TERNIENERGIA: 2012 EBITDA margin of 16% and net profit of Euro 6.9 million, proposed dividend amounting to Euro 0,055 per share

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1 TERNIENERGIA: 2012 EBITDA margin of 16% and net profit of Euro 6.9 million, proposed dividend amounting to Euro 0,055 per share Revenues of Euro 65.4 million (Euro million as at 31/12/2011) EBITDA of Euro 10.7 million (Euro 15.2 million as at 31/12/2011); EBITDA Margin of 16% (9% as at 31/12/2011) Net income of Euro 6.9 million (Euro 9 million as at 31/12/2011) NFP of 62.3 million (Euro 58.2 million as at 30/09/2012) Net equity amounted to Euro 48.8 million (+51% compared to Euro 32.3 million as at 31/12/2011) As at 31/12/ photovoltaic plants were built with a total installed power of MWp, grid connected biomass plants for 1.5 MWe and 2 MWt. Produced 90 million kwh of energy. Approved a 10 MWp PV plant project in South Africa at Upington airport. The Board of Directors of TerniEnergia, a company active in the renewable energy fields, energy efficiency and waste management, listed on Star Segment of Borsa Italiana, approved today the draft financial statements and the consolidated financial statements as at December 31, Stefano Neri, President and CEO of TerniEnergia, commented as follows: During 2012 TerniEnergia has achieved results in line with expectations and fully satisfactory, as they were obtained in a very difficult market and with a gradual shift in the mix of activities and geographical markets. Despite the adverse economic conditions in the Eurozone together with the substantial changes in the regulatory framework have severely affected the national industry "core" of photovoltaic sector, the company has been able to quickly react continuing on its path to creating value for shareholders. In terms of asset growth, merging with TerniGreen has led to an increase in equity of 51%, significantly contributing to the growth of the Group and the exploitation of synergies. 1

2 In this direction, it should be noted that all the industrial objectives of the environmental sector, represented by the assets of the ex TerniGreen were achieved in the terms outlined by the business plans and also completing the impressive size of its investment. It should be noted, confirming the full financial balance, that over a third of the net financial position in the short term consists of amounts related to investment in production facilities already completed and not yet refinanced. The internationalization process completed very quickly and promptly, which offset the weakness of the traditional markets of the Group, and the increased activity in the energy efficiency sector, have already contributed in a very significantly way to this year results. Both in terms of visibility on the stock market and in terms of results, TerniEnergia has demonstrated to be able to intercept the most advanced trends in the reference sector and represents today in the environmental and renewable energy field, a protagonist among of the most active at European level and an integrated operator in the green sector, able to create an aggregation platform that represents an opportunity for institutional investors. CONSOLIDATED RESULTS AS AT DECEMBER 31ST, 2012 Revenues amounted to Euro 65.4 million (Euro million as at December 31, 2011) with a variation mainly due to the change in the Italian legal context, as well as in the decision not to provide solar panels for new PV plants carried out for third parties. EBITDA amounted to Euro 10.7 million compared to 15.2 million as at December 31, The EBITDA margin amounted to 16.32%, an increase of 82% compared to the same period in 2011 (8.97%) The operation profit (EBIT) amounted to Euro 5.9 million (Euro 13.1 million as at December 31, 2011) after amortization of Euro 2.1 million, depreciation and provisions amounting to Euro 2.7 million (Euro 2 million as at December 31, 2011). Net profit amounted to Euro 6.9 million (Euro 9 million as at December 31, 2011) and includes the share of profit from the activity of JV amounting to Euro 3.2 million, an increase of 36.8% compared to December 31, The net financial position amounted to Euro 62.3 million (Euro 58.2 million as at 31/09/2012). Non-current net financial position amounted to Euro 28.2 million, while the net financial position in short term was Euro 34.2 million. The gearing ratio NFP / net equity was 0.7 x, remains well below the unit and the gearing ratio NFP short term / Net working capital was 1.0 x, in a complete safety area. 2

