Consolidated interim management report 1Q2017

Business model page 4 Group structure page 5 Report on operations in the first quarter Summary of results and significant events during the quarter pa...

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Consolidated Interim Management Report at 31 March 2017 (1st quarter 2017)

This document is available in the Investor Relations section of the Company website, www.fieramilano.it

This document contains a faithful translation in English of the original report in Italian “Resoconto intermedio di gestione consolidato al 31 marzo 2017”. However, for information about Fiera Milano Group reference should be made exclusively to the original report in Italian. The Italian version of the “Resoconto intermedio di gestione consolidato al 31 marzo 2017” shall prevail upon the English version.

Fiera Milano SpA Registered office: Piazzale Carlo Magno, 1 - 20149 Milan Operational and administrative office: SS del Sempione, 28 - 20017 Rho (Milano) Share capital: Euro 42,445,141.00 fully paid up Companies Register, Tax code and VAT no. 13194800150 - Economic Administrative Register 1623812

Rho (Milan), 15 May 2017

Contents __________________________________________________________________________________

▪ Corporate bodies and independent auditor

page

3

▪ Business model

page

4

▪ Group structure

page

5

▪ Report ▫ ▫ ▫ ▫

page page page page

6 9 10 14

▪ Significant events after the end of the quarter

page

15

▪ Business outlook

page

15

▪ Accounting criteria

page

16

▪ Financial Statements ▫ Consolidated income statement ▫ Reclassified consolidated statement of financial position ▫ Comments on the capital and financial position

page page page

17 18 19

page

20

page

21

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 investments at 31 March 2017

2

Corporate bodies and independent auditor __________________________________________________________________________ BOARD OF DIRECTORS Lorenzo Caprio Marina Natale Alberto Baldan Stefania Chiaruttini Gianpietro Corbari Francesca Golfetto Angelo Meregalli Elena Vasco

Chairperson* Chief Executive Officer Director* Director* Director* Director* Director* Director*

* Independent director under Article 148, paragraph 3 of Legislative Decree no. 58 of 24 February 1998 and under the SelfRegulatory Code of the Italian Stock Exchange.

CONTROL AND RISK COMMITTEE

COMMITTEE FOR APPOINTMENTS AND REMUNERATION

Lorenzo Caprio Stefania Chiaruttini Francesca Golfetto Angelo Meregalli

Gianpietro Corbari Alberto Baldan Elena Vasco MANAGER RESPONSIBLE FOR PREPARING THE COMPANY’S FINANCIAL STATEMENTS UNDER LAW 262/2005

BOARD OF STATUTORY AUDITORS Federica Palmira Nolli Antonio Guastoni Carmine Pallino Francesca Maria D’Alessandro Alessandro Carlo Galli

Chairperson Statutory Auditor Statutory Auditor Substitute Auditor Substitute Auditor

Sebastiano Carbone

--The Board of Directors was appointed at the Shareholders’ Meeting of 21 April 2017 and their mandates expire with the Shareholders’ Meeting to approve the Financial Statements at 31 December 2019. The Board of Statutory Auditors was appointed at the Shareholders’ Meeting of 29 April 2015 and their mandates will expire with the Shareholders Meeting to approve the Financial Statements at 31 December 2017. The Board of Directors is invested with the widest powers for the ordinary and extraordinary management of the Company. In particular, it is empowered to do everything that it considers to be appropriate or useful to achieve its corporate objectives, excluding only those which by law are the preserve of the Shareholders’ Meeting. The Chairperson, in addition to legally representing the Company, has all the powers provided by prevailing laws and the Articles of Association. The Chief Executive Officer has full powers relating to the ordinary management and administration of the Company, with the exception of the powers that, according to prevailing laws and the Articles of Association, are the preserve of the Board of Directors.

INDEPENDENT AUDITOR

EY 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 characteristic phases of the exhibition and congress sector and is one of the world’s leading international integrated companies in this sector. Its operating segments are: -

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. 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 those associated with the organisation of events and congresses.

-

Congresses: this segment covers the management of conferences, events and “destination management” services.

4

Group structure

On 24 April 2017 the Group completed the sale of 75% shareholding in Worldex Fiera Milano Exhibitions Co., Ltd and its subsidiary Haikou Worldex Milan Exhibition Co., Ltd.

5

Report on operations in the first quarter Summary of results and significant events during the quarter The following table gives the main figures of the Group for the first quarter 2017 with comparable data for the same quarter of the previous year, as well as figures for the full year 2016. Full year 31/12/16

Fiera Milano Group Summary of key figures

1° Quarter 31/03/17

(Amounts in € ‘000) 221,041

re s t a t e d

65,396

76,890

Gross operating result (a)

8,819

18,427

(22,994)

Net operating result (EBIT)

6,375

16,058

(23,979)

Profit/(loss) before income tax of continuing operations

6,168

15,829

3,652

(4,151) (28,130) (28,051) (79) (1,484) 99,995

Revenues from sales and services

1° Quarter 31/03/16

Profit/(loss) before income tax of discontinued operations

-

(172)

Profit/(loss) before income tax

6,168

15,657

- Attributable to the shareholders of the controlling entity

6,246

15,742

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

(78)

(85)

8,612

18,026

81,205

123,009

covered by: 61,006 673 38,316 7,387 725

Equity attributable to the Group Non-controlling interests Net financial debt/(cash) continuing operations and assets held for sale Investments (continuing operations and assets held for sale) Employees (no. of permanent employees at the end of period)

67,253 * 611 *

99,664 * 510 *

13,341

22,835

1,660

2,258

727

717

* includes pre-tax result fo r the perio d (a) Gro ss o perating pro fit is the o perating result befo re depreciatio n and amo rtisatio n, adjustments to asset values and o ther pro visio ns. (b) Cash flo w is the sum o f the result fo r the perio d, depreciatio n and amo rtisatio n, pro visio ns and adjustments to asset values. (c) Net capital emplo yed is the sum o f no n-current assets, no n-current liabilities and net wo rking capital. So me figures in the co nso lidated financial statements at 31M arch 2016 have been restated to reflect the acco unting o f the Chinese co mpanies, Wo rldex and Haiko u Wo rldex, under IFRS 5.

