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Vonovia SE: Vonovia More Than Doubles Earnings in 2015

DGAP-News: Vonovia SE / Key word(s): Final Results/Forecast

2016-03-03 / 07:02
The issuer is solely responsible for the content of this announcement.


Vonovia More Than Doubles Earnings in 2015

Considerable Increase in Earnings Power Yet Again

  • FFO I up by 112 % to EUR 608 million; FFO I comes to EUR 1.30 per share (2014: EUR 1.0).
  • EPRA NAV more than doubles to EUR 14 billion; EPRA NAV per share up 30 % to around EUR 30.
  • Vacancy rate reduced further to 2.7 %; moderate rent increase of 2.9 %.
  • Dividend proposal up by 27 % to EUR 0.94 per share.

Solid Financial Structure - Fair Value Increases

  • LTV down to 47 %.
  • Value of the real estate portfolio almost doubles to EUR 24.2 billion.

Substantial Investments Increase Quality of Real Estate Portfolio

  • Focus on maintenance, energy-efficient refurbishment and senior-friendly conversions.
  • Around EUR 33 invested per square meter.

Positive Outlook for 2016 Confirmed

  • FFO I expected to increase to between EUR 690 million and EUR 710 million.
  • Plans to invest up to EUR 830 million, or up to EUR 38 per square meter, in modernization and maintenance.
  • Additional services for tenants and new construction becoming more significant.

Bochum, March 3, 2016 - Vonovia SE ("Vonovia") more than doubled its profit from operations in the 2015 fiscal year. The company also laid strategic groundwork for the future by way of the integration of GAGFAH and SÜDEWO. The takeover has allowed Vonovia to strengthen its position as Germany's leading nationwide real estate company.

"We can look back on an eventful year. Following the merger with GAGFAH, we continued on the path to success under our new name, Vonovia. We not only achieved a significant increase in earnings, but also once again made marked improvements to the quality of our apartments," says CEO Rolf Buch.

Considerable Increase in Earnings Power Again

Vonovia once again outstripped the forecast for the 2015 fiscal year, which had already been revised upward in November. With a portfolio that has expanded to include 357,000 apartments and also thanks to organic growth, Vonovia was able to significantly improve all of its key financial figures in the 2015 fiscal year.

Rolf Buch: "As you know, the offer we made to the shareholders of Deutsche Wohnen did not result in a sufficient number of tendered shares to allow us to implement our strategy. Our excellent figures show that, even without extra additions to our portfolio, our strategy will generate significant value increases thanks to its holistic approach to tenants and the living environment in general."

FFO I (funds from operations; profit from operations after current interest and taxes), for example, rose by 112 % to EUR 608 million (previous year: EUR 287 million). This represents earnings power per share of EUR 1.30 (previous year: EUR 1.00). The adjusted EBITDA from the company's Rental business also showed a significant improvement, climbing by 91 % to EUR 925 million (previous year: EUR 483 million). Due to the positive development in Vonovia's business with additional services, the company has expanded its segment reporting to include separate disclosures for the "Extension" segment for the very first time in the 2015 annual financial statements. The adjusted EBITDA in this segment rose by 59 % year-over-year to around EUR 38 million (previous year: EUR 24 million). Consolidated net income for the year increased to EUR 995 million (previous year: EUR 410 million).

The company also more than doubled its EPRA NAV (net asset value; adjusted net equity; real estate assets without liabilities) to EUR 14 billion, pushing the EPRA NAV per share up by around 30 % to approximately EUR 30. The vacancy rate fell by 0.7 percentage points in comparison with the reporting date for the prior period and was at a very low level of 2.7 % on December 31, 2015. Due to the company's acquisitions, rental income increased considerably during the reporting period, by 79 % to EUR 1.4 billion.

The monthly in-place rent (like-for-like) per square meter showed positive development, rising to EUR 5.78 (2014: EUR 5.62), which corresponds to an increase of 2.9 %. Like-for-like means that the comparison refers to the same housing stocks and is an objective performance indicator in the context of extensive portfolio growth.

On the basis of this successful development, the dividend proposal made by the Management Board to the Annual General Meeting will be unchanged at EUR 0.94 per share. This represents a 27 % increase on the previous year and corresponds to an attractive dividend yield of 3.3 % based on the closing price of the company's shares for 2015.
Solid Financial Structure - Fair Value Increases

Vonovia continues to have a robust financial structure. The company was also able to reduce its loan-to-value (LTV) ratio to 47 %, putting it well below the 50 % target threshold at the end of the year. This achievement can be attributed to a significant increase in the value of the real estate portfolio due to market developments, active portfolio optimization measures and extensive modernization. Last year saw the value of Vonovia's real estate portfolio almost double to EUR 24.2 billion (previous year: EUR 12.8 billion) due to acquisitions and organic growth.

Continued Substantial Investments Increase Quality of Real Estate Portfolio

Investments in maintenance and modernization were also stepped up again in 2015. Including the new additions to the portfolio, Vonovia invested around EUR 331 million in maintenance (2014: EUR 174 million) and around EUR 356 million in modernization (2014: EUR 172 million) in 2015. This means that the company spent around EUR 33 per square meter - putting it well ahead of the industry average.

This once again underlines the company's goal of a further improvement in the quality of its housing stocks. Today, Vonovia has more than 3,400 of its own caretakers and craftsmen working across the country and also employs 300 gardeners. The further improvements in the customer satisfaction index confirm the success of this strategy.

