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- 09:41 CET

CIR: filing of documentation for AGM

Milan, 16 March 2023 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in ordinary session for 28 April 2023, 10.00 a.m., 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 Appointment of the Board of Directors, determination of the number of members, term of office and relevant remuneration (item 5);
  • the Report of the Board of Directors on the Appointment of the Board of Statutory Auditors for the financial years 2023-2024-2025 and determination of the relevant remuneration (item 6).

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- 13:45 CET

CIR: results for the year 2022

  • Strong growth in revenues (+13.9% on 2021) to € 2,235.6 million, thanks to the positive evolution of the subsidiaries Sogefi and KOS

  • Consolidated EBITDA at € 295.7 million (higher on a recurring basis)

  • Consolidated net result at overall breakeven (-€ 0.2 million), negatively affected by returns on financial assets, due to the negative market trends

  • Net financial position of the parent company positive for € 320.3 million

Milan, 13 March 2023 – The Board of Directors of CIR S.p.A. – Compagnie Industriali Riunite (“CIR”, the “Group” or the “Company”), which met today under the chairmanship of Rodolfo De Benedetti, has approved the proposed financial statements for the year and the consolidated accounts of the group as of 31 December 2022 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

During 2022, the Company and its subsidiaries operated in a complex environment that was still suffering the effects of the pandemic, although to a lesser extent, and the high cost of raw materials and energy, aggravated by the conflict between Russia and Ukraine and by the negative performance of the financial markets. Only in the last quarter of the year did the tension in the financial, energy and commodity markets ease. 

The consolidated revenues of the Group came in at € 2,235.6 million, posting a rise of 13.9% on 2021, with positive dynamics in both areas of activity (healthcare and automotive components), which recovered considerably after two years that were strongly impacted by the effects of the Covid-19 pandemic.

The consolidated gross operating margin (EBITDA) came to € 295.7 million, 13.2% of revenues (€ 300.7 million in 2021). Excluding the non-recurring items reported in the two years, consolidated EBITDA increased by 5.4% compared to 2021.

The consolidated operating result (EBIT) was € 81.7 million (€ 80.2 million in 2021). Excluding, in this case too, the effect of the non-recurring items, consolidated EBIT rose by 40% on a recurring basis.

The management of financial assets, which were worth a total of € 393.1 million at the end of 2022, produced a negative result of € 5.0 million (+€ 24.4 million in 2021), with an average return of -1.3%; it should be noted that the return obtained compares with performances of between -10% and -20% for the main equity and bond indexes.

Thus the consolidated net result came to -€ 0.2 million versus net income of € 18.0 million in 2021.

The recurring operating results of the subsidiaries showed growth while the consolidated net result was impacted by the return on the financial investment portfolio, which was affected by the negative performance of the markets; the net result of the financial subsidiaries of the group (CIR, CIR International and CIR Investimenti) was in fact negative for € 16.5 million, after a positive contribution of € 16.1 million in 2021.

Consolidated net financial debt before IFRS 16 stood at € 81.8 million at 31 December 2022, almost unchanged from € 85.6 million at 31 December 2021:

  • The net debt of the subsidiaries declined to € 402.2 million from € 418.0 million at 31 December 2021;
  • the net financial position of the Parent Company(including the subsidiaries CIR Investimenti and CIR International) is still very positive, at € 320.3 million, but is slightly lower than at 31 December 2021 (€ 332.3 million), due to the buyback of own shares for € 6.4 million and to the lower financial results.

Consolidated net financial debt, inclusive of IFRS 16 payables, amounted to € 950.6 million at 31 December 2022, with rights of use of € 868.8 million, referring mainly to the subsidiary KOS (€ 798.2 million), which operates largely in leased premises.

The shareholders’ equity of the Group stood at € 743.4 million at 31 December 2022 (€ 740.4 million al 31 December 2021).

KOS

The effects of the Covid-19 pandemic caused a reduction in the activity of KOS as from the second quarter of 2020 until the early months of 2021; from the second quarter of 2021 and for the whole of 2022 the business reported an improvement, thanks to the pandemic situation becoming less critical, although it still has not reached pre-Covid levels.

KOS’ revenues came in at € 683.5 million, posting growth of 6.5% compared to the previous year, thanks especially to the recovery of the nursing home sector in Italy (+16.3%) and in Germany (+6.6%).

EBIT came to € 30.4 million; in 2021 KOS had reported EBIT of € 31.8 million, which included non-recurring income of approximately € 12.0 million; the recurring operating result has therefore increased, thanks to the gradual recovery in levels of activity and operating efficiency, and despite the considerable rise in healthcare personnel costs and energy costs.

The net result for the year was one of overall breakeven (-€ 0.8 million versus € 1.4 million in 2021, which contained the non-recurring income mentioned above).

Operating Free Cash Flow before IFRS 16 was a positive € 5.0 million; KOS is continuing to pursue its plan for developing and acquiring new facilities and invested € 23.0 million in greenfield sites, for which the cash flow, including investments in new facilities, came to -€ 18.1 million.

Net debt at the close of 2022, excluding payables from the application of IFRS 16, stood at € 178.3 million (€ 160.2 million at year-end 2021); total net debt, including the IFRS 16 payables, came to € 976.4 million.

Sogefi

Global production of motor vehicles recorded growth of 6.2% compared to 2021, with a contribution from all geographical areas: +5.7% in Europe, +9.7% in NAFTA, +8.3% in Mercosur, +6.1% in China and +22.7% in India. As for production costs, the first nine months of 2022 saw continuing tension in the commodity and energy markets, which was exacerbated by the conflict between Russia and Ukraine, but which eased in the last quarter of the year.

Sogefi’s revenues were up by 17.5% compared to 2021, thanks to growth in production volumes (+4%), the increase in selling prices linked to the rise in the cost of raw materials, and to the evolution of exchange rates (+12.6% at constant exchange rates).

Economic results were positive, posting a distinct improvement: in fact EBIT came in at € 68.3 million (4.4% of revenues), up by 17% from € 58.4 million in 2021.

Net income was € 29.6 million (€ 2.0 million in 2021).

Free Cash Flow was positive for € 29.3 million (€ 32.4 million in 2021).

Net debt before IFRS 16 was lower at € 224.3 million at 31 December 2022, compared to € 258.2 million at 31 December 2021.

Financial management

As a result of the shock to the financial markets caused by the conflict between Russia and Ukraine and the hike in interest rates adopted by central banks to counter inflation, during 2022 the financial markets reported one of the worst performances of the last few decades.

Against this backdrop, the management of financial assets, which totalled € 393.1 million at year end 2022, reported a negative result of € 5.0 million (+€ 24.4 million in 2021), with an average return of -1.3%; it should be noted however that the return obtained compares with performances of between -10% and -20% for the main equity and bond indexes.

On 22 December 2022 the parent company CIR signed a binding preliminary agreement, subject to certain conditions precedent, for the sale of a real estate property complex not instrumental to the business, which has a carrying value in the accounts of € 11.0 million, for a total amount of € 38.0 million. The amount of € 5.0 million has been received as a deposit, while the remaining amount will be paid on completion of the deal (indicatively by the end of 2023), when the capital gain will be recognized.

ESG plans and performance

In 2022 the CIR group achieved the sustainability objectives set out in the 2021-2025 plans of the Company and its subsidiaries.

Progress has been made on the de-carbonization front, with a reduction in energy intensity in all the group’s businesses and a mix of energy sourcing with a growing percentage of green energy.

Waste management has also improved significantly, with an increase of almost 10p.p. in the percentage of waste recycled, especially by Sogefi. The latter has also continued to develop products for sustainable mobility with more than 50% of new orders being for hybrid or electric platforms.

With regards to the management of human resources, the number of hours dedicated to personnel training has increased and action continues to be taken to guarantee that equality of treatment is monitored in all countries in which the group operates.

Significant events that have taken place since 31 December 2022

Since the close of the year 2022 there have been no significant events that could have an impact on the economic, patrimonial and financial information given herein.

Outlook for the year

Visibility as to the performance of the Group’s businesses in coming months remains low due to the continuing uncertainty regarding the evolution of the Russian-Ukrainian conflict, macroeconomic developments and the prices of raw materials, particularly energy.

As far as KOS is concerned, in a context with fewer critical operational issues relating to the pandemic, return to pre-Covid levels of activity is expected during this year for Rehabilitation and Acute and in 2024 for nursing homes in Italy and Germany, after a gradual increase in saturation during 2023, reaching levels close to those of 2019. In the absence of events or circumstances that could make the environment more complex than it is at present, the operating results of KOS for the whole year should be improving vs. the past year.

As for the automotive market, in which Sogefi operates, visibility for 2023 remains limited due to the uncertainty linked to the Russian-Ukrainian conflict, the macroeconomic trend, and the availability and cost of raw materials and energy. For 2023, S&P Global (IHS) is forecasting growth in world car production of 3.6% compared to 2022, with Europe at +7.1%, Nafta at +5.4%, South America at +4.9% and China at +1.1%. As far as commodity and energy prices are concerned, in 2022 the rising trend came to an end, although volatility remains high. In some geographical areas there are still inflationary pressures on labour costs. Provided there is no serious deterioration in the geopolitical and macroeconomic scenario from today’s levels, for 2023 Sogefi expects to see mid-single-digit revenue growth and an operating result, excluding non-recurring expense, which is at least in line with that of 2022.

As for the financial asset management of the holding company, given the uncertainty linked to the geo-political, macroeconomic and financial climate, volatile conditions are expected to continue throughout 2023 although there should be an improvement in the returns on financial assets.  

Dividend proposal

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

Annual General Meeting of the Shareholders

The Annual General Meeting of the Shareholders will be held, in an ordinary session and at a single calling, on 28 April 2023. The Board of Directors at today’s meeting has voted, among other things, to put the following proposals before the Annual General Meeting of the Shareholders:

  • The cancellation (for the part not utilized) and renewal of the authorization of the Board of Directors, in the light of the rules stated in Articles 2357 and following articles of the Civil Code, of Art. 32 of D.Lgs no. 58/98 (the “TUF”), of Art. 144-bis of CONSOB Resolution no. 11971/1999, of EU Regulation no. 596/2014 (the “MAR”), of EU Delegated Regulation no. 2016/1052, of Consob Resolution no. 20876 of April 3 2019 and Consob Guidelines of July 2019, for a period of 18 months to buy back a maximum of 220,000,000 of its own shares; it should also be taken into account that, including in the calculation any own shares already owned even through subsidiaries, the number of shares bought back must not in any case exceed a total number of shares representing one fifth of the share capital of CIR; that the buyback transactions may take place at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the Company’s shares in the Stock Exchange trading session preceding each single buyback or preceding the date on which the price is fixed in the event of purchases made in accordance with points (i), (iii) and (iv) of the following paragraph. 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.

    The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) on regulated markets following operating procedures established in the rules for organizing and managing the said markets, which do not allow bids and offers to be matched directly; (iii) through the assignment pro-rata of put options to the shareholders to be assigned within 15 months of the date of the AGM resolution authorizing the same with exercise within 18 months of the same resolution; (iv) through the purchase and sale of derivative instruments traded on regulated markets that involve physical delivery of the underlying shares in compliance with the further provisions contained in Art. 144-bis of the Rules for Issuers issued by Consob, and as per the terms of Articles 5 and 13 of the MAR. As far as the disposal (alienation) of the own shares is concerned, the resolution being submitted includes am authorization to carry out any act of disposition, including the right to use the shares thus bought, without any time limits or constraints, even for compensation plans based on the Company’s shares.

    The main reasons why this authorization is being renewed are the following: (a) to fulfil 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, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) to have a portfolio of own shares to use as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the scope of transactions of interest to the Company (a so-called “stock of securities”), all within the limits of the regulations in force at the time (c) to engage in action to support market liquidity, optimize the capital structure and remunerate shareholders in particular market conditions, all within the limits established by current rules and regulations; (d)  to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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;

  • The approval of a stock grant plan for 2023 aimed at employees of the Company and its subsidiaries, in terms to be defined by the Board of Directors and communicated 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 the Company.

  • The renewal of the Board of Directors, whose mandate ends with the approval of the financial statements as of 31 December 2022;

  • The renewal of the Board of Statutory Auditors, whose mandate ends with the approval of the financial statements as of 31 December 2022.

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- 13:36 CET

Sogefi: results higher in 2022 than 2021

Revenues: +17.5% at € 1,552.1 million

Revenue growth in all geographical areas and product lines

EBIT: +17% at € 68.3 million

Net income higher at € 29.6 million (€ 2.0 million in 2021)

Free Cash Flow positive for € 29.3 million (€ 32.4 million in 2021)

Debt before IFRS 16 reduced to € 224.3 million (€ 258.2 million at end of 2021)

Milan, 24 February 2023 -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 2022 , presented by chief executive officer Frédéric Sipahi.

Sogefi, a company of the CIR Group, is one of the main producers worldwide of automotive components in three sectors: Air and Cooling, Filtration and Suspensions.

PERFORMANCE OF THE MARKET

In 2022 global vehicle production reported growth of 6.2% compared to the previous year with progress recorded in all geographical areas: +5.7% in Europe, +9.7% in NAFTA, +8.3% in Mercosur, +6.1% in China and +22.7% in India. The good performance reflects the strong rise in production in the third quarter of 2022 (+29.5%) and the more limited rise in the last quarter (+1.7%). 

However, despite the recovery in 2022, world car production was still lower than it was in 2019 (-7.8%), with Europe posting -23.2%. For 2023, S&P Global (IHS), a source commonly used in the sector, is predicting a rise in world production of 3.6% compared to 2022, with growth in all the main geographical areas.

SUMMARY OF SOGEFI’S PERFORMANCE IN 2022

The results for 2022 were positive and showed a significant improvement:

  • Revenues posted growth of 17.5% compared to 2021, +12.5% at constant exchange rates, due to the higher production volumes and selling prices;
  • EBITDA was higher at € 194.7 million versus € 192.5 million in 2021;
  • EBIT totalled € 68.3 million (4.4% of revenues) and was up by 17% from € 58.4 million in 2021;
  • Net income came in at € 29.6 million (€ 2.0 million in 2021);
  • Free cash flow was a positive € 29.3 million (€ 32.4 million in 2021);
  • Net debt (before IFRS 16) contracted to € 224.3 million at 31 December 2022, from € 258.2 million at 31 December 2021.

Product innovation was significant during 2022:

  • SOGEFI’s CabinHepa+ cabin filter, which uses HEPA (High Efficiency Particulate Air) media and filters the air mechanically, capturing particles 50 times smaller than a conventional cabin filter, was nominated product of the year 2022 in France;
  • In the month of September the innovative cooling plates for Electric Vehicle platforms were presented at the Novi Michigan Battery Show and were very well received by the market;
  • In the month of October new aftermarket products and the latest product innovations were presented at the Paris Equip Auto Show, where they received great interest from operators in the sector.  

Commercial activity was positive and 52% of the total value of new contracts was for E-mobility platforms:

  • The Filtration division was awarded contracts for the supply of air purification filters, oil filters and fuel modules in Europe and India; 
  • The Suspensions division signed contracts in Europe for the supply of stabilizer bars for electric or plug-in hybrid vehicles and was awarded a contract for the supply of stabilizer bars for the electric version of one of the most popular pick-up trucks;
  • The Air and Cooling division signed important contracts in NAFTA, Europe and China for the supply of thermal management products and cooling plates for electric mobility. 54% of the value of the division’s new contracts has to do with E-mobility platforms.

Sustainability performance improves: reduction of the energy intensity index, improvement to the procurement mix in favour of renewable sources, an increase in the amount of waste products reused.

CONSOLIDATED RESULTS FOR 2022

Revenues for 2022 came in at € 1,552.1 million and were up by 17.5% compared to the same period of 2021.

At constant exchange rates the rise was 12.6%: sales volumes were 3.9% higher than in 2021 while the remaining part of the increase reflects the higher selling prices over the various product lines as a result of the evolution of the cost of raw materials and the components used.

Revenues were higher in all geographical areas: +9.5% in Europe, +29.7% in North America (+17.2% at constant exchange rates), +38.7% in South America (+15.8% at constant exchange rates, net of inflation in Argentina), +15% in China (+6.7% at constant exchange rates) and +36.8% in India (+29.4% at constant exchange rates).

Suspensions reported a rise in revenues of 21.5% (+16.6% at constant exchange rates), with significant growth rates particularly in India, North America, South America and Europe.

Filtration reported a rise in revenues of 15.6% higher (+12.1% at constant exchange rates), thanks to the good performance of the Aftermarket channel in Europe and of business in North America and India.

Air and Cooling reported revenues that were up by 15.4% (+8.9% at constant exchange rates), with particularly significant increases in China and Nafta.

EBITDA, totalling € 194.7 million, rose by 1.1% from € 192.5 million in 2021; excluding other non-operating income/expense, EBITDA increased by 7%.  

EBIT came to € 68.3 million, posting growth of 17% compared to € 58.4 million in 2021. The ratio to sales in 2022 was in line with 2021 (4.4%).

Financial expense, totalling € 18.8 million, was slightly higher than in 2021 (€ 17.8 million), which included an item of non-recurring financial income of € 1.2 million.

Tax expense was higher at € 18.3 million (€ 13.5 million in 2021).

Net income came in at € 29.6 million, up from € 2.0 million in 2021 (€ 26.4 million, not considering the accounting loss generated by the sale of the Argentinian Filtration business).

Free Cash Flow was positive for € 29.3 million and was substantially in line with the figure of € 32.4 million for 2021.

At 31 December 2022 shareholders’ equity, excluding minority interests, stood at € 230.7 million compared to € 187.7 million at 31 December 2021. The increase reflects the net result for the period together with other positive accounting effects.

Net financial debt before IFRS 16 amounted to € 224.3 million at 31 December 2022 compared to € 258.2 million at year end 2021 and € 219.7 million at 30 September 2022. Including the financial payables for rights of use, in accordance with IFRS 16, net financial debt totalled € 294.9 million at 31 December 2022, down from € 327.6 million at 31 December 2021.

At 31 December 2022 the Group had committed credit lines in excess of its requirements for € 279.0 million.

KEY RESULTS OF FOURTH QUARTER 2022

In the fourth quarter of 2022, Sogefi reported revenues of € 386.5 million, posting growth of 16.9% (+15.4% at constant exchange rates) compared to the same period of 2021, thanks to the increase in production volumes (+5.8%), to the adjustment of selling prices and to the positive effect of exchange rates. Revenue dynamics, even with constant exchange rates and selling prices, were positive and outperformed the market.

EBITDA came in at € 43.3 million, 11.2% of revenues, compared to € 48.3 million (14.6%) in fourth quarter 2021. The performance of EBITDA was affected by non-operating costs of € 4.5 million which compare with non-operating income of € 13.3 million in the fourth quarter of 2021. Excluding the non-operating expense/income, which are of a non-recurring nature, EBITDA rose from € 35.0 million (10.6%) in 2021 to € 47.8 million (12.4%) in 2022.

EBIT was positive for € 6.0 million (versus € 8.9 million in fourth quarter 2021) and was impacted by the non-recurring results mentioned above.

The consolidated net result for the fourth quarter of2022 was a negative € 3.4 million after net income of € 3.9 million in the same period of the previous year, after financial expense of € 5.2 million (€ 4.4 million in 2021) and tax expense of € 3.7 million (€ 0.3 million in 2021). The greater impact of taxes reflects the presence in the result of losses not relevant for tax purposes or for which there was no basis for recognizing deferred tax assets; whereas the fourth quarter of 2021 benefited from the recognition of deferred tax assets of € 4.3 million.

SIGNIFICANT EVENTS OCCURRING AFTER 31 DECEMBER 2022

Since the close of the year, there have been no significant factors or events that could have an impact on the economic, patrimonial and financial information presented in this document.

OUTLOOK FOR THE YEAR

Visibility as to the trend of the automotive market in 2023 remains low due to the uncertainties linked to the Russian-Ukrainian conflict, the macroeconomic evolution and the prices of raw materials, particularly energy. 

For 2023, S&P Global (IHS) is forecasting growth in world car production of 3.6% compared to 2022, with Europe at +7.1%, NAFTA at +5.4%, South America at +4.9% and China at +1.1%.

