Results as of September 30, 2019
Vonovia Posts Solid Results; Positive Outlook for 2020

- In the first nine months of 2019, Group FFO grew by around 11% to EUR 932.8 million (9M 2018: EUR 842.7 million); the main reasons for this stem from international and development business.

- Ancillary expenses 9% below operating cost survey of the German Tenants' Association.

- Committed to climate protection with the "1,000 Roofs" program and the model neighborhood in Bochum.

- Investments in new construction increased in 2019 to around EUR 624 million (2018: EUR 416 million).

- Investment in maintenance, modernization and new construction increased to EUR 1,301.3 million (9M 2018: EUR 983.0 million).

- Forecast: Group FFO for 2019 confirmed at the upper end of the range and further growth of 7% in 2020 to around EUR 1.275 billion to EUR 1.325 billion expected.

Bochum, Germany, November 5, 2019 - Vonovia SE ("Vonovia") continues its positive business performance. In the first nine months of the current fiscal year, Vonovia increased Group FFO (operating result after income and taxes) by approximately 11% to EUR 932.8 million (9M 2018: EUR 842.7 million). In particular, the result was boosted by the acquisitions of BUWOG and Victoria Park last year, as well as by the development business, new construction activity and further efficiency gains.

"Vonovia's successful development is based on our strategic decision to expand our presence outside Germany and extend our business model to include the area of development by acquiring BUWOG. In combination with our decision to focus on dynamic growth regions in Germany, we now have a very well balanced portfolio that stands independent of individual regional economic fluctuations," says Rolf Buch, Chief Executive Officer of Vonovia. "Our business model is forward-looking and stable."

Investment Program Expanded; More new Construction to Combat the Housing Shortage

Investment in maintenance, modernization and construction increased to EUR 1,301.3 million in the first nine months of the year (9M 2018: EUR 983.0 million), even though there was a decline in investments in energy-efficient modernizations. The reason for the decline is the voluntary commitment not to carry out any modernizations that would lead to a rent increase of more than EUR 2 per square meter for our tenants. During this period, Vonovia added an average of EUR 1.25 per square meter and month in the case of modernization. The Group is planning for an investment volume of EUR 1.4 billion for 2019 as a whole and will thus achieve a renovation rate of around 4% (2018: 5%). "We expect this rate to decline again in 2020. It is all the more important that we find other solutions for more climate protection in the housing stock," says Rolf Buch.

Vonovia is focusing more on new construction: Vonovia is increasing its investments in the construction of new apartments for the full year 2019 to around EUR 624 million (2018: EUR 416 million). Around 2,150 residential units in Germany, Austria and Sweden are expected to have been completed/be under construction by the end of the year, including apartments classified as social housing in Germany with rent of EUR 6.50 per square meter. "We need more homes, especially affordable ones. Alongside social housing, this also includes apartments for the middle class," explains Buch.

As of September 30, 2019, Vonovia managed a portfolio comprising 395,615 own residential units in Germany, Austria and Sweden (9M 2018: 400,735). Rental income amounted to EUR 1,527.0 million, compared with EUR 1,393.3 million in the prior-year period. This increase is also chiefly attributable to the acquisitions of BUWOG and Victoria Park. The increase in rent due to market-related factors came to 1.2 %. The effects resulting from investment in new construction, vertical expansion and modernization came to 2.8 %. The average monthly net rent (excluding ancillary expenses) of Vonovia rose to EUR 6.69 per square meter (9M 2018: EUR 6.43). The vacancy rate of 2.9% (9M 2018: 2.7%) was largely due to investments. Vonovia's portfolio is virtually fully occupied.

Ancillary expenses at Vonovia are below the amount in the nationwide operating cost survey conducted by the German Tenants' Association (DMB). Whereas Vonovia charged an average of EUR 2.55 per square meter and month in 2017, the average operating costs determined by the DMB stood at EUR 2.81 per square meter and month. This difference of about 9 % confirms the efforts of Vonovia to keep ancillary expenses to a minimum for tenants. The comparison is based on a total of 14 ancillary expense items. The DMB published its 2017 figures on October 3, 2019.

