1

Marzo 2014

FY 2015 Results

March 2016

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FY 2015 at a glance

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Operating structure

Note: The percentages of control are updated as of 31 December and are calculated net of treasury shares

€605 m €1.5 Bio €439 m

All Media sectors from

dailies and periodicals

to radio, Internet, and

advertising

Global automotive

components supplier

(filters, air &cooling and

suspensions)

Nursing homes,

rehabilitation and

hospital management

Private equity

Revenues

2015

Businesses

Competitive

position

Leader in circulation of Italian dailies

N.1 news magazine

N.1 Italian information website

Third Italian radio network

Leader in its core

businesses (filters and

suspensions) in

Europe and South

America

--

Leader in Italian long

term care (nursing

homes and

rehabilitation)

Non-core investments

56.5% 57.6% 51.3%

Total € 2.5 Bio

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• Founded in 1976 by Carlo De Benedetti; controlled (45.8%) by COFIDE-Gruppo

De Benedetti

• Long term investment strategy, with focus on controlling stakes

• Balanced portfolio of assets, with leading positions in their respective

businesses

• Active role in governance and in strategic decision making of portfolio

companies

• No leverage and significant liquidity available at holding company level

• Commitment to low cost structure

CIR Group profile

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• Consolidated net income: € 42 million (vs. a net loss of € 23.4 million in

2014). Contribution of industrial businesses (Espresso, Sogefi and KOS) is

€ 20.4 million, vs. € 13.2 million in 2014

• Consolidated net financial position of the CIR Group at December 31, 2015:

- € 121.7 million (vs. - €112.8 million at December 31, 2014), including:

- A net financial surplus at holding level of €417.9 million (increasing vs.

€379.5 million at December 31, 2014 thanks to SEG sale and private

equity redemptions

- A net debt of consolidated subsidiaries of - €539.6 million (increasing

vs. - €492.3 at December 31, 2014 due mainly to new investments and

KOS acquisitions)

2015 consolidated financial highlights

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Consolidated income statement

Group net result (23.4) 42.0

€ m

Income taxes (28.6) (20.9)

(42.3) Financial expense/income (3.2)

80.6

2014 2015

EBIT

EBITDA 196.8 218.2

80.0

Revenues 2,392.6 2,544.4

Assets held for sale (18.3) 9.4

1) Net of third party interests (equal to €23.3 million in 2015 and €14.8 million in 2014)

(1)

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Consolidated income statement by business sector

€ m

6.3 KOS Group 10.1

2.1 Sogefi Group

Espresso Group 4.8 9.6

0.7

(2) Including Treasury and non core investments

Net result (23.4) 42.0

(1) Pro-rata share of subsidiaries’ net income

CIR holding level (1.2) 10.6 (2)

13.2 Total industrial companies 20.4 (1)

Non-recurring income (35.4) 11.0

(3) Including NPL write down and early redemption charges of CIR 2024 Notes in 2014 and SEG sale and Espresso

goodwill write down in 2015

(3)

2014 2015

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Consolidated balance sheet – main group assets

€ m

Group equity in consolidated balance sheet 31 Dec. 2014 31 Dec. 2015

129.5 KOS 137.2

95.1 Sogefi

Espresso 347.9 332.2

100.4

Fixed assets 18.1 17.0

572.5 Total industrial companies 569.8

Non performing Loans 49.3 43.0

Private equity 67.7 59.2

Other investments 33.9 11.4

(1)

(1) Book value decreasing due to cash reimbursements to CIR

(2) Treasury shares as of 31 Dec. 2015: 108,4m, equal to 13.7% of share capital

(1)

Shareholder’s equity per share (net of treasury shares)

Net cash 379.5

1.61

417.9

1,104.5 1,103.0 Total CIR Group shareholders’ equity

532.0 Total CIR holding level 533.2

Shareholder’s equity per share 1.38

(2) 1.49

1.39

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Consolidated net financial position

€ m

31 Dec. 2014 31 Dec. 2015

(157.0) KOS Group (210.0)

(304.3)

CIR holding level 379.5 417.9

Sogefi Group

Espresso Group (34.2) (10.7)

(322.3)

(492.3) Total subsidiaries (539.6)

Consolidated net financial indebtedness (112.8) (121.7)

3.2 Other subsidiaries 3.4

Total shareholders’ equity 1,573.2 1,590.3

Consolidated net invested capital 1,686.0 1,712.0

(1) Including third party interests

(1)

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• Increase of net cash at CIR financial holdings is mainly due to divestitures of SEG

and private equity investments

Net financial position at “holding system” level

Evolution of net financial position as at 31 December 2015

(1)

(2) Fair value of securities + securities income, trading

(3) Operating costs, extraordinary costs, taxes, etc.

