DeA Capital bilancio 2012 eng

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DeA Capital bilancio 2012 eng

  1. 1. Annual financial statements to 31 December 2012 1 FINANCIAL STATEMENTS TO 31 DECEMBER 2012 ______________________ 2012 Board of Directors of DeA Capital S.p.A. Milan, 8 March 2013
  2. 2. Annual financial statements to 31 December 2012 2 DeA Capital S.p.A. Corporate information DeA Capital S.p.A. is subject to the management and co- ordination of De Agostini S.p.A. Registered Office: Via Brera, 21, Milan 20121, Italy Share capital: EUR 306,612,100 (fully paid-up) comprising 306,612,100 shares with a nominal value of EUR 1 each (including 32,006,029 held in the portfolio at 31 December 2012). Tax code, VAT code and recorded in the Milan Register of Companies under no. 07918170015 Board of Directors (*) Chairman Lorenzo Pellicioli Chief Executive Officer Paolo Ceretti Directors Lino Benassi (1) Rosario Bifulco (1/4/5) Marco Boroli Daniel Buaron Claudio Costamagna (3/5) Marco Drago Roberto Drago Severino Salvemini (2/3/5) Board of Statutory Auditors (*) Chairman Angelo Gaviani Regular Auditors Gian Piero Balducci Cesare Andrea Grifoni Alternate Auditors Andrea Bonafè Maurizio Ferrero Giulio Gasloli Secretariat of the Board of Directors Diana Allegretti Manager responsible for preparing the company’s accounts Manolo Santilli Independent Auditors KPMG S.p.A. (*) In office until the approval of the financial statements to 31 December 2012 (1) Member of the Control and Risk Committee (2) Member and Chairman of the Control and Risk Committee (3) Member of the Remuneration Committee (4) Member and Co-ordinator of the Remuneration Committee (5) Independent director
  3. 3. Annual financial statements to 31 December 2012 3 Contents Report on Operations 1. Profile of DeA Capital S.p.A. 2. Information for shareholders 3. DeA Capital Group’s key balance sheet and income statement figures 4. Significant events during the year 5. DeA Capital Group’s results 6. Results of the Parent Company DeA Capital S.p.A. 7. Other information 8. Proposal to approve the financial statements of DeA Capital S.p.A. for the year to 31 December 2012 and related and resulting resolutions Consolidated financial statements for the year to 31 December 2012 Statement of responsibilities for consolidated financial statements pursuant to art. 154-bis of Legislative Decree 58/98 Information pursuant to art. 149-duodecies of the Consob Issuer Regulations - consolidated financial statements Annual financial statements for the year to 31 December 2012 Statement of responsibilities for accounts pursuant to art. 154-bis of Legislative Decree 58/98 Information pursuant to art. 149-duodecies of the Consob Issuer Regulations - annual financial statements Summary of subsidiaries’ financial statements to 31 December 2012 Independent Auditors’ Reports (Original report in Italian version only) Report of the Board of Statutory Auditors (Original report in Italian version only)
  4. 4. Annual financial statements to 31 December 2012 4 Report on Operations
  5. 5. Annual financial statements to 31 December 2012 5 1. Profile of DeA Capital S.p.A. With an investment portfolio of around EUR 870 million and assets under management of over EUR 10,600 million, DeA Capital S.p.A. is one of Italy’s largest alternative investment operators. The company, which operates in both the Private Equity Investment and Alternative Asset Management businesses, is listed on the FTSE Italia STAR segment of the Milan stock exchange, and heads the De Agostini Group in the area of financial investments. With reference to the Private Equity Investment business, DeA Capital has "permanent" capital, and therefore has the advantage – compared with traditional private equity funds, which are normally restricted to a pre-set duration – of greater flexibility in optimising the timing of entry to and exit from investments. In terms of investment policy, this flexibility allows it to adopt an approach based on value creation over the medium to long term. In the Alternative Asset Management business, DeA Capital S.p.A. – through its subsidiaries IDeA FIMIT SGR and IDeA Capital Funds SGR – is Italy’s leading operator in real estate fund management and private equity funds of funds programmes, respectively. The two companies are active in the promotion, management and value enhancement of investment funds, using approaches based on sector experience and the ability to identify opportunities for achieving the best returns. As Alternative Asset Management focuses on managing funds with a medium-term to long-term duration, it generates cash flows that are relatively stable over time for DeA Capital S.p.A. This, in turn, enables the company to cover the typically longer investment cycle of the private equity investment sector. PRIVATE EQUITY INVESTMENT ALTERNATIVE ASSET MANAGEMENT  Direct investments In the services sector, in Europe and Emerging Europe.  Indirect investments In private equity funds of funds, co- investment funds and theme funds.  IDeA Capital Funds SGR, which manages private equity funds (funds of funds, co-investment funds and theme funds) Assets under management: EUR 1.2 billion  IDeA FIMIT SGR, which manages real estate funds. Assets under management: EUR 9.4 billion  IRE/IRE Advisory, which operates in project, property and facility management, as well as real estate brokerage
  6. 6. Annual financial statements to 31 December 2012 6 At the end of 2012, the corporate structure of the Group headed by DeA Capital S.p.A. (DeA Capital Group, or the Group) was as summarised below: DeA Capital S.p.A. Shareholdings and VC funds 100% DeA Capital Investments S.A. (Luxembourg) Quota IDeA OF I Quota IDeA I Fund of Funds Shareholding Kenan Investments Shareholding Santé Shareholding Sigla Luxembourg Shareholding Migros IRE (ex. IDeA SI) IRE Advisory (ex. IDeA Agency) 100% IDeA Capital Funds SGR 100% 100% Quota ICF II 100% Shareholding Sigla Shareholding GDS Private Equity Investment Alternative Asset Management Holding Companies Quota EESS IFIM 100% 20,98% 40,32% IDeA FIMIT SGR Quota AVA Private Equity Investment “Direct” Private Equity Investment “Indirect” DeA Capital Real Estate Alternative Asset Management With regard to the corporate structure shown above, on 1 January 2012, the merger by incorporation of the wholly-owned subsidiary IDeA Alternative Investments into DeA Capital S.p.A., which was decided by the Boards of Directors of these companies on 26 July 2011, became effective. On 28 March 2012, an agreement was signed with Deb Holding, a company controlled by the director Daniel Buaron that holds 30% of the share capital of FARE Holding. The purpose of the agreement was to bring forward, with effect from 24 April 2012, the exercise of the option to sell the stake in FARE Holding held by Deb Holding to DeA Capital S.p.A. Under the agreements stipulated, on 24 April 2012 DeA Capital S.p.A. took full control of FARE Holding, and changed the company name of FARE Holding and its subsidiaries FARE and FAI, to DeA Capital Real Estate, IDeA Servizi Immobiliari and IDeA Agency respectively. At the end of November 2012, these two companies were re-named Innovation Real Estate (IRE) and Innovation Real Estate Advisory (IRE Advisory) respectively. On 11 April 2012, an agreement was signed with Massimo Caputi and the company he controls, Feidos S.p.A., which together own a stake of 41.69% in I.F.IM. (IFIM), which in turn holds a stake of 20.98% in IDeA FIMIT SGR. The purpose of the agreement was to bring forward, to this date, the exercise of the option to sell the stakes in IFIM held by Massimo Caputi and Feidos to DeA Capital S.p.A. Following the transaction, DeA Capital S.p.A. acquired full control of IFIM. In October 2012, the DeA Capital Group launched its plan to exit from the investment advisory business carried out by IDeA SIM. This was effected via an agreement with the company’s CEO to withdraw the powers conferred on him, the cancellation of the active asset management agreements and, from 15 November 2012, the termination of the investment advisory service. Approving the company’s application, Consob issued resolution 18466 of 13 February 2013, which revoked IDeA SIM’s authorisation to provide investment services pursuant to art. 1, para. 5f) of Legislative Decree 58 of 24 February 1998. It also removed the
  7. 7. Annual financial statements to 31 December 2012 7 company from the register of real estate brokerage companies. Lastly, on 25 February 2013, in compliance with the provisions of various agreements, DeA Capital S.p.A. acquired the shares held by the former CEO of IDeA SIM, equal to 30% of its capital, bringing its investment to 95% of the company’s capital. To complete the changes made to the Group's corporate structure, on 29 November 2012, Soprarno SGR’s shareholder structure was restructured with the resulting reduction in DeA Capital S.p.A.’s equity investment from 65% to 20%, via the following transactions: - the sale by DeA Capital S.p.A. of 25% of Soprarno SGR to Banca Ifigest S.p.A. (Ifigest), for a payment of EUR 0.5 million, with the simultaneous cancellation of the option for Ifigest to sell its stake in Soprarno SGR to DeA Capital S.p.A., for the same amount - a capital increase in kind carried out via the transfer of the asset management business held by Cassa di Risparmio di San Miniato (CARISMI) to Soprarno SGR: the business was valued at around EUR 4.5 million (in line with the value attributed to Soprarno SGR).
