Healthy Operational Performance

Transcription

1 Healthy Operational Performance Half-Year Financial Report 2018 Technopolis Plc Keith Silverang, CEO

2 Key Messages on First Half 2o18 Like-for-like net sales and EBITDA up 3.4% and 4.4%, respectively Occupancy rates continued to rise year-on-year Service business remains on growth path First half profitability affected by: UMA ramp-up costs Non-recurring items related to terminated acquisition case Change in real estate tax accounting - no full-year effect Fair values up by EUR 19.7 million in first half Strategy implementation progressing three new UMAs to be opened this year two new organic growth projects announced today 2

3 Key Financials

4 Healthy Like-for-Like Growth Group net sales development EUR m Group EBITDA and EBITDA margin EUR m, % LFL +3.4% LFL +4.4% 53.7% 60% 55% % % -5.3% 45% /17 1-6/ /17 1-6/18 40% Property income Service income EBITDA Margin-% FX changes decreased net sales by EUR 1.3 (+1.1) million On a constant currency basis net sales were down 1.7% FX changes decreased EBITDA by EUR 0.9 (+0.8) million On a constant currency basis, EBITDA declined by 3.6% and EBITDA margin was 53.5%. 4

5 Financial Occupancy Was 95.9% Financial Occupancy Rate, Group % % 94.2% Jun/2018 Group 10-yr average 5

6 Rising Domestic Occupancy Is the Driver FOCR by Business Unit % 105 Finland Average: 94.9 (93.2)% Scandinavia Average: 95.2 (94.9)% Baltic Rim Average: 98.9 (98.3)% HMA Kuopio Oulu Tampere Gothenburg Oslo St. Petersburg Tallinn Vilnius June '17 June '18 Group average at the period end was 95.9 (94.4)%. Decline in Gothenburg was due to expiry of rental guarantee 6

7 Service Growth Continues, UMA Ramp-Up Burdens Profitability Service Income EUR m % 13.8 Service Penetration in 1-6/18 * % Service income as % of Group net sales 15.9% Service EBITDA and EBITDA Margin EUR m, % Excl. UMA 18.8% +5.6% 12.3% % 10% 5% /17 1-6/18 * Service Income s share in Group net sales '17 1-6'18 EBITDA Margin-% 0% Service income grew in all but one business unit 7 Service penetration in Q2 18 was 17.0% Best-performing units show service penetration above 20% The decline in EBITDA-margin was due to approximately EUR 1 million of ramp-up cost related to UMA coworking sites in January June Excluding UMA, the service EBITDA margin was 18.8%.

8 Seasonal Fluctuations in Services Quarterly Service Income and EBITDA Margin EUR m, % Quarterly Property Income and EBITDA margin EUR m, % 10 25% % % 15% % 60% 4 10% 20 40% 2 5% 10 20% 0 0% Q1'16Q2'16Q3'16Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Service Income EBITDA margin-% EBITDA-margin excl. UMA 0 Q1'16Q2'16Q3'16Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Property Income EBITDA margin-% 0% 8

9 Fair Values Up, Mainly from Yield Compression Fair Value of Investment Properties EUR m Breakdown of Fair Value by Segment % 1,600 1,580 EUR million 1,570.7 Scandinavia 21% 1,560 1,540 1,520 1, Finland 56% 1,500 Baltic Rim 23% Yield compression increased fair values the most Fair value of investment properties in balance sheet positively affected by completions of properties in Baltic Rim -area Finland s share declined from 61% to 56% from the previous year 9

10 Strong Balance Sheet 30 Jun'18 30 Jun'17 Change, % 31 Dec'17 Change, % Balance sheet total EURm 1, , , Interest-bearing debt EURm Cash and equivalents EURm Average loan maturity yrs Loan-to-value (LTV) % Equity ratio % Solvency ratio % Secured solvency ratio % Unencumbered asset ratio % Interest coverage multiple The EUR 75.0 million hybrid loan redeemed on March 26 Dividend payment & equity repayment totaling EUR 26.7 million booked in March, pay out on April 4 10

11 Strategy Implementation

12 EUR 133 Million in Organic Projects in Progress Area Name Pre-let rate,% Rentable area, m² Total investment, EUR m Stabilized yield, % 1) Completion Helsinki Ruoholahti , /2018 Tallinn Lõõtsa , /2018 Vantaa Aviapolis Bldg H 4.9 5, /2018 Tampere City Center , /2019 Oulu City Center II 0.0 8, /2020 TOTAL in progress 46, ) Stabilized yield = estimated net operating income / cost On top of the above, nine more projects under design Most of these extensions of our existing campuses are being driven by growth of our existing customers Of the EUR million to be allocated to organic growth projects during the strategy period, projects worth EUR million were either in progress or completed at the end of June,

13 New Launches Announced in Tampere and Kuopio, Finland City Center, phase II Tampere, Finland Microkatu, Phase 8 Kuopio, Finland Projected: 27.2 Investment, EURm 7.8 StabilizedYield *, % Projected: 12.1 Investment, EURm 10.4 StabilizedYield *, % GLA: 7,300 m 2 Pre-let rate: 0% Target: LEED Gold certification Construction: 9/2018 7/2020 GLA: 6,800 m 2 Pre-let rate: 66.6% Target: LEED Gold certification Construction: 8/2018 8/2019 * Stabilized yield = estimated net operating income / cost 13

