CIR: filing of documentation for AGM

Milan, April 9 2021 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in extraordinary and ordinary sessions for April 30 2021, 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 Annual Report and Financial Statements for the year ended December 31 2020, the Report of the Board of Statutory Auditors, and the Reports of the Firm of Auditors (item 2 of the ordinary part);
  • The Report on Corporate Governance and ownership structure as per Art. 123 – bis del TUF;
  • The Consolidated Non-Financial Report for 2020;
  • The Report of the Board of Directors on the proposed authorization to buy back own shares and use them as appropriate (item 3 of the ordinary part);
  • The Report on Compensation Policy and Remuneration Paid as per Art. 123 – ter of the TUF (item 4 of the ordinary part).

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CIR: documentation filed for AGM

Milan, March 30 2021 – Regarding the Annual General Meeting of the Shareholders of CIR S.p.A., to be convened in extraordinary and ordinary sessions for April 30 2021, 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 proposal to eliminate the indication of the nominal value of the shares and the consequent amendment of Art. 4, paragraph 1, of the Company Bylaws (sole item of the extraordinary part);
  • The Report of the Board of Directors on the proposal to approve Stock Grant Plan 2021 (item 5 of the ordinary part);
  • The Report of the Board of Directors on the proposal to reduce the number of Board members from 12 to 11 (item 6 of the ordinary part).

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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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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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CIR: calendar of events for 2021

Milan, January 29 2021 – CIR S.p.A. announces that the Company’s calendar of events for 2021 will be as follows:

Friday 12.03.2021 10.00 a.m. Board of Directors Meeting (Pro-forma Financial Report for 2020)  
Friday 30.04.2021 11.00 a.m Annual General Meeting of the Shareholders (Approval of Financial Report for 2020)  
Friday 30.07.2021 10.00 a.m. Board of Directors Meeting (Half-year Financial Report for 2021)

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KOS completes the sale of its subsidiary Medipass to the DWS fund

Milan, November 27 2020 – In completion of what was announced on September 7 2020, KOS completed today the sale of 100% of the shares of Medipass S.r.l. (buying back the operating companies in India) to Inframedica S.p.a., a company indirectly and wholly owned by DWS Alternatives Global Limited, the investment manager delegated to manage the Pan-European Infrastructure III, SCSp fund.

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CIR files Interim Financial Report

Milan, November 11 2020 – CIR S.p.A. announces that the Interim Financial Report as of September 30 2020, approved by the Board of Directors on October 30, is available to the public on the authorized storage mechanism eMarket STORAGE (www.emarketstorage.com), at the registered office of the Company and on its website (www.cirgroup.com).

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CIR: results for first nine months of 2020

  • Third quarter 2020 results improved, with consolidated revenues up slightly from 3Q 2019, EBITDA and EBIT showing progress and a net result (€ 10.0 million) higher than that of 3Q 2019
  • Results for first nine months of 2020 were negatively affected by the performance of the first half which was badly hit by the economic consequences of the Covid-19 pandemic. Revenues at € 1,329.4 million (€ 1,528.0 million in first nine months of 2019). EBITDA at € 174.2 million (€ 201.8 million in the first nine months of 2019). EBIT positive at € 12.9 million (€ 66.0 million in the first nine months of 2019). Net result: -€ 20.2 million
  • Net financial position of the parent company positive for € 384.0 million, higher than at December 31 2019 (€ 295.7 million)

Milan, October 30 2020 – The Board of Directors of CIR S.p.A., which met today under the chairmanship of Rodolfo De Benedetti, has approved the Financial Report as of September 30 2020 presented by Chief Executive Officer Monica Mondardini.

Consolidated results

The third quarter of this year saw a recovery in all businesses, with consolidated revenues up by 0.7% on the revenues of the same period of 2019, EBITDA and EBIT showing progress and a net result of € 10.0 million, which was higher than in third quarter 2019.

In the social and healthcare sector, KOS reported a recovery in rehabilitation services after hospital activities resumed in a quarter with less stress on the health service in relation to the emergency caused by the Covid-19 pandemic.

In automotive components, Sogefi, thanks to its better performance than the market in terms of sales and to its cost cutting actions, closed the quarter with a positive result. As regards the financial assets of the CIR holding company and its non-industrial subsidiaries, which were in line with their respective markets, there was a recovery in stock prices and this compensated for the losses seen in the first six months of the year.

