Report of the Supervisory Board

Dear readers,

In an environment characterized by a marked decline in property valuations, stabilizing the balance sheet has recently been one of the main tasks on Vonovia SE’s agenda. The company found a key component of a solution in successfully implementing an extensive apartment sale program. At the same time, the markets stabilized: Home prices have barely fallen recently. They have since bottomed out and are now poised for a recovery.

Meanwhile, the company continued to reliably go about its core business – with very satisfactory results: All key performance indicators developed in line with expectations. Vonovia’s customers rewarded the company with higher customer satisfaction scores for its reliable support as a partner in challenging times.

The Management Board also started setting the course for growth again. We, on the Supervisory Board appreciate everything the Management Board has done to steer the company in the right direction and support its plans to further expand Vonovia’s business.

In the 2024 fiscal year, we, as the company’s supervisory body, continuously monitored the Management Board’s management activities and provided the Management Board with regular advice concerning the running of the company. We were able at all times to establish that their actions were lawful, expedient and regular. The Management Board notified us regularly, promptly and comprehensively, both in writing and verbally, of all circumstances and measures that were relevant to the company. The Management Board fulfilled its information obligations to an appropriate extent at all times.

At our plenary meetings and in our committees, we always had ample opportunity to appraise the reports and proposals submitted by the Management Board and to provide constructive suggestions. We discussed and tested the plausibility of all business occurrences of significance to the company, as communicated to us by the Management Board in written and verbal reports, in detail. Where required by law or the Articles of Association, we granted our consent to individual business transactions.

Cooperation Between the Management Board and the Supervisory Board

The Supervisory Board consisted of ten members in the past fiscal year. We were on hand to support the Management Board in the various meetings held and also in its key decisions. We also kept a close eye on the company’s business development outside of meetings. The Management Board regularly informed us about key events and discussed the company’s strategic direction with us as part of a collaboration based on trust. As Chair of the Supervisory Board, I also maintained regular and close dialogue with the Chairman of the Management Board in particular, but also with the other Management Board members, even outside of the Supervisory Board meetings.

The employee representative bodies were involved in communications on key company matters via the Management Board. The Chairman of the Management Board updated me on company-related topics emerging from the Management Board’s discussions with representatives of the Group works council, going into an appropriate level of detail. I/we passed on any important findings to, and discussed them with, the other members of the Supervisory Board promptly, or at the latest at the next board meeting.

Effectiveness Review

The Supervisory Board performs annual effectiveness reviews as self-evaluations, with the support of an experienced and certified external consultancy firm, to reflect on, and optimize, its own work.

A more extensive review is carried out every three years. The process is based on a digital questionnaire and involves interviews with Management Board members.

After an extensive effectiveness review was conducted in 2023, the 2024 effectiveness review was also conducted with an external consultant with the help of a digital questionnaire.

One key aspect of the effectiveness review involved evaluating the Supervisory Board’s decision-making processes and internal communication. The way in which information is shared and decisions are made, as well as the quality of discussions within the Supervisory Board, were closely examined. These aspects were also compared against best practice and international benchmarks. Strengths were identified and areas offering further room for improvement were flagged, as well.

Among the main findings:

• Vonovia’s Supervisory Board ranks in the top quartile of all of the companies evaluated.
• The Supervisory Board has improved in most categories. The external provider described these improvements as “significant.”
• Main strengths include: composition of the Supervisory Board, structure and organization of work within the Supervisory Board, ability to deal with conflict, trust and team spirit on the Supervisory Board and with the Management Board.
• Potential for improvement will be included in the Supervisory Board’s work.

The Supervisory Board ultimately received confirmation that the effectiveness of its work is above-average virtually across the board. Our Supervisory Board works efficiently both in plenary sessions and in its committees.

In the first quarter of 2025, we will revisit the evaluation results separately in a Supervisory Board meeting to discuss and make decisions on the implementation of the recommended actions.

Onboarding

There is an onboarding process in place for new Supervisory Board members that is followed every time a new member is appointed. The onboarding process includes the provision of information material and documents on the company, including annual reports, analyst presentations, detailed overviews of Supervisory Board meetings, the Articles of Association, the organizational chart and dates of upcoming Supervisory Board meetings as well as information on legal issues, in particular obligations related to the Supervisory Board mandate. Onboarding also involves familiarizing members with the company’s regional structures, including various Vonovia properties and regional management. Every Management Board member also organizes an individual meeting with the new members. The structured onboarding process ensures that new Supervisory Board members are thoroughly introduced to their responsibilities.

Further Training Within the Supervisory Board

In order to ensure that they were adequately informed to perform their responsibilities on the Supervisory Board and in the committees, the members of the Supervisory Board completed four training sessions on the following topics in the 2024 fiscal year: rent trends and rent regulation (March 12, 2024), succession planning (June 4, 2024), building type E – an innovative approach to cost-effective construction (September 2, 2024) and the remuneration system (September 16, 2024). The training sessions were conducted by internal and external experts. Vonovia SE assumed the full cost of the training.

