Slide 1: Citycon presentation Q2/2014 Results
2014 Citycon presentation 2014 Q2/2014 Results
Slide 2: Disclaimer
2014 Disclaimer 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 any
Slide 3: A focused company
2014 A focused company 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 to publ
Slide 4: Focus on Nordic and Baltic retail real estate
2014 Focus on Nordic and Baltic retail real estate Key figures 30 June 2014 # of shopping centres 36 # of assets 69 Gross leasable area, sq.m. 953,290 Occupancy rate (economic) 95.7% Total assets, EUR billion1) 3.3 Market cap, EUR billion 1.4 Finland Sweden Total assets1) 21 10 Estonia 1
Slide 5: Leading position in core markets
2014 Leading position in core markets 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 Includes s
Slide 6: Focus on urban locations driven by strong demographics
2014 Focus on urban locations driven by strong demographics 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 restrictions
Slide 7: Core portfolio of grocery-anchored shopping centres
2014 Core portfolio of grocery-anchored shopping centres Shopping centre rental income by branches 31 December 2013 2% 7% 8% Clothes and fashion 27% Groceries Leisure, home supplies 8% Services and offices Cafes and restaurants Health and beauty 10% Department stores Other specialty stores 19% 18% 7
Slide 8: Citycon's five core assets
2014 Citycon’s five core assets Sweden – Kista Galleria Finland – Iso Omena Sweden – Liljeholmstorget Galleria Finland – Koskikeskus Estonia – Rocca al Mare Total GLA Fair value Net rental Economic Visitors 2013 Sales 2013 (sq.m.) (EUR million)1) yield, %1) occupancy, %1) (millions) (EUR million) Ki
Slide 9: Citycon's portfolio is well positioned for changing retail landscape
2014 Citycon’s portfolio is well positioned for changing retail landscape Citycon: Urbanisation Growing urban population • 87% of total portfolio in main cities Increased urban GDP per capita • 70% in capital cities Convenience Demand for proximity, security, • Vast majority of centres cleanli
Slide 10: Business Environment
2014 BUSINESS ENVIRONMENT 10
Slide 11: Consumer confidence
11 0 -70 -60 -50 -40 -30 -20 -10 10 20 30 40 1.1.2009 1.3.2009 1.5.2009 1.7.2009 Source: Eurostat 1.9.2009 1.11.2009 1.1.2010 1.3.2010 Finland 1.5.2010 1.7.2010 1.9.2010 1.11.2010 Sweden 1.1.2011 Consumer confidence 1.3.2011 1.5.2011 Estonia 1.7.2011 1.9.2011 1.11.2011 1.1.2012 Lithuania 1.3.2012 1.
Slide 12: Economic outlook
2014 Economic outlook Change % GDP growth Change % Inflation 12% 6% 10% 5% 8% 4% 3% 6% 2% 4% 1% 2% 0% 0% -1% Finland Sweden Denmark Estonia Lithuania Euro area -2% Finland Sweden Denmark Estonia Lithuania Euro area 2011 2012 2013 2014E 2015E 2011 2012 2013 2014E 2015E % Unemployment % Public sector
Slide 13: Highlights Q2/2014
2014 HIGHLIGHTS Q2/2014 13
Slide 14: Highlights Q2/2014
2014 Highlights Q2/2014 Overall steady financial performance Continued growth in Challenging retail environment like-for-like NRI especially in Finland Leasing indicators stable Reduced opex and admin expenses Raising EUR 400 million new equity Developments progressing 14
Slide 15: Overall steady financial performance
