ANNUAL REPORT 2015 ENABLING GLOBAL CONNEC TIVIT Y. UR Holding S.p.A. - Viale Edison, Trezzano s/n (MI) - Italy

Transcription

1 ANNUAL REPORT 2015 ENABLING GLOBAL CONNEC TIVIT Y IP NETWORK - WIRELESS - FIBRE-OPTIC - S AT E L L I T E UR Holding S.p.A. - Viale Edison, Trezzano s/n (MI) - Italy info@ur-group.com

2 CONTENTS FINANCIAL RATIOS OVERVIEW 2 UR GROUP CONSOLIDATED KEY FIGURES 3 BOARD OF DIRECTORS 5 FOREWORD FROM THE BOARD 6 BUSINESS MODEL 7 INVESTOR RELATIONS 11 INDEPENDENT AUDITOR S REPORT 21 CONSOLIDATED BALANCE SHEET AT 31/12/ PROFIT AND LOSS ACCOUNT 26 DISCLAIMER 29 1

3 Financial Ratios Overview Sales and Earnings in Sales (EUR m) EBITDA (EUR m) Net Profit (EUR m) Equity ratio (%) % 52.9% 51.1% % Total Equity (EUR m) Booking* (EUR m) *2014 net of power

4 UR Group consolidated key figures (as at December 31, 2015) Balance sheet ratios Dec 31, 2015 Dec 31, 2014 Variance EUR 000 EUR 000 EUR 000 % Balance Sheet Total 17,275 18,802 (1,557= (8)% Total Equity 9,141 9,599 (458) (5)% Liabilities 8,134 9,203 (1,069) (12)%% Equity Ratio (%) % Net financial position 4,803 6,905 (2,102) (30)% Income statement ratios Dec 31, 2015 Dec 31, 2014 Variance EUR 000 EUR 000 EUR 000 % Revenues 23,383 25,561 (2,178) (8)% EBITDA (298) 56 (354) (100)% EBIT (469) (101) (368) NS EBT (753) 4,147 3,394 NS Net Profit of the period (656) 3,206 (3,862) NS Earnings per share (0.08) 0.43 (0.51) NS Booking (2014 net of Power) 21,173 17,447 3,726 21% Other ratios Dec 31, 2015 Dec 31, 2014 Variance Number of employees (3) 3

5 Cash-flow Statement Net result (656) 3,206 (+) Depreciation intangibles (+) Depreciation tangibles (+/-) Employees leaving indemnity (46) (187) (+/-) Provision and deferred taxes (326) 535 (+) Devaluation (+/-) Changes in Working Capital 91 3,043 Operating Cash Flow (847) 6,754 Fixed assets (150) (16) (Investments)/disinvestments (2.115) (286) Investments Cash Flow (2.265) (302) Changes in banks payables (243) Dividend paid (990) Financial Cash Flow 357 (243) Other changes in Equity* (990) Total Free Cash Flow (2.755) 5,219 Cash and cash equivalents as of ,388 2,169 Cash and cash equivalents as of ,633 7,388 Amount reclassified from Equity to Payables as of related to the payment of the dividend occurred in

6 BOARD OF DIRECTORS Management Giovanbattista Laghezza C.E.O. & President Stefan Haas Managing Director Founder of UR Holding S.p.A. (UR Group) Successful track record in the high-tech industry for more than 30 years Over 20 years of relevant professional experience Special area of SCM/Procurement Services and international Key Account Management Long track-record in the private equity industry with a focus on SMEs und Fund Advisory Board of Statutory Auditors Dr. Maria Cristina Ciarchi, Chairman of the Supervisory board Dr. Massimo Giaconia (Baker & Mc. Kenzie) Dr. Giovanni Lettieri (Studio Legale e Tributario) UR Holding S.p.A. is audited by Ernst & Young. 5

