Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — H1 2019 Earnings Presentation
29 slides from Citycon Oyj's earnings presentation, Jul 10, 2019
Slide 1: Audiocast Presentation H1/2019
10.7.2019 AUDIOCAST PRESENTATION H1/2019
Slide 2: Summary of H1/2019: Stable overall performance
SUMMARY OF H1/2019: STABLE OVERALL PERFORMANCE EPRA EARNINGS CONTINUED TO GROW, REPORTED EPRA EPS: EUR 0.418 IN H1/2019 SOLID OPERATIONAL START TO THE YEAR -Positive L-F-L NRI development, total NRI grew by 2.0%. L-F-L development positive in Finland. -Occupancy remained at a high level of 95.6%; po
Slide 3: Strengthening of the team continued in Q2/2019
STRENGTHENING OF THE TEAM CONTINUED IN Q2/2019 IMPLEMENTATION OF NEW ORGANIZATION CONTINUED - Aim of the new organization is to improve asset-level focus and remove boundaries between countries and functions. In addition, aim is to improve G&A efficiency - More accountability at the asset level - Se
Slide 4: New municipal service square to be launched in Trio in Lahti
A NEW MUNICIPAL SERVICE SQUARE TO BE LAUNCHED IN TRIO IN LAHTI, FINLAND – City of Lahti’s service square to open in shopping centre Trio in the autumn of 2019 – Many city services, including social services, to be located in our shopping centre. The City of Lahti to occupy around 1,000 square meters
Slide 5: Lidl opened in Kista Galleria in June
LIDL OPENED IN KISTA GALLERIA IN JUNE – FIRST STEP IN STRENGTHENED GROCERY OFFERING OF KISTA ▪ LIDL opened in Kista Galleria in June 2019. ICA to open in August and Rusta in early 2020. ▪ After the re-positioning, the share of groceries will have doubled to 8,000 square meters and Kista will be more
Slide 6: Iso Omena awarded best Nordic shopping centre
ISO OMENA AWARDED AS THE BEST NORDIC SHOPPING CENTRE BY NORDIC COUNCIL OF SHOPPING CENTRES 6
Slide 7: We continued to recycle capital during Q2/2019
WE CONTINUED TO RECYCLE CAPITAL DURING Q2/2019 WE HAVE DISPOSED ASSETS FOR OVER 865MEUR SINCE 2011 – In 2019 we have divested the following assets: 350 – Two land plots in Helsinki, Finland – Shopping centre Duo in Tampere, Finland 300 – Shopping centre Arabia in Helsinki, Finland 250 – Proceeds rec
Slide 8: Our seven largest assets account for ~50% of our portfolio
OUR SEVEN LARGEST ASSETS ACCOUNT FOR ~50% OF OUR PORTFOLIO ISO OMENA, LILJEHOLMSTORGET KISTA GALLERIA, OASEN, ROCCA AL MARE, HERKULES MYYRMANNI HELSINKI AREA GALLERIA, STOCKHOLM STOCKHOLM BERGEN TALLINN SKIEN HELSINKI AREA GLA, sq.m. 100,900 41,100 92,500 57,000 57,600 49,300 40,400 Visitors, millio
Slide 9: Overall sales +3% and footfall +4%
OVERALL SALES +3% AND FOOTFALL +4% LIKE-FOR-LIKE SALES, FOOTFALL AND NRI STABLE FOOTFALL DEVELOPMENT TENANT SALES DEVELOPMENT LIKE-FOR-LIKE AND TOTAL NET LIKE-FOR-LIKE NRI DEVELOPMENT Q1-Q2/2019 vs. Q1-Q2/2018, % 1) Q1-Q2/2019 vs. Q1-Q2/2018, % 1) RENTAL INCOME DEVELOPMENT CORE VS NON-CORE Q1-Q2/201
Slide 10: Occupancy rate remained at a high level
OCCUPANCY RATE REMAINED AT A HIGH LEVEL 96.8% 96.3% 96.0% 96.4% 95.6% H1/2019 2018 Average rent1) EUR/sq.m. 23.3 23.2 Average remaining length of years 3.3 3.4 the lease portfolio H1/2019 2018 Average rent of leases started EUR/sq.m. 26.2 22.5 Average rent of leases ended EUR/sq.m. 25.1 22.1 Leasing
Slide 11: Financial overview
FINANCIAL OVERVIEW
Slide 12: Q2/2019 Financials
Q2/2019 FINANCIALS Q2/2019 MEUR Q2/2019 Q2/2018 Change % INCL. KISTA 50% Gross rental income 59.0 59.4 -0.6 % 62.1 Net rental income 56.1 54.3 3.3 % 58.6 Direct operating profit 50.7 48.4 4.9 % 53.1 EPRA Earnings 38.7 36.4 6.1 % N/A EPRA EPS (basic) 1) 0.217 0.205 6.1 % N/A EPRA NAV per share 1) 12.
