Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — FY2011 Earnings Presentation
50 slides from Citycon Oyj's earnings presentation, 2012
Slide 1: Citycon Presentation Full Year 2011 Results
Citycon Presentation Full Year 2011 Results
Slide 2: Disclaimer
Disclaimer 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 any other
Slide 3: Contents
Contents Strategy Business Environment, Shopping Centre Sales and Footfall Main Points 2011 Sustainability and Property Portfolio Key Figures and Financing Overview Backup Information 3 FY 2011
Slide 4: Strategy and Business Environment
Strategy and Business Environment Kristiine, acquisition in Tallinn, May 2011 4 FY 2011
Slide 5: Citycon - Creating Success for Retailing
Citycon - Creating Success for Retailing • In 2011, Citycon’s shopping centres attracted more than 130 million customers, sales totalled more than EUR 2.1 billion • Invests in shopping centres in major growing cities with good demographics in Nordic and Baltic countries • Seeks growth through shoppi
Slide 6: Current Geographical Overview
Current Geographical Overview FINLAND • Market leader • Net rental income EUR 90.5 million • 62.7% of total net rental income Sweden (€m) Finland (€m) • 23 shopping centres, 36 other retail properties, one unbuilt lot 697.1 1,547.4 60.1 35.4 132.5 90.5 SWEDEN MV Turn- Net MV Turn- Net Rental Propert
Slide 7: Five Year Strategy: Balanced Portfolio
Five Year Strategy: Balanced Portfolio • The Nordic region is expected More to continue to show solid geographical economic growth spread • As spending power increases, the region will be of increasing interest to international retail Diversify risk and brands cash flows • By offering a comprehensiv
Slide 8: Five Year Strategy: More Focus -> Total Return
Five Year Strategy: More Focus -> Total Return Operational Financial Leverage the Excellence: Excellence: Expertise: Improve organic Strong balance Economies of growth sheet and higher scale returns Improving Divestments & Selective Profitability Recycle capital M&A Better Stronger Bigger 8 FY 2011
Slide 9: Five Year Strategy: Balanced Portfolio and Selection of Quality Assets
Five Year Strategy: Balanced Portfolio and Selection of Quality Assets: Winning Centers in Winning Cities (Re)develop to Keep Keep • Accelerate (re)developments to EUR125 – 150 million p.a. Rental Growth Sell Keep or JV/Other Structures • Divestment • Recycle capital of EUR 300- by establishing 400
Slide 10: Business Environment: Consumer Confidence
Business Environment CONSUMER CONFIDENCE 40,0 30,0 20,0 10,0 0,0 Finland Sweden -10,0 Estonia Lithuania -20,0 Euro zone -30,0 -40,0 -50,0 -60,0 Source: Eurostat Consumer confidence indicator is conducted as an interview survey. It includes respondent’s view on financial situation, 10 general economi
Slide 11: Business Environment: GDP and Private Consumption
Business Environment GDP PRIVATE CONSUMPTION 7,5% 5,6% 6,0% 4,2% 6,0% 3,6% 3,4% 4,2% 4,0% 5,1% 5,0% 5,0% 4,2% 4,3% 3,4% 1,5% 1,5% 2,0% 2,0% 2,7% 2,8% 2,0% 2,5% 1,7% 2,1% 1,3% 1,0% 0,0% 0,0% Finland Sweden Estonia Lithuania Finland Sweden Estonia Lithuania -0,5% -1,9% -4,5% 2010A 2011E 2012E 2013E 20
Slide 12: Business Environment: Retail Sales and CPI
Business Environment In 2011, retail sales increased by 5.3% in RETAIL SALES Finland, 1.2% in Sweden, by 4.0% in AND CPI, December 2011 Estonia and 8.8% in Lithuania. Retail Sales CPI Relatively low unemployment, reasonably strong consumer confidence, 5,0 5,0 low interest rates -> positive effect on
Slide 13: Sales and Footfall in Citycon Shopping Centres
