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Tamburi Investment Partners

Quarterly Report Nov 17, 2017

4242_rns_2017-11-17_0533f16f-2f94-4a14-ba25-a4ef217b0778.pdf

Quarterly Report

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2017 third quarter consolidated interim report tamburi investment partners group

CONTENTS

Corporate Boards 3
Interim Directors' Report 4
Consolidated Interim Report
Financial Statements

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated statement of financial position

Statement of changes in consolidated equity
9
Notes to the 2017 Third Quarter Consolidated Interim Report 13
Attachments

Declaration of the Executive Officer for financial reporting

Changes in AFS financial assets measured at fair value

Changes in associates measured under the equity method
24

Corporate Boards

Board of Directors of Tamburi Investment Partners S.p.A.

Cesare d'Amico Vice Chairman Alberto Capponi (1)(2) Independent Director * Paolo d'Amico Director Giuseppe Ferrero (1) Independent Director * Manuela Mezzetti (1)(2) Independent Director* Daniela Palestra (2) Independent Director *

Giovanni Tamburi Chairman and Chief Executive Officer Alessandra Gritti Vice Chairman and Chief Executive Officer Claudio Berretti Executive Director & General Manager

Board of Statutory Auditors

Emanuele Cottino Chairman
Paola Galbiati Standing Auditor
Andrea Mariani Standing Auditor
Laura Visconti Alternate Auditor
Fabio Pasquini Alternate Auditor

Independent Audit Firm

PricewaterhouseCoopers S.p.A.

(1) Member of the appointments and remuneration committee

(2) Member of the control and risks and related parties committee

* In accordance with the Self-Governance Code

Third Quarter 2017 Interim Directors' Report of the Tamburi Investment Partners Group

The Tamburi Investment Partners Group (hereafter "TIP Group") closes the first nine months of 2017 with a consolidated net profit of approximately Euro 56.3 million, of which Euro 55.9 million attributable to the shareholders of the parent, compared to a net profit of approximately Euro 80.3 million for the same period of the previous year, of which approximately Euro 46.3 million attributable to the shareholders of the parent. The net profit for the first nine months of 2016 significantly benefitted from the consolidated gain of approximately Euro 78 million as a result of the withdrawal from Ruffini Partecipazioni S.r.l. and the relative assignment of Moncler shares.

Consolidated net equity exceeded Euro 617.6 million, increasing in 2017 over Euro 180 million, from Euro 437.1 million at December 31, 2016, after dividend distributions of over Euro 10 million. Approximately Euro 50.9 million of this increase concerns the exercise in June of 12,261,997 warrants, with the issue of a similar number of new TIP shares.

The nine months period 2017 result benefitted from the share of the result of the investee Clubtre S.p.A. ("Clubtre"), equal to approximately Euro 20.9 million, following the partial sale of Prysmian S.p.A. ("Prysmian") shares by Clubtre and the capital gain from the partial sale of Amplifon S.p.A. ("Amplifon") shares of approximately Euro 29.2 million.

Both divestments concerned approximately one-third of the holdings in the respective companies. The TIP Group therefore continues to hold very significant investments in these companies, confirming the positive assessment of their potential.

The Amplifon transaction took place in the context of a wider medium-term partnership between the TIP Group and the Holland family which controls Amplifon. In September 2017, on the basis of agreements reached between TIP and Ampliter, TIP, Ampliter and Amplifin (which wholly-owns Ampliter) signed an investment agreement involving the undertaking by TIP (or by Asset Italia S.p.A., to whom TIP submitted the investment) of a stake in Ampliter through the acquisition from Amplifin, for Euro 50 million, of a minority holding whose exact stake shall be calculated on the basis of the value of Ampliter's assets and liabilities on closing and the shareholder agreement concerning Ampliter which shall be effective from the closing date. The investment in Ampliter, expected to be made in December 2017, shall therefore be of a significantly higher amount than the liquidity received by TIP from the sale of the Amplifon shares.

The transaction by Clubtre, held 43.28% by TIP on a fully diluted basis, concerned 4 million shares in Prysmian, corresponding to 1.85% of the share capital, sold for a total value of Euro 97.6 million, before commissions. Even following this sale, Clubtre remains the largest individual shareholder of Prysmian, with over 4% of the share capital.

TIP operations developed strongly also in other areas in the first nine months of 2017; revenues related to advisory activity exceeded Euro 5.4 million and other financial income than those related to the above-mentioned transactions - mainly dividends from investees and interest amounted to approximately Euro 11.5 million; the share of profit of associated companies, other than the capital gain realised by Clubtre, amounted to approximately Euro 7.3 million.

Costs were substantially in line with preceding years; executive director fees are linked to company performance.

At September 30, 2017, TIP consolidated net debt – also taking into account the TIP 2014-2020 bond loan – but without considering the non-current financial assets, considered by management as liquidity available in the short-term – was approximately Euro 123 million, significantly improving on Euro 200 million at December 31, 2016.

In addition to the above-mentioned transactions, in the first nine months of 2017 TIP invested further in Gruppo IPG Holding S.p.A., parent company of Interpump Group S.p.A., fifteen years since the initial operation and following other investments in the period, subscribed – for an amount exceeding its direct shareholding – the capital increase of Digital Magics S.p.A. and increased the shareholding in Clubitaly S.p.A., which holds 19.74% of Eataly S.r.l.

The investments by the associated companies Asset Italia S.p.A. ("Asset Italia") and TIPO – TIP Pre IPO S.p.A ("TIPO") were very significant.

The investment in Alpitour by Asset Italia generated a disbursement in excess of Euro 37 million. Asset Italia subscribed to a share capital increase of Euro 120 million through Asset Italia 1 S.r.l. ("Asset Italia 1"), an ad hoc vehicle company set up for the transaction. The transaction provides Alpitour with financial resources to accelerate growth, including through further acquisitions, consolidation and partnerships in Italy and abroad, in line with business plans which involve a greater leadership role in the sector, including in the international arena. Following the share capital increase, Asset Italia 1 holds 32.67% of the share capital of Alpitour and has an important governance role in the group. Alpitour is the Italian market leader thanks to its strong presence in all sectors (tour operating off line and on line, aviation, hotels, travel agencies and incoming) and in 2016 reported consolidated revenues of over Euro 1.1 billion, growth across all divisions and an EBITDA of approximately Euro 36 million. TIP holds approximately 30.91% of the shares related to Asset Italia 1.

