2013-08-16 07:00:00 CEST
2013-08-16 14:06:46 CEST
REGULATED INFORMATION
Technopolis - Interim report (Q1 and Q3)
Technopolis Group Interim Report January 1 - June 30, 2013
TECHNOPOLIS PLC INTERIM REPORT August 16, 2013 at 8.00 a.m.
Technopolis Group Interim Report January 1 - June 30, 2013
Highlights for 1-6/2013 compared to 1-6/2012:
- Net sales rose to EUR 60.9 (52.1) million, an increase of 16.8%
- EBITDA rose to EUR 30.2 (25.9) million, an increase of 16.5%
- Operating profit increased to EUR 22.4 (18.8) million, including a EUR -6.5
(-6.2) million change in the fair value of investment properties
- Profit attributable to the shareholders of the parent company was EUR 9.7
(8.1) million
- Earnings per share were EUR 0.11 (0.13)
- Cash flow from operations per share was EUR 0.28 (0.21)
- The financial occupancy rate was 92.7% (94.1%)
- Net asset value per share was EUR 5.52 (5.38)
The increase in net sales and EBITDA was mainly due to an increase of 13.6% in
space and 0.9% in like-for-like rental income. Space increased by 18.8% over
the year, including the Vilnius campus acquired on May 31, 2013. Changes of EUR
-6.5 (-6.2) million in the fair value of investment properties and the
weakening of the Russian ruble had an unrealized EUR 4.1 million negative
impact on the financial performance. The operating profit excluding changes in
fair value was EUR 28.9 (24.9) million, and including tax effects, the profit
attributable to the shareholders of the parent company was EUR 14.2 (12.4)
million. The operating profit excluding changes in fair value increased by
15.8%, and the net result including tax effects by 14.2%. The net result was
negatively impacted by non-recurring costs of EUR 0.8 million from the
restructuring of service operations, previous investments and the incorporation
of properties in Finland.
4-6/ 4-6/ 1-6/ 1-6/ 1-12/
Key Indicators 2013 2012 2013 2012 2012
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Net sales, EUR million 31.2 26.7 60.9 52.1 107.3
EBITDA, EUR million 16.2 13.7 30.2 25.9 55.8
Operating profit, EUR million 5.7 5.8 22.4 18.8 48.0
Net profit for the period, EUR million -1.1 -0.4 9.7 8.1 25.8
Earnings/share, undiluted, EUR -0.03 -0.01 0.11 0.13 0.37
Earnings/share, diluted, EUR -0.03 -0.01 0.11 0.13 0.37
Cash flow from operations/share, EUR 0.16 0.10 0.28 0.21 0.56
Equity ratio, % 39.3 37.3 36.2
Equity/share, EUR 4.97 4.71 4.94
EPRA-based 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
Key Indicators *) 2013 2012 2013 2012 2012
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Direct result, EUR million 10.5 7.1 18.5 12.5 29.9
Direct result/share, diluted, EUR 0.14 0.11 0.24 0.19 0.43
Net asset value/share, EUR 5.52 5.38 5.67
Net rental yield, % 7.5 7.7 7.8
Financial occupancy rate, % 92.7 94.1 95.3
*) EPRA = European Real Estate Association
Keith Silverang, CEO:
In the first half of the year macro conditions showed the same kind of
uncertainty that we have come to accept as the new normal. Technopolis has
engineered its strategy and service concept around this reality. This has
proven to be effective even in a challenging environment. Our intention is to
continue growing profitably and exploit investment opportunities emerging from
these market conditions.
The Group's net sales and EBITDA continued to develop favorably compared to
2012 and the previous quarter. We were also able to improve the occupancy of
our standing assets, as well as the pre-let rates of buildings under
construction over the previous quarter. Liquidity and solvency have remained
strong throughout the first half. Fair values did decline mainly in the
Helsinki area and Oulu due primarily to increases in market yields. In Russia
fair values declined due to the weakening of the ruble against the euro. The
main drivers in the rise of market yields were soft macro conditions, weak real
estate market liquidity and perceived uncertainty related to the export sector.
Financial occupancy rose from 92.2% to 92.7% from Q1 to Q2 thanks to a good
overall sales effort, e.g. the successful execution of a critical 3,700 sqm
deal in Kuopio, as well as the partial inclusion of the fully let Vilnius
campus starting in June.
The integration of the Vilnius campus has proceeded as planned and the building
under construction known as Gamma has been filling up faster than we expected.
Currently we consider it possible that the whole campus will be fully let by
the end of the year, which could create opportunities to expand the campus. In
the mean time we are actively pursuing other investment opportunities both in
Finland and abroad.
In August the Technopolis Board of Directors concluded in its annual strategy
review that the company's strategy has been and remains effective. Since 2008
net sales have risen nearly 75% and EBITDA over 80%. The company's financial
position has remained solid and we have a strong concept. Our targets are
ambitious, but we have the prerequisites to achieve them. This provides a
strong foundation to build on.
Business Conditions
According to consensus information collected by the Federation of Finnish
Financial Services Finland's GDP is forecast to increase 0.1% in 2013. GDP
growth is being dragged down by rising unemployment and lower private
consumption due to heavier taxation. According to forecasts, the unemployment
rate will grow to 8.3% and inflation will decrease to 2.1%.
The Russian economy has remained relatively strong, but the leveling off of oil
prices is likely to decelerate economic growth. In 2013, GDP is expected to
grow by 2.8%. Estimates forecast inflation to increase to 6.5 and the
unemployment rate will remain at 5.5%.
Estonia's GDP is expected to grow by approximately 2.8% in 2013, supported by
the competitiveness of the export sector. The unemployment rate is expected to
decrease to 9.3% and inflation to slow slightly to 3.3%.
In Lithuania, private consumption and export are supporting robust GDP growth
which is expected to rise by 3.3% in 2013. The unemployment rate is expected to
decrease to 11.7% and inflation to slow to 2.6%.
Financial Occupancy Rates
In spite of general economic uncertainty demand for Technopolis business space
has remained satisfactory. The Group's financial occupancy rates are as
follows:
June 30, March 31, Dec 31, Sept 30, June 30,
2013 2013 2012 2012 2012
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Group 92.7 92.2 95.3 94.8 94.1
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Finland 91.7 91.5 95.1 94.7 93.9
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Oulu 84.2 85.9 94.5 93.3 91.8
HMA 93.6 94.1 91.9 92.0 88.4
Tampere 97.4 97.1 97.6 98.1 98.7
Kuopio 93.9 87.6 94.9 94.3 96.4
Jyväskylä 98.9 98.9 98.6 98.4 98.2
Lappeenranta 94.3 93.6 92.5 93.5 92.3
Estonia, Tallinn 96.6 96.1 94.9 92.5 92.9
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Lithuania, 99.9 *) - - - -
Vilnius
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Russia, St. 98.8 100.0 100.0 100.0 99.4
Petersburg
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*) Ownership of the Vilnius campus was transferred on May 31, 2013
The acquisition of the Peltola campus on February 12, 2013 decreased the
financial occupancy rate for Oulu and its occupancy rate was 63.4% as of June
30, 2013. The campus occupancy rate is expected to increase significantly by
the end of the year. Signed leases with education sector customers increased
the financial occupancy rate in Kuopio to 93.9%.