Sales and Footfall in Citycon Shopping Centres 13 FY 2011
Slide 14: FY 2011 Main Points
FY 2011 Main Points Martinlaakso opening Dec 2011 14 FY 2011
Slide 15: 2011 - The Year of Change
2011 - The Year of Change • Updated strategy: • Re-defined core: quality shopping centres • Nordic and Baltic Countries • Growth; internal and external • Management changes • Project Now! - internal business improvements and efficiency • The goal: to improve direct earning per share with additional
Slide 16: 2011 Summary
2011 Summary in EUR million FY 2011 FY 2010 Growth % NRI, Finland 90.5 86.7 4.3 NRI, Sweden 35.4 28.7 23.3 NRI, Baltic Countries 18.4 11.8 56.5 Net Rental Income, total 144.3 127.2 13.4 EPRA Operating profit 117.4 105.0 11.8 EPRA earnings 53.3 47.3 12.7 Per share, EPRA earnings, basic 0.21 0.21 EPRA
Slide 17: Year 2011
Year 2011 • Increased pay-out EUR 0.15/share • Turnover over EUR 200 million for the first time: EUR 217.1 million • Improved occupancy 95.5% • Acquisition of Högdalen in Stockholm and Kristiine in Tallinn • Divestments: 7 properties, EUR 18.1 million • Completed and on-going (re)development project
Slide 18: Guidance and Financing Overview
Guidance and Financing Overview • Outlook for 2012 (compared with 2011, based on the existing property portfolio and number of shares) : • turnover to grow by EUR 7–16 million • EPRA operating profit by EUR 8–16 million • EPRA Earnings to increase by EUR 4–11 million • EPRA EPS to be EUR 0.21-0.23 •
Slide 19: Sustainability and Property Portfolio
Sustainability and Property Portfolio Liljeholmstorget 19 FY 2011
Slide 20: Strategical Objectives Related to Environmental Responsibility
Strategical Objectives Related to Environmental Responsibility 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 he
Slide 21: Summary of Environmental Targets and Results in 2011
Summary of Environmental Targets and Results in 2011 Strategic objectives related to environmental responsibility Targets for 2011 Results of 2011 Climate Change Reduction of greenhouse gas emission by 20% by year 2020 l-f-l sc: from the 2009 level 2-3% -0.8% K Energy Reduction of energy consumption
Slide 22: Ongoing (Re)development Projects
Ongoing (Re)development Projects Property Area, Total Actual Expected Est. Year Cumulative yield on Pre-leasing sq.m. Estimated of Capex, by the completion rate,% before New Comple Investment, end of period, when tion and after Meur stabilized,% 1) Meur Koskikeskus 27 700 37.9 12.0 6.6 80% Nov Redev
Slide 23: Latest Acquisitions Kristiine and Högdalen Centrum
Latest Acquisitions Kristiine and Högdalen Centrum Kristiine Högdalen Centrum Kristiine is located west of Tallinn city is a well-know shopping centre located in southern centre and it is Tallinn’s second-largest Stockholm, some five kilometres from the city shopping centre after Citycon’s Rocca al
Slide 24: Property Portfolio
Property Portfolio • 5 (re)development projects completed in 2011, largest Åkersberga Centrum • Occupancy rate 95.5% (95.1%) • 3,955 (3,765) leases with an average length of 3.4 (3.2) years • GLA total was 999,270 m2 • Rolling 12-month occupancy cost ratio for l-f-l shopping centres was 8.9% • Rents
Slide 25: Property Portfolio
Property Portfolio Measured in fair value, like-for-like properties ILLUSTRATION OF A TYPICAL LEASE AGREEMENT accounted for 71.3% of the total portfolio and of l-f-l portfolio 59.5 % is in Finland and 69.1% of the total Finnish portfolio is included in l-f-l. Shopping centres represent 87.1% of the
Slide 26: NRI Growth by Segments and Portfolios
