FIERA MILANO: THE BOARD OF DIRECTORS APPROVES THE INTERIM MANAGEMENT REPORT AT 30 SEPTEMBER 2012

Transcription

1 FIERA MILANO: THE BOARD OF DIRECTORS APPROVES THE INTERIM MANAGEMENT REPORT AT 30 SEPTEMBER 2012 Consolidated revenues of Euro 44.9 million in the third quarter (-8.8% compared to the third quarter 2011) and Euro million in the first nine months of the financial year (+8.9% compared to the first nine months of 2011) Consolidated gross operating result negative for Euro 7.4 million in the third quarter (negative for Euro 1.6 million in the third quarter 2011) and Euro 23.3 million in the first nine months (+26.8% compared to the first nine months of 2011) Consolidated EBIT negative for Euro 10.9 million in the third quarter (negative for Euro 7.0 million in the third quarter 2011) and a cumulative EBIT of Euro 13.7 million in the first nine months (+65.6% compared to the first nine months of 2011) Milano, 9 November The Board of Directors of Fiera Milano SpA, meeting under the chairmanship of Michele Perini, approved the Interim Management Report at 30 September The Chief Executive of Fiera Milano, Enrico Pazzali, commented: The normal weakness experienced in the three months of July-September, due to the almost complete absence of exhibitions during the summer, has, as expected, penalised the results for the period. However, this year was also noteworthy for the alarming continuation of the recession that has affected our sector in Italy. On the contrary, the activities abroad continue to give satisfactory results and are proof that the decision to accelerate the internationalisation of Fiera Milano was the correct one. In the summer, this strategy made significant progress with the latest two acquisitions in Turkey and South Africa. A focus on the more dynamic markets outside Europe is strategic for the Group in the medium-term and already in the current financial year these markets should generate about one quarter of the consolidated gross operating result. The congress sector, where Fiera Milano is one of the leading companies in Europe, has also reacted well given the recessionary pressures and this reflects the competitiveness of the Group with the new MiCo congress centre. In a context that requires constant monitoring in order for any eventual remedial actions to be taken in a timely manner, the Group remains focused on reaching the target already communicated to the market of a gross operating result of Euro 20 million. Nevertheless, the benefits to the region generated by Fiera Milano and the entire Group through its core activities remain significant. The normally quiet period for exhibitions in July and August and the contained drop in exhibition demand in Italy negatively influenced the third quarter results of Fiera Milano Group but did not lead to a year-on-year decline in the results for the first nine months. The latter show an upward trend compared to the figures for the same period of the previous financial year. There was a decline in net exhibition space occupied in Italy in the quarter under review with a consequent effect on revenues and gross operating result. In addition to the extended slowdown in the domestic market, which is now affecting almost all exhibitions although to differing degrees, the results of the quarter were influenced by the transfer of the exhibition, Intercharm, to October, which resulted in over 14,000 square metres less of exhibition space, and also by the repositioning of Macef, the

2 September edition of which was held without the parallel event, Macef AbitaMi. The trend was partly compensated by the performance of the congress segment, which reflected the important international medical and scientific congresses held (for example, the World Congress on Pain and that of the European Society of Cataract & Refractive Surgeons), and the activities outside Italy in fast-growing markets, which had an increase in exhibition space occupied and remain the priority growth area of the Group. It is worth highlighting the addition to the Group s portfolio that came with the acquisitions made in Turkey and South Africa in the period under review and the success of the first edition of Enersolar in Brazil that was launched in Sao Paulo through Cipa FM. During the third quarter a series of important concerts were held and these included the Heineken Jammin Festival; these form part of the strategy of expanding the Group activity in the summer period. The internationalisation of the Group continued with the acquisition on 3 August 2012 of 60% of the Turkish company, Interteks Uluslararasi Fuarcilik A.S., for a total purchase price of USD 3.1 million (Euro 2.5 million 1 ) of which USD 2.5 million (Euro 2.1 million 1 ) paid on that date. The remaining USD 0.6 million (Euro million 1 ) is Fiera Milano s share of the recapitalisation of the company that was carried out following finalisation of the acquisition. The Turkish exhibition company is the leader in the local market with a diversified portfolio of exhibitions in the beauty and personal care, home and garden, sailing, and logistics sectors. It has several new initiatives in the pipeline that include International Art Istanbul, Wedding and Reatech in Istanbul. It also benefits from the recent expansion of the exhibition/congress site of the Istanbul Congress Center. On 31 August 2012, 75% of the South African company, Cape Gourmet Food Festival PTY Ltd., was acquired for a total purchase price of 54.0 million South African rand (Euro 5.2 million 2 ), of which 43.2 million South African rand (Euro 4.1 million 2 ) paid on that date. The remaining 10.8 million South African rand (Euro 1.0 million 2 ) is to be paid in two years depending on the Good Food & Wine Show achieving certain gross profit targets in the 2012 and 2013 financial years. Cape Gourmet organises the Good Food & Wine Show, an agrifood exhibition that takes place annually in three cities, Johannesburg (Gauteng), Cape Town and Durban. The exhibition is on its fourteenth edition and is highly successful at targeting both consumers and businesses in the Food & Beverage sector. In the third quarter 2012, the Parent Company acquired 84,467 treasury shares at an average price of Euro 3.40 per share for a total of ca. Euro 287,000, following the approval given at the Shareholders Meeting of 27 April At 30 September 2012, the Company held 1,078,778 treasury shares, equal to 2.56% of the share capital. During the quarter under review, eleven exhibitions were held, of which five were held abroad, and there were five events with related exhibition space in Italy. Net exhibition space occupied totalled 194,265 square metres in Italy (-23%) with 4,410 exhibitors (-12%) and 72,455 square metres abroad (+7%) with 410 exhibitors (+74%). 1 Figures in Euro are shown using the exchange rate of 3 August 2012 (EUR/USD = ). 2 Figures in Euro are shown using the exchange rate of 31 August 2012 (EUR/South African Rand = ). 2

