Tesmec

Investor Presentation • Aug 4, 2023

Integrated Solutions Provider

2023.H1 Results Presentation

• 1. Tesmec Group at a glance
• 1. Key Market trends & Corporate strategy
• 1. 2023.H1 Business highlights & Results
• 1. Outlook
• 1. ANNEX

0. Tesmec Group at a glance

PURPOSE

Consolidate the position as a solution provider in the reference markets driven by the trends of energy transition, digitalization, and sustainability.

Vision	Mission	Value proposition	Strategy
To be a technological in a changing partner world	To operate in the market of for the infrastructure transport of energy, data and material (oil and derivatives, gas, water).	To supply added-value integrated solutions for our customers	 Innovation  Integration  Internationalization

ENERGY AND DATA TRANSPORT

Tesmec Group at a glance

ENERGY - STRINGING

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

ENERGY - AUTOMATION

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

+135 COUNTRIES 75% EXPORT

choose Tesmec

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

TRENCHER

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

1. Key Market trends & Corporate strategy

Sustainability strategic guidelines

Give priority to sustainable innovation and meet the Technical screening criteria of the EU Taxonomy

Set and integrate ESG criteria in the business plan 4th August 2023 7

ACTIONS TO BE PERFORMED

Calculate the environmental impact of the organization and implement actions to reduce it

Commitment to this target

Follow up on the several ongoing initiatives both for employees and for stakeholders

Increase engagement in sustainability practices

Strengthen the organization's governance around sustainability challenges and opportunities

Making every department accountable to sustainability

Sustainability as key growth driver

PRIORITY TOPICS	TASKS (in progress or delivered)
Ethic and sustainable governance	 The corporate risk management activity represents a key element of the decision-making process, including also ESG aspects  Strengthen of the sustainability team in order to properly face the increasing opportunities
Green & digital solutions	 Sizing the businesses that are associated with environmentally sustainable economic activities in compliance with the European Taxonomy Regulation. Disclosure of the proportion of turnover, capital expenditures (capex) and operational expenditures (opex) that are aligned for the Taxonomy.  Priority to sustainable innovation, green and safe technologies
Climate Change and environmental protection	 Sharing with the supply chain the commitment in the field of ESG  Actions to correctly manage the use of resources, promoting the reduction of direct and indirect environmental impacts
Development of local communities and areas, enhancement and protection of people	 Several initiatives in the field of the WHP Project (Workplace Health Promotion)  Charity initiatives for local communities and non-profit organizations  Continuous training program for the development of skills and competences and professional growth of employees

TESMEC economic activities are eligible according the 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

In 2022 the reported aligned KPI must respect the NEW screening criteria:

• Make a substantial contribution to one or more of the taxonomy environmental objectives
• Fulfil the technical screening criteria for each economic activity
• Respect DNSH principle do no significant harm to the remaining taxonomy objectives
• Meet minimum social safeguards

Strong commitment to increase the share of aligned KPI with the strategic development in the coming years

2022 is the first year of application of the alignment requirement of the European Taxonomy Regulation. For this reason, the findings are based on currently available information, which may be subject to future revisions also based on the evolution of the legislation.

The share of "taxonomy-aligned" Revenues, Capex and Opex in line with the provisions of Regulation (EU) 2020/852 is out of scope of the limited assurance engagement on the Consolidated Non-Financial Statements of the engaged auditor.

Corporate & Sustainability - Key Facts 2023.H1

KEY FACTS

• Drawing the way forward: launch of the new Corporate visual identity and design of a new factory concept
• Valorization of corporate culture and local communities through "BergamoBrescia 2023" initiatives and corporate volunteering

Launch of new corporate identity: a renewed logo to best reflect the group's mission, based on technological innovation and sustainability

Valorization of corporate culture and territory values by taking part to a list of events and initiatives related to «Bergamo Brescia 2023»

Towards a new factory concept: reshaping spatial and functional organization of processes and workplaces

Launch of new corporate volunteering initiatives and projects among the Italian companies of the Group

KEY FACTS

• Closure of important deals in Saudi Arabia
• Launch of the brand new 1875 EVO and 400 MCT
• Presence at international events (Mining indaba, Conexpo, Samoter)
• Strengthening service activities through digitalization of solutions

Tesmec is strengthening its local presence in Middle East (Saudi and Peninsula). Important deals in Saudi Arabia have been closed.

