Technopolis Creating Value Through Growth Investor meetings in - PowerPoint PPT Presentation

Technopolis – Creating Value Through Growth Investor meetings in Paris with Carnegie November 18, 2016

Technopolis Today Operator, developer and long- >120 21 term holder of office properties Buildings Campuses Expert in multi-user environments 13 6 DNA of a service provider Cities Countries 250 employees 1,700 49,000 Total rentable area 800,000 m 2 Customers People Market value EUR 500 million 100% Service Attitude THOUSANDS OF STORIES 17.11.2016 2

How We Create & Add Value Acquiring, improving & developing undermanaged assets Deploying TP service concept, look & feel Deploying chain management Controlling the customer experience end-to-end Boosting OCR, rents, service revenues & customer satisfaction Expanding & developing the campus and its flexibility to full potential 17.11.2016 3

The Technopolis Concept This is Our DNA Direct Customer Management ƒ In sales and marketing ƒ In service providing ƒ In property maintenance & management Value-Adding Services Cool, Flexible Workplaces ƒ TECHNOPOLIS Cut the square meters ƒ Less m2/person ƒ Buy services on demand COMPETITIVE ƒ Shared Infra & Services ƒ From cradle to grave ƒ ADVANTAGE Flexible, scalable up & down ƒ 5-star service delivery ƒ Cool, fun & tribal ƒ Access to the whole network International chain advantages ƒ Branding advantages ƒ Increasing scale-driven efficiencies ƒ Rapid deployment of best practices ƒ Increasing Group-wide solution sales 4

Technopolis Campus Network 2016 We Have Successfully Copy-Pasted our Concept Oulu Vantaa Espoo Tampere Jyväskylä Kuopio Lappeenranta St. Petersburg 2010 Helsinki Tallinn 2010 Vilnius 2013 Oslo 2013 Gothenburg 2016 17.11.2016 5

100% 80% 85% 90% 95% Stable Occupancy Over Time Q4-2006 Q1-2007 17.11.2016 Q2-2007 Q3-2007 Q4-2007 Q1-2008 Q2-2008 Q3-2008 Q4-2008 Q1-2009 Q2-2009 Q3-2009 Q4-2009 Q1-2010 Q2-2010 Q3-2010 Q4-2010 average 94.4% Q1-2011 Q2-2011 6 10 year Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012 Q4-2012 Q1-2013 Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 92.7% Q3/16 Q4-2015 Q1-2016 Q2-2016 Q3-2016

Office Vacancy in Helsinki Metropolitan Area % 40 36,6 % Technopolis Innopoli 7,8% 35 30 25 20,0 % Technopolis 20 17,5 % Vantaa 7,4% 15 12,4 % 10 11,8 % Technopolis 11,2 % Ruoholahti 3,8% 5 0 Ruoholahti Helsinki CBD Leppävaara Keilaniemi Aviapolis Otaniemi - Pohjois-Tapiola Source: Catella Property Oy 17.11.2016 7

Average Gross Rents &Yields in HMA Vantaa Innopoli Ruoholahti HMA Total Average Gross Rent 21,5 20,0 25,9 21,3 Q3/2016, Technopolis , eur/sq.m./mo Average Gross Rent, 18,75 17,0 22,5 Market Estimation *, (Leppävaara) eur/sq.m./mo Diff, eur/sq.m./mo +2,75 +3,0 +3,4 Vantaa Innopoli Ruoholahti Yield level Q3/2016, 6,9 7,05 6,1 Technopolis 6,975 (IP3 G) Yield level Q2/2016, 6,9 Leppävaara 6,4 5,7 Market* Keilaniemi 5,9 *Source: Catella Property Oy 17.11.2016 8

Service Business Growth 10% EUR million 200 16% 13.7% 13.2% 14% 12.5% 12.0% 20.3 13.0% 16.9 150 12% 11.9% 10% 15.2 15.9 10.4% 100 8% 14.2 12.1 11.2 6% 50 4% 93.0 111.1 144.8 111.4 80.7 70.3 150.3 2% 0 0% 2010 2011 2012 2013 2014 2015 1-9/2016 Rental income Service income Services of net sales 17.11.2016 9

EPRA and Real Estate Figures EPRA-based and Real Estate Indicators 2013 2014 2015 1-9/2016 Direct result, EUR million 40.5 55.9 55.0 39.9 Change, y/y, % 35.6 38.1 -1.7 3.0 EPS (from direct result, undiluted) 0.47* 0.53* 0.45 0.33 Financial occupancy rate, % 93.6 94.7 94.6 92.7 Net rental yield, % 7.6 7.5 7.7 7.4 Fair value of competed investment properties, EUR million 1,410.4 1,378.4 1,426.0 1,652.9 Fair value changes, EUR million -17.6 -40.5 1.3 0.7 * Not corrected with share issuein Sept 2016 17.11.2016 10

EPRA EPS & Cash Flow from Operations / Share 0.7 0.63 0.6 0.6 0.53 0.53 0.52 0.5 0.47 0.5 0.43 0.41 0.38 0.4 0.34 0.33 0.3 0.2 0.1 0.0 2011 2012 2013 2014 2015 1-9/2016 EPRA EPS, EUR Cash flow from operations / share, EUR 17.11.2016 11

Future Expansion Strategy Our territory is the Nordic-Baltic region Focus is on value creation Optimal strategic fit Best upside potential Healthy risk-adjusted yield Divestitures in Finland to continue 17.11.2016 12

