Interim Report for Q4 2015

Interpump Group S.p.A. and subsidiaries

Composition of corporate bodies	5
Interpump Group Organization Chart at 31 December 2015	7
Interim Board of Directors' Report:
- Directors' remarks on performance in 2015	11
- Directors' remarks on performance in Q4 2015	23
Financial statements and notes	29

Page

This folder can be consulted at: www.interpumpgroup.it

Interpump Group S.p.A.

Registered office in S. Ilario d'Enza (Reggio Emilia), Via Enrico Fermi, 25 Paid-up Share Capital: 56,617,232.88 euro Reggio Emilia Business Register - Tax Code 11666900151

Board of Directors

Fulvio Montipò Chairman and Chief Executive Officer

Paolo Marinsek Deputy Chairman and Chief Executive Officer

Giuseppe Ferrero Non-executive Director

Franco Garilli (a), (b), (c) Independent Director Lead Independent Director

Marcello Margotto (b) Independent Director

Giancarlo Mocchi Non-executive Director

Stefania Petruccioli (a), (c) Independent Director

Paola Tagliavini (a), (c) Independent Director

Giovanni Tamburi (b) Non-executive Director

Board of Statutory Auditors

Pierluigi De Biasi Chairman

Paolo Scarioni Statutory auditor

Alessandra Tronconi Statutory auditor

Independent Auditors

Reconta Ernst & Young S.p.A.

(a) Member of the Audit and Risks Committee (b) Member of the Remuneration Committee (c) Member of the Related Party Transactions Committee

Interim board of directors' report

Directors' remarks on performance in 2015

KEY EVENTS OF 2015

Performance in 2015 was marked by a considerable increase in sales, EBITDA and net profit, with the achievement by the Interpump Group of record results once again.

Sales were up by 33.2% compared to 2014 (+8.9% like for like and +1.3% net also of exchange differences). The business sector analysis shows a 41.4% increase in sales in the Hydraulic Sector (+5.0% like for like and -1.0% net also of exchange differences) and a 21.3% growth of sales in the Water Jetting Sector (+14.6% like for like and +4.7% net also of exchange differences).

In geographical terms, growth in Europe including Italy was 33.7%, with 35.2% in North America, 37.3% in the Far East and Oceania and 22.2% in the Rest of the World. The geographical breakdown shows like for like growth of 4.0% in Europe (including Italy), 18.0% in North America, 4.8% in the Far East and Oceania and 6.8% in the Rest of the World.

EBITDA reached €180.3m, equivalent to 20.1% of sales. In 2014, EBITDA was €136.1m (20.3% of sales). The year on year growth of EBITDA thus amounts to 32.4%. EBITDA was 10.6% higher like for like, reaching €150.5m or 20.6% of sales, up by 0.3 percentage points.

Free cash flow more than doubled to €85.2m (€38.3m in 2014).

Net profit of €117.0m was more than double the €57.7m recorded in 2014.

Minority interests in Hydrocontrol S.p.A. and IMM Hydraulics S.p.A. were acquired in 2015. On 27 April Interpump Hydraulics S.p.A. acquired the remaining 16% stake in Hydrocontrol S.p.A. further to the exercise of the related put options by its minority shareholders. On 4 June Interpump Hydraulics S.p.A. acquired the remaining 40% stake in IMM Hydraulics S.p.A. further to the exercise of the related put options by the minority shareholder of IMM Hydraulics S.p.A. These two transactions generated financial income of €32.0m due to the lower price paid compared to the amount booked under debt for the acquisition of equity investments, which reflected the measurement of put options granted to sellers. This income arose because the put options had been measured on the basis of projections at 2018 and 2020, these being the dates from which the put options could be exercised and consequently envisaged growth of EBITDA and higher cash generation. The fact that acquisition of the two minority stakes has been brought forward is allowing the acceleration of internal Group synergies and a high level of simplification, resulting in appreciable cost savings.

In this regard, our company's operations in India and South Africa are currently being subjected to a rationalization process. In addition, the business in Brazil based on the merger of the following four companies became operational during the year: Interpump Hydraulics do Brasil, Takarada Industria e Comercio, Walvoil Fluid do Brasil and Osper, with this last company having been acquired on 28 August 2015. The four companies have been concentrated into a single facility, resulting in significant levels of synergy in industrial, logistic and administrative terms, and the overall rationalization of all operations. In addition, Interpump Hydraulics Brasil (the company formed through the merger) is now the Brazilian leader in the power take-offs sector, benefiting also from access to the Group's wide range of products in the Hydraulic Sector. The process of rationalization of the Group's structure and exploitation of potential commercial synergies will proceed over the coming years also in the other countries in which we operate.

2015 saw the first-time consolidation of the Walvoil Group (Hydraulic Sector) acquired on 15 January 2015, Inoxihp (Water Jetting Sector) acquired on 17 March 2015, but consolidated for the full year due to its modest size, Bertoli S.r.l. (Water Jetting Sector), acquired on 22 May 2015 and consolidated for eight months, and Osper (Hydraulic Sector), acquired on 28 August 2015 and consolidated for four months.

For a commentary on the Walvoil, Inoxihp, Bertoli and Osper acquisitions we invite you to refer to the contents of the 2014 Annual Financial Report in the heading concerning events occurring after year end, and the Interim Reports for Q2 and Q3 2015.

(€/000)	2015	2014
Net sales	894,928	671,999
Cost of products sold	(577,310)	(426,585)
Gross industrial margin	317,618	245,414
% on net sales	35.5%	36.5%
Other operating revenues	13,133	12,563
Distribution costs	(84,321)	(68,074)
General and administrative expenses	(105,670)	(80,517)
Other operating costs	(3,864)	(5,019)
EBIT	136,896	104,367
% on net sales	15.3%	15.5%
Financial income	43,321	8,144
Financial expenses	(16,011)	(19,504)
Adjustment of the value of investments carried at equity	(262)	102
Profit for the year before taxes	163,944	93,109
Income taxes	(46,955)	(35,367)
Consolidated net profit for the year	116,989	57,742
% on net sales	13.1%	8.6%
Due to:
Parent company's shareholders	116,322	56,936
Subsidiaries' minority shareholders	667	806
Consolidated profit for the year	116,989	57,742

EBITDA	180,258	136,106
% on net sales	20.1%	20.3%
Shareholders' equity	621,318	466,550
Net debt	254,987	151,969
Payables for the acquisition of investments	23,209	74,075
Capital employed	899,514	692,594
ROCE	15.2%	15.1%
ROE	18.8%	12.4%
Basic earnings per share	1.089	0.541
EBITDA = EBIT + Depreciation/Amortization + Provisions

Consolidated income statement for the year

ROCE = EBIT / Capital employed ROE = Consolidated profit for the year / Consolidated shareholders' equity

* = Since EBITDA is not identified as accounting measure in the context of the Italian accounting principles nor in the context of the international accounting standards (IAS/IFRS), the quantitative determination of EBITDA may not be unequivocal. EBITDA is a parameter used by company management to monitor and assess the organization's operating performance. The management considers EBITDA to be a significant parameter for assessment of the company's performance since it is not influenced by the effects of the different criteria used to determine taxable income, the amount and characteristics of capital employed and the related depreciation policies. The criterion for the determination of EBITDA applied by the company may differ from that used by other companies/groups and hence the value of this parameter may not be directly comparable with the EBITDA values disclosed by other entities.

NET SALES

Net sales in 2015 totaled €894.9m, up by 33.2% from €672.0m in 2014 (+8.9% like for like and +1.3% net of exchange differences).

Breakdown of sales by business sector and geographical area:

		Rest of	North	Far East and	Rest of the
(€/000)	Italy	Europe	America	Oceania	World	Total
2015
Hydraulic Sector	105,509	194,815	151,083	40,004	68,860	560,271
Water Jetting Sector	30,400	91,688	142,303	44,954	25,312	334,657
Total	135,909	286,503	293,386	84,958	94,172	894,928
2014
Hydraulic Sector	72,619	145,709	98,602	21,869	57,405	396,204
Water Jetting Sector	19,159	78,554	118,436	39,993	19,653	275,795
Total	91,778	224,263	217,038	61,862	77,058	671,999
2015/2014 percentage changes
Hydraulic Sector	+45.3%	+33.7%	+53.2%	+82.9%	+20.0%	+41.4%
Water Jetting Sector	+58.7%	+16.7%	+20.2%	+12.4%	+28.8%	+21.3%
Total	+48.1%	+27.8%	+35.2%	+37.3%	+22.2%	+33.2%
2015/2014 like for like changes (%)
Hydraulic Sector	+9.1%	-3.2%	+16.8%	-1.4%	+2.6%	+5.0%
Water Jetting Sector	+13.2%	+10.4%	+19.0%	+8.3%	+19.1%	+14.6%
Total	+10.0%	+1.6%	+18.0%	+4.8%	+6.8%	+8.9%

The like for like analysis net of exchange differences shows a decline of 1.0% in the Hydraulic Sector and growth of 4.7% in the Water Jetting Sector.

PROFITABILITY

The cost of sales accounted for 64.5% of turnover (63.5% in 2014). Production costs, which totaled €234.8m (€169.1m in 2014, which did not include the costs of the Walvoil Group, Inoxihp, Bertoli and Osper), accounted for 26.2% of sales (25.2% in 2014). The purchase cost of raw materials and components sourced on the market, including changes in inventories, was €342.6m (€257.5m in 2014, which however did not include the costs of the Walvoil Group, Inoxihp, Bertoli and Osper). The incidence of purchase costs, including changes in inventories, was 38.3%, as 2014.

On a like for like basis the percentage incidences of production costs and purchase costs in 2015 were respectively 24.5% and 38.7% (down overall by 0.3 percentage points). The percentage increase in the cost of sales from 63.5% in 2014 to 64.5% in 2015 is primarily due to a product mix effect related to the newly consolidated companies.

Like for like distribution costs were 7.9% higher than in 2014 (-0.1% net of exchange differences), while the incidence on sales fell by 0.1 percentage points with respect to 2014. With the inclusion of Walvoil, Inoxihp, Bertoli and Osper the incidence fell by 0.7 percentage points.

Like for like general and administrative expenses were 9.6% higher than in 2014 (+3.6% net of exchange differences), with a 0.1 percentage point increase in the incidence on sales with respect to 2014. With the inclusion of Walvoil, Inoxihp, Bertoli and Osper the incidence fell by 0.2 percentage points with respect to 2014.

Total payroll costs were €218.2m (€157.7m in 2014, which however did not include the Walvoil Group, Inoxihp, Bertoli and Osper). Like for like payroll costs rose by 8.5% (+2.8% net of exchange differences) due to a 6.3% per capita cost increase (+0.7% net of exchange differences) and a rise of 75 in the average headcount. The total number of Group employees in 2015 averaged 4,830 (3,650 like for like) compared to 3,575 in 2014. The like for like increase in the average headcount in 2015 breaks down as follows: 5 in Europe, 40 in the US and 30 in the Rest of the World (Brazil, China, India, Chile, Australia, South Korea, South Africa and the UAE).

EBITDA totaled €180.3m (20.1% of sales) compared to €136.1m in 2014, which represented 20.3% of sales, reflecting a 32.4% increase. Like for like EBITDA was up by 10.6% to €150.5m or 20.6% of sales, increasing margins by 0.3 percentage points. The following table shows EBITDA for each business sector:

	2015	% on	2014	% on
	€/000	total	€/000	total	Growth/
		sales*		sales*	Contraction
Hydraulic Sector	96,605	17.2%	69,366	17.5%	+39.3%
Water Jetting Sector	83,671	24.9%	66,701	24.1%	+25.4%
Other Revenues Sector	(18)	n.s.	39	n.s.	n.s.
Total	180,258	20.1%	136,106	20.3%	+32.4%

* = Total sales include also include sales to other group companies, while the sales analyzed previously are exclusively those external to the group (see Note 2 to the Consolidated Financial Statements at 31 December 2015). Therefore, for the purposes of comparability the percentage is calculated on total sales rather than the sales shown earlier.

Like for like Hydraulic Sector EBITDA was up by 4.1% (17.4% of net sales). Like for like Water Jetting Sector EBITDA was up by 17.4% (24.7% of net sales).

EBIT was €136.9m (15.3% of sales) compared to €104.4m in 2014 (15.5% of sales), reflecting an increase of 31.2%. EBIT was 11.3% higher like for like, reaching €116.2m or 15.9% of sales, with an increase of 0.4 percentage points.

Finance management generated net income of €27.3m (net financial expenses of €11.4m in 2014). 2015 saw the generation of income due to the lower payments made with respect to debts for commitments to acquire residual stakes in subsidiaries in the amount of €32.0m, as described at the beginning of this report. The net financial expenses incurred in 2014, on the other hand, included €8.2m relating to the adjustment of payables following the purchase of equity investments and the related interest.

The effective tax rate was 29.0% (38.0% in 2014 – 35.2% net of the non-deductible financial expenses totaling €8.2m mentioned above). The comparison is influenced by the inclusion, in 2015 only, of income on the adjustment of the expected debt for commitments to acquire residual stakes in subsidiaries as discussed above, originating exclusively in the consolidated financial statements and hence not taxable. Net of this non-taxable income and the deferred tax assets derecognized in the year, the tax rate for 2015 would have been 34.8%. The reduction compared to 2014 is mainly due to changes in Italian legislation concerning the total deductibility of payroll costs from the IRAP tax base, which led to a tax saving of €2.0m.

Net profit of €117.0m was more than double the amount for 2014 (€57.7m). A similar trend was followed by basic earnings per share, which rose from 0.541 euro in 2014 to 1.089 euro in 2015.