Launch of the new 1875 EVO, the largest trencher designed for pipelines projects, and the new 400 MCT to serve multiple applications, from the fiber optic to the energy cables industry.

• Tesmec attended to:
• Investing in African Mining Indaba, Cape Town, February 5-8, 2023;
• Conexpo, Las Vegas, March 14-18, 2023;
• Samoter, Verona, May 3 7, 2023;

Strengthening of service activities through the continuous development of new digital solutions for the remote control and assistance of trenchers worldwide.

Energy Stringing - Key Facts 2023.H1

KEY FACTS

• Positive feedbacks from markets on new projects and full electric product range
• Investments on smart technologies oriented to improve new jobsite methodologies and aftersales services
• New design for blocks for production process simplification and harmonization between models

First successful demo presentation about the brand-new helicopter tensioner (CVR251) introduced to the key players of the French market.

Positive trend for the green portfolio in North Europe, with increasing sales results on PE models (equipped with full electric engines).

Stakeholders involved in key projects, such as a complete aftersales suite that includes many services (monitoring, predictive maintenance, etc).

Leading host of an event to set a common strategy with the Italian TSO and its main contractors for a safer innovative jobsite.

Energy Automation - Key Facts 2023.H1

KEY FACTS

• Relevant opportunities driven by new tender publications and public investments
• Positive effects on quarter results thanks to new products market penetration
• Continuous development of substation automation projects with growing chances in technological niches

Important tenders' awarding and additional opportunities thanks new tenders linked to the PNRR investments.

Successful penetration of renewables power generation market with new dedicated product (CCI) and related business model.

New technological partnerships set at international level. Business development activities abroad on strategic markets gain first positive results.

Effective participation in Cired 2023 (Rome), the international conference symposium and exhibition focused on electrical distribution.

Rail - Key Facts 2023.H1

KEY FACTS

• Growing Internationalization of the Business:
• "Green & digital" innovation to guarantee a safe, efficient and sustainable railway infrastructure:

  • Sustainable vehicles (bimodal & full electric) with zero environmental impacts

  • Artificial Intelligence applied to integrated diagnostic solutions for big data management

Italy, RFI presented the FALCO NEXT-GENERATION DIAGNOSTIC VEHICLE The digital innovation is represented by the AI applied to diagnostic vision systems to identify and validate defects on railway infrastructure for more safety of the network.

ELECTRIC TRANSITION, Collaboration with ŠKODA

GROUP - Vehicles with Škoda electrically-powered traction solutions: innovative & green offer to respond to the request generated by the investments according to the National Recovery & Resilience Plan.

Industrial and organizational strengthening of the premise in Monopoli

Tesmec Rail R&D center for the design of low and zero emissions solutions and the development of advanced diagnostic systems and integrated solutions for the management of Big Data.

Award of Tender for services for a total value of € 22,9 mln

Maintenance and engineering services, as well as use and maintenance training for Tesmec multipurpose maintenance vehicles.

SUSTAINABILITY PERFORMANCE

Tesmec Rail achieved the GOLD MEDAL from the worldwide platform EcoVadis. This "GOLD" rating reflects the commitment and the passion of Tesmec in driving a sustainable business strategy that takes care of people & environment wellness.

2. 2023.H1 Business highlights & Results

GROUP (€ mln)	2023.H1	2022.H1	Delta vs.22
REVENUES (1)	125,3	113,3	+10,6%
EBITDA (2)	15,2	18,7	-18,9%
% on Revenues (2)	12,1%	16,5%
EBIT	3,7	8,0
% on Revenues	3,0%	7,1%
Net financial charges (3)	(5,1)	(1,9)
Differences in Exchange (3)	(2,0)	5,3
PROFIT (LOSS) BEFORE TAX	(3,4)	11,4
% on Revenues	-2,7%	10,1%
NET INCOME/(LOSS)	(2,6)	7,9
% on Revenues	-2,1%	7,0%
GROUP (€ mln)	Jun.31,	Dec.31,	Delta
	2023	2022	vs.22
NFP ante IFRS 16 (4)	127,5	104,3	+22,3%
NFP post IFRS 16 (4)	150,3	128,4	+17,1%