As far as commodity prices are concerned, during 2022 the rising trend of steel prices came to an end and in the last part of the year the prices of resin and other raw materials, gas and electricity stopped rising although volatility remains high. It should also be noted that there continue to be inflationary pressures on labour costs in certain geographical areas.

Provided there is no serious deterioration in the geopolitical and macroeconomic scenario from today’s levels, in 2023 the Sogefi Group expects to see mid single-digit revenue growth and an operating result, excluding non-recurring expense, that is at least in line with that of 2022.

DIVIDEND PROPOSAL

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

VERIFICATION OF THE REQUISITES OF INDEPENDENCE

During today’s meeting the Board of Directors verified the presence of the requisites of independence of the directors who have declared themselves to be independent, Patrizia Arienti, Maha Daoudi, Mauro Melis, Massimiliano Picardi and Christian Georges Streiff. Five directors out of a total of nine are therefore independent. The Board of Statutory Auditors in its turn verified the existence of the requisites of independence of its members. All the independent directors and members of the Board of Statutory Auditors therefore possess the requisites established by the law and by the Corporate Governance Code adopted by the Company.

ANNUAL GENERAL MEETING OF THE SHAREHOLDERS

The Annual General Meeting of the Shareholders of Sogefi will be held at the first call on 21 April 2023 and at the second call on 24 April 2023. 

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

Authorization to buy back own shares

In the light of the rules stated in Articles 2357 and following articles of the Civil Code, of Art. 132 of D.Lgs. no.  58/98, of Art. 144-bis of Consob Resolution no. 11971/1999, of EU Regulation no. 596/2014, EU Delegated Regulation no. 2016/1052, and of Consob Resolution no. 20876 of April 3 2019 and Consob Guidelines of July 2019, 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 at a unit price that cannot be more than 15% higher or lower than the benchmark price recorded by the Company’s shares on the Stock Exchange trading day preceding each single buyback transaction or preceding the date on which the price is fixed in the event of purchases made according to the procedures stated in points (a), (c) and (d) of the following paragraph, and in any case, when the shares are bought back through 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. As of today the Company owns 1,877,751 of its own shares, equal to 1.56% of the share capital.

The buyback must take place in the market, in compliance with the terms of Art. 132 of D.Lgs no. 58/98 and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (a) through a public tender offer to buy or exchange shares; (b) on regulated markets following operating procedures established in the rules for organizing and managing the said markets, which do not allow bids and offers to be matched directly; (c) through the assignment pro-rata of put options to the shareholders to be assigned within 15 months of the date of the AGM resolution authorizing the same with exercise within 18 months of the same resolution; (d) through the purchase and sale of derivative instruments traded on regulated markets that involve the physical delivery of the underlying shares in compliance with the further provisions contained in Art. 144-bis of the Rules for Issuers issued by Consob, and as per the terms of Articles 5 and 13 of EU Regulation 596/2014.

The main reasons why this authorization is being renewed are the following: (i) to fulfil 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 S.p.A. or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (ii) to have a portfolio of own shares to use as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the scope of transactions of interest to the Company (a so-called “stock of securities”); (iii) to engage in action to support market liquidity, optimize the capital structure and remunerate shareholders in particular market conditions, all within the limits established by current rules and regulations; (iv)  to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (v) 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.

Stock Grant Plan 2023

The approval of a stock grant plan for 2023, for a maximum of 1,250,000 units, aimed at employees of the Company and its subsidiaries, in terms to be defined by the Board of Directors and communicated to the market in sufficient time for any legal obligations to be complied with. The stock grant plan has the aim of rewarding the loyalty of the beneficiaries to the companies of the Group, giving them a medium-long term incentive to increase their commitment to improving the performance of the Company while at the same time aligning the interests of management, shareholders and all stakeholders.

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- 15:05 CET

Calendar of events for 2023

Milan, 30 January 2023 – CIR S.p.A. announces that the Company’s calendar of events for 2023 will be as follows:

Monday13.03.202310,00 amBoard of Directors Meeting (Pro-forma Financial Report for 2022)
Friday28.04.202310,00 amAnnual General Meeting of the Shareholders (Approval of Financial Report for 2022)
Monday31.07.202310,00 amBoard of Directors Meeting (Half-year Financial Report for 2023)

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- 13:34 CEST

Sogefi: results higher in first nine months of 2022

Revenues: +17.7% to € 1,165.6 million (+29.4% in third quarter)

Sales higher in all geographical areas and business units

EBITDA: +5% to € 151.3 million, equal to 13% of revenues

Net income: € 33.0 million (-€ 2.0 million in first nine months of 2021)

Free Cash Flow positive for € 31.6 million (€ 25.1 million in first nine months of 2021)

Reduction in debt before IFRS 16 to 219.7 million (€ 267.4 million at 30.9.2021)

Milan, 21 October 2022 -The Board of Directors of Sogefi S.p.A., which met today under the chairmanship of Monica Mondardini, has approved the interim report on operations of the group as of 30 September 2022, presented by chief executive officer Frédéric Sipahi.

Sogefi, a company of the CIR Group, is one of the main producers worldwide of automotive components in three sectors: Air and Cooling, Filtration and Suspensions.

PERFORMANCE OF THE MARKET

In the third quarter of 2022 world car production recorded growth of 27.5% compared to the same period of 2021 (+38.4% in Europe), after falling by 1.8% in the first half of 2022 because of difficulties in sourcing parts and raw materials, which had already begun in 2021, and the effects of the conflict between Russia and Ukraine.

Thanks to the recovery in the third quarter, world motor vehicle production was up by 7.5% in the first nine months of 2022 compared to the same period of 2021, with increases in all geographical areas: +2.8% in Europe, +10.6% in NAFTA, +10% in Mercosur, +11.1% in China and +23.7% in India.

Despite the recovery in the first nine months of 2022, world car productions is still lower than it was in 2019, -8.9%, with Europe at -26.3%.

The trend of the market remains uncertain; S&P Global (IHS), a source commonly used in the sector, is forecasting growth in world car production compared to 2021 of 2.2% for fourth quarter 2022 and 6% for the whole year 2022.

SUMMARY OF SOGEFI’S PERFORMANCE IN THE FIRST NINE MONTHS OF 2022

The Group’s consolidated revenues grew by 17.7% compared to the first nine months of 2021: the rise in sales was due to the growth in production volumes (+3.4%), to the adjustment of selling prices to the increases in the cost of raw materials and to the evolution of exchange rates (at constant exchange rates the rise in revenues would be 11.7%).

The performance of the third quarter was particularly positive (+29.4%), even at constant exchange rates (+21%).

The economic results were positive and showed a distinct improvement:

  • EBITDA was higher at € 151.3 million, up from € 144.1 million in the first nine months of 2021;
  • EBIT came in at € 62.3 million (5.3% of revenues), and was up by 26% from € 49.4 million in 2021 (5% of revenues);
  • Net income came to € 33.0 million (in 2021 the net result was € 24.3 million for continuing operations and € 2.0 million including discontinued operations);
  • Business generated a positive free cash flow of € 31.6 million (€ 25.1 million in 2021);
  • Net debt (before IFRS 16) declined to € 219.7 million at 30 September 2022 from € 258.2 million at 31 December 2021.

Significant Investments were made in innovation with progress throughout the period:

  • The SOGEFI cabin filter CabinHepa+, which uses HEPA media (High Efficiency Particulate Air) and filters mechanically capturing particles that are 50 times smaller than a conventional cabin filter, was nominated product of the year in France;
  • At Marckolsheim in France the inauguration took place of the European E-Mobility Tech Center, which is equipped with the largest 3D printer in Europe and is devoted to the research and development of new products for E-mobility;
  • In September the innovative cooling plates for EV platforms were presented at the Novi Michigan Battery Show and received a great deal of customer interest.

In the first nine months of the year commercial activity was buoyant,with important contractsobtained even in the EV sector:

  • The Filtration division obtained contracts for the supply of air purification filters, oil and fuel module filters in Europe and India; 
  • The Suspensions division signed contracts in Europe for the supply of coil springs and stabilizer bars – the majority of which will be produced in Romania – and three new contracts for the supply of stabilizer bars for electric or plug-in hybrid vehicles. 43% of the total estimated value of the new contracts obtained in 2022 is for E-mobility platforms;
  • The Air and Cooling division obtained important contracts in NAFTA, Europe and China for the supply of thermal management products and cooling plates for electric mobility. 54% of the total value of these new contracts is for E-mobility platforms.

Moreover, in line with ESG strategiesfor reducing energy from non-renewable sources, Sogefi has installed photovoltaic panels at its plants in Nules (Spain) and Pune (India) with the aim of mitigating its impact on climate change. These solar panels will make it possible to cover approximately 20% of the energy requirements of the plants involved.

CONSOLIDATED RESULTS FOR THE FIRST NINE MONTHS OF 2022

Revenues for the first nine months of 2022 came in at € 1,165.6 million, posting growth of 17.7% compared to the same period of 2021.

The increase at constant exchange rates was 11.7%: sales volumes were up by 3.4% on those of the first nine months of 2021 and the remaining part of the increase reflects the adjustment of the selling prices of the various product lines to the evolution of the costs of raw materials and of the components used.

All geographical areas reported growth: +7.4% in Europa, +30.6% in North America (+17.4% at constant exchange rates), +57.4% in South America (+19.8% at constant exchange rates, net of inflation in Argentina), +27.9% in Asia (+17.6% at constant exchange rates).

Suspensions reported an increase in revenues of 24.1% (+16.7% at constant exchange rates), with significant growth rates particularly in South America, North America and India.

Filtration reported an increase in revenues of 16.8% (+12.8% at constant exchange rates), thanks to the good performance of the after-market channel in Europe and of business activity in North America and India.  

Air and Cooling reported an increase in revenues of 11.9% (+4.8% at constant exchange rates), negatively affected by a decline in Europe, which in 2021 had realized a non-recurring gain on the sale of a special project.

EBITDA, amounting to € 151.3 million, rose by 5% from € 144.1 million in the first nine months of 2021; the EBITDA/Revenues ratio declined to 13% from 14.6% in the first nine months of 2021.

In order to understand the evolution of profitability, it is necessary to consider that the higher costs for materials and energy have been offset by the rise in selling prices; however, the increase by the same amount in revenues and in the cost of materials used has caused a dilution of the profitability index.

The contribution margin has risen by 3.8% compared to the first nine months of 2021, in line with the increase in volumes sold, and the ratio of the contribution margin/revenues % has declined to 27.7% from 31.4% for the first nine months of 2021 as a result of the dilution effect described above.

The impact of fixed costs on revenues has declined from 16.4% in the same period of 2021 to the current 14.5%.    

EBIT came to € 62.3 million (5.3% of revenues) and was up by 26% from € 49.4 million in 2021 (5% of revenues).

Financial expense, totalling € 13.6 million, was in line with the figure for the first nine months of 2021 (€ 13.4 million).

Tax expense increased to € 14.5 million (€ 13.2 million in 2021).

Income from operating activity came in at € 34.2 million, up from € 24.3 million in the first nine months of 2021.

No results were reported for discontinued operations or operations held for sale, while in the same period of last year the sale of the Filtration branches in Brazil and Argentina gave a negative accounting result of € 24.7 million. The group reported net income of € 33.0 million (€ -2.0 million in the first nine months of 2021).

Free Cash Flow was a positive € 31.6 million, up from € 25.1 million in the first nine months of 2021. The increase reflects the positive evolution of results and the change in working capital in the period, which was less unfavourable than the first nine months of 2021 because there was greater use of factoring.   

At 30 September 2022 shareholders’ equity, excluding minority interests, amounted to € 248.5 million versus € 187.7 million at 31 December 2021. The rise reflects the net result for the period, positive currency translation differences, actuarial gains, the fair value of cash flow hedging instruments, and other changes.

Net financial debt before IFRS 16 stood at € 219.7 million at 30 September 2022, lower than at the close of 2021 (€ 258.2 million) and at 30 September 2021 (€ 267.4 million). Including financial payables for rights of use, as per IFRS 16, net debt at 30 September 2022 totalled € 292.7 million, down from € 327.6 million at 31 December 2021.

At 30 September 2022 the Group had committed credit lines in excess of its requirements for € 294.0 million.

SUMMARY OF THE RESULTS FOR THIRD QUARTER 2022

In the third quarter of 2022, Sogefi reported revenues of € 409.6 million, posting an increase of 29.4% (+21% at constant exchange rates), thanks to the market recovery, the adjustment of selling prices and the positive effect of exchange rates. The dynamics of revenues, even at constant exchange rates, was particularly positive and outperformed the market in Asia and North America.

EBITDA came in at € 51.5 million, 12.6% of revenues, versus € 35.8 million in the third quarter of 2021 (11.3% of revenues).

EBIT was a positive € 21.8 million (€ 2.1 million in third quarter 2021).

Net income from operating activities was € 13.1 million (€ -2.1 million in third quarter 2021).

The consolidated net result was € 12.2 million compared to € -23.4 million in the third quarter of 2021, which suffered a negative accounting charge of € 21.2 million on the sale of the filtration business in Argentina.

SIGNIFICANT EVENTS THAT HAVE TAKEN PLACE SINCE 30 SEPTEMBER 2022

Since the close of the period, there have been no significant events that could have an impact on the economic, patrimonial or financial information contained in this press release.

IMPACT OF COVID-19 AND THE RUSSIAN-UKRAINE CONFLICT ON THE BUSINESS

In 2022, despite the continuing pandemic, there has been no suspension of industrial or commercial activity except for the lockdowns in certain areas of China. The Sogefi Group has maintained all the rules for health and safety in the workplace aimed at reducing the risk of contagion: social distancing, the use of individual protection and measures aimed at limiting the presence of personnel in the workplace by having staff work from home. Despite this, staff absences due to contagion or to contact with the virus have continued, causing operating difficulties.  

As for the consequences of the conflict between Russia and Ukraine, it should be noted that in March 2022 the Group ceased its commercial activity in Russia and exports to Ukraine and Belarus; the total revenues of the above activities were not significant (in 2021 they accounted for 0.7% of the Group’s revenues) and thus the loss of revenues has been irrelevant. However, discontinuing business in Russia meant recognizing losses in the value of assets held in that country of € 0.9 million.

In more general terms, the Group, like all of the automotive sector, is feeling the indirect effects of the war particularly the further hikes in the prices of energy and raw materials and the sourcing difficulties.

Lastly, as a combined effect of the pandemic crisis that is still not over and of the Russian-Ukrainian conflict, with a significant impact on important European customers for whom the Russian market was important, demand in Europe has not recovered as expected.  

OUTLOOK FOR THE YEAR

Visibility as to the performance of the automotive market in the fourth quarter of 2022 remains limited because of the uncertainty linked to the conflict between Russia and Ukraine, the macroeconomic scenario, the availability and prices of raw materials and energy, and the logistics of transportation and sourcing from Asian markets.

For 2022, S&P Global (IHS) expects higher volumes to continue in the fourth quarter too and is forecasting growth in world car production of 6% for the whole year compared to 2021 with Europe at +5.4%, NAFTA at +10.9%, South America at +6.7% and China at +6.4%.

As for the prices of raw materials, as from April the rising trend of steel prices came to an end while the prices of other materials such as resin and energy prices continue to rise.  

It should be noted that in the first nine months of 2022 the selling prices of Sogefi’s products were adjusted to factor in the higher costs of raw materials recorded in 2021 and at the beginning of 2022. Given the further rises in the cost of certain raw materials and energy, Sogefi’s management is continuing in its commitment to reaching fair agreements with all its customers with the aim of continuing commercial relationships that are sustainable in the long term.

Assuming that there are no other factors that could seriously worsen the macroeconomic and production scenario (a significant tightening of the sanctions imposed on Russia, a deterioration of the Russian-Ukrainian conflict, further shortages and higher prices of energy and raw materials than current ones, such that could compromise the sustainability of the supply chain, further lockdowns), Sogefi expects to achieve an operating result for the whole year 2022, excluding non-recurring charges, that is at least in line with the result for 2021.

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- 11:18 CEST

Shareholders Meeting

Milan, 12 September 2022 – The Shareholders’ Meeting of CIR S.p.A. – Compagnie Industriali Riunite (“CIR” or the “Company”), which met today in an extraordinary and ordinary session and was chaired by Mr Rodolfo De Benedetti, approved the following:

  • the cancellation of 170,000,000 (one hundred seventy million) ordinary shares with no indication of par value, maintaining the amount of share capital unchanged, and the related amendment to article 4.1 of the Bylaws in the part that establishes the number of shares representing the share capital; following the cancellation, the number of shares making up the share capital is fixed at 1,107,207,314 and the number of treasury shares owned by the Company, based on the survey of last 9 September, is equal to 191,176,395, representing 14.97% of the share capital; the cancellation and the correlated amendment to the Bylaws will be effective upon registration of the relative resolution in the Company Registry;
  • the reduction of the share capital from Euro 638,603,657 to Euro 420,000,000 and, therefore, for a total amount of Euro 218,603,657, allocating the latter amount to the creation of an available reserve, without proceeding to any reimbursement of capital to shareholders and therefore without any change in the Company’s shareholders’ equity, and the related amendment to Article 4.1 of the Bylaws in the part that establishes the amount of the share capital; said reduction shall be executed, in accordance with the provisions of Article 2445 of the Italian Civil Code, only after ninety days from the date of the resolution of the Shareholders’ Meeting, in accordance with Article 2445 of the Italian Civil Code, only after ninety days from the date of registration in the Company Registry, provided that no corporate creditor prior to the registration has filed an objection within this term;
  • the revocation, for the part not used and for the period between the day after today’s Shareholders’ Meeting and its natural expiry, of the resolution authorizing the buy-back of own shares approved by the Ordinary Shareholders’ Meeting of April 29 2022 and the related authorization to dispose of them, and a new authorization for the Board of Directors, starting from the day after this Shareholders’ Meeting and for a period of eighteen months, to buy back CIR shares under the following terms:
    • a maximum of 220,000,000 shares may be bought back bearing in mind that, including in the count treasury shares already held also through subsidiaries, the number of shares bought back may in no case shall exceed a total number of shares representing one fifth of the share capital of CIR;
    • the unit price of each individual purchase shall not deviate by more than 15%, either downwards or upwards, from the reference price recorded by the shares of the Company on the trading session prior to each individual transaction or prior to the date on which the price is fixed in the case of purchases according to the procedures set out in points (i) (iii) and (iv) of the following paragraph, and in any case, if the purchases are made with orders on the regulated market, the price must not be higher than the higher of the price of the last independent transaction and the price of the highest current independent bid on the same market;
    • the purchase must be made on the market, in compliance with the provisions of Article 132 of Legislative Decree no. 58/98 and the provisions of law or regulations in force at the time of the transaction, and specifically (i) by means of a public purchase or exchange offer; (ii) on regulated markets in accordance with the operating procedures set forth in the regulations for the organisation and management of the markets themselves, which do not allow for the direct matching of trading proposals for purchase with predetermined trading proposals for sale (iii) through the proportional allocation to shareholders of put options to be assigned within 15 months of the date of the shareholders’ authorisation resolution and exercisable within 18 months of the same; (iv) through the purchase and sale of derivative instruments traded on regulated markets that provide for the physical delivery of the underlying shares, complying with the additional provisions of Article 144-bis of the Issuers’ Regulations issued by Consob, as well as pursuant to Articles 5 and 13 of EU Regulation 596/2014.

As previously disclosed to the market, the aforementioned transactions resolved by the Shareholders’ Meeting have the following main objectives i) to reconstitute a certain amount of available reserves within the Company such as to allow, in the future, greater flexibility in the use of the financial resources available within the group and not used in operating management or at the service of operating equity investments ii) restoring the necessary flexibility with a view to being able to carry out distribution transactions also through the purchase of treasury stock to be assessed from time to time by the Board of Directors of CIR in office pro tempore (if obviously such transactions represent an opportunity to create value for all shareholders), on the basis of the updated information available and after weighing up a series of elements – such as, for example, the situation of the group and of the companies of which it is composed, their business plan, the strategic options available – all of which are useful to enable any further resolution to be consciously consistent with the strategic and financial framework of the company and the markets.

