Vonovia (VNA) Q4 2024 earnings summary

Executive summary

• Entered a new phase focused on less capital-intensive growth, leveraging platform scale and service expansion, after a period of defensive balance sheet management due to interest rate shocks and market volatility.

• FY2024 saw stabilization in property values, with the portfolio value up 0.5% in H2 2024 and transaction volumes increasing, signaling growing market optimism.

• Successful completion of an €8bn disposal program prioritized cash generation and protected the balance sheet, with leverage and ratings stabilized.

• Operating business remains robust, supported by megatrends such as urbanization, supply/demand imbalance, and climate change, with a focus on long-term growth and capital discipline.

• Recent increases in German bond yields and government spending plans introduce new uncertainties, but management is committed to capital discipline and steady, deliberate decision-making.

Financial highlights

• Achieved 4.1% organic rent growth in 2024, at the upper end of guidance, with rental revenue up 2.2% to €3,323.5m despite a smaller portfolio.

• Adjusted EBITDA Total rose 1.6% to €2,625m; Adjusted EBT fell 3.6% to €1,800m compared to FY2023.

• Operating Free Cash Flow increased 32.6% to €1,900.6m, reflecting a focus on cash generation.

• LTV decreased by 150 bps to 45.8% pro forma, nearing the 45% target range.

• EPRA NTA declined 3.4% year-on-year to €45.23 per share; proposed dividend of €1.22 per share, a 36% increase year-on-year.

Outlook and guidance

• 2025 guidance and 2028 medium-term objectives confirmed: Adj. EBITDA Total expected at €2.7–2.8bn in 2025 and €3.2–3.5bn by 2028.

• Rental EBITDA CAGR of ~4% and non-rental EBITDA CAGR of ~30% through 2028; organic rent growth projected at >4% p.a.

• Investment program to ramp from under €1 billion to €2 billion by 2028, targeting rent growth above 4% and EBIT growth in the mid-single digits.

• Dividend policy remains progressive, at 50% of Adj. EBT plus surplus liquidity, with decisions on scrip options made annually based on market conditions.