorities was attributable to the two Apollo JVs.
• Operating Free Cash Flow was impacted by dividend payments to JV partner (Q2 2024) on the one hand and by positive net working capital and higher recurring sales on the other hand.

[^0]
[^0]: ${ }^{1}$ Previous year's figures (H1 2023) adjusted to current tax figures and segment definition. ${ }^{2}$ Based on the weighted average number of shares carrying dividend rights.

Rental Segment

Rental KPIs Remain Highly Robust

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

Vacancy rate (eop, \%)

Jun 30, 2023
Jun 30, 2024

Organic rent growth (y-o-y, \%)
3.5	3.8
0.8	1.3
1.2
1.5	2.2
Jun 30, 2023 Mietspiegel/OVM ${ }^{3}$ Modernization New construction
Collection rate for rental income and all ancillary expenses (\%) ${ }^{1}$
99.9	99.6
H1 2023	H1 2024

Fluctuation rate (\%) ${ }^{1,2}$
7.7

H1 2023
8.1

H1 2024

Expensed and capitalized maintenance (€/sqm)

H1 2023
H1 2024

Capitalized maintenance
$\square$ Expensed maintenance

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

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

• Average reversionary potential for Vonovia's current in-place rent of up to $37 \%$ vs. Vonovia reletting rent and $96 \%$ vs. real market reletting rents.
• For Vonovia's largest market, Berlin, average reversionary potential of up to $50 \%$ vs. Vonovia reletting rent and $175 \%$ vs. real market reletting rents.
• Wide disparity of gross initial yields based on in-place values.
• Structural supply/demand imbalance keeps upward pressure on real market rents, and Vonovia's rents are expected to follow on a robust long-term upward trajectory at an annual rate of ca. $4 \%$.

Germany (current rent level $€ / \mathrm{sqm}$ )

Financial KPIs

Still Slightly above Internal Target Ranges But Well under Control

• Pro forma cash position of $€ 4.0 \mathrm{bn}^{1}$ covers all near-term maturities.
• Debt KPIs under control to safeguard good investment grade rating.
• $\sim € 1.5$ bn bond financings ytd attracted huge demand.

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

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

Bank financing
Unsecured bonds

Rating Agency	Rating	Outlook	Last update
S\&P	BBB+	Stable	Jul. 3, 2024
Moody's	Baa1	Stable	Feb. 1, 2024
Fitch	BBB+	Stable	Mar. 28, 2024
Scope	A-	Negative	Jul. 2, 2024

[^0]
[^0]: ${ }^{1}$ Containing of 61.5 bn cash on hand (June 30, 2023) plus 60.8 bn loans signed but undrawn plus 61.7 bn disposals signed but not yet closed. In addition, Venecia has $€ 3 b n$ NCFCP (undrawn).

2024 Guidance Update

Upper End of Range for Organic Rent Growth, Adj. EBITDA Total, and Adj. EBT

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

• Well on track to successfully complete €3bn disposal program for 2024. Market is showing signs of improvement with gradually increasing transaction activity and growing general interest.
• Values appear to have reached trough levels and will allow us to stop playing defense no later than 2025.
• Positive rent growth momentum continues. Average real market rents in our locations are up to twice as high as our current inplace rents. This provides strong visibility on a very robust and long-term upward trajectory at an annual growth rate of ca. $4 \%$.

Agenda

FY2023 Results pages 3-12

Appendix pages 15-39

Appendix

15-26 Additional material H1 2024
27-31 Portfolio data
32-37 ESG
38 IR Contacts \& Financial Calendar
39 Disclaimer

Rental Segment

• Increased revenue driven by rental growth on a marginally smaller portfolio.
• Maintenance expenses higher $y$-o-y as a result of more stringent cash focus in 2023 and inflationary effects.
• Operating expenses temporarily driven by standard provisions relating to receivables for ancillary expenses. No changes observed in tenants' payment behavior.

