Ladies and gentlemen, welcome to the Vonovia SE interim results for the nine months 2025 analyst and investor call. I'm Moritz, the course 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. Welcome, everybody, to our nine months 2025 earnings call. Speakers today are once again CEO Rolf Buch and CFO Philip Grosse. They will be happy to lead through. Today's presentation and then answer your questions with that. Over to you, Rolf. Thank you, Rene. Welcome to everybody. Also from my side, today it's earning call number 50, so five zero for me, but also for the company. As you are well aware, it is my last one. I want to take this opportunity to remind everybody of what drives Vonovia and what makes this company different. That is why before Philip dives into the nine month results, I will share a few slides that are more fundamental and general, but very instrumental for understanding how Vonovia approaches the business. Let me start with a brief summary on page three to get us started. Nine months into the year, we are fully on track toward achieving the upper end of the guidance. Total EBITDA is up 6.4%. EBITDA is up even slightly higher with 6.8 and post minorities. EBITDA, the most important figure for you as I know, is up like EBITDA by 6.4%. As you will see on the guidance page, our growth momentum carries over into next year and will gain full momentum towards 2028. We are well on track for our ambitious EBITDA targets. Most importantly, organic rent growth will increase to around 5% by 2028. Personally, I think with higher investments and the strong underlying market rental growth, Vonovia may well see rent growth above 5% by then. The market in which we operate continues to normalize and move in the right direction. Organic value growth is happening and we will probably see a bit more in H2 than what we have seen in H1. The transaction market remains somewhat below the levels we have seen in the ultra low interest rate period. It is back to the normal level that we have seen before that period. On page four, let me summarize our fundamental beliefs, what our fundamental beliefs are and why I think Vonovia is different. First, a mantra that I keep repeating because it is so fundamental. Our business is built on and follows certain megatrends that provide stability and safeguard Vonovia's long-term earning and value growth. Imbalance of supply and demand in urban areas, the focus on CO2 reduction, and the positive impact of demographic change on our business will not go away for the next 20 to 30 years. Against this backdrop, there are three guiding principles that we believe in. First, it is a low risk business and a low margin business. Because the underlying business is regulated and very low risk, the incremental yields are comparatively low. The consequences for us is that cost leadership is crucial, and we achieve this by building scale and rigorously pursuing standardization and industrialization. Second, our business is a B2C business. The long-term nature of rental contracts and the relation with our customers makes us a subscription based business based on real estate. The consequences for us is that we pursue deep vertical and horizontal integration. Maximum control over our value chain through insourcing and rolling out ancillary services to increase our share of wallets of our tenants. Third, location and portfolio quality matters. Even so, it is a subscription based business. It is still real estate, and their location matters. There is not the one initial yield for Germany. Resi supply demand imbalance is very different in different locations and housing market and urban areas simply have different fundamental compared to the countryside. If you are in the right location, you can unlock additional earnings and value growth through investments in the long run. The consequence for us is that we have worked hard through acquisition and disposal to focus our portfolio in the right locations. Second, we have developed the know how and the capacity to run a large scale and industrialized investment program. I mentioned the low risk in the underlying business in the market in which we operate. The beautiful thing about that is obviously that our operating performance does not produce negative surprises. Rents keep going up, tenants pay their rent in full, and vacancy only exists in cases where we do modernization work in the apartment. What may be a surprise to some people, even though it is built into the system and actually should not be a surprise, is the acceleration of rent growth. We have spent a lot of time and effort in trying to explain the catch up effect in rent from higher inflation of the past years. It is becoming more and more evident now. As you see on the guidance page later, we are continuing to move upwards to around 5% organic rent growth and above, which will of course have very positive implications for both earning and value calls. Go to page 6. One of the consequences of running a B2C end consumer business is the need for scale. The size we have reached is impossible to replicate and really gives us an advantage on the cost side that cannot be copied by other players who are smaller and in most cases are a lot smaller. The chart on the bottom shows for Germany how the increase in the portfolio volume led to an expansion of the margins and reduction of the cost per unit. What is also noteworthy here is that our customer satisfaction increased sustainably from an indexed 100 at the IPO to 225 today. The cost per unit number is maybe a bit complex and more difficult to compare. Let me make my point about the scale and efficiency very simple and transparent. Let's have a look on page seven for cost yields and adjusted net yields. Gross yields are rental income divided by fair value. Gross yields differ from within the peer group, which is of course no surprise given the very different portfolio locations and quality. If you then look at the adjusted net yields, so EBITDA operations adjusted for maintenance because maintenance spending is clearly not a sign of efficiency but capitalization policy, we see that the cost leakage with German RESI is very different. Vonovia loses 0.4 percentage point between cost and net and if you look only at the German portfolio it is just 0.2 versus almost a full percentage point of the peer group. This is the result of our superior scale and efficiency that we have reached since the IPO when our spread was as high as 1.5 percentage points. Of course at this time we had this much smaller portfolio. In a business with low initial yield, this gap is huge. It means that we are uniquely positioned to succeed in low-yielding markets, which of course have higher growth potential. It means that we generate more than EUR 400 million additional EBITDA with our platform and our way to do business than we would have with the average peer group leakage. It means that we are extremely well positioned for a successful second Vonovia strategy. I've mentioned our platform a couple of times, so let me give you a better understanding of what I mean by that. This is page eight. We have developed a fully integrated one-stop shop that covers the entire value chain in our business, from the acquisition and development of new units to the asset