Emak

Quarterly Report • May 12, 2017

Interim report at 31.03.2017

Emak S.p.A. • Via Fermi, 4 • 42011 Bagnolo in Piano (Reggio Emilia) ITALY Tel. +39 0522 956611 • Fax +39 0522 951555 - info@emak.it • www.emak.it Capitale Sociale Euro 42.623.057,10 Interamente versato • Registro delle Imprese N. 00130010358 • R.E.A. 107563 Registro A.E.E. IT08020000000632 • Registro Pile/Accumulatori IT09060P00000161 Meccanografico RE 005145 • C/C Postale 11178423 • Partita IVA 00130010358 • Codice Fiscale 00130010358

Contents

Organizational chart of Emak Group 3
Corporate Bodies of Emak S.p.A. 4
Main economic and financial figures for the Group 5
Directors' report 6
Comments on economic figures 6
Statement of financial position analysis 7
Highlights of the consolidated financial statement broken down by operating segment for the first quarter 2017 .10
Comments on interim results by operating segment 10
Business outlook 11
Subsequent events 11
Others informations12
Definitions of alternative performance indicators 12
Consolidated Financial Statements 13
Consolidated Income Statement 13
Statement of consolidated financial position14
Statement of change in consolidated equity between 31st December 2016 and 31st March 2017. 15
Comments on the financial statements16
Declaration of the executive in charge of preparing the accounting statements pursuant to the rules of Article 154-
bis, paragraph 2 of Legislative Decree no. 58/199818

Organizational chart of Emak Group

Valley Industries LLP is consolidated at 100% as a results of the "Put and Call Option Agreement" that governs the purchase of the 10% remaining.

Lemasa is consolidated at 100% as a results of the "Put and Call Option Agreement" that governs the purchase of the 30% remaining.

P.T.C. S.r.l. is consolidated at 100% as a results of the "Put and Call Option Agreement" that governs the purchase of the 10% remaining.

Comet do Brasil Investimentos Ltda is owned for 99.63% by Comet S.p.A .and 0.37% by P.T.C. S.r.l.

Corporate Bodies of Emak S.p.A.

The Ordinary General Meeting of the Shareholders of the Parent Company, Emak S.p.A. on 22 April 2016 appointed the Board of Directors and the Board of Statutory Auditors for the financial years 2016-2018 and conferred also the engagement for the independent audit for the financial years 2016-2024.

Board of Directors

Chairman and Chief Executive Officer	Fausto Bellamico
Deputy Chairman	Aimone Burani
Executive Director	Stefano Slanzi
Lead Independent Director	Massimo Livatino
Independent Directors	Alessandra Lanza
	Elena Iotti
Directors	Francesca Baldi
	Ariello Bartoli
	Luigi Bartoli
	Paola Becchi
	Giuliano Ferrari
	Vilmo Spaggiari
	Guerrino Zambelli
	Marzia Salsapariglia
Audit Committee and Remuneration Committee
Chairman	Massimo Livatino
Components	Alessandra Lanza
	Elena Iotti
Board of Statutory Auditors
Chairman	Paolo Caselli
Acting auditors	Gianluca Bartoli
	Francesca Benassi
Alternate auditor	Maria Cristina Mescoli
	Federico Cattini
Independent Auditor	Deloitte & Touche S.p.A.
Financial Reporting Officer	Aimone Burani
Supervisory Body as per Legislative Decree 231/01
Chairman	Sara Mandelli
Acting member	Roberto Bertuzzi

Main economic and financial figures for the Group

Income statement (€/000)

Year 2016			1Q 2017	1Q 2016
391,879	Revenues from sales		119,204	114,271
40,479	EBITDA before non ordinary expenses	(*)	17,291	15,743
39,469	EBITDA (*)		17,291	15,743
21,869	EBIT		14,241	12,742
17,683	Net profit		9,250	7,322

Investment and free cash flow (€/000)

Year 2016		1Q 2017	1Q 2016
12,159	Investment in property, plant and equipment	3,478	2,910
2,386	Investment in intangible assets	674	475
35,283	Free cash flow from operations (*)	12,300	10,323

Statement of financial position (€/000)