Capital employed increased from €692.6m at 31 December 2014 to €899.5m at 31 December 2015. The rise in capital employed is mainly due to the consolidation of Walvoil, Inoxihp, Bertoli and Osper, which produced a €185.8m increase, and the effect of revaluation of foreign currencies against the euro, which led to an increase of €18.8m. ROCE stood at 15.2% (15.1% in 2014). ROE was 18.8% (12.4% in 2014).

CASH FLOW

The change in net financial indebtedness can be broken down as follows:

	2015	2014
	€/000	€/000
Opening net financial position	(151,969)	(88,684)
Adjustment: opening net cash position of companies not consolidated
line by line at the end of the prior year (a)	435	(158)
Adjusted opening net financial position	(151,534)	(88,842)
Cash flow from operations	121,742	95,813
Cash flow generated (absorbed) by the management of commercial working capital	(13,621)	(21,519)
Cash flow generated (absorbed) by other current assets and liabilities	5,733	(2,236)
Capital expenditure on tangible fixed assets	(27,653)	(32,654)
Proceeds from sales of tangible fixed assets	1,594	1,512
Increase in other intangible fixed assets	(3,054)	(3,000)
Received financial income	714	637
Other	(209)	(263)
Free cash flow	85,246	38,290

	2015	2014
	€/000	€/000
Free cash flow	85,246	38,290
Acquisition of investments, including received debt
and net of treasury stock assigned	(145,243)	(53,266)
Receipts for the sale of investments and lines of business	746	796
Dividends paid	(20,390)	(18,166)
Outlays for the purchase of treasury stock	(32,709)	(38,299)
Proceeds from the sale of treasury stock to beneficiaries of stock options	8,166	4,626
Change in other financial assets	(1)	1,017
Loan repayments from (disbursals to) non-consolidated subsidiaries	-	21
Cash flow generated (used)	(104,185)	(64,981)
Exchange rate differences	732	1,854
Net financial position at year end	(254,987)	(151,969)

(a) = in 2015 this concerns Hammelmann Bombas e Sistemas Ltda and Interpump Hydraulics Middle East FZCO (see Note 1 to the Financial Statements and notes at 31 December 2015). Conversely, in 2014 the subjects were HS Penta Africa PtY Ltd and Galtech Canada Inc.

Net liquidity generated by operations totaled €121.7m (€95.8m in 2014), reflecting an increase of 27.1%. There was a considerable increase in free cash flow during 2015 to €85.2m, which was more than double the figure recorded 2014 (€38.3m).

The net financial position, excluding the debts and commitments illustrated below, can be broken down as follows:

	31/12/2015	31/12/2014	01/01/2014
	€/000	€/000	€/000
Cash and cash equivalents	135,130	87,159	105,312
Bank payables (advances and STC amounts)	(5,735)	(27,770)	(20,932)
Interest-bearing financial payables (current portion)	(83,833)	(64,298)	(61,371)
Interest-bearing financial payables (non-current portion)	(300,549)	(147,060)	(111,693)
Total	(254,987)	(151,969)	(88,684)

The Group also has contractual commitments for the purchase of residual shareholdings in subsidiaries totaling €23.2 million (€74.1 million at 31 December 2014). €4.9m of the foregoing amounts concerns the acquisition of equity investments (€7.4m at 31 December 2014) and €18.3m is related to contractual agreements for the acquisition of residual interests in subsidiaries (€66.6m at 31 December 2014). The change with respect to the prior period is due on the one hand to the exercise of Hydrocontrol and IMM Hydraulics options and, on the other hand, to the new put options related to the acquisition of Inoxihp.

CAPITAL EXPENDITURE

Expenditure on property, plant and equipment totaled €112.4m, of which €73.9m for the acquisition of equity investments (€81.2m in 2014, of which €39.8m for the acquisition of equity investments). It should be noted that the companies belonging to the Very-High Pressure Systems business segment classify the increase in machinery manufactured and hired out to customers under tangible fixed assets (€11.2m at 31 December 2015 and €7.2m at 31 December 2014). Net of these latter amounts and the investment via acquisitions, capital expenditure in the strictest sense amounted to €27.3m in 2015 (€34.2m in 2014) and mainly refers to the normal

renewal and modernization of plant, machinery and equipment, with the exception of €2.3m, related in 2015 to the construction of new plants in Bulgaria, Romania and India and to the expansion of a building owned by the Group Parent (€10.9m in 2014 related mainly to the Hammelmann building). The difference with respect to the expenditure recorded in the cash flow statement is due to the dynamic of payments.

The increases in intangible fixed assets totaled €15.2m, of which €12.1m from the acquisition of equity investments (€6.2m in 2014, of which €2.8m from the acquisition of equity investments) and refer mainly to the allocation of the price of acquisitions to trademarks (€11.7m in 2015) and to investment for the development of new products.

INTERCOMPANY AND RELATED PARTY TRANSACTIONS

With regard to transactions entered into with related parties, including intercompany transactions, these cannot be defined as either atypical or unusual, inasmuch as they form part of the normal course of activities of the Group companies. These transactions are regulated at arm's length conditions, taking into account the characteristics of the assets transferred and services rendered. Information on transactions carried out with related parties is given in Note 9 of the Consolidated Financial statements at 31 December 2015.

CHANGES IN THE GROUP STRUCTURE IN 2015

In addition to the transactions for the acquisition of the Walvoil Group and Inoxihp, as already fully disclosed in the 2014 Annual Financial Report, the Group structure underwent the following changes:

on 16 January 2015 HS Penta S.p.A. acquired an additional 10% stake in HS Penta Africa for €136k;
Interpump Hydraulics Perù S.a.c., with headquarters in Lima, was incorporated on 8 April 2015 in order to create a direct Group presence on the important Peruvian market;
on 27 April 2015 Interpump Hydraulics S.p.A. acquired the remaining 16% stake in Hydrocontrol S.p.A. further to the exercise of the related put options by the minority shareholders of Hydrocontrol S.p.A. The exercise resulted in the Group divesting 741,184 treasury shares to cover the price;
on 22 May 2015 Interpump Group S.p.A. acquired total control of Bertoli S.r.l., based in the province of Parma; Bertoli is one of the key world players on the market for the design and construction of high pressure homogenizers with piston pumps, primarily for the food sector and supplied also to customers operating in the chemicals and cosmetics sectors. Bertoli's 2014 sales totaled €11.2m, while EBITDA was booked at €2.3m (20.7% of sales). The business was acquired at the price of €7.3m. With the acquisition of Bertoli, a leading manufacturer in the niche market for homogenizers, Interpump enters the market of pumps for the food sector thereby strengthening our undisputed world leadership in the production of high pressure pumps. The acquisition is the precondition for the generation of major production and commercial synergies.
on 4 June 2015 Interpump Hydraulics S.p.A. acquired the remaining 40% stake in IMM Hydraulics S.p.A. further to the early exercise of the related put options by the minority shareholder of IMM Hydraulics S.p.A. The put options exercise led to a €22.6m outlay for the Group;
on 6 July 2015 the merger of Interpump Hydraulics International S.p.A. in Interpump Hydraulics S.p.A. entered into effect;
an agreement with the ex-shareholders of Walvoil S.p.A. was signed on 20 July 2015 defining the adjustment of the company's acquisition price, which was established on a provisional basis at the closing date of 15 January 2015. The final price was set at €116.1m. The balance of €16.1m was therefore paid on 5 August;
on 30 July 2015 Hydrocontrol S.p.A. acquired the remaining stakes in Hydrocontrol Inc. for €109k;
28 August 2015 saw the acquisition of the entire capital stock of the Brazilian company Osper. The agreed price for the transaction was BRL 21.7m (approximately €5.4m). The price paid at the closing date was BRL 10.5m (around €2.6m). The remaining BRL 11.2m (about €2.8m) will be paid as follows: BRL 1.2m in 60 monthly installments of BRL 20k, while BRL 10m constitute the guarantee as an indemnity against potential liabilities that may arise in the acquired company and will be paid, net of any indemnity amounts, within 15 August 2021. Osper's 2014 sales totaled BRL 16.2m, with EBITDA of BRL €2.6m, equivalent to 16.2% of sales;
on 29 September 2015 a resolution was passed to merge HS Penta S.p.A. in Interpump Hydraulics S.p.A., in the drive for integration among Group companies and in order to exploit the commercial synergies identified between the two companies. This merger took effect from 4 January 2016;
on 30 September 2015 the merger between Interpump Hydraulics do Brasil, Takarada Industria e Comercio, Walvoil Fluid do Brasil and Osper became operational in Brazil;
on 1 November 2015 a resolution was passed to merge General Technology S.r.l. and Interpump Engineering S.r.l. in Interpump Group S.p.A., the accounting and tax effects of the merger are applicable from 1 January 2015;
on 10 November 2015 a resolution was passed to merge Bertoli S.r.l. in Interpump Group S.p.A., with the intention of exploiting all the production and commercial synergies identified between the two companies. Bertoli's activities are being transferred to the Parent Company's factories during 2016, with savings on all operating costs. The merger will become operational during the first half of 2016;
on 24 November 2015 Contarini Leopoldo S.r.l. purchased the residual 10% interest in Unidrò for €350k by the assignment of 24,169 treasury shares in settlement;
on 1 December 2015 HS Penta S.p.A. acquired the residual 10% interest in HS Penta Africa for €160k.

EVENTS OCCURRING AFTER THE CLOSE OF THE YEAR

No atypical or unusual transactions have been carried out subsequent to 31 December 2015 that would call for changes to the consolidated financial statements at 31 December 2015.

The entire equity interest in Endeavour (Hydralok brand), based in Bath, England, was acquired on 22 January 2016. This company manufactures machinery and systems for joining hydraulic pipes. The purchase is part of a program to strengthen and rationalize Interpump's direct commercial presence in the various international markets. Possession of a company that manufactures crimping systems enables Interpump not only to sell them, but also to equip all international branches with the equipment necessary to commercialize joined hydraulic pipes, which is an important after sales service. During the year ended 31 March 2015, Endeavour reported sales of about GBP 1.9m (about €2.5m), with an EBITDA of about 16% of sales. Via IMM Hydraulics UK, Interpump paid GBP 1m for Endeavour, including cash of GBP 200k.

This price may be adjusted by a maximum of GBP 300k with reference to EBITDA at 31 March 2016.

Directors' remarks on performance in Q4 2015

Q4 consolidated income statements

(€/000)	2015	2014
Net sales	213,050	161,934
Cost of products sold	(141,045)	(103,635)
Gross industrial margin	72,005	58,299
% on net sales	33.8%	36.0%
Other operating revenues	3,619	4,172
Distribution costs	(21,576)	(17,617)
General and administrative expenses	(26,356)	(21,608)
Other operating costs	(1,629)	(1,916)
EBIT	26,063	21,330
% on net sales	12.2%	13.2%
Financial income	2,542	2,090
Financial expenses	(3,580)	(9,509)
Adjustment of the value of investments carried at equity	(69)	315
Profit for the year before taxes	24,956	14,226
Income taxes	(9,310)	(6,574)
Consolidated profit for the year	15,646	7,652
% on net sales	7.3%	4.7%
Due to:
Parent company's shareholders	15,358	7,560
Subsidiaries' minority shareholders	288	92
Consolidated profit for the year	15,646	7,652

EBITDA % on net sales	38,945 18.3%	30,421 18.8%

Shareholders' equity	621,318	466,550
Net debt	254,987	151,969
Payables for the acquisition of investments Capital employed	23,209 899,514	74,075 692,594

Unannualized ROCE	2.9%	3.1%
Unannualized ROE	2.5%	1.6%
Basic earnings per share	0.144	0.073

EBITDA = EBIT + Depreciation/Amortization + Provisions

ROCE = EBIT / Capital employed

ROE = Consolidated profit for the year / Consolidated shareholders' equity

The scope of consolidation in Q4 2015 includes the Walvoil Group, Inoxihp, and Bertoli and Osper, none of which were present in Q4 2014. The notes to this interim board of directors' report provide like for like information.

NET SALES

Net sales in Q4 2015 totaled €213.0m, up by 31.6% with respect to sales in 2014 (€161.9m). On a like for like basis growth was 7.6% (+2.7% net also of exchange differences).

The following table gives a breakdown of net sales in Q4 by business sector and geographical area:

		Rest of	North Far East and Rest of the
(€/000)	Italy	Europe	America	Oceania	World	Total
Q4 2015
Hydraulic Sector	25,865	45,486	34,313	9,419	15,168	130,251
Water Jetting Sector	6,736	22,789	34,366	12,655	6,253	82,799
Total	32,601	68,275	68,679	22,074	21,421	213,050
Q4 2014
Hydraulic Sector	17,791	32,753	25,617	5,427	13,160	94,748
Water Jetting Sector	5,216	20,021	26,410	10,591	4,948	67,186
Total	23,007	52,774	52,027	16,018	18,108	161,934
2015/2014 percentage changes
Hydraulic Sector	+45.4%	+38.9%	+33.9%	+73.6%	+15.3%	+37.5%
Water Jetting Sector	+29.1%	+13.8%	+30.1%	+19.5%	+26.4%	+23.2%
Total	+41.7%	+29.4%	+32.0%	+37.8%	+18.3%	+31.6%
2015/2014 like for like changes (%)
Hydraulic Sector	+10.4%	+0.6%	+0.7%	+1.0%	+0.3%	+2.5%
Water Jetting Sector	-20.4%	+4.8%	+29.7%	+15.9%	+12.2%	+14.9%
Total	+3.4%	+2.2%	+15.4%	+10.8%	+3.6%	+7.6%

The like for like analysis net of exchange differences shows a decline of 0.9% in the Hydraulic Sector and 7.7% growth in the Water Jetting Sector.

