Vonovia SE · XETR:VNA
Vonovia — H1 2021 Earnings Presentation
71 slides from Vonovia's earnings presentation, Aug 6, 2021
Slide 1: H1 2021 Earnings Call & Investor Presentation
H1 2021 Earnings Call Presentation (pages 2-20) & Investor Presentation (pages 21-71) August 6, 2021
Slide 2: Agenda
Agenda 1. H1 2021 Results 2. Investor Presentation 3. Additional Information 1 2 3 H1 2021 Investor Additional See Page Results Presentation Information Finder on page 71 for detailed pages 2-20 pages 21-45 pages 46-71 index H1 2021 Earnings Call & Investor Presentation page 2
Slide 3: Agenda H1 2021 Results
Agenda H1 2021 Results 1. H1 2021 Results 2. Investor Presentation 3. Additional Information 4 Highlights 5-11 Segment Results 12-14 H1 Valuation 15 Investment Program 16-17 LTV & Financing 18 Capital Structure 19 Guidance 2021 20 Wrap-up H1 2021 Earnings Call & Investor Presentation page 3
Slide 4: Highlights
Highlights 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Operating business is fully on track and market fundamentals remain highly favorable. Well Continued focus on managing the residential megatrends with a view towards sustainability and adequate positioned stakeholder re
Slide 5: Segment Overview
Segment Overview Revenue, EBITDA, and FFO Growth 1. H1 2021 Results 2. Investor Presentation 3. Additional Information On the basis of a stable portfolio volume y-o-y, Vonovia delivered top- and bottom-line growth with Total Segment Revenue up 10.0%, Adj. EBITDA Rental up 5.4%, Adj. EBITDA Total up
Slide 6: Rental Segment
Rental Segment Organic Growth and Efficiencies Drive Adj. EBITDA Rental 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Slight rotation at the edges but H1 average portfolio Rental Segment (€m) H1 2021 H1 2020 Delta volume similar to prior year with ~415k units. Rental revenue
Slide 7: Rental Segment Operating KPIs
Rental Segment Operating KPIs 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Organic rent growth of 3.4% year-on-year. Organic rent growth (y-o-y, %) Low vacancy levels as a result of unbroken 3.9 3.4 0.6 demand for our product and strong operational 0.5 performance in spite o
Slide 8: Value-add Segment
Value-add Segment Revenue Growth from External and Internal Activities 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Increased external and internal revenue in H1 2021 from continued expansion of the different Value-add initiatives, predominantly in Craftsmen service Resident
Slide 9: Recurring Sales Segment
Recurring Sales Segment Unbroken Demand for Individual Condos 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Stable fair value-step-ups on the back of Recurring Sales Segment (€m) H1 2021 H1 2020 Delta high disposal volumes. H1 2021 Recurring Sales positively impacted by Units
Slide 10: Development Segment
Development Segment Slow Start in H1 but on Track for the Full Year 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Development to hold includes 92 new apartments in Development to sell Development to hold (by revenue) (by fair value) Sweden, about half of which are conversions
Slide 11: Development Segment: Contribution to Reducing Housing Shortage
Development Segment Vonovia‘s Contribution towards Reducing the Housing Shortage 1. H1 2021 Results 2. Investor Presentation 3. Additional Information New rental apartments for our own portfolio (to hold) 389 units completed in H1 2021 (including floor additions). 10% Total pipeline of ca. 38k apart
Slide 12: H1 2021 with Strong Value Growth
H1 2021 with Strong Value Growth 1. H1 2021 Results 2. Investor Presentation 3. Additional Information H1 2021 fair value evolution (€bn) 63.1 58.9 59.0 4.2 0.2 0.3 0.2 -0.05 Ca. 3/4 of portfolio revalued in H1 2021 revalued l-f-l 48.1 (30 largest and most dynamic 44.1 +9.2%2,5 German cities plus Vi
Slide 13: Broad-based Value Growth across German Regional Markets
Broad-based Value Growth across All German Regional Markets 1. H1 2021 Results 2. Investor Presentation 3. Additional Information % share of Perfor- Value uplift from performance, YC and investments (l-f-l) Fair Regional Market mance Regional Market Value Invest revalued in H1 & Sweden 10.9% (€m) 20