Rental Segment (Cm)

Rental revenue

Maintenance expenses

Operating expenses

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

H1 2024	H1 2023¹	Delta
1,650.4	1,618.6	$+2.0 \%$
-225.3	-206.9	$+8.9 \%$
-233.5	-202.7	$+15.2 \%$
1,191.6	1,209.0	$-1.4 \%$

Rental revenue by geography

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

Avg. number of units ( 000 ) Cost per unit $\rightarrow$ Adj. EBITDA Operations margin
${ }^{1}$ Previous year's figures for H1 2023 adjusted to current key figures and segment definition. ${ }^{2}$ Adj. EBITDA Operations margin (Adj. EBITDA Rental + Adj. EBITDA Value-add - intragroup profits) / Rental revenue. Margin 2019 and beyond includes positive impact from JFKS 16. Cost per unit is defined as (Rental revenue - EBITDA Operations + Maintenance) / average no. of units, 2022 and onwards (no). Deutsche Wohnen:

Rent Growth

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

Regulation update

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

Jun. 30, 2023
Organic rent growth (y-o-y, \%)
Upper end of
$3.8-4.1$
range

Illustrative rent growth dynamics

	Scenario A	Scenario B	Scenario A	Scenario B
Avg. OVM ${ }^{1}$ growth assumption (2-year period)	$8 \%$	$10 \%$	Investment volume	€1bn
Annual impact	$4.0 \%$	$5.0 \%$	Blended net initial yield assumption	$6 \%$
VNA portfolio immediately eligible for rent increases	$\sim 50 \%$	$\sim 50 \%$	Incremental rent	€60m
Organic rent growth impact	$2.0 \%$	$2.5 \%$	Organic rent growth impact	$1.8 \%$

Subject to Kappungsgrenze ${ }^{3}$
${ }^{1}$ OVM (=local comparable rent) is defined by the Mietspiegel in most locations. It stipulates the rent level ( $€ / \mathrm{osm}$ ) that landlords are allowed to charge. ${ }^{2}$ Impact from Investment Program (Optimize Apartment, Upgrade Buildings and Space Creation). ${ }^{3}$ Maximum increase of $15 \%$ over three years ( $20 \%$ in some markets).

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

• Average reversionary potential for Vonovia's current in-place rent of up to $37 \%$ vs. Vonovia reletting rent and $96 \%$ vs. real market reletting rents.
• For Vonovia's largest market, Berlin, average reversionary potential of up to $50 \%$ vs. Vonovia reletting rent and $175 \%$ vs. real market reletting rents.
• Wide disparity of gross initial yields based on in-place values.
• Structural supply/demand imbalance keeps upward pressure on real market rents, and Vonovia's rents are expected to follow on a robust long-term upward trajectory at an annual rate of ca. $4 \%$.

Vonovia					Real market ${ }^{4}$		Delta between real market and Vonovia in-place rent
Regional Market	\% of total assets ${ }^{1}$	In-place rent $^{2}$	Reletting rent range ${ }^{3}$		Asking rent range ${ }^{5}$
Berlin	$30 \%$	7.67	8.67	11.53	14.88	21.07	0\%	100\%	150\%
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	$8 \%$	9.42	10.65	12.52	13.37	16.26
Southern Ruhr Area (Dortmund, Essen, Bochum)	$9 \%$	7.20	7.33	9.65	8.55	10.18
Rhineland (Cologne, Düsseldorf, Bonn)	$7 \%$	8.27	8.69	11.09	11.31	13.63
Dresden	$9 \%$	6.90	7.08	8.46	8.80	11.00
Hamburg	$4 \%$	8.26	8.85	11.49	12.49	15.22
Hanover	$5 \%$	7.56	7.95	10.16	9.82	11.83
Kiel	$5 \%$	7.55	8.06	10.61	10.42	12.63
Munich	$2 \%$	9.67	12.03	14.62	17.94	21.45
Stuttgart	$3 \%$	8.99	9.65	11.67	13.05	15.52
Northern Ruhr Area (Duisburg, Gelsenkirchen)	$5 \%$	6.59	6.99	8.55	7.39	8.64
Leipzig	$3 \%$	6.77	6.97	8.69	8.67	10.72
Bremen	$2 \%$	6.87	7.72	8.63	10.39	12.36
Westphalia (Münster, Osnabrück)	$2 \%$	7.25	8.30	9.35	9.53	11.50
Freiburg	$1 \%$	8.60	9.19	11.79	13.81	16.99			Lower end
Other Strategic Locations	$6 \%$	7.58	7.97	10.00	10.05	11.95
Non-Strategic Locations	$1 \%$	7.17	7.97	9.94	10.12	11.89
Total Germany	100\%	7.73	8.39	10.57	11.80	15.15
Gross initial yield		$4.2 \%$	$4.5 \%$	$5.7 \%$	$6.3 \%$	$8.1 \%$

