Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Investor Day (September 2008)
105 slides from Citycon Oyj's investor day presentation, Sep 3, 2008
Slide 1: Capital Markets Day
Capital Markets Day Stockholm, 3 September 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: Agenda
Agenda 9.00 Opening and Welcoming Words Hanna Jaakkola, IRO 9.05 Citycon in European Context – Thoughts of the Chairman of the Board Thomas W. Wernink, Chairman of the Board of Directors 9.20 Citycon Today Petri Olkinuora, CEO 9.40 Citycon’s Financial Position Eero Sihvonen, CFO 10.00 Coffee Break 1
Slide 4: Citycon in European Context – Thoughts of the Chairman of the Board
Citycon in European Context – Thoughts of the Chairman of the Board Thomas W. Wernink, Chairman of the Board of Directors 4
Slide 5: 5
5
Slide 6: Citycon Today
Citycon Today Petri Olkinuora, CEO 6
Slide 7: Highlights – Goals and Focus
Highlights – Goals and Focus Goals Growth, mainly organic Strategic focus Retail properties only Geographical focus Growth centres, capitals in the Baltic Countries Sustainability Position Market leader in Finland Strong position in Sweden Growing in the Baltic Countries Strong operati
Slide 8: Geographical Overview
Geographical Overview 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 – Large
Slide 9: Business Environment
CITYCON Business Environment
Slide 10: Business Environment
Business Environment GDP Private Consumption Source: Nordea 10
Slide 11: Business Environment
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 12: Business Environment
Business Environment ■ The spread in yield requirements between prime and other properties increased clearly not only in Retail Sales and CPI, July 08 the Baltic countries but also in Finland and Sweden (source: Jones Lang LaSalle). 16,5 11.0% 11,5 9.6% ■ Construction costs are growing, but not as r
Slide 13: Sustainable Approach
CITYCON Sustainable Approach
Slide 14: Sustainable Shopping Centre – What and Why?
Sustainable Shopping Centre – What and Why? ■ Energy and material costs will increase in the future ■ Legislation will get tighter ■ Consumers will be more aware of green products and services ■ Investors will put more value to good ESG (environmental, social and corporate governance) ■ Safety / sec
Slide 15: Property Portfolio
Property Portfolio Largest Shopping Centres 15
Slide 16: Largest Shopping Centres
Largest Shopping Centres Lippulaiva Myyrmanni Trio Built 1993 1994 1977/87 GLA 23.000 m2 40.200 m2 32.200 m2 Owned 100 % Finland 100 % 89.3 % Iso Omena Forum 2001 Koskikeskus Columbus 1953/91 61.300 m2 1988 1997/07 17.400 m2 100 % 25.700 m2 20.400 m2 88 % Citycon 69 % 100 % Jakobsberg Åkersberga 195
Slide 17: Largest Shopping Centres by Value
Largest Shopping Centres by Value 1. Iso Omena, Espoo, Finland 2. Myyrmanni, Vantaa, Finland 3. Trio, Lahti, Finland 4. Jakobsberg, Järfälla, Sweden 5. Koskikeskus, Tampere, Finland 6. Columbus, Helsinki, Finland 7. Liljeholmen, Stockholm, Sweden 8. Rocca Al Mare, Tallinn, Estonia 9. Tumba Centrum,
Slide 18: Shopping Centre Performance
Shopping Centre Performance Monthly Sales in Finnish Citycon Shopping Centres, 2008 *) 120 m€ 10 % ■ Shopping centre sales in 8% Finland have increased in 100 m€ 6% 2008. 4% ■ Shopping centre sales over all Sales, m€ 80 m€ 2% in Sweden have been flat 60 m€ 0% compared to 2007. The larger -2 % centre
Slide 19: Valuation Yield Development in the Portfolio
Valuation Yield Development in the Portfolio % 7,5 7 6,5 Finland Sweden 6 The Baltic Countries Total 5,5 5 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Valuation yield above is based on external valuator’s portfolio valuation. The company adapted the country organisation during Q3 2006. 1
Slide 20: Citycon’s Shopping Centres
Citycon’s Shopping Centres Iso Omena, Espoo 60 600m2 Sales 2007: 212.2 EUR million Visitors 2007: 8.4 million 20
Slide 21: Iso Omena “The Big Apple”
Iso Omena “The Big Apple” Key Figures Opening year 2001 Citycon acquired in September 2007 shopping Leasable area, m2 61,300 centre Iso Omena from Doughty Hanson for of which retail premises, m2 49,000 appr. EUR 329 million; net initial yield 4.5%. Gross floor area, m2 138,458 The company sold 4
