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Technopls Ventures Ltd. — Audit Report / Information 2012
Feb 13, 2013
7074_rns_2013-02-13_25add7e7-d93a-49d6-a9a1-08594265f68a.html
Audit Report / Information
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Technopolis Group Financial Statements for 2012
Technopolis Group Financial Statements for 2012
TECHNOPOLIS PLC FINANCIAL STATEMENTS RELEASE February 13, 2013 at 8:00
a.m.
Technopolis Group Financial Statements for 2012
Highlights of 2012 compared to 2011:
- Net sales rose to EUR 107.3 (92.8) million, an increase of 15.6%
- EBITDA rose to EUR 55.8 (47.5) million, an increase of 17.3%
- Operating profit decreased to EUR 48.0 (72.0) million, due to
EUR -5.7 (26.3) million drop in fair value of investment properties - Profit attributable to the shareholders of the parent amounted to EUR 25.8
(46.7) million - Earnings per share were EUR 0.37 (0.70)
- Cash flow from operations per share was EUR 0.56 (0.46).
- Net asset value per share was EUR 5.67 (5.65)
- The financial occupancy rate was 95.3% (95.1%)
- The Board of Directors proposes a dividend of EUR 0.20 per share
The increase in net sales and EBITDA was mainly due to an increase of 11.7% in
leased space and a rise of 2.4% in like-for-like rental income. Changes of EUR
-5.7 (26.3) million in the fair value of investment properties had a negative
effect on the financial performance. Excluding changes in fair value and the
related tax effects, the operating profit was EUR 53.7 (45.7) million, and the
profit attributable to the shareholders of the parent company rose to EUR 29.9
(25.9) million. The strengthening of the Russian ruble contributed to earnings,
resulting in the recognition of EUR 0.8 (-0.9) million in financial income.
10-12/ 10-12/ 1-12/ 1-12/
Key indicators 2012 2011 2012 2011
Net sales, EUR million 28.7 24.9 107.3 92.8
EBITDA, EUR million 15.4 12.8 55.8 47.5
Operating profit, EUR million 15.2 13.0 48.0 72.0
Net result for the period, EUR million 8.7 11.0 25.8 46.7
Earnings/share, EUR 0.12 0.16 0.37 0.70
Cash flow from operations /share, EUR 0.21 0.13 0.56 0.46
Equity ratio, % 36.2 35.8
Equity/share, EUR 4.94 4.96
2012 share-related figures have been adjusted for the May share issue.
EPRA-based 10-12/ 10-12/ 1-12/ 1-12/
key indicators 2012 2011 2012 2011
Direct result, EUR million 1) 10.0 8.5 29.9 25.5
Direct result/share, EUR 1) 0.14 0.13 0.43 0.38
Net asset value/share, EUR 5.67 5.65
Net rental revenue, % 7.8 7.8
Financial occupancy rate, % 95.3 95.1
1) The company adopted a company-specific adjustment of the direct result
recommended by EPRA as of October 1, 2012. The company no longer includes
unrealized financial income and expenses due to changes in exchange rates in
its direct result. The comparison figures have been adjusted accordingly.
The EPRA-based (European Public Real Estate Association) direct result
increased by 17.2% year-on-year, amounting to EUR 29.9 (25.5) million. The
company's net rental yield was steady at 7.8% (7.8%), and the financial
occupancy rate rose to 95.3% (95.1%).
Keith Silverang, CEO:
2012 was a good year for Technopolis. We generated growth through the expansion
of our existing campuses and the Tohloppi acquisition from Yleisradio (The
Finnish Broadcasting Corporation) in Tampere. Given the prevailing challenging
business conditions, an increase of 15.6% in net sales and 17.3% in EBITDA and
a financial occupancy rate of 95.3% is a good result.
Last year's success was made possible by success in the local business units.
They managed to attract new tenants to our properties while holding on to our
existing clients. In addition to our flexible facilities and the Technopolis
customer service concept, the company's efficient sales organization and
proactive service attitude have become a sustainable competitive advantage.
This is clearly visible in our high financial occupancy rates.
Technopolis enhanced its lease portfolio in 2012 by concluding longer leases.
At the year end, the company's average lease period was 39 months, compared to
26 months a year earlier. The growth in lease periods also increased
Technopolis' euro-denominated lease stock, which increased by 37.5% over
year-end 2011. The portfolio totaled EUR 296.1 million at the end of the year.
Recent changes in the lease portfolio have increased the stability and
predictability of operations.
In 2012, Technopolis financed its growth through a rights issue with a net
intake of EUR 31.8 million. In addition, the company raised new bank loans
amounting to EUR 89.6 million. The average interest rate on interest-bearing
liabilities was 1.83% at the end of the year. The availability of financing
remained good throughout the year, although bank loan margins began to
increase. The increase in margins, mainly with regard to new bank loans, will
manifest itself as an increase in the average interest rate this year. Due to
the increase in the price of bank financing and favorable demand in the bond
market, and in order to diversify its sources of financing, the company is also
considering raising capital in the bond market in the future.
In accordance with the company's strategy, we will continue to pursue
profitable growth in the future. The focus of growth will shift to some extent
from organic construction projects to company and property acquisitions, both
in Finland and abroad.
Business Environment
2012 was a challenging year for the Eurozone. Growth was burdened by decreased
loan supply due to the debt crisis, the need to stabilize public finances,
decreased export demand in industrialized countries and increasing
unemployment. Due to these factors, Eurozone GDP growth turned negative during
the second quarter, and it has been estimated that full-year GDP decreased by
0.4%. The first half of 2013 is expected to be a time of negative growth in the
Eurozone, but the economy is expected to begin to grow during the second half
of the year and to turn full-year growth figures positive.
