(3 rd. Operational and

Transcription

1 Consolidated Interim Manage ement Report at 30 September 2012 (3 rd Quarter 2012) This document is available in the Investor Relations section of o the Company website, Fiera Milano SpA Registered office: Piazzale Carlo Magno, Milan Operational and administrative office: SS del Sempione,, Rho (Milan) Share Capital: Euro 42,147, fully paid up. Companies Register,, Tax Reference and VAT no Economic Administrative Register Rho (Milan), 9 November 2012

2 Contents Corporate bodies and Independent Auditor page 3 Group structure page 4 Report on operations in the third quarter Summary of results and significant events during the quarter page 6 Net financial position page 11 Business performance by operating segment and by geographic area page 12 Group personnel page 16 Significant events occurring after the end of the quarter page 17 Business outlook page 17 Accounting standards and consolidation criteria page 18 Financial Statements Consolidated income statement page 19 Reclassified consolidated balance sheet page 20 Notes on the balance sheet and financial performance page 21 Declaration of the Manager responsible for preparing the Company s Financial page 22 Statements Attachment 1 List of companies included in the area of consolidation and other equity investments at 30 September 2012 page 23 2

3 Corporate bodies and Independent Auditor BOARD OF DIRECTORS Michele Perini Chairman Attilio Fontana Deputy Vice Chairman* Renato Borghi Vice Chairman* Enrico Pazzali Chief Executive Officer Roberto Baitieri Director* Pier Andrea Chevallard Director* Davide Croff (1) Director* Giampietro Omati Director * Romeo Robiglio 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 INTERNAL AUDIT COMMITTEE Renato Borghi Roberto Baitieri Davide Croff (1) REMUNERATION COMMITTEE Attilio Fontana Giampietro Omati Romeo Robiglio BOARD OF STATUTORY AUDITORS SUPERVISORY BOARD ( Leg. Dec. 231/01) Stefano Mercorio Chairman Michele Perini Ugo Lecis Alfredo Mariotti Statutory auditor Pier Andrea Chevallard Andrea Pizzoli Damiano Zazzeron Statutory auditor Antonio Guastoni Substitute auditor Pietro Pensato Substitute auditor MANAGER RESPONSIBLE FOR PREPARING THE COMPANY S FINANCIAL STATEMENTS (LAW 262/2005) Flaminio Oggioni (1) Co-opted on 29 October 2012 to replace Michele Motterlini who resigned on 30 July The mandates of the Board of Directors and the Board of Statutory Auditors were renewed by the Shareholders Meeting on 27 April 2012 and will expire with the Shareholders Meeting to approve the Financial Statements to 31 December 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 provided by law and by the Company s articles of association, also, in conjunction with the Chief Executive Officer, has the following responsibilities: relations with shareholders, national and international institutional relations, internationalisation activities, strategic and innovative initiatives, verification of the implementation of Board of Directors resolutions and supervision of internal auditing. The Chief Executive Officer has been given 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 shareholder 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 granting guarantees to third parties. INDEPENDENT AUDITOR PricewaterhouseCoopers SpA The mandate, given by the Shareholders Meeting of 28 October 2005 and modified by the Shareholders Meeting of 10 January 2007 following the change in the accounting year-end of the Company, and extended for a further six financial years by the Shareholders Meeting of 27 April 2007, is for the financial year to 30 June 2006 and the financial years ending 31 December

4 Group Structure The Fiera Milano Group is involved in all the normal phases of the exhibition and congress sector and is one of the leading worldwide integrated companies in the sector. As described in the 2011 Financial Statements, the new strategic direction, the corporate reorganisation and rationalisation of Fiera Milano Group, and the expansion in international markets has resulted in changes to the internal organisational structure and to the valuation and corporate reporting system. Consequently, since 31 December 2011, the operating segments have been redefined as follows: - Italian Exhibitions: this segment covers all activities for the organisation and hosting of exhibitions and other events in Italy through the use, promotion and offer of furnished exhibition spaces, of project support, and of ancillary services. Specifically this segment includes all activities associated with exhibitions (including end services for exhibitors and visitors): 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. These activities are carried out by the Parent Company Fiera Milano SpA and by Milan International Exhibitions Srl, a company based in Rho. Since 1 June 2012, TL.TI Expo SpA has been incorporated into the Parent Company Fiera Milano SpA. - 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. These activities are carried out by: Hannover Milano Global Germany GmbH, a joint venture with Deutsche Messe AG of Hanover, which operates in China through two subsidiaries Hannover Milano Fairs Shanghai Co. Ltd and Hannover Milano Fairs China Ltd and in India through Hannover Milano Fairs India Pvt Ltd and its subsidiary, Global Fairs & Media Private Ltd, in which it acquired a 50% shareholding on 23 January 2012; Cipa FM Publicações e Eventos Ltda (hereinafter Cipa FM ), with a registered office in Sao Paulo; Fiera Milano India Pvt Ltd, with a registered office in New Delhi; OOO Fiera Milano, with a registered office in Moscow; Fiera Milano Interteks Uluslararasi Fuarcilik A.S. (hereinafter Interteks) a leading exhibition company in the Turkish market, following acquisition of 60% of the share capital by the Parent Company Fiera Milano SpA on 3 August 2012; Cape Gourmet Food Festival PTY Ltd. (hereinafter Cape Gourmet), a South African exhibition company, following acquisition of 75% of the share capital by the Parent Company Fiera Milano SpA on 31 August Stand-fitting services: this segment covers the activities of Nolostand SpA in 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 those associated with the organisation of events and congresses. This segment includes the following sectors: publishing and digital services; events and training. These sectors are headed by Fiera Milano Media SpA. 4

