2012-04-27 06:00:00 CEST
2012-04-27 06:00:11 CEST
REGULATED INFORMATION
Technopolis - Interim report (Q1 and Q3)
Technopolis Group's Interim Report January 1- March 1, 2012
TECHNOPOLIS PLC INTERIM REPORT April 27, 2012 at 7.00 pm.
Technopolis Group's Interim Report January 1- March 1, 2012
Highlights for period 1-3/2012 compared to the corresponding period in 2011
- Net sales rose to EUR 25.4 (22.2) million, a positive change of 14.5%
- EBITDA rose to EUR 12.2 (10.3) million, a positive change of 18.2%
- Operating profit decreased to EUR 13.0 (16.0) million and profit before taxes
to EUR 11.5 (15.5) million; both included a positive change of EUR 1.2 (6.1)
million in the fair value of investment properties
- The financial occupancy rate was 94.3% (94.5)
- The Group's equity ratio was 34.9% (36.6)
- Net rental revenue of investment properties amounted to 7.3% (7.7)
- Earnings/share (undiluted) were EUR 0.13 (0.18) and diluted EUR 0.13 (0.18)
- Cash flow from operations per share was EUR 0.11 (0.12)
- Equity per share was EUR 5.15 (4.70)
Keith Silverang, CEO:
“Technopolis' operations continued to develop favorably during the first
quarter of the year. Our net sales increased to EUR 25.4 million and EBITDA to
EUR 12.2 million. Compared to the previous year, net sales improved by 14.5%
and EBITDA by 18.2%. The favorable development was primarily the result of the
commissioning of new facilities and slightly higher rents. New facilities were
commissioned for instance at Hermia in Tampere and Viestikatu in Kuopio. The
company's operating profit was EUR 13.0 million, a decrease of 18.8%. This was
mainly due to changes in fair value, with positive changes of EUR 1.2 million
recognized versus EUR 6.1 million recognized the previous year.
Despite the economic difficulties in the euro area and ongoing uncertainty, the
company's and our customers' businesses have remained stable. Rents have held
at a good level, and the Group's financial occupancy rate remains high.
Technopolis' like-for-like rents increased by 4.4% in the first quarter, and
the financial occupancy rate was 94.3% at the end of the period.
The company launched several growth projects during the first quarter. The two
most significant of these are the investments in the Pulkovo and Tallinn
airport campuses. In addition, the company decided to expand its campuses in
Kuopio and Jyväskylä. The Kuopio investment is associated with the agreement
concluded with the Savonia University of Applied Sciences, with the aim of
Savonia leasing a total of 33,000 square meters from Technopolis by the end of
2015. The current size of the Kuopio campus is 53,900 square meters. The second
phase of the Innova downtown campus in Jyväskylä was commissioned on March 30,
2012, and its pre-occupancy rate was 93.2%. Additional demand for corresponding
space was evident, and Technopolis decided to launch the construction of the
next phase at the end of March. The pre-occupancy rate of the new phase is 25%,
and the duration of the anchor customer's lease is 15 years.
Financial market were unstable at the end of 2011, but the European Central
Bank's actions succeeded in calming the markets, and the 12-month Euribor rate
decreased from 1.95% at the end of December to 1.43% during the first quarter.
In accordance with its risk management policy, the company has systematically
hedged its loans using interest swaps in the prevailing low interest rates,
thus preparing for potential increase in interest rates in the future. However,
we expect the low interest rates to continue for some time until the European
economy returns to a growth track. The availability of financing to the company
has remained good, even under turbulent conditions. On the whole, the company's
debt financing is in order, and in March we agreed on a new EUR 70 million
credit facility with the European Investment Bank. The aim is to use the
facility for growth projects in Finland and Estonia.”
Customers
The company concluded several significant agreements during the period. An
example of these is the 15-year lease with Kesko in Jyväskylä. In addition, the
company's units in Estonia and Russia renegotiated several agreements that will
provide the company a higher rent level in the future.
The public sector's share increased in the company's customer base, accounting
for 17% (14%) at the end of the period.
The lease stock held by the Group totaled EUR 215.6 (129.6) million at the end
of the reporting period.
At the end of the period, the average lease period was 26 (19) months. Lease
stock values and period data do not include the lease stock of buildings under
construction.
At the end of the period under review, open-ended leases in the lease portfolio
that could be terminated and renegotiated within the next 12 months covered
approximately 57.5% (43.4%) of the lease stock. The termination notice for
these agreements is broken down as shown in the table below.
Notice period in months March 31, 2012 March 31, 2011
% of lease stock % of lease stock
-----------------------------------------------------------
-----------------------------------------------------------
0 - 3 16.7 2.6
3 - 6 29.4 9.3
6 - 9 5.8 23.2
9 - 12 5.6 8.3
-----------------------------------------------------------
-----------------------------------------------------------
Total 57.5 43.4
Business Environment
Conditions in the Finnish office rental market were stable at the beginning of
the year. There is demand for prime locations in the market, but the supply is
low. Transactions volumes have been low during the last three years. This makes
it more difficult to get a reliable market price picture. The occupancy rates
for prime office in the Helsinki region have remained stable, but there is no
significant room for rent increases. Vacancy rates have been decreasing clearly
in the Oulu region, amounting to approximately 6% at the end of the first
quarter. There would be rental demand, especially for downtown offices, but the
supply is scant. Demand has picked up also elsewhere in Oulu, as in the
Linnanmaa district. In Tampere, mainly Finnish institutional and local
investors are willing to buy. Interest in buying is mainly focused on prime
locations. Heavy construction activity in Kuopio increased the amount of vacant
office space during 2010, but vacancy rates decreased to 5.3% and the market
situation stabilized during 2011. In Jyväskylä, the vacancy rate for offices
was 5.6% at the end of June 2011 and 6.2% at the end of 2011.
In Tallinn, the office rental market has developed positively early in the
year, and the office vacancy rate at 7% at the beginning of the year. Demand
has been particularly strong in the IT and public sectors. During the year,
demand is expected to shift outside the city center, and the vacancy rates for
prime office is estimated to remain low throughout the year. The decrease in
vacancy rates will also have a positive impact on rents, which have, in fact,
been increasing.
The St. Petersburg office market has revived, and ruble-denominated rents have
increased slightly at the year end and during the first months of the year. The
vacancy rate for office properties increased slightly towards the end of 2011,
amounting to 13.5%. In particular, the large number of completed buildings
contributed to this. However, the situation changed during the first quarter of
2012, and vacancy rates decreased to 11.7%. Office property rents were also
increasing slightly. In 2012, the demand for office space is expected to remain
stable.
Operations
The Technopolis Group operates in the real estate and the service sector, in
three geographic units: Finland, Russia, and Estonia.
Demand remained good during the first quarter in the markets where Technopolis
operates, and the company's financial occupancy rate remained stable, 94.3%
(94.5%). The company's occupancy rates are still above the average for the
office rental market.
