This document provides a summary of Technopolis' performance in the first half of 2016. Key points include:
- Occupancy rates increased to 93.4% in Q2 from 92.5% in Q1.
- Net sales were up 1.2% year-over-year while EBITDA was down 0.9% excluding foreign exchange and non-recurring items.
- Service income grew 10% and now makes up 13% of total income.
- The company acquired Technopolis Gårda Campus in Gothenburg, Sweden for EUR 126.6 million.
- An equity rights issue of approximately EUR 125 million is proposed to fund future acquisitions and growth projects
2. 26.8.2016 2
First Half 2016 Performance
Q2 occupancy up to 93.4% from 92.5% in Q1
Year-on-year net sales were up 1.2% & EBITDA was down
0.9% excluding FX & non-recurring items
Service income grew by 10.0%, penetration now at 13.0%
Cash flow from operations/ share EUR 0.33 (0.28)
Organic growth boosting NAV / share (EPRA) 4.81 (4.59)
Equity ratio 36.5% (37.9%), LTV 59.4% (63.1%)
Guidance for 2016 unchanged
4. 26.8.2016 4
Service Business Growing
70,3 80,7 93,0 111,1 144,8 150,3 73,3
11,2
12,1
14,2
15,2
16,9 20,3
11,0
13,7%
13,0%
13,2%
12,0%
10,4%
11,9%
13,0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
50
100
150
200
2010 2011 2012 2013 2014 2015 H1/2016
Rental income Service income Services of net sales
EUR million
5. 26.8.2016 5
Technopolis Gårda Campus
In the inner city of Gothenburg,
Sweden
A growing market with strong
economic indicators
Built 1999 (A-C) and 2004 (D)
Flexible, relatively modern and
good quality property
Occupancy rate 94%
Customers:Telia, Fujitsu,
GoExcellent
Execution of strategy with entry to
the prioritized and publicly
communicated next target market
6. 26.8.2016 6
Gårda - KeyTransaction Figures
Guaranteed NOI until 31.12.2017
Max MEUR 2.1 additional purchase price for new building rights
Seller to cooperate and assist in zoning process
Closing in July 2016
Significant upside potential through rent hikes, conversion and organic
expansion
KPI Key Figure
Price MEUR 126.6
Market yield requirement 4.75% (Gårda)
Cash-flow yield, initial 5.0%
Cash-flow yield, stabilized 6.0%
GLA (m2) 34,300
Office GLA (m2) 27,900
7. 26.8.2016 7
Area Name m² EUR
million
Stabilized
yield, % *
Financial OCR/
Pre -OCR, %
Completion
Tallinn Löötsa 5 9,200 17.0 8.8 100 1/2016
Tampere Yliopist. 3&4 11,900 40.5 7.2 80.5 7/2016
Vilnius Delta 21,600 35.4 9.8 57.9 12/2016
Helsinki Ruoholahti 3 10,300 33.2 7.0 35.7 07/2018
Organic Growth Projects
On June 30, 2016, the projects in progress totaled EUR 109.1 million
Projects in grey are not completed as per June 30, 2016 i.e. financial occupancy is pre-let rate.
* Stabilized yield = estimated net operating income / cost
**The rentable area of Ruoholahti3 has been revised upwards after the announcement of the investment decision. A larger
rentable area has loweredthe pre-let rate.
9. 26.8.2016 9
Financing
H1/2016 2015 2014
Interest bearing debt, EUR million 905.0 864.8 841.9
Fixed rate, % 61.8 71.3 60.0
Average interest rate, % * 2.39 2.60 2.43
Capital weighted loan maturity,
years
5.5 5.9 6.1
Interest cover ratio, % 4.8 4.3 4.8
Loan to value, % 59.4 58.8 59.7
Equity ratio, % 36.5 39.3 38.5
Cash and equivalents, EUR million 26.1 39.4 28.3
* Excluding the hybrid loan
10. 26.8.2016 10
2016 Review on Strategy to 2020
Business strategy & concept working well at home & abroad
Strategic territory still the Nordic-Baltic region
Focus on targets with optimal strategic fit
Campuses & locations where we can add maximum value
11. 11
TECHNOPOLIS
COMPETITIVE
ADVANTAGE
Value-Adding Services
ƒ Cut the square meters
ƒ Buy services on demand
ƒ From cradle to grave
ƒ 5-star service delivery
Direct Customer Management
ƒ In sales and marketing
ƒ In service providing
ƒ In property maintenance &
management
International chain advantages
ƒ Branding advantages
ƒ Increasing scale-driven efficiencies
ƒ Rapid deployment of best practices
ƒ Increasing Group-wide solution sales
Cool, FlexibleWorkplaces
ƒ Less m2/person
ƒ Shared Infra & Services
ƒ Flexible, scalable up & down
ƒ Cool, fun & tribal
ƒ Access to the whole network
TheTechnopolis Concept
This is Our DNA
12. 26.8.2016 12
Technopolis Campus Network 2016
We Have Successfully Copy-Pasted our Concept
Oulu
Vantaa
Espoo
Tampere
Jyväskylä
Kuopio
Lappeenranta
St. Petersburg 2008
Helsinki
Tallinn 2010
Vilnius 2013
Oslo 2013
Gothenburg 2016
13. 26.8.2016 13
Rights Issue
EGM onAugust 31
The Board proposes a ca. EUR 125 million rights
issue
Pursuant to the shareholders’ pre-emptive
subscription price
Varma and Ilmarinen have indicated that they will
participate pro-rata
14. 26.8.2016 14
HowWe Will Use Rights Issue Proceeds
Gårda acquisition
Oslo minority shareholding
Organic growth project pipeline
Future campus acquisitions
Strengthen the balance sheet
17. 26.8.2016 17
Group
1-6/2016 1-6/2015 2015
Rentable space, m² * 740,300** 738,100 740,400**
Rent, €/m²/mo. avg.* 16.73 16.87 16.99
Financial occupancy rate, %* 93.4** 94.1 94.6**
Net rental income, EUR million 73.3 79.1 150.3
Net sales, EUR million 84.3 89.1 170.6
EBITDA, EUR million 45.4 50.2 93.0
Market yield requirement, avg., % * 7.69 7.81 7.73
Fair value of investment properties,
EUR million *
1,457.9 1,410.6 1,426.0
* At the end of the period.
