9M 2022 Results Presentation

15 November 2022

Speakers

Valeriano Salciccia Chief Executive Officer

Fabio De Masi Chief Financial Officer

Alessio Crosa IR & Sustainability Manager

Key messages

Revenue growth above expectations, with 3Q as the best quarter ever for the Group
Backlog confirmed at € 1.35 Bn
Profitability flat QoQ at above 20%, confirming resilience of the business and managerial discipline
FY 2022 revenues expected to grow by around 20% YoY, with EBITDA margin flat at the 9M level

9M 2022 Highlights

2022 figure does not consider the fair value change on financial investments and the down payment on the Verona-Padua HS line contracts. Reduction vs. YE 2021 mainly attributable to the approx. € 25 mln paid to the PSC Group for the acquisition of the railway business unit and dividend paid for € 28.5 mln

Revenues

€ Mln

Consolidated Revenues at € 385.8 Mln, up 20.7% YoY mainly due to:
- Organic growth at 14.4%, mainly supported by Track & Light Civil Works (13.6%) and Energy, Signalling & Telecom (23.2%)
- Expected ramp-up of the Verona-Padua HS line contract in Heavy Civil Works, which more than offset the termination of material projects in 2021
- Contribution of Bahnbau Nord (€ 13.1 Mln¹ ) in Track & Light Civil Works and of the recently acquired business unit of the PSC Group (€ 7.0 mln) in Energy, Signalling & Telecom

	9M 2022	9M 2021	Δ (%)
Track and Light Civil Works	263.7	220.6	19.6%
Energy, Signalling & Telecom	58.7	41.9	39.9%
Heavy Civil Works	22.0	20.5	7.4%
Railway Materials	30.3	29.0	4.5%
Railway Machines	11.1	7.7	44.0%
Total	385.8	319.7	20.7%

68.4%	Track & Light Civil Works (69.0% in 9M 2021)
15.2%	Energy, Sign. & Telecom (13.1% in 9M 2021)
5.7%	Heavy Civil Works (6.4% in 9M 2021)
7.8%	Railway Materials (9.1% in 9M 2021)
2.9%	Railway Machines (2.4% in 9M 2021)

Focus on Business Units (1/3)

Track & Light Civil Works

9M 2022 Revenues at € 263.7 Mln, up 19.6% YoY mainly due to:

Activities within the new 3-year framework agreements with RFI
Light civil works in Italy
Construction contracts in the US
2 new track renewal framework agreements signed in Romania worth from a minimum of approx. € 70 Mln up to a maximum of approx. € 235 Mln

Focus on Business Units (2/3)

Energy, Signalling & Telecommunication

9M 2022 Revenues at € 58.7 Mln, up 39.9% YoY mainly due to:
- Consolidation of the railway business unit acquired by PSC Group
- Growing contribution from Germany and from the new contracts acquired in 2021
Signalling activities increasing their weight in the business, now at approx. 6% of the total
New contracts with Terna in the Power Transmission business for cumulative € 25 Mln

Focus on Business Units (3/3)

Heavy Civil Works

9M 2022 Revenues at € 22 . 0 Mln , up 7 . 4 % YoY mainly due to the expected contribution from the Verona -Padua HS line contract
New € 3 mln contract acquired in Germany for the construction of a railway bridge

Railway Materials

9M 2022 Revenues at € 30 . 3 Mln , up 4 . 5 % YoY
First test installation of FAST System completed and successful

Railway Machines

9M 2022 Revenues at € 11 . 1 Mln , up 44 . 0 % YoY mainly due to the recovery of the activities in the US
New building acquired for the construction of an additional production plant

Revenues by Geography

€ Mln

Domestic revenues materially growing 32.5% (29.5% organic)
Recovery in North America proceeding in line with expectations
Slow-down in Middle East / North Africa, with the lower production in Abu Dhabi partially offset by increasing activities in Egypt

	9M 2022	9M 2021	Δ (%)
Italy	310.6	234.5	32.5%
Europe [Excluding Italy]	34.4	25.5	34.5%
North America	30.9	32.0	(3.4%)
Middle East	4.2	24.3	(82.9%)
North Africa	5.8	3.3	75.6%
Total	385.8	319.7	20.7%

80.5%	Italy (73.4% in 9M 2021)
8.9%	Europe (excl. Italy) (8.0% in 9M 2021)
8.0%	North America (10.0% in 9M 2021)
1.1%	Middle East (7.6% in 9M 2021)
1.5%	North Africa (1.0% in 9M 2021)

