CIR: filing of documentation for AGM

Milan, April 9 2021 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in extraordinary and ordinary sessions for April 30 2021, at a single calling, it is announced that the following documentation is available at the Company headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.it (section Governance/Shareholders meetings) and on the authorized storage mechanism eMarket STORAGE:

  • The Annual Report and Financial Statements for the year ended December 31 2020, the Report of the Board of Statutory Auditors, and the Reports of the Firm of Auditors (item 2 of the ordinary part);
  • The Report on Corporate Governance and ownership structure as per Art. 123 – bis del TUF;
  • The Consolidated Non-Financial Report for 2020;
  • The Report of the Board of Directors on the proposed authorization to buy back own shares and use them as appropriate (item 3 of the ordinary part);
  • The Report on Compensation Policy and Remuneration Paid as per Art. 123 – ter of the TUF (item 4 of the ordinary part).

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CIR: documentation filed for AGM

Milan, March 30 2021 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in extraordinary and ordinary sessions for April 30 2021, at a single calling, it is announced that the following documentation is available at the Company headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.it (section Governance/Shareholders meetings) and on the authorized storage mechanism eMarket STORAGE:

  • The Report of the Board of Directors on the proposal to eliminate the indication of the nominal value of the shares and the consequent amendment of Art. 4, paragraph 1, of the Company Bylaws (sole item of the extraordinary part);
  • The Report of the Board of Directors on the proposal to approve Stock Grant Plan 2021 (item 5 of the ordinary part);
  • The Report of the Board of Directors on the proposal to reduce the number of Board members from 12 to 11 (item 6 of the ordinary part).

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CIR: resignation of a Director

Milan, March 29 2021 – CIR S.p.A. announces that Pia Hahn Marocco has, for personal reasons, resigned her position as member of the Board of Directors of the Company as from the coming Annual General Meeting of the Shareholders.

It should be remembered that Pia Hahn Marocco is an independent Director as well as being on the Control, Risk and Sustainability Committee and the Committee for Related-Party Transactions.

As of today Pia Hahn Marocco is not the owner of any shares of CIR S.p.A..

In line with the compensation policy adopted by the Company, there is no indemnity or any other benefit following the termination of a position.

CIR would like to thank Pia Hahn Marocco for her work on behalf of the Company.

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CIR: results for 2020

  • 2020 results impacted by the effects of the Covid-19 pandemic on the business of the subsidiaries: revenues € 1,834.8 million (€ 2,001.6 million in 2019), EBITDA € 227.0 million (€ 274.8 million in 2019).
  • Net income at € 16.3 million and reduction of consolidated net debt before IFRS 16 to € 100 million (€ 227.6 million) thanks to the extraordinary transactions completed during the year.
  • Net financial position of the parent company a positive € 391.7 million, up from December 31 2019 (€ 296.2 million).
  • Fourth quarter recovery: volumes back in line with Q4 2019 for Sogefi, rehabilitation activity resumes for KOS.

Milan, March 12 2021 – The Board of Directors of CIR S.p.A., which met today under the chairmanship of Rodolfo De Benedetti, has approved the proposed financial statements and the consolidated accounts of the group as at December 31 2020 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

The results of the group in financial year 2020 were affected by the impact of the Covid-19 pandemic on the business of the subsidiaries, which operate in sectors that have been hard hit by the public health crisis.

KOS, the company active in social healthcare services, had to counter the consequences of the pandemic on its nursing homes for the non self-sufficient elderly (RSAs) and the decline in rehabilitation services, partly because of the stress affecting the health system, which led to a significant reduction in programmed hospital activities. In the second half of the year activity in the rehabilitation sector recovered, while the activity of the nursing homes continued to suffer because of the difficulties involved in accepting new patients at this stage. The number of presences was therefore significantly lower than the historical averages.

Sogefi, the company active in the production of automotive components, in the first half of 2020 reported an unprecedented fall in volumes, as did all the sector, caused by the generalized suspension of production activities and plummeting demand. In the second half of the year production recovered considerably, reaching volumes close to those of 2019.

Financial management reported positive results, thanks to the recovery of all the main financial markets in the second half of the year.

During the year some significant extraordinary transactions were concluded.

In April 2020, CIR completed the sale of its controlling interest in GEDI, of which it now holds 5%, following the strategic decision taken in 2019 to exit the sector in which the group operates and the agreement reached in December 2019 with EXOR.

In November 2020, KOS sold its subsidiary Medipass, realizing a significant capital gain; the deal was part of the strategy of focusing on and developing the long-term care business, even abroad, particularly in Germany, where it acquired the Charleston group, a significant organization that has 47 care homes and over 4,000 beds.

Lastly, Sogefi has launched a plan for rationalizing its geographical presence and its industrial footprint, with the aim of increasing the profitability of the group, particularly in Filtration, selling its branches in Brazil and Spain.

The extraordinary transactions had a positive impact on the group’s results and brought about a significant reduction in consolidated net debt.

CIR’s consolidated revenues came in at € 1,834.8 million, down by 8.3% compared to 2019 (€ 2,001.6 million), because of the reduction in the business of both sectors in which the group operates due to the circumstances caused by the pandemic.

The consolidated gross operating margin (EBITDA) came to € 227.0 million, 12.4% of sales versus 13.7% in 2019 (€ 274.8 million).

The net result was a positive figure of € 16.3 million.

The consolidated net debt before IFRS 16 stood at € 100.0 million at December 31 2020, down sharply (€ 227.6 million) compared to December 31 2019 (€ 327.6 million). Financial payables for rights of use as per IFRS 16 totalled € 796.8 million at December 31 2020 and thus overall consolidated net financial debt came to € 896.8 million. The payables as per IFRS 16 refer mostly to the subsidiary KOS (€ 730.3 million), which operates mainly in leased premises.

The net debt of the subsidiaries fell to € 491.7 million (€ 623.8 million at December 31 2019) as a result of the contraction reported by KOS, which was due to the sale of Medipass.

The net financial position at December 31 2020 of the parent company (including the non-industrial subsidiaries), before IFRS 16, was a positive € 391.7 million, up from the figure at December 31 2019 (€ 296.2 million).

The equity of the group stood at € 771.0 million at December 31 2020 (€ 770.7 million at December 31 2019).

KOS

In 2020, KOS’s revenues came in at € 631.6 million, up by 17.4% on 2019, thanks to the constant development achieved in recent years and more especially to the acquisition at the end 2019 of Charleston, which operates in Germany in the care-home sector. Revenues in Italy were down by 9.5%.

In the Italian care homes, activity focused on the difficult management of the public health emergency. During the year, new admittances were frozen or at least extremely limited and thus the number of presences fell and remains significantly lower than in 2019, even today.

In the German care homes, the impact of the pandemic was decidedly less severe from the healthcare point of view and thus even the reduction in the number of guests was less extreme than in Italy. Moreover, the public support given to the care homes limited the economic impact.

In the rehabilitation and acute care facilities in Italy, where in the first half there was a decline in the number of patients following a slowdown in normal hospital activity, a strong recovery took place in the second half of the year with performance in line with the same period of 2019.

EBIT came to € 15.4 million, down from € 57.9 million in 2019: the reduction was due both to the decline in the number of guests and services provided because of the healthcare emergency, but also to the higher costs incurred for protection measures to counter and contain the effects of the pandemic.

KOS reported net income € 46.7 million (€ 30.3 million in 2019), thanks to the result of the sale of Medipass.

In November 2020 KOS indeed sold the Medipass business in Italy and the UK to DWS Alternatives Global Limited (“DWS”), keeping the Indian branch. The enterprise value recognized was € 169.2 million, with an equity value of € 105.6 million, a capital gain for KOS of € 54.4 million, net of the transaction costs incurred, and a positive impact on the overall net financial position of € 162.8 million.

Free cash flow amounted to a positive € 167.2 million, almost entirely generated by the Medipass deal. The group made investments in new facilities for approximately € 30 million.

Net debt stood at € 200.7 million at the end of 2020 versus € 368.0 million at December 31 2019.

Sogefi

In 2020 world car production fell by 16.2% compared to 2019: -23.3% in the EU, -20.1% in North America, -4.2 % in China and -30.7% in South America, due to an unprecedented contraction in the first half of the year. The second half was characterized by a recovery of the business in all geographical areas, with world production in the period almost in line with 2019.

Sogefi reported a decline in revenues of 17.8% at current exchange rates (-14.2% at constant exchange rates), outperforming the market in Europa, NAFTA and China.

The normalized net result, excluding non-recurring restructuring charges, was around breakeven, thanks to the measures adopted to counter the crisis in the market, which led to a slight increase in the contribution margin (to 30.8%, versus 30.2% in 2019) and a reduction in fixed costs of approximately 20%, with a ratio to sales unchanged from 2019 at 17%, despite the lower revenues, and lower at 15.8% in the fourth quarter (17.1% in the last quarter of 2019).

The net result was impacted by the charges incurred for the restructuring plan launched in 2020 and already implemented in part, the net amount of which comes to a total of around € 16.0 million. Moreover, at the end of 2020 the group sold the Brazilian Filtration branch, posting a loss for the year of approximately € 15 million, mostly due to accounting effects of the deconsolidation.

Free cash flow was a negative € 38.2 million (compared to cash generation of € 8.4 million in 2019), due mainly to the unfavourable evolution of working capital caused by the particular circumstances that occurred during the year.

Net financial debt before IFRS 16 stood at € 291.3 million at December 31 2020 (€ 256.2 million at the end of 2019).

In 2020 Sogefi obtained new contracts for a value in line with previous years and consistent with the objectives of maintaining/increasing its market share, with a significant portion of the new orders being for hybrid or full electric vehicles, thus positioning itself in the markets of the future.

Financial management

Thanks to the recovery of the markets in the second half of the year for all categories of asset, total net financial income of € 17.3 million was reported, with a return on the portfolio of 4%. More specifically, the total return on readily liquidable assets, i.e. the portfolio of shares, bonds and hedge funds, rose to 5.3% (€ 19.1 million), while the portfolio of private equity funds and minority equity investments reported a decline in fair value of € 1.8 million, with a return of -2.3%.

Outlook for the year

Given the continuing uncertainty regarding the evolution of the pandemic, there is limited visibility as to the performance of the group’s businesses in the coming months.

As far as KOS is concerned, thanks to the effect of the vaccination plans, a return to pre-Covid levels is expected to take place in 2022. In Germany, given the lower impact of the pandemic and the greater public sector subsidies, results should continue to be in line with the growth forecasts made when the acquisition took place in 2019.

As for Sogefi, IHS expects world production to recover by 13.7% compared to 2020 although the level will still be lower than in 2019 (-4.8%). In this scenario Sogefi forecasts a return to profit for the full year 2021 thanks to a recovery in volumes and the action on costs already taken and programmed.

Dividend proposal

The Board of Directors has decided to propose to the Annual General Meeting of the Shareholders that no dividends be distributed.

Shareholders’ meeting

The Annual General Meeting has been convened in an ordinary and an extraordinary session to be held at a single calling on April 30 2021. The Board of Directors at today’s meeting has adopted the following resolutions:

  • To propose in the extraordinary part of the Shareholders’ Meeting that Art. 4.1 of the Company Bylaws be amended to eliminate the nominal value of the shares. The institution of shares without a nominal value is a useful tool in terms of flexibility as it simplifies a broad range of the Company’s capital transactions (such as, for example, the cancellation of own shares, and capital increases and reductions).
  • To put before the ordinary session of the Shareholders’ Meeting a motion to cancel and renew the authorization of the same Board of Directors for a period of 18 months to buy back a maximum of 225,000,000 of its own shares and in any case up to 20% of the share capital at a unit price that cannot be more than 15% higher or lower than the benchmark price recorded by the shares on regulated markets on the trading day preceding each single buyback transaction or the date on which the price is fixed. In any case, when the shares are bought back with orders placed in the regulated market, the price must not be higher than the higher of the price of the last independent transaction and the highest current independent bid price on the same market, in compliance with what is set out in EU Delegated Regulation no. 2016/1052. This authorization is being requested for the following reasons: to fulfil the obligations resulting from possible stock option plans or other awards of shares of the Company to employees or members of the Board of Directors of CIR or its subsidiaries, to have a portfolio of own shares to use as consideration in any possible extraordinary transactions, even those involving an exchange of equity holdings with other entities within the scope of transactions of interest to the Company (a so-called “stock of securities”); to support the liquidity of the shares in the market, to optimize the capital structure and to reward shareholders in particular market situations; to take advantage of opportunities for creating value, as well as investing liquidity efficiently, in relation to the market trend; for any other purpose qualified by the competent Authorities as admitted market practice in accordance with applicable European and domestic rules, and with the procedures established therein.
  • To put before the ordinary session of the Shareholders’ Meeting for approval a stock grant plan for 2021 aimed at directors and/or executives of the company and its subsidiaries for a maximum of 5,000,000 conditional rights, each of which will give the beneficiaries the right to be assigned 1 CIR share free of charge. The shares will be made available from the own shares held by the Company.

