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DeA Capital_res_int_di_ges_al_30_9_2012_eng DeA Capital_res_int_di_ges_al_30_9_2012_eng Document Transcript

  • Interim Management Report to 30 September 2012 1 INTERIM MANAGEMENT REPORT TO 30 SEPTEMBER 2012 ______________________ Third quarter 2012 First nine months of 2012 Board of Directors of DeA Capital S.p.A. Milan, 12 November 2012
  • Interim Management Report to 30 September 2012 2 DeA Capital S.p.A. (the company or the parent company) Corporate information DeA Capital S.p.A. is subject to the management and co-ordination of De Agostini S.p.A. Registered office: Via Borgonuovo, 24, 20121 Milan, Italy Share capital: EUR 306,612,100 (fully paid up), represented by shares with a nominal unit value of EUR 1, each, totalling 306,612,100 shares (30,478,368 of which own shares at 30 September 2012) Tax code, VAT code and recorded in the Milan Register of Companies under no. 07918170015 Board of Directors (*) Chairman Lorenzo Pellicioli Chief Executive Officer Paolo Ceretti Directors Lino Benassi (1) Rosario Bifulco (1/4/5) Marco Boroli Daniel Buaron Claudio Costamagna (3/5) Marco Drago Roberto Drago Severino Salvemini (2/3/5) (#) Board of Statutory Auditors (*) Chairman Angelo Gaviani Regular Auditors Gian Piero Balducci Cesare Andrea Grifoni Alternate Auditors Andrea Bonafè Maurizio Ferrero Giulio Gasloli Secretariat of the Board of Directors Diana Allegretti Manager responsible for preparing Manolo Santilli the company’s accounting statements Independent auditors KPMG S.p.A. auditors (*) In office until the approval of the financial statements to 31 December 2012 (#) Co-opted by the Board of Directors of DeA Capital S.p.A. on 14 May 2012 Member of the Control and Risk Committee (2) Member and Chairman of the Control and Risk Committee (3) Member of the Remuneration Committee (4) Member and Co-ordinator of the Remuneration Committee (5) Independent director
  • Interim Management Report to 30 September 2012 3 Contents Interim Report on Operations 1. Profile of DeA Capital S.p.A. 2. Information for shareholders 3. The DeA Capital Group’s key Statement of Financial Position and Income Statement figures 4. Significant events in the third quarter of 2012 5. Results of the DeA Capital Group 6. Other information Consolidated Financial Statements and Notes to the Accounts for the period 1 January – 30 September 2012 Statement of Responsibilities for the Interim Management Report to 30 September 2012
  • Interim Management Report to 30 September 2012 4 Interim Report on Operations
  • Interim Management Report to 30 September 2012 5 1. Profile of DeA Capital S.p.A. With an investment portfolio of around EUR 840 million and assets under management of over EUR 11,000 million, DeA Capital S.p.A. is one of Italy’s largest alternative investment operators. The company, which operates in both the private equity investment and alternative asset management businesses, is listed on the FTSE Italia STAR segment of the Milan stock exchange, and heads the De Agostini Group in the area of financial investments. DeA Capital has "permanent" capital, and therefore has the advantage – compared with traditional private equity funds, which are normally restricted to a pre-set duration – of greater flexibility in optimising the timing of entry to and exit from investments. In terms of investment policy, this flexibility allows it to adopt an approach based on value creation over the medium to long term. PRIVATE EQUITY INVESTMENT ALTERNATIVE ASSET MANAGEMENT  Direct investments In the services sector, in Europe and Emerging Europe  Indirect investments In private equity funds of funds, co- investment funds and theme funds  IDeA Capital Funds SGR, which manages private equity funds (funds of funds, co-investment funds and theme funds) Assets under management: EUR 1.2 billion  IDeA FIMIT SGR, which manages real estate funds Assets under management: EUR 9.8 billion  Soprarno SGR, which manages total return funds and other services companies (IDeA SIM, IDeA Servizi Immobiliari and IDeA Agency)
  • Interim Management Report to 30 September 2012 6 At the end of the third quarter of 2012, the corporate structure of the group headed by DeA Capital S.p.A. (DeA Capital Group, or the Group) was as follows:   DeA Capital S.p.A. Shareholdings and VC Funds 100% DeA Capital Investments S.A. (Luxembourg) Quota IDeA OF I Quota IDeA I Fund of Funds Shareholding Kenan Investments Shareholding Santé Shareholding Sigla Luxembourg Shareholding Migros Shareholding Stepstone IDeA Servizi Immobiliari IDeA Agency 100% IDeA Capital Funds SGR 100% 100% Soprarno SGR 65% Quota ICF II 100% 65% Shareholding Sigla Shareholding GDS Private Equity Investment Alternative Asset Management Holding Companies IDeA SIM Quota EESS IFIM 100% 20,98% 40,32% IDeA FIMIT SGR Quota AVA Direct Private Equity Investment Indirect Private Equity Investment DeA Capital Real Estate Alternative Asset Management With regard to the corporate structure shown above, on 1 January 2012, the merger by incorporation of the wholly-owned subsidiary IDeA Alternative Investments into DeA Capital S.p.A., which was decided by the Boards of Directors of these companies on 26 July 2011, became effective. The purpose of the merger, which entailed the reorganisation of the DeA Capital Group’s corporate structure, was to centralise within the parent company the cash flows from the Alternative Asset Management business, and to determine the strategic guidelines for this business. Subsequently, on 28 March 2012, an agreement was signed with Deb Holding, a company controlled by the director Daniel Buaron that holds 30% of the share capital of FARE Holding. The purpose of the agreement was to bring forward, with effect from 24 April 2012, the exercise of the option to sell the stake in FARE Holding held by Deb Holding to DeA Capital S.p.A. Under the agreements stipulated, on 24 April 2012 DeA Capital S.p.A. took full control of FARE Holding, and changed the company name of FARE Holding and its subsidiaries FARE and FAI, to DeA Capital Real Estate, IDeA Servizi Immobiliari and IDeA Agency respectively. Lastly, on 11 April 2012, an agreement was signed with Massimo Caputi and the company he controls, Feidos S.p.A., which together own a stake of 41.69% in I.F.IM. (IFIM), which in turn holds a stake of 20.98% in IDeA FIMIT SGR. The purpose of the agreement was to bring forward, to this date, the exercise of the option to sell the stakes in IFIM held by Massimo Caputi and Feidos to DeA Capital S.p.A. Following the transaction, DeA Capital S.p.A. acquired full control of IFIM.
  • Interim Management Report to 30 September 2012 7 At 30 September 2012, the DeA Capital Group reported group shareholders’ equity of EUR 709.6 million, corresponding to a net asset value (NAV) of EUR 2.57 per share, with an investment portfolio of EUR 843.0 million. More specifically, the investment portfolio, which consists of private equity investments of EUR 441.5 million, private equity investment funds of EUR 171.9 million and net assets relating to the Alternative Asset Management business of EUR 229.6 million breaks down as follows. Investment portfolio n. EUR/mln Equity investments 8 441.5 Funds 12 171.9 Private Equity Investment 20 613.4 Alternative Asset Management (*) 6 229.6 Investment portfolio 26 843.0 (*) Equity investments in subsidiaries relating to Alternative Asset Management are valued using the equity method in this table. 30.09.2012  PRIVATE EQUITY INVESTMENT o Main investments  strategic shareholding in Générale de Santé (GDS), France's leading private healthcare provider, whose shares are listed on the Eurolist market in Paris (with a free float of less than 5% and low trading volumes). The investment is held through the Luxembourg-registered company Santé S.A., an associate of the DeA Capital Group (with a stake of 42.89%)  minority shareholding in Migros, Turkey's biggest food retail chain, whose shares are listed on the Istanbul Stock Exchange. The investment is held through the Luxembourg-registered company Kenan Investments S.A., an investment recorded in the AFS portfolio of the DeA Capital Group (with a stake of 17.03%)  strategic shareholding in Sigla, which provides finance to all customer segments (salary-backed loans and personal loans) and services non- performing loans in Italy. The investment is held through the Luxembourg- registered company Sigla Luxembourg S.A., an associate of the DeA Capital Group (with a stake of 41.39%)
  • Interim Management Report to 30 September 2012 8 o Funds  units in four funds managed by the subsidiary IDeA Capital Funds SGR i.e. in the funds of funds IDeA I Fund of Funds (IDeA I FoF) and ICF II, in the co-investment fund IDeA Opportunity Fund I (IDeA OF I, formerly IDeA CoIF I) and in the theme fund IDeA Energy Efficiency and Sustainable Growth (IDeA EESS)  a unit in the real estate fund Atlantic Value Added (AVA) managed by IDeA FIMIT SGR  units in seven venture capital funds  ALTERNATIVE ASSET MANAGEMENT  controlling interest in IDeA Capital Funds SGR (100%), which manages private equity funds (funds of funds, co-investment funds and theme funds) with about EUR 1.2 billion in assets under management and four managed funds;  controlling interest in IDeA FIMIT SGR (61.30%), Italy's largest real estate asset management company with about EUR 9.8 billion in assets under management and 31 managed funds (including five listed funds)  controlling interest in Soprarno SGR (65%), which manages total return funds, in IDeA Servizi Immobiliari/IDeA Agency (100%), which operates in project, property and facility management and real estate brokerage, and in IDeA SIM (65%), which operates in the sector of property brokerage companies
  • Interim Management Report to 30 September 2012 9 2. Information for shareholders  Shareholder structure - DeA Capital S.p.A. (#) De Agostini SpA 58.3% Treasury stock 9.9% Mediobanca 4.8% DEB Holding* 3.8% Free float 23.2% (#) Figures to 30 September 2012 (*) Company controlled by director Daniel Buaron
  • Interim Management Report to 30 September 2012 10  Share performance (°) Period from 11 January 2007, when DeA Capital S.p.A. began operations, to 30 September 2012 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 DeA Capital LPX 50 FTSE Star FTSE All Period from 1 January 2012 to 30 September 2012 1.10 1.20 1.30 1.40 1.50 1.60 DeA Capital FTSE All FTSE Star LPX 50 (°) Source: Bloomberg
  • Interim Management Report to 30 September 2012 11  Investor relations DeA Capital S.p.A. maintains stable and structured relationships with institutional and individual investors. In 2012, the company continued its communications campaign, participating in the Milan Star Conference in March 2012 and the STAR Conference in London in October 2012, and holding meetings and conference calls with institutional investors, portfolio managers and financial analysts from Italy and abroad. Coverage of the DeA Capital stock is currently carried out by Equita SIM and Intermonte SIM, the two main intermediaries on the Italian market, with Intermonte SIM acting as a specialist. The research prepared by these intermediaries is available in the Investor Relations section of the website www.deacapital.it. In December 2008, the DeA Capital share joined the LPX50® and LPX Europe® indices. The LPX® indices measure the performance of the major listed companies operating in private equity (“Listed Private Equity” or LPE). Due to its high degree of diversification by region and type of LPE investment, the LPX50® index has become one of the most popular benchmarks for the LPE asset class. The method used to constitute the index is published in the LPX Equity Index Guide. For further information please visit the website www.lpx.ch. DeA Capital also belongs to the GLPE Global Listed Private Equity Index, the index created by Red Rocks Capital, a US asset management company specialising in listed private equity companies. The index was created to monitor the performance of listed private equity companies around the world and is composed of 40 to 75 stocks. For further information: www.redrockscapital.com (GLPE Index). The website is the primary mode of contact for individual investors, who may choose to subscribe to a mailing list and send questions or requests for information and documents to the company's Investor Relations department, which is committed to answering queries promptly, as stated in the Investor Relations Policy published on the site. A quarterly newsletter is also published for individual investors with the aim of keeping them updated on key events, as well as providing clear and simple analysis of quarterly results and share performance. DeA Capital also launched a mobile site, www.deacapital.mobi in July 2012. This gives stakeholders a further tool, as they can access key information about DeA Capital via their mobile phone or smartphone. Performance of the DeA Capital share at 30 September 2012 The company’s share declined by 55.2% between 11 January 2007, when DeA Capital S.p.A. began operations, and 30 September 2012. In the same period of time, the FTSE All-Share®, FTSE Star® and LPX50® reported performances of -62.2%, -39.2% and -46.3% respectively. The DeA Capital share lost 4.5% in the first nine months of 2012, while the FTSE All-Share®, the Italian market’s index, gained 0.9%, the FTSE Star® gained 11.8% and the LPX50® gained 20.7%. The share’s liquidity was lower than in 2011, with average daily trading volumes of around 100,000 shares. The share prices in the first nine months of 2012 are shown below: (in Euro) 1 Jan – 30 Sept 2012 Maximum price 1.49 Minimum price 1.17 Average price 1.32 Price at 30 September 2012 (EUR per share) 1.27 Market capitalisation At 30 September 2012 (EUR million) 351
