The EXOR Board of Directors' meeting, chaired by John Elkann, approved today the 2020 Half-year Financial Report.
NET ASSET VALUE (NAV)
At 30 June 2020 EXOR's NAV amounted to $20,955 million, a decrease of -$5,200 million (-19.9%) compared to $26,155 million at 31 December 2019. At 30 June 2020 the NAV per share amounted to $88.75, a decrease of $22.02 per share (-19.9%) compared to $110.77 at 31 December 2019. This compares to a decrease of -6.6% for the MSCI World Index.
At 30 June 2020, the NAV per share is calculated taking into account market prices for listed companies and independent fair valuations for non-listed assets updated at the end of the year. For PartnerRe, considering that the fair value at 31 December 2019 was aligned with the price under the Memorandum of Understanding signed with Covéa that subsequently decided not to conclude the transaction (waived on 12 May 2020), exceptionally the fair value at 30 June 2020 was updated and estimated by an independent expert.
The change in the NAV per share compared to the MSCI World Index in Dollars in the First Half of 2020 is presented below:
SUMMARY of CONSOLIDATED FINANCIAL RESULTS
RESULT OF THE PERIOD: EXOR closed the first half of the 2020 with a consolidated loss of -€1,318 million, compared to a profit of €2,427 million for the same period in 2019. The decrease of -€3,745 million is mainly attributable to the negative impacts of the Covid-19 pandemic on the overall performance of the subsidiaries.
EQUITY: At 30 June 2020 the consolidated equity attributable to owners of the parent amounted to €13,403 million with a net decrease of -€1,622 million compared to €15,025 million at year-end 2019, mainly due to the consolidated loss attributable to owners of the parent of -€1,318 million.
NET FINANCIAL POSITION: The consolidated net financial position of the Holdings System at 30 June 2020 is -€3,081 million and reflects a negative change of -€450 million compared to the negative financial position of -€2,631 million at 31 December 2019, due to investments (€391 million), payment of dividends (€100 million) and other net negative changes (€54 million) partially offset by dividends received from investments (€95 million).
SIGNIFICANT EVENTS IN THE FIRST HALF of 2020
Significant events below refer to EXOR N.V. and the Holdings System.
During the first half of 2020, the Covid-19 virus spread worldwide and was declared a pandemic by the World Health Organization on 11 March 2020. The virus, causing potentially deadly respiratory tract infections, has negatively affected and continues to negatively affect economic conditions regionally as well as globally, disrupt operations in countries particularly exposed to the contagion, affect supply chains or otherwise impact EXOR's businesses.
Governments around the world imposed travel bans, quarantines, restrictions on travel and the movement and gathering of people, as well as restrictions on commercial activity and other emergency public safety measures, some of which are still applicable or partly withdrawn.
As the severity of the Covid-19 pandemic became apparent, EXOR companies took actions to protect their employees and communities, as well as strengthen their financial position and limit the impact on their financial performance. FCA, CNH Industrial and Ferrari temporarily suspended productions (as of today partially restarted) across the majority of their manufacturing plants and certain other activities and implemented remote working arrangements, where feasible, across all regions. In addition, all sport events and activities in which Juventus is involved were temporarily suspended and then restarted and completed in the second half of 2020.
These measures, though temporary in nature and only partially lifted as a function of the decisions adopted by the governments in countries where such companies operate, may either continue, be reintroduced or increase depending on future developments with regards to the pandemic which are currently unknown.
Given the uncertainty linked to market conditions and restrictions on operating activities that could be implemented as a result of the future evolution of the pandemic, Ferrari has revised its guidance for 2020, while FCA and CNH Industrial have withdrawn their 2020 guidance and decided not to distribute an ordinary dividend in 2020 in relation to fiscal year 2019. Such decisions, adopted by the board of directors of FCA and CNH Industrial, do not significantly impact the strength of EXOR's balance sheet.
The ultimate severity of the Covid-19 outbreak is uncertain at this time and therefore EXOR cannot reasonably estimate the impact it will have on its operations and results and on the operations and results of its operating subsidiaries.
Juventus Football Club capital increase
On 10 January 2020 Juventus Football Club completed the execution of the capital increase proposed by its board of directors on 30 September 2019 and approved by the extraordinary shareholder meeting on 24 October 2019, with a full subscription of the share capital increase. After this operation, EXOR (that subscribed its portion) continues to hold 63.77% of the share capital.
