Financial
Review 2022
Contents
About this report
Accounting principles and key estimates and
assumptions regarding business activities
are presented together with the relevant note.
The aim is to improve the presentation of how
operating result was formed, what assets were
used to achieve the business profits and how
business and asset transactions were financed.
The accounting principles have been marked with
a grey background.
Information on the key estimates and assumptions
have been marked with a beige background.
CFO Bret D. McLeod comments on significant
items during the reporting period.
Information to shareholders ..........................................................3
Citycon in brief ..................................................................................... 4
CEO’s interview .................................................................................... 5
Key figures ............................................................................................. 7
How we create value .........................................................................8
Report by the Board of Directors ................................................9
EPRA performance measures ................................................... 21
Operational key figures ................................................................. 28
(Re)development projects in progress .................................. 34
Risk and risk management ......................................................... 35
Shares and shareholders ..............................................................37
Key figures and financial development for five years ...39
Formulas for key figures and ratios ........................................40
Citycon Oyj’s consolidated financial statements ........42
Consolidated income statement, IFRS ................................. 42
Consolidated statement of other comprehensive
income, IFRS ...................................................................................... 42
Consolidated statement of financial position, IFRS .......43
Consolidated cash flow statement, IFRS ............................44
Consolidated statement of changes in
shareholders’ equity, IFRS ...........................................................45
Notes to the consolidated financial statements ...........46
1. Operating performance .....................................................48
1.1. Segment information ..............................................................48
1.2. Gross rental income ................................................................ 50
1.3. Revenue from contracts with customers ...................... 51
1.4. Property operating expenses .............................................52
1.5. Administrative expenses ...................................................... 53
1.6. Employee benefits and personnel expenses ............. 53
1.7. Other operating income and expenses ......................... 56
1.8. Earnings per share .................................................................. 56
2. Property portfolio and assets .........................................56
2.1. Investment properties and related liabilities .............. 56
2.2. Investment properties held for sale ...............................60
2.3. Right-of-use assets ................................................................ 61
2.4. Investments in joint ventures and associates .......... 62
3. Financing ...............................................................................64
3.1. Equity ............................................................................................. 64
3.2. Net financial income and expenses ...............................65
3.3. Classification of financial instruments ........................66
3.4. Loans ............................................................................................68
3.5. Financial risk management ...............................................69
3.6. Derivative financial instruments.......................................72
3.7. Commitments and contingent liabilities ...................... 74
3.8. Cash and cash investments .............................................. 74
4. Other notes to the accounts ............................................74
4.1. Income taxes .............................................................................. 74
4.2. Deferred tax assets and liabilities ....................................75
4.3. Intangible assets ..................................................................... 76
4.4. Trade and other receivables .............................................. 76
4.5. Trade and other payables ....................................................77
5. Consolidation ........................................................................ 78
5.1. Business combinations and goodwill ............................ 79
5.2. Acquisition of non-controlling interests ...................... 80
5.3. Related party transactions and changes in
group structure ................................................................................. 81
5.4. Changes in IFRS and accounting policies .................. 82
5.5. Events after the reporting date ........................................ 82
Parent company financial statements, FAS ...................83
Notes to the parent company’s financial
statements, FAS ............................................................................... 86
Signatures to the financial statements ................................90
Auditor’s report .................................................................................. 91
2
Financial statementsFinancial review Financial Review 2022
Information to shareholders
Listing of Citycon’s shares
Citycon Oyj’s shares are listed on the Nasdaq Helsinki
Ltd. Large Cap list under the trading code CTY1S.
Citycon has one series of shares, and each share
entitles its holder to one vote at the General Meeting of
shareholders and to an equal dividend.
Annual general meeting
Citycon Oyj’s Annual General Meeting will be held on 21
March 2023 at 12:00 noon. The notice, topics discussed
in the meeting, proposals made for the Annual General
Meeting, as well as the instructions on how to register
will be found on Citycon’s website.
Shareholders wishing to attend the meeting must be
registered in Citycon’s shareholder register at Euroclear
Finland Ltd. on the record date 9 March 2023.
Changes of address
Shareholders are requested to notify their book-entry
account operator or Euroclear Finland Ltd., whichever
holds the shareholder’s book-entry account, of any
changes to their name or address.
Publication of financial information
Citycon publishes financial information in English and
Finnish. All materials can be downloaded from Citycon’s
website.
Subscription to publications
Citycon’s financial reports, stock exchange releases and
press releases can be ordered by registering an e-mail
address on Citycon’s website at citycon.com/newsroom.
Investor relations contacts
Citycon’s Investor Relations function assists in all
investor relations related questions. The primary contact
is the VP, Corporate Finance and Investor Relations
Sakari Järvelä (ir@citycon.com).
Asset distribution
The Board of Directors proposes to the Annual General
Meeting that the Board of Directors will be authorized
to decide on the distribution of assets from the invested
unrestricted equity fund.
Based on the proposed authorization, the maximum
total amount of equity repayment, shall not exceed 0.50
per share. Based on the current total number of issued
shares in the company, the authorization would equal
a maximum of EUR 84,004,470 in equity repayment.
The dividend/equity repayment would be paid to
shareholders in four installments.
Financial calendar 2023
Financial Statements Bulletin
and Financial Statements 2022 16 February
Interim Report
January–March 2023 4 May
Half-yearly Report
January–June 2023 18 July
Interim Report
January–September 2023 1 November
AGM record date
Last day for AGM registration
AGM
9 March
14 March
21 March
Preliminary payment date of equity repayment
1
31 March 2023
30 June 2023
29 September 2023
29 December 2023
More information:
Shares and shareholders, pages 37–38
1
Citycon’s Board of Directors will make separate resolutions and
announcements on each distribution of the dividend/equity
repayment subject to been authorized for asset distribution by
the Annual General Meeting.
3
Financial statementsFinancial review Financial Review 2022
Citycon in brief
2
3
2
4
5
2
5
We create cities full of life.
For people. For communities.
For development. For growth.
Citycon is the leading owner and developer of urban hubs in
the Nordics and Baltics. Our 33 mixed-use, necessity-based centres
are located in the major cities in Finland, Sweden, Norway, Denmark
and Estonia. We transform unique locations into sustainable
communities and cities full of life, serving over 120 million people
each year and delivering long-term share value.
Tot a l
4.3
Billion
Balanced Nordic portfolio
%
1
Including Kista Galleria 50%.
Finland & Estonia
Norway
Sweden & Denmark
1
28%
23%
49%
33
urban hubs
in 5 countries
serving 120 million
people each year.
Shopping centre
Bergen
Stockholm
Oslo
Gothenburg
Copenhagen
Helsinki
Tallinn
Sweden
& Denmark
8
shopping
centres
Finland
& Estonia
11
shopping
centres
Norway
14
shopping
centres
4
Financial statementsFinancial review Financial Review 2022
CEO’s interview
What were the highlights
of the year for you?
First of all, 2022 was a very good year for Citycon with
successes on all fronts: operations, development, capital
recycling, and sustainability. Our strong performance
in all of these areas is a testament to the strength of
our necessity-based, grocery and municipal anchored
properties which are connected to public transportation
and are located in the strongest and fastest-growing
cities in the Nordics. When you combine this with the
exceptional talent of our people, it creates a recipe for
success.
At the top of the list of highlights was the grand opening
of phase one of Lippulaiva, our new mixed-use centre
in Espoo, Finland, which is an excellent representation
of Citycon’s strategy in action: a full-service, mixed-
use, urban hub with several large grocery anchors, a
wide range of private and municipal services, direct
connection to the metro, surrounded by eight residential
towers providing a solid base of customer demand.
Notably, grocery stores account for approximately 45%
of the centre and all necessity goods representing over
70% of Lippulaiva’s 44,000 sq.m. of gross leasable
area. The centre is built on a brand-new metro station,
which opened in early December 2022. It was the
world’s first retail centre to be awarded smart building’s
gold certificate, due to it being carbon neutral and a
shining example of our commitment to sustainability.
In addition to the retail offerings, the first residential
tower at Lippulaiva opened in late December 2022 and
the remaining three towers in the first quarter of 2023.
This will create additional demand for the property and
diversified revenue streams for the company. We are
very pleased with how Lippulaiva has been received
by the local community and are confident that it will
continue to develop into the social and commercial hub
of the area.
On the transaction front, we continued to demonstrate
the inherent value and liquidity of Citycon’s portfolio. In
February, we sold two non-core assets at price above
our book value and in December, we sold two additional
non-core assets in Norway for EUR 120.8 million. For
the full year, we sold four non-core assets for EUR 266
million at approximately book value, which provides
further evidence of the attractiveness and desirability of
necessity-based, inflation protected Nordic retail assets
to institutional investors. The most recent transaction
represents the first tranche of the asset sale target that
we announced in November, to sell EUR 500 million of
non-core assets over the next 24 months. With these
recent divestments, our disposition target now stands
at approximately EUR 380 million. Further, these sales
also bolster the validity of our underlying portfolio asset
values, particularly given that these transactions were
for non-core properties.
2022 was also the year where we continued our
process to solidify our investment grade balance sheet.
In addition to demonstrating strong private market
demand for retail assets, we continued our disciplined
capital allocation by using sale proceeds to repurchase
our bonds and take advantage of the large discounts
and dislocation in the secondary markets. Through these
actions we reduced our future interest expense, while
also improving our overall balance sheet and debt profile.
During 2022, Citycon repurchased EUR 112.3 million of
notional bonds for approx. EUR 102.5 million of cash at
an average yield of 4.9%. Subsequent to year-end, we
launched a public tender to repurchase a combination
of our hybrid bonds and our bond maturing in October
2024. In that transaction, we deployed EUR 41.4 million
of cash to repurchase EUR 57.4 million of notional bonds,
resulting in a cash savings of EUR 16.0 million to par and
annual cash interest savings of EUR 2.1 million.
Our results highlight
the quality and
attractiveness of
Citycon’s grocery and
municipal-anchored
centres.
How would you describe Citycon’s
operational performance in 2022?
Overall, we continued to produce excellent results
in 2022. For the year, like-for-like net rental income
increased 11.9% in Q4 and 6.6% in 2022 compared to
the previous year. We were pleased to see continued
strong demand for our centres from both new and
existing tenants, as evidenced by our excellent leasing
activity with over 174,000 sq.m. of signed leases in
2022 with positive leasing spreads of 2.0%, resulting in
retail occupancy up 120 bps to 95.4%. At the same time,
average rent per square meter increased by
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Financial statementsFinancial review Financial Review 2022
1.1 EUR to 23.7 EUR/s.qm. during the year. These
operational results were the basis for our financial
results which met and exceeded the guidance we had
previously provided.
We also continue to see very strong growth in both
footfall and tenant sales. In 2022, like-for-like tenant
sales increased by 5.2% and footfall 9.7% compared
to the previous year. Notably, tenant sales are already
6.2% above 2019 levels, again highlighting the quality
and attractiveness of Citycon’s grocery- and municipal-
anchored centres and their resilience during the
pandemic. Our assets function as last mile logistics
centres for the delivery of daily goods and services for
our communities and customers in the strongest and
fastest growing cities in the Nordics combined with
direct connections to public transportation. Our mix of
high credit tenants that are less reliant on consumer
discretionary spending provide a level of resilience and
stability reflected in our results that bode well as we look
forward into 2023.
We are well positioned operationally with a proven,
stable business model that has performed well
regardless of macroeconomic pressures. This
combination is enhanced by the fact that 93% of our
leases are linked to indexation and stand to benefit
in 2023. This provides meaningful organic growth
for net rental income as the rents are reflected in the
outlooks we are providing today. We also have the
benefit of having a low occupancy cost ratio of 9.1%, and
increasing tenant sales in an inflationary environment.
This positions Citycon to increase rents and service
charges without jeopardizing our tenants’ ability to
continue to run profitable businesses. Further, we will
benefit from a full-year of Lippulaiva being open, in
addition to starting to benefit from the residentials units
that coming online early this year.
How is the increasing focus on
sustainability impacting Citycon?
Citycon has been an early leader in the real estate
sector when it comes to sustainability, and we are fully
committed to deliver on our ambitious sustainability
goals, namely carbon neutrality by 2030 and to reduce
greenhouse gas emissions in line with the 1.5°C
Paris goal. Alongside with our company level targets,
sustainability is embedded in our operations at every step
of the process and in 2022, all Citycon employees had a
sustainability linked target in their bonus criteria.
Our newest asset, Lippulaiva is the prototype of Citycon’s
sustainability initiatives in action. The centre is a pioneer
in sustainable energy solutions and is carbon neutral in
terms of energy consumption from day one. The primary
source of energy is the largest ever geothermal heating
and cooling system built on a commercial building in
Europe combined with integrated solar panels and a
smart electricity management solution.
I am proud that our efforts have led to Citycon being
recognized as one of the leaders in our sector globally,
including Lippulaiva becoming the world’s first retail
property to be awarded Smart Building’s Gold certificate.
Furthermore, Citycon was once again named one of
Europe’s Top Climate Leaders in a comprehensive study
by Financial Times.
Our long-term sustainability work is also contributing to
our financial performance in the current high energy cost
environment, as Citycon has a significant amount of its
own onsite energy production at our solar, geothermal,
and hydrothermal powerplants. Going forward we will
continue to seek to invest in sustainable solutions
through a variety of measures to improve our centers, our
urban hubs and the communities in which we operate.
What are Citycon’s
focus areas for 2023?
Moving forward into 2023, we will continue to focus
on delivering on our strategy of creating and operating
necessity-based retail hubs in top Nordic locations. The
tenant mix of our assets with municipal and grocery
anchor tenants has demonstrated its strength and
resilience, as we have continued to outperform our
more fashion-oriented peers throughout the pandemic
and the current inflationary environment and should
continue to do so going forward.
We were “first to market” in the tenant mix transition of
our centers with our leasing efforts targeting grocery,
municipal and other service providers. We have several
large deals in our pipeline that will further this program
significantly. Our skilled asset management teams
will continue to maximize the space and tenant mix at
our core centers, while maintaining a keen eye on cost
control and profitability.
Our investment grade balance sheet will also remain
a key focus area for us during 2023. We do not have
significant maturities until 2024. However, we are well
out in front of dealing with scheduled maturities. We
will also continue to actively work towards further
strengthening our financial position. As mentioned
earlier, in November 2022 we announced a goal of
selling EUR 500 million of non-core assets over the
next 24 months. Following the divestments executed in
December the remaining target is EUR 380 million for
upcoming 20 months. The proceeds from divestments
will be used to repay debt and further stabilizes
Citycon’s well-laddered maturity profile and credit
metrics.
Following the completion of Lippulaiva, Citycon’s capital
expenditures will be materially lower in 2023. In addition
to typical maintenance and tenant improvement capex,
in 2023 we have only limited committed development
capex at guaranteed, fixed pricing. These reduced
capital commitments increase operational free cash
flow, providing additional support for the balance sheet.
At the same time, we continue to make progress in
creating approximately EUR 300 million of additional
building rights’ in our existing portfolio with minimal
capital expenditure required. Building rights are next
to and on top of our existing assets, which creates
additional value for our portfolio and our centres at
minimal capital outlay.
We have a very stable business model with some of the
best necessity-based centres in the Nordics and 93%
of our leases linked to indexation, which positions us for
healthy topline growth. I would also remind that this is
the floor for growth in future years. Citycon’s relatively
low occupancy cost ratio also offers the company ample
headroom for rent growth particularly as sales continue
to increase, which continues to translate into strong
leasing activity and stable cash flows.
In summary, the company’s business model has
outperformed in 2022 and is poised to continue to do so
in the coming year.
F. Scott Ball
CEO
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Financial statementsFinancial review Financial Review 2022
Key figures
Key figures 2022 2021
Net rental income, MEUR 203.6 202.3
Net rental income growth 0.7% -1.5%
EPRA Earnings per share (basic) 0.730 0.703
EPRA NRV per share 11.01 12.15
Average interest rate 2.43% 2.47%
Tot a l
203.6
MEUR
Net rental income by segments
MEUR
Finland & Estonia
Norway
Sweden & Denmark
Other
89.1
78.9
36.0
-0.3
Q1
2022
Q2
2022
Q3
2022
Q4
2022
Rent collection rate
%
96%
98%
97%
98%
2020 2021 2022
Tenant sales development
1
%
5.2
3.8
-3.8
-0.4
-1.5
2.9
Like-for-like
Total
1
Sales figures include estimates. Sales figures exclude VAT and the change
has been calculated using comparable exchange rates. Kista Galleria 50%
not included.
2020 2021 2022
Footfall development
1
%
-15.6
-11.3
9.7
-1.6
7.5
-4.0
Like-for-like
Total
1
Footfall figures include estimates. Kista Galleria 50% not included.
2021 Q3 2022 Q4 2022
Retail occupancy rate
1
%
94.2
94.9
95.4
1
Kista Galleria 50% not included.
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Financial statementsFinancial review Financial Review 2022
How we create value
How we create value?
Focusing on prime assets that we...
Assets in Nordic
prime locations
• Top 2 cities in each
country with strong
urbanisation
• Connection to public
transportation
Necessity-
based tenant mix
• Grocery anchored centres,
a large share of necessity
tenants
• Mixed-use hubs with
growing share of
municipalities
Proven asset
management
• Long lasting relationship
with municipalities
• Continued dialogue with
surrounding communities
• Sustainability embedded in
the operating model
Active capital
recycling
• 500 MEUR target for asset
sales in 11/2022 -11/2024
• Proceeds used to
repay debt
• Strengthen investment
grade balance sheet
Inherent building rights
• 300+ MEUR of identified
building rights
• Mainly residential, which will
enhance value of underlying center
• Minimal capex required to get zoning
• Multiple value extraction paths via
sale, JV or build
Citycon – urban
convenience in the
heart of communities
…own,
• Strong portfolio of 33
convenience based centres
• Located in growing urban areas
in Nordic and Baltic cities
• Long-term investor
…manage,
• In-house real estate expertise
throughout the centre value chain
• Retail experts in 5 countries
• Pan-Nordic approach with
synergies and a cross-border
leasing team
…develop.
• Area development – creating
attractive places for living, working
and socializing
• Improved commercial
attractiveness and
competitiveness and better places
for our tenants to operate
We bring value to communities by developing urban hubs for
living, working, socialising and shopping. We have extensive
experience as an urban developer and use our expertise
when we create mixed-use centres that include retail, offices,
hotels, housing, food & beverage as well as healthcare,
culture and leisure services.
A stable core
business with
attractive
opportunities for
value creation
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Financial statementsFinancial review Financial Review 2022
Report by the Board of Directors
Citycon continued to demonstrate the strength and
stability of its Nordic portfolio on both the operational
and transactional fronts during an uncertain macro-
economic environment. Citycon’s operational
performance showed continued improvement
throughout the year as like-for-like net rental income
increased by 6.6%. The overall financial performance
remained solid in 2022 and reported Direct Operating
Profit, EPRA Earnings per share, and Adjusted Earnings
per share were EUR 175.2, EUR 0.730, and EUR 0.548,
respectively. Rent collection rate was high at 97% for
2022 and reflects the high quality and creditworthiness
of Citycon’s tenants. Combined with Citycon’s low
occupancy cost ratio (9.1%) and increasing tenant sales,
there is ample headroom for rent indexations in 2023.
Like-for-like tenant sales increased 5.2% and like-for-
like footfall 9.7% compared to the previous year. Like-
for-like tenant sales are already well above (6.2%) 2019,
which demonstrates the strength of Citycon’s strategy
to focus on grocery-anchored urban hubs, which have a
high proportion tenants providing necessity goods and
services, connected to transportation and in convenient
locations in the largest Nordic cities.
