Tesmec

Earnings Release • Mar 14, 2016

Tesmec focus on strategic markets for the growth and modernization of every country.

Solutions partner for your world

Tesmec designs, manufactures and sells products, technologies and integrated solutions for the construction, maintenance and efficiency of infrastructures related to the transport and distribution of energy, data and material, such as: overhead and underground networks, traditional and high speed railway lines, energy cables and pipelines. In addition to traditional businesses, Tesmec is increasing its market presence offering solutions for Power Grid's efficiency & management.

Equipment for new power lines construction FROM

TO

Safety Reliability Efficiency Resiliency

Integrated systems for maintenance of existing power lines and management and monitoring of grids

RECONDUCTORING operations: solutions to maintain the transmission efficiency over time or to increase the capacity of existing lines, that are acceptable to the public, reliable and economical.

ENERGY EFFICIENCY and SMART GRIDS: integrated systems, electronic devices for communication and telecontrol, sensors and systems for metering and protection. Energy automation business.

Reconductoring

Line refurbishment: solutions for renewing the old conductor avoiding high cost of new power lines installations and difficulties of acquiring tower sites and right-ofways

Line improvement: replacing standard conductors with new generation of HTLS conductors to increase the capacity of an existing line without modifying voltage and structures of insulators and towers

Digital Power Line Carrier Smart Metering Tool

Innovative terminal for data transmission over High Voltage power lines in compliance with international IEC 60495

Advantages

• High degree of flexibility
• Reliability
• Simplicity and configurability

Innovative system specifically designed for the measurement of energy and all related electric data such as voltage, current, phase angle on Medium Voltage network

Advantages

Accuracy with distribution monitoring analytics that are actionable and customizable

• Simplify the installation and the architecture of the device
• Cut ownership & maintenance costs

TO

Advanced railcars able to perform without line interruption

AUTOMATIC TRAIN CONTROL SYSTEM : designed to provide enhanced levels of rail safety through continuous train control and protection

Safety Green Efficiency

ADVANCED COMMUNICATION INTERFACE : special system that allows to manage the hydraulic traction system of several machines together for multiple drive

COMPLIANCE WITH THE HIGHEST EUROPEAN STANDARDS: safety first and low environmental impact

Top technological units

Multipurpose unit for catenary installation and maintenance especially designed for high speed railway lines with particular focus on operating efficiency, safety matters and low emission.

EN14033 certified

Underground segment

FROM Supplier of equipment

TO

Experience Equipment Services

Complete package of solutions (advanced equipment + complementary services) to offer value added solutions to the customers

SPECIALISTS AND DEEP EXPERTISE to efficiently manage the jobsite increasing performances and reducing risks

HIGH TECHNOLOGICAL EQUIPMENT equipped with remote monitoring system and electronic control system to perform the job in an efficient and safe way, with low environmental impact

SERVICES, AFTER SALES AND COMPLEMENTARY ACTIVITIES to grant time to market and effective support to the operations

Solutions for different applications

(fiber optic cable laying., FTTH and long distance..)

(underground energy cable, wind farm...)

HEAVY CIVILS

(construction, bulk excavation..)

PIPELINES (water, oil, gas..)

New Orbital Highway - Qatar Water pipeline - Chile

2015 Economic and financial data

GROUP	2015	2014	Delta %
Revenues	164,4	114,9	43,1%
EBITDA	24,0	18,3	31,1%
% on Revenues	15%	16%
EBIT	12,8	10,5	21,9%
% on Revenues	8%	9%
Profit Before Taxes	9,1	8,3	9,6%
% on Revenues	6%	7%
NET INCOME	7,2	4,9	46,9%
% on Revenues	4%	4%
GROUP	2015	2014	Delta %
PFN (IAS17)	89,9	73,4	22,5%

2015	2014	Delta %
72,1	50,1	43,9%
11,4	9,5	20%
15,8%	19,0%

TRENCHERS	2015	2014	Delta %
Revenues	88,5	52,8	67,6%
EBITDA	13,0	6,1	113%
% on Revenues	14,7%	11,6%

INTERNATIONAL SCALE AND EXPOSURE TO GROWING ECONOMIES

EBITDA 2015

²⁰¹⁴EBITDA improvement mainly thanks to volumes increase ²⁰¹⁵

Financial Information (Euro mln)	2015	2014
Net Working Capital	63,5	57,9
Non Current assets	83,9	65,3
Other Long Term assets/liabilities	(1,7)	(1,7)
Net Invested Capital	145,7	121,5
Net Financial Indebtness	89,9	73,4
Equity	55,8	48,1
Total Sources of Financing	145,7	121,5

