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’ 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.


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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