In the first quarter of 2014 EPRA-based (European Public Real Estate Association) the direct result rose by 56.0% from 8.0 million euros to 12.8 million euros compared to 2013. The direct result per share rose from 0.10 euros to 0.12 euros. Net sales rose 33.5% from 29.7 million euros to 39.7 million euros and EBITDA by 47% from 14.0 million euros to 20.6 million euros.
2. Q1 Highlights
โข Net sales grew 33.5% and EBITDA 47.2%
โข EPRA Operating result rose 56%
โข Occupancy solid at 94%
โข Scale advantages as revenue growth outstripping costs:
โ Real estate maintenance costs up 28.2%
โ Admin costs up 27.6%
โข Solid balance sheet: Equity ratio 40.1% and LTV 58.5%
โข St. Pete: 4.5% of net sales, 2.9% of EBITDA, 5% of fair values
โข Focus on consolidation and costs
3. Key Figures
Financials Q1/2014 Q1/2013 ฮ, % 2013
Net sales, EUR million 39.7 29.7 33.5 126,3
EBITDA, EUR million 20.6 14.0 47.2 64,1
Unrealized foreign exchange losses, EUR million -3.2 0.4 - -5.7
Direct result (EPRA), EUR million 12.8 8.0 56.0 40.5
Operating profit, EUR million 20.7 16.7 24.3 43,9
Real Estate Operations
Financial occupancy rate, % 94.0 92.2 +1.8 93.6
Net rental yield, % 7.2 7.2 - 7.3
Rentable space, 1 000 mยฒ 738,000 601,300 22.7 746,800
5. Market Segments by Fair Value
35%
22%
12%
11%
11%
4%
5%
18%
19%
13%8%
8%
2%
6%
7%
4%
15%
Oulu HMA Tampere
Kuopio Jyvรคskylรค Lappeenranta
St. Petersburg Tallinn Vilnius
Oslo
March 31, 2010 March 31, 2014
6. Market Segments by Net Sales
March 31, 2010 March 31, 2014
22%
16%
14%10%
9%
3%
4%
6%
5%
11%
Oulu HMA Tampere
Kuopio Jyvรคskylรค Lappeenranta
St. Petersburg Tallinn Vilnius
Oslo
37%
23%
8%
12%
12%
6% 2%
7. Customer Segments
March 31, 2010 March 31, 2014
18%
24%
5%
25%
15%
13%
Electronics ICT
Life science Other
Services Public Sector
14%
21%
3%7%
7%
3%
6%
8%
10%
21%
Professional Services ICT
Public Sector Real Estate
Education Food Services
Financial Services Manufacturing
Wholesale and Retail Other
8. Equity and Debt - Ratios
โข Solid balance sheet with equity ratio of 40.1%
โข Average interest rate 2.52% (2.12%)
1,95
2,07
2,08
2,46
2,52
5
5,5
5,6
5,3
4,6
4
5
6
1,5
2,0
2,5
3,0
Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014
Average interest rate Interest cover ratio
40,1
39,3 39,4
40,2
40,1
57,5
57,8
57,2
59,5
58,5
56
57
58
59
60
61
62
63
64
35
37
39
41
Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014
Equity ratio Loan to value
Loan to Value and Equity Ratio Interest Rate and Interest Coverage Ratio
10. Looking Ahead
โข 2014 growth guidance y/y unchanged:
โ Net sales 27%-32%
โ EBITDA 35%-40%
โข International investments in 2013 will bring international
revenues close to our strategic target
โข Focus on integration and business basics
โข Occupancy challenges in a couple of campuses
โข The companyโs solvency and liquidity are solid
12. Foreign Exchange Impact
Impact in EUR millions
FX change
against euro, %
Income
Statement
Translation
difference
