Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — FY2009 Earnings Presentation
59 slides from Citycon Oyj's earnings presentation, 2010
Slide 1: Citycon Presentation Financial Results 2009
Citycon Presentation Financial Results 2009
Slide 2: Contents
Contents Strategy Main points and financial overview Business environment Sustainability (Re)development projects Property portfolio Key figures Financing overview Backup information 2 FY 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: Strategic objectives
Strategic objectives • Growth through selected development projects and acquisitions (partnerships and joint-venture-based financial arrangements can also be used for individual properties) • Property portfolio optimisation • Vacancy rate management, efficiency improvements, and increase in value th
Slide 5: Financial targets
Financial targets Continued expansion through property development and selective acquisitions Cumulative CAPEX since 2005 in excess of EUR 1.5 billion Main emphasis on organic growth GROWTH Solid distribution policy DIVIDENDS Payout target 50 % of the result for the period after taxes excl. fair
Slide 6: Geographical overview
Geographical overview FINLAND • 73.7% of total net rental income in 2009 Sweden (€m) Finland (€m) • Net rental income growth of 1.7% to 1,494.0 EUR 92.4 million 548,8 131.3 126.5 • Market leader with 22% market share 92.4 41.0 39.3 23.2 MV Turn- Gross Net MV Turn- Gross Net SWEDEN Property over Rent
Slide 7: Main points
Main points Q4 2009 (vs. Q3 2009) • The fair value change was EUR -38.6 million (EUR -1.2 m) and the market value of property portfolio was EUR 2,147.4 million (EUR 2,162.7 m) • The valuation yield 6.6% (6.6%) by external appraiser • Net rental income was EUR 31.6 million (EUR 32.5m) • Direct result
Slide 8: Financing overview
Financing overview • Total asset stood at EUR 2,253.2 million • Refinancing not an issue – total liquidity of EUR 205.6 million incl. unutilized committed debt facilities (EUR 185.8m) and cash (EUR 19.8 m) Covers committed development pipeline and repayments at least until 2010 without other finan
Slide 9: Business environment
Business environment 9 FY 2009
Slide 10: Business environment
Business environment GDP PRIVATE CONSUMPTION Source: Nordea 10 FY 2009
Slide 11: Business environment: consumer confidence
Business environment CONSUMER CONFIDENCE 30,0 20,0 10,0 0,0 1.1.2008 1.4.2008 1.7.2008 1.10.2008 1.1.2009 1.4.2009 1.7.2009 1.10.2009 Finland -10,0 Sweden Estonia -20,0 Lithuania euro zone -30,0 -40,0 -50,0 -60,0 Source: Eurostat Consumer confidence indicator is conducted as an interview survey. It
Slide 12: Business environment: retail and grocery sales
Business environment RETAIL AND GROCERY SALES, CPI, DEC 09 Occupancy rates in shopping centres continue to be high both in Finland and 4 2,8 in Sweden. (Jones Lang LaSalle, Nordic 2 1,9 1,9 1,5 City Report, Autumn 2009) 0,2 % 0 Finland -0,5 Sweden Estonia The property market has shown signs of -2 -1
Slide 13: Sustainability
- Sustainability 1. CcITYCON
Slide 14: Strategical goals for environmental impact areas
Strategical goals for environmental impact areas Climate change 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). Energy Reduction of energy consumption (electricity and heat) by 9% by
Slide 15: Key Performance in 2009
Key Performance in 2009 • The first LEED certificate in the Nordic countries was awarded to Trio shopping centre. • The Green Shopping Centre Management programme was launched. • Action was taken to improve environmental reporting, and the first report was published. • Citycon took part in the GRI d
Slide 16: Green Shopping Centre Management Program