5 - Congresses: this segment covers the management of conferences and events by Fiera Milano Congressi SpA. The following table September shows the Fiera Milano Group structuree by business segment at 30 5

6 Report on operations in the third quarter Summary of results and significant events during the quarter The following table shows the main figures of the Group for the third quarter and the first nine months of 2012 with comparable data for the same quarter and the nine-month period of the previous year, as well as the figures for the full year Fiera Milano Group Full year Summary of key figures 9 months 9 months at 31/12/11 (Amounts in 000) at 30/09/12 at 30/09/11 at 30/09/12 at 30/09/11 278,000 Revenues from sales and services 44,860 49, , ,773 30,917 Gross operating result -7,410-1,628 23,320 18,393 15,518 Net operating result (EBIT) -10,931-6,980 13,734 8,292 12,716 Profit/(loss) before income tax: -11,903-7,839 10,581 5,815 12,373 - Attributable to the Shareholders of the controlling entity -12,150-7,732 10,376 5, Attributable to Non-controlling interests ,115 Cash flow for the Group and Non-controlling interests (a) -8,382-2,487 20,167 15, ,886 Net capital employed (b) 163, , , ,529 covered by: 68,210 Equity attributable to the Group 68,963 * 68,653 * 68,963 * 68,653 * 2,456 Equity attributable to Non-controlling interests 2,366 * 411 * 2,366 * 411 * 52,220 Net financial debt/(cash) 92,653 58,465 92,653 58,465 33,234 Investments (continuing operations and discontinued operations) 8,918 2,653 11,973 23, Employees (no. of permanent employees at end of period) * includes pre-tax result for the period (a) Cash flow is represented by the sum of the result for the period, depreciation and amortisation and provisions. (b) Net capital employed is represented by the sum of non current assets, non current liabilities and net working capital. The normal quiet period for exhibitions in July and August and the contained drop in exhibition demand in Italy negatively influenced the third quarter results of Fiera Milano Group but did not lead to a year-on-year decline in the results for the first nine months. The latter show an upward trend compared to the figures for the same period of the previous financial year. There was a 23% decline in net exhibition space occupied in Italy in the quarter under review with a consequent effect on revenues and gross operating result. In addition to the extended slowdown in the domestic market, which is now affecting almost all exhibitions although to differing degrees, the results of the quarter were influenced by the transferral of the exhibition, Intercharm, to October, which resulted in over 14,000 square metres less of exhibition space, and also by the repositioning of Macef the September edition of which was held without the parallel event, Macef AbitaMi. The trend was partly compensated by the performance of the congress business and by activities outside Italy (where exhibition space occupied increased by 7%) in fast-growing markets which remain the priority target markets of the Group. Exhibitions were added to the Group portfolio through the acquisitions made during the quarter in Turkey and South Africa and results were boosted by the success of the first edition of the annual exhibition Enersolar, launched in Sao Paulo in Brazil by Cipa FM. The positive performance of the congress business reflected the medical and scientific congresses held in the quarter, the two most important of which were the World Congress on Pain and that of the European Society of Cataract & Refractive Surgeons. During the third quarter a series of important concerts were held and these included the Heineken Jammin Festival; these form part of the strategy of expanding the Group activity in the summer period. The decline in the gross operating result not only reflects the lower amount of exhibition space occupied but also the increase to the Parent Company of the management costs for the exhibition 6

