Half-Year Financial Report at June 30, 2015
Gruppo Toscana Aeroporti
INTERIM FINANCIAL REPORT AT 30 JUNE 2015
This report is available in the Investor Relations section of Toscana Aeroporti’s website at www.toscana- aeroporti.com
Toscana Aeroporti S.p.a. Via del Termine, 11 – 50127 Firenze - www.toscana-aeroporti.com R.E.A. FI-637708 - Fully paid-up Share Capital € 30,709,743.90 VAT Number and Tax Code: 00403110505
1 CONTENTS
1. COMPOSITION OF THE PARENT COMPANY’S SHARE CAPITAL ...... 5
2. THE PARENT COMPANY’S SHAREHOLDERS ...... 5
3. MERGER BY INCORPORATION OF AEROPORTO DI FIRENZE S.P.A...... 7
4. PRO-FORMA FINANCIAL STATEMENT OF THE SURVIVING ENTITY AT 31 DECEMBER 2014 AND AT 30 JUNE 2014 ...... 7
5. STOCK PERFORMANCE ...... 11
6. MACROSTRUCTURE OF THE TOSCANA AEROPORTI GROUP...... 12
7. COMPOSITION OF CORPORATE GOVERNING BODIES ...... 13
8. HIGHLIGHTS ...... 14
9. TRENDS IN THE TUSCAN AIRPORT SYSTEM’S TRAFFIC ...... 16
9.1. Traffic trends in the Pisa “Galileo Galilei” airport ...... 19 9.2 Traffic trends in the Florence “Amerigo Vespucci” airport ...... 24
10. SIGNIFICANT EVENTS THAT TOOK PLACE DURING THE FIRST 6 MONTHS OF THE YEAR ...... 26
11. RESULTS OF OPERATIONS FOR GRUPPO TOSCANA AEROPORTI...... 28
11.1 Consolidated Income Statement ...... 28 11.2 Consolidated Statement of Financial Position ...... 33 11.3 Analysis of Cash Flows ...... 36 11.4 Consolidated Net Financial Position ...... 38
12. THE GROUP’S INVESTMENTS ...... 40
13. HUMAN RESOURCES ...... 42
14. RELATIONSHIPS WITH THE OTHER ENTITIES OF THE GROUP AND WITH RELATED PARTIES ...... 43
15. MAIN INFORMATION ON SUBSIDIARIES/CONTROLLED ENTITIES ...... 45
15.1 Parcheggi Peretola ...... 45 15.2 Toscana Aeroporti Engineering ...... 47 15.3 Jet Fuel ...... 47
16. MAIN RISKS AND UNCERTAINTIES TO WHICH THE GROUP IS EXPOSED ...... 49
17. SIGNIFICANT EVENTS OCCURRED AFTER THE CLOSING OF THE PERIOD AT 30 JUNE 2015 ...... 52
2 18. OUTLOOK ...... 52
CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT AT 30 JUNE 2015 ...... 54
EXPLANATORY NOTES TO THE MAIN ITEMS OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT: INCOME STATEMENT ...... 61
ANNEXES TO THE 2015 CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT ...... 104
CERTIFICATION OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT ...... 108
3 Dear Shareholders,
The Consolidated Interim Financial Report at 30 June 2015, approved by the Board of Directors of 28 August 2015, has been prepared in compliance with Legislative Decree no. 58/1998 and subsequent amendments, as well as with CONSOB Issuers’ Regulation.
This Consolidated Interim Financial Report includes the Report on Operations, which contains the Directors’ comments on operations and management trends for 2015, and the Condensed Consolidated Interim Financial Report.
The valuation and measurement criteria adopted for the preparation of the Condensed Consolidated Interim Financial Report included in the Consolidated Interim Financial Report at 30 June 2015 are those required by the International Financial Reporting Standard (IFRS) issued by the International Accounting Standard Board (IASB) and adopted by the European Commission according to the procedure described in art.16 of European Regulation no. 1606/2002 of the European Parliament and of the Council of 19 July 2002, with particular reference to IAS 34 concerning interim financial reporting. These accounting standards are the same that have been used for the preparation of the Consolidated Financial Statement at 31 December 2014.
The limited auditing activity for the Condensed Consolidated Interim Financial Report at 30 June 2015 has been carried out by the auditor PricewaterhouseCoopers S.p.A.
Accounting data at 30 June 2015 include, with the full consolidation method, the data of the parent company “Toscana Aeroporti S.p.A.” and those of the subsidiaries “Parcheggi Peretola S.r.l.” and “Jet Fuel Co. S.r.l.” (hereinafter “Jet Fuel”). “Toscana Aeroporti Engineering S.r.l.”, a 100% controlled entity, has not been consolidated because not yet operating at 30 June 2015.
4 1. COMPOSITION OF THE PARENT COMPANY’S SHARE CAPITAL
We are providing below a list of the names of the parties which, at 28 August 2015, held, directly and indirectly, a portion of more than 5% of the subscribed share capital of the parent company Toscana Aeroporti S.p.a. (hereinafter also briefly referred to as “TA” or the “Parent Company”), consisting of shares with voting rights, according to the Shareholders’ Register, as integrated by the notices served pursuant to art. 120 of Legislative Decree no. 58/1998.
*Declarant, i.e. person positioned at the top of the control chain: Southern Cone Foundation
The share capital of Toscana Aeroporti S.p.a. consists of €30,709.743,90, subscribed and fully paid- up, and consisting of 18,611,966 ordinary shares with a nominal value of €1.65 each. We remind the reader that, after signing the merger by incorporation of Aeroporto di Firenze S.p.a. (hereinafter “AdF”) on 11 May 2015 - operation described below - TA (former Società Aeroporto Toscano Galileo Galilei S.p.a. – briefly “SAT”) increased its share capital for an aggregate nominal amount of €14,440,743.90 by issuing 8,751,966 shares for the purposes of the exchange. We point out that the whole of TA’s shares owned by Corporación America Italia S.p.a. have been pledged until December 2019 as guarantee of the debenture loan issued by the shareholder in question.
2. THE PARENT COMPANY’S SHAREHOLDERS
Corporate Boards On 15 July 2015, the Shareholders’ Meeting of Toscana Aeroporti S.p.a. appointed the Board of Directors, whose fifteen members shall remain in office for three financial years (until the approval of the financial statement as at 31 December 2017). Furthermore, the Meeting appointed Marco Carrai as Chair of the Board of Directors.
On the same date, the Board of Directors, chaired by newly-appointed Chairman Marco Carrai, appointed Gina Giani as CEO, and Roberto Naldi and Pierfrancesco Pacini as Deputy-Chairs of the Company.
5 Deputy-Chair Roberto Naldi was vested with authorities, powers of attorney and responsibilities regarding the definition of the Company’s policies and strategic plans. By virtue of said authorities, Deputy-Chair, Mr. Naldi, shall be considered as an executive. Board Member Vittorio Fanti was vested with authorities, powers of attorney and responsibilities regarding the special projects identified by the Board, including the project for the construction of the new runway and the new Florence airport. By virtue of said authorities, Board Member Vittorio Fanti shall be considered as an executive. The Board of Directors then created the Executive Committee with the following persons: Mr. Marco Carrai (Chair of the Committee), CEO Ms. Gina Giani, Deputy-Chairs Roberto Naldi and Pierfrancesco Pacini, Board Member/Director Vittorio Fanti and Board Members Martin Francisco Antranik Eurnekian Bonnarens and Iacopo Mazzei.
Then the Board of Directors created the following Committees: - Control and Risk Committee, consisting of Board Members Stefano Bottai, Anna Girello, and Iacopo Mazzei; - Appointments and Remuneration Committee, consisting of Board Members Stefano Bottai, Elisabetta Fabri, and Pierfrancesco Pacini.
Always on 15 July 2015, the Board of Directors also identified the Chair, Mr. Marco Carrai, as Director in charge of the Internal Control and Risk Management System. Then the Board of Directors, after receiving the favorable opinion of the Board of Auditors, deliberated on appointing Mr. Marco Gialletti as Executive in charge of corporate reporting. For the composition of corporate boards, please refer to section 7 of this Report.
Shareholder Agreements On 16 April 2014, Corporación America Italia S.r.l. and SO.G.IM. S.p.a. (which preventively exercised its right to withdraw from the Shareholder Agreement with “Regione Toscana”) signed a shareholder agreement in virtue of which Corporación America Italia S.r.l. would be able to exercise a dominating influence over AdF(today incorporated into Toscana Aeroporti S.p.a.). Said agreement has a term of three years, renewable upon expiry. On 13 May 2015, an Addendum was added to the original Shareholder Agreement existing between Corporación America Italia S.p.a. and SO.G.IM. S.p.a. to update its contents after the merger signed on 11 May 2015 and effective from 1 June 2015. Finally, we inform the reader that, after the appointment of the BoD of Toscana Aeroporti S.p.a. during the Shareholders’ Meeting held on 15 July 2015, the Shareholder Agreement signed on 23 June 2015 between bank “Ente Cassa di Risparmio di Firenze”, Regione Toscana (the Regional Government of Tuscany), Provincia di Pisa (the Provincial Government of Pisa), Fondazione Pisa (Pisa Foundation), C.C.I.A.A. di Firenze (Chamber of Commerce of Florence), Comune di Pisa (Municipality of Pisa), and C.C.I.A.A. di Pisa (Chamber of Commerce of Pisa) has automatically ceased to apply.
Further details and contents are available on the official website of the company: www.toscana- aeroporti.com.
6 3. MERGER BY INCORPORATION OF AEROPORTO DI FIRENZE S.P.A.
The Merger is part of the industrial and strategic plan already disclosed to the market with the joint press release published by SAT and AdF on 16 October 2014 with the aim of combining SAT and AdF in compliance with the requirements of the National Airport Plan for a single management of the Florence and Pisa airports, to be qualified as "airports of national strategic interest". The strategic objective is to create a best-in-class Tuscan airport system, due to become one of the main Italian airport hubs. The merger project aims at maximizing the coordinated development of the Galilei Pisa airport and the Vespucci Florence airport by expanding the offer of destinations reached by the two airports, increasing the number of seats offered on each route, increasing the number of airlines operating in the system by improving the airport infrastructures to meet the traffic volumes expected in the two airports based on their Airport Development Plans (ADP). At the effective date of the merger (1 June 2015), SAT will changed its company name into “Toscana Aeroporti S.p.a.”, a listed company based in Florence, with 51.13% of its share capital owned by Corporación América Italia S.p.a. For more details regarding the merger by incorporation of AdF, see the section “Merger by incorporation of Aeroporto di Firenze S.p.a.” of the Explanatory Notes.
4. PRO-FORMA FINANCIAL STATEMENT OF THE SURVIVING ENTITY AT 31 DECEMBER 2014 AND AT 30 JUNE 2014
For a better disclosure of the TA Group’s management trends, we are showing below the pro- forma information regarding the Surviving Entity at 31 December 2014 (included in the Equivalent Disclosure Document of 22 May 2015) and at 30 June 2014 (included in the Equivalent Disclosure Document of 23 December 2014). Pro-forma information has been prepared with the purpose of disclosing the effects of the merger on equity, operations and financial position of the SAT Group (today “Toscana Aeroporti”, TA) as if the transaction had taken place in the period to which said pro-forma information refers, according to the criteria and methods set forth in Consob’s Recommendation no. DEM 1052803 of July 5, 2001 and related technical document (the so-called “Equivalent Disclosure Document”). Therefore: a) as regards the financial position, pro-forma adjustments have been made based on the assumption that the merger has been finalized on 31 December 2014; b) as regards the income statement, adjustments have been made based on the assumption that the merger has been finalized at the start of the period to which that income statement refers (1 January 2014); c) as regards the cash flow statement, pro-forma adjustments have been made based on the assumption that the merger has been finalized at the start of the period to which that cash flow statement refers (1 January 2014); d) as a consequence, in consideration of the different purposes of pro-forma information with respect to an Condensed Consolidated Interim Financial Report, and having regard to the fact that the effects are considered with respect to a different time period when reporting on the financial position, income statement and cash flows, it must be pointed out that the financial position, the pro-forma consolidated income statement and the pro-forma cash flow statement should be read and interpreted separately, without looking for connections or any 7 matching between the different bookkeeping records; e) pro-forma adjustments have been made by taking into consideration and reflecting significant equity, operations and financial effects, directly correlated to the transaction for which pro-forma information has been requested; f) pro-forma adjustments made are supported by objective and independently verifiable evidence; g) pro-forma adjustments have been made in compliance with valuation criteria and international accounting standards (IAS/IFRS) approved by the European Commission; h) pro-forma adjustments have been determined, as much as possible, by using methods and criteria substantially in line with those adopted for the preparation of the first financial statement after the merger, which reflects the effects of the merger. As a consequence, while complying with the general criteria specified above, some intrinsic limits remain, due to the very nature of pro-forma information, which is just based on assumptions. For this reason, this should not be considered as a complete representation of the results that would have been obtained if the transactions considered in the preparation of pro-forma information had actually taken place at the date considered. Pro-forma information reflects an assumption and does not truly represent the real operations and financial or perspective situation of Toscana Aeroporti. Consolidated pro-forma statements include: A) historical data regarding the Condensed Consolidated Interim Financial Report of the SAT Group at 30 June 2014 and those regarding the Annual Consolidated Report of the SAT Group at 31 December 2014, prepared according to international accounting standards (IAS/IFRS); B) historical data regarding the Condensed Consolidated Interim Financial Report of the AdF Group at 30 June 2014 and those regarding the Annual Consolidated Report of the AdF Group at 31 December 2014, prepared according to international accounting standards (IAS/IFRS); C) the aggregation (sum) of data regarding the SAT Group and the AdF Group at 30 June 2014 and at 31 December 2014; D) pro-forma adjustments to reflect the merger transaction; E) consolidated pro-forma information of the SAT Group at 30 June 2014 and at 31 December 2014, obtained by summing up aggregated data and pro-forma adjustments.
The Pro-Forma Consolidated Income Statement at 30 June 2014 and the Pro-Forma Consolidated Statement of Financial Position of the Issuer for the year ended 31 December 2014 are provided below.
8 (Amounts in €K)
PRO-FORMA CONSOLIDATED INCOME Pro- STATEMENT AT JUNE 30, 2014 AdF forma SAT Group SAT Group Aggregate Group adjust- Pro-forma ments
(C) = (E) = ( C) (A) (B) (D) (A)+(B) + (D)
Aviation operating revenues 21.597 14.052 35.649 - 35.649 Non-Aviation operating revenues 7.488 5.004 12.492 - 12.492 Revenues from construction services 1.563 2.146 3.709 - 3.709 Other operating revenues 788 493 1.281 - 1.281 TOTAL REVENUES (A) 31.437 21.695 53.132 - 53.132 Costs for raw and ancillary materials, consumables and goods (538) (1.180) (1.718) - (1.718) Personnel costs (10.980) (7.496) (18.476) - (18.476) Costs for services (11.907) (5.996) (17.903) - (17.903) Costs for construction services (1.488) (2.044) (3.532) - (3.532) Other operating expenses (2.021) (739) (2.760) - (2.760) TOTAL COSTS (B) (26.935) (17.455) (44.390) - (44.390) GROSS OPERATING MARGIN (A-B) 4.502 4.240 8.742 - 8.742 Depreciation (2.041) (1.722) (3.763) - (3.763) Provision for liabilities and charges (773) (963) (1.736) - (1.736) Provisions and write-downs (58) (29) (87) - (87) OPERATING EARNINGS 1.629 1.526 3.155 - 3.155 Financial income 110 838 948 (830) 118 Financial expenses (430) (511) (941) - (941) TOTAL ASSET MANAGEMENT (319) 327 8 (830) (822) PROFIT (LOSS) BEFORE TAX 1.310 1.853 3.163 (830) 2.333 Taxes for the period (647) (655) (1.302) 11 (1.291) PROFIT/(LOSS) FOR THE PERIOD 663 1.198 1.861 (819) 1.042 Minority Interest’s loss (profit) for the period (19) 0 (19) - (19) GROUP’S PROFIT/(LOSS) FOR THE PERIOD 644 1.198 1.842 (819) 1.023
9 (Amounts in €K)
PRO-FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT DECEMBER 31, 2014 Pro-forma SAT SAT AdF Aggregate adjust- Group’s Group Group ments pro-forma
(C) = (E) = ( C) (A) (B) (D) (A)+(B) + (D)
Concession rights 67.695 65.245 132.940 0 132.940 Patents and work in progress 8.165 197 8.362 0 8.362 Total intangible assets 75.860 65.442 141.302 0 141.3020
Land and buildings, plant and machinery 21.064 5.490 26.554 0 26.554 Total tangible assets 21.064 5.490 26.554 0 26.554 Equity investments in other entities 1.791 87 1.878 (1.723) 155 Investments in associated companies 482 0 482 0 482 Total Equity Investments 2.273 87 2.360 (1.723) 637 Sundry loans and other non-current assets 3.488 298 3.786 315 4.101 Total other non-current assets 3.488 298 3.786 315 4.101 Total non-current assets 102.685 71.317 174.002 (1.408) 172.594 Inventories 0 0 0 0 0 Receivables from customers 13.727 6.548 20.275 0 20.275 Other accounts receivable 3.683 7.759 11.442 (789) 10.653 Cash and cash equivalents 25.091 11.754 36.845 0 36.845 Total current assets 42.501 26.061 68.562 (789) 67.773 TOTAL ASSETS 145.185 97.378 242.563 (2.197) 240.367
Group Shareholders' Equity 66.598 44.210 110.808 (2.375) 108.434 Minority interest 138 0 138 0 138 TOTAL SHAREHOLDERS' EQUITY 66.736 44.210 110.946 (2.375) 108.571 Termination benefits and other personnel- 7.169 related provisions (24) 4.207 2.962 0 7.169 Provisions for liabilities and charges 19.312 (including repair and replacement) 10.554 8.758 0 19.312 Deferred tax liabilities 0 476 476 0 476 Non-current financial liabilities 24.700 10.623 35.323 0 35.323 Other payables due beyond the year 1.839 0 1.839 0 1.839 Total medium-long term liabilities 41.300 22.819 64.119 0 64.119 Bank and financial overdrafts 2.068 11.908 13.976 0 13.976 Payables to suppliers 17.142 6.628 23.770 0 23.770 Provision for repair and replacement 1.758 1.188 2.946 0 2.946 Other payables 16.182 10.625 26.807 178 26.985 Total current liabilities 37.150 30.349 67.499 178 67.677 TOTAL LIABILITIES 78.450 53.168 131.618 178 131.796
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 145.185 97.378 242.563 (2.197) 240.367
The pro-forma adjustments shown in the pro-forma reports provided above concern: the elimination of intragroup relationships between the SAT Group and the AdF Group concerning dividends distributed and mutually received during 2014 by the Absorbed Entity and by the Surviving Entity; the elimination from the income statement of the capital gain realized by AdF after the sale of the stake held in SAT, because it has been simulated as transaction on treasury stock, with consequent direct booking in the in the Shareholders’ Equity in compliance with IAS 32; 10 the elimination of the stake held by SAT in AdF, as a contra-entry in the Shareholders’ Equity after the merger by incorporation of AdF in SAT; capital increase costs connected with the merger transaction, consisting in fees paid to the consultants that assisted the Absorbed Entity and the Surviving Entity in making the transaction after the related taxation1. For further details, see the Equivalent Disclosure Document published in the Company’ website.
5. STOCK PERFORMANCE
Toscana Aeroporti’s shares have been listed since 1 June 2015 in the Mercato Telematico Azionario organized and managed by Borsa Italiana S.p.A. At 30 June 2015, the share was listed for € 15.90 in the Standard segment (Class 1).
1 This is the total estimated amount at the date of preparation of pro-forma statements. The final amount, after taxation, is €738K.
11 6. MACROSTRUCTURE OF THE TOSCANA AEROPORTI GROUP Legal details of the Parent Company Company name: “Toscana Aeroporti S.p.a., briefly “TA”. Registered office of the company: Firenze, Via del Termine n. 11 - Tax Code: 00403110505. Registration number with the Company Register of Florence - Economic and Administrative index: n. 366022 FI no. 637708 - Fully paid-up share capital: Euro 30,709,743.90.
TOSCANA AEROPORTIS.P.A.
Jet Fuel Co. S.r.l. Alatoscana S.p.a. Immobili A.O.U. Careggi 51,00% 13.27% S.p.a. 25%
Consorzio Pisa Consorzio per l’Aeroporto Parcheggi Energia S.c.r.l. di Siena (*) 0.11% Peretola. S.r.l. 5.8%
100.00% Consorzio Turistico Area Tirreno Brennero Pisana S.c.r.l.(*) 2.37% S.r.l.0.27%
Toscana Montecatini ScuolaAeroportualeItaliana Aeroporti Congressi S.c.r.l.(*) Associazione
5.0% Engineering 52.67%
S.r.l. Interporto Toscano Firenze Convention Bureau
100.00% A. Vespucci S.p.a. S.c.r.l. 0.97% 0.22%
SeamS.p.a. Firenze Mobilità S.p.a.
3.98% 0.39% Parent Company- Toscana Aeroporti (hereinafter "TA"). Subsidiaries- Jet Fuel Co, S.r.l. (hereinafter Jet Fuel), Parcheggi Peretola S.r.l., Toscana Aeroporti Engineering S.r.l. For consolidation purposes, we point out that Toscana Aeroporti owns 33.33% of property and dividend rights and 51% of voting rights. For further details, see section on controlled companies. Toscana Aeroporti Engineering S.r.l. was not an operating entity at 30 June 2015. For more considerations on the consolidation area, see specific section in the Explanatory Notes. Related Parties - (*) Entities currently being wound up.
12 Full Consolidation
Entity Based in Share Capital (€) Shareholders’ % Equity (€K) Toscana Aeroporti S.p.a. Florence 30,709,743.90 105,412 Parent Comp. Parcheggi Peretola S.r.l. Florence 50,000.00 2,238 100.00 Jet Fuel Co. S.r.l. Pisa 150,000.00 213 51.00
Full Consolidation with the Equity Method
Entity Based in Share Capital (€) Shareholders’ % Equity (€K) Immobile A.O.U. Careggi S.p.a. Florence 200,000.00 463 25.00 Alatoscana S.p.a. M. di Campo (LI) 2,910,366.20 2,839 13.27
7. COMPOSITION OF CORPORATE GOVERNING BODIES Board of Directors Marco CARRAI Chair Gina GIANI2 Chief Executive Officer Roberto NALDI Executive Deputy-Chair Pierfrancesco PACINI Deputy-Chair Vittorio FANTI Delegated Board Member Leonardo BASSILICHI Board Member Giovanni Battista BONADIO Board Member Stefano BOTTAI Board Member Martin Francisco Antranik EURNEKIAN BONNARENS Board Member Elisabetta FABRI Board Member Anna GIRELLO Board Member Iacopo MAZZEI Board Member Angela NOBILE Board Member Saverio PANERAI Board Member Ana Cristina SCHIRINIAN Board Member
Board of Statutory Auditors Loredana DURANO Chair3
2Corporate Manager qualified as Managing Director. 3Resigned on 30 July 2015.
13 Silvia BRESCIANI Statutory Auditor Tania FROSALI Statutory Auditor Roberto GIACINTI Statutory Auditor Antonio MARTINI Statutory Auditor
Secretary of the Board of Directors Nico ILLIBERI Financial Reporting Manager pursuant to Law 262/05 Marco GIALLETTI Independent Auditor PricewaterhouseCoopers S.p.a.
8. HIGHLIGHTS
Merger by With the merger by incorporation of Aeroporto di Firenze S.p.a. into SAT Incorporation S.p.A., the operations of the incorporated (or absorbed) entity have been recognized in SAT’s balance sheet for accounting and tax purposes effective from 1 January 2015. So, we point out that any difference between the book values of the two Interim Reports of Gruppo Toscana Aeroporti at 30 June 2015 and of the SAT Group at 31 December 2014 does not quite reflect the real situation because they are affected by the transaction described. Consolidated Revenues totaled €63,242K, up by €31,805K from €31,437K of the SAT Group Operating Results at 30 June 2014 at 30 June 2015 GOM/EBITDA was €10,005K, up by €5,503K from the result of €4,502K of the SAT Group at 30 June 2014. Operating Result was €4,152K, up by €2,523K from the result of €1,629K of the SAT Group at 30 June 2014. Operating Result before tax was €4,980K, up by €3,671K compared to the result of €1,310K of the SAT Group at 30 June 2014. Group’s profit for the period, consisting of €3,368K after taxation against SAT Group's profits for the period of €644K at 30 June 2014 - have increased by €2,725K. Net indebtedness totaled €32,523K at 30 June 2015, compared to €1,677K for the SAT Group at 31 December 2014. Investments Investments for an overall amount of € 11,947 K have been made at 30 June at 30 June 2015 2015, of which € 9,403 K to improve and enhance flight infrastructures in the Pisa airport. Traffic During the 6-month period examined, the Tuscan Airport System carried 3.3 million passengers, with an aggregate growth of 7.3% for the Passengers component and of 2.9% for the Flights component compared to the aggregate passengers of both Pisa and Florence airports in the first 6 months of 2014. During the first 6-month period 2015, the Tuscan Airport System was confirmed at the 4th position in the Italian Airport System for number of passengers.
14 Shareholders of On 13 May 2015, an addendum was added to the original shareholder the Parent agreement existing between Corporación America Italia S.p.a. and SO.G.IM. Company S.p.a. to update its contents after the merger signed on 11 May 2015 and effective from 1 June 2015. Finally, we inform the reader that, after the appointment of the BoD of Toscana Aeroporti S.p.a. by the Shareholders’ Meeting held on 15 July 2015, the Shareholder Agreement signed on 23 June 2015 between the bank “Ente Cassa di Risparmio di Firenze”, Regione Toscana (the Regional Government of Tuscany), Provincia di Pisa (the Provincial Government of Pisa), Fondazione Pisa (Pisa Foundation), C.C.I.A.A. di Firenze (the Chamber of Commerce of Florence), Comune di Pisa (the Municipality of Pisa), and C.C.I.A.A. di Pisa (the Chamber of Commerce of Pisa) has automatically ceased to apply. Corporate Boards On 15 July 2015, the Shareholders’ Meeting of Toscana Aeroporti S.p.a. appointed the Board of Directors. Furthermore, the Meeting appointed Marco Carrai as Chair of the Board of Directors. On the same date, the Board of Directors appointed Gina Giani as CEO, Roberto Naldi and Pierfrancesco Pacini as Deputy-Chairs of the Board of Directors, Vittorio Fanti as Delegated Board Member for Special Projects. On the same date, the Board of Directors created the Executive Committee. On 30 July 2015, the Chair of the Board of Auditors, Durano Loredana, resigned. Outlook During the 6-month period examined, the Tuscan Airport System carried 3.3 million passengers, for an aggregate growth of 7.3% for the Passengers component against an annual average of 3.7%. Year-to-date traffic at 31 July 2015, compared to the same period of the previous year, is up by 6% for the Passengers component. Based on the aforesaid, considering that the first 6-month period is usually negatively affected by the low seasonal nature of the business, Gruppo Toscana Aeroporti is likely to have a second 6-month period characterized by positive growth rates and results in line with traffic trends.