3 RESULTS FOR THE QUARTER It should be remembered that the seasonality of the exhibition business, the existence of exhibitions that are held on a multi-annual basis, and the absence of exhibitions in July and August and in the second half of December means that the figures may not be extrapolated to calculate the full-year figures and may vary substantially from one quarter to the next. The key data of the Group is given in the table below. Fiera Milano Group Full year Summary of key figures 3rd Quarter 3rd Quarter 9 months 9 months at 31/12/11 (Amounts in 000) at 30/09/12 at 30/09/11 at 30/09/12 at 30/09/11 278,000 Revenues from sales and services 44,860 49, , ,773 30,917 Gross operating result -7,410-1,628 23,320 18,393 15,518 Net operating result (EBIT) -10,931-6,980 13,734 8,292 12,716 Profit/(loss) before income tax: -11,903-7,839 10,581 5,815 12,373 - Attributable to the Shareholders of the controlling entity -12,150-7,732 10,376 5, Attributable to Non-controlling interests ,115 Cash flow for the Group and Non-controlling interests (a) -8,382-2,487 20,167 15, ,886 Net capital employed (b) 163, , , ,529 covered by: 68,210 Equity attributable to the Group 68,963 * 68,653 * 68,963 * 68,653 * 2,456 Equity attributable to Non-controlling interests 2,366 * 411 * 2,366 * 411 * 52,220 Net financial debt/(cash) 92,653 58,465 92,653 58,465 33,234 Investments (continuing operations and discontinued operations) 8,918 2,653 11,973 23, Employees (no. of permanent employees at end of period) * includes pre-tax result for the period (a) Cash flow is represented by the sum of the result for the period, depreciation and amortisation and provisions. (b) Net capital employed is represented by the sum of non current assets, non current liabilities and net working capital. Revenues from sales and services for the quarter totalled Euro 44.9 million, an 8.8% decrease compared to the figure for the same period of the preceding financial year (Euro 49.2 million in third quarter 2011). Revenues reflected the negative trend in exhibitions in Italy, which was partly compensated by the good performance of exhibitions outside Italy and of the congress segment. Revenues in the third quarter, gross of adjustments for transactions among the operating segments of the Group, were: - Euro 31.3 million from Italian exhibitions (-18.4% compared to the third quarter of 2011); - Euro 3.2 million from foreign exhibitions (+43.2%); - Euro 6.1 million from stand-fitting services (-14.1%); - Euro 2.0 million from the media segment (-37.4%); - Euro 6.3 million from the congress segment (+86.8%). In the first nine months of 2012, revenues, gross of adjustments for transactions among the operating segments of the Group, were Euro million, an increase of 8.9% compared to the same period of 2011 (Euro million) and the breakdown was as follows: - Euro million from Italian exhibitions (+11.2% compared to the first nine months of 2011); 3

