Consolidated Interim Management Report at 31 March 2015 (1st Quarter 2015)
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 2015”. 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 2015” 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 (Milan) Share Capital: Euro 42,147,437.00 fully paid up Companies Register, Tax code and VAT no. 13194800150 – Economic Administrative Register 1623812
Rho (Milan), 11 May 2015
Contents __________________________________________________________________________________
▪ Corporate Bodies and Independent Audit Firm
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 2015 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 2015
2
Corporate Bodies and Independent Audit Firm __________________________________________________________________________ BOARD OF DIRECTORS Roberto Rettani Attilio Fontana Licia Ronzulli Corrado Arturo Peraboni Joyce Victoria Bigio Renato Borghi Pier Andrea Chevallard Vincenza Patrizia Rutigliano Romeo Robiglio
Chairperson*° Deputy Vice Chairperson *° Vice Chairperson *° 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
Joyce Victoria Bigio Renato Borghi Vincenza Patrizia Rutigliano
Attilio Fontana Romeo Robiglio Licia Ronzulli
BOARD OF STATUTORY AUDITORS
SUPERVISORY BOARD under Legislative decree 231/01
Federica Nolli Antonio Guastoni Carmine Pallino Francesca Maria D’Alessandro Alessandro Carlo Galli
Pier Andrea Chevallard Federica Nolli Ugo Lecis
Chairperson Statutory Auditor Statutory Auditor Substitute Auditor Substitute Auditor
MANAGER RESPONSIBLE FOR PREPARING THE COMPANY’S FINANCIAL STATEMENTS UNDER LAW 262/2005
Flaminio Oggioni
--The Board of Directors and the Board of Statutory Auditors were appointed at the Shareholders’ Meeting of 29 April 2015 and their mandates 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, 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, coordinating the work of the Board of Directors for the appointment of new Directors, verification of the implementation of the Board of Directors’ resolutions and supervision of the internal audit. 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.
AUDIT FIRM
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 characteristic phases of the exhibition and congress sector and is one of the 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): that are directly organised by the Group or in partnership with third-parties; 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 and events.
4
Group structure
5
Report on operations in the first quarter 2015 Summary of results and significant events during the first quarter The following table gives the main figures of the Group for the first quarter 2015 with comparable data for the same quarter of the previous year, as well as figures for the full year 2014. Full Year at 31/12/14 245,457 (3,338)
Fiera Milano Group Summary of key figures ( A m o unt s in € ‘ 0 0 0 )
1st Quarter at 31/03/15
1st Quarter at 31/03/14
73,760
74,763
Revenues from sales and services Gross operating result (a)
7,079
7,712
Net operating result (EBIT)
2,618
5,228
(23,692)
Profit/(loss) before income tax
1,403
3,925
(23,565)
- Attributable to the shareholders of the controlling entity
1,763
4,063
- Attributable to non-controlling interests
(360)
(138)
C ash flow befor e income tax for the Gr oup and non-contr olling inter ests ( b)
5,864
6,409
131,090
155,216
(18,793)
(127) (8,237) 141,355
Net capital employed (c) covered by:
17,034 2,654 121,667 8,515 807
Equity attributable to the Group Equity attributable to non-controlling interests Net financial debt/(cash) Investments ( c o nt inuing o pe ra t io ns a nd dis c o nt inue d o pe ra t io ns ) Employees (no. of permanent employees at the end of period)
19,372 * 2,269 *
38,952 * 3,016 *
109,449
113,248
1,129
1,841
821
838
* includes pre-tax result fo r the perio d (a) Gro ss o perating result is 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 and pro visio ns. (c) Net capital emplo yed is the sum o f no n-current assets, no n-current liabilities and net wo rking capital.
