Citycon Oyj: Citycon publishes the Financial Statements Release for 2024, changes in the Corporate Management Committee and an intention to launch a bond tender offer

Citycon announces the following:

• Financial Statements Release for 2024 published
• Changes in Citycon's Corporate Management Committee: New CEO Oleg Zaslavsky to start on 1 March 2025 and Chief Development Officer Erik Lennhammar to leave Citycon
• Citycon considers launch of a tender offer for the outstanding notes of Citycon Treasury B.V. due 2026

Year 2024: Strong operational performance, coupled with important measures to restructure operations, reduce expenses, and improve the balance sheet

OPERATIONAL PERFORMANCE

Q4/2024

• In comparable FX, total net rental income in Q4 increased 7.8 % compared to the previous year.
  • Total net rental income in Q4 increased 7.4 %.
• Like-for-like footfall increased 2.7%.
• Like-for-like tenant sales in Q4 increased 2.3%.
   

Q1-Q4/2024

• In comparable FX, total net rental income increased 10.3 % compared to the previous year.
  • Total net rental income increased by 9.7% compared to the previous year
• Like-for-like footfall increased 1.1%.
• Like-for-like tenant sales increased 2.5% compared to previous year.
• Q1-Q4/2024, total average rent per sq.m. increased by EUR 1.1 to EUR 25.0 per sq.m (comparable FX) through the combination of indexation and positive leasing spread of 0.8 %.

STRENGTHENING THE BALANCE SHEET REMAINS A KEY PRIORITY

Q1/2024

• Citycon continued to improve its balance sheet by EUR 48.2 million share issue which was 4-times oversubscribed.
• Citycon placed a EUR 300 million green bond with an orderbook approximately seven times oversubscribed.
• Citycon executed approx. EUR 213 million tender of its bond maturing in October 2024.

Q2/2024

• Citycon successfully executed a EUR 266 million exchange for its 2024 hybrid for a new hybrid and cash amount.
• Citycon executed a make-whole for the remaining amount (EUR 97 million) of its bond maturing in October 2024.
• Citycon signed and closed the transaction to sell Kongssenteret in Kongsvinger, Norway.
• Citycon improved its credit maturity profile by extending its EUR 400 million revolving credit facility and EUR 250 million term loan by one year until 2027 and SEK 2,060 million term loan until 2029.

Q3/2024

• Citycon signed and closed the transaction to sell Trekanten in Oslo, Norway for a gross price of approx. EUR 112 million.

Q4/2024

• Citycon signed and closed the transaction to divest an upcoming residential property in Barkarbystaden, Stockholm, Sweden.
• Citycon signed and closed the transaction to sell Kristiine keskus in Tallinn, Estonia for a gross price of approx. EUR 129 million.
• Citycon signed and closed the transaction to sell Stopp Tune in Sarpsborg, Norway for a gross price of approx. EUR 20 million.
• Citycon reached EUR 354 million of total divestments for year 2024. Funds from divestments will be used to repay debt.
• Citycon placed a 5.25-year EUR 350 million green bond with an orderbook approximately ten times oversubscribed with funds being used to repay debt.
• Citycon executed approx. EUR 193 million tender of its short-term NOK bonds maturing in September 2025.

INTERIM CEO, F. SCOTT BALL:

Citycon enjoyed strong growth in its operational business in 2024 posting EUR 184 million in direct operating profit. On the back of this strong performance, total direct operating profit grew by +12.0% for Q1-Q4/2024, adjusted EPRA Earnings by +12.1% and total net rental income by +10.3% (all measured with comparable FX) compared to the same period in 2023. Excluding e.g. divested assets and acquisitions like-for-like net rental income grew +4.6% compared to year 2023 (in comparable FX).

Operational highlights
The retail occupancy rate increased +20 bps over the prior quarter to 95.3% and average rents increased 4.6% to 25.0 EUR/sq.m. The company signed over 175,000 sq.m. of leases during 2024, with new tenant openings including a 7,300 sq.m. Prisma hypermarket in Myyrmanni, a 3,200 sq.m. Selver grocery store in Rocca al Mare, an over 1,800 sq.m. gym at Rocca al Mare and the first Nike concept store in Helsinki suburban area in Iso Omena. In December, Citycon announced that it has signed a lease agreement with Terveystalo for an over 4,000 sq.m. medical centre-hospital in Trio. The strong leasing results reflect the quality of our grocery/municipality anchored urban hubs and resulted in a rent collection rate of 99%.

