INTERIM FINANCIAL REPORT

Transcription

1 F. Marc de Lacharrière (Fimalac) French société anonyme. Share capital: 126,852,000 Registered office: 97 rue de Lille Paris R.C.S. Paris Phone: +33 (0) INTERIM FINANCIAL REPORT For the Six Months Ended June 30,

2 CONTENTS 1. Interim consolidated financial statements for the six months ended June 30, Page 3 2. Interim management report... Page Statutory Auditors review report... Page Statement by the person responsible for the interim financial report... Page 39 2

3 F. MARC DE LACHARRIÈRE (FIMALAC) INTERIM CONSOLIDATED FINANCIAL STATEMENTS For the Six Months Ended June 30,

4 CONTENTS Consolidated Balance Sheet at June 30, 2014 Assets... 5 Consolidated Balance Sheet at June 30, 2014 Equity and Liabilities... 6 Consolidated Income Statement for the Six Months Ended June 30, Consolidated Statement of Comprehensive Income for the Six Months Ended June 30, Consolidated Statement of Changes in Equity... 9 Consolidated Statement of Cash Flows NOTE N 1 - GENERAL INFORMATION SIGNIFICANT EVENTS NOTE N 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the consolidated income statement Summary of significant accounting policies Changes in scope of consolidation NOTE N 3 - NOTES TO THE BALANCE SHEET AND INCOME STATEMENT AND OTHER INFORMATION Goodwill Intangible assets Property and equipment Investments in associates Fitch Group goodwill Fitch Group segment information Financial assets Trade receivables Other receivables Cash and cash equivalents Deferred taxes Share capital Long- and short-term debt Pension and other employee benefit obligations Stock options BSPCE warrants Provisions Other liabilities Information by business segment Results by business segment Information by geographical segment Revenue by geographical segment Employee benefits expense and number of employees Finance costs and other financial income and expenses, net Income tax expense Other commitments Earnings per share Dividends Related party transactions Subsequent events

5 F. MARC DE LACHARRIÈRE (FIMALAC) GROUP Consolidated Balance Sheet at June 30, 2014 Assets ASSETS NON-CURRENT ASSETS Notes June 30, 2014 December 31, 2013 Goodwill Intangible assets Property and equipment Investments in associates Non-current financial assets Deferred tax assets Other non-current assets - - TOTAL NON-CURRENT ASSETS 1, ,127.5 CURRENT ASSETS Inventories Trade receivables Other receivables Current financial assets Cash and cash equivalents TOTAL CURRENT ASSETS Assets held for sale TOTAL ASSETS 1, ,

6 F. MARC DE LACHARRIÈRE (FIMALAC) GROUP Consolidated Balance Sheet at June 30, 2014 Equity and Liabilities EQUITY AND LIABILITIES Notes June 30, 2014 December 31, 2013 EQUITY Share capital Additional paid-in capital Treasury stock (76.2) (72.3) Translation reserves (40.8) (30.6) Retained earnings Attributable profit for the period Other comprehensive income/(expense) 8.6 (1.7) Total comprehensive income EQUITY ATTRIBUTABLE TO EQUITY HOLDERS Non-controlling interests TOTAL EQUITY NON-CURRENT LIABILITIES Pension and other employee benefit obligations Long-term provisions Long-term debt Deferred tax liabilities Other non-current liabilities 0.4 TOTAL NON-CURRENT LIABILITIES CURRENT LIABILITIES Short-term provisions Short-term debt Trade payables Other current liabilities TOTAL CURRENT LIABILITIES Liabilities held for sale TOTAL EQUITY AND LIABILITIES 1, ,

7 F. MARC DE LACHARRIÈRE (FIMALAC) GROUP Consolidated Income Statement for the Six Months Ended June 30, 2014 Notes Six months ended June 30, 2014 Six months ended June 30, 2013 Revenue / Other income Employee benefits expense 3.19 (24.8) (10.9) Purchases used in the generation of revenue and external charges (32.5) (22.9) Taxes other than on income (0.9) (1.2) Depreciation and amortization (5.0) (3.2) Charges to/reversals of provisions, net (0.2) (0.3) Other recurring operating income and expenses, net RECURRING OPERATING LOSS (1.6) (5.8) Other operating income and expenses, net (2.0) (0.5) OPERATING LOSS (3.6) (6.3) Finance costs, net 3.20 (2.0) 0.8 Other financial income and expenses, net Income tax expense 3.21 (2.5) (2.7) Share of profit of associates Net capital gain/(loss) on disposals & net profit/(loss) from discontinued operations PROFIT FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (0.4) 0.0 Earnings per share (in ) 3.23 Basic earnings per share Diluted earnings per share Earnings per share from continuing operations Basic earnings per share Diluted earnings per share Earnings per share from discontinued operations Basic earnings per share Diluted earnings per share (0.2) 7

8 F. MARC DE LACHARRIÈRE (FIMALAC) GROUP Consolidated Statement of Comprehensive Income for the Six Months Ended June 30, 2014 Six months ended June 30, 2014 Six months ended June 30, 2013 Profit for the period Other comprehensive income gains and losses recognized directly in equity, net of tax Exchange differences on translating foreign operations 4.8 (3.6) Valuation gains and losses on financial assets 6.3 (6.5) Gains and losses on cash flow hedges (1.2) 0.5 Actuarial gains and losses on employee benefit obligations - - Total other comprehensive income, before tax 9.9 (9.6) Income tax (1.3) 3.0 Total other comprehensive income, net of tax* Attributable to equity holders of the parent Attributable to minority interests (0.8) (0.1) Total comprehensive income *o/w reclassified to the income statement 8.6 (6.6) Earnings per share (in ) Basic earnings per share Diluted earnings per share

