Interim Report for the three months ended 31 March 2012

Transcription

1 Interim Report for the three months ended 31 March 2012

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3 Interim Report for the three months ended 31 March 2012

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5 Contents 1. Introduction... 5 Consolidated financial highlights... 6 Shareholders... 7 Atlantia share price performance... 8 Group structure... 9 Corporate bodies Report on operations Consolidated financial review Operating review for the Group s main subsidiaries Operating review for the Group s main investee companies Workforce Other information Significant regulatory aspects Events after 31 March Outlook Attestation

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7 Introduction 1

8 1. Introduction Consolidated financial highlights ( m) Q (1) Q (2) Total revenue Net toll revenue Other operating income Gross operating profit (EBITDA) EBITDA margin 56.2% 60.2% Operating profit (EBIT) EBIT margin 34.3% 44.7% Profit/(Loss) from continuing operations Profi t margin from continuing operations 14.2% 16.0% Profit for the period (including non controlling interests) Profit for the period attributable to owners of the parent Operating cash flow (3) Capital expenditure ( m) Equity 4,009 3,961 Net debt 9,177 8,970 (1) The fi gures for the fi rst quarter of 2012 benefi t from the contribution from the Brazilian motorway operator, Triangulo do Sol Auto Estradas, consolidated from 1 July (2) In view of the fact that consolidation of the contribution of Autostrada Torino Savona to the income statement for the fi rst quarter of 2012 has been accounted for in accordance with IFRS 5, thus recognising the contribution to profi t for the period in Profi t/(loss) from discontinued operations, the Company s contribution to the comparative consolidated income statement for the fi rst quarter of 2011 has also been reclassifi ed. With regard to the information published in the interim report for the three months ended 31 March 2011, Profi t/(loss) from discontinued operations for the fi rst quarter of 2011 also includes the contribution from Autostrada Tirrenica, which was deconsolidated as of 31 December (3) Operating cash fl ow is calculated as profi t + amortisation/depreciation +/ provisions/releases of provisions + fi nancial expenses from discounting of provisions +/ impairments/reversals of impairments of assets +/ share of profi t/(loss) of investments accounted for using equity method +/ (losses)/gains on sale of assets +/ other non cash items +/ portion of net deferred tax assets/liabilities recognised in the income statement. 6

9 Shareholders Shareholders Edizione Srl 66.40% (1) Government of Singapore Investment Corporation Goldman Sachs Infrastructure Partners 17.68% (1) 9.98% (1) 100% Mediobanca SpA 5.94% (1) 46.41% Rest of Europe 15.5% Rest of the world 8.9% UK 18.7% Fondazione CRT 6.76% 44.82% (2) Free float France 9.9% USA 15.2% Italy & retail 31.8% Geographical breakdown of free float (3) (1) Percentage ownership on a fully diluted basis, taking into account that Sintonia s issued capital is fully paid up. (2) Excludes the treasury shares held by Atlantia SpA. (3) Source: CONSOB, Thomson Reuters. 7

10 1. Introduction Atlantia share price performance Share information Number of shares 630,311,992 Par value ( ) 1.00 Type of shares Ordinary Final dividend per share for 2011, paid May 2012 ( ) Interim dividend per share for 2011, paid November 2011 ( ) Price at 31 March Low (19 January 2012) High (3 February 2012) Capitalisation at 31 March 2012 ( m) 7,847 Average daily trading volume (m) 2.4 Price ( ) Volumes (000) ,000 16, , ,000 10, , ,000 2, January 2012 February 2012 March Atlantia share S&P/MIB rebased Volumes 8

11 Group structure Group structure (*) TowerCo SpA 100% Pune Solapur Expressways Private Ltd 50% (6) 100% Italian motorway operations International operations Other activities Tangenziale di Napoli SpA 100% Autostrada Torino Savona SpA 99.98% (1) Autostrade Meridionali SpA 58.98% Società Italiana pa Traforo del Monte Bianco 51% Raccordo Autostradale Valle d Aosta SpA 58% (2) Ecomouv Sas 70% Ecomouv D&B Sas 75% Tech Solutions Integrators Sas 100% Autostrade Indian Infrastructure Development Private Ltd, 100% Autostrade International US Holdings Srl 75% (3) Autostrade dell Atlantico Srl 100% Autostrade Portugal SA 100% Autostrade Brasil Ltda 57% (4) Triangulo do Sol Auto Estradas SA 100% Electronic Transaction Consultants Co 42.46% (5) Autostrade Holding do Sur SA 100% Sociedad Concesionaria de Los Lagos SA 100% Inversiones Autostrade Holding do Sur Ltda 100% Autostrade Sud America Srl 45.77% (6) Grupo Costanera SA 100% (6) Costanera Norte SA 100% (6) Acceso Vial AMB SA 100% (6) Inversiones Autostrade de Chile Ltda 100% (6) Nororiente SA 100% (6) Gestion Vial SA 100% (6) (6) (7) Nueva Inversiones SA 50% Litoral SA 100% (6) Operalia SA 100% (6) Autostrade Urbane de Chile SA 100% (6) Vespucio Sur SA 100% (6) Stalexport Autostrady SA 61.20% Biuro Centrum Spzoo 74.38% Stalexport Autostrada Dolnoslaska SA 100% Stalexport Autoroute Sàrl 100% Stalexport Autostrada Malopolska SA 100% Via4 SA 55% (8) EsseDiEsse Società di Servizi SpA 100% Pavimental SpA 99.40% Pavimental Polska Spzoo 100% Spea Ingegneria Europea SpA 100% AD Moving SpA 100% Port Mobility SpA 70% Newpass SpA 51% Giove Clear Srl 100% Tirreno Clear Srl 100% Autostrade Tech SpA 100% Infoblu SpA 75% Telepass SpA 96.15% (9) Telepass France Sas 100% (*) At 31 March (1) SIAS has been granted a call option, exercisable no later than 30 September 2012, on the interest held by the Group. (2) The percentage refers to ordinary shares representing the issued capital. (3) The remaining 25% is held by Autostrade dell Atlantico Srl. (4) The remaining 43% is held by Autostrade dell Atlantico Srl. (5) A further 18.95% is held by Autostrade International US Holdings Srl. (6) Unconsolidated company. (7) The remaining 50% is held by Inversiones Holding do Sur Ltda. (8) The new name, from the fi rst quarter of 2012, of Stalexport Transroute Autostrada SA. (9) The remaining 3.85% is held by Autostrade Tech SpA. 9

12 1. Introduction Corporate bodies Board of Directors in office for Internal Control and Corporate Governance Committee Committee of Independent Directors with responsibility for Related Party Transactions Chairman Chief Executive Officer Directors Secretary Chairman Members Chairman Members Fabio CERCHIAI Giovanni CASTELLUCCI Gilberto BENETTON Alessandro BERTANI Alberto BOMBASSEI (independent) Stefano CAO Roberto CERA Alberto CLÔ (independent) Antonio FASSONE Giuliano MARI (independent) Gianni MION Monica MONDARDINI (independent) Giuseppe PIAGGIO Antonino TURICCHI (independent) Paolo ZANNONI Andrea GRILLO Giuseppe PIAGGIO Giuliano MARI (independent) Antonino TURICCHI (independent) Giuliano MARI (independent) Alberto CLÔ (independent) Monica MONDARDINI (independent) 10

13 Corporate bodies Human Resources Committee Chairman Alberto CLÔ (independent) Members Stefano CAO Monica MONDARDINI (independent) Giuseppe PIAGGIO Paolo ZANNONI Supervisory Board Chairman Renato GRANATA Members Simone BONTEMPO Pietro FRATTA Ethics Officer Coordinator Giuseppe LANGER Members Giulio BARREL Enzo SPOLETINI Board of Statutory Auditors for three-year period Independent Auditors for the period Chairman Auditors Alternate Auditors Deloitte & Touche Corrado GATTI Tommaso DI TANNO Raffaello LUPI Milena Teresa MOTTA Alessandro TROTTER Giuseppe Maria CIPOLLA Fabrizio Riccardo DI GIUSTO 11

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15 Report on operations 2

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17 Consolidated financial review Consolidated financial review Introduction The Atlantia Group s interim report for the three months ended 31 March 2012 has been prepared on the basis of the provisions of art. 154-ter, Financial reporting, of the Consolidated Finance Act introduced by Legislative Decree 195/2007, in implementation of EU Directive 2004/109/EC (the so-called Transparency Directive) regarding periodic reporting, and in compliance with the international financial reporting standards (IFRS) issued by the International Accounting Standards Board (IASB), endorsed by the European Commission and in force at 31 March The financial review contained in this section includes and analyses the reclassified consolidated income statement, the statement of comprehensive income, the statement of changes in equity, the statement of changes in net debt and the statement of cash flows for the three months ended 31 March 2012, in which amounts are compared with those for the same period of the previous year. The review also includes the reclassified statement of financial position at 31 March 2012, compared with the corresponding amounts at 31 December The accounting standards applied during preparation of this document are consistent with those adopted for the consolidated financial statements for the year ended 31 December The basis of consolidation at 31 March 2012 is unchanged with respect to the consolidated financial statements for the year ended 31 December The results of operations for the first quarter of 2012 benefit from the contribution from the Brazilian motorway operator, Triangulo do Sol Auto-Estradas, consolidated from 1 July With regard to ongoing transactions with the Bertin group (relating to the establishment of a joint venture to which a number of investments in Brazilian toll motorway operators are to be contributed) and with SIAS and Mediobanca (for the acquisition of the remaining 54.2% of Autostrade Sud America), which were described in full in the section of the annual report for 2011 dealing with events after 31 December 2011, the relevant agreements have yet to be executed and become effective as of 31 March Following the decision to grant a call option, to be exercised no later than 30 September 2012, on the Group s 99.98% interest in Autostrada Torino-Savona SpA, this company s contribution to the consolidated income statement for the three months ended 31 March 2012 is accounted for in Profit/(Loss) from discontinued operations, as required by IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, rather than included in each component of the consolidated income statement for continuing operations. As a result, in accordance with IFRS 5, the contributions of both Autostrada Torino-Savona and Autostrada Tirrenica, which was deconsolidated as of 31 December 2011, to the comparative consolidated income statement for the 15

