Deutsche Wohnen : Q1 Statement 2021

Consolidated Interim Statement as of 31 March 2021

For people. For tomorrow.

DEUTSCHE WOHNEN SE

1

CONSOLIDATED INTERIM STATEMENT

AS OF 31 March 2021

Contents

1. GROUP KEY FIGURES
2. GROUP INTERIM MANAGEMENT REPORT

28	CONSOLIDATED INTERIM FINANCIAL STATEMENTS
35	FURTHER INFORMATION

DEUTSCHE WOHNEN SEGroup key figures 2

CONSOLIDATED INTERIM STATEMENT

AS OF 31 March 2021

GROUP KEY FIGURES

Income statement				Q1 2021		Q1 2020		Change
Contracted rental income		EUR m	218.0	210.6	3.5%
Earnings from Residential Property Management		EUR m	193.1	186.4	3.6%
Earnings from disposals			17.6
before valuation gains due to disposals		EUR m	4.8	266.7%
Earnings from Nursing and Assisted Living		EUR m	19.6	20.6		-4.9%
Corporate expenses		EUR m		-24.8		-28.2		-12.1%
EBITDA (adjusted)		EUR m	208.6	187.8	11.1%
EBT (adjusted)		EUR m	160.2		127.7 3	25.5%
EBT (as reported)		EUR m	225.1	124.9	80.2%
Earnings after taxes		EUR m	199.7	125.4	59.3%
Earnings after taxes 1		EUR per share	0.57	0.35	64.9%
FFO I		EUR m	154.8		142.3 3	8.8%
FFO I (undiluted) 1		EUR per share	0.45		0.40 3	12.5%
FFO I (diluted) 1		EUR per share	0.45		0.40 3	12.5%
FFO II		EUR m	162.4		143.5 3	13.2%
FFO II (undiluted) 1		EUR per share	0.47		0.40 3	17.5%
FFO II (diluted) 1		EUR per share	0.47		0.40 3	17.5%
Balance sheet			31/03/2021	31/12/2020		Change
Investment properties		EUR m	28,243.9	28,069.5	174.4
Current assets		EUR m	1,493.3	1,745.9		-252.6
Equity		EUR m	14,040.9	13,832.8	208.1
Net financial liabilities		EUR m	11,018.9	10,840.1	178.8
Loan-to-Value ratio (LTV)		in %	37.3	37.0	0.3
Total assets		EUR m	30,708.0	30,797.4		-89.4
Share			31/03/2021	31/12/2020		Change
Share price (closing price)		EUR per share	39.78	43.69		-8.9%
Number of shares (without own shares)		m	343.77	343.77	0.0%
Market capitalisation (without own shares)		EUR bn	13.7	15.0		-8.7%
EPRA Net Tangible Assets (NTA)			31/03/2021	31/12/2020		Change
EPRA NTA		EUR m	18,054.4	17,844.4	1.2%
EPRA NTA		EUR per share	52.50	51.91	1.1%
Fair values			31/03/2021	31/12/2020		Change
Fair value properties 2		EUR m	26,089	26,168		-79
Fair value per sqm living and usable space 2		EUR per sqm	2,687	2,683	0.1%

1. Based on the weighted average of some 343.77 million shares in circulation in 2021 (without own shares) or some 354.53 million in 2020
2. Only includes residential and commercial buildings, without Nursing and Assisted Living and without right-of-use assets under leases measured according to IFRS 16
3. Previous year's figure changed due to exercise of IAS 23 option

DEUTSCHE WOHNEN SE	Group interim management report	3
CONSOLIDATED INTERIM STATEMENT	Deutsche Wohnen on the capital market
AS OF 31 March 2021

GROUP INTERIM MANAGEMENT

REPORT

Deutsche Wohnen SE, including its subsidiaries (hereinafter referred to as "Deutsche Wohnen" or "Group") is currently the second-largest publicly listed property company in Europe by market capitalisation. The company is listed in the DAX of the German stock exchange.