Total effect on
equity
RUB +10 5,4 4,5 9,9
RUB -10 -4,4 -3,7 -8,1
NOK +10 - 4,4 4,4
NOK -10 - -3,6 -3,6
The rate of Lithuanian litas is currently fixed against the euro
13. Strategic Financial Targets 2014 - 2016
โข Net sales and EBITDA growth 15% on average per annum
โข Net sales outside Finland over EUR 50 million by 2016
โข At least 6% return on capital employed* per annum
โข Equity ratio over 35% over the cycle
* Excluding fair value changes (formula specified)
14. Technopolis Markets
Source: Federation of Finnish Financial Services, Bloomberg and Baltic countries Nordea
Finland 2014E
GDP growth 0.8%
Unemployment 8.4%
Credit rating AAA
Sweden 2014E
GDP growth (%) 2.5%
Unemployment 8.0%
Credit rating AAA
Denmark 2014E
GDP growth (%) 1.3%
Unemployment 5.7%
Credit rating AAA
Estonia 2014E
GDP growth (%) 2.8%
Unemployment 8.4%
Credit rating AA-
Russia 2014E
GDP growth (%) 1.1%
Unemployment 5.7%
Credit rating BBB-
Latvia 2014E
GDP growth (%) 5.0%
Unemployment 9.5%
Credit rating BBB+
Lithuania 2014E
GDP growth (%) 3.2%
Unemployment 9.8%
Credit rating BBB
Norway 2014E
GDP growth (%) 2.2%
Unemployment 3.7%
Credit rating AAA
15. Finland
Q1/2014 Q1/2013 ฮ, % 2013
Rentable space, mยฒ 547,900 533,500 2,7 555,900
Rent, โฌ/mยฒ/mo avg. 16.49 15.88 3.8 16.21
Financial occupancy rate, % 93.0 91.5 1.5 92.9
Net rental revenue, EUR million 25.6 23.2 10.4 94.9
Net sales, EUR million 29.2 26.8 9.1 109.4
EBITDA, EUR million 15,0 13,1 14,7 56,1
Market yield requirement, % 7.9 7.9 - 7.9
Fair value of investment
properties, EUR million 978.9 888.0 10.2 981.0
โข Growth through acquisitions and organic investments
โข Portfolio change drove higher rents
16. Baltic Rim
โข Growth through Vilnius acquisitions and organic investments
โข Sanctions towards Russia might have an effect in 2014
โข Yields came down in Tallinn
Q1/2014 Q1/2013 ฮ, % 2013
Rentable space, mยฒ 127,400 67,800 87.9 119,500
Rent, โฌ/mยฒ/mo avg. 14.57 13.90 4.8 15.04
Financial occupancy rate, % 97.7 97.7 - 99.1
Net rental revenue, EUR million 5.7 2.8 103.4 15.3
Net sales, EUR million 5.9 2.9 101.5 15.9
EBITDA, EUR million 3.0 1.1 183.5 7.6
Market yield requirement, % 8.9 9.4 -0.5 9.0
Fair value of investment
properties, EUR million 230.2 122.2 88.4 212.4
17. Scandinavia
โข Rentable space down due to space under renovation and unallocated
space
โข Consolidation is well on track
Q1/2014 Q1/2013 ฮ, % 2013 *)
Rentable space, mยฒ 62,700 - - 71,400
Rent, โฌ/mยฒ/mo avg. 24.43 - - 21.16
Financial occupancy rate, % 95.8 - - 89.5
Net rental revenue, EUR million 4.4 - - 0.9
Net sales, EUR million 4.6 - - 1.0
EBITDA, EUR million 3.0 - - 0.6
Market yield requirement, % 6.5 - - 6.5
Fair value of investment
properties, EUR million 218.6 - - 217.0
*) December 11-31, 2013
18. Smart Business Environment
Technopolisโ business idea is to combine premises and services into a carefully
thought-out offering that supports the growth and success of customers.