The results for the first quarter 2015 were lower than those for the same period of 2014. This mainly reflects the different exhibition calendar, which, in the first quarter of the previous financial year, included Mostra Convegno Expocomfort, a biennial exhibition held in evennumbered years. This effect was in part compensated by the presence of the biennial exhibition Made Expo; by Lineapelle, a six-monthly exhibition which had its first edition in the Rho exhibition site in the second half of 2014; and a good performance of the congress segment. The Simac Tanning-Tech exhibition for footwear and leather goods manufacturing technology was held for the first time in the fieramilano exhibition site as was My Plant & Garden, a B2B floriculture exhibition. The new fair, 3D Print Hub, for 3D printing was held in the fieramilanocity site. For Expo 2015, Fiera Milano turned the concept of the Thematic Areas (the Pavilion Zero, the Future Food District, the Children’s Park, and the Biodiversity Park) into an executive plan: the Thematic Areas elaborate in different ways and to varying degrees the main theme of EXPO 2015 “Feeding the Planet – Energy for Life” through exhibitions and dedicated installations. Fiera Milano has also designed the furnishing of the Italian Pavilion and of the Cluster exhibition spaces for Expo 2015 and has built the exhibition stands of several of the countries taking part in Expo 2015. The total revenues figure shown for these contracts in the first quarter are Euro 1.545 million as the amount of revenues to be recognised has been determined according to the “percentage of completion method”. 6
In the first quarter 2015, the subsidiaries Nolostand and Fiera Milano Congressi won contracts worth approximately Euro 7.500 million from Expo 2015 for stand-fittings and for managing events in the Congress Centre and in the Auditorium of Expo 2015. The activities of the Group are highly seasonal due to the impact of biennial and multi-annual
exhibitions. Given the seasonal nature of the Group’s activities, the revenues and results reported in individual quarters cannot be extrapolated to calculate the full-year figures and may vary substantially from one quarter to the next. A detailed analysis of the results for the first quarter 2015 reveals the following trends: Revenues from sales and services totalled Euro 73.760 million and were almost in line with
•
the figure for the same period of the previous financial year (Euro 74.763 million). The change in revenues mainly reflected the different exhibition calendar and the absence of the important biennial exhibition held in even-numbered years, Mostra Convegno Expocomfort, which was held in the first quarter 2014. This absence was only in part compensated by the presence of the biennial exhibition Made Expo; by Lineapelle, a six-monthly exhibition that was held for the first time in the Rho exhibition site in the second part of 2014; and the positive performance of the congress segment. The total square metres occupied by the exhibitions belonging to the Fiera Milano Group held in the quarter under review are shown in the table on the following page. -
-
-
-
-
Annual exhibitions organised by the Group in Italy (-5,135 square metres): the decline
was mainly due to the postponement of Miart exhibition to the second quarter of 2015 (-6,360 square metres); Annual exhibitions organised by third parties in Italy (+64,345 square metres): the increase was mainly from the new exhibitions Simac Tanning-Tech (+15,200 square metres), My Plant & Garden (+9,330 square metres), 3D Print Hub (+2,500 square metres) and to the February edition of the biannual exhibition Lineapelle, which had its first edition in the Rho exhibition site in September 2014 (+41,575 square metres); Biennial exhibitions organised by third parties in Italy (-68,325 square metres): the decline reflected the absence of the biennial exhibition Mostra Convegno Expocomfort (-125,265 square metres) held in even-numbered years, which was in part compensated by Made Expo, a biennial exhibition held in uneven-numbered years (+56,940 square metres); Congresses with related exhibition space had an increase of 2,295 square metres; Annual exhibitions organised by the Group abroad (+4,865 square metres): the increase mainly reflected the presence of Chinafloor Domotex Shanghai (+3,775 square metres); Biennial exhibitions organised by the Group abroad (+11,725 square metres): the increase in square metres was due to the exhibitions held in uneven-numbered years, WoodMach China (+10,000 square metres) and Rehabtech Asia (+1,725 square metres) in Singapore.
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 2015
1st Quarter 2014
Organised Total
by the Group
Change Organised
Total
by the Group
Organised Total
by the Group
Number of exhibitions:
29
13
26
14
3
(1)
Italy
19
3
16
4
3
(1)
. annual
18
3
15
4
3
(1)
. biennial
1
-
1
-
-
-
. multi-annual
-
-
-
-
-
-
Foreign countries
10
10
10
10
-
-
. annual
8
8
10
10
(2)
(2)
. biennial
2
2
-
-
2
2
. multi-annual
-
-
-
-
-
-
9
-
7
-
2
-
Net sq.metres of exhibition space:
527,080
198,250
517,310
186,795
9,770
11,455
Italy
428,140
99,310
434,960
104,445
(6,820)
(5,135)
371,200
99,310
309,695
104,445
61,505
(5,135)
56,940
-
125,265
-
(68,325)
-
-
-
-
-
-
-
7,750
-
5,455
-
2,295
16,590
Number of congresses with related exhibition space
. annual (a) . biennial . multi-annual (a) o f which co ngresses with related exhibitio n space
Foreign countries
98,940
98,940
82,350
82,350
16,590
. annual
87,215
87,215
82,350
82,350
4,865
4,865
. biennial
11,725
11,725
-
-
11,725
11,725
-
-
-
-
-
-
11,795
4,030
10,230
3,680
1,565
350
9,595
1,830
8,365
1,815
1,230
15
8,685
1,830
6,825
1,815
1,860
15
910
-
1,540
-
(630)
-
-
-
-
-
-
-
510
-
420
-
90
-
2,200
2,200
1,865
1,865
335
335
1,950
1,950
1,865
1,865
85
85
250
250
-
-
250
250
-
-
-
-
-
-
. multi-annual
Number of exhibitors: Italy . annual (b) . biennial . multi-annual (b) o f which co ngresses with related exhibitio n space
Foreign countries . annual . biennial . multi-annual
•
The Gross operating profit for the quarter was Euro 7.079 million, a decrease of Euro 0.633 million compared to the figure for the same period of the previous financial year. The decrease is mainly attributable to: increased operating costs for the Rho exhibition site and for the Congress Centre; an increase in personnel costs in the Parent Company to strengthen the marketing department; and, in the subsidiary Nolostand, for higher provisions for doubtful accounts and costs associated with the resolution of an employment dispute, which were offset at the EBIT level by the use of provisions made in previous financial periods. The increase in costs was in part compensated by the lower rental costs for the fieramilano exhibition site and the absence of extraordinary costs in the same period of the previous financial year for the relaunch and internationalisation of HOMI.
