COMPAGNIE INDUSTRIALI RIUNITE S.P.A.
Board of Directors approves results as of June 30 2015
CIR GROUP: RESULTS GROW IN FIRST HALF OF THE YEAR
NET INCOME AT € 36.4 MLN (€ 5.3 MLN IN 2014)
Revenues at € 1,290.7 mln (+7.3%), EBITDA at € 120.5 mln (+14.7%).Operating result higher for Sogefi and KOS, stable for Espresso despite crisis in publishing
Significant rise in earnings of Espresso and Sogefi. The contribution of the three industrial subsidiaries to the group result was a positive € 21.9 million (€ 0.9 mln in 2014)
Higher also the contribution of the parent company and the non-industrial subsidiaries (€ 14.5 million compared to € 4.4 million in 2014)
Milan, July 27 2015 - 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 Interim Financial Report of the Group as of June 30 2015 as presented by Chief Executive Officer Monica Mondardini.
The CIR group operates mainly in three sectors: media (Gruppo Editoriale L'Espresso), automotive components (Sogefi) and healthcare (KOS).
Consolidated results
The revenues of the CIRgroup in the first half of 2015 came to €1,290.7 million and were up by7.3% from € 1,203.2 million in the same period of the previous year. The increase was driven by Sogefi and KOS, which achieved growth of 11.8% and 12.6% respectively.
The gross operating margin (EBITDA) came in at € 120.5 million (9.3% of revenues), posting a rise of14.7% from the figure of€ 105.1 million in the first half of 2014 (8.7% of revenues). The operating result (EBIT) came to € 69.2 million (5.4% of revenues), up by 20.8% from € 57.3 million last year (4.8% of revenues).
This performance was due mainly to the results obtained by Sogefi and KOS, while Espresso reported a margin in line with that of first half 2014.
The net income of the group came in at € 36.4 million, up from € 5.3 million in the first half of 2014.
The contribution of the industrial subsidiaries to the result of the CIR group was € 21.9 million, compared to € 0.9 million in the first six months of 2014. Significant increases in the net income of Espresso and Sogefi were reported.
Espresso achieved a net income of € 22.1 million (€ 3.8 million in the first half of 2014) thanks to maintaining its operating result despite the still difficult situation in the sector, to the reduction of its financial and tax expense and to the capital gain resulting from the sale of the television channel Deejay TV. Sogefi reported net income of € 9.7 million compared to a loss of € 7.3 million in the first half of 2014. This positive change was due to the growth in revenues, to the slight improvement in profitability and to the reduction of financial expense, particularly in relation to non-recurring expense. Lastly, KOS reported net income of € 7.6 million, up from € 6 million in the first half of 2014 thanks to the development activity carried out by the company in the last two months, which made growth in results possible.
The contribution of the parent company CIR S.p.A. and of the non-industrial subsidiaries was a positive € 14.5 million, up from € 4.4 million in the first half of 2014. Financial expense declined thanks to the buy-back of the bond in October 2014 and higher income came from financial management.
Consolidated net debt stood at € 209.5 million compared to € 112.8 million at December 31 2014. The increase of € 96.7 million was due mainly to the acquisitions made by KOS and to the buy-back of own shares in the period. The remaining part was due to Sogefi, which reported a seasonal increase in working capital as well as the payment of a provisional amount in relation to product quality guarantees.
The net financial position of the parent company stood at € 370.8 million at June 30 2015 and was down slightly from € 379.5 million at the end of 2014 because of the buy-back of € 27.9 million of own shares.
The equity of the group stood at €1,123.3 million at June 30 2015, up from € 1,104.5 million at December 31 2014, the increase being mainly the result for the period.
At June 30 2015 the CIR group had 14,121 employees (13,846 at December 31 2014).
Results of the industrial subsidiaries of the CIR group
Media: Espresso
Gruppo Editoriale L'Espresso is one of the most important Italian publishing companies. It operates in all sectors of communication: newspapers and magazines, radio, internet, television and advertising. The group, which is 56.1% owned by CIR, is listed on the Stock Exchange.
