Annual Report 2016 Report Annual
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DEUTSCHE WOHNEN THINKING AHEAD ANNUAL REPORT 2016 THINKING FOR THEFOR CITY TOMORROW OF AHEAD ANNUAL REPORT 2016 200 212 GROUP KEY FIGURES OF THE DEUTSCHE WOHNEN AG Profit and loss statement 2016 2015 Change Rental income EUR m 704.5 634.0 11.1 % Earnings from Residential Property Management EUR m 586.4 519.2 12.9 % Earnings from Disposals EUR m 54.3 68.9 21.2 % Earnings from Nursing and Assisted Living EUR m 16.8 15.6 7.7 % Corporate expenses EUR m – 73.7 – 74.7 1.3 % EBITDA EUR m 575.1 465.0 23.7 % EBT (adjusted) EUR m 453.7 384.4 18.0 % EBT (as reported) EUR m 2,489.2 1,787.2 39.3 % Group profit (after taxes) EUR m 1,623.2 1,199.92) 35.3 % Group profit (after taxes)1) EUR per share 4.69 3.602) 30.3 % FFO I EUR m 383.9 304.02) 26.3 % FFO I 1) EUR per share 1.14 0.952) 20.0 % FFO II EUR m 438.2 372.92) 17.5 % FFO II 1) EUR per share 1.30 1.16 12.1 % EPRA Earnings EUR m 359.5 227.9 57.7 % Balance sheet 31/12/2016 31/12/2015 Change Investment properties EUR m 16,005.1 11,859.1 4,146.0 Current assets EUR m 669.2 901.2 – 232.0 Equity EUR m 8,234.0 6,798.12) 1,435.9 Net financial liabilities EUR m 6,185.2 4,582.5 1,602.7 Loan-to-Value Ratio (LTV) in % 37.7 38.0 – 0.3 pp Total assets EUR m 16,783.6 13,376.62) 3,407.0 Share 31/12/2016 31/12/2015 Change Share price (closing price) EUR per share 29.84 25.62 16.5 % Number of shares m 337.48 337.41 0.1 Market capitalisation EUR bn 10.1 8.6 17.4 % Net Asset Value (NAV) 31/12/2016 31/12/2015 Change EPRA NAV (undiluted) EUR m 10,017.0 7,765.62) 2,251.5 EPRA NAV (undiluted) EUR per share 29.68 23.022) 28.9 % EPRA NAV (diluted) EUR per share 29.69 23.552) 26.1 % Fair values 31/12/2016 31/12/2015 Change Fair value of real estate property 3) EUR m 15,465 11,721 3,744.0 Fair value per sqm residential and commercial area 3) EUR per sqm 1,580 1,282 23.2 % 1) Based on average number of around 337.45 million issued shares in 2016 and around 320.85 million in 2015 2) Previous year’s figures amended 3) Only comprises residential and commercial buildings, without Nursing and Assisted Living OUR PORTFOLIO AT A GLANCE EUR 15.7BILLION VALUE OF OUR 160,000 PORTFOLIO RESIDENTIAL AND APPROX. COMMERCIAL UNITS 70% IN BERLIN Kiel Lübeck Berlin Hanover Potsdam Magdeburg Brunswick Halle Dusseldorf Leipzig Dresden Cologne Bonn Erfurt Wiesbaden Mainz Frankfurt/Main Ludwigshafen Mannheim CORE + 85 % THE MOST DYNAMIC MARKETS WITH STRONG RENTAL GROWTH CORE 12 % MARKETS WITH MODERATELY RISING RENTS 212 200 1 EDITORIAL WITH BOTH A CLEAR STRATEGY AND OUR VALUES WE ARE SHAPING THE CITY OF TOMORROW DEAR SIR OR MADAM, Publicly listed property companies have established themselves as In all of this, politicians are obviously fail- a strong asset class, and it is impossible to imagine today’s stock ing to recognise that private industry has markets without them. The property sector has become particularly always made sustainable investments and attractive for foreign investors with its significant market capitalisa- that it will continue to do so in future. tion, good future prospects, high levels of creditworthiness and good credit ratings. Moreover, it is particularly those companies that have We are, like many of our competitors, pre- sounder balance sheets with lower debt ratios, more stable cash pared to close the gaps that currently exist flows and greater earnings power than in the past that are making in the German housing market. To quote a major contribution to these positive indicators. As far as financing just one figure: at the end of 2016 there is concerned, property companies have become more independent was a shortage of approximately one mil- and can choose between a variety of offers and concepts. lion affordable flats in Germany. For this reason, we hope that politicians can work Deutsche Wohnen is an important and respected player in this together with us and that they too recog- sector. Over the past few years, we have created for ourselves an nise their responsibility towards society. excellent foundation, on the basis of which we can present our- selves to cities as partners and make a considerable contribution to I wish you an enjoyable read. PROFILE urban development. On the pages that follow, you will be able to find examples of how we act as part of society in this way and of how we Yours care for and develop our portfolio whilst remaining mindful of our DEUTSCHE WOHNEN is one of the largest publicly listed residen- high quality standards. All of this is done in