Green Shopping Centre Management Program Tool for Shopping Centre Management • Energy • Green • Water thinking in • Waste action Internal • Refrigerants • Recognition benchmark • Transport of • Procurement Development • Training areas • Marketing • Monitoring 16 FY 2009
Slide 17: Key Results
Key Results Emissions • 31,816 tnCO2-e equals: • 13.5 million litres petrol or • 0.04 % of Finland’s total emissions (2007) or 0.05 of Sweden’s total emissions (2007) • To offset the emissions, one needs to plant 103,000 trees in the habitat of Northern Europe, this correlates area of 88 soccer fiel
Slide 18: Key Results: Land use and sustainable project development
Key Results Land use and Sustainable project development • The first LEED certificate in the Nordic countries was awarded to Trio shopping centre • Certification processes proceeded according to the schedule • Rocca al Mare was awareded first LEED certificate in January 2010 • Liljeholmstorget is ai
Slide 19: (Re)development projects
(Re)development projects 19 FY 2009
Slide 20: Ongoing (re)development projects
Ongoing (re)development projects PROPERTY LOCATION AREA, sq.m. TOTAL ACTUAL Before and ESTIMATED CUMULATIVE after INVESTMEN CAPEX, by the T NEED, end of period, MEUR MEUR Åkersberga Österåker, 20 000 45.6 16.0 Refurbishment and extension of the shopping centre in the Greater Stockholm area. Centrum
Slide 21: Ongoing projects: Åkersberga Centrum
Ongoing (re)development projects ÅKERSBERGA CENTRUM Refurbishment and extension of existing shopping centre in affluent Österåker Greater-Stockholm area, north east of the CBD. 75% pre-let, the anchor tenant is a large ICA-Kvantum grocery store. Project started in summer 2009. Minority owner (25%) l
Slide 22: Ongoing projects: Forum in Jyväskylä
Ongoing (re)development projects FORUM in Jyväskylä Refurbishment of existing downtown shopping centre in vivid university town of Jyväskylä in Central Finland. 70% of the shopping centre is pre-let. Mostly fashion, cafes and restaurants as tenants. Retail GLA, sq.m. 15,100 Project area (GLA), sq. (
Slide 23: Completed Projects: Liljeholmstorget
Completed Projects LILJEHOLMSTORGET Construction of a new shopping centre south west of Stockholm city centre. Location is the major traffic hub. Existing building is totally refurbished, new centre is built adjacent to subway station. Pilot project in sustainable construction. Retail GLA, sq.m. 28,
Slide 24: Completed Projects: Rocca al Mare
Completed Projects ROCCA AL MARE Extension and redevelopment of existing centre west of Tallinn city centre. After the project Rocca al Mare is the largest centres in Estonia and Citycon took over almost a quarter of the Tallinn shopping centre market. Anchor tenant largest Prisma hypermarket in Est
Slide 25: (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 26: Property portfolio
Property portfolio 26 FY 2009
Slide 27: Property portfolio
Property portfolio • 4,235 (3,742) leases with an average length of 3.1 (3.1) years • GLA totalled 961,150 m2 • Net rental income increased by 3.0% to EUR 125.4 million • without the weakened Swedish krona, NRI would have increased by 5.0% • Net rental income for like-for-like properties grew by 0.8
Slide 28: Property portfolio: rental contracts
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 23.2%of GRI end of September 2009 • Five largest tot
Slide 29: Valuation yield development in the portfolio
Valuation yield development in the portfolio 8,5 % 8 7,5 7 Finland Finland excl. Iso Omena Sweden Baltic Countries 6,5 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 Q3 2009 Valuation yield above is based on external valuator’s portfolio
Slide 30: Property portfolio: total portfolio
Property portfolio TOTAL PORTFOLIO Q4 2009 Q3 2009 2009 2008 Net rental income, EUR million 31.6 32.5 125.4 121.8 Number of leases started 1) 386 140 873 572 during the period 2 Total area of leases started, m 69,262 23,789 141,628 124,960 Occupancy rate at end of the 95.0 94.7 95.0 96.0 period ,% A
