IGD’s mission is to create value for all its stakeholders: shareholders, employees, customers and suppliers.
We believe this is possible through sustainable growth.

The Italian market still offers interesting development opportunities…

The retail segment of the Italian real estate market is still interesting, despite the reduced spending power and change in the consumption of the Italian families.

At the end of June 2010 (source: CBRE) the density of shopping centers in Italy reached 232 m² for every 1,000 inhabitants which is still under the European average.

…if you know how to find the right geographic location…

The opportunities are very diverse based on the geographic area: if the most attractive development opportunities appear to be in Southern Italy, above all in Sicily, in Northern Italy there is room for the renewal of existing centers which, on an average, date back to 1997 and generally have not been restructured in any substantial way.

…and to conduct business with a view to sustainability…

Never has the choice for sustainable growth, something that IGD has believed in from its inception, proved to be so rewarding. Sustainable growth means developing long term relationships with the hypermarket and mall operators in order to support their p&l rather than maximize the company’s revenues per square meter. Thanks to the fact that it has always had this vision, today IGD is ready not only to meet the challenges of the current complex business environment but also to take advantage of interesting opportunities through the use of innovative formats for its new shopping centers.

…offering new formats

IGD’s leadership is based on specialization and innovation, on the ability to interpret the need for change and to act accordingly: for this reason the company will focus its efforts on the creation and promotion of new formats.

The traditional shopping center format, which has been quite successful in the historical areas, cannot, in fact, be successfully duplicated in newly opened spaces as the hypermarket is no longer the only operator with the anchor tenant fot the entire center.

The Romanian market, despite the negative impact of the crisis on consumption, can benefit from attractive returns.

The acquisition of Winmarkt Magazin SA’s portfolio was part of a process in which the Romanian market was found to have the potential IGD was looking for in order to balance its exposure to different consumer environments. The crisis that in the most recent period has weighed heavily on Italy, does not change the strategic importance of including the Romanian chain in IGD’s portfolio: going forward, in fact, consumption is expected to recover with a trend that is more interesting than the consumer trends in Italy. Meanwhile, thanks to the steps taken by management and the commercial agreements finalized the quality and the visibility of rental income has improved with average returns almost two points above the returns on the Italian portfolio.

The new five-year business plan 2009-2013 reflects an operating environment and global market conditions that are profoundly different with respect to the prior plan (2008-2012). The objectives, however, are still quite ambitious.

In the new plan IGD confirms its vocation as a retail sector player and its focus on the Italian market and, therefore, on its traditional, core business levaraging on the strong points which have always distinguished it and that management believes will continue to be successful. Secondly, IGD will strive to become an even bigger group with a real estate portfolio valued at some €2.2 billion by 2013 thanks to growth driven by new investments. The projects included in the pipeline total approximately €750 at the end of the plan: these are primarily new malls and hypermarkets, in addition to the expansion of the freehold centers; in order to diversify, in the last two years of the plan IGD also plans on investin €150 million in prestigious properties found in the historical areas of primary Italian cities. Thirdly, the plan calls for a further improvement in profitability in order to increase the portfolio’s average return from the current 6.3% to 6.5% through effective management of the existing portfolio and carefully selected new investments. Thanks to an increase in operating costs that will be much less than the increase in revenues, the EBITDA margin (EBITDA as a percentage of operating income) is expected to rise by almost ten points, from 68% to 77%.

The forecast growth will be financed without capital increases.

Over the time horizon of the plan, IGD expects the fair value of the properties to increase by only €30 million, with commerical property values dropping slightly in 2010, stable in 2011 and recovering slightly beginning in 2012. The investment plan is completely covered by cash generated over the years and by increased debt, but no capital increases are envisioned. The gearing ratio will, therefore, increase over the next two years reaching its peak level of 1.5x in 2011. IGD’s debt will be largely long term, in line with the asset profile, and the company will continue to prefer fixed rates.

The dividend yield may prove to be quite interesting to shareholders.

Given the fact that under the SIIQ regime IGD must distribute at least 85% of the income generated by the rental business in Italy, the 2013 dividend could be almost triple the dividend paid in 2008.