31.12.2016		31.03.2017	31.03.2016
261,751	Net capital employed	292,018	298,952
(80,083)	Net debt	(100,896)	(125,081)
181,668	Total equity	191,122	173,871

Other statistics

Year 2016		1Q 2017	1Q 2016
10.1%	EBITDA / Net sales (%)	14.5%	13.8%
5.6%	EBIT / Net sales (%)	11.9%	11.2%
4.5%	Net profit / Net sales (%)	7.8%	6.4%
8.4%	EBIT / Net capital employed (%)	4.9%	4.3%
0.44	Debt / Equity	0.53	0.72
1,686	Number of employees at period end	1,716	1,694

Share information

Year 2016		1Q 2017	1Q 2016
0.108	Earnings per share (€)	0.056	0.045
163,934,835	Number of shares comprising share capital	163,934,835	163,934,835
163,537,602	Average number of oustanding shares	163,537,602	163,537,602

(*) See section "Definitions of alternative performance indicators"

Directors' report

Comments on economic figures

Revenues from sales

Emak Group achieved a consolidated turnover of € 119,204 thousand in the first quarter, compared to € 114,271 thousand of last year, an increase of 4.3%. The improvement is due to organic growth for 3.5% and positive currency effect for 0.8%.

EBITDA

EBITDA for the first quarter 2017 amounts to € 17,291 thousand (14.5% of sales), compared to € 15,743 thousand (13.8 % of sales) for the corresponding quarter of the previous year, increasing by 9.8%.

The increase in the result for the period is mainly due to the growth in turnover that generated a positive operating leverage. Personnel and operating costs are in line with the same period of the previous year. The average number of employees in the workforce of the Group was 1,886, substantially in line compared to 1,888 in the first quarter of 2016.

EBIT

EBIT for the first quarter 2017 is € 14,241 thousand with an incidence of 11.9% of revenues, compared to € 12,742 thousand (11.2% of sales) for the same quarter of last year.

Depreciation and amortization are € 3,050 thousand, compared to € 3,001 thousand in the same period of the previous year.

Non-annualized EBIT as a percentage of net invested capital is 4.9%, compared to 4.3% of the same period of the previous year.

Net profit

Net profit for the first quarter 2017 is € 9,250 thousand, against € 7,322 thousand for the same quarter of the previous year, increasing by 26.3%.

The result of financial management benefited from the decrease in the expanses associated with the Group's lower debt compared to the same period of the previous year. In the first quarter of 2016, higher fees were booked for € 360 thousand relating to the price adjustment for the acquisition of S.I.Agro Mexico.

Currency management in the first quarter 2017 was negative for € 371 thousand, in line with negative balance of € 363 thousand for the same period last year.

The tax rate amounted to 29.8%, decreased compared to 32% in the same period last year, influenced by the reduction of the tax rate to 24% IRES for Italian companies, in force from 2017.

Statement of financial position analysis

31.12.2016	Thousand of Euro	31.03.2017	31.03.2016
116,128	Net non-current assets (*)	118,823	113,418
145,623	Net working capital (*)	173,195	185,534
261,751	Total net capital employed	292,018	298,952
180,173	Equity attributable to the Group	189,554	172,490
1,495	Equity attributable to non controlling interests	1,568	1,381
(80,083)	Net debt	(100,896)	(125,081)

(*) See section "Definitions of alternative performance indicators"

Net non-current assets

During first nine month of 2017 Emak Group invested € 4,152 thousand in property, plant and equipment and intangible assets, as follows:

• € 947 thousand for product innovation;
• € 1,403 thousand for adjustment of production capacity and for process innovation;
• € 723 thousand for upgrading the computer network system;
• € 999 thousand for construction of the new parent company's R&D center and modernization of industrial buildings;
• € 80 thousand for other investments in operating activities.

Investments broken down by geographical area are as follows:

• € 2,655 thousand in Italy;
• € 473 thousand in Europe;
• € 537 thousand in the Americas;
• € 487 thousand in the Rest of the World.

Net working capital

Net working capital, compared to 31 December 2016, increases by € 27,572 thousand, from € 145,623 thousand to € 173,195 thousand.

