Board of Directors approves results as of September 30 2013
CIR GROUP: NET INCOME FOR FIRST NINE MONTHS AT € 10.7 MLN (LOSS OF € 10 MLN IN 2012)
Revenues at € 3.5 billion (-2.1%), EBITDA before non-recurring items at € 262.6 million (+3.8%).
Net financial position of the parent company is a positive € 540 million
For Sogefi and KOS results are slightly better. Espresso reports a decline in earnings but still with a positive result despite the severe crisis in publishing, while Sorgenia’s results remain critical and incorporate important write-downs
Non-recurring items: Lodo Mondadori
Milan, October 28 2013 – The Board of Directors of CIR-Compagnie Industriali Riunite SpA, which met today under the chairmanship of Rodolfo De Benedetti, has approved the results of the group at September 30 2013.
The CIR group operates in five sectors: energy (Sorgenia), media (Espresso), automotive components (Sogefi), healthcare (KOS) and non-core investments (private equity, minority shareholdings, other investments).
Performance of operations
In the first nine months of the year the CIR group reported significant results of a non-recurring nature. Firstly, on September 17 2013 the Court of Cassation issued its ruling on the “Lodo Mondadori” proceedings, sentencing the counterparty Fininvest definitively to pay CIR compensation of € 491.3 million, which was recognized in the income statement for an amount of € 319.3 million, net of legal costs and taxes. Secondly, as was already the case in the first half, the subsidiary Sorgenia made a readjustment to the value of its assets to bring them into line with the changed energy market scenario and with the new business plan currently being prepared. Consequently, the result for the first nine months includes write-downs for an amount of € 287.2 million net of minority interests.
The CIR group closed the period with a positive net result of € 10.7 million compared to a loss of € 10 million in the same period of 2012. The revenues of the group came in at over € 3.5 billion but were down slightly (-2.1%) while EBITDA before non-recurring items was slightly higher than in 2012. The net financial position of the parent company at September 30 2013, following the definitive ruling on the Lodo Mondadori, was a positive € 540 million. Regarding the performance of the main subsidiaries, Sogefi and KOS obtained slightly better results;
Espresso reported a decline in earnings, but still achieved a positive result despite the severe crisis in the publishing sector while the results of Sorgenia remain critical and incorporate important write-downs.
Consolidated results
The revenues of the CIR group at September 30 2013 totalled € 3,550.6 million and were slightly lower (-2.1%) than the figure of € 3,625.8 million reported in the same period of 2012.
EBITDA before non-recurring items came in at € 262.6 million versus € 253 million in the first nine months of 2012 (+3.8%). This improvement was due mainly to the higher EBITDA before write-downs of Sorgenia.
EBITDA after non-recurring items came to –€ 47.1 million. The margin was very negatively impacted by the write-downs of the Sorgenia group for a total amount of € 274.8 million.
The financial management result was a negative € 87.3 million, compared to a charge of € 70.2 million in the first nine months of 2012. More specifically, net financial expense came to € 80.6 million (€ 91.3 million in 2012), negative adjustments to the value of financial assets to € 13.8 million (positive adjustments of € 12.5 million in 2012) and net gains from trading and valuing securities to € 7.1 million (€ 8.6 million in 2012).
The net result of the CIR group was a positive figure of € 10.7 million versus a loss of € 10 million in the first nine months of 2012. This result includes, on the one hand, the negative effect of the extraordinary items in Sorgenia for -€ 287.2 million and, on the other hand, the positive effect totalling € 319.3 million from the final ruling on the Lodo Mondadori. Excluding these effects, the consolidated net result would have been a negative € 16.2 million, which is substantially in line with the result of the first nine months of 2012.
Consolidated net financial debt stood at € 1,830.8 million at September 30 2013 (down from € 2,504.4 million at December 31 2012) and consisted of a positive net financial position for the parent company of € 542.1 million and a net debt of the operating subsidiaries of € 2,372.9 million. The improvement in the financial position was due partly to the settlement of the compensation for the Lodo Mondadori, but also to the reduction of the consolidated net debt of the operating subsidiaries by approximately € 165 million.
In relation to the Lodo Mondadori, it should be noted that the company will have to pay out a currently estimated amount of approximately € 180 million in tax and legal costs over the next twelve months and after taking this into account the consolidated net debt should be around € 2 billion.
The company does not at present envisage significant investments of its liquidity in the short term. Any future application of the available financial resources will be evaluated in the interest of the development of the group and of all the shareholders of CIR.
The equity of the group amounted to € 1,387.6 million at September 30 2013 versus € 1,363.3 million at December 31 2012.
At September 30 2013 the CIR group had 14,199 employees (13,940 at December 31 2012).