2015-2020 Strategic Financial Targets 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 17.11.2016 13

Q3 Highlights 124 million euro rights issue was a success Net sales & EBITDA were up 3.5% year-on-year, excluding FX & non-recurring items Q3 occupancy 92.7% as expected Service income grew by 10.1%, penetration at 12.5% Cash flow from operations/ share EUR 0.43 (0.39) Equity ratio & LTV improving due to rights issue 17.11.2016 14

Unit Occupancy 98.3% 100.0% 98.9% 100.0% 100% 92.1% 93.5% 94.2% 92.8% Group 95% 93.0% Q3/16 92.7% 90% 88.0% 84.4% 85% 99.9% 100.0% 99.8% 97.0% 97.2% 96.2% 93.5% 92.0% 90.6% 80% 75% 77.0% 70% Q3-2015 Q3-2016 17.11.2016 15

Financing 1-9/2016 2015 2014 Interest bearing debt, EUR million 991.2 864.8 841.9 Fixed rate, % 55.9 71.3 60.0 Average interest rate, % * 2.30 2.60 2.43 Capital weighted loan maturity, 5.1 5.9 6.1 years Interest cover ratio, % 4.7 4.3 4.8 Loan to value, % 58.7 58.8 59.7 Equity ratio, % 39.5 39.3 38.5 Cash and equivalents, EUR million 98.7 39.4 28.3 * Excluding the hybrid loan 17.11.2016 16

The Rights Issue Shares were offered in proportion to existing holding, subscription price EUR 2.40 per share Oversubscribed by 66% Net proceeds EUR 124.3 million Total number of shares increased to 158,793,662 Full impact on solvency indicators in Q1/2017 Equity ratio now 39.5% and LTV 58.7%. Both will continue to improve as excess liquidity is used to pay down debt. 17.11.2016 17

How We Will Use Rights Issue Proceeds Strengthen balance sheet after Gårda acquisition Buy out Oslo minority shareholding Ruoholahti 3 & Lõõtsa 12 projects launched Organic growth project pipeline Future campus acquisitions 17.11.2016 18

Organic Growth Projects 1-9/2016 Area Name m² EUR Stabilized Financial OCR/ Completion million yield, % * Pre -OCR, % Tallinn Lõõtsa 5 9,200 17.0 8.8 100 1/2016 Tampere Yliopist. 3&4 11,900 40.5 7.2 79.7 7/2016 Vilnius Delta 21,600 79.7 9.8 79.7 12/2016 Helsinki Ruoholahti 3 10,300 33.2 7.0 35.7 07/2018 Projects in grey are not completed as per Sept 30, 2016 i.e. financial occupancy is pre-let rate. * Stabilized yield = estimated net operating income / cost On September 30, 2016, the projects in progress totaled EUR 112.9 million 17.11.2016 19

Organic Growth Project Pipeline Tallinn campus expansion (Lõõtsa 12) to be launched soon. Investment of EUR 19.7 million together with Mainor Organic expansion opportunities: HMA Espoo Innopoli (35,000 m 2 ) Helsinki Ruoholahti (21,400 m 2 ) Vantaa Aviapolis (33,200 m 2 ) Tampere CBD (22,800 m 2 ) Kuopio (40,800 m 2 ) Jyväskylä (15,000 m 2 ) Vilnius Lõõtsa 12 17.11.2016 20

Divestitures since 2011 Time of Sales price, Fair value, divestiture EUR million EUR million PKC house, 2011 0.8 0.8 Technocenter, Oulu Oulu others in total 2011-2016 12.5 12.5 Vapaudenaukio, 2013 5.1 6.2 Lappeenranta Kuopio business 40% 2015 126.2 113.7 17.11.2016 21

Guidance for 2016 Unchanged Technopolis expects its net sales and EBITDA in 2016 to remain at the same level (+/- 5%) as in 2015. YliopistonrinneCampus in Tampere 17.11.2016 22

Technopolis Investment Story Technopolis concept brings both higher yields & lower operational risk Proven track record of building & sustaining high occupancy Consistently high rental yield relative to cost of capital Upside to build service revenue & earnings Effective end-to-end control of the customer experience Well positioned to exploit trend toward shared working life 17.11.2016 23

Thank you www.technopolis.fi Find us on: facebook.com/TechnopolisPlc twitter.com/TechnopolisPlc

Appendices: Additional Data

Leases Lease stock, % of space Sept 30, 2015 2014 Maturity in years 2016 <1 18 22 17 1-3 22 20 23 3-5 17 15 12 >5 15 19 22 Open-end leases 28 24 26 Av. lease term in months 35 36 39 Lease stock, EUR million 430.0 429.7 455.9 The ten largest customers let approximately 18.1 % of rented space and accounted for 16.5% of rental income. The single largest customer accounted for 4.0% of rented space and 2.2% of rental income. 17.11.2016 26

Fair Value Changes 1-9/2016 EUR million Market Occupancy Other Projects Total Yield Assumption Modernization Changes * in Related Progress 13.7 -0.9 -9.1 -7.2 1.5 -2.0 Finland 3.7 -1.1 -0.2 -2.0 3.9 4.3 Baltic Rim 5.0 0.0 -2.2 -4.4 0.0 -1.6 Scandinavia 22.4 -2.0 -11.5 -13.6 5.4 0.7 Total * Contract changes EUR 6.9 million. A write-down in Oulu EUR 5.0 million. In Norway, some revenues were allocated to services and were thus removed from fair value calculation, EUR 1.7 million. 17.11.2016 27