The following table shows the change in net working capital of the first quarter of 2017 compared with the same period last year:

€/000	3M 2017	3M 2016
Net working capital at 01 January 2017	145,623	154,508
Increase/(decrease) in inventories	1,748	6,492
Increase/(decrease) in trade receivables	36,836	33,393
(Increase)/decrease in trade payables	(6,893)	(6,110)
Change for acquisition of company branch A1 Mist Sprayers Resources	58	0
Other changes	(4,177)	(2,749)
Net working capital at 31 March 2017	173,195	185,534

The increase in net working capital compared to December 31, 2016 is consistent with the seasonality of sales of the Group, concentrated mostly in the first six months of the year. Compared to the same period of the previous financial year there is a decrease mainly due to more efficient inventory management.

Net financial position

The net financial position amounts to 100,896 thousand Euro at March 31, 2016 against 80,083 thousand Euro at December 31, 2016.

Below are the movements in net debt in the three months of 2017 compared with the same period last year:

€/000	1Q 2017	1Q 2016
Opening NFP	(80,083)	(99,383)
Ebitda	17,291	15,743
Financial income and expenses	(739)	(1,618)
Income from/(expenses on) equity investment	46	0
Exchange gains and losses	(371)	(363)
Income taxes	(3,927)	(3,439)
Cash flow from operations, excluding changes in operating assets and liabilities	12,300	10,323
Changes in operating assets and liabilities	(27,522)	(31,715)
Cash flow from operations	(15,222)	(21,392)
Changes in tangible and intangible assets	(3,597)	(3,831)
Other equity changes	(67)	(123)
Changes from exchange rates and translation reserve	(54)	(352)
Change for acquisition of business A1 Mist Sprayers Resources	(1,873)	0
Closing NFP	(100,896)	(125,081)

Cash flow from operations net of taxes amounted to € 12,300 thousand in the quarter, an increase compared to € 10,323 thousand for the same period last year. Cash flow from operations was negative for € 15,222 thousand compared to a negative value of € 21,392 thousand in the same period of the previous financial year. Value, although decreasing, is affected by the seasonality of the Group's business, which implies an increase in net working capital at the beginning of the year.

The net financial position is made up as follows:

	Net financial position	31/03/2017	31/12/2016	31/03/2016
A.	Cash	21,439	32,545	22,050
B.	Other cash at bank and on hand (held-to-maturity investments)	-	-	-
C	Financial instruments held for trading	-	-	-
D.	Liquidity funds (A+B+C)	21,439	32,545	22,050
E.	Current financial receivables	525	545	811
F.	Current payables to banks	(28,582)	(11,833)	(27,189)
G.	Current portion of non current indebtedness	(31,415)	(32,862)	(37,559)
H	Other current financial debts	(2,998)	(2,469)	(1,848)
I.	Current financial indebtness (F+G+H)	(62,995)	(47,164)	(66,596)
J	Current financial indebtness, net (I+E+D)	(41,031)	(14,074)	(43,735)
K.	Non-current payables to banks	(55,271)	(63,249)	(73,383)
L	Bonds issued	-	-	-
M.	Other non-current financial debts	(13,771)	(12,858)	(16,026)
N.	Non-current financial indebtness (K+L+M)	(69,042)	(76,107)	(89,409)
O.	Net indebtness (J+N)	(110,073)	(90,181)	(133,144)
P.	Non current financial receivables	9,177	10,098	8,063
Q.	Net financial position (O+P)	(100,896)	(80,083)	(125,081)

The net financial position includes financial liabilities for the purchase of the remaining shares of the minority investments and for the adjustment of acquisition transactions with deferred payment subject to contractual restrictions, in the amount of € 14,139 thousand related to the following companies:

• Valley LLP for € 1,537 thousand;
• P.T.C S.r.l for € 203 thousand;
• Lemasa for € 12,306 thousand;
• Company branch A1 Mist Sprayers Resources for € 93 thousand.

Short-term financial payables mainly consist of:

• account payables and account advances;
• loan repayments falling due by 31.03.2018;
• amounts due to other providers of finance falling due by 31.03.2018;
• debt for equity investments in the amount of € 1,630 thousand.

