3 March 2016 17:56

The Board of Directors approves the draft Separate and Consolidated Financial Statement at 31 December 2015

Growth path confirmed in 2015 

  • Group net profit: €45.6 million (versus €7.3 million at 31 December 2014);
  • Funds from Operations (FFO): €45.1 million (€0.056 per share), +28.5%;
  • Solid operating results: retailers’ sales in Italian malls up by 6.7%, occupancy improves (96.9% Italy; 93.9% Romania);
  • Market value of freehold assets: €2,082.01 million (+ 6.7%);
  • EPRA NNNAV per share: €1.25 (+1.6%);
  • Dividend of €0.04 per share proposed.

Other resolutions:

  • Calling of the Annual General Meeting.
  • Co-option of Luca Dondi dall’Orologio as independent director.
  • Approval of the annual Report on Corporate Governance and Ownership Structure.
  • Approval of the Compensation Report.
  • Authorization for the purchase and disposal of treasury shares.
  • Calling of the Annual General Meeting.

Today, in a meeting chaired by Gilberto Coffari, the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD” or the “Company”), a major player in Italy’s retail property market and listed on the STAR segment of the Italian Stock Exchange, examined and approved the draft separate and consolidated financial statements at 31 December 2015.

“2015 closed with results that were better than expected, including with respect to the Business Plan forecasts. We recorded excellent trends in sales and footfalls, in both Italy and Romania, and increased occupancy rates. The positive conditions of the financial market were taken advantage of in order to lower the cost of debt and we will continue to move in this direction over the next few months. The Group continued, therefore, to create value as demonstrated by the higher recurring results and NNNAV per share, as well as the proposed dividend”, Claudio Albertini, IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.’s Chief Executive Officer stated. “We also took advantage of an important opportunity to provide our shareholders with extra growth and, in December, acquired the Puntadiferro mall in Forlì. This transaction, along with the development projects that we are working on, like the new center in Grosseto that will open in the second half of the year, and the positive market trends, allow us to be optimistic about the results for 2016, as well.”


The shopping centers continued to perform well in 2015 with retailers’ salesat Italian shopping centers rising 6.7% (+4.6% excluding the mall extensions) and footfalls up by 1.6%; these results are supported by the domestic market conditions which have improved on several fronts (GDP, consumption, consumer and business confidence, industrial production).

Footfalls increased (+2.2%) in Romania where the general market conditions were particularly positive (GDP +3.6% and consumption +5%).

Occupancy improved in Italy (the average for malls and hypermarkets reached 96.9%) and, above all, in Romania (rising from 86.4% to 93.9%).

The IGD Group’s activities moved forward with great intensity in the year: in terms of operations and asset management, in May the new Clodì retail park (a retail park comprising a mall and a hypermarket with a total GLA of 16.900 m2) was opened in Chioggia (VE); restyling was also completed at two of the Group’s important centers, namely Centro Sarca in Milan and Centro Borgo in Bologna (in both instances extensive work was done on both the exteriors and interiors of the centers), as was the remodeling of the La Torre Shopping Center in Palermo (with the introduction of a multi-screen cinema and optimization of the food court); of note, lastly, was the sale in May of the real estate complex on Via Rizzoli, in the historic heart of Bologna, for approximately €29 million.

The purchase by IGD at the end of December of the Puntadiferro mall in Forlì was also of great strategic importance. The performance of this 97 unit mall which recorded almost 5 million footfalls in 2015, has an occupancy of 100%, as well as an excellent tenant and merchandising mix, guaranteed by the presence, among other tenants, of primary international retailers, is extremely significant for the Group. The mall is also located in an area that is strategic as the Group owns and manages several shopping centers in nearby cities.



Core business revenue amounted to €125.9 million, an increase of 4.5% against the same period of the prior year.

Rental income reached €121.1 million, an increase of 4.8% with respect to the same period 2014; the growth is explained by:

  • an increase in like-for-like(+0.3%) revenue in Italy. Malls were up (+0.4%) and hypermarkets were in line with the prior year. 151 leases were renewed and renegotiated in the period at conditions in line with the previous ones;
  • for approximately €6 million, by an increase inrevenue not like-for-like;
  • higher like-for-like revenue in Romania (+6.1%), supported by the positive results of pre-letting (occupancy +7.5 percentage points) and renegotiations (average upside +3.7%) completed in the period. The vacancies needed to proceed with the investment plan and other changes, rather, caused revenue to fall by €150,000;
  • the decrease in revenue (-€1.2 million) linked to the sale of the City Center property on via Rizzoli at the end of May 2015, and other minor changes (including strategic vacancies in the like-for-like perimeter and non-recurring revenue connected to indemnities received in 2014).