3 Sharenorder s equity, increased of 51% as a result of the merger with TerniGreen, and amounted to Euro 48.8 million (Euro 32.3 million as at December 31, 2011).The value of net equity, not considering the effect of derivatives, would amount to Euro 53.3 million total performed investments amounted to Euro 40.8 million, Euro 24.5 million of which arising from the merger by incorporation of TerniGreen S.p.A. Euro 1.4 million of this investment, are represented by fixed assets, primarily related to patents in the availability of TerniGreen and related among other things to the production of LED lamps. The investments in tangible fixed assets amounted to Euro 39.4 million, Euro 23.3 million of which incurred by TerniGreen prior to the merger. Such investments are represented by tangible assets in course amounting to Euro 23.5 million (Euro 15.5 million of which resulting from the merger with TerniGreen), mainly relating to the biodigester-plant in Nera Montoro, composting plant in Calimera, the second treatment plant of used tires recycling plant (PFU) and pyrogasification plant located in Borgosesia. Investment in plant and equipment during the year 2012 amounted to Euro 12.4 million, 4.6 million of which already performed by TerniGreen before the merger and consist mainly of the treatment plant PFU of Nera Montoro, the residual, equal to Euro 7.8 million, refers mainly to the construction of two photovoltaic plants and the acquisition of the purification of groundwater present in the plant in Nera Montoro. The Board of Directors confirmed the proposal to the Shareholders Meeting about the distribution of a gross dividend per unit equal to Euro per share, that corresponds to a payout ratio of 30.%. The dividend shall be paid on May 30,2013 and the relevant coupon No. 4 shall be separated on May 27, INDUSTRIAL RESULTS AS AT DICEMBER 31, 2012 From the beginning of its activity until December 31, 2012 the Group built 266 photovoltaic plants with total installed power of MWp (9.1 MWp of which were 100% in full ownership of the company and 61.1 MWp in joint ventures for the activities of Power Generation). With effect from December 31, 2012, was completed the transfer by TerniEnergia to EDF EN Italy of the share equal to 50% of the corporate capital of the Joint Venture Energie Srl, owner of 13 industrial sized photovoltaic plants with a total power of 16.5 MWp. The overall energy production plants owned 100% by the company together with those in Joint Venture for the activity of power generation, was about 90 million kwh. TerniEnergia also connected to the grid energy recovery plants from biomass and waste in Nera Montoro (biodigester GreenASM in joint venture with ASMTerni SpA) and Borgosesia (pyrogasification plant powered by virgin wood) for a total of 1.5 MWe 3

4 and 2 MWt. TERNIENERGIA S.P.A. RESULTS AS AT DECEMBER 31, 2012 Net revenues amounted to Euro 39 million (Euro million as at 31/12/2011). The gross operation profit (EBITDA) amounted to Euro 3.6 million (Euro 16.5 million as at 31/12/2011). The net profit amounted to Euro 1.2 million (Euro 7.9 million at 31/12/2011). PRO-FORMA RESULTS AS AT DECEMBER 31, 2012 As at December 2012 the Group had the joint control - with partners of primary level - on 11 companies having as their object the identification, development, financing, design, construction, commissioning, operation and management in Italy of industrial sized photovoltaic plants, and the sale of electricity produced by them. Pursuant to the provisions of IAS 31 Interests in Joint Ventures, the Group opted for using the equity method for accounting for joint ventures pointing out, therefore, the results of the Group in the consolidated and separated income statement line "Share of income JV ". The following table shows the results of the Group as at December 31, 2012 in case the results of the joint ventures were accounted by using the proportionate method, which consists in detecting the portion attributable to all assets and liabilities, income and expenses arising from the financial statements of joint ventures Euro Euro Revenues , ,070 EBITDA , ,688 Operation profit , ,845 Net profir 6.878, ,832 Ebitda Margin 32.06% 14.60% This accounting method would not have resulted in any adjustment to the Group's net profit in the period. 4

5 SIGNIFICANT EVENTS AFTER THE END OF FINANCIAL YEAR February 1 st, 2013 The Group announced, as part of its development strategy and internationalization process of its business, the establishment of the company TerniEnergia Romania Srl, in Bucharest 100% owned by the parent company. The Romanian subsidiary will operate with maximum efficiency for the performance of the substantial program of activities that the Group expects to develop in the countries of eastern Europe, considered to be strategic in terms of the tendency for the business growth related to renewable energy field and the environment. March 1, As part of its strategy for development of the power generation, the company completed the purchasing of all shares of the company Alchimia Energy 3 Srl, owner of an industrial sized photovoltaic plant in Umbria, for a total installed capacity of approximately 0.8 MWp, already put into operation with the second Energy Bill "Conto Energia". The total value of the transaction was approximately Euro 2.16 million. BUSINESS OUTLOOK In a market situation with a huge quantity of development opportunities and quota restrictions on access to capital, TerniEnergia changed very dynamically its business model aiming to combine: stability of cash flow and growth opportunities arising from the replicability; differentiation of country risk and B2B counterparty risk differentiation, alternative sources of capital. For this reason the company will continue to pursue in the future a strategy that combines size of the business, growth and development policy of relations with capital markets and debt. As a result, the Group expects the following lines of development: - International development; - Concentration on the ownership and control of assets with direct investments; - Specialization on certain sectors leading integrated skills to solve the problem of overall energy companies; - Focus on business lines to reach an increased development, consolidating -without recourse to new investments- lines of business with lower potential return and growth, on which was based the recent development (EPC, O & M). Concentration on the activity of power generation with the full technological independence and diversification of energy sources and technologies, to enhance the short term opportunities and the coverage requirements of the demand curve. 5

