Salcef S p A : Mid&Small in Milan - dicembre 2020

A global player in the railway industry

Mid & Small in Milan 2020

Virgilio IR

December 1-3th 2020

Disclaimer

THIS PRESENTATION IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE, OR SUBSCRIBE FOR, SECURITIES

IMPORTANT: Please read the following before continuing. For the purposes of this disclaimer, this presentation (the "Presentation") comprises the attached slides and any materials distributed at, or in connection with, the Presentation. This Presentation and the information, statements and opinions contained herein have been prepared by Salcef Group S.p.A. (the "Company" or "Salcef") for use during meetings with investors and financial analysts and is solely for information purposes and may not be reproduced or redistributed to any other person. The following applies to the Presentation, the oral presentation and any question and answer session that follows the oral presentation.

This Presentation may contain forward-looking statements about the Company, and/or the group headed by Salcef (the "Group"), based on current expectations and opinions developed by the Company, as well as based on current plans, estimates, projections and projects of the Group. Forward looking statements include (but are not limited to) statements identified generally by the use of terminology such as "may", "will", "should", "plan", "expect", "anticipate", "estimate", "believe", "intend", "project", "goal", "aim", "foresee", or "target" or the negative of these words or other variations on these words or comparable terminology. By their nature, forward-looking statements are based upon various assumptions, expectations, projections, provisional data, many of which are based, in turn, upon further assumptions, including, without limitation, examination of historical operating trends and other data available from third parties. Projections, estimates and targets presented herein are based on information available to Salcef as at the date of this Presentation. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of the Company and/or the Group to control or estimate. You are cautioned not to place undue reliance on the forward-looking statements or other information contained in this Presentation. The information contained herein has a merely informative and provisional nature and does not constitute investment, legal, accounting, regulatory, taxation or other advice. This Presentation speaks as of the date hereof and the information contained herein is provided as at the date of this Presentation and, except to the extent required by applicable law, Salcef nor any other person is under any obligation to update and keep current this Presentation, nor the information contained in this Presentation or any other written, electronic or oral information provided in connection with this Presentation. The information contained herein may be subject to updating, completion, revision and amendment and may change materially without notice. Any reference to past performance or trends or activities of Salcef or the Group shall not be taken as a representation or indication that such performance, trends or activities will continue in the future.

The information contained in this Presentation does not purport to be comprehensive nor to include everything which might be material to your purposes and has not been independently verified by any third party. No representation, warranty or undertaking, express or implied, is made by the Company or any of its respective affiliates or any of its of their respective directors, officers, advisers, employees or agents or any other person as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained therein or any other statement made or purported to be made in connection with the Company and its consolidates subsidiaries, for any purpose whatsoever, including but not limited to any investment considerations. Neither the Company nor any of its respective affiliates, directors, officers, advisers, agents or employees, nor any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of these materials or its contents or otherwise arising in connection with this Presentation. Neither this Presentation nor any part or copy of it may be taken or transmitted into the United States or distributed, directly or indirectly, in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. The information contained in this Presentation is not for publication or distribution, directly or indirectly, in Australia, Canada or Japan. Neither this Presentation nor its delivery to any recipient will or is intended to constitute or contain or form part of any offer to sell or solicitation of any offer to purchase, or subscribe for, any securities or related financial instruments, nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement or recommendation to enter into any contract or commitment or investment decision whatsoever. By attending the meeting where this Presentation is made, by reading the presentation slides or by accessing and/or accepting delivery of this Presentation, you agree to be bound by the foregoing limitations and restrictions. The Presentation cannot be reproduced in any form, further distributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose. Any failure to comply with these restrictions may constitute a violation of applicable laws.

