DRAFT Interim Financial Report at 30 September 2016

Transcription

1 D R A F T DRAFT Interim Financial Report at 30 September 2016

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3 Interim Financial Report at 30 September 2016 Zignago Vetro SpA Registered office: Fossalta di Portogruaro (VE), Via Ita Marzotto n. 8 Share Capital: Euro 8,800,000 fully paid-in Tax and Venice Companies Register No.:

4 Contents Group Structure pag. 3 Company Bodies pag. 5 Directors Report: - The Zignago Vetro Group pag. 8 - The Company Zignago Vetro SpA pag The Consolidated Subsidiaries pag Significant events after 30 September 2016 pag Outlook pag. 66 Consolidated Interim Financial Statements at 30 September 2016: - Consolidated Statement of Financial Position pag Consolidated Income Statement pag Consolidated Statement of Comprehensive Income pag Consolidated Statement of Cash Flows Pag Statement of Changes in Consolidated Equity pag Notes to the Financial Statements pag. 74 Statement as per Article 154-bis, paragraph 2 of Leg. Decree 58/1998 pag. 85 2

5 STRUCTURE OF THE ZIGNAGO VETRO GROUP AT 9 NOVEMBER 2016 ACTIVITIES AND SHAREHOLDINGS ZIGNAGO VETRO SpA PRODUCTION AND SALES OF HOLLOW GLASS CONTAINERS 100% 50% 100% VERRERIES BROSSE SAS PRODUCTION AND SALE OF GLASS BOTTLES FOR LUXURY FRAGRANCES VETRI SPECIALI SpA PRODUCTION AND SALES OF SPECIALITY HOLLOW GLASS CONTAINERS HUTA SZKŁA CZECHY S.A. PRODUCTION AND SALE OF HOLLOW GLASS CONTAINERS 100% ZIGNAGO GLASS USA Inc. GLASS CONTAINERS SALES AGENCY VETRECO Srl TREATMENT AND SALE OF RECYCLED GLASS 30% 3

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7 COMPANY BODIES Board of Directors Board of Statutory Auditors in office for the three-year period in office for the three-year period chairman Paolo Giacobbo vice chairman Nicolò Marzotto chief executive officer Paolo Giacobbo statutory auditors Alberta Gervasio - chairman Carlo Pesce Stefano Meneghini alternate auditors Cesare Conti Chiara Bedei directors Alessia Antonelli Ferdinando Businaro Giorgina Gallo Franco Grisan Daniela Manzoni Gaetano Marzotto Luca Marzotto Stefano Marzotto Franco Moscetti Manuela Romei Supervisory Board Alessandro Bentsik - chairman Massimiliano Agnetti Nicola Campana Independent Audit Firm Control and Risks Committee for the period Alessia Antonelli Luca Marzotto Giorgina Gallo Remuneration Committee Franco Moscetti Stefano Marzotto Daniela Manzoni KPMG SpA Management industrial director & deputy general manager Ovidio Dri chief financial officer and investor relations manager Roberto Celot Committee for Transactions with Related Parties commercial management Biagio Costantini Stefano Bortoli Manuela Romei Ferdinando Businaro Alessia Antonelli Lead Independent Director Franco Moscetti 5

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9 Directors Report 7

10 THE ZIGNAGO VETRO GROUP The Zignago Vetro Group operates in the production and marketing of high quality hollow glass containers prevalently for the Food and Beverage, Cosmetics and Perfumery and Specialty Glass sectors (highly customised glass containers in small batches, typically used for wine, liquors and oils). The Zignago Vetro Group utilises a business-to-business model supplying containers to its clients, which are then used in their respective industrial activities. Specifically, in the Italian market, the Group is one of the leading producers and distributors of glass containers for the food and beverage sector, while at international level it has a strong market share in the cosmetics and perfumery and specialty glass sectors. * * * The Interim Report for the period ended 30 September 2016, unaudited, was prepared in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board ( IASB ) and approved by the European Union in accordance with Regulation No. 1606/2002 ( IFRS ). The Interim Report at 30 September 2016 is prepared in accordance with IAS 34 Interim Reporting and Article 154-ter of the CFA, following the summary form permitted under the standard. This Interim Report therefore does not include all the information published in the annual report and must be read together with the financial statements at 31 December 2015 for full and complete disclosure of the Group accounts. In particular, the accounting principles adopted for the preparation of the Interim Report for the period ended 30 September 2016 are the same as those utilised for the consolidated financial statements of the Zignago Vetro Group for the year ended 31 December 2015 and were applied consistently for all periods presented, except for the adoption of the new standards, amendments and interpretations approved by the IASB and approved for adoption in Europe and obligatory for accounting periods beginning 1 January

