Tesmec

Investor Presentation • Aug 11, 2015

We focus on strategic markets for the growth and modernization of every country.

Solutions partner for your world

Tesmec designs, manufactures and sells products, technologies and integrated solutions for the construction, maintenance and efficiency of infrastructures related to the transport and distribution of energy, data and material, such as: overhead and underground networks, traditional and high speed railway lines, energy cables and pipelines. In addition to traditional businesses, Tesmec is increasing its market presence offering solutions for Power Grid's efficiency & management.

ENERGY

POSITIVE IMPACT OF EUROPE AND SOUTH AMERICA

AUTOMATION SEGMENT: GOOD TREND OF 1Q CONFIRMED ALSO IN 2Q

END OF DEVELOPMENT PHASE FOR THE INNOVATIVE DEVICE FOR SMART GRIDS (PILOT PHASE TO START)

PROJECTS ACTIVITIES POSTPONED IN KEY MARKETS (NORTH AMERICA, INDIA, RUSSIA)

Execution of Brazil order

Execution of big order of stringing equipment for overhead power lines construction in Brazil in timing with the tough project schedule.

First orders and revenues in the new Energy Automation business.

Tesmec RGDAT in South America

• Application: monitoring and protection of medium voltage power lines
• Supply: RGDAT Directional Fault Detector and Off Voltage Indicator device
• Location: ENEL Power Grids in South America

TRENCHERS

IN THE BACKGROUND OF OIL&GAS AND COMMODITIES LOW PRICES, FOCUS ON DIFFERENT MARKET SEGMENTS:

TELECOM: NEW PROJECTS FOR ENERGY CABLES AND FIBER OPTIC INSTALLATION ESPECIALLY IN EUROPE AND WEST AFRICA, THANKS TO THE ACQUISITION OF THE FRENCH COMPANY MARAIS

WATER PIPELINES AND AGRICULTURE: ONGOING ACTIVITIES TO ENTRY THE MARKETS

CIVIL INFRASTRUCTURES: BULK EXCAVATION WORKS IN KSA AND MIDDLE EAST AREA

Ongoing projects for Energy Cables and Fiber Optic installation.

New opportunities in TLC market

• UK: 2x47 km parallel cable routes, PE pipes installation for onshore underground cables connecting offshore wind farm
• Congo: 250 km of fiber optic cable laying between Pointe Noir e Mbinda
• Ivory Coast: 200 km of fiber optic cable laying

TESMEC expertise has been chosen for the main infrastructural projects worldwide.

Chile water pipeline

• Project: two 42" water pipeline
• Supply: TESMEC 1675 Chainsaw
• Location: between Caleta Coloso port and a copper mine in the Atacama Desert of northern Chile, 114 miles (185 km) away and 10,170 feet (3,100 m) above sea level.

TESMEC expertise has been chosen for the main infrastructural projects worldwide.

New Orbital Highway in Qatar

• Project: 47km of motorways
• Supply: TESMEC 1475 Rock Hawg
• Location: the new highway will connect the North Relief Road with Salwa Road, it will bypass Doha and relieve current traffic congestion while preparing to accommodate projected road traffic increases.

RAILWAY

INNOVATIVE RAILCAR EQUIPPED WITH SAFETY AND TECHNICAL DEVICES APPROVED BY THE ITALIAN RAILWAY AUTHORITY

NEW CONTRACT AWARDED WITH EUROPEAN RAILWAY CORPORATION

RAILCARS FOR THE US MARKET SUCCESSFULLY COMPLETED FACTORY TESTING PHASE AND GOING TO START DYNAMIC TESTS

COMMERCIAL PIPELINE WITH IMPORTANT SALES OPPORTUNITIES

1H2015 Economic Results year-on-year statutory figures

GROUP (€ mln)	1H2015	1H2014	Delta %
Revenues	85 1 ,	54 7 ,	55 6% ,
EBITDA	14 2 ,	8 9 ,	59 6% ,
% Revenues on	17%	16%
EBIT	9 6 ,	5 3 ,	81 1% ,
% Revenues on	11%	10%
Profit Before Taxes	8 9 ,	3 1 ,	187 1% ,
% Revenues on	10%	6%
INCOME NET	6 5 ,	1 7 ,	282 4% ,
% Revenues on	8%	3%

