Consolidated Interim Management Report 1Q2014

Business Model page 4 Group Structure page 5 ... The Board of Directors is invested with the widest powers for the ordinary and extraordinary manageme...

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Conso olidate ed Interrim Man nageme ent Rep port to 31 M March 2014 2 (1st Q Quarter 20 014)

This document d is ava ailable in the Invvestor Relationss section of the Company websiite, www w.fieramilano.it

Th his document conttains a true translation into English of the original report in Italian “Re esoconto intermeddio di gestione con nsolidato al 31 marzo 2014”. Ho owever, for inform mation about Fiera a Milano Group refference should be e made exclusively y to the original reeport in Italian. Th he Italian version of the “Resoconto o intermedio di geestione consolidato o al 31 marzo 2014” shall prevail uppon the English ve ersion.

Fie era Milano Sp pA Registered office: Piazzzale Carlo Ma agno, 1 - 2014 49 Milan Operattional and adm ministrative off ffice: SS del Se empione, 28 - 20017 Rho (M Milan) Share capital: Eurro 42,147,437 7.00 fully paid up Com mpanies registe er, Tax Code and a VAT no. 1 3194800150 – Economic Ad dministrative R Register 1623812

Rho (M ilan), 12 May y 2014

Contents __________________________________________________________________________________

▪ Corporate Bodies and Independent Auditor

page

3

▪ Business Model

page

4

▪ Group Structure

page

5

▪ Report ▫ ▫ ▫ ▫

page page page page

6 10 11 16

▪ Significant events occurring after the end of the quarter

page

17

▪ Business outlook

page

17

▪ Accounting standards and consolidation criteria

page

18

▪ Financial Statements ▫ Consolidated Income Statement ▫ Reclassified Consolidated Statement of Financial Position ▫ Comments on the capital and financial position

page page page

19 20 21

page

22

page

23

on operations in the first quarter Summary of results and significant events during the quarter Net financial position Information by operating segment and by geographic area Group Personnel

▪ Declaration of the Manager responsible for preparing the Company’s Financial Statements ▪ Attachment 1 List of companies included in the area of consolidation and other equity investments at 31 March 2014

2

Corporate Bodies and Independent Auditor __________________________________________________________________________ BOARD OF DIRECTORS Michele Perini Attilio Fontana Renato Borghi Enrico Pazzali Roberto Baitieri Pier Andrea Chevallard Davide Croff Giampietro Omati Romeo Robiglio

Chairman Deputy Vice-Chairman*° Vice Chairman*° Chief Executive Officer Director*° Director*° Director*° Director* Director°

*Independent director under the Self-Regulatory Code of the Italian stock exchange. °Independent director under article 148, paragraph 3 of Legislative Decree No. 58 of 24 February 1998.

CONTROL AND RISK COMMITTEE

REMUNERATION COMMITTEE

Davide Croff Roberto Baitieri Renato Borghi

Attilio Fontana Giampietro Omati Romeo Robiglio

BOARD OF STATUTORY AUDITORS

SUPERVISORY BOARD (Decree Law 231/01)

Stefano Mercorio Alfredo Mariotti Damiano Zazzeron Antonio Guastoni Pietro Pensato

Michele Perini Pier Andrea Chevallard

Chairman Statutory Auditor Statutory Auditor Substitute Auditor Substitute Auditor

Ugo Lecis Andrea Pizzoli

MANAGER RESPONSIBLE FOR PREPARING THE COMPANY’S FINANCIAL STATEMENTS (Law 262/2005) Flaminio Oggioni

--The mandates of the Board of Directors and the Board of Statutory Auditors were renewed at the Shareholders’ Meeting of 27 April 2012 and expire with the Shareholders’ Meeting to approve the Financial Statements at 31 December 2014. The Board of Directors is invested with the widest powers for the ordinary and extraordinary management of the Company, excluding only those which by law are the preserve of the Shareholders’ Meeting. The Chairman, in addition to legally representing the Company and performing the duties as required by law and by the Company’s articles of association, also, in conjunction with the Chief Executive Officer, has the following responsibilities: relations with shareholders, national and international institutional relations, internationalisation activities, strategic and innovative initiatives, verification of the implementation of the Board of Directors’ resolutions and supervision of internal auditing. The Chief Executive Officer has ordinary and extraordinary administrative powers, except for those relating to certain specific matters that include the acquisition or disposal of investments, obtaining loans that exceed 30% of the Company’s equity, the stipulation of contracts for assets, excluding leases for the conduct of Company business of less than six years duration, approval of the budget for the year, and the grant of guarantees to third parties.

INDEPENDENT AUDITOR

Reconta Ernst & Young SpA The mandate, given by the Shareholders’ Meeting of 29 April 2014, is for the financial years 2014-2022.

3

Business Model __________________________________________________________________________ The Fiera Milano Group is involved in all the normal phases of the exhibition and congress sector and is one of the leading international integrated companies in this sector. The Fiera Milano Group is active in the following operating segments: -

Italian Exhibitions: this segment covers all activities for the organisation and hosting of exhibitions and other events in Italy through the use, promotion and offer of furnished exhibition spaces, of project support, and of ancillary services. Specifically this segment includes all activities associated with exhibitions (including end services for exhibitors and visitors): ƒ that are directly organised by the Group or in partnership with third-parties; ƒ organised by third parties, through the hiring out of spaces and services.

-

Foreign Exhibitions: this segment covers all activities for the organisation of exhibitions and other events abroad, through the use, promotion and offer of furnished exhibition spaces, of project support, and of ancillary services. Specifically this segment includes all activities associated with exhibitions (including end services for exhibitors and visitors) that are directly organised by the Group or in partnership with third-parties.

-

Stand-fitting services: this segment covers stand-fitting services, technical services and all exhibition site services for exhibitions and congresses.

-

Media: this segment covers the production of content and supply of on-line and off-line publishing services, as well as with the organisation of events and congresses.

-

Congresses: this segment covers the management of conferences and events.

4

Group Structu ure _________ __________ __________ __________ __________ __________ ____________________ ____

The presentt chart does not include subsidiaries s ccurrently nott operational.

