so get it out of the basket...

Today I would like to give you my impressions of the conference call to present Vonovia's ($VNA) annual results for 2024.

Rolf Buch, CEO, began by emphasizing that the current situation is characterized by uncertainty, particularly due to the German government's announcement of massive investments in the military and infrastructure. He outlined Vonovia's development in three phases: a growth phase after the IPO, supported by low interest rates, followed by a defensive phase after the war in Ukraine and the rise in interest rates, in which the rating and balance sheet were protected. The company is now at the beginning of a third phase, a less capital-intensive return to growth, particularly in the high-margin non-rental business.

On a positive note, Buch emphasized that the planned investment programme also offers opportunities for modernization and new construction in the areas of climate protection, energy and housing. The aim is to react prudently, learn from the experience of recent crises and maintain the strategic priorities of rating protection, debt management and long-term growth. There may be delays in individual growth projects, which are more capital-intensive, but the company is prepared to act decisively if necessary. Overall, however, the business model is robust, the market fundamentals are strong and the operating business is more solid than ever. It is encouraging that the data on property valuations shows stabilization and even slight price growth for condominiums.

Transaction volumes also picked up in the fourth quarter and a survey by Ernst & Young shows that investors continue to focus on residential real estate. Despite rent regulation, demand for residential space is enormous, which ensures solid rental growth in the long term. With the current investments of around one billion euros, rental growth is expected to be around 4%, which could even rise to 6-7% by 2028 if increased to two billion euros. The rental business will remain the core business, accounting for over 90% of EBITDA in 2024. The non-rental business is expected to grow significantly by 30% by 2028, while overall EBITDA growth of around 8% and EBT growth in the mid-single-digit range are targeted.

Philip Grosse then presented the details of the 2024 annual results. Organic rental growth of 4.1% and EBT at the upper end of the forecast were achieved for 2024. Operating free cash flow had increased significantly as cash generation was a priority. The dividend is set to increase by 36% to EUR 1.22 per share. After disposals of almost 8 billion euros in the last two years, the focus is now on the sale of the remaining non-core business of 1.6 billion euros. The Value-Add segment has increased significantly, but includes a one-off effect. The increased financing costs had a negative impact on the financial result. The value of the portfolio is 23.2 times the net cold rent or a gross yield of 4.3%, which appears reasonable compared to new-build prices for owner-occupied apartments.

The forecasts for 2025 and the medium-term targets up to 2028 were confirmed, with the expected rental growth of over 4% reflecting the planned increase in investment.

In the subsequent Q&A, the analysts asked various questions.

Valerie Jacob from Bernstein asked about the lower dividend compared to the previous formula and how the dividend policy should be assessed in the future. Philip Grosse explained that the prioritization of cash generation in recent years and the increasing investments had limited a higher payout, but that shareholders would benefit from the profitable investments in the long term. Rolf Buch added that the development of interest rates, the specific structure of government programs (in particular the funds for the environment and housing) and the development of real estate values were being closely monitored and that investment decisions would be adapted to the changed framework conditions.

Charles Boissier from UBS asked about the flexibility of the strategic plan in the face of rising capital costs and under what circumstances there would be a renewed focus on cash preservation. Rolf Buch replied that less capital-intensive growth initiatives could be prioritized and capital-intensive projects such as new construction could be scaled back if interest rates rise. With regard to the expected deterioration in the interest coverage ratio (ICR), Philip Grosse stated that there was no pressure in the short to medium term due to the staggered debt maturities and the current margin to the internal target value of 3.5x.

Jonathan Kownator from Goldman Sachs addressed the uncertainties regarding government investments and their potential impact on Vonovia as well as the discrepancy between the potential for rental growth through investments and the communicated forecast. Rolf Buch explained that initial information on subsidies for residential construction was available, but that the exact structure was still unclear. The rental growth forecast may be conservative, as investments are being made gradually and the full potential will only become apparent in the future.

Thomas Neuhold from Kepler Cheuvreux asked about the increased taxes and the long-term tax rate as well as the plans and measures to reduce construction costs in the sales business. Philip Grosse explained that the taxes reported in the operating cash flow related to the core business and that the increase was due to higher sales volumes. In the long term, a tax rate of less than 10% of EBITDA is expected. With regard to the reduction in construction costs, it is still too early to make concrete statements, but various initiatives are being worked on and political support is hoped for.