In Finland, GDP growth turned negative during the second quarter, and full-year
growth in 2012 is estimated to have remained under 0.3%. In 2013, growth is
expected to be approximately 1%, taking place mainly during the second half of
the year. Companies prepared for the softening trend during 2012 and adjusted
their operations accordingly.
The Russian economy, which is dependent on oil exports and other commodities,
has remained relatively strong and its estimated growth in 2012 was
approximately 3.6% in real terms. The St. Petersburg region is expected to grow
at a faster rate than this. In 2013, growth in the Russian economy is expected
to slow down slightly, amounting to some 3.3%.
The estimated growth of Estonia's real GDP was approximately 2% in 2012. The
unemployment rate was decreasing throughout the year and is the lowest among
the Baltic countries at 9.7%. The Estonian economy is in good condition and the
state is almost debt-free. In 2013, GDP is estimated to grow by 3.1%.
Financial occupancy rates
In spite of macroeconomic uncertainty and recent negative development in GDP,
demand for Technopolis business space has remained good. The Group's financial
occupancy rates are as follows:
December 31, September June 30, March 31, December
2012 30, 2012 2012 2012 31, 2011
Group 95.3 94.8 94.1 94.3 95.1
Finland 95.1 94.7 93.9 94.4 95.1
Oulu 94.5 93.3 91.8 92.2 91.8
HMA 91.9 92.0 88.4 95.5 95.3
Tampere 97.6 98.1 98.7 98.6 98.5
Kuopio 94.9 94.3 96.4 96.1 98.2
Jyväskylä 98.6 98.4 98.2 91.4 96.8
Lappeenranta 92.5 93.5 92.3 94.7 92.6
Estonia, 94.9 92.5 92.9 90.2 90.7
Tallinn
Russia, St. 100.0 100.0 99.4 97.1 100.0
Petersburg
The Group's financial occupancy rate was 0.2 percentage points higher than a
year earlier, and 0.5 percentage points higher than at the end of the previous
quarter.
In Finland, Technopolis' financial occupancy rate remained at the same level as
at in the end of the previous year. In Oulu, conditions on the office space
rental market improved during 2012 and the financial occupancy of the Oulu unit
increased to 94.5% (91.8%). In the Helsinki metropolitan area, market rents
were unchanged or slightly lower in 2012. The financial occupancy rates of the
company's Helsinki Metro unit decreased by 3.4 percentage points during the
year due to the expiry of two major leases during the second half of the year
and the 89.2% occupancy rate of Ruoholahti phase 2. The ICT industry vacated
some space in Tampere during 2012, but we were able to lease them to new
tenants. Technopolis' financial occupancy rate decreased by 0.9 percentage
points in Tampere during 2012, yet remained the second-highest in the company.
In Kuopio, financial occupancy rates decreased by 3.3 percentage points during
the year, due to rearrangements in the facilities to accommodate new customers.
The Jyväskylä rental market has been good, and demand focuses on the downtown
area, where the Technopolis Innova campus is located. The company's financial
occupancy rates increased in Jyväskylä throughout 2012 and amounted to 98.6%
(96.8%) at the end of the period under review. In Lappeenranta, Technopolis'
financial occupancy rates increased by 0.1 percentage points year-on-year.
Market occupancy rates and rents have been increasing in Tallinn since 2010. At
the end of the year, the market occupancy rate of high-quality B1 office space,
such as Technopolis Ülemiste, was 89.8% (91.2%). The financial occupancy rate
of Technopolis' airport campus rose during the year to 94.9% (90.7%) at the end
of 2012.
In St. Petersburg, demand focused on the downtown area in 2012. However, rental
demand remained strong, especially in class B properties, which includes the
Technopolis Pulkovo airport campus based on its location. The occupancy rate in
the market was 93.3% (90.1%). The company's financial occupancy rate varied
during the year as it rearranged its tenant portfolio, but the occupancy rate
increased to 100.0% during the second half of the year.
Business Segments
Geographical Segments
Net sales and EBITDA in Finnish operations developed favorably. Net sales were
EUR 97.4 (85.2) million and EBITDA was EUR 51.2 (44.8) million. The EBITDA
margin was stable at 52.5% (52.6%). Compared to the previous year, net sales
increased by 14.4% and EBITDA by 14.2%.
In Tallinn, the net sales of the Technopolis Ülemiste airport campus were EUR
4.8 (4.7) million and EBITDA was EUR 3.1 (3.1) million. Net sales increased by
3.9% and EBITDA by 0.6% compared to 2011. The EBITDA margin was 64.9% (67.0%).
In 2012 it was affected by marketing costs of properties under construction.
Ülemiste's average rents increased during 2012, and leases totaling
approximately 10,000 sqm were renegotiated with customers.
In St. Petersburg, the net sales of the Technopolis Pulkovo airport campus were
EUR 5.0 (2.9) million and EBITDA was EUR 1.4 (-0.2) million. Net sales
increased by 71.7% compared to 2011 and EBITDA was in the black. The EBITDA
margin was 27.4% (-7.8%). The first phase of the campus was completed in June
2011, which affects the figures for the comparison period. As the result of
negotiations held early in 2012, rents significantly increased compared to the
previous year, boosting the full-year net sales and EBITDA of the campus.
Space and Service Business
Rental revenue accounted for 86.7% (86.7%) and service revenue for 13.3%
(13.3%) of net sales.
