Slide 1: Citycon presentation Q1–Q4 Full Year Results 2014
Q1–Q4 2014 Citycon presentation Q1–Q4 Full Year Results 2014
Slide 2: Disclaimer
Q1–Q4 Disclaimer 2014 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 t
Slide 3: Leading owner, manager, and developer of shopping centres in the Nordics and Baltics
Leading owner, manager, and developer of Q1–Q4 shopping centres in the Nordics and Baltics 2014 Key figures 31 December 2014 # of shopping centres1) 35 # of assets 60 Finland Gross leasable area, sq.m. 933,040 Sweden Total assets, EUR billion1) 3.3 Market cap, EUR billion 1.5 S&P BBB; Mo
Slide 4: A focused company
Q1–Q4 A focused company 2014 Portfolio selection criteria: Dominant in Located in urban Grocery- (Re)development potential catchment area, environment in anchored and intensification VISION located in markets growing cities directly and necessity- opportunities through with high barriers connected t
Slide 5: Leading position in core markets
Q1–Q4 Leading position in core markets 2014 Thousand sq.m. Nordic and Baltic region Thousand sq.m. Finland 1 500 400 1 315 353 300 1 000 805 694 200 500 129 106 106 101 326 273 100 0 0 Thousand sq.m. Sweden Thousand sq.m. Estonia 400 200 338 300 272 225 219 106 196 200 100 92 100 31 31 24 0 0 5 Incl
Slide 6: Focus on urban locations driven by strong demographics
Focus on urban locations driven by Q1–Q4 strong demographics 2014 Core assets: Urban environments, located where people live and work Strong population growth and natural footfall Integrated with public transportation Benefit from high barriers to entry, e.g., land constraints, zoning restri
Slide 7: Core portfolio of grocery-anchored shopping centres
Core portfolio of grocery-anchored Q1–Q4 shopping centres 2014 Rental income by category for shopping centres FY2014 2% 7% 9% 26% Clothes and fashion Groceries Leisure, home supplies 8% Services and offices Cafes and restaurants Health and beauty 11% Department stores Other specialty stores 20% 18%
Slide 8: Citycon’s five core assets
Q1–Q4 Citycon’s five core assets 2014 Sweden – Kista Galleria Finland – Iso Omena Sweden – Liljeholmstorget Galleria Finland – Koskikeskus Estonia – Rocca al Mare Total GLA Fair value Net rental Economic Visitors 2014 Sales 2014 (sq.m.) (EUR million)1) yield, %1) occupancy, %1) (millions) (EUR milli
Slide 9: Citycon’s portfolio is well positioned for changing retail landscape
Citycon’s portfolio is well positioned Q1–Q4 for changing retail landscape 2014 Citycon’s response Urbanisation Growing urban population 87% of total portfolio in main cities Increased urban GDP per capita 70% in capital cities Convenience Aging population and increasing 100% of centres located <500
Slide 10: Business Environment
Q1–Q4 2014 BUSINESS ENVIRONMENT 10
Slide 11: Consumer confidence
11 0 -50 -40 -30 -20 -10 10 20 30 40 1.1.2010 1.3.2010 1.5.2010 Source: Eurostat 1.7.2010 1.9.2010 1.11.2010 Finland 1.1.2011 1.3.2011 1.5.2011 1.7.2011 Sweden 1.9.2011 1.11.2011 Consumer confidence 1.1.2012 Estonia 1.3.2012 1.5.2012 1.7.2012 1.9.2012 Lithuania 1.11.2012 1.1.2013 1.3.2013 1.5.2013 D
Slide 12: Economic outlook
Q1–Q4 Economic outlook 2014 Change % GDP growth Change % Inflation 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% -1% Finland Sweden Denmark Estonia Euro area -1% Finland Sweden Denmark Estonia Euro area -2% 2012 2013 2014 2015E 2016E 2012 2013 2014 2015E 2016E % Unemployment % Public sector debt as % of GDP 1
Slide 13: Highlights
Q1–Q4 2014 HIGHLIGHTS 2014 13
Slide 14: 2014: A year of action with solid performance and a much stronger balance sheet
