Slide 1: Citycon presentation Q2/2015 Results
2015 Q2 Citycon presentation 2015 Q2/2015 Results Q2
Slide 2: Leading owner, manager, and developer of shopping centres in the Nordics and Baltics
Leading owner, manager, and developer of 2015 shopping centres in the Nordics and Baltics Q2 Key figures 30 June 2015 # of shopping centres1) 35 # of assets 60 Finland Gross leasable area, sq.m. 931,340 Sweden Total assets, EUR billion1) 3.4 Market cap, EUR billion 2 S&P BBB; Moody’s Baa
Slide 3: 14 July 2015 onwards: Full exposure to the fast growing Nordic region
14 July 2015 onwards: 2015 Full exposure to the fast growing Nordic region Q2 Number of shopping Total assets1) centres1) Baltics & New Business 7% Finland Sweden 35% 27% 20 21 Finland Norway 10 3 Norway Sweden Estonia 30% 1 Denmark 1) Combined # of shopping centres 35 2) 20 55 Total GLA (sq.m.) 930
Slide 4: Offering the best environment for success
2015 Offering the best environment for success Q2 1 2 3 Clear focus Exceptional platform Strong capital base MISSION Pure retail player focused Leveraging the Sufficient and VISION on shopping centres in expertise at each stage attractively priced We offer the best the most attractive of the shoppin
Slide 5: True Pan-Nordic leader
2015 True Pan-Nordic leader Q2 Retail GLA (thousand sq.m.)1) 340 Finland 140 125 120 105 280 Sweden 230 225 225 200 #3 #1 1 275 Norway #2 400 #1 305 200 95 110 95 Estonia 65 60 20 5 1) Source: Company reports, SEB analysis. Includes only majority-owned shopping centres. Includes some assumptions on
Slide 6: Urban crosspoints driven by strong demographics
Urban crosspoints driven by strong 2015 demographics Q2 Core assets: Urban environments, located where people live and work Strong population growth and natural footfall Integrated with public transportation Shared access to education, healthcare, culture, municipal services 6
Slide 7: Core portfolio of grocery-anchored shopping centres
Core portfolio of grocery-anchored 2015 shopping centres Q2 Rental income by category for shopping centres FY2014 2% 7% 9% 26% Clothes and fashion Groceries Leisure, home supplies 8% Services and offices Cafes and restaurants Health and beauty 11% Department stores Other specialty stores 20% 18% 7
Slide 8: Citycon's five core assets
2015 Citycon’s five core assets Q2 Sweden – Kista Galleria Finland – Iso Omena Sweden – Liljeholmstorget Galleria Finland – Koskikeskus Estonia – Rocca al Mare Total GLA Fair value Net rental Economic Visitors 2014 Sales 2014 (sq.m.) (EUR million)1) yield, %1) occupancy, %1) (millions) (EUR million)
Slide 9: Citycon's portfolio is well positioned for the changing retail landscape
Citycon’s portfolio is well positioned 2015 for the changing retail landscape Q2 Citycon’s response Urbanisation Growing urban population 87% of total portfolio in main cities Increased urban GDP per capita 70% in capital cities Convenience Aging population and increasing 100% of centres located <50
Slide 10: Business Environment
2015 Q2 BUSINESS ENVIRONMENT 10
Slide 11: Consumer confidence
11 0 -30 -20 -10 10 20 30 40 1.1.2010 1.3.2010 1.5.2010 1.7.2010 Source: Eurostat 1.9.2010 1.11.2010 1.1.2011 1.3.2011 1.5.2011 1.7.2011 Finland 1.9.2011 1.11.2011 1.1.2012 Consumer confidence Sweden 1.3.2012 1.5.2012 1.7.2012 1.9.2012 Estonia 1.11.2012 1.1.2013 1.3.2013 Denmark 1.5.2013 1.7.2013 1.
