Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q1 2020 Earnings Presentation
25 slides from Citycon Oyj's earnings presentation, 2020
Slide 1: Audiocast Presentation Q1/2020
AUDIOCAST PRESENTATION Q1/2020
Slide 2: Summary of Q1/2020: Solid Financial Results
SUMMARY OF Q1/2020: SOLID FINANCIAL RESULTS Q1 FINANCIAL RESULT STABLE ‒ Q1 net rental income was EUR 52.4 million. Using comparable exchange rates like-for-like NRI increased by +0.7%. ‒ Weak NOK and SEK exchange rates and property valuations burdened the result ‒ Occupancy rate was still on good l
Slide 3: COVID-19: Citycon's Strategy Provides Stability
COVID-19: CITYCON’S STRATEGY PROVIDES STABILITY GUIDANCE FOR 2020 WAS WITHDRAWN IN MARCH DUE TO ECONOMIC UNCERTAINTY CAUSED BY COVID-19 STRATEGY BASED ON GROCERY-ANCHORED MIXED-USE SHOPPING CENTRES BRINGS STABILITY ‒ Citycon’s strategy is focused on grocery-anchored mixed-use centres: ‒ Over 30% of
Slide 4: COVID-19: Nordic Countries Well-Positioned to Come Through Crisis
COVID-19: NORDIC COUNTRIES WELL- POSITIONED TO COME THROUGH CRISIS NORDIC COUNTRIES WELL-POSITIONED TO COME THROUGH CRISIS ‒ In the Nordics, governments are proactively engaged with preserving the economic viability of businesses ‒ Government support improves both Citycon’s tenants’ ability to pay r
Slide 5: Like-for-like Net Rental Income Increased - COVID-19 Impacted Footfall and Tenant Sales
LIKE-FOR-LIKE NET RENTAL INCOME INCREASED - COVID-19 IMPACTED ON FOOTFALL AND TENANT SALES NET RENTAL INCOME DEVELOPMENT TENANT SALES DEVELOPMENT FOOTFALL DEVELOPMENT Q1/2020 vs. Q1/2019, % Q1/2020 vs. Q1/2019, % 1) Q1/2020 vs. Q1/2019, % 1) 0.7% 1.2% -3.2% -2.3% -6.2% -8.7% Like-for-like footfall L
Slide 6: Occupancy Rate Remained at Good Level
OCCUPANCY RATE REMAINED AT GOOD LEVEL Q1/2020 2019 Average rent1) EUR/sq.m. 22.8 23.3 96.0% 96.4% 95.9% 95.6% 95.3% 95.5% 94.5% Average remaining length of years 3.1 3.2 the lease portfolio Q1/2020 2019 Average rent of leases started EUR/sq.m. 18.5 26.0 Average rent of leases ended EUR/sq.m. 22.0 25
Slide 7: Our Focus on Grocery-Anchored, Multifunctional Shopping Centres Gives Stability
OUR FOCUS ON GROCERY-ANCHORED, MULTIFUNCTIONAL SHOPPING CENTRES GIVES STABILITY TO OUR BUSINESS RENTAL INCOME BY CATEGORY OVER 30 % OF GROSS RENTAL INCOME IS FROM (2019) ”NECESSITY TENANTS” Groceries 17% ▪ Focus on the daily needs of customers Health care and ▪ 3 out of the top 5 tenants are grocery
Slide 8: Our Occupancy Cost Ratio Provides Room for Further Growth Compared to Peers
OUR OCCUPANCY COST RATIO PROVIDES ROOM FOR FURTHER GROWTH COMPARED TO PEERS OCCUPANCY COST RATIO VS PEERS (2019) Citycon 9.4% Peer 1 10.4% Peer 2 11.6% Peer 3 12.4% Peer group 14.4% average Peer 4 15.5% Peer 5 22.2% Peer group: Hammersson, Klepierre, Mercialys, Unibail-Rodamco-Westfield, Wereldhave
Slide 9: Financial Overview
FINANCIAL OVERVIEW
Slide 10: Q1/2020 Financials
Q1/2020 FINANCIALS Q1/2020 MEUR Q1/2020 Q1/2019 Change % INCL. KISTA 50% Gross rental income 57.9 59.4 -2.6 % 60.8 Net rental income 52.4 53.6 -2.3 % 54.6 Direct operating profit 46.2 47.7 -3.1 % 48.2 EPRA Earnings 34.8 35.8 -2.8 % N/A Adjusted EPRA Earnings 30.8 35.8 -14.0 % N/A EPRA EPS (basic) 0.
