Tesmec S.p.a. · MIL:TES

Tesmec — 9M 2012 Earnings Presentation

22 slides from Tesmec's earnings presentation, Nov 9, 2012

1. Slide 1: Tesmec Group 9M 2012 Results

   Tesmec Group 9M 2012 Results Analyst Presentation, 9 November 2012 Corporate

2. Slide 2: Agenda

   Agenda  2012 – Business update A.Caccia Dominioni, CEO  9M 2012 - Main business highlights Stringing P.Mosconi, GM  9M 2012 – Main business highlights Trencher A.Caccia Dominioni, CEO  9M 2012 - Financial results A.Bramani, CFO  Outlook 2012 - 2013 A.Caccia Dominioni, CEO  Appendix 2/22

3. Slide 3: First 9M 2012 Key Facts

   First 9M 2012 Key Facts • Ordinary Shareholders’ Meeting of Tesmec S.p.A. approved the purchase plan of treasury shares and appointed a new independent director. • Acquisition of 40% stake of Bertel company in order to enlarge Tesmec Jan 2012 offering in the High Voltage grid management • Signature

4. Slide 4: Tesmec Group – Business Matrix

   Tesmec Group – Business Matrix TESMEC TESMEC TESMEC TESMEC TESMEC Stringing Grids Railway Trenchers Special Contracting MARKETS 4/22

5. Slide 5: Group Structure at September 30, 2012

   Group Structure at September 30,2012 NEW COMPANY CREATED/PURCHASED IN 2012 Tesmec S.p.A. Existing Company at 1.1.2012 Tesmec Tesmec Tesmec Tesmec USA Inc Rus S.A. Balkani (75%)* (100%) (100%) EAD (100%) Effect on Fully EBITDA Tesmec Service S.r.l. Consolidated and Pre-Tax (100%) Profit I-Light and A

6. Slide 6: International strategy follow up

   International strategy follow up • USA: Both Trencher (Tesmec USA) and Stringing (Condux Tesmec) performing far better than 9m previous year thanks to the recovery of infrastructural projects and the success of the solution offered for the Shale Gas Projects; • Middle East: Thanks to the finalisatio

7. Slide 7: Focus on Innovation

   Focus on Innovation Group maintains focus on R&D projects: • Railways -> investment in R&D in order to enlarge the range of high technological solutions offered • Trencher -> remote monitoring system which allows remote control of the machine performance • Stringing -> Puller Tensioner on Truck 7/22

8. Slide 8: Main business highlights in 9M 2012: Stringing

   Main business highlights in 9M 2012: Stringing • Financials: Sales 52,1 mln; Margins 20%; Backlog 29,5 mln. • Main markets: Nord and Central America; Europe (maintenance); BRICS remains the biggest market. • Good sales performance in JV Condux-Tesmec and order intake in Railway: - Condux-Tesmec JV s

9. Slide 9: Main business highlights in 9M 2012: Trencher

   Main business highlights in 9M 2012: Trencher • Financials: Sales 28,7 mln; Margins 21%; Backlog 30,8 mln. • Main markets: Middle East the local stock achieved the minimum level after the sales done to final client by T. Peninsula and is necessary, by customer needs, to provide new technological mac

10. Slide 10: 9M 2012 Results

    9M 2012 Results Income 9M2012 Tesmec (Cons.) Statement 9M 1H 3Q 9M vs Financial Information (€ mln) 2011 2012 2012 2012 9M2011 (€mln) 2011 1H 2012 9M 2012 delta % Revenues 80,8 50,0 30,8 80,8 0% Net working capital 48,4 54,4 49,2 Non current assets 48,2 49,5 51,1 EBITDA 14,5 9,8 6,6 16,4 13% Other L

11. Slide 11: Revenues: international scale and exposure to growing economies

    Revenues: international scale and exposure to growing economies 9M 2011 9M 2012 Stringing equipment 64% on Total Revenue 2012 9% 6% 4% 5% 4% 9% 25% 31% 3% 59% 39% 6% Italy Europe Middle East BRICs and Oceania Africa North-Central America Trenchers 36% on Total Revenue 2012 10% 7% 27% 6% 9% 45% 8% 31

