8 March 2012 14:46
Price Sensitive economic-financial results

The BoD approves the draft separate and the consolidated financial statement at 31 December 2011

Growth of all the key consolidated indicators continues in 2011 (vs. 2010), despite what continues to be a
critical economic environment:

  • Total revenue: €124.7 million (an increase of 7.3% with respect to the €116.2 million posted at 31 December 2010)
  • Core business EBITDA: €88.1 million (an increase of 6.8% with respect to the €82.5 million reported at 31 December 2010)
  • Core business EBITDA MARGIN: 71.7% (an improvement of 0.7 percentage points with respect to the 71% recorded at 31 December 2010)
  • The Group’s portion of net profit: €30.1 million (an increase of 2.4% with respect to the €29.3 million posted at 31 December 2010)
  • Funds From Operations (FFO): €43.3 million (a rise of 0.6% with respect to the 43 million reported at 31 December 2010)

With regard to the financial indicators:

  • Net financial debt: €1,129 million (an increase with respect to the €1,017.1 million recorded at 31 December 2010)
  • Market Value of the freehold real estate portfolio: €1,924.6 million (an increase with respect to the €1,804 million reported at 31 December 2010)
  • Dividend of €0.08 per share proposed (an increase of 6.7% with respect to the €0.075 per share paid in 2010), with shares going ex-div on 21 May 2012 and payable as of 24 May 2012

Other resolutions:

  • Annual General Meeting called in ordinary and extraordinary session on 19 April 2012 at 10:00 am CET at the Company’s Bologna headquarters, in first call and, if necessary, in second call, on 20 April 2012, at the same place and time
  • Shareholders will also be called upon to resolve on the proposed capital increase excluding preemption rights reserved exclusively for shareholders, coupon holders entitled to receive the 2011
    dividend. The shareholders who decide to subscribe will be offered a dividend reinvestment option based on which they may reinvest a part, not to exceed 80%, of the gross dividend
  • Other items on the agenda: authorization to buy and sell treasury shares; appointment of the Board of Directors; appointment of the Board of Statutory Auditors; amendments of Articles 6, 16 and 26 of the corporate by-laws;
  • The annual Report on Corporate Governance and Ownership Structure, as well as the Board of Directors’ Compensation Report, were also approved

Today the Board of Directors of IGD – Immobiliare Grande Distribuzione SIIQ S.p.A. (“IGD” or the “Company”), leading owner and manager of retail shopping centers in Italy and listed on the STAR segment of the Italian Stock Exchange, in a meeting chaired by Gilberto Coffari, examined and approved the draft separate and consolidated financial statements at 31 December 2011 which show a consolidated net profit of €30.1 million , an increase of 2.4% with respect to 31 December 2010, as well as an increase in all the main consolidated results, despite what continues to be a critical economic environment.

” After a promising first half, followed by a net deterioration in the second half of the global market and financial conditions, the IGD Group closed 2011 with more than satisfactory results in terms of operating profit, cash flow, financial structure and quality of the portfolio which confirmed the solidity of the 2011 financial statements” Claudio Albertini, IGD – Immobiliare Grande Distribuzione SIIQ S.p.A.’s Chief Executive Officer stated. “The profound changes in the business environment that took place in the second half of 2011 caused the IGD Group to move forward with its planned investments, focusing on the committed pipeline, namely those projects which were already clearly identified and for which there was a firm commitment, while postponing the realization of the non-committed pipeline to subsequent years.”

“The results achieved by our Group in 2011, make it possible for us to propose payment of a dividend of €0.08 per share, an increase of 6.7% compared to the dividend paid in 2010, with a dividend yield of 10.8% (calculated on the basis of the price at the end of 2011). With a view to strengthening our capital structure we decided to propose that the shareholders approve a capital increase excluding pre-emption rights which will give those shareholders, coupon holders entitled to receive the 2011 dividend, the possibility to reinvest a part, not to exceed 80%, of their dividend in IGD”- Albertini continued. “The purpose of this transaction is to align IGD SIIQ with the widespread practices adopted by a number of European REITs and we hope, therefore, that it will be appreciated by our shareholders and that they will take advantage of this interesting opportunity”

