Slide 1: Citycon Presentation Q3 2007
Citycon Presentation Q3 2007
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
Slide 3: Contents
Contents Highlights Key Figures Goals and Key Strengths Favorable Business Environment Financial Targets Property Portfolio Latest Acquisitions Koskikeskus Koskikeskus Development Projects Tampere Tampere andand Key figures Heikintori Heikintori Espoo Espoo Finland Finland Property Por
Slide 4: Highlights Q3/2007
Highlights Q3/2007 • Citycon Q3 Presentation 4
Slide 5: Highlights – Latest Highlights
Highlights – Latest Highlights Q3 The market value of property portfolio EUR 2,191.2 million (Q2/2007: EUR 1,799.2 million) Citycon’s Citycon’s EPS (excl. fair value gains) EUR 0.04 Shopping Shopping Centres Centres EUR 21.1 million of fair value gains mostly due to improved net rental income
Slide 6: Highlights – Geographic Overview
Highlights – Geographic Overview Geographical Overview Finland – 71.7% of total net rental income in Q3/2007 Sweden (€m) Finland (€m) – Net rental income growth of 5.6%, to EUR 54.7 m 1,555.5 – Net rental income for like-for-like properties rose 526.4 74.1 71.6 by 9.1%. 54.7 28.0 26.0 17.0 – Cityc
Slide 7: Highlights - Successful Rights Issue
Highlights - Successful Rights Issue Citycon raised about EUR 99 million Rights trading – volume and price through a Rights Issue in September – early 0,24 14 October 2007 to finance the Iso Omena acquisition 0,22 12 0,2 10 27,594,782 new shares were offered to existing 0,18 8 shareholders 0,16
Slide 8: Highlights – Acquisition Track Record
Highlights – Acquisition Track Record 1) EUR million 350 329 300 250 200 150 104,5 100 80,1 62,1 61,9 59,4 47,4 52,5 37,0 41,9 50 27,6 25,4 18,7 14,6 17,3 16,5 11,0 0 Jul Jul Sep Dec Jan Feb May Jul Aug Sep Sep Jan Feb May July Sept Sept 2005 2005 2005 2005 2006 2006 2006 2006 2006 2006 2006 2007 20
Slide 9: Highlights – Goals and Focus
Highlights – Goals and Focus Goals Growth Expand the property portfolio and increase its value Retail property management Property Development Sustained shareholder value Strategic focus Retail properties only Geographical focus; growing areas in Finland, Sweden and the Baltic Countrie
Slide 10: Highlights – Favorable Business Environment
Highlights – Favorable Business Environment Strong Growth in Gross Domestic Product Positive Outlook for Private Consumption 11,2% 15,8% 15,0% 13,5% 12,5% 12,0% 8,0% 7,7% 7,7% 7,8% 7,4% 10,0% 6,4% 9,0% 5,5% 4,9% 4,2% 6,0% 3,8% 3,1% 3,3% 2,9% 4,3%4,0% 2,6%2,4% 3,0% 2,7% 2,8% 2,9% 2,8% 2,2% Finland Sw
Slide 11: Highlights – Favorable Business Environment
Highlights – Favorable Business Environment Consumer Confidence at Positive Levels Finland Sweden Estonia Lithuania 25,0 25,0 15,0 15,0 10,0 10,0 20,0 20,0 5,0 5,0 15,0 15,0 0,0 0,0 10,0 -5,0 10,0 -5,0 -10,0 5,0 5,0 -10,0 -15,0 -15,0 0,0 0,0 -20,0 01/04 01/05 01/06 01/07 09/07 01/04 01/05 01/06 01/0
Slide 12: Highlights – Favorable Business Environment
Highlights – Favorable Business Environment Non-Inflation adjusted retail sales and CPI August 2007 “The “The Nordic Nordic countries countries have have the the strongest strongest (Source: Reuters Knowledge) public public finances finances in in Europe Europe andand all all “…Economy currently cur
Slide 13: Highlights – Financial Targets
