27 February 2020 13:02

Results at 31 December 2019

  • FFO: €3 million (+4.5%)
  • Rental income: €3 million, +2.3% (LFL +0.5%)
  • Net rental income: €136.6 million, +10.1% (+1.8% ex IFRS16[1])
  • Sales of retailers in Italian malls +0.5%; financial occupancy Italy 96.9%; Romania 97.6%
  • Average cost of debt 2.35%; ICR 3.8X[2]
  • EPRA NNNAV per share €10.92
  • Proposed dividend of 50 euro cents per share, in line with FY2018
  • The tenth corporate sustainability report approved


Today, in a meeting chaired by Elio Gasperoni, 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 2019.

“2019 was the first year of the 2021 Business Plan during which we believe we laid the solid foundation needed to successfully achieve our main targets.  The positive operating performance of our portfolio proves that our typical model based on a well-positioned, modern shopping center with deep local roots, works even in a lackluster market and provides the flexibility needed to change continuously based on the needs of retailers and shoppers.  This is why we moved ahead with our intense investment plan focused on remodeling and renewing the properties, improving the social and environmental impact while, at the same time, increasing our core results.  The 4.5% increase in FFO is in line with our guidance and allowed the Board of Directors to propose a dividend of €0.5 per share which confirms our ability to provide our shareholders with a compelling return” stated Claudio Albertini, IGD’s Chief Executive Officer. The solidity of the results and their consistency with the strategic guidelines were also recognized by the capital markets as the new EUR 400 million bond, the lowest coupon ever, was well received.  This allowed the Group to refinance debt well in advance and strengthen the financial structure.”




Retailers’ 2019 sales in the Group’s Italian malls were higher than in the same period of the prior year (+0.5%). Sales, particularly after a negative first quarter, recovered and remained positive in subsequent quarters. Even though the figure was lower than in the prior year, the trend for footfalls was similar, with a particularly negative first quarter and partial recovery in subsequent quarters which continued in January 2020 when footfalls were up 1.4%.  Footfalls were also impacted by the negative performance of a few hypermarkets, particularly those where remodeling and restyling was underway.

First quarter sales were, overall, affected by unfavorable weather conditions which weren’t in line with seasonal averages (above all in February and, subsequently, in May), while the second quarter was impacted by a calendar effect linked to the Easter holidays.  This was offset during the year by the good results of consumer electronics (+5.8%), food and beverage (+3.2%) and services (+8.2%) including dental offices, as well as the introduction of performing tenants and the positive performance of the centers restyled in 2019 (Fonti del Corallo and Casilino).

During the year 243 leases (138 renewals and 105 new leases) were signed with an average upside of 1.1%[3].

Occupancy remained at a high level (96.9%).



In Romania, the economy continues to perform brilliantly with GDP and consumption on the rise; these factors, along with careful and effective asset management, had a positive impact on the operating performance recorded in the year: the occupancy rate (97.6%) was higher compared to the 97.1% recorded in 2018.  The pre-letting and renegotiations carried out during the year resulted in significant upside (4.0%) on new leases. The combination of these factors contributed to the good performance of rental income which was 3.2% higher than in 2018.



Rental income rose 2.3% to €155.3 million explained by:

  • for around €2.8 million, higher revenue not like-for-like attributable to the 4 malls and retail park acquired in April 2018  and the opening of the expanded Gran Rondò Shopping Center in Crema in May 2018, partially offset by strategic vacancies linked to fit out work (Cinema Sarca and Super Aquileia);
  • for around €0.4 million, higher revenue like-for-like in Italy (+0.3%). Malls were up (+0.4%), while hypermarkets were basically in line with the prior year (+0.1%);
  • for around €0.3 million, higher revenue like-for-like in Romania (+3.2%).


Net rental income amounted to €136.6 million, an increase of 10.1% against the prior year (€126.3 million adj ex IFRS16; +1.8%).

Net revenue from services came to €0.9 million, slightly lower than in the prior year.                                                          The Porta a Mare project generated revenue from trading of €0.4 million attributable to the sale of 1 residential unit.