Service Portfolio
BUSINESSSPACE EMPLOYEES
Cleaning
Reception
ICT
Conference
Matchmaking
Visibility
Events
Resources
Restaurants
Car wash
Gym
Massage
19. Technopolis Investment Criteria
19
CUSTOMERS FINANCE
โข Location
โข Connections
โข Scale
โข Attractive
โข Growth potential
โข Good condition and
quality
โข Flexibility
REAL
ESTATE
โข Knowledge incentive
customer base
โข Growth companies,
anchors and services
โข Different sectors, same
challenges
โข Cluster effects
โข Local and international
customers
โข EPS โ positive
โข Good yield
โข Potential for profitable
growth
โข Occupancy growth
potential
โข Potential in service
revenue
โข Excellent local team
20. Lease Portfolio
โข Open-ended increased by 11.4%-points since year end:
โ Unterminated fixed term contracts which ended at the year-end
were automatically changed to open-ended leases
โ Lease stock was EUR 646.6 million
% of lease stock Lease length in months
0
5
10
15
20
25
30
35
40
45
50
0%
5%
10%
15%
20%
25%
30%
<1 yr 1-3 yrs 3-5 yrs >5 yrs Open-ended
31 Dec 2013 31 March 2014 Lease Length
21. Investments
Area Name mยฒ EUR million
Stabilized
yield, % *) Completion
Acquired
Oulu Peltola 37,600 31.7 11.2 02/2013
Vilnius Ozas 42,200 62.6 9.3 05/2013
HMA Falcon 26,300 77.5 7.8 11-12/2013
Oslo Fornebu 70,500 217.0 ***) 7.7 12/2013
Completed
Kuopio Viestikatu 7B&C 9,300 18.2 9.2 02/2013
Tallinn Lรถรถtsa 8C 6,400 8.1 9.1 03/2013
Tallinn Lรถรถtsa 8B 8,500 13.0 9.1 03/2013
Jyvรคskylรค Innova 4 8,900 23.7 8.1 10/2013
Under construction
Prelet rate,%
May 6,2014
Tallinn Lรถรถtsa 8A 84.8 7,500 11.8 9.1 09/2014 ****)
St. Petersburg Pulkovo 2 51.0 18,700 42.0 12.6 10/2014 ****)
Tallinn Lรถรถtsa 5 - 9,200 17.0 ***) 8.8 09/2015
HMA G-building 30 5,300 18,3 8,0 09/2015
Total 250,400 540.9
*) stabilized yield = estimated net operating income / acquisition cost
**) Including three-year rental guarantee from sellers
***) Technopolis share 51%
****) Commissioning in phases
22. Breakdown of Debts and Covenants
21%
22%
21%
2%
34%
Loans without Covenants or Bank Guarantees
Loans with Covenants (equity ratio)
Loans Requiring Bank Guarantees with Covenants
Loans Requiring Bank Guarantees without Covenants
Loans with Covenants
90,5%
3,9%
5,6%
Bank Loan Leasing Debt Commercial Paper
23. Loan Maturities
0
20
40
60
80
100
120
140
160
180
200
220
< 1 year 1 - 2 years 2 - 3 years 3 - 4 years 4 - 5 years over 5 years
EUR million
Repayments of interest bearing debt Maturity of credit facilities
โข Capital-weighted loan period on average was 6.8 years
โข Within 12 months EUR 166.4 million of loans are coming to due
โข EUR 112.1 million untapped credit facilities
24. Shareholders
Major shareholders April 30, 2014 # of shares % of shares
Varma Mutual Pension Insurance Company 25,448,192 23.9
Ilmarinen Mutual Pension Insurance Company 11,089,647 10.4
City of Oulu 3,511,211 3.3
OP-Pohjola Group 1,798,733 1.3
Laakkonen Mikko 1,226,184 1.2
The Finnish Cultural Foundation 1,188,042 1.1
City of Tampere 1,160,577 1.1
Odin Finland 1,119,944 1.1
Jyrki Hallikainen 998,236 0.9
Mutual Fund Evli Finnish Equity 932,294 0.9
10 largest shareholders, total 48,049,910 45.2
Foreign shareholders, total 35 037 449 32.9
Others, total 23,320,382 21.9
Total amount of shares 106,407,741 100