Breakdown of net sales and EBITDA by business function (excluding eliminations):
EUR million,unless otherwise 10-12/2012 10-12/201 1-12/2012 1-12/2011
specified 1
Space
Net sales 24.6 21.4 93.0 80.7
EBITDA 16.6 14.2 61.9 52.9
EBITDA % 67.4 66.3 66.5 65.6
Services Net sales 4.0 3.4 14.2 12.1
EBITDA 0.4 0.6 1.3 2.0
EBITDA % 10.2 16.9 9.4 16.4
The full-year EBITDA margin of the space rental business increased by 0.9
percentage points compared to the previous year. The EBITDA margin decreased to
9.4% (16.4%) in the service business. This was mainly due to a change in the
allocation of operating expenses between the services and space rental in
internal accounting.
Financial Performance
The Group's net sales for the period under review were EUR 107.3 (92.8)
million, an increase of 15.6%. The Group's EBITDA was EUR 55.8 (47.5) million,
up 17.3%. The growth comprised an 11.7% increase in rentable space and an
increase of 2.4% in like-for-like rental income.
The Group's operating profit was EUR 48.0 (72.0) million. The decrease was due
to a decline in the fair value of investment properties. Changes in fair value
amounted to EUR -5.7 (26.3) million for the period. Without the change in fair
value, operating profit was EUR 53.7 (45.7) million.
The Group's net financial expenses totaled EUR 13.6 (12.0) million, including
EUR 1.1 of losses recognized due to changes in the fair value of interest
swaps. The figures for the comparison period include EUR 1.7 million of
unrealized interest swap income recognized in the comprehensive statement of
income before the Group changed to IAS 39 hedge accounting as of 1 May 2011.
Financial income of EUR 0.8 (-0.9) million was recognized from the
strengthening Russian ruble.
The Group's result before taxes totaled EUR 34.5 (60.0) million. Without the
change in fair value, the result before taxes was EUR 40.2 (33.7) million.
Customers and Lease Stock
Technopolis has a total of approximately 1,400 customers, and 23,000 customer
employees working in Technopolis facilities. The twenty largest customers lease
approximately 34% of the company's rentable space.
Lease stock, % of June 30, March 31, December
space 2012 2012 31, 2011
-----------------------------------
Notice period in December 31, September
months 2012 30, 2012
0-3 13.8 17.3 16.1 16.7 13.1
3-6 25.3 28.1 30.5 29.4 28.7
6-9 7.4 7.4 4.9 5.8 6.2
9-12 6.7 7.6 7.7 5.6 5.7>12 months, 46.8 39.6 40.8 42.5 46.3
total
Average lease 39 25 27 26 26
term in months
Lease stock, EUR 296.1 238.2 239.7 215.6 215.4
million
During the year, the average lease term increased by 13 months. This is a
result of long fixed-term leases in the education and health care sectors and a
twenty-year lease signed with Yleisradio in October.
Properties and Investments
Technopolis' facilities are located next to good transportation connections in
the vicinity of universities, airports or downtown areas.
The fair values of the Group's investment properties at the end of the period
totaled EUR 1,014.1 (905.5) million, of which completed investment properties
accounted for EUR 956.5 (843.8) million and investment properties under
construction were EUR 57.6 (61.7) million.
Fair value, EUR December 31, September June 30, March 31, December 31,
million 2012 30, 2012 2012 2012 2011
Group 1,014.1 963.2 944.0 932.8 905.5
Finland 838.9 784.7 786.3 765.3 726.7
Oulu 225.3 224.2 224.9 229.2 231.6
HMA 205.2 206.5 206.9 179.7 181.5
Tampere 189.2 134.1 133.9 134.4 120.3
Kuopio 92.2 93.6 94.5 95.7 88.3
Jyväskylä 97.9 97.1 96.7 96.8 75.8
Lappeenranta 29.2 29.1 29.4 29.5 29.3
Estonia 63.9 64.4 64.5 63.8 64.7
Russia 53.6 53.5 51.8 54.0 52.4
Under 57.6 60.7 41.4 49.6 61.7
construction
The Group's total floor space in completed investment properties at the end of
the period was 644,300 (576,900) sqm, up 11.7%.
1,000 sqm December 31, September 30, June 30, March 31, December 31,
2012 2012 2012 2012 2011
Group 644.3 604.1 604.2 595.2 576.9
Finland 541.0 500.8 500.9 491.9 473.6
Oulu 194.3 194.3 194.4 194.4 194.4
HMA 86.6 86.6 86.6 77.6 77.6
Tampere 112.1 71.9 71.9 71.9 66.8
Kuopio 60.3 60.3 60.3 60.3 56.8
Jyväskylä 60.4 60.4 60.4 60.4 50.8
Lappeenran 27.3 27.3 27.3 27.3 27.3
ta
Estonia 79.2 79.2 79.2 79.2 79.2
Russia 24.1 24.1 24.1 24.1 24.1
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 a)Occupan sqm EUR b)Initial Completi
cy million yield, % on
rate, %
Acquired
-
Tampere Tohloppi 100.0 32,000 23.3 10.1 10/2012
Completed
-
Kuopio Viestikatu 2B 89.3 3,100 5.4 8.4 01/2012
Tampere Hermia 15B 100.0 4,500 10.9 7.3 01/2012
Jyväskylä Innova 2 100.0 8,000 20.5 7.8 03/2012
HMA Ruoholahti 2 c)89.2 8,600 26.8 6.1 06/2012
Tampere Yliopistonrinne c)93.4 7,500 22.5 6.4 10/2012
2
Under construction
- Kuopio Viestikatu 89.9 9,300 16.5 7.8 02/2013
7B&C
Tallinn Löötsa 8C 98.9 6,200 8.3 8.4 03/2013
St. Pulkovo 2 8.8 18,700 42.0 8.5 10/2013
Petersbur
g
Tallinn Löötsa 54.9 16,300 24.3 8.4 10/2013
8A&B
Jyväskylä Innova 4 37.0 8,900 23.7 7.7 10/2013
a) Status on January 31, 2013
b) Estimated first-year net cash flow / fair value of the property
c) Status on February 12, 2013
All of the Technopolis projects under construction at the closing date are
expansions to existing campuses. During 2012, the company spent EUR 23.3 (-)
million acquiring properties and invested a total of EUR 107.2 (98.1) million
in construction.