Core business Ebitda amounted to €125.2 million (€114.9 million adj ex IFRS16), an increase of 10.1% compared to 31 December 2018. The core business Ebitda Margin came to 77.5%, while the freehold core business Ebitda (relative to freehold properties) came to 79.7%.  

Net financial expense reached €36.8 million in 2019; this figure, net of the accounting impact of the last bond issue and restated in accordance with IFRS16 (€31.4 million), was 3.4% lower than in 2018.  The negative carry linked to the refinancing of future maturities also had an impact of around €0.3 million.

The Group’s portion of net profit amounted to €12.6 million in the year, lower than in 2018 due mainly to the change in writedowns and fair value adjustments which were negative for more than €72.8 million in 2019, versus negative €30.3 million in 2018.

Funds from Operations (FFO) rose 4.5% against 31 December 2018 to €83.3 million.



During the year IGD continued with its asset management activities at an intense pace, in line with its 2019-2021 Business Plan: in the fall two restyled centers were inaugurated, Casilino Shopping Center in Rome and Fonti del Corallo in Livorno: in both instances work was done on the interior and exterior of the centers in order to give them a new vitality and make them even more appealing, welcoming and comfortable for visitors. Remodeling work was also completed inside Le Maioliche (Faenza), Conè (Conegliano Veneto) and Porto Grande (San Benedetto del Tronto), while work continued on creating new retail units in the space previously occupied by the hypermarkets, which the Company is in the process of pre-letting; restyling of the Porto Grande center will also be finished.

Restyling of the interior and exterior of the Gran Rondò Shopping Center (Crema) was also completed and an extension, which will be used for a midsize store, is underway.

With regard to the Porta a Mare project, IGD’s most important mixed-use development project, in September the sale of Palazzo Orlando (an office building that is part of the Mazzini section) was finalized. Work continues on the Officine Storiche section, the heart of the project.  This section comprises an area of around 20,000 square meters, 15,000 square meters of which will be dedicated to retail with 30 stores, 10 restaurants and 1 fitness center; work is expected to be completed by the end of 2020.

The Piazza Mazzini section is basically finished: in the residential section 72 out of 73 units are sold/pledged.  Work is also being done on defining the enhancement project for the other three sub-sections where the focus will be on entertainment, leisure time, services and tourism/accommodations (a 4 star hotel is expected to be built).



The market value of the IGD Group’s real estate portfolio reached2,381.41 million, a decrease of 1.27% compared to December 2018. More in detail:

  • malls fell 1.16 % (-€18.3 million), with a gross initial yield of 6.52%. The difference is explained by, for around 50%, different DCF assumptions (rates, inflation, ERV) and for around 50%, changes in cash flow with regard particularly to variable revenue and caps on operating expenses;
  • hypermarkets were basically unchanged, showing a slight drop (- €2.0 million), with a gross initial yield of 6.06%.

In Romania the value of the real estate portfolio reached €150.3 million at 31 December 2019, lower than the €154.8 million posted at 31 December 2018, with a gross initial yield of 7.09%.

The Net Initial Yield, calculated using EPRA criteria, reached 5.4% for the Italian portfolio (5.5% topped up) and 6.1% for the Romanian portfolio (6.3% topped up).

The EPRA NNNAV reached €1,205.4 million or €10.92 per share.  The figure is 4.6% lower with respect to 31 December 2018.  This result reflects the drop in fair value and increased debt.



In 2019 we worked intensely also on the Group’s financial structure: in January IGD used the EUR 200 million senior unsecured facility (rate of 2.1%) granted year-end 2018 to repay a EUR 125 million bond (coupon 3.875%). IGD also obtained two investment grade ratings from two different agencies: in April S&P Global Ratings assigned IGD a rating of “BBB-“ (currently with a negative outlook) and then in October Fitch Ratings Ltd assigned IGD a “BBB-“ rating with a stable outlook. In November, lastly, IGD issued a €400,000,000 bond, expiring 28 November 2024, payable yearly in arrears at a fixed rate of 2.125%. The proceeds from the issue were used, in part, to repurchase part of a €300 million and a €162 million bond issue, expiring in 2021 and 2022, respectively, and, in part, to fully repay the bond expiring in 2021, as well as for general corporate purposes. The issue was well received by the market and initially oversubscribed by important, accredited domestic and foreign investors.  The main purpose of the above transaction was to reduce the cost of debt and extend current financial maturities.  The average cost of debt at year-end 2019 was 2.35% versus 2.65% at year-end 2018, while the interest cover ratio or ICR came to 3.8x[4] versus 3.5x at year-end 2018.