accordance with the title tial property companies in Germany and Europe. Our business of this year’s report: “Thinking ahead. For the city of tomorrow.” focus is on managing and developing our residential property portfolio, which is mainly located in German metropolitan regions. We want to help with the task of shaping our cities, but politicians Here we benefit from the dynamic development of the market and have to support us in this. Numerous barriers are being placed in the continuing high demand for housing. Currently, our portfolio the way of Deutsche Wohnen and other companies in our sector. Michael Zahn comprises more than 160,000 residential and commercial units For example, increasingly excessive regulations are stifling the CEO of Deutsche Wohnen AG with a total asset value of about EUR 15.7 billion. development of the market, and the state is imposing considerable political restrictions on our business operations. 1 EDITORIAL WITH BOTH A CLEAR STRATEGY AND OUR VALUES WE ARE SHAPING THE CITY OF TOMORROW DEAR SIR OR MADAM, Publicly listed property companies have established themselves as In all of this, politicians are obviously fail- a strong asset class, and it is impossible to imagine today’s stock ing to recognise that private industry has markets without them. The property sector has become particularly always made sustainable investments and attractive for foreign investors with its significant market capitalisa- that it will continue to do so in future. tion, good future prospects, high levels of creditworthiness and good credit ratings. Moreover, it is particularly those companies that have We are, like many of our competitors, pre- sounder balance sheets with lower debt ratios, more stable cash pared to close the gaps that currently exist flows and greater earnings power than in the past that are making in the German housing market. To quote a major contribution to these positive indicators. As far as financing just one figure: at the end of 2016 there is concerned, property companies have become more independent was a shortage of approximately one mil- and can choose between a variety of offers and concepts. lion affordable flats in Germany. For this reason, we hope that politicians can work Deutsche Wohnen is an important and respected player in this together with us and that they too recog- sector. Over the past few years, we have created for ourselves an nise their responsibility towards society. excellent foundation, on the basis of which we can present our- selves to cities as partners and make a considerable contribution to I wish you an enjoyable read. urban development. On the pages that follow, you will be able to find examples of how we act as part of society in this way and of how we Yours care for and develop our portfolio whilst remaining mindful of our high quality standards. All of this is done in accordance with the title of this year’s report: “Thinking ahead. For the city of tomorrow.” We want to help with the task of shaping our cities, but politicians have to support us in this. Numerous barriers are being placed in the way of Deutsche Wohnen and other companies in our sector. Michael Zahn For example, increasingly excessive regulations are stifling the CEO of Deutsche Wohnen AG development of the market, and the state is imposing considerable political restrictions on our business operations. WE ARE SECURING RIEMEISTERSTRASSE, BERLIN-ZEHLENDORF RIEMEISTERSTRASSE, / ASSET VALUES WITH A FUTURE ALLEE ARGENTINISCHE // DEUTSCHE WOHNEN HAS FOCUSED ON DYNA- MIC METROPOLITAN REGIONS IN GERMANY FOR A LONG TIME NOW. THIS VISION IS PAY- ING OFF, ABOVE ALL IN BERLIN. MOREOVER, WE ARE SECURING FOR THE FUTURE THE ASSET VALUES THAT WE HAVE CREATED IN THIS PROCESS. WITH OUR CLEAR STRATEGY FOR ORGANIC GROWTH AND OUR LONG-TERM INVESTMENT PROGRAMME IN THE BILLIONS, WE ARE STRENGTHENING OUR BUSINESS MODEL, WHICH FOCUSES ON ENHANCING QUALITY AND ADDING VALUE. DEVELOPING ASSET VALUES 3 Annual net increase of around pportunity thousand citizens in Berlin O 40 PORTFOLIO STRATEGY // Growing demand for housing and INCREASES HOUSING infrastructure services must be met. QUALITY AND ADDS VALUE // Increasing urbanisation provides good pre-conditions for further increases in portfolio value and for rising cash flows. TODAY, DEUTSCHE WOHNEN is one of the three largest and most successful property companies in Europe, setting benchmarks for the sector. And it is, in particu- lar, our ability to adapt to change at an early stage that contributes to this success story.