5

Report on operations in the first quarter Summary of results and significant events during the quarter The following table shows the principal figures reported by the Group for the first quarter and the comparable data for the same quarter of the previous year, as well as the figures for the full year 2013.

Full Year at 31/12/13 245,057 2,155

Fiera Milano Group Summary of key figures (Amounts in € ‘000) Revenues from sales and services

1st Quarter at 31/03/14

1st Quarter at 31/03/13

74,763

62,143

Gross operating result

7,712

-597

Net operating result (EBIT)

5,228

-1,198

-20,932

Profit/(loss) before income tax

3,925

-2,197

-20,821

- Attributable to the shareholders of the controlling entity

4,063

-1,956

-17,087

-111 -1,690 136,325

- Attributable to non-controlling interests Cash flow before income tax for the Group and non-controlling interests (a) Net capital employed (b)

-138

-241

6,409

-1,596

155,216

148,169

covered by: 34,650 2,812

Equity attributable to the Group Equity attributable to non-controlling interests

98,863

Net financial debt/(cash)

15,655

Investments (continuing operations and discontinued operations)

826

Employees (no. of permanent employees at end of period)

38,952 * 3,016 *

54,297 * 3,701 *

113,248

90,171

1,841

895

838

778

* includes pre-tax result fo r the perio d (a) Cash flo w is the sum o f the result fo r the financial year, depreciatio n and amo rtisatio n and pro visio ns. (b) Net capital emplo yed is the sum o f no n-current assets, no n-current liabilities and net wo rking capital. The co mparative figures fo r the year to 31December 2013 and the quarter ended 31M arch 2013 have been adjusted to take into acco unt the ado ptio n o f the new IFRS 11 Jo int arrangements.

Fiera Milano Group’s results for the first quarter 2014 were positive due to the occurrence in the period of an important biennial exhibition, while, in an economic climate characterised by fragile growth prospects, exhibition activity continued to reflect the absence of significant reliable indications of recovery. The presence in the period of the biennial Mostra Convegno Expocomfort exhibition, representing about 29% of the exhibition space occupied in the quarter, contributed decisively to the 4% growth in exhibition space utilised by exhibitions in Italy and, consequently, to the increase in revenues and the Gross Operating Result (MOL). This result was partly offset by the trend of the directly organised exhibitions, HOMI, which made its debut in it dramatically renewed format, and BIT which will be relaunched in a new format in 2015. HOMI, in particular, was impacted by extraordinary expenses relating to the relaunch and internationalisation initiatives recently undertaken. Directly organised foreign exhibitions substantially maintained a stable trend. There was a particularly notable positive performance by exhibitions in the fashion sector amongst hosted exhibitions and the positive trend of the congress segment due to the presence of important international conventions and congresses should also be noted. Among the orders relating to Expo 2015, Fiera Milano is designing the stands for the Thematic Areas: Pavilion Zero, Future Food District, Children’s Park and the Biodiversity Park. On 31 March 2014 new leasing contracts were signed regarding the exhibition sites of Rho and Milan. Compared to the current lease agreement, under the new lease agreement for the Rho exhibition site, there will be a reduction in the rent of Euro 2.000 million in the second 6

semester of 2014 and of Euro 14.000 million per annum from in 2015 and in each subsequent year of the contract. The lease agreement has therefore been set at Euro 24.400 million for the second semester of 2014 and at Euro 38.800 million for 2015 and for each subsequent year of the agreement, annually adjusted for 100% of the change in the ISTAT consumer price index. Because of EXPO 2015, which is expected to have a positive impact on the exhibition business of Fiera Milano, for 2015 alone Fondazione Fiera Milano will be paid an additional rental component should the Revenue generated by Fiera Milano SpA in 2015 exceed the average annual revenues of the three year period 2012-2014. Specifically, Fiera Milano will pay a supplementary rent equal to 15% of the aforementioned difference in revenues up to a maximum amount of Euro 10.000 million. As regards the Milan exhibition site, the parties agreed to maintain the current rent of Euro 2.850 million per annum, annually adjusted for 100% of the change in the ISTAT consumer price index. The new lease agreements both have a duration of nine years effective from 1 July 2014 (following early agreed termination of the current lease agreements, which were due to expire on 31 December 2014) and are automatically renewable for a further nine years. The rental agreements constitute a related-party transaction as Fondazione Fiera Milano has a controlling shareholding of 62.062% in the share capital of Fiera Milano. The transaction is also a transaction of greater importance under Article 5 of Consob Regulation no. 17221 of 2010 on related-party transactions and of Article 10.2 of the Procedure regarding Transactions with Related Parties adopted by Fiera Milano as it exceeds the value thresholds contained therein. As Fiera Milano qualifies as a “small and mid-cap company”, as defined in Article 3, first paragraph, letter (f) of the Consob Regulation, the Company could have availed itself of the exemption permitted under Article 10, paragraph 1 of the same Regulation, and applied to a transaction of greater importance (such as the one described above) the procedures for transactions of lesser importance. However, because of the highly sensitive nature of the transaction and its importance to the corporate activities of the Company, the Board of Directors of Fiera Milano SpA, on the suggestion of the Control and Risk Committee, chose to employ for this transaction the more rigorous procedures required for transactions of greater importance. The rental agreements were drawn up also taking account of a valuation prepared for Fiera Milano SpA by the independent experts Jones Lang LaSalle SpA. In addition to the aforementioned significant operation, it should also be noted that: -

On 10 January 2014, Fiera Milano SpA paid Euro 0.407 million as the first tranche of the share capital increase of Worldex (China) Exhibition & Promotion Ltd.

-

On 14 February 2014, the Board of Directors of the Parent Company decided to wind up the company Milan International Exhibitions Srl. On 3 March 2014 the Extraordinary General Meeting of Milan International Exhibitions approved the start of the voluntary winding-up process.

-

On 18 February 2014, the Parent Company paid Euro 0.219 million as part of the share capital increase of Interteks.

7

-

On 5 March 2014, with a payment equivalent to Euro 1.800 million, the deferred element was paid for the acquisition of 75% of the Chinese exhibition company Worldex (China) Exhibition & Promotion Ltd, which was acquired on 15 May 2013.