Financing
The Group's balance sheet totaled EUR 1,082.7 (962.9) million, of which
liabilities totaled EUR 693.2 (619.7) million. The Group's equity ratio was
36.2% (35.8%). At the end of the period, the Group's net gearing was 152.1%
(156.0%). The Group's equity per share was EUR 4.94 (EUR 4.96).
At the end of the period, the Group's interest-bearing liabilities from
financial institutions amounted to EUR 608.1 (547.7) million, and the average
capital-weighted loan maturity was 8.5 (8.7) years. The average interest rate
on interest-bearing liabilities was 1.83% (2.80%). The Group's interest fixing
period was 1.8 (1.2) years at the end of the period. At the end of 2012,
floating-rate loans constituted 63.9% (63.0%) of interest-bearing liabilities,
and 36.1% (37.0%) were fixed-rate loans. Of interest-bearing liabilities 7.0 %
were pegged to the under 3-month Euribor rate, 56.9% were pegged to the 3 - 12
month Euribor rate and 36.1% were fixed-rate loans with maturities of 13 - 60
months.
At the end of the reporting period, Technopolis had EUR 129.1 (63.0) million in
untapped credit facilities and cash amounting to EUR 15.7 (12.5) million. The
credit facilities contained a EUR 112.7 (45.0) million credit line and a EUR
16.4 (18.0) million revolving credit facility. In addition, the company has a
EUR 120.0 (120.0) million commercial paper program, of which EUR 46.0 million
was issued at the end of the reporting period.
During the 12-month period following the period under review, EUR 108.4 (78.9)
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, Nordea, Handelsbanken, Danske Bank, and
OP-Pohjola Group. Their total lending to the company amounted to EUR 465.0
million.
A one percentage point change in market rates would cause a EUR 2.9 (2.6)
million change in interest costs per annum. At the end of the reporting period,
there were interest rate swaps covering EUR 190.4 million (EUR 170.0 million)
of principal converting to hedge ratio of 31.3% (31.0%).
The Group's interest coverage ratio was 4.5 (3.7) and the loan-to-value ratio
was 59.5% (60.0%).
The Group had interest-bearing liabilities with covenants worth EUR 407.7
(252.9) million. Loans amounting to EUR 366.6 (212.9) million include covenants
relating to the equity ratio. A decline in the equity ratio may lead to higher
interest rate margins or premature repayment of these loans. Of these loans,
EUR 207.5 (40.6) million include a call-in provision. The repayment covenant is
breached if the equity ratio falls below 30%. If the equity ratio decreased to
below 33%, interest rate expenses would increase by EUR 0.5 (0.4) million per
annum.
Organization and Personnel
The CEO of Technopolis Plc is Keith Silverang. Reijo Tauriainen, CFO, is the
company's Deputy CEO.
On December 31, 2012, the Group Management Team comprised Keith Silverang,
Reijo Tauriainen, Marko Järvinen, Satu Eskelinen, Sami Juutinen, Kari Kokkonen,
and Jukka Rauhala. The composition of the Management Team changed at the
beginning of 2013. As of January 1, 2013, the new Management Team is: Keith
Silverang, Reijo Tauriainen, Juha Juntunen, Sami Juutinen, Kari Kokkonen, and
Outi Raekivi.
The Technopolis operational organization consists of three geographic units:
Finland, Russia, and Estonia. The Group organization also has matrix functions
for the Group's real estate development, services, and support services.
During the period, the Group employed an average of 178 (158) people. Rental
operations employed 98 (89) people and the service business 80 (69) people. At
the end of the period under review, the Group's personnel totaled 179 (174).
The increase in the number of personnel is mainly due to strengthening the
central corporate functions and services.
Environment
Key objectives of the company's environmental strategy for 2011 - 2015 include
reducing like-for-like energy consumption by 10%, water consumption by 8%, and
carbon dioxide emissions by 20%, compared to 2010.
In 2012, all Technopolis offices in Finland were awarded the right to use the
WWF Green Office label, and Technopolis Ülemiste in Estonia will use it as of
February 1, 2013. The company seeks LEED environmental certificates for all new
investments, and two new properties were awarded LEED certificates in 2012.
Quarterly comparison of Finnish units:
10-12/ 10-12/ 1-12/ 1-12/ %
2012 2011 2012 2011 change
--------------------------------------------------------------------------------
Energy consumption, kWh/gross 72.9 72.8 232.7 235.6 -1.3
sqm
Water consumption, m3/person 1.34 1.18 1.21 1.27 -5.3
Carbon dioxide emissions, CO2e 14.8 23.6 41.0 81.8 -49.8
kg/gross sqm
The comparison only includes comparable properties owned by the company
throughout the year. The significant decrease in carbon dioxide emissions is
primarily due to the company adopting “green electricity”, with sources such as
wind power and hydroelectric power, as of January 1, 2012.
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 growth average of 15% per annum
- over EUR 50 million net sales outside Finland
- at least 6% return on capital employed per annum
- equity ratio over 35% over the cycle
- 40% - 50% dividend distribution on net profit excluding changes in fair value
and their tax effects
The company is strengthening the share of the health and education sectors in
its customer portfolio by investing in these segments and the services employed
by them. Technopolis is working to diversify its customer portfolio
geographically and by sector.