The net sales and EBITDA of the operations in Finland developed favorably. Net
sales amounted to EUR 23.1 (20.7) million and EBITDA to EUR 11.3 (10.1)
million. Net sales increased by 11.2% and EBITDA by 12.5% compared to the first
quarter of the previous year. In particular, investments in the healthcare and
education segments generated growth. The financial occupancy rate in Finland
was 94.4% (94.6%).
In Tallinn, the net sales and EBITDA of Technopolis Ülemiste remained at a good
level. Net sales were EUR 1.2 (1.2) million and EBITDA was EUR 0.5 (0.8)
million. The decrease in EBITDA was mainly due to increased marketing expenses.
In Tallinn, the company renegotiated leases with some of its customers which
led to the termination of some leases, and the occupancy rate decreased to
90.2% (92.9%). This will however have a positive impact on rental levels, and
the occupancy rate is expected to increase already during the second quarter.
In St. Petersburg, the net sales of the Technopolis Pulkovo airport campus were
EUR 1.2 (0.3) million and EBITDA was EUR 0.3 (-0.6) million. Rents will
increase markedly as the result of lease renegotiations held early in 2012. The
full-year EBITDA is expected to remain positive. The financial occupancy rate
was 97.1% in March.
The Group's financial occupancy rates on March 31, 2012:
Q1-2012 Q4-2011 Q3-2011 Q2-2011 Q1-2011
--------------------------------------------------------------
Group 94.3% 95.1% 95.7% 93.6% 94.5%
--------------------------------------------------------------
Finland 94.4% 95.1% 95.8% 95.4% 94.6%
--------------------------------------------------------------
--------------------------------------------------------------
Oulu 92.2% 91.8% 94.7% 92.8% 92.3%
HMA 95.5% 95.3% 95.3% 96.9% 97.1%
Tampere 98.6% 98.5% 98.0% 97.3% 97.3%
Kuopio 96.1% 98.2% 97.4% 97.2% 94.4%
Jyväskylä 91.4% 96.8% 96.9% 96.2% 94.1%
Lappeenranta 94.7% 92.6% 95.6% 98.2% 98.4%
Estonia 90.2% 90.7% 94.4% 93.7% 92.9%
--------------------------------------------------------------
St. Petersburg 1) 97.1% 100.0% 95.3% 61.7% -
--------------------------------------------------------------
1) The figures for the Group's financial occupancy rates are not comparable,
as the lease stock of the St. Petersburg subsidiary has been included in the
figures from June 30, 2011.
The financial occupancy rate of Jyväskylä was affected by the commissioning of
Innova 2 on March 30, 2012, which temporarily decreased the unit's occupancy
rate with customers moving in only at the beginning of April. The pre-occupancy
rate was 93.2%.
The Group's net sales for the period under review were EUR 25.4 million (EUR
22.2 million), showing an increase of 14.5%. Rental revenue accounted for 87.4%
(86.6%) and service revenue for 12.6% (13.4%) of net sales. Like-for-like
rental growth was 6.8%, primarily due to index increases.
The Group's EBITDA was EUR 12.2 (10.3) million, an increase of 18.2%.
Breakdown of net sales and EBITDA by business function: (Figures excluding
eliminations.)
Space 1-3/2012 1-3/2011 1-12/2011
----------------------------------------
Net sales 22.2 19.3 80.7
EBITDA 13.8 11.6 52.9
----------------------------------------
EBITDA % 62.2% 60.2% 65.6%
Services 1-3/2012 1-3/2011 1-12/2011
----------------------------------------
Net sales 3.2 2.9 12.1
EBITDA 0.2 0.5 2.0
----------------------------------------
EBITDA % 6.8% 15.7% 16.4%
EBITDA's share of net sales decreased to 6.8% (15.7%) in the service business.
The decrease was due to investments in the service business and clarification
of the business area's structure. The company recruited additional personnel
and reallocated its personnel expenses.
The Group's operating profit totaled EUR 13.0 (16.0) million. The decrease in
operating profit is mainly due to the change in the fair market value of
investment properties being lower, EUR 1.2 (6.1) million. The change in the
fair market value of investment properties has no impact on the Group's net
sales, EBITDA or cash flow.
The Group's net financial expenses totaled EUR 1.4 (0.6) million. The net
financial expenses include EUR 2.1 million of unrealized exchange rate gains
due to the strengthening of the Russian ruble. EUR 1.9 million of unrealized
interest swap income was recognized in the comprehensive statement of income
for the comparison period 2011. As of May 1, 2011, Technopolis Group has
recorded interest rate swaps in accordance with the IAS 39 criteria for hedge
accounting, in order to eliminate the effect of the changes in the fair value
of derivative instruments on the Group's result and to reduce fluctuations in
fiscal results. Most of the Group's current interest rate swaps satisfy the
criteria for hedge accounting. The Group's interest fixing period was 1.6 (1.4)
years. The Group's result before taxes totaled EUR 11.5 million (EUR 15.5
million).
The Group's direct result increased by 45.3% to EUR 7.5 (5.2) million. The
increase was primarily due to the strengthening of the ruble, which had an
impact of EUR 2.1 million. The direct result shows the company's result for the
financial period, excluding changes in the fair market value of investment
properties and financial instruments during the period, as well as any
non-recurring items and tax effects related to these items.
Cash flow from operations/share totaled EUR 0.11 (0.12).
Total assets were EUR 982.8 million (EUR 847.4 million), an increase of 16.0%.
The Group's equity ratio at the end of the period was 34.9% (36.6%).
The fair market value of the Group's investment properties at the end of the
period was EUR 932.8 (804.8) million, of which completed investment properties
accounted for EUR 883.2 (737.1) million investment properties under
construction for EUR 49.6 (67.8) million.
The fair values of investment properties increased slightly. The increase was
primarily due to properties under construction. Net market yields on investment
properties and properties under construction are calculated by taking the
average of the upper and lower ranges of net market yield, as reported by two
independent appraisal agencies for each individual region. On March 31, 2012,
the average net yield for Group properties was 8.0% (7.9%). The average
ten-year occupancy rate used in the fair value calculation was 95.1%. The Group
has set a higher target for the financial occupancy rate than this. Over the
period of 2002-2011, the Group's average occupancy rate was 96.2%.
The Group's total rentable space at the end of the period was 595,200 (527,500)
square meters, with 61,500 (71,000) square meters under construction. The
Group's financial occupancy rate at the end of the period was 94.3% (94.5%).
The financial occupancy rate depicts rental revenues from the properties as a
percentage of the aggregate of the rents for occupied premises and the
estimated market rent for vacant space. The lease stock held by the Group
totaled EUR 215.6 (129.6) million at the end of the reporting period.
