Investor Presentation • May 10, 2023
Investor Presentation
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2023.Q1 Results Presentation
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 |
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Set and integrate ESG criteria in the business plan 10th May 2023 7
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
| 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 |
In 2022 the reported aligned KPI must respect the NEW screening criteria:
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.
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
Strengthened and rebound of the business in USA, with new opportunities and focus on fiber optic sector. Participation at the Conexpo 2023 at Las Vegas.
Tesmec continue his steps toward the electrification and digitalization of its products and the energy transition.
Launch of the new 400 MCT, a new trencher that could be equipped with four different attachment
Strengthened the local presence in Middle East with Tesmec Saudi and Tesmec Peninsula, formerly as associated companies and now part of the group.
a significative backlog is strongly supporting a stable economic growth that is one of key objective of the year.
Positive trend sustained by the supply chain reinforcement and extension.
Projects with a strong innovative focus sustained by new specialized personnel on innovative development streams.
Brand identity reinforcement during the main events of the sector (Elecrama in India and Middle East Energy in Dubai).
Market consolidation with Italian DSO and TSO thanks to the reinforcement of the existing contracts, and development of new opportunities and partnerships.
Push on observability and controllability of renewable sources through our new product developments (CCI).
Participation in a main exhibition for the Italian energy sector (K.EY Energy) with focus on renewable sources.
Portfolio evolution from products to integrated solutions: digitalization and energy transition to sustain the business development in domestic and foreign markets.
Sustainable vehicles (bimodal & full electric) with zero environmental impacts
Artificial Intelligence applied to integrated diagnostic solutions for safety of rail infrastructures
Italy - Final Award of RFI Tender for the supply of 44 railway vehicles with full maintenance service. Tesmec Rail the only bidder that awarded the 2 lots for a total value of € 109 mln.
Tesmec Rail was selected from Confindustria Bari BAT to witness its development & innovation process, confirming its growing strategy.
Egypt - "Green Line" High Speed Rail: Supply of 2 units model OCPD001, part of the innovative "working train" made of 6 rail vehicles to electrify a new double railway line of 660 km.
Israel - Succesfull commissioning of the first multifunction catenary maintenance vehicle supplied to a leading company in the field of civil engineering.
| GROUP (€ mln) | 2023.Q1 | 2022.Q1 | Delta vs.22 |
|---|---|---|---|
| REVENUES (1) | 57,5 | 55,9 | +2,9% |
| EBITDA (2) | 7,0 | 8,3 | -15,0% |
| % on Revenues (2) | 12,3% | 14,8% | |
| EBIT | 1,4 | 2,9 | |
| % on Revenues | 2,5% | 5,3% | |
| Differences in Exchange (3) | (1,6) | 0,8 | |
| % on Revenues | -2,8% | 1,4% | |
| PROFIT (LOSS) BEFORE TAX | (2,5) | 2,6 | |
| % on Revenues | -4,4% | 4,6% | |
| NET INCOME/(LOSS) | (2,5) | 2,0 | |
| % on Revenues | -4,3% | 3,6% | |
| GROUP (€ mln) | Mar.31, | Dec.31, | Delta |
| 2023 | 2022 | vs.22 | |
| NFP ante IFRS 16 (4) | 117,1 | 104,3 | +12,3% |
| NFP post IFRS 16 (4) | 139,5 | 128,4 | +8,6% |
Memo: Confirmation of 2023 full-year outlook. First quarter not representative of full-year financials.
BACKLOG
REVENUE BY GEOGRAPHY 2022.Q1
ITALY: railway, trencher & energy automation impact USA&EU: trencher impact BRICS: trencher and stringing impact
REVENUE BY GEOGRAPHY 2023.Q1
10th May 2023 19
Recurring: Rental, Projects, Spare Parts, Services (maintenance, revamping & refurbishing, consulting & training), long term backlog (Automation & Rail)
Non recurring: Sales of goods
At a Group level, EBITDA seasonally affected by different mix yielding lower margins, with full-year impact from '22 inflation / increased commercial-development costs
Mar. '22
Mar. '23
| Financial Information (€ mln) | Mar. 31, 2023 | Dec. 31, 2022 |
|---|---|---|
| Net Working Capital | 88,6 | 80,6 |
| of which: inventory | 109,7 | 101,4 |
| Non Current assets | 91,2 | 89,7 |
| Right of use - IFRS 16/IAS 17 | 20,3 | 21,9 |
| Other Long Term assets/liabilities | 19,3 | 19,5 |
| Net Invested Capital | 219,4 | 211,7 |
| Net Financial Indebtness | 117,1 | 104,2 |
| Lease liability - IFRS 16/IAS 17 | 22,4 | 24,1 |
| Equity | 79,9 | 83,4 |
| Total Sources of Financing | 219,4 | 211,7 |
Net Invested Capital and Net Financial Position increasing mostly due to seasonal requirement of NWC (Inventory), vis-à-vis expected sales growth along the year
Mar. '23
Dec. '22
NWC increasing due to higher Inventories (vis-à-vis expectations of growing sales along the year).