and property management to the value-add facility management to the disposal expertise. We cover the full range of the asset life cycle and we do it on operating system that is SAP head to toe, with clearly defined interfaces between operating entities and central support functions and the seamless integration between local and central responsibilities. Today this platform services most of our own portfolio, owning and operating Europe's largest residential asset base, including one of the largest home builders. Safeguards, unparalleled experience, and a unique data pool that forms the strong backbone of the platform. Page 9. We are all aware of our activities to increase non-rental EBITDA. The general effort to do so is not new. We had been ramping up for non-rental EBITDA since the IPO to as much as 20% of total EBITDA by 2021. The sudden change in interest rate environment and our focus on liquidity generation over profitability resulted in lower non-rental EBITDA for good reasons. Going forward, however, there is absolutely no reason why we should not be able to grow outside the rental segment. Of course the absolute amounts are bigger than in 2021 thanks to the successful integration of Deutsche Wohnen. But the underlying strategy of doing more than just collecting rent has been in Vonovia's DNA since the IPO and there is no reason why this should not be a key element of Vonovia's strategy going forward because it makes all sense of the world. The objective for 2028 to reach a level of non-rental EBITDA that we have achieved before Deutsche Wohnen is really not a stretch. Let's go to page 10 to talk more about locations. Again, this seems to be misunderstood by the Marxists. Sometimes Germany is not the same all across the country. Fundamentals and yields are very different in different locations. The general distinction I would make is that there are urban markets which tend to come with lower initial yields and there are rural markets which tend to come with higher initial yield. In both cases this is obviously a function of the different long-term growth potential of these markets. This strong conviction about the different quality of local markets within Germany prompted a laser focus to make sure that we are in the right location. The large acquisitions to grow our portfolios are well known, but what is sometimes forgotten is that we sold more than 100,000 units in what we consider rural and therefore weaker markets between the IPO and today. We cut the number of locations in half and that led to not just better portfolio quality but also to higher efficiency and why it is so important to be in the right locations. Let's go to page 11. Most of you will have seen this analysis in previous earnings calls. The appeal of our business as we see it is that the annual rent growth may not always be as high as in other sectors, but it is as robust as it can get and allows us to predict our rental growth for many years to come. The gap between the market reality rent levels and our rent level ensures that many years of attractive risk-adjusted rent growth. Of course this does not apply to all markets, but only to the ones where you have a structural supply and demand imbalance. That is why vacancy is not a concern for us. Doing modernization and charging a higher rent for a better product is not a concern for us. Reletting an apartment in line with regulation at a higher rent is not a concern for us. Affordability, to make it short, is not our problem and not the problem for tenants. As I said earlier, not only the right location matters when it comes to asset management. Investments are key to unlocking further earnings and value growth. As a consequence, comprehensive investment programs have been a cornerstone of Vonovia's strategy since the IPO and the peer group comparison clearly shows that we have invested more. I know that return of these investments cannot be easily extrapolated from the financial results because there is no immediate link between the investment amount of one year and the return in the next year as many of these investments take more than one year to be completed. That is why we looked at all investments that we have made and fully completed between 2014 and 2024. The aggregate investment amount was EUR 7.4 billion and the average operating yield we have achieved was 7.1%. To us it makes all the sense in the world to continue this investment and to increase them to EUR 2 billion per year as planned by 2028. They make economic sense and they also make sense from sustainability point of view. It's a win win situation. We talked about locations, we talked about buying and selling to be in the right markets, and we talked about investments to deliver additional growth. Let me put this into context on page 13. Because of the dynamic in our local markets and because of the comprehensive investment we have been making, we have been able to deliver best-in-class rental growth. As I said earlier, I am personally convinced that this gap will widen in the future from superior market rent growth and superior investments-driven rent growth. This rent growth combined with investment in the portfolio focus has delivered a higher CAGR for value growth based on the development of fair value per square meter since the IPO. The market focus seems to be very much on earning these days, and that is fine. Let us not forget that you have two types of returns, earnings and value. I learned this by you 13 years ago when I joined the industry. This is a good segue into the large page of this chapter before I hand over to Philip. When you invest in Vonovia, you do not buy into an initial yield portfolio. That is why I refuse to accept the argument that we are a bond proxy and that it is all about the spread between bond yields and the net initial yield of our portfolio. Rather, one should look at the total shareholder return, the earnings and organic value growth and compare that to other equity investments on a risk-adjusted basis of course. While it is entirely up to the investors and the market in general what they make out of it, I consider 13% total return based on the current share price an attractive from a risk return point of view. That is why I look forward to remaining a Vonovia shareholder long beyond my tenure here at Vonovia. With this, over to Philip. Thank you, Rolf, and welcome. Also from my side, I will start with page 16. I think it actually speaks for itself, so no need to go into too much detail here, but let me allow to make one important point. Our rental segment is still impacted by the smaller portfolio. Year on year, we have 9,000 fewer units, and that of course weighs on the top line. Nonetheless, nominal growth in our rental segment alone, so excluding the non-rental EBITDA contributions, overcompensated the increase in the net financial result in the first nine months. That is exactly the logic we have been talking about and the consequence of our long-term and very balanced maturity profile. Yes, our interest expenses are going up as expected, but rents are going up more and combined with the non rental growth we will continue to be able to deliver attractive risk-adjusted earnings growth. Let's go through the four segments one by one and start with the