18 2. Report on operations first quarter of 2011 have been reclassified with respect to the statement published in the quarterly report for the three months ended 31 March Again in accordance with IFRS 5, the consolidated assets and liabilities of Autostrada Torino-Savona at 31 March 2012 have been accounted for in the statement of financial position in financial and non-financial assets and liabilities related to discontinued operations, depending on their nature. The Group did not enter into material transactions, either with third or related parties, of a non-recurring, atypical or unusual nature during the first quarter of This interim report for the three months ended 31 March 2012 has not been audited. Consolidated results of operations Total revenue for the first quarter of 2012 amounts to million, marking an increase of 1.0 million (0.1%) on the same period of 2011 ( million). It should be recalled that operating costs include the addition to the concession fee payable to ANAS, whilst toll revenue includes the matching increase in tolls, without having any impact on Italian operators results (1). After stripping out the contribution to revenue from Triangulo do Sol, consolidated from 1 July 2011, total revenue is down 33.5 million (3.9%). Toll revenue of million is down 3.5 million (0.5%) on the first quarter of 2011 ( million), primarily reflecting a combination of: a) a decline in traffic on the Group s Italian network due to exceptionally bad weather, with a series of very heavy snowfalls during the first two months of 2012, and the lorry drivers strike at the end of January 2012, which as a whole resulted in a 4.3% ( 25.9 million) reduction in toll revenue; b) a fall in traffic on the Group s Italian network as a result of the continuing economic downturn, resulting in a reduction of 5.3% ( 30.7 million), partially offset by the positive effect of the extra day in February 2012, a leap year, which accounted for an increase of around 1.1% in traffic during the first quarter, resulting in additional toll revenue of approximately 6.7 million; c) a reduction in income from the above toll increases (down 6.7 million or 8.1% on the first quarter of 2011) due to the fall in traffic; (1) From 1 January 2011 the additional concession fees payable to ANAS, pursuant to Laws 102/2009 and 122/2010, calculated on the basis of the number of kilometres travelled, amount to 6 thousandths of a euro per kilometre for toll classes A and B and 18 thousandths of a euro per kilometre for classes 3, 4 and 5. 16

19 Consolidated financial review Reclassified consolidated income statement ( m) Increase/(Decrease) % of revenue Q Q Total % Q Q Toll revenue Contract revenue Other operating income Total revenue Cost of materials and external services (1) Concession fees Personnel expense Capitalised staff costs Total net operating costs Gross operating profit (EBITDA) Amortisation, depreciation, impairment losses and reversals of impairment losses Provisions and other adjustments Operating profit (EBIT) Financial income/(expenses) Financial expenses from discounting of provisions for construction services required by contract and other provisions Capitalised financial expenses Share of profi t/(loss) of associates and joint ventures accounted for using the equity method Profit/(Loss) before tax from continuing operations Income tax (expense)/benefi t Profit/(Loss) from continuing operations Profi t/(loss) from discontinued operations Profit for the period (Profi t)/loss attributable to non controlling interests Profit/(Loss) for the period attributable to owners of the parent (1) After deducting the margin recognised on construction services provided by the Group s own technical units Basic earnings per share attributable to the owners of the parent ( ) of which: Q Q Increase/ Decrease continuing operations discontinued operations Diluted earnings per share attributable to the owners of the parent ( ) of which: continuing operations discontinued operations Operating cash flow ( m) of which: continuing operations discontinued operations Operating cash flow per share ( ) of which: continuing operations discontinued operations

20 2. Report on operations d) application of annual toll increases by the Group s Italian operators from 1 January 2012 (a rise of 3.51% in Autostrade per l Italia s case), boosting toll revenue by 17.7 million; e) consolidation, from 1 July 2011, of the Brazilian operator, Triangulo do Sol, which reports toll revenue of 33.3 million. Contract revenue of 11.5 million is down 1.0 million on the same period of 2011 ( 12.5 million), reflecting a reduction in work carried out by Pavimental for external customers. Other operating income of million is up 5.5 million (4.1%) on the first three months of 2011 ( million), reflecting: a) an increase in commercial revenue from payment systems (up 1.4 million), reflecting an increase in Telepass customers (around 340,000 new devices in circulation and approximately 230,000 new subscribers to the Premium options); b) an increase in other income (up 2.9 million), essentially attributable to Autostrade per l Italia and relating, above all, to increased in-house production of electricity and an increase in non-recurring income and contingent assets; c) other revenue generated by consolidation of Triangulo do Sol ( 1.2 million in the first quarter of 2012). Net operating costs of million are up 33.9 million (9.9%) on the first quarter of 2011 ( million). After stripping out the contribution to operating costs from Triangulo do Sol, net operating costs are up 23.7 million (7.0%). The Cost of materials and external services amounts to million, marking an increase of 31.4 million on the first quarter of 2011 ( million). This primarily reflects: a) an increase in the cost of winter operations, following the exceptional snowfall seen on the Italian network during the first two months of 2012 (up 21.6 million); b) a like-for-like increase in other maintenance costs (up 8.9 million), essentially due to the decision to bring forward work scheduled as part of Autostrade per l Italia s annual programme, thanks to improved weather conditions in March 2012; c) a reduction in other costs (down 6.8 million) due to greater operating efficiency and reduced costs incurred by Pavimental, reflecting the reduced volume of work carried out for external customers; d) the costs incurred by Triangulo do Sol, consolidated from 1 July 2011 (up 7.7 million). 18

21 Consolidated financial review Concession fees, totalling 95.5 million, are down 5.6 million compared with the first quarter of 2011 ( million), essentially reflecting the reduction in additional concession fees collected via the tolls charged by Italian operators, due to the decline in traffic. Staff costs, before deducting capitalised expenses, of million are up 10.4 million (6.7%) on the first quarter of 2011 ( million). This reflects: a) an increase of 533 in the average workforce (up 5.7%), primarily due to consolidation of Triangulo do Sol (up 355), additional staff employed by Pavimental on construction work being carried out for the Group, recruitment of new staff by Giove Clear in response to the expansion of work at service areas on Autostrade per l Italia s network and the start-up of the Eco-Taxe project in the last quarter of 2011; b) an increase in the average unit cost (up 1.0%), primarily due to the renewal of contracts at the Group s motorway operators and construction companies (a total increase of 2.8%) and the start-up of the Eco-Taxe project, partly offset by the consolidation of Triangulo do Sol, whose average unit cost is lower than the Group s. Capitalised staff costs are up 2.3 million ( 22.5 million in the first quarter of 2012 and 20.2 million in the first three months of 2011). Gross operating profit (EBITDA) of million is down 32.9 million (6.4%) on the same period of 2011 ( million). After stripping out the contribution from Triangulo do Sol, the reduction in gross operating profit is 57.2 million (down 11.1%). Operating profit (EBIT) of million is down 89.0 million (23.2%) on the same period of 2011 ( million). In addition to the above deterioration in gross operating profit, the reduction was driven by a 21.7 million increase in depreciation, amortisation and impairment losses, after reversals of impairment losses (including 10.4 million in depreciation and amortisation charged by Triangulo do Sol) and greater provisions and other impairments (up 34.4 million). The increase in provisions is primarily due to an increase in the present value at 31 March 2012 of provisions for the repair and replacement of assets to be handed over at the end of the concession term, reflecting a reduction in the interest rate used to discount the provisions to present value. 19