Main Remit

In line with the duties assigned to the Supervisory Board by law, the Articles of Association and the rules of procedure, we once again closely scrutinized the Group’s operational, economic and strategic progress in the 2024 fiscal year. The main issues covered included the development of overall conditions on the markets and changes in the capital market environment as well as their impact on portfolio and new investments. We also discussed the topics of digitalization, portfolio strategy and regulation with the Management Board in detail. Once again, the topic of governance was a key issue for the Supervisory Board.

We also took an in-depth look at the future structure and expertise matrix of the Supervisory Board and the Management Board. As far as the Management Board is concerned, we discussed the management structure, including possible succession arrangements.

The Chair of the Supervisory Board is engaged in dialogue with the relevant investors on governance issues as part of regular Governance Roadshows. Last year, these were held in February and October. At the Governance Roadshow that was held in October, the Supervisory Board presented its thoughts regarding the planned adjustments to the Management Board remuneration system. Suggestions from an investor perspective were registered and implemented as part of the dialogue.

Meetings

In the 2024 fiscal year, the Supervisory Board met six times to consult and pass resolutions: four times at face-to-face meetings (March, May, September, December) and twice via conference call (October, December). The Committee made decisions using a written circular in three cases (twice in July and once in December).

Any individual members absent from the six meetings had always been excused and these absences were work-related. The absent members looked at the meeting documents in detail and participated in the decisions made by issuing voting instructions to the Chair of the Supervisory Board.

The attendance rate for Supervisory Board and committee meetings averaged 97%. No member of the Supervisory Board took part in less than half of the meetings during their term of office. The same applies to participation in committee meetings. In preparation for the meetings, the Management Board submitted written reports and resolution proposals to us in good time.

Information on the Individual Meetings and Written Resolutions

On March 14, 2024, the Supervisory Board met to adopt the statement of financial position. We approved the company’s annual and consolidated financial statements as of December 31, 2023, including the combined management report. We also approved the Non-financial Declaration together with the Declaration of Conformity, approved the Supervisory Board report and adopted the remuneration report for 2023.

We approved the proposal made to the Annual General Meeting regarding the resolution on the appropriation of profit, granting a fundamental right to choose between a cash dividend and a scrip dividend. Given the net loss for the year, we decided to offset the net loss for the year against the profit carried forward at the Annual General Meeting in order to allow Vonovia to pay the dividend. We also took this as an opportunity to discuss the dividend policy with regard to the planned adjustments to the management system.

We approved the recommendation made by the Audit Committee to appoint PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft in Frankfurt am Main (PwC) as the auditor of the annual and consolidated financial statements for the 2024 fiscal year, and as the auditor for the review of interim financial reports for the 2024 fiscal year and the first quarter of 2025. We also approved PwC’s work to prepare for a subsequent audit of the ESG reporting until its formal appointment following the entry into force of a corresponding statutory provision.

The Supervisory Board discussed the reports from the committees: We examined the results of the Supervisory Board’s effectiveness review and passed a resolution to propose to the Annual General Meeting that Ms. Birgit M. Bohle be elected to the Supervisory Board until the end of the 2028 Annual General Meeting. We also passed a resolution regarding the reappointment of the Management Board member Mr. Philip Grosse for a further three-year term of office following the expiry of his term of office on December 31, 2024.

In addition, we discussed and passed a resolution on the adjustments to the Management Board remuneration system. These adjustments were prompted by the change in the management system initiated by the Management Board with effect from January 1, 2024: The replacement of Group FFO by Adjusted EBT, and the decision no longer to report Group FFO, meant that the performance criteria for the short-term and long-term incentive plan had to be adjusted, while at the same time keeping the CAGR target for the LTI tranches from 2021 to 2023. We passed a resolution on the remuneration to be paid to members of the Management Board for the 2023 fiscal year, target achievement levels and corresponding payments.

We also discussed the operating and financial performance of the company and the segments, sales topics (including the Care portfolio), the introduction of the new management system, the CSI and the status of various projects, such as the transformation of the housing stock from an energy efficiency perspective. We also discussed the annual audit report and topics related to the internal control system (ICS) and compliance.

On May 7, 2024, the Supervisory Board held an ordinary meeting on the day before the Annual General Meeting. Among other things, we decided to appoint Ms. Birgit M. Bohle as a member of the Strategy, Finance and Sustainability Committee, provided that the Annual General Meeting approved her election to the Supervisory Board.

At its meeting on July 19, 2024, the Supervisory Board used a written circular to approve a new distribution of duties proposed by the Management Board with effect from September 1, 2024. This streamlined the organization and ensured balanced areas of responsibility taking related topics into account.