rental segment on page 17. Rental revenue as you can see was almost up 3%, only held back by losing some of our top line as explained. Maintenance was a touch higher as expected. Operating expenses were very much in line with last year. All in all we basically managed to preserve the top line growth on the EBITDA level for a year-on-year increase of 2.5%. Organic rent growth remained very robust with 4.2% overall and 2.8% from market rent growth. Like in previous quarters, no need to deep dive on occupancy and collection rates as they both remain exceptionally high and are expected to remain at that superior level for the foreseeable future. On value add, that is page 18. As you can see, the internal revenues grow by more than 15% and that is largely a result of our increased investment and our higher insourcing ratio. The year on year comparison is skewed insofar as that the prior year includes EUR 58 million non-recurring Adjusted EBITDA from the coax network lease agreement we have made with Vodafone. Adjusting for this one-time benefit, last year value add EBITDA were actually up 11%. Equally as expected, in spite of this one-time effect, we expect the value-add EBITDA for the full year to be considerably higher than last year and that mainly driven by higher investments and value creation in our Craftsman organization as well as rising contributions from our energy business. Here we are well on track towards further expanding the EBITDA contribution from our value-add segment as we have been guiding for recurring sales. On page 19, we sold 1,553 units to be precise in the first nine months, up 2.4% compared to last year, revenue growth of almost 12%, and the higher fair value step up far exceeded the growth in units and resulted in EUR 300 million for the nine months 2025. It is the combination of higher revenue and higher gross profit plus stable selling cost that drove the EBITDA contribution to almost EUR 57 million, which is 45% above the prior year for recurring sales. We remain again very much on track towards further expanding EBITDA contribution. Finally, development on page 20. We have explained in previous calls the development EBITDA was positively impacted by a larger land sale that closed early this year, hence the extraordinary and not sustainable gross margin. If we adjust for this land sale, however, the gross margin comes down to 19% which I consider a very normalized developer margin we are targeting. That is as we have been expecting for either way our development business is a valuable contributor to the overall EBITDA. Here too, the increasing EBITDA contribution is very much on track. That much about the segments. On EPRA NTA, that is page 21, the main point for the NTA really is that due to a new law that will bring a reduction in corporate income tax, we saw a shift of roughly EUR 2.3 billion from deferred tax liabilities to IFRS equity. On a net basis more or less flat, but the composition somewhat changed. Page 22 for the debt KPIs, there is not much change from one quarter to the other, and the bottom line on the leverage side remains that we consider it well under control. The yardstick for that is mainly what the rating agencies expect from us to be safe on our BBB rating with a stable outlook. As I said last time, different points in the cycle require a stronger focus on some debt KPIs more than on others, and we are at a point where our main attention is on the ICR. Two ways to look at the ICR: the numerator is the same in both cases, adjusted EBITDA total of the last 12 months, but the denominator is different. One definition, and that is the one used in bond covenants, uses net cash interest in the denominator. This can be a bit volatile from time to time depending on the interest payment dates. The bond covenant threshold is 1.8x, so I hope we can all agree that this is somewhat irrelevant from a risk point of view. To allow for a more normalized measurement of ICR, we are using the net financial result that we also use in getting from Adjusted EBITDA to adjusted EBT. The ICR threshold we have set to ourselves internally is, as you know, 3.5x. Let me reiterate, our focus is to make sure our debt KPIs are in line with the BBB rating criteria and a stable outlook. This is now essentially an organic development as we expect values and EBITDA to grow and therefore to further move the debt KPIs in the right territory or even further on the guidance. This is on page 23. We have fine-tuned 2025 guidance and moved to the upper end of the range for both rental income and Adjusted EBITDA total as we usually do in the third quarter. We are also giving an initial guidance for the next year. No need to read all individual line items now, but do allow me to zoom in on the organic rent growth. You may recall the concept of the additional irrevocable rent increase claim that we introduced a few quarters back. We are showing it here again to demonstrate that the rent growth is coming. It is actually already there apartment by apartment, but because of the Kappungsgrenze it cannot be implemented just yet. Kappungsgrenze as a reminder is the cap that allows you not to increase rents by more than 15% for sitting tenants over a three year time horizon in tight markets. Explain the underlying concept on page 30 of the presentation in more detail. Let me say this, for 2026 we have a net increase of another 0.4 percentage points to a total of 3% that is already booked onto the underlying apartments but can only be implemented once the rental cap has lapsed in subsequent years. I can put it differently. If the 0.4 percentage points net build up would be harvested already next year, 2026 organic rent growth would be around 4.6%. You can actually see that the acceleration is coming through as promised without any rental cap. By the way, 2026 organic rent growth would be north of 7%. We did the math on how much net build up and net use of this additional irrevocable rent increase claim we will have on our way to 2028, and based on our probably rather conservative assumptions for future rent indices, we will see a net use that will take the actual organic rent growth to around 5%, also supported by higher investments. What we are moving towards is a step change in rental growth that surpasses historic rent growth numbers, which should not come as a surprise actually, because at the end of the day this is higher inflation finding its way over time into organic rent growth. Like we have always said and referring back to the commentary Rolf made, this higher level of rent growth will have a positive impact on both types of shareholder return and that is earnings growth and value growth. Final comment on the guidance page, some of you are asking for more clarity on minorities and taxes. EBT minorities are expected to be around 10% of adjusted EBT and cash taxes, and that obviously includes taxes for our disposal segments, are expected to be inside 10% of the Adjusted EBITDA total for 2025 and same applies for 2026. The CEO handover process is underway and Luca will be joining at the end of this month before he will officially assume his new role as CEO starting in January. We will miss Rolf, but we are equally excited about Luca joining and with that commentary for the last time. Rolf, back