Tesmec — Investor Presentation 2017

Mar 10, 2017

Integrated Solutions Provider

2016 Results Presentation

www.tesmec.com

Corporate Strategy >

2016 Results & 2017 Outlook >

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 >

Company Marais Technologies

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!

2016 Results & 2017 Outlook >

GROUP (€ mln)	2016	2015
Revenues	128,5	164,4
EBITDA adj (1)	11,6	22,0
% on Revenues	9%	13%
EBITDA	8,5	24,0
% on Revenues	7%	15%
EBIT	-4,3	12,8
% on Revenues	-3%	8%
Profit Before Taxes	-6,8	9,1
% on Revenues	-5%	6%
NET INCOME	-3,8	7,1
% on Revenues	-3%	4%

(1)	ADJUSTMENT INCLUDES 2,2 mln on respect of the real estate deal and
	0,9 mln of extraordinary consultancy cost.

GROUP (€ mln)	2016	2015 (2)
NFP	96,7	89,9

(2) Including 17,8 M€ OF GRASSOBBIO REAL ESTATE BORROWING.

ENERGY	2016	2015	Delta %
Revenues	42,2	72,1	-41,5%
EBITDA adj	6,0	11,4	-47,4%
% on Revenues	14,2%	15,8%

TRENCHERS	2016	2015	Delta %
Revenues	80,6	88,5	-8,9%
EBITDA adj	4,5	10,9	-58,7%
% on Revenues	5,6%	12,3%

RAILWAY	2016	2015	Delta %
Revenues	5,7	3,8	50,0%
EBITDA adj	1,1	-0,3	-467%
% on Revenues	19,3%	-7,9%

2016 Revenues: Main features

2015 PROFITABILITY AFFECTED BY LOWER TOP LINE 2016

Financial Information (Euro mln)	2016	2015
Net Working Capital	76,0	63,5
Non Current assets	70,1	83,9
Other Long Term assets/liabilities	0,5	(1,7)
Net Invested Capital	146,6	145,7
Net Financial Indebtness	96,7	89,9
Equity	49,9	55,8

		Euro Mln	2016	2015	Days 2016	Days 2015
2016		Trade Receivables	49,4	50,9	138	111
Net Working Capital	59%	Inventories	69,2	58,9	198	137
Revenues		Work in progress contracts	1,3	3,8
2015 Net Working Capital		Trade Payables	(31,2)	(39,0)	-87	-86
Revenues	39%	Other Current Assets/(Liabilities)	(12,7)	(11,1)	-24	-24
		Net Working Capital	76,0	63,5

OPERATING NET FINANCIAL POSITION

Focus on reset USA and Middle East Area

Focalize the effort on the control of cost structure in any site

Integration of operations: TRS & RAIL

Simplification of Automation's companies and value chain

Revamping BU stringing

Main 2017 goals

NEW CONCEPT IN STRINGING MACHINES 4.0:

Simple, Safe and Reliable

SUPPLY OF 25 COMPLETE SETS (MACHINES AND EQUIPMENT)

Success of European technology in Indonesia

AWARD OF THE TENDER OF RFI: SUPPLY OF 88 MULTIPURPOSE RAILWAY VEHICLES for the maintenance of the Italian railway network

• WINNING TECHNOLOGICAL SYSTEMS

• REMOTE CONTROL BL3 SYSTEM ON BOARD

• TRANSFER CAPABILITY AS PASSENGER TRAIN ON NATIONAL RAILWAY NETWORKS

POWER LINES MANAGEMENT & ENERGY EFFICIENCY

TECHNOLOGICAL COOPERATION BETWEEN TESMEC & THE RUSSIAN GROUP ROSSETI

Smart Metering Tool (SMT): extremely innovative and tailor made systems

WIND FARM PROJECTS AUSTRALIA & NEW ZEALAND

FIBER TO THE HOME PROJECTS

ADVANCED WORKING METHODOLOGY:

integrated systems & technological solutions for a complete jobsite management

TELECOM xxx & ENERGY	Upturn USA market
	Impact of renewable energy projects
	First FTTH projects

ECONOMICS & xxx FINANCIALS	1Q.2017 +15÷20% compared to SPPY Sales:
	2017 Sales: 160–170 M€
	EBITDA 15%
	NFP reduction
	Expected BACKLOG 1Q.2017 higher than 2016 year end

Summary 2016 Profit & Loss statement - Appendix A

Profit & Loss Account (€ mln)	2016	2015	Delta vs 2015	Delta %
Net Revenues	128,5	164,4	(35,9)	-21,8%
Raw materials costs (-)	(49,0)	(82,8)	33,8	-41%
Cost for services (-)	(28,2)	(27,3)	(0,9)	3 %
Personnel Costs (-)	(40,0)	(34,5)	(5,5)	16%
Other operating revenues/costs (+/-)	(7,7)	(0,7)	(7,0)	1000%
Portion of gain/(losses) from equity investments evaluated using the equity method	(0,1)	(0,1)	-	0 %
Capitalized R&D expenses	5,0	5,1	(0)	-2%
Total operating costs	(120,0)	(140,4)	20,4	-14,5%
% Net Revenues on	(93%)	(85%)
EBITDA	8,5	24,0	(15,5)	31,1%
% Net Revenues on	% 7	15%
Depreciation, amortization (-)	(12,8)	(11,2)	(1,6)	14%
EBIT	(4,3)	12,8	(17,1)	21,9%
% Net Revenues on	-3%	8 %
Net Financial Income/Expenses (+/-)	(2,7)	(3,8)	1,1	-29%
Taxes (-)	3,0	(1,9)	4,9	-258%
Minorities	0,1	(0,2)	-	-
Group Net Income (Loss)	(3,9)	6,9	(10,8)	-156,2%
% Net Revenues on	-3%	% 4

Balance Sheet (€ mln)	2016	2015
Inventory	70,5	62,7
Accounts receivable	49,4	50,9
Accounts payable (-)	(31,2)	(39,0)
Op. working capital	88,7	74,6
Other current assets (liabilities)	(12,7)	(11,1)
Net working capital	76,0	63,5
Tangible assets	47,3	65,3
Intangible assets	18,9	13,8
Financial assets	3,9	4,8
Fixed assets	70,1	83,9
Net long term liabilities	0,5	(1,7)
Net invested capital	146,6	145,7
Cash & near cash items (-)	(18,5)	(21,2)
Short term financial assets (-)	(9,1)	(11,8)
Short term borrowing	70,1	45,2
Medium-long term borrowing	54,2	77,7
Net financial position	96,7	89,9
Equity	49,9	55,8
Funds	146,6	145,7

www.tesmec.com