Slide 14: Value Development in Berlin
Value Development in Berlin 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Vonovia’s fair value growth in Berlin as of June 30, 2021, results in a fair value per sqm of €2,888, which is only 1.2% above the FV per sqm reported by Deutsche Wohnen six months earlier (Dec. 31 2020
Slide 15: Investment Program
Investment Program Actively Managing the Megatrends 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Three main investment categories lead to incremental rental revenue1, value appreciation and an overall improvement of our portfolio quality, including CO2 emission reductions. T
Slide 16: EPRA NTA and NRV
EPRA NTA and NRV 1. H1 2021 Results 2. Investor Presentation 3. Additional Information EPRA NTA of €68.44 (+9.1%) and EPRA NRV of €82.45 (+6.8%). EPRA NTA excluding purchasers’ costs of €62.09. EPRA NTA EPRA NRV €m Jun. 30, Dec. 31, Jun. 30, Dec. 31, (unless indicated otherwise) 2021 2020 Delta 2021
Slide 17: LTV & Net Debt/EBITDA Multiple
LTV & Net Debt/EBITDA Multiple All Financial KPIs in Line 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Based on the stable cash flows and the strong long-term fundamentals in our portfolio locations, largely driven by a structural supply/demand imbalance, we see continued up
Slide 18: Solid Capital Structure
Solid Capital Structure Smooth Maturity Profile and Diverse Funding Mix 1. H1 2021 Results 2. Investor Presentation 3. Additional Information KPI / criteria Jun. 30, 2021 Mar. 31, 2021 Current level Bond covenants Required level (Jun. 30, 2021) Corporate rating (Scope) A- A- LTV <60% 41% (Total fina
Slide 19: Increased Guidance for 2021E
Increased Guidance for 2021E 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Previous 2021 Guidance Current 2021 Guidance Mid-Term (as of 05/2021) (as of 08/2021) Outlook Total Segment Revenue ~€4.9bn - ~€5.1bn ~€4.9bn - ~€5.1bn growing Rental revenue ~€2.3bn - ~€2.4bn ~€2.3bn
Slide 20: Wrap-up
Wrap-up 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Vonovia remains well positioned with continuously strong operating performance and highly favorable market fundamentals. 2021E guidance increase demonstrates confidence in continued earnings and value growth. ESG focus and
Slide 21: Agenda
Agenda 1. H1 2021 Results 2. Investor Presentation 3. Additional Information 1 2 3 H1 2021 Investor Additional See Page Results Presentation Information Finder on page 71 for detailed pages 2-20 pages 21-45 pages 46-71 index H1 2021 Earnings Call & Investor Presentation page 21
Slide 22: Agenda Investor Presentation
Agenda Investor Presentation 1. H1 2021 Results 2. Investor Presentation 3. Additional Information 23 Europe’s Leading Resi Player 24 Consistent strategy Execution since IPO 25 Impeccable Track Record of Consistent & Sustainable Growth 26 Compelling Investment Case 27 Earnings & Value Growth Across
Slide 23: Europe's Leading Residential Property Owner and Operator
Europe’s Leading Residential Property Owner and Operator 1. H1 2021 Results 2. Investor Presentation 3. Additional Information We are the long-term owner and full-scale 354k apartments in 15 urban growth operator of Europe’s largest listed multifamily regions housing portfolio with ca. 414k apartmen
Slide 24: Consistent Strategy Execution since IPO
Consistent Strategy Execution since IPO Business Built for Long-term Growth 1. H1 2021 Results 2. Investor Presentation 3. Additional Information IPO Today Rental & Value-add (efficient, scalable B-to-C operating business). Business Rental and condo Development (profitable business & our answer to s
Slide 25: Impeccable Track Record of Consistent & Sustainable Growth
Impeccable Track Record of Consistent & Sustainable Growth Confident to Maintain Earnings and Value Growth Going Forward 1. H1 2021 Results 2. Investor Presentation 3. Additional Information FFO (€/share)1 Dividend (€/share) – 70% payout ratio from FFO +14% CAGR 2.38 2.25 +14% CAGR 2.06 1.90 1.63 1.