to you and for the last time. Thank you, Philip. Before we go to the Q&A, allow me to briefly summarize the relevant point of the presentation. As we laid out, the way Vonovia approaches the business is different and it has led to operational outperformance that we expect to continue. This puts the company in an excellent position for future earnings and value growth. Our market environment and operating business remain rock solid and we are well on track toward achieving our ambitious targets both for rental and non-rental growth. We have put the company into a tremendous stable footing and we leave it well positioned for further earnings and value growth. We have built a platform that is second to none and will prove to be the cornerstone in the company's effort to build a second Vonovia. All this will be in great hands with Luca. I wish him and the entire Vonovia team all the best and have no doubt that together they will write a new and very successful chapter in the history of Vonovia. More important, I would like to thank you all for your support in the last 12 years. Without your support and their willingness to invest, it would not have been possible to build this Vonovia, this great platform with this. Thank you very much. Back to Rene for the Q&A. Thank you, Rolf. Thank you, Philip. I hand it back to Moritz for the Q&A. Just as a reminder, everybody, let's. Keep it to two questions per person, please. Moritz, can you start the Q&A for us? Sure. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from Charles Boissier from UBS. Please go ahead. Yes, good afternoon. Thank you for taking my questions. I have two questions. The first one is on the change in the organic rent growth guidance for 2028 from 4% plus to now 5%. What exactly has changed, I would say, versus the initial guidance that you had set up, whether in the market or in terms of your, your ability to capture that rental growth. Thank you. Charles. Answer is very, very simple. We've been telling you before about 4%. I think now we have become more precise. If we look at the underlying data and we have done a very comprehensive analysis, we can see that historic inflation is coming through over time to the extent allowed by the rental caps. You will see also going forward, numbers in between 2.5%-3% non investment driven. The other bit is investment driven. That is currently 1.4%. With us more or less doubling the investments vis-à-vis what we have seen last year, we will see also an acceleration in rental growth in the investment driven bit. Here as a reminder, cash on cash yields 6%-7% with the vast majority ending up in the rental EBITDA and a portion of that ending up because of the value creation of our Craftsman organization in the value-add EBITDA. Okay, very clear, thank you. On the transaction market, you present quite a positive story of normalization. You are also pointing to H2 valuation accelerating versus H1. Still, in Q3, it seems rather slow in terms of transaction activity. Of course, there were some small deals here and there: Peakside, 850 apartments, Adler loan transaction. What are you seeing in the transaction market that makes you confident that it has normalized and you would be able to sell assets at book values? Thank you. First of all, even in the bad times where the transaction market was much worse, we sold assets for book value. It is probably quality of assets which is relevant. To be very clear, what you see and what is seen in the public is the big transactions. In reality, there is an underlying transaction market of smaller players. This I mentioned in my speech is actually back to the level where it has been before, the ultra low investment rate environment. What we see here in the listed sector is just a small part of the big transactions, but the market really is consisting of a lot of smaller transactions. There we see a very stable thing and we see the demand and we see supply coming to the market. I can confirm that the market is pretty stable and going in the right direction. As Philip said, we will expect a higher valuation in H2 than what uplift than we have seen in H. Understood. Best wishes, Rolf. Thank you. Thank you. The next question comes from Valerie Jacob from Bernstein. Please go ahead. Yes, hello, good afternoon. Thank you for taking my question. I've just got a follow-up question, clarification on the comment that you made that you expect organic growth in asset values to be higher in H2. I think part of it is mechanically driven by you spending more CapEx. I was wondering, is this comment also valid if we exclude the CapEx from your asset value growth? That's my first question. I've got a second question. You have that acceleration on both sides on the gross as well as on a net basis. In H1 you have seen net value growth of 70 basis points and that number will be exceeded in H2. Okay, thank you, that's clear. My second question is on your ICR. I mean, I'm not sure this is helpful that you know, you're changing a definition again. I was just wondering, going forward, are you still going to publish the definition on the bond definition or are you only going to publish, you know, your own definition? Valerie, I think what we just wanted to make clear is that we internally manage our business in a different way and not by bond covenants. That by the way is no different if you look at LTV metrics. Because if you look at the covenants that the LTV is not a concept in the bond covenants. Here you more look at capital, more broader capital ratios. The flip side, if you will, on the bond definition is, as I said, there is a bit more volatility. It very much depends point in time where you actually pay interest over time. If you do not make the quarter by quarter comparison, the two are very, very similar to each other. Typically difference of 10 basis points and more specifically, we will disclose both. Okay, thank you, Philip. Thank you. The next question comes from Bart Gysens from Morgan Stanley. Please go ahead. Yeah, hi, good afternoon. My first question is also on the ICR. Actually you talk about moving that into better territory, but I just wanted to understand how you can do that for the ICR. I mean the average cost of debt. Is running at 1.9%. You manage to keep that flat, you have to refi about EUR 4 billion-EUR 5 billion a year medium term. Now, even if reported EBITDA grows by 7% per annum, as you're guiding, that suggests that actually if you finance at the current marginal cost of debt, interest cover will not improve. On the contrary. How to look at that, and are you considering more alternative solutions, like? Convertible bonds or preferred equity? Thank you. No. To be very precise, where we are moving in the right direction is in terms of LTV and in terms of net debt to EBITDA LTV. I have conviction, as we have seen this in the running year, that the rental increase net of the investment required to achieve that rental increase will translate itself into value growth. If I look at net debt to EBITDA, we have, as you know, a number of initiatives which are running very well to in particular increase also the non-rental EBITDA. That will move that metric further down. The ICR is really our intention to keep that somewhat stable at current level. That