In 2024, Citycon completed important measures to restructure its operations, reduce expenses, and improve its balance sheet. Actions to reduce costs included the outsourcing of accounting, and decentralization of day-to-day decision making to the country level. These actions completed in 2024 provide for a reduction in G&A overhead to approximately EUR 23 million for 2025 onwards. In addition, the company significantly reduced capital expenditures for 2024 and planned further reductions in capital expenditures for 2025 to approximately EUR 21 million.

Financial highlights
Additional measures were taken in 2024 to strengthen the balance sheet, including asset disposals of EUR 354 million with proceeds used to repay debt. Total divestments as of year-end 2024 reached EUR 475 million since the publication of our divestment target resulting in a 50% completion of our EUR 950 million target by 2026. We anticipate another approximately EUR 250 million divestments through 2025 and will likely hit our full divestment target in 2026.

The company also made the decision to suspend dividend payments, and repay short-term debt to push out the average maturity schedule. In addition, Citycon issued two new bonds during the year with outsized demand from the market as the bonds were seven and ten times oversubscribed, and further improved the debt maturity profile. These steps led S&P to reaffirm our investment grade rating on November 19. The expansion in yields impacted the valuation of the portfolio during 2024, which was partially offset by realized rent growth occurring in our assets resulting in an increase in the market rents used in the valuation models within all of our main markets. For the year, the book value of our assets decreased by EUR -74.6 million. As interest rates continue to decline, spreads should tighten which should positively impact valuations for 2025.

Citycon's outlook for 2025
As we begin 2025, the new operating model is up and functioning, with country teams that now have full local P&L accountability as well as separate Board oversight for each country. While the company's operational results are among some of the best within the peer group, Citycon still has room to further accelerate rent growth. The company's occupancy cost ratio is one of the lowest in the industry at 9.4% and our tenants continue to experience sales growth (like-for-like +2.5% for 2024), which provides Citycon with ample headroom for compounding rent growth. Taken together, these factors give us confidence that 2025 results will continue to build on the strong performance in 2024 and our guidance reflects the ongoing belief in our unique necessity-based urban hubs. As a result, the outlook for 2025 EPRA EPS is in the range of EUR 0.41-0.53 and EPRA EPS excluding hybrid interests EUR 0.60-0.72.

CEO transition

Lastly, I want to welcome Mr. Oleg Zaslavsky to Citycon as the new CEO starting on the first of March. As a professional with 20 years of experience in the real estate sector, I am confident that he will bring valuable expertise to Citycon and lead the company towards even greater financial and operational results. I along with the rest of the Board of Directors will be supporting Mr. Zaslavsky during the transition period and moving forward.

F. Scott Ball
Vice Chairman and Interim Chief Executive Officer

KEY FIGURES

1) Change from previous year (comparable exchange rates). Change-% is calculated from exact figures.
2) Citycon presents alternative performance measures according to the European Securities and Markets Authority (ESMA) guidelines. More information is presented in Basis of Preparation and Accounting Policies in the notes to the accounts.
3) The key figure includes hybrid bond coupons, amortized fees and gains/losses and expenses on hybrid bond repayments.
4) Starting from the beginning of 2024, Citycon excludes reorganisation and one-time costs (Q1-Q4/2024: EUR 9.6 million) from Adjusted EPRA Earnings. Due to this, Adjusted EPRA Earnings is not fully comparable with the previous year. The adjusted key figure includes hybrid bond coupons and amortized fees.
5) The effect of currency rates to EPRA NRV/share was EUR -0.16.

OUTLOOK FOR 2025

The outlook assumes that there are no major changes in macroeconomic factors and no major disruptions from the war in Ukraine. These estimates are based on the existing property portfolio as well as on the prevailing level of inflation, the EUR-SEK and EUR-NOK exchange rates, and current interest rates.