PartnerRe - Covéa
On 3 March 2020 EXOR signed a Memorandum of Understanding for the sale of PartnerRe to Covéa, a leading French mutual insurer.
The Memorandum of Understanding provided for EXOR to receive a total cash consideration of $9 billion plus a cash dividend of $50 million, to be paid before closing.
On 12 May 2020 EXOR communicated that its board of directors acknowledged Covéa's notice that Covéa would have not honored its commitment to acquire PartnerRe in accordance with the terms of the Memorandum. The EXOR board reiterated its strong belief that a sale of PartnerRe to terms inferior to those established in the Memorandum of Understanding failed to reflect the value of the company. EXOR reaffirmed its commitment to support PartnerRe's development and retain ownership of the company.
Investment in VIA Transportation Inc.
On 30 March 2020 EXOR signed an agreement with Via Transportation Inc. (Via), under which EXOR would invest a total amount of $200 million to acquire an 8.87% stake in Via on a fully-diluted basis. On 16 April 2020, following receipt of US antitrust approval, EXOR announced the completion of its investment.
Via is a highly successful, rapidly growing technology company specializing in the dynamic, data-driven optimization of public mobility systems in cities all around the world.
The business, founded in 2012 by Daniel Ramot and Oren Shoval, first launched its innovative technology platform by providing an on-demand, shared-ride transit service in New York City in 2013.
EXOR will support Via in the next stage of its development that will involve further extending the proven power of the Company's proprietary technology platform from the B2C to the B2B environment, changing the way people move around the cities wherever Via is present.
Issue of non-convertible bond due on 29 April 2030
On 29 April 2020 EXOR N.V. issued bonds for a nominal amount of €500 million, maturing on 29 April 2030 with a fixed annual coupon of 2.25%. The bonds are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, with a BBB+ credit rating assigned by Standard & Poor's.
Acquisition of the controlling stake in GEDI Gruppo Editoriale S.p.A.
On 23 April 2020, following receipt of the approval from the competent authorities, EXOR, through its fully owned subsidiary Giano Holding, finalized the acquisition of the stake in GEDI owned by CIR (43.78% of the issued share capital) for a total consideration of €102 million (at the price of €0.46 per share).
At the end of April 2020 Giano Holding S.p.A. also acquired the GEDI shareholdings owned by Mercurio S.p.A., Sia Blu S.p.A. and Giacaranda Maria Caracciolo di Melito Falck, at the price of €0.46 per share, for a total consideration of €26 million.
With the completion of the above transactions, EXOR acquired control over GEDI and launched, through Giano Holding, a mandatory tender offer to acquire all of the ordinary shares of GEDI, at the price of €0.46 per share.
The mandatory tender offer successfully concluded on 30 June 2020 reaching the requirement for the delisting of GEDI in accordance with Italian law. At 30 June 2020 Giano Holding held 92% of the GEDI share capital (taking into account the treasury shares), for a total consideration of €207 million, including €14 million relating to shares previously held by EXOR.
For further information regarding the completion of the transaction and the delisting of GEDI refer to section Subsequent events below.
Approved resolutions at the Annual General Meeting of Shareholders held on 20 May 2020
The EXOR Annual General Meeting held on 20 May 2020, adopted the 2019 Annual Report and approved the dividend distribution of €0.43 per outstanding share, for a maximum distribution of approximately €100 million.
The Annual General Meeting also approved the amendment of the remuneration policy of the board of directors to align such policy with the new statutory requirements of the EU Shareholder Rights Directive.
The Annual General Meeting also reappointed Mr. John Elkann as executive director with title Chief Executive Officer (CEO) and Chairman, for a term of three years. Additionally, the AGM reappointed for a term of three years Mr. M. Bolland as non-executive director with the title of Senior Non-Executive Director, and each of Mr. A. Agnelli, Mr. J. Bae, Ms. M. Bethell, Mrs. L. Debroux, Mrs. G. Elkann, Mr. A. Horta-Osório and Mr. A. Nasi as non-executive directors.
The Annual General Meeting also approved the extension of the authorization for the purchase of EXOR's shares on the market for 18 months from the date of the Shareholder's resolution, for a maximum number of shares such as not to exceed the limit set by law, with a maximum disbursement of €500 million.