GROUP (€ mln)	1H2015	2014	Delta %
(IAS17) NFP	90 8 ,	73 4 ,	23 7% ,
(without IAS17) NFP	72 5 ,	54 5 ,	33 0% ,

ENERGY	1H2015	1H2014Delta	%
Revenues	45 9 ,	22 3 ,	105 ,8%
EBITDA	8 2 ,	3 9 ,	110,3%
% Revenues on	18%	17%

TRENCHERS	1H2015	1H2014Delta	%
Revenues	38 6 ,	25 9 ,	49 0% ,
EBITDA	6 2 ,	3 4 ,	82 4% ,
% Revenues on	16%	13%

RAILWAY	1H2015	1H2014Delta	%
Revenues	0 6 ,	6 5 ,	-90 4% ,
EBITDA	-0 2 ,	1 6 ,	-112,5%
% Revenues on	-32%	25%

GROUP (€ mln)	statutory 1H2015	Marais recurring	Marais non recurring	organic 1H2015	1H2014	organic * Δ%
Revenues	85 1 ,	5 6 ,	/	5 79 ,	54 7 ,	45 3% ,
EBITDA % Revenues on	14 2 , 17%	0 3 , % 5	2 1 ,	11 8 , 15%	8 9 , 16%	33 1% ,
EBIT Revenues % on	9 6 , 11%	-0 3 , -5%	2 1 ,	8 7 , 10%	5 3 , 10%	46 4% ,
NET INCOME Revenues % on	5 6 , 8 %	-0 04 , -1%	2 3 ,	4 24 , 5 %	1 7 , 3 %	149 1% ,
GROUP (€ mln)	statutory 1H2015	Marais recurring	Marais non recurring	organic 1H2015	2014	organic * Δ%
NFP	90 8 ,	8 6 ,	5 0 ,	2 77 ,	73 4 ,	5 2% ,

* organic = at constant scope

INTERNATIONAL SCALE AND EXPOSURE TO GROWING ECONOMIES

EBITDA 1H2015

1H2014 EBITDA boosted by Stringing Equipment volumes and Marais acquisition 1H2015

Euro Mln	statutory 1H2015	Marais recurring	Marais non recurring	organic 1H2015	2014	Days 1H2015	Days 1H2014
Trade Receivables	58 5 ,	7 3 ,	/	51 2 ,	41 3 ,	8 3	128
Inventories	63 4 ,	3 2 ,	/	60 2 ,	55 4 ,	126	193
Work in contracts progress	4 5 ,	/	/	4 5 ,	2 5 ,
Trade Payables	(45 6) ,	(2 0) ,	(0 5) ,	(43 1) ,	(34 2) ,	6 4	9 8
Other Current Assets/(Liabilities)	(13 6) ,	(6 1) ,	/	(7 5) ,	(9 8) ,	2 5	3 8
Net Working Capital	67 2 ,	2 4 ,	(0 5) ,	65 3 ,	57 9 ,

Operating Net Financial Position without figurative debt for Grassobbio premises

²⁰¹⁴ NFP increase has been mainly influenced by the acquisition of Marais Group and net working capital 1H2015

Order Book 1H2015

45,2 45,9 24,3 23,6 0 10 20 30 40 50 Order book FY 2014 1H2015 Revenues Order Intake Order book 1H2015 ENERGY € mln

• telecom: Marais boost, opportunities in Europe, West Africa and Australia
• civil works: medium term full service contracts in Middle East area
• water pipeline and agriculture: South and North America

RAILWAY: awards expected in second half of the year

MARGINS: improve profitability of Railway and Trencher business also thanks to the integration of Marais business and volumes increase

NFP and WORKING CAPITAL: ongoing actions to reduce the financial debt and the working capital, especially in Trencher division

