Performance Indicators

Definition and Calculation Method

In order to determine the key figures (KPIs) that are to be reported, the taxonomy-eligible and taxonomy-aligned net turnover, capital expenditure and operating expenses are calculated as a share of the total net turnover, capital expenditure and operating expenses that are to be taken into account in accordance with EU taxonomy requirements. Duplicate counting is avoided by means of direct allocation of the taxonomy-eligible or taxonomy-aligned turnover, capital expenditure and operating expenses to a taxonomy-eligible or taxonomy-aligned economic activity.

Turnover

The Group’s consolidated turnover is taken into account in the denominator (total net turnover). This comprises turnover from property management, income from the sale of properties, income from the disposal of properties held for sale and turnover from the disposal of real estate inventories. For more details on accounting methods, please refer to the accounting and valuation methods within the Notes to the IFRS consolidated financial statements [B9] Income from property management, [B10] Profit on the disposal of properties and [B11] Profit on the disposal of real estate inventories. Taxonomy-aligned net turnover (numerator) is comprised of amounts generated through taxonomy-aligned economic activities.

The aligned rental income from the Rental segment (€ 909.6 million) increased from € 770.0 million to € 909.6 million and accounts for the largest share of aligned turnover this year. In this case, compliance is assessed on a building-by-building basis taking into account the technical criteria for activity 7.7.

Turnover from completed residential properties for our own use (Development to hold) has been reported under turnover for 7.7 based on the completion date. The year-on-year increase is due to a larger proportion of aligned buildings. Further, approx. € 277.0 million of aligned turnover under activity 7.7 is based on the sale of aligned residential property.

The turnover from the Development to sell segment (€ 249 million), which is shown under activity 7.1, is based on the proceeds from the disposal of new construction. This turnover decreased considerably year over year from € 804 million to € 249 million. The taxonomy-aligned share within activity 7.1 fell from 94.4% to 60.3%.

The turnover for activity 4.1 (€ 6.9 million) is generated by the feed-in tariff paid for supplying electricity to the grid as well as the direct sale of electricity to tenants.

Total turnover [C22] Segment Reporting dropped by € 334.2 million year-on-year. Thereof, approximately € -439.2 million comes from activity 7.1 (sales of new construction), approximately € 141.3 million from activity 7.7 (rentals and sales), € -61.2 million from the television business and € 20.2 million from other turnover. Aligned turnover fell by € 218.3 million in total, primarily due to the drop in sales of new construction. As a result, the share of aligned turnover has fallen overall from 23.5% to 21.4%.

Completed residential property for our own portfolio (Development to hold) is shown in the consolidated financial statements as capital expenditure under 7.7. No turnover is gained from this. The internal turnover of the Value-add companies, e.g., services provided by craftsmen, is eliminated in the course of Group consolidation and is therefore not taken into account in taxonomy-eligible turnover. If the services provided internally are larger projects, e.g., energy-efficient modernization measures, they are capitalized and shown as capital expenditure (CapEx).

Capital Expenditure

In accordance with the EU taxonomy, the denominator for capital expenditure (CapEx) is composed of additions to property, plant and equipment and intangible assets. For accounting details, please refer to chapters [D25] Intangible assets, [D26] Property, plant and equipment and [D27] Investment properties in the Notes to the IFRS consolidated financial statements. The individual additions and capitalized modernization costs were taken into account when calculating the denominator.

For projects lasting several years in the areas 7.2, 7.3 or 7.7, the capitalized amount in the relevant reporting year is reported as taxonomy-eligible and, provided the relevant criteria are met, taxonomy-aligned capital expenditure. For activities 7.4, 7.5 and 7.6, the capital expenditure is shown in the year of asset capitalization. When it comes to capital expenditure, the EU Taxonomy Regulation makes a distinction between different categories of capital expenditure.

Due to Vonovia’s business model, it largely invests (activity 7.2 and 7.7) in assets or processes associated with economic activities that are taxonomy-aligned (category A). It also makes investments (activity 7.3–7.6) relating to individual measures through which the target activities are carried out in a low-carbon manner or the emission of greenhouse gases is lowered (category C). Capital expenditure for the fleet (3.3) and for the purchase of electrical and electronic goods (1.2) also constitutes taxonomy-eligible capital expenditure under category C.

With regard to developed land, the CapEx for buildings and land has been included as additions, as economic activity 7.7 cannot be performed without the relevant land.