  8. 8. Annual financial statements to 31 December 2012 8 At 31 December 2012, the DeA Capital Group reported Group shareholders’ equity of EUR 723.1 million, corresponding to a net asset value (NAV) of EUR 2.63 per share, with an investment portfolio of EUR 873.1 million. More specifically, the investment portfolio, which consists of private equity investments of EUR 464.7 million, private equity investment funds of EUR 180.8 million and net assets relating to the Alternative Asset Management business of EUR 227.6 million breaks down as follows. Investment portfolio n. EUR/mln Equity investments 9 464.7 Funds 12 180.8 Private Equity Investment 21 645.5 Alternative Asset Management (*) 4 227.6 Investment portfolio 25 873.1 (*) Equity investments in subsidiaries relating to Alternative Asset Management are valued using the equity method in this table. December 31,2012  PRIVATE EQUITY INVESTMENT o Main investments  Strategic shareholding in Générale de Santé (GDS), France's leading private healthcare provider, whose shares are listed on the Eurolist market in Paris (with a free float of less than 5% and low trading volumes). The investment is held through the Luxembourg-registered company Santé S.A., an associate of the DeA Capital Group (with a stake of 42.89%)  Minority shareholding in Migros, Turkey's biggest food retail chain, whose shares are listed on the Istanbul Stock Exchange. The investment is held through the Luxembourg-registered company Kenan Investments S.A., an investment recorded in the AFS portfolio of the DeA Capital Group (with a stake of 17.03%)  Strategic shareholding in Sigla, which provides consumer credit for non- specific purposes (salary-backed loans and personal loans) and services non- performing loans in Italy. The equity investment is held through the Luxembourg-registered company Sigla Luxembourg S.A., an associate of the DeA Capital Group (with a stake of 41.39%)
  9. 9. Annual financial statements to 31 December 2012 9 o Funds  units in four funds managed by the subsidiary IDeA Capital Funds SGR i.e. in the funds of funds IDeA I Fund of Funds (IDeA I FoF) and ICF II, in the co-investment fund IDeA Opportunity Fund I (IDeA OF I, formerly IDeA CoIF I) and in the theme fund IDeA Energy Efficiency and Sustainable Growth (IDeA EESS)  a unit in the real estate fund Atlantic Value Added (AVA) managed by IDeA FIMIT SGR  units in seven venture capital funds  ALTERNATIVE ASSET MANAGEMENT  controlling interest in IDeA Capital Funds SGR (100%), which manages private equity funds (funds of funds, co-investment funds and theme funds) with about EUR 1.2 billion in assets under management and four managed funds  controlling interest in IDeA FIMIT SGR (61.30%), Italy's largest independent real estate asset management company with about EUR 9.4 billion in assets under management and 31 managed funds (including five listed funds)  controlling stake (100%) in IRE/IRE Advisory, which operate in project, property and facility management, as well as real estate brokerage
  10. 10. Annual financial statements to 31 December 2012 10 2. Information for shareholders  Shareholder structure - DeA Capital S.p.A. (#) De Agostini SpA 58,3% Treasury stock 10.4% Mediobanca 4,8% DEB Holding* 3,8% Free float 22.7% (#) Figures to 31 December 2012 (*) company controlled by director Daniel Buaron
  11. 11. Annual financial statements to 31 December 2012 11  Share performance (°) Period from 11 January 2007, when DeA Capital S.p.A. began operations, to 31 December 2012 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 DeA Capital LPX 50 FTSE Star FTSE All Period from 1 January 2012 to 31 December 2012 1.10 1.20 1.30 1.40 1.50 1.60 1.70 DeA Capital FTSE All FTSE Star LPX 50 (°) Source: Bloomberg
  12. 12. Annual financial statements to 31 December 2012 12  Investor relations DeA Capital S.p.A. maintains stable and structured relationships with institutional and individual investors. In 2012, the company continued its communications campaign, participating in the Milan STAR Conference in March 2012 and the London STAR Conference in October 2012, and holding meetings and conference calls with institutional investors, portfolio managers and financial analysts from Italy and abroad. Coverage of the DeA Capital share is currently carried out by Equita SIM and Intermonte SIM, the two main intermediaries on the Italian market, with Intermonte SIM acting as a specialist. The research prepared by these intermediaries is available in the Investor Relations section of the website www.deacapital.it. In December 2008, the DeA Capital share joined the LPX50® and LPX Europe® indices. The LPX® indices measure the performance of the major listed companies operating in private equity (Listed Private Equity or LPE). Due to its high degree of diversification by region and type of LPE investment, the LPX50® index has become one of the most popular benchmarks for the LPE asset class. The method used to constitute the index is published in the LPX Equity Index Guide. For further information please visit the website: www.lpx.ch. The DeA Capital share is also listed on the GLPE Global Listed Private Equity Index, the index created by Red Rocks Capital, a US asset management company specialising in listed private equity companies. The index was created to monitor the performance of listed private equity companies around the world and is composed of 40 to 75 stocks. For further information: www.redrockscapital.com (GLPE Index). The website is the primary mode of contact for individual investors, who may choose to subscribe to a mailing list and send questions or requests for information and documents to the company's Investor Relations department, which is committed to answering queries promptly, as stated in the Investor Relations Policy published on the site. A quarterly newsletter is also published for individual investors with the aim of keeping them updated on key events, as well as providing clear and simple analysis of quarterly results and share performance. DeA Capital also launched a mobile site, www.deacapital.mobi in July 2012. This will offer a further tool to stakeholders, who will be able to access key information about DeA Capital via their mobile phone or smartphone. Performance of the DeA Capital share at 31 December 2012 The company’s share declined by 52.7% between 11 January 2007, when DeA Capital S.p.A. began operations, and 31 December 2012. In the same period of time, the FTSE All-Share®, FTSE Star® and LPX50® reported performances of -59.4%, -36.6% and -43.7% respectively. The DeA Capital share gained 0.8% in 2012, while the FTSE All-Share®, the Italian market index, gained 8.4%, the FTSE Star® gained 16.6% and the LPX50® gained 24.8%. The share’s liquidity was lower than in 2011, with average daily trading volumes of around 103,000 shares.
  13. 13. Annual financial statements to 31 December 2012 13 The share prices recorded in 2012 are shown below (in EUR per share) 2012 Maximum price 1.49 Minimum price 1.17 Average price 1.31 Price at 31 December 2012 1.34 (EUR million) 31 Dec 2012 Market capitalisation 411 Capitalisation net of own shares 368
  14. 14. Annual financial statements to 31 December 2012 14 3. The DeA Capital Group’s key balance sheet and income statement figures The DeA Capital Group’s key income statement and balance sheet figures to 31 December 2012 compared with the corresponding figures to 31 December 2011 are shown below. 2012 2011 NAV/share (EUR) 2.63 2.38 Group NAV 723.1 669.0 Parent Company net profit/(loss) 2.3 (32.1) Group net profit/(loss) (26.3) (43.6) Comprehensive income (Group share) 62.5 (70.2) (Statement of Performance – IAS 1) Investment portfolio 873.1 775.9 Net financial position – Holding Companies (141.6) (113.5) Net financial position consolidated (123.6) (102.5) (EUR million) The table below shows the composition of NAV during 2012. Group NAV at 31.12.11 669.0 280.7 2.38 Purchase of own shares (8.0) (6.1) 1.31 Other comprehensive income - Statement of Performance – IAS 1 62.5 Other movements of NAV (0.4) Group NAV at 31.12.12 723.1 274.6 2.63 (*) Average price of purchases in 2012 Change in Group NAV Total value (EUR m) No. Shares (millions) Value per share (€) (*)
  15. 15. Annual financial statements to 31 December 2012 15 4. Significant events during the year Significant events that occurred in 2012 are described below.  IDeA I Fund of Funds (IDeA I FoF) - Paid calls/reimbursements During 2012, the DeA Capital Group increased its investment in the IDeA I FoF fund following total payments of EUR 17.2 million. At the same time, it received reimbursements of EUR 14.4 million to be used in full to reduce the carrying value of the units. In relation to the relevant portion, total payments made by the DeA Capital Group to IDeA FoF I from the beginning of the fund’s operations until 31 December 2012 were EUR 130.3 million, with a residual commitment of EUR 43.2 million. The units held in the fund are valued in the consolidated financial statements at EUR 103.1 million.  IDeA I Opportunity Fund I (IDeA OF I) - Paid calls/reimbursements During 2012, the DeA Capital Group increased its investment in the IDeA OF I fund with payments totalling EUR 17.0 million. In relation to the relevant portion, total payments made by the DeA Capital Group to IDeA OF I from the beginning of the fund’s operations until 31 December 2012 were EUR 70.1 million, with a residual commitment of EUR 31.7 million. The units held in the fund are valued in the consolidated financial statements at EUR 48.1 million.  ICF II (Fund of Funds) - Paid calls/reimbursements During 2012, the DeA Capital Group increased its investment in the ICF II fund following total payments of EUR 9.2 million. At the same time, it received reimbursements of EUR 1.3 million to be used in full to reduce the carrying value of the units. In relation to the relevant portion, total payments made by the DeA Capital Group to IDeA ICF II from the beginning of the fund’s operations until 31 December 2012 were EUR 17.3 million, with a residual commitment of EUR 33.7 million. The units held in the fund are valued in the consolidated financial statements at EUR 16.5 million.  IDeA EESS – Paid calls/reimbursements On 4 September 2012, the IDeA EESS fund completed the third closing, taking overall commitments to around EUR 59.5 million. Following the entry of the new unitholders, the Group held a 21.53% minority shareholding.
  16. 16. Annual financial statements to 31 December 2012 16 In 2012, the DeA Capital Group increased its investment in the IDeA EESS fund with payments totalling EUR 1.0 million. In relation to the relevant portion, total payments made by the DeA Capital Group to IDeA EESS from the beginning of the fund’s operations until 31 December 2012 were EUR 0.9 million, with a residual commitment of EUR 11.6 million. The units held in the fund are valued in the consolidated financial statements at EUR 0.6 million.  Acquisition of the remaining shares in FARE Holding and IFIM On 28 March 2012, an agreement was signed with Deb Holding, a company controlled by the director Daniel Buaron that holds 30% of the share capital of FARE Holding. The purpose of the agreement was to anticipate, with effect from 24 April 2012, the exercise of the put option held by Deb Holding on its own stake in FARE Holding. The transaction, which enabled DeA Capital S.p.A. to acquire full control of FARE Holding, set the price of the stake at EUR 31.8 million, in addition to the payment of amounts corresponding to the NAV of units of the Atlantic 1 and Atlantic 2/Berenice funds (in line with the amount booked under the net financial position at 31 December 2011), payable as of 12 December 2013. The agreement also stipulates payment to Deb Holding of an amount equal to 30% of any dividends to be distributed by FARE Holding for 2012. In accordance with the agreements already in place, director Daniel Buaron resigned from his positions at IDeA FIMIT SGR and FARE Holding, with effect from 12 April 2012 (the date of the approval of the 2011 financial statements of IDeA FIMIT SGR) and 24 April 2012 respectively. Under the agreements stipulated, on 24 April 2012 DeA Capital S.p.A. changed the company name of FARE Holding and its subsidiaries FARE and FAI, to DeA Capital Real Estate, IDeA Servizi Immobiliari and IDeA Agency respectively. At the end of November 2012, these two companies were re-named Innovation Real Estate (IRE) and Innovation Real Estate Advisory (IRE Advisory) respectively. On 11 April 2012 the agreement was signed with Massimo Caputi and the company he controls, Feidos S.p.A., which together own a stake of 41.69% in I.F.IM. (IFIM), which in turn holds 20.98% in IDeA FIMIT SGR, for the purpose of anticipating, on this date, the exercise of the option to sell to DeA Capital S.p.A. the stakes in IFIM held by Massimo Caputi and Feidos S.p.A.. The transaction, which enabled DeA Capital S.p.A. to acquire full control of IFIM, was concluded for EUR 19.3 million. The agreement also provides for the payment to the sellers of a supplement to the price (earn- out), connected to the completion, by IDeA FIMIT SGR - by 30 June 2013 - of potential new funds, negotiations for which were already under way when Massimo Caputi sold his stake. In accordance with agreements in force, Massimo Caputi resigned from his positions at IDeA FIMIT SGR and IFIM, with effect from 12 April 2012.