Veronique Meertens from Van Lanschot Kempen enquired about the current status of the discussions surrounding the rent freeze and about concrete steps to expand new business areas. Rolf Buch was optimistic that the rent freeze in its current form would be reconsidered and adapted. In terms of new business areas, he sees great potential in working with long-term investors, particularly in the infrastructure sector, as their investment horizon and Vonovia's cash flow profile are a good match.

Manuel Martin from ODDO BHF wanted to assess the regional strategy in the three countries (Germany, Sweden, Austria) and the portfolio's sensitivity to migration. Rolf Buch highlighted the relative strength of Sweden, but emphasized the similar stability and excess demand in all three markets. With regard to migration, he does not expect any negative effects on demand, as illegal immigrants are initially housed in camps and legal immigration is more likely to increase due to labor shortages.

Conclusion:

The Vonovia analysts' conference conveyed a picture of a company that is well positioned despite a challenging economic and political environment. The stabilization of real estate values and the confirmed growth targets give confidence. The uncertainties caused by the government's investment plans are taken seriously, but are also seen as an opportunity. The management emphasized the flexibility to react to changing conditions and to consistently pursue the strategic priorities. The significant dividend increase is a positive signal for shareholders, even if the retained liquidity is to be used for future growth and stability. Overall, Vonovia appears to be well equipped to master the current challenges and grow in the long term.

$VNA recently presented exciting business figures for 2024.

-Significant increase in the dividend to € 1.22

-Positive start to 2025 heralds growth phase. Adj. EBITDA expected at € 2.70 to 2.80 billion

-Outlook until 2028: EBITDA growth of around 30% targeted

The price range of EUR 25 to EUR 23.50 could be very interesting for anti-cyclical investors.

Vonovia has entered difficult waters due to the rapid turnaround in interest rates triggered by the coronavirus pandemic in 2020, which led to very high inflation. The ECB's interest rate cuts have already begun and are likely to continue, albeit slowly.

Click here for the brief analysis:

https://investment-traders.com/kurzanalysen/vonovia-aktie-deutschlands-grosstes-immobilienunternehmen-jetzt-vor-dem-turnaround

Could Vonovia $VNA now a good buy for Buy&Hold?

Dividend yield at the current price is over 4.5% with room for improvement.

Housing remains scarce due to expensive new construction and immigration. A good situation for portfolio holders like Vonovia.

In fact, 3000 residential units are to be built again, whereas new construction had previously been halted.

Interest rate situation difficult to assess.

Populism against Vonovia and co. is often used for election campaign purposes, but it makes no sense to take active action, as the state itself cannot provide housing more effectively.

If so, the state (e.g. the federal state of Berlin) buys hundreds of residential units from Vonovia in packages using taxpayers' money, without actually creating new living space. Also rather advantageous for the company.

What is your opinion on this?

At 53 billion euros, the 40 DAX companies are likely to pay out almost one billion euros more this year than a year ago - more than ever before.

The reason for the strong development is high consolidated profits and unexpectedly rising dividends at a good dozen companies, including $ALV Allianz, $MUV2 Munich Re and $RHM Rheinmetall.

At 109 billion euros net profit, the DAX companies are likely to have earned as much in 2024 as in the previous year, according to Handelsblatt calculations. Slump in earnings for the three car manufacturers $BMW BMW, $MBG Mercedes and $VOW VW will be offset by companies in other sectors, in particular the major insurers Allianz, Munich Re and $HNR1 Hannover Re, but also $DTE Deutsche Telekom, $HEN Henkel and $EOAN Eon.

More than a dozen DAX companies have announced higher dividends than the market had previously expected. For example $ALV 15.40 euros per share after 13.80 euros in the previous year. Analysts had forecast just under 15 euros. The insurer is thus distributing just under six billion euros. This is a record in the German corporate landscape.

The biggest jump is at $MUV2 Munich Re: The reinsurer is increasing its dividend by five euros per share to 20 euros.

The two healthcare specialists $FRE Fresenius and $FME Fresenius Medical Care, the brand manufacturer $HEN Henkel, the automotive supplier $BTR Continental, the $CBK Commerzbank, $RHM Rheinmetall and $HNR1 Hannover Re have raised their dividends, in some cases significantly more than expected. This is also due to rising profits, which justify a higher profit share for shareholders.