In July 2017, TIPO acquired 20% of the Chiorino Group ("Chiorino"), a global leader in the manufacture of process and conveyor belts for industrial processes; the transaction was partially financed by capital already held in TIPO – mainly from the sale of AAA shares – and partially through recourse to shareholders. The share capital increase subscribed by TIP was Euro 5.7 million.

Chiorino, with 2017 forecast consolidated revenues of over Euro 110 million (up approximately 8.5%) and a stable EBITDA margin in recent years exceeding 20%, is currently present in approximately 100 countries, generates over 75% of revenues overseas through 17 direct subsidiaries, has an extensive commercial and distribution network and with approximately 75% of revenues in the aftermarket segment.

In September 2017, the StarTIP project was launched, involving the concentration in one company – the subsidiary Clubuno S.r.l. which will take the name StarTIP S.r.l. – of all the shareholdings operating in the start-up, digital and innovation fields – Digital Magics, Talent Garden, Telesia and others. Up to Euro 100 million will be allocated to this project, to be invested in the coming years in new initiatives in such fields, in the belief that the uniqueness and peculiarities of the TIP Group, of its entrepreneurial shareholders and of its investee companies, can significantly boost the development of truly innovative companies.

The results for the first nine months announced by Amplifon, BE, FCA, Ferrari, Interpump, Moncler and Prysmian provide new important confirmation of the very good performances of the main investee companies. Also the other direct and indirect investee companies, including Alpitour, Digital Magics, Eataly, Furla, Roche Bobois, Talent Garden, Beta, iGuzzini, Octo and AAA are performing well.

Amplifon reported for the first nine months of 2017 consolidated revenues of Euro 901.8 million, up 12.2% on the same period of 2016. The network was expanded by 399 DOS between stores and shop-in-shops. EBITDA was Euro 136.9 million, growth of 14.9%.

In the first nine months of 2017, BE reported consolidated revenues of approximately Euro 91.2 million, with an EBITDA of Euro 11.7 million (+5.4%) and an EBITDA margin of 12.8% on revenues, up on 11.4% in the same period of the previous year.

FCA continued to report record results in the third quarter 2017, with net revenues for the first nine months exceeding Euro 82 billion and an adjusted EBIT of approximately Euro 5.2 billion, up 14%.

Ferrari announced record results, with shipments and revenues respectively up 5% and 14% compared to the first nine months of 2016. The adjusted EBIT, amounting to Euro 581 million, improved 29%.

Interpump reported for the first nine months of 2017 revenues of Euro 818.7 million, growing 18.1%. EBITDA was Euro 191.9 million, up 26.6% on the same period on the previous year, with the revenue margin increasing to 23.4% from 21.9%.

The Moncler Group reported consolidated revenues for the first nine months of 2017 of Euro 736.8 million, growing 15% on the same period of 2016. This growth was principally concentrated in the retail channel and the international markets.

Prysmian announced improved results again in the first nine months of 2017, with revenues of Euro 5,865 million up 3.6% and an adjusted EBITDA of Euro 545 million, growing 3.3%.

The excellent results in the first nine months of 2017 and in 2016, the major transactions

completed to date in 2017 and the performances of the investments, also in terms of share price, resulted in very significant growth for the TIP share price in 2017 and also against the respective indices. The TIP share price in fact grew 60.3% from December 31, 2016 to November 10, 2017, compared to +17.3% for the FTSE MIB and +34.7% for the IT Star in the same period.

The usual five-year TIP share chart (at November 10, 2017) highlights the excellent performance of the TIP share, +284.9%; the total return for TIP shareholders over the five years was 321.0% (annual average of 64.2%).

RELATED PARTY TRANSACTIONS TIP's calculations based on bloomberg's data on November 10, 2017 at 18.54

Related party transactions are detailed in Note 20.

SUBSEQUENT EVENTS TO SEPTEMBER 30, 2017

In the context of the StarTIP project, in October 2017 TIP and Clubuno exercised 491,674 Digital Magics 2017-2022 warrants for a cumulative investment of approximately Euro 2.8 million. As a result of this transaction, TIP Group's share of Digital Magics exceeds 20% of the capital.

In October 2017 TIP subscribed - for an amount exceeding its direct shareholding - a capital increase in Clubitaly S.p.A. for approximately Euro 1.8 million.

In 2014 and 2015, TIPO invested approximately Euro 7 million in ADS of AAA, Advanced Accelerator Applications, then progressively sold on the market 572,000 ADS shares, with a capital gain of Euro 11.5 million, most of which was used to finance a portion of a second investment in the iGuzzini Group and partially to finance the Chiorino deal. On October 30, 2017, a tender offer by Novartis to acquire all the outstanding shares of AAA at USD 82 per ADS share was announced. Currently, TIPO holds 58,000 ADS AAA and consequently at this price a further capital gain of Euro 3.4 million would be made.

OUTLOOK

In the first nine months of 2017, the TIP Group has undertaken partial divestments, returned strong results which are highly indicative of those expected for the full year and completed major new investments, continuing its growth and affirming its business model, which is unique in Italy, and its role as an entrepreneurial partner and financial backer for outstanding companies willing to grow and/or resolve governance issues, always with a view to business development.

The results achieved by TIP Group in the first nine months of 2017 have related to significant divestments and consequently, in order to be repeated, will depend on future opportunities and on the markets performances.

RESEARCH AND DEVELOPMENT

During the period, the company did not carry out any research and development activity.

