Tesmec

Investor Presentation • May 10, 2024

1

2024.Q1 Results

Grassobbio, May 10th 2024

2024.Q1 RESULTS INDEX

01 Tesmec Group at a glance

• 02 Opening remarks
• 03 2024.Q1 Group Financials & Key Metrics
• 04 2024 Outlook
• 05 Annex

70

TESMEC GROUP: INTEGRATED SOLUTIONS PROVIDER FOR ENERGY AND DATA TRANSPORT

Technology partner in markets driven by energy transition, digitalisation and sustainability trends

Operating in the energy, data and material transport infrastructure market (oil and derivatives, gas, water) with innovative, value-added integrated solutions on a global scale

+1,000

75%

EXPORT

9

2024.Q1 Results

TESMEC GROUP Energy: the inspiring thread of our businesses

2024.Q1 Results

ENERGY - STRINGING

▪Solutions for power lines construction & maintenance ▪Advanced methodologies for automating jobsite ▪Zero emissions machines

RAILWAY

▪Catenary lines construction & maintenance ▪Diagnostic vehicles and systems ▪Integrated platform for safe infrastructure

ENERGY - AUTOMATION

• ▪Telecommunications solutions for HV Grids
• ▪Grid Management: protection and metering solutions
• ▪Advanced sensors for fault passage indication, protection and monitoring

TRENCHER

▪Telecom networks, FTTH & long distance, power cable installation ▪Oil & Gas, Water pipelines ▪Bulk excavation, Quarries & Surfaces mining

TESMEC GROUP'S SUSTAINABILITY PATH

MARKET DRIVERS MILESTONES FOCUS ON GUIDELINES ESG COMMITMENT SDGs R&D & Innovation Technologies & products Increase Green & Digital revenues ▪ EU Taxonomy alignment DIGITALIZATION & SAFETY Climate change mitigation Corporate processes Reduce emissions & environment al impact ▪ Environmental impact of products & services ▪ Environmental impact of corporate processes SUSTAINABLE INNOVATION Human resources & local communities Employees & Stakeholders Invest in people & local communitie s well being ▪ Health & Safety ▪ Welfare ▪ Training ENERGY TRANSITION Governance Corporate Governance Work out an effective sustainable governance ▪ Business ethics ▪ Human rights ▪ Sustainable supply chain ▪ ESG risks 51,7% 48,2% 36,2% 43,6% 30,3% 34,1% REVENUE CAPEX OPEX EU Taxonomy-aligned KPI % 2023 2022 TESMEC economic activities are eligible according to ANNEX I – Climate change mitigation «3.Manufacturing» 3.1 - Manufacture of renewable energy technologies 3.3 - Manufacture of low carbon technologies for transport 3.6 - Manufacture of other low carbon technologies

2024.Q1 ESG HIGHLIGHTS

ENVIRONMENT

ISO 14067:2018 - Carbon Footprint for TESMEC trenchers

Tesmec commissioned a study from a specialized consultant to gain knowledge and awareness of the environmental impact associated with greenhouse gas emissions for 3 further trencher models

RENEWABLE ENERGIES

Tesmec SPA - Photovoltaic plant

The enlarged photovoltaic plant at the Tesmec SPA headquarter will grant a reduction of around 750 – 800 tons of CO2 per year(*).

(*) estimates of the Energy Manager

SOCIAL

WHP Program

Tesmec confirms its commitment to promote a safe and healthy working environment participating in the Workplace Health Promotion program

2024.Q1 RESULTS INDEX

01 Tesmec Group at a glance

02	Opening remarks
03	2024.Q1 Group Financials & Key Metrics

• 04 2024 Outlook
• 05 Annex

2024.Q1 AT A GLANCE

2024.Q1 Results

SALES BY BU Trencher Rail Energy €M 17,6 €M 7,5 €M 34,2 59,3 €M

SALES BY REGION

SALES

€M 59,3 PY/Q€M 57,5

EBITDA

€M 9,0; 15,2% PY/Q €M 7,5; 13%

EBIT

€M 3,1 PY/Q €M 1,9

NET RESULT

€M (1,1) PY/Q €M (2,5)

