Results of Operations
Overview
The following key figures provide an overview of how Vonovia’s results of operations and their drivers developed in the 2023 fiscal year.
Key Figures on Results of Operations
in € million | 2022* | 2023 | Change in % | |||
Total Segment Revenue (continuing operations)* | 5,566.2 | 5,151.1 | -7.5 | |||
Revenue in the Rental segment | 3,186.7 | 3,253.4 | 2.1 | |||
Revenue in the Value-add segment | 1,272.0 | 1,224.7 | -3.7 | |||
Revenue in the Recurring Sales segment | 543.4 | 319.3 | -41.2 | |||
Revenue in the Development segment* | 564.1 | 353.7 | -37.3 | |||
Total Segment Revenue from discontinued operations | 256.8 | 266.8 | 3.9 | |||
Adjusted EBITDA Total (continuing operations)* | 2,606.1 | 2,583.8 | -0.9 | |||
Adjusted EBITDA Rental | 2,254.3 | 2,401.7 | 6.5 | |||
Adjusted EBITDA Value-add | 126.7 | 105.5 | -16.7 | |||
Adjusted EBITDA Recurring Sales | 135.1 | 63.4 | -53.1 | |||
Adjusted EBITDA Development* | 90.0 | 13.2 | -85.3 | |||
Adjusted EBITDA from discontinued operations | 63.8 | 53.9 | -15.5 | |||
Group FFO (continuing operations) | 1,981.6 | 1,801.6 | -9.1 | |||
Monthly in-place rent in €/m² | 7.49 | 7.74 | 3.3 | |||
Average area of own apartments in the reporting period | 34,525 | 34,349 | -0.5 | |||
Average number of own units (number of units) | 550,342 | 547,905 | -0.4 | |||
Vacancy rate (in %) | 2.0 | 2.0 | – | |||
Maintenance expenses and capitalized maintenance (€/m²) | 24.81 | 21.03 | -15.2 | |||
thereof expenses for maintenance (€/m²) | 12.86 | 12.41 | -3.5 | |||
thereof capitalized maintenance (€/m²) | 11.95 | 8.62 | -27.9 | |||
Number of units bought | 969 | 63 | -93.5 | |||
Number of units sold | 19,760 | 3,838 | -80.6 | |||
thereof Recurring Sales | 2,710 | 1,590 | -41.3 | |||
thereof Non Core/other | 17,050 | 2,248 | -86.8 | |||
Number of new apartments completed | 3,749 | 2,425 | 29.4 | |||
thereof own apartments | 2,071 | 1,309 | -36.8 | |||
thereof apartments for sale | 1,678 | 1,116 | -33.5 | |||
Number of employees (as of December 31) | 12,117 | 11,977 | -1.2 | |||
- *Previous year’s values (
2022) adjusted to current key figure and segment definition -> [A2] Adjustment to Prior-year Figures.
In the 2023 fiscal year, total segment revenue (continuing operations) came to € 5,151.1 million, down by 7.5% on the value for the previous year (€ 5,566.2 million). This decline was due primarily to lower sales in the Recurring Sales segment and lower proceeds from the sale of real estate inventories due to volume-related aspects.
Total Segment Revenue
Total Segment Revenue | ||||||
in € million | 2022* | 2023 | Change in % | |||
Rental income | 3,191.4 | 3,259.6 | 2.1 | |||
Other income from property management unless included in the operating expenses in the Rental segment | 118.2 | 129.8 | 9.8 | |||
Income from disposals Recurring Sales | 515.8 | 314.8 | -39.0 | |||
Internal revenue Value-add | 1,152.4 | 1,093.8 | -5.1 | |||
Income from disposal of properties | 588.4 | 353.1 | -40.0 | |||
Total Segment Revenue (continuing operations) | 5,566.2 | 5,151.1 | -7.5 | |||
- *Previous year’s values (
2022) adjusted to current key figure and segment definition -> [A2] Adjustment to Prior-year Figures.
The following key figures provide an overview of the development in Group FFO and other value drivers in the reporting period.