Equity

Total equity is equal to 191,122 thousand Euro against 181,668 thousand Euro at 31 December 2016. Earnings per share at 31 March 2017 is equal to 0.056 Euro compared to Euro 0.045 Euro in the previous year.

On 31 December 2016 the company held 397,233 treasury shares in portfolio number for the equivalent of € 2,029 thousand Euro.

From 1 January 2017 to 31 March 2017 Emak S.p.A. did not buy or sell treasury shares, for which the inventory and value are unchanged from December 31, 2016.

Highlights of the consolidated financial statement broken down by operating segment for the first quarter 2017

	OUTDOOR POWER EQUIPMENT		PUMPS AND HIGH PRESSURE WATER JETTING		COMPONENTS AND ACCESSORIES		Other not allocated / Netting		Consolidated
€/000				31.03.2017 31.03.2016 31.03.2017 31.03.2016 31.03.2017 31.03.2016 31.03.2017 31.03.2016 31.03.2017						31.03.2016
Sales to third parties	52,468	53,435	30,195	28,508	36,541	32,328	-	-	119,204	114,271
Intersegment sales	457	386	546	557	2,398	2,022 -	3,401 -	2,965
Revenues from sales	52,925	53,821	30,741	29,065	38,939	34,350 -	3,401 -	2,965	119,204	114,271
Ebitda	4,883	5,858	5,234	4,652	8,058	6,010 -	884 -	777	17,291	15,743
Ebitda/Total Revenues %	9.2%	10.9%	17.0%	16.0%	20.7%	17.5%			14.5%	13.8%
Operating profit	3,472	4,373	4,493	3,980	7,160	5,166 -	884 -	777	14,241	12,742
Operating profit/Total Revenues %	6.6%	8.1%	14.6%	13.7%	18.4%	15.0%			11.9%	11.2%
Net financial expenses									- 739 -	1,618
Profit befor tax									13,177	10,761
Income taxes									3,927	3,439
Net profit									9,250	7,322
Net profit/Total Revenues%									7.8%	6.4%

STATEMENT OF FINANCIAL POSITION
Net debt	36,852	50,355	52,646	56,428	12,191	19,133 -	793 -	835	100,896	125,081
Shareholders' Equity	182,412	180,723	41,102	32,606	50,222	43,123 -	82,614 -	82,581	191,122	173,871
Total Shareholders' Equity and Net debt	219,264	231,078	93,748	89,034	62,413	62,256 -	83,407 -	83,416	292,018	298,952
Net non-current assets (*)	133,163	129,262	47,299	46,389	19,722	19,135 -	81,361 -	81,368	118,823	113,418
Net working capital	86,101	101,816	46,449	42,645	42,691	43,121 -	2,046 -	2,048	173,195	185,534
Total net capital employed	219,264	231,078	93,748	89,034	62,413	62,256 -	83,407 -	83,416	292,018	298,952

(*) The net non-current assets of the Outdoor Power Equipment area includes the amount of Equity investments for 81,150 thousand Euro

OTHER STATISTICS
Number of employees at period end	799	801	392	381	518	505	7	7	1,716	1,694
OTHER INFORMATIONS
Amortization, depreciation and impairment losses	1,411	1,485	741	672	898	844			3,050	3,001
Investment in property, plant and equipment and in intangible assets	1,382	970	1,224	1,483	1,546	932			4,152	3,385

Note: Starting with the 2016 Annual Financial Report, the Group reports its results by analyzing data by business area. In order to make the comparison with the previous year homogeneous, revenues were reclassified on the basis of individual business units

Comments on interim results by operating segment

The table below shows the breakdown of "sales to third parties" in the first nine months in 2017 by business sector and geographic area, compared with the same period last year.

