Tesmec — Investor Presentation 2017

Apr 28, 2017

Integrated Solutions Provider

1Q 2017 results

www.tesmec.com

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 >

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!

GROUP (€ mln)	1Q 2017	1Q 2016	Delta %
Revenues	49,8	40,5	23,1%
EBITDA	5,6 (*)	5,4	4,8%
% on Revenues	11%	13%
EBIT	2,5	2,5	2,3%
% on Revenues	5%	6%
PROFIT (LOSS) BEFORE TAX	1,1	-0,1	1200%
% on Revenues	2%	0%
NET INCOME	0,8	-0,1	900%
% on Revenues	2%	0%

ENERGY	1Q2017	1Q2016	Delta %
Revenues	21,9	10,4	110,2%
EBITDA	3,9	2,0	95,0%
% on Revenues	18%	19%

TRENCHERS	1Q2017	1Q2016	Delta %
Revenues	24,4	29,2	-16,5%
EBITDA	0,8	3,7	-78,4%
% on Revenues	3%	13%

RAILWAY	1Q2017	1Q2016	Delta %
Revenues	3,5	0,8	326,6%
EBITDA	0,9	-0,3	400,0%
% on Revenues	26%	-41%

GROUP (€ mln)	1Q 2017	2016
NFP	96,9	96,7

(*) Not considering the effects of last year's real estate transaction EBITDA would have been Euro 6.1 million

EBITDA 1Q 2017

(*) Not considering the effects of last year's real estate transaction EBITDA would have been Euro 6.1 million

Financial Information (Euro mln)	1Q 2017	2016
Net Working Capital	73,7	76,0
Non Current assets	72,2	70,1
Other Long Term assets/liabilities	1,2	0,5
Net Invested Capital	147,1	146,6
Net Financial Indebtness	96,9	96,7
Equity	50,2	49,9

Euro Mln	1Q 2017	2016	Days 1Q 2017	Days 2016
Trade Receivables	64,7	49,4	117	138
Inventories	61,7	69,2	119	198
Work in progress contracts	4,0	1,3
Trade Payables	(38,0)	(31,2)	-69	-87
Other Current Assets/(Liabilities)	(18,7)	(12,7)	-43	-48
Net Working Capital	73,7	76,0

OPERATING NET FINANCIAL POSITION

2016

BACKLOG

TREND
	Upturn USA economy
BUSINESS xxx	Impact of new service model (Energy/Telecom)
	Rail and energy automation projects impacts

OUTLOOK

ECONOMICS &
xxx FINANCIALS

• Sales: 2Q.2017 increase compared to SPPY in line with 1Q.2017
• 2017 Sales: 160–170 M€ (after 1Q.2017 closer to top range)
• EBITDA:15%
• NFP reduction starting from 2Q.2017
• Backlog 2Q.2017 in line with 1Q.2017

Summary 1Q 2017 Profit & Loss statement - Appendix A

Profit & Loss Account (€ mln)	1Q 2017	1Q 2016	Delta vs 2016	Delta %
Net Revenues	49,8	40,5	9,3	23,0%
Raw materials costs (-)	(24,4)	(17,8)	(6,6)	37%
Cost for services (-)	(8,1)	(7,7)	(0,4)	5 %
Personnel Costs (-)	(11,2)	(9,4)	(1,8)	19%
Other operating revenues/costs (+/-)	(2,3)	(1,4)	(0,9)	64%
Portion of gain/(losses) from equity investments evaluated using the equity method Capitalized R&D expenses	0,3 1,5	0,1 1,1	0 0	200% 36%
Total operating costs	(44,2)	(35,1)	(9,1)	25,9%
% Net Revenues on	(89%)	(87%)
EBITDA	5,6	5,4	0,2	31,1%
% Net Revenues on	11%	13%
Depreciation, amortization (-)	(3,1)	(2,9)	(0,2)	7 %
EBIT	2,5	2,5	(0,0)	21,9%
% Net Revenues on	% 5	6 %
Net Financial Income/Expenses (+/-)	(1,5)	(2,4)	0,9	-38%
Taxes (-)	(0,2)	(0,03)	(0,2)	567%
Minorities	0,0	(0,06)	-	-
Group Net Income (Loss)	0,8	(0,05)	0,8	-1700,0%
% Net Revenues on	2 %	0 %

Balance Sheet (€ mln)	1Q 2017	2016
Inventory	65,7	70,5
Accounts receivable	64,7	49,4
Accounts payable (-)	(38,0)	(31,2)
Op. working capital	92,4	88,7
Other current assets (liabilities)	(18,7)	(12,7)
Net working capital	73,7	76,0
Tangible assets	49,4	47,3
Intangible assets	18,8	18,9
Financial assets	4,0	3,9
Fixed assets	72,2	70,1
Net long term liabilities	1,2	0,5
Net invested capital	147,1	146,6
Cash & near cash items (-)	(21,2)	(18,5)
Short term financial assets (-)	(8,3)	(9,1)
Short term borrow ing	73,6	70,1
Medium-long term borrow ing	52,8	54,2
Net financial position	96,9	96,7
Equity	50,2	49,9
Funds	147,1	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.

www.tesmec.com