Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q2 2008 Earnings Presentation
50 slides from Citycon Oyj's earnings presentation, July 2008
Slide 1: Citycon Presentation Q2 2008
Citycon Presentation Q2 2008
Slide 2: Disclaimer
Disclaimer This document and the information contained herein is strictly confidential and is being provided to you solely for your information. This document may not be retained by you and neither this document nor the information contained herein may be reproduced, further distributed to any other
Slide 3: Contents
Contents Strategy and Highlights Business Environment Market Environment Sustainable Approach Property Portfolio Development and Redevelopment Projects Latest acquisitions Key figures Property Portfolio Profitability & Financing Additional info Iso Omena in Espoo •Citycon Q2 2008 3
Slide 4: Highlights – Goals and Focus
Highlights – Goals and Focus Goals Growth, mainly organic Strategic focus Retail properties only Geographical focus Sustainability Position Market Leader in Finland Strong position in Sweden Growing in the Baltic Countries Strong operating cash flow Expertise in retail real estates and f
Slide 5: Highlights – Financial Targets
Highlights – Financial Targets ► Continued expansion through property ► Cumulative CAPEX since 2005 in development and selective acquisitions excess of EUR 1 billion Growth track ► The main emphasis on organic growth ► Solid distribution policy despite growing ► For 2007 Citycon’s distribution was n
Slide 6: Highlights & Business Environment
Highlights & Business Environment •Citycon Q2 2008 6
Slide 7: Highlights – Q2 Highlights
Highlights – Q2 Highlights Citycon owns 33 shopping centres and The fair value change was EUR – 84.7 million and the market 51 other retail value of property portfolio was EUR 2,156.9 million (Q1/2008: properties EUR 2,226.6 m) The valuation yield 6.0% (Q1/2008: 5.7 %) by external appraiser. N
Slide 8: Highlights – Geographical Overview
Highlights Geographical Overview Finland – 74.6% of total net rental income in Q1- Q2/2008 Sweden (€m) Finland (€m) – Net rental income growth of 25.6 % to EUR 44.9 m 1,546,2 – Market leader; 22 shopping centers and 45 other 503.0 retail properties 62.9 60.9 44.9 21.2 20.0 12.2 – Citycon sold 40 p
Slide 9: Business Environment
Business Environment GDP Private Consumption Source: Nordea •Citycon Q2 2008 9
Slide 10: Business Environment – Consumer Confidence
Business Environment Consumer Confidence Finland Sweden Estonia Lithuania 25,0 25,0 15,0 15,0 10,0 10,0 20,0 20,0 5,0 5,0 15,0 0,0 0,0 15,0 -5,0 -5,0 10,0 10,0 -10,0 -10,0 -15,0 -15,0 5,0 5,0 -20,0 -20,0 0,0 0,0 -25,0 -25,0 01/04 01/05 01/06 01/07 06/08 01/04 01/05 01/06 01/07 06/08 01/04 01/05 01/0
Slide 11: Business Environment
Business Environment The spread in yield requirements between prime and other properties increased clearly not only in Retail Sales and CPI, May 08 the Baltic countries but also in Finland and Sweden (source: Jones Lang LaSalle). 11.4% Construction costs are growing, but not as rapidly 7.9% as d
Slide 12: Property Portfolio
Property Portfolio •Citycon Q2 2008 12
Slide 13: Development and Redevelopment Projects
Development and Redevelopment Projects •Citycon Q2 2008 13
Slide 14: Development and Redevelopment Projects – On-going projects
Development and Redevelopment Projects On-going projects, 30 June 2008 •Citycon Q2 2008 14
Slide 15: Pilot Projects in Sustainable Construction
Pilot Projects in Sustainable Construction Trio Total redevelopment of Lahti downtown shopping centre. The most important shopping venue in its large catchment area,100 kilometers from Helsinki. Originally built in 1977/87 and consisted Finland of three separate buildings. Adjacent Hansa-building (1
Slide 16: Projects under planning
Development and Redevelopment Projects Projects under planning, 30 June 2007 16
Slide 17: Potential project
Development and Redevelopment Projects Potential project •Citycon Q2 2008 17 Forum Sampokeskus
