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Vonovia SE: Vonovia Begins Year Very Successfully - Economies of Scale with Impact Lead to Improved Forecast for 2016

DGAP-News: Vonovia SE / Key word(s): Quarter Results/Real Estate

2016-05-12 / 07:05
The issuer is solely responsible for the content of this announcement.

Vonovia Begins Year Very Successfully - Economies of Scale with Impact Lead to Improved Forecast for 2016

Consolidation Effects Make Faster Impact Than Expected - Profit From Operations Significantly Increased in the First Quarter of 2016

- FFO 1 up by 58 % to EUR 186 million; FFO 1 comes to EUR 0.40 per share (Q1 2015: EUR 0.32).

- EPRA NAV stands at EUR 14 billion; EPRA NAV per share at EUR 30.15.

- Vacancy rate further down to 2.8 % as of the end of the quarter (Q1 2015: 3.4 %); moderate rental increases of 2.9 % compared to Q1 2015.

Successful Start Leads to Improved Forecast for the 2016 Fiscal Year

- FFO 1 expected to increase by 20 % compared to 2015 to between EUR 720 million and EUR 740 million (Forecast March 2016: between EUR 690 million and EUR 710 million); FFO 1 per share of between EUR 1.55 and EUR 1.59.

- Dividend of EUR 1.05 per share planned in 2016; 12 % higher than in 2015.

Further Increase in Investments in Real Estate Portfolio

- Investment in maintenance and modernization services climbs to EUR 125 million in Q1 2016 (Q1 2015: EUR 98 million).

- Record investments of up to EUR 830 million in modernization, new construction and maintenance planned for 2016.

Bochum, Germany, May 12, 2016 - Vonovia SE ("Vonovia") is building on the extremely strong performance of the previous year and has improved all key figures in the first three months of the year. On the basis of these results, Vonovia is improving its forecast for the 2016 fiscal year.

"The successful start to the 2016 fiscal year shows that we can excellently realize economies of scale on the basis of our platform. We are very confident about developments in the remainder of the fiscal year and that is why we have improved our forecast," says Rolf Buch, CEO.

Profit From Operations Increases Once Again in the First Quarter of 2016

As a key figure, FFO 1 (funds from operations, profit from operations after current interest and taxes) rose by 58 % to EUR 186.3 million in the first quarter of 2016 (Q1 2015: EUR 118.0 million). This represents a figure per share of EUR 0.40 (Q1 2015: EUR 0.32). EPRA NAV (net asset value, real estate assets without liabilities) stood at EUR 14,048.2 million at the end of the first quarter of 2016, up slightly on the end of the 2015 fiscal year. The EPRA NAV per share amounted to EUR 30.15 (Dec. 31, 2015: EUR 30.02). As of March 31, 2016, the LTV (loan-to-value) ratio was down to 45.8 % (46.9 % as of the end of 2015). Due to the current attractive interest rate environment, Vonovia believes that it will be able to refinance its commitments below its current average financing costs and therefore further reduce future interest payments.

Profit for the period increased to EUR 79.2 million (previous year: EUR 30.3 million).

The Extension segment pools the various housing-related services that Vonovia offers its approximately one million customers. These include those performed by our own craftsmen's organization, the upkeep of the residential environment, the cable TV business, measuring the consumption of water and heating as well as condominium administration. Vonovia successfully integrated two companies that it acquired with effect from January 1, 2016 - IVV Immobilien Verwaltung GmbH and O-TEC Hausverwaltung GmbH - into the Extension segment. Adjusted EBITDA in this segment rose by 38 % to EUR 7.6 million (Q1 2015: EUR 5.5 million).

Further Successful Optimizations to the Real Estate Portfolio

With effect from January 1, 2016, Vonovia acquired some 2,400 apartments, primarily in the German states of Baden-Württemberg and Bavaria. As of the end of the quarter, Vonovia managed a total of about 400,000 apartments in attractive cities and regions in Germany, around 344,000 of which it owned itself and around 54,000 it managed on behalf of third parties. The 344,000 or so apartments the company owns itself have a portfolio value of approximately EUR 24 billion. The vacancy rate in the company's own portfolio fell by 0.6 percentage points in comparison with the reporting date for the prior period and was at a very low level of 2.8 % on March 31, 2016.

In the reporting period, Vonovia sold a total of some 15,550 apartments, 13,570 as a total portfolio to the LEG Group. Vonovia strives to continuously enhance its real estate portfolio and prefers to sell apartments from the "Non-Strategic" and "Non-Core" portfolios.

By virtue of the disposals and the low vacancy rate, rental income in the Rental segment increased by 49 % to EUR 392.0 million in the reporting period (Q1 2015: EUR 263.6 million). As an objective key figure used to compare the same housing stocks, monthly in-place rent developed positively, increasing by 2.9 % on a like-for-like basis to EUR 5.76 (Q1 2015: EUR 5.60).

Forecast Improved for the 2016 Fiscal Year

On the basis of the positive course of business in the first three months of the current year, Vonovia is improving its forecast for 2016. Before the adjustment, the FFO 1 target corridor for the fiscal year was between EUR 690 million and EUR 710 million. In respect of FFO 1, now an increase of 20 % is expected compared with 2015, taking the total to between EUR 720 million and EUR 740 million. This works out at an expected FFO 1 per share of between EUR 1.55 and EUR 1.59. By the end of the year, Vonovia also expects the EPRA NAV per share to have risen to up to EUR 31.

For the 2015 fiscal year, the Management Board will propose a dividend in the amount of EUR 0.94 per share at the Annual General Meeting. This corresponds to an attractive dividend yield of 3.3 %, based on the closing share price in 2015. The policy of allowing shareholders to share in the company's success remains unchanged. For 2016, Vonovia plans to distribute a dividend of EUR 1.05 per share. This represents a further increase of roughly 12 %.