Slide 31: Sales and footfall
Sales and footfall Accumulative shopping centre footfall, Jan-Dec 2009 Accumulative shopping centre sales, Jan-Dec 2009 90 27,5 % 1 400 14,0 % 28,0 % 80 24,0 % 1 200 10,0 % 70 20,0 % 5,2 % 1 000 6,0 % 60 16,0 % 2,1 % 50 12,0 % 800 2,0 % Footfall, million -1,2 % 8,0 % MEUR Change 40 Change 4,0 % 600
Slide 32: Shopping centre rental income by branches
Shopping centre rental income by branches based on valid rent roll at 31 Dec. 2009 2% 7% 23 % Clothes and Fashion 8% Groceries Leisure, Home Supplies 9% Department Stores Services and Offices Cafes & Restaurants 10 % 22 % Health & Beauty Other Specialty Stores 19 % 32 FY 2009
Slide 33: 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. 33 FY 2009
Slide 34: Business Environment
Business Environment 34 FY 2009
Slide 35: Key figures
Key figures 35 FY 2009
Slide 36: Snapshot of statement of comprehensive income
Snapshot of statement of comprehensive income EUR million 2009 2008 Gross rental income 177.8 173.0 Service charge income 8.5 5.3 Turnover 186.3 178.3 Property operating expenses 60.2 56.3 Other expenses from leasing operations 0.7 0.2 Net rental income 125.4 121.8 Administrative expenses 17.8 16.9
Slide 37: Key Figures – Profitability
Key Figures – Profitability Rolling 12-month Direct Result (EUR million) Rolling 12-month Direct Result per Share (EUR/ share) 23,0 22,7 50,9 50,2 21,5 21,2 46,6 47,3 20,7 20,3 20,5 45,0 20,0 44,2 43,8 19,4 41,9 38,3 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08
Slide 38: Key Figures – Profitability
Key Figures – Profitability Quarterly Net Rental Income by segments Quarterly Operating Profit1) by segments 40,0 40,0 Finland Sweden Finland Sweden Baltics Other CAGR +13.9 % 35,0 Baltics Other CAGR +13.3% 35,0 32,5 31,5 31,0 31,6 27,1 28,6 30,5 30,2 30,3 27,6 26,2 29,7 30,0 25,9 26,0 25,6 25,7 30,
Slide 39: Snapshot of statement of financial position
Snapshot of statement of financial position Statement of Financial Position, EUR million 31 Dec 2009 31 Dec 2008 Investment property 2,147.4 2,111.6 Total non-current assets 2,161.4 2,126.1 Current assets 91.8 52.4 Assets total 2,253.2 2,178.5 Total share holders equity 767.9 837.3 Total liabilities
Slide 40: Consolidated Cash Flow Statement FY 2009
Consolidated Cash Flow Statement FY 2009 EUR MILLION FY2009 FY2008 • Cash flows from operations improved by 40% due to: Operating activities • Improved cash generation through higher direct Profit before taxes -37,5 -162,3 Adjustments 145,7 268,1 result Depreciation and impairment 0,7 0,5 • Working
Slide 41: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives EUR 1, 332.0 million 1) 500 475 Loans (EUR 1,332.0m) 450 428 Fixed derivatives (EUR 737.6m) Floating rate debt 400 Convertible Bonds 20% Fixed rate debt 350 (EUR 76.5m) 25% 296 300 250 233
Slide 42: 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 4,4 % Fixed (EUR 331.1m) 4,31 % 398 400 Floating (EUR 1,000.9m) 4,3 % 4,20 % 350 Undrawn credits (EUR 185.8m)
Slide 43: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,332.0 million 1) EUR 1,332.0 million 1) Other LTL 1% 21% Syndicated term loans EEK 4% 44% EUR 60% CP SEK 2% 35% Revolving credit facility 19% Bonds 14% • The backbone of the debt financing continues to be the syndicated
Slide 44: 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 % 1 400 70 % 1 312,2 5,00 % 1 300 1 272,3 1 234,8 60 % 1 205,31 221,11 194,6 4,50 % 1 184,3 1 191,3 1 200 1 147,31 149,4 4,00 % 50 % 1 100 3,50 % 1 000 40 % 3,00 % 900 878,2 863,3 2,50 % 30 % 8
Slide 45: Breakdown of Financial Expenses
