Citycon Aktie

Good morning, everyone. Welcome to Citycon's half yearly results presentation. My name is Anni Torkko and I work in the IR here at Citycon, and together with me here in the morning, I have Eshel Pesti, our CEO; and Hilik Attias, our CFO. Eshel and Hilik will now present the results of Citycon and you can submit questions throughout the presentation, and we will address them in the end, and you can use the Q&A function at the bottom.

Next, I will give the speech to Eshel and Hilik.

Huomenta, and thank you for coming. We will start the results of the 6 months. We had a very good opening of the 2026. Our like-for-like growth is 5.6%. Our occupancy rate is 94.4%. We lost around 0.9%. Retail average rent increased by 1% to EUR 28.5 per square meter. Footfall, like-for-like growth by 3.1%. And the like-for-like tenant sales increased by 2.6%. The fair value grew by EUR 2.7 million and NRI margin is 94.2%.

The key achievement in the first half, we signed leases for about 20,700 square meter. The leasing spread is 9.9%, which is impressive. The like-for-like general mall leasing increased by 26%, which is extraordinary. The operating expenses, we cut for 5.5%. And we actually buy back our bond for '26 and '27 in an amount of EUR 252 million. We took a loan of EUR 214 million in order to stabilize our financial situation. The like-for-like NRI growth for the first half of the year, you see that Sweden donate almost 8%, Norway 5.8% and Finland 4.1%. In total, the average is 5.6%, while the European average growth for this year is 3.5%, and this is actually the -- I would say third quarter, including the last quarter of last year that we are actually beating the European average. And we can see that it's not a coincidence. This is a trend.

Go ahead. Regarding divestment, we signed LOI for 3 assets in Finland, Myyrmanni, Koskikeskus and Trio. The deal is a conditional deal on the day of the closing, the buyer, which is Noga Finland, will issue an IPO in the stock exchange in Tel Aviv. And based on the success IPO we will do the transaction. As I mentioned, we signed an LOI, and we believe that between today to 45 days, we are expecting the closing. We are in discussion with a few potential buyers regarding assets in Sweden and in Norway, but nothing is mature yet.

And now I'll give the floor to Hilik to do the financial overview.

Thank you, Eshel. So as Eshel mentioned, strong results in the performance, NRI for the quarter, EUR 57.5 million versus EUR 53.3 million. That's a 7.8% growth, 5.9% with the FX adjustment. And you can see for the half year, 5.7% growth and 3.9% with FX adjustment and of course, taking into account the Lippulaiva resi divestment, NRI loss, that 3.9% would grow to around 5%. Direct operating profit again, here, we show a 4.6% increase from EUR 47.7 million to EUR 50.8 million also in the year 4.9% increase EUR 96.6 million versus EUR 90.4 million. On the EPRA earnings, EUR 17.6 million resemble to the Q2 2025 and also the half year the same trend, EUR 36.6 million versus EUR 36.9 million.

The EPRA earnings, excluding hybrids, EUR 25.7 million, sorry, versus EUR 26.3 million and the half year EUR 52.8 million versus EUR 54.3 million. That's EUR 0.10 per share in the quarter and EUR 0.20 for the half year. The EPRA NRV landed at EUR 7.64 million and -- versus EUR 8.29 million in Q2 2025.

In the bridge, you can see that our solid results in the NRI growth and the G&A reduction that is a consistent effort for management to try to cut expenses. We're subsidizing the increased cost that we have here. This is -- the main driver here is the higher interest rate environment in the refinancing process and is reflected by the interest expenses, somewhat offset by the buyback of hybrid bonds, you can see EUR 1.3 million.

On the recent financing actions, we accomplished a lot of actions in the first half year, derisking the balance sheet and while extending maturities. We've done early redemptions of 2026 and 2027 bonds. On the one hand, we drew a secured loan with favorable terms, EUR 214 million. On the other hand, that's the interest-bearing liabilities went down by EUR 38 million quarter-to-quarter. And we also entered into EUR 200 million related party credit facility where we gave a loan EUR 70 million to G City with 6.5% interest arm's length.