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Sogefi: consolidated results for 2020. New CEO appointed

FOURTH QUARTER 2020
Revenues and results higher than in Q4 2019

RESULTS FOR THE YEAR 2020 
The group showed resilience in a totally exceptional year

Revenues: € 1,203.2 million, -14.2% at constant exchange rates (car market -16.2%) 
Outperformed market in all geographical areas
In Q4, revenues higher (+8.9% at constant exchange rates)

EBITDA margin, excluding non-recurring charges, was higher reaching 13% of revenues (12.1% in 2019)

Net result before non-recurring charges and result of operations for disposal close to break-even (€ -3.4 million)

Net non-recurring charges for rationalization actions came to € 16.2 million (€ 4.3 million in 2019)

THE BOARD APPOINTED AS NEW GROUP CEO FREDERIC SIPAHI, LEADER OF THE AIR & COOLING BUSINESS UNIT TURNAROUND AND SINCE 2019 ALSO MANAGER OF THE FILTRATION BU

Milan, February 26 2021 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the proposed financial statements for the year 2020, presented by Mr Mauro Fenzi.

The Board of Directors appointed the current General Manager of the Air & Cooling and Filtration Business Units, Mr. Frederic Sipahi, as new group CEO, in substitution of Mr. Mauro Fenzi.

Frederic Sipahi, aged 40, has a business education and has spent his entire career in the automotive sector, initially in PSA, then in Faurecia and since 2012 in Sogefi.

Since 2015 he has led the Air & Cooling division, achieving a significant improvement in performance, both in terms of increased profitability and cash generation; he also achieved positive results in 2020, despite the extraordinary context. He also reoriented the division’s product strategy, by effectively positioning it towards new technologies.

Since 2019 he has also led the Filtration division, where he launched major rationalisation and efficiency enhancement programs.
Mr. Fenzi said: “After a year of intense work, my managerial role at Sogefi comes to an end for personal reasons. Sogefi has an extremely motivated and competent management team, that is well equipped to face with the right determination the challenges of the next few years. I take this opportunity to thank my collaborators for their professional and decisive contribution and the members of the Board of Directors for their continuous support”. The Board of Directors thanked him for the work done.

SUMMARY OF RESULTS FOR 2020

After the first half of 2020 in which world car production suffered a dramatic and unprecedented fall (-33.2%) due to the effects of the spread of the Covid-19 pandemic, in the second half of the year the market reported a definite recovery compared to the previous half (+44%), with volumes substantially unchanged compared to the same period of 2019 thanks to the growth reported in the last quarter of 2020 (+2.5%). The recovery in the fourth quarter was seen in all markets: China, where production was up by 5.9% on the fourth quarter of the previous year, NAFTA, the EU and South America, with volumes substantially equivalent to those of the fourth quarter of 2019 (+0.5%, +1.4% and +1.3% respectively).

Despite the recovery in the second half, the results for the whole year reported an extraordinarily significant downturn compared to 2019: -16.2% for world car production,  -23.3% in the EU, -20.1% in North America, -4.2 % in China and -30.7% in South America.

In 2020 the Group’s priority was the safety of its employees; from the moment when news came of the Covid-19 phenomenon in China, action was immediately taken to reduce the risk of contagion and then all the measures recommended for health and safety in the workplace were adopted, reviewing the production processes and implementing new safety protocols, which involve physical distancing and the use of individual protection systems. Currently it has been decided to maintain the measures to limit the presence of personnel in the workplace, with staff working from home.

At the same time radical action was taken to mitigate the impact of the crisis, and of the consequent contraction in sales, on results and on the capital solidity of the Group. The measures put in place made it possible to obtain the following:

  • An increase in the contribution margin to 30.8% from 30.2% in 2019;
  • A 19.1% reduction in fixed costs with an unchanged ratio to sales of 17%, which was down in 4Q 2020 (15.8% versus 17.1% in 4Q 2019).

Moreover, in 2020 Sogefi obtained new contracts for a value in line with previous years and consistent with the objectives of maintaining/increasing its market share, with a significant portion of the new orders being for hybrid or full electric vehicles, positioning itself in the markets of the future.

More specifically, 25% of the value of the orders acquired in 2020 by the Air and Cooling division is destined for cooling hybrid or full electric vehicles; the division also obtained an important contract (Life Time Value: € 100 million) to supply air-intake manifolds in aluminium to a prime German OEM,  launching a new product line in a sector in which the division is already market leader.

Similarly, 35% of the value of the orders received by the Suspensions division is for hybrid or full electric vehicles, thanks to the new product developed to meet the light-weight and time-to-market requirements of electric vehicles and to the receipt of an order from a prime North American producer of full electric vehicles.

REVENUES

In 2020, Sogefi’s revenues totalled € 1,203.2 million and were down by 17.8% on 2019 at historical exchange rates and by 14.2% at constant exchange rates.

An examination of the performance of revenues throughout the year shows that in the first quarter revenues fell by 9.6%, because of the spread worldwide of the pandemic as from March; in the second quarter they fell by 55.6%, in a phase of substantial lockdown in the main markets; during the third quarter there was a gradual recovery (-6.6% on 2019), which led to growth of 2% in the fourth quarter (+8.9% at constant exchange rates) compared to the same period of 2019.

Performance of revenues by geographical area

The performance of revenues at constant exchange rates was better than the market in all the main geographical areas; the decline in Europe was 18.1% versus the market’s -23.3%, and in North America it was 9.8% versus -20.1%; in Asia revenues rose, while the market reported -7%, thanks particularly to the good performance of China (+15.8% versus the market’s -4.2%).

Performance of revenues by Business Unit

Filtration (with an 8.1% decline in revenues at constant exchange rates) and Air and Cooling (-10.7% at constant exchange rates) reported a much less negative result than the market thanks, for Filtration, to the fact that the OES and Aftermarket channels held up better and for Air and Cooling to the development of the portfolio of contracts particularly in China and North America. The impact of the crisis was greater for Suspensions, which suffered a fall in revenues of 22.7% at constant exchange rates, reflecting the greater concentration of the business in Europe and South America and the particularly bad performance of the sector in these areas.

OPERATING RESULT AND NET RESULT

The results of the group were affected by the fall in revenues and the non-recurring charges linked to the launch of plans for reducing fixed costs, particularly in Europe, and for rationalizing the Group’s footprint (sale and closure of two production sites in Europe) as well as its geographical presence (sale of the filtration business in Brazil).

EBITDA came in at € 137.6 million compared to € 177.4 million in 2019. Excluding the rationalization charges as above, EBITDA declined from € 177.4 million to € 156.9 million with profitability (EBITDA / Revenues %) of 13%, which was higher than the figure for 2019 (12.1%).

The contribution margin for 2020 was slightly better than that of 2019, rising from 30.2% to 30.8% and the ratio of fixed costs to sales remained unchanged, despite the lower revenues, thanks to the cost-cutting measures taken, which were partly temporary and partly destined to become structural.

EBIT came to € 7.2 million, versus € 48.4 million in 2019.  The lower EBIT reflects the fall in revenues, the gross non-recurring charges of € 20 million (€ 4.3 million in 2019) and further write-downs of fixed assets for € 12.9 million (€ 4.9 million in 2019), resulting from the action taken by the company to counter the crisis.

The Group reported a net loss from businesses destined to continue of € 19.6 million, mainly because of € 16.2 million of non-recurring rationalization charge (versus earnings of € 11.1 million in 2019). The operations sold between the end of 2020 and the beginning of this year (the Brazilian subsidiary and the Spanish subsidiary of the Filtration business unit) gave rise to a loss of € 15.5 million, which compares with a loss of € 7.9 million in 2019.

DEBT AND EQUITY

Regarding Free Cash Flow, in 2020 an amount of € 38.2 million was absorbed (versus cash generation of € 8.4 million in 2019), mainly as a result of the evolution of working capital due to the particular circumstances that arose during the year.

Net financial debt before IFRS16 stood at € 291.3 million at December 31 2020 (€ 256.2 million at the close of 2019), but was lower than at September 30 2020 (when net debt was € 299 million).

Including the financial payables for rights of use, as per IFRS 16, the net debt amounted to € 358.1 million at December 31 2020, up from € 318.9 million at December 31 2019. It should be noted that in 2020 the Group invested in the development of a new suspension production site in Romania, with the aim of increasing the group’s competitiveness in the sector, and signed the lease agreement for the new site, which led to the recognition of an IFRS 16 payable of approximately € 19 million.

At December 31 2020 the covenants contained in the loan agreements were being complied with.

At December 31 2020 the Group had committed credit lines in excess of its requirements for € 340.1 million (of which € 100 million earmarked for the repayment of the convertible bond maturing in May 2021); in 2020  new medium-term loan agreements were signed for a total amount of € 134.5 million, including a loan of € 80 million (signed in October 2020) granted by prime Italian banks and guaranteed by SACE, and new credit facilities with French banks for a total of € 54.5 million, most of which are also guaranteed by the French state.

At December 31 2020 shareholders’ equity, excluding minority interests, amounted to € 133.0 million (€ 188.7 million at December 31 2019).

SUMMARY OF RESULTS OF FOURTH QUARTER 2020

The revenues for fourth quarter 2020 rose by 2% at historical exchange rates and by 8.9% at constant exchange rates compared to the same period of 2019.

EBITDA, excluding the charges for the rationalization action, came in at 14.5% versus 12.3% in 2019.

For operations destined to continue the Group reported a net loss of € 4.4 million caused by non-recurring rationalization charges of € 11.9 million (versus a loss of € 0.9 million in the same period of 2019). The businesses sold between the end of 2020 and the beginning of this year (the Brazilian subsidiary and the Spanish subsidiary of the Filtration business unit) generated a loss of € 7.6 million, which compares with a loss of € 4.2 million reported by the same subsidiaries in 2019.

Free Cash Flow before IFRS 16 was a positive € 8.7 million, in line with the same period of 2019.

IMPACT OF COVID-19 ON BUSINESS

Following the spread of the Covid-19 pandemic, Sogefi first suspended production in China and then in the second half of March suspended activity in almost all of its production sites. Business started to resume first in China and then from May onwards in all the other countries in which the Group operates, albeit with production volumes that were until August significantly lower than those of the previous year and of expectations.

As for the evaluation of the impact that the pandemic is having on the Group, the pre Covid-19 forecasts had envisaged that sales revenues for 2020 would be substantially in line with 2019 and in the first two months of the year the Company did in fact report volumes equivalent to or higher than those expected. However, during subsequent months there was an extremely significant decline with a recovery only from June onwards. Because of this, in 2020 Sogefi reported revenues of € 1,203.2 million, 17.8% lower than those of 2019 at historical exchange rates; this reduction was almost entirely attributable to the effects of the circumstances brought about by the pandemic. The contraction in volumes, although partly offset by the reduction in fixed costs, nonetheless involved an estimated negative impact on EBIT of € 34 million and of € 21 million on the net result, with a consequent increase in debt.

As well as having reacted promptly to reduce the impact of the crisis from March until today, the Company has also adopted a plan to adapt its structure to the changed market circumstances and this plan is already being implemented.

RESULTS OF THE PARENT COMPANY OF THE GROUP SOGEFI S.P.A.

For 2020 the parent company of the group Sogefi S.p.A. reported a net loss of € 6.2 million compared to net income of € 7.7 million in 2019. The decline was due mainly to the lower flow of dividends distributed by the subsidiaries and to higher financial expense.

OUTLOOK FOR THE YEAR

Given the continuing uncertainty regarding the evolution of the pandemic, there is very little clarity as to how the market will perform in coming months.

There is also uncertainty about the trend of commodity prices (particularly those of steel) and their availability (semiconductors), as well as logistical difficulties involving transport and sourcing from Asian markets.

For the year 2021, IHS is forecasting a recovery in world production of 13.7% compared to 2020, but this will still be lower than in 2019 (-4.8%).

In this scenario, thanks to the effects of the drastic action taken in 2020 to reduce the impact of fixed costs and to bring about a structural improvement of its profitability, Sogefi expects to return to profit for the full year 2021.

TERMINATION OF THE EMPLOYMENT RELATIONSHIP WITH MR. FENZI

No amount has been paid in relation to the resignation of Mr. Fenzi from the position of Chief Executive Office and no payment is provided in relation to the termination of the employment relationship, in addition to the mandatory payments required by law. Based on the information available, Mr. Fenzi does not own shares in Sogefi.

PROPOSED DIVIDEND

The Board of Directors will put forward the proposal to the Annual General Meeting of the Shareholders that no dividends be distributed.

ANNUAL GENERAL MEETING

The Annual General Meeting of the Shareholders of Sogefi will be held at the first call on April 23 2021 and at the second call on April 26 2021.

