Slide 1: Full year 2013 Results
Full year 2013 Results 1
Slide 2: Disclaimer
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Slide 3: Citycon's Vision
Citycon’s Vision • Be the household name for Nordic and Baltic retail real estate • Offer the best retail and social experience in urban, grocery-anchored shopping centres • Be “recognised” by retailers, shoppers, and investors as the leader in its class Lippulaiva, Helsinki Metropolitan Area IsoKri
Slide 4: Geographical positioning
Geographical positioning Net rental income (2013) Fair values of properties (Dec 2013) —with Kista Galleria 100% —with Kista Galleria 100% EUR million EUR million 25.6 342 13% 11% 103.5 51% 1,671 51% Sweden 71.7 1,255 36% 38% Finland Finland Finland Sweden Sweden Baltic Countries & New Business Balt
Slide 5: Leading position in core markets
Leading position in core markets GAV1) of retail real estate portfolio in the Nordic and Baltic regions Steen&Strøm 4.2 Citycon 2) 3.2 Unibail-Rodamco 2.3 Atrium Ljungberg 3) 1.5 Hufvudstaden 4) 0.8 Sponda 5) 0.7 Eurocommercial 6) 0.7 Wereldhave 0.5 0 1 2 3 4 5 Source: Company financials EUR billion
Slide 6: Five core assets
Five core assets 1 Sweden—Kista Galleria 2 3 Finland—Iso Omena Sweden—Liljeholmstorget Galleria Company to provide picture Company to provide picture 4 5 Finland—Koskikeskus Estonia—Rocca al Mare Company to provide picture Retail Fair value Net Visitors Sales Total GLA Parking Economic City premises
Slide 7: Business environment
Business environment Rocca al Mare, Tallinn 7
Slide 8: Consumer confidence
Consumer confidence 40 30 20 10 0 1.1.2009 1.3.2009 1.5.2009 1.7.2009 1.9.2009 1.11.2009 1.1.2010 1.3.2010 1.5.2010 1.7.2010 1.9.2010 1.11.2010 1.1.2011 1.3.2011 1.5.2011 1.7.2011 1.9.2011 1.11.2011 1.1.2012 1.3.2012 1.5.2012 1.7.2012 1.9.2012 1.11.2012 1.1.2013 1.3.2013 1.5.2013 1.7.2013 1.9.2013 1
Slide 9: Business environment
Business environment • November unemployment rates Retail sales (January-November)1)& below the Euro area average (12.1%): CPI (December) • Finland 8.4% • Sweden 8.0% Retail Sales CPI • Estonia 9.0% (October 2013) 6,0 % 5,0 % • Lithuania 11.1% (October 2013) 4,5 % • Denmark 6.9% 4,0 % 2,0 % 1,6 % 1,
Slide 10: Economic outlook
Economic outlook GDP growth Inflation 12% 6% 10% 5% 8% 4% Change % Change % 6% 3% 4% 2% 2% 1% 0% 0% -2% Finland Sweden Denmark Estonia LithuaniaEuro area Finland Sweden Denmark Estonia Lithuania Euro area 2011 2012 2013E 2014E 2015E 2011 2012 2013E 2014E 2015E Unemployment Public sector debt as % of
Slide 11: Responding to the changing retail landscape
Responding to the changing retail landscape Citycon: Urbanisation • Growing urban population • 87% of total portfolio in main • Increased urban GDP per capita cities • 70% in capital cities Convenience • Demand for proximity, security, • Vast majority of centres cleanliness, services, and atmosphere
Slide 12: Highlights 2013
Highlights 2013 Kista Galleria, Stockholm 12
Slide 13: Highlights 2013
Highlights 2013 Good financial performance Substantial reduction of admin expenses Successful integration of Kista Galleria Stronger financial position Recycling of capital Start of accretive (re)developments Nasdaq, New York 13
Slide 14: Highlights 2013: Good financial performance
Highlights 2013 Good financial performance Y-o-Y EUR million Q4/2013 Q4/2012 FY 2013 % Change Net Rental Income 41.9 42.1 168.9 4.2% Administrative expenses 5.5 7.9 20.6 -22.2% EPRA Operating Profit 36.5 34.2 149.1 9.9% Net financial income and expenses -15.1 -17.4 -90.1 32.2% EPRA Earnings 22.1 16.