Business Segments
Geographic Segments
The net sales and EBITDA of Finnish operations developed favorably in January -
June 2013. Net sales were EUR 54.5 (47.3) million and EBITDA was EUR 27.4
(24.1) million. The EBITDA margin was 50.4% (51.0%), reflecting the lower
financial occupancy rate. Net sales improved by 15.0% and EBITDA by 13.7%
compared to the first half of 2012.
In Tallinn, the net sales of the Technopolis campus were EUR 3.2 (2.4) million
and EBITDA was EUR 1.6 (1.4) million. Net sales were higher due to a higher
financial occupancy rate and a change in the accounting policy for maintenance
charges in accordance with the Group's general accounting policy as of the
beginning of 2013. Adjusted for the change in accounting policy, the comparable
net sales in January - June 2013 were EUR 2.6 million and EBITDA margin was
63.5% (59.4%). Compared to the first half of 2012, comparable net sales
improved by 8.3% and EBITDA by 15.6%.
In St. Petersburg, the net sales of the Technopolis campus for January - June
2013 were EUR 2.6 (2.4) million and EBITDA was EUR 0.7 (0.6) million. The
EBITDA margin was 24.6% (24.5%).The campus' lower EBITDA margin than other
countries is related to the smaller scale. Once the campus expansion is
completed net sales are expected to double and EBITDA to triple.
The Vilnius campus acquired in Lithuania was consolidated into the accounts on
May 31, 2013. The unit's net sales for June amounted to EUR 0.6 million and
EBITDA to EUR 0.5 million. The figures include a non-recurring income item of
EUR 0.2 million. The full-year net sales are expected to come in at
approximately EUR 3.5 - 3.6 million and EBITDA at approximately EUR 2.5 - 2.7
million.
Space and Service Operations
In January - June 2013, rental revenue accounted for 87.9% (86.7%) and service
revenue for 12.1% (13.3%) of net sales.
Breakdown of Net Sales and EBITDA by Sector (excluding eliminations):
4-6/2013 4-6/2012 1-6/2013 1-6/2012 1-12/2012
------------------------------------------------------------
Space
Net sales 27.4 22.9 53.5 45.2 93.0
EBITDA 17.6 15.5 33.2 29.4 61.9
EBITDA % 64.1 67.7 62.1 65.0 66.5
------------------------------------------------------------
Services
Net sales 3.8 3.7 7.5 6.9 14.2
EBITDA 0.5 0.4 1.0 0.6 1.3
EBITDA % 13.2 11.6 13.9 9.4 9.4
------------------------------------------------------------
The EBITDA margin of the office space rental business decreased by 2.9% during
January - June 2013 compared to the previous year as a result of a lower
initial financial occupancy rate. The EBITDA margin increased to 13.9% (9.4%)
in the service sector.
Financial Performance
The Group's net sales for the period under review were EUR 60.9 (52.1) million,
an increase of 16.8% compared to January - June 2012. The growth mainly
comprised a 13.6% increase in space, and an increase of 0.9% in like-for-like
rental income due to index increases. Rentable space increased by 18.8%
year-on-year, including the new Vilnius campus. The Group's EBITDA rose to EUR
30.2 (25.9) million in January - June, up 16.5%. The EBITDA margin was 49.5%
(49.0%). EBITDA was affected by EUR 0.8 million in non-recurring expenses
related to previous investments, the restructuring of service operations and
incorporation of properties into five regional companies in Finland. Changes of
EUR -6.5 (-6.2) million in the fair value of investment properties had a
negative impact on financial performance. The Group's operating profit was EUR
22.4 (18.8) million. Excluding changes in fair value, the operating profit was
EUR 28.9 (24.9) million.
The Group's net financial expenses for January - June totaled EUR 10.0 (7.2)
million. Net financial expenses were impacted by EUR 1.7 million in higher
unrealized exchange rate losses totaling EUR -4.1 (-0.1) million related to the
Russian subsidiary's euro-denominated loans and the weakening of the Russian
ruble against the euro. The Group's pre-tax profit totaled EUR 12.4 (11.6)
million. The pre-tax profit excluding fair value changes was EUR 18.9 (17.8)
million.
Unrealized exchange rate losses for April - June amounted to EUR -4.5 (-2.3)
million.
The EPRA-based direct result increased by 48.2% to EUR 18.5 (12.5) million for
January - June 2013. Earnings per share increased to EUR 0.24 (0.19). An
increase in net sales and EBITDA and a decrease in operational financial costs
and taxes contributed to the improvement in EPRA-based figures. EPRA financial
expenses were EUR 5.8 (7.0) million and taxes EUR 3.8 (4.3) million.
Customers and Lease Stock
Technopolis has a total of approximately 1,400 customers, and 26,000 people
work in Technopolis facilities. The twenty largest customers lease
approximately 38% of the company's rentable space.
Termination Notice Periods June 30, March 31, Dec Sept June
in months 2013 2013 31, 30, 30,
2012 2012 2012
--------------------------------------------------------------------------------
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0-3 13.7 13.7 13.8 17.3 16.1
3-6 24.2 25.5 25.3 28.1 30.5
6-9 5.9 7.0 7.4 7.4 4.9
9-12 5.4 6.5 6.7 7.6 7.7> 12 months, total 50.8 47.2 46.8 39.6 40.8
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Average lease term in months 37 35 39 25 27
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Lease stock, EUR million 342.2 311.1 296.1 238.2 239.7
Long fixed-term leases signed by the company increased the average lease term
by 10 months and the lease stock by 42.8% compared to the previous year.
Properties and Investments
Technopolis' facilities are located next to good traffic connections in the
vicinity of universities, airports or downtown areas. In 2013, the Group
invested in all of the countries where it operates.
The fair value of the Group's investment properties at the end of the period
totaled EUR 1,126.2 (944.0) million, of which completed investment properties
accounted for EUR 1,044.6 (902.6) million, and investment properties under
construction EUR 81.6 (41.4) million. The net rental yield of the company's
investment properties decreased to 7.5% (7.7%) due to lower financial occupancy
rates in Finland.
