Immobiliare Grande Distribuzione SIIQ S.p.A. (IGD) Earnings Call Transcript & Summary

Good morning, Chorus Call operator. Welcome to IGD's conference call presenting 2025 full year results. [Operator Instructions] Let me now turn the conference over to Mr. Roberto Zoia, CEO and General Manager of IGD. Dr. Zoia, you have the floor.

Good afternoon to all of you, and welcome to our conference call. We have just finished our Board meeting. And of course, there was a lot of enthusiasm and satisfaction, it is exactly the same feeling I have now disclosing IGD's results for the full year of 2025 above and beyond figures, this is really a turning point as far as our operations are concerned. If you move to Page 2, you will find a summary of the main actions and results we rolled out, we achieved in 2025. Starting from the bottom, we noticed that in all quarters, our core business proved to perform very positively and consistent quarter after quarter, consistently quarter after quarter. We'll tell you about the financial profile of our organization as well. And if we go back 1 year, 1.5 years and the way we actually were then, I think that in 12 months, so we did a lot of things, great things both on the debt reduction front and also maturity extension front. The new disposal strategy provided excellent results, and I'm confident it will provide results just as good in 2026 as well. We've already disposed of five assets for about EUR 22 million, but we have a very interesting disposal pipeline to engage in as well. And last year, with the closing of our accounts for 2024, we've gone back to paying out dividends, and we paid out about EUR 0.10 per share. And let's now move to Page 3. As you can see, all KPIs are well in the positive domain. And look at net rental income on a like-for-like basis, because as of today, I think it's very important that all of us focus on the core consolidation scope of our company as Romania for what we have done in the past year and what we have in the pipeline for 2026 makes us focus on a like-for-like, which is up 4% as far as net rental income is concerned. Core business EBITDA-wise was up 3%, and first and foremost, our FFO, our funds from operations, landing at EUR 41.2 million. I'm sure you all remember that we had increased our guidance in August disclosing EUR 39 million. And then during the presentation of the first nine months results, I said, well, I'm not sure I can disclose it now, but I'm confident we can improve our funds from operations. We actually strongly improved it because we landed at EUR 41.2 million, up 15.7% versus 2024. And last but not least, we see a group net profit with a profit of EUR 32 million that could be compared to the loss we booked of EUR 32 million -- EUR 30 million we booked last year, and we had booked losses for three years in a row. So, after three years of losses, we are back generating profit and you see EUR 60 million. EUR 60 million are not revaluations or other special lines. It's just core business and finance with whatever that scope includes. Operating performance that, of course, drive our revenue growth were excellent because tenant sales went up 1.6%. IGD hypermarket sales went up 0.8% and footfalls went really well, they were up 3.5%. That is well above the average we have at national domestic shopping centers. And this operating performance, of course, is driving our leasing activity and management of our assets. Let me remind you that when I actually became CEO in 2024, I was given the mandate as CEO, talked about three very important levels. The first one was to actually achieve an occupancy level that was to be similar to that of the European players. We were at 84.7%. Today, we are in excess of 96%. Our target, occupancy target is 98% in 2027, by 2027. So our leasing activities are indeed driving our occupancy rate. As we said, we had deadlines for tenants because the tenants could withdraw and those maturities were short. We started from 1.78 years as WALB. Now we are at 2.09 years for Italian malls. But very important is that in 2025, we renewed 10% of our contracts in our rental pool with an upside of 1.4% in Italy. That, of course, has to be added to inflation. Organic growth is, therefore, the outcome of the performance our shopping centers delivered. Page 6, new openings. That is part of our strategy, a strategy we've identified previously. We are looking for anchor tenants, focusing on anchor tenants. And in 2025, we engaged a very strong leasing activity, and we really focused on brands that could have a strong appeal in the catchment area we were focusing on. So, the main chain, national and international, chose our shopping centers to open up new stores. And I must say, and maybe I'm answering a question that probably will be asked later on, they are really looking for new openings. The main brands are really hungry for new openings. And that