Slide 1: Q3 2013 Results
Q3 2013 Results 1
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: Citycon's Vision
Citycon’s Vision • Be the household name for Nordic and Baltic retail real estate • Offer the best retail and social experience in urban, grocery-anchored shopping centres • Be “recognised” by retailers, shoppers, and investors as the leader in its class Lippulaiva, Helsinki Metropolitan Area IsoKri
Slide 4: Geographical positioning
Geographical positioning Net rental income (Q1-Q3) Fair values of properties (Sep 2013) —with Kista Galleria 100% —with Kista Galleria 100% EUR million EUR million 19.0 335 13% 10% 77.2 1,677 51% 51% Sweden 1,269 54.5 36% 39% Finland Finland Finland Sweden Sweden Baltic Countries & New Business Balt
Slide 5: Leading position in core markets
Leading position in core markets GAV1) of retail real estate portfolio in the Nordic and Baltic regions Steen&Strøm 4.2 Citycon 2) 3.2 Unibail-Rodamco 2.3 Atrium Ljungberg 3) 1.5 Hufvudstaden 4) 0.8 Sponda 5) 0.7 Eurocommercial 6) 0.7 Wereldhave 0.5 0 1 2 3 4 5 Source: Company financials EUR billion
Slide 6: Strong organic growth, like-for-like NRI
Strong organic growth, like-for-like NRI 6% 4.9% 4.9% 5% 4% 3.8% 3.6% L-f-l net rental income growth 3% 2% 0.8% 1% -0.3% 0% 2008 2009 2010 2011 2012 Q1-Q3/2013 -1% Improved cash flow from existing operations 6
Slide 7: Five core assets
Five core assets 1 Sweden—Kista Galleria 5 2 Sweden—Liljeholmstorget Galleria Finland—Iso Omena Company to provide picture Company to provide picture 4 3 Finland—Koskikeskus Estonia—Rocca al Mare Company to provide picture Retail Fair value Net Visitors Sales Total GLA Parking Economic City premises
Slide 8: Business environment
Business environment Iso Omena, Helsinki Metropolitan Area 8
Slide 9: Consumer confidence
Consumer confidence 40 30 20 10 0 1.1.2008 1.3.2008 1.5.2008 1.7.2008 1.9.2008 1.11.2008 1.1.2009 1.3.2009 1.5.2009 1.7.2009 1.9.2009 1.11.2009 1.1.2010 1.3.2010 1.5.2010 1.7.2010 1.9.2010 1.11.2010 1.1.2011 1.3.2011 1.5.2011 1.7.2011 1.9.2011 1.11.2011 1.1.2012 1.3.2012 1.5.2012 1.7.2012 1.9.2012 1
Slide 10: Economic outlook
Economic outlook GDP growth Inflation 12% 6% 10% 5% 8% 4% Change % Change % 6% 3% 4% 2% 2% 1% 0% 0% -2% Finland Sweden Denmark Estonia Lithuania Euro Finland Sweden Denmark Estonia Lithuania Euro zone zone 2011 2012 2013E 2014E 2015E 2011 2012 2013E 2014E 2015E Unemployment Public sector debt as % o
Slide 11: Business environment
Business environment • August unemployment rates below Retail sales (January-August)1)& the European Union average (10.9%): CPI (August) • Finland 8.0% Retail Sales CPI • Sweden 8.0% 6,0 % • Estonia 7.9% (July 2013) 5,0 % 5,0 % 4,9 % • Lithuania 12.3% 4,0 % • Denmark 6.6% 3,0 % 2,9 % 2,0 % 1,2 % 1,5
Slide 12: Sales and footfall
Sales and footfall In all Citycon SC’s Total sales: +1% Total footfall: +2% L-f-L shopping centre sales L-f-L shopping centre footfall 1 600,0 2% 80,0 6% 6% 1 400,0 70,0 5% 1% 60,0 4% 1 200,0 1% 1% Sales, EUR million 1 000,0 50,0 3% Million Visitors Change, % Change, % 800,0 0% 40,0 2% 0% 600,0 30,0
Slide 13: Responding to the changing retail landscape