Slide 22: Citycon’s Shopping Centres
Citycon’s Shopping Centres Heikintori, Espoo 40 years 2008 9 500 m2 Sales 2007: 27.0 EUR million 22 Visitors 2007: 2.2 million
Slide 23: Citycon’s Shopping Centres
Citycon’s Shopping Centres Jakobsbergs Centrum, Järfälla 67 500 m2 Sales 2007: 67.3 EUR million 23 Visitors 2007: 5.5 million
Slide 24: Citycon’s Shopping Centres
Citycon’s Shopping Centres Strömpilen, Umeå 27 000 m2 Sales 2007: 88.6 million 24
Slide 25: Citycon’s Shopping Centres
Citycon’s Shopping Centres Magistral, Tallinn 9 500 m2 Sales 2007: 17.7 EUR million 25 Visitors 2007: 3.5 million
Slide 26: Property Portfolio (Re)development Projects
Property Portfolio (Re)development Projects 26
Slide 27: Development and Redevelopment Projects
Development and Redevelopment Projects On-going projects, 30 June 2008 27
Slide 28: 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 29: 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
Slide 30: Citycon’s Financial Position
Citycon’s Financial Position Eero Sihvonen, CFO 30
Slide 31: Targets and Highlights
CITYCON Targets and Highlights
Slide 32: Financial Targets
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 number of shar
Slide 33: Q2 Highlights
Q2 Highlights ■ Net cash from operating activities per share EUR 0.06 (EUR 0.06) and EPRA EPS EUR 0.04 (EUR 0.04), EPRA NAV EUR 4.46 (EUR 4.70) ■ Net rental income grew by 2.7% to EUR 30.5 million compared to Q1 (Q1/2008: EUR 29.7 m) o Net rental income for like-for-like properties grew 0.3% ■ Valua
Slide 34: Property Portfolio
CITYCON Property Portfolio
Slide 35: Property Portfolio
Property Portfolio ■ 3,662 (3,415) leases with an average length of 2.8 (2.9) years ■ Net rental income increased by 22.7% to EUR 60.1 million ■ Net rental income for like-for-like properties grew by 0.3% Like-for-like property = held by Citycon 24 months, excl. development projects and lots. Cityco
Slide 36: Property Portfolio
Property Portfolio ■ Annualised rental value for the portfolio was EUR 176.5 m Breakdown of property portfolio Includes annualised gross rent based on valid rent roll on the 30th June, market rent of vacant premises and rental income from turnover-based 5.0 % contracts and possible other rental inco
Slide 37: Figures and Financing
CITYCON Figures and Financing
Slide 38: Income Statement - Snapshot
Income Statement - Snapshot 38
Slide 39: Figures – Profitability
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 % mar
Slide 40: Balance Sheet – Snapshot, Key Figures
Balance Sheet – Snapshot, Key Figures 40
Slide 41: Financing Overview
Financing Overview ■ During second quarter in 2008, the period-end interest-bearing net debt was increased by EUR 56 million (and was EUR 1,205.3 million) as a result of dividend payment and investments into development projects ■ Conservative financing policy continues; ■ Average loan maturity was
Slide 42: Financing Overview
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% ■ Period-end interest rate wa
Slide 43: Financing Overview
Financing Overview 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 term and
Slide 44: Financing Overview
Financing Overview Maturity profile of fixed and floating rate loans and undrawn committed credit limits Fixed (EUR 321.6m) ■ Bulk of Citycon’s debt is due on Floating (EUR 907.6m) or after 2013 Undrawn credits (EUR 325.6m) ■ Current available committed undrawn credits are also of long term nature a
Slide 45: Share and Ownership
CITYCON Share and Ownership
Slide 46: Share Performance
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 46 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on 3 January 2007 have been rebased to Citycon
Slide 47: Ownership
Ownership Market capitalisation totalled EUR 575 million as of 28 August 2008 Breakdown of shareholders 95.7% of shareholders are international as of 31 July, 2007 4.30 % 1984 registered shareholders 95.70 % Largest Share holders Gazit –Globe ~39.35% Perennial Investment Partners Ltd >5% IN
Slide 48: Thank You!