The results of the first nine months of 2020 were still affected very negatively by the first half of the year, in which all business activities suffered the effects of the circumstances that arose because of the pandemic and the particularly restrictive measures adopted.

Consolidated revenues came in at € 1,329.4 million and were down by 13% on 2019.

The consolidated gross operating margin (EBITDA) came to € 174.2 million and was 13.7% lower than the figure for the first nine months of 2019 (€ 201.8 million).

The consolidated operating result (EBIT) was € 12.9 million, down from € 66.0 million in the corresponding period of 2019, reflecting the lower EBITDA and the higher amortization after the consolidation of KOS’s business in Germany, which was acquired at the end of 2019.

The net result was a loss of € 20.2 million compared to a net income figure of € 5.4 million in the same period of 2019. Compared to the first half of the year, the loss was significantly less.

KOS’s business activity was affected by the public health emergency in all sectors, with a significant impact on its economic performance. In the Italian nursing homes, the focus was on the difficult management of the public health emergency and new entries were frozen for several months. During the third quarter new patients started to be accepted again and the number of guests stabilized albeit at a significantly lower occupancy rate than in 2019. In the German nursing homes the impact of the pandemic on healthcare was considerably less and therefore the reduction in the number of guests was more limited than in Italy. In the rehabilitation units the number of patients declined following the slowdown in normal hospital activity, when the health service was in a state of stress, and outpatient activities were suspended or much reduced as were diagnostic activities. However in the third quarter there was a strong recovery with an increase in services provided compared to the same period of 2019.

Revenues totalled € 468.8 million and were up by 23.7% on the same period of 2019 (but fell by 10.5% on a like-for-like basis, excluding Charleston, the group operating in Germany in the care home sector, which was acquired in October 2019). EBIT amounted to € 26.8 million down from € 44.2 million in 2019 due to the decline in the number of guests and patients in Italy because of the Covid-19 emergency and the higher costs incurred for protective equipment to counter and limit the effects of the pandemic. The net result was a positive € 4.9 million versus net income of € 23.5 million in 2019.

In September KOS signed a binding agreement with DWS Alternatives Global Limited for the sale of Medipass, excluding the businesses in India, of which KOS will retain ownership. The enterprise value agreed upon is € 169.2 million and the equity value is estimated at around € 103.0 million (net of the disbursement incurred by KOS for the acquisition of the businesses in India), plus a possible earn-out of € 2.5 million. Completion of the deal is subject to the issue of the necessary authorizations by the competent authorities and to certain waivers by third parties, which as things stand are almost completely satisfied. The deal is expected to complete by the end of November 2020 and will generate a capital gain for KOS of over € 50 million that will be recognized only at the moment of completion.  The sale of Medipass is part of KOS’s strategy of focusing on its core business (long-term care) in Italy and Germany.

Moving on to Sogefi, in the third quarter the automotive sector reported a definite recovery in world car production, with a decline in volumes of 3.5% compared to the same period of 2019, after the unprecedented dramatic fall experienced uffered in the first half of the year (-33.2%) due to the effects of the spread of the Covid-19 pandemic.

In this context, Sogefi reported a positive third quarter,  with revenues down by 8.1% and net income of € 5.6 million (compared to € 1.4 million in third quarter 2019), thanks to the measures put in place to counter the crisis, which enabled Sogefi to increase its contribution margin to 31% from 30.3% in 2019 and 29.5% in the second quarter, and to reduced its fixed costs by 20%, with a ratio to sales down from 17% in third quarter 2019 to 15% in 2020.

The first nine months of 2020 remain strongly affected by the first half of the year: revenues came in at € 860.6 million, down by 25.1% compared to 2019, EBITDA came to € 94.7 million versus € 130.7 million in 2019, and the period closed with a loss of € 23.2 million (net income of € 8.3 million in 2019).

In spite of the situation of the first nine months, since the beginning of the year Sogefi has acquired new contracts for a total that is estimated as being in line with previous years and with the objectives of maintaining/increasing its market share.  

Regarding the financial investments of the holding company and the subsidiaries devoted to financial management, in the third quarter of 2020 asset values recovered, bringing the overall return for the nine months to breakeven, after the loss reported in the first half. Bonds and hedge funds (which account for some 85% of the portfolio) had an overall return of +1.8% while private equity and financial equity investments reported a reduction in their total fair value of 8%. 