Slide 12: Economic outlook
2015 Economic outlook Q2 Change % GDP growth Change % Inflation 4% 4% 3% 3% 2% 2% 1% 1% 0% 0% -1% Finland Sweden Denmark Estonia Euro area Finland Sweden Denmark Estonia Euro area -1% -2% 2013 2014 2015E 2016E 2013 2014 2015E 2016E 15% % Unemployment 80% % Public sector debt as % of GDP 60% 10% 40%
Slide 13: Q2/2015 Consolidation as Nordic Leader
2015 Q2 Q2/2015 CONSOLIDATION AS NORDIC LEADER 13
Slide 14: Highlights Q2/2015
2015 Highlights Q2/2015 Q2 Stable financial performance Result supported by lower financing expenses Diverging operating performance Overall solid LFL NRI growth and stable valuation driven by Sweden (Re)developments progressing positively Next steps in IsoKristiina & Mölndal Galleria Substant
Slide 15: Stable financial and operating performance
2015 Stable financial and operating performance Q2 Q1-Q2/ Q1-Q2 / MEUR Q2/2015 Q2/2014 % 2015 2014 Net rental income 42.6 43.6 82.3 83.6 -1.6 EPRA Operating profit 37.6 38.8 72.5 74.3 -2.5 EPRA Earnings 30.0 24.3 57.5 45.9 25.1 EPRA Earnings per share 0.051 0.053 0.097 0.102 -4.8 (basic) EPRA NAV 2.
Slide 16: Strong retail environment in the Nordics except for Finland
Strong retail environment in the Nordics 2015 except for Finland Q2 Finland Retail sales Jan-May 2015 10% GDP forecast for 2015 modest 8.0% 8% Consumers still hold back on 6% 4.5% spending 4% 2.4% Norway 2% 0.4% Healthy inflation and positive 0% economic outlook -2% -1.6% -4% Sweden Finland No
Slide 17: Acquisition of Sektor enhances Citycon's Nordic strategy
Acquisition of Sektor enhances Citycon’s 2015 Nordic strategy Q2 Baltics & New Business 7% Baltics & New Business 10% Finland Sweden 35% 27% Finland 50% Sweden 39% Norway 30% Pre-transaction Pro forma GAV: EUR 3.4 bn GAV: EUR 4.9 bn Improved geographical diversification – presence in whole Nordics S
Slide 18: Continued like-for-like NRI growth; strong positive trend in Sweden
Continued like-for-like NRI growth; 2015 Strong positive trend in Sweden, Finland negative Q2 Like-for-like NRI growth Occupancy rate 6% 100% 5.1 % 5% 98.2 % 98% 4% 3.2 % 96.2 % 96.0 % 3% 96% 95.3 % 2% 1.6 % 1% 94% 0% 92% -1% -0.5 % -2% 90% Finland Sweden Baltics & Total Finland Sweden Baltics & Tot
Slide 19: Sales and footfall - positive development in Sweden, Finland under pressure
Sales and footfall - positive development in 2015 Sweden, Finland under pressure Q2 Sales in LFL shopping centres Footfall in LFL shopping centres 6% 6% 4% 4% 2% 2% 2% 0% 0% 0% -2% -2% -2% -2% -4% -3% -4% -3% -3% -6% -5% -6% Finland Sweden Baltics & Total Finland Sweden Baltics & Total New New Busin
Slide 20: Further enhancement of portfolio
2015 Further enhancement of portfolio Q2 Citycon’s Actual gross Expected (expected) investments yield on Area before/ Pre-leasing Completion investment by completion after, sq.m. rate, % target need, 30.6.2015, when MEUR MEUR stabilised, % Extension & 63,300 Part A: 55% Q3/2016 Iso Omena 182.0 58.9
Slide 21: IsoKristiina's first phase successfully opened
2015 IsoKristiina’s first phase successfully opened Q2 Pre-leasing rate 90% Theather, health care, gym, cinema and hotel fully integrated Strong anchor profile e.g. Sokos / Marks & Spencer, Kesko, Claes Ohlson Grand opening in October 2015 21
