Webuild — Earnings Release 2020

Nov 26, 2020

PRESS RELEASE

CONSOLIDATED PRO-FORMA FINANCIAL DATA AND OUTLOOK

2020 OUTLOOK1

• Construction Backlog: ~€ 33 billion, equal to more than five years of production
• Revenues: € 5.7 – 6.0 billion (€ 6.2 – 6.5 billion including estimated badwill)
• EBITDA margin: 4.0% - 5.0% (>11% including estimated badwill)
• NFP: € 0.6 - 0.8 billion

STRATEGIC DRIVERS AND FINANCIAL TRAJECTORY OF CORE BUSINESS

• Strategic Drivers: continue business de-risking although leveraging opportunities from greater post-COVID-19 infrastructure investments; consolidation of presence in Italy; expansion in related sectors; efficiency and digitalisation; sustainable growth
• Financial trajectory expected to recover sharply in 2021:
  • o Average Book-to-bill: >1.0 in 2021-2023
  • o Revenues: € 6.5 – 7.2 billion in 2021; € 7.4 – 8.3 billion in 2023
  • o EBITDA margin: ca. 8.0% in 2021; >8.5% in 2023
  • o NFP: € 0.5-0.3 billion in 2021; € 0.3 – 0.04 billion in 2023

MILAN, November 26, 2020 – The Board of Directors of Webuild (MTA: WBD) reviewed the consolidated proforma financial results for full-year 2019 and the first half of 2020 that include the impact of the Group's acquisition of Astaldi. The Board also approved the Group's strategic guidelines, as well as its financial trajectory for the 2020-2023 period that take into consideration the acquisition of Astaldi and relate to the aggregated core business, which has been developed to take into account the current global macroeconomic scenario in the midst of the Covid-19 health emergency and could face modifications due to significant changes to the scenario and subsequent further interruptions or the slowing down of the Group's activities.

¹ Figures based on constant foreign exchange rates and the absence of any unforeseen developments in the health emergency that could lead to a further impact on the global economy; they include Astaldi's contribution for twelve months of 2020 following its acquisition on November 5, 2020.

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CONSOLIDATED PRO-FORMA FINANCIAL DATA FOR 2019 AND FIRST HALF OF 2020

The following is a summary of Webuild's adjusted2 pro-forma financial data at December 31, 2019 and June 30, 2020 reflecting the impact the acquisition of a 66.3% stake in Astaldi S.p.A. on the Group's results. Although the transaction was completed on November 5, 2020, the data include Astaldi's contribution for the entire 12-month period ending on December 31, 2019 and the 6-month period ending on June 30, 20203 .

Euro / mio	FY 2019 Pro-Forma	1H 2020 Pro-Forma
Backlog	44.115	41.623
- of which Construction	36.114	33.846
- of which Concessions and O&M	8.001	7.777
Revenues	7.290	3.355
Revenues net of estim ated badwill 4	6.803	2.868
EBITDA	936	644
EBITDA net of estim ated badwill 4	449	156
Cash and Other financial assets	(1.873)	(2.197)
Net Derivatives	81	6
Gross Debt	2.497	3.306
Net Financial Position	705	1.115
Net Equity	2.350	2.248

Revenues, EBITDA and Net Equity include a gain equal to €487.6 million as a result of a preliminary estimate made under the Purchase Price Allocation (PPA) accounting procedure related to the acquisition of Astaldi, in accordance with IFRS 3 "Business Combinations". The gain will be included in the financial statement of Webuild subsequent to the Astaldi acquisition and will establish a fair value for the acquired activities and assets and the related price allocation. The final estimate of fair value on the date of the acquisition of activities and assets could differ significantly from the value in the reported estimates, leading to a significant variation in the pro-forma value of the abovementioned gain. The calculation of the pro-forma data, the risks and related limits are contained in the "Information Document relating to the subscription of a capital increase of Astaldi S.p.A. and the consequent acquisition of a controlling interest in the share capital of the same," issued under the provisions of Art. 71, Comma 1, in conformity with Attachment 3B Schedule No. 3 of CONSOB Regulation No. 11971/1999 pf May 14, 1999, including successive amendments, published on November 20, 2020.

² The data comprise: i) Webuild Group's results that include non-controlled Joint Venture – Work Under Management – entities at Lane Industries, as well as the impact of the extraordinary write-down of assets in Venezuela for full year 2019, and the impact of the out-of-court agreement with Società Italiana per Condotte d'Acqua S.p.A in A.S. ("Condotte") at June 30, 2020; and ii) adjustments made for the pro-forma data in the

^"Information Document relating to the subscription of a capital increase of Astaldi S.p.A. and the consequent acquisition of a controlling interest in the share capital of the same," published on November 20, 2020.