  • Interim Management Report to 30 September 2012 12 3. The DeA Capital Group’s key Statement of Financial Position and Income Statement figures Key consolidated income statement and statement of financial position figures to 30 September 2012 compared with the corresponding figures to 30 September 2011 and 31 December 2011 are shown below. NAV/share (EUR) 2.57 2.38 2.60 Group NAV 709.6 669.0 738.1 Group net profit/(loss) (18.7) (43.6) 3.0 Comprehensive income (Group share) 46.0 (70.2) (8.8) (Statement of Performance – IAS 1) Investment portfolio 843.0 775.9 754.8 Net financial position – Holding Companies (124.6) (113.5) (16.9) Net financial position consolidated (110.6) (102.5) 10.2 (EUR million) September 30, 2012 September 30, 2011 December 31,2011 The table below shows the composition of NAV during the first nine months of 2012. Group NAV at 31.12.11 669.0 280.7 2.38 Purchase of own shares (6.0) (4.6) 1.32 Other comprehensive income - Statement of Performance – IAS 1 46.0 Other movements of NAV 0.6 Group NAV at 30.09.12 709.6 276.1 2.57 (*) Average price of purchases in 2012 Change in Group NAV Total value (EUR m) No. Shares (millions) Value per share (€) (*)
  • Interim Management Report to 30 September 2012 13 4. Significant events in the third quarter of 2012 The significant events that occurred in the third quarter of 2012 are summarised below. For events that took place during the first half of the year, please refer to the Half-Year Report to 30 June 2012, which was approved by the Board of Directors on 29 August 2012.  IDeA FIMIT – Acquisition of the business division Duemme SGR On 1 July 2012, the deed of transfer signed by IDeA FIMIT SGR and Duemme SGR for the business division comprising joint real estate investment funds managed by Duemme SGR (a subsidiary of the Banca Esperia Group specialising in asset management services) became effective. With the transfer of the business division, IDeA FIMIT SGR has taken over the management of eight funds with a total value of around EUR 520 million. This transaction confirms IDeA FIMIT SGR’s position as Italian leader with 31 real estate funds managed, and puts it among the major real estate asset management companies in Europe, thanks also to the expansion of its circle of institutional investors.  Private equity funds/real estate On 3 July 2012, 6 September 2012 and 14 September 2012, the DeA Capital Group increased its investment in the IDeA I FoF, ICF II, IDeA OF I, IDeA EESS and AVA funds, with total payments of EUR 8.9 million (EUR 3.9 million, EUR 1.6 million, EUR 3.2 million, EUR 0.1 million and EUR 0.1 million respectively). On 3 July 2012, the DeA Capital Group received capital reimbursements totalling EUR 2.2 million from the IDeA I FoF fund, to be used in full to reduce the value of the units. On 4 September 2012, the IDeA EESS fund completed the third closing, taking overall commitments to around EUR 59.5 million. Following the entry of the new shareholders, DeA Capital Investments held a 21.45% stake.  Loan agreement with Mediobanca – partial use of the revolving line On 25 September 2012 and following the end of the third quarter, the DeA Capital Group made full use of the EUR 40 million revolving credit line with Mediobanca – Banca di Credito Finanziario S.p.A. The use of this loan brings the Group's total loans from Mediobanca to EUR 120 million, including the previously existing bullet line of EUR 80 million. Note that the above-mentioned lines are due to be repaid via a single payment on 16 December 2015, although DeA Capital S.p.A. has the option to make full or partial early repayments during the term of the loan.
  • Interim Management Report to 30 September 2012 14 5. The DeA Capital Group’s results Consolidated results for the period relate to the operations of the DeA Capital Group in the following businesses:  Private Equity Investment, which includes the reporting units involved in private equity investment, broken down into equity investments (Direct Investments) and investments in funds (Indirect Investments)  Alternative Asset Management, which includes reporting units involved in asset management activities and related services, with a current focus on the management of private equity and real estate funds  The DeA Capital Group’s investment portfolio Changes in the DeA Capital Group's investment portfolio in the Private Equity Investment and Alternative Asset Management business areas, as defined above, are summarised in the table below. Investment portfolio n. EUR/mln Equity investments 8 441.5 Funds 12 171.9 Private Equity Investment 20 613.4 Alternative Asset Management (*) 6 229.6 Investment portfolio 26 843.0 (*) Equity investments in subsidiaries relating to Alternative Asset Management are valued using the equity method in this table. 30.09.2012 Details of portfolio asset movements in the first nine months of 2012 are provided in the sections on the Private Equity Investment and Alternative Asset Management businesses below.
  • Interim Management Report to 30 September 2012 15  Private Equity Investment In terms of equity investments, at 30 September 2012, the DeA Capital Group was a shareholder of:  Santé, indirect parent company of Générale de Santé (valued at EUR 229.7 million)  Kenan Investments, indirect parent company of Migros (valued at EUR 198.2 million)  Sigla Luxembourg, the direct parent company of Sigla (valued at EUR 12.6 million) The DeA Capital Group is also a shareholder in five companies (Elixir Pharmaceuticals Inc., Kovio Inc., Stepstone, Harvip Investimenti and Alkimis SGR – whose total value at 30 September 2012 was EUR 1.1 million). With regard to funds, at 30 September 2012, the DeA Capital Group held units in:  IDeA I FoF (valued at EUR 102.6 million)  IDeA OF I (valued at EUR 42.0 million)  ICF II (valued at EUR 13.5 million)  AVA (valued at EUR 2.5 million)  IDeA EESS and seven other venture capital funds (with a total value of approximately EUR 11.3 million) Valuations of equity investments and funds in the portfolio reflect estimates made using the information available on the date this document was prepared. Please see the notes to the financial statements below for further details on valuations and related estimates.
  • Interim Management Report to 30 September 2012 16 Investments in associates - Santé (parent company of GDS) Headquarters: France Sector: Healthcare Website: www.generale-de-sante.fr Investment details: On 3 July 2007, DeA Capital S.p.A. finalised the purchase, through its wholly-owned subsidiary DeA Capital Investments S.A., of a 43.01% stake in Santé S.A., the parent company of Générale de Santé S.A. both directly and through Santé Dévéloppement Europe S.A.S. At 30 September 2012, the DeA Capital Group's stake was 42.89% (i.e. 42.99% in economic terms). Brief description: Founded in 1987 and listed on the Eurolist market in Paris since 2001, Générale de Santé is a leading player in the private healthcare sector in France with revenues of about EUR 2 billion at end-2011. France is the second largest country in Europe in terms of annual healthcare expenditure after Germany. Its healthcare system is one of the most advanced in the world, is still heavily fragmented and is marked by the presence of numerous independent hospitals. The company has approximately 19,400 employees and 106 clinics in total. In addition, it is the main independent association of doctors in France (over 5,000 doctors). Its activities include medicine, surgery, obstetrics, oncology and radiotherapy, mental health, subacute pathologies and rehabilitation. The company operates under the following names: Générale de Santé Cliniques (acute care), Médipsy (psychiatry), Dynamis (rehabilitation) and Généridis (radiotherapy). The investment in Santé, which is reported under “Investments in associates”, is valued at approximately EUR 229.7 million in the consolidated financial statements to 30 September 2012 (EUR 235.2 million at 31 December 2011). The decrease compared with 31 December 2011 is due to the combined effect of the loss for the period of EUR 6.5 million and the increase in the fair value of the interest rate swaps taken out to hedge interest rate risk on debt exposure (EUR 1.0 million).
  • Interim Management Report to 30 September 2012 17 Générale de Santé (EUR million) First 9 months 2012 First 9 months 2011 % chg. Revenues 1,441 1,461 -1.3% EBITDA 175 186 -5.9% EBIT 105 57 83.2% Group net profit 43 4 n.a. Net financial debt (835) (906) -7.8% With regard to GDS’s operating performance, revenues in the first nine months of 2012 were slightly down on the previous year, but up by 2.3% on a same-structure basis (stripping out the impact on the 2011 figures of the clinics sold during that year). This was achieved as the new clinics that were opened during the period (two in the rehabilitation segment, two in psychiatry and one in medicine, surgery and obstetrics) gradually became fully operational and as a result of growth in the volume of activities. Note however that this growth in revenues occurred against a backdrop of mounting pressure to grow the top line, influenced by (i) trends in demand (a gradual shift in the mix of services offered towards outpatients provision, which have a lower unit cost/lower margins compared with full hospitalisation, and the postponement by patients of non-urgent treatment due to the economic crisis); and (ii) the regulatory framework and the definition of the provision of hospital services (increasing competitive pressure from public operators, that benefit from heavy government investment through discretionary components in the health budget, which offset the unfavourable trend in prices). In light of this trend in revenues, combined with the partial rigidity of the cost structure, it became clear that, in order to maintain expected profit levels, the reorganisation into “hubs” (chains of clinics that optimise provision of the service by tailoring it to the requirements of the relevant geographical area) could no longer be postponed. With specific reference to the final figures to 30 September 2012, a comparison of the EBIT and net result with last year’s figures shows that these were affected by one-off costs relating to the Plan Social completed in 2011 (with an effect on the net result of around EUR -19 million) and to the capital gains made on the clinics that were sold in 2012 (EUR 29 million). Net debt of EUR 835 million represents an improvement on the figure of EUR 854 million at 30 September 2012, thanks partly to the receipts from the clinics that were sold.
  • Interim Management Report to 30 September 2012 18 - Sigla Luxembourg (parent company of Sigla) Headquarters: Italy Sector: Consumer credit Website: www.siglacredit.it Investment details: On 5 October 2007, DeA Capital Investments finalised the acquisition of a stake (currently 41.39%) in Sigla Luxembourg, the holding company that controls Sigla, which operates in Italy and provides finance to all customer segments. Brief description: Sigla, which is recorded in the special list pursuant to art. 107 of the T.U.B. (Italian consolidated banking law) with effect from 31 March 2011, specialises in personal loans and "salary-backed loans". It is a benchmark operator in the provision of financial services to households, and operates throughout Italy, chiefly through a network of agents. The company’s product range of salary-backed loans and personal loans was expanded in 2010 to include the servicing of portfolios of unsecured non-performing loans (personal loans and credit cards). The investment in Sigla Luxembourg, which is reported under “Equity investments in associates”, is valued at approximately EUR 12.6 million in the consolidated financial statements to 30 September 2012 (EUR 22.0 million at 31 December 2011). The decrease compared with 31 December 2011 relates to the EUR 0.4 million loss for the period and an impairment charge of EUR 9.0 million to align the carrying value with the company’s pro-rata share of the net asset value at the same date. Sigla (EUR million) First 9 months 2012 First 9 months 2011 % chg. Loans to customers* 82.2 85.3 -3.6% Revenues from loans to customers 2.9 3.8 -23.0% CQS granted 60.3 102.4 -41.2% Revenues from CQS 3.1 5.1 -39.0% Group net profit (1.0) 0.0 n.a. * Net receivables exclude salary-backed loans (CQS) Sigla’s operating performance in the first nine months of 2012 recorded a decline at all levels of the income statement compared with the previous year, due mainly to the contraction in the number of salary-backed loans granted (a typically less capital-intensive product, on which the Group has gradually repositioned itself). At 30 September 2012, they recorded a fall of 41.2% compared with the same period in the previous year, which given the substantial rigidity in the cost structure, led to a loss of around EUR 1 million. Although the Group considers that Sigla is in a good position as regards the restructuring of the salary-backed loans business being undertaken following the entry into force of the new legislation required by the Regulator (increased pricing transparency and a reduction in the number of intermediate levels in the existing value chain between the organisation that grants the loan and the consumer, with the resulting sector concentration), the general macroeconomic scenario has forced us to make the above-mentioned impairment on the
  • Interim Management Report to 30 September 2012 19 goodwill implicit in the carrying value. Specifically, the ongoing effects of the economic crisis, together with the consequences arising from the deleveraging requirements of banks that grant salary-backed loans, have led to much longer times for top-line growth than were originally reflected in the asset valuation.