[^0]
[^0]: ${ }^{1}$ Residential Germany (based on no. of units). ${ }^{2}$ Vonovia average in-place rent as of Q2 2024. ${ }^{3}$ Lower end of range: reletting rent without invest; upper end of range: reletting rent with invest. ${ }^{4}$ Source: Value Marktdatenbank (formerly empirica-systeme), Q2 2024. Market data reflects the weighted average for Vonovia's Gormet portfolio. Asking rents excluding furnished apartments and new constructions. ${ }^{5}$ Lower end: median (proxy for reletting without invest); upper end: $80 \%$ percentile (proxy for reletting with invest).

Investment Program

Average net initial yield of 6-7\%

Value-add Segment

• External revenues down mainly due to price adjustments in energy sales, which were passed on to our tenants.
• Internal revenues up, largely driven by craftsmen organization.
• Expansion of solar energy expected to be a key driver of external revenue growth.

Potential from Energy generation capacity (MWp)

Recurring Sales Segment

• Volumes largely back to pre-crisis level.
• High demand in the context of housing shortage.
• Prioritization of volume and capital release over profitability.
  

Recurring Sales Segment (Cm)	H1 2024	H1 2023	Delta
Units sold	921	628	$+46.7 \%$
Revenue from recurring sales	163.9	141.4	$+15.9 \%$
Fair value	$-132.0$	$-97.1$	$+35.9 \%$
Gross profit	31.9	44.3	$-28.0 \%$
Fair value step-up	24.2\%	45.6\%	$-21.4 p p$
Selling costs	$-9.7$	$-7.3$	$+32.9 \%$
Adj. EBITDA Recurring Sales	22.2	37.0	$-40.0 \%$
Free Cash ${ }^{1}$	133.3	116.5	$+14.5 \%$
Cash conversion ${ }^{2}$	81\%	82\%	$-1.0 p p$

[^0]
[^0]: ${ }^{1}$ Revenue minus selling costs minus taxes. ${ }^{2}$ Free cash in relation to revenue. ${ }^{3} 2018$ onwards also including Recurring Sales in Austria

Development Segment

• Gross margin of $15 \%$ in a challenging market.
• Focus remains on liquidity generation over price optimization.
• 2024 investments volume of $\sim € 700 \mathrm{~m}$ to finish ongoing development to sell projects.
• Development to sell projects worth $\sim € 1$ bn to be completed and up for sale in 2024.

Development Segment (Cm)

Revenue from disposal of to-sell properties	70.1	218.3	$-67.9 \%$
Cost of Development to sell	$-59.6$	$-195.7$	$-69.5 \%$
Gross profit Development to sell	10.5	22.6	$-53.5 \%$
Gross margin Development	$15.0 \%$	$10.4 \%$	$+4.6 p p$
Rental revenue Development	3.1	2.3	$+34.8 \%$
Operating expenses Development	$-17.7$	$-15.2$	$+16.4 \%$
Adj. EBITDA Development	$-4.1$	9.7	-

[^0]
[^0]: 1 In prior years, the Adjusted EBITDA Development included the fair value step-up for properties completed in the reporting period that were transferred to Vonovia's own portfolio. At the end of the fourth quarter of 2023, the reporting of earnings contributions from Development to Hold was changed and is now excluded from the Development Segment. All earnings contributions from Development to Hold are recognized in the valuation result and therefore subside of the Adjusted EBITDA. This change ensures alignment with the IPRS standard on the fair value measurement of investment properties (1654R). The previous year's figures were adjusted accordingly.