• (1) Revenues: 10,6% increase mainly thanks to Energy segments and Rail segment
• (2) EBITDA: affected by different mix yielding lower margins, non recurring costs and the strengthening of the organizational structure needed to support the Group growth
• (3) Negative contribution from ForEx (mostly unrealized) against positive effect in 2022, with increased financial charges due to higher rates / NWC
• (4) NFP increasing by 22 €M vs. Dec.31, mostly due to higher NWC (ref. 16 €M higher inventories vis-à-vis expectations of growing sales along the year)

Memo: Confirmation of 2023 full-year outlook.

2023.H1 Closing – Business Breakdown (€ mln)

BACKLOG

REVENUE BY GEOGRAPHY 2023.H1

REVENUE BY GEOGRAPHY 2022.H1

ITALY: railway, trencher & energy automation impact USA&EU: trencher impact BRICS: trencher and stringing impact

Recurring: Rental, Projects, Spare Parts, Services (maintenance, revamping & refurbishing, consulting & training), long term backlog (Automation & Rail)

Non recurring: Sales of goods

2023.H1 EBITDA evolution by BU

€ mln

2023.H1 Financial Results

Financial Information (€ mln)	Jun. 30, 2023	Dec. 31, 2022
Net Working Capital of which: inventory	98,9 116,8	80,6 101,4
Net Fixed Assets	90,2	89,7
Right of use - IFRS 16/IAS 17	20,7	21,9
Other Long Term assets/liabilities	20,5	19,5
Net Invested Capital	230,3	211,7
Net Financial Indebtness	127,6	104,2
Lease liability - IFRS 16/IAS 17	22,8	24,1
Equity	79,9	83,4
Total Sources of Financing	230,3	211,7

Dec. '22	Net Invested Capital and Net Financial Position increasing largely due to the increase in working capital for high-growth sectors and, partially, to the level of investments in the period not fully covered by the quarterly cash-flow	Jun. '23

4th August 2023 22

2023.H1 Working Capital evolution

NWC increasing due to higher Inventories (vis-à-vis expectations of growing sales along the year).

Jun. '23 € 98,9 mln

4th August 2023 23 Note: The variations related to the items WIP, Trade Receivables and Other current ass. / liab. have to be considered jointly, due to a mere reclassification of a Rail job-order billed in Jan. '23 but still included in WIP at the end of '22

2023.H1 Net Financial Position Evolution and Free Cash Flow

€ mln

Dec. '22 Seasonally increase of Net Financial Position largely due to investment in NWC to back expected sales in H2 Jun. '23

3. Outlook

Outlook 2023

	2019pf	2020pf	2021	2022		2023
TURNOVER	199,6 M€	172,8 M€	194,3 M€	245,2 M€	>> Significant performance of the Energy segment and Middle East and USA markets; >> Focus on recurring revenues (rental & services) >> Continuous price lists variation and review of the medium-long term contracts	280 ~ 290 M€
EBITDA	30,0 M€	22,9 M€	28,1 M€	35,2 M€	>> Better mix of products & systems, premium price policy, impact of new high margin activities such as rental and hi-tech solutions >> Rationalization and standardization of the products portfolio >> Facing the price variation with alternative suppling solutions, new applications and reversing the cost to the price	45 ~ 50 M€ 16.0%~17.0%
NFP	130,0 M€	104,4 M€	121,0 M€	128,4 M€	>> Net working capital improvement and efficiency actions on inventory >> Optimization of credit management policies >> 2021-2023 Capex  ~100 M€	Improvement

OUTLOOK 2023

• Strengthening the presence in Middle East – Saudi and Peninsula
• Business development opportunities in the US market – TUSA
• Consolidate value propositions of integrated trencher solutions
• Digitalization and Electrification focus

Tesmec aims to strengthen local presence in Middle East (Saudi and Peninsula) to provide solutions facing investments in the infrastructure sector of the area

Tesmec is focusing in developing business opportunities in the US market, especially in fiber optic, expecting a significant business volume increase

Focus on consolidating the value propositions of integrated trencher solutions while developing service activities and offering support and training to locals.

