Immobiliare Grande Distribuzione SIIQ S.p.A. · MIL:IGD
Immobiliare Grande Distribuzione SIIQ — IGD SIIQ — FY2023 Earnings Presentation
57 slides from Immobiliare Grande Distribuzione SIIQ's earnings presentation, Feb 27, 2024
Slide 1: 2023 Results Presentation
2023 Results Presentation Conference call 27 February 2024
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an offer or an These statements include financial projections and invitation to subscribe for or purchase any securities. estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect The securities r
Slide 3: 2023 in a nutshell
2023 in a nutshell OUR «SPACES TO BE LIVED IN» CONFIRMED STRONG OPERATING PERFORMANCES* Tenant sales +4.3% (vs 2022) Footfalls +4.5% INAUGURATION OF OFFICINE STORICHE a further milestone in our Business Plan pipeline €650MN DEBT REFINANCED Rating investment grade confirmed ** *Italian malls **FITCH
Slide 4: Highlights: revenues and ebitda improve but the cost of debt increases
Highlights: revenues and ebitda improve but the cost of debt increases Δ vs Like for FY2023 2022 like* Net Rental Income €119.6mn +4.9% +7.1% Core Business Ebitda €108.2mn +4.6% Funds From Operation (FFO) 55.4 €mn -17.5% Real Estate Portfolio Market Value €1,968.1mn -5,4% (excluding leasehold) Epra
Slide 5: Operating Performances
1 Operating Perfomances
Slide 6: Strong operating performances…
Strong operating performances… Footfalls +4.5% ITALY MALLS ITALY HYPER Tenant sales +4.3% IGD Group’s Number of tickets +3.9% hypermarkets and supermarkets sales Spending on each +0.4 € +3.9% purchase +1.4% Figures FY23 vs FY22 6
Slide 7: … with almost all the merchandise categories growing
… with almost all the merchandise categories growing Slowdown after years of significant Tenant sales Italy growth FY23vs22 Clothing Household Culture, Personal and Electronics Restaurants Services Weigths on total goods leisure and healthcare rents Italian Malls (49.3%) gift items (8.7%) (10.0%) (7
Slide 8: The leasing activities in Italy … ca. 97%
The leasing activities in Italy … LEASING ACTIVITIES OCCUPANCY - 40 bps vs FY22 95.3% +10bps vs 1H23 • 188 new contracts (representing approx. 13.5% of Group’s total rent) of which 135 renewals and 53 turnover COLLECTION RATE ** • Stable rents (-0.45%*) ca. 97% FY 2023 Some pictures from the latest
Slide 9: … confirms the dynamism of «brick&mortar» retail
… confirms the dynamism of «brick&mortar» retail In 2023: 2021-2023 91 new brands of which > 15,700 m2 22 in 2023 Re-let (4% rotation rate) Part of the best performing merchandise categories: > 15,800 m2 CLOTHING 4 New opening (Officine Storiche) CULTURE, LEISURE AND GIFT ITEMS 7 83 New RESTAURANTS
Slide 10: Inaugurated in Livorno a new iconic destination for shopping and entertainment …
Inaugurated in Livorno a new iconic destination for shopping and entertainment … OFFICINE STORICHE LIVORNO >16,000 m2 GLA 11 restaurants 1 fitness center 1 entertainment area Officine Storiche entrance 16 shops Next opening Overview of the Porta a Mare area 2H24 10
Slide 11: … a big success!