CITYCON Thank You!
Slide 49: Latest from Finland: Commercial Development – Method of Value Creation
Latest from Finland Commercial Development – Method of Value Creation Kaisa Vuorio, Vice President, Finnish Operations Pekka Helin, Commercial Director, Finnish Operations 49
Slide 50: Success Factors in Shopping Centre Management
Success Factors in Shopping Centre Management Commercial idea ■ Business insight and proper market positioning Managing Creating tenant are the basis for successful customer loyalty commercial idea mix ■ Proper tenant mix is based on retail knowledge Managing average Creating ■ Retail categories pur
Slide 51: Understanding the World of Shopping
Understanding the World of Shopping ■ Shopping is gradually Trends becoming a fragmented idea which is affected by ■ Needs to be fulfilled ■ Time available ■ Convenience factors Shopping is an ■ Diverse shopper behaviour economic as patterns have an impact on well as a how consumers choose the leisu
Slide 52: Retailers Want to Outsource Location Management
Retailers Want to Outsource Location Management Real estate competence Efficient daily operations Retail e.g. maintenance Retailer competence and marketing Consumer understanding 52
Slide 53: Shopping Centre Clusters – Improving Efficiency
Shopping Centre Clusters – Improving Efficiency ■ Clusters emerge from similarities in ■ Reasons to visit a centre ■ Customers’ behaviour in a centre ■ Catchment areas of centres ■ Requirements for offering ■ Help to position a centre in the market ■ Basic arguments and criteria for positioning ■ Co
Slide 54: Cluster Strategy Elements
Cluster Strategy Elements Portfolio management Citycon brand Retail mix image Shopping Centre Clusters Maintenance Marketing 54
Slide 55: Meeting points of City Centres
Meeting points of City Centres Pleasure. Passing the time. Through-passage. A Place to be. Captures the moment. Happenings. Roothless. Feel of freedom. Pulse. Continuous movement. Busy. 55
Slide 56: Local Centres
Local Centres Centre of the local community. Family-oriented. Planned shopping. One knows what the centre offers. Safe and secure, but not boring. Strong relationship to the neighbourhood. 56
Slide 57: Partners in Everyday Life Centres
Partners in Everyday Life Centres Pragmatic. Fast Shopping. Removes Stress. No special locality. Straightforward. Keeps it’s promises. 57
Slide 58: Clusters Are Citycon’s Core Competence
Clusters Are Citycon’s Core Competence – Concepts That Are Managed in A Common Way Market 1 Market 2 Market 3 58
Slide 59: Clusters and Strong Commercial Concept Form a Solid Basis
Clusters and Strong Commercial Concept Form a Solid Basis Successful Shopping Centre Development Commercial and operational planning Market and Technical competition execution analysis Cluster Commercial idea/ concept Communications Leasing and marketing 59
Slide 60: Thank You!
CITYCON THANK YOU! Beh” AP Le ae eo to
Slide 61: What is Happening in the Baltic Countries? How about Russia?
What is Happening in the Baltic Countries? How about Russia? Harri Holmström, Vice President, Baltic Operations 61
Slide 62: Citycon’s Geography
Citycon’s Geography The Baltic Countries Area: 175 000 km² Population: 7.5 million 62
Slide 63: Before
Before 63
Slide 64: Retail Market in the Region – Historical Cornerstones
Retail Market in the Region – Historical Cornerstones ■ Development in 1990 began from zero. Open markets were the leading retail format. ■ Culture of department stores was already developed and it was a cornerstone for future shopping center culture. ■ First hypermarket in Baltics was opened in Tal
Slide 65: After
After 65
Slide 66: Citycon in the Baltic Countries
Citycon in the Baltic Countries 66
Slide 67: Citycon in the Baltic Countries
Citycon in the Baltic Countries 67
Slide 68: Citycon in the Baltic Countries
Citycon in the Baltic Countries 68
Slide 69: Citycon in the Baltic Countries
Citycon in the Baltic Countries 69
Slide 70: Rocca Al Mare - Commercial Concept
Rocca Al Mare - Commercial Concept 70
Slide 71: Construction and Development
Construction and Development Phase I – October 2008 Prisma, home and children area Phase 2 – May 2009 Fashion area, sport and leisure Phase 3 – November 2009 Restaurants, health and beauty 71
Slide 72: Slide 72
Slide 73: Present Situation
Present Situation ■ Citycon has established its presence in the Baltic Countries with three shopping centres: Rocca al Mare and Magistral in Tallinn and Mandarinas in Vilnius. ■ After Rocca extension Citycon will be the market leader in Tallinn with approx. 25% market share in major shopping centres
Slide 74: Customers and Retail Markets
Customers and Retail Markets ■ Local and international retailers reported extensive growth (20–50%) figures during 2007, but now there is a clear slow down. ■ The demand for retail space is still good and the vacancy rates are close to zero. ■ The rental levels are on sustainable level compared to s
Slide 75: Property Investors in the Baltic Countries
Property Investors in the Baltic Countries ■ Considerably less international investors than last year. Most active are the German funds which are still looking for investments rather aggressively. ■ The yield compression has stopped and the yields are going up, however no comparables to confirm that
Slide 76: Thank You!