Q1–Q4 2014 2014: A YEAR OF ACTION WITH SOLID PERFORMANCE AND A MUCH STRONGER BALANCE SHEET 14
Slide 15: 2014: A year of action
Q1–Q4 2014: A year of action 2014 EUR 200 million directed share issue – CPPIB becomes a 15% shareholder EUR 200 million rights issue – significant deleveraging Investment-grade credit ratings upgraded to BBB & Baa2 JV with NCC regarding (re)development of Mölndals Galleria in Gothenburg Successful
Slide 16: Solid financial and operating performance
Q1–Q4 Solid financial and operating performance 2014 EUR million FY2014 FY2013 Change-% Net rental income 169.4 168.9 0.3 EPRA Operating profit 149.8 149.1 0.4 EPRA Earnings 99.7 86.7 14.9 EPRA Earnings per share (basic) 0.191 0.203 -5.9 EPRA NAV 3.01 3.13 -3.7 Like-for-like gross rental income in
Slide 17: Continued growth in like-for-like NRI in all regions
Continued growth in like-for-like NRI Q1–Q4 in all regions 2014 Like-for-like NRI growth Continued strong like-for-like 6% NRI growth in a close to zero inflation environment 4.9% 5% 4.6% Shopping centres: 3.2% 3.8% Supermarkets & shops: 0.1% 4% 2.9% 3% Growth in all regions Finland: 2.5%
Slide 18: Sales and footfall in Finland under pressure
Q1–Q4 Sales and footfall in Finland under pressure 2014 LFL shopping centre sales LFL shopping centre footfall 15% 8% 13% 13% 6% 11% 4% 3% 9% 7% 2% 1% 5% 0% 3% 1% -2% 1% -2% -4% -3% -1% -1% -3% -2% -6% -5% -8% Finland Sweden Baltics & New Total Finland Sweden Baltics & New Total Business Business 18
Slide 19: Retail environment continues to be challenging in Finland and positive in Sweden
Retail environment continues to be Q1–Q4 challenging in Finland and positive in Sweden 2014 Finland Retail sales 2014 GDP forecast for 2015 8% 6.0% modest 6% 4% 3.4% Consumers hold back on 2% spending 0% Sweden -2% -1.0% -2.1% Strong economic -4% Finland Sweden Estonia Denmark fundamentals
Slide 20: Portfolio improvement in 2014
Q1–Q4 Portfolio improvement in 2014 2014 12 properties approx. EUR 30 million (Note: 26 properties approx. EUR 111 Divestments million since July 2011) Total investment volume approx. EUR (Re)developments 122 million Mainly Iso Omena, IsoKristiina & Stenungs Torg GIC’s 40% minority stake in
Slide 21: One Citycon style and branding started in shopping centres
One Citycon style and branding started in Q1–Q4 shopping centres 2014 21
Slide 22: Cityconline – building community and loyalty
Q1–Q4 Cityconline – building community and loyalty 2014 506 000 facebook likers + 23% 135 000 newsletter subscribers Mobile apps in all largest centres 22 pick-up points 225 digital screens (+73%) 22
Slide 23: 2015-2016: Reposition and further enhance quality of portfolio
2015-2016: Reposition and further enhance Q1–Q4 quality of portfolio 2014 Urban Focus on asset criteria Convenience / daily needs Upside potential through management Approx. EUR 150-250 million Divestments Meeting investment criteria Selective acquisitions Approx. EUR 300-400 million (Re
Slide 24: Further enhancement of portfolio: Developments progressing
Further enhancement of portfolio: Q1–Q4 Developments progressing 2014 Citycon’s Actual Expected Area (expected) investments yield on Pre-leasing Completion before/ investment by completion rate, % target after, sq.m. need, 31.12.2014, when EUR m EUR m stabilised, % Extension & Iso 63,300 182.0 36.6
Slide 25: Stenungs Torg - phase 1 completed
Q1–Q4 Stenungs Torg - phase 1 completed 2014 Phase 1 completed in Oct 2014 New main entrance H&M & Nordic Wellness new anchor tenants Phase 2 further extension and upgrade 25
