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41 Non-derivative Financial Liabilities

Non-derivative Financial Liabilities

Dec. 31, 2022

Dec. 31, 2023

in € million

non-current

current

non-current

current

Non-derivative financial liabilities

Liabilities to banks

17,086.4

1,021.4

14,283.2

632.4

Liabilities to other creditors

24,183.3

2,558.4

25,353.3

2,397.7

Deferred interest from non-derivative financial liabilities

210.2

230.5

41,269.7

3,790.0

39,636.5

3,260.6

Accounting Policies

Vonovia recognizes non-derivative financial liabilities, which mainly include liabilities to banks and to investors, at their fair value on the day of trading, less the directly attributable transaction costs (this generally corresponds to the acquisition cost). These liabilities are subsequently measured at amortized cost using the effective interest method. Financial liabilities are derecognized when Vonovia’s obligations specified in the contract expire or are discharged or canceled.

Liabilities bearing no interest or interest below market rates in return for occupancy rights at rents below the prevailing market rates are recorded at present value.

Deferred interest is presented as current in order to show the cash effectiveness of the interest payments transparently. In principle, the deferred interest is part of the non-derivative financial liability. Of the deferred interest from non-derivative financial liabilities, € 178.6 million (December 31, 2022: € 173.8 million) is from bonds reported under non-derivative financial liabilities to other creditors.

The non-derivative financial liabilities developed as follows in the fiscal year under review:

Development of non-derivative financial liabilities in the fiscal year

in € million

As of
Jan. 1, 2023

New loans

Scheduled repayments

Unscheduled repayments

Adjusted for effective interest method

Transfer into discontinued operations

Other adjustments

Exchange rate differences

As of
Dec. 31, 2023

Bond (US dollar)

233.2

-185.0

-48.2

0.0

0.0

Bond (SEK)

112.8

0.3

113.1

Bond (EMTN)

20,994.4

-2,023.7

-581.7

27.4

-85.9

18,330.5

Bond (EMTN Green Bond)

2,179.8

-51.8

2.8

-11.3

0.0

2,119.5

Bond (EMTN Social Bond)

2,380.0

-293.5

6.3

-30.8

0.0

2,062.0

Bond (Deutsche Wohnen)

1,811.6

-8.1

1,803.5

Bearer bond

1,361.0

-8.8

1,352.2

Registered bond

503.1

-3.8

125.0

624.3

Promissory note loan

1,289.9

-120.0

2.7

-125.0

1,047.6

Commercial paper

1,980.0

-1,480.0

-2.6

497.4

Mortgages*

13,983.7

2,330.9

-763.5

-692.0

-111.3

-35.4

2.0

2.1

14,716.5

Deferred interest

210.2

20.3

230.5

45,059.7

4,310.9

-4,572.2

-1,619.0

-143.3

-35.4

-105.7

2.1

42,897.1

  1. * New loans include capitalized interest not affecting cash in the amount of € 0.6 million.

The non-derivative financial liabilities developed as follows in the previous year:

Development of non-derivative financial liabilities in the previous year

in € million

As of
Jan. 1, 2022

New loans

Scheduled repayments

Unscheduled repayments

Adjusted for effective interest method

Other adjustments

Exchange rate differences

As of
Dec. 31, 2022

Bond (US dollar)

219.3

13.9

233.2

Bond (SEK)

121.2

-8.4

112.8

Bond (EMTN)

24,110.3

-1,600.0

-1,511.8

28.8

-32.9

20,994.4

Bond (EMTN Green Bond)

596.6

1,600.0

-16.8

0.0

2,179.8

Bond (EMTN Social Bond)

2,400.0

-20.0

0.0

2,380.0

Bond (Deutsche Wohnen)*

1,907.0

-65.0

-19.1

-11.3

1,811.6

Bearer bond*

1,472.0

-100.0

-11.0

1,361.0

Registered bond*

508.0

-4.9

503.1

Promissory note loan*

279.9

1,010.0

1,289.9

Bridge financing*

3,481.6

-3,490.0

8.4

Commercial paper*

150.0

500.0

-650.0

Mortgages*; **

14,131.6

1,172.0

-566.6

-560.6

-85.4

-0.7

-106.6

13,983.7

Deferred interest*

172.7

37.5

210.2

47,029.0

6,803.20

-6,406.60

-2,137.4

-114.5

-7.4

-106.6

45,059.7

  1. * Starting in the 2023 fiscal year, the non-derivative financial liabilities of Deutsche Wohnen and Vonovia will be presented in the same category. For increased comparability, the presentation of the previous year’s figures has been adjusted according to this format.
  2. ** New loans include capitalized interest not affecting cash in the amount of € 0.5 million. Repayments include debt servicing not yet rendered not affecting cash in the amount of € 3.9 million.

The maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors are as follows during the fiscal year:

Maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors in the fiscal year

Repayment of the nominal obligations is as follows:

in € million

Nominal obligation Dec. 31, 2023

Maturity

Average interest rate

2024

2025

2026

2027

2028

from 2029

Bond (SEK)*

121.2

2026

5.29%

48.5

72.7

Bond (EMTN)*

18,464.0

2030

1.05%

1,814.0

2,594.4

1,800.3

2,000.0

1,724.9

8,530.4

Bond (EMTN Green Bond)*

2,136.9

2031

2.80%

2,136.9

Bond (EMTN Social Bond)*

2,075.7

2027

2.77%

610.5

750.0

715.2

Bond (Deutsche Wohnen)*

1,760.7

2030

1.12%

589.7

1,171.0

Registered bond*

600.0

2031

1.68%

100.0

70.0

50.0

380.0

Bearer bond*

1,260.2

2032

1.77%

33.5

10.0

1,216.7

Promissory note loan*

1,045.0

2029

2.57%

50.0

309.0

60.0

626.0

Commercial paper

500.0

2024

4.16%

500.0

Mortgages**

14,755.4

2030

2.24%

671.1

1,646.6

1,435.8

1,777.1

2,119.2

7,105.6

42,719.1

3,033.6

4,830.7

3,996.6

5,012.3

4,679.3

21,166.6

  1. * Under the conditions of existing loan agreements, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  2. ** For a portion of the mortgages, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.

In the previous year, the maturities and average interest rates of the nominal obligations were as follows:

Maturities and average interest rates of the nominal obligations of the liabilities to banks and the liabilities to other creditors in the previous year

Repayment of the nominal obligations is as follows:

in € million

Nominal obligation Dec. 31, 2022

Maturity

Average interest rate

2023

2024

2025

2026

2027

from 2028

Bond (US dollar)*

185.0

2023

4.58%

185.0

Bond (SEK)*

121.2

2026

2.94%

48.5

72.7

Bond (EMTN)*

21,155.3

2029

1.09%

2,023.7

1,931.6

2,750.0

1,950.0

2,000.0

10,500.0

Bond (EMTN Green Bond)*

2,200.0

2031

2.80%

2,200.0

Bond (EMTN Social Bond)*

2,400.0

2027

2.60%

850.0

750.0

800.0

Bond (Deutsche Wohnen)*; **

1,760.7

2030

1.12%

589.7

1,171.0

Registered bond*; **

475.0

2029

1.53%

100.0

70.0

305.0

Bearer bond*; **

1,260.2

2032

1.77%

33.5

1,226.7

Promissory note loan*; **

1,290.0

2028

1.23%

120.0

50.0

309.0

811.0

Mortgages**; ***

13,911.8

2029

1.33%

1,251.5

1,202.9

1,759.4

1,282.6

1,566.5

6,848.9

44,759.2

3,580.2

3,183.0

5,099.1

4,232.6

4,801.7

23,862.6

  1. * Under the conditions of existing loan agreements, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.
  2. ** Starting in the 2023 fiscal year, the non-derivative financial liabilities of Deutsche Wohnen and Vonovia will be presented in the same category. For increased comparability, the presentation of the previous year’s figures has been adjusted according to this format.
  3. *** For a portion of the mortgages, Vonovia is obliged to fulfill certain financial covenants, which it fulfilled.

The loan repayments shown for the following years contain contractually fixed minimum repayment amounts.

Of the nominal obligations to creditors, € 12,682.1 million (December 31, 2022: € 12,287.4 million) are secured by land charges and other collateral (account pledge agreements, assignments, pledges of company shares and guarantees of Vonovia SE or other Group companies). In the event that payment obligations are not fulfilled, the securities provided are used to satisfy the claims of the banks.

Financial liabilities to banks and other creditors have an average interest rate of approximately 1.75%. The financial liabilities as a whole do not contain any significant short-term interest rate risks as they relate either to loans with long-term fixed interest rates or variable-interest liabilities that are hedged using suitable derivative financial instruments (see [G55] Financial Risk Management).

Repayment of Bonds Under the European Medium-Term Notes Program (EMTN)

In January 2023, Vonovia implemented an open market repurchase to buy back bonds maturing in 2028, 2029 and 2033. An amount of € 53.6 million was bought back early within this context. A bond in the amount of € 403.4 million was repaid as planned in April 2023.

