Vonovia (VNA) Q2 2024 earnings summary

Executive summary

• Balance sheet stabilization phase is largely complete, with €1.5 billion in disposals signed and a €3 billion target for 2024 on track, supporting a shift toward organic growth and profitability.

• Portfolio valuation decline slowed to 1.4% in H1 2024, suggesting values are near or at the trough, with market sentiment improving and transaction volumes rising.

• Rent growth momentum remains strong, with long-term annual growth expected at around 4% and high occupancy rates.

• Guidance for 2024 raised to the upper end for rent growth, adjusted EBITDA, and adjusted EBT, reflecting improved fundamentals.

• Major property sales, including a €700m Berlin portfolio, and successful divestment of Care business portfolios were completed.

Financial highlights

• Adjusted EBITDA Total for H1 2024 was €1,266.5m, down 2.6% year-over-year; Adjusted EBT was €804.3m–€887.2m, down 6.2–8.9%.

• Operating free cash flow rose 2.4–4.7% year-over-year, driven by positive net working capital and recurring sales.

• EPRA NTA per share declined 5% to €44.48; fair value of the real estate portfolio declined 1.4–1.7% to €82.5bn.

• Rental revenue increased 2% to €1,650.4m, with organic rent growth of 3.8%.

• Dividend of €0.90 per share paid, with 30.93% of shareholders opting for scrip dividend.

Outlook and guidance

• 2024 guidance updated to upper end of ranges for organic rent growth (3.8–4.1%), adjusted EBITDA (€2.55–2.65bn), and adjusted EBT (€1.70–1.80bn).

• Rental income forecast at ~€3.3bn; EPRA NTA per share expected to increase slightly barring further market changes.

• At least €3bn capital release through disposals expected in 2024; dividend capacity of ~€1bn maintained.

• Value-add and Development segments expected to see pronounced EBITDA growth; Rental segment EBITDA to remain stable.

• Further details on strategy and growth sources to be provided with nine-month results in November.