Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q1 2010 Earnings Presentation
50 slides from Citycon Oyj's earnings presentation, 2010
Slide 1: Citycon Presentation Q1 2010
Citycon Presentation Q1 2010
Slide 2: Contents
Contents Strategy Main points and financial overview Business environment Sustainability (Re)development projects Property portfolio Key figures Financing overview Backup information 2 Q1 2010
Slide 3: Strategy
Strategy Citycon • wants to be the leading shopping centre owner, operator and developer in the Nordic and Baltic countries. • invests in shopping centres and retail properties in major growing cities with good demographics. • seeks growth through matching acquisitions and property development. • ad
Slide 4: Financial targets
Financial targets Continued expansion through property development and selective acquisitions Cumulative CAPEX since 2005 in excess of EUR 1.5 billion Main emphasis on organic growth GROWTH Solid distribution policy DIVIDENDS Payout target 50 % of the result for the period after taxes excl. fair
Slide 5: Geographical overview
Geographical overview FINLAND • 69.5% of total net rental income • Net rental income EUR 21.3 million Sweden (€m) Finland (€m) • Market leader with 22% market share 1,446.6 • 22 shopping centres, 43 other retail 583.8 properties, one unbuilt lot 32.5 31.4 21.3 12.6 12.2 6.4 MV Turn- Gross Net MV Tur
Slide 6: Main points
Main points Q1 2010 (vs. Q4 2009) • The fair value change was EUR 0.8 million (EUR -38.6 m) and the market value of property portfolio was EUR 2,193.5 million (EUR 2,147.4 m) • The valuation yield 6.6% (6.6%) by external appraiser • Net rental income was EUR 30.6 million (EUR 31.6m) • Direct result
Slide 7: Financing overview
Financing overview • Total asset stood at EUR 2,295.4 million • Total liquidity of EUR 212.7 million incl. unutilized committed debt facilities (EUR 164.0 m) and cash (EUR 48.7 m) • Equity ratio 32.7%, hedging ratio of the loan portfolio 82% • Average year-to-date interest rate 3.97% (4.46%). Period
Slide 8: Business environment
Business environment 8 Q1 2010
Slide 9: Business environment
Business environment GDP PRIVATE CONSUMPTION Source: Nordea 9 Q1 2010
Slide 10: Business environment: consumer confidence
Business environment CONSUMER CONFIDENCE 30,0 20,0 10,0 0,0 1.1.2008 1.4.2008 1.7.2008 1.10.2008 1.1.2009 1.4.2009 1.7.2009 1.10.2009 1.1.2010 Finland -10,0 Sweden Estonia -20,0 Lithuania euro zone -30,0 -40,0 -50,0 -60,0 Source: Eurostat Consumer confidence indicator is conducted as an interview su
Slide 11: Business environment: retail and grocery sales
Business environment RETAIL AND GROCERY SALES, FEB 10 Occupancy rates in shopping centres AND CPI, MARCH 10 continue to be high both in Finland and in Sweden. (Jones Lang LaSalle, Nordic City Report, Autumn 2009) 10 5 3,3 1,9 2,3 1,2 0,1 0,1 The property market has shown signs 0 % Finland Sweden Est
Slide 12: Sustainability
A Sustainability 12 gta CiTtycon
Slide 13: Strategical goals for environmental impact areas
Strategical goals for environmental impact areas Climate change Reduction of greenhouse gas emissions by 20% by year 2020 from the 2009 baseline level (the EU objective is to reduce emissions by 20% by 2020 from the 1990 level). Energy Reduction of energy consumption (electricity and heat) by 9% by
Slide 14: Key Results 2009
Key Results 2009 Emissions • 31,801 tnCO2e equals: • 13.5 million litres petrol or • 0.04 % of Finland’s total emissions (2007) or 0.05 of Sweden’s total emissions (2007) • To offset the emissions, one needs to plant 103,000 trees in the habitat of Northern Europe, this correlates area of 88 soccer