TREASURY SHARES

At September 30, 2017, treasury shares in portfolio totalled 1,856,011, equal to 1.160% of the share capital. The number of treasury shares in portfolio at the current date is unchanged.

For the Board of Directors The Chairman Giovanni Tamburi

Milan, November 14, 2017

Consolidated income statement Tamburi Investment Partners Group

(in Euro) Nine months ended
September 30, 2017
Nine months ended
September 30, 2016
Note
Revenue from sales and services 5,430,759 10,588,747 4
Other revenues 66,629 155,351
Total revenues 5,497,388 10,742,098
Purchases, service and other costs (1,556,990) (1,479,426) 5
Personnel costs (12,002,530) (21,271,615) 6
Amortisation, depreciation & write-downs (53,755) (160,310)
Operating profit/(loss) (8,1115,887) (12,169,253)
Financial income 40,669,783 110,637,306 7
Financial charges (4,805,695) (22,394,296) 7
Profit before adjustments to investments 27,748,201 76,073,757
Share of profit/(loss) of associates measured under
the equity method 28,083,424 6,787,326 8
Adjustments to available-for-sale financial assets 0 (1,819,098)
Profit before taxes 55,831,625 81,041,985
Current and deferred taxes 440,524 (739,632)
Profit 56,272,149 80,302,353
Profit attributable to the shareholders of the
parent 55,930,590 46,270,034
Profit attributable to minority interests 341,559 34,032,319
Basic earnings per share 0.37 0.55 16
Diluted earnings per share 0.37 0.44 16
Number of shares in circulation 158,205,473 146,671,327
(in Euro) Nine months ended
September 30, 2017
Nine months ended
September 30, 2016
Note
Profit 56,272,149 80,302,353
Other comprehensive income items
Income through P&L 15
Increase/(decrease) in non-current AFS financial
assets
100,675,502 (64,675,187)
Unrealised profit/(loss) 100,039,366 (65,577,537)
Tax effect 636,136 902,350
Increase/(decrease) in investees measured under
the equity method
Unrealised profit/(loss)
(6,932,518)
(6,361,088)
30,152,904
30,152,904
Tax effect (571,430)
Increase/(decrease) AFS current financial assets 408,150 (183,238)
Unrealised profit/(loss) 537,040 (281,338)
Tax effect (128,890) 98,100
Income/(loss) not through P&L
Employee benefits 9,220 -
Total other comprehensive income items 94,160,354 (34,705,521)
Total comprehensive income 150,432,503 45,596,832
Total comprehensive income attributable to the
shareholders of the parent
150,090,944 32,504,625
Total comprehensive income attributable to
minority interests
341,559 13,092,207

Consolidated statement of comprehensive income Tamburi Investment Partners Group

Consolidated statement of financial position Tamburi Investment Partners Group

Non-current assets
Property, plant and equipment
139,955
170,589
Goodwill
9,806,574
9,806,574
Other intangible assets
2,307
4,626
Associates measured under the equity method
256,978,525
235,559,227
9
AFS financial assets
449,018,397
374,267,042
10
Financial receivables
35,019,613
33,751,593
11
Tax receivables
423,399
136,116
Deferred tax assets
2,935,303
2,143,389
Total non-current assets
754,324,073
655,839,156
Current assets
Trade receivables
690,234
957,977
Current financial receivables
697,217
483,136
11
Current financial assets
797,676
182,701
Current AFS financial assets
26,937,730
-
12
Cash and cash equivalents
2,047,173
1,286,769
13
Tax receivables
189,300
336,373
Other current assets
186,809
272,800
Total current assets
31,546,139
3,519,756
Total Assets
785,870,212
659,358,912
Equity
Share capital
83,231,972
76,855,733
14
Reserves
363,357,153
234,969,155
15
Retained earnings
98,363,034
56,977,958
Result of the parent
55,930,590
51,486,389
16
Total equity attributable to the shareholders of the
parent
600,882,749
420,289,235
Equity attributable to minority interests
16,786,028
16,787,469
Total equity
617,668,777
437,076,704
Non-current liabilities
Post-employment benefits
289,256
271,667
Financial payables
134,030,306
133,752,298
17
Deferred tax liabilities
2,988,606
3,078,424
Total non-current liabilities
137,308,168
137,102,389
Current liabilities
Trade payables
490,076
550,303
Current financial liabilities
19,352,240
67,380,277
18
Tax payables
208,314
429,039
Other liabilities
10,842,637
16,820,200
19
Total current liabilities
30,893,267
85,179,819
Total liabilities
168,201,435
222,282,208
Total equity & liabilities
785,870,212
659,358,912
(in Euro) September 30, 2017 December 31, 2016 Note