NRI Growth by Segments and Portfolios Baltic EUR million Finland Sweden Countries Other Total TURNOVER 2009 92,4 23,2 9,8 0,0 125,4 186,3 Acquisitions - - - - 0,0 0,0 (Re)development projects -4,6 3,5 2,2 - 1,0 6,1 Divestments -0,3 -1,2 - - -1,6 -2,3 Like-for-like properties -0,6 0,6 -0,2 - -0,2 1,3
Slide 27: Property Portfolio
Property Portfolio TOTAL PORTFOLIO Q4/2011 Q4/2010 2011 2010 Number of leases started 228 245 782 789 during the period Total area of leases started, 49,370 47,621 177,006 160,215 sq.m. 1) Average rent of leases started 19.8 18.3 19.7 17.9 (EUR/sq.m.) 1) Number of leases ended 284 294 877 1,279 duri
Slide 28: Valuation Yield Development in the Portfolio
Valuation Yield Development in the Portfolio 8,5 % 8 7,5 7 6,5 6 5,5 5 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 Finland Finland excl. Iso Omena Sweden Baltic Countries Total
Slide 29: Key Figures and Financing Overview
Key Figures and Financing Overview Myyrmanni 29 FY 2011
Slide 30: Snapshot of Statement of Comprehensive Income
Snapshot of Statement of Comprehensive Income EUR million Q4/2011 Q4/2010 2011 2010 Gross rental income 53.0 47.4 206.0 185.9 Utility and service charge income 3.0 2.5 11.1 10.0 Turnover 56.0 49.9 217.1 195.9 Property operating expenses 18.4 17.9 71.6 67.4 Other expenses from leasing operations 0.3
Slide 31: Snapshot of Statement of Financial Position
Snapshot of Statement of Financial Position Statement of Financial Position, EUR million 31 Dec 2011 31 Dec 2010 Investment property 2,522.1 2,367.7 Total non-current assets 2,540.1 2,378.1 Current assets 125.0 56.9 Assets total 2,677.7 2,436.5 Total shareholder’s equity 961.8 900.2 Total liabilitie
Slide 32: Cash Flow Statement for 12-month period ended 31 Dec 11
Cash Flow Statement for 12-month period ended 31 Dec 11 • Cash flows from operating activities exceeded the EUR MILLION FY 2011 FY 2010 previous year clearly due to: Operating activities Cash flow before change in working capital 118,6 105,1 • Cash flow before working capital increased by 13 % Chang
Slide 33: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives EUR 1,554.8 million 1) 500 457 450 Loans (EUR 1,554.8m) 400 Fixed derivatives (EUR 1,005.4m) Floating rate debt 364 18% Fixed rate debt 350 Convertible Bonds 316 17% (EUR 71.3m) 300 257 24
Slide 34: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of fixed and floating rate loans and Average fixed rate of debt and swaps1) undrawn committed credit limits 450 Fixed (EUR 259.1m) 6,0 % 5,60 % 5,50 % 400 385 Floating (EUR 1,295.7m) Fixed debt Swaps 5,0 % 4,79 % Undrawn credits (EUR 253.7m) 4,50 % 3
Slide 35: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,554.8 million 1) EUR 1,554.8 million 1) LTL 1% Other 37% Syndicated term loans 46% EUR 58% SEK 41% CP 3% Revolving credit facility Bonds 7% 7% • The backbone of the debt financing continues to be the syndicated term and
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 % 1 600 1540,1 70 % 5,00 % 1 500 1463,5 1445,2 1389,5 1386,0 60 % 1 400 1369,6 4,50 % 1343,1 1312,21327,2 1 300 1272,3 4,00 % 1205,31221,11194,61191,3 1234,8 50 % 1184,3 1 200 1147,31149,4 3,50
Slide 37: Share Performance
0,00 0,50 1,50 2,00 3,00 3,50 1,00 2,50 4,00 2.1.2009 2.2.2009 37 2.3.2009 2.4.2009 2.5.2009 2.6.2009 2.7.2009 2.8.2009 2.9.2009 2.10.2009 FTSE EPRA 2.11.2009 2.12.2009 Share Performance1) 2.1.2010 2.2.2010 2.3.2010 2.4.2010 2.5.2010 FY 2011 2.6.2010 2.7.2010 2.8.2010 2.9.2010 2.10.2010 2.11.2010 Na
Slide 38: Ownership
Ownership • End of 2011 market capitalization totaled EUR 641.7 million • 82.9% of shareholders international • 4,276 registered shareholders • Largest Shareholders: • Ilmarinen 8.99% • Gazit-Globe 48.0% • Citycon is included in GPR 250 Property Securities Index. The index includes 250 the most liqu