12. Slide 12: Stringing Division: revenues increase with EBITDA margin above 20%

    Stringing Division: revenues increase with Ebitda margin above 20% Revenues (€ mln) EBITDA (€ mln and % of Net Revenues) 9M 2011 – 9M 2012 9M 2011 – 9M 2012 12 23% 20% 50 9 40 30 20 47,1 52,1 6 10,9 10,4 10 3 0 0 9M 2011 9M 2012 9M 2011 9M 2012 • Positive effect of New Railway projects to be added i

13. Slide 13: Trencher Division: revenues decrease with EBITDA margins boosting at 21%

    Trencher Division: revenues decrease with Ebitda margins boosting at 21% Revenues (€ mln) EBITDA (€ mln and % of Net Revenues) 9M 2011 – 9M 2012 9M 2011 – 9M 2012 21% 32 6 11% 24 4 16 33,7 28,7 6,0 8 2 3,6 0 0 9M 2011 9M 2012 9M 2011 9M 2012 • In 9M 2012 No direct sales vs T. Peninsula due to destoc

14. Slide 14: EBITDA variance

    EBITDA variance Sales margins and cost efficiencies to support improvement EBITDA 9M 2012 20 4 (0,1) (1,5) 16 (0,1) (0,4) 12 8 16,4 14,5 4 0 EBITDA Raw Material Cost for services Personnel Other operating Capitaized R&D EBITDA 9M 2011 costs Costs revneues/costs expenses 9M 2012 14/22

15. Slide 15: Net Profit variance

    Net Profit variance DIE and financial items partially offsetting better EBITDA by 2 mm NET PROFIT 9M 2012 8 2 6 (0,4) (0,2) (0,2) (0,2) (0,5) 4 4,7 5,2 2 0 Net Profit Ebitda Forex Derivatives Financial Taxes Depr. & Amort. Net Profit 9M 2011 margin effect charges 9M 2012 15/22

16. Slide 16: Working Capital Evolution

    Working Capital Evolution Working Capital Evolution Description 60 (€ mln) 9M 2011 2012 € mln 1,4 5,7 Trade 43,9 41,2 (2,7) Receivables 40 (3,6) Inventory 42,1 43,5 Trade payables (26,5) (30,1) 48,4 49,2 20 Other current (11,1) (5,4) asset/liabilities Net Working 48,4 49,2 Capital 0 FY2011 Inventori

17. Slide 17: Exchange exposure 9M 2012

    Exchange exposure 9M 2012 Revenues Operating Costs 12% 32% Euro Euro 68% USD USD 88% Trade Receivables Trade Payables Euro 9% Euro 0,2% 41% Other Other 58% Currency Currency 90,8% USD USD 1% 17/22

18. Slide 18: Order Book

    Order Book ORDER BOOK YEAR END 2011 – 9M 2012 € mln 60,3 60 44,1 45 30,8 19,1 30 15 29,5 25,0 0 2011 9M 2012 Stringing Equipment Trenchers STRINGING EQUIPMENT TRENCHERS € mln € mln 60 40 50 40 30 30 56,6 20 40,4 52,1 20 28,7 30,8 29,5 10 19,1 25,0 10 0 0 Order 9M 2012 Order Order Order book 9M 2012

19. Slide 19: Outlook 2012

    Outlook 2012 After the positive performance recorded in 9M 2012 Tesmec management confirms consensus estimates for 2012 based on the expectations that the following factors will have a positive impact on both volumes and margins of the last quarter 2012: - Recovery of TR sales in the ME area; - Grow

20. Slide 20: Appendix A - Summary 9M 2012 Profit & Loss statement

    Appendix A - Summary 9M 2012 Profit & Loss statement 9M 9M Profit & Loss Account (€ mln) Delta vs 2012 2011 Delta % 2011 Net Revenues 80,8 80,8 (0,0) 0,0% Raw materials costs (-) (35,4) (39,4) 4,0 -10% Cost for services (-) (15,0) (14,9) (0,1) 1% Personnel Costs (-) (14,6) (13,2) (1,4) 11% Other ope

21. Slide 21: Appendix B - Summary Balance Sheet

    Appendix B - Summary Balance Sheet Balance Sheet (€ mln) 9M 2012 2011 Inventory 43,5 42,1 Accounts receivable 41,2 43,9 Accounts payable (-) (30,1) (26,5) Op. working capital 54,6 59,5 Other current assets (liabilities) (5,4) (11,1) Net working capital 49,2 48,4 Tangible assets 41,1 38,9 Intangible

22. Slide 22: TESMEC S.p.A - Headquarters

    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 rec

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