SR 408/SR 417 Interchange, Florida – U.S . First Half 2018 Financial Results 25 July 2018
Agenda Business update Pietro Salini Chief Executive Officer Financial Update Massimo Ferrari General Manager Finance & Corporate Group CFO 2 1H 2018 Presentation 25 July 2018
Group strategic guidelines A Leading Global Pure Construction Player AssetPortfolio Focus on Growth US strategy Efficiencyactions Optimization refocusing Risk profile optimization Primary Geographical Lane: step-change Cash generation Dynamic Risk Management footprint: strategy further management of and Organization ✓ USA concentrating on large Group’s asset Streamlining ✓ Australia Sound financial & complex ✓ portfolio Middle east structure Overhead costs infrastructure Primary sector Enhancing value optimization footprint: Lane Repositioning from smart portfolio ✓ Water Centralization of management ✓ Metro/Rail processes/functions 3 1H 2018 Presentation 25 July 2018
Solid orders intake through the cycle 3 Construction Backlog Jun-18 ca. €25B 1 Total New Orders Cumulative FY14-FY17 2 Book to bill Average FY14-FY17 1.16x LatAm 9% Africa 24% Italy 32% Middle East 12% €2.4B Lane Asia & North America Australia SAL Europe 11% 9% 3% FY14 FY15 FY16 FY17 1H18 26.5 billion Book-to-bill 1.4 X 1.14 X 1.04 X 1.20 X HEP Half year 83% 93% 64% Other 17% 22% 54% order intake ▪ Book-to-bill comfortably over 1.1 x over time Roads & ▪ Order dynamics over the years has shown undefined pattern for large orders Highways 23% Rails & ▪ Soft order intake over the last 12 months. Boost expected in 2H18 Undergrounds 38% 4 1H 2018 Presentation 25 July 2018
Boost of commercial activity in H2 2018 €/B Short-term commercial activity €3.2B €9.7B France Italy CA - Rail TX NY Europe DC €3.9B Saudi Arabia NC UAE - Hydro - Civil buildings - Rail - Road - Road - Rail €9.9B Middle - Hydro €6.1B USA Australia East - Hydro North - Rail Africa South-Est Asia - Rail - Hydro - Road - Airport Brazil €2.0B - Rail Peru Africa Argentina - Rail Asia & Australia LatAm - Airport - Hydro (€/B) ▪ €35 billion of new orders opportunities in H2 2018, of which approx. Awaiting outcome/best offer 5.0 €14 billion of private negotiations Private negotiations 13.7 ▪ US & Asia/Australia driving acquisition pipeline Tenders to be presented within 2018 16.0 5 1H 2018 Presentation 25 July 2018
Targeting multidomestic markets with favorable risk/return profile Geographical Revenues Distribution FY 2014 1H 2018 evolution Asia & North Australia North America 5% America 3% Middle RoW Europe & 23% East Africa 8% North 36% America LatAm 14% Asia & Australia 9% LatAm 3% Europe & Asia & Middle Africa Australia Middle East 70% East 28% 16% 61% ▪ Multidomestic Strategy: becoming domestic in US, Middle East, Asia & Australia 6 1H 2018 Presentation 25 July 2018
Australia – Our new forthcoming domestic market 1 2018 Civil Engineering – Sector Performance Annual Investment € 61 bn ▪ Australian Government has established a A$75 billion road and (including Federal, State and Territory) rail investments fund to finance infrastructure projects through 2018 to 2027. Y-o-Y Growth rate +4% +4% % on GDP Source: CRESME Simco Edilbox, June 2017 Cross- River Rail (Brisbane) 2 Upcoming important tenders we participate in Australia Salini Impregilo is part of a consortium that is shortlisted to build the 10.2-kilometer-long rail line that will pass Railways & ▪ The total value of these works exceed A$10 billion. Metros through the center of Brisbane . WestConnex, M4 to M5 Link (Sydney) Salini Impregilo leads a consortium shortlisted to design Northern and build the AUD$3.5-billion Rozelle Interchange, part of Territory Queensland Roads WestConnex, the biggest road development in Australia. Western South Australia Australia New South Wales Hydro Projects Victoria Salini Impregilo joint venture entered the shortlist for a very important hydro electric project Water Tasmania 7 1H 2018 Presentation 25 July 2018
