Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q3 2009 Earnings Presentation
51 slides from Citycon Oyj's earnings presentation, 2009
Slide 1: Citycon Presentation Q3 2009
Citycon Presentation Q3 2009
Slide 2: Contents
Contents Strategy Main points and financial overview Business environment (Re)development projects Property portfolio Key figures Financing overview Backup information 2 Q3 2009
Slide 3: Strategy
Strategy • Leading owner, operator and developer of shopping centres in growing cities in Finland, Sweden and the Baltic countries. • In-house shopping centre management, leasing, commercial concept creation, market research and development expertise. • Priority in sustainable shopping centre manage
Slide 4: Financial targets
Financial targets Continued expansion through property development and selective acquisitions Cumulative CAPEX since 2005 in excess of EUR 1.5 billion GROWTH Main emphasis on organic growth Solid distribution policy Payout target 50 % of the result for the period after DIVIDENDS taxes excl. fair
Slide 5: Geographical overview
Geographical overview FINLAND • 73.9% of total net rental income in Q3 2009 • Net rental income growth of 1.6% to EUR 69.4 million Sweden (€m) Finland (€m) • Market leader with 24% market share; 22 1,449.7 shopping centers and 42 other retail 551.0 98.5 95.0 properties 69.4 28.7 27.8 17.2 SWEDEN MV
Slide 6: Main points
Main points Q3 2009 (vs. Q2 2009) • The fair value change was EUR -1.2 million (EUR 26.0 m) and the market value of property portfolio was EUR 2,162.7million (EUR 2,104.5 m) • The valuation yield 6.6% (6.6%) by external appraiser • Net rental income was EUR 32.5 million (EUR 31.0 m) • Direct result
Slide 7: Financing overview
Financing overview • Total asset stood at EUR 2,207.4 million • Refinancing not an issue – total liquidity of EUR 212.6 million incl. unutilized committed debt facilities (EUR 193.2m) and cash (EUR 19.4 m) Covers committed development pipeline and repayments at least until 2010 without other finan
Slide 8: Business environment
Business environment 8 Q3 2009
Slide 9: Business environment
Business environment GDP PRIVATE CONSUMPTION 12,4% 8,9% 7,1% 7,9% 4,1% 2,5% 2,8% 4,7% 2,6% 3,0% 3,2% 3,0% 1,9% 2,5% 0,8% 1,2% -0,2% -0,9% -0,2% Finland Sweden Estonia Lithuania Finland -0,7% Sweden Estonia Lithuania -2,5% -1,0% -4,0% -3,8% -5,0% -4,5% -4,2% -6,0% -16,0% -14,0% -17,0% -16,0% 2007A 20
Slide 10: Business environment
Business environment CONSUMER CONFIDENCE 30,0 20,0 10,0 0,0 1.10.2007 1.1.2008 1.4.2008 1.7.2008 1.10.2008 1.1.2009 1.4.2009 1.7.2009 -10,0 Finland Sweden -20,0 Estonia Lithuania euro zone -30,0 -40,0 -50,0 -60,0 Source: Eurostat 10 Consumer confidence indicator is conducted as an interview survey.
Slide 11: Business environment
Business environment PROPERTY MARKET 1) RETAIL AND GROCERY SALES, CPI, AUG 09 Occupancy rates in shopping centres continue to be high both in Finland and in Sweden. The Retail sales Grocery sales CPI steepest fall in occupancy rates was experienced in space-intensive large retail units that do not 5
Slide 12: (Re)development projects
(Re)development projects 12 Q3 2009
Slide 13: Sustainable shopping centre – why and how?