22 2. Report on operations Net financial expenses of million are down 24.9 million (19.0%) on the same period of the previous year ( million), essentially due to the gain ( 61.0 million) realised on the sale of the investment in IGLI. After adjusting for this item, net financial expenses total million, up 36.1 million on the first quarter of 2011, mainly due to the combined effect of: a) non-recurring financial expenses ( 27.6 million) relating to the premium paid on the partial buyback of bonds maturing in 2014; b) increased interest expense and borrowing costs (up 6.4 million) connected to debt servicing costs related to the acquisition of 50% of the new Chilean company, Nueva Inversiones, at the same time as the acquisition of 50% of the operators, Vespucio Sur and Litoral Central, which was completed in June 2011; c) an increase in net financial expenses contributed by Ecomouv ( 3.0 million) and Triangulo do Sol, following the acquisition of control from 1 July 2011 ( 2.4 million). Financial expenses from discounting of provisions for construction services required by contract and other provisions amount to 36.3 million and are down 8.0 million, essentially reflecting a decrease in the interest rates used at 31 December 2011 to discount the provisions. Capitalised financial expenses, amounting to 9.6 million, are up on the first quarter of 2011 as a result of progress on the Eco-Taxe project. The Share of the profit/(loss) of associates and joint ventures accounted for using the equity method has resulted in a profit of 2.8 million, reflecting the Group s share of the profits reported by the Autostrade Sud America group. The profit for the first quarter of 2011 was 7.2 million and included the Group s share of the profit reported by Triangulo do Sol ( 2.3 million), a company consolidated on a line-by-line basis from 1 July Income tax expense for the first quarter of 2012 amounts to 42.6 million and is down 41.7 million (49.5%) on the first quarter of 2011 ( 84.3 million). This is substantially in line with the deterioration in Profit before tax from continuing operations, taking account of the tax neutral nature of the above gain on the sale of the investment in IGLI. Profit from continuing operations amounts to million, marking a reduction of 14.8 million (10.8%) on the first quarter of 2011 ( million). The Profit/(Loss) from discontinued operations reflects the profit of 2.0 million reported by Autostrada Torino-Savona, whilst the figure for the first quarter of 2011 ( 3.2 million) also referred to the results of Strada dei Parchi and Autostrada Tirrenica, both of which were deconsolidated during

23 Consolidated financial review Profit for the period, amounting to million, is down 16.0 million (11.4%) on the first quarter of 2011 ( million). Profit for the period attributable to owners of the parent ( million) is down 13.7 million (9.8%) on the figure for the first quarter of 2011 ( million), whilst the loss attributable to non-controlling interests amounts to 1.6 million (a profit of 0.7 million in the first quarter of 2011). After stripping out the contribution from Triangulo do Sol, profit attributable to owners of the parent is million, down 19.8 million (14.2%). Operating cash flow for the first quarter of 2012, as defined in the section Consolidated financial highlights, to which reference should be made, amounts to million, down 51.4 million (15.7%) on the first quarter of This primarily reflects the above reduction in traffic on the Italian network and the increased cost of winter operations. Operating cash flow in the first quarter of 2012 was entirely absorbed by the Group s investing activities. Consolidated statement of comprehensive income ( m) Q Q Profit for the period (A) Fair value gains/(losses) on cash fl ow hedges Fair value gains/(losses) on net investment hedges 3.7 Gains/(losses) from translation of fi nancial statements of foreign operations Gains/(losses) from measurement of associates and joint ventures using the equity method Other fair value gains/(losses) Other comprehensive income for the period, after related taxation (B) from discontinued operations 1.0 Comprehensive income for the period (A + B) of which attributable to owners of the parent attributable to non controlling interests The consolidated statement of comprehensive income reports comprehensive income for the period of million ( million for the first quarter of 2011). 21

24 2. Report on operations The loss, after the related taxation, of 5.0 million ( 4.1 million for the first quarter of 2011) resulting from other components of comprehensive income essentially reflects: a) a loss on the fair value measurement of cash flow hedges, totalling 23.3 million (an increase of 24.7 million in the first quarter of 2011), essentially reflecting interest rate trends in the two comparative periods; b) a gain on the fair value measurement of net investment hedges, totalling 3.7 million, reflecting the fair value gain on a number of derivative contracts entered into to hedge the exposure to currency risk of certain assets and investments in a number of companies operating in Chile; c) a gain on the translation of the financial statements of foreign operations into the functional currency, totalling 8.6 million (a loss of 12.5 million for the first quarter of 2011), primarily reflecting increases in the value of the Chilean peso and Polish zloty against the euro at the end of the period, compared with falls in the value of the two currencies during the first quarter of 2011; d) a gain of 5.9 million resulting from the measurement of associates using the equity method, essentially due to the above increase in value of the Chilean peso versus the euro, which has had a positive impact on the carrying amount of the investment in Autostrade Sud America (a loss of 16.2 million in the first quarter of 2011 due to a weakening of the Chilean peso at that time). Consolidated financial position At 31 March 2012 Non-current non-financial assets of 19,661.3 million are down 19.8 million on the figure for 31 December 2011 ( 19,681.1 million). Intangible assets total 17,131.3 million ( 17,238.5 million at 31 December 2011). In addition to the goodwill ( 4,382.9 million) recognised as at 31 December 2003, following acquisition of the majority shareholding in the former Autostrade Concessioni e Costruzioni Autostrade SpA, these assets include the Group s concession rights, amounting to 12,704.4 million ( 12,810.1 million at 31 December 2011). These rights refer to concession rights accruing from construction services for which no additional economic benefits are received, totalling 9,317.7 million ( 9,288.7 million as at 31 December 2011) and construction services for which additional economic benefits are received, totalling 2,778.7 million ( 2,913.1 million at 31 December 2011). 22

25 Consolidated financial review The reduction in intangible assets, amounting to million, is essentially due to the following: a) reclassification of the intangible assets of Autostrada Torino-Savona to Non-financial assets held for sale or related to discontinued operations (down million); b) amortisation for the period (down million); c) investment in construction services for which additional economic benefits are received (up million); d) adjustment of the present value on completion of investment in construction services for which no additional benefits are received (up million). 23

26 2. Report on operations Reclassified consolidated statement of financial position ( m) Increase/(Decrease) NON CURRENT NON FINANCIAL ASSETS Property, plant and equipment Intangible assets 17, , Investments Deferred tax assets less deferred tax liabilities eligible for offset 1, , Other non current assets Total non current non financial assets (A) 19, , WORKING CAPITAL Trading assets 1, , Current tax assets Other current assets Non fi nancial assets held for sale and related to discontinued operations Current portion of provisions for construction services required by contract Current provisions Trading liabilities 1, , Current tax liabilities Other current liabilities Non fi nancial liabilities related to discontinued operations Total working capital (B) 1, , INVESTED CAPITAL LESS CURRENT LIABILITIES (C = A + B) 18, , NON CURRENT NON FINANCIAL LIABILITIES Non current portion of provisions for construction services required by contract 4, , Non current provisions 1, , Deferred tax liabilities not eligible for offset Other non current liabilities Total non current non financial liabilities (D) 5, , NET INVESTED CAPITAL (E = C + D) 13, ,

27 Consolidated financial review ( m) Increase/(Decrease) EQUITY Equity attributable to owners of the parent 3, , Equity attributable to non controlling interests Total equity (F) 4, , NET DEBT Non current net debt Non current financial liabilities 11, , Bond issues 7, , Medium/long term borrowings 3, , Derivative liabilities Other non current financial assets 1, , Non current fi nancial assets deriving from concession rights Non current fi nancial assets deriving from government grants Term deposits convertible after 12 months Non current derivative assets Other non current fi nancial assets Non current net debt (G) 10, , Current net debt Current financial liabilities Bank overdrafts Short term borrowings Current portion of medium/long term borrowings Intercompany current account payables due to unconsolidated Group companies Other fi nancial liabilities Bank overdrafts related to discontinued operations Financial liabilities related to discontinued operations Cash and cash equivalents 1, Cash in hand and at bank and post offi ces Cash equivalents Intercompany current account receivables from unconsolidated Group companies Cash and cash equivalents related to discontinued operations Other current financial assets Current portion of medium/long term fi nancial assets Current fi nancial assets deriving from concessions Current fi nancial assets deriving from government grants Term deposits convertible within 12 months Current derivative assets Other current fi nancial assets Financial assets held for sale or related to discontinued operations Current net debt (H) Net debt (I = G + H) 9, , NET DEBT AND EQUITY (L = F + I) 13, ,

28 2. Report on operations At 31 March 2012 Investments, totalling million ( million at 31 December 2011), are down 17.8 million, reflecting the sale of the entire 33.3% interest in IGLI (a carrying amount of 26.6 million), partially offset by an increase in the value of the investment in Autostrade Sud America, amounting to 8.6 million, based on measurement using the equity method, with gains of 2.8 million recognised in the income statement and of 5.8 million recognised in other components of comprehensive income. Deferred tax assets, after offsetting against deferred tax liabilities, amount to 1,908.4 million ( 1,891.4 million at 31 December 2011), marking an increase of 17.0 million, primarily due to a combination of the following: a) the change in deferred tax assets recognised on the portion of provisions not deducted from taxable income, primarily relating to provisions for the repair and replacement of assets to be handed over at the end of the concession term, totalling 31.5 million; b) the release of deferred tax assets recognised on the intercompany gain arising in 2003 as a result of the transfer of motorway assets to Autostrade per l Italia, totalling 26.5 million, representing the portion of goodwill deriving from the above transaction deductible by Autostrade per l Italia in the first quarter; c) the recognition of deferred tax assets relating to recognition in the statement of comprehensive income of losses on the fair value measurement of hedging derivatives, totalling 11.5 million. Other non-current assets of million are up 99.4 million on the first quarter of 2011 ( 2.4 million), primarily due to the payment of million to SIAS, under the related contract, in relation to the acquisition of this company s % stake in Autostrade Sud America. Consolidated working capital reports a negative balance of 1,117.5 million ( 1,380.3 million at 31 December 2011). The change includes million relating to the change in the balance of non-financial assets and liabilities held for sale, reflecting the above reclassification of million from non-current non-financial assets and liabilities attributable to Autostrada Torino-Savona at 31 March 2012 to working capital, in compliance with IFRS 5. After stripping out this change, working capital is up 38.2 million primarily due to: a) an increase of 88.1 million in trading assets, essentially reflecting the greater amount due for tolls ( 74.5 million) to be collected from banks at 31 March 2012, and increase in the amount due from sub-operators at service areas, after the decision to grant extended payment terms for annual fees payable; 26

