Technopolis Group Interim Report January 1 – September 30, 2015

TECHNOPOLIS PLC            INTERIM REPORT               October 29, 2015 at 9:00 a.m.

Technopolis Group Interim Report January 1 – September 30, 2015

Q3 Occupancy and Fair Values Improving

– Net sales rose to EUR 128.9 (120.3) million, up 7.1%
– EBITDA rose to EUR 72.9 (65.3) million, up 11.7%
– Financial occupancy rate rose to 94.5% (93.5%)
– Earnings per share rose to EUR 0.24 (0.14)
– Direct result (EPRA) EUR 38.8 (39.2) million, down 1.0%
– Direct result per share (EPRA) EUR 0.37 (0.37)
– Net asset value per share (EPRA) EUR 4.57 (4.89)

7-9/ 7-9/ 1-9/ 1-9/ 1-12/
Key Indicators 2015 2014 2015 2014 2014
Net sales, EUR million 39.8 40.3 128.9 120.3 161.7
EBITDA, EUR million 22.7 22.7 72.9 65.3 87.2
Operating profit, EUR million 24.4 16.0 63.1 46.4 42.9
Net result for the period, EUR million 11.9 8.2 32.8 25.0 -3.0
Earnings/share EUR 0.07 0.06 0.24 0.14 -0.15
Cash flow from operations/share, EUR 0.43 0.47 0.63
Equity ratio, % 38.2 40.6 38.5
Equity/share, EUR 4.25 4.60 4.17
7-9/ 7-9/ 1-9/ 1-9/ 1-12/
 EPRA-based Key Indicators 2015 2014 2015 2014 2014
Direct result, EUR million 11.4 14.1 38.8 39.2 55.9
Direct result/share, EUR 0.11 0.13 0.37 0.37 0.53
Net asset value/share, EUR 4.57 4.89 4.52
Net rental yield, % 7.7 7.3 7.5
Financial occupancy rate, % 94.5*) 93.5 94.7

*) 18,700 m² under renovation and 12,400 m² of unoccupied but rented space

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

Keith Silverang, CEO:

“The third quarter did not bring any dramatic change to the trend lines already visible in our operational performance in the first half of 2015. Financial occupancy has now reached 94.5% as expected. Fair values also increased by EUR 4.1 million in the third quarter.

Cumulative net sales growth in excess of 7% and EBITDA growth of almost 12% over 2014 is robust, but much of that growth came from payments (EUR 5.4 million) related to the premature termination of the Oulu leases reported in Q2. If we exclude these non-recurring items net sales and EBITDA grew 3.5% and 5.1% respectively, and with domestic inflation running almost flat, most of the EBITDA growth came from rising cost-effectiveness and the high-occupancy completion of the Vantaa G-building (occupancy 97.0%).

Of particular interest is the high occupancy of all our international units and the robust growth that our Tallinn and Vilnius units have demonstrated. Our Oslo unit has also strongly outperformed its market and operations in St. Petersburg (occupancy 99.8%) have continued to perform very well, despite the uncertainty related to the Russian economy.

In Finland business conditions remain challenging with no end in sight. Despite this, nearly all of our business units have outperformed the market. The HMA, Tampere, Kuopio and Jyväskylä units have all generated strong occupancy, sales and earnings. Oulu has proven resilient, and we are confident that, while it may take some time, we will be able to resell the remaining 11,000 square meters released from the agreements prematurely terminated this year.

For both our international and domestic units, hands-on customer care has been a crucial ingredient in successful operations. Direct sales and customer care, in combination with flexible facilities, targeted renovation investments and well-integrated service layering have enhanced customer satisfaction and created stickiness. The result is above-market occupancy and robust service sales growth (18% year-on-year so far). Customers need and want less square meters, more flexibility and more motivating working environments. We will embrace this trend because it is perfectly aligned with our concept.

Our top priority is to acquire good quality campuses in Scandinavian markets while reducing domestic exposure through joint ventures and the selective divestiture of individual assets and campuses. We are actively pursuing campus acquisition opportunities in accordance with the Group’s strategic targets.

On the financial side the company will continue using its excess liquidity to reduce loan-to-value (LTV) this autumn, while maintaining sufficient liquidity to execute any investment opportunities that may arise. With fair values increasing and debt repayments continuing, we expect LTV to decline by the year-end, assuming other variables remain unchanged.”

Full version of Technopolis Plc’s interim report for January-September, 2015 attached.

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

NASDAQ OMX Helsinki, main news media, www.technopolis.fi

About Technopolis:
Technopolis provides the best addresses for companies to operate and succeed in five countries in the Nordic-Baltic region. The company develops, owns and operates a chain of 20 smart business parks that combine services with flexible and modern office space. The company’s core value is to continuously exceed customer expectations by providing outstanding solutions to 1,700 companies and their 47,000 employees in Finland, Norway, Estonia, Russia and Lithuania. The Technopolis Plc share (TPS1V) is listed on NASDAQ OMX Helsinki.

Technopolis interim report Q3 2015.pdf