The minutes of the Extraordinary and Ordinary Shareholders’ Meeting and the summary report of the voting will be made available on the Company’s website – Governance/Meetings Section – within the terms provided for by the regulations in force.

Meeting of the Board of Directors

Subsequent to the Shareholders’ Meeting, the Board of Directors resolved on the further continuation of the share buyback plan initiated on 16 March and renewed on 29 April currently in progress, in compliance and execution of the authorisation just conferred by the Ordinary Shareholders’ Meeting.

The characteristics of the treasury share purchase plan (the “Buyback Programme”) approved today by the Board of Directors are as follows:

  • purposes and methods through which the purchases may be carried out: the Buyback Programme will be implemented for the purposes set forth in Article 5, paragraph 2, letter a), of the MAR and the aforementioned authorisation of the Shareholders’ Meeting, and the individual purchases must be carried out in compliance with Article 132 of the TUF, Article 144-bis, paragraph 1, letter b), of CONSOB Regulation No. 11971/99, as well as in compliance with Article 5 of the MAR and Delegated Regulation (EU) 2016/1052;
  • maximum amount in cash allocated to the Buyback Programme and maximum number of shares to be purchased: the purchases will be made, also in part and/or in instalments, for a total outlay of up to a maximum of Euro 110,000,000.00 (and in any case within the maximum limit of the reserves available under the terms of Article 2357 of the Italian Civil Code.) and in any case no more than the limit identified in the aforesaid authorization and equal to 220,000,000 shares of CIR (equal to approximately 19.86% of the share capital of CIR following the cancellation of 170,000,000 treasury stock approved today by the Extraordinary Shareholders’ Meeting), subject however to the limit of 20% of the share capital;
  • duration of the Buyback Programme: in line with the authorisation granted today by the Extraordinary Shareholders’ Meeting, the Buyback Programme will end on 12 March 2024 (unless revoked);
  • minimum and maximum price: the purchases must be made in accordance with the limits established by Delegated Regulation (EU) 2016/1052, it being understood that – in accordance with the aforementioned authorization of the Shareholders’ Meeting of the Company of April 30, 2021 – the purchase price may not deviate by more than 15% below or above the reference price recorded by CIR stock on the session of Euronext Milan, organized and managed by Borsa Italiana S.p.A, on the day prior to the completion of each individual purchase transaction and in any case the consideration must not be higher than the highest price between the price of the last independent transaction and the price of the highest current independent bid on the same market, in accordance with the provisions of Article 3 of Regulation (EU) 2016/1052;
  • market: the acquisitions will be carried out on Euronext Milan, organised and managed by Borsa Italiana S.p.A..

For the purposes of the execution of the Buyback Program, CIR has signed a “contract for trading on the market in execution of the share buyback resolution” with Equita SIM S.p.A., which will therefore continue to act as the intermediary appointed to carry out the buyback of treasury shares under the Buyback Program. The appointed intermediary will make purchasing decisions in full independence, also in relation to the timing of transactions and in compliance with the price limits identified by the Board of Directors and the Shareholders’ Meeting.

The transactions carried out will be disclosed to the market within the terms and in the manner set forth in the laws and regulations in force.

The Company is not obliged to complete the Programme, which may therefore be suspended, interrupted or modified at any time, for any reason whatsoever, in compliance with the laws and regulations in force.

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- 13:26 CEST

CIR: results for first half 2022

  • Revenues at € 1,102.5 million, up by 10.4% from first half 2021
  • Positive results for Sogefi, results of KOS in recovery, results of financial management affected by the negative performance of the financial markets
  • Net income at break-even, negatively affected by the adjustment of fair value of the financial asset portfolio
  • Reduction of consolidated net debt of the operating subsidiaries
  • Net financial position of the parent company positive for € 313.3 million, after the disbursement of € 84.2 million for the buyback of own shares and despite the impairment recorded by the portfolio of financial investments in the current market situation

Milan, 29 July 2022 – The Board of Directors of CIR S.p.A. – Compagnie Industriali Riunite (“CIR” or the “Company”), which met today under the chairmanship of Rodolfo De Benedetti, has approved the Semi-Annual Financial Report as of 30 June 2022 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

In the first half of 2022 the Company and its investees were operating in a complex environment due to the effects of the still ongoing pandemic, which have a direct impact on the social healthcare sector, to the increases in the cost of raw materials and energy, which affect the automotive sector, and the negative performance of the financial markets, which have had an impact on the results of the group’s investment portfolio. The conflict between Russia and Ukraine has worsened the critical issues already present in relation to raw materials, energy, the financial markets and the weakness of certain economic sectors in Europe.

Against this backdrop, KOS continued to see a recovery of its activities which began in the second quarter of 2021, after the fall caused by the pandemic, and Sogefi managed effectively the many critical factors that impacted the market; while the results of financial management suffered the inversion of the trend in the markets, suffering losses in value across all of the main asset classes.

The consolidated revenues of the Group came in at € 1,102.5 million and were up by 10.4% on the first half of 2021, with positive dynamics in both sectors of the group’s business activities.  

The group reported a net result at break-even (-€ 0.2 million) versus net income of € 21.6 million in the first half of 2021. The decline was due to the lower returns on the financial investment portfolio, with the financial companies of the group (CIR, CIR International and CIR Investimenti) contributing a negative € 10.2 million to the consolidated net result after a positive contribution of € 9.3 million in the first half of 2021.

Consolidated net financial debt before IFRS 16 stood at € 95.6 million at 30 June 2022 compared to € 85.6 million at 31 December 2021 and € 41.4 million at 30 June 2021:

  • The net debt of the subsidiaries declined to € 408.9 million from € 418.0 million at 31 December 2021 and € 446.4 million at 30 June 2021;
  • The net financial position of the Parent Company (including the subsidiaries CIR Investimenti and CIR International) remains very positive at € 313.3 million and the reduction compared to 31 December 2021 (€ 332.4 million) and 30 June 2021 (€ 405.0 million) was due mainly to the buyback of own shares for € 84.2 million over the last 12 months and to a lesser extent to the impairment losses recorded by the financial investment portfolio in the current market situation.  

Consolidated net debt, including IFRS 16 payables, stood at € 969.8 million at 30 June 2022, and included € 874.2 million for rights of use that refer mainly of the subsidiary KOS (€ 805.3 million), which operates in premises that are generally leased.

The Group’s equity amounted to € 749.4 million at 30 June 2022 (€ 740.4 million at 31 December 2021).

KOS

In 2020 the Covid-19 pandemic had a significant impact on the activities of KOS, leading to a reduction in the number of guests entering the nursing homes and in the services provided in the rehabilitation units. The recovery began in the middle of 2021 and was confirmed in the first half of 2022, although pre-pandemic levels have not yet been reached.

In the first half of 2022, the Group’s revenues came to € 346.5 million, posting a rise of 6.5% on the same period of the previous year, thanks particularly to the recovery in the nursing home sector in Italy (+16.2%) and in Germany (+5.2%).

Recurring EBIT rose from € 8.3 million to € 11.5 million (total EBIT for first half 2021 came to € 20.9 million and included non-recurring income of € 12.6 million).

Sogefi

In the first half of 2022 the market continued to have difficulty in the sourcing of raw materials and components (which even caused the temporary closure of certain of the principal car manufacturers’ production facilities worldwide) and rises in the prices of raw materials and energy, made worse by the conflict between Russia and Ukraine. World car production fell by 1.8% compared to the first half of 2021, with Europe at -7.6%, China and Mercosur in line (at +0.7% and -0.6% respectively), and NAFTA and India recovering (+4.7% e +16.4% respectively).

In this scenario, Sogefi reported revenues 12.3% higher than in the first half of 2021, due to the rise in selling prices to bring them into line with the cost of raw materials, and to the trend of exchange rates; production and sales volumes were substantially in line with first half 2021 with a positive performance compared to the market (-1.8%).

Recurring EBIT for the first half of the year was in line with that of the same period of 2021; total EBIT came to € 40.4 million versus € 47.3 million in 2021 because of higher restructuring costs (€ 4.1 million compared to € 1.3 million in the first half of 2021) and lower non-operating income (€ 3.9 million versus € 9.4 million in 2021).

The Group reported net income of € 20.8 million, in line with that of the first half of 2021, which was € 21.4 million.

Net debt (before IFRS 16) fell to € 216.4 million at 30 June 2022 from € 258.2 million at 31 December 2021 and € 261.4 million at 30 June 2021.

The first half of the year was positive for commercial activity too: the Filtration division was awarded various contracts for the supply of oil and air filters; the Air and Cooling division signed important contracts in NAFTA and Europe for the supply of thermal management products and cooling plates for electric mobility; the Suspensions division obtained contracts for components that will be produced in the new facilities in Romania and in China, even for electric vehicles. Despite the market challenges of the last two years, Sogefi has always been able to meet the needs of its clients, confirming its image of a supplier capable to deliver high quality products, with reliable service levels.

Financial management

In the first half of 2022 the impact on the markets of the war in progress and the rise in interest rates, decided on by the central banks to counter inflationary effects, was negative for all asset classes. Management of the financial assets of the parent company and the financial subsidiaries therefore reported a negative net result of € 5.1 million for adjustments made to the fair value of assets, with a return for the first half of –1.3% after income of € 12.4 million in the first half of 2021. In particular, the overall return on cash equivalent assets (shares, bonds, hedge funds) was -2.5%, while the remaining part of the portfolio (private equity and minority shareholdings) gave a positive return of 3.8%.

Significant events that have taken place since 30 June 2022

Since the close of the period there have been no significant events that could have an impact on the economic, patrimonial or financial information reported.

Outlook for the year

Visibility as to the performance of the Group’s businesses in coming months remains limited given the continuing uncertainty about the evolution of the pandemic (which has a direct effect on the healthcare sector in particular), the Russian-Ukrainian conflict, the commodity and energy markets (which affect mainly the automotive sector) and the financial markets.

As far as KOS is concerned, thanks to the vaccination plan, there are expected to be less critical operational issues linked to the evolution of the pandemic. In this case the forecasts predict that the Rehabilitation and Acute services could return to pre-Covid levels already this year. For the nursing homes in Italy and Germany the time needed to return to full occupancy of the care homes is expected to be structurally longer, lasting at least until 2023. The company is in the process of performing an in-depth analysis of service models, in light of technological innovations and of the needs of its patients.

As for Sogefi, visibility as to the performance of the automotive market is limited because of the uncertainty about the macroeconomic scenario and how the public health situation will evolve, the conflict between Russia and Ukraine, the availability and prices of raw materials, and the logistics of transportation and sourcing from Asian markets. However, for 2022 S&P Global (IHS) is continuing to forecast 4.7% growth in world car production compared to 2021, with Europe at +10.7%, Nafta at +12.7%, South America at +6.9% and China remaining substantially stable (+0.4%). As for commodity prices, the first six months of 2022 saw further price rises and it is difficult to make forecasts for the second half of the year; the selling prices of Sogefi’s products have been adjusted to factor in these rises and after the further commodity and energy price rises since the start of the Russian-Ukrainian conflict, Sogefi’s management is committed to reaching fair agreements with all its customers, as it did in the first half of the year, in order to continue commercial relationships that are sustainable in the long term.

Assuming that there are no factors or circumstances that could make the scenario even more complex than it is at present, the operating results of Sogefi and KOS for the whole year should be at least in line with those of last year.

As for the management of the financial assets of the holding company, given the uncertainty surrounding the geopolitical, macroeconomic and financial scenario, the second part of the year is expected to be just as volatile as the first half was. Despite the prudent management profile adopted, further impairment of the financial instruments in the portfolio cannot be ruled out. 

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- 14:45 CEST

Sogefi: results for first half 2022

Revenues at € 760.0 million, up by 12.3% on first half 2021

EBITDA at € 99.8 million, equal to 13.2% of revenues

Net income at € 20.8 million, in line with first half 2021 (€ 21.4 million)

Free Cash Flow positive for € 41.2 million,

higher than in first half 2021 (€ 33.1 million)

Debt lower at € 216.4 million (€ 261.4 million at 30.6.2021)

Raffaella Pallavicini appointed director

Milan, 22 July 2022 – 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 30 June 2022, as presented by Chief Executive Frédéric Sipahi.

Sogefi, a company of the CIR Group, is one of the main automotive component producers worldwide in three sectors: Air and Cooling, Filtration and Suspensions.

PERFORMANCE OF THE MARKET

The first half of 2022 saw the difficulty in sourcing specific components and raw materials continue (even causing the temporary closure of certain of the principal car manufacturers’ production facilities worldwide) while commodity prices continued to rise. As from March 2022 the effects of the conflict between Russia and Ukraine and of the economic and financial sanctions imposed on Russia began to be felt, particularly the decline in world trade and further rises in the prices of energy and raw materials.

Against this backdrop, world car production fell by 1.8% in first half 2022 compared to the first half of 2021.

Europe reported the most critical performance: -7.6% compared to first half 2021; in China and Mercosur production in the first half was broadly in line with that of the first half of 2021 (+0.7% and -0.6% respectively), while NAFTA and India experienced a recovery (+4.7% and +16.4% respectively).

The trend of the market remains uncertain; S&P Global (IHS) expects to see growth in world production of 4.7% for the whole year compared to 2021, with +11.5% in the second half compared to second half 2021, after the -1.8% of the first half.

SUMMARY OF SOGEFI’S PERFORMANCE IN THE FIRST HALF OF 2022

The Group’s consolidated revenues grew by 12.3% compared to the first half of 2021: production volumes were substantially in line with 2021 (a positive performance compared to the market’s -1.8%) and the rise in revenues was due to the evolution of exchange rates and to the adjustment of selling prices to the higher costs of raw materials.

Worthy of note is the positive performance of the After Market segment, which gained market share thanks to its ability to respond adequately to client requirements, despite difficulties in the logistics chain.  

The economic results were positive:

  • Net income came in at € 20.8 million (€ 21.4 million in 2021);
  • Free cash flowwas a positive € 41.2 million (€ 33.1 million in 2021);
  • Net debt (before IFRS 16) declined to € 216.4 million at 30 June 2022, versus € 258.2 million at 31 December 2021.

From the product innovation viewpoint, SOGEFI’S CabinHepa+ cabin filter, which uses HEPA (High Efficiency Particulate Air) media and filters the air mechanically, capturing particles 50 times smaller than a conventional cabin filter, was nominated product of the year 2022 in France. The inauguration took place of the new European E-Mobility Tech Center in Marckolsheim, Eastern France, which is devoted to the research and development of new E-mobility products and is equipped with the largest 3D printer in Europe.

The first half was also positive for commercial activity:

  • The Filtration division was awarded various contracts for the supply of oil filters and air purification filters;
  • The Suspensions division signed contracts in Europe for the supply of coil springs and stabilizer bars and also won a contract for the supply of stabilizer bars to an important Chinese company that is entering the electric vehicle market;
  • The Air and Cooling division signed some important contracts in NAFTA and Europe for the supply of thermal management products and cooling plates for electric mobility and the most important contract ever obtained with a producer of electric commercial vehicles and buses for the production of cooling plates in aluminium soldered using laser technology to regulate the temperature of the battery, integrated cooling modules and regulation and vent valves for the battery.

CONSOLIDATED RESULTS FOR THE FIRST HALF

The revenues of first half 2022 came in at € 756.0 million and were up by 12.3% on those of the same period of 2021.

Production volumes were substantially in line with those of the first half of 2021 and the Group outperformed the market (which declined by 1.8% globally and by 7.6% in Europe).

The trend of exchange rates, particularly the weakness of the euro and the consequent strengthening of the US and Canadian dollars and the Chinese renminbi, led to a rise in consolidated revenues of 2.9 percentage points. The remaining increase in revenues reflects the adjustment of selling prices across the different product lines to factor in the evolution of the cost of raw materials and the components used.   

Performance of revenues by geographical area

The Suspensions business unit reported a rise in revenues of 14.1% (+13.2% at constant exchange rates), with significant growth rates particularly in South America.

The Filtration business unit reported a rise in revenues of 15.3% (+12% at constant exchange rates), thanks to the good performance of the After Market channel in Europe and of business in North America and India.

The Air and Cooling business unit reported a rise in revenues of 6.7% and of 1.1% at constant exchange rates due to the negative performance of the Chinese market and particularly to the lockdowns in some areas in April and May when the pandemic flared up again.

EBITDA came to € 99.8 million, compared to the first half 2021 (€ 108.3 million), recurring EBITDA is stable but some non-recurring factors weighed on the result: particularly higher restructuring costs (€ 4.1 million versus € 1.3 million in first half 2021) and lower non-operating income (€ 3.9 million versus € 9.4 million at 30 June 2021).

EBIT came in at € 40.4 million versus € 47.3 million in 2021.

The Group reported net income of € 20.8 million, in line with that of the first half of 2021, which was € 21.4 million.

Free Cash Flow was a positive € 41.2 million, compared to € 33.1 million in first half 2021, thanks to the positive results and to the management of working capital, the change in which was more favourable in this period compared to that of the first half of 2021, also due to greater use of factoring.

Net debt before IFRS 16 stood at € 216.4 million at 30 June 2022, lower than at the end of 2021 (€ 258.2 million) and at 30 June 2021 (€ 261.4 million). Including the financial payables for rights of use as per IFRS 16, the net financial debt of the Group at 30 June 2022 amounted to € 285.2 million, down from € 327.6 million at 31 December 2021.

At 30 June 2022 the Group had committed credit lines in excess of its requirements for € 302.0 million.

At 30 June 2022 shareholders’ equity, excluding minority interests, stood at € 230.3 million, up from € 187.7 million at 31 December 2021. The increase of € 42.6 million was due mainly to the net income for the period (€ 20.8 million), to currency translation differences and to actuarial gains on the valuation of pension funds.

SIGNIFICANT EVENTS THAT HAVE TAKEN PLACE SINCE 30 JUNE 2022

Since the close of the first half of the year there have been no significant events that could have an impact on the economic, patrimonial and financial information given in this report.

IMPACT OF COVID-19 AND THE RUSSIAN-UKRAINIAN CONFLICT ON THE BUSINESS

In 2022, despite the continuation of the pandemic crisis, the effects on the market in which the Company operates have been less severe than those recorded in previous years, as there has been no suspension of industrial or commercial activity except for the lockdowns in certain areas of China in April and May.

However, operational difficulties linked to personnel absences due to infection or contact have been continuing in spite of the fact that Sogefi has maintained all the rules for health and safety in the workplace aimed at reducing the risk of contagion: social distancing, the use of individual protection and measures aimed at limiting the presence of personnel in the workplace by having staff work from home.  

As for the direct impact on Sogefi of the conflict between Russia and Ukraine, until March 2022 Sogefi had a commercial business in Russia and exported to Ukraine and Belarus; the total revenues from these activities were not signficant as they accounted for 0.7% of the Group’s revenues in 2021. The businesses in Russia, Ukraine and Belarus were discontinued as from March 2022 and the Russian branch is in the process of being wound up. As a result, in the first half of 2022 Sogefi reported losses in value of the assets held in Russia for an amount of € 1.3 million, while the direct impact on revenues and margins was minimal.

Sogefi, like all of the automotive sector, is feeling the indirect effects of the war and particularly the further hike in energy prices and commodities and the sourcing problems.

Lastly, as a combined effect of the pandemic crisis that is still ongoing and of the Russian-Ukrainian conflict , with a significant impact on important European customers for whom the Russian market was important, demand in Europe has been weak.  

OUTLOOK FOR THE YEAR

Visibility as to the performance of the automotive market in the coming months of 2022 is limited because of the uncertainty about the macroeconomic scenario and how the public health situation will evolve, the conflict between Russia and Ukraine, the availability and prices of raw materials, and the logistics of transportation and sourcing from Asian markets.   

However, for 2022 S&P Global (IHS) is continuing to forecast 4.7% growth in world car production compared to 2021, with Europe at +10.7%, Nafta at +12.7%, South America at +6.9% and China remaining substantially stable (+0.4%).

