16 Segment Reporting

Vonovia is an integrated residential real estate company with operations across Europe. The company’s 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 property-related services. For the purposes of managing the company, we made a distinction between four segments at the end of the reporting period: 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 includes the sale, only 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 Rental segment combines all of the business activities that are aimed at the value-enhancing management of our own residential real estate. It includes our property management activities in Germany, Austria and Sweden. The consolidation of our 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. The three countries are also members of the European Union and have similar economic conditions (inflation, regulation, budgeted rent increases), resulting in similar long-term return expectations.

The Value-add segment bundles all of 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 services that are closely related to the rental business. We allocate the activities relating to the craftsmen’s and residential environment organization, the condominium administration business, the cable TV business, metering services, energy supplies and our insurance services to the Value-add segment.

The Recurring Sales segment includes the regular and sustainable disposals of individual condominiums and single-family houses from our portfolio. The consolidation of our sales activities in Germany and Austria to form one single reporting segment is based on the similarities that we see in the property management business in these two countries. The sales address a homogeneous customer group, and the processes and distribution channels created are similar within the Group. Both countries are also members of the European Union and have similar economic conditions (inflation, regulation, shortage of housing), resulting in similar long-term return expectations. The segment does not include the sale of entire buildings or land (Non-Core/Other). These properties are only sold as and when the right opportunities present themselves, meaning that the sales do not form part of the Recurring Sales segment. We report these opportunistic sales in the Other column of the segment report. The “Other” column also includes the earnings contribution made by project development in the field of renewable energy. Further information can be found under [A3] Business Combinations.

The Development segment combines cross-country development activities and includes the project development of new residential buildings. The consolidation of our 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. This applies to the way in which services are provided and the individual service processes that form part of the development business as well as to the customers in the development market and the type of customer acquisition used. The three countries are also members of the European Union and have similar economic conditions (inflation, regulation). The business in all three countries covers the value chain starting with the purchase of land without any development plan/dedicated purpose and ending with the completion and sale of new buildings and new construction measures on our own land. These properties are either incorporated into our own portfolio or sold to third parties.

Revenue and advance performance between the segments is charged based on market prices.

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 thus the assessment of business development 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.

The Management Board as chief decision-makers of Vonovia 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 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).

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.

The adjustments made include items that are not related to the period, items that recur irregularly and items that are atypical of business operations. 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 first half of 2026, the non-recurring items eliminated in Adjusted EBT came to € 17.5 million (H1 2025: € 149.5 million). 

The marked drop in transactions is due primarily to provisions set up in the previous year for the purchased land to build on and old stock of the QUARTERBACK Immobilien Group amounting to € 85.2 million. In addition, there were positive one-off effects of € 19.0 million in the first half of 2026 due to the reversal of the provisions from legal disputes and other operating income from previous years.

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

The breakdown of non-Group revenue (pursuant to IFRS 15.114 et seq.) and 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.