Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q3 2012 Earnings Presentation
47 slides from Citycon Oyj's earnings presentation, October 2012
Slide 1: Citycon Presentation Q3 2012 Results
Citycon Presentation Q3 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: Strategy and Business Environment
Strategy and Business Environment Trio in Lahti, Finland 3 Q3 2012
Slide 4: Citycon - Creating Success for Retailing
Citycon - Creating Success for Retailing • In 2011, 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 Nordic and Baltic countries • Seeks growth through shoppi
Slide 5: Focus on Shopping Centres in the Nordic and Baltic Region
Focus on Shopping Centres in the Nordic and Baltic Region Better, Stronger, Bigger Project Now! - internal business improvements and efficiency Nordic and Baltic Countries • Denmark as a new entry Quality shopping centres Growth, emphasis on internal growth • Two (re)development projects com
Slide 6: Current Geographical Overview Q1-Q3 2012
Current Geographical Overview Q1-Q3 2012 FINLAND • Market leader • Net rental income EUR 72.5 million • 60.5% of total net rental income Sweden (€m) Finland (€m) • Currently 23 shopping centres, 35 other retail properties, one unbuilt lot 743.2 1,640.9 47.2 29.3 105.9 72.5 SWEDEN MV Turn- Net MV Tur
Slide 7: Business Environment
Business Environment Albertslund Centrum, Denmark 7 Q3 2012
Slide 8: Business Environment: Consumer Confidence
Business Environment CONSUMER CONFIDENCE Source: Eurostat Consumer confidence indicator is conducted as an interview survey. It includes respondent’s view on financial situation, 8 general economic situation, unemployment expectations over the next 12 months, and savings over the next 12 months. Q3
Slide 9: Business Environment: GDP and Private Consumption
Business Environment GDP PRIVATE CONSUMPTION 7,6% 5,9% 3,9% 6,1% 3,8% 3,3%3,5% 2,8% 3,5% 2,7% 2,7% 4,2% 3,8% 2,3% 3,4% 3,7% 3,5% 3,2% 3,3% 1,8% 1,9%2,1% 2,3% 1,2% 2,5% 2,2% 1,2% 1,3% 2,0% 2,0% 1,7% 2,0% 2,1% 1,8% 1,9% 0,8% 0,8% 0,7% 0,6% Finland Sweden Denmark Estonia Lithuania Finland Sweden -0,8%D
Slide 10: Business Environment: Retail Sales and Unemployment
Business Environment Despite turbulence, still relatively low RETAIL SALES, JAN-AUGUST unemployment and reasonably strong AND AUGUST-CPI, 2012 consumer confidence and record low Retail Sales CPI interest rates -> positive on retail sales 8,0 August unemployment rates below the European average (10.5
Slide 11: Citycon Shopping Centres - Sales and Footfall
Citycon Shopping Centres - Sales and Footfall 11 Q3 2012
Slide 12: Q1-Q3 2012 Main Points
Q1- Q3 2012 Main Points Koskikeskus in Tampere, Finland 12 Q3 2012
Slide 13: Q1 – Q3 2012 Summary
Q1 – Q3 2012 Summary in EUR million Q3 2012 Q3 2011 Q1-Q3 2012 FY 2011 NRI Finland 25.2 23.4 72.5 90.5 NRI Sweden 10.6 9.5 29.3 35.4 NRI Baltic Countries and New Business 6.7 4.6 18.1 18.4 Net Rental Income, total 42.6 38.3 119.9 144.3 EPRA Operating Profit 37.3 31.3 101.4 117.4 EPRA Earnings 17.8 1
Slide 14: Q1 – Q3 2012 – Business Improvements and Refinancing
Q1 – Q3 2012 –Business Improvements and Refinancing • Good like-for-like results • New tenants to the region (e.g. Debenhams, H&M) • Total economic occupancy rate 95.4% • Refinancing and diversification of funding sources • EUR 360 million new 5-year unsecured credit facility signed with Nordic bank
Slide 15: Citycon Outlook 2012
Citycon Outlook 2012 EPRA Operating Profit, EURm EPRA Earnings, EURm 150 80 €131.4 – €136.4 130 €59.3 – 70 €64.3 110 60 90 50 117,4 105,3 107,7 105,0 70 87,4 50,9 53,3 40 47,3 43,8 38,3 50 30 2007 2008 2009 2010 2011 2012E 2007 2008 2009 2010 2011 2012E EPRA Operating Profit Outlook Range EPRA Earni
Slide 16: Financing Overview
Financing Overview • Refinancing, diversification of funding sources, rights issue • The year-to-date weighted average interest rate for interest-bearing debt increased compared to the previous year’s corresponding period, being 4.06%(3.99%), mainly due to a rise in credit margins. • At the period-e
Slide 17: Property Portfolio and Sustainability
Property Portfolio and Sustainability Renewed Magistral, Tallinn, Estonia 17 Q3 2012
Slide 18: (Re)development Projects
(Re)development Projects 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 Magistral 9 500 7.0 6.9 8.3 100 Completed The redevelopme