•
The Net operating profit (EBIT) for the quarter was Euro 2.618 million compared to Euro 5.228 million in the first quarter 2014. The decrease of Euro 2.610 million mainly reflects the aforementioned change in the gross operating profit and higher provisions for risk and charges in the Parent Company for the indemnity of Euro 1.451 payable to the previous Chief Executive Officer and also to cover loss-making exhibitions.
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•
The Profit before income tax was Euro 1.403 million compared to Euro 3.925 million in the first quarter 2014. The Profit before income tax attributable to the controlling shareholder was Euro 1.763 million (Euro 4.063 million in the first quarter 2014) and there was a pre-tax loss of Euro 0.360 million attributable to non-controlling interests (a pre-tax loss of Euro 0.138 million in first quarter 2014).
•
Cash flow in the quarter (calculated as the pre-tax result plus depreciation, amortisation and
provisions) was Euro 5.864 million compared to Euro 6.409 million in the same quarter of the previous financial year.
Net financial position The Group net financial position and its breakdown are shown in the following table. Group Net Financial Position 31/12/14 12,276
(Amounts in € '000)
A. Cash (including bank balances)
31/03/15 16,691
-
B. Other cash equivalents
-
-
C. Securities held for trading
-
12,276 -
D. Cash and cash equivalents (A+B+C) E. Current financial assets
16,691 -
62,908
F. Current bank borrowings
42,906
19,986
G. Current portion of non-current debt
20,005
22,150
H. Other current financial liabilities
36,394
21,683 300 105,044 92,768 26,898 2,001
1,781 28,899 121,667 121,667
- H.1 of which Other current financial liabilities to the controlling shareholder - H.2 of which Other current financial liabilities to other related parties
35,988 300
I. Current financial debt (F+G+H)
99,305
J. Current net financial debt (cash) (I-E-D)
82,614
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 N. Non-current financial debt (K+L+M) Net financial debt/(cash) from continuing operations (J+N) Net financial debt/(cash) from discontinued operations O. Net financial debt/(cash)
24,903 1,932
1,796 26,835 109,449 109,449
Net debt at 31 March 2015 was Euro 109.449 million compared to Euro 121.667 million at 31 December 2014. The Euro 12.218 million decrease in net debt was due to the positive cash flow generated in the first quarter and to the cash flows from net working capital from pre-payments and cash-in for exhibitions held in the quarter under review or due to be held in subsequent months.
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)
2014
1st Quarter
1st Quarter
to 31/03/15
to 31/03/14
Revenues from sales and services % 181,098
63.9
18,786
6.7
33,389
11.8
12,334
4.3
37,835
13.3
283,442
100.0
- By operating segment: . Italian Exhibitions . Foreign Exhibitions
% 62,331
72.1
% 65,772
74.2
1,397
1.6
1,334
1.5
12,764
14.7
12,938
14.6
. Media
2,883
3.3
3,015
3.4
. Congresses
7,196
8.3
5,585
6.3
86,571
100.0
88,644
100.0
. Stand-fitting Services
Total revenues gross of adjustments for inter-segment transactions
(37,985)
. Adjustments for inter-segment transactions
245,457
Total revenues net of adjustments for inter-segment transactions
(12,811)
(13,881)
73,760
74,763
- By geographic area: 227,150
92.5
18,307 245,457
7.5 100.0 % on revenues
(12,894)
-7.1
1,088
5.8
. Italy . Foreign countries Total
72,390
98.1
73,433
98.2
1,370 73,760
1.9 100.0
1,330 74,763
1.8 100.0
Gross operating result
% on revenues
- By operating segment: . Italian Exhibitions . Foreign Exhibitions
% on revenues
5,387
8.6
5,407
8.2
82
5.9
63
4.7
1,895
5.7
. Stand-fitting Services
1,321
10.3
2,181
16.9
415
3.4
. Media
(312)
-10.8
(211)
-7.0
6,045
16.0
601
8.4
229
4.1
113 (3,338)
. Congresses . Adjustments for inter-segment transactions
-1.4
Total
43 7,079
9.6
7,712
10.3
7,025
9.7
7,665
10.4
54
3.9 9.6
47
3.5 10.3
- By geographic area: (4,131)
-1.8
793
4.3 -1.4
(3,338)
% on revenues (18,312)
-10.1
(118)
-0.6
365
1.1
(4,120)
-33.4
3,373
8.9
19 (18,793)
-7.7
. Italy . Foreign countries Total
7,079
Net operating result (EBIT) - By operating segment:
7,712
%
%
on revenues
on revenues
. Italian Exhibitions
1,907
3.1
4,248
6.5
. Foreign Exhibitions
(145)
-10.4
(166)
-12.4
. Stand-fitting Services
1,392
10.9
1,716
13.3
. Media
(475)
-16.5
(413)
-13.7
. Congresses
(34)
-0.5
(186)
-3.3
. Adjustments for inter-segment transactions
(27)
Total
2,618
29 3.5
5,228
7.0
2,818
3.9
5,436
7.4
(200)
(208)
2,618
-14.6 3.5
5,228
-15.6 7.0
. Italian Exhibitions
440
53.5
438
52.4
. Foreign Exhibitions
25.5
- By geographic area: (18,269)
-8.0
(524)
-2.9 -7.7
(18,793)
. Italy . Foreign countries Total Employees (no. of permanent employees at the end of the period)
% 437
54.2
185
22.8
53
6.6
95
11.8
37
4.6
807
100.0
622
77.1
185 807
22.9 100.0
- By operating segment:
%
%
195
23.8
214
. Stand-fitting Services
54
6.6
54
6.4
. Media
95
11.6
95
11.3
. Congresses Total
37
4.5
37
4.4
821
100.0