As for commodity prices, the first six months of 2022 saw further price rises and it is difficult to make forecasts for the second half of the year. It should be noted that in the first half of 2022 Sogefi’s selling prices were adjusted to take into account the rise in the cost of raw materials recorded in 2021 and at the beginning of 2022. Given the further commodity and energy price rises since the start of the Russian-Ukrainian conflict, Sogefi’s management is committed to reaching fair agreements with all its customers, as it did in the first half of the year, in order to continue commercial relationships that are sustainable in the long term.

Assuming that there are no factors that could worsen the macroeconomic and production scenario (a significant tightening of the sanctions imposed on Russia, an extension of the conflict outside of Ukraine, shortages and higher prices of energy and raw materials than current ones, such that could compromise the sustainability of the supply chain, further lockdowns), Sogefi hereby confirms its objective of achieving an operating result for the whole year 2022, excluding non-recurring charges, that is substantially in line with the result of 2021.

RAFFAELLA PALLAVICINI NEW DIRECTOR OF SOGEFI

The General Meeting of the shareholders of Sogefi S.p.A., held today in Milan in an ordinary session, approved an increase in the number of directors of Sogefi from eight to nine and appointed Ms Raffaella Pallavicini as director until the mandate of the current Board of Directors comes to an end, i.e. until the date on which the financial statements for the year 2024 are approved by the Annual General Meeting of the Shareholders. Ms Raffaella Pallavicini’s candidature was put forward by the majority shareholder CIR S.p.A. – Compagnie Industriali Riunite, holder of 55.64% of the voting rights. Her curriculum vitae is available on the website www.sogefigroup.com.

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- 13:13 CEST

CIR: AGM approves Financial Statements for 2021

Milan, 29 April 2022 – The Annual General Meeting of the Shareholders of CIR S.p.A. was held today in Milan in an ordinary session under the chairmanship of Rodolfo De Benedetti.

As per the terms of Art. 106, paragraph 4, of Decree Law no. 18 of 17 March 2020, the Shareholders were able to attend exclusively through the designated representative, appointed in accordance with Art. 135-undecies of D.Lgs. no. 58 of 24 February 1998 (TUF) and identified as Studio Segre S.r.l., to whom proxies/sub-proxies were also assigned under Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph 4, of the same TUF.

Approval of the Financial Statements for 2021

The Shareholders approved CIR’s financial statements for the year 2021. The group closed the year with consolidated revenues of € 1,980.7 million (€ 1,821.8 million in 2020) and net income of € 18.0 million. The parent company CIR S.p.A. reported net income of € 2.1 million.

The Shareholders approved the proposal of the Board of Directors not to distribute any dividends.

Remuneration policy and stock grant plan

The Shareholders approved the first section of the “Report on remuneration policy and compensation paid” and expressed a majority vote in favour of the second section of the same report.

The Meeting also approved the Stock Grant Plan for 2022, aimed at directors and/or executives of the Company and its subsidiaries for a maximum number 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 assigned will be made available from the treasury shares held by the Company. The plan has the aim of aligning the interests of management with the objectives of creating value for the group and its shareholders over a medium-long term time horizon and of encouraging those holding key positions to remain with the group.

Authorization to buy back own shares 

The Shareholders’ Meeting gave the Board of Directors an authorization, valid for a period of 18 months, to buy back a maximum of 76,016,488 own shares, and in any case up to 5.95% of the total number of shares constituting the share capital, at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the Company’s shares in the stock exchange trading session preceding each individual buyback transaction or preceding the date on which the price is fixed. In the event of purchases made according to the procedures set out in points (i), (iii) and (iv) of the following paragraph and in any case when the purchases are made 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 in the same market.

The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) on regulated markets following operating procedures established in the rules for organizing and managing the said markets, which do not allow bids and offers to be matched directly; (iii) through the assignment pro-rata of put options to the shareholders to be assigned within 15 months of the date of the AGM resolution authorizing the same with exercise within 18 months of the same resolution; (iv) through the purchase and sale of derivative instruments traded on regulated markets that involve physical delivery of the underlying shares in compliance with the further provisions contained in Art. 144-bis of the Rules for Issuers issued by Consob, and as per the terms of Articles 5 and 13 of the MAR.

The main reasons why this authorization is being renewed are the following: (a) to fulfil 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, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) to have a portfolio of own shares to use as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the scope of transactions of interest to the Company (a so-called “stock of securities”); (c) to engage in action to support market liquidity, optimize the capital structure and remunerate shareholders in particular market conditions, all within the limits established by current rules and regulations; (d)  to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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.

*****

Board of Directors Meeting

The Board of Directors of CIR resolved to continue the share buyback plan launched on 16 March 2022 and which is currently in progress, in accordance with and in execution of the authorization that it has just received from the Shareholders. The new resolution is for the buyback of no more than 76,016,488 own shares (equal to 5.95% of CIR’s share capital) without prejudice to the limit of 20% of the share capital and the other characteristics of the plan which were published on 11 March 2022 and on 15 March 2022.

As of 28 April 2022 CIR owned 185,881,760 treasury shares, representing 14.55% of the shares that constitute the Company’s share capital.

The Board of Directors and the Board of Statutory Auditors also verified that the Members who have declared themselves to be independent do in fact have the requisites to be considered as independent.  

Lastly, in accordance with the AGM resolution on the subject, the Board began implementing Stock Grant Plan 2022 by assigning 4,274,469 rights.

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- 19:00 CEST

Sogefi: AGM approves financial statements for 2021

SOGEFI: AGM APPROVES FINANCIAL STATEMENTS FOR 2021
BOARD OF DIRECTORS APPOINTED FOR THREE YEARS 2022-2024
MONDARDINI CONFIRMED AS CHAIRMAN AND SIPAHI AS CHIEF EXECUTIVE OFFICER

Independent directors Patrizia Arienti, Maha Daoudi and Massimiliano Picardi join the Board

Milan, 22 April 2022 – The ordinary Annual General Meeting of the Shareholders of Sogefi S.p.A. was held today under the chairmanship of Monica Mondardini.

Pursuant to Article 106, paragraph 4, of Italian Decree-Law no. 18 of March 17, 2020, shareholders exclusively participated in the Annual General Meeting of the Shareholders through the designated representative appointed pursuant to Article 135-undecies of Italian Legislative Decree no. 58 of February 24, 1998 (TUF) and identified in Studio Segre S.r.l., to which proxies/subproxies pursuant to art. 135-novies of the TUF have also been granted, as an exception to art. 135-undecies, paragraph 4, of the TUF.

Approval of the Financial Statements for 2021

The Shareholders approved the Financial Statements for the year 2021. Sogefi closed the year with consolidated revenues of € 1,320.6 million (€ 1,190.2 million in 2020), EBITDA of € 192.5 million (€ 137.0 million in 2020) and a positive net result of € 2.0 million (loss of € 35.1 million in 2020). The parent company of the group Sogefi S.p.A. reported a profit of € 69.9 million (loss of € 6.2 million in 2020).

The Shareholders approved the proposal put forward by the Board of Directors that no dividends be distributed.

Compensation Policy and Stock Grant Plan

The AGM approved the first section of the Report on Compensation and remuneration paid and expressed a majority vote in favour of the second section of the same Report.

The Shareholders also approved the stock grant plan for 2022 aimed at employees of the Group holding strategically important roles for a maximum of 1,000,000 conditional rights, each of which will give the beneficiaries the right to be assigned free of charge 1 Sogefi share. The shares thus assigned will be made available from the own shares held by the Company. The plan aims to align the interests of management with the objective of creating value for the Group and its Shareholders over a medium-long term time horizon, stimulating the commitment to achieving common objectives at Group level and encouraging those who hold key positions to remain with the Group.

Authorization to buy back own shares

The Annual General Meeting of the Shareholders renewed the proxy to the Board of Directors for a period of 18 months, with power to buy back a maximum of 10 million own shares at a unit price that cannot be more than 15% higher or lower than the benchmark price recorded by the Company’s shares on the trading day preceding each single buyback transaction or preceding the date on which the price is fixed in the event of purchases made in accordance with the procedures stated in points (a), (c) and (d) of the following paragraph, and in any case, when the shares are bought back through orders placed in the regulated market, the price must not be higher than the highest price of the last independent transaction and the highest current independent bid price on the same market.

The buyback must take place in the market, in compliance with the terms of Art. 132 of Italian Leg. Decree no. 58/98 and with the terms of the law and the rules in force at the moment of the transaction and more precisely (a) through a public tender offer to buy or exchange shares; (b) on regulated markets following operating procedures established in the rules for organizing and managing the said markets, which do not allow bids and offers to be matched directly; (c) through the assignment pro-rata of put options to the shareholders to be assigned within 15 months of the date of the AGM resolution authorizing the same with exercise within 18 months of the same resolution; (d) through the purchase and sale of derivative instruments traded on regulated markets that involve physical delivery of the underlying shares in compliance with the further provisions contained in Art. 144-bis of the Rules for Issuers issued by Consob, and as per the terms of Articles 5 and 13 of EU Regulation no. 596/2014.

The main reasons why this authorization is being renewed are the following: (i) to fulfil 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 S.p.A. or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (ii) to have a portfolio of own shares that can be used as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the sphere of transactions of interest to the Company (a so-called “stock of shares”); (iii) to engage in action to support market liquidity, optimize capital structure, and remunerate shareholders in particular market situations, all within the limits established by current rules and regulations; (iv) to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (v) 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.

As of today’s date, the Company is the owner of 1,993,372 own shares, equal to 1.66% of the share capital.

Appointment of the Board of Directors

The Annual General Meeting of the Shareholders appointed Patrizia Arienti, Maha Daoudi, Rodolfo De Benedetti, Mauro Melis, Monica Mondardini, Massimiliano Picardi, Frédéric Sipahi, Christian Georges Streiff as directors for the three-year period 2022-2024.

Seven directors were drawn from the list submitted by the majority shareholder CIR S.p.A. – Compagnie Industriali Riunite, holder of 55.637% of the voting rights, and one director, Massimiliano Picardi, was taken from the list submitted by minority shareholder Navig S.a.s. of Giorgio Zaffaroni, holder of 3.33% of voting rights. The curricula vitae of the directors are available on the website www.sogefigroup.com.

During the Annual General Meeting, Chairman Monica Mondardini and CEO Frédéric Sipahi thanked outgoing board members Patrizia Canziani, Roberta Di Vieto and Ervino Riccobon for their service at the Company.

Board of Directors Meeting

Following the Annual General Meeting of the Shareholders, the Board of Directors confirmed Monica Mondardini as Chairman and Frédéric Sipahi as CEO of the Company.

The Board verified that five directors out of a total of eight were independent. They are Patrizia Arienti, Maha Daoudi, Mauro Melis, Massimiliano Picardi and Christian Georges Streiff.

The Board of Statutory Auditors in its turn verified the presence of the requisites for the independence of its members.

The Board of Directors also defined the composition of the committees: the Appointment and Remuneration Committee is composed of the directors Mauro Melis, Massimiliano Picardi and Christian Georges Streiff, the Control, Risk and Sustainability Committee is composed of Patrizia Arienti, Maha Daoudi and Mauro Melis and the Committee for Related Party Transactions is composed of Patrizia Arienti, Mauro Melis and Massimiliano Picardi. Mauro Melis was appointed lead independent director.

Lastly, the Board, in accordance with the AGM resolution, implemented the 2022 stock grant plan for the first time, granting 995,000 rights.

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- 13:25 CET

CIR: results for the year 2021 and launch of share buyback plan

Revenues at € 1,980.7 million, up by 8.7% on 2020

Consolidated EBITDA at € 303.9 million (+34% from € 226.4 million in 2020

Net income at € 18.0 million (€ 16.3 million in 2020)

Reduction of consolidated net debt before IFRS 16 to € 85.6 million (€ 100.0 million at December 31 2020), despite disbursement of € 80.0 million for the Voluntary Public Tender Offer to buy back own shares

Net financial position of the parent company positive for € 332.4 million

Decision taken to launch a share buyback plan on the regulated market for a maximum equivalent of € 17.0 million

Milan, 11 March 2022 – The Board of Directors of CIR S.p.A. – Compagnie Industriali Riunite (“CIR” or the “Company”), which met today under the chairmanship of Rodolfo De Benedetti, has approved the proposed financial statements and the consolidated financial statements of the group for the year ended December 31 2021 as presented by Chief Executive Officer Monica Mondardini.

Consolidated results

In 2021 business in the sectors in which the CIR Group operates reported a distinct recovery compared to 2020, although there has not yet been a return to the levels prior to the spread of the Covid-19 pandemic.

KOS, which operates in social and healthcare services, after suffering a significant decline in its business in 2020 and first quarter 2021, from May onwards reported a gradual recovery thanks partly to the roll-out of the vaccination plan, which brought the Rehabilitation and Acute activities back to levels close to those of 2019, while the Nursing Home sector has not yet fully recovered either in Italy or in Germany.

Sogefi, active in the production of components for the automotive sector, in 2021 reported growth in revenues where it outperformed the market, recovering most of the decline in revenues of 2020, caused by the generalized temporary suspension of production activities and the collapse in demand due to the pandemic. Profitability and cash generation were higher than in the period preceding the public health crisis, thanks partly to the effective reorganization and cost-cutting plan that has been in place since 2020.

Management of the financial investment portfolio of the parent company reported high returns, due to the favourable performance of all the main financial markets during the year.

In 2021 some significant extraordinary transactions were carried out.

On 6 August 2021 CIR successfully concluded a Voluntary Partial Public Tender Offer to buy back 156,862,745 of its own shares, equal to 12.3% of its share capital, at a price of € 0.51 per share, for a total amount of € 80.0 million.

Sogefi completed the planned disposal of its filtration business in South America as part of its strategy for rationalizing its geographical presence and industrial footprint, with the aim of improving the efficiency and profitability of the group.

The consolidated revenues of the Group came to € 1,980.7 million, posting growth of 8.7% on 2020, thanks to the recovery in the business of both sectors in which the Group operates, and were in line with 2019 sales.

The consolidated gross operating margin (EBITDA) came in at € 303.9 million, equal to 15.3% of revenues, up from 12.4% in 2020 (€ 226.4 million) and was higher than that of 2019 (€ 272.0 million).

Consolidated EBIT came to € 80.9 million (€ 18.1 million in 2020).

The consolidated net result was a positive figure of € 18.0 million, despite the negative impact of € 13.9 million pro-rata from the sale of Sogefi’s Argentinian subsidiary (€ 16.3 million in 2020, with a net capital gain pro-rata of € 32.5 million generated by the sale of Medipass by KOS).

The consolidated financial debt before IFRS 16 was € 85.6 million at the end of the year 2021, lower than at December 31 2020 (€ 100.0 million) and comprised the following:

  • the net debt of the subsidiaries of € 418.0 million, down from € 491.7 million at December 31 2020, thanks to the lower numbers reported by KOS (€ 40.5 million) and Sogefi (€ 33.1 million);
  • the positive net financial position of the Parent Company (including the subsidiaries CIR Investimenti and CIR International) of € 332.4 million, down by € 59.3 million compared to December 31 2020 (€ 391.7 million) after the Voluntary Public Tender Offer to buy back own shares described above, which led to a disbursement of € 80.0 million, which was partly offset by the result for the year of financial asset management.

The total consolidated net financial debt amounted to € 929.9 million at December 31 2021, including the financial payables for rights of use as per IFRS 16 of € 844.3 million, referring mainly to the subsidiary KOS (€ 774.9 million) which operates principally in leased premises.

The shareholders’ equity of the Group stood at € 740.4 million at December 31 2021 (€ 771.0 million at December 31 2020), after the reduction of €80.0 million resulting from the buyback of own shares.

KOS

In 2021 revenues totalled € 660.1 million and were up by 4.5% on 2020, mainly due to the good performance of rehabilitation and the acute sector, which benefited from the recovery of normal hospital activity after the acute phase of the public health emergency.

However, for the Italian RSAs (nursing homes) the effect of the pandemic lasted longer. Partly because of the restrictions imposed by the health authorities, new entries were limited for most of 2020 and the early months of 2021, causing a gradual decline in the number of presences in the first quarter with a gradual recovery in the second part of the year. The average number of presences in 2021 was therefore lower than in 2020 and significantly lower than in 2019.

In the German RSAs the impact of the pandemic, particularly in the early stages, was significantly lower in medical terms and thus the reduction in the number of guests was less pronounced than it was in Italy. Moreover, state subsidies, which involved compensation for the lower revenues and the higher costs incurred, made it possible to neutralize the economic impact of the decline in the number of presences and the higher costs caused by the pandemic.

EBIT came to € 32.4 million, up from € 15.4 million in 2020. The improvement was due to the recovery in rehabilitation and to the higher state subsidies received for the nursing home sector. The result also benefited from non-recurring results, capital gains and other non-operating income of around € 12.0 million (€ 9.6 million in 2020).

KOS reported net income of € 1.4 million (€ 46.7 million in 2020, underpinned by a net capital gain on the sale of Medipass of € 54.4 million).

Free Cash Flow, without considering the effects of IFRS 16, was a positive figure of € 41.0 million, consisting of positive operating cash flow of € 4.0 million, inflows from the disposal of properties of € 53.0 million and investments in the development of new facilities of € 16.0 million.

Net debt at the end of 2021, before the application of IFRS 16, went down to € 160.2 million from € 200.7 million at December 31 2020.

Sogefi

In 2021 world car production reported growth of 2.5%, after a decline of 16.2% in 2020.

Sogefi’s revenues recorded growth of 11% compared to 2020, achieving a distinctly better performance than the market; however revenues have not yet returned to the level of 2019, coming in at -8.3%, a result significantly less negative than the -14.1% for world car production. The year 2021 was also a positive year for commercial activity, and particularly for the diversification of platforms for the future: Sogefi was awarded important contracts in Europe, NAFTA and China for the supply of thermal management products for electric mobility, contracts with new customers focused exclusively on electric products and a significant number of contracts for the supply of filters unrelated to thermal engines (air purification and transmission filters).

In the current context of the generalized increase in the cost of raw materials, transportation and energy, which caused margins to deteriorate in the second half of 2021, Sogefi has started negotiations with all its customers with the aim of adjusting its selling prices in order to continue its commercial relationships in a way that is sustainable in the long term.

Net income from operating activities came in at € 28.6 million and compares with a loss of € 18.4 million in 2020. This improvement was achieved mainly thanks to the recovery in volumes and the reduction of the impact of fixed costs on revenues (16.3% compared to 16.9% in 2020 and 17.2% in 2019) and the reduction of restructuring costs. The net result from operating activities was higher even than that of 2019 (net income of € 13.8 million).

The sale of the filtration business in Argentina generated a negative result of € 24.1 million, of which € 20.8 million came from the reclassification of accrued exchange rate differences from shareholders’ equity to the result for the year, with no impact on either cash or equity. The net result was thus a positive figure of € 2.0 million after a loss of € 35.1 million in 2020 and earnings of € 3.2 million in 2019.

In 2021 Sogefi generated positive Free Cash Flow of € 32.4 million, versus cash absorption of € 38.2 million in the previous year, due to the particular circumstances that occurred in 2020 and particularly to the fall in revenues, which also had an impact on working capital. In 2021 the strong recovery of Free Cash Flow reflected the positive evolution of results and the specific action taken by the Group on working capital.

Net financial debt before IFRS 16 stood at € 258.2 million at December 31 2021, lower than at the end of 2020 (€ 291.3 million) and substantially in line with December 31 2019 (€ 256.2 million).

Financial Management

Thanks to the positive trend of the markets, total net financial income of € 23.1 million was reported with a return of 5.1%. The return on readily convertible assets, i.e. the stock, bond and hedge fund portfolio, rose to 3.3% (€ 12.4 million), while the private equity and minority shareholding portfolio recorded net income of € 10.7 million and gave a return of 13.2%.

Inclusion of ESG values in the strategy

During 2021, all the companies of the Group defined sustainable development plans. These ESG plans are organized around four strategic commitments in the long term, specifically defined for each business. These are: Corporate Governance par excellence, ESG-driven Innovation (i.e. boosting the quality of the care and services of KOS and the development of E-Mobility products for Sogefi), Eco-compatibility of operations (i.e. contribution to decarbonization and a greater circularity in the management of resources), and Individual and Community wellbeing (i.e. training, attention to diversity and equality, safety and quality of the working environment and contribution to the local communities in which the Group operates). The ESG plans and the related KPIs and targets adopted are set out in CIR’s Non-Financial Disclosure (“DNF”), which will be published on the Company’s website, and in the DNFs of Sogefi and KOS, to be published on their respective websites.