Vonovia Share Price Increases

As of the balance sheet date of March 31, 2016, the price of the Vonovia share stood at EUR 31.63 and therefore increased by about 11 % in the first quarter of 2016, based on a closing price of EUR 28.55 on December 31, 2015. This means that Vonovia's shares deviated positively from the overall trend on the DAX, which fell by around 7 %, from 10,743 to 9,965 points, during the same period. Its market capitalization of around EUR 14.7 billion puts Vonovia in 23rd place among the most valuable listed companies in Germany.

Renewed High Investments in the Real Estate Portfolio

Vonovia improves the quality of its properties on an ongoing basis and invested a total of EUR 125.4 million in its portfolio in the first quarter of 2016 (Q1 2015: EUR 97.5 million). EUR 73.5 million of this was attributable to maintenance (Q1 2015: EUR 62.3 million) and EUR 51.9 million to modernization (Q1 2015: EUR 35.2 million).

An investment volume of about EUR 330 million is planned for maintenance in the 2016 fiscal year. The investment program for modernization and new construction is set to grow to between EUR 430 million and EUR 500 million. Our focus will once again lie on energy efficiency measures, improving the standard of comfort that our apartments offer and senior-friendly apartment renovations. We will be doing more in terms of modernization at the tenant's request and neighborhood development, as well as in the area of infill developments and adding on to existing developments. In total, this means an investment volume of up to EUR 38 per m² for modernization and maintenance alone (2015: EUR 33 per m²).

The company also wishes to further improve customer satisfaction in the current year; the aim is to increase the relevant index (CSI) by up to 5 % compared to the 2015 level.

The 2016 Q1 report can be accessed at Further information can be found in the press section of the company's website.

2016/2017 Financial Calendar

August 2, 2016: Interim Report H1 2016

November 3, 2016: Interim Report Q3 2016

March 7, 2017: Publication of 2016 Annual Report


in EUR million            
Financial Key Figures   3M 2016   3M 2015   Change
in %
Rental income from property management   392.0   263.6   48.7
Income from disposal of properties   690.5   123.0   461.4
Adjusted EBITDA Rental   269.0   177.1   51.9
Adjusted EBITDA Extension   7.6   5.5   38.2
Adjusted EBITDA Sales   35.0   9.5   268.4
Adjusted EBITDA   311.1   192.0   62.0
Modernization and maintenance services   125.4   97.5   28.6
thereof for maintenance and capitalized maintenance   73.5   62.3   18.0
thereof for modernization   51.9   35.2   47.4
FFO 1   186.3   118.0   57.9
FFO 2   195.1   125.2   55.8
FFO 1 per share in EUR*   0.40   0.32   26.1
Profit for the period   79.2   30.3   161.4
in EUR million            
Key Balance Sheet Figures   Mar. 31, 2016   Dec. 31, 2015   Change
in %
Fair value of the real estate portfolio   23,814.4   24,157.7   -1.4      
EPRA NAV   14,048.2   13,988.2   0.4      
EPRA NAV per share in EUR*   30.15   30.02   0.4      
Adjusted EPRA NAV   11,331.6   11,273.5   0.5      
Adjusted EPRA NAV per share in EUR*   24.32   24.19   0.5      
LTV in %**   45.8   46.9   -1.1 pp      
Non-Financial Key Figures   3M 2016   3M 2015   Change
in %
Number of units managed   398,331   387,712   2.7        
thereof own apartments   343,967   345,629   -0.5        
thereof apartments owned by others   54,364   42,083   29.2        
Number of units bought   2,417   144,602   -98.3        
Number of units sold   15,551   2,489   524.8        
thereof Privatize   890   553   60.9        
thereof Non-Core   14,661   1,936   657.3        
Vacancy rate in %   2.8   3.4   -0.6 pp        
Monthly in-place rent in EUR/m²   5.84   5.53   5.6        
Monthly in-place rent in EUR/m² (like for like)***   5.76   5.60   2.9        
Number of employees (as of March 31)   6,683   5,737   16.5        
*Based on the shares carrying dividend rights on the reporting date Mar. 31, 2016: 466,000,624; Mar. 31, 2015: 354,106,228; prior-year value TERP-adjusted

**Based on the shares carrying dividend rights on the reporting date Mar. 31, 2016: 466,000,624; Dec. 31, 2015: 466,000,624

*** Incl. GAGFAH excl. Franconia/SÜDEWO

About Vonovia

Vonovia SE is Germany's leading nationwide residential real estate company. Vonovia currently owns and manages around 344,000 residential units in all of Germany's attractive cities and regions. Its portfolio is worth approximately EUR 24 billion. An additional 54,000 or so third-party apartments are also managed by Vonovia. As a modern service company, Vonovia focuses on customer orientation and tenant satisfaction. Offering tenants affordable, attractive and livable homes is a prerequisite for the company's continued successful development. Accordingly, Vonovia makes long-term investments in the maintenance, modernization and senior-friendly conversion of its properties. The creation of new residences by way of infill development is also gaining in importance.

The company, which is based in Bochum, has been listed on the stock exchange since 2013 and on the DAX 30 since September 2015. Vonovia SE is also listed on the international indices STOXX Europe 600, MSCI Germany, MSCI Germany, GPR 250 and EPRA/NAREIT Europe. Vonovia has a workforce of 6,700 employees.

Additional Information:
Approval: Regulated Market / Prime Standard, Frankfurt Stock Exchange
Common code: 094567408
Registered headquarters of Vonovia SE: Münsterstrasse 248, 40470 Düsseldorf, Germany
Business address of Vonovia SE: Philippstrasse 3, 44803 Bochum, Germany

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 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 appropriate 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.

2016-05-12 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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