On the transaction front, Citycon continued to be an
active capital recycler and sold four non-core assets in
Norway for approx. EUR 266 million. This demonstrates
the liquidity of Citycon’s portfolio and highlights the
attractiveness and desirability of necessity-based,
inflation protected Nordic retail assets to investors. At
the same time, Citycon demonstrated efficient capital
allocation by using a major part of the sale proceeds
to deleverage the company by repurchasing its own
bonds from the open market. These actions further
improved Citycon’s financial position and strengthened
its balance sheet. Currently, Citycon has no significant
maturities until October 2024, 93% of its debt is fixed
and 100% of its assets are unencumbered.
In addition to focusing on portfolio recycling and
balance sheet activities, Citycon continued to execute
its strategy to create mixed-use, necessity-based,
sustainable urban hubs. Lippulaiva, which opened in
March, is a prime example of Citycon’s necessity-based,
mixed-use strategy in action and an important milestone
in realising the potential of Citycon’s robust building
right potential to create assets that combine a diverse
range of services, retail, housing and office premises
with well-functioning traffic connections. Going forward,
Citycon will continue to focus on monetizing its building
rights either by selling, entering into joint ventures, or
developing to further densify the area directly around
Citycon’s existing centres.
Key Figures
2022 2021 % FX Adjusted %
1
Net rental income MEUR 203.6 202.3 0.7% 1.2%
Like-for-like net rental income development % 6.6% -1.5% - -
Direct operating profit
2
MEUR 175.2 176.1 -0.5% 0.0%
IFRS Earnings per share (basic)
3
EUR -0.15 0.55 - -
Fair value of investment properties MEUR 4,040.1 4,189.2 -3.6% -
Loan to Value (LTV)
2,4,6
% 41.4 40.3 2.7% -
EPRA based key figures
2
EPRA Earnings MEUR 122.6 124.4 -1.4% -0.8%
Adjusted EPRA Earnings
3
MEUR 92.1 100.0 -7.9% -7.2%
EPRA Earnings per share (basic) EUR 0.730 0.703 3.9% 4.6%
Adjusted EPRA Earnings per share (basic)
3
EUR 0.548 0.565 -3.0% -2.2%
EPRA NRV per share
5,7
EUR 11.01 12.15 -9.3% -
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 and amortized fees.
4
Highly liquid cash investments has been taken into account in net debt.
5
Calculation updated from this and comparison periods. Divided by number of shares at balance sheet date instead of average amount of shares during the
reporting period.
6
LTV Q4/2021 changed due to correction related to presentation of IFRS 16 assets. Previously reported LTV for Q4/2021 was 40.7%
7
The effect of currency rates to EPRA NRV/share was EUR -0.79.
Outlook for 2023
Direct operating profit MEUR 174–192
EPRA Earnings per share (basic) EUR 0.69–0.81
Adjusted EPRA Earnings per share (basic) EUR 0.51–0.63
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 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.
9
Financial statementsFinancial review Financial Review 2022
Active capital recycling:
• In 2022, Citycon sold 4 non-core assets in Norway
for approx. EUR 266 million demonstrating liquidity of
Citycon’s portfolio and highlighting the attractiveness
and desirability of necessity-based, inflation protected
Nordic retail assets to investors.
• The proceeds from the transactions were mainly
used to repay debt and to further strengthen
Citycon’s investment grade balance sheet.
• In November, Citycon stated a goal of selling EUR 500
million of non-core assets over the next 24 months.
• Following the divestment in December, the
remaining target is EUR 380 million.
• In February, Citycon signed a forward commitment
agreement to acquire a newly developed residential
asset in Stockholm, Sweden for approximately EUR
69.5 million.
Financing:
• In 2022, Citycon repurchased EUR 112.3 million of
notional bonds from the open market by using approx.
EUR 102.5 million of cash at an average yield of 4.9%.
• Bond repurchases accretively funded by proceeds
from non-core Norwegian dispositions.
• Repurchases further stabilizes Citycon’s well-
laddered maturity profile and reduces refinancing
risk.
• Significant reduction in interest expense.
• In January 2023, Citycon tendered EUR 57.4 million of
notional 2024 bond and hybrid bonds issued in 2019
and 2021 with approx. EUR 41.4 million of cash.
• Citycon remains committed to its investment grade
balance sheet and has no significant maturities until
October 2024, 93% fixed debt, and 100% of its assets
are unencumbered.
Financial performance 2022
• Full year results for Direct Operating Profit and EPRA
EPS in-line with company guidance.
• Net rental income was EUR 203.6 million (Q1–
Q4/2021: EUR 202.3 million). On a like-for-like basis,
net rental income increased by 6.6%.
• EPRA Earnings were EUR 122.6 million (Q1–Q4/2021:
EUR 124.4 million). EPRA Earnings per share (basic)
was EUR 0.730 (Q1–Q4/2021: EUR 0.703).
• Adjusted EPRA earnings were EUR 92.1 million
(Q1–Q4/2021: EUR 100.0 million).
• IFRS earnings per share was EUR -0.15 (Q1–Q4/2021:
EUR 0.55).
• Net cash from operations per share was EUR 0.59
(Q1–Q4/2021: EUR 0.72).
• The Board of Directors proposes to the Annual
General Meeting that the Board be authorised
to decide on the profit distribution. Based on the
proposed authorization the maximum amount of profit
sharing, to be paid as equity repayment, would be
EUR 0.50 per share.
Development projects:
• Urban hub Lippulaiva opened on 31 March 2022 to an
excellent reception from both tenants and customers.
• Lippulaiva is a prototype and great example of the
company’s mixed-use development strategy in
action, combining necessity-based retail, private
and public services with complimentary residential
and office spaces.
• First residential tower opened in December 2022
with remainder of the residentials coming online in
2023–2024.
• Lippulaiva is a nearly zero emission building with
extensive geothermal and solar energy solutions
resulting in the world’s first centre to be awarded
Smart Building’s Gold certificate.
• Citycon continued to execute on the creation of
approximately EUR 300 million of additional building
rights’ in our existing portfolio with minimal capital
expenditure required.
• Trekanten, Norway: new zoning plan was approved
in September signalling a significant milestone in
the realization of the building rights.
• Opportunity to sell, develop or execute strategic
joint ventures.
• Currently, all construction commitments are minimal
and at guaranteed fixed pricing.
• Capital expenditures declining significantly following
completion of Lippulaiva.
Main events in 2022
General:
• Citycon continued to demonstrate strong operational
performance amidst a challenging macroeconomic
environment. Just as the company outperformed
during the covid crisis, Citycon’s strategy continued to
prove resilient in a variety of market conditions.
• Citycon was selected as one of Europe’s Climate
Leaders for the second consecutive year according
to the list drafted by the Financial Times and German
research company Statista. Citycon is the only Finnish
real estate company included in the list and was in the
top quarter of all European companies, regardless of
sector.
• Citycon announced a new brand reflecting its
Nordic strategy to own Nordic mixed-use, urban
hubs focused on necessity-based centres in prime
locations.
• Bret D. McLeod started as Chief Financial Officer of
Citycon on January 1, 2022.
10
Financial statementsFinancial review Financial Review 2022
Business environment key figures
Finland Norway Sweden Denmark Estonia Euro area
GDP growth, 2022 2.0% 3.1% 2.8% 3.0% 8.0% 3.4%
Unemployment, 2022 6.7% 3.0% 6.9% 4.8% 5.3% 6.4%
Inflation, 2022 9.2% 6.5% 10.9% 10.3% 17.6% 9.2%
Retail sales growth, 11/2022
1
-3.1% -3.6% -5.0% -7.4% -2.3% -2.8%
1
% change compared with the same month of the previous year
Sources: SEB Nordic Outlook, European Commission, Eurostat, Statistics Finland/Norway/Sweden/Estonia/Denmark
Business environment
The Nordic economies recovered well from the Covid-19
pandemic dip but are now being impacted, like the
rest of the global economy, by the sharp increase in
cost of living and the uncertain economic environment
due to inflation and rising interest rates. The common
denominator for the Nordic countries is their strong
financial position, thanks to high personal savings,
strong public finances and robust job creation,
which have continued up to now. This provides these
economies a buffer and some degree of resilience
during this time of geopolitical uncertainty, inflation,
and rising interest rates. Additionally, the Nordics are
expected to be less affected by the war in Ukraine
because those countries are, generally, less dependent
on Russian natural gas.
While inflation is trending higher in all Nordic markets,
this remains a tailwind for Citycon operations due to the
grocery and services-oriented tenant mix of Citycon’s
necessity-based urban hubs, and the fact that 93% of
leases tied to indexation.
(Sources: SEB Nordic Outlook, Nordea Economic
Outlook, European Commission, CBRE, JLL, Statistics
Finland/Norway/Sweden/Estonia/Denmark, Eurostat)
Net rental income
Like-for-like net rental income in Q4 increased 11.9%
compared to Q4/2021.
Like-for-like net rental income in Q1–Q4/2022 increased
by 6.6%.
Total net rental income for the period was EUR 203.6
million (Q1–Q4/2021: EUR 202.3 million).
Like-for-like net rental income from the Finnish &
Estonian operations increased by 2.7% in Q1–Q4/2022.
Like-for-like net rental income from Swedish & Danish
operations increased by 8.3% in Q1–Q4/2022. Like-for-
like net rental income from the Norwegian operations
increased by 10.6% in Q1–Q4/2022.
Occupancy, Sales and Footfall
The retail occupancy rate was 95.4% in Q4/2022 and
was 120 bps higher versus the same time last year
(Q4/2021: 94.2%). Economic occupancy for Q4/2022
was 94.5% (Q4/2021: 93.4%). Furthermore, the average
rent per sq.m. increased by 1.1 to 23.7 EUR (Q4/2021:
22.6 EUR) as we leased over 174,000 sq.m. during the
year with a positive leasing spread of 2.0%.
Like-for-like tenant sales increased 0.4% in Q4/2022
and 5.2% for Q1–Q4/2022 compared to the same
time last year. Notably, like-for-like tenant sales in
Q1–Q4/2022 are up 6.2% compared to the same time
period in 2019.
Like-for-like footfall increased by 3.7% in Q4/2022 and
9.7% in Q1–Q4/2022 compared to the same period last
year.
Net rental income and gross rental income breakdown
Net rental income
Gross rental
income
MEUR
Finland &
Estonia Norway
Sweden &
Denmark Other Total Total
2021 85.2 77.8 39.2 0.0 202.3 222.2
(Re)development projects 7.1 0.6 -1.3 - 6.4 8.3
Divestments -5.0 -6.0 -2.4 - -13.4 -14.1
Like-for-like properties
1
1.7 5.5 2.2 - 9.4 7.5
Other (incl. exchange rate differences) 0.0 1.0 -1.7 -0.3 -1.0 -1.6
2022 89.1 78.9 36.0 -0.3 203.6 222.3
1
Like-for-like properties are properties held by Citycon throughout two full preceding periods. Like-for-like properties exclude properties under (re)development
or extension.
Like-for-like and total net rental income development, 2022 vs. 2021
%
Like-for-like NRI Development
(at comparable exchange rates)
Total NRI Development
(at historical exchange rates)
Total NRI Development
(at comparable exchange rates)
1
Total NRI impacted by disposals executed in 2021 and 2022.
Finland &
Estonia Norway
Sweden &
Denmark Tot al
1
2.7
4.5
4.5
10.6
1.3
0.7
6.6
0.7
1.2
8.3
-8.2
-4.4
11
Financial statementsFinancial review Financial Review 2022
Tenant sales development, 2022 vs. 2021
1
%
1
Sales figures include estimates. Sales figures exclude VAT and the change has been calculated using
comparable exchange rates. Kista Galleria 50% not included.
Like-for-like sales
Total sales
(including impact of divested assets)
8.2
10.5
1.8
7.2
5.2
-8.4
-1.3
-0.4
Finland &
Estonia Norway
Sweden &
Denmark To t a l
Footfall development, 2022 vs. 2021
1
%
1
Footfall figures include estimates. Kista Galleria 50% not included.
Like-for-like footfall
Total footfall
(including impact of divested assets)
14.2
17.7
8.5
5.3
9.7
0.3
2.4
7.5
Finland &
Estonia Norway
Sweden &
Denmark To t a l
Occupancy rate
1
%
1
Kista Galleria 50% not included.
31 December 2021
31 December 2022
Retail occupancy rate 31 December 2022
95.0
92.3
92.5
93.4
95.5
93.4
94.0
94.5
95.4
Finland
& Estonia
Sweden &
Denmark
Norway Tot a l
Lease portfolio summary
1
31 December
2022
31 December
2021
Number of leases pcs 3,191 3,326
Average rent
EUR/sq.m./
month 23.7 22.6
Average remaining
length of lease
portfolio years 3.4 3.1
Occupancy cost
ratio
2
% 9.1% 8.8%
Leasing Spread % 2.0% -1.3%
1
Kista Galleria 50% not included.
2
The rolling twelve month occupancy cost ratio for like-for-like shopping
centres.
Leasing activity
1
Q1–Q4
/2022
Q1–Q4
/2021
Total area of leases started sq.m. 262,772 247,526
Total area of leases ended sq.m. 302,490 319,011
1
Leases started and ended do not necessarily refer to the same premises.
Kista Galleria 50% not included.
At period-end, Citycon had a total of 3,191 (3,326)
leases, of which the average remaining length was 3.4
years (3.1).
12
Financial statementsFinancial review Financial Review 2022
Property portfolio summary
31 December 2022
No. of
properties
Gross
leasable area
Fair value,
MEUR
Properties held
for sale, MEUR Portfolio, %
Shopping centres, Finland & Estonia
1
11 437,050 2,038.1 - 50%
Other properties, Finland & Estonia 1 2,240 3.8 - 0%
Finland & Estonia, total 12 439,290 2,041.8 - 51%
Shopping centres, Norway 13 350,100 1,198.1 - 30%
Rented shopping centres, Norway
2
1 14,500 - - -
Norway, total 14 364,600 1,198.1 - 30%
Shopping centres, Sweden & Denmark 7 209,500 748.7 - 19%
Other properties, Sweden & Denmark 1 - 6.2 - 0%
Sweden & Denmark, total 8 209,500 754.9 - 19%
Shopping centres, total 32 1,011,150 3,984.8 - 99%
Other properties, total 2 2,240 10.0 - 0%
Investment properties, total 34 1,013,390 3,994.8 - 99%
Right-of-use assets classified as
investment properties (IFRS 16) - - 45.3 - 1%
Investment properties in the statement of
financial position, total 34 1,013,390 4,040.1 - 100%
Kista Galleria (50%) 1 46,350 210.7 - -
Investment properties and Kista Galleria
(50%), total 35 1,059,740 4,250.8 - -
1
Includes Lippulaiva residential development project.
2
Value of rented properties is recognised within IFRS 16 investment properties based on IFRS rules.
Fair value changes
MEUR 2022 2021
Finland & Estonia -15.4 3.4
Norway
1
-26.5 26.2
Sweden & Denmark -7.8 30.8
Investment properties, total -49.8 60.4
Right-of-use assets classified as investment properties (IFRS 16) -6.8 -11.8
Investment properties in the statement of financial position, total -56.5 48.6
Kista Galleria (50%) -25.5 -1.4
Investment properties and Kista Galleria (50%), total -82.0 47.2
1
Includes EUR -15.9 million Torvbyen fair value impact in Q4 as a result of a partial closure for structural damage.
Financial result Q1–Q4/2022 vs.
Q1–Q4/2021
Operating profit was EUR 87.7 million (Q1–Q4/2021:
EUR 217.8 million).
Administrative expenses were EUR 28.7 million
(Q1–Q4/2021: EUR 26.1 million), mainly due to IFRS
treatment of share-based compensation. At the end of
the reporting period, Citycon Group employed a total of
251 (31 December 2021: 251) full-time employees (FTEs)
of whom 57 worked in Finland & Estonia, 82 in Norway,
47 in Sweden & Denmark, and 66 in Group functions.
Personnel key figures
2022 2021 2020
FTE at the end of the reporting
period 251 242 239
Wages and salaries, EUR million 18.9 17.3 18.2
Net financial expenses (IFRS) decreased to EUR 48.0
million (Q1–Q4/2021: EUR 55.0 million) due to lower
interest expenses following lower debt levels, coupled
with indirect one-off gains related to prepayment of
debt. The comparison period included indirect one-off
costs related to prepayment of debt. In addition, EUR 9.2
million indirect loss (Q1–Q4/2021: EUR 0.8 million loss)
related to fair value changes of cross-currency swaps
not under hedge accounting was booked.
Share of loss of joint ventures and associated
companies totalled EUR -24.6 million (Q1–Q4/2021:
EUR -6.3 million) mainly due to weaker development of
property fair values in joint venture Kista.
Profit for the period was EUR 5.1 million (Q1–Q4/2021:
EUR 121.0 million).
Property portfolio value development
From year-end the fair value of investment properties
decreased by EUR 149.1 million to EUR 4,040.1
million (31 December 2021: EUR 4,189.2 million). Net
investments, including both acquisitions and disposals
and development projects increased the fair value by
EUR 149.9 million. In addition, changes in right-of-use
–assets increased the value of investment properties by
an additional EUR 6.4 million. Fair value losses decreased
the value of investment properties by EUR 56.5 million,
exchange differences by EUR 122.3 million and transfer
between categories by EUR 126.5 million.
Q1–Q4/2022 fair value change of investment properties
amounted to EUR -56.5 million (Q1–Q4/2021: EUR 48.6
million) mainly due to changes in yield requirements.
In addition, fair value change includes EUR -15.9
million Torvbyen fair value impact in Q4 as a result of a
partial closure of the center for structural damage. The
company recorded a total value increase of EUR 53.1
million (Q1–Q4/2021: EUR 106.1 million) and a total value
decrease of EUR 102.9 million (Q1–Q4/2021: EUR 45.7
million). In addition, the application of IFRS 16 standard
had an impact of EUR -6.8 million (Q1–Q4/2021: EUR
-11.8 million) to the fair value change of investment
properties during the January-December reporting
period.
External appraisers, CBRE (in Denmark, Estonia and
Norway) and JLL (in Finland and Sweden) measure
the fair values for the half-yearly report and annual
financial statements. Citycon measures the fair values
of the properties internally in the first and third quarter,
reflecting market views of external appraisers.
JLL’s and CBRE’s valuation statements are available on
Citycon’s website below Investors.
13
Financial statementsFinancial review Financial Review 2022
Acquisitions and divestments 2022
Location
Gross leasable
area, sq.m. Date Price, MEUR
Divestments
Portfolio of 2 centres 28 February 2022 145.4
Buskerud Shopping centre Krokstadelva, Norway 32,100
Magasinet Shopping centre Drammen, Norway 15,000
Portfolio of 2 centres 20 December 2022 120.8
Down Town Shopping centre Porsgrunn, Norway 36,700
Sjøsiden Shopping centre Horten, Norway 11,200
Divestments, total 95,000 266.2
Acquisitions
Barkarbystaden Residential asset Stockholm, Sweden 12,950 7 February 2022 69.5
1
Acquisitions, total 12,950 69.5
1
The transaction has been structured as a forward commitment, whereby Citycon made a deposit of EUR 6.6 million in April 2022 and will fund the remaining
purchase price, pro-rata, at the completion of two construction phases in Q1/2024 and Q2/2024. The closing of the transaction will be after the completion of
each phase with no additional obligations from Citycon before construction of each phase is complete.
Capital recycling
In 2022, Citycon continued its active capital recycling
and divested in total four non-core assets for
approximately EUR 266 million:
• In Q4/2022 Citycon sold two non-core centres in Norway
with price of approximately EUR 120.8 million. The
proceeds from the transaction were used to repay debt
and to further strengthen our investment grade balance
sheet. The transaction closed on 20 December 2022.