Table of Content

01

Salcef Group Overview

04

Commercial Development

02

Operative Business Units

05

Railway Industrial Market

03

Q3 2020 Financial Results

06

Listing Process and Securities

01

Salcef Group Overview

HOLDING

COMPANIES

BRANCHES

• • Listed AIM Market from 08.11.2019

• • 71, 9% controlled by Finhold S.r.l. - 28,1% Floating and Promoters

• • B of D : 7 members, of which 1 indipendent

• • Audit: KPMG

• • Head Count: 1.205 of which 85 External StaffCoordination and control

SALCEF S.p.A.

100%

100%

EURO FERROVIARIA S.r.l.

96,06%

Consorzio Stabile Itaca

S.c.a.r.l.

100%

COGET IMPIANTI S.p.A.

100%

ROMANIA SWITZERLAND

• ✓ 14 Operative Companies

• ✓ 9 Operative foreign Branches

• ✓ 6 Operative Business Units

ROMANIA

POLAND SAUDI ARABIA

Strategic Business

Unit

Railway Industry

Operative Business

Units

Track & Light Civil Works

Energy, Signalling & Telecommunication

Heavy Civil

WorksRailway MaterialsRailway MachinesEngineering

Revenues Q3 2020

(% Group)

71,2%

12,2%

6,6%

8,6%

1,4%

0%*

* 100% Intercompany

• • Italy

  Operative Geographic

  Area

• • Western Europe

• • Eastern Europe

• • Middle East

• • North Africa

• • North America

• • Italy

• • Western Europe

• • Italy

• • Western Europe

• • Italy

• • Italy

• • Western Europe

• • Eastern Europe

• • Middle East

• • North America

• • Italy

• • Middle East

02

Operative Business Units

Track Maintenance

Extraordinary MaintenanceOrdinary Maintenance

Track ConstructionLight Civil Works

Revenues Q3 2020 (€M)

** On the consolidated revenues

167,5

71,2% **

Nat

Int

24,6 14,7%

Strenghts

• • High barriers to entry

• • Huge equipment investments

  (Salcef fleet substitution value over than €400M)

• • Manpower specialization

• • Clients' PQ and certifications

• • Highly demanding working conditions

• • Around 700 employees involved

Energy, Signalling & Telecommunication

Activities

Strenghts

• • Railway catenary, signalling, substations,

  • • High barriers to entrytelecommunication construction, ordinary •

  & extraordinary maintenance (renewal activities)

• • Construction and maintenance of infrastructure for high and medium voltage electricity transmission (aerial and underground)

Clients' PQ and certifications

• • Highly demanding working conditions

• • Huge Italian and European investment plan (Terna 2019-2023 plan with € 6,2 Bn investments + 20%)

Revenues Q3 2020 (€M)

** On the consolidated revenues

28,8

12,2%**

Railway Materials

Activities

Strenghts

• • Manufacturing of prestressed concrete •

  railway sleepers

• • Manufacturing of slab-track systems for unballasted tracks (metro, tramway and railway)

• • Manufacturing of concrete segments for tunnels (metro lines)

Clients' PQ and certifications

• • Vertical Integration with trackworks BU

• • Extensive development possibilities for unballasted solutions

• • Development of new solution and patents

Revenues Q3 2020 (€M)

** On the consolidated revenues

20,1

8,6%**

Railway Machines

Activities

Strenghts

• • Design of new railway equipment and construction technologies

• • Maintenance and revamping of railway equipment

• • Construction of new railway wagons and equipment

• • Renting of equipment and tool

• • Clients' PQ and certifications

• • Vertical integration with trackworks and energy BUs

• • Market with high margin and few competitors

• • Development of new solutions and patents

Revenues Q3 2020 (€M)

** On the consolidated revenues

3,3

1,4%**

Heavy Civil Works

Activities

Strenghts

• • Multidisciplinary railway construction projects (civil and technological works)

• • Doubling of existing railway line

• • Construction of railway stations and buildings

• • Bridges, viaducts and tunnels

• • Environmental mitigation works

• • Vertical integration with other Salcef Group BUs

• • Salcef Group competitiveness, and all the qualifications for general and specialized works