9 F. MARC DE LACHARRIÈRE (FIMALAC) GROUP Consolidated Statement of Changes in Equity At June 30, 2014, the Company s share capital was made up of 28,830,000 ordinary shares, each with a par value of 4.40 and all fully paid. Movements in share capital during the year Share capital at December 31, 2013 (in number of shares) 28,830,000 Canceled shares - Share capital at June 30, ,830,000 Changes in equity between December 31, 2012 and June 30, 2013 Other comprehensive income/(expense) Share capital Additional paid-in capital Retained earnings Translation reserve Valuation gains and losses on financial assets Actuarial gains and losses Gains and losses on cash flow hedges Treasury stock Equity attributable to equity holders Noncontrolling interests Total equity Equity at December 31, (30.6) (48.6) Issue of share capital 0.0 Purchases and sales of treasury stock (9.6) (9.6) (9.6) Cancellations of treasury stock 0.0 Cancellation of gains and losses on sales of treasury stock and transaction costs Dividends (49.1) (49.1) (0.1) (49.2) Fair value of stock options recognized in profit Other Profit for the period Other comprehensive income/(expense) (3.6) (4.3) 1.3 (6.6) (0.1) (6.7) Changes in scope of consolidation Equity at June 30, (34.2) (3.0) (58.2)

10 Changes in equity between December 31, 2013 and June 30, 2014 Other comprehensive income /(expense) Share capital Additional paid-in capital Retained earnings Translation reserve Valuation gains and losses on financial assets Actuarial gains and losses Gains and losses on cash flow hedges Treasury stock Equity attributable to equity holders Noncontrolling interests TOTAL EQUITY Equity at December 31, (40.8) (72.3) Issue of share capital 0.0 Purchases and sales of treasury stock (3.9) (3.9) (3.9) Cancellations of treasury stock 0.0 Cancellation of gains and losses on sales of treasury stock and transaction costs Dividends (51.1) (51.1) (51.1) Fair value of stock options recognized in profit Put options over non-controlling interests Other (0.5) (0.5) (0.5) Profit/(loss) for the period (0.4) 37.1 Other comprehensive income/(expense) (0.8) 8.6 (0.4) 8.2 Changes in scope of consolidation Equity at June 30, (36.0) (76.2) The accompanying notes form an integral part of the consolidated financial statements. 10

11 F. MARC DE LACHARRIÈRE (FIMALAC) GROUP Consolidated Statement of Cash Flows Six months ended June 30, 2014 Six months ended June 30, 2013 (in thousands) Profit for the period Net profit from discontinued operations 0.2 +/- Depreciation, amortization and provision expense, net /+ Other non-cash (income) and expenses, net 0.3 (9.1) -/+ Disposal (gains) and losses, net (0.2) +/- Share of (profit)/loss of associates (42.6) (40.6) - Dividends received from non-consolidated companies - - Cash flow after finance costs, net and income tax expense (0.7) (8.6) + Finance costs, net (0.7) 8.6 +/- Income tax expense (benefit) Cash flow before finance costs, net and income tax expense Income taxes paid (6.1) (3.3) + Change in operating working capital (9.0) 3.4 NET CASH FROM/(USED IN) OPERATING ACTIVITIES (14.0) 2.8 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of intangible assets and property and equipment (4.1) (7.5) Purchases of businesses (14.9) Proceeds from disposals of intangible assets and property and equipment - - Purchases of non-current financial assets (net of cash acquired) (111.1) (1.2) Proceeds from disposals of non-current financial assets Change in loans and receivables and financial assets at fair value through profit or loss (A) 7.1 (22.3) Effect of changes in scope of consolidation Dividends received from Fitch, associates and non-consolidated companies NET CASH FROM/(USED IN) INVESTING ACTIVITIES (78.3) 17.7 CASH FLOWS FROM FINANCING ACTIVITIES Purchases and sales of treasury stock, net (3.4) (9.6) Dividends paid (51.1) (49.1) Proceeds from new borrowings (including lease liabilities) Repayments of borrowings (2.0) (2.0) Interest paid, net 0.7 (8.9) NET CASH FROM/(USED IN) FINANCING ACTIVITIES 33.0 (63.4) Effect of changes in foreign exchange rates and other (6.6) 9.2 Net (decrease)/increase in cash and cash equivalents (65.9) (33.7) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD (101.1) (18.6) CASH AND CASH EQUIVALENTS AT END OF PERIOD (Note 3.8) (1) (167.0) (52.3) The accompanying notes form an integral part of the consolidated financial statements. (*) Cash and cash equivalents in the cash flow statement are defined as cash and cash equivalents less short-term bank loans and bank overdrafts (see Note 3.8). Changes in cash and cash equivalents do not include changes in financial assets classified as at fair value through profit or loss, which are recorded separately in the cash flow statement (A). 11

