Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q3 2008 Earnings Presentation
54 slides from Citycon Oyj's earnings presentation, October 2008
Slide 1: Citycon Presentation Q3 2008
Citycon Presentation Q3 2008
Slide 2: Contents
Contents Strategy and Q3 Main Points Business Environment Sustainable Approach (Re)development Projects Property Portfolio Key figures Financing Overview Backup Information 2
Slide 3: Goals and Focus
Goals and Focus Goals Growth, mainly organic Strategic focus Retail properties only Geographical focus Growth centres, capitals in the Baltic Countries Sustainability Position Market leader in Finland Strong position in Sweden Growing in the Baltic Countries Strong operating cash flow
Slide 4: Financial Targets
Financial Targets ► Continued expansion through property ► Cumulative CAPEX since 2005 in development and selective acquisitions excess of EUR 1 billion Growth track ► The main emphasis on organic growth ► Solid distribution policy despite growing ► For 2007 Citycon’s distribution was number of shar
Slide 5: Geographical Overview
Geographical Overview Geographical Overview ■ Finland – 74.5% of total net rental income in Q1- Q3/2008 Sweden (€m) Finland (€m) – Net rental income growth of 24.9 % to EUR 68.2 m 1,519.3 – Market leader; 22 shopping centers and 45 other 464.1 94.8 91.7 retail properties 68.2 31.8 31.3 18.8 – Large
Slide 6: Q3 Main Points
Q3 Main Points Citycon owns 33 shopping Q3 (vs. Q2) centres and 50 other retail ■ The fair value change was EUR –70.8 million and the properties market value of property portfolio was EUR 2,094.4 million (EUR 2,156.9 m) ■ The valuation yield 6.2% (6.0%) by external appraiser. ■ Net rental income gre
Slide 7: Q3 Financing Overview
Q3 Financing Overview ■ Balance sheet total stood at EUR 2,238.3 million ■ Refinancing not an issue– total liquidity of EUR 310.7 incl. unutilized committed long term debt facilities (EUR 292.0 m) and cash (EUR 18.7 m) ¾Covers committed development pipeline and repayments at least until end of 2010
Slide 8: Business Environment
CITYCON Business Environment
Slide 9: Business Environment
Business Environment GDP Private Consumption Source: Nordea 9
Slide 10: Business Environment: Consumer Confidence
Business Environment Consumer Confidence 25,0 20,0 15,0 10,0 5,0 Finland Sweden 0,0 1.10.2007 1.1.2008 1.4.2008 1.7.2008 Estonia -5,0 Lithuania Euro zone -10,0 -15,0 -20,0 -25,0 -30,0 Source: Eurostat 10 Consumer confidence indicator is conducted as an interview survey. It includes respondent’s view
Slide 11: Business Environment
Business Environment ■ Property market has slowed down and the unit size has been significantly smaller than before. Retail Sales and CPI, August 2008 The yield requirements have increased in all 11.0% the asset classes in the region. (source: Jones Lang 8,5 LaSalle). 4.4 % 4.7 % 4.4 % 3.0% 3,5 ■ Th
Slide 12: Sustainable Approach
CITYCON Sustainable Approach
Slide 13: Sustainable Shopping Centre – What and Why?
