Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q1 2021 Earnings Presentation
34 slides from Citycon Oyj's earnings presentation, 2021
Slide 1: Audiocast Presentation Q1/2021
AUDIOCAST PRESENTATION Q1/2021 1 Q1 2021 I Audiocast
Slide 2: Q1/2021: Quarter over quarter growth
Q1/2021: QUARTER OVER QUARTER GROWTH CITYCON’S FINANCIAL PERFORMANCE: CONTINUED STABILITY CLICK TO EDIT TITLE • NRI was EUR 50.4 million being -3.8% compared to pre-covid Q1/2020 but ahead of the previous quarter. Direct operating profit EUR 44.9 million also exceeded previous quarter but was, howev
Slide 3: Q1/2021: Successful transactions reflect the quality of the portfolio
Q1/2021: SUCCESFUL TRANSACTIONS REFLECT THE QUALITY OF THE PORTFOLIO CLICK TO EDIT TITLE FINANCING ACTIVITY • In Q1 Citycon completed a successful issuance of a green bond of 350 MEUR with a high demand and a highly attractive pricing with a coupon of 1.625%, which was the 2nd best in the company’s
Slide 4: Strong macro economics in the Nordics are expected to continue
STRONG MACRO ECONOMICS IN THE NORDICS ARE EXPECTED TO CONTINUE GDP/CAPITA FORECAST (2020-F2025) GENERAL GOVERNMENT GROSS DEBT/GDP FORECAST (2020-F2025) 80 000 120% 60 000 80% 40 000 40% 20 000 0 0% Denmark Finland Norway Sweden Nordics Eurozone Denmark Finland Norway Sweden Nordics Eurozone 2020 F20
Slide 5: Necessity based urban hubs provide stability
NECESSITY BASED URBAN HUBS PROVIDE STABILITY GROSS RENTAL INCOME BY CATEGORY 2020 OVER 35 % OF GROSS RENTAL INCOME IS FROM ”NECESSITY TENANTS” Groceries 19% Health care 4% • Focus on the daily needs of customers Municipality services 3% • 4 out of the top 5 tenants are grocery stores Offices 3% SMAL
Slide 6: Resilient tenant sales driven by the large share of necessity-based tenants
RESILIENT TENANT SALES DRIVEN BY THE LARGE SHARE OF NECESSITY-BASED TENANTS TENANT SALES DEVELOPMENT • Total tenant sales decreased by -4.7% compared to 2020. Q1/2021 vs. Q1/2020 • Total tenant sales decreased -4.7% year-on-year and like-for-like tenant sales were -5.7% behind last year. This is a d
Slide 7: Leasing activity clearly ahead of Q1/2020 with an increase in average price per sq.m.
LEASING ACTIVITY CLEARLY AHEAD OF Q1/2020 WITH AN INCREASE IN AVERAGE PRICE PER SQ.M. LEASES SIGNED (sq.m.) Leasing activity has been strong despite Covid- OCCUPANCY RATE DEVELOPMENT 19 environment • 64,000 sq.m. of new leases were signed in 94.5 % 21% Q1/2021 which is clearly ahead of 53,000 93.5 %
Slide 8: Results improved quarter over quarter
RESULTS IMPROVED QUARTER OVER QUARTER NET RENTAL INCOME DIRECT OPERATING PROFIT FAIR VALUE CHANGES* 7.9 50.4 44.9 49.9 43.1 -51.1 Q4/2020 Q1/2021 Q4/2020 Q1/2021 Q4/2020 Q1/2021 8 Q1 2021 I Audiocast *Investment properties and Kista Galleria (50%)
Slide 9: Financial overview
FINANCIAL OVERVIEW 9 Q1 2021 I Audiocast
Slide 10: Q1/2021 Financials
CLICK TO EDIT TITLE Q1/2021 FINANCIALS CLICK TO EDIT TITLE Q1/2021 incl. MEUR Q1/2021 Q1/2020 Change Kista 50% Gross rental income 57.2 57.9 -1.1 % 59.8 Net rental income 50.4 52.4 -3.8 % 52.0 Direct operating profit 44.9 46.2 -2.9 % 46.3 EPRA Earnings 31.6 34.8 -9.1 % n/a Adjusted EPRA Earnings (1
Slide 11: Exchange rates impacted the results
EXCHANGE RATES IMPACTED THE RESULTS NOK AND SEK EXCHANGE RATE FOREIGN CURRENCY IMPACT ON Q1/2021 DEVELOPMENT 0.107 • NRI: 0.9 MEUR • EPRA EPS: 0.004 EUR 0.102 0.097 0.092 Closing rates Q1/2021 Q1/2020 0.087 SEK 10.24 11.06 0.082 NOK 10.00 11.51 0.077 0.072 Average rates Q1/2021 Q1/2020 SEK 10.12 10.
