Citycon Oyj · OMXHEX:CTY1S
Citycon Oyj — Q2 2022 Earnings Presentation
21 slides from Citycon Oyj's earnings presentation, Aug 10, 2022
Slide 1: CITYCON – H1/2022
CITYCON – H1/2022 +8.8% +9.1% 95.0% Like-for-like Tenant Sales Like-for-like NRI growth Retail occupancy (vs. Q2/2021) (excluding one-time items +6.2%) ( + 80 BPS vs Q4/2021) (+ 9.0% vs. Q2/2019) (vs. Q2/2021) + 1.0 EUR +5.8% 92% Average Rent / sq.m. increase Adjusted EPRA EPS Indexation (vs. Q4/202
Slide 2: Strong First Half Results
STRONG FIRST HALF RESULTS • +9.1% LIKE-FOR-LIKE NRI GROWTH FOR THE QUARTER ; YTD +6.1% • excluding one-time items +6.2% in Q2 and +4.6% in Q1-Q2 • 92% OF RENTS TIED TO INDEXATION • Operational tailwind in a rising inflation environment • Indexation is calculated at the end of each year so the impact
Slide 3: Occupancy Rate and Average Rent Increasing
OCCUPANCY RATE AND AVERAGE RENT INCREASING +3.0% LEASING RETAIL OCCUPANCY RATE AND AVERAGE RENT DEVELOPMENT* SPREADS 95.0% 94.2% 93.7% 23.6€ 22.7€ 22.6€ Q3/2021 Q4/2021 Q2/2022 Average rent Retail occupancy rate 8.8% OCR PROVIDES AMPLE HEADROOM FOR CONTINUED RENT GROWTH 2 Q2 2022 I Audiocast *Excl.
Slide 4: The First Operating Quarter for Lippulaiva
THE FIRST OPERATING WORLD´S FIRST QUARTER FOR LIPPULAIVA RETAIL PROPERTY TO BE AWARDED SMART BUILDING’S GRAND OPENING OF PHASE 1 OF LIPPULAIVA ON 31 MARCH 2022. GOLD CERTIFICATE NECESSITY-BASED GROCERY RETAIL TENANTS TENANTS OCCUPANCY AVERAGE RENT NRI CONTRIBUTION PER SQM FOR PARTIAL-YEAR BEGIN TO O
Slide 5: Creating Value Through Building Rights
CREATING VALUE THROUGH BUILDING RIGHTS ~ 1.8 EUR TOTAL BUILDING RIGHT VALUE TOTAL BUILDING RIGHT VALUE POTENTIAL OF ~300 MEUR IN CONNECTION TO PER SHARE THE EXISTING ASSETS • ~60 MEUR of building rights added in next 12 months : no capital commitments • Possibility to execute development projects on
Slide 6: Monetizing Building Rights
MONETIZING BUILDING RIGHTS MULTIPLE WAYS TO REALIZE THE VALUE IN BUILDING RIGHTS • Citycon is building on its own ~400 apartments at Lippulaiva, Finland at a guaranteed price of construction (EUR 42.9 million committed) • Citycon formed a JV for ~85 apartments at Herkules, Norway ( LIPPULAIVA (HAUSI
Slide 7: Active Capital Recycling to Strengthen Balance Sheet
ACTIVE CAPITAL RECYCLING TO STRENGTHEN BALANCE SHEET • CONTINUED TO REDUCE DEBT BY REPURCHASING BONDS IN THE OPEN MARKET • Year-to-date, Citycon has now accretively repurchased EUR 79 million of notional bonds during 2022 • NO SIGNIFICANT MATURITIES UNTIL 2024 • 100% of debt is fixed • SOLD EUR 400
Slide 8: Citycon Well Positioned for the New Inflationary Environment
CITYCON WELL POSITIONED FOR THE NEW INFLATIONARY ENVIRONMENT STRONG OPERATIONAL PERFROMANCE - Operating performance continues to demonstrate the strength and resilience of Citycon´s portfolio 92% OF RENTS TIED TO INDEXATION - Indexation is calculated at the end of each year so the bulk of the inflat
Slide 9: Financial Overview
FINANCIAL OVERVIEW 8 Q2 2022 I Audiocast
Slide 10: Q2/2022 Financials
Q2/2022 FINANCIALS Standing Standing Actual Actual MEUR Change Change Q2/2022 Q2/2021 Q2/2022 Q2/2021 Net rental income 52.8 47.5 11.2% 52.8 50.8 3.9% Direct operating profit 46.3 41.2 12.5% 46.3 44.1 4.9% EPRA Earnings 32.2 29.7 8.4% 32.2 32.7 -1.5% Adjusted EPRA Earnings * 24.6 24.6 -0.1% 24.6 27.