In the amortization schedule, you can see average debt to maturity was going up to 3.5 years from 3.2. Weighted average interest rate, 4.72%, that's an increase. We try to offset it by entering into secured financing, which has favorable terms. But again, the interest environment is still higher than the current coupons. And on the key credit metrics, you can see that we're still in a very good place, loan-to-value 51.4%. Net debt to EBITDA, 10.1. Interest coverage ratio at 2.2. And of course, Citycon is in compliance with all of our -- all of its covenants.

That was about the presentation. And next, we will go into the Q&A session.

[Operator Instructions]

And we have a few questions coming in on the line. So the first one is related to divestments. How do you plan to use the proceeds from divestment of the 3 shopping centers in Finland?

Well, in case we will execute the transaction, then I believe that we'll buy the next bonds that we have on the line is 2028 and some hybrids.

Then we have another question, which is partly related to the same. So also asking about the divestments what the net proceeds from this portfolio would be? And maybe we can take the different parts to the question. So this is the first, what the net proceeds would be. I can take the second after your answer.

Hilik.

I think that we've mentioned that we're talking about book value, latest appraisal, which is EUR 422.6 million. And of course, customary adjustments would be made. But this is what we're experiencing and this is still all under negotiation and conditional deal.

Okay. Then the second one coming from the same is the related to the vendor financing. If that will be in addition to the mutual loan agreement together with G City.

No. Maybe people are confused. There is nothing to do with G City about the, let's say, 1 minute that Noga will go for the IPO. Once Noga is a public company, is no more G City. And the vendor loan will be to Noga Finland, which will be a public company that G City will hold, if I remember, not more than 25%. So the -- it will be to be a real public company. And we will give vendor loan as we gave vendor loan before when we do divestment in the year before, not more than 20%.

Then on additional questions. Do you plan any dividends during the second half year in '26?

We didn't plan it yet.

Then an additional question coming from the line related to the credit facility with G City. How do you think about buying back hybrids instead even they have higher coupons and trade well below par?

I think that we have demonstrated that we can do buybacks of hybrids. We've done in Q3, 2025, EUR 35 million buybacks. And this is, of course, part of our toolkit, and we'll consider it, of course.

Then an additional question related to hybrids. What is your plan for the EUR 321 million hybrid where coupon reset date is in third quarter?

As I mentioned, I believe that if we will do the transaction, we will use the money for both bond as we have the next on the line, the 2028 and partially for the hybrid.

And then one more question related to the divestment, partly already discussed. But the question is, will the asset sale be done at book value or premium/discount and about when the timing would be for this divestment?

Noga?

Yes.

Well, as I mentioned before, the price is the book value price with the last appraisal that we make lately. And as I said, it will be on a book value. And we will actually bring -- we will give them a loan or vendor loan of up to 20%. And it all depends, of course, on the result of the IPO. That's why I'm saying that I'm not 100% sure that we will do it. It depends on the results. I hope we will do it because it's a very good deal for us to sell first time after many, many years to sell some assets in a book value.

And on the other hand, we will keep -- manage these assets. So -- and we will get a management fee. So for Citycon, I believe it is a very good transaction. There was a part that I miss.

The timing of the...

Yes. As I mentioned, the -- we expect to do the closing between, I believe, today to 45 maximum 2 months.

Thank you, Eshel and Hilik. For now, it's the last question we had on the line. And there are no more open questions.

So I want to take one more minutes from your time. I know that there are some Cityconers on the line. So I want to tell all of you guys that you did a very great job and keep going. Thank you very much, and I wish all of us a good weekend.

Good morning. Happy to have you here on this Friday to summarize our Citycon first quarter 2026. Next to me is Hilik. And after, I will give you the management review, the operational, I will leave the floor to Hilik.

We had a solid first quarter, and the operational results are the following. We have a like-for-like growth in NRI, 4.5%. Our retail occupancy is almost 95%, 94.8%. The rent per square meter grew by 0.9% to EUR 28.4 per square meter. The footfall grew by 2.1% and the tenant sales growth by 3.5%, which is a good indicator.

Our valuation grew by EUR 2.2 million, and the NRI margin is almost 90%, 89.9%. The key achievement in the quarter, we focus on the general mall leasing, and we achieved growth of 25% between the years, and we will keep focused on that. This is what we call here money on the floor. We signed and leased 18,700 square meters of retail, and we decreased our administrative cost by 17.5%. We have signed 2 loans for almost EUR 500 million, EUR 490 million, and we have additionally accordion of EUR 250 million. So it's a good backup to our facility.