The IGD Group’s net financial debt was €1,162.6 million at 31 December 2019, (€1,108.1 million adj. ex IFRS16), higher with respect to December 2018 (€1.108 million) due entirely to application of the new IFRS16. The loan-to-value came to 47.6% (46.4% adj. ex IFRS16), while the gearing ratio was 0.95x (0.91x adj. ex IFRS16). These indicators were also affected by the decrease in the properties’ fair value.



The Board of Directors proposed that shareholders approve, subject to the approval of the financial statements for the year ending 31 December 2019 and the Board of Directors’ Report, a dividend of 50 euro cents per share (the distribution of a total of €55.2 million or 66.3% of the FFO).

The dividend yield on the stock price recorded at 26 February 2020 would be equal to approx. 8.6%.



In 2020 the Company will proceed confidently with the implementation of its investment plan. Officine Storiche in Livorno, the heart of the most important development project in the pipeline, will be inaugurated in 2020.  This investment will provide new revenue to support the FFO growth forecast in the Plan, which the Company estimates currently should be around +2% in 2020.

In light of the recent events relating to the Coronavirus emergency, the Company is monitoring the situation carefully and will fully comply with any ordinances issued by the authorities, both national and local.

The Group’s executives are carefully assessing the potential impact on the company’s performance and will provide an update on the FY 2020 FFO guidance when the 1Q results are announced (7 May 2020).



The Board of Directors also approved the Corporate Sustainability Report which was subject to Limited Assurance by PricewaterhouseCoopers which certified compliance with the most important international standards (the GRI Standards).

The report provides a better look at the sustainability strategy, particularly with regard to its three pillars: the material topics, specific sustainability risks, and the short/medium-term targets. With regard specifically to climate change and related risks, in 2019 IGD decided to address the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in the CSR.

In 2017 the Company launched the strategy «Becoming Great», which summarizes the company’s commitment to growth that is «Green, Responsible, Ethical, Attractive, Together». The performances of the company during the year described in the CSR are divided into chapters based on these categories:

  • Green: reduced consumption of electricity by 7.1%, thanks also to the solar panels installed (active in 7 shopping centers) and the use of LED lighting (found in 19 shopping centers); BREEAM IN USE certification for 2 more key assets (Esp in Ravenna and Puntadiferro in Forlì) for a total of 5 certified shopping centers; continued with the UNI EN ISO 14001 environmental certification process (20 centers are certified, in addition to the headquarters or 88% of IGD’s portfolio); the use exclusively, as of 2017, of renewable energy; support of sustainable mobility with the installation of 10 charging stations for electric cars in 5 shopping centers (and will reach 32 in 18 shopping centers by the end of 2020) and a solar powered charging station for electric bicycles at the Clodì Retail Park.
  • Responsible: number of employees increased 3.1% with the introduction of a new role, Digital Strategist; the third year of the Corporate Welfare Plan, with the participation of all employees; continued implementation of voluntary measures at shopping centers focused on shopping center safety involving earthquake proofing and the installation of anti-intrusion bollards in Italy and fire proofing in Romania.
  • Ethical: after receiving UNI ISO 37001 anticorruption certification in Romania, the process for obtaining the same certification in Italy was begun; a «whistleblowing» procedure was adopted; the Compensation Policy was updated.
  • Attractive: restyling was completed at Centro Casilino in Rome, Fonti del Corallo in Livorno and Gran Rondò in Crema (CR) which focused on increasing the appeal of the structures and the sustainability of the buildings; 716 free events were organized in the year for a total investment by the shopping centers of €3.8 million; further work was done on the innovation project with the systematic use of Instagram and the introduction of Amazon Lockers in 21 shopping centers.
  • Together: the “Social Borgo” project was launched at Centro Borgo in Bologna in order to understand and respond to local needs by working together as a team within the shopping center; the more than 16,600 jobs offered, the partnerships with approximately 895 local suppliers, the fact that local brands account for 43% of the brands found in the malls and the involvement of 367 local associations all confirm IGD’s social role within the community.