We also used the meeting on July 19, 2024, to use a written circular to adopt Mr. Daniel Riedl’s STI targets at the level of BUWOG.

On September 9 and 10, 2024, we discussed the company’s strategy in detail. Together with the Management Board, we used both parts of the meeting to discuss the company’s situation, the market environment and Vonovia’s future direction over the next five years. The Management Board explained current and planned measures to stabilize the balance sheet, further develop the operating units and expand the company’s earnings base. Growth is to be boosted by stabilizing performance, stepping up technology-driven investments and establishing new business. We supported the Management Board in its strategic approach, and agreed with the Management Board that balance sheet stability should definitely be ensured and that perception on the capital market should be supported by appropriate communication. We shared our conviction that successful implementation of the company’s targets would require ongoing close cooperation with municipal (housing) associations, trade unions, associations, the federal states and the German government.

We also used this meeting to discuss the topics being addressed by the committees: These included contractual and remuneration matters related to the Management Board, effectiveness and expertise reviews in the Supervisory Board, and the succession planning process for both boards. External expertise was sought in these areas to ensure quality and appropriate results. Other topics included the status of the company’s sales activities, the development in the value of the portfolio and the financial rating.

The extraordinary meeting held as a conference call on October 9, 2024 was used to discuss, and pass a resolution on, the sale of a minority stake in Deutsche Wohnen SE via a holding structure to an investment company whose funds are made available by insurance companies and other long-term investors advised by Apollo.

At a face-to-face meeting held on December 9 and 10, 2024, we discussed the 2025 budget presented by the Management Board in detail and addressed, among other things, the reports from the committees: In the first part of the meeting held on December 9, 2024, we addressed the remuneration system, remuneration issues relating to the Management Board, amendments to Management Board contracts and matters relating to the Supervisory Board. In line with the recommendation put forward by the Governance and Nomination Committee, we decided to carry out an effectiveness review within the Supervisory Board with the support of an external consultancy firm. We also discussed the topics to be addressed in further training sessions for the Supervisory Board and made the decision to continue to include specific topics related to the residential real estate sector and governance in future training. Looking ahead to 2025, the Supervisory Board has chosen digitalization, energy-efficient refurbishment, sustainability reporting and the company’s collaboration with political stakeholders as some of the topics to be covered by its further training measures.

As part of our discussions on HR-related matters, we discussed succession planning for the Supervisory Board. The Governance and Nomination Committee is supported in this work by an HR consultancy firm. Based on an evaluation of completed market mapping exercises conducted using predefined qualifications profiles, we assembled a pool of potential candidates to fill any Board positions that might become vacant. These lists of potential candidates are being maintained in order to safeguard succession planning by the Supervisory Board committees.

With the help of a remuneration consultant, we took another look at the remuneration paid to the Management Board. We followed the recommendation made by the HR and Remuneration Committee and passed a resolution to change the Management Board remuneration system. We passed a resolution on corresponding amendments to the Management Board employment contracts within this context.

In addition, we passed a resolution on the procedure for including scrip dividends in the LTI tranches for 2021 to 2023.

The second part of the Supervisory Board meeting held on December 10, 2024, focused on the Management Board’s budget and medium-term planning. The Management Board provided us with information on current economic developments and explained its key planning assumptions for 2025 and beyond. We approved the 2025 budget presented and acknowledged the five-year plan presented to us. Taking this as a basis, we discussed the target values and target achievement curves for the variable remuneration to be paid to the Management Board for the STI and LTI.

On December 14, 2024, we used an extraordinary conference call held together with the Management Board to approve the control and profit-transfer agreement between Deutsche Wohnen SE and Vonovia SE, subject to the approval of the extraordinary Annual General Meeting in January 2025.

Committees and Their Work

We have established committees within the Supervisory Board in order to perform our duties effectively. The committees prepare subjects that are to be discussed and/or resolved by the Supervisory Board. In addition, they pass further resolutions that we have delegated to them instead of passing them on the Supervisory Board as a whole.

• Audit, Risk and Compliance Committee: This committee monitors the accounting process, valuation issues, the effectiveness of the internal control system, the risk management system and internal audit system, as well as the audit of the annual financial statements and compliance.
• Strategy, Finance and Sustainability Committee: This committee advises the Management Board on corporate and divisional strategy, financing, planning and sustainability strategy. It also advises the Management Board on issues related to digitalization, technological innovation and transformation.
• Governance and Nomination Committee: This committee discusses long-term succession planning for the Management Board and Supervisory Board, contractual matters relating to the Management Board as well as the company’s corporate governance.
• HR and Remuneration Committee: This committee prepares resolutions of the Supervisory Board regarding the introduction of, and amendments to, the remuneration system for the Management Board (including targets and target achievement), as well as the definition of specific remuneration. It also advises the Management Board on matters related to HR strategy (including employer branding, human capital development, performance management, remuneration) and restructuring measures.