15 9. TRENDS IN THE TUSCAN AIRPORT SYSTEM’S TRAFFIC
During the 6-month period considered, the Tuscan Airport System carried 3.3 million passengers, with an aggregate growth of 7.3%, corresponding to + 225,955 passengers carried. The table below provides details of the different traffic components for the January-June period: TOSCANA AEROPORTI TRAFFIC
30/06/2015 30/06/2014 2015/14 Diff. % 2015/14 Diff. Commercial passengers 3.307.774 3.081.792 225.982 7,3% Domestic (Scheduled + Charter) 869.627 815.188 54.439 6,7% International (Scheduled + Charter) 2.438.147 2.266.604 171.543 7,6% General Flight Passengers 8.753 8.780 -27 -0,3% TOTAL PASSENGERS 3.316.527 3.090.572 225.955 7,3% 30/06/2015 30/06/2014 2015/14 Diff. % 2015/14 Diff. Commercial Flights 29.978 28.771 1.207 4,2% Domestic (Scheduled + Charter) 7.615 7.343 272 3,7% International (Scheduled + Charter) 21.890 21.093 797 3,8% Cargo 473 335 138 41,2% General Flights 4.712 4.956 -244 -4,9% TOTAL FLIGHTS 34.690 33.727 963 2,9% 30/06/2015 30/06/2014 2015/14 Diff. % 2015/14 Diff. Commercial tonnage 1.752.661 1.688.526 64.135 3,8% Domestic (Scheduled + Charter) 432.925 454.882 -21.957 -4,8% International (Scheduled + Charter) 1.280.764 1.211.332 69.432 5,7% Cargo 38.972 22.312 16.660 74,7% General Aviation Tonnage 62.418 60.501 1.917 3,2% TOTAL TONNAGE 1.815.079 1.749.027 66.052 3,78% 30/06/2015 30/06/2014 2015/14 Diff. % 2015/14 Diff. Air cargo (kg) 4.303.469 2.567.823 1.735.646 67,6% Ground cargo (kg) 254.392 294.654 -40.262 -13,7% Mail (kg) 44.048 49.081 -5.033 -10,3% TOTAL CARGO AND MAIL 4.601.909 2.911.558 1.690.351 58,1% 30/06/2015 30/06/2014 2015/14 Diff. % 2015/14 Diff. TOTAL TRAFFIC UNITS 3.362.546 3.119.688 242.859 7,8% Final data exceed the balance of the national airport system*, which is + 4.9%, as shown in the subsequent table.
16 N o. A irport Passengers %
R om e (System ) 21.401.592 7,5 M ilan (System ) 18.192.454 4,4 1 Venice 3.941.031 1,3 2 Catania 3.272.192 -1,5 3 Bologna 3.171.039 2,3 4 N aples 2.821.433 6,1 5 Pisa 2.169.082 6,8 6 Palerm o 2.136.959 4,7 7 Bari 1.846.462 10,3 8 Turin 1.814.733 7,1 9 Cagliari 1.583.890 3,0 10 Florence 1.147.445 8,3 11 Treviso 1.146.333 10,2 12 Verona 1.134.826 -8,9 13 Brindisi 1.046.060 4,7 14 Lam ezia Term e 1.034.055 -1,6 15 Alghero 737.893 9,3
Italian Airport System 72.206.770 4,9
Tuscan Airport System 3.316.527 7,3 (FLR /PSA )
During the first 6-month period 2015, the Tuscan Airport System was confirmed at the 4th position in the Italian Airport System for number of passengers.
During the same period, Tuscan airports have been connected with 94 destinations, of which 13 domestic and 81 international (18 operated in both airports) and have been served by 36 airlines (of which 6 operating in both airports), 21 IATA and 15 Low-Cost.
The table below provides details on these destinations and airlines.
17 No. of destinations served January-June 2015 - Tuscan Airport System
Domestic destinations: 23 Birmingham 47 Glasgow PIK 71 Nantes 1 Alghero 24 Bordeaux 48 Goteborg 72 New Castle 2 Bari 25 Bristol 49 Helsinki 73 New York JFK 3 Brindisi 26 Brussels 50 Ibiza 74 Oslo 4 Cagliari 27 Brussels CRL 51 Istanbul 75 Paris CDG 5 Catania 28 Bucharest 52 Cephalonia 76 Paris CDG 6 Comiso 29 Budapest 53 Kos 77 Paris ORY 7 Crotone 30 Chania 54 Las Palmas 78 Prague 8 Lamezia T. 31 Cologne/Bonn 55 Leeds-Bradford 79 Riga 9 Elba Island (M. Campo) 32 Copenhagen 56 Lyon 80 Rhodes 10 Olbia 33 Cork 57 Lisbon 81 Thessaloniki 11 Palermo 34 Cracovia 58 Liverpool 82 Santorini 12 Rome FCO 35 Gdańsk 59 London LCY 83 Seville 13 Trapani 36 Dublin 60 London LGW 84 Split International destinations:37 Düsseldorf 61 London LHR 85 Stuttgart 14 Hamburg 38 Dusseldorf NRN 62 London LTN 86 Stockholm ARN 15 Amsterdam 39 East Midlands 63 London STN 87 Stockholm NYO 16 Athens 40 Edinburgh 64 Madrid 88 Tel Aviv 17 Barcelona 41 Eindovhen 65 Malta 89 Tenerife 18 Barcelona GRO 42 Fez 66 Manchester 90 Tirana 19 Belfast 43 Frankfurt 67 Marrakesh 91 Valencia 20 Berlin SXF 44 Frankfurt HHN 68 Mikonos 92 Warsaw 21 Berlin TXL 45 Fuerteventura 69 Monaco 93 Vienna 22 Billund 46 Geneva 70 Moscow 94 Zurich
Airlines that operated from January to June 2015 Tuscan Airport System** 1 Aegean Airlines 19 Germanwings 2 Air Baltic 20 Hop! 3 Air Berlin 21 Iberia 4 Air Dolomiti 22 Jet2.com 5 Air France 23 KLM 6 Alitalia 24 Meridiana 7 Arkia Airlines 25 Lufthansa 8 Austrian Airlines 26 Niki 9 Blue Panorama 27 Norwegian Air S. 10 BlueAir 28 Ryanair 11 British Airways 29 SAS 12 Brussels Airlines 30 Silver Air 13 City Jet 31 Swiss 14 Delta Air Lines 32 Transavia 15 easyJet 33 Turkish Airline 16 Etihad Regional 34 Volotea 17 Finnair 35 Vueling Airline Flybe Wizz Air 18 36
* The airline FlyBe operated the Florence- Birmingham flight until 28 March 2015 with 6 flights a week. ** Airlines are listed alphabetically.
18 9.1. Traffic trends in the Pisa “Galileo Galilei” airport
The table below compares traffic trends of the first 6 months of 2015 and 2014, broken down into its different components:
PISA AIRPORT TRAFFIC
30/06/2015 30/06/2014 2015/14 Diff. % 2015/14 Diff. Commercial passengers 2.165.958 2.028.420 137.538 6,8% Domestic (Scheduled + Charter) 693.722 620.550 73.172 11,8% International (Scheduled + Charter) 1.472.236 1.407.870 64.366 4,6% General Flight Passengers 3.124 3.086 38 1,2% TOTAL PASSENGERS 2.169.082 2.031.506 137.576 6,8% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. Commercial Flights 16.574 15.977 597 3,7% Domestic (Scheduled + Charter) 5.725 5.216 509 9,8% International (Scheduled + Charter) 10.376 10.426 -50 -0,5% Cargo 473 335 138 41,2% General Flights 1.480 1.509 -29 -1,9% Total Flights 18.054 17.486 568 3,2% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. Commercial Tonnage 1.074.587 1.042.412 32.175 3,1% Domestic (Scheduled + Charter) 328.558 325.970 2.588 0,8% International (Scheduled + Charter) 707.057 694.130 12.927 1,9% Cargo 38.972 22.312 16.660 74,7% General Aviation Tonnage 24.419 23.213 1.206 5,2% Total Tonnage 1.099.006 1.065.625 33.381 3,13% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. Air cargo (kg) 4.264.561 2.501.012 1.763.549 70,5% Ground cargo (kg) 167.076 201.507 -34.431 -17,1% Mail (kg) 44.048 49.081 -5.033 -10,3% TOTAL CARGO AND MAIL 4.475.685 2.751.600 1.724.085 62,7% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. TOTAL TRAFFIC UNITS 2.213.839 2.059.022 154.817 7,5%
A total number of 2,169,082 passengers passed through the Pisa airport during the first six months of 2015, up by 6.8% compared to the same period of the previous year. So, Pisa is ranked as the 10th (tenth) Italian airport for number of passengers.
These results have been essentially supported by the positive trend of the Load Factor of scheduled flights, which improved compared to each month of the first 6 months of 2014 (see following table). At the end of the first six months of 2015, the Load Factor was 80.12%, up by 3.3 percentage points compared to the first 6 months of 2014 (76.84%). A +2.9% growth in the number of seats offered (capacity) corresponds to a more than proportional +7.3% growth in seats sold (carried passengers).
Scheduled traffic has globally increased by 7.2% (+144,938 passengers) compared to the same period of 2014. This is due to the increase both in scheduled domestic traffic (+12.3%, with +75,851 passengers) and scheduled international traffic (+5.0%, with +69,087 passengers).
19 The number of passengers on rerouted flights, included in commercial traffic, is 0.7% of the total traffic (with 15,106 passengers, +1% compared to the same period of 2014). The portion coming from Florence is approx. 73%. Compared to the first 6 months of 2014, charter traffic had a 38.0% decrease (-7,400 passengers) mainly due to the suspension of outgoing flights towards Egypt and Tunisia and incoming flights from Russia due to social-political unrest in said Countries. General Aviation flights has remained substantially in the first 6 months of 2015, in line with the figures recorded in the same period of 2014. The table below shows the main factors that characterized scheduled passengers’ traffic trends in the Pisa Galilei airport in the first 6 months of 2015:
Ryanair - Full operation of the main weekly flights for Comiso and Crotone, of the flight to Lisbon (not operated in the first quarter of 2014), which passed from 2 to 3 frequencies in the summer season, and increase in weekly flights for Palermo (from 11 to 14), Tenerife (passed from 1 to 3) and Madrid (from 6 to 7). During the summer 2015, 4Ryanair connected the Pisa airport with 46 destinations, operating on average over 30 flights a day. Turkish Airlines - Full operation of the direct Pisa-Istanbul connection starting from 26 June 2014, which increased operations passing from 4 to 5 weekly flights since April. Transavia France - Full operation of the flight operated on Paris Orly (with 178-seat AB320 or 189-seat B737) starting from 13 April 2014, which partially offsets AirFrance operations on Paris Charles de Gaulle (2 daily flights operated with a 72-seat CRJ-700) that continued until 29 March 2014. Alitalia - This carrier increased weekly flights to Rome Fiumicino (which passed from 21 to 24), operated with 68-seat ATR-72 aircraft, and continued with its own brand connections to Catania, Prague and Tirana, operated by Air One until 30 September 2014. In April, the seasonal connection for Berlin Tegel was resumed (3 weekly flights), while connections to Olbia (4 weekly flights) and Moscow Sheremetyevo (2 weekly flights) restarted during high season. Volotea - The Spanish carrier operates flights to Bordeaux, Nantes (2 weekly flights) and Athens (2 weekly flights from the end of May to the end of September). easyJet - The British carrier has operated 2 weekly flights to Hamburg starting from April and 2 weekly flights to Manchester starting from May 23. The two new destinations were added to those operated by the airline on Pisa (Paris Orly, London Gatwick, Bristol, Berlin Schoenefeld and London Luton). Delta Air Lines - This airline confirmed the direct flight to New York since June 16 (with 4 flights per week throughout June and from 1 to 7 September and 6 flights per week in July and August). Air Baltic - This airline has operated a new flight to Riga (2 flights per week from June 13 to September 13). Aegean Airlines - The Greek airline has operated 2 weekly flights to Athens starting from June 26 and until September 28.
4 The Summer 2015 season corresponds to the period between 29 March 2015 and 24 October 2015.
20 We also remind the reader that seasonal flights were resumed operated by: Finnair (Helsinki, up to 2 flights per week), SAS (Stockholm, Copenhagen, Oslo, up to 2 flights per week), Norwegian Air Shuttle (Stockholm, Copenhagen, Oslo, up to 3 flights per week), Germanwings (Cologne/Bonn, 5 flights per week) and Jet2.com (Manchester up to 6 flights per week; Belfast, East Midland and Leeds-Bradford 1 flights per week and New Castle 2 flights per week) During the first 6 months of 2015, the Pisa airport has been connected with 79 destinations operated by 20 airlines, of which 10 IATA and 10 LC. No. of destinations served January-June 2015 - Pisa Airport
Domestic destinations: 19 Belfast 39 Fez 59 Manchester 1 Alghero 20 Berlin TXL 40 Frankfurt HHN 60 Marrakesh 2 Bari 21 Berlin TXL 41 Fuerteventura 61 Monaco 3 Brindisi 22 Billund 42 Glasgow PIK 62 Moscow 4 Cagliari 23 Bordeaux 43 Goteborg 63 Nantes 5 Catania 24 Bristol 44 Helsinki 64 New Castle 6 Comiso 25 Brussels CRL 45 Ibiza 65 New York JFK 7 Crotone 26 Bucharest 46 Istanbul 66 Oslo 8 Lamezia T. 27 Budapest 47 Cephalonia 67 Paris CDG 9 Elba Island (M. Campo)28 Chania 48 Kos 68 Paris ORY 10 Olbia 29 Cologne/Bonn 49 Las Palmas 69 Prague 11 Palermo 30 Copenhagen 50 Leeds-Bradford 70 Riga 12 Rome FCO 31 Cork 51 Lisbon 71 Rhodes 13 Trapani 32 Krakow 52 Liverpool 72 Thessaloniki International destinations: 33 Gdańsk 53 London LGW 73 Seville 14 Hamburg 34 Dublin 54 London LHR 74 Stockholm ARN 15 Amsterdam 35 Dusseldorf NRN 55 London LTN 75 Stockholm NYO 16 Athens 36 East Midlands 56 London STN 76 Tenerife 17 Barcelona 37 Edinburgh 57 Madrid 77 Tirana 18 Barcelona GRO 38 Eindovhen 58 Malta 78 Valencia 79 Warsaw Airlines that operated from January to June 2015 Pisa Airport* 1 Aegean Airlines 11 Lufthansa 2 Air Baltic 12 Norwegian Air S. 3 Alitalia 13 Ryanair 4 Blue Panorama 14 SAS 5 British Airways 15 Silver Air 6 Delta Air Lines 16 Transavia 7 easyJet 17 Turkish Airline 8 Finnair 18 Volotea 9 Germanwings 19 Vueling 10 Jet2.com 20 Wizz air * Airlines are listed alphabetically.
21 Scheduled passenger traffic by Country A total of 25 markets have been regularly connected with the Pisa airport with scheduled flights in the first 6 months of 2015. The international market accounts for 67.8% of the total scheduled passenger traffic of the Galilei airport, while the domestic traffic accounts for 32.2%. The table below shows the percentage incidence of each European country over the total number of scheduled traffic passengers recorded by the Galilei airport in the first 6 months of 2015 and the difference, both in absolute and percentage terms, compared to the same period of 2014: Passenger line traffic 2015 2014 Diff. % Diff. % on TOT Italy 693.269 617.418 75.851 12,3% 32,2% United Kingdom 390.945 404.663 -13.718 -3,4% 18,2% Spain 253.970 228.986 24.984 10,9% 11,8% France 161.551 164.317 -2.766 -1,7% 7,5% Germany 124.719 122.255 2.464 2,0% 5,8% The Netherlands 104.456 91.446 13.010 14,2% 4,8% Belgium 75.668 72.062 3.606 5,0% 3,5% Albania 63.663 59.883 3.780 6,3% 3,0% Morocco 38.653 39.280 -627 -1,6% 1,8% Poland 25.682 23.070 2.612 11,3% 1,2% Romania 25.529 23.845 1.684 7,1% 1,2% Ireland 25.061 21.734 3.327 15,3% 1,2% Portugal 24.770 7.672 17.098 222,9% 1,2% Sweden 24.002 21.212 2.790 13,2% 1,1% Malta 21.561 16.977 4.584 27,0% 1,0% Hungary 19.867 15.888 3.979 25,0% 0,9% Turkey 18.870 633 18.237 2881,0% 0,9% Denmark 18.227 15.429 2.798 18,1% 0,8% Greece 15.449 16.241 -792 -4,9% 0,7% Czech Republic 9.783 15.691 -5.908 -37,7% 0,5% Norway 8.729 17.906 -9.177 -51,3% 0,4% Russian Fed. 3.083 4.239 -1.156 -27,3% 0,1% U.S.A. 2.764 4.284 -1.520 -35,5% 0,1% Finland 646 603 43 7,1% 0,0% Latvia 575 0 575 - 0,0% Others 2.373 3.193 -820 -25,7% 0,1% TOTAL 2.153.865 2.008.927 144.938 7,2% 100,0% During the first 6 months of 2015, domestic traffic grew by 12.3% compared to the same period of 2014. This result is mainly due to the full operation of Ryanair flights to Comiso and Crotone (not operated in the first quarter 2014) and to the above-mentioned increase in weekly flights for Palermo.
The British market, which was confirmed to be the first of foreign markets (with 390,945 passengers; 18.2% of total markets) had a 3.4% decrease compared to the same period of 2014. This decrease is the effect of the reduction of British Airways flights to London Gatwick (8 weekly flights against 2 daily flights of the previous year) and of the cancellation of flights to/for Bournemouth and Leeds-Bradford by Ryanair.
The Spanish market grew by 11.8% (with 253,970 passengers carried during the period). This result is due to the above-mentioned increases in weekly flights to Madrid and Tenerife.
22 The French market is substantially in line with the first 6 months of 2014 (-1.7%) with the new operations on Nantes and Bordeaux being added to Transavia France operations on Paris Orly, to partly offset the cancellation of Air France operations on Paris Charles De Gaulle.
Thanks to Ryanair’s connection with Lisbon and to Turkish Airlines’ connection with Istanbul, the Portuguese (+17,978 passengers) and Turkish markets also grew (+18,237 passengers). We remind the reader that these flights started to be operated in April 2014 and June 2014, respectively.
Cargo & Mail Traffic Cargo traffic data recorded in the first 6 months of 2015 in the Pisa airport show a growth of +62.7% (with 1,724,085 kg of cargo and mail carried). This result is mainly due to:
- Resumption of DHL operations on Pisa Since 2 April 2014, the courier restarted operating in the Pisa airport by connecting it directly with its Leipzig hub.
- Operation of 9 “all cargo” charter flights with Boeing 747 aircraft in the 6-month period (against the 3 flights operated in the same period of 2014) with destination Jeddah used to export over 900,000 kg of marble to Saudi Arabia.
23 9.2 Traffic trends in the Florence “Amerigo Vespucci” airport
FLORENCE AIRPORT TRAFFIC
30/06/2015 30/06/2014 2015/14 Diff. % 2015/14 Diff. Commercial passengers 1.141.816 1.053.372 88.444 8,4% Domestic (Scheduled + Charter) 175.905 194.638 -18.733 -9,6% International (Scheduled + Charter) 965.911 858.734 107.177 12,5% General Flight Passengers 5.629 5.694 -65 -1,1% TOTAL PASSENGERS 1.147.445 1.059.066 88.379 8,3% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. Commercial Flights 13.404 12.794 610 4,8% Domestic (Scheduled + Charter) 1.890 2.127 -237 -11,1% International (Scheduled + Charter) 11.514 10.667 847 7,9% General Flights 3.232 3.447 -215 -6,2% TOTAL FLIGHTS 16.636 16.241 395 2,4% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. Commercial tonnage 678.074 646.114 31.960 4,9% Domestic (Scheduled + Charter) 104.367 128.912 -24.545 -19,0% International (Scheduled + Charter) 573.707 517.202 56.505 10,9% General Aviation Tonnage 37.999 37.288 711 1,9% TOTAL TONNAGE 716.073 683.402 32.671 4,78% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. Air cargo (kg) 38.908 66.811 -27.903 -41,8% Ground cargo (kg) 87.316 93.147 -5.831 -6,3% TOTAL CARGO AND MAIL 126.224 159.958 -33.734 -21,1% 30.06.15 30.06.14 2015/14 Diff. % 2015/14 Diff. TOTAL TRAFFIC UNITS 1.148.707 1.060.666 88.042 8,3%
During the first 6 months of 2015, the Florence airport recorded 1,147,445 passengers, with an increase of 8.3% (+88,379 passengers) compared to the same period of 2014. Passenger traffic for each of the months considered reached record levels for the airport.
These results have been the result of an increase in the number of scheduled flights (+4.7%) and scheduled seats offered (+4.2%), with a more than proportional increase in passengers also thanks to the increase in the load factor (+3.0%), which passed from 74.5% of 2014 to 77.5% of 2015.
The main factors that determined this traffic record at 30 June 2015 are described below: Iberia - Starting from 1 April 2015, this carrier operated a flight to Madrid with 6 weekly flights operated with 141-seat A319 aircraft. Arkia Airlines - The Israeli airline opened on 29 March 2015 with 2 weekly flights flight to Tel Aviv operated with 110-seat E190 aircraft. Alitalia - Starting from June, this carrier increased its capacity in the airport by reintroducing 138-seat AB319 aircraft to replace 88-seat E175. Blue Air - On 20 March 2015, the Romanian carrier opened a connection with Bucharest with 3 weekly flights on 141-seat B737-500 aircraft. Blue Panorama - This airline opened a rout to Tirana on 29 March 2015 with 4 weekly flights operated with 64-seat ATR 72 aircraft. Swiss Airlines - Starting from 30 March 2015, this airline activated a 4-weekly flight to Geneva with 76-seat DashQ-400 aircraft; Vueling - Full operation of the second A319 based in Florence, which offers 16 destinations,
24 including Olbia, opened on 22 June 2015 with 2 weekly flights. KLM - Starting from 29 March 2015, KLM increased the frequency of its flights to Amsterdam passing from 3 to 4 daily flights operated with 100-seat E190 aircraft. British Airways Cityflyer - Full operation of its connection to London City, opened on 27 March 2014, passing from 4 to 6 weekly flights. Brussels Airlines - Starting from the summer, this carrier increased its flights to Brussels, passing from 10 to 11 flights weekly operated with 97-seat RJ100 aircraft. Air France - Full operation of the 131-seat A318 for the 5 daily flights for Paris CDG during the winter and 6 during the summer.
Connection with scheduled flights during the first six months of 2015 have been 33, operated by 22 airlines:
N. destinations served 2015 - Florence Airport Domestic destinations: 16 Frankfurt 1 Bari 17 Geneva 2 Cagliari 18 Ibiza 3 Catania 19 Lyon 4 Elba Island (M. Campo) 20 London LCY 5 Olbia 21 London LGW 6 Palermo 22 Madrid 7 Rome FCO 23 Monaco International destinations: 24 Mykonos 8 Amsterdam 25 Paris CDG 9 Barcelona 26 Paris ORY 10 Berlin TXL 27 Santorini 11 Birmingham 28 Split 12 Brussels 29 Stuttgart 13 Bucharest 30 Tel Aviv 14 Copenhagen 31 Tirana 15 Düsseldorf 32 Vienna Zurich 33
Airlines that operated from January to June 2015 Florence Airport* 1 Air Berlin 12 Etihad Regional 2 Air Dolomiti 13 Flybe 3 Air France 14 Hop! 4 Alitalia 15 Iberia 5 Arkia 16 KLM 6 Austrian Airlines 17 Lufthansa 7 Blue Air 18 Meridiana 8 Blue Panorama 19 Niki 9 British Airways 20 Silver Air 10 Brussels Airlines 21 Swiss Airlines Cityjet Vueling 11 22 * Airlines are listed alphabetically. ** The airline FlyBe operated the Florence- Birmingham flight until 28 March 2015 with 6 flights a week.
25
Scheduled passenger traffic by Country
During the first 6 months of 2015, international traffic accounted for 84.6% of the total passenger traffic. The Florence airport is connected with 14 countries.
Passenger line traffic 2015 2014 Diff. % Diff. % on TOT Germany 272.541 271.145 1.396 0,5% 23,9% France 268.340 236.050 32.290 13,7% 23,6% Italy 175.173 194.174 -19.001 -9,8% 15,4% Switzerland 94.187 87.025 7.162 8,2% 8,3% United Kingdom 91.368 77.617 13.751 17,7% 8,0% The Netherlands 87.756 69.404 18.352 26,4% 7,7% Spain 82.688 62.201 20.487 32,9% 7,3% Austria 22.535 25.469 -2.934 -11,5% 2,0% Belgium 21.196 20.072 1.124 5,6% 1,9% Denmark 7.751 7.111 640 9,0% 0,7% Romania 7.451 7.451 0,7% Albania 3.742 3.742 0,3% Israel 2.204 2.204 0,2% Greece 1.228 1.058 170 16,1% 0,1% Other 394 394 0,0% Croatia 306 306 0,0% TOTAL 1.138.860 1.051.326 87.534 8,3% 100,0%
As shown in the table above, the German market was confirmed to be the main market, with 272,541 passengers, substantially in line with data recorded in the first 6 months of 2014.
The French market grew by 13.7% thanks to the greater capacity offered by Air France (with the introduction of the 138-seat AB318 aircraft) and to a higher number of flights for Paris Orly by Vueling.
The Italian market (with 175,173 passengers) had a 9.8% decrease compared to the same period of the previous year due to the cancellation of flights for Palermo and Catania by Volotea.
The UK market grew by 17.7% (with 91,368 passengers) with the full operation of flights operated by British Airways Cityflyer for London City starting from the summer 2014 and a growth of the load factor of flights operated by Cityjet.
It is worthwhile mentioning the growth of the Dutch and Spanish markets thanks to the increases in flights operated by KLM on Amsterdam and to the start of Iberia operations on Madrid.
10. SIGNIFICANT EVENTS THAT TOOK PLACE DURING THE FIRST 6 MONTHS OF THE YEAR
Infrastructural development of the Florence airport
The 2014-2029 Master Plan, prepared consistently with the Domestic Airport Plan approved by the Council of Ministers after the 30 September 2014 meeting to add the Florence airport to the strategic airports of the European core network, was approved from a technical perspective by ENAC on 3 November 2014. The 2014-2029 Master Plan is subject to the Environmental Impact
26 Assessment procedure (in It. “Valutazione di Impatto Ambientale” or “VIA”) required by Legislative Decree no. 152/2006 and to the requirement of issuing a “Conformità Urbanistica” (document providing evidence of compliance with town planning schemes) pursuant to art. 81 of DPR 616/1977. The Environmental Impact Assessment procedure of the Plan concerned has been started by ENAC on 24 March 2015 at the Ministry of the Environment, Protection of the Territory and the Sea. The 2014-2029 Master Plan contemplates the requalification of the present Florence airport with the development of a new runway for flights, related connections and aircraft apron areas, the development of a new passenger terminal, the related access road network and parking lots, the development of a logistic area in the west area of the airport, and the necessary preliminary works for the development of the new airport system. The Master Plan and the related project insights, accompanied by the Environmental Impact Study, Incidence Report, Landscaping Report, Assessment of Impact on Health and Non-Technical Summary are presently available for free consultation in the website of environmental assessments of the Ministry of the Environment, Protection of the Territory and the Sea (Ministero dell’Ambiente e della Tutela del Territorio e del Mare). Pursuant to the applicable legislation, the term for the submission of observations was 23 May 2015. The Technical Commission of the Ministry of the Environment prepares the preliminary technical document, examines the observations received from the public and the opinions of the other administrations and parties involved. Subsequently, based on the opinion expressed by the Technical Commission, by the Ministry for the Assets and Cultural Heritage of the Region, and the determinations of the other administrations and competent parties in environmental issues, as well as based on the public’s observations, the office in charge with environmental assessments will prepare the draft of the VIA (Environmental Impact Assessment). The office for environmental assessments, based on the specific indications of the Technical Commission that reviews the VIA, on 21 July 2015 asked ENAC to prepare some additional documents to the records to be submitted within 45 days. In this regard, the Provided, on behalf of ENAC, is about to complete the preparation of the additional documents that will be transmitted in the first days of September 2015, as requested. Starting from the date when this additional documentation is submitted to all the Administrations and parties involved, 60 days will be allowed for consultations and for the Public to submit any observation. The VIA is issued within 90 days after the expiry of the term established for the submission of observations.