The activities of the Group are highly seasonal due to the impact of biennial and multi-

annual exhibitions. Given the seasonal nature of its activities, the revenues and results reported in individual quarters may vary substantially from one quarter to the next. A detailed analysis of the results for the first quarter of 2014 reveals the following trends: - Revenues from sales and services were Euro 74.763 million, an increase of 20% compared with the result for the same quarter of the previous year (Euro 62.143 million). The increase in revenues is attributable to the more favourable exhibition calendar which in the quarter under review included the “even-numbered year biennial” exhibition Mostra Convegno Expocomfort. This trend was partly offset by the decrease in demand for exhibition space relating to the directly organised exhibitions, HOMI and Bit. The breakdown of total square metres of the Fiera Milano Group exhibition portfolio is given in the table on the following page. The results reflect the following changes: -

-

-

-

-

-

Annual exhibitions organised by the Group in Italy (-12,690 square metres): the

decrease was largely due to the lower exhibition space utilised by HOMI (-9,380 square metres) and Bit (-9,345 square metres), this was partially compensated by the inclusion in this quarter of Miart (+6,360 square metres) which in 2013 took place in the second quarter. Annual exhibitions organised by third parties (-31,430 square metres): this primarily reflects the lower exhibition space utilised by Hobby Show (-8,960 square metres) and the absence of Milano Auto Classica which was postponed to the second quarter of 2014 (-16,030 square metres) and Eu.Di.Show (-5,320 square metres) which did not take place. Congresses with related exhibition space was down by 2,520 square metres. Biennial exhibitions organised by the Group in Italy (-52,610 square metres) owing to the absence in 2014 of Transpotec & Logitec. Biennial exhibitions organised by third parties (+113,760 square metres): the increase is attributable to the presence in this quarter of the current year of the “even-numbered year biennial” exhibition Mostra Convegno Expocomfort (+125,375 square metres) only partially offset by the absence of the “uneven-numbered years biennial” exhibitions Photoshow (-6,910 square metres) and Frameart (-4,705 square metres). Annual exhibitions organised by the Group abroad (+5,300 square metres): the increase is primarily due to the increase in exhibition space utilised by theMICAMshangai (+2,970 square metres) which in 2013 took place in the second quarter, GITF International Tour Guangzhou (+1,890 square metres) and Chinafloor Domotex Shanghai (+1,415 square metres). This was partly offset by the absence in Brazil of the exhibitions Food Hospitality World (-1,970 square metres) and Pet Show (-770 square metres) which in 2014 will be held respectively in the second and third quarters. Biennial exhibitions organised by the Group abroad (-17,070 square metres): the decrease is due to the absence in this quarter of the current year of the “unevennumbered years biennial” exhibitions WoodMac China (-15,950 square metres) and Rehabtech Asia (-1,120 square metres) organised in Singapore.

8

Fiera Milano Group Summary operating figures

1st Quarter 2014

1st Quarter 2013

Organised Total

by the Group

30

15

-4

Italy

16

4

19

4

-3

-

. annual

15

4

16

3

-1

1

. biennial

1

-

3

1

-2

-1

. multi-annual

-

-

-

-

-

-

Foreign Countries

10

10

11

11

-1

-1

-1

. annual

10

10

9

9

1

1

. biennial

-

-

2

2

-2

-2

. multi-annual

-

-

-

-

-

-

7

-

6

-

1

-

Net sq.metres of exhibition space:

514,285

187,705

511,545

264,775

2,740

-77,070

Italy

430,995

104,415

416,485

169,715

14,510

-65,300

. annual (a)

305,620

104,415

352,260

117,105

-46,640

-12,690

. biennial

125,375

-

64,225

52,610

61,150

-52,610

-

-

-

-

-

-

5,455

-

7,975

-

-2,520

-

83,290

83,290

95,060

95,060

-11,770

-11,770

83,290

83,290

77,990

77,990

5,300

5,300

. biennial

-

-

17,070

17,070

-17,070

-17,070

. multi-annual

-

-

-

-

-

-

10,730

3,720

9,925

4,095

805

-375 -150

Foreign Countries . annual

Number of exhibitors: Italy

8,870

1,860

7,840

2,010

1,030

. annual (b)

7,320

1,860

7,515

1,845

-195

15

. biennial

1,550

-

325

165

1,225

-165

. multi-annual

-

-

-

-

-

-

420

-

395

-

25

-

1,860

1,860

2,085

2,085

-225

-225

1,860

1,860

1,725

1,725

135

135

. biennial

-

-

360

360

-360

-360

. multi-annual

-

-

-

-

-

-

(b) o f which co ngresses with related exhibitio n space:

Foreign Countries . annual



Organised Total

14

. multi-annual



by the Group

26

(a) o f which co ngresses with related exhibitio n space:



Organised Total

Number of exhibitions:

Number of congresses with related exhibition space - Italy



by the Group

Change

The Gross Operating Result for the quarter was Euro 7.712 million compared to a negative result of Euro 0.597 million in the same period of the previous year. The Gross Operating Result for the first quarter 2014 reflects the positive trend of revenues described above and benefited from lower write-down of receivables. The Net Operating Result (EBIT) was Euro 5.228 million compared to negative Euro 1.198 million in the first quarter of 2013, reflecting the improvement in the Gross Operating Result and also benefited from the lower utilisation of provisions made by the Parent Company to cover loss-making exhibitions, doubtful receivables and disputes with personnel. The Pre-tax result was Euro 3.925 million compared to negative Euro 2.197 million in the first quarter of 2013. Euro 4.063 million of the Pre-tax result is attributable to shareholders of the controlling entity (negative Euro 1.956 million in the first quarter of 2013) and negative Euro 0.138 million is attributable to non-controlling interests (negative Euro 0.241 million in the first quarter of 2013). Finally, total Cash flow in the quarter (expressed as total pre-tax profit plus depreciation, amortisation and provisions) was Euro 6.409 million compared to negative Euro 1.596 million in the same quarter of the previous year.

9

Net Financial Position The Group’s net financial position and its composition are shown in the following table.

