- NRI EUR 50.4 million -3.8% compared to Q1/2020: an improvement over the previous quarter
- Total tenant sales at -4.7% y-o-y
- Administrative expenses improved -13% y-o-y due to tight cost control
- Direct operating profit EUR 44.9 million (-2.9%) reflecting NRI development
- Slightly positive valuations supported by positive leasing momentum
- Divestment of 3 non-core assets as a part of planned capital recycling and portfolio transformation
- LTV lowered to 46.5% as a result of the divestment
- Successful issue of EUR 350 million green bond as a part of planned refinancing

JANUARY - MARCH 2021

- Net rental income in Q1 was EUR 50.4 million (Q1/2020: 52.4). Net rental income continued to be impacted by COVID-19 pandemic and its impact on footfall and vacancy, as well as discounts granted in Q2/2020 to tenants and specialty retail and parking income. The impact of the pandemic was partially offset by an acquisition in Norway in Q1/2020, which increased net rental income by EUR 0.8 million. Stronger currencies further increased net rental income by EUR 0.9 million.
- EPRA Earnings were EUR 31.6 million (34.8) as result of net rental income, increased direct financial expenses and lower direct share of profit of joint ventures and associated companies. However, direct administrative expenses decreased by 13% from comparison period. EPRA Earnings per share (basic) was EUR 0.178 (0.195), impact from stronger currencies being EUR 0.004 per share.
- Adjusted EPRA earnings were EUR 27.6 million (30.8).
- IFRS-based earnings per share was positive EUR 0.12 (0.06) mainly as a result of higher fair value gains.

KEY FIGURES

Q1/2021 Q1/2020 % FX 2020
Adjusted % 1)
Net rental income MEUR 50.4 52.4 -3.8 % -5.4 % 205.4
Direct Operating MEUR 44.9 46.2 -2.9 % -4.6 % 180.4
profit 2)
IFRS Earnings per EUR 0.12 0.06 - - -0.25
share (basic) 3)
Fair value of MEUR 4,238.4 4,081.5 3.8 % - 4,152.2
investment
properties
Loan to Value % 46.5 45.7 1.8 % - 46.9
(LTV) 2) 4)
EPRA based key
figures 2)
EPRA Earnings MEUR 31.6 34.8 -9.1 % -11.7 % 136.6
Adjusted EPRA MEUR 27.6 30.8 -10.3 % -13.1 % 120.3
Earnings 3)
EPRA Earnings per EUR 0.178 0.195 -9.1 % -11.7 % 0.767
share (basic)
Adjusted EPRA EUR 0.155 0.173 -10.3 % -13.1 % 0.676
Earnings
per share (basic)
3)
EPRA NRV per EUR 11.58 11.53 0.4 % - 11.48
share

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 adjusted key figure includes hybrid bond coupons and amortized fees.
4) The Q1/2021 LTV calculation is adjusted for a EUR 29 million deferred payment in other receivables related to asset disposals.

CEO F. SCOTT BALL:

Q1/2021 was in line with our expectations and tracks our full year guidance. COVID-19 continued to challenge our business through government restrictions in some of our operating countries. Yet, our results remained on a solid level and reflect the resilience of our strategy and stability of our markets. Importantly, results improved from the prior quarter Q4/2020. 

Tenant sales decline remained modest at -4.7%. The stability of tenant sales also reflects the strength of our strategy which is based on having a large share of necessity tenants and locations in densely populated major markets in the portfolio. Our strategy and the attractiveness of our locations for our tenants to run profitable business translated into strong leasing activity and we signed 64 thousand square meters of new leases compared to 53 thousand square meters in Q1 2020. Importantly, the average rent of both signed leases and the whole portfolio increased as a result of active leasing strategy and a leading indicator for future results.  

Net rental income slightly declined (-3.8%) compared to Q1/2020 but remained on a solid level being 50.4 million for the quarter. While NRI is slightly lower compared to pre-pandemic Q1/2020, it is informative that Q1 NRI increased from the previous quarter. Direct operating profit 44.9 MEUR also exceeded previous quarter but was, however, -2.9% compared to last year. EPRA earnings per share was EUR 0.178 compared to EUR 0.195 reflecting the operational performance in the COVID-19 environment. Continued financial support from each Nordic country has helped insulate our financial results.

