Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q1 2009 Earnings Presentation
52 slides from Citycon Oyj's earnings presentation, 2009
Slide 1: Citycon Presentation Q1 2009
Citycon Presentation Q1 2009
Slide 2: Contents
Contents Mission, vision and strategy Main points and financial overview Business environment (Re)development projects Property portfolio Key figures Financing overview Backup information 2 Q1 2009
Slide 3: Strategy: mission and vision
Strategy MISSION Our mission is to ensure that people shop in Citycon’s shopping centres. By combining property investment and shopping centre business, Citycon creates sustainable shareholder value. VISION Citycon is a shopping centre business leader, an active owner and a long-term developer aimin
Slide 4: Strategy
Strategy Citycon’s strategy is: • To concentrate on shopping centre business in Finland, Sweden and the Baltic countries. • To manage and develop its shopping centres in a centralised manner, using Citycon’s own, active and professional personnel working locally. This creates efficiency and synergie
Slide 5: Financial targets
Financial targets Continued expansion through property development and selective acquisitions Cumulative CAPEX since 2005 in excess of EUR 1.5 billion GROWTH Main emphasis on organic growth Solid distribution policy Payout target 50 % of the result for the period after taxes DIVIDENDS excl. fair
Slide 6: Geographical overview
Geographical overview FINLAND • 76.1% of total net rental income in Q1 2009 • Net rental income growth of 3.3 % to EUR 23.1 million Sweden (€m) Finland (€m) • Market leader with 24% market share; 22 1,468.9 477.2 shopping centers and 42 other retail properties 33.5 32.3 23.1 9.3 9.0 5.2 SWEDEN MV Tu
Slide 7: Main points
Main points LAST QUARTER (vs. Q4 2008) • The fair value change was EUR -31.6 million and the market value of property portfolio was EUR 2,097.3 million (EUR 2,111.6 m) • The valuation yield 6.5% (6.4%) by external appraiser. • Net rental income was EUR 30.3 million (EUR 30.2 m) • Direct result per s
Slide 8: Financing overview
Financing overview • Balance sheet totalled at EUR 2,147.8 million • Citycon signed a three-year EUR 75 million unsecured revolving credit facility with three Nordic banks • Refinancing not an issue – total liquidity of EUR 290.4 million incl. unutilized committed debt facilities (EUR 276.7m) and ca
Slide 9: Business environment
Business environment 9 Q1 2009
Slide 10: Business environment: GDP and private consumption
Business environment GDP PRIVATE CONSUMPTION Source: Nordea 10 Q1 2009
Slide 11: Business environment: consumer confidence
Business environment CONSUMER CONFIDENCE 30,00 20,00 10,00 0,00 1.10.2007 1.1.2008 1.4.2008 1.7.2008 1.10.2008 1.1.2009 Finland -10,00 Sweden Estonia Lithuania -20,00 Euro Zone -30,00 -40,00 -50,00 -60,00 Source: Eurostat 11 Consumer confidence indicator is conducted as an interview survey. It inclu
Slide 12: Business environment: property market and retail sales
Business environment PROPERTY MARKET 1) RETAIL AND GROCERY SALES, CPI, FEB 09 Low transaction volumes during the first months of 2009. Transaction volume for the first quarter is around EUR 250 2.0 % 0.9% 1.0% million, the year before it was over EUR 2 0 0.2% -1.0% billion in Finland. Finland Sweden
Slide 13: (Re)development projects
(Re)development projects 13 Q1 2009
Slide 14: Sustainable shopping centre – why and how?
