1

Marzo 2014

FY 2014 Results

March 2015

2

Corporate structure

(1) The percentage is calculated net of treasury shares

Non-core

investments

53.1% 56.0% 57.7% 51.3%

€644m €1.35Bio €392 m

Generation,

marketing and

supply to final

customers in both

electricity and

natural gas

sectors

All Media sectors

from dailies and

periodicals to

radio, Internet, and

advertising

Global automotive

components

supplier (filters,

engine air and

cooling systems

and suspensions)

Nursing homes,

rehabilitation and

hospital

management

Education

Private equity

NPL

Revenues

2014

Businesses

Competitive

position

Leader in circulation of Italian dailies

N.1 news magazine

N.1 Italian information website

Third Italian radio network

Leader in its core

businesses (filters

and suspensions)

in Europe and

South America

--

Leader in Italian

long term care

(nursing homes and

rehabilitation)

Total € 2.4 Bio

(1) (1)

At 31 December 2014

(2)

(2) Assets held for sale

3

• Founded in 1976 by Carlo De Benedetti; controlled (45.9%) by COFIDE-Gruppo

De Benedetti

• Long term investment strategy, with focus on controlling stakes

• Balanced portfolio of businesses, with leading positions in their respective

businesses

• Active role in governance and in strategic decision making of portfolio

companies

• No leverage and significant liquidity available at holding company level

• Commitment to low cost structure

CIR Group profile

4

• On July 23, 2014 CIR, Sorgenia Holding and VERBUND AG signed an agreement

with creditors for the restructuring of Sorgenia’s debt. At the same time, Sorgenia

signed a standstill agreement with the lending banks.

Such agreement includes a capital increase of ~€400 million, which will be entirely

subscribed by the banks, through the conversion of their loans into Sorgenia’s

capital. A further debt conversion is envisaged, through the subscription by the

banks of a ~€200 million mandatory convertible loan.

• The current shareholders will not take part to the capital increase and will bear no

further charges; it is agreed however that they will receive an earn‐out equal to

10% of any distribution or sale proceeds, in excess of the capital subscribed by

the lending banks capitalized at a rate of 10% p.a.

• The debt restructuring process followed the “182 bis” court procedure, which was

concluded on February 25, 2015, when the Court of Milan approved the debt

restructuring plan

• Over the coming weeks, after the approval of Sorgenia’s 2014 annual report by

the shareholders meeting, the formal steps to transfer control of the company to

the lending banks will be completed. Thereafter, CIR will no longer hold shares in

Sorgenia

Sorgenia – Debt restructuring plan approved by the Court

5

• Following the Sorgenia debt restructuring agreement, pursuant to IFRS 5, CIR

changed the consolidation methodology of the Sorgenia group.

• According to the above principle, Sorgenia is not consolidated in the CIR

Group accounts on a line by line basis anymore: all assets and liabilities are

shown instead as a single line item called “Assets / Liabilities held for sale”, in

the balance sheet as well as in the income statement

Sorgenia - Change in consolidation principles

6

• Consolidated 2014 net income: - € 23.4 million (vs. -€ 269.2 million in 2013),

entirely due to non-recurring items totalling € 35.4 million (€ 14.6 million

related to the early redemption charges of CIR 2024 Notes, and € 20.8

million of non-performing loans write-down).

Excluding extraordinary items, 2014 result would have been +€ 12 million

• Consolidated net financial position of the CIR Group at December 31, 2014:

- €112.8 million (vs. - €1.845,3 at 31 December 2013), including:

- A net financial surplus at holding level of €379.5 million

- A net debt of consolidated subsidiaries (excluding Sorgenia) of - €492.3

million (vs. - €528.1 at 31 December 2013)

FY 2014 consolidated financial highlights

7

Consolidated income statement

€ m

Group Net income (269.2) (23.4)

(31.9) Interest expense (42.3)

17.1

2013 2014

EBIT

EBITDA 189.0 196.8

80.6

Revenues 2,403.4 2,392.6

(183.5) Income taxes (28.6)

(1,054.1) Loss on assets held for sale (18,3)

(1) Reclassified by deconsolidating Sorgenia

(2) Including CIR bond early redemption charges

(3) Including NPL write down

(1)

491.3 Lodo Mondadori non-recurring income

9.7 Net Income including third party interests (761.1)

--

(8.6)

(3)

(2)

8

Consolidated net income by business sector

€ m

2013 2014

6.1 KOS Group 6.3

12.2 Sogefi Group

Espresso Group 2.1 4.8

2.1

(1)

Non-recurring income (236.6) (35.4)

Net result (269.2) (23.4)

(1) Pro-rata share of subsidiaries’ net income

(25.8) Total operating companies 13.1

(2) Including Sorgenia write-downs and Lodo Mondadori cash in 2103; NPL write down and early redemption charges of

CIR 2024 Notes in 2014

(46.2) Sorgenia Group (before write-downs) (0.1)

(2)

Cir Group holdings (6.8) (1.1)