	OUTDOOR POWER EQUIPMENT			PUMPS AND HIGH PRESSURE WATER JETTING			COMPONENTS AND ACCESSORIES			TOTAL
€/000	1Q 2017	1Q 2016	Var. %	1Q 2017	1Q 2016	Var. %	1Q 2017	1Q 2016		Var. % 1Q 2017 1Q 2016		Var. %
Europe	44,489	44,435	0.1%	13,470	12,819	5.1%	24,402	20,652	18.2%	82,361	77,906	5.7%
Americas	2,992	2,426	23.3%	13,877	13,110	5.9%	8,598	8,048	6.8%	25,467	23,584	8.0%
Asia, Africa and Oceania	4,987		6,574 -24.1%	2,848	2,579	10.4%	3,541	3,628	-2.4%	11,376	12,781	-11.0%
Total	52,468	53,435	-1.8%	30,195	28,508	5.9%	36,541	32,328	13.0%		119,204 114,271	4.3%

Outdoor Power Equipment

The sales on the European market are in line with the same period last year, with markets of Eastern Europe that offset the decline in Western European countries. The result recorded in the Americas area reflects the growth in Latin American markets. The result recorded in Asia, Africa and Oceania was mainly due to lower sales in the Middle East markets.

EBITDA was affected by lower sales volumes and an unfavorable product-market mix. Personnel costs and other operating costs were overall in line with the same period of the previous year.

Pumps and High Pressure Water Jetting

The increase in sales in Italy and in Western European countries has contributed to the good result of the European area. Sales growth in the Americas area was driven by good results on the Brazilian and Mexican markets.

The Asia, Africa and Oceania region saw the good performance of Asian and North African markets.

EBITDA benefited from the increase in sales and the reduction in operating costs and an increase in margins resulting from a favorable mix effect on sales.

Components and Accessories

Europe has seen a general growth in sales, especially in Western European countries. In the Americas there was an increase in the US market mainly due to sales of accessories for brushcutters. In South America there was good growth thanks to good sales performance of agricultural components and accessories. In Asia, Africa and Oceania, sales were in line with the same period.

EBITDA improvement in the segment is linked to the leverage resulting from the increase in sales.

Business outlook

Given the good overall results achieved in the quarter, the Group estimates organic growth of the year-end turnover of 3% -4%, with the positive contribution of all sectors. The Group will also continue to implement useful activities for more efficient business management, including the ERP transformation project. Particular attention will be given to the integration of upcoming acquisition of Lavorwash, which will be consolidated from the closing date.

Subsequent events

Acquisizione dell'83,1% del Gruppo Lavorwash

On May 10, 2017 the subsidiary Comet S.p.A. signed a binding contract for the acquisition of 83.1% of the Lavorwash Group by Zenith S.p.A. (of the Lanfredi family) and the Migliari family.

Lavorwash, headquartered in Pegognaga (MN), is a Group active in the design, production and marketing of a wide range of both hobby and professional machines for the cleaning sector such as high pressure washers, vacuum cleaners, floor scrubbers. Lavorwash Group has manufacturing facilities in Italy, China and Brazil, and distributing subsidiaries in Spain, France, Great Britain, Poland and China. In 2016, based on the due diligence, Lavorwash Group had a turnover of € 70 million, with an adjusted EBITDA of € 9.5 million and a net profit of € 5.8 million. By the end of 2016 the company had a positive net financial position of around € 17 million.

Payment of the consideration for the acquisition of 83.1% of the capital will take place at the closing, scheduled for July 3, 2017, on the basis of a provisional price determined at € 54.8 million, which will be corrected on the basis of the results achieved on June 30, 2017.

A further 14.7% stake held by Zenith S.p.A. and Migliari family is regulated by a put and call option agreement to be exercised in 2020, at a price calculated on the basis of the results obtained in the period 2018-2019. The remaining 2.2% will remain in the possession of the current Lavorwash minority shareholders.

Lavorwash Group's activity is strongly complementary to the activities of the Emak Group's Pump and High-Pressure Water Jetting segment.

The operation sees, as a fundamental aspect for future value creation for the Emak Group, the implementation of a commercial and productive synergy plan that Comet and Lavorwash have identified and intend to jointly develop from closing.

This acquisition will accelerate the growth of the Group in the Pump and High Pressure Water Jetting segment thanks to the expansion and completion of the range of products in the cleaning sector, offering greater opportunities to consolidate market shares on historic customers and acquire new ones. "

In the medium-long term, the acquisition will enable to optimize the productive structure of the division Pumps and High Pressure Water Jetting, through the reorganization of the factories on the basis of the type of product, making the plants more efficient and focused.