Fair value, June 30, March 31, Dec 31, Sept 30, June 30,
EUR million 2013 2013 2012 2012 2012
--------------------------------------------------------------------------------
Group 1,126.2 1,067.2 1,014.1 963.2 944.0
--------------------------------------------------------------------------------
Finland 879.2 888.0 838.9 784.7 786.3
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Oulu 255.9 259.5 225.3 224.2 224.9
HMA 201.4 203.9 205.2 206.5 206.9
Tampere 185.4 186.4 189.2 134.1 133.9
Kuopio 110.3 110.5 92.2 93.6 94.5
Jyväskylä 97.4 98.4 97.9 97.1 96.7
Lappeenrant 28.9 29.3 29.2 29.1 29.4
a
Estonia 66.2 65.6 63.9 64.4 64.5
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Lithuania 47.3 - - - -
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Russia 51.8 56.6 53.6 53.5 51.8
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Under 81.6 56.9 57.6 60.7 41.4
construction
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Market yield requirements applied to the Group's investment properties averaged
8.1% (8.1%), and have been used in fair value calculations.
The Group's total floor space in completed investment properties at the end of
the period was 717,500 (604,200) sqm.
1,000 sqm June 30, March 31, Dec 31, Sept 30, June 30,
2013 2013 2012 2012 2012
--------------------------------------------------------------------------------
Group 717.5 690.3 644.3 604.1 604.2
--------------------------------------------------------------------------------
Finland 582.6 586.0 541.0 500.8 500.9
--------------------------------------------------------------------------------
Oulu 230.1 229.8 194.3 194.3 194.4
HMA 83.2 86.6 86.6 86.6 86.6
Tampere 112.1 112.1 112.1 71.9 71.9
Kuopio 69.5 69.8 60.3 60.3 60.3
Jyväskylä 60.4 60.4 60.4 60.4 60.4
Lappeenrant 27.3 27.3 27.3 27.3 27.3
a
Estonia 79.4 80.2 79.2 79.2 79.2
--------------------------------------------------------------------------------
Lithuania 31.4 - - - -
--------------------------------------------------------------------------------
Russia 24.1 24.1 24.1 24.1 24.1
--------------------------------------------------------------------------------
The decrease in space in the Helsinki Metropolitan Area was due to the
demolition of buildings located at Tekniikantie 21 in Espoo. The Vilnius campus
in Lithuania was included in the figures as of May 31, 2013.
Properties acquired or investments completed during the last 12 months and
projects under construction during the period and their rentable space are as
follows:
Area Name Occupan sqm EUR Yield, % Completion
cy million
Rate,
%, Aug
15,
2013
--------------------------------------------------------------------------------
Acquired
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
Tampere Tohloppi 100.0 32,000 23.3 11.8 10/2012
Oulu Peltola 64.9 37,600 31.7 11.2 02/2013
Vilnius Alfa & 99.8 31,200 62.6 *) 9.6 05/2013
Beta
Completed
--------------------------------------------------------------------------------
-
HMA Ruoholahti 2 96.2 8,600 27.1 7.2 06/2012
Tampere Yliopistonrinne 96.6 7,500 22.5 7.6 10/2012
2
Kuopio Viestikatu 92.2 9,300 17.4 9.2 02/2013
7B&C
Tallinn Löötsa 8C 94.8 6,200 8.3 9.1 03/2013
Under construction **)
--------------------------------------------------------------------------------
-
Vilnius Gamma 75.3 11,000 62.6 *) 8.8 10/2013
Tallinn Löötsa 80.7 16,300 24.3 9.1 10/13-2/14**
8A&B *)
St. Pulkovo 2 10.4 18,700 42.0 12.6 10/2013
Petersburg
Jyväskylä Innova 4 87.4 8,900 23.7 8.1 10/2013
--------------------------------------------------------------------------------
*) total value of the Vilnius deal including all phases
**) pre-let rate August 15, 2013
***) commissioning in phases
All of the Technopolis projects under construction at the closing date are
expansions of existing campuses.
Financing
The Group's balance sheet totaled EUR 1,202.2 (1,000.7) million, of which
liabilities totaled EUR 732.9 (629.6) million. The Group's equity per share was
EUR 4.97 (4.71). The Group's equity ratio was 39.3% (37.3%), increasing 6.2
percentage points due the hybrid loan. The loan-to-value ratio was 57.8%
(58.2%). At the end of the period, the Group's net gearing was 136.8% (147.7%)
and the interest coverage ratio was 5.5 (3.9).
As a general rule, the Group finances 35% of its investments with shareholders'
equity, and the remaining 65% with debt financing, for which the target
property is given as collateral.
At the end of the period, the Group's interest-bearing liabilities from
financial institutions amounted to EUR 658.8 million (EUR 555.1 million), and
the average capital-weighted loan period was 8.3 (8.8) years. The average
interest rate on interest-bearing liabilities was 2.07% (2.32%). The Group's
interest fixing period was 2.0 (1.6) years at the end of the period. At the end
of the period 60.2% (65.2%) of interest-bearing liabilities were floating-rate
loans and 39.8% (34.8%) were fixed-rate loans with maturities of 13 60
months. The share of fixed-rate loans increased due to the higher use of
interest rate swaps. Some 3.9% of floating-rate loans were pegged to the
under-3-month Euribor rate, and 56.3% were pegged to Euribor rates from 3 to 12
months.
The Group had interest-bearing liabilities with covenants worth EUR 477.2
(371.4) million. Loans amounting to EUR 361.0 (331.9) million include covenants
relating to the equity ratio. Of these loans, EUR 203.4 (144.0) million include
a call-in provision. The call-in covenant is breached if the equity ratio falls
below 30%. The principal of EUR 157.8 (147.8) million includes an interest
margin revision term. If the equity ratio falls below 33%, the additional
impact on interest expenses would be EUR 0.5 (0.4) million per annum.
Technopolis issued a EUR 75 million hybrid bond in March 2013. The bond has a
7.5% annual coupon rate. It is perpetual, but the company may exercise an early
redemption option after five years.
At the end of the reporting period, Technopolis had EUR 131.6 (137.9) million
in untapped credit facilities, and cash reserves amounting to EUR 16.7 (6.9)
million. The credit facilities contained a EUR 106.5 (114.7) million credit
line and a EUR 25.1 (23.2) million revolving credit facility. In addition, the
company has a EUR 120.0 (120.0) million commercial paper program, of which EUR
50.0 (21.0) million was issued at the end of the reporting period.
During the 12-month period following the period under review, EUR 130.5 (82.0)
million in existing interest-bearing loans will mature.
The company's five largest creditors at the end of the period under review were
the European Investment Bank, Handelsbanken, OP-Pohjola Group, Nordea, and
Danske Bank. Their total lending to the company amounted to EUR 467.9 million.
A one percentage point change in market rates would cause a EUR 2.8 (2.7)
million change in interest costs per annum. At the end of the reporting period,
there were interest rate swaps covering EUR 233.3 (162.0) million of principal.
