Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q3 2021 Earnings Presentation
31 slides from Citycon Oyj's earnings presentation, 2021
Slide 1: Audiocast Presentation Q3/2021
AUDIOCAST PRESENTATION Q3/2021 1 Q3 2021 I Audiocast
Slide 2: Continued strong operating performance approaching 2019 levels
Q3/2021: CONTINUED STRONG OPERATING PERFORMANCE APPROACHING 2019 LEVELS CITYCON’S OPERATING PERFORMANCE: CONTINUED QUARTER OVER QUARTER GROWTH • In Q3/2021 like-for-like net rental income increased +0.4% compared to the Q3/2020, standing at 51.3 MEUR • Operating property NRI (excluding divestments)
Slide 3: Active capital recycling continued
Q3/2021: ACTIVE CAPITAL RECYCLING CONTINUED PORTFOLIO TRANSFORMATION AND CAPITAL RECYCLING • Post the quarter-end, we signed an agreement to divest Columbus shopping centre in Finland, for a gross price of 106.2 MEUR, which is 10 MEUR above the Q4/2020 valuation. • This transaction is a great exampl
Slide 4: Recovery of the macro economics continues in the Nordics
RECOVERY OF THE MACRO ECONOMICS CONTINUES IN THE NORDICS – MOST RESTRICTIONS NOW REMOVED COVID-19 CASES IN THE PAST 7 DAYS* HOUSEHOLDS’ FINANCIAL SITUATION OVER NEXT 12 MONTHS** 15.0 476.0 13.1 12.1 5.3 5.3 2.6 2.1 0.2 155.0 -0.1 -2.1 59.0 65.0 39.0 Sweden Finland Norway US UK GDP PERFORMANCE (%) CO
Slide 5: Our necessity-based urban hubs provide stability
OUR NECESSITY-BASED URBAN HUBS PROVIDE STABILITY GROSS RENTAL INCOME BY TENANT CATEGORY, Q3/2021 OVER 35 % OF GROSS RENTAL INCOME FROM NECESSITY TENANTS • Focus on daily needs of customers Fashion and Groceries • 4 out of top 5 tenants are grocery stores accessories 18% SMALL PORTION OF TURNOVER BAS
Slide 6: Footfall still trails 2019 but sales have nearly recovered
FOOTFALL STILL TRAILS 2019 BUT SALES HAVE NEARLY RECOVERED WEEKLY FOOTFALL DEVELOPMENT LFL TENANT SALES DEVELOPMENT +6% 2021 vs. 2020 LIKE-FOR-LIKE TENANT 160.0% SALES Q3/2021 VS 14.0% 140.0% Q3/2019 120.0% 100.0% 80.0% 3.9% 60.0% 2.2% 40.0% 20.0% -1.4% 0.0% YTD LFL Tenant Sales YTD LFL Grocery Sale
Slide 7: Strong leasing activity indicates further signs of recovery
STRONG LEASING ACTIVITY INDICATES FURTHER SIGNS OF RECOVERY LEASES SIGNED RETAIL OCCUPANCY RATE DEVELOPMENT SQM, thousands 94.1% 94.1% 24.1% 93.7% 154 124 Q1-Q3/2020 Q1-Q3/2021 Q1/ Q2/ Q3/2021 2021 2021 Retail occupance rate w/o Kista 7 Q3 2021 I Audiocast
Slide 8: Strong speciality leasing development
STRONG SPECIALITY LEASING DEVELOPMENT LFL TENANT SALES DEVELOPMENT Q1-Q3/2021 VS. Q1-Q3/2020 ALREADY +51% 1,745 GREAT 5 5.0 4.4 4.5 DEALS IN 2021 4 4.0 2.9 3.5 3 2.7 2.9% 3.0 2.5 2 1.8% 1.7% 2.0 1 1.5 1.0 0 0.5 Q1-Q3/2019 Q1-Q3/2020 Q1-Q3/2021 % of NRI Specialty leasing income (mEUR) 8 Confidential
Slide 9: Financial overview
FINANCIAL OVERVIEW 9 Q3 2021 I Audiocast
Slide 10: Q3/2021 financials
CLICK TO EDIT TITLE Q3/2021 FINANCIALS CLICK TO EDIT TITLE +0.4% QUARTERLY LIKE- FOR-LIKE NRI MEUR Q3/2021 Q3/2020 Change GROWTH Gross rental income 55.3 57.1 -3.1 % Net rental income 51.3 52.9 -3.1 % Direct operating profit 44.7 47.1 -5.1 % EPRA Earnings 32.5 33.5 -3.0 % Adjusted EPRA Earnings (1 2