	57,9 25 0				63,5
	2014 Inventories Net Working capital	WIP	Trade Trade Receivables Payables	Other current ass. / liab.	2015 Net Working capital
				Days	Days
	Euro Mln	2015	2014	2015	2014
2015	Trade Receivables	50,9	41,3	111	129
Net Working Capital 39% Revenues	Inventories	58,9	55,4	137	190
2014	Work in progress contracts	3,8	5,2
Net Working Capital 50% Revenues	Trade Payables	(39,0)	(34,2)	-86	107
	Other Current Assets/(Liabilities)	(11,1)	(9,8)	-24	-32
	Net Working Capital	63,5	57,9

Net Financial Position Evolution

MARGIN EFFECT

	2015	2014	2013
AVERAGE EUR/USD EX. RATE	1,11	1,329	1,328

FX NET ASSETS

	2015	2014	2013
year end rate Eur/Usd	1,089	1,214	1,379
FX Gain/(Loss) mm/euro	1,7	2,8	-1,2

CONSOLIDATION PROCESS

	2015	2014	2013
year end rate Eur/Usd	1,089	1,214	1,379
Net Equity change (mm/euro)	3,6	3,6	-1,1

Order Book 2015

RAILWAY

OPPORTUNITIES

INCREASING DEMAND OF MODERNIZATION OF POWER GRIDS WORLDWIDE

PROJECTS OF GRIDS INTERCONNECTION AND INTEGRATION OF RENEWABLE ENERGIES IN THE NETWORKS

GROWING OPPORTUNITIES IN THE TELECOM AND FIBER OPTIC MARKET BOTH FTTH AND LONG DISTANCE

GROWING PRESSURE ON ENVIRONMENTAL AND SAFETY ISSUES IN THE MAIN BUSINESSES OF THE GROUP

UNDERGROUND CABLING IS BECOMING INCREASINGLY ATTRACTIVE, MAINLY FOR ENVIRONMENTAL AND AESTHETIC REASONS

NEW GREEN AND SMART PROJECTS WORLDWIDE

THREATS

COMPLEX ECONOMIC SITUATION FOR SOME OF THE MAIN WORLD ECONOMIES

OIL, GAS AND COMMODITY MARKET TREND

Summary 2015 Profit & Loss statement

Profit & Loss Account (€ mln)	2015	2014	Delta vs 2014	Delta %
Net Revenues	164,4	114,9	49,5	43,1%
Raw materials costs (-)	(82,8)	(55,5)	(27,3)	49%
Cost for services (-)	(27,3)	(19,0)	(8,3)	44%
Personnel Costs (-)	(34,5)	(26,1)	(8,4)	32%
Other operating revenues/costs (+/-)	(0,7)	(2,5)	1,8	-72%
Portion of gain/(losses) from equity investments evaluated using the equity method	(0,1)	0,9	(1,0)	-111%
Capitalized R&D expenses	5,1	5,6	(0,5)	-9%
Total operating costs	(140,4)	(96,6)	(43,8)	45,3%
% on Net Revenues	(85%)	(84%)
EBITDA	24,0	18,3	5,7	31,1%
% on Net Revenues	15%	16%
Depreciation, amortization (-)	(11,2)	(7,8)	(3,4)	44%
EBIT	12,8	10,5	2,3	21,9%
% on Net Revenues	8 %	9 %
Net Financial Income/Expenses (+/-)	(3,8)	(2,2)	(1,6)	73%
Taxes (-)	(1,9)	(3,4)	1,5	-44%
Minorities	(0,2)	-	-	-
Group Net Income (Loss)	6,9	4,9	2,0	41,6%
% on Net Revenues	4 %	4 %

Summary 2015 Balance Sheet

Balance Sheet (€ mln)	2015	2014
Inventory	62,7	60,6
Accounts receivable	50,9	41,3
Accounts payable (-)	(39,0)	(34,2)
Op. working capital	74,6	67,7
Other current assets (liabilities)	(11,1)	(9,8)
Net working capital	63,5	57,9
Tangible assets	65,3	48,1
Intangible assets	13,8	12,4
Financial assets	4,8	4,8
Fixed assets	83,9	65,3
Net long term liabilities	(1,7)	(1,7)
Net invested capital	145,7	121,5
Cash & near cash items (-)	(21,2)	(18,7)
Short term financial assets (-)	(11,8)	(6,8)
Short term borrowing	45,2	36,6
Medium-long term borrowing	77,7	62,3
Net financial position	89,9	73,4
Equity	55,8	48,1
Funds	145,7	121,5

Disclaimer

The Manager responsible for preparing the company's financial reports, Andrea Bramani, 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 forward-looking 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.

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