MAIRE TECNIMONT ANNOUNCES ITS H1 2014 CONSOLIDATED RESULTS

• EBITDA (+24.6%) and Net Result (+93.9%) growth trend confirmed due to the evolution of the higher-profit projects in the backlog, driven by the Oil, Gas & Petrochemicals BU
• Order intake more than doubled

Milan, 31 July 2014 - Today, Maire Tecnimont S.p.A.’s Board of Directors has examined and approved the 2014 Interim Financial Report.

CONSOLIDATED HIGHLIGHTS

Following the introduction of the IFRS10 and IFRS11 accounting principles, the rules for consolidating Maire Tecnimont Group’s equity shareholdings have been redefined. In particular, IFRS11 requires that investments in a Joint Venture are accounted for using the Net Equity method with effect from January 1, 2014; previously these shareholdings were consolidated using the proportional method. The Group's financial and economic 2014 data are presented according to the new consolidation rules, while data pertaining to previous periods have been restated for comparison purposes.

* The last two columns of the table above give key data for the Maire Tecnimont Group business as at 30 June 2013 - Pro-Forma. In order to standardise the consolidation scope, all figures relating to the Milan-Genoa High Speed “Cociv” and Metro Copenhagen projects (part of the Infrastructure & Civil Engineering BU), have been eliminated, as these were sold respectively in the third and fourth quarter of 2013.

** The term “Business Profit” means the industrial margin before the allocation of general and administrative costs and research and development expenses.

 All comparisons are H1 2014 versus H1 2013, unless otherwise specified.

Consolidated Financial Results as at 30 June 2014

Maire Tecnimont Group’s revenues were €756.5 million, up 2.6%. H1 2013 revenues included approximately €54 million relating to the Cociv and Metro Copenhagen projects that were disposed of in 2013. Net of these, revenues would have recorded a 10.7% increase.

Business Profit was €93.0 million, up 11.8% due to the evolution of the higher-profit projects in the backlog, driven by the Oil, Gas & Petrochemicals BU.

The Business Margin was 12.3%, up 1.0pp.

G&A costs were €37.4 million, down €0.9 million.

Research & Development costs were approximately €3.1 million, up €0.3 million. The Group focused its R&D activities on initiatives in high-technology sectors, which are expected to bear positive returns over the next few years.

EBITDA was €52.5 million (6.9% of revenues), up 24.6% vs. €42.2 million (5.7% of revenues). This increase is mainly due to higher Group business margins, particularly in the Oil, Gas & Petrochemicals BU.

Amortisation, depreciation, impairment and provisions were €3.5 million, down €3.6 million.

EBIT was €49.0 million, up 39.8%.

Net financial income was negative for €18.8 million, showing an improvement of €1 million. This is mainly due to the positive effects of the financial reorganisation completed during the second half of last year.

Pre-tax income was €30.3 million and tax provisions were €10.8 million. The effective tax rate is approximately 35.8%.

The Group’s net profit was €19.4 million, up 93.9%.

The Net Financial Position (“NFP”), i.e. net financial debt, was €364.4 million (as compared to €332.3 million as at 31 December 2013 and €372.9 as at 31 March 2014). The change was mainly affected by the physiological reduction of available cash in the joint ventures as projects have evolved.

Consolidated Shareholders’ Equity was positive for €61.8 million (up €26.6 million vs. 31 December 2013). The change is mainly due to the period result and the recording of the equity component of the convertible bond (€7 million).

Performance by Business Unit

Oil, Gas & Petrochemicals

Revenues were €649.5 million, up 12.9%. This change is mainly due to the progress made on new awards. Business Profit was €87.3 million, up 10.6%, leading to a Business Margin of 13,4%. EBITDA was €51.5 million (7.9% of revenues), up 14.2%.

Power

Revenues were €29.5 million, up 20.2%. Business Profit was €2.2 million, up €3 million, leading to a Business Margin of 7.4%, vs. minus 3.4%. EBITDA was €1.0 million (3.4% of revenues), vs. minus €1.9 million.

Infrastructure & Civil Engineering

Revenues were €77.6 million, down 43.6%. This change is mainly due to the above mentioned disposals of the Cociv and Metro Copenhagen projects. Net of revenues for these two projects (about €54 million), the reduction would have been 7.1%. Business Profit was €3.6 million, down 30.8%, but up 62.4% net of the Cociv and Metro Copenhagen projects. Business Margin was 4.6%, up 0.9pp. EBITDA was substantially breakeven vs. minus €1 million.

Order Intake and Backlog

During H1 2014, the Group’s commercial activity generated new awards worth €894.6 million, up €509.3 million. In particular, new awards in H1 2014 include the important Sonara refinery Phase II Expansion project in Cameroon, worth approximately €456 million and the ROG project for the Total refinery in Antwerp, worth approximately €193 million.