2014 Overall steady financial performance Q1-Q2/ Q1-Q2/ EUR million Q2/2014 Q2/2013 Change-% 2014 2013 Net rental income 43.4 42.7 84.0 83.0 1.3 Administrative expenses 5.1 5.1 10.2 10.5 -2.4 EPRA Operating profit 38.6 37.8 74.7 73.2 2.1 Net financial income & expenses -28.0 -43.1 -41.6 -59.5 -30.1
Slide 16: Continued growth in like-for-like NRI
2014 Continued growth in like-for-like NRI Like-for-like net rental income growth Continued strong like-for-like 6% net rental income growth in low inflation environment 5% 4.9% Shopping centres: 3.4% 4.6% Supermarkets & shops: 4.5% 4% 3.8% 3.6% Growth in all regions 3% Finland: 3.3% Swe
Slide 17: Leasing indicators stable
2014 Leasing indicators stable Q2/2014 Q2/2013 Q1/2014 Q4/2013 Occupancy rate (economic), % 95.7 94.8 95.5 95.7 LFL occupancy rate (economic), % 95.2 94.6 94.9 95.2 Occupancy cost ratio, % 8.7 8.7 8.7 8.7 (LFL shopping centres) Average rent, EUR/sq.m./mth 21.7 21.5 21.7 21.5 Slight increase in occ
Slide 18: Reduced opex and admin expenses
2014 Reduced opex and admin expenses Property operating expenses Administrative expenses EUR million EUR million 90 30 27.7 78.4 26.5 80 75.8 71.6 25 67.4 23.3 70 20.6 60 20 50 41.0 15 40 38.5 10.5 10.2 30 10 20 5 10 0 0 2010 2011 2012 2013 H1/2014 2010 2011 2012 2013 H1/2014 18
Slide 19: Retail environment promising in Sweden, challenging in Finland
2014 Retail environment promising in Sweden, challenging in Finland Finland 8% Retail sales (Jan-June) and CPI (June) Modest GDP forecast 6.0% 6% 5.5% Consumers hold back on spending 4% Retail Sales Sweden 2% 1.6% 1.5% CPI 0.9% 1.0% Stronger economic 0.2% -0.1% -0.6% -0.4% fundamentals dri
Slide 20: LFL sales and footfall stable
2014 LFL sales and footfall stable LFL shopping centre sales LFL shopping centre footfall EUR million Growth % Million Growth % 1 000 12% 60 6% 11% 900 10% 50 4% 800 4% 8% 700 40 3% 6% 2% 600 500 4% 30 400 0% 2% 0% 2% 20 300 0% 200 -1% -2% -2% 10 -2% -2% 100 0 -4% 0 -4% Finland Sweden Baltic Total F
Slide 21: Raising EUR 400 million new equity
2014 Raising EUR 400 million new equity Two consecutive share issuances: − Directed share issue of approx. EUR 200 million to CPPIB - completed 10 June − Rights issue of approx. EUR 200 million to all shareholders - completed 8 July Introduced CPPIB as a significant strategic shareholder in City
Slide 22: Developments progressing
2014 Developments progressing Citycon’s Actual Expected Area (expected) investments yield on Pre-leasing Completion before/ investment by completion rate, % target after, sq.m. need, 30.6.2014, when EUR m EUR m stabilised, % Extension & Iso 63,300 88.0 22.2 6.5-7.0 40% Q3/2016 (re)develop Omena 90,0
Slide 23: Development pipeline projects planned ≥ 2015
2014 Development pipeline 3 projects planned ≥ 2015 Citycon’s Estimated Target for expected project project investment area/additi initiation/ need, onal sq.m. completion EUR m Extension and (re)development possibility of the shopping centre. Different alternatives under 26,600/ Myyrmanni 55 2015/20
Slide 24: Summary of Q2/2014 and going forward
2014 Summary of Q2/2014 and going forward Solid LFL performance despite weak Finnish environment Deleveraging builds strength and flexibility; strategy implementation to continue Ongoing (re)developments and selected acquisitions support further earnings growth 24
Slide 25: Financial Figures
2014 FINANCIAL FIGURES 25
Slide 26: Financial results
