Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q2 2009 Earnings Presentation
52 slides from Citycon Oyj's earnings presentation, 2009
Slide 1: Citycon Presentation Q2 2009
Citycon Presentation Q2 2009 Q2 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 Q2 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 • 74.9% of total net rental income in Q2 2009 • Net rental income growth of 2.5% to EUR 46.0 million Sweden (€m) Finland (€m) • Market leader with 24% market share; 22 1,451.6 shopping centers and 42 other retail 496.8 properties 66.1 63. 46. 7 18. 18.2 10.8 0 8 SWEDEN
Slide 6: Main points
Main points Q2 2009 (vs. Q1 2009) • The fair value change was EUR -26.0 million and the market value of property portfolio was EUR 2,104.5 million (EUR 2,097.3 m) • The valuation yield 6.6% (6.5%) by external appraiser • Net rental income was EUR 31.0 million (EUR 30.3 m) • Direct result per share (
Slide 7: Financing overview
Financing overview • Balance sheet totalled at EUR 2,147.5 million • Refinancing not an issue – total liquidity of EUR 242.5 million incl. unutilized committed debt facilities (EUR 225.8m) and cash (EUR 16.7 m) Covers committed development pipeline and repayments at least until 2010 without other
Slide 8: Business environment
Business environment 8 Q2 2009
Slide 9: Business environment
Business environment GDP PRIVATE CONSUMPTION Source: Nordea 9 Q2 2009
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 Finland -10,0 Sweden Estonia -20,0 Lithuania eurozone -30,0 -40,0 -50,0 -60,0 Source: Eurostat 10 Consumer confidence indicator is conducted as an interview survey. It include
Slide 11: Business environment
Business environment PROPERTY MARKET 1) RETAIL AND GROCERY SALES, CPI, MAY 09 As a result of the international financial crisis foreign property investor activity in the region has declined considerably. *) 9,6 Since fall 2008, the most active buyers by far 10 have been domestic pension and insuranc
Slide 12: (Re)development projects
(Re)development projects 12 Q2 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
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
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 Q2 2009
Slide 17: Ongoing (re)development projects
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
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 Q2 2009
Slide 21: Property portfolio
Property portfolio • 4,080 (3,662) leases with an average length of 3.0 (2.8) years • GLA grew by 2.4% to 949,157m2 • Net rental income increased by 2.0% to EUR 61.3 million • without the weakened Swedish krona, NRI would have increased by 4.9% • Net rental income for like-for-like properties grew b
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 26.6% of NRI end of 2008 • Five largest totaled 38.4
Slide 23: Shopping centre rental income by branches
Shopping centre rental income by branches *) Cafes & Restaurants 8% Other Specialty Leisure & Home Health & Stores Supplies Beauty 2% 20 % 8% Services & Offices 5% Department Stores 11 % Clothes & Fashion 22 % Groceries 24 % *) Excl. Supermarket and shops -portfolio 23 Q2 2009
Slide 24: Valuation yield development in the portfolio
Valuation yield development in the portfolio % 8 7,5 7 Finland Finland excl. Iso Omena 6,5 Sweden 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 Q1 2009 Valuation yield above is based on external valuator’s portfolio valuation. 24 Q
Slide 25: Property portfolio
Property portfolio TOTAL PORTFOLIO Q2 2009 Q2 2008 Q1 2009 2008 Net rental income, EUR million 31.0 30.5 30.3 121.8 Number of leases started 1) 219 112 128 572 during the period 2 Total area of leases started, m 32,511 18,170 16,066 124,960 Occupancy rate at end of the 94. 8 95.7 95.3 96.0 period ,%
Slide 26: 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. 26 Q2 2009
Slide 27: Business Environment
Business Environment 27 Q2 2009
Slide 28: Key figures
- Key figures 28 cao CcITYCON
Slide 29: Snapshot of Statement of Comprehensive Income
Snapshot of Statement of Comprehensive Income EUR million Q1-Q2 2009 Q1-Q2 2008 2008 Gross rental income 88.2 85.1 173.0 Service charge income 3.2 3.4 5.3 Turnover 91.5 88.5 178.3 Property operating expenses 29.8 28.4 56.3 Other expenses from leasing operations 0.4 0.0 0.2 Net rental income 61.3 60.