Se. AL MARE Thank You!
Slide 77: Citycon in Sweden – Case Liljeholmstorget
Citycon in Sweden – Case Liljeholmstorget Ulf Attebrant, Vice President, Swedish Operations 77
Slide 78: Swedish Shopping
SWEDISH SHOPPING 78
Slide 79: Citycon in Sweden
Citycon in Sweden 79
Slide 80: Citycon’s Swedish shopping centres
JAKOBSBERG STRÖMPILEN ÅKERSBERGA CENTRUM ÅKERMYNTAN TUMBA STENUNGSTORG CENTRUM CENTRUM CENTRUM FRUÄNGENS LILJEHOLMSTORGET CENTRUM GALLERIA 80 4
Slide 81: Project Plan
Project Plan Development Projects Investment 2008 2009 2010 2011 2012 Liljeholmstorget € 117.4 M Åkersberga Centrum € 51.4 M Tumba Centrum (phase 1) € 10.4 M Project under planning Stenungstorg € 24.4 M Tumba Centrum (phase 2) € 29 M Strömpilen € 55 M 81 4
Slide 82: 182
182
Slide 83: One of Stockholm’s fastest growing residential areas
One of Stockholm’s fastest growing residential areas. Around 100,000 people are expected to live in Liljeholmen in 2015, a 25 per cent increase. 83
Slide 84: A new part of the city
A new part of City theshopping in Liljeholmen city 84
Slide 85: En ny stadsdel
En ny stadsdel 85
Slide 86: Stockholm development areas
Hjorthagen Norra station Värtahamnen Västra Kungsholmen Lilla Essingen Danviks lösen Liljeholmen Liljeholmskajen / Årstadal Hammarby sjöstad 87
Slide 87: Location
Location Liljeholmen Ringen Sickla Bredäng Globen Fruängen shopping Skärholmen Hagsätra Högdalen Kungens Kurva Farsta Centrum 88
Slide 88: Digital datakälla: Cartesia och Centrumutveckling
Digital datakälla: Cartesia och Centrumutveckling 89
Slide 89: Communications
Communications Under Bus ground Tram Acess to motorway E4 Essingeleden bicycle and pedestrain road Garage 91
Slide 90: 93
93
Slide 91: 2nd floor
2nd floor 7 94
Slide 92: 2nd floor
INT ORTE NT a ORIE on sed
Slide 93: 3d floor
3d floor • 8 96
Slide 94: 3d floor
3d floor • 8 97
Slide 95: 1st floor
1st floor • 9 98
Slide 96: 1st floor
1st floor • 9 99
Slide 97: Floors
Floors 100
Slide 98: Garage
Garage • 6 101
Slide 99: Time schedule
Time schedule Feb March May Feb May Oct Q1 2007 2007 2007 2007 2008 2009 2010 102
Slide 100: Brands
a Rad SYSTEM BOLAGET ata | = ‘ | c Re | aa
Slide 101: Pilot project for LEED - environmental certification
Pilot project for LEED - environmental certification 104
Slide 102: TORGET“"™
TORGET“"™ “2 =
Slide 103: Welcome in October 2009
WELCOME IN OCTOBER 2009 • 18 106
Slide 104: Questions & Answers
CITYCON Questions & Answers 108
Slide 105: Thank you!
Thank you! Citycon Oyj Pohjoisesplanadi 35 AB FIN-00100 Helsinki Tel. +358 9 680 36 70 info@citycon.fi www.citycon.fi e-mail: firstname.lastname@citycon.fi 109