TECHNOPOLIS PLC STOCK EXHANGE RELEASE February 27, 2019 at 4:00 p.m. EET
AN EVENTFUL 2018
Full Year 2018
IFRS
- Net sales were EUR 177.4 (179.7) million, down 1.3% y-o-y
- Earnings per share were EUR 0.39 (0.46), down 16.0% y-o-y
- Equity per share was EUR 4.15 (4.06), up 2.2% y-o-y
Alternative Performance Measures
- EPRA NAV per share EUR 4.74 (4.58), up 3.5% y-o-y
- Financial occupancy rate was 95.8% (96.1%)
- EBITDA was EUR 88.0 (97.1) million, down 9.4% y-o-y
- EPRA earnings EUR 50.8 (60.6) million, down 16.3% y-o-y
- EPRA earnings per share were EUR 0.32 (0.39)
- Fair value of investment properties at the end of the period was EUR 1,606.4 million (1,537.9)
Q4/2018
IFRS
- Net sales EUR 46.0 (45.5) million
Alternative Performance Measures
- EBITDA was EUR 16.9 (22.7) million, down 25.6% y-o-y
- EPRA earnings EUR 7.9 (14.5) million, down 45.5% y-o-y
- EPRA earnings per share were EUR 0.05 (0.09), down 44.5% y-o-y
The numbers in brackets refer to the value in the corresponding period a year earlier unless otherwise stated.
KEY INDICATORS
| Q4/ 2018 | Q4/ 2017 | Change % | 2018 | 2017 | Change % | ||
| IFRS | |||||||
| Net sales | EURm | 46.0 | 45.5 | 0.9 | 177.4 | 179.7 | -1.3 |
| Equity ratio | % | - | - | - | 40.8 | 44.8 | - |
| Alternative Performance Measures | |||||||
| EBITDA | EURm | 16.9 | 22.7 | -25.6 | 88.0 | 97.1 | -9.4 |
| EPRA earnings | EURm | 7.9 | 14.5 | -45.5 | 50.8 | 60.6 | -16.3 |
| Loan-to-value (LTV) | % | - | - | - | 53.3 | 50.1 | - |
| EPRA Return on equity (rolling 12m) | % | - | - | - | 7.7 | 9.1 | - |
| EPRA earnings / share | EUR | 0.05 | 0.09 | -44.5 | 0.32 | 0.39 | -16.3 |
| EPRA NAV / share | EUR | - | - | - | 4.74 | 4.58 | 3.5 |
| EPRA NNNAV / share | EUR | - | - | - | 4.13 | 4.05 | 1.8 |
| Financial occupancy rate | % | - | - | - | 95.8 | 96.1 | - |
| EPRA net rental yield | % | - | - | - | 7.2 | 7.2 | - |
EPRA (European Public Real Estate Association) earnings do not include unrealized exchange rate gains and losses, fair value changes or any non-recurring items, such as gains and losses on disposals.
On August 28, 2018, Kildare Nordic Acquisitions S.à.r.l. announced a recommended public cash tender offer on all issued and outstanding shares in Technopolis Plc. The offer period ended on October 10, 2018.
On November 5, the offeror announced it had commenced redemption proceedings in respect of the remaining shares in Technopolis. On December 31, 2018, Kildare held 97.38% of all issued and outstanding shares and voting rights.
After the review period on February 6, 2019, Technopolis’ Board of Directors resolved to apply for termination of trading and the delisting of the company’s shares from the official list of Nasdaq Helsinki.
FROM THE CEO
“The most significant event of 2018 was the announcement and subsequent completion of the acquisition of Technopolis by Kildare Nordic Acquisitions S.à.r.l. It’s been a long, intensive process. Both the Kildare and Technopolis teams have worked extremely hard, and as a result we came to a satisfactory conclusion for all parties concerned. The integration process itself has proceeded in accordance with plans thanks in part to the fact that the teams have grown accustomed to working together.