… a big success! FOOTFALLS OCCUPANCY* First 4 months 95.6% since opening >910,000 * Opened and pre-let units 11
Slide 12: Good news also in Romania … ca. 98%
Good news also in Romania … LEASING ACTIVITIES OCCUPANCY -180bps vs FY22 96.2% -60bps vs 1H23** • 662 new contracts of which 515 renewals and 147 turnover COLLECTION RATE* • Upside: +1.94% ca. 98% FY 2023 Some pictures from the latest opening *Figure as at 22 febbraio 2024 **Mainly due to the exit o
Slide 13: … where IGD’s assets confirm to be attractive and improve their carbon footprint
… where IGD’s assets confirm to be attractive and improve their carbon footprint Enhanced partnerships with premium brands : 147 • The second largest fitness club chain in Romania • 3 fitness clubs New stores opened • 3,500 m2 of which 2 • Fast fashion brand new brands • 2 stores • 1,700 m2 Installe
Slide 14: Marketing: focus on digitalisation and partnerships with tenants
Marketing: focus on digitalisation and partnerships with tenants SPOTLIGHT PARTNER PROJECT: PROJECT: improve partnerships with tenants increase in CRM contacts and loyalty 1. WITH COOP ALLEANZA 3.0 in 11 Shopping Centers Communication: C. 15M Coop leaflets distributed about news, events • First IGD
Slide 15: Events in IGD shopping centers are increasing and renewing
Events in IGD shopping centers are increasing and renewing 555 EVENTS ORGANIZED (+4% vs 2022) GUIDELINES TERRITORY/ LOYALTY SOCIALITY ENTERTAINMENT COMMUNICATION EXPERIENCE Implement CRM Enhance the Offer advanced Enhance Make shopping for targeted shopping center leisure communication esperential a
Slide 16: Progress on sustainability targets in line with 2022-2024 BP
Progress on sustainability targets in line with 2022-2024 BP 68.8% ACHIEVEMENT LEVEL OF SUSTAINABILITY TARGETS AT FY2023 • The path defined in the 2022-2024 Business Plan is confirmed • Targets to reduce Scope 3 emissions in line with SBTI* are being defined *Science Based Target Initiative 16
Slide 17: Sustainability: what we did in 2023
Sustainability: what we did in 2023 Opened Officine € 3.9 mn invested in Launched «Progetto Integration of CSR Storiche in Livorno Green secured loan improving energy People» risks within the ERM and the Portogrande obtained efficiency in Italy and started restyling with Romania 100% employees intev
Slide 18: Sustainability: the actions underway to reduce the portfolio environmental footprint
Sustainability: the actions underway to reduce the portfolio environmental footprint Energy purchased from renewable • 13 photovoltaic systems (ITA+ROM) in 12 sources for 94% of the total shopping centers, with overall power equal to electricity consumed in Italy 2.9 MWp (6.3% produced energyout of
Slide 19: Portfolio
2 Portfolio
Slide 20: IGD’s portfolio market value…
IGD’s portfolio market value… + 90bps from 2019 Italy + 60bps from 2019 Romania Significant increase in Yields since the Pre-Covid years 20
Slide 21: … and its evolution
… and its evolution ITALY ROMANIA € 2,080.9mn € 1,968.1mn The change in FV is due to the increase in rates applied: • Actual Yield Italy 8.24% (+69 bps); • Net Exit Yield Italy 6.95% (+69 bps); • Actual Yield Romania 8.89% (+58 bps); • Net Exit Yield Romania 7.25% (+40 bps) Project and Change in mar
Slide 22: Restyling Portogrande completed
Restyling Portogrande completed RESTYLING COMPLETED Inauguration 23 november Malls: • Floor, walls and windows • Relamping LED Exterior: • New facades, entrances and lighting systems • Photovoltaic system • New green areas 22
Slide 23: Lungosavio fully operational after the floods
Lungosavio fully operational after the floods • Centro Lungosavio is the only BEFORE IGD center hit hard by the flood in Emilia Romagna in May 2023 • Hypermarket: re-opened in June 2023 • Shops in the mall: progressive AFTER reopening starting from July 2023 • Commercial remodeling ongoing to create
Slide 24: The restyling in Centro Leonardo continues
The restyling in Centro Leonardo continues COMPLETE RESTYLING: Mall: • New layout of common areas • Relamping with LED lighting system Estimated end of work: 2Q 2024 Exterior: • New entrances • Green areas • LED lighting system Estimated end of work: end 2025 24
Slide 25: Officine Storiche residential
Officine Storiche residential 42 flats 30 units sold 5 binding proposals CASH IN: c.7€mn 2022 c.6€mn 2023 c. 4€mn exp. 2024 25