Slide 15: Key Results: Land use and sustainable project development
Key Results Land use and Sustainable project development • Liljeholmstorget was awarded as the first European shopping centre the Platinum-level LEED® environmental certificate • Rocca al Mare was awarded silver-level LEED®certificate first in the Baltic Countries in January 2010 • The first ever LE
Slide 16: Internal Green Shopping Centre Management Program
Internal Green Shopping Centre Management Program Annual internal green shopping centre audit currently ongoing regarding each and Tool for Shopping Centre Management every Citycon shopping centre! • Energy • Green • Water thinking in • Waste action Internal • Refrigerants • Recognition benchmark •
Slide 17: (Re)development projects
(Re)development projects 17 Q1 2010
Slide 18: Ongoing (re)development projects
Ongoing (re)development projects PROPERTY LOCATION AREA, sq.m. TOTAL ACTUAL EST. FINAL Before and ESTIMATED CUMULATIVE YEAR OF after INVESTMEN CAPEX, by COMPLETION T NEED, the end of MEUR period, MEUR Åkersberga Österåker, 20 000 48.1 1) 20.6 2011 Refurbishment and extension of the shopping centre i
Slide 19: Property portfolio
Property portfolio 19 Q1 2010
Slide 20: Property portfolio
Property portfolio • 4,029 (4,080) leases with an average length of 3.1 (3.1) years • GLA totalled 953,650 m2 • Net rental income increased by 1.0% to EUR 30.6 million • Net rental income for like-for-like properties decreased by 5.8% due to higher property operating expenses reflecting seasonal flu
Slide 21: L-F-L and other NRI development by Segments
L-F-L and other NRI development by Segments - Q1/2009 vs. Q1/2010 the Baltic EUR million Finland Sweden Countries Other Total Q1/2008 22,3 5,8 1,6 0,0 29,7 Acquisitions 0,4 0,1 0,0 - 0,4 (Re)developments 0,4 0,0 0,6 - 1,0 Divestments -0,1 - - - -0,1 Like-for-like 0,1 0,2 -0,1 - 0,2 Other (incl. exch
Slide 22: Property portfolio: rental contracts
Property portfolio RENTAL CONTRACTS ILLUSTRATION OF A TYPICAL LEASE AGREEMENT • Major tenants largest grocery retailer in Nordics also fashion tenants and local discount department stores are important. • Largest tenant Finnish retailer Kesko with 23.2% of GRI end of 2009 • Five largest totaled 35.6
Slide 23: Valuation yield development in the portfolio
Valuation yield development in the portfolio % 8,5 8 7,5 7 Finland Finland excl. Iso Omena Sweden 6,5 Baltic Countries Total 6 5,5 5 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 Valuation yield above is based on external valuator’s p
Slide 24: Property portfolio: leases started and ended
Property portfolio TOTAL PORTFOLIO Q1/2010 Q1/2009 Q4/2009 2009 Number of leases started 185 128 386 873 during the period Total area of leases started, 42 997 16 066 69 262 141 628 sq.m. 1) Average rent of leases started 18.2 19.3 26.5 23.6 (EUR/sq.m.) 1) Number of leases ended during 392 195 184 7
Slide 25: Shopping centre rental income by branches
Shopping centre rental income by branches based on valid rent roll at 31 Dec. 2009 2% 7% 23 % Clothes and Fashion 8% Groceries Leisure, Home Supplies 9% Department Stores Services and Offices Cafes & Restaurants 10 % 22 % Health & Beauty Other Specialty Stores 19 % 25 Q1 2010
Slide 26: 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. 26 Q1 2010
Slide 27: Key figures
Key figures 27 Q1 2010
Slide 28: Snapshot of statement of comprehensive income
Snapshot of statement of comprehensive income EUR million Q1/2010 Q1/2009 2009 Gross rental income 47.2 44.3 177.8 Service charge income 2.3 1.6 8.5 Turnover 49.5 45.9 186.3 Property operating expenses 18.8 15.3 60.2 Other expenses from leasing operations 0.1 0.2 0.7 Net rental income 30.6 30.3 125.
