CIR: results for first half 2023

Consolidated revenues € 1,223.1 million, up by 11.9% compared to first half 2022

Consolidated net income € 14.0 million

Significant growth in revenues and results of Sogefi

Ongoing sustained recovery of KOS’ activity

Further reduction in consolidated net debt to € 32.9 million (€ 81.8 million at 31 December 2022)

Net financial position of the parent company stable and positive for € 314.0 million

Milan, 31 July 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 Semi-Annual Financial Report as of 30 June 2023 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

Although the environment remained complex, in the first half of 2023 the adverse phenomena that had in the last three years negatively affected the business sectors in which the Group operates became decidedly less severe: the healthcare emergency phase linked to the pandemic had ended, the tensions regarding the availability and prices of commodities and energy, which had worsened in the first half of 2022 with the onset of the Russian-Ukrainian conflict, but which do nevertheless remain, are in a phase of partial resolution and, lastly, the financial markets are showing a strong recovery after the very negative performance of 2022. However, the general inflationary dynamic has led to a significant increase in costs for services and personnel costs and the higher interest rates have increased financial expense for the subsidiaries, mitigated by the fact that a part of their funding is at a fixed rate and their overall debt has declined.

During the first half of the year, the group’s social healthcare sector (KOS) has been continuing steadily along the road to recovery of its business activity, which began in the middle of 2021 after the shock caused by the pandemic, with the prospect of returning to full capacity in 2024.  

The group’s automotive sector (Sogefi), which was negatively affected by the market collapse of 2020 and the commodities dynamics of 2021 and 2022, in the first half of the year 2023, in a context of a recovering market, particularly the European market, has reported strong growth of revenues and results, which in 2023 have been significantly above pre-pandemic levels.

The consolidated revenues of the Group came in at € 1,223.1 million, up by 11.9% compared to the first half of 2022, with positive dynamics in both sectors of the group’s business.

The consolidated gross operating margin (EBITDA) came to € 170.0 million, posting a rise of 15.4% on the same period of 2022, thanks to the higher revenues and profitability of both sectors in which the group operates.

The net result was € 14.0 million versus breakeven in the first half of 2022.  

The consolidated net financial debt before IFRS 16 fell to € 32.9 million at 30 June 2023 from € 81.8 million at 31 December 2022 and € 95.6 million at 30 June 2022, thanks to the reduction of the net debt of the subsidiaries, which in total amounted to € 346.9 million.  

The net financial position of the Parent Company of the Group (including the financial sub-holdings CIR Investimenti and CIR International) was significantly positive, standing at € 314.0 million; the slight reduction from the position of € 320.4 million at 31 December 2022 was due to the buyback of own shares for € 7.7 million during the period.

The consolidated net debt including the IFRS 16 payables amounted to € 910.9 million at 30 June 2023, including rights of use of € 878.0 million relating mainly to the subsidiary KOS (€ 812.7 million), which operates mostly in leased facilities.

The shareholders’ equity of the Group stood at € 747.3 million at 30 June 2023 (€ 743.4 million at 31 December 2022).


KOS’s business activity was strongly affected by the consequences of the pandemic in 2020 and 2021 but reported a gradual recovery as from the middle of 2021. In the first half of 2023 the Functional Psychiatric Rehabilitation sector returned to full operating capacity; the nursing homes sector has not yet reached full capacity but the trend is positive both in Italy and in Germany.

The results of first half 2023 were impacted by the rise in the cost of healthcare personnel and procurement, particularly in Germany where this impact is currently being absorbed with gradual adjustments to tariffs and with the deflation of energy costs.

Revenues for the first half of 2023 totalled € 370.7 million, with a rise 9.9% on the first half of 2022, thanks to the recovery in all sectors: nursing homes (RSAs) in Italy, +13.2%, and in Germany, +15.8%, where the increase in revenues was also driven by significant increases in tariffs, as well as Functional and Psychiatric Rehabilitation (+6.4%).

EBIT came to € 20.8 million, posting an increase of € 10.1 million compared to the EBIT of the first half of 2022 (€ 10.7 million), thanks to the increased business activity and the recovery of operating efficiency despite the inflation of costs and the discontinuation of the significant support guaranteed by the German healthcare system to healthcare operators until July 2022.

The net result was a positive € 0.8 million, versus – € 2.9 million in first half 2022.