Audit, Risk and Compliance Committee

The Audit, Risk and Compliance Committee (also referred to as the “Audit Committee”) had four members in the reporting year. Dr. Florian Funck was Chair of this Committee. The other members of this committee are Mr. Vitus Eckert, Dr. Ute Geipel-Faber and Mr. Matthias Hünlein. Ms. Clara-Christina Streit attended the meetings as a permanent guest.

The Audit, Risk and Compliance Committee maintained close contact with the auditors of the financial statements at the quarterly Audit Committee meetings. The Committee, represented by the Chair, and the auditors also maintained close dialogue in the run-up to the meetings.

The Audit Committee met seven times in 2024 (twice in March, and once in April, June, July, November and December).

At the hybrid meeting held on March 7, 2024, the Audit Committee reviewed the annual and consolidated financial statements as of December 31, 2023, as well as the combined management report for the 2023 fiscal year. The auditor informed the committee of the status of the audit and the forecast that no more changes were expected until the formal conclusion of the audit on March 13, 2024. The auditor’s comments made detailed reference to the audit engagement and principles (in particular materiality thresholds), the Group’s position (in particular accounting policy and discretionary decisions), findings on the consolidated financial statements (valuation of investment properties), development and goodwill as key audit matters, as well as other key topics such as joint venture transactions and the reclassification of the Care segment as discontinued operations. The auditor confirmed the effectiveness of the internal control system (ICS), reported on the findings on the risk early warning system and explained the audit of the Non-financial Declaration, providing an outlook on sustainability reporting in accordance with the CSRD.

The timing of the introduction of binding sustainability reporting in accordance with the CSRD was associated with uncertainty. As a result, after consulting with legal advisors and industry representatives, the Committee decided not to recommend an anticipatory resolution for a CSRD audit mandate.

The Committee also took a detailed look at the Management Board’s proposal to adjust the company’s management system in light of the prevailing overall conditions. This proposal suggested that FFO, as a mixed indicator of earnings power and liquidity, be replaced by two indicators that clearly relate to earnings and liquidity in each case. In connection with this topic, the Committee discussed the resulting need to adjust the dividend policy.

In a status review of a compliance case, the Committee examined the investigation file of the public prosecutor’s office, which essentially confirmed that a small group of employees and subcontractors had enriched themselves materially and financially in a clearly defined area (heating). As the injured party, the company has examined all civil legal response options, replaced the subcontractors concerned and strengthened its procurement controls. The review of the internal control system did not reveal any major gaps.

The Audit Committee also took a detailed look at the company’s report. This included economic development in the 2023 fiscal year, the capital structure, BaFin’s financial reporting enforcement proceedings, which were conducted based on spot checks and did not lead to any findings, the development of the joint ventures, developments in the Care segment and the potential for a dividend payout.

The internal audit report did not identify any major issues. It confirmed that this year, the company will be able to implement all of the measures planned in the previous year.

On March 14, 2024, the Audit Committee held a hybrid meeting to continue with the review, which it had started at its previous meeting, of the annual and consolidated financial statements, as well as the Non-financial Declaration, and passed a resolution to recommend to the Supervisory Board that the annual financial statements and the combined management report for the 2023 fiscal year be adopted, and that the consolidated financial statements of Vonovia SE and the combined management report for the 2023 fiscal years, as well as the Non-financial Declaration, be approved. The Committee’s review took account of both the company’s reports and the reports prepared by the auditor PwC. The Audit Committee approved the proposal for the appropriation of profit made by the Management Board.

Together with representatives of the Management Board, the Committee discussed the adjustment to the dividend policy against the backdrop of a potential change in the company’s performance indicators.

The Committee recommended that the Supervisory Board appoint PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, as the auditor of the annual and consolidated financial statements for the 2024 fiscal year, and as the auditor for the review of interim financial reports for the 2024 fiscal year and the first quarter of 2025. Given the expected implementation of the CSRD Implementation Act (CSRD-Umsetzungsgesetz), the Committee passed a resolution recommending that the Supervisory Board approve PwC’s work to prepare for a subsequent audit of the sustainability report until its formal appointment following the entry into force of this legislation.

Following on from the discussion at the previous meeting, the Committee received final confirmation from the Management Board that the company had not suffered any major financial losses as a result of the compliance case. There is also no reason to suggest that tenants suffered any damage.

At a hybrid meeting held on April 29, 2024, the Audit Committee looked at the condensed interim consolidated financial statements as of March 31, 2024. It acknowledged and approved the auditor’s report and its audit of the condensed interim consolidated financial statements and interim statement as of March 31, 2024. It consulted with the Management Board on the economic development of the Group and the segments, the liquidity situation, the valuation of the portfolio, planned transactions and rent trends.