PROFITABILITY

The cost of sales accounted for 66.2% of turnover (64.0% in Q4 2014). Production costs, which totaled €58.3m in Q4 2014 (€43.5m in Q4 2014, which did not include the costs of the Walvoil Group, Inoxihp, Bertoli and Osper), accounted for 27.4% of sales (26.8% in 2014). Like for like production costs were substantially unchanged with respect to Q4 2014 (-0.1%), with an 1.9 percentage point fall in their incidence on sales. The purchase cost of raw materials and components sourced on the market, including changes in inventories, was €82.7m (€60.2m in the equivalent period of 2014, which however did not include the costs of the Walvoil Group, Inoxihp, Bertoli and Osper). The percent incidence of purchase costs, including the change in inventories, was 38.8% compared to 37.2% in Q4 2014 (the percent incidence of like for like purchase costs is 39.4%).

Distribution costs were 6.2% higher like for like (+1.3% net of exchange differences) with respect to Q4 2014, with an incidence on sales that fell by 0.2 percentage points.

General and administrative expenses, again like for like, increased by 1.3% (-2.4% net of exchange differences) with respect to Q4 2014, while the incidence on sales was 0.7% lower.

EBITDA totaled €38.9m (18.3% of sales) compared to €30.4m in Q4 2014, which represented 18.8% of sales, reflecting a 28.0% increase. On a like for like basis EBITDA grew by 7.5% to €32.7m (18.8% of sales). The following table shows EBITDA for each business sector:

	Q4 2015	% on	Q4 2014	% on	Growth/
	€/000	total	€/000	total	Contraction
		sales*		sales*
Hydraulic Sector	19,190	14.7%	14,201	15.0%	+35.1%
Water Jetting Sector	19,765	23.7%	16,173	24.0%	+22.2%
Other Revenues Sector	(10)	n.s.	47	n.s.	n.s.
Total	38,945	18.3%	30,421	18.8%	+28.0%

Like for like Hydraulic Sector EBITDA totaled €14.3m (14.8% of net sales). Like for like EBITDA for the Water Jetting Sector was €18.4m (23.7% of sales), reflecting an increase of 13.7%.

EBIT stood at €26.1m (12.2% of sales) compared to €21.3m in Q4 2014 (13.2% of sales), reflecting an increase of 22.2%. Like for like EBIT increased by 11.1%, reaching €23.7m or 13.6% of sales, up by 0.4 percentage points.

Financing management generated net financial expenses of €1.0m (€7.4m in Q4 2014). The net financial expenses incurred in 2014, on the other hand, included €6.4m relating to the adjustment of payables following the purchase of equity investments.

Q4 closed with consolidated net profit of €15.6m (€7.7m in Q4 2014), reflecting a rise of 104.5%.

Basic earnings per share were €0.144 (€0.073 in Q4 2014).

Sant'Ilario d'Enza (RE), 12 February 2016

For the Board of Directors Fulvio Montipò Chairman and Chief Executive Officer

The manager responsible for preparing company accounting documents, Carlo Banci, declares, pursuant to the terms of section 2 article 154-(2) of the Italian Consolidated Finance Act, that the accounting disclosures in this document correspond to the documentary evidence, the company books and the accounting entries.

Sant'Ilario d'Enza (RE), 12 February 2016

Carlo Banci Manager responsible for preparing company accounting documents

Financial statements and notes

Consolidated balance sheet

(€/000)	Notes	31/12/2015	31/12/2014
ASSETS
Current assets
Cash and cash equivalents		135,130	87,159
Trade receivables		178,799	135,634
Inventories	4	238,637	182,463
Tax receivables		15,554	10,477
Derivative financial instruments		2	-
Other current assets		7,807	6,855
Total current assets		575,929	422,588
Non-current assets
Property, plant and equipment	5	286,066	209,073
Goodwill	1	347,388	279,373
Other intangible assets		33,193	24,649
Other financial assets		1,025	994
Tax receivables		1,934	2,456
Deferred tax assets		26,276	22,035
Other non-current assets		1,209	1,380
Total non-current assets		697,091	539,960
Assets held for sale		-	615
Total assets		1,273,020	963,163

(€/000)	Notes	31/12/2015	31/12/2014
LIABILITIES
Current liabilities
Trade payables		94,098	80,273
Payables to banks		5,735	27,770
Interest-bearing financial payables (current portion)		83,833	64,298
Derivative financial instruments		77	169
Tax payables		21,308	11,665
Other current liabilities		48,840	38,123
Provisions for risks and charges		4,423	4,162
Total current liabilities		258,314	226,460
Non-current liabilities
Interest-bearing financial payables		300,549	147,060
Liabilities for employee benefits		17,264	14,940
Deferred tax liabilities		50,875	33,436
Other non-current liabilities		22,017	72,605
Provisions for risks and charges		2,683	1,949
Total non-current liabilities		393,388	269,990
Liabilities held for sale		-	163
Total liabilities		651,702	496,613
SHAREHOLDERS' EQUITY	6
Share capital		56,032	53,871
Legal reserve		11,323	11,323
Share premium reserve		136,794	101,237
Reserve for valuation of hedging derivatives
at fair value		(13)	(19)
Reserve for restatement of defined benefit plans		(3,501)	(5,273)
Translation provision		22,655	3,809
Other reserves		392,557	295,747
Group shareholders' equity		615,847	460,695
Minority interests		5,471	5,855
Total shareholders' equity		621,318	466,550
Total shareholders' equity and liabilities		1,273,020	963,163

Consolidated income statement for the year

(€/000)	Notes	2015	2014
Net sales		894,928	671,999
Cost of products sold		(577,310)	(426,585)
Gross industrial margin		317,618	245,414
Other net revenues		13,133	12,563
Distribution costs		(84,321)	(68,074)
General and administrative expenses		(105,670)	(80,517)
Other operating costs		(3,864)	(5,019)
Ordinary profit before financial expenses		136,896	104,367
Financial income	7	43,321	8,144
Financial expenses	7	(16,011)	(19,504)
Adjustment of the value of investments carried at equity		(262)	102
Profit for the year before taxes		163,944	93,109
Income taxes		(46,955)	(35,367)
Consolidated profit for the year		116,989	57,742
Due to:
Parent company's shareholders		116,322	56,936
Subsidiaries' minority shareholders		667	806
Consolidated profit for the year		116,989	57,742

Basic earnings per share	8	1.089	0.541
Diluted earnings per share	8	1.074	0.531

Comprehensive consolidated income statements for the year

(€/000)	2015	2014
Consolidated profit for the year (A)	116,989	57,742
Other comprehensive profit (loss) that will be subsequently reclassified in consolidated profit for the year
Accounting of interest rate hedging derivatives recorded in accordance with the cash flow hedging method:
- Profit (Loss) on derivatives for the year - Minus: Adjustment for reclassification of profits (losses) to the income statement	- -	- -
- Minus: Adjustment for recognition of fair value to reserves in the prior year	-	50
Total	-	50
Accounting of exchange risk derivative hedges recorded in accordance with the cash flow hedging method:
- Profit (Loss) on derivatives for the year - Minus: Adjustment for reclassification of profits (losses) to the	(19)	(27)
income statement - Minus: Adjustment for recognition of fair value to reserves in the	-	(14)
prior year Total	27 8	- (41)
Profits (Losses) arising from the translation to euro of the financial statements of foreign companies	18,992	23,275
Profits (Losses) of companies carried at equity	(16)	68
Related taxes	(2)	(1)
Total other comprehensive profit (loss) that will be subsequently reclassified in consolidated profit for the year, net of the tax effect (B)	18,982	23,351
Other comprehensive profit (loss) that will not be subsequently reclassified in consolidated profit for the year
Profit (loss) deriving from the restatement of defined benefit plans	2,479	(2,640)
Related taxes	(683)	726
Total Other comprehensive profit (loss) that will not be subsequently reclassified in consolidated profit for the year,
net of the tax effect (C)	1,796	(1,914)
Comprehensive consolidated profit for the year (A) + (B) + (C)	137,767	79,179
Due to:
Parent company's shareholders Subsidiaries' minority shareholders	136,946 821	77,960 1,219
Comprehensive consolidated profit for the year (A) + (B) + (C)	137,767	79,179

(€/000)		2015	2014
Net sales		213,050	161,934
Cost of products sold		(141,045)	(103,635)
Gross industrial margin		72,005	58,299
Other net revenues		3,619	4,172
Distribution costs		(21,576)	(17,617)
General and administrative expenses		(26,356)	(21,608)
Other operating costs		(1,629)	(1,916)
Ordinary profit before financial expenses		26,063	21,330
Financial income	7	2,542	2,090
Financial expenses	7	(3,580)	(9,509)
Adjustment of the value of investments carried at equity		(69)	315
Profit for the period before taxes		24,956	14,226
Income taxes		(9,310)	(6,574)
Consolidated net profit for the period		15,646	7,652
Due to:
Parent company's shareholders		15,358	7,560
Subsidiaries' minority shareholders		288	92
Consolidated net profit for the period		15,646	7,652
Basic earnings per share	8	0.144	0.073
Diluted earnings per share	8	0.142	0.071

Q4 consolidated income statements

Comprehensive consolidated income statement for Q4

(€/000)	2015	2014
Consolidated profit for the period (A)	15,646	7,652
Other comprehensive profit (loss) that will be subsequently reclassified in consolidated profit for the period
Accounting of interest rate hedging derivatives recorded in accordance with the cash flow hedging method:
- Profit (Loss) on derivative financial instruments for the period - Minus: Adjustment for reclassification of profits (losses) to the income statement	- -	- -
- Minus: Adjustment for recognition of fair value to reserves in the prior period	-	-
Total	-	-
Accounting of exchange risk derivative hedges recorded in accordance with the cash flow hedging method:
- Profit (Loss) on derivative financial instruments for the period	(25)	(18)
- Minus: Adjustment for reclassification of profits (losses) to the income statement	-	-
- Minus: Adjustment for recognition of fair value to reserves in the prior period	-	-
Total	(25)	(18)
Profits (Losses) arising from the translation to euro of the financial statements of foreign companies	7,514	6,127
Profits (Losses) of companies carried at equity	4	24
Related taxes	8	5
Total other profit (loss) that will be subsequently reclassified in consolidated profit for the period, net of the
tax effect (B)	7,501	6,138
Other comprehensive profit (loss) that will not be subsequently reclassified in consolidated profit for the period, net of tax effect (C)
Profit (loss) deriving from the restatement of defined benefit plans	2,479	(2,640)
Related taxes	(683)	726
Total Other comprehensive profit (loss) that will not be subsequently reclassified in consolidated profit for the period,
net of the tax effect (C)	1,796	(1,914)
Comprehensive consolidated profit for the period (A) + (B) + (C)	24,943	11,876
Due to:
Parent company's shareholders	24,598	11,691
Subsidiaries' minority shareholders	345	185
Comprehensive consolidated profit for the period	24,943	11,876

Consolidated cash flow statement for the year

(€/000)	2015	2014
Cash flow from operating activities
Pre-tax profit	163,944	93,109
Adjustments for non-cash items:
Capital losses (Capital gains) from the sale of fixed assets	(3,076)	(1,519)
Capital losses (Capital gains) from the sale of business divisions and equity investments	-	(406)
Amortization and depreciation, impairment and reinstatement of value	41,886	30,085
Costs ascribed to the income statement relative to stock options that do not involve monetary outflows for the Group	1,370	1,370
Loss (Profit) from investments	262	(102)
Net change in risk funds and allocations for employee benefits	(973)	(147)
Outlays for tangible fixed assets destined for hire	(11,201)	(7,180)
Proceeds from the sale of fixed assets granted for hire	7,643	3,792
Financial expenses (Income), net	(27,310)	11,360
	172,545	130,362
(Increase) decrease in trade receivables and other current assets	2,105	(5,503)
(Increase) decrease in inventories	3,412	(14,145)
Increase (decrease) in trade payables and other current liabilities	(13,405)	(4,107)
Interest paid	(5,838)	(5,823)
Currency exchange gains realized	2,701	1,185
Taxes paid	(47,666)	(29,911)
Net cash from operating activities	113,854	72,058
Cash flows from investing activities
Outlay for the acquisition of investments, net of received cash and including treasury stock assigned	(176,227)	(47,784)
Disposal of investments and lines of business including transferred cash	746	796
Capital expenditure in property, plant and equipment	(27,502)	(32,575)
Proceeds from sales of tangible fixed assets	1,594	1,512
Increase in intangible fixed assets	(3,054)	(3,000)
Received financial income	714	637
Other	290	883
Net liquidity used in investing activities	(203,439)	(79,531)
Cash flows of financing activity
Disbursals (repayments) of loans	145,847	28,325
Dividends paid	(20,390)	(18,166)
Outlays for purchase of treasury stock	(32,709)	(38,299)
Sale of treasury stock for the acquisition of equity investments	60,891	7,026
Proceeds from the sale of treasury stock to beneficiaries of stock options	8,166	4,626
Loans repaid (granted) by/to non-consolidated subsidiaries	-	21
Disbursals (repayments) of loans from (to) shareholders	(409)	(248)
Change in other financial assets	(1)	1,017
Payment of financial leasing installments (principal portion)	(3,368)	(4,306)
Net liquidity generated (used by) financing activities	158,027	(20,004)
Net increase (decrease) of cash and cash equivalents	68,442	(27,477)

(€/000)	2015	2014
Net increase (decrease) of cash and cash equivalents	68,442	(27,477)
Exchange differences from the translation of cash of companies in areas outside the EU	1,129	2,445
Opening cash and equivalents of companies consolidated for the first time with the line-by-line method	435	41
Cash and cash equivalents at the beginning of the year	59,389	84,380
Cash and cash equivalents at the end of the year	129,395	59,389