The largest dividend payers in the DAX are

• $ALV
• 
  $DTE
• 
  $MBG
• 
  $SIE
• 
  $VOW

Like the car manufacturers, a number of companies in the DAX remain below the usual international payout ratios, including the family-run groups $BEI Beiersdorf and $MRK Merck. They pass on less than 30 percent of their profits. This leaves enough of a buffer so that dividends do not have to be reduced immediately in more difficult times.

Germany's most valuable group, $SAP SAP, with a payout ratio of 85%, is pushing the limit: net profit of 3.1 billion euros in the past year compares with a total dividend payout of 2.7 billion euros. However, the profit was burdened by a one-off effect.

So far, a total of 20 companies have increased their dividends, with only $BAS BASF and the three car manufacturers. Four companies have yet to do so: $RWE RWE, $SY1 Symrise and $VNA Vonovia are likely to increase their dividends, while analysts expect $PAH3 analysts expect a reduction at Porsche Holding.

Source (excerpt) & chart: Handelsblatt, 15.03.25

$VNA Does anyone know this? I couldn't find anything on the net, which is why I think there is no reason to do so? Time to buy more?

The profit forecasts for the current financial year have risen for 21 of the 40 DAX companies.

According to research by Handelsblatt, analysts have raised their profit estimates for these 7 of the 40 DAX companies by at least five percent in the last three months.

Handelsblatt sheds light on the prospects of these seven companies and their shares with a view to their prospects: the development of earnings this year, the resulting changes in valuation - and how analysts are positioning themselves.

Below is a brief overview, details with further information can be found at "Handelsblatt"

$ENR The earnings forecasts for Siemens Energy shares are rising most rapidly

$DBK Deutsche Bank share: Rising profits cause valuation to fall sharply

For $QGEN Qiagen: Difficult times after the pandemic are over

$VNA Vonovia makes billions in profit after billions in losses

$ZAL Zalando: Takeover gives new share price potential

$MTX MTU: Global market leader generates stable earnings

$DTE Deutsche-Telekom: Unusually strong vote from analysts

Source / Graphics: Handelsblatt, 18.02.25

$NKE I'll wait until 52 - maybe I'll miss it, but it's okay

$ENPH from now until 47 on a bullish impulse

$VNA - already have a position but add here at Retraces.

$BABA - I already have a position, but I'll add at Retraces.

$PYPL - DCA from now on , 72, 63, 54

28.11.2024

Uniper raises profit outlook for 2024 - reserves released + Swinging stock market continues with price gains + Rents in Germany will rise in 2025

The nationalized energy group Uniper $UN01 is more optimistic about the end of the financial year due to the reversal of a provision. The company announced on Wednesday evening that adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will be between 2.5 and 2.8 billion euros in 2024. Uniper had previously expected between 1.9 and 2.4 billion euros. Adjusted net profit is expected to amount to 1.5 to 1.8 billion euros. Most recently, the company had assumed a maximum of 1.5 billion euros. Uniper has resolved long-standing legal disputes by way of a settlement, the company said. This will lead to a reversal of the provision formed for this purpose, which will be recognized in profit or loss for the 2024 financial year in the fourth quarter. Investors welcomed the news. The Uniper share recently rose by 3 percent compared to the Xetra closing price on the Tradegate trading platform.

The search for direction on the DAX $GDAXI could continue with price gains on Thursday. Two hours before the Xetra start, the broker IG valued the leading German index 0.4 percent higher at 19,336 points. It thus stands out slightly from the international stock markets. In the USA, the indices had shown weakness on the day before the Thanksgiving holiday and in Asia the picture was mixed with gains in Japan and losses in China. Reports that the USA, under the leadership of outgoing President Joe Biden, is considering new sanctions to restrict Beijing's access to important semiconductors weighed particularly heavily on Hong Kong. Japanese shares rose due to the weakness of the yen.

Rents at LEG real estate $LEG are rising. "We will increase rents slightly more in 2025," Lars von Lackum, CEO of Germany's second-largest real estate group LEG Immobilien, told Handelsblatt. "We assume that the increase in rents will be above 4 percent." In the current year, the Düsseldorf-based company, which has more than 166,000 apartments, expects its privately financed rents to grow by 3.8 to 4.0 percent. Its larger rival Vonovia $VNA has already announced that rents will rise in 2025. When presenting its nine-month figures, the DAX-listed group forecast rental growth of around 4 percent for 2025. The pressure on rents will therefore continue in the coming year. Lackum also justified the further increases with the effects of the rent index, which will only gradually allow rents to be adjusted to inflation. (Handelsblatt)

