Srv Yhtiot Oyj · OMXHEX:SRV1V
Srv Yhtiot Oyj — Investor Day (June 2016)
34 slides from Srv Yhtiot Oyj's investor day presentation, Jun 1, 2016
Slide 1: Capital Markets Day 1st June 2016
Capital Markets Day 1st June 2016 Veli-Matti Kullas, SVP, Project Development, Russia 1 Anders Liljenstolpe, Deputy Country Director, Russia
Slide 2: Content
Content • Russian economy today • Russian retail market • SRV in Russia Today • SRV in Russia in 2020 Okhta Mall
Slide 3: Russian economy today
F/O Sco LES i Russian economy today
Slide 4: Ending of decline, stagnated growth ahead
Ending of decline, stagnated growth ahead GDP declined to -3.7 percent in 2015, estimate -1 to -2.5 percent in 2016 and slightly positive in 2017 4
Slide 5: Economy is stabilizing
Economy is stabilizing • RUB to follow movements in oil • Politics in general seem to have shifted into a passive mode, sanctions will remain for now • Currently no major pressure on reserves due to non-interventions in currency 5
Slide 6: Inflation and consumption decline slowing
Inflation and consumption decline slowing • Inflation slowing down faster than expected • Decline in private consumption slowing but will remain challenging due to decreasing real wage growth and slightly increasing unemployment (~5,8 %) 6
Slide 7: Russian retail market
Russian retail market 7
Slide 8: Russian citizen - a good consumer with high purchasing power
Russian citizen - a good consumer with high purchasing power Flat income tax rate Low mortgage debt 13%, and reasonable thanks to privatisation VAT 18% Low cost of living – • . Average wage has grown 4 cheap energy and times since 2003 being 668 public services eur/month
Slide 9: Russian consumes more than twice as other Europeans
Russian consumes more than twice as other Europeans Source: Jones Lang LaSalle 9
Slide 10: Russian spending behaviour - focus on everyday needs
Russian spending behaviour - focus on everyday needs Despite of Ruble rate and Shopping Centres are low value of money places to spend time Russian continues to and meet friends and consume and spend huge families part of disposable income Top interests and consumer goods – basic Use and need of pro
Slide 11: The biggest retail and shopping centre market in Europe
The biggest retail and shopping centre market in Europe Total Russia retail Undersupplied shopping space market in 2015 appr. 27,6 trillion rubles (368 billion euro by average rate 75) Splitted in major areas • Moscow city 65 billion euro • St. Petersburg 16 billion euro Source:Rosstat, PMR Retail i
Slide 12: The market potential is good in Moscow and St. Petersburg
The market potential is good in Moscow and St. Petersburg Source: PMR Retail Insight, Kauppakeskusyhdistys, Kaupan Liitto 12
Slide 13: St. Petersburg Shopping Centre market
St. Petersburg Shopping Centre market Source: Jones Lang LaSalle 13
Slide 14: International investors will eventually return to the market
International investors will eventually return to the market • Currently very few foreign investors in the market even though investment volume is expected to pick up in 2016 • No major spike in yields has been 14 witnessed
Slide 15: SRV in Russia TODAY
SRV in Russia TODAY 15
Slide 16: Why we are in Russia?
Why we are in Russia? Strategy Targets • SRV has been in Russia • To develop our standing • Benefit from Europe’s almost 30 years asset biggest market • Long term investments generate good return • To develop 1st class SCs’ • Current role as a developer, • To develop real estate projects in the best
Slide 17: Long term business
Long term business 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Land acquisition, development, permitting Pearl Plaza 1 Construction and leasing Operation and ramp-up of leasing business ca. 2- Okhta Mall 4 years (release of equity capital through long- t
Slide 18: Key parameters 4Daily
Key parameters 4Daily GBA SQ.M. GLA SQ.M. 1 UNDERGROUND/ 3 ABOVE FLOORS 100 SHOPS
Slide 19: Shopping Centre for 600 000 people
Shopping Centre for 600 000 people 1 2 3 10 MIN 220 000 people 2 15 MIN 158 000 people 1. SC JUNE GLA – 178 000; GBA – 75 000 Opening – 2H 2012 2. SC 4DAILY 20 MIN GLA – 52 000; GBA – 25 5000 Opening – 2H 2016 230 000 people 1 COVERAGE 3. SC KRASNII KIT GLA – 140 000; GBA – 66 000 600 000 Opening –
Slide 20: Investors in Russia Daily, Greater Moscow region
Investors in Russia Daily, Greater Moscow region BLAGOSOSTOYANIE: one of the largest non-state pension funds in Russia with assets of ca. 300 Billion RUB
Slide 21: Okhta Mall
Okhta Mall 21
Slide 22: Shopping Centre for almost 2 million people
Shopping Centre for for almost 2 million people In the Okhta Mall coverage zone lives 1.7 million people of 16-45 years 10 min 200 000 people 20 min 700 000 people 30 min 800 000 people
Slide 23: One of the few shopping centers to be opened in St. Petersburg 2016-2017
One of the few shopping centers to be opened in St. Petersburg 2016-2017 Functional zoning Grand Opening August 26th 2016!
Slide 24: Investors in Okhta Mall, St. Petersburg
Investors in Okhta Mall, St. Petersburg
Slide 25: Pearl Plaza
Pearl Plaza SKEMYYKHAA*NMAAZA Toprowo-a wenrp %
Slide 26: Pearl Plaza sales continues to grow
Pearl Plaza sales continues to grow Retail sales growth, volume 100% 80% 60% 39% 38% 40% 30% 25% 20% 10% 5% Pearl Plaza going better 0% 4% 2% than -2% the general -20% market Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2015 2016 Pearl Plaza volume (RUB) Retail market volume in genera
Slide 27: Key parameters
Key parameters 126 Shops in 3 floors
Slide 28: Investors in Pearl Plaza
Investors in Pearl Plaza SIIC: several listed companies in Shanghai and Hong Kong, 2015 revenue EUR 17 billion, personnel 50.000. Key businesses include real estate, equity investment, infrastructure, medicine and consumables
Slide 29: SRV in Russia in 2020
e/a Oo “Gai ier SRV in Russia in 2020 29
Slide 30: Why SRV sees opportunities in Russia?
Why SRV sees opportunities in Russia? Primary reasons: ROI is still on high level due • consumer behavior to low competition • low supply of shopping • few new shopping centres centres coming out • cheap construction costs • rental rates will go up due to low competition Level of property Consumers
Slide 31: SRV Russia in 2020
SRV Russia in 2020 Finance and everyday business New projects in development • Equity partly released pipeline SRV committed to • External projects are under • Pearl Plaza 2nd phase continue Russian property and asset management • Multifunctional use of • Operating own assets: Okhta Mall, Okhta City
Slide 32: SRV Russia Awards
SRV Russia Awards RCSC Russian Council of Shopping Centers (2016) “The best shopping center in Russia under development”
Slide 33: One of the most rewarded shopping centre
One of the most rewarded shopping centre CRE ST. PETERSBURG REX MARKETING RUSSIAN SHOPPING CENTER AWARD 2015 AWARD 2015 COUNCILS AWARD 2015 “The best medium “The best event in “The best operating size shopping center” the shopping shopping center in Russia center” (medium size)”
Slide 34: Thank You!
Thank You! Next: Financial update 34 Ilkka Pitkänen, CFO