Calling of the Annual General Meeting in ordinary session

IGD’s Board of Directors also resolved to convene the Company’s Annual General Meeting in ordinary session on 9 April 2020, in first call and, if necessary, in second call on 10 April 2020, to resolve on the following agenda:

  1. Separate financial statements at 31.12.2019; Directors’ report on operations; External auditors’ report; Report of the Board of Statutory Auditors; Presentation of the consolidated financial statements at 31.12.2019; related and consequent resolutions.
  2. Allocation of the net earnings for the year and distribution of the dividend to Shareholders; related and consequent resolutions.
  3. Report on compensation in accordance with Art. 123-ter, paragraphs 3-ter and 6, of Legislative Decree n. 58/98:

3.1 first section: report on the compensation policy. Binding resolution;

3.2 second section: report on compensation paid. Non-binding resolution.

4. Authorization to buy and sell treasury shares; related and consequent resolutions.


IGD’s Board of Directors will propose that the shareholders, meeting in ordinary session, approve the payment of a dividend of €0.50 per share which equates, based on the recent stock price of €, to a dividend yield of approximately 1%.

The dividend will be payable as from 6 May 2020, with shares going ex-div (detachment of coupon n.  4) on 4 May 2020. Pursuant to Art. 83-terdecies of Legislative Decree n.58 of 24 February 1998, the shareholders of IGD at the record date (5 May 2020) will be entitled to receive the dividend.


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 by the shareholders on 10 April 2019, as follows:

Motivation: (i) support the stock’s liquidity; (ii) invest liquidity; (iii) allow for the use of the treasury shares in transactions pertaining to operating activities and business or financial 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 the shareholders’ authorization; 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 the Uniform Finance Act (TUF) and Art. 144-bis of the regulation adopted by CONSOB as per resolution n. 11971 of 14 May 1999 (the Regulations for Issuers), or any other applicable laws and regulations, as well as any market practices recognized by CONSOB.  More in detail, the purchases must be done in accordance with the methods referred to in Art. 144-bis, paragraph 1, letters a), b), c) and d-ter) of the Regulations for Issuers. The purchases may be made using other methods when allowed under Art. 132, paragraph 3, of TUF or other applicable norms in affect at the time of the transaction.

The shares may be disposed of, on one or more occasions, including before the maximum number of treasury shares allowed has been purchased. The disposal must be made in accordance with the law as well as, where applicable, any market practices allowed at the time of the transaction.

Assessment of independent status

IGD’s Board of Directors verified,  based on the information provided by the interested parties to the Company that the 7 (seven) independent directors (Luca Dondi dall’Orologio, Elisabetta Gualandri, Sergio Lugaresi, Livia Salvini, Rossella Saoncella, Timothy Guy Michele Santini and Eric Jean Véron) still qualify as independent in accordance with and pursuant to Art. 148, paragraph 3, of Legislative Decree n. 58/1998, the Corporate Governance Code promoted by the Italian Stock Exchange and Art. 16 of Consob Regulation n. 20249/2017.

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

The Board of Directors approved the Report on Corporate Governance and Ownership Structure, which forms an integral part of the annual report, as well as, in accordance with the recommendation of the Appointments and Compensation Committee, the Compensation Report, the first section of which, pursuant to Art. 123-ter, par. 3-ter of Legislative Decree. 58/98, will be subject to a binding vote by the shareholders during the next shareholders’ meeting, while, pursuant to Art. 123-ter, par. 6 of TUF, the second section – which refers to the compensation paid –will be subject to an advisory vote during the same shareholders’ meeting.


[1] Adj ex IFRS16: for the sake of comparability, some 2019 figures were restated excluding the impact of applying IFRS 16, in effect as of 1 January 2019

[2] Excluding the effects of the last financial transaction; with the effects the figure reaches 3.4X (adj. Ex IFRS16 around 3.3X)

[3] Excluding the lease for the multiplex cinema at Centro Sarca.

[4] Excluding the effects of the last financial transaction; with the effects the figure reaches 3.4X (adj. Ex IFRS16 around 3.3X)