Tesmec

Investor Presentation • May 21, 2020

• Stringing
• Energy Automation
• Railway
• Trencher

Integrated Solutions Provider

2020.Q1 Results Presentation

www.tesmec.com

Strategic overview >

• 2020.Q1 Business highlights and Results >
• Outlook 2020-2021 >

Strategic overview

TESMEC Group strategic market segments

• ENERGY
• TELECOM
• INFRASTRUCTURES

Post COVID-19 approach

Further focus on development guidelines:

• CONNECTIVITY IS A MUST (5G opportunities, digitalization)
• xxx ▪ SAFETY-FIRST (Diagnostic, Artificial Intelligence, Cybersec)
• ENVIRONMENTAL IMPACT (Energy transition)

Focus on key geographic areas: USA, China and New developed Countries

st 1 PHASE xxx Health emergency	Different impacts on the several businesses and key countries of the Group Stop of the production activities in Europe No impacts in the Tesmec markets/sector but delays due to the production and logistic lock down
nd 2 PHASE xxx Reopening	Essential services granted in smart working modality Reopening of production activities The gears of the reopening will be impacted by the Government Rules.
rd 3 PHASE xxx Recovery & growth	Recovery and growth thanks to new business opportunities and relevance of Tesmec key drivers: safety, connectivity and sustainability
Summary Management xxx Actions	▪ Efficiency and flexibility actions adopted ▪ Actions to maintain employment levels ▪ Investments in key infrastructure sectors

COVID-19 outbreak as a global emergency - Extraordinary measures to fight the pandemic

Slowdown, block	- Slowdown activities from end of February and block of the deliveries - Grassobbio, Endine, Sirone, Fidenza and Padova: stop from 23 March to 4 May
& lockdown of production	Patrica and Monopoli: stop from 23 March to 12 April
activities	Durtal (France): stop from 17 March to 20 April
	- no stops in Alvarado plant (USA)
	- adoption of all the safety and health protocols required in full compliance with the Italian Health Ministry instructions
Safety and health measures	new procedures to enter the corporate facilities (temperature measurement)
	- push on smart working
	increase of spaces in the workplace, measures to avoid occasions of assembly of large groups, DPI and protective barriers
	strong cleaning and sanitizing cycles of the premises
	- business travel restrictions
	- specific insurance coverage for employees
Social and welfare initiatives	"Solidal Hours Bank" and "Tesmec Family Solidarity Fund"
	"Abitare la cura – Coronavirus " fund raising
	- internal communications and periodically updates to Group employees and collaborators

TESMEC target: highest level of safety & business continuity

• Strategic overview >
• 2020.Q1 Business highlights and Results >
• Outlook 2020-2021 >

Jobsite in Michigan City (Indiana) with great results.

Strong promotion of full electric machine in US Demo tests & first jobsite in US

CLP first jobsite Development of double range

Development of double range of machines: digital and hydraulic

Campaign dedicated to full electric Strong marketing activities to introduce new maintenance methodology

Awarded tenders for protection and control solutions to properly secure the electrical grid

Enel Market: new opportunities Russia: customer-driven approach

Continuous support on installed base and evaluation of new business models

Italian Market: Continuously growing supplies in the Distribution and Transmission markets

Integrated solutions for Substation Automation

Rental Business

Surface Mining Business

4SERVICE acquisition New markets development especially in Africa

EVO series developments

First 975EVO RH delivered to Australia

5G & Fiber Optics

New project, started to catch post-covid opportunities (focus on USA and EUROPE)

All certified vehicles in convoy running on active line thanks to the technological safety system on board.

Lituania (East Europe market): diagnostic vehicle with diagnostic systems

Tesmec know-how & experience for the diagnostic of railway infrastructure is focused also abroad.

Safety and Reliability Czech Republic: delivery of the 1st unit

High technological level reached by our railway systems and quality of Tesmec know-how.

Tesmec rail is running

Tesmec full maintenance service at full capacity to provide safety and operative continuity.