The cash flow has continued to be strong. The like-for-like growth, as I mentioned before, is 4.5%, Norway donate, 4.8% and Sweden, Denmark, Finland and Estonia each one of them 4.5%. And on the right side, you can see the growth of the price per square meter during the quarters. In general mall leasing, as I mentioned, we focus in this year, and we had a growth of 25%. And new long-term specialty leasing deals signed and opened during the first quarter, new media and advertising actually agreement with the providers has been signed new possibilities to create and reshaping centers in order to have more [ GMLs ] and energy project, which will generate new revenue in the coming soon.

We have significant income growth potential in the general mall leasing and we will focus also in having better results in the leasing. Looking forward, we continue to work on optimizing our asset portfolio by identifying and carrying out potential asset divestment. During the quarter, we have been approached by several potential buyers related to selected assets in Finland, Sweden and Norway. These days, post quarter 1, we start negotiating NDA with some potential buyers. We will focus on increasing the general mall leasing income and on improving of the leasing activity. We are well positioned to deliver strong operational results for 2026.

So for now, I will leave the floor to Hilik in order to review the financial overview. Please, Hilik.

Thank you all. Thank you, Eshel. Key financials for Q1 2026. NRI landed at EUR 51.8 million versus EUR 50.1 million. That's a 3.5% uplift and 1.8% FX adjusted. The direct operating profit, EUR 45.8 million versus EUR 42.7 million, 7.2% uplift and 5.3% FX adjusted. This is thanks to the G&A savings of EUR 1.3 million compared to the corresponding quarter in 2025.

EPRA earnings, EUR 19 million versus EUR 19.4 million, we will go through the EPRA bridge in the next slide. EPRA per share of EUR 0.10 versus EUR 0.11 in the corresponding quarter in 2025 and EUR 0.15 excluding the hybrids versus EUR 0.15. EPRA NRV EUR 7.61 versus EUR 8.13.

And in the next slide, you can see in the bridge, the remaining assets gave us EUR 1.5 million. This is a good growth. On the other hand, we lost NRI from the Lippulaiva residential divestments. G&A, as mentioned, savings, EUR 1.3 million. And on the other hand, financials expenses, this is coming from increased costs, mainly the 2031 bond we issued in 2025 April. On the other hand, we bought EUR 35 million of hybrids. That gave us back EUR 600,000 for this quarter, as you can see. Overall, after FX impact, we landed on EUR 19 million. And this is a strong results and solid results for the quarter 1.

With respect to financing actions, we are pleased that we have done a lot of actions in Q1 and the subsequent event. We've managed to sign and draw EUR 270 million loan with an accordion option of another EUR 250 million. We bought back some bonds, and then we distribute dividends of an aggregate amount of EUR 202 million. And on April, we did early redemption of the 2026 bond EUR 124 million. We signed another secured loan, EUR 220 million with attractive terms. That was already drawn in beginning of May. And we announced to -- for an early redemption of the 2027 bond.

So following all of that actions, we are in a much better position, and there's no near-term maturities. The next one would be March 2028 bond. And this is something that we would like to emphasize significantly derisking the balance sheet as of today. With respect to the debt maturity, so after the subsequent event, the pro forma of the average debt maturity is 3.7 years. We are experiencing a gradually higher interest rates. This is coming from external interest rate -- base interest rate. But on the other hand, we're kind of trying to offset it by entering to a secured loan with a relatively attractive terms and potentially buying back bonds in the future.

Liquidity as of March 2026, EUR 153 million. We have -- this is something that, after that, we have did the make-whole of 2026. On the other hand, got the [ RA ] loan. And so we are well positioned currently as well. In the maturity schedule, this is for March. So 2026, 2027 would be cleared. 2027 will be cleared in the next month. And so you can see that next in line would be only March 2028, which is just less than 2 years from now. Key credit metrics loan-to-value below 50%, 49.4%. And the upper loan-to-value is coming from the dividend distribution mainly. Net debt to EBITDA, 9.9%, interest coverage at 2.3% and weighted average interest rate is mentioned, 4.22%.

Thank you. And now we will open for questions.

[Operator Instructions] Currently, we have no open questions on the line.