• In Q1/2022 Citycon sold two non-core centres in
Norway with price of approximately EUR 145.4 million,
in-line with IFRS book value. Transaction closed on 28
February 2022.
Additionally, Citycon signed on 7 February 2022 an
off-market, forward commitment to acquire newly
developed residential asset in Stockholm, Sweden for a
fixed price of EUR 69.5 million. An initial deposit of 6.6
million was made with the remainder of the purchase
price to be funded upon delivery in 2024. The brand-new
property will consist of over 200 well-appointed rental
and freehold apartments and is located in the growing
and dynamic neighbourhood of Barkarbystaden, in close
proximity to Citycon’s existing necessity-based assets in
Kista and Jakobsberg.
The transactions follow Citycon’s strategy to focus on
larger, grocery/municipal services-anchored, urban
hubs with a connection to transportation links, while also
providing further densification potential to add residential
units, offices and other complimentary uses.
Strengthening the balance sheet remains a key priority
and the company will continue to evaluate opportunistic
capital recycling actions going forward.
(Re)development projects
Further information on the company’s completed,
ongoing and planned (re)developments can be found on
page 34 in the Financial Review 2022.
(Re)development projects in progress on 31 December 2022
Location Area before/ after, sq.m.
Expected net
investment, MEUR
Actual net investment
by 31 December 2022,
MEUR Completion
Lippulaiva
residentials
Helsinki metropolitan
area, Finland -/18,000 90.5 58.7 2022–2024
Herkules, residentials
(50%) Skien, Norway -/7,600 28.0 8.4 2024
Barkarby, residentials Stockholm, Sweden -/12,950 69.5
1
6.6
1
2024
1
The transaction has been structured as a forward commitment, whereby Citycon made a deposit of EUR 6.6 million in April 2022 and will fund the remaining
purchase price, pro-rata, at the completion of two construction phases in Q1/2024 and Q2/2024. The closing of the transaction will be after the completion of
each phase with no additional obligations from Citycon before construction of each phase is complete.
Completed (re)development projects in 2022
Location Area before/ after, sq.m.
Expected net
investment, MEUR
Actual net investment
by 31 December 2022,
MEUR Completion
Lippulaiva shopping
centre
Helsinki metropolitan
area, Finland 19,200/44,300 369.0
1
368.5 Q1/2022
1
Expected gross investment is 425.4 MEUR with the proceeds from net rental income of Pikkulaiva, sale of additional building rights and metro & bus terminal
offsetting for a expected net investment of 369.0 MEUR. Actual gross investment by 31 December 2022 was 423.9 MEUR.
Capital expenditure
MEUR 2022 2021
Acquisitions of properties
1
6.3 -0.6
Acquisitions of and investments in joint ventures 0.4 29.2
Property development
2
165.7 191.0
Goodwill and other investments 4.6 4.5
Total capital expenditure incl. acquisitions 177.0 224.1
Capital expenditure by segment
Finland & Estonia 119.7 163.6
Norway 32.1 21.7
Sweden & Denmark 21.4 35.2
Group administration 3.9 3.6
Total capital expenditure incl. acquisitions 177.0 224.1
Divestments
3 4
292.0 265.3
1
Capital expenditure takes into account deduction in the purchase price calculations and FX rate changes.
2
Comprises mainly of investments in Lippulaiva.
3
Excluding transfers into ‘Investment properties held for sale’ -category.
4
Divestments in 2022 comprise of sale of four non-core centres in Norway and two companies included in Lippulaiva centre in Finland.
14
Financial statementsFinancial review Financial Review 2022
Key financing figures
MEUR 31 December 2022 31 December 2021
Fair value of debt MEUR 1,781.7 1,860.3
Interest-bearing liabilities, carrying value
1
MEUR 1,807.7 1,878.5
Available liquidity MEUR 577.7 583.7
Average loan maturity years 3.2 4.2
Loan to Value (LTV)
2
% 41.4 40,3
3
Interest cover ratio (financial covenant > 1.8) x 4.0 4.1
Net debt to total assets (financial covenant < 0.60) x 0.39 0.38
Solvency ratio (financial covenant < 0.65) x 0.40 0.39
Secured solvency ratio (financial covenant < 0.25) x 0.00 0.00
1
Including EUR 42.8 million (Q4/2021: EUR 43.2 million) IFRS 16 lease liabilities.
2
Hybrid bond treated as equity as according to IFRS. Excluding both right-of-use assets recognized as part of investment properties, as well as lease liabilities
pertaining to these right-of-use assets, which are based on IFRS 16 requirements.
3
LTV Q4/2021 changed due to correction related to presentation of IFRS 16 assets. Previously reported LTV for Q4/2021 was 40.7%.
Shareholders’ equity
Equity per share was EUR 13.75 (31 December 2021:
EUR 14.80). Paid equity return and translation losses
decreased equity per share.
At period-end, shareholders’ equity attributable to
parent company’s shareholders was EUR 1,618.8 million
(31 December 2021: EUR 1,800.1 million).
Financing
After the reporting period, Citycon executed a tender
offer of the 2024 notes and the two capital securities
issued in 2019 and 2021. In January the company
announced that it will repurchase an aggregate amount
of EUR 57.4 million of the principal amounts outstanding
on the three tendered securities.
In December, the company executed its last bond
repurchases in the open market, at a discount to par.
A total of EUR 4.0 million was repurchased of the 2024
notes.
In September, the company returned to repurchase
bonds in the open market, still at a discount. A total of
EUR 2.0 million was repurchased of the 2024 notes and
EUR 26.95 million of the 2027 notes. EUR 25.95 million
was executed during the end of Q3/2022 and EUR 3.0
million during the beginning of Q4/2022.
In June, the company continued to repurchase bonds at
a discount in the open market. A total of EUR 25 million
was repurchased of the 2024 notes and EUR 29.4
million of the 2027 notes. EUR 33.8 million was executed
during the end of Q2/2022 and EUR 20.6 million during
the beginning of Q3/2022.
In March, the company decided to deploy part of the
cash from the Norwegian asset sales to repurchase
bonds at an attractive price and strengthen its balance
sheet. In total, EUR 25 million of the company’s 2024
notes were repurchased in the open market, of which
EUR 4.7 million was executed during Q1/2022 and the
rest at the beginning of Q2/2022.
In February, Citycon announced that it had signed an
agreement to sell two non-core shopping centres in
Norway, Buskerud centre and Magasinet centre. The
gross purchase price for the assets was approximately
EUR 145.4 million and the transaction closed at the end
of February.
In January, Citycon finalised the share buy-back
programme launched in December to repurchase
500,000 of the company’s own shares. The buy-back
programme started on 20 December 2021 and ended on
10 January 2022. During this period, a total of 500,000
own shares were repurchased. The total amount used
for the repurchase was approximately EUR 3.49 million.
A total of 10,415 own shares held by the Company was
used for payment of rewards under the Company’s
share-based incentive plan to four key persons. The
rest of the repurchased shares, 489,585 shares, were
cancelled on 14 January 2022.
The Annual General Meeting authorized the Board
of Directors to decide quarterly in its discretion on
the distribution of equity repayment with an annual
maximum total amount of EUR 0.50 per share. The
equity repayment paid in March, June, September and
December was mainly financed by operative cash flow.
15
Financial statementsFinancial review Financial Review 2022
Interest-bearing debt
The fair value of interest-bearing debt decreased during
2022 by EUR 78.6 million to EUR 1,781.7 million, mainly
following repurchases of bonds and weakening of the
NOK currency rate. The carrying amount of interest-
bearing liabilities in the balance sheet was EUR 1,807.7
million including IFRS 16 liabilities of EUR 42.8 million.
The weighted average loan maturity decreased during
the quarter and stands at 3.2 years.
LTV (IFRS) decreased during the quarter to 41.4% due
to lower net debt following deleveraging with proceeds
from asset sales. LTV increased over the year (Q4/2021:
40.3%) mainly as a result of decreased property values
partially due to weakened NOK and SEK currency rates.
Citycon does not have any significant debt maturities
until 2024 when the credit facility matures in June and
the EUR 480 million unsecured senior notes mature in
October.
Tot a l
1,781.7
MEUR
Breakdown of loans
%
Bank loans
Bonds
Commercial papers
97.2%
2.8%
2023 2024 2025 2026 2027 2028
494
1
500
76
49
219
350
244
350
Debt maturities
MEUR
Bank loans 0.0
Bonds 1,732.5
Commercial papers 49.2
Undrawn committed credit facilities 500.0
1
EUR 14 million of the 2024 notes were repurchased
in January 2023, leaving an outstanding amount of
EUR 480 million.
Bond matures in October 2024
RCF matures in June 2024
Financial expenses key figures
MEUR 2022 2021
Financial expenses
1
MEUR -64.7 -62.0
Financial income
1
MEUR 16.7 7.1
Net financial expenses (IFRS) MEUR -48.0 -55.0
Direct net financial expenses (EPRA) MEUR -47.0 -46.8
Weighted average interest rate
2
% 2.43 2.47
Weighted average interest rate excluding derivatives % 2.57 2.48
Year-to-date weighted average interest rate
2
% 2.42 2.41
1
The foreign exchange differences are netted in the financial expenses
2
Including interest rate swaps and cross-currency swaps
Financial expenses
The direct net financial expenses (EPRA) was slightly
below last year mainly due to lower interest expenses
following debt repurchases.
Net financial expenses (IFRS) decreased considerably to
EUR 48.0 million (Q1–Q4/2021: EUR 55.0 million) mainly
due to indirect one-off net gains related to prepayment
of debt of EUR 8.1 million recorded during the year. In
the comparison period, the company recorded indirect
losses of EUR 7.3 million related to prepayment of debt.
In addition, an amount of EUR 9.2 million indirect losses
(Q1–Q4/2021: EUR 0.8 million loss) was booked related
to fair value changes of cross-currency swaps not under
hedge accounting.
The financial income mainly consisted of interest
income on a loan to Kista Galleria. The foreign exchange
differences are netted in financial expenses in the table
above.
The period-end weighted average interest rate was
2.43%.
Financial risk management
Citycon uses interest rate swaps to hedge the floating
interest rate risk exposure. According to the company’s
treasury policy, the currency net transaction risk
exposure with profit and loss impact is fully hedged
through currency forwards and cross-currency swaps
that convert EUR debt into SEK and NOK.
Changes in corporate management
Bret D. McLeod started as Citycon Oyj’s Chief Financial
Officer (CFO) on 1 January 2022.
16
Financial statementsFinancial review Financial Review 2022
Sustainability
Citycon’s strategy is to be a forerunner in sustainable
shopping centre management. Citycon’s sustainability
strategy was updated in 2017 and Citycon has set
ambitious targets that extend to 2030.
In its sustainability reporting, Citycon applies the GRI
Standards, European Public Real Estate Association
(EPRA) Best Practice Recommendations on
Sustainability Reporting (3rd Edition) and Citycon’s
own internal reporting principles (Criteria). Citycon’s
sustainability strategy, targets and measures are
described in detail in the upcoming Sustainability
Accounts 2022.
Citycon’s Annual and Sustainability Report 2021 was
awarded as one of the best within the industry. Citycon
received the EPRA Gold Award in the Sustainability
Best Practices series for the tenth year in a row. Citycon
has received a rating of AA in the MSCI ESG Ratings
assessment. Citycon also has the ISS-Oekom “Prime”
rating, awarded to companies that achieve the best ESG
scores among their sector peers.
Key environmental indicators 2022:
• Citycon’s total energy consumption (incl. electricity
consumption in common areas, heating and cooling)
amounted to 263 gigawatt hours (Q1–Q4/2021: 280
GWh). Shopping centre energy intensity (kWh/sq.m)
decreased by 2% compared to previous year.
• The carbon footprint totalled 5,108 thousand carbon
equivalent tonnes (Q1–Q4/2021: 10 605 tCO
2
e). The
carbon intensity (kgCO
2
e/sq.m) of shopping centres
decreased by 44% compared to previous year.
• The recycling rate in shopping centres remained at the
same level as the previous year and was 99%.
Citycon uses BREEAM In-Use to assess and develop the
sustainable management of its shopping centres. 66%
of Citycon’s shopping centres, measured by fair value,
had acquired the certification at period-end.
Disclosure according to the Taxonomy Regulation
Delegated Act:
Citycon’s sustainability and finance teams have
classified the company’s activities by mapping Citycon
group’s consolidated IFRS income statement accounts
based on whether they are covered by a NACE code
included in the Taxonomy. Based on this classification
97% of Citycon’s total turnover, 99% of capital
expenditure and 69% of operational expenditure is
derived from Taxonomy-eligible activities.
Citycon is not obliged to report information according
to the taxonomy regulation, and for that reason Citycon
does not report on the taxonomy alignment of the
company’s operations for the year 2022.
Risks and uncertainties
The most significant near-term risks and uncertainties
in Citycon’s business operations are associated with the
general development of the economy and consumer
confidence in the Nordic countries and Estonia, and
how this affects fair values, occupancy rates and rental
levels of the shopping centres and, thereby, Citycon’s
financial results. Increased competition locally or from
e-commerce might affect demand for retail premises,
which could lead to lower rental levels or increased
vacancy, especially outside capital city regions. Costs
of development projects could increase due to rising
construction costs or projects could be delayed due to
unforeseeable challenges. Rising interest rates could
also put pressure on investment yields, which could
potentially impact fair values. The war in Ukraine and
The AGM decisions and the minutes of the AGM are
available on the company’s website at
citycon.com/agm2022.
Extraordinary General Meeting 2022
Citycon’s Extraordinary General Meeting (EMG) held
on 8 December 2022 decided to amend Citycon’s
Articles of Association to enable holding a general
meeting completely without a meeting venue. Further
information available on the company’s website at
citycon.com/egm2022.
Board of Directors
Under the Articles of Association, the Board of Directors
of the company consists of a minimum of five and a
maximum of ten members, elected by the General
Meeting for a term of one year that will end at the close
of the following Annual General Meeting.
The AGM resolved the number of members of the Board
of Directors to be eight. Chaim Katzman, Yehuda (Judah)
L. Angster, F. Scott Ball, Zvi Gordon, Alexandre (Sandy)
Koifman, David Lukes, Per-Anders Ovin and Ljudmila
Popova were re-elected to the Board of Directors.
Chaim Katzman was the Chairman of the Board of
Directors in 2022 Alexandre (Sandy) Koifman and F.
Scott Ball were Vice Chairmen of the Board of Directors.
Auditor
Since 2006, the company’s auditor has been Ernst
& Young Oy, a firm of authorised public accountants,
which had designated Authorised Public Accountant
Antti Suominen to act as the responsible auditor of
Citycon in 2022.
the COVID-19 virus continue to pose risks to economic
health in Europe as well.
The main risks that can materially affect Citycon’s
business and financial results, along with the main risk
management actions, are presented in detail on pages
35–36 in the Financial Statements 2022, in Note 3.5
A) as well as on Citycon’s website in the Corporate
Governance section.
Legal proceedings
Certain lawsuits, claims and legal disputes based on
various grounds are pending against Citycon relating to
the company’s business operations. In the company’s
view, it is improbable that the outcome of these lawsuits,
claims and legal disputes will have a material impact on
the company’s financial position.
General meeting
Annual General Meeting 2022
Citycon’s Annual General Meeting 2022 (AGM) was
held in Espoo, Finland on 22 March 2022. The General
Meeting approved all the proposals made by the Board
of Directors to the General Meeting. The AGM adopted
the company’s Financial Statements and discharged the
members of the Board of Directors and the CEO from
liability for the financial year 2021 and decided to adopt
the Remuneration Report for the governing bodies.
The General Meeting decided that no dividend is
distributed by a resolution of the AGM and authorised
the Board of Directors to decide in its discretion on the
distribution of assets from the invested unrestricted
equity fund. Based on the authorisation, the maximum
amount of equity repayment to be distributed from
the invested unrestricted equity fund shall not exceed
EUR 0.50 per share. The authorisation is valid until the
opening of the next AGM.
17
Financial statementsFinancial review Financial Review 2022
Chief Executive Officer (CEO)
From 1 January 2019 onwards, F. Scott Ball has been
the company’s CEO. Mr Ball’s personal details, career
histories and positions of trust can be found on the
company’s website at citycon.com/management.
Information on the CEO’s executive contract and its
terms and conditions are available on pages 53–54 of
the Financial Statements.
Corporate governance statement
Citycon has published Citycon Group’s Corporate
Governance Statement 2022 as a separate report,
distinct from the Report by the Board of Directors.
The statement is prepared in accordance with the
recommendations of the Finnish Corporate Governance
Code 2020 and is available on the company’s website at
citycon.com/corporate-governance.
Shares, share capital and shareholders
The company has a single series of shares, with each
share entitling to one vote at a General Meeting of
shareholders. At the end of reporting period, the total
number of shares outstanding in the company was
168,008,940. The shares have no nominal value.
At the end of September 2022, Citycon had a total
of 28,817 registered shareholders (Q4/2021: 28,577
shareholders), of which 8 were account managers of
nominee-registered shares. Holders of the nominee-
registered shares held approximately 116.3 million
(Q4/2021: 116.2 million) shares, or 69.2% of shares and
voting rights in the company (Q4/2021: 69.0%).
Further information of the company’s stock listing,
trading volume, share price, market cap, share capital,
most significant registered shareholders, of the
distribution of ownership and of the issue-adjusted
average number of shares can be found on pages
37–38 of the Financial Review.
Dividend and equity repayment
Citycon’s equity repayments paid in 2022:
Shareholders 31 December 2022
% of shares and voting rights
Nominee-registered
shareholdings
(116.3 million shares)
Directly registered
shareholdings
(51.8 million shares)
69.2%
30.8%
Shares and share capital
MEUR 2022
Share capital at period-start MEUR 259.6
Share capital at period-end MEUR 259.6
Number of shares at period-start 168,498,525
Number of shares at period-end 168,008,940
Dividends and equity repayments paid on 31 December 2022
1
MEUR Record date Payment date EUR / share
Equity repayment Q1 24 March 2022 31 March 2022 0.125
Equity repayment Q2 23 June 2022 30 June 2022 0.125
Equity repayment Q3 23 September 2022 30 September 2022 0.125
Equity repayment Q4 15 December 2022 30 December 2022 0.125
Total 0.50
1
Board decision based on the authorisation issued by the AGM 2022.
18
Financial statementsFinancial review Financial Review 2022
Performance Share Plan 2020–2022
• On 23 March 2022, the company repurchased total
of 10,000 of its own shares and conveyed them on 25
March 2022 to one key person of the company.
Matching Share Plan 2018–2020
• On 23 March 2022, the company repurchased total
of 11,241 of its own shares and conveyed them on 25
March 2022 to three key persons of the company.
CFO Restricted Share Plan 2021–2024
• On 11 August 2022, the company repurchased total
of 7,500 of its own shares and conveyed them on 15
August 2022 to one key person of the company.
Additionally, the Board of Directors used two times
its authorisation to repurchase its own shares to
distribute surplus funds received from the divestment
of necessity-based retail centre Columbus to the
shareholders of Citycon:
Share buy-back program
On 17 December 2021, the Board of Directors of Citycon
decided to launch a buyback program. According to the
Board decision, the maximum number of shares to be
repurchased was 500,000 and the maximum amount to
be used for the repurchases was EUR 3.75 million. The
share repurchases started on 22 December 2021 and
ended on 10 January 2022.
During the share buy-back program, a total of 500,000
own shares were repurchased for an average price of
approximately EUR 6.97 per share. The total amount
used for the repurchase was approximately EUR 3.49
million. During Q1/2022 a total of 203,537 shares
were repurchased under the share buy-back program.
