Technopls Ventures Ltd. — Interim / Quarterly Report 2016

Oct 28, 2016

Technopolis Group Interim Report January 1 – September 30, 2016

Technopolis Group Interim Report January 1 – September 30, 2016

TECHNOPOLIS PLC INTERIM REPORT October 28, 2016 at
9:00 a.m.

Technopolis Group Interim Report January 1 – September 30, 2016

Positive Earnings Trend

• Net sales EUR 127.3 (128.9) million, down 1.2% mainly due to 2015 termination
  fees
• EBITDA EUR 70.7 (72.9) million, down 3.0% mainly due to 2015 termination fees
• On a constant currency basis, net sales were up 0.1% and EBITDA was down 1.4%
• Financial occupancy rate 92.7% (94.5%)
• Earnings per share EUR 0.27 (0.21)
• Direct result (EPRA) EUR 39.9 (38.8) million, up 3.0%
• Direct result per share, diluted (EPRA) EUR 0.33 (0.32)
• Net asset value per share (EPRA) EUR 4.12 (3.98)

                                    7-9/  7-9/       1-9/      1-9/  1-12/
  

  Key Indicators 2016 2015 2016 2015 2015
  Net sales, EUR million 43.0 39.8 127.3 128.9 170.6

  ---

  EBITDA, EUR million 25.3 22.7 70.7 72.9 93.0
  Operating profit, EUR million 26.6 24.4 68.5 63.1 88.9
  Net result for the period, EUR million 16.5 11.9 40.5 32.8 50.0
  Earnings/share, EUR 0.11 0.06 0.27 0.21 0.33
  Cash flow from operations/share, EUR 0.43 0.39 0.52
  Equity ratio, % 39.5 38.2 39.3
  Equity/share, EUR 3.75 3.70 3.79

  ---

EPRA-based Key 7-9/ 7-9/ 1-9/ 1-9/ 1-12/
Indicators 2016 2015 2016 2015 2015

---

Direct result, EUR 13.7 11.4 39.9 38.8 55.0
million
Direct result/share, 0.11 0.09 0.33 0.32 0.45
diluted, EUR
Net asset value/share, 4.12 3.98 4.09
EUR
Net rental yield, % 7.4 7.7 7.7
Financial occupancy 92.7* 94.5 94.6*
rate, %

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* 9/2016: 10,000 m² under renovation. 12/2015: 16,700 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 new 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 on July 3, 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.

Future Outlook

Technopolis expects its net sales and EBITDA in 2016 to remain on the same
level (+/- 5%) as in 2015.

The Group’s financial performance depends on the development of the overall
business environment, customers’ 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:

“The main event of the third quarter was our rights issue. The issue was
successfully completed in September and was 66% oversubscribed. The net
proceeds raised through the offering were approximately EUR 124 million. This
strengthens our balance sheet after the investments executed in the summer and
provides firepower for upcoming organic growth projects, as well as new
acquisitions. The equity ratio has already improved to 39.5% and will continue
to improve together with LTV as existing debt is paid down. We expect it to
take until Q1 next year until the full impact of the proceeds is visible in our
solvency indicators.

We got immediately to work with new growth projects, first launching the
expansion of our Helsinki Ruoholahti campus, and shortly thereafter our next
Tallinn campus expansion project, Löötsa 12. The Ruoholahti project got a boost
thanks to falling vacancy in the Ruoholahti district, as well as a sizable
anchor agreement. In Tallinn we were encouraged by the rapid take-up of our
previous Löötsa project and the continuing robust demand for high-efficiency
space and services. We’re also looking at opportunities to continue organic
expansion in Vilnius, as well as the Greater Helsinki area.

The search for new campuses continues. The deal flow is improving as we work
with the pipeline. Our search area covers the entire Nordic-Baltic region and
we are concentrating on campuses that provide the optimal strategic fit, the
best upside potential and a healthy risk-adjusted yield.

In the field, conditions in the third quarter were relatively stable. Despite
the expected drop in occupancy, on a constant currency basis and excluding the
contract termination fees earnings were up 3.5%. We expect occupancy overall to
rise in the fourth quarter. The main drivers behind the company’s rising
earnings trend are the high-occupancy completion of our Tampere CBD campus, as
well as the July acquisition of the Gårda campus in Gothenburg, Sweden.

Services also continue to play an increasingly important role, with
year-on-year service growth now at 10% and the share of services in total
revenue at 12.5%. Our service earnings are gradually improving, with the EBITDA
margin for services up to 7.6% from 4.8% in Jan-Sept 2015. Our goal is to
significantly increase the service margin as the scale of our operations grows.

Improving conditions on the domestic transaction market are also lending
support for the execution of our divestiture strategy. Investor sentiment
regarding Finland appears to be taking a turn for the better. This, in
combination with growing domestic transaction volumes, is driving yield
compression also in secondary markets. This is good news for our domestic
divestiture portfolio, which ultimately will provide additional resources for
the execution of our growth strategy.”

Full version of Technopolis Plc’s Interim Report January 1 –September 30, 2016
attached.

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 21
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 49,000
employees in Finland, Sweden, Norway, Estonia, Russia and Lithuania. The
Technopolis Plc share (TPS1V) is listed on Nasdaq Helsinki.

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