[Operator Instructions] And now we have a question coming. So there is a question where you have been asked, can you please provide an update on negotiations related to disposals, [ asset for ] sale? What is the strategic plan with regard to the hybrids? You say focus on derisking the balance sheet, but LTV is up and you prepare for further dividends for launch to G City. How do you want to retain access to capital markets?

Okay. So I see here 3 questions and I will start with the divestment. As I said, last year and when we summarize 2025, our target for this year is start to optimize our portfolio. We have, as I say, approached by a few good potential buyers for asset here in Finland, Norway and Sweden, nothing is premature yet that I can report specifically. But as I said, we signed a few NDAs already and we are negotiating now NDA about asset here in Finland.

I believe that when we will summarize the 6 months, we'll be able to be more specific at the moment, I cannot expose more than that. But we are definitely in the direction that we want.

Yes. And I would say for the hybrids. So the decision-making would be close to the reset period, which is September 2026. As mentioned, we bought EUR 35 million hybrids we can do in the open market and try to get benefit of the fact that it's traded below par. And regarding the LTV, 49% is still something that is well monitored and we keep monitoring it. And of course, we're in compliance with every covenant that we have. and we'll continue to do so. With respect to dividends, again, looking at our dividend policy, any excess of cash would be considered as a dividend and of course, in compliance with all of our covenants at any given time.

And then we have our next question coming. Do you expect any negative rating action from S&P from increased secured debt? And how does that impact your plans, if any, to come back to the bond market in the future?

Well, from S&P, we are expecting the unexpected. And to be honest, it's not affecting our activity.

The rating for Silicon given S&P methodology that once G City crossed 50% it is viewed in a group level and not as a stand-alone level. By the way, if you look at the report itself, it does give emphasize that the performance is stable and improving on a stand-alone basis. But once the rating is as such and clearly, from that point of time of the rating decrease G City had increased their stake to 86.4%.

So I don't think that our actions here are something that would be just for the sake of the rating. The secured financing is something that we're looking at because the terms are very favorable the market here was frozen, and there was no transaction regarding debt for years and now there's a lot of interest. It also echoes our quality of assets. And I think that when it's hot, I think one of our responsibility is to try to take and close secured financing to support our P&L.

Then we have an additional question coming. Congratulations for the results and the various efficiencies you are working on. Now that you have cleared a way until March '28, what is the next with the capital structure, once you raise more cash via secured debt or disposals?

We are considering a few channels. The money just arrived, still hot, warm. For the next few days, we secure it. We put it in a closed the account. And we will think what to do with it. But basically, we feel better that the money is in our bank account, and we will see how to leverage is to have the best benefit for our shareholders.

Then an additional question. You disclosed you bought EUR 5 million of the 2029 bonds in open market. Do you have similar plans for your hybrids?

Well, we are right now, again, we're having the cash. We're trying to do the conservative and responsible actions, which would be to clean the debt maturities that are coming due 2027, as mentioned. And I think that if we'll have excess of cash and we -- this is the reason why we will pursue more secured financing in the future, we would consider every option including buyback of hybrids, again, trying to be more opportunistic and supporting the P&L. So I think this is something yet to be seen, but it's an option on the table.

Thank you for the answers. So there are no further open questions on the lines. So I hand over back to you, Eshel and Hilik, for the closing words.

So again, I thank you for joining us. I'm happy to deliver a good result for the first quarter. And this is just the beginning. I believe that in the next quarter, we will have more details to tell you about the operational results.

I hope that I will be able to come with more, I would say, strong stories regarding divestment. By the way, all what we are negotiating regarding divestment is in book value. We got some proposals which are under the book value, and we reject them. So we are negotiating at the moment only what is the book value, and we have potential buyers. And I wish you all a happy weekend and thank you.

We welcome everybody. Thank you for coming, and we will shortly start to present our results for the 2025. We opened the camera just to show you that we are not an AI management. Hilik is the CFO. My name is Eshel, and I'm the CEO. And from now, we will go to the presentation. Thank you.