Group FFO
Group FFO | ||||||
in € million | 2022* | 2023 | Change in % | |||
Revenue in the Rental segment | 3,186.7 | 3,253.4 | 2.1 | |||
Expenses for maintenance | -443.9 | -426.2 | -4.0 | |||
Operating expenses in the Rental segment | -488.5 | -425.5 | -12.9 | |||
Adjusted EBITDA Rental | 2,254.3 | 2,401.7 | 6.5 | |||
Revenue in the Value-add segment | 1,272.0 | 1,224.7 | -3.7 | |||
thereof external revenue | 119.6 | 130.9 | 9.4 | |||
thereof internal revenue | 1,152.4 | 1,093.8 | -5.1 | |||
Operating expenses in the Value-add segment | -1,145.3 | -1,119.2 | -2.3 | |||
Adjusted EBITDA Value-add | 126.7 | 105.5 | -16.7 | |||
Revenue in the Recurring Sales segment | 543.4 | 319.3 | -41.2 | |||
Fair value of properties sold adjusted to reflect effects not relating to the period from assets held for sale in the Recurring Sales segment | -391.6 | -239.4 | -38.9 | |||
Adjusted result Recurring Sales | 151.8 | 79.9 | -47.4 | |||
Selling costs in the Recurring Sales segment | -16.7 | -16.5 | -1.2 | |||
Adjusted EBITDA Recurring Sales | 135.1 | 63.4 | -53.1 | |||
Revenue from disposal of Development to sell properties | 560.6 | 348.6 | -37.8 | |||
Cost of Development to sell | -440.4 | -300.9 | -31.7 | |||
Gross profit Development to sell | 120.2 | 47.7 | -60.3 | |||
Rental revenue Development | 3.5 | 5.1 | 45.7 | |||
Operating expenses in the Development segment | -33.7 | -39.6 | 17.5 | |||
Adjusted EBITDA Development* | 90.0 | 13.2 | -85.3 | |||
Adjusted EBITDA Total (continuing operations)* | 2,606.1 | 2,583.8 | -0.9 | |||
FFO interest expense* | -492.6 | -619.6 | 25.8 | |||
Current income taxes FFO | -136.6 | -180.3 | 32.0 | |||
Intragroup losses* | 4.7 | 17.7 | >100 | |||
Group FFO (continuing operations)* | 1,981.6 | 1,801.6 | -9.1 | |||
Group FFO per share (continuing operations) in €** | 2.51 | 2.23 | -11.1 | |||
Group FFO after non-controlling interests | 1,895.0 | 1,717.8 | -9.4 | |||
Group FFO after non-controlling interests per share in €** | 2.40 | 2.13 | -11.4 | |||
Group FFO (discontinued operations) | 54.0 | 45.5 | -15.7 | |||
- *Previous year’s values (2022) adjusted to current key figure and segment definition -> [A2] Adjustment to Prior-year Figures.
- **Based on the weighted average number of shares carrying dividend rights.
At the end of 2023, Vonovia managed a portfolio comprising 545,919 of its own residential units (2022: 548,524), 164,330 garages and parking spaces (2022: 164,330) and 8,691 commercial units (2022: 8,838). 71,424 residential units (2022: 72,779) were also managed for other owners.
Details on Results of Operations by Segment
Rental Segment
The Rental segment showed positive development overall in the 2023 fiscal year. At the end of 2023, the portfolio had a vacancy rate of 2.0% (end of 2022: 2.0%), meaning that it was nearly fully occupied.
In the 2023 financial year, Rental segment revenue increased by 2.1% to € 3,253.4 million (2022: € 3,186.7 million). Of the segment revenue in the Rental segment in the 2023 reporting period, € 2,790.1 million is attributable to rental income in Germany (2022: € 2,717.9 million), € 341.6 million to rental income in Sweden (2022: € 354.5 million) and € 121.7 million to rental income in Austria (2022: € 114.3 million).
Organic rent growth (twelve-month rolling) totaled 3.8% (3.3% as of December 31, 2022). The current rent increase due to market-related factors came to 2.3% (1.0% as of December 31, 2022) and the increase from property value improvements translated into a further 1.0% (1.6% as of December 31, 2022). All in all, this produced a like-for-like rent increase of 3.3% (2.6% as of December 31, 2022). New construction measures and measures to add extra stories also contributed 0.5% (0.7% as of December 31, 2022) to organic rent growth.
The average monthly in-place rent within the Rental segment at the end of 2023 came to € 7.74 per sqm compared to € 7.49 per sqm as of December 31, 2022. The monthly in-place rent in the German portfolio at the end of December 2023 came to € 7.63 per sqm (December 31, 2022: € 7.40 per sqm), with a figure of € 10.18 per sqm (December 31, 2022: € 9.73 per sqm) for the Swedish portfolio and € 5.47 per sqm for the Austrian portfolio (December 31, 2022: € 5.18 per sqm). The rental income from the portfolio in Sweden reflects all-inclusive rents, meaning that the amounts contain operating, heating and water supply costs.
We adapted our modernization, new construction and maintenance strategy to reflect the current overall financial conditions in the 2023 fiscal year. The overview below provides details on maintenance, modernization and new construction.