Significant events that have occurred since December 31 2021

There have been no significant events since the close of financial year 2021.

Outlook for the year

Given the continuing uncertainty regarding the evolution of the pandemic and the geopolitical situation following the Russian-Ukrainian crisis, visibility as to the performance of the Group businesses in the coming months remains limited.

As far as KOS is concerned, thanks to the vaccination drive and provided there are no further crises relating to the pandemic, it is expected that there could be a return to the level of pre-Covid activity for Rehabilitation and Acute services during this year. For the nursing homes in Italy and Germany, however, the time needed for them to return to levels of full occupation is expected to be structurally longer, lasting at least until 2023. As far as activities in Italy are concerned, the impact of costs will probably continue to be higher than in 2019, even when business has fully recovered, because of contract renewals and cost inflation in general but not to an extent that would compromise the profitability of the business model.

As for the automotive sector, IHS was estimating, before the start of the Ukrainian crisis, a recovery in world car production volumes of 8.5% in 2022 compared to 2021, which would still be lower than in 2019 (-6.8%). Countering this recovery, in 2021 there was a rise in commodity prices that was unprecedented in terms of size and duration, making it difficult to come up with any forecasts and which as things stand at present is continuing in the first half of this year. Within this scenario, Sogefi expects to achieve operating profitability for the whole of 2022, excluding non-recurring charges, substantially in line with that of 2021, thanks to the effects of the incisive action already implemented to reduce the impact of fixed costs and structurally improve profitability and, with regard to Suspensions in particular, the gradual entry into operation of the new plant in Romania. However, the conflict between Russia and Ukraine, to which Sogefi is not directly exposed as it has no presence in the two countries affected, could have an impact on the automotive sector both in terms of demand and supply chains: at present it is not yet possible to foresee such impact.

Dividend proposal

The Board of Directors has decided to put before the Annual General Meeting of the Shareholders the proposal that no dividend be distributed.

Annual General Meeting of the Shareholders

The Annual General Meeting of the Shareholders will be held, in an ordinary session and at a single calling, on 29 April 2022. The Board of Directors at today’s meeting has voted, among other things, to put the following proposals before the Annual General Meeting of the Shareholders:

  • The cancellation (for the part not utilized) and renewal of the authorization of the same Board of Directors, in the light of the rules stated in Articles 2357 and following articles of the Civil Code, of Art. 32 of D.Lgs no. 58/98 (the “TUF”), of Art. 144-bis of CONSOB Resolution no. 11971/1999, of EU Regulation no. 596/2014 (the “MAR”), of EU Delegated Regulation no. 2016/1052, of Consob Resolution no. 20876 of April 3 2019 and Consob Guidelines of July 2019, for a period of 18 months to buy back a maximum of 76,016,488 of its own shares 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 preceding the date on which the price is fixed in the event of purchases made in accordance with the procedures stated in points (i), (iii) and (iv) of the following paragraph. 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.
    The buyback must take place in the market, in compliance with the terms of Art. 132 of the TUF and with the terms of the law or the regulations in force at the moment of the transaction and more precisely (i) through a public tender offer to buy or exchange shares; (ii) on regulated markets following operating procedures established in the rules for organizing and managing the said markets, which do not allow bids and offers to be matched directly; (iii) through the assignment pro-rata of put options to the shareholders to be assigned within 15 months of the date of the AGM resolution authorizing the same with exercise within 18 months of the same resolution; (iv) through the purchase and sale of derivative instruments traded on regulated markets that involve physical delivery of the underlying shares in compliance with the further provisions contained in Art. 144-bis of the Rules for Issuers issued by Consob, and as per the terms of Articles 5 and 13 of the MAR.
    The main reasons why this authorization is being renewed are the following: (a) to fulfil 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, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (b) to have a portfolio of own shares to use as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the scope of transactions of interest to the Company (a so-called “stock of securities”); (c) to engage in action to support market liquidity, optimize the capital structure and remunerate shareholders in particular market conditions, all within the limits established by current rules and regulations; (d) to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (e) 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;
  • The approval of a stock grant plan for 2022 aimed at employees of the Company and its subsidiaries, in terms to be defined by the Board of Directors and communicated 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 the Company.

Share buyback plan

The Board of Directors of CIR has also decided today to take the necessary action to launch a share buyback programme with the terms and conditions described below (the “Buyback Plan”).

The Buyback Plan is in implementation of the authorization given by the Annual General Meeting of the Shareholders held on 30 April 2021 and is in compliance with the aims and the terms stipulated therein and already communicated to the market.

The Buyback Plan has the following characteristics:

  • Aims and procedures through which the buyback can be effected: the Buyback Plan will be implemented for the reasons stated in Art. 5, paragraph 2, lett. a), of the MAR and in the authorization given by the AGM as stated above and the individual purchases must be carried out in compliance with the terms of Art. 132 of the TUF, of Art. 144-bis, paragraph 1, letter b), of CONSOB Regulation no. 11971/99, and must also comply with Art. 5 of the MAR and with EU Delegated Regulation no. 2016/1052;
  • Maximum cash amount allocated to the Buyback Plan and maximum number of shares to be bought back: the purchases will be made, even in part and/or in fractions of the total, for a total disbursement of up to a maximum of Euro 17,000,000.00 (an amount in line with the distributable reserves identified in the pro-forma financial statements for the year ended December 31 2021 approved today by the Board of Directors of CIR) and in any case must not exceed 50,000,000 CIR shares (equal to approximately 3.9% of the share capital of CIR as of the date of this press release);
  • Duration of the Buyback Plan: the purchases will commence at the latest in the week beginning 21 March 2022 and will terminate on 30 October 2022 (unless revoked);
  • Minimum and maximum price: the purchases must be made in compliance with the limits established by EU Delegated Regulation 2016/1052, it remaining understood that – in accordance with the above-mentioned authorization of the AGM of the Company held on 30 April 2021 – the purchase price must not be more than 15% higher or lower than the benchmark price recorded by the CIR share in the Euronext Milan session, organized and managed by Borsa Italiana S.p.A., on the day preceding the completion of each single purchase and, in any case, the price must not be higher than the higher of the last independent transaction and the highest current independent bid price in the same market, in compliance with the terms of Art. 3 of EU Delegated Regulation 2016/1052;
  • Market: the purchases will be made on Euronext Milan, organized and managed by Borsa Italiana S.p.A..

In order to implement the plan, CIR will give a mandate to a qualified intermediary (the “Appointed Intermediary”), who will take the decisions as to the purchases in full autonomy, even in relation to the timing of the transactions and compliance with the price limits stated above.

Information on the transactions effected will be communicated to the market in the terms and following the procedures contained in the rules and regulations in force at the time.

The assignment of the mandate to the Appointed Intermediary and any subsequent changes made to the Buyback Plan will be made known to the public promptly in the terms and following the procedures contained in the rules and regulations in force at the time.

The Company is not required to complete the Plan, which could therefore be suspended, interrupted or modified at any time, for any reason, in compliance with rules and regulations in force at the time.

It should be noted that as of March 10 2022 CIR was holding 179,424,975 of its own shares, representing 14.05% of the total number of shares that make up the Company’s share capital. The subsidiaries do not own any shares in the Company.

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- 15:32 CET

Sogefi: results higher in 2021

Revenues at € 1,320.6 million: up by 11% on 2020
Outperforming the market in all geographical areas

EBITDA margin at 14.6% of revenues higher than the EBITDA margin of 2020 (11.5%) and 2019 (12.1%)

Net income from continuing operations at € 28.6 million (loss of € 18.4 million in 2020 and earnings of € 13.8 million in 2019)

Free Cash Flow positive for € 32.4 million (negative for € 38.2 million in 2020 and for € 8.4 million in 2019)

Milan, February 25 2022 – 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 2021 presented by Chief Executive Frédéric Sipahi.

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.

PERFORMANCE OF THE MARKET

In 2021 world car production rose by 2.5% compared to 2020. After the rise of 29.2% in the first half of 2021 compared to the first half of 2020 (impacted by the spread of the Covid-19 pandemic and the resulting lockdown), in the second half global production was significantly lower than that of the same period of 2020 (-16%). It was particularly affected by the difficulties experienced in the sourcing of specific parts (which also involved the temporary closure of certain production sites of some of the top global producers), shortages of raw materials and the sharp rise in the prices of the same.

In 2021 Europe reported the worst performance, with car production at -6.2% compared to 2020; production remained substantially stable in NAFTA (+0.1%) and reported a recovery in China (+4%) and Mercosur (+16.2%).

Global production in 2021 did not see a return to the volumes of the pre-pandemic period, and reported -14.1% on 2019 (Europe -27.9%, NAFTA -20.1% and Mercosur -19.4%); the only exception was China, which did substantially return to the levels of 2019 (-0.6%).

After the fall reported in 2020 and the extremely weak recovery in 2021, IHS is forecasting 8.5% growth in production for 2022.

SOGEFI’S KEY RESULTS FOR 2021

The Group’s revenues recorded growth of 11% compared to 2020, clearly outperforming the market (+2.5%); compared to 2019 revenues were -8.3%, versus -14.1% for car production worldwide.

The recovery of revenues and the action taken to counter the economic impact of the crisis made it possible to close the year with:

  • “Net income from continuing operations” of € 28.6 million, versus a loss of € 18.4 million in 2020,
  • Positive free cash flow of € 32.4 million (a negative € 38.2 million in 2020),
  • Net debt before IFRS16 lower at € 258.2 million (€ 291.3 million at December 31 2020).

The year 2021 was also a positive year for commercial activity.

The Air and Cooling Division obtained important contracts in Europe, NAFTA and China for the supply of thermal management products for electric mobility, which contain greater added value than the average standard value of traditional products for internal combustion engines. More specifically, these new contracts were with a prime German car manufacturer for a new-generation electric platform, with two producers of electric commercial vehicles, one pure electric and the other using fuel cell technology, and with various Chinese car manufacturers of full electric vehicles.

Filtration obtained a significant number of contracts for the supply of air purification Filters and two important contracts in the NAFTA zone for transmission filters.

Suspensions extended its customer portfolio, obtaining contracts with new customers focusing exclusively on electric products. The division also obtained contracts from historical customers for orders that will be produced in the new production plant at Oradea in Romania. Of these it is worth mentioning the first contract signed with one of the principal customers for the production of coil springs in Eastern Europe.

In the current context of generalized increases in the cost of raw materials, transportation and energy, which led to a deterioration in margins in the second half of 2021, Sogefi has started negotiations with all customers aimed at adjusting its sales prices to the situation to a more complete extent than that envisaged by the indexation mechanisms contained in the contracts. Sogefi’s management is determined and confident that it will be able to reach fair agreements with all of its customers in order to continue its commercial relationships in a way that is sustainable in the long term. With some of them this objective has already been reached.

REVENUES

In 2021 Sogefi’s revenues came in at € 1,320.6 million and were up by 11% on 2020.

After growth of 34.7% in the first half, the second half closed with a decline of 6.2% on the same period of 2020, although this was still significantly better than the market’s -16%.

Performance of revenues by geographical area

Revenues rose in all geographical areas: +7.8% in Europe, +4.6% in North America, +22.0% in Asia, +67.9% in South America.

Performance of revenues by Business Unit

The Air and Cooling and Filtration sectors reported revenues close to those reported in 2019. The growth of Air and Cooling compared to 2020 (+8.1%) was due partly to the recovery of the market but partly also to the expansion of the contract portfolio particularly in China, where revenues were up by 18.4% compared to the previous year.

The increase in the revenues of Filtration (+10%) reflects the strong recovery in India as well as the evolution of the market.

Lastly, Suspensions posted revenue growth of 14.7%, but business remains significantly below the levels of the corresponding period of 2019 (-16.6%).

The rise in revenues mainly reflects the good performance in South America and China.

OPERATING RESULT AND NET RESULT

EBITDA came to € 192.5 million, up from € 137.0 million in 2020 and € 174.6 million in 2019; gross profitability (EBITDA / Revenues %) rose to 14.6% from 11.5% in 2020 (13.1% excluding non-recurring restructuring charges) and 12.1% in 2019.

The contribution margin remained stable (30.6% versus 30.8% in 2020 and 30.1% in 2019) and the increase in profitability was due to the decline in the impact of fixed costs on revenues to 16.3% (16.9% in 2020 and 17.2% in 2019) and of restructuring costs. It should be noted that compared to 2019 fixed costs were down by 12.8%, thanks to the action plans put in place. Lastly, the higher EBITDA was partly due to the positive effect of exchange rates (€ +2.5 million in 2021 versus € -4.7 million in 2020).

In conclusion, it should be pointed out that, as was the case in the third quarter, the fourth quarter was negatively affected by the weakness in volumes and the generalized rise in the cost of raw materials, especially steel prices for the production of suspensions, which caused a reduction in the contribution margin for the quarter from 31.5% in 2020 to 28.1% in 2021.

EBIT came to € 58.4 million, up from € 7.1 million in 2020 and € 46.4 million in 2019.

Financial expense, totalling € 17.8 million, was lower than in 2020 (€ 22.1 million) thanks to the reduction in debt and to the recognition of an item of non-recurring financial income (of € 1.2 million); tax expense came to € 13.5 million versus € 3.4 million in 2020.

Net income from operating activity came in at € 28.6 million and compares with a loss of € 18.4 million in 2020 and earnings of € 13.8 million in 2019.

The net result of discontinued operations was a loss of € 24.5 million (a loss of € 16.2 million at December 31 2020) and related to the filtration business in Argentina, which was sold in 2021 and which generated an accounting loss in the income statement of € 24.1 million, of which € 20.8 million due to the restatement of accrued exchange rate differences from shareholders’ equity to the result for the period. This had no impact either on the cash or the equity position.

The net result was a positive € 2.0 million compared to a loss of € 35.1 million in 2020 and net income of € 3.2 million in 2019.

DEBT AND EQUITY

Free Cash Flow was positive for € 32.4 million, versus cash absorption of € 38.2 million in 2020, due to the particular circumstances that occurred in 2020 and more especially to the fall in revenues, which also had an impact on working capital. In 2021 the strong recovery of Free Cash Flow reflected the positive evolution of results and the specific action taken by the Group on working capital.

Net financial debt before IFRS 16 stood at € 258.2 million at December 31 2021, lower than at the end of 2020 (€ 291.3 million) and substantially in line with December 31 2019 (€ 256.2 million).

Including financial payables for rights of use, as per IFRS 16, net debt stood at € 327.6 million at December 31 2021, down from € 358.1 million at December 31 2020 (€ 318.9 million at December 31 2019).

At December 31 2021 the Group had committed credit lines of € 280 million in excess of its requirements (after repaying its convertible bond loan of € 100 million in May).

At December 31 2021 shareholders’ equity, excluding minority interests, stood at € 187.7 million compared to € 133.8 million at December 31 2020 (€ 188.7 million at December 31 2019).

KEY RESULTS OF FOURTH QUARTER 2021

In the fourth quarter of 2021, Sogefi reported revenues of € 330.6 million, with a decline of 8.4% compared to the fourth quarter of 2020, in a market in which production was -13.2%. The fourth quarter, like the third quarter, was affected by the temporary closure of certain production facilities of top global producers; the business unit most affected by the performance of the market was Air and Cooling partly because of its greater exposure to the two markets that suffered the most (Europe and NAFTA).

EBITDA came to € 48.3 million, up from € 38.8 million in the fourth quarter of 2020 and € 43.1 million in 2019. The EBITDA margin was 14.6%, higher than in 2020, but in line excluding the non-recurring expenses of the previous year. The contraction of the contribution margin (from 31.5% in fourth quarter 2020 to 28.1% in fourth quarter 2021) reflects the increase in the cost of raw materials, which had a particular impact on the results of the suspensions business unit; negotiations are in progress with customers to adjust sales prices to the current conditions of the commodity markets.

EBIT was a positive € 8.9 million (€ 3.8 million in fourth quarter 2020).

The net result of operating activity was a positive € 4.3 million, versus a loss of € 2.9 million in the fourth quarter of 2020.

The net result of discontinued operations was a positive € 0.2 million compared to a negative result of € 8 million in the fourth quarter of 2020 (due particularly to the Brazilian Filtration business, which was sold at the end of 2020).

The consolidated net result for the fourth quarter of 2021 was € 3.9 million, compared to a loss of € 12.0 million in the previous year.

IMPACT OF COVID-19 ON THE BUSINESS

In 2021, despite the continuing pandemic crisis, the effects on the market in which the Company operates were less severe than those suffered in 2020. There was, however, a general weakness in demand, which is still lower than in the same period of 2019, particularly in Europe (-27.9%) and NAFTA (-20.1%), and operating difficulties linked to fluctuating production levels and personnel absences caused by contagion and, most of all, by contact with infected people.

During the year 2021, the Sogefi Group continued to apply all the rules for health and safety in the workplace aimed at reducing the risk of contagion, namely social distancing, the use of individual protective equipment and measures to limit the presence of personnel in the workplace, i.e. working from home.

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

In financial year 2021 the Company recognized a reversal of an impairment loss on equity investments after conducting an impairment test at December 31 2021. The reversal was for € 68.1 million (recognized to the item “Adjustments to the value of financial assets”), relating to the French subsidiary Sogefi Filtration S.A.. Thanks to this reversal Sogefi S.p.A. realized net income of € 69.9 million in financial year 2021 after reporting a net loss of € 6.2 million in 2020.

SIGNIFICANT EVENTS OCCURRING AFTER DECEMBER 31 2021

No significant events have occurred since the close of the year.

OUTLOOK FOR THE YEAR

Visibility as to the market trend in the next few months remains low, mainly due to the uncertainty, still existing, as to the evolution of the pandemic and the macroeconomic situation.

There are also specific areas of uncertainty regarding the trend of demand, the generalized increase in commodity prices and their availability, as well as logistic difficulties involving transportation and sourcing from Asian markets.

For 2022, after the decline in 2020 and performance in 2021 that was lower than expected at the start of the year, IHS is estimating a recovery in world car production volumes of 8.5% compared to 2021, with Europe +20.8%, Nafta +16.6%, South America +12.5% and China substantially breaking even (+0.9%); despite the expected positive trend, 2022 production would still be lower than that of 2019 (-6.8%), especially in Europe (-12.9%), Nafta (-6.9%) and South America (-9.4%), with only the Asian market at pre-Covid levels (+0.7%).

With regard to commodity prices, given the unprecedented price boom in 2021, it is difficult to make any forecasts for 2022 and the current situation seems to be continuing in the first part of this year. To mitigate the effects of this, the Group has already started resourcing activities, putting in place measures to contain costs and taking commercial action.

In this scenario and in the absence of any currently unforeseeable extraordinary events, Sogefi expects to achieve operating profitability for full year 2022, excluding non-recurring charges, substantially in line with that of 2021, thanks to the effects of the incisive action already implemented to reduce the impact of fixed costs and structurally improve profitability and, with regard to Suspensions in particular, the gradual entry into operation of the new plant in Romania.

DIVIDEND PROPOSAL

The Board of Directors will put before the Annual General Meeting of the Shareholders the proposal that no dividend be distributed.

ANNUAL GENERAL MEETING OF THE SHAREHOLDERS

The Annual General Meeting of the Shareholders of Sogefi will be held at the first call on April 22 2022 and at the second call on April 26 2022.

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

a) The cancellation and renewal of the authorization of the same Board of Directors, in the light of the rules stated in Articles 2357 and following articles of the Civil Code, of Art. 132 of D.Lgs. no. 58/98, of Art. 144-bis of Consob Resolution no. 11971/1999, of EU Regulation no. 596/2014, EU Delegated Regulation no. 2016/1052, of Consob Resolution no. 20876 of April 3 2019 and Consob Guidelines of July 2019, for a period of 18 months, to buy back a maximum of 10 million own shares at a unit price that cannot be more than 15% higher or lower than the benchmark price recorded by the Company’s shares on the trading day preceding each single buyback transaction or preceding the date on which the price is fixed in the event of purchases made in accordance with the procedures stated in points

(a), (c) and (d) of the following paragraph, and in any case, when the shares are bought back through 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. As of today’s date the Company is the owner of 1,993,372 own shares, equal to 1.65% of the share capital.

