Citycon Oyj — Earnings Release 2017

Feb 8, 2018

Citycon Oyj’s Financial Statements Release for 1 January – 31 December 2017: Good operational results in Sweden and Norway

Citycon Oyj’s Financial Statements Release for 1 January – 31 December 2017: Good operational results in Sweden and Norway

Citycon Oyj   Stock Exchange Release   8 February 2018 at 09:00 hrs
OCTOBER—DECEMBER 2017

• Net rental income decreased slightly to EUR 53.9 million (Q4/2016: 55.9)
  mainly due to divestments which reduced net rental income by EUR 4.4 million.
  (Re)development projects increased the net rental income by EUR 2.3 million,
  while like-for-like net rental income declined by EUR 0.5 million.
• EPRA Earnings decreased by EUR 4.1 million, or 10.8%, to EUR 33.8 million
  (37.9) mainly due to lower net rental income following disposals and higher
  administrative expenses, including non-recurring items. EPRA Earnings per share
  (basic) decreased to EUR 0.038 (0.043).
• IFRS-based earnings per share decreased to EUR 0.03 (0.04) mainly due to
  valuation items and net losses on sale.

JANUARY—DECEMBER 2017

-Net rental income increased to EUR 228.5 million (Q1-Q4/2016: 224.9) mainly due
to (re)development projects coming online, which increased net rental income by
EUR 6.9 million. The acquisitions of the adjacent building to Oasen shopping
centre in Norway and Straedet phase 1 and 2 in Denmark added a total of EUR 4.5
million. In addition, positive like-for-like growth contributed to net rental
income growth by EUR 1.9 million. The non-core property divestments in 2016 and
2017 decreased net rental income by EUR 9.4 million.
-EPRA Earnings increased by EUR 1.2 million, or 0.8%, to EUR 152.3 million
(151.1) due to net rental income growth. EPRA Earnings per share (basic)
increased to EUR 0.171 (0.170).
-IFRS-based earnings per share decreased to EUR 0.10 (0.18) mainly due to
valuation items, such as fair value losses recorded during the period.
-Cash generated from operations improved slightly due to higher net rental
income and positive development in working capital.
-The Board of Directors proposes that the Board be authorised to decide in its
discretion on the distribution of dividend for the financial year 2017, and
assets from the invested unrestricted equity fund. Based on this authorization
the maximum amount of dividend to be distributed shall not exceed EUR 0.01 per
share and the maximum amount of equity repayment distributed from the invested
unrestricted equity fund shall not exceed EUR 0.12 per share. The
dividend/equity repayment would be paid to shareholders in four instalments.

KEY FIGURES

+-------------+----+-------+-------+------+-------+-------+------+
| | |Q4/2017|Q4/2016|% 1) |2017 |2016 |% 1) |
+-------------+----+-------+-------+------+-------+-------+------+
|Net |MEUR|53.9 |55.9 |-3.7% |228.5 |224.9 |1.6% |
|rental income| | | | | | | |
+-------------+----+-------+-------+------+-------+-------+------+
|Direct |MEUR|45.9 |49.9 |-8.1% |200.5 |198.5 |1.0% |
|operating | | | | | | | |
|profit 2) | | | | | | | |
+-------------+----+-------+-------+------+-------+-------+------+
|Earnings |EUR |0.03 |0.04 |-32.0%|0.10 |0.18 |-45.5%|
|per share | | | | | | | |
|(basic) | | | | | | | |
+-------------+----+-------+-------+------+-------+-------+------+
|Fair value |MEUR|4,183.4|4,337.6|-3.6% |4,183.4|4,337.6|-3.6% |
|of investment| | | | | | | |
|properties | | | | | | | |
+-------------+----+-------+-------+------+-------+-------+------+
|Loan to Value|% |46.7 |46.6 |0.3% |46.7 |46.6 |0.3% |
|(LTV) 2) | | | | | | | |
+-------------+----+-------+-------+------+-------+-------+------+
|EPRA based key figures 2) |
+-------------+----+-------+-------+------+-------+-------+------+
|EPRA Earnings|MEUR|33.8 |37.9 |-10.8%|152.3 |151.1 |0.8% |
+-------------+----+-------+-------+------+-------+-------+------+
|EPRA |EUR |0.038 |0.043 |-10.8%|0.171 |0.170 |0.8% |
|Earnings per | | | | | | | |
|share (basic)| | | | | | | |
+-------------+----+-------+-------+------+-------+-------+------+
|EPRA NAV |EUR |2.71 |2.82 |-3.9% |2.71 |2.82 |-3.9% |
|per share | | | | | | | |
+-------------+----+-------+-------+------+-------+-------+------+

1) Change from previous year. Change-% is calculated from exact figures.
2) Citycon presents alternative performance measures according to the European
Securities and Markets Authority (ESMA) new guidelines.
More information is presented in Basis of Preparation and Accounting Policies in
the notes to the accounts.

