Vonovia SE · XETR:VNA
Vonovia — Q1 2016 Earnings Presentation
37 slides from Vonovia's earnings presentation, May 12, 2016
Slide 1: Q1 2016 Earnings Call
Q1 2016 Earnings Call May 12, 2016 Rolf Buch, CEO Dr. A. Stefan Kirsten, CFO
Slide 2: Highlights
Highlights Strong performance in Q1 2016 Industrialization effects achieved faster and better than originally anticipated In-place rent of €5.84 (+5.6% y-o-y). L-f-l rent growth of 2.9% y-o-y Adjusted EBITDA Operations1 of €276.1m or €776 per unit (+6.4% y-o-y) FFO 1 of 186.3m or €0.40 per share (up
Slide 3: Proven Strategy Unchanged
Proven Strategy Unchanged Reputation & Customer Satisfaction Systematic optimization of operating Traditional performance and core business productivity Property Mgmt. 1 Strategy Control of maintenance costs and release of capital for new property investments that offer greater potential Ensure bala
Slide 4: All KPIs Improved
All KPIs Improved Q1 2016 Q1 2015 Delta In-place rent €/month/sqm 5.84 5.53 5.6% In-place rent l-f-l €/month/sqm 5.76 5.60 2.9% +6.4% per unit L-f-l rent growth % 2.9 2.6 +0.3pp (€776 vs. €729) Vacancy rate % 2.8 3.4 -0.6pp Rental income €m 392.0 263.6 48.7% Adj. EBITDA Operations €m 276.1 182.5 51.
Slide 5: Growing Adj. EBITDA Operations
Growing Adj. EBITDA Operations Adjusted EBITDA Operations margin of 70.3% in Q1 2016, up from 69.2% in Q1 2015 Excluding expensed repairs and maintenance and including the full platform costs, the adj. EBITDA margin was 85.2% €m Q1 2016 Q1 2015 Delta Includes Rental income 392.0 263.6 48.7% • Our ow
Slide 6: Maintenance Expense and Capitalized Maintenance vs. Modernization
Maintenance Expense and Capitalized Maintenance vs. Modernization Reactive maintenance of €73.5m (€3.31 per sqm) in Q1 2016 with €58.6m for maintenance expense and €14.9m for capitalized maintenance Pro-active modernization investments of 51.9m (€2.34 per sqm) in Q1 2016 in the context of our 2016 m
Slide 7: Maintenance or Modernization?
Maintenance or Modernization? Illustrative Flow of Funds Rental Income - Maintenance Expense MAINTENANCE - Operating expenses (“Platform costs”) Allocation between expensed maintenance + adj. EBITDA Extension and Other and capitalized maintenance is a major swing factor in operating margin = Adj. EB
Slide 8: FFO per Share up 26% y-o-y
FFO per Share up 26% y-o-y First-time disclosure of FFO attributable to minorities €m (unless indicated otherwise) Q1 2016 Q1 2015 Delta Adj. EBITDA Operations 276.1 182.5 51.3% FFO interest expense -86.0 -63.2 36.1% Current income tax (Operations) -3.8 -1.3 192.3% FFO 1 186.3 118.0 57.9% of which a
Slide 9: EPRA NAV Broadly Unchanged - As Expected
EPRA NAV Broadly Unchanged - As Expected No portfolio revaluation in Q1 (next portfolio valuation is at year end) €m (unless indicated otherwise) March 31, 2016 Dec. 31, 2015 Delta Equity attributable to Vonovia's shareholders 10,628.4 10,620.5 0.1% Deferred taxes on investment properties and assets
Slide 10: Further LTV Reduction
Further LTV Reduction LTV of 45.8% as of Q1 2016 Net debt is adjusted to fully include sales proceeds, the payments of which are received in a staggered form Fair value includes DW shares following their accounting in non-current assets €m (unless indicated otherwise) March 31, 2016 Dec. 31, 2015 De
Slide 11: Maturity Profile Provides Opportunities
Maturity Profile Provides Opportunities Debt maturity profile as of March 31, 2016 (€m) 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 from 2027 Mortgages Structured Loans Bond Hybrid Hybrid (Equity) CMBS CMBS included at contractua
Slide 12: Deutsche Wohnen Participation Profitable
Deutsche Wohnen Participation Profitable Accounting treatment: Deutsche Wohnen shares are accounted for under „available for-sale securities“ in IFRS (in non-current assets) Initial inclusion at purchase cost of €405.5 million Accounting on a mark-to-market basis, with adjustments to fair market val
Slide 13: Strong Start into 2016 Prompts Guidance Increase
Strong Start into 2016 Prompts Guidance Increase FY 2015 Guidance 2016 Guidance 2016 actuals old new L-f-l rental growth 2.9% 2.8-3.0% 2.8-3.0% Vacancy 2.7% ~3% ~2.7% Rental Income €1,415m €1,500-1,520m €1,520-1,540m FFO1 €608m €690-710m €720-740 FFO1/share (eop NOSH) €1.30 €1.48-1.52 €1.55-1.59 EPR
