CONSOLIDATED 2019 FINANCIAL STATEMENTS CONSOLIDATED 2019 FINANCIAL STATEMENTS CONTENTS 5 Group key data 6 Parent Company officers 7 Group activities 8 Group chart 9 Financial highlights 10 Net Asset Value 11 Directors’ report 12 Analysis of the consolidated financial statements 19 Human resources 21 Performance by business segment 65 Additional information 67 Consolidated financial statements at December 31, 2019 68 Consolidated statement of financial position 70 Consolidated income statement 71 Consolidated statement of comprehensive income 72 Consolidated statement of changes in shareholders’ equity 73 Consolidated cash flow statement 75 Notes to the consolidated financial statements 155 Annexes 156 List of consolidated companies at December 31, 2019 170 Report of the independent auditors EDIZIONE 3 GROUP KEY DATA EDIZIONE 5 PARENT COMPANY OFFICERS 1 5 Board of Directors General Manager Gianni Mion 2 Carlo Bertazzo Chairman Alessandro Benetton 5 Resigned on February 29, 2020. Director Christian Benetton Director Franca Bertagnin Benetton Director Board of Statutory auditors Sabrina Benetton Angelo Casò Director Chairman Carlo Bertazzo Giovanni Pietro Cunial Director Aldo Laghi Auditors Giovanni Costa Director Alberto Giussani Maria Martellini 6 Fabio Cerchiai 3 Alternate auditors Director Fabio Buttignon 4 6 Alternate Auditor whose term of office ended on May 25, 2020. Director Marco Patuano 4 Director 1 Appointed on June 24, 2019. In office until approval of the financial statements at December 31, 2019 2 Appointed Chairman on June 24, 2019. 3 Chairman whose term of office ended on June 24, 2019. 4 Director whose term of office ended on June 24, 2019. Independent auditors Deloitte & Touche S.p.A. In office until approval of the financial statements at December 31, 2019 In office until approval of the financial statements at December 31, 2023 6 EDIZIONE GROUP KEY DATA GROUP ACTIVITIES At December 31, 2019 Edizione S.r.l. (“Edizione” or the “Parent Company”), fully owned by the Benetton family, held Investment philosophy equity investments in the following industries: Transport Edizione, in exercising its prerogatives as a shareholder Infrastructure, Digital Infrastructure, Food and Beverage, with respect to the companies of the Group, combines an Clothing and Textiles, Real Estate and Agriculture and entrepreneurial approach with solid financial discipline, Financial Institutions. putting finance at its companies’ service in order to improve their competitive position and returns. Starting in January 2020, the domestic and international scenario was harshly impacted by the spread of Covid19 and Edizione maintains an ongoing dialogue with the managers the resulting restrictive measures implemented by the public of its holdings, while fully respecting their autonomy. authorities in the countries concerned. These measures had a harsh impact on all sectors in which the Group Edizione aims to develop its investments over the long operates, starting with the dramatic drops in motorway term and to help its holdings expand by strengthening traffic (decreasing by 80% in Italy) and airport traffic (with their presence in their respective sectors, also by involving a reduction in passengers near 100%), to end with the partners that share strategy and governance. restrictive measures for food and beverage and retail sales, which eliminated the revenues in those sectors for several months. In this context, the primary objective and duty was to ensure the safety of all of our employees, users and consumers, and take action to support emergency management measures and the hospitals on the front lines in fighting the pandemic. In this regard, we would like to heartily thank all healthcare and humanitarian workers, along with the over 100,000 employees of the Group who, throughout the world, demonstrated their professionalism and sense of duty, continuing to work hard even in environmental and health conditions of great difficulty, guaranteeing essential public services for the community and enabling the Group to carry out its necessary operations. We are counting on them to overcome this period of global crisis, for which it is objectively difficult to forecast duration or impact. With specific reference to the business segments the Group operates in, we must be prepared for a long period of difficulty, with a return to normal which will be gradual and not lacking in risks of potential relapses. We are aware that 2020 will be a challenging year, marked by harshly negative economic performance and sharply increasing financial indebtedness. However, we are all working with determination, a sense of responsibility and confidence in the Group’s future. GROUP KEY DATA EDIZIONE 7 GROUP CHART EDIZIONE 100% 30.25% 88.06% Transport Sintonia Atlantia 1 Autostrade per l’Italia Infrastructure 100% Autostrade dell’Atlantico 50% + 1 share Abertis 