Cembre — Interim / Quarterly Report 2015

May 14, 2015

C o s t r u z i o n i E l e t t r o m e c c a n i c h e B r e s c i a n e

I N T E R I M REPORT

2015 FIRST QUARTER

Cembre S.p.A.

Head Office: Via Serenissima 9, Brescia, Italy Share Capital: EUR 8,840,000 (fully paid-up). Registration no: 00541390175 (Commercial Register of Brescia)

This document contains translations of the quarterly report prepared in the Italian language for the purpose of the Italian law and of CONSOB regulations (CONSOB is the public authority responsible for regulating the Italian securities market)

Summary

Corporate Boards and Independent Auditors 2
Group Structure 3
Management Report 4
Subsequent events 6
Outlook 6
Consolidated Financial Statements at March 31, 2015 8
Consolidated Comprehensive Income Statement 8
Consolidated Statement of Financial Position - Assets 9
Consolidated Statement of Financial Position – Liabilities and Shareholders' Equity 10
Consolidated Statement of Cash Flows 11
Statement of Changes in the Consolidated Shareholders' Equity 12
Consolidated Income Statement 13
Notes to the accounts 14
Accounting principles, form and content of the Financial Statements, estimates 14
Conversion of financial statements of subsidiaries expressed in currencies other than
the euro 15

Corporate Boards and Independent Auditors

Board of Directors

Giovanni Rosani	Chairman and Managing Director
Anna Maria Onofri	Vice-Chairman
Sara Rosani	Director
Giovanni De Vecchi	Director
Aldo Bottini Bongrani	Director
Fabio Fada	Independent Director
Giancarlo Maccarini	Independent Director
Paolo Giuseppe La Pietra	Independent Director

Board of Statutory Auditors

Fabio Longhi	Chairman
Andrea Boreatti	Permanent Auditor
Rosanna Angela Pilenga	Permanent Auditor

Maria Grazia Lizzini	Substitute Auditor
Gabriele Baschetti	Substitute Auditor

Independent Auditors

PricewaterhouseCoopers S.p.A.

Group Structure

Management Report

In the first months of 2015 Cembre Group recorded positive results, with consolidated sales growing both domestically and abroad despite a slight contraction in European sales outside Italy as a result of the reduction in turnover of the German and UK subsidiaries.

The Group closed the 1st Quarter of 2015 reporting an increase in turnover on the corresponding period in 2014 of 12.2%, with consolidated sales up from €27,529 thousand in the 1st Quarter of 2014, to €30,897 thousand in the 1st Quarter of 2015. The strong increase in sales of the parent company – up 14.7% – was in fact accompanied by the good performance of the Spanish subsidiary that reported a 16.7% increase in turnover.

(euro '000)	st 1	st 1	Change	st 1	st 1	st 1	st 1	st 1	st 1
	Quarter	Quarter		Quarter	Quarter	Quarter	Quarter	Quarter	Quarter
	2015	2014		2013	2012	2011	2010	2009	2008
Cembre S.p.A. (Italy)	16,483	13,543	21.7%	13,014	13,624	15,762	11,381	9,727	13,622
Cembre Ltd. (UK)	5,460	5,770	-5.4%	4,850	4,592	3,588	2,654	2,425	3,399
Cembre S.a.r.l. (France)	2,156	2,098	2.8%	2,070	2,203	1,934	1,514	1,696	1,669
Cembre España S.L. (Spain)	2,149	1,845	16.5%	1,586	1,527	1,932	2,097	1,860	3,622
Cembre GmbH (Germany)	1,646	1,737	-5.2%	1,685	1,813	1,769	1,220	1,199	1,358
Cembre AS (Norway)	282	190	48.4%	199	204	159	131	144	160
Cembre Inc. (US)	2,721	2,346	16.0%	2,268	2,166	1,656	1,216	1,188	1,779
Total	30,897	27,529	12.2%	25,672	26,129	26,800	20,213	18,239	25,609

				Revenues by Group company (net of intragroup sales):
--	--	--	--	------------------------------------------------------	--

In the 1st Quarter of 2015, 38.7% of Group sales were represented by Italy (as compared with 37.5% in the 1st Quarter of 2014), up 15.9%, 42.6% by the rest of Europe (48.4% in the 1st Quarter of 2014), where they declined by 1.1%, and the remaining 18.7% by the rest of the World (14.1% in the 1st Quarter of 2014), where they were 48.3% higher than in the corresponding period in 2014.