7 FOREWORD FROM THE BOARD Dear Shareholders, Ladies and Gentlemen, The Board is pleased to report the figures related to fiscal year Thanks to its diversification in the selected vertical markets and clear focus on Tier-1 accounts, UR Holding group was able to retain its strong market position despite the challenging worldwide economic situation. In fact, even if the worldwide situation still shows concerns, the Group economic results and the strength of Group assets showed further improvements in terms of solidity with respect to the previous years. Such solidity will push the Group to pursue new opportunities in the market in order to take advantages and to further improve its position in the Tier 1 accounts. Therefore, UR Group will continue to make additional efforts and investments to further strengthen its position in the market and to make preparation for future growth. These investments in new and strong growing technology sectors like Satcom and Embedded Networking as well as Supply Chain Management will impact the results in the 2016 fiscal year as well as following years. Performance: Considering the sale of the Power Conversion activities occurred in the previous year, activities which represented approx. 50% of UR Group s total revenues, the revenues showed a decreased by only the 8% with respect to the prior year. While if we consider only the revenues of 2014 net of the Power division, the increase in sales is 42%. This result shows as the Group was able to reach a very positive level of turnover despite the fact that some Companies of the Group, after the sale of the Power Conversion division, can be considered as still in the early stages of strategy implementation, but already showing positive results. Additionally, the investments already made in order to implement the business strategy outlined within this report, has now started delivering the expected results. These costs are already included in the profit & loss statement and the Group achieved the milestone of break-even in the majority of the Group locations. In some of these locations, significant improvements are expected in the current year due to some normal delays in the collection of the orders from 2015 programs. Furthermore, the economic scenario must be taken into consideration as it is still weak and not able to guarantee stable economic growth. At December 2015, the balance sheet remains very robust, as shown by the capital structure and the financial ratios. The total assets amount to 17,3 Euro million and the Equity amounts to 9,1 Euro million, with an equity ratio of 52,9%. The financial position, again, is very positive and amounts to 4,8 Euro million. Giovanbattista Laghezza C.E.O. & President Stefan Haas Managing Director 6

8 BUSINESS MODEL UR Group Technology Enablement for customers and suppliers. Founded in 1996 in Milan, UR Group are specialists in enabling global connectivity. We are an international provider of advanced communications systems, sub-systems and end-to-end solutions in IP networking, wireless, satellite, and fibre-optic based applications. Unlike conventional sales companies, UR has far-reaching technological expertise, an international Group structure and presence, a comprehensive understanding of its selected vertical markets and a dedicated range of strategic value-added services. Thanks to this unique market positioning, UR is one of Europe s leading technology enablement companies with a clear focus on the selected markets of ITS, Defence, Industrial Automation and Energy. These specialist markets demand ruggedised, reliable connectivity solutions with leading-edge features to help embrace evolving technology for improved performance and operational efficiencies. With this in mind, we partner world-class manufacturers to bring optimal solutions which provide measurable return on investment in our customer applications, every time. Yet we understand technology, in itself, is not enough. Through our Technology Enablement model we combine this leading-edge solutions portfolio with customer-driven integrated services such as custom design, product development and supply chain management. Our customers are served by internationally located and technically enabled sales teams who are placed to provide expert application support and technology guidance. These specialist services are designed to assist our customers in successful adoption of the latest connectivity platforms, whatever the application demands. This solutions-based, technical and commercial package is truly customer focused. It brings a valuable combined perspective which delivers real-life value to our customers and partners in the development of their business and programs. 7

9 Dynamic Technology Portfolio for Specialist Vertical Markets UR Group s technology portfolio is under constant review and development to fulfil the needs and requirements of strategic tier-1 customers in the focus, specialist markets. Through the matrixstrategy of the product & service portfolio multiple markets can be addressed and, as a result, synergies realised. With this dynamic approach UR Group are turning suppliers and manufacturers into customers and vice versa. As a specialist in the mid to high-end customer segment that requires intensive consulting support, UR facilitates the implementation of technologically sophisticated and specific problem definitions, thereby also operating as an adoption partner for its customers. As it has its own design centres, UR can also offer suppliers the opportunity to integrate their products into new technical solutions. UR Group s strategy of customer and market specialisation has made significant progress over the last years. We strongly believe that this strategy will put UR Group also furthermore in a position for organic growth, supported by potential and very selective acquisitions to further complete the companies global presence and market position. 8

