Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — FY2008 Earnings Presentation
53 slides from Citycon Oyj's earnings presentation, 2009
Slide 1: Citycon Presentation Full Year Results 2008
Citycon Presentation Full Year Results 2008
Slide 2: Contents
Contents Mission, vision and strategy Main points and financial overview Business environment (Re)development projects Property portfolio Key figures Financing overview Backup information 2 FY 2008
Slide 3: Strategy: Mission and Vision
Strategy MISSION Our mission is to ensure that people shop in Citycon’s shopping centres. By combining property investment and shopping centre business, Citycon creates sustainable shareholder value. VISION Citycon is a shopping centre business leader, an active owner and a long‐term developer aimin
Slide 4: Strategy
Strategy Citycon’s strategy is: • To concentrate on shopping centre business in Finland, Sweden and the Baltic countries. • To manage and develop its shopping centres in a centralised manner, using Citycon’s own, active and professional personnel working locally. This creates efficiency and synergie
Slide 5: Financial targets
Financial targets Continued expansion through property development and selective acquisitions ¾ Cumulative CAPEX since 2005 in excess of EUR 1 billion GROWTH ¾ Main emphasis on organic growth Solid distribution policy Payout target 50 % of the result for the period after taxes DIVIDENDS excl. fair v
Slide 6: Geographical overview
Geographical overview FINLAND • 74.7% of total net rental income in 2008 • Net rental income growth of 20.1 % to EUR Sweden (€m) Finland (€m) 90.9 million 1,480.2 396.1 • Market leader with 24% market share; 22 126.8 122.5 90.9 shopping centers and 42 other retail properties 41.9 41.1 24.1 MV Turn-
Slide 7: Main points
Main points LAST QUARTER (vs. Q3) • The fair value change was EUR ‐59.3 million and the market value of property portfolio was EUR 2,023.6 million (EUR 2,094.4 m) • The valuation yield 6.4% (6.2%) by external appraiser. • Net rental income was EUR 30.2 million (EUR 31.5 m) • Direct result per share
Slide 8: Financing overview
Financing overview • Balance sheet total stood at EUR 2,178.5 million • Refinancing not an issue – total liquidity of EUR 203.7 million incl. unutilized committed debt facilities (EUR 187.0 m) and cash (EUR 16.7 m) ¾ Covers committed development pipeline and repayments at least until 2010 without ot
Slide 9: Business environment
Business environment 9 FY 2008
Slide 10: Business environment
Business environment GDP PRIVATE CONSUMPTION Source: Nordea 10 FY 2008
Slide 11: Business environment
Business environment CONSUMER CONFIDENCE 30,00 20,00 10,00 0,00 Finland 1.10.2007 1.12.2007 1.2.2008 1.4.2008 1.6.2008 1.8.2008 1.10.2008 Sweden ‐10,00 Estonia Lithiania Euro Zone ‐20,00 ‐30,00 ‐40,00 ‐50,00 Source: Eurostat 11 Consumer confidence indicator is conducted as an interview survey. It in
Slide 12: Business environment
Business environment PROPERTY MARKET 1) RETAIL SALES AND CPI • The views on property values differ significantly between the buying and selling parties. 7,5 7.0% • The few property deals conducted in 3.5% 2.7% Finland mainly between local institutional 2,5 0.9% investors, same in Sweden. ‐1.1% • In
Slide 13: (Re)development projects
(Re)development projects 13 FY 2008
Slide 14: Sustainable shopping centre – why and how?
Sustainable shopping centre –why and how? WHY? OUR ACTIONS • Energy and material costs will increase in the 1. Internal Green Shopping Centre Management future Programme to foster sustainable development in all • Legislation will get tighter Citycon shopping centres. Goals: • Consumers will be more
Slide 15: Completed (re)development projects
Completed (re)development projects TRIO Total redevelopment of Lahti downtown shopping centre. The most important shopping venue in its large catchment area,100 kilometers from Helsinki. Originally built in 1977/87 and consisted of three separate buildings. Adjacent Hansa‐building (11,400 m2, not in
Slide 16: Ongoing (re)development projects
Ongoing (re)development projects ROCCA AL MARE LILJEHOLMSTORGET Pilot project in sustainable construction. Extension Pilot project in sustainable construction. and redevelopment of existing shopping centre west Construction of a new shopping centre south of of Tallinn city centre. After the project
Slide 17: Ongoing (re)development projects – Rocca al Mare
Ongoing (re)development projects – Rocca al Mare 17 FY 2008
Slide 18: Ongoing (re)development projects – Liljeholmstorget
Ongoing (re)development projects – Liljeholmstorget 18 FY 2008