The Board of Directors has voted to put the following proposals before the Annual General Meeting of the Shareholders:

  • In the light of the current legislative and regulatory rules, Consob Resolution no. 20876 of April 3 2019, Consob Guidelines of July 2019 and Consob Resolution no. 21318 of April 7 2020, the cancellation and renewal of the authorization of the same Board of Directors, for a period of 18 months, to buy back a maximum of 10 million own shares (including 2,102,588 shares, equal to 1.75% of the share capital) at a unit price that cannot be more than 10% higher or lower than the benchmark price recorded by the shares on regulated markets on the trading day preceding each single buyback transaction or the date on which the price is fixed. In any case, when the shares are bought back in the regulated market, the price must not be higher than the higher of the price of the last independent transaction and the highest current independent bid price on the same market, in compliance with what is set out in EU Delegated Regulation no. 2016/1052.
    The main reasons why this authorization is being renewed are: to fulfil the obligations resulting from possible stock option plans or other awards of shares of the Company to employees or members of the Board of Directors of Sogefi or its affiliated companies; to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; to support market liquidity of the shares; to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; for any other purpose qualified by the competent Authorities as admitted market practice in accordance with applicable European or domestic rules, and with the procedures established therein.
  • The approval of a Stock Grant Plan for 2021 aimed at employees of the Company and its subsidiaries, in the terms to be defined by the Board of Directors and notified to the market in sufficient time for any legal obligations to be carried out. The Stock Grant Plan has the aim of rewarding the loyalty of the beneficiaries to the companies of the Group, giving them an incentive to increase their commitment to improving the performance of their Company.

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CIR: calendar of events for 2021

Milan, January 29 2021 – CIR S.p.A. announces that the Company’s calendar of events for 2021 will be as follows:

Friday 12.03.2021 10.00 a.m. Board of Directors Meeting (Pro-forma Financial Report for 2020)  
Friday 30.04.2021 11.00 a.m Annual General Meeting of the Shareholders (Approval of Financial Report for 2020)  
Friday 30.07.2021 10.00 a.m. Board of Directors Meeting (Half-year Financial Report for 2021)

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KOS completes the sale of its subsidiary Medipass to the DWS fund

Milan, November 27 2020 – In completion of what was announced on September 7 2020, KOS completed today the sale of 100% of the shares of Medipass S.r.l. (buying back the operating companies in India) to Inframedica S.p.a., a company indirectly and wholly owned by DWS Alternatives Global Limited, the investment manager delegated to manage the Pan-European Infrastructure III, SCSp fund.

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CIR files Interim Financial Report

Milan, November 11 2020 – CIR S.p.A. announces that the Interim Financial Report as of September 30 2020, approved by the Board of Directors on October 30, is available to the public on the authorized storage mechanism eMarket STORAGE (www.emarketstorage.com), at the registered office of the Company and on its website (www.cirgroup.com).

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CIR: results for first nine months of 2020

  • Third quarter 2020 results improved, with consolidated revenues up slightly from 3Q 2019, EBITDA and EBIT showing progress and a net result (€ 10.0 million) higher than that of 3Q 2019
  • Results for first nine months of 2020 were negatively affected by the performance of the first half which was badly hit by the economic consequences of the Covid-19 pandemic. Revenues at € 1,329.4 million (€ 1,528.0 million in first nine months of 2019). EBITDA at € 174.2 million (€ 201.8 million in the first nine months of 2019). EBIT positive at € 12.9 million (€ 66.0 million in the first nine months of 2019). Net result: -€ 20.2 million
  • Net financial position of the parent company positive for € 384.0 million, higher than at December 31 2019 (€ 295.7 million)

Milan, October 30 2020 – The Board of Directors of CIR S.p.A., which met today under the chairmanship of Rodolfo De Benedetti, has approved the Financial Report as of September 30 2020 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

The third quarter of this year saw a recovery in all businesses, with consolidated revenues up by 0.7% on the revenues of the same period of 2019, EBITDA and EBIT showing progress and a net result of € 10.0 million, which was higher than in third quarter 2019.

In the social and healthcare sector, KOS reported a recovery in rehabilitation services after hospital activities resumed in a quarter with less stress on the health service in relation to the emergency caused by the Covid-19 pandemic.

In automotive components, Sogefi, thanks to its better performance than the market in terms of sales and to its cost cutting actions, closed the quarter with a positive result. As regards the financial assets of the CIR holding company and its non-industrial subsidiaries, which were in line with their respective markets, there was a recovery in stock prices and this compensated for the losses seen in the first six months of the year.

The results of the first nine months of 2020 were still affected very negatively by the first half of the year, in which all business activities suffered the effects of the circumstances that arose because of the pandemic and the particularly restrictive measures adopted.

Consolidated revenues came in at € 1,329.4 million and were down by 13% on 2019.

The consolidated gross operating margin (EBITDA) came to € 174.2 million and was 13.7% lower than the figure for the first nine months of 2019 (€ 201.8 million).

The consolidated operating result (EBIT) was € 12.9 million, down from € 66.0 million in the corresponding period of 2019, reflecting the lower EBITDA and the higher amortization after the consolidation of KOS’s business in Germany, which was acquired at the end of 2019.

The net result was a loss of € 20.2 million compared to a net income figure of € 5.4 million in the same period of 2019. Compared to the first half of the year, the loss was significantly less.

KOS’s business activity was affected by the public health emergency in all sectors, with a significant impact on its economic performance. In the Italian nursing homes, the focus was on the difficult management of the public health emergency and new entries were frozen for several months. During the third quarter new patients started to be accepted again and the number of guests stabilized albeit at a significantly lower occupancy rate than in 2019. In the German nursing homes the impact of the pandemic on healthcare was considerably less and therefore the reduction in the number of guests was more limited than in Italy. In the rehabilitation units the number of patients declined following the slowdown in normal hospital activity, when the health service was in a state of stress, and outpatient activities were suspended or much reduced as were diagnostic activities. However in the third quarter there was a strong recovery with an increase in services provided compared to the same period of 2019.

Revenues totalled € 468.8 million and were up by 23.7% on the same period of 2019 (but fell by 10.5% on a like-for-like basis, excluding Charleston, the group operating in Germany in the care home sector, which was acquired in October 2019). EBIT amounted to € 26.8 million down from € 44.2 million in 2019 due to the decline in the number of guests and patients in Italy because of the Covid-19 emergency and the higher costs incurred for protective equipment to counter and limit the effects of the pandemic. The net result was a positive € 4.9 million versus net income of € 23.5 million in 2019.

In September KOS signed a binding agreement with DWS Alternatives Global Limited for the sale of Medipass, excluding the businesses in India, of which KOS will retain ownership. The enterprise value agreed upon is € 169.2 million and the equity value is estimated at around € 103.0 million (net of the disbursement incurred by KOS for the acquisition of the businesses in India), plus a possible earn-out of € 2.5 million. Completion of the deal is subject to the issue of the necessary authorizations by the competent authorities and to certain waivers by third parties, which as things stand are almost completely satisfied. The deal is expected to complete by the end of November 2020 and will generate a capital gain for KOS of over € 50 million that will be recognized only at the moment of completion.  The sale of Medipass is part of KOS’s strategy of focusing on its core business (long-term care) in Italy and Germany.

Moving on to Sogefi, in the third quarter the automotive sector reported a definite recovery in world car production, with a decline in volumes of 3.5% compared to the same period of 2019, after the unprecedented dramatic fall experienced uffered in the first half of the year (-33.2%) due to the effects of the spread of the Covid-19 pandemic.

In this context, Sogefi reported a positive third quarter,  with revenues down by 8.1% and net income of € 5.6 million (compared to € 1.4 million in third quarter 2019), thanks to the measures put in place to counter the crisis, which enabled Sogefi to increase its contribution margin to 31% from 30.3% in 2019 and 29.5% in the second quarter, and to reduced its fixed costs by 20%, with a ratio to sales down from 17% in third quarter 2019 to 15% in 2020.

The first nine months of 2020 remain strongly affected by the first half of the year: revenues came in at € 860.6 million, down by 25.1% compared to 2019, EBITDA came to € 94.7 million versus € 130.7 million in 2019, and the period closed with a loss of € 23.2 million (net income of € 8.3 million in 2019).

In spite of the situation of the first nine months, since the beginning of the year Sogefi has acquired new contracts for a total that is estimated as being in line with previous years and with the objectives of maintaining/increasing its market share.  

Regarding the financial investments of the holding company and the subsidiaries devoted to financial management, in the third quarter of 2020 asset values recovered, bringing the overall return for the nine months to breakeven, after the loss reported in the first half. Bonds and hedge funds (which account for some 85% of the portfolio) had an overall return of +1.8% while private equity and financial equity investments reported a reduction in their total fair value of 8%. 

Consolidated net debt before IFRS 16 totalled € 264.0 million at September 30 2020, which was lower than at December 31 2019 (€ 327.6 million) and at June 30 2020 (€ 285.7 million). Financial payables for rights of use as per IFRS 16 came to a total of € 808.9 million at September 30 2020 and thus the total consolidated net debt was € 1,072.9 million. The payables as per IFRS 16 mainly refer to the subsidiary KOS (€ 733.5 million), which operates mainly in leased premises.

The net financial position of the parent company (including the non-industrial subsidiaries) was a positive € 384.0 million at September 30 2020, higher than at December 31 2019  (€ 295.7 million), thanks to the net cash inflow from the sale of the shareholding in GEDI Gruppo Editoriale to EXOR (with an amount of € 102.4 million received for the entire holding and the reinvestment of € 11.7 million for 5% of the same GEDI). The equity of the Group stood at € 736.9 million at September 30 2020, down from € 770.7 million at December 31 2019. The decline was due to the loss for the period and to negative exchange rate differences resulting from the translation of the financial statements of foreign subsidiaries.

Outlook for the year

Visibility for the coming months remains limited because of the uncertainty about the effects of the evolution of the pandemic on the businesses of the group. Indeed, Europe is experiencing the second phase of the spread of the Covid-19 pandemic, with recent figures showing levels higher than during the lockdown earlier in the year. In North and South America the evolution of the pandemic remains extremely concerning. We cannot therefore rule out, as has recently been confirmed in certain countries, the possibility of the authorities issuing new restrictions on private-sector production and business activities, which would impact the activities of the group.  

As far as KOS is concerned, it is expected that rehabilitation activity could consolidate the recovery seen in the third quarter, provided that there is no new freeze on regular hospital activity, while for care homes in Italy in the short term it is likely that the number of guests will remain below historical averages. At the same time care homes will continue to incur additional costs to counter the emergency. The care-home sector in Germany, which has been less affected by the pandemic in terms of level of activity and which is in any case supported financially by the public health service, should report results in line with expectations, advancing its plan for improving operations and increasing income. In this difficult environment it is expected that EBIT for the whole year will not be lower than the figure reported for the first nine months of the year.

Sogefi has factored into its forecasts for the fourth quarter the assumption that the market will be around -10%, in which it expects to be able to achieve a significantly positive EBIT for the whole year, excluding restructuring charges.    Based on the considerations regarding the group’s investees, provided there is no shutdown of business or any other extraordinary event that cannot at present be predicted, the forecast is for a positive consolidated EBIT result and a significantly positive net income figure thanks to extraordinary transactions (particularly the sale of Medipass).

Appointment of CIR’s new Financial Reporting Officer

The Board of Directors has resolved, after receiving the favourable opinion of the Board of Statutory Auditors, to appoint Michele Cavigioli as the Officer responsible for the preparation of the company’s financial and corporate statements as per the terms of Art. 154-bis of the TUF and in compliance with Art. 21 of the Company Bylaws. The appointment will take effect as from January 1 2021. Michele Cavigioli, 51, has been in CIR since 2005, has held the position of Central Finance Director since 2010 and is also responsible for relations with financial analysts and institutional investors. He is also CEO of CIR Investimenti and sits on the Board of Directors of KOS. He worked previously for McKinsey & Company, Deutsche Bank and Magnemag AG. Michele Cavigioli will take the place of the current financial reporting officer Giuseppe Gianoglio, 62, who will be leaving the group in January 2021, having chosen to retire. The Board of Directors thanks Giuseppe Gianoglio for his important contribution to the group over the past 16 years.

It should be noted that Giuseppe Gianoglio holds 488,013 CIR shares and rights resulting from Stock Grant Plans for a total of 1,359,648 Units. Michele Cavigioli holds 24,248 CIR shares and rights resulting from Stock Grant Plans for a total of 1,422,461 Units.

Resolution on periodic financial reporting

The Board of Directors has decided that as from financial year 2021 it will no longer publish interim financial reports as of March 31 and September 30, exercising the right granted by D.Lgs 25/2016 for the same reasons that inspired the Transparency II 2013/50 directive of the European Union transposed into Italian law by the above decree.  