So we will start with the annual highlights. We can see that the like-for-like NOI grows by 5.4%, which is very good results. The retail economic occupancy is 95.5%. The retail average rent grow by 3.3% per square meter, and we come to EUR 27.7 per square meter. The like-for-like footfall grow by 2%. The sales tenant -- the sales grow by 1.7%, and we add EUR 51.1 million to our fair value. The NOI margin is 93.7%. The quarterly results for quarter 4 is like-for-like growth, 3.8%. The retail economic occupancy is 95.5%, 3.3% retail average rent growth per square meter. And again, we come to the price of EUR 27.7 per square meter. Footfall grow by 1.1%. The like-for-like sales grow by 2.1%. We gained in the fourth quarter, EUR 8.3 million to the fair value and the NRI margin is 92.9%.

The key achievement in '25, we actually deal with more than 500, I think, 522 contracts, which reflect 142,000 square meter. We have significantly reduced our operation and administrative costs. During 2025, we add EUR 51 million to our fair value. And we continue to divest non-core assets and we demonstrate the sales of Lippulaiva Residential by the fair value book, EUR 61.5 million. We actually repayment of EUR 830 million during the year, and we reduced our LTV by 240 basis, and we are now in 44.9% LTV.

We can see here how the NOI actually grow by the year by each country or what we call business unit. Norway, 3.2%; Sweden, 3.7%; Finland, 7.7% and the average is 5.4%. And on the right bar, you can see how the price per square meter grow during the quarters. And as I mentioned before, we stabilized at EUR 27.7. Here is some examples of marketing. We are acting in marketing very, I would say, aggressive. We actually, I can say, investing by the book almost 5% from our NOI, which is a huge amount of money. We are doing a lot of events to drive footfall to our assets. And we are doing it most of the time, I can say, successfully. A lot of events that drive footfall, and that's what we have to do as a landlord, and we will keep doing that, of course, next year.

Our portfolio is very healthy. You can see our top tenant on the left side, which actually 50% of them are grocery or hypermarket. And if you go -- if you look to the right, the highlight is that 83% of our tenants are not fashion, which is the most sensitive, let's say, sector in the -- among the retailers. So this is a very, very healthy portfolio.

Capital recycling. In '25, we divested Lippulaiva, as I mentioned before, we sold it in the book value, in the IFRS book value, EUR 61.5 million. And in 2026, we put sales on hold of EUR 510 million, while in the next, let's say, 24 months, we intend or we target to sell between half or between EUR 500 million to EUR 1 billion.

From here, I will give the floor to Hilik to run through the financial overview.

Hello, everyone. So I will start with the NRI. NRI has landed at EUR 209.2 million for the year versus EUR 214.7 million. That's minus 3.1%, and this is mainly to the divestments, which we completed in 2024. The EPRA earnings is landed at EUR 79 million. We're going to touch on the next slide, the main drivers for that. We have finished with EUR 0.43 earnings per share, which is in line with our guidance, which was EUR 0.41 to EUR 0.46. And looking at the next slide, you can see the development of the EPRA earnings bridge. We lost NRI from divestments in the year, EUR 18.4 million. But on the other hand, we had a very strong like-for-like growth of EUR 11.8 million. And also, in addition, we had increased costs, financial costs, aggregate of EUR 6.4 million. And then we landed at EUR 79 million for the year.

The quarter, we have the same pattern, slightly better bottom line, EUR 19.1 million versus EUR 20.2 million. With respect to the fair value change, we have -- in the last quarter, we gained EUR 8.3 million fair value gain, the whole year, EUR 51.1 million. That's a 1.4% of our whole portfolio, which is something that we are happy with. You can see that the -- we had a cap rate pressure coming from Finland. But on the other hand, we had -- again, this is coming from the solid leasing activity. So the overall impact was positive EUR 51.1 million.

As for the debt management, we've been very active in the debt front. We've repaid more than EUR 830 million of debt maturities and doing tendering. And we also issued a 2031 bond, EUR 450 million, extending our duration -- average duration and overall derisking the balance sheet. LTV dropped 2.4%, landing at 44.9%. And we're also post 2025 on January, we have successfully signed EUR 270 million of secured financing with an additional EUR 250 million upsized accordion. And that is a 3-year plus 1 plus 1. And overall, we are very -- have very productive discussions with various lenders, international and local, and we get a lot of interest and attractive term sheets that reflects our quality of assets.

