Financial Statements As of 31St December 2016
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Financial Statements as of 31st December 2016 111th Financial year Financial Statements as of 31st December 2016 111th Financial year 1 2 3 4 5 Contents COMPANY PROFILE PAGE 9 MANAGEMENT REPORT PAGE 15 SUSTAINABILITY REPORT PAGE 115 CONSOLIDATED FINANCIAL STATEMENTS PAGE 159 SEPARATE FINANCIAL STATEMENTS PAGE 239 1 COMPANY PROFILE 1.1 Letter to Shareholders 11 1.2 Corporate Governance 12 1.3 Shareholder Structure 13 1.1 Letter to Shareholders Dear Shareholders, the year 2016 was characterised, in line with the property company model adopted by joining the SIIQ status and in line with international Reits, by the purchase of fixed return investments and the main development projects for further input to the revenue portfolio in the medium term. In particular, the Group has anticipated the Plan’s objectives in terms of investment, purchasing a property portfolio for commercial use and a portofolio for office use, increasing by 90% the rental level on an annual basis that has reached 11 Euro 18 million approximately. In line with expectations the development has been completed of Phase 6 of the Serravalle Designer Outlet. The expansion of the shopping centre, in which Aedes SIIQ S.p.A. owns 50.1%, affected some 8,748 square meters of rd retail space. The opening to the public on 3 PROFILE November with 75% of occupancy marked an important milestone for the Group. Also during the year, work has begun on preliminary development of Phase C of Serravalle Retail Park, which is expected to open in spring 2018, and authorisation has been completed for the activities of Caselle development OMPANY C project, prior to the signature of the urban planning agreement expected in the first half of 2017. The focus on property activity was also pursued with the sale of the subsidiary Aedes Real Estate SGR, for the management of third-party real estate assets. During 2016, Aedes SIIQ also joined EPRA - European Public Real Estate Association - conforming with the main international Reits in terms of financial reporting. This financial statements has in fact been enhanced with an explanatory section on the EPRA financial indicators. 2016 also saw the start of the Aedes Group’s path to Corporate Social Responsibility, assuming full awareness of how the business is directly involved in the three dimensions of sustainability: economic, social and environmental. For this reason the first sustainability report has been prepared, which illustrates, through both qualitative and quantitative indicators, what the Group has done and is doing to pursue sustainable development, in harmony with the social and environmental context, respecting the values, expectations and needs of today and investing in tomorrow’s generations. Aware that the business should not be limited to the mere achievement of financial results, the Aedes Group is developing a responsible industrial model aimed at achieving shared objectives, by adopting a transparent approach to all Stakeholders: investors, business partners, employees, clients and suppliers. So, thanks to the support of Shareholders, management and employees of the Group, Aedes SIIQ also ends the year 2016 on a positive note and will seek, during 2017, to define the objectives of the Plan for the Group’s growth in the coming years. The Chairman The Chief Executive Officer Carlo A. Puri Negri Giuseppe Roveda 1.2 Corporate Governance BOARD OF DIREctOrs Giuseppe Roveda Carlo A. Puri Negri Benedetto Ceglie Chief Executive Officer Chairman Vice-President 12 Giacomo Garbuglia Adriano Guarneri Dario Latella 1 1 2 3 S 2016 Director Director * Non-Executive Director TATEMENT S Annapaola Negri-Clementi Giorgio Robba Serenella Rossano IAL C Non-Executive Director 1 2 3 Non-Executive Director Non-Executive Director 2 3 FINAN BOARD OF STATUTORY AUDITORS Cristiano Agogliati Fabrizio Capponi Sabrina Navarra Chairman 4 Full Member 4 Full Member 4 Giorgio Pellati Roberta Moscaroli Luca Angelo Pandolfi Deputy Member Deputy Member Deputy Member INDEPENDENT AUDITORS Deloitte & Touche S.p.A. 1 Finance and Investment Committee * Appointed by co-optation by the Board of Directors meeting of 18th December 2015 in place of the Director Roberto Candussi, and subsequently confirmed by the Shareholders’ Meeting on 27th April 2016 2 Audit Committee, Risk and Operations with Related Parties 3 Remuneration and Appointments Committee 4 The Board of Directors on 11th June 2015 resolved to give the Board of Statutory Auditors regulatory functions 1.3 Shareholder Structure The year 2016 sought no changes in the amount of the share capital of Aedes SIIQ S.p.A. and the number of shares issued. At the date