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 acquisitions are sufficient size and growth
potential, excellent locations in growth centers, a high-quality and flexible
property portfolio, and positive cash flow. In addition, the acquisition must
have a positive impact on earnings per share, and the customer base of the
property 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 interest rate forecast created by the company.
A one percentage point change in money market rates would change interest rate
costs by EUR 2.9 million per annum.
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, refinancing, and loan 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 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 on the company's
business and financial performance of potential changes in customers' financial
positions. The company estimates that the risk to its business related to the
restructuring of the electronics industry currently represents a maximum of 3%
of the space leased to customers. Customer risk management focuses on having a
profound understanding of customers' businesses and active monitoring of
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
market yields increase, the fair value of properties decreases. Conversely, as
market yields decrease, the fair value of properties increases. Such changes
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.
However, a negative change in the value of investment properties may reduce the
company's equity ratio, which may affect the covenant terms of the leases. 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, Russia, and Estonia. The parent
company has several subsidiaries and associates in Finland. 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%). A more detailed Group structure is presented in the company's annual
report 2011 on page 84.
The mutual real estate companies Innova 4, Technopolis Tohloppi, Technopolis
Innopoli 3, and Technopolis Viestikatu 7 were established during the financial
period.
Annual General Meeting 2012
The Annual General Meeting of Shareholders (AGM) of Technopolis 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 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, 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 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 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, in addition to the Chairman
of the Board of Directors who acts 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 nomination committee continue until a
new nomination committee is appointed, unless the general meeting resolves
otherwise. The Nominating Committee also prepares the above-mentioned proposals
for extraordinary general meetings, if needed. A person who cannot, according
to the applicable Finnish Corporate Governance Code, be appointed to a
nominating committee of the Board of Directors may not be appointed to the
nominating committee. The shareholders' nominating committee must also fulfill
the requirements of independence in relation to the company as set out in the
Code.
Based on shareholdings as of October 1, 2011, the members of the Nominating
Committee are Risto Murto, Vice President of Varma Mutual Pension Insurance
Company as the Chairman, 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, Chairman of the Board of Directors of
the company, will act as the Nominating Committee's expert member and
secretary. The new Nominating Committee was established on the basis of
shareholdings on October 1, 2012. There were no changes in the composition of
the Nominating Committee.
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 the company's own shares to be repurchased and/or accepted as
pledge shall not exceed 6,338,500 shares, which corresponds to approximately
10% of all the company's shares. 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, 2013.
The Annual General Meeting authorized the Board of Directors to decide on the
issuance of shares and other special rights entitling holders 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 holders to shares. The issuance of shares and of
special rights entitling holders to shares may be carried out in deviation from
the shareholders' pre-emptive rights (directed issue). The Board of Directors
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, but no later than 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 holders to shares.
Stock-Related Events and Disclosures of Changes in Holdings
At the end of the reporting period, the company had 75,561,227 shares
outstanding. 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. The number of shares in the company was 63,385,044 shares
on March 31, 2012. The number of shares increased by 81,347 shares as the
result of the directed share issue without consideration to key employees
covered by the company's share incentive program executed on April 26, 2012.
The number of shares increased by a further 12,088,836 new shares with the
rights issue that ended on June 18, 2012, and 6,000 shares subscribed to using
Technopolis 2007C options on November 28, 2012. The dilution effect of these
share issues totaled 19.2%. The share issues were implemented by virtue of a
Board authorization of the Annual General Meeting of March 27, 2012.
On February 2, 2012, Ilmarinen Mutual Pension Insurance Company announced that
its direct holding of Technopolis Plc's share capital and votes had increased
above 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 10% on October 20, 2010 and below 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 0.11% of shares and votes.
The subscription period for 2007C stock options decided upon by the Annual
General Meeting of Technopolis Plc on March 22, 2005 commenced in accordance
with the option program's terms and conditions on May 1, 2012 and Technopolis
applied for entry of the 2007C stock options on the trading list of the NASDAQ
OMX Helsinki exchange. The trading of 2007C stock options on the NASDAQ OMX
Helsinki exchange commenced on May 2, 2012.
On April 26, 2012, the company's Board of Directors approved a directed share
issue of 81,347 new shares in the company without consideration to the key
employees fulfilling the Performance Share Plan target criteria based on the
authorization granted by the Annual General Meeting on March 27, 2012. A total
of 18 people belonging to the management and personnel of the company received
rewards in the share issue. The shares were registered with the Trade Register
on April 30, 2012 and listed on the trading list of NASDAQ OMX Helsinki on May
2, 2012.
On May 15, 2012, the company's Board of Directors decided on a rights issue
based on the authorization granted by the Annual General Meeting on March 27,
2012, and to issue a maximum of 12,088,836 new shares, representing
approximately 19.05% of all shares in the company. The final result of the
rights issue was published on June 18, 2012.
All 12,088,836 new shares offered were subscribed in the share issue.
11,874,720 shares were subscribed in the primary subscription, which is
approximately 98.2% of the shares offered. 8,470,366 shares were subscribed in
the secondary subscription, of which the subscription of 214,116 shares was
approved. Thus, 168.3% of the shares offered were subscribed.
The subscription price was EUR 2.70 per share, and the company raised
approximately EUR 31.8 million through the share issue after expenses and fees.
The shares were registered on June 19, 2012. They were listed on the trading
list of NASDAQ OMX Helsinki on June 20, 2012.
The 6,000 shares subscribed using 2007C stock options were registered with the
Trade Register on November 28, 2012. The total number of Technopolis shares
rose to 75,561,227.
Untapped Board Authorizations
The Board of Directors was authorized by the Annual General Meeting of 2012 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 pledge of the company's own
shares.
