A Solid Start to the Year

Transcription

1 A Solid Start to the Year Q1/2018 Results Technopolis Plc Keith Silverang, CEO

2 Key Messages on Q1/2o18 Comparable net sales and EBITDA up over 5%, year-on-year Occupancy rates continued to rise Service business continues on a growth path Rental growth also had a positive effect on Group net sales ~90% of rental agreements tied to CPI development Refinancing agreement extended maturity profile and freed assets from pledges New UMA opened in Stockholm earlier this week, another one set to open in Copenhagen in September * Comparable = excluding Jyväskylä divestiture in

3 Key Financials

4 Healthy Comparable Growth y-o-y Group net sales development EUR m Group EBITDA and EBITDA margin EUR m, % Comparable * +5.3% Comparable * +5.2% 53.7% 60% 55% % % 50% % Q1'17 Q1' Q1'17 Q1'18 40% Property income Service income EBITDA Margin-% FX changes decreased net sales by EUR 0.7 (+0.8) million On a constant currency basis net sales were down 1.5% FX changes decreased EBITDA by EUR 0.5 (+0.6) million On a constant currency basis, EBITDA declined by 0.3%, and EBITDA margin was 53.9%. * Comparable = excluding Jyväskylä divestiture in

5 Financial Occupancy Was 95.8% Financial Occupancy Rate, Group % % 94.2% Q1/2018 Group 10-yr average 5

6 Occupancy Up by 2.3 Percentage Points y-o-y FOCR by Business Unit % Finland Average: 95.0 (91.3)% Scandinavia Average: 93.9 (95.48)% Baltic Rim Average: 99.7 (99.3)% HMA Kuopio Oulu Tampere Gothenburg Oslo St. Petersburg Tallinn Vilnius March '17 March '18 Group average at the period end was 95.8 (93.5)%. Decline in Gothenburg was due to expiry of rental guarantee 6

7 Service Growth Continues Service Income EUR m Service Penetration in Q1/18 * % Service EBITDA and EBITDA Margin EUR m, % Comparable * +14.8% % 6.3 Service income as % of Group net sales 14.7% % +43.6% % 15% 10% 5% Q1'17 Q1'18 * Service Income s share in Group net sales Q1'17 Q1'18 EBITDA Margin-% 0% Service income grew or stayed at the previous year s level in all business units * Comparable = excluding Jyväskylä divestiture in Service penetration in Q1 18 was 14.7% Best-performing units show service penetration figures above 20% Margin improvement through scale benefits i.e. higher service income and growth in more profitable services, as well as price increases of some services Service EBITDA included ramp-up costs of EUR 0.1 million of UMA Kungsbron

8 Quarterly View on Business 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 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Service Income EBITDA margin-% 0% 0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 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 % 1,580 1,560 1,540 1,520 1, EUR +9.7 million ,558.3 Scandinavia 21% Finland 57% 1,500 Baltic Rim 22% 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 57% from previous year 9

10 Balance Sheet & Funding Sami Laine, CFO

11 Strong Balance Sheet Supports Strategy Implementation 31 Mar '18 31 Mar '17 Change, % 31 Dec '17 Change, % Balance sheet total EURm 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 Unencumbered asset ratio improved following the refinancing agreement 11

12 Refinancing Agreement Signed in March A five-year EUR 518 million refinancing agreement An extension option of up to two years The package consists of four secured facilities: a EUR 150 million term loan facility for refinancing existing debt, a EUR 100 million committed capex facility, a EUR 100 million committed revolving credit facility and a EUR 168 million guarantee facility. The agreement includes customary financial covenants that are based on: equity ratio above 30%, an LTV below 65% and an interest coverage ratio above

13 Maturities Extended Through New Refinancing Agreement Maturity Profile of IB Debt, EUR million EUR 150 million unsecured bond (maturity in 2020), callable in May

14 Loan Portfolio Well Covered for Interest Rate Risk Interest-Bearing Liabilities, March 31, 2018 Total EUR (889.5) million Bank Loans Unsecured Senior Bond Commercial Papers Financial Leases Other The average interest rate on interest-bearing liabilities was 2.43%. The average interest interest fixing period was 4.7 (4.8) years. Hedge ratio 56.3 (67.8)%

