Tesmec

Investor Presentation • Oct 30, 2020

• Stringing
• Energy Automation
• Railway
• Trencher

Integrated Solutions Provider

2020.9M Results Presentation

Tesmec Group at a glance >

• 2020.9M results >
• Outlook >
• COVID-19 >
• ANNEX A - 2020.9M Profit & Loss statement - Balance Sheet >

Tesmec Group at a glance

VISION

To be a technological partner in a changing world

MISSION

To operate in the market of infrastructure for the transport of energy, data and material

VALUE PROPOSITION

To supply added-value integrated solutions for our customers

STRATEGY

Innovation Internationalization Integration

STRINGING

• Overhead power lines construction & maintenance
• Advanced methodologies for powerlines improvement
• Zero emissions underground cable laying

RAIL

• Catenary lines construction & maintenance
• Diagnostics systems
• Big Data integrated solutions for safe infrastructure

BUSINESS

PLATFORMS FOR DIAGNOSTIC & DATA MANAGEMENT

ENERGY AUTOMATION

• Telecommunications solutions for HV Grids
• Grid Management: protection & metering solutions
• Advanced sensors for fault passage indication, protection and monitoring

TRENCHERS

• Telecom networks, FTTH & long distance, power cable installation
• Oil & Gas, Water pipelines
• Bulk excavation, Quarries & Surfaces mining

Business initiatives with impact on 2020.3Q Order Intake and M/L term forecast

	STRINGING	Game changer in T&D industry
		Launch of full electric solutions & innovative maintenance technologies in US & European markets
E		North America: strong order acquisition
N E		Digital machines are the best seller for US end users Further push thanks to the collaboration with renting houses	Order Intake 2020.3Q
R		Italian Market: speed up on Transmission market	€ 40.4 M
G Y	ENERGY	Awarded tender for providing and commissioning protection, control and monitoring systems HV substations New opportunities for integrated remote-control systems based on IEC 61850 for HV substations	for
	AUTOMATION	Enel: growing supplies on awarded tenders for protection and control solutions
		Cutting-edge cyber-secured solutions to improve power grids reliability and security
		New business opportunities	Order Intake 2020.Q3
		Integrated value chain in the surface mining sector in Africa Telecom and fiber business and energy cable automatic laying projects in Oceania	€ 49.4 M
	TRENCHER	Success of the wider business proposal
		Increase business volumes and market shares thanks to a stronger and more complete offer and wider range of solutions (sales, rental and specialized services)
		Integrated solutions: vehicles + diagnostic systems + platforms	Strong PIPELINE of
RAIL		First two diagnostic vehicles in operation on the RFI network (Italy) Solutions for remote process of fault detection (COVID procedures) and development of platforms for unmanned diagnostic for the highest safety standard of rail infrastructure	opportunities
		ETCS: a new era in the European train protection system
		First project in Czech Rep. to equip vehicles with ETCS (European Train Control System) for safe railcars circulation on the high-speed lines. First step to upgrade all the fleets of railcars.

• Tesmec Group at a glance >
• 2020.9M results >
• Outlook >
• COVID-19 >
• ANNEX A - 2020.9M Profit & Loss statement - Balance Sheet >

2020.9M Closing

GROUP (€ mln)	2020.9M* proforma	2020.9M	2019.9M	Delta vs. Proforma%
REVENUES (1)	119,0	116,8	144,2	-17,5%
EBITDA (2) (3)	17,6	15,7	17,4	0,9%
% on Revenues	14,8%	13,4%	12,1%
EBIT (4)	0,4	0,2	3,9
% on Revenues	0,3%	0,1%	2,7%
Differences in Exchange (5)	(2,5)	(2,8)	1,3
% on Revenues	-2,1%	-2,4%	0,9%
PROFIT (LOSS) BEFORE TAX	(6,1)	(6,4)	1,4
% on Revenues	-5,1%	-5,5%	0,9%
NET INCOME/(LOSS)	(4,5)	(4,8)	0,7
% on Revenues	-3,7%	-4,1%	0,5%
GROUP (€ mln)	2020.9M* proforma	2020.9M	2019.12 proforma	Delta vs. Proforma%
NFP ante IFRS 16	114,7	114,7	106,9	-7,3%
NFP post IFRS 16	137,8	137,8	130,9
of which Shareholders Loan	10,5	10,5	10,5

*The pro-forma results include the result of the 4Service Group on the 9M basis, instead of just the results achieved within the perimeter of the Tesmec Group from the date of first consolidation (April 23, 2020)