Focus on the development of sustainable trenching solutions, such as the E-Sidecut and the Greenpose, and on the development of digitalization solutions, such as the new Georadar 3.0

Energy Stringing – Outlook 2023: Business Guidelines

OUTLOOK 2023

• Big backlog recovery with important orders acquisition thanks to new opportunities in renewable sector
• Refurbishment of high voltage lines in key markets
• Digital transformation
• Consolidate the worldwide presence & normalization of the supply chain

Mindset fit to the actual customers needs, designing the value chain starting from clearly identified touch points.

Significant orders acquisition with supply chain reinforcement and balanced mix between new products and equipments.

Shift to a digital approach using technologies to pursue a clear and agile relationship market oriented.

Cross collaboration between branches, with local sales network integration and a stronger service department.

Energy Automation - Outlook 2023: Business Guidelines

OUTLOOK 2023

• Consolidation of existing innovative markets and leverage on technological skills development to open new market opportunities
• Completion of solution portfolio in terms of products and systems
• Supply chain management

Market consolidation with Italian utilities, thanks to new technological and future-proof products.

Significant opportunities for smart grid solutions with business development in foreign countries.

Portfolio completion with new development for foreign countries, new product functionalities and transformer protection applications.

Medium-long term forecast planning and supply chain management: increase flexibility with a review purchasing model focused on efficiency.

Rail - Outlook 2023: Business Guidelines

OUTLOOK 2023

• Growth thanks to worldwide collaboration
• Transition to electrify products
• Modular solution
• Web platform for data management with AI algorithms

4. ANNEX

Summary 2023.H1 Profit & Loss statement - Appendix A

	Profit & Loss Account (Euro mln)	2023.H1	2022.H1	Delta vs 2022	Delta %
	Net Revenues	125,3	113,3	12,0	10,6%
	Raw materials costs (-)	(52,1)	(43,6)	(8,5)	19,5%
	Cost for services (-)	(28,3)	(22,1)	(6,2)	28,1%
	Personnel Costs (-)	(32,2)	(29,8)	(2,4)	8,1%
	Other operating revenues/costs (+/-)	(4,2)	(3,6)	(0,6)	16,7%
	Non recurring revenues/costs (+/-)	-	-	0,0	na
	Portion of gain/(losses) from equity investments evaluated using the equity method	0,7	(0,1)	0,8	-800,0%
	Capitalized R&D expenses	6,0	4,6	1,4	30,4%
	Total operating costs	(110,1)	(94,6)	(15,5)	16,4%
	% on Net Revenues	(87,9%)	(83,5%)
EBITDA		15,2	18,7	(3,4)	-18,5%
	% on Net Revenues	12,1%	16,5%
	Depreciation, amortization (-)	(11,5)	(10,7)	(0,8)	7,5%
EBIT		3,7	8,0	(4,2)	-52,5%
	% on Net Revenues	3,0%	7,1%
	Net Financial Income/Expenses (+/-)	(7,1)	3,4	(10,5)	-308,8%
Taxes (-)		0,8	(3,5)	4,3	-122,9%
	Group Net Income (Loss)	(2,6)	7,9	(10,5)	n/a
Minorities		0,4	0,0	0,4
	Group Net Income (Loss)	(3,0)	7,9	(10,9)	n/a
4th August 2023	% on Net Revenues	-2,4%	7,0%