7 site and higher rental costs. It should also be noted the absence of any income relating to the anticrisis initiatives from the controlling shareholder, Fondazione Fiera Milano, unlike in the same quarter of the previous financial year (Euro million). The internationalisation of the Group continued with the acquisition on 3 August 2012 of 60% of Interteks for a total purchase price of USD million (Euro million 1 ) of which USD million (Euro million 1 ) paid on that date. The remaining USD million (Euro million 1 ) is Fiera Milano s share of the USD million (Euro million 1 ) recapitalisation of the company that was carried out following finalisation of the acquisition. The Turkish exhibition company is the leader in the local market with a diversified portfolio of exhibitions in the beauty and personal care, home and garden, sailing, and logistics sectors. Interteks has several new initiatives in the pipeline that include International Art Istanbul, Wedding and Reatech in Istanbul. It also benefits from the recent expansion of the exhibition site at the Istanbul Congress Center. On 31 August 2012, 75% of Cape Gourmet was acquired for a total purchase price of million South African rand (Euro million 2 ), of which million South African rand (Euro million 2 ) paid on that date. The remaining million South African rand (Euro million 2 ) is to be paid in two years depending on the Good Food & Wine Show achieving certain gross profit targets in the 2012 and 2013 financial years. Cape Gourmet is a South African exhibition company that organises the Good Food & Wine Show, an agrifood exhibition that takes place annually in three cities, Johannesburg (Gauteng), Cape Town and Durban. The exhibition is on its fourteenth edition and is highly successful at targeting both consumers and businesses in the Food & Beverage sector. Lastly, following the approval of the Shareholders Meeting of 27 April 2012, in the third quarter the Parent Company continued the buy-back of treasury shares, which originally began in September In the third quarter 2012, the Parent Company acquired 84,467 treasury shares at an average price of Euro 3.40 per share for a total of ca. Euro 287,000. At 30 September 2012, it held 1,078,778 treasury shares, equal to 2.56% of the share capital. The activities of the Group are highly seasonal due to the impact of biennial and multi-annual exhibitions. Moreover, the absence of exhibitions in July and August has a significant effect on the results of the quarter under review. Given the seasonal nature of the Group s activities, the revenues and results reported in individual quarters cannot be extrapolated to calculate the fullyear figures and may vary substantially from one quarter to the next. A detailed analysis of the results for the third quarter 2012 and of the figures for the first nine months to 30 September 2012 reveals the following trends: Revenues from sales and services totalled Euro million, a decrease compared to the figure for the same period of the preceding financial year (Euro million). Revenues reflected the negative trend in exhibitions in Italy, which was partly compensated by the good performance of exhibitions outside Italy and of the congress segment. Revenues from sales and services in the first nine months of 2012 were Euro million, a 9% increase compared to the corresponding period of 2011 (Euro million). The higher revenues were mainly attributable to the more favourable exhibition calendar, which in the period under review included the biennial exhibitions Mostra Convegno Expocomfort and Xylexpo held in even-numbered years, as well as the triennial exhibitions, Ipack-Ima and Plast. This and the good performance of foreign exhibitions more than compensated for the absence of the biennial exhibitions held in uneven numbered years (the main one being Tuttofood). There was also a positive increase in revenues from international congresses held in the third quarter of 2012 in the MiCo Milano Congressi centre. 1 Figures in Euro are shown using the exchange rate of 3 August 2012 (EUR/USD = ). 2 Figures in Euro are shown using the exchange rate of 31 August 2012 (EUR/Rand = ). 7

8 The main changes were as follows: - Annual exhibitions organised by the Group in Italy (-44,765 square metres): the decline was mainly due to the absence of Macef-Abitami (-34,775 square metres) and to the decrease in exhibition space occupied by Macef Autunno (-7,940 square metres); - Annual exhibitions organised by third parties in Italy (-19,865 square metres): the decline was mainly due to the postponement to the fourth quarter of the exhibition InterCharm (-14,555 square metres); - Congresses with related exhibition areas (+5,560 square metres): the increase mainly reflected new international congresses held in the new MiCo Milano Congressi centre. Congresses with related exhibition areas only includes those congresses that require ancillary exhibition space; - Annual exhibitions organised by the Group abroad (+7,535 square metres): the change mainly reflected the exhibitions held in China: Motor Show (+6,730 square metres) and Truck World, that wasn t held in the quarter (-7,980 square metres); the exhibitions that came through the acquisitions made in the quarter, the International Bodrum Yacht Show (+2,400 square metres) and the Good Food & Wine Show in Gauteng (+3,910 square metres); and also the launch of the first edition of the exhibition Enersolar (+2,460 square metres) in Sao Paulo in Brazil; - Biennial exhibitions organised by the Group abroad (-2,670 square metres): the third quarter 2011 included the two exhibitions, Braseg and Ecoenergy in Brazil. The table on the following page 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. 8

9 Fiera Milano Group Summary operating figures to 30/09/12 to 30/09/11 Change Organised Organised Organised Total by the Group Total by the Group Total by the Group Number of exhibitions: Italy annual biennial multi-year Foreign Countries annual biennial multi-year Number of congresses with related exhibition space - Italy Net sq.metres of exhibition space: 266, , , ,810-54,205-39,900 Italy 194,265 74, , ,220-59,070-44,765. annual (a) 194,265 74, , ,220-59,070-44,765. biennial multi-year (a) of which congresses with related exhibition space 13,875-8,315-5,560 - Foreign Countries 72,455 72,455 67,590 67,590 4,865 4,865. annual 72,455 72,455 64,920 64,920 7,535 7,535. biennial - - 2,670 2,670-2,670-2,670. multi-year Number of exhibitors: 4,820 1,815 5,236 2, Italy 4,410 1,405 5,000 1, annual (b) 4,410 1,405 5,000 1, biennial multi-year (b) of which congresses with related exhibition space Foreign Countries annual biennial multi-year The Gross operating profit for the quarter was negative for Euro million, a decrease of Euro million compared to the figure for the same quarter of the preceding financial year. The decrease mainly reflected the trend in revenues in the period and was also affected by the increased costs in the Parent Company for the management of the exhibition site and for rents. The absence of any income relating to the anti-crisis initiatives from the controlling shareholder, Fondazione Fiera Milano, should also be noticed. In the same quarter of the previous financial year it was Euro million. The gross operating profit in the first nine months of the year was Euro million, an increase of Euro million compared to the figure in the same quarter of It benefited from the positive trend in revenues in the first nine months as described above. This trend was only partly offset by higher costs, mainly those for the management of the exhibition site and the rental costs and those sustained by Fiera Milano Congressi SpA for the new MiCo - Milano Congressi congress centre. The absence of any income relating to the anti-crisis initiatives from the controlling shareholder, Fondazione Fiera Milano, should also be noticed. In the same period of 2011 it was Euro million. 9