Cash and cash equivalents can be broken down as follows:

	31/12/2015	31/12/2014
	€/000	€/000
Cash and cash equivalents from the balance sheet	135,130	87,159
Payables to banks (current account overdrafts and advances subject to collection)	(5,735)	(27,770)
Cash and cash equivalents from the cash flow statement	129,395	59,389

Statement of changes in consolidated shareholders' equity

	S ha re ita l cap	Le l ga res erv e	S ha re ium pr em res erv e	ve f Re ser or lua tio f va n o hed ing g der iva tive t s a fa ir v alu e	ve f Re ser or tat ent res em of def ine d ben ef it lan p s	Tra nsl ati on ovi sio pr n	Ot her res erv es	Gr oup sha reh old e rs' ity equ	Mi rity no int sts ere	To tal
lan Ba 1 Jan 20 14 at ces ua ry	55 003 ,	11, 32 3	125 03 9 ,	( 27 )	6) ( 3, 39	( 19, 084 )	25 7, 82 8	6, 68 6 42	6, 26 3	43 2, 94 9
din in the in of th e f air lue Re tat ent cor g com e s em va
f th k o tio ign ed and isa ble toc o e s p ns ass ex erc	-	-	1, 370	-	-	-	-	1, 370	-	1, 370
Pu rch of ck tre sto ase asu ry	( 1, 98 6)	-	( 35 970 ) ,	-	-	-	( 34 3)	( 38 299 ) ,	-	( 38 299 ) ,
Sal f tr ck the be nef ici ari of ck tio sto to sto e o eas ury es op ns	48 2	-	4, 144	-	-	-	-	4, 626	-	4, 626
Sal f tr ck fo ity in sto to tm ent e o eas ury pay r e qu ves s	372	-	6, 654	-	-	-	-	7, 02 6	-	7, 02 6
Di vid end aid s p	-	-	-	-	-	-	( 18, 108 )	( 18, 108 )	( 58 )	( 18, 166 )
rch of ad dit ion al i t in dro Ch ile Pu Hy nte ase res car	-	-	-	-	-	-	( 54 2)	( 54 2)	( 1, 870 )	( 2, 41 2)
Eff of dro Ch ile -Sy bin ati Hy ect car sca m com on	-	-	-	-	-	-	( 82)	( 82)	28 9	20 7
Ac isit ion f idu al int in HC H dra uli st qu o res ere y cs					-
Te chn olo ies ( P) g	-	-	-	-		-	-	-	( 1)	( 1)
Co -G olf eff ect pa m erg er	-	-	-	-	-	-	58	58	( 58 )	-
Ac isit ion of IM M qu	-	-	-	-	-	-	-	-	71	71
reh ive ofi los for Co Pr t ( s) 20 14 mp ens	-	-	-	8	( 1, 877 )	22 893 ,	56 93 6 ,	77 96 0 ,	1, 219	79 179 ,
lan 31 mb 20 14 Ba D at ces ece er	53 87 1 ,	11, 32 3	10 1, 23 7	19) (	27 3) ( 5,	3, 809	29 74 5, 7	46 0, 695	855 5,	46 6, 0 55
Re din in the in of th e f air lue tat ent cor g com e s em va
f th k o tio ign ed and isa ble toc o e s p ns ass ex erc	-	-	1, 370	-	-	-	-	1, 370	-	1, 370
Pu rch of ck tre sto ase asu ry	( 1, 322 )	-	( 31 387 ) ,	-	-	-	-	( 32 70 9) ,	-	( 32 70 9) ,
Sal f tr ck the be nef ici ari of ck tio sto to sto e o eas ury es op ns	92 1	-	7, 245	-	-	-	-	8, 166	-	8, 166
Sal f tr ck for of uit inv sto ent est nts e o eas ury pa ym eq y me	2, 562	-	58 329 ,	-	-	-	-	60 89 1 ,	-	60 89 1 ,
rch of sid ual in s in bsi dia rie Pu ter est ase re su s	-	-	-	-	-	-	( 19 1)	( 19 1)	( 28 0)	( 47 1)
Di vid end aid s p	-	-	-	-	-	-	( 19, 32 1)	( 19, 32 1)	( 92 5)	( 20 24 6) ,
Co reh ive ofi t ( los s) for 20 15 Pr mp ens	-	-	-	6	1, 2 77	18, 846	116 322 ,	136 94 6 ,	82 1	137 76 7 ,
lan 31 mb 20 15 Ba D at ces ece er	56 032 ,	11, 32 3	136 794 ,	( 13)	( 3, 50 1)	22 655 ,	39 2, 55 7	615 84 7 ,	5, 47 1	62 1, 31 8

Notes to the consolidated financial statements

General information

Interpump Group S.p.A. is a company domiciled in Sant'Ilario d'Enza (RE) and incorporated under Italian law. The company is listed on the Milan stock exchange in the STAR segment.

The Group manufactures and markets high and very high-pressure plunger pumps, very highpressure systems, power take-offs, hydraulic cylinders, valves and directional controls, hydraulic lines and fittings and other hydraulic products. The Group has production facilities in Italy, the US, Germany, China, India, Brazil, Bulgaria, Romania and South Korea.

Sales are not affected by any significant degree of seasonality.

The consolidated financial statements include Interpump Group S.p.A. and its directly or indirectly controlled subsidiaries (hereinafter "the Group").

The interim board of directors' report at 31 December 2015 was approved by the Board of Directors meeting held on this day (12 February 2016).

Basis of preparation

The interim board of directors' report at 31 December 2015 was drawn up in compliance with the international accounting standards (IAS/IFRS) utilized for interim financial statements. The tables were prepared in compliance with IAS 1, while the notes were prepared in condensed form in application of the faculty provided by IAS 34 and therefore they do not include all the information required for annual financial statements drafted in compliance with IFRS standards. Therefore the interim board of directors' report at 31 December 2015 should be read together with the consolidated annual financial statements for the year ending 31 December 2014.

Preparation of an interim report in compliance with IAS 34 "Interim Financial Reporting" calls for judgments, estimates, and assumptions that have an effect on assets, liabilities, costs and revenues and on information regarding potential assets and liabilities at the report reference date. We draw your attention to the fact that estimates may differ from the effective results, the magnitude of which will only be known in the future.

The interim report is presented in thousands of euro. The Group adopts the cost of goods sold (GOGS) based income statement, and the cash flow statement with the indirect method. The financial statements are drafted according to the cost method, with the exception of financial instruments, which are measured at fair value.

Accounting standards

The accounting standards adopted are those described in the consolidated financial statements at 31 December 2014, with the exception of those adopted as from 1 January 2015 as described hereunder, and they were uniformly applied to all Group companies and all periods presented.

a) New accounting standards and amendments taking effect on 1 January 2015 and adopted by the Group

As from 2015 the Group has applied the following new accounting standards, amendments and interpretations, reviewed by IASB:

• On 12 December 2012 IASB issued a collection of amendments to IAS/IFRS standards ("Annual Improvements to the 2011–2013 Cycle"). The amendments resulted in changes: (i) to IFRS 3, specifying that the standard is not applicable to measure the accounting effects related to the formation of a joint venture or joint operation (as defined by IFRS 11) in the financial statements of the joint venture or joint operation; (ii) to IFRS 13, explaining that the provision of IFRS 13 on the basis of which the fair value of a group of financial assets and liabilities can be measured on a net basis, is applicable to all contracts (including non-financial contracts) falling within the scope of IAS 39 or IFRS 9; (iii) to IAS 40, explaining that to establish when the acquisition of a property constitutes a business combination, reference must be made to the provisions of IFRS 3.

b) New accounting standards and amendments effective from 1 January 2015 but not relevant for the Group
IFRIC 21 Levies On 20 May 2013 IASB published the interpretation in question. IFRIC 21 states that an entity shall recognize a liability for levies no earlier than the time of occurrence of the event to which the payment is linked, in compliance with the applicable law. For payments that become due only when a specified minimum threshold is exceeded, the liability is booked only when said minimum threshold is reached. Retrospective application is required for IFRIC 21.
c) New accounting standards and amendments not yet applicable and not adopted early by the Group
IFRS 9 Financial instruments. On 12 November 2009 IASB published this standard, which was subsequently amended on 28 October 2010 and again in mid-December 2011. The standard, which is applicable from 1 January 2018, constitutes the first part of a process in stages aimed at replacing IAS 39 and introduces new criteria for the classification and measurement of financial assets and liabilities, and for the derecognition of financial assets from the financial statements. Specifically, the new standard uses a single approach to financial assets based on the methods of management of financial instruments and on the characteristics of the contractual cash flows of financial assets in order to establish the measurement criterion, replacing the various rules contained in IAS 39. In contrast, for financial liabilities the main change concerns the accounting treatment for changes in the fair value of a financial liability designated as a financial liability measured at fair value in profit and loss, in the event wherein such changes are due to changes in the credit rating of the liabilities in question. In accordance with the new standard, such changes must be recorded in the comprehensive income statement and cannot thereafter be derecognised in profit and loss.
On 30 January 2014 IASB published IFRS 14 Regulatory Deferral Accounts, which is an interim standard related to the Rate-regulated activities project. IFRS 14 allows exclusively first-time adopters of IFRS to continue recognizing amounts associated with rate regulation in compliance with the accounting policies previously adopted. In order to improve comparability with entities that are already applying the IFRS standards and that do not therefore disclose these amounts, the standard requires the rate regulation effect to be presented separately from other captions;
On 12 December 2012 IASB issued a collection of amendments to IAS/IFRS standards Annual Improvements to IFRSs 2010–2012 Cycle. The amendments resulted in changes: (i) to IFRS 2, clarifying the definition of "vesting condition" and introducing the definitions of the service and performance conditions; (ii) to IFRS 3, clarifying that the obligations to pay a contingent consideration other than those included in the definition of equity instrument, are to be measured at fair value at each reporting date, with the changes recognized in the income statement; (iii) to IFRS 8, requiring an entity to disclose the judgments made by management in applying the aggregation criteria to

the operating segments, describing the segments that have been aggregated and the economic indicators that were assessed to determine that the aggregated segments have similar economic characteristics; (iv) to IAS 16 and IAS 38, clarifying the method of determining the carrying amount of assets, in the case of revaluation further to the application of the revaluation model; (v) to IAS 24, establishing the information to be supplied when there is a third-party entity that supplies services related to the administration of key management personnel of the reporting entity. These amendments will be effective for reporting periods starting after 1 February 2015. Early adoption is however permitted.

Amendments to IAS 19 Employee benefits. On 21 November 2013 IASB published an amendment to IAS 19 limited to contributions to defined benefit plans for employees. The changes are aimed at simplifying the accounting of contributions that are unrelated to years of seniority, such as contributions calculated on the basis of a fixed percentage of salary. This amendment will be effective for reporting periods starting after 1 February 2015. Early adoption is however permitted.
IFRS 15 Recognition of revenue from contracts with customers. On 28 May 2014 IASB and FASB jointly issued IFRS 15 designed to improve the disclosure of revenues and the global comparability of financial statements in order to harmonize the recognition of economically similar transactions. The standard is effective for IFRS users from reporting periods starting after 1 January 2017 (early adoption is permitted).
Amendment to IFRS 15 On 11 September 2015 IASB released an amendment whereby the application of the standard is deferred by one year, i.e. to 1 January 2018. Early adoption is however permitted.
Amendment to IAS 27 Separate financial statements. On 12 August 2014 IASB published an amendment to the standard that will allow entities to use the equity method to recognize investments in subsidiaries, joint ventures and associates in separate financial statements. The amendment is effective from 1 January 2016.
Annual improvements to IFRS 2012–2014 cycle On 15 December 2015 the European Union issued regulation 2015/2343 adopting the annual improvements to IFRS 2012- 2014 cycle, which was issued by the IASB on 25 September 2014 and relates to a number of amendments to the IAS/IFRS. The aim of the annual improvements is to address necessary matters related to inconsistencies found in IFRSs or for clarifications of terminology, which are not of an urgent nature but which reflect issues discussed by the IASB during the project cycle. Among the amended standards, IFRS 5, in relation to which a clarification has been introduced concerning cases in which the method of disposal of an asset is changed from held for sale to held for distribution; IFRS 7, with a clarification to establish if and when a residual involvement in a transferred financial asset exists in the presence of an associated service contract, thus determining the required level of disclosure; IAS 19, which clarifies that the currency of securities used as a benchmark to estimate the discount rate, must be the same as the currency in which the benefits will be paid; and IAS 34 in which the meaning of "elsewhere" is clarified for the inclusion of information by cross-reference.
Amendments to IFRS 10, IFRS 12 and IAS 28 Investment entities: applying the consolidation exception. On 18 December 2014 IASB published the amendments in question concerning the problems deriving from application of the consolidation exception granted to investment entities. The first application date introduced by IASB is for annual periods beginning on or after 1 January 2016. Early application is permitted.
Amendments to IAS 1: Presentation of financial statements disclosure initiative On 18 December 2015 the European Union issued regulation 2015/2406 adopting the

amendments that seek to improve the effectiveness of disclosures and encourage companies to use professional judgment when determining the information to be reported in the financial statements pursuant to IAS 1. The amendments will be applicable to financial periods starting on or after 1 January 2016.

