Slide 1: Citycon Q2 2007 presentation
Citycon Q2 2007 presentation
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 Financial Targets Property Portfolio Latest Acquisitions Development Projects Key Figures Key figures Mandarinas Mandarinas Property Portfolio Lithuania Lithuania and and Duo Duo Profitability Finland Finland Financing and Deb
Slide 4: Highlights Q2/2007
Highlights Q2/2007 • Citycon Q2 2007 Presentation 4
Slide 5: Highlights – Latest highlights
Highlights – Latest highlights Q2 The market value of property portfolio EUR 1,799.2 Citycon’s Citycon’s million (Q1/2007: EUR 1,546.9 million) Shopping Shopping Centres Centres EPS (excl. fair value gains) EUR 0.04 July July 2007 2007 Two significant property investments announced Two major
Slide 6: Highlights – Geographic Overview
Highlights – Geographic Overview Geographical Overview Finland – 72.9 % of total net rental income in Q2/2007 Sweden (€m) Finland (€m) – Net rental income growth of 4.8%, to EUR 35.7 m 1,1187.4 – Net rental income for like-for-like properties rose 521.9 48.6 47.0 by 8.8%. 35.7 17.8 16.3 10.4 – One
Slide 7: Highlights – Acquisition Track Record
Highlights – Acquisition Track Record 1) EUR million 120 104,5 100 80,1 80 62,1 61,9 60,8 60 53,3 47,4 41,9 37,0 40 27,6 25,4 18,7 17,0 14,6 16,5 20 0 Jul 2005 Jul 2005 Sep 2005 Dec 2005 Jan 2006 Feb 2006 May 2006 Jul 2006 Aug 2006 Sep 2006 Sep 2006 Jan Feb 2007 May 2007 July Mandarinas Jakobsberg 2
Slide 8: 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 9: Highlights – Favorable Business Environment
Highlights – Favorable Business Environment Strong Growth in Gross Domestic Product Positive Outlook for Private Consumption 11,4% 10,5% 15,8% 8,9% 13,0% 12,6% 8,0% 7,6%7,5% 7,4% 7,1% 9,9% 10,0% 9,0% 5,3% 7,9% 8,0% 4,2% 3,6% 3,2% 3,3% 2,9% 2,9% 2,8% 3,8%3,6% 3,8% 2,5% 2,8% 2,8% 2,8% 2,4% Finland Swe
Slide 10: Highlights – Favorable Business Environment
Highlights – Favorable Business Environment Consumer Confidence at High Levels Finland Sweden Estonia Lithuania 20,0 15,0 25,0 15,0 18,0 10,0 10,0 20,0 5,0 16,0 5,0 15,0 0,0 14,0 0,0 -5,0 10,0 12,0 -5,0 -10,0 5,0 10,0 -10,0 -15,0 8,0 -20,0 0,0 -15,0 01/04 01/05 01/06 01/07 06/07 01/04 01/05 01/06 01
Slide 11: Highlights – Financial Targets
Highlights – Financial Targets ► Continued expansion through acquisitions ► Cumulative CAPEX since 2005 in and property development excess of EUR 700 million Growth track ► Solid dividend policy despite growing ► For 2006 Citycon’s per-share number of shares outstanding dividend was 0,14 Eur Dividen
Slide 12: Property Portfolio
Property Portfolio • Citycon Q2 2007 Presentation 12
Slide 13: Property Portfolio – Latest Acquisitions
Property Portfolio – Latest Acquisitions In June Citycon acquired 75% of the leading Umeå shopping centre Strömpilen in Umeå and a retail property Länken for appr. EUR 53.3 million Strömpilen’s GLA is 25,000 m2 (22,300 m2 retail) and the acquisition involves 5,000 sq.m. of existing building righ
Slide 14: Property Portfolio – Latest Acquisitions
Property Portfolio – Latest Acquisitions Strömpilen Strömpilen Key Figures - Strömpilen Total GLA approx. 25 000 m2 Occupancy rate ~100 % Sales, 2006 (incl. VAT) 600 SEK Number of visitors (2006) 2 million Major Tenants ICA Maxi Systembolaget Lindex, H&M Elgiganten Länken Länken • Citycon Q2 2007 Pr
Slide 15: Property Portfolio – Latest Acquisitions
Property Portfolio – Latest Acquisitions Key Figures In July Citycon acquired the shopping centre Opening 2000 Magistral for approximately EUR 16.5 million and 8,500 m2 of building right for EUR 2 million Number of buildings 1 Total GLA approx. 9,450 m2 Shopping centre is located in the Mustamäe
Slide 16: Property Portfolio - Development Projects
Property Portfolio - Development Projects Shopping Centre Duo - Example of Citycon’s Successful Development Strategy An extension to the shopping centre Duo located in Finland's largest suburb, Hervanta in Tampere, was completed in April The leasable area of the shopping centre is 15,500 square