The results for the quarter under review reveal a positive business trend, in line with the Company’s expectations, although below the results for the corresponding period of 2016, mainly due to the different exhibition calendar which in the first quarter of the previous year included Convegno Expocomfort, the leading international biennial exhibition for civil and industrial plant. The impact of this calendar was partially offset by the positive trend of the annual hosted exhibitions including LineaPelle and the related exhibition Simac Tanning-Tech dedicated to technology for the footwear and leather apparel production sectors, and also Milano Unica, dedicated to textile and clothing accessory collections. It should also be noted that the first quarter results also reflect the contribution of the Promotion Trade Exhibition, an annual international exhibition for promotional goods, corporate gifts and personalisation, which was directly organised for the first time by Fiera Milano, which resulted in an improved performance for the exhibition. Amongst the Group’s international operations was the signing, on 22 February 2017, of a contract to sell the Group’s 75% shareholding in Worldex Fiera Milano Exhibitions Co., Ltd., which operates in China. The terms of divestment are an initial disposal price of Euro 2.750 million, plus a deferred component of up to Euro 1.000 million linked to the achievement of target results over the three year period 2017-2019. Completion of the deal took place on 24 April 2017 with the issue of a new business license by the relevant Chinese authorities. This disposal is consistent with the objective of concentrating all of the Group’s activities in China in its joint venture with its German partner Deutsche Messe. 6

Administration Orders

With an order issued on 23 June 2016 and deposited on 24 June 2016, the Milan District CourtPrevention Court Independent Section, issued, under Article 34 of the Legislative Decree of 6 September 2011 no. 159 pertaining to the “anti-mafia laws and prevention measures, including new provisions covering anti-mafia documentation in accordance with Articles 1 and 2 of Legislative Decree of 13 August 2010 no. 136”, an Administration Order for Nolostand for a period of six months. On 6 July 2016 the Milan Tax Squad notified Nolostand SpA of the aforementioned Administration Order. With an order issued on 28 September 2016 and deposited on 11 October 2016, the Milan District Court – Prevention Court Independent Section issued, under Article 34 of the Legislative Decree 159/2011 an Administration Order for Fiera Milano SpA for a period of six months limited to the business area linked to Nolostand, involving the stand-fitting business division. On 20 December 2016 the Administration Order for Nolostand was extended for a further six months and the Orders of Nolostand and Fiera Milano were also unified. On 28 March 2017 the Milan District Court – Prevention Court Independent Section extended for a further six months the Administration Order relating to the Company’s exhibition stand-fitting business division which had been scheduled to expire on 11 April 2017. The activities of the Group are highly seasonal due to the impact of biennial exhibitions. Given the seasonal nature of the Group’s 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 2017 reveals the following trends: -

Revenues from sales and services totalled Euro 65.396 million compared to the result for

the same quarter of the previous year (Euro 76.890 million). A detailed analysis of the main changes in the quarter is shown below: Annual exhibitions organised by the Group in Italy (-5,480 square metres): the decline was mainly attributable to the absence of the exhibition Bit (-13,505 square metres) which took place in the second quarter. This was partially compensated by an increase in demand for exhibition space for HOMI I semester (+5,905 square metres) and the presence in the period of the annual international exhibition for promotional goods, Promotion Trade Exhibition (+4,355 square metres) which was for the first time organised by Fiera Milano Group; Annual exhibitions organised by third parties in Italy (-17,675 square metres): the decline was primarily due to the absence of the exhibition Esposizione Internazionale Canina and the postponement of Milano Auto Classica to later quarters. This effect was partly compensated by the presence of the exhibition MAM – Mostra a Milano Arte e Antiquariato, which took place for the first time in the fieramilanocity exhibition area, as well as an improvement in the exhibitions Milano Unica Spring edition, My Plant & Garden, LineaPelle February edition and Simac Tanning-Tech. Biennial exhibitions organised by the Group in Italy (+56,765 square metres): the difference is attributable to the biennial exhibition held in uneven-numbered years Transpotec Logitec; Biennial exhibitions organised by third parties in Italy (-65,335 square metres): the difference is primarily due to the absence of the biennial exhibition held in evennumbered years Mostra Convegno Expocomfort (-118,395 square metres) partially compensated by the presence of the biennial exhibition held in uneven-numbered years Made Expo (+52,515 square metres); Congresses with related exhibition areas reported an increase of 1,600 square metres; Annual exhibitions organised by the Group abroad (+8,105 square metres): the increase is mainly due to the Chinese exhibition Chinafloor Domotex Shanghai. 7

The table below gives a summary of the net square metres of exhibition space occupied by the various Fiera Milano Group exhibitions and by congresses with related exhibition space. Fiera Milano Group Summary operating figures

1st Quarter 2017

1st Quarter 2016

of which organized Total

by the Group

Change

of which organized Total

by the Group

of which organized Total

Number of exhibitions:

21

7

23

7

(2)

by the Group

-

Italy

17

3

19

3

(2)

-

. annual

14

2

18

3

(4)

(1)

. biennial

3

1

1

-

2

1

. multi-annual

-

-

-

-

-

-

Foreign countries

4

4

4

4

-

-

. annual

4

4

4

4

-

-

. biennial

-

-

-

-

-

-

. multi-annual

-

-

-

-

-

-

6

-

9

-

(3)

-

Net sq.metres of exhibition space:

553,590

231,035

575,610

171,645

(22,020)

59,390

Italy

51,285

Number of congresses with related exhibition space - Italy

467,365

144,810

497,490

93,525

(30,125)

. annual (a)

357,540

88,045

379,095

93,525

(21,555)

(5,480)

. biennial

109,825

56,765

118,395

-

(8,570)

56,765

-

-

-

-

-

-

5,240

-

3,640

-

1,600

-

86,225

86,225

78,120

78,120

8,105

8,105

86,225

86,225

78,120

78,120

8,105

8,105

. biennial

-

-

-

-

-

-

. multi-annual

-

-

-

-

-

-

. multi-annual (a) o f which co ngresses with related exhibitio n space

Foreign countries . annual

Number of exhibitors: Italy

11,365

3,655

12,000

3,500

(635)

155

9,515

1,805

10,270

1,770

(755)

35

. annual (b)

8,330

1,560

8,730

1,770

(400)

(210)

. biennial

1,185

245

1,540

-

(355)

245

-

-

-

-

-

-

380

-

225

-

155

-

. multi-annual (b) o f which co ngresses with related exhibitio n space

Foreign countries

1,850

1,850

1,730

1,730

120

120

1,850

1,850

1,730

1,730

120

120

. biennial

-

-

-

-

-

-

. multi-annual

-

-

-

-

-

-

. annual



The gross operating profit for the quarter was Euro 8.819 million, a decline of Euro 9.608 million compared with the result reported for the same quarter of the previous year (Euro 18.427 million). The gross operating profit in 2017 reflects the trend of revenues and the higher consultancy costs arising from the review of company processes as a consequence of the procedures relating to the ongoing Administration Order.



The net operating profit (EBIT) for the quarter was Euro 6.375 million compared to Euro 16.058 million in the first quarter of 2016. The decline of Euro 9.683 million is mainly due to the aforementioned reduction in gross operating profit.



The profit before income tax was Euro 6.168 million compared to Euro 15.657 million in the first quarter of 2016. The profit before income tax attributable to the shareholders of the controlling entity was Euro 6.246 million (Euro 15.742 million in the first quarter of 2016) while there was a loss before income tax of Euro 0.078 million attributable to noncontrolling interests (loss of Euro 0.085 million in the first quarter of 2016).



Finally, cash flow in the quarter (calculated as the result before income tax plus depreciation, amortisation, provisions and adjustments to asset values) was Euro 8.612 million compared to Euro 18.026 million in the same quarter of the previous financial year. 8

Net financial position A breakdown of the Group net financial position is shown in the following table. Group Net Financial Position 31/12/16 20,904

(Amounts in € '000)

A. Cash (including bank balances)

31/03/17 37,166

-

B. Other cash equivalents

-

-

C. Securities held for trading

-

20,904

D. Cash and cash equivalents (A+B+C)

2,622

E. Current financial assets

2,622

- E.1 of which Other non current liabilities to other related parties

37,166 2,632

2,632

18,019

F. Current bank borrowings

15,189

27,523

G. Current portion of non-current debt

25,278

3,364

1,627 876

H. Other current financial liabilities

- H.1 of which Other current financial liabilities to the controlling shareholder - H.2 of which Other current financial liabilities to other related parties

48,906

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

25,380

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

14,108 42

42

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

- M.1 of which Other non current liabilities to other related parties

4,545

2,796 876 45,012 5,214 9,299 42

42

14,150

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

9,341

39,530

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

14,555

(1,214)

Net financial debt/(cash) from assets held for sale

(1,214)

38,316

O. Net financial debt/(cash)

13,341

Net financial debt at 31 March 2017 was Euro 13.341 million compared to Euro 38.316 million at 31 December 2016. The decrease of Euro 24.975 million in net financial debt is attributable to the positive cash flow in the quarter and the positive change in cash flows arising from net working capital, principally as a result of advances for exhibitions that are to take place in later quarters.

9

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

(Amounts in € '000)

2016

1st Quarter

1st Quarter

31/03/17

31/03/16

restated

68,019

74.9

Revenues from sales and services % 173,421

66.6

6,830

2.7

38,295

14.7

11,051

4.1

30,672

11.8

260,269

100.0

- By operating segment: . Italian Exhibitions . Foreign Exhibitions

% 58,216

75.9

%

518

0.7

343

0.4

. Stand-fitting Services

9,811

12.8

15,378

16.9

. Media

2,472

3.2

2,873

3.1

. Congresses

5,706

7.4

4,231

4.7

76,723

100.0

90,844

100.0

Total revenues gross of adjustments for inter-segment transactions

(39,228)

. Adjustments for inter-segment transactions

221,041

Total revenues net of adjustments for inter-segment transactions

(11,327)

(13,954)

65,396

76,890

- By geographic area: 214,239

96.9

6,802 221,041

3.1 100.0 % on revenues

. Italy . Foreign countries Total

64,878

99.2

76,573

99.6

518 65,396

0.8 100.0

317 76,890

0.4 100.0

Gross operating result

% on revenues

- By operating segment:

(3,092)

