Vonovia Se Unsp/Adr

Ladies and gentlemen, thank you for standing by. Welcome to the Vonovia Q3 2024 results analyst and investor call. I'm Moritz, your call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rene. Please go ahead.

Thank you, Moritz, and welcome, everybody, to our call. Our speakers today are, once again, CEO Rolf Buch and CFO Philipp Grosse. They will be happy to lead through today's presentation and then answer your questions. Today's call will be a bit broader than previous earnings calls. like we always do in third quarter, we will give an update on the first nine months and an initial guidance for the next year. But in this presentation, we will also address the question as to how we expect to grow organically in the non-rental segments in the future. That's why today's presentation has two parts. We begin with an update on the first nine months of this year, ending with the final guidance for 2024. The second part then covers our different organic growth initiatives, including our initial guidance for 2025, and more importantly, the midterm outlook for objectives for 2028. Like in our last call, let's please limit questions to two per person. And with that, I hand it over to Ralf.

So, good afternoon from my side as well. I'm excited about today's earning call. Of course, every earning call is a welcome opportunity to update the market on where we stand. Still, today's call is special to me because after more than two years of playing defense, we are working hard to stabilize the balance sheet and of making sure that we get through the challenging times, we are now turning the corner. We have successfully weathered the storm and managed the headwinds that the rapid change in interest rate has brought to our business, including the most severe value decline on record. To avoid any misunderstanding, The environment now is not what it has been before the crisis. My interest rates are likely here to stay, and at the time of effectively free money, I am not expected to come back anytime soon, or if ever. Equally, presenting a robust capital structure will remain our priority. However, the uphill battle against continuous value decline is over. Interest rates are no longer rising. and the market for assets is gradually returning to a normal environment. This gives us the opportunity to leave the period of proactive balance sheet stabilization behind and focus on earning growth again. Let's not forget, while we were busy keeping our leverage under control, the fundamental megatrends that drive our business have become even more favorable than they were three years ago. Demand for our product has been increasing, and zip line has been declining for obvious reason, leading to the widest imbalance that we can remember. The need of decarbonization, the housing stock, is greater than ever before. Just the other day, we learned that only 0.7% of the German housing stock was modernized during the past nine months of this year. This compares to 2% or more than experts say is required. There is a huge demand for expertise in this area, and we are extremely well positioned to benefit thanks to our people, know-how, experience, and our track record. But before I go too deeply into the second chapter of today's presentation, let me give you the highlight of our recent performance. First, we have achieved our 3 billion disposal target that we promised to you for 2024. This allows us now to turn our attention to profitability growth for our sales divisions, including the focus on cash generation. Second, leverage is now well under control. Let me say loud and clear that we remain committed to our debt KPIs target ranges but we have no doubt that the direction of travel is positive. As a consequence, our proactive balance sheet stabilization is no longer required. Third, our operating performance is firmly on track for our rental segment, and we are seeing the first signs of improvement in our non-rental segments as well. In the end, I keep coming back to the relevant megatrends. It is three structural growth drivers that provide long-term running recurring and growing income and help us drive continuous improvement in our operating performance. Fourth, it is not appropriate to focus on the next phase of our, now appropriate to focus on our next phase of our growth strategy. There is a strong addressable market opportunity. Our platform is uniquely positioned, and we have identified multiple initiatives to drive our non-rental activities. Rental growth is expected to be around 4% as previously guided, and we forecast adjusted EBITDA totals slightly growing and adjusted EBITDA essentially flat for 2025, which again is a transition year insofar as we absorb the impact of our larger disposal volumes, and Philip will come back to this. And finally, in line with our view of stability, returning to our markets and our strong position to take advantages of the opportunities within them. For the first time, we are providing you a mid-term objective for 28. Our ambition is to deliver an EBITDA total between 3.2 and 3.5 billion. Of that amount, we think we can generate between 0.5 and 0.7 billion in our non-rental segments, so between 20 and 25% of total EBITDA. And this is over to Philipp.