Slide 12: Net rental income: measured against Q1/2020 (pre-pandemic)
NET RENTAL INCOME: MEASURED AGAINST Q1/2020 (PRE-PANDEMIC) NET RENTAL INCOME BRIDGE 12 Q1 2021 I Audiocast
Slide 13: Estimated direct Covid-19 impact on net rental income
ESTIMATED DIRECT COVID-19 IMPACT ON NET RENTAL INCOME NET RENTAL INCOME BRIDGE ESTIMATED DIRECT COVID-19 IMPACT ON NET RENTAL INCOME AMOUNTS APPROX. -2.7 MEUR * Rental discounts granted in Q2/2020 have been accrued over the contract period. 13 Q1 2021 I Audiocast
Slide 14: Fair value changes
FAIR VALUE CHANGES FAIR VALUE CHANGES. MEUR Q1/2021 Q1/2020 Finland & Estonia 3.1 -12.5 Norway -1.3 11.2 Sweden & Denmark 8.1 -9.1 Investment properties. total 10.0 -10.4 Right-of-use assets classified as investment properties (IFRS 16) -1.5 -1.4 Investment properties in the statement of financial p
Slide 15: EPRA Net Reinstatement Value (NRV)
EPRA NET REINSTATEMENT VALUE (NRV) 31 MARCH 2021 31 MARCH 2020 EPRA NRV PER SHARE, EUR 11.58 11.53 EPRA NTA PER SHARE, EUR 10.19 10.15 EPRA NDV PER SHARE, EUR 9.92 9,83 15 Q1 2021 I Audiocast
Slide 16: Main financing metrics
MAIN FINANCING METRICS ▪ Fixed interest rate ratio 95.6% ▪ Investment-grade credit ratings BBB-/Baa3/BBB- ▪ Financing mainly unsecured 100% ▪ Substantial liquidity buffer MEUR 564.3 ▪ Loan to Value 46.5%* ▪ Average maturity of loan portfolio 4.5 *The Q1/2021 LTV calculation is adjusted for a EUR 29
Slide 17: Financing key figures
FINANCING KEY FIGURES LTV DEVELOPMENT FINANCING KEY FIGURES 31 MAR 2021 31 MAR 2020 Interest bearing debt, fair value MEUR 2,115.7 2,034.4 48.7 % 45.7 % 46.2 % 46.8 % 46.9 % 46.5 %* Available liquidity MEUR 564.3 516.8 42.4 % Average loan maturity years 4.5 4.0 Fixed interest rate ratio % 95.6 75.8
Slide 18: Bond spreads are back on the pre-Covid levels
BOND SPREADS ARE BACK ON THE PRE-COVID LEVELS CITYCON BOND SPREAD DEVELOPMENT 600 550 500 450 400 350 300 250 200 150 100 50 0 254.9MEUR 2.375 Sep 2022 550MEUR 2.50 Oct 2024 350MEUR 1.25 Sep 2026 300MEUR 2.375 Jan 2027 350MEUR 1.625 Mar 2028 18 Q1 2021 I Audiocast
Slide 19: Successful EUR 350 million bond issuance and tender offer in March 2021
SUCCESSFUL EUR 350 MILLION BOND ISSUANCE AND TENDER OFFER IN MARCH 2021 The transactions EUR 350 million Green Bond demonstrate the strength of Citycon´s • Issued on 4 March 2021 credit profile and Citycon´s access to the • The 7-year senior unsecured fixed rate EUR-denominated Bond capital markets
Slide 20: Good liquidity position
GOOD LIQUIDITY POSITION AVAILABLE LIQUIDITY, MEUR 31 MARCH 2021 31 DEC 2020 30 SEP 2020 30 JUNE 2020 31 MAR 2020 Syndicated revolving credit facilities unutilized 500.0 405.7 527.0 402.5 376.1 Cash pool overdraft limits unutilized 25.0 24.6 24.2 24.3 23.4 Nonrestricted cash and cash equivalents 39.3
Slide 21: Outlook for 2021 (unchanged)
OUTLOOK FOR 2021 (UNCHANGED) Citycon forecasts the 2021 direct operating profit to be in range EUR 170-188 million, EPRA EPS EUR 0.651-0.751 and adjusted EPRA EPS EUR 0.558-0.658. The outlook assumes that there are no major changes in macroeconomic factors and that there will not be another wave of
Slide 22: Looking forward
LOOKING FORWARD 22 Q1 2021 I Audiocast