10,415 repurchased shares were conveyed to four key
employees in accordance with the Company’s share-
based incentive plans and the rest of the repurchased
shares, i.e., 489,585 Citycon shares, were cancelled on
14 January 2022.
Own shares
During the reporting period, the company held a total
of 528,741 of the company’s own shares of which
489,585 shares were cancelled and 39,156 shares were
conveyed to implement payments of rewards earned
under the company’s share plans as described in the
section Board authorisations. At the end of the period,
the company or its subsidiaries held no shares in the
company.
Flagging notices
Citycon received a flagging notifications (6 July and
12 July 2022) according to which G City’s (former
Gazit-Globe Ltd.) direct holding of shares in Citycon
has decreased below fifty (50) percent. The change
in ownership is due to the completion of a share
transfer under a share purchase agreement, as notified
in a previous flagging notification published on 28
December 2021, entered into by G City Ltd (former
Gazit-Globe Ltd.) and its wholly-owned subsidiary Gazit
Europe Netherlands BV. The completion of the share
transfers under the share purchase agreement will not
affect the aggregate total direct and indirect holdings of
G City Ltd.
Board authorisations
In addition to the above explained asset distribution
authorisation of the Board of Directors, the Board of
Directors of the company had two valid authorisations
at the period-end granted by the AGM held on 22 March
2022:
• The Board of Directors may decide on an issuance
of a maximum of 16 million shares or special rights
entitling to shares referred to in Chapter 10 Section 1
of the Finnish Companies Act, which corresponded to
approximately 9.52% of all the shares in the company
at the period-end. The authorisation is valid until the
close of the next AGM, however, no longer than until
30 June 2023.
• The Board of Directors may decide on the repurchase
and/or on the acceptance as pledge of the company’s
own shares in one or several tranches. The amount
of own shares to be repurchased and/or accepted
as pledge shall not exceed 30 million shares, which
corresponded to approximately 17.86% of all the
shares in the company at the period-end. The
authorisation is valid until the close of the next AGM,
however, no longer than until 30 June 2023.
During January – December 2022, the Board of
Directors used three times its authorisation to
repurchase its own shares and issue them by conveying
repurchased shares. The repurchases and conveyances
were made for payment of rewards earned under the
company’s share plans in accordance with the terms
and conditions of the plans:
Restricted Share Plan 2018–2020
• On 3 January 2022, the company repurchased total of
10,415 of its own shares and conveyed them on
4 January 2022 to four key persons of the company.
Incentive plans
Long-term Share-based Incentive Plans
Citycon has currently six long-term share-based
incentive plans for the Group key employees:
• CEO Restricted Share Plan 2021–2025
• CEO Option Plan 2022–2025
• CFO Restricted Share Plan 2021–2024
• Performance Share Plan 2020–2022 (Corporate
Management Committee excl. the CEO)
• Matching Share Plan 2022–2024 (Corporate
Management Committee excl. the CEO) and
• Restricted Share Plan 2020–2022 (Key employees,
excl. Corporate Management Committee)
The main terms of the long-term share-based incentive
plans are explained in the Note 1.6 on pages 54–55 of
the Financial Statements.
More information on the share-based incentive plans is
available on the company’s website at
citycon.com/remuneration.
19
Financial statementsFinancial review Financial Review 2022
Shares held by members of the board
of directors and by the company
management
The members of the Board of Directors of Citycon, the
CEO, the other Corporate Management Committee
members held a total of 173,144 company shares on 31
December 2022. These shareholdings represented 0.1%
of the company’s total shares and total voting rights.
Details of the shareholdings of the members of the
Board of Directors, the CEO and the other members of
the Corporate Management Committee are available on
the company’s website at
www.citycon.com/managers-holdings-shares.
Events after the reporting period
In January 2023, Citycon executed a tender offers of
outstanding notes due 2024 of Citycon Treasury B.V.
and capital securities issued by it in November 2019
and June 2021. On 16 January, Citycon announced that
it will accept for purchase EUR 57,393,000 in aggregate
principal amount of securities validly tendered pursuant
to the offers. The total purchase consideration for
securities validly tendered and accepted for purchase
pursuant to the Offers was EUR 41,429,025.08.
Helsinki, 16 February 2023
Board of Directors
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Financial statementsFinancial review Financial Review 2022
EPRA performance measures
EPRA (European Public Real Estate Association) is a
common interest group for listed real estate companies
in Europe. Citycon is an active member of EPRA.
EPRA’s objective is to encourage greater investment
in European listed real estate companies and strive
for ‘best practices’ in accounting, financial reporting
and corporate governance in order to provide high-
quality information to investors and to increase the
comparability of different companies. The best practices
also create a framework for discussion and decision-
making on the issues that determine the future of the
sector. In addition, EPRA publishes the FTSE EPRA/
NAREIT index in association with FTSE, which tracks
the performance of the largest European and North-
American listed real estate companies. Citycon is
included in the FTSE EPRA index, which increases
international interest towards Citycon as an investment.
Citycon applies the best practices policy
recommendations of EPRA for financial reporting and
also for sustainability reporting. This section in Citycon’s
financial statements presents the EPRA performance
measures and their calculations. For more information
about EPRA and EPRA’s best practice policies please
visit EPRA’s webpage: www.epra.com.
EPRA performance measures
Note 2022 2021 2020 2019 2018
EPRA Earnings, MEUR 1 122.6 124.4 136.6 145.6 143.5
Adjusted EPRA Earnings, MEUR
2
1 92.1 100.0 120.3 143.9 143.5
EPRA Earnings per share (basic), EUR
1
1 0.730 0.703 0.767 0.818 0.806
Adjusted EPRA Earnings per share (basic), EUR
1,2
1 0.548 0.565 0.676 0.809 0.806
EPRA NRV per share, EUR 2 11.01 12.15 11.48 12.45 13.13
EPRA NAV per share, EUR
1
2 - - 11.30 12.28 12.95
EPRA Cost Ratio (including direct vacancy costs), % 3 16.8 18.1 18.3 14.1 17.1
EPRA Cost Ratio (excluding direct vacancy costs), % 3 14.5 14.9 15.6 11.7 15.1
EPRA Net Initial Yield (NIY), % 4 5.3 5.2 5.4 5.3 5.2
EPRA 'topped-up' NIY, % 4 5.3 5.2 5.4 5.4 5.2
EPRA vacancy rate, % 5 5.5 6.6 6.1 4.5 3.7
1
Key ratios have been adjusted in the comparison periods to reflect the new number of shares after the reversed share split executed in March 2019.
2
The adjusted key figure includes hybrid bond coupons and amortized fees.
2018 2019 2020 2021 2022
EPRA NRV per share
EUR
13.13
12.45
11.48
12.15
11.01
2018 2019 2020 2021 2022
EPRA cost ratio
%
17.1
14.1
18.3
18.1
16.8
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Financial statementsFinancial review Financial Review 2022
1. EPRA earnings and EPRA earnings per share (basic)
EPRA Earnings presents the underlying operating performance of a real estate company excluding all so called non-
recurring items such as net fair value gains/losses on investment properties, profit/loss on disposals and other non-
recurring items. EPRA Earnings is especially important for investors who want to assess the extent to which dividends
are supported by recurring income.
2022 2021
MEUR
Average
number
of shares
(1,000)
per share,
EUR MEUR
Average
number
of shares
(1,000)
per share,
EUR
Earnings in IFRS Consolidated Income Statement 5.1 168,011 0.030 121.0 177,033 0.684
+/- Net fair value losses/gains on investment
property 56.5 168,011 0.337 -48.6 177,033 -0.274
-/+ Net gains/losses on disposal of investment
property 4.3 168,011 0.025 6.5 177,033 0.037
+/- Indirect other operating expenses 26.7 168,011 - 0.4 177,033 -
+ Early close-out costs of debt and financial
instruments -8.1 168,011 -0.048 7.3 177,033 0.041
-/+ Fair value gains/losses of financial instruments 9.2 168,011 0.055 0.8 177,033 0.005
+/- Indirect losses/gains of joint ventures and
associated companies 21.0 168,011 0.125 2.3 177,033 0.013
-/+ Change in deferred taxes arising from the items
above 8.0 168,011 0.048 34.6 177,033 0.195
+/- Non-controlling interest arising from the items
above 0.0 168,011 - - 177,033 -
EPRA Earnings (basic) 122.6 168,011 0.730 124.4 177,033 0.703
-/+ Hybrid bond coupons and amortized fees -30.5 168,011 -0.182 -24.3 177,033 -0.138
Adjusted EPRA Earnings (basic) 92.1 168,011 0.548 100.0 177,033 0.565
EPRA Earnings can also be calculated from the statement of comprehensive income from top to bottom. The EPRA
Earnings calculation is presented in the below table with this different method, which also presents the Direct
Operating profit.
2022 2021
MEUR
Average
number
of shares
(1,000)
per share,
EUR MEUR
Average
number
of shares
(1,000)
per share,
EUR
Net rental income (NRI) 203.6 168,011 1.212 202.3 177,033 1.143
Direct administrative expenses -28.7 168,011 -0.171 -26.1 177,033 -0.148
Direct other operating income and expenses 0.2 168,011 0.001 0.0 177,033 0.000
Direct Operating profit 175.2 168,011 1.043 176.1 177,033 0.995
Direct net financial income and expenses -47.0 168,011 -0.280 -46.8 177,033 -0.264
Direct share of profit/loss of joint ventures and
associated companies -3.6 168,011 -0.022 -4.0 177,033 -0.023
Direct current taxes -2.1 168,011 -0.013 -3.3 177,033 -0.019
Change in direct deferred taxes 0.2 168,011 0.001 2.4 177,033 0.013
Direct non-controlling interest 0.0 168,011 0.000 0.0 177,033 0.000
EPRA Earnings (basic) 122.6 168,011 0.730 124.4 177,033 0.703
Hybrid bond coupons and amortized fees -30.5 168,011 -0.182 -24.3 177,033 -0.138
Adjusted EPRA Earnings (basic) 92.1 168,011 0.548 100.0 177,033 0.565
EPRA Earnings was EUR 122.6 million and EPRA EPS was EUR 0.730.
EPRA earnings remained at previous year level despite significant amount of disposals made in 2021 and 2022.
2021 1 2 3 4 5 6 2022
Change in EPRA earnings
MEUR
0.3
-2.5
-0.2
0.4
1.3
-1.1
122.6
124.4
1 Net rental income
2 Direct net financial income and expenses
3 Direct administrative expenses
4 Direct other operating income and expenses
5 Direct current and deferred taxes
6 Other direct items
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Financial statementsFinancial review Financial Review 2022
2. EPRA net asset value metrics
EPRA NAV metrics present the fair value of net assets
of a real estate company. In October 2019, the European
Public Real Estate Association (‘EPRA’) published new
Best Practice Recommendations (‘BPR’) for financial
disclosures by listed real estate companies. The BPR
introduced three new measures of net asset value:
EPRA Net Reinstatement Value (NRV), Net Tangible
Assets (NTA), and Net Disposal Value (NDV), which
replaced previously reported measures EPRA NAV and
NNNAV. The metrics have been updated to better reflect
the development of real estate companies from passive
asset owners to active asset managers and capital
allocators and hence presents three different scenarios
from which the company can choose one as the most
representative.
The EPRA NRV scenario, aims to represent the value
required to rebuild the entity and assumes that no selling
of assets takes place. EPRA NRV intends to reflect the
fair value of a business on a going-concern basis, all
items arising from future disposals (e.g. deferred taxes
on disposals), the fair value of financial instruments
are excluded from EPRA NRV. The transfer tax cost to
rebuild the portfolio increases EPRA NRV.
The EPRA NTA is focused on reflecting a company’s
tangible assets and assumes that entities buy and
sell assets, thereby crystallising certain levels of
unavoidable deferred tax liability.
EPRA NDV aims to represent the shareholders’ value
under an orderly sale of business, where deferred tax,
financial instruments and certain other adjustments are
calculated to the full extent of their liability, net of any
resulting tax. EPRA NDV is a measure of the real estate
company’s “spot” fair value at the balance sheet date.
Spot fair value means that EPRA NDV reflects the fair
value of net assets of the company at a particular day
as opposed to EPRA NRV, which reflects the fair value
of net assets on a going-concern basis. However, EPRA
NDV is not a liquidation NAV as the fair values of assets
and liabilities are not based on a liquidation scenario.
Citycon considers EPRA NRV to be the most relevant
measure for its business. EPRA NRV is closest to
previously reported EPRA NAV. EPRA NRV will now be
Citycon’s primary measure of net asset value, replacing
the previously reported EPRA NAV and EPRA NAV per
share measures.
Closing share price of Citycon was 6.26 EUR per share
on 31 December 2022.
The tables below present calculation of the three new
EPRA net asset value measures NRV, NTA and NDV.
EPRA NRV per share decreased by EUR 1.14
to EUR 11.01 (12.15) mainly due to weaker NOK
and SEK currency rates that lowered equity
through translation losses. The impact of
weaker currency rates was EUR 0.79 per share.
EPRA Net Asset Value measures
31 December 2022 EPRA NRV EPRA NTA EPRA NDV
Equity attributable to parent company shareholders 1,618.8 1,618.8 1,618.8
Deferred taxes from the difference of fair value and fiscal value of investment properties
3
264.9 132.5 -
Fair value of financial instruments -1.9 -1.9 -
Goodwill as a result of deferred taxes -65.7 - -
Goodwill as per the consolidated balance sheet - -115.4 -115.4
Intangible assets as per the consolidated balance sheet - -11.0 -
The difference between the secondary market price and carrying value of bonds
1
- - 246.5
Real estate transfer taxes
2
34.2 - -
TOTAL 1,850.3 1,622.8 1,749.9
Number of ordinary shares at balance sheet date, million 168.0 168.0 168.0
Net Asset Value per share 11.01 9.66 10.42
31 December 2021
Equity attributable to parent company shareholders 1,800.1 1,800.1 1,800.1
Deferred taxes from the difference of fair value and fiscal value of investment properties
3
295.0 147.5 -
Fair value of financial instruments -0.2 -0.2 -
Goodwill as a result of deferred taxes -84.8 - -
Goodwill as per the consolidated balance sheet - -145.4 -145.4
Intangible assets as per the consolidated balance sheet - -7.6 -
The difference between the secondary market price and carrying value of bonds
1
- - -73.3
Real estate transfer taxes
2
32.7 - -
TOTAL 2,042.9 1,794.5 1,581.5
Number of ordinary shares at balance sheet date, million
4
168.2 168.2 168.2
Net Asset Value per share 12.15 10.67 9.40
1
When calculating the EPRA NDV in accordance with EPRA’s recommendations, the shareholders’ equity is adjusted using EPRA’s guidelines so that bonds
are valued based on secondary market prices. The difference between the secondary market price and the carrying value of the bonds was EUR 246.5 million
(secondary market price lower) as of 31 December 2022. In the comparison period 31 December 2021, the difference was EUR -73.3 million (secondary market
price higher). 31 December 2021 adjustment corrected retrospectively.
2
The real estate transfer tax adjustment in EPRA NRV calculation is based on the transfer tax cost for the buyer for share deal in Finland. Share deals are not
subject to transfer tax in other group operating countries.
3
In the EPRA NTA formula, 50% of the deferred tax liability related to investment property fair value is added back, according to EPRA guidelines.
4
Calculation updated in comparison period. Divided by number of shares at balance sheet date instead of average amount of shares during the reporting period.
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Financial statementsFinancial review Financial Review 2022
MEUR 2022 2021
Include:
Administrative expenses
1,2
28.7 26.1
Property operating expenses and other expenses from leasing operations less service charge
costs 70.3 68.9
Net service charge costs/fees 14.1 12.7
Management fees less actual/estimated profit element 0.0 -0.4
Other operating income/recharges intended to cover costs less any related profit -8.3 -8.1
Share of joint venture expenses 2.6 4.9
Exclude:
Ground rent costs -6.9 -5.2
Service charge costs recovered through rents but not separately invoiced -59.9 -55.8
Share of joint venture investment property depreciation, ground rent costs and service charge
costs recovered through rents but not separately invoiced -2.8 -2.1
EPRA Costs (including direct vacancy costs) (A) 37.8 41.0
Direct vacancy costs -5.2 -7.1
EPRA Costs (excluding direct vacancy costs) (B) 32.5 33.9
Gross rental income less ground rent costs 215.4 217.0
Add: share of joint ventures (Gross rental income less ground rent costs less service fees in GRI) 9.4 9.8
Gross Rental Income (C) 224.8 226.7
EPRA Cost Ratio (including direct vacancy costs) (A/C, %) 16.8 18.1
EPRA Cost Ratio (excluding direct vacancy costs) (B/C, %) 14.5 14.9
1
Administrative expenses are net of costs capitalised of EUR 4.7 million in 2022 and EUR 3.7 million in 2021. Citycon’s policy is to capitalise, for example, expenses
related to property development projects and major software development projects.
2
Expenses related to management and organizational changes EUR 0.5 million in 2021 are excluded from the administrative expenses.
EPRA Cost Ratio decreased to 16.8% (18.1%)
EPRA Cost Ratio (including direct vacancy costs) decreased to 16.8% (18.1%) and EPRA Cost Ratio (excluding
direct vacancy costs) decreased to 14.5% (14.9%) from previous year.
2021 1 2 3 4 5 2022
Change of net reinstatement value (EPRA NRV)
EUR
EPRA
NRV
EPRA
NRV
1 EPRA Earnings
2 Indirect result
3 Translation reserve
4 Dividends paid and equity return
5 Other
-0.50
-0.44
-0.88
0.73
-0.05
11.01
12.15
3. EPRA cost ratios
EPRA Cost Ratios reflect the relevant overhead
and operating costs of the business and provide a
recognized and understood reference point for analysis
of a company’s costs. The EPRA Cost Ratio (including
direct vacancy costs) includes all administrative and
operating expenses in the IFRS statements including
the share of joint ventures’ overheads and operating
expenses (net of any service fees). The EPRA Cost Ratio
(excluding direct vacancy costs) is calculated as above,
but with an adjustment to exclude vacancy costs. Both
EPRA Cost Ratios are calculated as a percentage of
Gross Rental Income less ground rent costs, including a
share of joint venture Gross Rental Income less ground
rent costs.
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Financial statementsFinancial review Financial Review 2022
4. EPRA net initial yield (NIY), % and EPRA ‘topped-up’ NIY, %
EPRA initial yields present property portfolio’s ability to generate rent.
EPRA NIY, % is calculated by dividing the net rental income for the completed property portfolio, based on the valid
lease portfolio on the balance sheet date, by the gross market value of the completed property portfolio. EPRA initial
yields calculation does not include Kista Galleria.
In EPRA ‘topped-up’ NIY, the net rental income is ‘topped-up’ to reflect rent after the expiry of lease incentives such as
rent free periods and rental discounts.
MEUR 31 December 2022 31 December 2021
Fair value of investment properties determined by the external appraiser 3,962.6 4,268.2
Less (re)development properties, unused building rights and properties which valuation is
based on the value of the building right -169.2 -437.0
Completed property portfolio 3,793.4 3,831.2
Plus the estimated purchasers' transaction costs 70.8 66.9
Gross value of completed property portfolio (A) 3,864.2 3,898.2
Annualised gross rents for completed property portfolio 270.4 270.8
Property portfolio's operating expenses -66.4 -69.3
Annualised net rents (B) 203.9 201.6
Plus the notional rent expiration of rent free periods or other lease incentives 1.1 1.0
Topped-up annualised net rents (C) 205.0 202.6
EPRA Net Initial Yield (NIY), % (B/A) 5.3 5.2
EPRA 'topped-up' NIY, % (C/A) 5.3 5.2
EPRA NIY and EPRA ‘TOPPED-UP’ NIY increased slightly
EPRA initial yields increased during the year mainly due to negative fair value development and increase in net
rental income. This was partly offset by completion of lower yielding Lippulaiva project and divestments of higher
yielding assets.