Highlights – Financial Targets ► Continued expansion through acquisitions ► Cumulative CAPEX since 2005 in and property development excess of EUR 1 billion Growth track ► Solid dividend policy despite growing ► For 2006 Citycon’s per-share number of shares outstanding dividend was 0.14 Eur Dividends
Slide 14: Property Portfolio
Property Portfolio Latest Acquisitions Development Project • Citycon Q3 Presentation 14
Slide 15: Latest Acquisitions - Iso Omena “The Big Apple”
Latest Acquisitions - Iso Omena “The Big Apple” Citycon acquired shopping centre Iso Omena from Doughty Hanson for appr. EUR 329 million; net initial yield 4.5%. Citycon’s largest investment strengthens remarkable company’s position in the HMA. Iso Omena is the most renowned shopping centre in
Slide 16: Latest Acquisitions - Iso Omena “The Big Apple”
Latest Acquisitions - Iso Omena “The Big Apple” Key Figures It is a regional Shopping Centre in Espoo Opening 2001 Matinkylä region 15 km from Helsinki CBD. Leasable area, m2 61,300 The catchment area is growing and is one of the of which retail premises, m2 49,000 most affluent areas in Finland
Slide 17: Latest Acquisitions - Iso Omena “The Big Apple”
Latest Acquisitions - Iso Omena “The Big Apple” Catchment area 10-minute drive time 149,700 consumers 66,500 households Purchasing power EUR 2.75 billion 5-minute drive time 35,000 consumers 16,200 households Purchasing power EUR 0.6 billion Catchment Area Household Income Distribution 2
Slide 18: Latest Acquisitions - Magistral
Latest Acquisitions - Magistral In July Citycon acquired the shopping centre Magistral in Tallinn for approximately EUR 16.5 Key Figures million, and 8,500 m2 of building right for EUR 2 Opening 2000 million. Net initial yield without the building right was 6.5%. Number of buildings 1 Total GLA ap
Slide 19: Latest Acquisitions – Strömpilen and Länken
Latest Acquisitions – Strömpilen and Länken In June Citycon acquired 75% of the leading shopping Key Figures - Strömpilen centre Strömpilen in Umeå and a retail property Länken for Total GLA approx. 25 000 m2 appr. EUR 52.5 million, net initial was 5.5%. Occupancy rate ~100 % Strömpilen’s GLA is
Slide 20: Property Portfolio - Major Acquisitions 2006 & 2007
Property Portfolio - Major Acquisitions 2006 & 2007 Debt free purchase price Initial net with transaction expenses yield on Post- (acquisition date exchange purchase acquisition Property Location Country rates) , EUR million GLA, total, m2 price, % Purchase date holdings, % Lindome Mölndal SWE 8.0 7
Slide 21: Property Portfolio - Development Projects
Property Portfolio - Development Projects Shopping Centre Duo – An example of Citycon’s Successful Development Strategy An extension to the shopping centre Duo located in one of the Finland's largest suburb, Hervanta in Tampere, was completed in April. The whole renewed shopping centre will open O
Slide 22: Property Portfolio - Development Projects
Property Portfolio - Development Projects On-going development projects, 30 September 2007 Market value, Area, Post- Total estimated Actual Targeted Additional Information EUR million sq.m. 1) development investment, cumulative year of (31 Dec 2006) area, sq.m. EUR million 2) CAPEX by the completion
Slide 23: Property Portfolio - Development Projects