838
100.0
626
76.2
624
74.5
195 821
23.8 100.0
214 838
25.5 100.0
- By geographic area: . Italy . Foreign countries Total
Revenues from sales and services before elimination of transactions among the five business
segments of the Group were Euro 86.571 million, a decrease of Euro 2.073 million compared to the figure for the first quarter of 2014. - Revenues from Italian Exhibitions totalled Euro 62.331 million in the first quarter, a decrease of approximately 5% compared to the figure for the same period of the previous financial year (Euro 65.772 million). The decrease in revenues was mainly attributable to the different exhibition calendar: Mostra Convegno Expocomfort, the important biennial exhibition held in even-numbered years, was held in the same period of 2014. The effect of this absence was in part compensated by the presence of the biennial exhibition Made Expo and of Lineapelle, a 10
biannual exhibition that had its first edition in the Rho exhibition site in the second half of 2014. - Revenues from Foreign Exhibitions totalled Euro 1.397 million in the first quarter 2015 and were in line with those in the same period of the previous financial year (Euro 1.334 million). There was a good performance from the proprietary exhibition Food Hospitality World held in São Paulo. - Revenues from Stand-fitting Services were Euro 12.764 million in the first quarter 2015 and were in line with those of the first quarter 2014 (Euro 12.938 million). The negative effect of the less favourable exhibition calendar was offset by an increase in revenues from services supplied to countries taking part in Expo 2015. - Revenues in the Media segment totalled Euro 2.883 million in the first quarter 2015, a slight decrease compared to the figure for the same period of the previous financial year (Euro 3.015 million). Billboard revenues fell due to the exhibition calendar and the absence of the biennial exhibition, Mostra Convegno Expocomfort, although this was in part compensated by the presence of Lineapelle. - Revenues from Congresses totalled Euro 7.196 million in the first quarter 2015 compared to Euro 5.585 million in the same quarter of 2014. The increase was mainly due to Cisco Live 2015 and some important international congresses that included both Assiom Forex 2015 and Global Entrepreneurship 2015. The Group Gross operating profit in the first quarter 2015 was Euro 7.079 million, a decrease compared to the figure for the first quarter 2014 (Euro 7.712 million). The breakdown was as follows: - Italian Exhibitions had a gross operating profit of Euro 5.387 million in the first quarter 2015 compared to Euro 5.407 million in the same quarter of 2014. The slight decrease mainly reflects the trend in revenues in the period under review and the increase in operating costs for the Rho exhibition site and higher personnel costs in the Parent Company as the marketing department was strengthened. This was almost entirely compensated by the fall in the rental costs for the fieramilano exhibition site and the absence of the extraordinary costs present in the first quarter 2014 for the relaunch and internationalisation of HOMI. - Foreign Exhibitions generated a gross operating profit of Euro 0.082 million compared to Euro 0.063 million in the first quarter 2014. The year-on-year change mainly reflects the absence of costs in 2014 for the corporate restructuring in Brazil although this benefit was almost completely eroded by higher costs in the Turkish subsidiary Interteks. - Stand-fitting services had a gross operating profit of Euro 1.321 million compared to Euro 2.181 million in the same quarter of the previous financial year. The decrease was mainly due to an increase in costs for outsourced staff. There was also a negative impact from higher losses on receivables and higher costs linked to the resolution of an employment dispute, which were offset at the EBIT level by the use of provisions made in previous financial years. - Media had a gross operating loss of Euro 0.312 million, which was a deterioration compared to the loss of Euro 0.211 million in the same quarter of 2014. The decrease is mainly attributable to the aforementioned trend in revenues in the period under review. - Congresses generated a gross operating profit of Euro 0.601 million compared to a gross operating profit of Euro 0.229 million in the same quarter 2014. The improvement was mainly due to the positive trend in revenues in this segment but was affected by an increase in rental and maintenance costs for the congress centre. The Net operating profit (EBIT) of the five operating segments in the first quarter 2015 was Euro 2.618 million compared to Euro 5.228 million in the same period of the previous financial year and reflects the gross operating profit generated by the various segments and provisions for risks and charges in the Parent Company for the indemnity payable to the previous Chief Executive Officer and also for loss-making exhibitions.