is really helping us both on the occupancy side and the net rental income side. Let's move to Page 8. Another growth lever is digital, digital transformation. We reinforced, we really strengthened our loyalty app that is to say the opportunity for our clients in 12 shopping centers to enjoy promotions, dedicated promotions, ad hoc promotions. And we have more than tripled the app users in one single year. So figures are starting to support these programs. A stronger digital activity so the more people subscribe, the more profiles we can come up with, the more we can talk to these customers and offer ad hoc proposals. And we try to keep a very strict -- sorry, very strong connection with our tenants, and we created an ad hoc app, a platform so that we can somehow have a conversation, have a dialogue with our tenants for the data we exchange turnovers, et cetera, and also a way to build a constant relationship based on technology, based on digital components, and of course, it's targeted on shopping centers and sales, of course, operators and tenants that are in our shopping centers. So the investments we've made starting from 2024 are starting to bear the first fruits. What can I say? We are now on Page 9 of the presentation, just to make you aware that over the last quarters, you always felt me being very confident on retail as an asset class. And I've always been confident because I have the opportunity to see data and figures vis-a-vis the way our shopping centers were faring. And the trend has now been, of course, also accepted and fostered on the investment side. And in Italy, the real estate transaction were about EUR 4 billion out of EUR 13.5 billion overall. So -- and retail was the really leading asset class, the #1 asset class volume-wise. And when I talk about real estate retail, it's not just one retail category as it was in the past, I used to say, for instance, supermarkets or high street stores. In 2025, the EUR 4 billion devoted to retail, invested in retail, cut across the board. It was shopping malls. It was the one in Bergamo Orio al Serio, EUR 470 million, for instance, but there were transactions of shopping centers for EUR 20 million, EUR 30 million, and then supermarkets, a good quantity of them outlets. And there you have specialized players. And then a stake also went to high street as well. EUR 4 billion worth of retail investment, and rightly so, we should say some research companies also included the Grandi Stazioni transaction, which is approximately EUR 1 billion because the Grandi Stazioni business is exactly what we do that is lease rental revenue and media LED walls, digital totems that we approach in commercial centers. So the business is there. Same trend in Romania was the first class in terms of transactions in Romania as well. This performance -- operational performance climate, which is positive and investment market, which is favoring the retail real estate asset class has led to a revaluation of the portfolio, so an increasing value of the portfolio for hyper and super, ,and malls in Italy. Now I want to say this loud and clear. There is no interest rate effect, both in terms of actualization rates and exit yield have remained unchanged. That means that 1.8% of revaluation is the result solely of the cash flow produced by individual malls because everything is concentrated in the malls segment. Hypermarkets have very long-term contracts and it increases because of inflation that stands at 75. So that segment has remained flat. The big benefit came from the mall but without a decompression of the yields at the appraisal levels, which is instead expected longer term. As at the 31st of December 2025, our portfolio had grown by 1.8% at constant rates, so simply operational. On Slide 11, there's a detailed description of what I was mentioning before. Again, 1.8% for Italian malls with plus 2.14% for products we had at hypermarket in Naples, where we've changed the operating company to our satisfaction at a lower rent than before. We lost some money there, but it works perfectly now. Romania suffered from some loss of value, and that's to be honest, that's pretty good at a stage when Romania is no longer core or strategic and so it will have to be divested in. Let me add that two leasehold properties, one in Livorno and the other one in Bologna. We had already closed the master lease one year ago. At last Tuesday, it came to a final close. And this effect, which is negative under our own profile, we will have one that will come to a close in 2027, but one has already left our perimeters. And we'll see that because it will be reflected in lower structural write-downs or impairments. Going to the financial indicators on the next slide, we've done a lot of work. The loan-to-value or LTV has improved. You know that we have a goal of 40% by 2027, and it went down by approximately 100 basis points. It's