Slide 26: Compelling Investment Case
Compelling Investment Case 1. H1 2021 Results 2. Investor Presentation 3. Additional Information We are Europe’s largest residential landlord and the long-term owner and full-scale operator of a Market multifamily housing portfolio with ca. 414k apartments for small and medium incomes in metropolita
Slide 27: Earnings and Value Growth across Four Segments
Earnings and Value Growth across Four Segments 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Development Rental & Value-add Recurring New construction (Operating business) Sales of apartments to Efficient property and portfolio management including ancillary Disposal of hold
Slide 28: Granular B-to-C End Consumer Business
Granular B-to-C End Consumer Business 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Residential real estate is a granular mass business with large volumes that offers a competitive advantage to companies with an efficient operating platform, a high degree of standardization a
Slide 29: Robust Operating Business
Robust Operating Business 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Bread & butter market rent growth levered with investments Successful portfolio management has resulted in Rent growth from new construction to hold 3.6% excluding the 4.4 portfolio concentration in urban
Slide 30: Megatrends – Challenge & Opportunity
Megatrends – Challenge & Opportunity 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Energy Urbanization efficiency Demographic change An increasing part of the population Ca. 1/3 of greenhouse gas An increasing share of the is moving into urban areas emissions are related to r
Slide 31: Disciplined Capital Allocation
Disciplined Capital Allocation Focused on Long-term Earnings and Value Creation 1. H1 2021 Results 2. Investor Presentation 3. Additional Information 2.38 2.25 70% of recurring cash earnings (FFO) paid 1.90 2.06 1.69 Organic Core Business 1.63 out as dividend 1.57 Dividend 1.44 1.30 1.32 1.12 1.00 W
Slide 32: Investment Program for Organic Growth
Investment Program for Organic Growth 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Three main investment categories lead to incremental rental revenue1, value appreciation and an overall improvement of our portfolio quality, including CO2 emission reductions. New Constructio
Slide 33: Market Outperformance
Market Outperformance 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Over the medium Term, Vonovia has consistently outperformed the real estate sector and the wider equity markets since the IPO. 293% 91% 81% 60% 53% 50% 49% 37% 26% 27% 29% 21% 16% 13% 9% 8% Vonovia DAX EuroSt
Slide 34: M&A Philosophy
M&A Philosophy Growing through Acquisitions Makes Sense – But Only at the Right Price 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Acquisition philosophy Acquisition criteria Increased scale delivers efficiencies, performance and Strategic Rationale value growth. In principl
Slide 35: Portfolio Volume More than Doubled since IPO
Portfolio Volume More than Doubled since IPO 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Portfolio evolution (‘000 units) Major transactions 320 414 Synergies 4 Units Strategic Target (over-) (‘000) rationale Hembla delivered Victoria Park 11 adding scale and additional exp
Slide 36: Our Business Is Deeply Rooted in ESG
Serving a Fundamental Need in a Highly Relevant Market Our Business Is Deeply Rooted in ESG 1. H1 2021 Results 2. Investor Presentation 3. Additional Information We provide a home to around 1 million people from ca. 150 nations. All of our actions have more than CO2 emissions related to housing are
Slide 37: Recognition of ESG Performance
Recognition of ESG Performance ESG Ratings and Indices 1. H1 2021 Results 2. Investor Presentation 3. Additional Information ESG Ratings • Upgraded in both ratings in 2021 • Risk rating within 1st percentile of global rating universe • Ranked 18 out of universe of 13,573 companies globally (as of Au
Slide 38: Sustainability Strategy and UN Sustainable Development Goals
Vonovia’s Sustainability Strategy Is Committed to 8 United Nations Sustainability Development Goals 1. H1 2021 Results 2. Investor Presentation 3. Additional Information We consider 8 of the 17 United Nations Sustainability Development Goals (SDG) to be material to our business activities and aligne
Slide 39: Climate Path towards CO2 Neutrality
Vonovia’s Climate Path towards CO2 Neutrality through Continued Modernization, Renewable Energy and Sector Coupling 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Illustration of different climate path scenarios 2020-2050 (CO2 intensity) 1 50 Base case Increased modernization
Slide 40: Balanced Stakeholder Approach
Balanced Stakeholder Approach 1. H1 2021 Results 2. Investor Presentation 3. Additional Information A home at a Self-imposed Hardship case obligation to cap management to COVID-19 – special fair rent level modernization rent effectively assist promise that we will increases to max. tenants in financ
