CIR 9m 2014 Results

1. 1
Marzo 2014
9M 2014 Results
October 2014

2. 2
Corporate structure
(1) The percentage is calculated net of treasury shares
Non-core
investments
55.9% 57.2% 51.3% 53.1%
€712m €1.3Bio €373 m €2.3Bio
Generation,
marketing and
supply to final
customers in both
electricity and
natural gas
sectors
All Media sectors
from dailies and
periodicals to
radio, Internet,
television, and
advertising
Global automotive
components
supplier (filters,
engine air and
cooling systems
and suspensions)
Nursing homes,
rehabilitation and
hospital
management
 Education
 Private equity
 NPL
Revenues
2013
Businesses
Competitive
position
 Leader in circulation
of Italian dailies
 N.1 news magazine
 N.1 Italian
information website
 Third Italian radio
network
Leader in its core
businesses (filters
and suspensions)
in Europe and
South America
--
Leader in Italian
long term care
(nursing homes and
rehabilitation)
Total € 4.8 Bio
(1) (1)
At 30 September 2014
(2)
(2) Assets held for sale

3. 3
•Founded in 1976 by Carlo De Benedetti; controlled (45.9%) by COFIDE-Gruppo De Benedetti
•Long term investment strategy, with focus on controlling stakes
•Balanced portfolio of businesses, with leading positions in their respective businesses
•Active role in governance and in strategic decision making of portfolio companies
•No leverage and significant liquidity available at holding company level
•Commitment to low cost structure
CIR Group profile

4. 4
•On July 23, 2014 CIR, Sorgenia Holding and VERBUND AG have signed an agreement with lenders, functional to the restructuring of Sorgenia’s debt. At the same time, Sorgenia has signed a standstill agreement with the same lending banks
•The debt restructuring process will follow the “182 bis” court procedure; the agreement includes a capital increase of €400 million in which the current shareholders will not take part, which will be entirely subscribed by the lending banks through the conversion of their receivables into Sorgenia’s capital. The conversion of receivables by the banks is also envisaged for an additional amount of €200 million through a mandatory convertible (‘convertendo’)
•Once the deal has been completed, CIR, Sorgenia Holding and VERBUND AG will no longer hold shares of Sorgenia. It is agreed however that former shareholders will receive an earn‐out equal to 10% of any distributions or sale proceeds, in excess of the capital subscribed by the lending banks capitalized at a rate of 10% p.a.
•Completion of the transaction is expected to take place around year end
Sorgenia - Agreement signed with banks

5. 5
•Following the Sorgenia agreement, the CIR group, pursuant to IFRS 5, changed the consolidation methodology for the accounts at September 30, 2014 with regards to the Sorgenia group
•According to the above principle, Sorgenia is not consolidated anymore on a line by line basis in the CIR Group accounts: all assets and liabilities are shown instead as a single line item called “Assets / Liabilities held for sale”, and the same principle is applied to the income statement
Sorgenia - Change in consolidation principles

6. 6
•Consolidated net income: €5.4 million, vs. € 10.7 million in 9M 2013 which were affected by non-recurring items: i.e Sorgenia write-downs and Lodo Mondadori cash in. Excluding extraordinary items 9M13 result would have been -€ 16.2
•The net financial position of the CIR Group at September 30, 2014 was €156.8 million (vs. € 1.845,3 at 31 December 2013) and it includes :
-A net financial surplus at holding level of €391.3 million
-A net debt of consolidated subsidiaries (excluding Sorgenia) of €548.1 million (vs. €528.1 at 31 December 2013)
9M 2014 consolidated financial highlights

7. 7
Consolidated income statement
€ m
Group Net income
10.7
5.4
(10.9)
Interest expense
(41.5)
66.7
9M 2013
9M 2014
EBIT
EBITDA
140.7
154.1
79.4
Revenues
1,804.5
1,776.6
(197.1)
Income taxes
(23.4)
(643.6)
Loss on assets held for sale
(2,8)
(1)Reclassified by deconsolidating Sorgenia
(1)
491.3
Non-recurring income
9.7
Net Income including third party interests
(293.6)
--
11.7

8. 8
Consolidated income statement by business sector
€ m
9M 2013
9m 2014
4.9
KOS Group
5.2
13.8
Sogefi Group
Espresso Group
2.5
2.5
(3.3)
(1)
Non-recurring income
26.9
--
Net result
10.7
5.4
(1)Pro-rata share of subsidiaries’ net income
(12.2)
Total operating companies
4.3
(2)Including Sorgenia write-downs and Lodo Mondadori cash in
(33.4)
Sorgenia Group (before write-downs)
(0.1)
(2)

