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1. Company Snapshot

1.a. Company Description

Vonovia SE operates as an integrated residential real estate company in Europe.It operates through five segments: Rental, Value-Add, Recurring Sales, Development, and Deutsche Wohnen.The company offers property management services; apartments and property-related services; and value-added services, including maintenance and modernization of properties, craftsmen and residential environment organization, residential environment organization, condominium administration, cable TV, metering, energy supply, and insurances services.


It also engages in the sale of individual condominiums and single-family houses; and project development activities.As of December 31, 2021, the company had 565,334 residential units; 168,015 garages and parking spaces; and 9,289 commercial units, as well as managed 71,173 residential units for other owners in Germany, Austria, and Sweden.The company was formerly known as Deutsche Annington Immobilien SE and changed its name to Vonovia SE in August 2015.


Vonovia SE was founded in 1998 and is headquartered in Bochum, Germany.

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1.b. Last Insights on VNA

Vonovia SE faced challenges due to unfavorable market conditions and rising interest rates. The company's recent earnings release showed pressure on its financials. A recent rating downgrade by S&P Global Ratings to BBB+ from AA- cited concerns over Vonovia's leverage and asset quality. Additionally, the company faced increased costs associated with its debt, reflected in the 3.87% yield on its recent Australian dollar bond issuance. This move, though strategic for diversification, may strain finances.

1.c. Company Highlights

2. Vonovia's H1 2025 Earnings: Strong Performance and Increased Guidance

Vonovia reported a robust first half of 2025, with adjusted EBITDA growing by 12% year-on-year to reach a significant milestone, while adjusted EBT increased by 11%. The company's EPS came in at €0.4042, below estimates of €0.4599. The Rental segment's top line increased by 2.6% despite having 10,000 fewer units due to sales, showcasing the resilience of the business. As Philip Grosse noted, "including CapEx, the growth is around 70 basis points, leading to a €520 million valuation result," highlighting the positive impact of capital expenditures on the company's valuation.

Publication Date: Aug -06

📋 Highlights
  • Strong Rental Growth: Rental segment achieved 4.4% organic rent growth year-on-year, with a 2.6% increase in top line despite 10,000 fewer units due to sales.
  • Profitability Acceleration: Non-rental segments saw double-digit growth in EBITDA, EBITA, and operating free cash flow, driven by strong performance.
  • Robust Financial Position: Vonovia issued EUR 1.3 billion in convertibles and completed a EUR 800 million bond buyback, maintaining a net debt-to-EBITDA ratio of 1.37x.
  • Increased Guidance: 2025 guidance was raised, with organic rent growth expected above 4%, rental income and adjusted EBITDA near the upper range, and adjusted EBT between EUR 1.85-1.95 billion.
  • Deutsche Wohnen Integration: Integration completed with a domination agreement, resulting in a small EBT per share dilution and a vehicle holding 20% of Deutsche Wohnen shares with Apollo.

Segmental Performance

The Rental segment is on track, with 4.4% organic rent growth year-on-year, driven by Vonovia's investment program and a favorable supply-demand imbalance in the market. The Value-Add segment saw double-digit growth in internal and external revenue, resulting in a 77% year-on-year increase in contribution. The Development segment's operating profit was driven by a one-off land sale, and the company is expected to continue disposing of land to reduce their land bank.

Financial Position and Guidance

Vonovia actively managed its financing position, issuing €1.3 billion of convertibles at attractive cash coupons and completing a bond buyback of €800 million. The company's LTV was at 45.9% on a pro forma basis, with a net debt-to-EBITDA ratio of 1.37x. Vonovia has increased its guidance for 2025, with organic rent growth expected to be greater than 4% and adjusted EBT expected to be between €1.85 billion and €1.95 billion. Analysts estimate next year's revenue growth at 4.0%.

Valuation and Metrics

Vonovia's current valuation metrics show a 'P/E Ratio' of -32.63, 'P/B Ratio' of 0.94, 'EV/EBITDA' of 10.08, and a 'Dividend Yield (%)' of 4.31%. The 'Free Cash Flow Yield (%)' is 9.66%, indicating a decent return for investors. With the company's increased guidance and strong H1 performance, the valuation metrics may be reassessed to reflect the improved outlook.

3. NewsRoom

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Should You Think About Buying Vonovia SE (ETR:VNA) Now?

Dec -04

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Shareholders Shouldn’t Be Too Comfortable With Vonovia's (ETR:VNA) Strong Earnings

Nov -13

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Vonovia SE (VNNVF) Q3 2025 Earnings Call Highlights: Strong EBITDA Growth Amid Market Challenges

Nov -05

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Vonovia's First Australian Dollar Bond Could Be a Game Changer for Vonovia (XTRA:VNA)

Sep -07

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With A 1.1% Return On Equity, Is Vonovia SE (ETR:VNA) A Quality Stock?

