Slide 1: Citycon presentation Q3/2015 Results
2015 Q3 Citycon presentation 2015 Q3/2015 Results Q3
Slide 2: Leading owner, manager, and developer of shopping centres in the Nordics and Baltics
Leading owner, manager, and developer of 2015 shopping centres in the Nordics and Baltics Q3 Key figures 30 September 2015 # of shopping centres1) 54 # of managed assets 14 Gross leasable area, sq.m. 1,274.1 Total assets, EUR billion1) 4.7 Norway Market cap, EUR billion 2 S&P BBB; Moody’
Slide 3: Offering the best environment for success
2015 Offering the best environment for success Q3 1 2 3 Clear focus Exceptional platform Strong capital base MISSION Pure retail player focused Leveraging the Sufficient and VISION on shopping centres in expertise at each stage attractively priced We offer the best the most attractive of the shoppin
Slide 4: True Pan-Nordic leader
2015 True Pan-Nordic leader Q3 Retail GLA (thousand sq.m.)1) 340 Finland 140 125 120 105 280 Sweden 230 225 225 200 #3 #1 1 275 Norway #2 400 #1 305 200 95 110 95 Estonia 65 60 20 4 1) Source: Company reports, SEB analysis. Includes only majority-owned shopping centres. Includes some assumptions on
Slide 5: Urban crosspoints driven by strong demographics
Urban crosspoints driven by strong 2015 demographics Q3 Core assets: Urban environments, located where people live and work Strong population growth and natural footfall Integrated with public transportation Shared access to education, health care, culture, municipal services 5
Slide 6: Core portfolio of grocery-anchored shopping centres
Core portfolio of grocery-anchored 2015 shopping centres Q3 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% 6
Slide 7: Citycon's five core assets
2015 Citycon’s five core assets Q3 Sweden – Kista Galleria Finland – Iso Omena Sweden – Liljeholmstorget Galleria Finland – Koskikeskus Norway – Herkules Total GLA Fair value Net rental Economic Visitors 2014 Sales 2014 (sq.m.) (EUR million)1) yield, %1) occupancy, %1) (millions) (EUR million) Kista
Slide 8: Citycon's portfolio is well positioned for the changing retail landscape
Citycon’s portfolio is well positioned 2015 for the changing retail landscape Q3 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 <50
Slide 9: Q3/2015 Stable results – Sektor fully consolidated
2015 Q3 Q3/2015 STABLE RESULTS – SEKTOR FULLY CONSOLIDATED 9
Slide 10: Highlights Q3/2015
2015 Highlights Q3/2015 Q3 Sektor acquisition completed successfully Consolidated as of 1 July Performance according to expectations Overall robust operating results Strong Sweden, stable Norway, flat Finland Overall strong occupancy and positive fair value change Significant progress in (re
Slide 11: Robust financial and operating performance
2015 Robust financial and operating performance Q3 Q1-Q3/ Q1-Q3/ MEUR Q3/2015 Q3/2014 % 2015 2014 Net rental income 59.7 44.2 142.1 127.8 11.1 EPRA Operating profit 54.7 40.4 127.2 114.7 10.8 EPRA Earnings 38.9 29.6 96.4 75.4 27.7 EPRA Earnings per share 0.046 0.047 0.136 0.141 -4.0 (basic) EPRA NAV
Slide 12: Sektor integration moving as planned
2015 Sektor integration moving as planned Q3 Organisation in place One Citycon cluster model adopted Operating performance according to expectations High occupancy of 98.4% Fair value confirmed by JLL in line with acquisition price Fair value decrease due to FX-change Sektor rebranded
Slide 13: Value creation through synergies