5. EPRA vacancy rate, %
The EPRA vacancy rate presents how much out of the full potential rental income is not received because of vacancy.
The EPRA vacancy rate is calculated by dividing the estimated rental value of vacant premises by the estimated rental
value of the whole property portfolio if all premises were fully leased. The EPRA vacancy rate is calculated using the
same principles as the economic occupancy rate, which Citycon also discloses.
MEUR 31 December 2022 31 December 2021
Annualised potential rental value of vacant premises 14.3 17.8
÷ Annualised potential rental value for the whole property portfolio 259.0 271.1
EPRA vacancy rate, % 5.5 6.6
EPRA vacancy rate decreased from last years’ level
The EPRA vacancy rate at the end of 2022 for the entire property portfolio was 5.5%. Vacancy decreased in all
operating countries reflecting the fast recovery of the portfolio.
6. Property related capex
2022 2021
Group
(excl. Joint
ventures)
Joint ventures
(proportionate
share) Total
Group
(excl. Joint
ventures)
Joint ventures
(proportionate
share) Total
Acquisitions 6.3 6.3 -0.6 -0.6
(Re)development 124.7 3.7 128.4 158.3 3.3 161.7
Investment properties
No incremental lettable space 16.7 16.7 17.0 17.0
Tenant incentives 20.1 20.1 8.8 8.8
Capitalised interest 4.3 4.3 6.9 6.9
Total capital expenditure
1
172.0 3.7 175.7 190.4 3.3 193.7
Conversion from accrual to cash basis 3.4 0.2 3.6 -1.1 0.0 -1.1
Total capital expenditure on cash basis
1
175.4 3.9 179.3 189.3 3.4 192.7
1
Includes only property related capex.
Capex disclosed in the table are categorised according to the new EPRA recommendations issued in October 2019.
The comparison period figures have also been presented accordingly. Investments include both income-producing and
maintenance capex.
25
Financial statementsFinancial review Financial Review 2022
7. EPRA LTV
31 December 2022
MEUR
Citycon group as
reported MEUR
Share of Joint
Ventures MEUR
Share of Material
Associates MEUR
Non-controlling
Interests MEUR
Combined
MEUR
Include
Borrowings from Financial Institutions - 109.2 - - 109.2
Commercial paper 49.2 - - - 49.2
Hybrids 691.5 - - - 691.5
Bond loans 1,715.7 - - - 1,715.7
Foreign currency derivatives -19.0 - - - -19.0
Net payables 9.3 4.3 - - 13.7
Exclude - -
Cash and cash equivalents 69.2 3.3 - - 72.5
Net Debt (a) 2,377.6 110.3 - - 2,487.8
Owner-occupied property 1.6 - - - 1.6
Investment properties at fair value 3,994.8 210.7 - - 4,205.5
Properties held for sale - - - - 0.0
Intangibles 11.0 - - - 11.0
Financial assets 115.7 - - - 115.7
Total Property Value (b) 4,123.2 210.7 - - 4,333.8
LTV (a/b) 57.7% 52.3% 57.4%
Most significant difference between EPRA LTV and IFRS LTV is the classification of hybrid bonds. In EPRA LTV hybrid bonds are presented as 100% debt whereas in IFRS LTV hybrid
bonds are presented as 100% equity. Credit agencies classify hybrid bonds as 50% debt and 50% equity.
In addition, EPRA LTV includes company’s share of joint venture’s selected assets and liabilities where as IFRS LTV excludes them.
26
Financial statementsFinancial review Financial Review 2022
8. EPRA earnings for five years
MEUR 2022 2021 2020 2019 2018
Earnings in IFRS Consolidated Income Statement 5.1 121.0 -28.0 8.9 16.6
+/- Net fair value losses/gains on investment property 56.5 -48.6 146.9 121.9 72.5
-/+ Net gains/losses on disposal of investment property 4.3 6.5 -0.7 -1.5 0.2
-/+ Indirect other operating expenses 26.7 0.4 - 0.0 10.3
-/+ Fair value gains/losses of financial instruments and early close-out
costs of debt and financial instruments 1.0 8.2 5.8 5.3 20.3
+/- Indirect losses/gains of joint ventures and associated companies 21.0 2.3 27.2 19.5 17.9
-/+ Change in deferred taxes arising from the items above 8.0 34.6 -14.7 -8.5 5.7
+/- Non-controlling interest arising from the items above 0.0 - - - 0.0
EPRA Earnings (basic) 122.6 124.4 136.6 145.6 143.5
-/+ Hybrid bond coupons and amortized fees -30.5 -24.3 -16.2 -1.7 -
Adjusted EPRA Earnings (basic) 92.1 100.0 120.3 143.9 143.5
Issue-adjusted average number of shares, million
1
168,011 177,033 177,998 177,997 177,997
EPRA Earnings per share (basic), EUR
1
0.730 0.703 0.767 0.818 0.806
Adjusted EPRA Earnings per share (basic), EUR
1
0.548 0.565 0.676 0.809 0.806
1
Key ratios have been adjusted in the comparison periods to reflect the new number of shares after the reversed share split executed in March 2019.
EPRA Earnings can also be calculated from the consolidated income statement from top to bottom. The EPRA
Earnings calculation is presented in the below table with this different method, which also presents the Direct
Operating profit.
MEUR 2022 2021 2020 2019 2018
Net rental income 203.6 202.3 205.4 217.4 214.9
Direct administrative expenses -28.7 -26.1 -25.9 -26.8 -28.0
Direct other operating income and expenses 0.2 0.0 0.9 2.8 0.8
Direct operating profit 175.2 176.1 180.4 193.5 187.6
Direct net financial income and expenses -47.0 -46.8 -46.0 -48.9 -50.1
Direct share of profit/loss of joint ventures and associated companies -3.6 -4.0 -0.8 2.8 5.3
Direct current taxes -2.1 -3.3 -1.8 -2.0 -0.2
Change in direct deferred taxes 0.2 2.4 4.8 0.1 0.9
Direct non-controlling interest 0.0 0.0 -0.1 0.0 0.0
EPRA Earnings 122.6 124.4 136.6 145.6 143.5
Hybrid bond coupons and amortized fees -30.5 -24.3 -16.2 -1.7 -
Adjusted EPRA Earnings 92.1 100.0 120.3 143.9 143.5
Issue-adjusted average number of shares, million
1
168,011 177,033 177,998 177,997 177,997
EPRA Earnings per share (basic), EUR
1
0.730 0.703 0.767 0.818 0.806
Adjusted EPRA Earnings per share (basic), EUR
1
0.548 0.565 0.676 0.809 0.806
1
Key ratios have been adjusted in the comparison periods to reflect the new number of shares after the reversed share split executed in March 2019.
27
Financial statementsFinancial review Financial Review 2022
Operational key figures
Shopping Centres
1
Location GLA, sq.m. Retail GLA, sq.m.
Economic
occupancy rate, %
31 December 2022 Year of acquisition
Year built/latest
year of renovation
Finland & Estonia
Shopping centres, Helsinki area
Heikintori Espoo 9,300 7,000 - 1998–2021 1968
Isomyyri Vantaa 11,700 8,400 - 1999 1987
Iso Omena Espoo 101,900 84,600 98.8 2007, 2014 2001/2016, 2017
Lippulaiva Espoo 56,400 37,800 91.2 2022 2022
Myyrmanni Vantaa 41,500 31,400 97.9 1999, 2006 1994/2016
Shopping centres, other areas in Finland
IsoKarhu Pori 15,100 12,900 73.1 1999 1972/2014
IsoKristiina Lappeenranta 16,950 12,700 95.4 1999, 2005 1987, 1993/2015
Koskikeskus Tampere 35,100 30,100 95.3 1999, 2003 1988/2012
Trio Lahti 46,200 27,500 86.3 1999, 2007 1977, 1992/2010
Shopping centres, Estonia
Kristiine Keskus Tallinn 45,100 43,800 99.5 2011 1999/2019
Rocca al Mare Tallinn 57,800 56,800 92.9 2005 1998/2009
Shopping centres, total - 437,050 353,000 95.5 - -
Other properties, total - 2,240 800 - - -
Finland & Estonia, total - 439,290 353,800 95.5 - -
Norway
Shopping centres, Oslo area
Kolbotn Torg Kolbotn 18,600 16,400 99.8 2015 2008
Liertoppen Kjøpesenter Lierskogen 26,700 24,600 96.8 2015 1987/1990
Linderud Senter Oslo 22,300 16,400 98.1 2015 1967/2009
Stovner Senter Oslo 43,100 31,900 90.2 2020 1975/2016
Trekanten Asker 24,000 16,900 98.2 2015 1997/2008
28
Financial statementsFinancial review Financial Review 2022
Location GLA, sq.m. Retail GLA, sq.m.
Economic
occupancy rate, %
31 December 2022 Year of acquisition
Year built/latest
year of renovation
Shopping centres, other areas in Norway
Herkules Skien 50,500 44,700 97.7 2015 1969/2013
Kilden Kjøpesenter Stavanger 23,300 19,500 94.9 2015 1989/2015
Kongssenteret Kongsvinger 17,900 15,700 80.2 2015 2001/2016
Kremmertorget Elverum 20,200 17,100 82.4 2015 1979/2012
Oasen Kjøpesenter Fyllingsdalen 50,300 27,000 92.0 2015 1971/2014
Solsiden
2
Trondheim 14,500 13,700 99.9 2015 2000
Stopp Tune Sarpsborg 13,400 12,600 99.5 2015 1993
Storbyen Sarpsborg 25,600 24,000 78.4 2015 1999/2015
Torvbyen Fredrikstad 14,200 12,000 92.3 2020 1988/2012
Norway, total - 364,600 292,500 93.4 - -
Sweden & Denmark
Shopping centres, Stockholm area
Jakobsbergs Centrum Järfalla 42,500 26,000 87.8 2006 1959/1993
Kista Galleria, 50% Stockholm 46,350 29,100 83.0 2013 1977,2002/ 2014
Liljeholmstorget Galleria Stockholm 41,200 27,200 98.7 2006 1973/2009
Åkersberga Centrum Åkersberga 27,900 22,900 93.0 2005, 2015 1985/2011
Shopping centres, Gothenburg area
Stenungstorg Centrum Stenungsund 35,500 22,100 89.9 2006 1967/2016
Mölndals Galleria Mölndal 26,300 24,200 92.9 2014/2018 2018
Shopping centres, Denmark
Albertslund Centrum Copenhagen 17,000 12,700 92.9 2012 1965/2015
Strædet Køge 19,100 17,300 96.8 2017, 2018 2017, 2018
Shopping centres, total - 255,850 181,500 91.7 - -
Other properties, total - - - - - -
Sweden & Denmark, total - 255,850 181,500 91.7 - -
Total - 1,059,740 827,800 93.9 - -
1
Including Kista Galleria 50%.
2
Rented property.
29
Financial statementsFinancial review Financial Review 2022
Fair value
No. of properties Fair value, EUR million
Fair value change,
EUR million Average yield requirement, %
Average market rent,
EUR/sq.m./month
31 December 2022 31 December 2022 31 December 2021 2022 31 December 2022 31 December 2021 31 December 2022
Shopping centres, Finland & Estonia 11 2,038.1 1,955.9 -15.7 - - -
Other properties, Finland & Estonia 1 3.8 3.5 0.2 - - -
Finland & Estonia, total 12 2,041.8 1,959.3 -15.4 5.4 5.3 28.6
Shopping centres, Norway 13 1,198.1 1,389.9 -26.5 - - -
Rented shopping centres, Norway
1
1 - - - - - -
Norway, total 14 1,198.1 1,389.9 -26.5 5.7 5.4 21.3
Shopping centres, Sweden & Denmark 7 748.7 794.3 -7.8 - - -
Other properties, Sweden & Denmark 1 6.2 - - - - -
Sweden & Denmark, total 8 754.9 794.3 -7.8 5.6 5.5 26.2
Shopping centres, total 32 3,984.8 4,140.1 -50.0 - - -
Other properties, total 2 10.0 3.5 0.2 - - -
Investment properties, total 34 3,994.8 4,143.5 -49.8 5.5 5.4 26.0
Right-of-use assets classified as investment properties (IFRS 16) - 45.3 45.7 -6.8 - - -
Investment properties in the statement of financial position, total 34 4,040.1 4,189.2 -56.5 5.5 5.4 26.0
Kista Galleria, 50% 1 210.7 252.2 -25.5 - - -
Investment properties in the statement of financial position and Kista Galleria (50%), total 35 4,250.8 4,441.4 -82.0 5.5 5.4 26.1
1
Value of rented properties is recognised within IFRS 16 investment properties based on IFRS rules.
30
Financial statementsFinancial review Financial Review 2022
Like-for-like portfolio
No. of properties Fair value, EUR million
Fair value change,
EUR million Average yield requirement, %
Average market rent,
EUR/sq.m./month
31 December 2022 31 December 2022 31 December 2021 2022 31 December 2022 31 December 2021 31 December 2022
Shopping centres, Finland & Estonia 5 1,308.5 1266.9 19.7 - - -
Other properties, Finland & Estonia - - - - - - -
Finland & Estonia, total 5 1308.5 1266.9 19.7 5.5 5.4 30.1
Shopping centres, Norway 11 958.0 997.2 -13.0 - - -
Rented shopping centres, Norway
1
1 - - - - - -
Norway, total 12 958.0 997.2 -13.0 5.7 5.3 21.1
Shopping centres, Sweden & Denmark 5 591.8 618.0 3.9 - - -
Other properties, Sweden & Denmark - - - - - - -
Sweden & Denmark, total 5 591.8 618.0 3.9 5.4 5.3 28.6
Shopping centres, total 22 2858.3 2,882.1 10.6 - - -
Other properties, total - - - - - - -
Like-for-like properties, total 22 2,858.3 2,882.1 10.6 5.5 5.4 26.8
Right-of-use assets classified as like-for-like properties (IFRS 16) - 41.7 42.8 -5.7 - - -
Like-for-like properties in the statement of financial position, total 22 2,900.0 2,924.9 4.8 5.5 5.4 26.8
1
Value of rented properties is recognised within IFRS 16 investment properties based on IFRS rules.
31
Financial statementsFinancial review Financial Review 2022
Average rent
Average remaining length
of lease agreements, years
Average rent,
EUR/sq.m./month
31 December 2022 31 December 2022
Finland & Estonia 4.2 25.8
Norway 2.7 21.9
Sweden & Denmark 2.6 22.5
Total 3.4 23.7
Rental income by business units
Gross rental income, EUR million Net rental income, EUR million
2022 2021 2022 2021
Finland & Estonia 96.5 90.7 89.1 85.2
Norway 83.0 85.8 78.9 77.8
Sweden & Denmark 42.8 45.7 36.0 39.2
Other - - -0.3 -
Investment properties, total 222.3 222.2 203.6 202.3
Kista Galleria, 50% 9.4 9.8 6.8 6.4
Investment properties and Kista Galleria (50%), total 231.7 231.9 210.5 208.7
Top ten tenants
Proportion of rental income based on valid rent roll at 31 December 2022, %
S Group 5.4%
Kesko Group 4.8%
Varner Group 3.1%
NorgesGruppen 2.4%
ICA Group 2.0%
Coop 1.6%
Stockmann Group 1.6%
H&M 1.5%
Clas Ohlson 1.5%
KappAhl 1.4%
Total 25.2%
Leasing activity, investment properties
Number of lease
agreements
Leased area,
sq.m.
Average rent,
EUR/sq.m./
month
31 December 2021 3,326 941,652 22.6
Leases started 1,093 262,772 21.6
Leases ended 1,228 302,490 21.1
Acquisitions - - -
Other changes - 108 -
31 December 2022 3,191 902,042 23.7
Rental Income by Category, %
Finland &
Estonia Norway
Sweden &
Denmark Total
Fashion and Accessories 18.8 23.3 19.0 20.4
Groceries 24.0 12.3 17.9 18.8
Home and Sporting Goods 15.5 26.3 12.5 18.6
Services and Offices 14.7 14.8 18.6 15.5
Cafes and Restaurants 11.5 7.2 11.4 10.0
Cosmetics and Pharmacies 7.0 10.1 9.6 8.5
Wellness 2.9 4.6 7.5 4.4
Specialty Stores 2.5 1.3 1.4 1.9
Leisure 1.5 0.2 1.1 1.0
Residentials and Hotels 1.5 0.0 1.1 0.9
Total 100.0 100.0 100.0 100.0
32
Financial statementsFinancial review Financial Review 2022
Citycon’s five largest properties
1
Average rent,
EUR/sq.m./
month
Gross rental
income,
EUR million
Net rental
income,
EUR million
Fair
value,
EUR million
Fair value
change,
EUR million
31 December
2022 2022 2022
31 December
2022 2022
Iso Omena 35.3 34.9 33.5 785.2 28.1
Lippulaiva 27.5 9.9 8.7 424.7 -28.2
Liljeholmstorget Galleria 34.9 14.9 14.3 322.4 3.5
Oasen Kjøpesenter 25.4 11.0 10.3 207.5 0.2
Rocca Al Mare 25.7 12.6 11.6 186.6 0.4
Five largest properties, total 30.7 83.3 78.5 1,926.4 4.0
1
Excluding Kista Galleria.
33
Financial statementsFinancial review Financial Review 2022
(Re)development projects in progress
On 31 December 2022
Location Area before/after, sq.m.
Expected gross investment,
MEUR
Actual gross investment by
31 December 2022, MEUR Completion
Lippulaiva residentials Helsinki metropolitan area, Finland -/18,000 90.5 58.7 2022–2024
Herkules, residentials (50%) Skien, Norway -/7,600 28.0 8.4 2024
Barkarby, residentials Stockholm, Sweden -/12,950 69.5
1
6.6
1
2024
1
The transaction has been structured as a forward commitment, whereby Citycon made a deposit of EUR 6.6 million in April 2022 and will fund the remaining purchase price, pro-rata, at the completion of two construction phases in Q1/2024 and
Q2/2024. The closing of the transaction will be after the completion of each phase with no additional obligations from Citycon before construction of each phase is complete.
Completed (re)development projects on Q1–Q4/2022
Location Area before/after, sq.m. Expected investment, MEUR
Actual investment by
31 December 2022, MEUR Completion
Lippulaiva shopping centre Helsinki metropolitan area, Finland 19,200/44,300 369.0
1
368.5 Q1/2022
1
Expected gross investment is 425.4 MEUR with the proceeds from net rental income of Pikkulaiva, sale of additional building rights and metro & bus terminal offsetting for a expected net investment of 369.0 MEUR.
Actual gross investment by 31 December 2022 was 423.9 MEUR.
Potential (re)development projects (non committed)
Area before/after, sq.m.
Liljeholmstorget Galleria Stockholm, Sweden 40,500/90,000 Extension possibility of the shopping centre to meet the strong demand for more retail, office/
healthcare and services including culture and library, entertainment and food, all directly connected
to the metro station and bus terminal. Plans also include creating building rights for residentials.
Stenungstorg Steungssund, Sweden 30,400/50,900 The plan is to tranform the current shopping centre area into a modern city center and to create a
urban hub with a mix of residential areas, hotel, retail and services.
