Release, October 21, 2008
Technopolis's strong growth continues
The company is in a strong position despite the financial crisis
Technopolis Plc's operations developed favorably in the third quarter of 2008,
in spite of the global financial crisis. According to President and CEO Keith
Silverang, the crisis has not had a significant impact on the company. Net
sales and EBITDA improved compared with the corresponding period in 2007, and
the financial occupancy ratio remained high at 96.4 percent. Keith Silverang
lists the first technology center to be opened in the center of Helsinki in
Ruoholahti and the completion of two expansion projects in Kontinkangas, Oulu
as the major events of the review period.
During the first three quarters of 2008, Technopolis's net sales reached EUR 53
million. This is an increase of 28.9 percent on the corresponding figure for
the previous year. EBITDA rose to EUR 28.1 million. This is an increase of 30.2
The company's operating profit for the review period without the change in fair
value of the properties was EUR 27.2 million, compared with EUR 21.1 million
for the corresponding period in 2007. When the change in the fair value of
investment properties is taken into account, operating profit falls to EUR 25.9
million (EUR 30.4 million) compared with EUR 30.4 million in 2007.
Technopolis's investment properties are measured at fair value every four
years, based on the International Financial Reporting Standards. The decrease
in the value of investment properties is a result of an increase in the return
requirements of the market. This does not affect the company's net sales,
EBITDA or cash flow.
Cautious measurement principles
President and CEO Silverang emphasizes the fact that the measurement principles
used by Technopolis regarding its balance sheet assets and investment
properties in particular have always been conservative and will continue to be
so in the future. “This is a clear advantage, particularly in this market
situation,” he points out. Silverang stresses that Technopolis's strategy is to
acquire rental and service income with the long-term holding of properties, and
that properties are part of the service concept.
The net change in fair values had a negative effect on profit as a result of an
increase in the return requirements of the market. The negative effect on
profit has noticeably lowered the company's capital growth from procurement and
completed properties. The market rent has also been increased for some of the
properties in order to better correspond to current levels.
Focus on cost-efficiency
Silverang emphasizes that Technopolis is on a solid basis: “However, we have
launched measures to secure the company's profitability even in difficult
economic circumstances.” In the future the company will attempt to further
improve its ability to withstand the effects of a more prolonged weak economy,
while at the same time preserving the high quality of the services that it
provides to its customers.
“We will do this by speeding up the standardization and integration of our
operations, by focussing our core operations and by using new technologies to
lower our costs. Silverang points out Technopolis's ability to also help its
customers to improve cost-efficiency. “We provide more and more services aimed
at cost-efficiency, such as our new Telepresence video conference solutions
which help to significantly reduce the need to travel. This technology will
help us save hundreds of thousands of euros next year and it works brilliantly.
I am sure that our clients will also love this system and the significant
savings it brings, just as soon as they have the chance the test it," explains
Silverang. The financing crisis has also increased demand for the growth
financing advisory services that Technopolis offers its customers. “This is a
creative way of helping our customers, while preventing credit losses at the
same time,” explains Silverang.
Technopolis has also decided to concentrate increasingly on its core business.
For this reason, Technopolis's consultation services and regional development
program operations were transferred to Technopolis Ventures Oy and Oulu
Innovation Ltd. “Over the long term, Technopolis will only offer its technology
center know-how as a part of its global growth program and increasingly focus
the provision of its development services to its key customers,” stresses
Outlook for the future
Technopolis's management expects that demand for the company's high tech
operating environments will be satisfactory in 2008 and that the occupancy
ratio of its facilities and demand for their services will remain good, in
spite of the weakening international financing situation. Technopolis estimates
that its net sales and EBITDA for 2008 excluding sales profits will grow by
18-22 % on the previous year. The estimate has been increased since the
previous review period.
As part of its strategy for growth, Technopolis aims to operate in top high
technology cities in Finland, as well as in Russia and 2-3 other countries by
2012. The Group aims to increase its net sales by an average of 15 % annually.
It seeks to grow organically as well as through acquisitions.
For further information, please contact
President and CEO
In terms of the number of customer companies, Technopolis Plc is one of
Europe's largest technology centers. Technopolis is the largest company in
Finland specializing in business environments for technology companies. The
Technopolis service concept combines modern office space and facilities with
business and development services for high-tech companies and their partners.
Technopolis has built or is building technology parks in Helsinki, Espoo,
Vantaa, Jyväskylä, Kuopio, Lappeenranta, Oulu and Tampere in Finland, as well
as St. Petersburg, Russia. There are approximately 16,000 people and 1,174
companies and organizations operating in the company's parks. Further
information at www.technopolis.fi