29 Consolidated financial review b) a reduction in other current liabilities of 78.9 million, primarily following payment of the fees due to ANAS and the Ministry of the Economy and Finance for both the first quarter of 2012 and 2011 as a whole, regarding amounts payable annually; c) a rise in the current portion of provisions for construction services required by contract (up 92.5 million), reflecting the expected volume of construction services for which no additional economic benefits are received; d) an increase of 43.0 million in net current tax liabilities, reflecting income tax payable for the period. The figure for trading liabilities is in line with 31 December 2011, reflecting the fact that there was a substantial offset between the reduction in trade payables resulting from the payment of amounts due to external contractors at the end of 2011, following an acceleration of investment in the network, and the increase in deferred income deriving from the advance billing of royalties due from sub-operators at service areas. Non-current non-financial liabilities, totalling 5,358.0 million, are in line with 31 December 2011 ( 5,370.1 million), as the reduction in provisions for construction services required by contract was substantially offset by the increase in other provisions. As a result, Net invested capital, totalling 13,185.8 million at 31 March 2012, is up million on the figure for 31 December 2011 ( 12,930.7 million). Equity attributable to owners of the parent and non-controlling interests totals 4,008.5 million ( 3,960.5 million at 31 December 2011). Equity attributable to owners of the parent, totalling 3,618.5 million, is up million, primarily reflecting comprehensive income for the period ( million). Equity attributable to non-controlling interests of million is down 60.5 million on the figure for 31 December 2011 ( million), essentially due to the acquisition of a further 20% of Triangulo do Sol and dividends payable to minority shareholders by Group companies. 27

30 2. Report on operations Statement of changes in consolidated equity ( m) Equity attributable to owners of the parent Issued capital Cash flow hedge reserve Net investment hedge reserve Balance as at 31 December Comprehensive income for the period 25.1 Owner transactions and other changes Dividend approved Retained earnings for previous year Changes in the basis of consolidation, capital contributions and other changes Balance as at 31 March Balance as at 31 December Comprehensive income for the period Owner transactions and other changes Dividend approved Retained earnings for previous year Changes in the basis of consolidation, capital contributions and other changes 0.1 Balance as at 31 March The Group s net debt at 31 March 2012 is 9,177.3 million (8,970.2 million at 31 December 2011). Non-current net debt, amounting to 10,132.2 million ( 9,146.9 million at 31 December 2011), is up million, primarily due to the following: a) a new bond issue with a face value of 1,000 million maturing in 2019 and paying coupon interest of 4.5%, partly offset by the partial buyback ( million) of bonds ahead of their maturity in 2014; b) new medium/long-term borrowings, following the use of the remaining million tranche of the fixed-rate loan, maturing in 2036 and paying interest at 4.596%, agreed by Autostrade per l Italia and the European Investment Bank (EIB) in 2008, partly offset by the reclassification of borrowings maturing in the next 12 months to current liabilities ( 33.8 million); c) a reduction of 90.9 million in the non-current portion of accrued government grants for construction services, essentially after reclassifications to the short-term portion; 28

31 Consolidated financial review Currency translation reserve Reserve for companies accounted for using the equity method Equity attributable to owners of the parent Other reserves Treasury shares Profit/(Loss) and retained for the period earnings Total Equity attributable to non controlling interests Total equity attributable to owners of the parent and non controlling interests , , , , , , , , , , , ,008.5 d) an increase of 51.7 million in net fair value losses on cash flow hedges, essentially reflecting interest rate trends and including the impact of movements in exchange rates ( 16.0 million), recognised in respect of the change in hedged foreign currency bonds issued by Atlantia; e) a 77.5 million increase in financial assets deriving from concession rights, essentially due to the investment in Ecomouv, which is engaged in the production of a satellite-based tolling system for heavy vehicles in France. At 31 March 2012 current net funds amount to million ( million at 31 December 2011). The increase of million essentially reflects the cash raised as a result of the above financial transactions. 29

32 2. Report on operations The Group s ordinary operating and financing activities expose it to market risks, primarily regarding interest rate and currency risks linked to the financial assets acquired and the financial liabilities assumed, in addition to liquidity and credit risks. The Group s financial risk management strategy is consistent with the objectives set by Atlantia s Board of Directors. The strategy aims to both manage and control such risks, wherever possible mitigating interest rate and currency risks and minimising borrowing costs, whilst taking account of the interests of stakeholders, as defined in the Group s Financial Policy. The components of the Group s derivatives portfolio at 31 March 2012 are classified, in application of IAS 39, as cash flow hedges or net investment hedges. Based on the positive outcome of tests of effectiveness of cash flow hedges at 31 March 2012, changes in fair value have been recognised in full in comprehensive income, with no recognition of any ineffective portion in profit or loss. In March 2012 the Group entered into new derivative contracts known as Non-Deliverable Forwards and classified as net investment hedges in accordance with IAS 39, relating to forward sale of Chilean pesos with the aim of hedging the foreign currency translation risk linked to certain assets and investments in Chile. Changes in fair value during the first quarter of 2012 have recognised in full in the comprehensive income. The residual weighted average term to maturity of the Group s interest bearing debt is approximately 7 years at 31 March % of the Group s debt is fixed rate. 14% of the Group s medium/long-term debt is denominated in currencies other than the euro. Taking account of foreign exchange hedges and the proportion of debt denominated in the local currency of the country in which the relevant Group company operates (around 5%), the Group is not exposed to currency risk on translation into euros. The average cost of the Group s medium/long-term borrowings in the period was approximately 5%. At 31 March 2012 the Group has cash reserves of 4,612 million, consisting of: a) 1,417 million in cash and/or investments maturing within 30 days; b) 317 million in term deposits allocated primarily to finance the execution of specific construction services; 30

33 Consolidated financial review c) 2,878 in undrawn committed lines of credit. In particular, the Group has obtained the following lines of credit: 1) 300 million of the loan obtained from the European Investment Bank in December 2010 (to be drawn down until December 2014 and maturing in September 2036); 2) 1,000 million of the loan granted by Cassa Depositi e Prestiti and Sace (to be drawn down until September 2014 and maturing in December 2024); 3) 1,000 million available under a committed Revolving Credit Facility with Mediocredito acting as Agent Bank (to be drawn down by May 2015 and maturing in June 2015); 4) 578 million in the form of a Project Loan to finance the Eco-Taxe project being carried out by Ecomouv (to be drawn down primarily by October 2013 and maturing in December 2024). The Group s net debt, as defined according to the CESR recommendation of 10 February 2005 (which does not permit the deduction of non-current financial assets from debt), amounts to 10,318.9 million at 31 March 2012, compared with net debt of 10,170.5 million at 31 December Consolidated cash flow Net debt increased by million during the first quarter of 2012, compared with a reduction of 91.3 million in the first three months of Operating activities generated cash flows of million in the first quarter of 2012 ( million in the first quarter of 2011). In addition to the 51.4 million reduction in operating cash flow, the decrease in cash generated by operating activities (down million on the figure for the first quarter of 2011) essentially reflects the negative contribution of working capital, due to the greater amount due for tolls to be collected from banks at the end of the period, and the reduction in trade payables resulting from the payment of amounts due to external contractors at the end of 2011, following an acceleration of investment in the network. 31

34 2. Report on operations Cash used for investment in non-financial assets amounts to million ( million in the first quarter of 2011). Cash used in the first three months of 2012 essentially includes investment in motorway infrastructure operated under concession, after the related government grants and the increase in financial assets resulting from capital expenditure ( million), investment in consolidated companies ( 62.5 million), essentially regarding the acquisition of a further 20% of Triangulo do Sol, and the increase in other non-current assets, essentially due to the prepayment of million for the acquisition of the investment in Autostrade Sud America. These cash outflows were, however, partly offset by cash generated by the sale of the investment in IGLI ( 87.6 million). The corresponding outflow in the first quarter of 2011, which did not benefit from gains on the sale of consolidated companies, was primarily due to investment in motorway infrastructure, after the related government grants and an increase in financial assets resulting from capital expenditure. The cash outflow resulting from changes in equity during the first quarter of 2012 amounts to 0.2 million ( 13.4 million in the first quarter of 2011), reflecting the positive impact of exchange rate movements on debt, offset by dividends payable to minority shareholders of Group companies. The overall impact of the above cash flows was to increase net debt by million (a reduction of 58.7 million in the first quarter of 2011). In addition, in the first quarter of 2012 net debt was increased 29.4 million by changes in the fair value of cash flow hedges recognised in comprehensive income, whilst a reduction of 32.6 million was recorded in the first three months of