(2) (3)

(1) Of which SEG €64.0 million

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Composition of liquid assets and gross financial debt

Liquid assets at 31 December 2015

€ m

Hedge funds

Other (stocks, equity funds)

382.1

96.0

95.1

30.1

418.6

46.0

31 Dec.

2014

31 Dec.

2015

Cash and time deposits

Corporate bonds

Government bonds

57.9

5.7

58.7

50.0

4.2

99.3

Total liquid assets

31 Dec.

2014

31 Dec.

2015

2.6 0.7 Gross financial debt

Other debt 2.6 0.7

Fixed income funds 94.0 252.7

7.0

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2015 Subsidiaries’ financial and operational highlights

Key strategic objectives 2015 Highlights

Expansion of digital platforms, leveraging on

leadership in traditional media

Further efficiency improvement

Further consolidation in Italian nursing homes and

rehabilitation markets

Geographical expansion (focus on India)

Completion of global footprint, through growth

focused on Asia and North America

Further efficiency improvement

Product innovation

Decrease of press circulation (-6.4%) and total advertising revenues (-4.2%), although at lower rates than the market; internet (+2.0%) and radio (+5.7%) advertising showed positive dynamics.

In such challenging market, Espresso reported positive net results and stable EBITDA, thanks to the continuing focus on efficiency improvement; net debt was also decreased (€10.7m vs. €34.2m at 4Q2014), thanks to a healthy operating cash flow and the divestiture of TV assets.

La Repubblica confirms its leadership in daily newspaper newsstand sales and readership, while Repubblica.it is the leading news site in terms of daily unique users

Espresso

Sogefi

KOS

Realisation of existing assets

Selective approach on new investments

Non-core

investments

Sale of SEG with a capital gain of € 41.9 million

Continuing growth of revenues (+11.9%) and EBITDA (+20.9%) thanks

to ongoing organic growth and acquisitions

Revenues growth of 11.1% (+9.1% at constant exchange rates):

- Positive performance in Europe (+8.2%); double digit growth in North

America (+27.4%) and Asia (+34.4%);

- Single digit decrease in Latin America (-3.8%) despite significant market

slowdown (-20.5%)

Improving EBITDA (+6%) and positive net result €1.1m (vs. €3.6m in

2014)

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Espresso - overview

2015 Revenues breakdown

NATIONAL PRESS

DIGITAL

ADVERTISING

National daily newspaper

18 Regional newspapers throughout Italy

Group websites

Three national radio stations

LOCAL

NEWSPAPERS

RADIO

Collection of advertising

€ m

2014 2015

Revenues 643.5 605.1

Net income 8.5 17.0

EBITDA 59.8 47.5

Key financials Operating structure

2015 Performance and outlook

• Circulation revenues at € 218.0 million, decreasing by 6.4%,

in a market down 8.7%. Total advertising revenues were

down 4.2%: radio and the internet grew respectively by 5.7%

and 2.0% while printed press decreased in line with the

market (-5.7%)

• EBITDA (excluding € 10.8m of reorganization charges) was

in line with the previous year

• Net result benefited from a one off effect related to new

regulation on deferred tax provision

• In January 2015 All Music, publisher of the television channel

DeejayTV, was sold to Discovery Italia

• As for the 2016 outlook, in the first two months of the year the

trend of Espresso advertising orders was slightly positive,

although this cannot be considered a consolidated trend yet

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• On 2 March 2016 CIR and Gruppo Editoriale L'Espresso signed a

memorandum of understanding with ITEDI (publisher of daily newspapers La

Stampa and Il Secolo XIX) and its shareholders (FCA and the Perrone

family), aimed at the merger by incorporation of ITEDI into Espresso

• This transaction would create the first Italian, and one of the main European

publishing groups in daily newspapers as well as digital news

• The completion of the merger, which is subject to authorization by the

competent authorities and by the shareholder’s meetings of Gruppo

Editoriale L'Espresso and ITEDI, is planned for the first quarter of 2017

Espresso – Memorandum of Understanding with ITEDI

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Sogefi - overview

Revenues 1,349.4 1,499.1

Net result 3.6 1.1

EBITDA 109.5 115.5

Key financials € m

2014 2015

• 11.1% revenues growth (+9.1% at constant exchange

rates), due to higher volumes in all geographical areas, with

the exception of Latin America. Revenues grew by 8.2% in

Europe, by 27.4% in North America, by 34.4% in Asia; -

3.8% in South America despite significant market slowdown

(-20.5%)