The revenues of Espresso in the first half of 2015 came to € 305.7 million (-5.3% from € 322.7 million in 2014, as a consequence of the crisis that is affecting the entire sector). Circulation revenues, totalling € 109.3 million, declined by 4.8% compared to 2014, in a market that is continuing to record a significant fall in the circulation of daily newspapers (-9.9%). Advertising revenues (€ 177.5 million) posted a decline of 3.7% with contrasting trends: radio and the internet showed positive dynamics while the printed press reflected the still negative trend of the market. Costs went down by 6.6%, which was more or less equivalent to the fall in revenues. EBITDA came to € 31 million, which was in line with the figure for the first half of 2014. During the first half, the sale of the television channel DeejayTV to Discovery Italia was completed, giving rise to a capital gain of €9.3mn. Taking into account the above, as well as the reduction in financial and fiscal expense, net income was € 22.1 million, up from € 3.8 million in the first half of 2014. Net financial debt, which stood at € 5 million at June 30 2015, contracted further from the figure of € 34.2 million at the close of 2014. For further information on the results of Espresso, see the press release published by the company on July 22 2015 (http://goo.gl/8KOkaE). Automotive components: SogefiSogefi is one of the main producers worldwide in the sectors of filtration, engine air systems and suspension components with 42 production plants in four continents. The company is controlled by CIR (57.6%) and is listed on the Stock Exchange. Sogefi's revenues in the first half of 2015 came to € 763.7 million, and were up by 11.8% from € 683 million in the same period of 2014 (+7.9% at the same exchange rates). The rise in revenues was the result of increased sales in all the geographical areas (Europe +10.4%, South America +1.3%, North America +17.3%, Asia +35.7%) but was also partly due to favourable exchange rates. EBITDA came in at € 62.4 million, significantly higher than the € 51.7 million reported in the first half of 2014, thanks to the rise in revenues and to the slight improvement in profitability. It should be remembered that in the first six months of last year the group had incurred restructuring costs for a total of € 14.4 million (€ 2 million in 2015). In the first half of 2015, considering the overall exposure to liabilities connected with product quality risks, the company prudentially decided to set aside a provision of € 12.8 million for product warranties. In the first half Sogefi reported a positive net result of € 9.7 million compared to a loss of € 7.3 million in the same period of 2014. Net debt stood at € 348 million at June 30 2015 (€ 304.3 million at December 31 2014). For further information on the results of Sogefi, see the press release published by the company on July 24 2015 (http://goo.gl/4AnsPx). Healthcare: KOSKOS is one of the largest groups in Italy in the sector of healthcare and care homes (care homes, rehabilitation centres, oncology treatment, diagnostics and management of hospital facilities). The group manages 75 facilities, mainly in the centre and north of Italy, for a total of over 7,100 beds, plus another 200 or so under construction. Controlled by CIR (51.3%), KOS also has the private equity fund Ardian as a shareholder. In the first half of 2015 KOS obtained revenues of € 217.3 million (+12.6% from € 193 million in the same period of 2014), thanks to the acquisition of four facilities completed in the period in the area of care-homes and to the organic growth of the businesses. EBITDA came to € 34.1 million, and was up by 21.8% from € 28 million in the first half of 2014. Net income totalled € 7.6 million, up from € 6 million in 2014. Net debt stood at € 231 million at June 30 2015. The increase from € 157 million at December 31 2014 was due mainly to € 71.5 million euro of investments in acquisitions. In the area of oncology treatment and diagnostics, activities are continuing in India through the joint venture ClearMedi Healthcare Ltd and in the United Kingdom through the subsidiary Medipass Healthcare Ltd. Non-core investments The non-core investments of the group consist of private equity initiatives, non-strategic shareholdings and other investments for a total value at June 30 2015 of € 146 million (€ 150.9 million at December 31 2014). More specifically, the CIR group has a diversified portfolio of funds in the private equity sector (with a fair value at June 30 2015 of € 66.8 million, down by € 0.9 million compared to December 31 2014). As for non-strategic equity investments, the value of these at June 30 2015 was € 33.8 million. In particular, the group holds an interest of around 17.4% in the company Swiss Education Group, a world leader in managerial training in the hospitality sector: the value of the investment in the education sector at June 30 2015 was € 22.5 million. Lastly, the CIR group has a portfolio of non-performing loans, the value of which was € 45.4 million at June 30 2015. Results of the parent company of the group CIR S.p.A. The parent company of the group CIR S.p.A. closed the first half of 2015 with net income of € 6.7 million versus a loss of € 2.5 million in the same period of 2014, which was affected by the cost of buying back the bond and the financial expense on the same. The company's equity stood at € 1,047.8 million at June 30 2015, down from € 1,068.1 million at December 31 2014 as an effect of the buy-back of own shares in the period for a value of € 27.9 million. Outlook for the whole year 2015 The performance of the CIR group in the second half of the year will be affected 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. During the year the group should obtain a positive net result after the loss in 2014, unless there are any events of an extraordinary nature that cannot at the moment be foreseen.
27 July 2015 | 12:29 CEST
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