Pargesa : Report of the Annual General Meeting - Consolidated results for 1Q 2017 (unaudited) - Publication of the presentation to the Annual General Meeting

PRESS RELEASE

Geneva, 4 May 2017

• 4 May 2017 Annual General Meeting:

  • Approval by the shareholders of a dividend of CHF 2.44 per bearer share, for a total distribution of CHF 206.6 million to be paid on 10 May 2017.
  • All other resolutions approved by shareholders.

• Q1 2017 financial results:

  • Economic operating income: CHF 117.8 million, compared with CHF 76.8 million in Q1 2016. Economic operating income in 2017 reflects:
    • the increased contributions from SGS (CHF 45.9 million, versus CHF 41.5 million in Q1 2016);
    • a contribution of CHF 56.6 million from private equity and other funds activities (Q1 2016: CHF -1.6 million), including an amount of CHF 62.0 million corresponding to Pargesa's share of the gain recorded by Sienna Capital from the sale of Golden Goose;
    • the non-cash impact of the derivative financial instruments embedded in the exchangeable and convertible bonds issued by GBL, for a net amount of CHF -6.2 million (Q1 2016: CHF +38.0 million). Excluding this impact, economic operating income would have stood at CHF 124.0 million in Q1 2017, compared with CHF 38.8 million in Q1 2016.
  • Non-operating income: CHF 6.8 million, compared with a non-operating loss of CHF 448.1 million in Q1 2016. In 2016, Pargesa's non-operating loss included for CHF -818.3 million the impact of an impairment charge recorded by GBL on its investment in LafargeHolcim, partly offset by the CHF 398.8 million gain recorded at the level of Pargesa, resulting from the sale by GBL of 1.1% of Total's share capital in early 2016.
  • As a result of the above, Pargesa's net income stands at CHF 124.6 million in Q1 2017, compared with a net loss of CHF 371.3 million in Q1 2016.

    The organization chart below reflects the Group structure at 31 March 2017, with its portfolio composed primarily of seven strategic main shareholdings:

    1) 51.9% of voting rights, taking into account the suspended voting rights relating to treasury shares.

    2) Investments generally larger than EUR 1 billion, primarily in listed companies, in which the Group can exercise clear influence. These represent the bulk of the adjusted net assets.

    3) Comprising a selection of listed or unlisted shareholdings that range in size from EUR 250 million to EUR 1 billion, having the potential to eventually become strategic.

    4) Comprising significant investments in private equity, debt or specific thematic funds.

    5) Market value in EUR millions of the investments held by GBL at 31 March 2017.

    6) Estimated value in EUR millions at 31 March 2017.

  • Highlights since the beginning of 2017

• As already reported, GBL sold since the beginning of the year 11.9 million shares of ENGIE (0.5% of the company's share capital), for net proceeds of EUR 145 million and generating an accounting gain of EUR 1 million for GBL. GBL's residual ownership in ENGIE, which is no longer considered a strategic investment since the end of 2016, was of 0.1% of the share capital on 31 March 2017.

  Furthermore, the remaining balance (EUR 306 million) of the bonds exchangeable for ENGIE shares which were issued by GBL in 2013 was redeemed in cash at maturity, on 7 February 2017.

• « Incubator » portfolio:

  • As already reported, Burberry announced in February 2017 that GBL had crossed the 3% threshold of the voting rights of the company. The investment in Burberry is part of GBL's portfolio diversification strategy. As at 31 March 2017, GBL held 3.0% of Burberry's share capital, worth EUR 266 million;

  • In March 2017, GBL participated in the capital increase realized by Ontex, with the objective to refinance the company following the acquisition of the « hygienic consumables » activity of Hypermarcas. Following this operation, the GBL's ownership remains unchanged at 19.98%. Furthermore, the appointment of a GBL representative to the board of directors will be proposed to the general shareholders' meeting of Ontex of 24 May;

  • GBL announced on 12 April 2017 the acquisition of a 15.0% interest in the capital of Parques Reunidos Servicios Centrales, S.A. (« Parques »), representing an investment of EUR 208 million. Parques, whose shares are listed on the Madrid Stock Exchange, is a leading global operator of leisure parks across Europe, North America and Asia. The company generated EUR 584 million in sales during its financial year ended 30 September 2016. On 25 April 2017, Parques co-opted a GBL representative on its board of directors.

• Sienna Capital (GBL's « Financial pillar »):

• As already reported, in March 2017, ECP III sold its majority stake in Golden Goose, an Italian designer of shoes, clothes and contemporary accessories. This transaction generated in Q1 2017 a gain of EUR 112 million for GBL, or CHF 62.0 million at the level of Pargesa;

• Also already reported was the acquisition by Sagard 3 in February 2017 of a majority stake in Ipackchem, a leading global manufacturer of « barrier » packaging whose products are mainly used in the transport and storage of aromas, fragrances and agrochemical products, for which permeability, contamination and evaporation constraints are critical;

• It is also reminded that at the end of 2016, Kartesia launched a new investment fund, in which Sienna Capital made a commitment for EUR 150 million. The first closing of the fund took place on 22 February 2017, and as of 31 March 2017 total commitments amounted to EUR 457 million. Kartesia's objective is to raise an aggregate amount of EUR 750 million by July 2017.

