1H 2013 Results 29 July 2013
May 25, 2015
1H 2013 Results
29 July 2013
2
Corporate structure
1H 2013 Results
Non-core investments
Revenues
2012 €2.6Bio €813m €1.3Bio €355 m
52.9% 55.9% 58.3% 51.3%
Businesses
Generation, marketing and supply to residential and business clients in both electricity and natural gas sectors
All Media sectors from dailies and periodicals to radio, Internet, television, and advertising
Global automotive components supplier (filters, engine air and cooling systems and suspensions)
Nursing homes, rehabilitation and hospital management
Education
Venture capital
Private equity
NPL
Competitive
position
Fourth power generator in Italy; second supplier to Italian businesses after incumbent
Leader in circulation of Italian dailies N.1 news magazine N.1 Italian
information website Top private radio
group
Leader in its core businesses (filters and suspensions) in Europe and South America
n.a.
--
Leader in Italian long term care (nursing homes and rehabilitation)
Total € 5.1 Bio
3
CIR group profile
Founded in 1976 by Carlo De Benedetti; controlled ( 45.9%) 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
1H 2013 Results
4
1H 2013 Consolidated financial highlights
Consolidated net result before write-downs: -€ 2.5 m; net loss after write-downs -€164.9m (vs. +€0.7m of 1H 2012):
Contribution from main operating subsidiaries, net of write-downs: €6.3 million Net loss is entirely due to Sorgenia write-downs
Consolidated net debt down to €2,370.1 (-€ 134 million vs. December 2012), mainly due to improvement of working capital and to disposals made by Sorgenia Increase of net financial surplus to € 47.7 million at holding level
1H 2013 Results
1H 2013 Results
5
1H 2013 Subsidiaries’ financial and operational highlights
Key strategic objectives 1H 2013 Highlights
Deleveraging Recovering profit margins Generation assets optimisation
Expansion of digital platforms, leveraging on leadership in traditional media
Further efficiency improvement
Growth in emerging industry sectors, with international focus (eg. Education)
Further consolidation in Italian nursing and rehabilitation
Geographical expansion (India)
Global footprint, growth in Emerging Markets
Product innovation
Further efficiency improvement
Sorgenia
Decreasing but still positive net results in a challenging market La Repubblica still the top daily newspaper for newsstand sales and
readership Decrease of overall advertising revenues (-16.5%), less than the total
market (-17.2%) Increasing advertising on the internet (+3.4%), better than the market Net debt down 22m vs. 4Q 2012 thanks to operating cash flow
Espresso
Sogefi
KOS
Non-core investements
Positive performance of Education business
Continuing growth of revenues (+4.4%) and EBITDA (+9.6%) thanks to acquisitions, organic growth and efficiency improvement
Double digit growth of revenues in non-European markets, especially in North America (+18.4%) and Asia (+34%); stable at consolidated level (+2,2% at constant exchange rates) despite a contraction in Europe
Increase in profitability: EBITDA/sales 11.1% in 2Q13 (vs. 10.0% in 2Q12)
Improvements in operating results thanks to marketing and sales activity,
efficiency improvement and power generation margin recovery
Net debt down 125m vs. 4Q 2012 thanks to divestitures and working capital improvement
6
Consolidated balance sheet – main group assets
1H 2013 Results
119.6 KOS 120.6
€ m
Fixed assets
107.3
19.3 19.0
Group equity in consolidated balance sheet 31 Dec. 2012 30 June 2013
Sogefi
Espresso
Sorgenia
413.2
557.8
414.9
102.8
582.9 Sorgenia 503.7 343.9
1,143.8 Total operating companies 982.2
NPLs 63.8 65.0
Private equity 78.4 77.7
Other investments 56.1 49.7
(2)
Other assets/liabilities
Net cash
(31.3)
33.2
(29.5)
47.7
(5)
(1)
(1) Book value of Sorgenia decreased due to goodwill impairment
(3) 31/12/12 restated as per the amendment of IAS 19 – employee benefits
Consolidated shareholders’ equity 1,363.3 1,211.8
(2) Of which goodwill € 102.8m
(5) Including Junior Notes Zeus
(3)
(3)
(4) Including Cir Ventures, Education and other minor investments
(4)
Consolidated income statement
1H 2013 Results
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KOS Group
€ m
9.4
1H 2012 1H 2013
Sogefi Group
Espresso
Sorgenia Group
266.9
(28.2)
Espresso Group
2.3
11.8
3.1
9.4
(170.7)
2.1
Total operating subsidiaries (4.7) (156.1)
CIR holding level 5.4 (8.8)
(1) Including financial holdings and other subsidiaries (NPL, Cir Ventures, Education and other minor investments)
1H 2013 excl. write-down
(8.3)
6.3
Net income 0.7 (164.9) (2.5)
(1)
Consolidated net financial position
1H 2013 Results
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CIR holding level 33.2 47.7
Consolidated net financial indebtedness (2,504.4) (2,370.1)
Consolidated net invested capital 4,819.6 4,367.3
Total shareholders’ equity 2,315.2 1,997.2
(295.8) Sogefi Group (341.1)
€ m
96.0
(163.4) (173.6)
31 Dec. 2012 30 June 2013
Espresso Group
Sorgenia Group (1,954.0) (1,806.5)
(86.1) (108.1)
KOS Group
Other subsidiaries (16.3) (10.5)
Total subsidiaries (2,537.6) (2,417.8)
(1)
(1) Including derivatives contracts fair value
(2)
(2) Sogefi’s NFP increase due to dividend payment and working capital increase for expansion into non European markets
Net financial position at 30 June 2013 Evolution of net financial position
Net financial position at “holding system” level
1H 2013 Results
Increase of net cash at holding system level is mainly due to financial income related to the portfolio of liquid assets
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(1)
(1) Fair value of securities + securities income, trading
(2) Operating costs, extraordinary costs, taxes, etc.