Sustainable shopping centre –why and how? WHY? OUR ACTIONS • Energy and material costs will increase in the 1. Internal Green Shopping Centre Management future Programme to foster sustainable development in • Legislation will get tighter all Citycon shopping centres. Goals: • Consumers will be more
Slide 14: Ongoing (re)development projects: Åkersberga Centrum
Ongoing (re)development projects ÅKERSBERGA CENTRUM Refurbishment and extension of existing shopping centre in Greater-Stockholm area, north east of the city. Shopping centre is located in the centre of affluent Österåker municipality and has very good public transportation. Originally build 1985 an
Slide 15: Ongoing (re)development projects: Liljeholmstorget
Ongoing (re)development projects LILJEHOLMSTORGET Pilot project in sustainable construction. Construction of a new shopping centre south west of Stockholm city centre. Location is the major traffic hub, the whole area is being redeveloped Into attractive residential neighborhood. Existing building i
Slide 16: Liljeholmstorget - Stockholm shopping centers
Liljeholmstorget - Stockholm shopping centers Liljeholmstorget 16 Source: Centrumutveckling AB Q3 2009
Slide 17: Ongoing (re)development projects: Rocca al Mare
Ongoing (re)development projects ROCCA AL MARE Pilot project in sustainable construction. Extension and redevelopment of existing shopping centre west of Tallinn city centre. After the project Rocca al Mare will be the largest centres in Estonia, large and affluent catchment area. Originally built i
Slide 18: Completed (re)development projects: Trio
Completed (re)development projects TRIO Trio was awarded the first LEED® (Leadership in Energy and Environmental Design) environmental certificate in the Nordic countries. The project included a total redevelopment of Trio, Lahti downtown shopping centre. The most important shopping venue in its lar
Slide 19: (Re)development projects under planning
(Re)development projects under planning FUTURE POTENTIAL: • Most of Citycon’s shopping centres offer extension and (re)development possibilities Organic growth potential without new acquisitions Citycon knows the possibilities: properties, tenants, catchment areas, local authorities Improving
Slide 20: Property portfolio
Property portfolio 20 Q3 2009
Slide 21: Property portfolio
Property portfolio • 4,033 (3,647) leases with an average length of 3.0 (3.0) years • GLA totalled 944,300 m2 • Net rental income increased by 2.4% to EUR 93.8 million • without the weakened Swedish krona, NRI would have increased by 5.1% • Net rental income for like-for-like properties grew by 0.5%
Slide 22: Property portfolio
Property portfolio RENTAL CONTRACTS ILLUSTRATION OF A TYPICAL LEASE AGREEMENT • Major tenants largest grocery retailer in Nordics also fashion tenants and local discount department stores are important. • Largest tenant Finnish retailer Kesko with 24.9%of GRI end of September 2009 • Five largest tot
Slide 23: Valuation yield development in the portfolio
Valuation yield development in the portfolio % 8,5 8 7,5 7 Finland Finland excl. Iso Omena Sweden 6,5 The Baltic Countries Total 6 5,5 5 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Valuation yield above is based on external valuator’s portfolio val
Slide 24: Sales and footfall, Jan-Sept 2009
Sales and footfall, Jan-Sept 2009 Accumulative shopping centre footfall, Jan-Sept 2009 Accumulative shopping centre sales, Jan-Sept 2009 70 12,0 % 1 000 12,9 % 14,0 % 9,3 % 60 900 8,0 % 10,0 % 800 50 6,0 % 4,0 % 700 Footfall, million 40 600 0,4 % 2,0 % 0,0 % -1,3 % Change -1,8 % -2,3 % 500 MEUR Chan
Slide 25: Shopping centre rental income by branches