between 90 and 100 and we stand at 43.5%. But what matters is the reduction in the cost of debt. Last year, I mean, 2024, we stood at 6%. We now are at 5.1% as at December 31. But with the transactions we signed on last Tuesday, post-financing, we stand at 4.8%, which means that in one year, we reduced the cost of debt by 120 basis points on top of everything else. On Slide 13, I think it's interesting also with an eye to the future. You see that the like-for-like delta between Italy and Romania is almost EUR 4 million and that mitigates the effect of the disposals. So we have the freehold net rental income that goes down by EUR 2 million, but which are recovered on the finance side. However, today, the organic growth of the core portfolio allows us very calmly to deal with the Romanian disposals and to deal with what will be needed to reduce our debt and to fund operations on the existing portfolio. Slide 14. In step with that, you have the core EBITDA. We have a delta on revenues, net revenues from services, which also contributes to mitigating the effect of that change in income scope. On Slide 15, you see the financial management, which gave us a lot of satisfaction was a source of great satisfaction. We mentioned this also in our press release over 12 months, we have refunded EUR 1.1 billion, which was refinanced at lower cost. And the lower cost in terms of the financial management or income at the structural level helped us save EUR 8.7 million in financial charges, which increased our FFO. So the actual result that you see today in terms of the FFO improvement is in part ascribable to the like-for-like growth, but most of it came from our financial position by lowering the average cost. Again, FFO. Slide 16. We have a footprint change that is reflected here, which is more than offset by the EUR 2.9 million in core business and EUR 9 million in financial income or position. We start from a guidance, which had already increased in August, up from EUR 39 million and we are closing at EUR 41.2 million. On Slide 17, you see the net group result or profit. Because this has to do with the extraordinary management of fair value adjustments. Last year, we had gone for a one-shot adjustment of our Food Fund and the other adjustments that have taken us where we stand today. This year, we're benefiting from a higher FFO on the one hand and on the other hand, a write-up, which is concentrated on the core portfolio. Now based on this, this morning at the Board of Directors' meeting, we resulted to submit the proposal to the shareholders, and the proposal is EUR 0.15 per share as a dividend, which is very consistent with the growth that we have witnessed over this year in terms of shares, in terms of results, because it is plus 50% versus the EUR 0.10 that we had paid in the previous financial year. Now we've discussed this in the past, and even today, I think, IGD is a dividend machine, provided that it is sustainable. From zero, two years ago to the EUR 0.10 cents and EUR 0.15 cents that we have resolved upon today, the growth trend is clear, and we want to keep the same line with this, but it has to be supported by the actual results that the company can score. It's important to mention that the EUR 0.15 cents per share will be paid from profit that is exempted, and we're not therefore affecting anything. Exempt management. We have profit. We pay dividends that come from the exempt operations. In our case, with the exception of EUR 300,000, which are part of provisions that are always exempted, all the rest will come from exempt operations. This tells you that our style of management and the visibility of the profit in the medium to long term will ensure that dividends become increasingly interesting. So we have a payment data, number of coupons, number of coupons payment date, record date and dividend calculation date as you see here. On Slide 19, I would like to remind you of the most important financial transactions. I mentioned EUR 1.1 billion in February 2025 with the EUR 615 million signed in the form of green secured loan agreement. We received orders for EUR 1.3 billion and then the last loan signed just a couple of days ago amounting to EUR 285 million. So we are extending the deadlines and rebalancing between the bank and the market. Our net financial position has gone down. The LTV has improved. The average cost of debt has also improved. The ICR as well. Net debt to EBITDA has improved. So everything is improving across the board. We have not attained the goal, and the big results are here to encourage us, we want to go back to growing and paying dividends in a sustainable way, substantial dividends. Today, I feel I can say that 22 months after I took office, we have carried out our task in a very effective way. Even this morning, the board reminded us that in April 2024, this stock was traded at EUR 1.40, last night it was EUR 