is going to be the major focus. Here, yes, we probably need some positive backdrop in market in terms of refinancing costs. Our assumption is that this somewhat remains at current level of 4%. It's also no secret that I think that convertible product as part of the capital structure is a good addition. You should not overplay it. It should be a moderate portion of your capital structure in terms of liquidity in the underlying stock, plus in terms of the overall debt burden. With that, having said, I think there is capacity for more. To be crystal clear, convertible is for us no ambiguity, 100% debt. The assumption always is that it will never come to the dilution, but that if the convertible is in the money and at maturity is going to be refinanced by a new convertible, see the sparrows at a higher stock price. That is essentially, if you do the math, reducing contingent dilution. Again the focus. That is what is driving the capital structure going forward. It is going to be the ICR. Great, thank you. Then my other question is on. Recurring sales on slide 19. You've sold more or less the. Same amount of units as a year ago, but at a different price point, right around 10% higher per unit. Have you started selling a different type or quality or location? Should we read anything into this? Thank you. No, I think the biggest, there might be a small different mixture. I think what you should read in is that what we have announced, we have sold also this product in the period where liquidity was for us important actually with less focus on price. As we announced in October or November last year, we said now we will come back to normal. What you see is that the margin is actually coming back what we have expected. This of course comes together with the recovery of the market. You see here that the market obviously is ready to pay the well known premium which was paid before the crisis for individual apartments versus blocks. The retail and wholesale margin is back to normal. Which is also, I think, an additional answer to the question about why the market is coming back. You can see it in this figure. Great. Thank you and Rolf, good luck in your next endeavors. Thank you. Thank you. The next question comes from Thomas Neuhold from Kepler Cheuvreux. Please go ahead. Good afternoon. Thank you for taking my questions. My first question would be on the non rental business. Can you please provide us an update? On the new expanded business areas such as stranded assets, occupancy rights, and third party business, did you manage to strike already some interesting deals there? Yeah, I think to what we call manage to clean assets, which is a former called undeveloped assets. I think manage to clean is a much better and more precise definition. As you know, we have signed the first deal, we are in round two in the final round and actually exclusive negotiation with others with more potential. It took us a little bit longer to get this started than originally we expected. Now I think we're on the full run. I do not see anything else. This is the same for the occupation rights. Actually, to be very clear, you manage all these additional activities. In total the 10 where we see we are in line with our expectation, we are in line with the guidance which we have given you to 2028. There is no reason to be nervous. Actually, on the opposite, some of them are getting better. Especially for the second Vonovia, as you know, we will not talk about potential deals there. I can tell you that in the last two months which are remaining for me here, there is still a lot of opportunity where we are in discussions. Thank you. Second question is for Philip. Can you please give us an indication. What impact the lowered corporate tax rate? In Germany will have on your cash. Tax rate going forward once it's going to be implemented? I mean, still some time out. It's starting 2028. This is now asking for very long-term guidance. This is, as I said for now, predominantly impacting deferred tax liabilities which because of the embedded reduction in corporate tax rate is resulting in that one off gain of EUR 2.3 billion. In terms of more broader picture, I think, let me tell you that much, I mean by us significantly increasing our investments, our rental and value add business is not hugely impacted by tax payments because most of the investments we undertake according to German GAAP are actually reducing our taxable income. That you will see in lower tax rates actually for our rental and value add business going forward. That however is somewhat compensated by higher tax rates because we do more disposal business and that is for development to sell equally as for our recurring sales business. Yes, here you may have some small benefits in the long run on the lowering of the tax rate. I think what is however, even more important, and that is in particular for development to sell in global exits, is about structuring and the way how you sell it, essentially which allows you to optimize the tax line. Okay, understood. Okay, thanks a lot. Rolf, all the best for your future. Thank you. The next question comes from Andrew McCreath from Green Street. Please go ahead. Yeah, hi, good afternoon. Thank you for the presentation and for taking my questions. I also have two. Firstly on development, looking at your numbers, 3Q does not suggest much acceleration in activity. Could you please just provide some color on the dynamics there? Are you seeing any improvement in sales pace? That would be the first question. And the second would be on construction for the initial projects in Berlin and Dresden, you have guided to an all-in cost of EUR 3,600 per sq m. What sort of yield on costs are you underwriting for these developments? Thank you. On your first question, Andrew, on the development, as I said, if you look at the profitability that was really much driven by the sale of a landlord. We closed in Q1 and that is essentially also the somewhat overriding story for this year because we have sold essentially all project developments we had in our pipeline in the last two years in order to generate cash and because of the crisis did not start a new project we first need to have building up a platform on the basis of which we can earn the targeted gross margins of 15%-20%. You will see a kind of more steady development already next year, but only partially because also next year is going to be a mix between first completions and selling of those completions or started projects which we sell based on POC method. You will also see the disposal of land plots in the coming year. I think the kind of ramp up as we have been budgeting for is really to come through as of 2027 and beyond. For the new construction, I think this is one topic which is not only important for Vonovia, but for the whole German market. I think with the Bauturbo and with the most recent new legislation, it will provide us with a possibility to reduce construction costs by 30%. This famous EUR 3,500 all-in, which is actually comparable to the lateral letting. We are targeting a rough initial yield of roughly 5%. Of course, these buildings come with, in the first year, no maintenance and an increase of rent, which is often very indexed. That is why the initial yield is low, but