  17. 17. Annual financial statements to 31 December 2012 17  Dividends from Alternative Asset Management activities On 27 March 2012, the shareholders’ meeting of IDeA Servizi Immobiliari (formerly FARE, now IRE) voted to pay dividends totalling EUR 3.0 million entirely to DeA Capital S.p.A. The dividend was paid on 31 March 2012. On 12 April 2012, the shareholders’ meeting of IDeA FIMIT SGR voted to pay a dividend totalling EUR 11.8 million (paid on 25 May 2012), of which around EUR 7.2 million went to FARE Holding (now DeA Capital Real Estate) and IFIM, a wholly-owned subsidiary of DeA Capital S.p.A. On 17 April 2012, the shareholders' meeting of IDeA Capital Funds SGR approved the company's financial statements to 31 December 2011 and voted to pay dividends totalling EUR 4.8 million entirely to DeA Capital S.p.A. The dividend was paid on 13 July 2012. In summary, dividends paid during 2012 by the Alternative Asset Management business to the DeA Capital Group's holding companies totalled EUR 15.0 million.  Share buy-back plan On 17 April 2012, the shareholders’ meeting approved a new plan to buy and sell own shares. The plan cancelled and replaced the previous plan authorised by the shareholders’ meeting on 19 April 2011, which was scheduled to expire on 19 October 2012. The new plan will have the same objectives as the previous one, including the purchase of own shares to be used for extraordinary operations and share incentive plans, offering shareholders a means of monetising their investment, stabilising the share price and regulating trading within the limits of the legislation in force. The authorisation specifies that purchases may be carried out, for a maximum period of 18 months starting from 17 April 2012, in accordance with all procedures allowed by current regulations, and that DeA Capital S.p.A. may also sell the shares purchased for the purposes of trading. The unit price for the purchase of the shares is set by the Board of Directors, but in any case must not be more than 20% above or below the share’s reference price on the trading day prior to each purchase. In contrast, the authorisation to sell own shares already held in the company’s portfolio and any shares bought in the future was granted for an unlimited period, to be implemented using the methods deemed most appropriate and at a price to be determined on a case-by-case basis by the Board of Directors, which must not, however, be more than 20% below the share's reference price on the trading day prior to each individual sale (apart from in certain exceptional cases specified in the plan). Sale transactions may also be carried out for trading purposes. Also on 17 April 2012, the company’s Board of Directors voted to initiate the plan to buy and sell own shares authorised by the shareholders’ meeting, and to this end vested the Chairman of the Board of Directors and the Chief Executive Officer with all the necessary powers, to be exercised jointly or severally and with full powers of delegation.
  18. 18. Annual financial statements to 31 December 2012 18  Stock option and performance share plans On 17 April 2012, the shareholders’ meeting approved the DeA Capital Stock Option Plan 2012–2014. To implement the resolution of the shareholders' meeting, the Board of Directors of DeA Capital S.p.A., at its meeting held on the same day, allocated a total of 1,030,000 options to certain employees of the company and its subsidiaries and of the Parent Company, De Agostini S.p.A., who perform important roles for the company. In line with the criteria specified in the regulations governing the DeA Capital Stock Option Plan 2012–14, the Board of Directors also set the exercise price for the options allocated at EUR 1.3363, which is the arithmetic mean of the official prices of ordinary DeA Capital shares on the Mercato Telematico Azionario, the Italian screen-based trading system organised and managed by Borsa Italiana S.p.A., on the trading days between 17 March 2012 and 16 April 2012. The shareholders’ meeting also approved a paid capital increase, in divisible form, without option rights, via the issue of a maximum of 1,350,000 ordinary shares to service the DeA Capital Stock Option Plan 2012-2014. The shareholders’ meeting also approved the Performance Share Plan 2012–2014. To implement the resolution of the shareholders' meeting, the Board of Directors allocated a total of 302,500 units (representing the right to receive ordinary shares of the company, free of charge, under the terms and conditions of the plan) to certain employees of the company and its subsidiaries and of the Parent Company, De Agostini S.p.A., who perform important roles for the Company. Shares allocated due to the vesting of units will be drawn from own shares already held by the company. The terms and conditions of the DeA Capital Stock Option Plan 2012–2014 and the Performance Share Plan 2012-2014 are described in the Information Prospectus prepared in accordance with art. 84-bis of Consob Resolution 11971 of 14 May 1999 (Issuer Regulations), available to the public at the registered office of DeA Capital S.p.A. and on the company’s website www.deacapital.it in the section Corporate Governance/Incentive Plans.  Co-option of a new director On 4 May 2012, non-executive director Alberto Dessy resigned. Mr Dessy, who was lead independent director, was also Chairman of the Control and Risk Committee, a member of the Remuneration Committee and a member of the Supervisory Board of DeA Capital S.p.A. His decision was due to an increase in professional commitments incompatible with continuing to hold the various offices in DeA Capital S.p.A. On 14 May 2012, the Board of Directors co-opted Severino Salvemini as a non-executive, independent director to replace Alberto Dessy, pursuant to art. 11 of the articles of association and art. 2386 of the Italian Civil Code. After verifying that Severino Salvemini met the requirements of independence, the Board of Directors approved the appointment of Salvemini as Chairman of the Control and Risk Committee, lead independent director and a member of the Remuneration Committee and the Supervisory Board of DeA Capital S.p.A.
  19. 19. Annual financial statements to 31 December 2012 19  IDeA FIMIT – Acquisition of the Duemme SGR business division On 1 July 2012, the deed of transfer signed by IDeA FIMIT SGR and Duemme SGR for the business division comprising real estate mutual investment funds managed by Duemme SGR (a subsidiary of the Banca Esperia Group specialising in asset management services) became effective. With the transfer of the business division, IDeA FIMIT SGR has taken over the management of eight funds with a total value of around EUR 500 million. This transaction confirms IDeA FIMIT SGR’s position as Italian leader in the sector with 31 real estate funds managed, and puts it among the major real estate asset management companies in Europe, thanks also to the expansion of its circle of institutional investors.  IDeA FIMIT SGR – Award of the AMA tender On 8 October 2012, IDeA FIMIT SGR was awarded the tender organised by Azienda Municipale Ambiente S.p.A. (AMA), Rome, to manage some of its real estate assets. AMA, Rome’s leading operator in environmental services, identified IDeA FIMIT’s bid as the best solution for the creation and management of a real estate investment fund. The fund will manage assets comprising 56 buildings, all located in the Rome region and primarily designated for office use, with an estimated value of EUR 140-160 million. The new fund will have a maximum duration of ten years and will become operational in early 2013. The Group’s technical bid, which had a relative weight of 70% with the financial proposal accounting for the remainder, was crucial in its selection. This demonstrated the quality of IDeA FIMIT SGR’s bid from a management viewpoint.  Innovation Real Estate – Acquisition of a property and facility management business division of Ingenium Real Estate S.p.A. On 10 December 2012, the deed of transfer of a property, agency and facility management business division of Ingenium Real Estate S.p.A. (the Ingenium business division) to IRE became effective. The Ingenium business division provides services in the real estate sector, and specifically:  legal and administrative assistance for the sale and purchase of real estate (legal assistance)  management of communal services in apartment blocks, as well as insurance, tax and contractual matters relating to real estate (property and facility management)  planning and analysis of building works (project and construction management) These activities are predominantly but not exclusively carried out for the real estate funds managed by IDeA FIMIT SGR.
  20. 20. Annual financial statements to 31 December 2012 20  Capital strengthening of the corporate chain of command at GDS As part of a capital strengthening plan for the corporate chain of command at GDS, on 27 December 2012, DeA Capital Investments – a fully-owned company of DeA Capital S.p.A. and direct shareholder of 42.89% of Santé/SDE/GDS – acquired a tranche of mezzanine bonds for a nominal price of around EUR 25.8 million, issued by SDE. The sale and purchase – carried out with a related-party company of the De Agostini Group - was finalised with a vendor loan of the same amount with an expiry date of October 2017 and an interest rate equal to Euribor + 200 basis points. In practice, this means that it was broadly carried out under the same financial conditions as those currently applied to the credit lines granted to DeA Capital S.p.A.). Subsequently, the above-mentioned tranche of mezzanine bonds was converted, via a complex corporate transaction, into a quasi-equity loan granted to Santé, the sole shareholder of SDE, with a maximum expiry date of October 2018 and an interest rate equal to Euribor + 1,000 basis points (with the interest payable in kind up to the expiry date). As mentioned above, these transactions were intended to strengthen the capital of the corporate chain of command of GDS, especially of its equity investments Santé and SDE, as the new quasi-equity loan is subordinated to the other credit lines granted to the companies (although senior in the repayment plan to Santé’s equity loan). Note that in relation to the other credit lines granted to Santé and SDE, at 31 December 2012, all the financial parameters stipulated by the relevant agreements had been met, especially the “leverage ratio” of net debt/EBITDA. The Group will continue to continuously monitor the company’s economic and financial performance in 2013 with a view to preventing – or at least minimising – any difficulties in meeting the financial parameters in the loan agreements relating to the various companies that make up the corporate chain of command.
  21. 21. Annual financial statements to 31 December 2012 21 5. The DeA Capital Group’s results Consolidated results for the period relate to the operations of the DeA Capital Group in the following businesses:  Private Equity Investment, which includes the reporting units involved in private equity investment, broken down into equity investments (Direct Investments) and investments in funds (Indirect Investments)  Alternative Asset Management, which includes reporting units involved in asset management activities and related services, with a current focus on the management of private equity and real estate funds  PRIVATE EQUITY 2012 was a year dominated by uncertainty, and one in which political tensions had a harmful effect on the global economy. However, the picture gradually improved in the second half of the year, when financial tensions abated, leading to a reduction in the spread in the eurozone, and growth on the international equity markets. The IMF’s latest estimates forecast growth of 3.5% in the global economy. Specifically the advanced economies are expected to experience growth of 1.4% (2% for the US and -0.2% for the eurozone) and emerging economies growth of 5.5%. The central banks’ actions have considerably reduced the serious risks associated with the crisis in the eurozone, and in the US, where a solution to the country’s fiscal problems was found after President Obama’s re- election in November. Moreover, while economic activity picked up in some emerging countries, others continued to struggle due to weak external demand. The IMF think that there could, however, be a positive surprise, with a more sustained recovery than expected, if the risks connected with the crisis do not materialise and financial conditions continue to improve. However, the risk of a deterioration remains significant and is still associated with eurozone-related issues and the danger of excessive fiscal consolidation in the US. Against this macroeconomic backdrop, volatility on the international financial markets, after peaking in the middle of the year, continued to lessen. The default risk, measured by the five- year Credit Default Swaps (CDS), of the major eurozone countries also continued to fall. This is thanks to the positive effect of the various governments’ actions to tackle the crisis and strengthen the European Union, and the political and fiscal events in the US. All the major international equities markets recorded positive returns in local currency in 2012. Specifically, indices in the US were positive (+13.4% for the S&P 500 and +15.9% for the Nasdaq) as were those in Japan (+22.9% for the Nikkei 225) and Europe, where, along with Germany (+29.1% for the Dax 30) and France (+15.2% for the CAC 40), Italy also returned to positive territory (+7.8% for the FTSE MIB). Emerging countries also recorded positive returns: +5.2% in Russia, +25.7% in India, +7.4% in Brazil and +3.2% in China. In common with the equities markets, bond markets also showed a general improvement in terms of reduced risk aversion. In Italy, the yield spread on ten-year treasury certificates against their German bund counterparts reduced by nearly 200 points, closing at 316 basis points; to a lesser extent, the default risk also fell, returning to July 2011 levels and closing the year at 286 basis points.