2014 Financial results Q1-Q2/ Q1-Q2/ Q1-Q2/ EUR million Q2/2014 Q2/2013 2014 incl. 2014 2013 Kista Net rental income, total 43.4 42.7 84.0 83.0 98.8 NRI, Finland 26.0 26.1 50.4 50.3 50.4 NRI, Sweden 10.4 10.4 19.7 20.1 34.4 NRI, Baltic Countries & New 7.0 6.2 14.0 12.7 14.0 Business EPRA Operating p
Slide 27: NRI development
2014 NRI development EUR million 86 2.4 -1.0 85 1.2 -1.4 84.0 84 83.0 -0.1 83 82 81 80 Q1-Q2/2013 Acquisitions (Re)development Divestments LFL properties Other (incl. Q1-Q2/2014 projects exchange rates) 27
Slide 28: Income statement
2014 Income statement Q1-Q2/ Q1-Q2/ Change- EUR million Q2/2014 Q2/2013 2014 2013 % Turnover 61.9 61.6 123.2 124.5 -1.1 Property operating expenses 18.1 18.8 38.5 41.0 -6.0 Other expenses from leasing operations 0.3 0.2 0.6 0.5 28.1 Net rental income 43.4 42.7 84.0 83.0 1.3 Administrative expenses 5
Slide 29: Balance sheet
2014 Balance sheet EUR million 30 Jun 2014 30 Jun 2013 31 Dec 2013 Investment properties 2,741.5 2,711.3 2,733.5 Total non-current assets 2,923.5 2,879.2 2,898.6 Total current assets 168.8 98.2 74.5 Total assets 3,100.0 2,983.9 2,975.4 Total shareholder’s equity 1,533.8 1,272.8 1,340.6 Total liabili
Slide 30: Successful directed share issue and rights issue
2014 Successful directed share issue and rights issue Directed share issue of 77,874,355 to CPPIB Successful execution Gross proceeds EUR 206.4 million issue to CPPIB: Directed share Completed 9 June Use of proceeds Approx. EUR 200 million used for debt repayments in June All offered 74,16
Slide 31: Outlook 2014
2014 Outlook 2014 EPRA Operating profit EPRA Earnings EUR million EUR million 147.1– 93.7– 170 110 155.1 101.7 149.1 150 135.7 90 86.7 130 117.4 110 105.0 70 63.9 90 53.3 50 47.3 70 50 30 2010 2011 2012 2013 2014E 2010 2011 2012 2013 2014E EPRA Operating profit Outlook Range EPRA Earnings Outlook Ra
Slide 32: Financing Overview
2014 FINANCING OVERVIEW
Slide 33: Financing overview – Key figures
2014 Financing overview – Key figures 30 Jun 2014 30 Jun 2013 31 Mar 2014 Interest bearing debt, fair value, EUR million 1,308.6 1,555.9 1,491.8 Available liquidity, EUR million 419.9 453.8 414.2 Average loan maturity, years 3.8 4.4 3.8 Average fixing period, years 3.7 4.2 3.6 Hedging ratio, % 85.7
Slide 34: Debt type and currency split
2014 Debt type and currency split Breakdown by debt type 1) Breakdown by currency 1) Other 9% LTL 0% CP 4% SEK 21% Syndicated term loans Bilateral bank 28% term loans 8% EUR 79% Bonds 51% Well diversified debt sources Following the repayments in June 2014 and the EUR 500 million Eurobond issue i
Slide 35: Debt maturities and interest risk hedging
2014 Debt maturities and interest risk hedging Maturity profile of loans and derivatives Interest-bearing debt by fixing type Loans 500 500 Fixed to floating swaps Floating Undrawn loan facilities rate debt 400 14% Fixed rate 300 269 debt Fixed rate 61% 202 188 swaps 200 160 170 141 138 24 % 97 80 8
Slide 36: Financial expenses analysis
2014 Financial expenses analysis Q1-Q2/ Q1-Q2/ EUR thousand Q2/2014 Q1/2014 Q2/2013 2014 2013 Interest expenses -14,685 -14,648 -16,370 A -29,333 -33,161 Foreign exchange gains (+) / losses (-) -50 -36 85 -87 82 Amortisation of capitalised fees -906 -406 -1150 B -1,312 -1,094 Non-cash option expense
Slide 37: Property Portfolio & (Re)developments
