Good afternoon. This is the course operator. Welcome to the conference call presenting IGD's Q1 2023 results. Let me remind you that all participants are in listen only mode. After the presentation, a Q&A session, sorry, will be held. To be assisted by an operator during the conference call, please press star and zero on your phone keypad. Let me now turn the conference over to Mr. Claudio Albertini, CEO of IGD. You have the floor, Mr. Albertini. Very well. Thank you. Good afternoon to all of you. A warm welcome to all of you to this conference call presenting Q1 2023 results. The results were approved this morning by our board meeting, as you could actually read in our press release and the presentation you probably downloaded from our website. Let me start by walking you through the presentation. Let's move to page three. We start with the highlights, the financial highlights. As you can see, the first three carry a positive sign, then we have a negative sign before funds from operation, FFO. We'll tell you also why we have a minus sign before that item. Rental income, gross rental income is up 2.3%, landing at EUR 34.7 million. Net rental income, EUR 29.1 million, up 1.3%, Like-for-Like, up 4.9%, while core business EBITDA lands at EUR 26.8 million, up 2.5%. These results were expected. This is what we expected when we gave you guidance for 2023, and we did those full year results. Of course, we told you how we were faring versus quarterly budget. We have a minus sign before funds from operation, EUR -5.6, landing at EUR 15.8 million. That was also expected because in 2023 we're gonna feel the higher cost of financial management. We will feel the burden of that, but we'll give you more details about it as we move through the presentation. Let's now talk about the operating performance. Here we have good news, excellent operating performance in our shopping malls in Italy. As you can see on the screen, we have the monthly performance, January, February and March, it's broken down between footfalls and tenant sales. This is compared, of course, versus Q1 2022. We had a strong start in January and a double-digit growth of tenant sales also in February. Then also March was good performance-wise. As you can see on the slide, the first quarter closed with an increase of 9.4 in footfalls, tenant sales up 12.7%, completing the entire network. Hypermarkets and supermarkets we own also did very well. They went up 5.2% in Q1 2023 versus Q1 2022. In the following slide, now you can see tenants for different merchandising categories. Q1 20. English and household goods are probably the most meaningful items. They count for over 15% of our total. Also household are doing well. Cultural and gift are well, up 14%. Personal and healthcare, up 18.8%. A negative for us, remember that it outperformed over the last couple of the pandemic. Many consumers bought new pieces of electronic equipment at work, be it printer, a notebook or a token. That happened mainly during Covid and the phenomenon has now slowed down starting from Q1 2022, and this goes on in Q1 20. Well, excellent performance in restaurants. Picking up again this business, especially fast food, 2.4%. People are definitely going back to restaurants and eating in a shopping for 20. Very well, also sports is up 10.1%. At the back slide you see some of the brands portfolio are primary brands. In the first following slide, we'd like to introduce two virtuous examples. Sorry, I skipped page 7 and 8. I'm still talk about the sales performance. We talk about marketing in the first quarter. It's only 2.4% of the total rent for the group. It's 54 contracts out of 1,400. It was a total downside of 4.5%. We compare it with the following down 2.2% with the negotiations in progress. We adjusted rent for inflation, Italian inflation, and that have an impact of about 9%. When it came to negotiating the renewal, the issue, so the increase on our rent had a staggered impact. It is a phenomenal, slowly declining occupied flat versus 2022. We land at 5.3, slightly growing versus Q1 2022. Collection rate is roughly 90%. Similar results are to be recorded in Romania, even slightly better, where renewals are flat. There's no minus sign before the last 180 between renewals and turnover. They're flat. Occupancy lands at 97%, slightly lower than Q1 2022. Or sorry, full year 2022. Collection rate here, too, is 90%. I was mentioning before two virtuous examples that we would like to show you. This shows you how we are remodeling our shopping malls. We are talking about the Punta di Ferro in Forlì. They are slightly big shopping malls. Of course, big for IGD standards. Let's say 17 shops opened, new shops opened. We are using a strategy. Over the last year, we've applied a very effective strategy. We opened new 17 new shops in Punta di Ferro with a rotation of 13.8%. Of course, we are offering brands in our food court. We have more high-level brands and category killers. We have more services being offered to consumers. I'm moving to page 10. That led us to have our occupancy move from 85% at the end of 2021 to 97% in Q1 2023, with tenant sales that are absolutely in line with the figures I showed in the previous slide. Tiburtino here, we're close to Rome, is even better. It's a big shopping mall for, again, IGD standards. Here again, a sales strategy that led to improving our food offerings. We introduced new non-food category killers, we have more restaurants. We have 16 new shops opened and 27% of new openings on the shopping mall total GLA positive results indeed, versus a full year in 2021 with an occupancy rate of 89.1. The occupancy rates both for Punta di Ferro and Tiburtino were affected by COVID. We took the opportunity to relaunch the new malls. Here at