Vonovia SE: Vonovia Operationally Strong in the First Six Months of the Year - Improvement to Customer Management During Modernization (news with additional features)
DGAP-News: Vonovia SE / Key word(s): Half Year Results
Results as of June 30, 2018
- FFO 1 (without BUWOG and Victoria Park) up by 11.5 % to
- Earnings contribution in Value-add Business increased by 13.4 % in total to EUR 51.7 million; car sharing launched.
- Integration of BUWOG proceeding according to plan; takeover offer to Victoria Park shareholders successful.
- Increase in FFO 1 compared to 2017 expected of approximately 15 % to reach EUR 1,050 million to EUR 1,070 million; forecast for 2018 fiscal year supplemented to include earnings contribution from
- Hardship management for modernization work is being further expanded; Vonovia passes along an average of only 7 % instead of 11 % of modernization costs to tenants.
"Vonovia is in an excellent position. One contributing factor is our financial structure: In the first half of the year, we took on equity capital and borrowed capital in the amount of approximately EUR 5 billion, and yet in the same period, paid out dividends of only around EUR 380 million.
"Through our many modernization projects we have learned that we need to work to gain acceptance from our customers before we begin modernization. We want to give them certainty and make it clear that we are not going to modernize anyone out of their homes."
Vonovia is already preparing for the legal change being pursued in the coalition agreement of the German federal government of lowering the modernization allocation for tenants to 8 %. In its modernization projects, the company already passes on an average of only 7 % of its modernization costs to tenants and thus generally stays significantly under the maximum allocation of EUR 3 per square meter.
Vonovia takes criticism of individual modernizations seriously and is working continuously to improve dialogue with tenants. To prepare for comprehensive modernization measures, tenant assemblies are increasingly being held in addition to formally announcing the measures. Moreover, the company has begun to hire employees who exclusively address tenant concerns individually on site.
Vonovia has likewise also restructured its customer management during modernization work and provided additional personnel in order to allow tenants who demonstrate personal or economic hardship to stay in their accustomed surroundings. The aim is to reach a good and mutual solution with tenants before construction begins.
Neighborhood Development Driven Forward
Vonovia is committed to the holistic development of neighborhoods, including the Ziekow district in Berlin-Reinickendorf. Here the plan is to invest around EUR 140 million in total by 2023. The first major step was to create a neighborhood community center in which older residents can find support services. The services are being offered by the "Johanniter-Unfall-Hilfe" (Order of St. John charitable organization). In addition, Vonovia is successively renovating two apartment buildings to make them suitable for senior living in order to meet the high need for accessible apartments in the neighborhood.
Vonovia is also changing floor plans in other districts so that central locations have smaller, affordable apartments for seniors, couples and single people. The company can thus offer moves within a neighborhood when needed. This especially makes sense when living circumstances change and occurs only when requested by the tenant. In these cases, Vonovia usually covers the costs.
Moreover, Vonovia is carrying out new construction: The company plans to complete construction on approximately 550 apartments by the end of the year, and construction on another 500 will be started or commissioned. Looking ahead to the future, the company wants to increase the yearly volume to up to 2,000 apartments; in 2019, the target is 1,200. However, this mainly depends on external conditions. The biggest obstacle for new construction is a lack of construction permits; another bottleneck lies in available construction capacity.
The integration of BUWOG is proceeding as planned. The takeover of Victoria Park has been successful. The Swedish housing company operates in an environment that is very similar to the German housing market and owns approximately 14,000 apartments in the metropolitan regions of Stockholm, Malmö and Gothenburg. By the end of the third quarter of 2018, BUWOG and Victoria Park will be completely integrated into Vonovia's performance key indicators.
2018/2019 Financial Calendar
December 6, 2018: Interim Report for the first nine months of 2018
* All values without BUWOG and without Victoria Park except key figures marked separately with *
** Based on the shares carrying dividend rights on the reporting date: Jun. 30, 2018: 518,077,934, Jun. 30, 2017: 476,460,248, Dec. 31, 2017: 485,100,826
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, GPR 250 and EPRA/NAREIT Europe. Vonovia has a workforce of approximately 9,700 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.
Document title: Vonovia Operationally Strong in the First Six Months of the Year - Improvement to Customer Management During Modernization
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