Conference call 7 August 2013 3.00 p.m. Results Presentation as at 30/06/2013
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 3 € 60.5 mn REVENUES • Revenues from core business ( -1.8% vs 30/06/2012) EBITDA € 41.6 mn • EBITDA (core business) ( -3.5% vs 30/06/2012) 68.8% • EBITDA margin (core business) (-1.2 percentage points) € 4.1 mn Group Net Profit ( -51.1% vs 30/06/2012) € 17.6 mn Funds From Operations (FFO) ( -2.4% vs 30/06/2012) € 2.20 NNAV ( € 2.31 vs 31/12/2012) € 1,895.9 mn Portfolio Mkt Value (- € 10.6 mn vs 30/06/2012) FINANCIAL OCCUPANCY at 30/06/2013 96.9% • Average ITALIA • ROMANIA 88.3% 7 August 2013 1H2013 Results Presentation
ECONOMIC CONTEXT
5 The Italian economic context Household spending and retail trade Evolution of retail investments GDP trend (change %) (change%) 2 High street Retail warehousing Shopping center Supermarket Total investments 2500 1 1,990 1.5% 2000 0 1.0% 0.5% 0.4% 2008 2009 2010 2011 2012 2013 2014 0.5% 1,340 -1 1500 1,140 0.0% 840 -0.5% -2 1000 -1.0% -1.7% 410 -1.5% 270 -3 500 Retail trade -2.4% -2.0% -4 -2.5% Resident household 2011 2012 2013 2014 0 spending -5 FY2008 FY2009 FY2010 FY2011 FY2012 1H2013 Data source: ISTAT, Bank of Italy, Confcommercio Data source: sample averages institutes and researches Data source: Jones Lang LaSalle Outlook • GDP The decline in GDP is continuing and it is expected to continue also in the next few months, but more slowly, reaching the estimated value of -1.7%/- 1.9% at the end of the year . The recovery is expected in 4Q and its consolidation is expected in 2014, thanks to a relaxation in the austerity policies adopted so far, to the possible positive effects due to Italy exiting from the European infringement procedure and to the growth in global demand. A positive value of about +0.5% in 2014, the first increase after seven negative quarters, is then expected. • Inflation in 1H2013 stood at an average of 1.4% (3% in 2012) a sharp decrease mainly due to the lowering prices of energy products (source: Istat, Bank of Italy) • Unemployment stood at about 12% in 1H2013 ad it is expected to increase even more in the current year (to nearly 12.4%) (source: Istat, Confindustria). • Sales of non-food retail trade were -4.9% (raw data) whereas the total household consumption in 1H2013 came to -3.5%, but a slow down in the fall in consumption reaching a total of -3% is expected bt the end of the year (source: Istat, Confindustria). • Retail Investments : the Italian retail real estate investment market is showing signs of improvement in 1H2013 with about € 400 mn (vs € 100 mn in 2012) invested; the main transactions concern the high street sector (H&M in Rome). • During 1H2013 only four new openings were recorded, for an estimated total of about 61,000 sqm GLA (vs 200,000 sqm GLA in 1H2012). By the end of 2013 a further decline in the delivery of new properties is forecasted, in fact only about 300,000 sqm GLA are expected (source: Jones Lang LaSalle). 7 August 2013 1H2013 Results Presentation