Slide 17: Property Portfolio - Development Projects
Property Portfolio - Development Projects On-going development projects, 30 June 2007 Market value, Area, Post- Total estimated Actual capital Targeted Additional Information EUR million sq.m. 1) development investment, by the end of year of (31 Dec 2006) area, sq.m. EUR million 2) the period, compl
Slide 18: Property Portfolio - Development Projects
Property Portfolio - Development Projects Completed or partly completed development projects Area, Post- Total Actual Additional Inform ation sq.m . 1) developm en investm ent, capital by 30 t area, sq.m . est. EUR June 2007, m illion 2) EUR m illion Property Location Country Duo Tampere FIN 5 000 1
Slide 19: 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 20: 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 21: Key Figures
Key Figures • Citycon Q2 2007 Presentation 21
Slide 22: Property Portfolio – Key Figures
Property Portfolio – Key Figures 3,415 (2,373) leases with an average length Breakdown of property portfolio of 2.9 years Net rental income increased by 25.6% to 5.0 % EUR 49.0 million 29.0 % GLA totalled grew by 25.3% to 824,300 m2 66.0 % Net rental income for like-for-like properties grew
Slide 23: Property Portfolio – Finland
Property Portfolio – Finland Q1-Q2 Q1-Q2 Finland Q2/2007 Q2/2006 2007 2006 2006 Turnover, EUR million 24.7 23.7 48.6 47.1 95.8 Net fair value gains on investment property, EUR million 120.3 56.2 134.3 71.1 104.8 Operating profit, EUR million 137.1 72.5 167.3 103.2 176.1 Gross rental income, EUR mill
Slide 24: Property Portfolio – Sweden
Property Portfolio – Sweden Q1-Q2 Q1-Q2 Sweden Q2/2007 Q2/2006 2007 2006 2006 Turnover, EUR million 9.3 2.7 17.8 5.3 17.3 Net fair value gains on investment property, EUR million 35.5 1.2 50.6 1.1 8.7 Operating profit, EUR million 40.6 2.4 59.4 3.4 16.8 Gross rental income, EUR million 8.4 2.5 16.3
Slide 25: Property Portfolio – The Baltic Countries
Property Portfolio – The Baltic Countries Q1-Q2 Q1-Q2 The Baltic Countries Q2/2007 Q2/2006 2007 2006 2006 Turnover, EUR million 1.9 1.4 3.7 2.7 6.2 Net fair value gains on investment property, EUR million 4.3 2.4 6.7 3.1 6.6 Operating profit, EUR million 5.6 3.4 9.1 5.0 10.9 Gross rental income, EUR
Slide 26: Key figures - Snapshot
Key figures - Snapshot Income Statement and Balance Sheet Income Statement , EUR million Q2/2007 Q1-Q2/2007 Q2/2006 2006 Turnover 35.9 70.2 27.8 119.4 Net fair value gains on investment property 160.1 191.6 59.8 120.1 Net rental income 25.8 49.0 19.6 82.8 Operating profit 181.6 231.9 76.8 196.5 Prof
Slide 27: Key Figures – Consolidated Cash Flow
Key Figures – Consolidated Cash Flow EUR MILLION Jan-Jun 2007 Jan-Jun 2006 Cash flow from operating activities Cash from operations improved as a Profit before taxes 212,5 95,8 result of higher earnings and lower cash Adjustments -171,5 -62,2 financing costs despite negative working Change in worki
Slide 28: Key Figures - Net Rental Income
Key Figures - Net Rental Income 0.5 50 1.6 1.2 9.4 2.7 40 49.0 30 39.0 20 10 0 006 ons es) rtie s erti es dm in /20 0 7 1-2 /2 isit i erti pe ro p r /a 1-2 Q cq u ro p pro p Oth e al Q u al A re p ent i ke u Act on - co p m or-L Act (n elo e - f Value en t s Dev Li k m est Change Div • Citycon Q2 20
Slide 29: Key figures - Profitability
Key figures - Profitability Q1-Q2 Q1-Q2 Key Figures 2007 2006 2 006 180 2 000 Equity ratio, % 46.9 42.3 39.1 160 1 800 Gearing, % 96.2 122.9 136.6 140 1 600 Earnings per share (basic), EUR 0.90 0.47 0.78 120 100 1 400 Earnings per share (diluted),EUR (EPRA EPS) 0.80 0.47 0.74 80 1 200 Earnings per s
Slide 30: Key Figures – NAV and EPS Evolution
Key Figures – NAV and EPS Evolution NAV versus Share EPS and Equity Ratio 6 0,80 50 5,5 5 0,70 45 4,5 0,60 40 4 35 0,50 3,5 30 0,40 € % 3 25 2,5 0,30 20 2 0,20 15 1,5 0,10 1 10 0,5 0,00 5 2006/Q1 2006/Q2 2006/Q3 2006/Q4 2007/Q1 2007/Q2 0 -0,10 0 2006/Q1 2006/Q2 2006/Q3 2006/Q4 2007/Q1 2007/Q2 EPS, €
