Results of Operations

The Group’s positive overall development in the 2016 fiscal year is also reflected in positive development in results of operations. The GAGFAH, Franconia and SÜDEWO subportfolios purchased at various points of 2015 are included in the annual financial statements for the 2016 reporting year with a full fiscal year volume for the very first time. Regarding the different times at which the earnings contributions from the subportfolios acquired in 2015 were included, we refer to the comments made in the chapter above on overall business development.

The following key figures provide an overview of how Vonovia’s results of operations and their drivers developed in 2016.

Key Figures on Earnings Development

in € million






Exclusion of financial income from investments in other real estate companies from adjusted EBITDA, correction of € 0.4 million to the value for 2015. New allocation relating to FFO interest.






Income from property management





thereof rental income





Adjusted EBITDA Operations





Adjusted EBITDA Rental*





Adjusted EBITDA Extension





Adjusted EBITDA Other










Income from disposal of properties





Adjusted EBITDA Sales





Adjusted EBITDA*





Monthly in-place rent (€/m2)





Number of residential units in portfolio





Vacancy rate (in %)





Maintenance and modernization (€/m2)





thereof expenses for maintenance and capitalized maintenance (€/m2)





thereof for modernization (€/m2)





Number of units bought





Number of units sold





thereof Privatize





thereof Non-Core





Number of employees (as at December 31)





The income from property management showed positive development in the 2016 fiscal year in line with our expectations and came to € 2,209.3 million in total (2015: € 2,063.5 million). The increase was mainly due to the development in in the Rental segment. It rose from € 1,414.6 million in 2015 to € 1,538.1 million in 2016, mainly due to the acquisitions made in 2015, which were only included in the annual financial statements for that year on a pro rata basis. The was low, coming in at 2.4% at the end of the 2016 fiscal year (2015: 2.7%). As of the end of 2016, Vonovia managed a portfolio comprising 333,381 of its own residential units across Germany (2015: 357,117). In the course of 2016, we sold a total of 26,631 units (2015: 15,174) and acquired 2,815 (2015: 168,632).

The GAGFAH portfolio contributed € 814.0 million to income from property management in 2016 (March to December 2015: € 702.5 million), with the Franconia portfolio contributing € 28.1 million (April to December 2015: € 21.1 million) and the SÜDEWO portfolio contributing € 128.8 million (July to December 2015: € 68.3 million).

Adjusted EBITDA Operations rose by 14.2% from € 957.6 million in the 2015 fiscal year to € 1,094.0 million in 2016. Both segments, Rental and Extension, made a positive contribution to this trend. rose by 13.2% from € 924.4 million in the 2015 fiscal year to € 1,046.2 million in 2016. rose by 51.6% from € 37.6 million in the 2015 fiscal year to € 57.0 million in 2016. In the Extension segment, the further expansion of our craftsmen’s organization had a particularly positive impact. In the 2016 fiscal year, spending on modernization and per square meter of living area came to € 36.18 in total, up by 9.5% on the prior-year value of € 33.04. The share attributable to modernization rose considerably, from around 52% in 2015 to around 59% in 2016. The consolidation effects, which we report in adjusted EBITDA Other, came to € -9.2 million in 2016 (2015: € -4.4 million).

FFO 1 rose by 25.1% from € 608.0 million in 2015 to € 760.8 million in 2016. The interest included in came to € -322.7 million in 2016 (2015: € -339.4 million), while current income taxes FFO 1 came to € -10.5 million (2015: € -10.2 million).

Income from disposal of properties stood at € 1,227.9 million in the 2016 fiscal year (2015: € 726.0 million). This increase was due primarily to the considerable increase in sales in 2015 from a total of 15,174 units in 2015 to 26,631 units in 2016. This is mainly due to moves to step up sales in the portfolio. These sales increased from 12,195 units in 2015 to 23,930 units in the 2016 fiscal year.

The GAGFAH portfolio contributed € 290.3 million to income from disposal of properties in 2016 (March to December 2015: € 259.6 million), with the Franconia portfolio contributing € 7.0 million (April to December 2015: € 5.4 million) and the SÜDEWO portfolio contributing € 10.5 million (July to December 2015: € 0.2 million).

The adjusted EBITDA Sales rose by 30.1% from € 71.1 million in 2015 to € 92.5 million in 2016, largely due to the increase in the volume of units sold.

The adjusted EBITDA rose by 15.3 % from € 1,028.7 million in 2015 to a total of € 1,186.5 million in 2016.

At the end of 2016, Vonovia had a workforce of 7,437 employees (2015: 6,368), with 3,765 employees working within the craftsmen’s organization (2015: 2,568).

Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding rent agreements before the deduction of non-transferable ancillary costs.
Vacancy Rate
The vacancy rate is the number of empty units as a percentage of the total units owned by the company. The vacant units are counted at the end of each month.
Adjusted EBITDA Rental
The adjusted EBITDA Rental is calculated by subtracting the operating expenses of the Rental segment and the expenses for maintenance in the Rental segment from the Group’s rental income.
Adjusted EBITDA Extension
The adjusted EBITDA Extension is calculated by deducting operating expenses from the segment’s income.
Maintenance covers the measures that are necessary to ensure that the property can continue to be used as intended over its useful life and that eliminate structural and other defects caused by wear and tear, age and weathering effects.
FFO (Funds From Operations)
FFO reflects the recurring earnings from the operating business. In addition to adjusted EBITDA, FFO allow for recurring cash-effective net interest expenses from non-derivative financial instruments as well as income taxes. This key figure is not determined on the basis of any specific international reporting standard but is to be regarded as a supplement to other performance indicators determined in accordance with IFRS.
The profit or loss for the period to reflect the adjusted profit or loss from sales; period adjustments from assets held for sale; specific effects that do not relate to the period, are non-recurring or do not relate to the objective of the company; the net income from fair value adjustments of investment properties; depreciation and amortization; deferred and prior-year current taxes (tax expenses/income); transaction costs; prepayment penalties and commitment interest; valuation effects on financial instruments; the unwinding of discounting for provisions, particularly provisions for pensions, and other prior-year interest expenses and income that are not of a long-term nature.
In the “Non-Core” subportfolio, our focus is on selling properties in locations that offer below-average development potential in the medium to long term to private and institutional investors. Limited potential is defined, in particular, by below-average property condition combined with a location that is of similarly below-average quality.
The “Non-Strategic” subportfolio contains locations and properties that were identified in the latest extensive review of the overall portfolio as not being absolutely essential for further strategic development. Properties in the “Non-Strategic” portfolio are reviewed on a regular basis and offer further sale potential.