Tesmec

Earnings Release • Nov 9, 2015

We 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.

Main business highlights

ENERGY

Stringing

STRINGING KEEP ON GROWING BUT AT A SLOWER PACE COMPARED TO THE PREVIOUS QUARTERS.

Automation

GROWTH TREND CONFIRMED WITH RELEVANT PROJECTS IN SOUTH AMERICA AND EASTERN EUROPE. CONSOLIDATION OF THE NEW DEVELOPMENTS.

TRENCHERS

GROWING OPPORTUNITIES IN THE TELECOM BUSINESS. THE GROUP IS RECOGNIZED AS TECHNOLOGICAL PARTNER OF THE MAIN PLAYERS IN THE SECTOR THANKS TO ITS ADVANCED INTEGRATED SYSTEMS.

GOOD PERSPECTIVE IN SADC (SOUTHERN AFRICAN DEVELOPMENT COMMUNITY ) FOR CIVIL WORKS.

MARKETING AND COMMERCIAL EFFORT TO ENTRY IN THE US HEAVY CONSTRUCTION BUSINESS.

RAILWAY

FOCUS ON SAFETY AND ENVIRONMENT ACCORDING TO EU STANDARD ARE DRIVERS FOR PROMOTION OF TESMEC SOLUTIONS IN THE ITALIAN MARKET.

• ONGOING SUCCESSFUL TEST OF RAILCARS IN USA.
• PARTICIPATION IN DOMESTIC AND INTERNATIONAL TENDER.

9M 2015 Economic Results year-on-year statutory figures

9M2015	9M2014	Delta %
120,2	81,0	48,4%
16,7	12,6	32,5%
14%	16%
9,3	6,7	38,8%
8%	8%
6,9	5,0	38,0%
6%	6%
4,7	3,1	51,6%
4%	4%

GROUP (€ mln)	9M2015	2014	Delta %
NFP (IAS17)	86,7	73,4	18,1%
NFP (without IAS17)	68,6	54,5	25,9%

ENERGY			9M20159M2014Delta %
Revenues	58,2	33,7	72,7%
EBITDA	9,4	6,1	54,1%
% on Revenues	16%	18%

TRENCHERS			9M20159M2014Delta %
Revenues	58,9	36,4	61,8%
EBITDA	7,5	2,8	167,9%
% on Revenues	13%	8%

RAILWAY			9M20159M2014Delta %
Revenues	3,1	10,8	-71,3%
EBITDA	-0,1	3,6	-102,8%
% on Revenues	-3%	33%

GROUP (€ mln)	statutory 9M2015	Marais recurring	Marais non recurring	organic 9M2015	9M2014	organic * Δ%
Revenues	120,2	11,0	/	109,2	81,0	34,8%
EBITDA % on Revenues	16,7 14%	0,1 1 %	2,1	14,5 13%	12,6 16%	15,1%
EBIT % on Revenues	9,3 8 %	-0,9 -8%	2,1	8,1 7 %	6,7 8 %	20,9%
NET INCOME % on Revenues	4,7 4 %	-0,6 -5%	2,3	3,0 3 %	3,1 4 %	-3,2%
GROUP (€ mln)	statutory 9M2015	Marais recurring	Marais non recurring	organic 9M2015	2014	organic * Δ%
NFP	86,7	8,6	5,0	73,1	73,4	-0,4%

* organic = at constant scope

INTERNATIONAL SCALE AND EXPOSURE TO GROWING ECONOMIES

EBITDA 9M 2015

9M2014 EBITDA increases less than proportionally with respect to revenues increase 9M2015

Financial Information (Euro mln)	statutory 9M2015	Marais	organic 9M2015	2014
Net Working Capital	57,9	1,8	56,1	57,9
Non Current assets	83,4	14,0	69,4	65,3
Other Long Term assets/liabilities	(1,8)	(0,4)	(1,5)	(1,7)
Net Invested Capital	139,5	15,4	124,0	121,5
Net Financial Indebtness	86,7	13,6	73,1	73,4
Equity	52,8	1,9	50,9	48,1
Total Sources of Financing	139,5	15,4	124,0	121,5

Euro Mln	statutory 9M2015	Marais	organic 9M2015	2014	Days 9M2015	Days 9M2014
Trade Receivables	51,8	6,7	45,1	41,3	117	144	9M 2015 WC = 36%
Inventories	60,8	2,7	58,1	55,4	148	208	Rev
Work in progress contracts	4,5	/	4,5	5,2
Trade Payables	(41,9)	(1,9)	(40,0)	(34,2)	9 4	105
Other Current Assets/(Liabilities)	(17,3)	(5,4)	(11,9)	(9,8)	-41	2 7
Net Working Capital	57,9	2,1	55,8	57,9

Operating Net Financial Position without figurative debt for Grassobbio premises

Order Book 9M 2015

45,2 58,2 19,7 32,7 0 15 30 45 60 Order book FY 2014 9M2015 Revenues Order Intake Order book 9M2015 19,7 8,3 40,3 68,3 mln € mln 5,9 3,1 8,3 5,5 0 5 10 Order book FY 2014 9M2015 Revenues Order Intake Order book 9M2015 € mln ENERGY RAILWAY

NFP and WORKING CAPITAL: ongoing actions to reduce the financial debt and the working capital, especially in Trencher division

Profit & Loss Account (€ mln)	9M2015	9M2014	Delta	Delta %
Net Revenues	120,2	81,0	39,2	48,4%
Raw materials costs (-)	(61,8)	(37,8)	(24,0)	63%
Cost for services (-)	(20,9)	(13,7)	(7,2)	53%
Personnel Costs (-)	(24,5)	(18,8)	(5,7)	30%
Other operating revenues/costs (+/-)	0,1	(2,1)	2,2	-105%
Portion of gain/(losses) from equity investments evaluated using the equity method	(0,1)	0,4	(0,5)	-118%
Capitalized R&D expenses	3,7	3,6	0,1	3 %
Total operating costs	(103,5)	(68,4)	(35,1)	51,3%
% on Net Revenues	(86%)	(84%)
EBITDA	16,7	12,6	4,1	59,6%
% on Net Revenues	14%	16%
Depreciation, amortization (-)	(7,4)	(5,9)	(1,5)	25%
EBIT	9,3	6,7	2,6	81,1%
% on Net Revenues	8 %	8 %
Net Financial Income/Expenses (+/-)	(2,3)	(1,8)	(0,5)	28%
Taxes (-)	(2,2)	(1,8)	(0,4)	22%
Minorities	-	-	-	-
Net Income (Loss)	4,7	3,1	1,6	282,4%
% on Net Revenues	4 %	4 %

Summary 9M 2015 Profit & Loss statement

Summary 9M 2015 Balance Sheet

Balance Sheet (€ mln)	9M2015	2014
Inventory	60,8	55,4
Work in progress contracts	4,5	5,2
Accounts receivable	51,8	41,3
Accounts payable (-)	(41,9)	(34,2)
Op. working capital	75,2	67,7
Other current assets (liabilities)	(17,3)	(9,8)
Net working capital	57,9	57,9
Tangible assets	64,9	48,1
Intangible assets	13,6	12,4
Financial assets	4,9	4,8
Fixed assets	83,4	65,3
Net long term liabilities	(1,8)	(1,7)
Net invested capital	139,5	121,5
Cash & near cash items (-)	(17,1)	(18,7)
Short term financial assets (-)	(9,9)	(6,8)
Short term borrowing	46,1	36,6
Medium-long term borrowing	67,6	62,3
Net financial position	86,7	73,4
Equity	52,8	48,1
Funds	139,5	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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