Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q1 2013 Earnings Presentation
54 slides from Citycon Oyj's earnings presentation, 2013
Slide 1: Q1 2013 Results
Q1 2013 Results Strictly Private and Confidential
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: Geographical positioning
Geographical positioning Net rental income Fair values of properties, (EUR million) —with Kista Galleria 100 % —with Kista Galleria 100 % 318 13% 10 % 50% 1 658 Sweden 51 % 1 285 36% 39 % Finland Finland Finland Sweden Sweden Baltic Countries & New Business Baltic Countries & New Business Estonia De
Slide 4: Geographical positioning
Geographical positioning Citycon celebrates it’s 25th anniversary this year. Citycon became the first retail property specialist in Finland 15 years ago and has now very strong foothold in the whole region: FINLAND • Market leader • Net rental income in Q1/2013 EUR 24.2 million • Currently 23 shoppi
Slide 5: Five core assets
Five core assets 1 Sweden—Kista Galleria 5 2 Sweden—Liljeholmstorget Galleria Finland—Iso Omena Company to provide picture Company to provide picture 4 3 Finland—Koskikeskus Estonia—Rocca al Mare Company to provide picture Retail premises Parking (# of Fair value (EUR Sales (EUR 2012 City Total GLA
Slide 6: Five year strategy—defined focus, increased total return
Five year strategy—defined focus, increased total return 1 2 3 Better Stronger Bigger Operational Financial Leverage the Excellence: Excellence: Expertise: – Improve organic – Strong balance – Execute selective growth sheet property – Focus on urban, – Funding acquisitions leading grocery diversific
Slide 7: Business environment
Business environment 7 Q1 2013
Slide 8: Business environment
Business environment CONSUMER CONFIDENCE 40 30 20 10 0 1.1.2008 1.3.2008 1.5.2008 1.7.2008 1.9.2008 1.11.2008 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 1.5.201
Slide 9: Strong economic outlook in all current Citycon countries
Strong economic outlook in all current Citycon countries GDP growth Inflation 10 % 6% 8% 5% 4% Change, % 6% Change, % 3% 4% 2% 2% 1% 0% 0% Sw eden Finland Denmark Estonia Lithuania Euro zone -2 % Sw eden Finland Denmark Estonia Lithuania Euro zone 2011 2012 2013E 2014E 2011 2012 2013E 2014E Unemploy
Slide 10: Business environment
Business environment February unemployment rates below Retail sales (Jan-Feb)1) & CPI (March) the European Union average (10.9%): Retail Sales CPI • Finland 8.1 % 4,0 % 3,5 % • Sweden 8.2 % 3,2 % • Estonia 9.9 % (Jan 2013) 3,0 % 2,0 % • Lithuania 13.3 % (Jan 2013) 2,0 % 1,7 % 0,9 % 1,0 % In the real
Slide 11: Sales and footfall in all Citycon SC's
Sales and footfall In all Citycon SC’s total sales : +1 % total footfall : +2 % LFL Shopping Centre Sales LFL Shopping Centre Footfall 500 1% 30 10% 9% 450 8% 0% 25 400 350 6% 0% 20 Million Visitors 300 Sales, MEUR 4% Change, % Change, % 250 15 2% 200 -1% -1% 10 0% 150 0% 100 5 -2% -2% 50 -2% -3% -3
Slide 12: Highlights of Q1 2013
Highlights of Q1 2013 12 Q1 2013
Slide 13: Highlights of Q1 2013
Highlights of Q1 2013 Good financial • Like-for-like net rental income growth of 3.5 % performance in Q1 • EPRA Operating Profit EUR 35.4 million, increase 14.3 % • EPRA Earnings EUR 19.7 million, increase 37.5 % • Net fair value gains of EUR 11.8 million Closing of Kista • Strategic move to rebalan
Slide 14: Highlights of Q1 2013
Highlights of Q1 2013 Strategic • 50/50 joint venture with Ilmarinen as co-developer and co-owner (re)development and • Recycling of capital by selling 50 % of existing centre to Ilmarinen partnership in in Q1 based on IFRS market value IsoKristiina • Close to 60 % of lease agreements signed/agreed
Slide 15: Summary of Q1 2013 – Operational results
Summary of Q1 2013 – Operational results in EUR million Q1 2013 Like-for-like NRI growth, total 3.5 % L-f-l Shopping centre NRI growth 3.8 % L-f-l Supermarket & shops NRI growth 1.9 % L-f-l Shopping centre sales development -1.0 % L-f-L Shopping centre footfall development 0.0 % • Three trading days