Tiburtino, we went from 89.1 to 97% occupancy in Q1 2023, with very good operating performance and increase in footfalls. Another example of sustainability we provide on page 13. One point. This is how we are somehow rolling out sustainability in our shopping centers. This is a that we run at our Bologna shopping center called Centro Nova. We used food waste from bars and food scraps. Somehow we've reused food waste. That's why we called it Waste Value. Let's now deep dive into the figures. Page 15. Net rental income goes from EUR 28.7 million to EUR 29.1 million, up 1.3%, with a growth on a like-for-like basis of 4.9%. All that is driven by a rental income growth of 0.8% and an increase of 0.4% that leads us to EUR 29.1 million. On a like-for-like basis, we would have a 4.7% growth and EUR 1.1 million. Hypermarket shopping malls is EUR 1.1, net of the applied discounts. It was EUR 0.4, temporary discount from EUR 0.4 million versus last year. Hypermarkets up 4.5% with a similar trend also in Romania. An average growth of 4.5% on a Like-for-Like basis. Let's move on to page 16, core business EBITDA. We go from EUR 26.1 to EUR 26.8, and here that they're all positive, increasing the current income EUR 0.4. The services income increase EUR 0.1 and change in G&A expenses, meaning expenses were enhanced too. Landing at EUR 26.8 with the 2.5% that is perfectly in line with our expectations when we provided the 2023 guidance. EBITDA margin is flat, as you can see, 73.2% in 2022 versus 73.2% in Q1 2023. EBITDA margin for freehold same. That is, shopping malls we fully own and it's 75.6% versus 75.5% in 2023. We see an opposite sign for financial management, that was also expected. We have a EUR 1.6 million growth of our financial charges from EUR 7.6 million to EUR 9.2 million. That was mainly driven by the coming on stream starting from Q1 this year, something that didn't happen last year. Of the two financings we have agreed upon, the first one, EUR 215 million in August of 2022. The first unsecured green loan in the history of IGD, with higher rates of course, than the one we had earlier repaid. The one we had on 15th of December 2022, about EUR 21 million with Monte dei Paschi, with a public 90% public guarantee provided by SACE. These two financings, especially the first one that came on stream as of January the first, lead to an increase in financial management. That leads us to page 18. We see a decline in FFO from 16.7 to 15.8, but the decline, the reduction, is mainly due by the delta caused by the higher costs of financial by change core business is up 0.5, and changes in taxes are up 0.1. It's mainly the delta in financial management, the negative delta, that causes the difference. We reconfirm the guidance for 2023, EUR 53 million. guidance for FFO, as we said at the end of February, if you do 15.8 times 4, we will have a much higher guidance in excess of EUR 60 million. Of course, in the next month we expect an increase in financial management costs. Net financial position and loan to value. Net debt and loan to value. As you page 19, as you can see, generated cash for about EUR 10.6 million, going from an NFP of EUR 976 million roughly to EUR 966 million in the first quarter of 2023. Loan to Value has decreased at the end of March to 45.3%, down from 45.7% at the beginning of the year, thanks to the new reduction of Net Financial Position. Interest Cover Ratio is 3 times, it's declining. Average cost of debt goes from 2.26% at the end of 2022 to 3.18% for the first quarter of 2023. Let me wrap up with an update on asset and liability management exercise that is currently underway. It's a liability management exercise. As announced, we are currently finalizing pool financing with primary Italian and foreign banks. Most of these banks have already given their positive clearing, positive a loan for amount between EUR 220 million-EUR 250 million. With this new loan, we will refinance maturities up to the first half of 2024. Below you see in the dotted red box, you can see maturities covered with the next loan. It's about EUR 70 million in 2023, 7-0, and EUR 160 million, 1-6-0, EUR 163 million as a matter of fact, from 2024. With this deal, with this loan, would these are requirements. Then we have a former EUR 400 million coming in at November 2024, so 16 months down the line. For 2024 and 2027, we have the green loan, like mentioned before, 2027, unsecured senior green loan, and other financial maturities in between. That's it from my part. Of course, there are a number of attachments that can look at, that are attached to the presentation, and I'm here with other IGD colleagues, and we are ready to take your questions or clarifications. Thank you. This is the conference operator. We are now opening the Q&A session. If you want to ask a question, press star and one on your phone handset. To be removed from the Q&A queue, press star and two. Please ask your question using your handset. Thank you. If you want to ask a question, press star and one on your keypad now. Thank you. Third question comes from the line of Simonetta Chiriotti with Mediobanca. Please go ahead, madam. Good morning, well, good afternoon to all of you. I have a few questions. The first one is about guidance, the guidance you gave us for 2023 FFO guidance. What is the headroom you have for the bond refinancing? What is? Sorry, I didn't understand. The rate on your EUR 400 million bonds. Are you already refinancing it or is it something that's not included? Could you remind me of the cost of your green loan? About EUR 220 million green loan. Okay. In the guidance we provided, we are not including any cost to refinance the bond. The refinancing should happen between Q4 2022 and Q1 2024. The way in which it