Sustainable shopping centre –why and how? WHY? OUR ACTIONS • Energy and material costs will increase in the 1. Internal Green Shopping Centre Management future Programme to foster sustainable development in all • Legislation will get tighter Citycon shopping centres. Goals: • Consumers will be more
Slide 15: Ongoing (re)development projects: Rocca al Mare
Ongoing (re)development projects ROCCA AL MARE Pilot project in sustainable construction. Extension and redevelopment of existing shopping centre west of Tallinn city centre. After the project Rocca al Mare will be the largest centres in Estonia, large and affluent catchment area. Originally built i
Slide 16: Ongoing (re)development projects: Liljeholmstorget
Ongoing (re)development projects LILJEHOLMSTORGET Pilot project in sustainable construction. Construction of a new shopping centre south west of Stockholm city centre. Location is the major traffic hub, the whole area is being redeveloped into attractive residential neighborhood. Existing building i
Slide 17: Liljeholmstorget - Stockholm shopping centers
Liljeholmstorget - Stockholm shopping centers Liljeholmstorget 17 Source: Centrumutveckling AB Q1 2009
Slide 18: Completed (re)development projects: Trio
Completed (re)development projects TRIO Total redevelopment of Lahti downtown shopping centre. The most important shopping venue in its large catchment area,100 kilometers from Helsinki. Originally built in 1977/87 and consisted of three separate buildings. Adjacent Hansa-building (11,400 m2, not in
Slide 19: (Re)development projects under planning
(Re)development projects under planning FUTURE POTENTIAL: • Most of Citycon’s shopping centres offer extension and (re)development possibilities Organic growth potential without new acquisitions Citycon knows the possibilities: properties , tenants, catchment areas, local authorities Improving
Slide 20: Property portfolio
Property portfolio 20 Q1 2009
Slide 21: Property portfolio
Property portfolio • 4,080 (3,665) leases with an average length of 3.1 (3.0) years • GLA grew by 1.0% to 932,750 m2 • Net rental income increased by 2.2 % to EUR 30.3 million • without the weakened Swedish krona, NRI would have increased by 5.1 % • Net rental income for like-for-like properties gre
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 26.6% of NRI end of 2008 • Five largest totaled 38.4
Slide 23: Shopping centre rental income by branches
Shopping centre rental income by branches *) Cafes & Restaurants 8% Health & Other Specialty Stores Leisure & Home Beauty 2% Supplies 8% 20 % Services & Offices 5% Department Stores 11 % Clothes & Fashion 22 % Groceries 24 % *) Excl. Supermarket and shops -portfolio 23 Q1 2009
Slide 24: Valuation yield development in the portfolio
Valuation yield development in the portfolio % 8 7,5 7 Finland Finland excl. Iso Omena 6,5 Sweden Baltic Countries Total 6 5,5 5 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Valuation yield above is based on external valuator’s portfolio valuation. 24 Q1 2009
Slide 25: Property portfolio
Property portfolio TOTAL PORTFOLIO Q1 2009 Q1 2008 Q4 2008 2008 Net Rental Income, EUR million 30.3 29.7 30.2 121.8 Number of leases started during 1) 128 124 255 572 the period 2 Total area of leases started, m 16,066 24,240 69,730 124,960 Occupancy rate at end of the 95.2 96.0 96.0 period ,% Avera
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 2009
Slide 27: Business Environment
Business Environment 27 Q1 2009
Slide 28: Key figures
Key figures lig a Q1 2009 C ITYCO Nn
Slide 29: Snapshot of Statement of Comprehensive Income
Snapshot of Statement of Comprehensive Income EUR million Q1 2009 Q1 2008 2008 Gross rental income 44.3 41.7 173.0 Service charge income 1.6 2.6 5.3 Turnover 45.9 44.3 178.3 Property operating expenses 15.3 14.6 56.3 Other expenses from leasing operations 0.2 0.1 0.2 Net rental income 30.3 29.7 121.
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 Fi nl a nd Sweden CAGR +16.1% CAGR +16.2% Ba l ti cs Other 35,0 Ba l ti cs Other 35,0 30,5 31,5 30,3 30,2 27,6 25,7 29,7 30,0 25,9 26,0 25,6 30,0 27,3 27,1 23,8 25
Slide 31: Snapshot of Statement of Financial Position
Snapshot of Statement of Financial Position Statement of Financial Position, EUR million 31 March 2009 31 March 2008 31 Dec 2008 Investment property 2,097.3 2,282.1 2,111.6 Total non-current assets 2,108.6 2,289.1 2,126.1 Current assets 39.2 67.9 52.4 Assets total 2,147.8 2,357.0 2,178.5 Total share
Slide 32: Consolidated Cash Flow Statement Q1 2009
Consolidated Cash Flow Statement Q1 2009 EUR MILLION 1Q2009 1Q2008 • Cash flows from operations improved by 70% due to: Operating activities • Improved cash generation through higher direct result Profit before taxes -18,1 11,3 • Working capital change supported by one-off items Adjustments 44,0 14,
Slide 33: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives 600 EUR 1,204.9 million 1) 487 500 Loans (EUR 1,204.9) Floating rate debt 401 400 26% Fixed rate debt Fixed derivatives (EUR 638.6m) 24% 300 228 200 157 119 86 91 90 100 70 46 45 25 Fixed