Revenues Q3 2020 (€M)

Most of the Revenues are referred to small projects in Germany for the renewal of railway bridges

Engineering

Activities

Strenghts

• • Design of new railway equipment and construction technologies

• • Maintenance and revamping of railway equipment

• • Construction of new railway wagons and equipment

• • Renting of equipment and tool

• • Clients' PQ and certifications

• • Vertical integration with trackworks and energy BUs

• • Market with high margin and few competitors

• • Development of new solutions and patents

Revenues Q3 2020 (€M)

** On the consolidated revenues - 100% Intercompany

0,9

0%**

Salcef Group Q3 2020

Production Analysis

O€xp1.e00r0ative B.U. Revenues

Q3 2020

%Q3 2019

Inc. %

Track and Light Civil Works

167.517,9

71,2%

164.661,3

74,9%

Energy, Signalling & Telecommunication Heavy Civil Works

28.751,8

12,2%

24.460,7

11,1%

15.610,5

6,6%

5.046,6

2,3%

Railway Machines Railway Materials Total

3.268,0

1,4%

5.104,8

2,3%

20.136,6 235.284,8

8,6% 100%

20.671,8 219.945,2

9,4% 100%

• • Despite Covid19 emergency no relevant impact on the production value on main operative business units:

  • o Track and Light Civil Works: +€2,9M (+1,7%)

  • o Energy, Signalling and Telecommunication: +€4,3M (+17,5%)

  • o Railway Materials: -€0,5M (-2,5%)

• • Heavy Civil Works: +€10,6M (>100%) due to the contribution of Salcef Bau GmbH on the Business Unit value.

• • Railway Machines: -€1,8M (-36,0%) mainly due to an increasing of sales during Q3 2019, expected in Q4 for 2020

Comparing last year results:

• • Low decresasing of «National» production -€1,4M (-1,21%)

• • Eastern Europe: -€8,7M (-68,7%) decrease in production value due to the Group strategy of decreasing business in this area.

• • Western Europe: +€24,5M (>100%) due to the contribution of

  • o Salcef Bau GmbH

  • o Austrian JV of Coget Impianti S.p.A.

  • o Increase of Norwegian production

• • North Africa: decrease in production value due to the final stage of Egyptian Project

• • North America: + €1,6M (+100%) related to the post-acquisition production (starting 15/09/2020) by Delta Railroad Construction 15

03

Q3 2020 Financial Results

Salcef Group Q3 2020

Financial Results

€M

RevenuesEBITDAEBITDA Margin (%)EBITEBIT Margin (%)Net ProfitNet Profit Margin (%)

Delta

Contribution after acquisition

Q3_2019 YTD

IFRS

Δ (€)

IFRS

Δ (%)

IFRS

IFRS Q3 2020 vs IFRS Q3 2019

Revenues: compared to LY19 increase is equal to €15,3M (+7,0%) in line with the past 1H financial results

1,63

0,7%

EBITDA: compared to LY19 increase is equal to €8,5M (+17,6%) due to:

0,46

0,8%

• • Increasing of revenues, decreasing of material and service costs related to the internalization of works and major use of manpower on sites

EBIT: compared to LY19 increase is equal to €3,9M (+10,4%)

0,37

0,9%

Adj NFP:

• • Compared to FY19 decrease is equal to €33,6M (-71,5%), mainly due to:

  • o €3,6M for buyback transaction

    0,24

    0,9%

  • o €16,9M for dividend distribution [20/05/2020]

  • o €31,6M for acquisition of Delta Railroad Construction [15/09/2020]

€M

Q3_2020 YTD

IFRSNFP

2,26

PN

2,70

*Adj: did not consider negative impact caused by Warrant Fair Value

FY_19 YTD

IFRS

16,9%

1,1%

* Adj

250,0

Δ (€)

IFRS

Δ (%)