  22. 22. Annual financial statements to 31 December 2012 22 Spain also seemed to have overcome its worst period, which culminated in July with the approval of a EUR 100 billion bailout programme to recapitalise its banks. The key events that will probably attract the attention of the markets in the short term relate to the management of the public debt problem in the US (the statutory obligation to keep US public debt below a specific ceiling), the impact of the political elections in Italy and Germany, and the expected decisions on the Outright Monetary Transactions (OMT) or the “anti-spread plan”, and unified banking supervision under the authority of the ECB. Investment prospects and the outlook for the European and global private equity markets Despite the continuing uncertainty surrounding the economy, the private equity business (PE) seems to be heading towards a return to normality. Unlike the turn of events in 2011, the second half of 2012 was much better than the first half, leading to positive expectations for the near future. The improvement was mainly due to the recovery in the private equity sector in the US, where encouraging signs shown by the real estate market, together with the healthy credit system and positive GDP growth, led to a more optimistic approach to dealing with the debt ceiling (although an agreed plan has not yet been finalised). Public attention on the sector in the US is still high in the wake of the recent election campaign. Furthermore, the legislative framework has been supplemented with a number of significant changes. In North America, management companies, which are required to register with the SEC, will be audited by the supervisory authorities in the next few years. In Europe, the enactment of the Alternative Investment Fund Managers Directive (AIFMD) will impose stringent compliance obligations. Another legislative restriction, Solvency II, will have repercussions on insurance companies in the future, as it imposes capital adequacy requirements that aim to increase protection against the higher risks of investing in private equity. The dynamics of the relationships between general partners (GPs) and limited partners (LPs) of funds were similar to those seen in 2011. The larger funds proposed innovative incentive schemes to investors to attract them in the first closing, including reduced fees and priority processing in certain cases. Other funds that are particularly sought-after by institutional investors, on the other hand, have imposed onerous terms and conditions on their subscribers. Lastly, the natural selection process operating among managers became more noticeable, as LPs tended to reduce the number of relationships with GPs. Driven by this trend, the larger listed operators (Blackstone, KKR, Apollo and from this year, Carlyle) further diversified their product range in accordance with the demands of their investors, adding funds dedicated to specific investment and geographical themes.
  23. 23. Annual financial statements to 31 December 2012 23 Investment activity declined slightly compared with 2011, although the half-yearly figure shows positive signs. In the second half of 2012, the figure was over 30% higher than in the same period of 2011. The main driver of the recovery in investment, as indicated previously, was activity in the US, which was supported in large part by a favourable credit market. The situation is different in Europe, however, as access to credit is still very difficult. The emerging markets remained at the same levels as in previous years. Fig. 3: Volume disinvestimenti dei fondi di buyout ($ mld) Fig. 4: Numero di disinvestimenti dei fondi di buyout Fonte: Preqin Fonte: Preqin 33 64 140 101 143 227 209 87 2012 83 85 118 20112008 20102009 19 310 132 275 173 172 146 384 268 457 582 656 9141 88 257 49 342 2008 684 52 2011 2012 207 2010 935 48 2009 549 102 1,145 43 347 1,192 Trade Sale Sale to GP IPO Restructuring 2° Semestre1° Semestre The volume of divestments of companies owned by buy-out funds fell slightly (by around 10% compared with 2011). However, encouraging signs began to appear in the second half of 2012, although they varied according to the individual geographical area. In numerical terms, “trade sale” transactions represent 55% of the total. This value is mainly based on the availability of cash of the strategic operators. Note also that the number of initial public offerings (IPOs) fell Fig. 1: Global value of buyout investments ($ mld) Fig. 2: Global value of buyout investments by region ($ mld) Source:Preqin 255265 221 96 187 2011201020092008 2012 148 29% 19% 52% 1S 2012 106 14% 2S 2011 124 34% 26% 52% 1S 2011 141 32% 51% 16% 2S 2010 136 12% 27% 57% 1S 2010 85 2S 2009 68 1S 2009 28 17% 2S 2012 39% 14% 52% 36% 46% 56% 28% 16% 62% 13% North AmericaEuropeAsia and rest of the world Source:Preqin
  24. 24. Annual financial statements to 31 December 2012 24 markedly due to the ongoing high level of volatility in the financial markets. A possible feature of 2013 could be an increase in exit transactions arising from sales to other private equity funds, given the need to sell off equity investments acquired before 2008 and the high level of dry powder in the market. However, the positive trend in fund raising, which emerged in 2011, continued in 2012 (+5% year-on-year and +15% compared with the second half of 2011). The biggest contribution to the growth of capital collections comes from some North American mega buy-out funds. Although Europe does not seem particularly attractive in the eyes of investors, fund raising was slightly positive. It could be that investors’ interest is motivated by the opportunity to obtain access to good transactions, given the limited level of liquidity in the system. We therefore assume that Europe is still an attractive geographical area from the point of view of private equity. In absolute terms, there has also been a slight decrease in the value of collections of funds focused on emerging markets. Fig. 7: Global capital calls and reimbursements of PE funds (USD billion) Source: Thomson Venture Economics Global PE fundraising ($ mld) Fig.6: Global PE fundraising by region ($ mld) 328312 284 315 2008 2009 2010 2011 2012 681 18% 14% 24% 26% 21% 100% NA EU ROW 2012 328 55% 24% 2011 312 53% 21% 2010 284 56% 21% 2009 315 57% 29% 2008 681 58% 24% Fig. 5: Source:Preqin Source:Preqin 12 33 64 46 69 49 45 30 19 46 54 67 58 35 22 7 2S 20111S 20112S 20101S 20101S 2009 2S 2009 1S 2012 3Q 2012 Distribuzioni (US$ Mld)Richiami (US$ Mld)
  25. 25. Annual financial statements to 31 December 2012 25 As shown in figure 7, in 2012 and to some extent in the previous year, global reimbursements exceeded capital calls, confirming that the industry is primarily going through a divestment phase. It is also possible to detect a number of investment themes associated with the current uncertain situation.  In Europe, the increase in fund raising is mainly due to the rise in the number of operators specialising in loan and distressed strategies. The relative disappearance of CLOs (collateralised loan obligations) and the restricted financial activity of credit institutions has opened the door to specialist operators, creating a channel which, given the limited competition, could generate attractive returns with coupon payments and a low risk profile. Moreover, the restructuring of many buy-out transactions could also reveal favourable returns for special situation funds  In the US, funds that aim to help investee companies return to efficiency and value creation through operating improvements are also becoming more numerous, as are funds focusing on specific sectors, especially energy  In emerging markets, opportunities mainly arise from the more mature trends, such as the growth in consumption associated with the increased purchasing power of the middle classes, and urbanisation Private equity in Italy Statistics prepared by AIFI (the Italian Private Equity and Venture Capital Association) and currently updated to the first half of 2012, show that the difficulties continued into the first half of the year, with a 17% decline in fund raising compared with the same period of 2011. The number of new investments fell from 159 to 147, with a total value of EUR 868 million, i.e. a decline of 43% on the same period of 2011. As regards the amount, the bulk of the resources invested, in line with previous years, went into buy-out transactions, which attracted EUR 512 million. This figure, however, is more or less half that recorded in the same period of the previous year (-56%), due to the lack of high-value transactions. The early-stage sector had the highest number of transactions, overtaking the expansion sector, with 55 investments (+10%), more than half of which were invested in high-tech companies. As regards divestments, 44 equity investments were sold in the first half of 2012, or 41% fewer than in the same period of 2011. The amount divested, calculated at historical acquisition cost, was EUR 141 million, compared with EUR 2,337 million in the first half of 2011 (-94%). This is due to the fact that very high individual sales were made in 2011, whereas no such sales were made in 2012.
  26. 26. Annual financial statements to 31 December 2012 26  REAL ESTATE IN EUROPE Direct investment in non-residential real estate in Europe, which amounted to EUR 120.4 billion in 2012, was in line with the previous year . A very positive sign emerged in the fourth quarter with transactions totalling EUR 41.5 billion (an increase of 16% compared with 4Q 2011 and 48% versus the previous quarter)1 . The office market experienced an excellent year in 2012, with a 24% increase in activity year- on-year; nearly 60% of transactions in the office sector were in London, Paris and the five main cities in Germany. This helped consolidate the positions of London and Paris among the ten main cities with the highest volumes of investment, with London stable at number one. Despite the continuous demand for excellent-quality real estate for shopping centres, as shown in the various large-scale agreements made in the fourth quarter, investment volumes in the retail sector fell for the whole year, compared with the previous year. Investment volumes in Europe’s retail real estate market (excluding high street property) totalled EUR 19.4 billion, down on the figure of EUR 31.3 billion in 2011, due to the scarcity of properties on the market. In 2012, net investment in Europe by investors outside the region increased by 36% compared with 2011. In Europe there were eight cross-border agreements with a value of over EUR 500 million in the fourth quarter of 2012. These volumes are evidence of investors’ interest in real estate opportunities, especially in the main markets such as the UK, Germany, France and Sweden. In fact, as is the case in the bond market, there is a clear preference for instruments deemed to be "safe", such as US and German government bonds, and in the real estate market products with a low risk profile are also favoured, while markets deemed to be less liquid are penalised. In core markets, i.e. those with a lower "country risk" profile and a correspondingly lower yield on government bonds (Germany, Great Britain and the Scandinavian countries), the spread between yields in the real estate market and yields on government bonds, historically considered a benchmark of the attractiveness of the real estate market, is reaching record levels. Conversely, in peripheral markets, such as Italy, the increase in yields on government bonds reduces this spread to zero or a negative figure. In Italy In 2012, the Italian market of investment in non-residential real estate totalled around EUR 1.7 billion, which was less than the level achieved in the first half of 2011. As a percentage of total investment in Europe, it fell from 3.6% to 1.4%. In the fourth quarter of 2012, only EUR 458 million was invested. These figures are the lowest recorded in Italy in the last ten years. Real estate transactions in Milan, which totalled only EUR 140 million in the fourth quarter, were no higher than EUR 500 million in 2012. In the fourth quarter, the take-up volume was around 52,000 m², bringing the annual total to 239,000 m². While the market declined by 12% in the quarter, year-on-year it fell by 29% compared with 2011. In Rome, investment was rather low, at EUR 150 million, bringing the annual total to EUR 622 million, a decline of 25% on 2011 and 50% lower than in 2010. In the fourth quarter, 19,800 m² of office space was taken up, bringing the annual total to only 66,500 m². The downward trend that started in the second half of 2011 continued in this quarter, leading to the recording of the lowest volume in Rome in the last seven years2 . 1 CBRE, European Investment Quarterly 4Q 2012 2 JLL, Global Capital Markets Research 4Q 2012
  27. 27. Annual financial statements to 31 December 2012 27 Real estate funds in Italy In 2012, according to Scenari Immobiliari estimates, assets managed by real estate funds rose by 1.5% over the previous year despite the gloomy economic environment. At the end of 2012, the 329 existing funds directly controlled real estate assets of around EUR 47.1 billion. AUM of the eight largest real estate asset managers (EUR billion) 0 1 2 3 4 5 6 7 8 9 10 IDeAFimit Generali Immobiliare BNPParibas REIM Prelios Investire Immobiliare Fabrica Immobiliare Sorgente Torre Source: Assogestioni – June 2012 Around 61% of investment is concentrated in the office sector, which had the most transactions in 2012 (44% of the total); 20% relates to the commercial sector and barely 3% to the residential and other sector. Analysis by Scenari Immobiliari on the retail and reserved funds industry shows that total net asset value (NAV) increased from EUR 36.1 billion to EUR 37.2 billion. NAV of real estate funds in Italy (EUR billion) 0 5 10 15 20 25 30 35 40 2006 2007 2008 2009 2010 2011 2012E Source: Scenari Immobiliari
  28. 28. Annual financial statements to 31 December 2012 28 With regard to retail property funds, the study by Scenari Immobiliari reported a decrease in direct real estate assets of around 8.9% to approximately EUR 6.8 billion. The total use of financial leverage, at 52%, fell slightly compared with 2011. The total NAV of retail property funds at end-2012 was around EUR 5.4 billion, representing a reduction of around 11% on the same period of 2011. Real estate assets of retail funds (EUR billion) 0 1 2 3 4 5 6 7 8 9 10 1H 2007 1H 2008 1H 2009 1H 2010 1H 2011 1H 2012 NAV of retail funds (EUR billion) 0 1 2 3 4 5 6 7 8 1H 2007 1H 2008 1H 2009 1H 2010 1H 2011 1H 2012 Source: Scenari Immobiliari The average discount to NAV for listed funds was around 59% at end-2012, compared with 46% at end-2011. The number of operating funds rose, although at a lower rate than expected, and a modest decrease is projected for 2013. Positive expectations for NAV growth in 2013 are associated with the projected creation of one or more funds for public buildings and possible contributions to the real estate funds of banks to continue the process of reducing financial leverage. Italian real estate funds saw substantial stability in property prices at the expense of a markedly greater reduction in the volume of transactions. The Italian real estate market is becoming increasingly illiquid, and operators believe that the upturn in investment will have to take place via a “repricing” of properties, which have seen a modest decline of around 10-12% since 2008 along with a similar reduction in rents. Property prices are expected to fall over the next few quarters, partly because many investors will be forced to liquidate their assets. According to Bank of Italy figures, 58 real estate funds, totalling EUR 5.2 billion, are currently in liquidation. Over 75% of retail property funds are due to expire in the next two years. In the first six months of 2012, real estate of just EUR 292 million was acquired, a significant decline of EUR 1,633 million on the previous year’s volume (according to Assogestioni data). Sales followed the same trend, falling from EUR 1,221 million in the first half of 2011 to EUR 609 million in the first six months of 2012.