9. 9
Consolidated balance sheet – main group assets
€ m
Group equity in consolidated balance sheet
31 Dec. 2013
30 Sept. 2014
124.1
KOS
129.5
Fixed assets
99.7
18.8
18.3
Sogefi
Espresso
344.5
347.3
99.6
568.3
Total operating companies
576.4
NPLs
76.9
73.9
Private equity
63.9
71.4
Other investments
39.1
38.4
Other assets/liabilities
Net cash
(174.1)
538.0
(21.6)
391.3
(2)
(3) Including provisions for legal expenses and taxes concerning Lodo Mondadori cash in
1,131.0
1,148.1
(2) Non Performing Loans portfolios
(1) Including Cir Ventures, Education and other minor investments
Consolidated shareholders’ equity
(1)
(3)
Assets held for sale
0.1
--

10. 10
Consolidated net financial position
€ m
31 Dec. 2013
30 Sept. 2014
(155.7)
KOS Group
(158.7)
(304.6)
CIR holding level
538.0
391.3
Sogefi Group
Espresso Group
(73.5)
(44.8)
(348.5)
(2,383.3)
Total subsidiaries
(548.2)
Consolidated net financial indebtedness
(1,845.3)
(156.8)
5.6
Other subsidiaries
3.8
Total shareholders’ equity
1,602.3
1,626.1
Consolidated net invested capital
3,447.6
1,782.9
(1)Including third party interests
(1)
Assets held for sale
0.1
Sorgenia Group
(1,855.1)
--
--

11. 11
•On October 13, 2014 CIR S.p.A. announced the results of the tender offer on its € 210,1million outstanding 5.75% 2024 Notes, as well as of the subsequent bondholders’ meeting, that approved the proposal to modify the terms and conditions of the Notes, in order to provide for the early redemption of all the remaining Notes:
•Notes tendered were 51% of outstanding
•Votes in favour of early redemption were 54,1%
•The bond was therefore redeemed in full on 16 October 2014, at a total cost of € 237,1million, of which 10,1million accrued interest and 17,0 million tender offer premia.
•Following the redemption of the 2024 Notes Cir S.p.A. has no outstanding financial debt
Early redemption of the CIR 2024 Notes

12. 12
•Decrease of net cash at holding system level is mainly due to Lodo Mondadori legal expenses
•Impact of October 16 tender offer and early redemption of 2024 CIR bond are not included in numbers below; pro forma net financial surplus would be € 372million
Net financial position at “holding system” level
Net financial position at 30 Sept. 2014
Evolution of net financial position
(1)
(1) Fair value of securities + securities income, trading
(2) Operating costs, extraordinary costs, taxes, etc.
(2)

13. 13
Composition of liquid assets and gross financial debt
€ m
Hedge funds
Other (stocks, equity funds)
797.1
96.0
87.6
27.8
612.2
95.7
29.4
31 Dec. 2013
30 Sept. 2014
Liquidity
Corporate bonds
Government bonds
83.8
15.3
62.1
354.2
15.8
582.6
Total liquid assets
31 Dec. 2013
30 Sept. 2014
CIR S.p.A. 2004/2024
257.7
217.9
259.1
220.9
Gross financial debt
Other debt
1.4
3.0
Liquid assets at 30 Sept. 2014
Insurance policies
-
55.0

14. 14
9M 2014 Subsidiaries’ financial and operational highlights
Key strategic objectives
9M 2014 Highlights
Expansion of digital platforms, leveraging on leadership in traditional media
Further efficiency improvement
Selective growth in emerging industry sectors, with international focus (eg. Education)
Further consolidation in Italian nursing and rehabilitation
Geographical expansion (India)
Global footprint, growth in non-European countries
Product innovation
Further efficiency improvement and restructuring of manufacturing footprint
Still positive net results in a challenging market
La Repubblica is the top daily newspaper for newsstand sales and readership
Decrease of press advertising revenues (-10.5%) in line with the total market
Repubblica.it confirms its leadership among Italian news sites with 1.7 million unique users per day
Net debt €44.8 m vs. €73.5m at the end of 2013
Espresso
Sogefi
KOS
Non-core investments
Positive performance of Education business
Continuing growth of revenues (+4.7%) thanks to ongoing organic and external growth
Margins steady thanks to efficiency improvement
Double digit growth of revenues in non-European markets, especially in North America (+12%) and Asia (+40.5%); strong decline of Latin American markets. Stable at consolidated level (+4.6% at constant exchange rates)
Negative effect of still declining South American market and restructuring charges

