Value-add Business segment

We boosted our earnings power further in the Value-add Business segment. In particular, we significantly improved the output of our craftsmen’s organization, allowing us to make our investments in improving our portfolio as planned. In addition, we continued to expand our business activities in the areas of condominium administration, the provision of cable television to our tenants, metering services and insurance and residential environment services in the 2017 fiscal year. Vonovia Immobilien Treuhand now provides services to a total of approximately 100,000 units, of which 63,000 are apartments managed by third parties.

Total income from our Value-add Business activities rose by 37.5% from € 851.2 million to € 1,170.5 million. The improved considerably from € 57.0 million in 2016 to € 102.1 million in 2017.

Other came to € -27.9 million in 2017 (2016: € -9.2 million). This includes the consolidation of intra-Group profits from capitalized modernization and services performed internally, which are included in the EBITDA of the Value-add Business segment. As a result, this amount includes the cash advantage generated by the Group in connection with these intra-Group services.

Adjusted EBITDA Value-add Business
The adjusted EBITDA Value-add Business (formerly adjusted EBITDA Extension) is calculated by deducting operating expenses from the segment’s income. Note: The name of this segment was changed without any content-related changes to the segment definition.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
Adjusted EBITDA is the result before interest, taxes, depreciation and amortization (including income from other operational investments) adjusted for effects that do not relate to the period, recur irregularly or that are atypical for business operation, and for net income from fair value adjustments to investment properties. These 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), IPO preparation costs and expenses for pre-retirement part-time work arrangements and severance payments.
Maintenance
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.