Statement of changes in consolidated equity Tamburi Investment Partners Group

in Euro

Share Share Legal Extraordinary Revaluation Treasury Other IFRS Merger Retained Result Net Equity Net Equity Result Net Equity
capital premium reserve reserve reserve shares reserves reserve surplus earnings for the period shareholders minorities for period
reserve AFS Financial reserve business shareholders of parent minorities
assets combination of parent
At January 1, 2016 consolidated 76,853,713 113,531,528 14,921,969 0 90,819,062 (1,843,381) (953,192) (483,655) 5,060,152 41,139,559 25,233,887 364,279,642 85,301,478 (238,635) 449,342,486
Change in fair value of financial assets
available-for-sale (43,735,075) (43,735,075) (20,940,112) (64,675,187)
Other comprehensive income items of associates measured under the
equity method 24,734,514 5,418,390 30,152,904 30,152,904
Change in fair value of current financial assets (183,238) (183,238) (183,238)
Employee benefits 0 0
Other changes 0 0
Total other comprehensive income items (19,183,799) 5,418,390 (13,765,409) (20,940,112) (34,705,521)
Profit/(loss) 9M 2016 46,270,034 46,270,034 34,032,319 80,302,353
Total comprehensive income (19,183,799) 5,418,390 46,270,034 32,504,625 (20,940,112) 34,032,319 45,596,832
Allocation profit 2015 448,774 24,785,113 (25,233,887) 0 (238,635) 238,635 0
Other changes 0 (78,386,400) (78,386,400)
Distribution of dividends (8,946,714) (8,946,714) (294,000) (9,240,714)
Stock option plan effect 0 0
Warrant conversion 2,020 12,704 14,724 14,724
Acquisition of treasury shares (1,754,538) (1,754,538) (1,754,538)
Sale of treasury shares 0 0
At September 30, 2016 consolidated 76,855,733 113,544,232 15,370,743 0 71,635,263 (3,597,919) 4,465,198 (483,655) 5,060,152 56,977,958 46,270,034 386,097,739 (14,557,669) 34,032,319 405,572,389
At January 1, 2017 consolidated 76,855,733 113,544,232 15,370,743 0 96,178,426 (4,853,854) 10,153,111 (483,655) 5,060,152 56,977,958 51,486,389 420,289,235 (17,359,512) 34,146,981 437,076,704
Change in fair value of financial assets
available-for-sale 100,675,502 100,675,502 100,675,502
Other comprehensive income items of associates measured under the
equity method (5,378,757) (1,553,761) (6,932,518) (6,932,518)
Change in fair value of current financial assets 408,150 408,150 408,150
Employee benefits 9,220 9,220 9,220
Other changes 0 0
Total other comprehensive income items 95,704,895 (1,544,541) 94,160,354 0 94,160,354
Profit/(loss) 9M 2017 55,930,590 55,930,590 341,559 56,272,149
Total comprehensive income 95,704,895 (1,544,541) 55,930,590 150,090,944 341,559 150,432,503
Allocation profit 2016 404 41,385,076 (41,385,480) 0 34,146,981 (34,146,981) 0
Other changes related to assocites measure under the equity method (7,679,562) (7,679,562) (7,679,562)
Distribution of dividends (10,100,909) (10,100,909) (343,000) (10,443,909)
Stock option plan effect 0 0
Warrant conversion 6,376,239 44,511,049 50,887,288 50,887,288
Acquisition of treasury shares (3,016,297) (3,016,297) (3,016,297)
Sale of treasury shares 23,659 729,116 (340,725) 412,050 412,050
At September 30, 2017 consolidated 83,231,972 158,078,940 15,371,147 0 191,883,321 (7,141,035) 588,283 (483,655) 5,060,152 98,363,034 55,930,590 600,882,749 16,444,469 341,559 617,668,777

NOTES TO THE 2017 THIRD QUARTER CONSOLIDATED INTERIM REPORT

(1) Group activities

The TIP Group is an independent investment/merchant bank focused on Italian companies, with a particular involvement in:

    1. investments as an active shareholder in companies (listed and non-listed) capable of achieving "excellence" in their relative fields of expertise and, with regards to the StarTIP project, in start-ups and innovative companies;
    1. advisory in corporate finance operations, in particular acquisitions and sales through the division Tamburi & Associati (T&A).

(2) Accounting standards

The parent company TIP was incorporated in Italy as a limited liability company and with registered office in Italy.

The company was listed in November 2005 and on December 20, 2010 Borsa Italiana S.p.A. assigned the STAR classification to TIP ordinary shares.

The 2017 third quarter consolidated interim report was approved by the Board of Directors on November 14, 2017.

The Interim Report was prepared on a going concern basis. The accounting policies utilised for the preparation of this interim consolidated report are consistent with those utilised for the preparation of the consolidated financial statements for the year ended December 31, 2016.

The 2017 third quarter consolidated interim report comprises the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in consolidated equity and the explanatory notes, together with the Directors' Report. The financial statements were prepared in units of Euro, without decimal amounts.

The 2017 third quarter consolidated interim report was prepared in condensed format and therefore does not contain all the disclosures required for annual financial statements.

The consolidated income statement and statement of comprehensive income for the period to September 30, 2016 and the consolidated statement of financial position at December 31, 2016 were utilised for comparative purposes.

The 2017 third quarter consolidated interim report was not audited.

Consolidation principles and basis of consolidation

Consolidation scope

The consolidation scope includes the parent TIP - Tamburi Investment Partners S.p.A. and the

companies over which it exercises direct or indirect control. An investor controls an entity in which an investment has been made when exposed to variable income streams or when possessing rights to such income streams based on the relationship with the entity, and at the same time has the capacity to affect such income steams through the exercise of its power. Subsidiaries are consolidated from the date control is effectively transferred to the Group, and cease to be consolidated from the date control is transferred outside the Group.

At September 30, 2017, the consolidation scope included the companies TXR S.r.l. and Clubuno S.r.l.

The details of the subsidiaries were as follows:

Company Registered office Share capital Holding
Clubuno S.r.l. Milan 10,000 100%
TXR S.r.l. Milan 100,000 51.00%

The consolidation scope compared to the same period of the previous year saw the exit of Clubsette S.r.l., whose liquidation process was completed on December 29, 2016.

Consolidation procedures

The consolidation of the subsidiaries is made on the basis of the respective financial statements of the subsidiaries, adjusted where necessary to ensure uniform accounting policies with the Parent Company.

All inter-company balances and transactions, including any unrealised gains deriving from transactions between Group companies are fully eliminated. Unrealised losses are eliminated except when they represent a permanent impairment in value.

(3) Presentation

The choices adopted by the Group relating to the presentation of the consolidated financial statements are illustrated below:

  • income statement and comprehensive income statement: IAS requires alternatively classification based on the nature or destination of the items. The Group decided to present the accounts by nature of expenses;
  • statement of financial position: in accordance with IAS 1, the assets and liabilities should be classified as current or non-current or, alternatively, according to the liquidity order. The Group chose the classification criteria of current and non-current;
  • statement of changes in consolidated equity, prepared in accordance with IAS 1.

(4) Segment information

The company undertakes investment banking and merchant banking activities. Top management activity in the above-mentioned areas, both at marketing contact level and institutional initiatives and direct involvement in the various deals, is highly integrated. In addition, execution activity is

also organised with the objective to render the "on-call" commitment of advisory or equity professional staff more flexible.