Slide 11: Q1-Q3/2021 financials
CLICK TO EDIT TITLE Q1-Q3/2021 FINANCIALS CLICK TO EDIT TITLE THE QUARTERLY TREND IS POSITIVE AS Q3/2021 NET RENTAL INCOME MEUR Q1-Q3/2021 Q1-Q3/2020 Change EXCEEDS Q2/2021 LEVELS. Gross rental income 166.6 168.6 -1.1 % Net rental income 152.5 155.5 -1.9 % Direct operating profit 133.7 137.3 -2.6 %
Slide 12: Impact of the exchange rates
IMPACT OF THE EXCHANGE RATES NOK AND SEK EXCHANGE RATE DEVELOPMENT FOREIGN CURRENCY IMPACT ON Q1-Q3/2021: 0.107 • NRI: 3.8 MEUR 0.102 • EPRA EPS: 0.017 EUR 0.097 SEK AND NOK RATES HAVE FURTHER STRENGTHENED POST Q3 0.092 0.087 Closing rates Q3/2021 Q3/2020 SEK 10.17 10.57 0.082 NOK 10.17 11.10 0.077
Slide 13: Net rental income bridge Q1-Q3/2020 – Q1-Q3/2021
NET RENTAL INCOME BRIDGE Q1-Q3/2020 – Q1-Q3/2021 NET RENTAL INCOME BRIDGE Q1-Q3/2021 155.5 0.1 4.4 152.5 -0.3 -3.8 -3.4 Q1-Q3/2020 Acquisitions (Re)development Divestments Like-for-like Other (incl. Q1-Q3/2021 projects properties exchange rate differences) 13 Q3 2021 I Audiocast
Slide 14: Portfolio valuations
PORTFOLIO VALUATIONS FAIR VALUE CHANGES. MEUR Q1-Q3/2021 Q1-Q3/2020 Q3/2021 Q3/2020 2020 Finland & Estonia -5.5 -57.5 -12.1 -12.1 -86.8 Norway 10.3 -9.0 1.7 -2.8 -1.3 Quarterly fair value change for the standing portfolio Sweden & Denmark 11.4 -39.7 -0.9 -6.8 -53.1 was positive EUR 2.4 million. Inve
Slide 15: EPRA net reinstatement value (NRV) increased
EPRA NET REINSTATEMENT VALUE (NRV) INCREASED 0.54 0.14 11.48 -0.11 0.01 -0.01 0.04 0.01 11.58 -0.13 -0.38 Q4/2020 EPRA Earnings Indirect result Translation Dividends Hybrid bond Net losses/gains Change in Change in Other Q3/2021 reserve paid and interests and on cash flow goodwill as a deferred taxe
Slide 16: Main financing metrics
MAIN FINANCING METRICS As of Q3/2021: ▪ Fixed interest rate ratio 88.9% ▪ Investment-grade credit ratings BBB-/Baa3/BBB- ▪ Financing mainly unsecured 100% ▪ Substantial liquidity buffer 832.7 MEUR ▪ Loan to Value 39.6%* ▪ Average maturity of loan portfolio 4.0 *Hybrid bond treated as equity as accor
Slide 17: Balanced maturity profile – no significant near term maturities until 2024
BALANCED MATURITY PROFILE – NO SIGNIFICANT NEAR TERM MATURITIES UNTIL 2024 REDEMPTION OF BOND MATURING IN 2022 DEBT MATURITIES AS OF Q3/2021 • In September, Citycon decided to exercise its right to redeem 550 500 550 its 2022 notes with an outstanding nominal amount of EUR 500 161.7 million. 450 • T
Slide 18: Financing key figures
FINANCING KEY FIGURES FOLLOWING THE SHORT-TERM DEBT REPAYMENTS IN OCTOBER FAIR LTV DEVELOPMENT VALUE OF DEBT STANDS AT 1,865 MEUR 48.7% FINANCING KEY FIGURES 30 SEP 2021 30 SEP 2020 45.7% 46.2% 46.8% 46.9% 46.5% 42.4% Fair value of debt MEUR 2,086.7 2,047.8 38.9% 39.6% Available liquidity MEUR 832.7
Slide 19: Good liquidity position provides flexibility
