Reconciliation

The financial result changed from € -326.3 million in 2017 to € -440.1 million in 2018. FFO interest expense is derived from the financial result as follows:

(XLS:) Download

Reconciliation of Financial Result/FFO Interest Expense

in € million

 

2017

 

2018

 

Change in %

*

Excluding income from other investments.

**

Thereof in the 2018 fiscal year: FFO 1 interest € 317.4 million, interest Development segment € 11.4 million.

 

 

 

 

 

 

 

Income from loans

 

1.6

 

2.2

 

37.5

Interest income

 

25.1

 

6.8

 

-72.9

Interest expense

 

-353.0

 

-449.1

 

27.2

Financial result*

 

-326.3

 

-440.1

 

34.9

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

Transaction costs

 

7.9

 

14.2

 

79.7

Prepayment penalties and commitment interest

 

16.4

 

8.4

 

-48.8

Effects from the valuation of non-derivative financial instruments

 

-8.8

 

14.9

 

–

Derivatives

 

-3.9

 

14.3

 

–

Interest accretion to provisions

 

9.0

 

9.1

 

1.1

Accrued interest

 

3.1

 

43.4

 

>100

Interest on prior-year tax

 

–

 

20.3

 

–

Other effects

 

2.6

 

13.5

 

>100

Net cash interest

 

-300.0

 

-302.0

 

0.7

 

 

 

 

 

 

 

Deferred interest adjustment

 

-3.1

 

-43.4

 

>100

Adjustments income from investments in other real estate companies

 

13.0

 

14.0

 

7.7

Adjustment of interest paid due to taxes

 

2.6

 

2.6

 

–

 

 

 

 

 

 

 

Interest expense FFO**

 

-287.5

 

-328.8

 

14.4

The FFO interest expense came to € -328.8 million in 2018, up by 14.4% on the prior-year value of € -287.5 million, primarily due to the 100% debt financing of the BUWOG acquisition. The acquisitions of BUWOG and Victoria Park also resulted in additional non-derivative interest from the operating business in the amount of € 38.8 million.

The profit for the period came to € 2,402.8 million in the 2018 reporting period, down by 6.4% on the previous year’s value of € 2,566.9 million. BUWOG contributed total Adjusted EBITDA of € 221.9 million to the Group’s profit for the period in the 2018 reporting period, with Victoria Park contributing Adjusted EBITDA of € 33.7 million.

The previous key figure FFO 1 is derived from the profit for the period as follows:

(XLS:) Download

Reconciliation of Profit for the Period/FFO

in € million

 

2017

 

2018

 

Change in %

*

Excluding income from investments.

**

Incl. financial income from investments in other real estate companies.

***

Based on the shares carrying dividend rights on the reporting date Dec. 31, 2018: 518,077,934, Dec. 31, 2017: 485,100,826.

 

 

 

 

 

 

 

Profit for the Period

 

2,566.9

 

2,402.8

 

-6.4

Financial result*

 

326.3

 

440.1

 

34.9

Income taxes

 

1,440.5

 

1,471.5

 

2.2

Depreciation and amortization

 

372.2

 

737.9

 

98.3

Net income from adjustments of investment properties

 

-3,434.1

 

-3,517.9

 

2.4

= EBITDA IFRS

 

1,271.8

 

1,534.4

 

20.6

Non-recurring items

 

86.9

 

106.6

 

22.7

Total period adjustments from assets held for sale

 

-10.7

 

-0.5

 

-95.3

Financial income from investments in other real estate companies

 

-13.0

 

-14.0

 

7.7

= Adjusted EBITDA

 

1,335.0

 

1,626.5

 

21.8

Adjusted EBITDA Sales

 

-112.1

 

-208.3

 

85.8

(excl. gross profit to hold)

 

–

 

-20.7

 

–

= Adjusted EBITDA OPERATIONS

 

1,222.9

 

1,397.5

 

14.3

Interest expense FFO 1**

 

-287.5

 

-317.4

 

10.4

Current income taxes FFO 1

 

-15.9

 

-15.4

 

-3.1

= FFO 1

 

919.5

 

1,064.7

 

15.8

Capitalized

 

-85.7

 

-137.7

 

60.7

= AFFO

 

833.8

 

927.0

 

11.2

Current income taxes Sales

 

-19.2

 

-53.9

 

>100

FFO 2 (FFO 1 incl. Adjusted EBITDA Sales/current income taxes Sales)

 

1,012.4

 

1,219.1

 

20.4

 

 

 

 

 

 

 

FFO 1 per share in €***

 

1.90

 

2.06

 

8.4

AFFO per share in €***

 

1.72

 

1.79

 

4.1

As part of the change in the management system, the reconciliation of profit for the period will from now on take place in :

(XLS:) Download

Reconciliation of Profit for the Period/Group FFO

in € million

 

2017

 

2018

 

Change in %

*

Excluding income from investments.

**

Incl. financial income from investments in other real estate companies.

***

Based on the shares carrying dividend rights on the reporting date Dec. 31, 2018: 518,077,934, Dec. 31, 2017: 485,100,826.

 

 

 

 

 

 

 

Profit for the Period

 

2,566.9

 

2,402.8

 

-6.4

Financial result*

 

326.3

 

440.1

 

34.9

Income taxes

 

1,440.5

 

1,471.5

 

2.2

Depreciation and amortization

 

372.2

 

737.9

 

98.3

Net income from fair value adjustments of investment properties

 

-3,434.1

 

-3,517.9

 

2.4

= EBITDA IFRS

 

1,271.8

 

1,534.4

 

20.6

Non-recurring items

 

86.9

 

106.6

 

22.7

Total period adjustments from assets held for sale

 

-10.7

 

-0.5

 

-95.3

Financial income from investments in other companies

 

-13.0

 

-14.0

 

7.7

Other ()

 

-49.9

 

-129.2

 

>100

Intragroup profits

 

27.9

 

38.8

 

39.1

Valuation result New construction/development to hold

 

6.7

 

18.7

 

>100

=

 

1,319.7

 

1,554.8

 

17.8

Interest expense FFO**

 

-287.5

 

-328.8

 

14.4

Current income taxes FFO

 

-22.6

 

-36.5

 

61.5

Consolidation

 

-34.6

 

-57.5

 

66.2

= Group FFO

 

975.0

 

1,132.0

 

16.1

 

 

 

 

 

 

 

Group FFO per share in €***

 

2.01

 

2.18

 

8.7
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 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.
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.
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.
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.
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.