EPRA NTA

EPRA NTA (Cm) (unless indicated otherwise)	Jun. 30, $2024$	Dec. 31, 2023	Delta
Total equity attributable to Vonovia shareholders	24,595.2	25,682.7	$-4.2 \%$	- Deferred tax liabilities are the calculated tax expenses on the delta between (IFRS) fair values and (local GAAP) tax values, which reflect the probable tax effect in the event of a sale.
Deferred tax in relation to FV gains of investment properties	13,474.0	13,895.3	$-3.0 \%$	- Deferred tax liabilities are taxes owed but not payable unless the relevant properties are actually sold.
FV of financial instruments	$-42.2$	$-13.4$	$>100 \%$	- Vonovia only adds back deferred taxes for core assets.
Goodwill as per IFRS balance sheet	$-1,391.7$	$-1,391.7$	-	- Deferred tax liabilities of disposal assets (Non-core, MFH, Recurring Sales) are not added back.
Intangibles as per IFRS balance sheet	$-31.6$	$-32.0$	$-1.3 \%$
EPRA NTA	36,603.7	38,140.9	$-4.0 \%$
NOSH (million)	822.9	814.6	$+1.0 \%$
EPRA NTA (C/share)	44.48	46.82	$-5.0 \%$

Debt Structure

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

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

Bond Covenants

Bond covenants

LTV

(Total financial debt / total assets)

Secured LTV

(Secured debt / total assets)

ICR
(LTM Adj. EBITDA / LTM net cash interest)

Unencumbered assets

(Unencumbered assets / unsecured debt)
$>125 \%$

Current level
(Jun. 30, 2024)

On the current total financial debt level, fair values would have to drop $\sim 24 \%$ for the LTV to cross $60 \% .{ }^{1}$

On the current secured debt volume, fair values would have to drop $\sim 78 \%$ for the secured LTV to cross $45 \% .{ }^{1}$

On the current EBITDA level, interest expenses would have to increase $101 \%$ to ca. $€ 1.4 \mathrm{bn}$ for the ICR to fall below $1.8 \mathrm{x} .^{2}$

On the current unsecured debt level, fair values would have to drop $24 \%$ for the unencumbered assets ratio to fall below $125 \% .^{3}$

[^0]
[^0]: ${ }^{1}$ Headroom calculations are based on sensitivities regarding changes in investment properties, not total assets, while all other variables are kept unchanged. ${ }^{2}$ Headroom calculations are based on sensitivities regarding changes in net cash interest in relation to Adj. EBITDA, while all other variables are kept unchanged. ${ }^{3}$ Headroom calculations are based on sensitivities regarding changes in unencumbered investment properties.

EBT, OFCF and Dividend Expectations
New KPIs at a Glance

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

Yield Dispersion between Reported and Implied Numbers

	Based on P\&L and balance sheet (H1 2024)	Based on share price (June 30, 2024)
Gross rental yield	4.2\% Rental income ${ }^{1} /$ FV	5.3\% Rental income ${ }^{1}$ / implied EV ${ }^{2}$
Net rental yield	3.4\% Gross yield * 80\% margin	4.2\% Gross yield * 80\% margin
Adj. EBITDA yield	3.4\% Adj. EBITDA Total ${ }^{1}$ FV	4.3\% Adj. EBITDA Total ${ }^{1}$ / implied EV ${ }^{2}$
Adj. EBT Yield	4.4\% Adj. EBT ${ }^{1}$ / EPRA NTA	7.4\% Adj. EBT ${ }^{1}$ / market cap
Dividend Yield	2.7\% FY2024 dividend estimate / EPRA NTA	4.6\% FY2024 dividend estimate / share price
TSR	10.9\% (Dividend + organic value growth) ${ }^{3}$ / NTA	18.3\% (Dividend + organic value growth) ${ }^{3}$ / market cap
FV (€/sqm)	2,215 Fair value / sqm	1,762 Implied EV² / sqm

[^0]
[^0]: ${ }^{1}$ Based on 2024 guidance, EBT after properties. ${ }^{2}$ EV = enterprise value (calculated as net debt plus market cap). ${ }^{3}$ Calculated as $-\$ 100$ dividend capacity plus $-\$ 200$ organic value growth (from rental growth, if market yields are stable).

