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Organic growth accelerated slightly in Q3 23. Vonovia completed its disposals, which now amount to €3.7bn, at prices in line with the book values. The outlook for 2024 is for a slight decline in FFO.
Companies: Vonovia SE
AlphaValue
Management quote : “Too early for a reliable H2 outlook, but the appears to show the first signs of stabilization.”
Rental revenue provided no significant surprise, whereas values adjusted strongly in a single quarter (-4% since December 2022). A couple of disposals should alleviate the pressure on the balance sheet but some key sector issues remain to be addressed.
Vonovia has adopted the mid-way of halving its cash dividend, thus saving €700m of cash. Further measures are under way to preserve the balance sheet. The share price is trading below its 2013 IPO level restated for inflation.
In FY 23, lfl top-line growth is expected to be above that of FY 22. FFO should be slightly down, nevertheless. By asking for joint efforts by communities, Vonovia admitted that the property sector can’t solve large issues alone.
By announcing that it could make disposals to deleverage its balance sheet by €13bn vs. the c.€100bn GAV, Vonovia has effectively flagged a further reduction in debt.
In FY 22, Vonovia will sell c.€0.9bn of newbuilt apartments rather than renting them. This will help to lighten its balance sheet but it questions Vonovia’s own expectations, in our view.
Guidance was broadly unchanged. Capital increase is scheduled for the end of November 2021. Vonovia will raise c.€8bn. Details of it are unavailable yet.
Having secured 40% of the target’s shares, Vonovia wasn’t comfortable with the 50% threshold. The latter was removed last night. The company will extend the acceptance period.
Top-line guidance was stable. EBITDA guidance was raised thanks to increasing disposals awaited in FY 21 (2,800 units vs. an initial guidance of 2,500). Whereas rents were up 3% lfl, values were up c.14% at an annual pace (H1 21).
An unexpected friendly takeover bid will lead to the creation of the indisputable residential landlord in Europe. Vonovia will pay twice the price offered in 2015-16. The tender offer should close in August 2021.
Q1 21 was strictly in line with the H2 20 set of figures with lfl growth standing at 3.0%. It was 4.0% in H1 19. We stick to our negative stance. Vonovia pointed to the “very challenging picture” in Berlin. A new “Mietspiegel” will emerge soon there: indexation will therefore be low in FY 21.
Vonovia reached the lower side of its lfl growth guidance in FY 20. It was nevertheless bullish when considering the FY 21 outlook. Q4 20 was hurt by a “one-off” in the city of Berlin but rents did not slow outside Berlin.
Vonovia released a decent set of Q3 20 figures with a further good performance expected for H2 20 as far as book values are concerned. The make-up of its guidance has changed a bit due to the lower contribution from lfl growth. Nothing really material to date and the big picture doesn’t change. Both the figures and the company’s safe haven status look secure until February 2021. The consequences of the second lockdown on German housing and consumer confidence will however need to be revisited du
Companies: VNA VNNVF ANN VNA 0QFT 1VNA VNA
The €1bn capital increase will replace the €1bn hybrid capital. We believe that, like other companies, Vonovia is seizing the opportunity of its record high share price. This move underlines just how expensive the shares can be considered to be. By Vonovia too?
Research Tree provides access to ongoing research coverage, media content and regulatory news on Vonovia SE. We currently have 1 research reports from 3 professional analysts.
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