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Sogefi: results for first nine months of 2020

THIRD QUARTER 2020 SHOWS PROFIT

Higher revenues, greater margin and lower fixed costs

RESULTS FOR FIRST NINE MONTHS NEGATIVELY IMPACTED BY FIRST HALF

Revenues at € 860.6 million, -21.9% at constant exchange rates (car market -23.2%)

EBITDA margin in line with 2019: € 94.7million, 11% of revenues

 (11.4% in first nine months of 2019)

EBIT: -€ 3.2 million as effect of lower volumes

EBIT for the whole year 2020 expected to be positive (excluding restructuring costs)

Milan, October 23 2020 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the Interim Financial Report of the group as of September 30 2020. Sogefi, a company of the CIR group, is one of the main producers worldwide of components for motor vehicles in three sectors: Air and Cooling, Filtration and Suspensions.

After the first half of 2020 in which world car production suffered an unprecedented decline (-33.2%) due to the effects of the spread of the Covid-19 pandemic, in the third quarter the market reported a strong recovery compared to the previous quarter (+60.7%), with volumes just 3.5% below those of the same period of 2019 (after a second quarter at -42.9%). The recovery affected all markets: China, where production was greater than that of the third quarter of the previous year (+10.7%), NAFTA with volumes equivalent to those of third quarter 2019 (+0.5%), the EU with volumes gradually rising, although lower in the third quarter than in 2019 (-10.7%). In South America the situation was still decidedly critical (-20.9%).

Despite the recovery in the third quarter, the first nine months of 2020 as a whole again posted very significant declines: -23.2% for world car production compared to the first nine months of 2019, -31.3% in the EU, -26.5% in North America, -8.9 % in China and -40.4% in South America. 

During the first half of the year the Group’s priority was the safety of its workforce. From the moment when news of the Covid-19 phenomenon in China was received, action was taken immediately to reduce the risk of contagion. In the second quarter almost all activity in the factories and other workplaces was suspended in compliance with the instructions issued by the various local authorities or at the decision of the company, which had recourse everywhere to working from home whenever possible. All measures recommended for health and safety in the workplace were adopted and production processes were reviewed in all geographical areas with the formulation and implementation of new safety protocols including social distancing and the use of systems for individual protection. In the current phase, the new wave of contagion is leading to the adoption of further restrictive measures to limit the number of people present in the workplace with the adoption of flexible working.

At the same time, incisive measures were put in place to mitigate the impact of the crisis and the consequent contraction in sales and these made it possible to achieve a positive result in the third quarter. In particular, this result was due to the following:

  • The increase in the contribution margin to 31%, up from 30.3% in the third quarter of 2019 and 29.5% in the second quarter;
  • The 20.2% reduction in fixed costs with their ratio to revenues falling from 17% in third quarter 2019 to 14.8% in 2020.

Despite the situation of the first nine months, since the beginning of the year Sogefi has obtained new contracts for a total amount estimated to be in line with previous years and with the objectives of maintaining/growing its market share.

More specifically, Air and Cooling obtained an important contract (€ 100 million) to supply air intake manifolds in aluminium to a prime German OEM. This material to all extents and purposes introduces a new product line in a date 25% of the value of orders received in the first nine months of the year were for components for cooling hybrid or full-electric vehicles, which forms a basis for the division to achieve an excellent positioning in the markets in future.  

The Suspensions division received an order from a prime North American producer of full-electric vehicles and thus, at global level, orders for hybrid and full-electric applications reached 35% of the total orders for the 9-month period. This growth was obtained partly thanks to the new product developed specifically to meet the demand for lightweight parts and rapid time-to-market for electric vehicles. The division has in fact engineered a conical progressive rate spring suspension for this type of application.

KEY RESULTS FOR THE THIRD QUARTER OF 2020

Third quarter revenues showed a significant recovery compared to the previous period and were more or less in line with the third quarter of 2019 at constant exchange rates (-8.1% at current exchange rates).

The results were positive thanks to the recovery of revenues and to the measures adopted, which led to a slight increase in the contribution margin and a significant reduction of fixed costs. 

EBITDA was 14% compared to 12% in the same period of 2019.

EBIT was positive for € 15.6 million, which was higher than the figure for 2019 of € 13.1 million; the ratio of EBIT to sales rose from 3.5% to 4.6%.

In the period the Group reported net income of € 5.6 million versus € 1.4 million in 2019.

Free Cash Flow before IFRS 16 was positive for € 28.0 million versus € 2.8 million in 2019.

KEY RESULTS FOR THE FIRST NINE MONTHS OF 2020

REVENUES

In the first nine months of 2020, Sogefi’s revenues came in at € 860.6 million, posting a decline compared with the same period of 2019 of 25.1% at historical exchange rates and of 21.9% at constant exchange rates.

Looking back at the trend of revenues during the year, after the first two months of the year when sales were in line with 2019, in March the first effects of the pandemic were recorded (-29.5% on 2019), which then became seriously worse in the months of April (-79.5%) and May (-64.5%); in June the recovery began (with a more limited fall in revenues compared to 2019, -24.9 %), continuing then in July (-18%), August (-7.5%) and September, when revenues showed slight growth compared to 2019 (+0.8%). 

The performance of revenues at constant exchange rates in the first nine months was better than  the market in all the main geographical areas: -24.6% in Europe versus the market’s -31.3%, -17.9% in NAFTA versus -26.5%, +12.6% in China versus -8.9%.

By business sector, Filtration (with a fall in revenues of 16.2% at constant exchange rates) and Air and Cooling (-17.8% at constant exchange rates) reported a distinctly less unfavourable performance than the market thanks, for Filtration, to the greater resilience of the OES and Aftermarket channels and, for Air and Cooling, to the development of the contract portfolio particularly in North America. The impact of the crisis was greater for Suspensions, where revenues fell by 30.6% at constant exchange rates, reflecting the greater concentration of the business in Europe and South America and the particularly unfavourable performance of the sector in these areas.

OPERATING RESULT AND NET RESULT

In the nine month period the fall in revenues had significant effects on the economic results of the group, despite the positive impact of the mitigation measures adopted.

EBITDA for the first nine months came in at € 94.7 million, down from € 130.7 million in the same period of 2019; it should be noted that profitability (EBITDA / Revenues %) came to 11%, which was substantially in line with the same period of 2019 (11.4%).

The contribution margin of the first nine months of the year was slightly better than that of 2019, rising from 29.7% to 30.3%; the impact of the cost of raw materials was lower thanks partly to market phenomena and partly to the plans put in place as from last year to optimize the purchase prices of steel for the production of suspension systems and this offset the impact of the inevitable production inefficiencies caused by the shutdown and subsequent return to production and the low volumes. The ratio of fixed costs to sales in the first nine months was substantially unchanged from the same period of 2019, thanks to the reductions obtained, part of which were temporary while part were destined to become structural.

EBIT was a negative € 3.2 million, which compared to a positive result of € 37.4 million in the first nine months of 2019. The lower EBIT reflects the fall in revenues and the non-recurring charges incurred as a result of the situation: restructuring charges of € 14.2 million (€ 5.7 million in the first nine months of 2019) and the write-down of fixed assets for € 8.2 million (€ 2.2 million in the same period of the previous year).

The group’s net result was a loss of € 23.2 million compared to net income of € 8.3 million in 2019, after financial expense that was substantially in line with that of the previous year and tax expense of € 2.8 million versus € 12.6 million last year. 

DEBT AND EQUITY

Regarding Free Cash Flow, in the first nine months of 2020, before IFRS 16, absorption of € 42.8 million was reported (versus -€ 0.5 million in the first nine months of 2019), most of which was due to the evolution of working capital caused by the particular circumstances that arose during the year. As is generally the case in the sector, amounts due from customers are received more promptly compared to the payment terms of suppliers, thanks partly to the use of factoring. The decline in sales resulted in lower cash receipts, while payments to suppliers continued to be made. This imbalance is gradually being re-absorbed as business recovers. Free Cash Flow including IFRS 16 payables amounted to -€ 55.6 million compared to -€ 4.3 million in the first nine months of 2019.

Net debt before IFRS 16 stood at € 299.0 million at September 30 2020, higher than at the end of 2019 (€ 256.2 million), but significantly lower than the figure at June 30 2020 (when the net debt amounted to € 327 million).

Including the financial payables for rights of use, as per IFRS 16, net debt at September 30 2020 totalled € 374.5 million, up from € 318.9 million at December 31 2019 and € 330.0 million at September 30 2019. It should be noted that in 2020 the group has been developing a new site for the production of suspensions in Romania, which will increase the group’s competitiveness in the sector. In the third quarter the signing of the lease contract for the new facility led to the recognition of an IFRS 16 payable of approximately € 19.0 million.

As is known, as of June 30 the covenants of the loan agreements in force were being complied with and to the best of our knowledge at present and based on our forecasts, no breaches of contract are expected to emerge by December 31 2020.

At September 30 2020 the group had committed credit lines € 220.0 million in excess of its requirements.

At September 30 2020 shareholders’ equity, excluding minority interests, amounted to € 146.6 million (€ 188.7 million at December 31 2019).

THE IMPACT OF COVID-19 ON THE BUSINESS

Following the spread of the Covid-19 pandemic, Sogefi first suspended production in China and then in the second half of March production at almost all of its sites. Business started to resume everywhere, first in China and then from May onwards in all the other countries in which the group operates, albeit with production volumes that were until August significantly lower than those of the previous year and those forecast.

As for the evaluation of the impact that the pandemic is having on the group, the pre Covid-19 forecasts had envisaged that sales revenues for 2020 would be substantially in line with 2019 and in the first two months of the year the Company did in fact report volumes equivalent to or higher than those expected. However, during subsequent months there was an extremely significant decline with a recovery only from June onwards. Consequently Sogefi reported revenues of € 860.6 million, down by 25.1% compared to the same period of last year. This reduction was almost entirely attributable to the effects of the circumstances generated by the pandemic. The contraction in volumes, even though partly offset by the reduction in fixed costs, nonetheless had a negative impact that can be estimated at € 42.0 million on EBIT and of € 27.0 million on the net result. It also led to a significant rise in debt.  

The Company has been taking action to reduce the impact of the crisis since March but in addition to this it is now working to adapt itself structurally to the changed market circumstances and to rapidly regain economic and financial stability, albeit in a context of lower volumes which are today forecast even for the fourth quarter of 2020 and for 2021.  

SIGNIFICANT EVENTS THAT HAVE TAKEN PLACE SINCE SEPTEMBER 30 3020

In October the group obtained new medium-term loan agreements for a total amount of € 134.5 million granted by prime Italian and French banks.

OUTLOOK FOR THE YEAR

Visibility as to the evolution of the market in the coming months remains limited despite the improvement in volumes seen in the third quarter.

With regard to the pandemic, in Europe the risk of a second wave of Covid-19 appears to be materializing with recent figures showing that it is spreading at higher levels than during the lockdown phase. In North and South America the evolution of the pandemic remains most concerning and it is difficult, therefore, to predict what measures will be taken by the authorities. The adoption in coming months of new measures limiting production and private business cannot be ruled out. It is also extremely uncertain as to what impact the current circumstances will have on demand in the automotive sector.

After a third quarter 2020 that was better than expected, for the fourth quarter of 2020 IHS expects that world production could come in at -2.7% compared to the fourth quarter of 2019. The year 2020 could therefore close with a market downturn of 17.9% on the whole year.

In this uncertain scenario Sogefi has factored into its projections for the fourth quarter the assumption that the market will be around -10%, in which it expects that it will be able to achieve a positive EBIT for the whole year, excluding restructuring charges.  

STOCK GRANT PLAN

On the strength of the authorization given to it by the Annual General Meeting of the Shareholders on April 20 2020, the Board of Directors implemented Stock Grant Plan 2020 by assigning 790,000 rights.

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KOS signs an agreement for the sale of its subsidiary Medipass (excluding the Indian business) to the DWS fund for an enterprise value of € 169 million and a net consideration estimated at approximately € 103 million

Milan, September 7 2020KOS and Inframedica S.àr.l., a company directly and wholly controlled by DWS Alternatives Global Limited, the investment manager delegated to manage the Pan European Infrastructure III Fund, SCSp (“DWS”) have signed a binding agreement for the transfer from KOS to DWS of 100% of the shares of Medipass S.r.l. (“Medipass”). Before the sale is completed, KOS will buy back from Medipass the Indian subsidiaries (Clearmedi Healthcare Private LTD, Clearview Healthcare Private LTD).

The enterprise value agreed upon is € 169.2 million and the equity value can be estimated at approximately € 103 million, net of the price that KOS will pay for the acquisition of the businesses in India. The total amount that will be paid on completion by DWS to KOS will be subject to adjustments linked to the actual financial position of Medipass as of September 30.

Completion of the deal is subject to the issue by the competent authorities of the necessary authorizations and to certain third party waivers, including those related to KOS’ loan agreements. Because of the time required for the authorization processes, the deal is expected to complete by the end of 2020.