Slide 19: Liljeholmstorget - Stockholm shopping centers
Liljeholmstorget ‐ Stockholm shopping centers Liljeholmstorget 19 Source: Centrumutveckling AB FY 2008
Slide 20: (Re)development projects under planning
(Re)development projects under planning Citycon's Board of Directors has not yet made a decision on the (re)development project, but it is under planning, an alteration of the city plan is pending or Citycon (or its partner) has a site reservation. 1) The project area refers to the combination of th
Slide 21: (Re)development projects under planning
(Re)development projects under planning Citycon's Board of Directors has not yet made a decision on the (re)development project, but it is under planning, an alteration of the city plan is pending or Citycon (or its partner) has a site reservation. 1) The project area refers to the combination of th
Slide 22: Property portfolio
Property portfolio 22 FY 2008
Slide 23: Property portfolio
Property portfolio • 3,742 (3,700) leases with an average length of 3.2 (3.0) years • GLA totalled grew by 1.5 % to 937,650 m2 • Net rental income increased by 17.8% to EUR 121.8 million • Net rental income for like‐for‐like properties grew by 3.6% •NRI growth for l‐f‐l shopping centres grew by 4.5%
Slide 24: Property portfolio
Property portfolio RENTAL CONTRACTS BREAKDOWN OF PROPERTY PORTFOLIO • Major tenants largest grocery retailer in Nordics also fashion tenants and local discount 7.3 % department stores are important. • Largest tenant Finnish retailer Kesko with 26.6% of NRI 19.6% 73.1% • Five largest totaled 38.4% of
Slide 25: Shopping centre rental income by branches
Shopping centre rental income by branches *) *) Excl. Supermarket and shops ‐portfolio 25 FY 2008
Slide 26: Valuation yield development in the portfolio
Valuation yield development in the portfolio % 7,5 7 6,5 Finland Sweden 6 Baltic Countries Total 5,5 5 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Valuation yield above is based on external valuator’s portfolio valuation. 26 FY 2008
Slide 27: Property portfolio
Property portfolio TOTAL PORTFOLIO Q4 2008 Q4 2007 2008 2007 30.2 27.1 121.8 103.4 Net Rental Income, EUR million Number of leases started 1) 255 164 572 512 during the period 2 69,730 27,854 124,960 103,408 Total area of leases started, m Occupancy rate at end of the 96.0 95.7 period ,% Average len
Slide 28: Sales area by branch for each cluster
Sales area by branch for each cluster Citycon has classified the Finnish shopping centres into three cluster according to their role in a consumer’s life. 28 FY 2008
Slide 29: Key figures
Business Environment 29 FY 2008
Slide 30: Key figures
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Slide 31: Income statement - snapshot
Income statement ‐ snapshot EUR million Q4 2008 Q4 2007 2008 2 007 Gross rental income 43.7 40.6 173.0 143.7 Service charge income 1.5 2.7 5.3 7.7 Turnover 45.2 43.3 178.3 151.4 Property operating expenses 14.9 16.0 56.3 47.8 Other expenses from leasing operations 0.1 0.2 0.2 0.3 Net rental income 3
Slide 32: Key figures – profitability
Key figures – profitability QUARTERLY NET RENTAL INCOME BY SEGMENTS QUARTERLY OPERATING PROFIT 1) BY SEGMENT CAGR +17.5% CAGR +17.5% • Citycon has posted solid quarterly growth since 2006 both in terms of Net rental income and Operating profit • Compound annual growth rate (CAGR) has been around 17.
Slide 33: Balance sheet – snapshot
Balance sheet – snapshot BALANCE SHEET, EUR million 31 Dec 2008 31 Dec 2007 Fair market value of investment properties 2,023,6 2,215.7 Total non‐current assets 2,126.1 2,260.5 Current assets 52.4 48.1 Assets total 2,178.5 2,308.6 Total share holders equity 837.3 1,010.9 Liabilities 1,341.2 1,297.7 L
Slide 34: Consolidated cash flow statement FY 2008
Consolidated cash flow statement FY 2008 • Cash flows from operations improved by 20% due to: • Improved cash generation through higher profits • Taxes were clearly below year 2007 paid taxes due to a large tax rebate received in 1q 2008 resulting from the change in depreciation policy in 2007 • Cas
Slide 35: Key figures – financing overview
Key figures – financing overview INTEREST‐BEARING DEBT BY FIXING MATURITY PROFILE OF LOANS AND DERIVATIVES TYPE EUR 1,211.3 MILLION1) Loans (EUR 1,211.3) Fixed derivatives (EUR 609.8m) Floating rate debt 26% Fixed rate debt 24% Fixed rate swaps 50% • During fourth quarter in 2008, the period‐end int
Slide 36: Key figures – financing overview
Key figures – financing overview MATURITY PROFILE OF FIXED AND FLOATING RATE LOAND AND UNDRAWN COMMITTED CREDIT LIMITS PERIOD‐END INTEREST RATE BY MATURITY Fixed (EUR 293.0m) Average 4.75% Floating (EUR 918.3m) Undrawn credits (EUR 187.0m) • Bulk of Citycon’s debt is due on or after 2013 • Majority
