1 h15 results

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Marzo 2014

1H 2015 Results

July 2015

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Operating structure

Note: The percentages of control are updated as of 30 June and are calculated net of treasury shares

€644 m €1.35 Bio €392 m

All Media sectors from

dailies and periodicals

to radio, Internet, and

advertising

Global automotive

components supplier

(filters, engine air and

cooling systems and

suspensions)

Nursing homes,

rehabilitation and

hospital management

Private equity

Education

Revenues

2014

Businesses

Competitive

position

Leader in circulation of Italian dailies

N.1 news magazine

N.1 Italian information website

Third Italian radio network

Leader in its core

businesses (filters and

suspensions) in

Europe and South

America

--

Leader in Italian long

term care (nursing

homes and

rehabilitation)

Non-core investments

56.1% 57.6% 51.3%

Total € 2.4 Bio

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• Founded in 1976 by Carlo De Benedetti; controlled (45.8%) by COFIDE-Gruppo

De Benedetti

• Long term investment strategy, with focus on controlling stakes

• Balanced portfolio of businesses, with leading positions in their respective

businesses

• Active role in governance and in strategic decision making of portfolio

companies

• No leverage and significant liquidity available at holding company level

• Commitment to low cost structure

CIR Group profile

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• The debt restructuring process of Sorgenia debt followed the “182 bis” court

procedure was concluded on February 25, 2015, when the Court of Milan

approved the debt restructuring plan

• On March 27, 2015 the lending banks subscribed to a capital increase in

Sorgenia of approximately € 400 million and a convertible loan of about € 200

million through the conversion of receivables. CIR simultaneously sold its

stake in Sorgenia and no longer owns any shares in the energy company

Exit from Sorgenia

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• Consolidated net income: € 36.4 million (vs. € 5.3 million in 1H 2014).

Contribution of industrial businesses (Espresso, Sogefi and KOS) is + € 21.9

million, vs. €0.9 million in 1H 2014

• Consolidated net financial position of the CIR Group at June 30, 2015:

- €209.5 million (vs. - €112.8 million at December 31, 2014), including:

- A net financial surplus at holding level of €370.8 million (stable vs.

December 31, 2014 despite share buyback expenses)

- A net debt of consolidated subsidiaries of - €580.3 million (increasing vs.

- €492.3 at December 31, 2014 due mainly to new investments and

KOS acquisitions)

1H 2015 consolidated financial highlights

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Consolidated income statement

Group net result 5.3 36.4

€ m

Income taxes (17.8) (16.6)

(27.7) Financial expense/income 4.3

57.3

1H 2014 1H 2015

EBIT

EBITDA 105.1 120.5

69.2

Revenues 1,203.2 1,290.7

Loss on assets held for sale (2.1) (0.1)

(1) Restated following the application of IFRS5

(2)

(2) Net of third party interests (equal to €20.4 million in 1H 2015)

(1)

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Consolidated income statement by business sector

€ m

(2) Including Treasury and non core investments

1H 2014 1H 2015

CIR holding level 4.4 14.5

Net result 5.3 36.4

(2)

3.0 KOS Group 3.9

(4.2) Sogefi Group

Espresso Group 2.1 12.4

5.6

0.9 Total industrial companies 21.9 (1)

(1) Pro-rata share of subsidiaries’ net income

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Consolidated balance sheet – main group assets

€ m

Group equity in consolidated balance sheet 31 Dec. 2014 30 June 2015

129.5 KOS 130.5

95.1 Sogefi

Espresso 347.9 362.8

109.0

(1) Including Cir Ventures, Education and other minor investments

Fixed assets 18.1 17.9

572.5 Total industrial companies 602.3

NPLs 49.3 45.4

Private equity 67.7 66.8

Other investments 33.9 33.8

Other assets/liabilities

Net cash

(16.5)

379.5

(13.7)

370.8

(1)

1,104.5 1,123.3 Consolidated shareholders’equity

532.0 Total CIR and non industrial companies 521.0

(2) Non Performing Loans portfolios

(2)

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Consolidated net financial position

€ m

31 Dec. 2014 30 June 2015

(157.0) KOS Group (231.0)

