Annual Report 2020

Economic Development of Vonovia SE

(Reporting on the basis of the German Commercial Code [HGB])

Fundamental Information

Vonovia SE has been entered in the commercial register of Bochum Local Court under HRB 16879 since 2017. Vonovia SE was established as Deutsche Annington Immobilien GmbH on June 17, 1998, with its registered headquarters in Frankfurt am Main, to serve as an acquisition vehicle for the purchase of residential properties by financial investors. Following further successful acquisitions over the course of time, it now forms the Vonovia Group together with its subsidiaries and is one of the leading German, Austrian and Swedish residential real estate management companies. Following the successful integration of the BUWOG Group, Vonovia also ranks among the five biggest real estate developers in Germany and is the market leader in Austria.

Vonovia SE performs the function of the management holding company within the Vonovia Group. In this role, it is responsible for determining and pursuing the overall strategy and for implementing this strategy by setting the company’s goals. It also performs property management, financing, service and coordination tasks for the Group. Furthermore, it is responsible for the management, control and monitoring system as well as risk management. To carry out these management functions, Vonovia SE also maintains service companies to which it has outsourced selected functions, allowing it to realize corresponding harmonization and standardization effects, as well as economies of scale.

The description of the company’s net assets, financial position and results of operations is based largely on the reporting of the Vonovia Group. The net assets, financial position and results of operations of Vonovia SE as the management holding company are ultimately determined by the assets of the Group companies and their ability to make sustainable positive contributions to earnings and generate positive cash flows. The company’s risk profile is therefore largely the same as the Group’s.

The preceding reporting for the Group of Vonovia SE therefore also expresses the company’s position.

The Vonovia SE annual financial statements have been prepared in accordance with the provisions of the German Commercial Code (HGB) taking into account the supplementary regulations of the German Stock Corporation Act (AktG). As a listed company, Vonovia SE is classed as a large corporation.

The annual and consolidated financial statements as well as the combined management report are published in the Federal Gazette (Bundesanzeiger).

Development of Business in 2020

Vonovia SE’s 2020 fiscal year was also dominated by the coronavirus pandemic. The top priority for Vonovia SE, as the Group parent company, was to implement the coronavirus protection measures for the employees and customers of the Vonovia Group and to maintain its business operations.

Vonovia held its Annual General Meeting as a virtual event on June 30, 2020, due to the pandemic. Another virtual Annual General Meeting is scheduled for April 16, 2021.

With the entry in the Commercial Register of Bochum on September 8, 2020, the company’s share capital was increased by issuing 17,000,000 new registered no-par-value shares by means of an accelerated book building procedure, excluding subscription rights. On July 30, 2020, the share capital had already been increased by 6,613,688 new registered no-par-value shares by way of a non-cash dividend, meaning that as of December 31, 2020, the share capital amounted to € 565,887,299.00. The premium in the amount of € 1,326,194,883.34 was added to the capital reserves under miscellaneous contributions.

In the 2020 fiscal year, Vonovia reviewed the sustainability of the successful strategy it has been pursuing since its initial listing, and took a particular look at sustainability aspects. As part of these endeavors, Vonovia is committed to achieving a climate-neutral housing stock by 2050.

Vonovia has a BBB+ rating awarded by the rating agency Standard & Poor’s and an A- rating awarded by the largest European rating agency Scope Group.

Results of Operations of Vonovia SE

The company regularly generates income from the charging of the services it provides, from income from investments in the form of dividend distributions from Group companies and from the transfer of profits. Profit-and-loss transfer agreements exist with, among other entities, the service companies, which themselves generate income by charging the real estate companies for the services they have provided.

The income from investments collected is based on the net profit of the subsidiaries that is eligible for distribution, which is, in turn, calculated based on the accounting standards set out in the German Commercial Code. The main difference between these standards and the IFRS accounting principles lies in the fact that, under IFRS accounting, the fair value principle has more of an impact than the cost principle does under HGB accounting.

In the consolidated financial statements under IFRS, the properties are remeasured at periodic intervals. Under HGB, the fixed assets are stated at amortized cost, taking depreciation into account. The capitalization regulations in particular also vary.

