Technopolis Q1 2015 Interim Report Presentation
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- Net sales were up 3.8% in Q1/2015 compared to the previous year and EBITDA was up 7.9%. EBITDA margin increased to 53.9% from 51.9%. - Service revenues increased 13.9% year-over-year and occupancy remained strong at 93.8%. - The company has projects in progress totaling EUR 109.7 million, including a new development in Vilnius with a pre-let rate of 48% and estimated completion in December 2016.
Technopolis Q1 2015 Interim Report Presentation
- 1. Results for Q1/2015 May 7, 2015
- 2. 7.5.2015 2 A Solid 1st Quarter Net sales up 3.8% & EBITDA up 7.9% EBITDA margin at 53.9 (51.9)% EPRA Direct result stable at EUR 12.7 (12.8) million Service revenues up 13.9% Occupancy remained strong at 93.8 (94.0)% Equity ratio at 37.7%, & LTV at 59.1%
- 3. 7.5.2015 3 Service Sales – On the RightTrack 70,3 80,7 93 111,1 144,8 36,3 11,2 12,1 14,2 15,2 16,9 4,6 13,7% 13,0% 13,2% 12,0% 10,4% 11,2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 0 50 100 150 200 2010 2011 2012 2013 2014 Q1/2015 Service revenues Rental revenues Share of net sales EUR MILLION
- 4. 7.5.2015 4 Group Financial Occupancy – Holding UpWell 80% 85% 90% 95% 100% 10Yr. Avg. 94.9% Q1/15 93.8%
- 5. 7.5.2015 5 Occupancy – Good Development in International 95,0% 87,6% 95,8% 99,7% 94,5% 92,8% 96,2% 98,4% 99,2% 91,0% 91,2% 89,7% 96,2% 97,2% 91,8% 95,9% 99,6% 100,0% 99,6% 81,3% 80% 85% 90% 95% 100% Q1-2014 Q1-2015
- 6. 7.5.2015 6 Area Name m² EUR million Stabilized yield, % Financial OCR/ Pre -OCR, % Completion Tallinn Löötsa 8A 7,500 11.8 9.1 98.6 9/2014 St. Petersburg Pulkovo 2 18,700 42.0 12.6 99.2 9/2014 Tallinn Löötsa 5 9,200 17.0 8.8 48.5 10/2015 HMA Vantaa G 5,300 18.3 8.0 72.9 9/2015 Tampere Yliopist. 3&4 11,900 39.0 7.2 32.6 3/2016 Vilnius Delta 21,600 35.4 9.8 48 12/2016 Investments – Pre-lets Increased Projects in progress total of EUR 109.7 million Capital expenditure in the first quarter was EUR 8.6 million of which renovations and modernizations were EUR 0.8 million Note: As of May 6, 2015. Projects in grey are not completed i.e. financial occupancy is pre-let rate
- 7. 77.5.2015 ALFA. GLA: 8.730 m2 Parking: 244 sp. BETA. GLA: 22.370 m2 Parking: 679 sp. GAMA. GLA: 10.570 m2 Parking: 362 sp. NEW DEVELOPMENT DELTA GLA: ~21.640 m2 Parking: 390 sp. 1234 Neighbouring services 1 32 1 2 34 1 3 2 Siemens Arena Vichy Aquapark Ozas Shopping Centre Vilnius – Delta Project Reaching Scale Technopolis Ozas Campus Buildings
- 8. 87.5.2015 Delta in Brief Pre-let rate of 48% and the largest agreement covering 10 years Rentable space of 21,600 m² and parking for 390 cars Investment of EUR 35.4 million Initial yield 7.8% and stabilized 9.8% - market yield requirement at 7.9% Estimated end of construction 12/2016 and first rents in 01/2017
- 9. 7.5.2015 9 Financing – Hedging Up, Margins Down Q1/2015 2014 2013 Average interest rate, % 2.35 2.43 2.46 Capital weighted loan maturity, years 6.1 6.1 7.0 Interest bearing debt, EUR million 852,4 841.9 861.9 Fixed rate, % 61.1 60.0 49.7 Hedging ratio, % 58.5 57.4 46.5 Fixing period, years 2.7 2.7 2.2 Interest cover ratio, % 5.5 4.8 5.3 Loan to value, % 59.1 59.7 59.5 Maturing loans, next 12 mo. EUR million 166.9 182.2 145.6 Untapped credit lines, EUR million 135.3 156.5 87.5
- 10. 7.5.2015 10 Expansion Strategy – Headed for Hansa Fair Values 20% 17% 15% 13% 8% 8% 8% 5% 5% 1% HMA Oulu Oslo Tampere Kuopio Jyväskylä Tallinn Vilnius St. Petersburg Lappeenranta % of fair values in March 31, 2015