2015 Value creation through synergies Q3 STATUS Savings in Sektor SG&A of EUR 1-1.5 ORGANIZATION ≥ EUR 1 million p.a. ≥10% million p.a. Tenant, specialty leasing, LFL NRI growth of OPERATIONS marketing, digital optimisation On track 100 bps above CPI Improved purchasing power Extension / (re
Slide 14: Continued like-for-like NRI growth and strong occupancy
Continued like-for-like NRI growth and 2015 strong occupancy Q3 Like-for-like NRI growth Occupancy rate 6% 100% 5% 4.5 % 98.4% 98.1% 4% 98% 3% 96.7% 96.2% 2% 95.9% 0.6 % 96% 95.2% 1% 0.0 % 0% -1% 94% -2% -3% -2.6 % 92% Finland Sweden Baltics & Total Finland Sweden Baltics & Total excl. Norway Total
Slide 15: Positive sales development in Sweden, Finland under pressure
Positive sales development in Sweden, 2015 Finland under pressure Q3 Sales in LFL shopping centres Footfall in LFL shopping centres 10% 8% 6% 4% 2% 2% 0% 0% -2% -2% -1% -3% -2% -4% -6% -4% -7% -10% -8% Finland Sweden Baltics & Total Finland Sweden Baltics & New Total New Business Business Kista Ga
Slide 16: Strong retail environment in the Nordics except for Finland
Strong retail environment in the Nordics 2015 except for Finland Q3 Finland Retail sales January-August 2015 10% GDP forecast for 2015 modest 8.0% 8% Consumers still hold back on spending 6% Norway 4% 3.2% 3.1% Lower oil price puts pressure on the 2% 1.2% economy; nevertheless healthy 0% infla
Slide 17: Progressing development portfolio
2015 Progressing development portfolio Q3 Actual gross Expected yield Expected Area before/ investments by on completion Pre-leasing Completion investment, after, sq.m. 30.9.2015, when stabilised, rate, % target MEUR 1) MEUR % 63,300 182.0 Part A: 65% Q3/2016 Iso Omena 67.4 6.1 99,000 (250.0) Total:
Slide 18: Successful grand opening of IsoKristiina
2015 Successful grand opening of IsoKristiina Q3 Completely refurbished with 80 shops and services Exceptional combination of shopping centre, theatre and hotel Strong brands e.g. Marks & Spencer, Claes Ohlson, Marimekko and Kesko 18
Slide 19: Good progress in Iso Omena pre-letting
2015 Good progress in Iso Omena pre-letting Q3 4th grocery, Lidl, signed Starbucks to open a cafe in the bus terminal O’Learys signed, adding to leisure Bus terminal level fully leased 19
Slide 20: Mölndal Galleria in Gothenburg – construction started in August
Mölndal Galleria in Gothenburg – construction 2015 started in August Q3 Successful pre-leasing >50% Expected annual visitors of 5-6 million Part of Mölndal’s new city centre 20
Slide 21: Completed refurbishment and rebranding in Storbyen Oslo area
Completed refurbishment and rebranding in 2015 Storbyen Oslo area Q3 21
Slide 22: Development pipeline one project committed and one planned
Development pipeline 2015 one project committed and one planned ≥ 2015 Q3 Estimated Expected Target for project gross project area/additio investment, initiation/ nal sq.m. MEUR completion C Tumba Extension project combined with a new bus terminal. 11,000 55 2015/2017 Centrum Zoning has been approve
Slide 23: Summary of the quarter
2015 Summary of the quarter Q3 Finland – we deliver despite weak retail environment Successful execution of Sektor acquisition and refinancing Norway – results and valuation in line with expectations; solid foundation for future growth Full focus on operations and Norway integration Committed to LTV
Slide 24: Financial results
2015 Q3 FINANCIAL RESULTS
Slide 25: Financial results
2015 Financial results Q3 Q1-Q3/ Q1-Q3/ Q1-Q3/ MEUR Q3/2015 Q3/2014 2015 incl. 2015 2014 Kista 100% Net rental income, total 59.7 44.2 142.1 127.8 164.4 NRI, Finland 25.2 26.7 73.8 77.1 73.8 NRI, Sweden 10.5 10.3 30.3 29.7 52.7 NRI, Baltics & New Business 6.0 7.2 19.8 21.1 19.8 NRI, Norway 18.1 - 18