Business with Customer-Oriented Services Growing

Innovation plays an important role at Vonovia and the company continued to develop new solutions for its customers and to expand its core business in 2015 as well. Vonovia now offers housing-related services in direct contact with its approximately one million customers. These services, which are provided by the company's own employees, include bathroom modernization work performed at the customer's request, the cable TV business, energy services and a successful smart metering project. The increasing importance of this segment is reflected in the expansion of segment reporting: Separate disclosures for the "Extension" segment are shown for the first time.

Share Price Development better than DAX

At the beginning of September, Deutsche Annington Immobilien SE was renamed Vonovia SE. The new name expresses the company's long-term strategic focus.

Vonovia's shares have been traded on the DAX 30 since September 2015. This marks the first time that a real estate company has been represented in Germany's benchmark index. The company's shares closed the year at EUR 28.55, up by 6.7 % compared with the end of 2014. Its market capitalization came to around EUR 13.3 billion, putting Vonovia in 23rd place among the most valuable listed companies in Germany. Contrary to the DAX, which has fallen by about 10 % since the beginning of the year, Vonovia's shares have recorded a slight gain.

As of December 31, 2015, Vonovia employed a workforce of around 6,400 (2014: 3,850). This growth is due to the integration of GAGFAH and SÜDEWO, as well as to the increase in employees working for the craftsmen's organization.

Positive Outlook for 2016 Confirmed

Looking ahead to 2016, Vonovia expects to see a further improvement in business performance and a 15 % increase in FFO I to between EUR 690 million and EUR 710 million. To achieve further improvements in the quality of its housing stocks, Vonovia will continue to consistently invest in its buildings and its residential units, as well as in the residential environment as a whole. The volume invested in modernization is to grow considerably, by 31 % to between EUR 430 million and EUR 500 million. Vonovia is also planning to invest around EUR 330 million in maintenance. All in all, this corresponds to an investment volume of up to EUR 830 million, or up to EUR 38 per square meter, in 2016.

Modernization measures will continue to focus on energy efficiency measures, refurbishments and senior-friendly conversions. The company will also, however, be investing in new programs such as modernization at the tenant's request, neighborhood development or the construction of new apartments. Particularly in urban areas, Vonovia is planning to add extra stories to existing buildings and to develop open spaces within the portfolio.

The Annual Report is available at www.vonovia.de. Further information can be found in the press section of the company's website.

KEY FINANCIAL FIGURES

in EUR million   2015   2014   Change
in %
             
Rental income   1,414.6   789.3   79.2
Income from disposal of properties   726.0   287.3   152.7
Adjusted EBITDA Rental   924.8   483.1   91.4
Adjusted EBITDA Extension   37.6   23.6   59.3
Adjusted EBITDA Sales   71.1   50.1   41.9
Total cost of modernization and maintenance   686.3   345.5   98.6
thereof expenses for maintenance and capitalized maintenance   330.7   173.8   90.3
thereof modernization measures   355.6   171.7   107.1
FFO 1   608.0   286.6   112.1
FFO 2   662.1   336.7   96.6
FFO 1 per share in EUR*   1.30   1.00   30.0
Profit for the period   994.7   409.7   142.8
 

*Based on the shares carrying dividend rights on the reporting date Dec. 31, 2015: 466,000,624; Dec. 31, 2014: 271,622,425; Prior-year value TERP-adjusted

KEY BALANCE SHEET FIGURES

    Dec. 31, 2015   Dec. 31, 2014   Change
in %
             
Fair value of the real estate portfolio   24,157.7   12,759.1   89.3
EPRA NAV   13,988.2   6,578.0   112.7
LTV in %*   47.3   49.7   -2.4 pp
EPRA NAV per share in EUR**   30.02   23.04   30.3
 

*Adjusted to reflect effects in connection with the acquisitions of Franconia and GAGFAH as well as effects from portfolio sales / outstanding acquisitions

**Based on the shares carrying dividend rights on the reporting date Dec. 31, 2015: 466,000,624; Dec. 31, 2014: 271,622,425; Prior-year value TERP-adjusted

KEY NON-FINANCIAL FIGURES

    2015   2014   Change
in %
 
Number of units managed
   
397,799
   
232,246
   
71.3
thereof own apartments   357,117   203,028   75.9
thereof apartments owned by others   40,682   29,218   39.2
Number of units bought   168,632   31,858   429.3
Number of units sold   15,174   4,081   271.8
Vacancy rate in %   2.7   3.4   -0.7 pp
Monthly in-place rent in EUR/m²
(like-for-like incl. DeWAG/Vitus excl. GAGFAH/Franconia/SÜDEWO)
  5.78   5.62   2.9
Number of employees (as of December 31)   6,368   3,850   65.4
 

 

2016 Financial Calendar
 
May 12, 2016: Annual General Meeting in Düsseldorf
 
May 12, 2016: Interim Report Q1 2016
 
August 2, 2016: Interim Report H1 2016
 
November 3, 2016: Interim Report Q3 2016
 

Explanation: The company's financial statements as of December 31, 2015, include the earnings contributions made by GAGFAH from March 2015 and those made by Franconia from April 2015. Since July 1, 2015, the earnings contribution provided by the SÜDEWO Group, which is based in the German federal state of Baden-Württemberg, has likewise been consolidated in the company's financial statements.

About Vonovia

Vonovia SE is Germany's leading nationwide residential real estate company. Vonovia currently owns and manages some 357,000 residential units in all of Germany's attractive cities and regions. Its portfolio is worth approximately EUR 24 billion. An additional 40,000 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, GPR 250 and EPRA/NAREIT Europe. Vonovia has a workforce of 6,400 employees.

Additional Information:
Approval: Regulated Market / Prime Standard, Frankfurt Stock Exchange
ISIN: DE000A1ML7J1
WKN: A1ML7J
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.



2016-03-03 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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