12 NOTE N 1 - GENERAL INFORMATION The Group s parent company, F. Marc de Lacharrière (Fimalac), does not conduct any business on its own behalf. It holds stakes in several operating subsidiaries and is actively involved in determining their strategies. Fimalac is organized as a société anonyme (joint stock company) governed by the laws of France. Its registered office is located in Paris and its shares are traded on the NYSE Euronext Paris stock exchange. The Group has five operating segments based on the definition in IFRS 8 Operating Segments: Financial Services, represented by Fitch Group, which has four main business lines: Credit ratings, conducted through Fitch Ratings. Data and analytics, conducted through Fitch Solutions, whose product offerings include Fitch s research delivery, risk and performance analytics, surveillance tools, structured finance workflow solutions, and pricing and valuation services. Financial training and professional development conducted through Fitch Learning. Country risk analysis and industry research through Business Monitor International (BMI), a company acquired by Fitch Group in March Luxury Hotels & Leisure, comprising a 40% interest in Groupe Lucien Barrière. Entertainment, consisting mainly of Vega, France s leading entertainment venue operator, and Gilbert Coullier Productions, Auguri and K-Wet Productions, all of which are 40%-owned. Digital, a new operating segment primarily made up of Webedia, Allociné, 750g, and Odyssée Interactive Jeuxvideo.com, which was acquired in June Real Estate, represented by North Colonnade Ltd, owner of the Canary Wharf building in London, and by SCI 101, which leases the building at 101 rue de Lille, Paris 7. The Group s operations are conducted primarily in France, the United States, the United Kingdom, the other European Union countries, Asia and Latin America. Seasonal fluctuations in business The businesses of Fitch Group and Vega are not subject to significant seasonal fluctuations. However, Groupe Lucien Barrière s revenues are generally higher in the summer months and during vacation periods, with the result that it makes a bigger contribution to second-half earnings. As regards Digital Activities, advertising revenue is traditionally lower in the summer months than the rest of the year. 12

13 SIGNIFICANT EVENTS Developments in Digital Activities The acquisition of Jeuxvideo.com by Webedia In June 2014, Webedia acquired all outstanding shares in Odyssée Interactive, the publisher of Jeuxvidéo.com, for 92.6 million. This company was fully consolidated by Fimalac as from the date of acquisition. Webedia continued its expansion in France and internationally with the acquisition of Diwanee (55.5%), Melberries (60%) and Overblog (100%). Allociné strengthened its presence in Germany in the cinema news media segment with the acquisition of MoviePilot s German operations in June 2014 for 14.9 million. Entertainment Activities In May 2014, 3-S acquired 50% of ticketing solution publisher Kyro-Concept. Acquisition of Business Monitor International (BMI) by FITCH In March 2014, Fitch Group acquired all outstanding shares in London-based Business Monitor International (BMI), a provider of country risk analysis and industry research. With this acquisition, Fitch Group created its fourth business line, which has been fully consolidated by Fitch Group as from the date of acquisition. Sale and leaseback transaction at SCI 101 In January 2014, SCI 101 completed the sale and leaseback of the building at 101, rue de Lille, Paris with two financial institutions for 14.1 million. 13

14 NOTE N 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation of the consolidated income statement Since April 11, 2012, Fitch Group has been owned on a 50/50 basis by Fimalac and Hearst. Because it is jointly controlled, it is accounted for by the equity method in the consolidated financial statements, where it appears under Investments in associates in the balance sheet and Share of profit of associates in the income statement Summary of significant accounting policies This interim financial report should be read in conjunction with the annual financial statements for the fiscal year ended December 31, The interim consolidated financial statements are presented in condensed format with selected explanatory notes, and do not therefore comprise all the information and notes included in a complete set of annual financial statements prepared in accordance with the IASs and IFRSs adopted by the European Union for application in the fiscal year commencing January 1, The IASs and IFRSs adopted by the European Union can be viewed at the European Commission website: The accounting methods used to prepare the interim financial statements are the same as those used to prepare the annual financial statements for the year ended December 31, 2013, except where otherwise required by any new standards, amendments to existing standards or interpretations applicable in accounting periods beginning on or after January 1, New standards, interpretations and amendments to existing standards applicable as of January 1, 2014: IFRS 10 Consolidated Financial Statements IFRS 11 Joint Arrangements IFRS 12 Disclosure of Interests in Other Entities Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities IAS 27 revised Separate Financial Statements IAS 28 revised Investments in Associates and Joint Ventures Amendment to IAS 32 Offsetting Financial Assets and Financial Liabilities. Amendment to IAS 36 Recoverable Amount Disclosures for Non-Financial Assets Amendment to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting The standards, amendments, and interpretations applied as from January 1, 2014 have no material impact on the consolidated financial statements for the six months ended June 30,

15 Standards and interpretations adopted by the European Union as of December 31, 2013 that may be early adopted in consolidated financial statements for the period commencing on January 1, 2014: IFRIC 21 Levies The Group has not early adopted this standard in its condensed consolidated financial statements for the six months ended June 30, Analyses are currently underway to assess its potential impact on the Group s earnings and financial position. New standards published by the IASB but not yet adopted for use in the European Union: The Group could be affected by: Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortization, applicable to annual periods beginning on or after January 1, Amendments to IAS 19 Defined Benefit Plans: Employee Contributions, applicable to annual periods beginning on or after July 1, Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations, applicable to annual periods beginning on or after January 1, IFRS 9 Financial Instruments (Phase 1: Classification and Measurement of Financial assets and Financial Liabilities), applicable to annual periods beginning on or after January 1, IFRS 14 Regulatory Deferral Accounts, applicable to annual periods beginning on or after January 1, IFRS 15 Revenue from Contracts with Customers, applicable to annual periods beginning on or after January 1, Annual IFRS Improvements ( and cycles), applicable to annual periods beginning on or after July 1, Analyses are currently underway to assess the impact of these standards on the Group s earnings and financial position. The Group complies with the fundamental principles of IFRS (fair presentation, accrual basis of accounting, consistency of presentation, materiality and aggregation, and going concern). The preparation of financial statements requires the use of estimates and assumptions that may have an impact on the reported amounts of assets and liabilities and income and expenses. The estimates and assumptions are based on historical experience and various other factors, which are believed to be reasonable under the circumstances. Actual results may differ from these estimates, which are reviewed on an ongoing basis. 15