Property Portfolio - Development Projects Completed or partly completed development projects Area, Post- Total Actual cum ulative Additional Inform ation sq.m . 1) developm ent investm ent, CAPEX by the end area, sq.m . est. EUR of the period, EUR m illion 2) m illion Property Location Country Duo T
Slide 24: Property Portfolio - Development Projects
Property Portfolio - Development Projects Development projects under planning Citycon's Board of Directors has not yet made a decision on the development project, but it is under planning, an alteration of the city plan is pending or Citycon (or its partner) has a site reservation. Market value Proj
Slide 25: Property Portfolio - Development Projects
Property Portfolio - Development Projects One One alternative alternative of of future future Espoontori Espoontori Trio Trio Espoontori Espoontori at at the the moment moment Rocca Rocca al al Mare Mare Liljeholmen Liljeholmen • Citycon Q3 Presentation 25
Slide 26: Property Portfolio - Development Projects
Property Portfolio - Development Projects Potential development project Citycon is analysing opportunities for the development and/extension of for example the properties below. Neither an alteration of the city plan has been applied nor any other official decisions made. Market value Area, Addition
Slide 27: Key Figures
Key Figures • Citycon Q3 Presentation 27
Slide 28: Property Portfolio – Key Figures
Property Portfolio – Key Figures 3,730 (3,060) leases with an average length Breakdown of property portfolio of 2.8 (2.8) years 5.0 % Net rental income increased by 25.9% to 24.0 % EUR 76.3 million 71.0 % GLA totalled grew by 23.5% to 906,410 m2 Net rental income for like-for-like properties
Slide 29: Property Portfolio – Finland
Property Portfolio – Finland Q1-Q3 Q1-Q3 Finland Q3/2007 Q3/2006 2007 2006 2006 Turnover, EUR million 25.5 24.7 74.1 71.8 95.8 Net fair value gains on investment property, EUR million 16.2 20.7 150.5 91.8 104.8 Operating profit, EUR million 33.9 42.6 201.2 145.8 176.1 Gross rental income, EUR millio
Slide 30: Property Portfolio – Sweden
Property Portfolio – Sweden Q1-Q3 Q1-Q3 Sweden Q3/2007 Q3/2006 2007 2006 2006 Turnover, EUR million 10.1 4.8 28.0 10.2 17.3 Net fair value gains on investment property, EUR million 2.3 -0.7 52.9 0.4 8.7 Operating profit, EUR million 7.6 1.5 67.0 4.9 16.8 Gross rental income, EUR million 9.7 4.5 26.0
Slide 31: Property Portfolio – The Baltic Countries
Property Portfolio – The Baltic Countries Q1-Q3 Q1-Q3 The Baltic Countries Q3/2007 Q3/2006 2007 2006 2006 Turnover, EUR million 2.3 1.7 6.0 4.4 6.2 Net fair value gains on investment property, EUR million 2.5 2.4 9.3 5.5 6.6 Operating profit, EUR million 4.2 3.7 13.3 8.6 10.9 Gross rental income, EU
Slide 32: Property Portfolio - Changes During Q3 2007
0 500 1 000 1 500 2 000 2 500 Investment property Q2 1 799,2 329 • Citycon Q3 Presentation Iso Omena 16 Magistral 14 Other acquistions 10 Investments 1 Other 21 Fair value gains Property Portfolio - Changes During Q3 2007 Investment property Q3 2 191,2 Development property 14 Q2 Investments in 7 dev
Slide 33: Key Figures - Snapshot
Key Figures - Snapshot Income Statement and Balance Sheet Income Statement , EUR million Q3/2007 Q1-Q3/2007 Q1-Q3/2006 2006 Turnover 38.0 108.1 86.4 119.4 Net fair value gains on investment property 21.1 212.7 97.0 120.1 Net rental income 27.3 76.3 60.6 82.8 Operating profit 44.3 276.2 154.0 196.5 P