The Committee acknowledged the current risk management report and discussed the risk-bearing capacity analysis carried out in the second half of 2023. The latter is aimed, in particular, at assessing the company’s liquidity and debt situation, taking bond covenants, rating criteria and total equity backing into account.

The Committee acknowledged the compliance report: According to this report, the company recently implemented a decentralized compliance organization and launched projects on money laundering obligations and the further development of compliance risk management. One new aspect is the fact that, in the future, employees in operations (gatekeeper functions such as HR, procurement and sales) will be involved more in compliance surveys, alongside managers. The Committee provided the Management Board with impetus for a data protection check to be performed by external consultants.

Other aspects included VAT group issues, further digitalization in tax administration, and the status of company declarations due to the land tax reform. The Committee also took a closer look at the imminent CSRD reporting, in particular the topics of stakeholders, reporting standards, reporting format, report content, exemption options and implementation status.

The hybrid meeting held on June 27, 2024, focused on the VTS transformation project, which is the company’s response to investment cuts and the technological shift towards heat pumps. The shift in energy sources used for heat generation, which is important for Vonovia’s climate path, is supported to a relevant extent by the project business. The Committee noted that this area is focusing on improving cost and performance transparency via various subprojects.

On July 31, 2024, the Audit Committee acknowledged and approved the consolidated half-year financial statements, including the interim financial report, as of June 30, 2024. The Committee approved the 2024 audit budget that had been presented. An evaluation of the audit quality conducted by the members of the Audit Committee resulted in the audit team being awarded high scores for their expertise and professionalism.

Data protection was discussed as a focal issue and the Committee decided to include this topic in its regular work in the future.

As part of reporting on the company, the Committee discussed, in particular, the development of financial and non-financial key performance indicators, the status of transaction activity, the development in the value of the portfolio, developments in the Development segment, the restructuring measures in the Quarterback Group, a non-current equity investment held by Deutsche Wohnen SE, and developments related to the CSRD.

At a meeting on  November 5, 2024, the Audit Committee discussed the condensed consolidated interim financial statements as of September 30, 2024, acknowledging and approving them. The auditor’s in-depth audit focused on the valuation of investment properties, the sale of the Katharinenhof portfolio, the Quarterback restructuring project and the legal dispute with a social insurance provider. The auditor explained his approach to quality assurance in the audit of the financial statements and, in particular, addressed accounting estimates, key audit matters and sustainability reporting.

In the context of the reporting on the company, the Committee discussed the achievement of the sales target of € 3 billion, revenue and cash flow figures, including the outlook for 2025, key financial indicators and special topics such as the control and profit-transfer agreement with Deutsche Wohnen SE, as well as current transactions.

The Committee also discussed the risk situation, major legal disputes and the results of the latest annual compliance check, while also seeking information on the status of implementation and penetration of the decentralized compliance organization.

It also discussed the internal audit status report and approved the annual audit plan for 2025 as presented.

At its last meeting held on December 18, 2024, the Committee held a conference call with the Management Board to discuss a current compliance case and topics related to the internal control system (ICS).

Strategy, Finance and Sustainability Committee

The Strategy, Finance and Sustainability (SFS) Committee comprised five members in the 2024 fiscal year. It was chaired by Mr. Jürgen Fenk. The other members were Ms. Birgit M. Bohle (as of May 8, 2024), Dr. Daniela Gerd tom Markotten, Ms. Hildegard Müller, Ms. Clara-Christina Streit and Mr. Christian Ulbrich (until May 8, 2024). The SFS Committee met seven times in the reporting year (March, May, July, August, September, November, December).

During the video meeting held on March 7, 2024, the Committee discussed the planned change to the management system, the background to this move and a possible adjustment to the dividend policy. Criteria such as predictability for shareholders and liquidity for the company were also discussed. Other topics included the status of sales activities, the overall conditions for new construction, the company’s financing situation and Vonovia’s Sustainable Performance Index.

On April 21, 2024, the Committee used the written procedure to approve the sale of the Prima portfolio in Berlin by Vonovia SE together with the sale of the Am Sandhaus development site in Berlin by Deutsche Wohnen SE.

The Committee used the meeting held on May 7, 2024, to discuss the proposal for a scrip dividend put forward by the Management Board and pass a corresponding resolution. It also took an in-depth look at provisional plans to sell shares in Deutsche Wohnen SE to an investor and provisional plans for a possible control and profit-transfer agreement between Vonovia SE and Deutsche Wohnen SE. Moreover, it discussed the preparation of the upcoming 2024 strategy process, specifying the key topics to be addressed.

On May 31, 2024, the Committee used the written procedure to pass a resolution on the use of the 2022 authorized capital for a non-cash capital increase in connection with the 2024 scrip dividend.

At the video meeting held on July 31, 2024, the Committee once again addressed preparations for the strategy process and discussed the status of the work presented by the Management Board in detail. During the discussion, the meeting’s participants looked at the strategic approaches in relation to prevailing circumstances in the company, overall market conditions and the megatrends that will determine the future.

