Slide 1: Audiocast Presentation Q4/2019
AUDIOCAST PRESENTATION Q4/2019
Slide 2: Summary of 2019: Improving Operational Performance
SUMMARY OF 2019: IMPROVING OPERATIONAL PERFORMANCE EPRA EARNINGS PER SHARE INCREASED TO 0.818 (2018: 0.806) - Net rental income increased to EUR 217.4 million (2018: 214.9) - Administrative expenses continued to decline (down 4.5% y/y) IMPROVING OPERATIONAL DEVELOPMENT ‒ Like-for-like net rental inc
Slide 3: Overall Sales +2.6% and Footfall +3.8%
OVERALL SALES +2.6% AND FOOTFALL +3.8% - POSITIVE LIKE-FOR-LIKE DEVELOPMENT FOOTFALL DEVELOPMENT TENANT SALES DEVELOPMENT Q1-Q4/2019 vs. Q1-Q4/2018, % 1) Q1-Q4/2019 vs. Q1-Q4/2018, % 1) 3.8% 2.6% 1.0% 0.2% Like-for-like footfall Total footfall (including Kista Like-for-like sales Total sales (includ
Slide 4: Occupancy Rate at a Good Level
OCCUPANCY RATE AT A GOOD LEVEL 2019 2018 96.0% 96.4% 95.9% 95.6% 95.3% 95.5% Average rent1) EUR/sq.m. 23.3 23.2 Average remaining length of years 3.2 3.4 the lease portfolio 2019 2018 Average rent of leases EUR/sq.m. 26.0 22.5 started Average rent of leases ended EUR/sq.m. 25.5 22.1 Leasing spread o
Slide 5: Our Journey Towards Carbon Neutrality by 2030
OUR JOURNEY TOWARDS CARBON NEUTRALITY BY 2030 CONTINUED DURING THE YEAR DEVELOPMENT OF KEY KPIS IN 2019 SUSTAINABILITY IN ACTION IN Q4/2019 WORLD’S LARGEST SOLAR PARK WITH SNOW MELTING OPENED IN DOWNTOWN - 10% - 72% IN NOVEMBER WE OPENED OUR NEWEST SOLAR PARK TO THE ROOF OF ENERGY INTENSITY FROM GRE
Slide 6: Acquiring Remaining Interest in 3 Assets in Norway
ACQUIRING REMAINING INTEREST IN 3 ASSETS IN NORWAY THE PORTFOLIO CONSISTS OF 3 ASSETS IN NORWAY PRIOR TO THE TRANSACTION CITYCON HAD 20% OWNERSHIP OF THE PORTFOLIO STOVNER SENTER, TORVBYEN, MARKEDET, AFTER TRANSACTION THE WHOLE PORTFOLIO 100% FREDRIKSTAD, NORWAY HAUGESUND, NORWAY OSLO, NORWAY OWNED
Slide 7: Impact on Citycon's Financials
IMPACT ON CITYCON’S FINANCIALS TRANSACTION VALUE APPROXIMATELY MEUR 145 ‒ Citycon has owned/managed the portfolio since 2015, knowledge of assets and their potential ‒ Stovner Senter present more than half of total transaction value ‒ Connected to public transportation ‒ 100 stores, eateries, servic
Slide 8: Financial Overview
FINANCIAL OVERVIEW
Slide 9: Q4/2019 Financials
Q4/2019 FINANCIALS Q4/2019 MEUR Q4/2019 Q4/2018 Change % INCL. KISTA 50% Gross rental income 56.9 59.1 -3.8 60.2 Net rental income 53.5 53.7 -0.4 56.3 Direct operating profit 47.1 44.1 7.0 49.7 EPRA Earnings 35.6 34.2 4.3 N/A EPRA EPS (basic) 1) 0.200 0.192 4.3 N/A Adjusted EPRA Earnings per 0.191 0
Slide 10: Full Year 2019 Financials
FULL YEAR 2019 FINANCIALS 2019 MEUR 2019 2018 Change % INCL. KISTA 50% Gross rental income 232.1 237.0 -2.1 244.6 Net rental income 217.4 214.9 1.2 227.3 Direct operating profit 193.5 187.6 3.1 202.6 EPRA Earnings 145.6 143.5 1.5 N/A EPRA EPS (basic) 1) 0.818 0.806 1.5 N/A Adjusted EPRA Earnings per
Slide 11: Net Rental Income Continued to Grow
NET RENTAL INCOME CONTINUED TO GROW NRI DEVELOPMENT MEUR 3.8 3.8 217.4 214.9 0.2 0.9 -6.2 Q1-Q4/2018 Acquisitions (Re)development projects Divestments LFL properties Other (incl. IFRS 16 and Q1-Q4/2019 exchange rate differences CURRENCIES HAD SOME IMPACT ON NRI Foreign currency impact IFRS16 impact
