Conference call 7 August 2014 3.30 p.m. Results presentation as at 30/06/2014
DISCLAIMER This presentation does not constitute an offer or an invitation to subscribe for or purchase any securities. The securities referred to herein have not been registered and will not be registered in the United States under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or in Australia, Canada or Japan or any other jurisdiction where such an offer or solicitatio n would require the approval of local authorities or otherwise be unlawful. The securities may not be offered or sold in the United States or to U.S. persons unless such securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. Copies of this presentation are not being made and may not be distributed or sent into the United States, Canada, Australia or Japan. This presentation contains forwards-looking information and statements about IGD SIIQ SPA and its Group. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding plans, performance. Although the management of IGD SIIQ SPA believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of IGD SIIQ are cautioned that forward-looking information and statements are subject to various risk and uncertainties, many of which are difficult to predict and generally beyond the control of IGD SIIQ; that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking statements. These risks and uncertainties include, but are not limited to, those contained in this presentation. Except as required by applicable law, IGD SIIQ does not undertake any obligation to update any forward-looking information or statements
Highlights 1/2 3 REVENUES € 61.8 mn • Total revenues (+2.1% vs 30/06/2013) € 60.3 mn • Core business revenues (-0.3% vs 30/06/2013) EBITDA € 39.9 mn Masterlease • EBITDA (core business) (-4.3% vs 30/06/2013) of Le Fonti del Corallo 66.1% mall • EBITDA margin (core business) (Livorno) (-2.7 percentage points) had a relevant effect on 77.8% • EBITDA margin from Freehold margins (-0.7 percentage points) € 4.5 mn Group Net Profit (+9.8% vs 30/06/2013) € 17.2 mn Core business Funds From Operations (FFO) (-6.3% vs 30/06/2013) 7 August 2014 1H2014 Results presentation
Highlights 2/2 4 € 2.13 NNAV per share ( € 2.22 as at 31/12/2013) Changes Total Portfolio Market Value € 1,849.5 mn mainly due to the sale of (-42 € mn vs 31/12/2013) Le Fonti del Corallo mall (Livorno) in € 1,690.6 mn Income related portfolio Market Value February for ( € 1,723.7 mn vs 31/12/2013) € 47 mn FINANCIAL OCCUPANCY at 30/06/2014 96.6% • ITALY • ROMANIA 86.3% 7 August 2014 1H2014 Results presentation
A “strong” half year… in line with the 2014 -2016 BP 5 NEWS Post 1H 7 July 2014 – BoD 14 February 2014 – Sale 3 March 2014 – Sale of 11 April 2014 – Private 30 May 2014 – DRO – approves the Capital of the mall “Fonti del the treasury shares to placement with Morgan Subscribed 77.8% (best Increase for € 200 mn Corallo” in Livorno ( € 47 Quantum Strategic Stanley of non secured result since its and acquisition of core mn, in line with the Partners (about € 12 mn) senior bond of introduction), for an assets for € 94.8 mn Book Value) € 150,000,000, 3.875% amount of about € 14 mn 10,000,000 IGD's volumes (pieces) 9,000,000 FTSE MIB 8,000,000 IGD 7,000,000 6,000,000 5,000,000 Share price: + 50% (1 Jan – 30 Jun; FTSE MIB +13%) Traded volumes: + 300% (6 months 2014 vs 6 4,000,000 months 2013) 3,000,000 2,000,000 1,000,000 0 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 7 August 2014 1H2014 Results presentation
ECONOMIC CONTEXT
7 The Italian economic context in 1H 2014 Consumption trend (change %) GDP trend (change %) Retail investments in Italy € 1,400 2.0% 2.0% € 1,200 1.5% 1.5% € 1,000 1.5% 1.2% 1.1% € 800 1.0% 1.0% 0.8% € 600 € 400 0.3% 0.5% 0.5% 0.1% € 200 0.0% € 0 0.0% 2014 2015 2016 2014 2015 2016 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Data source: sample averages institutes and researches Data source: sample averages institutes and researches Data source: CBRE Outlook • GDP: The forecast for 2014 has been revised downwards by several institutions (BDI, IMF, OECD), despite some positive signs in the early months of the year (household consumption, industrial production). Also in 2Q the GDP recorded an unexpected