The video meeting held on August 19, 2024, also focused on the preparatory work for the strategy process. Together with the Management Board, the committee members took a particular look at the topics the participants had agreed to revise or refine in the previous meeting.

During the digital meeting held on September 4, 2024, the members of the Committee continued and concluded the preparatory strategic discussion together with members of the Management Board.

At the video meeting held on November 19, 2024, the Committee addressed preparations for the Supervisory Board’s budget meeting, taking into account key accounting/financial indicators, the targeted growth path and the expected overall conditions. Other topics included planned transactions, investments to be budgeted for and the further development of specific units such as Development and VTS.

The Committee used the video meeting on December 2, 2024, to revisit the matter of the 2025 budget. With the support of the Management Board, the Committee discussed the five-year plan and the target values for the Sustainability Performance Index (SPI).

Governance and Nomination Committee

The Governance and Nomination Committee consisted of three members in the reporting year. The Chairperson was Clara-Christina Streit, as Chair of the Supervisory Board. The other members were Mr. Vitus Eckert and Dr. Ariane Reinhart. The Governance and Nomination Committee met nine times in the fiscal year (twice in February, in March, April and September, twice in October, and in November and December). The Governance and Nomination Committee discussed the composition of the Management Board and the Supervisory Board in detail at seven meetings and reported on the outcome to the full Supervisory Board.

During a conference call held on February 9, 2024, the Governance and Nomination Committee discussed the results of the effectiveness review of the Supervisory Board’s work that had been conducted at the end of 2023, and agreed on the next steps. The evaluation revealed that the scores achieved were significantly above average compared to the other supervisory boards and real estate companies investigated by the consultancy firm involved in the review. The experts conducting the review also confirmed that the Supervisory Board has a high level of expertise overall. The Committee acknowledged the suggestions for improvement presented with a view to launching optimization measures.

During a conference call held on February  19, 2024, the Committee addressed issues related to succession planning for the Management Board.

The meeting held on March 14, 2024, was used to discuss the results of the corporate governance roadshow held in February 2024 in detail. It passed a resolution to recommend that the Supervisory Board appoint Mr. Philip Grosse as CFO for a further three years following the expiry of his term of office. Another resolution was passed, after checking the candidate’s qualifications, to recommend that Ms. Birgit M. Bohle be nominated for election by the Annual General Meeting as a new member of the Supervisory Board for a four-year term. The Committee also passed resolutions on the recommendations to issue an updated Declaration of Conformity and to approve the Supervisory Board report. Finally, it once again addressed the results of the report on the Supervisory Board’s effectiveness review and discussed the next steps.

In the video conference held on April 11, 2024, the Committee discussed personnel matters relating to the Management Board.

On August 24, 2024, the Committee addressed a potential conflict of interest involving a Supervisory Board member and used a written circular to approve a consultancy agreement with a consultancy firm in which the Supervisory Board member is a managing director.

At the meeting held on September 9, 2024, the Committee addressed amendments to Management Board employment contracts, taking into account changes to the Management Board remuneration system. It prepared for the continuation of the effectiveness review of the Supervisory Board’s work in 2024 and approved a suitability assessment of the Supervisory Board, similar to that conducted in the previous year. The Committee also discussed the succession planning process for the Management Board and Supervisory Board.

During the conference call held on October 18, 2024, the committee members once again discussed the succession planning process for the Supervisory Board. Possible candidates to fill two Supervisory Board mandates at the 2025 Annual General Meeting were discussed.

The conference call on October 29, 2024, was held as a joint meeting of the Governance and Nomination Committee and the HR and Remuneration Committee. The committee chairs reported on the Governance Roadshow on remuneration issues. The Committee prepared for the planned discussions with the members of the Management Board on the contractual amendments resulting from the adjustments to the Management Board remuneration system.

During a conference call held on November 25, 2024, the Committee addressed the amendments to individual Management Board contracts. It discussed the adjustment of the remuneration system and prepared to continue further discussions with the involvement of the Management Board.

During the conference call on December 4, 2024, the Committee addressed the topic of Management Board contracts as planned and, following a discussion on this topic with the members of the Management Board, decided to recommend that the contractual provisions that were necessary and appropriate for the purposes of introducing a modified Management Board remuneration system be finalized. The Committee discussed the self-assessment performed by all Supervisory Board members (suitability assessment including expertise matrix) and concluded that the requirements of the German Stock Corporation Act, the GCGC and relevant regulations are met. The Committee recommended that the Supervisory Board approve the current qualifications and expertise profile.

As part of the agenda item dedicated to succession planning for the Supervisory Board, the Committee decided, following a selection process, on a candidate who is to be recommended to the Supervisory Board as a new member and proposed to the Annual General Meeting for election for the period leading up to 2028.

