Consolidated revenues for 2008 came in at € 4,728.7 million, up from € 4,214.9 million in 2007, with a rise of € 513.8 million (+12.2%).
Consolidated revenues can be broken down by business sector as follows:
| (in millions of euro) | Change | |||||
| 2008 | % | 2007 | % | absolute | % | |
| Utilities | ||||||
| Sorgenia Group | 2,433.7 | 51.5 | 1,861.7 | 44.2 | 572.0 | 30.7 |
| Media | ||||||
| Espresso Group | 1,025.5 | 21.7 | 1,098.2 | 26.1 | (72.7) | (6.6) |
| Automotive components | ||||||
| Sogefi Group | 1,017.5 | 21.5 | 1,071.8 | 25.4 | (54.3) | (5.1) |
| Healthcare | ||||||
| HSS Group | 246.3 | 5.2 | 182.9 | 4.3 | 63.4 | 34.7 |
| Other sectors | 5.7 | 0.1 | 0.3 | - | 5.4 | - |
| Total consolidated revenues | 4,728.7 | 100.0 | 4,214.9 | 100.0 | 513.8 | 12.2 |
| of which: ITALY | 3,786.3 | 80.1 | 3,248.9 | 77.1 | 537.4 | 16.5 |
| FOREIGN COUNTRIES | 942.4 | 19.9 | 966.0 | 22.9 | (23.6) | (2.4) |
The key figures of the consolidated income statement are as follows:
| (in millions of euro) | 2008 | % | 2007 | % |
| Revenues | 4,728.7 | 100.0 | 4,214.9 | 100.0 |
| Consolidated gross operating margin (EBITDA) (1) | 461.5 | 9.7 | 504.8 | 12.0 |
| Consolidated operating income (EBIT) | 320.1 | 6.7 | 382.7 | 9.1 |
| Financial management result (2) | (44.2) | (0.9) | (81.2) | (1.9) |
| Income taxes | (98.8) | (2.1) | (100.6) | (2.4) |
| Net income (loss) on assets held for disposal | - | - | 0.1 | - |
| Net income including minority interests | 177.1 | 3.7 | 201.0 | 4.8 |
| Net income attributable to minority interests | (81.6) | (1.7) | (118.4) | (2.8) |
| Net income of the Group | 95.5 | 2.0 | 82.6 | 2.0 |
1) This balance is the sum of the items "earnings before interest and taxes (EBIT)" and "amortization, depreciation and write-downs" in the consolidated income statement
2) This balance is the sum of the items "financial income", "financial expense", "dividends", "gains from trading securities", " losses from trading securities" and "adjustments to the value of financial assets" in the consolidated income statement
The consolidated gross operating margin (EBITDA) was € 461.5 million (9.7% of revenues) in 2008 down from € 504.8 million in 2007 (12% of revenues), with a decline of € 43.3 million (-8.6%). This result was determined by the following factors:
- The sizeable fall in the profitability of the Espresso and Sogefi groups, which was due to lower revenues and to the restructuring costs incurred.
- The rise in the profitability of the Sorgenia and HSS groups.
The consolidated operating margin (EBIT) for 2008 was € 320.1 million (6.7% of revenues) down from € 382.7 million (9.1% of revenues) in 2007, with a decline of € 62.6 million. The bigger decline compared to the change in EBITDA was due to higher amortization mainly in the Sorgenia group. The financial management result was a negative € 44.2 million compared to net expense of € 81.2 million in 2007. The improvement of € 37 million was the result of a change in non-recurring in-come of € 84.4 million due mainly to capital increases reserved for minority shareholders and to the rise of € 41 million in financial expense.
The key figures of the consolidated balance sheet of the CIR Group at December 31 2008, compared with the same figures at December 31 2007, are as follows:
| (in millions of euro) (1) | 31.12.2008 | 31.12.2007 |
| Fixed assets | 3,365.7 | 3,035.2 |
| Other net non-current assets and liabilities | 57.1 | 106.5 |
| Net working capital | 341.5 | 233.6 |
| Net invested capital | 3,764.3 | 3,375.3 |
| Net financial debt | (1,685.4) | (1,333.5) |
| Total shareholders’ equity | 2,078.9 | 2,041.8 |
| Group equity | 1,264.9 | 1,319.9 |
| Minority Shareholders’ equity | 814.00.00 | 721.09.00 |
(1) These figures are the result of a different organization of the balance sheet items. For a definition of the same reference should be made to the notes referring to the chart "consolidated balance sheet by business sector" shown earlier .
Net invested capital stood at € 3,764.3 million at December 31 2008 compared to € 3,375.3 million at December 31 2007, with a rise of € 389.0 million, due essentially to a rise in the working capital and fixed asset investments of the Sorgenia group.