Slide 15: Like-for-like net rental income development
Highlights 2013 Good financial performance Like-for-like net rental income 6% development 2013: 4.9% 5% 4.6% Continued strong like-for-like net rental income growth in both 3.8% 4% • Shopping centres: 4.5% • Supermarkets & shops: 5.6% L-f-L NRI growth, % 3% Strong growth in all regions 2% • Finland:
Slide 16: Like-for-like shopping centre sales and footfall
Highlights 2013 In all Citycon SC’s Good financial performance Total sales: +1% Total footfall: 0% L-f-L shopping centre sales L-f-L shopping centre footfall 120 6% 2 000 3% 1 800 5% 100 5% 2% 2% 1 600 4% 1 400 1% 80 3% 1% Sales, EUR million Million Visitors 1 200 Change, % 2% Change, % 60 1 000 0%
Slide 17: Occupancy rate and average rent
Highlights 2013 Good financial performance Q4/2013 Q4/2012 Q3/2013 Occupancy rate (economic), % 95.7 95.7 95.8 L-f-L occupancy rate (economic), % 95.2 95.4 95.3 Occupancy cost ratio, % 8.6 8.5 8.6 (L-f-L shopping centres) Average rent, EUR/sq.m./mth 21.5 20.7 21.5 • Occupancy rate stable year-on-yea
Slide 18: Substantial reduction of admin expenses
Highlights 2013 Substantial reduction of admin expenses Target: up to EUR 5 million Result: EUR 5.9 million 30 27.7 26.5 -22% 25 23.3 20.6 Total administrative expenses, 20 17.8 EUR in million 15 10 5 0 2009 2010 2011 2012 2013 Cost savings target exceeded 18
Slide 19: Successful integration of Kista Galleria
Highlights 2013 Successful integration of Kista Galleria Performance in line with expectations EUR million FY 2013 Net Rental Income 32.0 Operating profit 29.6 Fair value 535.2 Fair value change 2.8 Net rental yield1) 6.1% Occupancy rate, economic 99.1% Average rent EUR/sq.m./mth 33.7 Upgrading of K
Slide 20: Stronger financial position
Highlights 2013 Stronger financial position 2013 key events: 48% EUR 200 million • 99.7% covered by rights issue primary subscription 46% 45.3% • 1.5x oversubscribed 44% Two investment- • S&P and Moody’s grade credit • Only Nordic real estate 42% ratings company Equity ratio 40% EUR 500 million • 1.
Slide 21: Recycling of capital
Highlights 2013 Recycling of capital Non-core divestments 150 Proceeds invested in accretive (re)development projects and property upgrades 98.5 100 EUR million Three divestments signed/closed 59.7 after Q4 2013 for a total value of 50 EUR 8.7 million: • SC Koskikara • Retail property Säkylä • Resid
Slide 22: Successful divestment of non-cores
Highlights 2013 Successful divestment of non-cores Case - Divestment of SC Torikeskus in Seinäjoki in December 2013 Sales price in line Occupancy rate (economic) IFRS/Sales value with latest IFRS valuation 100% 16 14.7 96.4% 95.9% 96% 14 13.3 11.7 EUR in million 92% 12 88.8% % 10.3 88% 10 84% 83.4%
Slide 23: Start of accretive (re)developments
Highlights 2013 Start of accretive (re)developments 4 ongoing (re)development projects with estimated investment value of EUR 165 million Property Area Citycon’s Cum. Expected yield Pre- Est. of before and estimated realised capex on completion leasing completion after investment (EUR m) when stabil
Slide 24: Development pipeline
Highlights 2013 Development pipeline 4 (re)development projects in planning1) Property Additional Citycon’s Target for Target Additional information sq.m. expected net project year of investment initiation completion (EUR m)2) Lippulaiva 15,000– 40-50 2015 2016 Extension possibility of the shopping
Slide 25: Summary
Highlights 2013 Summary Strong operational results Stronger portfolio Stronger balance sheet 25
Slide 26: 2014 onwards
