Tesmec — Investor Presentation 2018

May 3, 2018

• Stringing
• Energy Automation
• Railway
• Trencher

Integrated Solutions Provider

1Q 2018 Results Presentation

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Corporate Strategy >

• 1Q 2018 Results >

• 2018 Outlook >

• Overhead power lines construction & maintenance >

• Reconductoring and line improvement >

• Underground cable laying >

• Railway lines electrification >

• Catenary maintenance and diagnostic >

• Special Applications >

• 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 sustainable Technology "

OUR MISSION

• Value added integrated solutions provider in the market of infrastructure for the transport of energy, data and material >
• Efficiency, digitalization, safety and sustainability are our drivers for the modernization of the infrastructures projects in the world >
• R&D investments: match the people and high know-how to meet the new demands of the markets >

Strategic Approach evolution

4.

Adoption of the Industry 4.0 plan by the Italian Government & new tax incentives in 2017 Budget Law.

TESMEC 4.0
------------

> The most developed markets are strongly investing in high-tech content sectors.

MARKET xxx

• > Expansive fiscal policies are an important driver for the investments.
• > Italy & Europe: market leader which recognize the added value of Tesmec "4.0" solutions.

R&D activities & DIGITALIZATION

Relevant investments in technologies and solutions with an innovative digital content.

INDUSTRY 4.0

Further investments in industrial technological & digital transformation, in accordance with the Industry 4.0 model.

Make the most of

TAX-SAVING OPPORTUNITIES

• Corporate Strategy >
• 1Q 2018 Results >
• 2018 Outlook >

3

3

GROUP (€ mln)	1Q 2018	1Q 2017	Delta %
				ENERGY	1Q2018	1Q2017	Delta %
REVENUES	46,7	49,8	-6,1%	Revenues	9,2	21,9	-57,8%
EBITDA	6,1	5,6	8,0%	EBITDA	1,2	4,0	-68,8%
% on Revenues	13,0%	11,3%		% on Revenues	13,3%	18,0%
EBIT	2,8	2,5	9,8%
% on Revenues	5,9%	5,1%		TRENCHERS	1Q2018	1Q2017	Delta %
Differences in Exchange	(0,7)	(0,4)	86,3%	Revenues	33,4	24,4	36,7%
% on Revenues	1,5%	0,7%		EBITDA	4,2	0,7	428,6%
PROFIT (LOSS) BEFORE TAX	1,3	1,1	23,1%	% on Revenues	12,6%	3,2%
% on Revenues	2,8%	2,1%
NET INCOME/(LOSS)	1,1	0,8	35,6%	RAILWAY	1Q2018	1Q2017	Delta %
% on Revenues	2,4%	1,7%		Revenues	4,1	3,5	18,4%
				EBITDA	0,7	0,9	-26,5%

GROUP (€ mln)	1Q 2018	2017
NFP	98,7	85,2

% on Revenues 15,9% 25,6%

EBITDA 1Q 2018

€ mln

EBITDA 1Q 2018

€ mln

Financial Information (€ mln)	1Q 2018	2017
Net Working Capital	74,3	60,8
Non Current assets	67,6	68,4
Other Long Term assets/liabilities	0,7	0,9
Net Invested Capital	142,6	130,1
Net Financial Indebtness	98,7	85,2
Equity	43,9	44,9

Working Capital evolution

2017 1Q 2018 € 60,8 mln € 74,3 mln Increase of trade receivables following sales closed at the end of the quarter

• Corporate Strategy >
• 1Q 2018 Results >
• 2018 Outlook >

2018 Trend & Outlook

TREND
BUSINESS	ENERGY: Strong recovery (new product, important tender for energy automation)
	RAIL: Strong increase: new products and new manufacturing plant
	TRENCHERS: > Machines: new product launch (Intermat exhibition) > Service: new projects: ▪ cables, green energy ▪ service: infrastructure projects (pipe& bulk)
OUTLOOK
2Q 2018 ECONOMICS	Sales improvement vs 1Q
	Increase EBITDA %
	Positive Net Profit
2018	2018 Sales: target exceeding 200 M€
ECONOMICS xxx & FINANCIALS	EBITDA: improvement due to better fixed costs absorption & efficiency in the business
	NFP: improvement is expected thanks to the normalization of working capital & operating profitability
	Expected BACKLOG better than year end closing

Summary 1Q 2018 Profit & Loss statement - Appendix A

Profit & Loss Account (€ mln)	1Q 2018	1Q 2017	Delta vs 2017	Delta %
Net Revenues	46,7	49,8	(3,1)	-6,1%
Raw materials costs (-)	(19,8)	(24,4)	4,6	-18,7%
Cost for services (-)	(6,9)	(8,1)	1,2	-14,5%
Personnel Costs (-)	(11,5)	(11,2)	(0,3)	3,3%
Other operating revenues/costs (+/-)	(3,9)	(2,3)	(1,6)	74,3%
Portion of gain/(losses) from equity investments evaluated using the equity method Capitalized R&D expenses	0,1 1,4	0,3 1,5	(0,2) (0,1)	-79,2% -1,8%
Total operating costs	(40,6)	(44,2)	3,6	-8,1%
% on Net Revenues	(87%)	(89%)
EBITDA	6,1	5,6	0,5	8,0%
% on Net Revenues	13%	11%
Depreciation, amortization (-)	(3,3)	(3,1)	(0,2)	6,5%
EBIT	2,8	2,5	0,3	9,8%
% on Net Revenues	6 %	5 %
Net Financial Income/Expenses (+/-)	(1,5)	(1,5)	-	0,1%
Taxes (-)	(0,2)	(0,2)	-	-39,0%
Minorities	-	-	-	-101,6%
Group Net Income (Loss)	1,1	0,8	0,3	35,6%
% on Net Revenues	2 %	2 %

Summary 1Q 2018 Balance Sheet - Appendix B

Balance Sheet (€ mln)	1Q 2018	2017
Inventory	70,5	69,9
Accounts receivable	53,6	39,9
Accounts payable (-)	(39,7)	(39,5)
Op. working capital	84,4	70,3
Other current assets (liabilities)	(10,1)	(9,5)
Net working capital	74,3	60,8
Tangible assets	45,8	46,1
Intangible assets	18,0	18,3
Financial assets	3,7	4,0
Fixed assets	67,5	68,4
Net long term liabilities	0,8	0,9
Net invested capital	142,6	130,1
Cash & near cash items (-)	(15,8)	(21,5)
Short term financial assets (-)	(10,5)	(12,5)
Short term borrow ing	84,8	79,2
Medium-long term borrow ing	40,2	40,0
Net financial position	98,7	85,2
Equity	43,9	44,9
Funds	142,6	130,1

Disclaimer

The Chief Executive Officer, Ambrogio Caccia Dominioni, in the absence of the Manager responsible for preparing the company's financial reports that will take office starting 15 June 2018 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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