  29. 29. Annual financial statements to 31 December 2012 29 Purchases and sales (EUR billion) 0,0 0,5 1,0 1,5 2,0 2,5 3,0 2009 2010 2011 giu-12 Acquisizioni Dismissioni Allocation of assets Immobili; 90,1% Partecipazioni; 2,0% Valori mobiliari; 5,7% Altro; 2,3% Source: Assogestioni. The latest figures provided by the Osservatorio sul Mercato Immobiliare (OMI) of the Italian Land Agency3 show a significant fall in the volumes of sales and purchases of real estate. In the first three quarters of 2012, sales and purchases fell by 18%, 25% and 26% respectively, compared with transactions in the first three quarters of 2011. The residential sector, which represents around 45% of the entire property market, recorded the worst performance in the third quarter of 2012, with around 96,000 transactions and a decline of 27% in property transactions compared with the same period of the previous year and 20% versus the previous quarter. Non-residential sectors also recorded significantly lower volumes in the first three quarters of 2013. The biggest falls were in the tertiary sector, which reported a decrease of 28% in the volume of sales and purchases in the third quarter, while the commercial and production sectors declined by 30% and 26% respectively. All sectors have been at the lowest level on the index of the number of normalised transactions (an index calculated by the Land Agency) since 2004. The office market, which is historically the most significant non-residential real estate market, reported an increase in investment compared with 2011, rising from 35% to 44% of total investment. Interest in office property picked up in the fourth quarter compared with previous quarters, with the result that the sector represented 87% of the volumes for the quarter. This was due to the sale by IDeA FIMIT SGR of two properties for office use in Milan and Rome with low returns, as they are ideally located and well positioned4 . In all sectors, the fall in prices led to a slight increase in yields. At the end of 2012, according to BNP Real Estate data, net prime returns were as follows: 5.6% in Milan and 6.1% in Rome for office property, 6.6% for shopping centres and 7.75% for the industrial and logistics sector. 3 Agenzia del Territorio, OMI – Note III Quarter 2012. 4 BNP RE, Investment in Italy Q4 2012
  30. 30. Annual financial statements to 31 December 2012 30  The DeA Capital Group’s investment portfolio The composition of the DeA Capital Group's investment portfolio in the Private Equity Investment and Alternative Asset Management businesses, as defined above, are summarised in the table below. Investment portfolio n. EUR/mln Equity investments 9 464.7 Funds 12 180.8 Private Equity Investment 21 645.5 Alternative Asset Management (*) 4 227.6 Investment portfolio 25 873.1 (*) Equity investments in subsidiaries relating to Alternative Asset Management are valued using the equity method in this table. December 31,2012 Details of portfolio asset movements in 2012 are provided in the sections on Private Equity Investment and Alternative Asset Management below.  Private Equity Investment In terms of equity investments, at 31 December 2012, the DeA Capital Group was a shareholder of:  Santé, indirect Parent Company of Générale de Santé (valued at EUR 226.1 million)  Kenan Investments, indirect Parent Company of Migros (valued at EUR 223.6 million)  Sigla Luxembourg, the Parent Company of Sigla (valued at EUR 12.3 million) The DeA Capital Group is also a shareholder in six companies (Elixir Pharmaceuticals Inc., Kovio Inc., Stepstone, Harvip Investimenti, Alkimis SGR and Soprarno SGR (the latter has been classified in this category since 31 December 2012) – whose total value at 31 December 2012 was EUR 2.7 million). With regard to funds, at 31 December 2012, the DeA Capital Group held units in:  IDeA I FoF (valued at EUR 103.1 million)  IDeA OF I (valued at EUR 48.1 million)  ICF II (valued at EUR 16.5 million)  AVA (valued at EUR 2.4 million)  IDeA EESS and seven other venture capital funds (with a total value of approximately EUR 10.7 million) Valuations of equity investments and funds in the portfolio reflect estimates made using the information available on the date this document was prepared.
  31. 31. Annual financial statements to 31 December 2012 31 Equity investments in associates - Santé (Parent Company of GDS) Headquarters: France Sector: Healthcare Website: www.generale-de-sante.fr Investment details: On 3 July 2007, DeA Capital S.p.A. finalised the purchase, through its wholly-owned subsidiary DeA Capital Investments S.A., of a 43.01% stake in Santé S.A., the Parent Company of Générale de Santé S.A. both directly and through Santé Dévéloppement Europe S.A.S. At 31 December 2012, the DeA Capital Group's stake was 42.89% (i.e. 42.99% in economic terms). Brief description: Founded in 1987 and listed on the Eurolist market in Paris since 2001, Générale de Santé is a leading player in the private healthcare sector in France with revenues of about EUR 2 billion at end-2012. France is the second largest country in Europe in terms of annual healthcare expenditure after Germany. Its healthcare system is one of the most advanced in the world, is still heavily fragmented and is marked by the presence of numerous independent hospitals. The company has approximately 19,400 employees and 106 clinics in total. In addition, it is the main independent association of doctors in France (over 5,000 doctors). Its activities include medicine, surgery, obstetrics, oncology and radiotherapy, mental health, subacute pathologies and rehabilitation. The company operates under the following names: Générale de Santé Cliniques (acute care), Médipsy (psychiatry), Dynamis (rehabilitation) and Généridis (radiotherapy). The investment in Santé, which is reported under “Investments in associates”, is valued at approximately EUR 226.1 million in the consolidated financial statements to 31 December 2012 (EUR 235.2 million at 31 December 2011). The change compared with the figure reported at 31 December 2011 is attributable to the net loss of EUR 10.8 million for the period combined with other increases in equity of EUR 1.7 million (largely due to the increase in fair value of interest rate swaps taken out to hedge the interest rate risk on debt exposure).
  32. 32. Annual financial statements to 31 December 2012 32 Générale de Santé (EUR million) 2012 2011 % Chg. Revenues 1,929 1,955 -1.4% EBITDA 240 249 -3.7% EBIT 134 50 167.0% Group net profit 56 (29) n.a. Net financial debt (769) (854) -10.0% With regard to GDS’s operating performance, revenues in 2012 were slightly down on the previous year, but up by 2.5% on a same-structure basis (stripping out the impact on the 2011 figures of the clinics sold during that year). This was achieved as the new clinics that were opened during the period (two rehabilitation clinics, two psychiatric clinics and one in medicine, surgery and obstetrics) gradually became fully operational and as a result of growth in the volume of activities. With specific reference to the final figures to 31 December 2012, a comparison of the EBIT and net result with the previous year’s figures shows that these were affected by one-off costs relating to the Plan Social completed in 2011 (with an effect on the net result of around EUR - 19 million), goodwill impairment (EUR –50.5 million) relating to some of the geographical areas in which the Group operates, and the capital gains made on the clinics that were sold in 2012 (EUR 29 million). The net financial position of EUR -769 million at 31 December 2012 represents an improvement on the figure of EUR -854 million at 31 December 2011 thanks partly to the receipts from the clinics that were sold. Note however that this growth in revenues occurred against a backdrop of mounting pressure to grow the top line, influenced by (i) trends in demand (a gradual shift in the mix of services offered towards outpatients provision, which has a lower unit cost/lower margins compared with full hospitalisation, and the postponement by patients of non-urgent treatment due to the economic crisis); and (ii) the regulatory framework and the definition of the provision of hospital services (increasing competitive pressure from public operators, which benefit from heavy government investment through discretionary components in the health budget, which offset the unfavourable trend in prices). As regards the institutional framework in 2013, while on the one hand, tariffs are likely to continue to be restrictive, with forecasts of a fall of 0.55% in tariffs in the medicine, surgery and obstetrics sector, on the other, government initiatives to support economic activity are likely to increase. An example is the package of measures to improve the competitiveness of French companies (which includes, inter alia, the competitiveness and employment tax credit, CICE), which should at least partly alleviate the effects on companies of the unfavourable economic climate. This trend in revenues, combined with the partial rigidity in the cost structure, makes it clear that, in order to maintain expected profit levels, it is essential that the planned reorganisation into “hubs” (chains of clinics that optimise provision of the service by tailoring it to the requirements of the relevant geographical area) takes full effect, and that the cost savings initiatives launched relating to significant items of expenditure also bear fruit.