Geographically, the Group's property portfolio is diversified between the Oulu
region, the Helsinki Metropolitan Area, Jyväskylä, Kuopio, Lappeenranta,
Tampere, St. Petersburg, and Tallinn. No single customer accounts for more than
3% of the Group's net sales. The Group has a total of approximately 1,400
customers across a wide range of sectors.
Technopolis facilities are located next to good traffic connections, primarily
comprising university, airport and downtown campuses.
Investment properties Fair value, Net yield m2
March 31, 2012 EUR million requirement, %
--------------------------------------------------------------------------------
Finland Oulu 229.2 8.3 192,900
HMA 179.7 7.0 77,600
Tampere 134.4 7.3 70,300
Kuopio 95.7 8.2 57,500
Jyväskylä 96.8 7.8 56,700
Lappeenrant 29.5 8.8 27,300
a
Finland, 765.3 7.8 482,300
total
Estonia Tallinn 63.8 8.4 79,200
Russia St. 54.0 10.1 24,100
Petersburg
--------------------------------------------------------------------------------
Completed investment Total 883.2 8.0 585,600
properties
--------------------------------------------------------------------------------
Investment properties Total 6 49.6 6.1-10.1% 61,500
under construction 1) properties
--------------------------------------------------------------------------------
Investment properties completed and 932.8 647,100
under construction, total
--------------------------------------------------------------------------------
--------
Other properties (holdings, rented) 9,600
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--------------------------------------------------------------------------------
1) Investment properties under construction have been valued at fair value and
recognized on the basis of their rate of completion on the balance sheet date.
Major Investments and Development Projects
At the end of the period under review, Technopolis had office space under
construction in the Helsinki Metropolitan Area, Tampere, Kuopio, and Jyväskylä
in Finland as well as in Tallinn, Estonia and St. Petersburg, Russia. The
projects are expanding existing centers.
Projects completed during 2012:
Campus Area Occupancy m2 EUR Initial Complet
type rate % million yield, % ed
--------------------------------------------------------------------------------
Innova 2 Downtown Jyväsky 93.2 9,200 20.1 8.1 3/2012
1) lä
Hermia 15 Universi Tampere 98.4 4,800 10.9 7.9 1/2012
B ty
Viestikat Other Kuopio 79.0 3,400 5.0 9.6 1/2012
u 2B
--------------------------------------------------------------------------------
1) Innova 2 in Jyväskylä was commissioned on March 30, 2012, occupancy rate as
per April 1.
Projects under construction on March 31, 2012:
Campus Area m2 EUR Pre-occupancy Initial Due for
type milli rate % March yield % complet
on 31, 2012 ion
--------------------------------------------------------------------------------
Ruoholaht Downto HMA 9,000 27.7 53.3 6.7 6/2012
i 2 wn
Yliopisto Downto Tampere 7,900 22.5 50.0 6.9 10/2012
nrinne 2 wn
Viestikat Other Kuopio 4,800 8.5 53.0 8.2 12/2012
u 7B
Innova 4 Downto Jyväsky 8,900 23.0 25.0 7.8 9/2013
wn lä
Pulkovo 2 Airpor St. 22,700 42.0 - 10.6 9/2013
t Peters
burg
Löötsa 8C Airpor Tallinn 8,200 8.3 50.0 8.5 1/2013
t
--------------------------------------------------------------------------------
Planned projects as of March Campus Area m2 EUR Due for
31, 2012: type million completion
--------------------------------------------------------------------------------
Löötsa 8A Airport Tallin 8,900 11.9 10/2013
n
Löötsa 8B Airport Tallin 8,900 12.4 10/2013
n
--------------------------------------------------------------------------------
Strategy and Financial Targets
In September 2011, the company's Board of Directors confirmed the company's
financial targets for the period 2012-2016 as follows:
- net sales and EBITDA by an annual average of 15%
- over EUR 50 million net sales outside Finland by 2016
- at least 6% return on capital employed annually
- equity ratio over 35% over the cycle
- the aim is to distribute 40%-50% of net profit excluding changes in fair
value and their tax effects as dividends
The company aims to strengthen the contribution of the health and education
sectors in its customer portfolio by investing in these segments and specific
services employed by them. Technopolis aims to diversify its customer portfolio
both between business sectors and regionally.
Technopolis has been continuously analyzing potential international investment
targets in the Baltic Sea region for growth. The key criteria for potential
acquisitions are the sufficient size and growth potential of the target,
excellent location in growth centers, high-quality and flexible property
portfolio, and positive cash flow. In addition, the project must have a
positive impact on earnings per share, and the customer base of the property
must match the Technopolis concept. The company is also investigating
opportunities for selling some locations that are not suitable for its concept.
All new Technopolis buildings and potential existing properties will apply for
LEED environmental certification.
Financing
The Group's total assets were EUR 982.8 (847.4) million, of which liabilities
totaled EUR 641.8 (538.8) million. The Group's equity ratio was 34.9% (36.6%).
At the end of the period, the Group's net gearing was 161.0% (149.5%). The
Group's equity per share was EUR 5.15 (EUR 4.70).
At the end of the period, the Group's interest-bearing liabilities amounted to
EUR 555.1 million (EUR 466.1 million), and the average capital-weighted loan
period was 8.5 years (8.4 years). The average interest rate on interest-bearing
liabilities was 2.45% (2.55 %) on March 31, 2012. Of interest-bearing
liabilities, 64.9% (69.4%) were floating rate loans and 35.1% (30.6%) were
fixed rate loans at the end of the period.
At the end of the reporting period, funds available to Technopolis consisted of
EUR 140.7 (95.7) million in untapped credit facilities, and cash amounting to
EUR 6.3 (4.9) million. The credit facilities contained a EUR 139.7 million (EUR
85.0 million) credit line and a EUR 1.0 million (EUR 10.7 million) revolving
credit facility. Use of the available credit limit facilities requires
collateral arrangements. In addition, the company has a EUR 120.0 (120.0)
million commercial paper program, of which EUR 20.0 million was outstanding at
the end of the reporting period.
During the 12-month period following the period under review, EUR 70.3 (62.1)
million in existing interest-bearing loans will mature.
The company's five largest creditors on March 31, 2012 were the European
Investment Bank, EUR 141.3 (83.7) million; Nordea, EUR 88.2 (84.6) million;
OP-Pohjola Group, EUR 65.5 (45.2) million; Sampo, EUR 64.2 (70.4) million; and
Handelsbanken, EUR 49.8 (29.7) million.
Technopolis prepared for a potential increase in interest rates by extending
rate fixing periods by carrying out interest rate swaps. The Group's interest
fixing period was 1.6 (1.4) years at the end of the period. A one percentage
point change in market rates would cause a EUR 2.6 (2.5) million change in
interest costs per annum. At the end of the reporting period, there were
interest rate swaps covering EUR 163.0 million (EUR 107.9 million) of
principal.
The Group's interest coverage ratio was 3.4 (4.1). The interest coverage ratio
indicates the relation between EBITDA and accrual-based interest expenses.
