Salcef Group

Investor Presentation • Jan 24, 2024

Company Presentation

Mediobanca 6th Italian Mid Cap Conference

Milan, 24 January 2024

Speakers

Fabio De Masi Chief Corporate & Financial Officer

Alessio Crosa

Chief Communication & Sustainability Officer

Salcef Group Overview 01

9M 2023 Results 04

Business Units 02

Sustainability at Salcef 05

Sector and Market highlights 03

Useful documents & Contacts 06

Salcef Group Overview

Salcef Group in a nutshell

Active in the railway sector for more than 70 years

3 years afer the IPO: A different shape with the same goal…

€ Mln

…continue growing with financial and operative discipline to deliver return to our shareholders

1. 2020 and 2021 adjusted to exclude the impact on financial expenses of the fair value gains and losses on the "warrant in compendio e integrativi" and the tax impact of the reversal of deferred tax assets on revaluations. 2022 adjusted to exclude the tax impact of the reversal of deferred tax assets on revaluations and to exclude the impact on financial expenses of the fair value change on financial investments

2022 vs. 2019

2022 vs. 2021

A unique business model to provide 360° solutions to the industry

Overview of our strategic markets

	ITALY	GERMANY	UNITED STATES
ORK WAY W RAIL NET	~ 24,500 km	~ 50,000 km	~ 221,000 km Almost entirely owned and managed by Class I railroads1
MPETITIVE O ARI SCEN O C	Few competitors with domestic operations mainly focused on specific areas	Very fragmented, with few big players and a number of small/micro local companies	Very fragmented, with big players and smaller companies with state-wide focus
MERS N AI O M CUST	(100% state-owned)	(100% state-owned)	Class I Local Transit railroads Authorities (100% state-owned)
ONTRACTS OF TYPE C	Mainly long-term contracts with framework agreement approach	Significant number of single-activity contracts of relatively small size	Mainly significant number of single-activity contracts of relatively small size. Type may depend on the customer
OCESS DER TEN PR	Public Tenders only	Public Tenders only	Public Tenders and private negotiations
MENT CURRENT PLANS NVEST I	• FS Investment Plan 2022-2031 (€ 110 Bn to the railway infrastructure). New PCO forecasting +80% in maintenance spending (€ 5,1 Bn extraordinary in 2022-2024 and € 1 Bn ordinary per year) See • NRPP 2020-2026 (€ 28 Bn) dedicated slides	DB Investment Plan 2020-2030 (€ 86 Bn)	\$ 1.2 Tn US Bipartisan Infrastructure Deal (\$ 66 Bn for passenger rail and \$ 39 Bn for public transit)

Strategy highlights

Strengthening of the competitive positioning

• Non-organic growth in the key strategic countries for the Group (Italy, Deutschland, US)

Diversification of the business

• Widen Group presence mainly in the railway industry and also in adjacent sectors characterized by same technological background but different customer bases and markets

Investments in new high technology products and on efficiency of current fleet

• Ordinary Business: maintenance of existing production capacity
• Business upgrade: new plants, machinery or equipment to increase production capacity
• New business line: design and production of new products to open new strategic business lines

ESG priorities

• Environmental: Invest in more efficient operations to reduce emissions, also using more energy from renewable sources
• Social: Assure best-in-class working conditions within and outside the organization, providing employees and collaborators with growth opportunities and implementing organizational and control systems to make operations safer
• Governance: Adopt industry-leading management systems and promote a sustainability culture among all the stakeholders

Business Units

Track & Light Civil Works

Track Maintenance Track Construction

Extraordinary Maintenance

Track & Light Civil Works

Light Civil Works

Ordinary Maintenance

Track & Light Civil Works

Strenghts

• High barriers to entry
• Huge equipment investments
• (Salcef fleet substitution value over than € 500 mln)
• Manpower specialization
• Clients' PQ and certifications
• Highly demanding working conditions

Served Markets

Energy, Signalling & Telecommunication

Energy, Signalling & Telecommunication

Activities

• Railway catenary, signalling, substations, telecommunication construction, ordinary & extraordinary maintenance (renewal activities)
• Construction and maintenance of infrastructure for high and medium voltage electricity transmission (aerial and underground)

Strenghts

• High barriers to entry
• Clients' PQ and certifications
• Highly demanding working conditions
• Huge Italian and European investment plan (Terna 2023 Plan with € 21.0 Bn investments, + 17% vs. previous Plan)