Put&Call Option extension minority purchase Valley Industries LLP

On May 5, 2017 has been extended for 12 months, the agreement with the minority shareholders "Savage Investments" for the deferment of the exercise of the put and call options on the remaining minority stake of 10%, due in the first half of 2017.

Others informations

Significant operations: derogation from disclosure obligations

The Company has resolved to make use, with effect from 31 January 2013, of the right to derogate from the obligation to publish the informative documents prescribed in the event of significant merger, demerger, share capital increase through the transfer of goods in kind, acquisition and disposal operations, pursuant to art. 70, paragraph 8, and art. 71, paragraph 1-bis of Consob Issuers Regulations, approved with resolution no. 11971 of 4/5/1999 and subsequent modifications and integrations.

Definitions of alternative performance indicators

Below are reported, in accordance with recommendation CESR/05-178b published on November 3, 2005, the criteria used for the construction of key performance indicators that management considers necessary to the monitoring the Group performance.

• EBITDA before non ordinary expanses: is obtained by deducting at EBITDA the impact of charges for litigation, expenses related to M&A transaction, and revenue for government grants and restructuring charges.
• EBITDA: calculated by adding the items "Net profit" plus "Amortization, depreciation and impairment losses".
• FREE CASH FLOW FROM OPERATIONS: calculated by adding the items "Net profit" plus "Amortization, depreciation and impairment losses".
• NET WORKING CAPITAL: include items "Trade receivables", "Inventories", current non financial "other receivables" net of "Trade payables" and current non financial "other payables".
• NET NON-CURRENT ASSETS: include non-financial "Non current assets" net of non-financial "Noncurrent liabilities"

Consolidated Financial Statements

Consolidated Income Statement

Thousand of Euro

FY 2016	CONSOLIDATED INCOME STATEMENT	1 Q 2017	1 Q 2016
391,879	Revenues from sales	119,204	114,271
2,589	Other operating incomes	618	600
(12,116)	Change in inventories	1,719	7,579
(198,172)	Raw materials, consumable and goods	(64,842)	(67,670)
(73,039) (71,672)	Personnel expenses Other operating costs and provisions	(19,819) (19,589)	(19,401) (19,636)
(17,600)	Amortization, depreciation and impairment losses	(3,050)	(3,001)
21,869	Operating profit	14,241	12,742
7,105	Financial income	460	342
(6,056)	Financial expenses	(1,199)	(1,960)
3,407	Exchange gains and losses	(371)	(363)
205	Income from/(expenses on) equity investment	46	-
26,530	Profit befor taxes	13,177	10,761
(8,847)	Income taxes	(3,927)	(3,439)
17,683	Net profit (A)	9,250	7,322
(88)	(Profit)/loss attributable to non controlling interests	(125)	(13)
17,595	Net profit attributable to the Group	9,125	7,309
0.108	Basic earnings per share	0.056	0.045
0.108	Diluted earnings per share	0.056	0.045
FY 2016	CONSOLIDATED STATEMENT OF OTHER	1 Q 2017	1 Q 2016
	COMPREHENSIVE INCOME
17,683	Net profit (A)	9,250	7,322
(190)	Profits/(losses) deriving from the conversion of foreign company accounts	271	(1,877)
(137)	Actuarial profits/(losses) deriving from defined benefit plans (*)	0	0
1	Income taxes on OCI (*)	0	0
(326)	Total other components to be included in the comprehensive income statement (B)	271	(1,877)
17,357	Total comprehensive income for the perdiod (A)+(B)	9,521	5,445
(88)	Comprehensive net profit attributable to non controlling	(140)	47
	interests
17,269	Comprehensive net profit attributable to the Group	9,381	5,492