16 Changes in scope of consolidation Acquisitions for the period Subsidiary % interest acquired Acquisition date Cost (in m) Digital Activities Webedia acquisitions Melberries 60.00% Feb Diwanee 55.50% Feb Overblog % May Jeuxvidéo.com % Jun Entertainment Activities Kyro-Concept (Data sport) 49.99% May Digital Activities Webedia has strengthened its offering in France and internationally with the acquisition of the following four companies: o Melberries, a promoter of online audiovisual content. o Diwanee, a company that operates websites primarily in the Middle East. o Overblog, whose core business is hosting, managing and creating websites. o Odyssée Interactive, the publisher of Jeuxvidéo.com. These companies constituting the new Digital business line have been fully consolidated as from the dates they were acquired. Their contribution to consolidated revenue and operating profit is not yet material given that the acquisitions were completed late in the period. Lastly, through its German subsidiary, Allociné acquired the German operations of cinema news website MoviePilot for 14.9 million. The allocation of the purchase price and the valuation of the identifiable assets acquired and liabilities assumed are being analyzed by the Group and will be finalized in the 12 months following each acquisition. Acquisition of Melberries and Diwanee Put and call options have been written by Webedia on non-controlling interests in Melberries and Diwanee, leading the Group to recognize a corresponding liability of 8.8 million representing the present value of the estimated exercise price of the options. This amount has been recognized as a deduction from non-controlling interests in equity. The Group opted to measure the non-controlling interests at fair value (full goodwill method), thereby recognizing goodwill of 16.3 million. 16

17 Melberries and Diwanee goodwill was calculated as follows: Goodwill Acquisition price 13.5 Fair value of non-controlling interests 8.8 Total 22.3 Consolidated net assets acquired 6.0 Total full goodwill 16.3 Acquisitions of all outstanding shares Odyssée Interactive and Overblog goodwill was calculated as follows: Goodwill Acquisition price 95.4 Consolidated net assets acquired (100%) 3.8 Total Odyssée Interactive and Overblog goodwill 91.6 Entertainment Activities A 49.99% interest in Kyro-Concept was acquired in May 2014 for 8.7 million. Provisional goodwill recognized on the acquisition amounted to 5.8 million. This company is accounted for by the equity method in the consolidated financial statements. 17

18 NOTE N 3 - NOTES TO THE BALANCE SHEET AND INCOME STATEMENT AND OTHER INFORMATION Goodwill (In millions) Goodwill at June 30, 2014 and December 31, 2013 may be analyzed as follows: Financial Services (Fitch Ratings) Cash-generating units/subsidiaries Entertainment Activities Digital Activities Other (Holding Companies) Cost at December 31, Changes in scope of consolidation 0.0 Additions (1) Disposals 0.0 Translation adjustments 0.0 Reclassifications 0.0 Cost at June 30, Accumulated impairment losses at December 31, Changes in scope of consolidation 0.0 Impairment losses for the period 0.0 Disposals 0.0 Translation adjustments 0.0 Other 0.0 Accumulated impairment losses at June 30, Net at June 30, (1) See note 2.3 Changes in Scope of Consolidation No impairment losses were recognized in the six months ended June 30, 2014 because the recoverable amount of goodwill at the period-end was greater than its carrying amount Intangible assets Intangible assets by category Net at June 30, 2014 Net at December 31, 2013 Development costs Patents, licenses and other rights Trademarks Contractual customer relationships Payments on account TOTAL TOTAL 18

19 Intangible assets Movements Carrying amount at December 31, Changes in scope of consolidation 0.7. Additions 0.9. Disposals (0.1). Amortization for the period (1.2). Translation adjustments (0.3). Other reclassifications 0.3 Carrying amount at June 30, Amortization for the period is recorded within operating items in the income statement under Depreciation and amortization. No impairment losses were recorded during the period Property and equipment Property and equipment by category Net at December 31, Net at June 30, Land Leased land 4.3 Buildings Leased buildings (1) 6.0 Machinery and equipment Leased machinery and equipment (1) 3.3 Other property and equipment Assets under construction Advances and prepayments TOTAL (1) Reclassification of property and equipment following the sale and leaseback transaction carried out by SCI 1010 (see Significant Events) Canary Wharf building This building is measured using the cost model. At June 30, 2014, its carrying amount (net of accumulated depreciation and impairment) was 267 million, of which million for the land and million for the building, fixtures and fittings. These amounts break down as follows: Carrying amount of the Canary Wharf building (in millions) Acquisition cost Capitalized borrowing costs Cost Accumulated depreciation and impairment Carrying amount at June 30, 2014 Land Building Total in Total in The building s estimated value in use was updated at June 30, 2014 taking into account i) Fimalac s ability and intention to hold the asset over a long period; ii) the quality of the building and its prime location; and iii) quantitative factors reflecting the terms of the lease signed in August 2013 with KPMG. In particular, the valuation took into account the granting of rent-free periods, a projected yield over the life of the property ranging from 5.10% to 5.50% and a discount rate of between 5.75% and 6.20%. 19

