Immobiliare Grande Distribuzione SIIQ S.p.A. · MIL:IGD
Immobiliare Grande Distribuzione SIIQ — IGD SIIQ — Investor Presentation (November 2010)
33 slides from Immobiliare Grande Distribuzione SIIQ's investor presentation, Nov 11, 2010
Slide 1: Strategic Review Presentation
Strategic Review Presentation 11 November 2010
Slide 2: Disclaimer
2 Disclaimer 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 reg
Slide 3: Agenda
3 Agenda COMPANY PROFILE REVIEW OF THE 2009-2013 BUSINESS PLAN 11 November 2010
Slide 4: Group Structure
4 Group Structure 100% 100% Immobiliare Millennium Larice Gallery 15% 100% 60%(*) 50% Iniziative WinMagazine Bologna Nord 100% 100% 100% WinManagement RGD GestioniSrl New Mall Srl (*) Porta Medicea is 80% consolidated on the back of the Put&Call option on the 20% minority stake. 11 November 2010
Slide 5: Governance and Shareholders
5 Governance and Shareholders IGD BOARD OF DIRECTORS: Board of Directors was Lead Related-parties renewed by the AGM on Audit Nom ination Com pensantion Non-executive Executive Indipendent Com m itte Com m ittee Com m ittee Independent Transaction 23 April, 2009 Director Com m itteee Gilberto Coffar
Slide 6: A unique portfolio in Italy
6 A unique portfolio in Italy FREEHOLD PROPERTIES REGIONS WITH IGD PRESENCE: 11 Lombardy Trentino MARKET VALUE 3 Shopping Malls 1 Shopping mall as of 30 June 2010 ( o/w 1 RGD) (including RGD): Veneto Piedmont 1,593.06 mn € 3 Shopping Malls 1 Plot of land (o/w1 RGD) 1 Shopping mall opening soon 1 Ret
Slide 7: Winmarkt's Portfolio
7 Winmarkt’s Portfolio PRESENCE IN ROMANIA IN 13 MEDIUM-SIZED CITIES MARKET VALUE as of 30 June 2010: 183.8 mn € FREEHOLD PROPERTIES: 15 SHOPPING MALLS 1 OFFICE BUILDING SHOPPING MALLS’ YIELD: 8.34% AVG. OCCUPANCY: 77% 11 November 2010
Slide 8: Main lease terms
8 Main lease terms for: ITALIAN SHOPPING MALLS ITALIAN HYPERMARKETS ROMANIAN SHOPPING MALLS Average maturity: Average maturity: Average maturity: Lease agreement of the going concern: 18 years + 6 years 2 years for local tenants 6 years + 6 Rents’ indexation: 5 years for national tenants rental agre
Slide 9: Next openings
9 Next openings Shopping mall Shopping mall LA TORRE CONE’ Palermo, Sicily Conegliano (Treviso), Veneto Opening date: 23 November 2010 Opening date: 25 November 2010 Investment: 55 mn € Investment: 72.2 mn € GLA of the shopping mall: 12,758 sqm GLA of the shopping mall: 11,900 sqm Location: Sicily,
Slide 10: Agenda
10 Agenda COMPANY PROFILE REVIEW OF THE 2009-2013 BUSINESS PLAN 11 November 2010
Slide 11: Why a strategic review instead of a 2010-2014 plan?
11 Why a strategic review instead of a 2010-2014 plan? WHAT WE NEED TO UPDATE REASONS FOR KEEPING A 2013 TIME HORIZON In 2010 we faced an operating environment much harder than expected Consumption scenario uncertainty In Romania a deep fall in consumptions while restructuring tenants’ portfolio gen
Slide 12: Targets
12 Targets Despite a 2010 harder-than-expected operating environment and a still uncertain macroeconomic outlook, we confirm the previous strategic guidelines and leave the targets substantially unchanged ITEM 2009-2013 BP REVIEWED TARGETS TARGETS INVESTMENTS (cash out) 750 mn € 750 mn € + 100 mn €
Slide 13: Assumptions - Italy
13 Assumptions - Italy 2010 2011 2012 2013 CPI forecasts are on average 0.3 bp higher vs. one year ago CPI +1.5% +1.6% +1.6% +1.8% * Source: IGD elaborations on Prometeia and IFM forecasts 2010 2011 2012 Consumptions’ recovery Consumption recovery expected expected toto remain sluggish CONSUMPTIONS*
Slide 14: Assumptions - Romania
14 Assumptions - Romania 2010 2011 2012 2013 CPI +5.9% +5.2% +3.0% +3.0% Source: IMF Winmarkt contracts are euro-linked; the business plan model therefore does not consider Romanian CPI forecasts. €/Ron 4.20 4.20 4.20 4.20 Source: Winmarkt-IGD elaborations Consumptions The macroeconomic outlook rema
Slide 15: Retail property market in Italy – 1/2
15 Retail property market in Italy – 1/2 Investments in Italian real estate sector •Source: Jones Lang LaSalle, October 2010 Key findings by J.L.LaSalle research: Investments in Italian real estate sector increased in 2010, giving a substantial stability in tenants’ sales. Performances of shopping c
Slide 16: Retail Property Market in Italy – 2/2
16 Retail Property Market in Italy – 2/2 FAIR VALUE EVOLUTION EXPECTED 2009 2010 2011 2012 2013 Caution Moderate optimism 9Focus on committed pipeline 9New investment opportunities 9Re-qualify existing portfolio Stable LFL rental revenues Moderate growth in rental revenues Flat rent growth expected
Slide 17: Retail Property Market in Romania
17 Retail Property Market in Romania Real Estate Investments (mn €) Encouraging signals from the real estate market in Romania: 87% of total volumes of 2010 transactions represented by retail assets (mainly shopping centres and retail warehouses) In H1 2010, with a record level of retail investments
Slide 18: Investment strategy – main drivers and changes