10 Technology Enablement Model Technology Enablement as a model is designed to assist customers in their adoption of optimised connectivity solutions. It is clear that specialist markets can only realise measurable value from connected technologies if the they are applied with a strong focus on return on investment. With Technology Enablement as the model, UR Group combine international technically enabled specialist sales teams, technical competence centres with intelligent Supply Chain Management and fulfilment services to help our customers turn technology features into application benefits. The option to source and procure all relevant high-tech components, system solutions and necessary services from a centralized provider substantially reduces complexity for customers. This fully integrated model provides a unique perspective. It provides fastest time-to-market, increased operational efficiencies, measurable application value and optimal return on investment. This value proposition is unique in the marketplace today. During 2015 we have seen further results from our investment strategy towards additional markets and territories. In particular, UR Group has made dedicated efforts in the evolution of Advanced Communication Systems towards the Satcom Market and has already entered into major agreements on both manufacturer and customer sides. UR will continue in this market-segment, supported also by its own technical competence centre. We expect a further, significant contribution in terms of revenue and profitability from these investments already during In addition, UR Group has made further investments into embedded networking activities. This effort will furthermore focus on Tier-1 accounts in our target markets where more and more communication technology is used in non-communication markets like Defence, Aerospace & (Homeland) Security, Intelligent Transportation Systems, Industrial and Energy markets. 9

11 SCM - Customised Supply Chain Services for Manufacturers and strategic Customers The Supply Chain Management division provides value-added services to both strategic customers and also to the manufacturers that are represented by UR Group. This market is driven by the aim and desire from both sides to rationalise and change the existing organisation. International tier 1 and tier 2 customers are driven to reduce the number and fragmentation of suppliers whereas at the same time the manufacturers want to reduce the number of direct accounts and consolidate the sales channels to the market. UR Group has successfully positioned itself to provide customised solutions for both side, in many cases we can even be the link to match the interest of both parties and enable more business. In Summary UR Group is an international specialist sales organisation supported by an in-house technical design-centre and dedicated specialist Supply Chain Services to serve the needs of our strategic customers The combination forms our Technology Enablement model which gives UR Group a unique position in the market serving customer and supplier to deliver increased efficiencies to both. UR Group has a strong presence and good reputation in the same business environment as its strategic tier-1 customers Being a sales organization, UR Group knows and understands the needs of its suppliers and customers to reach the best possible solution; technically or commercially. UR customer portfolio includes the important Tier 1/Tier 2 customer in the relevant markets, therefore UR Group has become a centre of attraction for manufacturers and customers. 10

12 INVESTOR RELATIONS Share ratios - UR Share Performance 01/ /2015 Share Capital Stock numbers Share price as of Dec 30, 2015 Share price as of Dec 30, 2014 Share price as of Dec 30, 2013 Market Cap. as of Dec 30, 2015 Market Cap. as of Dec 30, 2014 Market Cap. as of Dec 30, 2013 Segment SCN 1,846, EUR 7,386,730 Shares 0.73 EUR 0.64 EUR 0.80 EUR 5,392,313 EUR 4,727,507 EUR 5,909,384 EUR Entry Standard A0LBEG Shareholder structure as of December 31, 2015 The shareholder structure of UR Holding continues to reflect its management s strong commitment, 52% of shares in the Company are held by its active management, with 31% accounted for by founding shareholders and 3% are owned shares. The remaining 14% of UR shares are held in free float. Investor relations continuous capital market guidance UR Holding continued its strategy of transparent communications both in the 2015 financial year and after the reporting period. Reporting and Company disclosures above all focus on the strategic orientation of the Group and the transparent presentation of corporate development. As usual, information on the UR Holding S.p.A. Group and disclosures and reports relevant to the capital markets can be found on the Company s homepage at 11