Profit & (€ mln) Loss Account	1H2015	1H2014	Delta vs 2014	Delta %
Net Revenues	85 1 ,	54 7 ,	30 4 ,	55 6% ,
materials (-) Raw costs	(44 0) ,	(25 7) ,	(18 3) ,	71%
Cost for (-) services	(13 8) ,	(8 9) ,	(4 9) ,	55%
Personnel Costs (-)	(16 1) ,	(12 8) ,	(3 3) ,	26%
Other operating revenues/costs (+/-)	0 6 ,	(1 4) ,	2 0 ,	-143%
of Portion gain/(losses) from evaluated equity investments the method using equity	(0 1) ,	0 4 ,	(0 5) ,	-118%
Capitalized R&D expenses	2 4 ,	2 6 ,	(0 2) ,	-8%
Total operating costs	(71 0) ,	(45 8) ,	(25 2) ,	55 0% ,
% Net Revenues on	(83%)	(84%)
EBITDA	14 2 ,	8 9 ,	3 5 ,	59 6% ,
% Net Revenues on	17%	16%
Depreciation , amortization (-)	(4 6) ,	(3 6) ,	(1 0) ,	28%
EBIT	9 6 ,	3 5 ,	3 4 ,	81 1% ,
% Net Revenues on	11%	10%
Financial Income/Expenses (+/-) Net	(0 7) ,	(2 2) ,	1 5 ,	-68%
(-) Taxes	(2 4) ,	(1 3) ,	(1 1) ,	85%
Minorities	-	-	-	-
(Loss) Net Income	6 5 ,	1 8 ,	4 7 ,	282 4% ,
% Net Revenues on	8 %	3 %

Summary 1H2015 Profit & Loss statement

Summary 1H2015 Balance Sheet

Balance Sheet (€ mln)	1H2015	2014
Inventory	63 4 ,	55 4 ,
Work in contracts progress	4 6 ,	5 2 ,
receivable Accounts	58 5 ,	3 41 ,
payable (-) Accounts	(45 6) ,	(34 2) ,
. working capital Op	80 9 ,	67 7 ,
Other (liabilities) current assets	(13 7) ,	(9 8) ,
Net working capital	67 2 ,	57 9 ,
Tangible assets	62 3 ,	48 1 ,
Intangible assets	13 3 ,	12 4 ,
Financial assets	5 0 ,	4 8 ,
Fixed assets	80 6 ,	65 3 ,
Net long liabilities term	(2 1) ,	(1 7) ,
invested capital Net	145 7 ,	121 5 ,
Cash & cash (-) items near	(15 9) ,	(18 7) ,
Short financial (-) term assets	(7 5) ,	(6 8) ,
Short borrowing term	48 3 ,	36 6 ,
Medium-long borrowing term	65 9 ,	62 3 ,
Net financial position	90 8 ,	73 4 ,
Equity	9 54 ,	48 1 ,
Funds	145 7 ,	121 5 ,

Disclaimer

The Manager responsible for preparing the company's financial reports, Andrea Bramani, declares, pursuant to paragraph 2 of Article 154-bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting records.

Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially.

Any estimates or forward-looking statements contained in this document are referred to the current date and, therefore, any of the assumptions underlying this document or any of the circumstances or data mentioned in this document may change. Tesmec S.p.A. expressly disclaims and does not assume any liability in connection with any inaccuracies in any of these estimates or forward-looking statements or in connection with any use by any third party of such estimates or forward-looking statements.

This document does not represent investment advice or a recommendation for the purchase or sale of financial products and/or of any kind of financial services. Finally, this document does not represent an investment solicitation in Italy, pursuant to Section 1, letter (t) of Legislative Decree no. 58 of February 24, 1998, or in any other country or state.

In addition to the standard financial reporting formats and indicators required under IFRS, this document contains a number of reclassified tables and alternative performance indicators. The purpose is to help users better evaluate the Group's economic and financial performance. However, these tables and indicators should not be treated as a substitute for the standard ones required by IFRS.

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