Slide 16: Summary of Q1 2013 – Portfolio key numbers
Summary of Q1 2013 – Portfolio key numbers Excluding Kista Galleria Q1 2013 Q1 2012 Q4 2012 Occupancy rate (economic), % 95.0 95.5 95.7 Occupancy cost ratio, % (LFL shopping centres) 8.6 8.9 8.9 Average rent (EUR/sq.m.) 21.3 20.5 20.7 Fair value gain, EUR in million 11.8 5.9 3.8 Net yield requiremen
Slide 17: Summary of Q1 2013 – Financial results
Summary of Q1 2013 – Financial results Q1 2013 incl. in EUR million Q1 2013 100 % Kista Q1 2012 Q4 2012 FY 2012 Galleria1) Net Rental Income, total 40.4 48.1 37.5 42.1 162.0 NRI Finland 24.2 24.2 22.8 25.7 98.2 NRI Sweden 9.7 17.5 9.2 10.0 39.2 NRI Baltic Countries & New 6.4 6.4 5.5 6.5 24.6 Busines
Slide 18: Outlook 2013
Outlook 2013 EPRA Operating Profit, EURm EPRA Earnings, EURm 170 €140.7 – 110 €78.9 – €155.7 €93.9 100 150 90 130 80 110 70 60 90 135,7 117,4 50 105,3 107,7 105,0 63,9 70 50,9 53,3 40 47,3 43,8 50 30 2008 2009 2010 2011 2012 2013E 2008 2009 2010 2011 2012 2013E EPRA Earnings Outlook Range EPRA Opera
Slide 19: Property portfolio, (Re)development projects & sustainability
Property portfolio, (Re)development projects & sustainability 19 Q1 2013
Slide 20: Property portfolio
Property portfolio Excluding Kista Galleria • 3,764 (3,782) leases with an average length of 3.4 (3.5) years • Total GLA 989,870 m2 • Rents linked to CPI (nearly all the agreements) Segment diversification Occupancy cost ratio Shopping centre rental income by branches as per Dec 2012 LFL Shopping ce
Slide 21: Property portfolio – Key figures
Property portfolio – Key figures TOTAL PORTFOLIO Q1/2013 Q1/2012 Q4/2012 2012 Number of leases started 167 210 195 792 during the period Total area of leases started, 35,387 43,971 40,257 141,167 sq.m. 1) Average rent of leases started 20.7 19.1 22.0 20.5 (EUR/sq.m.) 1) Number of leases ended during
Slide 22: Property portfolio – Average lease maturity
Property portfolio Average lease maturity over time • Measured in fair value, like-for-like properties Occupancy (%) 97.1 95.7 96.0 95.0 95.1 95.5 95.7 accounted for 78.8% of the total portfolio and of l-f-l 4 portfolio 65.5% is in Finland and 85.0% of the total 3,1 3,1 3,2 3,4 3,5 Average remaining
Slide 23: Valuation yield development in the portfolio
Valuation yield development in the portfolio Fair value of investment properties EUR 2,730.9 million (2,547.8) • Total fair value gains EUR 11.8 million (EUR 5.9 million) • Fair value gain in shopping centres EUR 12.8 million • Fair value loss in supermarkets and shops EUR -1.1 million Yield require
Slide 24: (Re)development projects
(Re)development projects Property Area, Citycon’s Cumulative Expected Est. of Pre- sq.m. estimated realised yield on Completion Leasing before total capex by completion rate, % and after investment, the end of when MEUR period, stabilized, MEUR % 1) IsoKristiina 19 800 54.0 1.7 7.4 60 2015 Refurbish
Slide 25: 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 26: Largest (re)development projects under planning
Largest (re)development projects under planning Citycon's Board of Directors has not yet made a decision on these (re)development project, but it is under planning. Property Project Citycon’s Target for Target Additional information area, expected net project year of 1) sq.m. investment initiation c
Slide 27: Environmental targets and results
Environmental targets and results Strategic objectives related to environmental responsibility Targets for 2012 Results of 2012 Targets for 2013 Climate Change Reduction of greenhouse gas emission by 20 per cent by year In l-f-l shopping centres: 2-3% 2-3% 2020 from the 2009 level -3.3 % Energy Redu
Slide 28: Financial figures
Financial figures 28 Q1 2013
Slide 29: NRI Growth by segments and portfolios
NRI Growth by segments and portfolios Baltic EUR million Finland Sweden Countries Other Total TURNOVER Q1/2011 21,4 7,9 3,0 0,0 32,4 52,0 Acquisitions 0,1 0,5 2,5 - 3,0 4,4 (Re)development projects 1,1 0,4 -0,3 - 1,3 1,4 Divestments -0,1 -0,3 - - -0,4 -0,8 Like-for-like properties 0,4 0,6 0,3 - 1,3