10 The Net operating result (EBIT) was negative for Euro million compared to a negative figure of Euro million in the third quarter of The Euro million decrease in the result reflected the change in the gross operating profit that was partly compensated by lower risk provisions; in the third quarter 2011 these had included the redundancy incentives paid by the Parent Company. The net operating profit in the first nine months of 2012 was Euro million (Euro million in the first nine months of 2011) and the increase mainly reflected the increase in the gross operating profit of the period. The Pre-tax result was negative for Euro million compared to a negative figure of Euro million in the third quarter The Pre-tax result attributable to the Group was negative for Euro million (negative for Euro million in the third quarter 2011) and that attributable to non-controlling interests was Euro million (negative for Euro million in the third quarter 2011). Cash flow in the quarter (calculated as the pre-tax result plus depreciation, amortisation and provisions) was negative for Euro million compared to a negative figure of Euro million in the same quarter of the preceding financial year. 10

11 Net financial position The Group net financial position and its breakdown are shown in the following table. Group Net Financial Position 31/12/11 (Amounts in '000) 30/09/12 30/06/12 Change 19,865 A. Cash (including bank balances) 19,328 14,902 4,426 - B. Other cash equivalents C. Securities held for trading ,865 D. Cash and cash equivalents (A+B+C) 19,328 14,902 4,426 3,451 E. Current financial assets - 2,135-2,135 54,817 F. Current bank borrowings 66,054 63,114 2,940 5,395 G. Current portion of non-current debt 4,927 4, H. Other current financial liabilities 28,379-28,379 60,212 I. Current financial debt (F+G+H) 99,360 68,034 31,326 36,896 J. Current net financial debt (cash) (I-E-D) 80,032 50,997 29,035 15,324 K. Non-current bank borrowings 12,009 13,111-1,102 - L. Debt securities in issue M. Other non-current liabilities ,324 N. Non-current financial debt (K+L+M) 12,621 13, ,220 O. Net financial debt (cash) 92,653 64,108 28,545 Net financial debt at 30 September 2012 was Euro million compared to Euro million at 30 June Current net financial debt was Euro million (Euro million at 30 June 2012), an increase of Euro million. The increase reflects the negative cash flow caused by the absence of activity in July and August, the investments made for the acquisitions of Interteks and Cape Gourmet and the negative trend in cash flow caused by net working capital. Moreover, other financial debt increased mainly due to the item in the business current account for the six-monthly rent paid in advance to Fondazione Fiera Milano. Non-current financial debt was Euro million (Euro million at 30 June 2012), a decrease of Euro million due to the dual effect of the gradual pay down of non-current financing and to new debt for financial leases. 11

12 Business performance 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 (Amounts in '000) 9 months 9 months to 30/09/12 to 30/09/11 to 30/09/12 to 30/09/11 Revenues from sales and services - By operating segment: % % % %. Italian Exhibitions 31, , , , Foreign Exhibitions 3, , , , Stand-fitting Services 6, , , , Media 2, , , , Congresses 6, , , , Total revenues gross of adjustments for inter-segment transactions 48, , , , Adjustments for inter-segment transactions -3,983-5,021-22,974-22,463 Total revenues net of adjustments for inter-segment transactions 44,860 49, , ,773 - By geographic area:. Italy 41, , , , Foreign countries 3, , , , Total 44, , , , Gross operating result % of % of % of % of - By operating segment: revenues revenues revenues revenues. Italian Exhibitions -9, , , , Foreign Exhibitions , , Stand-fitting Services , , , Media Congresses , , Adjustments for inter-segment transactions Total -7, , , , By geographic area:. Italy -8, , , , Foreign countries , , Total -7, , , , Net operating result (EBIT) % of % of % of % of - By operating segment: revenues revenues revenues revenues. Italian Exhibitions -10, , , , Foreign Exhibitions , , Stand-fitting Services , Media Congresses , , Adjustments for inter-segment transactions Total -10, , , , By geographic area:. Italy -11, , , , Foreign countries , , Total -10, , , , Employees (no. of permanent employees at end of period) - By operating segment: % % % %. Italian Exhibitions Foreign Exhibitions Stand-fitting Services Media Congresses Total By geographic area:. Italy Foreign countries Total Revenues from sales and services gross of adjustments for transactions among the five operating segments of the Group were Euro million, a Euro million decrease compared to the figure of the third quarter Revenues from Italian Exhibitions totalled Euro million, a decrease of ca. 18% compared to the figure for the same period of the preceding financial year (Euro million). The decline in revenues reflected the poor performance of exhibitions in Italy and, in particular, the absence of the Group s exhibition, Macef AbitaMI. The increase in the first nine months was mainly attributable to the more favourable exhibition calendar which, in the first nine months of 2012, included Mostra Convegno Expocomfort and Xylexpo that are biennial exhibitions falling in even-numbered years, and the triennial exhibitions Ipack-Ima and Plast. 12