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The first quarter 2015 breakdown by geographic area shows that foreign activities generated Euro 1.370 million in revenues, in line with the figure for the same period of the preceding financial year (Euro 1.330 million). The gross operating profit was Euro 0.054 million, an increase of Euro 0.007 million compared to the figure for the first quarter 2014. The benefit deriving from the absence of restructuring costs for the Brazilian companies compared to 2014 was almost totally eroded by higher operating expenses in the Turkish subsidiary Interteks. There was a net operating loss of Euro 0.200 million in first quarter 2015 compared to a loss of Euro 0.208 million in first quarter 2014. During the quarter under review, nineteen exhibitions and nine congresses with related exhibition space were held in the two sites of fieramilano and fieramilanocity. Net exhibition space occupied totalled 428,140 square metres, compared to 434,960 square metres in the same period of the preceding financial year, whilst the number of exhibitors went from 8,365 in the first quarter 2014 to 9,595 in the first quarter 2015. Exhibitions directly organised by the Group in Italy and abroad occupied 198,250 square metres of net exhibition space, 38% 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
A nnual Exhibitions: Directly organised - Bit - HOMI I semester - Milano Pret A Porter Spring - Miart Total annual exhibitions directly organised
Number of exhibit ors
Quarter Quarter Quarter Quarter Quarter Quarter to 31/03/15 to 31/03/14 to 31/03/13 to 31/03/15 to 31/03/14 to 31/03/13
15,335 81,200 2,775 a) 99,310
13,750 82,210 2,125 6,360 104,445
23,095 91,590 2,420 b) 117,105
405 1,295 130 a) 1,830
280 1,275 105 155 1,815
295 1,425 125 b) 1,845
Hosted - 3D Print Hub * - Cartoomics - Fa la cosa giusta - Hobby Show (I semester) - LineaPelle I semester * - Mido - Mifur - Milano Auto Classica - Milano Unica (Spring) - Mipel (March) - My Plant & Garden * - Promotion Trade Exhibition - Simac Tanning-Tech * - Super (Spring) ** - The Micam (Spring) - Esposizione Internazionale Canina - Promotion Expo - EU.DI.SHOW Total annual exhibitions hosted
2,500 9,855 7,845 3,425 41,575 43,630 13,350 16,440 18,020 10,060 9,330 4,235 15,200 1,600 67,075 c) c) c) 264,140
8,000 8,500 5,000 40,700 16,885 b) 18,390 12,120 4,095 67,910 15,000 3,195 c) 199,795
8,000 6,000 11,665 40,575 15,895 16,030 19,185 13,520 4,275 67,455 15,000 4,260 5,320 227,180
80 190 630 115 965 990 170 245 380 285 285 130 275 180 1,425 c) c) c) 6,345
225 600 110 910 190 b) 400 355 125 1,490 45 140 c) 4,590
240 700 280 880 180 295 420 385 115 1,445 45 170 120 5,275
Total annual Exhibitions
363,450
304,240
344,285
8,175
6,405
7,120
Biennial Exhibitions: Directly organised - Transpotec & Logitec ° Total biennial exhibitions directly organised Hosted - Mostra Convegno Expocomfort - Made Expo - Frameart - Photoshow
a) -
-
56,940 -
125,265 -
52,610 52,610 b) 4,705 6,910
a) -
-
165 165
910 -
1,540 -
b) 85 75
Total biennial exhibitions hosted
56,940
125,265
11,615
910
1,540
160
Total biennial exhibitions
56,940
125,265
64,225
910
1,540
325
420,390
429,505
408,510
9,085
7,945
7,445
5,455
7,975
434,960
416,485
TOTAL EXHIBITIONS - Congresses with related exhibition space TOTAL
7,750 428,140
510 9,595
420
395
8,365
7,840
* First edition of this exhibition ** The exhibition was held for the first time at Fiera Milano exhibition sites ° The exhibition was held in Verona a) The exhibition will be held in next quarter b) The exhibition was held in subsequent quarters c) The exhibition did not take place
12
During the first quarter 2015, ten exhibitions were held in exhibition sites abroad and the net exhibition space occupied totalled 98,940 square metres (in the first quarter 2014 the figure was 82,350 square metres). The number of exhibitors was 2,200 (1,865 in the first quarter 2014). Details of the exhibitions organised abroad are given in the following table. Foreign Exhibition portfolio Net sq. metres of exhibition space
Annual Exhibitions: Exhibitions directly organised in China - Chinafloor Domotex Shanghai
Quarter to 31/03/15
Quarter to 31/03/14
Number of exhibitors
Quarter to 31/03/13
Quarter to 31/03/15
Quarter to 31/03/14
Quarter to 31/03/13
63,985
60,210
58,540
1,260
1,050
1,120
- GITF International Tour Guangzhou
6,700
4,715
4,970
110
210
185
- The Micam Shanghai I semester
2,910
2,940
-
150
155
-
73,595
67,865
63,510
1,520
1,415
1,305
Total Exhibitions directly organised in China Exhibitions directly organised in India - Food Hospitality World Mumbai Total Exhibitions directly organised in India
3,195
2,390
2,385
175
155
125
3,195
2,390
2,385
175
155
125
Exhibitions directly organised in Turkey - Beauty & Care Istanbul
6,800
5,930
5,535
140
125
105
- Pro-Show
1,000
1,870
1,300
20
15
15
b)
3,015
2,480
b)
65
40
7,800
10,815
9,315
160
205
160
- Home & Garden Istanbul Total Exhibitions directly organised in Turkey Exhibitions directly organised in South Africa - Capetown Art Fair Total Exhibitions directly organised in South Africa