Trekanten Oslo, Norway 23,800/45,000 Extension possibility of the shopping centre with the main objective to increase the offering of shops
and services as well as create more visible and inviting entrances and improved circulation. Plans
also include adding residential, offices, healthcare and sports facilities on top of the centre.
Oasen Kjøpesenter (phase II) Bergen, Norway 56,800/78,800 A residential development project which includes opportunity to build several residential towers in
connection with the existing shopping centre.
Isomyyri Vantaa, Finland 11,650/27,800 Aim to develop a retail centre on an urban city block. The project includes new residential buildings
and demolishing the present building. Retail, commercial premises and services are planned to be
located on the street level of the new residentials. Includes also potential for offices.
34
Financial statementsFinancial review Financial Review 2022
Risk and risk management
The objective of Citycon’s risk management is to
ensure that the business targets are achieved by
identifying, assessing and monitoring key risks
which may threaten these targets, and to the extent
possible, avoid, transfer or mitigate these risks.
Risk management principles
Citycon is exposed to various risks through the normal
course of its activities. No business can be conducted
without accepting a certain risk level, and expected
gains are to be assessed against the involved risks.
Successful risk management implemented in the
business processes decreases the likelihood of risk
realization and mitigates the negative effects of
realised risk. Many of the risks and threats have not only
potential negative effects, but could also develop in a
favourable manner, or if effective proactive measures
are taken, be turned into opportunities for Citycon.
The Board of Directors determines Citycon’s strategic
direction and is jointly with the Management Committee
responsible for the long term and overall management
of strategic risks. The operational risks, financial risks
and hazard risks are managed in the various functions
as a part of operational management. Each function
has a dedicated person who is the owner of the risks in
that area and also responsible for the reporting of the
risks, the mitigation plans and the follow-up on their
implementation.
Risk reporting
The risk management and reporting process involves
identifying, assessing, quantifying, mitigating and
monitoring risks in all main business operations and
processes. The process also includes evaluation of
existing, and the planning of new, risk mitigation plans
for the identified risks in order to continuously improve
risk management processes.
The risk reporting process gathers data on risks and
the respective mitigation plans into one group-wide
risk register. A Risk steering committee is responsible
for the risk reporting process and evaluates which risks
to present to Citycon’s Board of Directors to facilitate
discussion and inform about the major risks in the
company. This is done during the budgeting process so
that the risks are linked to the annual targets. In order
to evaluate the importance of each risk and to improve
the comparativeness, an estimate of the loss associated
with each risk is determined together with the
probability of risk realization. The realised risks during
the previous year are also estimated and reported.
Identify
Assess &
quantify
Create
mitigation
plans
Reports risk
and mitigation
plans to the
board
Monitor
Insurances
To transfer certain operational and hazard risks, Citycon
maintains a comprehensive insurance coverage to cover
damages, claims and liabilities potentially arising from
the Group’s business. The properties are insured under
the property damage policy to their full reconstruction
value, including business interruption insurance and
third-party liability insurance. Citycon also have other
customary insurance policies.
Board of Directors
Risk Report
Risk management
as part of continuous operational management
in Management Committee
• Operations
• Leasing
• Business development
• Property transactions
• Property development
• Reporting and accounting
• Property valuations
Business operations and functions
• Tax
• Funding
• Financial risk management
• Communication and IR
• Legal
• IT
• HR
Internal auditInternal control
35
Financial statementsFinancial review Financial Review 2022
Risk and impact Risk management measures
Leasing • The economic development in Citycon’s operating countries impacts consumer confidence which could affect demand for
retail premises. This may lead to lower rental levels or increased vacancy. It could also increase the risks for credit losses or
decrease turnover based rental income.
• Continued high inflation environment and increased energy costs could affect negatively to consumer purchase power and
increase the risk of tenant bankruptcies and weaken tenant’s capability to pay rent which could increase Citycon’s vacancy and
weaken results.
• The growing online retailing that affects customer behaviour, or increased local competition may affect demand for retail
premises and put pressure on rental levels or increase vacancy, especially in less urban locations.
• Citycon’s strategy to focus on grocery anchored, urban shopping centres connected to public transportation with necessity-driven
retail has proven to be a recession proof business model with steady cash flows, occupancy and low credit losses also during a
downturn. This strategy also decreases the negative effects of the increasing online retailing.
• The fact that most of the company’s assets are in AAA/AA+ rated countries decreases the risk of a major downturn affecting the
retail sector.
• Citycon is continuously following and analysing tenants to identify risk tenants, and requires a rent collateral.
• Tenant diversification has improved considerably through focused leasing efforts and through pan-Nordic strategy and the share
of risk tenants has actively been decreased.
Property
Development
& transactions
• Increased costs in development projects due to rising construction costs or delays due to unforeseeable challenges.
• Reduced demand for new retail space could result in a low occupancy rate or lower than planned rent levels in new premises.
• Planned divestments of non-core properties could be delayed due to relatively low liquidity for secondary assets
• Construction costs are managed through competitive tendering, careful project monitoring of costs and by entering into contracts
with price caps when appropriate.
• Leasing risks are minimised by having strict pre-leasing requirements prior to project start, by signing agreements with key anchor
tenants at an early stage and by carrying out developments in proven retail locations with strong and growing demographics.
• Maintaining relatively low level of development exposure and keeping no landbank.
Operations • A major accident, system failure, or terrorist incident could threaten the safety of shoppers and retailers, leading to loss of
consumer confidence and thereby loss of income and extra costs.
• Risk of increased operating cost for e.g. maintenance, energy or security. In some lease agreements the rent paid by the
lessee is not affected by changed operating expenses, and a rise in operating expenses higher than inflation would decrease
the profitability. Also, when the higher costs can be passed to tenants, rising operating expenses may reduce tenants’ rental
payment capacity.
• Governmental restrictions due to pandemic could threaten footfall and tenants’ ability to conduct business.
• Risk of accidents and incidents mitigated by adequate security plans and incident procedures supported by crisis case exercises
for personnel.
• Comprehensive insurance coverage.
• Citycon tries to minimize the impact of rising operating expenses by lease contracts with specified rent components when possible
and charging tenants based on actual operating costs.
• Efficient centralized procurement, frame contracts with service providers and suppliers, cost monitoring and cost benchmarking
between shopping centres.
• To mitigate the risk of energy price hikes, electricity prices are fixed according to a hedging policy, and energy efficiency actions
have been implemented
Property
values
• The value of the properties can decrease for a number of reasons: a weaker economic environment impacting consumer
purchase power, changes in -competition and consumer behaviour towards internet shopping, reduced availability and higher
cost of financing and the relative attractiveness of other asset classes. The changes may lead to higher yield requirements,
decreased market rents and increased vacancy rates.
• While many of the factors affecting property values cannot be influenced, Citycon seeks to impact the fair market value through
active shopping centre management and optimising the profitability of its centres.
• Citycon’s strategy to focus on urban mixed-use centres with necessity-driven retail and services in strong and growing locations
results in relatively stable property valuations throughout the economic cycle.
• Citycon’s presence in five highly rated countries gives country risk diversification and decreases the volatility of the total property
values
Environment • Environmental concerns, customer expectations or legislation might restrict or impact Citycon’s business, land use and
construction.
• Risks associated with e.g. climate change might affect Citycon’s business environment. For example, extreme weather
conditions and regulation implemented to mitigate and adapt to climate change can increase energy, maintenance and
construction costs.
• Environmental impact assessments are conducted in connection with major projects.
• Ensuring the environmental compliance of our buildings through energy investments, internal management practices, green
energy purchase and production as well as external standards and certifications.
People • An expert organisation of Citycon’s nature relies heavily on its personnel for success, and therefore it is crucial to attract and
retain the right people, develop competencies and ensure clear roles and targets
• Citycon sees good leadership as essential to reduce personnel related risks and places great emphasis on target-setting and
performance management, competence development, career advancement, and commitment of key employees.
Financing • Both bank and bond financing have been available for Citycon, but willingness to lend at competitive terms could decline due to
credit rating downgrades, turmoil in financial markets, tightening regulation or other reasons, which could affect the availability
or cost of debt financing
• Interest rates continue to be historically low and will inevitably increase over time
• Citycon has a conservative but active financing policy, with a focus on long-term financing, a solid balance sheet and keeping
70–90% of debt tied to fixed interest rates to reduce the effects of increased interest rates.
• Investment grade credit ratings by Standard & Poor’s (BBB-) and Moody’s (Baa3) supports the availability and cost of financing.
Several long-term bond issues have reduced the refinancing risk and dependency on bank financing.
36
Financial statementsFinancial review Financial Review 2022
Shares and shareholders
Listing
Market place Nasdaq Helsinki
Listed since 1988
Trading currency euro
Segment Large Cap
Sector Financials
Sub-industry Real Estate Operating Companies
Trading code CTY1S
ISIN code FI4000369947
Shares and share capital
Citycon Oyj’s shares are listed on Nasdaq Helsinki.
Citycon has one series of shares and each share entitles
its holder to one vote at the General Meeting and to an
equal dividend. The shares have no nominal value.
At year-end 2022, Citycon’s total number of shares was
168,008,940. The market capitalisation of Citycon at the
end of 2022 was EUR 1.1 billion based on the stock price
of EUR 6.26.
In 2022, approximately 84.4 million Citycon shares
were traded on the Helsinki Stock Exchange. The
daily average trading volume was 333,527 shares,
representing a daily average turnover of approximately
EUR 2.3 million.
Shareholders
The number of registered shareholders at year-end
2022 was 28,817 (28,577). Shares owned by nominee-
registered parties equaled 69.2% at year-end 2022
(69.0%). Citycon is one of the companies on the Helsinki
Stock Exchange with the most international ownership
base.
Largest shareholders
Citycon’s largest shareholders according to Euroclear
Finland are listed in the table below.
In total, G City Ltd. and its wholly-owned subsidiary
Gazit Europe Netherlands own 52.12% of the total
shares and votes in the company (87,559,016 shares
as of 31 December 2022). Their shareholdings are
mostly nominee-registered. The above-mentioned
shareholdings include their direct ownership mentioned
on the table above.
Dividend payout
The Board of Directors proposes to the AGM that
the Board of Directors be authorized to decide in its
discretion on the distribution of assets from the invested
unrestricted equity fund in the manner set forth below.
Based on this authorization, the maximum total amount
of equity repayment distributed from the invested
unrestricted equity fund shall not exceed EUR 0.50
per share. Based on the current total number of issued
Share price and trading
2022 2021 2020 2019 2018
Number of shares traded
1
1,000 x 84,382 94,293 68,046 28,320 49,253
Stock turnover % 50.2 56.0 38.2 15.9 27.7
Share price, high
1
EUR 7.57 8.18 9.99 10.08 11.24
Share price, low
1
EUR 5.96 6.67 5.22 8.10 7.98
Share price, average
1
EUR 6.81 7.37 7.19 9.18 9.30
Share price, closing
1
EUR 6.26 7.00 7.93 9.37 8.08
Market capitalisation, period-end MEUR 1050.90 1179.50 1,411.53 1,666.96 1,437.34
Number of shares, period-end 1,000 x 168,009 168,499 177,999 177,999 889,993
1
Comparative figures adjusted to reflect the reverse split on March 18, 2019.
8
7
6
5
Share price and volume
Number of shares, thousands
Citycon share price
Citycon share volume
1,400
1,200
1,000
800
600
400
200
0
January 2022 December 2022
EUR
37
Financial statementsFinancial review Financial Review 2022
Major shareholders 31 December 2022
In total, G City Ltd. (former Gazit-Globe Ltd.) and its
wholly-owned subsidiary Gazit Europe Netherlands
own 52.12% of the total shares and votes in the
company (87,559,016 shares as of 31 December 2022).
Their shareholdings are mostly nominee-registered.
The above-mentioned shareholdings include their
direct ownership mentioned on the list below. More
information on ownership of G City Ltd and Gazit Europe
Netherlands BV is available on company’s website
citycon.com/investors/major-shareholders
Major shareholders 31 December 2022
Shares %
Ilmarinen Mutual Pension Insurance Company 12,694,139 7.56
The State Pension Fund 1,200,000 0.71
OP-Henkivakuutus Ltd. 884,422 0.53
Zeroman Oy 736,666 0.44
Nordea Life Assurance Finland Ltd. 639,027 0.38
Elo Mutual Pension Insurance Company 637,000 0.38
Pakkanen Mikko Pertti Juhani 500,000 0.30
G City Ltd
1
382,174 0.23
Mandatum Life Insurance Company Ltd. 380,345 0.23
Suomalaisen Kirjallisuuden Seura Ry 278,800 0.17
10 largets shareholders, total 18,332,573 10.91
Nominee-registered shares 116,257,907 69.20
Others 33,418,460 19.89
Total 168,008,940 100
1
Includes non-nominee-registered ownership. In total, G City Ltd. and its wholly-owned subsidiary Gazit Europe Netherlands own 52.12% of the total shares and
votes in the company (87,559,016 shares as of 31 December 2022).
Shareholders by ownergroup 31 December 2022
Number of shareholders % Number of shares %
Financial and insurance corporations 33 0.11 111,943,250 66.63
Corporations 1,199 4.16 6,203,952 3.69
Households 27,314 94.78 24,695,002 14.70
General government 9 0.03 14,618,248 8.70
Foreign 74 0.26 8,322,164 4.95
Non-profit institutions 177 0.61 2,226,324 1.32
Total 28,817 100 168,008,940 100
Shareholdings by number of shares 31 December 2022
Number of shares Number of shareholders % Number of shares %
1–100 9,140 31.72 422,870 0.25
101–1,000 14,401 49.97 5,733,032 3.41
1,001–10,000 4,777 16.58 13,489,506 8.03
10,001–100,000 461 1.60 10,922,136 6.50
100,001–1,000,000 32 0.11 9,211,165 5.48
1,000,001 + 6 0.02 128,230,231 76.32
Total 28,817 100 168,008,940 100
shares in the company (168,008,940), the authorization
would equal to a maximum of EUR 84,004,470 in equity
repayment.
The authorization is valid until the opening of the next
Annual General Meeting.
Unless the Board of Directors decides otherwise for
a justified reason, the authorization will be used to
distribute dividend and/or equity repayment four
times during the period of validity of the authorization.
The Board of Directors will make separate resolutions
on each distribution of the dividend and/or equity
repayment so that the preliminary record and payment
dates will be as set out below. Citycon shall make
separate announcements of each such Board resolution.
Preliminary payment date Preliminary record date
31 March 2023 24 March 2023
30 June 2023 23 June 2023
29 September 2023 22 September 2023
29 December 2023 20 December 2023
The dividend and/or equity repayment based on the
resolution of the Board of Directors will be paid to a
shareholder registered in the company’s shareholders’
register maintained by Euroclear Finland Ltd on the
record date of the dividend and/or equity repayment.
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Financial statementsFinancial review Financial Review 2022
Key figures and financial development for five years
Formula 2022 2021 2020 2019 2018
Income statement data
Gross rental income 222.3 222.2 224.3 232.1 237.0
Net rental income
Finland & Estonia 89.1 85.2 86.8 94.4 96.9
Norway 78.9 77.8 74.1 75.4 74.3
Sweden & Denmark 36.0 39.2 44.5 47.3 43.5
Other -0.3 0.0 0.1 0.3 0.2
Net rental income total 203.6 202.3 205.4 217.4 214.9
Other operating income and expense -26.5 -0.4 0.9 2.8 -9.5
Operating profit/loss 87.7 217.8 34.1 73.1 104.7
Profit/loss before taxes 15.1 156.5 -45.7 2.2 21.7
Profit/loss attributable to parent company shareholders 5.3 121.0 -28.0 8.9 16.6
Statement of financial position data
Investment properties 4,040.1 4,189.2 4,152.2 4,160.2 4,131.3
Current assets 135.9 145.0 77.8 74.2 56.2
Total equity 2,310.3 2,489.5 2,166.0 2,325.2 2,089.0
Equity attributable to parent company shareholders 1,618.8 1,800.1 1,818.6 1,978.4 2,088.9
Non-controlling interest 0.0 0.3 0.2 0.1 0.1
Interest-bearing liabilities 1,807.7 1,878.5 2,121.2 1,874.4 2,140.0
Total liabilities 2,150.5 2,313.5 2,514.0 2,257.1 2,533.7
Total liabilities and shareholders’ equity 4,460.7 4,803.0 4,680.0 4,582.3 4,622.7
Number of properties
1
34 37 41 39 42
1
Kista Galleria 50% not included.
2
LTV 2021 changed due to correction related to presentation of IFRS 16 assets. Previously reported LTV for 2021 was 40.7.
3
Per-share figures and ratios have been adjusted in the comparison periods to reflect the new number of shares after the reversed share split executed in March
2019.
4
The Board of Directors proposes that based on the balance sheet to be adopted for the financial period ended on 31 December 2022, no dividend is distributed
by a resolution of the Annual General Meeting. Nonetheless, the Board of Directors proposes that the Board of Directors be authorized to decide in its discretion
on the distribution of assets from the invested unrestricted equity fund in the manner set forth below. Based on this authorization, the maximum total amount of
equity repayment distributed from the invested unrestricted equity fund shall not exceed EUR 0.50 per share.
5
Issue-adjusted number of shares excluding Treasury shares held by the company.
Formulas are presented on section Formulas for key figures and ratios.
Formula 2022 2021 2020 2019 2018
Key performance ratios
Equity ratio, % 1 51.8 52.0 46.4 50.9 45.4
Loan to value (LTV), %
2
2 41.4 40.3 46.9 42.4 48.7
Return on equity, % (ROE) 3 0.3 6.6 0.0 0.4 0.8
Return on investment, % (ROI) 4 1.5 4.8 2.8 2.3 4.1
Quick ratio 5 0.7 2.6 0.7 0.3 0.6
Gross capital expenditure, MEUR 177.0 224.1 344.4 106.0 168.8
% of gross rental income 79.6 100.9 153.5 45.7 71.2
Per-share figures and ratios
3
Earnings per share, EUR 6 -0.15 0.55 -0.25 0.04 0.09
Earnings per share, diluted, EUR 7 -0.15 0.54 -0.25 0.04 0.09
Net cash from operating activities per share, EUR 8 0.59 0.72 0.71 0.76 0.54
Equity per share, EUR 9 13.75 14.80 12.17 13.06 11.74
P/E (price/earnings) ratio 10 - - - 187 87
Return from invested unrestricted equity fund per
share, EUR
4
0.50 0.45 0.49 0.60 0.60
Dividend per share, EUR
4
- 0.05 0.05 0.05 0.05
Dividend and return from invested unrestricted equity
fund per share total, EUR
4
0.50 0.50 0.54 0.65 0.65
Dividend and return of equity per earnings, % 11 - - - 1,603.1 696.2
Effective dividend and return of equity yield, % 12 8.0 7.1 6.8 6.9 8.0
Issue-adjusted average number of shares (1,000)
5
168,011 177,033 177,998 177,997 889,987
Issue-adjusted number of shares at the end of financial
year (1,000)
5
168,009 168,202 177,999 177,999 889,993
Operative key ratios
Occupancy rate (economic), %
1
13 94.5 93.4 93.9 95.5 96.3
Citycon's GLA, sq.m.