** Under renovationQ2/2016: 13,500 m², 12/2015: 16,700 m²
18. 26.8.2016 18
Finland
1-6/2016 1-6/2015 2015
Rentable space, m² * 527,140** 534,200 526,900**
Rent, €/m²/mo. avg.* 17.18 16.51 17.02
Financial occupancy rate, % * 91.7** 92.4 92.9**
Net rental income, EUR million 51.9 57.6 107.4
Net sales, EUR million 61.0 66.4 125.0
EBITDA, EUR million 33.5 38.1 69.0
Market yield requirement, avg., % * 7.8 7.9 7.8
Fair value of investment properties,
EUR million * 998.2 958.8 984.8
* At the end of the period.
** 6/2016: 10,500 m² under renovation. 12/2015: 16,700 m² under renovation.
19. 26.8.2016 19
Baltic Rim
1-6/2016 1-6/2015 2015
Rentable space, m² * 148,650 139,100
147,00
0
Rent, €/m²/mo. avg. * 14.16 14.42 15.15
Financial occupancy rate, % * 99.3 99.6 99.5
Net rental income, EUR million 13.0 12.5 25.1
Net sales, EUR million 14.4 13.2 26.8
EBITDA, EUR million 7.5 7.1 14.2
Market yield requirement, avg., % * 8.7 8.9 8.7
Fair value of investment properties,
EUR million *
260.1 245.1 246.7
* At the end of the period.
20. 26.8.2016 20
Scandinavia
1-6/2016 1-6/2015 2015
Rentable space, m² * 64,500** 64,800 66,500**
Rent, €/m²/mo. avg. * 19.56 22.05 21.50
Financial occupancy rate, % * 95.6** 97.2 97.1**
Net rental income, EUR
million
8.3 9.1 17.8
Net sales, EUR million 8.9 9.5 18.8
EBITDA, EUR million 4.4 4.9 9.9
Market yield requirement,
avg., % *
6.1 6.3 6.1
Fair value of investment
properties, EUR million *
199.6 207.1 194.4
* At the end of the period.
** 6/2016: 3,000 m2 under renovation, 12/2015: None.
21. 26.8.2016 21
Leases
Lease stock, % of space
Maturity in years
June 30,
2016
2015 2014
<1 17 22 17
1-3 22 20 23
3-5 15 15 12
>5 18 19 22
Open-end leases 28 24 26
Av. lease term in months 36 36 39
Lease stock, EUR million 437.4 429.7 455.9
The ten largest customers let approximately 18.0 % of rented space and
accounted for 16.4% of rental income.
The single largest customer accounted for 4.0% of rented space and 2.2% of
rental income.
22. 26.8.2016 22
2015-2020 Strategic FinancialTargets
Average net sales and EBITDA growth 10% p.a.
Service penetration 15% by 2020 for like-for-like real estate
5.5% return on capital employed p.a.
Equity ratio above 35% over the cycle
23. 2326.8.2016
Investment Criteria
Sufficient scale
Good quality assets
Flexibility & adaptability
Location & connections
Service infrastructure
potential
Customer mix potential
Competitive valuation with
attractive risk-adjusted
return
24. 26.8.2016 24
FairValue Changes 1-6/2016
EUR million Market
Yield
Related
Occupancy
Assumption Modernization
Other
Changes
Projects
in
Progress
Total
Finland 5.9 -1.1 -6.9 -0.9 0.7 -2.3
Baltic Rim 2.6 -1.1 1.3 -1.2 2.2 3.8
Scandinavia 1.5 0.0 -1.5 -3.0* 0.0 -3.0
Total 10.0 -2.2 -7.1 -5.1* 2.9 -1.5
* Mainly contract changes. In Norway, some revenues were allocated to services and were thus removed from fair value calculation.