The hedging ratio of interest-bearing liabilities was 35.4% (29.2%).
Organization and Personnel
The CEO of Technopolis Plc is Keith Silverang. Reijo Tauriainen, CFO, is the
company's Deputy CEO.
The Group Management Team comprises Keith Silverang, Reijo Tauriainen, Juha
Juntunen, Sami Juutinen, Kari Kokkonen, and Outi Raekivi. In order to support
the company's growth strategy, the areas of responsibility of the Management
Team members were adjusted in connection with the Group's Strategy Review. As
of January 1, 2014, Sami Juutinen will be responsible for all merger and
acquisition, and divesture-related activities throughout the Group as Chief
Investment Officer (CIO). At the same time, Juha Juntunen, currently Director
of Finnish Operations, Sales and Marketing, will assume responsibility as Chief
Operating Officer (COO) for all business units, in addition to his previous
duties.
The Technopolis operational organization consists of four geographical units:
Finland, Lithuania, Russia, and Estonia. The Group organization also has matrix
support functions for the Group's real estate development, services, marketing,
and support services.
During the period, the Group employed an average of 184 (177) people. Rental
operations employed 64 (65) people, the service business 78 (74) people and the
Group's administration 42 (38) people. At the end of the period under review,
the Group had 183 (180) personnel.
Environment
The main targets 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 2011.
Cumulative comparison of Finnish units compared to the base year of 2011:
1-6/2013 1-6/2011 change, %
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Energy consumption, kWh/gross sqm 46.3 46.9 -1.3
Water consumption, m³/person 1.13 1.14 -16.3
Carbon dioxide emissions, kg CO2e/gross sqm 3.6 3.8 -57.4
--------------------------------------------------------------------------
The comparison only includes comparable properties owned by the company
throughout the year. Increasing energy efficiency as a result of property
energy reviews and savings measures has decreased both energy consumption by
the properties and their carbon dioxide emissions. Compared to the
corresponding period in the previous year Technopolis now has four new,
energy-efficient, LEED-certified properties. The energy consumption of LEED
properties is estimated to be at least 10% lower than that of corresponding
conventional properties.
Strategic Financial Targets
The company's Board of Directors approved the company's strategic financial
targets for 2014 - 2016 on August 15, 2013. The company left unchanged its
targets of average annual growth in net sales and EBITDA of 15%, over EUR 50
million in net sales outside Finland by the end of 2016, and an equity ratio of
35% over the cycle.
The company's Board of Directors specified that the existing target calling for
at least a 6% return on capital employed per annum to apply to operational
activities only. The adjusted target for return on capital employed is based on
the recommendations of the European Real Estate Association (EPRA), instead of
the previous figures calculated according to IFRS, adjusting the revenue for
changes in e.g. fair value.
The dividend policy was modified to better match the company's growth targets.
The dividend policy was adjusted such that the company will aim to distribute
on average one third of its net profit, excluding changes in fair value and
their tax impact.
As part of its international growth targets, Technopolis has been analyzing
potential international investment targets in the Baltic Sea and Nordic
regions. The key criteria for potential acquisitions are sufficient size and
growth potential, excellent locations in growth centers, a flexible,
high-quality property portfolio, and positive cash flow. In addition, the
acquisition must have a positive impact on earnings per share, and the campus
should be a good match with the Technopolis business concept. The company is
also investigating opportunities to divest properties that are not optimal for
its concept.
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 company's interest rate forecast.
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. In order to manage the 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, refinancing, and their margins in the future.
The differences between legislation and administrative procedures in Finland
and abroad may create risks.
Changes in exchange rates may have an effect on the company's financial
performance and operations. Foreign currency items are recorded at the exchange
rate on the transaction date. Any translation differences are entered in the
comprehensive income statement under other operating expenses or financial
income and expenses, according to the type of transaction involved.
Customer risk management aims to minimize the negative impact of potential
changes in customers' financial positions on the company's business and
financial performance. Customer risk management focuses on having a profound
understanding of the customer's business and actively monitoring customer
information. Customer risks are diversified by acquiring customers from all
sectors, including the public sector. 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 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, 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 values 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, the covenant terms of the
leases may be met. In that case, the change in value can have an impact on the
cash flow and result for the period.
Group Structure
Technopolis Group comprises the parent company Technopolis Plc, whose
subsidiaries have operations in Finland, Lithuania, Russia, and Estonia. The
parent company has several subsidiaries and associates in Finland. In
Lithuania, the parent company has a subsidiary, Technopolis Lietuva UAB (100%),
which owns the three real estate companies associated with the Vilnius campus.
The parent company has two subsidiaries in Russia: Technopolis Neudorf LLC and
Technopolis St. Petersburg LLC, both wholly owned. The Estonian subsidiary
Technopolis Baltic Holding OÜ (wholly owned) manages the holdings in
Technopolis Ülemiste AS (51%).
New subsidiaries, Technopolis Lietuva UAB, Kiinteistö Oy Technopolis Peltola
and Kiinteistö Oy Yrttiparkki, were consolidated into Technopolis Group during
the review period. Technopolis Lietuva UAB owns the real estate companies UAB
Domestas, UAB Urban housing, and UAB Gama Projektai. Technopolis Plc owns five
regional real estate companies which, after the business transfer and capital
contribution executed on February 28, 2013, each own shares in properties and
leases located in their respective region.
Annual General Meeting 2013
The Annual General Meeting of Shareholders (AGM) of Technopolis was held in
Oulu on March 27, 2013.
Resolutions of the Annual General Meeting
The AGM 2013 adopted the Group and parent company's financial statements for
the financial year 2012 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 shareholder register
kept by Euroclear Finland Ltd on the record date of April 3, 2013. The dividend
payment date was April 10, 2013.
Board of Directors and Remuneration of the Members of the Board of Directors
The number of members of the Board of Directors was confirmed at six. Sari
Aitokallio, Carl-Johan Granvik, Jorma Haapamäki, Pekka Korhonen, Matti
Pennanen, 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
Board members commit to using 50% of their 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, 2013. If the shares cannot
be purchased during this period due to insider regulations, they will be
acquired on the first occasion possible according to valid insider regulations.
Board members are not allowed to transfer the shares obtained as annual
remuneration before their membership of 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 members. The Audit Committee consists of Carl-Johan Granvik, Chair,
Sari Aitokallio, and Pekka Korhonen. The remuneration committee consists of
Timo Ritakallio, Chair, Jorma Haapamäki, and Matti Pennanen. The Board of
Director's view is that all of the Board members are independent of the
company, and excluding Timo Ritakallio, of its major shareholders.
Auditor
KPMG Oy Ab, authorized public accountants, was re-elected as auditor of the
company, with Mr. Ari Eskelinen, APA, as the Auditor-in-Charge.