In relation to this choice it is almost impossible to provide a clear representation of the separate financial economic impact of the different areas of activity, as the breakdown of the personnel costs of top management and other employees on the basis of a series of estimates related to parameters which could be subsequently superseded by the actual operational activities would result in an extremely high distortion of the level of profitability of the segments of activity.

In the present 2017 third quarter consolidated interim report, only details on the performance of the "revenues from sales and services" component is provided, related to the sole advisory activity, excluding therefore "other revenues".

Nine months ended Nine months ended
Euro September 30, 2017 September 30, 2016
Revenues from sales and services 5,430,759 10,588,747
Total 5,430,759 10,588,747

Revenues reached a significant level thanks to the strong performance of the normal activities of advisory and the fees related to the transactions undertaken by Asset Italia 1 S.r.l. Revenues in the previous year were significantly influenced by fees relating to the launch of the Asset Italia project.

(5) Purchases, service and other costs

The account comprises:

Nine months ended Nine months ended
Euro September 30, 2017 September 30, 2016
1. Services 1,084,654 1,006,482
2. Rent, leasing and similar costs 268,306 264,816
3. Other charges 204,030 208,128
Total 1,556,990 1,479,426

Service costs mainly relate to professional and legal consultancy, general expenses and commercial expenses.

Other charges principally include non-deductible VAT.

(6) Personnel costs

These costs include "Salaries and wages" and "Director's fees" both in terms of the fixed and variable components matured in the period.

(7) Financial income/(charges)

The account comprises:

Nine months ended Nine months ended
Euro September 30, 2017 September 30, 2016
1.
Investment income
37,842,953 108,307,488
Income from securities recorded in current assets 172,874 1,744,450
2.
Other income
2,653,956 585,368
Total financial income 40,669,783 110,637,306
3.
Interest and other financial charges
(4,805,695) (22,394,296)
Total financial charges (4,805,695) (22,394,296)
Net financial income 35,864,088 88,243,010

(7).1. Investment income

Nine months ended Nine months ended
Euro September 30, 2017 September 30, 2016
Gain on withdrawal from Ruffini Partecipazioni S.r.l. 0 78,008,920
Gain on Ferrari N.V. shares 0 15,960,812
Gain on disposal of investments 32,497,493 10,377,142
Dividends 5,239,454 3,873,549
Other 106,006 87,065
Total 37,842,953 108,307,488

For the first nine months of 2017, the gains principally concern the partial divestment from Amplifon. In June 2017 TIP sold, through an Accelerated Bookbuilding procedure, 3.5 million Amplifon shares, corresponding to 1.55% of the share capital and 1.06% of the voting rights (existing prior to the transaction) for a total value of Euro 42 million, before charges and commissions, realising a capital gain of approximately Euro 29.2 million.

In the first nine months of 2017, the TIP Group received dividends from the following investees (Euro):

Hugo Boss AG 2,342,600
Moncler S.p.A. 1,061,704
Furn Invest Sas 757,155
Amplifon S.p.A. 667,663
Ferrari N.V. 193,509
Other 216,823
Total 5,239,454

The first nine months of 2016 significantly benefitted from the income realised following the withdrawal from Ruffini Partecipazioni S.r.l. and the related assignment of Moncler shares, the recognition as income in the income statement of the value of Ferrari shares received following the spin-off from FCA (Euro 16 million) and the related negative change in the market value of the FCA convertible loan for Euro 11 million recorded under financial charges.

(7).2. Other income

This principally includes interest matured on non-current financial receivables.

Nine months ended Nine months ended
Euro September 30, 2017 September 30, 2016
Unrealised losses on securities (IFRS effect on FCA convertible
loan) 0 13,786,597
Interest on bonds 3,775,821 5,068,875
Other 1,029,874 3,538,824
Total 4,805,695 22,394,296

(7).3. Interest and other financial charges

"Interest on bonds" refers to that matured in favour of the subscribers of the 2014-2020 TIP Bond of Euro 100 million calculated in accordance with the amortised cost method applying the effective interest rate.

The "Other" account includes bank interest on loans and other financial charges.

(8) Share of profit/(loss) of associates measured under the equity method The account comprises:

Nine months ended Nine months ended
Euro September 30, 2017 September 30, 2016
Asset Italia S.p.A. (303,029) (79,392)
BE Think, Solve, Executive S.p.A. 652,666 644,308
Clubitaly S.p.A. (94,551) 64,836
Clubtre S.p.A. 20,818,381 1,699,295
Gatti & Co. Gmbh 58,805 10,518
Gruppo IPG Holding S.p.A. 4,939,455 3,237,642
Palazzari & Turries Limited 84,510 (12,656)
TIP -Pre-IPO – TIPO S.p.A. 1,927,187 1,222,775
Total 28,083,424 6,787,326

For further details, reference should be made to note 9 "Investments in associates measured under the equity method" and attachment 2. In relation to the share of the result of Clubtre, reference should be made to the Directors' Report and note 9.

(9) Associates measured under the equity method

The investments in associates refer to:

  • for Euro 80,488,732 to the company Clubtre S.p.A., established for the purpose of acquiring a significant shareholding in the listed company Prysmian S.p.A. TIP holds 24.62% of Clubtre S.p.A. (43.28% net of treasury shares). The investment of Clubtre in Prysmian S.p.A. was measured at fair value (market value at September 30, 2017) and the share of the result of Clubtre was recognised under the equity method. In January 2017, Clubtre sold 4 million shares in Prysmian S.p.A., corresponding to 1.85% of the share capital, generating a capital gain for TIP of approximately Euro 19.9 million. Part of the liquidity obtained from Clubtre was subsequently used for dividend distribution and acquisition of treasury shares from shareholders generating a reduction in the carrying value of the investment. There was also a decrease in the fair value relating to the reversal to the income statement of the fair value reserve relating to the Prysmian shares sold in 2017;
  • for Euro 55,290,910 to the investment in Gruppo IPG Holding S.p.A. (company which holds the relative majority shareholding in Interpump Group S.p.A., to be considered a subsidiary);