The Committee addressed the selection of the advisor for, and the timing of, the 2024 effectiveness review and passed a resolution to recommend that the advisory mandate again be awarded to the previous advisor. It discussed the topics proposed by members of the Supervisory Board as part of the Permanent Education Program Learning Agenda 2025 and passed a resolution recommending that the program be implemented in line with the recommendations. The topics included in the program include digitalization, energy-efficient modernization, sustainability reporting and the company’s cooperation with policymakers.

HR and Remuneration Committee

In the fiscal year under review, the HR and Remuneration Committee consisted of four members. Dr. Ariane Reinhart assumed the position of Chair. The other members were Mr. Jürgen Fenk, Dr. Florian Funck and Ms. Clara-Christina Streit. The HR and Remuneration Committee met nine times during the fiscal year (in February, March, June, July, August, September, October and twice in December).

During the conference call held on February  22, 2024, the Committee discussed potential adjustments to Group key performance indicators and the resulting adjustments to the Management Board remuneration system from 2024 onwards, including the implications for the Declaration of Conformity, for example. It discussed the short-term and long-term variable remuneration for the Management Board as well as target achievement, settlements as part of the STI 2024 and the LTIP tranche for 2020-2024.

The meeting held on March 14, 2024, was used for the Committee to continue the discussions it had started on February 22, 2024. Following the changes made to the management system and the decision no longer to report Group FFO, the Committee passed a resolution recommending that the performance criteria for the Management Board’s remuneration also be switched from Group FFO to Adjusted EBT, while at the same time keeping the CAGR target for the LTI tranches for 2021 to 2023. It also passed a resolution on the target achievement for the annual variable remuneration (STI) for the 2024 fiscal year as a recommendation for the Supervisory Board. The Committee addressed the determination of the target achievement level for the 2020-2024 LTIP tranche based on an expert opinion prepared by an independent remuneration consultant and recommended that the Supervisory Board approve the payment. The Committee also recommended that the 2023 remuneration report be approved.

During a conference call held on June 14, 2024, the Committee discussed the need for further adjustments to be made to the regulations governing the Management Board remuneration system. This was in response to criticism voiced by investors at the Annual General Meeting, and the Committee worked with a remuneration consultant engaged for this purpose to explore the options available for adjusting the system.

During a conference call held on July 25, 2024, the Committee once again addressed the revision of the Management Board remuneration system. The committee members discussed the individual aspects with reference to the document prepared by the consultancy firm that had been engaged. This document had been made available to the Management Board in advance.

The Committee noted that the DAX should still be used as the benchmark for Management Board remuneration as part of the regular reviews to ensure its appropriateness. In addition, the results are to be verified as part of a secondary comparison with European real estate companies from the FTSE EPRA/NAREIT Developed Europe Index.

At meetings held as conference calls on August 26, 2024, and September 3, 2024, the Committee then dealt with the refined Management Board remuneration system. Among other aspects, it discussed how to take the company’s financial stability into account in the variable remuneration (STI) using risk corridors that would have to be defined. The proposals were discussed with the involvement of the Management Board.

The conference call on October 29, 2024, was held as a joint meeting of the Governance and Nomination Committee and the HR and Remuneration Committee (for more information, please refer to the information on the meetings of the Governance and Nomination Committee).

At the video meeting held on December 4, 2024, the Committee addressed the Management Board remuneration system, calling on the expertise of a remuneration consultant in the process. The Committee passed a resolution recommending that the Supervisory Board adopt a revised remuneration system and present it to the Annual General Meeting for approval. The procedure for including scrip dividends in the LTI tranches for 2021 to 2023 was also discussed and a corresponding recommendation was made to the Supervisory Board. The Committee also discussed the KPIs for the variable remuneration to be paid to the Management Board (STI and LTI 2025) and agreed on corresponding recommendations for the Supervisory Board.

At the video meeting held on December 20, 2024, the Committee discussed the variable remuneration to be paid to the Management Board (STIP and LTIP) and recommended that the Supervisory Board adopt the target values and target achievement curves for the variable remuneration for 2025.

Corporate Governance

The Management Board and Supervisory Board of Vonovia SE are committed to the principles of good corporate governance. As a result, the members of the Supervisory Board once again looked at the German Corporate Governance Code in the reporting year and on March 14, 2024, they passed a resolution to issue the Declaration of Conformity in accordance with Section 161 of the German Stock Corporation Act (AktG), which the Management Board went on to issue on March 26, 2024. Directly related to this topic, the members of the Management Board and the Supervisory Board also reported on corporate governance at Vonovia SE in the Declaration on Corporate Governance. Both declarations will be made permanently available by the company on its website.