1
1,013,390 1,059,090 1,136,390 1,074,590 1,106,490
Personnel (at the end of the period) 251 251 246 234 264
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Financial statementsFinancial review Financial Review 2022
Formulas for key figures and ratios
1) Equity ratio, % Shareholders’ equity
X 100
Balance sheet total - advances received
2) Loan to value (LTV), % Interest bearing liabilities – lease liabilities (IFRS 16) – cash and cash equivalents
X 100
Fair value of investment properties + properties held for sale + investments in joint
ventures - right-of-use assets classified as investment properties (IFRS 16)
3) Return on equity (ROE), % Profit/loss for the period
X 100
Shareholders’ equity excluding Hybrid Bonds (weighted average)
4) Return on investment (ROI), % Profit/loss before taxes + interest and other financial expenses
X 100
Balance sheet total (average) - non-interest-bearing liabilities (average)
5) Quick ratio Current assets
Short-term liabilities
6) Earnings per share (EPS), EUR
1
Profit/loss for the period
X 100
Average number of shares for the period
7) Earnings per share, diluted, EUR
1
Profit/loss for the period
X 100
Diluted average number of shares for the period
8) Net cash from operating activities
per share, EUR
Net cash from operating activities
X 100
Average number of shares for the period
9) Equity per share, EUR Total equity
Number of shares on the balance sheet date
10) P/E ratio (price/earnings) Closing price at year-end
EPS
11) Dividend and return of equity
per earnings, %
Dividend and return of equity per share
X 100
EPS
12) Effective dividend and
return of equity yield, %
Dividend and return of equity per share
X 100
Closing price at year-end
13) Occupancy rate (economic), % Gross rental income as per leases
X 100
Estimated market rent of vacant premises + gross rental income as per leases
1
Transaction costs and coupons on hybrid bond are deducted from the profit/loss for the period attributable to parent company shareholders, despite the
recognition date (coupons are recorded based on the commitment to the payment).
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Financial statementsFinancial review Financial Review 2022
Financial
statements
Citycon Oyj’s consolidated financial statements ...... 42
Consolidated income statement, IFRS .............................. 42
Consolidated statement of
other comprehensive income, IFRS .....................................42
Consolidated statement of financial position, IFRS ....43
Consolidated cash flow statement, IFRS ..........................44
Consolidated statement of changes
in shareholders’ equity, IFRS .................................................... 45
Notes to the consolidated financial statements ......... 46
Parent company financial statements, FAS ................ 83
Notes to the parent company‘s financial
statements, FAS ............................................................................. 86
Signatures to the financial statements ..............................90
Auditor’s report ...............................................................................91
41
Financial statementsFinancial review Financial Review 2022
Citycon Oyj’s consolidated financial statements
Consolidated income statement, IFRS
MEUR Note 2022 2021
Gross rental income 1.2. 222.3 222.2
Service charge income 1.3. 79.2 70.2
Property operating expenses 1.4. -94.7 -88.6
Other expenses from leasing operations -3.1 -1.4
Net rental income 1.1. 203.6 202.3
Administrative expenses 1.5. -28.7 -26.1
Other operating income and expenses 1.3, 1.7. -26.5 -0.4
Net fair value gains/losses on investment property 2.1. -56.5 48.6
Net gains/losses on sale of investment property 2.1., 2.2. -4.3 -6.5
Operating profit 87.7 217.8
Financial income 99.6 25.0
Financial expenses -147.7 -80.0
Net financial income and expenses 3.2. -48.0 -55.0
Share of profit of associated companies and joint ventures 2.4. -24.6 -6.3
Profit before taxes 15.1 156.5
Current taxes 4.1. -2.1 -3.3
Change in deferred taxes 4.2. -7.9 -32.2
Income taxes -10.0 -35.5
Profit for the period 5.1 121.0
Profit attributable to
Parent company shareholders 5.3 121.0
Non-controlling interest -0.3 0.0
Earnings per share attributable to parent company shareholders:
1
Earnings per share (basic), EUR 1.8. -0.15 0.55
Earnings per share (diluted), EUR 1.8. -0.15 0.54
1
The key figure includes hybrid bond coupons and amortized fees.
Consolidated statement of other comprehensive income, IFRS
MEUR Note 2022 2021
Profit for the period 5.1 121.0
Other comprehensive expenses/income
Items that may be reclassified to profit or loss in subsequent periods
Net gains/losses on cash flow hedges 3.2. 0.5 1.2
Share of other comprehensive income of associated companies and
joint ventures 0.0 0.0
Exchange gains/losses on translating foreign operations -73.5 36.0
Net other comprehensive income that may be reclassified to profit
or loss in subsequent periods -73.0 37.3
Other comprehensive expenses for the period, net of tax -73.0 37.3
Total comprehensive profit/loss for the period -67.9 158.3
Total comprehensive profit/loss attributable to
Parent company shareholders -67.6 158.2
Non-controlling interest -0.3 0.0
Net rental income slightly up
from previous year
Operating profit and profit for the period
decreased due to negative investment property
fair value development. The net fair value loss
from investment properties was EUR 56.5 million
and share of loss of associated companies and
joint ventures EUR 24.6 million due to valuation
result in Kista. Net financial expenses decreased
to EUR 48 million due to lower interest expenses
following lower debt levels, coupled with indirect
one-off gains related to prepayment of debt.
2021 1 2 3 4 5 2022
Change in operating profit
MEUR
-105.1
-26.1
-2.5
1.3
2.3
87.7
217.8
1 Change in net rental income
2 Change in administrative expenses
3 Change in other operating income and expenses
4 Change in fair value gains/losses
5 Change in gains/losses on sale
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Financial statementsFinancial review Financial Review 2022
Consolidated statement of financial position, IFRS
MEUR Note 31 December 2022 31 December 2021
ASSETS
Non-current assets
Investment properties 2.1. 4,040.1 4,189.2
Goodwill 5.1. 115.4 145.4
Investments in associated companies and joint ventures 2.4. 103.5 129.3
Intangible assets 4.3. 11.0 7.6
Property, plant and equipment 1.6 3.4
Deferred tax assets 4.2. 16.4 16.4
Derivative financial instruments and other non-current assets 3.6. 36.8 15.8
Total non-current assets 4,324.9 4,507.2
Investment properties held for sale 2.2. 0.0 150.9
Current assets
Derivative financial instruments 3.6. 2.8 1.0
Current tax receivables 4.1. 4.4 0.2
Trade and other receivables 3.3., 4.4. 59.4 89.1
Cash and cash equivalents 3.8. 69.2 54.7
Total current assets 135.9 145.0
Total assets 4,460.7 4,803.0
MEUR Note 31 December 2022 31 December 2021
EQUITY AND LIABILITIES
Equity 3.1.
Share capital 259.6 259.6
Share premium fund 131.1 131.1
Fair value reserve 1.9 1.4
Invested unrestricted equity fund 660.2 744.2
Translation reserve -188.3 -114.8
Retained earnings 754.3 778.6
Total equity attributable to parent company shareholders 1,618.8 1,800.1
Hybrid bond 3.1. 691.5 689.1
Non-controlling interest 0.0 0.3
Total equity 2,310.3 2,489.5
Long-term liabilities
Loans 3.3., 3.4. 1,676.1 1,871.9
Derivative financial instruments 3.3., 3.6. 0.1 11.5
Deferred tax liabilities 4.2. 266.3 296.7
Other liabilities 3.3. 0.3 0.3
Total long-term liabilities 1,942.8 2,180.5
Short-term liabilities
Loans 3.3., 3.4. 131.6 6.5
Derivative financial instruments 3.3., 3.6. 0.4 5.1
Current tax liabilities 4.1. 2.8 2.4
Trade and other payables 3.3., 4.5. 72.8 118.9
Total short-term liabilities 207.6 133.0
Total liabilities 2,150.5 2,313.5
Total liabilities and equity 4,460.7 4,803.0
Effective capital recycling
Citycon sold four non-core assets near book values in Norway during 2022. The proceeds from these disposals
have been used to pay down bonds at discount for additional value creation. In addition to disposals, fair value of
investment properties and shareholders equity was negatively impacted by significant weakening of Norwegian
and Swedish Krona during the year and minimal fair value losses.
2022 2021
Assets
MEUR
5,000
4,000
3,000
2,000
1,000
0
Other current assets
Cash and cash equivalents
Investment properties held
for sale
Other non-current assets
Goodwill
Investment in associated
companies and joint ventures
Investment properties
2022 2021
Equity and liabilities
MEUR
5,000
4,000
3,000
2,000
1,000
0
Other short-term liabilities
Other long-term liabilities
Deferred tax liabilities
Loans
Total equity
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Financial statementsFinancial review Financial Review 2022
Consolidated cash flow statement, IFRS
MEUR Note 2022 2021
Cash flow from operating activities
Profit before taxes 15.1 156.5
Adjustments 166.5 22.7
Cash flow before change in working capital 181.5 179.3
Change in trade and other receivables 4.4. 7.8 -16.1
Change in trade and other payables 4.5. -30.5 23.7
Change in working capital -22.7 7.7
Cash generated from operations 158.8 186.9
Interest expenses and other financial expenses paid -53.9 -58.6
Interest income and other financial income received 0.2 0.5
Taxes paid -5.4 -2.1
Net cash from operating activities 99.7 126.7
Cash flow from investing activities
Acquisition of subsidiaries, less cash acquired 2.1. -6.5 0.6
Capital expenditure on investment properties 2.1. -169.3 -189.9
Capital expenditure on investments in joint ventures, intangible
assets and PP&E 2.4., 4.3. -4.6 -26.8
Sale of investment properties 2.1., 2.2. 270.9 226.0
Purchase of current financial investments -64.8 -285.0
Repayment of current financial investments 84.2 264.9
Net cash used in investing activities 109.8 -10.2
Cash flow from financing activities
Proceeds from short-term loans 3.4. 356.5 862.3
Repayments of short-term loans 3.4. -318.7 -1,082.5
Proceeds from long-term loans 3.4. - 346.1
Repayments of long-term loans 3.4. -102.5 -386.9
Proceeds from hybrid bond 3.1. - 342.5
Hybrid bond interest and expenses 3.1. -28.4 -20.3
Repurchase of treasury shares and costs -1.6 -68.6
Dividends and return from the invested unrestricted equity fund -84.0 -87.8
Realised exchange rate gains and losses 6.8 -12.7
Net cash from/used in financing activities -172.0 -107.8
Net change in cash and cash equivalents 37.5 8.6
Cash and cash equivalents at period-start 3.8. 34.7 25.9
Effects of exchange rate changes -3.1 0.3
Cash and cash equivalents at period-end 3.8. 69.2 34.7
MEUR Note 2022 2021
Adjustments:
Depreciation and amortisation 1.5., 4.3. 2.4 2.7
Net fair value gains/losses on investment property 2.1. 56.5 -48.6
Gains/losses on disposal of investment property 2.2. 4.3 6.5
Financial income 3.2. -99.6 -25.0
Financial expenses 3.2. 147.7 80.0
Share of profit of associated companies and joint ventures 2.4. 24.6 6.3
Share-based payments 1.6. 3.2 0.8
Other adjustments 27.4 0.1
Total 166.5 22.7
MEUR Note 2022 2021
Net cash from operating activities 99.7 126.7
Average number of shares (1,000) 168,011 177,033
Net cash from operating activities per share 0.59 0.72
Net cash flows increased to EUR 37.5 million from previous year’s EUR 8.6 million
During 2022 Citycon invested EUR 180.4 million in aqcuisitions and development projects. Investments and debt
repayments were mainly financed by selling four properties in Norway. The biggest development investment in
2022 was Lippulaiva. Net cash from operations per share decreased to EUR 0.59 mainly due to change in trade
and other payables.
2021 1 2 3 4 5 6 7 8 2022
Cash needs and cash proceeds
MEUR
99.7
-3.1
-1.6
-86.4
-84.0
19.3
-180.4
270.9
69.2
34.7
1 Acquisitions and investments
2 Dividends and equity returns
3 Repurchase of treasury shares and costs
4 Cash from operations
5 Sale of properties
6 Changes in current financial investments
7 Cash from financing
8 Other
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Financial statementsFinancial review Financial Review 2022
Consolidated statement of changes in shareholders’ equity, IFRS
Equity attributable to parent company shareholders
MEUR
Share
capital
Share
premium
fund
Fair
value
reserve
Invested
unrestricted
equity fund
Translation
reserve
Retained
earnings Total Hybrid bond
Non-
controlling
interest Total equity
Balance at 1 January 2021 259.6 131.1 0.2 823.2 -150.9 755.4 1,818.6 347.2 0.2 2,166.0
Profit for the period 2021 121.0 121.0 0.0 121.0
Net gains on cash flow hedges (Note 3.2.) 1.2 1.2 1.2
Share of other comprehensive income of joint ventures 0.0 0.0
Exchange gains/losses on translating foreign operations 36.0 36.0 0.0 36.0
Total other comprehensive expenses/income for the period,
net of tax 1.2 36.0 37.3 0.0 37.3
Total comprehensive loss/profit for the period 1.2 36.0 121.0 158.2 0.0 158.3
Hybrid bond interest and expenses -20.5 -20.5 0.6 -19.8
Proceeds from hybrid bond 341.2 341.2
Repurchase of treasury shares and costs -68.6 -68.6 -68.6
Dividends and return from the invested unrestricted equity
fund (Note 3.1.) -78.9 -8.9 -87.8 -87.8
Share-based payments (Note 1.6.) 0.4 0.4 0.4
Other changes -0.2 -0.2 -0.2
Balance at 31 December 2021 259.6 131.1 1.4 744.2 -114.8 778.6 1,800.1 689.1 0.3 2,489.5
Profit for the period 2022 5.3 5.3 -0.3 5.1
Net gains on cash flow hedges (Note 3.2.) 0.5 0.5 0.5
Share of other comprehensive income of joint ventures 0.0 0.0
Exchange gains/losses on translating foreign operations -73.5 -73.5 0.0 -73.5
Total other comprehensive income/expenses for the period,
net of tax 0.5 -73.5 -73.0 0.0 -73.0
Total comprehensive profit/loss for the period 0.5 -73.5 5.3 -67.6 -0.3 -67.9
Hybrid bond interest and expenses -30.6 -30.6 2.4 -28.2
Repurchase of treasury shares and costs -1.6 -1.6 -1.6
Dividends and return from the invested unrestricted equity
fund (Note 3.1.) -84.0 -84.0 -84.0
Share-based payments (Note 1.6.) 2.4 2.4 2.4
Other changes 0.1 0.1 0.1
Balance at 31 December 2022 259.6 131.1 1.9 660.2 -188.3 754.3 1,618.8 691.5 0.0 2,310.3
Equity return and translation losses
decreased equity
During 2022, Citycon paid an equity return of
EUR 0.50 per share from the invested unrestricted
equity fund. Distributed equity return in total was
EUR 84.0 million and translation losses EUR -73.5
million.
2021 1 2 3 4 5 6 7 2022
Development of equity attributable to
parent company shareholders per share
MEUR
-0.01
-0.17
0.02
-0.50
-0.44
0.03
0.02
13.75
14.80
1
Profit for the period
2
Translation differences
3
Dividends and equity return
4
Repurchase of treasury shares and costs
5
Effect of cancellation of repurchased Treasury shares on share
amount
6
Hybrid bond interest and expenses
7
Other changes
Equity/shareEquity/share
45
Financial statementsFinancial review Financial Review 2022
Notes to the consolidated financial statements
46
Financial statementsFinancial review Financial Review 2022
Basic company data
As a real estate investment company specialising in
Finnish law and domiciled in Helsinki, Finland . The
address of its registered office being Piispansilta 9 A 1,
A copy of Citycon’s consolidated financial
statements is available on the corporate website at
www.citycon.com and from the Group’s headquarters at
the address Piispansilta 9 A FI-02230 Espoo, Finland .
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Tot a l
XXX,X
Meur
Operating expenses 2022
MEUR
Heating and electricity -25.7
Maintenance expenses -29.7
Property personnel expenses -9.6
Administrative and management fees -2.8
Marketing expenses -7.8
Property insurances -1.4
Property taxes -9.8
Repair expenses -3.8
Other property operating expenses -4.1
Tot a l
-94.7
MEUR
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2021 1 2 3 4 5 6 7 8 9 2022
Investment properties 2022
MEUR
53.1
6.4
-22.1
-122.3
165.7
-6.8
6.3
-102.9
-126.5
4,189.2
4,040.1
1 Acquisitions
2 Investments and capitalised interest
3 Disposals
4 Fair value gains
5 Fair value losses
6 Valuation gains and losses from
Right-of-Use-Assets
7 Exchange differences
8 Changes in Right-of-Use-Assets classified
as investment properties (IFR 16)
9 Transfers between items
2020 1 2 3 4 5 6 7 8 9 2021
Investment properties 2021
MEUR
106.1
12.6
-9.1
55.1
191.0
-11.8
-0.6
-45.7
-260.5
4,152.2
4,189.2
1 Acquisitions
2 Investments and capitalised interest
3 Disposals
4 Fair value gains
5 Fair value losses
6 Valuation gains and losses from
Right-of-Use-Assets
7 Exchange differences
8 Right-of-use assets classified as
investment properties (IFRS 16)
9 Transfers between items
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1
Other items in Share of loss/profit of joint ventures comprise mainly of write-down of shares in joint ventures related to divested centres Buskerud, Magasinet Drammen and Down Town.
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Parent company financial statements, FAS
Parent company income statement, FAS
MEUR Note
1 January –
31 December 2022
1 January –
31 December 2021
Service charge income 2.4 3.5
Turnover 2 2.4 3.5
Administrative expenses 3,4 -16.3 -13.4
Other operating income and expenses 5 0.0 -0.1
Operating profit -13.9 -10.0
Financial income 112.2 84.5
Financial expenses -147.6 -106.6
Net financial income and expenses 6 -35.4 -22.1
Profit/loss before appropriations and taxes -49.4 -32.1
Group contributions 0.8 24.4
Income tax expense 7 0.0 0.0
Profit/loss for the period -48.6 -7.7
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Parent company balance sheet, FAS
MEUR Note 31 December 2022 31 December 2021
ASSETS
Non-current assets
Intangible assets 8 9.7 7.4
Tangible assets 9 0.4 0.3
Investments
Shares in subsidiaries 10 1,275.0 1,350.4
Loan receivables and derivative contracts 11 1,980.3 2,197.5
Total investments 3,255.3 3,547.9
Total non-current assets 3,265.4 3,555.7
Current assets
Short-term receivables 13 84.4 128.1
Current financial investments - 19.9
Cash and cash equivalents 0.1 7.0
Total current assets 84.5 155.1
Total assets 3,349.9 3,710.8
MEUR Note 31 December 2022 31 December 2021
LIABILITIES AND SHAREHOLDERS’ EQUITY
Shareholders’ equity 14
Share capital 259.6 259.6
Share premium fund 133.1 133.1
Invested unrestricted equity fund 676.0 760.0
Holds of treasury shares - -2.0
Retained earnings -17.3 -6.2
Profit for the period -48.6 -7.7
Total shareholders’ equity 1,002.8 1,136.7
Liabilities 15
Long-term liabilities
Hybrid bond 692.3 690.1
Other long-term liabilities 1,533.3 1,657.3
Total long-term liabilities 2,225.6 2,347.5
Short-term liabilities
Short-term liabilities 121.5 226.6
Total short-term liabilities 121.5 226.6
Total liabilities 2,347.1 2,574.1
Total liabilities and shareholders’ equity 3,349.9 3,710.8
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Parent company cash flow statement, FAS
MEUR
1 January –
31 December 2022
1 January –
31 December 2021
Cash flow from operating activities
Profit before taxes -49.4 -32.1
Adjustments:
Depreciation and impairment loss 1.6 1.8
Net financial income and expenses 35.4 22.1
Cash flow before change in working capital -12.3 -8.1
Change in working capital -1.9 31.2
Cash generated from operations -14.3 23.1
Interest expense and other financial expenses paid -76.1 -65.7
Interest income and other financial income received 64.8 58.2
Realised exchange rate gains and losses -3.9 -18.2
Net cash flow from operating activities -29.5 -2.6
Cash flow used in investing activities
Investment in tangible and intangible assets -3.9 -3.6
Loans granted -375.4 -605.6
Repayments of loans receivable 558.7 721.8
Purchase of current financial investments -64.8 -285.0
Repayment of current financial investments 84.2 264.9
Net cash from investing activities 198.7 92.6
Cash flow from financing activities
Proceeds from short-term loans 367.9 810.8
Repayments of short-term loans -328.2 -1,033.2
Repayments of long-term loans - -94.7
Proceeds from hybrid bond - 342.5
Received group contributions - 1.7
Dividends paid and return from the invested unrestricted equity fund -84.0 -87.8
Purchase and costs of purchase of treasury shares -1.6 -68.6
Net cash used in financing activities -45.9 -129.3
Net change in cash and cash equivalents 123.3 -39.3
Cash and cash equivalents at period-start -129.3 -90.0
Cash and cash equivalents at period-end
1
-6.0 -129.3
1
Cash and cash equivalents of Citycon Oyj EUR -6.0 million consist of EUR 0.1 million cash and bank receivables in the balance sheet and Group cash pool
account EUR -6.1 million. Cash pool balance of EUR -6.1 million has been recognised in the parent company’s balance sheet under short-term liabilities.
