Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q3 2022 Earnings Presentation
20 slides from Citycon Oyj's earnings presentation, 2022
Slide 1: Investor Presentation
Investor Presentation Citycon Investor Presentation 1
Slide 2: Agenda
1. Citycon 2. Citycon Result Update and Outlook 3. Management Track Record of Unlocking Value Citycon Investor Presentation 2
Slide 3: 1. Citycon
1. Citycon Citycon Investor Presentation 3
Slide 4: Citycon is at the forefront of the European retail market
CITYCON IS AT THE FOREFRONT OF THE EUROPEAN RETAIL MARKET ◼ 95% retail occupancy* Strong Performance Through Pandemic ◼ ~97% rental collection rate YTD 2022 ◼ Seven continuous quarters of like-for-like asset value increases through Q3 2022 ◼ 43% of rental income derived from necessity-based tenants
Slide 5: Leading owner, manager and developer of urban community hubs in the Nordics
LEADING OWNER, MANAGER AND DEVELOPER OF URBAN COMMUNITY HUBS IN THE NORDICS Key Information Top-10 Tenants (% of GRI, Q3/2022) Net Rental Income* S Group 5.0% 202.3 In total 25.6% of GRI (MEUR) Kesko Group 4.8% and 50% of top-10 are Varner Group 3.6% grocery tenants Number of Assets* 35 Norgesgruppe
Slide 6: Citycon's Strategy
CITYCON’S STRATEGY CREATING CITIES FULL OF LIFE ASSETS IN NORDIC NECESSITY BASED PROVEN ASSET ACTIVE CAPITAL INHERENT BUILDING PRIME LOCATIONS TENANT MIX MANAGEMENT RECYCLING RIGHTS ▪ Top 2 cities in each ▪ Grocery anchored ▪ Long lasting relationship ▪ Over the next 24 ▪ 300+ MEUR of identified cou
Slide 7: 2. Citycon Result Update and Outlook
2. Citycon Result Update and Outlook Citycon Investor Presentation 7
Slide 8: Operational results and outlook
OPERATIONAL RESULTS AND OUTLOOK RESULTS ABOVE 2019 LEVELS (PRE-COVID) 2022 vs. 2021 2022 vs. 2019 Positive Outlook in 2023 as 92% of Leases Have Some Indexation Benefit +5.2% +7.2% Like-for-like NRI increase (Q1-Q3) Like-for-like tenant sales increase Q3/2022 like-for-like NRI increase +3.4% (Q1-Q3/
Slide 9: Financials
FINANCIALS Q3/2022 Financials Q1-Q3/2022 Financials MEUR Standing Standing Actual Actual MEUR Standing Standing Actual Actual Δ Δ Δ Δ Q3/2022 Q3/2021 Q3/2022 Q3/2021 Q1-Q3/2022 Q1-Q3/2021 Q1-Q3/2022 Q1-Q3/2021 Net Rental 50.6 48.1 5.3% 50.6 51.3 -1.3% Net Rental 151.1 140.3 7.8% 152.4 152.5 -0.1% In
Slide 10: Well positioned for the new inflationary environment
CITYCON IS WELL POSITIONED FOR THE NEW INFLATIONARY ENVIRONMENT AS 92% OF RENTS ARE TIED TO INDEXATION… Citycon’s Business Model Provides Stability in An Inflationary Environment Groceries in Top 10 Tenancies (% of GRI)* ◼ 92% of rents tied to indexation — Indexation once a year, typically in Octobe
Slide 11: Strong sales and footfall with low OCRs support rent absorption
… AND WITH THE CONTINUED STRONG SALES AND FOOTFALL COMBINED WITH LOW OCR’S THERE IS SUPPORT FOR AN INCREASED RENT ABSORPTION BY THE TENANTS Increasing Tenant Sales and an Industry Low OCR Occupancy Cost Ratio by Business Unit and Group in Q3/2022 ◼ Group LFL tenant sales in Q3/22 above pre-Covid lev