Catenary Power Transmission (HV & MV) Signalling Substations

Heavy Civil Works

Heavy Civil Works

Activities

• Multidisciplinary railway construction projects (civil and technological works)
• Doubling of existing railway line
• Construction of railway stations and buildings
• Bridges, viaducts and tunnels
• Environmental mitigation works

Strenghts

• Vertical integration with other Salcef Group BUs
• Salcef Group competitiveness, and all the qualifications for general and specialized works

Served Markets

Rail Grinding & Diagnostics

Rail Grinding & Diagnostics

Activities

• Rail and turnout grinding
• Rail Diagnostics

• Current Group's fleet for grinding activities is made of 6 Vulcano series rail grinders and a smaller grinder, all built internally by SRT
• Vulcano rail grinders, in their Heavy and Light versions, are designed with modular principles to assure high productivity. Thanks to their flexibility they can be adapted for operation on all the lines, from High Speed to metro, tramlines and narrow-gauge railways

Strenghts

• Vertical Integration with Track & Light Civil Works BU
• All-inclusive solutions
• High production capacity thanks to high performance engines and grinding motors
• Extremely accurate measuring system to optimize solutions and maximize results
• Environmental Sustainability with Stage V engines and dust extraction system

Railway Materials

Railway Materials

Activities

• Manufacturing of prestressed concrete railway sleepers
• Manufacturing of slab-track systems for unballasted tracks (metro, tramway and railway)
• Manufacturing of concrete segments for tunnels (metro lines)

Strenghts

• Clients' PQ and certifications
• Vertical Integration with Track & Light Civil Works BU
• Extensive development possibilities for unballasted solutions
• Development of new solution and patents

Railway Machines

• Design of new railway equipment and construction technologies
• Maintenance and revamping of railway equipment
• Construction of new railway wagons and equipment
• Renting of equipment and tool

Activities Strenghts

• Clients' PQ and certifications
• Vertical integration with Track & Light Civil Works, Energy, Signalling & Telecommunication and Rail Grinding & Diagnostics BUs
• Market with high margin and few competitors
• Development of new solutions and patents

Served Markets

A strategic acquisition to strengthen Railway Machines

Engineering

• Pre-feasibility and feasibility studies
• Preventive technical tests and market research into materials
• Topographic surveys
• Environmental impact studies
• Project management and engineering consulting services

Activities Strenghts

• Clients' PQ and certifications
• Vertical integration with Track & Light Civil Works and Energy, Signalling & Telecommunication BUs
• Development of new solutions and patents

FY 2022 operational update

• 150 projects designed

• 600 km of infrastructure designed

Served Markets

Sector & Market Highlights

Railway infrastructure sector supported by global macrotrends

High barriers to entry, mainly due to availability of operating fleet and highly-specialized workforce as well as specific qualifications required by customers

Great visibility thanks to few multi-year contracts

Counter-cyclical business, especially in its maintenance component

Long-term investments in construction, upgrade and renewal of rail infrastructures structurally growing globally

Italian expertise in the sector among the best in the world

Technologies and capabilities in common with adiacent sectors

Sustainable mobility at the core of Governments' policies worldwide, with railways increasingly chosen for urban/ short-medium haul passenger transportation and for logistics

EU Green Deal seeks a 90% reduction in GHG emissions in transportation by 2050

Italian Recovery and Resilience Plan with 28 € Bn to the railway sector by 2026 and 2022-2031 FS Industrial Plan with € 110 Bn to the railway infrastructure

US "Bipartisan Infrastructure Deal" includes 66 \$ Bn to improve and expand the nation's passenger and freight rail network and 39 \$ Bn for the upgrade of public transit over a decade

Germany investing 86 € Bn in the upgrade of its rail network 2021-2030

World Rail Supply Market expectations until 2027 – by geography

• World rail supply market expected to grow at a 3.0% CAGR, reaching an average yearly spending of approx. € 211 Bn in the 2025- 2027 period (+19,3% vs 2019-2021)
• Africa / Middle East and Eastern Europe are expected to have the strongest growth, while Asia Pacific and Eastern Europe are confirmed as the biggest contributor to the global market (32% and 30% respectively)

World Rail Supply Market expectations until 2027 – by sector

Services

• Infrastructure Services market (which accounts for 23% of the total services market and includes labour and parts for maintaining railway superstructure) is expected to grow by 1.9% reaching € 17.6 Bn per year in 2025-2027
• Biggest growth in NAFTA countries at 2.9%, the only area where infrastructure services are expected to grow more than rolling stock services. Eastern Europe, Africa / Middle East / Western Europe follow with 2.0%, 1.7% and 1.6% CAGR respectively