Slide 34: Key figures - Profitability
Key figures - Profitability Q1-Q3 Q1-Q3 Key Figures 2007 2006 2 006 Equity ratio, % 41.2 36.2 39.1 250 2 400 Gearing, % 122.3 156.9 136.6 2 200 200 2 000 Earnings per share (basic), EUR 1.01 0.64 0.78 1 800 Earnings per share (diluted),EUR (EPRA EPS) 0.91 0.62 0.74 150 1 600 Earnings per share (basi
Slide 35: Consolidated Cash Flow Statement Analysis
Consolidated Cash Flow Statement Analysis EUR MILLION Jan-Sep 2007 Jan-Sep 2006 ¾Cash from operations improved by some 22 % as a Cash flow from operating activities result of: Profit before taxes 243,5 131,9 Adjustments -178,9 -79,8 ¾ Improved profits Change in working capital -4,2 -1,1 ¾ Relatively
Slide 36: Net Rental Income - 2006 versus 2007
Net Rental Income - 2006 versus 2007 90,0 1,6 1,2 80,0 14,3 2,5 70,0 -3,9 76,3 60,0 60,6 50,0 40,0 30,0 20,0 10,0 0,0 1-9 2006 Acquistions Development Divestments Like-for-like Other 1-9 2007 • Citycon Q3 Presentation 36
Slide 37: Key Figures – Group NRI and EBIT Margins Edge Higher
Key Figures – Group NRI and EBIT Margins Edge Higher Quarterly development of NRI and NRI-% Quarterly development of EBIT and EBIT-% EUR m EUR m 40 80 % 40 70 % +40.9% +42.2% 35 75 % 35 65 % 30 27,3 70 % 30 60 % 25,8 25 23,2 65 % 25 23,3 55 % 21,6 22,1 21,4 19,4 19,6 19,3 18,9 20 60 % 20 17,9 50 % 1
Slide 38: Key Figures - EBIT improving also in most business areas
Key Figures - EBIT improving also in most business areas Finland Sweden 40 EURm 70 % 40 EURm 70 % 35 +12.5% 65 % 35 +376% 65 % 30 60 % 30 60 % 25 55 % 25 55 % 17,2 16,8 17,8 20 15,8 16,3 16,1 16,2 50 % 20 50 % 15 45 % 15 45 % 10 40 % 10 5,2 5,6 40 % 3,6 3,7 1,2 1,2 2,2 5 35 % 5 35 % 0 30 % 0 30 % Q1
Slide 39: Key Figures – NAV and EPS Evolution
Key Figures – NAV and EPS Evolution EPRA NAV versus Share EPS and Equity Ratio 6 5,5 1,10 50 5 1,00 45 4,5 0,90 40 4 0,80 3,5 35 0,70 3 30 0,60 € % 2,5 25 0,50 2 20 0,40 1,5 0,30 15 1 10 0,20 0,5 5 0,10 0 0,00 0 2006/Q2 2006/Q3 2006/Q4 2007/Q1 2007/Q2 2007/03 2006/Q2 2006/Q3 2006/Q4 2007/Q1 2007/Q2
Slide 40: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of loans and derivatives Interest-bearing debt by fixing type 2007 - 2016 EUR 1,263.7 million 1) 500 EUR 1,263.7m Floating rate debt Fixed rate debt 450 437 EUR 618.4m 34% 17% 400 EUR 50.0m 350 332 300 250 200 154 158 150 113 100 98 92 83 Fixed rate
Slide 41: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,263.7 million 1) EUR 1,263.7 million 1) LTL 1% Other Syndicated term loans 12% EEK 2% 34% EUR 72% Bridge SEK 24% 25% CP’s 7% Bonds 14% Revolving credit facility 10% The backbone of the debt financing continues to be th
Slide 42: Key Figures – Interest Rates and LTV
Key Figures – Interest Rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) 5,00 % 1 200 1 184,3 70 % 1 100 60 % 4,50 % 1 000 50 % 4,00 % 900 878,2 40 % 863,3 3,50 % 811,2 800 783,3 30 % 3,00 % 700 20 % 652,3 608,5 2,50 % 600 10 % Q1-06 Q2-06 Q3-06 Q4-06 Q1-07 Q2-07 Q3-07 Q
Slide 43: Net Financial Expenses Q2 vs Q3 2007
Net Financial Expenses Q2 vs Q3 2007 14 0,3 13,3 1,6 12 0,04 1,5 10,0 10 Change in interest expenses 8 Iso Omena 0,7 Strömpilen 0,2 6 Magistral 0,2 New debt 0,6 4 Higher fixings 0,1 Capitalised interest -0,4 2 Change 1,5 0 2Q2007 Interest expense Fees Derivative valuation Other 3Q2007 • Citycon Q3 P