Responding to the changing retail landscape Citycon: Urbanisation • Growing urban population • 87% of total portfolio in main • Increased urban GDP per capita cities • 70% in capital cities Convenience • Demand for proximity, security, • Vast majority of centres cleanliness, services, and atmosphere
Slide 14: Highlights of Q3 2013
Highlights of Q3 2013 Kista Galleria, Stockholm 14
Slide 15: Highlights of Q3 2013
Highlights of Q3 2013 Good financial performance Include picture Improved occupancy Net fair value gains Administrative cost savings program on track Successful opening of H&M and Debenhams in Rocca al Mare Rocca al Mare, Tallinn 15
Slide 16: Good financial performance
Highlights of Q3 2013 Good financial performance EUR million Q3/2013 Q3/2012 Q1–Q3/2013 % Growth Net Rental Income 43.9 42.6 126.9 5.8% Administrative expenses 4.7 5.4 15.1 -18.8% EPRA Operating Profit 39.5 37.3 112.6 11.0% Net financial income and expenses -15.4 -18.1 -74.9 47.7% EPRA Earnings 24.2
Slide 17: Strong NRI development
Highlights of Q3 2013 Strong NRI development Q1-Q3/2013 Q1-Q3/2012 % Growth L-f-L % Growth Finland 77.2 72.5 6.5% 4.8% Sweden 30.7 29.3 5.0% 5.0% Baltic Countries and New Business 19.0 18.1 5.2% - NRI, total 126.9 119.9 5.8% 4.9 % • Continued strong like-for-like net rental income growth in both sho
Slide 18: Improved occupancy
Highlights of Q3 2013 Improved occupancy Q3/2013 Q3/2012 Q2/2013 Occupancy rate (economic), % 95.8 95.4 94.8 L-f-L occupancy rate (economic), % 95.3 95.1 94.7 Occupancy cost ratio, % 8.5 9.0 8.5 (L-f-L shopping centres) Average rent, EUR/sq.m. 21.5 20.8 21.5 • Good leasing result in Q3 – succesfully
Slide 19: Net fair value gains
Highlights of Q3 2013 Net fair value gains Q3/2013 Q3/2012 Q1-Q3/2013 Net fair value gains, EUR million 6.3 13.8 21.4 Net yield requirement, % 6.3 6.3 - Finland 6.2 6.3 - Sweden 5.9 5.9 - Baltics 7.6 7.9 - Net rental yield, % 6.4 6.3 6.4 • The fair value of investment properties totalled EUR 2,739.4
Slide 20: Decreased administrative expenses
Highlights of Q3 2013 Decreased administrative expenses 30 27.7 25 26.5 Forecast 23.3 Total administrative expenses, 20 EUR in million 17.8 16.9 15 15.1 10 5 0 2008 2009 2010 2011 2012 Q1-Q3/2013 Cost savings program on track (up to EUR 5 million saving in 2013) 20
Slide 21: Successful openings of H&M and Debenhams in Rocca al Mare
Highlights of Q3 2013 Successful openings of H&M and Debenhams in Rocca al Mare • Total investment EUR 5.3 million • Second H&M to open later this year in Kristiine New openings support further growth in Tallinn centres 21
Slide 22: Property portfolio, (Re)development projects & sustainability
Property portfolio, (Re)development projects & sustainability IsoKristiina, Lappeenranta 22
Slide 23: Property portfolio
Property portfolio • 3,636 (3,804) leases with an average length of 3.6 (3.4) years • Total GLA 975,790 m2 (998,170 m2) • Rents linked to CPI (nearly all agreements) Segment diversification Occupancy cost ratio Shopping centre rental income by branches as per Dec 2012 L-f-L Shopping centres, rolling
Slide 24: Property portfolio
Property portfolio Q3/2013 Q3/2012 Q2/2013 2012 Occupancy rate 95.8 95.4 94.8 95.7 at end of the period (economic), % Average rent, 21.5 20.8 21.5 20.7 EUR/sq.m. Number of leases started 156 140 125 792 during the period Total area of leases started, 26,507 23,685 35,423 141,167 sq.m.1) Average rent