9

Consolidated balance sheet – main group assets

€ m

Group equity in consolidated balance sheet 31 Dec. 2013 31 Dec. 2014

124.1 KOS 129.5

99.7 Sogefi

Espresso 344.5 347.9

95.1

(3) Including provisions for legal expenses and taxes related to Lodo Mondadori cash in

(2) Non Performing Loans portfolios

(1) Including Cir Ventures, Education and other minor investments

Fixed assets 18.8 18.1

568.3 Total operating companies 572.5

NPLs 76.9 49.3

Private equity 63.9 67.7

Other investments 39.1 33.9

Other assets/liabilities

Net cash

(174.0)

538.0

(16.5)

379.5

(2)

(1)

(3)

1,131.0 1,104.5 Consolidated shareholders’ equity

10

Consolidated net financial position

€ m

31 Dec. 2013 31 Dec. 2014

(155.7) KOS Group (157.0)

(304.6)

CIR Group holdings 538.0 379.5

Sogefi Group

Espresso Group (73.5) (34.2)

(304.3)

(2,383.3) Total subsidiaries (492.3)

Consolidated net financial indebtedness (1,845.3) (112.8)

5.6 Other subsidiaries 3.2

Total shareholders’ equity 1,602.3 1,573.2

Consolidated net invested capital 3,447.6 1,686.0

(1) Including third party interests

(1)

Sorgenia Group (1,855.1) --

11

• On October 13, 2014 CIR S.p.A. announced the results of the tender offer on

its 5.75% 2024 Notes (€ 210.1million outstanding), as well as of the

subsequent bondholders’ meeting, that approved the proposal to modify the

terms and conditions, in order to provide for the early redemption of all

outstanding Notes:

• Notes tendered were 51% of outstanding

• Votes in favour of early redemption were 54.1%

• The bond was therefore redeemed in full on 16 October 2014, at a total cost

of € 237.1 million, of which € 10.1 million accrued interest and € 17.0 million

tender offer premia.

• Following the redemption of the 2024 Notes, Cir S.p.A. has no outstanding

financial debt

Early redemption of the CIR 2024 Notes

12

• Decrease of net cash at holding system level is mainly due to taxes and expenses

related to Lodo Mondadori, and charges for early the redemption of the 2024 bond

Net financial position at “holding system” level

Net financial position at 31 Dec. 2014 Evolution of net financial position

(1)

(1) Fair value of securities + securities income, trading

(2) Operating costs, extraordinary costs, taxes, etc.

(2)

13

Composition of liquid assets and gross financial debt

Liquid assets at 31 December 2014

€ m

Hedge funds

Other (stocks, equity funds)

797.1

96.0

87.6

27.8

382.1

95.1

30.1

31 Dec.

2013

31 Dec.

2014

Cash and time deposits

Corporate bonds

Government bonds

83.8

15.3

57.9

99.3

5.7

550.7

Total liquid assets

31 Dec.

2013

31 Dec.

2014

CIR S.p.A. 2004/2024 257.7 --

259.1 2.6 Gross financial debt

Other debt 1.4 2.6

Fixed income funds 31.9 94.0

14

2014 Subsidiaries’ financial and operational highlights

Key strategic objectives 2014 Highlights

Expansion of digital platforms, leveraging on

leadership in traditional media

Further efficiency improvement

Selective growth in emerging industry sectors, with

international focus

Further consolidation in Italian nursing and

rehabilitation

Geographical expansion (India)

Global footprint, growth in non-European countries

Product innovation

Further efficiency improvement and restructuring of

manufacturing footprint

Decrease of press advertising revenues (-10.0%), in line with market

Still, in such challenging market, Espresso reported positive net results, growing EBITDA and decreasing net debt, thanks to continuing efforts on efficiency improvement

La Repubblica is the top daily newspaper for newsstand sales and readership

Repubblica.it confirms its leadership among Italian news sites with 1.6 million unique users per day

Net debt €34.2 m vs. €73.5m at the end of 2013

Espresso

Sogefi

KOS

Non-core

investments

Positive performance of Education business

Continuing growth of revenues (+4.7%) thanks to ongoing organic and

external growth

Margins steady thanks to efficiency improvement

Double digit growth of revenues in North America (+10.6%) and Asia

(+39.5%); continuing weakness in Latin American markets. Stable at

consolidated level (+4.7% at constant exchange rates)

Negative effect of still declining South American market and

restructuring charges

15

Espresso - overview

2014 Revenues breakdown

NATIONAL PRESS

DIGITAL

ADVERTISING

National daily newspaper

18 Regional newspapers throughout Italy

Group websites

Three national radio stations

LOCAL

NEWSPAPERS

RADIO

Collection of advertising

€ m

2013 2014

Revenues 689.1 643.5

Net income 3.7 8.5

EBITDA 55.1 59.8

Key financials Operating structure

2014 Performance and outlook

• Despite the continuing decline of the publishing sector, net

results were positive and slightly better than the previous year

• Circulation revenues at €232.9m (-6.1% vs FY 2013) decreased

less than the market (-11.4%); total advertising revenues

decreased 7.6% to € 365.6m, with internet +4.9%, radio flat and

printed press -10.0%

• 1.6 million unique users per day on Repubblica.it, which

confirms its leadership position among Italian news sites

• On April 2, 2014 a €100m five year convertible bond was issued,

with a coupon of 2.625% and conversion price of €2.1523

• On June 30, 2014 the integration of Espresso’s network

operator Rete A with Telecom Italia Media’s was completed,

creating the main independent network operator in Italy

(Persidera)