13 These more than compensated for the absence of the biennial exhibitions that fall in uneven numbered years (the main one being Tuttofood). - Revenues from Foreign Exhibitions totalled Euro million with a 43% year-on-year increase (in 2011 they were Euro million). The increase in revenues reflected the good demand for exhibition space in Brazil with the launch of the Enersolar exhibition and the additional exhibitions in the Group portfolio resulting from the acquisitions made in Turkey and South Africa during the quarter under review. The increase in the figure for the first nine months was mainly due to Cipa FM and the higher amount of space it rented out. - Revenues from Stand-fitting Services were Euro million in the third quarter 2012, 14% lower than the figure for the third quarter 2011 (Euro million) and reflected a lower demand for exhibition space than in the third quarter However, the figures for the first nine months of 2012 reflected the increase in demand linked to the more favourable exhibition calendar. - Revenues in the Media segment totalled Euro million in the third quarter, a decrease of 37% compared to the figure for the same period of 2011 (Euro million). This was mainly due to the decrease in event sponsorship revenues and a fall in publishing revenues due to the decrease in the advertising market. Compared to the quarterly figures, the figures for the first nine months benefited from the positive trend in poster advertising caused by the more favourable exhibition calendar. - Revenues from Congresses totalled Euro million in the third quarter 2012, an increase of 87% compared to the figure for the same period of 2011 (Euro million). The increase was mainly due to the international congresses, World Congress on Pain and ESCRS (European Society of Cataract & Refractive Surgeons) held in the third quarter in the new congress centre, MiCo Milano Congressi. The year-on-year increase in the figure for the first nine months of 2012 was affected by the absence of revenues from the Villa Erba congress centre following the non-renewal of the lease on this business division from 31 December The consolidated Gross operating result was negative for Euro million and was lower than the figure for the third quarter 2011 (negative for Euro million). The breakdown was as follows: - Italian Exhibitions had a negative gross operating result of Euro million compared to a negative figure of Euro million in the same period of the preceding financial year. The decrease reflected the fall in revenues for the period and the increase in the management costs for the exhibition site and the rental costs payable by the Parent Company. Moreover, there was no income relating to the anticrisis initiatives from the controlling shareholder, Fondazione Fiera Milano (in the third quarter 2011 this was Euro million). - Foreign exhibitions generated a gross operating profit of Euro million compared to a negative figure of Euro million in the same period of the preceding financial year. The increase reflected the increase in revenues for the period. The increase in the figures for the first nine months of the financial year was in line with that of the quarterly figure. - Stand-fitting services had a gross operating profit of Euro million compared to Euro million in the same period of the preceding financial year. The year-on-year decrease was mainly due to the trend in revenues that was only partly compensated by a reduction in operating costs following an optimisation of exhibition costs and a renegotiation of the list prices of some purchase categories. The increase in the gross operating profit for the first nine months of the year was attributable, as already noted for the revenues, to the more favourable exhibition calendar and to a decrease in costs following optimisation actions implemented in the period. - Media had a negative gross operating result of Euro million compared to a negative figure of Euro million in the third quarter The Euro million decrease reflected the aforementioned trend in this segment s revenues. It was, in part, mitigated by the 13

14 strong decrease in operating costs following the significant structural rationalisation. The negative effect of the trend in revenues on the gross operating profit for the first nine months was also partly compensated by the strong reduction in operating costs, in particular those for personnel following the decrease in the headcount that took place in 2011 and for an increase in income for indemnities received following the end of a legal dispute. - Congresses: the gross operating profit of Euro million compared with a negative figure of Euro million in the third quarter of The increase mainly reflected the trend in revenues and the rationalisation of costs. This was in part impacted by the increased operating costs for the new congress centre. The increase in the figures for the first nine months of the financial year was in line with that of the quarterly figure. The Net operating result (EBIT) of the five operating segments in the third quarter 2012, negative for Euro million compared to the negative figure of Euro million in the same period of the preceding financial year, decreased Euro million. This was a less marked decline than that in the gross operating profit as risk provisions fell because those in the third quarter 2011 had included the redundancy incentives in the Parent Company. The breakdown by geographic area in the third quarter showed revenues from foreign activities of Euro million, a year-on-year increase due to the contribution from the launch of the exhibition Enersolar in Brazil and to revenues from the newly acquired company, Cape Gourmet. The year-on-year increases in gross operating profit to Euro million and in net operating profit to Euro million were mainly due to Cipa FM and Cape Gourmet. During the quarter under review, six exhibitions and five congresses with related exhibition space were held in the two sites of fieramilano and fieramilanocity. Net exhibition space occupied totalled 194,265 square metres, compared to 253,335 square metres in the same period of the preceding financial year, whilst the number of exhibitors went from 5,000 in the third quarter 2011 to 4,410 in the third quarter of Exhibitions directly organised by the Group in Italy and abroad occupied 146,910 square metres of net exhibition space, 55% of the total space occupied. Details of exhibitions held in Italy are given in the table on the following page. 14