Slide 12: Strong, liquid balance sheet with no maturities until late 2024
STRONG, LIQUID BALANCE SHEET WITH NO MATURITIES UNTIL LATE 2024 Improved Credit Profile and a Stronger, More Flexible Balance Sheet Total available liquidity ▪ No material maturities thru 2024 537 MEUR 40% 43% ▪ 3.3 years weighted avg Bonds maturities Hybrid Bonds Equity ▪ 2.38% weighted avg interes
Slide 13: Stable credit ratings
STABLE CREDIT RATINGS Loan to Value (IFRS) Interest Coverage Ratio 48.7 % 4.2x 4.1x 4.1x 4.2x 46.9 % 3.8x 42.4 % 40.3 % 41.7 %* 2018 2019 2020 2021 Q3/2022 2018 2019 2020 2021 Q3/2022 Net Debt / EBITDA Weighted Average Interest Rate 11.2x 11.1x 2.39% 2.47% 2.35% 2.29% 2.38% 10.0x 10.3x 9.2x 2018 201
Slide 14: Stable asset portfolio with valuation uplifts in 7 consecutive quarters
ALTOGETHER THIS RESULTS IN A STABLE ASSET PORTFOLIO THAT HAS SEEN VALUATION UPLIFTS IN 7 CONSECUTIVE QUARTERS LFL Valuation for Operating Properties* Value Creation via Building Rights (MEUR) +80.8 Cumulative BR Value 3,517 307 Annual BR Value Realized 3,436 3,440 3,336 101 81 73 34 16 2019 2020 202
Slide 15: 3. Management Track Record of Unlocking Value
3. Management Track Record of Unlocking Value Citycon Investor Presentation 15
Slide 16: Experienced leadership team
EXPERIENCED LEADERSHIP TEAM F. SCOTT BALL BRET MCLEOD HENRICA GINSTRÖM KIRSI SIMOLA-LAAKSONEN ERIK LENNHAMMAR CHIEF EXECUTIVE CHIEF FINANCIAL CHIEF OPERATING CHIEF INFORMATION CHIEF DEVELOPMENT OFFICER OFFICER OFFICER OFFICER OFFICER Around 100 years of real estate experience Citycon Investor Presen
Slide 17: Lippulaiva – new development in Espoo Finland
LIPPULAIVA – NEW DEVELOPMENT IN ESPOO FINLAND METRO OPENING DECEMBER 2022 NECESSITY-BASED GROCERY RETAIL TENANTS TENANTS OCCUPANCY WORLD´S FIRST RETAIL PROPERTY TO BE AWARDED SMART BUILDING’S AVERAGE RENT NRI CONTRIBUTION GOLD PER SQM FOR PARTIAL-YEAR BEGIN TO OPERATE CERTIFICATE 2022 BY YEAR END 20
Slide 18: Case Columbus
CASE COLUMBUS A SHOWCASE OF CITYCON’S VALUE CREATION CAPABILITY ◼ Active leasing & asset management — Tenant mix optimized — Targeted and cost-efficient refurbishment — 4MEUR value realised from divestment of adjacent plot in 2019 ◼ Transformation into a fully necessity-based center reflected in ass
Slide 19: Specialty leasing
SPECIALTY LEASING What Does It Add? ◼ Great concepts impact overall atmosphere and footfall of the center ◼ Creates variation in the offer ◼ Offers retailers flexibility ◼ Easy start-up and less investments ◼ Additional income during void times Specialty Leasing Income Development % of NRI Specialty
Slide 20: Meaningful development pipeline
MEANINGFUL DEVELOPMENT PIPELINE Communicated Pipeline at Company* GAV (MEUR)*** % GAV Category Project Name Status CapEx Cost (MEUR)*** Citycon 4,278 2,000 46.8% Lippulaiva Under construction Large-scale Liljeholmen Ongoing zoning Peer 1 1,935 494 25.5% development Oasen Ongoing zoning ~700 MEUR 5,8