  • Interim Management Report to 30 September 2012 20 Investments in other companies - Kenan Investments (indirect parent company of Migros) Headquarters: Turkey Sector: Food retail Website: www.migros.com.tr Investment details: In 2008, the DeA Capital Group acquired about 17% of the capital of Kenan Investments, the company heading the structure to acquire the controlling interest in Migros. Brief description: Migros was established in 1954, and is the leading company in the food retail sector in Turkey with a share of about 34% in the organised retail market. Growth in the food retail sector in Turkey is a relatively recent phenomenon, brought about by the transition from traditional systems such as bakkals (small stores typically run by families) to an increasingly widespread organised distribution model driven by expansion and the modernisation process under way in Turkey. The company has a total of 839 outlets (at 30 June 2012) with a total net sales area of approximately 840,000 square metres. Migros is present in all seven regions of Turkey, and has a marginal presence in Kazakhstan and Macedonia. The company operates under the following names: Migros, Tansas and Macrocenter (supermarkets), 5M (hypermarkets), Ramstore (supermarkets abroad) and Kangurum (online store). One of the main extraordinary transactions completed by Migros was the sale of discount arm Şok on 24 August 2011 to Yildiz Holding Group, a leading Turkish food producer, for around TRY 600 million. The business sold consisted of some 1,200 supermarkets, with revenues in 2010 of TRY 1.2 billion (or around 19% of Migros’ consolidated revenues). The equity investment in Kenan Investments is recorded in the consolidated financial statements to 30 September 2012 at EUR 198.2 million (compared with EUR 127.1 million at 31 December 2011). The increase of EUR 71.1 million was due to the rise in the value of Migros shares (TRY 18.7 per share at 30 September 2012, compared with approximately TRY 12.6 per share at 31 December 2011), and the strengthening of the Turkish lira against the euro (2.31 TRY/EUR at 30 September 2012 versus 2.44 TRY/EUR at 31 December 2011). The effect on the DeA Capital Group’s NAV of this change in fair value was partially offset by the provisioning of estimated carried interest of around EUR 10.30 million, to be paid to the lead investor, BC Partners, based on the total capital gain. This was partly recognised in the income statement (EUR 3.0 million) and partly recognised in the fair value reserve (EUR 7.3 million).
  • Interim Management Report to 30 September 2012 21 Migros (mln YTL) First Half 2012 First Half 2011 % chg. Revenues 3,007 2,640 13.9% EBITDA 196 178 9.9% EBIT 104 98 6.1% Group net profit 134 (327) n.s. Net financial debt (1,475) (1,833) 20% * Awaiting publication of the data of the first 9 months - the data for half year are provided In macroeconomic terms, the Turkish economy experienced GDP growth in the first half of 2012 of 3% y/y. The food retail sector in Turkey remained buoyant in the first half of 2012, with sustained growth in commercial space (11.5% in 12 months) and the supermarket segment (10.2% yoy), which maintained its dominant position. In terms of Migros’ operating performance, revenues grew by 13.9% in the first half of 2012, compared with the first half of 2011 (the scope of activities for which does not include the discount division sold in August 2011), driven by the expansion of the network of sales outlets (135 new supermarkets were opened in 12 months), accompanied by more modest growth in EBITDA, and broadly stable operating profit. The net result increased, due to the revaluation of the debt component in Euro following the rise of the Turkish lira. As Migros announced previously, the company plans to expand the network by opening about 100 new points of sale per year in 2012 and the medium term. The new openings will mainly be in the form of small supermarkets of between 150 and 2,500 square metres. Specifically, the 150-350 square metre size will be used in high-traffic residential areas with a special emphasis on fresh products and a much broader assortment than in discount stores.
  • Interim Management Report to 30 September 2012 22 - Other investments Other investments totalled approximately EUR 1.1 million in the consolidated financial statements to 30 September 2012. Company Registered office Business sector % holding Alkimis SGR Italy Asset Management Company 10.00 Elixir Pharmaceuticals Inc. USA Biotech 1.30 Harvip Investimenti S.p.A. Italy Distressed Asset Real Estate and Other Investments 25.00 Kovio Inc. USA Printed Circuitry 0.42 Stepstone Acquisition Sàrl Luxembourg Special Opportunities 36.72 Funds At 30 September 2012, the DeA Capital Group’s private equity investment business included investments (other than the investment in the IDeA OF I fund and in the AVA real estate fund, which are classified under “Investments in associates”, based on the units held) in two funds of funds (IDeA I FoF and ICF II), one theme fund (IDeA EESS) and another seven venture capital funds for a total of approximately EUR 171.9 million (corresponding to the estimated fair value calculated using the information available on the date this document was prepared). Residual commitments associated with all the funds in the portfolio were approximately EUR 145.5 million (in their respective original currencies of denomination: EUR 141.9 million and GBP 2.8 million).
  • Interim Management Report to 30 September 2012 23 - IDeA OF I IDeA Opportunity Fund I Headquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: IDeA OF I is a closed-end fund under Italian law for qualified investors, which began activity on 9 May 2008 and is managed by IDeA Capital Funds SGR. At its meeting on 20 July 2011, the Board of Directors of IDeA Capital Funds SGR approved a number of regulatory changes. These included changing the name of the IDeA Co- Investment Fund I to IDeA Opportunity Fund I (IDeA OF I) and extending investment opportunities to qualified minority interests, independently or via syndicates. The DeA Capital Group has a total commitment of up to EUR 101.8 million in the fund. Brief description: IDeA OF I has total assets of approximately EUR 217 million. Its objective is to invest via syndicates with a lead investor, independently, or by purchasing qualified minority interests. At 30 September 2012, IDeA OF I had called up approximately 55.9% of the total commitment after making six investments: - on 8 October 2008, it acquired a 5% stake in Giochi Preziosi S.p.A., a company active in the production, marketing and sale of children’s games with a product line covering childhood to early adolescence - on 22 December 2008, it acquired a 4% stake in Manutencoop Facility Management S.p.A. by subscribing to a reserved capital increase This company is Italy’s leading integrated facility management company, providing and managing a wide range of property management services and other services for individuals and government agencies - on 31 March 2009, it acquired a 17.43% stake in Grandi Navi Veloci S.p.A., an Italian shipping company that transports passengers and goods on various routes around the Mediterranean Sea. On 2 May 2011, with the finalisation of Marinvest's entry into the shareholder structure of Grandi Navi Veloci S.p.A. by subscribing to a reserved capital increase, the stake held by IDeA OF I was diluted to 9.21% On 2 August 2012, IDeA OF I’s decision not to subscribe, on a pro-rata basis, to a further capital increase led to a dilution in its holding of 3.68%; - on 10 February 2011, it invested in a bond that is convertible into shares of Euticals S.p.A., the Italian leader in the production of active ingredients for pharmaceutical companies that operate in the generics sector, for EUR 10 million. As part of the extraordinary transaction that led to the transfer of the controlling share in Euticals S.p.A., on 3 April 2012 these bonds were transferred into the acquisition vehicle, Lauro 57, which now owns 100% of Euticals S.p.A.; in exchange, a stake of 7.77%
  • Interim Management Report to 30 September 2012 24 was acquired in the same acquisition vehicle (recording a capital gain of EUR 6.9 million); - on 25 February 2011, it purchased a 9.29% stake in Telit Communications PLC, the third-largest producer of machine-to-machine communications systems in the world; the stake held by OF I was subsequently diluted to 9.13% due to the exercise of stock options by the company's management - On 11 September 2012, an investment agreement was signed with Filocapital S.r.l., the main shareholder in Iacobucci HF Electronics S.p.A. (“Iacobucci”), a company that manufactures trolleys for aeroplanes and trains, and specialises in the design, production and marketing of components for aircraft fittings and furnishings. A maximum of EUR 12 million will be invested, in several phases: (i) subscription to a bond that is convertible into Iacobucci shares, totalling EUR 6 million on the closing date; (ii) subscription to a capital increase, in divisible form, totalling EUR 6 million, to be paid in two equal tranches – following approval of the half-yearly figures to 30 June 2013 and the financial statements to 31 December 2013 – based on the achievement of certain EBITDA and net debt figures. If the above-mentioned convertible bond were converted and the events for a capital increase materialised, IDeA OF I would acquire an overall stake of 34.9% in Iacobucci. On 9 October 2012, after the closing date for the period, IDeA OF I invested EUR 15 million to acquire an indirect stake of 4.6% in Patentes Talgo S.A. (“Talgo”), a Spanish company that designs and produces solutions for the rail sector, chiefly sold on the international market (high-speed trains, and maintenance vehicles and systems). The units held in IDeA OF I were reported in the consolidated financial statements to 30 September 2012 at EUR 42.0 million. The change in value compared with the figure at 31 December 2011 is attributable to capital calls of EUR 3.8 million, an increase of EUR 1.0 million in the fair value and pro-rata net profit for the period of EUR 0.4 million. The table below shows the key figures for IDeA OF I at 30 September 2012. IDeA OF I Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) IDeA Opportunity Fund I Italy 2008 216,550,000 101,750,000 46.99 Residual Commitments Total residual commitment in: Euro 44,913,171
  • Interim Management Report to 30 September 2012 25 - IDeA I FoF IDeA I Fund of Funds Headquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: IDeA I FoF is a closed-end fund under Italian law for qualified investors, which began activity on 30 January 2007 and is managed by IDeA Capital Funds SGR. The DeA Capital Group has a total commitment of up to EUR 173.5 million in the fund. Brief description: IDeA I FoF, which has total assets of approximately EUR 681 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries. It optimises the risk-return profile through careful diversification of assets among managers with a proven track record of returns and solidity, different investment approaches, geographical areas and maturities. At the date of the latest report available, the IDeA ICF II portfolio was invested in 42 funds with different investment strategies; these funds in turn hold around 446 positions in companies with various degrees of maturity that are active in geographical regions with different growth rates. The funds are diversified in the buy-out (control) and expansion (minorities) categories, with overweighting towards medium- and small-scale transactions and special situations (distressed debt/equity and turnaround). At 30 September 2012, IDeA I FoF had called up 73.3% of its total commitment and had made distributions totalling approximately 20.8% of that commitment.
