Citycon Oyj's Financial Results for 1 January - 31 December 2011 CITYCON OYJ | CITYCON OYJ'S FINANCIAL RESULTS 1 Citycon in Brief Citycon focuses on the shopping centre business in the Nordic and Baltic countries. The company’s shopping centres are actively managed and developed by the company’s locally-based professionals. In the Nordic countries, Citycon is a pioneer in adhering to sustainable development principles in its shopping centre business. Citycon strives to enhance the commercial appeal of its proper- ties, taking account of the specific characteristics of each property’s catchment area, such as purchasing power, competition and consumer demand. The ultimate goal is to create rental premises generating added value for tenants and customers. At the end of 2011, Citycon owned 36 shopping centres and 43 other retail properties. In addition, the company is managing and redeveloping two shopping centres without owning them. Of the shopping centres owned by the company, 23 are located in Finland, 9 in Sweden and 4 in the Baltic countries. Contents Summary of the Fourth Quarter of 2011 Compared with the Previous Quarter Summary of the Year 2011 Compared with the Year 2010 Key Figures CEO’s Comment Business Environment Short-term Risks and Uncertainties Board Proposal for Dividend Distribution and Distribution of Assets from the Invested Unrestricted Equity Fund Outlook Property Portfolio Financial Performance Statement of Financial Position and Financing Cash Flow Statement Financial Performance of Business Units Finland Sweden Baltic Countries Environmental Responsibility Governance Events after the Financial Year EPRA Key Performance Measures Condensed Consolidated Financial Statements 1 January–31 December 2011, IFRS Financial Results for 1 January - 31 December 2011 Notes to Condensed Consolidated Financial Statements CITYCON OYJ | FINANCIAL RESULTS FOR 1 JANUARY - 31 DECEMBER 2011 2 Citycon Oyj's Financial Results for 1 January–31 December 2011 Summary of the Fourth Quarter of 2011 Compared with the Previous Quarter - Turnover increased to EUR 56.0 million (Q3/2011: EUR 55.0 million). - Net rental income decreased by EUR 1.0 million, or 2.6 per cent, to EUR 37.3 million (EUR 38.3 million) mainly due to higher prop- erty operating expenses, reflecting common seasonal variations. - The fair value change of investment properties was EUR -17.0 million (EUR -14.4 million): EUR 1.2 million for shopping centres and EUR -18.2 million for supermarkets and shops, with the fair value of investment properties totalling EUR 2,522.1 million (EUR 2,512.6 million). The average net yield requirement for investment properties was 6.4 per cent (6.4%). - Earnings per share decreased to EUR -0.02 (EUR 0.00), due mainly to lower net rental income, higher one-off and other adminis- trative expenses and higher negative fair value changes. - EPRA operating profit was EUR 28.9 million (EUR 31.3 million). The reduction was due to seasonal variation in property operat- ing expenses and one-off items in administrative expenses. - EPRA EPS (basic) stayed at the same level at EUR 0.05 (EUR 0.05), the lower direct operating profit decreased the direct result. - The Board of Directors proposes a per-share dividend of EUR 0.04 (EUR 0.04) and a return of equity from invested unrestricted equity fund of EUR 0.11 (EUR 0.10) per share. Summary of the Year 2011 Compared with the Year 2010 Citycon was able to reach the financial targets announced for 2011. In connection with its Q3/2011 interim report, the company revised its guidance announcing that it expects an increase of EUR 18–23 million in turnover compared with 2010, an increase of EUR 10–15 million in direct operating profit (EPRA operating profit), and an increase of EUR 4–8 million in the direct result (EPRA Earnings). In 2011, turnover grew from 2010 by EUR 21.1 million, EPRA operating profit by EUR 12.4 million and EPRA Earnings by EUR 6.0 million. Citycon changed its external provider of property appraisal services in 2011. For the first time, the value of Citycon’s property portfolio at the year-end was assessed by Jones Lang LaSalle Finland Oy. Citycon has changed its independent external appraiser at regular intervals. For the first three quarters of 2011, property valuation was conducted by Realia Management Oy, which had served as Citycon’s appraiser for over four years. - Turnover increased to EUR 217.1 million (2010: EUR 195.9 million). - Net rental income