(304.3)

CIR holding level 379.5 370.8

Sogefi Group

Espresso Group (34.2) (5.0)

(348.0)

(492.3) Total subsidiaries (580.3)

Consolidated net financial indebtedness (112.8) (209.5)

3.2 Other subsidiaries 3.7

Total shareholders’ equity 1,573.2 1,611.8

Consolidated net invested capital 1,686.0 1,821.3

(1) Including third party interests

(1)

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• Decrease of net cash at holding system level is mainly due to purchases of

treasury shares

Net financial position at “holding system” level

Evolution of net financial position as at 30 June 2015

(1)

(1) Fair value of securities + securities income, trading

(2) Operating costs, extraordinary costs, taxes, etc.

(2)

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Composition of liquid assets and gross financial debt

Liquid assets at 30 June 2015

€ m

Hedge funds

Other (stocks, equity funds)

382.1

96.0

95.1

30.1

371.3

51.9

26.3

31 Dec.

2014

30 June

2015

Cash and time deposits

Corporate bonds

Government bonds

57.9

5.7

59.5

91.8

5.6

99.3

Total liquid assets

31 Dec.

2014

30 June

2015

2.6 0.5 Gross financial debt

Other debt 2.6 0.5

Fixed income funds 94.0 136.2

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1H 2015 Subsidiaries’ financial and operational highlights

Key strategic objectives 1H 2015 Highlights

Expansion of digital platforms, leveraging on

leadership in traditional media

Further efficiency improvement

Selective growth in emerging industry sectors, with

international focus

Further consolidation in Italian nursing and

rehabilitation

Geographical expansion (India)

Completion of global footprint, through growth in

non-European countries

Further efficiency improvement and restructuring of

manufacturing footprint

Product innovation

Decrease of press circulation (-4,8%) and total advertising revenues (-3.7%), although at lower rates than the market; internet and radio advertising showed signs of recovery.

In such challenging market, Espresso reported positive net results and stable EBITDA, thanks to continuing focus on efficiency improvement, and decreasing net debt (€5.0 m vs. €34.2m at 4Q2014), thanks to operating cash flow and divestiture of TV assets.

La Repubblica and Repubblica.it confirm their leadership respectively in daily newspaper newsstand sales/readership and news sites unique users rankings

Espresso

Sogefi

KOS

Non-core

investments

Positive performance of Education business

Continuing growth of revenues (+12.6%) and EBITDA (+21.8%) thanks

to ongoing organic and external growth

Revenues growth of 11.8% (+7.9% at constant exchange rates):

- Positive performance in Europe (+10.4%); double digit growth in North

America (+17.3%) and Asia (+35.7%);

- Slight increase in Latin America (+1.3%) despite market slowdown

Improving EBITDA (+20%) and +9,7M net income (vs. -7,3M loss in

1H2014), thanks to higher volumes, lower restructuring costs and lower

financial expenses (mainly non recurring)

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Espresso - overview

1H 2015 Revenues breakdown

NATIONAL PRESS

DIGITAL

ADVERTISING

National daily newspaper

18 Regional newspapers throughout Italy

Group websites

Three national radio stations

LOCAL

NEWSPAPERS

RADIO

Collection of advertising

€ m

1H 2014 1H 2015

Revenues 322.7 305.7

Net income 3.8 22.1

EBITDA 31.0 31.0

Key financials Operating structure

1H 2015 Performance and outlook

• Circulation revenues at € 109.3 million, decreasing by 4.8%, in a

market down 9.9%. Total advertising revenues were down 3.7%:

radio and the internet grew respectively by 3.5% and 2.8% while

printed press was in line with the negative trend of the market

• EBITDA was in line with last year as a result of continuing action

on costs, which were reduced by 6.6%, to an extent substantially

equal to revenues decrease

• Increase in net income was mainly due to lower financial

expenses (by € 2.1 million) and to the capital gain of € 9.3 million

related to the sale of Deejay TV to Discovery Italy

• As for the FY 2015 outlook, notwithstanding a still uncertain trend

in the advertising market, net result (excluding non recurring

items) is expected to be in line with that of the previous year

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Sogefi - overview


Net result (7.3) 9.7

EBITDA 51.7 62.4

Key financials

ENGINE SYSTEMS

DIVISION

SUSPENSION COMPONENTS DIVISION

PRECISION SPRINGS TRUCKS CARS

€ m

1H 2014 1H 2015

• 11.8% revenues growth is due to higher volumes in all

geographical areas and partly (ca. 4%) to exchange rates

impact. Revenues grew by 10.4% in Europe, by 17.3% in

North America, by 35.7% in Asia; slight increase also in

South America (+1.3%)