then the yield will go up over time. That is why it is a good investment. This is either for us on our own balance sheet or if it's for sale, it's for others who are ready to invest at a 5% yield. Let me be very clear and add one thing. What you see in the development EBITDA is only development to sell and development to sell. As I said, we are targeting gross margins of 15%-20% and we are essentially targeting IRRs north of 10%. That is what you will see in that profitability line. It is not yield on cost driven how we manage that business, it is IRR. Okay, that is clear. Thank you very much. Both. All the best, Rolf. Thank you. The next question comes from Paul May from Barclays. Please go ahead. Hi guys, just a couple of questions from my side. Thanks. For the analysis on the return on investment. I think 7.1 you highlight over multiple years. I think as you know, we calculate close to 5% based on reported numbers. You said that's not possible to make that calculation, so thank you for providing that color. Just wondered why is that below the 8%-10% return on investment that you've previously and multiple times guided to? Is the first question. The second question, I think you highlight through the presentation how you're better than other listed peers based on your NOI yields. I think on our numbers where a lot of your cost comes is through your admin cost line versus others. If you look at it more on an EBIT yield or EBIT margin basis, you're either lower or similar to peers and therefore obviously your yield much lower. Also, are you penalizing certain peers by including land in their gross asset value and not including say housing profits or housing sale profits in the EBITDA? Or in the NOI? Just wonder if you're sort of overly penalizing certain peers. Thank you. No, I think the last one we are not doing is this is all public information, and I think Rene can guide you through. To be very clear, we are operating a little bit different in the different platforms. That's why I added the side of the platform, that our way to do central and non central is a little different. That's why this is a reason for efficiency. I think the only way how you can really compare it is to do the net yield and the cost yield. We can guide you through this, but this is based on public information. The other question was about one was. On the yield of the investment program. Paul, we've been I think explaining for quite some time that the mix of our various investment programs, and that is the energetic modernization of the building, that are the reletting investments when we have tenant churn, that is also our develop to hold business, are averaging out. With. Cash on cash yield of 6-7% and that we at least historically are more at the upper end of the range. That calculation is demonstrating what we are benefiting here and that is probably a bit different for Vonovia than for the broader sector is that we are able to compensate for some of the maintenance spend which by definition is a part of broader investments by putting our own Craftsman organization into play. Because here again we can earn some extra money. So that yield is actually vast majority ending up in the rental EBITDA but part also in the value-add. And it is only for that very reason that we can achieve these high numbers. Perfect, thank you. The next question comes from Thomas Rothaeusler from Deutsche Bank. Please go ahead. Hi, good afternoon everybody. Two questions. The first one is on the value-add business. Operating profit was only flat despite the pickup of investments. Actually, we see the same pattern for rental growth, which even came down. If you look at modernization-driven rent adjustments, you basically say that investment returns come with a time lag of more than one year. Just wondering by when we should see. A more meaningful pickup here. I think what you're doing is now you're comparing quarter by quarter, right? Actually year on year. If I look at the investments year. On year and look at the performance of the value-add business and look at the performance from rental growth out of monetization measures. If you look, Thomas, at the profitability line of value add, what is distorting a year-by-year comparison is a very big one-time benefit. We have seen last year by the conclusion of a finance lease agreement with Vodafone, and that resulted in an EBITDA which is not repeating itself this year of more than EUR 50 million. Now, if I look at the composition of the various profitability streams which are adding up to the value add, it is really very much the Craftsman organization where we have seen a very nice turnaround story. Craftsman organization A, benefiting from higher investment volumes, B, benefiting from higher insourcing ratio. That, by the way, is also why you see that change in terms of revenues in favor of internal versus external. What you can equally see is that we are seeing a nice ramp up in our energy business. That is thanks to the investments we undertake in photovoltaic. All the other businesses are really flattish with the exception of multimedia where we have year on year a decline, I think of 60%. That is because of that one time impact which is not repeating itself. Is that sufficiently answering your question? Perfect, thank you. On the second point, it is actually on disposals. I mean, you refer to improved investment markets. Should we expect this to allow you to speed up non core disposals? Maybe? Yes. I think we are now back on the normal level. We are doing non core disposals as it is accretive and attractive for the pricing. We are not pushing so much for volume, but we are pushing a little bit also related to the price. Yes, it is becoming easier also for the non core disposal. Okay, thank you. All the best, Rolf. Thank you. The next question comes from Marc Mozzi from Bank of America. Please go ahead. Good afternoon everyone. My first question is around your number of shares. How should we assume the number of shares you're going to use for the calculation of your dividend and EPS for this year at the end of the year because there is some changes here and I'm just wondering if you can help us having some clarity on that number. I'm talking about the weighted average, not the total. I think there is no change whatsoever. It's always the same. If we look at profitability numbers, we take the weighted average of the past four quarters. By way of reference, little change. I mean what you have seen in terms of increase in share count is A, the scrip dividend, which has seen a take up of slightly above 30% and B, I think in total 12 million shares as a result of the domination and profit loss transfer agreement with Deutsche Wohnen. So people accepting the exchange offer. That is really marginal. When we look at balance sheet numbers, and that is EPRA NTA, we look at the year end number in terms of share count, but also no, no change and the dividend is always end of period. Fair enough. The other question is around the dividend and I would like to understand how we should think about the dividend per share for the year because we know that it is 50% of the EBIT, so that is roughly EUR 950 million plus a surplus liquidity, which I understand is very subjective. I guess you would like to