  • for Euro 39,370,283 to the company Asset Italia S.p.A., which acts as an investment holding, giving shareholders the opportunity to choose for each proposal their individual investments. The book value increased on December 31, 2016 following the share capital increase payment made in June 2017 for the Alpitour transaction. TIP's stake in the tracking shares related to the investment in Alpitour is equal to 30.91%;

  • for Euro 36,348,356 to the company Clubitaly S.p.A., with a 19.74% stake in Eataly S.r.l. TIP holds 29.73% in the share capital of the company. The investment of Clubitaly in Eataly is measured at fair value in that the absence of the necessary financial information for the application of the equity method determines the current limited exercise of significant influence. The book value of the investment in Clubitaly increased on December 31, 2016 following the acquisition by TIP in June 2017 of shares representing 2.23% of the share capital;
  • for Euro 27,619,305 to the investment in TIP Pre IPO S.p.A. The investments in AAA, iGuzzini and GH S.r.l held by TIPO are measured at fair value. The investments in Betaclub S.r.l. and in Beta Utensili S.p.A. are measured under the equity method. The book value of TIPO increased following the subscription by TIP of its share capital increase contribution of Euro 5,714,286;
  • for Euro 17,077,081 to the associated company BE S.p.A.;
  • for Euro 783,858 to the company Palazzari & Turries Limited, with registered office in Hong Kong and the company Gatti & Co Gmbh, with registered office in Frankfurt.

For the changes in the investments in associated companies, reference should be made to attachment 2.

(10) Non-current AFS financial assets

The financial assets refer to minority investments in listed and non-listed companies.

Euro September 30, 2017 December 31, 2016
Investments in listed companies 373,506,356 299,610,001
Investments in non-listed companies 75,512,041 74,657,041
Total 449,018,397 374,267,042

The changes in the investments measured at fair value are shown in Attachment 1.

In relation to the effects of the measurement of investments in listed companies, reference should be made to note 15.

(11) Financial receivables

Euro September 30, 2017 December 31, 2016
Non-current loans 35,019,613 33,571,593
Total 35,019,613 33,571,593

The non-current loans recognised at amortised cost refer to:

  • for Euro 16,016,591 to the Furla S.p.A. convertible loan, subscribed on September 30, 2016;
  • for Euro 9,933,989 to the vendor loan, at an annual interest rate of 9%, granted to Dedalus Holding S.p.A. in relation to the sale of the investment in Noemalife S.p.A. and with December 2018 maturity;
  • for Euro 9,069,033 to loans granted to Tefindue S.p.A. and the subscription of a convertible

loan. Tefindue S.p.A. holds indirectly a shareholding in Octo Telematics S.p.A., international leader in the development and management of telematic systems and services for the automotive sector, mainly for the insurance market.

The interest matured on loans which will be received within one year are classified in the account current financial receivables.

(12) Current AFS financial assets

These concern non-derivative financial assets comprising investments in bonds for the temporary utilisation of liquidity.

(13) Cash and cash equivalents

The account represents the balance of banks deposits determined by the nominal value of the current accounts with credit institutions.

Euro September 30, 2017 December 31, 2016
Bank deposits 2,041,295 1,281,871
Cash in hand and similar 5,878 4,898
Total 2,047,173 1,286,769

The composition of the net financial position at September 30, 2017 compared with the end of the previous year is illustrated in the table below.

Euro September 30, 2017 December 31, 2016
A Cash and cash equivalents 2,047,173 1,286,769
Current financial assets and current available for sale
B financial assets 27,735,406 182,701
C Current financial receivables 697,217 483,136
D Liquidity (A+B+C) 30,479,796 1,952,606
E Financial payables (134,030,306) (133,752,298)
F Current financial liabilities (19,352,240) (67,380,227)
G Net financial position (D+E+F) (122,902,750) (199,179,919)

The net financial position improved significantly also thanks to the liquidity received following the exercise of the warrants in June 2017, of approximately Euro 50.9 million.

Financial payables mainly refer to the TIP 2014-2020 bond and a bank loan.

Current financial liabilities refer to bank payables and interest related to the bond loan matured and still not expired.

(14) Share capital
The share capital of TIP S.p.A. is composed of:
Shares Number
ordinary shares 160,061,484
Total 160,061,484

On June 30, 2017, the second exercise period of the TIP S.p.A. 2015-2020 Warrants concluded,

with the exercise of 12,261,997 warrants and a relative share capital increase of Euro 6,376,238.44 with the issue of 12,261,997 new ordinary TIP S.p.A. shares at a price of Euro 4.15 each, for a total value of Euro 50,887,288.

The share capital of TIP S.p.A. amounts therefore to Euro 83,231,971.68, represented by 160,061,484 ordinary shares.

The treasury shares in portfolio at September 30, 2017 amounted to 1,856,011, equal to 1.160% of the share capital and the shares in circulation at September 30, 2017 numbered 158,205,473.

No. treasury shares at No. of shares acquired No. of shares sold in No. treasury shares at
January 1, 2017 in 2017 2017 September 30, 2017
1,478,370 587,641 210,000 1,856,011

(15) Reserves

Share premium reserve

The account amounts to Euro 158,078,940 and increased Euro 44,511,049 following the exercise of the warrants.

Legal reserve

This amounts to Euro 15,371,147, increasing Euro 404 following the Shareholders' Meeting motion of April 28, 2017 with regard to the allocation of the 2016 net profit.

Valuation reserve AFS financial assets

The positive reserve amounts to Euro 191,883,321. This is an unavailable reserve as referring to the change in the fair value compared to the acquisition value of the investments in portfolio.

