Technopolis - Interim report (Q1 and Q3)

Technopolis Group Interim Report January 1 – June 30, 2015

TECHNOPOLIS PLC            INTERIM REPORT               August 20, 2015 at 8:30
a.m. 

Technopolis Group Interim Report January 1 - June 30, 2015

Operational Performance Increased by Non-recurring Income of EUR 5.4 Million

- Net sales rose to EUR 89.1 (80.0) million, up 11.3%
- EBITDA rose to EUR 50.2 (42.6) million, up 17.8%
- The financial occupancy rate was 94.1% (93.5%)
- Earnings per share were EUR 0.17 (0.08)
- Direct result (EPRA) was EUR 27.3 (25.0) million, up 9.2%
- Direct result per share (EPRA) was EUR 0.26 (0.24)
- Net asset value per share (EPRA) was EUR 4.59 (4.86)

Compared to the first half of 2014, Technopolis' EBITDA margin increased from
53.3% to 56.4%. Net sales and EBITDA were increased by a non-recurring income
of EUR 5.4 million that correlates to two early termination agreements with
customers in Oulu. Excluding non-recurring income net sales growth was 4.4% and
EBITDA 5.1%. The non-recurring income affects all Group and Finnish segment
financials. 



                                        4-6/  4-6/    1-6/  1-6/  1-12/
                                        2015  2014    2015  2014   2014
Net sales, EUR million                  47.9  40.4    89.1  80.0  161.7
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EBITDA, EUR million                     28.0  22.0    50.2  42.6   87.2
Operating profit, EUR million           23.4   9.7    38.7  30.4   42.9
Net result for the period, EUR million  11.7   5.4    20.9  16.9   -3.0
Earnings/share EUR                      0.11  0.01    0.17  0.08  -0.15
Cash flow from operations/share, EUR                  0.28  0.32   0.63
Equity ratio, %                                       37.9  40.6   38.5
Equity/share, EUR                                     4.28  4.56   4.17
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                                        4-6/  4-6/    1-6/  1-6/  1-12/
                                        2015  2014    2015  2014   2014
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Direct result, EUR million              14.7  12.3    27.3  25.0   55.9
Direct result/share, diluted, EUR       0.14  0.12    0.26  0.24   0.53
Net asset value/share, EUR                            4.59  4.86   4.52
Net rental yield, %                                    7.7   7.2    7.5
Financial occupancy rate, %                         94.1*)  93.5   94.7
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*) 10,000 m² under renovation and 8,500 m² of unoccupied but rented space

The EPRA-based (European Public Real Estate Association) direct result does not
include unrealized exchange rate gains, losses or fair value changes. 

Keith Silverang, CEO:

“The positive trend in Technopolis' operational performance seen in the first
quarter has continued into the second. With net sales growth in excess of 11%
over 2014 and EBITDA growing almost 18% (including non-recurring income) for
the same period, positive momentum is increasing. 

In the first half of the year we booked a net figure of -9.5 million euros
against fair values. The main drivers were actual modernization expenses and
reserves for the future totaling roughly 21 million euros. These investments in
our brand, campus infrastructure and minimum standards will safeguard
Technopolis' occupancy, earnings and customer satisfaction for years to come.
This program is now basically ready, and the combination of completed projects
and reservations for the future should mitigate the need for further reductions
in fair values. 

Organic investment activities have also continued apace, both in Finland and
abroad. Growth project pre-let rates in Tallinn, Vantaa and Tampere have all
increased, with the Lõõtsa 5 project in Tallinn already over 70% and the Vantaa
project almost 80%. The Yliopistonrinne project in downtown Tampere has
progressed more slowly (pre-let rate 35.8%), but we remain confident in the
project. Our newest expansion project in Vilnius got off to an excellent start
with a 48% pre-let rate in a market that shows every sign of continued
dynamism. 

In April we sold 40% of our Kuopio business unit at fair value to a local
investor. The deal brought us EUR 50 million in cash and a strong local
partner. This new partnership is now fully operational, and we are satisfied
with both the deal and the quality of the collaboration that has taken place in
its aftermath. 

On the financial side the company continues to enjoy a low average interest
rate, despite the marginally higher coupon rate on the unsecured 150 million
euro bond we floated this spring. This bond has also enhanced the flexibility
and maturity structure of our funding. Our solvency and liquidity are at
healthy levels and are positioned to remain so, even if we make further growth
investments over the next half year. 

The transaction market in our territory has two faces at the moment. The buy
side is becoming more challenging as Nordic markets heat up, but the sell side
is becoming somewhat easier as market yields fall and buyers in search of
targets become increasingly active. This includes the Finnish primary and
secondary markets. Technopolis will continue to be active on both the buy and
sell side of the transaction market. We will selectively divest non-core
assets, while making acquisitions that meet our investment criteria and move
the company's growth strategy forward. Our goal remains the same: to increase
earnings by building up the scale of our operations while restructuring our
campus portfolio to optimize its risk-adjusted return.” 

Full version of Technopolis Plc's interim report for January-June, 2015
attached. 

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

Distribution:
NASDAQ OMX 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 OMX Helsinki.

Attachments:

Technopolis_interim_report_Q2_2015.pdf