Italmobiliare S p A : Quarterly financial results at September 30, 2020

ITALMOBILIARE

Additional periodic financial reporting as of September 30, 2020

November 5, 2020

ITALMOBILIARE

Società per Azioni

Head Office: Via Borgonuovo, 20

20121 Milan - Italy

Share Capital € 100,166,937

Milan Companies Register

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ITALMOBILIARE

INTRODUCTION

In accordance with the regulatory framework that transposed the EU Transparency Directive into Italian law, Italmobiliare has been issuing quarterly information, focusing on information that gives a concise overview of its business.

In particular, the information relates to the main economic and financial indicators of the Group (revenues, interim economic results, net financial position and NAV) which are expressed in quantitative and consistent form with the same information already provided in the Annual and Interim Reports.

The periodic financial information, together with a summary of the main events that occurred during the quarter and a comment on the performance of the main subsidiaries of the Italmobiliare Group, are approved by the Board of Directors and published on the Group website as already scheduled in the Group financial calendar.

SIGNIFICANT EVENTS DURING THE PERIOD

In January, Italmobiliare closed the purchase of a 20% stake in "Officina Profumo Farmaceutica di Santa Maria Novella S.p.A." based in Florence, a top-of-the-range cosmetics company and historical brand, bringing the number of its portfolio companies to nine. Italmobiliare S.p.A. invested 40 million euro in the operation, becoming a non-controlling shareholder. In August, Italmobiliare exercised its option to buy another 60% of the share capital and the transaction was closed in September for a total investment in the company of approximately 160 million euro, with the possibility of increasing its stake over time.

Starting in February, the situation was dramatically conditioned by the health emergency caused by the Covid-19 pandemic. It spread from China to Italy first and then to the rest of Europe and the world, resulting in a seriously unfavourable global macroeconomic framework that marked the entire half year. And despite some positive signs of a partial recovery in Europe, it is expected to continue for the rest of the year causing a state of considerable uncertainty.

The protection measures put in place by the institutions at international level led to a lockdown of many industrial and commercial activities, for Italy, in particular, between March and June, with serious consequences for operations, as well as for social life. The increase in new infections throughout Europe from September onwards implies that the situation of considerable uncertainty is going to persist.

Italmobiliare promptly implemented all safety and control measures in favour of employees, both at the Holding Company and at the Portfolio Companies, to limit possible occasions for contagion and to ensure continuity of production and commercial activities. The measures taken to support the Portfolio Companies and the responsiveness shown by them in such a complex situation have allowed us to limit the impacts of the pandemic essentially to those entities that are exposed to the retail world, which suffered inevitable slowdowns, while continuity of results was achieved in the other sectors, as explained in the subsequent paragraphs.

In the meantime, financial risk management made it possible to mitigate the impact of the negative performance of world financial markets on Italmobiliare's portfolio: thanks to effective diversification both by sector and by exposure to various geographical areas, it has shown considerable resilience in these first nine months of the year, despite all the difficulties. The

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impacts of the health emergency that have been visible to date have been relatively limited, involving those elements of Italmobiliare's portfolio that were most exposed to the dynamics of financial markets, which posted extremely negative performances during the period.

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ITALMOBILIARE

NET ASSET VALUE

At September 30, 2020 the Net Asset Value of Italmobiliare S.p.A., excluding treasury shares, amounted to 1,656.1 million euro, stable compared with June 30, 2020 (1,629.3 million euro) and down by 85 million euro compared with December 31, 2019 (1,741.1 million euro), against a capitalization of 1,245.6 million euro, showing a discount of 24.8%.

	December	June 30,	September	% of total
(in millions of euro)	31, 2019	2020	30, 2020
Listed equity investments	165.1	106.1	89.6	5.4%
Portfolio Companies	744.9	828.2	948.6	57.3%
Other equity investments	54.3	46.7	45.1	2.7%
Private equity funds	158.1	146.0	133.7	8.1%
Properties and related assets	49.1	49.6	49.8	3.0%
Financial assets, trading, cash and cash	569.6	452.7	389.3	23.5%
equivalents
Total Net Asset Value	1,741.1	1,629.3	1,656.1	100.0%

Compared with December 31, 2019, the 85 million euro decrease in Italmobiliare's NAV is mainly due to the distribution of ordinary and extraordinary dividends by Italmobiliare S.p.A. for a total of 76 million euro, the decrease in listed investments due to the fall in the market value of HeidelbergCement AG (-21.6 million euro) and other listed investments (-9.2 million euro, mainly attributable to the investment in Fin.Priv., a finance company that holds Mediobanca shares) against an overall increase in the value of the Portfolio Companies (+42.1 million euro based on the same scope of consolidation, as recorded in the interim financial report).

In particular, as regards the latter, there was an increase in the value of Caffè Borbone and a reduction in the value of Tecnica Group, while the other equity investments remained substantially stable.

The acquisition of 80% of Officina Profumo Farmaceutica di Santa Maria Novella S.p.A. led to a further increase in the portion represented by the Portfolio Companies of 161.7 million euro (for the investment in the newco FT2 which acquired the equity investment, of which 40 million already invested at June 30) with an equivalent reduction in liquidity. At the same time, some of the HeidelbergCement AG shares held were sold for an equivalent value of 42.7 million euro.

At September 30, 2020, the NAV per share, excluding treasury shares and dividends paid for 1.8 euro, amounted to 39.2 euro, a decrease of 5.54% compared with December 31, 2019.

The NAV was calculated taking into account:

• the market price at September 30, 2020 of the equity investments in listed companies;
• the value of unlisted companies determined by an independent expert at June 30, 2020, as reported in the interim financial report;
• the market value of real estate assets;
• the deferred tax effect.

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