Slide 26: Iso Omena - top shopping centre in the Helsinki region
Iso Omena - top shopping centre in the Q1–Q4 Helsinki region 2014 New concept with improved circulation Total extension approx. 35,000 sq.m. (of which retail 29,000 sq.m.) Grand opening Q4/2016 Full integration with new metro 35,000 passengers/day 26
Slide 27: Iso Omena - top shopping centre in the Helsinki region
Iso Omena - top shopping centre in the Q1–Q4 Helsinki region 2014 Ground floor Zone B+D 27
Slide 28: IsoKristiina – prime shopping and entertainment location
IsoKristiina – prime shopping and Q1–Q4 entertainment location 2014 Opening of phase 1 in May 2015 Grand opening Oct 2015 Theather, healthcare, gym, and cinema integrated Strong anchor profile e.g. Sokos / Marks & Spencer, Kesko, Claes Ohlson 28
Slide 29: Kista Galleria – continue (re)development and extension
Kista Galleria – continue (re)development and Q1–Q4 extension in a three step program 2014 Full action since January 2013 1) Upgrade tenant mix/enhance customer flow - Digital library - New northern entrance 2) Food court upgrade 2015 3) Extension 10,000m2 (Kista Gateway) ~2017/2018 Total investme
Slide 30: Development pipeline: 3 projects committed and one planned ≥ 2015
Development pipeline Q1–Q4 3 projects committed and one planned ≥ 2015 2014 Citycon’s Estimated Target for expected project project investment area/additi initiation/ need, onal sq.m. completion EUR m Building of a new shopping centre replacing the old C Mölndals retail property. Joint venture agree
Slide 31: Mölndals Galleria – urban city gallery focusing on daily necessities
Mölndals Galleria – urban city gallery focusing Q1–Q4 on daily necessities 2014 50% JV with NCC PD Acquisition of NCC’s share at completion Construction start in 2015 after finalised zoning and pre-leasing Main tenants about to sign Grand opening early 2018 31
Slide 32: Forward purchase of Straedet in Køge
Q1–Q4 Forward purchase of Straedet in Køge 2014 Announced 28 Jan 2015 Forward purchase from TK Development at fixed 6.25% yield Modern high-street like open-air shopping centre in the Copenhagen area Completion and acquisition 32 Q2/2017
Slide 33: (Re)developments and refurbishments put pressure on 2015 and starts contributing in 2016
Q1–Q4 (Re)developments and refurbishments put pressure on 2015 and starts contributing in 2016 2014 Grand opening Oct 2015 IsoKristiina (re)development Connection to extension incl. partial Iso Omena (re)development demolition of parking building 7% of GLA offline since Feb 2015 Restructurin
Slide 34: Going forward
Q1–Q4 Going forward 2014 2015 EPRA EPS guidance 17.5-19.5 (Re)developments and selected acquisitions support further earnings growth 2016/2017 Maintain strong capital base Target LTV: 40-45% 34
Slide 35: Financial Review
Q1–Q4 2014 FINANCIAL REVIEW 35
Slide 36: Financial results
Q1–Q4 Financial results 2014 FY2014 EUR million FY2014 FY2013 Change-% incl. Kista Net rental income, total 169.4 168.9 0.3 199.6 NRI, Finland 103.0 103.5 -0.5 103.0 NRI, Sweden 38.9 39.7 -2.1 69.2 NRI, Baltics & New Business 27.5 25.6 7.3 27.5 EPRA Operating profit 149.8 149.1 0.4 177.7 EPRA Earnin
Slide 37: NRI development
Q1–Q4 NRI development 2014 EUR million 174 LFL NRI growth 2.9% 172 3.8 1.9 170 169.4 168.9 -2.3 168 -0.4 -2.6 166 164 162 160 2013 Acquisitions (Re)development Divestments LFL properties Other (incl. 2014 projects exchange rates) Positive like-for-like NRI performance in all countries 37
Slide 38: Stable leasing indicators