Slide 29: Key Figures – Profitability
Key Figures – Profitability Rolling 12-month Direct Result (EUR million) Rolling 12-month Direct Result per Share (EUR/ share) 23,0 22,9 22,7 50,9 50,7 50,2 21,5 21,2 46,6 47,3 20,7 20,3 20,5 45,0 20,0 44,2 43,8 19,4 41,9 38,3 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q4 07 Q1 08 Q
Slide 30: Key Figures – Profitability
Key Figures – Profitability Quarterly Net Rental Income by segments Quarterly Operating Profit1) by segments 40,0 40,0 Fi nl a nd Sweden CAGR +12.1 % Fi nl a nd Sweden CAGR +12.4% 35,0 Ba l ti cs Other 35,0 Ba l ti cs Other 32,5 31,0 28,6 30,5 31,5 30,2 30,3 31,6 30,6 27,6 27,1 26,2 26,2 29,7 30,0 2
Slide 31: Snapshot of statement of financial position
Snapshot of statement of financial position Statement of Financial Position, EUR million 31 March 2010 31 March 2009 31 Dec 2009 Investment property 2,193.5 2,097.3 2,147.4 Total non-current assets 2,206.2 2,108.6 2,161.4 Current assets 89.3 39.2 91.8 Assets total 2,295.4 2,147.8 2,253.2 Total share
Slide 32: Consolidated Cash Flow Statement Q1 2010
Consolidated Cash Flow Statement Q1 2010 EUR MILLION Q1-10 Q1-09 • Cash from operations dropped clearly mainly due to Operating activities exceptional items both in 2010 and 2009: Profit before taxes 17,2 -18,1 • Cash flow before working capital improved by Adjustments 9,2 44,0 approximately 2 per c
Slide 33: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of loans and derivatives Interest-bearing debt by fixing type EUR 1, 375.9 million 1) 600 Loans (EUR 1,375.9m) 500 483 Fixed derivatives (EUR 789.2m) Floating rate debt 18% Fixed rate debt 400 Convertible Bonds 24% (EUR 76.5m) 305 300 Capital Loan 23
Slide 34: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of fixed and floating rate loans and Period-end interest rate by maturity for fixed rate debt undrawn committed credit limits and swaps 450 4,4 % Fixed (EUR 333.2m) 405 4,30 % 400 4,3 % Floating (EUR 1,042.7m) Average 4.07% 4,19 % 350 4,2 % 4,14 % Un
Slide 35: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,375.9 million 1) EUR 1,375.9 million 1) Other LTL 1% 21% Syndicated term loans EEK 3% 43% EUR 59% CP SEK 2% 37% Revolving credit facility 20% Bonds 14% • The backbone of the debt financing continues to be the syndicated
Slide 36: Key Figures – Interest Rates and LTV
Key Figures – Interest Rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) 5,50 % 1 400 70 % 1 312,21 327,2 5,00 % 1 300 1 272,3 1 234,8 60 % 1 205,31 221,11 194,61 191,3 4,50 % 1 184,3 1 200 1 147,31 149,4 4,00 % 50 % 1 100 3,50 % 1 000 40 % 3,00 % 900 878,2 863,3 2,50 %
Slide 37: Breakdown of Financial Expenses
Breakdown of Financial Expenses 1q 4q 1q Change-% Change-% Net Financial Expenses (EUR million) 2010 2009 2009 (y-o-y) (q-o-q) Financial Expenses: Interest expenses -12,3 -10,8 -11,5 7% 15 % Foreign exchange losses 0,0 0,0 0,0 -56 % 221 % Capitalised fees -0,5 -0,2 -0,2 159 % 104 % Non-cash option e
Slide 38: Net Financial Expenses Q4 2009 vs Q1 2010
Net Financial Expenses Q4 2009 vs Q1 2010 16 +0,2 -0,8 +1,6 +0,2 14 13,1 12 12,0 10 8 6 4 2 0 4Q2009 Net interest Fees Derivative Other 1Q2010 valuation 38 Q1 2010
Slide 39: Share performance