The Group's loan-to-value ratio, that is, the ratio of interest-bearing
liabilities to the fair value of investment properties and properties under
construction, was 62.3% (57.6%). The Group had interest-bearing liabilities
from credit institutions worth EUR 498.7 (411.4) million, of which EUR 348.3
(183.4) million include covenants related to equity ratio, debt service ratio
or loan-to-value. Compared to the previous quarter the increase was EUR 95.4
million, translating into 37.7%, when the company reported covenant-related
loans worth of EUR 252.9 million. The EUR 25 million increase was due to new
covenant carrying loans and a EUR 70.4 million increase which was related to
findings from an internal auditing of loan agreements.
Loans amounting to EUR 308.5 (142.5) million include covenants relating to the
equity ratio. A decline in the equity ratio may lead to higher interest rate
margins or premature repayment in these loans. Potential changes in the margins
take effect in accordance with the contractual provisions of each loan. Of
these loans, EUR 119.2 (47.9) million includes a repayment term. The repayment
term is met if the equity ratio falls below 30%.
The Group's equity ratio declined at the end of the reporting period to 34.9%
(36.6%). With an equity ratio level of 33%-35% the equity ratio covenant impact
on the Group's interest rate expenses is EUR 0.1 million per annum. If the
equity ratio falls below 33%, the impact on the Group's interest expenses will
be EUR 0.4 (0.4) million per annum.
The covenant relating to the debt service ratio and loan-to-value is included
in the EUR 39.7 (40.9) million borrowings of Technopolis Ülemiste (Group share
of ownership 51%). In terms of the aforementioned loan amount, the subsidiary's
debt service ratio must be at a minimum of 1.1 and its loan-to-value must not
exceed 70%.. If the covenants are breached, the lender may terminate the loan.
At the end of the reporting period, Technopolis Ülemiste's debt service ratio
was 1.5 (1.2) and loan-to-value was 53.4% (54.4%).
Bank guarantees amounting to EUR 146.0 million have been given as security for
the EUR 141.3 million in loans granted by the European Investment Bank (EIB).
Of the loans granted by the EIB, EUR 106.3 million has been covered with
shorter bank guarantee agreements than the actual loan period. If the bank
guarantees cannot be renewed, it will be necessary to rearrange the loans. EUR
10.0 million of the bank guarantees will expire by the end of 2013, and the
plan is to extend them.
The financing of Technopolis Pulkovo has been arranged through a European Bank
for Reconstruction and Development (EBRD) with a loan of EUR 56.3 million and
the parent company's investments in shareholders' equity.
On May 11, 2011, the Finnish Financial Supervisory Authority approved
Technopolis' registration document (prospectus). The company's policy is to
update the registration document annually. The registration document is valid
for 12 months following its publication.
Evaluation of Operational Risks and Uncertainties
Technopolis' most significant business risks relate primarily to general
economic development associated with financing and customers as well as
international business risks.
The objective of interest rate risk management is to mitigate the negative
impact of market rate fluctuations on the Group's earnings, financial position,
and cash flow. If necessary, the company uses forwards, interest rate swaps and
interest rate options to hedge interest rate risks. The company's policy
concerning interest rate risks also aims to diversify the interest rate risk of
loan contracts over different loan periods based on the prevailing market
situation and the interest rate forecast created by the company.
Indicative of the structure of Technopolis' loan portfolio at the end of the
period is the equation that a one percentage point change in the money market
rates would change interest rate costs by EUR 2.6 million per annum.
Because of the interest rate risk associated with loans, a policy of
diversifying interest bases is pursued. 9.5% of interest-bearing liabilities
were pegged to the under 3-month Euribor rate and 55.3% were pegged to the 3-12
month Euribor rate. Of the interest-bearing liabilities, 35.1% were fixed-rate
loans with maturities of 13-60 months.
The objective of refinancing risk management is to ensure that the Group's loan
portfolio is sufficiently diversified with regard to repayment schedules and
financing instruments. The average capital-weighted outstanding loan period was
8.5 years. In order to manage financing risk, Technopolis draws upon the
resources of a wide range of financers and a variety of financing instruments,
and maintains a sufficient degree of solvency.
Uncertainty in the financial markets may adversely affect the availability of
growth financing and refinancing and their margins in the future.
The differences between Russian, Estonian, and Finnish legislation and
administrative procedures may create risks.
Changes in the exchange rates between the Russian ruble and the euro may have
an effect on the company's financial performance and operations.
Ruble-denominated transactions are recorded at the exchange rate of the
transaction date. Any translation differences are entered in the comprehensive
income statement under other operating expenses or finance income and expenses
according to the type of transaction involved.
Customer risk management aims to minimize the negative impact of potential
changes in the customers' financial position on the company's business and
financial performance. Customer risk management focuses on having a profound
understanding of the customer's business and active monitoring of customer
information. Customer risks are diversified by acquiring customers from many
sectors. As part of client risk management, Technopolis leases include rental
security arrangements.
The company's leases fall into two categories: fixed-term and open-ended. The
company aims to apply both lease types depending on the market situation, the
property in question, and the sector in which the internal customer operates.
Declining financial occupancy rates may reduce rental and service revenue and
profit, and reduce the fair value of investment properties and, thus, the
equity ratio. The current lease structure allows customers to flexibly adjust
the space they need as their business needs change. Although the flexibility of
the lease structure may pose a risk to the Group, it is an essential element of
Technopolis' service concept. The company has solid and long-term experience in
this business model over a wide variety of economic cycles.
In new construction projects, Technopolis focuses on quality and the management
of the property's entire life cycle. In the design phase, consideration is
given to the property's maintenance and repair requirements in order to
implement environmentally sustainable solutions for energy consumption,
adaptability of premises, and recycling potential. When purchasing properties,
Technopolis carries out standard property and environmental audits before
committing to the transaction. All properties are covered by full value
insurance.
Changes in market yields may have a significant impact on the company's
financial performance through the fair value of investment properties. As the
yields increase, the fair value of properties decreases. Conversely, as the
yields decrease, the fair value of properties increases. Such changes either
decrease or increase the Group's operating profit. Changes in market yields do
not have any direct impact on the company's net sales, EBITDA, or cash flow,
but a negative change in the value of investment properties may reduce the
company's equity ratio and, as a result of this, covenant terms of the leases
may be met. In that case, the change in value will have an impact on the cash
flow and result for the period.
Organization and Personnel
The CEO of Technopolis Plc is Keith Silverang. Mr. Reijo Tauriainen, CFO, is
the company's Deputy CEO.
The Group Management Team comprises Keith Silverang, Reijo Tauriainen, Marko
Järvinen, Satu Eskelinen, Sami Juutinen, Kari Kokkonen, and Jukka Rauhala. The
Technopolis line organization consists of three geographical units: Finland,
Russia, and Estonia. The Group organization also has matrix support functions
for the Group's real estate development, services, and support functions.