Slide 26: NRI development
2015 NRI development Q3 EUR million 150 18.2 -0.8 -2.7 145 0.5 -1.0 142.1 140 135 130 127.8 125 Q1-Q3/2014 Acquisitions (Re)development Divestments LFL properties Other (incl. Q1-Q3/2015 projects exchange rates & IFRIC 21) 26
Slide 27: Occupancy improved following Sektor acquisition
Occupancy improved following 2015 Sektor acquisition Q3 30 Sept 2015 30 Sept 2014 Occupancy rate (economic), % 96.7 95.7 LFL occupancy rate (economic), % 95.6 95.7 Occupancy cost ratio, % 9.3 9.3 (LFL shopping centres) Average rent, EUR/sq.m./mth 22.4 21.7 Average rent development stable, though u
Slide 28: Stable leasing indicators
2015 Stable leasing indicators Q3 Q1-Q3/ Q1-Q3/ Q3/2015 Q3/2014 2015 2014 Average rent, EUR/sq.m. 22.4 21.7 22.4 21.7 # of leases started 199 139 591 411 Total area of leases started, sq.m. 47,275 27,999 121,238 88,400 Average rent of leases started, 25.1 18.1 22.9 19.0 EUR/sq.m. # of leases ended 3
Slide 29: Income statement
2015 Income statement Q3 Q1-Q3/ Q1-Q3/ Change- MEUR Q3/2015 Q3/2014 2015 2014 % Turnover 86.0 61.4 206.2 184.5 11.8 Property operating expenses -25.7 -16.6 -63.1 -55.6 13.5 Other expenses from leasing operations -0.5 -0.5 -1.1 -1.1 -3.1 Net rental income 59.7 44.2 142.1 127.8 11.1 Administrative exp
Slide 30: Positive valuation driven by Sweden
2015 Positive valuation driven by Sweden Q3 Fair value changes Weighted average Fair value MEUR yield requirement, % 30 Sept 30 Sept Q3/2015 Q3/2015 Q1-Q3/2015 2015 2014 Total 4,036.1 4.1 7.1 6.0 6.2 Finland 1,638.7 -8.4 -25.4 5.9 6.1 Sweden1) 702.2 8.9 27.0 5.5 5.8 Baltics and New 362.8 3.6 5.5 7.0
Slide 31: Goodwill related to Sektor acquisition
2015 Goodwill related to Sektor acquisition Q3 MEUR Purchase price (NAV) 476.5 Sektor IFRS net asset value acquired 345.9 Goodwill 130.6 FX-change from the fixed NOK/EUR-rate 52.2 Goodwill total 182.8 JLL confirmed the Sektor property fair values to be approximately in line with the acquisition pr
Slide 32: Strong balance sheet
2015 Strong balance sheet Q3 MEUR 30 Sept 2015 30 Sept 2014 31 Dec 2014 Investment properties 4,036.1 2,759.0 2,769.1 Total non-current assets 4,526.5 2,944.7 2,965.2 Total current assets 108.1 143.5 64.8 Total assets 4,692.4 3,095.9 3,037.2 Total shareholder’s equity 2,251.6 1,692.1 1,652.5 Total l
Slide 33: Financing overview
2015 Q3 FINANCING OVERVIEW 33
Slide 34: Sektor refinancing in final stages
2015 Sektor refinancing in final stages Q3 Three bonds in September: NOK 1,400 million bond 10 yr, fixed 3.90% NOK 1,250 million bond 5.5 yr, floating 3m Nibor +155 bps Eurobond of EUR 300 million 7 yr, fixed 2.375%, has been swapped into NOK Divestment proceeds of approx. EUR 76 million u
Slide 35: Increased debt level following Sektor acquisition
Increased debt level following Sektor 2015 acquisition Q3 Loan to Value Weighted average interest rate 5% 70% 4.25% 4.07% 4.12% 60% 57.5% 4% 54.5% 3.39% 3.28% 49.3% 50% 45.2% 3% 40% 38.6% 2% 30% 20% 1% 2011 2012 2013 2014 Q3/2015 2011 2012 2013 2014 Q3/2015 35
Slide 36: Financing key figures
2015 Financing key figures Q3 Q3/2015 Q3/2014 Q4/2014 Interest bearing debt, fair value, MEUR 2,022.6 1,200.9 1,1884.4 Available liquidity, MEUR 379.0 514.2 449.8 Average loan maturity, years 5.5 3.8 5.9 Interest hedging ratio, % 88.2 87.4 88.0 Weighted average interest rate, %1) 3.39 4.03 3.28 Loan
Slide 37: Debt type and currency split