2014 PROPERTY PORTFOLIO & (RE)DEVELOPMENTS 37
Slide 38: Lease portfolio
2014 Lease portfolio 3,223 (3,689) lease agreements with an average length of 3.4 (3.6) years Total GLA 953,290 sq.m. ( 982,970 sq.m.) Rents linked to CPI (nearly all agreements) Annualised potential rental value for the portfolio is EUR 246.5 million years Occupancy rate (economic) 4 Averag
Slide 39: Lease expiry profile Q2/2014
2014 Lease expiry profile Q2/2014 25% 20% 15% Other retail properties % Shopping centres % 10% 5% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 +2024 39
Slide 40: Property portfolio
2014 Property portfolio Q1-Q2/ Q1-Q2/ Q2/2014 Q2/2013 2014 2013 Occupancy rate (economic), % 95.7 94.8 95.7 94.8 Average rent, EUR/sq.m. 21.7 21.5 21.7 21.5 # of leases started 128 125 272 292 Total area of leases started, sq.m. 29,705 35,423 60,401 70,810 Average rent of leases started, 20.0 19.1 1
Slide 41: Property portfolio
2014 Property portfolio Top 5 tenants Occupancy cost ratio 31 Dec 2013 LFL shopping centres, rolling 12 mth Proportion of Average rental income, remaining length % of leases, years Total 8.7% Kesko 16.1 6.1 S Group 5.7 6.9 Finland 9.7% ICA Gruppen 4.2 3.5 Sweden 6.9% Stockmann 2.7 2.3 Tokmanni 2.0 3
Slide 42: Valuation yield development
2014 Valuation yield development Fair value of investment properties EUR 2,741.5 million Fair value change in Q1-Q2/2014 EUR 13.4 million Citycon’s weighted average net yield requirement 30 June 6.2% (as defined by JLL) Citycon's valuation yield development 8,5 % Finland 7,5 % 7.3% Sweden Balt
Slide 43: Extension and (re)development of Iso Omena
2014 Extension and (re)development of Iso Omena The shopping centre's retail area will grow to 75,000 sq.m. Vantaa Extension will be fully integrated with the new Matinkylä metro station and bus terminal Approx. 35,000 passengers /day Helsinki Espoo City Centre Citycon and NCC Property Devel
Slide 44: Strategic (re)development and partnership in IsoKristiina
2014 Strategic (re)development and partnership in IsoKristiina Lappeenranta IsoKristiina is located in the city centre of Lappeenranta, a university city in Eastern Finland 25 km from the Russian border Catchment area is approx. 130,000 inhabitants Great emphasis in the project is placed on le
Slide 45: Shares and Shareholders
2014 SHARES AND SHAREHOLDERS 45
Slide 46: Share performance and volume
46 1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 7 000 000 6 000 000 0 31.1.2012 Shares 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 Citycon share volume 28.3.2013 30.4.2013 31.5.2013 Share performance and vo
Slide 47: Ownership, June 2014
2014 Ownership, 30 June 2014 Established and listed on the Helsinki Shareholders Stock Exchange since 1988 Market cap EUR 1,391.4 million Other 31.5% Total registered shareholders 7,854 Nominee- registered (8,613), of which nominee-registered 68.5% 68.5% (76.1%) of total Largest shareholders
Slide 48: Back up information
2014 BACK UP INFORMATION 48
Slide 49: History of Citycon
2014 History of Citycon 25 years of retail experience and portfolio growth 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 own
Slide 50: Contact information
2014 Contact information Eero Sihvonen, CFO, Exec. VP Tel. +358 50 557 9137 Henrica Ginström, IR Manager Tel. +358 50 554 4296 50
Slide 51: citycon.com
2014 citycon.com