20 Property and equipment Movements Carrying amount at December 31, Changes in scope of consolidation 0.4. Additions 3.4. Disposals (0.1). Depreciation for the period (3.8). Translation adjustments Reclassifications - Carrying amount at June 30, Depreciation for the period is recorded within operating items in the income statement under Depreciation and amortization. Impairment losses are recorded under Other operating income and expenses, net. No material impairment losses were recorded during the period Investments in associates Investments in associates break down as follows at June 30, 2014: % interest Equity in net assets o/w goodwill (1) o/w share of profit/(loss) for the period Fitch Group 50.0% Groupe Lucien Barrière 40.0% (0.4) Other (Entertainment Activities) 40 to 50% Talent Group (Webedia subsidiaries) 34.0% (1) Including the share of goodwill of associates. The following table shows key figures for the main associates, none of which are listed. Liabilities at Assets at June Total revenue for Profit/(loss) for December 31, 30, 2013 the period the period 2012 Fitch Group 1, Groupe Lucien Barrière (1) 1, (1.6) (1) Corresponding to the consolidated financial statements of Groupe Lucien Barrière for the six months ended April 30,

21 The change in the carrying amount of investments in associates breaks down as follows: FITCH GROUP GOODWILL Fitch Group Net at December 31, Change in scope of consolidation (acquisition of BMI) Disposals - Impairment losses - Translation adjustments (43.2) Net at June 30, FITCH GROUP SEGMENT INFORMATION Fitch Group condensed income statement: Six months ended June 30, 2014 Six months ended June 30, 2013 INCOME STATEMENT Revenue Recurring operating profit Finance costs and other financial income and expenses, net (2.3) (6.8) Profit attributable to equity holders of the parent

22 Revenue by geographical segment based on customer location: Six months ended June 30, 2014 Six months ended June 30, 2013 North America Latin America Europe, the Middle East & Africa (EMEA) Asia TOTAL Revenue by business segment: Six months ended June 30, 2014 Six months ended June 30, 2013 Fitch Ratings Fitch Solutions Fitch Learning BMI Other TOTAL Number of employees by geographical segment Average number of employees June 30, 2014 December 31, 2013 Employees at the period-end June 30, 2014 December 31, 2013 North America Latin America Europe, the Middle East & Africa (EMEA) Asia TOTAL 2,511 2,445 2,522 2,484 22

23 Financial assets Movements in non-current financial assets are as follows: Loans and advances Deposits & guarantees Held-tomaturity investments Available-forsale financial assets (1) Financial assets at fair value through profit or loss Other derivative instruments NON-CURRENT FINANCIAL ASSETS Carrying amount at December 31, Additions Disposals (0.4) (0.9) (1.3) Changes in scope of consolidation 0.0 Changes in fair value as of June 30, Recognized in profit Recognized in equity(*) 6.9 (0.6) 6.3 Carrying amount at June 30, (*) Corresponding to changes in fair value of Mercialys shares for 4.9 million and Next Radio shares for 2 million. TOTAL Available-for-sale financial assets Available-for-sale financial assets break down as follows: Carrying amount % interest Mercialys(**) % Société Fermière du Casino Municipal de Cannes(*) % Venture capital funds (FCPR)(*) 10.8 Nextradio TV(**) % Other 2.3 Total available-for-sale financial assets (**) Measured at fair value based on Level 1 inputs (*) Measured at fair value based on Level 3 inputs Movements in current financial assets are as follows: Loans & advances Deposits and guarantees Held-to-maturity investments Available-for-sale financial assets Financial assets at fair value through profit or loss Other derivative instruments CURRENT FINANCIAL ASSETS Carrying amount at December 31, Additions 0.0 Disposals (8.7) (8.7) Changes in fair value as of June 30, Recognized in profit Recognized in equity 0.0 Carrying amount at June 30, TOTAL 23

24 Trade receivables Trade receivables break down as follows: Gross Provisions Carrying amount At December 31, (1.0) Movements for the period 3.4 (0.1) 3.3. Changes in scope of consolidation Translation adjustments At June 30, (1.1) Other receivables Other receivables break down as follows: Prepaid taxes and employee benefits expense Sundry receivables Prepaid expenses Total At December 31, Changes in scope of consolidation Movements for the period (0.7) Translation adjustments and reclassifications 0.2 (0.2) 0.0 At June 30, Cash and cash equivalents Cash and cash equivalents break down as follows: Cash and accrued interest Cash equivalents TOTAL At December 31, Changes in scope of consolidation Movements for the period (13.3) (7.2) (20.5) Translation adjustments (1.0) (1.0) At June 30,