2014 onwards Business • GDP still below zero environment: • Unemployment >8% Challenging • Increasing taxes and moderate salary retail market increases especially in Finland => Pressure on consumer demand and rental growth potential Citycon: • Urban properties in best locations Still well • Grocery-
Slide 27: Property portfolio, (re)developments & sustainability
Property portfolio, (re)developments & sustainability IsoKristiina, Lappeenranta 27
Slide 28: Property portfolio
Property portfolio • 3,287 (3,792) leases with an average length of 3.5 (3.5) years • Total GLA 961,790 m2 (1,000,270 m2) • Rents linked to CPI (nearly all agreements) Occupancy cost ratio L-f-L Shopping centres, rolling 12 month Total 8.6% Finland 9.8% Sweden 6.9% Baltic Countries & New 8.0% Busine
Slide 29: Property portfolio: average remaining lease length
Property portfolio Average lease maturity over time • Measured in fair value, like-for-like properties Occupancy (%) accounted for 74.9% of the total portfolio and of 95.0 95.1 95.5 95.7 95.7 l-f-l portfolio 68.6% is in Finland and 84.1% of the total Finnish portfolio is included in l-f-l. 4 3.4 3.5
Slide 30: Valuation yield development
Valuation yield development Fair value of investment properties EUR 2,733.5 million • Total fair value gains in 2013 EUR 26.1 million • Fair value gains in shopping centres EUR 25.2 million • Fair value gains in supermarkets and shops EUR 0.9 million Net yield requirement for entire property portfol
Slide 31: Extension and (re)development of Iso Omena
Extension and (re)development of Iso Omena The shopping centre's retail area will grow to 75,000 square metres Vantaa Extension will be fully integrated with the new Matinkylä metro station and bus terminal Approx. 35,000 passengers will pass through the Helsinki metro centre each day Espoo City Cen
Slide 32: Strategic (re)development and partnership in IsoKristiina
Strategic (re)development and partnership in IsoKristiina • IsoKristiina is located in the city centre of Lappeenranta, in Eastern Finland 25 km from the Russian border • Catchment area is the whole city of Lappeenranta (approximately 72,000 inhabitants) • In addition, constantly growing Russian tou
Slide 33: Environmental targets and results
Environmental targets and results Strategic objectives related to environmental Performance responsibility Targets for 2013 in 2013 Climate Change Reduction of greenhouse gas emission by 20 per cent In l-f-l SC: 2-3% by year 2020 from the 2009 level -5.9% Energy Reduction of energy consumption (elec
Slide 34: Financial figures
Financial figures Myyrmanni, Helsinki Metropolitan Area 34
Slide 35: Summary of 2013 Financial results
Summary of 2013 Financial results FY 2013 incl. 100% EUR million Q4/2013 Q4/2012 FY 2013 FY 2012 Kista Galleria1) Net Rental Income, Total 41.9 42.1 168.9 200.9 162.0 NRI, Finland 26.3 25.7 103.5 103.5 98.2 NRI, Sweden 9.0 10.0 39.7 71.7 39.2 NRI, Baltic Countries & 6.6 6.5 25.6 25.6 24.6 New Busine
Slide 36: NRI development
NRI development 175 170 168.9 0.6 5.5 165 0.6 EUR in million 1.2 162.0 -1.1 160 155 150 FY 2012 Acquisitions (Re)development Divestments Like-for-like Other (incl. FY 2013 projects properties exchange rates) 36
Slide 37: Snapshot of statement of comprehensive income
Snapshot of statement of comprehensive income EUR million Q4/2013 Q4/2012 FY 2013 FY 2012 Turnover 62.0 62.1 248.6 239.2 Property operating expenses 19.6 20.1 78.4 75.8 Other expenses from leasing operations 0.4 -0.1 1.3 1.4 Net rental income 41.9 42.1 168.9 162.0 Administrative expenses 5.5 7.9 20.