Works planned to improve and enhance flight infrastructures (runways and connections) in the airport and to mitigate the noise impact on the city of Pisa
The main runway of the Pisa Galileo Galilei airport was reopened on 27 March 2015. The works completed at the date of this document consisted in requalifying the floor of the main runway and developing a new connection between the main and the secondary runways. The run for departure has been advanced with this change, with the consequence of reducing the noise impact on the city of Pisa. The action plan also concerned the improvement of the runway systems and lighting 27 (AVL) to improve airport operations in low visibility conditions and the upgrade of the operating category of the main runway from CAT I to CAT II. The works did not affect the continuity of the airport operations, which have been ensured with the use of the secondary runway. The total completion of the project with the improvement of the carrying capacity of the safety surfaces (strip and R.E.S.A.) is scheduled before the end of 2015, the objective is to reach the “III B” category. The global investment has been of approximately €19M.
2015-2018 Rate Levels for the Galilei airport – Approval by ART - Autorità di Regolazione dei Trasporti (Transport Regulation Authority)
With resolution no. 22 of 12 March 2015, the Transport Regulation Authority (ART) authorized the Pisa airport to apply the new fees regulated for 2015 starting from 16 April 2015. The 2016-2018 scheme contemplates the update, with annual consultations with airport users, of the fees determined on the basis of the final traffic data of each year, investments and quality and environment indicators.
2015-2018 Rate Levels for the Vespucci airport – Approval by ART - Autorità di Regolazione dei Trasporti (Transport Regulation Authority)
With resolution no. 35 of 7 March 2015, the Transport Regulation Authority (ART) authorized the Florence airport to apply the new fees regulated for 2015 starting from 26 May 2015. As for the Pisa airport, the 2016-2018 scheme contemplates the update, with annual consultations with airport users, of the fees determined on the basis of the final traffic data of each year, investments and quality and environment indicators.
11.RESULTS OF OPERATIONS FOR GRUPPO TOSCANA AEROPORTI
INTRODUCTION
As better described in the section called “Merger by Incorporation of Aeroporto di Firenze S.p.a.” provided hereinafter, after the merger the operations of the incorporated (or absorbed) entity have been recognized in TA’s balance sheet for accounting and tax purposes effective from 1 January 2015. So, we point out that any difference in the book values of the two interim reports of Gruppo Toscana Aeroporti at 30 June 2015 and of the TA Group (former-SAT Group) at 30 June 2014 does not quite reflect the real situation because they are affected by the transaction described.
For details on the income statement items, see the Explanatory Notes.
11.1 Consolidated Income Statement
The table below compares the data of the Consolidated Income Statement of the first 6 months of 2015 with those of the first 6 months of 2014.
28
GRUPPO TOSCANA AEROPORTI - CONSOLIDATED INCOME STATEMENT
Abs. Diff. Amounts in €K INTERIM 2015 INTERIM 2014 2015/2014 REVENUES Aviation revenues 38.182 21.581 16.601 Non-Aviation revenues 11.454 7.488 3.966 Revenues from construction services 10.724 1.563 9.161 Other revenue and income 2.882 804 2.078 TOTAL REVENUES (A) 63.242 31.437 31.805 COSTS Consumables 610 381 228 Personnel costs 19.374 10.976 8.398 Costs for services 20.000 12.038 7.962 Sundry operating expenses 919 379 539 Airport leases 2.122 1.673 449 Costs for construction services 10.213 1.488 8.725 TOTAL COSTS (B) 53.237 26.935 26.302 GROSS OPERATING MARGIN (A-B) 10.005 4.502 5.503 % over total revenue 15,8% 14,3% Amortization and write-downs 4.000 2.041 1.958 Provision for risks and repairs 1.774 773 1.001 Bad debt reserve 79 58 22 OPERATING EARNINGS 4.152 1.629 2.523 % over total revenue 6,6% 5,2% ASSET MANAGEMENT Financial income 1.695 110 1.585 Financial expenses -878 -430 -448 Profit (loss) from equity investments 10 0 10 TOTAL ASSET MANAGEMENT 828 -319 1.148 PROFIT (LOSS) BEFORE TAX 4.980 1.310 3.671 Taxes for the period -1.605 -647 -958 PROFIT/(LOSS) FOR THE PERIOD 3.375 663 2.712 Minority Interest’s loss (profit) for the period -7 -19 13 GROUP’S PROFIT/(LOSS) FOR THE PERIOD 3.368 644 2.725 Earnings per share (€) 0,298 0,065 0,232
Notes:
(*) Please note that, in order to offer the reader a greater comparability of the information disclosed in the consolidated financial statement of Toscana Aeroporti at 30 June 2015, some data regarding 30 June 2014 have been altered. The changes made are explained in a specific summarized table in the Explanatory Notes, to which we refer the reader. These changes have been considered as non-significant by the Company.
Pursuant to the recommendations set forth in Consob’s Notice DEM/6064293 of 28 July 2006, we specify that the summarized income statement data shown can be easily reconciled with those indicated in the financial statements. In compliance with CESR Recommendation 05-178b regarding alternative performance indicators, TA, in the Interim Financial Report on Operations, in addition to the financial indicators required by IFRS, presents some indicators derived from the latter, although not required by IFRS (Non-GAAP Measures).
29 These indicators are presented with the purpose of allowing for a better assessment of the Group's management trends and should not be considered as alternative to those required by IFRS. More specifically: - the interim EBIT (Earnings Before Interests and Taxes) coincides with the Operating Result shown in the Income Statement; - the interim PBT (Profit Before Taxes) coincides with the Profit before taxes shown in the Income Statement. As regards the EBITDA (Earnings Before Interests, Taxes, Depreciation, Amortization) or Gross Operating Margins, we point out that it reflects the EBIT before amortization and provisions. In general terms, we point out that the interim results indicated in this document are not defined as an accounting measure under IFRS and that, consequently, the criteria for the definition of said interim results might not be consistent with those adopted by other companies. The table below shows the main income statement results for the period examined. The EBITDA (Gross Operating Margin) of the first 6-month period 2015 is €10M. The EBIT at 30 June 2015 is €4.2M. The result before tax of the first 6 months of 2015 is €5M. Finally, the first 6 months of 2015 was closed with a net Group result for the period of €3,368K, showing an improvement of €2,725Kcompared to the first 6 months of 2014. This period result is also affected by the incorporation of the income statement items of AdF (see, in this regard, the management income statement illustrated below).
* * *
Comparison between Operating Results at 30 June 2015 and Pro-Forma Information at 30 June 2014
In order to offer the reader a better understanding of the tables provided above and a better comparability between data, we provide below the Management Income Statement table at 30 June 2015, with evidence of economic values at 30 June 2015 compared with pro-forma values at 30 June 2014, as per Equivalent Document.
In any case, for details on the income statement at 30 June 2015, see the Explanatory Notes.
30 PRO-FORMA INTERIM Abs. Diff. Amounts in €K INTERIM % Diff. 2015 2015/2014 2014 REVENUES Aviation revenues 38.182 35.649 2.533 7,1% Non-Aviation revenues 11.454 12.492 -1.038 -8,3% Revenues from construction services 10.724 3.709 7.015 189,2% Other revenue and income 2.882 1.281 1.601 124,9% TOTAL REVENUES (A) 63.242 53.132 10.110 19,0% COSTS Consumables 610 1.718 -1.109 -64,5% Personnel costs 19.374 18.476 898 4,9% Costs for services 20.000 17.903 2.097 11,7% Sundry operating expenses 919 910 8 0,9% Airport leases 2.122 1.850 272 14,7% Costs for construction services 10.213 3.532 6.681 189,1% TOTAL COSTS (B) 53.237 44.390 8.847 19,9% GROSS OPERATING MARGIN (A-B) 10.005 8.742 1.263 14,5% % over total revenue 15,8% 16,5% Amortization and write-downs 4.000 3.763 236 6,3% Provision for risks and repairs 1.774 1.736 38 2,2% Bad debt reserve 79 87 -7 -8,6% OPERATING EARNINGS 4.152 3.155 997 31,6% % over total revenue 6,6% 5,9% ASSET MANAGEMENT Financial income 1.695 118 1.577 1332,1% Financial expenses -878 -941 63 -6,7% Profit (loss) from equity investments 10 0 10 N.S. TOTAL ASSET MANAGEMENT 828 -822 1.651 N.S. PROFIT (LOSS) BEFORE TAX 4.980 2.333 2.648 113,5% Taxes for the period -1.605 -1.291 -315 24,4% PROFIT/(LOSS) FOR THE PERIOD 3.375 1.042 2.333 223,8% Minority Interest’s loss (profit) for the period -7 -19 13 -65,6% GROUP’S PROFIT/(LOSS) FOR THE PERIOD 3.368 1.023 2.345 229,3%
Total revenues at 30 June 2015 increased by €10.1M compared to the first 6 months of 2014, corresponding to an increase of +19%. More specifically, a 7.1% increase is recorded in Aviation operating revenues at 30 June 2015, mainly due to the growth in aggregated air traffic (+7.8% in terms of WLU between the two 6- month periods), and a 8.3% decrease in Non-Aviation revenues mainly due to the lack of direct revenues deriving from the sub-concession of direct-management shops in the Florence airport (ARC) starting from 1 October 2014.
The increase in revenues for construction services is mainly due to the higher investments on assets under concession made in the Pisa airport during the period examined (runway and connections for €9,4M). Please note that this revenue component corresponds to the costs incurred for works under concession, increased by a 5% mark-up reflecting the remuneration of internal costs for the general coordination of works carried out by the AdF Group according to IFRIC12 requirements. The contra-entry of this item is the booking of assets under concession (pursuant to IAS 11) among Intangible Assets not under the Group’s control, but in connection to
31 which it has the obligation to perform scheduled and unscheduled maintenance based on the concession for the total management of the two airports.
During the first 6 months of 2015, the other operating revenues were affected by greater contingent assets compared to the first 6 months of 2014. This item includes, for approx. €1.9M, the release in the income statement of the Provision for Liabilities and the write-off of liabilities no longer collectible recognized after updating estimates. More specifically, releases for €0.9M are recorded as a consequence of updates made to the proceeding regarding the controversy on the Fire Protection Service, for whose details we refer the reader to the Explanatory Notes.
Total costs at 30 June 2015 are €53.2M, with an increase of €8.8M compared to the first 6 months of 2014 - +19.9%. The €1.1M reduction in the cost of raw materials, consumables and goods mainly derives from a reduced procurement of goods to be used for sale because, effective from 1 October 2014, the incorporated company sub-leased the direct management of Airport Retail Corners to a primary domestic operator specialized in the management of Duty Free shops, with the purpose of improving profits. The €+0.9M change in Cost of Personnel mainly reflects the impact on the remuneration of employees after the renewal of the CCNL (National Collective Agreement) and, to a lesser extent, the higher number of employees of the Group. The €2.1M change in the costs for services mainly reflects higher marketing support costs, external operating services and professional services rendered in connection with the start-up of Toscana Aeroporti. The increase in costs for construction services is linked, as for the corresponding revenue item described above, to the higher investments made in the Pisa airport.
The other operating expenses increased by €0.3M, mainly reflecting the increase in concession fees after the greater traffic recorded in the 6-month period.
In connection with the aforesaid, the Group’s Gross Operating Margin - corresponding to €10M at 30 June 2015 - increased by approx. €1.3M (+14.5%). Amortization increased by €0.2M due to the higher investments made by the Group in the period examined. Consequently, the Operating Result of the Group - €4.2M at 30 June 2015 - increased by approx. €1M (+31.6%). Financial operations show a positive balance of approximately €1.7M, mainly arising from the sale of the shares held by the former-SAT company in AdF, for €1.42% of the share capital, qualified as “available for sale” and assessed at fair value. This sale was made before the date when the merger was signed and before the effective date of the merger, and generated, in the first 6 months of 2015, financial income for approximately €1.6M, completely realized from third parties. Considering that the transfer of the stake at issue took place before signing the merger and before its effective date, and furthermore it was done with third parties differing from the reference shareholder (Corporación America Italia S.p.a.), the Directors recognized the amount of capital gains in the income statement. After the aforesaid, Profits before Tax passed from €2.3M to €5M, with a +113.5% increase.
32 Taxes for the period have been determined, as required by IAS 34 and IAS 12, by applying the best estimate of the expected weighted average tax rate at period-end. The tax rate of the first 6 months of 2015 - 32.2% - is lower than the 55.3% rate recorded in the first 6 months of 2014 due to the tax allowance introduced by the 2015 Finance Law on the deductibility of IRAP and because the financial income generated by the sale of the former-AdF shares is subject to lower taxation (so- called “Pex regime”). Finally, the Group’s net result for the period increased by €2.3M (+229.3%), passing from €1M to approximately €3.4M, including the financial income of approx. €1.6M obtained with the transfer of the SAT stake in AdF. Net of that income, the Group’s Profit for the period increased by 75.2%.
11.2 Consolidated Statement of Financial Position INTRODUCTION With the merger by incorporation of Aeroporto di Firenze S.p.a. Into SAT S.p.a., the operations of the incorporated (or absorbed) entity have been recognized in SAT’s balance sheet for accounting and tax purposes effective from 1 January 2015. So, we point out that any difference between the book values of Gruppo Toscana Aeroporti at 30 June 2015 and those of the SAT Group at 31 December 2014 does not quite reflect the real situation because they are affected by the transaction described. Therefore, for details on equity items, see the Explanatory Notes. The table below provides a comparison between the Consolidated Statement of Financial Position at 30 June 2015 and the same at 31 December 2014. In order to offer the reader a better understanding of the table provided below and a better comparability of data, we also provide the column of the Pro-forma Consolidated Statement of Financial Position at 31 December 2014, as per Equivalent Document5.
5 Compared to the table published in the Equivalent Document shown in the specific section, items have been grouped and more details were given of equity items. Furthermore, the € 476 K item ”Deferred tax liabilities” was reclassified in the “Sundry loans and other non-current assets” item with the opposite sign. Consequently, the total equity items differ from the Equivalent Document model due to that offsetting. 33 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (amounts in €K)
PRO-FORMA June 30, Dec. 31, DIFF. DEC. 31, ASSETS 2015 2014 2014 NON-CURRENT ASSETS - Intangible assets 149.805 75.860 73.945 141.302 - Tangible assets 26.113 21.064 5.049 26.554 - Equity investments 726 2.273 -1.547 637 - Financial Assets 3.230 2.2980 932 2.018 - Prepaid taxes recoverable beyond the year 2.276 2.032 244 1.607
TOTAL NON-CURRENT ASSETS 182.150 103.526 78.624 172.118
CURRENT ASSETS - Receivables from customers 27.945 13.727 14.218 20.275 - Receivables from associated companies 325 364 -39 364 - Tax receivables 4.293 300 3.993 5.097 - Receivables from others, due within the year 2.744 2.177 567 5.192 - Cash and cash equivalents 25.111 25.091 20 36.845 TOTAL CURRENT ASSETS 60.418 41.659 18.759 67.773 TOTAL ASSETS 242.568 145.185 97.383 239.891 June 30, Dec. 31, PRO-FORMA TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES DIFF. 2015 2014 DEC. 31, CAPITAL AND RESERVES - Group Shareholders' Equity 105.311 66.598 38.713 108.434 - Minority interest 101 138 -37 138
TOTAL SHAREHOLDERS' EQUITY 105.412 66.736 38.676 108.571 MEDIUM-LONG TERM LIABILITIES - Provisions for liabilities and charges 1.968 33 1.935 3.609 - Provisions for repair and replacement 17.096 10.520 6.576 15.702 - Termination benefits and other personnel-related provisions 6.638 4.207 2.431 7.169 - Financial liabilities 42.687 24.700 17.987 35.323 - Other payables due beyond the year 1.839 1.839 0 1.839 TOTAL MEDIUM-LONG TERM LIABILITIES 70.228 41.300 28.928 63.643
CURRENT LIABILITIES - Bank overdrafts 10.535 0 10.535 10.500 - Loans 4.412 2.068 2.344 3.476 - Tax payables 10.045 5.887 4.158 7.665 - Total trade and sundry receivables 41.938 29.195 12.743 46.036
TOTAL CURRENT LIABILITIES 66.929 37.150 29.779 67.677 TOTAL LIABILITIES 137.156 78.450 58.707 131.320 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 242.568 145.185 97.383 239.891
The difference in total assets, increased by €97.4M compared to the total assets of the SAT Group at 31 December 2014, is mainly due to the incorporation of the items of the Assets of former AdF. Non-current assets include a positive difference arising from the investments made by the Group during the first 6-month period, for approximately €12M, and the decrease in the Investments item, for approximately €1.5M, arising from the sale of the shares held by former SAT in AdF before the effective date of the merger. Furthermore, we point out that current assets, the item “Cash and cash equivalents” shows, at Group level, a value at 30 June 2015 substantially in line with the value recorded at 31 December 2014 by the Surviving Entity, in spite of the period investments made during the 6-month period examined and the distribution of dividends for approx. €6.8M.
34 Liabilities and Shareholders’ Equity increased by €97.4M, as for the items of the Assets, after the incorporation of the components of the Liabilities and the Shareholders’ Equity of former AdF. More specifically, the Shareholders’ Equity increased by €38.7M for the combined effect of the reduction of the fair value reserve after the sale of AdF shares (for approximately €1.6M) and of the net capital contribution of the merger by incorporation of the AdF Group (for approximately €41.3M). This amount is shown in the consolidated Shareholders’ Equity table as sum of item “Capital increase for merger by incorporation of AdF” for €14.4M plus item “Other entries arising from the merger by incorporation of AdF” for €26.9M, equivalent to the al Shareholders’ Equity of the AdF Group at 31 December 2014 - €44.2M net of the Dividends distributed before signing the merger for €2.9M. Furthermore, after the SAT capital increase done to complete the incorporation of AdF, reserves were reduced by € 738 K as a consequence of the recognition in the Shareholders’ Equity of costs qualified as expenses incurred for the capital increase after the merger transaction. For further details, see the “Table of differences in Shareholders' Equity”. Medium/long-term liabilities show an increase in Financial Liabilities of approximately €18M arising from both the loan contracted by the Incorporated Entity, for approx. €9.2M, and the further movements regarding the Surviving Entity for €8.8M. This item includes the two medium/long- term loans obtained to open a credit line for a maximum global amount of €60M, of which €20M obtained after the incorporation of AdF, for the investments contemplated in the Group’ Business Plan. After the incorporation of former-AdF’s balance sheet, the total current liabilities at 30 June 2015 show an increase of approximately €29.8M. Furthermore, we point out that the amount of “Bank overdraft”, for €10.5M, regards the short- term credit lines granted to the TA Group and the “Loans” item, for a total of €4.4M, includes the current portion of medium/long-term indebtedness of the TA Group.
35 INVESTED CAPITAL
The table below compares the summarized data of the capital invested at 30 June 2015 with those at 31 December 2014. Comment on the differences shown follow.
CONSOLIDATED CONSOLIDATED 2015/2014 Amounts in €K JUN. 30, DEC. 31, 2014 Abs. Diff. NON-CURRENT ASSETS 182.150 103.526 78.624
NET WORKING CAPITAL -16.676 -18.514 1.839 MEDIUM/LONG-TERM LIABILITIES -27.540 -16.599 -10.941
INVESTED CAPITAL 137.934 68.413 69.522 SHAREHOLDERS' EQUITY 105.412 66.736 38.676 NET FINANCIAL INDEBTEDNESS 32.523 1.677 30.846
Fixed assets increased by €78.6M, substantially after incorporating the balance sheet items of former AdF and the investments made during the period examined for an aggregate amount of €12M, which includes the improvement and enhancement of flight infrastructures in the Pisa airport (runways and connections) for approx. €9.4M. The net working capital - approx. €16.7M at 30 June 2015 - is reduced by €1.8M for the effect of the incorporation of the net working capital of former AdF and of the seasonal nature of the business. Non-financial medium/long-term liabilities increased by approximately €10.9M, mainly for the effect of the increase in the non-current portion of the Provision for Repair and Replacement (€6.6M), of the Provision for Liabilities (€1.9M) and of Termination Benefits (€2.4M) after the incorporation of the net working capital of former AdF. For the effect of the movements described above, the Invested Capital of the TA Group at 30 June 2015 is increased by €69.5M compared to 31 December 2014, with a balance of approx. €138M at 30 June 2015.
11.3 Analysis of Cash Flows
The Consolidated Statement of Cash Flows illustrated below was prepared using the indirect method as defined by IAS 7 which shows the main determining factors of the movements in the cash and cash equivalents that took place during the reporting periods. As can be observed, cash flow operations are positive at 30 June 2015, with €25.1M. This item is affected by the incorporation of the balance sheet items of former AdF and by the management and investment activities of the first 6 months of 2015.
36 INTERIM 2015 INTERIM 2014 A- Net initial cash and cash equivalents (°) 36.845 12.559 B- Cash flowS from operating activities Net result for the period (°°) 3.375 663 Amortization of intangible assets 2.439 1.139 Depreciation of tangible assets 1.560 902 Changes to provision for termination benefit provision 52 75 Actuarial gain/loss (363) 0 (payments) (220) (143) (Increase) decrease in trade and sundry receivables (5.128) (6.710) (Increase) decrease in prepaid and deferred taxes (669) (56)
Increase/(decrease) in payables to suppliers and others (4.470) (7.380)
Increase/(decrease) in tax liabilities (°°°) 2.380 1.474 Investment income (1.638) 0
Changes in provisions for repair and replacement
provision 2.020 957 use (622) (287)
Changes in provisions for liabilities and charges
provision 6 58 use (1.676) (77) Total (B) (2.954) (9.387) C- Cash flow from/(for) investments
(Inv.) in non-current intangible assets (1.192) (459)
Disinvestment/reclassification of non-current tangible assets 118 0
(Investments) in non-current intangible assets (10.873) (1.625)
Realisable value from transfer of Stakes to other entities 1.766 0
(Investments) in securities and other financial assets (69) 2.187
Total (C) (10.250) 103 D- Cash flow from/(for) financial assets Medium/long term loans 10.000 11.412 Reimbursement of medium/long term loans (1.700) (852) Distribution of dividends (°°°°) (6.830) (887) Total (D) 1.470 9.673 E- Year’s cash flows (B+C+D) (11.734) 388
F- Net final cash and cash equivalents (A+E) 25.111 12.947
(°) The balance of initial cash includes the balance as at Jan. 1, 2015 of the AdF Group for € 11,754 K.
(°°) The result for the period includes interest payable for € 575 K (€ 446 K in the first half of 2014).
(°°°) Taxes paid in the first half of 2015 are € 2,017 K (€ 1,026 K in the first half of 2014).
(°°°°) of which ex-AdF dividends for € 2,945 K.
More specifically, the items of the Consolidated Statement of Cash Flows at 30 June 2015 include:
€1.77M regarding the realizable value from transfer of the AdF (Aeroporto di Firenze) stake, corresponding to 1.42% of the share capital, with the consequent sale of 128,599
37 shares finalized on 6 May 2015, which determined a financial income of €1.6M; The repayment in principal of €1.7M for the medium/long-term loans obtained by the Group; The draw-down of €10M for the medium/long-term loan of €40M to face the investments made during the 6-month period examined for the Pisa airport. Dividends have been distributed in May 2015 for a global amount of €6.8M after the result obtained at 31 December 2014 by the Surviving Entity for €3.9M and by the Incorporated Entity for €2.9M; Approx. €12M were invested in the first 6 months of 2015 in airport infrastructures, of which €9.4M for the enhancement of the flight infrastructures of the Pisa airport.
11.4 Consolidated Net Financial Position
For the sake of complete disclosure, we provide below the Consolidated Net Financial Position at 30 June 2015 and at 31 December 2014 in compliance with the provisions set forth in Consob’s Notice prot. no. 6064293 of 28 July 2006. In order to offer the reader a better understanding of the table provided below and a better comparability of data, we also provide the column of the Pro-Forma Consolidated Net Financial Position at 31 December 2014, as per Equivalent Document.
38 Consolidat Pro-forma Consolidated 2015/2014 Amounts in €K ed DEC. 31, 31.12.2014 Abs. Diff. 30.06.2015 2014 A. Cash on hand and at banks 25.111 25.091 20 36.845 B. Other cash and cash - - - - C. Securities held for - - - - trading D. Liquid assets (A) + (B) + 25.111 25.091 20 36.845 E. Current financial - - - - F. Current bank payables 10.535 - 10.535 10.500 G. Current portion of non- 4.412 2.068 2.344 3.476 current indebtedness H. Other current financial payables due to leasing - - - - companies I. Current financial 14.946 2.068 12.878 13.976 indebtedness (F) + (G) + (H) J. Net current financial (10.165) (23.023) 12.859 (22.869) indebtedness (I) - (E) - (D) K. Non-current bank payables 42.687 24.700 17.987 35.323 L. Bonds issued - - - -
M. Other non-current payables - - - - due to leasing companies
N. Non-current financial 42.687 24.700 17.987 35.323 indebtedness (K) + (L) + (M) O. Net financial indebtedness 32.523 1.677 30.846 12.454 (J) + (N) (NFI)
The items shown in the net financial position are affected by the incorporation of former AdF’s balance sheet items.
We point out the presence, at 30 June 2015, of current bank payables for € 10.535 K regarding the short-term credit lines granted to the Incorporated Entity. Furthermore, current financial receivables include the current portion of the medium/long-term indebtedness of the TA Group, for a global amount of €4.4M.
In addition, the item “Non-current bank payables” shows an amount of €42.7K, which corresponds to the non-current portion of the two loans obtained for a credit line of a maximum global amount of €60M, to be used for the investments scheduled in the Company's Business Plan. We point out that, at 30 June 2015, the Surviving Entity drew down €10M using up the entire available amount of €40M of the loan. Furthermore, during the 6-month period examined, portions of capital were repaid as established in the two loan agreements for a global amount of €1.7M. For further details, see section “Financial Liabilities” in the Explanatory Notes of the Interim Financial Report.
We point out that the “Cash and Banks” item includes:
39 a) a minimum amount of €1M, available and deposited in a current account pledged as collateral for the medium-/long-term Loan Agreement stipulated with the Intesa-San Paolo-MPS bank pool; b) an amount of approx.€2.2M, collected by the incorporated AdF on March 18, 2013 from the Ministry of Transport after the pronouncement of judgment no. 2403/2012 as compensation for the damage suffered for the non-adjustment of rights in the years 1999-2005, plus monetary revaluation and legal interests. By writ of summons to appeal, the Attorney General’s Office summoned AdF (today “TA”) to appear before the Rome Court of Appeal, seeking the overturning of the appealed judgment of the Court of Rome no. 2403/2012, finding that the ordinary courts lacked jurisdiction, and a ruling that no sums are owed by the Ministry that filed the appeal by way of compensation for failure to update airport fees. As a result, as required by international accounting standards (IAS 37), the amount referred to above has not had nor will it have any impact on the Group's income statement until the final proceedings. In any case, in view of the principle of prudence that constantly guides the management, said amount has been deposited in a separate deposit account, where it will accrue interest that will in turn by reinvested, and not used until the final assignment to the Parent Company with the last level of justice.