Slide 30: Snapshot of statement of comprehensive income
Snapshot of statement of comprehensive income EUR million Q1/2013 Q1/2012 Q4/2012 2012 Gross rental income 59.2 54.6 58.5 225.9 Service charge income 3.7 3.2 3.6 13.3 Turnover 62.9 57.8 62.1 239.2 Property operating expenses 22.2 19.9 20.1 75.8 Other expenses from leasing operations 0.3 0.4 -0.1 1.4
Slide 31: Snapshot of statement of financial position
Snapshot of statement of financial position Statement of Financial Position, EUR million 31 Mar 2013 31 Mar 2012 31 Dec 2012 Investment properties 2,730.9 2,547.8 2,714.2 Total non-current assets 2,895.3 2,564.7 2,737.6 Total current assets 183.6 79.7 75.5 Total assets 3,089.7 2,644.5 2,818.5 Total
Slide 32: Cash flow statement
Cash flow statement • Cash flow from operating activities increased by A EUR MILLION Q1 2013 Q1 2012 2.8M€ to 17.0M€ from 14.2M€ mainly due to Operating activities higher direct operating profit which increased due Profit before taxes 31,4 22,2 to contribution from like-for-like growth and Adjustmen
Slide 33: Financing overview
Financing overview EUR 200 million • Citycon issued 114,408,000 new shares in a rights issue in rights issue March for approximately EUR 200 million completed in • The rights issue was a strategic transaction intended to permanently reduce Citycon’s leverage and thereby give March the Company a stro
Slide 34: Financing overview – Key figures
Financing overview – Key figures • Equity ratio improved to 40.4 % (35.9 %) and will improve further when the remaining excess cash from the rights issue will be used to repay debt. • LTV improved to 51.6 % (56.5 %). • Year-to-date average interest rate increased to 4.11 % (4.09 %). Current average
Slide 35: Financing overview - Key figures
Financing overview - Key figures Maturity profile of loans and derivatives Interest-bearing debt by fixing type EUR 1,585.8 m 1) Loans (EUR 1,585.8m) Fixed derivatives (EUR 1,035.5m) Floating rate debt Undrawn loan facilities (EUR 170m) 13% Fixed rate debt 22% Convertible Bonds (EUR 39.8m) Fixed rat
Slide 36: Financing overview – Key figures
Financing overview – Key figures Maturity profile of fixed and floating rate loans and undrawn committed credit limits Average fixed rate of debt and swaps1) Fixed (EUR 351.3m) Floating (EUR 1,234.6m) Undrawn credits (EUR 170.0m) Convertible Bonds (EUR 39.8m) • Main maturities during 2013 are the EU
Slide 37: Debt portfolio
Debt portfolio Breakdown by debt type Breakdown by currency EUR 1,585.8 m 1) EUR 1,585.8 m 1) LTL 1% Bilateral term loans 25% Syndicated term loans 39% EUR 61% SEK 38% Other 7% CP 4% Revolving credit facility 10% Bonds 15% • Sufficient liquidity buffer – Citycon’s unused committed credit facilities
Slide 38: Interest rates and LTV
Interest rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) 1,600 1,575.2 70% 1,530.3 5.50% 1,487.8 1,500 1,463.5 1,445.2 1,446.2 5.00% 1,389.5 1,421.1 60% 1,386.0 1,400 1,369.6 1,343.1 4.50% 1,327.2 1,312.2 4.00% 1,300 1,272.3 1,221.1 1,234.8 50% 1,205.3 1,194.61,191.3 1
Slide 39: Share performance and volume
1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 6 000 000 7 000 000 0 2.1.2012 39 12.1.2012 24.1.2012 3.2.2012 15.2.2012 27.2.2012 8.3.2012 20.3.2012 30.3.2012 13.4.2012 25.4.2012 8.5.2012 21.5.2012 31.5.2012 12.6.2012 25.6.2012 5.7.2012 17.7.2012 27.7.2012 Citycon share volume Q1 2013 8.8.2012 Sh
Slide 40: Ownership
Ownership • Established and listed on the Helsinki Stock Exchange since 1988 Shareholders • 31 March 2013 market cap EUR 984.1 million Domestic International • Number of domestic shareholders increased: total 8,496 (5,741) registered shareholders, 24,8 % 24.8% (18.8%) of total 75,2 % • Largest Share
Slide 41: Back up information
Back up information 41 Q1 2013
Slide 42: 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 43: Kista Galleria case study— flagship in Sweden