Slide 11: Weaker NOK and SEK Exchange Rates Affected the Results
WEAKER NOK AND SEK EXCHANGE RATES AFFECTED THE RESULTS 0.104 0.100 0.096 0.092 NOK 0.088 SEK 0.084 0.080 0.076 0.072 1.10.2019 1.11.2019 1.12.2019 1.1.2020 1.2.2020 1.3.2020 1.4.2020 11
Slide 12: Net Rental Income Remained Stable
NET RENTAL INCOME REMAINED STABLE NRI DEVELOPMENT MEUR 1.7 -0.2 53.6 0.3 -1.8 -1.2 52.4 Q1/2019 Acquisitions (Re)development Divestments LFL properties Other (incl. IFRS 16 and Q1/2020 projects exchange rate differences CURRENCIES HAD AN IMPACT ON NRI Closing rates Average rates Foreign currency imp
Slide 13: Fair Value Changes
FAIR VALUE CHANGES FAIR VALUE CHANGES, MEUR Q1/2020 Q1/2019 2019 Finland & Estonia -12.7 -9.4 -56.1 Norway* 10.2 -9.1 -33.4 Sweden & Denmark -9.3 0.9 -32.4 Investment properties, total -11.8 -17.6 -121.9 Kista Galleria (50%) -11.2 -1.0 -17.7 Investment properties and -23.1 -18.7 -139.6 Kista Galleri
Slide 14: EPRA Net Asset Value Was Impacted by Weak NOK and SEK
EPRA NET ASSET VALUE WAS IMPACTED BY WEAK NOK AND SEK 12.28 0.20 -0.12 11.36 -0.78 -0.16 -0.02 -0.03 Q4/2019 EPRA Earnings Indirect result Translation reserve Dividends and equity Hybrid bond interests Other Q1/2020 return paid and expenses 31 MAR 2020 31 MAR 2019 31 DEC 2019 EPRA NAV per share, EUR
Slide 15: Main Financing Targets
MAIN FINANCING TARGETS – Debt portfolio's hedge ratio 70-90% ✓ 75.8% – Investment-grade credit ratings ✓ BBB-/Baa3 – Financing mainly unsecured ✓ 90.4% – Substantial liquidity buffer ✓ MEUR 517 – Loan to Value 40-45% - 45.7% – Average maturity of loan portfolio > 5 yrs - 4.0 Stable business model ma
Slide 16: Reduced Cost of Debt
REDUCED COST OF DEBT FINANCING KEY FIGURES LTV DEVELOPMENT 31 MAR 2020 31 MAR 2019 31 DEC 2019 Interest bearing debt, fair value MEUR 2,034.4 2,169.9 1,830.7 48.7 45.7 Available liquidity MEUR 516.8 561.0 562.1 42.4 Average loan maturity years 4,0 4.8 4.6 Interest rate hedging ratio % 75.8 91.7 88.8
Slide 17: Outlook 2020
OUTLOOK 2020 On 26 March 2020, Citycon assessed that its prospects for 2020 have weakened and the company withdrew its guidance 2020 issued on 6 February 2020. At this point, Citycon does not specify its direct operating profit, EPRA EPS or adjusted EPRA EPS forecast for this year due to significant
Slide 18: Looking Forward 2020
LOOKING FORWARD 2020
Slide 19: Our Development Project in Lippulaiva Is Progressing as Planned Despite COVID-19
OUR DEVELOPMENT PROJECT IN LIPPULAIVA IS PROGRESSING AS PLANNED DESPITE COVID-19 – Lippulaiva will be the new heart of the growing area of Espoonlahti in greater Status update Helsinki supporting our strategy Q1/2020: Construction – We are pleased that work is despite the situation with COVID-19 the
Slide 20: Working Together with Tenants and Other Stakeholders to Overcome the Crisis
WORKING TOGETHER WITH TENANTS AND OTHER STAKEHOLDERS TO OVERCOME THE CRISIS – Citycon has taken an active role in supporting its tenancies and local communities around our shopping centres. – A few examples of the actions taken during COVID-19 outbreak: – Delivery of food and medicines to risk group
Slide 21: Thank You.
citycon.com CONTACT INFORMATION Eero Sihvonen THANK YOU. CFO, Exec. VP Tel. +358 50 557 9137 Laura Jauhiainen IR Director Tel. +358 40 823 9497
Slide 22: Appendix
APPENDIX
Slide 23: Income Statement
INCOME STATEMENT MEUR Q1/2020 Q1/2019 % 2019 Gross rental income 57.9 59.4 -2.6 % 232.1 Service charge income 18.1 19.3 -5.9 % 77.1 Property operating expenses -22.6 -24.7 -8.4 % -89.3 Other expenses from leasing operations -1.0 -0.4 - -2.5 Net rental income 52.4 53.6 -2.3 % 217.4 Administrative exp
Slide 24: Balance Sheet
BALANCE SHEET MEUR 31 MAR 2020 31 MAR 2019 31 DEC 2019 Investment properties 4,081.5 4,213.5 4,160.2 Total non-current assets 4,398.2 4,580.3 4,508.1 Investment properties held for sale - 77.6 - Total current assets 196.8 66.1 74.2 Total assets 4,595.0 4,724.0 4,582.3 Total shareholders’ equity 2,16
Slide 25: Balanced Maturity Profile
BALANCED MATURITY PROFILE DEBT BREAKDOWN BY TYPE DEBT MATURITIES Bank loans 17% CP 7% 2,034.4 Bonds EUR million 77% DEBT BREAKDOWN BY CURRENCY SEK 17% EUR 62% NOK 2,034.4 EUR million Part of EUR debt has 21% been converted to SEK and NOK using cross- currency swaps 25