  33. 33. Annual financial statements to 31 December 2012 33 - Sigla Luxembourg (Parent Company of Sigla) Headquarters: Italy Sector: Consumer credit Website: www.siglacredit.it Investment details: On 5 October 2007, DeA Capital Investments finalised the acquisition of a stake (currently 41.39%) in Sigla Luxembourg, the holding company that controls Sigla, which operates in Italy and provides consumer credit for non-specific purposes. Brief description: Sigla, which is recorded in the special list pursuant to art. 107 of the T.U.B. (Italian consolidated banking law) with effect from 31 March 2011, specialises in personal loans and "salary-backed loans". It is a benchmark operator in the provision of financial services to households, and operates throughout Italy, chiefly through a network of agents. The company’s product range of salary-backed loans and personal loans was expanded in 2010 to include the servicing of portfolios of unsecured non-performing loans (personal loans and credit cards). The investment in Sigla Luxembourg, which is reported under “Equity investments in associates”, is valued at approximately EUR 12.3 million in the consolidated financial statements to 31 December 2012 (EUR 22.0 million at 31 December 2011). The decrease compared with 31 December 2011 relates to the EUR 0.7 million loss for the period and an impairment charge of EUR 9.0 million to align the carrying value with the company’s pro-rata share of the net asset value at the same date. Sigla (EUR million) 2012 2011 % Chg. Loans to customers* 81.7 83.9 -2.6% Revenues from loans to customers 3.6 4.9 -26.1% CQS granted 78.2 136.2 -42.6% Revenues from CQS 3.6 7.3 -50.5% Group net profit (1.7) (0.1) n.a. * Net receivables exclude salary-backed loans (CQS) Sigla’s operating performance in 2012 declined at all levels of the income statement compared with the previous year, due mainly to the contraction in the number of salary-backed loans (CQS) granted (a typically less capital-intensive product, on which the Group has gradually repositioned itself). At 31 December 2012, it recorded a fall of 42.6% compared with the same period of the previous year. Although the Group considers that Sigla is in a good position as regards the restructuring of the salary-backed loans business being undertaken following the entry into force of the new legislation required by the Regulator (increased pricing transparency and a reduction in the number of intermediate levels in the existing value chain between the organisation that grants the loan and the consumer, with the resulting sector concentration), the general macroeconomic scenario has forced us to make the above-mentioned impairment on the goodwill implicit in the carrying value. Specifically, the ongoing effects of the economic crisis
  34. 34. Annual financial statements to 31 December 2012 34 on the propensity to spend, together with the consequences arising from the deleveraging requirements of banks that grant salary-backed loans, have led to much longer times for top- line growth than were originally reflected in the asset valuation.
  35. 35. Annual financial statements to 31 December 2012 35 Equity investments in other companies - Kenan Investments (indirect Parent Company of Migros) Headquarters: Turkey Sector: Food retail Website: www.migros.com.tr Investment details: In 2008, the DeA Capital Group acquired about 17% of the capital of Kenan Investments, the company heading the structure to acquire the controlling interest in Migros. Brief description: Migros was established in 1954, and is the leading company in the food retail sector in Turkey with a share of about 34% in the organised retail market. Growth in the food retail sector in Turkey is a relatively recent phenomenon, brought about by the transition from traditional systems such as bakkals (small stores typically run by families) to an increasingly widespread organised distribution model driven by expansion and the modernisation process under way in Turkey. The company has a total of 874 outlets (at 30 September 2012) with a total net sales area of approximately 850,000 square metres. Migros is present in all seven regions of Turkey, and has a marginal presence in Kazakhstan and Macedonia. The company operates under the following names: Migros, Tansas and Macrocenter (supermarkets), 5M (hypermarkets), Ramstore (supermarkets abroad) and Kangurum (online store). One of the main extraordinary transactions completed by Migros was the sale of discount arm Şok on 24 August 2011 to Yildiz Holding Group, a leading Turkish food producer, for around TRY 600 million. The business sold consisted of some 1,200 supermarkets, with revenues in 2010 of TRY 1.2 billion (or around 19% of Migros’ consolidated revenues). The equity investment in Kenan Investments is recorded in the consolidated financial statements to 31 December 2012 at EUR 223.6 million (compared with EUR 127.1 million at 31 December 2011). The increase of EUR 96.5 million was due to the rise in the value of Migros shares (TRY 21.5 per share at 31 December 2012, compared with approximately TRY 12.6 per share at 31 December 2011), and the strengthening of the Turkish lira against the euro (2.36 TRY/EUR at 31 December 2012 versus 2.44 TRY/EUR at 31 December 2011). The effect on the DeA Capital Group’s NAV of this change in fair value was partially offset by the provisioning of estimated carried interest of around EUR 12.8 million, to be paid to the lead investor, BC Partners, based on the total capital gain. This was partly recognised in the income statement (EUR 3.0 million) and partly recognised in the fair value reserve (EUR 9.8 million).
  36. 36. Annual financial statements to 31 December 2012 36 Migros (mln YTL) Primi Nove Mesi 2012 Primi Nove Mesi 2011 Var. % Ricavi 4.832 4.253 13,6% EBITDA 320 296 8,1% EBIT 187 175 6,9% Risultato Netto di Gruppo 117 (236) n.s. Indebitamento Netto (1.401) (1.593) 12% * In attesa della pubblicazione dei dati al 31 dicembre 2012 si riportano i dati al 30 settembre 2012 With regard to the macro-economic environment, the Turkish economy recorded GDP growth of around 2.6% year-on-year in the first nine months of 2012; the slowdown in economic growth (from a rate of 8.5% in 2011) helped the country to reduce the current account deficit, which contributed to the raising of its country rating to investment grade by Fitch last November for the first time. This in turn led to a stabilisation in the exchange rate. The food retail sector in Turkey remained buoyant in the first nine months of 2012, with sustained growth in commercial space (11.6% in 12 months) and in the supermarket sector (13.1% yoy), which maintained its dominant position. In terms of Migros’ operating performance, revenues grew by 13.6% in the first nine months of 2012 (the scope of activities for which does not include the discount division sold in August 2011), driven by the expansion of the network of sales outlets (143 new supermarkets were opened in 12 months), accompanied by more modest growth in EBITDA, and broadly stable profit. The net result increased, due to the revaluation of the debt component in Euro following the rise of the Turkish lira. Note that Migros has confirmed its intention, for the medium term, to maintain a sustained rate of expansion of its network, by opening between 100 and 150 new supermarkets a year, with a focus on areas of 150-350 square metres (with a particular emphasis on fresh products, a growing proportion of private label products and a much broader choice than offered by discount stores), as well as one to two hypermarkets each year. This growth strategy has led the company to issue guidance of double-digit revenue growth and an EBITDA margin within the range of 6-6.5% for 2012-2013.
  37. 37. Annual financial statements to 31 December 2012 37 - Other investments Other equity investments, managed opportunistically with a view to increasing their value, totalled approximately EUR 2.7 million in the consolidated financial statements to 31 December 2012, due mainly to investment in Alkimis SGR (EUR 0.3 million) and Soprarno SGR (EUR 1.6 million, as a result of its reclassification from the Alternative Asset Management business). Company Registered office Business sector % holding Alkimis SGR Italy Asset management company 10.00 Elixir Pharmaceuticals Inc. USA Biotech 1.30 Harvip Investimenti S.p.A. Italy Distressed real estate and other investments 25.00 Kovio Inc. USA Printed circuitry 0.42 Soprarno SGR Italy Asset management company 20.00 Stepstone Acquisition Sàrl Luxembourg Special Opportunities 36.72
  38. 38. Annual financial statements to 31 December 2012 38 Funds At 31 December 2012, the DeA Capital Group’s Private Equity Investment business included investments (other than the investment in the IDeA OF I fund and in the AVA real estate fund, which are classified under “Investments in associates”, based on the units held) in two funds of funds (IDeA I FoF and ICF II), one theme fund (IDeA EESS) and another seven venture capital funds for a total of approximately EUR 180.8 million (corresponding to the estimated fair value calculated using the information available on the date this document was prepared). Residual commitments associated with all the funds in the portfolio were approximately EUR 126.3 million (in their respective original currencies of denomination: EUR 122.6 million and GBP 3.0 million).
  39. 39. Annual financial statements to 31 December 2012 39 - IDeA OF I IDeA Opportunity Fund I Headquarters: Italy Sector: Private Equity Website: www.ideasgr.it Investment details: IDeA OF I is a closed-end fund under Italian law for qualified investors, which began activity on 9 May 2008 and is managed by IDeA Capital Funds SGR. At its meeting on 20 July 2011, the Board of Directors of IDeA Capital Funds SGR approved a number of regulatory changes. These included changing the name of the IDeA Co- Investment Fund I to IDeA Opportunity Fund I (IDeA OF I) and extending investment opportunities to qualified minority interests, independently or via syndicates. The DeA Capital Group has a total commitment of up to EUR 101.8 million in the fund. Brief description: IDeA OF I has total assets of approximately EUR 217 million. Its objective is to invest via syndicates with a lead investor, independently, or by purchasing qualified minority interests. At 31 December 2012, IDeA OF I had called up approximately 68.9% of the total commitment after making eight investments: - on 8 October 2008, it acquired a 5% stake in Giochi Preziosi S.p.A., a company active in the production, marketing and sale of children’s games with a product line covering childhood to early adolescence - on 22 December 2008, it acquired a 4% stake in Manutencoop Facility Management S.p.A. by subscribing to a reserved capital increase This company is Italy’s leading integrated facility management company, providing and managing a wide range of property management services and other services for individuals and government agencies - on 31 March 2009, it acquired a 17.43% stake in Grandi Navi Veloci S.p.A., an Italian shipping company that transports passengers and goods on various routes around the Mediterranean Sea. On 2 May 2011, with the finalisation of Marinvest's entry into the shareholder structure of Grandi Navi Veloci S.p.A. through the subscription of a reserved capital increase, the stake held by IDeA OF I was diluted to 9.21% On 2 August 2012, IDeA OF I’s decision not to subscribe, on a pro-rata basis, to a further capital increase led to a dilution in its equity investment to 3.68% - on 10 February 2011, it invested in a bond that is convertible into shares of Euticals S.p.A., the Italian leader in the production of active ingredients for pharmaceutical companies that operate in the generics sector, for EUR 10 million. As part of the extraordinary transaction that led to the transfer of the controlling share in Euticals S.p.A., on 3 April 2012 these bonds were transferred into the acquisition vehicle, Lauro 57, which now owns 100% of Euticals S.p.A.; in exchange, a stake of 7.77%
  40. 40. Annual financial statements to 31 December 2012 40 was acquired in the same acquisition vehicle (generating a capital gain of EUR 6.9 million) - on 25 February 2011, it purchased a 9.29% stake in Telit Communications PLC, the third-largest producer of machine-to-machine communications systems in the world; the stake held by OF I was subsequently diluted to 9.08% due to the exercise of stock options by the company's management - On 11 September 2012, an investment agreement was signed with Filocapital S.r.l., the main shareholder in Iacobucci HF Electronics S.p.A. (Iacobucci), a company that manufactures trolleys for aeroplanes and trains, and specialises in the design, production and marketing of components for aircraft fittings and furnishings. A maximum of EUR 12 million will be invested, in several phases: (i) subscription to a bond that is convertible into Iacobucci shares, totalling EUR 6 million on the closing date; (ii) subscription to a capital increase, in divisible form, totalling EUR 6 million, to be paid in two equal tranches – following approval of the half-year figures to 30 June 2013 and the financial statements to 31 December 2013 – based on the achievement of certain EBITDA and net debt figures. If the above-mentioned convertible bond were converted and the events for a capital increase materialised, IDeA OF I would acquire an overall stake of 34.9% in Iacobucci. - On 9 October 2012, IDeA OF I invested EUR 15 million to acquire an indirect stake of 4.6% in Patentes Talgo S.A. (Talgo), a Spanish company that designs and produces solutions for the rail sector, chiefly sold on the international market (high-speed trains, and maintenance vehicles and systems) - On 12 December 2012, IDeA OF I invested EUR 12.3 million to acquire a stake of 29.34% in 2IL Orthopaedics, a Luxembourg-registered vehicle which, through an initial purchase offer and subsequent delisting of previously listed shares, obtained full control (on 15 February 2013) of English company Corin Group PLC (Corin). Corin is active in the production and marketing of orthopaedic devices, especially for hips and knees. After the closing date for the period, on 11 January 2013, IDeA OF I invested EUR 8.5 million to acquire a stake of 10% in Elemaster S.p.A. (Elemaster), the leading operator in ODM (original design manufacturing) and EMS (electronic manufacturing service) i.e. the design and construction of electronic equipment. At the same time, the Energy Efficiency and Sustainable Development Fund, also managed by IDeA Capital Funds SGR, invested an equal amount in Elemaster to acquire a similar stake. The units held in IDeA OF I were reported at EUR 48.1 million in the consolidated financial statements to 31 December 2012. The change in value compared with the figure at 31 December 2011 is attributable to capital calls of EUR 17.0 million, an increase of EUR 0.5 million in the fair value and pro-rata net loss for the period of EUR 6.3 million (due mainly to the partial impairment of the investments in Giochi Preziosi and Grandi Navi Veloci and to the capital gain made on Euticals). The table below shows the key figures for IDeA OF I at 31 December 2012.