Slide 26: Investment pipeline 2022-2024 c. 80€mn
Investment pipeline 2022-2024 • The Business Plan investment pipeline amounts to approx. 80€mn (slightly lower than the 82€mn initially expected) • No further development projects post 2024 20€mn c.80€mn 11€mn ~18 25€mn 9€mn ~30 35€mn Porta a Mare Project ~12 ESG Investments Asset renewals Non commi
Slide 27: Economic and Financial Results
4 Economic and Financial Results
Slide 28: Net rental Income
Net rental Income change vs 2022 +5.6 €mn +4,9% €mn Like for like (+6.7€mn +5.3%): 2023 Change LFL Net Rental Income • Malls (+4.7€mn; +4.7%) (€ mn) (%) • Hypermarkets (+1.4€mn; +5.9%) Italy 111.7 7.3% • Romania (+0.6€mn; +6.9%) Romania 7.9 4.9% Non like for like (-1.6€mn) Consolidated 119.6 7.1% So
Slide 29: Core business Ebitda and Ebitda margin improved …
Core business Ebitda and Ebitda margin improved … Var. vs 2022 +4,8€mn +4,6% €mn Core business 2022 2023 EBITDA 71.6% 72.1% MARGIN EBITDA 2022 2023 MARGIN 73.5% 74.1% freehold Some figures may not add up due to rounding 29
Slide 30: … but rising interest rates affected financial management
… but rising interest rates affected financial management IFRS16 and non recurring charges Financial management Adj * : +15.5€mn vs 2022 (+56.9%) * Financial management adj: net of IFRS16 and IFRS9, non recurring charges (including quota of the over the par redemption) 30 Some figures may not add up
Slide 31: Funds From Operations (FFO)
Funds From Operations (FFO) Of which: +4.8 €mn change in core business Ebitda; -0.6 €mn increasing payable leases; -0.4 €mn other non recurring items Change vs 2022 -11.8€mn -17.5% FFO FY2023: €55 mn Guidance ≈ € 53mn EXCEEDED *Financial management adj: net of IFRS16 and IFRS9, non recurring charges
Slide 32: Capital and Financial Structure
5 Capital and Financial Structure
Slide 33: Epra indicators
Epra indicators € per share FY 2023 FY 2022 Δ% NRV 9.22 10.28 -10.3% NTA 9.15 10.20 -10.4% NDV 9.00 10.06 -10.5% Some figures may not add up due to rounding 33
Slide 34: Net debt and LTV
Net debt and LTV NET DEBT FY2022 NET DEBT FY2023 € 976.9 mn € 968.4 mn √ Cash produced Long term financial even after the Strumenti finanziari a instruments Strumenti finanziari lungo terminea Long term financial instruments dividend payment 991.01 lungo1.145,11 termine 974.47 1.145,11 √ LTV is grow
Slide 35: The liability management activities carried out in the year…
The liability management activities carried out in the year… Throughout 2023 we refinanced a stock of € 650mn of debt despite hard conditions in the markets ✓ Green secured loan with a pool of banks (250€mn) ✓ Exchange and Tender Offer and Consent Solicitation (c. 400€mn) Resources used also for ✓ €
Slide 36: … enabled an extension of financial maturity profile
… enabled an extension of financial maturity profile At the closing of the disposal transaction, announced on 23 february 2024, IGD will receive c. 155 € mln entirely aimed at reducing debt Average debt maturity 3.7 years Ratings Fitch: BBB- (Stable) nov. 2023 S&P: BB+ (Stable) feb. 2024 3 years wit
Slide 37: Disposal transaction details
6 Disposal transaction details
Slide 38: The disposal envisaged in the BP has been finalized
The disposal envisaged in the BP has been finalized PIAZZA 1 CLODì (VE) 2 I MALATESTA (RN) 3 MARCANTONI (VT) Portfolio Portafoglio valued HYPER+RP HYPER SUPER Characteristics 258 euro mn (consistent with the book value at year end) 4 CONè (TV) 5 PORTOGRANDE 6 CENTROBORGO (BO) HYPER • 11 hyper/super
Slide 39: Transaction details
Transaction details Transaction REAL ESTATE 60% SPV (50% Sixth Street ; 50% Starwood Capital) structure INVESTMENT FUND (class A shares with preferred return *) «Food» 40% IGD (class B shares with subordinated return*) (managed by Prelios SGR) • IGD will sign a contract with the SGR to continue to m
Slide 40: Impact on IGD
Impact on IGD Impact on market value Loan-to-Value reduction Market value Market value 31/12/23 31/12/23 pro forma Malls + other Malls + other 48.1% 44.4% LTV 31/12/23 LTV 31/12/23 20.3% 11.2% pro forma Hyper/ Hyper/ super super Net rental income Other impact on profit and loss ≈ +2€mn (on EBITDA) ≈
Slide 41: Dividend and Outlook
7 Dividend and Outlook
Slide 42: Dividend