During the period, the Group employed an average of 176 (144) people. Space
operations employed 97 (85) people and the service business 79 (59) people. At
the end of the period under review, the Group's personnel totaled 178 (150).
The increase in the number of personnel is mainly due to strengthening the
central corporate functions and services.
Environment
The key objectives of the company's environmental strategy for 2011-2015
include reducing comparable energy consumption by 10%, water consumption by 8%
and carbon dioxide emissions by 20% compared to 2010. As part of this, the
company has adopted quarterly reporting of allocated consumption. The initial
quarterly comparison includes the Finnish units, and comparison is made to the
previous year. Technopolis publishes an extensive environmental report once a
year.
1-3/2012 1-3/2011 % change
------------------------------------------------------------------------
------------------------------------------------------------------------
Energy consumption, kWh/gross m² 77.3 71.8 7.7
Water consumption, m³/person 1.6 1.3 23.1
Carbon dioxide emissions, CO2e kg/gross m² 10.8 21.2 -49.1
------------------------------------------------------------------------
Reasons for the increase in energy consumption allocated for gross floor area
included growth project-related construction operations on existing campuses,
which temporarily increase unallocated energy consumption. In addition, the
shift of the company's customer base towards the health care and educational
sector has increased the operational opening hours of the properties, the
number of people working there and changed the nature of operations taking
place in the properties, which has contributed to the increase in water and
energy consumption. The significant decrease in carbon dioxide emissions is
primarily due to the Finnish campuses adopting so-called “green electricity” as
of January 1, 2012.
Group Structure
Technopolis Group comprises the parent company Technopolis Plc, which has
operations in Espoo, Helsinki, Jyväskylä, Kuopio, Lappeenranta, Oulu, Tampere,
and Vantaa, and as the largest subsidiaries the mutual real estate company
Innopoli II in Espoo (wholly owned), mutual real estate company Finnmedi 6-7
(wholly owned), and mutual real estate company Hermia (65.0 %) in Tampere, as
well as mutual real estate companies Microkatu 1 (91.37%), Viestikatu 7 (wholly
owned) and Viestikatu 1-3 (wholly owned) in Kuopio. In addition, the parent
company has five other subsidiaries in Finland. A mutual real estate company
called Innopoli 3 was established during the period.
Technopolis has established two Russian companies in St. Petersburg,
Technopolis Neudorf LLC and Technopolis St. Petersburg LLC, both wholly owned.
In Estonia, Technopolis has Technopolis Baltic Holding OÜ (wholly owned), which
manages the holdings in Technopolis Ülemiste AS (51%).
The parent company has non-controlling interests in the associated companies
Kiinteistö Oy Bioteknia (28.5%), Iin Micropolis Oy (25.7%), Jyväskylä
Innovation Ltd (24%), and Kuopio Innovation Ltd (24%). In addition, the parent
company has a 35% holding in Otaniemi Development Ltd and a 50% holding in
Rehaparkki Oy.
Annual General Meeting 2012
The Annual General Meeting of Shareholders (AGM) of Technopolis Plc was held in
Espoo on March 27, 2012.
Resolutions of the Annual General Meeting
The AGM 2012 adopted the Group and parent company's financial statements for
the financial year 2011 and discharged the company's Board of Directors and CEO
from liability. The AGM decided, in accordance with the proposal of the Board
of Directors, to distribute a dividend of EUR 0.20 per share. The dividend was
paid to shareholders who were registered in the company shareholders register
kept by Euroclear Finland Ltd on the record date of March 30, 2012. The
dividend payment date was April 11, 2012.
Board of Directors and remuneration of the members of the Board of Directors
The number of members on the Board of Directors was confirmed at six.
Carl-Johan Granvik, Matti Pennanen, Teija Andersen, Pertti Huuskonen, Pekka
Korhonen, and Timo Ritakallio were elected members of the Board for a term of
office expiring at the end of the next Annual General Meeting. Carl-Johan
Granvik was elected Chairman of the Board of Directors and Matti Pennanen was
elected Vice Chairman.
It was resolved to pay the members of the Board of Directors annual
remuneration as follows: EUR 50,000 to the Chairman of the Board, EUR 30,000 to
the Vice Chairman of the Board and EUR 25,000 to each of the other members of
the Board. In addition, it was decided that for participation in meetings of
the Board of Directors each member of the Board of Directors shall, in addition
to the annual remuneration, be paid a fee of EUR 600 and the Chairman of the
Board of Directors a fee of EUR 1,200 for each Board meeting and the chairmen
of the committees a fee of EUR 800 and each member of the committees a fee of
EUR 600 for each meeting of the committees, and that the travel expenses of the
members of the Board of Directors and the members of the committees shall be
compensated in accordance with the company's travel policy.
The AGM decided that the annual remuneration is paid on the condition that the
Board member commits to using 50% of his or her annual remuneration to acquire
Technopolis Plc shares on the market at the price determined in public trading.
The shares are to be acquired within three weeks of the publication of the
Interim Report for the period January 1 - March 31, 2012. If the remuneration
cannot be paid as shares in the company, it will be paid fully in cash. Board
members are not allowed to transfer the shares obtained as annual remuneration
before their membership in the Board has ended.
In the first organizational meeting of the Board of Directors following the
AGM, the Board appointed an audit committee and a remuneration committee from
among its number. The Audit Committee consists of Carl-Johan Granvik, chair,
and Pertti Huuskonen and Pekka Korhonen. The remuneration committee consists of
Timo Ritakallio, chair, and Teija Andersen and Matti Pennanen. The Board of
Director's opinion is that all of the Board members, apart from Pertti
Huuskonen, are independent of the company, and excluding Timo Ritakallio, of
its major shareholders.
Auditor
KPMG Oy Ab, authorized public accountants, was elected as auditor of the
company, with Mr. Ari Eskelinen, APA, as the Auditor-in-Charge.
Shareholders' Nominating Committee
The Annual General Meeting decided to form a shareholders' nominating committee
to prepare proposals for the next Annual General Meeting on the composition and
remuneration of the Board of Directors. The Nominating Committee is composed of
three members representing the three largest shareholders, who may not be
members of the Board of Directors of the company, and the Chairman of the Board
of Directors as an expert member and secretary to the committee. The member
appointed by the largest shareholder acts as Chairman of the Committee. The
term of office of the Nominating Committee will continue until a new nomination
committee is appointed, unless the general meeting resolves otherwise. The
Nominating Committee prepares the above-mentioned proposals also for
extraordinary general meetings, if needed. A person who could not, according to
the applicable Finnish Corporate Governance Code, be appointed to a nominations
committee of the Board of Directors, cannot be appointed to the nominating
committee. The shareholders' nominating committee will also fulfill the
requirements of independence in relation to the company as set out in the Code.