Amendments to IFRS 10 and IAS 28: sale or contribution of assets between an investor and its associate or joint venture.- On 11 September 2014 IASB published the amendments in question, which are designed to remove the conflict between the requirements of IAS 28 and those of IFRS 10 and clarify that in a transaction that involves an associate or a joint venture the extent to which it is possible to recognize a profit or a loss depends on whether the asset subject to sale or contribution is a business. In December 2015 the IASB issued an amendment that defers the entry into force of these amendments for an indefinite period.
Amendments to IAS 16 and IAS 41: agriculture bearer plants On 23 November 2015 the European Union issued regulation 2015/2113 adopting these amendments. The amendments, which do not concern the Interpump Group, will be applicable to financial periods starting on or after 1 January 2016.
Amendments to IFRS 11: accounting for acquisitions of interests in joint operations On 24 November 2015 the European Union issued regulation 2015/2173 adopting these amendments, which provide guidance on the accounting for acquisitions of interests in joint operations that comprise a business activity. The amendments apply to financial periods starting on or after 1 January 2016.
Amendments to IAS 16 and IAS 38: property, plant and equipment and intangible assets – On 2 December 2015 the European Union issued regulation 2015/2231 specifying that a method of depreciation based on the revenues generated by the asset is inappropriate because it reflects solely the revenue flow generated by the asset and does not reflect the methods of consumption of the prospective future economic benefits embodied in the asset. The amendments apply, at the latest, to financial periods starting on or after 1 January 2016. It is deemed that adoption of the standard will have no significant effects on the Group's financial statements.
Amendments to IAS 1: presentation of financial statements disclosure initiative On 18 December 2015 the European Union issued regulation 2015/2406 adopting these amendments that seek to improve the effectiveness of disclosures and encourage companies to use professional judgment when determining the information to be reported in the financial statements pursuant to IAS 1. The amendments apply, at the latest, to financial periods starting on or after 1 January 2016.

At today's date the competent bodies of the European Union have completed the approval process related to the new standards and amendments applicable to financial statements starting as from 1 January 2016, while the approval process required for adoption of the other standards and amendments is still under way. On the basis of analysis currently in progress no significant impacts are predicted from the 2016 adoption of the applicable new standards and amendments.

Notes to the consolidated Financial Statements at 31 December 2015

		Page
1.	Consolidation basis and goodwill	45
2.	Sector information	47
3.	Acquisition of investments	54
4.	Inventories and detail of changes in the Inventories allowance	58
5.	Property, plant and equipment	58
6.	Shareholders' equity	58
7.	Financial income and charges	59
8.	Earnings per share	60
9.	Transactions with related parties	61
	10. Disputes, Potential Liabilities and Potential Assets	63

1. Consolidation basis and goodwill

At 31 December 2015 the scope of consolidation includes the Parent company (which is included in the Water Jetting Sector) and the following subsidiaries:

			Share	%
Company	Head office	Sector	capital €/000	stake at 31/12/15

Bertoli S.r.l.	S.Polo di Torrile (PR)	Water	50	100.00%
General Pump Inc.	Minneapolis (USA)	Water	1,854	100.00%
Hammelmann GmbH	Oelde (Germany)	Water	25	100.00%
Hammelmann Australia Pty Ltd (1)	Melbourne (Australia)	Water	472	100.00%
Hammelmann Corporation Inc (1)	Miamisburg (USA)	Water	39	100.00%
Hammelmann S. L. (1)	Zaragoza (Spain)	Water	500	100.00%
Hammelmann Pumps Systems Co Ltd (1)	Tianjin (China)	Water	871	90.00%
Hammelmann Bombas e Sistemas Ltda (1)	San Paolo (Brazil)	Water	739	100.00%
Inoxihp S.r.l.	Nova Milanese (MI)	Water	119	52.72%
NLB Corporation Inc.	Detroit (USA)	Water	12	100.00%
SIT S.p.A.	S.Ilario d'Enza (RE)	Water	105	65.00%
Interpump Hydraulics S.p.A.	Calderara di Reno (BO)	Hydr.	2,632	100.00%
HS Penta S.p.A (2)	Faenza (RA)	Hydr.	4,244	100.00%
HS Penta Africa Pty Ltd (9)	Johannesburg (South Africa)	Hydr.	-	100.00%
Hypress Africa Pty Ltd (9)	Boksburg (South Africa)	Hydr.	796	100.00%
Interpump Hydraulics Middle East FZCO (2) and (9)	Dubai (UAE)	Hydr.	326	100.00%
Oleodinamica Panni S.r.l. (2)	Tezze sul Brenta (VI)	Hydr.	2,000	100.00%
Contarini Leopoldo S.r.l. (2)	Lugo (RA)	Hydr.	47	100.00%
Unidro S.a.r.l. (3)	Barby (France)	Hydr.	8	100.00%
Copa Hydrosystem Odd (3)	Troyan (Bulgaria)	Hydr.	3	95.00%
AVI S.r.l. (2)	Varedo (MB)	Hydr.	10	100.00%
Hydrocar Chile S.A. (2)	Santiago (Chile)	Hydr.	129	90.00%
Hydroven S.r.l. (2)	Tezze sul Brenta (VI)	Hydr.	200	100.00%
Interpump Hydraulics France S.a.r.l. (2)	Ennery (France)	Hydr.	76	99.77%
Interpump Hydraulics India Private Ltd (2)	Hosur (India)	Hydr.	682	100.00%
Interpump Hydraulics Brasil Ltda (2)	Caxia do Sul (Brazil)	Hydr.	12,899	100.00%
Muncie Power Prod. Inc. (2)	Muncie (USA)	Hydr.	784	100.00%
American Mobile Power Inc. (4)	Fairmount (USA)	Hydr.	3,410	80.00%
Wuxi Interpump Weifu Hydraulics Company Ltd (2)	Wuxi (China)	Hydr.	2,095	65.00%
Hydrocontrol S.p.A. (2)	Osteria Grande (BO)	Hydr.	1,350	100.00%
Hydrocontrol Inc. (5)	Minneapolis (USA)	Hydr.	763	100.00%
HC Hydraulics Technologies(P) Ltd (5)	Bangalore (India)	Hydr.	4,120	100.00%
Aperlai HK Ltd (5)	Hong Kong	Hydr.	77	100.00%
HTIL (6)	Hong Kong	Hydr.	98	85.00%
Guangzhou Bushi Hydraulic Technology Ltd (7)	Guangzhou (China)	Hydr.	3,720	100.00%
Galtech Canada Inc. (5)	Terrebonne, Quebec (Canada)	Hydr.	76	100.00%
IMM Hydraulics S.p.A. (2)	Atessa (Switzerland)	Hydr.	520	100.00%
Hypress S.r.l. (8)	Atessa (Switzerland)	Hydr.	50	100.00%
IMM Hydraulics Ltd (8)	Halesowen (UK)	Hydr.	1	100.00%
Hypress Hydraulik GmbH (8)	Meinerzhagen (Germany)	Hydr.	52	100.00%
Hypress France S.a.r.l. (8)	Strasbourg (France)	Hydr.	3,616	100.00%
IMM Hydro Est (8)	Catcau Cluj Napoca (Romania) Hydr.		3,155	100.00%
Dyna Flux S.r.l. (8)	Bolzaneto (GE)	Hydr.	40	51.00%

			Share	%
			capital	stake
Company	Head office	Sector	€/000	at 31/12/15
Walvoil S.p.A.	Reggio Emilia	Hydr.	5,000	100.00%
Walvoil Fluid Power Corp. (10)	Tulsa (USA)	Hydr.	41	100.00%
Walvoil Fluid Power Shanghai Co. Ltd (10)	Shanghai (China)	Hydr.	1,872	100.00%
Walvoil Fluid Power Pvt Ltd (10)	Bangalore (India)	Hydr.	683	100.00%
Walvoil Fluid Power Korea (10)	Pyeongtaek (South Korea)	Hydr.	453	100.00%
Walvoil Fluid Power France S.a.r.l. (10)	Vritz (France)	Hydr.	10	100.00%
Walvoil Fluid Power Australasia (10)	Melbourne (Australia)	Hydr.	7	100.00%
Teknova S.r.l. (in liquidation)	Reggio Emilia	Other	28	100.00%
(1) = controlled by Hammelmann GmbH	(6) = controlled by Aperlai HK Ltd
(2) = controlled by Interpump Hydraulics S.p.A.	(7) = controlled by HTIL
(3) = controlled by Contarini Leopoldo S.r.l.	(8) = controlled by IMM Hydraulics S.p.A.
(4) = controlled by Muncie Power Inc.	(9) = controlled by HS Penta S.p.A.
(5) = controlled by Hydrocontrol S.p.A. (10) = controlled by Walvoil S.p.A.
The other companies are controlled directly by Interpump Group S.p.A.

The Walvoil Group, Inoxihp, Bertoli and Osper (merged into Interpump Hydraulics Brasil together with Takarada, Walvoil Fluid Power do Brasil and Interpump Hydraulics do Brasil) have been consolidated for the first time.

Despite their modest size, in consideration of development plans for the coming years also Hammelmann Bombas e Sistemas Ltda and Interpump Hydraulics Middle East FZCO were consolidated line-by-line for the first time. The effect on 2015 is not significant.

The minority shareholders of American Mobile Power are obliged to sell their holdings (and Muncie is obliged to purchase them) in April 2016 at a price to be determined on the basis of the company's results as reported in the last two financial statements for the years closed prior to that date. The minority shareholder of Inoxihp S.r.l. is entitled to dispose of its holdings starting from the approval of the 2025 financial statements up to the 2035 financial statements, on the basis of the average results of the company in the last two financial statements for the years ended before the exercise of the option.

In compliance with the requirements of IFRS 10 and IFRS 3, American Mobile Power and Inoxihp have been consolidated in full, recording a payable representing an estimate of the present value of the exercise price of the options determined with reference to actual data for American Mobile Power and a business plan for Inoxihp. Any changes in the payable representing the present value of the exercise price that occur within 12 months of the date of acquisition, as a result of additional or better information, will be recorded as an adjustment of goodwill, while any changes after 12 months from the date of acquisition will be recognized in the income statement.

The changes in goodwill in 2015 were as follows:

Company:	Balance at 31/12/2014	Increases (Decreases) in the year	Changes due to foreign exchange differences	Balance at 31/12/2015
Water Jetting Sector	130,456	24,512	4,290	159,258
Hydraulic Sector	148,917	39,035	178	188,130
Total goodwill	279,373	63,547	4,468	347,388

The increases in 2015 refer to:

€37,896k for the Walvoil Group acquisition (Hydraulic Sector);
€21,963k for the acquisition of Inoxihp (Water Jetting Sector), inclusive of the debt for the associated put options;
€2,549k for the acquisition of Bertoli (Water Jetting Sector);
€1,418k for the acquisition of Osper (Hydraulic Sector).

The decreases are referred to recalculation of the debt for adjustment of the acquisition of minority stakes in Interpump Hydraulics International (Hydraulic Sector) in the amount of €279k.

2. Business sector information

Business sector information is supplied with reference to the operating sectors. We also present the information required by IFRS by geographical area. The information provided about business sectors reflects the Group's internal reporting structure.

The values of components or products transferred between sectors are the effective sales price between Group companies, which correspond to the selling prices to the best customers.

Sector information includes directly attributable costs and costs allocated on the basis of reasonable estimates. The holding costs, i.e. remuneration of directors and statutory auditors of the parent company and the cost of the Group's financial management, control and internal auditing functions, as well as consultancy costs and other related costs have been booked to the sectors on the basis of sales.

Business sectors

The Group is composed of the following business sectors:

Water Jetting Sector. This sector is mainly composed of high and very high pressure pumps and pumping systems used in a wide range of industrial sectors for the conveyance of fluids. High pressure plunger pumps are the main component of professional high pressure cleaners. These pumps are also employed for a broad range of industrial applications including car wash installations, forced lubrication systems for machine tools, and inverse osmosis systems for seawater desalination plants. Very high pressure pumps and systems are used for cleaning surfaces, ship hulls, various types of hoses, and also for removing machining burr, cutting and removing cement, asphalt, and paint coatings from stone, cement and metal surfaces, and for cutting solid materials. The Sector also include high pressure homogenizers with piston pumps that are mainly used by the food processing industry, but also in the chemicals and cosmetics sector.

Hydraulic Sector. Includes the production and sale of power take-offs, hydraulic cylinders, pumps, valves and directional controls, hydraulic lines and fittings and other hydraulic components. Power take-offs are mechanical devices designed to transmit drive from an industrial vehicle engine or transmission to power a range of ancillary services through hydraulic components. These products, combined with other hydraulic components (spool valves, controls, etc.) allow the execution of special functions such as lifting tipping bodies, operating truck-mounted cranes, operating mixer truck drums, and so forth. Hydraulic cylinders are components of the hydraulic system of various vehicle types employed in a wide range of applications depending on the type. Front-end and underbody cylinders (single acting) are fitted mainly on industrial vehicles in the building construction sector, while double acting cylinders, valves and directional controls are employed in a range of applications: earthmoving machinery, agricultural machinery, cranes and truck cranes, waste compactors, etc. The hydraulic hoses and fittings are designed for use in a broad range of hydraulic systems and also for very high pressure water systems.

Until 30 September 2015, Interpump Engineering and Teknova were included in the Other Sector. Following the absorption of Interpump Engineering by Interpump Group S.p.A. with effect from 1 November 2015, the amounts relating to Interpump Engineering have been classified in the Water Jetting Sector for the entire year, not least in view of their low materiality.