  • Interim Management Report to 30 September 2012 26 Other important information: Below is an analysis of the portfolio, updated to the date of the latest report available, broken down by year of investment, geographical area, type and sector. Notes: 1. % of the FMV of the investment at 30 September 2012 2. % of fund size based on paid-in exposure (capital invested + residual commitments) at 30 September 2012 The IDeA FoF units are valued at approximately EUR 102.6 million in the consolidated financial statements to 30 September 2012, with a change during the period that includes an increase in net investment of EUR 4.6 million and in fair value of approximately EUR 1.8 million. The table below shows the key figures for IDeA I FoF at 30 September 2012. IDeA I FoF Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) IDeA I Fund of Funds Italy 2007 681,050,000 173,500,000 25.48 Residual Commitments Total residual commitment in: Euro 47,272,442 Breakdown by sector (1)Breakdown by type (2) Breakdown by vintage (1) Breakdown by geography (2) 21% Not committed 1%Global RoW 14% US 20% Europe45% 9% 6% Non Impegnato 1%Special Situations 18% Expansion VC 5% Asset Based PE Small Buyout 14% Mid Buyout 31% Large Buyout 15% 11% 5% 13% Pharmaceutical1% Healthcare6% Cons. Staples 7% Cons. Discretionary 13% Distressed Portfolio 9% Materials Energiy 14% Transport Industrial 7% RE 3% Luxury 4% IT Media 3% Financial 4% 25% 2005 3% 2000-2004 3% 2012 4% 2011 11% 2010 2009 17% 2008 16% 2007 14% 2006 6%
  • Interim Management Report to 30 September 2012 27 - ICF II ICF II Headquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: ICF II is a closed-end fund for qualified investors under Italian law, which began activity on 24 February 2009 and is managed by IDeA Capital Funds SGR. The DeA Capital Group has a total commitment of up to EUR 51 million in the fund. Brief description: ICF II, which had total assets of EUR 281 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries. It optimises the risk-return profile through careful diversification of assets among managers with proven historical returns and solidity, different investment approaches, geographical areas and maturities. The fund started building its portfolio by focusing on funds in the area of mid-market buy-outs, distressed and special situations, loans, turnarounds and funds with a specific sector slant, targeting in particular opportunities offered in the secondary market. At the date of the latest report available, the ICF II portfolio was invested in 25 funds with different investment strategies; these funds in turn hold positions in around 154 companies with various degrees of maturity that are active in geographical regions with different growth rates. At 30 September 2012, IDeA I FoF had called up 28.0% of its total commitment and had made distributions totalling approximately 2.6% of that commitment. Other important information: Below is an analysis of the portfolio, updated to the date of the latest report available, broken down by year of investment, geographical area, type and sector.
  • Interim Management Report to 30 September 2012 28 Notes: 1. % of the FMV of the capital invested at 30 September 2012 2. % of commitment based on paid-in exposure (capital invested + residual commitments) at 30 September 2012 The ICF II units are valued at approximately EUR 13.5 million in the consolidated financial statements to 30 September 2012, with a change during the period that includes an increase in net investment of EUR 4.8 million and a decrease in fair value of approximately EUR 0.5 million. The table below shows the key figures for ICF II at 30 September 2012. ICF II Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) ICF II Italy 2009 281,000,000 51,000,000 18.15 Residual Commitments Total residual commitment in: Euro 36,735,827 Breakdown by sector (1)Breakdown by type (2) Breakdown by geography (2) 16% Global RoW 28% US 27% Europe 29% 16% Special Situations 25% Expansion VC 6% Small/Mid Buyout 36% Large Buyout 16% 17% 2004-2006 1% 2012 2011 28% 2010 26% 2009 24% 2008 1% 2007 3% 20% 3% 8% Distressed Portfolio 2% Energy Materials 10% Industrial 0% RE 4% Luxury IT 18% Media 3% Financial Healthcare 4% Cons. Staples12% Cons. Discretionary 16% Breakdown by vintage (1)
  • Interim Management Report to 30 September 2012 29 - IDeA EESS IDeA Efficienza Energetica e Sviluppo Sostenibile (Energy Efficiency and Sustainable Development) Headquarters: Italy Sector: Private equity Website: www.ideasgr.it Investment details: IDeA EESS is a closed-end fund under Italian law for qualified investors, which began operating on 1 August 2011 and is managed by IDeA Capital Funds SGR. The DeA Capital Group has a total commitment of up to EUR 12.8 million in the fund. Brief description: IDeA EESS is a closed-end mutual fund under Italian law for qualified investors, which seeks to acquire minority and controlling interests in unlisted companies in Italy and abroad (particularly Germany, Switzerland and Israel), by investing jointly with local partners. The fund is dedicated to investing in small and medium-sized manufacturing and service companies operating in the field of energy savings and the efficient use of natural resources. It focuses on the development of faster and cheaper solutions in the use of renewable energy sources while continuing to reduce CO2 emissions effectively, against a backdrop of sustained growth in global energy demand. On 4 September 2012, the fund undertook a third closing, which brought the total commitment to EUR 59.5 million. At 30 September 2012 IDeA OF I had called up approximately 8.4% of the total commitment, after making an investment. Specifically, on 18 April 2012, the fund signed an investment agreement to acquire 48% of Domotecnica Italiana S.r.l. (independent Italian franchising of thermo-hydraulic installers) for approximately EUR 2.6 million, as well as a commitment to subscribe, within the next 18 months, to a capital increase totalling EUR 2.0 million (IDeA EESS pro-rata share: EUR 1.0 million). The IDeA EESS units have a value of approximately EUR 0.6 thousand in the consolidated financial statements to 30 September 2012, with a change in the period that includes contributions paid in the form of capital calls of EUR 0.8 thousand. The table below shows the key figures for IDeA EESS at 30 September 2012. IDeA EESS Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) IDeA Efficienza Energetica e Sviluppo Sostenibile Italy 2011 59,450,000 12,800,000 21.53 Residual Commitments Total residual commitment in: Euro 11,731,124
  • Interim Management Report to 30 September 2012 30 - AVA Atlantic Value Added Headquarters: Italy Sector: Private Equity – Real Estate Website: www.ideafimit.it Investment details: The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" is a mixed- contribution fund for qualified investors that began operations on 23 December 2011. DeA Capital Investments subscribed to a total commitment in the fund of up to EUR 5 million (corresponding to 9.1% of the overall commitment), including payments of EUR 2.6 million already made (five class A units). Brief description: The Atlantic Value Added fund began its operations with a primary focus on real estate investments in the office and residential markets with a potential for growth in value. The duration of the fund is eight years. The fund, which is managed by the subsidiary IDeA FIMIT SGR, completed the first closing with a commitment of around EUR 55 million. On 29 December 2011, the fund made its first investment totalling EUR 41.5 million through the purchase/subscription of 83 units in the Venere Fund, a closed-end speculative reserved real estate fund managed by IDeA FIMIT SGR. The Venere Fund's real estate portfolio consists of 15 properties primarily for residential purposes located in northern Italy. The units in AVA are valued at around EUR 2.5 million in the consolidated financial statements to 30 September 2012, with a change in the period that includes the pro-rata portion of the net loss for the period (EUR 0.1 million) and contributions paid in the form of capital calls (0.1 million). The table below shows the key figures for AVA at 30 September 2012. AVA Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) Atlantic Value Added Italy 2011 55,000,000 5,000,000 9.08 Residual Commitments Total residual commitment in: Euro 2,370,000
  • Interim Management Report to 30 September 2012 31 - Units in venture capital funds Units in venture capital funds are all concentrated in the parent company DeA Capital S.p.A., and are valued at approximately EUR 10.7 million in the consolidated financial statements to 30 September 2012. The table below shows the key figures for venture capital funds in the portfolio at 30 September 2012. Venture Capital Funds Registered office Year of commit ment Fund Size Subscribed commitme nt % DeA Capital in fund Dollars (USD) Doughty Hanson & Co Technology UK EU 2004 271,534,000 1,925,000 0.71 GIZA GE Venture Fund III Delaware U.S.A. 2003 211,680,000 10,000,000 4.72 Israel Seed IV Cayman Islands 2003 200,000,000 5,000,000 2.50 Pitango Venture Capital II Delaware U.S.A. 2003 125,000,000 5,000,000 4.00 Pitango Venture Capital III Delaware U.S.A. 2003 417,172,000 5,000,000 1.20 Total Dollars 26,925,000 Euro (€) Nexit Infocom 2000 Guernsey 2000 66,325,790 3,819,167 5.76 Sterlings (GBP) Amadeus Capital II UK EU 2000 235,000,000 13,500,000 5.74 Residual Commitments Total residual commitment in: Euro 3,561,000
  • Interim Management Report to 30 September 2012 32  Alternative Asset Management At 30 September 2012, DeA Capital S.p.A. was the owner of:  100% of IDeA Capital Funds SGR  61.30% of IDeA FIMIT SGR (including 40.32% held through DeA Capital Real Estate, and 20.98% through IFIM)  100% of IDeA Servizi Immobiliari/IDeA Agency (which operates in project, property and facility management and real estate brokerage), 65% of Soprarno SGR (which operates in asset management through the management of total return funds) and 65% of IDeA SIM (which operates in investment consultancy with no temporary or permanent holdings of liquid assets or clients’ financial instruments, and with no assumption of risk) - IDeA Capital Funds SGR Headquarters: Italy Sector: Alternative Asset Management - Private Equity Website: www.ideasgr.it Investment details: IDeA Capital Funds SGR is one of the leading independent Italian asset management companies operating in the management of direct funds, and funds of private equity funds. The asset management company manages four closed-end private equity funds, including two funds of funds (IDeA I FoF and ICF II), a "direct" co-investment fund (IDeA OF I) and a sector fund dedicated to energy efficiency (IDeA EESS). The investment programmes of IDeA Capital Funds SGR, which are regulated by the Bank of Italy and Consob, leverage the management team's wealth of experience in the sector. The investment strategies of funds of funds focus on building a diversified portfolio in private equity funds in the top quartile or that are next-generation leaders with balanced asset allocation through diversification by:  Industrial sector  Investment strategy and stages (buy-outs, venture capital, special situations, etc.)  Geographical region (Europe, US and the Rest of the World)  Year (commitments with diluted investment periods over time) The investment strategies of the "direct" co-investment fund focus on minority interests in medium to large-sized LBOs together with leading qualified investors with businesses that primarily focus on Europe, and diversification as a function of the appeal of individual sectors by limiting investments during the early stage and excluding purely real estate investments. The investment philosophy of the EESS sector fund is focused on growth capital and buyout private equity to support the growth of small and medium-sized enterprises with excellent products or services in the energy efficiency and sustainable growth arena. Investments in infrastructure for the generation of energy from renewable sources or early stage investments can be made in compliance with regulatory restrictions. The main geographical focus of these funds is Italy.
  • Interim Management Report to 30 September 2012 33 The table below summarises the value of assets under management and management fees for IDeA Capital Funds SGR at 30 September 2012. (EUR million) Asset Under Management at 30.09.2012 Management fees at 30.09.2012 IDeA Capital Funds SGR ICF II 281 2.1 IDeA EESS 59 1.0 IDeA I FoF 681 4.2 IDeA OF I 217 1.7 Total IDeA Capital Funds SGR 1,238 9.0 With regard to operating performance, the company reported an increase in overall management fees received in the first nine months of 2012 compared with the same period in the previous year. Assets under management increased by EUR 59 million. IDeA Capital Funds SGR (EUR million) First Nine Months of 2012 First Nine Months of 2011 AUM 1,238 1,230 Management fees 10.6 9.5 EBT 6.6 6.2 Net profit 4.3 4.1
  • Interim Management Report to 30 September 2012 34 - IDeA FIMIT SGR Headquarters: Italy Sector: Alternative Asset Management - Real Estate Website: www.firstatlantic.it Investment details: IDeA FIMIT SGR is the most important independent real estate asset management company in Italy, with around EUR 9.8 billion in assets under management and 31 managed funds (including five listed funds). This puts it among the major partners of Italian and international investors in promoting, creating and managing closed-end mutual investment funds in real estate. IDeA FIMIT SGR has three main lines of business:  the development of real estate mutual investment funds dedicated to institutional clients and private investors  the promotion of innovative real estate financial instruments to satisfy investors’ increasing demands  the professional management (technical, administrative and financial) of real estate funds with the assistance of in-house experts as well as the best independent technical, legal and tax advisors on the market The company has concentrated its investments in transactions with low risk, stable returns, low volatility, simple financial structures and, most importantly, an emphasis on real estate value. In particular, the asset management company specialises in "core" and "core plus" properties, but its major investments also include important "value added" transactions. Due in part to successful transactions concluded in recent years, the asset management company is able to rely on a panel of prominent unit-holders consisting of Italian and international investors with a high standing such as pension funds, bank and insurance groups, capital companies and sovereign funds. On 1 July 2012, the deed of transfer signed by IDeA FIMIT SGR and Duemme SGR for the business division comprising joint real estate investment funds managed by Duemme SGR (a subsidiary of the Banca Esperia Group specialising in asset management services) became effective. The transfer of the business division has enabled IDeA FIMIT SGR to take on the management of eight real estate funds with assets that include around 60 buildings, worth a total of approximately EUR 520 million.