Free cash flow, before the application of IFRS16, was positive for € 16.4 million; non-recurring income of € 36.3 million was reported (from the sale of the Indian operation in the Diagnostics and Oncological Treatments sector and of certain properties in Italy), and a negative operating cash flow of approximately € 20.0 million, due to the increase in working capital of approximately € 25.0 million, which should be absorbed at least in part during the year.

Net debt, excluding the payables resulting from application of accounting standard IFRS16, totalled € 161.9 million at the end of June 2023, down from € 178.3 million at 31 December 2022 and € 192.9 million at 30 June 2022.

On 28 June 2023 the sale was completed of the Diagnostics and Cancer Care subsidiary in India, concluding the strategic refocusing process undertaken in 2020 with the sale of Medipass. The price, or equity value, of the sale was € 18.8 million.


In a context of global growth in car production of 11.2% compared to the equivalent period of 2022 with progress achieved in all geographical areas and a strong recovery in Europe, in the first six months of 2023 Sogefi’s consolidated revenues came in at € 852.4 million, recording growth of 12.8% and 14% at constant exchange rates. This reflects the increase in production volumes (+9.4%) and selling prices (+4.2%). Sogefi outperformed the market in NAFTA, China and India.

EBIT, amounting to € 54.8 million, increased by 35.6%, with an EBIT margin of 6.4% of revenues, up from 5.3% in the first half of 2022. All business lines reported higher profitability thanks to volumes and to the fact that margins held up despite the impact that inflation had on costs.

Net income was € 31.4 million (+51% from € 20.8 million in the first half of 2022).

Free cash flow was positive for € 45.0 million, including factoring (€ 41.2 million at 30 June 2022).

Net debt (before IFRS16) stood at € 185.3 million at 30 June 2023 down from € 224.3 million at 31 December 2022.

The customer portfolio also performed positively with 32% of the value of new contracts destined for hybrid and electric platforms, with high growth potential.

Financial management

In the first half of the year global equity and bond markets reported a recovery after the very negative performances of 2022 and bond yields turned positive again after the central banks raised interest rates several times in order to counter inflation.

The management of the financial assets of the parent company and the financial subsidiaries gave slightly positive financial income (€ 0.9 million, with a return of 0.2% for the period) that compares with a negative € 5.1 million in the first half of 2022. More specifically, the overall return on liquid assets (shares, bonds, hedge funds) was 0.8%, while the remaining part of the portfolio (Private Equityand minority shareholdings) recorded a negative return of 2.2%, due partly to the unfavourable evolution of the euro/dollar exchange rate.

Significant events that have occurred since 30 June 2023

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

Outlook for the year

Visibility as to the trend of the businesses of the CIR Group in the coming months remains limited due to the uncertainties regarding the evolution of the macroeconomic scenario in a context of high inflation and still rising interest rates.

As far as KOS is concerned, operations are expected to return to full capacity in the Rehabilitation and Acute sectors during the current year while for nursing homes in Italy and Germany the trend of increasing occupancy has yet to be consolidated and it is expected that this will lead to full operational capacity between the end of 2023 and the beginning of 2024.  Because of the inflationary dynamics that have characterized the sector and particularly the rise in the cost of healthcare personnel, in order for profitability to recover there needs to be a gradual adjustment of tariffs both in Italy and in Germany, a subject currently under discussion between business associations and the institutions affected. Assuming there are no further factors or circumstances, unpredictable as of today, that could make the context even more complex than it is at present, the operating results of KOS for the whole year should be significantly higher than those of last year.

As for Sogefi, visibility as to the automotive market trend in 2023 again remains limited due to uncertainties regarding the evolution of the macroeconomic scenario. For 2023 S&P Global (IHS) expects world car production to grow by 5.3% on 2022, with Europe at +11.8%, NAFTA at +8.2%, India at +7.2% and South America and China substantially unchanged. As far as raw materials and energy are concerned, since the beginning of the year 2023 prices have been trending downwards but they remain high and very volatile. Assuming there are no further factors that could cause a deterioration of the macroeconomic scenario from today’s levels, for 2023 Sogefi expects to see mid-single-digit revenue growth, in line with forecasts for the automotive market, and higher profitability, excluding non-recurring charges, than that of 2022.

As for financial asset management, despite the better performance of the financial markets in the first half of the year, given the uncertainties linked to the macroeconomic and financial scenarios, it is expected that conditions of high volatility will remain in the second half of the year as well.