Dividend 2023 Considering the negative fair value movements that entail a negative net result in IGD SIIQ SPA there is no obligation to distribute a dividend in 2024, in compliance with SIIQ rules 42
Slide 43: Outlook 2024
Outlook 2024 IGD forecasts growing like for like operating results in 2024 (EBITDA ca.+3%)… Net recurring …but net negative effect of result (FFO) 2024 is expected at disposal and higher cost of c. € 34 mn debt will heavily weigh 43
Slide 44: Attachments
8 Attachments
Slide 45: Consolidated Income Statement
Consolidated Income Statement GROUP CONSOLIDATED (a) (c) Δ Cons 2022 Cons 2023 (c)/(a) Revenues from freehold rental activities 129.3 133.3 3.0% Revenues from leasehold rental activities 7.9 9.2 16.1% Total income from rental activities 137.3 142.4 3.7% Rents and payable leases 0.0 0.0 n.a. Direct c
Slide 46: Re-classified balance sheet
Re-classified balance sheet GEARING RATIO (€000) 46
Slide 47: Funds From Operations (FFO)
Funds From Operations (FFO) Δ% Funds from Operations CONS_2022 CONS_2023 Δ 2022 vs 2022 Core business EBITDA 103.4 108.2 4.7 4.6% IFRS16 Adjustments (Payable leases) -8.2 -8.8 -0.6 7.6% Financial management Adj* -27.2 -42.7 -15.5 56.9% Current taxes for the period Adj * -1.1 -1.2 -0.1 6.5% FFO 66.9
Slide 48: Other Metrics
Other Metrics EPRA Performance Measure 31/12/2023 31/12/2022 EPRA NRV (€'000) 1,016,875 1,133,860 EPRA NRV per share € 9.22 € 10.28 EPRA NTA 1,009,216 1,125,979 EPRA NTA per share € 9.15 € 10.20 EPRA NDV 993,138 1,110,002 EPRA NDV per share € 9.00 € 10.06 EPRA Net Initial Yield (NIY) 6.1% 6.0% EPRA
Slide 49: EPRA Net Asset Value
EPRA Net Asset Value Net Asset Value EPRA NRV EPRA NTA EPRA NDV EPRA NRV EPRA NTA EPRA NDV IFRS Equity attributable to shareholders 1,000,533 1,000,533 1,000,533 1,121,800 1,121,800 1,121,800 Exclude: v) Deferred tax in relation to fair value gains of IP 15,137 15,137 18,175 18,175 vi) Fair value of
Slide 50: On 5 October IGD launched an exchange offer and a consent solicitation to refinance the bond
On 5 October IGD launched an exchange offer and a consent solicitation to refinance the bond expiring in 2024... TARGET EARLY REFINANCE THE 400€ MN BOND EXPIRING IN NOVEMBER 2024 CONSENT SOLICITATION EXCHANGE OFFER To align terms and conditions of the existing (AND TENDER OFFER*) notes to the ones o
Slide 51: … and the target has been achieved
… and the target has been achieved 14 NOVEMBER 2023 NOTEHOLDERS MEETING AND FINAL RESULTS • Results of exchange/tender offer on the bond due November 2024: aggregate take-up is equal to 85.55% • Issue of new senior bond expiring in 2027 • Approval by the noteholders' meeting of the amendment of cert
Slide 52: More financial highlights and debt breakdown
More financial highlights and debt breakdown 31/12/2022 31/12/2023 Debt breakdown Gearing ratio 0.87X 0.97X Average lenght of long-term debt 2.7 years 3.7 years Hedging on long-term debt + bond 76.9% 73.8% Share of M/L debt 92.6% 96.8% Uncommitted credit lines granted 118€ mn 103€ mn Uncommitted cre
Slide 53: Contracts and key tenants Italy
Contracts and key tenants Italy Merchandise Turnover Malls TOP 10 Tenant Contracts category impact N 54 N 224 N 158 N 960 clothing 2.7% 11 clothing 2.6% 10 electronics 2.4% 9 Average residual maturity: 4,1 years clothing 2.0% 10 Total contracts: 1,396 of which 135 renewals with the same tenant and 5
Slide 54: Contracts and key tenants Romania
Contracts and key tenants Romania Merchandise Turnover TOP 10 Tenant Contracts category impact Winmarkt supermarket 12.3% 11 N 13 N 280 N 171 N 139 clothing 6.6% 5 55% clothing 4.3% 11 clothing 3.7% 7 25% drug store 3.6% 5 19% jewellery 2.3% 4 1% 2023 2024 2025 >2025 healthcare 2.2% 4 office 1.9% 1
Slide 55: Merchandising & Tenants Mix
Merchandising & Tenants Mix Italy Romania Merchandising Mix* Tenant Mix* *Internal processing on m2 55
Slide 56: Agenda
Agenda CORPORATE IR (confirmed as of today) 18 April Annuale General Meeting (first call) 20 March Euronext STAR Conference 7 May Results as at 31/03/2024 1 August Results as at 30/06/2024 7 November Results as at 30/09/2024 56
Slide 57: Investor Relations contacts
Raffaele Nardi, Director of Planning, Control and Investor Relations T. +39. 051 509231 Raffaele.nardi@gruppoigd.it Claudia Contarini, IR T. +39. 051 509213 claudia.contarini@gruppoigd.it Elisa Zanicheli, IR Team T. +39. 051 509242 elisa.zanicheli@gruppoigd.it Federica Pivetti, IR Team T. +39. 051 5