Slide 41: Highly Robust Governance
Highly Robust Governance 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Governance Dedicated ESG Numerous policies Department reporting published (e.g. human Highly robust directly to the CEO; rights, whistleblower, governance structure The Supervisory Board tax understanding,
Slide 42: Sustainability Performance Index (SPI)
Sustainability Performance Index (SPI) 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Vonovia has established the Sustainability Performance Index with quantitative, non-financial KPIs to measure sustainability performance in the most relevant areas SPI reporting is audited by
Slide 43: Long-term Structural Support from Residential Market Trends
Long-term Structural Support from Residential Market Trends 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Urbanization1 Structural supply/demand imbalance2 Growing (above average) Residential completions fall short of estimated required volumes Growing 700 Completions (`000)
Slide 44: Stable Market Rent Growth Leveraged with Investments
Stable Market Rent Growth Leveraged with Investments 1. H1 2021 Results 2. Investor Presentation 3. Additional Information No direct connection between Vonovia market rent growth Vonovia has three different organic rent growth drivers and inflation but over time broadly in line 3.0% New construction
Slide 45: Summary of Investment Case
Summary of Investment Case 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Long-term owner and full-scale operator of Europe’s largest multifamily Market housing portfolio for small and medium incomes in metropolitan growth Leader areas. Uniquely Granular operating business in
Slide 46: Agenda
Agenda 1. H1 2021 Results 2. Investor Presentation 3. Additional Information 1 2 3 H1 2021 Investor Additional See Page Results Presentation Information Finder on page 71 for detailed pages 2-20 pages 21-45 pages 46-71 index H1 2021 Earnings Call & Investor Presentation page 46
Slide 47: Agenda – Additional Information
Agenda – Additional Information 1. H1 2021 Results 2. Investor Presentation 3. Additional Information 48-49 Megatrends 50 Vonovia in Europe 51-53 Portfolio Information 54 Urban Quarters 55 Investment Program Funding 56-57 Historic Acquisition Pipeline; Track Record 58 Value-add, Business Innovation
Slide 48: Three Dominant Megatrends for Residential Real Estate
Three Dominant Megatrends for Residential Real Estate 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Energy Demographic Urbanization efficiency change % of population living in cities % of modernized housing units % of population above/below 65 years 87% ~3% ~3% 84% 21% 20% 31
Slide 49: COVID-19 to Possibly Accelerate Megatrends
COVID-19 to Possibly Accelerate Megatrends that Are otherwise Fully Intact 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Culture, entertainment, medical infrastructure, likeminded people etc. - the appeal of a city goes beyond jobs. Less than 1/3 of the German working populat
Slide 50: Scalable B-to-C Business Beyond the Bricks
Scalable B-to-C Business Beyond the Bricks Implementation of Vonovia Business Model in Comparable Markets 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Vonovia has developed an operating platform and 354k apartments a unique business model for the efficient in 15 urban growth
Slide 51: Long-term Support from Megatrends: Urban Growth Markets
Long-term Support from Megatrends Focus on Urban Areas with Long-term Supply/Demand Imbalance 1. H1 2021 Results 2. Investor Presentation 3. Additional Information ~70k non-core apartments sold since IPO in 2013 Vonovia Portfolio March 2015 Vonovia Strategic Portfolio 347k apartments in 818 location
Slide 52: Portfolio Cluster
Portfolio Cluster 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Sweden 11% 51% of German portfolio earmarked for Austria 5% investment strategy, safeguarding long-term Non-core 0% Recurring Sales 7% sustainability of our Optimize Apartment and Upgrade Building investment stra
Slide 53: Regional Markets
Regional Markets 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Fair value1 In-place rent Regional Markets Residential Organic rent Multiple Purchase Market rent Average rent increase growth (LTM, Residential Vacancy Total Residential power index (Jun. 30, 2021) (€m) (€/sqm) u
Slide 54: Neighborhoods / Urban Quarters
Neighborhoods / Urban Quarters 1. H1 2021 Results 2. Investor Presentation 3. Additional Information “In residential real estate, a neighborhood, or urban quarter, is usually defined as a cohesive urban structure that is considered by its inhabitants as a self-contained area. It is the predominant a
Slide 55: Illustrative Overview of Investment Program Funding
Illustrative Overview of Investment Program Funding 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Rental revenue Comprehensive investment program to drive - Maintenance expenses - Operating expenses organic growth and portfolio improvements + Adj. EBITDA Value-add Size of inv