18 Investment strategy – main drivers and changes Pipeline confirmed both in terms of new investments EXECUTION OF PREVIOUS PIPELINE CONFIRMED and of extensions/re-stylings The cancelled investment in Gorizia to be replaced by a similar investment For the first time in IGD history, the investement p
Slide 19: Investments – Timetable and amounts
19 Investments – Timetable and amounts Investment cash-out Previous 2009 2010 2011 2012 2013 Amount Total amount (mn euro) years in the Plan invested 1 GUIDONIA 90 118.5 2 CATANIA GALLERY 14.4 59.0 3 CATANIA HYPERMARKET 39.5 39.5 4 FAENZA 85.3 85.3 5 ASTI 5.1 45.0 6 VIBO VALENTIA 30.0 30.0 7 PALERMO
Slide 20: Investments by asset class
20 Investments by asset class 11 November 2010
Slide 21: Disposals
21 Disposals We expect some 160 mn € of proceeds from disposals over the 2009-2013 period (they were 60-70 mn € in the previous 2009-2013 BP) DISPOSAL OF A 20% STAKE IN PORTA MEDICEA Completed Completed in in 2010 2010 for for 13.2 13.2 mn mn € € (book value was 12 mn €) Postponed from 2011 to the t
Slide 22: Commercial strategy – Guidelines
22 Commercial strategy – Guidelines Proactive merchandising and tenants’ mix Strong food anchors Presence of strong food anchors provides shopping centres with higher resiliency in footfalls and sales in a critical consumption scenario New attractive brands Continuous research of new brands, favouri
Slide 23: A good starting point
23 A good starting point Tenant quality and mix is key to ensure high occupancy rates and visibility of rents. Sizeable weight of hypermarkets We already enjoy a favourable structure Well-diversified and high-profile tenant 54% of contracts expire beyond mix in our galleries 2013 Top 10 tenants in g
Slide 24: New commercial initiatives
24 New commercial initiatives OPTIMIZING MARKETING Launch of a project for a central co-ordination of marketing plans of PLANS shopping malls: 9Focus on cultural, social and sport initiatives 9Attention to local issues and flavour Transfer of best practices Economies in repeating successful events i
Slide 25: Romania still enhancing consolidated EBITDA margin
25 Romania still enhancing consolidated EBITDA margin STRENGTHS CONFIRMED 9EBITDA margin remains well above Group average IN A HARD ENVIRONMENT 9Downtown locations provide strong resilience to asset market value Prompt reaction to a deep fall in consumptions In 2009 and in H1 2010, in the midst of t
Slide 26: Romania – Focus on commercial strategy
26 Romania – Focus on commercial strategy 9Expand merchandising offer: introduce neighbourhood supermarkets 9Enhance presence of domestic and international retail chain stores 9Starting from 2011, introduce international apparel brands and personal care offer INDICATORS OF PORTFOLIO CONSOLIDATION UN
Slide 27: Romania – Focus on occupancy optimisation actions
27 Romania – Focus on occupancy optimisation actions At Winmarkt occupancy Differently from the Italian assets, in the Winmarkt portfolio the GLA is not a fixed is more flexible than in figure: it can change since we can shape areas on the back of tenants’ specific the Italian portfolio needs (no wa
Slide 28: Romania - Cost efficiency
28 Romania - Cost efficiency STRUCTURE COSTS Costs reduced through more effective organisation: 9Enhancing the quality of marketing team 9Cutting consultancy fees 9Reducing fringe benefits to top management ENERGY COSTS All Winmarkt electric energy contracts now with 1 domestic operators, chosen thr
Slide 29: Human Resources
29 Human Resources Headcount number stabilising over time Avg. age of headcounts: 39 years Graduated: 65% 2010-2013 PERIOD + 12 staff units in Italy (of which 6 at head office) Limited perspective headcount growth - 16 staff units in Romania, mainly linked to paving the way to disposals EBITDA margi
Slide 30: Finance strategy
30 Finance strategy Peak gearing of 1.5 unchanged, even though 2011 PEAK GEARING (D/E) = 1.5 x gearing should be lower Previous target was 65% KEEP LTV < 60% Presently LT debt weight is 83.3% KEEP CAPITAL STRUCTURE BALANCED LT debt duration = 12 y NEW CONVERTIBLE BOND CONDITIONS Lengthening of the e
Slide 31: Further growth options
31 Further growth options The review of the 2009-2013 business plan does not include any M&A activity but: AGGREGATION CRITERIA CONFIRMED AGGREGATING RETAIL – A 6.3-6.5% yield, in line with IGD’s one PROPERTY PORTFOLIOS remains a growth option – D/E < to the IGD’s gearing ratio – Contribution value:
Slide 32: Final remarks
32 Final remarks STRATEGIC Strategy and target continuity despite 2010 was GUIDELINES harder-than-expected CONFIRMED PROMPT Adaptive approach to investments and commercial REACTION TO strategy in order to face the negative impact of CRISIS consumption weakness FOCUS ON In spite of a more cautious ou
Slide 33: Contacts
33 Contacts IGD Immobiliare Grande Distribuzione SIIQ SpA www.gruppoigd.it IR TEAM Claudia Contarini, IR T. +39 051 509213 M. +39 3386211738 claudia.contarini@gruppoigd.it Elisa Zanicheli, Assistant T. +39 051 509242 elisa.zanicheli@gruppoigd.it 11 November 2010