1

Marzo 2014

9M 2014 Results

October 2014

2

Corporate structure

(1) The percentage is calculated net of treasury shares

Non-core

investments

53.1% 55.9% 57.2% 51.3%

€2.3Bio €712m €1.3Bio €373 m

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

• 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

• 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

• 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

• 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

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

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

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

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

• 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

• 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

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

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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

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Espresso - overview

9M 2014 Revenues breakdown

NATIONAL PRESS

DIGITAL

ADVERTISING

National daily newspaper

18 Regional newspapers throughout Italy

Group network websites

Three 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

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

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

• 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

• 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

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