Slide 56: Acquisitions – Opportunistic and Disciplined
Acquisitions – Opportunistic and Disciplined 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Acquisition pipeline (‘000 units) 340 2013: Dewag+ Vitus (~41 k)1 2015: Gagfah (~145 k) 1 2015: Südewo (~19 k) 1 2016: conwert (~23 k) 1 2017: Buwog (~48 k) 1 252 240 2018: Victoria Par
Slide 57: Acquisition Track Record
Acquisition Track Record 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Larger acquisitions Fair Value per sqm Year Deal Residential units # TOP Locations @ Acquisition Jun. 30, 2021 ∆ Berlin, Hamburg, Cologne, DEWAG 11,300 € 1,344 € 2,871 114% Frankfurt 2014 VITUS1 20,500 Bre
Slide 58: Value-add Business Innovation Funnel
Vonovia Innovation Lab – Value-add Business Innovation Funnel Extensive Testing and Measured Rollout to Minimize Risk 1. H1 2021 Results 2. Investor Presentation 3. Additional Information IDEA Stage- Stage- Stage- Stage- Stage- Gate Gate Gate Gate Gate POOL OF IDEAS ANALYSIS DETAILED ANALYSIS PROOF
Slide 59: Bonds and Ratings
Bonds and Ratings 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Corporate Investment grade rating as of 2018-08-02 Rating agency Rating Outlook Last Update Moodys A3 Stable 31 May 2021 Scope A- Stable 14 Jun 2021 On July 22nd 2020, S&P‘s updated Vonovia’s Standard & Poor’s BB
Slide 60: History of Vonovia
History of Vonovia 1. H1 2021 Results 2. Investor Presentation 3. Additional Information We built the German leader with the potential and ambition to become a unique European champion 2020 2013 2018 Climate path for until CO2 neutrality 2018 by 2050 Opportunistic IPO expansion into selected Vonovia
Slide 61: Corporate Governance
Corporate Governance AGM, Supervisory Board, Management Board 1. H1 2021 Results 2. Investor Presentation 3. Additional Information The duties and authorities of the three governing bodies derive from the SE Regulation, the German Stock Corporation Act and the Articles of Association. In addition, V
Slide 62: Residential Market Fundamentals (Germany)
Residential Market Fundamentals (Germany) Household Sizes and Ownership Structure 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Growing number of smaller households Fragmented ownership structure While the overall population in Germany is expected to Germany is the largest ho
Slide 63: New Construction as Solution to Germany's Housing Shortage
The Most Efficient Solution to the Consequences of Germany’s Housing Shortage in Urban Areas is New Construction - Vonovia Leads by Example 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Largest homebuilders in Germany1 Majority of newly built apartments is to hold, substantia
Slide 64: Residential Market Trends (Sweden)
Long-term Structural Support from Fundamental Residential Market Trends (Sweden) 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Robust rent growth in regulated environments1 Rent growth in regulated markets follows a sustainable upward trajectory and is largely The market fund
Slide 65: Liquid Large-cap Stock
Liquid Large-cap Stock 1. H1 2021 Results 2. Investor Presentation 3. Additional Information EuroStoxx 50 35 Stoxx 600 M-DAX S-DAX 30 DAX 380 25 +293% Share price (rebased to 100) Vonovia market cap (€bn) 20 280 15 +91% +60% +53% 10 180 5 80 0 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20
Slide 66: Vonovia Shares – Basic Data and NOSH Evolution
Vonovia Shares – Basic Data and NOSH Evolution 1. H1 2021 Results 2. Investor Presentation 3. Additional Information First day of trading July 11, 2013 Norges 10.1% No. of shares outstanding 575.3 million Free float 89.9% BlackRock 8.9% ISIN DE000A1ML7J1 APG 2.9% Ticker symbol VNA Share class Regist
Slide 67: IR Contact & Financial Calendar
IR Contact & Financial Calendar 1. H1 2021 Results 2. Investor Presentation 3. Additional Information Contact Financial Calendar Rene Hoffmann (Head of IR) Aug 6 Interim results 6M 2021 Primary contact for Sell side, Buy side Sep 2 CoBa Corporate Conference +49 234 314 1629 Sep 20 Goldman Sachs 10th
Slide 68: Disclaimer
Disclaimer 1. H1 2021 Results 2. Investor Presentation 3. Additional Information This presentation has been specifically prepared by Vonovia SE and/or its affiliates (together, “Vonovia”) for internal use. Consequently, it may not be sufficient or appropriate for the purpose for which a third party
Slide 69: For Your Notes
For Your Notes 1. H1 2021 Results 2. Investor Presentation 3. Additional Information H1 2021 Earnings Call & Investor Presentation page 69
Slide 70: For Your Notes
For Your Notes 1. H1 2021 Results 2. Investor Presentation 3. Additional Information H1 2021 Earnings Call & Investor Presentation page 70
Slide 71: Page Finder
1. H1 2021 Results 2. Investor Presentation 3. Additional Information H1 2021 Results Investor Presentation Additional Information 2 Agenda 21 Agenda 46 Agenda 3 Agenda H1 2021 Results 22 Agenda Investor Presentation 47 Agenda - Additional Information 4 Highlights 23 Vonovia at a Glance 48 Megatrend