Thursday: Stock market dates, economic data, quarterly figures

Stock exchanges in the USA closed (Thanksgiving Day)

ex-dividend of individual stocks

Imperial Brands GBP 0.54

Quarterly figures / company dates Europe

07:00 Adler Group quarterly figures

07:30 Manz quarterly figures

08:00 Deutsche Beteiligungs AG Annual results

No time specified:

- Delivery Hero: Subsidiary Talabat: Last day to subscribe for shares for private and institutional investors

- Rational AG: Capital market day

- Remy Cointreau half-year figures

Economic data

• 02:00 KR: Bank of Korea, outcome of the Monetary Policy Council Base Rate meeting PROGNOSIS: 3.25% previously: 3.25%
• 09:00 ES: HICP and consumer prices (preliminary) November HICP PROGNOSE: +2.3% yoy previously: +1.8% yoy
• 10:00 EU: ECB, M3 money supply and lending October M3 money supply FORECAST: +3.4% yoy previously: +3.2% yoy
• 11:00 EU: Economic Sentiment Index November Economic Sentiment Eurozone PROGNOSE: 95.1 PREV: 95.6 Industrial confidence Eurozone PROGNOSE: -13.0 PREV: -13.0 Consumer confidence Eurozone PROGNOSE: -13.7 PREV: -13.7 PREV: -12.5
• 14:00 DE: Consumer Prices (preliminary) November FORECAST: -0.2% yoy/+2.3% yoy Previous: +0.4% yoy/+2.0% yoy HICP FORECAST: -0.5% yoy/+2.6% yoy Previous: +0.4% yoy/+2.4% yoy

⬆️⬆️⬆️

- GOLDMAN raises the price target for DELL from USD 155 to USD 165. Buy. $DELL

- GOLDMAN raises the price target for ANALOG DEVICES from USD 247 to USD 261. Buy. $ADI

- GOLDMAN raises the price target for HP INC from USD 35 to USD 38. Neutral. $HPQ

- WARBURG RESEARCH raises the price target for VONOVIA from EUR 40.20 to EUR 42.30. Buy. $VNA

- WARBURG RESEARCH upgrades STRATEC from Hold to Buy. Target price 40 EUR. $SBS4

- DEUTSCHE BANK RESEARCH raises the price target for DEUTSCHE BÖRSE from EUR 235 to EUR 237. Buy. $DB1

- MORGAN STANLEY raises the target price for DEUTSCHE TELEKOM from EUR 33 to EUR 38. Overweight. $DTE

- GOLDMAN raises the price target for TRATON from EUR 31.80 to EUR 35.50. Neutral. $8TRA

- GOLDMAN raises the price target for BRENNTAG from EUR 94 to EUR 95. Buy. $BNR

- BERENBERG upgrades EQUINOR from Hold to Buy and raises target price from NOK 290 to NOK 325. $EQNR

- JPMORGAN raises the target price for BEIERSDORF from EUR 150 to EUR 160. Overweight. $BEI

- JPMORGAN upgrades HENKEL from Neutral to Overweight and raises target price from EUR 82 to EUR 100. $HEN

- JPMORGAN upgrades BRITISH AMERICAN TOBACCO to Neutral. $BATS

- JPMORGAN raises the price target for EON from EUR 15.50 to EUR 16. Overweight. $EOAN

- JPMORGAN raises the target price for AUTO1 from EUR 12.10 to EUR 17.10. Overweight. $AG1

⬇️⬇️⬇️

- STIFEL lowers the price target for SIEMENS from EUR 207 to EUR 202. Buy. $SIE

- JPMORGAN lowers the price target for HP INC from USD 41 to USD 40. Overweight. $HPQ

- WARBURG RESEARCH lowers the price target for LANXESS from EUR 40 to EUR 37. Buy. $LXS

- CITIGROUP lowers the price target for BASF from EUR 49 to EUR 46. Neutral. $BAS

- RBC lowers the target price for COMMERZBANK from EUR 18 to EUR 17.25. Sector Perform. $CBK

- RBC lowers the target price for ING from EUR 17.50 to EUR 16.75. Sector-Perform. $ING

- RBC lowers the price target for BNP PARIBAS from EUR 79 to EUR 78. Outperform. $BNP

- JPMORGAN lowers the price target for ELRINGKLINGER from EUR 6.70 to EUR 6. Neutral. $ELLRY

- JPMORGAN lowers the price target for SYMRISE from EUR 130 to EUR 120. Overweight. $SY1