4.20. So we tripled the value of our shares. For our shareholders it is still discounted. I've seen just like you the results of the main European peers in operational terms, we're absolutely in line with them. Clearly, companies that are listed elsewhere have lower discounts or much lower discounts than IGD is getting, but we've got nothing to envy them in terms of how we're managing things. Now the maturities. This will help us focusing on our core business with the last refinancing, the first significant maturity will be in 2030, December 2030. So we have over four years ahead of us. All this ability to work around finance and the core business has been made possible by revising the process or confirming parts of the process also based on the ratings of the rating company. The last good news with the Standard & Poor's positive outlook was the last of the good news -- latest of the good news. On Page 22, you're seeing the rebalancing between the banks and the market, is 60% banks secured, 40% unsecured and market. So this gives you the idea of how this rebalancing is happening for the entire structure. Of course, when based on that, our EPRA NAV indicators went up. And if we take the EPRA standard, it was up 1.8%. So we are land at [ 9.03 ] still at a sizable discount, a very impactful discount when it comes to the discount to NAV of our organization. And now I'm on Page 24. This morning, we also approved our sustainability report that was -- that will we already have an opinion release, but it will be certified by Deloitte audited by as auditing company. We try to really work on the five main activities that we have committed to from now going forward when it comes to our sustainability policy. So we really focused on the environment, both to reduce greenhouse gas emissions and also to manage waste. We have a best practice at national level when it comes to waste sorting. So we are thinking of a waste policy that has already been rolled out where we also collect waste for our tenants to then send them to recycling facilities. And then we have approved a DE&I, diversity, equity and inclusion policy that was approved and certified. And our headcount is flat, but we did a lot on the welfare side. And I must say that our people, our employees are at the very heart of the results we have managed to achieve. They are the real drive behind it. And there's an excellent relationship between the top management and the employees. We are very much together, very united. And that is something I am trying to pursue personally as well. And we are really focusing on compliance as well. We launched a policy on our supply chain. So all suppliers have to subscribe to set policy. And we invested a lot on events and initiatives at local level, and we try to be as transparent as we can with all of the stakeholders involved. From a finance perspective, today, it's very important to have assets that are ESG compliant and a way to communicate that to communicate our commitment is through certification. We have completed 92% of the process as far as market value is concerned of our certified portfolio. And what we feel we can -- we are confident to achieve today is to further increase our FFO by about 10% to 9.2%. And what I can tell you today is that FFO for 2026 will be at least EUR 45 million. And I'm saying at least because, of course, we want to wait for at least this quarter and see how things are faring. I can tell you that January for us was a very positive month for us. I'm sure you read it. Sales went really well for tenants, but let's wait for a couple of months before we can take stock. But already having a 9.2% outlook for FFO, we think is laying the right foundations to look forward and look ahead of us. Let's talk about 2026. We, of course, we are already achieving the results of our business plan from here to 2027, the goals we had envisaged for every year, we are on track with that because we are achieving them. Our financial balance sheet and operating structure is highly consolidated. It is very strong so that we can be confident in looking ahead to the future. But the thing I really focus on is let's improve on each and every part of the plan and let's seize all possible growth opportunities that means to be more attractive, which means having and providing a better dividend, you name it. So, today, our organization is indeed in a position to be optimist. And if you look at data and figures, they are ever improving. Our teams are extra are super committed to really roll out results. So we're ready to start growing again starting and moving forward from the next two, three years. And then on Page 29, you see our agenda, both corporate and our Investor Relations, and then there are annexes. But I think it's more interesting for you to move on to the Q&A session. And of course, we are here ready to take your questions. Thank you very much.