IFRS

Salcef Group Q3 2020

Financial Results - Proforma Comparing

Salcef Group**

€M

RevenuesEBITDAEBITDA Margin (%)EBITEBIT Margin (%)Net ProfitNet Profit Margin (%)Q3_2020 YTD Salcef Group

€M

Q3_2020 YTD Salcef Group

NFPPN

Delta ProForma Q3-2020**Salcef Group ProForma Q3 2020

Q3_2020 YTD

Total

270,1

16%

65,3

16%

--

47,5

17%

17,6%

1%

33,3

22%

12,3%

6%

3Q_2020 YTD

Total

13,4

20%

275,4

8%

* Salcef Group not considering post-acquisition Delta impact - **Adj: did not consider negative impact caused by Warrant Fair Value

Salcef Group [net Delta] + 9 months pro forma Delta [IFRS]

• • +16% of Revenues, for a total amount of €270M

•

Total EBITDA of €64,9M in line with the Group results (24%), with a contribution of €8,7M

•

Increasing of EBIT Margin +1%

•

+22% of Net Profit amount - +6% of Net Profit Margin

Adj NFP:

•

Increasing of Adj NFP (+20%), related to a positive contribution equal to €2,26M

**

Exchange rates

Balance sheet results: Spot at 30/09/2020 - Eur/Usd 1.1708

Profit&Loss: Avg at 30/09/2020 - Eur Usd 1.125

Salcef Group Mar - Apr 2020 Covid Impact

• • Q3 2020: total Covid19 impact on Salcef Group production is - 7,2% on the scheduled production

• • At Q3 2020 there was no financial impact due to Covid19 Emergency

• • During March 2020 there were first signs of a production slowdown

  • o March 2020 Actual vs Budget: -€10,3M

  • o Italian Production: Covid Impact on trackworks and energy operative business units due to the initial problems linked to the displacement of manpower in Italy

  • o Foreign Production: no relevant impacts on the production

• • April 2020 Act vs Bdg -€7,8M, lower than previous month.

• • Trackwork BU : more than 100% of site convertions. Taking advantage of reduced railway line use due to COVID19, 14 new sites not in the budget were opened (e.g: extraordinary maintenance on the Rome-Naples high speed line), despite 7 blocked sites

• • Energy Signalling & Telecommunication BU: Most of the relevant sites are located in Northern Italy. In particular COGET Impianti S.p.A., specialized in the Energy B.U., is located in the initial Red Zone

• • No particular effects on the other operative business units

• • In May and June 2020 the production has fully resumed, confirmed by an increase in full production Q3 2020 (€235,3M) compared Q3 2019 (€219,9M)

Salcef Group Q3 2020

Net Financial Position

Financial Results

€M

*NFP IFRS (Q3 2020 - FY 2019) did not consider negative impact caused by Warrant Fair Value

Specific of financial debt:

• • Duration: approx. 36 months

• • Average of replacement: rolling

• • Structure: Corporate

• • Coverage: the whole Italian banking system

• • Cash/Cash Equivalent: €168,7M**

• • Net Cash/Cash Equivalent; €116M

• • NFP Q3 2020 Ita GAAP: €26,6M before (IFRS)

• • NFP Q3 2020: €13,4m total effect due to:

  • • Impact Lease Accounting Ex IFRS 16

  • • Impact FVTPL Financial Assets Ex IFRS 9

** Before (i) €3,6M for buyback transaction - (ii) €16,9M for dividend distribution [20/05/2020] - (iii) €31,6M for acquisition of Delta Railroad Construction 20

Salcef Group Q3 2020

Backlog

€x1.000

Business Unit

Amount

%

Track and Light Civil Works

Track and Light Civil Works - Foreign

Energy

358.516,5 69.506,1 145.228,4

60,4% 11,7% 24,5%

Railway Materials

Heavy Civil Works

Railway Machines

7.442,9 8.414,3 4.573,4

1,3% 1,4% 0,8%

Total

593.681,5

100,0%

• • Backlog Value: €594M of which €456M (77%) from Italian market and €137M (23%) from the foreign market confirming the increase trend.