  • Interim Management Report to 30 September 2012 35 The table below summarises the value of assets under management and management fees for IDeA FIMIT SGR. (EUR million) Asset Under Management at 30.09.2012 Management fees at 30.09.2012 Breakdown of funds Atlantic 1 669 4.2 Atlantic 2 Berenice 534 1.8 Alpha 477 3.2 Beta 214 1.9 Delta 360 2.0 Listed funds 2,254 13.1 Reserved funds 7,559 35.9 Total 9,813 49.0 Some of the key financials of the listed funds (Atlantic 1, Atlantic 2, Alpha, Beta and Delta – figures in Euro) in the asset management portfolio are also provided below, with an analysis of the real estate portfolio at the date of the latest report available, broken down by geographical area and by intended use. Atlantic 1 30/09/2012 Market value of real estate 642,930,000 Historical cost and capitalised charges 619,809,181 Loan 358,098,945 Net Asset Value ("NAV") 288,536,260 NAV / Share (Euro) 553.3 Market price/share (Euro) 218.0 Dividend Yield* 5.38% * Ratio of income per share to average nominal value of the share Atlantic 1: Diversification by geographical area Atlantic 1: Diversification by intended use Lombardia 66% Lazio 15% Campania 13% Piemonte 6% Offices 82% Commerc. 18%
  • Interim Management Report to 30 September 2012 36 Atlantic 2 - Berenice 30/09/2012 Market value of real estate 515,610,000 Historical cost and capitalised charges 483,464,029 Loan 281,797,742 Net Asset Value ("NAV") 241,403,519 NAV / Share (Euro) 402.3 Market price/share (Euro) 172.5 Dividend Yield* 11.47% * Ratio of income per share to average nominal value of the share Atlantic 2: Diversification by geographical area Atlantic 2: Diversification by intended use Alpha 30/09/2012 Market value of real estate 418,700,000 Historical cost and capitalised charges 323,005,970 Loan 73,518,806 Net Asset Value ("NAV") 392,336,766 NAV / Share (Euro) 3,777.0 Market price/share (Euro) 1,092.0 Dividend Yield* 6.97% * Ratio of income per share to average nominal value of the share Alpha: Diversification by geographical area Alpha: Diversification by intended use Lombardia 44% Lazio 40% Piemonte 14% Altri 2% Offices 69% Industrial 31% Lombardia 12% Lazio 83% Emilia 5% Offices 60% Other 40%
  • Interim Management Report to 30 September 2012 37 Beta 30/09/2012 Market value of real estate 167,795,100 Historical cost and capitalised charges 163,620,244 Loan 32,284,469 Net Asset Value ("NAV") 150,871,759 NAV / Share (Euro) 562.0 Market price/share (Euro) 346.3 Dividend Yield* 10.10% * Ratio of income per share to average nominal value of the share Beta: Diversification by geographical area Beta: Diversification by intended use Delta 30/09/2012 Market value of real estate 342,531,667 Historical cost and capitalised charges 373,440,569 Loan 141,164,486 Net Asset Value ("NAV") 216,578,523 NAV / Share (Euro) 102.872 Market price/share (Euro) 33.3 Dividend Yield* n.a. * Ratio of income per share to average nominal value of the share Delta: Diversification by geographical area Delta: Diversification by intended use Umbria 26% Sardegna 39% Lazio 35% Offices 41% Hotels 39% Specific Use 19% Commercial 1% Hotels 62% Other 34% Offices 4% Lombardia 4% Sardegna 41% Veneto 14% Calabria 11% Emilia 10% Abruzzo 10% Campania 4% Piemonte 3% Toscana 3%
  • Interim Management Report to 30 September 2012 38 With regard to IDeA FIMIT SGR’s operating performance, the comparison between the income statement for the first nine months of 2012 and for the same period in the previous year (see the table below) is of limited significance, in view of the changes in business structure that took place on 3 October 2011 (integration of FARE SGR and FIMIT SGR, with the creation of IDeA FIMIT SGR). IDeA FIMIT SGR (EUR million) First Nine Months of 2012 First Nine Months of 2011 (*) AUM 9,813 3,436 Management fees 49.0 15.4 EBT 13.3 9.3 EBT - before PPA 21.8 9.3 Net profit 14.3 6.0 (*)Data are referred to FARE SGR
  • Interim Management Report to 30 September 2012 39  Comprehensive income - Income statement The group made a loss in the first nine months of 2012 of about EUR 18.7 million, compared with a profit of around EUR 3.0 million in the same period of 2011. When comparing the results of the first nine months of 2012 with those of the same period in 2011, note the significant change in the scope of consolidation of the alternative asset management business, which includes FIMIT SGR’s contribution from 3 October 2011 (when its integration with FARE became effective). Revenues and other income break down as follows: - alternative asset management fees totalling EUR 62.2 million - a contribution from investments valued at equity of EUR -7.0 million (EUR -19.9 million in the same period in 2011), due to the investment in Santé (around EUR -6.5 million) and the investment in Sigla (around EUR -0.5 million) - other investment income, net of liabilities, totalling EUR -7.5 million (EUR +27.5 million in the same period of 2011, which included the capital gain made on the sale of a portion of the Migros shares held by Kenan Investments) - other revenues and income totalling EUR 7.0 million due largely to the alternative asset management business (EUR 7.7 million in the same period of 2011) Operating costs totalled EUR 60.7 million (EUR 31.3 million in the same period of 2011), of which EUR 48.3 million was attributable to Alternative Asset Management, EUR 8.1 million to the Private Equity Investment business and holding company activities. Note that Alternative Asset Management costs include the effects of the amortisation of intangible assets, totalling EUR 10.4 million, recorded when a portion of the purchase price of the investments was allocated. Financial income and charges, which totalled EUR -6.3 million at 30 September 2012 (EUR -2.0 million in the same period of 2011), mainly related to the cost of exercising the put option on subsidiaries’ minority holdings, income generated from cash and cash equivalents, financial charges and income/charges on derivative contracts. The total tax impact for the first nine months of 2012 (EUR -0.4 million, compared with EUR - 5.4 million in the same period of 2011) is the combined result of taxes of EUR 1.8 million due in respect of Alternative Asset Management activities, and tax credits of EUR 0.4 million relating to the Private Equity Investment business and of EUR 1.0 million for holding activities. Of the total consolidated net loss of EUR 18.7 million, about EUR -19.8 million was attributable to the Private Equity Investment business, around EUR +12.8 million to Alternative Asset Management and approximately EUR -11.7 million to holding company operations/eliminations.
  • Interim Management Report to 30 September 2012 40 Summary Group Income Statement (Euro thousands) 3°Quarter 2012 First Nine Months of 2012 3°Quarter 2011 First Nine Months of 2011 Alternative Asset Management fees 22,202 62,150 10,122 28,108 Income (loss) from equity investments (10,225) (7,032) (8,733) (19,907) Other investment income/expense (8,140) (7,468) 63 27,496 Income from services 2,120 6,765 2,607 7,503 Other income 67 282 50 222 Other expenses (19,469) (60,716) (8,312) (31,341) Financial income and expenses (1,290) (6,250) (1,020) (1,964) PROFIT/(LOSS) BEFORE TAXES (14,735) (12,269) (5,223) 10,117 Income tax (4,249) (369) (162) (5,420) PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS (18,984) (12,638) (5,385) 4,697 Profit (Loss) from discontinued operations/held-for-sale assets 0 0 0 0 PROFIT/(LOSS) FOR THE PERIOD (18,984) (12,638) (5,385) 4,697 - Group share (20,000) (18,710) (6,311) 3,020 - Non controlling interests 1,016 6,072 926 1,677 Earnings per share, basic (€) (0.067) 0.010 Earnings per share, diluted (€) (0.067) 0.010 Summary Group Income Statement - performance by business in the first nine months of 2012 (Euro thousands) Private Equity Investment Alternative Asset Management Holdings/ Eliminations Consolidated Alternative Asset Management fees 0 62,150 0 62,150 Income (loss) from equity investments (6,653) (199) (180) (7,032) Other investment income/expense (9,014) 693 853 (7,468) Income from services 29 6,868 150 7,047 Other expenses (4,302) (48,306) (8,108) (60,716) Financial income and expenses (193) (245) (5,812) (6,250) PROFIT/(LOSS) BEFORE TAXES (20,133) 20,961 (13,097) (12,269) Income tax 357 (1,792) 1,066 (369) PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS (19,776) 19,169 (12,031) (12,638) Profit (Loss) from discontinued operations/held-for-sale assets 0 0 0 0 PROFIT/(LOSS) FOR THE PERIOD (19,776) 19,169 (12,031) (12,638) - Group share (19,776) 12,754 (11,688) (18,710) - Non controlling interests 0 6,415 (343) 6,072 Summary Group Income Statement - performance by business in the first nine months of 2011 (Euro thousands) Private Equity Investment Alternative Asset Management Holdings/ Eliminations Consolidated Alternative Asset Management fees 0 28,108 0 28,108 Income (loss) from equity investments (19,907) 0 0 (19,907) Other investment income/expense 27,577 (81) 0 27,496 Income from services 0 7,432 71 7,503 Other income 31 52 139 222 Other expenses (3,460) (22,415) (5,466) (31,341) Financial income and expenses (201) 279 (2,042) (1,964) PROFIT/(LOSS) BEFORE TAXES 4,040 13,375 (7,297) 10,117 Income tax 45 (5,560) 95 (5,420) PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS 4,084 7,815 (7,202) 4,697 Profit (Loss) from discontinued operations/held-for-sale assets 0 0 0 0 PROFIT/(LOSS) FOR THE PERIOD 4,084 7,815 (7,202) 4,697 - Group share 4,084 6,138 (7,202) 3,020 - Non controlling interests 0 1,677 0 1,677
  • Interim Management Report to 30 September 2012 41  Comprehensive income - Statement of Performance - IAS 1 Comprehensive income or the Statement of Performance (IAS 1), in which performance for the period attributable to the Group is reported including results posted directly to shareholders' equity, reflects a net profit of approximately EUR 46.0 million compared with a net loss of around EUR 8.8 million in the same period of 2011. Results posted directly to shareholders' equity for the first nine months of 2012 mainly relate to the increase in fair value of Kenan Investments/Migros; this was attributable to the adjustment of the valuation on the basis of the market value of Migros shares at 30 September 2012 of TRY 18.7 per share (compared with a figure of around TRY 12.6 per share implied in the valuation at 31 December 2011), and the updated TRY/EUR exchange rate. (Euro thousands) First Nine Months of 2012 First Nine Months of 2011 Profit/(loss) for the period (A) (12,638) 4,697 Gains/(Losses) on fair value of available-for-sale financial assets 61,731 (13,593) Share of other comprehensive income of associates 1,950 1,774 Other comprehensive income, net of tax (B) 63,681 (11,819) Total comprehensive income for the period (A)+(B) 51,043 (7,122) Total comprehensive income attributable to: - Group Share 46,023 (8,800) - Non Controlling Interests 5,020 1,678
  • Interim Management Report to 30 September 2012 42  Comprehensive income – Statement of Financial Position The summary statement of financial position for the group at 30 September 2012 compared with 31 December 2011 is shown below. (Euro thousand) September 30,2012 December 31,2011 ASSETS Non-current assets Intangible and tangible assets Goodwill 210,113 210,134 Intangible assets 110,329 119,648 Property, plant and equipment 1,136 1,269 Total intangible and tangible assets 321,578 331,051 Investments Investments valued at equity 292,637 302,141 Other available-for-sale companies 198,487 127,380 Available-for-sale funds 164,604 159,673 Other avalaible-for-sale financial assets 325 936 Total Investments 656,053 590,130 Other non-current assets Deferred tax assets 4,637 4,077 Loans and receivables 1,855 1,632 Other non-current assets 25,727 25,729 Total other non-current assets 32,219 31,438 Total non-current assets 1,009,850 952,619 Current assets Trade receivables 7,654 6,070 Available-for-sale financial assets 7,832 13,075 Financial receivables - 1 Tax receivables from Parent companies 3,044 5,929 Other tax receivables 2,377 2,677 Other receivables 5,655 6,128 Cash and cash equivalents 46,007 46,764 Total current assets 72,569 80,644 Total current assets 72,569 80,644 Assets relating to joint ventures - - Held-for-sale assets - - TOTAL ASSETS 1,082,419 1,033,263 SHAREHOLDERS' EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Net equity Group 709,607 669,045 Minority interests 134,293 134,324 Shareholders' equity 843,900 803,369 LIABILITIES Non-current liabilities Deferred tax liabilities 26,979 40,506 Provisions for employee termination benefits 2,732 2,127 Long term financial loans 162,458 160,020 Total non-current liabilities 192,169 202,653 Current liabilities Trade payables 18,702 10,322 Payables to staff and social security organisations 8,696 7,497 Current tax 9,834 903 Other tax payables 2,894 3,585 Other payables 2,370 1,023 Short term financial loans 3,854 3,911 Total current liabilities 46,350 27,241 Liabilities relating to joint ventures - - Held-for-sale liabilities - - TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 1,082,419 1,033,263