The transaction will generate a net capital gain for KOS of approximately € 50 million and will reduce its debt by around € 160 million, compared to total debt (before IFRS 16) of € 356.2 million at June 30 2020.

Medipass is a leading provider of Cancer Care and Advanced Diagnostic Imaging services in Italy and the UK. Acquired by KOS in 2006, Medipass has become one of the key players in providing private and public healthcare facilities with turnkey solutions for the management of diagnostics and cancer care departments, managing standard technologies (e.g. CT, RX, ultrasound imaging), advanced technologies such as Nuclear Medicine (PET-CT) for diagnostics activities, and Radiotherapy departments for cancer care. Medipass serves over 20 healthcare facilities (hospitals and clinics) in Italy and the UK and it is uniquely positioned to meet the growing demand in the sector for investments to renew and expand the existing stock of equipment providing life-saving services.

The agreement reached for the sale shows that Medipass has created significant value since it was acquired by KOS.

The deal will enable KOS to significantly increase the allocation of resources to the growth of its core businesses (managing care homes, hospitals and rehabilitation facilities both in Italy and abroad, particularly in Germany, where it already has a significant presence).

Lastly, regarding the activities in India, where today Medipass is one of the leading providers of technological services for healthcare, with revenues of € 20.7 million in 2019, KOS will evaluate available options to realise its value. 

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DWS Infrastructure is a leading infrastructure investor and it is part of DWS Group & GmbH Co KGaA, an independent listed asset manager (ETR: DWS), with a presence in c. 40 countries and approximately EUR 745 billion of assets under management (as of June 2020). DWS Infrastructure is one of the largest European infrastructure investors and has approximately EUR 20.8 billion of assets under management as of December 2019. DWS Infrastructure seeks to create and add value to its funds’ investments through active asset management as well as through its network, experience and funding to achieve the company’s growth potential.

Hamish Mackenzie, Global Head of Infrastructure at DWS said:

“We are delighted to invest in Medipass and to partner with its impressive management team in this next phase of its journey. Medipass has been one of the pioneers in the Cancer Care sector, offering outsourcing services in diagnostics and cancer care since the 1990s, with a consistent track record of providing patients with the highest quality of care using cutting edge technology.

Medipass represents our third investment in Italy and the second investment for our fund, PEIF III, which is supported by a large component of Italian pension funds and insurance companies, and invests in infrastructure companies providing essential services across Europe.

KOS has done an excellent job in growing the company over the past years. Together with the management team, we will look to leverage Medipass’ expertise, our resources and our experience as infrastructure investors, to further expand the Company’s presence in healthcare centers across Europe to enable them to enhance their technology parks and services for the benefit of their patients.”

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KOS is a leading Italian healthcare group operating in long term care, including nursing homes, rehabilitation and psychiatry, as well as acute care. In these sectors of activity the KOS Group manages 90 facilities in Italy, with almost 8,700 beds, and 47 in Germany, with some 4,000 beds. It has just under 13,700 collaborators, of whom around 8,900 are in Italy (7,400 employees) and some 3,800 are in Germany. KOS’s revenues for 2019 totalled € 595 million, of which approximately 10% came from the Medipass companies being sold to DWS. KOS is owned for 59.5% by CIR and for 40.5% by F2i Healthcare, which in its turn is controlled by F2i, the largest infrastructure fund in Italy with more than 5 billion assets under management.

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CIR: results for first half 2020

Revenues 856.7 million (€ 1.059,1 million in first half 2019)

EBITDA: € 103.8 million (€ 140.0 million in first half 2019)

EBIT: -€ 8.3 million (€ 46.0 million in first half 2019)

Net result: -€ 30.4 million

Net financial position of the parent company at € 397.1 million, higher than at December 31 2019 (€ 295.7 million)

Milan, July 31 2020 – The Board of Directors of CIR S.p.A., which met today under the chairmanship of Rodolfo De Benedetti, has approved the Semi-Annual Financial Report as of June 30 2020 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

CIR’s results for the first half of 2020 were affected significantly by the strong impact that the spread of the Covid-19 pandemic has had on all the businesses of the group, i.e. social and healthcare services (KOS), the production of components for the automotive sector (Sogefi), and the management of the financial investments of the CIR holding company and its non-industrial subsidiaries.

KOS’s business was affected by the public health emergency in all sectors, with a significant impact on economic performance: in the care homes, activity was concentrated on the complex management of the public health emergency with new admissions on hold; the rehabilitation facilities reported a decline in the number of patients following the slowdown of normal activity with the health system under stress and activity focused on the emergency; outpatient services were suspended or severely limited as was diagnostic activity; meanwhile the company focused on putting in place the necessary measures for protection of staff and patients.

Sogefi’s business was seriously affected, as indeed was the case for all of the automotive sector, by the effects of the pandemic; production was suspended first in China and then, in the second half of March, in almost all of its plants. Currently, production in China has returned to monthly levels in line with the forecasts made before the crisis; in the remaining geographical areas, production resumed gradually as from May after the main customers returned to production, but volumes were still significantly lower than those pre- Covid. The situation remains particularly critical in Mercosur and India.

In the first half of 2020, the consolidated revenues of the CIR group came in at € 856.7 million and were down by 19.1% on 2019. After the first two months which saw growth of 9.7% on the corresponding period of 2019, the public health emergency caused an immediate and drastic contraction of revenues due mainly to the suspension of Sogefi’s production activity.

The consolidated gross operating margin (EBITDA) came to € 103.8 million and was down by 25.8% from the figure for the first half of 2019 (€ 140.0 million), following the trend of revenues; the consolidated operating result (EBIT) was a negative € 8.3 million versus a positive result of € 46.0 million in the first half of 2019.

The net result was a loss of € 30.4 million after earnings of € 1.6 million in the first half of 2019.

The consolidated net financial debt before IFRS 16 amounted to € 285.7 million at June 30 2020 and was down by € 42.0 million compared to the figure at December 31 2019 (€ 327.6 million). The financial payables for rights of use according to IFRS 16 totalled € 787.8 million at June 30 2020 and thus the total consolidated debt stood at € 1,073.5 million. The payables as per IFRS 16 refer mainly to the subsidiary KOS (€ 731.8 million), which operates mostly in leased premises.

The net financial position of the Parent Company (including the non-industrial subsidiaries) was a positive € 397.1 million at June 30 2020, higher than at December 31 2019 (€ 295.7 million), following the cash inflow from the sale of CIR’s entire interest in GEDI Gruppo Editoriale S.p.A. to EXOR (€ 102.4 million), completed on April 23 2020.

The equity of the Group stood at € 728.5 million at June 30 2020 versus € 770.7 million at December 31 2019 and the decline mainly reflects the loss for the period.

As regards KOS, its revenues came in at € 337.2 million, with a rise of 19.9% on the same period of 2019 thanks to the significant contribution of Charleston (the group acquired in October 2019, which operates in Germany in the care-home sector): on a like-for-like basis revenues fell by 10.6%.

EBIT was € 18.1 million, down from € 31.6 million in 2019, due not only to the decline in the number of guests and patients in Italy because of the Covid-19 emergency, as illustrated above, but also to the higher costs incurred for protection measures to counter and limit the effects of the pandemic. The first half closed with a loss of € 2.1 million compared to earnings of € 14.4 million in the first half of 2019.

Cash flow was positive for € 11.8 million and the net financial debt before IFRS 16 declined from € 368.0 million at December 31 2019 to € 356.2 million at June 30 2020.

As for Sogefi, automotive production worldwide fell by 33% in the first half of 2020 compared to the first half of 2019, with Europe and NAFTA, Sogefi’s main areas of activity, reporting -40%. In this scenario Sogefi’s revenues came in at € 519.5 million, posting a decline of 33.2% on 2019. In the main geographical areas the group reported a distinctly better performance than the market and, thanks to the cost cutting action taken, profitability (EBITDA/revenues %) declined by just two percentage points, from 11% to 9%. Despite this, EBIT came to -€ 18.8 million, after non-recurring charges of
approximately € 18.0 million, compared to +€ 24.4 million in the first half of 2019. The first half closed with a loss of € 28.8 million, which compares with net income for the first half of 2019 of € 6.9 million.

Net financial debt at June 30 2020 before IFRS 16 rose to € 327.0 million from € 256.2 million at the end of 2019, and the increase was due mainly to the rise in working capital caused by the drastic reduction in sales, which had an immediate effect on cash inflows; this increase should be reabsorbed gradually as business recovers.

Regarding the financial investments of the holding company and the subsidiaries devoted to financial management, given the turbulence and sell-offs in the financial markets, in the first half a loss of € 5.6 million was reported, which meant a negative return of -1.4%; the portfolio of bonds and hedge funds obtained an overall positive return of 0.7%, while losses of € 7.9 million were posted for fair value adjustments made to the investments in private equity and other equity investments.

Events that have occurred since June 30 2020

On July 13 2020, as was stipulated in the agreement of December 2 2019, CIR acquired a shareholding interest in the capital of Giano Holding S.p.A., which represents transparently 5% of the share capital of GEDI. The acquisition involved a disbursement of € 11.7 million, equivalent to a price of € 0.46 for each GEDI share.

Outlook for the year

The degree of uncertainty as to the evolution of the business and the results of the second half remains extremely high.

As far as KOS is concerned, towards the end of the first half there was an inversion of the trend with a recovery in rehabilitation activity, the acute sector and in diagnostics and oncology services; the care-home sector has stabilized but is not yet at the recovery stage. As things are at present, provided there is no second wave of contagion in the autumn, it is expected that the diagnostic areas, oncology treatments, psychiatrics and the acute sector could return to levels of pre-Covid activity during this year. For rehabilitation and the care-homes, the return to normal levels of activity is expected to take place in 2021. Moreover with reference to the care-home sector in Germany, it should be noted that the impact of Covid-19 was limited and the return to normality is expected to be by the end of this year.

In this scenario, it is therefore plausible that the reduction in revenues and results of the business reported in the first half will be less in the second half of the year.

As regards Sogefi, visibility as to the evolution of the market in the coming months remains limited both in terms of the uncertainty as to the evolution of the pandemic and of the difficulty in forecasting the impact of macro-economic circumstances caused by the same on demand in the automotive sector. For the second half of 2020, IHS Markit, a source commonly used by the sector, expects that, without a second outbreak of Covid-19 and resulting measures to restrict production and adverse effects of the latter on the market, world production could be at -10% compared to the second half of 2019, while market analyst forecasts tend to be more cautious, expecting a world market contraction in a range between -15% and -30%, the latter in the event of a second wave of Covid-19.

In this uncertain scenario, Sogefi has incorporated into its expectations for the second half of the year a world market scenario hypothesis of around -20%, against which it expects to achieve an EBIT, excluding restructuring costs, that is slightly positive, a significant reduction in the net loss compared to the first half and a slightly positive free cash flow.

Both companies, in the light of the totally exceptional circumstances that arose in the first half of the year, despite today having financial resources in excess of their current needs and not foreseeing any increase in their debt compared to the levels at the end of June 2020, given the uncertainty as to the evolution of the market and anticipating the natural expiry of their existing loans, have begun negotiations with their financial partners, with whom they have consolidated relationships, to ensure that they have sufficient funding available in the medium term.

In the light of the above, the CIR group expects the second half of the year to still be difficult but provided there is no second wave of Covid-19 it should be much better than the first half.

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Sogefi: results of first half 2020

Revenues: € 519.5 million, -31.2% at constant exchange rates (car market -33.2%)

Performance of revenues much better than that of the market in the main geographical areas in which the group is present

EBITDA: € 47.0 million, 9.1% of revenues (11.1% in first half 2019)

Fixed costs down by 27%

EBIT: -€ 18.8 million due to lower volumes and to non-recurring charges

EBIT and free cash flow expected to be positive in second half of 2020 provided there is no second lockdown

Milan, July 27 2020 – The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the Semi-Annual Financial Report of the group as of June 30 2020. Sogefi, a company of the CIR group, is one of the main global producers of automotive components in three sectors: Air and Cooling, Filtration and Suspensions.

KEY RESULTS FOR THE FIRST HALF OF THE YEAR

In the first half of 2020 the world car market suffered an unprecedented decline following the spread of the Covid-19 pandemic throughout the world and the resulting necessary restrictive measures adopted by local governments or applied independently by businesses with a view to protecting their workers and the population at large. These measures led to an almost total suspension of non-essential production activities and in particular of automotive production. This shutdown took place first of all in China and then in March and April in the remaining geographical areas. The current situation is that business has resumed everywhere, in China with volumes even greater than those of last year and in Europe and NAFTA with significantly reduced volumes. The most critical areas in terms of production are currently South America and India.