2015 Debt type and currency split Q3 Breakdown by debt type 1) Breakdown by currency 1) CP Other RCF Bank term loans 6% 1% 9% 7% NOK 30% EUR 57% SEK 13% Bonds 77% Currency breakdown shifted to 30% NOK debt Part of EUR debt converted to SEK and NOK debt using cross-currency swaps 1) Calculated ba
Slide 38: Debt maturities and interest risk hedging
2015 Debt maturities and interest risk hedging Q3 Maturity profile of debt 1) Debt by fixing type 500 500 Loans Floating rate Floating to fixed swaps Fixed rate 400 debt debt Undrawn loan facilities 350 12% 317 71% 300 300 275 Fixed rate swaps 200 187 182 17% 147 129 131 107 100 30 37 0 2015 2016 20
Slide 39: Outlook 2015 lifted
2015 Outlook 2015 lifted Q3 EPRA Operating profit EPRA Earnings EUR million EUR million 190 172.8- 150 127.7- 178.8 133.7 170 130 149.1 149.8 150 110 135.7 99.7 130 90 86.7 117.4 110 70 63.9 53.3 90 50 70 30 2011 2012 2013 2014 2015E 2011 2012 2013 2014 2015E EPRA Operating profit EUR 23 to 29 mil
Slide 40: Property portfolio
2015 Q3 PROPERTY PORTFOLIO 40
Slide 41: Lease portfolio
2015 Lease portfolio Q3 4,204 lease agreements with an average length of 3.3 years Total GLA 1,274.100 sq.m. Rents linked to CPI (nearly all agreements) Annualised potential rental value for the portfolio is EUR 343.5 million Occupancy rate (economic) Average lease maturity years 99% 4 3.4 3
Slide 42: Property portfolio
2015 Property portfolio Q3 Top 5 tenants Occupancy cost ratio LFL shopping centres, rolling 12 mth Average remaining Proportion of length of leases, Total 9.3% Q3/2015 rental income, % years Kesko 8 5.7 Finland 9.5% S Group 5 6.6 VarnerGruppen 4 3.2 Sweden 7.6% ICA Gruppen 4 3.6 NorgesGruppen 2 4.1
Slide 43: Valuation yield development
2015 Valuation yield development Q3 Citycon's valuation yield development 8,0% 7,0% 7.0% 6,0% 6.0% 5.9% 5.5% 5,0% Q3/2009 Q3/2010 Q3/2011 Q3/2012 Q3/2013 Q3/2014 Q3/2015 Finland Sweden Baltics and New Business Total 43
Slide 44: Cityconline – building community and loyalty
2015 Cityconline – building community and loyalty Q3 712,000 Facebook likers 342,000 News subscribers Mobile apps in all largest centres >20 pick-up points 350 digital screens 44
Slide 45: Backup information
2015 Q3 BACKUP INFORMATION
Slide 46: History of Citycon
2015 History of Citycon +25 years of retail experience and portfolio growth Q3 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 as
Slide 47: Economic outlook
2015 Economic outlook Q3 Change % GDP growth Change % Inflation 4% 3% 3% 2% 2% 1% 1% 0% 0% Finland Sweden Denmark Estonia Norway Euro area Finland Sweden Denmark Estonia Norway Euro area -1% -1% -2% 2014 2015E 2016E 2017E 2014 2015E 2016E 2017E 12% % Unemployment % Public sector debt as % of GDP 10%
Slide 48: Environmental targets and results
2015 Environmental targets and results Q3 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 st
Slide 49: Ownership, 30 September 2015
2015 Ownership, 3O September 2015 Q3 Established and listed on Nasdaq Helsinki in 1988 Other Nominee- Market cap EUR 1,958.0 million 29.6% registered 70.4% Total registered shareholders 8,083 of which nominee-registered 70.4% Largest shareholders: Gazit-Globe 43.4% CPPIB 15.0% Ilmarine
Slide 50: Contact information
2015 Q3 Contact information Eero Sihvonen, CFO, Exec. VP Tel. +358 50 557 9137 Henrica Ginström, VP IR & Communications Tel. +358 50 554 4296 50
Slide 51: Disclaimer
2015 Disclaimer Q3 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 a
Slide 52: citycon.com
Cl CITYCON citycon.com