-1.8

. Italian Exhibitions

1,781

26.1

. Foreign Exhibitions

% on revenues

7,902

13.6

14,889

21.9

983

189.8

920

268.2

3,033

7.9

. Stand-fitting Services

561

5.7

2,990

19.4

376

3.4

. Media

(248)

-10.0

(43)

-1.5

2,274

7.4

. Congresses

(379) -

-6.6

(294)

-6.9

8,819

13.5

18,427

7,844

12.1

17,590

23.0

975

188.2 13.5

837

264.0 24.0

(720) 3,652

. Adjustments for inter-segment transactions 1.7

Total

(35) 24.0

- By geographic area: 2,523

1.2

1,129

16.6 1.7

3,652

% on revenues (15,234)

-8.8

(4,507)

-66.0

493

1.3

(4,103)

-37.1

1,133

3.7

(776) (22,994)

. Italy . Foreign countries Total - By operating segment: . Italian Exhibitions . Foreign Exhibitions . Stand-fitting Services

18,427

%

%

on revenues

on revenues

6,614

11.4

13,595

20.0

729

140.7

706

205.8 16.9

122

1.2

2,604

. Media

(371)

-15.0

(260)

-9.0

. Congresses

(703)

-12.3

(540)

-12.8

9.7

16,058

5,670

8.7

15,447

20.2

705

611

6,375

136.1 9.7

16,058

192.7 20.9

. Italian Exhibitions

414

57.0

418

58.3

. Foreign Exhibitions

. Adjustments for inter-segment transactions -10.4

8,819

Net operating result (EBIT)

Total

(16) 6,375

(47) 20.9

- By geographic area: (17,779)

-8.3

(5,215)

-76.7 -10.4

(22,994)

. Italy . Foreign countries Total Employees (no. of permanent employees at the end of the period)

%

- By operating segment:

%

%

416

57.4

141

19.4

145

20.0

142

19.8

57

7.9

. Stand-fitting Services

57

7.8

53

7.4

63

8.7

. Media

62

8.5

68

9.5

48

6.6

. Congresses

49

6.7

36

5.0

725

100.0

727

100.0

717

100.0

584

80.6

582

80.1

575

80.2

141 725

19.4 100.0

145 727

19.9 100.0

142 717

19.8 100.0

Total - By geographic area: . Italy . Foreign countries Total

Some figures in the consolidated financial statements at 31 March 2016 have been restated to reflect the accounting of the Chinese companies, W orldex and Haikou W orldex, under IFRS 5.

Revenues from sales and services, before elimination of transactions among the five business segments of the Group, were Euro 76.723 million, representing a decrease of Euro 14.121 million compared to the first quarter of 2016.

10

Revenues from Italian Exhibitions in the first quarter were Euro 58.216 million, a decrease of about 14% compared to the figure for the same period of the previous financial year (Euro 68.019 million). The decline in revenues mainly reflects the less favourable exhibition calendar owing to the absence of the important biennial exhibition held in even-numbered years Mostra Convegno Expocomfort and for the postponement of Bit to the second quarter. The impact of this was partly offset by the presence of the exhibitions held in unevennumbered years Made Expo and Transpotec & Logitec and from the positive results of the directly organised exhibitions HOMI and Promotion Trade Exhibition, the latter of which was a hosted exhibition in 2016. - Revenues from Foreign Exhibitions in the first quarter were Euro 0.518 million, an increase compared to the result for the same period of the previous financial year (Euro 0.343 million). The change is mainly due to higher demand for exhibition space at the exhibition Cape Town Art Fair. - Revenues from Stand-fitting Services in the first quarter were Euro 9.811 million representing a decrease of about 36% compared to the figure for the same period of 2016 (Euro 15.378 million). The difference mainly reflects the negative impact of the different exhibition calendar as well as the absence of revenues linked to the dismantling of structures associated with Expo 2015 which occurred in the same quarter of last year. - Revenues in the Media segment in the first quarter totalled Euro 2.472 million, showing a decline of about 14% compared to the figure for the same period of 2016 (Euro 2.873 million). The difference is primarily due to the absence of the biennial exhibition held in evennumbered years Mostra Convegno Expocomfort and to lower revenues from the education market. - Revenues from Congresses in the first quarter totalled Euro 5.706 million compared to Euro 4.231 million in the same period of 2016. The increase is to a large extent due to the trend of congresses and conventions amongst which the most important are: Identità Golose 2017, Allianz Bank 2017, Milanofil and Festival dell’Oriente. The Group Gross operating profit in first quarter 2016 was Euro 8.819 million revealing a reduction compared to the figure for the first quarter of 2016 (Euro 18.427 million). The breakdown by operating segment was as follows: - Italian Exhibitions: had a gross operating profit of Euro 7.902 million compared to Euro 14.889 million in the same period of the previous financial year. The difference is primarily related to the trend of revenues and to the higher consultancy costs arising from the review of company processes as a consequence of the procedures relating to the ongoing Administration Order. - Foreign exhibitions: generated a gross operating profit of Euro 0.983 million representing an improvement on the Euro 0.920 million reported for the first quarter of 2016. - Stand-fitting services: had a gross operating profit of Euro 0.561 million compared to Euro 2.990 million in the same period of the previous year. The decline in the sector was mainly due to the trend of revenues described previously. - Media: produced a gross operating loss of Euro 0.248 million which was a deterioration compared to the loss of Euro 0.043 million reported for the same quarter of 2016. The decline in the quarter was mainly due to the trend of revenues described above. - Congresses: generated a gross operating loss of Euro 0.379 million compared to a loss of Euro 0.294 million for the same quarter of 2016. The decline is primarily attributable to the reduction in “other income” which in the same period of last year benefited from insurance settlements relating to damage to the congress centre MiCo Nord. The Net operating profit (EBIT) of the five operating segments in the first quarter 2017 was Euro 6.375 million compared to Euro 16.058 million in the same period of the previous year, which reflects the trend of the gross operating profit. -

