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FIERA MILANO SPA

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Fiera Milano : The Board of Directors approves the Half-yearly financial report at 30 June 2021

07/28/2021 | 07:44am EST

FIERA MILANO: THE BOARD OF DIRECTORS APPROVES

THE HALF-YEARLY FINANCIAL REPORT AT 30 JUNE 2021

The results for the first half of 2021 were affected by the absence of exhibition and congress activities in Italy due to legislation stemming from the continuing COVID-19 pandemic.

Revenues: Euro 4.6 million, compared to 56.0 million in the first half of 2020

EBITDA: Euro -23.0 million, compared to 10.6 million in the first half of 2020

EBIT: Euro -45.3 million, compared to -11.9 million in the first half of 2020

Net loss: Euro -24.6 million, compared to a loss of 12.6 million in the first half of 2020

Net debt, before the effects of IFRS 16, of Euro 64.9 million compared to net debt of 23.9 million at 31 December 2020

The exhibition calendar for the second half of the year is in line with budget forecasts, although the events themselves will be held on a smaller scale than originally expected due to the uncertainties still present related to the evolution of the pandemic. As a result, the EBITDA target for the year 2021 is now expected to be in the range of Euro 23-28 million (compared to the previous Euro 35-45 million) while net debt before IFRS 16 effects is expected to be between Euro 24 and 28 million (compared to the previous Euro 0-10 million).

As at 30 June, the group had Euro 59 million in cash on hand plus undrawn credit lines of a further Euro 38 million to support the resumption of business activities.

In July, SIMEST disbursed the Euro 10 million "de minimis" grant from the "Integrated Promotion Fund".

Milan, 28 July 2021. The Board of Directors of Fiera Milano S.p.A. ("Fiera Milano" and/or the "Company") approved the Half-Yearly Financial Report at 30 June 2021.

Luca Palermo, Fiera Milano's CEO and General Manager, said: "The encouraging signs from the first in-person exhibitions give us confidence and confirm the exhibition system's role as a cornerstone of companies' growth strategies. Although the persistent uncertainties surrounding the pandemic are delaying the return to more normal business conditions, Fiera Milano remains firmly committed to delivering the CONN.E.C.T. 2025 strategic plan. During these months of forced inactivity, we worked closely with institutions and health authorities, third-party organisers, partners and industry associations to meticulously plan the restart of our exhibition and conference events. Our goal was to ensure that our customers can meet in complete safety and therefore get back to generating new networking and business opportunities. At the same time, we took the opportunity to expand and refine the range of solutions and services we offer, especially in the digital field. We know that we will increasingly deploy technology to develop a hybrid format, which has the undoubted advantage of offering our customers new products and services as well as a richer visitor experience. This will grow to become the industry standard in the coming years."

The half-year results were affected by the prolonged suspension of exhibition and congress activities in Italy, as required under Italian government regulations to contain and prevent the COVID-19 pandemic, which made it impossible to organise in-person events. Exhibitions could only be restarted from 15 June 2021 and congresses from 1 July 2021. In China, after an initial return to normality in the early months of the year, there was a further stoppage of the exhibitions business in Guangdong Province from June onwards. The scheduled exhibitions have been shifted to August.

During the period under review, the Company focused its efforts on creating the conditions for an effective and rapid return to business activities.

The exhibition and congress calendars were revised, when possible postponing events originally scheduled for the first half of the year to the second half. Following a huge organisational effort, the exhibition calendar has been put together not only with the aim of hosting as many events as possible (more than 30 exhibitions) but also trying to create synergies between related sectors. For example, events dedicated to the world of home and design will be held on the same dates in September. Homi will be held in conjunction with the next Salone del Mobile. Also in September, the entire fashion industry will be brought together in the week of 18 to 24 September. In October, Food & Beverage (TUTTOFOOD) and Professional Hospitality (HostMilano) will also be held over a single period. Further synergies will also be secured through MADE expo (Building), Sicurezza (Security) and Smart Building Expo (Home & Building Automation), which will be held simultaneously at fieramilano-Rho on 22 November.

At the same time, the Company has worked to secure adequate financial resources to ensure business continuity and to support the delivery of the strategic plan, at what is a highly unusual time due to the prolonged inability to carry on its core business. In the first half of 2021, Euro 87 million of medium/long-term loans were raised, with a maturity of no less than 5 years, most of which have a grace period of 24 months. Fiera Milano also has short-term credit lines of Euro 75 million.