The consolidated Net Financial Position at the closing date (30 June 2015) is €32.5M, up by €30.8M compared to 31 December 2014. This increase is substantially due to the incorporation of the balance sheet items of former AdF and to the further loan draw-down by the Surviving Entity.
Finally, we point out that the consolidated financial indebtedness at 30 June 2015, if compared to the same item at 31 December 2014 (pro-forma), shows an increase of approx. €20M mainly for the distribution of dividends and the period’s investment activity described above.
12. THE GROUP’S INVESTMENTS
The Group’s investments at the end of the first six months of 2015 amount to €11.9M, of which €10.87M regarding intangible assets and €1.07M tangible assets. Investments in intangible assets mainly refer to concession rights acquired after the investments made for the enhancement of maneuvering areas in the Pisa airport (€9.4M). The increase in work in progress mainly reflects the development of the Master Plan for the Florence airport (€559K) and extension works in the aircraft apron areas in the Florence airport (€431K). Investments in tangible assets mainly refer to works in the Pisa airport for the delocalization of Borgo Cariola (€380K) and the purchase of cars and ramp vehicles (€302K), the development of new advertising facilities (€38K) and the purchase of hardware (€44K). Pursuant to art. 10 of Law 72/83, the Group informs the readers that no revaluation was made to its assets pursuant to any special law in the first 6 months of 2015. The table below provides details on the investments of the TA Group at 30 June 2015:
40 Amounts in €K Sub-tot Sub-tot Sub-tot Total Total Group Investment at Jun. 30, 2015 11.947 A) Amortization of intangible assets 10.873 - Software 121 - Concession rights 9.547 Improvement of manoeuvering areas in PSA apt 9.403 Requalification of commercial areas 70 Requalification of hangar S52/Arrivals hall 37 Other minor entries 38 - Assets under construction 1.205 Development of 2017-2029 Master Plan for FLR apt 559 Expansion of aircraft aprons in FLR apt 431 New passenger terminal in FLR apt 139 New East Terminal Lot 1 (Arrivals) in PSA apt 21 Other minor entries 55 B) Tangible assets 1.074 - Land and buildings (*) 385 Delocalization of Borgo Cariola at PSA apt 223 Requalification of "Via Cariola" (rental car building) 157 Other minor entries 5 - Cars 59 Sw eeper 20 Requalification of ramp vehicles 23 Cars 16 - Ind. and comm. equipm. 23 - Plant and machinery 451 ETDS security 110 Self-propelled tapes 67 dollies 67 Lifter 39 New passenger areas 39 Advertising equipment 38 Automatic pay parking 28 Requalification of ramp vehicles 16 VIP lounge 26 Other minor entries 22 - Assets under construction 77 - Other assets 79 Electronic machines (HW) 44 Furniture and fittings 36
(°) Toscana Aeroporti's land and buildings
41 13. HUMAN RESOURCES
INTRODUCTION With the merger by incorporation of Aeroporto di Firenze S.p.a. into SAT S.p.a., the operations of the Incorporated (or Absorbed) Entity have been recognized in SAT’s balance sheet for accounting purposes effective from 1 January 2015. So, we point out that any difference between the book values of Gruppo Toscana Aeroporti at 30 June 2015 and those of SAT Group at 31 December 2014 does not quite reflect the real situation because they are affected by the transaction described.
The Group’s Staff
The table below provides details on the average annual staff (expressed in Equivalent Full Time) for the first 6 months of 2015 and any difference from the same period of 2014:
of which of Interim Interim % Pisa which 2015 2014 Florence Executives 10,5 9,0 +1,5 +16,7% - +1,5 Employees 491,0 286,2 +204,8 +71,6% +5,9 +198,9 Workers 191,8 94,7 +97,1 +102,5% +2,5 +94,6 TOSCANA 693,3 389,9 +303,4 +77,8% +8,4 +295,0 AEROPORTI
Jet Fuel 10,0 12,0 -2,0 -16,7% -2,0 -
Total Group 703,3 401,9 +301,4 +75,0% +6,4 +295,0
Note: 2 part-time units are considered as 1 full-time unit.
In the first 6 months of 2015, the average TA staff increased in absolute terms by 303.4 EFT compared to the same period of 2014, mainly for the effects described in the introduction.
Compared to 30 June 2015, the number of employees of the subsidiary Jet Fuel, which manages the fuel storage facility in the airport, recorded a decrease of 2 EFT. We remind the readers that the subsidiary “Parcheggi Peretola S.r.l.” has no directly employed staff.
The cost of personnel for the Group at 30 June 2015 is €19.4M, up by €8.398K compared to the same period of the previous year. This increase is also mainly the consequence of the effects described in the introduction.
42 14. RELATIONSHIPS WITH THE OTHER ENTITIES OF THE GROUP AND WITH RELATED PARTIES
At 30 June 2015 the TA Group held interests in the following other associated companies:
- Immobili A.O.U. Careggi S.p.a. (a company incorporated to manage the commercial facilities installed in the new entrance of the Careggi Hospital of Florence – so-called “NIC” – stake held by TA: 25.00% of the share capital (25% at 31 December 2014). Incorporated on May 11, 2012 between Azienda Ospedaliera Universitaria Careggi (owner of 75%) and SAT. It has its registered office in the Careggi Hospital of Florence and an administrative office at the Pisa Galilei airport. At 31 December 2014, this associated company had a share capital of € 200 K (fully paid-up), recorded revenues for € 637 K (€ 356 K in 2013) and closed its 2014 year with profits for € 155 K and a Shareholders’ Equity of € 409 K. At 30 June 2015, TA had a service agreement in place with this associated company for administrative/management staff activities, for a global value of € 45.5 K for the first 6-month period.
Alatoscana S.p.a. (entity that manages the Elba Island airport) - stake held by TA: 13.27% (13.27% at 31 December 2014) of the share capital. In 2014, Alatoscana S.p.a. reported revenues for €1.19M (€1.09M in 2013) and closed the year with net profits for €37K and a Shareholders’ Equity of €2.84M. At 30 June 2015, TA, in continuity with previous years, had a service agreement in place with this associated company for staff activities, for a global value of € 20 K for the first 6-month period.
At 30 June 2015, relationships existed with the following related parties:
Delta Aerotaxi S.r.l. A purchase contract for TA for the scheduled maintenance and safeguarding of the hanger sub-licensed to Delta Aerotaxi in the Florence airport generated € 17 K of costs at 30 June 2015 . A number of sale agreements between TA and Delta Aerotaxi S.r.l. are in place for: the sub-licensing of offices, hangers and other types of spaces in the Florence airport, with € 66 K of revenues for TA at 30 June 2015 ; the sub-licensing of hangar and aircraft maintenance services, as well as other ancillary services, to third parties in the Florence airport, with global revenues of € 44 K at 30 June 2015; the sub-licensing of offices and other types of spaces located in the Pisa airport for global revenues of € 25 K for TA at 30 June 2015; revenues of € 88 K for the invoicing of airport fees and taxes concerning general aviation in the Pisa airport and approx. € 1 K regarding the provision of extra- handling services upon request. Lastly, the report shows further €3K of revenues for said related party regarding the charge-back of utilities and insurance expenses due under the existing agreement, as well as for parking passes and airport permits in the two airports.
- Corporate Air Services S.r.l. An agreement exists between TA and Corporate Air Services S.r.l., the company that
43 manages general aviation in the Florence airport, which succeeded Delta Aerotaxi S.r.l. starting from 11 June 2007 and is indirectly associated with TA through SO.G.IM. S.p.a., a TA Shareholder, for the sub-concession of that activity for €44K of global revenue at 30 June 2015. In addition, at 30 June 2015 TA accrued the following items from the related party Corporate Air Services S.r.l., at 30 June 2015: € 223 K revenues for the invoicing of airport fees and taxes, handling and centralized infrastructure expenses concerning general aviation in the Florence airport, and approx. € 1 K for the provision of extra-handling services upon request and for the delivery of de-icing liquid; the sub-licensing of offices and other types of spaces located in the Pisa airport for global revenues of € 25 K for TA at 30 June 2015; € 2 K revenues relating to the charge-back of insurance expenses for third-party liability coverage and PPR penalties of the Florence airport.
- Delifly S.r.l. On 13 June 2007, AdF (today TA) and Delifly S.r.l. (a related party through SO.G.IM. S.p.A) entered into an agreement whereby AdF (today TA) undertook to sub-license to Delifly from 1 September 2007 until 31 December 2015 an area of approximately 122 sq.m., which Delifly was to use exclusively for installing a moveable item to provide catering services for general aviation in the Florence airport, with € 2K revenues at 30 June 2015 . In return for the sub-licensing of the area described above and the associated catering services, Delifly has been paying TA, for the entire term of the agreement, a sum determined on the basis of the agreed guaranteed minimum and the applicable Rates for assets under exclusive use, with revenues accrued for € 7 K at 30 June 2015. Lastly, the Group accrued a further €2K of other revenues from Delifly S.r.l. for the charge- back of utilities and third-party liability insurance coverage expenses and from the assignment of parking passes and airport permits in the two airports.
- ICCAB S.r.l. ICCAB S.r.l. is a related party of TA since the Member of TA’s BoD, Mr. Saverio Panerai, exercised a significant influence on ICCAB S.r.l. pursuant to the regulation on related-party transactions adopted by CONSOB. We point out that AdF (today TA) sub-licensed ICCAB until 31 December 2015 an area of approximately 40 sq.m. located in the Florence airport to be used by ICCAB for sale activities, with € 25 K revenues at 30 June 2015 . A contract is in place between AdF (today TA) and ICCAB for the sub-licensing of advertising spaces in the Florence airport, with revenues of € 18 K at 30 June 2015 . A contract is in place for the sub-licensing of a space located in an air-side area of the Pisa airport used by ICCAB for sale activities, with € 35 K revenues at 30 June 2015. Finally, at 30 June 2015, the Group had accrued additional € 2 K revenues from ICCAB S.r.l. for the charge-back of utilities.
- Corporación America Italia S.p.a. TA entrusted this related party with technical-operational consulting tasks, consisting in providing advice based on the expertise and knowledge of methodologies in the field of
44 airport infrastructure planning and development, which cost TA €29K at 30 June 2015 .
- Comune di Firenze (Municipality of Florence) A contract is in place between AdF (today TA) and the Municipality of Florence for the sub-licensing of office premises for tourist information activities covering a surface of 13 sq.m. located at the land-side ground floor of the Florence airport, which produced approximately € 2 K of revenues at 30 June 2015.
- A.L.H.A. S.p.a. A contract is in place between AdF (today TA) and A.L.H.A for the sub-licensing of office premises covering a surface of 264 sq.m. located at the land-side ground floor of the Florence airport, which produced approximately € 17 K revenues at 30 June 2015.
- PisaMo S.p.a. This is a in-house company of the shareholder “Comune di Pisa”. At 30 June 2015, TA had residual receivables for € 427 K (€ 427 K at 31 December 2014) from this related party. The Directors consider this account receivable irrelevant under the risk perspective because it is covered by a European fund already approved and presently being transferred to PisaMo through the Municipality of Pisa.
- Pacini Editore S.p.a. Pacini Editore S.p.a. is a related party of TA because the Member of the TA Board, Mr. Saverio Panerai, has a significant influence on Pacini Editore S.p.a., pursuant to the regulation on related-party transactions adopted by CONSOB. The residual account receivable of € 11.3 K at 30 June 2015 has been extinguished at the approval date of this report.
It should be noted that the terms and conditions governing transactions with parties identified as related parties are defined in agreements entered into at normal market conditions. For further details, see “Annex C” in the Explanatory Notes on this Interim Financial Report.
Finally, we point out that no atypical transaction with related parties took place the first 6 months of 2015.
15. MAIN INFORMATION ON SUBSIDIARIES / CONTROLLED ENTITIES
15.1 Parcheggi Peretola As already described in the “Consolidation Area” section of the Explanatory Notes, Parcheggi Peretola S.r.l. is an entity that entered in the TA Group after the incorporation of AdF, which owned 100% of its shares. The prevalent activity of this company is the management of a 640-slot payment car parking lot for the public in front of the Departures Terminal of the Florence airport. The Subsidiary prepares its financial statement in compliance with the applicable legislation. For the Condensed Consolidated Interim Financial Report, the financial statement of this Subsidiary is
45 appropriately adjusted to take into account the impact deriving from the application of international accounting standards. Book values at 30 June 2015 show revenue accounts (value of production) of € 735 K, up by € 58 K compared to 30 June 2014. The Gross Operating Margin (EBITDA) at 30 June 2015 was € 435 K, up by € 75 K, and Net Profits for the period were € 273 K, up by € 134 K compared to the corresponding period of the previous year. The Subsidiary prepares its financial statement in compliance with the applicable legislation. For the sole purpose of issuing the Condensed Consolidated Interim Financial Report of the Subsidiary, its financial statement has been adjusted to take into account the impact deriving from the application of international accounting standards. The table below is a summarized income statement prepared according to the applicable standards. PARCHEGGI PERETOLA - INCOME STATEMENT
INTERIM INTERIM 2015/2014 Amounts in €K 2015 2014 Abs. Diff. REVENUES Aviation revenues 735 677 58 Other revenue and income 0 0 0 TOTAL REVENUES (A) 735 677 58 COSTS Consumables 0 0 0 Personnel costs 0 0 0 Costs for services 272 289 -17 Sundry operating expenses 28 28 0 Airport leases 0 TOTAL COSTS (B) 300 317 -17 GROSS OPERATING MARGIN (A-B) 435 360 75 % over total revenue 59,2% 53,2% Amortization and write-downs 34 34 0 OPERATING EARNINGS 401 326 75 % over total revenue 54,6% 48,2%
Asset management 0 0 0 Non-recurring operations -1 -2 1
PROFIT (LOSS) BEFORE TAX 400 324 76 Taxes for the period -127 -185 58 PROFIT/(LOSS) FOR THE PERIOD 273 139 134
In the Income Statement, the prevalent portion of revenues refers to parking lots, which have been recognized among revenues from sales and services for € 656 K. On the cost side, the most important component is the cost of the parking lot management and maintenance service provided by SCAF S.r.l.
46 15.2 Toscana Aeroporti Engineering
Toscana Aeroporti Engineering S.r.l. Was incorporated on 15 January 2015 and is 100% owned by the TA Group. Its business purpose is the provision of engineering and airport development support services for a minimum period of three years, exclusively in the favor of TA for the development of infrastructures in the Florence and Pisa airports. At 30 June 2015, this subsidiary was not operating, so it was not included in the Consolidation Area.
15.3 Jet Fuel
Jet Fuel Co. s.r.l.is the entity that manages the centralized fuel storage facility of the Pisa airport. The stake held by TA is 51.0% of voting rights, while property and dividend rights are exercised in identical portions by the other shareholders, Refuelling S.r.l. and Air BP Italia S.p.a. For consolidation purposes, a 33% share was considered as portion of equity and result of the TA Group for the first 6 months of 2015 and 2014. Jet Fuel was incorporated on 27 January 2009 and started its storage and into-plane service activity in the second half of May 2013.
At 31 December 2014, Jet Fuel had a share capital of € 150 K, reported profits for the year of € 177 K and had a Shareholders’ Equity of € 287 K. At 30 June 2015, Jet Fuel had a sub-licensing agreement in place with TA for the management of the centralized fuel storage facility for a global value of € 276 K and an administrative services service for € 10 K.
A total of 37,713 cubic meters of jet fuel passed through the storage facility during the first 6 months of 2015, with a 11% volume decrease compared to the 42,337 cubic meters of 30 June 2014. The company provided into-plane services for 29,869 cubic meters of fuel, with a 7% reduction compared to the 32,104 cubic meters of 30 June 2014.
The Subsidiary prepares its financial statement in compliance with the applicable legislation. For the sole purpose of issuing the Condensed Consolidated Interim Financial Report of the Subsidiary, its financial statement has been adjusted to take into account the impact deriving from the application of international accounting standards. The table below is a summarized income statement prepared according to the applicable standards.
47 JET FUEL - INCOME STATEMENT
INTERIM INTERIM 2015/2014 Amounts in €K 2015 2014 Abs. Diff. REVENUES Aviation revenues 943 995 -52 Other revenue and income 8 11 -3 TOTAL REVENUES (A) 950 1.006 -55 COSTS Consumables 48 41 7 Personnel costs 348 356 -7 Costs for services 250 243 7 Sundry operating expenses 2 3 -1 Airport leases 276 302 -26 TOTAL COSTS (B) 925 945 -20 GROSS OPERATING MARGIN (A-B) 25 60 -35 % over total revenue 2,7% 6,0% Amortization and write-downs 20 22 -2 OPERATING EARNINGS 5 38 -33 % over total revenue 0,6% 3,8%
Asset management -2 -1 -1 Non-recurring operations -1 0 -1
PROFIT (LOSS) BEFORE TAX 2 38 -36 Taxes for the period -1 -7 6 PROFIT/(LOSS) FOR THE PERIOD 1 31 -30
The main revenues of Jet Fuel (Aviation) the first 6-month period 2015 consists of € 535 K (€ 552 K at 30 June 2014) from the fuel storage service and € 398 K for the into-plane service (€ 428 K at 30 June 2014). The main costs of the first 6-month period 2015 have been the cost of labor (€ 348 K), the airport sub-lease (€ 276 K), the rental of tank lorries (€ 85 K), maintenance and fuel tank lorries (€ 39 K), system maintenance (€ 26 K), industrial insurance (€ 25 K), depreciation (€ 22 K).
As a consequence, the result for the period for 2015 shows profits for the period of € 1 K, with a sharp decrease compared to the profits for the 30 June 2014 period, mainly due to the smaller volume managed by the storage facility and to the reduced into-plane services provided, as specified above.
48 16. MAIN RISKS AND UNCERTAINTIES TO WHICH THE GROUP IS EXPOSED
The main risk factors that may affect the management trends of the Group are explained below:
OPERATING RISKS
Risks associated with the general conditions of the economy
The main factors that may affect operations in the transport sector where the Group operates are, inter alia, the gross domestic product (GDP), the business and consumer confidence level, the unemployment rate and the oil price. The downturn of the domestic and international economy that started in the second half of 2008 is continuing and its effects were still felt in the first months of 2015. More specifically, the oil price has been decreasing but is still high and the credit crunch, the high unemployment rate, the reduction in the available income for families in real terms and the consequent decrease in consumption may adversely affect the demand for air transport. Should this weak economy persist, we cannot exclude a negative impact on the economic situation of the Group. In any case, the recent significant increase in passenger traffic recorded in 2013 and 2014 by the two airports, which was also confirmed for the first two months of 2015, shows that the Group has promptly reversed the decreasing traffic volume trends of the last few years, thus proving the great attractiveness of this territory - a factor that certainly helps mitigate the risk.
Risks associated with airport handling activities and the extremely competitive layout of the related market
Airports with a traffic exceeding 2 million passengers or 50,000 tons of goods are recognized free access to the “ground assistance services” market (Leg. Dec. no. 18/99). To date, in the Pisa and Florence airports, these services are mostly provided by the same entity that manages the airport. At present, the only handling activity to be carried out by providers of ground assistance services other than TA in the two airports is the general aviation business. At 30 June 2015, the revenues generated by the handling business account for 19.1% of total revenues (23% over the total, net of revenues for construction services). The market where the providers of handling services operate is typically characterized by a high level of competitiveness, as well as by a limited profitability in terms of operating income. The greater competitive pressure, on one hand, and the typical low profitability of these activities, on the other, could adversely affect the capacity of the two airports to increase their revenues and profits, which might negatively affect the entire business and growth perspectives of the TA Group, as well as its global financial standing.
REGULATORY RISK
The Parent Company, within the framework of the two concessions for the global management of the Pisa and Florence airports, operates in a sector regulated by domestic and international legislation. Any unpredictable change in the regulatory framework might adversely impact the bottom line of the TA Group.
The Galileo Galilei airport is positioned very close to the city of Pisa, adjacent to residential buildings bordering the eastern aircraft apron area and in the proximity of the northern end of the
49 secondary runway. In this regard, a Planning Agreement was signed on December 19, 2013 by all the parties involved6to lay the basis for a process of delocalization of the buildings located in that area. This Planning Agreement establishes that the delocalization of the residential buildings of the area identified above be completed within a maximum time span of 3 years. The first step of this process has already been concluded, with the notification to the owners of the buildings of the requests to comply with a voluntary assignment scheme. At the date of this report, more than half of the transfer agreements for the buildings have been signed by the owners and demolition works are at an advanced stage.
A potential risk factor of the airport sector is the constant evolution of the specific legislative and regulatory scenario where the Parent Company, like the other airport operators, operates. The Company's financial results are affected by the developments in the regulatory framework, particularly as regards the airport services tariff regulations and the fee system for the services offered by airport operation companies. In this regard, we specify that the preliminary stages for the definition with the new Transport Authority of the new rate levels for the regulatory period 2015-2018 have been positively concluded for both the Pisa and Florence airports. In fact, the Pisa airport has started applying the new rates since April 16 and the Florence airport has started since 26 May 2015.
RISKS ASSOCIATED WITH RELATIONSHIPS WITH EMPLOYEES AND TRADE UNIONS
The Parent Company operates in an industrial context characterized by a significant presence of trade unions and is potentially exposed to the risk of strikes and interruptions in its production activities. In the recent past of Toscana Aeroporti no significant block of the service due to strikes occurred at either Pisa or Florence airports. In order to avoid the risk of these disruptions as far as possible, TA is taking a stance aimed at fostering an open discussion and dialogue with trade unions. In witness of this attitude, it is worthwhile mentioning the signature in April 2015, after a discussion which took place pursuant to art. 47 of Law 428/1990 between the incorporating entities SAT and AdF and Trade Unions, of two specific agreements related to the merger, namely a report on a joint review and complementary corporate agreement with the trade unions CGIL-CISL-UGL-UIL and a report on a joint review with the independent trade union “USB”. These agreements allowed for an efficient, effective and risk-free management of the merger and the subsequent (still ongoing) corporate integration steps without strikes or interruptions in airport services.
RISKS ASSOCIATED WITH DECREASING AIRPORT TRAFFIC AND WITH THE CONCENTRATION OF CERTAIN CARRIERS
As for the other operators of the sector, even for the Parent Company the possible reduction or termination of flights by one or more carriers, even as a consequence of a possible economic/financial crisis of their business organizations, might significantly impact the bottom line of the TA Group.
6 Planning Agreement stipulated between Toscana Aeroporti S.p.a., Ministry of the Infrastructure and Transport, Ministry of Defence, Ministry of the Economy and Finance, the National Civil Aviation Agency, the Regional Government of Tuscany, the Province of Pisa and the Municipality of Pisa.
50 At 30 June 2015, TA reported 3,316,527 passengers. The total incidence of the first three carriers is 60.3%. More specifically, the incidence of the first carrier is 42.8%, while the incidences of the second and third carriers are 8.9% and 8.6%, respectively. The Parent Company also signed with said carriers multi-year trade agreements that contemplate a commitment from the carrier to promote marketing and advertising campaigns and achieve pre- established objectives in terms of passengers and flights against the Parent Company’ commitment to contribute to their expenses and grant economic incentives for the achievement of the aforesaid objectives (“Success Fees”). These agreements also establish that penalties be imposed in case of cancellations not caused by force majeure events. On the other hand, the Parent Company, based on past experience - while there can be no certainty in this field - is convinced that the risk of a reduction or interruption in flights by one or more carriers could be faced with a probable redistribution of passenger traffic among the various airlines operating in the airport and with its capacity to attract new carriers. However, we should not exclude the likelihood that, notwithstanding the implementation of the aforesaid remedial measures, a certain amount of time might elapse between the interruption of flights and their replacement by other carriers and that this interruption might, in any case, negatively impact the operations and earnings of the Parent Company. In order to minimize the risk of traffic concentration on some carriers, the Parent Company, albeit in the context of a sector, such as the air transport sector, characterized by integration and merger processes between carriers, is pursuing a strategy of diversification of the airlines operating in the two airports.
RISKS ASSOCIATED WITH DEPENDENCE ON KEY PERSONNEL
The Parent Company believes that its operating and management structure is such as to ensure continuity in the management of its corporate affairs. Furthermore, the Parent Company has started a process of development of human resources in view of a Succession Plan. However, should one or more key staff of the Parent Company, such as the CEO and General Director or other senior/Top Management members, terminate their cooperation with the company, there could be a negative impact on the perspectives, business activities and economic/financial results of the Parent Company. Furthermore, the Board of Directors of the Parent Company, during its meeting held on 4 February 2014, approved a proposal for an agreement with the General Director to increase the loyalty of this important strategic key person for the company. This agreement, for a term of 36 months, contemplates the application of a penalty in case of early termination of the employment agreement by the executive and, simultaneously, the recognition of an indemnity for the executive in the event of termination of the employment agreement (with the exclusion of termination for just cause) after a decision made by the Parent Company.
ENVIRONMENTAL RISKS
The activities of the Group are regulated by many European Union regulations and domestic, regional and local legislation on the protection of the environment. The Group has the priority of carrying out its activity in compliance with the applicable environmental legislation; however, since the risk of environmental liability is intrinsic to the activity of the Group, there can be no certainty that any new future regulations may not involve further regulatory requirements for the Group. As regards financial risks, see the specific section in the Explanatory Notes.
51 17. SIGNIFICANT EVENTS OCCURRED AFTER THE CLOSING OF THE PERIOD AT 30 JUNE 2015
- The Shareholders’ Meeting and the meeting of the Board of Directors of Toscana Aeroporti S.p.a. Took place on 15 July 2015 and included the appointment of the new top management of the company with the related proxies. For further details, see sections “Parent Company’s Shareholding” and “Composition of Corporate Governing Bodies” in this Report. - In July 2015, €6M were repaid against the short-term loan of €10.5M for a better management of the liquidity of the Group.
Main news on the operations of the Florence airport - Vueling has been operating a weekly flight to/from Tel Aviv since 4 July 2015. - British Airways Cityflyer has increased its flights to/from London City in July and August by passing to a frequency of 9 flights (from 6). - KLM increased its operations by adding 2 weekly flights to the 2 daily flights scheduled for the winter. - BlueAir confirmed the three-weekly flight to Bucharest Otopeni for the winter.
Main news on the operations of the Pisa airport - Delta Air Lines continues operating its 6 weekly flights in the July-August period. - Alitalia continued operating on Rome Fiumicino with 24 weekly flights against the 21 flights operated last November and December. - Turkish Airlines continued its flights to/from Istanbul with 5 flights per week (+1 weekly frequency compared to the last winter season).
18. OUTLOOK
During the 6-month period examined, the Tuscan Airport System carried 3.3 million passengers, for an aggregate growth of 7.3% for the Passengers component against an annual average of 3.7%.
In the month of July, the Tuscan Airport System reported a total traffic of 821,148 passengers, with a 1.0% growth with respect to the same month of 2014.
Year-to-date data regarding the first 7 months of the year show a 6.0% increase compared to the same period of 2014, for a total of over 4.1 million passengers passed through the Pisa and Florence airports since the beginning of the year.
This result has been supported by the positive trends in the Load Factor of scheduled flights, increased by 3 percentage points compared to the first 7 months of 2014 (from 77.2% to 80.2% in the first 7 months of 2015).
Pisa Galileo Galilei airport Over 2.7 million passengers passed through the Pisa Galilei airport in the first 7 months of the year (1 January – 31 July 2015), with a 4.6% increase compared to the same period of 2014 (with approx. +120,000 passengers).
