Group’s Business Development

Business Development in 2018 – An Overview

The 2018 fiscal year was very successful for Vonovia on the whole. We were systematic in the implementation of our corporate strategy. With the acquisitions of BUWOG and Victoria Park, we were able to further expand our leading market position and make our business more international.

The table below provides an overview of the development of our forecast performance indicators and the target achievement level for these indicators in the 2018 fiscal year. It also shows the new performance indicators, and .



Actual 2017


Last forecast for 2018 in the 2018 Q3 Report


Actual 2018



FFO1 2017 adjusted incl. transaction holding costs.


Based on the current number of shares in each case, 2018: 518.1 million.









Adjusted NAV/share


€ 38.49


approx. € 45


€ 44.90




€ 43.88


approx. € 52


€ 50.39


FFO 1*


€ 919.5 million


€ 1,050–1,070 million


€ 1,064.7 million


FFO 1/share**


€ 1.90


€ 2.03–2.07


€ 2.06


Adjusted EBITDA Total


€ 1,319.7 million




€ 1,554.8 million


Group FFO


€ 975.0 million




€ 1,132.0 million


Group FFO/share


€ 2.01




€ 2.18



Increase of 1.6%


Down slightly year-over-year


Decrease of 2.6%


The Adjusted NAV per share came in at € 44.90 in 2018, up by 16.7% on the prior-year value of € 38.49. This corresponds to an NAV per share of € 50.39 (2017: € 43.88). This increase was due primarily to the net income from adjustments of investment properties of € 3,517.9 million (2017: € 3,434.1 million).

FFO 1 rose by € 145.2 million to € 1,064.7 million in 2018 (2017: € 919.5 million in line with the current definition) and was therefore within the forecast range of € 1,050–1,070 million. This corresponds to FFO1 per share of € 2.06 (2017: € 1.90, most recent forecast € 2.03–2.07). The improvement in was the main factor behind the increase in FFO 1, which rose from € 1,148.7 million in 2017 to € 1,315.1 million in 2018, primarily because of acquisitions. The interest expense excluding non-recurring items (FFO 1 interest expense) came to € 317.4 million in 2018, up by 10.4% on the prior-year value of € 287.5 million.

The Customer Satisfaction Index (CSI) was slightly down on the prior-year value.

Statement of the Management Board on the Economic Situation

The net assets, financial position and results of operations of the Group are extremely positive, particularly given the solid financing, the resulting balanced maturity profile and the financing flexibility gained through the -backed bond financings with a view to both organic and external growth. The ongoing improvements to the property management processes, the expansion of the Value-add segment, the steady and a successful development business promote ongoing improvement in profitability.

Adjusted EBITDA Total
Adjusted EBITDA Total is the result before interest, taxes, depreciation and amortization (including income from other operational investments and intragroup profits) 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. The Adjusted EBITDA Total is derived from the sum of the Adjusted EBITDA Rental, Adjusted EBITDA Value-add, Adjusted EBITDA Recurring Sales and Adjusted EBITDA Development.
Group FFO
Group FFO reflects the recurring earnings from the sustained operating business. In addition to the Adjusted EBITDA for the Rental, Value-add, Recurring Sales and Development segments, Group FFO allows 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 presentation of the NAV based on the EPRA definition aims to show the net asset value in a long-term business model. The equity attributable to Vonovia’s shareholders is adjusted to reflect deferred taxes on investment properties, the fair value of derivative financial instruments and the deferred taxes on derivative financial instruments. In order to boost transparency, an adjusted NAV, which involves eliminating goodwill in full, is also reported.
CSI (Customer Satisfaction Index)
The CSI is determined at regular intervals by means of systematic customer surveys and reflects how our services are perceived and accepted by our customers. The CSI is determined on the basis of points given by the customers for our properties and their neighborhood, customer service and commercial and technical support as well as maintenance and modernization management.
EPRA (European Public Real Estate Association)
The European Public Real Estate Association (EPRA) is a non-profit organization that has its registered headquarters in Brussels and represents the interests of listed European real estate companies. Its mission is to raise awareness of European listed real estate companies as a potential investment destination that offers an alternative to conventional investments. EPRA is a registered trademark of the European Public Real Estate Association.
Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
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.
Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.
Recurring Sales
The Recurring Sales segment (formerly part of the “Sales” segment) includes the regular and sustainable disposals of individual condominiums from our portfolio. It does not include the sale of entire buildings or land (Non-core disposals). These properties are only sold as and when the right opportunities present themselves, meaning that the sales do not form part of our operating business within the narrower sense of the term. Therefore, these sales will be reported under “Other” in our segment reporting.