This is the Chorus call operator. Let's now start the Q&A session. [Operator Instructions] The first question comes from the line of Arianna Terazzi with Intesa Sanpaolo.

Thank you for your presentation. I need some clarifications. First of all, revenues from services. And can you better explain the role of your asset services for third-parties business unit and the deal made with Coop Alleanza end of December? With end of December. Are you following along those lines? And then footfalls and tenant sales. Could you elaborate on that, maybe industry performance data. Could you elaborate on that as well? And then your guidance for 2026 on FFO, do you think one of the drivers will be further disposals for that?

Thank you very much, Arianna. So services to third parties services, we have not yet fully tapped the potential of the agreement we made with Coop Alleanza. We've not yet touched from it. It's going to be over three years out of 47. And we set up the whole organization and we're really focusing on this type of operations on the management side and on the technical side. Because a lot of these services have both important on the leasing side and on the technical side in our consolidated financial statements, they deliver EUR 2.3 million margin, the delta between revenues from services and direct cost driven by services. And it's a high profitability or high-margin activity. It could decline over time because we need to have corporate functions that are now within the SIIQ, but will also work for the service business unit, and we're sharing them with them now. But to the present time, it's indeed, it's a sizable contribution they provide, and we want to invest in it a lot. Please consider that in addition to the agreement with Coop Alleanza, we made some offers also around in the market to try and improve or increase our client portfolio, our client base. As far as footfalls and tenant sales, for sure, the best performer so far is personal care, perfume shops and whatever is connected to that. And then we have restaurants that are growing. And very satisfactory is also the apparel side, clothing and apparel. Although we reduced it, it's still one of the most interesting product categories for all shopping malls. As far as valuables are concerned, where we have the greatest satisfaction probably perfume shops and personal care, jewelry stores, that segment, just to give you an idea or give you some more color on the matter. Another interesting piece of information, I think, is the depth of assortments that these tenants are offering. And you see the different slides where we've given you some brand names. It's all stores that are rather big in size, Calliope, JD, Mango. Today, clients want to be able to rely on a big assortment and a suitable assortment. So the best results are achieved where you have a bigger surface covered rather than the smaller stores surface-wise. And that for us is indeed a very interesting piece of information. As far as restaurants and catering, et cetera, it's food, it's a surprise, especially during the weekend where the ticket value is much higher. it means that households, families are going to the shopping mall and are eating there. They have lunch there or in the shopping mall in the different restaurants and caterings. And then we also have a greater benefit when we have cinemas or movie theaters. End of January with the Avatar and Checco Zalone movies, there were a lot of customers, and that was really a big drive for restaurants and catering in general. And the third one was, yes, on the guidance, FFO guidance, we foresee an organic growth because we are practically taking the financial benefits from the last transaction, the November bond and the Tuesday financial agreement that can lead to further reduction of financial charges and then, of course, like-for-like growth. Let me remind you that in our business plan, we said 16% of like-for-like growth. That's what we envisage. We are on the right pathway to embark on that journey. And the rest is organic growth with 4 plus organic growth, two main contributors, revenue growth with increasing occupancy and then the cutting of costs where we have vacant spaces. In addition, if there are vacant spaces, of course, we don't have revenues and we have expenses. So, if you add all those elements up, you get to the guidance, the EUR 45 million guidance.

Next question from Simonetta Chiriotti, Mediobanca.

I have a couple of questions. The first is about dividends. You said that the dividends have to be sustainable. So I'm wondering, since in 2025, the payout on FFO, if I'm not mistaken, was 40%. Can we imagine that you're going to maintain the same level of payout or perhaps a growth of dividends in line with the growth of the FFO also considering the goal to reduce the LTV. Another question. On Slide 23, you mentioned how the NAV is performing. Why has the fair value still got a negative impact? And so it reduces the growth versus the positive performance in the FFO. So I would have expected at least a neutral impact, not a negative one.

Thank you, Simonetta. The dividend must grow more than the FFO. Let me explain. With the disposal of Romania, we will approximate relatively as the goal be 40%. But let me state right now that it is not associated in any way to the FFO. But this year already, we had said that the FFO had grown by 15.7%, but the dividend increased by 50%. So, clearly not. To me, the indicators are, of course, the FFO with an eye at the LTV and also the fact that the dividend needs to pay the shareholders well based on where the shares, where the stock is going to be. Yes. As for the other one, it's not an assessment. It's the net of everything you see in the NAV where you have the IFRS as a part of 16 and the other write-downs, the growth, if you want to have the data, the fair value that you alluded to, 1.8% in NAV growth versus the 1.8% which is the growth in core portfolio and the other one is an effect that does not come from the real estate. It's not impacted by the real estate. Well, thank you. Next question?