Shareholders' Nomination Board
The Annual General Meeting decided to establish a Shareholders' Nomination
Board to prepare proposals concerning the election and remuneration of the
members of Board of Directors for the General Meeting and adopted the Charter
of the Shareholders' Nomination Board. The Nomination Board is established for
an indefinite period.
The Nomination Board shall consist of three members nominated by the
shareholders of the company. In addition, the Chairman of the Board of
Directors of the company participates in the work of the Nomination Board as an
expert.
The right to nominate members shall be vested with the three shareholders of
the company having the largest share of the votes represented by all the shares
in the company annually on September 1, based on the company's shareholder
register held by Euroclear Finland Ltd. However, if a shareholder who has
distributed his/her holdings into several funds, and has an obligation under
the Finnish Securities Markets Act to take these holdings into account when
disclosing changes in his/her share of ownership, makes a written request to
such effect to the Chairman of the Board of Directors no later than on August
31, the aforementioned shareholder's holdings in several funds or registers
will be combined when calculating the share of votes which determines his
nomination rights. Should a shareholder not wish to exercise his/her nomination
rights, the rights shall be transferred to the next largest shareholder who
otherwise would not be entitled to nominate a member. The term of office of the
members of the Nomination Board expires annually when the new Nomination Board
has been appointed.
Based on shareholdings as of October 1, 2012, the members of the Shareholders'
Nomination Board Committee are Risto Murto, Vice President of Varma Mutual
Pension Insurance Company, as the chairman, with Harri Sailas, President and
CEO of Ilmarinen Mutual Pension Insurance Company, and Timo Kenakkala, Deputy
Mayor of the City of Oulu. In addition, Carl-Johan Granvik, chair of the
company's Board of Directors, acts as the Nomination Board's expert member.
Board Authorizations
The AGM authorized the Board of Directors to decide on the repurchase and/or on
the acceptance as pledges of the company's own shares as follows.
The amount of treasury shares to be repurchased and/or accepted as pledge shall
not exceed 7,556,100 shares, which corresponds to approximately 10% 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
treasury shares will be repurchased and/or accepted as pledges. Treasury 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 later than June 30, 2014.
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 15,112,200, equaling approximately 20% of the company's shares. However, no
more than 170,000 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 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. The authorization is effective until the end of the next
Annual General Meeting; however, no later than June 30, 2014.
Stock-Related Events and Disclosures of Changes in Holdings
In March 2013, 14,859 new Technopolis Plc shares were subscribed based upon the
2007C stock options, and 69,379 new shares related to the share-based incentive
scheme 2010 - 2012. New shares were entered into the Trade Register on April 4,
2013.
In April, 2013 a total of 240,933 new Technopolis Plc shares were subscribed
based upon the 2007C stock options. New shares were entered into the Trade
Register on May 15, 2013.
At the end of the period, on June 30, 2013, the company had 75,886,398 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.
Unused Board Authorizations
The Board of Directors has been authorized by the Annual General Meeting of
2013 to decide on the issuance of shares and the issuance of special rights
entitling holders to shares referred to in the Limited Liability Companies Act,
as well as on the repurchase and/or on the acceptance as pledges of the
company's own shares. The company's Board of Directors has not exercised the
authorizations, and the company did not hold any treasury shares at the end of
the reporting period.
Post-Fiscal Events
The company announced on August 15, 2013 adjustments to its strategic financial
targets. The changes are included in this Interim Report under ‘Strategic
Financial Targets'. On the same day, the company also announced changes related
to the organization and the areas of responsibility of Group Management Team
members, effective on January 1, 2014. These changes are included in this
Interim Report under ‘Organization and Personnel.
Future Outlook
On May 31, 2013, the company upgraded its 2013 net sales and EBITDA growth
guidance to 14% - 17% compared to the previous year.
The Group's financial performance depends on the development of the overall
business environment, customer operations, financial markets and real estate
market yield requirements. Furthermore, any property transactions that take
place will have an impact on the guidance.
Vilnius, August 15, 2013
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. To request a printed copy of the document, please call +358
46 712 000 /Technopolis info. The company's financial review for 2012 was
published on March 4, 2013, on the company's website.
Technopolis offers a service for receiving reports and releases on the
company's website at http://www.technopolis.fi. Individuals who sign up to the
service will receive the company's bulletins electronically.
Tables
The accounting policies applied in the interim report are the same as in the
2012 annual report. The formulas for calculating key indicators are available
on the company website.
The Company has amended the recognition principle of deferred taxes as of the
beginning of 2013 in accordance with IAS 8 paragraph 14(b). The Company
estimates that it will liquidate its shareholdings in real estate companies by
selling the shares it holds. The effect amounts to EUR 6 million, which is
recognized in retained earnings. The change has also a future effect on the
accrual of deferred taxes and equity ratio.
