Societa Iniziative Autostradali e Servi : The Board of Directors of SIAS approves the Interim Financial Report as at 30 June 2019

PRESS RELEASE

The Board of Directors of SIAS approves the Interim Financial Report as at 30 June 2019

• - Total revenue growth: +6.1%

• - Increase in motorway traffic in Italy and Brazil

• - CIPE gives the green light to the financing scheme for the completion of Asti-Cuneo motorway

Key highlights of consolidated economic and financial results:

• • Turnover:

  • € 613 million (€ 577.6 million in the first half of 2018)

• • Net toll revenue:

  • € 540.5 million (523.7 million in the first half 2018)

• • EBITDA:

  • € 347 million (€ 349.9 million in the first half of 2018)

• • "Normalised" EBITDA1:

  • € 354,4 million

• • Net profit:

  • € 124.6 million (€ 127.8 million in the first half of 2018)

• • Operating cash flow:

  • € 275.1 million (268.7 million in the first half 2018)

• • Net financial indebtedness:

• € 1,213.6 million (EUR 1,239.1 million at 31 December 2018)Key highlights - motorway concessions sector:

• • Italy

  • - Motorway sector revenues: € 556 million

  • - Motorway sector EBITDA: €342 million

  • - Traffic performance: +3.74%2 ("light vehicles" +2.98%, "heavy vehicles" +5.78%)

• • Brazil3

• - Motorway sector revenues: 1,392 million reais

• - Proforma EBITDA: 923 million reais (+2.6%)

• - Traffic performance: +8.9%4 ("light vehicles" +7.4%, "heavy vehicles" +10.6%)Tortona, 2 August 2019. The SIAS Board of Directors, which met today under the chairmanship of Paolo Pierantoni, reviewed and approved the "Interim Financial Report at 30 June 2019".

• 1 "Normalised" EBITDA - amounting to EUR 7.4 million - takes into account the effects of the advancement to the first half of the maintenance work programme planned for the full year of 2019.

• 2 +0.68% on a like-for-like basis (+1.57% heavy vehicles, +0,37% light vehicles), net of traffic for the period from March to June 2018 related to the Piacenza-Cremona-Brescia stretch, of which the concession managed by the subsidiary Autovia Padana became effective on 1 March 2018.

• 3 The group operates on the Brazilian market through its jointly-held subsidiary Ecorodovias Infraestrutura e Logistica S.A..

• 4 -0.2% on a like-for-like basis - with the exception of (i) the traffic of the licensees Eco135 and Eco050 (MGO), subject to tolls since 1 April and 1 June 2019 respectively, and (ii) the effects of "suspended axles", including - for the first half of 2018 - the effects of the truck drivers' strikes that affected the period between 21 May and 3 June 2018.

ANALYSIS OF ECONOMIC AND FINANCIAL HIGHLIGHTS

CONSOLIDATED GROUP ECONOMIC DATA

The overall "turnover" was equal to EUR 613 million (EUR 577.6 million in the first half of 2018), with an overall growth of 6.1% compared to the same period in the previous year.

"Motorway sector revenue" totalled EUR 556.1 million (EUR 539.2 million in the first half of 2018) and breaks down as follows:

• - "Net toll revenues", equal to EUR 540.5 million, an increase of EUR 17 million (+3.2%) due to higher revenues from the licensee Autovia Padana1 (EUR +9.6 million), the growth in traffic volumes (EUR +5 million) and the recognition as at 1 January 2019 of toll adjustments (EUR +2.2 million);

• - "rental income and other accessory revenues" equal to EUR 15.6 million.

"Technology sector revenue" totalled EUR 36.8 million (EUR 21.8 million in the first half of 2018).

"Operating costs", totalling EUR 266 million, show an increase of EUR 38.3 million, attributable for EUR 8 million for higher costs relating to the licensee Autovia Padana S.p.A.1, for EUR 18.4 million for increased costs of the other companies operating in the motorway sector (this change of around EUR 7.4 million is mainly due to the advancement to the first half the maintenance work programme planned for the entire current year) and, for the remaining part, the increase is attributable to the higher production carried out for third parties by the companies operating in the "technology" sector".