³ The adjusted pro-forma results include Astaldi on a consolidated basis for the full year ended December 31, 2019 and for the first half ended June 30, 2020.

⁴ The data excludes a gain equal to € 487.6 million deriving from a preliminary estimate made under the Purchase Price Allocation (PPA) accounting procedure related to the acquisition of Astaldi.

WEBUILD PERFORMANCE WITHIN GLOBAL CONTEXT

In the first nine months of 2020, there was a sudden worsening of the global macroeconomic scenario due to the Covid-19 pandemic and the measures taken by governments to address the health emergency. According to the latest estimates by the International Monetary Fund (IMF) published in October 2020, the global economy is forecast to contract by 4.4% in 2020. However, these forecasts are characterised by a high level of uncertainty in light of the arrival of a second wave of the pandemic in many countries.

The extraordinary impact of the pandemic and the safety measures that were implemented as a consequence led to a slower production rate at construction sites globally. The impact on the Group's revenues resulted in it being able to meet 75% of production expectations set for the current year.

The drop in production led to a reduction in the absorption of fixed costs that - together with the extraordinary costs incurred to ensure the safety of workers - reduced Group margins. Even though the health emergency resulted in the extension of the period of time to collect credits, Webuild continued to support its own suppliers. The pandemic saw to the postponement until after 2020 of the awarding of new projects worth approximately € 20 billion.

Within this context, Webuild nevertheless continued to remain focused on delivering its strategic and financial objectives, such as:

• Focus on regions with low risk profiles, such as Italy, Europe, North America and Australia. These regions have come to represent 63% of the order backlog in 2020 compared with 58% in 2018;
• Important contribution to Italy's construction sector via the construction of the Genoa-San Giorgio Bridge in record time, the relaunch of strategic infrastructure for € 3.6 billion (Verona-Padua highspeed railway, Ionian Highway, Genoa Railway Hub) and the execution of strategic projects, supporting local construction businesses with guaranties and payments;
• External growth, consolidating the Italian construction sector via the acquisition of Astaldi, Cossi Costruzioni and stakes held by Condotte in the COCIV and IRICAV II consortia responsible for the construction of high-speed railways between Milan and Genoa, and Verona and Padua, respectively;
• No contracts cancellation as a result of the pandemic: the lower revenues and margins for 2020 will be carried over to successive years; at the present time, all construction sites are open even though not all of them have returned to production levels registered prior to the pandemic;
• Solid net financial position, improving from the first half 2020;
• Adequate liquidity maintained at Group level.

In light of the above and in the absence of any unforeseen developments in the health emergency that could lead to a further impact on the global economy, the Group foresees the following for 2020:

• Construction Backlog: ~€ 33 billion, equal to more than five years of production
• Revenues: €5.7-6.0 billion (including badwill, range seen at € 6.2-6.5 billion)
• EBITDA margin: 4.0-5.0% (including badwill, margin seen at >11%)
• Net financial position: € 0.6-0.8 billion

These figures are at constant foreign exchange rates and include Astaldi's contribution for twelve months of 2020 following its acquisition on November 5, 2020.

STRATEGIC DRIVERS

The global infrastructure market is changing constantly and influenced by various factors that include, among others, demographic growth, urbanisation, the impact of the Covid-19 pandemic, climate change, and new economic measures.

The period that will follow the pandemic offers significant opportunities for the sector, thanks to the following factors:

• Launch of important infrastructure investment plans in developed countries (Europe, the United States and Australia). In addition to new, large projects, part of the demand will concern the maintenance and renewal of existing infrastructure;
• Focus on innovation and sustainability (e.g. the Recovery Fund in Europe) that needs players with scale and expertise.

Within this context, Webuild is implementing the following guidelines:

• i. De-risk the order backlog by taking advantage of opportunities offered by a trend towards more infrastructure investment in markets with low risk profiles, including Italy, North America, central and northern Europe and Australia;
• ii. Consolidate presence in Italy, accelerating work on projects in the order book and taking advantage of the Group's greater scale to seize opportunities arising from Italy's latest measures for the infrastructure sector, which provides for a new advance payment regime and a simplified tender procedure;
• iii. Expand in adjacent segments that can enable greater diversification of the order backlog and cash flow, such as infrastructure maintenance in Italy;
• iv. Continue to implement an operational efficiency drive worth €120 million by 2023, focusing on overhead costs, indirect costs at work sites and consortia, and direct costs at work sites in order to create synergies with Astaldi. Measures include:
  • o Completion of the "crash program" launched in 2020 with an expected benefit of €17– 20 million in additional earnings before interest and taxes (EBIT);
  • o Change in the Group's structural organisation at the corporate and branch level;
  • o Lower indirect costs for projects;
  • o Lower costs related to Italian consortia;
  • o Improve organisational efficiencies on new projects via automation or the digitalisation of back-office processes;
• v. Strengthen leadership in innovation, including an investment of more than € 26 million to make core processes digital in Procurement, Business Development, Bidding, Operations, Control and Human Resources. A multi-year digital programme aimed to improve margins for ca. 70-100 basis points;
• vi. Focus on Environmental, Social and Governance (ESG), favouring infrastructure projects that help reduce harmful gas emissions, all the while guaranteeing high worker safety standards.

GROUP FINANCIAL TRAJECTORY

Assuming a normalisation of the context and based on the current perimeter of the Group, without including potential effects deriving from an expansion into related sectors, the following financial trajectory is expected for the Group in 2021-2023:

The Webuild Group proved its resilience in the face of the negative effects of the Covid-19 pandemic, supporting the execution and start of strategic infrastructure projects in Italy and abroad. It also successfully completed acquisitions such as Astaldi, while rigorously managing its liquidity to limit the effects of the pandemic on its net financial position. Although the global scenario remains difficult, the results achieved by the Group, its solid order backlog and improved financial structure allow to confirm with confidence its growth targets and sustainable rate of profitability for the medium to long term, which will result in a reduction in its financial debt and an adequate remuneration for its shareholders.

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Webuild, the new group born in 2020 from Salini Impregilo, is a leading global player in the construction of large, complex projects for sustainable mobility, clean hydro energy, clean water, green buildings, supporting clients in achieving sustainable development goals (SDGs). The Group is the expression of 114 years of engineering experience applied in 50 countries on five continents with 70,000 direct and indirect employees from more than 100 nationalities. Recognized for five years by Engineering News-Record (ENR) as the world leader in water infrastructure (such as dams, hydraulic tunnels, water and wastewater management, and water treatment and desalination plants), it ranks since 2018 among the top 10 in the environment sector and it is also leader in sustainable mobility (especially metro and rail lines, in addition to roads and bridges). A signatory of the United Nations Global Compact, the Group's expertise is displayed in projects such as the M4 metro line in Milan, Grand Paris Express, Cityringen in Copenhagen, Sydney Metro Northwest, Red Line North Underground in Doha, Line 3 of the Riyadh Metro and the high-speed railways in Italy. Other projects include the new Genoa Bridge and the new Gerald Desmond Bridge in Long Beach, California, the expansion of the Panama Canal, the

Snowy 2.0 hydroelectric power station in Australia, the Rogun hydroelectric dam in Tajikistan, the Anacostia River and Northeast Boundary tunnels in Washington, D.C. and the Al Bayt 2022 World Cup stadium in Qatar. In 2019, new orders totalled €8.1 billion, with a total backlog reaching €36.2 billion. Some 85% of the backlog for construction orders involves projects tied to the sustainable development goals of the United Nations (SDGs), while 60% concerns the reduction of greenhouse emissions. Webuild, subject to direction and coordination by Salini Costruttori SpA, is headquartered in Italy and is listed on the Milan Stock Exchange (Borsa Italiana: WBD; Reuters: WBD.MI; Bloomberg: WBD:IM).

More information at www.webuildgroup.com

Contacts: Media Relations Investor Relations Gilles Castonguay Amarilda Karaj Tel. +39 342 682 6321 Tel +39 02 444 22476 email: gr.castonguay@webuildgroup.com email: a.karaj@webuildgroup.com

Attached the proforma consolidated schedules of the income statement and statement of financial position of the Webuild Group at December 31, 2020 and at June 30, 2020, comprising: i) Webuild Group's results that include non-controlled Joint Venture – Work Under Management – entities at Lane Industries, as well as the impact of the extraordinary write-down of assets in Venezuela for full year 2019, and the impact of the out-of-court agreement with Società Italiana per Condotte d'Acqua S.p.A in A.S. ("Condotte") at June 30, 2020; and ii) adjustments made for the pro-forma data in the "Information Document relating to the subscription of a capital increase of Astaldi S.p.A. and the consequent acquisition of a controlling interest in the share capital of the same," published on November 20, 2020.