(euro '000)	st 1	st 1	Change	st 1	st 1	st 1	st 1	st 1	st 1
	Quarter 2015	Quarter 2014		Quarter 2013	Quarter 2012	Quarter 2011	Quarter 2010	Quarter 2009	Quarter 2008
Italy	11,967	10,324	15.9%	9,538	10,058	12,302	8,594	7,206	10,759
Rest of Europe	13,165	13,319	-1.1%	12,211	11,702	11,071	8,671	8,929	11,573
Rest of the World	5,765	3,886	48.3%	3,923	4,369	3,427	2,948	2,104	3,277
Total	30,897	27,529	12.2%	25,672	26,129	26,800	20,213	18,239	25,609

Revenues by geographical area

Group Results for the 1st Quarter of 2015

(euro '000)	st 1 Quarter 2015	%	1st Quarter 2014	%	Change	2014 full year	%
Sales revenues	30,897	100	27,529	100	12.2%	112,905	100
Gross operating profit	6,767	21.9	5,787	21.0	16.9%	24,352	21.6
Operating profit	5,408	17.5	4,628	16.8	16.9%	19,433	17.2
Pre-tax profit	5,876	19.0	4,653	16.9	26.3%	19,702	17.5
Net profit	3,867	12.5	2,730	9.9	41.6%	13,542	12.0

Consolidated gross operating profit grew by 16.9% from €5,787 thousand in the 1st Quarter of 2014 (representing a 21% margin on sales), to €6,767 thousand (a 21.9% margin on sales) in the 1st Quarter of 2015. Personnel costs as a percentage of sales declined over the corresponding period in 2014 while the number of employees increased slightly from 619 in the 1st Quarter of 2014 to 621 in the 1st Quarter of 2015. The cost of goods sold as a percentage of sales grew slightly while the cost of services received as a percentage of sales declined on the 1st Quarter of 2014.

Consolidated operating profit for the 1st Quarter of 2015 amounted to €5,408 thousand, representing a 17.5% margin on sales, up 16.9% on €4,628 thousand in the 1st Quarter of 2014 when it represented a 16.8% margin on sales.

Consolidated profit before taxes for the 1st Quarter of 2015 was equal to €5,876 thousand, representing a 19.0% margin on sales, up 26.3% on €4,653 thousand in the 1st Quarter of 2014, when it represented 16.9% of sales.

Consolidated net profit for the 1st Quarter of 2015 was equal to €3,867 thousand, representing a 12.5% margin on sales, up 41.6% on €2,730 thousand in the 1st Quarter of 2014, when it represented 9.9% of sales.

The consolidated net financial position of the Group improved from a surplus of €11.7 million at December 31, 2014, to a surplus of €13.8 million at March 31, 2015. At March 31, 2014, the net financial position amounted to a surplus of €4.4 million.

	(euro '000)	March 31, 2015	December 31, 2014	March 31, 2014
A	Cash	17	13	48
B	Bank deposits	13,750	11,646	5,185
C	Cash and cash equivalents (A+B)	13,767	11,659	5,233
D	Current bank debt	-	-	(848)
E	Current financial debt (D)	-	-	(848)
F	Net current financial position (C+E)	13,767	11,659	4,385
G	Non-current financial debt	-	-	-
H	Net financial position (F+G)	13,767	11,659	4,385

Capital expenditure made in the 1st Quarter of 2015 by the Group amounted to €1.3 million and included €0.5 million of new plant and equipment, 0.1 million spent on buildings, and €0.3 million of advances paid. In the 1st Quarter of 2014 capital expenditure amounted to €1.6 million.

Subsequent events

No event having significant effects on the Group's financial position or operating performance occurred after March 31, 2015.

Outlook

Cembre expects sales to grow both on the domestic market and abroad thus looking to close the 2015 financial year reporting an increase in turnover over 2014 and a positive consolidated profit.