• • Revenues Coverage: Salcef Group order backlog stands at €594M as at the end of Q3 2020, offering 24 month visibility (2,04 x Revenues)

• • Book to Bill Ratio: the ratio (0,97), in line with 1H 2020 growing.

04

Commercial Development

Salcef Group Highlights Strong International Focus

• • March 12th 2020: Salcef USA Inc. was established. This new Salcef Group company to develop production and infrastructure for the US and Canadian markets, the largest in the world, with around 200.000 km.

• • Sweden and Denmark are target markets for the Salcef Group in order to strengthen its position in the Scandinavian peninsula area

• • Australia: The railway market in Australia is growing in freight, passenger and urban transport system, with huge public and private investment.

MARKET COMMERCIAL INTEREST ACTIVE MARKETS

Strategic Highlights

9th acquisition in 20 years [o.w. 5 in last 5 years]

ESG

Salcef has always followed an industrial development model that embraces sustainable development: in every activity we adopt practices based on corporate social accountability, to create value for clients, for society and for the community, while respecting the environment.

2021 - 2022 Goal: Corporate Social Responsability Report

Enviroment

E

From 2017 to 2019

-48%

Reduction in waste

-45%

Reduction in fuel consumption for cars

-5%

Reduction in overall diesel consumption

-65%

Reduction in energy consumption

Safety

S

From 2018 to 2019

12% Increased training hours per worker

Reduction in average length of accidentsAverage reduction in accident severity

Average reduction in accidents

-18% -44% -35%

12

Governance

Governance factors:

• • Fairer management pay, increased controls

• • Compliance Respect for laws and ethics

• • Implementation of corporate liability and anti-corruption regulations with the Board of Directors independence criteria

• • Attention to the regulation of the market in which the Salcef Group works

05

Railway Industrial Market

Railway Industry Market

Italian Market - Ferrovie dello Stato

Investment Plan 2019 -2023 for € 58 BillionFS S.p.A.

RFI S.p.A. (100% controlled by FS) Investment Plan 2019 -2023 for € 25 Billion

FS S.p.A. Investment Plan 2019-2023 for € 58 Billion foresees investments for € 13Bn per year, about 75% respect to 2018 (€ 7,5 Bn)

RFI Investment Plan 2019-2023 (part of the FS Plan), foresees investments of over € 25Bn, of which €14.5Bn in maintenance, safety and upgrades.

Railway Industry Market

Global and European Market

World Railway Market

Source: 6th report monitoring developments in the railway market under Article 15, Paragraph 4 of Directive 2012/34/EU of the European Parliament and Council

Source: World Rail Market Study 2018-2023

European Railway Market

Europe: more than € 45Bn invested annually, more than 50% for maintenance and renovation.

Germany: the value of the Deutsche Bahn 10-year Business Plan is € 86 Bn with an increase of 54%. Compared to the last BP is "the biggest railway modernization program"

Norway: NOK 120 Bn the value of the Bane Nor Business Plan 2018-2023 is approx. € 12 Billion. The BP covers new projects, renewal and investments.

06

Listing Process and Securities

Listing Information

Listing Highlights

Buyback

• ➢ Total shares at 01.12.2020: 43.524.063 o.w.

  • o 41.764.063 ordinary shares

  • o 1.500.000 performance shares

  • o 260.000 special shares

• ➢ Warrants at 01.12.2020: 15.164.561 o.w.

  • o W1 7.856.826

  • o W2 7.307.735

• ➢ Floating and promoters at 01.12.2020: 28,1%

• ➢ Controlling Shareholder: Finhold S.r.l.