show some dividend growth. What sort of growth? On which basis are you going to assess your dividend proposal to the shareholder and to the board? Look Marc, no change here. I mean for now I think our dividend policy is what our dividend policy is. It's 50% of EBT plus surplus liquidity and that is based on the operating free cash flow. As usual, we will discuss that at the appropriate time and make a proposal to the shareholder meeting, which I think is in May. In May next year. Are you comfortable with the current market forecast of your dividend for this year? Or maybe I can check. That's exactly what that is actually. Fair enough. That's exactly what I thought. It's 126, 126, 125. We should not come, if not indirect, to dividend guidance. This is not the time. We will come as a dividend proposal. Not we, but the new management team will come as a dividend proposal if it's appropriate, as this is next year. Brilliant. Okay. No, no, fair enough. Totally understand. Rolf, I would like to congratulate you for running Vonovia for the past 12 years and all the best for what's next for you. Thank you very much. The next question comes from Simon Stippig from Warburg Research. Please go ahead. Hi Tim, thank you for taking my question. First one is on page seven. You showed your gross to net yield translation. You mentioned that here in Germany it's only 20 basis points. In Sweden and Austria I think you're holding only 11% based on units of your portfolio. Could you explain me the reasoning of why holding on to the portfolios in Austria, Sweden. Second one would be in regard to your operating free cash flow. Q3 was the lowest compared to previous quarters. I know it's mainly due to net working capital movements that comes obviously from your development to sell pipeline. Could you explain or indicate what we can expect here for the last quarter and then also more importantly what you see here for the next year. By that I mean items that are not so well explained. Not like the minorities, for example. I think you were very clear in previous conference calls. Maybe the capitalization rate, does it stay the same? Also, your capital commitment to development to sell. Lastly, I, Rolf, stay in good health and best of luck for the next challenge. Okay, first, for example, the first question I take, I think Austria in this respect is probably less relevant. It is all about Sweden. You know, in Sweden this is a warm rent, so it includes the energy. That is why the gap, which is actually energy, is counted here as cost to operate. That is why technically it is higher. That is why we are coming to 0.4 in total. You have to compare the Swedish business with other Swedish players, which of course we have done. We could provide you the same, for example, comparison with Heimstaden and we are more efficient with Heimstaden. That is why I mentioned the 0.2, because in the end the slide is more relevant if you compare to the German peers. You would compare it more with 0.2 and not with 0.4, which is in the notes, but because you cannot directly extract it from our reported figures, 0.4. You can report from the figures that we, I think we showed 0.4, but the difference between 0.4 and 0.2 is because of the different nature in the Swedish market where everybody has to cover the cost as a part of cost and not of a pass through item. On your second question, a bit more specific on the operating free cash flow, I mean, you know that we are not guiding on that. What we have been guiding for is excluding changes in the net working capital. Why is it that we have done that? Because there is by definition some volatility in particular if you look on the quarter by quarter comparison, because it largely depends on the point in time when we have the cash in, for instance for bigger global exits in the development to sell business. Please do not get nervous on the quarter by quarter comparison. That's not really the picture to draw more long-term. How I would look at it without guiding if I were you is that if you start with a depreciation line that is impacted by, in particular, our investments in photovoltaic, which I think is around EUR 100 million per annum depreciation, 20 years. Given that we do invest in photovoltaic quite significantly, you will see that line gradually going up, which is positive for the cash flow. I think, as in the past, net working capital is very difficult. As a reminder, there are two elements in it. It is development to sell, where my intention is to manage the business in a way that it's at least more or less flattish in terms of the net working capital movements, not on a quarter by quarter comparison, but on a rolling 12 month basis. What however is also in there is the managed to green business Rolf was mentioning. That will require an initial capital build up. That kind of portion will be negative. How negative depends on how much we are actually able to acquire. We will give details on that and we will also give details on the split of those two elements going forward, how it affects the net working capital. The rest I think is straightforward capitalized maintenance. I would kind of monitor vis-à-vis inflation because this is what's driving that line item. Dividends and minorities I think we talked about in length. You should have all the details, including the additional disclosure we put on our webpage and income taxes. I think the guidance somewhat remains also longer term and I was making that point previously that I expect that to be slightly inside 10% of total EBITDA. Great. Second question was very clear. Maybe I can ask a follow- up on the first one. Is that possible? Yes. Great. I think it's more profound because you made the case that you want to get to scale and scale brings your cost ratio down. I just wonder in Austria you're not building up the portfolio and in Sweden also, I'm sure things have changed since you acquired Bourbon and also since you expanded into geographies north, but is it really that you want to build that up or is it more a hold case or is it really also the potential that you could sell it and then reallocate the cash towards your own business in Germany or even buying back shares. First of all, and really Austria and Sweden is actually two types of story. First of all, the Austrian platform is partly because of language, because of various similar rental systems, is partly integrated into or has a higher overlap between the German platform. So. Of course, Austria is also linked to the development business because, you know, in Austria they are running a development to hold to sell business. You are building a portfolio, you are taking it on your platform for 10 years, and then you are selling it with a high margin. That is why the Austrian part is probably more linked to the development business than to the rental business. For the Swedish business, actually the same applies. We have bought only two listed companies, so we have consolidated the listed markets there. We have superior cost in comparison to the other listed. Other Swedish operators are non-listed by definition because they are non-listed left. But we know this data. It is the same opportunity that we have in Germany, we have in Sweden for the second Vonovia. I see actually in both in