Slide 23: Citycon's strategy is based on stable core business with attractive growth opportunities
CITYCON’S STRATEGY IS BASED ON STABLE CORE BUSINESS WITH ATTRACTIVE GROWTH OPPORTUNITIES HOW WE CREATE VALUE? DENSIFICATION NECESSITY BASED STRONG SOCIAL AND ASSETS IN PRIME POTENTIAL STABLE CORE TENANT MIX COMMUNITY LOCATIONS ▪ Identified residential RELATIONSHIPS BUSINESS WITH ▪ Grocery anchored c
Slide 24: Citycon continues to focus on portfolio transformation towards a mixed-use portfolio
CITYCON CONTINUES TO FOCUS ON PORTFOLIO TRANSFORMATION TOWARDS A MIXED-USE PORTFOLIO CURRENT NEW DEVELOPMENT TARGET PORTFOLIO OPPORTUNITIES PORTFOLIO 19.5% 13% GLA GLA 40.0% GLA 40.0% 57.5% 1.1m 0.6m* 1.5m 23.0% 87% 20.0% RETAIL NECESSITY RESIDENTIAL, OFFICE & OTHER Note: * Includes 0.2 msq.m. of co
Slide 25: Lippulaiva – a prototype of an urban hub
Capex spent to date EUR LIPPULAIVA – A PROTOTYPE OF AN 263 million URBAN HUB • SUPERIOR TENANT MIX with grocery anchors • 45% of the GLA reserved for grocery stores • A variety of private and public services — a kindergarten, public library private health services and gym. • PRE-LEASED LEVEL OF 76%*
Slide 26: Capital recycling continued with 3 assets - outlook for Nordic real estate transactions
CAPITAL RECYCLING CONTINUED WITH 3 ASSETS - THE OUTLOOK FOR THE NORDIC REAL ESTATE TRANSACTIONS HAS IMPROVED “The Nordic property market is hotter • Citycon closed the divestment of three of its non-core assets in the than ever, as a growing number of Stockholm area for ca 147 MEUR (with net yield o
Slide 27: Q1 Summary
Q1 SUMMARY • Stable financial and operational results with quarter over quarter growth. • Q1/2021 was in line with our expectations and tracks our full year guidance. • Leasing activity was strong, and both the number of leases signed and rental level increased year-over-year. • The transformation o
Slide 28: Q&A
28 — Q1.2021 | Audiocast CICITYCON
Slide 29: Eero Sihvonen, Laura Jauhiainen – citycon.com
EERO SIHVONEN LAURA JAUHIAINEN CFO. Exec. VP VP. Strategy and Investor Relations +358 50 557 9137 +358 40 823 9497 eero.sihvonen@citycon.com laura.jauhiainen@citycon.com CITYCON.COM 29
Slide 30: Appendix
APPENDIX citycon.com 30 Q1 2021 I Audiocast
Slide 31: Balanced maturity profile
BALANCED MATURITY PROFILE DEBT BREAKDOWN BY TYPE DEBT MATURITY PROFILE Bonds 96% Bank loans 0% CP 4% DEBT BREAKDOWN BY CURRENCY EUR 67% NOK 17% SEK 16% 31 Q1 2021 I Audiocast
Slide 32: Income statement
INCOME STATEMENT MEUR Q1/2021 Q1/2020 Change Gross rental income 57.2 57.9 -1.1 % Service charge income 18.3 18.1 1.1 % Property operating expenses -24.2 -22.6 7.2 % Other expenses from leasing operations -0.9 -1.0 -12.1 % Net rental income 50.4 52.4 -3.8 % Administrative expenses -5.6 -6.5 -13.0 %
Slide 33: Balance sheet
BALANCE SHEET MEUR 31 MARCH 2021 31 MARCH 2020 Investment properties 4 238.4 4 081.5 Total non-current assets 4 569.7 4 398.2 Investment properties held for sale 0.0 0.0 Total current assets 128.0 196.8 Total assets 4 697.7 4 595.0 Total shareholders’ equity 2 190.7 2 165.7 Total liabilities 2 506.9
Slide 34: Thank you!
THANK YOU! citycon.com 34 Q1 2021 I Audiocast