Slide 22: Iso Omena – top shopping centre in the Helsinki region
Iso Omena – top shopping centre in the 2015 Helsinki region Q2 Project on track. Tenant demand at good level New concept with improved circulation Total extension approx. 35,000 sq.m. (of which retail 29,000 sq.m.) Opening August 2016 & Q2/2017 The new western metro line will also start op
Slide 23: Development pipeline
Development pipeline 2015 2 projects committed and one planned ≥ 2015 Q2 Citycon’s Estimated Target for expected project project investment area/additio initiation/ need, nal sq.m. completion EUR m Zoning and pre-leasing completed. August 2015 Building of a new shopping centre replacing the old C Mö
Slide 24: Successful pre-leasing of Mölndal Galleria in Gothenburg
Successful pre-leasing of Mölndal Galleria in 2015 Gothenburg - construction to start Q2 Construction to start in August Successful pre-leasing Several major chains signed e.g. H&M, Systembolaget, Lindex and a large ICA grocery store Expected annual visitors of 5-6 million Part of Mölndal’
Slide 25: Successful recycling of capital
2015 Successful recycling of capital Q2 Signed divestments of approximately EUR 190 million: Sales price, Property Location MEUR Expected closing Porin Asema-aukio Pori 57 Q2/2017 Finland Talvikkitie 7-9 Vantaa 8 Q3-Q4/2015 EUR 141 million Portfolio of 13 assets1) Across Finland 76 Q3/2015 Kallhäl
Slide 26: Integration of Sektor
2015 Integration of Sektor Q2 Capture and integrate best of both worlds Merging two strong platforms based on the “One Citycon” model Combinational and transformational synergies Integration team and program in place Integration based on critical stages No big-bang Completion of integratio
Slide 27: Sektor - ambition to generate annual LFL NRI growth
Sektor - ambition to generate annual LFL NRI 2015 growth of +100bps above CPI Q2 Access to the whole Nordics & cross-country tenanting TENANT OPTIMIZATION Increased food & beverage, health, municipality services Efficiency by sharing the digital platform DIGITAL INNOVATION Enhanced customer
Slide 28: Going forward
2015 Going forward Q2 Citycon: a true Nordic player with international scale Sektor integration started, more details in Q3 Continue active recycling of capital and further improve portfolio quality Committed to LTV of 40-45% 2015 EPRA EPS guidance updated to EUR 0.155-0.175 28
Slide 29: Financial Review
2015 Q2 FINANCIAL REVIEW 29
Slide 30: Financial results
2015 Financial results Q2 Q1-Q2 / Q1-Q2/ Q1-Q2 / MEUR Q2/2015 Q2/2014 2015 incl. 2015 2014 Kista 100% Net rental income, total 42.6 43.6 82.3 83.6 97.2 NRI, Finland 25.2 26.0 48.7 50.4 48.7 NRI, Sweden 10.3 10.6 19.8 19.4 34.7 NRI, Baltics & New Business 7.1 7.0 13.8 13.9 13.8 EPRA Operating profit
Slide 31: NRI development
2015 NRI development Q2 LFL NRI EUR million growth 85 +1.6% 1.1 84 83.6 -0.4 -1.3 -0.7 83 82.3 82 81 80 79 78 Q1-Q2/2014 (Re)development Divestments LFL properties Other (incl. Q1-Q2/2015 projects exchange rates & IFRIC 21) 31
Slide 32: Stable leasing indicators
2015 Stable leasing indicators Q2 30 June 2015 30 June 2014 Occupancy rate (economic), % 96.0 95.7 LFL occupancy rate (economic), % 95.4 95.6 Occupancy cost ratio, % 8.9 8.7 (LFL shopping centres) Average rent, EUR/sq.m./mth 22.0 21.7 Relatively stable occupancy Average rent development stable,