Slide 25: Property portfolio: lease maturity and top tenants
Property portfolio Average lease maturity over time Occupancy (%) 97.1 95.7 96.0 95.0 95.1 95.5 95.7 • Measured in fair value, like-for-like properties accounted for 77.8% of the total portfolio and of 4 3,4 3,5 3,2 Average remaining 3,0 3,1 3,1 l-f-l portfolio 66.4% is in Finland and 84.4% of 2,9 l
Slide 26: Valuation yield development
Valuation yield development Fair value of investment properties EUR 2,739.4 million • Total fair value gains Q1-Q3 EUR 21.4 million • Fair value gain in shopping centres EUR 19.6 million • Fair value gain in supermarkets and shops EUR 1.8 million Net yield requirement for entire property portfolio 6
Slide 27: Ongoing (re)development projects
Ongoing (re)development projects Property Area before Citycon’s Cum. Expected yield Pre- Est. of and after estimated realised capex on completion leasing completion (sq.m.) investment (EUR m) when stabilized rate 1) (EUR m) (%) (%) Iso Omena 63,100 88.0 12.3 6.5-7.0 40 Autumn Three-phased extension
Slide 28: Extension and (re)development of Iso Omena
Extension and (re)development of Iso Omena The shopping centre's retail area will grow to 75,000 square metres Vantaa Extension will be fully integrated with the new Matinkylä metro station and bus terminal Approx. 35,000 passengers will pass through the Helsinki metro centre each day Espoo City Cen
Slide 29: Strategic (re)development and partnership in IsoKristiina
Strategic (re)development and partnership in IsoKristiina • IsoKristiina is located in the city centre of Lappeenranta, in Eastern Finland 25 km from the Russian border • Catchment area is the whole city of Lappeenranta (approximately 72,000 inhabitants) • In addition, constantly growing Russian tou
Slide 30: Largest (re)development projects under planning
Largest (re)development projects under planning Citycon's Board of Directors has not yet made a decision on these (re)development projects, but they are under planning Property Project Citycon’s Target for Target Additional information area expected net project year of 1) (sq.m.) investment initiati
Slide 31: Environmental targets and results
Environmental targets and results Strategic objectives related to environmental responsibility Targets for 2012 Results of 2012 Targets for 2013 Climate Change Reduction of greenhouse gas emission by 20 per cent by year In l-f-l shopping centres: 2-3% 2-3% 2020 from the 2009 level -3.3 % Energy Redu
Slide 32: Financial figures
Financial figures Myyrmanni, Helsinki Metropolitan Area 32
Slide 33: Summary of Q1–Q3 Financial results
Summary of Q1–Q3 Financial results Q1–Q3/ Q1–Q3/2013 incl. EUR million Q3/2013 Q3/2012 2012 2013 100% Kista Galleria1) Net Rental Income, Total 43.9 42.6 126.9 150.7 162.0 NRI, Finland 26.8 25.2 77.2 77.2 98.2 NRI, Sweden 10.6 10.6 30.7 54.5 39.2 NRI, Baltic Countries & 6.4 6.7 19.0 19.0 24.6 New Bu
Slide 34: Outlook 2013
Outlook 2013 EPRA Operating Profit, EUR million EPRA Earnings, EUR million 170 EUR 146.7 – 110 EUR 151.7 EUR 85.9 – 150 EUR 89.9 90 130 110 70 90 135,7 117,4 50 105,3 107,7 105,0 63,9 70 53,3 50,9 47,3 43,8 50 30 EPRA Operating Profit Outlook Range EPRA Earnings Outlook Range • The company expects:
Slide 35: Snapshot of statement of comprehensive income