  • Interim Management Report to 30 September 2012 43 At 30 September 2012, group shareholders’ equity was approximately EUR 709.6 million, compared with EUR 669.0 million at 31 December 2011. The increase of around EUR 40.6 million in this item in the first nine months of 2012 was due mainly to the events described in the Statement of Performance – IAS 1 (totalling EUR 46.0 million) and to the effects of the share buyback plan (expenses of EUR 6.0 million).  Comprehensive income – Net debt At 30 September 2012, consolidated net debt was approximately EUR -110.6 million, as shown in the table below, which provides a breakdown of assets and liabilities and a comparison with the same figures at 31 December 2011: Net debt at 30 September Net financial position Change (EUR million) Cash and cash equivalents 46.0 46.8 (0.8) Available-for-sale financial assets 7.8 13.0 (5.2) Financial receivables 1.9 1.6 0.3 Non-current financial liabilities (162.5) (160.0) (2.5) Current financial liabilities (3.8) (3.9) 0.1 TOTAL (110.6) (102.5) (8.1) September 30,2012 December 31,2011 The change in consolidated net debt in the first nine months of 2012 was due to the combined effect of the factors below:  cash outlay of EUR 6.0 million for the share buy-back plan  payment of dividends to third parties of EUR 6.3 million  operating cash flow (mainly comprising fees/revenues for services, net of current expenses and investment costs, as well as the result of financial and tax management), totalling EUR 4.2 million. The company believes that the cash and cash equivalents and the other financial resources available are sufficient to meet the requirement relating to payment commitments already subscribed in funds, also taking into account the amounts expected to be called up/distributed by these funds. With regard to these residual commitments, the company believes that the funds and credit lines currently available, as well as those that will be generated by its operational and financing activities, will enable the DeA Capital Group to meet the financing required for its investment activity and to manage working capital and repay debts when they become due. The following points relate to the individual items that make up the consolidated net cash position:  "Cash and cash equivalents" refer to cash and bank deposits, including interest accrued during the period, held in the name of group companies  "Available-for-sale financial assets" include investments to be regarded as a temporary use of cash  "Non-current financial liabilities" mainly include: - EUR 100.0 million for the use of the credit line of the same amount provided by Mediobanca - EUR 45.5 million, as part of the full acquisition of the FARE Group, in relation to the payment of the deferred purchase price, and the earn-out that DeA Capital anticipates paying - EUR 12.8 million for the use of the credit line signed by the subsidiary IDeA FIMIT SGR with Banca Intermobiliare di Investimenti e Gestioni S.p.A.
  • Interim Management Report to 30 September 2012 44 - EUR 1.6 million related to the fair value estimate of payables for put options on minority interests in subsidiaries. 6. Other information  Transactions with parent companies, subsidiaries and related parties Transactions with related parties, including intercompany transactions, were typical, usual transactions that are part of the normal business activities of Group companies. Such transactions are concluded at standard market terms for the nature of the goods and/or services offered.  Other information At 30 September 2012, the Group had 177 employees (167 at the end of 2011), including 32 senior managers, 54 middle managers and 91 clerical staff. 160 of these worked in Alternative Asset Management and 17 in Private Equity Investment/the holding company. These staff levels do not include personnel on secondment from the parent company De Agostini S.p.A. The company signed a service agreement with the controlling shareholder, De Agostini S.p.A., for the latter to provide operating services in the administration, finance, control, legal, corporate and tax areas. This agreement, which is renewable annually, is priced at market rates, and is intended to allow the company to maintain a streamlined organisational structure in keeping with its development policy, and at the same time to obtain adequate operational support. DeA Capital S.p.A. and IDeA Capital Funds SGR have adopted the national tax consolidation scheme of the B&D Group (the Group headed by B&D Holding di Marco Drago e C. S.a.p.a.). This option was exercised jointly by each of the two companies and B&D Holding di Marco Drago e C. S.a.p.a. by signing the "Regulation for participation in the national tax consolidation scheme for companies in the De Agostini Group" and notifying the tax authorities of this option pursuant to the procedures and terms and conditions set out by law. The option for DeA Capital S.p.A., which was renewed during 2011, is irrevocable for the three-year period of 2011-2013 unless the requirements for applying the scheme are not met, while in the case of IDeA Capital Funds SGR, the option was signed during this period and relates to the three-year period of 2012-2014. With regard to the regulatory requirements set out in art. 36 of the Market Regulation on conditions for the listing of parent companies of companies formed or regulated by laws of non-EU countries and of significant importance in the consolidated financial statements, it is hereby noted that no Group company falls within the scope of the above-mentioned provision. Furthermore, conditions prohibiting listing pursuant to art. 37 of the Market Regulation relating to companies subject to the management and coordination of other parties do not apply.
  • Interim Management Report to 30 September 2012 45 Consolidated Financial Statements and Notes to the Accounts for the period 1 January – 30 September 2012
  • Interim Management Report to 30 September 2012 46 1. Consolidated Statement of Financial Position (Euro thousand) September 30,2012 December 31,2011 ASSETS Non-current assets Intangible and tangible assets Goodwill 210,113 210,134 Intangible assets 110,329 119,648 Property, plant and equipment 1,136 1,269 Total intangible and tangible assets 321,578 331,051 Investments Investments valued at equity 292,637 302,141 Other available-for-sale companies 198,487 127,380 Available-for-sale funds 164,604 159,673 Other avalaible-for-sale financial assets 325 936 Total Investments 656,053 590,130 Other non-current assets Deferred tax assets 4,637 4,077 Loans and receivables 1,855 1,632 Other non-current assets 25,727 25,729 Total other non-current assets 32,219 31,438 Total non-current assets 1,009,850 952,619 Current assets Trade receivables 7,654 6,070 Available-for-sale financial assets 7,832 13,075 Financial receivables - 1 Tax receivables from Parent companies 3,044 5,929 Other tax receivables 2,377 2,677 Other receivables 5,655 6,128 Cash and cash equivalents 46,007 46,764 Total current assets 72,569 80,644 Total current assets 72,569 80,644 Assets relating to joint ventures - - Held-for-sale assets - - TOTAL ASSETS 1,082,419 1,033,263 SHAREHOLDERS' EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY Net equity Group 709,607 669,045 Minority interests 134,293 134,324 Shareholders' equity 843,900 803,369 LIABILITIES Non-current liabilities Deferred tax liabilities 26,979 40,506 Provisions for employee termination benefits 2,732 2,127 Long term financial loans 162,458 160,020 Total non-current liabilities 192,169 202,653 Current liabilities Trade payables 18,702 10,322 Payables to staff and social security organisations 8,696 7,497 Current tax 9,834 903 Other tax payables 2,894 3,585 Other payables 2,370 1,023 Short term financial loans 3,854 3,911 Total current liabilities 46,350 27,241 Liabilities relating to joint ventures - - Held-for-sale liabilities - - TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 1,082,419 1,033,263
  • Interim Management Report to 30 September 2012 47 2. Consolidated Income Statement (Euro thousands) 3°Quarter 2012 First Nine Months of 2012 3°Quarter 2011 First Nine Months of 2011 Alternative Asset Management fees 22,202 62,150 10,122 28,108 Profit/(loss) from equity investments valued at equity (10,225) (7,032) (8,733) (19,907) Other investment income/expenses (8,140) (7,468) 63 27,496 Service revenue 2,120 6,765 2,607 7,503 Other revenues and income 67 282 50 222 Personnel costs (8,049) (24,266) (4,257) (13,959) Service costs (6,925) (20,977) (3,290) (13,510) Depreciation, amortization and impairment (3,956) (11,696) (922) (3,059) Other charges (539) (3,777) 157 (813) Financial income 239 764 1,286 2,715 Financial expenses (1,529) (7,014) (2,306) (4,679) PROFIT/(LOSS) BEFORE TAXES (14,735) (12,269) (5,223) 10,117 Income tax (4,249) (369) (162) (5,420) PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS (18,984) (12,638) (5,385) 4,697 Profit (Loss) from discontinued operations/held-for-sale assets 0 0 0 0 PROFIT/(LOSS) FOR THE PERIOD (18,984) (12,638) (5,385) 4,697 - Group share (20,000) (18,710) (6,311) 3,020 - Non controlling interests 1,016 6,072 926 1,677 Earnings per share, basic (€) (0.067) 0.010 Earnings per share, diluted (€) (0.067) 0.010
  • Interim Management Report to 30 September 2012 48 3. Statement of Consolidated Comprehensive Income (Statement of Performance - IAS 1) Comprehensive income or the Statement of Performance (IAS 1), in which performance for the period attributable to the Group is reported including results posted directly to shareholders' equity, reflects a net profit of approximately EUR 46.0 million compared with a net loss of around EUR 8.8 million in the same period of 2011. Results posted directly to shareholders' equity for the first nine months of 2012 mainly relate to the increase in fair value of Kenan Investments/Migros; this was attributable to the adjustment of the valuation on the basis of the market value of Migros shares at 30 September 2012 of TRY 18.7 per share (compared with a figure of around TRY 12.6 per share implied in the valuation at 31 December 2011), and the updated TRY/EUR exchange rate. (Euro thousands) First Nine Months of 2012 First Nine Months of 2011 Profit/(loss) for the period (A) (12,638) 4,697 Gains/(Losses) on fair value of available-for-sale financial assets 61,731 (13,593) Share of other comprehensive income of associates 1,950 1,774 Other comprehensive income, net of tax (B) 63,681 (11,819) Total comprehensive income for the period (A)+(B) 51,043 (7,122) Total comprehensive income attributable to: - Group Share 46,023 (8,800) - Non Controlling Interests 5,020 1,678
  • Interim Management Report to 30 September 2012 49 4. Consolidated Cash Flow Statement (direct method) (Euro thousands) First Nine Months of 2012 First Nine Months of 2011 CASH FLOW from operating activities Investments in companies and funds (47,687) (31,893) Acquistions of subsidiaries net of cash acquired 0 0 Capital reimbursements from funds 13,702 19,467 Proceeds from the sale of investments 0 2,350 Interest received 572 960 Interest paid (2,441) (2,126) Cash distribution from investments 5,043 54,220 Realised gains (losses) on exchange rate derivatives (597) (666) Taxes paid (1,778) (2,395) Taxes refunded 0 0 Dividends received 0 0 Management and performance fees received 60,143 26,250 Revenues for services 8,502 10,162 Operating expenses (47,088) (25,125) Net cash flow from operating activities (11,629) 51,204 CASH FLOW from investment activities Acquisition of property, plant and equipment (357) (237) Sale of property, plant and equipment 32 0 Purchase of licenses (189) (23) Net cash flow from investing activities (514) (260) CASH FLOW from investing activities Acquisition of financial assets (1,855) (13,714) Sale of financial assets 6,238 6,288 Share capital issued 0 0 Share capital issued:stock option plan 0 0 Own shares acquired (6,036) (21,602) Own shares sold 0 0 Interest from financial activities 0 0 Dividends paid (6,290) (2,700) Warrant 0 0 Managers Loan 0 1,683 Bank loan 19,329 0 Net cash flow from financing activities 11,386 (30,045) CHANGE IN CASH AND CASH EQUIVALENTS (757) 20,899 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 46,764 86,517 Cash and cash equivalents relating to held-for-sale assets 0 0 Cash and cash equivalents at beginning of period 46,764 86,517 0 6,809 CASH AND CASH EQUIVALENTS AT END OF PERIOD 46,007 114,225 Held-for-sale assets and minority interests 0 0 CASH AND CASH EQUIVALENTS AT END OF PERIOD 46,007 114,225 EFFECT OF CHANGE IN BASIS OF CONSOLIDATION: CASH AND CASH EQUIVALENTS