52 The Pisa Galilei airport closed the month of July with decreasing passenger traffic (-3.1%, with approx. -18,000 passengers) compared to July 2014, for a total of 560,875 transiting passengers. This result was due both to a decrease in charter flight operations (-64.2%), particularly of outgoing flights for Tunisia and Egypt and incoming flights from Russia, due to the above- mentioned social-political unrest in these Countries, and to a different seasonal nature of these flights, with a better distribution over 12 months compared to 2014. The Load Factor of scheduled flights grew by 3 percentage points, passing from 78.5% of the first 7 months of 2014 to 81.5% of the same period of 2015. In the sole month of July, the load factor showed a growth, passing from 85.2% in 2014 to 87.3% in 2015 (+2.1 % points).
Florence Amerigo Vespucci airport Over 1.4 million passengers passed through the Florence Vespucci airport in the first 7 months of the year (1 January – 31 July 2015), with an 8.9% increase compared to the same period of 2014. The Florence Vespucci airport closed the month of July with a total of 260,278 passengers, up by 11.3% compared to the same month of the past year, thus establishing another monthly record - the sixteenth consecutive record. The Load Factor also grew for this airport: +4.3% points compared to July 2014 (79.2% in July 2015 against 74.9% reported in July 2014). The Load Factor for the first 7 months of the year was 77.8%, i.e. +3.2 % points compared to the same period of 2014 (74.6%).
Based on the aforesaid, considering that the first 6-month period is usually negatively affected by the low seasonal nature of the business, Gruppo Toscana Aeroporti is likely to have a second 6- month period characterized by positive growth rates and results in line with traffic trends.
*** As regards the information required by art.40 paragraph 2, letter d), of Legislative Decree no. 127/91, we specify that Toscana Aeroporti S.p.a., during the first six months of 2015, did not own and did not buy or sold treasury stock or shares of parent companies, including through the intermediary of trust companies or other persons. *** The Financial Reporting Manager, Mr. Marco Gialletti, hereby declares, pursuant to art. 154-bis, paragraph 2, of “Testo Unico della Finanza” (Consolidated Finance Act), that the information contained in this Report reflects the accounting records and , books of the company. ***
For the Board of Directors: Marco Carrai Chairman
53
CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT TABLES AT 30 JUNE 2015
54 GRUPPO TOSCANA AEROPORTI - CONSOLIDATED INCOME STATEMENT
Amounts in €K INTERIM 2015 INTERIM 2014 (1) of which of which Total Related Total Related Notes Parties Parties REVENUES Aviation revenues 1 38.182 423 21.581 Non-Aviation revenues 2 11.454 247 7.488 Revenues from construction services 3 10.724 1.563 Other revenue and income 4 2.882 70 804 68 TOTAL REVENUES (A) 63.242 740 31.437 68
COSTS Consumables 5 610 381 Personnel costs 6 19.374 10.976 Costs for services 7 20.000 46 12.038 Sundry operating expenses 8 919 379 Airport leases 9 2.122 1.673 Costs for construction services 10 10.213 1.488 TOTAL COSTS (B) 53.237 46 26.935 0 GROSS OPERATING MARGIN (A-B) 10.005 4.502 Amortization and write-downs 11 4.000 2.041 Provision for risks and repairs 12 1.774 773 Bad debt reserve 13 79 58
OPERATING EARNINGS 4.152 694 1.629 68 ASSET MANAGEMENT Financial income 14 1.695 110 Financial expenses 15 -878 -430 Profit (loss) from equity investments 16 10 0 TOTAL ASSET MANAGEMENT 828 -319 PROFIT (LOSS) BEFORE TAX 4.980 1.310 Taxes for the period 17 -1.605 -647 PROFIT/(LOSS) FOR THE PERIOD 3.375 663 Minority Interest’s loss (profit) for the period 18 -7 -19 GROUP’S PROFIT/(LOSS) FOR THE PERIOD 3.368 644 Earnings per share (€) 19 0,298 0,065
(*) Please note that, in order to offer the reader a greater comparability of the information disclosed in the consolidated financial statement of Toscana Aeroporti at June 30, 2015, some data regarding June 30, 2014 have been altered. The changes made are explained in a specific summarised table in the Explanatory Notes, to which we refer the reader. These changes have been considered as non-significant by the Company.
55 GRUPPO TOSCANA AEROPORTI - CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
INTERIM INTERIM Amounts in €K Notes 2015 2014
PROFIT (LOSS) FOR THE PERIOD (A) 3.375 663 Other comprehensive profit/(loss) that will not be subsequently reclassified to the Income Statement: - Profit (loss) arising from the determination of the Termination Benefit before tax 46 263 -185 Other comprehensive profit/(loss) that will be subsequently reclassified to the Income Statement: - Profit/(Loss) arising from the redetermination of available-for-sale financial assets 24 0 376
Total other profit (loss) before tax (B) 263 191
COMPREHENSIVE PROFIT FOR THE PERIOD (LOSS) (A) + (B) 43 3.638 853 Minority Interest’s comprehensive profit (loss) for the period -13 -18
GROUP’S COMPREHENSIVE PROFIT/(LOSS) FOR THE PERIOD 3.625 836
56 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (amounts in €K)
ASSETS Notes June 30, 2015 Dec. 31, 2014 (1) CHANGE
NON-CURRENT ASSETS INTANGIBLE ASSETS Concession rights 20 144.850 67.695 77.155 Industrial patent rights 21 343 176 167 Work in progress and advance payments 22 4.612 7.989 -3.377 Total Intangible Assets 149.805 75.860 73.945 TANGIBLE ASSETS Land and buildings that can be freely assigned 2.313 826 1.487 23 Owned property, plants and equipment 23.800 20.238 3.562 Total Tangible Assets 26.113 21.064 5.049 EQUITY INVESTMENTS Equity investments in other entities 24 154 1.791 -1.637 Investments in Subsidiaries 25 80 0 80 Investments in associated companies 26 492 482 10 Total Equity investments 726 2.273 -1.547 FINANCIAL ASSETS Guarantee deposits 27 115 60 55 Receivables from others, due within the year 28 3.115 2.237 878 Total Financial Assets 3.230 2.2980 932 Prepaid taxes recoverable beyond the year 29 2.276 2.032 244
TOTAL NON-CURRENT ASSETS 182.150 103.526 78.624
CURRENT ASSETS Inventories 30 0 0 0 ACCOUNTS RECEIVABLE Other receivables from customers 31 27.945 13.727 14.218 of which from Related Parties 906 30 876 Receivables from associated companies 32 325 364 -39
Tax receivables 33 4.293 300 3.993 Receivables from others, due within the year 34 2.744 2.177 567 of which from Related Parties 427 427 0 Total trade and sundry receivables 35.307 16.568 18.739
Cash and cash equivalents 35 25.111 25.091 20
TOTAL CURRENT ASSETS 60.418 41.659 18.759
TOTAL ASSETS 242.568 145.185 97.383
(1) Please note that, in order to offer the reader a greater comparability of the information disclosed in the consolidated financial statement of Toscana Aeroporti at June 30, 2015, some data regarding June 30, 2014 have been altered. In particular, “Prepaid taxes paid within the year”ave been reclassified in “Prepaid taxes paid beyiond the year”or a value of € 842 K at Dec. 31, 2014. These changes have been considered as non-significant by the Company.
57 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (amounts in €K)
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES Notes June 30, 2015 Dec. 31, 2014 (1)
CAPITAL AND RESERVES Capital 36 30.710 16.269 Capital reserves 37 72.936 47.656 IAS adjustments reserve 38 -4.079 -3.229 Fair value reserve 39 0 1.595 Profit/(Loss) carried forward 40 2.376 107 TOTAL GROUP SHAREHOLDERS’ EQUITY 105.311 66.598
MINORITY INTEREST 42 101 138
TOTAL SHAREHOLDERS' EQUITY 105.412 66.736
MEDIUM-LONG TERM LIABILITIES Provisions for liabilities and charges 44 1.968 33 Provisions for repair and replacement 45 17.096 10.520 Termination benefits and other personnel-related 46provisions (24)6.638 4.207 Financial liabilities 47 42.687 24.700 Other payables due beyond the year 48 1.839 1.839 TOTAL MEDIUM-LONG TERM LIABILITIES 70.228 41.300
CURRENT LIABILITIES Bank overdrafts 49 10.535 0 Loans 50 4.412 2.068 Tax payables 51 10.045 5.887
Payables to suppliers 52 22.314 17.018 of which to Related Parties 104 24 Payables to social security institutions 53 2.043 1.710 Other payables due within the year 54 14.378 8.433 Provisions for repair and replacement 45 2.924 1.758 Advance payments 55 278 276 Total trade and sundry receivables 41.938 29.195
TOTAL CURRENT LIABILITIES 66.929 37.150
TOTAL LIABILITIES 137.156 78.450
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 242.568 145.185
(1) Please note that, in order to offer the reader a greater comparability of the information disclosed in the consolidated financial statement of Toscana Aeroporti at June 30, 2015, some data regarding June 30, 2014 have been altered. In particular, the item “Bank overdraft and loans” has been reclassified into two separate items. The item “Bank overdraft” refers to the use of short- term credit lines obtained from banks and the item “Loans” refers to the current portion of “Financial liabilities”. In addition, € 124 K have been reclassified into ite, “Other payables due within the year” postes at Dec. 31, 2014 as “Payables to suppliers”. These changes have been considered as non-significant by the Company.
58
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (amounts in €K)
REVA LU SH A RE A TION IAS LEG A STA TU FA IR M INO TO TA L PREM IU RESERV O TH ER A D JUST TO TA L TO TA L SH A RE L TO RY VA LU E RITY SHAREH M ES RESERV M EN TS RESU LT GROUP’ CA PITAL RESE RESER RESER INT. O LD ERS' RESERV PU RS. ES RESERV RESERVES S S.E. RVE VES VE S.E. EQ U ITY E TO LA W E 413/91
S.E. At Decem ber 31, 16.269 18.941 435 2.207 24.160 66 -3.229 1.106 3.115 63.070 12 63.083 2013 N ET YEA R’S PRO FIT ------4.199 4.199 125 4.324 (LO SS)
O TH ER CO M PO N . OF ------489 -273 216 - 216 CO M PREH . IS
TO TA L COM PREHENSIVE ------489 3.926 4.415 125 4.540 PRO FIT (LO SS) PRO FIT ALLO CA TION - - - 137 1.711 - - - -1.848 - - -
D IVIDEN D S ------887 -887 - -887
TO TA L ITEM S D IRECTLY SH O W N IN - - - 137 1.711 - - - -2.735 -887 0 -887 S.E.
S.E. AT DECEM BER 31, 16.269 18.941 435 2.344 25.871 66 -3.229 1.595 4.306 66.598 138 66.736 2014 0 0 0 0 0 0 0 489 125 4.540 N ET PRO FIT (LO SS) ------3.368 3.368 7 3.375 FO R TH E PERIOD O TH ER CO M PO N . OF ------0 263 263 7 270 CO M PREH . IS TO TA L COM PREHENSIVE ------0 3.631 3.631 13 3.645 PRO FIT (LO SS)
PRO FIT ALLO CA TION - - - 205 5 - - -210 - - -
D IVIDEN D S ------3.885 -3.885 - 50 -3.935 FA IR VA LU E RES. FRO M SALE OF AD F ------1.595 - -1.595 - -1.595 SH A RES CA PITA LE INCREA SE FO R MERG ER BY 14.441 ------14.441 - 14.441 INCO RPO RA TION OF ADF
O TH ER DETA ILS REGARDING MERGER - - - - - 25.807 - 850 - 1.901 26.859 - 26.859 BY INCO RPO RA TION O F AD F
TO RESERVE FO R CA PITAL INCREA SE - - - - - 738 - - 0 -738 - -738 CO STS
TO TA L ITEM S D IRECTLY SH O W N IN 14.441 - - 205 5 25.070 - 850 - 1.595 -2.193 35.081 - 50 35.031 S.E.
S.E. AT JU N E 30, 2015 30.710 18.941 435 2.548 25.876 25.136 -4.079 0 5.744 105.311 101 105.412
59 CONSOLIDATED STATEMENT OF CASH FLOWS (amounts in €K) INTERIM 2015 INTERIM 2014 A- Net initial cash and cash equivalents (°) 36.845 12.559 B- Cash flowS from operating activities Net result for the period (°°) 3.375 663 Amortization of intangible assets 2.439 1.139 Depreciation of tangible assets 1.560 902 Changes to provision for termination benefit provision 52 75 Actuarial gain/loss (363) 0 (payments) (220) (143) (Increase) decrease in trade and sundry receivables (5.128) (6.710) (Increase) decrease in prepaid and deferred taxes (669) (56) Increase/(decrease) in payables to suppliers and (4.470) (7.380) others Increase/(decrease) in tax liabilities (°°°) 2.380 1.474 Investment income (1.638) 0 Changes in provisions for repair and replacement provision 2.020 957 use (622) (287) Changes in provisions for liabilities and charges provision 6 58 use (1.676) (77) Total (B) (2.954) (9.387)
C- Cash flow from/(for) investments
(Inv.) in non-current intangible assets (1.192) (459) Disinvestment/reclassification of non-current tangible 118 0 assets (Investments) in non-current intangible assets (10.873) (1.625) Realisable value from transfer of Stakes to other 1.766 0 entities
(Investments) in securities and other financial assets (69) 2.187
Total (C) (10.250) 103 D- Cash flow from/(for) financial assets Medium/long term loans 10.000 11.412 Reimbursement of medium/long term loans (1.700) (852) Distribution of dividends (°°°°) (6.830) (887) Total (D) 1.470 9.673 E- Year’s cash flows (B+C+D) (11.734) 388
F- Net final cash and cash equivalents (A+E) 25.111 12.947
(°) The balance of initial cash includes the balance as at Jan. 1, 2015 of the AdF Group for € 11,754 K. (°°) The result for the period includes interest payable for € 575 K (€ 446 K in the first half of 2014). (°°°) Taxes paid in the first half of 2015 are € 2,017 K (€ 1,026 K in the first half of 2014). (°°°°) Of which ex-AdF dividends for € 2,945 K.
60
EXPLANATORY NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT AT 30 JUNE 2015
61
EXPLANATORY NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT AT 30 JUNE 2015
INTRODUCTION
Gruppo Toscana Aeroporti (hereinafter also the “Group” or the “TA Group”) consists of the Parent Company “Toscana Aeroporti S.p.a.” (hereinafter also the “Parent Company” or “TA”), a treasury stock company (former “Società Aeroporto Toscano Galileo Galilei S.p.a.”), with registered office at the Office of the Register of Companies of Florence on 1 June 2015, and its subsidiaries “Toscana Aeroporti Engineering s.r.l.”, “Parcheggi Peretola S.r.l.” and “Jet Fuel Co. S.r.l.” The main activities of the Group are described in the Report on Operations. The Condensed Consolidated Interim Financial Report of the TA Group shows amounts in thousand euro (€K) as this is the currency used by TA and its subsidiaries for most their operations. In addition, international accounting standards have been consistently applied for all the companies of the Group. The financial statements of the Subsidiaries, used for the consolidation, have been appropriately amended and reclassified, where necessary, for consistency with international accounting standards and classification criteria. The limited auditing activity for the Condensed Consolidated Interim Financial Report at 30 June 2015 of the TA Group has been carried out by the auditor “PricewaterhouseCoopers S.p.A.”
CONSOLIDATION AREA
The subsidiaries directly or indirectly controlled by the Parent Company as defined by art. 26 of Legislative Decree no. 127/1991, have been fully consolidated.
For the structure of the TA Group at 30 June 2015, see the Report on Operations in this document. The Consolidation Area is larger than the one described in the consolidated financial statement at 31 December 2014 as there has been the addition of “Parcheggi Peretola S.r.l.”, an AdF subsidiary 31 December 2014, after its incorporation. Furthermore, we specify that the company “Toscana Aeroporti Engineering S.r.l.”, a 100% TA subsidiary, was created on 15 January 2015 with a share capital of € 80 K. The business purpose of the Company is: a. to coordinate the development of extensive airport works and, more specifically, the construction, restoration, expansion and re-qualification of airports; b. to provide engineering, design, and project management services. However, we point out that the company is not yet operating, so it was not included in the consolidation.
STRUCTURE AND CONTENT OF STATEMENTS AND REPORTS
The Condensed Consolidated Interim Financial Report of the TA Group at 30 June 2015 has been prepared in compliance with the applicable International Accounting Standards (IAS/IFRS) in force at that date, as issued by the International Accounting Standards Board and approved by the European Union, as well as in compliance with the measures issued to implement art. 9 of Leg.
62 Dec. no. 38/2005 (Consob Resolution no. 15519 of 27 July 2006 concerning measures on corporate reporting, Consob Resolution no. 15520 of 27 July 2006 concerning changes and additions to the Issuers’ Regulation adopted with Resolution no. 11971/99, Consob’s Notice no. 6064293 of 28 July 2006 concerning corporate information and disclosures pursuant to art. 114, paragraph 5, of Leg. Dec. no. 58/98. Furthermore, we considered the International Financial Reporting Interpretations Committee (”IFRIC”), formerly Standing Interpretations Committee ("SIC"). In the preparation of this Condensed Interim Financial Report, prepared in compliance with IAS 34 - Interim Financial Reporting, we applied the same Accounting standards adopted in the preparation of the Consolidated Financial Statement at 31 December 2013, except for the contents of the section “New accounting standards, amendments and interpretations applied since 1 January 2015”. The information provided in this Interim Financial Report must be read together with the Consolidated Financial Statement at 31 December 2014, prepared in compliance with IFRS.
To prepare this Interim Financial Report, the Management is required to develop estimates and assumptions that affect revenues, costs, assets and liabilities entered in the balance sheet, as well as the information disclosed regarding potential assets and liabilities at the closing date. Should said estimates and assumptions prepared by the Management be seen to differ from the actual circumstances in the future, they would be amended appropriately in the year when said circumstances would occur. For a more in-depth description of the most significant valuation processes used by the Group, see the section “Use of estimates” in the Consolidated Financial Statement at 31 December 2014.
Furthermore, we point out that some valuation processes, and particularly the most complex, such as the determination of any impairment of fixed assets, are generally made completely only during the preparation of the annual report, when all the necessary information is available, except for the rare case where there are indicators requiring an immediate assessment of any impairment.
Income taxes are recognized based on the best estimate of the weighted average tax rate expected for the entire period.
INFORMATION ON THE SEASONAL NATURE OF THE AIRPORT SECTOR
Due to the cyclic nature of the sector where the Group operates, higher operating revenues and results are generally expected in the second and third quarter rather than in the first and fourth quarters. The highest sales usually concentrate in the June-September holiday peak period, when the maximum user level is recorded by the airport infrastructures managed.
FORMAT OF FINANCIAL STATEMENTS
The forms used for the Condensed Consolidated Interim Financial Report of the TA Group at 30 June 2015 have been prepared by using the updated version of IAS 1 “Presentation of Financial Statements” approved with Regulation no. 1274/2008 issued by the European Commission on 17 December 2008 and effective from 1 January 2009. As regards the format of financial statements, the Company decided to present the following types of consolidated statements: Statement of Financial Position, Income Statement, Statement of
63 Comprehensive Income, Statement of Changes in the Consolidated Shareholders’ Equity, Statement of Cash Flows and Explanatory Notes. In their turn, Assets and Liabilities have been shown in the Balance Sheet based on their classifications as current and non-current.
Income Statement The Income Statement is presented with classifications by nature, as this is considered to be the most significant classification method for the best disclosure of the earnings of the Company. Furthermore, the income statement, pursuant to Consob’s Resolution no. 15519 of 27 July 2006, breaks down all the relevant cost and revenue items: (I) (positive or negative) income components arising from events or operations not recurring in nature, i.e. Those operations or events that are not frequently repeated during the usual conduction of activities, (ii) the effects of relationships with related parties. As regards non-recurring operations, the Company interprets the notion of “non-recurrent” rather extensively by also including contingent assets and liabilities in the category.
Statement of Comprehensive Income In order to present additional information on its earnings, the Company chose to prepare two separated statements: the “Income Statement”, which includes the operating result for the period, and the “Statement of Comprehensive Income”, which includes both the operating result for the period and changes in the Shareholders’ Equity relating to revenue and expense accounts, which, as specified in international accounting standards, are recognized among the components of the Shareholders’ Equity. Since January 1, 2013, the Statement of Comprehensive Income is presented with details of Other Comprehensive Profits and Losses to distinguish between profits and losses that will be reclassified in the income statement in the future and profits and losses that will never be reclassified in the income statement.
Statement of Cash Flows The Statement of Cash Flows is presented subdivided into cash flow formation areas. It has been adopted by the Group TA and prepared by using the indirect method. Cash and cash equivalents included in the cash flow statement include the balance values of said items at the reference date. Income and expenses concerning interests, dividends received and income taxes are included in the financial flows generated by operations. Pursuant to Consob Resolution no. 15519 of 27 July 2006, we specify that the cash flow statement does not show the financial flows regarding relationships with related parties, because they are not considered significant.
Statement of Changes in the Consolidated Shareholders’ Equity The Statement of Changes in the Consolidated Shareholders’ Equity is presented as required by international accounting standards, with separated items for the year’s result and each revenue, income, charge and expense not passed in the income statement or in the statement of comprehensive income, but directly recognized in the Shareholders’ Equity based on specific IAS/IFRS accounting standards.
New accounting standards, amendments and interpretations applied since 1 January 2015
64 Effective from 1 January 2015, some amendments have been applied as introduced by international accounting standards and interpretations, none of which, however, determined a significant effect on the Group’s reports. The main differences are illustrated below: - IAS 19 - “Employee Benefits” Revised: the changes made to IAS 19 on 21 November 2013 allow (but do not define as mandatory) the accounting in reduction of the “current service cost” of the period of the contributions paid by employees or by third parties, that are not related to the number of years of service, in lieu of the allocation of said contributions along the time span when the service has been rendered. These contributions must fulfill the following conditions: (i) be indicated in the formal conditions of the plan; (ii) be connected with the service rendered by the employee; (iii) be independent on the number of years of service of the employee (e.g. Contributions are a fixed percentage of the remuneration or a fixed amount for the entire term of the labor contract or correlated with the age of the employee); - On 12 December 2013, IASB issued a set of proposals for changes to some accounting standards, summarized below: a) IFRS 2 “Share-Based Payments”: the modification clarifies the definition of “vesting conditions” and separately defines “performance conditions” and “service conditions"; b) IFRS 3 “Business Combinations”: the modification clarifies that an obligation to pay a consideration in a business combination that meets the requirements to be defined as a financial instrument is classified in the balance sheet as a financial liability based on IAS 32 “Financial Instruments: presentation”. Furthermore, the revision clarifies that the standard examined does not apply to joint ventures and joint arrangements regulated by IFRS 11; c) IFRS 8 “Operating Segments”: this standard was amended as regards the information requirements for the case where different operating segments, with common economic characteristics, are to be combined; d) IFRS 13 “Fair Value Measurement”: the changes clarify that the exemption that allows an entity to value groups of financial assets and liabilities at fair value applies to all contracts, including non-financial agreements, and there is still the option to account for short-term trade receivables and payables without recognizing the effects of discounting, if that said effects are not material. e) IAS 16 “Property, plant and equipment” and IAS 38 “Intangible assets”: both standards have been revised to clarify that the recoverable value and the useful life are treated if the entity is making a revaluation; f) IAS 24 “Related Party Disclosures”: the standard has been revised to include, as related party, an entity that provides management services; g) IAS 40 “Investment Property”: the revision of the standard regards the interaction between the provisions of IFRS 3 “Business combinations” and those of this standard where the acquisition of property is considered as a business combination.
Accounting standards, amendments and interpretations not yet applicable At the date of this financial statement, the competent bodies of the European Union have not yet concluded the ratification process required for the adoption of the following accounting standards and amendments:
65
- On 6 May 2014, IASB issued some amendments to IFRS 11 “Joint arrangements: accounting for acquisitions of interests in joint operations”, to provide clarifications on the accounting of acquisitions of Interests in joint operations making up a business. The amendments are retrospectively applicable for the fiscal years beginning on or after 1 January 2016. Anticipated application is permitted.
- In May 2014, IASB and FASB jointly published IFRS 15 - “Revenue from Contracts with Customers”. The purpose of that standard was to improve the disclosure of revenues and their comparability between different balance sheets. The new principle can be applied retrospectively for the fiscal years beginning on or after 1 January 2017. Anticipated application is permitted. - On 12 May 2014, IASB issued amendments to IAS 16 and IAS 38 “Clarification of Acceptable Methods of Depreciation and Amortization”, which consider inappropriate the adoption of a revenue-based method of amortization. As regards exclusively intangible assets, that indication is considered a relative assumption that can be overcome only if one of the following circumstances arise: (i) the right of use of an intangible asset and related to reaching a preset threshold of revenue to be produced; or (ii) when it can be demonstrated that realizing revenues and using the economic benefits of the asset are highly correlated. The amendments are applicable starting from the years starting in or after 1 January 2016. - On 24 July 2014, IASB finalized the project of revision of the accounting standard on financial instruments by issuing the complete version of IFRS 9 “Financial Instruments”. More specifically, the new provisions of IFRS 9: (i) modify the model for the classification and assessment of investments; (ii) introduce a new method for the write down of investments, which keeps into account expected credit losses; and (iii) modify hedge accounting provisions.. The provisions of IFRS 9 are effective starting from the periods that will start on or after January 1st, 2018. - On 12 August 2014, IASB published an amendment to IAS 27 Revised “Separate Financial Statements”: this amendment will be effective from 1 January 2016 and will allow an entity to use the Shareholders’ Equity method to account investments in subsidiaries, joint ventures and associated companies in the separated financial statement. - In the month of September 2014, IASB amended IAS 28 “Investments in Associates and Joint Ventures” and IFRS 10 - Consolidated Financial Statement” with the intention of resolving an inconsistency in the treatment of the sale or contribution of assets between an investor and its associate or joint venture. After the changes made, the profit or loss is totally recognized when the transaction regards a business. These changes would be applicable effective from 1 January 2016, but in January 2015 the decision has been made to defer this effectiveness date to wait until certain inconsistencies are resolved in some sections of IAS 28. - Annual changes to IFRS 2012-2014: on 25 September 2014, IASB published a number of amendments to some international accounting standards applicable from 1 January 2016. The changes concern: (i) IFRS 5 “Non-current assets held for sale and discontinued operations”; (ii) IFRS 7 “Financial Instruments: Additional Information”; (iii) IAS 19 “Employee Benefits"; (iv) IAS 34 “Interim Financial Reporting”.
