Maire Tecnimont announces its 9M 2022 Consolidated Financial Results

Strong growth in the economic and financial KPIs
Revenues: €2,516.9 million (+22.6%)
EBITDA: €151.5 million (+22.0%); 6.0% margin
Net Income: €61.4 million (+7.2%)
Adjusted Net Cash of €65.3 million, up €56.4 million, thanks to a €216.3 million operating cashflow generation
Significant growth of the Green Energy business: the backlog increases more than 4 times to €1.2 billion
Total Backlog of €8 billion (which no longer includes the Russian pro-jects)
Commercial Pipeline of €53.8 billion, of which €7.7 billion related to the Green Energy business
NextChem awarded €194 million grant for “IPCEI Hy2Use” for one of the world’s first waste-to-hydrogen plants
Annual Guidance confirmed

Milan, 27 October 2022 - Maire Tecnimont S.p.A.’s Board of Directors has reviewed and approved today the 9-Month Interim Financial Report as of 30 September 2022, which shows a Consolidated Net Income of €61.4 million.

The changes reported refer to 9M 2022 versus 9M 2021, unless otherwise stated.

Consolidated Financial Results as at 30 September 2022
Maire Tecnimont Group Revenues were €2,516.9 million, up 22.6%. Higher volumes reflect the expected progress of the projects included in the large backlog thanks both to the progression of existing projects towards phases which can generate higher volumes, and to the start of recently acquired projects.

Business Profit was €214.3 million, up 14.2% with a margin of 8.5%.

G&A costs were €56.6 million, down 1.4% as result of the efficiency process of the organization, with a cost ratio of 2.2% vs. 2.8%.

EBITDA was €151.5 million, up 22.0% thanks to higher revenues and lower G&As. Margin is 6.0% in line with the previous period.

Amortization, Depreciation, Write-downs, and Provisions were €37.2 million, up due to the amortization of new assets instrumental to the digitalization process of the Group and due to higher provisions for credits, as a consequence of the Russian-Ukrainian crisis which has impacted on the ratings of some customers.

EBIT was €114.3 million, up 22.2%, with a margin of 4.5%.

Net Financial Charges were €26.4 million, vs. €11.6 million. The None-Month figure was impacted from the negative net valuation of derivative contracts of €9.1 million vs. a positive valuation of €7.2 million, with a net negative change of approximately €16.3 million.

Financial charges, net of the aforementioned effects as of 30 September 2022, slightly increased as a result of interest owed on a higher gross debt, partially compensated by a higher level of deposits.

Pre-tax Income was €87.9 million, and the tax provision was €26.4 million.

The effective tax rate was approximately 30.1%, in line, mainly due to the various jurisdictions where Group operations have been carried out.

Consolidated Net Income was €61.4 million, up 7.2%, as explained above. Group Net Income was €61.0 million, up 0.9%.

Adjusted Net Cash (net of the above-mentioned values included in the footnote on page 2) was €65.3 million as of 30 September 2022, up €56.4 million vs. 31 December 2021, thanks to a cash generation of €213.6 million, and taking into account a dividend payment of €60.1 million for FY2021, and the negative impact of the mark-to-market valuation of the FX derivative contracts for €132.8 million. The latter change is the result of the evolution in exchange rates, mainly of the US Dollar against the Euro during the First Nine Months of 2022 due to the Russian-Ukrainian crisis. The negative mark-to-market will be offset by future increased operating cash inflows for the same amount.

Consolidated Shareholders’ Equity was €473.4 million, down €53.9 million vs. 31 December 2021. Notwithstanding €61.4 million Net Income, and a positive variation of the Translation Reserve of the Group’s foreign Financial Statements for €43.0 million, this item was negatively affected by the changes in the Cash Flow Hedge Reserve for €103.3 million, and by the dividend payment of €60.1 million for FY2021.

Performance by Business Unit
Hydrocarbons BU
Revenues were €2,314.8 million, up 16.1%, due to the same reasons commented above. Business Profit was €194.3 million, with a margin of 8.4%. EBITDA was €140.5 million with a margin of 6.1%.

Green Energy BU
Revenues were €202.0 million, up 240.6%, also thanks to a constant growth in NextChem’s activities driven by several partnership agreements signed with various Italian and international counterparties, and to the inclusion of recent projects and initiatives that are characterized by a green component, but which were not previously included in this BU.

Business Profit was €20.0 million, with a margin of 9.9%. EBITDA was €11.0 million with a margin of 5.4% vs. €1.9 million. Such an improvement is due to higher revenues and to a different production mix.

Order Intake and Backlog
Thanks to €1,616.8 million of new orders generated in the First Nine Months of 2022, the Group’s Backlog on June 30, 2022 (net of the Russian Projects, as indicated in the footnote on page 3), was €8,004.2 million.

In particular, the main projects awarded to the Group in the first half include the following:
•   An EPC contract with Covestro, for a new aniline plant in Antwerp, Belgium, worth approx-imately €250 million;
•   An EPCM contract for the realization of a Blue Ammonia plant in the United States for ap-proximately USD230 million;
•   An EPC contract for a low-carbon synloop ammonia plant in the Middle East;
•   An EPC contract for a Green Hydrogen Plant in India;
•   New awards and change orders for a total amount of approximately €450 million for licens-ing, engineering and procurement services as well as engineering, procurement and con-struction activities in Europe, North Africa, the Middle East, Asia and North America.