Next question comes from the English conference, Steven Boumans with ABN AMRO.

I have two on refinancing. So, the first one, could you refinance the EUR 273 million bank debt due in 2031? Could you refinance that this year? And what could the difference in annualized interest expenses be? And maybe also some color on the possible timing and impact on FFO if this will be successful? And the second question, you extend the debt maturity. I think rating agencies are happy to see that. Hence, could we expect a Fitch upgrade soon? And would that impact the interest paid for existing debt? And to what extent would that be, if possible?

That was your complete question.

Yes.

That was it?

Yes.

So, let me start from the second question. For sure, but you can see it from the Fitch report and S&P report, the extension of our maturities is one of the contributors or one of the indicators that they look into to really assess our organization. It's not an automatic, let's say, that a refinancing can lead to an upgrade. It's on Fitch, surely not because they're committing they've only met recently. But for S&P, so far, they've improved -- increased the outlook, but let's wait and see in the coming months if they come up with an upgrade. But the answer is that it does not happen automatically between actually refinancing one's debt and receiving an upgrade by the rating agency. Whilst -- as to the cost of debt post financing, if you go to Page 12 of the presentation, it's 4.8% versus 5.1% before prefinancing. Did that answer your questions?

No, no, no. What I mean, how much -- financing opportunity. Sorry, no, didn't fully capture my question. So the question is how much refinancing, so improvement in financing cost is included in your '26 guidance? And do you think on top of that, that you can do better, for example, for refinancing the EUR 270 million bank debt due in '31 refinanced debt this year, maybe it also has a benefit on FFO if successful.

[Foreign Language]

Do you got my question?

Of course, the refinancing, the latest one did not have an impact in 2025 because it's just very recent. But in 2026, they will have benefit from the refinancing, which the average cost of debt will go from 5.1% to 4.8%. And for the full year, they will have the EUR 300 million bond, which is -- dates back to November 2025, the issuance. And we only benefited from it for two months in 2025. So, throughout 2026, we will benefit from that as well. Did that answer your question now?

I'll give you a call after this call. Maybe that's easier. Sure.

Very well. That's going to be easier, yes. Any other questions?

[Operator Instructions] The next question comes from the Italian conference from Federico Pezzetti with Intermonte.

I have a couple of clarifications. Let me go back to the 2026 guidance because I lost the impact you expect from the 2026 disposals, if I'm not mistaken. I think you can get very close to EUR 70 million as stated in your business plan. And what is the impact you assumed on FFO deriving from that? And then another clarification as to the growth drivers on the rental and lease side, how about discounts and rebates? Could you elaborate on that and tell us if currently, they are included in the figures you are in the data you are proposing? Have you already embedded also possible discounts or rebates that you're going to grant? Could you elaborate on that?