CEO MARCEL KOKKEEL:

In 2017, Citycon saw good operational performance driven mainly by strong
development in Sweden and Norway, which offset the weaker development in the
Finnish operations. Our diversified Nordic asset portfolio helped in weathering
the headwinds we have seen in Finland. Citycon’s total net rental income,
excluding Kista Galleria, grew by 1.6%, while the like-for-like net rental
income growth was slightly lower at 1.4%. EPRA Earnings per share grew slightly
to EUR 0.171 despite the disposal of 13 non-core assets. Occupancy rates at
Citycon shopping centres remained at a high level.
Looking at Citycon’s operating environment, the most notable change during the
year was the clear improvement in the Finnish economy, where consumer confidence
reached a record-high level and the GDP growth rate was among the highest in the
Euro area. Also the economies in Sweden and Norway continued to develop
strongly. Consumer confidence was impacted by the decline in housing prices in
both countries, but it still remained at a high level.
One of the highlights of 2017 was the successful opening of the final part of
the Iso Omena extension in the greater Helsinki area. The second phase,
including the M.E.E.T restaurant concept and the cinema among others, opened in
April and the metro terminal with the adjacent retail premises were finally
opened in mid-November. All in all, the Iso Omena development project has been a
success with the December 2017 footfall increasing by 49% and retail sales by
40% compared to December 2016. During the year Citycon also acquired the
majority of shopping centre Straedet in the greater Copenhagen area and signed a
letter of intent with Klövern to develop Globen Shopping in Stockholm.
In 2017, Citycon continued to improve the quality of the asset portfolio by
divesting 13 non-core assets for a total of EUR 325 million. Capital recycling
actions will continue going forward and we expect to divest 5-10% of our
property portfolio in terms of value in the next 3 to 5 years. As our strategy
focuses on multi-functional shopping centres in growing urban areas, the
proceeds from the divestments will be used to further develop our core assets
and to strengthen the balance sheet. As a Nordic company, the asset portfolio
should ultimately be a reflection of the weight and the size of the operating
countries.

OUTLOOK

Citycon forecasts the 2018 EPRA earnings per share (basic) to be EUR 0.155
-0.175. Furthermore, the Direct operating profit is expected to change by EUR
-15 to +1 million and EPRA Earnings to change by EUR -14 to +4 million from the
previous year.
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. Premises taken offline for planned or ongoing
(re)development projects reduce net rental income during the year.

AUDIOCAST

Citycon's investor, analyst and press conference call and live audiocast will be
arranged on Thursday 8 February 2018 at 10 am EET. The audiocast can be
participated by calling in and followed live at:
https://citycon.videosync.fi/2017-results
Conference call numbers are:
Participants from Europe +44 203 194 0552
Participants from the US +1 855 716 1597
For more investor information, please visit the company’s website at
www.citycon.com.

Espoo, 7 February 2018
Citycon Oyj
Board of Directors

For further information, please contact:
Eero Sihvonen
Executive VP and CFO
Tel. +358 50 557 9137
eero.sihvonen@citycon.com
Mikko Pohjala
Head of Investor Relations
Tel. +358 40 838 0709
mikko.pohjala@citycon.com

Citycon is a leading owner, manager and developer of urban, grocery-anchored
shopping centres in the Nordic region, managing assets that total almost EUR 5
billion and with market capitalisation of close to EUR 2 billion. Citycon is No.
1 shopping centre owner in Finland and among the market leaders in Norway,
Sweden and Estonia. Citycon has also established a foothold in Denmark.

Citycon has investment-grade credit ratings from Moody's (Baa1) and Standard &
Poor's (BBB). Citycon Oyj’s share is listed in Nasdaq Helsinki.

www.citycon.com

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