As at 30 June 2014, the backlog was €3.708 million, up €225.6 million on 31 December 2013, mainly due to the strong growth in awards.

The H1 2014 order intake and backlog as at 30 June 2014 does not include the agreement for the Egyptian petrochemical complex with Carbon Holdings (worth USD1.7 – 1.95 billion, out of which 50% pertaining to the Group), nor the value of the MoU for a fertiliser complex in the USA with Fatima Group Principals and Midwest Fertilizer Corporation (approximately USD 1.6 billion), the latter announced after June 30, 2014, as explained under “Subsequent Events”. Both initiatives are subject to financing closing.

Subsequent Events

On 16 July 2014 Maire Tecnimont’s Board of Directors approved the issuance of an unsecured guaranteed 5-year bond for a total minimum amount of €300 million. The transaction can be carried out by December 31^st, 2014, subject to market conditions.

The proceeds from the bond will be used to refinance the Company’s bank debt and that of Tecnimont S.p.A., in order to diversify its financing sources, extend the average term of the debt and increase the overall Group’s financial flexibility. 

On 21 July 2014, Maire Tecnimont announced that it had signed an MoU with Fatima Group Principals and Midwest Fertilizer Corporation (“MFC”) in order to negotiate and finalise the strategic collaboration aimed at developing a new mega MFC fertiliser complex in Mount Vernon, Posey County, Indiana (USA).

Following the finalization of the Scope of Work and the agreement on the terms and conditions of the EPC contract, the value of the activities to be carried out by Maire Tecnimont or its subsidiaries will be approximately USD1.6 billion.

Outlook

In light of the positive results and commercial achievement in the first six months of the year, positive margins for H2 2014 are expected to be maintained. This objective will continue to be driven by the high technologycal activities carried out in line with the Group’s strategic guidelines.

Specifically, the Group expects new awards in the next few quarters in the core business of the OG&P BU, as confirmation of the industrial repositioning which has already generated new orders in the last part of the 2013 and in the first six months of 2014.

In the Licensing area, the business is expected to grow, which will lead to registration requests for several new patents throughout the year, and in parallel a broader marketing of proprietary technologies.

In the Power BU, the Group is currently developing a new commercial strategy, the economic benefits of which will be enjoyed as from the next few months in 2014. Such a strategy aims to valorize its specific competences in engineering services and EP projects, along with technological alliances with solid construction partners.

The Group also continues to pursue a cost reduction policy in line with the positive results already achieved in 2013 and the first six months of 2014.

The announced asset disposal plan also continues, and further transactions are expected to be completed within the next few quarters of 2014, including the Biomass Plant in Olevano di Lomellina.

Subject to market conditions, the Group expects to carry out the unsecured guaranteed 5-year bond issue for a minimum of €300 million, as announced on 17 July 2014. This will allow the Group to diversify its financing sources, extend the average maturity, whilst increasing the Group’s overall financial flexibility.

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Corporate Governance

Today’s Board of Directors meeting also resolved to appoint the Chairman Fabrizio Di Amato, to convene the Company’s Shareholders’ Meeting by end FY 2014, in order to resolve on the integration of the Board of Auditors and the appointment of a Director. This is as a result of the 11 June 2014 resignation of the Regular Auditor Antonia Di Bella, whose position was temporarily taken over by Roberta Provasi whilst awaiting the next shareholders’ meeting, and the co-opting of Andrea Pellegrini as Director until the next shareholders’ meeting, in accordance with Art. 2386, paragraph 1 of the Italian Civil Code. The meeting will also resolve on all other matters considered appropriate or necessary.

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The following information is provided, as required by Consob:

Net Financial Position of the Maire Tecnimont Group and Maire Tecnimont S.p.A.

The table below shows Maire Tecnimont Group’s Net Financial Position:

The Net Financial Position at 30 June 2014 was negative for €364,4 million, an increase of €32,1 million compared to 31 December 2013 (when it stood at negative €332,3 million), but showing an improvement compared to 31 March 2014, when it was negative for €372,9 million. The change is affected by the physiological reduction of available cash in the joint ventures related to the project evolution; gross debt has instead risen as a result of the equity-linked bond issue.

With regard to the individual financial statements of Maire Tecnimont S.p.A., the Net Financial Position of the Company is shown in the next table:

Group overdue payables

As at 30 June 2014, the Group has 90 days or more overdue payables to third parties equal to €38.26 million; this value considers payment plans negotiated with suppliers and is basically in line with the figures at end March and December 2013. The Group has, in fact, proceeded with the definition of repayment plans, which are enabling a gradual settlement of older trade payables in line with the achievement of the positive effects of the strategy.