Based on shareholding on October 1, 2011, members of the Nominating Committee
are Risto Murto, Vice President of Varma Mutual Pension Insurance Company as
the chairman, and Harri Sailas, President and CEO of Ilmarinen Mutual Pension
Insurance Company and Timo Kenakkala, Deputy Mayor of City of Oulu. In
addition, Carl-Johan Granvik, Chairman of the Board of Directors of Technopolis
Plc, acts as the Nominating Committee's expert member and secretary.
Board Authorizations
The AGM authorized the Board of Directors to decide on the repurchase and/or on
the acceptance as pledge of the company's own shares as follows.
The amount of own shares to be repurchased and/or accepted as pledge shall not
exceed 6,338,500 shares, which corresponds to approximately 10 per cent of all
the shares in the company. Under the authorization, the company's own shares
may only be purchased using unrestricted equity. The company's own shares may
be purchased at a price set in public trading on the date of purchase or at a
price otherwise determined on the market. The Board of Directors decides how
own shares will be repurchased and/or accepted as pledge. Own shares can be
repurchased using, inter alia, derivatives. The company's own shares can be
repurchased otherwise than in proportion to the shareholdings of the
shareholders (directed repurchase). The authorization is effective until the
end of the next Annual General Meeting; however, no longer than until June 30,
2013.
The Annual General Meeting authorized the Board of Directors to decide on the
issuance of shares and other special rights entitling to shares referred to in
Chapter 10 Section 1 of the Limited Liability Companies Act as follows:
Pursuant to this authorization, the maximum number of shares to be issued will
be 12,677,000, equaling approximately 20% of the company's shares. The Board of
Directors decides on all the terms and conditions of the issuance of shares and
of special rights entitling to shares. The issuance of shares and of special
rights entitling to shares may be carried out in deviation from the
shareholders' pre-emptive rights (directed issue). The Board of Director's may
decide on the company's share-based incentive schemes. However, no more than
350,000 shares may be issued on the basis of the authorization for the purpose
of implementing incentive schemes decided upon by the General Meeting or the
Board of Directors. The authorization is effective until the end of the next
Annual General Meeting, however, no longer than until June 30, 2013, and it
cancels the authorization given to the Board of Directors by the General
Meeting on March 30, 2011 to decide on the issuance of shares as well as the
issuance of other special rights entitling to shares.
Stock-Related Events and Disclosures of Changes in Holdings
The number of the company's shares is 63,385,044 shares. The shares are in a
single series, and each share entitles the holder to one vote at the Annual
General Meeting. The company's share capital is EUR 96,913,626.29, and the
subscription price of new shares is registered in the company's unrestricted
equity reserve. If the authorization regarding the issuance of shares is
exercised in full, the nominal dilution effect will be 20%.
On February 2, 2012, Varma Mutual Pension Insurance Company announced that its
direct holding of Technopolis Plc's share capital and votes had increased above
two twentieths (10%) as a result of a share transaction carried out on February
2, 2012. After the transaction, the proportion of Technopolis Plc's share
capital and votes controlled directly by Varma Mutual Pension Insurance Company
is 6,372,725 shares and 10.05%, respectively.
According to information received on March 13, 2012 from BNP Paribas Investment
Partners, the proportion of Technopolis Plc's shares and votes held by its
funds had decreased below one tenth (10%) on October 20, 2010 and below one
twentieth (5%) on January 17, 2012. The proportion of Technopolis Plc's shares
and votes directly and indirectly controlled on March 9, 2012 by BNP Paribas
Investment Partners and its funds was 2,653,086 shares and 4.19%, respectively.
Indirect holdings were 70,717 shares, which represents 0.001% of shares and
votes.
Post-Fiscal Events
On April 23, 2012 Technopolis announced the listing of Technopolis 2007C Stock
Options on the Stock Exchange. The subscription period for 2007C stock options
decided upon by the Annual General Meeting of Technopolis Plc on March 22, 2005
will commence in accordance with the option program's terms and conditions on
May 1, 2012 and Technopolis has applied for entry of these stock options on the
trading list of the NASDAQ OMX Helsinki exchange. The trading of 2007C stock
options on the NASDAQ OMX Helsinki exchange will commence on May 2, 2012.
Future Outlook
The Group's management estimates that net sales and EBITDA will grow 12%-15% in
2012 over the previous year.
The Group's financial performance depends on the development of the overall
business environment, customer operations, as well as the yield requirements
from the financial markets and properties.
Espoo, April 27, 2012
TECHNOPOLIS PLC
Board of Directors
Additional information:
Keith Silverang
CEO
tel. +358 40 566 7785
APPENDICES:
A presentation of the Interim Report is available on the company's website at
www.technopolis.fi/for investors/presentations. The Interim Report is available
in PDF format on the company's website at www.technopolis.fi. To request a
hardcopy of the document, please call +358 46 712 000 /Technopolis info.
Technopolis offers a service for receiving reports and releases at the
company's website at www.technopolis.fi/for_investors/presentations.
Individuals who sign up with the service will receive the company's bulletins
electronically.
Tables
The accounting policies applied in the Financial Report and the formulas for
calculating key indicators are the same as in the 2011 annual report.
Technopolis Group employs derivative instruments (mainly rate swaps) for
hedging risks relating to market rate fluctuations. As of May 1, 2011, the
Group implements hedge accounting in accordance with IAS 39. Consequently,
changes in the fair value of derivative instruments designated as effective
hedges are recognized directly as comprehensive income in the consolidated
financial statements. Changes in the fair value of ineffective hedges are
recognized immediately in the income statement. Most of the Group's current
interest rate swaps meet the criteria for hedge accounting.
The financial report has been prepared in accordance with the IFRS recognition
and valuation principles; the IAS 34 requirements have also been complied with.
The figures are unaudited.
Technopolis Group:
STATEMENT OF COMPREHENSIVE INCOME 1-3/ 1-3/ 1-12/
Currency unit: EUR million 2012 2011 2011
--------------------------------------------------------------------------------
Net sales 25,43 22,21 92,83
Other operating income 1) 0,21 0,40 1,22
Other operating expenses -13,41 -12,27 -46,52
Change in fair value of investment properties 1,20 6,13 26,28
Depreciation -0,46 -0,43 -1,83
---------------------------------------------------------
-----------------------
Operating profit/loss 12,97 16,05 71,99
Finance income and expenses -1,45 -0,55 -11,98
---------------------------------------------------------
-----------------------
Result before taxes 11,52 15,50 60,01
Current taxes -2,68 -3,98 -11,22
--------------------------------------------------------- -----------------------
Net result for the period 8,84 11,52 48,80
Other comprehensive income items
Translation difference 1,37 0,33 0,06
Available-for-sale financial assets 0,03 0,02 0,05
Derivatives -0,95 0,00 -4,39
Taxes related to other comprehensive income items 0,23 0,00 1,13
--------------------------------------------------------------------------------
Other comprehensive income items after taxes for the 0,68 0,34 -3,15
period
Comprehensive income for the period, total 9,52 11,86 45,64
Distribution of profit for the period:
To parent company shareholders 8,51 11,17 46,70
To non-controlling shareholders 0,33 0,35 2,10
--------------------------------------------------------------------------------
8,84 11,52 48,80
Distribution of comprehensive income for the period:
To parent company shareholders 9,19 11,51 43,55
To non-controlling shareholders 0,33 0,35 2,10
--------------------------------------------------------------------------------
9,52 11,86 45,64
Earnings per share based on result of flowing to parent
company shareholders:
Earnings/share, basic (EUR) 0,13 0,18 0,74
Earnings/share, adjusted for dilutive effect (EUR) 0,13 0,18 0,73
1) Other operating income consists of operating subsidies received for
development services; an equal amount is recorded under operating expenses for
development services.