The Group's activity is not subject to cyclical or seasonal factors except for the slowdown in activity in August for the summer holidays, and in December for the Christmas holidays.

Consolidated Financial Statements at March 31, 2015

Consolidated Comprehensive Income Statement

	st Quarter 1 2015	st Quarter 1 2014
(euro '000)
Revenues from sales and services provided	30,897	27,529
Other revenues	251	158
Total Revenues	31,148	27,687
Cost of goods and merchandise	(11,172)	(11,498)
Change in inventories	(138)	2,027
Cost of services received	(3,718)	(3,653)
Lease and rental costs	(338)	(344)
Personnel costs	(8,819)	(8,176)
Other operating costs	(311)	(297)
Increase in assets due to internal construction	212	139
Write-down of receivables	(94)	(96)
Accruals to provisions for risks and charges	(3)	(2)
Gross Operating Profit	6,767	5,787
Property, plant and equipment depreciation	(1,246)	(1,061)
Intangible asset amortization	(113)	(98)
Operating Profit	5,408	4,628
Financial income	10	3
Financial expenses	-	(3)
Foreign exchange gains (losses)	458	25
Profit Before Taxes	5,876	4,653
Income taxes	(2,009)	(1,923)
Net Profit	3,867	2,730
Elements that can be reclassified into profit or loss
Conversion difference reserves	1,572	59
Comprehensive Income	5,439	2,789

			Consolidated Statement of Financial Position - Assets
--	--	--	-------------------------------------------------------

ATTIVITÀ	March 31, 2015	December 31, 2014
(euro '000)
NON-CURRENT ASSETS
Property, plant and equipment	66,093	65,846
Intangible assets	1,236	1,219
Other investments	10	10
Other non-current assets	54	9
Deferred tax assets	2,832	2,474
TOTAL NON-CURRENT ASSETS	70,225	69,558
CURRENT ASSETS
Inventories	39,301	38,291
Trade receivables	27,884	25,625
Tax receivables	858	847
Other receivables	563	537
Cash and cash equivalents	13,767	11,659
TOTAL CURRENT ASSETS	82,373	76,959
NON-CURRENT ASSETS HELD FOR DISPOSAL	-	-
TOTAL ASSETS	152,598	146,517

Consolidated Statement of Financial Position – Liabilities and

Shareholders' Equity

LIABILITIES AND SHAREHOLDERS' EQUITY	March 31, 2015	December 31, 2014
(euro '000)
SHAREHOLDERS' EQUITY
Capital stock	8,840	8,840
Reserves	112,627	97,513
Net profit	3,867	13,542
TOTAL SHAREHOLDERS' EQUITY	125,334	119,895
NON-CURRENT LIABILITIES
Employee Severance Indemnity and other personnel benefits	2,555	2,554
Provisions for risks and charges	285	269
Deferred tax liabilities	2,439	2,439
TOTAL NON-CURRENT LIABILITIES	5,279	5,262
CURRENT LIABILITIES
Trade payables	12,455	13,219
Tax payables	3,727	1,744
Other payables	5,803	6,397
TOTAL CURRENT LIABILITIES	21,985	21,360
LIABILITIES ON ASSETS HELD FOR DISPOSAL	-	-
TOTAL LIABILITIES	27,264	26,622
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	152,598	146,517