Group Net Financial Position 31/12/13 11,416

(Amounts in € '000)

A. Cash (including bank balances)

31/03/14 17,288

-

B. Other cash equivalents

-

-

C. Securities held for trading

-

11,416 635

D. Cash and cash equivalents (A+B+C) E. Current financial assets

17,288 -

42,706

F. Current bank borrowings

43,572

12,745

G. Current portion of non-current debt

14,621

20,572

H. Other current financial liabilities

33,962

20,410

- H.1 of which Current financial liabilities to the controlling shareholder

33,800

76,023

I. Current financial debt (F+G+H)

92,155

63,972

J. Current net financial debt (cash) (I-E-D)

74,867

34,506 385

K. Non-current bank borrowings L. Debt securities in issue M. Other non-current liabilities

34,891

N. Non-current financial debt (K+L+M)

98,863

Net financial debt (cash) from continuing operations (J+N)

98,863

Net financial debt (cash) from discontinued operations O. Net financial debt (cash)

38,079 302 38,381 113,248 113,248

Net Debt at 31 March 2014 was Euro 113.248 million compared to Euro 98.863 million at 31 December 2013, representing an increase of Euro 14.385 million. The increase in net debt was mainly due to the trend in net working capital and, in particular, to the advance payment of the six monthly rent for the two exhibition Sites to the controlling shareholder Fondazione Fiera Milano.

10

Information by operating segment and by geographic area The key Group figures by business sector and geographic area are given in the following table. Summary of data by operating segment and by geographic area

Full year 2013

(Amounts in € '000)

%

1st Quarter to 31/03/14

Revenues from sales and services

1st Quarter to 31/03/13 %

%

- By operating segment: 194,583

69.5

15,274

5.5

33,594

12.0

11,958

4.3

24,546

8.8

279,955

100.0

-34,898 245,057 229,856

93.8

15,201

6.2

245,057

100.0 % of revenues

. Italian Exhibitions

65,772

74.2

51,651

1,334

1.5

1,618

2.3

12,938

14.6

9,892

14.1

. Media

3,015

3.4

2,776

4.0

. Congresses

5,585

6.3

4,235

6.0

88,644

100.0

70,172

100.0

. Foreign Exhibitions . Stand-fitting Services

Total revenues gross of adjustments for inter-segment transactions . Adjustments for inter-segment transactions

-13,881

-8,029

Total revenues net of adjustments for inter-segment transactions - By geographic area:

74,763

62,143

. Italy

73,433

98.2

60,525

. Foreign countries

1,330

1.8

1,618

2.6

100.0

62,143

100.0

Total

-2.6

. Italian Exhibitions

18.3

. Foreign Exhibitions

1,605

4.8

. Stand-fitting Services

277

2.3

. Media

2,532

10.3

. Congresses . Adjustments for inter-segment transactions

0.9

Total - By geographic area:

-540

-0.2

. Italy

2,695

17.7

. Foreign countries

2,155

0.9 % of revenues

Total

. Italian Exhibitions

1,644

10.8

. Foreign Exhibitions . Stand-fitting Services

-215

-0.6 -61.3

566

2.3

59 -7.0

-18,544

-8.1

1,457

9.6

-17,087

-7.0

8.2

-1,906

-3.7

4.7

796

49.2

2,181

16.9

900

9.1

-211

-7.0

-250

-9.0

229

4.1

-82

-1.9

43

-55

7,712

10.3

-597

7,665

10.4

-1,338

-2.2

47

3.5

741

45.8

10.3

-597

7,712

% of revenues

-1.0

-1.0 % of revenues

4,248

6.5

-1,354

-2.6

-166

-12.4

504

31.1

1,716

13.3

687

6.9

. Media

-413

-13.7

-522

-18.8

. Congresses

-186

-3.3

-459

-10.8

. Adjustments for inter-segment transactions

-17,087

% of revenues

63

- By operating segment:

-6.1

97.4

5,407

Net operating result (EBIT)

-11,806

-7,335

% of revenues

- By operating segment:

2,798

2,155

74,763

Gross operating result

-5,124

67

73.6

Total - By geographic area:

29 7.0

-1,198

5,436

7.4

-1,626

-2.7

-208

-15.6

428

26.5

5,228

7.0

-1,198

-1.9

. Italian Exhibitions

438

52.3

436

56.0

. Foreign Exhibitions

19.7

. Italy . Foreign countries Total

5,228

-54 -1.9

Employees % 433

52.4

205

24.8

53

6.4

98

11.8

37

4.5

826

100.0

621

75.2

205

24.8

826

100.0

(no. of permanent employees at end of period) - By operating segment:

%

%

214

25.5

153

. Stand-fitting Services

54

6.4

57

7.3

. Media

95

11.3

95

12.2

. Congresses

37

4.4

37

4.8

838

100.0

778

100.0

. Italy

624

74.5

625

80.3

. Foreign countries

214

25.5

153

19.7

838

100.0

778

100.0

Total - By geographic area:

Total

Revenues from sales and services, gross of the elimination of transactions between the five operating segments of the Group, were Euro 88.644 million and were higher than

those of the first quarter of 2013 (Euro 70.172 million). -

Revenues from Italian Exhibitions were Euro 65.772 million, an increase of 27% compared with the figure for the same quarter of the previous year (Euro 51.651 million). The increase in revenues is primarily attributable to the increase in exhibition space utilised in the period consistent with the more favourable exhibition calendar, 11

-

-

-

-

which in the quarter under review included the “even-numbered year biennial” exhibition Mostra Convegno Expocomfort. This trend was partly offset by the decrease in demand for exhibition space relating to the directly organised exhibitions HOMI and Bit. Revenues from Foreign Exhibitions were Euro 1.334 million, a decline compared to the figure for the same quarter of the previous year (Euro 1.618 million). This decline is largely attributable to differences in the exhibition calendar which in Brazil involved the postponement of two exhibitions, Food Hospitality World and Pet Show to, respectively, the second and third quarters, the impact of which was partially offset by the second edition of the “Art for me” exhibition in South Africa, an exhibition that did not take place in the same quarter of 2013, and the debut of the new exhibition, Fast, in two editions in Rio de Janeiro and Salvador de Bahia. Revenues from Stand-fitting Services in the quarter totalled Euro 12.938 million, 31% higher than in the same quarter of 2013 (Euro 9.892 million). The increase is largely attributable to the higher volume of stand-fitting activity linked to the more favourable exhibition timetable which included the biennial exhibition Mostra Convegno Expocomfort. Media revenues in the quarter totalled Euro 3.015 million, an increase of 9% compared to the figure for the same period of 2013 (Euro 2.776 million). The increase is primarily due to the increase in revenues from poster advertising linked to the more favourable exhibition timetable. Congress revenues of Euro 5.585 million were 32% higher than in the same quarter of the previous year (Euro 4.235 million). The increase was largely attributable to the presence in the quarter of the Cisco Live and Azimut conventions.