GROUP (€ mln)	2020.Q1* proforma	2020.Q1	2019.Q1	Delta vs. Proforma%
REVENUES (1)	34,0	31,8	49,8	-31,8%
EBITDA (2) (3)	4,1	2,5	5,7	-28,6%
% on Revenues	12,2%	7,8%	11,5%
EBIT	2,9	(1,7)	1,5
% on Revenues	8,5%	-5,4%	3,1%
Differences in Exchange (4)	(1,4)	(1,4)	0,7
% on Revenues	-4,1%	-4,4%	1,4%
PROFIT (LOSS) BEFORE TAX	(3,9)	(4,1)	1,0
% on Revenues	-11,3%	-12,9%	2,1%
NET INCOME/(LOSS)	(2,8)	(3,0)	1,0
% on Revenues	-8,2%	-9,4%	2,0%
GROUP (€ mln)	2020.Q1* proforma	2020.Q1	2019	Delta vs. Proforma%
NFP ante IFRS 16	104,8	105,0	99,8	-5,0%
NFP post IFRS 16	125,5	121,6	118,0
Shareholders Loan	10,0	2,2

• (1) Affected by the slowdown in production and commercial activities due to the COVID-19 health emergency and by the blocks of the transportation of goods. The Group has maintained its backlog.
• (2) EBITDA has been impacted by the spread of Covid-19 which caused the reduction in turnover and the consequent contraction of margins to cover fixed costs.
• (3) Starting from the month of March, the Group undertook all the necessary actions in order to contain its fixed costs, the improvement effects will be seen starting from the second quarter.
• (4) The exchange differences are negative, mainly for the depreciation of the Australian dollar over 10% compared to its values as at 31 December 2019

*These proforma data do not purport to be consolidated accounts of the rental business into the Tesmec Group, which instead will be integrated from the acquisition date, and the correct integration will be elaborated during the second quarter and shown in the half-year report of the Group

2020.Q1 Closing

1 6 2
1

ENERGY	2020.Q1	2019.Q1	Delta %
Revenues	7,4	10,3	-28,3%
EBITDA	0,7	1,2	-44,5%
% on Revenues	9,3%	12,1%

The decrease related to the Stringing business is due to the production and logistic blocks in March

The slowdown in production activities in the quarter impacted the Energy Automation

The confirmed order backlog amounted to Euro 38,0 million

TRENCHERS	2020.Q1	2019.Q1	Delta %
Revenues proforma	19,0	31,0	-38,6%
EBITDA proforma	2,3	3,1	-25,5%
% on Revenues	12,1%	10,0%

The performance has been affected, since the last days of February, by the slowdown in logistics activities and subsequently by the blocks of the production and the rental activities carried out by the French subsidiary Marais.

The confirmed order backlog was Euro 60,9 million as at 31 March 2020.

RAILWAY	2020.Q1	2019.Q1	Delta %
Revenues	7,5	8,5	-11,4%
EBITDA	1,1	1,4	-23,7%
% on Revenues	14,2%	16,5%

The decrease is mainly due to the gradual slowdown in operations and to the closing of the Monopoli plant in March.

The confirmed order backlog was Euro 82,8 million

Tesmec Group – Key financials Description

	Tesmec Group 2020.Q1	Tesmec Group Aggregated 2020.Q1
Sales	31,8	34,0
Operating Costs	(29,4)	(29,8)
EBITDA	2,5	4,1
EBITDA %	7,8%	12,2%
Net Working Capital	74,6	76,4
Fixed assets	87,6	106,8
Net long-term liabilities	4,9	5,2
Net Invested Capital	167,1	188,4
NFP	121,6	125,5
Shareholder Loan	2,2	10,0
Equity	43,3	52,9*
Funds	167,1	188,4

*included the negotiated price for the acquisition of 4Service of 9,4 M€

• ➢ The consolidation runner derives from the aggregation of 4Service (sale and rental business) and Tesmec Group, taking into consideration intercompany elisions
• ➢ The combined entity Rental division will have a positive effect on Tesmec Group's Aggregated EBITDA.
• ➢ With reference to the NFP, it would be increased for financial debts from usage rights, linked to the 4Service financial leasing contracts
• ➢ These proforma data do not purport to be consolidated accounts of the rental business into the Tesmec Group, which instead will be integrated from the acquisition date, and the correct integration will be elaborated during the second quarter and shown in the halfyear report of the Group

