Board of Directors approves results as of June 30 2016
CIR GROUP: REVENUES FOR THE FIRST HALF EXCEED € 1.3 BLN (+2.2%)
EBITDA HIGHER AT € 127.2 MLN (+5.6%)
Net income € 25.9 mln (€ 36.4 mln in 1H 2015, thanks partly to a capital gain in Espresso and to higher financial income in the parent company)
Net financial position of the parent company positive for € 313.3 mln
Over € 110 mln of investments in the first half, including an interest of 11.4% in KOS, which continues to post higher earnings, and in own shares
Milan, July 29 2016 – The Board of Directors of CIR-Compagnie Industriali Riunite S.p.A., which met today under the chairmanship of Rodolfo De Benedetti, has approved the Semi-annual Financial Report as of June 30 2016 presented by Chief Executive Officer Monica Mondardini.
The CIR group, founded in 1976, operates mainly in three business sectors: media (Gruppo Editoriale L’Espresso), automotive components (Sogefi) and healthcare (KOS).
Consolidated results
The revenues of the CIR group for the first half of 2016 came in at € 1,319.1 million, and were up by 2.2% from € 1,290.7 million in the corresponding period of 2015, underpinned by the growth of Sogefi (+4.6%) and KOS (+4.7%).
The gross operating margin (EBITDA) came to € 127.2 million (9.6% of revenues), and was up by 5.6% from € 120.5 million in 2015 (9.3% of revenues). The increase was due to the higher EBITDA of Sogefi and KOS, while Espresso reported a slightly lower margin.
The net income of the group came in at € 25.9 million, versus € 36.4 million in the first half of 2015; the difference was due entirely to the lower financial income of the parent company and the non-industrial subsidiaries and to the capital gain realized by Espresso in the first half of 2015 on the sale of the company All Music to Discovery.
The contribution of the industrial subsidiaries (Espresso, Sogefi and KOS) to consolidated earnings came to € 17.7 million in the first half of the year compared to € 21.9 million in 2015. Excluding the capital gain realized by Espresso on the sale in the first half of 2015, the contribution was up from € 16.7 million to € 17.7 million.
Espresso, in a market situation that is still difficult for the media and particularly for the print sector, reported a decline in sales revenues of 4.2%, a significantly positive net result (€ 12.1 million) and substantial cash flow generation (€ 28.9 million); the net financial position at June 30 2016 was a positive € 18.2 million. In the first half of 2015 the net result had been € 22.1 million, of which € 9.3 million was the capital gain on the sale of All Music.
Sogefi reported an increase in revenues of 4.6%, thanks to development in North America and China and despite the crisis of the South American market (revenues, excluding Mercosur, rose by 7.6%). EBITDA was up from € 62.4 million in the first half of 2015 to € 74.7 million in 2016, while net income was slightly lower (from € 9.7 million in 2015 to € 8.3 million in 2016) as an effect of higher amortization and write-downs, financial expense and taxes. Cash flow was by and large balanced in the first half of 2016 compared to – € 51.9 million in the first half of 2015 (net debt stood at € 326.2 million at June 30 2016, more or less in line with the figure for December 31 2015).
Lastly, KOS reported a rise in sales revenues of 4.7%, thanks particularly to the growth in the nursing-home segment after the acquisitions made in 2015; the net result was € 9.6 million (€ 7.6 million in first half 2015). The cash flow for the period, before dividends, was a positive € 3.4 million (net debt was € 226.3 million at June 30 2016, versus € 210.0 at December 31 2015, after the distribution of dividends for € 19.7 million).
The contribution of the parent company CIR S.p.A. and the non-industrial subsidiaries was a positive € 8.2 million, down from € 14.5 million in the first half of 2015. The decline was due the significant gains from the sale of hedge funds realized in 2015 and to the lower return on the equity portfolio.
Consolidated net financial debt stood at € 218.2 million at June 30 2016, from € 121.7 million at December 31 2015. The total net debt of the industrial subsidiaries of € 531.5 million decreased in the first half by € 8.1 million. The net financial position of the parent company CIR S.p.A. and the non-industrial subsidiaries was a positive € 313.3 million at June 30 2016, down from € 417.9 million at the end of 2015, after investments of € 112 million (including € 84.5 million for the purchase of an 11.4% interest in KOS and € 17.1 million for the buyback of own shares) and the distribution of dividends for € 29.5 million.
The equity of the group amounted to € 1,021.6 million at June 30 2016 versus € 1,103.0 million at December 31 2015. Despite the significantly positive net result for the period, the decline was due to the distribution of dividends for € 29.5 million, the buyback of own shares for € 17.1 million and the recognition in the accounts of the further equity interest acquired in KOS on the percentage of equity rather than on the
price paid, in application of IFRS 3.
At June 30 2016 the CIR group had 14,607 employees (14,213 at December 31 2015).
Results of the industrial subsidiaries of the CIR group
Media: Espresso
Gruppo Editoriale L’Espresso is one of the most important publishing companies in Italy. It operates especially in the following sectors: newspapers and magazines, radio, internet and the collection of advertising. The group, which is 56.5% controlled by CIR, is listed on the Stock Exchange.
The sales revenues of Espresso in first half 2016 came to € 292.9 million, down by 4.2% from € 305.7 million in the same period of 2015, with less of a decline than in previous years.