STATEMENT OF FINANCIAL POSITION, ASSETS
Currency unit: EUR million 03/31/20 03/31/20 12/31/20
12 12 11
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
Intangible assets 4,22 4,01 6,72
Tangible assets 11,98 8,64 12,02
Completed investment properties 883,16 737,08 843,78
Investment properties under construction 49,61 67,75 61,70
Investments 12,65 13,06 12,21
Deferred tax assets 2,33 4,18 2,57
--------------------------------------------------------------------------------
Non-current assets 963,95 834,72 938,99
--------------------------------------------------------------------------------
Current assets 18,84 12,71 23,89
--------------------------------------------------------------------------------
Assets, total 982,79 847,43 962,88
--------------------------------------------------------------------------------
STATEMENT OF FINANCIAL POSITION, SHAREHOLDERS'
EQUITY AND LIABILITIES
Currency unit: EUR million 03/31/20 03/31/20 12/31/20
12 12 11
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity
Share capital 96,91 96,91 96,91
Premium fund 18,55 18,55 18,55
Other funds 80,41 84,23 81,10
Translation difference 1,02 0,33 -0,64
Other shareholders' equity 121,31 86,80 87,42
Retained earnings 8,51 11,17 46,70
--------------------------------------------------------------------------------
Parent company's shareholders' interests 326,71 298,00 330,04
Non-controlling interests 14,24 10,60 13,13
--------------------------------------------------------------------------------
Shareholders' equity, total 340,96 308,60 343,17
Liabilities
Non-current liabilities
Interest-bearing liabilities 485,36 404,00 468,84
Non-interest-bearing liabilities 0,81 1,15 1,04
Deferred tax liabilities 47,18 43,68 45,97
--------------------------------------------------------------------------------
Non-current liabilities, total 533,36 448,83 515,85
Current liabilities
Interest-bearing liabilities 69,74 62,14 78,87
Non-interest-bearing liabilities 38,73 27,86 24,99
--------------------------------------------------------------------------------
Current liabilities, total 108,47 90,00 103,86
Liabilities, total 641,83 538,83 619,71
--------------------------------------------------------------------------------
Shareholders' equity and liabilities, total 982,79 847,43 962,88
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS 1-3/ 1-3/ 1-12/
Currency unit: EUR million 2012 2011 2011
-----------------------------------------------------------------------------
Cash flows from operating activities
Net result for the period 8,84 11,52 48,80
Adjustments:
Change in fair value of investment properties -1,20 -6,13 -26,28
Depreciation 0,46 0,43 1,83
Share of profits of associates -0,04 -0,03
Gains from disposals 0,03
Other adjustments for non-cash transactions 0,12 0,14 0,60
Financial income and expenses 1,45 0,58 12,01
Taxes 2,68 3,98 11,22
Increase / decrease in working capital 0,18 1,39 -0,90
Interests received -0,13
Dividends received 0,03 0,06 0,18
Interests paid and fees 0,01
Other financial items in operating activities -3,47 -2,25 -10,24
Financial income and expenses -0,63 -0,63 -2,40
Taxes paid -1,15 -1,10 -4,35
-----------------------------------------------------------------------------
Net cash provided by operating activities 7,17 7,95 30,47
Cash flows from investing activities
Investments in other securities -0,02 -0,01
Investments in investment properties -19,87 -15,38 -98,13
Investments in tangible and intangible assets -0,68 -0,15 -4,36
Granted loans -0,08
Repayments of loan receivables 0,01 0,03 0,13
Proceeds from sale of investments 0,41
Proceeds from sale of tangible and intangible assets 0,00 0,04 0,16
Acquisition of subsidiaries -0,18
Acquisition of associates -0,54 -0,72
Proceeds from sales of associates 0,87
-----------------------------------------------------------------------------
Net cash used in investing activities -21,26 -15,48 -101,74
Cash flows from financing activities
Increase in long-term loans 36,99 15,81 113,32
Decrease in long-term loans -25,04 -12,83 -36,83
Dividends paid -10,77
Capital investment by the minority 0,78 0,78
Change in short-term loans -5,01 4,99 12,87
-----------------------------------------------------------------------------
Net cash provided by financing activities 7,72 7,97 79,38
Net increase/decrease in cash assets -6,37 0,44 8,10
Effects of exchange rate fluctuations on cash held 0,19 -0,03 -0,08
Cash and cash equivalents at period-start 12,51 4,49 4,49
Cash and cash equivalents at period-end 6,33 4,90 12,51
STATEMENT OF
CHANGES IN
EQUITY
Equity attributable to owners of the parent
-----------------------------------------------
Share Premiu Other Trans-lat Retain-e Non-contr Sharehol
capital m fund funds ion d olling ders'
diffe-ren earn-ing share-hol equity
ce s ders
Equity 96,91 18,55 84,22 97,67 10,25 307,60
January 1,
2011
Comprehensiv
e income
Net profit 11,17 0,35 11,52
for the
period
Other
comprehensi
ve income
items
Translation 0,33 0,33
difference
Available-fo 0,01 0,01
r-sale
financial
assets
-------------------------------------------------------------------
Comprehensiv 0,01 0,33 11,17 0,35 11,86
e income for
the period
Related
party
transaction
s
Dividend -10,78 -10,78
Other -0,09 -0,09
changes
-------------------------------------------------------------------
Related -10,86 0,00 -10,86
party
transaction
s
-------------------------------------------------------------------
Equity March 96,91 18,55 84,23 0,33 97,98 10,60 308,60
31, 2011
-------------------------------------------------------------------
-------------------------------------------------------------------
Equity 96,91 18,55 81,10 -0,64 134,12 13,13 343,17
January 1,
2012
Comprehensiv
e income
Net profit 8,51 0,33 8,84
for the
period
Other
comprehensi
ve income
items
Translation 1,37 1,37
difference
Derivatives -0,71 -0,71
Available-fo 0,03 0,03
r-sale
financial
assets
-------------------------------------------------------------------
Comprehensiv -0,69 1,67 8,51 0,33 9,52
e income for
the period
Related
party
transaction
s
Dividend -12,68 -12,68
Change in ownership 0,06 0,06
interests in
subsidiaries 2)
Other changes 0,10 0,78 0,88
Related party -12,52 0,78 -11,73
transactions
----------------------------------------------------------------
Equity March 96,91 18,55 80,41 0,73 130,11 14,24 340,96
31, 2012
----------------------------------------------------------------
2) Acquisition of non-controlling interests without change in control
Financial Information by Segment
Technopolis Group has three operating segments based on geographical units:
Finland, Russia and Estonia. The segment division presented in this interim
report is based on the Group's existing internal reporting procedures and the
organization of the Group's operations. The Group's net sales or EBITDA do not
include significant inter-segment items.