Slide 38: New disclosure: EPRA Cost Ratio
New disclosure: EPRA Cost Ratio EUR million FY 2013 FY 2012 EPRA Costs (incl. direct vacancy costs) (A) 45.7 48.3 EPRA Costs (excl. direct vacancy costs) (B) 40.7 42.8 Gross Rental Income (C) 209.6 183.9 EPRA Cost Ratio (incl. direct vacancy costs) (A/C, %) 21.8 26.2 EPRA Cost Ratio (excl. direct va
Slide 39: Snapshot of statement of financial position
Snapshot of statement of financial position Statement of financial position, EUR million 31 Dec 2013 31 Dec 2012 Investment properties 2,733.5 2,714.2 Total non-current assets 2,898.6 2,737.6 Total current assets 74.5 75.5 Total assets 2,975.4 2,818.5 Total shareholder’s equity 1,340.6 1,059.9 Total
Slide 40: Property portfolio
Property portfolio Q4/2013 Q4/2012 FY 2013 FY 2012 Occupancy rate (economic), % 95.7 95.7 95.7 95.7 Average rent, 21.5 20.7 21.5 20.7 EUR/sq.m. Number of leases started 163 195 611 792 during the period Total area of leases started, 52,697 40,257 150,013 141,167 sq.m.1) Average rent of leases starte
Slide 41: Outlook 2014
Outlook 2014 EPRA Operating Profit, EUR million EPRA Earnings, EUR million EUR 147.1 – EUR 88.7 – 170 110 EUR 155.1 EUR 96.7 150 90 130 110 70 149.1 147,1 135.7 86.7 88,7 90 117.4 107.7 105.0 50 63.9 70 53.3 50.9 47.3 50 30 2009 2010 2011 2012 2013 2014E 2009 2010 2011 2012 2013 2014E EPRA Operating
Slide 42: Financing overview
Financing overview Liljeholmstorget Galleria, Stockholm 42
Slide 43: Financing overview – Key figures
Financing overview – Key figures KEY RATIOS Q4/2013 Q3/2013 Q4/2012 Equity ratio, % 45.3 44.1 37.8 Loan-to-value (LTV), % 52.1 53.4 54.5 Gross Debt, EUR million 1,462.4 1,490.2 1,538.8 Cash, EUR million 38.0 25.0 51.0 Current average interest rate, % 4.12 4.07 4.25 Year-to-date average interest rate
Slide 44: Debt type and currency split
Debt type and currency split Breakdown by debt type Breakdown by currency EUR 1,471.3 m 1) EUR 1,471.3 m 1) • Well diversified debt sources following the EUR 500 million Eurobond issue in Q2, with bonds now accounting for 45% of total outstanding debt. • EUR 500 million Eurobond issue has shifted th
Slide 45: Debt maturities and interest risk hedging
Debt maturities and interest risk hedging Maturity profile of loans and derivatives Interest-bearing debt by fixing type EUR 1,471.3 m • Average loan maturity decreased in Q4 still being longer than in Q4/2012 (3.2 years) due to the 7-year EUR 500 million Eurobond issued in June 2013. • Hedging rati
Slide 46: Financial expenses analysis
Financial expenses analysis Net Financial Expenses (EUR thousand) Q4/2013 Q3/2013 Q4/2012 Q1-Q4/2013 Q1-Q4/2012 Change % YTD Financial expenses: A Interest expenses -15 268 -15 919 -15 961 -64 348 -63 168 2% Foreign exchange gains(+)/ losses(-) -4 -32 B -108 46 -24 -288 % Amortisation of capitalised
Slide 47: Share performance and volume
47 1000000 2000000 3000000 4000000 5000000 6000000 7000000 0 2.1.2012 19.1.2012 7.2.2012 24.2.2012 14.3.2012 2.4.2012 23.4.2012 11.5.2012 31.5.2012 19.6.2012 9.7.2012 26.7.2012 14.8.2012 31.8.2012 19.9.2012 8.10.2012 25.10.2012 13.11.2012 Citycon share volume 30.11.2012 20.12.2012 15.1.2013 Share pe