Audit

After being appointed at the Annual General Meeting on May 8, 2024, to audit financial statements for the 2024 fiscal year, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, has duly audited the annual financial statements and consolidated financial statements of Vonovia SE as of December 31, 2024, and the combined management report for the 2024 fiscal year and has expressed an unqualified opinion thereon. The Non-financial Group Declaration, which is set out in a separate section of the combined management report, was subjected to a separate limited assurance audit conducted by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt and Main, in accordance with ISAE 3000. In accordance with Section 317 (4) of the German Commercial Code (HGB), KPMG also assessed the risk early warning system of Vonovia SE.

The auditor had affirmed its independence to the Chair of the Audit, Risk and Compliance Committee and duly declared that no circumstances exist that could give grounds for assuming a lack of impartiality on its part. The audit assignment was awarded to PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, by the Chair of the Audit Committee in line with the Committee’s resolution and the choice of auditor made by the shareholders at the Annual General Meeting.

The annual financial statements were prepared by the Management Board in accordance with the German commercial law and stock corporation law provisions, including the generally accepted accounting practice. The consolidated financial statements were prepared by the Management Board in accordance with the International Financial Reporting Standards (IFRS), as applied in the European Union, as well as the supplementary provisions applicable pursuant to Section 315e (1) HGB.

For the annual financial statements and the consolidated financial statements, Vonovia SE prepared a combined management report based on the requirements set out in Sections 315, 298 (2) HGB. Every member of the Supervisory Board received copies of the annual financial statements, the consolidated financial statements, the combined management report and the auditor’s report in good time. On the basis of the preliminary examination and assessment by the Audit, Risk and Compliance Committee, about which the Audit, Risk and Compliance Committee Chair reported to the Supervisory Board, the Supervisory Board has scrutinized in detail the annual financial statements, consolidated financial statements and combined management report of Vonovia SE for the 2024 fiscal year and also considered the Management Board’s proposal for the appropriation of profit. With regard to the Non-financial Declaration to be published, the Supervisory Board complied with its review obligation.

At the meetings held on March 10, 2025 and March 18, 2025 with the Audit Committee, and at the Supervisory Board meeting on March 18, 2025, the auditors reported on their findings, including the strategic audit objectives and key audit matters. The strategic audit objectives and the key audit matters set out in the auditor’s report had been defined by the auditor within the context of his independent mandate in the second half of 2024, and had already been discussed and agreed upon with the Audit Committee in advance.

In the 2024 fiscal year, with regard to the consolidated financial statements, particularly key audit matters included the valuation of investment properties, the value of goodwill and the valuation of properties in development and construction. One focal point of the audit of the individual financial statements was the valuation of shares in affiliated companies.

The auditors gave detailed answers to our questions. After an in-depth review of all documentation, we found no grounds for objection. As a result, we concurred with the auditors’ findings. On March 18, 2025, we followed the Audit Committee’s recommendation and approved the annual financial statements and consolidated financial statements of Vonovia SE, as well as the combined management report. The annual financial statements are thus duly adopted.

Remuneration Report

The Management Board and Supervisory Board prepared a report on the remuneration granted and owed to the members of the Management Board and the Supervisory Board in the 2024 fiscal year. The remuneration report was reviewed by the auditor to check that it included the disclosures required by law under Section 162 (1) and (2) AktG. As well as checking the statutory requirements, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, also audited the content of the report. The remuneration report, including PwC’s audit report, was published on the company’s website.

Dividend

The Supervisory Board considered the Management Board’s proposal for the appropriation of profit. It gave particular consideration to the liquidity of the company/the Group, tax-related aspects and financial and investment planning. Following the audit, we agree with the proposal for the appropriation of profit set out by the Management Board, namely the proposal that, from the profit for the 2024 fiscal year, a dividend of € 1.22 per share or € 1,003,880,568.50 in total on the shares of the share capital as of December 31, 2024, be paid to the shareholders and the remaining amount be carried forward to the new account or be used for other dividends on shares carrying dividend rights at the time of the Annual General Meeting that go beyond the number of shares as of December 31, 2024.

Personnel

The following changes arose on the Supervisory Board in the reporting year: Mr. Christian Ulbrich left the Supervisory Board at the end of the Annual General Meeting on May 8, 2024. On behalf of the Supervisory Board as a whole, I would like to thank Mr. Ulbrich for his long-standing commitment and constructive cooperation in the spirit of trust.

Ms. Birgit M. Bohle was appointed as a new member of the Supervisory Board at the Annual General Meeting. I would like to extend a very warm welcome to Ms. Bohle as she joins our Supervisory Board.

Concluding Remarks

On behalf of the Supervisory Board, I would like to thank the Management Board for once again successfully managing the company last year. We would like to thank the company’s employees for their considerable commitment and for being there for our customers and partners. We would like to thank the employee representative bodies for another year of constructive collaboration.

Bochum, March 18, 2025

On behalf of the Supervisory Board

Clara-Christina Streit