Slide 19: Largest (Re)development Projects Under Planning
Largest (Re)development Projects Under Planning Property Project Estimated Target Target year Additional information area, investment year of of 1) sq.m. need, project completion MEUR 2) launch 3) 5) Iso Omena 28 000- 140 2012 2015 Planning reservation together with the construction company NCC rega
Slide 20: Key Figures - Property Portfolio
Key Figures - Property Portfolio • 3,804 (3,994) leases with an average length of 3.4 (3.4) years • GLA total was 998,170 m2 • Rolling 12-month occupancy cost ratio for like-for-like shopping centres was 9.0% • Rents linked to CPI (nearly all the agreements). Illustration of a typical lease agreemen
Slide 21: Key Figures - Property Portfolio
Key Figures - Property Portfolio TOTAL PORTFOLIO Q3/2012 Q3/2011 Q1-Q3/2012 Q1-Q3/2011 2011 Number of leases started 140 188 597 554 782 during the period Total area of leases 23,685 64,777 100,910 127,636 177,006 started, sq.m. 1) Average rent of leases 22.5 21.9 19.9 19.7 19.7 started (EUR/sq.m.)
Slide 22: Property Portfolio
Property Portfolio Illustration of a typical lease agreement Measured in fair value, like-for-like properties accounted for 72.0% of the total portfolio and of l-f-l portfolio 60.5% is in Finland and 71.5% of the total Finnish portfolio is included in l-f-l. Shopping centres represent 88.3% of the l
Slide 23: Valuation Yield Development in the Portfolio
Valuation Yield Development in the Portfolio Fair value of investment properties EUR 2,695.5 million (2,512.6) • Total fair value change EUR 19.8 million , for Q3 EUR 13.8 million • Fair value gain in shopping centres EUR 28.0 million, for Q3 EUR 17.7 million • Fair value loss in super markets and s
Slide 24: Sustainability an Integral Part of Citycon's Strategy
Sustainability an Integral Part of Citycon’s Strategy • In 2008, Citycon included systematic and determined efforts to promote sustainability in its strategy. Changes in Citycon’s strategy in 2011 emphasized the role sustainability plays in our company: ecology and economy go hand in hand. This mean
Slide 25: Strategical Objectives Related to Environmental Responsibility
Strategical Objectives Related to Environmental Responsibility Target in 2012: Climate change 2-3% decrease Reduction of greenhouse gas emissions by 20% by year 2020 from the 2009 baseline level (the EU objective is to reduce emissions by 20% by 2020 from the 1990 level). Target in 2012: Energy 2-3%
Slide 26: Key Figures and Financing Overview
Key Figures and Financing Overview Alternative of the new, future Iso Omena, Espoo, Finland 26 Q3 2012
Slide 27: Snapshot of Statement of Comprehensive Income
Snapshot of Statement of Comprehensive Income EUR million Q3/2012 Q3/2011 Q1-Q3/2012 Q1-Q3/2011 2011 Gross rental income 57.5 52.5 167.4 153.0 206.0 Service charge income 3.4 2.5 9.7 8.1 11.1 Turnover 60.9 55.0 177.1 161.0 217.1 Property operating expenses 17.8 16.2 55.7 53.2 71.6 Other expenses fro
Slide 28: NRI Growth by Segments and Portfolios
NRI Growth by Segments and Portfolios Baltic EUR million Finland Sweden Countries Other Total TURNOVER Q1-Q2/2010 42,7 13,9 5,8 0,0 62,5 98,1 Acquisitions 0,1 0,1 1,5 - 1,7 2,2 (Re)development projects 2,0 0,7 - - 2,7 3,5 Divestments 0,0 -0,7 - - -0,8 -1,5 Like-for-like properties -0,9 1,8 0,3 - 1,1
Slide 29: Cash Flow Statement
Cash Flow Statement Q1-Q3 Q1-Q3 • Cash flow from operations lower than the EUR MILLION 2012 2011 A corresponding period in the previous year due to: Operating activities • Higher paid net financial expenses by EUR Profit before taxes 75,0 25,0 14.2, which resulted from higher FX loss Adjustments 28,
Slide 30: Snapshot of Statement of Financial Position
Snapshot of Statement of Financial Position Statement of Financial Position, EUR million 30 Sept 2012 30 Sept 2011 31 Dec 2011 Investment property 2,695.5 2,512.6 2,522.1 Total non-current assets 2,717.9 2,529.1 2,540.1 Current assets 51.8 50.2 125.0 Assets total 2,775.1 2,579.3 2,677.7 Total shareh
Slide 31: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives EUR 1,608.6 m 1) Loans (EUR 1,608.6 m) Refinanced debt, Fixed derivatives (EUR 1,032.2m) Floating rate debt settlement Nov 2012 Undrawn refinancing (EUR 360m) 14% Fixed rate debt (EUR 331.