1 Kista Galleria case study— flagship in Sweden Kista Galleria One of the largest shopping centres in Stockholm1 • GLA: 92,000 sq.m of leasable area, 60,000 sq.m retail • Parking facility with 2,500 parking spaces • Fair value EUR 530 m, net rental yield 5.6% 1), occupancy 96.5% • Visitors (2012): 1
Slide 44: Iso Omena case study—flagship in Finland
2 Iso Omena case study—flagship in Finland One of the largest shopping centres in Helsinki Metropolitan Area • GLA: 63,000 sq.m of leasable area, 50,900 sq.m retail, • Fair value EUR 373.8 m, net rental yield 5.3% occupancy: 99.8% • Visitors (2012): 8.8 m • Sales (2012): EUR 260.4 m Major extension
Slide 45: Rocca al Mare case study—flagship in Estonia
3 Rocca al Mare case study—flagship in Estonia The largest shopping centre in Tallinn and all of Estonia • GLA: 53,300 sq.m of leasable area, 51,800 sq.m retail, occupancy 100% • Fair value EUR 151.5 m, net rental yield 8.2%, occupancy: 100% • Visitors (2012): 6.4 m • Sales (2012): EUR 136.6 m Poten
Slide 46: Koskikeskus case study – meeting point of Tampere
4 Koskikeskus case study – meeting point of Tampere in the heart of the city Koskikeskus Located in the very heart of Tampere • GLA: 34,300 sq.m of leasable area, 28,800 sq.m retail • Parking facility with 425 parking spaces • Fair value EUR 175.9 m, net rental yield 5.5%, occupancy: 89.8% • Visitor
Slide 47: Liljeholmstorget Galleria case study – acceleration of performance
5 Liljeholmstorget Galleria case study – acceleration of performance Liljeholmstorget Located in the lively and dynamic Liljeholmen • GLA: 40,900 sq.m of leasable area, 27,700 sq.m retail • Parking facility with 900 parking spaces • Fair value EUR 260.2 m, net rental yield 4.2% , occupancy: 97.9% •
Slide 48: Lease expiry profile
Lease expiry profile 25% 20% 15% 10% 5% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 +2023 Shopping centres % Other retail properties % Average remaining length: 3.4 yrs 48 Q1 2013
Slide 49: Financial Expenses Analysis
Financial Expenses Analysis Q1 Q4 Q3 Q2 Q1 Change- Change- YTD YTD Change- Net Financial Expenses (EUR million) 2013 2012 2012 2012 2012 % (y-o-y) % (q-o-q) 2013 2012 % (YTD) Financial Expenses: A A Interest expenses -16,8 -16,0 -16,2 -15,6 -15,4 9% 5% -16,8 -15,4 9% Foreign exchange gains(+)/ losse
Slide 50: Net Financial Expenses Q4 2012 vs Q1 2013
Net Financial Expenses Q4 2012 vs Q1 2013 EUR million • Net Interest expenses decreased by 0.5 M€ from the previous quarter due to increased interest income relating to the shareholder loan into the Kista joint venture, which is consolidated using the equity method. • Other expenses in Q1 decreased
Slide 51: Illustrative Calculation of ICR Covenant Using Q1 2013 Financials
Illustrative Calculation of ICR Covenant Using Q1 2013 Financials* Q1 2013 EBITDA for covenant EBITDA = EUR 140.1 + EUR 1.2 + calculation: direct operating profit EUR 0.8 + depreciations +/- non-cash and = EUR 142.1 million for rolling 12- exceptional items month period EUR million Q1 Q4 Q3 Q2 Cumul
Slide 52: Illustrative Calculation of Equity Ratio Covenant Using Q1 2013 Financials
Illustrative Calculation of Equity Ratio Covenant Using Q1 2013 Financials* Equity for covenant calculation: Equity = EUR 1,246.3 + EUR 39.4 – total shareholders’ equity + EUR 46.3 + EUR 49.7 subordinated debt – non- = EUR 1,289.1 million as at 31 controlling interest +/– fair value of March 2013 de
Slide 53: Citycon's Major Shopping Centres
Citycon’s Major Shopping Centres Iso Omena Myyrmanni Trio (incl. Hansa) 1977/87/2008 Lippulaiva Built 2001 1994/2007/2010 45.700 m2 1993 GLA 60.500 m2 45.700 m2 89.3 % 18.500 m2 Ownership 60 % 100 % 100 % Finland Koskikeskus Forum Columbus 1988 1953/91/2010 1997/07 27.700 m2 22,000 m2 21.000 m2 100
Slide 54: Contact Information
Contact Information INVESTOR RELATIONS Mr Marcel Kokkeel CEO Tel. +358 207 664 521 Marcel.Kokkeel@citycon.fi Mr Eero Sihvonen CFO, Executive Vice President Tel. +358 50 5579 137 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola Vice President, IR and Communications Tel. +358 40 5666 070 Hanna.Jaakkola@city