Slide 12: The EPRA Cost Ratio Has Improved Clearly Since 2012
THE EPRA COST RATIO HAS IMPROVED CLEARLY SINCE 2012 26.2% 22.4% 20.3% 19.4% 18.7% 17.6% 17.1% 14.1% 2012 2013 2014 2015 2016 2017 2018 2019 EPRA Cost ratio includes direct vacancy costs 12
Slide 13: Fair Value Changes
FAIR VALUE CHANGES FAIR VALUE CHANGES, MEUR Q4/2019 Q4/2018 2019 2018 Finland & Estonia -23.5 -11.0 -56.1 -58.8 Norway -11.0 -1.6 -33.4 -22.2 Sweden & Denmark -22.7 -5.7 -32.4 8.5 IFRS 16 -1.5 - -6.0 - Investment properties, total -57.2 -18.2 -121.9 -72.5 Kista Galleria (50%) -8.9 -3.2 -17.7 -8.6 In
Slide 14: EPRA Net Asset Value Development
EPRA NET ASSET VALUE DEVELOPMENT CHANGE OF NET ASSET VALUE (EPRA NAV) 1) EUR, per share 0.82 12.95 -0.77 -0.02 12.28 -0.65 -0.05 Q4/2018 EPRA Earnings Indirect result Translation reserve Dividends and equity Other Q4/2019 return paid 31 DEC 2019 31 DEC 2018 EPRA NAV per share, EUR 1) 12.28 12.95 EPR
Slide 15: Green Financing Framework Launched in November 2019
GREEN FINANCING FRAMEWORK LAUNCHED IN NOVEMBER 2019 – In November 2019, Citycon launched a Green Financing Framework – The Framework Integrates the company’s sustainability targets with its financing activities. – Proceeds issued under the framework can be used to finance or re- finance eligible gre
Slide 16: Successful Issuance of EUR 350 Million Green Hybrid Bond
SUCCESSFUL ISSUANCE OF EUR 350 MILLION GREEN HYBRID BOND IN NOVEMBER 2019 KEY TERMS TAKEAWAYS Issue rating: Ba2 / BB (Moody's / S&P) ➢ Demonstrates commitment to strengthening the balance sheet and improving the credit rating Deeply subordinated, senior only to the ordinary share ➢ Decreased near-te
Slide 17: Impact of Hybrid Issuance on Citycon's Financial Reporting
IMPACT OF HYBRID ISSUANCE ON CITYCON’S FINANCIAL REPORTING BACKGROUND ▪ Hybrid instruments treated as 100% equity according to IFRS. Credit rating agencies issue a 50% equity credit for the hybrid. IMPACT ON CITYCON FINANCIALS ▪ Hybrid treated as 100% equity in IFRS financial statements. Hybrid coup
Slide 18: Main Financing Targets
MAIN FINANCING TARGETS – Debt portfolio's hedge ratio 70-90% ✓ 88.8% – Investment-grade credit ratings ✓ BBB-/Baa3 – Financing mainly unsecured ✓ 94.5% – Substantial liquidity buffer ✓ MEUR 562 – Loan to Value 40-45% ✓ 42.4% – Average maturity of loan portfolio > 5 yrs - 4.6 Stable business model ma
Slide 19: Amount of Interest-Bearing Debt Declined
AMOUNT OF INTEREST-BEARING DEBT DECLINED FINANCING KEY FIGURES LTV DEVELOPMENT 31 DEC 2019 31 DEC 2018 Interest bearing debt, fair value MEUR 1,830.7 2,154.6 48.7 49.6 Available liquidity MEUR 562.1 556.4 42.4 Average loan maturity years 4.6 5.0 Interest rate hedging ratio % 88.8 91.7 Weighted avera
Slide 20: New Guidance Practice
NEW GUIDANCE PRACTICE – Citycon has resolved to update it´s guidance practice following AS OF 2020, CITYCON WILL the issuance of hybrid bond. PROVIDE GUIDANCE ON: – In order to quantify the impact of hybrid bond coupons, DIRECT OPERATING PROFIT Citycon will also provide EPRA EPS guidance on adjusted
Slide 21: Outlook 2020