Interpump Group business sector information

(Amounts shown in €/000)

Cumulative at 31 December (twelve months)

	Hy	dra l ic Se cto u r	W ate r	ing Se Jet t cto r	Ot he		l im ina ion ies E t tr r en		Int Gr erp um p ou p
	5 2 0 1	2 0 1 4	5 2 0 1	2 0 1 4	5 2 0 1	2 0 1 4	5 2 0 1	2 0 1 4	5 2 0 1	2 0 1 4
Ne les l to he Gr t s ter t a ex na ou p	5 6 0, 2 7 1	3 9 6, 2 0 4	3 3 4, 6 5 7	2 7 5, 7 9 5					8 9 4, 9 2 8	6 7 1, 9 9 9
Sa les be tw cto een se rs	2 3 5	1 8 7	1, 5 8 8	1, 16 2	- -	- 2, 7 7 7	- ( 1, 8 2 3 )	- ( 4, 1 26 )	-	-
To l n les ta et sa	5 6 0, 5 0 6	3 9 6, 3 9 1	3 3 6, 2 4 5	2 7 6, 9 5 7	-	2, 7 7 7	( 1, 8 2 3 )	( 4, 1 2 6 )	8 9 4, 9 2 8	6 7 1, 9 9 9
Co f p du l d st o cts ro so	( 3 8 4, 0 9 8 )	( 26 7, 1 7 3 )	( 1 9 4, 9 2 7 )	( 16 0, 76 6 )	-	( 1, 7 3 9 )	1, 7 1 5	3, 0 9 3	( 5 7 7, 3 1 0 )	( 4 26 5 8 5 ) ,
Gr in ia in du str l m oss ar g	1 6, 4 0 8 7	1 2 9, 2 1 8	1 4 1, 3 1 8	1 1 6, 1 9 1	-	1, 0 3 8	( 1 0 8 )	( 1, 0 3 3 )	3 1 6 1 8 7,	2 4 5, 4 1 4
% les t sa on ne	3 1. 5 %	3 2. 6 %	4 2. 0 %	4 2. 0 %	-	n.s			3 5. 5 %	3 6. 5 %
he Ot et r n rev enu es	9, 4 3 1	9, 4 46	5 3, 7 3	5 3, 3 8	-	3 8	( 3 3 )	( 3 0 6 )	1 3, 1 3 3	5 1 2, 6 3
D ist i bu ion t sts r co	( 4 8, 1 3 0 )	( 3 8, 2 26 )	( 3 6, 1 9 5 )	( 2 9, 8 5 6 )	-	-	4	8	( 8 4, 3 2 1 )	( 6 8, 0 7 4 )
Ge l a d a dm in ist ive rat ne ra n ex p en ses	( 6 6, 9 5 3 )	( 4 8, 8 0 2 )	( 3 8, 8 3 6 )	( 3 2, 0 0 1 )	( 1 8 )	( 1, 0 4 5 )	1 3 7	1, 3 3 1	( 1 0 5, 6 7 0 )	( 8 0, 5 1 7 )
Ot he ing t sts r o p era co	( 3, 16 3 )	( 2, 16 9 )	( 0 1 ) 7	( 2, 8 5 0 )	-	-	-	-	( 3, 8 4 ) 6	( 5, 0 1 9 )
Or d ina f it be for f ina ia l e ry p ro e nc xp en ses	6 7, 5 9 3	4 9, 4 6 7	6 9, 3 2 1	5 4, 8 6 9	( 1 8 )	3 1	-	-	1 3 6, 8 9 6	1 0 4, 3 6 7
% les t sa on ne	1 2. 1 %	1 2. 5 %	6 2 0. %	1 9. 8 %	n.s	n.s			1 5. 3 %	1 5. 5 %
F ina ia l inc nc om e	4 1, 2 0 5	4, 5 6 2	4, 1 9 5	5, 5 5 0	-	1	( 2, 0 7 9 )	( 1, 9 6 9 )	4 3, 3 2 1	8, 1 4 4
F ina ia l e nc xp en ses	( 1 1, 9 2 3 )	( 1 5, 3 9 1 )	( 16 2 ) 6,	( 0 7 5 ) 6,	( 5 )	( 7 )	2, 0 7 9	1, 9 9 6	( 16 0 1 1 ) ,	( 1 9, 5 0 4 )
49
D iv i de ds n	-	-	1 4, 0 0 0	8, 5 0 0	-	-	( 1 4, 0 0 0 )	( 8, 5 0 0 )	-	-
A d j f inv ust nt est nts me o me
ie d a ity t e c arr q u	( 2 5 3 )	9 2	( 9 )	1 0	-	-		-	( 26 2 )	1 0 2
f it for for Pr he be t e t o y ea r ax es	9 6, 6 2 2	3 8, 3 0 7	8 1, 3 4 5	6 2, 8 5 4	( 2 3 )	2 5	( 1 4, 0 0 0 )	( 8, 5 0 0 )	1 6 3, 9 4 4	9 3, 1 0 9
Inc e t om axe s	( 2 4, 5 5 7 )	( 1 7, 3 4 5 )	( 2 2, 0 8 1 )	( 1 7, 8 9 4 )	( 3 1 7 )	( 1 2 8 )	-	-	( 46 9 5 5 ) ,	( 3 5, 3 7 ) 6
Co l i da d p f it for he te t ns o ro y ea r	7 2, 0 6 5	2 1, 3 8 5	5 9, 2 6 4	4 4, 9 6 0	( 3 4 0 )	( 1 0 3 )	( 1 4, 0 0 0 )	( 8, 5 0 0 )	1 1 6, 9 8 9	5 7, 7 4 2
Du e t o:
's s ha ho l der Pa t c ren om re s	1, 5 3 7 7	2 0, 3 2 6	5 1 2 9,	4 4, 0 9	( 3 4 0 )	( 1 0 3 )	( 1 4, 0 0 0 )	( 8, 5 0 0 )	1 16 3 2	5 3 6, 9
p any Su bs i d iar ies ' m ino ity ha ho l der r s re s	5 2 8	7 5 3	5 1 3	7 5					2 , 6 6	6 8 0
Co i f it for l da te d p t he ns o ro ea r y	2, 0 6 5 7	2 1, 3 8 5	9 5 9, 2 6	3 4 4, 9 6	- ( 3 4 0 )	- ( 1 0 3 )	- ( 1 4, 0 0 0 )	- ( 8, 5 0 0 )	7 1 1 6, 9 8	6 5 4 7, 7
			4	0					9	2
Fu he in for ion ire d by I F R S 8 rt t r ma re q u
Am iza ion dep iat ion d w ite -do ort t rec an r wn s ,	2 8, 6 3 5	1 8, 9 0 5	1 3, 2 5 1	1 1, 1 7 2	-	8	-	-	4 1, 8 8 6	3 0, 0 8 5
Ot he eta sts r n on -m on ry co	2, 4 1 8	2, 4 1 6	2, 9 8 6	3, 2 5 0	-	-	-	-	5, 4 0 4	5, 8 9 1

Interpump Group business sector information

(Amounts shown in €/000)

Q	4

		dr. Hy		W ate r		Ot he r	l im ina E	ion ies t tr en	Int erp	Gr um p ou p
	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4
Ne les l to he Gr t s ter t a ex na ou p	1 3 0, 2 5 1	9 4, 7 4 8	8 2, 7 9 9	7, 1 8 6 6	-	-		-	2 1 3, 0 5 0	16 1, 9 3 4
Sa les be tw cto een se rs	8 0	2 4	4 8 0	2 9 9	-	2, 1 1 8	( 5 0 ) 6	( 2, 4 4 1 )	-	-
To l n les ta et sa	1 3 0, 3 3 1	9 4, 7 7 2	8 3, 2 7 9	6 7, 4 8 5		2, 1 1 8	( 5 6 0 )	( 2, 4 4 1 )	2 1 3, 0 5 0	1 6 1, 9 3 4
Co f p du l d st o cts ro so	( 9 2, 3 5 1 )	( 6 5, 8 7 3 )	( 4 9, 2 2 9 )	( 3 8, 0 7 0 )	-	( 1, 7 2 3 )	5 3 5	2, 0 3 1	( 1 4 1, 0 4 5 )	( 1 0 3, 6 3 5 )
Gr in ia in du str l m oss ar g	3 9 8 0 7,	2 8, 8 9 9	3 4, 0 5 0	2 9, 4 1 5	-	3 9 5	( 2 5 )	( 4 1 0 )	2, 0 0 5 7	5 8, 2 9 9
% les t sa on ne	2 9. 1 %	3 0. % 5	4 0. 9 %	4 3. 6 %	-	n.s			3 3. 8 %	3 6. 0 %
Ot he et r n rev enu es	2, 3 8 4	3, 3 1 9	1, 2 5 8	4 1 9	-	1	( 2 3 )	( 8 ) 9	3, 1 6 9	4, 1 2 7
D ist i bu ion t sts r co	( 1 2, 2 0 0 )	( 9, 7 0 9 )	( 9, 3 76 )	( 7, 9 1 3 )	-	-	-	5	( 2 1, 5 76 )	( 1 7, 6 1 7 )
Ge l a d a dm in ist ive rat ne ra n ex p en ses	( 16 3 8 2 ) ,	( 1 2, 8 5 5 )	( 1 0, 0 1 2 )	( 8, 8 9 5 )	( 1 0 )	( 3 5 2 )	4 8	4 9 4	( 26 3 5 ) 6 ,	( 2 1, 0 8 ) 6
Ot he ing t sts r o p era co	( 1, 1 4 4 )	( 7 7 4 )	( 4 8 5 )	( 1, 1 4 2 )	-	-	-	-	( 1, 2 9 ) 6	( 1, 9 16 )
Or d ina f it be for f ina ia l e ry p ro e nc xp en ses	1 0, 6 3 8	8, 8 8 0	1 5, 4 3 5	1 2, 4 0 6	( 1 0 )	4 4	-	-	2 6, 0 6 3	2 1, 3 3 0
% les t sa on ne	8. 2 %	9. 4 %	1 8. 5 %	1 8. 4 %	n.s	n.s			1 2. 2 %	1 3. 2 %
F ina ia l inc nc om e	2, 0 5 0	8 6 6	1, 0 4 3	1, 7 7 2	-	-	( 5 5 1 )	( 5 4 8 )	2, 5 4 2	2, 0 9 0
50
F ina ia l e nc xp en ses	( 2, 76 2 )	( 7, 9 3 9 )	( 1, 3 6 8 )	( 2, 1 1 5 )	( 1 )	( 3 )	5 5 1	5 4 8	( 3, 5 8 0 )	( 9, 5 0 9 )
A d j f inv ust nt est nts me o me ie d a t e	6 6	2 7 9	3	3					6 9	3 1
ity c arr q u Pr f it for he io d be for t e t	( ) 8 6 0	0 8 6	( ) 1 1 0 7	6 1 0 9	- 1 1	- 4	-	-	( ) 2 9 5	5 1 2 2
o p er ax es	9,	2,	5,	2, 9	( )	1	-	-	4, 6	4, 6
Inc e t om axe s	( 4, 6 7 9 )	( 2, 7 8 9 )	( 4, 6 3 6 )	( 3, 7 4 9 )	5	( 3 6 )	-	-	( 9, 3 1 0 )	5 ( 6, 7 4 )
Co l i da d p f it for he io d te t ns o ro p er	5, 1 8 1	( 7 0 3 )	1 0, 4 7 1	8, 3 5 0	( 6 )	5	-	-	1 5, 6 4 6	7, 6 5 2
Du e t o:
Pa 's s ha ho l der t c ren om p any re s	4, 9 3 9	( 8 3 0 )	1 0, 4 2 5	8, 3 8 5	( 6 )	5	-	-	1 5, 3 5 8	7, 5 6 0
Su bs i d iar ies ' m ino ity ha ho l der r s re s	2 4 2	1 2 7	46	( 3 5 )	-	-	-	-	2 8 8	9 2
Co l i da d p f it for he io d te t ns o ro p er	5, 1 8 1	( 7 0 3 )	1 0, 4 7 1	8, 3 5 0	( 6 )	5	-	-	1 5, 6 4 6	7, 6 5 2

Fu he in for ion ire d by I F R S 8 rt t r ma re q u
Am iza ion dep iat ion d w ite -do ort t rec an r wn s ,	8, 7 1 8	4, 9 8 1	3, 46 5	3, 5 0 6	-	3	-	-	1 2, 1 8 3	8, 4 9 0
Ot he eta sts r n on -m on ry co	4 1 0	4 5 7	8 0 9	1, 0 5 7	-	-	-	-	1, 3 0 0	1, 8 2 0

Financial position

(Amounts shown in €/000)

		dr. Hy	W ate r			he l im Ot E r	ina ion ies Int t tr en		Gr erp um p ou p
	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r	be 3 1 De cem r
	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4	2 0 1 5	2 0 1 4
As by set cto s se r	7 2 7, 3 8 2	5 2 2, 5 0 0	5 6 7, 2 7 0	4 5 2, 7 1 9	5 7 7	1, 7 3 9	( 1 5 7, 3 3 9 )	( 1 0 1, 5 6 9 )	1, 1 3 7, 8 9 0	8 7 5, 3 8 9
As he l d for le set s sa	-	6 1 5	-	-	-	-	-	-	-	6 1 5
Su bto l o f a f t he ( A ) ta ts cto sse o se r	7 2 7, 3 8 2	5 2 3, 1 1 5	5 6 7, 2 7 0	4 5 2, 7 1 9	5 7 7	1, 7 3 9	( 1 5 7, 3 3 9 )	( 1 0 1, 5 6 9 )	1, 1 3 7, 8 9 0	8 7 6, 0 0 4
Ca h a d c h e iva len ts s n as q u									1 3 5, 1 3 0	8 7, 1 5 9
To ta l a ts sse									1, 2 3, 0 2 0 7	9 6 3, 1 6 3
L ia b i l it ies f t he cto o se r	3 1 1, 7 1 8	2 1 4, 2 1 3	8 3, 4 0 0	6 8, 7 7 8	5 9 7	1, 8 2 5	( 1 5 7, 3 3 9 )	( 1 0 1, 5 6 9 )	2 3 8, 3 7 6	1 8 3, 2 4 7
L ia b i l it ies he l d for le sa	-	1 6 3	-	-	-	-	-	-	-	1 6 3
Su bto l o f l ia b i l it ies f t he ( B ) ta cto o se r	3 1 1, 7 1 8	2 1 4, 3 7 6	8 3, 4 0 0	6 8, 7 7 8	5 9 7	1, 8 2 5	( 1 5 7, 3 3 9 )	( 1 0 1, 5 6 9 )	2 3 8, 3 7 6	1 8 3, 4 1 0
De bts for he f inv t nt est nts p ay me o me									2 3, 2 0 9	7 4, 0 7 5
b les ba ks Pa to a n y									5, 3 5 7	2 0 7, 7 7
be ing f ina ia l p b les Int st- ere ar nc ay a									3 8 4, 3 8 2	2 1 1, 3 5 8
To l l ia b i l it ies ta									6 5 1, 7 0 2	4 9 6, 6 1 3

