1 q15 results
TRANSCRIPT
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Operating structure
Note: The percentages of control are updated as of 31 March 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% 57.7% 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
4
• On July 23, 2014 CIR, Sorgenia Holding and VERBUND AG signed an
agreement with creditors for the restructuring of Sorgenia’s debt. At the same
time, Sorgenia signed a standstill agreement with the lending banks
• The debt restructuring process followed the “182 bis” court procedure, which
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: € 21.2 million (vs. -€ 2.6 million in 1Q 2014).
Contribution of industrial businesses (Espresso, Sogefi and KOS) is + € 13
million, vs. a loss of €1.2 million in 1Q 2014
• Consolidated net financial position of the CIR Group at March 31, 2015:
- €157.4 million (vs. - €112.8 million at 31 December 2014), including:
- A net financial surplus at holding level of €370.1 million
- A net debt of consolidated subsidiaries of - €527.5 million (vs. - €492.3
at 31 December 2014)
1Q 2015 consolidated financial highlights
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Consolidated income statement
Group net result (2.6) 21.2
€ m
Income taxes (8.8) (8.9)
(14.0) Financial expense/income 5.6
22.1
1Q 2014 1Q 2015
EBIT
EBITDA 46.0 61.4
36.2
Revenues 588.7 628.0
Loss on assets held for sale (1.1) --
(1) Net of third party interests (equal to €11.7 million in 1Q 2015)
(1)
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Consolidated income statement by business sector
€ m
(2) Including Treasury and non core investments
1Q 2014 1Q 2015
CIR holding level (1.4) 8.2
Net result (2.6) 21.2
(2)
1.3 KOS Group 1.9
(3.6) Sogefi Group
Espresso Group 1.1 6.7
4.4
(1.2) Total industrial companies 13.0 (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 31 Mar. 2015
129.5 KOS 131.5
95.1 Sogefi
Espresso 347.9 357.2
107.3
(1) Including Cir Ventures, Education and other minor investments
Fixed assets 18.1 17.9
572.5 Total industrial companies 596.0
NPLs 49.3 49.2
Private equity 67.7 72.8
Other investments 33.9 35.7
Other assets/liabilities
Net cash
(16.5)
379.5
(14.0)
370.1
(1)
1,104.5 1,127.7 Consolidated shareholders’equity
532.0 Total CIR and non industrial companies 531.7
(2) Non Performing Loans portfolios
(2)
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Consolidated net financial position
€ m
31 Dec. 2014 31 Mar. 2015
(157.0) KOS Group (195.5)
(304.3)
CIR holding level 379.5 370.1
Sogefi Group
Espresso Group (34.2) (11.2)
(327.5)
(492.3) Total subsidiaries (527.5)
Consolidated net financial indebtedness (112.8) (157.4)
3.2 Other subsidiaries 6.7
Total shareholders’ equity 1,573.2 1,613.5
Consolidated net invested capital 1,686.0 1,770.9
(1) Including third party interests
(1)
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379.5 + 6.4+ 2.5 - 3.9- 14.4
370.1
0
50
100
150
200
250
300
350
400
Net financial surplus
at Dec.31, 2014
Shares buyback Net divestitures Financial income Other costs Net financial surplus
at Mar. 31, 2015
(€ m)
• 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
(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 31 March 2015
€ m
Hedge funds
Other (stocks, equity funds)