OUTLOOK 2020 DIRECT OPERATING PROFIT 198.5 200.5 191-209 187.6 193.5 175.4 Direct operating profit MEUR 191-209 EPRA EPS 2015 2016 2017 2018 2019 2020E EUR 0.815-0.915 EPRA EPS 0.865 0.815-0.915 0.849 0.856 0.806 0.818 Adjusted EPRA EPS* EUR 0.720-0.820 21 2015 2016 2017 2018 2019 2020E On 5 Februar
Slide 22: Looking Forward 2020
LOOKING FORWARD 2020
Slide 23: Strategic Focus Areas in 2020
STRATEGIC FOCUS AREAS IN 2020 PERFORMANCE IMPROVEMENT - Proactive asset management - Harvest benefits of new organization: grow specialty leasing business significantly and realize cost-savings from pan-Nordic sourcing EXPLOIT MIXED-USE AND DENSIFICATION OPPORTUNITIES - Initiate residential and mixe
Slide 24: Our Zoning Processes Have Progressed
OUR ZONING PROCESSES HAVE PROGRESSED POTENTIAL RESIDENTIAL EXPOSURE SWEDEN NORWAY FINLAND ESTONIA DENMARK TOTAL Potential Gross Building Area ~115,000 ~55,000 ~120,000 ~10,000 ~20,000 ~320,000 (approx.) Of which zoned - ~30,000 ~30,000 - - ~60,000 120,000 sq.m. Of which in zoning- process ~55,000 ~1
Slide 25: Our Development Project in Lippulaiva Is Progressing
OUR DEVELOPMENT PROJECT IN LIPPULAIVA IS PROGRESSING ▪ Lippulaiva will become a strong convenience and service-based shopping centre in the growing neighbourhood of Espoonlahti in greater Helsinki Status update ▪ Lippulaiva will be integrated to the Q4/2019: new Western Metro and -Skanska chosen as
Slide 26: Lippulaiva Is a Great Example of a Mixed-Use Development
LIPPULAIVA IS A GREAT EXAMPLE OF A MIXED-USE DEVELOPMENT LIPPULAIVA ▪ Up to 8 residential buildings with around 500 apartments (~31,000 sqm of building rights). ▪ Currently we are reviewing different options on how to develop the residential component ▪ Shopping centre to be opened in spring 2022, r
Slide 27: Thank You
citycon.com CONTACT INFORMATION Eero Sihvonen THANK YOU. CFO, Exec. VP Tel. +358 50 557 9137 Valtteri Piri IR and Legal Specialist Tel. +358 50 570 1022
Slide 28: Appendix
APPENDIX
Slide 29: Income Statement
INCOME STATEMENT MEUR Q4/2019 Q4/2018 % 2019 2018 % Gross rental income 56.9 59.1 -3.8 % 232.1 237.0 -2.1 % Service charge income 20.5 21.4 -4.1 % 77.1 79.2 -2.6 % Property operating expenses -22.8 -26.2 -12.8 % -89.3 -98.9 -9.7 % Other expenses from leasing operations -1.1 -0.7 70.9 % -2.5 -2.4 3.4
Slide 30: Balance Sheet
BALANCE SHEET MEUR 30 DEC2019 31 DEC 2018 Investment properties 4,160.2 4,131.3 Total non-current assets 4,508.1 4,488.4 Investment properties held for sale - 78.1 Total current assets 74.2 56.2 Total assets 4,582.3 4,622.7 Total shareholders’ equity 1,978.4 2,089.0 Total liabilities 2,257.1 2,533.7
Slide 31: 95% of Debt Fixed Rate with Balanced Maturity Profile
95% OF DEBT FIXED RATE WITH BALANCED MATURITY PROFILE DEBT BREAKDOWN BY TYPE DEBT MATURITIES Bank loans CP 6% 7% 1,830.7 EUR million Bonds 87% DEBT BREAKDOWN BY CURRENCY SEK 21% EUR 59% 1,830.7 EUR million NOK 20% Part of EUR debt has been converted to SEK and NOK using cross- 31 currency swaps
Slide 32: IFRS 16 - Impact on Q1-Q4/2019 Financials
IFRS 16 - IMPACT ON Q1-Q4/2019 FINANCIALS ▪ No change in accounting treatment for lease agreements where we act as the lessor. However, in agreements where Citycon acts as the lessee, accounting treatment will be changed. ▪ Adopted as of Q1/2019 CONSOLIDATED INCOME STATEMENT IMPACT MEUR ON Q4/2019 I