13 UR HOLDING S.p.A. Head Office in Viale Edison, 44 - Trezzano sul Naviglio Fully paid-up Share Capital Euro 1,846, Registered in Register of Companies of Milan Tax code number no Registered at R.E.A. in Milan with no Directors Report on the Consolidated Financial Statement at 31/12/

14 Consolidated Financial Statements as at Dec. 31, 2015 The fiscal year ended 31 December 2015 of the UR Holding Group closes with a negative consolidated result of 0,6 Euro million, net of depreciation and amortization for 121 Euro thousands, income tax for 128 Euro thousands and deferred taxes for (235) Euro thousands. Notes on the Group and its business operations UR Holding S.p.A., the parent Company, controls the following companies which are included within the consolidation area: Name City or foreign state Currency Share capital Percentage stake % of the Group Percentage stake % of third parties UR Gmbh Germany Euro 275, UR SAU Spain Euro 77, UR Ltd United Kingdom Pound 122, UR Sarl France Euro 200, UR Ltd Israel Shekel 100, UR Ab Sweden Krona 100, UR Gmbh Austria Euro 100, B Tronics Israel Shekel UR Group Inc USA Dollar 7, Lariteck S.r.l. Trezzano sul Naviglio Euro 91, For a clearer picture of the data, the total share capital of the Companies is indicated, in the table above, in Euro. The Companies operates in the sector of marketing electronic components for telecommunications and, through its subsidiary Lariteck S.r.l., in the sector of designing and producing electric and electronic devices destined for the same market. Business operations began in Italy in the eighties and subsequently extended to markets in Europe, Israel and North America. The consolidation area has not changed compared to the previous year, and there have been no other variations in the percentage of stakes in subsidiary Companies. Operating conditions, business development and general economic trends Macroeconomic analysis and the global context In the Eurozone the year 2015 ended with a positive economic result by 1.6%, while worldwide the growth was by the 3,2%. These increases were lower than the estimates, mainly due to the slowdown in the economies of emerging countries. Italian GDP was lower than expected with a decline in the second half of the year that led to a GDP of 0.8%, half of the Eurozone GDP. Also the estimates for 2016 have been revised downwards for both Italy (+ 1%), the Eurozone (+ 1.4%) and worldwide (+ 3%). 13

15 Group performance and its development Economic situation In Italy the unemployment rate in 2015 stood at 12.3% with youth unemployment which remained at record levels. The economic situation both internally and at the Eurozone level is still fragile, despite the quantitative easing policies implemented by the ECB and the low price of the raw materials. Overall, the Italian economic situation appears worse than the slowdown affecting the entire Eurozone. In the macroeconomic framework described in the previous paragraph, the Group maintained its market position with a reduction in revenues of only about 8% compared to the previous year. It s important to note that 2014 included nine months of, now sold, Power business. This represented around 50% of the Group turnover, and within some Group locations it represented almost all of the turnover. If we compare the 2014 data, net of Power, the increase in sales amounts to 42%. Therefore, in 2015, the Group was focused in developing new markets, and we point out that some locations had to adapt to the new strategy and markets from a pseudo start-up perspective. This included a significant portion of personnel costs which represented a real investment in the development of the new business, for which the results are expected in the next few years. The Group was able to achieve, in the majority of the locations, the milestone of breakeven. In a few locations significant improvements are expected in the current year also due to the fact in 2015 some normal delays in the collection of orders occurred. Therefore, 2015 can be considered as a year of transition with the start of the implementation of the new strategy focused on the development of those markets included in the new business model and targeted strategy of the Group. The Group s economic situation is highlighted in the following reclassified income statement, compared to the reclassified income statement for the previous fiscal year. Figures are expressed in thousands of Euro. 31/12/ /12/2014 Value of production 23,383 25,561 Purchased material and inventory change (17,945) (18,262) Added value 5,438 7,299 Costs for services and leased assets (2,743) (3,277) Labour costs (2,928) (3,862) Other management expenses (65) (104) EBITDA (298) 56 Depreciation and amortization (171) (157) Operating result (EBIT) (469) (101) Financial results (160) 70 Extraordinary income and expenses (124) 4,178 Profit before tax (753) 4,147 Taxes 97 (941) 14

