38 Total Equity
Accounting Policies
Other comprehensive income includes changes in total comprehensive income not affecting net income except that resulting from capital transactions with equity holders (e.g., capital increases or dividend distributions). Vonovia includes under this item unrealized gains and losses from the fair value measurement of equity instruments and derivative financial instruments that are designated as cash flow hedges. The item also includes actuarial gains and losses from defined benefit pension commitments as well as certain currency translation differences.
The other reserves contain cumulative changes in equity not affecting income. At Vonovia, the effective portion of the net change in the fair value of cash flow hedging instruments, the equity instruments at fair value as well as currency translation differences are recognized in other comprehensive income.
The other reserves from cash flow hedges and from currency translation differences can be reclassified. When the underlying hedged item of the cash flow hedge affects net income, the reserves attributable thereto are reclassified to profit or loss. If a foreign business is disposed of, the reserves attributable thereto are reclassified.
Development of the Subscribed Capital
Development of the Subscribed Capital | |||
in € | |||
As of Jan. 1, 2023 | 795,849,997.00 | ||
Capital increase against non-cash contributions on June 13, 2023 (scrip dividend) | 18,795,001.00 | ||
As of Dec. 31, 2023 | 814,644,998.00 | ||
Development of the Capital Reserves
Development of the Capital Reserves | |||
in € | |||
As of Jan. 1, 2023 | 5,151,544,376.12 | ||
Premium from capital increase for scrip dividend on June 13, 2023 | 284,744,265.15 | ||
Transaction costs on the issue of new shares (after allowing for deferred taxes) | -572,376.86 | ||
Withdrawal from capital reserve | -2,754,094,202.92 | ||
Other changes not affecting net income | -383,429.66 | ||
As of Dec. 31, 2023 | 2,681,238,631.83 | ||
Dividend
The Annual General Meeting held on May 17, 2023, resolved to pay a dividend for the 2022 fiscal year in the amount of € 0.85 per share, or € 676,472,497.45 in total.
As in previous years, shareholders were offered the option of choosing between being paid the dividend in cash or being granted new shares. During the subscription period, shareholders holding a total of 44.87% of the shares carrying dividend rights opted for the scrip dividend instead of the cash dividend. As a result, 18,795,001 new shares were issued using the company’s authorized capital pursuant to Section 5.1 of the Articles of Association (“2022 authorized capital”) at a subscription price of € 16.15, i.e., a total amount of € 303,539,266.15. The total amount of the dividend distributed in cash therefore came to € 372,933,231.30.
Authorized Capital
After being used in connection with the capital increase in 2023, the 2022 authorized capital fell by € 18,795,001.00 from € 233,000,000.00 to € 214,204,999.00 as of December 31, 2023. Shareholder subscription rights for the 2022 authorized capital can be excluded.
Retained Earnings
Retained earnings of € 19,751.0 million (December 31, 2022: € 25,605.1 million) were reported as of December 31, 2023. This figure includes actuarial gains and losses of € -3.4 million (December 31, 2022: € 22.7 million), which cannot be reclassified and therefore may no longer be recognized in profit or loss in subsequent reporting periods.
Other Reserves
Changes in other comprehensive income during the period in the amount of € -120.3 million (2022: € -359.8 million) are mainly the result of the development of cash flow hedges in the amount of € -93.0 million(2022: € 54.0 million).
Non-controlling Interests
Shares of third parties in Group companies are recognized under non-controlling interests.
On May 31, 2023, Vonovia sold shares of 34.5%, or calculated approximately 27.6%, in a selected portfolio to Apollo Capital Management L.P. for € 986.8 million (Südewo transaction). This resulted in the addition of non-controlling interests of € 760.4 million. The corresponding difference increased the company’s retained earnings by € 226.4 million.
A call option that Vonovia can exercise to buy the shares back was agreed as part of the transaction. The initial measurement as of the transaction date produced a market value of € 374.0 million. As this option was agreed as part of the transaction, it was also recognized outside profit or loss in retained earnings upon initial recognition.
Directly attributable transaction costs associated with the Südewo transaction in the amount of € 30.1 million were recognized under retained earnings, not affecting net income.
On December 31, 2023, Vonovia sold shares of 30.12%, or calculated approximately 25.0%, in a selected portfolio to Apollo Capital Management L.P. for € 1,000.0 million (northern Germany transaction). This resulted in the addition of non-controlling interests of € 821.5 million. The corresponding difference increased the company’s retained earnings by € 178.5 million.
A call option that Vonovia can exercise to buy the shares back was agreed as part of the transaction. The initial measurement as of the transaction date produced a market value of € 374.0 million. As this option was agreed as part of the transaction, it was also recognized outside profit or loss in retained earnings upon initial recognition.
Directly attributable transaction costs associated with the northern Germany transaction in the amount of € 45.4 million were recognized under retained earnings, not affecting net income.
Non-controlling interests rose by € 1,154.7 million in the 2023 fiscal year, from € 3,107.3 million as of January 1, 2023, to € 4,262.0 million as of December 31, 2023. This increase is primarily attributable to the sale of shares to Apollo Capital Management L.P. and, with the opposite effect, to the profit for the period attributable to non-controlling interests.
The combined subgroup financial information, prepared in accordance with Vonovia’s accounting policies, for the Deutsche Wohnen Group as a major subsidiary with non-controlling interests and its registered headquarters in Berlin is as follows:
The combined financial information for the Deutsche Wohnen Group
in € million | Dec. 31, 2022 Deutsche Wohnen Group (adjusted) | Dec. 31, 2023 Deutsche Wohnen Group | |||
Revenue | 1,307.3 | 1,410.0 | |||
Profit for the period | -424.8 | -2,526.8 | |||
attributale to non-controlling interests | -59.2 | -361.7 | |||
Other comprehensive income | 21.5 | -5.8 | |||
attributale to non-controlling interests | 2.3 | -0.8 | |||
Total non-current assets | 28,151.7 | 23,749.7 | |||
Total current assets | 2,394.7 | 3,082.5 | |||
thereof cash and cash equivalents | 184.3 | 157.1 | |||
Total non-current liabilities | 14,584.5 | 12,987.6 | |||
Total current liabilities | 44.2 | 419.2 | |||
Total equity | 15,917.7 | 13,425.4 | |||
Cash flow from operating activities | 364.9 | 384.8 | |||
Cash flow from investing activities | 5.2 | 291.3 | |||
Cash flow from financing activities | -862.5 | 658.9 | |||
Net changes in cash and cash equivalents of discontinued operations | – | 44.4 | |||
Net changes in cash and cash equivalents | -492.4 | 17.2 | |||
Dividend | 0.04 | 0.04 | |||