Sustainable Shopping Centre – What and Why? ■ Energy and material costs will increase in the future ■ Legislation will get tighter ■ Consumers will be more aware of green products and services ■ Investors will put more value to good ESG (environmental, social and corporate governance) ■ Safety / sec
Slide 14: (Re)development Projects
(Re)development Projects 14
Slide 15: Stockholm Shopping Market
Stockholm Shopping Market Liljeholmstorget 15 Source: Centrumutveckling AB
Slide 16: Ongoing (Re)development Projects: Finland, Sweden
Ongoing (Re)development Projects Board-approved (Re)development projects include Trio, Liljeholmstorget, Rocca al Mare and Torikeskus Trio Total redevelopment of Lahti downtown shopping centre. The most important shopping venue in its large catchment area,100 kilometers from Helsinki. Originally bui
Slide 17: Ongoing (Re)development Projects: Estonia
Ongoing (Re)development Projects Rocca al Mare Extension and redevelopment of existing shopping centre west of Tallinn city centre After the project Rocca al Mare will be the largest centres in Estonia, large and affluent catchment area. Originally built on 1998. The development project consists of
Slide 18: (Re)development Projects under Planning
(Re)development Projects under Planning 18
Slide 19: Redevelopment Project – Trio
Redevelopment Project – Trio 19
Slide 20: Redevelopment Project – Liljeholmstorget
Redevelopment Project – Liljeholmstorget 20
Slide 21: Redevelopment Project – Rocca al Mare
Redevelopment Project – Rocca al Mare 21
Slide 22: Property Portfolio
CITYCON Property Portfolio
Slide 23: Property Portfolio
Property Portfolio ■ 3,647 (3,730) leases with an average length of 3.0 (2.8) years ■ GLA totalled grew by 2.4 % to 928,450 m2 ■ Net rental income increased by 20.1% to EUR 91.6 million ■ Total NRI growth 3.2% in Q3 (compared with Q2/08) ■ Net rental income for like-for-like properties grew by 1.8%,
Slide 24: Property Portfolio
Property Portfolio ■ Annualised rental value for the portfolio was EUR Breakdown of property portfolio 177.4 million 5.3 % Includes annualised gross rent based on valid rent roll on the 22.2% 30th September, market rent of vacant premises and rental 72.5% income from turnover-based contracts and pos
Slide 25: Valuation Yield Development in the Portfolio
Valuation Yield Development in the Portfolio % 7,5 7 6,5 Finland Sweden 6 The Baltic Countries Total 5,5 5 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Valuation yield above is based on external valuator’s portfolio valuation. 25
Slide 26: Property Portfolio – Finland
Property Portfolio – Finland 26
Slide 27: Property Portfolio – Sweden
Property Portfolio – Sweden 27
Slide 28: Property Portfolio – The Baltic Countries
Property Portfolio – The Baltic Countries Estonia Lithuania 28
Slide 29: Key Figures
CITYCON Key Figures
Slide 30: Income Statement - Snapshot
Income Statement - Snapshot 30
Slide 31: Key Figures – Profitability
Key Figures – Profitability Quarterly Net Rental Income by segments Quarterly Operating Profit1) by segments CAGR +19.8% CAGR +20.3% Citycon has posted solid quarterly growth since 2006 both in terms of Net rental income and Operating profit and has been able to sustain growth throughout 2008 Co
Slide 32: Balance Sheet – Snapshot, Key Figures
Balance Sheet – Snapshot, Key Figures 32
Slide 33: Consolidated cash flow statement Q3/2008
Consolidated cash flow statement Q3/2008 Cash from operations improved by 19% due to: Improved cash generation through higher profits Cash taxes were clearly below year 2007 paid taxes due to a large tax rebate received in 1q 2008 resulting from the change in depreciation policy in 2007 Cash
Slide 34: Key figures: EPRA NAV versus Share Turnover and Profit
Key figures EPRA NAV versus Share Turnover and Profit 34
Slide 35: Key Figures – Financing Overview
Key Figures – Financing Overview Interest-bearing debt by fixing type Maturity profile of loans and derivatives EUR 1,239.8 million 1) Loans (EUR 1,239.8) Floating rate debt Fixed rate debt Fixed derivatives (EUR 618.8m) 24% 26% Inflation derivatives (EUR 50.0m) Fixed rate swaps 50% During third q
Slide 36: Key Figures – Financing Overview
Key Figures – Financing Overview Maturity profile of fixed and floating rate loans and Period-end interest rate by maturity undrawn committed credit limits Fixed (EUR 320.8m) Average 5.04% Floating (EUR 919.0m) Undrawn credits (EUR 292.0m) Bulk of Citycon’s debt is due on or after 2013 Majority
Slide 37: Key Figures - Debt Portfolio