Shopping centre rental income by branches 2% 9% 23 % Groceries 7% Clothes & Fashion Leisure & Home Supplies 8% Department Stores Cafes & Restaurants Health & Beauty 10 % Other Specialty Stores 23 % Services & Offices 18 % 25 Q3 2009
Slide 26: Property portfolio
Property portfolio TOTAL PORTFOLIO Q3 2009 Q3 2008 Q2 2009 2008 Net rental income, EUR million 32.5 31.5 31.0 121.8 Number of leases started 1) 140 81 219 572 during the period 2 Total area of leases started, m 23,789 12,810 32,511 124,960 Occupancy rate at end of the 94.7 95.6 94.8 96.0 period ,% A
Slide 27: Sales area by branch for each cluster
Sales area by branch for each cluster Citycon has classified the Finnish shopping centres into three cluster according to their role in a consumer’s life. 27 Q3 2009
Slide 28: Business Environment
Business Environment 28 Q3 2009
Slide 29: Key figures
Key figures 29 Q3 2009
Slide 30: Snapshot of statement of comprehensive income
Snapshot of statement of comprehensive income EUR million Q1-Q3 2009 Q1-Q3 2008 2008 Gross rental income 132.6 129.2 173.0 Service charge income 4.8 3.9 5.3 Turnover 137.4 133.1 178.3 Property operating expenses 43.2 41.4 56.3 Other expenses from leasing operations 0.4 0.1 0.2 Net rental income 93.8
Slide 31: Key Figures – profitability
Key Figures – profitability Rolling 12-month Direct Result (EUR million) Rolling 12-month Direct Result per Share (EUR/ share) 22,7 50,2 21,5 21,0 46,6 47,3 20,6 20,5 45,0 20,2 20,0 44,2 43,8 19,3 41,9 38,3 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3
Slide 32: Key Figures – profitability
Key Figures – profitability Quarterly Net Rental Income by segments Quarterly Operating Profit1) by segments 40,0 40,0 Fi nl a nd Sweden Fi nl a nd Sweden Ba l tics Other 35,0 Ba l tics Other 35,0 28,6 32,5 CAGR +15.9 % 30,5 31,5 31,0 CAGR +17.2% 27,1 30,2 30,3 27,6 29,7 30,0 25,9 26,0 25,6 25,7 30,
Slide 33: Snapshot of statement of financial position
Snapshot of statement of financial position Statement of Financial Position, EUR million 30 Sept. 2009 30 Sept. 2008 31 Dec 2008 Investment property 2,162.7 2,184.8 2,111.6 Total non-current assets 2,173.3 2,194.1 2,126.1 Current assets 34.1 44.2 52.4 Assets total 2,207.4 2,238.3 2,178.5 Total share
Slide 34: Consolidated cash flow statement Jan – Sep 2009
Consolidated cash flow statement Jan – Sep 2009 EUR MILLION 3Q2009 3Q2008 • Cash flows from operations improved by 70% due to: Operating activities • Improved cash generation through higher direct Profit before taxes -13,1 -121,4 result Adjustments 94,9 201,5 Change in working capital 6,7 -5,2 • Wor
Slide 35: Key Figures – financing overview
Key Figures – financing overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives EUR 1,291.6 million 1) 500 474 Loans (EUR 1,291.6m) Floating rate debt 450 Fixed derivatives (EUR 714.8m) 413 22% Fixed rate debt 400 23% 350 Convertible Bonds 300 (EUR 76.5m) 267 Capital
Slide 36: Key Figures – financing overview
Key Figures – financing overview Maturity profile of fixed and floating rate loans and Period-end interest rate by maturity for fixed rate debt undrawn committed credit limits and swaps 450 6,0 % Fixed (EUR 290.0m) 396 5,24 % 400 Average 4.01% Floating (EUR 1,001.6m) 5,0 % 350 4,31 % Undrawn credits
Slide 37: Key Figures - debt portfolio
Key Figures - debt portfolio Breakdown by debt type Breakdown by currency EUR 1,291.6 million 1) EUR 1,291.6 million 1) Other LTL 1% 22% Syndicated term loans EEK 4% 46% EUR 59% CP SEK 1% 36% Revolving credit facility 20% Bonds 11% • The backbone of the debt financing continues to be the syndicated
Slide 38: Key Figures – interest rates and LTV