- 11. 7.5.2015 11 Looking Ahead – Stable Outlook 2015 growth guidance y/y: Net sales and EBITDA to be at the same level or slightly higher than in 2014 Guidance is subject to foreign exchange changes, acquisitions and divestitures
- 13. 7.5.2015 13 Finland – Home Market Q1/2015 2014 2013 Rentable space, m² 542,000 543,200 555,900 Rent, €/m²/mo. avg. 17.08 16.79 16.21 Financial occupancy rate, % 92.2 93.7 92.9 Net rental income, EUR million 26.3 103.3 94.9 Net sales, EUR million 30.4 118.6 109.4 EBITDA, EUR million 15.4 62.6 56,1 Market yield requirement, % 7.9 7.9 7.9 Fair value of investment properties, EUR million 958.8 951.9 981.0
- 14. 7.5.2015 14 Baltic Rim – Growth Market Q1/2015 2014 2013 Rentable space, m² 139,100 135,800 119,500 Rent, €/m²/mo. avg.*) 14.26 14.00 15.04 Financial occupancy rate, % 99.7 98.4 99.1 Net rental income, EUR million 6.0 23.6 15.3 Net sales, EUR million 6.3 24.9 15.9 EBITDA, EUR million 4.2 13.4 7.6 Market yield requirement, % 8.9 8.7 9.0 Fair value of investment properties, EUR million 242.3 224.7 212.4 *) Decreased due to depreciated ruble – in local currencies rent level was up. Like-for-like rents in St. Petersburg 23.4% y/y
- 15. 7.5.2015 15 Scandinavia – Mature Market with Growth Q1/2015 2014 2013 *) Rentable space, m² 63,500 63,000 71,400 Rent, €/m²/mo. avg. 22.61 22.03 21.16 Financial occupancy rate, % 96.2 95.6 89.5 Net rental income, EUR million 4.4 18.0 1.0 Net sales, EUR million 4.5 18.2 1.0 EBITDA, EUR million 2.6 12.0 0.6 Market yield requirement, % 6.3 6.4 6.5 Fair value of investment properties, EUR million 209.9 201.8 217.0 *) December 11-31, 2013
- 16. 7.5.2015 16 Customers – A Healthy Mix Customer Segments Nordic Semiconductor to Peltola campus in Oulu Tampere University ofApplied Science took 3,200 from Mediapolis inTampere Playtech signed 3,000 m² deal in Tallinn Western Union signed 10,000 m² deal inVilnius Gazprom took over 5,000 m² in St. Pete Customer Highlights % of rentable space in Dec 31, 2014 24% 16% 11%10% 8% 16% 7% 4% 3% ICT Professional Services Manufacturing Wholesail and Retail Education Other Financial Services Food Services Public Sector
- 17. 7.5.2015 17 Leases – Maturities Bring Flexibility Lease stock, % of space Maturity in years Q1/2015 2014 2013 <1 21 17 22 1-3 22 23 22 3-5 10 12 13 >5 22 22 26 Open-end leases 25 26 17 Av. Maturities in Mo 38 39 35 Lease stock, EUR million 452.2 455.9 470.5 20 largest customers leased approximately 29.7% of the company’s rented space on March 31, 2015
- 18. 7.5.2015 18 EPRA and Real Estate – Steady Growth EPRA-based and Real Estate Indicators 2010 2011 2012 2013 2014 Q1/2015 Direct result, EUR million 20.9 24.6 29.9 40.5 55.9 12.7 Increase, y/y -3.3% 17.6% 17.2% 35.6 38.1 -0.6 EPS (from direct result, undiluted) 0.29 0.34 0.38 0.47 0.53 0.12 Net asset value/share, EUR 4.52 5.10 5.12 4.94 4.52 4.47 Financial occupancy rate, % 94.4 95.1 95.3 93.6 94.7 93.8 Net rental yield, % 7.7 7.8 7.8 7.6 7.5 7.8 Rentable area, m² 527,800 576,900 644,300 746,800 742,000 744,600 Increase, y/y 16.4% 9.3% 11.7% 15.9% -0.01% - Fair value of competed investment properties, EUR million 727.7 843.8 956.5 1,410.4 1,378.4 1,410.9 Fair value changes, EUR million 2.7 26.3 -5.7 -17.6 -40.5 -5.9