Summary 2023.H1 Balance Sheet - Appendix B

Balance Sheet (€ mln)	2023.H1	2022
Inventory	116,8	101,4
Work in progress contracts	25,4	25,0
Accounts receivable	51,0	56,2
Accounts payable (-)	(77,6)	(74,2)
Op. working capital	115,6	108,4
Other current assets (liabilities)	(16,7)	(27,8)
Net working capital	98,9	80,6
Tangible assets	48,6	51,8
Right of use - IFRS 16/IAS 17	20,7	21,9
Intangible assets	35,3	32,3
Financial assets	6,2	5,6
Fixed assets	110,8	111,6
Net long term assets (liabilities)	20,6	19,5
Net invested capital	230,3	211,7
Cash & near cash items (-)	(25,6)	(51,0)
Short term financial assets (-)	(31,4)	(17,2)
Lease liability - IFRS 16/IAS 17	22,8	24,1
Short term borrowing	91,8	80,1
Medium-long term borrowing	92,8	92,3
Net financial position	150,4	128,3
Equity	79,9	83,4
Funds	230,3	211,7

Disclaimer

This presentation has been prepared by Tesmec S.p.A. ("Tesmec", the "Company" or the "Group"). As used herein, "Presentation" means this document, any oral presentation, the question and answer session and any written or oral material discussed or distributed during the presentation. The Presentation comprises written material/slides which provide information on the Company and its subsidiaries. The information contained in this Presentation has not been verified, approved or endorsed by or independently verified by any independent third party. Save where otherwise indicated, the Company is the source of the content of this Presentation. Care has been taken to ensure that the facts stated in this Presentation are accurate and that the opinions expressed are fair and reasonable. However, no representation or warranty, express or implied, is made or given by or on behalf of the Company, or the management or employees or advisors of the Company, or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this document or any other material discussed at the Presentation. None of the Company nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith.

This Presentation is not intended for potential investors and do not constitute, or form part of, any offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of, or any solicitation of any offer to underwrite, subscribe for or otherwise acquire or dispose of, any debt or other securities of the Company ("Securities") and is not intended to provide the basis for any credit or any other third party evaluation of Securities nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment whatsoever. If any such offer or invitation is made, it will be done so pursuant to separate and distinct documentation in the form of a prospectus, or a translation of the prospectus into English language (a "Prospectus") and any decision to purchase or subscribe for any Securities pursuant to such offer or invitation should be made solely on the basis of such Prospectus and not this Presentation.

This Presentation may contain projections and forward looking statements which are based on current expectations and projections about future events, based on numerous assumptions regarding the Company's and the Company's subsidiaries' present and future business strategies and the environment in which the Company will operate in the future. Any such forward looking statements involve known and unknown risks, uncertainties and other factors which are in some cases beyond the Company's control and which may cause the Company and the Company's subsidiaries actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Further, any forward-looking statements will be based upon assumptions of future events which may not prove to be accurate. Any such forward-looking statements in this Presentation will speak only as at the date of this Presentation and no one undertakes any obligation to update or revise any such forward-looking statements, whether in the light of new information, future events or otherwise. Given the aforementioned risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise. The information and opinions contained in this Presentation are provided as at the date of this presentation and are subject to change without notice.

This Presentation is not an offer of Securities for sale in the United States or any other jurisdiction. Neither this Presentation nor any part or copy of it may be taken or transmitted into the United States or distributed, directly or indirectly, in the United States as that term is defined in the U.S. Securities Act of 1933, as amended (the "Securities Act"). Neither this Presentation nor any part or copy of it may be taken or transmitted into Australia, Canada or Japan, or distributed directly or indirectly in Canada or distributed or redistributed in Japan or to any resident thereof. Any failure to comply with this restriction may constitute a violation of U.S., Australian, Canadian or Japanese securities laws. The distribution of this Presentation in other jurisdictions may be restricted by law and persons into whose possession this Presentation comes should inform themselves about, and observe, any such restrictions. The Company's Securities have not been and will not be registered under the Securities Act and may not be offered or sold in the United States except pursuant to an exemption from, or transaction not subject to, the registration requirements of the Securities Act.

By attending or receiving this Presentation you agree to be bound by the foregoing limitations and represent that you are a person who is permitted to receive information of the kind contained in this Presentation. Furthermore, by attending or receiving this Presentation you represent being aware of all requirements and limitations provided by applicable securities laws and regulations regarding the distribution and dissemination of information or investment recommendations and you undertake not to breach any of such provisions. None of the Company, or any of their respective affiliates, members, directors, officers, employees or advisors nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection therewith.

www.tesmec.com