Slide 18: Completed projects
Development and Redevelopment Projects Completed projects Linjuri, Salo •Citycon Q2 2008 18
Slide 19: Liljeholmenstorget construction in June 2008
Development and Redevelopment Projects Liljeholmenstorget construction in June 2008 •Citycon Q2 2008 19
Slide 20: Key Figures - Property Portfolio
Key Figures - Property Portfolio ■ 3,662 (3,415) leases with an average length of 2.8 (2.9) years Breakdown of property portfolio ■ Net rental income increased by 22.7% to EUR 60.1 million ■ GLA totalled grew by 12.4 % to 926,550 m2 5.0 % ■ Total NRI growth 2.7% in Q2 23.4% 71.6% ■ Annualised rental
Slide 21: Property Portfolio – Finland
Property Portfolio – Finland •Citycon Q2 2008 21
Slide 22: Property Portfolio – Sweden
Property Portfolio – Sweden •Citycon Q2 2008 22
Slide 23: Property Portfolio – The Baltic Countries
Property Portfolio – The Baltic Countries Estonia Lithuania •Citycon Q2 2008 23
Slide 24: Property Portfolio – Acquisition Track Record
Property Portfolio – Acquisition Track Record 1) EUR million Jul 2005 Jul 2005 Sep Dec Jan Feb May Jul 2006 Aug Sep Sep Jan Feb May July Sept Sept 2005 2005 2006 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2007 Åkersbe Rocca Colum- rga al Mare Trio Portfolio Valtari + Portfolio Mandarin bus Li
Slide 25: Major Acquisitions 2006 & 2007
Property Portfolio - Major Acquisitions 2006 & 2007 •Citycon Q2 2008 25
Slide 26: Key Figures
Key Figures •Citycon Q2 2008 26
Slide 27: Income Statement - Snapshot
Income Statement - Snapshot •Citycon Q2 2008 27
Slide 28: Key Figures – Profitability
Key Figures – Profitability Quarterly Net Rental Income by segments Quarterly Operating Profit1) by segments CAGR +22.3% CAGR +22.8% ■ Citycon has posted strong quarterly growth since 2006 both in terms of Net rental income and Operating profit ■ Compound annual growth rate (CAGR) has been over 22 p
Slide 29: Balance Sheet – Snapshot, Key Figures
Balance Sheet – Snapshot, Key Figures •Citycon Q2 2008 29
Slide 30: Consolidated cash flow statement Q2 2008
Consolidated cash flow statement Q2 2008 Cash from operations improved by 27% due to: Improved cash generation through higher profits Lower negative working capital development compared to previous year Cash taxes were positive due to a large tax rebate received in 1q 2008 resulting from the
Slide 31: Key figures – EPRA NAV
Key figures EPRA NAV versus Share Turnover and Profit •Citycon Q2 2008 31
Slide 32: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives EUR 1,229.2 million 1) Loans (EUR 1,229.2m) Floating rate debt Fixed rate debt Fixed derivatives (EUR 624.0m) 23% 26% Inflation derivatives (EUR 50.0m) Fixed rate swaps 51% ■ During second
Slide 33: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of fixed and floating rate loans and Period-end interest rate by maturity undrawn committed credit limits Fixed (EUR 321.6m) Average 4.88% Floating (EUR 907.6m) Undrawn credits (EUR 325.6m) ■ Bulk of Citycon’s debt is due on or after 2013 ■ Current a
Slide 34: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,229.2 million 1) EUR 1,229.2 million 1) Other LTL 1% 23% Syndicated term loans EEK 4% 49% EUR 72% SEK 23% CP’s 7% Revolving credit facility 6% Bonds 15% ■ The backbone of the debt financing continues to be the syndicated
Slide 35: Key Figures – Interest Rates and LTV
Key Figures – Interest Rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) ■ Increasing market rates feed through income statement with certain lag and Citycon’s average interest rate decreased marginally to 4.90% as certain loans and swaps were rolled over with favorable
Slide 36: Breakdown of Financial Expenses
Breakdown of Financial Expenses 2q2008 2008 YTD Interest expenses decreased marginally from the previous Excluding derivative valuations, Net financial expenses quarter to EUR 14.1 million due to favorable loan and swaps increased 47% compared to 1-6/ 2007 rollover At the same time, net debt i