The result of all the financing and refinancing that we've done in 2025, you can look at our scheduled debt maturities, and you can see that it's well staggered. We have bond 2026 that is coming due September, EUR 123 million and 2027 bond, EUR 129 million. And we have, of course, monitoring and have adequate liquidity for the year-end. And as mentioned in the financial review in the financing question, we gave -- provided more details around the secured RCF to have full transparency with all the customary terms, including ownership covenant of 60%, which is very standard from this kind of instrument. And I think on the key metrics, 2% down, like as mentioned before, loan-to-value 44.9%, net EBITDA traded lower at multiple 9, very stable ICR and a gradually increased average interest rate, which we will touch later in the Q&A.

From now on, I will highlight a few points that I believe that I have to clarify. So the first issue is the divestment. As I said, in the -- in the next 24 months, we are intend to sell between EUR 500 million to EUR 1 billion non-core assets. And I want to highlight, it's not a call to the creditors. So we don't have to sell our cash, our financial situation is very stable. It's not that I need the money in order to pay my debt or whatever. So we will continue to sell in the book value if there are buyers, they are welcome. If not, we can continue to work as usual. So this is regarding the divestment.

The asset value, there are 2 -- actually 2 lines that we are working in order to increase our value. The first one is to reduce our OpEx. We tenders almost all the services that we are getting. And we can see already in '26 that we will reduce our OpEx in some sector even dramatically. And the second leverage is the OCR. Today, the OCR of the company is low compared to the market, and they still have, let's say, 2%, 3% to increase the rent in all around the portfolio. Strengthen the balance sheet through the repayment of existing unsecured debt in compliance with the covenant. Hilik mentioned it. We want to always focus on our balance sheet, and we take care about it, and I feel very comfortable with it.

Regarding dividends, we will check case by case. And basically, our intention is when we will have free money and we pay our debt, we will introduce another option of distribute dividend.

And last, I want to thank all the Citycon's employees, wherever they are in the Nordic. They worked very hard in 2025 and continue to work hard at the moment. So really thanks for the good results and for the warm welcome that we get when we came here. Thanks again, and now we are open for questions.

[Operator Instructions]

The next question comes from Neeraj Kumar from Barclays.

A couple of questions on my side. So can you please update us on the status of the EUR 215 million secured financing you're in the process of signing? And also if you could help us with the use of proceeds of the EUR 270 million loan you signed earlier this year?

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

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

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

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

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

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

When the hybrid will come, we will consider it. We will do what is the best for the company. And as I said, regarding the dividend, whenever we will have money instead of sitting on our bank account, we will consider distribute dividend.

The next question comes from Othman El Iraki from Fidelity International.

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

Well, I think, look, we are a new management. We're looking -- we're very pragmatic people. I think right now, the unsecured market is limited to for us -- and I think the secured financing for us is a good way, a good path to experience, lower coupons and a very stable kind of unlocking of liquidity. And I think we have a lot of headroom. So I think this is the path that we're going to take for the time being.

Okay. Okay. And just maybe a follow-up on the RCF. So you're not looking to waive the covenant with your banks. I mean you would be using this...

Yes. First of all, it's not me to waive, right? This is the lenders.

If you can talk to the lenders, we'll be happy.

But second, I think the instrument itself, the kind of instrument is less -- is something that we can consider in the future. But look, we're trying to be very transparent with the terms and condition, and this is what we're trying to say. There's a 60% ownership covenant. GCD right now sits on somewhere around 59.5% before the MTO results. So we're taking the measures to monitor the risk, i.e., entering to secured financing upfront.

[Operator Instructions]

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

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

Good morning, everyone, and welcome to Citycon's First 9 Months 2025 Results Audiocast. My name is Anni Torkko, and I work in the Investor Relations here at Citycon.

Last night, we published our 9-month interim report. And in this audiocast, our CEO, Eshel Pesti, and our CFO, Eero Sihvonen, together with our incoming CFO, Hilik Attias, will present the results. Eshel will first go through our business and operational highlights. And after that, Eero, together with Hilik, will go through our financial results.

Please, Eshel, go ahead.

Good morning, all of you. Thank you for coming to our quarterly report results. Our portfolio is including above 1 million square meter, 76% of that is retail. And then, we have 187,000 square meter of office and storages. And the rest is residential and hotels. We have 28 mixed necessity-based centers: 1 in Estonia, 9 here in Finland, 6 in Sweden, 10 in Norway and 2 in Denmark.