The strength of our portfolio was highlighted by the divestment of three lower-tier, non-core assets in the Stockholm area in line with our capital recycling strategy. Also, the outlook for commercial real estate transactions in the Nordics has turned positive. This development is a clear indication of the demand for high-quality Nordic real estate assets and supports the value of the portfolio. Citycon continues its programmed capital recycling and is looking into divestment opportunities across the Nordics. The market sentiment has improved particularly in the Norwegian transaction market but we have received several inquiries in other regions as well.

Citycon continued its planned refinancing and issued a green bond of 350 MEUR in Q1 at highly attractive pricing. The demand for the bond was extremely strong with an orderbook close to five times over-subscribed. Citycon's bond spreads have returned to pre-covid levels, which allowed Citycon to issue the bond with a coupon of 1.625%, which is the second lowest in the company's history. The new issue premium was also one of the lowest for any corporate Eurobond in 2021. Citycon also continued to make progress with its portfolio transformation strategy at numerous locations and announced a new development project in Liljeholmen, which is a growing area in the heart of Stockholm with a connected train station. The project, in co-operation with the City of Stockholm, is another showcase of our strategy combining transit-oriented necessity driven retail with modern residential and office premises. In suburban Helsinki, the construction of Lippulaiva and 8 adjacent residential buildings progressed as planned with the expected opening in April 2022. 

Overall, Q1 was a solid quarter with several significant events amid signs of improving fundamentals. The strength of Citycon's strategy was validated not only by stable financial and operational results but also successful capital recycling and bond transactions that give important insight on the outlook of our business. We remain committed to our diversification through densification strategy and continue to progress our portfolio transformation. The outlook for 2021 remains unchanged and will be partially dependent on the roll-out of the vaccine, after which we anticipate a robust reboot in consumer spending as evidenced in the markets where the vaccination roll-out is more progressed.

OUTLOOK (unchanged)
Citycon forecasts the 2021 direct operating profit to be in range EUR 170-188 million, EPRA EPS EUR 0.651-0.751 and adjusted EPRA EPS EUR 0.558-0.658.

Direct operating profit MEUR 170-188
EPRA Earnings per share (basic) EUR 0.651-0.751
Adjusted EPRA Earnings per share (basic) EUR 0.558-0.658

The outlook assumes that there are no major changes in macroeconomic factors and that there will not be another wave of COVID-19 with restrictions resulting in significant store closures. These estimates are based on the existing property portfolio and announced disposals as well as on the prevailing level of inflation, the EUR-SEK and EUR-NOK exchange rates, and current interest rates.
EVENTS AFTER THE REPORTING PERIOD
No material events after the reporting period.
AUDIOCAST
Citycon's investor, analyst and press conference call and live audiocasting will arranged on Thursday 6 May 2021 approximately at 10 am EEST. The audiocast can be participated by calling in and followed live on the following website: https://citycon.videosync.fi/2021-q1-results (https://eur03.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcitycon.videosync.fi%2F2021-q1-results&data=04%7C01%7C%7Cd3ba5daaf90f4eb95b3c08d90a191c0c%7Cb8ce972b3da445f6994995d1668226c6%7C0%7C0%7C637551925228268549%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=aI5o3ReMsLtc1%2FcQptTHNmK9i4BfdAs3un%2FWeo0nn0A%3D&reserved=0)

Conference call numbers are:
Participants from Europe +44 333 300 08 04
Participants from the US +1 631 913 14 22
PIN: 77175978#

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

For more investor information, please visit the company's website at www.citycon.com

Helsinki, 6 May 2021

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
Laura Jauhiainen
Vice President, Strategy & Investor Relations
Tel. +358 40 823 9497
laura.jauhiainen@citycon.com

Citycon is a leading owner, manager and developer of mixed-use centres for urban living including retail, office space and housing. We are committed to sustainable property management in the Nordic region with assets that total approximately EUR 4.4 billion. Our centres are located in urban hubs with a direct connection to public transport. Placed in the heart of communities, our centres are anchored by groceries, healthcare and services to cater for the everyday needs of customers.

Citycon has investment-grade credit ratings from Moody's (Baa3), Fitch (BBB-) and Standard & Poor's (BBB-). Citycon Oyj's share is listed in Nasdaq Helsinki.

For more information about Citycon Oyj, please visit www.citycon.com.