Key Figures – interest rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) 5,50 % 1 300 1 272,3 70 % 1 221,1 1 234,8 1 205,3 1 194,61 191,3 5,00 % 1 184,3 1 200 1 147,31 149,4 60 % 4,50 % 1 100 4,00 % 50 % 3,50 % 1 000 40 % 3,00 % 900 878,2 863,3 2,50 % 811,2 30 % 800 783,
Slide 39: Breakdown of financial expenses
Breakdown of financial expenses 3q 2q 3q Change-% Change-% YTD YTD Change-% Net Financial Expenses (EUR million) 2009 2009 2008 (y-o-y) (q-o-q) 2009 2008 (YTD) Financial Expenses: Interest expenses -11,5 -11,3 -13,8 -17 % 1% -34,3 -40,5 -15 % Foreign exchange losses 0,0 0,0 -0,1 -121 % nm 0,0 0,0 nm
Slide 40: Net financial expenses Q2 2009 vs Q3 2009
Net financial expenses Q2 2009 vs Q3 2009 14 0,2 0,3 -0,6 0,0 12 11,8 11,7 10 8 6 4 2 0 2Q2009 Net interest Fees Derivative Other 3Q2009 valuation 40 Q3 2009
Slide 41: Share performance
Share performance1) 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00 FTSE EPRA Nasdaq OMX Helsinki CAP Citycon 41 Q3 2009 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on 3 January 2006 have been rebased to Citycon share price at EUR 3.03
Slide 42: Ownership
Ownership SHAREHOLDERS • End of September market capitalization totaled EUR 665 million 9.2 % • 90.8% of shareholders international • Number of domestic owners increased • 3383 registered shareholders • Largest Shareholders: • Gazit-Globe 47.9% (source: www.gazit- globe.com) 90.8 % • ING Clarion Rea
Slide 43: Backup information
Backup information 43 Q3 2009
Slide 44: First possible termination year of the leases by contract type
First possible termination year of the leases by contract type 30 % 16 September, 2009 25 % 20 % Valid until further notice contract 15 % Initially fixed-term contract Fixed-term contract 10 % 5% 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019+ Fixed-term contracts expire at the end of the
Slide 45: Property portfolio – Finland
Property portfolio – Finland LEASE PORTFOLIO Q3 2009 Q3 2008 Q2 2009 2008 Number of leases started during the period 65 66 80 452 Total area of leases started, sq.m. 20,530 11,090 9,080 79,130 Occupancy rate at end of the period, % 94.1 95.7 94.5 95.7 Average remaining length of lease portfolio at t
Slide 46: Property portfolio – Sweden
Property portfolio – Sweden LEASE PORTFOLIO Q3 2009 Q3 2008 Q2 2009 2008 Number of leases started during the period 71 13 72 58 Total area of leases started, sq.m. 2,995 1,670 7,320 15,340 Occupancy rate at end of the period, % 95.0 94.8 94.4 96.0 Average remaining length of lease portfolio at the 2
Slide 47: Property portfolio – The Baltic Countries
Property portfolio – The Baltic Countries LEASE PORTFOLIO Q3 2009 Q3 2008 Q2 2009 2008 Number of leases started during the period 4 2 67 62 Total area of leases started, sq.m. 264 50 16,111 30,490 Occupancy rate at end of the period, % 99.7 99.8 99.9 99.8 Average remaining length of lease portfolio
Slide 48: Citycon in brief - background
Citycon in brief - background Citycon’s path to becoming the market leader and an international real estate company 1988 2004 2007 Quoted on the Main List of Citycon continues to growth New acquisitions in Finland and Helsinki Stock Exchange Office Ownership structure becomes Sweden portfoli
Slide 49: Country organisation
Country organisation 49 Q3 2009
Slide 50: Contact information
Contact information INVESTOR RELATIONS Mr Petri Olkinuora CEO Tel. +358 207 664 401 Petri.Olkinuora@citycon.fi Mr Eero Sihvonen CFO Tel. +358 50 5579 137 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola IRO Tel. +358 40 5666 070 Hanna.Jaakkola@citycon.fi 50 Q3 2009
Slide 51: 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