Work also continued to contain management and personnel costs. The Salary Integration Fund (FIS) was used until the end of June due to the pause in business activities.

In coordination with Italian trade associations, intensive discussions were held in the first half with government institutions and health authorities to ensure the best possible conditions for the return to business.

On an operational note, BIT (the International Tourism Exchange) was held in Italy in May 2021. The resumption of in-person events was heralded by Sì Sposaitalia Collezioni at the end of June, followed a few days later by Milano Unica (6-7 July).

Last but not least, to speed up implementation of the CONN.E.C.T. 2025 strategic plan, some changes have been made to the company's organisational structure, including the recruitment of new managers and other external resources.

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SUSTAINABILITY

Fiera Milano's work on sustainability garnered significant results and awards during the first half of the year. In February, the new CONN.E.C.T. 2025 strategic plan was presented, making sustainability an integral part of the business model across the organisation. At the same time, the corporate purpose was defined and its mission, values and material topics were reviewed. In July, the parent company was awarded ISO 20121:2012 certification for sustainable event management for the following fields of activities: design, organisation, realisation and hospitality of exhibitions and support services.

The Company's progress on sustainability was confirmed by being awarded the IGI 2021 (Integrated Governance Index) prize, in which Fiera Milano take 1st place in the "extra 100" category. The Integrated Governance Index is based on a quantitative analysis model that measures the degree to which ESG factors are integrated into corporate strategies. Fiera Milano was also included in the 2021 ranking of 150 companies who are "Leaders in Sustainability", drawn up by Statista and Il Sole 24 Ore, which analysed over 1,500 companies.

In terms key stakeholder initiatives, the priority was protecting the health and safety of employees, suppliers and customers. In particular, the protocol for containing the spread of Coronavirus has been further bolstered to make sure that visitors, exhibitors and organisers can safely participate in exhibitions and events held in exhibition and congress centres.

Last but not least, the Company has launched an extraordinary training plan called "Fiera Milano Education", designed to boost employees' skills especially in the digital sphere. The project, which falls under the scope of the "Fondo Nuove Competenze" (New Skills Fund), is part of the wider skill transformation process set out in the CONN.E.C.T. 2025 plan. Some 50,000 hours of compulsory training will be provided during the second half of the year for all Group personnel in Italy.

Finally, it should be noted that in today's meeting the Board of Directors approved the "Policy for managing dialogue with institutional investors and with the generality of Fiera Milano S.p.A.'s shareholders" (Engagement Policy). This policy is available to the public on the Company's website www.fieramilano.it, in the Investors/Governance section, and on the authorised storage mechanism www.emarketstorage.it.

HALF-YEAR RESULTS

It should be remembered that the Group's business has seasonal elements due to exhibitions that are held on a biennial or multi-year basis.

Revenues from sales and services amounted to Euro 4.6 million compared to Euro 56.0 million in the first half of the previous year. The change is due to the suspension of business activities in Italy due to the COVID-19 pandemic. It should be noted that business took place under normal conditions in the first two months of the first half of 2020.

EBITDA was better than forecast, albeit negative by Euro 23.0 million, while in the first half of 2020 it was positive at Euro 10.6 million. The change is due to the aforementioned trend in

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revenues, partially offset by the reduction in costs, which especially in the period under review came from the management of exhibition sites and personnel costs.

EBIT was Euro -45.3 million, while in the first half of 2020 when it was Euro -11.9 million, mirroring the trend in EBITDA.

The net loss was Euro 24.6 million, compared to a loss of Euro 12.6 million in the first half of 2020, benefiting from the effects of the tax realignment of goodwill. This option generated a benefit of Euro 15.9 million against a substitute tax cost of Euro 2.0 million.

PERFORMANCE BY OPERATING SEGMENT

In the first half of the year, only one event was held at the fieramilano and fieramilanocity exhibition sites (10 events and 3 congresses with related exhibition space in the first half of 2020), for a total of 5,965 net square metres of exhibition space, compared to 273,785 in the same period of 2020. The number of exhibitors went from 5,085 in the first half of 2020 to 245 in the first half of 2021. Four exhibitions (one in the first half of 2020) was held abroad, for a total of 76,790 net square metres of exhibition space (3,910 square metres in the first half of 2020) and 1,700 exhibitors (100 in the first half of 2020).

Revenues from sales and services, before inter-segment exchange eliminations, amounted to Euro 5.1 million, compared to 58.1 million in the first half of 2020.