Slide 31: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of loans and derivatives Interest-bearing debt by fixing type 2007 - 2016 EUR 903.5 million 1) 500 EUR 903.5m 436 Floating rate debt Fixed rate debt 450 EUR 489.1m 25% 21% 400 EUR 50.0m 350 300 250 222 200 158 150 93 86 100 83 Fixed rate swaps 50 50
Slide 32: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 903.5 million 1) EUR 903.5 million 1) Other LTL 2% EEK 3% 13% CP’s 6% EUR Revolving credit facility Syndicated term loans SEK 62% 15% 47% 33% Bonds 20% The backbone of the debt financing continues to be the syndicated te
Slide 33: Key Figures – Net Financial Expenses
Key Figures – Net Financial Expenses 2q 1q 2q 1q Change-% Change-% Net Financial Expenses (EUR million) 2007 2007 2006 2006 (y-o-y) (q-o-q) Financial Expenses: Interest expenses -9,7 -9,6 -6,9 -6,8 41 % 2% Foreign exchange losses 0,0 -0,1 1,1 -0,1 -98 % -122 % Capitalised fees -0,1 -0,2 -0,2 -0,1 -4
Slide 34: Key Figures – Share Performance
Key Figures – Share Performance 7 6 5 4 3 2 1 0 01-04 04-04 07-04 10-04 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 Q2 2007 Presentation 34
Slide 35: Key Figures - Share Data
Key Figures - Share Data Starting from 1 July the company is included at OMX Large Cap List Breakdown of shareholders 5.0 % 19 July Market capitalisation totalled EUR 935.56 million 95.0 % 95.0% of shareholders are international 1 831 shareholders Gazit –Globe owned approximately 38.9% and
Slide 36: Backup Information
Backup Information • Citycon Q2 2007 Presentation 36
Slide 37: 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 38: Business Environment – GDP Growth
Business Environment – GDP Growth Economic growth in Citycon’s core markets has been very strong and is above the European average and promises to stay at healthy levels in the foreseeable future Growth in Gross Domestic Product 8,9% 9,1% 8,0% 7,5% 7,6% 7,5% 7,4% 6,8% 5,3% 4,2% 3,6% 3,2% 3,3% 2,9% 2
Slide 39: Business Environment – Private Consumption
Business Environment – Private Consumption Growth in private consumption has been strong and consumption is forecast to continue this trend in 2007 and 2008 Private Consumption Growth 15,8% 13,0% 12,6% 9,9% 10,0% 9,0% 7,9% 8,0% 3,8% 3,6% 3,8% 2,5% 2,8% 2,8% 2,8% 2,4% Finland Sweden Estonia Lithuania
Slide 40: Business Environment – Consumer Confidence
Business Environment – Consumer Confidence Consumer confidence at or close to record levels in all of Citycon’s markets provides a strong fundamental outlook for Citycon’s customer base Consumer Confidence Finland Sweden Estonia Lithuania 20,0 15,0 25,0 15,0 18,0 10,0 10,0 20,0 5,0 16,0 5,0 15,0 0,0
Slide 41: 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 42: 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 43: Citycon in Brief
Citycon in Brief • Citycon Q2 2007 Presentation 43
Slide 44: 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 Q2 2007 Presentation 44
Slide 45: Major Acquisitions 2006 & 2007
Major Acquisitions 2006 & 2007 Debt free purchase price Initial yield with transaction expenses 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 7 600 7.3% 3 January 100 M
Slide 46: Citycon Properties
Citycon Properties Tumba Tumba Centrum Centrum Sweden Sweden Trio Trio Finland Finland Liljeholmen Liljeholmen Sweden Sweden Myyrmanni Myyrmanni Finland Finland • Citycon Q2 2007 Presentation 46
Slide 47: Citycon Properties – Core Shopping Centres
Citycon Properties – Core Shopping Centres Lippulaiva Myyrmanni Trio Columbus Built 1993 1994 1977/87 1997/07 GLA 23.000 m2 40.200 m2 32.200 m2 20.400 m2 Owned 100 % 100 % 89.3 % 100 % Finland Koskikeskus Forum Isokarhu 1988 1953/91 1972/04 25.700 m2 17.400 m2 14.900 m2 88 % Citycon 69 % 100 % Jakob
Slide 48: Contact Information
Contact Information Investor Relations Mr Petri Olkinuora CEO Tel. +358 9 6803 6738 Fax +358 9 6803 6788 Petri.Olkinuora@citycon.fi Tullintori Tullintori Finland Finland Mr Eero Sihvonen CFO Tel. +358 50 5579 137 Fax +358 9 6803 6788 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola Investor Relations Offi