Salcef Group

Investor Presentation • Nov 15, 2023

9M 2023 Results Presentation

15 November 2023

Speakers

Valeriano Salciccia

Chief Executive Officer

Fabio De Masi

Chief Corporate and Financial Officer

Alessio Crosa

Chief Communication and Sustainability Officer

Key messages

• Approaching the end of 2023 with great confidence on the delivery of another remarkable year for the Group
• Revenue growth at 49% (of which 32% organic) supporting a topline already above the entire 2022
• EBITDA at € 115.5 mln confirming stable profitability vs. 1H at 20.4%
• Backlog reaching € 2.02 Bn further growing vs. 1H thanks to the consolidation of Colmar and a solid order intake mainly in Italy
• 2023 Revenues now expected to be between 30% and 35% higher than 2022 on the back of an even stronger organic growth

1. Figure at 30 September 2023 does not consider: fair value change on financial investments (€ 4.4 million); final installment paid in August 2023 for the acquisition of FVCF (€ 3 million); payment for the acquisition of Colmar Technik (€ 23.8 million); liquidity used in 2023 for the buy-back programme (€ 15.5 million); amounts subject to precautionary seizure in proceedings against some subsidiaries. (€ 3.5 million)

9M 2023 Highlights

€ Mln

Backlog

4

Revenues

€ Mln

• Consolidated Revenues at € 567.9 Mln, up 47.2% YoY
  • Outstanding organic growth at 32.0%
  • Contribution of Francesco Ventura Costruzioni Ferroviarie (€ 45.6 Mln) in Track & Light Civil Works and first consolidation of Colmar (€ 1.9 Mln) in line with plan

	9M 2023	9M 2022	Δ (%)
Track and Light Civil Works	348.2	253.9	37.1%
Energy, Signalling & Telecom	76.4	58.7	30.2%
Heavy Civil Works	79.3	22.0	260.7%
Rail Grinding & Diagnostics	16.5	9.8	68.7%
Railway Materials	36.6	30.3	20.9%
Railway Machines	10.8	11.1	(3.0%)
Total	567.9	385.8	47.2%

61.3%	Track & Light Civil Works (65.8% in 9M 2022)
13.5%	Energy, Sign. & Telecom (15.2% in 9M 2022)
14.0%	Heavy Civil Works (5.7% in 9M 2022)
2.9%	Rail Grinding & Diagnostics (2.5% in 9M 2022)
6.4%	Railway Materials (7.8% in 9M 2022)
1.9%	Railway Machines (2.9% in 9M 2022)

Revenues by Geography

€ Mln

• Domestic revenues continue their growth at +55.6% (36.6% organic)
• North America confirmed its growth at +76.2% organic, consolidating as the second market for the Group

	9M 2023	9M 2022	Δ (%)
Italy	483.2	310.6	55.6%
Europe [Excluding Italy]	28.2	34.4	(17.8%)
North America	54.5	30.9	76.2%
Middle East	2.0	4.2	(52.5%)
North Africa	0	5.8	n.m.
Total	567.9	385.8	47.2%

85.1%	Italy (80.5% in 9M 2022)
5.0%	Europe (excl. Italy) (8.9% in 9M 2022)
9.6%	North America (8.0% in 9M 2022)
0.3%	Middle East (1.1% in 9M 2022)
0%	North Africa (1.5% in 9M 2022)

Economic and Financial KPI

€ Mln	9M 2023	9M 20221	Δ (%)
Revenues	567.9	385.8	47.2%
EBITDA	115.5	77.5	49.1%
EBITDA Margin	20.4%	20.1%	-
D&A	(38.2)	(26.5)	44.2%
EBIT	77.3	51.0	51.7%
EBIT Margin	13.6%	13.2%	-
Adjusted Net Financial Income (Expenses)*	(6.8)	2.8	n.m.
Adjusted EBT	70.5	53.8	31.1%
Adjusted Income Taxes**	(18.8)	(14.8)	26.7%
Adjusted Net Profit	51.7	38.9	32.9%

* Fair value change of financial investments	2.6	(10.1)	n.m.
** DTA reversal related to fair value change of financial investments and revaluations	(3.0)	(0.8)	n.m.
Net Profit	51.3	28.0	83.3%

Net Financial Position2 Adjusted	7.1	26.03	(72.8%)

• EBITDA Margin stable in line with expectations confirming resilience and despite the expansion of the consolidation scope with the recent acquisitions (in particular FVCF and Colmar)
• Higher D&A on the back of higher Capex made both in 2022 and 9M 2023 in line with the Group's Capex plan. 9M 2023 and 9M 2022 D&A include the depreciation of the intangible assets following the purchase price allocation related to the acquisition of the railway business unit of PSC Group

P&L adjustments related to:

• Change in fair value of financial investments
• DTA reversal
• Tax rate at 26.7% in line with expectations

• Adjusted NFP at € 7.1 Mln (Net Cash). NFP negative for € 43.1 Mln

• Figures, where applicable, has been restated to retroactively reflect the effects resulting from the completion of the purchase price allocation related to the acquisition of the railway business unit of PSC Group, in accordance with the accounting principles in force