Q1–Q4 Stable leasing indicators 2014 Q4/2014 Q4/2013 Q3/2014 Occupancy rate (economic), % 96.3 95.7 95.7 LFL occupancy rate (economic), % 95.8 95.0 95.2 Occupancy cost ratio, % 8.6 8.7 8.7 (LFL shopping centres) Average rent, EUR/sq.m./mth 21.6 21.5 21.7 Occupancy increase of 0.6 ppt driven by str
Slide 39: Stable leasing indicators
Q1–Q4 Stable leasing indicators 2014 Q4/2014 Q4/2013 FY2014 FY2013 Average rent, EUR/sq.m. 21.6 21.5 21.6 21.5 # of leases started 184 163 595 611 Total area of leases started, sq.m. 34,168 52,697 122,568 150,013 Average rent of leases started, 22.1 17.5 19.9 18.8 EUR/sq.m. # of leases ended 222 458
Slide 40: Decreasing opex and stable admin expenses
Q1–Q4 Decreasing opex and stable admin expenses 2014 Property operating expenses Administrative expenses EUR million EUR million 90 30 75.8 78.4 27.7 80 74.4 26.5 71.6 67.4 25 23.3 70 20.6 20.7 60 20 50 15 40 30 10 20 5 10 0 0 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 40
Slide 41: Income statement
Q1–Q4 Income statement 2014 Change- EUR million Q4/2014 Q4/2013 FY2014 FY2013 % Turnover 60.8 62.0 245.3 248.6 -1.3 Property operating expenses 19.1 19.6 74.4 78.4 -5.1 Other expenses from leasing operations 0.4 0.4 1.6 1.3 17.4 Net rental income 41.3 41.9 169.4 168.9 0.3 Administrative expenses 6.3
Slide 42: Positive valuation driven by Sweden and Baltics
Positive valuation driven by Q1–Q4 Sweden and Baltics 2014 Valuation change Net yield requirement, % EUR million FY2014 31 Dec 2014 31 Dec 2013 Total 15.7 6.1 6.3 Finland -15.8 6.1 6.2 Sweden 13.3 5.7 5.9 Baltics and New Business 18.1 7.2 7.3 42
Slide 43: Balance sheet
Q1–Q4 Balance sheet 2014 EUR million 31 Dec 2014 31 Dec 2013 Investment properties 2,769.1 2,733.5 Total non-current assets 2,965.2 2,896.2 Total current assets 64.8 74.5 Total assets 3,037.2 2,973.0 Total shareholder’s equity 1,652.5 1,278.8 Total liabilities 1,384.8 1,694.2 Total liabilities and s
Slide 44: Financing Overview
Q1–Q4 2014 FINANCING OVERVIEW
Slide 45: Stronger balance sheet
Q1–Q4 Stronger balance sheet 2014 Loan to Value Weighted average interest rate 70% Decrease of 5,0% 19.6 %-points over 5 years 4,5% 60% 58.2% 57.5% 4.25% 54.5% 4.07% 4.12% 4,0% 3.91% 49.3% 50% 3,5% 3.28% 40% 38.6% 3,0% 30% 2,5% 20% 2,0% 2010 2011 2012 2013 2014 Dec 2010 Dec 2011 Dec 2012 Dec 2013 De
Slide 46: Financing key figures
Q1–Q4 Financing key figures 2014 Q4/2014 Q4/2013 Q3/2014 Interest bearing debt, fair value, EUR million 1,188.4 1,471.3 1,200.9 Available liquidity, EUR million 449.8 435.4 514.2 Average loan maturity, years 5.9 4.1 3.8 Hedging ratio, % 88.0 83.4 87.4 Weighted average interest rate, %1) 3.28 4.12 4.
Slide 47: Debt type and currency split
Q1–Q4 Debt type and currency split 2014 Breakdown by debt type 1) Breakdown by currency 1) CP Other Bilateral bank 6% RCF 1% term loans 9% 1% SEK 22% EUR 78% Bonds 83% Share of bond debt has increased following the EUR 350 million bond issue Currency breakdown shifted more towards EUR after bond
Slide 48: Debt maturities and interest risk hedging
Q1–Q4 Debt maturities and interest risk hedging 2014 Maturity profile of debt 1) Debt by fixing type 500 Floating rate 500 Loans debt 398 12% 400 Undrawn loan facilities 350 Fixed rate swaps 300 5% 200 143 104 83 100 5 3 Fixed rate debt 0 83% 2015 2016 2017 2018 2019 2020 2024 Average loan maturit
Slide 49: Financial expenses breakdown
Q1–Q4 Financial expenses breakdown 2014 EUR million Q4/2014 Q4/2013 FY 2014 FY 2013 Interest expenses -10.1 -15.3 -51.0 -64.3 A Foreign exchange gains (+) / losses (-) 0.2 0.0 0.1 0.0 Other expenses B -3.8 -1.4 -33.8 -32.2 Total expenses -13.7 -16.7 -84.7 -96.5 Interest income C 1.9 1.5 7.2 6.5 Net
Slide 50: Outlook 2015