As part of its ongoing efforts to be proactive in managing its financial liabilities, Vonovia successfully completed a cash offer for a number of bonds. Out of the total nominal value offered by the bond investors amounting to approximately € 1.25 billion, Vonovia accepted the buyback of a nominal value of € 1.0 billion for a total value of € 892.0 million in July 2023. This corresponds to a discount of around 11%.

In July and September 2023, two bonds in the amount of € 391.6 million and € 351.9 million, respectively, were repaid as planned.

In December 2023, another bond worth € 876.4 million was repaid as planned.

Repayment of the U.S. Dollar Bond

In December 2023, the U.S. dollar corporate bond worth € 185.0 million was repaid as planned.

Repayment of Secured Financing of Deutsche Wohnen

Deutsche Wohnen repaid secured financing in the amount of € 281.8 million as scheduled in March 2023.

Repayment of Secured Financing of Vonovia

June 2023 saw Vonovia repay a secured financing arrangement in the amount of € 75.9 million on the final maturity date.

In December 2023, another secured financing arrangement worth € 462.0 million was repaid early.

Repayment of Promissory Note Loans

Vonovia repaid promissory note loans of € 120.0 million as scheduled in March 2023.

Extension of the Revolving Credit Facility (RCF)

Vonovia applied for an extension of the RCF in the amount of € 3,000.0 million by two years until 2026, and the application was approved by the bank in September 2023.

Secured Financing

In March 2023, Vonovia took out secured financing with Berlin Hyp in the amount of € 550.0 million with a maturity of ten years. The financing was disbursed in April 2023.

Vonovia also reached an agreement on secured financing of € 125.0 million with NordLB in June 2023, with disbursement in August 2023.

In June 2023, Vonovia concluded a secured financing agreement with a volume of € 130.0 million with UniCredit. A disbursement was made in the third quarter of 2023.

Another agreement on secured financing of € 175.0 million was reached with Berliner Sparkasse in July 2023, and was disbursed in the same month.

In December 2023, Vonovia SE concluded a ten-year secured financing arrangement with BayernLB for € 110.0 million, which was disbursed in the same month.

A secured financing agreement with Ärzteversorgung Westfalen Lippe for an amount of € 120.0 million with a term of 15 years was signed in December 2023 and disbursed in the same month.

Also in December 2023, a secured financing agreement with NordLB for an amount of € 50.0 million with a term of ten years was signed and again disbursed in the same month.

A secured financing agreement for € 150.0 million was signed with Ergo in December 2023, and will be disbursed over the coming year.

Unsecured Financing

On April 2023, Vonovia took out unsecured financing with Caixabank S.A. in the amount of € 150.0 million with a maturity of five years. The financing was disbursed in April 2023.

In September 2023, Vonovia took out an unsecured loan with UniCredit, BNP Paribas, JP Morgan and Société Générale in the amount of € 600.0 million with a maturity of two years.

The first installment of € 450.0 million from the unsecured loan taken out in 2022 with the European Investment Bank (EIB), in a total amount of € 600.0 million, was disbursed in September 2023.

Commercial Paper

Issues in the amount of € 500 million were outstanding under Vonovia SE’s commercial paper program as of December 31, 2023.

Adjusted EBT

Adjusted EBT is the Group’s leading indicator of profitability as of 2024. The IFRS profit for the period is reconciled to earnings before taxes (EBT). This EBT is adjusted to reflect special effects based on the definition that has applied to date (effects that do not relate to the period, recur irregularly or are atypical for business operations). The net financial result is also adjusted to reflect non-cash and actuarial valuation effects that recur irregularly. The further adjustments to reflect the effects of IAS 40 measurement, writedowns, other (Non Core/Other result), net income from non-current financial assets accounted for using the equity method and effects from residential properties held for sale produce the Group’s Adjusted EBT.

Adjusted EBITDA Development

The Adjusted EBITDA Development includes the gross profit from the development activities of “to sell” projects (income from sold development projects less production costs) and the gross profit from the development activities of “to hold” projects (fair value of the units developed for the company’s own portfolio less incurred production costs) less the operating expenses from the Development segment.

Adjusted EBITDA Recurring Sales

The Adjusted EBITDA Recurring Sales compares the proceeds generated from the privatization business with the fair values of assets sold and also deducts the related costs of sale. In order to disclose profit and revenue in the period in which they are incurred and to report a sales margin, the fair value of properties sold, valued in accordance with IFRS 5, has to be adjusted to reflect realized/unrealized changes in value.