6 The Romanian economic context GDP trend (change %) Split of retail stock per category 0.60% 4.0% Factory Outlet Centers 11.80% 17.10% 3.5% Shopping centers < 20,000 sqm 3.0% 13.10% Shopping centers 2.2% 2.5% 2.2% 20,001-40,000 sqm Shopping centers > 1.7% 2.0% 40,001 sqm 17.00% 1.5% Retail parks < 20,000 sqm 1.0% 0.7% 18.60% Retail parks 20,001- 40,000 sqm 0.5% Retail parks > 40,001 0.0% 21.80% sqm 2011 2012 2013 2014 Source : CBRE Source : sample averages institutes and researches Outlook GDP : in 1H2013 GDP is expected to have grown by about 2% and at the end of 2013 it is expected to remain more or less on the same level thanks to • exports and industrial production (source: Eurostat, Raiffeisen research). • The exchange rate as at June 2013 was equal to 4.44 ron/eur (source: BNR) • Unemployment stood below the European average and at 1H2013 was equal to about 5.3% (source: BNR) • Sales of non-food retail trade were about -0.2% in 1H2013 (source: BNR) • Development pipeline: 1H2013 only one shopping center has been finished (Uvertura Mall Botosani, 15,000 sqm). Currently, more than 140,000 sqm are under construction in Bucharest, Constanta, Ploiesti and Galati, none of the respective schemes being larger than 35,000 sqm GLA each. (Source: CBRE). • In 1H2013 the most active retailers were food retailers (Kaufland, Mega Image, Profi, Lidl, Carrefour Express). But also other international brands concluded operations in the country (Debenhams, Springfield, La Senza, Nine West, Women Secret, Aldo). Furthermore a new Italian retailer, Intimissimi, entered and other brands continued their expansion with a solid growth over the previous quarter (Inditex Group, H&M, Takko, Deichmann). The preference of these operators to open first in big cities, and only afterwards in medium-sized cities has been confirmed (Source: CBRE). 7 August 2013 1H2013 Results Presentation
ECONOMIC AND FINANCIAL RESULTS
8 Consolidated Income Statement "PORTA A MARE" CONSOLIDATED CORE BUSINESS PROJECT 30/06/2012 30/06/2013 % 30/06/2012 30/06/2013 % 30/06/2012 30/06/2013 % € /000 Revenues from freehold properties 54,731 53,831 (1.6)% 54,731 53,790 (1.7)% 0 41 n.a. Revenues from leasehold properties 4,262 4,201 (1.4)% 4,262 4,201 (1.4)% 0 0 n.a. Revenues from services 2,620 2,514 (4.0)% 2,620 2,514 (4.0)% 0 0 n.a. Revenues from trading 0 0 n.a. 0 0 n.a. 0 0 n.a. Operating revenues 61,613 60,546 (1.7)% 61,613 60,505 (1.8)% 0 41 n.a. Direct costs (12,077) (12,441) 3.0% (11,948) (12,231) 2.4% (129) (209) 62.0% Personnel expenses (1,818) (1,816) (0.1)% (1,818) (1,816) (0.1)% 0 0 n.a. Increases, cost of sales and other costs 367 0 (100.0)% 0 0 n.a. 367 0 (100.0)% Gross Margin 48,085 46,289 47,847 46,457 (2.9)% 238 (168) (170.6)% (3.7)% G&A expenses (2,039) (2,072) 1.6% (1,866) (1,848) (1.0)% (173) (225) 30.2% Headquarters personnel costs (2,859) (2,999) 4.9% (2,848) (2,966) 4.1% (11) (33) 205.8% EBITDA 43,187 41,218 (4.6)% 43,133 41,644 (3.5)% 54 (426) n.a. Ebitda Margin 70.0% 68.8% Depreciation (651) (660) 1.3% Devaluation/Restore work in progress and inventories (771) (316) (59.0)% Change in FV (10,923) (16,015) 46.6% Other provisions 0 (63) n.a. Total revenues from rental activities: EBIT 30,842 24,164 (21.7)% 58,032 € 000 Financial income 227 262 15.3% From Shopping Malls : 39,429 € 000 of which: Financial charges (24,252) (23,201) (4.3)% • Italian malls 34,140 € 000 Net financial income (24,025) (22,939) (4.5)% n.a. • Winmarkt malls 5,289 € 000 Income from equity investments (367) (490) 33.3% From Hypermarkets : 17,638 € 000 PRE-TAX INCOME 6,450 735 (88.6)% From City Center Project – v. Rizzoli : 705 € 000 Income tax for the period 1,735 3,017 73.9% From Other: 260 € 000 NET PROFIT 8,185 3,752 (54.2)% (Profit)/losses related to third parties 107 304 185.1% NET GROUP PROFIT 8,292 4,056 (51.1)% 7 August 2013 1H2013 Results Presentation
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