Tesmec — Investor Presentation 2017

Aug 4, 2017

Integrated Solutions Provider

1H 2017 results

www.tesmec.com

Corporate Strategy >

• 1H 2017 Results >
• Outlook 2H 2017 >

TESMEC SMART CITY

• Overhead power lines construction & maintenance >
• Reconductoring and line improvement >

• Underground cable laying >

• Railway lines electrification >

• Catenary maintenance and diagnostic >
• Special Applications >

FULLY INTEGRATED SOLUTIONS PROVIDER

• Telecommunication & Teleprotection >
• Electronic integrated sensors, fault detection and measurement >

• Protections & Electronics for Distribution >

• > Telecom networks, FTTH & long distance, power cable installation

• > Oil & Gas, Water pipelines
• > Bulk excavation of rock and Quarries

TESMEC

" From Steel to Technology "

OUR MISSION

• Our mission is to be value added integrated solutions provider in the market of infrastructure for the transport of energy, data and material >
• We provide efficiency, digitalization, safety and sustainability for the modernization of the infrastructures of every country in the world >
• We focus on winning integration of advanced technology & high know how to meet the new demands of the markets >

4 th August 2017 6

WE ARE THE ONLY PROVIDER IN THE WORLD able to satisfy the infrastructure market's needs through our fully integrated solutions suite

xxx WE HAVE THE CAPABILITY TO DO THIS!

• 1H 2017 Results >
• Outlook 2H 2017 >

GROUP (€ mln)	1H 2017	1H 2016	Delta %
Revenues	91,1	74,0	23,2%
EBITDA	8,7 (*)	7,4	18,3%
% on Revenues	10%	10%
EBIT	2,0	1,4	39,0%
% on Revenues	2%	2%
DIE	(3,1)	(0,5)	-592,7%
Differences in Exchange
PROFIT (LOSS) BEFORE TAX	(2,5)	(1,3)	-99,1%
% on Revenues	-3%	-2%
NET INCOME	(1,8)	(1,3)	-37,3%
% on Revenues	-2%	-2%

ENERGY	1H2017	1H2016	Delta %
Revenues	32,0	22,2	44,2%
EBITDA	5,6	2,5	119,7%
% on Revenues	17%	11%

TRENCHERS	1H2017	1H2016	Delta %
Revenues	51,3	49,4	3,7%
EBITDA	2,0	4,7	-56,8%
% on Revenues	4%	10%

RAILWAY	1H2017	1H2016	Delta %
Revenues	7,8	2,4	233,1%
EBITDA	1,1	0,2	812,9%
% on Revenues	14%	5%

GROUP (€ mln)	1H 2017	2016
NFP	91,5	96,7

(*) Not considering the effects of last year's real estate transaction EBITDA would have been Euro 9.7 million

EBITDA 1H 2017: increase despite higher rent costs

(*) Not considering the effects of last year's real estate transaction EBITDA would have been Euro 9.7 million

Financial Information (Euro mln)	1H 2017	2016
Net Working Capital	66,0	76,0
Non Current assets	70,1	70,1
Other Long Term assets/liabilities	1,5	0,5
Net Invested Capital	137,6	146,6
Net Financial Indebtness	91,5	96,7
Equity	46,1	49,9

Working Capital Evolution

Euro Mln	1H 2017	2016	Days 1H 2017	Days 2016
Trade Receivables	56,2	49,4	111	138
Inventories	64,8	69,2	137	198
Work in progress contracts	4,8	1,3
Trade Payables	(39,5)	(31,2)	-78	-87
Other Current Assets/(Liabilities)	(20,3)	(12,7)	-48	-48
Net Working Capital	66,0	76,0

OPERATING NET FINANCIAL POSITION

2016	> Net Financial Position reduction mainly thanks to lower working capital > Capex more than absorbed by Internally generated cash and WC reduction	1H 2017
------	-------------------------------------------------------------------------------------------------------------------------------------------------------------	------------	--

ENERGY xxx

STRINGING: Significant orders in South America

ENERGY AUTOMATION: New sensors for teleprotection+New A3 protection relays (tender)

Main 1H 2017 business highlights

New technology developments on railway solutions:

RAILWAY xxx

• Automation and Diagnostic systems >
• Artic kit >

FTTH: Global solutions

• Corporate Strategy >
• 1H 2017 Results >
• Outlook 2H 2017 >

MILESTONES
	ENERGY: Closing of important projects already announced (Russia, Italy, South America)
	RAILWAY: Strong effect of the rail start-up (acquired orders in Italy and US)
BUSINESS xxx	TRENCHER: definitive launch of traditional products for infrastructure projects
	Rock Hawg: Impact on long term non cyclical projects > (civil projects, infrastructures and mines with new materials) > FTTH Smart: Projects start-up in different Countries thanks to new technologies for mini-micro trenches

OUTLOOK

ECONOMICS & xxx FINANCIALS	Sales: 3Q.2017 increase with respect of SPPY in line with H1
	EBITDA 14,0%
	Impact of USD exchange rate -1% EBITDA
	PFN improvement
	Expected BACKLOG 2017.Q3 in line with 2017.H1

Summary 1H 2017 Profit & Loss statement - Appendix A

Profit & Loss Account (€ mln)	1H 2017	1H 2016	Delta vs 2016	Delta %
Net Revenues	91,1	74,0	17,1	23,2%
Raw materials costs (-)	(41,5)	(31,1)	(10,4)	33,5%
Cost for services (-)	(15,6)	(15,4)	(0,2)	0,9%
Personnel Costs (-)	(23,7)	(19,8)	(3,9)	19,7%
Other operating revenues/costs (+/-)	(4,5)	(2,9)	(1,6)	56,4%
Portion of gain/(losses) from equity investments evaluated using the equity method	0,1	-	0,1	100%
Capitalized R&D expenses	2,8	2,6	0,2	8,7%
Total operating costs	(82,4)	(66,6)	(15,8)	23,7%
% on Net Revenues	(90%)	(90%)
EBITDA	8,7	7,4	1,3	18,3%
% on Net Revenues	10%	10%
Depreciation, amortization (-)	(6,7)	(6,0)	(0,7)	13,3%
EBIT	2,0	1,4	0,6	39,0%
% on Net Revenues	2 %	2 %
Net Financial Income/Expenses (+/-)	(4,6)	(2,7)	(1,9)	67,3%
Taxes (-)	0,8	-	0,8	100%
Minorities	-	-	-	-
Group Net Income (Loss)	(1,8)	(1,3)	(0,5)	-37,3%
% on Net Revenues	-2%	-2%

Summary 1H 2017 Balance Sheet - Appendix B

Balance Sheet (€ mln)	1H 2017	2016
Inventory	69,6	70,5
Accounts receivable	56,2	49,4
Accounts payable (-)	(39,5)	(31,2)
Op. working capital	86,3	88,7
Other current assets (liabilities)	(20,3)	(12,7)
Net working capital	66,0	76,0
Tangible assets	47,7	47,3
Intangible assets	18,5	18,9
Financial assets	3,9	3,9
Fixed assets	70,1	70,1
Net long term liabilities	1,5	0,5
Net invested capital	137,6	146,6
Cash & near cash items (-)	(22,6)	(18,5)
Short term financial assets (-)	(10,5)	(9,1)
Short term borrowing	73,4	70,1
Medium-long term borrowing	51,2	54,2
Net financial position	91,5	96,7
Equity	46,1	49,9
Funds	137,6	146,6

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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