With regard to the above, the "Gross operating margin (EBITDA)" amounted to EUR 347 million, showing a decrease of EUR 2.9 million, reflecting the growth of the "Technology sector" (EUR 2.3 million) and the "Services sector" (EUR 1.4 million), which is offset by the decrease in the gross operating margin of the "Motorway sector" (approximately EUR 6.6 million) mainly due to the above advancement, to the first half, of the maintenance work programme planned for the entire year under way. The "Normalised EBITDA" resulting from this advancement has therefore grown by EUR 4.5 million, settling at an amount equal to EUR 354.4 million.

"Net amortisation/depreciation and provisions" is equal to EUR 142.9 million (EUR 141.7 million in the first half of FY 2018); the change is due to: (i) higher amortisation and depreciation for EUR 16.1 million2, (ii) lower net provisions in the "provision for restoration and replacement" of non-compensated revertible assets for EUR 14.9 million and (iii) lower provisions for risks and charges for EUR 0.1 million.

"Financial income" amounted to EUR 7.8 million, with a decrease of EUR 2.1 million as a result of lower dividends distributed by investee companies and higher income resulting from cash investments.

The item "financial expenses" - including the expenses for Interest Rate Swap contracts - decreased by EUR 3.1 million due to the process to streamline financial resources and funding sources. The change in "capitalised financial expenses" is mainly related to the performance of the investments made.

The item "profit (loss) of companies accounted for by the equity method" included the share of results from jointly controlled entities and associated companies. The change in the half, compared to the same period the previous year, is mainly attributable to the lower contribution of certain investee companies operating in the motorway sector (ATIVA S.p.A., SITAF S.p.A., Brazilian licensees).

The amount of "income taxes" of the first half of FY 2019 benefited - for an amount equal to EUR 13.6 million - from the positive outcome of an "ACE" tax clearance application in the FYs 2013-2018.

The share attributed to owners of the parent company of the "profit for the period" - substantially in line with the same period the previous year - amounted to EUR 124.6 million.

1

The concession to Autovia Padana became effective as from 1 March 2018. Consequently, the revenues and costs related to the management of the A21 Piacenza-Cremona-Brescia motorway stretch in 2018 related only to four months (March to June).

2 In determining the amortisation and depreciation of non-compensated revertible assets, the "takeover values" in the PEFs approved by the Granting Body in September 2017 and the agreements signed with the body with reference to the A21 stretch, were also considered.

Summary table of consolidated earnings data

(amounts in thousands of EUR)

Motorway sector revenue - operating activities 1,2

Technology sector revenue

Other revenue 3

Total turnover

Operating costs 1,2,3

Gross operating margin (EBITDA)

Net amortisation/depreciation and provisions

Operating income

Financial income

Financial expenses

Capitalised financial expenses

Profit (loss) of companies accounted for by the equity method

Net financial income (expense)

Profit before tax

Income taxes (current and deferred)

Profit for the period

•

•

1HY 2019	1H 20184	Changes
556,099	539,236	16,863
36,763	21,791	14,972
20,094	16,579	3,515
612,956	577,606	35,350
(265,985)	(227,720)	(38,265)
346,971	349,886	(2,915)
(142,916)	(141,682)	(1,234)
204,055	208,204	(4,149)
7,806	9,877	(2,071)
(44,842)	(47,942)	3,100
7,782	6,385	1,397
1,004	16,599	(15,595)
(28,250)	(15,081)	(13,169)
175,805	193,123	(17,318)
(40,210)	(53,483)	13,273
135,595	139,640	(4,045)
Profit assigned to Non-Controlling Interests	10,960	11,792	(832)
Profit assigned to the Parent Company's Shareholders	124,635	127,848	(3,213)

• (1) Amounts net of the fee/additional fee payable to ANAS (EUR 41.5 million in the first half of 2019 and EUR 39.7 million in the first half of 2018).

• (2) With regard to motorway licensees, the IFRIC 12 sets out full recognition in the income statement of costs and revenues for "construction activity" concerning non-compensated revertible assets. In order to provide a clearer representation in the table above, these components - amounting to EUR 115.7 million in the first half of 2019 and EUR 68 million in the first half of 2018 respectively - were reversed for the same amount from the corresponding revenue/cost items.

• (3) Amounts net of cost/revenue reversals of EUR 2.8 million in the first half of 2019 (EUR 3.3 million in the first half of 2018).

