Vonovia SE: Continuous Stable Business Development is Basis for Binding Climate Course
/ Key word(s): 9 Month figures/Sustainability
Results as of September 30, 2020
- Vonovia adopts binding climate course with almost climate-neutral housing stock by 2050; annual savings targets transparent in new Sustainability Performance Index.
- Promotion to DAX 50 ESG and EURO STOXX 50 indices; top placement in Sustainalytics sustainability rating.
- Continued support for tenants in the event of financial difficulties resulting from the corona pandemic.
- Over 1,000 employees hired since March; more trainees than ever in the new training year.
- Guidance confirmed for 2020; positive business development also expected for 2021.
Bochum, Germany, November 4, 2020 - Vonovia SE ("Vonovia") formalized its path toward climate-neutral housing stock in the first nine months of the year. Its central approach is to facilitate an interaction between energetic modernization and carbon neutral heat generation. Alongside Fraunhofer institutes and the German Energy Agency, the Bochum-based residential real estate company developed goals for carbon-reduced living and invested heavily in energy-efficient modernization as well as the development and expansion of renewable energies.
"Aside from overcoming the coronavirus crisis, climate change is the greatest challenge of our time. Through increased energy efficiency in housing, we can make a significant contribution toward the Paris climate protection goals," says CEO Rolf Buch. "We are in a position to assume social and ecological responsibility since our company remains financially robust."
Vonovia takes responsibility for tenants - especially in view of the coronavirus pandemic, which has taken a turn for the worse. "The coronavirus will have an intense effect on our society for a long time to come. The promise we made in spring is still valid: No one who is experiencing financial difficulties because of the coronavirus will lose their home," says Rolf Buch. "It is important to us to provide our tenants with this kind of security in these uncertain times."
At the climate conference at the beginning of October, Vonovia also demonstrated how its ecological responsibility looks in real terms. Together with their research partners Fraunhofer Institute and the German Energy Agency, Vonovia presented central areas of action that can help manage the energy turnaround in the building sector and what changes are necessary to make it happen. At the core of the strategy are neighborhoods, where decentralized energy supplies will be built. The electricity, heating and mobility sectors will be linked so that energy can be generated, stored and used locally. The decentralized energy supply is also a priority at the innovation center in Bochum-Weitmar, which is expected to begin operating in the coming year. Vonovia has set itself the binding goal of achieving a climate-neutral building stock by 2050 through efficiency gains.
New Performance Index for Sustainability
Moreover, Vonovia is currently creating a Sustainability Performance Index which will be included in the company's most important non-financial key figures and which integrates sustainability goals into the management system. Indicators in the new index are the carbon savings achieved annually in housing stock, the respective share of energy-efficient new constructions and senior-friendly apartment conversions, customer and employee satisfaction and diversity in the company's management. "The new Sustainability Performance Index will stand on an equal footing with the financial performance indicators. We want to set a good example in the industry," explains Rolf Buch.
Continued Economic Stability
Group FFO also increased from January to September 2020 compared to the first nine months of 2019. The operating earnings power improved by 8.9% to € 1,015.9 million. In particular, the acquisition of Hembla in Sweden and organic growth through modernization and new construction contributed to this.
Furthermore, Vonovia issued new shares with an issue volume of
Provider of Affordable Housing
As of September 30, 2020, the portfolio contained 414,570 rental apartments owned by the company. The approximately 354,000 apartments in Germany represent a market share of around 1.5%. The Adjusted NAV (the value of the company without liabilities) increased to € 31,356.2 million and was therefore up 11.3% compared to the end of 2019. The fair value of the real estate portfolio rose to € 56,047.0 million. This increase of 17.3% can be attributed to the great demand for housing - which persisted during the coronavirus pandemic - and to the high investment volume. At the end of the third quarter of 2020, the portfolio was almost fully occupied, with a slightly lower vacancy rate of 2.6%. Increased income through the Hembla portfolio as well as organic growth also had an impact on rental income. In the first nine months of 2020, rental income amounted to € 1,706.9 million compared with € 1,527.0 million in the first nine months of 2019.
The lower fluctuation rate, the extension of the previous year period to six years for determination of the rent index and Berlin's rent freeze led to lower rental growth. The increase in rent due to market-related factors came to 0.8%. There was a 2.2% rent increase due to investments in modernization and a 0.6 % increase due to new construction and vertical expansion. For 2020 as a whole, Vonovia also expects restrained rental development. Vonovia's monthly net rent in Germany was € 6.91/m² on average at the end of September 2020.