EXOR credit rating by Standard & Poor's
On 27 May 2020 Standard & Poor's affirmed EXOR's long-term and short-term ratings ('BBB+' and 'A-2' respectively) and revised the outlook to 'stable' from 'positive'.
Reopening of non-convertible EXOR bond due on 14 October 2034
On 19 June 2020 EXOR announced the reopening of its €300 million bonds issued on 14 October 2019 and due on 14 October 2034, increasing the amount by €200 million, with settlement date 23 June 2020. The new bonds, issued through a private placement to institutional investors with a fixed annual coupon of 1.75%, are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, with a BBB+ credit rating assigned by Standard & Poor's.
PERFORMANCE of SUBSIDIARIES
EXOR's 2020 Half-year Financial Report, which will be available at the head office of the company and on the website www.exor.com in the time frame established by law, includes comments on the performance of all the principal subsidiaries.
Execution of the reinvestment of CIR and Mercurio in GEDI
On 13 July 2020, in accordance with the agreements signed among the entities, CIR and Mercurio acquired from EXOR, for the same consideration in relation to the launched mandatory tender offer equal to €0.46 per share, a stake in Giano Holding corresponding to the 5% in transparency of the issued share capital of GEDI. The total consideration was of €23 million.
Finalization of the acquisition of the controlling stake in GEDI
On the basis of the final results of the mandatory tender offer, the conditions for the exercise of the Acquisition Obligation were fulfilled and therefore Giano Holding was required to purchase the remaining ordinary shares of GEDI in circulation (Sell Out phase). The period for the submission of the requests for sale took place from 7 July 2020 to 30 July 2020 (included).
On 29 July 2020 Giano Holding held in excess of 95% of the share capital of GEDI (taking into account the treasury shares), allowing the joint procedure with Consob and Borsa Italiana (Squeeze Out phase) to take place in order to reach the 100% of the share capital of GEDI and the delisting of the shares.
On 10 August 2020 Giano Holding completed the Squeeze Out phase acquiring the residual ordinary shares of GEDI (4.26% of the issued share capital) for a total consideration of €10 million.
On the same date, Borsa Italiana ordered the delisting of the ordinary shares of GEDI from the Market Telematico Azionario (MTA).
Cooperation agreement with Covéa
On 3 August 2020 EXOR reached an agreement with Covéa Coopérations S.A. under which Covéa will invest a total amount of €1.5 billion with EXOR and in special purpose reinsurance vehicles managed by PartnerRe.
A total amount of €750 million will be allocated for investment opportunities alongside EXOR. A further total amount of €750 million, with a three to five year lock-up period, will be allocated in a number of special purpose insurance vehicles managed by PartnerRe, investing in property catastrophe and other short-tail reinsurance contracts.
A €500 million investment in special purpose insurance vehicles will be made on 1 January 2021 with an additional €250 million investment to be made prior to or on 1 January 2024.
EXOR N.V. does not prepare budgets or business plans, nor does it publish forecast data or data on the basis of which it is possible to calculate forecast data.
Certain EXOR operating subsidiaries (FCA, Ferrari, CNH Industrial, GEDI) publish forecast data on their performance.
Other operating subsidiaries (PartnerRe and Juventus Football Club) publish information on the foreseeable outlook. Additional information is provided under 'Review of performance of the Operating Subsidiaries' in the Board Report.
The forecast data and information of the abovementioned operating companies are drawn up autonomously and communicated by the respective companies and are not homogeneous. Quantitative forecast disclosures prepared by these operating companies and the type of information provided, as well as the underlying assumptions and calculation methods vary according to the accounting principles applicable to each subsidiary and the conventional application practices in the respective sector of reference.
EXOR N.V. in fact, is a holding company without a specific business of reference, head of a diversified and non-integrated group that operates in different segments and does not exercise direction and coordination activities over its subsidiaries, which operate in a completely independent manner.
EXOR N.V. deems that the forecasted data and information of the subsidiaries are not significant or suitable for the purposes of providing indications about the prospective economic trend of EXOR N.V.'s operations, nor represent a forecast or estimate of the company's results. Therefore, in assessing EXOR N.V.'s future prospects it is not possible to rely on the data and prospective information published by the aforesaid operating subsidiaries.