Snapshot of statement of comprehensive income Q1-Q3/ Q1-Q3/ EUR million Q3/2013 Q3/2012 2012 2013 2012 Gross rental income 58.6 57.5 175.9 167.4 225.9 Service charge income 3.5 3.4 10.7 9.7 13.3 Turnover 62.1 60.9 186.6 177.1 239.2 Property operating expenses 17.8 17.8 58.8 55.7 75.8 Other expenses
Slide 36: NRI growth by segments and portfolios
NRI growth by segments and portfolios Baltic Countries EUR million Finland Sweden Other Total Turnover & New Business Q1-Q3/2011 67.3 26.8 12.9 - 107.0 161.0 Acquisitions 0.9 1.2 4.0 - 6.1 9.1 (Re)developments 3.2 0.1 0.1 - 3.4 5.3 Divestments -0.4 -1.2 - - -1.7 -3.3 Like-for-like properties 1.7 1.7
Slide 37: Segment information (incl. Kista Galleria)
Segment information (incl. Kista Galleria) EUR million Q3/2013 Q3/2012 Q1-Q3/ Q1-Q3/ 2012 2013 2012 Net rental income Finland 26.8 25.2 77.2 72.5 98.2 Sweden 18.7 10.6 54.5 29.3 39.2 Baltic Countries and New 6.4 6.7 19.0 18.1 24.6 Business Total segments 51.9 42.6 150.7 119.9 162.0 Reconciliation to
Slide 38: Snapshot of statement of financial position
Snapshot of statement of financial position Statement of financial position, EUR million 30 Sep 2013 30 Sep 2012 31 Dec 2012 Investment properties 2,739.4 2,695.5 2,714.2 Total non-current assets 2,911.9 2,717.9 2,737.6 Total current assets 51.8 51.8 75.5 Total assets 2,969.9 2,775.1 2,818.5 Total s
Slide 39: Cash flow statement
Cash flow statement Q1-Q3/ Q1-Q3/ EUR million 2013 2012 Profit before taxes 62.3 75.0 • Cash flows from operating activities Adjustments 51.4 28.2 decreased mainly due to higher Cash flow before change in working capital 113.6 103.2 interest expenses and other financial Change in working capital -14
Slide 40: Financing overview
Financing overview Liljeholmstorget Galleria, Stockholm 40
Slide 41: Financing overview – Key figures
Financing overview – Key figures KEY RATIOS Q3/2013 Q2/2013 Q4/2012 Q3/2012 Equity ratio, % 44.1 42.7 37.8 34.8 Loan to Value (LTV), % 53.4 54.2 54.5 58.1 Current average interest rate, % 4.07 4.09 4.25 3.94 Year-to-date average interest rate 4.08 4.14 4.07 4.06 including interest rate swaps, % Hedg
Slide 42: Debt type and currency split
Debt type and currency split Breakdown by debt type Breakdown by currency EUR 1,499.5 m1) EUR 1,499.5 m1) Other LTL 1% 7% SEK 19% Bilateral term loans EUR 14% Syndicated term loans 80% 34% CP 1% Bonds 44% • The successful application for investment grade credit ratings with S&P (BBB-) and Moody’s (B
Slide 43: Debt maturities and interest risk hedging
Debt maturities and interest risk hedging Maturity profile of loans and derivatives Interest-bearing debt by fixing type EUR 1,499.5 m Loans (EUR 1,499.5 m) Floating rate debt Fixed derivatives (EUR 584.0 m) 9% Undrawn loan facilities (EUR 380 m) Fixed rate debt 52% Fixed rate swaps 39% • Average lo
Slide 44: Available liquidity
Available liquidity Available liquidity (EUR m) EUR million Q3/2013 Syndicated or bilateral RCF 380,0 Cash 25,0 Total credit lines and cash 405,0 Commercial Paper 17,9 Net available available liquidity 387,1 • Sufficient liquidity buffer – Citycon’s unused committed credit facilities at the end of Q
Slide 45: Interest rates and LTV