4 - Euro 12.2 million from foreign exhibitions (+25.0%); - Euro 26.3 million from stand-fitting services (+6.4%); - Euro 9.8 million from the media segment (-26.8%); - Euro 18.4 million from the congress segment (+3.4%). The consolidated Gross operating result for the quarter was negative for Euro 7.4 million (negative for Euro 1.6 million in third quarter 2011). The deterioration of the quarter was mainly due to the trend in revenues, but also to an increase in the rental costs payable by the Parent Company, as well as the absence of the Euro 2.8 million in income for the anticrisis initiatives paid by the controlling shareholder, Fondazione Fiera Milano, in the third quarter of In the third quarter the gross operating result, gross of adjustments for transactions among the operating segments of the Group, was: - A negative figure of Euro 9.1 million from Italian exhibitions (a negative figure of Euro 2.0 million in the third quarter 2011); - Euro million from foreign exhibitions (a negative figure of Euro million in the third quarter 2011); - Euro million from stand-fitting services (Euro 1.4 million in the third quarter 2011); - A negative figure of Euro million from the media segment (a negative figure of Euro million in the third quarter 2011); - Euro million from the congress segment (a negative figure of Euro million in the third quarter 2011). In the first nine months of 2012, the gross operating profit, gross of adjustments for transactions among the operating segments of the Group, was Euro 23.3 million, an increase of 26.8% compared to the same period of 2011 (Euro 18.4 million) and a margin on revenues of 11.3% (9.7% in the same period of 2011). The gross operating profit in the first nine months of 2012, gross of adjustments for transactions among the operating segments of the Group, was: - Euro 15.8 million from Italian exhibitions (+31.4% compared to the first nine months of 2011); - Euro 2.1 million from foreign exhibitions (+28.5%); - Euro 3.3 million from stand-fitting services (+22.8%); - Euro million from the media segment (-67.8%); - Euro 2.0 million from the congress segment (+47.7%). The Net operating result (EBIT) for the quarter was negative for Euro 10.9 million (negative for Euro 7.0 million in the third quarter 2011). The deterioration was mainly due to the trend in the gross operating result but was, in part, offset by lower risk provisions as those in the third quarter 2011 included the redundancy incentives in the Parent Company. In the first nine months of 2012, the net operating profit totalled Euro 13.7 million, an increase of 65.6% compared to the same period of 2011 (Euro 8.3 million) that was mainly due to the trend in the gross operating profit for the period. 4

5 The Pre-tax result for the quarter was negative for Euro 11.9 million (negative for Euro 7.8 million in the third quarter 2011); a negative figure of Euro12.2 million was attributable to the Group (a negative figure of Euro 7.7 million in the third quarter 2011) and Euro million to non-controlling interests (a negative figure of Euro million in the third quarter 2011). In the first nine months of 2012, the pre-tax profit totalled Euro 10.6 million, an increase of 82.0% compared to the same period of 2011 (Euro 5.8 million). Cash flow in the quarter under review (calculated as the pre-tax result plus depreciation, amortisation and provisions) was negative for Euro 8.4 million (negative for Euro 2.5 million in the third quarter 2011). In the first nine months of 2012, the cash flow totalled Euro 20.2 million, an increase of 26.7% compared to the same period of 2011 (Euro 15.9 million). BREAKDOWN BY GEOGRAPHIC AREA The breakdown by geographic area in the third quarter showed revenues from foreign activities of Euro 3.2 million, a year-on-year increase of 43.7% due primarily to the contribution from the launch of the exhibition Enersolar in Brazil and to revenues from the newly acquired company, Cape Gourmet. The gross operating profit was Euro million and the EBIT was Euro million (negative for Euro million and negative for Euro million respectively in the third quarter 2011) primarily due to Cipa FM and Cape Gourmet. The foreign activities had a gross operating margin of 26.5% in the third quarter NET FINANCIAL POSITION Net financial debt at 30 September 2012 was Euro 92.7 million compared to Euro 64.1 million at 30 June Current net financial debt was Euro 80.0 million, an increase of Euro 29.0 million compared to the figure at 30 June The increase reflects the negative cash flow caused by the absence of activity in July and August, the investments made for the acquisitions of Interteks and Cape Gourmet, and the negative trend in cash flow caused by net working capital. Moreover, other financial debt increased mainly due to the item in the business current account for the six-monthly rent paid in advance to Fondazione Fiera Milano Non-current financial debt was Euro 12.6 million (Euro 13.1 million at 30 June 2012), a decrease of Euro million due to the dual effect of the gradual pay down of non-current financing and to new debt for financial leases. In the third quarter 2012, investments totalled Euro 8.9 million, bringing the total figure for the first nine months to Euro 12.0 million. SIGNIFICANT EVENTS OCCURRING AFTER THE END OF THE QUARTER In the period after 30 September 2012, the Parent Company has acquired 37,438 treasury shares at an average price of Euro 3.99 per share. At today s date, the number of treasury shares held is 1,116,216 equal to 2.65% of the share capital. 5