The breakdown by operating segment of the total Group gross operating profit of Euro 7.712 million (negative Euro 0.597 million in the same quarter of the previous year) was as follows: - Italian Exhibitions: generated a gross operating result of Euro 5.407 million compared to negative Euro 1.906 million in the same quarter of the previous year. The improvement is mainly due to the aforementioned increase in exhibition space utilised in the period and to lower doubtful receivables. - Foreign Exhibitions: generated a gross operating result of Euro 0.063 million, which was lower than the Euro 0.796 million reported for the same quarter of the previous year. The decline reflects the trend of revenues described above and an increase in the operating costs of the Brazilian companies Cipa FM and Eurofairs mainly due to the incentivised departure of the General Manager of Cipa following reorganisation of the governance structure. - Stand-fitting Services: delivered a gross operating result of Euro 2.181 million compared to Euro 0.900 million in the same quarter of 2013. The improvement is largely attributable to the previously described trend in revenues. - Media: generated a gross operating result that was negative Euro 0.211 million compared to the negative result of Euro 0.250 million reported for the same quarter of 2013. The difference is mainly attributable to the previously described trend in revenues largely offset by the increase in personnel costs associated with the strengthening of the Digital commercial area. - Congresses: generated a gross operating result of Euro 0.229 million compared to negative Euro 0.082 million in the same quarter of 2013 which reflects the increase in revenues partially offset by higher leasing costs relating to the new MiCo - Milano Congressi congress centre. EBIT for the five operating segments, totalling Euro 5.228 million compared to negative Euro 1.198 million in the same quarter of the previous year, reflects the respective trends of the Gross Operating Result for each segment offset by lower allocation of provisions made by the Parent Company. 12

The first quarter breakdown by geographical area reveals that the revenue contribution from foreign operations was Euro 1.330 million, which was lower than the figure for the same period of the previous year (Euro 1.618 million). The contribution to Gross Operating Result was Euro 0.047 million, a reduction of Euro 0.694 million compared with the same period of the previous year. This decrease reflects the previously described trend of revenues and the increase in the operating costs of the Brazilian companies Cipa FM and Eurofairs largely due to the incentivised departure of the General Manager of Cipa following reorganisation of the governance structure. EBIT was negative Euro 0.208 million and the decrease compared to the same period of last year reflects the deterioration in the Gross Operating Result. Sixteen exhibitions and seven congresses with related exhibition space were held in Italy during the quarter while ten exhibitions were held abroad. These occupied 514,285 square metres of net exhibition space (of which 83,290 square metres abroad) compared with 511,545 square metres (of which 95,060 square metres abroad) in the same period of the previous year. While the number of exhibitors rose from 9,925 in the first quarter of 2013 to 10,730 in the first quarter of 2014. Exhibitions organised by the Group occupied net exhibition space of 187,705 square metres, equating to 36% of the total net exhibition space occupied. Details of the breakdown by exhibition are shown in the following table.

13

Italian exhibition portfolio including congresses with related exhibition space

Annual Exhibitions: - Bit - HOMI first semester - Milano Pret A Porter primavera - Miart Total annual exhibitions directly organised

Net sq. metres of exhibition space

Number of exhibitors

Quarter Quarter Quarter Quarter Quarter Quarter to 31/03/14 to 31/03/13 to 31/03/12 to 31/03/14 to 31/03/13 to 31/03/12

13,750 82,210 2,095 6,360 104,415

23,095 91,590 2,420 a) 117,105

27,235 100,585 4,190 a) 132,010

330 1,275 100 155 1,860

295 1,425 125 a) 1,845

345 1,540 185 a) 2,070

Hosted - Cartoomics - Esposizione Internazionale Canina - Fa la cosa giusta - Festivity - Hobby Show (first semester) - Micam (Spring) - Mido - Mifur - Milano Unica (Spring) - Mipel (March) - Promotion Expo - Promotion Trade Exhibition - Cartexpo - EU.DI.SHOW - Milano Auto Classica Total annual exhibitions hosted

8,000 15,000 8,500 b) 2,705 67,905 38,955 16,885 18,390 12,120 3,195 4,095 b) b) c) 195,750

8,000 15,000 6,000 b) 11,665 67,455 40,575 15,895 19,185 13,520 4,260 4,275 b) 5,320 16,030 227,180

8,000 15,000 b) 13,790 5,000 68,565 40,910 18,045 20,460 14,340 4,205 5,240 3,480 6,650 12,745 236,430

285 45 990 b) 110 1,490 910 190 400 355 140 125 b) b) c) 5,040

240 45 700 b) 280 1,445 880 180 420 385 170 115 b) 120 295 5,275

340 55 b) 85 145 1,475 850 190 440 370 160 130 85 155 200 4,680

Total annual Exhibitions

300,165

344,285

368,440

6,900

7,120

6,750

Biennial Exhibitions: Directly organised - Transpotec & Logitec* Total biennial exhibitions directly organised Hosted - Mostra Convegno Expocomfort - Frameart - Photoshow

-

52,610 52,610

-

-

165 165

-

125,375 -

4,705 6,910

133,710 -

1,550 -

85 75

1,520 -

Total biennial exhibitions hosted

125,375

11,615

133,710

1,550

160

1,520

Total biennial exhibitions

125,375

64,225

133,710

1,550

325

1,520

Multi-annual Exhibitions: Hosted - In Cosmetics - Ipack-Ima

-

-

51,760

-

-

835

Total multi-annual Exhibitions hosted

-

-

51,760

-

-

835

Total multi-annual Exhibitions

-

-

51,760

-

-

TOTAL EXHIBITIONS - Congresses with related exhibition space TOTAL

425,540

408,510

553,910

8,450

7,445

835 9,105

5,455

7,975

7,230

420

395

475

430,995

416,485

561,140

8,870

7,840

9,580

*) The exhibition took place in Verona a) The exhibition was held in subsequent quarters b) The exhibition did not take place c) The exhibition will be held in subsequent quarters

