18 Segment Reporting

Vonovia is an integrated residential real estate company with operations across Europe. Its corporate strategy is focused on sustainably increasing the value of the company. This is achieved by managing the company’s own portfolio sustainably and with a view to enhancing its value, investing in existing residential properties in order to create value, building new residential buildings and selling individual apartments, as well as by engaging in active portfolio management and offering extensive property-related services. For the purposes of managing the company, we made a distinction at the end of the reporting period between four segments: Rental, Value-add, Recurring Sales and Development. We also report the Other segment, which is not relevant from a corporate management perspective, in our segment reporting. This segment includes the sale, as and when the right opportunities present themselves, of entire buildings or land (Non Core/Other) 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. The expenses for ancillary costs are reported separately under “Other”, with the corresponding ancillary costs income being reported under external income.

The sale of the Care segment was certified by a notary in the 2024 fiscal year. In the course of 2024 and at the beginning of 2025, the nursing care properties and nursing care businesses were successfully sold as planned. Ownership of 19 nursing care properties and the Katharinenhof nursing care businesses was transferred in the first quarter of 2025. The purchase agreement concluded on October 2, 2024, involves the sale of a total of 27 nursing care properties and the Katharinenhof nursing care businesses. Ownership of a further two nursing care properties was transferred in the second quarter of 2025. All remaining activities will be finalized in the 2025 fiscal year, meaning that there are still earnings contributions from discontinued operations.

The Rental segment combines all the business activities that are aimed at the value-enhancing management of our own residential real estate. This segment includes property management activities in Germany, Austria and Sweden. The consolidation of property management activities in Germany, Austria and Sweden to form one single reporting segment is based on the similarities that we see in the property management business in these three countries. This applies to the way in which services are provided and the individual service processes that form part of the property management business as well as to the customers in the residential rental market and the type of customer acquisition used. Overall, the residential rental market in all three countries is characterized by a shortage of housing and is subject to statutory requirements, resulting in return expectations that are similar in the long term.

The Value-add segment bundles all the housing-related services that we have expanded our core rental business to include. These services include both the maintenance and modernization work on our residential properties and additional services that are closely related to the rental business. Activities relating to the craftsmen’s and residential environment organization, the condominium administration business, the cable TV business, metering services, energy supplies and insurance services are allocated to the Value-add segment.

The Recurring Sales segment includes the regular and sustainable disposals of individual condominiums and single-family houses from our own portfolio. The consolidation of sales activities in Germany and Austria to form one reporting segment is based on the similarities that we see in the property management business in these two countries. The segment does not include the sale of entire buildings or land (Non Core/Other). These properties are sold as and when the right opportunities present themselves, meaning that the sales do not form part of the Recurring Sales segment. These opportunistic sales are reported in the ”Other” column of the segment report.

The Development segment combines cross-country development activities and includes the project development of new residential buildings. The consolidation of development activities in Germany, Austria and Sweden to form one single reporting segment is based on the similarities that we see in the business in these three countries. The business spans the entire value chain, from the purchase of land without a development plan or dedicated purpose to the completion and sale of new buildings and the construction of new buildings on our own land. The finished properties are either incorporated into our own portfolio or sold to third parties.

Planning and controlling systems ensure that resources are efficiently allocated and their successful use is monitored on a regular basis. Reporting to the chief decision-makers and the assessment of economic performance as well as the allocation of resources are performed on the basis of this segmentation. Asset and liability items are not reported separately by segment. Internal reporting is based on the IFRS Accounting Standards in general.

As the chief decision-makers of Vonovia, the Management Board members monitor the contribution made by the segments to the company’s performance on the basis of the Adjusted EBITDA.

Adjusted EBITDA Total is the result before interest, taxes, impairment, depreciation and amortization (including income from other operational investments and intragroup profits/losses) adjusted for effects that do not relate to the period, recur irregularly and are atypical of business operations, and for net income from fair value adjustments to investment properties.

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) as well as expenses for pre-retirement part-time work arrangements and severance payments. The Adjusted EBITDA Total is derived from the sum of Adjusted EBITDA for Rental, Adjusted EBITDA for Value-add, Adjusted EBITDA for Recurring Sales and Adjusted EBITDA for Development. The following table shows the segment information for the reporting period:

The expenses for maintenance include the cost of materials relevant to management of the Rental segment and the expenses charged for maintenance work performed by in-house craftsmen. Operating expenses largely include personnel expenses, the cost of purchased goods and services, non-staff administrative expenses and other costs of materials. Capitalized internal expenses have the opposite effect. To show the development of operating performance and to ensure comparability with previous periods, adjusted EBITDA is calculated for each of the Rental, Value-add, Recurring Sales and Development segments. The sum of these key figures produces the Adjusted EBITDA Total for the continuing operations.

The adjustments made include items that are not related to the period, items that recur irregularly and items that are atypical of business operation. The non-recurring items include expenses for pre-retirement part-time work arrangements and severance payments, the development of new fields of business and business processes, acquisition projects including integration costs, research and development and expenses for refinancing and equity increases (where not treated as capital procurement costs).

In the 2025 reporting period, the non-recurring items eliminated in the Adjusted EBT for the continuing operations came to € 149.5 million (H1 2024: € 45.4 million).

Transactions in the first half of 2025 include provisions set up for the purchased land to build on and old stock of the QUARTERBACK Immobilien Group amounting to € 85.2 million. The relevant purchase agreement has already been signed, but the benefits and encumbrances will not be transferred until the second half of 2025.

The increase in HR-related special effects is due to the provision set up in connection with Mr. Buch’s resignation as CEO of Vonovia and the cancellation of his contract of employment, which was set to run until 2028. In addition to a fixed one-off payment due on the date Mr. Buch leaves the company at the end of 2025, a variable component in the form of virtual shares has been agreed to fall due on December 31, 2027. The virtual shares will be allocated as of January 1, 2026. The amount of the payout will be based on the average price of Vonovia’s shares over the six weeks prior to maturity, adjusted to reflect Vonovia’s dividend payments during the period from January 1, 2026, to December 31, 2027.

The following table gives a detailed list of the non-recurring items:

The breakdown of non-Group revenue from contracts with customers (pursuant to IFRS 15.114f.) and other revenue as well as its allocation to the segments referred to above is as follows:

External income and non-current assets, excluding financial instruments, deferred taxes, post-employment benefits and rights under insurance contracts, are distributed among Vonovia’s country of origin and other countries as follows. The revenue and the assets are allocated based on the registered office of the unit providing the service.