7 2. Does not consider: fair value change on financial investments (€ 4.4 million); final installment paid in August 2023 for the acquisition of FVCF (€ 3 million); payment for the acquisition of Colmar Technik (€ 23.8 million); liquidity used in 2023 for the buyback programme (€ 15.5 million); amounts subject to precautionary seizure in proceedings against some subsidiaries. (€ 3.5 million)

1. Figure at 31 December 2022

Adjusted NFP at 30 September 2023

€ Mln

Features of financial debt:

• Duration: approx. 36 months
• Average of replacement: rolling
• Structure: Corporate

Backlog

€ Mln

• Backlog¹ further up at € 2.02 Bn, of which € 1,431 mln (70.8%) from Italian market and € 591 mln (29.2%) from foreign markets
• Compared to 1H 2023, higher domestic order intake brings the Italian component back at above 70%. In 3Q important growth of Railway Materials, Heavy Civil Works and Railway Machines, which benefitted form the consolidation of Colmar (€ 28 Mln) and from new contracts in the US
• Track & Light and Civil Works and Energy Signalling & Telecommunication confirmed as the core Business Units, with 86.8% of the total backlog

The Backlog covers 3.58 years of equivalent production

Business Unit		Amount	%
Track & Light Civil Works		1,353,316	66.9%
	of which Foreign	563,643	27.9%
Energy, Signalling & Telecom		402,795	19.9%
	of which Foreign	2,458	0.1%
Rail Grinding & Diagnostic		9,358	0.5%
	of which Foreign	0
Railway Materials		72,992	3.6%
Heavy Civil Works		135,548	6.7%
	of which Foreign	19,723	1.0%
Railway Machines		48,707	2.4%
	of which Foreign	5,467	0.3%
Total		2,022,718	100.0%
	Italy	1,431,427	70.8%
	Foreign	591,291	29.2%

2023 Outlook

• Business volumes expected to growth between 30% and 35% YoY (~ 20% organic), mainly driven by:
  • Better than expected contribution from Francesco Ventura Costruzioni Ferroviarie as well as 4-month contribution of business unit acquired from PSC
  • 5-month consolidation of the newly acquired Colmar Technik for approximately € 5 Mln
  • Further growth of the core business in Italy, with execution of the track works and energy Framework Agreements with RFI and of traditional and urban maintenance and renewal contracts for other customers
  • Construction activities on the Verona-Padua High Speed line
  • Ramp up of the activities on the ERTMS contract in Italy
  • Boost of US activities on the back of the execution of new contracts signed in 2022
• EBITDA margin is expected to remain broadly in line with 9M 2023, factoring in the effect of the integration of FVCF and Colmar
• Capex expected at approx. € 65 mln further up compared to 2022 to sustain organic growth. At the 9M stage, Capex at approx. € 48 mln

Q&A

Appendix

Focus on Capex

€ Mln

• 2023 Capex expected materially higher YoY reaching the peak at € 64.6 mln (+35%)
  • Ordinary business flat confirming historical trend
  • Business Upgrade mainly focused on new machines for Track & Light Civil Works and Rail Grinding & Diagnostics (€ 18 mln)
  • Approx. € 10 mln for the development of new production plants for Railway Machines and Railway Materials

Ordinary Business: investments to maintain of existing production capacity, the quality standards required by customers and the achievement of budget objectives Business upgrade: investments to upgrade existing production lines, with new plants, machinery or equipment, allowing for an increase in production capacity New business line: investments related to the design and production of new products in order to open new strategic business lines

Disclaimer

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This Presentation may contain forward-looking statements about the Company, and/or the group headed by Salcef (the "Group"), based on current expectations and opinions developed by the Company, as well as based on current plans, estimates, projections and projects of the Group. Forward looking statements include (but are not limited to) statements identified generally by the use of terminology such as "may", "will", "should", "plan", "expect", "anticipate", "estimate", "believe", "intend", "project", "goal", "aim", "foresee", or "target" or the negative of these words or other variations on these words or comparable terminology. By their nature, forwardlooking statements are based upon various assumptions, expectations, projections, provisional data, many of which are based, in turn, upon further assumptions, including, without limitation, examination of historical operating trends and other data available from third parties. Projections, estimates and targets presented herein are based on information available to Salcef as at the date of this Presentation. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of the Company and/or the Group to control or estimate. You are cautioned not to place undue reliance on the forward-looking statements or other information contained in this Presentation. The information contained herein has a merely informative and provisional nature and does not constitute investment, legal, accounting, regulatory, taxation or other advice. This Presentation speaks as of the date hereof and the information contained herein is provided as at the date of this Presentation and, except to the extent required by applicable law, Salcef nor any other person is under any obligation to update and keep current this Presentation, nor the information contained in this Presentation or any other written, electronic or oral information provided in connection with this Presentation. The information contained herein may be subject to updating, completion, revision and amendment and may change materially without notice. Any reference to past performance or trends or activities of Salcef or the Group shall not be taken as a representation or indication that such performance, trends or activities will continue in the future.

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Contacts

Alessio Crosa Chief Communication and Sustainability Officer

Tel: +39 06 416281 E-mail: investor.relations@salcefgroup.com

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