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July

27

2018

CIR Group: revenues up by 4.9% in first half 2018

Board of Directors approves results as of June 30 201

CIR GROUP: REVENUES UP BY 4.9% AT € 1,431.1 MLN IN FIRST HALF 2018

EBITDA (€ 167.5 MLN) AND NET INCOME (€ 25.4 MLN) IN LINE WITH 2017

NET FINANCIAL POSITION OF THE PARENT COMPANY AT 30/6 POSITIVE FOR € 328.8 MLN

Milan, July 27 2018 – The Board of Directors of CIR-Compagnie Industriali Riunite S.p.A., which met today under the chairmanship of Rodolfo De Benedetti, has approved the Semi-Annual Financial Report for 2018 as presented by Chief Executive Monica Mondardini.
The CIR group operates mainly in three sectors: automotive components (Sogefi), media (GEDI Gruppo Editoriale) and healthcare (KOS).


Consolidated results


The revenues of the CIR group in the first half of 2018 came to € 1,431.1 million, posting a rise of 4.9% from € 1,364.9 million in the same period of 2017. The increase was due to the growth in revenues of KOS (+12.7%), mainly because of the acquisitions made last year, and to those of GEDI (+20.2%) thanks to the merger of the ITEDI group.

The gross operating margin (EBITDA) came in at € 167.5 million (11.7% of revenues), in line with the figure of € 168.1 million (12.3% of revenues) reported in the first half of 2017.

The net income of the group was € 25.4 million compared to € 26.8 million in the
first half of 2017.

The contribution of the industrial subsidiaries (Sogefi, GEDI and KOS) to net income in first half 2018 came to € 21.5 million versus € 21.1 million in the corresponding period of 2017.

Sogefi
reported a decline in revenues of 2.1% at current exchange rates but a rise of 3.2% at constant exchange rates; EBITDA came to € 104 million, lower than in the first half of 2017 (€ 114 million) because of the negative impact of exchange rates and the rise in steel prices, which had a negative effect on the profit margin of the Suspensions business unit. Net income came in at € 17 million compared to € 19.4 million in the same period of 2017.

GEDI
, whose main business activity continues to be affected by an extremely critical evolution, reported a rise in revenues of 20.2% compared to first half 2017, thanks to the merger with ITEDI, EBITDA of € 22.2 million, in line with the previous year, and net income of € 4.3 million (€ 7.4 million in 2017).

Lastly, KOS reported a rise in revenues of 12.7%, due to growth in all areas of its business and to the full contribution of the acquisitions made in 2017. EBITDA was up by 24.6% at € 49.1 million and net income was € 16.5 million (€ 11.3 million in the first half of 2017).

The contribution of the parent company (including the non-industrial subsidiaries) was a positive € 3.9 million, down from € 5.7 million in the first half of 2017 due to the lower result of financial management.

Consolidated net debt
stood at € 320.6 million at June 30 2018, up from € 272.5 million at December 31 2017 and € 163 million at June 30 2017.

The total net debt of the industrial subsidiaries amounted to € 649.4 million at June 30 2018, which was higher than the figure at December 31 2017 (€ 615.5 million) mainly because of the distribution of dividends by KOS and the acquisitions completed in the first half of 2018. It was also significantly higher than the figure at June 30 2017 (€ 483.4 million) mainly on account of the disbursements made by GEDI in the last quarter of 2017 to settle a tax dispute for events going back to 1991. After the close of the first half of the year, on July 2 2018, GEDI paid out a further amount of € 35.1 million as the last instalment of this settlement process.

The net financial position of the parent company (including the non-industrial subsidiaries) at June 30 2018 was a positive € 328.8 million, compared to € 343 million at December 31 2017 and € 320.4 million at June 30 2017. The change in the first half of 2018 was caused by disbursements made for the distribution of dividends (€ 24.8 million) and the buyback of own shares (€ 7.4 million), partly offset by the positive cash flow from operations (€ 18 million).

The equity of the group amounted to € 951 million at June 30 2018, down from € 961 million at December 31 2017. The € 10 million change was a combination of the higher net income of the period and the reduction due to the distribution of dividends and the buyback of own shares. At June 30 2018 the CIR group had 16,417 employees (15,839 at December 31 2017).


Results of the industrial subsidiaries of the CIR group

Automotive components: Sogefi


Sogefi is one of the main producers worldwide in the sectors of suspensions, filtration, and air and cooling systems for motor vehicles with 41 production plants in three continents. The company is controlled by CIR (56.6%) and is listed on the Stock Exchange.

Sogefi’s sales revenues in the first half of 2018 came in at € 839.1 million, up by 3.2% at constant exchange rates and down by 2.1% at historical exchange rates, compared to the same period of 2017.

By geographical area, at constant exchange rates revenues showed a slightly positive performance in Europe (+0.7%), a positive one in North America (+1.6%) and grew significantly in Asia (+10%) and South America (+13.5%).