Slide 44: Breakdown of Net Financial Expenses
Breakdown of Net Financial Expenses 3q 2q 3q Change-% Change-% YTD YTD Change-% Net Financial Expenses (EUR million) 2007 2007 2006 (y-o-y) (q-o-q) 2007 2006 (YTD) Financial Expenses: Interest expenses -11,2 -9,7 -8,7 30 % 16 % -30,4 -22,3 36 % Foreign exchange losses 0,1 0,0 -0,6 -113 % n.m. 0,0 0,
Slide 45: Key Figures – Share Performance
Key Figures – Share Performance 1) 7 6 5 +101% 4 +85% 3 +52% 2 1 0 01-05 04-05 07-05 10-05 01-06 04-06 07-06 10-06 01-07 04-07 07-07 FTSE EPRA OMX Helsinki CAP Citycon • Citycon Q3 Presentation 45 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on 3 January 2007 have been rebased to
Slide 46: Key Figures - Share Data
Key Figures - Share Data Starting from 1 July the company is included at OMX Large Cap List Breakdown of shareholders 18 October Market capitalisation totalled EUR 4.76 % 830 million 95.24 % 95.24 % of shareholders are international as of 30 September, 2007 2030 shareholders Gazit –Globe o
Slide 47: Backup Information
Backup Information • Citycon Q3 Presentation 47
Slide 48: Business Environment – REIT Legislation
Business Environment – REIT Legislation Finland’s new right-wing Government stated in Government program in April the intention to review the legislation on real estate investment funds and adopt a new taxation policy for Finnish limited real estate funds to ensure their international competitiven
Slide 49: Citycon in Brief - Background
Citycon in Brief - Background Citycon’s path to becoming the market leader and an international property investment company 1988 2004 2006 Quoted on the Main List of Citycon continues to Helsinki Stock Exchange Office Citycon continues to growth Ownership structure expand acquiring several p
Slide 50: Citycon in Brief
Citycon in Brief Mission Demonstrating expertise in retail property business, Citycon not only owns, manages, leases and develops shopping centres and other retail properties but also develops new retail premises. Vision Citycon aims to expand its property portfolio and increase its value. The c
Slide 51: Citycon in Brief
Citycon in Brief • Citycon Q3 Presentation 51
Slide 52: Citycon in Brief - Management
Citycon in Brief Management Petri Olkinuora, CEO Eero Sihvonen, CFO Outi Raekivi Head of Legal Affairs Kaisa Vuorio Ulf Attebrant Harri Holmström Vice President Vice President Vice President Finnish Operations Swedish Operations Baltic Operations • Citycon Q3 Presentation 52
Slide 53: Citycon Properties – Core Shopping Centres
Citycon Properties – Core Shopping Centres Lippulaiva Myyrmanni Trio Built 1993 1994 1977/87 GLA 23.000 m2 40.200 m2 32.200 m2 Owned 100 % 100 % 89.3 % Finland Iso Omena 2001 Koskikeskus Forum Columbus 61.300 m2 1988 1953/91 1997/07 100 % 25.700 m2 17.400 m2 20.400 m2 88 % Citycon 69 % 100 % Jakobsb
Slide 54: Contact Information
Contact Information Investor Relations Mr Petri Olkinuora CEO Tel. +358 9 6803 6738 Fax +358 9 6803 6788 Petri.Olkinuora@citycon.fi Mr Eero Sihvonen CFO Tel. +358 50 5579 137 Fax +358 9 6803 6788 Eero.Sihvonen@citycon.fi Trio Trio Finland Finland Ms Hanna Jaakkola Investor Relations Officer Tel. +35