As for other sources of revenue, revenue from services dropped slightly (-1.1% or approximately – €60,000): the decrease is attributable to the drop in pilotage revenue (for approximately €250,000) linked primarily to the presence in 2014 of the business generated by the Centro d’Abruzzo expansion. Revenue for Facility Management amounted to €4.7 million, an increase of 2.8% as a result primarily of the new Chioggia mandate (May 2015), as well as the full year contributions of the Centro d’Abruzzo and Piazza Mazzini extensions. The Porta a Mare project generated revenue from trading of €2.3 million as a result of the sale of seven residential units and appurtenances, versus five residential units and appurtenances in the prior year.

Core business Ebitda amounted to €84.8 million,up 6.9% against 31 December 2014. Operating costs fell as a percentage of core business revenue, while the core business Ebitda Margin rose by 150 basis points to 67.3%.

Ebit came to €84.2 million, an increase of 55.5% against the same period 2014 due, in addition to the positive performance in EBITDA, to the positive impact of writedowns and fair value adjustments (+ €1.5 million).

A positive contribution also came from net financial expense which benefitted from the favorable market conditions that were taken advantage of to reduce the cost of debt, as well as the drop in financial payables linked to the capital increase completed year-end 2014.

The transactions of note completed in the period include the Bond Swap, which resulted of the issue in April of a new €162 million bond, coupon 2.65%, due 2022, offered in exchange for two prior issues (€144.9 million, 4.335% May 2017 and €150 million, 3.875% January 2019), the refinancing of two mortgage loans and the new short-term credit lines obtained at historically low spreads (approx. 0.3%).

The average cost of debt came to 3.67%, down significantly against the 4.03% recorded in 2014and Interest Cover Ratio reached 2.15x, higher than the 1.77x posted in 2014.

The Group’s portion of net profit amounted to €45.6 million, a decided increase against the €7.3 million recorded in 2014.

More significant than the comparison with net profit and core business revenue is the trend in FFO (Funds from Operations) which rose 28.5% against 31 December 2014 to €45.1 million (€0.056 per share).



The EPRA NNNAV reached €1,012 million or €1.25 per share, an increase of +1.6% against the €1.23 p.s. posted in 2014. If, however, the new shares issued as a result of the December 2015 capital increase are considered, the adjusted NNNAV p.s. reaches €1.13 and growth comes to 10.4%.

The market value of the IGD Group’s real estate portfolio reached €2,082 million, an increase of 6.7% with respect to 31 December 2014: the main changes are explained by the acquisition of the Puntadiferro mall in Forlì and the disposal of the city center property on via Rizzoli in Bologna for €29.4 million.

In Italy hypermarkets rose 2.8% (+€16.6 million) and the gross initial yield came to 6.34%; malls posted an increase of 2.1% (+€20.2 million) and a gross initial yield of 6.33%.

The market value of the Romanian portfolio at 31 December 2015 was €170.6 million, down with respect to the €175.3 million recorded at 31/12/2014, with a gross initial yield to 6.22%.

Financial ratios improved with the Loan to Value coming in at 47.3% and the gearing ratio at 0.93x. Net debt amounted to €984.8 million, an increase against 31 December 2014 (€942.0 million) linked to the investments and acquisitions made during the year.



In light of the persistence of the positive market conditions in Italy and Romania, the Company expects to continue along its growth path and to post higher revenue driven by the like-for-like perimeter, the full year contributions of the acquisitions and openings made in 2015, as well as the first results posted by the new openings made in 2016. Steps will also continue to be made to further reduce the cost of debt.

The Company, therefore, estimates that FFO will grow between 13% and 15 %.



IGD’s Board of Directors will propose that the shareholders, meeting in ordinary session, approve a dividend of €0.04 per share.

In 2014 IGD paid a divided of €0.0375 per share which, adjusted to reflect the issue of new shares linked to December’s capital increase reaches €0.035: the increase in the dividend against the prior year, therefore, amounts to 14.3%.

The dividend yield, based on the stock price recorded at year-end 2015, comes to 4.5%.



Calling of the Annual General Meeting

IGD’s Board of Directors also resolved to convene the Company’s Annual General Meeting in ordinary session on 14 April 2016, at 10:00 a.m., at the Company’s headquarters in Bologna, in first call and, if necessary, in second call on 15 April 2016, same time and place, to resolve on the following agenda:

  1. Separate financial statements at 31.12.2015; Directors’ report on operations; External auditors’ report; Report of the Board of Statutory Auditors; Presentation of the consolidated financial statements at 31.12.2015; Allocation of the net income and distribution of the dividend to Shareholders; related and consequent resolutions;
  2. Report on compensation in accordance with Art. 123-ter,paragraph 6, of Legislative Decree n. 58/98; related and consequent resolutions;
  3. Authorization to buy and sell treasury shares; related and consequent resolutions;
  4. Appointment of a member of the Board of Directors pursuant to Art. 2386 of the Italian Civil Code; related and consequent resolutions.

