Citycon Oyj · OMXHEX:CTY1S

Citycon Oyj — Merger or Acquisition (May 2015)

34 slides from Citycon Oyj's merger presentation, May 26, 2015

  1. Slide 1: Acquisition of Sektor

    Acquisition of Sektor Consolidating Citycon as the leading Nordic shopping centre specialist 26 May 2015

  2. Slide 2: Disclaimer

    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 other

  3. Slide 3: Disclaimer (cont.)

    Disclaimer (cont.) This document is not intended for potential investors and does not constitute or form part of any offer to sell or issue, or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall it or any p

  4. Slide 4: Agenda

    Agenda 1. TRANSACTION HIGHLIGHTS 2. NORWEGIAN MARKET 3. FINANCIAL ASPECTS 4. GOING FORWARD 4

  5. Slide 5: 1. Transaction Highlights

    ~ 1. TRANSACTION HIGHLIGHTS CI CITYCON

  6. Slide 6: Citycon becomes the largest listed shopping centre specialist in the Nordics

    Citycon becomes the largest listed shopping centre specialist in the Nordics Nr.2 shopping centre owner and manager in Acquisition of Sektor Gruppen Norway Pan-Nordic company Completes the Nordic platform Entrance to Norway Wealthiest and fastest growing country in Europe 6

  7. Slide 7: Sektor – a leader in Norwegian retail real estate

    Sektor – a leader in Norwegian retail real estate Norway’s 2nd largest shopping centre company 100% shopping centres Focused on the three main urban economic centres: Oslo, Bergen and Stavanger regions Proven management track record GAV: EUR 1.5 bn Portfolio Footfall: 62 million p.a.1) • 17 fully an

  8. Slide 8: An attractive acquisition moving Citycon to another league

    An attractive acquisition moving Citycon to another league Increased scale  Creation of a EUR 5 bn shopping centre company with a platform of 55 shopping centres Size  Third largest listed continental retail operator by GAV  Immediate critical mass in Norway  Increased liquidity and added capita

  9. Slide 9: Key terms of the transaction

    Key terms of the transaction  NOK 12,320 million debt-free purchase price (EUR 1,467 million)  Net initial property yield of 5.2% Key acquisition terms  Potential to increase by +20bps by year-end 2015 due to developments coming online  Expected to be accretive to earnings per share as of first

  10. Slide 10: Citycon is ready for the next strategic step

    Citycon is ready for the next strategic step 2011 Q1/2015 2011-2015 Baltics & Better Citycon Baltics Denmark 11% 10%  More focused and balanced Nordic shopping centre portfolio Finland Finland 61% 51%  Strong operating result - LFL NRI growth of 2.5-5% p.a. Sweden Sweden  Cost control and efficie

  11. Slide 11: The transaction completes full exposure to the fast growing Nordic region

    The transaction completes full exposure to the fast growing Nordic region Pre-transaction (GAV) Number of shopping Baltics & centres1) Denmark 10% Finland 51% Sweden 39%1) 20 21 Finland Norway Pro forma (GAV) 10 3 Baltics & Sweden Estonia Denmark 7% 1 Finland Norway 35% Denmark 31% Only Pan-Nordic l

  12. Slide 12: Increased scale and visibility – Largest listed property company in the Nordics

    Increased scale and visibility – Largest listed property company in the Nordics Gross asset value (EUR bn)1) 6 5 4.9 4.2 4.1 4.1 4 1.5 3.6 3.4 3.3 3.3 3.2 3.1 3.1 3 3.4 2 1 0 Citycon + Castellum Olav Thon Balder Fabege Citycon Klövern Entra Wallenstam Sponda Atrium Sektor Ljungberg 2) Combined # of

  13. Slide 13: Significant step in the European retail space

    Significant step in the European retail space Gross asset value (EUR bn)1) 40 34.6 35 30 25 21.4 20 15 9.8 9.5 10 4.9 5 3.4 3.3 3.3 3.0 3.0 1.5 3.4 0 Unibail-Rodamco Klepierre Swiss Prime Site Hammerson Citycon + Sektor Citycon Wereldhave Deutsche Atrium European Eurocommercial EuroShop RE  Citycon

  14. Slide 14: True Pan-Nordic leader

    True Pan-Nordic leader 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 14 1) Source: Company reports, SEB analysis. Includes only majority-owned shopping centres. Includes some assumptions on retail

  15. Slide 15: Sektor – High quality assets with a resilient tenant base

    Sektor – High quality assets with a resilient tenant base Revenue split Top 10 tenants by rent Fashion 7.0% Cafés and ServicesOther restaurants 2% 1% 5% Groceries 6.5% Groceries 29% Sports apparel 4.1% Home Home 2.8% 19% Fashion 2.5% Fashion 2.3% Groceries 2.0% Sports 1.5% Speciality 1) 22% Fashion

  16. Slide 16: A perfect fit – Portfolio in line with core investment criteria

    A perfect fit ‒ Portfolio in line with core investment criteria PAN-NORDIC  100% focused on Norway for Citycon to become a true Pan-Nordic player  Focused on capital city regions and cities with URBAN ENVIRONMENTS population growth  Linked to public transportation  Grocery-anchored shopping cent