The consolidated net financial position at December 31 2008 showed net debt of € 1,685.4 million (up by € 351.9 million from € 1,333.5 million at December 31 2007), caused by:
- a financial surplus for CIR and its financial holding subsidiaries of € 44.2 million which compares with € 112.3 million at December 31 2007. The contraction of € 68.1 million that took place during the year was mainly due to disbursements made for investment in companies of the Group and own shares for € 65.8 million and to the negative fair value adjustment of bonds for € 43 million and of Medinvest for € 53 million, partly offset by the positive balance of € 101.3 million between dividends received and those paid out;
- total net debt for the operating groups of € 1,729.6 million, up from € 1,445.8 million at December 31 2007. The rise of € 283.8 million was mainly due to the higher debt of the Sogefi group after the dividend payout and of the Sorgenia group as a result of investment made.
The net financial position includes CIR's part of the investment in Medinvest, which at December 31 2008 amounted to € 166.4 million. The accounting treatment of this investment involves recognizing changes in the fair value of the funds directly to shareholders' equity. The fair value re-serve relating to Medinvest amounted to € 36.8 million at December 31 2008 (€ 133.4 million at December 31 2007). In financial year 2008 the sale of shares in hedge funds by Medinvest led to realized gains, net of write-downs, of € 50.3 million (€ 19.6 million in 2007). In February 2009 a further € 35 million were redeemed bringing the remaining investment in Medinvest to around € 130 million. The performance of Medinvest since inception (April 1994) up to and including 2008 gave a weighted average return of the portfolio in dollar terms of 7.7%. In 2008 performance was a negative 18.3%. In January 2009 performance turned positive again with a return of 0.7%.
Total shareholders' equity stood at € 2,078.9 million at December 31 2008, up from € 2,041.8 million at December 31 2007, with a rise of € 37.1 million after the distribution of € 37.4 million in dividends by CIR and of a total of € 118.4 million by the subsidiaries to their minority shareholders.
The shareholders' equity of the Group went from € 1,319.9 million at December 31 2007 to € 1,264.9 million at December 31 2008, with a net decrease of € 55 million mainly due to the negative change in the "Fair value reserve" which had a positive balance of € 38 million at December 31 2008.
Minority shareholders' equity rose from € 721.9 million at December 31 2007 to € 814 million at December 31 2008, with a rise of € 92.1 million mainly resulting from the capital increases, net of dividends and net income for the period.
The evolution of consolidated shareholders' equity is given in the Notes to the Consolidated Financial Statements.
The consolidated cash flow statement for 2008, prepared according to a "managerial" format which, unlike the format used in the statements attached, shows the changes in net financial position instead of the changes in cash and cash equivalents, can be broken down as follows:
| (in millions of euro) | 2008 | 2007 |
| SOURCES OF FUNDS Net income for the period including minority interests |
177.1 | 201.0 |
| Amortization, depreciation and write-downs and other non-monetary changes | 36.4 | 156.4 |
| Self-financing | 213.5 | 357.4 |
| Change in working capital | (127.0) | 183.5 |
| CASH FLOW GENERATED BY CURRENT OPERATIONS | 86.5 | 540.9 |
| Capital increases | 274.0 | 46.8 |
| Repayment of loan by Tirreno Power | 42.5 | 127.4 |
| TOTAL SOURCES OF FUNDS | 403.0 | 715.1 |
| APPLICATIONS | ||
| Net investment in fixed assets | (526.2) | (1,005.1) |
| Buy-back of own shares | (16.8) | (73.9) |
| Payment of dividends | (155.8) | (93.9) |
| Other changes | (56.1) | (25.1) |
| TOTAL APPLICATIONS OF FUNDS | (754.9) | (1,198.0) |
| FINANCIAL SURPLUS (DEFICIT) | (351.9) | (482.9) |
| NET FINANCIAL POSITION AT THE BEGINNING OF THE PERIOD | (1,333.5) | (850.6) |
| NET FINANCIAL POSITION AT THE END OF THE PERIOD | (1,685.4) | (1,333.5) |
The composition of the net financial position is given in the Notes to the Financial Statements.
During 2008 the net debt figure rose from € 1,333.5 million to € 1,685.4 million. The cash flow generated by operations showed a significant contraction compared to the previous year due mainly to the rise in working capital of the Sorgenia group. Among the sources of funds the capital increases of Sorgenia and HSS are particularly worthy of note. Applications mainly referred to investment in fixed assets mainly in the utilities sector. The payment of dividends was larger than in the previous period because of the extraordinary dividend paid out by Sogefi in 2008.
At December 31 2008 the CIR Group had 12,969 employees, up from 12,422 at December 31 2007.