Slide 1: Tesmec Group First Quarter 2011 Results
Tesmec Group FIRST QUARTER 2011 RESULTS Analyst Presentation, 11 May 2011 Corporate
Slide 2: Agenda
Agenda FIRST QUARTER 2011 - Main business highlights A.Caccia, CEO FIRST QUARTER 2011 - Financial results P.Mosconi, GM A.Bramani, CFO Outlook 2011 A.Caccia, CEO Appendix 2/28
Slide 3: Index
Index FIRST QUARTER 2011 - Main business highlights FIRST QUARTER 2011 - Financial results Outlook 2011 Appendix 3/28
Slide 4: Summary of main business highlights
Summary of main business highlights • March: agreement to create a JV Company in Qatar • April: stringing cooperation agreement in Russia • March: Shale Gas Developments (USA) • March: 21 mm euro syndicated loan • January: renewal of rent agreement for Grassobbio premises 4/28
Slide 5: FSK Agreement: Stringing cooperation agreement in Russia
FSK Agreement Stringing cooperation agreement in Russia OAO FSK EES is the single source for managing, maintaining and developing the National grid in Russia; the Company operates 121.000 km of high voltage transmission lines and 800 substations with a total capacity of 305.5 Gwatts; capex bud
Slide 6: Tesmec Peninsula
Tesmec Peninsula agreement to create a JV Company in Qatar Ownership (49% held by Tesmec spa and 51% held by local partner in Qatar TME) TME being Tesmec distributor of trenchers in Qatar with average yearly sales in excess of 20 mm Usd in the last few years for Qatar market; The JV company wi
Slide 7: Shale Gas Developments
Shale Gas Developments E&P activities ramping up in different locations not only in US and Gas prices under recovery; start up phase of our branch in Pennsylvania (Marcellus Shale) with one sales manager so far and another sales person under recruitment process; main sales activities so far on
Slide 8: New financial facility
New financial facility 21 mm euro syndicated loan Arranger Bank: BNL (Group BNP Paribas); Lenders: BNL, B.P.Milano, B.P.Vicenza, GE Capital, Intesa San Paolo and Unicredit; Oversubscription by 20%; 8 mm to be utilised for refinancing purposes (mainly Tesmec USA); 13 mm euro to be utilised
Slide 9: Grassobbio premises: renewal of rent agreement (1)
Grassobbio premises: renewal of rent agreement (1) renewal of rent agreement for Grassobbio premises Old Contract -owner: Italease Gestione Beni -Expiry date: 2016 -Rent cost: 2,2 mm euro New Contract -owner: Dream Immobiliare Srl (related party) -Expiry date: 2025 -Rent cost: 1,9 mm euro Main highl
Slide 10: Grassobbio premises: renewal of rent agreement (2)
Grassobbio premises: renewal of rent agreement (2) The IAS 17 effect at March 31,2011 Balance Sheet effect Tangible assets 22,2 Profit & Loss Effect Other Current Asset/ (Liabilities) 0,8 Other Operating Revenues/Costs 0,33 Cash (2,7) Depreciation, amortization (0,1) Total 20,3 Net Financial Income
Slide 11: Shareholding Structure
Shareholding Structure Ennismore AM Italiana Alimenti 3T Finanziaria 2,30% 5,34% S.p.A. Albemarle AM 7,45% 2,10% TTC S.r.l. Free float 30,30% 39,97% FI.IND S.p.A. Post IPO lock-up agreements: 12,54% TTC & FI.IND.: 1 year (expiring 1st July 2012) 11/28
Slide 12: Index
Index FIRST QUARTER 2011 - Main business highlights FIRST QUARTER 2011 - Financial results Outlook 2011 Appendix 12/28
Slide 13: First Quarter 2011 Results
First Quarter 2011 Results Tesmec (Cons.) Tesmec (Cons.) Income Statement (€ m) Financial Information (€m) 3M 2010 3M 2011 delta % 2010 3M 2011 delta% Revenues 29,3 26,5 -9,6% Net working capital 40,2 48,4 20% Non current assets 26,1 47,0 80% EBITDA 5,5 5,3 -3,6% Other LT assets/(liab) 1,1 1,6 45% %
Slide 14: Revenues and EBITDA for Stringing and Trencher Division
Revenues and EBITDA for Stringing and Trencher Division • Revenues (€ mln) 29,3 26,5 14,6 9,4 Stringing Equipment Trenchers 14,7 17,1 3M 2010 3M 2011 • EBITDA (€ mln and % of Net Revenues) 5,5 Stringing Equipment 18.9% 5,3 20 % Trenchers 2,5 17.6% 1,6 16.6% 3 3,7 21.7% 20.2% 3M 2010 3M 2011 14/28
Slide 15: International scale and exposure to growing economies