• On January 30, 2015 the sale of All Music (Deejay TV) to

Discovery Italia was completed

• FY 2015 outlook: continuing downwards trends in

circulation and advertising, albeit at a lower rate of

decline vs. 2014

16

Sogefi - overview

Revenues 1,335.0 1,349.4

Net income 21.1 3.6

EBITDA 129.5 109.5

Key financials

ENGINE SYSTEMS

DIVISION

SUSPENSION COMPONENTS DIVISION

PRECISION SPRINGS TRUCKS CARS

€ m

2013 2014

• Consolidated revenues slightly up vs. 2013 (+ 1.1%),

thanks to the positive performance of North America

(+10.6%) and Asia (+39.5%), and despite the sharp

decline reported in South America (-19.2%)

• 2014 EBITDA decreased by 15.5%. The fall was mainly

due to the slowdown of the South American market, the

negative impact of exchange rates and restructuring

costs

• Outlook: the global car market is expected to continue

growing in 2015. Sogefi expects to maintain positive

trends in North America, China and India, while in South

America a modest recovery from the low volumes

recorded in 2014 is expected.

2014 Performance and outlook

FORD

RENAULT/NISSAN

PSA

FCA/CNH Industrial

GM

DAIMLER

VOLKSWAGEN/AUDI

BMW

VOLVO TOYOTA

DAF/Paccar

2014 Revenues breakdown

MAN

CATERPILLAR

HONDA

OTHERS

12.5%

12.3%

10.6%

11.4%

8.3% 7.4%

3.5%

2.9%

2.2%

2.1% 1.6% 1.3% 0.5% 0.5% 22.9%

64.6%

15.4%

Europe

NAFTA

Mercosur 13.5%

6.1% 0.4%

Weight of non-

European

markets is stable

35.4%

Countries Customers

Asia others

17

KOS - overview

€ m 2011 2012

Revenues 372.5 392.4

Net income 11.8 12.3

EBITDA 56.1 60,4

Key financials

SHAREHOLDERS

HOSPITAL

MANAGEMENT NURSING HOMES REHABILITATION

CIR (51.3%)

ARDIAN (46.7%)

Management and others (2.0%)

Operating structure

2013 2014

5.2

2.3

5.7

10.2

36.6

114.3 7.6 23.5

45.4

107.1

18.8

Revenues breakdown by region (2014)

4.5

• 2014 revenues were up 5.3% to € 392.4 million in FY 2014,

thanks to business development across all three business

units

• Increase in EBITDA was mainly due to greenfields undertaken

in 2013 and acquisitions completed in 2014

• During 2014 2 new nursing homes were completed, one

nursing home and 2 rehabilitation homes were acquired.

• Diagnostic and therapeutic technology activities are continuing

in India, through the ClearMedi Healthcare JV, as well as in

the UK

• The company now has 73 nursing homes in the centre and

north of Italy with a total of 6,820 beds, plus ca. 200 under

construction

• Main objectives are to pursue market consolidation in core

businesses and to selectively expand internationally, with a

primary focus on India

2014 Performance and outlook

18

• Education

- SEG (Swiss Education Group), a world leader in education for hospitality

management (hotels, restaurants, etc.), with over 6,000 students coming from

110 different countries. CIR has an interest of 17.4% in SEG. The book value of

the investment at December 31, 2014 was €21.1 million

• Private equity

- Diversified portfolio of private equity funds and direct minority private equity

participations, that produced an annual double digit return over its life. The fair

value at December 31, 2014 was € 67.7 million

• NPL

- At the end of December 2014 the net value of CIR investment in the non-

performing loan portfolios amounted to €49.3 million, after a write down of €

20.8 million following the impairment test.

Non-core investments

19

• This document has been prepared by CIR for information purposes only and for use

in presentations of the Group’s results and strategies.

• For further details on CIR and its Group, reference should be made to publicly

available information, including the Annual Report, the Semi-Annual and Quarterly

Reports

• Statements contained in this document, particularly the ones regarding any CIR

Group possible or assumed future performance, are or may be forward looking

statements and in this respect they involve some risks and uncertainties

• Any reference to past performance of CIR Group shall not be taken as an indication

of future performance

• This document does not constitute an offer or invitation to purchase or subscribe for

any shares and no part of it shall form the basis of or be relied upon in connection

with any contract or commitment whatsoever

Disclaimer

20

www.cirgroup.com