Technopolis - Financial Statement Release

Technopolis Group Financial Statements for 2015

TECHNOPOLIS PLC           FINANCIAL STATEMENTS RELEASE          February 4,
2016 at 9:00 a.m. 

Technopolis Group Financial Statements for 2015

Solid performance and Organic Growth

- Net sales rose to EUR 170.6 (161.7) million, up 5.5%
- EBITDA rose to EUR 93,0 (87.2) million, up 6.7%
- Financial occupancy rate was 94.6% (94.7%)
- Earnings per share rose to EUR 0.38 (-0.15)
- Direct result (EPRA) EUR 55.0 (55.9) million, down 1.7%
- Direct result per share, diluted (EPRA) EUR 0.52 (0.53)
- Net asset value per share (EPRA) EUR 4.70 (4.52)
- The Board of Directors proposes a dividend of EUR 0.17 per share



                                           10-12/       10-12/   1-12/  1-12/
Key Indicators                               2015         2014    2015   2014
Net sales, EUR million                       41.7         41.4   170.6  161.7
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EBITDA, EUR million                          20.1         21.9    93.0   87.2
Operating profit, EUR million                25.7         -3.5    88.9   42.9
Net result for the period, EUR million       17.2        -28.0    50.0   -3.0
Earnings/share, EUR                          0.14        -0.29    0.38  -0.15
Cash flow from operations/share, EUR                              0.60   0.63
Equity ratio, %                                                   39.3   38.5
Equity/share, EUR                                                 4.36   4.17
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                                           10-12/  10-12/    1-12/      1-12/
EPRA-based Key Indicators                    2015    2014     2015       2014
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Direct result, EUR million                   16.2    16.7     55.0       55.9
Direct result/share, diluted, EUR            0.15    0.16     0.52       0.53
Net asset value/share, EUR                                    4.70       4.52
Net rental yield, %                                            7.7        7.5
Financial occupancy rate, %                                 94.6*)       94.7
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  *) 16,700 m² under renovation and 11,400 m² of unoccupied but rented space.

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. 

Keith Silverang, CEO:

“The overall macro-environment was tough in 2015, but Technopolis rose to the
challenge. 

Demand in our main markets was moderate. Competition was tough in Finland, and
falling oil prices had an impact on both St. Petersburg and Oslo. However, 2015
demonstrated that the Technopolis concept works. We grew organically and had
top line growth of 5.5%. EBITDA was up 6.7% and our EBITDA margin rose to
54.5%, as centralization-related economies continue to kick in. 

There were a number of positive operational developments during the year.
Service revenues grew as much as 20%, with penetration rising to almost 12%. We
are making steady progress toward our strategic service penetration target of
15%. Customer satisfaction improved substantially over the year. For the first
time, our average rating was over 4 out of 5. We will build on this foundation
to enhance the edge it is giving us in a world where customers want less square
meters, more efficiency and a superior service experience. 

Occupancy came in at 94.6%. We had like-for-like rental growth in all countries
(without the weakening of NOK and RUB), despite virtually zero inflation in
most of our markets. We were able to complete new developments in Tallinn and
Vantaa with very high occupancy, and the projects underway in Tampere and
Vilnius will bring us further EPS-accretive, organic growth. 

As for fair values, the finalization of investment programs in combination with
high-occupancy completions and more stable market yields in many of our markets
has had a positive impact. We will maintain tight control of capital
expenditure moving forward as well. On the financing side, our 2015 bond issue
in combination with increased hedging lifted our interest expenses. However,
our average interest rate remains one of the lowest among Nordic listed real
estate companies. At the same time we have expanded our arsenal of financing
instruments and lengthened credit maturities with our first unsecured EUR 150
million bond issue. LTV began to decline in the last quarter as we started to
use the proceeds to pay down maturing loans. 

We still have plenty of challenges moving forward. We have to find customers
for the 10,000 square meters of space in Oulu released from the agreements we
prematurely terminated in 2015. This will take time, but we are confident that
it can be done. Elsewhere, we need to successfully complete and fill the
Yliopistonrinne downtown project in Tampere and boost occupancy on our
remaining domestic campuses in Lappeenranta and Oulu. All of this, while
selectively divesting assets around the country. 

The transactions market remains a double-edged sword. Investors in search of
yield are fueling rising international interest in the Finnish real estate
market. This is increasing the liquidity of the market and making it easier for
sellers to divest assets, but has yet to significantly impact the secondary
market. 
On the other hand, it has become increasingly challenging to acquire quality
assets in the Scandinavian arena, with very aggressive bidding on most quality
properties that come on the market. 

At this point we see no reason to force it. In order to successfully deploy our
concept, it is essential that the campuses we acquire are an excellent fit,
with the prerequisites to support higher occupancy, service revenue growth and
organic expansion – at reasonable valuations that enhance shareholder value.
This means we have to be disciplined and patient in our acquisition activities.
In the mean time we will concentrate on refining our concept, developing our
offering, improving operational efficiency and strengthening our balance sheet.
When the right campuses come along, we’ll be ready to act.” 

Full version of Technopolis Plc’s financial statements release 2015 attached.

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

Distribution:
Nasdaq Helsinki, main news media, www.technopolis.fi

About Technopolis:
Technopolis provides the best addresses for companies to operate and succeed in
five countries in the Nordic-Baltic region. The company develops, owns and
operates a chain of 20 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 47,000 employees in Finland, Norway, Estonia, Russia and Lithuania. The
Technopolis Plc share (TPS1V) is listed on Nasdaq Helsinki.

Attachments:

Technopolis_Financial_Statements_2015.pdf