The breakdown by geographic area in the first quarter reveals that revenues from foreign activities was Euro 0.518 million representing an increase of about 63% compared to the figure 11

for the same period of the previous year (Euro 0.317 million). The Gross operating profit was Euro 0.975 million representing an improvement over the same period of the previous year of Euro 0.138 million. The Net operating profit (EBIT) was Euro 0.705 million compared to the result for the same period of the previous year of Euro 0.611 million. During the quarter under review, seventeen exhibitions and six congresses with related exhibition space were held in the two sites of fieramilano and fieramilanocity. Net exhibition space occupied totalled 467,365 square metres compared to 497,490 square metres in the same period of the preceding financial year, whilst the number of exhibitors fell from 10,270 in the first quarter of 2016 to 9,515 in the first quarter of 2017. Exhibitions directly organised by the Group in Italy and abroad occupied 231,035 square metres of net exhibition space, equal to about 42% of the total space occupied. Details of exhibitions held in Italy are given in the following table. Italian exhibition portfolio Net sq. metres of exhibition space

Annual Exhibitions: Directly organised - HOMI I semester - Promotion Trade Exhibition - Bit - Milano Pret A Porter spring Total annual exhibitions directly organised Hosted - Cartoomics - Fa la cosa giusta - Hobby Show (I semester) - LineaPelle (February) - MAM - Mostra a Milano Arte e Antiquariato* - Mido - Milano Unica (spring) - Mipel (March) - My Plant & Garden - Simac Tanning-Tech - The Micam (spring) - The ONE Milano (February)* - Milano Auto Classica - Promotion Trade Exhibition - Esposizione Internazionale Canina - Mifur - Super (spring) - Technology Hub (3D Print Hub) Total annual exhibitions hosted Total annual Exhibitions Biennial Exhibitions: Directly organised - Transpotec & Logitec** Total biennial exhibitions directly organised Hosted - Made Expo - Farmacistapiù - Mostra Convegno Expocomfort Total biennial exhibitions hosted

Number of exhibitors

Quarter to 31/03/17

Quarter to 31/03/16

Quarter to 31/03/15

Quarter to 31/03/17

Quarter to 31/03/16

Quarter to 31/03/15

83,690 4,355 b) d) 88,045

77,785 a) 13,505 2,235 93,525

81,200 a) 15,335 2,775 99,310

1,425 135 b) c) 1,560

1,285 a) 380 105 1,770

1,305 a) 405 130 1,840

10,495 10,285 1,610 46,665 2,200 48,015 27,415 7,980 17,065 17,205 61,705 13,615 b) a) c) d) c) b) 264,255

8,310 9,350 1,815 43,710 46,260 18,165 8,305 13,855 14,900 63,425 20,965 4,515 15,000 12,080 1,275 b) 281,930

9,855 7,845 3,425 41,640 43,645 18,020 10,060 9,330 15,200 67,075 16,440 4,235 c) 13,350 1,600 2,500 264,220

340 700 65 1,200 35 1,190 365 250 450 245 1,330 220 b) a) c) c) c) b) 6,390

310 695 90 1,155 1,075 390 250 345 220 1,425 290 140 50 150 150 b) 6,735

190 630 115 945 990 380 285 285 275 1,425 245 130 c) 170 180 80 6,325

352,300

375,455

363,530

7,950

8,505

8,165

56,765 56,765 52,515 545 -

118,395

b) 57,005 b) -

245 245

-

b) -

910 30 -

1,540

910 b) 910

53,060

118,395

57,005

940

1,540

Total biennial Exhibitions

109,825

118,395

57,005

1,185

1,540

910

TOTAL EXHIBITIONS

462,125

493,850

420,535

9,135

10,045

9,075

- Congresses with related exhibition space TOTAL

5,240

3,640

7,750

380

225

510

467,365

497,490

428,285

9,515

10,270

9,585

* The exhibition was held for the first time at Fiera Milano exhibition sites. ** The exhibition was held at Veronafiere exhibition site. a) The exhibition since 2017 is organised by the Fiera Milano Group. b) The exhibition will take place/was held in subsequent quarters. c) The exhibition did not take place. d) The exhibition since 2017 is included in The ONE Milano.

12

During the first quarter 2017 four exhibitions were held in exhibition sites abroad and the net exhibition space occupied totalled 86,225 square metres (in the first quarter of 2016 the figure was 78,120 square metres). The number of exhibitors was 1,850 (compared to 1,730 in the first quarter of 2016). Details of the exhibitions organised abroad are given in the following table. Foreign Exhibition portfolio Net sq. metres of exhibition space

Quarter to 31/03/17

Quarter to 31/03/16

Number of exhibitors

Quarter to 31/03/15

Quarter to 31/03/17

Quarter to 31/03/16

Quarter to 31/03/15

Annual Exhibitions: Directly organised in China - Chinafloor Domotex Shanghai - GITF International Tour Guangzhou

72,180

65,375

63,985

1,365

1,305

8,000

7,875

5,180

240

195

215

a)

a)

2,900

a)

a)