Aug -07

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Is Vonovia SE (ETR:VNA) Expensive For A Reason? A Look At Its Intrinsic Value

Jul -15

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Should You Investigate Vonovia SE (ETR:VNA) At €30.16?

Jun -25

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CFOs On the Move: Week ending June 20

Jun -20

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Management

Expected Growth: 4.5%

The growth is slightly lower than the global hypothesis due to the mature nature of the management segment, which may not grow as rapidly as other segments. However, it is still expected to grow as the company continues to expand its portfolio and improve operational efficiency. The growth rate is also influenced by the potential for increasing management fees.

Other

Expected Growth: 4.0%

The growth is lower than the global hypothesis, reflecting the diverse and potentially less predictable nature of the businesses within this segment. The growth rate is influenced by the performance of the various activities and the company's ability to identify and capitalize on new opportunities.

Unallocated Income from Investments in Other Real Estate Companies

Expected Growth: 3.5%

The growth rate is lower than the global hypothesis, reflecting the potential volatility and unpredictability of income from investments. The growth is influenced by the performance of the investee companies and the overall market conditions. The segment's growth is also dependent on the company's investment strategy and decisions.

Inter-Segment Revenues

Expected Growth: 5.0%

The growth rate is in line with the global hypothesis, as inter-segment revenues are likely to grow in proportion to the overall business activity. The growth reflects the increasing scale of operations and the potential for more significant inter-segment transactions as the company expands.

Value-Add

Expected Growth: 6.0%

The growth rate is higher than the global hypothesis, driven by the potential for increasing demand for value-added services and the company's efforts to differentiate its offerings. The segment is expected to benefit from the trend towards more premium services and the company's focus on enhancing the customer experience.

Development

Expected Growth: 6.5%

The growth rate is significantly higher than the global hypothesis, driven by the company's strategic focus on development and the potential for high returns on investment. The segment is expected to benefit from the demand for new housing and the company's ability to execute development projects efficiently.

Sales

Expected Growth: 4.5%

The growth is slightly lower than the global hypothesis, reflecting the potential volatility of the sales segment, which is heavily influenced by market conditions. The growth rate is also influenced by the company's sales strategy and its ability to identify attractive opportunities.

7. Detailed Products

Rental Apartments

Vonovia SE offers a wide range of rental apartments in Germany, Austria, and Sweden, catering to diverse needs and preferences.

Property Management

Vonovia SE provides comprehensive property management services, including maintenance, repairs, and administrative support.

Real Estate Development

Vonovia SE develops and constructs new residential buildings, revitalizing urban areas and creating modern living spaces.

Energy Efficiency Solutions

Vonovia SE offers energy-efficient solutions, including insulation, windows, and heating systems, to reduce energy consumption and carbon footprint.

Digital Services

Vonovia SE provides digital services, including online portals and apps, to facilitate communication and services for tenants and property owners.

8. Vonovia SE's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Vonovia SE is medium, as there are alternative options for housing and real estate services, but they are not highly attractive or widely available.

Bargaining Power Of Customers

The bargaining power of customers for Vonovia SE is low, as individual customers have limited negotiating power and the company has a large portfolio of properties.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Vonovia SE is medium, as the company relies on various suppliers for materials and services, but has some negotiating power due to its large scale.

Threat Of New Entrants

The threat of new entrants for Vonovia SE is low, as entering the German real estate market requires significant capital and regulatory compliance.

Intensity Of Rivalry

The intensity of rivalry for Vonovia SE is high, as the German real estate market is highly competitive, with many established players and limited market share gains.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.57%
Debt Cost 3.95%
Equity Weight 37.43%
Equity Cost 8.39%
WACC 5.61%
Leverage 167.20%

11. Quality Control: Vonovia SE passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Olav Thon Eiendomsselskap

A-Score: 6.3/10

Value: 5.4

Growth: 4.4

Quality: 6.1

Yield: 5.0

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Scout24

A-Score: 6.2/10

Value: 2.7

Growth: 6.8

Quality: 8.7

Yield: 2.5

Momentum: 8.5

Volatility: 8.3

1-Year Total Return ->

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Intershop Holding

A-Score: 5.8/10

Value: 3.4

Growth: 0.9

Quality: 7.9

Yield: 7.5

Momentum: 8.5

Volatility: 6.7

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CA Immobilien

A-Score: 4.8/10

Value: 3.0

Growth: 2.3

Quality: 4.7

Yield: 8.8

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Vonovia

A-Score: 4.5/10

Value: 3.7

Growth: 3.9

Quality: 3.6

Yield: 6.9

Momentum: 2.5

Volatility: 6.7

1-Year Total Return ->

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Cellnex Telecom

A-Score: 4.4/10

Value: 4.7

Growth: 7.4

Quality: 4.7

Yield: 0.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

25.45$

Current Price

25.45$

Potential

-0.00%

Expected Cash-Flows