At 31 March 2017, GBL's commitments under its Financial Pillar amounted to EUR 577 million (EUR 601 million at 31 December 2016).

1. Consolidated Q1 2017 financial results (unaudited)

   The Board of Directors of Pargesa Holding SA met today and reviewed the unaudited Q1 2017 consolidated figures.

2. Presentation of results in accordance with IFRS

   The simplified income statement in accordance with IFRS is as follows:

   CHF millions	Q1 2017	Q1 2016
   Operating income	1'280.9	1'243.8
   Operating expenses	(1'152.9)	(1'122.4)
   Other income and expenses	139.4	(859.1)
   Operating profit (loss)	267.4	(737.7)
   Dividends and interest from long-term investments	88.5	63.1
   Other financial income and expenses	(28.9)	33.2
   Taxes	(38.1)	(40.0)
   Income from associates and joint ventures	1.4	7.5
   Consolidated net profit (before minority interests)	290.3	(673.9)
   Attributable to minority interests	(165.7)	302.6
   Attributable to Pargesa shareholders (Group share)	124.6	(371.3)
   Basic earnings per share attributable to Pargesa shareholders (CHF)	1.47	(4.39)
   Average number of shares in circulation (thousands)	84'659	84'659
   Average EUR/CHF exchange rate	1.069	1.096

   Operating income and expenses are primarily the revenues and operating expenses of Imerys, whose accounts are fully consolidated.

   Other income and expenses includes net capital gains and losses as well as impairments and reversals of previous impairments on Group shareholdings and operations. In Q1 2017, this figure mainly comprised the gain realized on the sale by ECP III of its investment in Golden Goose (CHF 132.8 million). In Q1 2016, this item included primarily the impairment charge recorded as of 31 March 2016 by GBL on its investment in LafargeHolcim (CHF 1'575 million), and the gain recorded by GBL on the sale of 1.1% of Total's share capital (CHF 770 million).

   The dividends and interest from long-term investments item comprises the net dividends recorded by the Group from its non-consolidated investments, and in particular the dividends from SGS recorded in the period.

   The other financial income and expenses and taxes items provide consolidated figures for Pargesa, GBL and Imerys. Other financial income and expenses includes the non-cash impact of GBL's derivative financial instruments being marked to market.

   Income from associates and joint ventures represents the share of the consolidated net profit contributed by shareholdings accounted for in the Pargesa financial statements using the equity method. These shareholdings are primarily held within Sienna Capital's portfolio (« Financial pillar ») or by Imerys.

   The item minority interests mainly relates to the share of income due to the minority shareholders of GBL and Imerys, these two companies being fully consolidated into the Pargesa Group financial statements.

3. Economic presentation of Pargesa's financial results

In addition to the accounts drawn up in accordance with IFRS, Pargesa continues to publish an economic presentation of its results, in order to provide continuous information over the long term about the contribution of each of its major shareholdings to its results. IFRS require different accounting treatments depending on the Group's percentage holding in each of its investments (full integration for Imerys, with other major Group holdings being booked as financial investments), so this continuous view would be interrupted without this additional economic presentation of the Group's results.

The economic presentation shows, in terms of Pargesa's share of results, the operating contribution of the main shareholdings to Pargesa's consolidated income, together with the operating income from the holding companies (Pargesa and GBL), which highlight in particular the income from private equity activities and other investment funds (combined under Sienna Capital at GBL) and the impact of net financial income. The analysis also draws a distinction between the operating and non-operating items in the income, the non-operating part being composed of net capital gains and losses in connection with disposals and any restructuring costs and impairments or reversals of previous impairments.

According to this approach, the economic results at 31 March 2017 can be analysed as follows:

CHF millions	Q1 2017	Q1 2016
Operating contribution of the main shareholdings Consolidated: Non-consolidated: Imerys share of operating incom e SGS net dividend Total net dividend LafargeHolcim net dividend ENGIE net dividend Pernod Ricard net dividend Umicore net dividend adidas net dividend	25.7 45.9 - - - - - -	25.6 41.5 (8.7) - - - - -
Operating contribution of the main shareholdings	71.6	58.4
per share (CHF)	0.85	0.69
Contribution from private-equity activities and other investment funds	56.6	(1.6)
Net financial incom e and expenses	(2.8)	26.3
Other operating incom e from holding com pany activities	-	-
General expenses and taxes	(7.6)	(6.3)
Economic operating income	117.8	76.8
per share (CHF)	1.39	0.91
Non-operating incom e (los s) from cons olidated shareholdings	(2.0)	(3.2)
Non-operating incom e (los s) from holding com pany activities	8.8	(444.9)
Net income (loss)	124.6	(371.3)
per share (CHF)	1.47	(4.39)
Average number of shares in circulation (thousands)	84'659	84'659
Average EUR/CHF exchange rate	1.069	1.096