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 4-6/ 4-6/ 1-6/ 1-6/
1-12/
COMPREHENSIVE
INCOME
Currency unit: EUR 2013 2012 2013 2012
2012
million
-------------------------------------------------------------------------------
Net sales 31.2 26.7 60.9 52.1
107.3
Other operating 0.3 0.5 1.1 0.7
1.7
income 1)
Other operating -15.3 -13.5 -31.8 -26.9
-53.3
expenses
Change in fair value -9.8 -7.4 -6.5 -6.2
-5.7
of investment
properties
Deprec -0.6 -0.5 -1.3 -0.9
-2.0
iation
-------------------------------------------------------------------------------
Operating profit/loss 5.7 5.8 22.4 18.8
48.0
Finance income and -7.6 -5.7 -10.0 -7.2
-13.6
expenses
-------------------------------------------------------------------------------
Result before taxes -1.8 0.1 12.4 11.6
34.5
Current taxes 1.1 0.3 -1.9 -2.4
-7.5
-------------------------------------------------------------------------------
Net result for the -0.7 0.4 10.6 9.2
27.0
period
Other comprehensive
income items
Translation difference -2.0 -1.2 -1.6 0.2
0.9
Available-for-sale 0.0 0.0 0.0 0.0
0.0
financial assets
Derivatives 2.4 -1.5 2.9 -2.5
-4.0
Taxes related to other -0.6 0.4 -0.7 0.6
1.0
comprehensive income
items
-------------------------------------------------------------------------------
Other comprehensive -0.2 -2.4 0.6 -1.7
-2.0
income items after
taxes for the period
Comprehensive income -0.9 -2.0 11.1 7.5
24.9
for the period, total
Distribution of profit
for the period:
To parent company -1.1 -0.4 9.7 8.1
25.8
shareholders
To non-controlling 0.4 0.7 0.9 1.0
1.1
shareholders
-------------------------------------------------------------------------------
-0.7 0.4 10.6 9.2
27.0
Distribution of
comprehensive income
for the period:
To parent company -1.3 -2.7 10.3 6.5
23.8
shareholders
To non-controlling 0.4 0.7 0.9 1.0
1.1
shareholders
-------------------------------------------------------------------------------
-0.9 -2.0 11.1 7.5
24.9
Earnings per share based on result of flowing to parent company shareholders
adjusted by interest expenses on an equity related bond:
Net profit to parent -1.1 -0.4 9.7 8.1
25.8
company shareholders
Interest expenses on an -1.4 -1.5
equity related bond
Tax effect 0.3 0.4
------------------------------------------------------
Adjusted net profit -2.2 -0.4 8.6 8.1
25.8
Earnings per share, -0.03 -0.01 0.11 0.13
0.37
basic, EUR
Earnings per share, -0.03 -0.01 0.11 0.13
0.37
diluted, EUR
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 06/30/2013 06/30/2012 12/31/2012
---------------------------------------------------------------------------
Non-current assets
Intangible assets 5.7 4.8 5.6
Tangible assets 18.1 14.6 13.7
Completed investment 1,044.6 902.6 956.5
properties
Investment properties under 81.6 41.4 57.6
construction
Investments 13.7 12.7 12.5
Deferred tax assets 5.1 2.6 2.7
---------------------------------------------------------------------------
Non-current assets 1,168.8 978.6 1,048.6
---------------------------------------------------------------------------
Current assets 33.5 22.1 34.1
---------------------------------------------------------------------------
Assets, total 1,202.2 1,000.7 1,082.7
---------------------------------------------------------------------------
STATEMENT OF FINANCIAL
POSITION, SHAREHOLDERS'
EQUITY AND LIABILITIES
Currency unit: EUR million 06/30/2013 06/30/2012 12/31/2012
---------------------------------------------------------------------------
Shareholders' equity
Share capital 96.9 96.9 96.9
Premium fund 18.6 18.6 18.6
Other funds 187.1 111.4 110.2
Translation difference -1.3 -0.4 0.3
Retained earnings 141.6 121.6 121.7
Net profit for the period 9.7 8.1 25.8
---------------------------------------------------------------------------
Parent company's shareholders' 452.6 356.2 373.5
interests
Non-controlling interests 16.8 15.0 16.1
---------------------------------------------------------------------------
Shareholders' equity, total 469.4 371.2 389.5
Liabilities
Non-current liabilities
Interest-bearing liabilities 528.3 473.1 499.7
Non-interest-bearing 2.0 0.7 0.3
liabilities
Deferred tax liabilities 41.8 46.2 49.7
---------------------------------------------------------------------------
Non-current liabilities, total 572.1 520.0 549.7
Current liabilities
Interest-bearing liabilities 130.5 82.0 108.4
Non-interest-bearing 30.3 27.6 35.0
liabilities
---------------------------------------------------------------------------
Current liabilities, total 160.8 109.6 143.5
Liabilities, total 732.9 629.6 693.2
---------------------------------------------------------------------------
Shareholders' equity and 1,202.2 1,000.7 1,082.7
liabilities, total
---------------------------------------------------------------------------
STATEMENT OF CASH FLOWS 1-6/ 1-6/
1-12/
Currency unit: EUR million 2013 2012
2012
-------------------------------------------------------------------------------
Cash flows from operating activities
Net result for the period 10.6 9.2
27.0
Adjustments:
Change in fair value of investment 6.5 6.2
5.7
properties
Depreciation 1.3 0.9
2.0
Share of profits of associates 0.0
Gains from disposals 0.0
-0.1
Other adjustments for non-cash 0.1 0.2
0.2
transactions
Financial income and expenses 9.9 7.2
13.6
Taxes 1.9 2.4
7.5
Increase / decrease in working capital -0.1 -2.5
1.0
Interests received 0.1 0.1
0.2
Dividends received 0.0 0.0
0.0
Interests paid and fees -4.0 -5.8
-10.3
Other financial items in operating -2.9 -2.2
-4.4
activities
Taxes paid -1.9 -2.2
-3.3
-------------------------------------------------------------------------------
Net cash provided by operating 21.6 13.6
39.2
activities
Cash flows from investing activities
Investments in other securities
0.0
Investments in investment properties -72.1 -42.6
-107.2
Investments in tangible and intangible -0.8 -1.8
-8.2
assets
Granted loans -1.4
Repayments of loan receivables 0.0
0.0
Proceeds from sale of investments 0.0
0.0
Proceeds from sale of tangible and 0.0 0.0
0.1
intangible assets
Acquisition of subsidiaries -22.7 -0.7
-0.7
Acquisition of associates -0.7
-0.7
-------------------------------------------------------------------------------
Net cash used in investing activities -97.0 -45.7
-116.6
Cash flows from financing activities
Issue of hybrid bond 75.0
Increase in long-term loans 51.3 45.0
96.3
Decrease in long-term loans -39.5 -35.2
-58.2
Dividends paid -15.1 -12.7
-12.7
Paid share issue 0.5 32.6
32.7
Capital investment by the minority 0.8
1.8
Change in short-term loans 4.7 -3.9
20.9
-------------------------------------------------------------------------------
Net cash provided by financing 76.8 26.6
80.8
activities
Net increase/decrease in cash assets 1.4 -5.5
3.3
Effects of exchange rate fluctuations -0.3 -0.1
-0.2
on cash held
Cash and cash equivalents at 15.7 12.5
12.5
period-start
Cash and cash equivalents at period-end 16.7 6.9
15.7
STATEMENT
OF
CHANGES
IN
EQUITY
Currency Equity attributable to owners of the parent
unit:
EUR
million
--------------------------------------------------------------------
Share Premium Other Transla Retained Share
Total
capita fund reserve tion earnings of
shareholde
l s differe non-con rs'
equity
nces trollin
g
interes
ts
Equity 96.9 18.6 81.1 -0.6 134.1 13.1
343.2
January
1, 2012
-------------------------------------------------------------------------------
Comprehen
sive
income
Net 8.1 1.0
9.2
profit
for the
period
Other
comprehensive
income items
Translati 0.3
0.3
on
differen
ce
Derivativ -1.9
-1.9
es
Available-for-sal 0.0
0.0
e financial
assets
-------------------------------------------------------------------------------
Comprehensive -1.8 0.3 8.1 1.0
7.6
income for the
period
Related
party
transact
ions
Share 32.1
32.1
issue
Dividend -12.7
-12.7
Change in ownership 0.2
0.2
interests in subsidiaries
2)
Other 0.0 0.0 0.8
0.8
changes
-------------------------------------------------------------------------------
Related 32.1 -12.5 0.8
20.4
party
transact
ions
-------------------------------------------------------------------------------
Equity 96.9 18.6 111.4 -0.4 129.7 15.0
371.2
June 30,
2012
-------------------------------------------------------------------------------
Equity 96.9 18.6 110.2 0.3 157.0 16.1
399.0
January
1, 2013
3)
-------------------------------------------------------------------------------
Comprehen
sive
income
Net 9.7 0.9
10.6
profit
for the
period
Other
comprehensive
income items
Translati -1.6
-1.6
on
differen
ce
Derivativ 2.2 0.0
2.2
es
Available-for-sal 0.0 0.0
0.0
e financial
assets
-------------------------------------------------------------------------------
Comprehensive 2.2 -1.6 9.7 0.9
11.1
income for the
period
Related
party
transact
ions
Dividend -15.3 -0.2
-15.5
Equity 74.3
74.3
related
bond
issue
Other 0.5 0.0 0.0
0.5
changes
-------------------------------------------------------------------------------
Related 74.8 -15.3 -0.2
59.3
party
transact
ions
-------------------------------------------------------------------------------
Equity 96.9 18.6 187.1 -1.3 151.3 16.8
469.4
June 30,
2013
-------------------------------------------------------------------------------
2) Acquisition of non-controlling interests without change in control
3) Effect of changes in recognition principle of deferred taxes, EUR 6.0
million, and in group structure, EUR 3.5 million, total of EUR 9.4 million, has
been recognized in opening balance of 2013 in retained earnings.