NFP

€M 167,1 Dec. 31, 2023 €M 153,5

BACKLOG

€M 391 Dec. 31, 2023 €M 402

2024.Q1 HIGHLIGHTS

WHAT WORKED WELL

Volumes' growth in line with expectations and sales mix favorable to margin improvement

Strengthened new governance in USA and Australia, combined with reinforced business development and integration plans

Positive results from Middle East and Africa in Trenchers' segment, confirming Group's internalization strategy. Presence in relevant mining and fiber markets events in Saudi Arabia, Africa and Europe

Positive contribution from Energy segment with significant growth in Energy Automation business, with successful deliveries of automation systems

Improved marginality, still not reflecting full potential, with operating expenses containment efforts started, with full benefits expected from Q2'24

Efficiency interventions consistent with industrial footprint re-design, with concentration of Stringing manufacturing activities in "Grande Grassobbio" site

Strategic engagement of key Rail European railway players and live demo of green solutions for catenary and diagnostic solutions

WHAT COULD HAVE

WORKED BETTER

Net Result impacted by higher financial charges due to increased rates/level of debt

Net Financial Position increasing mainly due to Net Working Capital for increased level of receiveables related to endquarter sales, with still high inventory levels and WIP to support short-term sales, with the objective of a gradual and important reduction by year-end

Rail: delayed cash-in from key Italian account and delayed new job-orders

2024.Q1 RESULTS INDEX

• 01 Tesmec Group at a glance
• 02 Opening remarks
• 03 04 2024.Q1 Group Financials & Key Metrics 2024 Outlook
• 05 Annex

2024.Q1 GROUP RESULTS

2024.Q1 Results

(€ mln)

Income Statement	2024.Q1	2023.Q1	Δ vs.2023
REVENUES (1)	59,3	57,5	+3,2%
EBITDA (2)	9,0	7,5	+20,5%
% on Revenues (2)	15,2%	13,0%
EBIT	3,1	1,9	+62,1%
% on Revenues	5,2%	3,3%
Net financial charges (3)	(4,3)	(2,9)
Differences in Exchange (3)	0,2	(1,6)
PROFIT (LOSS) BEFORE TAX	(1,1)	(2,5)
% on Revenues	-1,8%	-4,4%
NET INCOME/(LOSS)	(1,1)	(2,5)
% on Revenues	-1,9%	-4,3%

	Mar. 31, 2024	Dec. 31, 2023	Δ vs.2023
NFP ante IFRS 16 (4)	120,9	114,3	6,6
Memo: NWC	91,9	86,8	5,1
NFP post IFRS 16 (4)	167,1	153,5	13,6

RESULTS' COMMENTARY

(1) Revenues: +3,2% mostly driven by Energy (for both Energy-Automation and Energy-Stringing segments) and, to a lower extent, Trencher, more than offsetting lower revenues from Rail

(2) EBITDA: +20,5% thanks to an improved mix

(3) Increased financial charges, due to higher interest rates/level of invested capital

(4) NFP excluding IFRS16 increasing by 6,6€M vs. Dec.2023, susbstaintally corresponding to NWC variation (4) NFP after IFRS16 growing by 13,6€M vs. Dec. 2023 due to addon of IFRS16's renting for Grassobbio's site and fleet's leasing operations

Financial Information	Mar. 31, 2024	Dec. 31, 2023
Net Working Capital	91,9	86,8
of which: inventory Fixed Assets	112,1 127,3	110,6 119,6
Other Long Term assets/liabilities	26,5	25,3
Net Invested Capital	245,7	231,7
Net Financial Indebtness	120,9	114,3
Lease liability - IFRS 16/IAS 17	46,2	39,2
Equity	78,6	78,2
Total Sources of Financing	245,7	231,7