  • o 71,9 % CS

  • o 72,4% voting rights

• ➢ Buyback planning: started on 28.05.2020

• ➢ Duration: max 18 months

• ➢ Max purchasable shares: 10% of total

• ➢ No. treasury shares at 13.10.2020: 300.000

• ➢ Totally cash out: €3,6M

• ➢ % Treasury shares on total at 01.12.2020: 0,69%

No. treasury shares

MONTHLY BUYBACK

84.140
8.632	25.221
MAY-20	JUN-20	JUL-20	AUG-20

Stock Data

• ➢ Market: AIM Italia of Borsa Italiana S.p.A.

• ➢ Ticker on Borsa Italiana: SCF

• ➢ Listing Price at 08.11.2019: €9,60

• ➢ Last Price at 30.11.2020: €12,00

• ➢ Market Cap at 30.11.20: €501M

• ➢ Max 12 months: €12,50 (September)

• ➢ Min 12 months: €8,66 (March)

Sep-20

Nov-19

Dec-19

Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Aug-20

Oct-20

Nov-20

Source: Thomson Reuters

SCFG.MIFTITAIMFTMIBFTSTAR

Coverages: Banca Akros, Intermonte, Mediobanca → Average Target Price (ATP) at 31.10.2020: €13,6

Current Data: 31/10/2020

Listing Process and Securities Listed Securities

Salcef Group - Listed Securities

ISIN IT0005388266 ISIN IT0005388183 ISIN IT0005388191

Share	SCF	41.764.063
Warrant 2024	WSCF	7.856.826
Warrant 2023	WSCF23	7.307.735

Warrant 2024 (WSCF): Warrants give right to buy shares at price of € 0,10 each

Conversion Ratio: is variable and based on monthly share price with strike price at € 9,30 and Cap at € 13,00

Maximum converted Ordinary Shares: No. 2.253.338 (at Max Conversion Ratio 0,2868x), with capital increase of € 225.333,77

Warrants expiry on 8th November 2024 (or before, in case of "Accelerated Condition", if the Official Price of the Share reaches € 13,00 for at least 15 days out of 30 consecutive days).

Warrant 2023 (WSCF23): Warrants give right to buy shares at price of € 10,50 each Conversion Ratio: is fix at 1,0x, strike price at € 10,50

Maximum converted Ordinary Shares: No. 7.307.735 (Conversion Ratio 1x), with capital increase of € 76,7M

Warrants expiry on 30th April 2023 (or before, in case of "Accelerated Condition", if the Official Price of the Share reaches € 13,00 for at least 15 days out of 30 consecutive days).

Listing Process and Securities Not Listed Securities

Salcef Group - Not Listed Securities

Special Shares Performance Shares

ISIN IT0005388274 ISIN IT0005388282

260.000 1.500.000

Special Shares: Owned by ISI3 Promoters - Conversion Ratio: in Ordinary Shares 7x

• 1. Conversion: 100.000 Special Shares to be converted in 700.000 Ordinary Shares (No Lock-Up), at Price Threshold of € 13,50, within 60 Months from BC

• 2. Conversion: 160.000 Special Shares to be converted in 1.120.000 Ordinary Shares (No Lock-Up), at Price Threshold of € 11,50, within 15 January 2025, in proportion with the conversion of No. 5 Million Warrant2023 in Ordinary Shares.

Performance Shares: Owned by Finhold, No. 1.500.000 (portion of the initial Equity Value) - Conversion Ratio: in Ordinary Shares 5x

• 1. Conversion: 416.667 Performance Shares to be converted in 2.083.335 Ordinary Shares, at Price Threshold of € 13,00, within 60 Months from BC.

• 2. Conversion: 416.667 Performance Shares to be converted in 2.083.335 Ordinary Shares, at Price Threshold of € 13,50, within 60 Months from BC.

• 3. Conversion: 666.666 Special Shares to be converted in 3.333.330 Ordinary Shares, within 15 January 2025, in proportion with the conversion of No. 5 Million Warrant2023 in Ordinary Shares.

Contacts

Diego Paniccia

Investor Relator

Tel: [phone]

E-mail:[e-mail]