P&L - Euro / m io	Webuild Group FY 2019 - reported	Webuild Group Pro-Forma FY 2019	Unconsolidated JVs	Impairment Venezuela	Webuild Group Pro-Forma FY 2019 - adjusted
Revenues from contracts with customers	4.771	6.140	201	-	6.341
Other income	359	462	-	-	462
Gain from bargain purchase	-	488	-	-	488
Total revenues and other income	5.130	7.089	201	-	7.290
Operating expenses	(4.599)	(6.044)	(310)	-	(6.354)
EBITDA	531	1.045	(109)	-	936
Impairment losses	(102)	(105)	-	36	(69)
Provisions, amortisation and depreciation	(172)	(216)	-	-	(216)
Operating profit (loss) - EBIT	257	724	(109)	36	651
Financial income (expenses)	(77)	(119)	-	-	(119)
Net exchange gains (losses)	4	1	-	-	1
Net financing income (costs)	(73)	(118)	-	-	(118)
Net gains (losses) on equity investments	(128)	(97)	109	-	12
Profit (loss) before tax	56	509	-	36	545
Income tax	(69)	(98)	-	(9)	(107)
Profit (loss) from continuing operations	(13)	411	-	27	438
Profit (loss) from discontinuing operations	(1)	(8)	-	-	(8)
Profit (loss) for the period	(14)	404	-	27	431

Balance Sheet - Euro / m io	Webuild Group FY 2019 - reported	Webuild Group Pro-Forma FY 2019	Unconsolidated JVs	Impairment Venezuela	Webuild Group Pro-Forma FY 2019 - adjusted
Total Non Current Assets	2.013	2.506	-	-	2.506
Total Current Assets	6.194	8.119	-	-	8.119
Non current assets held for sale and discontinued operations	12	33	-	-	33
Total Assets	8.219	10.659	-	-	10.659
Total Equity	1.504	2.350	-	-	2.350
Total Non Current Liabilities	2.149	2.294	-	-	2.294
Total Current Liabilities	4.566	6.000	-	-	6.000
Liabilities directly associated with non current assets held for sale	-	15	-	-	15
Total Equity and Liabilities	8.219	10.659	-	-	10.659
Total gross indebtedness	(2.270)	(2.497)	-	-	(2.497)
Net Financial Position	(631)	(705)	-	-	(705)

P&L - Euro / m io	Webuild Group 1H 2020 - reported	Webuild Group Pro Forma 1H 2020	Unconsolidated JVs	Condotte out-of court agreement	Webuild Group Pro-Forma 1H 2020 - adjusted
Revenues from contracts with customers	1.936	2.543	180	-	2.723
Other income	97	144	-	-	144
Gain from bargain purchase	-	488	-	-	488
Total revenues and other income	2.033	3.175	180	-	3.355
Operating expenses	(1.946)	(2.556)	(171)	15	(2.712)
EBITDA	87	620	9	15	644
Impairment losses	(27)	(40)	-	20	(19)
Provisions, amortisation and depreciation	(69)	(124)	-	-	(124)
Operating profit (loss) - EBIT	(9)	456	9	35	500
Financial income (expenses)	(34)	(51)	-	-	(51)
Net exchange gains (losses)	(14)	(45)	-	-	(45)
Net financing income (costs)	(49)	(96)	-	-	(96)
Net gains (losses) on equity investments	(2)	24	(9)	-	16
Profit (loss) before tax	(59)	385	-	35	420
Income tax	(27)	(31)	-	-	(31)
Profit (loss) from continuing operations	(86)	354	-	35	389
Profit (loss) from discontinuing operations	-	(32)	-	-	(32)
Profit (loss) for the period	(86)	322	-	35	357

Balance Sheet - Euro / m io	Webuild Group 1H 2020 - reported	Webuild Group Pro Forma 1H 2020	Unconsolidated JVs	Condotte out-of court agreement	Webuild Group Pro-Forma 1H 2020 - adjusted
Total Non Current Assets	2.079	2.544	-	-	2.544
Total Current Assets	6.568	8.441	-	-	8.441
Non current assets held for sale and discontinued operations	-	13	-	-	13
Total Assets	8.647	10.998	-	-	10.998
Total Equity	1.401	2.248	-	-	2.248
Total Non Current Liabilities	1.775	1.919	-	-	1.919
Total Current Liabilities	5.471	6.824	-	-	6.824
Liabilities directly associated with non current assets held for sale	-	8	-	-	8
Total Equity and Liabilities	8.647	10.998	-	-	10.998
Total gross indebtedness	(3.107)	(3.306)	-	-	(3.306)
Net Financial Position	(1.099)	(1.115)	-	-	(1.115)