Infrastructure

• Infrastructure market (which includes all components of ballastless / ballast track and electrification while excludes all the civil works) is expected to grow by 3.8% reaching € 42.1 Bn per year in 2025-2027
• Superstructure growth mainly driven by Very High Speed (7.2%), followed by Urban (3.4%) and Mainline/Freight (3.0%), which remains by far the biggest component (57% of the total)
• Electrification (~56% of the track kilometres are not electrified, ~50% in Europe and ~28% in Italy) is the segment with the highest growth rates: 7.5% for Mainline/Freight, 4.6% for VHS and 3.4% for Urban
• Eastern Europe will grow by 8.7% (with Romania at 3.0%), Africa/Middle East by 4.1% (with remarkable 28.3% in Saudi Arabia) and Western Europe by 4.7%. 1.2% growth in Asia Pacific mainly Driven by Australia while 3.9% growth in NAFTA countries mainly driven by US (3.9%)

Rail Control

• Rail control market (which includes rail control and signalling solutions, communication equipment, operational control systems and route control systems) is expected to grow by 3.4% reaching € 22.2 Bn per year in 2025-2027
• Africa/Middle East and Eastern Europe are expected to have the highest growth (8.2% and 6.8% respectively). Western Europe is predicted to grow by 4.2%, amounting to 31% of the total market

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

Source: www.italiadomani.it and http://documenti.camera.it/leg18/dossier/pdf/DFP28a.pdf?\_1636745460912

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	€ 31.5 Bn
Component 1: Investments on railway network	€ 24.8 Bn	€ 3.2 Bn	€ 28 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
Securing of regional railways	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
of Renewal rolling stock	200	0	60	50	40	30	20	0
Safe of roads - Implementation a system for dynamic monitoring remotely controlling bridges, viaducts and tunnels (A24-A25)	1,000	0	150	150	90	337	223	50
Safe of roads - Implementation a system for dynamic monitoring 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)

Component 2: Renewable Energy, hydrogen, power grids and sustainable mobility	€ 23.8 Bn	€ 1.4 Bn	€ 25.2 Bn	€ 59.5 Bn
Mission 2 Green revolution and ecological transition	EU Recovery and Resilience Facility (RRF)	Complementary Fund	TOTAL

	TOTAL	2020	2021	2022	2023	2024	2025	2026
Encouraging cycling 4.1	600	0	0	130	225	100	80	65
4.2 Rapid mass transportation development	3,600	0	180	476	709	967	738	530
of 4.3 Installation eletric charging infastructure	741	0	0	0	400	150	141	50
Renovation of bus fleets and 4.4 green trains	3,639	0	0	440	594	931	979	695
	8,580	0	180	1,045	1,928	2,148	1,939	1,340

SUBWAYS
€ 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

€ 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

Additional € 4.7 Bn (of which € 4.3 Bn from 2022 Budget Law) allocated by the Ministry of Infrastructure and Sustainable Mobility to the development of Subways and Tramways in Rome, Milan, Genova, Naples and Turin

9M 2023 Results

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

40

Backlog

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

43 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
• Book-to-bill ratio at 1.57x
• 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

Focus on Capex

• 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

Sustainability at Salcef

Bringing our heritage to a new dimension

For 70 years we have been committed to creating a business model focused on continuously innovating sustainable mobility infrastructure

After the listing, we started a new journey, in which we firmly believe and to which the entire organization, starting from the top management, is strongly committed

Our sustainability journey proceeding

• related to climate change
• EU Taxonomy
• Gender pay-gap

SDG mapping

• 9 out of the 17 SDGs have been considered primary, based on their coherence with the business model and on the Group's ability to materially contribute to their achievement
• SDG 9, SDG 11 and SDG 13 are the most impacted being more linked with Group's core business and strategic goals

ESG Company goals	Covered SDGs
Develop technologies for integrated and sustainable mobility
Invest in new services and products
Assure quality of projects, products and machines
Pursue sustainability within all the business activities, investing in impacts reduction and new technologies
Digitalize all the processes
Safeguard employees' health and psychophysical integrity
Assess and mitigate risks related to business activities, also preventing occupational diseases and work-related injuries
Promote a culture focused on quality, environment protection, safety as well as training, effective communication and stakeholder involvement
Assure full compliance with applicable legal requirements and regulations/standards related to quality and HSE
Strengthen company governance, with particular focus on sustainability governance
	51

