VONOVIA SE ANNUAL REPORT 2019 & not or Key Figures FINANCIAL KEY FIGURES in € million 2015 2016 2017 2018 2019 Rental income 1,414.6 1,538.1 1,667.9 1,894.2 2,074.9 Adjusted EBITDA Rental 924.4 1,046.2 1,148.7 1,315.1 1,437.4 Adjusted EBITDA Value-Add 37.6 57.0 102.1 121.2 146.3 Adjusted EBITDA Recurring Sales 62.2 79.1 91.9 Adjusted EBITDA Development 6.7 39.4 84.5 Adjusted EBITDA Total 1,028.7 1,186.5 1,319.7 1,554.8 1,760.1 EBITDA IFRS 838.4 1,083.7 1,271.8 1,534.4 1,579.6 Group FFO 975.0 1,132.0 1,218.6 thereof attributable to Vonovia shareholders 920.4 1,069.7 1,165.6 thereof attributable to Vonovia hybrid capital investors 40.0 40.0 40.0 thereof attributable to non-controlling interests 14.6 22.3 13.0 Group FFO per share in €* 2.01 2.18 2.25 Income from fair value adjustments of investment properties 1,323.5 3,236.1 3,434.1 3,517.9 4,131.5 EBT 1,734.5 3,859.8 4,007.4 3,874.3 3,138.9 Profit for the period 994.7 2,512.9 2,566.9 2,402.8 1,294.3 Cash flow from operating activities 689.8 828.9 946.0 1,132.5 1,555.9 Cash flow from investing activities -3,239.8 416.4 -1,350.1 -3,892.5 -2,505.7 Cash flow from financing activities 4,093.1 -2,812.4 -870.5 3,041.5 902.8 Maintenance and modernization 686.3 792.4 1,124.8 1,569.4 1,971.1 thereof for maintenance expenses and capitalized maintenance330.7 320.1 346.2 430.4 481.6 thereof for modernization 354.1 458.4 712.9 904.7 996.5 thereof new construction 1.5 13.9 65.7 234.3 493.0 Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, KEY BALANCE SHEET FIGURES in € million 2015 2016 2017 2018 2019 Fair value of the real estate portfolio 24,157.7 27,115.6 33,436.3 44,239.9 53,316.4 Adjusted NAV 11,273.5 14,328.2 18,671.1 23,262.6 28,161.9 Adjusted NAV per share in €* 24.19 30.75 38.49 44.90 51.93 LTV in % 46.9 41.6 39.8 42.8 43.1 NON-FINANCIAL KEY FIGURES 2015 2016 2017 2018 2019 Number of units managed 397,799 392,350 409,275 480,102 494,927 thereof own apartments 357,117 333,381 346,644 395,769 416,236 thereof apartments owned by others 40,682 58,969 62,631 84,333 78,691 Number of units bought 168,632 2,815 24,847 63,706 23,987 Number of units sold 15,174 26,631 11,780 15,102 4,784 thereof Recurring Sales 2,979 2,701 2,608 2,818 2,607 thereof Non-core Disposals 12,195 23,930 9,172 12,284 2,177 Number of newly-built apartments 28 40 250 1,108 2,092 thereof for Vonovia’s own portfolio 28 40 250 638 1,301 thereof for sale to third parties 470 791 Vacancy rate in % 2.7 2.4 2.5 2.4 2.6 Monthly in-place rent in €/m² 5.75 6.02 6.27 6.52 6.93 Organic rent increase in % 2.9 3.3 4.2 4.4 3.9 Number of employees (as of Dec. 31) 6,368 7,437 8,448 9,923 10,345 EPRA KEY FIGURES in € million 2015 2016 2017 2018 2019 EPRA NAV 13,988.2 17,047.1 21,284.6 26,105.0 29,654.6 EPRA NAV per share in €* 30.02 36.58 43.88 50.39 54.69 EPRA NNNAV 9,739.8 12,034.4 14,657.5 17,669.5 18,554.8 EPRA earnings 329.2 450.0 572.6 685.3 785.8 EPRA net initial yield in % 4.5 4.1 3.7 3.5 3.3 EPRA topped-up net initial yield in % 4.5 4.1 3.7 3.5 3.3 EPRA vacancy rate in % 2.5 2.2 2.3 2.3 2.4 EPRA cost ratio (incl. direct vacancy costs) in % 31.9 28.4 26.3 25.9 25.8 EPRA cost ratio (excl. direct vacancy costs) in % 30.2 27.0 24.8 24.6 24.5 * Based on the shares carrying dividend rights on the reporting date. Content & & not or 2 able to stay not forced to leave 4 engaging not bystanding not 6 local not remote 8 united not divided & means or 10 shaping things together 14 also thinking about tomorrow 16 looking at the bigger picture 18 getting others on board As part of society, we are The Company and Its Shares ready to face the challenges 22 Letter From the Management Board 26 Report of the Supervisory Board 32 Management Board of the residential property 34 Supervisory Board 36 Corporate Governance market. This involves 44 Overview 46 Vonovia SE on the Capital Market entering into dialogue with Combined Management Report our partners and taking 54 Fundamental Information About the Group 63 Non-financial Declaration 77 Portfolio Structure responsibility in our day-to- 86 Management System 90 Report on Economic Position day work. We provide our 115 Further Statutory Disclosures 125 Opportunities and Risks customers with modern 136 Forecast Report homes and make sure that Consolidated Financial Statements 140 Consolidated Income Statement 141 Consolidated Statement of Comprehensive Income they feel comfortable in our 142 Consolidated Balance Sheet 144 Consolidated Statement of Cash Flows neighborhoods. 