66 As regards the first point, the amendment clarifies that balance sheet data do not need to be booked when an asset or a group of assets available for sale is reclassified as “held for distribution”, or vice versa. As regards IFRS 7, the amendment establishes that if an entity transfers a financial asset “in such a way that part or all of the financial assets do not qualify for derecognition”, then the entity is required to disclose information concerning its involvement in the transferred asset. The amendment proposed to IAS 19 clarifies that in determining the discount rate of the obligations arising after employment, it is the currency in which the obligations are denominated that matters rather than the State where they are located. The amendment proposed to IAS 34 requires the indication of cross-references between the data disclosed in the interim financial reports and the associated information. - On 18 December 2014, IASB issued an amendment to accounting standard IAS 1 “Presentation of Financial Statements". The change, applicable beginning on 1 January 2016, provides clarifications on the aggregation or disaggregation of balance sheet items if their amount is relevant or “material". More specifically, the amendment to the standard requires the entity not to aggregate items with different characteristics nor disaggregate items that make the information and reading of the balance sheet difficult. Furthermore, as regards the recognition of the financial position of an entity, the amendment clarifies the need to disaggregate some items required by sections 54 (financial position) and 82 (income statement) of IAS 1. - On 18 December 2014, IASB amended IFRS 10 “Consolidated Financial Statements”, IFRS 12 “Information on interests in other entities”, and IAS 28 “Interests in associates and joint ventures". As regards the first point, the amendment clarifies that the exemption from presenting consolidated financial statements applies to a parent company that is, in its turn, a subsidiary of an investment entity, when the latter measures all its subsidiaries at fair value. As regards IFRS 12, the amendment clarifies that the principle does not apply to investment entities that prepare their financial statement by valuing all the subsidiaries at fair value. As regards IAS 28, the amendment allows an entity that is not an investment entity and that owns an interest in associates or joint ventures that are “investment entities” valued with the equity method to maintain for that valuation the fair value applied by the investment entity for its interests in subsidiaries. These changes can be applied beginning from 1 January 2016.
The Group will adopt said new standards, amendments and interpretations based on the effectiveness date specified and will assess their potential impact when these will be ratified by the European Union.
MERGER BY INCORPORATION OF “AEROPORTO DI FIRENZE S.P.A.”
The Merger is part of the industrial and strategic plan already disclosed to the market with the joint press release published by SAT and AdF on 16 October 2014 with the aim of combining SAT and AdF in compliance with the requirements of the National Airport Plan for a single management of the Florence and Pisa airports, to be qualified as "airports of national strategic interest". The strategic objective is to create a best-in-class Tuscan airport system, due to become one of the main Italian airport hubs. The integration project aims at maximizing the coordinated development of the Pisa Galilei and Florence Vespucci airports by expanding the offer of
67 destinations reached, increasing the number of seats offered on each individual route, increasing the number of airlines operating in the system by improving the airport infrastructures to meet the traffic volumes expected in the two airports based on their Airport Development Plans (ADP). On 19 December 2014, the Boards of Directors of Aeroporto Toscano Galileo Galilei S.p.a. (SAT, now Toscana Aeroporti S.p.a.) and Aeroporto di Firenze S.p.a. approved the merger by incorporation of AdF S.p.a. into SAT S.p.a. and the preparatory documentation for the transaction. At its first call, the Extraordinary Shareholders’ meeting held on 10 February 2015 approved the merger by incorporation of AdF into SAT. The Shareholders also delegated the Board of Directors, pursuant to art. 2443 of the Civil Code, to increase the share capital with the exclusion of the option right after the merger has become effective. The Merger will ensure a single strategic direction of the System, which will allow for economies of scale and generated value to be used to finance the investments required to support the growth plans of the two airports. As pointed out in the “Information Document on the Merger by Incorporation of Aeroporto di Firenze S.p.A. into Aeroporto Toscano Galileo Galilei S.p.A.”, both companies were jointly controlled by Corporación América Italia S.r.l. (today “S.p.A.”), that controlled SAT with a 53.039% share and, with a direct 48.983% and an indirect 1.42% share held through SAT, could actually control AdF, also based on the Shareholder Agreement signed with SO.G.IM. S.p.a. and notified to the market pursuant to art. 122 of the consolidated act “Testo Unico”. The Merger was implemented by increasing SAT’s share capital with new ordinary shares to be offered as a stock swap to AdF Shareholders, with the consequent dissolution of AdF into SAT. The exchange ratio has been fixed at 0.9687 SAT ordinary shares per AdF ordinary share (the “Exchange Ratio”). The deed of merger was signed on 11 May 2015 and established that the effective date of the merger, pursuant to art. 2504-bis, second paragraph, of the Civil Code, should be the fifth open market day after the date when the merger deed would be registered for the last time as required by art. 2504 of the Civil Code, i.e. 1 June 2015. Starting from the effective merger date, SAT took over all AdF rights and obligations, and continued all its legal transactions, including in court, existing before the merger. Furthermore, the deed of merger established that, for accounting and fiscal purposes, the operations of the Incorporated Company be recognized in SAT’s financial statements starting from the first day of the year during which the merger would have been registered for the last time pursuant to art. 2504 of the Civil Code (and therefore from 1 January 2015, as both companies close their financial year on 31 December). At the merger effective date, SAT increased its share capital for a global nominal amount of € 14,440,743.90 by issuing 8,751,966 shares for the purpose of the exchange and changed its company name into “Toscana Aeroporti S.p.a.” listed company headquartered in Florence. Based on IAS/IFRS accounting standards, the merger is a business combination of entities under a common control. Being a "business combination involving entities under common control", the Merger is explicitly excluded from the scope of the accounting standard IFRS 3. Since there is no specific IFRS standard to be applied to the merger, based on IAS 8.10 the Management is required to develop their own opinion on how to develop and apply an accounting treatment that provides relevant and reliable information. In forming their own judgment, the corporate management must consider: (i) the provisions and guidelines of IFRS, which regulate
68 similar and related cases, and (ii) the definitions, criteria and notions set forth in the so-called systematic picture. Based on the aforesaid, TA assessed that: - the transaction does not involve a significant influence on the cash flows of the merged entities; - the transaction is designed to reorganize the company within the Corporación America Italia Group, keeping the predictions of the National Airport Plan into consideration; the accounting treatment to be followed to adequately reflect the purposes of the business combination transaction reflects, in the company’s financial statement resulting from the merger, the assets and liabilities of the acquired entity and relates them with the values resulting from the financial statement of the incorporated entity. As regards the details of the items to be incorporated, see section “Pro-forma financial statements of the Surviving Entity” of the Report on Operations. More specifically, we point out that the table with the Shareholders’ Equity details at 30 June 2015 of this Interim Financial Report contains the global effect of the merger by incorporation of AdF, summing the Shareholders’ Equity of Toscana Aeroporti to that of AdF Group at 31 December 2014, net of the dividends distributed before the merger. For details, see the section “Shareholders’ Equity and Liabilities” in the Explanatory Notes.
69 CHANGES TO THE PRESENTATION OF COMPARATIVE DATA
Furthermore, we point out that some comparative data regarding 31 December 2014 and 30 June 2014 have been reported again after the transaction in question and compared with previously presented data referred to SAT, now TA. More specifically, the following actions were implemented:
1. in the Consolidated Income Statement:
- operating revenues were distinguished into “Aviation revenues” and “Non-Aviation revenues”, as shown in the table below (data in €K):
Consolidated Income Statement Post- Pre- Difference reclassification reclassification 2014 Interim Rep. 2014 Interim Rep.
Operating income - 29.085 29.085 Aviation revenues 21.581 - (21.581) Aviation revenues 7.488 - (7.488) Revenues from construction services 1.563 1.563 - Other revenue and income 804 788 (16) Total Revenues 31.436 31.436 -
- harmonize the recognition of costs in the categories listed below, as shown in the following table (amounts in €K):
Consolidated Income Statement Post- Pre- Difference reclassification reclassification 2014 Interim Rep. 2014 Interim Rep.
Consumables (former “Costs for raw 381 538 157 and ancillary materials, consumables and goods”) Personnel costs 10.976 10.980 4 Costs for services 12.038 11.907 (130) Sundry operating expenses 379 - (379) Airport leases 1.673 - (1.673) Costs for construction services 1.488 1.488 - Other operating expenses - 2.021 2.021 Total Costs 26.935 26.935 -
- include the write-down of tangible and intangible assets in a single cost item called “Amortization and write-downs”;
2. In the Consolidated Statement of Financial Position, to reclassify “Prepaid taxes recoverable within the year” in “Prepaid taxes beyond the year” for a value of € 842 K at 31 December 2014. Furthermore, the item “Bank overdraft and loans” has been reclassified into two separate items (where the item “Bank overdraft” reflects the use of short-term credit lines and the item “Loans” refers to the current portion of “Financial Liabilities”) and finally € 124 K have been reclassified in the item “Other accounts receivable within the year” recognized at
70 31 December 2014 in the item “Payables to suppliers".
The Company believes that these changes to the data at 31 December 2014 and 30 June 2014 are not significant.
MAIN FINANCIAL RISKS
A description of the main financial risks and of the mitigating actions implemented by the TA Group is given below.
1) Credit risk Over the last few years, the effects of the crisis of financial markets and the consequent recessive economy in the main industrialized Countries negatively affected the balance sheets of the airlines - the main clients of the Group. Hence, the risk of a partial non-collection of receivables accrued from airlines. The Group believes that it has suitably controlled said risk through its constant monitoring of accounts receivable, also sometimes promptly initiating legal actions to protect said receivables, which are reflected in the allocation of a specific provision for bad debt, currently deemed to be adequate in connection with the amounts of the existing receivables. Always with the purpose of facing the credit risk, the Parent Company usually asks for sureties as guarantee (e.g. from sub-licensees) or pre-payments (e.g. from unknown airlines). Starting from December 2011, the Parent Company took out an excess-of-loss type of insurance on former SAT credit positions to cover collection risks should insolvency proceedings be opened against the assets of any customer (policy expiring at the end of November 2015). Furthermore, since January 2012, the Parent Company hired a company for its long-term debt collection activities.
2) Liquidity risk At 30 June 2015, the Group had a negative net financial position for €32.5M (€1.7M at 31 December 2014). This is the result of a positive current NFP of €10.2M (€23M at 31 December 2014) and a negative non-current NFP of €42.7M (€24.7M at 31 December 2014) regarding two loans granted by banks “Intesa San Paolo” and “MPS Capital Service” that ensure the Parent Company the availability of up to €60M for important investments in infrastructures. Six-month EURIBOR interest rates are paid on the two loan agreements, expiring in 2022 and 2027, and some financial covenants are to be complied with, for which at 30 June 2015 there was no criticality. Financial covenants are presently also complied with in the year’s predictions for the second 6-month period of 2015. The Group believes that the funds and medium/long-term credit lines available (approximately €8M), in addition to those that will be generated by operations, are sufficient to permit its investment, working capital management and debt repayment at natural maturity requirements to be met.
3) Interest rate risk Exposure to the interest rate risk arises from the need to finance both industrial and financial operations, as well as use the available cash. Changes in market interest rates may have a negative or positive impact on the Group’s operating result, thereby indirectly influencing the costs and returns of loans and investments. The Net Financial Position at 30 June 2015 is €32.5M and the
71 debt-to-equity ratio (NFP/Shareholders’ Equity) at 30 June 2015 was 0.31 (vs 0.03 at 31 December 2014), which confirms the financial soundness of the Group. The potential impact in terms of annual growth of interest expense connected with interest rate trends, as a result of a hypothetical growth of 50 bp, would be approximately € 360 K. No further sensitivity analysis is provided, as it is considered immaterial.
4) Exchange rate risk The TA Group is not subject to risks linked to fluctuations in exchange rates because it prevalently operates in a European context where transactions are made in Euro.
REPORTING BY OPERATING SEGMENT
Since 1 January 2009, compliance with IFRS 8 - “Operating Segments” has become mandatory; it requires entities to identify operating segments based on internal reporting systems used by the Management to allocate resources and assess performance. Information regarding the main operating sectors of the Group is given below as required by IFRS 8. First of all, it is important to highlight that the type of business activity carried out by TA Group does not allow for the identification of business segments related to completely independent activities in terms of market/customer combinations. Currently, the “traffic” component influences the results of all the company’s activities. However, we may identify two significant operating segments characterized by the independent nature of their products/services and production processes, for which - for the aforesaid reasons - we propose a disclosure relating to the information directly made available by the company’s analytical accounting system used by Chief Operating Decision Makers. The currently available information regarding the main operating segments identified are provided below: Aviation, Non-Aviation and Corporate.
- Aviation Segment: this operating segment includes the so-called “air-side” activities (after the security check), which are the core business of an airport. They include: passenger and aircraft ground handling, landing, aircraft departure and stopover, security and safety activities, passenger boarding and disembarkation, cargo loading and unloading. Revenues for the Aviation segment are represented by the prices paid for airline assistance services and are generated by airport fees such as: landing, take-off and stopover fees, freight revenue taxes, passenger boarding fees, passenger and baggage security fees. - Non-Aviation Segment: this segment includes activities normally carried out in the “land-side” area (before the security check), which are not directly associated with the Aviation segment. They include retail activities, catering, car parking, car rental, advertising, ticket office, VIP Lounge. Revenues for the Non-Aviation segment are represented by the royalties earned on sub-licensed activities, from the direct management of certain activities (i.e. car parking, ticket office and advertising) to the rents paid by sub-licensees. The table below provides the main information regarding the operating segments described above by highlighting, in unallocated items, (corporate) revenues, costs, assets and investments not directly attributable to the two segments. More specifically, the main types of unallocated costs
72 refer to the cost of labor/personnel (staff), professional services rendered, insurance and industry association membership fees, pro-rata portion of utilities, maintenance and depreciation, administrative costs, provisions for liabilities, Directors’ and Auditors’ fees. - Corporate Segment: the values indicated in unallocated items mainly refer to corporate costs not directly attributable to the two operating segments, such as - for example - the cost of personnel, professional services rendered for the Management, general insurance and industry association membership fees, pro-rata portion of utilities, general maintenance and unallocated depreciation of infrastructure, administrative costs, provisions for liabilities, Directors’ and Auditors’ fees, etc. With the merger by incorporation of Aeroporto di Firenze S.p.a. Into SAT S.p.a., the operations of the incorporated (or absorbed) entity have been recognized in SAT’s balance sheet for accounting and tax purposes effective from 1 January 2015. So, we point out that any difference between the book values of the two Interim Reports of Gruppo Toscana Aeroporti at 30 June 2015 and of the SAT Group at 30 June 2014 does not quite reflect the real situation because they are affected by the transaction described.
73 Unallocated (Amounts in €K) Aviation Non-Aviation assets Total (Corporate)
June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30, TA Group - Income Statement 2015 2014(*) 2015 2014(*) 2015 2014(*) 2015 2014(*)
Operating income 38.182 21.581 11.545 7.488 2.882 804 52.518 29.874 of which Pisa 22.878 21.581 7.459 7.488 1.571 804 31.908 29.874 of which Florence 15.304 0 3.996 0 1.311 0 26.610 0
Revenues from construct. serv. 10.651 1.485 72 78 0 0 10.724 1.563 of which Pisa 9.486 1.485 45 78 0 0 9.531 1.563 of which Florence 1.166 0 27 0 0 0 1.193 0
Total Segment Income 48.833 23.066 11.526 7.566 2.882 804 63.242 31.437
Operating Costs (**) 22.647 14.484 10.161 7.407 10.215 3.556 43.024 25.447 of which Pisa 15.470 14.484 8.421 7.407 3.833 3.556 27.723 25.447 of which Florence 7.177 0 1.741 0 6.386 0 15.301 0 Cost of construct. serv. 10.144 1.414 69 74 0 0 10.213 1.488 of which Pisa 9.034 1.414 43 74 0 0 9.077 1.488 of which Florence 1.110 0 26 0 0 0 1.136 0 Amortiz. and provisions 3.603 2.246 837 425 1.413 202 5.853 2.872 of which Pisa 2.554 2.246 582 425 282 202 3.419 2.872 of which Florence 1.049 0 254 0 1.131 0 2.434 0 Operating Earnings 12.439 4.922 459 -340 -8.746 -2.953 4.152 1.629
Asset management 0 0 0 0 828 -319 828 -319 Profit before tax 0 0 0 0 0 0 4.980 1.310 Taxes for the period 0 0 0 0 -1.605 -647 -1.605 -647 Net result for the period 0 0 0 0 0 0 3.375 663 Loss (profit) of minority interest 0 0 0 0 -7 -19 -7 -19 Net Group result 0 0 0 0 0 0 3.368 644
TA Group - Statement of June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31, financial position 2015 2014 2015 2014 2015 2014 2015 2014
Current assets 20.620 10.356 8.491 4.970 31.307 27.175 60.418 42.501 Non-current assets 129.444 65.376 45.547 32.278 7.159 5.030 182.150 102.685 TA Group - Additional June 30, June 30, June 30, June 30, June 30, June 30, June 30, June 30, information 2015 2014(*) 2015 2014(*) 2015 2014(*) 2015 2014(*)
Investments 10.661 3.633 317 2.105 1.072 911 12.049 6.650
(*) Please note that, in order to offer the reader a greater comparability of the information disclosed in the consolidated financial statement of Toscana Aeroporti at 30 June 2015, some data regarding 30 June 2014 have been altered. In particular, € 804K, previously allocated for €144K to the Aviation segment and for €660K to the Non- Aviation segment, have been allocated to the "Unallocated assets" item. As a consequence, the Operating Results for the segment have also been amended at 30 June 2014. These changes have been considered as non-significant by the Company. (**) including Airport leases for € 2,122 K at 30 June 2015 (€ 1,673 K at 30 June 2014).
74 Information on the main customers of the Parent Company “TA”
At 30 June 2015, TA reported 3,316,527 passengers. The total incidence of the first three carriers is 60.3%. More specifically, the incidence of the first carrier (Ryanair) is 42.8%, while the incidences of the second (Alitalia) and third (Vueling) carriers are 8.9% and 8.6%, respectively.
NOTES TO THE MAIN ITEMS OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT: INCOME STATEMENT
INTRODUCTION
With the merger by incorporation of Aeroporto di Firenze S.p.a. into SAT S.p.A., the operations of the incorporated (or absorbed) entity have been recognized in SAT’s balance sheet for accounting and tax purposes effective from 1 January 2015. So, we point out that any difference between the book values of the two Interim Reports of Gruppo Toscana Aeroporti at 30 June 2015 and of the SAT Group at 31 December 2014 does not quite reflect the real situation because they are affected by the transaction described. For a comparison between the financial information of the TA Group at 30 June 2015 and pro-forma financial statements of the TA Group at 30 June 2014, see the specific considerations disclosed in the section “Consolidated Income Statement - Comparison between operating results at 30 June 2015 and pro-forma operating results at 30 June 2014” in the Report on Operations.
VALUE OF PRODUCTION
On the whole, consolidated revenues at 30 June 2015 totaled €63.2M (€31.4M at 30 June 2014), with a positive change of €31.8M, and include:
Abs. Diff. Amounts in €K INTERIM 2015 INTERIM 2014 % Diff. 2015/2014 REVENUES Aviation revenues 38.182 21.581 16.601 76,9% Non-Aviation revenues 11.454 7.488 3.966 53,0% Revenues from construction services 10.724 1.563 9.161 586,3% Other revenue and income 2.882 804 2.078 258,4% TOTAL REVENUES (A) 63.242 31.437 31.805 101,2%
1. Aviation revenues
The table below shows the items of “Aviation revenues” at 30 June 2015 and the changes, both in absolute and percentage terms, compared to 30 June 2014:
75 CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 % Diff. AVIATION REVENUES Passenger boarding fees 12.134 7.141 4.993 69,9% Landing/departure fees 4.751 2.709 2.042 75,4% Stopover fees 398 233 164 70,3% PRM assistance fees 983 394 590 149,8% Cargo fees 287 174 113 64,7% Passenger security fees 3.234 1.992 1.241 62,3% Baggage security fees 2.453 1.595 857 53,7% Handling 12.099 6.791 5.308 78,2% Centralised infrastructures 1.843 552 1.292 234,2% TOTAL AVIATION REVENUES 38.182 21.581 16.601 76,9% % incid. over Revenues 60,4% 68,7%
We also remind the reader that Aviation revenue trends are affected by the overall growth of traffic volumes of the Tuscan Airport System in the first 6 months of 2015 compared to the same period of the previous year, as well as by the increased rates of the Florence and Pisa airports since 26 May 2015 and 16 April 2015, respectively.
2. Non-Aviation revenues
At 30 June 2015, “Non-Aviation revenues” totaled approximately €11.5M.
Non-Aviation activities relating to the management of property and business activities of the two airports are: i. Sub-leased to third parties (Food, Retail, Real Estate, Car Rental and others); ii. Directly managed (Parking Lots, Advertising, VIP Lounge, Air Ticket Offices and Cargo Agency). In the first 6 months of 2015, revenues deriving from sub-leased activities accounted for 60.3% of Non-Aviation revenues, while those deriving from directly managed activities accounted for the remaining 39.7%. During the first 6 months of 2014, these percentages were respectively 62% and 38%.
The table below provides details on revenues from non-aviation activities carried out during the first 6 months of 2015 and those of 2014:
76 CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 % Diff. NON-AVIATION REVENUES Parking areas 2.646 1.704 942 55,3% Food 1.205 675 530 78,6% Retail 2.242 1.260 983 78,0% Advertising 1.064 587 477 81,4% Real Estate 980 725 255 35,2% Car rentals 1.801 1.542 259 16,8% Other subconcessions 682 440 243 55,2% Vip Lounge 390 124 265 213,6% Air tickets 233 239 -6 -2,6% Cargo agency 211 194 17 8,8% TOTAL NON-AVIATION REVENUES 11.454 7.488 3.966 53,0% % incid. over Revenues 18,1% 23,8%
We also remind the reader that the above-mentioned changes were positively affected by the Tuscan Airport System’s air traffic trends of the first 6 months of 2015 compared to the same period of 2014.
3. Revenues from construction services
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 % Diff.
TOTAL REVENUES FROM CONSTRUCTION SERV. 10.724 1.563 9.161 586,3% % incid. over Revenues 17,0% 5,0%
During the first 6 months of 2015, revenues for construction services totaled €10.7M (€1.6M in the first 6 months of 2014) and refer to revenues obtained with the services of development and improvement of airport infrastructure (building and expansion) provided under the two Pisa and Florence concessions. More specifically, the year 2015 was most affected by the investment made for the improvement and enhancement of flight infrastructures (runways and connections) in the Pisa airport for approximately €9.4M.
4. Other revenue and income
Other revenue and income at 30 June 2015 totaled €2.9M (€0.8M at 30 June 2014), with a positive difference of €2.1M, as detailed below:
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 % Diff. OTHER REVENUE AND INCOME Contingent assets 2.303 401 1.902 474,4% Services and consulting 91 87 4 4,4% Cost recoveries 465 293 172 58,6% Minors 23 23 0 1,0% TOTAL REVENUES AND INCOME 2.882 804 2.078 258,4% % incid. over Revenues 4,6% 2,6%
77 The “Contingent assets” item includes approximately €1.9M reflecting the posting to the income statement of the Provision for Liabilities and the write-off of liabilities no longer due and payable recognized after the update of estimates. More specifically, €0.9M have been posted as a consequence of the updates made to the legal proceedings regarding the dispute on the “Fire Protection Service from the Fire Brigade”. For further details, see the section “Provisions for liabilities and expenses” below.
COSTS
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 % Diff.
CONSUMABLES 610 381 228 59,9% Incid.% over Costs 1,1% 1,4%
PERSONNEL COSTS 19.374 10.976 8.398 76,5% Incid.% over Costs 36,4% 40,7%
COSTS FOR SERVICES Commercial services 7.030 5.787 1.243 21,5% Istitutional expenses 571 318 253 79,7% Other services 2.365 981 1.384 141,1% Personnel services 896 456 439 96,3% Maintenance services 2.600 1.062 1.538 144,9% Utilities 1.823 892 931 104,5% Opereating services 4.714 2.542 2.173 85,5% TOTAL COSTS FOR SERVICES 20.000 12.038 7.962 66,1% Incid.% over Costs 37,6% 44,7%
SUNDRY OPERATING EXPENSES 919 379 539 142,1% Incid.% over Costs 1,7% 1,4%
AIRPORT LEASES 2.122 1.673 449 26,8% Incid.% over Costs 4,0% 6,2%
COSTS FOR CONSTRUCTION SERVICES 10.213 1.488 8.725 586,3% Incid.% over Costs 19,2% 5,5%
TOTAL COSTS 53.237 26.935 26.302 97,7% Incid.% over Costs 100,0% 100,0%
At 30 June 2015, total costs totaled €53.2M, up by €26.3M compared to the final balance at 30 June 2014, when they totaled €26.9M, mainly due to the reasons indicated in the introduction. Furthermore, there is a difference of €8.7M due to the increase in the “Costs for construction services” item particularly after the higher investments made on flight infrastructures in the Pisa airport.
5. Raw and ancillary materials, consumables and goods This item refers to the cost of consumable materials, which totaled €610K (€381K at 30 June 2014), as broken down below:
78 CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff.
CONSUMABLES Stationery 26 12 13 107,2% Fuels, lubricants 322 226 96 42,4% Materials for car parking lots 3 0 3 Small tools 6 3 3 94,8% Security Contr. Serv. (mat.) 18 9 8 88,0% Clothing 139 78 61 78,6% Mat. for operating services 97 52 45 85,0% TOTAL CONSUMABLES 610 381 228 59,9% Incid.% over Costs 1,1% 1,4%
6. Cost of personnel The cost of personnel (€19.4M at 30 June 2015) increased by €8.4M compared to 30 June 2014. The difference is mainly due to the incorporation of the cost items of former AdF and, to a lesser extent, to the increase of the Group’s staff, as described in the specific section of the Report on Operations.
This cost item is broken down below: CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. PERSONNEL COSTS Salaries and Wages 19.229 10.959 8.269 75,5% Other labour costs 145 16 129 794,6% of which: Contributions to CRAL 5 6 -1 -15,6% Social Fund 4 5 -1 -26,1% Benefits to personnel 25 6 19 349,4% Administered and sundry 112 0 112 TOTAL COSTS OF PERSONNEL 19.374 10.976 8.398 76,5% Incid.% over Costs 36,4% 40,7% Remuneration includes salaries and wages, social security/pension contributions, and the amounts set aside in the Termination Benefit fund.
79 The table below provides details on the average annual staff (expressed in Equivalent Full Time) for the first 6 months of 2015 and any difference from the same period of 2014:
of of Interim Interim which which 2015 2014 % Pisa Florence Executives 10.5 9.0 +1.5 +16.7% - +1.5 Employees 491.0 286.2 +204.8 +71.6% +5.9 +198.9 Workers 191.8 94.7 +97.1 +102.5% +2.5 +94.6 TOSCANA 693.3 389.9 +303.4 +77.8% +8.4 +295.0 AEROPORTI
Jet Fuel 10.0 12.0 -2.0 -16.7% -2.0 -
Total Group 703.3 401.9 +301.4 +75.0% +6.4 +295.0
Please, note that in the table above 2 part-time units are considered as 1 full-time unit.
7. Costs for services
On the whole, costs for services in the first 6-month period 2015 and 2014 consist of: CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 % Diff.
COSTS FOR SERVICES Commercial services 7.030 5.787 1.243 21,5% Istitutional expenses 571 318 253 79,7% Other services 2.365 981 1.384 141,1% Personnel services 896 456 439 96,3% Maintenance services 2.600 1.062 1.538 144,9% Utilities 1.823 892 931 104,5% Opereating services 4.714 2.542 2.173 85,5% TOTAL COSTS FOR SERVICES 20.000 12.038 7.962 66,1% Incid.% over Costs 37,60% 44,70%
“Commercial services” for €7M, including mainly network development costs.
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. COSTS FOR SERVICES Commercial services 7.030 5.787 1.243 21,5% of which: Network development 6.915 5.724 1.190 20,8% Advertising commissions 59 56 2 4,4% Management of advertising systems 57 7 50 744,6%
80 “Institutional expenses” for € 571 K (€ 318 K at 30 June 2014), mainly including the cost of control and auditing boards.