25 In the statement of cash flows, net cash and cash equivalents at the beginning and end of the period break down as follows: Cash and cash equivalents Bank overdrafts Revolving bank loans and commercial paper facilities Net cash and cash equivalents At December 31, (42.9) (101.8) (101.1) Changes in scope of consolidation Movements for the period (20.5) (9.0) (42.2) (71.7) Translation adjustments (1.0) (1.0) At June 30, (51.9) (144.0) (167.0) Deferred taxes Net deferred taxes break down as follows: December 31, 2013 Changes in scope of consolidation Movements recorded in equity Movements recorded in profit Translation adjustments and other June 30, 2014 Differences arising from remeasurement of noncurrent assets (11.3) 0.5 (0.2) (11.0) Reserves Provisions and pension and other employee benefit obligations Tax loss carryforwards 22.8 (0.3) Other (0.2) (1.1) (0.2) (1.5) TOTAL (1.1) 1.7 (0.1)

26 Share capital Number of shares Treasury stock TOTAL At December 31, ,892,640 1,937,360 28,830,000 Movements for the period Shares delivered on exercise of employee stock options Purchases, sales and transfers of treasury stock (43,500) 43,500 At June 30, ,849,140 1,980,860 28,830, Long- and short-term debt Long- and short-term debt breaks down as follows: June 30, 2014 December 31, 2013 Long-term debt Bank borrowings Other long-term debt Total long-term debt Short-term debt Bank borrowings Other short-term debt Total short-term debt

27 Bank borrowings June 30, 2014 December 31, 2013 LONG-TERM Bank borrowings Revolving commercial paper facilities - - Finance lease liabilities Bank overdrafts - - Accrued interest - - Total long-term bank borrowings SHORT-TERM Bank borrowings Revolving commercial paper facilities Finance lease liabilities - - Bank overdrafts Accrued interest Total short-term bank borrowings Movements in long- and short-term debt are as follows: Changes in December Increases/ Translation scope of Reclassifications June 30, , 2013 decreases adjustment consolidation Bank borrowings (1.2) Finance lease liabilities Total long-term (1.2) Bank borrowings and accrued interest Revolving commercial paper facilities Bank overdrafts Finance lease liabilities Total short-term

28 Fimalac financing As of June 30, 2014, Fimalac had a million three-year loan facility from its banking partners, with a two-year extension option. Details of this facility are as follows: Inception date Expiry date Facility amount Fimalac Confirmed lines of credit July 2013 July m Amount drawn down at June 30, 2014 (120.0)m Undrawn amount (Fimalac) See Note 3.22 Off-Balance Sheet Commitments 120.9m The facility agreement does not include any rating triggers. However, the borrower is expected to comply with the following ratios: Consolidated net debt/equity < 0.7 Net cash flow/debt service > 1.10 Fimalac was in compliance with these ratios as of June 30, An addendum signed in July 2014 increased the facility to 395 million for a period of three years from the date of signature, with an option to extend the agreement for a further two years. Other long- and short-term debt LONG-TERM Derivative instruments 1.3 June 30, 2014 December 31, 2013 Other Total other long-term debt SHORT-TERM Derivative instruments (0.1) 0.2 Other Total other short-term debt Detail June 30, 2014 December 31, 2013 Long-term North Colonnade loan (from Hearst) Deposits received Contingent consideration 3.9 NCI puts (Digital Activities) Derivative instruments 1.3 Total other long-term debt Short-term Contingent consideration 5.9 Private equity funds: uncalled capital commitments Accrued interest 0.4 Derivative instruments (0.1) 0.2 Total other short-term debt

29 Pension and other employee benefit obligations No material changes in pension and other long-term employee benefit obligations were recorded during the period Stock options Overview of stock option plans 2011 Plan Type of options Purchase options Grant date February 4, 2011 Start of exercise period February 4, 2011 End of exercise period February 4, 2016 Exercise price* Number of options granted 200,250 Vesting condition: continued presence within the Group Except in the case of retirement, disability or death Yes Except in the case of redundancy or unfair dismissal No Number of options outstanding at December 31, ,450 Options granted during the period Options exercised during the period (27,625) Options canceled during the period Number of options outstanding at June 30, ,825 Number of options exercisable at December 31, ,825 Fair value per option at the grant date 6.28 The exercise price is equal to the average of the opening prices for Fimalac shares over the twenty trading days preceding the grant date, without any discount. IFRS 2 is applied to all plans set up after November 7, The Group has no contractual or constructive obligation to buy back the shares acquired by grantees on exercise of stock options or to settle the options in cash BSPCE warrants Webedia has set up various plans providing for the grant of BSPCE founder share warrants to officers and employees of the Company with put and call options on the shares obtained on exercise of the warrants. The warrants correspond to cash-settled share-based payment transactions and their cost is therefore recognized as the corresponding employee services are rendered. The cost recognized in the first half of 2014 was not material. 29