146 Consolidated Statement of Changes in Equity 148 Notes Information 234 List of Vonovia Shareholdings 249 Further Information About the Bodies 252 Independent Auditor’s Report 259 Responsibility Statement 260 EPRA Reporting 267 Glossary 270 Financial Calendar, Contact, Imprint REFERENCES to page(s) in the Report p. 167 to website www.vonovia.de 1 Shares Its and Company The & not or We are renovating at least every third existing apartment that is newly let to make it senior-friendly. 2 Vonovia SE Annual Report 2019 able to stay not forced to leave customers Our are getting older. older. getting are — We make sure that they can can they that sure make We stay in our apartments for a a for apartments our in stay able toage. old in even time, long stay not forced to leave Customer needs change over time Particularly in old age, tenants want to be able to get around their homes safely and know that they can afford to pay their rent. & not or 3 Shares Its and Company The & not or Our customers are getting older. — We make sure that they can stay in our apartments for a long time, even in old age. to able stay not not stay forced We are renovating at least every every leave to third existing apartment that is newly let to make it senior-friendly. 2 Vonovia SE Annual Report 2019 able to stay not forced to leave Customer needs change over time Particularly in old age, tenants want to be able to get around their homes safely and know that they can afford to pay their rent. & not or 3 Shares Its and Company The & not or 12,000 apartments will be built by Vonovia in the short term in areas faced with serious housing shortages. p. 70 4 Vonovia SE Annual Report 2019 engaging not bystanding We are building new and and new building are We affordable homes. homes. affordable — activities construction Our attention particular pay to the needs of families and and families of needs the to older people. people. older engaging not bystanding Needs-based and with a sense of proportion In Frankfurt, too, finding an afford- able home can be a real challenge for families. This is why we are also building four-room apartments and voluntarily limiting the rent for many of the new apartments we are planning to € 10 per square meter. & not or 57 Shares Its and Company The & not or We are building new and affordable homes. — Our construction activities pay particular attention to the needs of families and older people. engaging engaging not not bystanding 12,000 apartments will be built by Vonovia in the short term in areas faced with serious housing shortages. p. 70 4 Vonovia Vonovia SE SEGeschäftsbericht Annual Report 2019 engaging not bystanding Needs-based and with a sense of proportion In Frankfurt, too, finding an afford- able home can be a real challenge for families. This is why we are also building four-room apartments and voluntarily limiting the rent for many of the new apartments we are planning to € 10 per square meter. & not or 95 Shares Its and Company The & not or 3 out of 4 of our employees are based on location, where they are respon- sible for making sure that our customers feel at home in their neighborhoods and apartments. 6 Vonovia SE Annual Report 2019 local not remote We offer our customers customers our offer We a whole range of ways to to ways of range whole a get in touch with us. us. with touch in get — always also are We location. on available local not remote A familiar face Ralf Feuersenger (right) has been responsible for the Eltingviertel district in Essen since 2015.