Subsequent events after 30 September 2022
• On October 24, NextChem received a €194 million grant for one of the world's first waste-to-hydrogen plants under the European project "IPCEI Hy2Use" to build the Hydrogen Valley in Rome. It has started the engineering phase of the project and awarded LanzaTech an engineering contract to provide the process design for the circular ethanol unit. NextChem is the project developer for the Hydrogen Valley and has started talks with leading financial and industrial players to determine a participatory structure for the project, where it is considering maintaining a minority stake.

• On October 27, 2022, Maire Tecnimont announced an EPC award by Sonatrach for the realization of an LPG plant in Algeria worth USD380 million.

Outlook
The general market context is still significantly impacted by the consequences of international geopolitical tensions, and, as such, it continues to remain critical and uncertain in relation to the overall raw materials price increases and their availability, transport logistics, and procurement.

In a scenario of increases in the price of natural resources, driven by a strong recovery of the energy demand, the willingness to invest in infrastructures for the transformation of natural resources has remained unchanged, thanks to a strong global demand for several commodities. This is also due to the lack of production originating in the countries impacted by the current conflict, which has particularly affected the Western economies.

The drive to reduce the carbon footprint leads the Group to strengthen the integration between the traditional downstream technologies and a wide range of newly green tech solutions, both proprietary and otherwise available to the Group. NextChem continues to pursue the industrialization of new technologies in the areas of circular economy, bioplastics/biofuels, CO2 capture, hydrogen, and green fertilizers.

The technological investments which will allow our Group to remain at the forefront of the energy transition, in addition to an effective commercial strategy, have led to the first contracts in the Green Energy BU with domestic and international clients. A growing commercial pipeline is expected to deliver additional projects in the months ahead, also taking into account the awards of feasibility studies which are expected to evolve into more significant initiatives thanks to the financial backing of European Union and/or national funds for innovation and the energy transition.

Taking into account what was stated above, and assuming that the international context does not worsen, the expectation of a strong growth in volumes this year is confirmed, leading to a confirmation of the guidance communicated to the market throughout the course of 2022.

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Update on the Group’s Exposure in the Russian Federation
The evolution of the European sanctions’ framework, which has continued from the beginning of the Russia-Ukraine crisis until the present, has led to the suspension of all operating activities in the Country at the end of the First Half.

The restart of the activities in the Third Quarter, including those projects previously suspended, has been impossible, also due to the additional sanctions enforced against the Russian Federation. As a consequence, the remaining value of the Russian projects in the backlog has been removed.

These projects’ financial position continues to be in equilibrium, and no substantial changes to this situation are expected to occur as a consequence of the final contracts’ interruption.

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Update on the Euro Commercial Paper Programme

With reference to the Euro Commercial Paper Programme for the issuance of one or more non-convertible notes launched by the Company and announced to the market on 16 December 2021, as of 30 September 2022, the program has been utilized for an amount of €13.1 million: €10.6 million expiring in October 2022 and €2.5 million in December 2022. The weighted average interest rate is approximately 0.977%; in the third quarter 2022 the total emission of notes was €15.1 million, and €52.1 million in notes were repaid.
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Webcast Conference Call
The 9M 2022 Financial Results will be presented today at 5:30pm CEST during an audio-webcast conference call held by the Top Management.

The conference call may be followed as a webcast by connecting to the website (www.mairetecnimont.com) and clicking on the “9M2022 Financial Results” banner on the Home Page or through the following url:
https://87399.choruscall.eu/links/mairetecnimont221027.html

Alternatively, you may participate in the conference call by calling one of the following numbers:
Italy: +39 02 3621-3011
UK: +44 121 281-8003
USA: +1 718 705-8794

The presentation given by the top management will be available at the start of the conference call in the “Investors/Results and Presentations/Financial Results” section of Maire Tecnimont’s website (https://www.mairetecnimont.com/en/investors/results-and presentations/financial-results). The presentation shall also be made available on the “1info” storage mechanism (www.1info.it).

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Fabio Fritelli as Executive for Financial Reporting declares - in accordance with paragraph 2, Article 154-bis of Legislative Decree No. 58/1998 (“Consolidated Finance Act”) - that the accounting information included in this press release corresponds to the underlying accounting records.
The 9-Month Interim Financial Report as of 30 September 2022 will be available to the public at the registered office in Rome, at the operative office in Milan, on the Company’s website www.mairetecnimont.com in the “Investors/Results and Presentations/Financial Results” section, and on the authorized storage device “1info” (www.1info.it), according to the timing allowed by law.

This press release, and the “Outlook” section in particular, include forecasts. The declarations are based on current estimates and projections of the Group concerning future events and, by their nature, are subject to risk and uncertainty. Actual results may differ significantly than the estimates made in such declarations due to a wide range of factors, including the continued volatility and further decline of the capital and finance markets, raw material price changes, altered economic conditions and growth trends and other changes in business conditions, in addition to other factors, the majority of which outside the control of the Group.

The Consolidated Income Statement, Balance Sheet and Cash Flow Statement are presented below.