15. 15
Espresso - overview
9M 2014 Revenues breakdown
NATIONAL
PRESS
DIGITAL
ADVERTISING
National daily
newspaper
1 8 Regional
newspapers
throughout Italy
G r oup network
websites
T hree national
radio stations
Deejay TV
LOCAL
NEWSPAPERS
RADIO AND TV
Collection of
advertising
€ m
9M 2013 9M 2014
Revenues 512.6 471.2
Net income 4.5 4.6
EBITDA 38.4 41.5
Key financials
Operating structure
9M 2014 Performance and outlook
• Despite the continuing crisis in the publishing sector, 9M results
were positive and in line with the previous year
• Circulation revenues at €175.8m (-6.3% vs 9M 2013) decreased
less than the market (-11.5%); advertising revenues at € 261.7m
decreased 9.3% in line with the market
• 1.7 million unique users for Repubblica.it, confirming its
leadership position among Italian news sites
• On April 2 2014 a €100m five year convertible bond was issued,
with a coupon of 2.625% and conversion price of €2.1523
• On June 30 2014 the integration was completed of the digital
terrestrial network activities of Rete A and Telecom Italia Media
Broadcasting. This transaction gives rise to the largest
independent TV network operator in Italy, with 5 digital
multiplexes (3 from TIMB and 2 from Rete A/Espresso).
• FY 2014 outlook: results in line with previous year

16. 16
Sogefi - overview
Revenues
1,010.6
1,010.2
Net income
23.8
(5.8)
EBITDA
108.4
80.8
Key financials
ENGINE SYSTEMS
DIVISION
SUSPENSION
COMPONENTS DIVISION
PRECISION SPRINGS
TRUCKS
CARS
€ m
9M 2013
9M 2014
•Sogefi 9M results were negatively affected by continuing weakness of South American markets, by restructuring and temporary industrial inefficiencies in Europe
•Consolidated revenues are stable vs 2013 (+4.6% at same exchange rates), thanks to the positive performance of the North American and Asian markets, and despite the negative impact of decrease of LatAm markets
•Consolidated EBITDA, net of restructuring costs, was €98.4m
•On October 21st Sogefi announced that Guglielmo Fiocchi stepped down from the CEO role. Sogefi’s Board of Directors appointed Monica Mondardini, CEO of CIR, as Executive Vice Chairman. Ms Mondardini was also given a mandate by the Board to select a new CEO
9M 2014 Performance and outlook
RENAULT/NISSAN
FORD
PSA
FCA/CNH Industrial
GM
DAIMLER
VOLKSWAGEN/AUDI
BMW
VOLVO
TOYOTA
DAF/Paccar
Revenues breakdown (1H 2014)
MAN
HONDA
CATERPILLAR
OTHERS
12.6%
12.4%
10.5%
11.9%
8.3%
6.9%
3.5%
2.8%
2.5%
2.0%
1.6%
1.4%
0.5%
0.4%
22.7%
66.1%
15.1%
Europe
NAFTA
Mercosur
13.1%
5.5%
0.2%
Increasing weight of non-European markets
Countries
Customers
Asia
others

17. 17
KOS - overview
€ m
2011
2012
Revenues
276.8
289.7
Net income
9.6
10.1
EBITDA
41.3
44,2
Key financials
SHAREHOLDERS
HOSPITAL
MANAGEMENT
RSA
REHABILITATION
CIR (51.3%)
 ARDIAN (46.7%)
 Management and others (2.0%)
Operating structure
9M 2013
9M 2014
3.6
3.4
6.3
9.8
35.0
102.2
7.9
21.8
46.5
102.9
19.1
Revenues breakdown by region (2013)
4.6
•9M 2014 revenues were up 4.7% from € 276.8 million in 9M 2013, thanks to business development in the three business units
•Increase in EBITDA was mainly due to new activities undertaken in 2013 and acquisitions completed in 2014
•During 3Q 2014 2 new nursing homes were completed (205 beds) and one was sold (68 beds). Diagnostic and therapeutic technology activities are continuing in India, with ClearMedi Healthcare JV and in UK with Medipass Healthcare LTD
•The company now has 71 care homes in the centre and north of Italy with a total of 6,350 beds (+ about 300 under construction)
•Main objectives are to pursue market consolidation in core businesses and to selectively internationalize its business footprint, with a primary focus on India
9M 2014 Performance and outlook

18. 18
•Education
-SEG (Swiss Education Group), a world leader in education for hospitality management (hotels, restaurants, etc.) with over 5,000 students coming from 80 different countries. CIR has an interest in SEG of 19.5%. The book value of the investment as at September 30, 2014 was €21.2 million
•Private equity
-Diversified portfolio of private equity funds and direct minority private equity participations, that produced a double digit return over its life. The fair value at September 30 2014 was € 71.4 million
•NPL
-At the end of September 2014 the net value of CIR investment in the non- performing loan portfolios amounted to €73.9 million; no new investments in the recent past
Non-core investments

19. 19
•This document has been prepared by CIR for information purposes only and for use in presentations of the Group’s results and strategies.
•For further details on CIR and its Group, reference should be made to publicly available information, including the Annual Report, the Semi-Annual and Quarterly Reports
•Statements contained in this document, particularly the ones regarding any CIR Group possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties
•Any reference to past performance of CIR Group shall not be taken as an indication of future performance
•This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever
Disclaimer

20. 20
www.cirgroup.com