15 Italian exhibition portfolio Net sq. metres of exhibition space Number of exhibitors Annual Exhibitions: Directly organised to 30/09/12 to 30/09/11 to 30/09/10 to 30/09/12 to 30/09/11 to 30/09/10 - Macef - AbitaMi a) 34,775 - a) Macef Autunno 71,625 79,565 87,120 1,275 1,405 1,380 - Milano Pret-à-Porter (Autumn) 2,830 4,880 4, N.O.W. Fashion Exhibition (Autumn) a) a) 465 a) a) 25 Total annual exhibitions directly organised 74, ,220 92,425 1,405 1,885 1,590 Hosted - Eica a) 3,145 - a) Intercharm b) 14,555 10,740 b) Micam (Autumn) 68,355 70,010 70,915 1,470 1,520 1,470 - Milano Unica (Autumn) 20,795 21,955 21, Mipel (September) 13,445 16,135 15, Nuce (ex Life-Med) 3,340 c) c) 90 c) c) Total annual exhibitions hosted 105, , ,345 2,410 2,710 2,525 Total annual Exhibitions 180, , ,770 3,815 4,595 4,115 TOTAL EXHIBITIONS 180, , ,770 3,815 4,595 4,115 - Congresses with related exhibition space 13,875 8,315 9, TOTAL 194, , ,020 4,410 5,000 4,310 a) The exhibition did not take place b) The exhibition will be held in the fourth quarter of the year c) The exhibition was held in the fourth quarter of the year During the third quarter 2012, five exhibitions were held in the exhibition sites abroad and the net exhibition space occupied totalled 72,455 square metres (in the third quarter 2011, the figure was 67,590 square metres). The number of exhibitors was 410 (236 in the third quarter 2011). Details of the exhibitions organised abroad are given in the following table. Foreign Exhibition portfolio Net sq. metres of exhibition space Number of exhibitors Annual Exhibitions to 30/09/12 to 30/09/11 to 30/09/10 to 30/09/12 to 30/09/11 to 30/09/10 Exhibitions directly organised in China - Motor Show 62,760 56,030 45, Truck World - 7, Total Exhibitions directly organised in China 62,760 64,010 45, Exhibitions directly organised in Turkey - International Bodrum Yacht Show * 2, Total Exhibitions directly organised in Turkey 2, Exhibitions directly organised in South Africa - Good Food & Wine Show Gauteng * 3, Total Exhibitions directly organised in South Africa 3, Exhibitions directly organised in Brazil - SportBiz Taxi Point Enersolar ** 2, Total Exhibitions directly organised in Brazil 3, Total Annual Exhibitions 72,455 64,920 45, Biennal Exhibitions Exhibitions directly organised in Brazil - Braseg - 2, Ecoenergy *** Total Exhibitions directly organised in Brazil - 2, Total Biennal Exhibitions - 2, TOTAL EXHIBITIONS 72,455 67,590 45, * This exhibition belongs to one of the newly acquired companies ** First edition of this exhibition *** From 2012 this exhibition, called Enersolar, has become an annual event 15

16 Group personnel At 30 September 2012, Group employees totalled 738. The breakdown compared to 30 June 2012 was as follows: Total 31/12/11 Italy Permanent employees at end of period 30/09/12 30/06/12 Foreign countries Fully consolidated companies: Total Italy Foreign countries Total Italy Foreign countries Managers Middle management and office staff (including journalists) Total Proportionally consolidated companies (a): 2-2 Managers Middle management and office staff Total TOTAL (a) the indicated data corresponds to pro-quota employees Permanent employees increased by thirty-six units compared to the figure at 30 June This was due to a net increase of eight people in Italy mainly to strengthen the marketing department and to an increase of twenty-eight people abroad primarily as a result of the acquisition of both Interteks and Cape Gourmet. 16