FINANCIAL INFORMATION BY SEGMENTS
Technopolis Group has four operating segments based on geographical units:
Finland, Russia, Estonia and Lithuania. 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 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
Currency unit: EUR million 2013 2012 2013 2012 2012
-----------------------------------------------------------------
Net sales
Finland 27.6 24.2 54.4 47.3 97.4
Russia 1.3 1.2 2.6 2.4 5.0
Estonia 1.6 1.2 3.2 2.4 4.8
Lithuania 0.6 0.0 0.6 0.0 0.0
Unallocated 0.0 0.0 0.0 0.0 0.0
Total 31.2 26.7 60.9 52.1 107.3
-----------------------------------------------------------------
EBITDA
Finland 14.3 12.8 27.4 24.1 51.2
Russia 0.4 0.3 0.7 0.6 1.4
Estonia 0.9 0.9 1.6 1.4 3.1
Lithuania 0.5 0.0 0.5 0.0 0.0
Unallocated 0.2 -0.3 0.0 -0.2 0.0
Total 16.2 13.7 30.2 25.9 55.8
-----------------------------------------------------------------
Assets
Finland 964.5 875.0 935.7
Russia 101.2 74.3 90.9
Estonia 102.1 83.1 89.8
Lithuania 98.1 0.0 0.0
Eliminations -63.6 -31.6 -33.6
Total 1,202.2 1,000.7 1,082.7
-----------------------------------------------------------------
EPRA EARNINGS
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, unrealized exchange rate gains and
losses and any non-recurring items, such as gains and losses on disposals.
Additionally, the statement of comprehensive income showing the direct result
presents the related taxes, deferred tax assets and liabilities and share of
non-controlling interests.
Items excluded from the direct result and their tax effects and share of
non-controlling interests are presented in the statement of income showing the
indirect result.
DIRECT RESULT 4-6/ 4-6/ 1-6/ 1-6/
1-12/
Currency unit: EUR 2013 2012 2013 2012
2012
million
--------------------------------------------------------------------------------
-----
Net sales 31.2 26.7 60.9 52.1
107.3
Other operating income 0.3 0.4 1.0 0.6
1.3
Other operating expenses -15.3 -13.5 -31.8 -26.9
-53.3
Depreciation -0.6 -0.5 -1.3 -0.9
-2.0
--------------------------------------------------------------------------------
-----
Operating profit/loss 15.5 13.1 28.8 24.8
53.3
Finance income and -3.1 -3.5 -5.8 -7.0
-13.0
expenses, total
--------------------------------------------------------------------------------
-----
Result before taxes 12.4 9.6 22.9 17.8
40.3
Taxes for direct result -1.7 -1.8 -3.8 -4.3
-9.2
items
Non-controlling -0.3 -0.7 -0.6 -1.0
-1.2
interests
--------------------------------------------------------------------------------
-----
Direct result for the 10.5 7.1 18.5 12.5
29.9
period
INDIRECT RESULT
Non-recurring items 0.0 0.1 0.1 0.1
0.4
Change in fair value of -9.8 -7.4 -6.5 -6.2
-5.7
investment properties
--------------------------------------------------------------------------------
-----
Operating profit/loss -9.8 -7.3 -6.4 -6.1
-5.3
Change in fair value of -4.5 -2.3 -4.1 -0.1
-0.5
financial instruments
--------------------------------------------------------------------------------
-----
Result before taxes -14.3 -9.6 -10.5 -6.2
-5.8
Taxes for indirect 2.8 2.1 2.0 1.9
1.7
result items
Non-controlling -0.1 -0.2
0.1
interests
--------------------------------------------------------------------------------
-----
Indirect result for the -11.6 -7.4 -8.8 -4.3
-4.0
period
Result for the period to -1.1 -0.4 9.7 8.1
25.8
the parent company
shareholders, total
Earnings per share,
diluted
From direct result 0.14 0.11 0.24 0.19
0.43
From indirect result -0.15 -0.12 -0.12 -0.07
-0.06
--------------------------------------------------------------------------------
-----
From net result for the -0.01 -0.01 0.13 0.13
0.37
period
Effect of the interest -0.01 -0.01
expenses from equity
related bond
--------------------------------------------------------------------------------
-----
From adjusted net result -0.03 -0.01 0.11 0.13
0.37
for the period
KEY INDICATORS 1-6/ 1-6/
1-12/ 2013 2012
2012
--------------------------------------------------------------------------------
-----
Change in net sales, % 16.8 15.9
15.6
Operating profit/loss/net 36.8 36.0
44.8
sales, %
Interest coverage ratio 5.5 3.9
4.5
Equity ratio, % 39.3 37.3
36.2
Loan to value, % 57.8 58.2
59.5
Group company personnel 184 177
178
during the period, average
Gross expenditure on assets, 128.9 45.7
115.8
MEUR
Net rental yield of 7.5 7.7
7.8
investment properties, % 5)
Financial occupancy rate, % 92.7 94.1
95.3
Earnings/share
basic, EUR 0.11 0.13
0.37
diluted, EUR 0.11 0.13
0.37
Cash flows from operating 0.28 0.21
0.56
activities/share, EUR
Equity/share, EUR 4.97 4.71
4.94
Average issue-adjusted
number of shares
basic 75.665.676 64.209.375
69.913.841
diluted 75.957.498 64.448.523
70.146.318
Issue-adjusted number of 75.886.398 75.555.227
75.561.227
shares at the end of period
5) The figure does not include properties commissioned and
acquired during the fiscal year.