16 Net profit (672) 3,206 Revenues Costs Category Variations Sales and services 23,216 25,548 (2.332) Other revenues and income Total 23,383 25,561 (2.178) Revenues decreased by 2,2 Euro million with respect to prior year due to the reason above explained. As mentioned above, the EBITDA is negative due to the fact that in the 2015 the Group was focused in developing new markets and some subsidiaries acted as pseudo startup, with a significant portion of personnel costs representing significant investment in execution of the new focused strategy and the development of new business. The result was mainly affected by a couple of locations which had almost the majority of the business represented by (now sold) Power business. Therefore the investments made in the 2015 are expected to give results starting from the current year. In order to provide a clearer picture of the Group s income, the table below contains several indexes of profitability compared with the previous financial years. 31/12/ /12/ /12/2013 ROE net (Net result / Shareholders equity) (7,18)% 33,40% 0,39% ROE gross (Gross result / Shareholders equity) ROI (Operating result / Invested capital) (8,24)% (10,81)% (2,01% 43,20% (3,39)% (0,4)% 1,55% 4,44% 1,00% 15

17 Capital structure The capital structure of the Group can be more clearly shown in the reclassified capital structure below. 31/12/ /12/2014 Variation Intangible assets Tangible assets (57) Financial assets Fixed assets Inventory 3,652 4,031 (379) Trade receivables 5,157 5,417 (260) Other receivables 1,071 1,390 (319) Current assets 9,880 10,838 (958) Trade payables (898) Tax payables and social (111) charges Other payables (1.035) Short-term liabilities (2.044) Net working capital Employees leaving (46) indemnity Other long term liabilities (326) Long-term liabilities (372) Invested capital Equity (9.141) (9.599) 458 NFP long-term (980) 286 (1.266) NFP short-term (836) Sources of invested capital (4.338) (2.694) (1.644) The financial assets increased following the purchasing of own shares occurred in the year. The reduction of the Other receivables is mainly due to the collection of the remaining part or the receivables due for the sales of the Power business. The Other payables decrease is mainly related to the payment of the dividend occurred in May. 16

18 The reduction in the NFP (Euro 2,1 million) is mainly due to both the operating cash flow for the year, the mentioned payment of the dividend (Euro 1 million) and the reimbursement of part of the existing loan. The reclassified financial statement shows the strength of Company s assets, in other words, its capacity to maintain financial equilibrium in the medium- to long-term. The table below shows some of the balance sheet indicators regarding: - The fixed asset to equity capital margin, in other words, the difference between Shareholders equity and Fixed assets (capital assets); - The fixed asset to equity capital and medium-long term debt, in other words, the difference between Shareholders equity + Consolidated liabilities and Fixed assets Euro/000 31/12/ /12/ /12/2013 Fixed asset to equity capital margin 8,665 9,023 6,990 Fixed asset to equity capital and medium-long term debt margin 9,401 10,131 7,749 17