35 Consolidated financial review Statement of changes in consolidated net debt ( m) Q Q Profit for the period Amortisation and depreciation Provisions Financial expenses from discounting of provisions for construction services required by contract and other provisions Share of (profi t)/loss of associates and joint ventures accounted for using the equity method Impairment losses/(reversal of impairment losses) and adjustments of other non current assets (Gain)/Loss on sale of non current assets Net change in deferred tax (assets)/liabilities Other non cash costs (income) Change in working capital Other changes in non fi nancial assets and liabilities Net cash from operating activities (A) Investments on concessions activities Government grants related to investments on concession activities Increase in non current financial assets deriving from concession rights (related to investments) Purchases of property, plant and equipment Purchases of intangible assets Purchase of investments, net of unpaid called up issued capital 2.7 Dividends received from investee companies accounted for using the equity method 2.6 Purchase of new consolidated investments, net of cash acquired 62.5 Proceeds from sales of property, plant and equipment, intangible assets and unconsolidated investments Change in other non current assets Net cash used in investing activities (B) Dividends declared by Group companies Net change in currency translation reserve and other reserves and debt related translation differences Net change in issued capital and reserves attributable to non controlling interests Net equity cash outflows (C) Increase/(Decrease) in cash and cash equivalents (A + B + C) Change in the fair value of hedging derivatives recognised in comprehensive income (D) Decrease/(Increase) in net debt for the period (A + B + C + D) Net debt at beginning of year 8, ,657.3 Net debt at end of year 9, ,

36 2. Report on operations Consolidated statement of cash flows ( m) Q Q CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Profit for the period Adjusted by: Amortisation and depreciation Provisions Financial expenses from discounting of provisions for construction services required by contract and other provisions Share of (profi t)/loss of associates and joint ventures accounted for using the equity method Impairment losses/(reversal of impairment losses) and adjustments of other non current assets (Gain)/Loss on sale of non current assets Net change in deferred tax (assets)/liabilities Other non cash costs (income) Change in working capital and other changes Net cash generated from/(used in) operating activities (A) CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES Investments on concessions activities Government grants related to investments on concession activities Increase in non current financial assets deriving from concession rights (related to investments) Purchases of property, plant and equipment Purchases of intangible assets Purchase of investments, net of unpaid called up issued capital 2.7 Purchase of new consolidated investments, net of cash acquired 62.5 Dividends received from investee companies accounted for using the equity method 2.6 Proceeds from sales of property, plant and equipment, intangible assets and unconsolidated investments Net change in other non current assets Net change in current and non current fi nancial assets not held for trading purposes Net cash generated from/(used in) investing activities (B) CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES New shareholder loans Dividends paid by Group companies Net change in the currency translation reserve and other reserves Net change in issued capital and reserves attributable to non controlling interests Bond issues 1,000.0 Increase in medium/long-term borrowings (excluding fi nance lease liabilities) Redemption of bonds Repayments of medium/long-term borrowings (excluding fi nance lease liabilities) Payment of fi nance lease liabilities 0.3 Net change in other current and non current fi nancial liabilities Net cash generated from/(used in) financing activities (C) 1, Net effect of foreign exchange rate movements on net cash and cash equivalents (D) Increase/(Decrease) in cash and cash equivalents (A + B + C + D) NET CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ,519.9 NET CASH AND CASH EQUIVALENTS AT END OF PERIOD 1, ,

37 Consolidated financial review Additional information on the statement of cash flows ( m) Q Q Income taxes paid/(repaid) Interest income and other fi nancial income collected Interest expense and other fi nancial expenses paid Foreign exchange gains collected 0.1 Foreign exchange losses incurred 0.5 Reconciliation of net cash and cash equivalents ( m) Q Q Net cash and cash equivalents at beginning of period ,519.9 Cash and cash equivalents ,533.2 Bank overdrafts repayable on demand Intercompany current account payables due to unconsolidated Group companies Cash and cash equivalents included in disposal groups Bank overdrafts included in disposal groups 8.0 Net cash and cash equivalents at end of period 1, ,654.8 Cash and cash equivalents 1, ,662.0 Intercompany current account receivables due from unconsolidated Group companies 0.2 Bank overdrafts repayable on demand Intercompany current account payables due to unconsolidated Group companies Cash and cash equivalents included in disposal groups Bank overdrafts included in disposal groups 0.8 Cash flow related to discontinued operations ( m) Q Q Net cash generated from/(used in) operating activities Net cash generated from/(used in) investing activities Net cash generated from/(used in) fi nancing activities

38 2. Report on operations Operating review for the Group s main subsidiaries Traffic Italian operators The number of kilometres travelled on the network operated by Autostrade per l Italia and the Group s other Italian motorway operators (2) during the first quarter of 2012 totals 10,030.8 million: 8,587.1 million by vehicles with 2 axles (cars and vans, representing 85.6% of the total) and 1,443.7 million by vehicles with 3 or more axles (14.4% of the total). The number of kilometres travelled on the Group s Italian network is down 8.5% compared with the first quarter of Reductions were reported by both categories of vehicle, with vehicles with 2 axles down 8.6% and those with 3 or more axles down 7.7%. In addition to the economic situation, the performance for the first three months of 2012 also reflects the impact of the 5-day lorry drivers strike at the end of January, and exceptionally bad weather, with heavy snowfall across the country, above all in late January and mid-february. On the other hand, the period benefitted from the extra day in February (2012 is a leap year), which added around an extra 1% of traffic in the first quarter. After adjusting for these factors (the strike, bad weather and the leap year), traffic during the first quarter of 2012 is estimated to have fallen 5.3%, with vehicles with 2 axles down 5.2% and those with 3 or more axles down 5.3%. Traffic was down at all the Group s Italian companies, with the sole exception of heavy vehicles using the motorways in the Valle d Aosta (vehicles with 3 or more axles using the Mont Blanc Tunnel up 2.2% and up 2.8% on the Valle d Aosta Motorway Link Road). The decline was slightly more accentuated on Autostrade per l Italia s network, with total traffic down 8.7% (2 axles down 8.9%, 3 or more axles down 7.7%). The other operators report declines of between 4.3% for Autostrade Meridionali, which saw a sharper fall in heavy vehicles (those with 3 or more axles down 12.8%) and 7.5% for the Mont Blanc Tunnel, where vehicles with 2 axles recorded a particularly sharp fall of 12.2%. (2) Excluding Autostrada Torino-Savona, whose contribution to the result for the fi rst quarter of 2012 has been accounted for, in accordance with IFRS 5, in Profi t/(loss) from discontinued operations. 36

39 Operating review for the Group s main subsidiaries Traffic on the network operated under concession in Italy during the first quarter of 2012 Motorway Vehicles x km (millions) (1) % change vs 2011 ATVD (2) 2012 Vehicles Vehicles Total vehicles Vehicles Vehicles Total vehicles with 2 axles with 3 or with 2 axles with 3 or more axles more axles Autostrade per l Italia 8, , , ,353 Autostrade Meridionali ,411 Tangenziale di Napoli ,459 Traforo del Monte Bianco ,592 Raccordo Autostradale Valle d Aosta Total for Group s italian operators ,016 8, , , ,182 Autostrada Torino ,241 Savona (3) (1) Provisional data. (2) ATVD = total km travelled/length of section /no. of days in year. (3) A company held for sale. Overseas operators The Chilean operator, Los Lagos, registered a 16.6% increase in traffic using its network in the first quarter of 2012 compared with 2011, with light vehicles up 18.4% and heavy vehicles up 10.9%. Traffic growth in terms of the number of kilometres travelled in the first three months of the year is also strong on the networks operated by the Grupo Costanera s other Chilean subsidiaries (in which the Group will hold controlling interests of 50.01% as a result of the acquisitions agreed in 2012): Costanera Norte recorded an increase of 7.0% (light vehicles up 6.6% and heavy vehicles up 14.9%); Vespucio Sur recorded an increase of 9.8% (light vehicles up 9.5% and heavy vehicles up 13.2%); Litoral Central recorded an increase of 13.8% (light vehicles up 14.2% and heavy vehicles up 11.3%); Nororiente recorded an increase of 16.9% (light vehicles up 17.2% and heavy vehicles down 5.7%); AMB recorded an increase of 14.5% (light vehicles up 15.5% and heavy vehicles down 7.2%). 37

40 2. Report on operations The Brazilian operator, Triangulo do Sol, registered growth of 8.2% in terms of kilometres travelled during the first quarter of 2012, compared with the same period of 2011 (light vehicles up 6.5% and heavy vehicles up 12.5%). The other Brazilian operators, which the Group is to control as a result of the agreement entered into with the Bertin group on 30 January 2012, also registered significant traffic growth. In the same period the operator, Nascentes das Gerais, recorded an increase of 5.4% (light vehicles up 6.7% and heavy vehicles up 1.8%), whilst traffic using the network operated by Rodovia das Colinas was up 4.6% (light vehicles up 4.9% and heavy vehicles up 3.7%). The Polish operator, Stalexport Autostrada Malopolska, recorded an 8.0% decline in kilometres travelled in the first quarter of 2012, compared with the same period of 2011, with light vehicles up 0.9% and heavy vehicles falling 36.1%. The latter figure reflects the transfer from a shadow tolling system to direct tolling (1 July 2011) for vehicles weighing more than 12 tonnes and toll increases applied to vehicles under 12 tonnes. Traffic on the network operated under concession in Italy during the first quarter of 2012 Traffic (millions of km travelled) Traffic (thousands of journeys) Q Q % increase/ (decrease) Q Q % increase/ (decrease) Stalexport A. M % 4, , % Los Lagos % 3, , % Triangulo do Sol % 4, , % Nascentes das Gerais (*) % 2, , % Rodovia das Colinas (*) % 8, , % Grupo Costanera (*) Costanera Norte % 47, , % Vespucio Sur % 55, , % Litoral Central % 1, , % Nororiente % 1, % AMB % 2, , % Total 1,702 1, % 132, , % (*) An unconsolidated company that the Group will acquire control of as a result of agreements entered into in