Economic and Financial KPI

€ Mln

	9M 2022	9M 2021	Δ (%)
Revenues	385.8	319.7	20.7%
EBITDA	77.5	71.5	8.4%
EBITDA Margin	20.1%	22.4%	-
D&A	(25.8)	(19.8)	30.4%
EBIT	51.7	51.7	Unch.
EBIT Margin	13.4%	16.2%	-
Adjusted Net Financial Income (Expenses)*	2.8	1.6	75.2%
Adjusted EBT	54.5	53.3	2.3%
Adjusted Income Taxes**	(15.0)	(14.3)	5.0%
Adjusted Net Profit	39.5	39.0	1.2%

* Fair value change of warrant and financial investments	(10.1)	(9.7)	3.5%
** DTA reversal related to revaluations and non-recurring tax expenses	(0.9)	(2.4)	(64.4%)
Net Profit	28.5	26.9	6.2%

Adjusted Net Financial Position¹ 70.5 114.5² (38.5%)

EBITDA Margin down 2.3 p.p. vs. 9M 2021. Flat vs. 1H 2022 confirming resilience in the current context of higher production costs
Higher D&A on the back of higher Capex made both in 2021 and in 9M 2022 in line with the Group's Capex plan
P&L adjustments related to:
- Change in fair value of financial investments and, only for 2021, of the warrant
- DTA reversal
Tax rate at 27.5%
Adjusted NFP at € 70.5 Mln (Net Cash) include the approx. € 25 mln paid to the PSC Group for the acquisition of the railway business unit and dividend paid for € 28.5 mln
Figure at 31 December 2021

^1. 2022 figure does not consider the fair value change on financial investments and the down payment on the Verona-Padua HS line contracts

Adjusted NFP at 30 September 2022

€ Mln

Backlog¹ flat at record € 1.35 Bn, of which € 1,080 mln (80.0%) from Italian market and € 270 mln (20.0%) from foreign markets
Overall weight of domestic backlog still impacted by the different time frame of Italian contracts, typically longer than foreign ones. Compared to 1H 2022, slight increase of the international component due to the contracts signed in Romania
Track & Light and Civil Works and Energy Signalling & Telecommunication confirmed as the core Business Units, with 86.4% of the total backlog
Book-to-bill ratio at 1.39x

Business Unit	Amount	%
Track and Light Civil Works	855.6	63.4%
of which Foreign	259.9	19.3%
Energy, Signalling & Telecom	310.0	23.0%
of which Foreign	2.2	0.2%
Heavy Civil Works	144.8	10.7%
of which Foreign	5.8	0.4%
Railway Machines	4.2	0.3%
of which Foreign	2.0	0.1%
Railway Materials	35.2	2.6%
Total	1,349.9	100.0%
Italy	1,079.9	80.0%
Foreign	270.0	20.0%

Does not include agreements between Group companies, to be considered intercompany

2022 Outlook

Business volumes expected to growth by around 20% YoY (~ 15% organic), mainly driven by:
- Execution of the contracts for the Verona-Padua high-speed line
- Consolidation within the Energy, Signalling & Telecommunication BU of the recently acquired business from May 2022
- Further growth of the core business in Italy
- No exposure to Russia or other countries involved in EU sanctions
In the current scenario and excluding any further deterioration, EBITDA margins for 2022 expected to remain broadly in line with 9M level, with higher EBITDA in absolute terms
2022 Capex expected at € 48 mln (€ 41 mln at 9M stage) with a strong focus on strengthening the production capacity and developing new businesses

Q&A

Appendix

Active in the railway sector for more than 70 years

Market scouting for additional M&A opportunities

Focus on Italian National Recovery and Resilience Plan (1/3)

Mission 3 Infrastructure for a sustainable mobility Component 1: Investments on railway network Component 2: Integrated Logistics € 31.5 Bn € 24.8 Bn € 0.6 Bn EU Recovery and Resilience Facility (RRF) Complementary Fund € 3.2 Bn € 2.9 Bn TOTAL € 28 Bn € 3.5 Bn

