The following key figures provide an overview of how Vonovia’s results of operations and their drivers developed in 2018. When comparing the figures with the prior year, it is important to remember that BUWOG is included in the 2018 figures with an earnings contribution for the months from April to December, and that Victoria Park is included with an earnings contribution for the months from July to December. The key figures are shown based on the new management system. The prior-year figures are shown based on the new definitions.
Income from property management came to € 2,708.2 million, 13.2% higher than the value of € 2,391.6 million seen in the previous year. This increase was due primarily to the acquisitions made in the 2018 fiscal year. All in all, rental income in the Rental segment rose by 13.6%, from € 1,667.9 million to € 1,894.2 million. Of the rental income in the Rental segment, € 1,751.4 million is attributable to rental income in Germany (2017: € 1,639.3 million), € 83.1 million to rental income in Austria (2017: € 25.8 million) and € 58.4 million in Sweden.
As of the end of 2018, Vonovia managed a portfolio comprising 395,769 of its own residential units (2017: 346,644). We sold a total of 15,102 units in the course of 2018 (Recurring Sales and Non-core Disposals) (2017: 11,780) and acquired 63,706 units (2017: 24,847).
BUWOG’s portfolio contributed € 242.1 million to the income from property management in 2018, and Victoria Park’s portfolio contributed € 59.5 million.
Income from disposal of properties came to € 1,097.5 million, 9.0% below the value of € 1,206.4 million seen in the previous year.
The Adjusted EBITDA Total rose by € 235.1 million from € 1,319.7 million in the 2017 fiscal year to € 1,554.8 million in 2018. All segments contributed to this development. The Adjusted EBITDA Rental increased by 14.5% from € 1,148.7 million in 2017 to € 1,315.1 million. Adjusted EBITDA Value-add rose by 18.7% from € 102.1 million in the 2017 fiscal year to € 121.2 million in 2018. The Adjusted EBITDA Recurring Sales came in at € 79.1 million, up by around 27.2% on the value of € 62.2 million seen in the previous year. The Adjusted EBITDA Development amounted to € 39.4 million in 2018 (2017: € 6.7 million own new construction VTS).
Group FFO rose by 16.1% from € 975.0 million in 2017 to € 1,132.0 million in 2018. The FFO interest included in Group FFO came to € 328.8 million in 2018 (2017: € 287.5 million), while current FFO taxes came to € 36.5 million (2017: € 22.6 million).
At the end of 2018, Vonovia employed a workforce of 9,923 (2017: 8,448).
Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian real estate portfolio also includes maintenance and improvement contributions (EVB). The rental income from the Swedish real estate portfolio shows inclusive rents, meaning that the rental amounts include operating and heating costs.
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.
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 Value-add
The Adjusted EBITDA Value-add (formerly Adjusted EBITDA Value-add Business) is calculated by deducting operating expenses from the segment’s income.
Adjusted EBITDA Recurring Sales
The Adjusted EBITDA Recurring Sales compares the proceeds generated from privatization business with the fair values of assets sold and also deducts the related costs of sale. In order to disclose profit and revenue in the period in which they are incurred and to report a sales margin, the fair value of properties sold, valued in accordance with IFRS 5, have to be adjusted to reflect realized/unrealized changes in value.
Adjusted EBITDA Development
The Adjusted EBITDA Development includes the gross profit from the development activities of “to sell” projects (income from sold development projects less production costs) and the gross profit from the development activities of “to hold” projects (fair value of the units developed for own portfolio less incurred production costs) less the operating expenses from the Development segment.
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.
Monthly In-place Rent
The monthly in-place rent is measured in euro per square meter and is the current gross rental income per month for rented units as agreed in the corresponding rent agreements at the end of the relevant month before deduction of non-transferable ancillary costs divided by the living area of the rented units. The rental income from the Austrian real estate portfolio additionally includes maintenance and improvement contributions (EVB). The rental income from the Swedish real estate portfolio shows inclusive rents, meaning that the rental amounts include operating and heating costs. The in-place rent is often referred to as the “Nettokaltmiete” (net rent excl. ancillary costs such as heating, etc.). The monthly in-place rent (in €/m2) on a like-for-like basis refers to the monthly in-place rent for the residential portfolio that was already held by Vonovia 12 months previously, i.e., portfolio changes during this period are not included in the calculation of the in-place rent on a like-for-like basis. If we also include the increase in rent due to new construction measures and measures to add extra stories, then we arrive at the organic increase in rent.
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.
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.
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.
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.
Non-core Disposals
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 Disposals) 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.
Rental Income
Rental income refers to the current gross income for rented units as agreed in the corresponding lease agreements before the deduction of non-transferable ancillary costs. The rental income from the Austrian real estate portfolio also includes maintenance and improvement contributions (EVB). The rental income from the Swedish real estate portfolio shows inclusive rents, meaning that the rental amounts include operating and heating costs.
