Servizi Italia : The BoD approves the financial results as at 30 September 2017

SERVIZI ITALIA: the BoD approves the financial results as at 30 September 2017

• Revenues equal to 187 million (Euro 175.5 million as at 30 September 2016) whose 14.3% totaled abroad (11.2% as at 30 September 2016)
• EBITDA equal to Euro 52 million (Euro 48 million as at 30 September 2016) EBITDA adjusted equal to Euro 53.2 million
• EBIT equal to Euro 12 million (Euro 11.6 million as at 30 September 2016) EBIT adjusted equal to Euro 13.2 million
• Net profit equal to Euro 10.4 million (Euro 8.5 million as at 30 September 2016)
• Net Financial Position equal to Euro 81.2 million (Euro 79.6 million as at 31 December 2016)

Castellina di Soragna, 14 November 2017

The Board of Directors of Servizi Italia, a company listed in the STAR segment of the Italian Stock Exchange and leader in Italy for integrated services of rental, laundry and sterilization of textile and surgical instruments for hospitals, today approved the Interim Management Report as at 30 September 2017.

"The third quarter of 2017 has positively ended, - commented Enea Righi, Vice Chairman and CEO of Servizi Italia - registering results in line with the economic and financial estimates. The projects carried out in the last nine months, with activities aimed at costs optimization and continuous research for efficiency, despite generating one-off costs, allowed us to achieve our management and organizational targets. We also reached an interesting market cap and I am therefore satisfied for how the financial market is evaluating and rewarding us, acknowledging the value generated for the company, the stakeholders and the areas in which Servizi Italia operates."

Consolidated results as at 30 september 2017

Revenues are equal to Euro 187 million, registering an increase by 6.5% compared to the Interim Report as at 30 September 2016 (Euro 175.5 million).

The increase in turnover primarily concerned the wash-hire line, due to the consolidation of Ankateks Turizm İnşaat Tekstil Temizleme Sanayi ve Ticaret Ltd Şirketi and the acquisition, in July 2016, of Tintoria Lombarda Divisione Sanitaria S.r.l. An increase in turnover was also recorded in the surgical instrument sterilisation line, compared to the same period in the previous year, also partially due to the consolidation of Steritek S.p.A. On a like-for-like consolidation basis, the increase in turnover would have been roughly 1.3%.

In particular, it is registered increase of revenues coming from abroad, equal to the 14.3% of he Group total revenues (11.2% as at 30 September 2016), mainly coming from the Brazilian subsidiaries.

With reference to the three business lines, it is worth to underline what follows:

• Revenues coming from wash-hire increase from Euro 132.5 million as at 30 September 2016 to Euro 143 million as at 30 September 2017, registering an increase of 7.9% and representing the 76.4% of turnover;

• Revenues coming from linen sterilization service amount to Euro 13.8 million, with an incidence of 7.4% of the total turnover;

• Revenues coming from surgical instruments sterilization increase by 4.8% compared to the same period of 2016. The line was impacted not only by the gradual increase in turnover from customers such as Azienda Ospedaliera Careggi (Florence), ASST of Valle Olona for the hospital of Busto Arsizio, Azienda Ospedaliera Universitaria Policlinico Messina "G. Martino", but also by the positive impact of the consolidation of Steritek

S.p.A. for Euro 191 thousand. On a like-for-like basis, the growth in turnover would be 4.1%.

Consolidated EBITDA is equal to Euro 52 million (Euro 48 million as at 30 September 2016). On a like-for-like basis, the increase in EBITDA would be around 3.2% in absolute value. EBITDA was positively impacted by the increase in sales revenues in both the wash-hire line and the surgical instrument sterilisation line, with a greater reduction in operating costs in relative terms such as utilities, rentals, administrative costs and the use of third-party personnel, while it was negatively impacted by a increase in personnel expense, in particular in the Brazilian area and by one-off costs relating to expenses for restructuring and industrial reorganisation of the Italian North-West area and a settlement with an executive. Net of one- off components, EBITDA adjusted1, amounting to Euro 53.2 million, rose by 10.9% in absolute terms, and with a relative incidence of 28.5%, increased compared to 27.8%.

The consolidated operating profit (EBIT) is equal to Euro 12 million (Euro 11.6 million as at 30 September 2016), after having allocated depreciation and amortization for Euro 40 million,

1 EBITDA adjusted does not take account of non-recurring costs relating to the restructuring and industrial reorganisation of the North-West area for Euro 557 thousand, of one-off costs relating to the settlement with an executive for Euro 270 thousand and the payment of registration tax and accessory charges for Euro 361 thousand.

up 0.6% compared to the relative incidence in the same period of the previous year, determined by the increase in depreciation of linen due to initial acquisitions of new jobs, amortisation of the customer portfolio which emerged from the acquisition of the company Tintoria Lombarda Divisione Sanitaria S.r.l. and the write-down of trade receivables of some private customers.