Key Figures - Debt Portfolio Breakdown by debt type Breakdown by currency EUR 1,239.8 million 1) EUR 1,239.8 million 1) Other LTL 1% 25% Syndicated term loans EEK 4% 48% EUR 74% SEK 21% CP’s 5% Revolving credit facility 7% Bonds 15% The backbone of the debt financing continues to be the syndicated
Slide 38: Key Figures – Interest Rates and LTV
Key Figures – Interest Rates and LTV Quarterly development of interest rates 1) Net debt and LTV-% 2) Increasing market rates feed through income statement with certain lag and Citycon’s average interest rate increased marginally to 4.92% as short term rates increased Surging money market rates
Slide 39: Breakdown of Financial Expenses
Breakdown of Financial Expenses 3Q/2008 2008 YTD Interest expenses increased 4% from the previous quarter to Excluding derivative valuations, Net financial expenses EUR 14.7 million due to increased short term rates and higher increased 41% compared to 1-9/ 2007 debt level At the same time, we
Slide 40: Net Financial Expenses Q3/2008 vs Q2/2008
Net Financial Expenses Q3/2008 vs Q2/2008 40
Slide 41: Key Figures – Share Performance
Key Figures – Share Performance 1) 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 1.1.2004 1.7.2004 1.1.2005 1.7.2005 1.1.2006 1.7.2006 1.1.2007 1.7.2007 1.1.2008 1.7.2008 FTSE EPRA Nasdaq OMX Helsinki CAP Citycon 41 1) Starting values of FTSE EPRA index and OMX Helsinki CAP index on 3 January 2007 have been rebas
Slide 42: Ownership
Ownership Market capitalisation totalled EUR 373 million as of 13 Oct 2008 Breakdown of shareholders 95.7% of shareholders are international as of 30 Sept, 2008 4.20 % 2001 registered shareholders as of 30 Sept, 2008 95.80 % Largest Share holders Gazit –Globe ~40.28% Perennial Investment Pa
Slide 43: Backup Information
CITYCON Backup Information
Slide 44: (Re)development Projects: Potential project Forum Sampokeskus
(Re)development Projects Potential project 44 Forum Sampokeskus
Slide 45: (Re)development Projects: Completed projects
(Re)development Projects Completed projects Linjuri, Salo 45
Slide 46: Property Portfolio – Acquisition Track Record
Property Portfolio – Acquisition Track Record 1) EUR million Jul 2005 Jul 2005 Sep Dec Jan Feb May Jul 2006 Aug Sep Sep Jan Feb May July Sept Sept 2005 2005 2006 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2007 Åkersbe Rocca Colum- rga al Mare Trio Portfolio Valtari + Portfolio Mandarin bus Li
Slide 47: Iso Omena “The Big Apple”
Iso Omena “The Big Apple” Key Figures Opening 2001 Citycon acquired in September 2007 shopping Leasable area, m2 61,300 centre Iso Omena from Doughty Hanson for of which retail premises, m2 49,000 appr. EUR 329 million; net initial yield 4.5%. Gross floor area, m2 138,458 The company sold 40% of
Slide 48: Iso Omena - Catchment area
Iso Omena “The Big Apple” Iso Omena - Catchment area 10-minute drive time 149,700 consumers 66,500 households Purchasing power EUR 2.75 billion 5-minute drive time 35,000 consumers 16,200 households Purchasing power EUR 0.6 billion Drive Times 48
Slide 49: Citycon in Brief - Background
Citycon in Brief - Background Citycon’s path to becoming the market leader and an international real estate company 1988 2004 2007 Quoted on the Main List of Citycon continues to growth The company strengthens its Helsinki Stock Exchange Office Ownership structure becomes shopping centre por
Slide 50: Country Organisation
Country Organisation CITYCON : Administration Finance = —__ Retail Property Retail Commercial) | Property Retail Property Properties | |Development Properties | |Development| |Development Properties | |Development
Slide 51: Management
Management Petri Olkinuora, CEO Eero Sihvonen, CFO Outi Raekivi Head of Legal Affairs Kaisa Vuorio Ulf Attebrant Harri Holmström Vice President Vice President Vice President Finnish Operations Swedish Operations Baltic Operations 51
Slide 52: Citycon Properties – Core Shopping Centres
Citycon Properties – Core Shopping Centres Lippulaiva Myyrmanni Trio Built 1993 1994 1977/87 GLA 23.000 m2 40.200 m2 32.200 m2 Owned 100 % 100 % 89.3 % Finland Iso Omena 2001 Koskikeskus Forum Columbus 61.300 m2 1988 1953/91 1997/07 100 % 25.700 m2 17.400 m2 20.400 m2 88 % Citycon 69 % 100 % Jakobsb
Slide 53: Contact Information
Contact Information Citycon Oyj Investor Relations Pohjoisesplanadi 35 AB FIN-00100 Helsinki Tel. +358 9 680 36 70 Mr Petri Olkinuora Fax +358 9 680 36 788 [email protected] CEO www.citycon.fi Tel. +358 9 6803 6738 e-mail : [email protected] Fax +358 9 6803 6788 [email protected]
Slide 54: Disclaimer
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