Germany and in Sweden the chance for playing this platform and making money out of doing just services based on the better cost structure in comparison to people who own assets and want to get rid of the expensive platform where they operate or buy new assets with a very attractive platform. I see the possibility in both. Also, you cannot compare Sweden to Germany. You have to compare Sweden to Sweden and you have to compare Germany to Germany. That is why I think it is two different markets. In both markets, the presentation we have shown you on page 7 is applicable. Also is applicable. Okay, great. Thank you very much. The next question comes from Pierre-Emmanuel Clouard from Jefferies. Please go ahead. Yes, thank you. Good afternoon. Actually, I have a quick follow-up question on Simon's question about Sweden. Is this something that has been discussed with board members about potential sale of the Swedish portfolio or is it up? To the new CEO, especially in light of a rebound of the investment market? Is it an open question or is? it not the case today? Sweden will be there in among. Vonovia's portfolio for many, many years. To be very clear, it was discussed in the period of 2022 where we talked about disposal and this was a question where we ended up with alternative structures which are more attractive at this time in the moment. It is not part of the discussion which the management board is doing with the supervisory board. It is not a discussion inside the management board, but also to be clear. I personally think, and I think this is not coming as a surprise for you, I personally think that if you are talking about second Vonovia, it is better if you cover more jurisdictions than less. I think this is important for the second Vonovia strategy. I am also here only two months left. I think the new management team under the lead of Luca has also to think about it. At the moment there's no indication that there is a sinking. I should not predict what happens in the future. Okay, that's clear. My second question is on the value-add business and Vonovia in general. With the expected increase in minimum wage in Germany, is there any impact to expect on the margins on your value-add business segment from the 2027? The very simple question is no. Right? Why that? Because the business where we operate, the craftsmen are much above the minimum salary anyway. This is a different general agreement with the unions, so there is no impact. The people in some parts of the gardeners are close to the minimum salary, but these are pass through items to the tenants. All right, that's clear. Thank you. All the best, Rolf. Thank you. The next question comes from Manuel Martin from Oddo BHF. Please go ahead. Hello gentlemen. Thank you for taking my questions. The first question, it's a bit kind of accounting question. We saw the effect of the change. In legislation on deferred taxes in the. P& L and also in the EPRA NTA calculation. When it comes to the EPRA NTA calculation, the EPRA NTA seems to have nevertheless decreased marginally in 3Q vs H1. Is there a special reason behind that? Or is this also kind of effects in the deferred tax? Maybe you can give us a hint there, please. This is predominantly driven by the liabilities we had to account for for the guaranteed dividend in the context of the exchange offer we made to Deutsche Wohnen minority shareholders. Okay, okay. Roughly EUR 400 million. EUR 400 million. 400 million. All right. Second question is bit more broader question on the market. The rental increases in the market in which Vonovia is showing and will show in future. Is this something which is also monitored? By government and politicians? What do you hear from politicians? Might that be an issue in the future? I think you have to distinguish between sitting tenants and new lettings. For the sitting tenants, it's very simple. I just showed it in the political debate here in Germany. Our increase on sitting tenants between 2022 and 2024 was 4.8% for sitting tenants without investment. Just having the apartment with no increase, and the increase in salary was more than 10%. The affordability is going up and not down. We have no affordability gap for the new letting. Of course, there is an issue because especially if you refer to the gray market, the market which is outside the mid price from the partly illegal course, where the situation is extreme, where we really have an affordability issue for gray market rents. EUR 20 for Berlin, this is beyond the affordability of normal people. That is why you have to distinguish this. I think it's getting more and more better understood by the politicians, these two things. The gray market, even with the Mietpreisbremse, you cannot stop it. There is only one solution to work on the imbalance of supply and demand, to do more products. That is why we have the Bauturbo, where I think this will help. As you see me in the press, we also now have to work on the rental regulation because the existing rent regulation with Mietpreisbremse problems and with the EUR 2 and EUR 3 will not make it happen that there will be more investment in housing. This means that the situation of high gray rents will be getting worse and not better. I am positive that one day the politicians will get it. Okay, I see. Thank you very much. Rolf, all the best for you. In your future positions or plans. Thank you. The next question comes from Neil Green from JPMorgan. Please go ahead. Hi there. Thank you for taking my question. It's just one, please. And it goes back to kind of one of the earlier comments about marginal debt costs. I think you said around 4% was in the guidance. I think your long-term unsecured bonds. Are trading within that 4% at the moment. I think it's fair to say. The secured debt would also. Probably be within 4% as well. I'm just wondering whether that 4% assumption you have is kind of conservative. If there's something that I'm perhaps missing, please. I think we will see later today the actual proof point where our cost of debt are currently because we are in the market with a bigger, bigger bond issuance. 7, 11 and 15 years. Look, I mean if you, if you do a midterm planning, I think it is overly aggressive if you were to assume a decrease in rates. And the 4% I've been mentioning actually in our internal planning, I'm even putting kind of a safety margin on top of it because you never know whether there is a slight shift up or down vis a vis spot rates. I feel comfortable with the assumption of kind of a stable financing environment. As I said before, that obviously is very paramount for us on how aggressively we need to manage the ICR. But again, my baseline is 34%. Perfect. Thank you and best of luck too. You all in the future. Thank you. Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Rene for any closing remarks. Thank you, Moritz. Especially thanks everybody for dialing in. Joining this call. As always, if you have any follow- ups, you know where to find me. Also my colleagues, feel free to ask. We're looking forward to connecting with you in the days and weeks ahead. That concludes today's call. As always, stay safe, happy and healthy. Bye now. Bye. Bye. Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining and have a pleasant day. Goodbye.