(2)
Composition of liquid assets and gross financial debt
Liquid assets at 30 June 2013
1H 2013 Results
10
€ m
Hedge funds
Other (stocks, equity funds)
867.1
96.0
84.2
25.6
891.0
90.2
28.6
31 Dec. 2012
30 June 2013
Liquidity
Corporate bonds
Government bonds
282.9
6.7
135.9
636.3
--
467.7
Total liquid assets
31 Dec. 2012
30 June 2013
Lodo Mondadori provision
CIR S.p.A. 2004/2024
564,2
268,5
564,2
276,3
833,9 843.3 Gross financial debt
Other debt 1,2 2,8
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Sorgenia – overview
1H 2013 Results
Sorgenia Power (Termoli CCGT)
Plants
Sorgenia Puglia (Modugno CCGT)
Sorgenia Power (Lodi CCGT)
Sorgenia Power (Aprilia CCGT)
Tirreno Power (pro-rata 50%)
Sorgenia France (50%)
Wind Italy
Hydroelectric (Tirreno Power 50%)
Sorgenia Solar (photovoltaic)
Sorgenia Bioenergy (biomass)
Total capacity (MW)
Total
770
800
800
800
1,690
81
112
37.5
8
1
5,100
Production capacity
MANAGEMENT 0.3%
35.0% 65.0% SORGENIA HOLDING
81.3% 17.2%
1.2%
Sorgenia E&P 100%
50% Fin Gas (70% LNG Med Gas
Terminal)
E&P OTHERS RENEWABLES
LNG Terminal E&P
100% Sorgenia Power
100% Sorgenia Puglia
Thermal Power Generation
100% Vento
S. Gregorio Magno
Castelnuovo di Conza
S. Martino in Pensilis
Campagna Ricigliano
75% Minervino
Wind Italy
Solar 100%
Sorgenia Solar
THERMAL
Sorgenia Green Wind France
50% Sorgenia France
Production
Wind Romania 100%
Sorgenia Romania
Operating structure
€ m
1H2012 1H2013
Revenues 1,119.3 1,169.2
EBITDA before write-downs 32.2 103.2
Net result (54.1) (206.3)
Key financials
1H2013 Performance and outlook
Results from ordinary operations grew compared to the same period of 2012 thanks to the good performance of commercial activities and electricity generation and to the efficiency initiatives undertaken in the last quarters EBITDA before write-downs came in at € 103.2m, three times the result of the first half of last year and equal to the EBITDA before write-downs realized in the whole 2012 Net loss (€206.3m) was almost entirely due to the write-down of its indirect interest in Tirreno Power, of assets in renewable sources and in the E&P sector, and of certain tax receivables (total €190.5m). Actions undertaken by Sorgenia will be further pursued, with the objective of reducing debt and recovering profit margins:
Sale of non-strategic assets Cost reduction Renegotiation of gas contract
78% Energia Italiana (50% Tirreno Power)
EBITDA after write-downs 32.2 (27.8)
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Espresso – overview
1H 2013 Results
NATIONAL PRESS
LOCAL NEWSPAPERS
DIGITAL
ADVERTISING
National daily newspaper
18 Regional newspapers throughout Italy
Group network websites
Three national radio stations
Deejay TV
RADIO AND TV
Collection of advertising
€ m
1H2012 1H2013
Revenues 419.8 369.4
Net income 21.2 3.7
EBITDA 60.8 33.3
Key financials
1H2013 Revenues breakdown
Operating structure
1H2013 Performance and outlook
Circulation revenues at €144.4m (-7% vs 1H2012)in line with the market; advertising revenues at €209.6m (-16.5% vs -17.2% of the overall market) Advertising on the Internet performed well (+3.4% increase, vs. -0.3% of the market) Costs further reduced by 12.8% (excluding digital and DTT activities, whose costs increased due to ongoing development) Still uncertain outlook for 2013, due to ongoing recession heavily affecting advertising investments Key strategic guidelines remain: digital development, leveraging of leadership position in traditional products and cost reduction (new and sharper cost reduction actions lauched)
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Sogefi - overview
1H 2013 Results
ENGINE SYSTEMS DIVISION
SUSPENSION COMPONENTS DIVISION
PRECISION SPRINGS TRUCKS CARS
€ m
1H2012 1H2013
Revenues 686.8 681.7
Net income 15.4 16.1
EBITDA 68.5 71.2
Key financials
PSA FORD
RENAULT/NISSAN
GM
FIAT/IVECO/CHRYSLER
DAIMLER VOLKSWAGEN/AUDI BMW VOLVO DAF/PACCAR
TOYOTA
Revenues breakdown (1H 2013)
MAN