382.1
96.0
95.1
30.1
370.1
80.9
32.0
31 Dec.
2014
31 Mar.
2015
Cash and time deposits
Corporate bonds
Government bonds
57.9
5.7
68.6
58.0
7.6
99.3
Total liquid assets
31 Dec.
2014
31 Mar.
2015
CIR S.p.A. 2004/2024 -- --
2.6 -- Gross finanacial debt
Other debt 2.6 --
Fixed income funds 94.0 123.0
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1Q 2015 Subsidiaries’ financial and operational highlights
Key strategic objectives 1Q 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 advertising revenues (-6.9%), vs. -8.0% of the market
Still, in such challenging market, Espresso reported positive net results, stable EBITDA and decreasing net debt (€11.2 m vs. €34.2m at 4Q2014), thanks to continuing efforts on efficiency improvement
La Repubblica is the top daily newspaper for newsstand sales and readership
Repubblica.it confirms its leadership among Italian news sites with 1.6 million unique users per day
Espresso
Sogefi
KOS
Non-core
investments
Positive performance of Education business
Continuing growth of revenues (+11.8%) and EBITDA (+23.4%) thanks to
ongoing organic and external growth
Laurent Hebenstreit selected as the new CEO; formal appointment
expected in June
Revenues growth of 10% at consolidated level (+5.9% at constant
exchange rates):
- Double digit growth in North America (+15.1%) and Asia (+39.7%);
- + 7.7% in Europe
- Continuing weakness in Latin America
Improving EBITDA and net income thanks to higher volumes, favourable
exchange rates and lower restructuring costs
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Espresso - overview
1Q 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
1Q 2014 1Q 2015
Revenues 152.3 146.6
Net income 2.1 12.0
EBITDA 14.2 13.9
Key financials Operating structure
1Q 2015 Performance and outlook
• Circulation revenues at € 55.7 million, decreasing by 3.8%, in a
market down 9.8%. Advertising revenues were down 2.8%, less
than the market (-5.2% in February). Radio advertising grew
+2.6%; internet was in line (+0.1%)
• The increase in net income was due to lower income taxes (by €
2.0 million), to the reorganization of television activities (impact
+€ 1.1 million) and to the capital gain of € 6.1 million related to
the sale of All Music (Deejay TV) to Discovery Italy
• FY 2015 outlook is highly dependent on the performance of the
advertising market, which at present is still uncertain, despite
late signs of improvement
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Sogefi - overview
Revenues 338.7 372.5
Net result (6.3) 7.6
EBITDA 20.9 34.9
Key financials
ENGINE SYSTEMS
DIVISION
SUSPENSION COMPONENTS DIVISION
PRECISION SPRINGS TRUCKS CARS
€ m
1Q 2014 1Q 2015
• 10% Increase in revenues due to higher volumes in all
geographical areas and partly (ca. 4%) to exchange rates
impact
• Revenues grew by 7.7% in Europe, by 15.1% in North
America, by 39.7% in Asia; slight increase also in South
America (+3.3%)
• EBITDA before-restructuring was € 35.2 million (+10.7%
vs. € 31.8 million in 1Q 2014)
• EBITDA and net income benefited from higher revenues
and lower restructuring costs (€ 0.4 million restructuring
costs in 1Q2015 vs. € 11.3 million in 1Q2014)
• In 2015 Sogefi expects continuing positive trends in North
America, China and India, slightly better performance in
Europe and a likely persisting weak environment in South
America
1Q 2015 Performance and outlook
FORD
RENAULT/NISSAN
PSA
FCA/CNH Industrial
GM
DAIMLER
VOLKSWAGEN/AUDI
BMW
VOLVO TOYOTA
DAF/Paccar
2014 Revenues breakdown
MAN
CATERPILLAR
HONDA
OTHERS
12.5% 12.3%
10.6%
11.4%
8.3% 7.4%
3.5%
2.9%
2.2%
2.1% 1.6% 1.3% 0.5% 0.5% 22.9%
64.6%
15.4%
Europe
NAFTA
Mercosur 13.5%
6.1% 0.4%
Weight of non-
European
markets is stable
35.4%
Countries Customers
Asia others
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KOS - overview
€ m 2011 2012
Revenues 95.5 106.8
Net income 2.5 3.7
EBITDA 12.4 15.3
Key financials
SHAREHOLDERS
HOSPITAL
MANAGEMENT NURSING HOMES REHABILITATION
CIR (51.3%)
ARDIAN (46.7%)
Management and others (2.0%)
Operating structure
1Q 2014 1Q 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 (+11.8%), thanks to relevant acquisitions
in the nursing home/rehabilitation area and to organic growth
across all businesses lines.
• Contributions to EBITDA increase were:
- €1.1 million from revenue growth and efficiency
improvement, at constant 2013 perimeter
- €1.8 million from acquisitions and greenfields of 2014/1Q
2015
• Diagnostic and therapeutic technology operations and
development are continuing in India, as well as in the UK
• 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
1Q 2015 Performance and outlook
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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 March 31, 2015 was €21.1 million
• Private equity
- Diversified portfolio of private equity funds and direct minority private equity
investments, with a fair value of € 72.8 million at March 31, 2015. The
portfolio is reaching its maturity phase as limited investments were added in
the recent past
• NPL
- At the end of March 2015 the net value of CIR investment in the non-
performing loan portfolios amounted to €49.2 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