51 ( A- ) To l a B ta ts, t sse ne	4 1 5, 6 6 4	3 0 8, 7 3 9	4 8 3, 8 7 0	3 8 3, 9 4 1	( ) 2 0	( ) 8 6	-	-	8 9 9, 5 1 4	6 9 2, 5 9 4
Fu he in for ion ire d by I F R S 8 rt t r ma re q u ie d a Inv est nts t me ca rr
ie d a ity t e c arr q u	1 0 6	76	2 8 3	46 3	-	-	-	-	3 8 9	5 3 9
No he ha ent set t r t n-c urr as s o n
f ina ia l a d de fer d t ts ets nc sse an re ax ass	4 1 5, 2 2	5 3 0 0, 0 6 0	2 5 4, 5 6 5	2 1 5, 9 5 0	-	1 7 5	-	-	6 6 9, 7 9 0	5 16 1 8 5 ,

The full year and Q4 comparison of the Sector on a like for like basis is as follows:

Hydraulic Sector	Year		Q4
(amounts shown in €/000)	2015	2014	2015	2014
Net sales external to the Group	415,920	396,204	97,077	94,748
Sales between sectors	235	187	80	24
Total net sales	416,155	396,391	97,157	94,772
Cost of products sold	(278,755)	(267,173)	(66,367)	(65,873)
Gross industrial margin	137,400	129,218	30,790	28,899
% on net sales	33.0%	32.6%	31.7%	30.5%
Other net revenues	8,373	9,446	2,308	3,319
Distribution costs	(39,301)	(38,226)	(9,941)	(9,709)
General and administrative expenses	(51,892)	(48,802)	(12,692)	(12,855)
Other operating costs	(2,828)	(2,169)	(981)	(774)
Ordinary profit before financial expenses % on net sales	51,752 12.4%	49,467 12.5%	9,484 9.8%	8,880 9.4%

Financial income	37,936	4,562	1,525	866
Financial expenses Adjustment of investments	(7,836)	(15,391)	(1,972)	(7,939)
carried at equity	(253)	92	(66)	279
Profit for the period before taxes	81,599	38,730	8,971	2,086
Income taxes	(19,926)	(17,345)	(4,673)	(2,789)
Consolidated profit for the period	61,673	21,385	4,298	(703)
Due to:
Parent company's shareholders	61,145	20,632	4,056	(830)
Subsidiaries' minority shareholders	528	753	242	127
Consolidated profit for the period	61,673	21,385	4,298	(703)

Water Jetting Sector	Year		Q4
(amounts shown in €/000)	2015	2014	2015	2014
Net sales external to the Group	316,103	275,795	77,195	67,186
Sales between sectors	1,454	1,162	454	299
Total net sales	317,557	276,957	77,649	67,485
Cost of products sold	(185,254)	(160,766)	(46,122)	(38,070)
Gross industrial margin	132,303	116,191	31,527	29,415
% on net sales	41.7%	42.0%	40.6%	43.6%
Other net revenues	3,374	3,385	1,107	941
Distribution costs	(34,145)	(29,856)	(8,773)	(7,913)
General and administrative expenses Other operating costs	(36,445) (609)	(32,001) (2,850)	(9,230) (413)	(8,895) (1,142)
Ordinary profit before financial expenses	64,478	54,869	14,218	12,406
% on net sales	20.3%	19.8%	18.3%	18.4%
Financial income	4,152	5,550	1,037	1,772
Financial expenses	(5,540)	(6,075)	(815)	(2,115)
Dividends	14,000	8,500	-	-
Adjustment of investments
carried at equity	(9)	10	(3)	22
Profit for the period before taxes	77,081	62,854	14,437	12,085
Income taxes	(20,527)	(17,894)	(4,256)	(3,749)
Consolidated profit for the period	56,554	44,960	10,181	8,336
Due to:
Parent company's shareholders	56,415	44,907	10,136	8,371
Subsidiaries' minority shareholders	139	53	45	(35)
Consolidated profit for the period	56,554	44,960	10,181	8,336

Cash flows for the year by business sector are as follows:

€/000	Sector		Sector		Sector
	Hydr.		Water		Other		Total
	2015	2014	2015	2014	2015	2014	2015	2014
Cash flows from:
Operating activities	58,618	43,369	55,444	28,543	(208)	146	113,854	72,058
Investing activities	(52,141)	(61,181)	(151,298)	(18,397)	-	47	(203,439)	(79,531)
Financing activities	25,755	19,379	132,102	(38,881)	170	(502)	158,027	(20,004)
Total	32,232	1,567	36,248	(28,735)	(38)	(309)	68,442	(27,477)

Hydraulic Sector investing activities in 2015 included €34,696k related to the acquisition of equity interests (€47,267k in 2014), while Water Jetting Sector investing activities included €141,531k related to the acquisition of Walvoil, Inoxihp, and Bertoli and of residual interests in existing subsidiaries (€517k for the acquisition of equity investments in 2014).

Financing activities for 2015 included net disbursals of intercompany loans from the Water Jetting Sector to the Hydraulic Sector in the amount of €57,348k (€28,646k in 2014) and from the Water Jetting Sector to the Other Revenues Sector in the amount of €170k (no amount recorded in 2014). Moreover, the cash flows of Water Jetting Sector financing activities in 2015 included outlays for the purchase of treasury shares in the amount of €32,709k (€38,299k in 2014), proceeds from the sale of treasury shares to the beneficiaries of stock options in the amount of €8,166k (€4,626k in 2014), and €60,891k related to the value of treasury stock assigned for the acquisition of equity investments (€7,026k in 2014), and the payment of dividends for €19,396k (€18,108k in 2014).

3. Acquisition of investments

Walvoil Group

The amounts are expressed in euro thousands (the exchange rates adopted for conversion of the financial statements of subsidiaries in the US, India, China, South Korea and Australia were 1,214 US dollars/1 euro, 7,536 Chinese renminbi/1 euro, 76,719 Indian rupees/1 euro, 3.221 Brazilian Real/1 euro, 1,483 AUS dollars/1 euro, and 1,324.8 South Korean Won/1 euro, corresponding to the exchange rates in force on the date of acquisition).

			Carrying values in the
	Amounts	Adjustments	acquiring comp
€/000	acquired	to fair value	any
Cash and cash equivalents	3,676	-	3,676
Trade receivables	32,721	-	32,721
Inventories	42,170	-	42,170
Tax receivables	5,267	-	5,267
Other current assets	1,172	-	1,172
Property, plant and equipment	49,523	20,341	69,864
Other intangible assets	536	9,300	9,836
Financial assets	2	-	2
Non-current tax receivables	2	-	2
Deferred tax assets	4,819	-	4,819
Other non-current assets	627	-	627
Trade payables	(20,975)	-	(20,975)
Payables to banks	(8,006)	-	(8,006)
Financial payables to banks – loans
(current portion)	(10,099)	-	(10,099)
Leasing payables (current portion)	(1,491)	-	(1,491)
Derivative financial instruments	(63)	-	(63)
Tax payables	(3,592)	-	(3,592)
Other current liabilities	(10,118)	-	(10,118)
Provisions for risks and charges (current portion)	(150)		(150)
Financial payables to banks - loans
(medium-/long-term portion)	(6,341)	-	(6,341)
Leasing payables (medium-/long-term portion)	(9,581)	-	(9,581)
Liabilities for employee benefits (severance indemnity
provision)	(4,693)	-	(4,693)
Deferred tax liabilities	(6,005)	(9,307)	(15,312)
Other non-current liabilities	(254)	-	(254)
Net assets acquired	59,147	20,334	79,481
Goodwill related to the acquisition			37,896
Total net assets acquired			117,377
Total amount paid in treasury stock			47,038
Total amount paid in cash			70,339
Total acquisition cost (A)			117,377
Acquired net financial indebtedness (B)			31,842
Total amount paid in cash			70,339
Total change in the net financial position including
changes in debt for the acquisition of investments			102,181

Capital employed (A) + (B)			149,219

The fair value measurement of property, plant and equipment and the brand, booked under intangible fixed assets, was carried out by independent valuers.

The acquisition cost differs from the contract price due to the different valuation of the treasury shares assigned, in compliance with the requirements of international accounting standards.

Inoxihp S.r.l.

			Carrying values in the
	Amounts	Adjustments	acquiring comp
€/000	acquired	to fair value	any
Cash and cash equivalents	1,843		1,843
Trade receivables	3,313	-	3,313
Inventories	2,536	-	2,536
Tax receivables	837	-	837
Other current assets	24	-	24
Property, plant and equipment	643	-	643
Other intangible assets	23	1,825	1,848
Deferred tax assets	269	-	269
Other non-current assets	49	-	49
Trade payables	(2,670)	-	(2,670)
Payables to banks	(34)	-	(34)
Financial payables to banks – loans
(current portion)	(674)	-	(674)
Tax payables	(1,416)	-	(1,416)
Other current liabilities	(484)	-	(484)
Financial payables to banks - loans
(medium-/long-term portion)	(789)	-	(789)
Liabilities for employee benefits (severance indemnity
provision)	(326)	-	(326)
Deferred tax liabilities	-	(573)	(573)
Net assets acquired	3,114	1,252	4,396
Goodwill related to the acquisition			21,963
Total net assets acquired			26,359
Total amount paid in treasury stock			2,139
Total amount paid in cash			6,471
Amount due in medium/long-term			17,749
Total acquisition cost (A)			26,359
Net financial indebtedness (cash) (e) acquired (e) (B)			(346)
Total amount paid in cash			6,471
Payable for commitment to acquire minority interests			17,749
Total change in the net financial position including
changes in debt for the acquisition of investments			23,874
Capital employed (A) + (B)			26,013

The value of the trade mark was measured by means of an internal appraisal. Fixed assets do not include any other significant valuation surpluses.

The acquisition cost differs from the contract price due to the different valuation of the treasury shares assigned, in compliance with the requirements of international accounting standards.

Bertoli S.r.l.

			Carrying values in the
	Amounts	Adjustments	acquiring comp
€/000	acquired	to fair value	any
Cash and cash equivalents	1,724	-	1,724
Trade receivables	3,207	-	3,207
Inventories	3,742	-	3,742
Tax receivables	178	-	178
Other current assets	103	-	103
Property, plant and equipment	1,663	-	1,663
Other intangible assets	45	-	45
Other financial assets	22		22
Deferred tax assets	305	-	305
Other non-current assets	12	-	12
Trade payables	(2,574)	-	(2,574)
Financial payables to banks – loans
(current portion)	(212)	-	(212)
Leasing payables (current portion)	(281)	-	(281)
Tax payables	(540)	-	(540)
Other current liabilities	(1,003)	-	(1,003)
Provisions for risks and charges (current portion)	(118)	-	(118)
Leasing payables (medium-/long-term portion)	(428)	-	(428)
Liabilities for employee benefits (severance indemnity
provision)	(915)	-	(915)
Deferred tax liabilities	(178)	-	(178)
Net assets acquired	4,752	-	4,752
Goodwill related to the acquisition			2,549
Total net assets acquired			7,301
Total amount paid in cash			7,301
Total acquisition cost (A)			7,301
Net financial indebtedness (cash) (e)
acquired (e) (B)			(803)
Total amount paid in cash			7,301
Total change in net financial position			6,498
6Capital employed (A) + (B)			6,498

Osper

The amounts are shown in euro/thousands (the exchange rate used for translation of the financial statements is BRL 4,0171 / 1 euro, corresponding to the exchange rate in force on the day of the acquisition).

			Carrying values in the
	Amounts	Adjustments	acquiring comp
€/000	acquired	to fair value	any
Cash and cash equivalents	22	-	22
Trade receivables	408	-	408
Inventories	364	-	364
Tax receivables	24	-	24
Other current assets	75	-	75
Property, plant and equipment	1,244	452	1,696
Other intangible assets	3	618	621
Other financial assets	15		15
Trade payables	(344)	-	(344)
Financial payables to banks – loans
(current portion)	(10)	-	(10)
Tax payables	(21)	-	(21)
Other current liabilities	(215)	-	(215)
Net assets acquired	1,565	1,070	2,635
Goodwill related to the acquisition			1,418
Total net assets acquired			4,053
Total amount paid in cash			2,614
Total discounted amount due in medium/long-term			1,439
Total acquisition cost (A)			4,053
Net financial indebtedness (cash) (e) acquired (e) (B)			(12)
Total amount paid in cash			2,614
Debt discounted for extended payment of equity investments			1,439
Total change in net financial position			4,041
Capital employed (A) + (B)			4,041

The fair value measurement of property, plant and equipment and the brand, booked under intangible fixed assets, was carried out by independent valuers.