Capital expenditure in the context of Vonovia’s capitalized internal expenses is reviewed for taxonomy alignment and allocated to 7.2, 7.3 or 7.7 depending on the type of investment. Taxonomy alignment is assessed for each building or project. In addition to capitalized internal expenses, the addition of other property, such as Development to hold additions or other acquisitions of investment properties, is reported under 7.7.

With regard to economic activity 7.1, the corresponding properties do not constitute fixed assets but rather are reported within current assets in the real estate inventories (see [D35] Real Estate Inventories) or receivables, and are therefore not included in the denominator of the key figure for taxonomy-relevant capital expenditure.

The taxonomy-aligned capital expenditure (numerator) comprises additions to investment properties (€ 431.7 million). This comprises aligned Development to hold additions (€ 293.3 million/7.7), capitalized modernization measures (€ 113.5 million, with € 102.4 million in 7.2 and € 11.2 million in 7.7), additions of purchased real estate (€ 0.0 million/7.7) and aligned individual measures pursuant to activity 7.3 (€ 24.9 million). Additions relating to property, plant and equipment came to € 86.4 million in total. These relate to photovoltaic systems (€ 73.5 million/7.6), metering technology (€ 10.3 million/7.5) and charging stations (€ 2.7 million/7.4). There was an addition to right-of-use assets (€ 3.3 million) for metering technology (€ 1.7 million/7.5) and heating systems (€ 1.6 million/7.3). There were no aligned additions resulting from business combinations during this reporting year.

Compared to the previous year, CapEx increased significantly (€ 2,742.6 million in the current year compared to € 1,206.8 million in the previous year). The aligned share of this amount fell from € 557.5 million to € 521.5 million. There was a slight drop from € 91.0 million to € 73.5 million in activity 7.6 relating to the expansion of photovoltaic systems. Aligned additions to investment properties (7.7) are on a similar level (€ 292.0 million in the previous year to € 293.3 million). Capitalization of aligned modernization measures (7.2) fell slightly from € 118.0 million to € 102.4 million. There was also an increase in the area of heating modernization (7.3) from € 13.0 million to € 24.9 million. Activities 7.4 (installation of charging stations) and 7.5 (metering technology) remain at a similar level as in the previous year.

We have issued green bonds and obtained green loans on the capital market based on the Sustainable Finance Framework. The proceeds from these issues are used exclusively to (re)finance real estate that has been confirmed to be green. We use a portfolio-based approach, which means that funds cannot be allocated to specific properties. As a result, it was not possible to make adjustments for the taxonomy-aligned capital expenditure financed using these bonds or debentures, or corresponding revenue from environmentally sustainable buildings for the purposes of reporting the taxonomy-aligned performance indicators.

Operating Expenses

The operating expenses (OpEx) denominator is an addition to the performance indicator of the recognized capital expenditure values rather than a full presentation of the operating expenses of Vonovia, as shown under Section [B14] Cost of Materials in the Notes to the consolidated financial statements.

Pursuant to the requirements, we include expenses for upkeep and repair (maintenance) when defining the denominator. At Vonovia, maintenance measures are mainly carried out by the internal craftsmen’s organization, which is why we also include these items (technicians’ and administrative costs) in the denominator. Double counting is avoided due to the fact that capitalized shares, as capital expenditure, reduce maintenance costs accordingly. As a result, the denominator reflects the non-capitalized maintenance expenses. These maintenance costs and, in particular, the personnel costs associated with the company’s own staff cannot be allocated separately to the individual buildings when posting expenses. In addition, the operating expenses incurred for the individual activities 7.2 to 7.7 cannot be attributed individually. Vonovia thus allocates all maintenance costs to activity 7.7. To determine the taxonomy-aligned data, we use an allocation factor for maintenance expenses based on the area of the building (in m²). This share is multiplied by the taxonomy-eligible operating expenses to calculate the numerator. The non-taxonomy-eligible shares, e.g., condominium administration maintenance expenses, are not taken into account. The share of m² of green buildings in relation to the total area is 18.0%. The increase as against the previous year (15.6%) is due to a higher proportion of taxonomy-aligned buildings.

In this case, operating expenses are comprised of € 685.9 million in maintenance (see [B14] Cost of Materials), less € 574.6 million capitalized share and € 294.2 million from our own craftsmen’s organization. € 15.6 million of the maintenance expenses is attributable to condominium administration. This activity is not taxonomy-eligible. As a result, the numerator is calculated as 18.0% of € 389.9 million. Overall, there was only a minimal change in OpEx of approximately € 20.5 million. The aligned share rose by € 6.3 million.