17 Significant events occurring after the end of the quarter During July 2012, the Parent Company continued the share buy-back programme, which began in September 2011 under the mandate approved by the Ordinary Shareholders Meeting of 21 April 2011 and subsequently renewed at the Ordinary Shareholders Meeting of 27 April In the period since 30 September 2012, the Parent Company has acquired 37,438 treasury shares at an average price of Euro 3.99 per share. At the date of the present Third Quarter Interim Management Report, it holds a total of 1,116,216 treasury shares, equal to 2.65% of the share capital. Business outlook Given the ongoing recession in Italy and its effect on the exhibition sector, Fiera Milano Group is active on all fronts to ensure that the full-year 2012 targets communicated to the market of 1.8 million net square metres of exhibition space occupied in Italy and abroad and a gross operating profit of Euro 20 million are met. The Group continues to monitor trends in industrial sectors and is repositioning the main exhibitions that it owns. The Group remains focused on its internationalisation strategy. In 2012, this has progressed significantly with the export of its own trade exhibitions (Macef, Host and Tuttofood) and with the recent acquisitions in Turkey and South Africa. 17

18 Accounting standards and consolidation criteria The 2012 Third 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 with Consob deliberation no of 14 May 1999 and subsequent amendments and integrations. The financial, economic and balance sheet 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 accounting principles used to prepare the Third Quarter Consolidated Interim Financial Statements are the same as those used for the Consolidated Financial Statements for the financial year to 31 December 2011 to which reference should be made. The 2012 Third Quarter Consolidated Interim Financial Statements have been prepared on the basis of the accounting situation at 30 September 2012 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 2012 Third 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 Financial Statements at 30 September 2012 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 30 September 2012 is given in Attachment 1; the area of consolidation has changed compared to 30 June 2012 with the inclusion of the newly acquired companies, Interteks and Cape Gourmet. The present 2012 Third-Quarter Consolidated Interim Management Report has not been subject to independent audit. 18

19 Financial Statements Consolidated income statement (Amounts in '000) Full Year 9 months 9 months % % % % % 278, Revenues from sales and services 44, , , , , Cost of materials , , , Cost of services 25, , , , , Costs for use of 3rd-party assets 15, , , , , Personnel expenses 11, , , , , Other operating expenses , , , , Total operating costs 53, , , , , Other income , , , , Gross operating result -7, , , , , Depreciation and amortisation 3, , , , , Allowance for doubtful accounts and other provisions (uses) , , Adjustments to asset values , Net operating result (EBIT) -10, , , , , Financial income/(expenses) , , Profit/(loss) of equity-accounted companies , Profit/(loss) before income tax: -11, , , , , attributable to the Shareholders of the controlling entity -12, , , , attributable to non-controlling interests , Cash flow for the Group and noncontrolling interests -8, , , ,

20 Reclassified consolidated balance sheet 31/12/11 (Amounts in '000) 30/09/12 30/06/12 Change 112,022 Goodwill and intangible assets with an indefinite useful life 119, ,063 7,021 58,407 Intangible assets with a finite useful life 55,787 56, ,667 Tangible fixed assets 25,923 27,698-1,775 14,521 Other non-current assets 14,919 14, ,617 A Non-current assets 215, ,620 5,093 1,988 Inventory and contracts in progress 3,874 2, ,593 Trade and other receivables 59,764 47,392 12,372 0 Other current assets ,581 B Current assets 63,638 50,379 13,259 44,508 Trade payables 32,105 39,970-7,865 47,507 Payments received on account 27,263 18,895 8,368 3,666 Tax liabilities 1,442 4,940-3,498 34,128 Provisions for risks and charges and other current liabilities 27,894 27, ,809 C Current liabilities 88,704 91,646-2,942-65,228 D Net working capital (B - C) -25,066-41,267 16, ,389 E Gross capital employed (A + D) 190, ,353 21,294 7,727 Employee benefit provisions 8,579 8, ,776 Provisions for risks and charges and other non-current liabilities 18,086 21,786-3,700 27,503 F Non-current liabilities 26,665 30,190-3, ,886 G NET CAPITAL EMPLOYED continuing operations (E - F) 163, ,163 24,819 - H NET CAPITAL EMPLOYED discontinued operations ,886 TOTAL NET CAPITAL EMPLOYED (G + H) 163, ,163 24,819 covered by: 68,210 Equity attributable to the Group 68,963 * 73,145-4,182 2,456 Equity attributable to non-controlling interests 2,366 * 1, ,666 I Total equity 71,329 75,055-3,726-19,865 Cash and cash equivalents -19,328-14,902-4,426 56,761 Current financial (assets)/liabilities 99,360 65,899 33,461 15,324 Non-current financial (assets)/liabilities 12,621 13, ,220 Net financial position (continuing operations) 92,653 64,108 28,545 - Net financial position (discontinued operations) ,220 L Net financial position (TOTAL) 92,653 64,108 28, ,886 EQUITY AND NET FINANCIAL POSITION (I + L) 163, ,163 24,819 * includes pre-tax result for the period 20