2020-2021 overall expenditure at € 2.5 Bn, higher than the € 2.3 Bn budget

	TOTAL	2020	2021	2022	2023	2024	2025	2026
1.1 High-speed railway connections to the South for passengers and freight	4,640	52	125	359	748	919	1,125	1,313	TARGET: 274 km of new HS lines
Napoli - Bari	1,400	30	80	143	180	271	352	344
Palermo - Catania - Messina	1,440	22	25	100	199	283	439	372
Salerno - Reggio Calabria	1,800	0	20	116	369	365	334	596
1.2 High-speed lines	8,570	550	881	904	758	2,030	1,935	1,512	TARGET: 274 km of new HS lines
Brescia - Verona - Padova	3,670	152	341	440	76	900	1,096	665
Liguria - Alpi	3,970	398	532	454	636	886	559	505
Verona - Brennero	930	0	8	10	46	244	280	342
1.3 Cross-country connections	1,580	2	9	52	175	301	427	614	TARGET: 87 km of new lines
Orte - Falconara	510	0	1	27	61	92	125	204
Roma - Pescara	620	0	2	16	57	125	186	234
Taranto - Metaponto - Potenza - Battipaglia	450	2	6	9	57	84	116	176
1.4 ERTMS	2,970	0	50	299	425	563	705	928	TARGET: 3,400 km of lines equipped with ERTMS
1.5 Upgrading metropolitan railway junctions and key national rail networks	2,970	172	189	280	320	616	715	680	TARGET: 1,280 km of lines upgraded
1.6 Upgrading regional railways	936	41	116	30	158	254	152	185	TARGET: 680 km of lines enhanced
1.7 Improvement, electrification and more resilience for Southern railways	2,400	0	53	187	217	506	700	737	TARGET: 573 km of lines enhanced
1.8 Enhancement of Southern Italian train stations	700	0	21	64	103	195	192	125	TARGET: 54 stations upgraded
	24,766	817	1,443	2,175	2,903	5,384	5,951	6,094

Focus on Italian National Recovery and Resilience Plan (2/3)

Mission 3 Infrastructure for a sustainable mobility	EU Recovery and Resilience Facility (RRF)	Complementary Fund	TOTAL
Component 1: Investments on railway network	€ 24.8 Bn	€ 3.2 Bn	€ 28 Bn	€ 31.5 Bn
Component 2: Integrated Logistics	€ 0.6 Bn	€ 2.9 Bn	€ 3.5 Bn

	TOTAL	2020	2021	2022	2023	2024	2025	2026
Upgrading regional railways (which are not owned/operated by RFI)	1,550	0	150	360	405	377	248	10
of regional railways Securing	454
Upgrade and renewal of rolling stock fleet	278
Enhancement of regional rail network with simultaneous upgrade and/or renewal of rolling stock fleet	140
Enhancement of regional railways	677
Renewal of rolling stock	200	0	60	50	40	30	20	0
Safe roads - Implementation of a dynamic monitoring system for remotely controlling bridges, viaducts and tunnels (A24-A25)	1,000	0	150	150	90	337	223	50
Safe roads - Implementation of a dynamic monitoring system for remotely controlling bridges, viaducts and tunnels (ANAS)	450	0	25	50	100	100	100	75
	3,200	0	385	610	635	844	591	135

Already allocated through a decree of the Ministry of sustainable infrastructures and mobility, to 29 projects, with the overall amount allocated 81% to the South and 19% to the Centre-North
With the only exceptions of the upgrade and renewal of the rolling stock fleet and some technological works in the signalling field, all the other projects are potentially in the scope of Group's core business

Focus on Italian National Recovery and Resilience Plan (3/3)

Mission 2 Green revolution and ecological transition		Complementary Fund	TOTAL	€ 59.5 Bn
Component 2: Renewable Energy, hydrogen, power grids and sustainable mobility	€ 23.8 Bn	€ 1.4 Bn	€ 25.2 Bn

	TOTAL	2021	2022	2023	2024	2025	2026
cycling 4.1 Encouraging	600	0	130	225	100	80	65
Rapid 4.2 mass transportation development	3,600	180	476	709	967	738	530
Installation of eletric charging 4.3 infastructure	741	0	0	400	150	141	50
of bus fleets and 4.4 Renovation green trains	3,639	0	440	594	931	979	695
	8,580	180	1,045	1,928	2,148	1,939	1,340

€ 0.7 Bn for 11 km of new subways, rolling stock and technical/civil works

TRAMWAYS

€ 2 Bn for 85 km of new tramways, rolling stock and technical/civil works

TROLLEY WAYS and FUNICULARS

€ 0.9 Bn for 120 km of new trolley ways and 15 km of new funiculars

Projects will be mainly focused on the metropolitan areas of the major Italian cities.
Expenditures have been already agreed between the Ministry of sustainable infrastructures and mobility and the Local Authorities. Final Decree expected soon

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Contacts

Alessio Crosa Investor Relations & Sustainability Manager

Tel: +39 06 416281 E-mail: [email protected]

Bloomberg: SCF:IM Reuters: SCFG.MI Borsa Italiana: SCF

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