As mentioned above, IGD’s Board of Directors will propose that the shareholders, meeting in ordinary session, approve a dividend of €0.04 per share which equates to a dividend yield, based on the stock price recorded at year-end, of 4.5%.

The dividend will be payable as from 25 May 2016, with shares going ex-div on 23 May 2016. Pursuant to Art. 83-terdeciesof Legislative Decree n.58 of 24 February 1998 n. 58, the shareholders of IGD at the record date (24 May 2016) will be entitled to receive the dividend.


Co-option of independent director Luca Dondi dall’Orologio

Based on the proposal of the Nominations and Compensation Committee, the Board of Directors resolved to substitute John William Vojticek, who resigned in November 2015, by co-opting Luca Dondi dall’Orologio to act as an independent non-executive director of the Board of Directors pursuant to Art. 2386 of the Italian Civil Code.

More in detail, during the meeting held on 3 March the Nominations and Compensation Committee assessed the professional qualifications and experience, including managerial, of Luca Dondi dall’Orologio while also verifying compliance with all legal requirements and independent status, in accordance with Art. 148, paragraph 3, of Legislative Decree n. 58/1998, of the Corporate Governance Code promoted by the Italian Stock Exchange and Art. 37 of Consob Regulation n. 16191 of 29 October 2007, in light of the declarations received and the relative curriculum vitae.

The Board also resolved to propose that during the Annual General Meeting shareholders confirm Luca Dondi dall’Orologio as a director of the Company, pursuant to Art. 2386 of the Italian Civil Code, through the end of the current Board of Directors’ term, namely through the date on which the Annual General Meeting is convened to approve the financial statements at 31 December 2017.

To date, Luca Dondi dall’Orologio does not own any shares of IGD.

Luca Dondi dall’Orologio’s curriculum vitaeis available on the Company’s website in the section www.gruppoigd.it/Governance/Board-of-Directors. The report on the items included on the agenda for the Annual General Meeting will also be published on the Company’s website in the section www.gruppogid.it/Governance/Shareholders-Meetings along with the statements made by Luca Dondi dall’Orologio confirming that there are no reasons for ineligibility nor disqualification, that he meets the requirements for the office set by law and the corporate by-lawsand also qualifiesas independent.


Assessment of independent status

IGD’s Board of Directors verified – pursuant to Art. 148, paragraph 3, of Legislative Decree n. 58/1998, of the Corporate Governance Code promoted by the Italian Stock Exchange and Art. 37 of Consob Regulation n. 16191 of 29 October 2007 – that all the independent directors (Elisabetta Gualandri, Milva Carletti, Rossella Saoncella, Andrea Parenti, Livia Salvini, Matthew D. Lenz, Luca Dondi dall’Orologio) still qualified as independent.


Approval of the Report on Corporate Governance and Ownership Structure and the Compensation Report

The Board of Directors approved the 2015 Report on Corporate Governance and Ownership Structure, which forms an integral part of the annual report, as well as the Compensation Report, the first section of which, pursuant to Art. 123-ter, par. 6 of Legislative Decree. 58/98, will be voted on by shareholders during the next Shareholders’ Meeting held in ordinary session.


Approval of the Authorization to buy and sell treasury shares

The Shareholders will also be called upon to resolve on the authorization to purchase and dispose of treasury shares, after revoking the prior authorization granted, as follows:

– Motivation: to carry out (i) trading and hedging transactions and (ii) invest liquidity and allow for the use of the treasury shares in transactions pertaining to operating activities and business projects consistent with the Company’s strategic guidelines, in relation to which it is beneficial to trade, swap, contribute, or otherwise dispose of the shares;

– Maximum number of treasury shares which may be purchased: the purchases may be made on one or more occasions up to the maximum allowed under the law;

– Expiration of the shareholders’ authorization: the authorization to purchase treasury shares is requested for a period of eighteen months as from the date of today’s resolution; there is no time limit on the authorization to dispose of the shares;

– Methods and purchase price of the treasury shares: the purchases shall be made in accordance with Art. 132 of Legislative Decree 58/1998, Art. 144-bis of the Regulations for Issuers and all other applicable laws and regulations, as well as the accepted market practices recognized by Consob and must be purchased at prices satisfying the provisions of Art. 5(1) of European Commission Regulation EC 2273/2003 of 22 December 2003 or any other applicable provisions in effect at the time of the transaction.