The buyback must take place in the market, in compliance with the terms of Art. 132 of D.Lgs. no. 58/98 and with the terms of the law and the rules in force at the moment of the transaction and more precisely (a) through a public tender offer to buy or exchange shares; (b) on regulated markets following operating procedures established in the rules for organizing and managing the said markets, which do not allow bids and offers to be matched directly; (c) through the assignment pro-rata of put options to the shareholders to be assigned within 15 months of the date of the AGM resolution authorizing the same with exercise within 18 months of the same resolution; (d) through the purchase and sale of derivative instruments traded on regulated markets that involve physical delivery of the underlying shares in compliance with the further provisions contained in Art. 144-bis of the Rules for Issuers issued by Consob, and as per the terms of Articles 5 and 13 of EU Regulation no. 596/2014.

The main reasons why this authorization is being renewed are the following: (i) to fulfil 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 S.p.A. or its subsidiaries, or to fulfil any obligations resulting from debt instruments that are convertible into or exchangeable with equity instruments; (ii) to have a portfolio of own shares that can be used as consideration for any extraordinary transactions, even those involving an exchange of shareholdings, with other parties within the sphere of transactions of interest to the Company (a so-called “stock of shares”); (iii) to engage in action to support market liquidity, optimize capital structure, and remunerate shareholders in particular market situations, all within the limits established by current rules and regulations; (iv) to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; (v) 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.

b) The approval of a stock grant plan for 2022 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 the Company.

APPOINTMENT OF THE NEW CHIEF FINANCIAL OFFICER AND THE EXECUTIVE RESPONSIBLE FOR THE PREPARATION OF THE COMPANY’S FINANCIAL STATEMENTS

The Board of Directors has approved the appointment, as from May 1 2022, of Olivier Proust as the new Chief Financial Officer and Investor Relator in replacement of Yann Albrand who should be leaving the Company on April 30 2022. Mr Proust has been working for Sogefi since 2008 and is currently in charge of the group’s treasury. Mr Proust owns 8,394 shares in the Company.

It should be noted that Mr Albrand has terminated his relationship with the Company by mutual consent; in connection with the termination of the employment there will be payment of an all-inclusive sum as a negotiated settlement (including the notice period) of euro 307,000 and he will keep the benefits that he was assigned that have not yet vested under the stock grant plans approved by the Company for the years 2018 and 2019.

According to the information available to the Company, Mr Albrand owns 74,517 shares in the Company.

In addition to the position of Chief Financial Officer, Mr Albrand was also the Executive Responsible for the preparation of the Company’s Financial Statements. After obtaining the favourable opinion of the Board of Statutory Auditors, the Board of Directors has resolved to assign the title of Executive Responsible for the preparation of the Company’s Financial Statements to Ms Maria Beatrice De Minicis, who has been in Sogefi since 2004 and is currently in charge of the Company’s consolidated accounts and reporting. Ms De Minicis is the owner of 20,570 shares in the Company.

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- 14:22 CET

Pietro La Placa appointed as Secretary to the Board of Directors of CIR

He has been General Counsel of the Company since September 2021

Milan, 28 January 2022 – CIR S.p.A. announces that the Board of Directors, which met today, has appointed Attorney Pietro La Placa as the new Secretary to the Board of Directors following the resignation of Professor Massimo Segre.

The Board proffered its sincere thanks to Professor Segre, who will continue to work with the CIR Group, for all his precious work for the Company to date.

Pietro La Placa, to whom the Board addresses its best wishes for his new position, joined CIR in September 2021 as General Counsel.

He graduated in Law from the University of Genoa.

He has consolidated experience in the legal field from his work with the Law Firm Legance – Avvocati Associati (Milan), Freshfields Bruckhaus Deringer LLP (Milan) and BonelliErede Law Firm (Genoa). Assisting prime Italian and foreign companies (in a broad range of sectors, including IT and TMT, aerospace and defence, infrastructure, healthcare & life sciences), he dealt mainly with corporate governance, mergers and acquisitions, joint ventures, private equity, venture capital and other extraordinary deals, corporate restructuring deals, drafting and negotiating commercial contracts in the IT and TMT sector, company restructuring and business crises, corporate and commercial litigation, both in and out of court.

Pietro La Placa’s curriculum vitae is available on the Company’s website (www.cirgroup.it/en/management/).

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- 13:51 CET

Calendar of events for 2022

Milan, 28 January 2022 – CIR S.p.A. announces that the Company’s calendar of events for 2022 will be as follows:

Friday11.03.202210,00 amBoard of Directors Meeting (Pro-forma Financial Report for 2021) 
Friday29.04.202210,00 amAnnual General Meeting of the Shareholders (Approval of Financial Report for 2021)
Friday29.07.202210,00 amBoard of Directors Meeting (Half-year Financial Report for 2022)

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- 14:16 CEST

Sogefi: results higher in first nine months of 2021

Revenues at € 990.0 million: up by 20.9% at constant exchange rates on 9M 2020
Better performance than the market in all geographical areas 

EBITDA margin at 14.6% of revenues higher than in first 9M of 2020 (11.8%) and 2019 (12.1%)

Net income from continuing operations € 24.3 million (loss of € 15.6 million in 9M 2020 and earnings of € 14.9 million in 9M 2019)

Positive Free Cash Flow of € 25.1 million (negative for € 55.6 million in 9M 2020 and for € 4.2 million in 9M 2019)

Milan, October 22 2021 – 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 2021, as presented by Chief Executive Officer Frédéric Sipahi.

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.

PERFORMANCE OF THE MARKET

After the rises reported in the first and in the second quarter (+15.7%, +48.3%), in the third quarter of 2021 global car production was weak and significantly lower than that of the same period of 2020 (-19.7%) in which there had been a strong recovery. This was due to the difficulties experienced in the sourcing of particular components, which slowed production and even led to the temporary shutdown of certain production facilities of the main producers worldwide.

In the first nine months of 2021 world car production did in any case report growth of 9.5% compared to the same period of 2020: +4.4% in Europe, +6.8% in NAFTA, +7.7% in China, +28.7% in Mercosur and +48.4% in India.

Lastly, despite the recovery, production volumes were still significantly lower than those before the spread of the pandemic in all geographical areas, with the sole exception of China. In fact world production in the first nine months of 2021 was 15.5% lower than that of the same period of 2019, with Europe reporting -27.6%, NAFTA -21.5%, Mercosur -23.3% and China substantially in line with 2019 (-1.8%).

SUMMARY OF SOGEFI’S RESULTS FOR 9M 2021

The Group reported a significant recovery in revenues, which rose by 19.4% compared to the first nine months of 2020, clearly outperforming the market. Compared to the same period of 2019, revenues posted -9.1%, versus a -15.5% fall in car production worldwide.

The recovery in revenues and the action taken to counter the impact of the crisis made it possible to close the first nine months of the year with:

  • EBITDA higher at 14.6% of revenues (11.8% in 9M 2020 and 12.1% in 9M 2019);
  • Net income from “continuing operations” of € 24.3 million, versus a loss of € 15.6 million in the same period of 2020;
  • Positive free cash flow of € 25.1 million (a negative € 55.6 million in the first nine months of 2020);
  • Net debt before IFRS 16 of € 267.4 million, lower than the figure at December 2020 (€ 291.3 million).

During the first nine months of the year commercial activity posted a positive performance.

The Air and Cooling division obtained important contracts in Europe, NAFTA and China for the supply of thermal management products for electric mobility, which incorporate a higher added value than the standard average value for traditional plastic products. More specifically, these were new contracts entered into with a premium German car maker for a new-generation electric platform and with two producers of electric commercial vehicles, one of which is pure electric while the other uses fuel cell technology.

The Filtration division obtained a significant number of contracts for the supply of air purification filters and two important contracts in NAFTA for transmission filters.

The Suspensions division obtained various contracts with new customers focusing exclusively on electric platforms.

REVENUES

In the first nine months of 2021 Sogefi’s revenues totalled € 990.0 million and were up by 19.4% at historical exchange rates and by 20.9% at constant exchange rates compared to the same period of 2020. After the increases of 5.2% in the first quarter and 94.5% in the second quarter, the third quarter closed with a decline in revenues of 3.8% at current exchange rates, compared to the market’s -19.7%. Revenues for the first nine months of 2021 were down by 9.1% compared to those of the first nine months of 2019.

Performance of revenues by geographical area

Revenues at constant exchange rates rose by 17.6% in Europe, by 13.6% in North America, by 19.4% in China and by 104.6% (72.3% at current exchange rates) in South America. Thus in all geographical areas Sogefi outperformed the market.

Performance of revenues by Business Unit

In the first nine months of 2021 the Air and Cooling and the Filtration Business Units reported a greater recovery in business activity compared to 2020 than that of the market, with revenues more or less in line with those of the corresponding period of 2019.

The growth in revenues of the Air and Cooling division (+20.5% at constant exchange rates and +19.8% at current exchange rates compared to the same period of 2020) was due not only to the market recovery by also to the development of its contract portfolio especially in China, where revenues at constant exchange rates have risen by 24.3% on the previous year.

The higher revenues of the Filtration division (+18.8% at constant exchange rates and +17% at current rates compared to the same period of 2020) reflect not only the trend of the market but also the strong recovery in India.

Lastly, the Suspensions Business Unit reported a 23.8% rise in revenues at constant exchange rates (+21.7% at current rates) compared to the first nine months of 2020, although business activity remains significantly lower than in the same period of 2019 (-20% at current exchange rates).

OPERATING RESULT AND NET RESULT

EBITDA came in at € 144.1 million, up from € 98.1 million in the first nine months of 2020 and € 131.5 million in the first nine months of 2019; gross profitability (EBITDA / Revenues %) rose to 14.6%, versus 11.8% in the first nine months of 2020 and 12.1% in the same period of 2019.

The higher profitability is the result of the rise in the contribution margin to 31.4% (29.8% in the first nine months of 2019 and 30.4% in the same period of 2020) and of the reduction of the impact of fixed costs on revenues to 16.4% (17.2% and 17.3% in the first nine months of 2019 and 2020 respectively). Fixed costs declined by 13.3%, compared to the first nine months of 2019, thanks to the action plans put in place.

Lower restructuring costs also contributed to the increase in EBITDA (€ 2.3 million versus € 12.2 million in the first nine months of 2020 and € 4.8 million in the same period of 2019).

The third quarter was affected by the weakness of volumes and the generalized increase in the cost of raw materials, particularly steel prices for the production of suspensions, which caused a reduction in the contribution margin that is destined to continue in the fourth quarter of the year.

EBIT came to € 49.4 million, compared to € 3.3 million in the same period of 2020 and € 41.9 million in the first nine months of 2019.

Financial expense, which totalled € 13.4 million, was lower than that of the same period of 2020 (€ 16.0 million), thanks to the reduction of the debt and to an item of non-recurring financial income of € 1.2 million; tax expense amounted to € 13.2 million, up from € 2.9 million in the previous year.

Net income from continuing operations came to € 24.3 million, versus a loss of € 15.6 million in the first nine months of 2020.

The net result of “discontinued operations and operations held for sale” was a loss of € 24.7 million (€ 8.2 million in the first nine months of 2020) and came from the sale of the filtration business in Argentina, which had a negative impact on the income statement of € 23.3 million, of which € 20.6 million from the reclassification of the exchange rate differences accrued by the subsidiary from equity to result for the year, which had no impact on liquidity or on equity.

The net result for the period was a loss of € 2.0 million, compared to a loss of € 23.2 million in the first nine months of 2020 and net income of € 8.3 million in the first nine months of 2019.

DEBT AND EQUITY

Free Cash Flow was a positive € 25.1 million, which compares with a cash absorption of  € 55.6 million in the first nine months of 2020, the performance of which was of course anomalous because of the sharp contraction of business activity due to the Covid-19 pandemic.

Net financial debt before IFRS 16 amounted to € 267.4 million at September 30 2021, down from December 31 2020 (€ 291.3 million) and September 30 2020 (€ 299.0 million) and was close to being in line with September 30 2019 (€ 264.6 million).

Including the financial payables for rights of use, as per IFRS 16, the net debt figure at September 30 2021 stood at € 335.5 million, down from € 358.1 million at December 31 2020 and € 374.5 million at September 30 2020.

At September 30 2021 the Group had committed credit facilities in excess of its requirements for € 265.0 million (after repaying its convertible bond of € 100.0 million in May 2021).

At September 30 2021 shareholders’ equity, excluding minority interests, came to a total of € 168.3 million (€ 133.0 million at December 31 2020).

SUMMARY OF 2021 THIRD QUARTER RESULTS

In the third quarter of 2021 Sogefi reported a decline in revenues of 3.8% (-4% at constant exchange rates) compared to the third quarter of 2020, to € 316.6 million, after seeing growth of 5.2% in the first quarter and of 94.5% in the second quarter. The group’s revenues were affected by the market trend which involved a 19.7% fall in production in the third quarter. The group’s performance, however, was considerably better than that of the market.

EBITDA came to € 35.8 million, down from € 45.9 million in the third quarter of 2020 and € 44.7 million in the same period of 2019. The reduction in EBITDA reflects the weakness of revenues due to the market scenario and to the reduction in the contribution margin (from 30.8% in third quarter 2020 to 28.4% in third quarter 2021) because of the higher cost of raw materials, which particularly affected the results of the Suspensions Business Unit. Negotiations are in progress with customers to adjust selling prices to the current cost of raw materials.

EBIT was positive for € 2.1 million versus € 14.8 million in the third quarter of 2020.

The net result of continuing operations was a loss of € 2.1 million, which compares with net income of € 5.2 million in the third quarter of 2020.

The net result of “discontinued operations and operations held for sale” was a loss of € 21.2 million (net income of € 0.3 million in third quarter 2020), of which € 20.6 million came from the reclassification of the exchange rate differences accrued by the Argentinian subsidiary from shareholders’ equity to result for the year, which had no impact on liquidity or equity.

The consolidated net result for the third quarter of 2021 was a loss of € 23.4 million, versus net income of € 5.6 million in the previous year.

IMPACT OF COVID-19 ON THE BUSINESS

In the first nine months of 2021, despite the continuing pandemic crisis, the effects on the market in which the Company operates were less severe than those recorded for the first nine months of 2020 and consisted of a general weakness in demand, which was still lower than in the same period of 2019, especially in Europe (-27.6%) and NAFTA (-21.5%).

During the first nine months of 2021, the Sogefi Group continued to apply all the rules for health and safety in the workplace with the aim of reducing the risk of contagion. These include social distancing, the use of individual protection systems and measures to limit the presence of personnel in the workplace, with staff working from home.

SIGNIFICANT EVENTS THAT HAVE OCCURRED SINCE SEPTEMBER 30 2021

No significant events have taken place since the close of the period.

OUTLOOK FOR THE YEAR

Visibility as to the market trend in the next few months remains low mainly due to the continuing uncertainty about the evolution of the pandemic and the macroeconomic situation.

There are also specific critical issues relating to the generalized increase in the prices of the main raw materials and their availability, as well as logistic difficulties involving transportation and sourcing from Asian markets.

Given this scenario, IHS has revised its estimates for world production down, forecasting that fourth quarter 2021 will be down by approximately 20% on the same period of 2020, with Europe at -24.9%, NAFTA at -16.8% and China at -19.6%.  Therefore, for the whole year 2021 production should be in line with that of 2020 (+0.3%) but still around 16% lower than that of 2019. The expected recovery of volumes after the fall reported in 2020 is therefore forecast by IHS to take place in 2022, the year in which IHS is projecting growth of 10.6%.

For the fourth quarter of 2021, Sogefi expects the market to remain weak, in line with IHS projections, and pressure on commodity prices (steel, plastic and paper) to continue with possible negative effects on the contribution margin. To mitigate these effects the Group has already launched resourcing initiatives, has taken commercial action and adopted measures to reduce labour costs.

Provided there are no extraordinary circumstances or events that are not at present foreseeable, Sogefi confirms the view it expressed in the publication of its results for first half 2021, i.e. for the full year it expects to achieve an operating result at least equal to that reported for 2019.

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- 17:29 CEST

CIR: results for first half 2021

  • Revenues at € 1,007.9 million, up by 23.5% on first half 2020; EBITDA at € 172.3 million (€ 100.1 million in first half 2020).
  • Positive net result of € 21.6 million (€ -30.4 million in first half 2020); reduction of consolidated net debt before IFRS 16 to € 41.4 million (€ 100.0 million at December 31 2020).
  • Net financial position of the parent company positive for € 405.0 million, up from December 31 2020 (€ 391.7 million).

Milan, July 26 2021 – 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 2021 presented by Chief Executive Officer Monica Mondardini.

Consolidated Results

In the first half of 2021 business recovered significantly compared to the first half of 2020, although the levels reported before the spread of the pandemic have not yet been reached.

The Group’s consolidated revenues amounted to € 1,007.9 million, posting a rise of 23.5% on the first half of 2020, during which the effects of the Covid-19 pandemic were particularly significant for all of the group’s businesses. Revenues were in line with those of first half 2019 (+0.4%) but were 8.3% lower on a like-for-like basis.

The consolidated gross operating margin (EBITDA) came to € 172.3 million (€ 100.1 million in the first half of 2020) which represented 17.1% of revenues, compared to 12.3% in 2020.

The net result was a positive € 21.6 million (after a loss of € 30.4 million in the first half of 2020).

Consolidated net debt before IFRS 16 totalled € 41.4 million at June 30 2021, lower than at December 31 2020 (€ 100.0 million) and at June 30 2020 (€ 285.6 million). Financial debt for rights of use, as per IFRS 16, amounted to € 802.3 million and thus total consolidated net deb came to € 843.7 million. IFRS16 liabilities refer mainly to the subsidiary KOS (€ 736.4 million), which operates principally in leased premises.

The net debt of the subsidiaries before IFRS 16 declined to € 446.4 million (€ 491.7 million at December 31 2020 and € 682.8 million at June 30 2020).

The net financial position of the Parent Company (including the subsidiaries devoted to financial management) was a positive € 405.0 million at June 30 2021, higher than at December 31 2020 (€ 391.7 million) and at June 30 2020 (€ 397.2 million).

The Group’s equity stood at € 801.4 million (€ 771.0 million at December 31 2020) and the increase was mainly due to the net income for the period.

KOS

KOS’ business activity was heavily impacted by the consequences of the pandemic. During the first half of 2021, the vaccination campaign cut the number of infections drastically, reducing them to virtually zero in the care homes for the elderly, making it possible for the relatives of the guests to visit again, complying with the health and safety protocols. The climate of enhanced confidence led to new entries and from May onwards to an increase in the total number of presences.

In the first half of 2021, revenues came in at € 325.5 million and were up by 4.9% compared to the same period of 2020.

In the nursing homes in Italy (RSAs) revenues were significantly lower than those reported for the first half of 2020 and the first half of 2019, as the number of guests during the period was considerably lower than that recorded in previous years because of the circumstances caused by the pandemic over the course of the last 18 months, i.e. the freeze or slowdown of new entries.

In the German nursing homes the impact of the pandemic was considerably less in medical terms and thus the reduction in the number of guests was also less pronounced than in Italy; moreover, state aid limited the economic impact of the pandemic. Revenues for the first half were slightly higher than those for the first half of 2020.

In the Italian rehabilitation and acute care facilities, where in first half 2020 there had been a decline in the number of patients because of the slowdown in normal hospital activity, there was a good recovery, albeit to levels below those of 2019. There was also an increase in laboratory and testing services and, more specifically, KOS has been strongly committed to carrying out screening activities for controlling the spread of the pandemic. Revenues were higher than those of the same period of 2020 and 2019, thanks partly to the contribution of the new facilities acquired in 2020.