Circulation revenues (including other revenues) came in at € 122.2 million and were down by 4.7% on 2015 (€ 128.2 million) in a market that continues to report a significant reduction in the circulation of newspapers (-7.7% in the first five months of 2016 according to ADS figures). Advertising revenues declined by 3.8%, taking into account the general performance of advertising in the printed press. Radio advertising orders were substantially in line with the same period of last year, while print and the internet were affected by the critical performance of the market.
Costs were down by 3.2%: industrial costs and personnel costs particularly declined given the average reduction in personnel of 4.4% compared to the first half of 2015.
EBITDA came in at € 27.3 million, down from € 31 million in the first half of 2015.
The net income of businesses destined to continue came to € 11.2 million, versus € 12.9 million in first half 2015. The sale, at the end of January last year, of All Music to Discovery Italia generated capital gains, classified in discontinued operations, of € 9.3 million in first half 2015 and € 1 million in first half 2016 respectively. Net income came in at € 12.1 million, compared to € 22.1 million in first half 2015.
The net financial position at June 30 2016 was a positive € 18.2 million, as there was a financial surplus in the first half of € 28.9 million.
For further information on the results of Espresso, see the press release published by the company on July 27 (http://goo.gl/qDaE4B).
Automotive components: Sogefi
Sogefi is one of the main producers worldwide in the sectors of suspension, filtration, and air and cooling systems with 42 production plants in three continents. The company is controlled by CIR (57.4%) and is listed on the Stock Exchange.
Sogefi’s sales revenues in the first half of 2016 came in at € 798.6 million and were up by 4.6% from € 763.7 million in 2015. Sales in Europe were up by 1.8% on the first half of 2015 and the trend of significant development continued in North America (+24.6%) and Asia (+25.4%). In South America revenues in euro were down by 18.3% because of the decline in value of the local currencies and the continuing crisis in the market. Excluding South America, growth was 7.6%.
EBITDA came to € 74.7 million and was up by 19.6% compared to the same period of 2015 (€ 62.4 million). The increase was due to the revenue growth and the improvement in profitability, which rose to 9.3% from 8.2% in the first half of 2015, thanks to the slightly higher contribution margin and the slight reduction in the impact of indirect costs.
Net income totalled € 8.3 million versus € 9.7 million in 2015, as an effect of higher amortization and write-downs, financial expense and taxes.
Net debt stood at € 326.2 million at June 30 2016, in line with the figure at December 31 2015 (€ 322.3 million).
For further information on the results of Sogefi, see the press release published by the company on July 25 (http://goo.gl/IwHJ4t).
Healthcare: KOS
KOS, which is 62.7% controlled by CIR and in which F2i Healthcare has an interest of 37.3%, is one of the major groups in Italy in the sector of healthcare and care homes (nursing homes, rehabilitation centres, oncology treatments, diagnostics and management of hospital facilities). The group manages 76 facilities in Italy, mainly in the centre and north, for a total of around 7,200 beds.
In the first half of the year KOS posted revenues of € 227.6 million (+4.7% from € 217.3 million in the same period of 2015), thanks to the acquisitions made last year and to the organic growth in the care home sector.
EBITDA was € 37.1 million, up by 8.8% from € 34.1 million in the same period of 2015.
Net income came in at € 9.6 million, up from € 7.6 million in 2015.
Net debt stood at € 226.3 million at June 30 2016 (€ 210 million at December 31 2015). The increase was mainly due to the distribution of dividends in the period.
In the first half of 2016 the KOS group continued its development process in the care-home and rehabilitation areas. In oncology treatments and diagnostics the business is continuing to develop in Italy, India (with the subsidiary ClearMedi Healthcare Ltd) and in the United Kingdom (with the subsidiary Medipass Healthcare Ltd).
During the first half, on May 17, CIR and F2i Healthcare, a company controlled by the F2i Second Fund, completed the purchase from Ardian of 46.7% of KOS for € 292 million.
Non-core investments
The non-core investments of the CIR group consist of private equity initiatives, non-strategic shareholdings and other investments with a total value at June 30 2016 of € 111.8 million (€ 113.7 million at December 31 2015).
More specifically the CIR group has a diversified portfolio of funds in the private equity sector (with a fair value at June 30 2016 of € 55.3 million, down by € 4 million compared to December 31 2015 mainly as an effect of write-downs, capital redemptions and exchange rate differences). Total distributions in the period came to € 5.8 million, generating a capital gain of € 4.2 million.
As for non-strategic equity investments, their value at June 30 2016 was € 15.5 million, after the sale of a € 5.5 million investment in China, which generated a capital gain of € 6.5 million. Lastly the CIR group has a portfolio of non-performing loans, the value of which was € 41 million at June 30 2016.
Results of the parent company CIR S.p.A.
The parent company CIR S.p.A. closed the first half of 2016 with net income of € 17.3 million, up from € 6.7 million in the same period of 2015 thanks to the better financial management result.
The equity of the company stood at € 979.9 million at June 30 2016, down from € 1,008.2 million at the end of 2015 after the distribution or dividends and the buyback of own shares.
Outlook for 2016
The performance of the CIR group in the second half of the year will be influenced by the evolution of the Italian economic environment, the impact of which is significant particularly for the media sector, and by the performance of the main world car markets for the automotive components sector.
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.