Breakdown of Financial Expenses 4q 3q 4q Change-% Change-% FY FY Change-% Net Financial Expenses (EUR million) 2009 2009 2008 (y-o-y) (q-o-q) 2009 2008 (YTD) Financial Expenses: Interest expenses -10,8 -11,5 -12,9 -17 % -6 % -45,1 -53,4 -16 % Foreign exchange losses 0,0 0,0 -0,1 -103 % -63 % 0,0 -0,
Slide 46: Net Financial Expenses Q3 2009 vs Q4 2009
Net Financial Expenses Q3 2009 vs Q4 2009 14 +0,9 -0,7 +0,1 12 -0,0 12,0 11,7 10 8 6 4 2 0 3Q2009 Net interest Fees Derivative Other 4Q2009 valuation 46 FY 2009
Slide 47: 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 47 FY 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 48: Ownership
Ownership SHAREHOLDERS • End of December market capitalization totaled EUR 649.9 million 10.1% • 89.9% of shareholders international • Number of domestic owners increased • 3,733 registered shareholders • Largest Shareholders: • Gazit-Globe 47.9% (source: www.gazit- globe.com) • ING Clarion Real Est
Slide 49: Backup information
Backup information 49 FY 2009
Slide 50: First possible termination year of the leases by contract type
First possible termination year of the leases by contract type, 31 Dec 2009 35,0 30,0 25,0 Valid until further notice 20,0 Initially fixed-term contract 15,0 Fixed-term contract 10,0 5,0 0,0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+ Fixed-term contracts expire at the end of the contrac
Slide 51: Property portfolio – Finland
Property portfolio – Finland LEASE PORTFOLIO Q4 2009 Q3 2009 2009 2008 Number of leases started during the period 84 65 295 452 Total area of leases started, sq.m. 18,420 20,530 57,220 79,130 Occupancy rate at end of the period, % 94.6 94.1 94.6 95.7 Average remaining length of lease portfolio at th
Slide 52: Property portfolio – Sweden
Property portfolio – Sweden LEASE PORTFOLIO Q4 2009 Q3 2009 2009 2008 Number of leases started during the period 245 71 449 58 Total area of leases started, sq.m. 42,163 2,995 59,351 15,340 Occupancy rate at end of the period, % 94.7 95.0 94.7 96.0 Average remaining length of lease portfolio at the
Slide 53: Property portfolio – The Baltic Countries
Property portfolio – The Baltic Countries LEASE PORTFOLIO Q4 2009 Q3 2009 2009 2008 Number of leases started during the period 57 4 129 62 Total area of leases started, sq.m. 8,679 264 25,057 30,490 Occupancy rate at end of the period, % 99.4 99.7 99.4 99.8 Average remaining length of lease portfoli
Slide 54: Illustrative Calculation of ICR Covenant Using FY 2009 Financials
Illustrative Calculation of ICR Covenant Using FY 2009 Financials* FY 2009 EBITDA for covenant EBITDA = EUR 107.7 + EUR 0.7 + calculation: direct operating profit EUR 0.1 + depreciations +/- non-cash and = EUR 108.5 million for previous exceptional items 12-month period EUR million Q4 Q3 Q2 Q1 Cumul
Slide 55: Illustrative Calculation of Equity Ratio Covenant
Illustrative Calculation of Equity Ratio Covenant Using FY 2009 Financials* Equity for covenant calculation: Equity = EUR 767.9 + EUR 139.3 – total shareholders’ equity + EUR 36.8 + EUR 22.7 subordinated debt (cf. Note 23) – = EUR 893.1 million as at 31 Dec minority interest +/– fair value of 2009 d
Slide 56: 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 57: Citycon Core Shopping Centres
Citycon Core Shopping Centres Iso Omena Myyrmanni Trio 1977/87/2008 Lippulaiva Built 2001 1994 32.200 m2 1993 GLA 61.300 m2 40.200 m2 89.3 % 23.000 m2 Ownership 100 % 100 % 100 % Finland Koskikeskus Forum Columbus 1988 1953/91 1997/07 25.700 m2 17.400 m2 20.400 m2 88 % Citycon 69 % 100 % Liljeholmst
Slide 58: Contact information
Contact information INVESTOR RELATIONS Mr Petri Olkinuora CEO Tel. +358 207 664 401 Petri.Olkinuora@citycon.fi Mr Eero Sihvonen CFO, Executive Vice President Tel. +358 50 5579 137 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola IRO Tel. +358 40 5666 070 Hanna.Jaakkola@citycon.fi 58 FY 2009
Slide 59: Disclaimer
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