6 In particular, TerniEnergia intends to continue its path of growth, focusing on three development lines: - Direct investment in power generation for grid inject, with diversification of country risk, aiming at the development of the countries with strong growth demand (eg. South Africa and India) and replacement demand (Europe); - Direct investment in generation and energy efficiency for vertical sectors with private counterparts and consequent diversification of counterparty risk. - Environmental measures and use of marginal sources. The aim of TerniEnergia shall be to strengthen the development in areas that require specialized skills, for which energy efficiency and the availability of energy are strategic point, creating applications for the energy industries of the sector, integrating with generation technologies and skills for energy efficiency. TerniEnergia, thanks to the integration actions carried out during 2012 (growth in energy efficiency, merger with TerniGreen, development of electricity generation from biomass and biogas, etc..), Aims to grow in emerging markets and consolidating its presence in the historical markets, starting from Italy, through the implementation of a strategy of integrated Independent Power Producer, developing and building plants with different generation technology to manage directly, although sharing the ownership with financial investors. This combination of investments for growth and stabilization of cash flow allows a balanced process of generating value for shareholders. TerniEnergia intends to have a balanced portfolio by country. The company has launched internationalization process, in some European countries (Greece and recently the opening of subsidiaries in South Africa, Poland and Romania) and in some attractive emerging markets (South Africa, India) on which to operate gradually and in an integrated manner with the different lines of business. On the financial side, TerniEnergia shall consolidate its excellent reputation with investors, using its presence in the Stock Exchange in order to be an investment platform for institutional investors, creating conditions, through the stability of cash flows, using the debt in a efficient way with respect to changes required by the market. FURTHER RESOLUTIONS OF THE BOARD OF DIRECTORS The Board of Directors has reviewed and approved the Report on corporate governance and ownership structure for the year 2012, the Report on the management of administrative processes with a view to 6

7 internal controls and approved the Report on the remuneration of Directors and key management with strategic responsibilities pursuant to Article. 123-ter of Legislative Decree 58/98, which will be subject to approval by the Shareholder Meeting. The Board of Directors of TerniEnergia approved the Service contract signed with the JV GreenASM Srl, concerning the provision of a biodigester plant for the treatment, energy recovery and composting of the organic fraction of municipal solid waste. Being a transaction with related party that exceeds the thresholds identified in accordance with article 4, paragraph 1, letter a) of Regulation 1722/2010, the Board of Directors gained a positive opinion from the Committee for Transactions with Related Parties and approved the aforesaid operation. The service contract shall be in force for ten years and provide for the payment of an annual fee of Euro 0.88 million. The Board of Directors also approved the project for the construction of a photovoltaic plant in South Africa, at the airport in Upington, with a capacity of approximately 10 MWp and related contracts. The Board of Directors finally called the ordinary l Shareholder Meeting to resolve on the approval of the financial statements as at 31/12/2012 and the appointment of new members of corporate bodies, the Board of Directors and Board of Statutory Auditors for the financial years 2013, 2014 and The documentation related to items on the agenda of the Shareholders Meeting shalll be made available to the public at the time and in the manner provided by law. The Officer appointed for the preparation of accounting and corporate documents, Dott. Paolo Allegretti, states, pursuant to paragraph 2 of art. 154-bis of the consolidated Financial Act, that the accounting information that is contained in this press release corresponds to the results contained in the documents, books, and accounting records. This press release is also available on the company s website. TerniEnergia, a company incorporated in September of 2005 and part of Terni Research Group, operates in renewable energy sector and is active in the photovoltaic field. TerniEnergia operates as system integrator, with a turn-key offer of industrial sized photovoltaic plants, on behalf of third parties and on its own mainly through joint venture companies with EDF EN Italia S.p.A. and other leading national players. The Company intends to strengthen its sale activity of energy produced form solar source. TerniEnergia operates in the waste management sector, recovery of the material and energy, development and production of technologies. In particular, the Company is active in the recovery of tires out of use, in the treatment of biodegradable waste through the implementation of biodigesters, management of plant for the biological depuration; decommissioning of industrial plants, recovery of demolition metals and cleaning of industrial sites; development and production of technological apparatus. TerniEnergia, through its controlled company Lucos Alternative Energies, operates in the development of energy efficient plantsboth through EPC scheme and FTT scheme (Financing Through Third Parties), pursuing the objectives of increasing energy production from renewable sources, of energy saving and reduction of emissions as set forth by environmental European policy. TerniEnergia is listed on STAR segment of Borsa Italiana S.p.A. 7