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Notes to the parent company’s financial statements, FAS
1. Accounting policies
The parent company’s financial statements are
prepared in accordance with the Finnish law.
Income statement format
The income statement is presented in accordance with
the function-based format.
Non-current assets
Non-current assets are recognised in the balance
sheet at acquisition cost less impairment losses and
depreciation/amortisation.
Intangible assets
Intangible assets include IT software and other non-
current assets, including office improvement expenses.
IT software is depreciated over 3–7 years as straight line
basis and office improvement expenses are depreciated
over the term of the lease agreement.
Tangible assets
Tangible assets include machinery and equipment and
construction in progress. Machinery and equipment is
depreciated at over 3–7 years as straight line basis.
Pension schemes
The company’s employee pension cover is based on
statutory pension insurance.
Foreign currency receivables and payables
Receivables and payables denominated in foreign
currencies as well as forward rate agreements are
measured at the exchange rate quoted on the balance
sheet date. Any exchange rate differences resulting from
currency translations are recognised as exchange rate
differences in the income statement.
Income taxes
Current taxes are recognised on an accrual basis.
Deferred taxes arising from temporary differences
between the book and fiscal values have been
recognised separately in the income statement and the
balance sheet.
Derivatives
All derivatives are valued according to the Finnish
bookkeeping act KPL 5.2a at fair value.
Important note
Individual figures and sum totals presented in the
financial statements have been rounded to the nearest
hundreds thousands of euros; this may cause minor
discrepancies between the sum totals and the sums of
individual figures as given.
2. Turnover
MEUR 2022 2021
Turnover by country:
Finland 0.5 1.0
Other countries 1.9 2.5
Total 2.4 3.5
Parent company turnover includes the following
administrative fees received from Group
companies:
MEUR 2022 2021
Administrative fees from Group
companies 2.4 3.5
3. Personnel expenses
MEUR 2022 2021
Average number of employees during
period 52 46
Personnel expenses
Wages and salaries -8.0 -6.9
Pension charges -0.8 -1.0
Other social charges -1.1 -0.3
Total -9.9 -8.2
Personnel expenses include the following
management wages and salaries:
MEUR 2022 2021
CEO’s wages and salaries -1.2 -1.1
Board remuneration -0.8 -0.7
Total -1.9 -1.9
The wages and salaries of the CEO includes the gross
base salary and a yearly performance bonus. In addition,
the CEO is included in the Restricted Share Plan and has
been rewarded under the plan during the year.
4. Depreciation and amortisation
and impairments
The following depreciation and amortisation
as well as impairments are included in the
administrative expenses:
MEUR 2022 2021
Amortisation on intangible assets -1.5 -1.6
Depreciation on machinery and
equipment -0.2 -0.2
Total -1.6 -1.8
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5. Other operating income and expenses
MEUR 2022 2021
Other operating income 0.0 -0.1
Total 0.0 -0.1
6. Net financial income and expenses
MEUR 2022 2021
Interest and other financial income
From Group companies 76.3 62.2
Foreign exchange gains 35.1 20.9
Other interest and financial income 0.8 1.4
Total 112.2 84.5
Total financial income 112.2 84.5
Interest and other financial expenses
To Group companies 47.1 56.8
Foreign exchange losses 55.1 17.4
Interest and other financial expenses 45.4 32.3
Total financial expenses 147.6 106.6
Net financial income and expenses -35.4 -22.1
7. Income tax expense
MEUR 2022 2021
Income tax expense 0.0 0.0
Total 0.0 0.0
The parent company has taxable losses (including not
yet confirmed year 2022) of EUR 120.1 million from
which the parent company has not recognized deferred
tax asset of EUR 24.0 million.
8. Intangible assets
MEUR 2022 2021
Intangible rights
Acquisition cost 1 January 15.3 11.8
Additions during the period 3.6 3.5
Accumulated acquisition costs 31
December 18.9 15.3
Accumulated depreciation 1 January -8.7 -7.2
Depreciation for the period -1.3 -1.5
Accumulated depreciation 31 December -10.0 -8.7
Net carrying amount 31 December 8.9 6.6
Other non-current assets
Acquisition cost 1 January 2.6 2.6
Additions during the period 0.1 0.0
Accumulated acquisition costs 31
December 2.7 2.6
Accumulated depreciation 1 January -1.8 -1.7
Depreciation for the period -0.2 -0.2
Accumulated depreciation 31 December -2.0 -1.8
Net carrying amount 31 December 0.7 0.8
Total intangible assets 31 December 9.7 7.5
9. Tangible assets
MEUR 2022 2021
Machinery and equipment
Acquisition cost 1 January 2.1 2.1
Additions during the period 0.2 0.1
Accumulated acquisition costs 31
December 2.3 2.1
Accumulated depreciation 1 January -1.8 -1.6
Depreciation for the period -0.2 -0.2
Accumulated depreciation 31 December -2.0 -1.8
Net carrying amount 31 December 0.4 0.3
Construction in progress
Acquisition cost 1 January 0.0 0.0
Net carrying amount 31 December 0.0 0.0
Total tangible assets 31 December 0.4 0.3
10. Shares in subsidiaries
MEUR 2022 2021
Acquisition cost 1 January 1,350.4 1,350.4
Additions during the period 0.0 -
Decreases -75.4 0.0
Net carrying amount 31 December 1,275.0 1,350.4
11. Long-term loan receivables and
derivative contracts
MEUR 2022 2021
Loan receivables from Group companies 1,961.7 2,182.3
Derivative financial instruments, from
outside the Group 18.6 15.2
Total other investments 31 December 1,980.3 2,197.5
Total investments 31 December 3,255.3 3,547.9
12. Subsidiaries and associated
companies
Parent company’s subsidiaries and associated
companies are presented in the Note 5.3. Related Party
Transactions in the Notes to the Consolidated Financial
Statements.
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13. Short-term receivables and cash and
cash equivalents
MEUR 2022 2021
Receivables from outside the Group
Trade receivables 0.1 0.1
Derivative financial instruments 2.8 1.0
Other receivables 0.0 0.1
Cash and cash equivalents 0.1 7.0
Current financial investments - 19.9
Accrued income and prepaid
expenses 4.7 4.3
Total 7.7 32.5
Receivables from Group companies
Trade receivables 1.4 0.0
Loan receivables 59.0 84.1
Other receivables 1.1 -
Total other receivables 60.1 84.1
Interest receivables 14.4 14.0
Group contributions receivables 0.8 24.4
Total 76.7 122.6
Total short-term receivables 84.5 155.1
14. Shareholders’ equity
MEUR 2022 2021
Share capital at 1 January 259.6 259.6
Share capital at 31 December 259.6 259.6
Share premium fund at 1 January 133.1 133.1
Share premium fund at 31 December 133.1 133.1
Invested unrestricted equity fund
at 1 January 760.0 838.9
Equity return from the invested
unrestricted equity fund -84.0 -78.9
Invested unrestricted equity fund
at 31 December 676.0 760.0
Retained earnings at 1 January -15.9 68.6
Dividends - -8.9
Profit for the period -48.6 -7.7
Reversed repurchased Shares -1.4 -65.8
Repurchase of treasury shares - -2.0
Retained earnings at 31 December -65.9 -15.9
Total shareholders’ equity at 31
December 1,002.8 1,136.7
End of the year 2021 Citycon Oyj held a total of 296,463
treasury shares. During year 2022, Company repurchased
232,278 treasure shares. A total of 39 156 own shares held
by the company was used for payment of rewards under the
Company’s share-based incentive plan to key persons. The rest
of repurchased shares, 489,585 shares, were cancelled on 14
January 2022. Purchase price of cancelled shares recorded as a
deduction of retained earnings. On 31 December 2022 Citycon
does not hold own shares.
15. Liabilities
A) Long-term liabilities
MEUR 2022 2021
Long-term interest-bearing liabilities
Hybrid bond 692.3 690.1
Loans from Group companies 1,533.2 1,644.4
Total 2,225.5 2,334.5
Derivative financial instruments 0.1 11.5
Derivative financial instruments,
from Group companies - 1.4
Total long-term liabilities 2,225.6 2,347.5
Loans maturing later than 5 years 350.0 1,350.0
B) Short-term liabilities
MEUR 2022 2021
Short-term interest-bearing liabilities
Commercial paper 49.2 0.0
Loans from Group companies 10.1 158.4
Total 59.4 158.4
Short-term non-interest-bearing
liabilities
Payables to outside the Group
Accounts payable 0.2 0.8
Derivative financial instruments 0.1 5.1
Total other payables 0.1 5.1
Interest liability 17.8 17.5
Other accrued expenses and
deferred income 6.5 9.8
Total accrued expenses and
deferred income 24.3 27.3
Total 24.5 33.2
Payables to Group companies
Accounts payable 16.8 15.0
Derivative financial instruments 1.9 -
Other payables 0.5 0.0
Interest liability 18.4 20.1
Total accrued expenses and
deferred income 18.4 20.1
Total 37.6 35.0
Total short-term liabilities 121.5 226.6
Total liabilities 2,347.1 2,574.1
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The company has a syndicated revolving credit facility,
which matures in 2024. In addition, the company has
a hybrid bond issued in November 2019, which is
reported under long term liabilities. The hybrid bond is
unsecured, subordinated to all debt and senior only to
ordinary share capital. A holder of hybrid bond notes
has no shareholder rights. Citycon has the right to
postpone interest payment on its hybrid bonds if it
does not distribute dividend or any other equity to its
shareholders. The hybrids has no set maturity date,
but the company has the right to redeem it after five
years from the issue date and thereafter on every yearly
interest payment date.
Derivative financial instruments are used in Citycon
group in accordance with the Treasury Policy to hedge
the interest rate risk of interest bearing liabilities and
foreign currency risk. All Group external derivative
financial instruments in Citycon are executed by the
parent company Citycon Oyj. Citycon Oyj values
derivatives according to the Finnish bookkeeping
act KPL 5.2a fair value model and fair value changes
are booked through profit and loss. The fair value
definition of derivatives are presented in note 3.6 of the
consolidated Financial Statements. In addition Citycon
Oyj had group internal derivatives as of 31 December
2022 with a fair value of EUR -1.9 million (-1.4) and a
nominal amount of EUR 76.1 million (80.1).
16. Contingent liabilities
The parent company does not have any mortgages nor
given securities.
A) Lease liabilities
MEUR 2022 2021
Payables on lease commitments
Maturing next financial year 0.4 0.4
Maturing later 1.3 1.6
Total 1.7 2.0
Citycon’s finance leases mainly apply to computer
hardware, machinery and equipment and cars.
B) Guarantees given
MEUR 2022 2021
Guarantees 1,801.7 1,956.6
Of which on behalf of Group
companies 1,801.7 1,956.6
Guarantees in 2022 and in 2021 mainly relate to issued
bonds of subsidiaries which Citycon Oyj has guaranteed
via parent guarantee or alternatively third party bank
guarantees.
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Signatures to the financial statements
Signatures to the Financial Statements 1 January–31 December 2022
Helsinki, 16 February 2023
Chaim Katzman Alexandre Koifman
Chairman Vice Chairman
Judah Agnster Zvi Gordon
Member Member
David Lukes Per-Anders Ovin
Member Member
Ljudmila Popova F. Scott Ball
Member CEO, deputy Chairman of the Board
We have today submitted the report on the conducted audit.
Helsinki, 16 February 2023
Ernst & Young Oy
Authorized Public Accountant Firm
Antti Suominen
Authorized Public Accountant
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Auditor’s report
To the Annual General Meeting
of Citycon Oyj
Report on the Audit of
Financial Statements
Opinion
We have audited the financial statements of Citycon Oyj
(business identity code 0699505-3) for the year ended
31 December, 2022. The financial statements comprise
the consolidated balance sheet, income statement,
statement of comprehensive income, statement of
changes in equity, statement of cash flows and notes,
including a summary of significant accounting policies,
as well as the parent company’s balance sheet, income
statement, statement of cash flows and notes.
In our opinion
• the consolidated financial statements give a true
and fair view of the group’s financial position as well
as its financial performance and its cash flows in
accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU.
• the financial statements give a true and fair view of
the parent company’s financial performance and
financial position in accordance with the laws and
regulations governing the preparation of financial
statements in Finland and comply with statutory
requirements.
(Translation of the Finnish original)
Our opinion is consistent with the additional report
submitted to the Audit and Governance Committee.
Basis for Opinion
We conducted our audit in accordance with good
auditing practice in Finland. Our responsibilities under
good auditing practice are further described in the
Auditor’s Responsibilities for the Audit of Financial
Statements section of our report.
We are independent of the parent company and of
the group companies in accordance with the ethical
requirements that are applicable in Finland and are
relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements.
In our best knowledge and understanding, the non-audit
services that we have provided to the parent company
and group companies are in compliance with laws
and regulations applicable in Finland regarding these
services, and we have not provided any prohibited non-
audit services referred to in EU Regulation No 537/2014,
point (c) of Article 10(2). The non-audit services that
we have provided have been disclosed in note 1.5 to the
consolidated financial statements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the financial statements of the current period.
These matters were addressed in the context of our
audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation
to these matters. Accordingly, our audit included the
performance of procedures designed to respond to
our assessment of the risks of material misstatement
of the financial statements. The results of our audit
procedures, including the procedures performed
to address the matters below, provide the basis for
our audit opinion on the accompanying financial
statements.
We have also addressed the risk of management
override of internal controls. This includes consideration
of whether there was evidence of management bias
that represented a risk of material misstatement due to
fraud.
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Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director are
responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance
with International Financial Reporting Standards (IFRS)
as adopted by the EU, and of financial statements that
give a true and fair view in accordance with the laws
and regulations governing the preparation of financial
statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing
Director are also responsible for such internal control as
they determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of
Directors and the Managing Director are responsible
for assessing the parent company’s and the group’s
ability to continue as going concern, disclosing, as
applicable, matters relating to going concern and using
the going concern basis of accounting. The financial
statements are prepared using the going concern basis
of accounting unless there is an intention to liquidate
the parent company or the group or cease operations, or
there is no realistic alternative but to do so.
Auditor’s Responsibilities for
the Audit of Financial Statements
Our objectives are to obtain reasonable assurance on
whether the financial statements as a whole are free
from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit
conducted in accordance with good auditing practice
will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of the
financial statements.
As part of an audit in accordance with good auditing
practice, we exercise professional judgment and
maintain professional skepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement
of the financial statements, whether due to fraud
or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness
of the parent company’s or the group’s internal
control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of the Board of
Directors’ and the Managing Director’s use of the
going concern basis of accounting and based on
the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the parent company’s
or the group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the
related disclosures in the financial statements or,
Key Audit Matter How our audit addressed the Key Audit Matter
Valuation of Investment Properties
We refer to the note 2.1
At the balance sheet date, the fair value of investment properties
amounted to 4.040 million euro representing 91% of the total assets
and 175% of the total equity
Fair value measurement of investment properties is a key audit
matter because the fair value measurement involves judgment
and assumptions. Market rents, yield requirement, vacancy rate
and operating expenses form the key variables used in investment
property’s fair-value measurement. The evaluation of these variables
involves judgment and assumptions of Citycon management.
This matter is a significant risk of material misstatement referred to
in EU Regulation No 537/2014, point (c) of Article 10(2).
Our audit procedures to address the risk of material misstatement in
respect of valuation of Investment Properties included among others:
• Our valuation specialists assisted us in evaluating the assumptions
and methodologies used.
• We assessed the competence and objectivity of the external
appraiser engaged by the management of Citycon as well as
historical accuracy of management’s judgment and assumptions.
• We focused audit on the market rents, yield requirement, vacancy
rate and operating expenses.
The methodologies and key inputs used in the valuation and
sensitivity analysis are presented in note 2.1. We assessed the
adequacy of these disclosures.
Valuation of Goodwill
We refer to the note 5.1
At the balance sheet date, the carrying amount of goodwill amounted
to 115 million euro representing 3% of the total assets and 5% of the
total equity
Valuation of goodwill was a key audit matter because the assessment
process is complex and is based on numerous judgmental estimates
and because the amount of goodwill is significant to the financial
statements. Citycon’s management uses assumptions in respect
of discount rate, net rental income projections and other operating
income and expenses.
This matter is a significant risk of material misstatement referred to
in EU Regulation No 537/2014, point (c) of Article 10(2).
Our audit procedures to address the risk of material misstatement in
respect of valuation of Investment Properties included among others:
• Our valuation specialists assisted us in evaluating the
methodologies and assumptions used, in particular those relating
to net rental income and the weighted average cost of capital.
• We assessed the competence and objectivity of the external
appraiser engaged by the management of Citycon as well as
historical accuracy of management’s judgment and assumptions.
• We focused audit on how much the recoverable amount exceeds
the carrying amount of goodwill, and whether any reasonably
possible change in assumptions could cause the carrying amount
to exceed its recoverable amount.
The key assumptions used in the impairment test of goodwill
are presented in note 5.1. We assessed the adequacy of these
disclosures.
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Financial statementsFinancial review Financial Review 2022
if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s
report. However, future events or conditions may
cause the parent company or the group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events so
that the financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business
activities within the group to express an opinion on the
consolidated financial statements. We are responsible
for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
communicate with them all relationships and other
matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the financial
statements of the current period and are therefore the
key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not
be communicated in our report because the adverse
consequences of doing so would reasonably be
expected to outweigh the public interest benefits of
such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual
General Meeting on 5 April 2005, and our appointment
represents a total period of uninterrupted engagement
of 18 years.
Other information
The Board of Directors and the Managing Director
are responsible for the other information. The other
information comprises the report of the Board of
Directors and the information included in the Annual
Report, but does not include the financial statements
and our auditor’s report thereon. We have obtained the
report of the Board of Directors prior to the date of this
auditor’s report, and the Annual Report is expected to be
made available to us after that date.
Our opinion on the financial statements does not cover
the other information.
In connection with our audit of the financial statements,
our responsibility is to read the other information
identified above and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
With respect to report of the Board of Directors, our
responsibility also includes considering whether the
report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board
of Directors is consistent with the information in the
financial statements and the report of the Board of
Directors has been prepared in accordance with the
applicable laws and regulations.
If, based on the work we have performed on the other
information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material
misstatement of this other information, we are required
to report that fact. We have nothing to report in this
regard.
Helsinki, 16 February 2023
Ernst & Young Oy
Authorized Public Accountant Firm
Antti Suominen
Authorized Public Accountant
93
Financial statementsFinancial review Financial Review 2022