Slide 48: Ownership, 31 December 2013
Ownership, 31 December 2013 Shareholders • Established and listed on the Helsinki Stock Domestic International Exchange since 1988 • Market cap EUR 1 129.7 million 22.2% • Number of domestic shareholders stayed stable: total 8,820 (7,717) registered 77.8% shareholders, 22.2% (23.3%) of total • Large
Slide 49: Back up information
Back up information Koskikeskus, Tampere 49
Slide 50: History of Citycon
History of Citycon Citycon’s 25 years! International New management Foundation expansion and new strategy 1988 2003 2011 Founded by Sampo Pension Ltd, Citycon business to include • Citycon’s new CEO, Marcel Kokkeel, Imatran Voima Oy, development as well as owning, joined the company Rakennustoimisto
Slide 51: NRI growth by segments and portfolios
NRI growth by segments and portfolios Baltic Countries EUR million Finland Sweden & New Business Other Total Turnover 2011 90,5 35,4 18,4 0,0 144,3 217,1 Acquisitions 1,5 1,4 4,6 - 7,5 11,1 (Re)development projects 4,6 0,6 0,6 - 5,8 8,3 Divestments -0,5 -1,7 - - -2,3 -4,6 Like-for-like properties 2,
Slide 52: Cash flow statement
Cash flow statement EUR million FY 2013 FY 2012 • Cash flows from operating activities Profit before taxes 90.1 95.5 decreased due mainly to one-off Adjustments 60.1 42.9 financial expenses relating to the 150.2 138.4 bond issue and refinancing (interest Cash flow before change in working capital -4
Slide 53: Lease expiry profile Q4/2013
Lease expiry profile Q4/2013 30% 25% 20% 15% 10% 5% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 +2024 Shopping centres % Other retail properties % Average remaining length: 3.5 yrs 53
Slide 54: Illustrative calculation of ICR covenant using Q4/2013 financials
Illustrative calculation of ICR covenant using Q4/2013 financials 1) Q4/2013 EBITDA for covenant EBITDA = EUR 149.1 + EUR 0.9+ calculation: direct operating profit EUR 0.5 + depreciations +/- non-cash and = EUR 150.5 million for rolling 12- exceptional items month period EUR million Cumulative EPRA
Slide 55: Illustrative calculation of equity ratio covenant using Q4/2013 financials
Illustrative calculation of equity ratio covenant using Q4/2013 financials 1) Equity for covenant calculation: Equity = EUR 1,340.6 + EUR 0.0 total shareholders’ equity + – EUR 51.0 + EUR 23.1 subordinated debt – non- = EUR 1,312.7 million as at 31 Dec controlling interest +/– fair value of 2013 der
Slide 56: Citycon's major shopping centres
Citycon’s major shopping centres Iso Omena Myyrmanni Trio (incl. Hansa) 1977,2007,2010 Lippulaiva Built 2001 1994,2007,2011 45,600 m2 1993,2007 GLA 63,300 m2 39,600 m2 89.3% 19,000 m2 Ownership 60% 100% 100% Finland Koskikeskus Forum Columbus 1988 1953,1991,2010 1997,2007 34,300 m2 16,800 m2 21,000
Slide 57: Contact information
Contact information INVESTOR RELATIONS Mr Marcel Kokkeel CEO Tel. +358 207 664 521 Marcel.Kokkeel@citycon.com Mr Eero Sihvonen Liljeholmstorget Galleria, Stockholm CFO, Executive Vice President Tel. +358 50 5579 137 Eero.Sihvonen@citycon.com Ms Henrica Ginström IR Manager Tel. +358 50 5544 296 Henri