BACKLOG

2020.Q1 Differences in Exchange

Euro mln

DIFFERENCES IN EXCHANGE

GROUP (Euro mln)	2018.Q1	2019.Q1	2020.Q1
Differences in Exchange	(0,7)	0,7	(1,4)
of which:
Realised	(0,1)	0,1	(0,2)
Unrealised	(0,6)	0,6	(1,2)
Differences in Exchange for currency:
USD	(0,5)	0,2	0,5
AUD	(0,1)	0,1	(1,1)
OTHER	(0,1)	0,4	(0,8)
Total	(0,7)	0,7	(1,4)

2020.Q1 EBITDA

€ mln

Financial Information (€ mln)	2020.Q1	2019
Net Working Capital	74,6	73,0
Non Current assets	68,2	66,8
Right of use - IFRS 16/IAS 17	19,4	20,1
Other Long Term assets/liabilities	4,9	4,2
Net Invested Capital	167,1	164,2
Net Financial Indebtness	105,0	98,5
Lease liability - IFRS 16/IAS 17	18,8	19,5
Equity	43,3	46,2

Working Capital evolution

(23,9) (23,6) -50 -42 Other Current Assets/(Liabilities)

Net Working Capital 74,6 73,0

€ 60,8 mln 2019 € 73,0 mln Increased of inventories due to the blocks of the transportation of goods linked to the Covid-19

2020.Q1 € 74,6 mln

* Impacted by IFRS 16

OPERATING NET FINANCIAL POSITION

* From 1 st January 2019, the new IFRS 16 has been introduced, the impact is term of NFP is around 18,8 M€, otherwise the NFP would have been around 105,0 M€

• Strategic overview >
• 2020.Q1 Business highlights and Results >
• Outlook 2020-2021 >

Outlook 2020-2021

xxx FOCUS ON STRATEGIC MARKETS

TESMEC is focused in strategic market segments:

• SMART GRIDS & ENERGY TRANSITION
• 5G AND TELECOM
• INFRASTRUCTURES & RAILWAYS

xxx DEVELOPMENT DRIVERS

• ENERGY: increasing needs of "smart and digital" systems, focus on energy transition and carbon free solutions
• RAIL: push on maintenance and diagnostic of the railway network, new green motorization and high safety standard
• TRENCHERS: investment plan for modern infrastructures, global demand of connectivity that requires underground fiber optic networks

xxx ACTION PLAN

• Rationalization of costs structure and improvement of margins
• Take advantage of the liquidity measures announced by the governments
• Reinforcement of the management structure in strategic positions to face the new challenges

Tesmec KPI

Main KPI

Turnover	1Q and 2Q will be affected by the spread of COVID-19 worldwide with a Turnover reduction compared last year 3Q and 4Q will recover The yearend turnover will be less than 2019, due to the 2 months of substantial lockdown	▪ Focus on growing and hi-tech market segments ▪ Turnover will be linked to the key sectors: 5G opportunities, digitalization; Diagnostic, Artificial Intelligence, Cybersecurity & Energy transition ▪ Increase of the backlog ▪ Rental Business Growth
EBITDA	Cost saving actions The margin should improve in percentage thanks to the rental activity	▪ Rationalization of costs structure and improvement of margins ▪ Reinforcement of the management structure in strategic positions to face the new challenges ▪ Operating grants from the local governments

April-May June-August Sept-Nov 1) Share capital increase ✓ In the interest of all shareholders: minorities and main shareholders ✓ Better balance between Equity and Financial Debts ✓ Supporting the future development 2) Reinforcement of the management structure 1) Shareholder loan 2) Acquisition of the Rental Business acquisition 3) Liquidity measures 4) Operating Grants 5) Starting cost reduction activities 6) Reopen/reload phase 7) Confirmed Backlog 1) Loan guaranteed by SACE ✓ investments ✓ supply chain ✓ salaries ✓ BY SACE 2) Guidelines of the Business Plan will be released before August 3) Follow-up of the cost reduction activities 4) Orders Acquisition: Railways, Energy Automation & FTTH/5G

New Digging Projects

Middle East, Egypt

5G & Fiber Optics market development

Cleanfast in USA Demos and development

Wind Farm (Australia) Automatic cables laying system

Renewable Projects Digital & Connected systems

New features, trencher remote control Available for all TrenchTronic equipped machines

Development of a strategic collaboration with one leader in transmission sector fully owned by SGCC to obtain a better local positioning and in all APAC region.