15 Strategy Implementation

16 Nearly EUR 140 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 Vilnius 2) Penta , ) /2017 Vantaa Aviapolis Bldg H 4.9 5, /2018 Tampere City Center , /2019 TOTAL in progress 52, ) Stabilized yield = estimated net operating income / cost 2) Total investment including also the neighboring land plot with an expansion potential of at least 20,000 m 2 On top of the above, 10 more projects under design Most of these extensions of our existing campuses are being driven by growth of our existing customers While we expect the pipeline to be growing, we are looking at each case rigorously and will launch when market conditions allow and our strict investment criteria are met. 16

17 We Are Expanding UMA Network UMA Vestergade New flagship UMA in Stockholm was opened earlier this week Another new one is set to open in Copenhagen in September - It will be located in the very center of the city next to Strøget, the main shopping street and the City Hall The space will be named UMA Vestergade 17 October 31, 2017 Q3 Interim Report, 2017 Keith Silverang, CEO

18 Outlook

19 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, November

20 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.

21 ThankYou! Time for questions.

22 APPENDICES Detailed Financial Information

23 Segment information: Finland Finland Q1/ 2018 Q1/ 2017 Change % Net sales EURm Property income EURm Service income EURm EBITDA EURm EBITDA margin % Fair value of investment properties * EURm Number of campuses * Rentable area * m Average rent * EUR/m 2 /month Financial occupancy rate * % Market yield requirement, average * % * At the end of the period. Note: 3/18: 7,100 m2 under renovation, 3/17: 10,350 m2 under renovation.

24 Segment information: Baltic Rim Finland Q1/ 2018 Q1/ 2017 Change % Net sales EURm Property income EURm Service income EURm EBITDA EURm EBITDA margin % Fair value of investment properties * EURm Number of campuses * Rentable area * m Average rent * EUR/m 2 /month Financial occupancy rate * % Market yield requirement, average * % * At the end of the period. Note: 3/18: 5,500 m2 under renovation, 3/17: 2,900 m2 under renovation.

25 Segment information: Scandinavia Finland Q1/ 2018 Q1/ 2017 Change % Net sales EURm Property income EURm Service income EURm EBITDA EURm EBITDA margin % Fair value of investment properties * EURm Number of campuses * Rentable area * m Average rent * EUR/m 2 /month Financial occupancy rate * % Market yield requirement, average * % * At the end of the period. Note: 3/18: 0,00 m2 under renovation, 3/17: 2,800 m2 under renovation.

26 Changes in Fair Values Changes in Fair Values, January-March 2018 EURm EURm Yield requirement Occupancy assumption Modernization Other changes Projects in progress Total Finland Baltic Rim Scandinavia TOTAL * Other changes include changes in market rents, operating expenses, as well as other allocations. 26

27 Lease Stock and Customer Base Lease stock, % of space Maturity, years March 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 < > Open-ended leases Average lease term in months Lease stock, EUR million A total of approximately 1,600 customers and 3,000 lease agreements The ten largest customers let approximately 22.9% of rented space and the single largest customer 4.4% In January Mach, the ten largest customers accounted for 20.9% of rental income and the single largest customer 5.2% 27

28 Share Information: Trading Share trading Q1/ 2018 Q1/ 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 * Market capitalization is based on 158,793,662 shares. Source: Nasdaq Helsinki 28

29 Share Information: Largest Shareholders * on March 31, 2018 # of shares % of shares Varma Mutual Pension Insurance Company 30,232, Mercator Capital AB (former Olofsgård Invest AB) 24,574, City of Oulu 3,917, Laakkonen Mikko 2,139, Technopolis Plc 1,903, The Finnish Cultural Foundation 1,782, Jenny and Antti Wihuri s Foundation 1,107, Etola Erkki 865, Jyrki Hallikainen and company 752, City of Vantaa 600, largest shareholders, total 67,874, Foreign and nominee registered, total 57,339, Others, total 33,813, Total amount of shares 158,793, * Not including nominee-registered shareholders

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