will be done still has to be determined. We're still focusing on the negotiations for the funding of the loan between EUR 225 million and EUR 250 million. We are not envisaging a refinancing by year-end, although we are going to work with that objective in mind. The markets now are not particularly receptive and not particularly welcoming when it comes to fixed assets. As for the green loan, Andrea Bonvicini, our CFO, can take the question. We have a spread that is higher than the one we got in June. We are around 3.5 spread, and I'm talking about the August green loan. The old one, Andrea, the EUR 220. No, for that one, the one of August, it was 3. The spread was 3. On the new one? 3.5 was referred to. The current one is slightly higher than 3. Yes. Even though the August one was unsecured, this instead is, we have different conditions from last year until today for the green loans, slightly higher the spread now. Thank you. Next question comes from the line of Davide Abate with BNP Paribas Exane. Thank you. Please, sir, go ahead. Good afternoon to all of you. First question is about the discounts you apply on your tenants. Can you elaborate on it? Is there an improvement versus what we saw last year, given the good sales performance tenants are showing? Another question, are there any novelties at the disposal for you in Italy and Romania? What is the market like if we think of disposal for you for both Italy and Romania? Thank you. Mr. Claudio Albertini speaking, discounts, I can say that we are in line with the what we have assumed for the full year. Temporary discounts, always, we are talking no changes in contract. We are looking at discounts on a case-by-case rate, and where the Occupancy Cost Ratio is above given thresholds that we have, we cannot check. In that case, we are assuming for the full year around EUR 3 million we put together. In Q1, we are more or less in line with that. I must say that despite the good performance tenants are showing, there are very many requests to get discounts or zero setting of the indexation of the inflation indexation, that we are strictly applying as per contract. You see in renewals, when we have renewals that have a slightly negative sign before them, when we, of course, have renewals, as we've already applied the inflation indexation, which is 8, 9 or in some cases 10%. This is what we mean by discounts. Something interesting that I hadn't mentioned, of course, because I was maybe presenting in a hurry, but we ran an in-house exercise to see the impact of inflation on the increase in tenant sales we've witnessed over the first quarter. That is to say 12.7%, and that indeed is an inflated growth somehow because it factors inflation in. We've made some calculations for the different merchandise categories. It's not a scientific method, but we try to be as scientific as possible. That still leads us to an increase for the quarter about 7 percentage points. That is reassuring. It's comforting because we try to not to give in to all the requests we get. We do have made provision for that amount, so far, we are trying to stick to what we have assumed and foreseen, and that is already net of inflation. The second question is on disposals. I'm sure you read yesterday JLL report on sales and Italy is down 70% quarter-on-quarter, if I'm not mistaken, transaction-wise. Retail is a very small amount indeed, 1.7, below 2% anyway. Right now, the market is blocked when it comes to sales. The asset class could... for the most appealing asset class is hypermarket, theoretically. So we are exploring that. We're looking into the possibility of performing these disposals as we'd already foreseen in our business plan. It's not gonna be transactions that will take place over the next few months. We're taking some time because the yields customers call for are not exactly what they could get. Even though for the hypermarket, there was a deal. Roberto, can you help me? I think it was in Spain, in Spain with a net 6 yield, which is not far from what we have. Roberto, would you like to add something? Yes. Let's say that we are working on 2 fronts somehow, because in your question, you also mentioned Romania. Right now we have some open negotiations both for hyper and supermarket, as Claudio Albertini was saying in Italy, and both in Italy and also for Romania. Hypermarket and supermarket right now seem to be more appealing for potential buyers, also because they have long-term contracts. You probably remember that our average contract duration for hypermarkets and supermarkets is close to 14 years, so it's still very long. For Romania, we are-- been working on it for quite a while now, and we are looking and talking to a number of investors who have come up in those countries. They have... The effort we're gonna make in the coming weeks and months is on both portfolios, Italy and Romania. Hypermarket and supermarket for Italy and the full portfolio for Romania. Let me remind you that if you want to ask a question, you may press star and one on your phone keypad. The next question comes from the English line and is Marta Alvaro with Victrix Asset Management. Go ahead, ma'am. Okay. Good afternoon. Go ahead, sir. Sorry. Yeah, yeah, no worries. I'm gonna ask about occupancy, which is down a bit, both in Italy and Romania versus this year. If we can get a bit more color on this, reasons for this. Second question would be on collections. Seems like 90% as of May the 2nd is a little bit low than is a normal number. If there's any reason for this as well. Last question is if you can give us a bit more detail on the timing of this EUR 225 million-EUR 250 million loan that you expect to close. If we can have a bit more detail and timing on this. Thank you. With the