Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — FY2012 Earnings Presentation
52 slides from Citycon Oyj's earnings presentation, 2013
Slide 1: Citycon Full Year 2012 Results
Citycon Full Year 2012 Results
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 - Creating Success for Retailing
Citycon - Creating Success for Retailing • Founded and listed in Helsinki Stock Exchange in 1988 • In 2012, Citycon’s shopping centres attracted more than 130 million customers, sales totalled more than EUR 2.1 billion • Invests in shopping centres in major growing cities with good demographics in N
Slide 4: Asset strategy
Asset strategy • High quality portfolio • urban locations • strong occupancy & footfall • strong development pipeline • “Safehaven” economics • GDP for 2013E 1) • Finland: 1.2% • Sweden: 1.8% • Denmark: 1.9% • Estonia: 3.5% • Lithuania: 3.3% • Euro zone average: 0.6% • Retail sales 20122): • Finland
Slide 5: Current Geographical Overview 2012
Current Geographical Overview 2012 FINLAND • A market leader • Net rental income EUR 98.2 million • 60.6% of total net rental income • Currently 23 shopping centres, 35 other Sweden (€m) Finland (€m) retail properties, one unbuilt lot 739.2 1,659.0 SWEDEN 63.1 24.6 143.2 98.2 • Net rental income acc
Slide 6: Business environment
Business environment 6 FY 2012
Slide 7: Business Environment
Business Environment CONSUMER CONFIDENCE 40,0 30,0 20,0 10,0 0,0 1.11.2008 1.11.2009 1.11.2010 1.11.2011 1.11.2012 1.3.2010 1.5.2011 1.1.2008 1.3.2008 1.5.2008 1.7.2008 1.9.2008 1.1.2009 1.3.2009 1.5.2009 1.7.2009 1.9.2009 1.1.2010 1.5.2010 1.7.2010 1.9.2010 1.1.2011 1.3.2011 1.7.2011 1.9.2011 1.1.2
Slide 8: Strong economic outlook in all current Citycon countries
Strong economic outlook in all current Citycon countries GDP growth Inflation 10 % 6% 8% 5% 4% Change, % 6% Change, % 3% 4% 2% 2% 1% 0% 0% Sw eden Finland Denmark Estonia Lithuania Euro zone -2 % Sw eden Finland Denmark Estonia Lithuania Euro zone 2011 2012 2013E 2014E 2011 2012 2013E 2014E Unemploy
Slide 9: Business Environment
Business Environment December unemployment rates RETAIL SALES, 2012 below the European average AND DECEMBER, 2012 (10.7%): Retail Sales CPI • FINLAND 7.7% • SWEDEN 8.1% • DENMARK 7.9% 7,0 • ESTONIA 9.5% (Oct 2012) • LITHUANIA 12.5% (Oct 2012) 4,4 3,9 2,4 2,3 In the real estate market, polarization t
Slide 10: Citycon Shopping Centres - Sales and Footfall
Citycon Shopping Centres - Sales and Footfall In all Citycon SC’s total sales : +6% total footfall : +3% LFL Shopping Centre Footfall LFL Shopping Centre Sales 120,0 8% 1800,0 12% 7% 7% 1600,0 100,0 10% 10% 6% 1400,0 80,0 5% 1200,0 8% Million Visitors Change, % Sales, MEUR 4% Change, % 1000,0 60,0 6
Slide 11: Highlights of 2012
y J Highlights of 2012 citycon 11
Slide 12: Summary of 2012 – Financial results
Summary of 2012 – Financial results Change- in EUR million Q4 2012 Q4 2011 Q3 2012 FY 2012 FY 2011 % Net Rental Income, 42.1 37.3 42.6 162.0 144.3 12.3 total NRI Finland 25.7 23.2 25.2 98.2 90.5 8.5 NRI Sweden 10.0 8.6 10.6 39.2 35.4 10.8 NRI Baltic Countries and 6.5 5.5 6.7 24.6 18.4 33.6 New Busin
Slide 13: Summary of 2012 – Operational results
Summary of 2012 – Operational results in EUR million FY 2012 Like-for-like NRI growth, total 4.9% L-f-l Shopping centre NRI growth 6.0% L-f-l supermarket s& shops NRI growth -0.6% Like-for-like sales in shopping centres, growth 4.0% Like-for-like footfall in shopping centres 2.0% Significant leasing