RESULTS' COMMENTARY

• Net Working Capital increase due to higher level of trade receivables related to end-quarter sales, and still high levels of inventory and WIP (to support short term sales expectations). Important inventory reduction forecasted by year-end
• NWC increase leading to higher Net Financial Indebtedness (excl. IFRS16)
• Lease liabilities (IFRS16) increase mainly due to the add-on of Grassobbio's site, consistent with the Group strategy of Stringing operations' concentration, and leasing operations on a portion of Trenchers fleet

TRENCHERS: 2024.Q1 FACTS & FIGURES

(€ mln)

• REVENUES AT 34,2€M, +2,2% mainly driven by growth in ME and Africa, more than offsetting slowdown in France and USA
• EBITDA AT 4,7€M, +40,2% thanks to an improved sales mix yielding higher marginality, as well as margins normalization in Oceania

• BACKLOG AT 71€M

KEY FACTS

• Business development and strengthening of activities in Australia and Middle East
• Implementation of a US market development and integration plan to enhance business and management
• Developing France as the reference market for the megatrend like energy, biogas and underground cables
• Product development: launch of the new eSC4C, the full electric micro trencher based on the Sidecut modular platform
• Participation on important events:
  • Mineral Forum – Saudi Arabia
  • Mining Indaba – South Africa
  • FTTH – Berlin
  • Intermat – Paris

TRENCHERS: 2024.Q1 FACTS & FIGURES

Intermat 2024 - Paris

Elelectric range

Australia-Telecom

KEY FACTS

• Cloud-based diagnostic platform: completed the development of sending relevant and non-relevant defects from the train to the remote platform based on Microsoft Azure Cloud Architecture
• Increased accuracy and validity of data: successfully metrological test campaigns of the diagnostic systems installed on the vehicle OCPD001
• Live demo of green solutions for catenary installation with the full electric model APLA100-e and for the diagnostic of the railway network thanks to the hybrid solution OCPD002-e
• Strategic engagement of key European railway players for future catenary installation and maintenance projects with a strong focus on sustainable solutions and safety

• REVENUES AT 7,5€M, -25,5% due to the progressive completion of older job-orders, while new orders to be started during the year
• EBITDA AT 1,4€M, -28,1%, reflecting lower volumes, with sales profitability substantially in line with 2023
• BACKLOG AT 203€M

(€ mln)

30

Snapshots during live demos of the full electric vehicle

Snapshots during live demos of the full electric vehicle

Diagnostic platform on cloud to increase the reliability of the data: more SAFETY

ENERGY: 2024.Q1 FACTS & FIGURES

(€ mln)

• REVENUES AT 17,6€M, +26,3% thanks to both Stringing and Automation segments, within solid perspectives of industry midterm growth potential
• EBITDA AT 2,9€M, +34,1% thanks to improved mix and operating leverage effect
• BACKLOG AT 117€M, of which Automation 97€M

KEY FACTS

Stringing

• Continuous monitoring of the Australian and North American markets to conclude open sales opportunities and enhance relationships with local stakeholders
• Diversify the customer portfolio and expedite the finalization of open opportunities
• Focus on tools development strategy in order to better leverage the product mix

Automation

• First deliveries of automation systems with successful factory acceptance tests by the customer
• Participation in new tenders and new opportunities both in Italy and in new foreign markets
• Ongoing negotiations and discussions are focused on enhancing supplies as outlined in active contracts

ENERGY: 2024.Q1 FACTS & FIGURES

STRINGING

New CLP (Continuos Linear Puller) for the Australian market

Test and training in US of the new PES500

Technical forum for specialists who use online DGA systems

AUTOMATION

First ASAT system installation

2024.Q1 BACKLOG

• Long- term backlog in Automation and Rail
• Energy backlog including Automation's (97€M) and Stringing's (20€M)

2024.Q1 REVENUES BY GEOGRAPHY

Europe; 28% Italy; 19% North & Central America; 16% BRIC & Others; 13% Middle East; 14% Africa; 9% 2024.Q1: 59,3 €M

