Value-add Business

We once again boosted our earnings power further in the Value-add Business segment. The increase in the output of our craftsmen’s organization, in particular, contributed to this trend and allowed us to make our investments in improving our portfolio as planned. In addition, we also 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 reporting period. As a leading real estate service provider, Vonovia Immobilien Treuhand now provides services to a total of more than 100,000 units across Germany, around 10,400 of which are located in Berlin.

External income from our Value-add Business activities with our end customers in the first nine months of 2017 rose by 25.7% as against the same period of 2016, from € 91.6 million to € 115.1 million. Group income rose by 40.9%, from € 482.8 million to € 680.3 million in the same period. Overall, this equates to an increase of 38.5%, from € 574.4 million to € 795.4 million. The adjusted EBITDA Value-add Business improved considerably from € 45.1 million in the first nine months of 2016 to € 76.0 million in the first nine months of 2017. The EBITDA margin of the core business, calculated based on the adjusted EBITDA Operations in relation to rental income within the Group, once again showed positive development in the current reporting period. It increased from 71.8% in the first nine months of 2016 to 73.6% in the first nine months of 2017.