  • Interim Management Report to 30 September 2012 50 5. Statement of Changes in Consolidated Shareholders’ Equity (EUR thousand) Share Capital Treasury share reserve,capital reserve, retained earnings Fair Value reserve Profit (loss) for the Group Total Group Non controlling interests Consolidated net equity Total at 31.12.10 294,013 466,567 29,723 (26,348) 763,955 552 764,507 Allocation of 2010 net profit 0 (26,348) 0 26,348 0 0 0 Cost of stock options 0 474 0 0 474 0 474 Shares transferred for IDeA acquisition 4,807 1,036 0 0 5,843 0 5,843 Purchase of own shares (14,742) (6,860) (21,602) 0 (21,602) Pro-rata bonus shares of Santè 0 387 0 0 387 0 387 Effect of diluting Santè in GDS 0 (2,210) 0 0 (2,210) 0 (2,210) Other changes 0 79 0 0 79 321 400 Put option on 30% of FARE Holding 0 0 0 0 0 (1,775) (1,775) Total comprehensive profit/(loss) 0 0 (11,820) 3,020 (8,800) 1,677 (7,123) Total at 30.09.11 284,078 433,125 17,903 3,020 738,126 775 738,901 (EUR thousand) Share Capital Treasury share reserve,capital reserve, retained earnings Fair Value reserve Profit (loss) for the Group Total Group Non controlling interests Consolidated net equity Total at 31.12.11 280,697 428,793 3,132 (43,577) 669,045 134,324 803,369 Allocation of 2011 net profit 0 (43,577) 0 43,577 0 0 0 Cost of stock options 0 770 0 0 770 0 770 Purchase of own shares (4,563) (1,473) (6,036) 0 (6,036) Other changes 0 (195) 0 0 (195) (5,051) (5,246) Total comprehensive profit/(loss) 0 0 64,733 (18,710) 46,023 5,020 51,043 Total at 30.09.12 276,134 384,318 67,865 (18,710) 709,607 134,293 843,900
  • Interim Management Report to 30 September 2012 51 6. Notes to the Accounts  Structure and contents of the Interim Management Report to 30 September 2012 The Interim Management Report to 30 September 2012 (the Report) constitutes the document set out by art. 154-ter of the Testo Unico della Finanza law (TUF). Information regarding the company’s operating performance and financial position is prepared in accordance with the valuation and measurement criteria set out by the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and adopted by the European Commission pursuant to the procedures contained in Regulation (EC) 1606/2002 of the European Parliament and Council of 19 July 2002. The accounting standards used in the Report do not differ significantly from those used at 31 December 2011 and in the Half-Year Report to 30 June 2012. The Report comprises the following consolidated financial statements – the statement of financial position, the income statement, the cash flow statement, the statement of changes in shareholders' equity and the statement of comprehensive income (IAS 1) – and these notes to the accounts; it is also accompanied by the Interim Report on Operations and the Statement of Responsibilities for the Interim Management Report. The consolidated financial statements in the Report have not been audited by the independent auditors. Information relating to the income statement is discussed with reference to the first nine months of 2012 and the first nine months of 2011; information relating to the statement of financial position refers to 30 September 2012 and 31 December 2011. The consolidated financial statements are in the same form as those presented in the accounts to 31 December 2011. As allowed by IAS/IFRS, the preparation of the Report required the use of significant estimates by the company's management, especially with regard to the valuations of the investment portfolio (equity investments and funds). These valuations were determined by directors based on their best judgement and estimation using the knowledge and evidence available at the time the Report was prepared. However, due to objective difficulties in making assessments and the absence of a liquid market, the values assigned to such assets could differ, perhaps significantly, from those that could be obtained by selling the assets. In accordance with the provisions of IAS/IFRS and current laws, the company authorised the publication of the Report by the legal deadline. Basis of consolidation The basis of consolidation had changed at 30 September 2012 compared to 31 December 2011, as a result of:  the merger by incorporation of IDeA Alternative Investments into DeA Capital S.p.A., completed on 1 January 2012  the acquisition of full control of IFIM on 11 April 2012  the acquisition of full control of FARE Holding on 24 April 2012, at which time FARE Holding changed its name to DeA Capital Real Estate, and its subsidiaries FARE and FAI changed their names to IDeA Servizi Immobiliari and IDeA Agency.
  • Interim Management Report to 30 September 2012 52 As a result, at 30 September 2012, the following companies formed part of the DeA Capital Group's basis of consolidation: Company Registered office Currency Share capital % holding Consolidation method DeA Capital S.p.A. Milan, Italy Euro 306,612,100 Holding DeA Capital Investments S.A. Luxembourg Euro 515,992,516 100% Full consolidation (IAS 27) Santè S.A. Luxembourg Euro 99,922,400 42.89% Equity accounted (IAS 28) Sigla Luxembourg S.A. Luxembourg Euro 482,684 41.39% Equity accounted (IAS 28) IDeA Capital Funds SGR S.p.A. Milan, Italy Euro 1,200,000 100.00% Full consolidation (IAS 27) Soprarno SGR S.p.A. Florence, Italy Euro 2,000,000 65.00% Full consolidation (IAS 27) IDeA SIM S.p.A. Milan, Italy Euro 120,000 65.00% Full consolidation (IAS 27) IDeA OF I Milan, Italy Euro - 46.99% Equity accounted (IAS 28) Atlantic Value Added Rome, Italy Euro - 27.27% Equity accounted (IAS 28) DeA Capital Real Estate S.p.A. Milan, Italy Euro 600,000 100.00% Full consolidation (IAS 27) IDeA Servizi Immobiliari S.p.A. Milan, Italy Euro 500,000 100.00% Full consolidation (IAS 27) IDeA Agency S.r.l. Milan, Italy Euro 105,000 100.00% Full consolidation (IAS 27) I.F.IM. S.r.l. Milan, Italy Euro 10,000 100.00% Full consolidation (IAS 27) IDeA FIMIT SGR S.p.A. Rome, Italy Euro 16,757,574 61.30% Full consolidation (IAS 27) Harvip Investimenti S.p.A. Milan, Italy Euro 3,150,000 25.00% Equity accounted (IAS 28) The shares held in Santé are subject to a lien in favour of the entities providing credit lines available for companies forming part of the control structure of Générale de Santé (i.e. Santé and Santé Développement Europe). The above list meets the requirements of Consob Resolution 11971 of 14 May 1999 and subsequent amendments (art. 126 of the Regulation).
  • Interim Management Report to 30 September 2012 53 Notes to the Consolidated Statement of Financial Position NON-CURRENT ASSETS At 30 September 2012, non-current assets totalled EUR 1,009.9 million, compared to EUR 952.6 million at 31 December 2011. Intangible and tangible assets This item includes goodwill (EUR 210.1 million), other intangible assets (EUR 110.3 million) and tangible assets (EUR 1.1 million). Goodwill, which amounted to EUR 210.1 million at 30 September 2012 (unchanged from 31 December 2011), relates to the acquisition of FARE Holding (now called DeA Capital Real Estate), IDeA Capital Funds SGR, IFIM and FIMIT SGR. Intangible assets mainly relate to customer contracts, which arise from the allocation of the merger costs for the acquisition of FARE Holding (now DeA Capital Real Estate), IDeA Capital Funds SGR and FIMIT SGR. Investments in associates This item, which totalled EUR 292.6 million at 30 September 2012 (EUR 302.1 million at 31 December 2011), relates to the assets below: - the investment in Santé, which was reported at end-2011 at EUR 235.2 million, was recorded at approximately EUR 229.7 million in the consolidated financial statements to 30 September 2012. The decrease compared with 31 December 2011 is due to the combined effect of the loss for the period of EUR 6.5 million and the increase in the fair value of the interest rate swaps taken out to hedge interest rate risk on debt exposure (EUR 1.0 million). - the investment in Sigla Luxembourg is valued at approximately EUR 12.6 million in the consolidated financial statements to 30 September 2012 (EUR 22.0 million at 31 December 2011). the decrease compared with 31 December 2011 relates to the EUR 0.4 million loss for the period and an impairment charge of EUR 9.0 million - the units held in IDeA Opportunity Fund I were reported in the consolidated financial statements to 30 September 2012 at EUR 42.0 million. The change in value compared with the figure at 31 December 2011 is attributable to capital calls of EUR 3.8 million, an increase of EUR 1.0 million in the fair value and pro-rata net profit for the period of EUR 0.4 million - the units in the AVA fund had a value of approximately EUR 7.5 million in the consolidated financial statements to 30 September 2012 (in line with the figure recorded at end-2011) - the units in Harvip Investimenti had a value of approximately EUR 0.8 million in the consolidated financial statements to 30 September 2012 (in line with the figure recorded at end-2011)
  • Interim Management Report to 30 September 2012 54 The table below provides details of investments in associates at 30 September 2012 by area of activity. (Euro million) Private Equity Investment Alternative Asset Management Total Santè 229.7 0.0 229.7 Sigla 12.6 0.0 12.6 IDeA OF I 42.0 0.0 42.0 Fondo AVA 2.5 5.0 7.5 Harvip Investimenti S.p.A. 0.8 0.0 0.8 Total 287.6 5.0 292.6 Investments in other companies At 30 September 2012, the DeA Capital Group had a minority shareholding in Kenan Investments (the indirect parent company of Migros), Stepstone, Alkimis SGR, two US companies operating in the biotech and printed electronics sectors, TLcom Capital LLP (management company under English law) and TLcom II Founder Partner SLP (limited partnership under English law). The total amount reported for these equity investments in the consolidated financial statements to 30 June 2012 was approximately EUR 198.5 million, compared with EUR 127.4 million at 31 December 2011. The equity investment in Kenan Investments is recorded in the consolidated financial statements to 30 September 2012 at EUR 198.2 million (compared with EUR 127.1 million at 31 December 2011). The increase of EUR 71.1 million was due to the rise in the value of Migros shares (TRY 18.7 per share at 30 September 2012, compared with approximately TRY 12.6 per share at 31 December 2011), and the strengthening of the Turkish lira against the euro (2.31 TRY/EUR at 30 September 2012 versus 2.44 TRY/EUR at 31 December 2011). The effect on the DeA Capital Group’s NAV of this change in fair value was partially offset by the provisioning of estimated carried interest of around EUR 10.30 million, to be paid to the lead investor, BC Partners, based on the total capital gain. This was partly recognised in the income statement (EUR 3.0 million) and partly recognised in the fair value reserve (EUR 7.3 million). The table below provides details of the investments held in other companies at 30 September 2012 by sector of activity: (Euro million) Private Equity Investment Alternative Asset Management Total Kenan Investments 198.2 0.0 198.2 Other investments 0.3 0.0 0.3 Total 198.5 0.0 198.5 Funds At 30 September 2012, the DeA Capital Group had investments in units of two funds of funds (IDeA I FoF and ICF II), one theme fund (IDeA EESS), 11 real estate funds and seven venture capital funds; these are reported at a total value of approximately EUR 164.6 million in the consolidated financial statements, corresponding to the estimated fair value at 30 September 2012.
