Technopolis - Half Year financial report

Technopolis Group Half-yearly Report January 1 – June 30, 2016

TECHNOPOLIS PLC            HALF YEAR FINANCIAL REPORT    August 26, 2016 at
9:00 a.m. 

Technopolis Group Half-yearly Report January 1 – June 30, 2016

Solid First Half

- Net sales EUR 84.3 (89.1) million, down 5.4% mainly due to 2015 termination
fees 
- EBITDA EUR 45.4 (50.2) million, down 9.6% mainly due to 2015 termination fees
- On a constant currency basis, net sales were down 3.6% and EBITDA was down
7.5% 
- Financial occupancy rate 93.4% (94.1%)
- Earnings per share EUR 0.18 (0.17)
- Direct result (EPRA) EUR 26.3 (27.3) million, down 3.9%
- Direct result per share, diluted (EPRA) EUR 0.25 (0.26)
- Net asset value per share (EPRA) EUR 4.81 (4.59)


                                               4-6/  4-6/      1-6/  1-6/  1-12/
Key Indicators                                 2016  2015      2016  2015   2015
Net sales, EUR million                         43.2  47.9      84.3  89.1  170.6
--------------------------------------------------------------------------------
EBITDA, EUR million                            23.5  28.0      45.4  50.2   93.0
Operating profit, EUR million                  20.6  23.4      42.0  38.7   88.9
Net result for the period, EUR million         10.1  11.7      23.9  20.9   50.0
Earnings/share, EUR                            0.08  0.11      0.18  0.17   0.38
Cash flow from operations/share, EUR                           0.33  0.28   0.60
Equity ratio, %                                                36.5  37.9   39.3
Equity/share, EUR                                              4.29  4.28   4.36
                                                                                
                                                                                
                                         
EPRA-based Key Indicators                      4-6/     4-6/   1-6/  1-6/  1-12/
                                               2016     2015   2016  2015   2015
--------------------------------------------------------------------------------
Direct result, EUR million                     14.0     14.7   26.3  27.3   55.0
Direct result/share,                           0.13     0.14   0.25  0.26   0.52
 diluted, EUR                                                                   
Net asset value/share, EUR                                     4.81  4.59   4.70
Net rental yield, %                                             7.3   7.7    7.7
Financial occupancy rate, %                                   93.4*  94.1  94.6*
--------------------------------------------------------------------------------
                                                                                

* 6/2016: 13,500 m² under renovation. 12/2015: 16,700 m² under renovation.

The EPRA-based (European Public Real Estate Association) direct result does not
include unrealized exchange rate gains and losses, fair value changes or any
non-recurring items, such as gains and losses on disposals. 

The new guidelines of the European Securities and Markets Authority (ESMA)
regarding Alternative Performance Measures (APMs, performance measures not
based on financial statements standards) entered into force on July 3, 2016.
Technopolis reports APMs, such as EPRA performance measures, to reflect the
underlying business performance and to enhance comparability between financial
periods. APMs may not be considered as a substitute for measures of performance
in accordance with the IFRS. 

Future Outlook

Technopolis expects its net sales and EBITDA in 2016 to remain on the same
level (+/- 5%) as in 2015. 

The Group’s financial performance depends on the development of the overall
business environment, customers’ operations, financial markets, market yields,
and exchange rates. Furthermore, any changes in the property portfolio may have
an impact on the guidance. 

Keith Silverang, CEO:

“The second quarter demonstrated an improving earnings trend from Q1 to Q2: net
sales, EBITDA and the EPRA direct result increased quarter-on-quarter.
Year-on-year, on a constant currency basis and excluding the revenue from the
2015 termination fees (EUR 5.4 million), net sales were up 1.2% and EBITDA was
down 0.9%. Therefore, while it is true that the Group’s net sales and EBITDA
were lower than they were at this time last year, we have improved our
operational cash flow, boosted service penetration and made good progress with
organic growth project completions. The completion of Yliopistonrinne and
acquisition of Gårda will boost the Group’s earnings in the second half. 

We ended 2015 with a 94.6% occupancy, which dropped to 92.5% in Q1 but rose to
93.4% in Q2. Service income grew by 10% and penetration reached 13% of total
net sales in the first half. We think this is a good demonstration of how our
concept and sales power cope with business conditions and structural changes.
It also highlights that there are now signs of gradual recovery in the Finnish
economy, including declining unemployment. 

In May, we took an important step in the execution of our growth strategy with
the acquisition of a 34,300 m2 campus in Gothenburg, our first in Sweden. The
Gårda campus has flexible, good quality assets with an excellent location, and
it offers good development and expansion potential. We are well underway with
the integration process and are deploying the Technopolis concept. 

Organic expansion projects continue to play a central role in our growth. In
June, the Board approved the expansion of our Ruoholahti campus in Helsinki,
which will launch this fall. The new building will have a GLA of 10,300 m2 and
is due for completion in July 2018. The pre-let rate of Ruoholahti 3 was 35.7%
at the end of Q2. The pre-let rates of our other organic growth projects, Delta
in Vilnius and Yliopistonrinne 3-4 in Tampere, also rose during the quarter,
with Yliopistonrinne now complete and move-ins in progress. 

In Oslo, we increased our holding in the Fornebu campus by acquiring an
additional 30% stake. Technopolis now holds an 81% interest in the campus,
while Ilmarinen has a 19% stake. 

The Board and management have started preparations for a 125 million euro
rights issue in the autumn. The issue will strengthen the company’s balance
sheet following the Gothenburg acquisition and the Oslo buy-out, as well as
provide capital for our current and upcoming organic pipeline and future
acquisitions. Technopolis’ two largest shareholders, Varma and Ilmarinen, have
indicated that they will participate pro rata in the rights issue.” 

Full version of Technopolis Plc’s Half-yearly Report January 1 –June 30, 2016
attached. 

Additional information:
Keith Silverang
CEO
tel. +358 40 566 7785


Technopolis provides the best addresses for success in six countries in the
Nordic-Baltic region. The company develops, owns and operates a chain of 21
smart business parks that combine services with flexible and modern office
space. The company’s core value is to continuously exceed customer expectations
by providing outstanding solutions to 1,700 companies and their 49,000
employees in Finland, Sweden, Norway, Estonia, Russia and Lithuania. The
Technopolis Plc share (TPS1V) is listed on Nasdaq Helsinki.

Liitteet:

Technopolis Half-yearly Report 2016.pdf