30 Details of the BSPCE warrant plans are presented below: Grant date End of exercise period Exercise price Number of warrants granted Number of warrants cancelled Number of warrants at June 30, Plan October 29, 2008 October 29, Plan February 27, 2009 February 27, Plan July 11, 2011 July 11, Plan February 15, 2011 February 15, Plan December 22, 2011 December 22, ,720 2, CB Plan Former Tfco plan June 9, 2011 June 9, ,313 2,313 Former Tfco plan June 1, 2012 June 1, ,887 (189) 1, Plan June 30, 2012 June 30, ,333 9, Plan July 26, 2013 July 26, ,250 (7750) 15, Plan December 19, 2013 December 19, ,976 (1300) 21, Provisions Movements in provisions may be analyzed as follows: Before discounting Discounted Dec. 31, 2013 Changes in consolidation scope & reclassifications Charges Utilizations Reversals of surplus provisions June 30, 2014 Discounting adjustment at June 30, 2014 June 30, 2014 Dec. 31, 2013 o/w shortterm at June 31, 2014 Claims and litigation (0.3) Environmental risks Seller s warranties (0.1) Other 2.5 (0.2) 0.1 (0.1) Total provisions (0.4) (0.1) Fimalac s management considers that these provisions adequately cover the Group s exposure to environmental, employee-related, tax and other risks. To the best of management s knowledge, at June 30, 2014 there were no other risks that could have a material adverse effect on the financial position of the Company or the Group. Other litigation Goom has filed suit against Fimalac and Fimalac Développement with the Paris Commercial Court, claiming damages for the two companies alleged failure to honor their undertakings in connection with discussions for the possible acquisition of Virgin Radio. Fimalac and Fimalac Développement consider that they have serious arguments for their defense against this manifestly unreasonable claim. 30

31 Other liabilities Other liabilities may be analyzed as follows: Accrued employee benefits expense Accrued taxes Other accrued liabilities and payables Deferred income Total At December 31, Changes in scope of consolidation Movements for the period 0.2 (1.6) (2.6) 1.9 (2.1). Translation adjustments and other (0.1) At June 30,

32 Information by business segment RESULTS BY BUSINESS SEGMENT The following table presents information by business segment: Financial Services (Fitch Group) Hotel & Leisure Activities Entertainment Activities Digital Activities Real Estate Activities Parent and Holding Companies TOTAL First-half 2014 First-half 2013 First-half 2014 First-half 2013 First-half 2014 Total revenue Intra-group revenue Reported revenue Recurring operating profit/(loss) (0.8) (4.9) (5.5) (1.6) (5.8) - o/w depreciation and amortization expense (0.9) (0.8) (1.2) (2.4) (2.1) (0.5) (0.3) (5.0) (3.2) - o/w other non-cash items 0.0 (0.2) Other operating income and expenses, net Operating loss First-half 2013 First-half 2014 First-half 2013 First-half 2014 First-half 2013 First-half 2014 First-half 2013 First-half 2014 First-half 2013 (2.0) (0.5) (3.6) (6.3) Finance costs, net (2.0) 0.8 Other financial income and expenses, net Income tax expense (2.5) (2.7) Share of profit/(loss) of associates (0.4) Net profit/(loss) from discontinued operations (0.2) (0.2) 0.0 Profit for the period Fitch Group results are presented in detail in Note

33 Information by geographical segment REVENUE BY GEOGRAPHICAL SEGMENT Revenue by location of customer: First-half 2014 First-half 2013 France United Kingdom Other European Union countries 2.1 United States 0.7 South America 0.8 Other countries 1.1 Total Employee benefits expense and number of employees Employee benefits expense may be analyzed as follows: First-half 2014 First-half 2013 Employee benefits expense including termination benefits Stock option costs and other benefits Payroll taxes Total The Webedia sub-group, which was not yet consolidated as of June 30, 2013, added 14 million to employee benefits expense for the six months ended June 30, Number of employees Number of employees by geographical segment: Average number of employees Six months ended June 30, 2014 Year ended Dec. 31, 2013 Employees at the period-end At June 30, 2014 At Dec. 31, 2013 France United Kingdom Other European Union countries Latin America Other countries Total 1, , Including 179 people relating to acquisitions carried out by Webedia in the first half of

34 Average number of Group employees by business segment: Average number of employees Six months ended June 30, 2014 Year ended Dec. 31, 2013 Employees at the period-end At June 30, 2014 At Dec. 31, 2013 Digital Entertainment Real estate Parent and holding companies Total 1, , Finance costs and other financial income and expenses, net This item may be analyzed as follows: First-half 2014 First-half 2013 Income from cash and cash equivalents and valuation gains and losses on financial assets at fair value through profit or loss 1.6 (0.1) Gains/(losses) on interest rate hedges of cash and cash equivalents and debt Gains/(losses) on currency hedges of cash and cash equivalents and debt and translation adjustments to cash and cash equivalents 0.3 (1.1) Sub-total: income from cash and cash equivalents and net impact of currency and interest rate hedges Interest expense on bank borrowings (1) (4.1) (7.4) Finance costs, net (2.0) 0.8 Gains/(losses) on financial receivables Discounting adjustments (0.2) Movements in provisions for impairment of other financial assets 0.1 (0.3) Other financial income and expenses, net 0.3 Total other financial income and expenses, net (1) In the six months ended June 30, 2013, this item mainly included interest expense on interest rate hedges. 34