Q1–Q4 Outlook 2015 2014 EPRA Operating profit EPRA Earnings EUR million EUR million 105.7- 170 110 113.7 141.8- 149.8 99.7 150 149.1 149.8 135.7 90 86.7 130 117.4 110 70 63.9 90 53.3 50 70 50 30 2011 2012 2013 2014 2015E 2011 2012 2013 2014 2015E EPRA Operating profit EUR (-8) to 0 million EPRA
Slide 51: Outlook 2015
Q1–Q4 Outlook 2015 2014 0,250 + Positive like-for-like NRI growth + Decreased financing expenses 0.175-0.195 0,200 0.191 - Higher share count 0,150 - Short-term impact of ongoing (re)developments - Full-year impact of non-core 0,100 disposals 0,050 0,000 EPRA EPS 2014 EPRA EPS 2015E 51
Slide 52: Dividend per share
Q1–Q4 Dividend per share 2014 Proposal by Board of Directors: EUR 0.15 per share return of equity from invested unrestricted equity fund Represents a dividend yield of approx. 4.9% (based on current share price) Payment on 30 March 2015 Dividend/equity return distribution EUR per share 0,18
Slide 53: Property Portfolio
Q1–Q4 2014 PROPERTY PORTFOLIO 53
Slide 54: Lease portfolio
Q1–Q4 Lease portfolio 2014 3,158 (3,287) lease agreements with an average length of 3.2 (3.5) years Total GLA 933,040 sq.m. (961,790 sq.m.) Rents linked to CPI (nearly all agreements) Annualised potential rental value for the portfolio is EUR 243.1 million Occupancy rate (economic) Average l
Slide 55: Property portfolio
Q1–Q4 Property portfolio 2014 Top 5 tenants Occupancy cost ratio LFL shopping centres, rolling 12 mth Proportion of Average rental income, remaining length Total 8.6% FY 2014 % of leases, years Kesko 15.4 5.1 Finland 9.6% S Group 6.0 5.9 ICA Gruppen 4.1 4.3 Sweden 6.8% Stockmann 2.8 1.8 H&M 2.1 4.2
Slide 56: Valuation yield development
Q1–Q4 Valuation yield development 2014 Citycon's valuation yield development 8,0% 7.2% 7,0% 6.1% 6,0% 5.7% 5,0% Q4/2009 Q4/2010 Q4/2011 Q4/2012 Q4/2013 Q4/2014 Finland Sweden Baltics and New Business Total 56
Slide 57: Environmental targets and results
Q1–Q4 Environmental targets and results 2014 Performance in 2014 Climate change In LFL SC: Yearly reduction of greenhouse gas emission by 2−3% -2% Energy Yearly reduction of energy consumption (electricity, heating and cooling) In LFL SC: by 2–3% -6% Carrying out a renewable energy feasibility
Slide 58: Shares and Shareholders
Q1–Q4 2014 SHARES AND SHAREHOLDERS 58
Slide 59: Share performance and volume
59 1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 6 000 000 7 000 000 0 Shares 31.1.2012 29.2.2012 30.3.2012 30.4.2012 31.5.2012 29.6.2012 31.7.2012 31.8.2012 28.9.2012 31.10.2012 30.11.2012 28.12.2012 31.1.2013 28.2.2013 28.3.2013 30.4.2013 31.5.2013 Citycon share volume 28.6.2013 31.7.2013 30.8
Slide 60: Ownership, 31 December 2014
Q1–Q4 Ownership, 31 December 2014 2014 Established and listed on the Helsinki Shareholders Stock Exchange in 1988 Nominee- Market cap EUR 1,530.8 million registered Other 68.9% Total registered shareholders 7,657 31.1% (8,820), of which nominee-registered 68.9% (77.8%) of total Largest share
Slide 61: Back up information
Q1–Q4 2014 BACK UP INFORMATION 61
Slide 62: History of Citycon
Q1–Q4 History of Citycon +25 years of retail experience and portfolio growth 2014 Foundation International expansion New management and new strategy 1988 2003 2011 Founded by Sampo Pension Ltd, Citycon business to include development Citycon’s new CEO, Marcel Kokkeel, Imatran Voima Oy, as well
Slide 63: Contact information
Q1–Q4 2014 Contact information Eero Sihvonen, CFO, Exec. VP Tel. +358 50 557 9137 Henrica Ginström, VP IR & Communications Tel. +358 50 554 4296 63
Slide 64: citycon.com
Q1–Q4 2014 citycon.com