Population Growth In Germany In Urban Areas

Vonovia Has Actively Managed Its Geographic Exposure to Urban Areas

The Future of housing is in urban areas...

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

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

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

2021
2023

[^0]
[^0]: ${ }^{1}$ German Federal Statistics Office, Stomario 3, assuming moderate development for birth \& life expectancy and high migration balance. ${ }^{2}$ Federal Labor Agency. ${ }^{3}$ Of which 606 outside Germany, ${ }^{4}$ www.ouhnwetterkarte.de by had and bukebergena.

Regional Markets
Balanced Exposure to Relevant Growth Regions

	Fair value ${ }^{1}$				In-place rent
Regional Markets (June 30, 2024)	(K/m)	(€/aym)	Residential units	Vacancy (\%)	Total (p.a., Km)	Residential (p.a., Km) ${ }^{2}$	Residential (€/aym/ month) ${ }^{3}$	Organic rent growth (y-w-y, \%)	Multiple (in-place rent)	Purchase power index (market data) ${ }^{4}$	Market rent increase forecast (Y-SIL)
Berlin	23,414.6	2,657	143,064	0.8	818	781	7.67	3.9	28.6	86.0	2.3
Rhine Main Area (Frankfurt, Darmstadt, Wiesbaden)	6,501.6	2,748	36,479	2.6	266	254	9.42	2.2	24.4	102.2	2.2
Southern Ruhr Area (Dortmund, Essen, Bochum)	5,076.8	1,885	42,921	2.6	229	223	7.20	3.3	22.2	89.2	1.8
Rhineland (Cologne, Düsseldorf, Bonn)	5,013.6	2,343	31,465	1.8	215	201	8.27	2.3	23.4	100.5	2.0
Dresden	4,871.6	1,831	43,506	2.4	218	203	6.90	2.4	22.3	86.5	2.0
Hamburg	3,195.0	2,470	20,095	1.6	129	123	8.26	3.9	24.8	96.8	2.1
Hanover	2,766.4	1,934	22,067	2.4	129	123	7.56	3.0	21.4	90.1	2.0
Kiel	2,744.2	1,849	25,103	1.7	134	128	7.55	5.0	20.5	75.9	2.0
Munich	2,693.3	3,868	10,383	1.3	81	77	9.67	4.4	33.3	119.2	2.3
Stuttgart	2,237.5	2,624	13,155	1.7	92	88	8.99	2.5	24.4	102.0	2.1
Northern Ruhr Area (Duisburg, Gelsenkirchen)	2,018.6	1,333	24,314	2.7	119	115	6.59	3.4	17.0	80.5	1.5
Leipzig	1,920.8	1,890	14,373	3.2	80	74	6.77	4.7	23.9	79.5	2.0
Bremen	1,402.8	1,925	11,688	2.1	60	57	6.87	4.2	23.5	83.2	2.0
Westphalia (Münster, Osnabrück)	1,090.7	1,761	9,412	2.6	53	52	7.25	3.2	20.6	89.8	1.9
Freiburg	723.8	2,639	3,849	1.1	29	27	8.60	2.0	25.2	86.5	2.0
Other Strategic Locations	3,366.8	1,876	27,278	3.3	162	152	7.58	2.7	20.8		2.0
Total Strategic Locations	69,038.2	2,273	479,152	1.9	2,813	2,678	7.73	3.3	24.5		2.1
Non-Strategic Locations	491.8	1,645	3,074	4.9	29	17	7.17	2.1	16.8		1.9
Total Germany	69,038.8	2,387	483,526	1.9	2,842	2,695	7.73	3.5	24.5		2.1
Vonovia Sweden	6,259.4	2,041	39,635	4.6	365	339	10.51	6.6	17.1		2.1
Vonovia Austria	2,710.0	1,590	21,020	4.9	126	100	5.66	6.0	21.5		1.7
Total	78,499.3	2,225	542,881	2.2	3,333	3,134	7.86	3.8	23.5		2.1