  41. 41. Annual financial statements to 31 December 2012 41 IDeA OF I Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) IDeA Opportunity Fund I Italy 2008 216,550,000 101,750,000 46.99 Residual Commitments Total residual commitment in: Euro 31,665,321
  42. 42. Annual financial statements to 31 December 2012 42 - IDeA I FoF IDeA I Fund of Funds Headquarters: Italy Sector: Private Equity Website: www.ideasgr.it Investment details: IDeA I FoF is a closed-end fund under Italian law for qualified investors, which began activity on 30 January 2007 and is managed by IDeA Capital Funds SGR. The DeA Capital Group has a total commitment of up to EUR 173.5 million in the fund. Brief description: IDeA I FoF, which has total assets of approximately EUR 681 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries. It optimises the risk-return profile through careful diversification of assets among managers with a proven track record of returns and solidity, different investment approaches, geographical areas and maturities. At the date of the latest report available, the IDeA ICF II portfolio was invested in 42 funds with different investment strategies; these funds in turn hold around 453 positions in companies with various degrees of maturity that are active in geographical regions with different growth rates. The funds are diversified in the buy-out (control) and expansion (minorities) categories, with overweighting towards medium- and small-scale transactions and special situations (distressed debt/equity and turnaround). At 31 December 2012, IDeA I FoF had called up 75.1% of its total commitment and had made distributions totalling approximately 23.5% of that commitment.
  43. 43. Annual financial statements to 31 December 2012 43 Other important information: Below is an analysis of the portfolio, updated to the date of the latest report available, broken down by year of investment, geographical area, type and sector. Notes: 1. % of the FMV of the investment at 31 December 2012 2. % of fund size based on paid-in exposure (capital invested + residual commitments) at 31 December 2012 The IDeA I FoF units are valued at approximately EUR 103.1 million in the consolidated financial statements to 31 December 2012, with a change compared with end-2011 that includes an increase in net investment of EUR 2.8 million and in fair value of EUR 4.1 million. The table below shows the key figures for IDeA I FoF at 31 December 2012. IDeA I FoF Sede legale Anno di impegno Fund Size Impegno sottoscritto % DeA Capital nel Fondo Euro (€) IDeA I Fund of Funds Italy 2007 681,050,000 173,500,000 25.48 Residual Commitments Total residual commitment in: Euro 43,236,192 Breakdown by industry (1)Breakdown by type of fund (2) Breakdown by vintage (1) Breakdown by geography (2) 21% Not committed 0%Global RoW 14% US 21% Europe45% 9% 6% Not invested 0% Large Buyout 15% Special Situations 19% Expansion VC 5% Asset Based PE Small Buyout 14% Mid Buyout 31% 5% 12% 5% 14% Distressed Assets 8% Raw Materials Energy 12% Financial 5% Pharmaceutical1% Healthcare6% Consumer staples 7% Consumer discretionary 12% Transport Industrial 8% RE 2% Luxury IT Media 3% 24% 2006 6% 2005 3% 2000-2004 3% 2012 6% 2011 12% 2010 2009 15% 2008 16% 2007 14%
  44. 44. Annual financial statements to 31 December 2012 44 - ICF II ICF II Headquarters: Italy Sector: Private Equity Website: www.ideasgr.it Investment details: ICF II is a closed-end fund for qualified investors under Italian law, which began activity on 24 February 2009 and is managed by IDeA Capital Funds SGR. The DeA Capital Group has a total commitment of up to EUR 51 million in the fund. Brief description: ICF II, which has total assets of EUR 281 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries. It optimises the risk-return profile through careful diversification of assets among managers with proven historical returns and solidity, different investment approaches, geographical areas and maturities. The fund started building its portfolio by focusing on funds in the area of mid-market buy-outs, distressed and special situations, loans, turnarounds and funds with a specific sector slant, targeting in particular opportunities offered in the secondary market. At the date of the latest report available, the ICF II portfolio was invested in 26 funds with different investment strategies; these funds in turn hold positions in around 186 companies with various degrees of maturity that are active in geographical areas with different growth rates. At 31 December 2012, ICF II had called up 33.9% of its total commitment and had made reimbursements totalling approximately 2.6% of that commitment. Other important information: Below is an analysis of the portfolio, updated to the date of the latest report available, broken down by year of investment, geographical area, type and sector.
  45. 45. Annual financial statements to 31 December 2012 45 Notes: 1. % of the FMV of the investment at 31 December 2012 2. % of the commitment. Based on paid-in exposure (capital invested + residual commitments) at 31 December 2012 The ICF II units are valued at approximately EUR 16.5 million in the consolidated financial statements to 31 December 2012, with a change compared with end-2011 that includes an increase in net investment of EUR 7.9 million and a decrease in fair value of EUR 0.6 million. The table below shows the key figures for ICF II at 31 December 2012. ICF II Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) ICF II Italy 2009 281,000,000 51,000,000 18.15 Residual Commitments Total residual commitment in: Euro 33,676,968 Breakdown by sector (1)Breakdown by type of fund (2) Breakdown by geography (2) 16% Global RoW 28% US 27% Europe 29% 16% Special Situations 25% Expansion VC 6% Small/Mid Buyout 36% Large Buyout 16% 31% 2012 2011 24% 2010 22% 2009 20% 2008 1% 2007 2% 2004-2006 0% 5% 8% Distressed Portfolio 18% Energy 7% Raw Materials 3% Industrial 11% Luxury IT 16% Media 2% Financial Healthcare3% Consumer staples 9% Cons. Discretionary 16% Other 0% Breakdown by vintage (1)
  46. 46. Annual financial statements to 31 December 2012 46 - IDeA EESS IDeA Energy Efficiency and Sustainable Development Headquarters: Italy Sector: Private Equity Website: www.ideasgr.it Investment details: IDeA EESS is a closed-end fund under Italian law for qualified investors, which began operating on 1 August 2011 and is managed by IDeA Capital Funds SGR. The DeA Capital Group has a total commitment of up to EUR 12.8 million in the fund. Brief description: IDeA EESS is a closed-end mutual fund under Italian law for qualified investors, which seeks to acquire minority and controlling interests in unlisted companies in Italy and abroad (particularly Germany, Switzerland and Israel), by investing jointly with local partners. The fund is dedicated to investing in small and medium-sized manufacturing and service companies operating in the field of energy savings and the efficient use of natural resources. It focuses on the development of faster and cheaper solutions in the use of renewable energy sources while continuing to reduce CO2 emissions effectively, against a backdrop of sustained growth in global energy demand. On 4 September 2012, the fund undertook a third closing, which brought the total commitment to EUR 59.5 million. On 8 May 2012, the fund made its first investment, acquiring 48% of Domotecnica Italiana S.r.l. (independent Italian franchising of thermo-hydraulic installers) for approximately EUR 2.6 million, as well as a commitment to subscribe, within the next 18 months, to capital increases totalling approximately EUR 1.0 million (IDeA EESS pro-rata share, of which EUR 0.3 thousand was paid on 7 December 2012). At 31 December 2012, IDeA EESS had called up about 7% of the total commitment. After the closing date for the period, on 11 January 2013, IDeA EESS invested EUR 8.5 million to acquire a stake of 10% in Elemaster S.p.A. (Elemaster), the leading operator in ODM (original design manufacturing) and EMS (electronic manufacturing service) i.e. the design and construction of electronic equipment. At the same time, the IDeA Opportunity Fund I, also managed by IDeA Capital Funds SGR, invested an equal amount in Elemaster to acquire a similar stake. The IDeA EESS units are valued at approximately EUR 0.6 million in the consolidated financial statements to 31 December 2012, with a change compared with end-2011 that includes an increase in net investment of EUR 0.9 million and a decrease in fair value of EUR 0.3 million.