Slide 34: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of fixed and floating rate Period-end interest rate by maturity loans and undrawn committed credit limits for fixed rate debt and swaps 450 5,0 % 411 400 Fixed (EUR 285.9m) 4,8 % 4,76 % Floating (EUR 919.0m) 350 Undrawn credits (EUR 276.7m) 292 4,6 %
Slide 35: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,204.9 million 1) EUR 1,204.9 million 1) EEK 4% LTL 1% Other Syndicated term loans 23% EUR 62% 50% SEK 33% Revolving credit facility 15% Bonds 12% • The backbone of the debt financing continues to be the syndicated term a
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 % 1 300 70 % 1 221,1 5,00 % 1 205,3 1 194,6 1 191,3 1 184,3 1 200 1 147,3 1 149,4 60 % 4,50 % 1 100 4,00 % 50 % 1 000 3,50 % 40 % 900 878,2 3,00 % 863,3 811,2 30 % 800 783,3 2,50 % 2,00 % 20 %
Slide 37: Breakdown of Financial Expenses
Breakdown of Financial Expenses 1q 4q 1q Change-% Change-% Net Financial Expenses (EUR million) 2009 2008 2008 (y-o-y) (q-o-q) Financial Expenses: Interest expenses -11,5 -12,9 -13,4 -14 % -11 % Foreign exchange losses 0,0 -0,1 0,0 nm nm Capitalised fees -0,2 -0,2 -0,2 -6 % -7 % Non-cash option expe
Slide 38: Net Financial Expenses Q4 2008 vs Q1 2009
Net Financial Expenses Q4 2008 vs Q1 2009 14 -1,3 1,7 13,0 -0,1 -1,1 12 12,2 10 8 6 4 2 0 4Q2008 Net interest Fees Derivative Other 1Q2009 valuation 38 Q1 2009
Slide 39: Key figures – share performance
Key figures – share performance 1) 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00 2.1.2006 2.4.2006 2.7.2006 2.10.2006 2.1.2007 2.4.2007 2.7.2007 2.10.2007 2.1.2008 2.4.2008 2.7.2008 2.10.2008 2.1.2009 2.4.2009 FTSE EPRA Nasdaq OMX Helsinki CAP Citycon 39 Q1 2009 1) Starting values of FTSE EPRA index and O
Slide 40: Ownership
Ownership • End of year market capitalization totaled EUR 322.7 SHAREHOLDERS million • 91.8% of shareholders international • Number of domestic owners increased 8.2 % • 2869 registered shareholders • Largest Shareholders: • Gazit-Globe 48% (source: Gazit-Globe’s FY results, 29 March 2009) • ING Clar
Slide 41: Backup information
Backup information 41 Q1 2009
Slide 42: First possible termination year of the leases by contract type
First possible termination year of the leases by contract type, Dec 31, 2008 35 30 25 20 Valid until further notice Initially fixed-term contract 15 Fixed-term contract 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 + Fixed-term contracts expire at the end of the contract period, afte
Slide 43: Property portfolio – Finland
Property portfolio – Finland FINANCIAL PERFORMANCE Q1 2009 Q1 2008 Q4 2008 2008 Number of leases started during the period 66 100 193 452 Total area of leases started, sq.m. 9,190 21,800 31,930 79,130 Occupancy rate at end of the period, % 94.9 95.7 95.7 95.7 Average remaining length of lease portfo
Slide 44: Property portfolio – Sweden
Property portfolio – Sweden FINANCIAL PERFORMANCE Q1 2009 Q1 2008 Q4 2008 2008 Number of leases started during the period 61 8 19 58 Total area of leases started, sq.m. 6,873 840 9,060 15,340 Occupancy rate at end of the period, % 95.5 96.1 96.0 96.0 Average remaining length of lease portfolio at th
Slide 45: Property portfolio – The Baltic Countries
Property portfolio – The Baltic Countries FINANCIAL PERFORMANCE Q1 2009 Q1 2008 Q4 2008 2008 Number of leases started during the period 1 16 43 62 Total area of leases started, sq.m. 3 1,600 28,740 30,490 Occupancy rate at end of the period, % 97.7 100 99.8 99.8 Average remaining length of lease por
Slide 46: 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 Helsinki Citycon continues to growth The company strengthens its Stock Exchange Office portfolio Ownership structure becomes very shop
Slide 47: Country organisation
Country organisation 47 Q1 2009
Slide 48: Management
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 48 Q1 2009
Slide 49: Illustrative Calculation of ICR Covenant Using Q1 2009 Financials
Illustrative Calculation of ICR Covenant Using Q1 2009 Financials* Q1 2009 EBITDA for covenant EBITDA = EUR 105.2 + EUR 0.5 + EUR calculation: direct operating profit + 0.5 depreciations +/- non-cash and = EUR 106.2 million for previous 12- exceptional items month period EUR million Q1 Q4 Q3 Q2 Cumu
Slide 50: Illustrative Calculation of Equity Ratio Covenant Using Q1 2009 Financials
Illustrative Calculation of Equity Ratio Covenant Using Q1 2009 Financials* Equity for covenant calculation: total Equity = EUR 781.0 + EUR 138.1 – EUR shareholders’ equity + subordinated 36.6 + EUR 25.6 debt (cf. Note 23) – minority interest = EUR 908.1 million as at 31 Mar 2009 +/– fair value of d
Slide 51: Contact information
Contact information INVESTOR RELATIONS Mr Petri Olkinuora CEO Tel. +358 207 664 401 Petri.Olkinuora@citycon.fi Mr Eero Sihvonen CFO Tel. +358 50 5579 137 Eero.Sihvonen@citycon.fi Ms Hanna Jaakkola IRO Tel. +358 40 5666 070 Hanna.Jaakkola@citycon.fi 51 Q1 2009
Slide 52: Disclaimer
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