The changes in the non-current AFS financial assets valuation reserve, which represents the total of income and charges recognised directly through equity, is illustrated in the table below:

Euro Book value at
31.12.2016
Change Book value
30.09.2017
Non-current AFS financial assets 35,762,455 100,039,366 135,801,821
Associates measured under the equity
method
65,255,929 (4,783,950) 60,471,979
Current AFS financial assets 0 537,040 537,040
Tax effect (2,554,819) (87,561) (2,642,380)
Total 98,463,565 95,704,895 194,168,460
of which:
Group share 96,178,426 95,704,895 191,883,321
minority interest share 2,285,139 0 2,285,139

The table illustrates the implicit gains of the investments and of the current financial assets in the year which are recognised under equity in the account "Valuation reserve AFS financial assets".

For details of changes, reference should be made to attachment 1 and to note 10 (Non-current AFS financial assets) and attachment 2 and note 9 (Investments measured under the equity method).

For the changes in the year and breakdown of other equity items reference should be made to the specific statement.

Treasury shares acquisition reserve

The negative reserve amounts to Euro 7,141,035. This is a non-distributable reserve.

Other reserves

They amount to Euro 588,283 and mainly refer to the stock option plan reserve created following the allocation of options to employees and directors partially offset by the negative changes in the reserves of associates measured under the equity method.

Merger surplus

The merger surplus amounts to Euro 5,060,152 and derives from the incorporation of Secontip S.p.A. into TIP S.p.A. on January 1, 2011.

Retained earnings

Retained earnings amount to Euro 98,363,034 and increased, compared to December 31, 2016, by Euro 41,385,076 following the allocation of the 2016 net profit.

During the period, dividends of Euro 10,100,909 were distributed, equal to Euro 0.069 per share.

IFRS business combination reserve

The reserve is a negative Euro 483,655, unchanged compared to December 31, 2016.

(16) Profit for the period

Basic earnings per share

The basic earnings per share at September 30, 2017 – net profit divided by the average number of shares in circulation in the period taking into account treasury shares held – was Euro 0.37.

Diluted earnings per share

At September 30, 2017, the diluted earnings per share was Euro 0.37. This represents the net profit for the period divided by the average number of ordinary shares in circulation at September 30, 2017, calculated taking into account the treasury shares held and considering any dilution effects generated from the shares servicing the stock option plan (3,290,000) and from the newly issued shares (24,683,018) relating to the remaining warrants in circulation.

(17) Financial payables

Financial payables of Euro 134,030,306 refer to:

a) for Euro 99,172,900 the issue of the 2014-2020 TIP Bond fully placed on the market on April 7, 2014 (nominal value of Euro 100,000,000). The loan, with an initial rights date of April 14, 2014 and expiry date of April 14, 2020 was issued at par value and offers an annual coupon at the nominal gross fixed rate of 4.75%. The loan was recognised at amortised cost applying the effective interest rate which takes into account the transaction costs incurred for the issue of the loan of Euro 2,065,689; the loan provides for compliance with financial covenants on an annual basis;

  • b) for Euro 34,857,406 the portion of medium/long-term loans for a nominal value of Euro 40,000,000 with the following maturities;
  • 12.5% on December 31, 2017;
  • 12.5% on December 31, 2018;
  • 12.5% on June 30, 2019;
  • 62.5% on December 31, 2019.

The bond provides for compliance with annual financial covenants.

In accordance with the application of international accounting standards required by Consob recommendation No. DEM 9017965 of February 6, 2009 and the Bank of Italy/Consob/Isvap No. 4 of March 4, 2010, we report that this account does not include any exposure related to covenants not complied with.

(18) Current financial liabilities

These amount to Euro 19,352,240 and principally comprise bank payables of the parent company of Euro 17,202,043 and interest on bonds for Euro 2,150,197.

(19) Other liabilities

The account mainly refers to emoluments for directors and employees.

(20) Related party transactions

The table reports the related party transactions during the year outlined according to the amounts, type and counterparties.

Party Type Consideration / balance Consideration / balance at
at September 30, 2017 September 30, 2016
Asset Italia S.p.A. Revenues 751,533 224,811
Asset Italia S.p.A. Trade receivables 250,010 224,811
Asset Italia 1 S.r.l. Revenues 1,200,000 -
Betaclub S.r.l. Revenues 18,750 -
Betaclub S.r.l. Trade receivables 18,750 -
BE S.p.A. Revenues 45,000 45,000
BE S.p.A. Trade receivables 30,000 30,000
ClubTre S.p.A. Revenues 37,500 37,500
ClubTre S.p.A. Trade receivables 37,500 37,500
Clubitaly S.p.A. Revenues 22,500 22,500
Clubitaly S.p.A. Trade receivables 22,500 22,500
Clubitaly S.p.A. Financial receivables 323,374 120,000
Gruppo IPG Holding S.p.A. Revenues 22,500 22,500
Gruppo IPG Holding S.p.A. Trade receivables 22,500 22,500
TIP-pre IPO S.p.A. Revenues 376,087 375,258
TIP-pre IPO S.p.A. Trade receivables 250,556 125,000
Party Type Consideration / balance Consideration / balance at
at September 30, 2017 September 30, 2016
Services provided to companies related to the Board of Directors Revenues 971,470 1,037,421
Services provided to companies related to the Board of Directors Trade receivables 9,570 59,570
Services received by companies related to the Board of Directors Costs (services received) 5,053,090 7,250,455
Services received by companies related to the Board of Directors Trade payables 4,586,090 6,837,955
Revenues (services
Services provided to the Board of Directors provided) - 375
Receivables for Services provided to the Board of Directors Trade receivables - 375

The services offered for all the above listed parties were undertaken at contractual terms and conditions in line with the market.

For the Board of Directors The Chairman Giovanni Tamburi

Milan, November 14, 2017

ATTACHMENTS

Declaration of the Executive Officer for financial reporting as per Article 81-ter of Consob Regulation No. 11971 of May 14, 1999 and subsequent amendments and supplements.

