Citycon Oyj

Everybody, thank you for coming. And we will shortly start to present our results for the 2025. We open the camera just to show you that we are not an AI management. He is the CFO. My name is Eshel and I'm the CEO. And for now, we will go to the presentation. Thank you. So we'll start with the annual highlights. We can see that the like-for-like NOI grows by 5.4%, which is very good results. The retail economic occupancy is 95.5. The retail average rent grow by 3.3% per square meter, and we come to 27.7 euro per square meter. The like-for-like footfall grow by 2%. The sales grow by 1.7% and we add €51.1 million to our fair value. The NRI margin is 93.7%. The quarterly results for Q4 is like-for-like growth 3.8%. The retail economic occupancy is 95.5%. 3.3 retail average rent growth per square meter. And again, we come to the price of 27.7 euro per square meter. Football grow by 1.1%. The like-for-like sales grow by 2.1%. We gain in the fourth quarter 8.3 million to the fair value. And the NRI margin is 92.9. The key achievement in 2025, we actually deal with more than 500, I think 522 contracts, which reflect 142,000 square meters. We have significantly reduced our operational and administrative costs. During 2025, we had 51 million to our fair value. and we continue to divest non-core assets and demonstrate the sales of Lipulavia residential by the fair value book 61.5 million. We actually repayment of 830 million euro during the year and we reduce our LTV by 240 basis and we are now in 44.9% LTV. We can see here how the NOI actually grow by the year, by each country or what we call business unit. Norway 3.2, Sweden 3.7, Finland 7.7 and the average is 5.4 and on the right bar you can see how the Price per square meter grow during the quarters and as I mentioned before we stabilize in 27.7 Here is some examples of marketing we are acting in marketing very I would say aggressive We actually, I can say, investing by the book almost 5% from our NOI, which is a huge amount of money. We are doing a lot of events to drive footfall to our assets. And we are doing it most of the time, I can say, successfully. A lot of events that drive footfall, and that's what we have to do as a landlord. And we will keep doing that, of course, next year. Our portfolio is very healthy. You can see our top tenant on the left side, which actually 50% of them are grocery or hypermarket. And if you look to the right, the highlight is that 83% of our tenants are not fashion. which is the most sensitive, let's say, sector among the retailers. So this is a very, very healthy portfolio. Go ahead. Capital recycling. In 25, we divested with Kulaiba, as I mentioned before. We sold it in the book value, in the AFRS book value, 61.5. And in 2026, we put sales on hold of 510 million, while in the next, let's say, 24 months, we intend or we target to sell between 500 million to 1 billion. From here, I will give the floor to Rilig to run through the financial overview.

Hello, everyone. So I will start with the NRI. NRI has landed a 209.2 million for the year versus 214.7. That's a minus 3.1%. And this is mainly to the divestments. which we completed in 2024. The upper earnings landed at 79 million euros. We're going to touch on the next slide the main drivers for that. We have finished with 0.43 earning per share, which is in line with our guidance, which was 0.41 to 0.46. And and looking at the next slide, you can see the development of the upper earnings bridge. We lost and arrive from divestments in the year 18.4M euros. But on the other hand, we had a very strong. Like, for like, growth of 11.8M. And also, in addition, we had increased costs, financial costs. aggregate of 6.4 million euros, and then we landed at 79 million euros for the year. The quarter, we have the same pattern, slightly better bottom line, 19.1 million euros versus 20.2. With respect to the fair value change, in the last quarter, we gained 8.3 million euros fair value gain. The whole year, 51.1 million euros. That's 1.4% of our old portfolio, which is something that we are happy with. You can see that we had a cap rate pressure coming from Finland. But on the other hand, we had, again, this is coming from the solid leasing activity. So the overall impact was positive 51.1. As for the debt management, we've been very active in the debt front. We've repaid more than 830 million euros of debt maturities and doing tendering. And we also issued a 2031 bond, 4,450 million euros, extending our duration, average duration and overall de-risking the balance sheet. LTV dropped 2.4% lending at 44.9%. And we're also post 2025 on January, we have successfully signed 270 million euros of secured financing with an additional 250 million upsize accordion. And that is a three year plus one plus one. And overall, we have very productive discussions with various lenders, international and local, and we get a lot of interest and attractive term sheets that reflects our quality of assets. The result of all the financing and refinancing that we've done in 2025, you can look at our schedule. Death maturities, and you can see that it's well staggered. We have bond 2026 that is coming due September 123Million euros. And 2027 bond 129Million euros. And we have, of course, monitoring and have adequate liquidity for the year end. And as mentioned in the financial review, in the financing question, we gave, provided more details around the secured RCF. to have full transparency with all the customary terms, including ownership covenant of 60%, which is very, very standard from this kind of instrument. And I think on the key metrics, 2% down, like as mentioned before, loan to value 44.9%, net EBITDA traded lower at multiple nine, very stable ICR and gradually increased average interest rates, which we will touch later in the Q&A.