14 Three More UMAs Set to Open in 2018 UMA Vestergade Copenhagen UMA Teurastamo Helsinki UMA Oslo City Oslo Two UMAs up and running: one in Helsinki and another one in Stockholm Three more set to open this year Set to open in September 2018 To be located in the very center of the city next to Strøget, the main shopping street Built into a leased 1,950 m 2 space 33 private offices, 60 hot desks and 5 shared conference rooms Set to open in December 2018 Situated in Helsinki s trendy and urban Kalasatama region Around 1,700 m 2 38 private offices, 60 hot desks, 4 shared conference rooms Set to open in December 2018 Excellent location close to Central Station, Oslo City shopping mall, restaurants, cafeterias, retail, etc. Around 3,000 m 2 42 private offices, over 100 hot desks and 4 shared conference rooms UMA Vestergade Copenhagen 14

15 Outlook

16 Macro Economic Tailwind Expected to Continue % Finland Norway Sweden Estonia Lithuania Russia GDP growth forecast Y-o-y change ' Y-o-y change ' CPI growth forecast Y-o-y change ' Y-o-y change ' Source: OECD, May

17 Guidance unchanged: Technopolis estimates that the Group Net sales in 2018 will be at the same level as it was in The company expects the Group EBITDA to remain at the same level as in 2017, or slightly below. The estimates take into account the divestiture of the operations in Jyväskylä, Finland in late The negative effect of the Jyväskylä divestitures on Group Net sales and EBITDA, on an annual level, are approximately EUR 14.5 million and EUR 7.2 million, respectively. Furthermore, the estimate takes into account the company s view on the planned completion of organic growth projects in progress, as well as its view on economic developments in each Technopolis market, and the development of the company s occupancy and rental rates.

18 ThankYou! Time for questions.

19 APPENDICES Detailed Financial Information

20 Maturities Extended Through Refinancing Agreement Maturity Profile of IB Debt, EUR million Majority of the loans maturing this year, is a NOK denominated secured bank loan refinancing on-going EUR 150 million bond maturing in May 2020, callable since May

21 Loan Portfolio Well Covered for Interest Rate Risk Interest-Bearing Liabilities, June 30, 2018 Total EUR (887.4) million Bank Loans Unsecured Senior Bond Commercial Papers Financial Leases Other The average interest rate on interest-bearing liabilities was 2.39%. The average interest interest fixing period was 4.2 (4.7) years. Hedge ratio 52.0 (64.7)%

22 Segment information: Finland Finland Q2/ 2018 Q2/ 2017 Change % Jan-Jun/ 2018 Jan-Jun/ 2017 Change % Net sales, EURm Property income, EURm Service income, EURm EBITDA, EURm EBITDA-% Fair value of investment properties, EURm * Number of campuses * Rentable area, m 2 * , , ,000 Average rent, EUR/m 2 /month * Financial occupancy rate, % * Market yield requirement, average, % * * At the end of the period. Note: 6/18: 8,000 m 2 under renovation, 6/17: 10,100 m 2 under renovation.

23 Segment information: Baltic Rim Baltic Rim Q2/ 2018 Q2/ 2017 Change % Jan-Jun/ 2018 Jan-Jun/ 2017 Change % Net sales, EURm Property income, EURm Service income, EURm EBITDA, EURm EBITDA-% Fair value of investment properties, EURm * Number of campuses * Rentable area, m 2 * , , ,000 Average rent, EUR/m 2 /month * Financial occupancy rate, % * Market yield requirement, average, % * * At the end of the period. Note: 6/18: 0 m 2 under renovation, 6/17: 0 m 2 under renovation.

24 Segment information: Scandinavia Scandinavia Q2/ 2018 Q2/ 2017 Change % Jan-Jun/ 2018 Jan-Jun/ 2017 Change % Net sales, EURm Property income, EURm Service income, EURm EBITDA, EURm EBITDA-% Fair value of investment properties, EURm * Number of campuses * Rentable area, m 2 * , , ,900 Average rent, EUR/m 2 /month * Financial occupancy rate, % * Market yield requirement, average, % * * At the end of the period. Note: 6/ m 2 under renovation, 6/17: 0 m 2 under renovation.

25 Changes in Fair Values Changes in Fair Values, January-March 2018 EURm EURm Yield requirement Occupancy assumption Modernization Other changes Projects in progress Finland Baltic Rim Scandinavia TOTAL Total * Other changes include changes in projected market rents, operating expenses, and exchange rates, as well as in inflation assumptions. 25

26 Lease Stock and Customer Base Lease stock, % of space Maturity, years Jun 30, 2018 March 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 < > Open-ended leases Average lease term in months Lease stock, EUR million A total of approximately 1,600 customers and 3,100 lease agreements The ten largest customers let approximately 22.8% of rented space and the single largest customer 4.4% In January June, the ten largest customers accounted for 20.9% of rental income and the single largest customer 5.3% 26

27 Share Information: Trading Share trading Q2/ 2018 Q2/ 2017 Change % Jan Jun, 2018 Jan Jun, 2017 Change % 2017 Lowest price, EUR Highest price, EUR Closing price (end of period), EUR Volume weighted average price, EUR Share turnover, million shares Share turnover, EURm Market capitalization (end of period), EURm

28 Share Information: Largest Shareholders * on June 30, 2018 # of shares % of shares Varma Mutual Pension Insurance Company 30,232, Mercator Capital AB 24,574, City of Oulu 3,917, Laakkonen Mikko 2,139, Technopolis Plc 1,878, The Finnish Cultural Foundation 1,782, Jenny and Antti Wihuri s Foundation 1,107, Etola Erkki 865, Tapiola Keskinäinen Henkivakuutusyhtiö 742, Jyrki Hallikainen 614, largest shareholders, total 67,853, Foreign and nominee registered, total 56,662, Others, total 34,277, Total amount of shares 158,793, * Not including nominee-registered shareholders

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