Principal consolidated results at 31 December 2011

The IGD Group’s total operating revenue at 31 December 2011 amounted to €124.7 million, an increase of 7.3% with respect to the €116.2 million posted in 2010, thanks to both the increase in core business revenue and the new acquisitions/expansions completed between the end of 2010 and 2011.
Core business revenue reached €122.9 million, a rise of 5.8% with respect to the €116.2 million recorded in 2011. More in detail, rental income at 31 December 2011 was up by 6.9% with respect to 2010 due, in part, to the increase of the like-for-like perimeter which grew by 3.09%.
Total EBITDA in 2011 amounted to €88.5 million, an increase of 7.5% versus the €82.3 million posted in the prior year. The IGD Group’s core business EBITDA at 31 December 2011 amounted to €88.1 million, an increase of 6.8% with respect to the €82.5 million recorded at 31 December 2010.
Direct costs, pertaining to the core business and including personnel expenses, amounted to €25.3 million at 31 December 2011, a rise of 6.17% with respect to the prior year. These costs as a percentage of revenue were, however, basically unchanged with respect to the prior year, coming in at 20.55%. General expenses for the core business, including payroll costs at headquarters, amounted to €9.5 million, versus €9.9 million at 31 December 2010, a drop of 3.66% linked to cost rationalization.
The EBITDA margin for the core business improved further, rising from the 70.99% posted in 2010 to 71.68% in 2011, in line with the positive trend recorded in prior years.
The IGD Group’s EBIT at 31 December 2011 amounted to €73.5 million, an increase of 7.7% with respect to the €68.3 million recorded at 31 December 2010 due to the increase in Ebitda and despite the increase in negative fair value adjustments.
The Group’s portion of net profit at 31 December 2011 amounted to €30.1 million, an increase of 2.4% with respect to the €29.3 million posted in 2010.
The Funds from Operations (FFO) rose from €43 million at 31 December 2010 to approximately €43.3 million at 31 December 2011, an increase of 0.6%.
In 2011 the growth of the Group’s portfolio perimeter was accomplished maintaining the level and the relative cost of debt under control: the adjusted gearing ratio, calculated as the ratio of net adjusted financial debt and net adjusted equity (which do not reflect the mere accounting effect of the fair value valuation of derivatives), came in, in fact, at 1.38 compared to 1.28 at 31 December 2010, below the “ceiling” of 1.5 that the Group indicated it would not exceed in the 2009-2013 Business Plan, and, even if, at 4.08%, the average cost of debt continues to be one of the sector’s lowest.

The IGD Group’s net financial debt at al 31 December 2011 amounted to €1.129 billion, substantially in line with the €1.017 billion recorded at 31 December 2010. The change is primarily attributable to development carried out in 2011.

The Real Estate Portfolio at 31 December 2011

Based on CB Richard Ellis’s and Reag’s independent appraisals, the market value at 31 December 2011 of the Igd Group’s real estate portfolio reached €1,924.6 million, an increase with respect to the €1,804 million recorded at 31 December 2010, due to the enlarged perimeter following the new acquisitions made in 2011.
The market value of the IGD Group’s portfolio in Italy at 31 December 2011 on a like-for-like basis wasn basically unchanged with respect to a year earlier (-0.05%), despite the negative impact on fair value of the introduction in December 2011 of a municipal property tax (Imposta Municipale Unica sugli immobili or IMU), while market value in Romania fell slightly (-1.17%).

Other Resolutions

IGD’s Board of Directors also resolved to call the Annual General Meeting in ordinary and extraordinary session on 19 April 2012, at 10:00 am CET at the Company’s Bologna headquarters in via Trattati Comunitari Europei 1957-2007, 13 – third floor, in first call and, if necessary, in second call, on 20 April 2012, at the same place and time.
IGD’s Board of Directors will propose that the shareholders, meeting in ordinary session, approve a dividend,
excluding the 10,976,592 treasury shares, of €0.08 per share, an increase of 6.7% with respect to the €0.075 paid in 2010. This amount, in absolute terms, represents the highest amount ever distributed by IGD since its IPO and a payout of not less than 85% of the distributable earnings. The yield on the dividend proposed for 2011, based on the share price at 30 December 2011 of €0.74, amounts to 10.8%; a level which is decidedly attractive for investors.

The dividend will be payable as of 24 May 2012, with shares going ex-div on 21 May 2012.