${ }^{1}$ Fair value of the developed land excluding $€ 4.0$ m , of which $€ 0.3$ m for underecipped land and inheritable building rights granted; $€ 0.3$ m for assets under construction, $€ 2.2$ m for development; $€ 0.5$ m for nursing portfolio (Discontinued Operations) and $€ 0.5$ m for other. ${ }^{2}$ Source: GfK (2024). Data refers to the specific cities indicated in the table, weighted by the number of households where applicable. ${ }^{3}$ Based on the country-specific definition. In-place rents in Austria and Sweden are not fully comparable to Germany, as Sweden includes ancillary costs and Austria includes maintenance and property improvement contributions from tenants. The table above shows the rental level unadjusted to the German definition.

Portfolio Clustering

Maintenance vs. Investments

• Heterogeneous disclosure in the sector.
• Vonovia provides best-in-class transparency and distinguishes between
  A. Maintenance expense
  B. Capitalized maintenance
  C. Modernization (yielding investments)
  
  

Comparison suggests that affordability remains high compared to other jurisdictions. This view is further confirmed by the fact that the number of hardship cases in our portfolio is declining from an already low level.

In an effort to mitigate the financial burden from increased cost of living, the government has put in place various support schemes and subsidies with an aggregate amount of ca. $€ 300$ bn.

The Federal Finance Ministry calculated the financial benefit of different types of households to show what the impact of the government assistance is on individual families.

Average subsidies \& benefits ${ }^{3}(\mathbb{C})$

[^0]
[^0]: Average household income net of taxes (source: Federal Statistics Office; 2022 data based on microcensus). Average number of persons per household in Germany is 2.03 (Federal Statistics Office). ${ }^{3}$ Calculated as $€ 7.63 / \mathrm{sqrt} / \mathrm{month}(+10 \%$ for reletting case and $+30 \%$ for optimize apartment case, respectively) plus $€ 3.464$ average total ancillary costs. ${ }^{4}$ Source: Handelsblatt based on data provided by the Federal Finance Ministry.

Our Business Is Supported by Megatrends...

...But the Current Environment is a Short-term Challenge

• In addressing the inflation caused by the Russian war on Ukraine, central banks around the world had increased interest rates at an unprecedented speed.
• The drawback of Vonovia's stable business model in a regulated market is that it reacts only slowly to the new environment, and the initial impact on our KPIs has been negative.
• However, the new environment also accelerates the relevant megatrends around which we have built our business, leading to even stronger fundamentals in the medium- and long-term.

Urbanization \& Supply/Demand Imbalance

Expected demand, permits, completions ('000 units) ${ }^{1}$

[^0]
[^0]: Adapted from 20A Forward based on Empirica and Pested Institute, "Agora Energiewende (2023). "The Energiewende in Deutschland. Stand der Dinge 2022. Rückblick auf die wesentlichen Entwicklungen sowie Ausblick auf 2023."

Megatrends

Three Dominant Megatrends in Residential Real Estate

Supply-/ Demand Imbalance

Climate Change

Demographic Change

€100bn investment volume every year to complete

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

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

Shortage of 2 million apartments

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

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

Commitment to Sustainability

• Accelerated decarbonization with near $\mathrm{CO}_{2}$ neutrality by 2045.
• Following CRREM MFH 1.5 degree pathway.

• Including Scope 1, 2 and 3.3.
  

• SBTi's has classified Vonovia's scope 1 and 2 target ambition and has determined that it is in line with a $1.5^{\circ} \mathrm{C}$ trajectory.

• SBTi commends our $1.5^{\circ} \mathrm{C}$-aligned target, currently the most ambitious designation available through the SBTi process.
• Vonovia is one of six companies in Germany's property sector to be validated by the Science Based Targets initiative (SBTi).
• According to CDP, Vonovia is recognized as one of the world's leading companies in climate protection measures and has been awarded an A- rating for best practices.
  