The following table shows details of the foreign exhibitions held in the first quarter of 2014, which comprised the following:

14

Foreign exhibition portfolio Net sq. metres of exhibition space

Annual Exhibitions:

Quarter to 31/03/14

Quarter to 31/03/13

Number of exhibitors

Quarter to 31/03/12

Quarter to 31/03/14

Quarter to 31/03/13

Quarter to 31/03/12

Exhibitions directly organised in China - Chinafloor Domotex Shanghai

59,955

58,540

57,760

1,050

1,120

1,110

- GITF International Tour Guangzhou

6,860

4,970

5,650

210

185

175

- The Micam Shanghai

2,970

d)

-

155

d)

-

69,785

63,510

63,410

1,415

1,305

1,285

Total Exhibitions directly organised in China Exhibitions directly organised in India - Food Hospitality World Mumbai Total Exhibitions directly organised in India

2,390

2,385

2,405

155

125

155

2,390

2,385

2,405

155

125

155

Exhibitions directly organised in Turkey - Beauty & Care Istanbul

5,855

5,535

-

120

105

-

- Home & Garden Istanbul

2,560

2,480

-

70

40

-

- Pro-Show

1,560

1,300

-

15

15

-

9,975

9,315

-

205

160

-

- Capetown Art Fair

710

d)

-

40

d)

-

Total Exhibitions directly organised in South Africa

710

-

-

40

-

-

- Fast Bahia *

250

-

-

25

-

-

- Fast Rio de Janeiro *

180

-

-

20

-

-

- Food Hospitality World

b)

1,970

-

b)

65

-

- Pet Show

b)

770

1,710

b)

65

90

Total Exhibitions directly organised in Turkey Exhibitions directly organised in South Africa

Exhibitions directly organised in Brazil

- Sonotec Total Exhibitions directly organised in Brazil Total Annual Exhibitions

c)

40

-

c)

5

-

430

2,780

1,710

45

135

90

83,290

77,990

67,525

1,860

1,725

1,530

Biennial Exhibitions: Exhibitions directly organised in China - WoodMac China

-

15,950

-

-

250

-

Total Exhibitions directly organised in China

-

15,950

-

-

250

-

Exhibitions directly organised in Singapore - Rehabtech Asia a)

-

1,120

-

-

110

-

Total Exhibitions directly organised in Singapore

-

1,120

-

-

110

-

Total Biennial Exhibitions TOTAL EXHIBITIONS

-

17,070

-

-

360

-

83,290

95,060

67,525

1,860

2,085

1,530

* First edition of this exhibition a) The exhibition is a joint project with the company of Singapore, Singex Exhibitions Ventures Pte Ltd b) The exhibition will be held in subsequent quarters c) The exhibition did not take place d) The exhibition was held in subsequent quarters

15

Group Personnel At 31 March 2014, the Group had 838 employees, which compares as follows with the employee levels at 31 March 2013 and at 31 December 2013. Permanent employees at end of period (units)

31/12/13 Total

Foreign Countries

Italy

31/03/14

Fully consolidated companies:

Total

6 Executives

31/03/13 Foreign Countries

Italy

Total

Foreign Countries

Italy

43

37

44

38

6

42

37

5

730

584

146 Managers and White collar workers (including journalists)

735

586

149

684

588

96

773

621

152 Total

779

624

155

726

625

101

Proportionally consolidated companies

(a) :

2 Executives

2

-

2

-

2

2

-

2

51

-

51 White collar workers

57

-

57

50

-

50

53

-

53 Total

59

-

59

52

-

52

826

621

838

624

214

778

625

153

205 TOTAL (a) the indicated data co rrespo nds to the pro -quo ta o f to tal emplo yees

Compared to 31 December 2013, there was a net increase of twelve full time employees, due primarily to the reinforcement of the commercial operations of the Parent Company, of Fiera Milano Exhibitions Africa and the joint venture with Deutsche Messe AG of Hanover in China and in India.

16

Significant events occurring after the end of the quarter _________________________________________________________________________________ The Ordinary Shareholders’ Meeting of the Parent Company was held on 29 April 2014. It approved the Financial Statements at 31 December 2013 and the decision to cover the loss for the period of Euro 12,663,682.52 by utilising the same amount from the “Share price premium reserve”. It also approved the Report on Remuneration pursuant to Article 123-ter of Legislative Decree 58/98. Finally, the same Shareholder’ Meeting issued a mandate to the independent audit company Reconta Ernst & Young SpA for the legal audit of the reports and accounts of the Fiera Milano Group for the period 2014-2022.

Business outlook The fragile macroeconomic climate in the Euro zone and the absence of significant signs of recovery in the exhibition sector, together with a less favourable exhibitions calendar in 2014 all contribute to the maintenance of a prudent current position and cautious expectations for the coming months. The continuing weakness of domestic demand should, however, be partially compensated by the higher profitability of the newly-acquired foreign companies and by the Universal Exhibition 2015. Finally, the reduction in the leasing contract for the exhibition space will free up resources for investment in initiatives to support and relaunch exhibitions which are expected to generate returns over the medium term.

