H1 2022

Earnings Call.

August 3, 2022

H1 2022 Highlights

Another Quarter with Steady Delivery on Operational and Financial Performance; Further Progress on Capital Allocation

H1 2022

Results

  • Operational and financial performance fully in line with expectations
  • 3.4% organic rent growth
  • 2.2% vacancy rate (record low)
  • €1,402m Adj. EBITDA Total (+37.2%)
  • €1,063m Group FFO (+36.3%)
  • €1.34 Group FFO p.s. (+5.5%)
  • €1.28 Group FFO p.s. after non-controlling interests (+2.4%)
  • H1 valuation of ca. 3/4 of portfolio resulted in €3.8bn total value growth (+5.2% l-f-l)
    • €3.2bn from YC and performance (+4.8%)
    • €0.6bn from investments (+0.4%)
  • €64.89 EPRA NTA p.s. (+3.4%) pro forma and €62.54 including the technical impact from the new portfolio clustering (larger sale portfolio)
  • 43.3% LTV
  • 15.2x Net debt/EBITDA
  • SPI well on track with good progress especially on CO2 reduction and customer satisfaction

Business

Update

  • Leverage targets
    • LTV: towards lower end of 40-45% range
    • Net debt/EBITDA: ca. 14-15x
  • More active asset rotation with €13bn fair value now in dedicated long-term sales channels (excl. potential JV structures and Nursing1)
    • €5.5bn fair value in Recurring sales (Condo)
    • €6.3bn fair value in Recurring Sales (MFH)
    • €1.2bn fair value in Non-core
  • Investment options with a view towards maximizing IRRs currently include
    • Portfolio investments, value-add business, space creation
    • Debt redemption
    • Share buyback
  • Final investment decisions will be made based on available funding, leverage targets, and shareholder value growth

1 The management of Deutsche Wohnen is conducting a strategic review of the risks and opportunities of the nursing home segment. We understand that no decision has been taken and a disposal is one possible outcome.

2022-08-03 | H1 2022 Earnings Call

2

Agenda

1.

2.

3.

H1 2022 Results pages 4-17

Business Update pages 19-30

Appendix pages 32-59

Segment Overview

Absolute Growth Driven by DWNI Contribution and Development

1.

2.

3.

H1 2022 Results

Business Update

Appendix

€m (unless indicated otherwise)

H1 2022

H1 2021

Delta

Total Segment Revenue

3,111.0

2,312.3

+34.5%

Adj. EBITDA Rental

822.6

823.8

-0.1%

Adj. EBITDA Value-add

78.5

79.2

-0.9%

Adj. EBITDA Recurring Sales

74.1

83.5

-11.3%

Adj. EBITDA Development

85.4

35.3

>100%

Adj. EBITDA Deutsche Wohnen

341.4

-

-

Adj. EBITDA Total

1,402.0

1,021.8

+37.2%

FFO interest expenses

-236.4

-163.8

+44.3%

Current income taxes FFO

-60.1

-43.3

+38.8%

Consolidation1

-42.6

-34.9

+22.1%

Group FFO

1,062.9

779.8

+36.3%

of which non-controlling interests

41.0

10.5

>100%

Group FFO after non-controlling interests

1,021.9

769.3

+32.8%

Number of shares (eop)2

795.8

613.8

+29.6%

Group FFO p.s. (eop NOSH)2

1.34

1.27

+5.5%

Group FFO p.s. (after non-controlling

1.28

1.25

+2.4%

interests)2

Absolute growth largely driven by DWNI contribution. Vonovia stand- alone +9.5%.

Pro forma combination of Adj. EBITDA Deutsche Wohnen and Adj. EBITDA Rental reflects substantial growth following completion of the integration.

Deutsche Wohnen and strong development contribution drive absolute EBITDA growth already prior to synergy realization. Vonovia stand- alone €1,060.6 (+3.8%) despite ca. 6k fewer units.

Higher absolute volume as a result of DWNI acquisition.

Increase as a result of larger disposal volume.

Group FFO p.s. impacted by rights issue late in 2021.

1 Based on new definition 2022 without elimination of IFRS 16 effects. Comprised intragroup profits of €-13.7m (H1 2021: €-16.0m), gross profit of development to hold of €-28.9m (H1 2021: €-18.9m).2 H1 2021 TERP-adjusted (1.067) to reflect the impact of the 12/2021 subscription rights issue for the acquisition of Deutsche Wohnen.

2022-08-03 | H1 2022 Earnings Call

4

Rental Segment

Stable Rental Performance with Slightly Smaller Portfolio

1.

2.

3.

H1 2022 Results

Business Update

Appendix

  • excl. DWNI
  • Portfolio ca. 6k units smaller in H1 2022 compared to prior year.
  • Organic growth supported by new construction and modernization.
  • Further EBITDA margin expansion in H1.
  • Elevated operating expenses largely attributable to positive impact from reversing precautionary Covid-related provisions last year. The provisions had been built in H1'20 but were fully reversed in H1'21.
  • No synergies included yet.

Rental Segment (€m)

H1 2022

H1 2021

Delta

Rental revenue

1,188.7

1,170.5

+1.6%

Maintenance expenses

-166.8

-163.4

+2.1%

Operating expenses

-199.3

-183.3

+8.7%

Adj. EBITDA Rental

822.6

823.8

-0.1%

Rental revenue by geography

Austria

Sweden 5%

15%Germany

80%

Scale and efficiency gains in Germany1

830

76.5%

76.7%

78.3%

79.0%

754

73.6%

75.0%

645

71.4%

63.8%

498

445

405

60.8%

67.7%

570

394

343

179

184

324

343

346

361

357

355

354

351

2013

2014

2015

2016

2017

2018

2019

2020

2021

H1 2022

Avg. number of units ('000)

Cost per unit

Adj. EBITDA Operations margin

1 Adj. EBITDA Operations margin (Adj. EBITDA Rental + Adj. EBITDA Value-add - intragroup profits) / Rental revenue. Margin 2019 and beyond includes positive impact from IFRS 16. Cost per unit is defined as (Rental revenue - EBITDA Operations + Maintenance) / average no. of units.

2022-08-03 | H1 2022 Earnings Call

5

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Vonovia SE published this content on 03 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2022 05:11:08 UTC.