Its property portfolio comprises approximately 157,500 residential and

­commercial units and has a fair value of some EUR 26.1 billion 1. Our property portfolio also includes nursing properties with a fair value of around EUR 1.2 billion comprising approximately 10,300 beds and apartments for assisted living. The focus of our investment is on residential properties in metropolitan areas and conurbations in Germany. Economic growth, positive net immigration and insufficient new building activity in these regions form the basis for the further development of our portfolio value. We see the addition of nursing properties as another growth area, particularly in view of the demographic trends.

Deutsche Wohnen on the capital market

German economy continues to face major challenges

The global economy and the German economy alike are still being hit hard by the coronavirus pandemic. According to the estimates of the DIW Berlin (German Institute for Economic Research), business activity in Germany is not expected to return to anything approaching normality until summer 2021. 2

The ongoing lockdown in Germany and the phased plan agreed in early March 2021 to tackle the coronavirus pandemic continues to pose major challenges for the Germany economy. The associated conditions mean the recovery is much slower than predicted in late 2020. However, due to the robust industrial economy and recovery in foreign trade, the DIW expects Germany's economy to grow overall by around 3.0% in 2021. Growth of 3.8% is currently forecast for 2022. However, the inflation rate is expected to be unusually high, at 2.1% in 2021. Currently, the main drivers of inflation are significant oil price fluctuations, the rollback of the VAT cut at the beginning of the year, the introduction of national carbon pricing and recent major increases in energy prices. 2

The job market has yet to see any recovery year-on-year. For 2021, the unemployment rate is forecasted to remain at almost the same level, at an average of 5.8%. In 2022, however, this should fall to 5.0%. Short-time work made it possible to avoid a larger number of redundancies in Germany. Social security payments increased slightly over the course of the year as a result, particularly due to short-time working payments and the extended unemployment benefit period. Available household income is expected to grow moderately by around 2.0% this year. Later in the year, loosening of pandemic restrictions is predicted to result in a slight recovery in consumer spending; however, the DIW expects household consumption to remain at a low level for 2021 as a whole. 2

1. Excluding advance payments, units under construction and undeveloped land
2. DIW weekly report 11/2021: Basic economic trends in spring 2021

DEUTSCHE WOHNEN SE	Group interim management report	4
CONSOLIDATED INTERIM STATEMENT	Deutsche Wohnen on the capital market
AS OF 31 March 2021

Stock markets make dramatic recovery in early 2021

The strong recovery of the ifo business confidence and ISM indices, the progress of vaccination strategies, the additional coronavirus aid package in the US, and the announcement that the expansive monetary policy of the ECB and US Federal Reserve was set to continue had hugely positive effects on the stock markets. The negative impact of the extension of lockdown measures in Germany and France, global delays in vaccine supply and higher anticipated inflation for 2021 only affected the markets for a short period of time.

Deutsche Wohnen share struggles with regulatory uncertainty until the Federal Constitutional Court's rent freeze decision

The Deutsche Wohnen share closed the first quarter of 2021 at a closing price of EUR 39.78, representing a loss of approximately 8.9%. The share was therefore lower than Germany's DAX (+9.4%) and MDAX (+3.0%) indices. However, the real estate indices EPRA Europe (−0.9%) and EPRA Germany (-7.1%) also fell.

When the Federal Constitutional Court announced its rent freeze ruling on 15 April 2021, the share price shot up again to EUR 43.64 and quoted around 10% above the closing price in the first quarter of 2021.

The market capitalisation of Deutsche Wohnen SE rose year on year by approximately 13% to EUR 13.7 billion as of the end of the first quarter 2021. 3 Average turnover in Xetra trading fell over the three months by around 21% from

EUR 44.6 million to EUR 35.1 million. The average Xetra trading volume for the Deutsche Wohnen share in the first three months of 2021 was around 0.9 million shares a day.

Share price performance Q1 2021 (indexed)

120

110

100

90

80

January	February	March
1 Performance including dividend payment

  DAX: +9.4%

  MDAX: +3.0%

  EPRA Europe: -0.9%

  EPRA Germany: -7.1%

  Deutsche Wohnen 1: -8.9%

3 Taking into account 359.8 million outstanding shares minus 16.1 million own shares