We will go to the results now. We continue to deliver solid results. And it's clear that we are in the right direction of growth. Like-for-like NRI growth by 5.7%. The retail economic occupancy rate is 95.2%. The average rent per square meter is EUR 27.5 for the retail, and it's a growth of 2.7% in the last 9 months. The footfall grew by 1.5%, and the like-for-like tenant sales grew by 1.4%. We gain in our valuation EUR 42.8 million in the last 9 months. The NRI margin is 94%.

And here, we have the quarterly results. And you see that they are the same direction. We have a growth of 6.8%. The retail economic occupancy is 95.2%. The average rent is EUR 27.5. The retail average rent grew by almost 4%. The footfall growing by almost 3%. The sales grew by 1.6%, and the valuation grew by 8.6%. NRI margin is 95%.

Now, how the NRI divided between the -- portfolio between the countries. So Norway contribute 3%; Sweden and Denmark, 4%; and Finland and Estonia, 8.4%. And our mix results is 5.7% growth. And on the right side of the table, you can see the bar how the average rent per square meter growth in the last 12 months between the third quarter of '24 to the third quarter of '25, which is 2.7%, EUR 1.

This is the detailed NRI bridge. I will pay our attention to the higher bar, which is the 9 months results. You can see that actually we lost between the years EUR 15.2 million as a result of selling the asset -- or as a result of the asset that we sold last year.

And we finished less than EUR 5 million, less than that number. And what is donating to the increase of the NRI is the like-for-like in the properties, which give us EUR 6.8 million. And the Kista that we purchased 50% is another EUR 1.5 million, and the redevelopment, especially in Rocca in Estonia, donate for us another EUR 1.3 million. And actually, this is the explanation for this bridge.

Okay. Go ahead. From here, I want to actually give the floor to Eero, and I will use this opportunity to thank Eero on behalf of all the employees in Citycon and the Board member from the last 17 years. Eero print fingers, you can see all over the company. And I am privileged to work with him in the last, let's say, 1.5 months. And it's a secret asset that we have here in Citycon.

And I will welcome Mr. Hilik Attias. He is qualified. He is experienced. And the big advantage is he is young and motivated, and I'm sure that he will enter to Eero's shoes smoothly, and we will together take the company forward.

So thank you, Eero, and the floor is yours.

Thank you, Eshel, first of all for your kind words, and I have been honored and privileged to serve the company in this position now for a year again, and I'm sure that the company is in great hands with Eshel taking into account his very good track record and his operational capabilities and Hilik, who brings with him a long experience in listed retail real estate and his particular knowledge on everything that has to do with treasury and financing.

And on my behalf, I would like also to thank the shareholders and advisers for this and bankers, analysts for this period, and I'm sure that our paths will still cross because I will continue on the Board of Citycon and also for the next few months also as an adviser to the company.

But back to the agenda of the daily agenda. And net rental income, first of all, as Eshel mentioned, we ended up at EUR 2.5 million below at EUR 52.2 million on a quarterly basis, which was actually good achievement taking into account that we disposed assets. And as Eshel mentioned, it was a solid quarter operationally and our rents continue to grow. We had like-for-like rental growth for the quarter of 6.8%, also a very solid number. And for the first 9 months, our like-for-like net rental income growth was 5.7%.

Our operating profit for the first 9 months was actually very close to previous year's level, very close to '24 level due to the fact that last year in '24, we had clearly bigger restructuring costs. The EPRA EPS, we generated EUR 0.13 for the quarter, which was very close or actually the same as last year. And EPRA EPS excluding hybrid bond cost for the quarter was EUR 0.17 compared to the EUR 0.18 last year. And for the first 9 months, those numbers were EUR 0.33 for the first 9 months and -- EPRA EPS, and EPRA EPS excluding hybrid bond costs EUR 0.47. Solid numbers altogether.

Then, about the more detailed EPRA earnings bridge, first of all for the first 9 months, you can see that the net rental income was EUR 5.1 million below, but that was more than compensated on SG&A, which was lower by EUR 5.7 million for the first 9 months. But as mentioned, this number includes the quite substantial restructuring costs last year, and this year, in '25, we have obviously and actually had clearly less of those.