Consolidated Statement of Cash Flows

	st Qtr. 1 2015	2014
(euro '000)
A) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	11,659	7,539
B) CASH FLOW FROM OPERATING ACTIVITIES
Net profit (loss) for the period	3,867	13,542
Depreciation, amortization and write-downs	1,359	4,919
(Gains)/Losses on disposal of assets	(46)	190
Net change in Employee Termination Indemnity	1	116
Net change in provisions for risks and charges	16	190
Operating profit (loss) before change in working capital	5,197	18,957
(Increase) Decrease in trade receivables	(2,259)	(771)
(Increase) Decrease in inventories	(1,010)	(1,533)
(Increase) Decrease in other receivables and deferred tax assets	(395)	264
Increase (Decrease) of trade payables	(298)	390
Increase (Decrease) of other payables, deferred tax liabilities and tax payables	1,389	972
Change in working capital	(2,573)	(678)
NET CASH FLOW (USED IN)/FROM OPERATING ACTIVITIES	2,624	18,279
C) CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditure on fixed assets:
- intangible	(130)	(477)
- tangible	(1,174)	(8,759)
- financial	-	(5)
Proceeds from disposal of tangible, intangible, available-for-sale financial assets
- intangible	4	-
- tangible	99	142
Increase (Decrease) of trade payables for assets	(466)	50
NET CASH FLOW (USED IN)/FROM INVESTING ACTIVITIES	(1,667)	(9,049)
D) CASH FLOW FROM FINANCING ACTIVITIES
(Increase) Decrease in non current assets	(45)	1
Increase (Decrease) in bank loans and borrowings	-	(1,647)
Dividends distributed	-	(4,420)
NET CASH FLOW (USED IN)/FROM FINANCING ACTIVITIES	(45)	(6,066)
E) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (B+C+D)	912	3,164
F) Foreign exchange conversion differences	1,196	1,047
G) Discounting of Employee Termination Indemnity	-	(91)
H) CASH AND CASH EQUIVALENTS AT END OF PERIOD (A+E+F+G)	13,767	11,659
CASH AND CASH EQUIVALENTS AT END OF PERIOD	13,767	11,659
Current financial liabilities	-	-
NET CONSOLIDATED FINANCIAL POSITION	13,767	11,659
INTEREST PAID	-	(6)
BREAKDOWN OF CASH AND CASH EQUIVALENTS AT END OF PERIOD
Cash	17	13
Current account deposits	13,750	11,646
	13,767	11,659

(euro '000)	Balance at Dec. 31, 2014	Allocation of previous year's net profit	Other changes	Comprehensive Income for the period	Balance at March 31, 2015
Capital stock	8,840				8,840
Share premium reserve	12,245				12,245
Legal Reserve	1,768				1,768
Suspended-tax reserves	585				585
Other suspended-tax reserves	68				68
Other reserves	19,586	1,339		(114)	20,811
Conversion differences	(248)			1,686	1,438
Extraordinary reserve	55,286				55,286
First-time adoption of IAS/IFRS	3,715				3,715
Reserve for discounting of Employee Termination Indemnity	111				111
Merger difference	4,397				4,397
Retained earnings	-	12,203			12,203
Net profit	13,542	(13,542)		3,867	3,867
Total Shareholders' Equity	119,895	-	-	5,439	125,334

Statement of Changes in the Consolidated Shareholders' Equity

(euro '000)	Balance at Dec. 31, 2013	Allocation of previous year's net profit	Other changes	Comprehensive Income for the period	Balance at Dec. 31, 2014
Capital stock	8,840				8,840
Share premium reserve	12,245				12,245
Legal Reserve	1,768				1,768
Suspended-tax reserves	585				585
Other suspended-tax reserves	68				68
Other reserves	17,758	1,827		1	19,586
Conversion differences	(1,619)			1,371	(248)
Extraordinary reserve	51,030	4,256			55,286
First-time adoption of IAS/IFRS	3,715				3,715
Reserve for discounting of Employee Termination Indemnity	202			(91)	111
Merger difference	4,397				4,397
Retained earnings	-				-
Net profit	10,503	(10,503)		13,542	13,542
Total Shareholders' Equity	109,492	(4,420)	-	14,823	119,895