1,260
850
-
55
45
-
1,260
850
-
55
45
-
Exhibitions directly organised in Brazil - Food Hospitality World
1,365
c)
1,970
40
c)
65
- Fast Bahia
a)
250
-
a)
25
-
- Fast Rio de Janeiro
a)
180
-
a)
20
-
- Fippa-pet show
a)
-
770
a)
-
65
- Sonotec Total Exhibitions directly organised in Brazil Total Annual Exhibitions
a)
a)
40
a)
a)
5
1,365
430
2,780
40
45
135
87,215
82,350
77,990
1,950
1,865
1,725
Biennial Exhibitions: Exhibitions directly organised in China - WoodMac China Total Exhibitions directly organised in China
10,000
-
15,950
80
-
250
10,000
-
15,950
80
-
250
Exhibitions directly organised in Singapore - Rehabtech Asia * Total Exhibitions directly organised in Singapore
1,725
-
1,120
170
-
110
1,725
-
1,120
170
-
110
Total Biennial Exhibitions
11,725
-
17,070
250
-
360
TOTAL EXHIBITIONS
98,940
82,350
95,060
2,200
1,865
2,085
* The exhibition is a joint project with the company of Singapore, Singex Exhibitions Ventures Pte Ltd a) The exhibition did not take place b) The exhibition will be held in subsequent quarters c) The exhibition in previous years was held in subsequent quarters
13
Group personnel At 31 March 2015, Group employees totalled 821. The breakdown compared to 31 March 2014 and 31 December 2014 was as follows:
Permanent employees at end of period (units)
31/12/14 Total
Italy
Foreign countries
46
39
7
31/03/15
31/03/14
Total
Italy
Foreign countries
46
39
7
Total
Italy
Foreign countries
44
38
6
Fully consolidated companies:
698
583
115
Executives Managers and W hite collar workers (including Journalists)
744
622
122
Total
2
-
2
2
-
2
2
-
2
61
-
61
W hite collar workers
60
-
60
57
-
57
63
-
63
Total
62
-
62
59
-
59
807
622
185
821
626
195
838
624
214
Equity-accounted companies
713
587
126
735
586
149
759
626
133
779
624
155
(a) :
Executives
TOTAL (a) the indicated data co rrespo nds to the pro -quo ta o f to tal emplo yees
Compared to the figure at 31 December 2014, there was a net increase of fourteen permanent employees primarily due to the strengthening of the commercial, marketing and communication departments.
14
Significant events occurring after the end of the quarter On 9 April 2015, the Parent Company acquired 15% of Fiera Milano Exhibitions Africa Pty Ltd for 3.945 million South African rand (Euro 0.300 million1). As a result of this transaction the percentage held by the Parent Company rose from 85% to 100%. On 29 April 2015, Fiera Milano signed a contract worth Euro 7.200 million to rent to Expo 2015 an area of approximately 120,000 square metres inside the exhibition site for vehicle circulation and parking until 10 November 2015. On 29 April 2015, the Ordinary Shareholders’ Meeting of the Parent Company was held and the Financial Statements at 31 December 2014 were approved; approval was given to cover the losses for the 2014 financial year of Euro 30,674,121.31 by using available reserves for Euro 11,068,097.46 while the residual amount of Euro 19,606,023.85 is to be carried forward. It was also decided to postpone until the Shareholders’ Meeting for the approval of the Financial Statements at 31 December 2015 any eventual adoption, assuming that the requirements are met, of the provisions under Article 2446 of the Italian Civil Code. The same Shareholders’ Meeting approved the appointment of the new corporate bodies that will remain in office for the financial years 2015-2017 and approved the Report on Remuneration under Article 123-ter of Legislative Decree 58/98.
Business outlook The demand for exhibition space is expected to increase in the current financial year due to the strong exhibition calendar (which includes the two important proprietary exhibitions Tuttofood and Host). Further demand will come from the activities linked to Expo 2015. As a result of these factors and given the economic environment which is showing signs of a weak recovery, the forecasts for the 2015 financial year are for an increase in consolidated revenues, a return to net profit and a trend in financial requirements consistent with the forecasts for revenues and investments. Due to the accumulated losses at 31 December 2014, the share capital of the Parent Company fell by more than one-third leaving the Company in the situation provided for under Article 2446 of the Italian Civil Code. The first quarter 2015 results of the Parent Company are in line with expectations and appear to confirm that the target of the share capital rising by one-third, in compliance with Article 2446 of the Italian Civil Code, will be reached by the end of the current financial year barring any currently unforeseen events or circumstances that might impede this target being reached. The sections on Liquidity risk and Use of estimates in the Explanatory and Supplementary Notes to the Financial Statements at 31 December 2014 provide information on the relative estimates and uncertainties. As a result of the budget financial forecasts and those for net working capital and on the capital and financial position, the Consolidated Interim Management Report at 31 March 2015 has been prepared under the going concern principle.