Industrial Businesses
Energy: Sorgenia
Sorgenia is one of the main private operators in the electricity and natural gas sector in Italy with around 500 thousand clients and generating facilities of approximately 5 thousand Megawatts. The company is controlled by CIR (52.9%) and the main Austrian utility VERBUND also has an interest.
The revenues of the Sorgenia group in the first nine months of the year totalled € 1,734.2 million, and were down slightly (-1.4%) on the figure for 2012 (€ 1,758.2 million). EBITDA before write-downs came to € 116.2 million compared to € 49.6 million in the first nine months of 2012. The increase was due essentially to the partial recovery of profitability in the electricity sector, but just in the first half.
EBITDA after write-downs, including the adjustments to the value of investments consolidated at equity (particularly Energia Italiana/Tirreno Power) and provisions for receivables, came to -€ 196.9 million.
The net loss for the first nine months of the year of € 434.3 million (a loss of € 77.1 million in the first nine months of 2012) was due mainly to the write-down of assets for an overall amount of € 396.6 million.
More specifically, Sorgenia wrote down its international businesses in the E&P sector, the goodwill of its renewable businesses, as well as the write-down of Energia Italiana/Tirreno Power, together with other investments consolidated at equity and certain receivables. The actions undertaken by Sorgenia in recent quarters to counter the recession affecting Italy and the difficulties in the Italian energy market are continuing. Specifically, the company is engaged in meeting three priority objectives: refocusing on its core business of generating and selling energy, reducing its debt and recovering profit margins.
Media: Espresso
Gruppo Editoriale L’Espresso is one of the most important publishing companies in Italy. It operates in all sectors of communication: the daily and periodical press, radio, internet, television and the collection of advertising. The group is 55.9% controlled by CIR and is listed on the Stock Exchange.
The revenues of the Espresso group totalled € 524.4 million in the first nine months of 2013, posting a decline of 11.7% on the same period of the year 2012 (€ 594 million) as a consequence of the crisis that is affecting the whole sector. Circulation revenues, which came to € 215.3 million, showed a decline of 6.9% compared to the same period of last year (€ 231.2 million) in a market which continues to report a significant fall in the circulation of daily newspapers. The performance of the group titles was however positive compared to the market. Advertising revenues, which came to € 288.6 million, posted a decline of 15.7% on 2012, in a market which fell by 15.8%. Sundry revenues, which were € 20.6 million, remained substantially unchanged compared to the first nine months of 2012 (€ 20.5 million). Total costs went down by 7.8%; excluding the digital publishing activities and digital terrestrial television, the costs of which are increasing in order to support development, there was an overall decline of 12.2% thanks to the cost-cutting actions still in progress, especially in the industrial and administrative areas.
EBITDA came in at € 47.5 million, versus € 82.8 million in the first nine months of 2012. The net result was income of € 4.5 million down from € 26.4 million in the same period of 2012.
Automotive components: Sogefi
Sogefi is one of the main world producers in the sectors of filtration, engine air systems and suspension components with 43 production plants in 21 countries. The company is controlled by CIR (58.3%) and is listed on the Stock Exchange
The revenues of Sogefi in the first nine months of 2013 came to € 1,010.6 million and were up slightly from € 1,005 million in the same period of 2012 (+0.6%; +4.5% with the same exchange rates). In the first nine months the Engine Systems Business Unit reported revenues of € 619.7 million (+2.8% compared to the same period of 2012) and the Suspension Components Business Unit reported revenues of € 392.5 million (-2.8%). The company is continuing in its strategy of focusing on non-European countries, which reached 35.8% of the total revenues of the group, and were up by 2.9 percentage points compared to the first nine months of 2012. EBITDA was € 108.4 million, up by 9.8% on the same period of 2012 (€ 98.7 million). Net income came in at € 23.8 million and was up by 9.4% on the same period of 2012 (€ 21.7 million).
Healthcare: KOS
KOS is one of the most important Italian groups in the care-home sector(managing nursing homes and rehabilitation centres, and hospital facilities). Controlled by CIR (with 51.3%), KOS also has the Ardian group (formerly known as AXA Private Equity) as a shareholder.
The revenues of KOS came in at € 276.8 million in the first nine months of 2013, and were up by 4.3% on the figure for the same period of 2012 (€ 265.3 million), thanks to the development of the three business sectors, especially care homes and high-tech services (in hospitals). EBITDA came to € 41.3 million, posting a rise on the figure for the first nine months of 2012 (€ 37.9 million) mainly following the change in the perimeter and the development activities undertaken last year. Net income came in at € 9.6 million compared to € 8 million in the same period of 2012. Net financial debt stood at € 155.1 million at September 30 2013 versus € 173.6 million at June 30 2013. The KOS group today manages 68 facilities, mainly in the centre and north of Italy, for a total of around 5,971 beds in operation plus another 900 or so under construction.