    1. The undersigned Alessandra Gritti, as Chief Executive Officer, and Claudio Berretti, as Executive Officer for financial reporting of Tamburi Investment Partners S.p.A., affirm, and also in consideration of Article 154-bis, paragraphs 3 and 4, of Legislative Decree No. 58 of February 24, 1998:
  • the conformity in relation to the characteristics of the company and
  • the effective application during the period of the consolidated financial statements

of the administrative and accounting procedures for the compilation of the consolidated interim report for the period ended September 30, 2017.

No significant aspect emerged concerning the above.

    1. We also declare that:
  • a) the 2017 third quarter consolidated interim report corresponds to the underlying accounting documents and records;
  • b) the consolidated interim report at September 30, 2017 was prepared in accordance with International Financial Reporting Standards (IFRS) and the relative interpretations published by the International Accounting Standards Board (IASB) and adopted by the European Commission with Regulation No. 1725/2003 and subsequent modifications, in accordance with Regulation No. 1606/2002 of the European Parliament and provides a true and correct representation of the results, balance sheet and financial position of Tamburi Investment Partners S.p.A.
  • c) the Directors' Report includes a reliable analysis of the significant events in the year and their impact on the consolidated financial statements, together with a description of the principal risks and uncertainties. The Directors' Report also contains a reliable analysis of the significant transactions with related parties.

The Chief Executive Officer The Executive Officer

Milan, November 14, 2017

Attachment 1 – Changes in AFS financial assets (measured at fair value)

Balance at 1.1.2017 increases decreases
in Euro No. of historic fair value increases write-downs book value acquisition or reclass. fair value decreases fair value reversal write-downs book value
shares cost adjustments (decreases) P&L fair value subscription increase decreases fair value P&L 30.9.2017
Non-listed companies
Azimut Benetti S.p.A. 737,725 38,990,000 38,990,000 38,990,000
Furn Invest S.a.S. 37,857,773 29,505,812 4,720,188 34,226,000 34,226,000
Talent Garden S.p.A. 6,250 500,000 500,000 500,000
Other equity instr. & other minor 1,303,791 376,000 (738,750) 941,041 855,000 1,796,041
Total non-listed companies 30,809,603 4,720,188 876,000 (738,750) 74,657,041 855,000 0 0 0 0 0 0 75,512,041
Listed companies
Amplifon S.p.A. 6,038,036 34,884,370 51,434,856 86,319,226 33,308,907 (12,800,884) (29,178,106) 77,649,143
Digital Magics S.p.A. 1,193,045 4,906,009 (1,458,837) 19,182 3,466,354 1,210,964 3,351,875 8,029,193
Ferrari N.V. USD 304,738 17,764,789 2,134,299 (3,090,941) 16,808,147 11,709,094 28,517,241
Fiat Chrysler Automobiles N.V. 746,000 16,625,205 (1,548,105) 15,077,100 6,643,330 (9,497,387) (913,683) 11,309,360
Fiat Chrysler Automobiles N.V. USD 2,076,925 312,958 17,656,453 17,969,411 13,538,065 31,507,476
Hugo Boss AG 901,000 62,522,390 (25,306,853) 15,159,593 52,375,130 14,830,460 67,205,590
M&C S.p.A. 1,886,201 428,368 (224,233) 2,090,336 27,637 (1,661,968) (456,005) 0
Moncler S.p.A. 5,670,000 5,131,568 92,368,223 97,499,791 46,456,187 (3,576,016) (1,918,562) 138,461,400
Monrif S.p.A 12,658,232 11,374,782 220,253 0 (9,205,161) 2,389,874 315,190 2,705,064
Other listed companies 8,173,369 (306,583) (308,594) (1,943,559) 5,614,632 406,016 2,410,657 (223,735) (54,544) (31,136) 8,121,889
Total listed companies 158,137,115 31,041,924 121,803,916 (11,372,953) 299,610,001 1,616,980 0 132,591,402 (27,759,990) (54,544) (32,497,492) 0 373,506,356
Total investments 188,946,718 35,762,112 122,679,916 (12,111,703) 374,267,042 2,471,980 0 132,591,402 (27,759,990) (54,544) (32,497,492) 0 449,018,397
Balance at 1.1.2017 decreases Book value
in Euro No. of historic write revaluations share of shareholder decreases increase Book value Share of results increase (decreases) (write-downs) at 30.9.2017
shares cost backs (write-downs) results as per loan capital o
r
(decrease) in accounts Purchases as per eq. meth. (decrease) or restitutions revaluations
at 30.9.2017 equity method advance restitutions fair value to equity
Asset Italia S.p.A. (1) 20,000,000 2,400,000 (126,688) 2,273,312 37,400,000 (303,029) 39,370,283
Be Think, Solve, Execute S.p.A. 31,582,225 16,596,460 954,434 (404,264) (371,156) 16,775,474 652,666 116,358 (467,417) 17,077,081
Clubitaly S.p.A. 29,730 33,000,000 (181,956) (93,128) 1,041,991 33,766,907 2,676,000 (94,551) 36,348,356
Clubtre S.p.A. (3) 29,544 17,500 6,731,798 41,948,846 (9,276,498) 63,245,806 102,667,452 20,818,381 (4,402,212) (38,594,889) 80,488,732
Gatti & Co Gmbh 10,700 275,000 (19,131) (1,133) 254,736 58,805 313,541
Gruppo IPG Holding S.p.A. 67,348 39,847,870 5,010,117 (7,597,729) 25,305,062 (2,472,406) (1,016,945) 59,075,969 741,818 4,939,455 (9,466,332) 55,290,910
Palazzari & Turries Limited 90,000 225,000 65,349 95,458 385,807 84,510 470,317
Tip-Pre Ipo S.p.A. 942,854 15,857,150 2,517,343 1,985,077 20,359,570 5,714,286 1,927,187 (381,738) 27,619,305
Total 108,218,980 5,010,117 (7,733,467) 35,383,146 41,948,846 (12,153,168) 64,884,773 235,559,227 46,532,104 28,083,424 (14,133,924) (39,062,306)
0
256,978,525

Attachment 2 - Changes in investments measured under the equity method

(1) Tracking shares not included

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