Interest rates and LTV Quarterly development of interest rates1) Net debt and LTV-%2) • Period-end run rate decreased slightly to 4.07% following repayment of the convertible capital loan in August 2013. Market interest rates are nearly unchanged at modest levels. • Interest rates feed through the i
Slide 46: Financial expenses analysis
Financial expenses analysis Net Financial Expenses (EUR thousand) Q3/2013 Q2/2013 Q3/2012 Q1-Q3/2013 Q1-Q3/2012 Change % YTD Financial expenses: A Interest expenses -15 919 -16 370 -16 204 -49 079 -47 206 4% Foreign exchange gains(+)/ losses(-) -32 85 B 84 50 84 -41 % Amortisation of capitalised fee
Slide 47: Share performance and volume
47 0 1000000 2000000 3000000 4000000 5000000 6000000 7000000 2.1.2012 17.1.2012 1.2.2012 16.2.2012 2.3.2012 19.3.2012 3.4.2012 20.4.2012 8.5.2012 24.5.2012 8.6.2012 26.6.2012 11.7.2012 26.7.2012 10.8.2012 27.8.2012 11.9.2012 26.9.2012 11.10.2012 Citycon share volume 26.10.2012 Share performance and
Slide 48: Ownership, 30 September 2013
Ownership, 30 September 2013 • Established and listed on the Helsinki Stock Shareholders Exchange since 1988 Domestic International • Market cap EUR 1 098.8 million 22.6% • Number of domestic shareholders increased: total 8,789 (6,658) registered 77.4% shareholders, 22.6% (20.5%) of total • Largest
Slide 49: Back up information
Back up information Koskikeskus, Tampere 49
Slide 50: History of Citycon
History of Citycon Citycon’s 25 years! International New management Foundation expansion and new strategy 1988 2003 2011 Founded by Sampo Pension Ltd, Citycon business to include • Citycon’s new CEO, Marcel Kokkeel, Imatran Voima Oy, development as well as owning, joined the company Rakennustoimisto
Slide 51: Lease expiry profile Q3 2013
Lease expiry profile Q3 2013 25% 20% 15% 10% 5% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 +2023 Shopping centres % Other retail properties % Average remaining length: 3.6 yrs 51
Slide 52: Illustrative calculation of ICR covenant using Q3 2013 financials
Illustrative calculation of ICR covenant using Q3 2013 financials1) Q3 2013 EBITDA for covenant EBITDA = EUR 146.9 + EUR 0.9 + calculation: direct operating profit EUR 1.0 + depreciations +/- non-cash and = EUR 148.8 million for rolling 12- exceptional items month period EUR million Cumulative EPRA
Slide 53: Illustrative calculation of equity ratio covenant using Q3 2013 financials
Illustrative calculation of equity ratio covenant using Q3 2013 financials1) Equity for covenant calculation: Equity = EUR 1,309.6 + EUR 0.0 total shareholders’ equity + - EUR 48.0 + EUR 21.8 subordinated debt - non-controlling = EUR 1,283.3 million as at 30 Sep interest +/- fair value of derivative
Slide 54: Citycon's major shopping centres
Citycon’s major shopping centres Iso Omena Myyrmanni Trio (incl. Hansa) 1977/87/2008 Lippulaiva Built 2001 1994/2007/2010 45.700 m2 1993 GLA 63.100 m2 39.700 m2 89.3% 19.000 m2 Ownership 60% 100% 100% Finland Koskikeskus Forum Columbus 1988 1953/91/2010 1997/07 34.300 m2 16,700 m2 21.000 m2 100% Cit
Slide 55: Contact information
Contact information INVESTOR RELATIONS Mr Marcel Kokkeel CEO Tel. +358 207 664 521 Marcel.Kokkeel@citycon.com Mr Eero Sihvonen Liljeholmstorget Galleria, Stockholm CFO, Executive Vice President Tel. +358 50 5579 137 Eero.Sihvonen@citycon.com Ms Henrica Ginström IR Manager Tel. +358 50 5544 296 Henri