Very well. I do confirm that we estimated between EUR 50 million and EUR 70 million worth for the Romanian disposals. And the guidance, of course, takes disposals into account. So there's no caveat there. So, EUR 45 million. But at the same time, we want to sell part -- dispose of part of the Romania and reinvest in Italy. The rest, of course, will be used to reduce our debt position. So, absolutely, yes. And as far as the growth in rental fees and lease, we organized things also on the leasing side, we organized things so that rebates or discounts are not part of our forecast. Any possible discounts are managed only if absolutely necessary is included and granted only if absolutely necessary. So far, there are no major tensions between us and the tenants. What we are doing when it comes to renewals and new contracts is to have the first two years with somehow with steps, because on the one hand, we are somehow being more appealing for tenants. They see the first two years that are years that are start-up rent, stat rent and they have a benefit in the first two years. And then, of course, we extend the deadline at the same time. We -- for the time being, there's nothing different. The objective is to have at least 36 months WALB instead of 2.09 WALB I showed you before on the screen. So going forward, we want to have a start-up phase to you help your tenant. And then at the same time, you benefit from the break option the tenant has extending it, extending the duration. And what do we have to monitor when we had the biggest tensions above and beyond COVID, it was in 2022 when energy costs have gone up incredibly and our tenants really suffered. And at times when there are very diverse or different market situations, very different from today. So, as far as energy is concerned, I said that last time, we have a coverage for 2026, we have 70% of the energy covered at a fixed rate. And that really is a good protection for our tenants as well. So the existing discounts are very limited and very targeted. But today, it's not one of the topics we discussed. The real topic is according to me, is that in the past, we thought one would think that have longer contracts would be a plus. But on the contrary, we have seen that today, a rotation of tenants, so a changing of brand, changing of product category that is better meeting the needs of our clients is very much appreciated, especially in shopping malls that are not very big, 50, 60, 70 stores at the most. And it's clear that it's more cumbersome and more difficult for us to have this rotation, this turnover. But we've seen that, for instance, for restaurants and catering, indeed, people consumers who go to that shopping mall, having always the same restaurants. After a while, they get fed up and they go somewhere else. The same applies to shopping in the different stores being offered. I think that going forward, the work we will have to do will be also on the asset management side. We will have to focus on customer needs to try and meet them providing the right product, the right product categories. Action, for instance, today opened about 130 stores in two years. And it's really incredible the amount of people who go there and buy products that are -- the cost of which is EUR 1.50. So, it's a traffic generator and you can't not have them because if you want to beat the competition, if you want to be attractive, you have to have stores like those. We have them in three of our shopping malls, and it's three shopping malls that are really doing a lot better than in 2019, footfalls wise. One of them consider that it's in the ESP Ravenna shopping mall, ever since they've had action, they are generating better results than in 2019. So we have to sacrifice something today to really have that kind of retailers in our shopping malls. And then discounts and rebates are processed on a case-by-case basis. And the only product category, and we talked about this, but we'll go back to it, was home decor. Post-COVID, the booming business was with people somehow redecorating their homes and then some other for instance, retailers started suffering after that, Portobello, Kasanova, et cetera. That type of market, home decoration, maybe it's worth being underweight in one shopping malls. So the work we are doing is exactly that. We try and change and adapt our product categories as fast as we can as we go along.

And if I may, just a follow-up on valuations. The valuations are growing, thanks to your operations. But if I'm not mistaken, last time we talked at the end of the first nine months 2025, you had an expectation that they could be adjusted or discount rate could be or cap rates could be discounted downward what kind of interactions you have with the appraisers.

Yes, sure. Yes, I've been talking to everyone. I think that they expect with time, some super transaction, a massive transaction, in terms of more aggressive yields. So, they're cautious, and knowingly so. On our side, the same operational data, I mean, to me, at least on the ACC, they still have rates that are way too high, that are not justified. Their perception is still that they think they should fear something in terms of macroeconomy. I've had a look at the latest research. There's not such a level of risk they fear on asset A or B. Their worries are of a macroeconomic nature, the wars underway, the tariff policy, et cetera, et cetera. So, there's a lot of caution, not so much on real estate, but in terms of the macroeconomic conditions. Clearly enough, if in the next three to four months, some aggressive transactions happen such as the one in Orio al Serio, evidently, then the rate would be revised. I can say today, and I expect to see some decompression starting in June, at least on the actualization rate with the ECB with the product in terms of the ECB with a product that is not very risky, I think we could get there. Well, perhaps the appraisers should receive aggressive transactions to support their decisions and anything else. But with a plus 1.8% on a like-for-like perimeter without finance and without attacking the rate to me is an excellent signal. That means that the business is growing organically. And if there were an advantage granted by the rates in the future, that would help us reach our LTV goal of 40%. And if that were the case, then that would put us on a much more aggressive growth curve of course.

Thank you very much. [Operator Instructions]. Mr. Zoia, for the time being, there are no other questions in the queue.

Well, then this being the case, if you want to receive more details for ABN AMRO, and for everybody else, we're here to take your questions. Thank you for attending and see you next time.

This is the conference call operator. The conference is over. You can disconnect your devices. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]