41 Operating review for the Group s main subsidiaries Tolls Italian operators The following annual toll increases were introduced by Autostrade per l Italia and the Group s Italian motorway operators from 1 January 2012: Toll increases from 1 January 2012 Italian motorway operator Toll increase Autostrade per l Italia 3.51% Raccordo Autostradale Valle d Aosta 14.17% Tangenziale di Napoli 3.49% Autostrade Meridionali 0.31% Società Italiana Traforo del Monte Bianco 5.97% Autostrada Torino Savona (*) 1.47% (*) The Group is in the process of selling its 99.98% interest in this company. The toll increases applied by Autostrade per l Italia, amounting to 3.51%, consists of a 2.04% increase relating to the X and K components of the tariff formula, designed to cover additional capital expenditure (3) and 1.47% equivalent to 70% of the inflation rate in the period from 1 July 2010 to 30 June 2011 (4). The operators Raccordo Autostradale Valle d Aosta, Tangenziale di Napoli and Autostrade Meridionali, apply a tariff formula that takes into account the target inflation rate, a rebalancing component and the return on investment, in addition to quality. Traforo del Monte Bianco, which operates under a different concession regime based on bilateral agreements between Italy and France, applied a total increase of 5.97% from 1 January 2012, in accordance with the resolutions approved by the Intergovernmental Committee for the Mont Blanc Tunnel on 20 October and 25 November This increase is based on the combination of two elements: 2.47% representing the average inflation rate in France and Italy for the period from 1 September 2010 to 31 August 2011; 3.50% in accordance with the agreement between the Italian and French governments dated 24 February 2009, with use of the proceeds still be decided on by the two governments. (3) X investments to cover additional capital expenditure inserted into the IV Addendum of 2002 amounting to 1.99% and the K component to provide a return on the new investment envisaged in the Single Concession Arrangement amounting to 0.05%. These components are calculated on the basis of the stage of completion of work on individual projects, based on the statement of fi nancial position at 30 September (4) The annual average increase in consumer prices for the whole of Italy calculated by Italy s Offi ce for National Statistics (ISTAT, the NIC index) in the period from 1 July 2010 to 30 June 2011, compared with the period from 1 July 2009 to 30 June 2010, is 2.1%. 39

42 2. Report on operations The increase applied by Autostrada Torino-Savona is equal to 70% of the inflation rate in the period from 1 July 2010 to 30 June Overseas operators A direct tolling system has been in use on the network operated by the Polish company, Stalexport Autostrada Malopolska, since 1 July 2011, replacing the previous shadow tolling system for heavy vehicles weighing more than 12 tonnes. At the same time, tolls for vehicles weighing less than 12 tonnes were increased by 11.1%. In addition, from 1 March 2012 tolls for light vehicles were raised by 12.5%. The overall effect of the toll increases on toll revenue in the first quarter of 2012, compared with the same period of the previous year, was a rise of 29.7%. The toll increases introduced by the Polish operator are within the limits set out in the concession arrangement. From 1 January 2012 the tolls applied by the Chilean operator, Los Lagos, rose 1.9%, reflecting the effect of: the inflation-linked increase of 3.9% (calculated between 1 December 2010 and 30 November 2011); the rounding off of tariffs to the nearest 100 pesos (down 2.0%); the failure to qualify for the increase relating to the safety factor (as in the previous year). From 1 July 2011 the tolls charged by the Brazilian operator, Triangulo do Sol, were raised by 9.76%, in accordance with the terms of the company s concession arrangement, which link toll increases to the General Market Price Index. Capital expenditure During the first three months of 2012 Group companies invested a total of million, an increase of 59.8 million (excluding companies sold or held for sale) on the same period of 2011 (up 21.1%), due primarily to the start-up of work on the Eco-Taxe project in France. 40

43 Operating review for the Group s main subsidiaries Capital expenditure by the Atlantia Group ( m) Q Q % increase/(decrease) Autostrade per l'italia projects in Agreement of % Autostrade per l'italia projects in IV Addendum of % Investment in major works by other subsidiaries % Eco Taxe project 62.2 Other investment in the network and capitalised costs (staff, maintenance and other) Total investment in infrastructure operated under concession % % Investment in other intangible assets % Investment in property, plant and equipment % Total investment in continuing operations % Capital expenditure by Autostrada Tirrenica (sold at the end of 2011) Capital expenditure by Autostrada Torino Savona (held for sale) % Total capital expenditure % The volume of investment in the first quarter of 2012, relating to works envisaged in the Autostrade per l Italia s Agreement of 1997 and the IV Addendum of 2002, is essentially in line with the same period of In terms of the 1997 Financial Plan, the approaching completion of work on the Variante di Valico and on the Florence North-Florence South section (down 11 million) is offset by the start-up of work on the Barberino- Florence North section (up 11.5 million). In terms of the IV Addendum of 2002, the positive impact of the acceleration of work on Lots 1B, 2 and 4 of the Rimini North-Porto Sant Elpidio section (up 37.9 million) was partially offset by reduced work on the A9 Lainate-Como (down 5.6 million), on Lots 6B and 3 (nearing completion) on the Rimini North-Porto Sant Elpidio section (down 14.7) and on the Fiano-Settebagni section, which has now been completed (down 13 million). Investment in major works by the Group s other motorway operators is up 2.9 million compared with the same period of 2011, essentially reflecting an increase in the volume of work carried out by Autostrade Meridionali on the widening of the A3 (up 3.6 million). The French-based subsidiary, Ecomouv, also made a contribution to the increase following the start-up of work on the Eco-Taxe project in 2011, regarding the development and implementation of a satellite-based tolling system for heavy vehicles weighing over 3.5 tonnes. The partnership agreement with the French Ministry of Ecology, Sustainable Development and Transport (MEDDTL), signed on 20 October 2011, envisages total 41

44 2. Report on operations investment of approximately 650 million. Ecomouv s expenditure during the first quarter of 2012 (relating primarily to the development of the tolling system, the central system and the control system) amounted to 62.2 million and means that the project is on schedule with 16.6% completed. Contract reserves quantified by contractors At 31 March 2012 operators have recognised contract reserves quantified by contractors amounting to 1,220 million, including 680 million regarding works envisaged in Autostrade per l Italia s Agreement of 1997, the additional cost of which cannot be clawed back via tolls. 42

45 Operating review for the Group s main investee companies Operating review for the Group s main investee companies Autostrade Sud America and Nueva Inversiones The Group, via its investee company, Autostrade Sud America (in which it holds a 45.7% interest) and/or indirectly via wholly owned subsidiaries, holds the following investments in Chilean motorway operators: Costanera Norte SA, which holds the concession (expiring 2033) for 43 km of road network in the city of Santiago in Chile, and which is a wholly owned indirect subsidiary of Autostrade Sud America; Autopista Nororiente SA, the holder of the concession (expiring 2044) for the 21.5 km north-eastern bypass in the city of Santiago (Chile), and a wholly owned indirect subsidiary of Autostrade Sud America; AMB SA, the holder of the concession (expiring 2048) for the 10 km section of motorway linking Santiago to the city s international airport, and a wholly owned indirect subsidiary of Autostrade Sud America; Autopista Vespucio Sur SA, the holder of the concession (expiring 2032) for the 23.5 km southern section of the orbital toll motorway serving the city of Santiago, and (indirectly) 50% owned by Autostrade Sud America and (indirectly) 50% owned by Autostrade per l Italia; Litoral Central SA, the holder of the concession (expiring 2031) for the 79 km toll motorway serving the cities of Algarrobo, Casablanca and Cartagena in Chile, and (indirectly) 50% owned by Autostrade Sud America and (indirectly) 50% owned by Autostrade per l Italia. On 25 February 2012 Autostrade per l Italia also reached agreement with the SIAS Group and Mediobanca for the acquisition of the remaining 54.2% of Autostrade Sud America. This was followed on 19 April 2012 by an agreement with the Canada Pension Plan Investment Board (CPPIB) for the sale of 49.99% of Grupo Costanera (the Chilean holding company, a wholly owned subsidiary of Autostrade Sud America, that holds the investments in the above motorway operators). Key performance indicators for the Chilean operators ( m) Net revenue EBITDA Adjusted net revenue (*) Adjusted EBITDA (*) Q Q % Increase/ (Decrease) Q Q % Increase/ (Decrease) Q Q % Increase/ (Decrease) Q Q % Increase/ (Decrease) Costanera Norte % % % % Nororiente % n.s % % Vespucio Sur % % % % Litoral Central % % % % AMB % n.s % % (*) Including guaranteed minimum revenues, which are accounted for as fi nancial income in accordance with IFRIC

