Letter of the CEO

As of 31 December 2020, IGLI (“IGLI” or the “Parent Company”), a wholly owned subsidiary of Financiere de Participations Internationales, Dutch company controlled by the Vergara Poeti-Marentini family, holds stakes in the following business sectors: transport infrastructures, digital infrastructures digital, private equity, clothing and textiles, real estate and Agricultural and Financial Institutions in Europe, the United States, South America and Australia.

From January 2020, the international scenario has been heavily influenced by the spread of Covid 19 and the consequent restrictive measures for its containment put in place by the public authorities of the countries concerned. In this context, the first objective of all the companies in the holding was to secure all its employees, users and consumers and take action to support management initiatives of the emergency and hospitals on the front line in the fight against the pandemic.

IGLI companies worked closely coordination with institutions to ensure, among other things, the mobility of goods and people also and above all in lockdown phases.

The results of IGLI in the year 2020 were inevitably heavily burdened by this situation, despite the efforts made at all levels to contain them the negative effects.

In the transport infrastructure sector, IGLI acquired 47% of participation in the world’s second largest operator of highways and airports, but sanitary restrictions and mobility regulations adopted by numerous governments following the worldwide expansion of the pandemic generated a significant reduction in the volumes of traffic on motorway and airport infrastructures in concession with respect to 2019, with geographically diversified impacts, mainly related to the timing of the spread of the pandemic as well as the different restriction measures adopted in the various countries. For the infrastructures under concession of our new acquisition, there are more marked effects for airport activities (–75%) compared to motorways (–23%), due to the crisis which involved the sector more intensely, specially airplane transport. Nonetheless, IGLI made such acquisition knowing in advance its adverse effects, more as a business opportinity, and ready to assume its role as responsible investor with a 6-year plan to reestructure and recover the losses caused by these bleak times.

The Digital Infrastructure sector was marginal exposed to the health crisis thanks to the exponential increase of data traffic, digital communication and connectivity, generated by mobility restrictions.

In the Agricultural sector, record revenues by the Bio Agro Brands group in South America were favourably impacted by the demand of food at homes, also as a result of the measures limiting the free movement of people. In order to mitigate the economic and financial effects the companies of Bio Agro group promptly activated plans for cost containment, portfolio optimization of concessions and flexibility of the financial structure to put the group in the best conditions to accelerate growth and support the creation of long-term value. Sales of meat also grew by 18% in our combined operation in Argentina and Brazil.

In the Clothing and Textile sector, the situation lockdown for commercial businesses dedicated to sales of clothing and accessories in Europe was also impacted. Despite the heavy effects on sales of business partners, the drought situation in Australia boosted the income of our wool industry, that has grown ever since in 4.8%. IGLI and Bio Agro promptly took action necessary to mitigate the negative effects on any result without however, slowing down the transformation process underway for making our textile operation in Patagonia (Chile and Argentina) and Yorkshire (England) more modern, faster, digital, humane and sustainable.

In the real estate sector, the temporary closure of commercial activities and the drastic reduction in mobility of people produced a slight reduction in revenues for the discounts and concessions granted to tenants but did not prevent our controlled companies from continuing with the activity of investment and development. In the United States alone, our subsidiary continued with the construction of housing projects worth more than USD$600 million. We have expanded investments now to include property and land in places as far as the Seychelles and the Maldives, which have a great potential for touristic development in the future.

Our private equity brand, BI-Invest, also experienced a decline in its revenues, primarily by the lockdown situation in the countries where investee companies operate, but the investment portfolios remain healthy, and new strategies have been put in place to reverse the losses. 

In summary, the 2020 financial year was a challenging year, characterized by a significant slowdown in activities which resulted in a heavy economic result negative, but all IGLI companies worked with determination, a sense of responsibility and trust for contain the negative effects and put yourself in the conditions of make the most of the expected normalization of the situation.

In September 2020 IGLI completed the sale of 100% Mercure Invesco shares for a consideration of € 50.7 million to Etablissement de Financement et de Participation Industriels Holding B.V. 

On 17 September 2020 the Board of Directors of IGLI approved a capitalization operation of the subsidiary Bio Agro Brands Internation for a total amount of euro 300 million, to be completed by 31 December 2022 through the conversion of a pre-existing loan, for euro 100 million, and a further capital increase, up to to a maximum of euro 200 million, of which euro 100 million were paid by 31 December 2020. Finally, on 16 December, 2020, the Board of Directors of IGLI approved the granting of a loan in favor of Bio Agro Brands, in one or more tranches, for an amount of a maximum total of € 80 million for a term not exceeding 7 years, non-interest bearing and subordinated, aimed at supporting, together with the increase of capital, the development plan of the subsidiary.

On 27 May 2020, IGLI signed with Swiss UBP an 18-month credit line of euro 300 million – increased on 20 July 2020 to euro 400 million- guaranteed by BI-Invest shares held by the subsidiary BI-Invest Investment S.á.r.l. The line has the form of a Revolving Facility it provides, among others, the maintenance of a relationship minimum between the market value of the shares as collateral and amount used. At 31 December 2020 the line is entirely unused.

Our Net Asset Value (NAV) contracted between 2019 and 2020 by € 1.496 million, specially by the direct hit that took our BI private equity funds and their investee interests, with a Gross Asset Value (GAV) that went from 41.9% in 2019 to 35.3% in 2020 (a € 1.467 million total reduction).

On 16 May, 2020, the General Assembly of IGLI S.p.A. declined the distribution of a dividend as the world continued its battle and struggle against a catastrophic pandemic. 

I’d like to close this year’s letter by saying thank you to all of the employees of IGLI and its companies. 2020 was a year when outside forces barged their way into our work and personal lives like no year in recent memory. Your ability to focus on keeping our business on the rails and moving forward amidst the backdrop of 2020 is inspiring.

2021’s annual meeting will once again be in a virtual format. When better, travel-friendly days return, we will be delighted to meet our managers in person. We look forward to the days ahead when such occurrences are no longer the exception, and we can all raise a glass to a post-COVID world.