Slide 13: H1/2019 Financials
H1/2019 FINANCIALS H1/2019 MEUR H1/2019 H1/2018 Change % INCL. KISTA 50% Gross rental income 118.5 120.1 -1.3 % 124.7 Net rental income 109.7 107.6 2.0 % 114.6 Direct operating profit 98.4 95.8 2.7 % 103.0 EPRA Earnings 74.5 72.5 2.7 % N/A EPRA EPS (basic) 1) 0.418 0.407 2.7 % N/A EPRA NAV per share
Slide 14: Net rental income continued to grow
NET RENTAL INCOME CONTINUED TO GROW NRI DEVELOPMENT MEUR 2.6 2.4 109.7 107.6 0.0 0.1 -2.9 Q1-Q2/2018 Acquisitions (Re)development projects Divestments LFL properties Other (incl. IFRS 16 and Q1-Q2/2019 exchange rate differences CURRENCIES HAD SOME IMPACT ON NRI Foreign currency impact IFRS16 impact
Slide 15: Fair value changes
FAIR VALUE CHANGES FAIR VALUE CHANGES, MEUR Q2/2019 Q2/2018 H1/2019 H1/2018 2018 Finland & Estonia -9.5 -16.2 -18.7 -33.2 -58.8 Norway -10.7 -10.3 -18.8 -13.9 -22.2 Sweden & Denmark -7.4 0.8 -6.3 13.6 8.5 IFRS 16 -1.5 - -3.0 - - Investment properties, total -29.2 -25.6 -46.8 -33.5 -72.5 Kista Galler
Slide 16: EPRA net asset value development
EPRA NET ASSET VALUE DEVELOPMENT CHANGE OF NET ASSET VALUE (EPRA NAV) ) 1) EUR, per share 0.42 0.03 12.95 -0.30 12.77 0.00 -0.32 Q4/2018 EPRA Earnings Indirect result Translation reserve Dividends and equity Other Q1/2019 return paid 30 JUN 2019 30 JUN 2018 31 DEC 2018 EPRA NAV per share, EUR 1) 12.
Slide 17: Main financing targets
MAIN FINANCING TARGETS – Debt portfolio's hedge ratio 70-90% ✓ 83.3% – Investment-grade credit ratings ✓ BBB-/Baa3 – Financing mainly unsecured ✓ 95.1% – Substantial liquidity buffer ✓ MEUR 560 – Average maturity of loan portfolio > 5 yrs - 4.6 – Loan to Value 40-45% - 48.9% Stable business model ma
Slide 18: Amount of interest-bearing debt declined
AMOUNT OF INTEREST-BEARING DEBT DECLINED FINANCING KEY FIGURES LTV DEVELOPMENT 30 JUN 2019 30 JUN 2018 31 DEC 2018 Interest bearing debt, fair value MEUR 2 123.3 2 083.6 2 154.6 48.7 48.9 Available liquidity MEUR 560.4 565.7 556.4 Average loan maturity years 4.6 4.7 5.0 Interest rate hedging ratio %
Slide 19: Outlook 2019 specified
OUTLOOK 2019 SPECIFIED DIRECT OPERATING PROFIT 198.5 200.5 189-200 187.6 175.4 149.8 Direct operating profit MEUR 189-200 (previously 188-206) EPRA Earnings 2014 2015 2016 2017 2018 2019E MEUR 140-151 EPRA EARNINGS (previously 138-156) 151.1 152.3 143.5 140-151 130.8 EPRA EPS (basic) 99.7 EUR 0.785-
Slide 20: Looking forward at 2019
LOOKING FORWARD AT 2019
Slide 21: Our development project in Lippulaiva is progressing
OUR DEVELOPMENT PROJECT IN LIPPULAIVA IS PROGRESSING – Lippulaiva will be the new heart of the growing area of Espoonlahti in greater Helsinki – Strong focus on everyday Status update shopping needs with Q2/2019: three grocery stores -foundation works – Extension of metro line progressing as and bus
Slide 22: Strategic focus areas of new management
STRATEGIC FOCUS AREAS OF NEW MANAGEMENT INCREASED FOCUS ON ASSET MANAGEMENT - Continue to intensify focus on maximizing asset value - New organization implemented in H1/2019 - Exploit densification opportunities within portfolio CONTINUE TO STRENGTHEN BALANCE SHEET - Continued capital recycling acti
Slide 23: Capital Markets Day 2019
CAPITAL MARKETS DAY 2019 CAPITAL MARKETS DAY 2019 TIME: Tuesday, September 3, 2019 PLACE: Stockholm, Sweden Citycon’s CMD 2019 will consist of optional asset tours in Stockholm in the morning followed by presentations by corporate management in the afternoon. More information can be found on Citycon
Slide 24: Thank you.
citycon.com CONTACT INFORMATION Eero Sihvonen THANK YOU.CFO, Exec. VP Tel. +358 50 557 9137 Mikko Pohjala IR and Communications Director Tel. +358 40 838 07 09
Slide 25: Appendix
APPENDIX
Slide 26: Income statement
INCOME STATEMENT MEUR H1/2019 H1/2018 % 2018 Gross rental income 118.5 120.1 -1.3 % 237.0 Service charge income 38.4 38.8 -1.2 % 79.2 Property operating expenses -45.9 -50.5 -9.2 % -98.9 Other expenses from leasing operations -1.2 -0.8 54.7 % -2.4 Net rental income 109.7 107.6 2.0 % 214.9 Administra
Slide 27: Balance sheet
BALANCE SHEET MEUR 30 JUN 2019 30 JUN 2018 31 DEC 2018 Investment properties 4,149.8 4,140.8 4,131.3 Total non-current assets 4,510.0 4,582.3 4,488.4 Investment properties held for sale 37.5 3.7 78.1 Total current assets 64.6 54.2 56.2 Total assets 4,612.1 4,640.1 4,622.7 Total shareholders’ equity
Slide 28: 95% of debt fixed rate with balanced maturity profile
95% OF DEBT FIXED RATE WITH BALANCED MATURITY PROFILE DEBT BREAKDOWN BY TYPE Bank loans DEBT MATURITIES CP 5% MEUR 6% 500 500 450 400 2,123.3 350 350 350 EUR million Bonds 300 300 300 89 % 250 232 237 219 200 150 135 129 DEBT BREAKDOWN BY CURRENCY 103 100 SEK 19% 50 31 0 EUR 2019 2020 2021 2022 2023
Slide 29: IFRS 16 - Impact on Q1-Q2/2019 financials
IFRS 16 - IMPACT ON Q1-Q2/2019 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 Q2/2019 I