Consolidated Income Statement

	st Quarter 1 2015	%	st Quarter 1 2014	%	Change
(euro '000)
Revenues from sales and services provided	30,897	100.0%	27,529	100.0%	12.2%
Other revenues	251		158		58.9%
Total Revenues	31,148		27,687		12.5%
Cost of goods and merchandise	(11,172)	-36.2%	(11,498)	-41.8%	-2.8%
Change in inventories	(138)	-0.4%	2,027	7.4%	-106.8%
Cost of services received	(3,718)	-12.0%	(3,653)	-13.3%	1.8%
Lease and rental costs	(338)	-1.1%	(344)	-1.2%	-1.7%
Personnel costs	(8,819)	-28.5%	(8,176)	-29.7%	7.9%
Other operating costs	(311)	-1.0%	(297)	-1.1%	4.7%
Increase in assets due to internal construction	212	0.7%	139	0.5%	52.5%
Write-down of current assets	(94)	-0.3%	(96)	-0.3%	-2.1%
Accruals to provisions for risks and charges	(3)	0.0%	(2)	0.0%	50.0%
Gross Operating Profit	6,767	21.9%	5,787	21.0%	16.9%
Property, plant and equipment depreciation	(1,246)	-4.0%	(1,061)	-3.9%	17.4%
Intangible assets amortization	(113)	-0.4%	(98)	-0.4%	15.3%
Operating Profit	5,408	17.5%	4,628	16.8%	16.9%
Financial income	10	0.0%	3	0.0%	233.3%
Financial expenses	-	0.0%	(3)	0.0%	-100.0%
Foreign exchange gains (losses)	458	1.5%	25	0.1%	1732.0%
Profit before Taxes	5,876	19.0%	4,653	16.9%	26.3%
Income taxes	(2,009)	-6.5%	(1,923)	-7.0%	4.5%
Net profit	3,867	12.5%	2,730	9.9%	41.6%

Notes to the accounts

Accounting principles, form and content of the Financial Statements, estimates

The present Interim Report at March 31, 2015 was prepared in accordance with Regulations for the implementation of Legislative Decree no. 58 dated February 24, 1998 of the Consolidated Law on Finance (Testo Unico), and with article 82 of the Listed Companies Code, adopted by Consob with Resolution no. 11971 and subsequent amendments. Disclosure required under IAS 34 is therefore not provided in the present document.

Principles of consolidation and valuation criteria adopted are consistent with international accounting principles (IAS/IFRS).

The Consolidated Financial Statements are based on the Statutory Accounts of Cembre S.p.A. (parent company) at March 31, 2015, and those of the following companies at the same date:

	Share owned by the Group March 31, 2015	Share owned by the Group March 31, 2014
Cembre Ltd. (UK)	100%	100%
Cembre Sarl* (France)	100%	100%
Cembre España SL* (Spain)	100%	100%
Cembre AS (Norway)	100%	100%
Cembre GmbH* (Germany)	100%	100%
Cembre Inc.**(US)	100%	100%

* 5% share held through Cembre Ltd.

** 29% share held through Cembre Ltd.

The parent company has control of the above companies pursuant to Article 2359 of the Italian Civil Code.

Criteria used in the preparation of the financial statements were applied consistently within the Group. Where necessary, financial data was adjusted and reclassified. In compliance with IAS 1, in the financial statements costs were classified by nature.

The scope of the consolidation is unchanged from March 31, 2014 and December 31, 2014. Amounts are expressed in thousands of euro.

The present Quarterly Report was prepared in accordance with the "period separation criteria", based on which the period considered is treated as an independent financial period. The income statement for the quarter thus reflects the income components relating to the period based on the accrual method.

Year-end bonuses recognized to customers were estimated based on past sales and their expected future performance.

Conversion of financial statements of subsidiaries expressed in currencies other than the euro

The functional currency of the Group is the euro, in which its accounts are presented.

Exchange rates applied for the conversion of financial statements of subsidiaries expressed in currencies other than the euro are shown in the table below.

Currency	Exchange rate at March 31, 2015	Average exchange rate for 2015
British pound (£)	0.7273	0.7434
US dollar (US\$)	1.0759	1.1261
Norwegian kroner (NOK)	8.7035	8.7318

Brescia, May 14, 2015

The Chairman and Managing Director of Cembre S.p.A.

Giovanni Rosani

DECLARATION

pursuant to art 154-bis, Paragraph 2 of Legislative Decree 58 dated Feb. 24, 1998 "Consolidated Law on financial intermediation regulations" and subsequent integrations and updatings

Re: 2015 first Quarter Interim Report

The undersigned,

Claudio Bornati, Manager responsible for preparing the Cembre S.p.A. financial reports

DECLARES

pursuant to Paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the financial disclosure contained in the 2015 first Quarter Interim Report corresponds to the document results, books and accounting records.

Brescia, may 14, 2015

Signed by: Claudio Bornati Manager in charge of drafting the accounts of Cembre S.p.A.