Slide 14: Summary of 2012
Summary of 2012 Refinancing • EUR 150 million unsecured domestic bond with a 5 year maturity • Credit facility of EUR 360 million, an average maturity of 5 years with a Nordic bank group • Rights issue of approx. EUR 90.7 million and 49 million new shares Business Improvements • Like-for-like NRI gr
Slide 15: Citycon Outlook 2013
Citycon Outlook 2013 EPRA Operating Profit, EURm EPRA Earnings, EURm €140.7 – 170 110 €78.9 – €155.7 €93.9 100 150 90 130 80 110 70 60 90 135,7 117,4 50 105,3 107,7 105,0 63,9 70 40 50,9 53,3 43,8 47,3 30 50 2008 2009 2010 2011 2012 2013E 2008 2009 2010 2011 2012 2013E EPRA Earnings Outlook Range EP
Slide 16: Kista Galleria
y J Kista Galleria citycon 16 ry20n
Slide 17: Kista Galleria at a glance
Kista Galleria at a glance Kista Galleria One of the largest shopping centres in Stockholm • GLA: ~90,000 m2 of leasable area, 60,000 m2 retail • Parking facility with 2,500 parking spaces • Visitors: 18.1 million (2011) Stockholm Modern, state-of-the-art facility • Built in 1977 • Redeveloped and e
Slide 18: Winning asset in its catchment area
Winning asset in its catchment area Perfect mix of mid-market brands that suit well to the demography Stockholm leading of Kista up-and-coming inhabitants and workers footfall in 2011 (m) • One of the largest shopping centres in Stockholm • Superior connectivity • Purchasing power in the catchment a
Slide 19: Transaction structure
Transaction structure Joint venture with CPPIB • 50/50 ownership with Canada Pension Plan Investment Board (''CPPIB''), representing their first investment in the Nordics region • The CPPIB Fund is €126 billion of which €13 billion (approx. 11%) is real estate • A key strategy for CPPIB in their joi
Slide 20: Investment rationale
Investment rationale Enhancement of Citycon's earnings quality and growth potential High quality asset addition to portfolio Increased exposure to attractive Swedish market Increased clustering of attractive Stockholm market High quality long term partner - CPPIB Improved retail space offering to te
Slide 21: (Re)development Project, Sustainability Achievements, Property Portfolio
(Re)development Project, Sustainability Achievements, Property Portfolio 21 FY 2012
Slide 22: Changes in the Property Portfolio
Changes in the Property Portfolio • Acquisitions in 2012 • Shopping centre Arabia, Helsinki (EUR 19.5 m) • Albertslund Centrum, Greater-Copenhagen, Denmark (tot. EUR 24 m) • Minorities in existing shopping centres: • Koskikeskus, Tampere, FIN (EUR 7.8 m) • Citytalo next to Galleria, Oulu, FIN (EUR 1
Slide 23: Redevelopments and extensions
(Re)development Projects in 2012 Property Area, Total Actual Expected Est. of Cumulative yield on (Pre-) sq.m. Estimated Completion Capex, by completion Leasing before New the end of when rate,% and after Investment, period, stabilized,% 1) Meur Meur Åkermyntan 8 500 6.9 6.7 6.9 93 Q2/ The redevelop
Slide 24: 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 project, but it is under planning. Property Project Net expected Target Target year of Additional information area, Citycon’s year of completion 1) sq.m. investment proje
Slide 25: Summary of Environmental Targets and Results in 2012
Summary of Environmental Targets and Results in 2012 Strategic objectives related to environmental responsibility Targets for 2012 Results of 2012 Climate Change In l-f-l shopping Reduction of greenhouse gas emission by 20 per cent by year 2020 2-3% centres: √ from the 2009 level -3.3 % Energy In l-