Share performance1) 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00 FTSE EPRA Nasdaq OMX Helsinki CAP Citycon 39 Q1 2010 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on 3 January 2006 have been rebased to Citycon share price at EUR 3.03
Slide 40: Ownership
Ownership SHAREHOLDERS • End of March market capitalization totaled EUR 654.1 million 10.8% • 89.2% of shareholders international • Number of domestic owners increased • 4,115 registered shareholders • Largest Shareholders: • Gazit-Globe 47.9% (source: www.gazit- globe.com) • ING Clarion Real Estate
Slide 41: Backup information
Backup information 41 Q1 2010
Slide 42: Completed Projects: Liljeholmstorget
Completed Projects LILJEHOLMSTORGET Construction of a new shopping centre south west of Stockholm city centre. Location is the major traffic hub. Existing building is totally refurbished, new centre is built adjacent to subway station. Pilot project in sustainable construction. LEED® - platinum cert
Slide 43: Completed Projects: Rocca al Mare
Completed Projects ROCCA AL MARE Extension and redevelopment of existing centre west of Tallinn city centre. After the project Rocca al Mare is the largest centres in Estonia and Citycon took over almost a quarter of the Tallinn shopping centre market. Anchor tenant largest Prisma hypermarket in Est
Slide 44: First possible termination year of the leases by contract type
First possible termination year of the leases by contract type, 31 Dec 2009 35,0 30,0 25,0 Valid until further notice 20,0 Initially fixed-term contract 15,0 Fixed-term contract 10,0 5,0 0,0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+ Fixed-term contracts expire at the end of the contrac
Slide 45: Illustrative Calculation of ICR Covenant Using Q1 2010 Financials
Illustrative Calculation of ICR Covenant Using Q1 2010 Financials* Q1 2010 EBITDA for covenant EBITDA = EUR 108.3 + EUR 0.7 + calculation: direct operating profit EUR 1.0 + depreciations +/- non-cash and = EUR 110.0 million for previous exceptional items 12-month period EUR million Q1 Q4 Q3 Q2 Cumul
Slide 46: Illustrative Calculation of Equity Ratio Covenant Using Q1 2010 Financials
Illustrative Calculation of Equity Ratio Covenant Using Q1 2010 Financials* Equity for covenant calculation: Equity = EUR 748.9 + EUR 139.8 – total shareholders’ equity + EUR 39.2 + EUR 29.2 subordinated debt – minority = EUR 878.7 million as at 31 Mar interest +/– fair value of derivatives 2010 inc
Slide 47: 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 Citycon continues to growth New acquisitions in Finland and Helsinki Stock Exchange Office Ownership structure becomes Sweden portfoli
Slide 48: Citycon Core Shopping Centres
Citycon Core Shopping Centres Iso Omena Myyrmanni Trio (incl. Hansa) 1977/87/2008 Lippulaiva Built 2001 1994 45.700 m2 1993 GLA 61.300 m2 40.300 m2 89.3 % 23.400 m2 Ownership 100 % 100 % 100 % Finland Koskikeskus Forum Columbus 1988 1953/91 1997/07 26.300 m2 17.500 m2 21.000 m2 88 % Citycon 69 % 100
Slide 49: Contact information
Contact information INVESTOR RELATIONS Mr Petri Olkinuora CEO Tel. +358 207 664 401 Petri.Olkinuora@citycon.fi Mr Eero Sihvonen CFO, Executive Vice President Tel. +358 50 5579 137 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola IRO Tel. +358 40 5666 070 Hanna.Jaakkola@citycon.fi 49 Q1 2010
Slide 50: Disclaimer
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