Operationally, I am satisfied with our 2018 performance. Our net sales and EBITDA were slightly lower than the year before, but if you remove the effect of the Jyväskylä divestiture in November 2017, we had healthy growth. Group net sales decreased by 1.3% year-on-year, but our like-for-like sales grew 3.1%. The main driver was strong occupancy and robust service growth. Our financial occupancy rate (FOCR) at the end of the year was 95.8% (96.1%). In the Helsinki Metropolitan Area, FOCR declined year-on-year, mainly due to the relatively low occupancy rate of the newly opened Ruoholahti 3 building in Helsinki. However, occupancy improved from the previous quarter. The biggest year-on-year improvements in occupancy were in Oulu and Kuopio in Finland.
At the year-end, we had eight organic growth projects in progress. In the fourth quarter, we initiated two large ones with an aggregate value of EUR 146 million: one in Espoo, Finland and one in Vilnius, Lithuania. The approval of these two projects demonstrates the willingness of our new owner to make robust investments in Technopolis’ future growth. The cumulative value of all projects in progress amounts to EUR 294 million. All of our organic growth projects are strongly accretive, support internal customer growth, and yield scale-based campus efficiencies.
Services are emerging as an increasingly important and steadily growing part of our business. In 2018, service income reached EUR 28.7 million (13.1% y-o-y growth), and represented 16.2% of the Group net sales. In the fourth quarter, the share was 17.7%. The profitability of services was significantly impacted by UMA network ramp-up costs, especially in the second half of the year. The EBITDA margin for services in 2018 was 7.2% (10.5%) for the full year. The costs related to UMA-ramp-up amounted to EUR 3.2 million. Excluding those, the service EBITDA margin was 16.7%, in 2018.
Group EBITDA for the year was 9.4% lower than a year earlier, at EUR 88.0 (97.1) million, mainly due to significant costs related to the public tender offer, the Jyväskylä divestiture and UMA network ramp-up costs. Like-for-like EBITDA growth was 3.6%.
Yield compression was the primary driver behind positive fair value changes, which brought EUR 21.4 (28.3) million for the year, and were a significant contributor at the operating profit level.
We now have five stand-alone UMA coworking spaces in operation, two in Helsinki, one in Stockholm, one in Copenhagen and one in Oslo. Five more are set to open in the Nordic and Baltic countries in 2019 and one in Espoo, Finland in early 2020. We are particularly excited about the opening in Warsaw, Poland this year, as it also represents entry into a new market for Technopolis.
Finally it is worth noting that Technopolis has initiated refinancing negotiations to replace its current funding. We believe those will lead to a positive outcome and funding will be secured.”
BOARD OF DIRECTORS’ PROPOSAL FOR DIVIDEND DISTRIBUTION
At the end of the period, the parent company’s distributable funds totaled EUR 32.1 million.
The Board proposes that no dividend be distributed for the financial year 2018. The proposal is due to the ongoing redemption and delisting proceedings.
NEAR-TERM OUTLOOK
OECD estimates GDPs to grow 1.5–3.5% in all Technopolis market areas in 2019. Although economic growth is slowing down in Finland, too, and uncertainty regarding worldwide economic development has grown recently, persistently low interest rates still support the property investment market. According to market estimates, the yield requirements are expected to remain stable in all Technopolis markets, and to further decline in Oslo.
Taking into consideration the Technopolis brand, high customer satisfaction and strong financial position, the company’s management does not foresee any major changes in Technopolis’ market position or financial development in 2019, but estimates the steady growth and good operational performance to continue.
Technopolis Plc
Additional information:
Keith Silverang, CEO
tel. +358 40 566 7785
keith.silverang@technopolis.fi
DISTRIBUTION
Nasdaq Helsinki Oy
Main financial media
www.technopolis.fi/eng
Technopolis is a shared workspace expert. We provide flexible offices, coworking spaces and everything that goes with them. Our services run from designing the workspace to reception, meeting solutions, restaurants and cleaning. We are obsessed with customer satisfaction and value creation. Our 17 campuses host 1,600 companies with 50,000 employees in seven countries within the Nordic and Baltic Sea region. Technopolis Plc (TPS1V) is listed on Nasdaq Helsinki. www.technopolis.fi/en
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