17

Accounting standards and consolidation criteria __________________________________________________________________________ The 2014 First Quarter Consolidated Interim Management Report of Fiera Milano Group has been prepared in accordance with article 154 ter of Decree Law 58/1998 and the Listing Rules adopted by Consob resolution no. 11971 of 14 May 1999 and all subsequent amendments and additions. The economic, capital and financial data has been prepared in accordance with the reporting and valuation criteria of IAS/IFRS International Accounting Standards issued by the International Accounting Standards Board (IASB) and adopted by the European Union. The criteria governing valuations and revaluations adopted for the preparation of the interim financial statements for the first quarter of 2014 are the same as those adopted for the preparation of the Consolidated Financial Statements for 2013 together with the accounting principles ratified by the European Union and applicable from 1 January 2014, where further detail may be found. Following application of the new accounting principle IFRS 11 Joint arrangements, the figures at 31 March 2013 and for the financial year 2013 have been adjusted. The impact, compared to the figures already published, due to the valuation of the jointly-controlled companies according to the net equity basis was a reduction in the gross operating result of Euro 0.112 million and reduction of EBIT of Euro 0.99 million for the period to March 2013, while for the full year the reduction in the gross operating result was Euro 1.178 million and the reduction in EBIT was Euro 1.121 million. The 2014 First Quarter Consolidated Financial Statements have been prepared on the basis of the accounting records at 31 March 2014 approved by the Boards of Directors of Group companies included in the consolidation, prepared by Group companies included in the consolidation. As regards comparable data, it should be noted that in preparing the First Quarter Consolidated Financial Statements for the period ended 31 March 2014 the tax charge has not been calculated, as permitted by the relevant Consob Rules. It should also be noted that the methodologies used for estimates in the preparation of the First Quarter Consolidated Financial Statements for the period ended 31 March 2014 are substantially the same as those used to prepare the Annual Consolidated Financial Statements. The list of companies included in the area of consolidation at 31 March 2014 is given in Attachment 1. It should be noted that the present Consolidated Interim Management Report has not been subject to legal audit.

18

Financial Statements

Consolidated Income Statement (Amounts in €'000) Full year

1st Quarter

1st Quarter

to 31/12/13

to 31/03/14

to 31/03/13

%

245,057

100

%

Revenues from sales and services

74,763

100

%

62,143

100

3,662

1.5

Cost of materials

831

1.1

867

1.4

128,220

52.3

Cost of services

37,656

50.4

33,009

53.1

63,062

25.7

Costs for use of third party assets

15,758

21.1

15,826

25.5

47,587

19.4

Personnel expenses

12,659

16.9

12,883

20.7

7,631

3.1

2,245

3.0

2,478

4.0

250,162

102.1

69,149

92.5

65,063

104.7

5,088

2.1

Other income

0.9

2,172

0.9

Profit/(loss) of equity-accounted companies

2,155

0.9

Gross operating result

14,145

5.8

Depreciation and amortisation

-1,494

-0.6

Other operating expenses Total operating costs

Allowance for doubtful accounts and other provisions (uses)

6,591

2.7

-17,087

-7.0

Adjustments to asset values Net operating result (EBIT)

816

1.1

557

1,282

1.7

1,766

2.8

7,712

10.3

-597

-1.0

3,197

4.3

3,305

5.3

-713

-1.0

-2,704

-4.4

-

-

-

-

5,228

7.0

-1,198

-1.9

-3,845

-1.6

Financial income/(expenses)

-1,303

-1.7

-999

-1.6

-20,932

-8.5

Profit/(loss) before income tax

3,925

5.2

-2,197

-3.5

-20,821

-8.5

- attributable to the shareholders of the controlling entity

4,063

5.4

-1,956

-3.1

-111

-0.0

-138

-0.2

-241

-0.4

-1,690

-0.7

- attributable to non-controlling interests Cash flow before income tax for the Group and noncontrolling interests

6,409

8.6

-1,596

-2.6

19

Reclassified Consolidated Statement of Financial Position (Amounts in €'000)

Goodwill and intangible assets with an indefinite useful life

A

31/12/13

Change

110,132

109,930

202

Intangible assets with a finite useful life

48,141

49,222

-1,081

Tangible fixed assets

18,642

18,559

83

Other non-current assets

32,538

31,691

847

209,453

209,402

51

4,541

4,006

535

67,165

53,995

13,170

Current assets

71,706

58,001

13,705

Trade payables

40,738

43,830

-3,092

Payments received on account

38,581

37,047

1,534

1,270

2,045

-775

21,234

24,121

-2,887

Non-current assets Inventory and contracts in progress Trade and other receivables

B

31/03/14

Tax liabilities Provisions for risks and charges and other current liabilities C

Current liabilities

101,823

107,043

-5,220

D

Net working capital (B - C)

-30,117

-49,042

18,925

E

Gross capital employed (A + D)

179,336

160,360

18,976

9,301

9,202

99

14,819

14,833

-14

24,120

24,035

85

155,216

136,325

18,891

Employee benefit provisions Provisions for risks and charges and other non-current liabilities F

Non-current liabilities

G

NET CAPITAL EMPLOYED continuing operations (E - F)

H

NET CAPITAL EMPLOYED discontinued operations TOTAL NET CAPITAL EMPLOYED (G + H)

155,216

-

-

136,325

18,891

34,650

4,302

covered by: Equity attributable to the Group Equity attributable to Shareholders of the controlling entity I

2,812

204

Total equity

41,968

37,462

4,506

Cash & cash equivalents

-17,288

-11,416

-5,872

3,016 (*)

Current financial (assets)/liabilities

92,155

75,388

16,767

Non-current financial (assets)/liabilities

38,381

34,891

3,490

113,248

98,863

14,385

Net financial position (continuing operations) Net financial position (discontinued operations) L

38,952 (*)

-

-

-

Net financial position (TOTAL)

113,248

98,863

14,385

EQUITY AND NET FINANCIAL POSITION (I + L)

155,216

136,325

18,891

(*) includes pre-tax result for the period

20

Comments on the capital and financial position Non-current assets at 31 March 2014 totalled Euro 209.453 million compared to Euro 209.402 million at 31 December 2013. The increase of Euro 0.051 million relates to the balance of investments of Euro 1.841 million, positive translation differences of Euro 0.576 million, revaluation of investments under the equity method of Euro 1.232 million, depreciation and amortisation of Euro 3.197 million and other negative changes totalling Euro 0.401 million. Investments refer primarily to the purchase by Nolostand SpA of assets and equipment for the construction of custom exhibition stands for rental and to refurbishment costs by Fiera Milano Congressi for the MiCo congress centre at Fiera Milano Congressi SpA. The net capital for the period went from a negative figure of Euro 49.042 million at 31 December 2013 to a negative figure of Euro 30.117 million at 31 March 2014. The difference of Euro 18.925 million was due to the following: (a)

An increase of Euro 13.705 million in Current assets due to the net effect of: -

-

(b)

An increase of Euro 13.170 million in trade and other receivables, that reflected the increase in accruals of the Parent Company for the rent payable in the 2nd quarter for the two exhibition sites, which was paid in advance in January, and also the trend in exhibition invoices and payments in the quarter; An increase in inventories and work in progress of Euro 0.535 million, which was the balance of an increase in deferred costs in the quarter for exhibitions taking place in subsequent quarters and a decrease in deferred costs from previous quarters that were for the exhibitions held in the first quarter of 2014.