The shareholders, meeting in ordinary session, will also be called upon to approve the financial statements at 31 December 2011 and the allocation of the earnings for the year.
The shareholders, meeting in extraordinary session, will be called upon to resolve on a capital increase of up to 10% of the Company’s pre-existing share capital, pursuant to Art. 2441, paragraph 4(2) of the Italian Civil Code, without pre-emption rights, reserved exclusively for shareholders, coupon holders entitled to receive the 2011 dividend. The shareholders who decide to subscribe will be offered the possibility to reinvest a part, not to exceed 80%, of their dividend.

In greater detail, the transaction to be submitted for the shareholders’ approval, referred to as the Dividend Reinvestment Option, will be structured as follows:

  • shareholders holding IGD shares on the trading session prior to the date on which the shares go exdiv
    will be given the option to participate in the offering of IGD shares;
  • the capital increase will be for a maximum total of 80% of the total dividends or €19,089,451;
  • each shareholder may subscribe to a number of shares, the amount of which does not exceed 80% of their dividend;
  • during the Annual General Meeting shareholders will determine the criteria to be used to establish the subscription price of the new shares on the basis of the BoD’s proposal, market practices for similar transactions, and in light of the average stock price during eight trading sessions prior to the date on which the price is set, less the amount of the 2011 cash dividend and a discount of a maximum of 10%. The issue price of the new shares, however, may not be below €0.62 (the official average closing price of IGD shares in the three months prior to 8 March 2012 less the amount of the 2011 cash dividend and a discount of 12%). The BoD will subsequently resolve on the final subscription price on the basis of the above mentioned close to the offer launch date.
  • the number of shares offered will be equal to the total value of the offer divided by the subscription price;
  • IGD will then issue the new shares for delivery to the entitled parties;
  • the details of the transaction will be disclosed to the market after the Annual General Meeting and before the transaction’s launch .

The purpose of this transaction, which is in line with the best practices adopted by a number of European REITs, is to give 2011 dividend recipients the possibility to reinvest in IGD and IGD to recapitalize itself. The Company intends to launch the capital increase, subject to approval by the authorities, on the date as of which the 2011 dividend is payable and, at any rate, by the closing date of 30 September 2012.
IGD has appointed Mediobanca – Banca di Credito Finanziario to act as the financial advisor and Chiomenti Studio Legale to act as the legal advisor for the transaction.
IGD’s shareholders, in extraordinary session, will also be called upon to resolve on the amendments to Articles 16 and 26 of the corporate by-laws needed to comply with Law n. 120 of 12 July 2011 n. 120 relating to equal opportunities within the administrative and control bodies of listed companies, as well as the amendment to Article 6 of the corporate by-laws relative to the (i) granting the Board of Directors the power, pursuant to and in accordance with Art. 2443 of the Italian Civil Code, to increase share capital, by up to 10%, excluding pre-emption rights, pursuant to and in accordance with Art. 2441, paragraph 4(b) of the Italian Civil Code and (ii) the elimination of reference to the shares’ nominal value .

IGD’s shareholders, in ordinary session, will be called upon to resolve on the appointment of the Board of Directors and the Board of Statutory Auditors, as well as the authorization to buy and sell treasury shares, as describe below:

  • Reasons: to be able to complete transactions (i) for trading and hedging purposes and (ii) invest liquidity and use the treasury shares in transactions connected to current operations and business projects in line  with the Company’s strategic guidelines in relation to which there may arise the need to exchange, swap, transfer 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 permitted by law .
  • Expiration of the shareholders’ authorization: the authorization to purchase treasury shares is for a period of up to 18 months from the resolution date; the authorization to sell treasury shares is without a time limit.
  • Purchase methods and price: the purchases must be made in accordance with Art. 132 of Legislative Decree n. 58/98, Art. 144-bis of the Regulations for Issuers and any other applicable regulation, as well as the market practices recognized by Consob and must be done at prices which comply with Art. 5, par. 1, of EC Regulation n. 2273/2003 of 22 December 2003.
  • Number of treasury shares held by IGD: as of today’s date IGD holds 10,976,592 treasury shares, equal
    to 3.549% of the share capital.

The Board of Directors, pursuant to the Corporate Governance Code adopted by Borsa Italiana, also confirmed that the independent directors still qualified as such on the basis of the declarations made by the parties involved.

Lastly, IGD’s Board of Directors also approved the Annual Report on Corporate Governance and Ownership Structure, and the Board of Director’s Compensation Report, included in the annual report.