Slide 26: Property portfolio
Property portfolio 26 FY 2012
Slide 27: Key Figures - Property Portfolio
Key Figures - Property Portfolio • 3,846 (3,955) leases with an average length of 3.5 (3.4) years • GLA total was 1.000.270 m2 First time more than a million! • Rolling 12-month occupancy cost ratio for total like-for-like shopping centres was 8.9% • Rents linked to CPI (nearly all the agreements)
Slide 28: Key Figures - Property Portfolio
Key Figures - Property Portfolio TOTAL PORTFOLIO Q4/2012 Q4/2011 Q3/2012 2012 2011 Number of leases started 195 228 140 792 782 during the period Total area of leases 40,257 49,370 23,685 141,167 177,006 started, sq.m. 1) Average rent of leases 22.0 19.8 22.5 20.5 19.7 started (EUR/sq.m.) 1) Number
Slide 29: Property Portfolio
Property Portfolio Illustration of a typical lease agreement • Measured in fair value, like-for-like properties accounted for 71.7% of the total portfolio and of l-f-l portfolio 60.8% is in Finland and 71.3% of the total Finnish portfolio is included in l-f-l. Shopping centres represent 88.4% of the
Slide 30: Valuation Yield Development in the Portfolio
Valuation Yield Development in the Portfolio Fair value of investment properties EUR 2,714.2 million (2,522.1) • Total fair value gains EUR 23.6 million (EUR -35.3 million) • Fair value gain in shopping centres EUR 35.0 million • Fair value loss in super markets and shops EUR -11.5 million Yield req
Slide 31: Key Figures and Financing
Key Figures and Financing 31 FY 2012
Slide 32: Snapshot of Statement of Comprehensive Income
Snapshot of Statement of Comprehensive Income EUR million Q4/2012 Q4/2011 2012 2011 Gross rental income 58.5 53.0 225.9 206.0 Service charge income 3.6 3.0 13.3 11.1 Turnover 62.1 56.0 239.2 217.1 Property operating expenses 20.1 18.4 75.8 71.6 Other expenses from leasing operations -0.1 0.3 1.4 1.2
Slide 33: NRI Growth by Segments and Portfolios
NRI Growth by Segments and Portfolios Baltic Countries& New EUR million Finland Sweden Business Other Total TURNOVER 2010 86,7 28,7 11,8 0,0 127,2 195,9 Acquisitions 0,1 0,8 6,0 - 7,0 10,3 (Re)development projects 4,2 1,4 -0,3 - 5,3 6,5 Divestments 0,1 -0,9 - - -0,8 -1,8 Like-for-like properties -0,
Slide 34: Snapshot of Statement of Financial Position
Snapshot of Statement of Financial Position Statement of Financial Position, EUR million 31 Dec 2012 31 Dec 2011 Investment property 2,714.2 2,522.1 Total non-current assets 2,737.6 2,540.1 Current assets 75.5 125.0 Assets total 2,818.5 2,677.7 Total shareholder’s equity 1,059.9 961.8 Total liabilit
Slide 35: Cash Flow Statement
Cash Flow Statement • Strong cash generated from operations, which A Q1-Q4 Q1-Q4 increased by 16 % from 120.5M€ to 147.0M€ due EUR MILLION 2012 2011 to clear improvement in EPRA Earnings. Higher direct operating profit which improved the cash Operating activities flow was mainly due to contribution
Slide 36: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives EUR 1,538.8 m 1) Loans (EUR 1,538.8 m) Fixed derivatives (EUR 1,021.7m) Floating rate debt Undrawn loan facilities (EUR 217m) 11% Fixed rate debt 23% Convertible Bonds (EUR 39.8m) Fixed ra
Slide 37: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of fixed and floating rate loans Average fixed rate of debt and swaps1) and undrawn committed credit limits Fixed (EUR 351.5m) Floating (EUR 1,187.2m) Undrawn credits (EUR 217.4m) Convertible Bonds (EUR 39.8m) • Main maturities in 2013 is the EUR 39.