1
Figures in Euro have been translated using the fixed exchange rate of 24 February 2015 (EUR/ZAR = 13.149)
15
Accounting criteria ___________________________________________________________________________ The 2015 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 financial, economic and equity 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 2015 are the same as those used for the Consolidated Financial Statements for the financial year at 31 December 2014, with the addition of the accounting standards endorsed by the European Union and applicable from 1 January 2015, to which reference should be made. The Consolidated Interim Financial Statements have been prepared on the basis of the accounting situation at 31 March 2015 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 2015 First Quarter Consolidated Interim Financial Statements 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 2015 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 2015 is given in Attachment 1. The present 2015 First Quarter Consolidated Interim Management Report has not been subject to legal audit.
16
Financial Statements
Consolidated Income Statement (Amounts in €'000)
Full year
1st Quarter
1st Quarter
to 31/12/14
to 31/03/15
to 31/03/14
%
%
245,457
100
Revenues from sales and services
2,440
1.0
Cost of materials
137,400
56.0
57,875
%
73,760
100
74,763
100
961
1.3
831
1.1
Cost of services
37,122
50.3
37,656
50.4
23.6
Costs for use of third party assets
15,130
20.5
15,758
21.1
49,276
20.1
Personnel expenses
13,580
18.4
12,659
16.9
6,783
2.8
1,946
2.6
2,245
3.0
253,774
103.4
68,739
93.2
69,149
92.5
3,531
1.4
Other income
600
0.8
816
1.1
1,448
0.6
Results of equity-accounted companies
1,458
2.0
1,282
1.7
(3,338)
-1.4
7,079
9.6
7,712
10.3
13,457
5.5
Depreciation and amortisation
3,250
4.4
3,197
4.3
(1,639)
-0.7
Allowance for doubtful accounts and other provisions (uses)
1,211
1.6
(713)
-1.0
3,637
1.5
(18,793)
-7.7
(4,899)
Other operating expenses Total operating costs
Gross operating result
-
-
-
-
Net operating result (EBIT)
2,618
3.5
5,228
7.0
-2.0
Financial income/(expenses)
(1,215)
-1.6
(1,303)
-1.7
(23,692)
-9.7
Profit/(loss) before income tax
1,403
1.9
3,925
5.2
(23,565)
-9.6
- attributable to the shareholders of the controlling entity
1,763
2.4
4,063
5.4
(127)
-0.1
- attributable to non-controlling interests
(360)
-0.5
(138)
-0.2
-3.4
Cash flow before income tax for the Group and noncontrolling interests
5,864
8.0
6,409
8.6
(8,237)
Adjustments to asset values
17
Reclassified Consolidated Statement of Financial Position (Amounts in €'000)
Goodwill and intangible assets with an indefinite useful life
A
31/12/14
Change
109,087
109,474
(387)
Intangible assets with a finite useful life
39,809
41,584
(1,775)
Tangible fixed assets
17,617
18,438
(821)
Other non-current assets
37,295
35,234
2,061
203,808
204,730
(922)
Non-current assets Inventories
6,484
5,028
1,456
81,298
50,604
30,694
Current assets
87,782
55,632
32,150
Trade payables
43,024
36,160
6,864
Pre-payments
60,759
39,641
21,118
1,309
2,091
(782)
36,333
21,875
14,458 41,658
Trade and other receivables B
31/03/15
Tax liabilities Provisions for risks and charges and other current liabilities C
Current liabilities
141,425
99,767
D
Net working capital (B - C)
(53,643)
(44,135)
(9,508)
E
Gross capital employed (A + D)
150,165
160,595
(10,430)
10,342
10,286
56
8,733
8,954
(221)
19,075
19,240
(165)
131,090
141,355
(10,265)
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)
131,090
-
-
141,355
(10,265)
19,372 (*)
17,034
2,338
2,269 (*)
2,654
(385)
covered by: Equity attributable to the Group Equity attributable to non-controlling interests I
Total equity
21,641
19,688
1,953
(16,691)
(12,276)
(4,415)
Current financial (assets)/liabilities
99,305
105,044
(5,739)
Non-current financial (assets)/liabilities
26,835
28,899
(2,064)
109,449
121,667
(12,218)
Cash & cash equivalents
Net financial position (continuing operations) Net financial position (discontinued operations) L
-
-
-
Net financial position (TOTAL)
109,449
121,667
(12,218)
EQUITY AND NET FINANCIAL POSITION (I + L)
131,090
141,355
(10,265)
(*) includes pre-tax result for the period
18
Comments on the capital and financial position Non-current assets totalled Euro 203.808 million at 31 March 2015, compared to Euro 204.730 million at 31 December 2014. The Euro 0.922 million decrease was due to the net effect of investments of Euro 1.129 million, depreciation and amortisation of Euro 3.250 million, a negative foreign exchange translation effect of Euro 0.072 million, changes in equity accounted investments of Euro 1.458 million and a negative figure for other movements totalling Euro 0.187 million. Net working capital moved from a negative figure of Euro 44.135 million at 31 December 2014 to a negative figure of Euro 53.643 million at 31 March 2015. The deterioration of Euro 9.508 million was due to the following: (a)