Following the share issues executed during the reporting period, the Board may
decide on the issuance of a further 506,817 new shares, conveyance of treasury
shares held by the company or issuance of options and other special rights. The
company's Board of Directors has not exercised the authorization to repurchase
and/or accept as pledges the company's own shares, and the company did not hold
any treasury shares at the end of the reporting period.
Board of Directors' Proposal for Distribution of Profit
At the end of the period, distributable funds of the parent company were EUR
26,479,400. The Board proposes that a dividend of EUR 0.20 (0.20) per share be
paid, totaling EUR 15,112,245. The Board proposes that the remainder be left in
the retained earnings account. The proposed dividend is 50,6% of the earnings
per share, excluding changes in the fair value of investment properties and
their tax effects.
There have been no significant changes to the company's financial status after
the end of the financial period. According to the opinion of the Board of
Directors, the company's liquidity is good and the proposed dividend will not
negatively influence the company's solvency.
2013 Annual General Meeting
The Annual General Meeting in 2013 will be held in Oulu on March 27, 2013.
Shareholders can make resolution proposals at the meeting in matters germane to
the Annual General Meeting and included in the agenda. Shareholders who wish to
include items on the agenda of the Annual General Meeting should submit their
request with reasoning or resolution proposals by e-mail to
[email protected] by February 15, 2013.
Post-Fiscal Events
On January 25, 2013, Technopolis announced that it had sold its Innovation Mill
operations to Open Innovation Management Oy, which is owned by two former
members of the company's Management Team.
On January, 2013 Shareholders' Nomination Board announced its proposals on the
remuneration and the members of the Board of Directors to the Annual General
Meeting.
On February 12, 2013, the company announced that it will acquire a new campus
in Peltola, Oulu. It is located in the vicinity of growing Kontinkangas
hospital, university and business district. The investment is EUR 31.7 million.
The campus is suitable for a multi-user environment and its total rentable
space is approximately 37,600 sqm including a parking garage with 800 parking
spaces.
Future Outlook
The Company estimates that its net sales and EBITDA will grow 9 - 12 % in 2013
from the previous year.
The Group's financial performance depends on the development of the overall
business environment, customer operations, financial markets, and market yield
requirements. Furthermore, any property transactions that take place will have
an impact on the guidance.
Vantaa, February 13, 2013
TECHNOPOLIS PLC
Board of Directors
Additional information:
Keith Silverang
CEO
tel. +358 40 566 7785
APPENDICES:
A stock exchange release and presentation of the Financial Statements are
available on the company's website at www.technopolis.fi.To request a hardcopy
of the document, please call +358 46 712 000 /Technopolis info. The company's
Annual Report will be published on week 10 on the company's website.
Technopolis offers a service for receiving releases at the company's website at
www.technopolis.fi. Individuals who sign up with the service will receive the
company's bulletins electronically.
Financial Reports
The accounting policies applied in the Financial Report are the same as in the
2011 annual report. The formulas for calculating key indicators are available
on the company's website. The earnings and balance sheet figures per share for
2011 have been adjusted for the rights issue in spring 2012.
Technopolis Group employs derivative instruments (mainly rate swaps) for
hedging risks relating to market rate fluctuations. As of May 1, 2011, the
Group has implemented 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. Most of the Group's current interest rate swaps meet the
criteria for hedge accounting. Changes in the fair value of ineffective hedges
are recognized immediately in the income statement.
The company will change the principle of recognition of deferred tax assets and
liabilities as of the beginning of 2013 on the basis of Section 14 (b) of IAS
8. The company estimates that its shareholdings in real estate companies are
recoverable through the sale of the shares. According to the new recognition
principle, the effect of the change will be recognized retroactively in
retained earnings under shareholders' equity and will have an effect on the
company's equity ratio. The change in the recognition principle will also
affect the accumulation of deferred taxes and the equity ratio in the future.
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 10-12/ 10-12/ 1-12/ 1-12/
Currency unit: EUR million 2012 2011 2012 2011
Net sales 28.66 24.87 107.33 92.83
Other operating income 1) 0.69 0.56 1.71 1.22
Other operating expenses -13.91 -12.58 -53.29 -46.52
Change in fair value of investment properties 0.28 0.59 -5.70 26.28
Depreciation -0.54 -0.48 -2.01 -1.83
Operating profit/loss 15.17 12.96 48.03 71.99
Finance income and expenses -3.97 -2.50 -13.55 -11.98