99.38% Aeroporti di Roma 62.50% 64% Azzurra Aéroports Aeroporti de la Côte d’Azur 100% Telepass 23.86% Hochtief 15.49% Getlink 55% 29.9% Digital ConnecT Cellnex Telecom Infrastructure 100% 50.10% Food and Schematrentaquattro Autogrill 2 Beverage 100% 100% Clothing Benetton Benetton Group and Textiles 100% Olimpias Group 100% Real Edizione Property Estate and Agriculture 100% 100% Edizione Agricola Maccarese 100% Compañia de Tierras Sud Argentino 100% Ganadera Condor 100% 4% Financial Schematrentatre Assicurazioni Generali Institutions 2.10% Mediobanca Listed company 1 At December 31, 2019, Atlantia holds 0.94% of treasury shares 2 At December 31, 2019, Autogrill holds 0.07% of treasury shares 8 EDIZIONE GROUP KEY DATA FINANCIAL HIGHLIGHTS The Group’s results in 2019 and 2018, stated according to the International Financial Reporting Standards (IAS/IFRS), are summarised below. (Millions of Euro) 2019 2018 Restated Change % Revenues 17,928 13,153 4,775 36 EBIT 1,953 2,043 (90) (4) Net income for the year 485 984 (499) (51) Net income, non-controlling interests 430 800 (370) (46) Net income, Group 55 184 (129) (70) Net capital employed 61,902 61,597 305 Shareholders’ equity, Group 7,145 7,066 79 Non-controlling interests 14,273 15,269 (996) Total shareholders’ equity 21,418 22,335 (917) Net financial indebtedness 40,484 39,262 1,222 Net Asset Value 12,323 10,147 2,176 Cash flow 1 6,709 3,492 3,217 Net income, Group/Shareholders’ Equity (ROE) 0.8% 2.6% EBIT/Capital employed (ROI) 3.2% 3.3% 1 Cash flow: calculated as Net income before non-controlling interests plus Restated Figures for 2018 have been restated to reflect the completion of the depreciation, amortisation, impairment and provisions, net of the related process of accounting for the acquisition of Abertis Infraestructuras reversals and uses. group, which contributed to the results for the year starting from the end of October 2018. The results for 2019 reflect the effects of consolidation for In order to adequately read the economic results of the Group the entire year of the Abertis Infraestructuras S.A. group and its statement of financial position, it must be considered (“Abertis” ), which, in 2018, contributed to the consolidated that the Atlantia group provides the predominant share of results only for two months, and the application of the the consolidated results of the Edizione Group. international accounting standard IFRS 16 – Leases, starting from January 1, 2019. It is also noted that the net income/(loss) for 2018 was restated, following the completion of the fair value measurement of assets acquired as a result of the acquisition of the Abertis group. GROUP KEY DATA EDIZIONE 9 NET ASSET VALUE The Net Asset Value is the value of the Group’s total assets net The table below shows a breakdown of the Net Asset Value of of the net financial position of the Group’s financial sub-holding Edizione at December 31, 2019, compared to the values of each companies, including the Parent Company. asset at December 31, 2018: (Millions of Euro) 12.31.2019 12.31.2018 Change Value % / GAV Value % / GAV Absolute Atlantia 5,215 41.9% 4,495 46.6% 720 Cellnex 2,432 19.5% 977 10 .1% 1,455 Autogrill 1,200 9.6% 987 10.2% 213 Assicurazioni Generali 1,157 9.3% 757 7.8% 400 Mediobanca 187 1.5% 141 1.5% 46 Prysmian 51 0.4% 20 0.2% 31 Listed companies 10,242 82.2% 7,377 76.5% 2,865 Real Estate and Agriculture 1,677 13.5% 1,669 17.3% 8 Clothing and Textiles 489 3.9% 561 5.8% (72) Other 49 0.4% 42 0.4% 7 Non-listed companies 2,215 17.8% 2,272 23.5% (57) Gross Asset Value (“GAV”) 12,457 100% 9,649 100% 2,808 (Net financial indebtedness)/Net cash and cash equivalents (134) 498 (632) Net Asset Value 12,323 10,147 2,176 The total asset value was determined by using the following (Millions of Euro) valuation criteria: – equity investments in listed companies are valued on the basis of the arithmetic average of the closing prices, in the 51 Prysmian Others 49 20 trading days prior to the valuation date; – equity investments in unlisted companies are valued at 489 Clothing the purchase cost in the 12 months following acquisition. and Textiles Subsequently, the equity investments are valued at the carrying value or the value corresponding to the pro-rata 1,344 Financial Institutions equity, referring to the last statement of financial position Atlantia 5,215 available at the valuation date; – investment properties are valued at market value, as 2,432 Cellnex determined by third-party and internal appraisals; – the Net financial indebtedness includes the financial payables of the Parent Company and the 100% owned holdings net of cash and cash equivalents and liquid financial investments at the valuation date; – assets and liabilities denominated in foreign currency 1,200 Autogrill Real Estate 1,677 are converted at the exchange rate at the date of and Agriculture determination of the Net Asset Value.