Adjusted EBITDA Rental

The Adjusted EBITDA Rental is calculated by deducting the operating expenses of the Rental segment and the expenses for maintenance in the Rental segment from the Group’s rental income.

Adjusted EBITDA Total

Adjusted EBITDA Total is the result before interest, taxes, depreciation and amortization (including income from other operational investments and intragroup profits) adjusted for effects that do not relate to the period, recur irregularly and that are atypical for business operation, and for net income from fair value adjustments to investment properties. These non-recurring items include the development of new fields of business and business processes, acquisition projects, expenses for refinancing and equity increases (where not treated as capital procurement costs), IPO preparation costs and expenses for pre-retirement part-time work arrangements and severance payments. The Adjusted EBITDA Total is derived from the sum of the Adjusted EBITDA Rental, Adjusted EBITDA Value-add, Adjusted EBITDA Recurring Sales, Adjusted EBITDA Development and Adjusted EBITDA Deutsche Wohnen.

Adjusted EBITDA Value-add

The Adjusted EBITDA Value-add is calculated by deducting operating expenses from the segment’s income.

COSO

The Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a private-sector U.S. organization. It was founded in 1985. In 1992, COSO published the COSO model, an SEC-recognized standard for internal controls. This provided a basis for the documentation, analysis and design of internal control systems. In 2004, the model was further developed and the COSO Enterprise Risk Management (ERM) Framework was published. Since then, it has been used to structure and develop risk management systems.

Covenants

Requirements specified in loan agreements or bond conditions containing future obligations of the borrower or the bond obligor to meet specific requirements or to refrain from undertaking certain activities.

EPRA Key Figures

For information on the EPRA key figures, we refer to the chapter on segment reporting according to EPRA.

EPRA NTA

The presentation of the NTA based on the EPRA definition aims to show the net asset value in a long-term business model. NTA stands for Net Tangible Assets. The equity attributable to Vonovia’s shareholders is adjusted by deferred taxes, real estate transfer tax and other purchasers’ costs in relation to the existing portfolio and the fair value of derivative financial instruments after taking deferred taxes into account. Stated goodwill and other intangible assets are also deducted.

European Public Real Estate Association (EPRA)

The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.

European Public Real Estate Association (EPRA)

The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.

Fair Value

Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

Fair Value

Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

Fair Value

Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

Fair Value

Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

GAV

The Gross Asset Value (GAV) of the recognized real estate investments. This consists of the owner-occupied properties, the investment properties including development to hold, the assets held for sale and the development to sell area. In the latter, both residential properties for which a purchase contract has been signed and those with the intention to sell – i.e., a purchase contract has not yet been signed – are included.

GAV

The Gross Asset Value (GAV) of the recognized real estate investments. This consists of the owner-occupied properties, the investment properties including development to hold, the assets held for sale and the development to sell area. In the latter, both residential properties for which a purchase contract has been signed and those with the intention to sell – i.e., a purchase contract has not yet been signed – are included.

Group FFO

Group FFO reflects the recurring earnings from the operating business. In addition to the adjusted EBITDA for the Rental, Value-add, Recurring Sales and Development segments, Group FFO allows for recurring current net interest expenses from non-derivative financial instruments as well as current income taxes. This key figure is not determined on the basis of any specific international reporting standard but is to be regarded as a supplement to other performance indicators determined in accordance with IFRS.

Maintenance

Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.

Maintenance

Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.

Maintenance

Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.

Maintenance

Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.

Vacancy Rate

The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.

Vacancy Rate

The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.

Vacancy Rate

The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.

Vacancy Rate

The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.

LTV Ratio (Loan-to-Value Ratio)

The LTV ratio shows the extent to which financial liabilities are covered. It shows the ratio of non-derivative financial liabilities pursuant to IFRS, less foreign exchange rate effects, cash and cash equivalents less advance payments received by Development (period-related), receivables from disposals, plus purchase prices for outstanding acquisitions to the total fair values of the real estate portfolio, fair values of the projects/land currently under construction as well as receivables from the sale of real estate inventories (period-related) plus the fair values of outstanding acquisitions and investments in other real estate companies.

MFH Sales

We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This portfolio involves the sale of multifamily homes that are not proving profitable (MFH Sales).

Rental Income

Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.

Rental Income

Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.

Modernization Measures

Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.

Modernization Measures

Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.

Modernization Measures

Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.