Mar. '23 € 88,6 mln
10th May 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
| 2019pf | 2020pf | 2021 | 2022 | 2023 | ||
|---|---|---|---|---|---|---|
| TURNOVER | 199,6 M€ |
172,8 M€ |
194,3 M€ |
245,2 M€ |
>> Significant performance of the Rail segment; >> Focus on recurring revenues (rental & services) >> Growth in each business line >> Continuous price lists variation and review of the medium-long term contracts (actual context) |
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 >> Review of the price lists and the medium-long term contracts >> 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 >> 2020-2023: Cumulated Capex 70/90M€ (including 2021 variation) |
Improvement |
USA: Continue development of business opportunities in the US market, especially in fiber optic and mining industries; Saudi, Middle East and Qatar: Strengthening the local presence to provide solutions facing investments in the infrastructure sector of the area. Australia and New Zealand: developing business opportunities in the Australian market by changing business model and focusing on rental, and in the New Zealand market by continuing with current business and focusing on new opportunities in the mining sector.
Focus on developing new products and solutions to leading to a business volume increase.
Focus on the development of sustainable trenching solutions, such as the E-Sidecut and the Greenpose, to reach the zero-emission in urban works.
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.
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.
NEW INDUSTRIAL ORGANISATION
| Profit & Loss Account (Euro mln) | 2023.Q1 | 2022.Q1 | Delta vs 2022 | Delta % |
|---|---|---|---|---|
| Net Revenues | 57,5 | 55,9 | 1,6 | 2,9% |
| Raw materials costs (-) | (22,5) | (23,8) | 1,3 | -5,5% |
| Cost for services (-) | (13,2) | (9,7) | (3,5) | 35,6% |
| Personnel Costs (-) | (16,2) | (14,7) | (1,5) | 10,5% |
| Other operating revenues/costs (+/-) | (2,2) | (1,2) | (1,0) | 80,8% |
| Non recurring revenues/costs (+/-) | - | - | 0,0 | na |
| Portion of gain/(losses) from equity investments evaluated using the equity method |
0,4 | 0,0 | 0,4 | 4050,0% |
| Capitalized R&D expenses | 3,2 | 1,8 | 1,4 | 77,8% |
| Total operating costs | (50,5) | (47,6) | (2,9) | 6,0% |
| % on Net Revenues | (87,7%) | (85,2%) | ||
| EBITDA | 7,0 | 8,3 | (1,2) | -14,3% |
| % on Net Revenues | 12,3% | 14,8% | ||
| Depreciation, amortization (-) | (5,6) | (5,4) | (0,2) | 3,8% |
| EBIT | 1,4 | 2,9 | (1,4) | -47,0% |
| % on Net Revenues | 2,5% | 5,3% | ||
| Net Financial Income/Expenses (+/-) | (4,0) | (0,4) | (3,6) | 896,8% |
| Taxes (-) | (0,0) | (0,5) | 0,5 | -99,0% |
| Minorities | 0,1 | 0,0 | 0,1 | |
| Group Net Income (Loss) | (2,5) | 2,0 | (4,4) | n/a |
| % on Net Revenues | -4,3% | 3,6% |
| Balance Sheet (€ mln) |
2023.Q1 | 2022 |
|---|---|---|
| Inventory | 109,7 | 101,4 |
| Work in progress contracts | 20,0 | 25,0 |
| Accounts receivable | 56,9 | 56,2 |
| Accounts payable (-) | (79,5) | (74,2) |
| Op. working capital | 107,1 | 108,4 |
| Other current assets (liabilities) | (18,5) | (27,8) |
| Net working capital | 88,6 | 80,6 |
| Tangible assets | 51,4 | 51,8 |
| Right of use - IFRS 16/IAS 17 | 20,3 | 21,9 |
| Intangible assets | 34,0 | 32,3 |
| Financial assets | 5,8 | 5,6 |
| Fixed assets | 111,5 | 111,6 |
| Net long term assets (liabilities) | 19,3 | 19,5 |
| Net invested capital | 219,4 | 211,7 |
| Cash & near cash items (-) | (30,2) | (51,0) |
| Short term financial assets (-) | (20,6) | (17,2) |
| Lease liability - IFRS 16/IAS 17 | 22,4 | 24,1 |
| Short term borrowing | 72,1 | 80,1 |
| Medium-long term borrowing | 95,8 | 92,3 |
| Net financial position | 139,5 | 128,3 |
| Equity | 79,9 | 83,4 |
| Funds | 219,4 | 211,7 |
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