Result before taxes 11.20 10.45 34.48 60.01
Current taxes -2.70 1.19 -7.53 -11.22
Net result for the period 8.50 11.64 26.95 48.80
Other comprehensive income items
Translation difference 0.10 -0.03 0.94 -0.64
Available-for-sale financial assets -0.02 0.00 0.02 0.05
Derivatives -0.09 -0.60 -3.97 -4.39
Taxes related to other comprehensive income 0.03 0.16 0.97 1.13
items
Other comprehensive income items after taxes for 0.02 -0.47 -2.03 -3.86
the period
Comprehensive income for the period, total 8.51 11.17 24.92 44.94
Distribution of profit for the period:
To parent company shareholders 8.73 10.96 25.82 46.70
To non-controlling shareholders -0.24 0.68 1.13 2.10
8.50 11.64 26.95 48.80
Distribution of comprehensive income for the
period:
To parent company shareholders 8.75 10.48 23.79 42.84
To non-controlling shareholders -0.24 0.68 1.13 2.10
8.51 11.17 24.92 44.94
Earnings per share based on result of flowing to
parent company shareholders:
Earnings/share, basic (EUR) 0.12 0.16 0.37 0.70
Earnings/share, adjusted for dilutive effect 0.12 0.16 0.37 0.70
(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 12/31/2012 12/31/2011
Non-current assets
Intangible assets 5.56 6.72
Tangible assets 13.73 12.02
Completed investment properties 956.52 843.78
Investment properties under 57.56 61.70
construction
Investments 12.51 12.21
Deferred tax assets 2.74 2.57
Non-current assets 1048.62 938.99
Current assets 34.12 23.89
Assets, total 1082.73 962.88
STATEMENT OF FINANCIAL POSITION,
SHAREHOLDERS' EQUITY AND
LIABILITIES
Currency unit: EUR million 12/31/2012 12/31/2011
Shareholders' equity
Share capital 96.91 96.91
Premium fund 18.55 18.55
Other funds 110.20 81.10
Translation difference 0.30 -0.64
Other shareholders' equity 121.67 87.42
Retained earnings 25.82 46.70
Parent company's shareholders' 373.46 330.04
interests
Non-controlling interests 16.07 13.13
Shareholders' equity, total 389.53 343.17
Liabilities
Non-current liabilities
Interest-bearing liabilities 499.69 468.84
Non-interest-bearing liabilities 0.32 1.04
Deferred tax liabilities 49.73 45.97
Non-current liabilities, total 549.74 515.85
Current liabilities
Interest-bearing liabilities 108.45 78.87
Non-interest-bearing liabilities 35.02 24.99
Current liabilities, total 143.46 103.86
Liabilities, total 693.21 619.71
Shareholders' equity and 1082.73 962.88
liabilities, total
STATEMENT OF CASH FLOWS 1-12/ 1-12/
Currency unit: EUR million 2012 2011
Cash flows from operating activities
Net result for the period 26.95 48.80
Adjustments:
Change in fair value of investment 5.70 -26.28
properties
Depreciation 2.01 1.83
Share of profits of associates -0.03
Gains from disposals -0.10 0.03
Other adjustments for non-cash 0.25 0.60
transactions
Financial income and expenses 13.55 12.01
Taxes 7.53 11.22
Increase / decrease in working capital 1.04 -0.90
Interests received 0.16 0.18
Dividends received 0.01 0.01
Interests paid and fees -10.28 -10.24
Other financial items in operating -4.41 -2.40
activities
Taxes paid -3.26 -4.35
Net cash provided by operating 39.2 30.5
activities
Cash flows from investing activities
Investments in other securities 0.00 -0.01
Investments in investment properties -107.17 -98.13
Investments in tangible and intangible -8.25 -4.36
assets
Granted loans -0.08
Repayments of loan receivables 0.02 0.13
Proceeds from sale of investments 0.05 0.41
Proceeds from sale of tangible and 0.10 0.16
intangible assets
Acquisition of subsidiaries -0.66
Acquisition of associates -0.67 -0.72
Proceeds from sales of associates 0.87
Net cash used in investing activities -116.58 -101.74
Cash flows from financing activities
Increase in long-term loans 96.33 113.32
Decrease in long-term loans -58.24 -36.83
Dividends paid -12.67 -10.77
Paid share issue 32.65
Capital investment by the minority 1.81 0.78
Change in short-term loans 20.88 12.87
Net cash provided by financing 80.77 79.38
activities
Net increase/decrease in cash assets 3.35 8.10
Effects of exchange rate fluctuations on -0.18 -0.08
cash held
Cash and cash equivalents at 12.51 4.49
period-start
Cash and cash equivalents at period-end 15.68 12.51
STATEMENT OF
CHANGES IN EQUITY
Currency unit: EUR Equity attributable to owners of the parent
million
-------------------------------------------------------------
Share Premiu Other Trans Retain Non-con Shareholder
capital m fund funds -lati -ed trollin s' equity
on earn-i g
diffe ngs share-h
-renc olders
e
Equity January 1, 96.91 18.55 84.22 97.67 10.25 307.60
2011
Comprehensive
income
Net profit for the 47.41 2.10 49.50
period
Other
comprehensive
income items
Translation -0.64 -0.64
difference
Derivatives -3.25 -3.25
Available-for-sale 0.04 0.04
financial assets
Comprehensive -3.21 -0.64 47.41 2.10 45.64
income for the
period
Related party
transactions
Dividend -10.78 -10.78
Other changes 0.09 -0.18 0.78 0.70
Related party 0.09 -10.95 0.78 -10.08
transactions
Equity December 96.91 18.55 81.10 -0.64 134.12 13.13 343.17
31, 2011
Equity January 1, 96.91 18.55 81.10 -0.64 134.12 13.13 343.17
2012
Comprehensive
income
Net profit for the 25.82 1.13 26.95
period
Other
comprehensive
income items
Translation 0.94 0.94
difference
Derivatives -3.00 -3.00
Available-for-sale 0.02 0.02
financial assets