4. Inventories and breakdown of changes in the Allowance for inventories

	31/12/2015	31/12/2014
	€/000	€/000
Inventories gross value	265,791	200,399
Allowance for inventories	(27,154)	(17,936)
Inventories	238,637	182,463

Changes in the allowance for inventories were as follows:

	2015 €/000	2014 €/000
Opening balances	17,936	15,238
Exchange rate difference	655	558
Change to consolidation basis	8,601	627
Provisions for the year	2,439	2,513
Utilizations in the period due to surpluses	-	-
Utilizations in the year due to losses	(2,477)	(1,000)
Closing balance	27,154	17,936

5. Property, plant and equipment

Purchases and disposals

In 2015 Interpump Group acquired assets for €112,372k, of which €73,938k through the acquisition of equity investments (€81,183k in 2014, of which €39,775k through the acquisition of equity investments). Assets were disposed of in 2015 for a net book value of €/000 5,703 (€/000 3,685 in 2014). Divested assets produced a net capital gain of €/000 3,076 (€/000 1,519 in 2014).

Contractual commitments

At 31 December 2015 the Group had contractual commitments for the purchase of tangible assets in the amount of €3,509k (€287k at 31 December 2014).

6. Shareholders' equity

Share capital

The share capital is composed of 108,879,294 ordinary shares with a unit face value of 0.52 euro for a total amount of €56,617,232.88. Conversely, share capital recorded in the financial statements amounts to €56,032k because the nominal value of purchased treasury shares, net of divested treasury stock, was deducted from the share capital in compliance with the reference accounting standards. At 31 December 2015 Interpump Group S.p.A. held 1,125,912 shares in the portfolio, corresponding to 1.03% of the capital stock, acquired at an average unit cost of 11.6443 euro.

Treasury stock purchased

The amount of treasury stock held by Interpump Group S.p.A. is recorded in an equity provision. The Group acquired 2,542,395 treasury shares in 2015 for €/32,709k at an average price of €12.8654 (the Group purchased 3,819,682 treasury shares in 2014 for €38,299k).

Treasury stock sold

In the framework of the exercise of stock options a total of 1,771,724 options were exercised, resulting in a receipt of €8,166k (926,560 options were exercised for €4,626k in 2014). In addition, 4,925,854 treasury shares were divested in 2015 to pay part of the equity investments in Walvoil and Inoxihp, and for the acquisition of the residual interests in Hydrocontrol and Unidro Contarini (715,530 treasury shares divested in 2014 for the acquisition of equity investments).

Dividends

An ordinary dividend (coupon clipping date of 11 May) of 0.18 euro per share was distributed on 13 May 2015 (0.17 euro in 2014).

7. Financial income and expenses

The analysis is as follows:

	2015	2014
	€/000	€/000
Financial income
Interest income from liquid funds	519	601
Interest income from other assets	70	51
Financial income to adjust debt estimate for commitment
to purchase residual stakes in subsidiaries	32,056	742
Foreign exchange gains	10,438	6,579
Earnings from valuation of derivative financial instruments	206	146
Other financial income	32	25
Total financial income	43,321	8,144
Financial expenses
Interest expense on loans	5,944	6,636
Interest expense on put options	475	3,465
Financial expenses for adjustment of estimated debt for
commitment to purchase residual stakes in subsidiaries	390	4,693
Tobin Tax	268	-
Foreign exchange losses	8,609	4,326
Losses from valuation of derivative financial instruments	77	70
Other financial charges	248	314
Total financial expenses	16,011	19,504
Total financial expenses (income), net	(27,310)	11,360

The breakdown for Q4 is as follows:

	2015	2014
	€/000	€/000
Financial income
Interest income from liquid funds	152	170
Interest income from other assets	(4)	10
Financial income to adjust debt estimate for commitment
to purchase residual stakes in subsidiaries	19	15
Foreign exchange gains	2,350	1,862
Earnings from valuation of derivative financial instruments	25	28
Other financial income	-	5
Total financial income	2,542	2,090
Financial expenses
Interest expense on loans	1,411	1,444
Interest expense on put options	15	1,763
Foreign exchange losses	1,779	1,508
Financial expenses for adjustment of estimated debt for
commitments to purchase residual interests in subsidiaries	304	4,669
Losses from valuation of derivative financial instruments	4	-
Other financial charges	67	125
Total financial expenses	3,580	9,509
Total financial expenses (income), net	1,038	7,419

For the comment related to financial income to adjust the estimated debt for the commitment to acquire residual interests in subsidiaries, refer to the "Directors' remarks on performance in 2015" on page 13.

8. Earnings per share

Basic earnings per share

Earnings per share are calculated on the basis of consolidated profit for the year attributable to Parent Company shareholders, divided by the weighted average number of ordinary shares as follows:

Year (12 months)	2015	2014
Consolidated profit for the year attributable to Parent company shareholders (€/000)	116,322	56,936
Average number of shares in circulation	106,854,067	105,257,907
Basic earnings per share for the period (€)	1.089	0.541
Q4
Consolidated profit for the period attributable to Parent company shareholders (€/000)	15,358	7,560
Average number of shares in circulation	106,668,835	103,673,022
Basic earnings per share for the quarter (€)	0.144	0.073

Diluted earnings per share

Diluted earnings per share are calculated on the basis of diluted consolidated profit for the year attributable to the parent company's shareholders, divided by the weighted average number of ordinary shares in circulation adjusted by the number of potentially dilutive ordinary shares. The calculation is as follows:

Year (12 months)	2015	2014
Consolidated profit for the year attributable to Parent company shareholders (€/000)	116,322	56,936
Average number of shares in circulation	106,854,067	105,257,907
Number of potential shares for stock option plans (*)	1,491,735	2,006,055
Average number of shares (diluted)	108,345,802	107,263,962
Diluted earnings per share for the year (€)	1.074	0.531
Q4
Consolidated profit for the period attributable to Parent
company shareholders (€/000)	15,358	7,560
Average number of shares in circulation	106,668,835	103,673,022
Number of potential shares for stock option plans (*)	1,489,373	2,081,406
Average number of shares (diluted)	108,158,568	105,754,428

Earnings per diluted share for the quarter (€) 0.142 0.071

(*) calculated as the number of shares assigned for in-the-money stock option plans multiplied by the ratio between the difference between the average value of the share in the period and the exercise price at the numerator, and the average value of the share in the period at the denominator.

9. Transactions with related parties

The Group has relations with unconsolidated subsidiaries and other related parties at arm's length conditions considered to be normal in the respective reference markets, taking account of the characteristics of the goods and services rendered. Transactions between Interpump Group S.p.A. and its consolidated subsidiaries, which are related parties of the company, were eliminated in the interim consolidated financial statements and are not described in these notes.

The effects on the Group's consolidated income statements for 2015 and 2014 are shown below:

	2015
		Non				%
		consolidated		Other	Total	incidence
	Total	subsidiaries	Associates	related	related	on
(€/000)	Total			parties	parties	financial
						statements
						caption
Net sales	894,928	1,893	-	1,710	3,603	0.4%
Cost of products sold	577.3710	447	-	17,888	18,335	3.2%
Other revenues	13,133	18	-	-	18	0.1%
Distribution costs	84,321	38	-	1,284	1,322	1.6%
General and admin.
expenses	105,670	-	-	923	923	0.9%
Financial income	43,321	7	-	-	7	-
Financial expenses	16,011	-	-	2	2	-

	2014
		Non		Other	Total	% incidence
	Consolidated	consolidated	Associates	related	related	on financial
(€/000)	Total	subsidiaries		parties	parties	statement
						caption
Net sales	671,999	4,702	-	2,657	7,359	1.1%
Cost of products	426,585	403	-	18,103	18,506	4.3%
sold
Other revenues	12,563	3	-	2	5	0.0%
Distribution costs	68,074	210	-	1,429	1,639	2.4%
General and
admin.	80,517	-	-	768	768	1.0%
expenses
Financial income	8,143	9	-	-	9	0.1%
Financial expenses	19,504	-	-	8	8	0.0%

The effects on the consolidated statement of financial position at 31 December 2015 and 2014 are described below:

	31 December 2015
		Non				%
		consolidated		Other	Total	incidence
	Total	subsidiaries	Associates	related	related	on
(€/000)	Total			parties	parties	financial
						statements
						caption
Trade receivables	178,799	1,774	-	429	2,203	1.2%
Other current assets	7,807	4	-	-	4	0.1%
Other financial assets	1,025	218	-	-	218	21.3%
Trade payables	94,093	36	-	1,744	1,780	1.9%
Interest-bearing
financial payables
(current portion)	83,833	-	-	7	7	-
	31 December 2014
		Non				%
		consolidated
				Other	Total	incidence
	Total	subsidiaries	Associates	related	related	on
(€/000)	Total			parties	parties	financial
						statements
						caption
Trade receivables	135,634	3,915	-	392	4,307	3.2%
Other current assets	6,856	5	-	-	5	0.1%
Other financial assets	1,740	340	-	-	340	19.5%
Trade payables	80,273	101	-	3,049	3,150	3.9%
Interest-bearing
financial payables (current portion)	64,298	-		409	409	0.6%

Relations with non-consolidated subsidiaries

Relations with non-consolidated subsidiaries are as follows:

(€/000)	Receivables			Revenues
	31/12/2015	31/12/2014	2015	2014
Interpump Hydraulics Middle East*	-	2,464	-	3,103
Interpump Hydraulics (UK)	963	780	704	591
Interpump Hydraulics Perù	724	-	730	-
General Pump China Inc.	91	245	477	656
Hammelmann Bombas e Sistemas Ltda*	-	431	-	355
Total subsidiaries	1,778	3,920	1,911	4,705

* = fully consolidated at 31 December 2015

(€/000)	Payables		Costs
	31/12/2015	31/12/2014	2015	2014
General Pump China Inc.	36	44	485	454
Interpump Hydraulics Middle East*	-	2	-	2
Hammelmann Bombas e Sistemas Ltda*	-	55	-	157
Total subsidiaries	36	101	485	613
(€/000)	Loans		Financial income
	31/12/2015	31/12/2014	2015	2014
Interpump Hydraulics (UK)	218	205	7	7
Interpump Hydraulics Middle East*	-	105	-	2

Hammelmann Bombas e Sistemas Ltda* - 30 - - Total subsidiaries 218 340 7 9

* = fully consolidated at 31 December 2015

Relations with associates

The Group does not hold investments in associated companies.

Transactions with other related parties

Transactions with other related parties concern the leasing of facilities owned by companies controlled by the current shareholders and directors of Group companies for the amount of €4,899k (€5,002k in 2014) and consultancy services provided by entities connected with directors and statutory auditors of the Parent company for €140k (€102k in 2014). Costs for rentals were recorded under the cost of sales in the amount of €3,572k (€3,951k in 2014), under distribution costs in the amount of €796k (€82k in 2014) and under general and administrative expenses in the amount of €531k (€169k in 2014). Consultancy costs were allocated to distribution costs in the amount of €60k (€60k allocated to distribution costs also in 2014) and to general and administrative expenses in the amount of €80k (€42k in 2014). Revenues from sales in the year ended 31 December 2015 included revenues from sales to companies by Group shareholders or directors in the amount of €1,710k (€2,657k at 31 December 2014). In addition, the cost of sales includes purchases from subsidiaries by minority shareholders or Group company directors in the amount of €13,967k (€14,048k in 2014).

Moreover, further to the signing of building rental contracts with other related parties, at 31 December 2015 the Group has commitments of €16,812k (€21,495k at 31 December 2014).

10. Disputes, Potential liabilities and Potential assets

The Parent company and several of its subsidiaries are directly involved in several lawsuits in respect of limited amounts. It is however considered that the settlement of said lawsuits will not generate any significant liabilities for the Group that cannot be covered by the risk provisions that have already been created. There were no substantial changes with respect to the situation of disputes or potential liabilities existing at 31 December 2014.

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Interpump Group — Interim / Quarterly Report 2015

4294_ir_2016-03-14_8062fb91-7211-4406-a3b5-f664618cbd88.pdf

Contents

Board of Directors

Board of Statutory Auditors

Independent Auditors

KEY EVENTS OF 2015

Consolidated income statement for the year

NET SALES

PROFITABILITY

CASH FLOW

CAPITAL EXPENDITURE

INTERCOMPANY AND RELATED PARTY TRANSACTIONS

CHANGES IN THE GROUP STRUCTURE IN 2015

EVENTS OCCURRING AFTER THE CLOSE OF THE YEAR

Q4 consolidated income statements

NET SALES

PROFITABILITY

Consolidated balance sheet

Consolidated income statement for the year

Comprehensive consolidated income statements for the year

Q4 consolidated income statements

Comprehensive consolidated income statement for Q4

Consolidated cash flow statement for the year

Statement of changes in consolidated shareholders' equity

Notes to the consolidated financial statements

General information

Basis of preparation

Accounting standards

a) New accounting standards and amendments taking effect on 1 January 2015 and adopted by the Group

Notes to the consolidated Financial Statements at 31 December 2015

1. Consolidation basis and goodwill

2. Business sector information

Business sectors

Interpump Group business sector information

(Amounts shown in €/000)

Interpump Group business sector information

Financial position

3. Acquisition of investments

Walvoil Group

Inoxihp S.r.l.

Bertoli S.r.l.

Osper

4. Inventories and breakdown of changes in the Allowance for inventories

5. Property, plant and equipment

Purchases and disposals

Contractual commitments

6. Shareholders' equity

Share capital

Treasury stock purchased

Treasury stock sold

Dividends

7. Financial income and expenses

8. Earnings per share

Basic earnings per share

Diluted earnings per share

9. Transactions with related parties

Relations with non-consolidated subsidiaries

Relations with associates

Transactions with other related parties

10. Disputes, Potential liabilities and Potential assets

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Interpump Group Interim / Quarterly Report 2015