(*) Items will not be classified in the income statement

Statement of consolidated financial position

Thousand of Euro

31.12.2016	ASSETS	31.03.2017	31.03.2016
	Non-current assets
61,651	Property, plant and equipment	62,444	60,128
8,380	Intangible assets	8,509	8,142
52,241	Goodwill	53,977	53,248
230	Equity investments in other companies	230	730
3,955	Equity investments in associates	4,001	-
7,370	Deferred tax assets	6,889	8,203
10,098	Other non current financial assets	9,177	8,063
63	Other receivables	63	72
143,988	Total non-current assets	145,290	138,586
	Current assets
127,362	Inventories	129,205	144,852
96,940	Trade and other receivables	134,992	131,885
4,791	Current tax assets	3,634	4,103
468	Other financial assets	510	658
77	Derivative financial instruments	15	153
32,545	Cash and cash equivalents	21,439	22,050
262,183	Total current assets	289,795	303,701
406,171	TOTAL ASSETS	435,085	442,287

31.12.2016	SHAREHOLDERS' EQUITY AND LIABILITIES	31.03.2017	31.03.2016
	Shareholders' Equity
180,173	Shareholders' Equity of the Group	189,554	172,490
1,495	Non-controlling interest	1,568	1,381
181,668	Total Shareholders' Equity	191,122	173,871
	Non-current liabilities
76,107	Loans and borrowings due to banks and other lenders	69,042	89,409
6,391	Deferred tax liabilities	6,195	5,639
9,137	Employee benefits	8,912	8,944
1,566	Provisions for risks and charges	1,604	1,612
668	Other non-current liabilities	579	912
93,869	Total non-current liabilities	86,332	106,516
	Current liabilities
77,849	Trade and other payables	86,465	87,948
4,184	Current tax liabilities	7,380	5,704
46,770	Loans and borrowings due to banks and other lenders	62,388	65,796
394	Derivative financial instruments	607	800
1,437	Provisions for risks and charges	791	1,652
130,634	Total current liabilities	157,631	161,900
406,171	TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	435,085	442,287

Statement of change in consolidated equity between 31st December 2016 and 31st March 2017.

		SHARE PREMIUM	OTHER RESERVES				RETAINED EARNINGS			EQUITY
Thousand of Euro	SHARE CAPITAL		Legal reserve	Revaluation reserve	Cumulative translation adjustment	Reserve IAS 19	Other reserves	Retained earnings	Net profit of the period	TOTAL GROUP	ATTRIBUTABLE TO MINORITY INTERESTS	TOTAL
Balance at 31.12.2015	42,519	40,529	2,361	1,138	6,882	(832)	30,900	34,649	8,846	166,992	1,496	168,488
Profit reclassification			348					4,410	(8,846)	(4,088)	(89)	(4,177)
Other changes
Net profit for the period					(190)	(136)			17,595	17,269	88	17,357
Balance at 31.12.2016	42,519	40,529	2,709	1,138	6,692	(968)	30,900	39,059	17,595	180,173	1,495	181,668
Profit reclassification								17,595	(17,595)	0	(67)	(67)
Other changes												0
Net profit for the period					256				9,125	9,381	140	9,521
Balance at 31.03.2017	42,519	40,529	2,709	1,138	6,948	(968)	30,900	56,654	9,125	189,554	1,568	191,122
The share capital is show n net of the nominal value of treasury shares in the portfolio amounted to € 104 thousand The share premium reserve is stated net of the premium value of treasury shares amounting to € 1,925 thousand

Comments on the financial statements

This interim report has been prepared under disclosure continuity, comparability, international best practice and transparency to the market. Despite the lack of legal obligation, the Board of Directors of Emak S.p.A. has in fact decided, also because of his membership in the STAR segment of the MTA, to continue in drafting and systematic publication of quarterly reports, in compliance with art. 2.2.3, paragraph 3, letter. a) of the Regulation of Markets organized and managed by Borsa Italiana S.p.A. . The reports are made available to the public in the usual forms of deposit at the registered office, the company website and the "eMarket Storage storage mechanism". What above as of now complies with the imminent entry into force of the provisions laid down in the amended Article. 82-ter of CONSOB Regulation for Issuers resolutions no. And No. 11971/1999. 19770/2016.

In relation to the above, it is confirmed that the accounting principles and policies adopted by the Group in preparing the quarterly consolidated financial statements are consistent with those adopted in the consolidated financial statements at 31 December 2016.