19 Financial management In order to provide a better description of the Company s financial situation, the table below shows some of the balance sheet indicators, compared to the same indicators for the last two fiscal years. 31/12/ /12/ /12/2013 Primary liquidity Secondary liquidity Indebtedness The primary liquidity indicator (calculated as the ratio between liquidity and shortterm credits on the one hand and short-term debts on the other) is 2.27, while the secondary liquidity indicator (calculated as the ratio between short-term assets and short-term liabilities) is 1,87. Both the indicators show the Group s strong financial position. The indebtedness indicator (calculated as the ratio between liabilities and Shareholders equity) is 0.66 and confirms the positive situation of the Group. Information regarding the environment and staff Staff Environment Following the recommendations given by the Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili (National Council of Chartered Public Accountants and Book-keepers) on the information and disclosures to be highlighted on the Directors Report, it has been decided that it will be appropriate to provide the following information concerning the environment and staff. During the fiscal year, there have been no deadly events in the workplace of staff included in payroll, nor any serious accident that have led to serious or critical injuries to staff included in payroll. During the fiscal year, there have been no reports of allegations regarding work illnesses among employees or former employees or legal action related to mobbing. During the fiscal year no damage has been caused to the environment for which the Groups companies have been declared guilty in final judgement. During the fiscal year no penalties have been applied to the Group s companies due to environmental crimes or damage. During the fiscal year no investment in the environment proved necessary. 18

20 Investments Research and Development The investment occurred were Euro 186 thousand and were mainly related to furniture. The Group did not undertake research or development during the fiscal year Important matters that have occurred after the closing of the fiscal year Forecasts for the Company No matters to be reported. Sales in the first quarter of 2016 are higher than 10% compared with Q We point out that also the 2016 could be considered a year of transition, especially for those subsidiaries which were in the past more Power oriented and which need more time to implement the new business model and the related strategy focused on high profitability products. Treasury stock and shares/shares of holding companies Following the resolution of the Shareholders Meeting held on December 21, 2007 the holding Company purchased 50,000 treasury shares at the average unit price of Euro In the ,000 stocks were purchased at a price of Euro 0.74, according to the Shareholders Meeting held on October 27, In conformity with legal regulations, the percentage falls within the limits stipulated in articles 2357 and 2357 b of the Italian Civil Code and a restricted reserve has been established in the net assets for the same amount, in accordance with art c of the Italian Civil Code. 19

21 Information in accordance with art. 2428, paragraph 2, point 6-b of the Italian Civil Code In accordance with art. 2428, paragraph 2, point 6-b of the Italian Civil Code, it is hereby declared that the holding Company has entered into derivative contracts to hedge the interest rate risks on the existing loan. Such derivative has a negative mark to market amounting to Euro 9 thousand at year-end. We have reason to believe that the assets of the Company, which mainly consist of trade receivables, are of good quality since there are no registered examples of bad or doubtful debts. Moreover, it is hereby declared that: - Bank credit lines exist, which are partially used, in order to face any possible liquidity requirements; - The sources of financing structured in risk capital contributed by the shareholders, in loans provided by the shareholders, as well as the mentioned bank credit lines; - There is no significant liquidity risk concentration either in terms of financial assets or in the sources of financing. Chairman of the Board of Directors Giovanbattista Laghezza 20

22 Independent Auditor s Report Reconta Ernst & Young S.p.A. Via della Chiusa, Milano Tel: Fax: ey.com Independent auditor s report in accordance with article 14 of Legislative Decree n. 39, dated 27 January 2010 (Translation from the original Italian text) To the Shareholders of UR Holding S.p.A. Report on the consolidated financial statements We have audited the accompanying consolidated financial statements of UR Holding S.p.A., which comprise the balance sheet as at December 31, 2015, the income statement for the year then ended, and the explanatory notes. Directors responsibility for the consolidated financial statements The Directors of UR Holding S.p.A. are responsible for the preparation of these consolidated financial statements that give a true and fair view in accordance with the Italian regulations governing financial statements. Auditor's responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA Italia) implemented in accordance with article 11, paragraph 3 of Legislative Decree n. 39, dated 27 January Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's professional judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements give a true and fair view of the financial position of UR Holding S.p.A. as at December 31, 2015, and of its financial performance for the year then ended in accordance with the Italian law. Report on other legal and regulatory requirements Opinion on the consistency of the Director s Report with the consolidated financial statements We have performed the procedures required under audit standard SA Italia n. 720B in order to express an opinion, as required by the law, on the consistency of the Director s Report with the consolidated financial statements. The Directors of UR Holding S.p.A. are responsible for the preparation of the Director s Report in accordance with the applicable laws and regulations. In our opinion the Director s Report is consistent with the consolidated financial statements of UR Holding S.p.A. as at December 31, Milano, April 13, 2016 Reconta Ernst & Young S.p.A. Signed by: Federico Lodrini, partner This report has been translated into the English language solely for the convenience of international readers. Reconta Ernst & Young S.p.A. Sede Legale: Via Po, Roma Capitale Sociale ,00 i.v. Iscritta alla S.O. del Registro delle Imprese presso la C.C.I.A.A. di Roma Codice fiscale e numero di iscrizione numero R.E.A P.IVA Iscritta all Albo Revisori Legali al n Pubblicato sulla G.U. Suppl IV Serie Speciale del 17/2/1998 Iscritta all Albo Speciale delle società di revisione Consob al progressivo n. 2 delibera n del 16/7/1997 A member firm of Ernst & Young Global Limited 21