150

80,180

73,250

72,065

1,605

1,500

1,625

- The Micam Shanghai 1° semestre Total annual exhibitions directly organised in China

1,260

Directly organised in India - Food Hospitality World Mumbai

2,970

2,840

3,195

150

180

175

Total annual exhibitions directly organised in India

2,970

2,840

3,195

150

180

175

Directly organised in South Africa - Cape Town Art Fair

3,075

2,030

1,100

95

50

40

Total annual exhibitions directly organised in South Africa

3,075

2,030

1,100

95

50

40

a)

a)

1,375

a)

a)

55

-

-

1,375

-

-

55 140

Directly organised in Brasile - Food Hospitality World Total annual exhibitions directly organised in Brasile Directly organised in Turkey - Beauty & Care Istanbul

b)

b)

5,670

b)

b)

- Home & Garden Istanbul

b)

b)

-

b)

b)

-

- Pro-Show

b)

b)

1,430

b)

b)

20

Total annual exhibitions directly organised in Turkey Total annual exhibitions

-

-

7,100

-

-

160

86,225

78,120

84,835

1,850

1,730

2,055

Biennial Exhibitions: Directly organised in China - WoodMac China Total biennial exhibitions directly organised in China

a)

-

9,565

a)

-

80

-

-

9,565

-

-

80

Directly organised in Singapore - Rehabtech Asia °

a)

-

785

a)

-

45

-

-

785

-

-

45

-

-

10,350

-

-

125

86,225

78,120

95,185

1,850

1,730

2,180

Total biennial exhibitions directly organised in Singapore Total biennial exhibitions TOTAL EXHIBITIONS

° The exhibition is a joint project with the Singaporean company Singex Exhibitions Ventures Pte Ltd. a) The exhibition did not take place. b) The Turkish subsidiary and related exhibitions were sold in the second semester 2015.

13

Group personnel At 31 March 2017, Group employees totalled 727. The breakdown compared to 31 March 2016 and 31 December 2016 was as follows:

Permanent employees at end of period (units)

31/12/16

Total

Italy

31/03/17

Foreign countries

Total

31/03/16

Foreign Italy countries

Total

Italy

Foreign countries

Fully consolidated companies: 31

28

3

27

3

33

30

3

548

85

Executives Managers and W hite collar workers (including Journalists)

30

633

638

548

90

619

534

85

664

576

88

Total

668

575

93

652

564

88

2

-

2

3

1

2

Equity-accounted companies 2

-

2

(a) :

Executives

59

8

51

White collar workers

57

7

50

62

10

52

61

8

53

Total

59

7

52

65

11

54

725

584

141

727

582

145

717

575

142

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

Compared to 31 December 2016, there was a net increase of two in the number of permanent employees.

14

Significant events occurring after the end of the quarter The Ordinary Shareholders’ Meeting of the Parent Company was held on 21 April 2017. The Meeting approved the Financial Statements at 31 December 2016 as well as the resolution to cover the loss for the financial year of Euro 25,159,578.92 through utilisation of the share price premium reserve and to cover the residual loss of the preceding financial year of Euro 154,268.60 through utilisation of the share price premium reserve. The Shareholders’ Meeting also approved Section One of the Remuneration Report pursuant to Article 123-ter of Legislative Decree 58/98. Finally, the Shareholders’ Meeting approved the appointment of the new Board of Directors, which will remain in office for the financial years 2017-2019 and granted approval for the purchase and sale of treasury shares. An Extraordinary Meeting of Shareholders of the Parent Company was held on the same day which amended Articles 13, 14, 15, 16, 17, 18 and 20 of the Articles of Association at the request of the shareholder Fondazione Fiera Milano pursuant to Article 2367 of the Italian Civil Code and Article 125-ter of Legislative Decree no. 58 of 24 February 1998. On 24 April 2017 the Group completed the sale of 75% shareholding in Worldex Fiera Milano Exhibitions Co., Ltd following the release of a new business license by the relevant Chinese Authorities. This disposal is consistent with the objective of concentrating all of the Group’s activities in China in its joint venture with its German partner Deutsche Messe.

Business outlook The first quarter results reveal a positive trend that is in line with the Company’s expectations. The remainder of the financial year 2017 will reflect the benefits of the more favourable exhibition calendar when, amongst other events, the important directly organised biennial exhibitions Tuttofood and Host take place. The exhibition calendar for the next months of the current year will also be enriched by the inclusion of new exhibitions, some directly organised and others organised by third-parties: the new directly organised exhibitions include Versilia Yachting Rendez-vous, while among the fairs organised by third parties are Lamiera, Expo Ferroviaria and the international dog show ENCI Winner. The Group therefore expects a significant improvement in the gross operating profit in 2017 compared to the previous year, in the absence of currently unforeseen events or developments.

15

Accounting criteria ______________________________________________________________________________ The 2017 First Quarter Consolidated Interim Management Report of the Fiera Milano Group has been prepared in accordance with Article 154-ter of Legislative Decree 58/1998 and in accordance with the Listing Rules issued by Consob ruling no. 11971 of 14 May 1999 and subsequent amendments and integrations. The economic, capital and financial data have been prepared in compliance with the disclosure and valuation requirements of the International Accounting Standards IAS/IFRS, issued by the International Accounting Standards Board (IASB) and endorsed by the European Union. The measurement and recognition criteria used to prepare the Financial Statements for the First Quarter 2017 are the same as those used for the Consolidated Financial Statements for the financial year at 31 December 2016, with the addition of the accounting standards endorsed by the European Union and applicable from 1 January 2017, to which reference should be made. The 2017 First Quarter Consolidated Interim Financial Statements have been prepared on the basis of the accounting situation at 31 March 2017 as approved by the Boards of Directors of the companies included in the area of consolidation and prepared by Group companies within the area of consolidation. As regards comparable data, it should be noted that in preparing the First Quarter Consolidated Interim Management Report at 31 March 2017 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 Consolidated Interim Management Report at 31 March 2017 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 2017 is given in Attachment 1. The present 2017 Interim Management Report has not been subject to legal audit.