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. COSTS FOR SERVICES Institutional expenses 572 318 253 79,6% of which: Directors’ and Auditors' fees 463 288 175 60,8% Directors’ business travels 93 14 79 563,3% Legal, notarial, meeting expenses 16 16 0 -1,1%
The difference is mainly due to the incorporation of the cost items of former AdF.
“Other services” €2.4M (€981K at 30 June 2014) - mainly include professional services, industrial insurance and communication costs. CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. COSTS FOR SERVICES Other services 2.365 981 1.384 141,1% of which: Professional services 1.269 672 596 88,7% Industrial insurance 442 273 169 61,7% Communications 192 28 163 577,0% DNV audits 13 7 6 91,8% Toscana Aeroporti Start Up 450 0 450
Start-up expenses for the creation of Toscana Aeroporti refer to the one-off amount spent for external consulting for the organizational start-up of the new Tuscan Airport System.
“Other personnel services” - €896K (€456K at 30 June 2014) - mainly include canteen, payroll service, transfers and employee training costs. CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. COSTS FOR SERVICES Other personnel services 896 456 439 96,3% of which: Canteen 591 303 288 95,3% Insurance 58 41 18 43,5% Preventive medicine and med. examinations 26 19 7 35,1% Training 60 11 49 437,5% Personnel recruitment 5 2 2 119,8% Payroll services 80 47 33 69,8% Journeys 76 34 42 126,2%
81 “Maintenance services” - €2.6M (€1.062K at 30 June 2014) - include airport maintenance ad infrastructures, systems and installations, equipment and vehicles.
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. COSTS FOR SERVICES Maintenance services 2.600 1.062 1.538 144,9% of which: Equiom./Car maint. 488 236 252 106,9% BHS system maint. 432 246 186 75,5% Maint. of infrastructures 1.227 434 793 182,5% IT maintenance 454 146 308 211,3%
“Utility services” €1.8M (€892K at 30 June 2014) - mainly include costs for electricity, gas, water and telephone services: CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. COSTS FOR SERVICES Utilities 1.823 892 931 104,5% of which: Electricity 754 196 558 284,6% Water 211 92 119 129,9% Telephones 103 46 57 123,0% Mobile phones 52 21 32 151,7% Gas 625 500 124 24,8% Minors 78 36 41 113,8%
“Operating services” - €4.7M (€2.5M at 30 June 2014) - mainly include external costs for porters, surveillance, cleaning, rentals, first aid care and other services typically associated with airport operations.
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. COSTS FOR SERVICES Operating services 4.714 2.542 2.173 85,5% of which: Porterage 1.130 719 411 57,2% Aircraft cleaning 330 143 188 131,7% Agency/Wareh. service 155 150 5 3,1% Cleaning 543 266 277 103,8% PRM Support 128 133 -4 -3,2% Surveillance service 977 241 736 305,6% Services Centre 109 115 -6 -5,0% Connection "Arco AZ" 162 92 71 77,0% Rental of mach. and equip. 334 159 175 110,1% Management of parking lots 236 45 191 419,6% Gardening 36 34 2 5,5% Vip Lounge 157 87 70 80,5% First Aid Service 268 210 59 28,1% Shuttle bus 147 148 -1 -0,7%
82 8. Sundry operating expenses “Sundry management expenses” - €919K (€379K at 30 June 2014) - mainly include taxes and levies, membership fees, sundry administrative costs, non-recurring costs and other minor entries.
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. SUNDRY OPERATING EXPENSES Publications 11 5 6 116,4% Ins. entities and sundry institutions 158 92 65 71,1% Taxes and levies 311 154 157 101,6% Entertainment 61 41 21 51,0% Revenue stamps 12 5 7 160,8% Non-recurring costs 225 12 213 1817,4% Post and telegraph 14 4 10 256,6% Rebates and allowances 0 0 0 291,2% Sundry administrative costs 126 67 59 88,8% SUNDRY OPERATING EXPENSES 919 379 539 142,1% Incid.% over Costs 1,7% 1,4%
9. Airport leases “Airport leases” - €2.1M (€1.7M at 30 June 2014) - include the rents paid for the concessions and the contribution paid to the fire-protection fund.
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. AIRPORT LEASES Concession and security fees 1.673 1.285 388 30,2% Fire Brigade fee 449 388 61 15,7% TOTAL AIRPORT FEES/LEASES 2.122 1.673 449 26,8% Incid.% over Costs 4,0% 6,2%
10. Costs for construction services Costs for construction services, totaling € 10.2M (€1.5M at 30 June 2014), arise from the investment made in the airport infrastructures under concession during the first 6 months of 2015 and have as contra entry the item “Revenues for construction services” with the addition of a 5% mark-up. Investments for the improvement and enhancement of flight infrastructures (runways and connections) in the Pisa airport mostly affected the current 6-month period for an amount of approximately €9.4M.
CONSOLIDATED CONSOLIDATED Abs. Diff. 2015/2014 % Amounts in €K JUN. 30, 2015 JUN. 30, 2014 2015/2014 Diff. TOTAL COSTS FOR CONSTRUCTION SERVICES 10.213 1.488 8.725 586,3% Incid.% over Costs 19,2% 5,5%
11. Amortization and write-downs This item totaled €4M in the first 6-month period 2015 (against €2M at 30 June 2014). It includes intangible asset amortization for €2.4M (€1.2M at 30 June 2014) and tangible asset depreciation for €1.6M (€0.8M at 30 June 2014).
83 12. Provision for liabilities and charges This item, with a value of €1.8M (against €773K at 30 June 2014), includes the amounts set aside in the provision for repair, which has been introduced in compliance with accounting standard IFRIC 12 starting from the year 2010, reflecting the year’s accrual required for future maintenance expenses relating to repairs and replacements required to keep the assets used under the two ENAC concessions in good operating conditions.
13. Provision for bad debt This item totals €79K (€58K at 30 June 2014) and consists in the amount set aside based on an estimate of the assumed realizable value of receivables existing at 30 June 2015.
14. Financial income This item totals € 1.7M (€110K at 30 June 2014) and mainly refers to the income proceeds received for the sale of the shares of Aeroporto di Firenze S.p.a. (€1.6M). Considering that the transfer of the stake at issue took place before signing the merger and before its effective date, and furthermore it was done with third parties differing from the reference shareholder (Corporación America Italia S.p.a.), the Directors recognized the amount of capital gains in the income statement. The item also includes interests receivable accrued on bank current accounts (€79K), interest on arrears (€14K) and other minor entries.
15. Financial expenses This item totals €878K (€430K at 30 June 2014) and is mainly composed of interests payable and commissions on bank current accounts for €574K (€196K at 30 June 2014), interest cost as defined in IAS 19 for €36K (€48K at 30 June 2014), financial expenses relating to the discounting of the provision for repair and replacement for €250K (€183K at 30 June 2014).
16. Profit (loss) of minority interest This item totals €10K (not reported at 30 June 2014) and indicates the valuation in the Shareholders’ Equity of the stakes held in associated companies (Immobili A.O.U. Careggi S.p.a. and Alatoscana S.p.a.).
17. Taxes for the period Taxes for the period have been determined, as required by IAS 34 and IAS 12, by applying the best estimate of the expected weighted average tax rate at period-end. This approach led to a tax burden of €1.6M, corresponding to a tax rate of 32.2% (against 49.4% in the first 6 months of 2014). The lower taxation expected is due to the tax relief introduced by the 2015 Finance Act effective from 1 January 2015 consisting in the deductibility of IRAP, as well as to the fact that the financial income generated by the sale of AdF shares is taxed separately (so-called “Pex”).
18. Minority interest’s loss (profit) for the period This item shows the result of the subsidiary Jet Fuel owned by minority shareholders. Based on 2015 property and dividend rights, the profit for the period of the subsidiary Jet Fuel - approx. €10K - is a minority interest to a 66.67% extent, which corresponds to approx. €7K (€19K in the first 6 months of 2014). The overall minority interest’s profit for the period is €13K (€18K at 30 June 2014).
84 19. Earnings per share Basic earnings per share at 30 June 2015 - €0.298 (€0.065 at 30 June 2014) - have been determined by dividing the Group’s profit for the period (€3.368K) by the weighted average of the ordinary shares outstanding during the period (11,318,661 shares), as there is no diluting factor.
NOTES TO THE MAIN ITEMS OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT: STATEMENT OF FINANCIAL POSITION
INTRODUCTION
With the merger by incorporation of Aeroporto di Firenze S.p.a. Into SAT S.p.a., the operations of the incorporated (or absorbed) entity have been recognized in SAT’s balance sheet for accounting and tax purposes effective from 1 January 2015. So, we point out that any difference between the book values of Gruppo Toscana Aeroporti at 30 June 2015 and those of the SAT Group at 31 December 2014 does not quite reflect the real situation because they are affected by the transaction described.
NON-CURRENT ASSETS Changes in non-current assets at 30 June 2015 are shown below.
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff.
NON-CURRENT ASSETS 182.150 103.526 78.624
More specifically, this aggregate consists of the following categories:
Intangible assets
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff.
INTANGIBLE ASSETS 149.805 75.860 73.945
In addition to the aforesaid, an aggregate amount of approximately €10.9M has been invested in intangible assets in the first 6 months of 2015, namely:
(Amounts in €K) Concession rights 9.547 Assets under construction 1.205 software 121 Total 10.873
Investments in intangible assets mainly concerned concession rights deriving from the improvement of maneuvering areas (€9.4M) in the Pisa airport. In addition to that, investments in
85 intangible assets consist in the development of the Master Plan (€559K), the expansion of aircraft apron areas in the Florence airport (€431K) and the purchase of software (€121K). No divestiture of assets was done in the first 6 months of 2015. Details on intangible assets are provided in Annex A.
20. Concession rights: their value at 30 June 2015 is €144.9M (€66.7M at 31 December 2014), with an increase of €78.2M mainly due to the reasons described in the introduction and, to a lesser extent, to the combined effect of investments and amortization for the period.
21. Industrial patent rights: their value at 30 June 2015 is €343K (€176 K at 31 December 2014), with an increase of €167K mainly due to the reasons described in the introduction and, to a lesser extent, to the combined effect of the purchase of software and amortization for the period.
22. Fixed assets and advance payments: At 30 June 2015, this item totaled €4.6M (€7.9M at 31 December 2014), with a reduction of €3.4M due to the capitalization of the investment made for the improvement of maneuvering areas in the Pisa airport to concession rights, in addition to the new ongoing investments and the other issues described in the introduction.
23. Tangible assets Amounts in €K June 30, 2015 Dec. 31, 2014 Diff.
TANGIBLE ASSETS 26.113 21.064 5.049
On the whole, investments for approximately €1.07M were made in the first 6 months of 2015, concerning:
(Amounts in €K) Owned land and buildings 385 Plant and machinery 451 Industrial and commercial equipment 23 Cars 59 Furniture and fittings 36 Hardware 44 Assets under construction 77 Total 1.074
Investments in tangible assets mainly consisted in works in the Pisa airport for the delocalization of Borgo Cariola (€380K) and the purchase of cars and ramp vehicles (€302K), the development of new advertising facilities (€38K) and the purchase of hardware (€44K). The values indicated in the Statement of Assets and Liabilities are net of the depreciation calculated based on the rates considered to be representative of the residual possibility of utilization of the related tangible assets.
Details on tangible assets are provided in Annex B.
86 24. Stakes in other entities At 30 June 2015, the Parent Company “TA” held other stakes, valued at purchase cost, which consist of:
I.T. Amerigo Vespucci S.p.a. (0.22 % of the capital): €50.7K; Consorzio Turistico Area Pisana S.c.a.r.l. (2.4% of the capital): €420; Scuola Aeroportuale Italiana Onlus (52.7% of the capital): €13.2K; Tirreno Brennero S.r.l. (0.27% of the capital): €654; Consorzio Pisa Energia S.c.r.l. (5.8% of the capital): €831; Montecatini CB S.c.r.l. (5.0% of the capital): €3.5K; Consorzio per l’Aeroporto di Siena (0.11% of the capital): €18K; Firenze Convention Bureau S.c.r.l. (0.97% of the capital): €1K; Firenze Mobilità S.p.a. (3.98% of the capital): €55K; Società Esercizio Aeroporto della Maremma S.p.a. (0.39% of the capital): €10K.
Scuola Aeroportuale Italiana Onlus has been listed with the other entities because it is a non-profit organization. Consorzio Turistico Area Pisana, Montecatini Congressi S.c.r.l., Tirreno Brennero S.r.l. and Consorzio per l’Aeroporto di Siena were winding up at the closing date of this Report.
25. Stakes in subsidiaries At 30 June 2015, the Parent Company “TA” held other stakes valued at purchase cost for €80K, referring to the sole entity “Toscana Aeroporti Engineering S.r.l.”. The business purpose of this entity is the provision of engineering and airport development support services for a minimum period of three years, exclusively in the favor of the Florence and Pisa airports. At 30 June 2015, the entity was not operating, so it was not included in the Consolidation Area.
26. Stakes in Associated Companies At 30 June 2015, the value of TA’s stakes in associated and related entities was €492K (€482K at 31 December 2014), as shown in the table below.
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff. Alatoscana Spa 377 377 0 Immobili AOU Careggi Spa 116 105 10 Total 492 482 10
For further considerations on the characteristics of the entities in question, see the section “Relationships with associated companies and related parties” of the Report on Operations. No impairment indicator applies to these stakes.
87 Financial Assets
27. Guarantee deposits At 30 June 2015 this item totaled €115K (€60K at 30 June 2014), and mainly refers to guarantee deposits issued in favor of utility providers (for connections), tobacco products, cash floats given to ticket offices and parking fees.
28. Receivables from others, due beyond the year At 31 December 2014, this item totaled €3,115K (€2,237K at 31 December 2013), with receivables deriving from: - two specific conventions with the State for infrastructural works (Law 299/79 and FIO) within the civil Pisa airport (€1,160K). Said receivables may be offset with the advances received from the State, posted among medium/long-term liabilities, over times that cannot be defined at present. - Requests for IRES reimbursement for the non-deduction of IRAP relating to the cost of personnel for €1,774K under art. 2, paragraph 1, of Leg. Dec. no. 201/2011 (converted into Law no. 214/2011) so-called “Manovra Monti”, completed by Leg. Dec. no. 16 of 2 March 2013 (so-called “Decreto semplificazioni fiscali” [tax simplification decree] converted, with amendments, into Law no. 44 of 26 April 2013), which established the possibility to apply the new provisions on the full deductibility of IRAP also effective for previous taxation period (2007-2011). - €181K of the loan granted to the associated company “Firenze Mobilità SpA” for works competed by this entity (to be repaid not earlier than 4 years after the testing of the works).
29. Prepaid taxes recoverable beyond the year Deferred tax assets and liabilities have been posted in their net amount when they could be offset in the same jurisdiction. The net balance is € 2,276K (€2,032K at 31 December 2014). This amount mainly includes taxes determined on the temporary differences due to taxed provisions (for repair, bad debt, etc.) and to the accounting of intangible assets (concession rights) according to IFRIC 12. We remind the reader that taxes for the period have been determined, as required by IAS 34 and IAS 12, by applying the best estimate of the expected weighted average tax rate at period-end. We also point out that, for the item at issue, prepaid taxes recoverable within the year, previously recognized in the specific item of current assets, have been reclassified for €842K.
CURRENT ASSETS
As shown in the table, current assets totaled €60,418K at 30 June 2015, with an increase of €18,759K compared to 31 December 2014.
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff. CURRENT ASSETS 60.418 41.659 18.759
More specifically, the main differences reflect:
30. Inventories There is no inventory of raw and ancillary materials, consumables and goods.
Trade and Sundry Receivables At 30 June 2015, this item shows €35,307K (€16,568K at 31 December 2014) and includes:
88
31. Receivables from customers At 30 June 2015, Receivables from customers, net of the Provision for bad debt, totaled €27,945K (€13,727K at 31 December 2014), as detailed below:
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff. Toscana Aeroporti 31.160 15.654 15.506 Parcheggi Peretola 17 0 17 Jet Fuel 318 273 45 Total gross receivables 31.495 15.927 15.567 Bad debt reserve -3.550 -2.200 -1.350 Total net receivables 27.945 13.727 14.218
The Provision for bad debt (entirely of the Parent Company, “TA”) has been increased over the period by contributing €79K, while €19K have been used. The details of this item are given below (in €K): Contribution Amounts in €K Dec. 31, 2014 prov. use June 30, 2015 from merger
Bad debt reserve 2.200 1.289 79 19 3.550
32. Receivables from associated companies Details of these receivables (in €K) are given in the table below:
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff. Alatoscana Spa 65 54 11 Immobili AOU Careggi Spa 260 309 -49 Total 325 364 -39
33. Tax receivables At 30 June 2015, this item showed €4,293K (€300K at 31 December 2014), including: - a VAT credit of the Parent Company relating to previous years, for which a reimbursement of €3,456K has been requested (years 2009, 2013, 2014); - a VAT credit of the Parent Company relating to the current year for €642K; - a VAT credit of the subsidiary Jet Fuel for €190K; - other lower tax credits for €5K.
34. Receivables from others, due within the year The item “Receivables from others, due within the year” includes (amounts in €K):
89 Amounts in €K June 30, 2015 Dec. 31, 2014 Diff. Accrued income 1.063 499 564 Advance payments to suppliers 651 651 0 Receipts for monopoly products 297 275 22 Receipts for parking lots 144 122 23 Accrued income for capital increase expenses after merger 0 378 -378 Other minor entries 589 254 336 Total 2.744 2.177 567
“Prepaid expenses” mainly referred to consumables such as airport uniforms (higher expense during the high season), supplies invoiced in advance, membership fees, insurance. “Advances paid to suppliers” mainly refer to the “People Mover” project. “Receivables for collections” are due from the providers of tobacco points of sale and for the management of the receipts of parking lots (including the Telepass service). Prepaid expenses related to capital increase include the costs incurred at 31 December 2014 for the legal and financial consultants that assisted the company in the Merger by incorporation of AdF into SAT promoted by the common Shareholder, which will be finalized during the first half of 2015. These costs, for a total amount of €1,095K (including the expenses incurred in the first 6 months of 2015), have been reclassified in reduction of the Shareholders’ Equity for €738K (after taxation) after TA’s capital increase for the incorporation of AdF.
35. Cash and cash equivalents
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff. Cash and cash equivalents 25.111 25.091 20
For more details, see Statement of Cash Flows.
SHAREHOLDER’S EQUITY AND LIABILITIES
The differences in the Shareholders’ Equity occurred during the first 6-month period 2015 are detailed below:
Amounts in €K June 30, 2015 Dec. 31, 2014 CH.
CAPITAL AND RESERVES 105.415 66.736 38.679
The Shareholders’ Equity increased by €38.7M as a consequence of the combined effect of the reduction in the fair value reserve after the sale of AdF shares (for approx. €1.6M) and of the net capital contribution due to the merger after the incorporation of the AdF Group (for approx. €41.3M). This amount is shown in the consolidated Shareholders’ Equity table as sum of item “Capital increase for merger by incorporation of AdF” for €14.4M plus item “Other entries arising from the merger by incorporation of AdF” for €26.9M, equivalent to the al Shareholders’ Equity of the AdF Group at 31 December 2014 - €44.2M net of the Dividends distributed before signing the merger for €2.9M.
90 Furthermore, after the SAT capital increase done to complete the incorporation of AdF, reserves were reduced by €738K as a consequence of the recognition in the Shareholders’ Equity of share capital increase costs. For more details on each individual item, see the specific tables in the financial statements.
More specifically, the Shareholders’ Equity consists of the following items:
36. Share Capital At 30 June 2015, the fully paid-up share capital consisted of 18,611,966 ordinary shares with a nominal value of €1.65 each (9,860,000 shares at 31 December 2014). The item was increased because, at the effective date of the merger, Toscana Aeroporti (former SAT) increased its share capital for a total amount of €14,440,743.90 by issuing 8,751,966 shares for the purpose of the exchange. For details on Shareholders, see the table and section “Shareholders of the Parent Company” in the Report on Operations.
37. Capital reserves Capital reserves consist of: - A share premium reserve for €18,941K created with the paid capital increase upon listing SAT S.p.a. on the Stock Exchange in July 2007. - Revaluation reserves recorded at 30 June 2015 for a global amount of €435K, consisting of the positive monetary revaluation balance obtained under Law no. 413/91, net of substitute tax for €83K. A partial tax deferral applies to this reserve. No fund has been set aside for this tax because no transaction is expected that could determine its taxation. - A legal reserve for an amount of €2,548K. The increase of €205K compared to 31 December 2014 stems from the allocation of the year’s profit for 2014 as deliberated by the Shareholders’ Meeting during their approval of 2014 financial statements. - Statutory reserves for an amount of €25,876K. The increase of €5K stems from the allocation of the year’s profit for 2014 as deliberated by the Shareholders’ Meeting during their approval of 2014 financial statements. - Other reserves mainly created from the reserve created after the merger by incorporation of AdF for €25,807K, net of €738K spent for the merger and capital contributions paid under art. 55 of DPR 917 for €66K.Pursuant to point 5 of the first paragraph of art. 2426 of the Civil Code, we specify that there is no restriction on available reserves.
38. IAS adjustments reserve This reserve includes: (i) the IAS reserve (negative for €-711K) net of theoretical taxation created on 1 January 2005 upon First Time Adoption to reflect the impacts on the Shareholders’ Equity of the adoption of international accounting standards; (ii) the IAS reserve (negative for €-2,517K) created after the application of the new international standard IFRIC 12 since 1 January 2011; (iii) the IAS reserve (negative for €850K) stemming from the Incorporated Entity (former ADF).
91 39. Fair Value reserve At 30 June 2015, this reserve was empty (€1,595K at 31 December 2014). The reserve was closed after the sale of the stake held in Aeroporto di Firenze S.p.a. finalized before the signature of the deed of merger and with the effectiveness thereof.
40. Profit/(loss) carried forward This item includes profits carried forward for €2,376K (€107K at 31 December 2014). The difference is due for €263K to the actuarial effect of the recalculation of the Termination Benefit according to IAS 19 and for €2,007K to the profits coming from the Incorporated Entity being carried forward.
41. Group’s profit (loss) for the period This item shows the result of the TA Group at 30 June 2015, €3,368K, against €4,199K at 31 December 2014.
42. Minority interest Based on 2015 financial statements, the 66.67% minority interest corresponds to €101K (against €138K at 31 December 2014). The difference is mainly due to the distribution of the dividends of the subsidiary Jet Fuel.
43. Other components of the Statement of Comprehensive Income The value at 30 June 2015 is broken down below:
Other components of the Statement of Comprehensive Income at June 30, 2015
TOT. OTHER PROFIT/(LOSS) FAIR VALUE MINORITY COMPON. OF SITUATION AT JUNE, 30, 2015 CARRIED RESERVE INT. S.E. STATEM. OF FORWARD COMP. INC.
Other comprehensive profit/(loss) that will not be subsequently reclassified to the Income Statement: - Profit (loss) arising from the determination of the Termination Benefit before tax 0 256 7 263
Other comprehensive profit/(loss) that will be subsequently reclassified to the Income Statement: - Profit/(Loss) arising from the redetermination of available-for-sale financial assets 0 0 0 0
COMPREHENSIVE PROFIT (LOSS) FOR THE PERIOD 0 256 7 263
92 Other components of the Statement of Comprehensive Income at Dec. 31, 2014 TOT. OTHER PROFIT/(LOSS) FAIR VALUE MINORITY COMPON. OF SITUATION AT DEC. 31, 2014 CARRIED RESERVE INT. S.E. STATEM. OF FORWARD COMP. INC.
Other comprehensive profit/(loss) that will not be subsequently reclassified to the Income Statement: - Profit (loss) arising from the determination of the Termination Benefit before tax 0 -273 -11 -284
Other comprehensive profit/(loss) that will be subsequently reclassified to the Income Statement: - Profit/(Loss) arising from the redetermination of available-for-sale financial assets 489 0 0 489
COMPREHENSIVE PROFIT (LOSS) FOR THE PERIOD 489 -273 -11 205
The tax effect regarding the other components of the Statement of Comprehensive Income is broken down below:
Tax G ross SITUA TION AT JU N E 30, 2015 (charge)/ N et Value value benefit - Profit (loss) arising from the determ ination of the Term ination Benefit before tax 363 -100 263
- Profit/(Loss) arising from the redeterm ination of available- for-sale financial assets 0 0 0
TOTAL 363 -100 263
Tax G ross SITUA TION AT DEC. 31, 2014 (charge)/ N et Value value benefit - Profit (loss) arising from the determ ination of the Term ination Benefit before tax -392 108 -284
- Profit/(Loss) arising from the redeterm ination of available- for-sale financial assets 489 0 489
TOTAL 97 108 205
MEDIUM/LONG-TERM LIABILITIES
Details of medium/long-term liabilities during the period considered are given below:
Amounts in €K June 30, 2015 Dec. 31, 2014 CH.
MEDIUM-LONG TERM LIABILITIES 70.228 41.300 28.928
More specifically, this aggregate consists of the following categories:
93
44. Provisions for liabilities and expenses The provision for liabilities and expenses totaled €1,968K at 30 June 2015 (against €33K at 31 December 2014). Details of the provision are given below. Differences are mainly due to the use of the provision for the agreement made with the contractor of the works for the expansion of the passenger terminal concluded in 2012 (for €1,365K). Contribution Amounts in €K Dec. 31, 2014 prov. use June 30, 2015 from merger
Provisions for liabilities and charges 33 3.604 6 -1.676 1.968
The composition of these provisions (entirely of the Parent Company, “TA”) is given below:
- Severance pay and similar obligations It includes the provision of approx. €33K (unchanged with respect to 31 December 2014) relating to the supplemental customer allowance due under the Collective Economic Agreement of sales agents and representatives.