• (4) With reference to the data relating to the first half of 2018, note that the concession granted to the subsidiary Autovia Padana took effect as of 1 March 2018; consequently, its management of the A21

  Piacenza-Cremona-Brescia stretch contributed to the profit/(loss) of the first half of 2018 for four months only.

GROUP CONSOLIDATED FINANCIAL DATA

The "adjusted net financial indebtedness" showed at 30 June 2019 a balance equal to EUR 1,213.6 million. Despite the significant programme for motorway investments made in the period (as provided by the PEFs), the payment of the final of dividends relating to the year 2018 and the effects relating to the accounting of lease contracts pursuant to IFRS 161, the increased operating cash flow led to an improvement in the half year of around EUR 25.5 million of the "adjusted" net financial indebtedness.

The change in the half year to the "net financial indebtedness" (equal to EUR 25.1 million) was due to: (i) the payment of dividends by the Parent Company (EUR 121.7 million), (ii) the payment of dividends by subsidiaries to minority shareholders (EUR 22.9 million), (iii) the execution of enhancement works on the Group's motorway infrastructure (EUR 115.7 million), (iv) investments in other works and the payment of advances with reference to revertible assets (EUR 20.4 million), (v) the acquisition of equity investments, the purchase of minorities and loans (EUR 34 million), (vi) the above-mentioned effect relating to the accounting of the lease contracts pursuant to IFRS 16 (EUR 11.6 million). These outflows were offset by: (i) "operating cash flow" (EUR 275.1 million), (ii) the change in net working capital (EUR 69.7 million) and (iii) other minor changes (EUR 0.5 million).

"Net financial indebtedness" as at 30 June 2019 also includes the positive difference accrued during the half year (EUR 6.3 million) for the fair value of IRS agreements (no cash item).

The item "non-current financial receivables" includes (i) receivables of EUR 120.7 million at the so-called "takeover value" for the A21 Torino-Piacenza stretch, the concession for which expired on 30 June 2017, (ii) EUR 18.5 million relative to "investment funds" subscribed as an investment of liquidity in previous financial years and (iii) EUR 2.3 million that represent - as provided for in IFRIC 12 - the discounted value of the medium/long term portion of cash flows related to the so-called "minimum amount guaranteed by the Granting Body".

The change in the "discounted value of the payable due to ANAS - FCG" is due to the charges for discounting the payable itself.

Financial resources available as at 30 June 2019 totalled EUR 2,191 million.

Summary table of consolidated financial data

(amounts in thousands of EUR)	30/06/2019	31/12/2018 Changes
A) Cash and cash equivalents B) Securities held for trading	899,186	963,044 -(63,858) -
	-
C) Liquidity (A) + (B) D) Financial receivables E) Bank short-term borrowings F) Current portion of medium/long-term borrowings G) Other current financial liabilities	899,186	963,044 (63,858) 481,061 25,125 (19,182) (8,531) (322,442) 47,680 (50,478) (8,777)
	506,186
	(27,713)
	(274,762)
	(59,255)
H) Short-term borrowings (E) + (F) + (G) I) Current net cash (C) + (D) + (H) J) Bank long-term borrowings K) Hedging derivatives L) Bonds issued M) Other long-term payables	(361,730)	(392,102) 30,372 1,052,003 (8,361) (721,015) 38,081 (35,730) 6,255 (1,537,183) (1,123) (1,252) (9,754)
	1,043,642
	(682,934)
	(29,475)
	(1,538,306)
	(11,006)
N) Long-term borrowings (J) + (K) + (L) + (M) O) Net financial indebtedness(*) (I) + (N)	(2,261,721)	(2,295,180) 33,459 (1,243,177) 25,098
	(1,218,079)
P) Non-current financial receivables Q) Discounted value of the payable due to ANAS - FCG	141,470	136,952 (132,830) 4,518 (4,121)
	(136,951)
R) "Adjusted" net financial indebtedness (O) + (P) + (Q)	(1,213,560)	(1,239,055) 25,495

(*) Pursuant to ESMA Recommendation

1 From 1 January 2019, the "IFRS 16 - Leases" international accounting standard has applied; the standard establishes a single model for the recognition and measurement of lease contracts for the lessee, which calls for the leased asset, including operating assets, to be recognised as an asset but with a balancing entry under financial payables. When transitioning to the new standard, the Group choose to apply the "simplified retrospective method", recognising in shareholders equity the cumulative effect of applying the standard as at 1 January 2019 and, therefore, not amending the comparative data relating to the previous period. The application of this standard resulted in the recognition in Adjusted net financial indebtedness as at 1 January 2019 (under "Other current financial liabilities" and "Other long-term payables") of financial debt increased by around EUR 11.6 million.