ESG Performance 2022

ESG Performance 2022 vs. 2018

Focus on EU Taxonomy

Business Unit	Sector	Cod	Description		Revenues	Capex	Opex
Track & light civil works	6 Transport	6.14	Infrastructure for rail transport	Aligned Eligible but not aligned Not eligible	58.73% 0.24% 0.00%	44.41% 0.18% 0.00%	69.57% 0.28% 0.00%
Energy, signalling & Telecom	6 Transport	6.14	Infrastructure for rail transport	Aligned Eligible but not aligned Not eligible	12.59% 0.05% 4.97%	4.56% 0.02% 2.44%	8.62% 0.03% 8.44%
Heavy Civil Works	6 Transport	6.14	Infrastructure for rail transport	Aligned Eligible but not aligned Not eligible	10.58% 0.04% 0.00%	3.37% 0.01% 0.00%	8.15% 0.03% 0.00%
Rail Grinding & Diagnostics	6 Transport	6.14	Infrastructure for rail transport	Aligned Eligible but not aligned Not eligible	3.06% 0.01% 0,00%	13.00% 0.05% 0,00%	1.64% 0.01% 0.00%
Railway Materials	6 Transport	6.14	Infrastructure for rail transport	Aligned Eligible but not aligned Not eligible	0.00% 0.00% 8.42%	0.00% 0.00% 19.44%	0.00% 0.00% 0.75%
Railway Machines	3 Manufacturing	3.3	Manufacture of low carbon technologies for transport	Aligned Eligible but not aligned Not eligible	0.00% 1.31% 0.00%	0.00% 12.51% 0.00%	0.00% 2.48% 0.00%
Salcef Group				Aligned Eligible but not aligned Not eligible	84.96% 1.65% 13.39%	65.34% 12.77% 21.89%	87.98% 2.83% 9.19%

Governance Board of Directors

The current BoD has been appointed by the AGM on 29 April 2022 for the period 2022-2024

Governance Remuneration policy

The Remuneration Policy 2023, approved by the AGM on 27 April 2023, confirmed ESG targets (HR and HSE) both for short-term and longterm incentive schemes and introduced the Long-term incentive schemes also for Executives with Strategic Responsibilities (ESR)

Component	Aims and characteristics	Implementation conditions		Amount
Short-term variable remuneration (MBO)	The annual variable component aims to recognize and reward the achievement of results linked to annual economic financial and non-financial objectives, constituting an important motivational lever	Recipients: CEO, Executive Chairman Objectives: EBITDA (55%), Net profit (30%), Injury index (10%), Employees training (5%) Performance gate: Consolidated EBITDA Type: 100% monetary Recipients: ESR + other executives Objectives: EBITDA + objectives linked to the specific organizational areas of competence (20% ESG) Performance gate: Consolidated EBITDA Type: Mixed with 75% monetary paid up-front and 25% in shares (Stock Grant Plan): two tranches of equal amount, with different vesting periods and with claw-back clauses	Payout scale: 0% till 70% of the target and then linear up to max 140% in case of overperformance	40% of the Fixed rem. at target 20% of the Fixed rem. at target
Long-term variable remuneration (LTI)	The long-term variable component ensures alignment between the interests of management and the interests of shareholders over the medium to long term. Economic objectives are complemented by non-financial objectives intended to ensure the Group's viable success	Recipients: CEO, Executive Chairman Objectives: cumulative EBITDA 2021-23 (55%), Cumulative revenues 2021-23 (30%), Injury index over three-year period (10%), Employees training over three-year period (5%) Performance gate: Consolidated EBITDA Type: 100% monetary to be paid at the approval of FY 2023 Financial Statement Recipients: ESR Objectives: cumulative EBITDA 2022-23 (55%), cumulative revenues 2022-23 (30%), Injury index over two-year period (10%), Employees training over two-year period (5%) Performance gate: Consolidated EBITDA Type: 100% shares (Performance share plan): two tranches 60/40, with different vesting periods and with claw-back clauses	Payout scale: 0% till 70% of the target and then linear up to max 140% in case of overperformance	60% of the Fixed rem. at target 20% of the Fixed rem. at target

Useful documents & Contacts

FY 2022 Results

Useful documents

Presentation

FY 2022 Video

9M 2023 Results Presentation

2022 Integrated Report

Report on Corporate Governance

Remuneration Report

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Contacts

Alessio Crosa Chief Communication & Sustainability Officer

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

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