In the first half of the year world car production reported a decline of 33.2% compared to the same period of 2019: -41.7% in Europe, -39.9% in North America, -24.9% in Asia and -50.6% in South America. In June 2020 the market partly recovered (but with a shortfall vis-à-vis global volumes for 2019 reduced to -21.2%), driven mainly by the Chinese market (+14.1%); the performance of Europe and NAFTA also improved but still with very weak volumes (-31.2% and -24.3%, respectively). The situation in Mercosur still remains critical (-56%).

During the first half of the year the company’s top priority was the safety of its workforce. From the moment when news of the Covid-19 phenomenon in China was received, action was taken immediately to reduce the risk of contagion, starting with an increase in working from home. Subsequently all the health and safety precautions defined and required by the various local authorities or by the company were put in place in the factories and workplaces. In this context the company has revised its production procedures in all geographical areas to implement the safety protocols with regard to social distancing and the use of personal protection equipment.

Secondly, Sogefi has done all it can to mitigate the impact of the crisis and the resulting contraction in sales on results and on the company’s financial solidity; a plan was rapidly adopted to variabilize costs and limit cash consumption, and more specifically:

Lastly, the group has reformulated its medium-long term plan (2020-2024), with the aim of preserving profitability and cash generation despite the uncertain prospects regarding the recovery of the market. 

REVENUES

In the first half of 2020, Sogefi’s revenues came in at € 519.5 million and were down by 33.2% on the first half of 2019 at historical exchange rates and by 31.2% at constant exchange rates.

After the first two months of the year when revenues at constant exchange rates were up by 1%, as from March the effects of the Covid-19 pandemic were evident and became particularly serious in April (-79.5%) and May (-64.5%), while June saw a significant recovery with a considerably lower decline than in the same period of 2019 (-24.9%).

The performance of revenues at constant exchange rates was distinctly better than that of the market in the main geographical areas in which the group is present: -32.2% in Europe versus -41.7% for the market, -30.5% in North America versus -39.9% for the market, +4% in China versus -19.7% for the market. The overall decline in revenues was, however, in line with that reported by the world market because of the concentration of the group’s businesses in markets that have reported the greatest contractions (Europe and NAFTA), whereas it has a less significant presence in China, where the market decline was far more limited. 

Of the various business sectors, Filtration (where revenues declined by 25.7% at constant exchange rates) and Air and Cooling (-29.1% at constant exchange rates) reported a performance that was much less negative than that of the market thanks, for Filtration, to the fact that the OES and Aftermarket channels held up better and for Air and Cooling to the development of the portfolio of contracts particularly in North America. For Suspensions the crisis had a greater impact, with a fall in revenues of 38.2% at constant exchange rates, which reflects the greater concentration of business in Europe and Mercosur and the performance of the sector in these areas.

The dramatic reduction in volumes caused by the evolution of the market following the Covid-19 pandemic has had a very significant effect on the economic results of the group, despite the incisive mitigation measures adopted.

Indeed, EBITDA came to € 47.0 million versus € 86.4 million in the same period of 2019, mainly due to the collapse in volumes; profitability (EBITDA / Revenues %) was 9.1% and was only 2 percentage points lower than the figure for the same period of 2019 (11.1%), thanks to the cost variabilization measures put in place.

More specifically, the contribution margin improved slightly compared to the first half of 2019, from 29.4% to 29.8%, because of the favourable evolution of the relative cost of raw materials, which was due partly to market phenomena and partly to the plans implemented last year to reduce the relative impact of the purchase prices of steel needed for the production of suspension parts, which offset the impact of the inevitable production inefficiencies caused by the suspension and the resumption of production and by the low volumes.  

The relative impact of fixed costs rose by approximately 2 percentage points, an increase that was relatively limited considering the size of the collapse in revenues. This was thanks to the limitation measures adopted, some of which were temporary while others are destined to be become structural.

EBIT was a negative € 18.8 million versus a positive result of € 24.4 million in the first half of 2019. The reduction in EBIT reflects the reduction in EBITDA resulting from plummeting revenues but also includes the negative effect of the evolution of exchange rates for € 4 million (€ 1.8 million in the first half of 2019) reported by the group’s businesses in North and South America, restructuring charges for a total of € 7.3 million (€ 4.3 million in the first half of 2019) and the write-down of assets for € 6.4 million (€ 1.9 million in the previous year).

In terms of net result, the group reported a loss of € 28.8 million compared to earnings of € 6.9 million in the first half of 2019, after financial expense substantially in line with that of the previous year and tax gains of € 1 million versus tax charges of € 8.3 million in the previous year.

DEBT AND EQUITY

Regarding Free Cash Flow, in the first half of 2020 € 64.0 million were consumed compared to € 8.8 million in the first half of 2019. The reduction in business activity and thus in EBITDA led to a contraction of operating cash flow that was only partly offset by the lower outflow for investments. It should also be noted that around 80% of the amount consumed was due to the increase in working capital caused by the particular circumstances that occurred in the second quarter of the year. Indeed, as is generally the case in the sector, customer receivables are received more quickly than the timing of payment to suppliers, partly because of factoring. As sales plummeted in the second quarter, sums received from customers were lower, while disbursements to suppliers continued. This imbalance should gradually be absorbed as business recovers.

Net debt at June 30 2020 before IFRS 16 rose to € 327.0 million from € 256.2 million at the end of 2019 and € 267.3 million at the end of June 2019. Including the financial payables for rights of use, in accordance with IFRS 16, net financial debt stood at € 382.9 million at June 30 2020 compared to € 318.9 million at December 31 2019.

At June 30 2020 the group had committed credit facilities of € 194.2 million in excess of its debt and the covenants contained in the loan agreements were all being complied with.

At June 30 2020 shareholders’ equity, excluding minority interests, amounted to € 144.9 million (€ 188.7 million at December 31 2019).

RESULTS OF THE PARENT COMPANY SOGEFI S.P.A.

In the first half of 2020 the parent company Sogefi S.p.A. reported a net loss of € 5.8 million compared to net income of € 32.7 million in the same period of last year. In a particularly uncertain scenario in all of the countries in which the group operates, the distribution of dividends by the subsidiaries to Sogefi S.p.A. has been suspended.

IMPACT OF COVID-19 ON BUSINESS

Following the spread of the Covid-19 pandemic, Sogefi first suspended production in China and then in the second half of March suspended production in almost all of its facilities. At the present time, production in China has returned to monthly levels in line with the Company’s estimates made before the crisis. In the other factories production has gradually resumed since May, after their main customers started up again. However volumes are still significantly lower than forecast at the start of the year.

As regards the impact of the pandemic on the group, the pre Covid-19 forecasts had envisaged a performance of revenues in 2020 substantially in line with 2019. In the first two months of the year the Company achieved volumes higher than expected, followed by an extremely significant fall with a gradual recovery in June. Because of this, Sogefi reported revenues of € 519.5 million, down by 33.2% on the same period of the previous year; this reduction was almost entirely attributable to the effects of the crisis. The contraction in volumes, even though partly offset by the reduction in fixed costs, had a negative impact of around € 50 million on EBIT and € 39 million on the Net Result, and also led to a significant increase in debt.  

As well as reacting to reduce the impact of the crisis between March and today, the company also strove to adapt to the changed circumstances in the market and to quickly find a new economic and financial equilibrium, despite the scenario of reduced volumes such as today and which is also likely to be the case in the second half of the year and in 2021. 

OUTLOOK FOR THE YEAR

Visibility as to the evolution of the market in the coming months remains limited. With regard to the pandemic, if its containment in Europe would appear to be consolidated, its spread in North and South America has not yet reached the containment phase. There is also the risk of a second outbreak of Covid-19 and, lastly, at present it remains difficult to predict the impact of the macroeconomic conditions caused by the pandemic on demand in the automotive sector.

For the second half of 2020, IHS expects that, without a second outbreak of Covid-19 and resulting measures to restrict production and adverse effects of the latter on the market, world production could be at -10% compared to the second half of 2019, while market analyst forecasts tend to be more cautious, expecting a world market reduction in a range between -15% and -30%, the latter being the case in the event of a second wave of Covid-19.

In this uncertain scenario, Sogefi has incorporated into its expectations for the second half of the year a world market scenario of around -20%, against which it expects to achieve an EBIT, excluding restructuring costs, slightly positive, a significant reduction in the net loss compared to the first half and a slightly positive free cash flow.

Furthermore, in the light of the market outlook which is uncertain and is likely to remain so in the next few years, Sogefi has launched a plan for a significant reduction of fixed costs, which will be completed by the end of the first half of 2021, as well as actions to rationalize footprint and manage suppliers.

Even if today the Company has financial resources in excess of its current needs and although it does not foresee an increase in its debt compared to the end of June 2020.  In view of the uncertainty as to the evolution of the market and anticipating the natural expiry of existing loans, it has started negotiations with its financial partners, with whom consolidated relationships are in place, to renew existing loans and enter into new medium-term loans for a total value in the region of € 100 million.

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CIR acquires interest in Giano Holding

Milan, July 13 2020 – CIR S.p.A. – Compagnie Industriali Riunite has today acquired from EXOR an interest in the share capital of Giano Holding S.p.A., in accordance with what was set out in the investment agreement stipulated on April 23 2020 between CIR, EXOR N.V. and Giano Holding.

Giano Holding is the company controlled by EXOR, which, after acquiring the controlling interest in GEDI S.p.A. from CIR, launched a mandatory tender offer for the GEDI shares in circulation that it did not already own, at a unit price of € 0.46 per share.

After the conclusion of the offer and the reinvestment, CIR now holds an interest in the share capital of Giano Holding that represents transparently 5% of GEDI’s capital. The reinvestment was made for consideration of € 11,699,881.04 (corresponding, transparently, to a price of    € 0.46 for each GEDI share).

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CIR files AGM documents and Company Bylaws

Milan, June 30 2020 – CIR S.p.A. announces that the minutes of the Ordinary and Extraordinary General Meeting of the Shareholders, held at a single call on June 8 2020, together with the amended Company Bylaws are available to the public on the authorized storage mechanism eMarket STORAGE (www.emarketstorage.com), at the Company’s registered office and on its website (www.cirgroup.com). 

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CIR: AGM approves Financial Statements for 2019

New Board for the three years 2020-2022. Rodolfo De Benedetti confirmed as Chairman and Monica Mondardini as Chief Executive Officer. Former CIR Directors Philippe Bertherat, Maristella Botticini, Franco Debenedetti, Silvia Giannini and Francesca Pasinelli enter the Board

Milan, June 8 2020 – The Annual General Meeting of the Shareholders of CIR S.p.A. – Compagnie Industriali Riunite was held today in Milan under the chairmanship of Rodolfo De Benedetti.

Pursuant to terms of Art. 106, paragraph 4, of Decree Law no. 18 of March 17 2020, Shareholder attendance at the AGM took place exclusively through the designated representative appointed in accordance with the terms of Art. 135-undecies of D.Lgs. no 58 of February 24 1998 (TUF) and identified as Studio Segre S.r.l., to whom proxies/ sub-proxies were given as per the terms of Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph 4, of the TUF.

Approval of the Financial Statements for 2019

The Shareholders approved the Financial Statements for 2019 of CIR and COFIDE before the merger (on February 19 2020 the merger by incorporation of CIR S.p.A. – Compagnie Industriali Riunite into COFIDE – Gruppo De Benedetti S.p.A. took effect; the name of the Company resulting from the merger is CIR).

The group closed the year with pro-forma consolidated revenues of € 2,114.4 million, substantially unchanged from 2018, and EBITDA of € 290.3 million, down by 7.4% with constant accounting criteria. The net result before the effects relating to GEDI was a positive € 14.3 million (€ 22.6 million excluding non-recurring items and changes to accounting standards, in line with € 21.8 million, the comparable figure for the year 2018); including GEDI, the group reported a loss of € 122.4 million.

The Shareholders’ Meeting approved the proposal of the Board of Directors not to distribute dividends and the proposal not to renew the authorization to buy back own shares.

Stock Grant Plan

The Shareholders approved the first section of the report on compensation policy and on the compensation paid out and voted in favour of the second section of the same report. They also approved the Stock Grant Plan for 2020 aimed at directors and/or executives of the company and its subsidiaries for a total maximum of 4,500,000 conditional rights, each of which will give the beneficiaries the right to receive 1 CIR share free of charge. The shares assigned will be made available by drawing upon the own shares held by the company as treasury stock.

Appointment of the Board of Directors

The Shareholders Meeting established 12 as the number of members of the Board of Directors compared to the 9 members of the outgoing Board. For the three years 2020-2022 the following persons were appointed: Rodolfo De Benedetti, Monica Mondardini, Edoardo De Benedetti, Marco De Benedetti, Franco Debenedetti, Philippe Bertherat, Maristella Botticini, Paola Dubini, Silvia Giannini, Pia Luisa Marocco, Francesca Pasinelli and Maria Serena Porcari. The Directors were drawn from the sole list presented by the majority Shareholder F.lli De Benedetti S.p.A.. The CVs of the Directors are available on the website www.cirgroup.com.

