The Board of Directors of IFIL, which met today in Turin under the chairmanship of
Gianluigi Gabetti, examined the consolidated results for the third quarter of 2005 and the
first nine months of the year.
The third quarter of 2005 ends with a consolidated profit of €291.7 million for the IFIL
Group; a consolidated loss of €123.4 million was reported for the corresponding period of
2004. The positive change of €415.1 million is mainly due to the improvement in the
results of the Fiat Group. The advances made by the Fiat Group and the net gain realized
on the sale of La Rinascente are principally the reasons for the improvement in the
consolidated result for the first nine months of the year which went from a loss of
€212.5 million to a profit of € 915.8 million: the positive change is a total of
€1,128.3 million.
The consolidated net financial position of the “Holdings System” at September 30, 2005
shows a liquidity position of €356.5 million. This is a decrease of €323.5 million
compared to the balance at the end of 2004 (€680 million) and is due, on one hand, to net
cash generated by the sale of the investment in La Rinascente and the collection of
dividends from the holdings and, on the other, by the payment of dividends on the part of
IFIL S.p.A. and the investments made in Fiat and Sanpaolo IMI.
Consolidated equity of the Group at September 30, 2005 amounts to €5,121.2 million
(€3,792.9 million at the end of 2004). The increase of €1,328.3 million is primarily due to
the fair value adjustment of the investment in Sanpaolo IMI, consolidated profit for the
period and positive foreign exchange differences.
Major events
On September 20, 2005, IFIL purchased 82,250,000 Fiat ordinary shares from Exor
Group (a subsidiary of Giovanni Agnelli e C. S.a.p.az.) at the price of €6.5 per share for
an investment of €534.6 million. Prior to the purchase of the above stock, after the
purchase of 5,500,000 ordinary shares on the market by IFIL on September 7, 8 and 9 for
€41.1 million, the investment held by IFIL in Fiat totaled 246,083,447 ordinary shares
and 31,082,500 preferred shares. These transactions allowed IFIL to maintain its
investment in Fiat ordinary capital stock unchanged (30.06%) after the capital increase by
Fiat which took place on September 20, 2005. On September 17, 2005, in response to a
request by Consob to provide additional information, IFIL and Giovanni Agnelli e C.
issued two press releases containing the information requested.
In its press release of October 6, 2005, IFIL announced that by the end of 2005 the
Managing Director and General Manager of the Company, Daniel John Winteler, will
become the Chairman of the subsidiary Alpitour, while the manager of Corporate
Finance, Fabrizio Prete, will take over the position of General Manager of the same
tourism company. An important stock option plan for Alpitour stock will be offered to
both men who will continue to carry out their functions at IFIL until they assume their
new posts. At one of its next meetings, the IFIL Board will review and adopt the new
organizational structure of the Company.
On October 26, 2005, Standard & Poor’s - following the investment in Fiat announced on
September 15, 2005 - downgraded its rating of IFIL’s debt from A-/A-2 to BBB+/A-2,
with a stable outlook.
Once approval was received from the European antitrust authority, Pirelli RE became a
stockholder of Turismo&Immobiliare at the beginning of November, purchasing about an
8.3% stake in the capital of this company from each of the three founding stockholders
(IFIL, Banca Intesa and the Marcegaglia Group) for €1.1 million and assuming the same
commitments. Turismo&Immobiliare, the capital of which is today owned by the
aforementioned four private stockholders, each with a 25% holding, has a 49% interest in
Italia Turismo, the largest real estate operator in the tourism-hotel sector in Italy with
important investments in Apulia, Calabria, Basilicata, Sicilia and Sardinia. A 51% stake
in Italia Turismo is held by Sviluppo Italia.
Finally, on November 4, 2005, Sequana Capital, the French company controlled by IFIL,
announced the closing of the sale of 70.5% of Permal Group capital to Legg Mason for
an equivalent amount of $705 million, of which 25% is in Legg Mason stock.
Business outlook
Taking into account the consolidated profit reported for the first nine months of 2005
(€915.8 million) and the forecasts formulated by the major holdings, it is expected that
the 2005 consolidated financial statements of the IFIL Group will show a strong growth
in the economic and financial results compared to 2004.
Also with regard to IFIL S.p.A., the profit for 2005 is expected to be significantly higher
than that of the prior year (€80.2 million).
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