A decrease of Euro 5.220 million in Current liabilities, due to the net effect of: - A decrease in trade payables of Euro 3.092 million; - An increase in pre-payments of Euro 1.534 million, which was the balance of the increase in pre-payments invoiced to clients for exhibitions that will take place in subsequent quarters (in particular the Salone del Mobile) and reductions for exhibitions that took place in the first quarter of 2014 (in particular HOMI, Mostra Convegno Expocomfort); - A decrease of Euro 0.775 million in tax liabilities, primarily due to the payment of withholding taxes on employment contracts in the month of December; - A decrease in reserves for risks and charges and other current liabilities of Euro 2.887 million mainly due to lower payables to organisers.

Non-current liabilities at 31 March 2014 totalled Euro 24.120 million compared to Euro 24.035 million at 31 December 2013. The increase of Euro 0.085 million is mainly due to provisions for employees. The Group equity at 31 March 2014 was Euro 38.952 million compared to Euro 34.650 million at 31 December 2013 an increase of Euro 4.302 million attributable to: Euro 4.063 million relating to the Pre-tax profit for the period; Exchange rate differences of Euro 0.239 million.

21

The equity attributable to non-controlling interests at 31 March 2014 was Euro 3.016 million compared to Euro 2.812 million at 31 December 2013. The increase of Euro 0.204 million is attributable to: A reduction of Euro 0.138 million for the result for the period; Capital increases of Euro 0.281 million; Positive exchange rate differences of Euro 0.061 million. ***

Declaration of the Manager responsible for preparing the Company’s Financial Statements The Manager responsible for preparing the Company’s Financial Statements, Flaminio Oggioni, in accordance with paragraph 2 of Article 154 bis of the Consolidated Finance Act, herewith declares that the accounting information in the present Interim Management Report is consistent with the Company’s official documents, books and accounting records.

***

22

ATTACHMENT 1 List of companies included in the area of consolidation and other equity investments at 31 March 2014

Company name and registered office

Share capital (000) (*)

Shareholding % Directly held by Group Fiera total Milano

Shareholding of Group companies Indirectly held through other Group companies

%

A) List of companies included in the area of consolidation Parent Company Fiera Milano SpA Milan, p.le Carlo Magno 1 Fully consolidated companies Fiera Milano Media SpA Milan, p.le Carlo Magno 1 Fiera Milano Congressi SpA Milan, p.le Carlo Magno 1 Nolostand SpA Milan, p.le Carlo Magno 1 Eurofairs International Consultoria e Participações Ltda São Paulo Brasil, Rua Padre João Manoel 755 CIPA FM Publicações e Eventos Ltda São Paulo Brasil, Rua Correia Lemos, 158 Fiera Milano India Pvt Ltd New Delhi, Barakhamba Road Limited Liability Company Fiera Milano Moscow, Cherkizovskaya FM Interteks Uluslararası Fuarcılık Anonim Şirketi Istanbul, Mim Kemal Öke Cad. N:6 Nişantaşı Fiera Milano Exhibitions Africa Pty Ltd Cape Tow n, The Terraces, Steemberg Office Park, Tokai Worldex (China) Exhibition & Promotion Ltd Guangzhou, 538 Dezheng Bei Road, Yuexiu District Haikou Worldex Milan Exhibition Co. Ltd Haikou, 12 Lantian Road W est

42,147

2,803

100

100

100

Fiera Milano SpA

2,000

100

100

100

Fiera Milano SpA

7,500

100

100

100

Fiera Milano SpA

R $ 36,014

100

99.98

R $ 941

75

INR 20,000

99.99

99.99

99.99

Fiera Milano SpA

RUB 10,000

100

100

100

Fiera Milano SpA

TRY 4,646

60

60

60

Fiera Milano SpA

ZAR 100

75

75

75

Fiera Milano SpA

CNY 5,380

75

75

75

Fiera Milano SpA

CNY 200

74.25

99

Worldex Ltd

25

49

49

Fiera Milano SpA

0.02 75

99

99.98 Fiera Milano SpA 0.02 Nolostand SpA Eurofairs International Consultoria e Participações 75 Ltda

B) List of jointly controlled companies equity-accounted Hannover Milano Global Germany GmbH Hannover Germany, Messegelaende Hannover Milano Fairs Shanghai Co. Ltd Shanghai China, Pudong Office Tower Hannover Milano Fairs China Ltd Hong Kong China, Golden Gate Building Hannover Milano Fairs India Pvt Ltd East Mumbai, Andheri Global Fairs & Media Private Ltd New Delhi, Bahadur Shah Zafar Marg 9-10 Milan International Exhibitions Srl under liquidation Rho, S.S.Sempione 28

49

USD 500

49

100

100

Hannover Milano Global Germany GmbH

HKD 10

49

100

100

Hannover Milano Global Germany GmbH Hannover Milano Global Germany GmbH

INR 274,640

48.99

99.99

99.99

INR 207,523

24.5

50

50

Hannover Milano Fairs India Pvt Ltd

120

20

20

Fiera Milano SpA

20

C) Companies accounted at cost Esperia SpA Rose (Cose Rose (Cosenza) Uktas Uluslararasi Kongre Sarayi Tesisleri Isletmeciligi Tic. A.Ş. Instanbul

1,403

2

2

2

TRY 17,700

0.07

0.07

0.07

Fiera Milano Media SpA Fiera Milano Interteks Uluslararası Fuarcılık A.Ş.

(*) Euro or other currencies as specifically indicated

23