SPACE AND 4-6/ 4-6/ 1-6/ 1-6/
1-12/
SERVICE
BUSINESS
2013 2012 2013 2012
2012
--------------------------------------------------------------------------------
-----
Space
Net sales 27.4 22.9 53.5 45.2
93.0
Other 0.0 0.1 0.0 0.1
0.3
operatin
g income
Expenses -8.6 -6.4 -17.9 -13.7
-27.2
for
properti
es
Allocated -1.2 -1.1 -2.4 -2.2
-4.3
sales,
group
and
administ
ration
expenses
EBITDA 17.6 15.5 33.2 29.4
61.9
EBITDA % 64.1 67.7 62.1 65.0
66.5
--------------------------------------------------------------------------------
-----
Services
Net sales 3.8 3.7 7.5 6.9
14.2
Other 0.3 0.4 1.0 0.6
1.3
operatin
g income
Expenses -3.1 -3.1 -6.5 -5.7
-12.0
Allocated -0.4 -0.6 -0.9 -1.1
-2.1
sales,
group
and
administ
ration
expenses
EBITDA 0.5 0.4 1.0 0.6
1.3
EBITDA % 13.2 11.6 13.9 9.4
9.4
--------------------------------------------------------------------------------
-----
4-6/ 4-6/ 1-6/ 1-6/
1-12/
CHANGE IN VALUE 2013 2012 2013 2012
2012
OF INVESTMENT
PROPERTIES
--------------------------------------------------------------------------------
-----
Change in fair -8.8 -9.1 -10.4 -10.1
-6.3
value, Finland
Change in fair -0.7 0.6 1.4 1.2
1.6
value, Russia
Change in fair -0.5 0.6 -0.8 0.6
0.0
value, Estonia
Change in fair 0.0 0.0 0.0 0.0
0.0
value,
Lithuania
--------------------------------------------------------------------------------
-----
Change in fair -10.1 -7.9 -9.8 -8.4
-4.7
value
Changes in -0.4 -2.2 -0.5 -3.2
-10.7
acquisition
costs of
investment
properties in
financial year
Changes in fair 0.6 2.7 3.7 5.4
9.7
value of
projects in
progress
--------------------------------------------------------------------------------
-----
Effect on -9.8 -7.4 -6.5 -6.2
-5.7
profit of
change in
value of
investment
properties
CONTINGE
NT
LIABILI
TIES
Currency 30.06.2013 30.06.2012
31.12.2012
unit:
EUR
million
--------------------------------------------------------------------------------
--
Pledges
and
guarant
ees on
own
debt
Mortgage 237.9 538.1
605.6
s of
propert
ies
Pledged 711.6 203.5
201.5
securit
ies and
investm
ent
propert
ies
Other 164.3 56.8
53.5
guarant
ee
liabili
ties
Leasing 6.2 4.7
5.3
liabili
ties,
machine
ry and
equipme
nt
Project 0.4 0.2
0.2
liabili
ties
Interest
rate
and
currenc
y swaps
Nominal 233.4 162.0
190.4
values
Fair -6.5 -6.5
-9.0
values
BREAKDOWN OF FINANCIAL ASSETS AND LIABILITIES
The following table provides a list of the groups of financial
assets and liabilities used for valuation in accordance with IAS
39.
Loans and Available-for-sale Financial liabilities Financial
other financial assets measured at assets/
receivabl amortized
liabilities
es financial liabilities total
Non-cu
rrent
finan
cial
asset
s
Availa 5.7
5.7
ble-fo
r-sale
inves
tments
Other 1.9
1.9
non-c
urrent
recei
vables
Total 1.9 5.7
7.7
Curren
t
asset
s
Trade 14.8
14.8
and
other
recei
vables
Total 14.8
14.8
Non-cu
rrent
liabi
lities
Non-cu 34.5
34.5
rrent
finan
ce
lease
liabi
lities
Non-cu 493.8
493.8
rrent
inter
est-be
aring
liabi
lities
Non-cu 2.0
2.0
rrent
non-i
nteres
t-bear
ing
liabi
lities
Total 530.3
530.3
Curren
t
liabi
lities
Curren 2.3
2.3
t
finan
ce
lease
liabi
lities
Other 128.3
128.3
curre
nt
inter
est-be
aring
liabi
lities
Trade 29.2
29.2
and
other
payab
les
Income 1.0
1.0
tax
liabi
lity
Total 160.8
160.8
Fair
value
hiera
rchy
of
asset
s and
liabi
lities
measu
red at
fair
value
Level 1 Level 2 Level 3
Total
Assets
measu
red at
fair
value
Availa
ble-fo
r-sale
finan
cial
asset
s
Equity 1.7
1.7
inves
tments
,
measu
red at
acqui
sition
cost
Equity 1.1 2.9
4.0
inves
tments
,
measu
red at
fair
value
Total 1.1 4.6
5.7
Liabil
ities
measu
red at
fair
value
Financ
ial
liabi
lities
at
fair
value
throu
gh
profi
t or
loss
Deriva
tives
Intere 6.5
6.5
st
rate
swaps
,
meeti
ng the
criter
ia for
hedge
accou
nting
Total 6.5
6.5
There are no changes in hierarchs in the financial period.
ASSETS AND LIABILITIES CREATED FROM THE ACQUISITION OF LITHUANA VILNIUS
BUSINESS UNIT
Technopolis and Lithuanian ICOR Group signed a deal at May 31, 2013 from a new
office
campus in Lithuania, Vilnius. Technopolis announced the deal at March 15,
2013.
Final purchase price of the property is estimated to be EUR 31.8 million. The
rentable space of the two ready premises is 31,200 square meters and the
financial
occupancy rate is 100 percent. Third building included in the acquisition is
due for
completion in October, 2013 and the rentable space of this building will be
11,000
square meters. The pre-financial occupancy rate is 76 percent. Due to
previously
agreed possible additional purchase price, the final purchase price increased
to EUR
62.6 million. The purchase price includes the costs related to the
construction of
the third building. Costs related to the acquisition are included to the
administrative costs of 2013 of Technopolis Group.
Purchase price calculation Fair
value
Assets EUR
million
Non-current assets
0.0
Completed investment properties
47.3
Investment properties under construction
10.3
Current assets
0.1
Cash and cash equivalents
7.4
Assets, total
65.1
Liabilities
Non-current liabilities
32.8
Current liabilities
0.4
Liabilities, total
33.2
Group's net assets and liabilities
31.8
Total
31.8
Acquisition cost paid by cash (estimate)
31.8
Cash paid by the acquisition
31.8
Cash in the bank account
7.4
Effect to the cash flow
24.5
Net sales of the acquired properties from the beginning of the year to the
acquisition date have been
EUR 1.7 million and EBITDA EUR 1.4 million.
Distribution:
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