DRIVING AMBITIOUS CORPORATE CLIMATE ACTION

2021

2030

$\begin{array}{ll}2024-08-01 & | \text { H1 } 2024 \text { Earnings Call }\end{array}$

Energy Efficiency Classes

Vonovia Is Ahead of the Market with Substantial Progress since IPO

Recognition of ESG Performance

ESG Ratings and Indices

IR Contact \& Financial Calendar

Contact

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

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

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

Simone Kaßner
(Primary contact for private investors, ESG)
+492343141140
simone.kassner@vonovia.de

Financial Calendar 2024

Sep 3	HSBC Milan Day, Milan (IR only)
Sep 4	CoBa \& ODDO BHF Corporate Conference, Frankfurt (IR only)
Sep 11\&12	BofA Securities 2024 Global Real Estate Conference, New York
Sep 23	Goldman Sachs \& Berenberg German Corporate Conference, Munich
Sep 24	Baader Investment Conference, Munich (IR only)
Sep 26	Goldman Sachs European Real Estate Equity \& Debt Conference, London (IR only)
Nov 6	9M 2024 Results
Nov 13	UniCredit \& Kepler Pan-European Real Estate Conference, London
Nov 20	Berenberg Property Seminar, Paris
Nov 20	Kempen Generalist Conference, London
Nov 27	Société Générale Flagship Conference, Paris
Dec 4	UBS Global Real Estate CEO/CFO Conference, London
Dec 5	Berenberg European Conference, Pennyhill London
Dec 11-12	Jeffries Real Estate Conference, Miami (IR only)

Disclaimer

This presentation has been specifically prepared by Vonovia SE and/or its affiliates (together, "Vonovia") for internal use.
Consequently, it may not be sufficient or appropriate for the purpose for which a third party might use it.
This presentation has been provided for information purposes only and is being circulated on a confidential basis. This presentation shall be used only in accordance with applicable law, e.g. regarding national and international insider dealing rules, and must not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by the recipient to any other person. Receipt of this presentation constitutes an express agreement to be bound by such confidentiality and the other terms set out herein.

This presentation includes statements, estimates, opinions and projections with respect to anticipated future performance of Vonovia ("forward-looking statements") which reflect various assumptions concerning anticipated results taken from Vonovia's current business plan or from public sources which have not been independently verified or assessed by Vonovia and which may or may not prove to be correct. Any forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. Any forward-looking statements only speak as at the date the presentation is provided to the recipient. It is up to the recipient of this presentation to make its own assessment of the validity of any forward-looking statements and assumptions and no liability is accepted by Vonovia in respect of the achievement of such forward-looking statements and assumptions.

Vonovia accepts no liability whatsoever to the extent permitted by applicable law for any direct, indirect or consequential loss or penalty arising from any use of this presentation, its contents or preparation or otherwise in connection with it.

No representation or warranty (whether express or implied) is given in respect of any information in this presentation or that this presentation is suitable for the recipient's purposes. The delivery of this presentation does not imply that the information herein is correct as at any time subsequent to the date hereof.

Vonovia has no obligation whatsoever to update or revise any of the information, forward-looking statements or the conclusions contained herein or to reflect new events or circumstances or to correct any inaccuracies which may become apparent subsequent to the date hereof.

This presentation does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities of the Company nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement to enter into any contract or commitment or investment decision whatsoever.

This presentation is neither an advertisement nor a prospectus and is made available on the express understanding that it does not contain all information that may be required to evaluate, and will not be used by the attendees/recipients in connection with, the purchase of or investment in any securities of the Company. This presentation is selective in nature and does not purport to contain all information that may be required to evaluate the Company and/or its securities. No reliance may or should be placed for any purpose whatsoever on the information contained in this presentation, or on its completeness, accuracy or fairness.

This presentation is not directed to or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

Neither this presentation nor the information contained in it may be taken, transmitted or distributed directly or indirectly into or within the United States, its territories or possessions. This presentation is not an offer of securities for sale in the United States. The securities of the Company have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States. Consequently, the securities of the Company may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, into or within in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States unless registered under the Securities Act.

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