- 19. 7.5.2015 19 IFRS Figures –Valuation Effects Summary of Income Statement, EUR million 2010 2011 2012 2013 2014 Q1/2015 Net sales 81.2 92.8 107.3 126.3 161.7 41.2 Other operating income 1.6 1.2 1.7 2.0 0.5 0.0 EBITDA 41.4 47.5 55.8 64.1 87.2 22.2 Operating profit 43.0 72.0 48.0 43.9 42.9 15.3 Profit before taxes 33.6 60.0 34.5 22.6 0.6 10.2 Net profit for the year attributable to parent company shareholders 23.3 46.7 25.8 28.8 -11.7 7.9 Summary of Balance Sheet, EUR million 2010 2011 2012 2013 2014 Q1/2015 Total assets 827.6 962.9 1,082.7 1,560.3 1,502.9 1,532.1 Cash and bank 4.5 12.5 15.7 54.1 28.3 29.3 Shareholders’ equity 307.6 343.2 389.5 624.3 575.6 547.8 Interest-bearing liabilities 457.9 547.7 608.1 861.9 841.9 852,4 Key Indicators and Financial Ratios 2010 2011 2012 2013 2014 Q1/2015 EBITDA/net sales, % 51.0 51.2 51.9 50.8 53.9 53.9 Dividend/share, EUR 0.15 0.17 0.18 0.10 0.15 n/a Share price, December 31 4.08 3.35 3.57 4.35 3.70 n/a Return on equity (ROE), % 8.2 15.0 7,4 6.2 -0.5 n/a Return on investment (ROI), % 6.2 9.0 5.5 3.6 3.3 n/a Net debt/equity (gearing), % 147.4 156.0 152.1 129.4 141.4 143.4 Employees in Group companies, average 135 158 178 187 214 221
- 20. 7.5.2015 20 Changes in FairValues – Slightly Negative In Q1/2015 fair values were negative 0f EUR 5.9 million EUR -11.4 million from renovations: Quality space is a competitive advantage Market Yield Related Occupancy Assumption Renovations Projects in Progress Total Finland -2.8 0.1 -7.0 -1.1 -10.8 Baltic Rim -0.2 - 0.1 5.0 4.9 Scandinavia 2.3 2.2 -4.5 - - Total -0.7 2.3 -11.4 3.9 -5.9 Changes in EUR million
- 21. 217.5.2015 Investment Criteria – Cash Flow Driven Good quality, flexible buildings in good shape Excellent location with good transportation links Critical mass, at least in the 50,000 m² range Additional building rights to allow expansion Good customer mix or the potential to create it Generates good cash flow Reasonable yield generating positive EPS impact
- 22. 7.5.2015 22 EBITDA, Net Sales & Rentable Space m²EUR Million Net Sales & EBITDA 2015 are analysts’ consensus estimates Rentable space from year-end 2014 to 2015 is assumed to be fixed 0 100000 200000 300000 400000 500000 600000 700000 800000 0 20 40 60 80 100 120 140 160 180 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Rentable space Net Sales EBITDA
- 23. 7.5.2015 23 EBITDA and EBITDA-% EBITDA-% turned upward in 2014 Market expects trend to continue 63,7% 50,3% 55,9% 0,0% 10,0% 20,0% 30,0% 40,0% 50,0% 60,0% 70,0% 0,00 20,00 40,00 60,00 80,00 100,00 120,00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e EBITDA EBITDA-%
- 24. 7.5.2015 24 Strategic FinancialTargets 2015–2017 Company’s goal is to grow in the Nordics and Baltic Rim and in service business Net sales and EBITDA growth 15% on average per annum EPRA-based annual ROCE *) of at least 6% Equity ratio at or above 35% over the cycle *) Calculated by EPRA-based operating profit Dividend policy: distribute on average one third of its EPRA- based direct result annually
- 25. 7.5.2015 25 April 30, 2015 # of shares % of shares Varma Mutual Pension 25,448,192 23.9 Ilmarinen Mutual Pension 11,089,647 10.4 City of Oulu 3,511,211 3.3 OP-Pohjola Group 1,684,033 1.6 Jyrki Hallikainen/Kickoff Oy 1,233,236 1.2 Laakkonen Mikko 1,226,184 1.2 The Finnish Cultural Foundation 1,188,042 1.1 Odin Finland 1,119,944 1.1 Sijoitusrahasto Evli Suomi Pienyhtiöt 831,994 0.8 Jenny and AnttiWihuri Foundation 738,398 0.7 10 largest shareholders, total 48,070,881 45.1 Foreign shareholders, total 37,176,466 34.9 Others, total 21,264,285 20.0 Total amount of shares 106,511,632 100 Shareholders – Almost 35% Foreign