  • The Italian Exhibitions Business recorded revenues of Euro 2.9 million (Euro 49.4 million in the first half of 2020) due to the aforementioned suspension of the exhibitions business. Once again, it should be remembered that in the first half of 2020, business was normal until the end of February. EBITDA was Euro -20.4 million (Euro 11.9 million in the first half of 2020) while EBIT was Euro -40.1 million (Euro -7.9 million in the first half of 2020).
  • The Foreign Exhibitions Business recorded revenues of Euro 35 thousand as compared to 1.1 million in the first half of 2020. EBITDA was Euro -0.5 million (Euro -1.0 million in the first half of 2020). EBIT was Euro -0.6 million (Euro -1.2 million in the first half of 2020).
  • The Media segment returned revenues of Euro 0.9 million, compared to Euro 3.4 million in the first half of 2020, mainly due to the cancellation of exhibitions for the first half of 2021. EBITDA was Euro -0.8 million (Euro 0.2 million in the first half of 2020), following the trend in revenues, while EBIT was Euro -0.8 million (Euro 0.1 million in the first half of 2020).
  • The Congress segment posted revenues of Euro 1.2 million compared to Euro 4.2 million in the first half of 2020. The decrease can be attributed to the suspension of in-person congresses due to the COVID-19 emergency. EBITDA was Euro -1.3 million (Euro -0.4 million in the first half of 2020) and reflects the trend in revenues, while EBIT was Euro -3.8 million (Euro -2.9 million in the first half of 2020).

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NET FINANCIAL POSITION

Net financial position at 30 June 2021, before IFRS 16 effects, shows a net debt of Euro 64.9 million, up by Euro 41 million compared to Euro 23.9 million at 31 December 2020. The change is due to negative cash flows caused by the suspension of exhibition activities in the six months under review. A rebalancing is expected in the second half of the year due to the busy exhibition calendar.

Net financial debt, including IFRS 16 lease liabilities, amounted to Euro 501.0 million as compared to 473.4 million at 31 December 2020.

BUSINESS OUTLOOK

Despite the still uncertain public-health scenario, with the spread of new variants of COVID-19, the current situation is more stable than in the recent past. This is mainly due to the increase in vaccine uptake and the Green Pass system, which came into force on 1 July, facilitating mobility within the EU area, which is key to ensuring participation in international exhibitions and congresses.

The exhibition calendar for the period September-December 2021 promises to be very busy, with more than 30 on the calendar. Expected attendance and occupancy levels are, however, lower than initially estimated due to continuing uncertainties over the evolution of the pandemic. In particular, the main performance indicators for the special edition of Salone del Mobile in September and other scheduled exhibitions were down on estimates made in previous quarters.

This situation has led the Company to revise its forecasts solely for the current year. Based on the information currently available, revenues are expected to be between Euro 130 and 140 million, with EBITDA of between Euro 23 and 28 million and net financial debt before IFRS 16 effects in the range of Euro 24-28 million. If business resumes from September, the 2021-2025 Strategic Plan (presented to the market last February) assumed turnover of Euro 160-180 million, EBITDA in the range of Euro 35-45 million and net financial debt before IFRS 16 effects in the range of Euro 0-10 million.

In July, SIMEST disbursed the Euro 10 million grant from the Integrated Promotion Fund (FPI) to meet fixed costs not covered by profits.

Fiera Milano's financial situation is balanced and, as at 30 June 2021, the financial covenants relating to existing medium- and long-term loan agreements are fully respected. The level of debt ensures the operational flexibility needed to plan 2022 schedules and seize any growth opportunities that may arise.

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This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Fiera Milano S.p.A. published this content on 28 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 July 2021 11:43:08 UTC.


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Sales 2021 128 M 145 M 145 M
Net income 2021 9,71 M 11,0 M 11,0 M
Net Debt 2021 422 M 478 M 478 M
P/E ratio 2021 24,2x
Yield 2021 -
Capitalization 235 M 267 M 266 M
EV / Sales 2021 5,12x
EV / Sales 2022 3,55x
Nbr of Employees 679
Free-Float 30,8%
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Last Close Price 3,29 €
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Managers and Directors
Luca Palermo CEO, Director & General Manager
Carlo Bonomi Chairman
Sebastiano Carbone Director-Administrative, Financial & Tax
Marina Natale Independent Director
Alberto Baldan Independent Non-Executive Director
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