During the Meeting Chairman Rodolfo De Benedetti and Chief Executive Monica Mondardini thanked the outgoing Directors Massimo Cremona and Francesco Guasti andthe outgoing Statutory Auditors for their work at the service of the company.

Appointment of the Board of Statutory Auditors

The Shareholders also appointed the members of the Board of Statutory Auditors of the company for the three years 2020-2022. The Statutory Auditors in office are Francesco Mantegazza, Maria-Maddalena Gnudi and Gaetano Rebecchini. The Alternate Auditors are Antonella Dellatorre, Luigi Macchiorlatti Vignat and Gianluca Marini. The Statutory Auditors were drawn from the sole list presented by the majority Shareholder F.lli De Benedetti S.p.A.. The Statutory Auditors’ CVs are available on the website www.cirgroup.com.

Renewal of powers delegated to the Board of Directors

In the extraordinary part of the meeting the Shareholders renewed the authorization of the Board of Directors to increase the share capital up to a maximum amount of € 500 million and to issue convertible warrants or bonds with warrants attached even without the option right and in this case in favour of institutional investors.
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Meeting of the Board of Directors

After the AGM, the Board of Directors, on the strength of the powers given to it by the Annual General Meeting of the Shareholders, implemented Stock Grant Plan 2020 by assigning 3,640,311 rights.

The Board of Directors confirmed Rodolfo De Benedetti as Chairman and Monica Mondardini as Chief Executive Officer of the company.

The Board checked the presence of the requisites for independence of the Directors, qualifying the following persons as independent: Philippe Bertherat, Maristella Botticini, Paola Dubini, Silvia Giannini, Pia Luisa Marocco, Francesca Pasinelli and Maria Serena Porcari. Seven Directors out of a total of twelve are therefore independent.

The Board also acknowledged that the members of the Board of Statutory Auditors meet the requirements for independence.

Lastly the members were appointed of the Appointments and Compensation Committee (Francesca Pasinelli, Chairman, Philippe Bertherat, Silvia Giannini, Maria Serena Porcari), of the Control, Risk and Sustainability Committee (Silvia Giannini, Chairman, Maristella Botticini, Paola Dubini, Pia Luisa Marocco, Francesca Pasinelli, Maria Serena Porcari), and of the Committee for Related-Party Transactions (Silvia Giannini, Chairman, Maristella Botticini, Paola Dubini, Pia Luisa Marocco, Francesca Pasinelli, Maria Serena Porcari). The Lead Independent Director was also appointed (Maria Serena Porcari).

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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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CIR: AGM documentation filed

Milan, May 15 2020 – CIR S.p.A. announces that, in view of the next Annual General Meeting of the Shareholders called for June 8 2020, the Annual Reports and Financial Statements for the year ended December 31 2019 of both CIR S.p.A. (prior to its merger by incorporation into COFIDE S.p.A.) and CIR S.p.A. (after its merger by incorporation into COFIDE S.p.A. and the change of the Company’s name) together with the reports of the firm of auditors and the Board of Statutory Auditors, the Report on Corporate Governance also containing information on the ownership structure as per Art. 123-bis of the TUF, plus the Consolidated Non-Financial Disclosure for 2019, are available to the public from today at the Company’s headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.com and on the authorized storage mechanism eMarket STORAGE.

It should also be noted that the Report of the Board of Directors on the proposal to cancel the previous resolution regarding the authorization to buy back and dispose of own shares (item 5 of the ordinary part of the AGM), the Compensation Report (item 6 of the ordinary part) and the Proposal to cancel the authorization of the Board of Directors to increase the share capital and issue bonds and the assignment of a new authorization (item 8 of the extraordinary part) are also available to the public from today at the Company’s headquarters, on its website and on the authorized storage mechanism eMarket STORAGE.

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CIR: F.lli De Benedetti S.p.A. presents list for Board of Directors

Milan, May 15 2020 – CIR S.p.A. announces that the company F.lli De Benedetti S.p.A., holder of 383,482,617 ordinary shares in CIR equal to 30.03% of the share capital and 44.93% of the voting rights, is the only shareholder to have presented a list for the renewal of the Board of Directors for the years 2020-2022 at the ordinary Annual General Meeting of the Shareholders to be held on June 8 2020 at 11.00 a.m. at a single call.  

F.lli De Benedetti S.p.A. also announces that at the AGM it will put forward the proposal that there should be 12 members of the Board of Directors compared to the 9 currently holding the position.

The list contains the following candidates:

1.           De Benedetti Rodolfo

2.           Mondardini Monica

3.              De Benedetti Edoardo

4.              De Benedetti Marco

5.              Debenedetti Franco

6.              Bertherat Philippe                    (independent)

7.              Botticini Maristella                  (independent)

8.              Dubini Paola                                (independent)

9.              Giannini Silvia                            (independent)

10.           Marocco Pia Luisa                    (independent)

11.           Pasinelli Francesca                  (independent)

12.           Porcari Maria Serena              (independent)

The CVs and the documentation in which the candidates accept their candidature and attest that they possess the requisites prescribed by law and by the Company Bylaws together with the profile containing their personal and professional details will be made available to the public as from May 18 2020 at the Company headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.com, and on the authorized storage mechanism eMarket STORAGE.

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CIR: F.lli De Benedetti S.p.A. presents list for Board of Statutory Auditors

Milan, May 15 2020 – CIR S.p.A. announces that the company F.lli De Benedetti S.p.A., holder of  383,482,617 ordinary shares in CIR equal to 30.03% of the share capital and 44.93% of the voting rights, is the only shareholder to have presented a list for the renewal of the Board of Statutory Auditors for the years 2020-2022 at the ordinary Annual General Meeting of the Shareholders to be held on June 8 2020 at 11.00 a.m. at a single call.

The list contains the following candidates:

Candidates for the position of Statutory Auditor (in office)

1.              Mantegazza Francesco

2.              Maria-Maddalena Gnudi

3.              Rebecchini Gaetano

Candidates for the position of Alternate Auditor

1.              Dellatorre Antonella

2.              Macchiorlatti Vignat Luigi

3.              Marini Gianluca

As only one list has been presented, pursuant to the terms of the second paragraph of Art. 144-octies of Consob Resolution no. 11971 of 14.5.1999 and subsequent amendments and additions, it should be noted that further lists can be presented until May 17 2020 (which means extended until May 18, the first day following which is not a holiday); the threshold of 2.5% stipulated in Art. 22 of the Company Bylaws is reduced by a half as required by paragraph five of Art.  144-sexies of the Resolution.

The CVs and the documentation in which the candidates accept their candidature and attest that they possess the requisites prescribed by law and by the Company Bylaws together with the profile containing their personal and professional details will be made available to the public as from May 18 2020 at the Company headquarters (Via Ciovassino 1, Milan), on the website www.cirgroup.com and on the authorized storage mechanism eMarket STORAGE.

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CIR files Interim Financial Report

Milan, May 11 2020 – CIR S.p.A. announces that the Interim Financial Report as of March 31 2020, approved by the Board of Directors on April 24, is available to the public on the authorized storage mechanism eMarket STORAGE (www.emarketstorage.com), at the registered office of the Company and on its website (www.cirgroup.com).

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CIR: results for first quarter 2020

  • After first two months of growth, the quarterly results were impacted by the shutdown in March of Sogefi’s production activities, by higher costs incurred by KOS to respond to the public health emergency, and by financial market turbulence, all due to the Covid-19 pandemic  
  • Revenues stable at € 531.5 million (€ 530.2 million in 1Q 2019), thanks to the extension of the perimeter in 2019 with the acquisition made in Germany in the healthcare sector 
  • EBITDA: € 66.2 million (€ 69.5 million in 1Q 2019) 
  • EBIT: € 12 million (€ 23.6 million in 1Q 2019) 
  • Net result: -€ 12.1 million
  • Net financial position of the parent company is extremely solid: € 280.7 million (approximately € 380 million expected by end of April)

Milan, April 24 2020 – The Board of Directors of CIR S.p.A. – Compagnie Industriali Riunite, which met today under the chairmanship of Rodolfo De Benedetti, has approved the Financial Report as of March 31 2020 presented by Chief Executive Officer Monica Mondardini. 

Impact of Covid-19 on the group 

At the beginning of January 2020, the WHO published news of the spread of coronavirus in China, particularly in the Wuhan district, and on January 30 declared a public health emergency at international level. During February, the virus was reported to have spread to Europe and America and by March a situation of substantial lockdown had been put in place. Italy was the first country in Europe to be invaded by the pandemic, and today is still one of the hardest hit countries, and the one that has adopted the most stringent measures to contain the spread of the virus. These measures have led to a declining trend of the phenomenon, but the conditions and the timing of the return to social interaction and economic activity are still uncertain and the country is awaiting the beginning of May for information on possible developments. Even in the other countries in which the group operates, the prospects for a return to normality are still uncertain. 

In this context, the companies of the CIR group took immediate action to protect the health of their employees, in compliance with the instructions issued by the governments of the various countries in which they operate, and implemented all the activities necessary and appropriate to manage the Covid-19 crisis and protect their sustainability.

The impact of the crisis on the businesses of the group was and continues to be significant: KOS, whose businesses are all operational except for outpatient facilities, has been operating in entirely exceptional conditions, dealing with the consequences of the exposure to the virus of individuals at whom its services are specifically directed; Sogefi, like the whole of the automotive sector, had to suspend its production activity first in China (which is today starting up again) and then in the second half of March in all regions of the world where it has a presence. Lastly, turbulence in the financial markets has led to adjustments to the value of the financial investments managed by the CIR holding company and its non-operating subsidiaries, despite the prudent profile of their investment portfolio.  

Consolidated results

In the first quarter of 2020, the CIR group reported consolidated revenues of € 531.5 million, substantially unchanged from € 530.2 million in the same period of 2019. In the first quarter, KOS increased its revenues thanks to the acquisition of Charleston in Germany in 2019, while Sogefi reported a decline in revenues due to the almost total shutdown of its production activities in the second half of March. 

The consolidated gross operating margin (EBITDA) came to € 66.2 million (12.5% of revenues) and was down by 5% from € 69.5 million (13.1% of revenues) in the first three months of 2019. The gross operating margin of the first two months showed an improvement in Sogefi’s profitability and the Italian businesses of KOS also held up well, while in March, because of the shutdown of Sogefi’s businesses and the impact of the public health emergency on the KOS group, EBITDA was lower. 

The consolidated operating result (EBIT) was € 12.0 million (2.3% of revenues), down from € 23.7 million in the first quarter of 2019; the reduction reflects the trend of EBITDA and the higher level of amortization in KOS after the incorporation of Charleston. 

The financial management result was affected by the generalized fall in the markets, giving rise to a negative return on the portfolio of the holding company of € 7.5 million, compared to a positive result of € 3.7 million in first quarter 2019. 

From the second half of February onwards, the financial markets experienced sharp declines both in the equity sector (between the start of the year and March 31 the S&P 500 index lost 20% and the Eurostoxx 50 index was down by 26%) and in the bond sector (with negative returns of between -5% and -15% in the various asset classes). The loss of € 7.5 million on the financial investment portfolio of the parent company CIR and its non-industrial subsidiaries was due mainly to the adjustment to fair value of the positions held in the Equity, Hedge Fund and High Yield bond segments. The average size of the portfolio was € 383 million with a negative performance in the quarter of 1.9%, which confirms the fact that it was less volatile than the markets. 

The net result was a loss of € 12.1 million versus earnings of € 4.1 million in the first quarter of 2019 (€ 5.7 million including the result of the assets held for disposal). 

Consolidated net debt before IFRS 16 amounted to € 367.7 million at March 31 2020, up by € 40.1 million compared to December 31 2019 (€ 327.6 million). KOS made investments for approximately € 25 million in acquisitions and greenfield developments and Sogefi made investments in a new plant in Romania for € 4.3 million.

The net financial position of the Parent Company (including the non-industrial subsidiaries) at March 31 2020 was positive for € 280.7 million, lower than at December 31 2019 (€ 295.7 million) mainly because of the above-mentioned adjustments to the fair value of assets (€ 8.8 million), and new capitalized assets (€ 0.9 million).

Financial payables for rights of use as per IFRS 16 totalled € 789.9 million at March 31 2020 leading to overall consolidated net financial debt of € 1,157.6 million. The IFRS 16 payables refer mainly to the subsidiary KOS (€ 733.0 million) which operates mostly in leased premises (it should be noted that Charleston operates exclusively in leased properties).

The equity of the group stood at € 757.7 million at March 31 2020 versus € 770.7 million (pro-forma) at December 31 2019 and the reduction reflects the loss for the period. 