Consolidated net debt before IFRS 16 totalled € 264.0 million at September 30 2020, which was lower than at December 31 2019 (€ 327.6 million) and at June 30 2020 (€ 285.7 million). Financial payables for rights of use as per IFRS 16 came to a total of € 808.9 million at September 30 2020 and thus the total consolidated net debt was € 1,072.9 million. The payables as per IFRS 16 mainly refer to the subsidiary KOS (€ 733.5 million), which operates mainly in leased premises.

The net financial position of the parent company (including the non-industrial subsidiaries) was a positive € 384.0 million at September 30 2020, higher than at December 31 2019  (€ 295.7 million), thanks to the net cash inflow from the sale of the shareholding in GEDI Gruppo Editoriale to EXOR (with an amount of € 102.4 million received for the entire holding and the reinvestment of € 11.7 million for 5% of the same GEDI). The equity of the Group stood at € 736.9 million at September 30 2020, down from € 770.7 million at December 31 2019. The decline was due to the loss for the period and to negative exchange rate differences resulting from the translation of the financial statements of foreign subsidiaries.

Outlook for the year

Visibility for the coming months remains limited because of the uncertainty about the effects of the evolution of the pandemic on the businesses of the group. Indeed, Europe is experiencing the second phase of the spread of the Covid-19 pandemic, with recent figures showing levels higher than during the lockdown earlier in the year. In North and South America the evolution of the pandemic remains extremely concerning. We cannot therefore rule out, as has recently been confirmed in certain countries, the possibility of the authorities issuing new restrictions on private-sector production and business activities, which would impact the activities of the group.  

As far as KOS is concerned, it is expected that rehabilitation activity could consolidate the recovery seen in the third quarter, provided that there is no new freeze on regular hospital activity, while for care homes in Italy in the short term it is likely that the number of guests will remain below historical averages. At the same time care homes will continue to incur additional costs to counter the emergency. The care-home sector in Germany, which has been less affected by the pandemic in terms of level of activity and which is in any case supported financially by the public health service, should report results in line with expectations, advancing its plan for improving operations and increasing income. In this difficult environment it is expected that EBIT for the whole year will not be lower than the figure reported for the first nine months of the year.

Sogefi has factored into its forecasts for the fourth quarter the assumption that the market will be around -10%, in which it expects to be able to achieve a significantly positive EBIT for the whole year, excluding restructuring charges.    Based on the considerations regarding the group’s investees, provided there is no shutdown of business or any other extraordinary event that cannot at present be predicted, the forecast is for a positive consolidated EBIT result and a significantly positive net income figure thanks to extraordinary transactions (particularly the sale of Medipass).

Appointment of CIR’s new Financial Reporting Officer

The Board of Directors has resolved, after receiving the favourable opinion of the Board of Statutory Auditors, to appoint Michele Cavigioli as the Officer responsible for the preparation of the company’s financial and corporate statements as per the terms of Art. 154-bis of the TUF and in compliance with Art. 21 of the Company Bylaws. The appointment will take effect as from January 1 2021. Michele Cavigioli, 51, has been in CIR since 2005, has held the position of Central Finance Director since 2010 and is also responsible for relations with financial analysts and institutional investors. He is also CEO of CIR Investimenti and sits on the Board of Directors of KOS. He worked previously for McKinsey & Company, Deutsche Bank and Magnemag AG. Michele Cavigioli will take the place of the current financial reporting officer Giuseppe Gianoglio, 62, who will be leaving the group in January 2021, having chosen to retire. The Board of Directors thanks Giuseppe Gianoglio for his important contribution to the group over the past 16 years.

It should be noted that Giuseppe Gianoglio holds 488,013 CIR shares and rights resulting from Stock Grant Plans for a total of 1,359,648 Units. Michele Cavigioli holds 24,248 CIR shares and rights resulting from Stock Grant Plans for a total of 1,422,461 Units.

Resolution on periodic financial reporting

The Board of Directors has decided that as from financial year 2021 it will no longer publish interim financial reports as of March 31 and September 30, exercising the right granted by D.Lgs 25/2016 for the same reasons that inspired the Transparency II 2013/50 directive of the European Union transposed into Italian law by the above decree.  

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