  17. Slide 17: Identified value creation drivers

    Identified value creation drivers  Access to the whole Nordics & cross-country tenanting TENANT OPTIMIZATION  Increased food & beverage, health, municipality services  Efficiency by sharing the digital platform DIGITAL INNOVATION  Enhanced customer experience and loyalty Larger platform – improv

  18. Slide 18: 2. Norwegian Market

    2. NORWEGIAN MARKET 18

  19. Slide 19: Norway is the fastest growing country in Europe, with Oslo as the fastest growing city

    Norway is the fastest growing country in Europe, with Oslo as the fastest growing city Population growth (2015-2030E) Population growth (2015-2030E) Norway 13.4% Oslo 20.3% Sweden 10.3% Stockholm 18.3% UK 9.4% Copenhagen 14.7% 1) France 6.6% Helsinki 13.1% Denmark 6.1% London 11.2% Belgium 4.3% Amst

  20. Slide 20: Above average inflation and one of the lowest unemployment rates in Europe

    Above average inflation and one of the lowest unemployment rates in Europe Inflation Unemployment rate (end of 2014) Norway Nordic average Euro area Norway 3.5% Finland Sweden UK 6.2% 3% Denmark 6.5% 2% Germany 6.7% Sweden 7.9% 1% Finland 8.7% France 10.2% 0% EU avr. 10.4% Italy 12.7% (1)% 2013 2014

  21. Slide 21: Highest GDP per capita in Europe and consumption projected to grow by 4+%

    Highest GDP per capita in Europe and consumption projected to grow by 4+% Nominal GDP per Capita vs. EU average (2014) Consumption growth in Norway CPI growth Real private consumption growth Norway 271% 5% Denmark 167% 4.4% 4.2% 4.1% 4.1% 4.0% Sweden 4% 164% 2.1% Finland 137% 2.2% 3% 2.1% 2.4% 2.3%

  22. Slide 22: Strong population growth in the major regions

    Strong population growth in the major regions Population growth, larger cities Population growth for Norway 2014-2020E CAGR 2014-2020E Population 2014 Oslo 2.1% 634,000 Above 10 % 5-10 % Bergen 1.4% 272,000 Below 5 % Narvik Trondheim 1.3% 182,000 Stavanger 1.0% 131,000 Trondheim Kristiansand 1.8% 86

  23. Slide 23: 3. Financial Aspects

    3. FINANCIAL ASPECTS 23

  24. Slide 24: Preliminary combined financial information

    Preliminary combined financial information MEUR Citycon 2014 Sektor 2014 Adjustments Combined Turnover 245.3 127.0 - 372.3 Net rental income 169.4 74.0 -1.3 242.0 Operating profit 1) 165.0 103.5 -8.9 259.5 Net financial income and expenses -77.5 -49.0 - -126.5 Profit for the period 1) 89.7 40.2 -8.6

  25. Slide 25: Financing of the transaction

    Financing of the transaction  Rights issue of EUR 600 million (subject to EGM approval)  Pro rata subscription undertakings by Citycon’s main shareholders Gazit-Globe (42.8%) and CPPIB (15.0%) , subject to certain customary conditions  All necessary bank waivers and commitments received  Managem

  26. Slide 26: Financing of the transaction (cont.)

    Financing of the transaction (cont.)  Following completion of the transaction, Citycon will consider alternatives to optimise its long-term financing structure and to refinance the bridge arrangements  Bridge financing facility and existing Sektor debt to be refinanced  Continued divestment of no

  27. Slide 27: 4. Going Forward

    4. GOING FORWARD 27

  28. Slide 28: Merging two strong platforms based on the "One Citycon" model

    Merging two strong platforms based on the “One Citycon” model Capture and integrate Systems, processes, competences, people best of both worlds  Integration based on  No big bang date critical stages  Reporting to be integrated as of Q3/2015 Start detailed Steering committee to enforce the plan b

  29. Slide 29: Summary

    Summary • Logical combination of two retail specialists • Entrance to the strong and growing Norwegian market • Creation of the #1 listed property company in the Nordics • Value-add potential through synergies European scale with a Nordic heartbeat 29

  30. Slide 30: Contact information

    Contact information Eero Sihvonen, CFO, Exec. VP Tel. +358 50 557 9137 Henrica Ginström, VP IR & Communications Tel. +358 50 554 4296 30

  31. Slide 31: Appendix

    APPENDIX 31

  32. Slide 32: Sektor portfolio overview

    Sektor portfolio overview Shopping Centre Municipality Ownership GLA Footfall % sqm million Buskerud Storsenter Nedre Eiker 100 % 28 500 1,2 Down Town Porsgrunn 100 % 33 900 2,7 Glasshuspassasjen Bodø 100 % 2 400 2,7 Heiane Storsenter Stord 100 % 24 000 1,2 Herkules Skien 100 % 49 600 2,9 Kilden Sen

  33. Slide 33: Sektor portfolio overview (cont.)

    Sektor portfolio overview (cont.) Shopping Centre Municipality Ownership GLA Footfall % sqm million CC Drammen Drammen - 16 500 1,0 City Syd Trondheim - 15 500 4,0 Halden Storsenter Halden 20 % 9 400 0,8 Holmen Senter Asker - 24 200 2,0 Ivar Lykkes vei 5 Trondheim 11 900 Markedet Haugesund 20 % 10 1

  34. Slide 34: citycon.com

    Cl CITYCON citycon.com

Citycon — Merger or Acquisition (May 2015) on 6ix