Expenses relate largely to personnel and administrative expenses associated with the management holding function, as well as to losses to be compensated for in connection with profit-and-loss transfer agreements.

The financial result is governed by the Group financing.

Business development in 2020 and, as a result, the result for 2020 is not influenced by any major non-recurring items. Only the assumption of profit by Deutsche Annington Acquisition Holding GmbH is characterized by exchange rate gains resulting from the conversion of Swedish krona as a result of Group financing measures. In addition, significantly higher interest had to be paid to affiliated companies as a result of Group financing.

Revenue and other operating income, the latter excluding reversals of provisions and valuation allowances, increased by € 13.9 million to € 222.7 million. Other operating income in the prior year included the disclosure of special effects from the uncovering of hidden reserves in the shares of affiliated companies in the amount of € 464.3 million as well as the proceeds from the sale of Deutsche Wohnen SE shares in the amount of € 292.6 million.

Expenses relating to personnel expenses, the cost of materials, depreciation and amortization and other expenses amounted to € 288.2 million, with changes in valuation allowances also being disregarded in other expenses. Consequently, the result before income from investments, net interest income and taxes is negative at around € 65.5 million.

The net effect of reversals and new valuation allowances recognized for receivables and other assets amounted to € 5.0 million; reversals of provisions came to € 5.2 million.

Purchased services, as a key component of the cost of materials, increased by € 9.0 million as a result of a higher volume of personnel being provided by Group companies, which is, in turn, consistent with the higher costs billed for Group services that are included in income. The provision of personnel relates to employees of Group companies who are assigned to Vonovia SE.

Personnel expenses came to € 38.4 million in 2020, on a par with the previous year (€ 38.3 million).

At € 20.5 million, depreciation and amortization was on a par with the previous year’s level (€ 19.4 million). Other operating expenses are on a similar level if we leave the special effects seen in the previous year out of the equation.

Net financial expenses to affiliated companies increased considerably to € 183.0 million. This is due to volume-related and structural factors in connection with a higher level of debt vis-à-vis Group companies during the fiscal year.

Net income from investments is up considerably year-on-year, with income of € 221.4 million reported in 2020 (2019: € -188.4 million). Whereas income from investments includes a material effect in the form of currency effects resulting from the conversion of the Swedish krona in 2020, income from investments in the previous year had been hit by structural measures within the Group.

The tax expense for 2020 comes to € 12.5 million as against € 8.4 million a year earlier.

As the controlling company in a VAT group, Vonovia SE owes the corresponding income taxes.

Vonovia SE closed the 2020 fiscal year with a net loss for the year of € 53,522,768.55, as against net income for the year of € 419,110,421.17 in 2019. After offsetting this net loss for the year against the profit carried forward from the previous year of € 61,352,008.56, the Management Board withdrew € 470,000,000.00 from retained earnings and € 522,170,759.99 from capital reserves, resulting in a net profit for the 2020 fiscal year of € 1,000,000,000.00.

The Management Board and the Supervisory Board propose to the Annual General Meeting that, of the profit of Vonovia SE for the 2020 fiscal year of € 1,000,000,000.00, an amount of € 956,349,535.31 on the 565,887,299 shares of the share capital as of December 31, 2020, be paid to the shareholders as a dividend, corresponding to € 1.69 per share. It is also proposed that the remaining amount of € 43,650,464.69 be carried forward to the new account or be used for other dividends on shares carrying dividend rights at the time of the Annual General Meeting and which go beyond those on the share capital as of December 31, 2020.

As in prior years, the dividend for the 2020 fiscal year, payable after the Annual General Meeting to be held on April 16, 2021, will again include the option of a non-cash dividend in shares, to the extent that the Management Board and the Supervisory Board consider this to be in the interests of the company and its shareholders.

Income Statement

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Personnel expenses



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Interest and similar income



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Net Assets and Financial Position of Vonovia SE

The company’s non-current assets of € 20,626.5 million are largely characterized by financial assets in the amount of € 20,596.1 million, virtually unchanged against 2019.