Net profit is equal to Euro 10.4 million (Euro 8.5 million as at 30 September 2016).

Net Financial Position is equal to Euro 81.2 million compared to Euro 77.4 million as at 30 June 2017. The variation compared to 31 December 2016 (Euro 79.6 million) is the result of careful cash flow management, which made it possible to limit the negative financial impact of the payment of the purchase of 70% of the share capital of Steritek S.p.A. (Euro 2.8 million) and the payment of the deferred price for the initial share of 40%, and the acquisition of an additional 15% stake in Ankateks Turizm İnşaat Tekstil Temizleme Sanayi ve Ticaret Ltd Şirketi for a total of Euro 11.4 million.

Treasury shares

As at 14 November 2017, the Company acquired a total of 10,550 treasury shares on the market regulated and managed by Borsa Italiana, equal to 0.03% of the share capital.

Relevant events subsequent to period end

With regard to the delivery of a Formal Notice of Assessments, dated 30 September 2016, issued by the Italian Inland Revenue - Regional Directorate Office of Emilia Romagna - Major Tax Payers Office, already communicated in the section Information on proceedings in progress of the Half-year Financial Report as at 30 June 2017, on 9 August 2017, Servizi Italia

S.p.A. received, regarding the years 2012 and 2013, orders to file an appearance from the Italian Revenue Agency in order to enter into discussions. Therefore, the Company met with officials from the Italian Revenue Agency to re-propose its evaluations and briefs in support of its work, reaching a settlement with the Tax Authorities, which recognised the positions of Servizi Italia S.p.A. regarding the recognition of components arising from factoring fees and the deductions of negative income components provided by contract and recorded according to the IAS 18 principle, mediating on the matter of active transactions with the subsidiary SRI Empreendimentos e Participações L.t.d.a. On 24 October 2017, Servizi Italia S.p.A., in evaluating the benefits of an agreement with the Italian Revenue Agency at the pre-dispute phase, for the purposes of reaching a settlement, paid the amounts set out in the Italian

Revenue Agency's proposal, in order to avoid the establishment of long dispute proceedings which would have meant it losing the possibility - among other things - of implementing corrective actions in the event of being the losing party. Therefore, the taxes involved in the settlement and the associated accessory charges have already been booked to this report, as well as the recovery of costs for services to SRI Empreendimentos e Participações L.t.d.a., with a net total impact on the consolidated financial statements of around Euro 317 thousand.

Business outlook

The results achieved in the third quarter of 2017 confirm the estimates and income statement and cash flow projections set forth in the plan. For the year 2017, the Group expects results that will take into account the commitment to consolidating investments made in the countries in which it operates, as well as meeting significant operating and organisational efficiency targets which are related, among other things, to meeting customer quality requirements, but also further enhancing the value of social sustainability, considered increasingly more pertinent to all areas of the business.

Deposit of documentation

We herewith inform that, under the terms and in the manner provided by law, we will proceed and make available to the public the Interim Report at 30 September 2017.

Declaration of the Executive Responsible for the preparation of the accounting documents

The Executive Responsible for the preparation of the corporate accounting documents, Ilaria Eugeniani, declares in accordance with Article 154 bis, paragraph 2, of the Consolidated Finance Act, that the accounting information contained in the present press release corresponds to the underlying accounting documents, records and accounting entries.

Alternative performance indicators

The present document uses an "alternative performance indicator" not provided for under IFRS accounting standards, outlined in accordance with CESR recommendation 05-178b published on November 3rd, 2005; The EBITDA was defined by company management as the difference between the value of sales and services and operating costs before amortization, depreciation, write-downs and provisions.

From today this press release is available on the company's website www.si-servizitalia.com and disclosed by eMarket SDIR and 1Info Storage (www.1info.it) systems.

Servizi Italia SpA, a company based in Castellina in Soragna (PR), listed on the STAR segment of the Italian Stock Exchange, is the leading operator in Italy in the field of integrated services for hire, washing and sterilization of textile materials and surgical instruments for hospitals. With a technologically advanced production platform, articulated in laundry facilities, textile sterilization centers, surgical instruments sterilization centers and many wardrobes, the Company, which together with its Italian and foreign subsidiaries constitute the Servizi Italia Group, turns primarily to