Slide 32: 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 Refinanced debt, Fixed (EUR 353.1m) settlement Nov 2012 Floating (EUR 1,255.5m) (EUR 331.7m) Undrawn credits (EUR 505.7m) Convertible Bonds (E
Slide 33: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,608.6 m 1) EUR 1,608.6 m 1) LTL 1% Other 32% Syndicated term loans 47% EUR 62% SEK 37% CP 3% Revolving credit facility 4% Bonds 14% • Comfortable liquidity buffer – Citycon’s short term liquidity (before rights issue) in
Slide 34: Key Figures – Interest Rates and LTV
Key Figures – Interest Rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) 1 600 1575,2 70% 1530,3 5,50 % 1 500 1463,5 1445,2 1446,2 5,00 % 1389,5 1386,0 60% 1 400 1369,6 4,50 % 1343,1 1312,21327,2 1 300 1272,3 4,00 % 1234,8 50% 1205,31221,1 1 194,61191,3 1184,3 3,50 % 1 2
Slide 35: Share Performance and Volume
Share Performance and Volume 35 Q3 2012
Slide 36: Ownership
Ownership • Established and listed on the Helsinki Stock Exchange since 1988 • 30 Sept 2012 market cap EUR 761.6 m • Number of domestic shareholders increased: total 6,658 (3,997) registered shareholders • Largest Shareholders: • Gazit-Globe 48.6% • Ilmarinen 8.99% • Citycon is included among others
Slide 37: Backup Information
Backup Information Iso Omena 37 Q3 2012
Slide 38: 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 39: Albertslund Centrum 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 40: Summary of Environmental Targets and Results in 2011
Summary of Environmental Targets and Results in 2011 Strategic objectives related to environmental responsibility Targets for 2011 Results of 2011 Climate Change Reduction of greenhouse gas emission by 20% by year 2020 l-f-l sc: from the 2009 level 2-3% -0.8% K Energy Reduction of energy consumption
Slide 41: Financial Expenses Analysis
Financial Expenses Analysis Q3 Q2 Q3 Change- Change- Net Financial Expenses (EUR million) 2012 2012 2011 % (y-o-y) % (q-o-q) Financial Expenses: Interest expenses -16,2 -15,6 -15,2 6% 4% Foreign exchange gains(+)/ losses(-) 0,1 0,0 0,0 n.m. n.m. Capitalised fees -0,6 -0,4 -0,3 76 % 51 % Non-cash opt
Slide 42: Net Financial Expenses Q2 2012 vs Q3 2012
Net Financial Expenses Q2 2012 vs Q3 2012 EUR million • Interest expenses increased EUR 0.6 million from the previous quarter mainly due to the strengthening SEK (EUR 0.3 m) and higher average debt (EUR 0.2 m) • Other financial expenses increased during Q3 by EUR 0.8 million due to writedown of fees
Slide 43: Illustrative Calculation of ICR Covenant Using Q3 2012 Financials
Illustrative Calculation of ICR Covenant Using Q3 2012 Financials* Q3 2012 EBITDA for covenant EBITDA = EUR 130.3 + EUR 1.3 + calculation: direct operating profit EUR 2.3 + depreciations +/- non-cash and = EUR 133.9 million for rolling 12- exceptional items month period EUR million Q3 Q2 Q1 Q4 Cumul
Slide 44: Illustrative Calculation of Equity Ratio Covenant Using Q3 2012 Financials
Illustrative Calculation of Equity Ratio Covenant Using Q3 2012 Financials* Equity for covenant calculation: Equity = EUR 964.7 + EUR 40.3 – total shareholders’ equity + EUR 57.5 + EUR 55.8 subordinated debt – non- = EUR 1,003.2 million as at 30 controlling interest +/– fair value of September 2012
Slide 45: Citycon in Brief - Background
Citycon in Brief - Background Citycon’s path to becoming the market leader and an international real estate company 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 fi
Slide 46: 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 47: 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