- Others (provision for liabilities and future expenses) The provision for liabilities and future expenses totaled €1,935K (non-existing at 31 December 2014) and the difference is mainly due to the provision created by the merger by incorporation of AdF, mainly consisting of (€1,430K) contributions paid in connection with the Fire Brigade Fire Protection Service dispute described below. The residual amount of the Provision for liabilities refers to the best estimate of potential liabilities associated with other smaller pending disputes: i) for €120K as best estimate of the liabilities that may arise in connection with the risk of disbursement for the doubling of general aviation rights – Art. 2 duodecies of DL dated 30 September 1994; ii) €302K as expected expense for the possible unfavorable outcome of the assessment resulting from the Guardia di Finanza (Tax Police) inspection occurred during 2003 regarding the taxes of previous years (as regards this dispute, ADF had favorable first and second instance judgments and the adverse party filed an appeal with the Court of Cassation). The amounts set aside by the Company to face said potential risks deriving from ongoing litigation are deemed to be appropriate in connection with the predictable outcome of the legal proceedings based on the opinions of independent legal consultants. A regards the Fire Brigade Fire Protection Service, AdF (today TA), together with other management companies, initiated specific legal actions both with the administrative and tax courts opposing the last note issued by ENAC on 31 July 2009 that established the final allocation of the contribution to the fire protection fund due by the individual airport management companies. In particular, AdF (today TA) is one of the twenty-four airport management companies that, on the basis of the most recent ENAC note of 31 July 2009, are required to pay larger sums and therefore have a real and current interest in challenging this measure. The main purpose of the legal proceedings brought forward is to challenge the constitutionality of the provisions of paragraph 3-bis of Article 4 of Legislative Decree No. 185/2008, which entered into force on 29 January 2009 and allocated the fund resources for purposes totally unrelated to those initially envisaged by the 2007 National Finance Law. It is indeed believed that any obligation for airport operators to contribute to the fund would represent an asset tax imposed in breach of the principle
94 of taxpaying capacity set out in Article 53 of the Constitution, as well as in evident violation of the principles of equality and reasonableness, as set out in Article 3 of the Constitution. After the positive judgments of the Administrative Court of the Region Lazio (TAR Lazio no. 045588/2013) and of the Tax Court of Rome (CTP Roma no. 10137/51/14), now even a Civil Judge pronounced a positive opinion on the matter and fully admitted the petition of an airport management company who opposed against the court order issued by the competent Administrations and confirmed that the Fire Protection Fund is a special-purpose tax and therefore falls under the jurisdiction of the Tax Court. The Court of Florence, on 16 June 2015, issued judgment no. 2139/2015 and ascertained that a joinder is possible between the warning proceeding and the previous judgment pending before the Court of Rome RG no. 43796/2012. Furthermore, the Court of Florence: i) declared that the Court of Florence has no jurisdiction, but the Court of Rome has; ii) nullified the opposed court order no. 4412/12 for a value of € 934,309.00 plus interests; iii) fixed as term for the re-opening of the trial before the Court of Rome 19 October 2015 (three months); iv) shared the legal expenses equally between the parties. On 28 July 2015, TA (former AdF), together with the other airport management companies involved, notified the competent Administrations about the opposition against 2015 ENAC Note of 29 May 2015 that established the subjective and objective framework of contribution to the Fire Protection Fund based on the air traffic reported in 2014. TA brought legal proceedings before the Court of Rome against the Ministry of the Interior, the National Fire Brigade, ENAC, the Ministry of the Economy and Finance and the Ministry of the Infrastructures and Transportation to obtain that said Court ascertain and declare the non- existence of any obligation for TA to pay the contribution of € 357,702 to the Fire Brigade protection services fund for the year 2013 and sentence the Ministry of the Interior and the National Fire Brigade and, in the second place, each defendant Administration for their part, to refund the claimant any amount paid for the year 2013. On 25 June 2015, the hearing for the admission of preliminary evidence took place and the Judge put off his decision and clarified that probably, without prejudice to any decision regarding the request put forward by TA pursuant to art. 210 CPC, he will defer the case to specify the outcome and, at the end of that hearing, he will examine the jurisdiction and the constitutional lawfulness issues. As regards the position of the Pisa airport (former SAT), the company has been regularly paying the aforesaid contribution since 2010 based on its recognition of the levy as rate. For the years 2007-2009, the company accordingly posted the aggregate debt in its balance sheet as account payable to the Revenue Agency while waiting for the conclusion of the petition submitted by the Ministry of the Interiors, presently going through the first instance trial (classified in the item “Other accounts payable due within the year”). In this dispute, the company is in line with the objections raised by the other airport management companies. Based on the positive evolution of said petitions and with the support of the opinions of independent consultants, TA adjusted the estimate of the Provision for Liabilities to €1,430K, and released €311K to the income statement. Furthermore, for the same considerations, former AdF accounts payable relating to the years 2007-2009 have been posted as contingent assets for approx. €567K.
95 45. Provisions for repair and replacement This provision (valued according to the best estimate of the expense required to fulfill the obligation at the closing date of the report) includes the amounts spent for the maintenance and repair of infrastructures in the Florence and Pisa airports, to be returned in perfect maintenance conditions to the Grantor at the end of the concession period. The global value of this item at 30 June 2015 was €20,020K, up by €7,742K with respect to 31 December 2014 due to the effect of the incorporation of AdF, of the contributions paid to the provision in the first 6 months of 2015, partially offset by the uses of the period. Details are given below:
Amounts in €K Dec. 31, 2014 Contribution prov. use June 30, 2015 Provisions for repair and from merger replacement 12.278 6.344 2.020 -622 20.020
Depending on the estimated time of its use within the year, this provision is allocated to medium/long-term liabilities (€17,096K at 30 June 2015) and to current liabilities (€2,924K at 30 June 2015).
46. Employee termination benefits As indicated above, the ETB is considered as a defined benefit obligation to be recognized as recommended by IAS 19 - “Employee Benefits”. The amount of the termination benefit has been recalculated by using the so-called “Projected Unit Credit Method”, by making actuarial valuations at the end of the reference period. The amendment made to IAS 19 – “Employee Benefits” eliminates the option to defer the recognition of actuarial gains and losses with the corridor method and required, instead, that the deficit or surplus of the entire provision be presented in the statement of financial position, while the labor cost components and net financial expenses should be recognized separately in the income statement, with actuarial gains and losses deriving from the re-measurement of the liability and asset being recognized as items of the Statement of Comprehensive Income. Furthermore, the return on assets included in net financial expenses should be determined on the basis of the discount rate of the liabilities, and no longer on the return expected from them. As regards the economic-financial scenario, the parameters used for the valuation of the Pisa and Florence staffs at 30 June 2015 are: - annual technical discount rate: 2.06% - annual inflation rate :0.60% for 2015 – 1.2% for 2016 – 1.5% for 2017 and 2018 – 2% from 2019 on (2.0% at 31 Dec. 2013); - annual ETB increase rate: 1.95% for 2015 – 2.4% for 2016 – 2.625% for 2017 and 2018 – 3% starting from 2019. As far as the discount rate is concerned, the Corporate AA iBoxx 10+ index has been selected as criterion for the valuation of this parameter, as the duration of 10+ years is suitable for the average time of permanence in the two staffs being considered. There is no defined benefit scheme for the executive personnel of the company. The value of the consolidated liability at 30 June 2015, as required by IAS 19, was €6,638K (€4,207K at 31 December 2014). This provision is posted net of the advance payments and settlements made during the period examined and shows an increase of €2,431K compared to 31 December 2014, as specified below (in €K):
96 Contribution Actuarial Amounts in €K Dec. 31, 2014 from merger (gain)/loss prov. use June 30, 2015 Termination benefits and other personnel-related provisions (24) 4.207 2.962 -363 52 -220 6.638
The difference shown in the Statement of Comprehensive Income (€+263K) corresponds to the actuarial gain of €363K, after a taxation of €100K. The valuation of future benefits is obviously affected by all the assumptions required for its identification; therefore, in order to obtain the sensitivity shown by the actual value as determined above compared to said assumptions, some tests have been conducted to provide the difference in the actual value against a given difference in some of the assumptions adopted, which may mostly affect that value. The table below provides the sensitivity analysis of the provision with changing discount rates.
D BO (Dec. 31, C hanges in discount 2014) rate C onsolidated
0.0% € 4.206.853 0.50% € 4.033.613 0.10% € 4.171.112 -0.10% € 4.243.163 -0.50% € 4.394.343
Finally, the table below provides a prediction of disbursement of the provision.
C onsolidated
D isbursem ents expected in€ the 1st485.268 year D isbursem ents expected in€ the 2nd 281.368 year D isbursem ents expected in€ the 3rd 247.585 year D isbursem ents expected in€ the 4th 500.167 year D isbursem ents expected in€ the 5th 168.357 year
47. Financial liabilities This item (entirely of the Parent Company, “TA”) shows €42,687K (against €24,700K at 31 December 2014). The details of non-current and current financial liabilities are given below (in the “Loans” item). The amount of €4,412K refers to the portions expiring within the subsequent twelve months of the long-term loans shown in this section.
97 Dec. 31, Contribution reimburse- Amounts in €K draw-down reclass. June 30, 2015 2014 from merger ment
Non-current financial liabilities 24.700 10.623 10.000 0 -2.636 42.687 Current financial liabilities 2.068 1.408 0 -1.700 2.636 4.412 Total 26.768 12.031 10.000 -1.700 0 47.099
The total increase in financial liabilities, €20,331K, refers for €12M to the incorporation of AdF, for €10M to draw-downs made in the period, and for €1.7M to repayments of portions of capital at the relevant due dates. Said financial liabilities refer to two long-term loans granted by the banks “Banca Infrastrutture Innovazione e Sviluppo” (of the Intesa San Paolo Group) and “MPS Capital Service” to support infrastructure investments. These loans must be repaid before June 2022 (€20M, with a residue of approx. €8M) and September 2027 (€40M completely used up), respectively, with a Euribor 6 months interest rate plus a spread. The amount posted in the balance sheet substantially reflects the value of the amortized cost of the liability as provided for by IAS 39. The aforesaid medium/long-term financial debt is required to comply with certain financial indices defined in the related agreement, such as a certain net financial position/EBITDA and net financial position/Shareholders’ Equity, according to the definitions agreed with the lending counterparties and measured on the book values of the Parent Company for the €40M loan and of the Group for the €20M loan. We finally point out that, in addition to the aforesaid parameters, the €20Mloan agreement requires a minimum amount of €1M to be made available and deposited in a current account pledged as security for the same loan and that no extraordinary transaction be entered into with third parties (entities not of the Group) without the previous written consent of the lending banks. Failure to comply with the covenants and the other contractual obligations undertaken with the loan in question shall imply, if not remedied under the agreement provisions, the anticipated reimbursement of the residual loan amount. At 30 June 2015 the Company was compliant with all the above-mentioned parameters.
48. Other payables due beyond the year Payables due beyond the subsequent year (entirely of the Parent Company, “TA”) consist of €1,839K (against €1,839K at 31 December 2014). More specifically: i) €32 K refer to guarantee deposits received from customers as performance bonds for services provided to them; ii) €1,807K refer to the advances received from the Ministry of Transport pursuant to Law 299/79 (€774K) and FIO works (€1,033K) that will be offset against accounts receivables from others due beyond the year. At the date of this Report, it is impossible to predict the date of closure of the preliminary investigation by the competent bodies.
98 CURRENT LIABILITIES
Changes in non-current assets occurred during the period are shown below.
June 30, Dec. 31, Amounts in €K Diff. 2015 2014
CURRENT LIABILITIES 66.929 37.150 29.779
More specifically, this aggregate consists of the following categories:
49. Bank overdrafts At 30 June 2015, the TA Group had a short-term bank indebtedness of €10,535K referred to the use of lines of credit for current operations. These facilities refer entirely to relationships existing with former AdF for an equivalent amount at 31 December 2014. They have a duration of three months and interest rates negotiated at each due date, with the application of a spread on the Euribor rate for the period. At present, the maximum spread applied has been 75 bp and there is no financial covenant on said loans. Finally, we inform the public that in July 2015, for a better management of the liquidity of the Group, €6M have been repaid.
50. LOANS At 30 June 2015, the TA Group had bank loans for €4,412K (€2,068K at 31 December 2014), exclusively referred to the reimbursement prediction in the subsequent year of long-term loans (which are also shown in the related table ad a comment of non-current financial liabilities).
The Net Financial Position at 30 June 2015, as shown in the Report on Operations in compliance with Consob Resolution prot. no. 6064293 of 28 July 2006, is specified below:
99 Consolidated Consolidated 2015/2014 Amounts in €K June 30, 2015 Dec. 31, 2014 Abs. Diff.
A. Cash on hand and at banks 25.111 25.091 20 B. Other cash and cash - - - equivalents C. Securities held for trading - - - D. Liquid assets (A) + (B) + (C) 25.111 25.091 20 E. Current financial receivables - - - F. Current bank payables 10.535 - 10.535 G. Current portion of non- 4.412 2.068 2.344 current indebtedness H. Other current financial payables due to leasing - - - companies I. Current financial 14.946 2.068 12.878 indebtedness (F) + (G) + (H) J. Net current financial (10.165) (23.023) 12.859 indebtedness (I) - (E) - (D) K. Non-current bank payables 42.687 24.700 17.987 L. Bonds issued - - -
M. Other non-current payables - - - due to leasing companies
N. Non-current financial 42.687 24.700 17.987 indebtedness (K) + (L) + (M) O. Net financial indebtedness 32.523 1.677 30.846 (J) + (N)(NFI)
See comments in the Report on Operations and to the “Statement of Cash Flows” for a more in- depth analysis of this item.
51. Tax liabilities The aggregate amount of this item at 30 June 2015 is €10,045K (against €5,887K at 31 December 2014), broken down below:
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff.
Municipal surtax for passenger boarding 8.791 4.672 4.119 IRES/IRAP due 250 316 -66 IRPEF due for employees and self-employed prof. 676 256 420 Higher fees due for private flights 160 155 5 Local taxes 147 401 -254 VAT due 20 86 -66 Total 10.045 5.887 4.158
100 Accounts payable to the Revenue Agency for the municipal surtax on passenger boarding fees, presently consisting of €8.8M, established by art.2, paragraph 11, of Law no. 350 of 24 December 2003 starting from 1 June 2004, has increased by further €4.1M mainly as a consequence of the incorporation of AdF and partially due to the increase in passenger traffic recorded at the end of the first 6 months of 2015 compared to the aggregate traffic of the two airports at mid-2014. Even the other increases in “Other tax liabilities” mainly derive from the incorporation of AdF.
52. Payables to suppliers At 30 June 2015, Payables to suppliers totaled €22.3M (€17M at 31 December 2014), up by €5.3M after the incorporation of AdF’s €6.6M of the Payables to suppliers.
53. Payables to social security institutions This item includes accounts payable to social security and pension institutions (INPS, INAIL) at 30 June 2015, for a total of €2,043K (against €1,710K at 31 December 2014). The difference is the result of the amounts accrued with the incorporation of AdF’s debt for €1.1M, reduced by the payment of €768K during the first 6 months of 2015.
54. Other payables due within the year Other payables due within the year at 30 June 2015 consist of €14.4M (€8.4M at 31 December 2014), which include the following items:
Amounts in €K June 30, 2015 Dec. 31, 2014 Diff. Concession fees 1.827 1.500 327 Ministry of Transport 2.205 0 2.205 Air/bus/train ticket office receipts 838 761 77 Due to employees 5.699 3.207 2.492 Insurance policies and damage excesses 84 96 -12 Directors' and Auditors ' Fees 213 26 187 Fire-protection service 2.250 2.292 -42 Due to banks on a quarterly basis 23 129 -106 Deferred income 914 124 790 Other minor entries 326 298 28 Total 14.378 8.433 5.945 More specifically: - concession fees are increased in connection with the aggregate fee of the Florence airport after the merger by incorporation and, to a lesser extent, with the increased traffic. We point out that, effective from 26 May 2015 (enforcement of new airport fees in Florence), concession fees in the Florence airport has no longer been reduced under Law 248/2005. - Accounts payable to the Ministry of Transport, €2,2M, derive from an amount collected by the Florence airport in 2013 after the positive outcome of trial no. 2403/2012 that compensated for damages suffered for the non-improvement of airport fees in the years 1999-2005, which, on a precautionary basis, had not been recognized to the income statement before the last-instance trial, also because of the appeal lodged with the Attorney General’s Office. - Ticket office receipts have increased due to the higher traffic reported for the first 6 months of 2015 compared to the same period of 2014. - The increased employee salaries and Directors’ and Auditors’ fees is mainly due to the
101 incorporation of the debt of former AdF. - The balance of accounts payable to the Revenue Agency for the portion related to mid-2015 of the contribution paid for the Fire Brigade fire protection service introduced by the 2007 Finance Law has been paid by the Company. This account payable also includes the amounts set aside while waiting for the outcome of the pending case initiated by the same Ministry against the Company for the collection of arrears for the years 2007-2009. Furthermore, we specify that specific appeals have been lodged by some airport management companies (including former AdF) both with the jurisdictional court and with the tax court, as agreed with Assaeroporti, to ask for the annulment of the administrative measures regarding the payment of the so-called Fire Brigade protection services, even in the light of the enforcement of the measures described in paragraph 3-bis of art. 4 of Leg. Dec. 185/2011, which allocated the resources of the provision for totally different purposes from those of reducing the cost of the fire protection service in airports. TA, as other airport management companies, has currently set aside the amounts determined by ENAC for the Provision, which is still associated with that purpose while waiting for the outcome of the pending cases. TA thinks that the amounts allocated to this account payable are appropriate to face the risk of a possible payment while waiting for the outcome of the pending cases. For further considerations, see the section “Provisions for liabilities and expenses”. - Prepaid expenses refer to non-aviation revenues invoiced in advance. The difference mainly reflects the seasonal nature of the business.
55. Advanced payments Advance payments totaled €278K against €276K at 31 December 2014, which substantially confirms the amount of advance payments made to customers.
COMMITMENTS AND GUARANTEES
At 30 June 2015, total commitments and guarantees (regarding the Parent Company) were €21,344K (€17,200K at 31 December 2014), consisting of €13,145K of third party suretyships in favor of TA and €8,199K of suretyships given by third parties on behalf of TA. The difference is mainly due to the incorporation of AdF.
June 30, Dec. 31, Amounts in €K Diff. 2015 2014 Third-party suretyships in favour of Company 13.145 8.728 4.417 Third-party suretyships on behalf of Company 8.199 8.472 -273 Total commitments and guarantees 21.344 17.200 4.144
Suretyships provided by third parties in the favor of TA (€13.1M) mainly refer to performance bonds for contract works, for compliance with agreements by sub-licensees, air carriers and other customers. The suretyships provided to third parties on behalf of TA (€8.2M) mainly refer to performance bonds in favor of ENAC to ensure full and exact fulfillment of the obligations established with the two 40-year Conventions signed; of the Municipalities of Pisa and Florence to ensure compliance with municipal regulations in the execution of works for the expansion of the airport infrastructures by TA; and minor entries.
102
ADDITIONAL INFORMATION
Directors’ and Auditors’ fees For details on Directors’ and Auditors’ fees, see the special table in the Report on Remuneration produced under art. 123-ter of Leg.Dec. no. 58/98 (published in the Company’ websites). We point out that Directors and Statutory Auditors held no interest in non-recurring transactions performed during the first half of 2015, nor do they hold any in similar transactions initiated during previous years and not yet concluded. At the closing date of this Condensed Consolidated Interim Financial Report, no loan has been given to any member of the Board of Directors or Board of Statutory Auditors.
Relationships with related parties See the specific section in the Report and Annex C to this Condensed Consolidated Interim Financial Report at 30 June 2015 for a summary of the main effects on the financial statement of the transactions performed by the Parent Company with related parties, whose amount is scarcely significant.
Significant non-recurring events and transactions Pursuant to Consob’s Notice of 28 July 2006, we specify that no significant non-recurring transaction was performed.
Atypical and/or unusual transactions According to Consob’s Notice no. 6064293 of 28 July 2006, we disclose the information that no significant non-recurring events and transactions took place during 2015.
Fair value measurement hierarchy As regards the financial instruments recognized in the Financial Position at fair value, IFRS 7 requires these values to be classified based on a hierarchy of levels that reflects the significance of the input used in the determination of fair value. The following levels are identified: - Level 1 – the price of the asset or liability being measured is drawn from an active market; - Level 2 – the inputs used are not the listed prices indicated above, but may be observed on the market, either directly (prices) or indirectly (price derivatives); - Level 3 – the inputs are not based on observable market data.
These notions are not applicable to the Condensed Consolidated Interim Financial Report of the TA Group because the stake held in Aeroporto di Firenze S.p.a., whose fair value (€1,723K at 31 December 2014) could be qualified as Level 1 because measured on the basis of an official listing in the Italian stock exchange, was sold.
Authorization to publication This document has been approved by the Board of Directors on 28 August 2015 and made available of the public on the same date upon the Chairman’s authorization.
For the Board of Directors: Marco Carrai Chairman
103
ANNEXES TO THE 2015 CONDENSED CONSOLIDATED
INTERIM FINANCIAL REPORT
104
TABLE OF CHANGES IN INTANGIBLE ASSETS FOR THE FIRST HALF OF 2015 (amounts in €K)
PATENT AND WORK IN INTELLECTU PROGRESS CONCESSION AL AND TOTAL RIGHTS PROPERTY ADVANCE RIGHTS PAYMENTS
Historical cost 81.696 6.680 7.989 96.364
Accumulated depreciation -14.000 -6.504 0 -20.504
A - Value at Dec. 31, 2014 67.695 176 7.989 75.860
VARIAZIONI DI PERIODO
Purchases 10.912 124 1.205 12.240 Previous years' work in progress 7.331 0 -7.331 0 Disinvestments/Decreases 0 -3 -1.365 -1.368 Historical cost of assets after merger by incorporation of Florence Airport 73.501 2.974 4.114 80.589 (ex-AdF) Accumulated depreciation of assets from merger by incorporation of -12.383 -2.787 0 -15.169 Florence Airport (ex-AdF) Depreciation -2.206 -142 0 -2.348 B - Balance of differences 77.155 167 -3.377 73.945
Historical cost 166.109 9.777 13.308 189.194
Accumulated depreciation -21.259 -9.435 -8.696 -39.389
Value at 30 June 2015 (A+B) 144.850 343 4.612 149.805
105
Ann. A
TABLE OF CHANGES IN TANGIBLE ASSETS FOR THE FIRST HALF OF 2015 (amounts in €K)
LAND, BUILDINGS AND RUNWAY INDUSTRIAL ASSETS INSTALLATIONS PLANT AND AND UNDER OTHER TOTAL that can owned by MACHINERY COMMERCIAL CONSTRUCT ASSETS be the EQUIPMENT ION freely Company assigned
Historical cost 4.189 15.250 16.065 677 0 8.850 45.031
Accumulated depreciation -3.364 -876 -11.636 -489 0 -7.602 -23.967
A - Value as at Dec. 31, 2014 826 14.374 4.429 189 0 1.248 21.064
CHANGES FOR THE PERIOD
Purchases 211 385 569 23 77 152 1.416 Previous years' work in progress 0 0 0 0 0 0 0 Disinvestments/Decreases 0 0 -327 0 0 -15 -342 Historical cost of asset from merger by incorporation of 8.357 509 9.254 301 357 5.644 24.423 Florence Airport (ex-AdF) Accumulated depreciation of asset from merger by -6.854 -474 -7.068 -274 0 -4.246 -18.915 incorporation of Florence Airport (ex-AdF) Depreciation -226 -73 -826 -20 0 -505 -1.651 Reversal of previous years' accum. depr.0 0 103 0 0 15 118 B - Balance of changes 1.488 347 1.705 30 434 1.045 5.049
Historical cost 12.757 16.144 25.887 1.001 434 14.646 70.870
Accumulated depreciation -10.444 -1.423 -19.754 -783 0 -12.353 -44.757
Value as at Jun. 30, 2015 (A+B) 2.313 14.721 6.134 219 434 2.293 26.113
106
Ann. B
RELATIONSHIPS WITH RELATED PARTIES
30 June 2015 30 June 2014
% % incidence incidence Amounts on balance Amounts on balance balance sheet item in €K sheet item in €K sheet item
Associated companies Immobili A.O.U. Careggi Spa Take in associated companies 115,9 23,53% 371,0 85,38% Receivables from associated companies 260,1 79,99% 81,5 30,91% Other revenue and income 45,5 1,58% 20,0 2,54%
Alatoscana Spa Take in associated companies 376,6 76,47% 44,5 10,23% Receivables from associated companies 65,1 20,01% 182,2 69,09% Other revenue and income 20,0 0,69% 47,5 6,02%
Other related parties Pisamo Spa (°) Receivables from others due within the year 427,0 15,56% 725,7 15,39% Payables to suppliers 23,7 0,11% - Alha - Air Lines Handling Agents Spa Non-Aviation revenues 17,2 0,15% - Receivables from customers 63,2 0,23% - Payables to suppliers 80,5 0,36% -
Delta Aerotaxi srl Aviation revenues 199,0 0,52% - Non-Aviation revenues 69,0 0,60% - Other revenue and income 2,7 0,09% - Other receivables from customers 631,5 2,26% - Costs for services 17,3 0,09% -
Corporate Air Services srl Aviation revenues 224,2 0,59% - Non-Aviation revenues 69,1 0,60% - Other revenue and income 1,7 0,06% - Other receivables from customers 116,6 0,42% - Delifly srl Non-Aviation revenues 10,8 0,09% - Other receivables from customers 5,4 0,02% -
ICCAB srl Non-Aviation revenues 79,7 0,70% - Other receivables from customers 78,2 0,28% -
Corporacion America Italia srl Costs for services 28,9 0,14% -
Comune di Firenze Non-Aviation revenues 1,5 0,01% - Receivables from customers - 0,00% -
Pacini Editore Spa Receivables from customers 11,3 0,04% -
(*) a company 100% owned by Comune di Pisa (a TA partner). 107
Ann. C
CERTIFICATION OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT PURSUANT TO ART. 81-TER OF CONSOB’S REGULATION NO. 11971 OF 14 MAY 1999, AND SUBSEQUENT AMENDMENTS AND SUPPLEMENTS
The undersigned Gina Giani (Chief Executive Officer) and Marco Gialletti (Financial Reporting Manager) of Toscana Aeroporti S.p.a., also considering the provisions contained in art. 154-bis, paragraphs 3 and 4, of Legislative Decree no. 58 of 24 February 1998, hereby certify: the appropriateness in connection with the distinguishing features of the company, and the actual implementation of the administrative and accounting procedures for the preparation of the Condensed Consolidated Interim Financial Report at 30 June 2015. Furthermore, it is hereby certified that the Condensed Consolidated Interim Financial Report at 30 June 2015: has been prepared in accordance with applicable accounting standards recognized within the European Community pursuant to EC Regulation no. 1606/2002 of the European Parliament and of the Council of 19 July 2002; reflects the contents of accounting books and records; provides a true and fair view of the assets, liabilities, and financial situation of the issuer and of the issuer. The Report on Operations includes a reliable analysis of operating performance and income, as well as the situation of the issuer, along with a description of the primary risks and uncertainties to which it is exposed.
Florence, 28 August 2015
For the Board of Directors: Gina Giani CEO
Marco Gialletti Financial Reporting Manager
108
REVIEW REPORT ON CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
To the shareholders of Toscana Aeroporti SpA
Foreword
We have reviewed the accompanying condensed consolidated interim financial statements of Toscana Aeroporti SpA and its subsidiaries (the Toscana Aeroporti Group) as of 30 June 2015, comprising the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, statement of changes in the consolidated shareholders’ equity, consolidated statement of cash flows, and related explanatory notes. The directors of Toscana Aeroporti SpA are responsible for the preparation of the condensed consolidated interim financial statements in accordance with International Accounting Standard 34 applicable to interim financial reporting (IAS 34) as adopted by the European Union. Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.
Scope of review
We conducted our work in accordance with the criteria for a review recommended by Consob in Resolution No. 10867 of 31 July 1997. A review of condensed consolidated interim financial statements consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than a full- scope audit conducted in accordance with International Standards on Auditing (ISA Italia) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the condensed consolidated interim financial statements.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements of the Toscana Aeroporti Group as of 30 June 2015 are not prepared, in all material respects, in accordance with International Accounting Standard 34 applicable to interim financial reporting (IAS 34) as adopted by the European Union.
Emphasis of Matter
During the first half of 2015 Aeroporto di Firenze SpA was merged into the company. The effects of this transaction have been described in the explanatory notes in chapter “Merger by incorporation of Aeroporto di Firenze SpA”. In consequence of this merger, the directors have restated certain comparative information related to 31 December 2014 and 30 June 2014 compared to the figures previously presented. The methods to restate the comparative information have been described in the explanatory notes in chapter “Changes to the presentation of comparative data”.
Other aspects
The condensed consolidated interim financial statements for the period ended 30 June 2014 were reviewed by other auditors, who on 29 August 2014 expressed an unqualified conclusion on the condensed consolidated interim financial statements.
Florence, 28 August 2015
PricewaterhouseCoopers SpA
Signed by
Luigi Necci (Partner)
This report has been translated into English from the Italian original solely for the convenience of international readers. We have not examined the translation of the financial statements referred to in this report.
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