Slide 38: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,538.8 m 1) EUR 1,538.8 m 1) LTL 1% Bilateral term loans 26% Syndicated term loans 40% EUR 62% SEK 38% Other 7% CP 2% Revolving credit facility 10% Bonds 15% • Sufficient liquidity buffer – Citycon’s unused committed cred
Slide 39: Key Figures – Interest Rates and LTV
Key Figures – Interest Rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) • Interest rates feed through the income statement with a certain lag and Citycon’s average interest rate for the twelve-month period ended 31 December 2012 increased slightly to 4.07 per cent (Q3‘1
Slide 40: Share Performance and Volume
200000 400000 600000 800000 0 1000000 1200000 1400000 1600000 1800000 40 2.1.2012 10.1.2012 18.1.2012 26.1.2012 3.2.2012 13.2.2012 21.2.2012 29.2.2012 8.3.2012 16.3.2012 26.3.2012 3.4.2012 13.4.2012 23.4.2012 2.5.2012 10.5.2012 21.5.2012 29.5.2012 6.6.2012 14.6.2012 FY 2012 Citycon share volume 25.6
Slide 41: Ownership
Ownership • Established and listed on the Helsinki Stock Exchange since 1988 Shareholders • 31 Dec 2012 market cap EUR 840.1 m Domestic International • Number of domestic shareholders increased: total 7,177 (4,276) registered shareholders, 23.3% (17.1%) of total 23,30% • Largest Shareholders: • Gazi
Slide 42: Back up information
Back up information 42 FY 2012
Slide 43: Albertslund Centrum – Entry to Denmark
Albertslund Centrum – Entry to Denmark • Citycon acquired Albertslund Centrum from Albertslund Municipality for DKK 181 million (approx. EUR 24 million) • On the acquisition date, the net initial yield on the investment is approximately 7.5 per cent • Albertslund shopping centre is an urban communit
Slide 44: Property Facts
Property Facts Built 1965 GLA (existing/ future grocery 16 000/4 000 extension) GLA total 20 000 17km Parking places 960/300 (existing/future grocery extension) No. of shops 45 Retail anchors Superbest, Aldi, Danske Bank, Albertslund Apotek, Fona Occupancy (economical) 97.5% Albertslund Copenhagen D
Slide 45: Lease expiry profile
Lease expiry profile Average remaining length: 3.5 yrs 45 FY 2012
Slide 46: Financial Expenses Analysis
Financial Expenses Analysis Q4 Q3 Q2 Q1 Q4 Change- Change- YTD YTD Change- Net Financial Expenses (EUR million) 2012 2012 2012 2012 2011 % (y-o-y) % (q-o-q) 2012 2011 % (YTD) Financial Expenses: Interest expenses -16,0 -16,2 -15,6 -15,4 -15,5 3% -1 % -63,2 -58,5 8% Foreign exchange gains(+)/ losses(
Slide 47: Net Financial Expenses Q3 2012 vs Q4 2012
Net Financial Expenses Q3 2012 vs Q4 2012 EUR million • Net Interest expenses decreased by 0.3 M€ from the previous quarter partially due to lower debt as the funds raised in the equity issue was used to repay debt in November and slightly weaker SEK. • Fees decreased by 0.3 M€ due to extra-ordinary
Slide 48: Illustrative Calculation of ICR Covenant Using Q4 2012 Financials
Illustrative Calculation of ICR Covenant Using Q4 2012 Financials* Q4 2012 EBITDA for covenant EBITDA = EUR 135.7 + EUR 1.2 + calculation: direct operating profit EUR 1.5 + depreciations +/- non-cash and = EUR 138.4 million for rolling 12- exceptional items month period EUR million Q4 Q3 Q2 Q1 Cumul
Slide 49: Illustrative Calculation of Equity Ratio Covenant Using Q4 2012 Financials
Illustrative Calculation of Equity Ratio Covenant Using Q4 2012 Financials* Equity for covenant calculation: Equity = EUR 1,059.9 + EUR 39.1 – total shareholders’ equity + EUR 44.2 + EUR 57.1 subordinated debt – non- = EUR 1,111.9 million as at 31 controlling interest +/– fair value of December 2012
Slide 50: Citycon in Brief - Background
Citycon in Brief - Background Citycon’s 25 years! 1988 2005 2009 Quoted on the Main List of Helsinki Citycon enters foreign markets • Trio gets the first LEED- certificate in the Stock Exchange Office portfolio by acquiring its first properties in Nordic Countries Sweden and Estonia • Sells non-
Slide 51: 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 60.500 m2 45.700 m2 89.3 % 18.500 m2 Ownership 60 % 100 % 100 % Finland Koskikeskus Forum Columbus 1988 1953/91/2010 1997/07 27.700 m2 22,000 m2 21.000 m2 100
Slide 52: Contact Information
Contact Information INVESTOR RELATIONS Mr Marcel Kokkeel CEO Tel. +358 207 664 521 Marcel.Kokkeel@citycon.fi Mr Eero Sihvonen CFO, Executive Vice President Tel. +358 50 5579 137 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola Vice President, IR and Communications Tel. +358 40 5666 070 Hanna.Jaakkola@city