MOTORWAY CONCESSIONS SECTOR

Motorway traffic performance - Italy

As regards performance in the motorway concessions sector, general traffic performance for the first half of 2019, compared to the corresponding period in 2018, grew by 3.74% (+0.68% on like-for-like basis), as detailed in the following table:

(millions vehicle/km)	1/1-30/6/2019			1/1-30/6/2018			Changes
Light	Heavy	Total	Light	Heavy	Total	Light	Heavy	Total
Total Q1: 1/1 - 31/3	1,527	585	2,112	1,478	572	2,050	3.31%	2.21%	3.00%
April May June	614 567 696	206 224 214	820 791 910	622 612 680	197 225 215	819 837 895	-1.30% -7.37% 2.47%	4.40% -0.60% -0.42%	0.07% -5.55% 1.77%
Total Q2: 1/4 - 30/6	1,877	644	2,521	1,914	637	2,551	-1.91%	1.01%	-1.18%
Subtotal 1/1 - 30/6 on like-for-like basis	3,404	1,229	4,633	3,392	1,209	4,601	0.37%	1.57%	0.68%
Autovia Padana (*)	314	177	491	219	120	339	n/a	n/a	n/a
Total 1/1 - 30/6	3,718	1,406	5,124	3,611	1,329	4,940	2.98%	5.78%	3.74%

(*) The concession granted to the subsidiary Autovia Padana took effect as at 1 March 2018; as a result, the comparative data relating to the first half of 2018 includes the traffic as of 1 March 2018.

As shown by the table above, the traffic figures from the first half of 2019 benefited from the calculation for the entire half year of the traffic data relating to the licensee Autovia Padana, whose concession took effect as of 1 March 2018. The comparison on a like-for-like basis (excluding the data relating to Autovia Padana) nevertheless shows a growth in traffic equal to approximately 0.68% (+1.57% of "heavy vehicles" and +0.37% of "light vehicles"). The drop recorded in the second quarter is attributable to (i) adverse weather conditions during the second half of April and more intensely in May 2019 and (ii) the night-time closure of some motorway stretches due to works.

The traffic performance by single Licensee is shown below:

(millions vehicle/km)	1/1-30/6/2019			1/1-30/6/2018			Changes
Company	Light	Heavy	Total	Light	Heavy	Total	Light	Heavy	Total
SATAP S.p.A. - Stretch A4	849	299	1,148	835	295	1,130	1.75%	1.45%	1.67%
SATAP S.p.A. - Stretch A21	636	343	979	635	337	972	0.15%	1.16%	0.51%
SAV S.p.A.	127	40	167	123	39	162	2.95%	3.01%	2.97%
ADF - Stretch A10	415	156	571	424	154	578	-2.06%	1.16%	-1.20%
ADF - Stretch A6	352	85	437	356	86	442	-1.14%	-0.85%	-1.08%
SALT p.A. - Stretch A12	683	189	872	683	184	867	0.02%	2.47%	0.54%
SALT p.A. - Stretch A15	286	98	384	281	95	376	1.72%	3.63%	2.20%
Autostrada Asti-Cuneo S.p.A.	56	19	75	55	19	74	1.84%	3.43%	2.24%
Subtotal 1/1 - 30/6 on like-for-like basis	3,404	1,229	4,633	3,392	1,209	4,601	0.37%	1.57%	0.68%
Autovia Padana (*)	314	177	491	219	120	339	n/a	n/a	n/a
Total 1/1 - 30/6	3,718	1,406	5,124	3,611	1,329	4,940	2.98%	5.78%	3.74%

(*) The concession granted to the subsidiary Autovia Padana took effect as at 1 March 2018; as a result, the comparative data relating to the first half of 2018 includes the traffic as of 1 March 2018.