In the first half of 2014, payment reminders were received as part of ordinary administrative management.

As at 30 June 2014, there are no overdue financial payables to report; there is also no failure to comply with covenants to report.

At 30 June 2014, there were no overdue tax and social security positions.

Transactions with related parties

With reference to the disclosure on related parties, it is reported that all related party transactions have been conducted based on market conditions. At 30 June 2014, the breakdown of the Company’s receivables/payables (including financial and any advances) and cost/revenue transactions with related parties, is shown in the tables below. The tables also show the equity positions resulting from transactions that took place last year and are still being defined:

Implementation of the industrial plan and analysis of final data compared to forecasts

The financial reorganisation plan of the Group is also based on an industrial plan (2013-2017), approved by the Board of Directors on 5 April 2013 and updated on 13 March 2014 and 09 July 2014, when it was also extended to cover through to end 2019; it includes both economic and financial forecasts. On this same date, the Group revised the economic forecast for FY 2014 (Revised Budget 2014) confirming that the assumptions are in line with the strategic requirements of the Group, both in relation to the award of new projects in 2014 and to the implementation of the disposal plan of certain non-strategic assets. The Directors believe that the delays in new project awards witnessed in 2013 may be recovered over the next few months, also considering the projects awarded during the early months of 2014, allowing the Group to achieve the current year’s targets as forecast in the plan. 

As envisaged in the disposal plan, on the fist months of 2014, has been finalized the valuation of the assets of the French company Sofregaz S.A. and of a real estate asset.

Disposals continue and focus primarily on the sale of the stake of the company that owns the Biomass Plant in Olevano di Lomellina.

On Febuary 20th, 2014 the group has issued a €80m unsecured Equity-Linked Bonds due 2019. The Offer has enabled Maire Tecnimont to diversify its funding sources and optimise its financial structure.

The Group expects to be in the position to carry out, subject to market conditions, the issue of an unsecured guaranteed 5-year bond for a total minimum amount of €300 million as communicated on July 17^th, 2014.  The proceeds from the bond will allow the Group to diversify its financing sources, extend the average term of the debt and increase the overall Group’s financial flexibility.

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Conference call by audio webcast

A conference call by audio webcast will be hosted by the top management today at 5pm CEST (5pm BST, 12noon EDT).

This conference call can be followed through the webcast on www.mairetecnimont.com by clicking on the “First Half 2014 Results” banner in the Home Page of the website, or through the following URL:

http://services.choruscall.eu/links/mairetecnimont140731.html

As an alternative to the webcast, it will be possible to participate in the conference call by dialling one of the following numbers:

Italy: +39 02 805-8811

UK: +44 1212 818-003

USA: +1 718 705-8794

The presentation given by the top management is available at the start of the conference call and webcast in the “Investors/Presentations” section of the Maire Tecnimont’s website www.mairetecnimont.com

(http://www.mairetecnimont.com/en/investors/presentations?set_language=en).

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In his capacity as manager responsible for preparing corporate accounting documents, Dario Michelangeli hereby declares - in accordance with paragraph 2 of Art. 154-bis of Italian Legislative Decree no. 58/1998 (the “Consolidated Law on Finance”) - that the accounting information given in this press release coincides with the documented results, books and accounting entries.

The Interim Financial Report as at 30 June 2014 will be published within the legal terms at the Company’s offices and with Borsa Italiana, as well as in the Investors/Financial Statements section of the website www.mairetecnimont.com.

This press release, and in particular the section entitled “Outlook” contains forecasts. These declarations are based on current estimates and forecasts for the Group in relation to future events; by nature, these entail a certain amount of risk and uncertainty. For various reasons, the actual results may differ significantly from those contained in such declarations; such reasons include continued volatility or a further worsening of the capital and financial markets, changes in the prices of commodities, changes in macroeconomic conditions and economic growth and other changes in business conditions, in addition to other factors, the majority of which are beyond the Group’s control.

Maire Tecnimont S.p.A.

Maire Tecnimont S.p.A. is a company listed with the Milan stock exchange. It heads an industrial group (the Maire Tecnimont Group) that leads the international Engineering & Construction (E&C), Technology & Licensing and Energy Business Development & Ventures markets, with specific competences in plants, particularly in the hydrocarbons segment (Oil & Gas, Petrochemicals and Fertilisers), as well as in Power Generation and Infrastructures. The Maire Tecnimont Group operates in approximately 30 different countries, numbering around 45 operative companies and a workforce of about 4,300 employees, of whom over half work abroad. For more information: www.mairetecnimont.com.

The tables of the Consolidated Income Statement, Balance Sheet and Cash Flow Statement are shown below, together with additional details on the order intake and backlog.