46 2. Report on operations Costanera Norte During the first three months of 2012 traffic using the motorway operated under concession by Costanera Norte rose 6.3% (in terms of transits), whilst toll revenue recorded growth of 19.5% compared with the same period of the previous year (16.2% on a constant exchange rate basis). This reflects, among other things, the annual toll increase of 7.95% (under the concession arrangement based on consumer price inflation in 2011, plus 3.5%). In the first three months of 2012 Costanera Norte recorded revenue of 14.9 million, marking an increase of 10.5% (7.4% on a constant exchange rate basis) on the same period of 2011 ( 13.5 million). Gross operating profit (EBITDA) of 11.1 million is up 9.7% (6.7% on a constant exchange rate basis) on the first three months of 2010 ( 10.1 million). Autopista Nororiente Traffic on the section of motorway operated by the Chilean operator, Nororiente, was up 16.9% in the first quarter of 2012, compared with the same period of Nororiente recorded revenue of 0.9 million in the first quarter of 2012, down 23.3% (25.4% on a constant exchange rate basis) on the same period of 2011 ( 1.2 million). This primarily reflects a reduction in commercial revenue in the first quarter of AMB Traffic on the section of motorway operated by the Chilean operator, AMB, was up 14.5% in the first quarter of 2012, compared with the same period of AMB recorded revenue of 0.3 million in the first quarter of 2012, up 12.7% (9.6% on a constant exchange rate basis) on the same period of 2011 ( 0.2 million). Gross operating profit (EBITDA) is 18,600, an improvement on the loss of 0.39 million registered in the same period of

47 Operating review for the Group s main investee companies Vespucio Sur The section of motorway operated by the Chilean operator, Vespucio Sur, registered an increase in traffic of 9.8% in the first quarter of 2012, compared with the same period of From January 2012 the company applied the annual toll increase of 7.95% (under the concession arrangement based on consumer price inflation in 2011, plus 3.5%). Vespucio Sur recorded revenue of 15.9 million in the first quarter of 2012, up 28.8% (25.3% on a constant exchange rate basis) on the first quarter of 2011 ( 12.3 million). Gross operating profit (EBITDA) of 13.5 million is up 41.2% (37.3% on a constant exchange rate basis) compared with 2011 ( 9.5 million). Litoral Central The section of motorway operated by the Chilean operator, Litoral Central, registered an increase in traffic of 13.8% in the first quarter of 2012, compared with the same period of Litoral Central recorded revenue of 0.7 million in the first quarter of 2012, up 17.6% (14.3% on a constant exchange rate basis) on the first quarter of 2011 ( 0.6 million). Gross operating profit (EBITDA) of 72,100 is up 11.9% (8.8% on a constant exchange rate basis) on the same period of 2011 ( 64,400). Pune Solapur Expressways Private Limited On 17 February 2009 Atlantia, in consortium (50-50) with TRIL Roads Private Limited, a Tata Group company, was awarded a 21 year concession for the 110 km Pune-Solapur section of motorway in the Indian state of Maharashtra. Work on construction and on widening the motorway from two to four lanes is underway, having been divided into two lots for which contracts were awarded separately to the local companies, Oriental and IJM. Under the Concession Arrangement, construction work is to last 30 months from 14 November In reality, the necessary expropriations of land, which is the responsibility of the Grantor, is behind schedule with respect to the deadline envisaged by the concession arrangement. The Operator is putting pressure on the Grantor to speed up the process. 45

48 2. Report on operations Workforce At 31 March 2012 the Group (excluding the workforce employed by Autostrada Tirrenica from the figures for the two comparative periods following the sale of a 69.1% interest in the fourth quarter of 2011, and Autostrada Torino-Savona, whose contribution for the first quarter of 2012 has been accounted for in Profit/(Loss) from discontinued operations ) employs 9,935 staff on permanent contracts and 551 temporary staff, resulting in a total workforce of 10,486. This is down 65 (0.6%) on the 10,551 of 31 December In detail, the number of permanent staff is substantially in line (up 1), whilst the number of temporary staff is down 66. On a like-for-like basis, the change in permanent staff compared with 31 December 2011 reflects events at the following Group companies: Giove Clear (up 32), following the expansion of its operations in 2012, to include the service areas managed by Autostrade per l Italia s Bologna, Udine, Pescara and Florence section departments; Ecomouv and Tech Solutions Integrators (up 12), due to work on the Eco-Taxe project; Pavimental (down 15), primarily reflecting a reduction of staff employed in routine maintenance; Italian operators (down 19), following a reduction in toll collectors (down 29), partly offset, above all at Autostrade per l Italia, by an increase in staff working on overseas operations (up 9). The reduction in temporary staff, totalling 66, primarily reflects: Italian operators (down 124), following the seasonal reduction in toll collectors, with 92 attributable to Autostrade per l Italia; the Stalexport group (down 14), after cuts to toll collection and maintenance staff; Spea (down 11), following the partial conversion of fixed-term contracts to permanent deals; Giove Clear (up 65), following the expansion of operations referred to above; Pavimental (up 19), primarily due to the recruitment of temporary staff to carry out additional road works. The Group s average workforce (excluding Autostrada Tirrenica and Autostrada Torino-Savona and including temporary staff) is up from 9,667 in the first quarter of 2011 to 10,220 in the same period of 2012, making an increase of 553 on average (up 5.7%). Triangulo do Sol was consolidated from 1 July 2011, contributing an average workforce of 355 in the first quarter of On a like-for-like basis, the change in the average workforce compared with 31 December 2011 primarily reflects the following: Giove Clear (up 147 on average), following the expansion of operations; Pavimental (up 48 on average), primarily due to the recruitment of temporary staff to carry out additional road works (the installation of acoustic barriers); Ecomouv and Tech Solutions Integrators (up 34 on average), due to work on the Eco-Taxe project; 46

49 Workforce Electronic Transaction Consultants (up 19 on average), reflecting an increase in permanent staff (up 56 on average) and a reduction in temporary staff (down 37 on average); Italian operators (down 46), following a reduction in toll collectors (down 85), partly offset, at Autostrade per l Italia, by an increase in staff working on overseas operations. Net staff costs of million are up 8.1 million (6.0%) on the million of the first quarter of Capitalised staff costs are up from 20.2 million in the first quarter of 2011 to 22.5 million in the same period of 2012, marking an increase of 2.3 million (up 11.4%). Staff costs, before deducting capitalised expenses, amount to million, marking an increase of 10.4 million (6.7%) on the first quarter of 2011 ( million). This is due to: the previously mentioned increase of 553 in the average workforce (up 5.7%); an increase in the average unit cost (up 1.0%), primarily due to the renewal of contracts at the Group s motorway operators and construction companies (a total increase of 2.8%) and the start-up of the Eco-Taxe project, partly offset by the consolidation of Triangulo do Sol, whose average unit cost is lower than the Group s. 47

50 2. Report on operations Permanent staff (*) Position Increase/(Decrease) Absolute % Senior managers Middle managers Administrative staff 4,146 4, Manual workers 1,895 1, Toll collectors 3,009 3, Total 9,935 9, Temporary staff (*) Position Increase/(Decrease) Absolute % Senior managers n,a, Middle managers n,a, Administrative staff Manual workers Toll collectors Total Average workforce (*) (**) Position Increase/(Decrease) Absolute % Senior managers Middle managers Administrative staff 4,518 4, Manual workers 1,979 1, Toll collectors 2,849 2, Total 10,220 9, (*) The period end and average fi gures do not include the workforces of Autostrada Tirrenica and Autostrada Torino Savona. (**) The figure for the average workforce includes temporary staff. 48

51 Other information Other information Joint venture with the Bertin group in Brazil On 30 January 2012 Atlantia reached two agreements, via Autostrade do Brasil, a wholly owned subsidiary, with the Bertin group (via its subsidiary, CIBE) for the creation of two joint ventures, to which the two partners will contribute their respective investments in Brazilian toll motorway operators. On completion of the contributions, the Atlantia Group and the Bertin group will each own 50% of the new company, which Atlantia, in accordance with the related governance agreements, will consolidate on a lineby-line basis, together with the operators (Triangulo do Sol, Rodovia das Colinas and Nascentes das Gerais) contributed to Atlantia Bertin Concessoes SA. In addition, under the second agreement, the Bertin group is to contribute 50% of the operator, Tiete, to the separate venture, Atlantia Bertin Partecipacoes SA, whilst the Atlantia Group has committed to subscribing newly issued shares in this company, after which, in accordance with the related governance agreements, this second holding company will not be consolidated on a line-byline basis. Following the above transactions, the new entities will operate 1,538 km of motorway under concession in Brazil, with the option to add a further 105 km of orbital motorway serving the city of Sao Paulo. Agreements for the acquisition of 54.2% of Autostrade Sud America, the sale of 33% of IGLI and the grant of a call option on Autostrada Torino-Savona On 25 February 2012 Autostrade per l Italia finalised: a) an agreement with Argo Finanziaria SpA for the sale of its entire 33% interest in IGLI SpA, the entity that owns 29.96% of Impregilo SpA, at a price of 87.6 million. This transaction completed on 8 March 2012; b) two separate agreements with SIAS by which: 1) SIAS will, subject to fulfilment of certain conditions precedent (i.e. clearance from the relevant authorities and the agreement of creditor banks), transfer its entire % interest in Autostrade Sud America Srl ( ASA ) to Autostrade per l Italia at a price of million, with the Group then consolidating ASA in its accounts on a line-by-line basis. The shares are to be transferred by the end of the second quarter of 2012; 2) Autostrade per l Italia will grant SIAS a call option on its entire 99.98% interest in Autostrade Torino-Savona SpA. The option is to be exercised no later than 30 September The option price is million. Should the option be exercised, the shares are to be transferred by 15 November 49