increased by EUR 17.1 million, or 13.4 per cent, to EUR 144.3 million (EUR 127.2 million). Based on compara- ble exchange rates, net rental income grew by EUR 15.5 million or 12.2 per cent. Completion of redevelopment projects such as Espoontori, Forum in Jyväskylä and Åkersberga Centrum increased net rental income by EUR 5.3 million. The acquisitions of the Kristiine and Högdalen Centrum shopping centres increased net rental income by EUR 7.0 million. - Net rental income from like-for-like properties increased by EUR 4.0 million, or 3.8 per cent, excluding the impact of the strength- ened Swedish krona. Like-for-like net rental income from shopping centres increased by EUR 6.2 million, or 7.3 per cent while like-for-like net rental income from supermarket and shop properties decreased by EUR 2.2 million, or 10.7 per cent. - Earnings per share were EUR 0.05 (EUR 0.34). This decrease was mainly due to negative fair value changes on investment prop- erties especially in the supermarket and shop properties. In addition, share issues taken place in July increased the number of shares. - EPRA EPS (basic) stayed at the same level and was EUR 0.21 (EUR 0.21). - Net cash from operating activities per share increased to EUR 0.25 (EUR 0.09), due to a higher EPRA operating profit, positive changes in working capital, received tax returns, extraordinary items and timing differences. - Citycon acquired the shopping centre Kristiine in Tallinn for EUR 105 million and the shopping centre Högdalen Centrum in Stock- holm for SEK 207.5 million (approx. EUR 23.1 million). - Redevelopment project of Koskikeskus in Tampere began, the estimated project investment is EUR 37.9 million. - In May, Citycon signed a EUR 330 million long-term unsecured credit facility agreement with a Nordic bank group. The facility consists of a bullet term loan of EUR 220 million and a EUR 110 million revolving credit facility. The loan period is five years. - The company strengthened its balance sheet and improved liquidity by raising approximately EUR 99 million in new equity, through a directed share offering arranged in July, by issuing 33 million new shares. In August, the company signed a 7-year unse- cured term loan facility for the amount of EUR 75 million. - Citycon Oyj’s new CEO, Marcel Kokkeel, assumed his duties on 24 March 2011 and the company’s new Executive Vice President, Finnish Operations, Michael Schönach, at the beginning of March. Johan Elfstadius began as Vice President, Swedish Operations on 21 November 2011. CITYCON OYJ | FINANCIAL RESULTS FOR 1 JANUARY - 31 DECEMBER 2011 3 Key Figures Q4/2011 Q4/2010 Q3/2011 2011 2010 Change-% 1) Turnover, EUR million 56.0 49.9 55.0 217.1 195.9 10.8% Net rental income, EUR million 37.3 31.8 38.3 144.3 127.2 13.4% Operating profit, EUR million 10.7 35.4 17.0 81.8 157.7 -48.1% % of turnover 19.1% 70.9% - 37.7% 80.5% - Loss/profit before taxes, EUR million -5.3 22.0 1.0 19.7 102.8 -80.9% Loss/ profit attributable to parent company shareholders, EUR million -5.4 14.4 -0.7 13.0 78.3 -83.5% EPRA operating profit, EUR million 2) 28.9 24.3 31.3 117.4 105.0 11.8% % of turnover 51.6 % 48.8% 56.8% 54.1% 53.6% 0.9% EPRA Earnings, EUR million 2) 12.5 13.5 14.9 53.3 47.3 12.7% Indirect result, EUR million -17.9 0.9 -15.6 -40.3 31.1 - Earnings per share (basic), EUR -0.02 0.06 0.00 0.05 0.34 -85.5% Earnings per share (diluted), EUR -0.02 0.06 0.00 0.05 0.34 -85.5% EPRA Earnings per share (basic), EUR 2) 0.05 0.06 0.05 0.21 0.21 -1.1% Net cash from operating activities per share, EUR 0.04 0.00 0.14 0.25 0.09 190.5% Fair value of investment properties, EUR million 2,512.6 2,522.1 2,367.7 6.5% Equity per share, EUR 3.29 3.25 3.47 -6.5% Net asset value (EPRA NAV) per share, EUR 3.64 3.62 3.79 -4.6% EPRA NNNAV per share, EUR 3.31 3.29 3.49 -5.7% Equity ratio, % 37.7 36.0 37.1 -2.9% Gearing, % 148.3 151.4 153.1 -1.1% Net interest-bearing debt (fair value), EUR million 1,445.2 1,463.5 1,386.0 5.6% Net rental yield, % 5.9 6.0 5.8 3.4% Net rental yield, like-for-like properties, % 6.0 6.1 6.0 1.7% Occupancy rate (economic), % 95.4 95.5 95.1 0.5% Personnel (at the end of the period) 129 136 129 5.4% Dividend per share, EUR 0.04 3) 0.04 0.0% Return from invested unrestricted equity fund per share, EUR 0.11 3) 0.10 10.0% Dividend and return from invested unrestricted equity fund per share total, EUR 0.15 3) 0.14 7.1% 1) Change-% is calculated from exact figures and refers to the change between 2011 and 2010.