EBIT came in at € 20.9 million versus € 13.7 million in 2020. The result for 2021 has benefited from non-recurring income (approximately € 12 million) in the form of capital gains realized on the sale of certain real-estate properties. Operating profitability remains depressed because of the consequences of the pandemic, particularly the decline in the number of guests in the RSAs, the different mix of services provided in the rehabilitation units and the higher costs for personnel and protective measures. During the first half of the year KOS, in conjunction with the Regional Health Services, devoted six facilities to care for Covid-19 patients, suspending the provision of its core services and incurring the cost of adapting and converting personnel and premises.

KOS posted a net result for the period of breakeven (€ 0.4 million), versus a loss of € 2.1 million in the first half of 2020.

Free cash flow was positive for € 15.3 million, with a cash inflow of € 33.2 million from the sale of properties, and investments made in the development of new facilities of approximately € 9.0 million.

Net debt, excluding the payables resulting from application of IFRS 16, stood at € 185.5 million at June 30 2021, down from € 200.7 million at December 31 2020 and € 356.2 million at June 30 2020, before the sale of Medipass. Total debt including the payables as per IFRS 16 amounted to € 921.8 million.

Sogefi

In the first half of 2021 world car production posted growth of 29.2% (+15.5% in the first quarter and +48.6% in the second quarter) compared to the first half of 2020, during which, as is well known, there was an unprecedented fall in production caused by Covid-19. However, this growth has made it possible to recover the decline of 2020 only in part and production volumes are still lower than those prior to the spread of the pandemic (-12.6% compared to first half 2019).

Sogefi has reported revenues 34.9% higher than those of the first half of 2020; compared to the first half of 2019, revenues came in at -9%, compared to the -12.6% of car production worldwide.

The recovery of business activity and the action put in place to counter the impact of the crisis made it possible to close the first half with EBIT of € 48.9 million (€ -12.0 million in the same period of 2020), net income of € 21.4 million (versus a loss of € 28.8 million in first half 2020), positive free cash flow of € 33.1 million (a negative € 64.0 million in the first half of 2020) and net debt before IFRS 16 of € 261.4 million, lower than at December and June 2020 (€ 291.3 million and € 327.0 million, respectively).

During the first half of the year commercial activity was positive: the Air and Cooling Division obtained important contracts in Europe, NAFTA and China for the supply of Thermal Management products for electric mobility and Filtration was awarded a significant number of contracts for the supply of Air Purification Filters and Transmission Filters, thus contributing to the diversification of platforms from combustion engines.

Negotiations are in progress for the sale of the Argentinian branch of Filtration. The sale is expected to generate a capital loss of € 2.8 million, which is already incorporated in the accounts at June 30 2021 in accordance with IFRS 5, and completion of the sale would have a further negative effect on the income statement of approximately € 21.0 million, of a purely accounting nature, because of the reclassification of the subsidiary’s exchange rate translation differences from shareholders’ equity to the result for the period, without any consequences for Sogefi’s equity.

Financial Management

Regarding the management of financial assets by the Holding Company, while in the first half of 2020 the markets suffered the effects of the Covid-19 pandemic, in the first half of 2021 the recovery already observed in the second half of the previous year continued for all assets classes; total net financial income of € 12.4 million was reported, with a return for the period of 2.6%. More specifically, the overall yield on highly liquid assets (shares, bonds, hedge funds) rose to 2.5%, while the remaining part of the portfolio (private equity, non-performing loans and minority shareholdings) had a return of 2.9%.

Lastly, in May 2021 the Board of Directors of CIR S.p.A. approved a resolution to launch a voluntary partial public tender offer (hereinafter the “PTO”), as per the terms of Articles 102 and following articles of the TUF, for a maximum of 156,862,745 shares of the same CIR S.p.A., equal to 12.282% of its share capital, at a price of € 0.51 per share, corresponding to a total amount of € 80.0 million. The subscription period of the PTO will end on July 29 2021, the preliminary results will be announced on the following day and payment will made to subscribers on August 6 2021.

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 business activity over the coming months.

As far as KOS is concerned, provided there are no further waves of infection and limits on the acceptance of new guests (such as the need to isolate in the facility) or on the management of the facilities (such as stopping visits by relatives), activity is expected to increase gradually, confirming the trend already seen in May and June; as things stand at present, it is expected that there will not be a return to the levels of activity prior to the pandemic until at least next year.

As for the automotive market, IHS expects world production to show a limited decline (-3.4%) in the second half of the year compared to 2020 and, given the trend of the first half, it is forecasting growth for the full year of 10%, with a decline of -7.8% on 2019. Moreover, in the second part of 2021 tensions in the commodity markets (steel, plastic and paper) are expected to continue.

In this scenario, Sogefi confirms the view expressed in the publication of its results for first quarter 2021, i.e. for the full year it expects to achieve an operating result at least equal to that reported for 2019 and to return to profit, provided there are no extraordinary circumstances or events that are not at present foreseeable, and before the accounting effects of disposals.

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- 21:53 CEST

Voluntary public tender offer launched by CIR S.p.A. to buy back part of the shares of CIR S.p.A.

DISCLOSURE AS PER THE TERMS OF ARTICLES 102 OF LEGISLATIVE DECREE NO. 58 OF FEBRUARY 24 1998 AS SUBSEQUENTLY AMENDED (THE “TUF”), ARTICLE 37 OF THE RULES ADOPTED BY CONSOB WITH RESOLUTION NO. 11971 OF MAY 14 1999 AS SUBSEQUENTLY AMENDED AND SUPPLEMENTED (THE “RULES FOR ISSUERS”) AND ARTICLE 17 OF EU REGULATION NO. 596 OF APRIL 16 2014 (“MAR”).

VOLUNTARY PUBLIC TENDER OFFER LAUNCHED BY CIR S.P.A. TO BUY BACK PART OF THE SHARES OF CIR S.PA.

Milan, May 10 2021. As per the terms and effects of Article 102, paragraph 1, of the TUF and of Article 37 of the Rules for Issuers, CIR S.p.A. (the “Offeror” or the “Issuer” or “CIR” or the “Company”) announces its decision, approved today unanimously by the Board of Directors, to launch a voluntary public tender offer to buy, in accordance with the terms of Articles 102 and following articles of the TUF, a maximum of 156,862,745 shares of CIR S.p.A., shares without an indication of nominal value, fully freed up (the “Shares”), listed on the Mercato Telematico Azionario (“MTA”) organized and managed by Borsa Italiana S.p.A. (“Borsa Italiana”), equal to 12.282% of the share capital of CIR (the “Offer”).

The Offer is aimed without distinction at all holders of CIR shares and does not apply to the 26,708,861 own shares currently held by the Issuer, corresponding to 2.091% of its share capital, which are therefore excluded from the Offer.

The Offer is not subject to reaching a minimum number of subscriptions.

The Shares bought back by CIR under this Offer will not be subject to cancellation.

If the Offer is accepted for a number of shares in excess of the maximum number of Shares contained in the same Offer, the shares will be allocated proportionally so that CIR will buy the same percentage of the Shares being offered from each Shareholder taking part in the Offer as that of their original holding.

Pursuant to the terms of Article 102, paragraph 3, of the TUF, the Offeror will, within twenty days of this disclosure, send Consob the offer document (the “Offer Document”) for publication, and reference should be made to this document for further details of the Offer.

Below are the essential elements of the Offer and the purposes that it aims to achieve.

OFFEROR – ISSUER AND CONTROLLING ENTITY

OFFEROR – ISSUER

As the Offer is being launched by CIR, the issuer of the shares included in the Offer, the Offeror and the Issuer are the same entity.

CIR is a società per azioni (a public limited company) according to Italian law, with its registered office in Milan, Via Ciovassino 1, tax code, IVA number and registration number on the Milan Monza Brianza and Lodi Register of Companies: 01792930016, registered with the Milan R.E.A. as no. 1950090, a company active, even through its subsidiaries, in the sector of acquiring and managing controlling equity interests and financial assets.

The duration of the Company was established as until December 31 2050.

As of the date of this press release, the share capital of the Issuer stands at Euro 638,603,657, fully subscribed and paid up, and consists of 1,277,207,314 ordinary shares without indication of a nominal value.

CIR’s Company Bylaws provide for increased voting rights as per the terms of Art. 127-quinquies of the TUF; more specifically, Art. 8, as amended by the Extraordinary General Meeting held on April 29 2019, establishes that each share gives the right to two votes when all of the following conditions are met with: a) the same person or entity has had the voting entitlement on the strength of a real right giving such entitlement (full ownership with voting right, bare ownership with voting right or usufruct with voting right) for a continuous period of not less than 48 months; b) the presence of the condition as per a) above is attested by the continuous registration, for a period of no less than 48 months, in the list contained in the Stable Shareholders Book, specially set up for this purpose, which is held and updated by the Company.

The chart below shows the composition of the capital and voting rights published on May 4 2021, without prejudice to any updates in the supplementary document.

CIR’s ordinary shares are listed for trading on the MTA platform.

As of today, the Issuer has not issued any other categories of shares or bonds convertible into shares.

The chart below gives the figures relating to the main Shareholders of CIR (with interests equal to or above 5% of the share capital) based on the Shareholders Book and other information available to the Issuer as of the date of this disclosure.

No other parties are acting in conjunction with the Offeror in relation to the Offer and it should be noted that Rodolfo De Benedetti, Chairman of the Board of Directors of the Company and Chairman of the Board of Directors of its parent company F.LLI DE BENEDETTI S.p.A., directly and indirectly owns 16,497,569 shares and 16,497,569 voting rights of the Company (1.292% of the share capital, 0.974% of the voting capital and 0.963% of the voting rights as per Art. 44 bis , paragraph 4, letter b) of the Rules for Issuers, hereinafter, for the sake of brevity, “Percentage for the purposes of mandatory OPA”).

CONTROLLING ENTITY

As of the date of this disclosure, control of CIR as per the terms of Article 93 of the TUF is exercised by FRATELLI DE BENEDETTI S.p.A. («FDB»), with registered office in Turin, Via Valeggio. 41, a share capital of Euro 170,820,000 fully paid up, tax code and registration number on the Turin Register of Companies 05936550010.

The controlling shareholder as above owns 30.759% of the share capital and 45.256% of the voting capital (44.736% in terms of percentage for the purposes of mandatory OPA).

The controlling Shareholder has notified the Issuer of its intention not to accept the Offer.

It should be noted that on March 16 2021 a shareholder agreement (the “Agreement”), currently valid, was signed by Rodolfo De Benedetti, Marco De Benedetti, Edoardo De Benedetti (“Shareholders”), FDB and Margherita Crosetti, and contains clauses relevant to the terms of Art. 122, paragraphs 1 and 5, letters a), b), and c), of the TUF, regarding the shares of (i) FDB, controlling shareholder of the Offeror, and of (ii) CIR, i.e. the Offeror.

The Agreement binds the Shareholders, who together own 100% of the share capital of FDB, as well as Margherita Crosetti, as holder of usufruct with voting rights on part of the shares of FDB, and FDB itself, as holder of CIR shares.

The essential information regarding the Agreement was published, pursuant to Art. 130 of the Rules for Issuers, on the CIR website www.cirgroup.it, in the Governance section under Shareholder Agreements.

As far as CIR is aware, there are no other shareholder agreements relevant to the terms of Article 122 of the TUF concerning CIR shares.

CATEGORIES AND NUMBER OF SHARES PERTAINING TO THE OFFER

The Offer is aimed without distinction and at equal conditions to all shareholders of the Issuer and regards a maximum of 156,862,745 ordinary CIR shares, without a nominal value, with regular dividend rights, listed on the MTA, and which account for 12.282% of the share capital of CIR.

The Shares for which the Offer is accepted must be freely transferable to the Offeror and must be free of all constraints and any kind of real, obligatory or personal encumbrance.

As of the date of publication of this disclosure, CIR is holding 26,708,861 own shares representing 2.091% of the share capital, which are not included in the Offer.

In the event of the Offer being fully accepted and taking into account the shares already held by the Issuer in its portfolio as of today, CIR will own 183,571,606 own shares, corresponding to 14.373% of the share capital of the Issuer and thus a number of shares amounting to less than one fifth of the share capital.

It should be pointed out that if a holder of shares with increased voting rights should accept the offer for just a part of the said shares, the remaining shares in his or her possession will continue to have increased voting rights as per the terms of the law and of the Bylaws.

UNIT PRICE OFFERED AND TOTAL VALUE OF CIR’S OFFER

The Offeror will pay to each party who accepts the Offer a price of Euro 0.51 for each Share that accepts the Offer and is purchased (the “Price”).

The Price is to be understood as net of stamp duty, registration tax and the Italian tax on financial transactions, where due, and of any fees, commissions, withholding tax or substitute tax, where due, on the capital gain that may be realized, which will be the responsibility of those who accept the Offer.

The Price includes a premium of 2.78% over the official price of CIR ordinary shares recorded on May 7 2021 (the Stock Exchange trading day prior to the date on which the transaction is being disclosed to the market), and a premium of 7.10%, 5.76%, 9.49%, and 17.68% over the weighted average of the official prices of the shares of the Issuer in the periods of 1 month, 3 months, 6 months and 12 months prior to May 7 2021 respectively, as illustrated more effectively in the chart below.

The total consideration for the 156,862,745 Shares of the Offer is Euro 80,000,000.

Payment of the consideration to the persons or entities who accept the Offer with the transfer of ownership of the Shares being offered to the Offeror will take place on the fifth Stock Exchange trading day after the close of the period for accepting the Offer agreed upon with Borsa Italiana (the “Acceptance Period”), without prejudice to any deferrals or amendments to the Offer that could arise to comply with current requirements of law or regulations.

REASONS FOR THE TENDER OFFER

The Offer was drawn up taking the following circumstances into account: (i) the Company has for years had a considerable liquidity position; (ii) in 2020 the Company sold one of its controlling interests which, on the one hand, significantly increased its liquidity and, on the other hand, reduced the number of sectors in which it is present and thus its potential needs and/or investment opportunities; (iii) currently, the Company has liquidity in excess of its short and medium term investment programmes, given that its subsidiaries are able to self-finance their development; (iv) the Company has a significant amount of distributable reserves which are in any case sufficient for the transaction at the analysis stage.

The Offer would enable shareholders who intend to accept it – with equal conditions for all – to benefit from a temporary increase in the liquidity of their investment at a price that is certain and that would contain a premium over the average prices of the share in recent months.

For shareholders who decide not to accept the Offer, the buyback of own shares by the Company resulting from acceptance of the Offer would lead to an increase in the earnings per share (EPS) and the dividend per share, provided the total earnings remain unchanged. This would be the case even if the own shares bought back were not cancelled but remained in the Company’s portfolio because the dividend rights of own shares are allocated pro rata to the other shares, as per the terms of Art. 2357-ter, second paragraph, of the Civil Code.

From the Company’s viewpoint, the Offer can be considered a prudent investment of liquidity; indeed (i) the investment would be made a lower value than the intrinsic value of the shares and (ii) as long as the shares are kept in the portfolio, their purchase would not reduce the Company’s financial resources permanently as they could be used for possible acquisitions and/or the development of alliances.

INTENTION OF DELISTING THE FINANCIAL INSTRUMENTS OF THE OFFER

OBLIGATION TO BUY BACK SHARES AS PER THE TERMS OF ARTICLE 108, PARAGRAPH 2 OF THE TUF

The Offer consists of a voluntary partial public tender offer launched pursuant to Articles 102 and following articles of the TUF and is not aimed at, nor will it result in, the withdrawal of the ordinary shares of the Issuer from their listing on the MTA (delisting).

Therefore, in view of the nature of the Offer, the conditions for an obligatory buyback as per the terms of Article 108, paragraph 2, of the TUF do not exist.

RIGHT TO BUY BACK SHARES AS PER ARTICLE 111 OF THE TUF AND OBLIGATION TO BUY BACK SHARES AS PER ARTICLE 108, PARAGRAPH 1, OF THE TUF

The Offer is a voluntary partial tender offer launched in accordance with Articles 102 and following articles of the TUF and does not have the aim of delisting the ordinary shares of the Issuer from trading on the MTA market.

Therefore, in view of the nature of the Offer, the conditions do not exist either for the right to buy back own shares as per Article 111 of the TUF or for the obligation to buy back own shares as per Article 108, paragraph 1, of the TUF.

NON-APPLICABILITY OF THE OBLIGATION TO LAUNCH AN INCREMENTAL BUYBACK OF SHARES AS PER ARTICLE 106, PARAGRAPH 3, LETTER B), OF THE TUF AND ARTICLE 46 OF THE RULES FOR ISSUERS

The controlling shareholder FDB owns 392,851,536 CIR shares, representing 30.759% of the share capital of the Issuer and 45.256% of the voting rights that can be exercised at the General Meetings of the Shareholders (44.736% in terms of the percentage for the purposes of the mandatory OPA).

It should also be noted that Rodolfo De Benedetti, Chairman of the Board of Directors of the Company and of the Board of Directors of the shareholder F.LLI DE BENEDETTI S.p.A., directly and indirectly owns 16,497,569 shares and 16,497,569 voting rights of the Company.

In light of the decision taken by Fratelli De Benedetti S.p.A. not to accept the Offer, the percentage of its voting rights could increase as an effect of the acceptance of other shareholders.

FDB has also notified the Issuer that it is not interested in launching a Public Tender Offer for all of the shares and is committed for now, should it be necessary, to give up a sufficient number of its increased voting rights and in any case not to exercise any excess votes to the extent of reducing them, if as an effect of the Company’s buyback transaction, the conditions were to exist for an obligatory OPA.

It should also be pointed out that the increased vote mechanism adopted by the Company makes it impossible to predict with certainty the extent of any increases in the percentage of voting rights by the controlling shareholder, even in the event that the whole of the offer is accepted.

HOW THE OFFER WILL BE FINANCED

To provide financial cover for the Offer, which would be for a maximum amount of Euro 80,000,000, CIR intends to use part of the cash liquidity, some of which came from the sale of its interest in GEDI Gruppo Editoriale S.p.A. completed on April 23 2020, which can cover the entire amount.

The maximum amount of the Offer is lower than the Company’s distributable reserves, which at December 31 2020 amounted to Euro 96.5 million, in compliance with what is set out in the first paragraph of Art. 2357 of the Civil Code, which establishes that the buyback of own shares may take place within the limits of the distributable earnings and the available reserves resulting from the most recent financial statements regularly approved.

Since December 31 2020 no significant negative events have taken place.

CONDITIONS FOR THE OFFER TO TAKE EFFECT

To be effective the Offer is subject (A) to the non-occurrence by the end of the first Stock Exchange trading day after the end of the Acceptance Period of (i) any exceptional events or situations at national and/or international level involving important changes in the political, financial, economic, currency situation or any market change that had not arisen on the date of publication of the Offer Document and which could substantially prejudice the Offer, the conditions of the businesses and/or the patrimonial, economic and/or financial conditions of CIR and/or of the companies belonging to the CIR Group, or of (ii) acts, facts, circumstances, events or situations that had not arisen as of the date of publication of the Offer Document and which could substantially prejudice the Offer, the conditions of the businesses and/or the patrimonial, economic and/or financial conditions of CIR and/or of the companies belonging to the CIR Group as resulting from the most recent financial statements approved by the Issuer, and/or (B) to the competent institutions, entities or authorities not adopting and/or publishing, by the end of the first Stock Exchange trading day after the end of the Acceptance Period, any legislative or administrative acts or measures (including public tender offer obligations as per Articles 106 and following articles of TUF) or judicial measures that preclude, limit or make it more financially onerous totally or partially, even temporarily, for CIR and/or the CIR Group to complete the Offer ((A) and (B), jointly, the “Conditions of the Offer”).

The conditions stated in letter A above include the non-occurrence of events with the characteristics as above and that arise as a consequence of or in relation to the spread of the Covid-19 pandemic (which, although it is today a publicly acknowledged phenomenon, could have consequences that at present cannot be foreseen in any way on any area of the business), including as an example that is in no way exhaustive, a crisis, temporary suspension or closure of the financial markets and/or of production activities and/or of services that could have, or could reasonably have, prejudicial effects on the Offer and/or on the Issuer or on the companies that the latter controls.

The Offeror can waive or amend all or some of the terms of the Conditions of the Offer at any moment and with an indisputable decision within the limits and following the procedures contained in Article 43 of the Rules for Issuers.