GOOD LIQUIDITY POSITION PROVIDES FLEXIBILITY FOLLOWING THE SHORT-TERM DEBT REPAYMENTS IN 31 MARCH OCTOBER AVAILABLE AVAILABLE LIQUIDITY, MEUR 30 SEP 2021 30 JUNE 2021 31 DEC 2020 30 SEP 2020 2021 LIQUIDITY STANDS AT 590 MEUR Syndicated revolving credit facilities unutilized 500.0 500.0 500.0 405.7 5
Slide 20: Outlook for 2021
OUTLOOK FOR 2021 New Previously (Q3/2021) (Q2/2021) Direct operating profit MEUR 173–180 173–184 EPRA Earnings per share (basic) EUR 0.683–0.723 0.676–0.726 Adjusted EPRA Earnings per share EUR 0.558-0.598 0.558–0.608 (basic) Adjusted EPRA Earnings per share outlook includes also the coupons of the
Slide 21: Looking forward
LOOKING FORWARD 21 Q3 2021 I Audiocast
Slide 22: Capital recycling continues – Citycon to sell Columbus
New pic available early next week CAPITAL RECYCLING CONTINUES – CITYCON TO SELL COLUMBUS IN HELSINKI METROPOLITAN AREA • Citycon has agreed to sell its necessity-based retail centre Columbus to NREP at a gross price of 106.2MEUR, which is 10 MEUR (+10%) above Q4/2020 valuation and +20% above Q4/2019
Slide 23: Europe lagging US equity market recognition of value of necessity based retail
EUROPE LAGGING US EQUITY MARKET RECOGNITION OF VALUE OF NECESSITY BASED RETAIL 50,000 • US equity markets are clearly assigning value to grocery or necessity based retail similar to Citycon’s SQ.M. LESS portfolio. IN FASHION • This is evident in the cap rates of grocery-anchored and other retail. US
Slide 24: Q3/2021 summary
Q3/2021 SUMMARY ▪ Operating property NRI (excluding divestments) nearly back to pre-pandemic levels (-1.5%) ▪ Columbus sold above book value at 4.9% cap rate ▪ Accretively recycling Columbus proceeds to potentially repurchase shares at 6.7% ▪ No material near-term maturities before 2024 ▪ Lippulaiva
Slide 25: Capital Markets Day 2021
CAPITAL MARKETS DAY 2021 CAPITAL MARKETS DAY 2021 TIME: Tuesday, November 16, 2021 PLACE: Lippulaiva, Finland Citycon’s CMD 2021 will consist of optional asset tours in Lippulaiva and in Iso Omena and presentations by corporate management More information can be found on Citycon’s website at www.cit
Slide 26: Q&A
26 03 2021 | Audiocast CICITYCON
Slide 27: Contact details
EERO SIHVONEN LAURA JAUHIAINEN CFO. Exec. VP VP. Strategy and Investor Relations +358 50 557 9137 +358 40 823 9497 [email protected] [email protected] CITYCON.COM 27
Slide 28: Appendix
APPENDIX citycon.com 28 Q3 2021 I Audiocast
Slide 29: Income statement
INCOME STATEMENT MEUR Q3/2021 Q3/2020 % Q1-Q3/2021 Q1-Q3/2020 % 2020 Gross rental income 55.3 57.1 -3.1 % 166.6 168.6 -1.1 % 224.3 Service charge income 16.1 16.2 -0.9 % 51.5 51.2 0.6 % 71.2 Property operating expenses -19.6 -19.7 -0.7 % -64.4 -61.1 5.4 % -84.9 Other expenses from leasing operations
Slide 30: Balance sheet
BALANCE SHEET MEUR 30 SEPTEMBER 2021 30 SEPTEMBER 2020 Investment properties 4 215.3 4 155.1 Total non-current assets 4 533.6 4 458.8 Investment properties held for sale 109.0 0.0 Total current assets 367.3 98.4 Total assets 5 009.9 4 557.3 Total shareholders’ equity 2 519.8 2 129.9 Total liabilitie
Slide 31: Thank you!
THANK YOU! citycon.com 31 Q3 2021 I Audiocast