• (1) Revenues: (mainly TRS Sales) affected by the actions taken by public authorities to contain the spread of the COVID-19. After the slowdown and lockdown phases, the Group restarted its activities in May, reaching full operations during June. In the 3Q the Group achieved 46,0 M€ in line with last year
• (2) EBITDA: 3Q better than previous year thanks to Rental and Sales with high margin, which balanced the negative impact in terms of turnover reduction and margin contraction caused by Covid-19 in H1
• (3) Efficiency: Starting from March, the Group undertook all the necessary actions to contain its fixed costs. This actions will impact the 2H, too. The Group collected all the possible operating grants in the different countries around the world
• (4) Impacted by 4service's fleet depreciation, but the 3Q is better than 2019.3Q
• (5) Negative impact of Forex losses (USD & related currencies), 2,4 M€ are "not realized" forex losses. 1,7 M€ generated in the 3Q, net of which the Net Results would have been better than 1H results

ENERGY	2020.9M	2019.9M	Delta %
Revenues	29,2	31,5	-7,3%
EBITDA	3,8	3,8	-0,9%
% on Revenues	12,8%	12,0%

TRENCHERS	2020.9M	2019.9M	Delta %
Revenues proforma	68,4	89,4	-23,5%
EBITDA proforma	10,8	9,8	10,2%
% on Revenues	15,8%	10,9%

RAILWAY	2020.9M	2019.9M	Delta %
Revenues	21,4	23,3	-8,1%
EBITDA	3,0	3,8	-20,7%
% on Revenues	14,2%	16,5%

• > The decrease is related to the lockdown and slowdown in the 1H
• > Improved 3Q performance compared to 2019.3Q thanks to resiliency of the Energy sector
• > The confirmed order backlog was Euro 77,0 million
• > More impact on TRS sales than rental in the 1H.2020 due to Covid-19
• > Better EBITDA thanks to the integration of the rental activities
• > The confirmed order backlog was Euro 92,0 million

> The decrease is mainly due to the slowdown / lockdown, mitigated by the relaunch of activities in May. Railways is characterized by m/l term backlog, so the drop was lower than TRS business

> EBITDA is affected by low margins vehicles

> The confirmed order backlog was Euro 69,0 million, not including Euro 50 million of the provisional award of the RFI Tender

2020.9M

Euro/mln		1H			3Q			9M_YTD
	2020 pf	2019	Var.	2020 pf	2019	Var.	2020 pf	2019	Var.
REVENUES	73,0	97,5	-25,1%	46,0	46,7	-1,5%	119,0	144,2	-17,5%
EBITDA	9,8 13,4%	12,1 12,4%	-18,8%	7,8 14,6%	5,3 11,4%	47,2%	17,6 14,8%	17,4 12,1%	0,9%
EBIT	(1,4)	3,3		1,8	0,6		0,4	3,9

After facing a first half characterized by a contraction of margins due to the reduction in turnover and the start of the necessary actions in order to contain its costs and improve the efficiency of the company structure, during the 3Q the Group achieved a higher margin than 2019.3Q, thanks to the rental business and the focus on revenues with higher margins.

The YTD EBIT is affected by the depreciation of the 4Service Group's fleet for 3.8 M€. With reference to the 2020.3Q, the Group recorded a better performance that the previous year, including the additional depreciation of the 4service fleet.

30 October 2020 8

BACKLOG

Energy Total BACKLOG Sales 2020.Q3 12,4 46,0 8,2 25,4 40,4 49,4 Intake 2020.Q3 Euro/mln 89,8 77,0 238,0 69,0 92,0 30/09/2020 (2) 49,0 194,2 77,2 68,0 30/06/2020 (1)

• (1) The acquisition of rail backlog has been impacted by the slowdown in the award of the Public Tender, but the strong pipeline of the potential new tenders still confirmed.
• (2) Including the provisional award of the RFI tender for the production of diagnostic vehicles for around Euro 50 million, the backlog would be around Euro 288,0 million

INTERNATIONAL SCALE, FOCUS ON EU-USA

2020.9M PROFORMA EBITDA

€ mln

30 October 2020 11

Financial Information (€ mln)	2020.9M	2019
Net Working Capital	79,5	73,0
Non Current assets	76,4	66,8
Right of use - IFRS 16/IAS 17	23,6	20,1
Other Long Term assets/liabilities	6,9	4,2
Net Invested Capital	186,4	164,2
Net Financial Indebtness	114,7	98,5
Lease liability - IFRS 16/IAS 17	23,1	19,5
Equity	48,6	46,2

2020.9M Impacted by the Increase of NWC (mainly inventories) to support the 2020.2H and by the change of Group perimeter (4Service Group) ²⁰¹⁹

Working Capital evolution

Increase of inventories in the first part of year due to Covid situation and to support the growth of 2020.2H

2020.9M € 79,5 mln

30 October 2020 13

€ 60,8 mln

2019 € 73,0 mln

Net Financial Position Evolution

€ mln NET FINANCIAL POSITION

Net Financial Position Evolution

NET FINANCIAL POSITION

* From 1 st January 2019, the new IFRS 16 has been introduced, the impact in term of NFP is around 23,1 M€, otherwise the NFP would have been around 114,7. Since April the NFP included the financial debt from the acquisition of 4service around 11,0 M€.