2023.Q1 2024.Q1

• ITALY: Railway negative impact, partially offset by Automation positive impact

• USA: Trencher negative impact
• EU: Rail and Energy positive impact
• BRICS&OTHER: Trencher negative impact

2024.Q1 "RECURRING" VS "NON-RECURRING" REVENUES

• Recurring: Rental, Projects, Spare Parts, Services (maintenance, revamping & refurbishing, consulting & training), long term backlog (Automation & Rail)
• Non recurring: Sales of goods

2024.Q1 EBITDA EVOLUTION BY BU

(€ mln)

2024.Q1 Results

2024.Q1 NET FINANCIAL POSITION EVOLUTION AND FREE CASH FLOW

(€ mln)

2024.Q1 NET WORKING CAPITAL EVOLUTION

€ mln	Mar. 31, 2024	Dec. 31, 2023
Inventories	112,1	110,6
Work in progress contracts	26,6	29,2
Trade Receivables	65,3	45,6
Trade Payables	(91,0)	(82,8)
Other Current Assets/(Liabilities)	(21,1)	(15,8)
Net Working Capital	91,9	86,8

Still high level of inventory to support short-term sales expectations and WIP, with increased quarterly trade receivables.

Confirmation of expectation/objective of important inventory reduction by year-end.

2024.Q1 RESULTS INDEX

• 01 Tesmec Group at a glance
• 02 Opening remarks
• 03 2024.Q1 Group Financials & Key Metrics

04 2024 Outlook

05 Annex

2020-2023 EQUITY STORY and 2024 OUTLOOK

2024.Q1 Results

• Strong reduction of net working capital driven by stock consumption/efficiency

Improvement vs 2023 by 2024 end

TRENCHER: 2024 BUSINESS GUIDELINES

• Strategically introduce the business to the used machinery market

Tesmec is dedicated to improving the worldwide used machinery business, channeling efforts toward these sales to create profitable margins.

• Development of a new modular platform for optic fiber machines

The platform will be showcased in two distinct configurations: electrical and endothermic engine options.

• Consolidate the business in Europe through FTTH participation

Tesmec is actively enhancing its footprint in the European market, specifically in the fiber optic and energy sectors, by actively participating in events such as FTTH

• Strengthening Tesmec USA

Tesmec is committed to bolstering its presence in the USA by restructuring the team and placing a strategic emphasis on sales and rental services to enhance profit margins.

ENERGY - STRINGING: 2024 BUSINESS GUIDELINES

2024.Q1 Results

• Implementing a new sales strategy that begins by targeting premium countries, while leveraging strong relationships with utilities to enhance our market position

With the current structure, enhancing Transmission OH and UG projects, improving equipment efficiency, and implementing digital services.

• Robust innovation, including IoT machine interconnection and efficient data value management

Prioritize robotized equipment, machinery-tool interconnection, and comprehensive data analysis via our Remote Digital Suite.

• New methodology to effectively manage products

development while improving efficiency

Design to Value implementation, with a focus on equipment, alongside a new business model centered around service and data management

Focus on cost reduction and effective industrialization, introducing new digital machines, and furthering our green range expansion.

ENERGY - AUTOMATION: 2024 BUSINESS GUIDELINES

• Integrated market approach combining preservation of consolidated channels with development of new strategic partnerships abroad

Current business optimization in the domestic market and penetration of new segments thanks to strategic new partnerships

Successful growth strategy in the substation automation market with consequent increase of market share.

• Development of products and systems, in combination with new challenges in virtualization

Existent portfolio management, combined with product range completion and customizations, while approaching the virtualization trend.

• Expansion of production plants

Strategic investments to increase production plants efficiency, in order to accelerate business growth.