  47. 47. Annual financial statements to 31 December 2012 47 The table below shows the key figures for IDeA EESS at 31 December 2012. IDeA EESS Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) IDeA Efficienza Energetica e Sviluppo Sostenibile Italy 2011 59,450,000 12,800,000 21.53
  48. 48. Annual financial statements to 31 December 2012 48 - AVA Atlantic Value Added Headquarters: Italy Sector: Private Equity – Real Estate Website: www.ideafimit.it Investment details: The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" is a mixed- contribution fund for qualified investors that began operations on 23 December 2011. DeA Capital Investments subscribed to a total commitment in the fund of up to EUR 5 million (acquiring five class A units, corresponding to 9.1% of the total commitment), with payments of EUR 2.6 million already made at 31 December 2012. Brief description: The Atlantic Value Added fund began its operations with a primary focus on real estate investments in the office and residential markets. The duration of the fund is eight years. The fund, which is managed by the subsidiary IDeA FIMIT SGR, has a commitment of around EUR 55 million. On 29 December 2011, the fund made its first investment totalling EUR 41.5 million through the purchase/subscription of units in the Venere Fund, a closed-end speculative reserved real estate fund managed by IDeA FIMIT SGR. The Venere Fund's real estate portfolio consists of 16 properties primarily for residential purposes located in northern Italy. The units in AVA are valued at around EUR 2.4 million in the consolidated financial statements to 31 December 2012, with a change in the period that includes the pro-rata portion of the net loss for the period (EUR 0.2 million) and contributions paid in the form of capital calls (0.1 million). The table below shows the key figures for the AVA fund at 31 December 2012: AVA Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Euro (€) Atlantic Value Added Italy 2011 55,000,000 5,000,000 9.08 Residual Commitments Total residual commitment in: Euro 2,370,000
  49. 49. Annual financial statements to 31 December 2012 49 - Units in venture capital funds Units in venture capital funds are all concentrated in the Parent Company DeA Capital S.p.A., and are valued at approximately EUR 10.1 million in the financial statements to 31 December 2012 (EUR 12.2 million at end-2011). The table below shows the key figures for venture capital funds in the portfolio at 31 December 2012. Venture Capital Funds Registered office Year of commit ment Fund Size Subscribed commitment % DeA Capital in fund Dollars (USD) Doughty Hanson & Co Technology UK EU 2004 271,534,000 1,925,000 0.71 GIZA GE Venture Fund III Delaware U.S.A. 2003 211,680,000 10,000,000 4.72 Israel Seed IV Cayman Islands 2003 200,000,000 5,000,000 2.50 Pitango Venture Capital II Delaware U.S.A. 2003 125,000,000 5,000,000 4.00 Pitango Venture Capital III Delaware U.S.A. 2003 417,172,000 5,000,000 1.20 Totale Dollari 26,925,000 Euro (€) Nexit Infocom 2000 Guernsey 2000 66,325,790 3,819,167 5.76 Sterlings (GBP) Amadeus Capital II UK EU 2000 235,000,000 13,500,000 5.74 Residual Commitments Total residual commitment in: Euro 3,731,000
  50. 50. Annual financial statements to 31 December 2012 50  Alternative Asset Management At 31 December 2012, DeA Capital S.p.A. was the owner of:  100% of IDeA Capital Funds SGR  61.30% of IDeA FIMIT SGR (including 40.32% held through DeA Capital Real Estate, and 20.98% through IFIM)  100% of IRE/IRE Advisory (which operates in project, property and facility management and real estate brokerage) - IDeA Capital Funds SGR Headquarters: Italy Sector: Alternative Asset Management - Private Equity Website: www.ideasgr.it Investment details: IDeA Capital Funds SGR is one of the leading independent Italian asset management companies operating in the management of direct funds, and funds of private equity funds. The asset management company manages four closed-end private equity funds, including two funds of funds (IDeA I FoF and ICF II), a "direct" co-investment fund (IDeA OF I) and a sector fund dedicated to energy efficiency (IDeA EESS). The investment programmes of IDeA Capital Funds SGR, which are regulated by the Bank of Italy and Consob, leverage the management team's wealth of experience in the sector. The investment strategies of funds of funds focus on building a diversified portfolio in private equity funds in the top quartile or that are next-generation leaders with balanced asset allocation through diversification by:  Industrial sector  Investment strategy and stages (buy-outs, venture capital, special situations, etc.)  Geographical area (Europe, US and the Rest of the World)  Year (commitments with diluted investment periods over time) The investment strategies of the "direct" co-investment fund focus on minority interests in medium to large-sized LBOs together with leading qualified investors with businesses that primarily focus on Europe, and diversification as a function of the appeal of individual sectors by limiting investments during the early stage and excluding purely real estate investments. The investment philosophy of the EESS sector fund is focused on growth capital and buyout private equity to support the growth of small and medium-sized enterprises with excellent products or services in the energy efficiency and sustainable growth arena. Investments in infrastructure for the generation of energy from renewable sources or early stage investments can be made in compliance with regulatory restrictions. The main geographical focus of these funds is Italy.
  51. 51. Annual financial statements to 31 December 2012 51 The table below summarises the value of assets under management and management fees for IDeA Capital Funds SGR at 31 December 2012. (EUR million) Asset Under Management at 31.12.2012 Management fees at 31.12.2012 Breakdown of funds ICF II 281 2.8 IDeA EESS 59 1.2 IDeA I FoF 681 7.1 IDeA OF I 217 2.3 Totalt- IDeA Capital Funds SGR 1,238 13.5 With regard to its operating performance, note that the company recorded revenue growth in 2012, despite unchanged assets under management, primarily due to one-off items of income. In terms of profitability, the performance recorded in 2012 was due to the effects of strengthening the operating structure to support fund raising activities and asset management in fund portfolios. IDeA Capital Funds SGR (mln €) 2012 2011 AUM 1.238 1.232 Commissioni attive 13,5 12,8 EBT 6,9 7,6 Risultato Netto 4,5 4,9
  52. 52. Annual financial statements to 31 December 2012 52 - IDeA FIMIT SGR Headquarters: Italy Sector: Alternative Asset Management - Real Estate Website: www.firstatlantic.it Investment details: IDeA FIMIT SGR is the biggest independent real estate asset management company in Italy, with around EUR 9.4 billion in assets under management and 31 managed funds (including five listed funds). This puts it among the major partners of Italian and international investors in promoting, creating and managing closed-end mutual real estate investment funds. IDeA FIMIT SGR has three main lines of business:  the development of mutual real estate investment funds designed for institutional clients and private investors  the promotion of innovative real estate financial instruments to satisfy investors’ increasing demands  the professional management (technical, administrative and financial) of real estate funds with the assistance of in-house experts as well as the best independent technical, legal and tax advisors on the market The company has concentrated its investments in transactions with low risk, stable returns, low volatility, simple financial structures and, most importantly, an emphasis on real estate value. In particular, the asset management company specialises in "core" and "core plus" properties, but its major investments also include important "value added" transactions. Due in part to successful transactions concluded in recent years, the asset management company is able to rely on a panel of prominent unitholders consisting of Italian and international investors with a high standing such as pension funds, bank and insurance groups, capital companies and sovereign funds. On 1 July 2012, the deed of transfer signed by IDeA FIMIT SGR and Duemme SGR for the business division comprising mutual real estate investment funds managed by Duemme SGR (a subsidiary of the Banca Esperia Group specialising in asset management services) became effective. The transfer of the business division has enabled IDeA FIMIT SGR to take on the management of eight real estate funds with assets that include around 60 buildings, worth a total of approximately EUR 500 million.
  53. 53. Annual financial statements to 31 December 2012 53 The table below summarises the value of assets under management and management fees for IDeA FIMIT SGR at 31 December 2012. (EUR million) Asset Under Management at 31.12.2012 Management fees at 31.12.2012 Breakdown of funds Atlantic 1 657 5.7 Atlantic 2 Berenice 469 2.4 Alpha 457 4.3 Beta 210 2.5 Delta 344 2.7 Listed funds 2,137 17.6 Reserved funds 7,273 47.8 Total - IDeA FIMIT SGR 9,410 65.4 Some of the key financials of the listed funds (Atlantic 1, Atlantic 2, Alpha, Beta and Delta – figures in EUR) in the asset management portfolio are also provided below, with an analysis of the real estate portfolio at the date of the latest report available, broken down by geographical area and by intended use. Atlantic 1 12/31/2012 Market value of property 631,770,000 Historical cost and capitalised charges 618,000,162 Loan 355,596,609 Net Asset Value ("NAV") 281,350,818 NAV/unit (EUR) 539.482 Market price/unit (EUR) 174.41 Dividend yield of placement* 4.55% * Ratio between income per unit and average annual nominal value per unit Atlantic 1: Diversification by geographical area Atlantic 1: Diversification by intended use Lombardia 68% Lazio 15% Campania 12% Piemonte / Emilia R. 5% Offices 84% Commercial 16%
  54. 54. Annual financial statements to 31 December 2012 54 Atlantic 2 - Berenice 12/31/2012 Market value of property 396,650,000 Historical cost and capitalised charges 405,042,456 Loan 231,111,952 Net Asset Value ("NAV") 225,892,506 NAV/unit (EUR) 376.5 Market price/unit (EUR) 162.4 Dividend yield of placement* 11.14% * Ratio between income per unit and average annual nominal value per unit Atlantic 2: Diversification by geographical area Atlantic 2: Diversification by intended use Alpha 12/31/2012 Market value of property 407,040,000 Historical cost and capitalised charges 323,428,239 Loan 63,142,155 Net Asset Value ("NAV") 384,442,764 NAV/unit (EUR) 3,701.0 Market price/unit (EUR) 1,058.0 Dividend yield of placement* 6.38% * Ratio between income per unit and average annual nominal value per unit Alpha: Diversification by geographical area Alpha: Diversification by intended use Lombardia 52% Lazio 27% Piemonte 17% Altri 4% Offices 68% Other 32% Lazio 83% Lombardia 12% Emilia Romagna 5% Offices 60%Other 40%
  55. 55. Annual financial statements to 31 December 2012 55 Beta 12/31/2012 Market value of property 164,722,200 Historical cost and capitalised charges 163,666,042 Loan 31,723,014 Net Asset Value ("NAV") 149,203,714 NAV/unit (EUR) 555.7 Market price/unit (EUR) 315.3 Dividend yield of placement* 9.52% * Ratio between income per unit and average annual nominal value per unit Beta: Diversification by geographical area Beta: Diversification by intended use Delta 12/31/2012 Market value of property 325,046,667 Historical cost and capitalised charges 375,092,958 Loan 137,332,436 Net Asset Value ("NAV") 204,089,909 NAV/unit (EUR) 96.940 Market price/unit (EUR) 30.5 Dividend yield of placement* n.a. * No distributions arising from the investment Delta: Diversification by geographical area Delta: Diversification by intended use Sardegna 39% Lazio 35% Umbria 26% Offices 41% Hotels 39% Specific Use 19% Commercial 1% Hotels 62% Other 34% Offices 4% Sardegna 39% Veneto 17% Calabria 10% Abruzzo 8% Emilia Romagna 11% Lombardia 5% Campania 4% Piemonte 3% Toscana 3%
  56. 56. Annual financial statements to 31 December 2012 56 In 2012, over and above the activities to fully integrate the entities merged in 2011 (FARE SGR and FIMIT SGR), the operating performance of IDeA FIMIT SGR was based on a continuous search for opportunities to grow the assets managed; this broadly took the form of transactions to acquire the Duemme SGR business division and the award of the AMA tender (see the “Significant events during the year” section). The comparison between the income statement for 2012 and 2011 (see the table below) is of limited significance, in view of the changes in business structure that took place on 3 October 2011 (integration of FARE SGR and FIMIT SGR, with the creation of IDeA FIMIT SGR). IDeA FIMIT SGR (EUR million) 2012 2011 AUM 9,410 9,476 Management fees 65.4 30.8 EBT 21.1 11.4 EBT - before PPA 32.7 14.3 Net profit 19.4 7.1

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