• Tesmec Group at a glance >
• 2020.9M results >

Outlook >

• COVID-19 >
• ANNEX A - 2020.9M Profit & Loss statement - Balance Sheet >
• ANNEX B - Business strategy deep dive >

	▪ Focus on existing business
Corporate	▪ From equipment manufacturer to solution provider able to provide added value services for the customers
strategy	▪ Focus on maintenance and management of infrastructures in addition to their construction to increase recurring revenues streams
	▪ Efficient and effective organization
Cross	▪ DIGITALIZATION
development	▪ SUSTAINABILITY
drivers	▪ ENERGY TRANSITION

Advanced technologies for T&D power lines construction, maintenance and management

Innovative systems for electrification, maintenance and diagnostic of railway infrastructure

Integrated solutions for fiber installation, cables laying, surface mining and civil infrastructures

	2019pf	2020pf		2023
TURNOVER	199.6 M€	~ 170 M€	>> Significant performance of the Energy Automation segment; Stringing segment back to historical performances >> Focus on recurring revenues (rental & services)	275 ~ 290 M€ cagr : 8.5%~10.0% 19-23
			>> Growth in each business line
EBITDA	30 M€	~ 22 24 M€	>> Better mix of products & systems, premium price policy, impact of new high margin activities such as rental and hi-tech solutions	~ 53 58 M€ cagr : 17.0%~18.0% 19-23
			>> Rationalization and standardization of the products portfolio >> Broadly stable fixed costs
NFP/EBITDA	4.4x	~ 5.4x	>> Net working capital improvement and efficiency actions on inventory	1.5x ~
			>> Optimization of credit management policies >> 2020-2023: Cumulated Capex in 4 years 60 M€, progressive reduction to 5% of the CAPEX/Revenues

• Tesmec Group at a glance >
• 2020.9M results >
• Outlook >

COVID-19 >

ANNEX A - 2020.9M Profit & Loss statement - Balance Sheet >

COVID-19 impact

st 1 PHASE Health emergency	Different impacts on the several businesses and key countries of the Group Stop of the production activities in Europe No impacts in the Tesmec markets/sector but delays due to the production and logistic lock down
nd 2 PHASE Reopening	Essential services granted in smart working modality Reopening of production activities The gears of the reopening will be impacted by the Government Rules.
rd 3 PHASE Recovery & growth	Recovery and growth thanks to new business opportunities and relevance of Tesmec key drivers: safety, connectivity and sustainability
Outlook xxx	The positive outlook is confirmed. Tesmec operates in strategic and infrastructure sectors (Energy, Telecom, Infrastructures) more and more crucial in the COVID era. The strong BACKLOG drives the growth trend. Good order acquisition confirmed, some possible risk of longer time for contracts/orders closing. ITALY: State of emergency triggered by COVID-19 extended until 31 January 2021
Management xxx Actions Summary	▪ Flexibility actions adopted ▪ All Safety and health measures ▪ Focus on efficiency and priorities	TARGET: highest level of safety & business continuity

• Tesmec Group at a glance >
• 2020.9M results >
• Outlook >
• COVID-19 >
• ANNEX A - 2020.9M Profit & Loss statement - Balance Sheet >