21 Notes on the balance sheet and financial performance Non-current assets at 30 September 2012 totalled Euro million compared to Euro million at 30 June The Euro million increase was due to the net effect of investments of Euro million, depreciation and amortisation of Euro million, a negative foreign exchange translation effect of Euro million, and other movements of Euro million. Investments refer mainly to the acquisition of 60% of the Turkish company, Interteks, and of 75% of the South African company, Cape Gourmet. These acquisitions generated a difference of Euro million between the total acquisition price and the accounting value of the net assets acquired. The Group is currently identifying and valuing the net assets of the two companies acquired so as to allocate correctly this difference. Net working capital went from a negative figure of Euro million at 30 June 2012 to a negative figure of Euro million at 30 September The difference of Euro million was due to the following: (a) a Euro million increase in current assets that was mainly due to a Euro million increase in trade and other receivables. This reflected the increase in Parent Company accruals relating to the fourth quarter rental charges for the two exhibition sites, which were paid in advance in July; (b) a Euro million decrease in current liabilities from the net effect of: - a reduction in trade payables of Euro million due to the lower levels of business in the summer period; - an increase in pre-payments of Euro million, which was the net of increases for pre-payments invoiced to clients for exhibitions to be held in future quarters (in particular, Bimu, Made Expo, Eicma Moto, and Fisp) and a decrease in pre-payments for exhibitions held in the third quarter 2012 (in particular Macef Autunno and Milano Unica); - a Euro million reduction in tax payables as the payables shown at 30 June 2012 included provisions which are not included in the current Financial Statements as these have been prepared gross of taxes. At 30 September 2012, non-current liabilities totalled Euro million compared to Euro million at 30 June The Euro million decrease is mainly due to the provisions for deferred tax liabilities shown at 30 June 2012 which are not included in the current Financial Statements as these have been prepared gross of taxes. Group equity at 30 September 2012 was Euro million compared to Euro million at 30 June 2012, a decrease of Euro million that reflected the effect of the following: - a Euro million decrease in the pre-tax profit for the period; - a Euro million increase as the accounts to 30 June 2012 included income taxes and the current financial statements do not include income taxes as they are prepared gross of tax - a Euro million decrease for the acquisition of treasury shares; - a Euro decrease in the translation reserve. Equity attributable to non-controlling interests was Euro million at 30 September 2012 compared to Euro million at 30 June The Euro million increase reflects: - a Euro million increase in the result for the period; - a Euro million increase due to the acquisition of the investment in Interteks; - a Euro million increase due to the acquisition of the investment in Cape Gourmet; 21

22 - a Euro decrease in the translation reserve. ***** 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 Report is consistent with the Company s official documents, books and accounting records. 22

23 List of companies included in the area of consolidation and other equity investments at 30 September 2012 ATTACHMENT 1 A) List of companies included in the area of consolidation Shareholding % Shareholding of Group companies Company name and registered office Share capital (000) (*) Group total Directly held by Fiera Milano Indirectly held through other Group companies % Parent Company Fiera Milano SpA Milan, p.le Carlo Magno 1 42,147 Fully consolidated companies Fiera Milano Media SpA Milan, p.le Carlo Magno 1 2, Fiera Milano SpA Fiera Milano Congressi SpA Milan, p.le Carlo Magno 1 2, Fiera Milano SpA Nolostand SpA Milan, p.le Carlo Magno 1 7, Fiera Milano SpA Eurofairs International Consultoria e Participações Ltda São Paulo Brasil, Fiera Milano SpA Rua Padre João Manoel 755 R $ 28, Nolostand SpA CIPA FM Publicações e Eventos Ltda São Paulo Brasil, Rua Correia Lemos, 158 R $ Eurofairs International Consultoria e Participações Ltda Fiera Milano India Pvt Ltd New Delhi, Barakhamba Road INR 10, Fiera Milano SpA OOO Fiera Milano Moscow, Cherkizovskaya R 10, Fiera Milano SpA FM Interteks Uluslararası Fuarcılık Anonim Şirketi Istanbul, Mim Kemal Öke Cad. N:6 Nişantaşı TRY 3,550, Fiera Milano SpA Cape Gourmet Food Festival PTY Ltd W estlake, 14 Stibitz Road, Achievement Awards Building ZAR Fiera Milano SpA Jointly controlled companies consolidated proportionally Hannover Milano Global Germany GmbH Hannover Germany, Messegelaende Fiera Milano SpA Hannover Milano Fairs Shanghai Co. Ltd Shanghai China, Pudong Office Tower USD Hannover Milano Global Germany GmbH Hannover Milano Fairs China Ltd Hong Kong China, Golden Gate Building HKD Hannover Milano Global Germany GmbH Hannover Milano Fairs India Pvt Ltd East Mumbai, Andheri INR 179, Hannover Milano Global Germany GmbH Global Fairs & Media Private Ltd New Delhi, Bahadur Shah Zafar Marg 9-10 INR 207, Hannover Milano Fairs India Pvt Ltd Milan International Exhibitions Srl Rho, S.S.Sempione km Fiera Milano SpA B) Companies accounted at cost Shareholding % Shareholding of Group companies Company name and registered office Share capital ( '000) (*) Group total Directly held by Fiera Milano Indirectly held through other Group companies % Sviluppo Sistema Fiera SpA (**) Milan, largo Domodossola 1 5, Fiera Milano Congressi SpA Esperia SpA Rose (Cosenza) 1, Fiera Milano Media SpA (*) Euro or other currencies as specifically indicated (**) company under liquidation 23