a Euro 32.150 million increase in Current assets that was mainly due to a Euro 30.694 million increase in Trade and other receivables. This reflected the increase in Parent Company deferred charges relating to the second quarter rental charges for the two exhibition sites, which were paid in advance in January, and to the trend in invoices and cash-in for events in the quarter under review;
(b)
a Euro 41.658 million increase in Current liabilities from the net effect of: -
-
-
an increase in Trade payables of Euro 6.864 million due to the increase in stand-fitting operations of the subsidiary Nolostand; an increase in Pre-payments of Euro 21.118 million, which was the net of increases for pre-payments invoiced to clients for exhibitions to be held in future quarters (in particular Host, Tuttofood, Plast, Salone del Mobile, Euroluce, and Ipack-Ima) and a decrease in pre-payments for exhibitions held in the first quarter 2015 (in particular for the January edition of HOMI); a Euro 14.458 million increase in Provisions for risks and charges and other current liabilities due to higher payables to exhibition organisers; Group VAT payables; and the higher provisions for risks and charges for the indemnity of Euro 1.451 million payable to the previous Chief Executive Officer.
At 31 March 2015, Non-current liabilities totalled Euro 19.075 million compared to Euro 19.240 million at 31 December 2014. Group equity at 31 March 2015 was Euro 19.372 million compared to Euro 17.034 million at 31 December 2014, an increase of Euro 2.338 million that reflected the effect of the following: a Euro 1.763 million increase in the pre-tax profit for the period; a Euro 0.003 million decrease due to the remeasurement of defined benefit plans; a Euro 0.578 increase in the translation reserve. Equity attributable to non-controlling interests was Euro 2.269 million at 31 March 2015 compared to Euro 2.654 million at 31 December 2014. The Euro 0.385 million decrease reflects: a Euro 0.360 million decrease in the result for the period; a Euro 0.025 decrease in the translation reserve. Information on the change in financial assets and liabilities is given in the comment on the 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, 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.
20
Attachment 1 List of companies included in the area of consolidation and other equity investments at 31 March 2015
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
42,147
Fully consolidated companies Fiera Milano Media SpA Milan, p.le Carlo Magno 1 Fiera Milano Congressi 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
Stand fitting services
7,500
100
100
100
Fiera Milano SpA
R $ 36,014
100
99.98
Nolostand SpA Milan, p.le Carlo Magno 1 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 Interteks Uluslararası Fuarcılık A.Ş. Istanbul, Mim Kemal Öke Cd No 6 Nişantaşı 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 W est
Organisation of exhibitions abroad
99.98 Fiera Milano SpA 0.02
0.02
Nolostand SpA
Organisation of exhibitions abroad
R $ 941
75
Organisation of exhibitions abroad
INR 20,000
99.99
99.99
99.99
Fiera Milano SpA
Organisation of exhibitions abroad
RUB 10,000
100
100
100
Fiera Milano SpA
Organisation of exhibitions abroad
TRY 1,308
60
60
60
Fiera Milano SpA
Organisation of exhibitions abroad
ZAR 100
85
85
85
Fiera Milano SpA
Organisation of exhibitions abroad
CNY 5,380
75
75
75
Fiera Milano SpA
Organisation of exhibitions abroad
CNY 200
74.25
99
W orldex Ltd
Organisation of exhibitions abroad
25
49
49
Fiera Milano SpA
75
99
Eurofairs International 75 Consultoria e Participações 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
49
Organisation of exhibitions abroad
USD 500
49
100
Hannover Milano Global 100 Germany GmbH
Organisation of exhibitions abroad
HKD 10
49
100
Hannover Milano Global 100 Germany GmbH
Organisation of exhibitions abroad
INR 274,640
48.99
99.99
Hannover Milano Global 99.99 Germany GmbH
Organisation of exhibitions abroad
INR 207,523
24.5
50
120
20
Hannover Milano Fairs India 50 Pvt Ltd
Milan International Exhibitions Srl under liquidation Rho, S.S.Sempione 28
Other
20
20
Fiera Milano 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
1,403
2
2
Uktas Uluslararasi Kongre Sarayi Tesisleri Isletmeciligi Tic. A.Ş. Istanbul
Other
TRY 17,700
0.07
0.07
2
Fiera Milano Media SpA
Fiera Milano Interteks 0.07 Uluslararası Fuarcılık A.Ş.
(*) Euro or other currencies as specifically indicated
21