Slide 39: Backup Information
Backup Information Iso Omena 39 FY 2011
Slide 40: Shopping Centre Rental Income by Branches, 31 Dec 2011
Shopping Centre Rental Income by Branches,31 Dec. 2011 Importance of Fashion is growing 40 FY 2011
Slide 41: First Possible Termination Year of the Lease by Contract Type
First Possible Termination Year of the Lease by Contract Type Average lease length increased to 3.4 years 41 FY 2011
Slide 42: Key Results related to Sustainability in 2011
Key Results related to Sustainability in 2011 • The Green Index, which express the results of Green Shopping Centre Management programme, improved by 11% from the previous year. • The annual targets for environmental objectives compared to the baseline level of 2009 were met in energy, waste managem
Slide 43: Key Results related to Sustainability in 2011
Key Results related to Sustainability in 2011 Water • Absolute consumption in the whole portfolio increased by 18.1% • Water consumption in like-for-like shopping centres increased by 13.4% • Water consumption proportionate to sales decreased by 5.8% • Water consumption 4.3 l/visitor and target 3.5
Slide 44: Analysis of Financial Expenses
Analysis of Financial Expenses 4q 3q 4q Change-% Change-% YTD YTD Change-% Net Financial Expenses (EUR million) 2011 2011 2010 (y-o-y) (q-o-q) 2011 2010 (YTD) Financial Expenses: Interest expenses -15,5 -15,2 -13,2 17 % 1% -58,5 -52,0 12 % Foreign exchange gains(+)/ losses(-) 0,0 0,0 0,1 -77 % -313
Slide 45: Net Financial Expenses Q3 2011 vs Q4 2011
Net Financial Expenses Q3 2011 vs Q4 2011 EUR million 18 +0.2 +0.0 -0.0 -0.0 16 16,3 16,0 14 12 10 8 6 4 2 0 3Q2011 Net interest Fees Derivative Other 4Q2011 valuation 45 FY 2011
Slide 46: Illustrative Calculation of ICR Covenant Using Q4 2011 Financials
Illustrative Calculation of ICR Covenant Using Q4 2011 Financials* Q4 2011 EBITDA for covenant EBITDA = EUR 117.4 + EUR 1.0 + calculation: direct operating profit EUR 2.9 + depreciations +/- non-cash and = EUR 121.3 million for rolling 12- exceptional items month period EUR million Q4 Q3 Q2 Q1 Cumul
Slide 47: Illustrative Calculation of Equity Ratio Covenant Using Q4 2011 Financials
Illustrative Calculation of Equity Ratio Covenant Using Q4 2011 Financials* Equity for covenant calculation: Equity = EUR 961.8 + EUR 68.1 – total shareholders’ equity + EUR 59.2 + EUR 41.1 subordinated debt – non- = EUR 1,011.8 million as at 31 Dec controlling interest +/– fair value of 2011 deriva
Slide 48: Citycon in Brief - Background
Citycon in Brief - Background Citycon’s path to becoming the market leader and an international real estate company 1988 Quoted on the Main List of Helsinki 2005 2008 Stock Exchange Office portfolio Citycon enters foreign markets The company sells 40% of Iso Omena to GIC. by acquiring its firs
Slide 49: Citycon Core Shopping Centres
Citycon Core Shopping Centres Iso Omena Myyrmanni Trio (incl. Hansa) 1977/87/2008 Lippulaiva Built 2001 1994/2007/2010 45.700 m2 1993 GLA 60.500 m2 45.700 m2 89.3 % 18.500 m2 Ownership 60 % 100 % 100 % Finland Koskikeskus Forum Columbus 1988 1953/91/2010 1997/07 27.700 m2 22,000 m2 21.000 m2 88 % Ci
Slide 50: Contact Information
Contact Information INVESTOR RELATIONS Mr Marcel Kokkeel CEO Tel. +358 207 664 521 [email protected] Mr Eero Sihvonen CFO, Executive Vice President Tel. +358 50 5579 137 [email protected] Ms Hanna Jaakkola Vice President, IR and Communications Tel. +358 40 5666 070 Hanna.Jaakkola@city