The company’s intangible assets and tangible fixed assets fell overall due to depreciation and amortization.

Net current assets (current assets less liabilities) including net liquidity are governed by the Group financing structure, in which Vonovia SE assumes the function of the cash pool leader. The Group’s net lending/borrowing position changed by a total of € 369.7 million in favor of Vonovia SE in 2020. The change in the net lending/borrowing position is due, among other things, to the refinancing of the Swedish business.

Provisions came to € 167.4 million at the end of the year (2019: € 163.6 million), with € 74.2 million attributable to provisions for pensions and € 32.9 million to income tax provisions. Other provisions fell, largely due to a lower volume of outstanding invoices.

Total equity had risen to € 10,725.6 million by the end of 2020 (2019: € 10,280.6 million). This increase is due to the capital increase in connection with the scrip dividend and to the cash capital increase on September 8, 2020 in the context of accelerated book building. The cash dividend distribution in 2020 and the net loss for the year had the opposite effect of reducing total equity.


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Dec. 31, 2019

Dec. 31, 2020







Financial assets



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Dec. 31, 2019

Dec. 31, 2020




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Cash flow from operating activities is characterized by the income and expenses relating to the performance of the management holding functions. Vonovia SE only has appreciable cash flows from investing activities when acquisitions are made. Cash flows from financing activities regularly result from changes in Group financing, selective borrowing and the repayment of debt financing, mainly subsidized development loans and/or promissory note loans, as well as the corresponding interest payments. Liquidity increased from € 92.9 million to € 190.8 million in 2020.

Employees of Vonovia SE

At the end of the 2020 fiscal year, an average of 161 people were employed at the company (2019: 168), 128 of whom were full-time employees and 33 of whom were part-time.

Opportunities and Risks for Vonovia SE

The likely development of Vonovia SE in the 2021 fiscal year depends to a considerable extent on the development of the Group as a whole and its opportunity and risk situation. This situation is set out in the Group’s opportunity and risk report, meaning that the statements set out there in regard to the opportunity and risk situation of the Group also apply to the annual financial statements of Vonovia SE prepared in accordance with German commercial law, where the risks can have an impact on the valuation of long-term financial assets and on the amount of the results of subsidiaries collected/compensated for.

Forecast for Vonovia SE

Since the company’s net assets, financial position and results of operations are determined solely by the ability of the Group companies to make positive earnings contributions and generate positive cash flows in the long term, we refer at this point to the Forecast Report for the Group. The most important financial performance indicator for the annual financial statements of Vonovia SE is the annual result.

The company’s result for the 2020 fiscal year is characterized to a much lesser extent than in the past by special effects resulting from acquisitions, integration expenses and company law restructuring measures. The effect associated with the considerable book gain from the sale of shares in Deutsche Wohnen SE in 2019 was also not repeated in 2020. Leaving these special effects out of the equation, the company’s earnings for the 2020 fiscal year came to around € 65 million, i.e., in the mid-double-digit millions as forecast, on a par with the level seen in previous years.

The results for the 2021 fiscal year will in turn be characterized by the results of subsidiaries collected/compensated for on the basis of income from investments and profit-and-loss transfer agreements, income from services, personnel and administrative expenses and the financial result.

All in all, we expect the company’s result for the 2021 fiscal year to again be on a par with the figure seen in the previous years without special effects.

It is still generally planned for Vonovia SE to distribute 70% of the Group FFO to the shareholders as a dividend, which would correspond to a dividend of € 1.69 per share for the 2020 fiscal year.

Statement of the Management Board on the Economic Situation

The net assets, financial position and results of operations of the company are extremely positive, particularly given the solid financing, the resulting balanced maturity profile and the financing flexibility gained through the rating-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 Recurring Sales and a successful development business promote ongoing improvement in profitability. Developments in Germany are supported by equally positive developments in Sweden and Austria.

Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Group FFO
Group FFO reflects the recurring earnings from the operating business. In addition to the adjusted EBITDA for the Rental, Value-add, Recurring Sales and Development segments, Group FFO allows for recurring current net interest expenses from non-derivative financial instruments as well as current 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.
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 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.