Slide 14: Capital Markets Day 2016
Capital Markets Day 2016 Agenda: June 6 Noon: Lunch and Management Presentation 14:00 – 17:30 Round tables on Extension / Product Management Modernization Space Creation / Innovation 18:30 Tour of „Zeche Zollverein“ 20:00 Reception and dinner at the „Casino“ Restaurant on „Zeche Zollverein“ June 7 9
Slide 15: Perception Study Scheduled for June
Perception Study Scheduled for June • While a large amount of investor views have been collected over time, the feedback received in the context of conferences and roadshows tends to be largely event driven and “tainted” by the dominating event at that time. • Comprehensive quality feedback on multi
Slide 16: Action-driven Portfolio Clustering
Action-driven Portfolio Clustering More than 50% of current portfolio in Upgrade Buildings and Optimize Apartments cluster offer significant investment potential for sustainable organic growth KPIs of Strategic Clusters underline strength of Vonovia‘s core portfolio Residential In-place Vacancy Marc
Slide 17: Sales Program Fully on Track
Sales Program Fully on Track Q1 2016 sales mostly related to the LEG portfolio sale announced in Q4 2015 Excluding sale to LEG, Q1 sales results were in line with previous year €m (unless indicated otherwise) Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Privatization Non-core/Non-strategic Total
Slide 18: Growing Investment Program Well on Track
Growing Investment Program Well on Track Yield* 7.2% 7.4% ~7.6% ~7% Yield commitment for 2015 Investment Program unchanged €m 430-500 2016 Investment Program fully on track: 356 Projects with a combined volume of €117m 32 already underway 108 Growing contribution from new initiatives 95 (e.g. heatin
Slide 19: Innovation As Internal Growth Driver
Innovation As Internal Growth Driver Portfolio Management Extension Q1 2016 Results │ May 12, 2016 Page 19
Slide 20: Acquisition Opportunities - Pipeline Update
Acquisition Opportunities - Pipeline Update 60 k 50k 50 k 40 k 34k 33k 30 k 20 k 10 k 1k 0k 0k 0k Examined Analysed in more Due Diligence, Bids Signed Closed detail partly ongoing Acquisitions Pipeline as per March 31, 2016; number of units Q1 2016 Results │ May 12, 2016 Page 20
Slide 21: Summary
Summary Operational excellence continues in 2016 Guidance increase demonstrates strength of underlying business Proven strategy is increasingly paying off Investments and innovation as main value drivers for growth Q1 2016 Results │ May 12, 2016 Page 21
Slide 22: IR Contact & Financial Calendar
IR Contact & Financial Calendar Contact Financial Calendar 2016 May 12 Interim report Q1 2016 May 12 Annual General Meeting, Düsseldorf Rene Hoffmann Head of Investor Relations May 23 Management Roadshow, London Vonovia SE May 24 Management Roadshow, Frankfurt Philippstr. 3 May 25 Kempen European Pr
Slide 23: Appendix
APPENDIX Q1 2016 Results │ May 12, 2016 Page 23
Slide 24: Strong Track Record Across All KPIs
Strong Track Record Across All KPIs In-place rent (€/sqm) | Vacancy rate (%) Adjusted EBITDA Operations (€/unit) | Cost €/unit 881 2,879 4.8 5.75 850 810 830 4.1 2,709 3.9 5.58 3.5 754 3.4 5.40 2.7 2.7 2,468 5.28 +2.5% +2.9% +~2.9% 644 +1.9% 2,378 2,372 5.17 5.05 2,244 2010 2011 2012 2013 2014 2015
Slide 25: EBITDA
EBITDA Bridge to Adjusted EBITDA (€m) Q1 2016 Q1 2015 Change (%) Profit for the period 79.2 30.3 161.4 Net interest result 131.3 98.1 33.8 Income taxes 42.8 22.8 87.7 Depreciation 4.4 2.0 120.0 Net income from fair value adjustments of investment properties NA NA NA • EBITDA increase mainly driven b
Slide 26: P&L
P&L €m Q1 2016 Q1 2015 Change (%) Income from property letting 556.6 380.9 46.1 Increase mainly acquisition-related, additionally in- place rent on a like-for-like basis increased by 2.9%; Other income from property management 9.3 5.9 57.6 additionally vacancy rate decreased by 0.6pp Income from pro
Slide 27: Balance Sheet (1/2)
Balance Sheet (1/2) €m Mar 31, 2016 Dec 31, 2015 Change (%) Intangible Assets 2,741.3 2,724.0 0.6 Property, plant and equipment 76.4 70.7 8.1 Investment properties 23,720.6 23,431.3 1.2 Increase mainly driven by acquisition shares of DW Financial assets 630.1 221.7 184.2 Other assets 27.4 158.5 -82.