decline (-0.2%). Recovery will be slow, while a higher growth is expected for 2015. (Confindustria, Istat) • Inflation in June stood at 0.3%; the annual value is expected to decrease compared to 2013 (0.7% vs 1.2%) (Istat). • Unemployment stood at about 12.3% in June 2014 and substantial stability is expected for 2014. (Istat) • Consumption : in 1Q 2014, for the first time since the beginning of 2011, household spending increased, even if marginally (+0.1%). A similar trend is expected for the rest of the year. Recovery in consumption, despite improvements in confidence by households and companies, slowed down due to various factors such as taxation, unemployment, credit crunch, renewed savings and uncertainty about the economic outlook. (Confindustria) • Retail investments : The volume of retail investments in the second quarter of the year has started to grow again, exceeding 30% of the quarterly average of the last three years. The amount invested in the second quarter, € 645 mn, doubled that of the previous quarter, driven by two major portfolio acquisitions which on their own represented 60% of the total volume (Klepierre and Blackstone) .(CBRE) 7 August 2014 1H2014 Results presentation
8 The Romanian economic context in 1H 2014 GDP trend (change %) Consumption trend (change %) 4.0% 4.0% 3.5% 3.5% 2.9% 2.9% 2.8% 2.9% 2.9% 3.0% 3.0% 2.5% 2.5% 2.5% 2.0% 2.0% 1.5% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% 0.0% 2014 2015 2016 2014 2015 2016 Data source: sample averages institutes and researches Data source: sample averages institutes and researches Outlook • GDP : resulted in further growth compared to 2013 due to positive industrial production (with a significant growth in exports), the recovery in construction and household consumption. (Raiffeisen research) • The exchange rate as at June 2014 was equal to about 4.3 ron/euro (BNR) • The inflation rate recorded in June ( 1.8% ) was significantly lower compared to 2013 (4.0%), mainly due to the decline in food prices and the cut in prices of electricity and natural gas. The annual value for 2014 is expected to be around 1.9% . (Raiffeisen research). • Unemployment in 1H 2014 remained steady compared to the previous quarter, settling at about 7.1% (BNR) • Consumption in 1Q 2014 increased compared to the previous quarter (+3,0%) and it is expected to reach about +3.0% at the end of the year, thus supporting the growth of GDP . (Raiffeisen research) • Retail investments: In 1H 2014, there were no new shopping center openings in Romania and only 2 projects were under construction, with finish date expected by the end of the year. The shopping center market in Romania is thus expected to be substantially stable throughout 2014. (CBRE) 7 August 2014 1H2014 Results presentation
ECONOMIC AND FINANCIAL RESULTS
Revenues 10 BREAKDOWN OF TOTAL REVENUES BY TYPE TOTAL REVENUES ( € /000 ) OF ASSET 60,546 61,829 Total revenues 0.2% +2.1% 0.3% 1.385 MALLS 2.514 2.710 7.3% 1.4% Core business HYPERMARKETS -0.3% Revenues from trading CITY CENTER 31.1% Revenues from services OTHER 59.7% 57.734 58.032 Revenues from rental ROMANIA activity "PORTA A MARE" PROJECT 30/06/2013 30/06/2014 7 August 2014 1H2014 Results presentation
Rental income drivers ( € /000) 11 49 262 -572 370 LFL Italian Centro Strategic Romania (LFL) Strategic Porta a mare Total change revenues d'Abruzzo vacancy and vacancy extension other Italy Romania -298 - 11.9% +0.7% -499 93 -0.5% Not including strategic Includes the positive effect of Not including strategic vacancy LFL -11.9% vacancy due to the downside drag on renewed contracts +0.7%. There was a Darsena Shopping Center direct in 2H 2013 and 1Q 2014, higher average confirmed growth in management and other minor vacancy and reletting in progress (exit of a bank HYPERMARKETS (+1.7%) due to changes that compensate in 3Q 2013 that produced -3% LFL). indexation and to normalization of negative changes caused by From April, monthly rental amounts started to rental activity after start-up. MALLS instrumental vacancy. grow again € 0.750 mn in June vs € 0.705 mn in held the ground well (+0.1%). February. Occupancy increased too (vs FY 2013) 7 August 2014 1H2014 Results presentation
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