HONDA
CATERPILLAR
OTHERS
13.2%
12.5%
9.2% 10.8%
8.4% 7.3%
4.3% 2.5% 2.1%
2.1% 2.0% 1.8%
0.5% 0.5%
22.8%
65.0% 17.4%
1H2013 Performance and outlook
At constant exchange rates, revenues increased by 2.2% vs 1H 2012; EBITDA was up by 3.9% on 1H 2012. In the second quarter the increase was 15%
Continuing growth in North America (+18.4%), Asia (+34%) and Mercosur (+9.2%): share of total revenues from non-European countries increased to 35%
The car industry at global level is expected to show slight growth in 2013, with strong increase in Asia and more moderate progress in Latin America and North America
Sogefi expects to: continue to grow in non- European markets Continue efficiency enhancement also through a greater integration of the group
Europe
Mercosur NAFTA Asia RoW
13.1% 4.1% 0.4%
Customers Countries
Increasing weight of non-European
markets
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KOS – overview
1H 2013 Results
€ m 2011 2012
Revenues 178.7 186.5
Net income 4.6 6.1
EBITDA 25.0 27.4
Key financials
KOS revenues were up by 4.4% in 1H 2013 thanks to the development of the three business sectors, especially nursing homes and high-tech hospital services Increase in EBITDA and net income was mainly due to development of activities undertaken in 2012 Start-up activities are continuing in India, where the ClearMedi Healthcare JV is active in outsourcing diagnostic and therapeutic technologies to Indian hospitals Main objectives are to pursue market consolidation in core businesses and to selectively internationalize its business footprint
SHAREHOLDERS
HOSPITAL MANAGEMENT
RSA REHABILITATION
CIR (51.3%) AXA Private Equity (46.7%) Management and others (2.0%)
Operating structure
6.2
8.7
0.2
37.1
96.8 7.5
21.4
44.5
102.2 2.3 18.7
Revenues breakdown by region (2012)
4.6
2.9
1H2012 1H2013
1H2013 Performance and outlook
Education
SEG (Swiss Education Group), a world leader in education for hospitality management (hotels, restaurants, etc.) in which CIR has an interest of 20%, reported growing revenues in 1H 2013, with a strong increase of enrolments coming from Asian countries and more recently from Latin America. In March 2013 CIR acquired 100% of the shares of Southlands S.r.l., an international school in Rome with around 500 pupils coming from 40 different nationalities and approx. €6 m of annual revenues, for an investment of €6.5m
Venture capital CIR Ventures is the venture capital fund of the group with investments in companies operating in the sector of information and communications technology. The total fair value of these investments at June 30 2013 was €6.2 million
Private equity Diversified portfolio of private equity funds and direct minority private equity participations. The fair value at June 30 2013 was € 91.4 million decreasing due to redemptions. The portfolio produced a double digit return over its life
NPL At the end of June 2013 the net value of CIR investment in the non-performing loan business amounted to €65 million; all operating activities have been divested and outsourced
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Non-core investments
1H 2013 Results
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Lodo Mondadori
On July 9 2011 the Milan Court of Appeal sentenced Fininvest to pay compensation for damages in relation to the “Lodo Mondadori” case On July 26 2011 CIR received from Fininvest € 564.2 million, inclusive of legal costs and interests This income, in accordance with international accounting standards (IAS 37), has been neutralized until the third and final court ruling As of June 30 2013 financial income of Lodo Mondadori related assets has been substantially in line with legal interest costs being provisioned for
On June 27, 2013 the unique hearing of the parties was held before the Cassazione High Court. Final sentence by the Cassazione is expected
1H 2013 Results
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