Slide 28: Balance Sheet (2/2)
Balance Sheet (2/2) €m Mar 31, 2016 Dec 31, 2015 Change (%) Subscribed capital 466.0 466.0 0.0 Capital reserves 5,892.5 5,892.5 0.0 Including negative effects from cash flow hedges in the Retained earnings 4,346.0 4,309.9 0.8 amount of € 64.3 million. On the other hand, equity increased by € 36.1 mi
Slide 29: Bonds / Rating
Bonds / Rating Corporate Investment grade rating as of 2015-09-30 Rating agency Rating Outlook Last Update Standard & Poor’s BBB+ Stable 11. Feb 16 Bond ratings as of 2015-09-30 Final Maturity Amount Issue price Coupon Rating Date 3 years 2.125% € 700m 99.793% 2.125% 25 July 2016 BBB+ Euro Bond 6 ye
Slide 30: Bond and Rating KPIs as per March 31, 2016
Bond and Rating KPIs as per March 31, 2016 Bond KPIs Covenant Level Actual LTV <60% 47% Total Debt / Total Assets Secured LTV <45% 22% Secured Debt / Total Assets ICR >1.80x 3.17x LTM1 EBITDA / LTM Interest Expense Unencumbered Assets >125% 214% Unencumbered Assets / Unsecured Debt Rating KPIs Coven
Slide 31: CMBS Overview as of March 31, 2016
CMBS Overview as of March 31, 2016 Name Amount Coupon Contractual Maturity Date German Residential Funding 2013-1 Limited € 1,845m 2.80% 27 Aug 2018 German Residential Funding 2013-2 Limited € 658 m 2.69% 27 Nov 2018 Taurus 2013 (GMF1) PLC € 1,029 m 3.35% 21 May 2018 Expected prepayment fees for ear
Slide 32: Portfolio KPIs by Top 25 Cities
Portfolio KPIs by Top 25 Cities City Residential In-place rent New letting Vacancy rate Vacancy rate Share rent units (€/sqm) rent (€/sqm) March 31, March 31, controlled 2016 2015 Dresden 37,898 5.33 6.05 2.6% 2.9% 0.0% Berlin 30,517 5.87 7.31 1.6% 1.4% 8.7% Dortmund 19,432 5.11 5.80 2.5% 2.7% 14.0%
Slide 33: Valuation KPIs by Top 25 Cities
Valuation KPIs by Top 25 Cities City Fair value Share in terms Fair Value Annualized in- Multiple (€m) of FV (€/sqm) place rent (in-place rent) (€m) March 31,2016 Dresden 2,104 8.9% 924 143.7 14.6 Berlin 2,564 10.8% 1,302 138.9 18.5 Dortmund 973 4.1% 811 72.9 13.3 Essen 629 2.7% 805 49.4 12.7 Kiel 6
Slide 34: Additional KPIs
Additional KPIs Q1 2016 / Q1 2015 / March 31, 2016 March 31, 2015 Headcount 6,683 5,737 Number of units under 3rd-party management 54,364 42,083 EPRA vacancy rate 2.6% 3.2% IFRS profit for the period 79.2 30.3 Number of units acquired 2,417 144,602 Number of units sold 15,551 2,489 Q1 2016 Results │
Slide 35: FFO by Segments
FFO by Segments Interest /Tax Q1 2016 Q1 2015 Allocation based on -86.0 -63.2 Interest Carrying Amounts -3.8 -1.3 Tax Allocation -26.2 -2.2 based on EBT Tax Sales in €m EBITDA Q1 2016 Carrying Amount Interest EBT Tax FFO Q1 2016 269.0 22,842.6 -84.7 184.3 -3.7 180.6 Rental 7.6 350.9 -1.3 6.3 -0.1 6.
Slide 36: FFO Minorities
FFO Minorities Up until and including the fiscal year 2015, Vonovia did not disclose an amount attributable to minority shareholders. Defined by the absolute € million amount, minorities are comparatively small in relation to the FFO 1 figure and can paid out of the ~30% of FFO 1 that is not distrib
Slide 37: Disclaimer
Disclaimer This presentation has been specifically prepared by Vonovia SE and/or its affiliates (together, “Vonovia”) for internal use. Consequently, it may not be sufficient or appropriate for the purpose for which a third party might use it. This presentation has been provided for information purp