Healthcare

KOS, which is controlled by CIR (59.5%) and in which F2i Healthcare has an interest, is the principal operator in Italy in the long-term care sector. The group manages 137 facilities, mainly in the centre and north of Italy and in Germany, with a total of more than 12,500 beds, and is active not only in Italy but also in India and the United Kingdom in the sector of diagnostics and oncology treatments. 

In the first three months of 2020, KOS reported revenues of € 181.3 million, posting a rise of 29.2%, due to the enlargement of its perimeter thanks to the acquisition of Charleston, compared to € 140.3 million in the same period of 2019. Revenues of the businesses in Italy, the UK and India declined overall by 1.5% compared to 2019; Charleston’s revenues came to € 43.1 million. 

Consolidated EBITDA came in at € 35.6 million, up from € 33.1 million in 2019, with Charleston contributing € 7.7 million in the quarter. The rest of the perimeter showed a decline due to the effects of the Covid-19 pandemic on the group.

Consolidated EBIT came to € 12.3 million versus € 16.8 million reported in the first quarter of 2019. The reduction was due to a rise of € 6.8 million in amortization resulting from the change in the perimeter compared to the first quarter of 2019.

Consolidated net income was € 2.0 million compared to € 7.8 million in 2019.

At March 31 2020, KOS had net debt before IFRS16 of € 392.5 million, up from € 368.0 million at December 31 2019, after investments of € 24.7 million made in acquisitions and greenfield developments. Operating cash flow was lower than that normally generated by business activity because of the circumstances caused by the pandemic. 

At March 31 2020, consolidated equity stood at € 287.8 million versus € 285.9 million at December 31 2019.

Automotive components

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

Sogefi reported revenues of € 350.2 million, down by 10.2% compared to the same period of 2019. The overall decline was more limited than that reported by the market (-24.7%) thanks to the good performance of all geographical areas except China in the first two months of the year. 

EBITDA for first quarter 2020 came in at € 34.9 million, compared to € 41.3 million in the same period of 2019; profitability (EBITDA / Revenues %) was 10% and was down from 10.6% in the same period of the previous year. 

EBIT came to € 3.7 million versus € 11.3 million in the first quarter of 2019. The reduction in EBIT took place in March because of the collapse in volumes, and includes the negative effect of exchange rates for € 5.3 million, mainly referring to South America. 

The first quarter closed with a net loss of € 5.6 million, which compares with a net result for first quarter 2019 of € 0.2 million (€ 1.6 million including the result of businesses held for disposal).  

Free Cash Flow for the first quarter of 2020 was a positive € 5.4 million versus -€ 9.1 million in 2019, thanks to a decidedly more favourable performance of working capital. 

Net financial debt before IFRS 16 stood at € 256.7 million at March 31 2020 and was substantially unchanged from € 256.2 million at the end of 2019 but lower than the figure of € 262.1 million reported at March 31 2019. Including the amount of € 56.7 million resulting from the application of IFRS 16, net debt amounted to € 313.4 million at March 31 2020, down from € 318.9 million at December 31 2019. At March 31 2020, Sogefi had credit lines of € 298 million in excess of its net debt figure, for which all the conditions have been respected and which are thus available for drawdown at a simple request. 

At March 31 2020, consolidated equity, excluding minority interests, amounted to € 181.1 million (€ 188.7 million at December 31 2019).

Non-core investments

The non-core investments of the group totalled € 76.9 million at March 31 2020 (€ 74.5 million at December 31 2019).

They consisted of a diversified portfolio of funds in the private equity sector, the fair value of which was € 59.2 million at March 31 2020, and a diversified portfolio of direct minority shareholdings worth € 17.7 million at March 31 2020.  

Events that have taken place since March 31 2020

In order not to prevent the operating companies of the group from accessing bank loans guaranteed by SACE, as per the terms of D.L. no. 23 of April 8 2020, to counter the effects of Covid 19, on April 20 2020 the Board of Directors of CIR decided to withdraw both the proposal to distribute a dividend of € 0.02 per share for the year 2019 and the proposal to authorize the buyback and disposal of own shares and then to postpone the ordinary and extraordinary Annual General Meeting of the Shareholders, scheduled for April 24 2020, until June 8 2020. The Board in any case reserves the right to evaluate the possibility of submitting the proposals withdrawn to a General Meeting of the Shareholders in the second half of the year, should the evolution of the current crisis permit it. 

On April 23 2020 the sale was completed of CIR’s 43.78% shareholding in GEDI Gruppo Editoriale to EXOR N.V.. More specifically, the sale was completed of GEDI to Giano Holding S.p.A., a newly established company wholly owned by EXOR, at a price per share of € 0.46, which corresponds to a total amount of € 102.4 million. An investment agreement was also signed by CIR, EXOR and Giano Holding, regulating the purchase by CIR, on completion of the mandatory public offer to buy GEDI shares and at the same price as that of the offer  (€ 0.46), of a shareholding interest in Giano Holding representing, transparently, 5% of the issued share capital of GEDI.

Outlook for the year

In the current state of uncertainty about the evolution of the pandemic at global level and of the measures that the governments of the various countries will adopt for the recovery phase, it is impossible to make any reliable forecasts of the impact of the Covid-19 phenomenon on the CIR group. 

The evolution of Sogefi’s business is particularly uncertain, given that the repercussions of the pandemic on the automotive sector have been particularly significant. The group is focused on doing all it can to manage the crisis: it has put in place actions to reduce costs and limit as far as possible outlays for current costs and investments that are not strictly necessary, it regularly assesses liquidity positions, liaising with its financial partners, and is preparing to start operating again, introducing higher safety standards for personnel and cost flexibility, in relation to volumes that will be negatively affected by circumstances for a certain period of time. Despite this, both the period of closure and the first months after business resumes will see economic losses that will also be reflected in an increase in net debt.

As for KOS, the coming months will be devoted to limiting the negative impact of the spread of the Covid-19 virus and to defending the health of guests, patients and workers. After a phase of intense development activity, during the rest of the year the company will focus on the integration of the numerous acquisitions that it has made in recent times. 

Regarding the investments of the parent company, the management of its financial assets remains based on prudential long-term policies. The parent company of the CIR group (together with the other non-industrial subsidiaries) has a very solid capital position with net cash and cash equivalents of € 280.7 million, which are not restricted and are not subject to any obligations. This position increased in April by € 102.4 million from the sale of the investment in GEDI.  

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Completion of the sale of the shareholding in GEDI Gruppo Editoriale S.p.A.

Closing of the sale of 43.78% of the GEDI share capital to Giano Holding S.p.A.

Milan, April 23 2020 – CIR S.p.A. – Compagnie Industriali Riunite (“CIR”) announces the implementation, on the date hereof, of the agreement dated December 2, 2019, between CIR, on the one part, and EXOR N.V. (“EXOR”), on the other part, for the sale and purchase of all the 222,705,235 ordinary shares in GEDI Gruppo Editoriale S.p.A. (“GEDI”) owned by CIR (the “CIR Shareholding”), equal to 43.78% of the issued capital of GEDI (see the press releases of December 2, 2019 and April 3, 2020).

More specifically, upon receipt of the necessary regulatory authorizations, the CIR Shareholding was sold today to Giano Holding S.p.A. (“Giano Holding”), a newly established joint stock company (società per azioni) entirely owned by EXOR and designated by the latter as the buyer of the CIR Shareholding, at a price per share equal to € 0.46, for a total amount of € 102.4 million. The main terms and conditions of the transaction were already illustrated in the above-mentioned press releases, to which reference should be made.

Following the implementation of the purchase of the CIR Shareholding, Giano Holding will launch a mandatory public tender offer (the “Offer”) for the purchase of the outstanding GEDI shares not already held, at the same price per share paid to CIR, therefore at a price per share equal to € 0.46, in accordance with Art. 106, first paragraph, of Legislative Decree no. 58 of February 24 1998, as subsequently amended and supplemented.

In the context of the sale of the CIR Shareholding, CIR terminated today, by mutual agreement, the shareholders’ agreements related to GEDI, executed on July 30, 2016, respectively with EXOR and Mercurio S.p.A..

On the date hereof CIR, EXOR and Giano Holding also executed an investment agreement concerning the purchase by CIR, following the completion of the Offer and at the same price of such Offer, of a shareholding in Giano Holding representing, in transparency, 5% of the share capital issued by GEDI.

Following the implementation of the entry by CIR into the share capital of Giano Holding, a shareholders’ agreement and a put and call agreement executed today by EXOR and CIR will also become effective. The shareholders’ agreement regulates the relationships of the parties as shareholders of Giano Holding, and indirectly of GEDI, and the transfers of Giano Holding shares. The put and call agreement regulates the put option granted to CIR and the call option granted to EXOR in respect of the shareholding held by CIR in Giano Holding; these options will be exercisable as from the third year following the entry by CIR into the share capital of Giano Holding, save for the early termination of the shareholders’ agreement or the occurrence of certain events.

The contents of the aforesaid agreements, as relevant pursuant to applicable laws, will be published in accordance with and in the manner set forth under the law.

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CIR: change in calendar of events for 2020

Milan, April 21 2020 – CIR S.p.A. – Compagnie Industriali Riunite announces a partial change in its calendar of corporate events for the year 2020, as per the terms of letter b), Art. 2.6.2. of the Rules for the Markets organized and managed by Borsa Italiana S.p.A., in that the ordinary and extraordinary Annual General Meeting of the Shareholders, initially called for Friday April 24 2020, at a single call, to adopt a resolution to approve the Financial Statements for the year ended December 31 2019 among other things, has been postponed until Monday June 8 2020, at a single call, for the reasons given today in the previous press release.   

The other dates on the calendar of events for 2020 published on the company’s website remain confirmed.

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CIR press release

The Board of Directors of CIR has decided to withdraw its proposals regarding the distribution of dividends and the authorization to buy back and dispose of own shares, and consequently to postpone until June 8 2020 the ordinary and extraordinary Annual General Meeting of the Shareholders scheduled to be held on April 24 2020  

Milan, April 21 2020 –The Board of Directors of CIR acknowledges that the economic environment has changed since the date of the last Board of Directors meeting held on March 9 2020 and the issue of the recent D.L. no. 23 of April 8 2020 (the “Liquidity Decree”). Article 1 of this decree allows businesses to access bank financing under guarantees issued by SACE S.p.A. but only on the condition that the beneficiary company or “any other company  with its headquarters in Italy belonging to the same group as the latter, does not approve the distribution of dividends or the buyback of own shares during  2020”.

In this changed regulatory environment and given the general situation of the markets which the group’s operating companies will have to measure up to, in order not to prevent them from accessing bank loans guaranteed by SACE if necessary, the Board has resolved to withdraw both the proposal for the distribution of a dividend of € 0.02 per share for the year 2019 and thus not to distribute any dividends, and the proposal for the authorization of the buyback and disposal of own shares (but maintaining the cancellation of the resolution authorizing the buyback of own shares of April 29 2019, for the part not yet executed).

As a result of the above and in the light of the right given by Art. 106 of D.L. no. 18 of March 17 2020, the Board of Directors has voted to postpone the ordinary and extraordinary Annual General Meeting of the Shareholders from April 24 2020 until June 8 2020 with the following Agenda:  

Ordinary part

1. Financial Statements for the year ended December 31 2019. Resolutions on the same. Presentation of the Consolidated Financial Statements for the year ended December 31 2019.

2. Financial Statements for the year ended December 31 2019 of “CIR S.p.A. – COMPAGNIE INDUSTRIALI RIUNITE” Tax Code 00519120018 incorporated into “COFIDE – Gruppo De Benedetti S.p.A.” Tax Code 01792930016 (now “CIR S.p.A. – COMPAGNIE INDUSTRIALI RIUNITE”). Resolutions on the same.

3. Determination of the number of Directors, appointment of the members of the Board of Directors for the years 2020-2022 and decision as to their fees.

4. Appointment of the Board of Statutory Auditors for the years 2020-2022 and decision as to their fees.

5. Proposal to cancel the resolution of April 29 2019 regarding the authorization to buy back and dispose of own shares.

6. Report on compensation policy and compensation paid out. Resolutions on the same.

7. Proposal for the approval of Stock Grant Plan 2020.

Extraordinary part

1. Proposal to cancel the authorization of the Board of Directors to increase the share capital and issue bonds, approved by the Extraordinary General Meeting of the Shareholders on April 27 2018 and assignment of new authorizations as per the terms of Articles 2443 and 2420 ter of the Civil Code.

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The Board in any case reserves the right to evaluate the possibility of submitting the proposals withdrawn to a General Meeting of the Shareholders in the second half of the year, should the developments of the current emergency allow it. The company’s calendar of events will be amended with the new date of the Annual General Meeting.

The Notice of Annual General Meeting and the further pre-AGM documentation including the time limits for the presentation of lists for the renewal of the Board of Directors and Board of Statutory Auditors, adjusted in the light of the resolutions adopted at today’s Board meeting, will be made available to the public within the time-frames and following the procedures laid down by law and any regulations applicable.

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