8 For information: Investor Relations IR TOP TerniEnergia SpA Investor Relations Consulting Paolo Allegretti (CFO) Maria Antonietta Pireddu Tel Tel /3 Press Office and Media Relations TerniEnergia SpA Federico Zacaglioni Tel Mobile In attach: Net Financial Statement TerniEnergia S.p.A. as at December 31st, 2012 Reclassified Income TerniEnergia S.p.A. as at December 31st, 2012 Reclassified Balance Sheet TerniEnergia S.p.A. as at December 31st, 2012 Consolidated Net Financial Statement TerniEnergia Group as at December 31st, 2012 Reclass. and Consolidated Income Statement TerniEnergia S.p.A. Group as at December 31st, 2012 Reclassified and Cons. Balance Sheet TerniEnergia S.p.A. Group as at December 31st,

9 Reclassified and Cons. Balance Sheet TerniEnergia S.p.A. Group as at December 31 st, 2012 December 31 December 31 Change Change (in Euro) % Intangible assets ( ) (7,52%) Property, plant and equipment ,04% Financial fixed assets and other intangible assets ( ) (9,06%) Fixed Assets ,36% Inventories ( ) (37,28%) Trade Receivables ,82% Other assets n.a. Trade Payables ( ) ( ) (9,67%) Other liabilities ( ) ( ) (27,55%) Net working capital ,51% Provisions and other non-trade liabilities ( ) ( ) (9,33%) Net Invested Capital ,04% Shareholders equity ,06% Current net financial position ,03% Non-current net financial position ,41% Total net financial position ,83% Net Invested Capital ,04% 9

10 Reclass. and Consolidated Income StatementTerniEnergia S.p.A. Group as at December 31st, 2012 December 31 December 31 Change Change (in Euro) % Net revenues from sales and services ( ) (61,49%) Production costs ( ) ( ) (66,78%) Added value ( ) (24,7%) Personnel costs ( ) ( ) (11,4%) EBITDA ( ) (29,9%) Amortisation, depreciation, provisions and write-downs ( ) ( ) ( ) 132,4% EBIT ( ) (55,5%) Financial income and charges ( ) ( ) (18,8%) Portions of results attributable to the JV ,8% Pre-tax result ( ) (45,9%) Income taxes ( ) ( ) (96,6%) Net Income ( ) (24,0%) 10

11 Consolidated Net Financial Statement TerniEnergia Group as at December 31 st, 2012 December 31 December Cash (21.373) (10.794) Available bank current accounts ( ) ( ) Liquidity ( ) ( ) Current bank debt (current account overdraft) Current bank debt (advance) Financial payables to other lenders Financial payables /(Receivables) Current financial debt (other lenders) Current financial receivables ( ) ( ) Current financial debt Net short-term financial position Non-current financial debt (other lenders) Non-current financial debt (medium-long term loan) Non-current financial debt (Leasing) Non-current net financial position Total net financial position

12 Reclassified Balance Sheet TerniEnergia S.p.A. as at December 31 st, 2012 December 31 December 31 Change Change (in Euro) % Net revenues from sales and services ( ) (80,3%) Production costs ( ) ( ) (82,5%) Added value ( ) (64,3%) Personnel costs ( ) ( ) (32,4%) EBITDA ( ) (78,1%) Amortisation, depreciation, provisions and write-downs ( ) ( ) ( ) 95,3% EBIT (8.872) ( ) (100,1%) Financial income and charges ( ) ( ) (68,0%) Pre-tax result ( ) ( ) (106,3%) Income taxes ( ) (144,8%) Net Income ( ) (85,2%) 12

13 Reclassified Income TerniEnergia S.p.A. as at December 31 st, 2012 December 31 December 31 Change Change (in Euro) % Intangible assets ,2% Property, plant and equipment N.A. Financial fixed assets and other intangible assets ,4% Fixed Assets ,6% Inventories ( ) -45,3% Trade receivables ( ) -47,2% Other assets N.A. Trade Payables ( ) ( ) ,2% Other liabilities ( ) ( ) ,5% Net working capital ( ) -8,5% Provisions and other non-trade liabilities ( ) ( ) ( ) N.A. Net Invested Capital ,4% Shareholders equity ,1% Current net financial position ,5% Non-current net financial position ,8% Total financing position ,80% Net Invested Capital ,4% 13

14 Net Financial Statement TerniEnergia S.p.A. as at December 31 st, 2012 December 31 December 31 (in Euro) Cash (12.155) (5.931) Available bank current accounts ( ) ( ) Liquidity ( ) ( ) Current bank debt (current account overdraft) Current bankdebt (advance) Financial payables to other lenders Current financial debt (other lenders) Current financial debt (other lenders) ( ) ( ) Current financial receivables Cash Pooling Current financial debt Current net financial position Non-current financial debt (other lenders) Financial payables to other lenders Non-current financial debt (Leasing) Non-current net financial position Total net financial position