Then, hybrid bond interest for the 9 months are higher now because we refinanced and exchanged our first hybrid as part of our balance sheet derisking and refinancing, which we have been quite active in doing. And we ended up at EUR 59.9 million as a total 9 months EPRA earnings.

For the quarterly, net rental income was EUR 2.7 million below. But again, we need to keep in mind that we disposed assets in '24, and we had a strong rental growth during the quarter due to the good like-for-like performance.

And the financial income and expenses were actually on a quarterly level very close to previous year's level. Financial income and expenses was actually EUR 500,000 lower than last year and hybrid bond interest also. And these show that -- and these numbers demonstrate that we have quite well already absorbed much of the impact of the refinancing of the old legacy low coupon bonds.

Then the next topic is the property valuation, and Q3, as per usual, was an internal valuation quarter. We did receive, and we asked, as usual, the opinion from our regular advisers, appraisers, JLL for Finland and Sweden, CBRE for Norway, Estonia and Denmark. We have their confirmation that there were, in their opinion, no substantial changes in the cap rates during the quarter, so we just updated our rent roll and OpEx for the calculations, and the valuation ended up at a positive EUR 8.6 million for the quarter. And naturally, as we did not touch the cap rates, the average yield requirement stayed at 6.2% on average.

Then briefly about the very proactive debt management that we have maintained under the entire '25. So we have completed a total of more than EUR 750 million of debt repayments and tenders. And all of these have one thing in common, we have refinanced the short-term maturing debt and extended the debt maturity and thereby derisk the balance sheet, and this is a work that I'm sure that will continue with at least the same activity by Hilik and his team going forward.

During Q3, the most important achievement was the fact that we successfully refinanced and extended our revolving credit facility. We also increased that by EUR 50 million to EUR 250 million. That is now completely undrawn, so provides additional liquidity and buffer for the years to come, and the maturity, as mentioned, was extended and is now maturing in '29 with the potential of 1-year extension until 2030.

And here, I would like to thank our relationship banks for their very good cooperation and trust in the company in extending this facility. But like I said, the work will continue, and work will continue with my great successor, Hilik, and his team, and I wish Hilik all the success in his work.

And over to you, Hilik, now.

Okay. Thank you, Eero. And a special big thanks for you for setting solid foundations. And I'm Hilik Attias. I'm the incoming CFO, and I'm happy to be here. I'm going to walk you through these next slides.

So as of Q3 2025, our weighted average maturity was 3.7%, and the weighted average interest rate is 4.04%. And it's worth mentioning that we have also EUR 9.2 billion of unencumbered assets and a strong covenant headroom that give us financial flexibility in the future.

You could see in the debt amortization schedule that it's well staggered, and we are in the preparation of the upcoming bond maturities of EUR 300 million in September 2026 and in January 2027. Our total available liquidity was EUR 278.7 million, and this is before the closing of the secured RCF, which was increased by EUR 50 million.

As of our key credit metrics, as of Q3 2025, our loan-to-value was 46.9%, our net debt to EBITDA was 9.6%, our interest coverage ratio, 2.4%; and our weighted average interest rates, 4.04%, as mentioned. And of course, we are in compliance with all of our covenants. As for the 2025 outlook, as usual, towards the year-end, we are narrowing the outlook range. And you can see that our updated outlook is EUR 0.41 to EUR 0.46 for the EPRA earnings per share and EUR 0.6 to EUR 0.65 for the EPRA earnings per share excluding hybrids.

And with that, I'll hand it over to Eshel to walk us through our way forward. Eshel, please?

Thank you, Hilik. Thank you, Eero. I will focus on the fourth quarter, what is our goals? We will be busy with budgeting. And our operational assumption for the 2026 budget will be around 2 main components. The first one is the like-for-like net rental income growth, including especially leasing exceeding the CPI and G&A, sorry, and optimization and operational cost reduction.

On the financing side, we will focus to continue to be further strengthening and the re-risking of the balance sheet.

I want to thank you all again for your patience, and we will especially not take live questions today in this audio, as we, me and Hilik, are fresh and not be able to answer your serious question in a serious matter. So we promise you to do that in our next meeting.

I wish you all the best. Thank you very much, and have a nice weekend.