Summary 2020.9M Profit & Loss statement - Appendix A

E-MARKET SDIR CERTIFIED

Profit & Loss Account (Euro mln)	2020.9M	2019.9M	Delta vs 2019.9M	Delta %
Net Revenues	116,8	144,2	(27,4)	-19,0%
Raw materials costs (-)	(49,8)	(63,2)	13,4	-21,2%
Cost for services (-)	(21,0)	(26,4)	5,4	-20,5%
Personnel Costs (-)	(35,3)	(38,7)	3,4	-8,7%
Other operating revenues/costs (+/-)	0,5	(3,7)	4,2	-113,2%
Non recurring revenues/costs (+/-)	0,0	0,0	0,0	na
Portion of gain/(losses) from equity investments evaluated using the equity method	0,3	0,1	0,2	325,3%
Capitalized R&D expenses	4,2	5,2	(1,1)	-20,1%
Total operating costs	(101,1)	(126,8)	25,7	-20,2%
% on Net Revenues	(87%)	(88%)
EBITDA	15,7	17,4	(1,7)	-9,9%
% on Net Revenues	13%	12%
Depreciation, amortization (-)	(15,5)	(13,5)	(2,0)	14,9%
EBIT	0,2	3,9	(3,7)	-95,7%
% on Net Revenues	0%	3%
Net Financial Income/Expenses (+/-)	(6,6)	(2,6)	(4,1)	159,3%
Taxes (-)	1,6	(0,6)	2,3	-361,6%
Minorities	(0)	(0)	(0,0)
Group Net Income (Loss)	(4,8)	0,7	(5,5)	n/a
% on Net Revenues	-4%	1%

Summary 2020.9M Balance Sheet - Appendix B

Balance Sheet (€ mln)	2020.9M	2019
Inventory	78,1	69,9
Work in progress contracts	16,6	16,3
Accounts receivable	61,0	67,9
Accounts payable (-)	(55,1)	(57,5)
Op. working capital	100,6	96,7
Other current assets (liabilities)	(21,2)	(23,6)
Net working capital	79,5	73,0
Tangible assets	50,3	42,5
Right of use - IFRS 16/IAS 17	23,6	20,1
Intangible assets	21,9	20,4
Financial assets	4,2	3,9
Fixed assets	100,0	87,0
Net long term liabilities	6,9	4,2
Net invested capital	186,4	164,2
Cash & near cash items (-)	(48,9)	(17,9)
Short term financial assets (-)	(14,4)	(12,1)
Lease liability - IFRS 16/IAS 17	23,1	19,5
Short term borrowing	90,0	79,8
Medium-long term borrowing	87,9	48,7
Net financial position	137,8	118,0
Equity	48,6	46,2
Funds	186,4	164,2

Notes

The pro-forma results were prepared for illustrative purposes only, and were obtained by making appropriate pro-forma adjustments to the historical data to retroactively highlight the effects of the 4Service Group's transaction, as if this transaction had occurred on 1st January 2020, instead of on 23 April 2020. The proforma results therefore include the result of the 4Service Group on the half-year basis, instead of just the results achieved within the perimeter of the Tesmec Group from the date of first consolidation (April 23, 2020).

Considering the uncertainty linked to the spread of the COVID-19 virus and the impacts on the global economy, the targets set by the Management may be susceptible to changes. These targets are set in the assumption that the pandemic situation remains stable and / or better in Europe and that it does not get worse in other areas of the world, such as the United States and Latin America

The plan doesn't include any cash in from share capital increase. 50 M€ of credit lines already collected from financial institutions

Disclaimer

The manager responsible for the preparation of the corporate accounting documents, Marco Paredi, declares, pursuant to article 154-bis, paragraph 2, of Legislative Decree No. 58/1998 ("Consolidated Law on Finance") that the information contained in this press release corresponds to the document results, books and accounting records. Note that in this press release, in addition to financial indicators required by IFRS, there are also some alternative performance indicators (e.g. EBITDA) in order to allow a better understanding of the economic and financial management. These indicators are calculated according to the usual market practice.

This press release contains some forward looking statements that reflect the current opinion of the Tesmec Group management on future events and financial and operational results of the Company and of its subsidiaries, as well as other aspects of the Group's activities and strategies. These forward looking statements are based on current expectations and assessments of the Tesmec Group regarding future events, as well as on the Group's intentions and beliefs. Considering that these forward looking statements are subject to risk and uncertainty, the actual future results may considerably differ from what is indicated in the above forward looking statements as these differences may arise from several factors, many of which lie beyond the Tesmec Group's ability to accurately check and estimate them. Amongst these - including but not limited to - there are potential changes in the regulatory framework, future developments in the market, price fluctuations and other risks. Therefore, the reader is asked to not fully rely on the content of the forecasts provided as the final results could significantly differ from those contained in these forecasts for the reasons indicated above. They have been included only with reference up to the date of the above-mentioned press release. The prospective data are, in fact, forecasts or strategic targets established within the corporate planning.

The Tesmec Group does not assume any obligation to publicly disclose updates or amendments of the forecasts included regarding events or future circumstances that occur after the date of the above-mentioned press release. The information contained in this press release is not meant to provide a thorough analysis and has not been independently verified by any third party. This press release does not constitute a recommendation for investment on the Company's financial instruments. Furthermore, this press release does not constitute an offer of sale or an invitation to purchase financial instruments issued by the Company or by its subsidiaries.

www.tesmec.com