Maintenance, Modernization and New Construction
Maintenance, Modernization and New Construction | ||||||
in € million | 2022* | 2023 | Change in % | |||
Expenses for maintenance | 443.9 | 426.2 | -4.0 | |||
Capitalized maintenance | 412.6 | 296.3 | -28.2 | |||
Maintenance measures | 856.5 | 722.5 | -15.6 | |||
Modernization measures | 837.4 | 470.8 | -43.8 | |||
New construction (to hold) | 572.4 | 291.2 | -49.1 | |||
Modernization and new construction measures | 1,409.8 | 762.0 | -45.9 | |||
Total cost of maintenance, modernization and | 2,266.3 | 1,484.5 | -34.5 | |||
- * Previous year’s values (2022) adjusted to current key figure and segment definition -> [A2] Adjustment to Prior-year Figures.
Operating expenses in the Rental segment in the 2023 fiscal year were down by 12.9% on the figures for the prior year, from € 488.5 million to € 425.5 million. This is due primarily to synergies achieved and positive one-off effects as part of the integration of Deutsche Wohnen. All in all, the Adjusted EBITDA Rental came to € 2,401.7 million in the 2023 fiscal year, up by 6.5% on the prior-year value of € 2,254.3 million.
Value-add Segment
Developments in the Value-add segment were dominated by the new overall conditions for our own craftsmen’s organization. The reduced volume of modernization work, general price increases for construction services and materials, as well as productivity losses due to smaller-scale investments and increased costs due to a change to new technology (switch from gas heating to heat pumps) had a negative impact on economic development. Energy sales, on the other hand, developed positively.
In the Value-add segment, income totaled € 1,224.7 million in the 2023 fiscal year, down by 3.7% on the prior-year figure of € 1,272.0 million. External revenue from our Value-add activities with our end customers rose by 9.4% from € 119.6 million in 2022 to € 130.9 million in 2023. This was due primarily to higher revenue from energy sales. Group revenue fell by 5.1% in the 2023 fiscal year from € 1,152.4 million in 2022 to € 1,093.8 million. This is mainly due to the reduced volume of modernization measures in 2023.
In the 2023 fiscal year, operating expenses in the Value-add segment were down by 2.3% on the figures for the prior year, from € 1,145.3 million to € 1,119.2 million.
The Adjusted EBITDA Value-add came to € 105.5 million in the 2023 fiscal year, 16.7% below the prior-year figure of € 126.7 million.
Recurring Sales Segment
In the Recurring Sales segment, income from the disposal of properties in the 2023 fiscal year was down to € 319.3 million, 41.2% lower than the 2022 value of € 543.4 million due to volume-related factors, with 1,590 units sold (2022: 2,710), 1,201 of which were in Germany (2022: 2,293) and 389 of which were located in Austria (2022: 417). Income of € 214.6 million is attributable to sales in Germany (2022: € 430.8 million) and € 104.7 million to sales in Austria (2022: € 112.6 million).
The fair value step-up came in at 33.4% in the 2023 fiscal year, down on the prior-year value of 38.8%. This was due primarily to lower step-ups for sales in Germany.
Selling costs in the Recurring Sales segment came in at € 16.5 million in 2023, almost on a par with the previous year.
Adjusted EBITDA Recurring Sales came in at € 63.4 million in the 2023 fiscal year, down significantly on the value of € 135.1 million seen in the prior year.
In the 2023 fiscal year, 2,248 residential units from the Non Core/Other portfolio (2022: 17,050) were sold as part of our portfolio adjustment measures, with proceeds totaling € 553.7 million (2022: € 2,726.8 million). At 1.1% in 2023, the fair value step-up for Non Core/Other was lower than for the previous year at 1.7%.
Development Segment
Economic development in the Development segment was hit primarily by the increased construction costs and interest rates in the reporting period.
In the Development to sell area, a total of 1,116 units were completed in the 2023 fiscal year (2022: 1,678 units), 760 in Germany (2022: 484 ) and 356 in Austria (2022: 1,194 units). Income from the disposal of development properties to sell came to € 348.6 million in the 2023 fiscal year (2022: € 560.6 million), with € 296.7 million attributable to project development in Germany (2022: € 257.1 million) and € 51.9 million attributable to project development in Austria (2022: € 303.5 million). The prior-year figures included a global exit (Gäblerstrasse). The resulting gross profit from Development to sell came to € 47.7 million in the 2023 financial year with a margin of 13.7% (2022: € 120.2 million, margin 21.4%).
Development operating expenses came to € 39.6 million in the 2023 fiscal year, 17.5% above the prior-year value of € 33.7 million mainly due to non-capitalizable property development expenses.
The Adjusted EBITDA for the Development segment amounted to € 13.2 million in the 2023 reporting period (2022: € 90.0 million).
In the Development to hold area, a total of 1,309 units were completed in 2023 (2022: 2,071 units), 839 in Germany (2022: 1,338 units), 296 in Austria (2022: 592 units) and 174 in Sweden (2022: 141 units).