SEGMENT INFORMATION 1-3/ 1-3/ 1-12/
Currency unit: EUR million 2012 2011 2011
--------------------------------------------------
Net sales
Finland 23,05 20,73 85,19
Russia 1,20 0,31 2,93
Estonia 1,18 1,16 4,67
Unallocated 0,01 0,01 0,04
Total 25,43 22,21 92,83
--------------------------------------------------
EBITDA
Finland 11,35 10,09 44,82
Russia 0,32 -0,56 -0,23
Estonia 0,54 0,80 3,13
Unallocated 0,02 0,01 -0,18
Total 12,23 10,34 47,54
--------------------------------------------------
Assets
Finland 853,92 732,39 840,19
Russia 70,36 52,24 62,52
Estonia 82,03 73,94 79,04
Eliminations -23,52 -11,14 -18,87
Total 982,79 847,43 962,88
--------------------------------------------------
Direct and Indirect Result
Technopolis presents its official financial statements by applying the IFRS
standards. The statement of comprehensive income includes a number of items
unrelated to the company's actual business operations. Therefore, the company
presents its direct result, which better reflects its real result.
The direct result presents the company's financial result for the period
excluding the change in the fair value of investment properties, the change in
the fair value of financial instruments and any non-recurring items, such as
gains and losses on disposals. As the company had interest rate and currency
swaps in 2011 that did not satisfy the IFRS criteria for hedge accounting, the
changes in the fair value of these financial instruments are recognized in the
statement of comprehensive income. Additionally, the statement of comprehensive
income showing the direct result presents the related taxes and deferred tax
assets and liabilities.
Items excluded from the direct result and their tax effects are presented in
the statement of income showing the indirect result. Earnings per share have
been calculated both from the direct and indirect results in accordance with
the instructions issued by the European Public Real Estate Association EPRA.
The direct and indirect result and the earnings per share calculated from them
are consistent with the company's financial result and earnings per share for
the period.
Technopolis Group
DIRECT RESULT 1-3/ 1-3/ 1-12/
Currency unit: EUR million 2012 2011 2011
--------------------------------------------------------------------------------
Net sales 25,43 22,21 92,83
Other operating income 1) 0,19 0,39 1,12
Other operating expenses -13,41 -12,27 -46,49
Depreciation -0,46 -0,43 -1,83
--------------------------------------------------------------------------------
Operating profit/loss 11,75 9,90 45,64
Finance income and expenses, total -1,45 -2,41 -13,68
--------------------------------------------------------------------------------
Taxes for direct result items 10,31 7,50 31,95
Result before taxes -2,45 -1,96 -5,23
Non-controlling interests -0,33 -0,35 -2,10
--------------------------------------------------------------------------------
Direct result for the period 7,52 5,18 24,62
INDIRECT RESULT
Non-recurring items 0,01 0,01 0,07
Change in fair value of investment properties 1,20 6,13 26,28
--------------------------------------------------------------------------------
Operating profit/loss 1,22 6,14 26,36
Change in fair value of financial instruments 1,86 1,71
--------------------------------------------------------------------------------
Result before taxes 1,22 8,01 28,06
Taxes for indirect result items -0,23 -2,01 -5,99
--------------------------------------------------------------------------------
Indirect result for the period 0,99 5,99 22,08
Result for the period to the parent company 8,51 11,17 46,70
shareholders, total
Earnings per share, diluted 3)
From direct result 0,12 0,08 0,39
From indirect result 0,02 0,09 0,35
--------------------------------------------------------------------------------
From net result for the period 0,13 0,18 0,73
3) Earnings per share calculated according to EPRA's instructions.
CHANGE IN VALUE OF INVESTMENT 1-3/ 1-3/ 1-12/
PROPERTIES
------------------------------------------------------------
2012 2011 2011
--------------------------------------------------------------------------
------------------------------------------------------------
Change in fair value, Finland -0,99 7,51 15,45
Change in fair value, Russia 0,60 -0,01 4,67
Change in fair value, Estonia -0,05 0,00 2,45
--------------------------------------------------------------------------------
------------------------------------------------------------
Change in fair value -0,44 7,50 22,57
Changes in acquisition costs of investment properties in -1,05 -0,28 -9,20
financial year
Changes in fair value of projects in progress 2,69 -1,09 12,93
--------------------------------------------------------------------------------
------------------------------------------------------------
Effect on profit of change in value of investment 1,20 6,13 26,30
properties
KEY INDICATORS 1-3/ 1-3/ 1-12/
2012 2011 2011
--------------------------------------------------------------------------------
Change in net sales, % 14,5 14,6 14,4
Operating profit/loss/net sales, % 51,0 72,3 77,5
Interest coverage ratio 3,4 4,1 3,7
Equity ratio, % 34,9 36,6 35,8
Loan to value, % 62,3 57,6 60,0
Group company personnel during the period, 176 144 158
average
Gross expenditure on assets, EUR million 27,9 14,7 150,0
Net rental revenue of investment properties, % 3) 7,3 7,7 7,8
Financial occupancy rate, % 94,3 94,5 95,1
Earnings/share
basic, EUR 0,13 0,18 0,74
diluted, EUR 0,13 0,18 0,73
Cash flows from operating activities/share, EUR 0,11 0,22 0,48
Equity/share, EUR 5,15 4,70 5,21
Average issue-adjusted number of shares
Basic 63.385.0 63.385. 63.385.044
44 044
Diluted 63.576.4 63.600. 63.556.767
53 941
4) The figure does not include properties commissioned and acquired
during the fiscal year.
CONTINGENT LIABILITIES
Currency unit: EUR million 03/31/201 03/31/2 12/31/2011
2 012
Pledges and guarantees on own debt
Mortgages of properties 525,54 428,60 472,49
Book value of pledged securities 204,71 184,60 208,24
Other guarantee liabilities 58,39 61,70 60,87
Collateral given on behalf of associates 0,50 0,00
Leasing liabilities, machinery and equipment 4,43 3,80 4,30
Project liabilities 0,18 0,30 0,18
Interest rate and currency swaps
Nominal values 163,00 107,90 169,96
Fair values -4,77 0,75 -3,87
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