International scale and exposure to growing economies 2010 2011 Stringing equipment 11,1% 2,1% 5% 2% 1% 14% 21,3% 12,9% 2% 3,4% 49,1% 76% Italy Europe Middle East BRICs and Oceania Africa North-Central America Trenchers 5% 26% 2 4 ,4% 2 5 ,6% 2% 2,3% 7% 1 3 ,3% 0% 0,1% 43% 3 4 ,3% Italy Europe Middl
Slide 16: Revenues Geographical Split
Revenues Geographical Split Tesmec Group Revenue increase in Stringing was mainly driven by increasing sales in Brazil and Russia Markets € mln Revenues Geographical Split 50 40 +1,6 +5,8 30 29,3 20 10 -3,6 -3,0 -0,9 -2,7 25,9 0 Revenues Italy Europe Middle East BRICS and Africa North Revenues 3M
Slide 17: EBITDA path
EBITDA path Tesmec Group • EBITDA on Revenues increases from 18,9% (3M 2010) to 20% (3M 2011) • Accounting tretment of the new rent contract affected positively EBITDA by 0,3 mm euro • Ebitda decrease explained by volume effect € mln 7 0,3 6 5 (0,5) 4 3 5,5 5,3 2 1 0 EBITDA 3M 2010 IAS 17 Effect Vol
Slide 18: Working Capital Evolution
Working Capital Evolution Tesmec Group 180 160 Receivables were impacted by 140 144 148 124 contingent slow down of receipts from 120 111 100 ME area; 80 90 86 60 Payables decrease was mainly linked 40 to payments higher than new 20 28 23 - suppliers’ credit Days FY 2010 3M 2011 Calculated on Re
Slide 19: NFP Evolution
NFP Evolution Tesmec Group Main variance related to accounting of new rent contract (IAS 17); The value of this financial debt is not included in the calculation of the covenants of the main loan agreements; Working capital increase caused by contingent situation in ME area; € mln 70 NFP Evolu
Slide 20: Exchange exposure First Quarter 2011
Exchange exposure First Quarter 2011 Profit & Loss Actual 3m2011 % on total USD Net Revenues 20% Euro Net Revenues 80% Profit & Loss Actual 3m2011 % on total USD Operating Costs 11% Euro Operating Costs 89% Balance Sheet Actual 3m2011 % on total Net Trade Receivables in Usd 35% Net Trade Receivables
Slide 21: Raw Materials Impact
Raw Materials Impact Steel Price trend 2008-2011 Price trend on purchases Tesmec S.p.A Saving actions Contracts revision with key suppliers with the target of maintaining costs to 2010 level Completed start up phase for new supplier in Romania for trencher division During the 2011 will be clos
Slide 22: Index
Index FIRST QUARTER 2011 - Main business highlights FIRST QUARTER 2011 - Financial results Outlook 2011 Appendix 22/28
Slide 23: Order Book
Order Book ORDER BOOK 3M 2010 – 3M 2011 €m 61,3 60 49,1 45 33,3 22,4 30 15 26,7 28,0 0 3M 2010 3M 2011 Stringing Equipment Trenchers STRINGING EQUIPMENT TRENCHERS €m €m 90 45 75 60 30 45 30 15 33,3 23,0 19,7 15 30,0 28,0 17,1 15,1 9,4 0 0 Order book 2011 Order Intake Order book Order book 2011 Order
Slide 24: Guidelines 2011
Guidelines 2011 Tesmec Group expects 20% revenues growth in 2011 and subsequent years. Tesmec Group plans to: consolidate the growth achieved in the Stringing market. It is expected that this segment will growth at a single digit; significantly increase revenues in Trencher segment, from both sa
Slide 25: Index
Index FIRST QUARTER 2011 - Main business highlights FIRST QUARTER 2011 - Financial results Outlook 2011 Appendix 25/28
Slide 26: Summary Profit & Loss statement with the effects of new rent contract under IAS 17
Summary Profit & Loss statement with the effects of new rent contract accounted under IAS 17 A B A+B Profit & Loss Account (€ m) 3M 2011 Delta vs IAS 17 3M 2011 3M 2010 Delta % adj 2010 Net Revenues 26,5 26,5 29,3 (2,8) -9,6% Raw materials costs (-) (11,7) (11,7) (15,0) 3,3 -22% Cost for services (-
Slide 27: Summary Balance Sheet with the effects of new rent contract under IAS 17
Summary Balance Sheet with the effects of new rent contract accounted under IAS 17 A B A+B Balance Sheet (€ m) 2011 adj IAS 17 2011 2010 Inventory 43,7 43,8 42,2 Accounts receivable 36,6 36,5 32,5 Accounts payable (-) (25,2) (0,0) (25,2) (26,3) op. working capital 55,1 (0,0) 55,1 48,4 Other current
Slide 28: 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