Slide 37: Key figures - debt portfolio
Key figures ‐ debt portfolio BREAKDOWN BY DEBT TYPE BREAKDOWN BY CURRENCY EUR 1,211.3 MILLION 1) EUR 1,211.3 MILLION 1) Other LTL 1% 25% Syndicated term loans EEK 4% 47% EUR 67% SEK 28% Revolving credit facility 15% Bonds 13% • The backbone of the debt financing continues to be the syndicated term a
Slide 38: Key figures – interest rates and LTV
Key figures – interest rates and LTV QUARTERLY DEVELOPMENT OF INTEREST RATES 1) NET DEBT AND LTV‐% 2) • Interest rates feed through income statement with certain lag and Citycon’s average interest rate decreased marginally to 4.85% while market interest rates plunged in Q4 • Lower money market rates
Slide 39: Breakdown of financial expenses
Breakdown of financial expenses 4Q 2008 2008 YTD • Interest expenses decreased 4% from the previous quarter to EUR • Full‐year net financials expenses increased by 26%. Citycon’s direct 12.9 million due to plunging interest rates operating profit on the other hand was up year‐on‐year by • Total net
Slide 40: Net financial expenses Q3 2008 vs Q4 2008
Net financial expenses Q3 2008 vs Q4 2008 40 FY 2008
Slide 41: Key figures – share performance
Key figures – share performance 1) 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 1.1.2004 1.7.2004 1.1.2005 1.7.2005 1.1.2006 1.7.2006 1.1.2007 1.7.2007 1.1.2008 1.7.2008 1.1.2009 FTSE EPRA Nasdaq OMX Helsinki CAP Citycon 41 FY 2008 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on 3 January 200
Slide 42: Ownership
Ownership • End of year market capitalisation totaled EUR SHAREHOLDERS 371.3 million • 95.3 % of shareholders international 4.70 % • One of the highest in Helsinki stock exchange • 2190 registered shareholders • Largest Shareholders: • Gazit‐Globe 43.4% • Perennial Investment Partners Ltd >5% • ING
Slide 43: Backup information
Backup information 43 FY 2008
Slide 44: Property portfolio – Finland
Property portfolio – Finland FINANCIAL PERFORMANCE Q4 2008 Q4 2007 Q3 2008 2008 2007 Change‐% Number of leases started during the period 193 151 66 452 442 2.3 Total area of leases started, sq.m. 31,930 18,640 11,090 79,130 74,400 6.4 Occupancy rate at end of the period, % 95.7 95.7 95.6 0.1 Average
Slide 45: Property portfolio – Sweden
Property portfolio – Sweden FINANCIAL PERFORMANCE Q4 2008 Q4 2007 Q3 2008 2008 2007 Change‐% Number of leases started during the period 19 13 13 58 49 18.4 Total area of leases started, sq.m. 9,060 9,179 1,670 15,340 25,800 ‐40.5 Occupancy rate at end of the period, % 94.8 96.0 95.1 0.9 Average rema
Slide 46: Property portfolio – The Baltic Countries
Property portfolio – The Baltic Countries FINANCIAL PERFORMANCE Q4 2008 Q4 2007 Q3 2008 2008 2007 Change‐% Number of leases started during the period 43 ‐ 2 62 21 195.2 Total area of leases started, sq.m. 28,740 ‐ 50 30,490 3,208 850.4 Occupancy rate at end of the period, % 99.8 99.8 100.0 ‐0.2 Aver
Slide 47: Illustrative calculation of ICR covenant using FY 2008 financials
Illustrative calculation of ICR covenant using FY 2008 financials* FY 2008 EBITDA for covenant calculation: EBITDA = EUR 105.3 + EUR 0.5 + EUR 1.0 direct operating profit + depreciations +/‐ = EUR 106.8 million for previous 12‐month non‐cash and exceptional items period FY 2008 ICR = (106.8/54.2) =
Slide 48: Illustrative calculation of equity ratio covenant using FY 2008 financials
Illustrative calculation of equity ratio covenant using FY 2008 financials* Equity for covenant calculation: total Equity = EUR 837.3 + EUR 143.3 – EUR 38.2 + shareholders’ equity + subordinated debt (cf. EUR 17.7 Note 23) – minority interest +/– fair value of = EUR 960.1 million as at 31 Dec 2008 d
Slide 49: Citycon in brief - background
Citycon in brief ‐ background Citycon’s path to becoming the market leader and an international real estate company 1988 2004 2007 Quoted on the Main List of Helsinki Citycon continues to growth The company strengthens its Stock Exchange Office portfolio Ownership structure becomes very shop
Slide 50: Country organisation
Country organisation 50 FY 2008
Slide 51: Management
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 51 FY 2008
Slide 52: Contact information
Contact information INVESTOR RELATIONS Mr Petri Olkinuora CEO Tel. +358 207 664 401 Petri.Olkinuora@citycon.fi Mr Eero Sihvonen CFO Tel. +358 50 5579 137 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola IRO Tel. +358 40 5666 070 Hanna.Jaakkola@citycon.fi 52 FY 2008
Slide 53: Disclaimer
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