6 BUSINESS OUTLOOK Given the ongoing recession in Italy and its effect on the exhibition sector, Fiera Milano Group is active on all fronts to ensure that the full-year 2012 targets communicated to the market of 1.8 million net square metres of exhibition space occupied in Italy and abroad and a gross operating profit of Euro 20 million are met. The Group continues to monitor trends in industrial sectors and is repositioning the main exhibitions that it owns. The Group remains focused on its internationalisation strategy. In 2012, this has progressed significantly with the export of its own trade exhibitions (Macef, Host and Tuttofood) and with the recent acquisitions in Turkey and South Africa. *** The Interim Management Report at 30 September 2012 will be made publicly available from today at the registered office of the Company and at its operational and administrative headquarters, as well as at the office of Borsa Italiana SpA, and may also be found on the Company website The Manager responsible for preparing the Company Financial Statements, Flaminio Oggioni, in accordance with paragraph 2 article 154-bis of the Consolidated Finance Law (Testo Unico della Finanza), herewith declares that the accounting information contained in this press release is consistent with the official documents, books and accounting records. This press release and, in particular, the paragraph Business Outlook contains forward-looking statements. These statements are based on the current expectations and assumptions of the Group regarding future events and by their very nature are subject to certain risks and uncertainties. The actual results could differ materially from those contained in these statements for a variety of factors that include changes in general economic and business conditions, continued volatility and a further deterioration in the capital and financial markets and many other factors, the majority of which are outside the control of the Group. For further information: Ufficio Stampa Fiera Milano SpA Sergio Pravettoni Tel /7582 Fax sergio.pravettoni@fieramilano.it Appendices (unaudited): Consolidated Income Statement Reclassified consolidated balance sheet Investor Relations Fiera Milano SpA Gianna La Rana Tel Fax gianna.larana@fieramilano.it 6

7 Consolidated income statement (Amounts in '000) Full Year 3rd Quarter 3rd Quarter 9 months 9 months % % % % % 278, Revenues from sales and services 44, , , , , Cost of materials , , , Cost of services 25, , , , , Costs for use of 3rd-party assets 15, , , , , Personnel expenses 11, , , , , Other operating expenses , , , , Total operating costs 53, , , , , Other income , , , , Gross operating result -7, , , , , Depreciation and amortisation 3, , , , , Allowance for doubtful accounts and other provisions (uses) , , Adjustments to asset values , Net operating result (EBIT) -10, , , , , Financial income/(expenses) , , Profit/(loss) of equity-accounted companies , Profit/(loss) before income tax: -11, , , , , attributable to the Shareholders of the controlling entity -12, , , , attributable to non-controlling interests , Cash flow for the Group and noncontrolling interests -8, , , ,

8 Reclassified consolidated balance sheet 31/12/11 (Amounts in '000) 30/09/12 30/06/12 Change 112,022 Goodwill and intangible assets with an indefinite useful life 119, ,063 7,021 58,407 Intangible assets with a finite useful life 55,787 56, ,667 Tangible fixed assets 25,923 27,698-1,775 14,521 Other non-current assets 14,919 14, ,617 A Non-current assets 215, ,620 5,093 1,988 Inventory and contracts in progress 3,874 2, ,593 Trade and other receivables 59,764 47,392 12,372 0 Other current assets ,581 B Current assets 63,638 50,379 13,259 44,508 Trade payables 32,105 39,970-7,865 47,507 Payments received on account 27,263 18,895 8,368 3,666 Tax liabilities 1,442 4,940-3,498 34,128 Provisions for risks and charges and other current liabilities 27,894 27, ,809 C Current liabilities 88,704 91,646-2,942-65,228 D Net working capital (B - C) -25,066-41,267 16, ,389 E Gross capital employed (A + D) 190, ,353 21,294 7,727 Employee benefit provisions 8,579 8, ,776 Provisions for risks and charges and other non-current liabilities 18,086 21,786-3,700 27,503 F Non-current liabilities 26,665 30,190-3, ,886 G NET CAPITAL EMPLOYED continuing operations (E - F) 163, ,163 24,819 - H NET CAPITAL EMPLOYED discontinued operations ,886 TOTAL NET CAPITAL EMPLOYED (G + H) 163, ,163 24,819 covered by: 68,210 Equity attributable to the Group 68,963 * 73,145-4,182 2,456 Equity attributable to non-controlling interests 2,366 * 1, ,666 I Total equity 71,329 75,055-3,726-19,865 Cash and cash equivalents -19,328-14,902-4,426 56,761 Current financial (assets)/liabilities 99,360 65,899 33,461 15,324 Non-current financial (assets)/liabilities 12,621 13, ,220 Net financial position (continuing operations) 92,653 64,108 28,545 - Net financial position (discontinued operations) ,220 L Net financial position (TOTAL) 92,653 64,108 28, ,886 EQUITY AND NET FINANCIAL POSITION (I + L) 163, ,163 24,819 * includes pre-tax result for the period 8