23 Consolidated balance sheet at 31/12/2015 The values are in thousand of euro UR HOLDING S.p.A. Legal seat in Viale Edison, 44 Trezzano sul Naviglio Stated capital Euro = fully paid-in Fiscal Code and the inscription with the Milan Register of Enterprises n Inscribed with R.E.A. at n Assets 31/12/ /12/2014 A) Accounts receivable from shareholders in respect of unpaid share capital B) Fixed assets I. Intangible assets 1) R&D 2 3) Industrial patent and intellectual property rights ) Concessions, licenses, trademarks and similar right - 1 5) Goodwill 6) Work-in-progress and advances 7) Other intangible assets III II. Tangible assets 1) Land and buildings - - 2) Plant and machinery ) Industrial and commercial equipment ) Other assets Financial assets 1) Shareholdings in: b) affiliated undertakings - - d) others undertakings ) Accounts Receivables d) Other Accounts Receivables - falling due within one year 2, falling due after more than one year 2, ) Other securities ) Treasury shares , Total fixed assets 2, C) Current assets I. Stock 22

24 1) Raw materials, subsidiary materials and consumables 4) Finished products and goods 3,651 4,027 5) Payments on account (advances) 1 4 3,652 4,031 II. Accounts receivable 1) From customers - falling due within one year 5,157 5,417 - falling due after more than one year 5,157 5,417 4-bis) 4-ter) For tax receivables - falling due within one year falling due after more than one year For tax assets - falling due within one year falling due after more than one year III. IV. 5) Other accounts receivable - falling due within one year falling due after more than one year ,102 6,692 Financial assets other than fixed assets 6) Other securities 4 6 Liquid assets 1) Bank and postal deposits 4,633 7,387 2) Cheques 3) Cash and cash equivalents - 1 4,633 7,388 Total current assets 14,391 18,117 D) Prepayments and accrued income - others Total assets 17,275 18,802 Liabilities 31/12/ /12/2014 A) Shareholders' equity I. Share capital 1,847 1,847 II. Share premium reserve 4,309 4,334 III. Revalutation reserve IV. Legal reserve V. Statutory reserves VI. Reserves for own shares in portfolio VII. Other reserves Extraordinary reserves - - Reserve of conversion due to foreign funding Merge balance Provision due to law

25 VIII. Retained earnings (loss ) carry forward (638) IX. Profit (loss) for the year (672) 3,124 Total equity of the Group 8,932 9,406 Share capital and reserves of third parties Profit (loss) of the year of third parties Total equity of third parties Total shareholders' equity 9,141 9,599 B) Provisions for liabilities and charges 1) Provision for pensions and similar obligations ) Provision for taxes ) Other provisions Total provisions for liabilities and charges C) Employees leaving indemnity D) Accounts Payables 3) Accounts payable to owners for loans - falling due within one year falling due after more than one year ) Accounts payable to banks - falling due within one year falling due after more than one year 1,265-1, ) Accounts payable to third party lenders - falling due within one year - falling due after more than one year 6) Payments received on account (advances) - falling due within one year falling due after more than one year ) Accounts payable to suppliers - falling due within one year 4,475 5,373 - falling due after more than one year 4,475 5,373 10) Accounts payable to affiliated undertakings - falling due within one year - falling due after more than one year 12) Taxes payable - falling due within one year falling due after more than one year ) Accounts payable to social security institutions - falling due within one year falling due after more than one year ) Other accounts payable - falling due within one year 162 1,176 24