Australia: a solid track record already Recent Projects Sydney Metro Northwest SVC Main KPIs ▪ Sydney Metro Northwest: new metropolitan train line north-west of Sydney ▪ Australia’s first fully automated Our experience in Australia dates back high-speed train system. to the 1970s when the Salini Impregilo ▪ Building 8 new stations and 4,000 parking lots. Group built Melbourne's Metro. Track record: 7 projects in 4 States (Queensland, Victoria, New South Completion Progress: Completed Wales, Western Australia) Forrestfield Airport Link, Perth ▪ 8.5 km of railways ▪ 15.6 km of metros ▪ Forrestfield-Airport Link: connecting Perth eastern suburbs ▪ 13 metro and railway stations in 3 with the existing suburban rail network & airport. main Australian cities: Perth, Sydney and Melbourne ▪ By 2021 the line is expected to generate 20,000 passenger trips ▪ 1 dam 2.3 km long and 4,000,000 on the network every day. m3 in volume. Completion Progress 42.3% Project Value: A$1,156M 8 1H 2018 Presentation 25 July 2018
Refocusing our US activities: transforming Lane ▪ Lane becoming the North American hub for the Group in the large infrastructure sector • Structure reorganization & efficiencies • Focus on infrastructure rich States: NY, TX, CA, FL • New engineers hired ▪ Disposal of P&P, market update during Summer ▪ Focus on special projects: • Texas bullet train project • $15bn overall investment for a 240 mile High Speed Rail between Dallas and Houston • Feasibility project completed 9 1H 2018 Presentation 25 July 2018
Enhancing value from our asset portfolio | Plants & Paving Beauty contest on course: market update during Summer Selected Plants Asset perimeter Run rate Revenues ca. $700M Financial debt Debt free Current trading multiples of listed companies ▪ US Construction materials: 2018 EV/EBITDA: 9x median Lane’s Plants & Paving ▪ Primary Hot Mixed Asphalt private producer in US with over 6 million tons produced per year ▪ Quality Asset Base Composed of 43 HMA plants, 1 Concrete Beam Plant, 12 Sand and Gravel Pits and 9 Quarries 10 1H 2018 Presentation 25 July 2018
Agenda Financial Update Massimo Ferrari General Manager Finance & Corporate Group CFO 11 1H 2018 Presentation 25 July 2018
1H18 underlying performance: comparable vs. 1H17 Revenues Bridge (€/M) 1 ▪ At constant forex rate and +0.4% 211 constant perimeter 1H18 201 revenues in line with 1H17 (248) (+0,4%) 2,852 2,852 2,815 2,815 2,825 2,624 ▪ Revenues affected by: • Seasonality pattern • New Orders revenue transformation 1H17 P&P forex 1H17 1H18 P&P 1H18 adjusted effect underlying adjusted underlying EBIT (€/M) EBITDA (€/M) 2 3 ▪ 1H17 impacted by one-off items: Margin % Margin % 3.7% 7.7% 7.3% 3.8% • €30M at EBITDA level 245 One-off 30 ▪ 1H18 include: • €5M of non recurring costs 215 207 106 105 1H 2017 1H 2018 1H 2017 1H 2018 Underlying performance consider the result of Plants & Paving business line by line. In addition for comparable purpose, 1H17 revenues, EBITDA and EBIT in currencies other than the euro are restated using the average exchange rate of 1H18. 12 1H 2018 Presentation 25 July 2018
Strong improvement below EBIT line 1H 2017 1H 2018 change [€/million] adjusted adjusted ▪ Significant reduction of financial charges EBIT 137 116 -15% (21) ▪ Strong improvement in net income driven -34% Financial income 36 24 (12) by lower financial costs, minorities, Financial charges (73) -26% 19 (54) positive forex Net financing costs (37) (30) -18% 7 ▪ Neutral impact from exchange rate variation on a long-run basis 1 Profit (loss) on exchange rates (49) 15 -131% 64 ▪ Reduction trend of minorities Net gains on equity investments 2 91% 2 4 Net financing costs, forex & net (84) (11) -87% 73 gains on equity investm. EBT 53 105 97% 52 Profit (loss) on 100% 1 Taxes (20) (41) (21) 1H 2017 1H 2018 exchange rates (€/M) Tax rate % 38% 39% Ethiopia (16.2) 7.9 Venezuela (17.3) 1.3 61% Results from discontinued operations (6) (9) (4) Headquarter (7.8) 7.0 -164% Minorities (16) 10 26 Nigeria 1.9 (0.0) Group Net Result 11 65 484% 54 Other minor (9.5) (1.2) total (48.9) 15.0 13 1H 2018 Presentation 25 July 2018
Significant reduction of financial charges of 26% 1H 2017 1H 2017 change [€/million] adjusted adjusted -40% Bank charges (21) (12) 8 61% Bond Bond charges (20) (24) 22% (4) 84% Bank M/L -30% Leasing (3) (2) 1 Other (24) -50% (12) 12 39% sub total (67) (51) -25% 17 16% Refinancing amortized cost (4) (1) -74% 1H17 1H18 3 Bond charges capitalization (2) 20% (2) (0) (6) (3) -41% 2 sub total financial charges (73) (54) -26% 19 73% Fixed 89% Variable ▪ Decreasing financial expenses: lower bank charges also related to the refinancing carried out in October 17. ▪ Further decrease of financial charges expected after repayment of 27% the €283M bond expiring in august 2018 (already covered by 11% refinancing agreement) 1H17 1H18 14 1H 2018 Presentation 25 July 2018
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