of approval of the financial statements, the share capital of Aedes SIIQ S.p.A. amounts to Euro 212,945,601.41 and is divided into 319,803,191 ordinary shares. There follows a list of Shareholders who, as of 31st December 2016, on the basis of Consob1 communications and the updated Shareholder register, as well as other information available to the Company at that date, hold more than 5 13 (five) percent of the issued share capital2. Shareholder Number of shares % of share capital % voting rights PROFILE Augusto S.p.A. 163,752,436 51.20% 51.77% Vi-Ba S.r.l. 23,379,885 7.31% 7.39% Itinera S.p.A. 16,935,541 5.30% 5.35% OMPANY Floating shares 112,235,329 35.10% 35.48% C Total shares 316,303,191 98.91% 100.00% Treasury shares 3,500,000 1.09% 0.00% Total Shares 319,803,191 100.00% 100.00% In view of the benchmark Shareholder structure, calculated on the basis of 319,803,191 common shares outstanding as of 31st December 2016, the Shareholder structure is composed as shown in the graph below. It is recalled that, out of a total of 86,956,536, there are still in outstanding 86,954,220 Warrants entitling their holders to subscribe to 1 share of Aedes SIIQ S.p.A., at a unit price of Euro 0.69 for every 3 Warrants held. Treasury shares 319,803,191 51.20% At 31st December 2016 Aedes held 3,500,000 ordinary shares - at an average purchase price of Total Shares Augusto S.p.A. Euro 0.4156 - representing 1.09% of the share 35.10% capital. Market 7.31% Vi-Ba S.r.l. 5.30% Itinera S.p.A. 1.09% Treasury Shares 1 Received under art. 120 of Legislative Decree no. 58/1998 2 Taking into account the status of the Company under art. 1, paragraph 1, lett. w-quater.1, of Legislative Decree no. 58/1998 2 MANAGEMENT REPORT 2.1 Performance Indicators 16 2.2 Net Asset Value 19 2.3 Evaluation Reports of Independent Experts 20 2.4 Group structure 56 2.5 Strategy and business model 57 2.6 Financial performance 58 2.7 EPRA Performance Indicators 67 2.8 Glossary of terms and alternative performance indicators used 74 2.9 Comparison of actual results with the Plan 76 2.10 Comment on the performance of the Parent Company Aedes SIIQ S.p.A. 77 2.11 Significant events 78 2.12 The real estate portfolio 80 2.13 The legislative and regulatory framework of SIIQ 95 2.14 Management of main business risks 97 2.15 Company governance and activity of management and coordination 104 2.16 Other information 108 2.17 Reconciliation between the Shareholders’ Equity and the net result of Aedes SIIQ and the Consolidated Shareholders’ Equity and the net result 110 2.18 Business outlook 112 2.19 Proposal for allocation of the profit for the year 113 2.1 Performance Indicators FINANCIAL HIGHLIGHTS NOI EBITDA EBIT NET PROFIT 16.2 15.2 0.4 0.2 7.9 29.7 6.1 30.2 GAV1 PFL LTV%2 PROPERTY NAV 3 16 321.3 398.6 (164.4) (163.2) 51.2% 40.9% 169.1 243.8 S 2016 SHAREHOLDERS’ EQUITY NFP GEARING RATIO AVERAGE COST DBT% 275.3 303.4 (95.9) (150.6) 60% 54% 2.77% 2.62% TATEMENT S IAL EPRA NAV EPRA NAV/SHARE EPRA NNNAV EPRA NNNAV/SHARE C 279.0 299.8 0.87 0.95 286.3 306.6 0.90 0.97 FINAN 2015 2016 In millions of Euro MARKET PERFORMANCE DATA4 The Aedes share on the Stock Exchange The Aedes share (AE.IM) recorded in 2016 a trend substantially in line with the market index and its main competitors while maintaining a lower performance, and then in the last few days the recovery - although partial - of the gap accumulated in previous months. 1 Consolidated data 2 PFL/GAV. Taking into account the debt allocated only on real estate the LTV ratio is 38.8% 3 Consolidated data 4 Data Source Bloomberg There follows a chart with the comparison between the performance of the Aedes share and that of the main competitors5 and the market index6. 100 89,8041 90 85,9679 80,7327 80 74,3022 70 60 17 Jan FebMar Apr May Jun JulAug SepOct NovDec 2016 AE IM Equity IGD IM Equity BNS IM Equity FTSEMIB Normalized at 30/12/2015 74,3022 +8,6429 85,9679 +,475 80,7327 +,8921 89,8041 +,1431 last price The following are the main figures and the price trend of the Aedes share: EMENT REPORT G th Price at 30 December 2015: Euro 0.5195 MANA Price at 30th December 2016: Euro 0.3860 Annual change: -26% Highest price: Euro 0.5195 (30th December 2015) Lowest price: Euro 0.3156 (11th February 2016) Average price: Euro 0.3810 Market capitalization at 30th December 2016: Euro 123.4 million 0,50 0,45 0,386 0,40 0,35 0.30 4,871M 4M 3M 2M 0,761M1M 0 Jan FebMar Apr May Jun Jul Aug SepOct NovDec 2016 VOLUME USE PRICE Maximum 30/12/2015 Average Minimum 11/02/2016 4,871M 0,386 0,5195 0,381 0,3156 5 Beni Stabili SIIQ and IDG SIIQ 6 FTSE MIB INDEX Performance of Warrants With the issue of shares resulting from the option increase 86,956,536 Aedes Warrants 2015-2020 have been allocated free of charge.