16

Financial statements Consolidated Income Statement Full year

(Amounts in €'000)

to 31/12/16

1st Quarter

1st Quarter

to 31/03/17

to 31/03/16 restated

%

%

221,041

100

65,396

100

76,890

100

2,281

1.0

Cost of materials

895

1.4

768

1.0

121,423

54.9

Cost of services

31,266

47.8

34,761

45.2

49,837

22.5

Costs for use of third party assets

13,270

20.3

12,359

16.1

44,101

20.0

Personnel expenses

11,820

18.1

11,298

14.7

4,222

1.9

1,286

2.0

1,335

1.7

221,864

100.4

58,537

89.5

60,521

78.7

3,216

1.5

Other income

450

0.7

874

1.1

1,259

0.6

Results of equity-accounted companies

1,510

2.3

1,184

1.5

3,652

1.7

Gross operating result

8,819

13.5

18,427

24.0

8,398

3.8

Depreciation and amortisation

1,707

2.6

2,001

2.6

5,477

2.5

Allowance for doubtful accounts and other provisions

726

1.1

368

0.5

12,771

5.8

Adjustments to asset values

11

-

-

-

(22,994)

-10.4

6,375

9.7

16,058

20.9

(985)

-0.4

(207)

-0.3

(229)

-0.3

(23,979)

-10.8

6,168

9.4

15,829

20.6

(4,151)

-1.9

-

-

(172)

-0.2

(28,130)

-12.7

Profit/(loss) before income tax

6,168

9.4

15,657

20.4

(28,051)

-12.7

- attributable to the shareholders of the controlling entity

6,246

9.6

15,742

20.5

(79)

-0.0

- attributable to non-controlling interests

(78)

-0.1

(85)

-0.1

-0.7

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

8,612

13.2

18,026

23.4

(1,484)

Revenues from sales and services

%

Other operating expenses Total operating costs

Net operating result (EBIT) Financial income/(expenses) Profit/(loss) before income tax from continuing operations Profit/(loss) before income tax from discontinued operations

Some figures in the consolidated financial statements at 31 March 2016 have been restated to reflect the accounting of the Chinese companies, Worldex and Haikou Worldex, under IFRS 5.

17

Reclassified Consolidated Statement of Financial Position (Amounts in €'000) 31/03/17

A

Change

Goodwill and intangible assets with an indefinite useful life

94,216

94,216

-

Intangible assets with a finite useful life

17,263

17,777

(514)

Tangible fixed assets

15,022

14,511

511

Other non-current assets

35,733

34,378

1,355

162,234

160,882

1,352

9,725

5,480

4,245

72,245

52,227

20,018

-

-

-

Current assets

81,970

57,707

24,263

Trade payables

54,070

41,114

12,956

Advances

62,929

40,239

22,690

666

1,605

(939)

Non-current assets Inventories and contracts in progress Trade and other receivables Other current assets

B

31/12/16

Tax liabilities

32,160

21,276

10,884

C

Current liabilities

Provisions for risks and charges and other current liabilities

149,825

104,234

45,591

D

Net working capital (B - C)

(67,855)

(46,527)

(21,328)

E

Gross capital employed (A + D)

94,379

114,355

(19,976)

Employee benefit provisions

9,351

9,302

49

Provisions for risks and charges and other non-current liabilities

5,872

7,107

(1,235)

F

Non-current liabilities

15,223

16,409

(1,186)

G

NET CAPITAL EMPLOYED continuing operations (E - F)

79,156

97,946

(18,790)

H

NET CAPITAL EMPLOYED assets held for sale

2,049

2,049

-

TOTAL NET CAPITAL EMPLOYED (G + H)

81,205

99,995

(18,790)

67,253 (*)

61,006

6,247

611 (*)

673

(62)

67,864

61,679

6,185

(37,166)

(20,904)

(16,262)

covered by: Equity attributable to the Group Non-controlling interests I

Total equity Cash & cash equivalents Current financial (assets)/liabilities

42,380

46,284

(3,904)

9,341

14,150

(4,809)

Net financial position continuing operations

14,555

39,530

(24,975)

Net financial position assets held for sale

(1,214)

(1,214)

-

Net financial position (TOTAL)

13,341

38,316

(24,975)

EQUITY AND NET FINANCIAL POSITION (I + L)

81,205

99,995

(18,790)

Non-current financial (assets)/liabilities

L

(*)

includes pre-tax result for the period

18

Comments on the capital and financial position Non-current assets totalled Euro 162.234 million at 31 March 2017 compared to Euro 160.882 million at 31 December 2016. The increase of Euro 1.352 million is attributable to the net effect of investments of Euro 1.660 million, depreciation and amortisation of Euro 1.707 million, exchange rate differences of Euro 0.053 million, changes in the value of equity accounted investments of Euro 1.511 million and a negative figure for other movements totalling Euro 0.165 million. Net working capital moved from a negative figure of Euro 46.527 million at 31 December 2016 to a negative figure of Euro 67.855 million at 31 March 2017. The difference of Euro 21.328 million was due to the following: (a)

a Euro 24.263 million increase in Current assets, that was mainly due to a Euro 20.018 million increase in Trade and other receivables. This mainly reflected the increase in Parent Company accruals relating to the second quarter rental charges for the two exhibition sites which were paid in advance in January and to the trend of revenues and receipts from exhibitions held in the quarter;