Slide 33: Stable leasing indicators
2015 Stable leasing indicators Q2 Q1-Q2/ Q1-Q2/ Q2/2015 Q2/2014 2015 2014 Average rent, EUR/sq.m. 22.0 21.7 22.0 21.7 # of leases started 207 128 392 272 Total area of leases started, sq.m. 29,288 29,705 73,962 60,401 Average rent of leases started, 22.9 20.0 21.5 19.5 EUR/sq.m. # of leases ended 16
Slide 34: Income statement
2015 Income statement Q2 Q1-Q2/ Q1-Q2/ Change- MEUR Q2/2015 Q2/2014 2015 2014 % Turnover 60.2 61.9 120.3 123.2 -2.3 Property operating expenses -17.2 -17.9 -37.4 -38.9 -4.0 Other expenses from leasing operations -0.4 -0.3 -0.6 -0.6 -2.3 Net rental income 42.6 43.6 82.3 83.6 -1.6 Administrative expen
Slide 35: Positive valuation driven by Sweden
2015 Positive valuation driven by Sweden Q2 Fair value changes Weighted average MEUR yield requirement, % Q2/2015 Q1-Q2/2015 30 June 2015 30 June 2014 Total 1.8 3.0 6.1 6.2 Finland -14.3 -17.0 6.1 6.2 Sweden 14.6 18.1 5.6 5.9 Baltics and New 1.6 2.0 7.0 7.3 Business Fair value change for Q1-Q2/201
Slide 36: Strong balance sheet
2015 Strong balance sheet Q2 MEUR 30 June 2015 30 June 2014 31 Dec 2014 Investment properties 2,819.6 2,741.5 2,769.1 Total non-current assets 3,046.8 2,918.9 2,965.2 Total current assets 81.0 172.2 64.8 Total assets 3,141.6 3,098.7 3,037.2 Total shareholder’s equity 1,630.9 1,465.9 1,652.5 Total li
Slide 37: Financing Overview
2015 Q2 FINANCING OVERVIEW 37
Slide 38: Low average cost of debt
2015 Low average cost of debt Q2 Loan to Value Weighted average interest rate 70% 5% 60% 5% 57.5% 4.25% 54.5% 4.07% 4.12% 4% 49.3% 50% 41.5% 4% 3.28% 40% 38.6% 3.10% 3% 30% 3% 20% 2% 2011 2012 2013 2014 Q2/2015 2011 2012 2013 2014 Q2/2015 38
Slide 39: Successful financing of Sektor
2015 Successful financing of Sektor Q2 Oversubscribed rights issue All offered 296,664,209 shares subscribed, oversubscription 113% Net proceeds EUR 604 million Major shareholder participation Completed 14 July Bridge financing facilities with one year maturity and competitive pricing
Slide 40: Financing key figures
2015 Financing key figures Q2 Q2/2015 Q2/2014 Q4/2014 Interest bearing debt, fair value, MEUR 1,286.4 1,308.6 1,188.4 Available liquidity, MEUR 343.6 419.9 449.8 Average loan maturity, years 5.3 3.8 5.9 Hedging ratio, % 81.5 85.7 88.0 Weighted average interest rate, %1) 3.10 3.98 3.28 Loan to Value
Slide 41: Debt type and currency split
2015 Debt type and currency split Q2 Breakdown by debt type 1) Breakdown by currency 1) CP Other RCF 8% 1% 14% SEK 21% EUR 79% Bonds 77% Share of bond debt has increased and currency breakdown has shifted more towards EUR after the EUR 350 million bond issue. Part has been converted to SEK debt us
Slide 42: Debt maturities and interest risk hedging
2015 Debt maturities and interest risk hedging Q2 Maturity profile of debt 1) Debt by fixing type Loans Floating rate 500 500 Floating to fixed swaps debt Undrawn loan facilities 18% 400 352 350 Fixed rate swaps 300 5% 200 143 149 102 Fixed rate debt 100 59 77% 5 3 0 2015 2016 2017 2018 2019 2020 20
Slide 43: Preliminary combined financial information