By Business Unit, at constant exchange rates, Suspensions reported growth of 7.1% (+1.9% at current exchange rates mainly because of the decline in value of the South American currencies), Filtration reported an increase of 2.7% (-4% at current exchange rates mainly due to the loss of value of the South American currencies) and, lastly, Air and Cooling reported a decline of 1.2% (-5.1% at current exchange rates, affected particularly by the trend of the Canadian dollar).

EBITDA came in at € 104 million, posting a decline compared to first half 2017 (€ 114 million). The reduction was due to the evolution of exchange rates (which had a total effect of € 5.4 million) and the negative impact of the rise in the price of steel (€ 6 million) on Suspensions. Profitability (EBITDA/revenues) declined from 13.3% to 12.4%.

Net income came to € 17 million, down from € 19.4 million in the first half of 2017 (2% of revenues versus 2.3% in 2017).

Net debt stood at € 259.6 million at June 30 2018, down by € 4.4 million compared to December 31 2017 (€ 264 million).

For further information on the results of Sogefi, see the press release published by the company on July 24 (goo.gl/ofK8o2).

Media: GEDI Gruppo Editoriale


GEDI Gruppo Editoriale (formerly Gruppo Editoriale L’Espresso), after the merger of ITEDI (publisher of the newspapers La Stampa and il Secolo XIX) in 2017, is now the leading publisher in Italy of daily and multimedia news, as well as being one of the main players in Europe. It operates specifically in the following sectors: newspapers and magazines, radio, the internet and the collection of advertising. The group is controlled by CIR (45.8%) and is listed on the Stock Exchange.

GEDI’s
revenues for the first half of 2018 came in at € 322.5 million, up by 20.2% on first half 2017 (-5.7% on a like-for-like basis).
Circulation revenues, totalling € 141.9 million, rose by 30.7% compared to the same period of the previous year (-8.7% on a like-for-like basis), in a market that has continued to record a significant decline in newspaper circulation.
Advertising revenues were up by 15.1% compared to the first half of 2017 but were down by 2.1% on a like-for-like basis. As regards the group media, orders for the radio grew by 7%, those for the internet rose by 21.5% and those for the printed press were up by 20%.
Costs rose by 22.6% but on a like-for-like basis declined by 3.5%.
EBITDA came to € 22.1 million versus € 22.5 million in the first half of 2017. Net income came in at € 4.3 million, down from € 7.4 million in the first half of 2017 (€ 5.6 million on a like-for-like basis).

Net debt stood at June 30 2018 came to € 111.4 million, down from € 115.1 million at December 31 2017.

For further information on the results of GEDI, see the press release published by the company on July 25 (goo.gl/L6WnKN).

Healthcare: KOS

KOS, which is controlled by CIR (59.5%) and in which F2i Healthcare has an interest, is one of the largest groups in Italy in the sector of healthcare and social care (long-term care, diagnostics and oncology treatments, and the management of hospital facilities). The group manages 85 facilities mainly in the centre and north of Italy, for a total of 8,038 beds and is also active in India and the United Kingdom.

In the first half of 2018 KOS reported revenues of € 269.5 million, posting an increase of 12.7% from € 239.1 million in the same period of 2017, thanks to the growth of all areas of the business, to the full contribution of the acquisitions made in 2017 and to the revenues from the acquisitions made in the first half of 2018. EBITDA came to € 49.1 million, up by 24.6% from € 39.4 million in the first half of 2017.
Net income was € 16.5 million versus € 11.3 million in the first half of 2017. Net debt totalled € 279 million at June 30 2018, up from € 237.1 million at December 31 2017.

Non-core investments

The non-core investments of the CIR group consist of private equity initiatives, non-strategic shareholdings and other investments with a total value at June 30 2018 of € 77 million (€ 74 million at December 31 2017).
More specifically the CIR group has a diversified portfolio of funds in the private equity sector. The fair value at June 30 2018 was € 49.3 million, down by € 3.7 million compared to December 31 2017 mainly as a result of distributions.
At June 30 2018, CIR directly or indirectly had investments in non-strategic shareholdings worth € 16.8 million and a portfolio of non-performing loans worth a total of € 10.9 million.


Results of the parent company CIR S.p.A.


The parent company of the group CIR S.p.A. closed the first half of 2018 with net income of € 18.2 million, up from € 11.5 million in 2017 because of the greater inflow of dividends.
The company’s equity stood at € 877.6 million at June 30 2018, down from € 890.7 million at the end of 2017 after the distribution of dividends (€ 24.8 million) and the buyback of own shares (€ 7.4 million).


Outlook for 2018

As regards the performance of the CIR group in the whole of 2018, the trends seen in the first half of the year are expected to be confirmed unless there are any extraordinary events that cannot at the moment be foreseen.

***
The executive responsible for the preparation of the company’s financial statements, Giuseppe Gianoglio, hereby declares, in compliance with the terms of paragraph 2 Article 154 bis of the Finance Consolidation Act (TUF), that the figures contained in this press release correspond to the results documented in the company’s accounts and general ledger.
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27 July 2018 | 12:00 CEST

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