• Net income benefited from higher revenues, lower costs

and decrease of non recurring financial expenses

• On June 5 Laurent Hebenstreit was appointed as CEO

and Yann Albrand as CFO. One of the priorities of

management is to formulate a new business plan

• In 2015 Sogefi expects to continue on positive trends in

North America and Europe; further growth is expected in

China and India, while in South America the current

weakness phase is expected continue


FORD

RENAULT/NISSAN

FCA/CNH Industrial

PSA

DAIMLER

GM

VOLKSWAGEN/AUDI

BMW

TOYOTA VOLVO

DAF/Paccar

Revenues breakdown (1H 2015)

MAN

CATERPILLAR

HONDA

OTHERS

13.1% 12.6%

11.6%

12.1%

7.3% 7.1%

3.5%

2.7%

2.0%

1.6% 1.6% 1.0% 0.7% 0.4% 22.7%

65.3%

15.8%

Europe

NAFTA

Mercosur 11.8%

6.6% 0.5%

Weight of non-

European

markets is stable

34.7%

Countries Customers

Asia others

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KOS - overview

€ m 2011 2012


Net income 6.0 7.6

EBITDA 28.0 34.1

Key financials

SHAREHOLDERS

HOSPITAL

MANAGEMENT NURSING HOMES REHABILITATION

CIR (51.3%)

ARDIAN (46.7%)

Management and others (2.0%)

Operating structure

1H 2014 1H 2015

5.2

2.3

5.7

10.2

36.6

114.3 7.6 23.5

45.4

107.1

18.8

Revenues breakdown by region (2014)

4.5

• Increase in revenues (+12.6%), thanks to relevant acquisitions

in the nursing home/rehabilitation area and to organic growth

across all businesses lines.

• Contributions to EBITDA increase were:

- €1.4 million from revenue growth and efficiency

improvement, at constant 2013 perimeter

- €4.7 million from acquisitions and greenfields of 2014 and

2015

• The company now has 75 nursing homes in the centre and

north of Italy with more than 7,100 beds, plus ca. 200 under

construction

• Main objectives are to pursue market consolidation in core

businesses and to selectively expand internationally, with a

primary focus on India


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• Education

- CIR has an interest of 17.4% in SEG (Swiss Education Group), a world

leader in education for hospitality management (hotels, restaurants, etc.).

The book value of the investment at 30 June, 2015 was €22.5 million

• Private equity

- Diversified portfolio of private equity funds and direct minority private equity

investments, with a fair value of € 66.8 million at 30 June, 2015. The portfolio

is reaching its maturity phase as limited investments were added in the

recent past

• NPL

- At the end of June 2015 the net value of CIR investment in the non-

performing loan portfolios amounted to €45.4 million.

- CIR no longer owns operating companies in this industry and is currently in

the process of collecting the existing receivables, with no further investments

Non-core investments

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• This document has been prepared by CIR for information purposes only and for use

in presentations of the Group’s results and strategies.

• For further details on CIR and its Group, reference should be made to publicly

available information, including the Annual Report, the Semi-Annual and Quarterly

Reports

• Statements contained in this document, particularly the ones regarding any CIR

Group possible or assumed future performance, are or may be forward looking

statements and in this respect they involve some risks and uncertainties

• Any reference to past performance of CIR Group shall not be taken as an indication

of future performance

• This document does not constitute an offer or invitation to purchase or subscribe for

any shares and no part of it shall form the basis of or be relied upon in connection

with any contract or commitment whatsoever

Disclaimer

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www.cirgroup.com

1 h15 results

Presentations & Public Speaking

Transcript of 1 h15 results