The Offer is not subject to reaching a minimum number of acceptances.

DURATION OF THE OFFER

The Period of Acceptance of the Offer will be agreed upon with Borsa Italiana and will be between a minimum of 15 and a maximum of 40 trading days, as per Article 40, paragraph 2, letter b) of the Rules for Issuers, unless the Offeror gives notice of a deferral as per the terms of current legislative and regulatory rules.

NOTIFICATION OR APPLICATION FOR AUTHORIZATION REQUIRED BY APPLICABLE REGULATIONS

The Offer is not subject to authorization. The Annual General Meeting of the Shareholders held on April 30 2021 approved a resolution authorizing the buyback for a period of 18 months of a maximum of 225,000,000 (and in any case up to the legal limit) own shares following possible procedures, including the Offer at a price that must not be more than 15% higher or lower than the benchmark price recorded in the Stock Exchange trading session on the day before the day on which the purchase price is fixed (the AGM resolution is available on the website www.cirgroup.it in the Governance section).

WEBSITE FOR THE PUBLICATION OF PRESS RELEASES AND DOCUMENTATION RELATING TO THE OFFER

The press releases and the documents relating to the Offer will be available for consultation on the Issuer’s website www.cirgroup.it in the Governance section.

The press releases and the documents relating to the Offer will also be available for consultation at CIR’s registered office in Milano, Via Ciovassino 1.

APPLICABILITY OF EXEMPTIONS AS PER ARTICLE 101-BIS, PARAGRAPH 3, OF THE TUF

According to what is stated in Article 101-bis, paragraph 3, letter d) of the TUF, the rules of Articles 102 (Obligations of offerors and interdictive powers), paragraphs 2 and 5, Article 103, paragraph 3-bis (The Offer Process), 104 (Defences), 104-bis (Neutralization rule) and 104-ter (Reciprocity clause) of the TUF and any other rule of the TUF that involves specific disclosure obligations for the Offeror or the Issuer towards employees or their representatives will not be applicable to the Offer.

MARKETS FOR THE OFFER

The Offer is being launched exclusively for the Italian market, the only market on which the Shares are listed and is aimed at all of the Issuer’s shareholders, without distinction and at equal conditions.

The Offer is not being and will not be launched in the United States of America, Canada, Japan or Australia, or in any other country in which such launch is not allowed without authorization by the competent authorities (“Other countries”) or using instruments for communication or international commerce (including, for example, the postal network, fax, telex, e-mail, telephone or the internet) of the United States of America, Canada, Japan, Australia or Other Countries,or any structure of any financial intermediary of the United States of America, Canada, Japan, Australia or Other Countries, or in any other way.

Acceptance of the Offer by persons or entities resident in countries other than Italy may be subject to specific obligations or restrictions contained in their legislation or regulations. It is the exclusive responsibility of the offerees to comply with such regulations and thus before accepting the Offer they should check with their advisors whether any such rules are applicable.

ADVISORS FOR THE DEAL

CIR is assisted by Prof. Piergaetano Marchetti as legal advisor and by UniCredit S.p.A. as financial advisor.

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- 14:19 CEST

CIR: AGM approves Financial Statements for 2020

Milan, April 30 2021 – The Annual General Meeting of the Shareholders of CIR S.p.A. was held today in Milan under the chairmanship of Rodolfo De Benedetti, with an ordinary and an extraordinary session.

As per the terms of Art. 106, paragraph 4, of Decree Law no. 18 of March 17 2020, the Shareholders were able to attend exclusively through the designated representative, appointed in accordance with 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 also assigned under Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph 4, of the same TUF.

Approval of the Financial Statements for 2020

In the ordinary part of the Meeting the Shareholders approved CIR’s Financial Statements for the year 2020. The group closed the year with consolidated revenues of € 1,834.8 million (€ 2,001.6 million in 2019) and net income of € 16.3 million. The parent company CIR S.p.A. reported net income of € 2.6 million.

The Meeting adopted the proposal put forward by the Board of Directors not to distribute any dividends.

Compensation Policy and Stock Grant Plan

The Shareholders’ Meeting approved the first section of the Report on Compensation Policy and Remuneration Paid and expressed a vote in favour of the second section of the said report.

The Shareholders also approved the 2021 Stock Grant Plan, 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 free of charge 1 CIR share. The shares will be made available from the Company’s treasury shares. The plan has the aim of aligning the interests of management with the objectives of creating value for the group and its shareholders over a medium-long term time horizon and of retaining key managers in the group.

Authorization to buy back own shares

The Shareholders’ Meeting authorized the Board of Directors, for a period of 18 months, to buy back a maximum of 225,000,000 own shares and in any case up to 20% of the total number of shares making up the share capital (taking into account the own shares that the Company is already holding, which as of today amount to 26,819,394, equal to 2.1% of the total number of shares), at a unit price that must not be more than 15% higher or lower than the benchmark price recorded by the shares in the Stock Exchange trading session preceding the date of each individual buy-back transaction or preceding the date on which the price is fixed. Where such buybacks are effected through orders placed on the regulated market the price of the deal must not be higher than the higher of the price of the most recent independent transaction and the highest current independent bid price in the same market, in compliance with the provisions of Delegated Regulation (EU) no. 2016/1052.

The main reasons for renewing the authorization are the following: i) to fulfil obligations resulting from possible stock option plans or other awards of the Company’s shares to employees or members of the Board of Directors of CIR or its subsidiaries; ii) to have a portfolio of own shares to use as consideration for possible extraordinary transactions, even those involving an exchange of equity holdings, within the scope of transactions of interest to the Company (a stock of securities); iii) to support the liquidity of the shares in the market, optimizing its capital structure and remunerating the Shareholders in particular market conditions; iv) to take advantage of opportunities for creating value, as well as investing liquidity efficiently in relation to the market trend; v) 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.

Reduction of the number of Board Members

The AGM reduced to eleven, from twelve, the number of members of the Board of Directors. Following the resignation for personal reasons of Director Pia Hahn Marocco, at the meeting held on March 29 2021 the Board decided not to co-opt a new Director but to propose to the Shareholders a reduction of the number of Directors, being convinced that, even with such reduction, the number of member would still be adequate and acknowledging that its composition conforms with the rules of law and with the Company’s Corporate Governance Code as regards independence, gender balance and variety of competences.

Amendment of the Company Bylaws

In the extraordinary part of the meeting, the Shareholders abolished the nominal value of the shares, approving the amendment of Art. 4, paragraph, of the Company Bylaws. The introduction of shares without a nominal value is a useful flexibility tool as it simplifies a broad range of capital transactions for the Company.

Board of Directors Meeting

On the strength of the authorization given by the AGM, the Board of Directors implemented the 2021 Stock Grant Plan by assigning 3.565.284 rights.

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- 18:10 CEST

Sogefi: AGM approves Financial Statements for 2020

SOGEFI: AGM APPROVES FINANCIAL STATEMENTS FOR 2020

BOARD OF STATUTORY AUDITORS APPOINTED FOR THREE YEARS 2021-2023

SIPAHI CONFIRMED AS CEO

Milan, April 23 2021 – The Annual General Meeting of the Shareholders of Sogefi S.p.A. was held today under the chairmanship of Monica Mondardini.

As per the terms of Art. 106, paragraph 4, of Decree Law no. 18 of March 17 2020, the Shareholders were able to attend only through the designated representative, appointed in accordance with 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 also assigned as per Art. 135-novies of the TUF, in waiver of Art. 135-undecies, paragraph 4, of the TUF.

Approval of the Financial Statements for 2020

The Shareholders approved the Financial Statements for the year 2020. Sogefi closed the year with consolidated revenues of € 1,203.2 million (€ 1,463.8 million in 2019), EBITDA of € 137.6 million (€ 177.4 million in 2019) and a net result of ongoing operations posting a negative result of € 19.6 million (net income of € 11.1 million in 2019). The parent company of the group Sogefi S.p.A. reported a loss of € 6.2 million (net income of € 7.7 million in 2019).

The Shareholders’ Meeting adopted the proposal put forward by the Board of Directors that no dividends be distributed.

Compensation Policy and Stock Grant Plan

The AGM approved the first section of the Report on Compensation and remuneration paid and expressed a vote in favour of the second section of the same Report.

The Shareholders also approved the stock grant plan for 2021 aimed at employees of the Group holding strategically important roles for a maximum of 1,000,000 conditional rights, each of which will give the beneficiaries the right to be assigned free of charge 1 Sogefi share. The shares thus assigned will be made available from the own shares held by the Company. The plan aims to align the interests of management with the objective of creating value for the Group and its Shareholders over a medium-long term time horizon, stimulating the commitment to achieving common objectives at Group level and encouraging those who hold important positions to remain with the Group.

Authorization to buy back own shares

The Shareholders renewed for a period of 18 months its authorization of the Board of Directors to buy back a maximum of 10 million of its own shares (including 2,094,831 own shares being held today, equal to 1.744% of the share capital), at a unit price that must not be more than 10% higher or lower than the benchmark price recorded by the shares in the stock exchange trading session preceding each individual buyback transaction or the date on which the price is fixed an, in any case, when the purchases are made in the regulated market the price cannot be higher than the higher of the price of the last independent transaction and the highest current independent bid price in the same market, in compliance with the terms set out in EU Delegated Regulation no. 2016/1052.

The main reasons why this authorization is being renewed are the following: to fulfil 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 associated companies; to fulfil obligations resulting from any debt instruments convertible into or exchangeable with equity instruments; to support market liquidity of the shares within the limits of current rules; to take advantage of opportunities for creating value, and invest liquidity efficiently in relation to market trends; 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.

Appointment of a director and of the Board of Statutory Auditors

The Shareholders’ Meeting appointed Frédéric Sipahi – co-opted by the Board, as per the terms of Art. 2386 of the Civil Code, on February 26 2021 – as a director of the Company.

The Shareholders also appointed the members of the Board of Statutory Auditors of the Company for the three years 2021-2023. The auditors in office are Daniela Delfrate (Chairman of the Board of Statutory Auditors), Giovanni Barbara and Rita Rolli. The alternate auditors are Maria Pia Maspes, Luca Del Pico and Anna Maria Allievi. The auditors were drawn from the list presented by the majority Shareholder CIR S.p.A., with the exception of the Chairman Daniela Delfrate and alternate auditor Maria Pia Maspes, who were selected from the minority list presented by YODA Società Semplice.

Board of Directors Meeting

The Board of Directors, which met after the AGM, confirmed Frédéric Sipahi as Chief Executive Officer of Sogefi. Since March 1 2021 he has also held the position of General Manager. His curriculum vitae is available on the website www.sogefigroup.com.

The Board verified the presence of the requisites for the independence of the directors who have attested that they are independent, Patrizia Canziani, Roberta Di Vieto, Mauro Melis, Ervino Riccobon and Christian Georges Streiff. Five directors out of a total of eight are therefore independent. The Board of Statutory Auditors in its turn verified the presence of the requisites for the independence of its members; the curricula vitae of the auditors are available on the website sogefigroup.com. All the independent directors and the members of the Board of Statutory Auditors are therefore in possession of the requisites established by law and by the Code of Corporate Governance adopted by the Company.

Lastly, the Board of Directors, on the strength of the authorization granted by the AGM, proceeded to implement Stock Grant Plan 2021 by assigning 897,500 rights.

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- 16:18 CEST

Sogefi: results for first quarter 2021

RESULTS FOR FIRST QUARTER 2021

REVENUES RECOVER AND PROFITABILITY IMPROVES

Revenues significantly higher at € 356.6 million (+9.3% at constant exchange rates) outperforming the market in all geographical areas

EBITDA margin at 15.4% of revenues up from Q1 2020 (11.3%) and Q1 2019 (11%)

Net income € 11.8 million (loss of € 5.6 million in first quarter 2020 and earnings of € 1.6 million in first quarter 2019)

Free Cash Flow positive for € 32.4 million versus € 5.4 million in Q1 2020

Milan, April 23 2021 – 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 March 31 2021, presented by Chief Executive Officer Frederic Sipahi.
Sogefi, a company of the CIR Group, is one of the main global producers of automotive components for three sectors: Air and Cooling, Filtration and Suspensions.

In the first quarter of 2021 world car production reported growth of 14% compared to first quarter 2020 with the month of March posting +34.7% compared to the previous year. The recovery in the first quarter of 2021 was mainly attributable to China, the first country to be hit by the pandemic in 2020, where production rose by 78.2% compared to the first quarter of the previous year. India and Mercosur also saw a recovery in the market (+22.8% and +4.6% respectively), while the EU and NAFTA reported volumes below those of first quarter 2020 (-0.9% and -4.5% respectively).

However, world production was still below pre-Covid levels: more specifically, compared to the first quarter of 2019, it was -11.3%, with Europe at -20%, NAFTA at -14.7% and China at -4.2%.

During first quarter 2021, the Group’s priority continued to be the safety of its employees; all measures for health and safety in the workplace were kept in place to reduce the risk of contagion, with social distancing, the use of individual protective equipment and measures to limit the presence of people in the workplace with employees working from home.

The Group reported a significant recovery in revenues: +5% at historical exchange rates and +9.3% at constant exchange rates; compared to the first quarter of 2019, revenues came in at -5.2%, versus the -11.3% of world production.

The recovery in revenues together with the action plan put in place to counter the impact of the crisis, enabled the group to close the first quarter with earnings of € 11.8 million (a loss of € 5.6 million in the first quarter of 2020) and a positive free cash flow of € 32.4 million (€ 5.4 million in the first quarter of 2020).

Moreover, in the period Sogefi acquired new contracts worth more than those of the same period of previous years and in line with the objectives of increasing its market share, and a significant part of these new orders were for hybrid or full electric vehicles, thus positioning itself in the markets of the future.

More specifically, the Air and Cooling division closed an important contract (Lifetime Value: € 260 million) to supply new generation air aspiration manifolds for a prime North American OEM. More new orders were also acquired from Chinese and North American producers, of which around 40% of their value was for parts for cooling hybrid or full electric vehicles.

The Filtration division also obtained important orders from North American and European customers for traditional components (especially oil filters), which will be produced in the US and Moroccan plants, and signed new contracts for the production of air filters for interiors.

As for the Suspensions division, 35% of the value of the orders acquired was for hybrid or full electric vehicles. In the first quarter of the year new orders were also acquired for light commercial vehicles and heavy goods vehicles, market segments with good prospects for the coming years.

REVENUES

In the first quarter of 2021 Sogefi’s sales revenues came in at € 356.6 million, and were higher than those of the same period of 2020 by 5% at historical exchange rates and 9.3% at constant exchange rates; sales were down by 5.2% on first quarter 2019. After the first two months with revenues at historical exchange rates down by 8.7%, in March, the month in 2020 when the effects of the pandemic started to be evident (with a fall of 30%), there was a strong recovery (+42.1%), with volumes substantially in line with those of 2019.

Performance of revenues by geographical area

The performance of revenues at constant exchange rates was better than that of the market in all geographical areas: +1.9% in Europe compared to the market’s -0.9%, +3.3% in North America versus -4.5%, and +104.5% in China versus the market’s +78.2%. The lower growth of the Group’s total revenues (+9.3%) compared to those of global markets (+14%) was due to the fact that China, which was the area of the world in which there was most growth in the first quarter, accounts for 6.7% of the Group’s sales, whereas at market level it accounts for 28.1%.

Performance of revenues by Business Unit

In terms of the business sectors, Air and Cooling reported good growth (+15.2% at constant exchange rates) thanks to the development of the contract portfolio especially in China, where revenues doubled compared to the previous year; revenues at current exchange rates were 2.6% higher than those of first quarter 2019.

Filtration reported more moderate growth (+4.2% at constant exchange rates), following a decline in 2020 that was decidedly more limited than that of the market thanks to the After Market business. In the first quarter of 2021 sales were slightly higher (+2.1% at current exchange rates) than those of first quarter 2019.

Lastly, Suspensions reported revenue growth of 9.7% at constant exchange rates, due to the good performance in China and South America, but business remains significantly below the level of the corresponding period of 2019 (-16.9% at current exchange rates).

OPERATING RESULT AND NET RESULT

EBITDA came in at € 54.8 million and was higher than the figure reported for the first quarter of 2020 (€ 38.2 million) and 2019 (€ 41.4 million); gross profitability (EBITDA / Revenues %) rose to 15.4%, from around 11% in the first quarters of 2019 and 2020.

The contribution margin improved from 30.3% to 30.7%, despite the tension in the market over the availability and pricing of raw materials.

The rationalization measures adopted in 2020 which continued through the early months of 2021 led to a reduction of 5.5% in fixed costs compared to first quarter 2020, which, combined with the recovery of the business, gave rise to a reduction in the ratio of fixed costs to revenues which declined from 18% in the first quarter of 2020 to 16.1% in the same period of 2021. It should be noted that, compared to first quarter 2019, fixed costs fell by 13.8%.

Lastly, the increase in EBITDA had a further boost from the positive effect of exchange rates (€ +1.7 million in 2021 versus € -3.4 million in first quarter 2020) and from the recognition of a non-operating gain of € 2.4 million.

EBIT came to € 25.9 million, up from € 7.9 million in the same period of 2020 and from € 12.5 million in the first quarter of 2019. Financial expense, amounting to € 6.2 million, was in line with the corresponding period of 2020, tax expense came to € 6.1 million, versus € 2.5 million in the previous year, and the net result of “discontinued operations” was a negative € 0.8 million, versus € -4.9 million in first quarter 2020.

The Group reported net income of € 11.8 million compared to a loss of € 5.6 million in first quarter 2020 and earnings of € 1.6 million in first quarter 2019.

DEBT AND EQUITY

Free Cash Flow was a positive € 32.4 million (€ 5.4 million in first quarter 2020), thanks to the higher EBITDA and the favourable performance of working capital.

Net debt before IFRS16 stood at € 261.1 million at March 31 2021, down from the end of 2020 (€ 291.3 million) and substantially unchanged from March 31 2020 (€ 256.7 million). The Group managed to keep its debt level stable despite the dramatic effects of the pandemic on the business during the last 12 months.

Including financial payables for rights of use as per IFRS 16, net debt at March 31 2021 stood at € 328.4 million, which compares with € 358.1 million at December 31 2020 and € 313.4 at March 31 2020.

As of March 31 2021 the Group had committed credit lines in excess of its borrowing requirement of € 362 million (of which € 100 million is needed to repay its convertible bond maturing in May 2021).

At March 31 2021 Shareholders’ equity, excluding minority interests, amounted to € 150.6 million (€ 133.0 million at December 31 2020).

THE IMPACT OF COVID-19 ON THE BUSINESS

In the early months of 2021, although the pandemic crisis is still continuing, its effects on the market in which the Company operates were less traumatic than those experienced in March 2020 and the following months. However, as shown in the data for vehicle production in the period, business remains very weak especially in Europe and NAFTA.

In addition to having taken action as from March 2020 to reduce the impact of the crisis, the Group has been working and will continue to work on a process of structural adaptation to the changed circumstances of the market in a context that is still uncertain.

OUTLOOK FOR THE YEAR

In addition to there being at present little visibility as to the direction of the market in the next few months as this will depend on the evolution of the pandemic, there is also uncertainty regarding the trend of raw material prices (mainly steel), their availability (semiconductors) and logistics issues involving transport and sourcing from Asian markets.

For the second quarter of 2021, IHS expects that world production will rebound by 58% compared to the second quarter of 2020 (the period that saw the maximum negative effect of the pandemic worldwide with the sole exception of China), while remaining 10% lower than in Q2 2019.

For full year 2021 the market is expected to grow by 11.9% but to remain at lower levels than those of 2019 with the recovery of a good part of the collapse recorded in 2020, reaching -6.2% compared to 2019.

Sogefi confirms the view it expressed on the publication of its results for 2020, i.e. that in a market scenario such as that explained above, incorporating the effects of the decisive action taken in 2020 and ongoing in 2021 to reduce the impact of fixed costs and to improve profitability structurally, it expects to return to a positive result for full year 2021 and to be able to achieve a ratio of EBIT to sales at least on a par with what was reported for 2019.

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- 21:50 CEST

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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- 13:58 CET

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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- 16:12 CET

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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