Slide 30: 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 CAGR +15.6 % Fi nl a nd Sweden CAGR +16.7% Ba l tics Other 35,0 Ba l tics Other 35,0 31,5 31,0 27,1 30,5 30,2 30,3 27,6 29,7 30,0 25,9 26,0 25,6 25,7 30,0 27,3 27,
Slide 31: Snapshot of Statement of Financial Position
Snapshot of Statement of Financial Position Statement of Financial Position, EUR million 30 June 2009 30 June 2008 31 Dec 2008 Investment property 2,104.5 2,233.1 2,111.6 Total non-current assets 2,114.5 2,254.9 2,126.1 Current assets 33.0 38.1 52.4 Assets total 2,147.5 2,293.0 2,178.5 Total share h
Slide 32: Consolidated Cash Flow Statement Jan - Jun 2009
Consolidated Cash Flow Statement Jan - Jun 2009 EUR MILLION 2Q2009 2Q2008 • Cash flows from operations improved by 60% due to: Operating activities • Improved cash generation through higher direct Profit before taxes -28,7 -62,1 result Adjustments 81,9 114,5 Change in working capital 8,0 -0,7 • Work
Slide 33: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives 600 EUR 1,251.6 million 1) Loans (EUR 1,251.6) 500 482 Fixed derivatives (EUR 673.5m) Floating rate debt 405 23% Fixed rate debt 400 23% 300 229 195 200 172 93 90 Fixed rate swaps 100 66 7
Slide 34: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of fixed and floating rate loans and Period-end interest rate by maturity for undrawn committed credit limits fixed rate debt and swaps 450 6,0 % 404 Fixed (EUR 290.8m) 5,24 % 400 Average 4.19% Floating (EUR 960.7m) 5,0 % 350 4,32 % 4,20 % Undrawn cr
Slide 35: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,251.6 million 1) EUR 1,251.6 million 1) Other LTL 1% 22% Syndicated term loans EEK 4% 48% EUR 62% SEK 33% Revolving credit facility 18% Bonds 12% • The backbone of the debt financing continues to be the syndicated term a
Slide 36: 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 70 % 1 221,1 1 234,8 1 205,3 1 194,6 1 191,3 5,00 % 1 184,3 1 200 1 147,3 1 149,4 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 % 800 783,3 2,00
Slide 37: Breakdown of Financial Expenses
Breakdown of Financial Expenses 2q 1q 2q 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 -11,3 -11,5 -13,3 -15 % -2 % -22,8 -26,7 -14 % Foreign exchange losses 0,0 0,0 0,0 nm nm 0,0 0,0 -15 %
Slide 38: Net Financial Expenses Q1 2009 vs Q2 2009
Net Financial Expenses Q1 2009 vs Q2 2009 14 -0,2 -0,6 0,3 0,1 12 12,2 11,8 10 8 6 4 2 0 1Q2009 Net interest Fees Derivative Other 2Q2009 valuation 38 Q2 2009
Slide 39: Share performance
Share performance1) 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00 1.1.2006 1.4.2006 1.7.2006 1.10.2006 1.1.2007 1.4.2007 1.7.2007 1.10.2007 1.1.2008 1.4.2008 1.7.2008 1.10.2008 1.1.2009 FTSE EPRA Nasdaq OMX Helsinki CAP Citycon 39 Q2 2009 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on
Slide 40: Ownership
Ownership SHAREHOLDERS • End of June market capitalization totaled EUR 411.2 million • 91.6% of shareholders international 8.4 % • Number of domestic owners increased • 3160 registered shareholders • Largest Shareholders: • Gazit-Globe 48% (source: Gazit- 91.6 % Globe’s FY results, 29 March 2009) •
Slide 41: Backup information
Backup information 41 Q2 2009
Slide 42: First possible termination year of the leases by contract type
First possible termination year of the leases by contract type, Dec 31, 2008 35 30 25 20 Valid until further notice Initially fixed-term contract 15 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 contract period, afte
Slide 43: Property portfolio – Finland
Property portfolio – Finland LEASE PORTFOLIO Q2 2009 Q2 2008 Q1 2009 2008 Number of leases started during the period 80 93 66 452 Total area of leases started, sq.m. 9,080 14,310 9,190 79,130 Occupancy rate at end of the period, % 94.5 95.6 94.9 95.7 Average remaining length of lease portfolio at th
Slide 44: Property portfolio – Sweden
Property portfolio – Sweden LEASE PORTFOLIO Q2 2009 Q2 2008 Q1 2009 2008 Number of leases started during the period 72 18 61 58 Total area of leases started, sq.m. 7,320 3760 6,873 15,340 Occupancy rate at end of the period, % 94.4 95.2 95.5 96.0 Average remaining length of lease portfolio at the 2.
Slide 45: Property portfolio – The Baltic Countries
Property portfolio – The Baltic Countries LEASE PORTFOLIO Q2 2009 Q2 2008 Q1 2009 2008 Number of leases started during the period 67 1 1 62 Total area of leases started, sq.m. 16,111 100 3 30,490 Occupancy rate at end of the period, % 99.9 100 99.5 99.8 Average remaining length of lease portfolio at
Slide 46: 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 47: Country organisation
Country organisation 47 Q2 2009
Slide 48: Management
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 48 Q2 2009
Slide 49: Illustrative Calculation of ICR Covenant Using Q2 2009 Financials
Illustrative Calculation of ICR Covenant Using Q2 2009 Financials* Q2 2009 EBITDA for covenant EBITDA = EUR 106.0 + EUR 0.5 + calculation: direct operating profit EUR 0.3 + depreciations +/- non-cash and = EUR 106.8 million for previous exceptional items 12-month period EUR million Q2 Q1 Q4 Q3 Cumul
Slide 50: Illustrative Calculation of Equity Ratio Covenant Using Q2 2009 Financials
Illustrative Calculation of Equity Ratio Covenant Using Q2 2009 Financials* Equity for covenant calculation: Equity = EUR 777.4 + EUR 138.5 – total shareholders’ equity + EUR 36.1 + EUR 22.1 subordinated debt (cf. Note 23) – = EUR 901.8 million as at 31 June minority interest +/– fair value of 2009
Slide 51: 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 51 Q2 2009
Slide 52: Disclaimer
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