In this interim report IAS 19 is not applied as far as the quantification of changes in actuarial gains accrued in the period is concerned. In addition, in the context of disclosure of synthetic and essential character, are not observed all the detailed requirements of IAS 34, whenever it is assessed that its application does not bring meaningful information.

It should be noted that:

• when it has not been possible to obtain invoices from suppliers for the provision of consulting and other services, a reasonable estimate of these costs has been made on the basis of the stage of completion of the work;
• current and deferred taxes have been calculated using the tax rates applied in the current year in the individual countries of operation;
• the quarterly report is not subject to audit;
• all amounts are expressed in thousands of euros, unless otherwise specified.

31.12.2016	Amount of foreign for 1 Euro	Average 3 M 2017	31.03.2017	Average 3 M 2016	31.03.2016
0.86	GB Pounds (UK)	0.86	0.86	0.77	0.79
7.32	Renminbi (China)	7.34	7.36	7.21	7.35
4.41	Zloty (Poland)	4.32	4.23	4.37	4.26
1.05	Dollar (Usa)	1.06	1.07	1.10	1.14
14.46	Zar (South Africa)	14.08	14.24	17.46	16.79
28.74	Uah (Ukraine)	28.84	28.92	28.35	29.84
3.43	Real (Brazil)	3.35	3.38	4.30	4.12
10.66	Dirham (Morocco)	10.71	10.73	10.82	10.96
21.77	Mexican Pesos (Mexico)	21.62	20.02	19.90	19.59
704.95	Chilean Pesos (Chile)	698.14	711.48	773.17	763.86

Exchange rates used to translation of financial statements in foreign currencies:

Scope of consolidation

Compared to 31 December 2016 there were no changes scope of consolidation.

Compared to 31 March 2016 the consolidated financial statements include the economic and financial data of the newly formed PTC Waterblasting LLC.

Significant, non-recurring transactions or atypical, unusual transactions

Acquisition of A1 Mist Sprayers Resoursces Inc. activities

On January 27, the US subsidiary Valley Industries LLP (segment Pumps and High Pressure Water Jetting) acquired assets, brand and client portfolio of A1 Mist Sprayers Resources for a consideration of \$ 2 million. The acquired business generated in 2016 about \$ 3 million in revenue with an EBITDA of around 20%. The expected contribution of the new business will be lower on the Group's revenues, considering the fact that Valley was already a major supplier of A1 Mist Sprayers Resources. Most significant will be the estimated intake on profitability.

With this transaction, Valley will expand its product offering with a new range of sprayers to apply to quad, and pick up the third point of small tractors. The company will also expand its distribution network from a territorial point of view and distribution channels as well as its technical expertise on the use of the sprayer.

The fair value of assets and liabilities subject to business combination with effect of 27 January 2017, the price paid and the financial cost are detailed below:

		Fair Value	Fair value of
€/000	Book values	adjustments	acquired assets
Non-current assets
Tangible fixed assets	334	-	334
Intangible fixed assets	10	-	10
Current assets
Inventories	94	-	94
Current liabilities
Trade and other payables	(36)	-	(36)
Total net assets acquired	402	-	402
% interest held			100%
Net equity acquired			402
Goodwill			1,472
Post closing acquisition price			1,873
Purchase price paid			1,780
Deferred price			93

Based on the provisions of IFRS 3, the difference between the price paid and the corresponding share of equity has been allocated as goodwill given the coincidence between the fair value and book value of the merged company.

Bagnolo in Piano (RE), May 12, 2017

On behalf of the Board of Directors

The Chairman

Fausto Bellamico

Declaration of the executive in charge of preparing the accounting statements pursuant to the rules of Article 154-bis, paragraph 2 of Legislative Decree no. 58/1998

The executive in charge of preparing corporate accounting statements of EMAK S.p.A. Aimone Burani, based on his own knowledge,

certifies,

in accordance with the second paragraph of Art. 154-bis, of Italian Legislative Decree No. 58 of 24 February 1998, that the accounting information contained in the Quarterly Report at 31 March 2017, examined and approved today by the Board of Directors of the company, corresponds with the accounting documents, ledgers and records.

Faithfully, Bagnolo in Piano (RE), May 12, 2017

Aimone Burani Executive in charge of preparing the accounting statements