Operations Strengthened in Sweden

With the acquisition of a majority stake of 69.3 % in Hembla AB, Vonovia will be significantly expanding its operations in Sweden. Vonovia expects the merger control authorities to approve the transaction anytime soon, obligating Vonovia to submit a public takeover offer for the remaining Hembla shares. Following the acquisition of Victoria Park in 2018, Hembla represents the second step on the Swedish market for Vonovia. The two portfolios complement each other: "We are also planning to implement our business model, which creates greater efficiency through our proven management platform, in Sweden," says Rolf Buch.

Committed to Climate Protection

The "1,000 Roofs" program was launched in summer 2019. The aim is to equip at least 1,000 suitable roofs with photovoltaic facilities. Vonovia got the ball rolling in Dresden and Munich. Photovoltaic facilities have already been fitted on 224 gabled and flat roofs, which represents an installed output of 2,663 kWp. The roofs produce around 2,500,000 kWh of green energy per year. The CO₂ saving from the 224 roofs amounts to 1,200 metric tons per year. The 1,000 Roofs program spans a period of several years.

Vonovia is planning a "neighborhood of the future" in Bochum-Weitmar. In conjunction with the Fraunhofer Society and Ampeers Energy GmbH - and with the support of the State of North Rhine-Westphalia - a digital ecosystem is currently being developed that will pave the way for an integrated sector coupling. The goal is the full integration and sectoral coupling of electricity and heating supplies (which currently rely on stand-alone solutions within the neighborhood) via a central platform. Together with Open District Hub e.V., Vonovia has developed trailblazing business models for residential neighborhoods, with their initial implementation planned for Bochum-Weitmar. "We anticipate that this pilot project will provide us with valuable insights into the challenges and opportunities associated with developing the neighborhood of the future."

Level of Debt Decreased Even More

Vonovia was able to further drive its level of debt down to 40.3% in the reporting period, putting it at the lower end of the target corridor. The company raised equity of around EUR 1 billion in the period from January to September. Around EUR 400 million was paid out as a cash dividend during the same period. "We have strengthened our balance sheet again and we are in an excellent financial position," says Buch.

This was partly driven by the measurement gains of EUR 2.3 billion of June 30. Vonovia expects a further increase in value from valuations and investments of EUR 2.1 billion to EUR 2.8 billion in the second half of 2019. "The recent increase in value shows that we have optimized our portfolio successfully. Our housing stocks are in the right locations," remarks Buch.

Positive Outlook for 2019 as a Whole

On account of the strong operational performance in first nine months of 2019, Vonovia confirms that results for the year as a whole will be at the upper end of the forecast range. It is anticipated that Group FFO will climb to somewhere between EUR 1.165 billion and EUR 1.215 billion (2018: EUR 1.132 billion). Vonovia plans to propose a dividend in the amount of EUR 1.57 per share to the shareholders at the Annual General Meeting in May 2020. This corresponds to an increase of around EUR 0.13 and a dividend yield of 3.3% based on the closing price on October 31, 2019.

For 2020, Vonovia expects a further increasing Group FFO (incl. BUWOG, Victoria Park and Hembla) of between around EUR 1.275 billion and EUR 1.325 billion. This is an increase of around 7% on 2019.

Report on the first nine months of 2019:
http://reports.vonovia.de/2019/q3/de

Further information can be found in the Press Section.

2020 Financial Calendar
March 5, 2020: 2019 Annual Press Conference
May 5, 2020: Interim Statement for the First Quarter of 2020
Wednesday, May 13, 2020: Annual General Meeting

* Includes correction of goodwill in the amount of EUR 2,103.5 million
** based on the shares carrying dividend rights on the reporting date in question: Sept. 30, 2018: 518,077,934, Sept. 30, 2019: 542,273,611, Dec. 31, 2018: 518,077,934.

About Vonovia

Vonovia SE is Europe's leading private residential real estate company. Vonovia currently owns around 395,600 residential units in all attractive cities and regions in Germany, Austria and Sweden. It also manages around 78,350 apartments. Its portfolio is worth approximately EUR 47.8 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. Accordingly, 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 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 more than 10,000 employees.

Additional Information:
Approval: Regulated Market/Prime Standard, Frankfurt Stock Exchange
ISIN: DE000A1ML7J1
WKN: A1ML7J
Common code: 094567408
Registered headquarters of Vonovia SE: Bochum, Germany, Bochum Local Court, HRB 16879
Business address of Vonovia SE: Universitaetsstrasse 133, 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, 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.