• Growing Internationalization

• Meetings with Key European Railway Authorities (1H2024)
• Go to market: sales network acceleration with live demos<<
• Attendance in key rail infrastructures projects with international leaders:
  • working methodology for line renewal keeping passengers' traffic open
  • railway line construction for
  • strategic infrastructure projects
• ITALY: significant investments for sustainable development of rail infrastructure and mobility

Exhibitor at InnoTrans, the leading international trade fair of the rail segment

• Venue: Berlin
• Date: September 23-27

Continous boost communication with specific focus on enhancing the global brand image → focus on green solutions and diagnostic solutions

• Efficient industrial organization

• Reorganization of the manufacturing process
• Maintenance activities for the working fleet supplied to RFI in a certified specialized structure to increase the maintenance business
• Focus on Diagnostic

▪ Go to market: demos of the Intelligent data management diagnostic web platform, based on Microsoft Azure Cloud, installed on our diagnostic vehicle laboratory.

2024.Q1 RESULTS INDEX

• 01 Tesmec Group at a glance
• 02 Opening remarks
• 03 2024.Q1 Group Financials & Key Metrics
• 04 2024 Outlook

APPENDIX A: 2024.Q1 SUMMARY PROFIT & LOSS STATEMENT

PROFIT & LOSS (€ Mln)	2024.Q1	2023.Q1	Delta vs 2023	Delta %
Net Revenues	59,3	57,5	1,8	3,2%
Raw materials costs (-)	(25,6)	(22,5)	(3,1)	13,7%
Cost for services (-)	(11,0)	(12,7)	1,7	-13,1%
Personnel Costs (-)	(15,4)	(16,2)	0,8	-5,0%
Other operating revenues/costs (+/-)	(1,7)	(2,2)	0,4	-20,4%
Non recurring revenues/costs (+/-)	-	-	-	n.a.
Portion of gain/(losses) from equity investments evaluated using the equity method	(0,0)	0,5	(0,5)	-101,5%
Capitalized R&D expenses	3,5	3,2	0,3	10,7%
Total operating costs	(50,3)	(50,0)	(0,3)	0,6%
% on Net Revenues	(0,8)	(0,9)
EBITDA	9,0	7,5	1,5	20,5%
% on Net Revenues	0,2	0,1
Depreciation, amortization (-)	(6,0)	(5,6)	(0,4)	6,4%
EBIT	3,1	1,9	1,2	62,1%
% on Net Revenues	0,1	0,0
Net Financial Income/Expenses (+/-)	(4,1)	(4,4)	0,3	n/a
Taxes (-)	(0,0)	(0,0)	(0,0)	n/a
Group Net Income (Loss)	(1,1)	(2,5)	1,4	n/a
Minorities	0,0	0,0	0,0
Group Net Income (Loss)	(1,1)	(2,5)	1,3	n/a
% on Net Revenues	-1,9%	-4,3%

APPENDIX B: SUMMARY 2024.Q1 BALANCE SHEET

BALANCE SHEET (€ Mln)	Mar. 31, 2024	Dec. 31, 2023
Inventory	112,1	110,6
Work in progress contracts	26,6	29,2
Accounts receivable	65,3	45,6
Accounts payable (-)	(91,0)	(82,8)
Op. working capital	113,1	102,7
Other current assets (liabilities)	(21,1)	(15,8)
Net working capital	91,9	86,8
Tangible assets	43,9	45,1
Right of use - IFRS 16/IAS 17	35,4	28,9
Intangible assets	41,4	39,3
Financial assets	6,6	6,3
Fixed assets	127,3	119,6
Net long term assets (liabilities)	26,5	25,3
NET INVESTED CAPITAL	245,7	231,7
Cash & near cash items (-)	(26,7)	(53,7)
Short term financial assets (-)	(30,5)	(26,8)
Lease liability - IFRS 16/IAS 17	46,2	39,2
Short term borrowing	95,2	102,7
Medium-long term borrowing	82,8	92,0
Net financial position	167,1	153,5
Equity	78,6	78,2
FUNDS	245,7	231,7

2024 TESMEC GROUP CONFERENCE CALL SCHEDULE

Approval of the Company's Half-Year Report as of 30th June 2024

Results presentation: Tuesday, 6 August 2024

Time and details will be confirmed prior to the conference call

Contacts:

2024.Q1 Results

ir@tesmec.com https://investor.tesmec.com/en

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