Vonovia uses active hardship management to find solutions for tenants experiencing financial difficulties. Since the introduction of hardship management and the regulation for over-70s, Vonovia has helped tenants in more than 2,800 cases by deciding in their favor. Additional petitions are currently being processed.
Energy-Efficient Modernization of More Than 10,000 Apartments
Investments in maintenance, modernization and new construction (for the company's own portfolio) from January to September 2020 amounted to € 1,360 million in modernization measures and were therefore 4.5% more than the previous year's period. Expenses for maintenance came to € 399.1 million. Vonovia invested € 659.7 million in modernization and € 301.2 million in new construction (for the company's own portfolio), which is an increase of almost 20%.
Forecast for 2020 as a Whole Confirmed
The stable economic development of our business in the first nine months also means that the forecast for 2020 as a whole remains positive. Vonovia expects that the coronavirus pandemic will continue to have no significant impact on the four business areas. This means that the Adjusted EBITDA Total will likely be within the most recently published range of € 1,875 million to € 1,925 million. The forecast for Group FFO is even expected to be in the upper end of the range of € 1,275 million to € 1,325 million. Vonovia expects a further increase in value from valuations and investments of € 2,300 million to € 2,900 million in the second half of 2020.
The company plans to propose a dividend of € 1.69 per share to the shareholders at the Annual General Meeting in May 2021. This corresponds to an increase of € 0.12 and a dividend yield of 3.1% based on the closing price on October 30, 2020.
In 2021, Vonovia will continue to address the great social challenges of climate protection, demographic change and affordable housing. The company plans to once again make comprehensive investments in modernization and new construction, in a range likely between € 1,300 million and € 1,600 million. Adjusted EBITDA Total is expected to be between € 1,975 million and € 2,025 million. Assuming a stable legal position, Vonovia expects a Group FFO between € 1,415 million and € 1,465 million.
Report on the First Nine Months of 2020:
Financial Calender 2021:
* Based on the shares carrying dividend rights on the reporting date in question: Sep. 30, 2019: 542,273,611, Sep. 30, 2020: 565,887,299.
Vonovia SE is Europe's leading private residential real estate company. Vonovia currently owns around 415,000 residential units in all attractive cities and regions in Germany, Sweden and Austria. It also manages around 73,000 apartments. Its portfolio is worth approximately € 56.0 billion. As a modern service provider, Vonovia focuses on customer orientation and tenant satisfaction. Offering tenants affordable, attractive and livable homes is a prerequisite for the company's successful development. Therefore, Vonovia makes long-term investments in the maintenance, modernization and senior-friendly conversion of its properties. The company is also creating more and more new apartments by realizing infill developments and adding to existing buildings.
The company, which is based in Bochum, has been listed on the stock exchange since 2013. Since September 2015 Vonovia has been a constituent in the DAX 30 and since September 2020 in the EURO STOXX 50. Vonovia SE is also a constituent of additional national and international indices, including DAX 50 ESG, STOXX Global ESG Leaders, EURO STOXX ESG Leaders 50, STOXX Europe ESG Leaders 50, FTSE EPRA/NAREIT Developed Europe, and GPR 250 World. Vonovia has a workforce of more than 10,000 employees.
This press release has been issued by Vonovia SE and/or its subsidiaries solely for information purposes. This press release may contain statements, assumptions, opinions and predictions about the anticipated future development of Vonovia ("forward-looking statements") that reproduce various assumptions regarding, e.g., results derived from Vonovia's current business or from publicly available sources that have not been subject to an independent audit or in-depth evaluation by Vonovia and that may turn out to be incorrect at a later stage. All forward-looking statements express current expectations based on the current business plan and various other assumptions and therefore come with risks and uncertainties that are not insignificant. All forward-looking statements should not therefore be taken as a guarantee for future performance or results and, furthermore, do not necessarily constitute exact indicators that the forecast results will be achieved. All forward-looking statements relate solely to the day on which this press release was issued to its recipients. It is the responsibility of the recipients of this press release to conduct a more detailed analysis of the validity of forward-looking statements and the underlying assumptions. Vonovia accepts no responsibility for any direct or indirect damages or losses or subsequent damages or losses, as well as penalties that the recipients may incur by using the press release, its contents and, in particular, all forward-looking statements or in any other way, as far as this is legally permissible. Vonovia does not provide any guarantees or assurances (either explicitly or implicitly) in respect of the information contained in this press release. Vonovia is not obliged to update or correct the information, forward-looking statements or conclusions drawn in this press release or to include subsequent events or circumstances or to report inaccuracies that become known after the date of this press release.
File: Vonovia_Continuous Stable Business Development is Basis for Binding Climate Course_PI_20201104
04.11.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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