EPRA Earnings per share (basic) and EPRA Earnings per share excluding hybrid interests (basic) for 2025 are based on updated EPRA Best Practices Recommendations (BPR) Guidelines published on the 1^st of October 2024 and are not fully comparable with 2024 EPRA EPS key figures.

Citycon updates its Disclosure Policy

The Board of Directors of Citycon Oyj has today approved the updated Disclosure Policy for Citycon as the method of issuing outlooks changes. The updated Disclosure Policy will enter into force immediately and will be available at Citycon's website at www.citycon.com.

AUDIOCAST

Citycon's investor, analyst and press conference call and live audiocast will be organized on Thursday, 27 February 2025 at 9:00 a.m. EET. The audiocast can be participated by calling in and followed live on the following website:  https://citycon.videosync.fi/q4-2024

Questions for the management can be presented by phone. To ask questions, join the teleconference by registering on the following link: https://player.videosync.fi/citycon/q4-2024/dial-in

After the registration you will be provided with phone numbers and a conference ID to access the conference. To ask a question, press *5 on your telephone keypad to enter the queue.

The audiocast will be recorded and it will be available afterwards on Citycon's website.

New CEO Oleg Zaslavsky to start on 1 March 2025 and Chief Development Officer Erik Lennhammar to leave Citycon

As announced on 15 November 2024 Citycon has appointed Oleg Zaslavsky as the new CEO. The starting day for Mr. Zaslavsky has been confirmed and he will join Citycon and assume full responsibility as CEO on 1 March 2025. He will be based in Espoo, Finland. F. Scott Ball who has served as the interim CEO from October 2024 and CEO between years 2019-2024 will continue as the Vice Chairman of the Board of Directors.

Erik Lennhammar, Chief Development Officer and member of the Corporate Management Committee, will depart Citycon to pursue new opportunities. Mr. Lennhammar will step down from the Corporate Management Committee but works for the company until 31 May 2025. He has been part of Citycon's Corporate Management Committee between years 2019-2025.

Chaim Katzman, Chairman of the Board of Directors, Citycon, says: "I would like to welcome Oleg Zaslavsky to Citycon. Oleg brings a combined broad real estate and financial expertise and a fresh perspective to the company. I am confident that together with the talented employees of Citycon, Oleg will be able to create value and take the company to the next level for the benefit of all stakeholders. On behalf of the Board of Directors I would also like to thank Scott for his leadership and smooth transition as interim CEO. At the same time, I would like to thank Erik for his valuable contribution to Citycon for six years. His role was instrumental in the Lippulaiva development project and the recent successful divestments."

Citycon considers launch of a tender offer for the outstanding notes of Citycon Treasury B.V. due 2026

Citycon Oyj ("Citycon") is considering the launch of a tender offer for the outstanding EUR 350,000,000 1.250 per cent Guaranteed Notes due 2026 of Citycon Treasury B.V. guaranteed by Citycon (ISIN: XS1485608118) issued on 8 September 2016 (the "Securities"). Securities are intended to be purchased up to EUR 100 million in aggregate principal amount.

Citycon expects to launch the tender offer on or about Thursday, 27 February 2025, subject to market conditions. If Citycon decides to proceed with the tender offer, the pricing and terms of the offer will be published in connection with the launch.

CITYCON OYJ

For further information, please contact:
Eero Sihvonen
Chief Financial Officer
Telephone +358 50 557 9137
eero.sihvonen@citycon.com

Citycon is a leading owner, manager and developer of mixed-use real estate featuring modern, necessity-based retail with residential, office and municipal service spaces that enhance the communities in which they operate. Citycon is committed to sustainable property management in the Nordic region with assets that total approximately EUR 3.7 billion. Our centres are located in urban hubs in the heart of vibrant communities with direct connections to public transport and anchored by grocery, healthcare and other services that cater to the everyday needs of customers.

Citycon has investment-grade credit rating from Standard & Poor's (BBB-). Citycon's shares are listed on Nasdaq Helsinki Ltd.

www.citycon.com