Slide 37: Net Financial Expenses Q2 2008 vs Q1 2008
Net Financial Expenses Q2 2008 vs Q1 2008 • Citycon Q2 Presentation 37
Slide 38: Key Figures – Share Performance
Key Figures – Share Performance 1) 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 1.1.2004 1.7.2004 1.1.2005 1.7.2005 1.1.2006 1.7.2006 1.1.2007 1.7.2007 1.1.2008 1.7.2008 FTSE EPRA Nasdaq OMX Helsinki CAP Citycon •Citycon Q2 2008 38 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on 3 January 200
Slide 39: Key Figures - Share Data
Key Figures - Share Data Market capitalisation totalled EUR 619 million as of 15 July 2008 Breakdown of shareholders 95.8 % of shareholders are international as of 30 April, 2007 4.20 % 1984 registered shareholders 95.80 % Largest Share holders Gazit –Globe ~39.35% Perennial Investment Part
Slide 40: Backup Information
Backup Information •Citycon Q2 2008 40
Slide 41: 2007 Acquisitions - Iso Omena “The Big Apple”
2007 Acquisitions - Iso Omena “The Big Apple” Key Figures Opening 2001 Citycon acquired shopping centre Iso Omena Leasable area, m2 61,300 from Doughty Hanson for appr. EUR 329 of which retail premises, m2 49,000 million; net initial yield 4.5%. Gross floor area, m2 138,458 The company sold 40%
Slide 42: Iso Omena - Catchment area
2007 Acquisitions - Iso Omena “The Big Apple” Iso Omena - Catchment area 10-minute drive time 149,700 consumers 66,500 households Purchasing power EUR 2.75 billion 5-minute drive time 35,000 consumers 16,200 households Purchasing power EUR 0.6 billion Drive Times •Citycon Q2 2008 42
Slide 43: 2007 Acquisitions – Strömpilen and Magistral
2007 Acquisitions – Strömpilen and Magistral Strömpilen*) - Umeå Magistral - Tallinn Total GLA aopprox. 25.000 m2 Total GLA 9.500 m2 Occupancy rate ~100 % Occupancy rate 100 % Sales, 2007 (excl. VAT) EUR 88.6 million Sales, 2007 EUR 17.7 million Number of visitors, 2006 2 million Number of visitors,
Slide 44: Latest Development and Redevelopment Projects
Latest Development and Redevelopment Projects Shopping Centre Duo Duo is located in one of the Finland's largest suburb, Hervanta in Tampere. Extension was completed in April and the renewed part for Christmas sales. The leasable area of the shopping centre is 15,500m2 The old Hervanta retail
Slide 45: Citycon in Brief
Citycon in Brief Mission Demonstrating expertise in retail property business, Citycon not only owns, manages, leases and develops shopping centres and other retail properties but also develops new retail premises. Vision Citycon aims to expand its property portfolio and increase its value. The c
Slide 46: Citycon in Brief - Background
Citycon in Brief - Background Citycon’s path to becoming the market leader and an international property investment company 1988 2004 2007 Quoted on the Main List of Citycon continues to growth The company strengthens its Helsinki Stock Exchange Office Ownership structure becomes shopping ce
Slide 47: Highlights – Country Organisation
Highlights – Country Organisation •Citycon Q2 2008 47
Slide 48: Citycon in Brief – Management
Citycon in Brief Management Petri Olkinuora, CEO Eero Sihvonen, CFO Outi Raekivi Head of Legal Affairs Kaisa Vuorio Ulf Attebrant Harri Holmström Vice President Vice President Vice President Finnish Operations Swedish Operations Baltic Operations •Citycon Q2 2008 48
Slide 49: Citycon Properties – Core Shopping Centres
Citycon Properties – Core Shopping Centres Lippulaiva Myyrmanni Trio Built 1993 1994 1977/87 GLA 23.000 m2 40.200 m2 32.200 m2 Owned 100 % 100 % 89.3 % Finland Iso Omena 2001 Koskikeskus Forum Columbus 61.300 m2 1988 1953/91 1997/07 100 % 25.700 m2 17.400 m2 20.400 m2 88 % Citycon 69 % 100 % Jakobsb
Slide 50: Contact Information
Contact Information Citycon Oyj Investor Relations Pohjoisesplanadi 35 AB FIN-00100 Helsinki Tel. +358 9 680 36 70 Mr Petri Olkinuora Fax +358 9 680 36 788 info@citycon.fi CEO www.citycon.fi Tel. +358 9 6803 6738 e-mail : firstname.lastname@citycon.fi Fax +358 9 6803 6788 Petri.Olkinuora@citycon.fi