Slide 11: Q1-Q2/2022 Financials
Q1-Q2/2022 FINANCIALS Standing Standing Actual Actual MEUR Q1-Q2/2022 Q1-Q2/2021 Change Q1-Q2/2022 Q1-Q2/2021 Change Net rental income 100.5 92.2 9.0% 101.8 101.2 0.6% Direct operating profit 85.2 80.5 5.8% 86.4 89.0 -2.9% EPRA Earnings 59.0 55.8 5.8% 60.3 64.3 -6.2% Adjusted EPRA Earnings * 43.9 46
Slide 12: Like-for-Like Net Rental Income Growth
LIKE-FOR-LIKE NET RENTAL INCOME GROWTH 9.1% 6.2% 6.1% Positive one-off items on Q1-Q2/2022 NRI (MEUR) 4.6% Norway parking contract termination fee 0.4 moved from OPEX to Other income and expenses Service charge and parking reconciliations 0.7 Total 1.1 Q2/2022 Q1-Q2/2022 LFL NRI LFL NRI (excluding o
Slide 13: Net Rental Income and EPRA Earnings Bridge Q2/2021 to Q2/2022
NET RENTAL INCOME AND EPRA EARNINGS BRIDGE Q2/2021 TO Q2/2022 NET RENTAL INCOME BRIDGE 3.4 2.4 50.8 52.8 -3.3 -0.5 Q2/2021 Like-for-like properties (Re)development projects Divestments Other (incl. exchange Q2/2022 rate differences) EPRA EARNINGS BRIDGE 0.0 32.7 0.5 -0.3 32.2 2.0 -2.7 Q2/2021 Net re
Slide 14: Net Rental Income and EPRA Earnings Bridge Q1-Q2/2021 to Q1-Q2/2022
NET RENTAL INCOME AND EPRA EARNINGS BRIDGE Q1-Q2/2021 TO Q1-Q2/2022 NET RENTAL INCOME BRIDGE 3.9 4.5 101.2 101.8 -7.7 -0.1 Q1-Q2/2021 Like-for-like properties (Re)development projects Divestments Other (incl. exchange Q1-Q2/2022 rate differences) EPRA EARNINGS BRIDGE 1.7 0.6 64.3 -2.6 -0.6 60.3 -3.1
Slide 15: Portfolio Valuations Increased
PORTFOLIO VALUATIONS INCREASED EPRA NRV PER SHARE +1.8% vs. Q2/2021 FAIR VALUE CHANGES, MEUR Q2/2022 Q2/2021 Q1-Q2/2022 Q1-Q2/2021 Finland & Estonia 3.5 3.4 11.1 6.6 Norway 0.4 9.8 8.3 8.5 • Operating properties Sweden & Denmark 5.9 4.2 6.2 12.3 recorded sixth Investment properties. total 9.8 17.4 2
Slide 16: Strategic Bond Repurchases
STRATEGIC BOND REPURCHASES • Continually evaluating opportunities to recycle capital from asset sales and strengthen balance sheet • Seeking appropriate risk-adjusted returns to our cost of capital • Credit market dislocation has provided compelling investment opportunities • In Q2/2022, repurchased
Slide 17: Strong and Flexible Balance Sheet with Ample Liquidity
STRONG AND FLEXIBLE BALANCE SHEET WITH AMPLE LIQUIDITY IMPROVED CREDIT PROFILE AND A STRONGER, MORE FLEXIBLE BALANCE SHEET Total available liquidity 534 MEUR • No material maturities thru 2024 41% 43% • 3.7 years weighted avg maturities • 2.44% weighted avg interest rate 16% Unencumbered assets Bond
Slide 18: Stable Credit Metrics
STABLE CREDIT METRICS LOAN TO VALUE (IFRS) INTEREST COVERAGE RATIO 48.7 % 46.9 % 4.2x 4.1x 4.1x 4.1x 42.4 % 3.8x 40.3 % 40.8 % 2018 2019 2020 2021 Q2/2022 2018 2019 2020 2021 Q2/2022 NET DEBT TO EBITDA WEIGHTED AVERAGE INTEREST RATE 11.2x 11.1x 2.39% 2.47% 2.44% 2.35% 2.29% 10.0x 10.0x 9.2x 2018 201
Slide 19: Outlook for 2022 (H1/2022)
OUTLOOK FOR 2022 (H1/2022) Current Midpoint Initial Midpoint Previous % change (10 August change vs (17 February change vs. (5 May 2022) vs. initial 2022) previous 2022) initial Direct operating profit (MEUR) 170–180 168–180 164–180 +1 +3 2% (Midpoint) (175) (174) (172) EPRA Earnings per share 0.68–
Slide 20: Q&A Q2 2022 Audiocast
19 Q2.2022 | Audiocast CICITYCON
Slide 21: Bret McLeod, Sakari Järvelä – citycon.com
BRET MCLEOD SAKARI JÄRVELÄ Chief Financial Officer VP, Corporate Finance and Investor Relations +46 73 326 8455 +358 50 387 8180 [email protected] [email protected] CITYCON.COM 20 Q2 2022 I Audiocast