From now on, I will highlight few point that I believe that I have to clarify. So the first issue is the divestment. As I said, in the next 24 months, we are intent to sell between 500 to 1 billion euro non-core assets. And I want to highlight, it's not a call to the predators. So we don't have to sell our cash. Our financial situation is very stable. It's not that I need the money in order to pay my debt or whatever. so we will continue to sell in the book value if there are there are buyers they are welcome if not we can continue to work as usual so this is regarding the reimbursement the asset value there are two actually two lines that we are working in order to increase our value The first one is to reduce our OPEX. We tender almost all the services that we are getting and we can see already in 26 that we will reduce our OPEX in some sector even dramatically. And the second leverage is the OCR. Today the OCR of the company is low compared to the market. and they still have, let's say, 2-3% to increase the rent in all around the portfolio. Strengthen the balance sheet through the repayment of existing unsecured debt in compliance with the covenant. Chirik mentioned it. We want to always focus on our balance sheet and we take care about it and I feel very comfortable with it. Regarding dividends, we will check case by case and basically our intention is when you will have free money and we pay our debt, we will introduce another option of distribute dividend. And last, I want to thank all the CityConners employees wherever they are in the Nordic. They worked very hard in 2025 and continue to work hard at the moment. So really thanks for the good results and for the warm welcome that we get when we came here. Thanks again and now we are open for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Neeraj Kumar from Barclays. Please go ahead.

Good morning everyone. A couple of questions on my side. Can you please update us on the status of the $215 million secured financing you're in the process of signing and also if you could help us with the use of proceeds of the $270 million loan you signed earlier this year?

Well, 270 million euros, as we announced, is already signed and we are going to draw the money in the next days. It's very much how to use the funds in... productive manner. And I think from, you know, as I stated generally, we have a lot, we're seeing a lot of appetite from the secured market. We have been approached by international and local lenders, and we are introduced to a relatively attractive terms. And I think, again, this is echoing the quality of our assets. We can see that this is a good path for us to continue to leverage ourselves with a decreased kind of coupon versus the rate environment outside.

Got it. And can you help us understand a bit more about your liquidity profile? I understand that RCF has a change of control clause, so you may not have access to it in the near future. Are there any conditions attached to that 250 million accordion option you have?

Yeah, I think I've mentioned it earlier. For this kind of instrument, usually we have customary terms and conditions and covenants, including ownership covenant. This is something that we also stated in the financial statements. We have 60% ownership covenant in there. And on the other hand, we have 270 million euros of secured financing loan with an optionality to have to upsize it by 250 million euros So I think on the liquidity front, we have adequate liquidity and we of course looking forward to do more secured financing in the future.

Got it. And how has been your discussions with S&P on the back of all these things? Because I remember they currently also assign good recovery on your unsecured bonds because of relatively low secured debt. So do you think that may change in the future?

Yeah, look, I think S&P, it's more of a methodology. S&P has the methodology. Once GCD crossed 50%, the downgrade had happened just because they're looking at us on a group level. But if you look at the reporting, on a standard level, they acknowledge the fact that we're improving. And I think to actual points, we are going to concentrate on generating more income from our current portfolio. So this is what I can say about the S&P report.

Got it. Last question on my side. Can you help us understand a bit more about the dividend policy? Thanks for providing those thoughts earlier. You mentioned you'll look into it once you kind of repay your debt. How do you see hybrid instruments in light of all those things? Do you see it as a debt and do you want to address them as well before upstreaming any dividends or how do you think about that?

When the hybrid will come, we will consider it, we will do what is the best for the company. And as I said, regarding the dividend, whenever we will have money, instead of sitting on our bank account, we'll consider distribute dividend. Thank you very much. You're welcome.

The next question comes from Othman El Araki from Fidelity International. Please go ahead.

Yes, hi, guys. Thank you for taking my question. Actually, Neeraj already kind of covered a lot of them. But actually, I have one more on how you look at your capital structure going forward. Do you kind of see yourself as using secure debt and that's it, being a kind of secured borrower? Or do you still see value out there for some kind of unsecured bond or other instruments? How do you look at your funding?

Well, I think, look, we are a new management. We're very pragmatic people. I think right now the unsecured market is limited to none for us. And I think the secured financing for us is a good way, a good path to experience lower coupons and a very stable kind of unlocking of liquidity. And I think we have a lot of headroom. So I think this is the path that we're gonna take for the time being.

Okay, okay, thank you. And just maybe a follow up on the RCS. So you're not looking to waive the covenant with your bank?

First of all, it's not me to waive, right? This is the lenders. If you can talk to the lenders, we'll be happy. But second, I think the instrument itself, the kind of instrument is less... you know, is something that we can consider in the future. But look, we're trying to be very transparent with the terms and condition. And this is what we're trying to say. There's a 60% ownership covenant. GCD right now sits on somewhere around 59.5% before the MTO results. So we're taking the measures to monitor the risk, i.e. entering to secure financing upfront.

Okay, and I appreciate the transparency on that. Thank you very much. Thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

So thank you very much, all of you. And we will see you soon in the first quarter. Well done. Thank you. Bye-bye.