52 2. Report on operations 2012, subject to receipt of the necessary approvals (i.e. clearance from the relevant authorities and the agreement of creditor banks); c) an agreement with Mediobanca SpA for the acquisition of an 8.47% stake in ASA at a price of million and on the same terms and conditions agreed with SIAS. The transfer of the shares will take place, subject to fulfilment of certain conditions precedent (i.e. antitrust clearance, the agreement of creditor banks and execution of the sale of the interest in ASA sold by SIAS to Autostrade per l Italia), by the end of the second quarter of Bond issue and Tender Offer On 2 February 2012 Atlantia launched the issue of 7 year bonds worth 1.0 billion and guaranteed by Autostrade per l Italia. The bond issue forms part of the Company s 10 billion Medium/Long-term Note Programme launched on 7 May 2004 and subsequently updated. The bonds, which pay a fixed annual coupon of 4.50%, have a re-offer price of The effective yield to maturity is 4.669%, corresponding to a yield that is 275 basis points above the reference mid-swap rate. Timed to coincide with the bond issue, on 2 February 2012 Atlantia announced the launch of a Tender Offer for the partial buyback of bonds issued by the Company maturing on 9 June 2014 and having a par value of 2,750 million. At the end of the offer period, on 9 February 2012, the Company had received acceptances for bonds with a total par value of 0.5 billion. This transaction saw Atlantia use a part of the cash generated by the above bond issue to reduce debt maturing in The remaining cash will be used for corresponding intercompany loans, designed to meet the funding requirements of Autostrade per l Italia SpA in connection with the investment plan envisaged in its concession agreement, and to buy back a portion of the bonds maturing in Treasury shares At 31 March 2012 Atlantia SpA holds 12,652,968 treasury shares, representing approximately 2.0% of its issued capital. No treasury shares have been traded during the first quarter of

53 Significant regulatory aspects Significant regulatory aspects Snow events in December 2010 With regard to the snow events of December 2010 (described in the Annual Report for 2011), there were no new developments worthy of note during the first quarter of The hearing to decide on the admissibility of the class action suit filed before the Civil Court of Rome by a number of consumers associations (Codici, Unione Nazionale Consumatori, Movimento Difesa del Cittadino and ACU - Associazione Consumatori Utenti), pursuant to art. 140 bis of the consumer code, is scheduled for 29 May The Highways Agency and the Office of Transport Regulation Law Decree 98/2011, converted into Law 111/2011, set up the Highways Agency within the Ministry of Infrastructure and Transport, which is responsible for the Agency s policy setting, supervision and control, to be carried out, in respect of financial aspects, in coordination with the Ministry of the Economy and Finance. The Agency will take over the role of grantor for existing highway concessions from ANAS, exercising every aspect of the role previously assigned to IVCA, the Motorway Concession Inspectorate. On 6 March 2012 the Italian Cabinet gave preliminary approval for the Agency s By-laws pursuant to art. 17, paragraph 2 of Law 400/1988. At the same time, Law Decree 201/2011 converted, with amendments, into Law 214/2011, has set up the Office of Transport Regulation to oversee conditions of access and prices for rail, airport and port infrastructure and the related urban transport links to stations, airports and ports. This legislation was subsequently amended by art. 36 of Law Decree 1/2012 converted, with amendments, into Law 27/2012, which extended the scope of the new regulator s responsibilities to include the motorway sector. In addition, the above Law Decree 1/2012 contains a range of provisions impacting, among other things, on motorway concessions, including (i) art. 51, which, from 1 January 2015, has raised the minimum percentage of works to be contracted out to third-party contractors by the providers of construction services under concession, pursuant to art. 253, paragraph 25 of the Public Contracts Code, from 40% to 50%; and (ii) art. 17, which has introduced a new regime for the holders of fuel service licences, who may now offer other goods and services for sale at their service stations. With regard to motorway service areas, the terms and conditions of sub-concession arrangements in force at 31 January 2012 are unaffected, as are the restrictions linked to competitive tenders for motorway areas under concession, conducted in accordance with the format required by the Office of Transport Regulation. 51

54 2. Report on operations Other ongoing litigation With regard to tolls, Autostrade per l Italia is the defendant in a number of actions, which are still pending, brought before Lazio Regional Administrative Court. The actions, which have been brought by Codacons and other consumers associations, aim to challenge the toll increases introduced in The Antitrust Authority s appeal to the Council of State requesting annulment of Lazio Regional Administrative Court sentences 4994/09 and 5005/09 is still pending. These sentences at first instance partly upheld the appeals brought by ACI Global SpA and Europ Assistance VAI SpA requesting annulment of Antitrust Authority ruling of 23 October 2008 regarding emergency breakdown services. Autostrade per l Italia is a party to the appeals. In relation to unfair competition issues, on 28 July 2011 TAI Srl (a supplier of information systems and IT experts to Autostrade Tech SpA) notified Autostrade Tech and Autostrade per l Italia that it had filed a claim for damages, alleging unfair competition, the theft of TAI s technical know-how by Autostrade Tech and abuse of the defendants dominant position in the form of practices designed to restrict competition. A hearing to discuss the claim has been scheduled for 6 November On 12 March 2012 Varese Provincial Authority filed appeal with the Council of State, requesting annulment of Lombardy Regional Administrative Court sentence 2015/2011, which had declared the Authority s appeal against the introduction of tolls on the Varese-Gallarate section of motorway to be inadmissible. The Authority, on appeal, reiterated its claim that tolls should not be charged on the A8 Varese-Gallarate motorway as it is a link road and not a motorway. Later, on 19 March 2012, Varese Provincial Authority filed a further appeal before Lazio Regional Administrative Court, pursuant to art. 116 of Legislative Decree 104/2010, contesting the refusal on the part of Autostrade per l Italia and ANAS to make available the single concession arrangement and the other information requested by the Authority. On 21 March 2011 Autostrade per l Italia together with Genoa Provincial Authority, the Municipality of Genoa, the Ministry of Infrastructure and Transport, Genoa Port Authority and ANAS were notified of legal action brought before Liguria Regional Administrative Court by several hundred members of the public requesting an injunction annulling the Memorandum of Understanding signed on 8 February 2010, relating to construction of the Genoa Interchange (the so-called Gronda di Ponente). A date for the related hearing has yet to be set. 52

55 Significant regulatory aspects The sentence handed down by the Court of Appeal of Rome on 26 May 2011 partially upheld the main appeal filed by Atlantia SpA and Autostrade per l Italia SpA against Astaldi and others, declaring the latters claims to be inadmissible. The claims had arisen in relation to the contract for works involved in construction of the link road between the junction for Genoa Airport and the SS Aurelia, the C. Colombo airport, the SS 35 flyover and the road running alongside the Torrente Polcevera, a river. The sentence reduced Autostrade per l Italia s original debt to approximately 44 million, of which Autostrade per l Italia has already paid 30 million. Atlantia and Autostrade per l Italia have appealed this sentence before the Court of Cassation. Astaldi has filed a cross-appeal. Finally, Autostrade per l Italia is the defendant in a number of legal actions regarding expropriations, tenders and claims for damages deriving from motorway use. At the present time, the outcomes of the above litigation proceedings are not expected to result in significant charges to be incurred by Group companies, in addition to the amounts already provided as at 31 March 2012 and reported in the consolidated financial statements. 53

56 2. Report on operations Events after 31 March 2012 Canada Pension Plan Investment Board to partner Atlantia in Chile On 19 April 2012 Autostrade per l Italia SpA entered into an agreement to sell Canada Pension Plan Investment Board (CPPIB), a leading Canadian pension fund, a 49.9% interest in Grupo Costanera. The total price amounts to 557 billion Chilean pesos (equal to approximately 857 million). As a result of the transaction, the 50% stake in Nueva Inversiones, now indirectly owned by Autostrade per l Italia, will be transferred to Grupo Costanera, which will thus assume full control of the Group s motorway operators in the Santiago area. The transaction is subject to completion of the acquisition of 100% of Autostrade Sud America through the purchase of the interests held by SIAS and Mediobanca, based on the agreements signed on 25 February 2012, and receipt of the necessary approvals (i.e. clearance from the relevant authorities and the agreement of creditor banks). Following the transactions, Atlantia will own 50.1% of Grupo Costanera and will consolidate the company s accounts. Bonus issue On 24 April 2012, the Annual General Meeting of Atlantia SpA s shareholders, meeting in extraordinary session, examined and approved the proposal to implement a bonus issue, pursuant to art of the Italian Civil Code, of up to a maximum par value of 31,515,600.00, via the issue, on the first available date in the stock exchange calendar for June of this year, of 31,515,600 new ordinary shares with a par value of 1.00, ranking equally in all respects with the existing issued ordinary shares, and consequent amendment of art. 6 of the Articles of Association. The proposed transaction provides a way of implementing the previously announced dividend policy, via an increase in the number of shares in issue. 54

57 Outlook Outlook Provided that the macroeconomic environment in Italy does not worsen, the current situation leads us to expect the Group s consolidated operating performance for the current year to be substantially stable. For the Board of Directors The Chairman 55

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59 Attestation 3