Technopolis Group Interim Report January 1 - March 31, 2017

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News Desk 2018
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Technopolis Group Interim Report January 1 - March 31, 2017

TECHNOPOLIS PLC           INTERIM REPORT             May 4, 2017  at 9:00 a.m. Technopolis Group Interim Report January 1 - March 31, 2017 Strong increase in net sales and earnings - Net sales EUR 44.3 (41.1) million, up 7.8% - EBITDA EUR 23.6 (21.9) million, up 7.7% - Constant currency net sales were up 5.8% and EBITDA was up 5.2% - Financial occupancy rate 93.5% (92.5%) - Earnings per share EUR 0.10 (0.09) - Direct result (EPRA) EUR 14.1 (12.3) million, up 15.0% - Direct result per share, diluted (EPRA) EUR 0.09 (0.10) - Net asset value per share (EPRA) EUR 4.25 (4.05) Technopolis has initiated a comprehensive review of the company´s strategy as well as strategic and financial targets, which it expects to complete in June.

  1–3/ 1–3/ 1–12/
Key Indicators 2017 2016 2016
Net sales, EUR million 44.3 41.1 172.1
EBITDA, EUR million 23.6 21.9 93.1
       EBITDA %, Rental operations 64.8 64.8 66.1
       EBITDA %, Services 11.7 7.9 9.4
Operating profit, EUR million 28.5 21.4 89.3
Net result for the period, EUR million 18.4 13.8 52.4
Earnings/share, EUR 0.10 0.09 0.33
Cash flow from operations/share, EUR 0.11 0.17     0.46
Equity ratio, % 42.8 38.0 41.5
Equity/share, EUR 3.95 3.67 3.95
       
  1–3/ 1–3/ 1–12/  
EPRA-based Key Indicators 2017 2016 2016  
Direct result, EUR million 14.1 12.3 52.6  
Direct result/share, diluted, EUR 0.09 0.10 0.40  
Net asset value/share, EUR 4.25 4.05 4.24  
Net rental yield, % 7.0 7.7 7.4  
Financial occupancy rate, %  93.5*  92.5* 93.4*  
               

* 3/2017: 16,000 m² under renovation. 3/2016: 15,250 m² under renovation. The EPRA-based (European Public Real Estate Association) direct result does not include unrealized exchange rate gains and losses, fair value changes or any non-recurring items, such as gains and losses on disposals. The guidelines of the European Securities and Markets Authority (ESMA) regarding Alternative Performance Measures (APMs, performance measures not based on financial statements standards) entered into force in July, 2016. Technopolis reports APMs, such as EPRA performance measures, to reflect the underlying business performance and to enhance comparability between financial periods. APMs may not be considered as a substitute for measures of performance in accordance with the IFRS. Share related indicators have been adjusted for the rights issue in fall 2016. Future Outlook Unchanged Technopolis expects its net sales and EBITDA to improve from 2016 based on the company’s current investment property portfolio and foreign exchange rates.

The Group’s financial performance depends on the development of the overall business environment, customer operations, financial markets, market yields, and exchange rates. Furthermore, any changes in the property portfolio may have an impact on the guidance. Keith Silverang, CEO: “Our first quarter 2017 operational performance was strong. Net sales grew by 5.8% year-on-year, on a constant currency basis, mainly thanks to higher occupancy rates and increased rentable space following the acquisition of our Swedish campus in Gothenburg last year and the successful completion of organic growth projects. Financial occupancy at the end of March was solid at 93.5% (92.5%). We also made progress in most of our business units, including Oulu, where we recently signed new long-term agreements. We also saw a clear profitability improvement with EBITDA growth of 5.2%, on a constant currency basis. The improvement was mainly due to higher occupancy rates as well as lower operational expenses. In April, we acquired an office property under construction in Vilnius neighboring our own campus and signed an agreement to acquire a neighboring land plot. This investment will enable us to better serve our customers, providing them with expansion space almost immediately. In addition to this, the Delta building in Vilnius was fully completed in the first quarter with an occupancy rate of over 90% and was granted a Gold-level LEED Certificate. Both investments in Vilnius are a good strategic fit with our Baltic campus network and offer a healthy return on investment. Our other organic expansion projects are progressing on schedule in Helsinki and in Tallinn, and there is organic expansion potential in many other campuses, including the Helsinki Metropolitan Area and CBD Oulu. Our service business has played an increasingly important role, and it continues to grow steadily. Its share of total net sales has now reached 13.5% (12.6%), and service sales were up 15.9% (14.5%) year-on-year. Service earnings are also showing improvement, with the EBITDA margin for services reaching 11.7% from 7.9% in the corresponding quarter last year. Our best performing units are generating an EBITDA margin of over 22% and penetration of close to 20%, which is the direction we want for the whole Group. For the rental operations, the EBITDA margin remained stable at 64.8% (64.8%). Organic growth projects and service growth are both driven by demand for more efficiency, flexibility and solutions that support workplace productivity. Coworking is one part of this overall megatrend that is pointing the way for our concept development. Technopolis’ coworking spaces have proven successful enough to expand our UMA Workspace in downtown Helsinki in May, only one year after its opening. Our financial position remains solid. Thanks to strong operational cash flow and liquidity, we paid down maturing debt according to schedule, as indicated in previous reports. The equity ratio rose to 42.8% (38.0%) and loan-to-value dropped to 53.4% (56.7%). Organic growth projects and rising service earnings are boosting cash flow less capital-intensively than through property acquisitions.” Full version of Technopolis Plc’s Interim report 1-3/2017 is attached. Webcast on May 4 at 10:00 a.m. The webcast briefing in English for investors, analysts and media will be held on May 4 at 10:00 a.m. Finnish time. The link to the webcast is www.technopolis.fi/webcast. The other details regarding conference call and webcast can be found on the publication release .

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

Technopolis provides the best addresses for success in six 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 50,000 employees in Finland, Sweden, Norway, Estonia, Russia and Lithuania. The Technopolis Plc share (TPS1V) is listed on Nasdaq Helsinki.

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