(b)

a Euro 45.591 million increase in Current liabilities, due primarily to the net effect of: -

-

an increase in Trade payables of Euro 12.956 million. an increase in advances of Euro 22.690 million, which was the net of increases for advances invoiced to clients for exhibitions that are scheduled to take place in future quarters (in particular Tuttofood, Salone del Mobile, Euroluce, Bit) and a decrease in advances for exhibitions held in the first quarter of 2017 (in particular Homi January edition); an increase of Euro 10.884 million in Provisions for risks and charges and other current liabilities due to higher payables to exhibition organisers.

At 31 March 2017 Non-current liabilities totalled Euro 15.223 million compared to Euro 16.409 million at 31 December 2016. Equity attributable to the Group at 31 March 2017 was Euro 67.253 million compared to Euro 61.006 million at 31 December 2016. The increase of Euro 6.247 million reflected the effect of the following: an increase of Euro 6.246 million in the profit before income tax for the period; an increase of Euro 0.001 million in the translation reserve. Net equity attributable to non-controlling interests at 31 March 2017 was Euro 0.611 million compared to Euro 0.673 million at 31 December 2016. The decline of Euro 0.062 million reflects: A Euro 0.078 million reduction in the pre-tax profit for the period; A Euro 0.016 million transfer to the capital account. Information on the change in financial assets and liabilities is given in the comment on the net financial position.

19

Declaration of the Manager responsible for preparing the Company’s financial statements The Manager responsible for preparing the Company’s financial statements, Sebastiano Carbone, herewith declares that the accounting information in the present financial report is consistent with the Company’s official documents, books and accounting records.

*****

20

Attachment 1 List of companies included in the consolidation area and other investments at 31 March 2017

Company name and registered office

Main activity

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

Organisation and hosting of exhibitions in Italy

42,445

Fully consolidated companies Fiera Milano Media SpA Milan, p.le Carlo Magno 1 Fiera Milano Congressi SpA Milan, p.le Carlo Magno 1 Mico DMC S.r.l. Milan, p.le Carlo Magno 1 La Fabbrica del Libro SpA Milan, p.le Carlo Magno 1

Media services

2,803

100

100

100

Fiera Milano SpA

Management of congresses

2,000

100

100

100

Fiera Milano SpA

Management of congresses

10

51

120

51

Organisation of exhibitions in Italy

51

51

Fiera Milano Congressi SpA

51

51

Fiera Milano SpA

Nolostand SpA Milan, p.le Carlo Magno 1 Ipack-Ima SpA Rho, S.S. del Sempione km 28

7,500

100

100

100

Fiera Milano SpA

Organisation of exhibitions in Italy

Stand fitting services

200

100

100

100

Fiera Milano SpA

Organisation of exhibitions outside of Italy

R $ 47,032

100

99.98

0.02

Organisation of exhibitions outside of Italy

R $ 7,003

100

1

99

Organisation of exhibitions outside of Italy

INR 20,000

99.99

99.99

99.99

Fiera Milano SpA

Organisation of exhibitions outside of Italy

RUB 10,000

100

100

100

Fiera Milano SpA

Organisation of exhibitions outside of Italy

ZAR 0.3

100

100

100

Fiera Milano SpA

Organisation of exhibitions outside of Italy

CNY 6,000

75

75

75

Fiera Milano SpA

Organisation of exhibitions outside of Italy

CNY 200

75

Organisation of exhibitions outside of Italy

25

49

Eurofairs International Consultoria e Participações Ltda São Paulo Brasil, na Avenida Angélica, nº 2350, Sala B, Consolação, CIPA Fiera Milano Publicações e Eventos Ltda São Paulo Brasil, Av. Angelica Fiera Milano India Pvt Ltd New Delhi, Barakhamba Road, Connaught Place Limited Liability Company "Fiera Milano" Moscow, 24 A/1 ul. B. Cherkizovskaya Fiera Milano Exhibitions Africa Pty Ltd Cape Town, The Terraces, Steenberg 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 West

99.98 Fiera Milano SpA

100

0.02

Nolostand SpA Eurofairs International 99 Consultoria e Participações Ltda 1 Fiera Milano SpA

100

Worldex Ltd

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 Ipack Ima Srl Rho, S.S. del Sempione km 28

49

49

Fiera Milano SpA

Organisation of exhibitions outside of Italy

USD 500

49

100

Hannover Milano Global 100 Germany GmbH

Organisation of exhibitions outside of Italy

HKD 10

49

100

Hannover Milano Global 100 Germany GmbH

Organisation of exhibitions outside of Italy

INR 274,640

48.99

99.99

Hannover Milano Global 99.99 Germany GmbH

Organisation of exhibitions outside of Italy

INR 207,523

24.5

50

Hannover Milano Fairs India 50 Pvt Ltd

Organisation of exhibitions in Italy

20

49

49

49

Ipack-Ima SpA

C) List of companies accounted at cost Shareholding of Group companies

Shareholding %

Share capital (000) (*)

Company name and registered office

Directly held by Fiera Milano

Group total

Indirectly held through other Group companies

%

Esperia SpA Rose (Cosenza)

Other activities

1,403

2

2

2

Fiera Milano Media SpA

(*) Euro or other currencies as specifically indicated

21