first two question, occupancy and credit collection, we will have Laura Poggi answering, who is the person in charge of that. Then I'll start and I'll answer on the timeframe as to the financing. Comes to the slight decline in occupancy. It is mainly driven by repositioning works we've done. Forli, for instance, we've done, and Guidonia Tiburtino. Strategic vacancy that is used to reposition the shopping mall and make sure they are in line with the new merchandise mix trends. As to the collection, we are definitely in line with what have we've done so far. Credit collection, please bear in mind that these are the first days in the second month. When we present the full year, we normally give figures at the end of the second month. It's still normally it's in excess of 90%, whilst now it's the first days of the second month. We expect The collection from now to the end of the month will improve, so we'll go back to the levels we normally have. Let's say by the end of May, we should go back to the level between 95%-97%. As to the timeline for the financing, it's not easy to answer. We are confident that we can close the deal in the next 10-15 days, and therefore sign the contract unless something happens. We have many resolutions. Well, many banks have already made resolutions. There might be minor changes in their latest resolution. That may in turn lead to a new resolution of those who already resolved upon the funding, the financing. If everything goes as we expect, in a couple of weeks, we should be able to close the deal, to close the transaction. In order to ask a question, please press star and one on your phone keypad, please. For further questions, please press star and one on your phone keypad. Thank you. The next question comes from the line of Antonio Casali with Northlight. Go ahead, sir. Good afternoon. Is it 3-3.5 the spread, so an overall cost of loans, the EUR 200 million in August, EUR 220 million in August, and the EUR 225 million-EUR 250 million loan that should be closed in the coming weeks? The spread, 6.5% and 7%, right? Well, the August loan, we had two-thirds of it. The overall cost is slightly higher than 6%. The spread is what you just mentioned, around 300 basis points. On the current one, starting from a 3.5 spread, we get to the rates you just mentioned. In the light of that, of course, the bond will follow because the current bond is unsecured while the latest financing is clearly secured. How do you see the evolution of your average cost of debt once everything is up and running on a performer basis for the bond refinancing? Very much will depend, as I've been speaking, on what happens from now to year-end. The central bank policies we have seen, the Fed hiked rates 0.25 yesterday, at the same time, they also stated we should be at the end of this rate hiking, and the ECB should make a statement in an hour. The expectation here too is 0.25 basis points. It all will depend on how inflation will evolve over time and how rates will evolve on the other. Bear in mind that we are working on disposals as well. The requirements for possible, the requirements we'd ask for a bond would be different and probably at a lower rate. It's clear that on bonds too, the market is quite closed for. It's similar to what happened in the real estate world. It's not a rosy backdrop. Things can change from here to after the summer. So far we're not giving any guidance for cost of debt in 2024. We only talk about 2023. The guidance we gave already factors in the rate hike that was now applied because we had already factored it in when we drew our budget and then when we disclosed info to the market. Inevitably the Interest Coverage Ratio will further decline. It already went from 3.6 to 3. It probably will go further down because the cost of debt increases. It's a mathematical calculation. When it comes to your loans, do you have any covenants on your finance where the Interest Coverage Ratio should not go beyond a certain threshold or not? Yes, we have a covenant on ICR that has to be higher than 1.7, but even with this type of rate, we are well above 2.4-2.5. Thank you very much. That's perfect. I've seen today, this morning, I saw the S&P that changed the outlook. They put negative outlook. Not on rating. It's CreditWatch Negative. They didn't change the rating. The rating is the same, and the outlook is stable. They just put us under CreditWatch Negative because we haven't yet closed the deal. Which should take place within short this refinancing, this EUR 225-EUR 150 refinancing. Yes, if you read it carefully. No, no. I just read on Bloomberg. I just read the headline on Bloomberg. No, we were put in CreditWatch Negative. It's nothing happened to our rating. The rating is still the same and the outlook is still the same. We're just in CreditWatch Negative. We'll see, of course, what they'll do, but for Fitch, instead, we are still investment grade BB-, if I understand correctly, and stable outlook. The ICR is one of the parameters, together with Loan to Value, that is mainly taken into account by rating agencies when they come up with their scorings. From that perspective, do you have an idea of the thresholds they apply to retain your ratings with both S&P and Fitch? I'm talking about Interest Coverage Ratio. To retain a stable rating, you have to be above 2.2. Well, ICR wise, Interest Coverage Ratio wise. For further questions, you can press star and one on your phone keypad. Mr. Albertini, there are no more questions in the queue. I would like to thank you very much on behalf of all of us here with IGD and see you next time. Talk to you soon. This is the course collaborator. The conference call has come to an end, and you may disconnect your phones. Thank you very much.