26 - falling due after more than one year 162 1,176 Total accounts payables 7,361 8,049 E) Accrued liabilities and deferred income - other accrued liabilities and deferred income Total shareholders equity and liabilities 17,275 18,802 Memo accounts 31/12/ /12/2014 1) Third parties' assets at the company s assets 3) Risks 700 1,400 Total memo accounts 700 1,400 25

27 Profit and loss account 31/12/ /12/2014 A) Revenues 1) From sales and services 23,216 25,548 5) Other revenues: - miscellaneous Total revenues 23,383 25,561 B) Costs 6) Raw materials, subsidiary materials, consumables and goods 17,708 19,095 7) Services 2,237 2,612 8) Rent/lease ) Personnel costs a) salaries and wages 2,266 2,980 b) social contributions c) employees leaving indemnity d) pensions and similar obligations e) other expenses ,928 3,862 10) Depreciation and value adjustments a) depreciation of intangible assets b) depreciation of tangible assets c) others depreciation d) write down of accounts receivable recorded among current assets and liquid assets ) Changes in raw materials, subsidiary materials, 237 (833) consumables and goods 13) Other accruals ) Miscellaneous running costs Total costs 23,852 25,662 Difference between revenues and expenses(a-b) (469) (101) C) Financial income and costs 15) Financial income from investments 9 16) Other financial income: d) other income: - other income ) Interest and other financial costs: - others financial costs (121) (161) (161) (161) 17-bis) Exchange profit and loss (48) 215 Total financial income and costs (149) 70 26

28 D) Value adjustments of financial assets 18) Write-ups 19) Write downs: - a) of shareholdings b) of financial assets 11 Total value adjustments to financial assets 11 E) Extraordinary income and costs 20) Income: - appreciation from alienation 6 - other extraordinary income 36 5,099 21) Expenses: - depreciation from alienation (52) 42 5,099 - other extraordinary costs (114) (921) (166) (921) Total extraordinary income and costs (124) 4,178 27

29 Profit before taxes (A-B±C±D±E) (753) ) Taxes on the income for the year a) Current taxes b) Deferred taxes (235) 361 (97) ) Profit (loss) of the year (656) 3,206 - Profit (loss) of the year of third parties Profit (loss) of the year of the group (672) 3,124 The President of the Board of Directors Giovanbattista Laghezza 28

30 Disclaimer This annual report contains forward-looking statements that reflect the current opinions of the management of UR Holding S.p.A. regarding future events. Such forward-looking statements include all statements in this report that express or are based on intentions, assumptions, expectations or predictions made by the Company. These statements are based on the plans, estimates and forecasts currently available to the management of UR Holding S.p.A., and hence refer only to the date on which they are made. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual developments to differ materially from such forward-looking statements or the results they imply. UR Holding S.p.A. assumes no obligation to update such statements to reflect new information or future events, nor does it intend to provide such updates. This Report is not an offer to sell according to 2 Abs. 4 WpPG or the solicitation of an offer to buy any securities. In case of inconsistencies, the German-language version of the Notes shall be decisive. The English version of the annual report 2015 and the consolidated financial statement of the UR Holding S.p.A. is a one-to-one translation of the audited Italian consolidated financial statement. The English version is not audited. Imprint: UR Holding S.p.A. Viale Edison, Trezzano S/N (MI) Italy For investor-related questions please contact: Mr. Stefan Haas Managing Director Phone: Fax: corporate@ur-group.com 29