Introduction of the new green technology in EU & US market

New cooperation in China Growth in North America markets

Expected strong business growth driven by strategic reorganization of sales network and technological products with strong focus on safety, digital & green

Green development CLP promotion in EU & US

Organization of demo jobsite with the new technology in US & North Europe

Enel Market: innovative technologies available Russia: improving our position in the market

Diversification through availability of new solutions

Reinforce the perception of Tesmec as a new well-known competitive Player

Full package telecom proposal and high engineering support

Italy: Growth in the Transmission market Foreign Markets: new tender opportunities

Enlarge the markets through new collaboration

PUSH our INTERNATIONALIZATION sales CONSOLIDATION of the investment

-USA

-France -Czeck Republic -North-East Europe -Central Asia

CONNECTED VEHICLES

-Certified vehicles -Software and algorithms -Diagnostic systems

Centre of excellence for the development of maintenance & diagnostic vehicles with integrated systems

CENTRALIZED PLATFORM

The Centralized Platform is the enabler for the optimization of the railways infrastructure

Summary 2020.Q1 Profit & Loss statement - Appendix A

Profit & Loss Account (Euro mln)	2020.Q1	2019.Q1	Delta vs 2019.Q1	Delta %
Net Revenues	31,8	49,8	(18,0)	-36,1%
Raw materials costs (-)	(10,0)	(23,5)	13,5	-57,5%
Cost for services (-)	(6,9)	(8,1)	1,2	-15,0%
Personnel Costs (-)	(12,1)	(13,0)	0,8	-6,5%
Other operating revenues/costs (+/-)	(1,4)	(1,2)	(0,2)	17,7%
Non recurring revenues/costs (+/-)	0,0	0,0	0,0	na
Portion of gain/(losses) from equity investments evaluated using the equity method	0,0	(0,0)	0,0	-640,0%
Capitalized R&D expenses	1,0	1,6	(0,6)	-38,4%
Total operating costs	(29,4)	(44,1)	14,7	-33,4%
% on Net Revenues	(92%)	(88%)
EBITDA	2,5	5,7	(3,3)	-57,0%
% on Net Revenues	8%	12%
Depreciation, amortization (-)	(4,2)	(4,2)	0,0	-0,3%
EBIT	(1,7)	1,5	(3,3)	-210,5%
% on Net Revenues	-5%	3%
Net Financial Income/Expenses (+/-)	(2,4)	(0,5)	(1,9)	362,6%
Taxes (-)	1,1	(0,0)	1,1	-3587,5%
Minorities	(0)	(0)	(0,0)
Group Net Income (Loss)	(3,0)	1,0	(4,0)	n/a
% on Net Revenues	-9%	2%

Summary 2020.Q1 Balance Sheet - Appendix B

Disclaimer

The Manager responsible for preparing the company's financial reports, Marco Paredi, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records.

Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially.

Any estimates or forward-looking statements contained in this document are referred to the current date and, therefore, any of the assumptions underlying this document or any of the circumstances or data mentioned in this document may change. Tesmec S.p.A. expressly disclaims and does not assume any liability in connection with any inaccuracies in any of these estimates or forward-looking statements or in connection with any use by any third party of such estimates or forwardlooking statements.

This document does not represent investment advice or a recommendation for the purchase or sale of financial products and/or of any kind of financial services. Finally, this document does not represent an investment solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998, or in any other country or state.

In addition to the standard financial reporting formats and indicators required under IFRS, this document contains a number of reclassified tables and alternative performance indicators. The purpose is to help users better evaluate the Group's economic and financial performance. However, these tables and indicators should not be treated as a substitute for the standard ones required by IFRS.