• Net income was affected by higher financial expenses,

while the previous year result benefited from positive non-

recurring items

• During 2015 Sogefi paid around €20 million for quality

claims to car manufacturers

• For the rest of 2016 Sogefi expects to continue on positive

trends in North America, China and India. Lower growth is

expected in Europe, while in South America market

conditions remain difficult

• € 17m investment planned for a new plant in Mexico

9M 2015 Performance and outlook

FORD

FCA/CNH Industrial

RENAULT/NISSAN

PSA

DAIMLER

GM

VOLKSWAGEN/AUDI

BMW

TOYOTA

2015 Revenues breakdown

OTHERS (including

Aftermarket)

13.4% 12.0%

11.1%

11.7%

7.8% 7.8%

3.5%

2.9%

2.2%

27.6%

Europe

North America

South America

63.0%

17.6%

11.6%

7.4% 0.4%

Weight of non-

European

markets

37%

Countries Customers

Asia Others

SUSPENSIONS FILTRATION AIR & COOLING

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KOS - overview

€ m 2011 2012

Revenues 392.4 439.2

Net income 12.3 19.8

EBITDA 60.4 73.0

Key financials

SHAREHOLDERS

HOSPITAL

MANAGEMENT NURSING HOMES REHABILITATION

CIR (51.3%)

ARDIAN (46.7%)

Management and others (2.0%)

Operating structure

2014 2015

5.1

3.2

3.6

11.7

39.2

141.0 8.2 24.0

58.4

107.7

18.5

Revenues breakdown by region (2015)

4.1

• Increase in revenues (+11.9%), thanks to relevant

acquisitions/green fields in the nursing home/rehabilitation

area (€42.2 million in 2014 and 2015)) and to organic

growth across all businesses lines

• Contribution to EBITDA increase from acquisitions and

greenfields is €10.1 million

• In 2015 4 nursing homes were acquired in the Milan area

and in October a new nursing home in Turin and a

psychiatric rehabilitation facility in the Marche region were

started

• The company now has 77 facilities, located mainly in the

centre and north of Italy with more than 7,300 beds

• Main objectives are to pursue market consolidation in core

businesses and to selectively expand internationally, with a

primary focus on India

9M 2015 Performance and outlook

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• On 16 March 2016 CIR and F2i (Italian Infrastructure Fund) reached an

agreement with Ardian to buy 46.7%(1) of KOS for an amount of € 292 million.

• F2i will buy a 37.3%(2) stake, investing € 240 million

• CIR will buy the remaining part, plus shares held by minority investors

and those deriving from the exercise of management stock options,

investing €85 million and raising its stake to 62.7%(2)

• The implied valuation for 100% of KOS equity is € 643 million(2)

• Additional international financial investors may take part to the deal, by

entering F2i’s investment vehicle with a minority interest

• The closing of the deal is expected to take place by the end of May, once the

approval of the Italian Competition and Markets Authority has been obtained

KOS – F2i and CIR to purchase 46.7% of KOS from Ardian

(1) Pre-dilution of management stock options

(2) Post-dilution of management stock options

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• Education

- In November 2015 CIR sold its 17.4% shareholding in SEG, for a total

consideration of € 64.1 million, a capital gain on investment of € 41,9

million, and an IRR of 30%

• Private equity

- Diversified portfolio of private equity funds and direct minority private

equity investments, with a fair value of € 59.2 million at 31 December

2015. The portfolio has reached its maturity/reimbursement phase, as

limited investments were added in the recent past

• NPL

- At the end of December 2015 the net value of CIR investment in the non-

performing loan portfolios amounted to €43 million.

- CIR no longer owns operating companies in this industry and is currently

in the process of collecting the existing receivables, with no further

investments

Non-core investments

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• This document has been prepared by CIR for information purposes only and for use

in presentations of the Group’s results and strategies.

• For further details on CIR and its Group, reference should be made to publicly

available information, including the Annual Report, the Semi-Annual and Quarterly

Reports

• Statements contained in this document, particularly the ones regarding any CIR

Group possible or assumed future performance, are or may be forward looking

statements and in this respect they involve some risks and uncertainties

• Any reference to past performance of CIR Group shall not be taken as an indication

of future performance

• This document does not constitute an offer or invitation to purchase or subscribe for

any shares and no part of it shall form the basis of or be relied upon in connection

with any contract or commitment whatsoever

Disclaimer

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