Vonovia: Anual General Meeting /2023

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Summary

On May 17, 2023 Vonovia held its annual general meeting. Here is a summary of what happened during the meeting;

• Shareholders approved the €0.85 per share dividend; hence following the proposal of the Supervisory Board and Management Board to combine dividend continuity and capital discipline.
• The supervisory board was reduced to 10 members from 12 members as planned.
• Jürgen Fitschen, a long-standing chairman of the supervisory board left office and was replaced by former McKinsey consultant Clara C. Streit.
• Vonovia received criticism from major shareholders led by Union Investment. Union's Arne Rautenberg warned that Vonovia could find itself having a lot of debt due to high interest rates and real estate depreciation. "In its current state, Vonovia doesn't look like Europe's largest housing group, but like a skyscraper on shaky foundations," he complained. "The debt is above the target corridor of 40 to 45 percent you have set and has even increased since the end of 2022," he said. "At a certain level, you risk being downgraded by the rating agencies, and that could start a downward spiral." Rautenberg added.
• Rautenberg also criticised the company's communication style which has made the capital market to lose trust in it.
• In response, CFO Philip Grosse defended the company's capital position. "We (have) shown that we have enough leeway to avoid an emergency capital increase," he said.
• On Vonovia's LTV of 45.4%, Grosse said, "This is basically not a problem." He added that it could happen that Vonovia "is temporarily outside of this range."
• Grosse noted that they have a large safety net when it comes to debt ratio stipulated in the bond terms. "Of course we keep an eye on that and have a very large safety buffer," he said.
• Vonovia boss Rolf Buch said that its subsidiary Deutsche Wohnen has put its care home business up for grabs while Vonovia could part with real estate packages in Sweden.