2015 Preliminary combined financial information Q2 MEUR Citycon 2014 Sektor 2014 Adjustments Combined Turnover 245.3 127.0 - 372.3 Net rental income 169.4 74.0 -1.3 242.0 Operating profit 1) 165.0 103.5 -8.9 259.5 Net financial income and expenses -77.5 -49.0 - -126.5 Profit for the period 1) 89.7 4
Slide 44: Outlook 2015 updated to reflect Sektor acquisition and rights issue
Outlook 2015 updated to reflect Sektor 2015 acquisition and rights issue Q2 EPRA Operating profit EPRA Earnings EUR million EUR million 166.8- 150 190 116.7- 181.8 131.7 130 170 149.1 149.8 110 150 99.7 135.7 130 90 86.7 117.4 110 70 63.9 53.3 90 50 70 30 2011 2012 2013 2014 2015E 2011 2012 2013 201
Slide 45: Property Portfolio
2015 Q2 PROPERTY PORTFOLIO 45
Slide 46: Lease portfolio
2015 Lease portfolio Q2 3,063 (3,223) lease agreements with an average length of 3.2 (3.4) years Total GLA 931,340 sq.m. (953,290 sq.m.) Rents linked to CPI (nearly all agreements) Annualised potential rental value for the portfolio is EUR 245.3 million Occupancy rate (economic) Average leas
Slide 47: Property portfolio
2015 Property portfolio Q2 Top 5 tenants Occupancy cost ratio LFL shopping centres, rolling 12 mth Proportion of Average rental income, remaining length FY2014 Total 8.9% % of leases, years Kesko 15.4 5.1 Finland 9.4% S Group 6.0 5.9 ICA Gruppen 4.1 4.3 Sweden 6.8% Stockmann 2.8 1.8 H&M 2.1 4.2 Balt
Slide 48: Valuation yield development
2015 Valuation yield development Q2 Citycon's valuation yield development 8,0% 7,0% 7.0 % 6.1% 6,0% 5.6% 5,0% Q2/2009 Q2/2010 Q2/2011 Q2/2012 Q2/2013 Q2/2014 Q2/2015 Finland Sweden Baltics and New Business Total 48
Slide 49: Cityconline – building community and loyalty
2015 Cityconline – building community and loyalty Q2 506 000 facebook likers + 23% 135 000 newsletter subscribers Mobile apps in all largest centres 22 pick-up points 225 digital screens (+73%) 49
Slide 50: Environmental targets and results
2015 Environmental targets and results Q2 Performance in 2014 Climate change In LFL SC: Yearly reduction of greenhouse gas emission by 2−3% -2% Energy Yearly reduction of energy consumption (electricity, heating and cooling) In LFL SC: by 2–3% -6% Carrying out a renewable energy feasibility st
Slide 51: Shares and Shareholders
2015 Q2 SHARES AND SHAREHOLDERS 51
Slide 52: Share performance and volume
2015 Share performance and volume Q2 52
Slide 53: Ownership, 30 June 2015
2015 Ownership, 3O June 2015 Q2 Established and listed on Nasdaq Helsinki in 1988 Nominee- registered Market cap EUR 1,995.4 million 70.6% Other Total registered shareholders 7,483 29.4% (7,854), of which nominee-registered 70.6% (68.5%) of total Largest shareholders: Gazit-Globe 42.8% C
Slide 54: Back up information
2015 Q2 BACK UP INFORMATION
Slide 55: History of Citycon
2015 History of Citycon +25 years of retail experience and portfolio growth Q2 Foundation International expansion New management and new strategy 1988 2003 2011 Founded by Sampo Pension Ltd, Citycon business to include development Citycon’s new CEO, Marcel Kokkeel, Imatran Voima Oy, as well as
Slide 56: Contact information
2015 Q2 Contact information Eero Sihvonen, CFO, Exec. VP Tel. +358 50 557 9137 Henrica Ginström, VP IR & Communications Tel. +358 50 554 4296 56
Slide 57: Disclaimer
2015 Disclaimer Q2 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 a
Slide 58: citycon.com
2015 Q2 citycon.com