35 Income tax expense First-half 2014 First-half 2013 Current taxes (4.2) (3.7) Deferred taxes Total income tax expense (2.5) (2.7) The difference between actual income tax expense and theoretical income tax determined by applying the standard tax rate can be explained as follows: Profit from continuing operations First-half 2014 First-half 2013 Profit/(loss) before tax (before share of profit of associates and profit from discontinued operations) (2.8) (1.2) Tax at standard rate 34.43% (1.0) (0.4) Actual income tax expense Difference Differences due to foreign tax rates Other temporary differences 0.5 (0.1) Permanent differences* Difference * Including taxes on dividend income (3% surtax on distributed income, expense add-back, withholding taxes) Other commitments Off-balance sheet commitments are as follows: At June 30, 2014 At December 31, 2013 Commitments given Guarantees given* Other commitments given Other Debt collateral Mortgage on the London building** Total commitments given Commitments received Including Fimalac unused lines of credit Other commitments received*** Total commitments received *When Algorithmics was sold on October 20, 2011, Fimalac gave a seller s warranty to the buyer, IBM. Aggregate payments under the warranty are capped at $100 million ( 73.2 million) except for tax claims. ** Mortgage granted as security for the 80 million ( 100 million) loan obtained from Axa in connection with the partial refinancing of North Colonnade Ltd s debt. *** In connection with the Webedia, Allociné, Odyssée Interactive, Diwanee and Overblog acquisitions, the sellers made representations and warranties for amounts of up to 1.9 million, 10 million, 18.5 million, 4.2 million and 0.9 million respectively. Concerning Allociné, Odyssée Interactive and Diwanee, for the representations and warranties considered by the parties as essential, the sellers could each be required to pay an amount equal to their share of the sale price. 35

36 Earnings per share Basic earnings per share are calculated by dividing profit attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the period. First-half 2014 First-half 2013 Profit attributable to equity holders of the parent (in thousands) 37,466 36,751 Weighted average number of ordinary shares 26,894,825 27,392,789 Basic earnings per share (in ) Profit from continuing operations attributable to equity holders of the parent (in thousands) 37,673 36,751 Weighted average number of ordinary shares 26,894,825 27,392,789 Basic earnings per share from continuing operations (in ) Profit from discontinued operations attributable to equity holders of the parent (in thousands) (207) 0 Weighted average number of ordinary shares 26,894,825 27,392,789 Earnings per share from discontinued operations (in ) (0.0077) To calculate diluted earnings per share, profit attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares outstanding are adjusted for the effects of dilutive potential ordinary shares. At June 30, 2014, there were no dilutive potential ordinary shares and diluted earnings per share were therefore the same as basic earnings per share Dividends The 2013 dividend paid in 2014 amounted to 1.90 per share. 36

37 Related party transactions Cash management agreement with Revue des Deux Mondes The current account had a credit balance of 0.2 million at June 30, Interest received and paid during the period was not material. Strategic advisory agreement with Fitch In April 2012, a strategic advisory agreement was signed with Fitch providing for the payment of an annual fee of $0.6 million. The amount recorded in the interim 2014 accounts for this agreement was 0.2 million. Intra-group revenue and expenses o Pôle Nord/Kwet Productions: Current account advance of 4.4 million o Trois S/Auguri: 0.5 million receivable arising in the normal course of business o Trois S/Gilbert Coullier Productions: 0.4 million receivable arising in the normal course of business o Gilbert Coullier Productions/Trois S: 0.2 million payable arising in the normal course of business o K-Wet/Spectacle & Comédie: 0.3 million payable arising in the normal course of business Intra-group revenue and expenses o North Colonnade Ltd./Fitch Group: rent totaling 2.7 million o FCBS/Fitch Group: management fees totaling 0.9 million o Fimalac/Groupe Lucien Barrière: management fees totaling 0.3 million o Trois S/Gilbert Coullier Productions: management fees totaling 0.6 million o Trois S/Auguri Productions: management fees totaling 0.1 million o K-Wet/Fimalac Spectacle & Comédie: rent totaling 0.7 million o K-Wet/Pomme Productions: management fees totaling 0.2 million o K-Wet/Gilbert Coullier Productions: miscellaneous fees totaling 0.5 million Related party agreements, loans and advances Since December 31, 2013 no new agreements have been signed and no new loans have been granted to related parties Subsequent events Private placement notes issues On July 23, 2014, Fimalac carried out two private placement notes issues for 40 million and 20 million. The notes mature on July 25, 2021 and December 20, 2019 respectively. 37

38 INTERIM MANAGEMENT REPORT FOR THE SIX MONTHS ENDED JUNE 30, 2014 A - SIGNIFICANT EVENTS OF THE PERIOD 1) Financial Services (Fitch Group) Note that the 50% interest held by Fimalac in Fitch Group is accounted for by the equity method. Recent material transactions include the acquisition by Fitch of Business Monitor International (BMI) in March 2014 for $195.5 million (including a deferred payment of $3.8 million. BMI is one of the world s leading providers of country risk, industry and financial market analysis. It produces detailed qualitative analysis and reports covering 200 countries and 24 industry verticals. Subscribers to BMI s products include multinationals, governments, financial institutions, academia, investment funds and research centers in more than 160 countries. Fitch s revenue rose 4.8% on a reported basis and 4.4% like-for-like to million ($543.7 million) in the first half of It achieved this increase from the year-earlier period despite a high basis of comparison ( million/$497.2 million in first half 2013). Fitch maintained strong margins in the first half of 2014, reporting EBITDA of million compared with million in the prior-year period, and recurring operating profit of million versus million. 2) Luxury Hotel and Leisure Activities Since March 2011, Fimalac Développement has owned a 40% interest in Groupe Lucien Barrière, which is accounted for by the equity method in Fimalac s consolidated financial statements. The Group also holds a 10% stake in Société Fermière du Casino Municipal de Cannes. The 40% share of Groupe Lucien Barrière s profit included in Fimalac s first-half profit is not representative of full-year performance, as its revenues are generally higher in the summer months, with the result that it makes a bigger contribution to second half earnings. A downward trend was nevertheless observed in first-half 2014, affecting both revenue and EBITDA, in a persistently difficult economic environment. 38