Quarterly Report • Nov 17, 2017
Quarterly Report
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2017 third quarter consolidated interim report tamburi investment partners group
| 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 |
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
| Emanuele Cottino | Chairman |
|---|---|
| Paola Galbiati | Standing Auditor |
| Andrea Mariani | Standing Auditor |
| Laura Visconti | Alternate Auditor |
| Fabio Pasquini | Alternate Auditor |
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
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.
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.
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.
During the period, the company did not carry out any research and development activity.
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
| (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 |
| 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 |
|---|---|---|---|---|
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 |
The TIP Group is an independent investment/merchant bank focused on Italian companies, with a particular involvement in:
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.
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.
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.
The choices adopted by the Group relating to the presentation of the consolidated financial statements are illustrated below:
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.
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.
These costs include "Salaries and wages" and "Director's fees" both in terms of the fixed and variable components matured in the period.
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 |
| 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.
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 |
"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.
| 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.
The investments in associates refer to:
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 the changes in the investments in associated companies, reference should be made to attachment 2.
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.
| 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:
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.
These concern non-derivative financial assets comprising investments in bonds for the temporary utilisation of liquidity.
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 |
The account amounts to Euro 158,078,940 and increased Euro 44,511,049 following the exercise of the warrants.
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.
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.
The negative reserve amounts to Euro 7,141,035. This is a non-distributable reserve.
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.
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 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.
The reserve is a negative Euro 483,655, unchanged compared to December 31, 2016.
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.
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.
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;
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.
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.
The account mainly refers to emoluments for directors and employees.
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
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.
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.
The Chief Executive Officer The Executive Officer
Milan, November 14, 2017
| 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 |
(1) Tracking shares not included
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