  • Interim Management Report to 30 September 2012 55 The table below provides details of the funds in the portfolio at 30 September 2012. (EUR thousand) Balance at 1.1.2012 Increase (Capital call) Decrease (Capital Distribution) Impairment Fair Value Adjustment Translation effect Balanca at 30.09.2012 Venture Capital Funds 12,234 0 (791) (364) (698) 337 10,718 IDeA I FoF 96,234 14,175 (9,629) 0 1,803 0 102,583 ICF II 9,322 6,147 (1,433) 0 (537) 0 13,499 IDeA EESS 19 923 (77) 0 (242) 0 623 IDeA FIMIT SGR Funds 41,864 1,000 (814) (1,103) (3,766) 0 37,181 Total Funds 159,673 22,245 (12,744) (1,467) (3,440) 337 164,604 The table below provides details of the funds in the portfolio at 30 September 2012 by sector of activity: (Euro million) Private Equity Investment Alternative Asset Management Total Venture Capital Funds 10.7 0.0 10.7 IDeA I FoF 102.6 0.0 102.6 ICF II 13.5 0 13.5 IDeA EESS 0.6 0.0 0.6 IDeA FIMIT SGR Funds 0.0 37.2 37.2 Total 127.4 37.2 164.6 Deferred tax assets The balance on the item “deferred tax assets” comprises the value of deferred tax assets minus deferred tax liabilities, where they may be offset. At 30 September 2012, deferred tax assets totalled EUR 4.6 million, compared with EUR 4.1 million at 31 December 2011. Loans and receivables This item totalled EUR 1.9 million at 30 September 2012 (compared with EUR 1.6 million at 31 December 2011) and relates to loans to the senior management of GDS for the capital increase at Santé, which was completed in 2009, subscribed partly by the original shareholders and partly by the senior management of GDS. Other non-current assets This item, valued at EUR 25.7 million at 30 September 2012, is in line with the value at end- 2011, and mainly relates to the receivable from the Beta Immobiliare Fund in respect of the final variable commission. The calculation was made pursuant to the provisions of the operating regulations of the Beta Immobiliare fund, taking account of the NAV. This receivable corresponds to the portion of the overperformance commission accrued since the beginning of the fund’s operations that the asset management fund expects to receive.
  • Interim Management Report to 30 September 2012 56 CURRENT ASSETS At 30 September 2011, current assets totalled EUR 72.6 million, versus EUR 80.6 million at 31 December 2011. The item mainly comprised: - EUR 46.0 million relating to cash and cash equivalents (EUR 46.8 million at 31 December 2011) - EUR 7.8 million relating to investments to be considered as a temporary use of cash. SHAREHOLDERS' EQUITY At 30 September 2012, group shareholders’ equity was approximately EUR 709.6 million, compared with EUR 669.0 million at 31 December 2011. The increase (of approximately EUR 40.6 million) in group shareholders' equity in the first nine months of 2012 was chiefly due to the reasons already discussed in the Statement of Performance - IAS 1 (EUR 46.0 million in total) and to costs of EUR 6.0 million associated with the share buy-back plan.
  • Interim Management Report to 30 September 2012 57 NON-CURRENT LIABILITIES At 30 September 2012, non-current liabilities totalled EUR 192.2 million compared with EUR 202.7 million at 31 December 2011. Deferred tax liabilities This item totalled EUR 27.0 million at 30 September 2012, compared with EUR 40.5 million at 31 December 2011. This mainly includes deferred tax liabilities relating to intangible assets, which arose after a portion of the cost of acquiring IDeA Capital Funds SGR was allocated to intangible assets (customer contracts), and the tax impact (EUR 22.7 million) of recording variable commissions relating to the allocation of a portion of the acquisition cost of FIMIT SGR as intangible assets. End-of-service payment fund At 30 September 2012, this item totalled EUR 2.7 million, compared with EUR 2.1 million at 31 December 2011, and includes end-of-service payments that are part of defined benefit plans, which are therefore valued using actuarial assessments. Non-current financial liabilities At 30 September 2012 this item totalled EUR 162.5 million, compared with EUR 160.0 million at 31 December 2011, and mainly relates to: - EUR 100.0 million for the use of the credit line of the same amount provided by Mediobanca - EUR 45.5 million, as part of the full acquisition of the FARE Group, in relation to the payment of the deferred purchase price, and the earn-out that DeA Capital anticipates paying - EUR 12.8 million for the use of the credit line signed by the subsidiary IDeA FIMIT SGR with Banca Intermobiliare di Investimenti e Gestioni S.p.A. - EUR 1.6 million related to the fair value estimate of payables for put options on minority interests in subsidiaries CURRENT LIABILITIES At 30 September 2012, current liabilities totalled EUR 46.4 million (EUR 27.2 million at 31 December 2011) and consisted of trade payables (EUR 18.7 million), payables to staff and social security institutions (EUR 8.7 million), payables for current taxes and other tax payables (EUR 12.7 million), other payables (EUR 2.4 million) and short-term financial payables (EUR 3.9 million). This last item mainly reflects the short-term debt relating to the acquisition of FARE Holding.
  • Interim Management Report to 30 September 2012 58 Notes to the Consolidated Income Statement When comparing the results of the first nine months of 2012 with those of the same period in 2011, note the significant change in the scope of consolidation of the alternative asset management business, which includes FIMIT SGR’s contribution from 3 October 2011 (the effective date of its integration with FARE). Alternative asset management fees Alternative asset management fees totalled EUR 62.2 million (EUR 28.1 million in the same period of 2011) and mainly relate to management fees paid to IDeA FIMIT SGR and IDeA Capital Funds SGR for the funds they manage. Income from investments valued at equity Investments valued at equity made a loss of EUR 7.0 million (versus a loss of EUR 19.9 million in the same period of 2011), of which EUR 6.5 million is attributable to the investment in Santé and EUR 0.5 million to the investment in Sigla. Other investment income/charges Investment charges of around EUR 7.5 million (income of EUR 27.5 million in the same period of 2011), mainly reflects the impairment of EUR 9.0 million made on the investment in Sigla Luxembourg. In 2011, it included the capital gain made on the sale of a portion of Migros shares held by Kenan Investments. Service revenues Service revenues were EUR 6.8 million (EUR 7.5 million in the same period of 2011); they mainly relate to services in consulting, management and the sale of real estate held in the portfolios of real estate funds. Other revenues and income This item totalled EUR 0.3 million (EUR 0.2 million in the same period of 2011) and is due mainly to director fees received by Santé S.A. Personnel costs Personnel costs totalled EUR 24.3 million (EUR 14.0 million in the same period of 2011). Service costs Service costs totalled EUR 21.0 million (EUR 13.5 million in the same period of 2011). Depreciation, amortisation and write-downs This item was EUR 11.7 million (EUR 3.1 million in the same period of 2011) and mainly included amortisation relating to the purchase price allocation. Other charges This item was EUR 3.8 million (EUR 0.8 million in the same period of 2011) and includes the Luxembourg wealth tax of EUR 0.6 million and the pro-rata portion of VAT that is non- deductible on costs of EUR 1.4 million incurred by IDeA FIMIT SGR relating to 2012. Financial income (charges) Financial income totalled EUR 0.8 million (EUR 2.7 million in the same period of 2011), while financial charges were EUR 7.0 million (EUR 4.7 million in the same period of 2011). Income tax Income tax totalled EUR 0.4 million, versus EUR 5.4 million in the same period of 2011.
  • Interim Management Report to 30 September 2012 59 Significant events after the end of the period and outlook  Significant events after the end of the period  Private equity funds/real estate On 2 October 2012, 3 October 2012 and 16 October 2012, the DeA Capital Group increased its investment in the IDeA I FoF, ICF II, IDeA OF I and IDeA EESS funds, with total payments of EUR 13.3 million (EUR 3.0 million, EUR 3.0 million, EUR 7.2 million and EUR 0.1 million respectively). On 16 October 2012, the DeA Capital Group received capital reimbursements totalling EUR 2.1 million from the IDeA I FoF fund, to be used in full to reduce the value of the units.  IDeA FIMIT SGR – Award of the AMA tender On 8 October 2012 IDeA FIMIT SGR was awarded the tender organised by Azienda Municipale Ambiente S.p.A. (AMA), Rome, to manage some of its real estate assets. AMA, Rome’s leading operator in environmental services, identified IDeA FIMIT’s bid as the best solution for the creation and management of a real estate investment fund. The fund will manage assets comprising 56 buildings, all located in the Rome region and primarily designated for office use, with an estimated value of EUR 140-160 million. The new fund being created to manage the real estate will have a maximum duration of ten years and will become operational in early 2013. The Group’s technical bid, which had a relative weight of 70%, with the financial proposal accounting for the remainder, was crucial in its selection. This demonstrated the quality of IDeA FIMIT SGR’s bid from a management viewpoint, as it put forward the best proposal for operating and increasing the value of the real estate covered by the tender.  IDeA SIM – Restructuring plan In October, the DeA Capital Group launched the restructuring plan for IDeA SIM, aimed at allowing it to exit from investment consultancy. To this end, an agreement was reached with the company’s Chief Executive Officer that he would renounce the powers granted to him, and the active asset management agreements were terminated. An agreement was also reached between DeA Capital and IDeA SIM’s CEO to acquire the latter’s 30% stake in the company prior to the company’s removal from the register of brokerage companies, and therefore no later than 29 March 2013.
  • Interim Management Report to 30 September 2012 60  Outlook The outlook continues to focus on the strategic development guidelines followed last year, with an emphasis on increasing the value of assets in the Private Equity Investment area and on developing the Alternative Asset Management platform. Clearly the economic environment – about which it is still difficult to make forecasts – will influence the industrial and economic performance of the Group’s assets, as well as the outlook for returns on the investments made. The Group believes, however, that it has built a portfolio that is very “resistant” to shocks and one that at the same time is able to benefit from improvements in the environment, particularly on financial markets, which significantly influence expectations of investment value enhancement and the raising of new funds. At the same time, in support of the strategic guidelines set out above, the company will continue to maintain a solid asset and financial structure, implementing any initiative with rigour and discipline.
  • Interim Management Report to 30 September 2012 61 Statement of Responsibilities for the Interim Management Report to 30 September 2012
  • Interim Management Report to 30 September 2012 62  STATEMENT OF RESPONSIBILITIES FOR THE INTERIM MANAGEMENT REPORT TO 30 September 2012 (PURSUANT TO ART. 154-BIS OF LEGISLATIVE DECREE 58/98) Manolo Santili, Chief Financial Officer of DeA Capital S.p.A., the manager responsible for preparing the company’s accounting statements, hereby declares, pursuant to art. 154-bis, para. 2 of the Testo Unico della Finanza law, that the information contained in this document accurately represents the figures in the company’s accounting records. Milan, 12 November 2012 Manolo Santilli Manager responsible for preparing the company’s accounting statements