In the sphere of high-tech services, business is continuing in India with the joint venture ClearMedi Healthcare LTD and in the United Kingdom with the subsidiary Medipass Healthcare LTD.
Non-core investments
The non-core investments of the group consist of private equity initiatives and minority shareholdings and other investments with a total value at September 30 2013 of € 187.7 million (€ 198.3 million at December 31 2012). In particular, the CIR group holds a diversified portfolio of funds in the private equity sector (fair value at September 30 2013 of € 67 million). Among the other investments, it should be noted that there is a 20% interest in the company Swiss Education Group, a world leader in managerial training in the hospitality sector, which reported growing revenues and margins in the first nine months of the year. Lastly, the CIR group has a portfolio of non-performing loans: the net value of the investment in this business at September 30 2013 was € 78.3 million.
Outlook for the year 2013
The performance of the CIR group in the last part of 2013 will be affected by the evolution of the macroeconomic environment, especially the performance of the Italian economy, which is characterized by a continuing recession. In this scenario all the main operating subsidiaries of the group will be continuing their actions to improve operating efficiency without however sacrificing business development initiatives.
Bonds maturing in the 24 months following September 30 2013
The company, which has a BB rating with a stable outlook issued by Standard&Poor’s, has no bonds maturing in the 24 months following September 30 2013.
The executive responsible for the preparation of the company’s financial statements, Giuseppe Gianoglio, hereby declares, in compliance with the terms of paragraph 2 Article 154 bis of the Finance Consolidation Act (TUF), that the figures contained in this press release correspond to the results documented in the company’s accounts and general ledger.
This is not a compatible browser.
To continue to navigate on this site, an updated or more recent browser is necessary
Before accessing the contents of this website, please read and accept the legal notice below.
The documentation and information contained in this area of the website are accessible only to persons who are not currently domiciled or located in the United States of America, Australia, Canada, Japan, or in any other jurisdiction other than Italy in which it is required an authorization by the competent regulatory authorities or other fulfillments (such Countries, included the United States of America, Australia, Canada, Japan, jointly the “Other Countries”).
The document and information contained in this area of the website are not, and must not be sent, or in any other way transmitted to or distributed to, directly or indirectly, in the United States of America, Australia, Canada, Japan or any Other Countries.
The documentation and information contained in this area of the website are not, and must not be sent by, or transmitted to or distributed to, directly or indirectly, persons resident or physically present in the United States of America, Australia, Canada, Japan, and do not constitute and cannot be interpreted as an offer to purchase or a solicitation of an offer to sell financial instruments addressed to U.S. Persons - as defined under the U.S. Securities Act of 1933, as amended, or to persons resident in Other Countries. The shares of COFIDE – Gruppo De Benedetti S.p.A. – which will change its company name to “CIR S.p.A. – Compagnie Industriali Riunite” on the effective date of the merger by incorporation with CIR S.p.A. – Compagnie Industriali Riunite - referred to in this area of the website have not been and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States of America absent registration or an applicable exemption from registration thereunder.
In order to access the information and documents contained in this area of the website I declare under my personal liability: not to be currently a U.S. Person, and not to find me at present in or not to be resident in the United States of America, Australia, Canada, Japan, or in any Other Country, and I have fully understood and accepted the limitations reported above.
The documentation and information contained in this area of the website are accessible only to persons who are not currently domiciled or located in the United States of America, Australia, Canada, Japan, or in any other jurisdiction other than Italy in which it is required an authorization by the competent regulatory authorities or other fulfillments (such Countries, included the United States of America, Australia, Canada, Japan, jointly the “Other Countries”).
The document and information contained in this area of the website are not, and must not be sent, or in any other way transmitted to or distributed to, directly or indirectly, in the United States of America, Australia, Canada, Japan or any Other Countries.
The documentation and information contained in this area of the website are not, and must not be sent by, or transmitted to or distributed to, directly or indirectly, persons resident or physically present in the United States of America, Australia, Canada, Japan, and do not constitute and cannot be interpreted as an offer to purchase or a solicitation of an offer to sell financial instruments addressed to U.S. Persons - as defined under the U.S. Securities Act of 1933, as amended, or to persons resident in Other Countries. The shares of COFIDE – Gruppo De Benedetti S.p.A. – which will change its company name to “CIR S.p.A. – Compagnie Industriali Riunite” on the effective date of the merger by incorporation with CIR S.p.A. – Compagnie Industriali Riunite - referred to in this area of the website have not been and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States of America absent registration or an applicable exemption from registration thereunder.
In order to access the information and documents contained in this area of the website I declare under my personal liability: not to be currently a U.S. Person, and not to find me at present in or not to be resident in the United States of America, Australia, Canada, Japan, or in any Other Country, and I have fully understood and accepted the limitations reported above.