Modernization Measures

Modernization measures are long-term and sustainable value-enhancing investments in housing and building stocks. Energy-efficient refurbishments generally involve improvements to the building shell and communal areas as well as the heat and electricity supply systems. Typical examples are the installation of heating systems, the renovation of balconies and the retrofitting of prefabricated balconies as well as the implementation of energy-saving projects, such as the installation of double-glazed windows and heat insulation, e.g., facade insulation, insulation of the top story ceilings and basement ceilings. In addition to modernization of the apartment electrics, the refurbishment work upgrades the apartments, typically through the installation of modern and/or accessible bathrooms, the installation of new doors and the laying of high-quality and non-slip flooring. Where required, the floor plans are altered to meet changed housing needs.

Monthly In-place Rent

The monthly in-place rent is measured in euros per square meter and is the current gross rental income per month for rented units as agreed in the corresponding rent agreements at the end of the relevant month before deduction of non-transferable ancillary costs divided by the living area of the rented units. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.

The in-place rent is often referred to as the “Nettokaltmiete” (net rent excl. ancillary costs such as heating, etc.). The monthly in-place rent (in € per square meter) on a like-forlike basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia 12 months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-forlike basis. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at the organic increase in rent.

Monthly In-place Rent

The monthly in-place rent is measured in euros per square meter and is the current gross rental income per month for rented units as agreed in the corresponding rent agreements at the end of the relevant month before deduction of non-transferable ancillary costs divided by the living area of the rented units. The rental income from the Austrian property portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the portfolio in Sweden reflects inclusive rents, meaning that the amounts contain operating and heating costs.

The in-place rent is often referred to as the “Nettokaltmiete” (net rent excl. ancillary costs such as heating, etc.). The monthly in-place rent (in € per square meter) on a like-forlike basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia 12 months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-forlike basis. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at the organic increase in rent.

Sustainability Performance Index (SPI)

Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.

Sustainability Performance Index (SPI)

Index to measure non-financial performance. Vonovia’s sustainable activities are geared towards the top sustainability topics that we have identified, which are bundled in the Sustainability Performance Index. The Customer Satisfaction Index (CSI) is included in the calculation of the Sustainability Performance Index. The CSI is determined at regular intervals in systematic customer surveys conducted by an external service provider and shows the effectiveness and sustainability of our services for the customer. Other indicators used in the Sustainability Performance Index are the carbon savings achieved annually in housing stock, the energy efficiency of new buildings, the share of accessible (partial) modernization measures in relation to newly let apartments, the increase in employee satisfaction and diversity in the company’s top management team.

Net Debt/EBITA

Net Debt/EBITDA reflects average adjusted net debt in relation to the Adjusted EBITDA Total.

Non-core Disposals

We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This includes the sale, only as and when the right opportunities present themselves, of entire buildings or land (Non-core Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.

Operating Free Cash-Flow

The Adjusted EBT will be used as a basis for a reconciliation to the Operating Free Cash Flow (OFCF) as the leading indicator of internal financing. Depreciation and amortization will be added to Adjusted EBT, and the liquidity contribution made by the Recurring Sales segment, as well as the change in working capital, will be taken into account. Capitalized maintenance and dividend payments made to parties outside of the Group, as well as income tax paid, are subtracted from this figure. This operating free cash flow is a measure of the Group’s operational capacity to generate cash surpluses and, as a result, of its internal financing power.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Rating

Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.

Recurring Sales

The Recurring Sales segment includes the regular and sustainable disposals of individual condominiums from our portfolio. It does not include the sale of entire buildings or land (Non-core Disposals). These properties are only sold as and when the right opportunities present themselves, meaning that the sales do not form part of our operating business within the narrower sense of the term. Therefore, these sales will be reported under “Other” in our segment reporting.

Fair Value Step-up

Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.

Fair Value Step-up

Fair value step-up is the difference between the income from selling a unit and its current fair value in relation to its fair value. It shows the percentage increase in value for the company on the sale of a unit before further costs of sale.

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Cash-generating Unit (CGU)

The cash-generating unit refers, in connection with the impairment testing of goodwill, to the smallest group of assets that generates cash inflows and outflows independently of the use of other assets or other cash-generating units (CGUs).

Non-core

We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This includes the sale, only as and when the right opportunities present themselves, of entire buildings or land (Non-core Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.

Non-core

We also report on the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This includes the sale, only as and when the right opportunities present themselves, of entire buildings or land (Non-core Disposals) that are likely to have below-average development potential in terms of rent growth in the medium term and are located in areas that can be described as peripheral compared with Vonovia’s overall portfolio and in view of future acquisitions.