Comprehensive -2.98 0.94 25.82 1.13 24.92
income for the
period
Related party
transactions
Dividend -12.68 -12.68
Share issue 32.07 32.07
Change in ownership 0.08 0.08
interests in
subsidiaries 2)
Other changes 0.01 0.15 1.81 1.97
Related party 32.08 -12.45 1.81 21.44
transactions
Equity December 96.91 18.55 110.20 0.30 147.49 16.07 389.53
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 10-12/ 10-12/ 1-12/ 1-12/
Currency unit: EUR million 2012 2011 2012 2011
Net sales
Finland 26.12 22.46 97.43 85.19
Russia 1.30 1.23 5.03 2.93
Estonia 1.23 1.16 4.85 4.67
Unallocated 0.01 0.02 0.02 0.04
Total 28.66 24.87 107.33 92.83
EBITDA
Finland 13.66 12.17 51.18 44.82
Russia 0.19 0.29 1.38 -0.23
Estonia 0.83 0.68 3.15 3.13
Unallocated 0.76 -0.29 0.04 -0.18
Total 15.44 12.85 55.75 47.54
ASSETS
Finland 935.66 840.19
Russia 90.94 62.52
Estonia 89.76 79.04
Eliminations -33.62 -18.87
Total 1082.73 962.88
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, 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 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 10-12/ 10-12/ 1-12/ 1-12/
Currency unit: EUR million 2012 2011 2012 2011
Net sales 28.66 24.87 107.33 92.83
Other operating income 0.51 0.52 1.30 1.12
Other operating expenses -13.91 -12.56 -53.28 -46.49
Depreciation -0.54 -0.48 -2.01 -1.83
Operating profit/loss 14.73 12.35 53.33 45.64
Finance income and expenses, total -2.30 -3.83 -13.03 -12.84
Taxes for direct result items 12.43 8.51 40.31 32.79
Result before taxes -2.56 0.69 -9.24 -5.23
Non-controlling interests 0.16 -0.68 -1.21 -2.10
Direct result for the period 10.04 8.52 29.86 25.47
Non-recurring items
Change in fair value of investment properties 0.17 0.02 0.40 0.07
Operating profit/loss 0.28 0.59 -5.70 26.28
Change in fair value of financial instruments 0.45 0.61 -5.30 26.36
Result before taxes -1.68 1.33 -0.53 0.87
Taxes for indirect result items -1.23 1.94 -5.83 27.22
Non-recurring items -0.15 0.50 1.71 -5.99
Non-controlling interests 0.08 0.08
Indirect result for the period -1.30 2.44 -4.04 21.23
Result for the period to the parent company 8.73 10.96 25.82 46.70
shareholders, total
Earnings per share, diluted 3)
From direct result 0.14 0.13 0.43 0.38
From indirect result -0.02 0.04 -0.06 0.32
From net result for the period 0.12 0.16 0.37 0.70
3) Earnings per share calculated according to EPRA's instructions.
KEY INDICATORS 1-12/ 1-12/
2012 2011
Change in net sales, % 15.6 14.4
Operating profit/loss / net sales, % 44.8 77.5
Interest coverage ratio 4.5 3.7
Equity ratio, % 36.2 35.8
Loan to value, % 59.5 60.0
Group company personnel during the period, average 178 158
Gross expenditure on assets, EUR million 115.8 105.3
Net rental revenue of investment properties, % 4) 7.8 7.8
Financial occupancy rate, % 95.3 95.1
Earnings/share
basic, EUR 0.37 0.70
diluted, EUR 0.37 0.70
Cash flows from operating activities/share, EUR 0.56 0.46
Equity/share, EUR 4.94 4.96
Average issue-adjusted number of shares
Basic 69 913 841 66 586
727
Diluted 70 146 318 66 767
124
Issue-adjusted number of shares at year-end 75 561 227 66 586
727
P/E ratio 10.21 4.55
Dividend/share, EUR 5) 0.20 0.20
Dividend payout ratio, % 54.15 27.15
Effective dividend yield 5.31 5.97
OTHER KEY INDICATORS
Market value of shares, EUR million, Dec 31 284.87 212.34
Share turnover, shares 18 994 144 30 084
022
Share turnover out of average number of shares, % 27.17 47.46
Share prices, EUR
Highest price 4.07 4.42
Lowest price 2.93 2.61
Average price 3.60 3.59
Price Dec 31 3.77 3.35
4) The figure does not include properties 10-12/ 10-12/ 1-12/ 1-12/
commissioned and acquired during the
fiscal year.
5) Proposal for distribution of 2011
dividends
CHANGE IN VALUE OF INVESTMENT
PROPERTIES 2012 2011 2012 2011
Change in fair value, Finland 5.42 0.42 -6.34 15.45
Change in fair value, Russia 0.44 2.99 1.64 4.67
Change in fair value, Estonia -0.46 0.79 0.04 2.45
Change in fair value 5.41 4.20 -4.66 22.57
Changes in acquisition costs of investment -7.31 -7.93 -10.70 -9.21
properties in financial year
Changes in fair value of projects in 2.17 4.31 9.65 12.93
progress
Effect on profit of change in value of 0.28 0.59 -5.70 26.28
investment properties
CONTINGENT LIABILITIES
Currency unit: EUR million 12/31/2012 12/31/2011
Pledges and guarantees on own debt
Mortgages of properties 605.62 472.49
Book value of pledged securities 201.53 208.24
Other guarantee liabilities 53.53 60.87
Leasing liabilities, machinery and equipment 5.25 4.30
Project liabilities 0.18 0.18
Interest rate and currency swaps
Nominal values 190.38 169.96
Fair values -9.02 -3.87
Value added tax (VAT) adjustment liability
on property investments
10-year adjustment
period
Year 2008 2009 2010 2011 2012 Total
Property investment expense (net) 58.1 33.3 38.9 37.7 81.8 249.7
VAT on property investment 12.8 7.3 8.4 8.7 18.8 56.0
Annual share of VAT on investment 1.3 0.7 0.8 0.9 1.9 5.6
VAT deducted 12.7 7.3 8.6 8.6 18.5 55.7
Annual share of the VAT deducted 1.3 0.7 0.9 0.9 1.9 5.6
Number of years remaining in the adjustment 5 6 7 8 9
period
Refundable amount of deduction 12/31/2012 6.4 4.4 6.0 6.9 16.7 40.3
VAT adjustment liability 12/31/2012 40.3
VAT adjustment liability 12/31/2011 27.0
Change 13.3
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