11 We recall that IFRS 11 - Joint arrangements, applicable for the Group from 1 January 2014, replaces IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities non-monetary contributions by venturers, and identifies, on the basis of the rights and obligations of the participants, two types of agreements - joint operations and joint ventures - and governs the consequent accounting treatment to be adopted for recognition in the financial statements, removing the option to consolidate jointly controlled companies proportionally and requiring joint subsidiaries defined as joint ventures to be recognised at equity. In the Consolidated Financial Statements to the Interim Report for the period ended 30 September 2016 and for the comparative financial statements at 30 September 2015 and the annual financial statements at 31 December 2015, the Group recognised the investments held in Vetri Speciali and Vetreco, which are classified as joint ventures, under the equity method, instead of the proportional consolidation method. However, in the Directors Report to the Interim Report (and subsequent comments) the figures are based on the management view of the Group business, which provides for the proportional consolidation of the joint venture, in continuity with the accounting policies adopted until 31 December These figures however must not be considered as an alternative to those as per IFRS, but rather exclusively for supplementary disclosure and reflective of management s view of the business. For this purpose, a reconciliation of the Statement of Financial Position and of the Income Statement, prepared according to IFRS in force from 1 January 2014 and those in force at 31 December 2013 in line with management s view, is provided in the Interim Report. Pursuant to CONSOB communication DEM of 28 July 2006 and ESMA/2015/1415 recommendations on alternative performance indicators utilised by the Parent - which although not specifically defined by IAS/IFRS are considered particularly useful to monitor the business performance - we provide the following information: - net financial debt is defined by the Company as the sum of short-term financial payables, cash and cash equivalents and medium-long term financial payables, net of cash and cash equivalents and current financial assets. This net figure is the same as the net financial position as per CONSOB communication No. DEM/ of 28 July 2006; 9

12 - value of production: the Company defines this as the arithmetical sum of revenues and the change in finished product, semi-finished product, and work-in-progress inventories and the internal production of fixed assets; - value added: the Company defines this as the difference between value of production and raw materials consumed (purchase costs plus or minus the change in raw materials inventories and costs for outside services); - EBITDA: the Company defines this as a difference between value added and payroll and employee benefit costs (including those of temporary workers), plus the result of the investments in joint ventures under the equity method. EBITDA is a measure utilised by the issuer to monitor and measure operating performance although not an accounting measure as per IFRS. The measurement criteria of this indicator may not be in line with that utilised by other entities and therefore it may not be entirely comparable. Within this context the issuer utilised a calculation model in line with its core business which included the effects deriving from the application of IFRS 11. The company considers the results deriving from its holdings in joint ventures as operating items and non-financial items of the Group s business, related to a clearly defined investment strategy and as such classified within the Group s nine months operating results; - EBIT: the Company defines this as the difference between Ebitda and depreciation & amortisation of tangible assets plus provisions & write-downs, including allowance for bad debts; - Operating profit: this performance measure is also contained in IFRS and is defined as the difference between EBIT and the net balance of non-recurrent operating costs and income. We point out that this latter item includes incidental income and costs, capital gains and losses on asset disposals, insurance indemnities and other minor positive and negative items; - Free cash flow: the Company defines this as the sum of the operating cash flow generated from self-financing and cash flow deriving from investment operations. 10

13 The figures reported in the tables of the Interim Report are expressed for greater clarity in thousands of Euro. The comments in the Report are expressed in millions of Euro, except where otherwise specified. * * * The Zignago Vetro Group, according to management s view, operates through six Business Units, each being a separate legal entity. Given this, information concerning the operating performance of the various business segments and geographical areas (segment reporting as per IFRS 8) is included in the illustration of the financial reporting data for each company and is an integral part of the Interim Report. Segment reporting which coincides with the various legal entities is provided below, independently of the respective consolidation method applied. Disclosure by region is not considered appropriate for the Group. The operating segments ( Business Units ) are identified as follows: - Zignago Vetro SpA: this Business Unit carries out the production of glass containers for food and beverages and for cosmetics and perfumery; - Zignago Glass USA Inc.: this Business Unit carries out the sales promotion of glass containers for food and beverages and for cosmetics and perfumery in North America; - Verreries Brosse SAS: this Business Unit carries out the production of glass containers for perfumes; - Vetri Speciali SpA: this Business Unit includes the production of specialty containers, principally for wine, spirits, vinegar and olive oil; - Huta Szkla Czechy SA: this Business Unit undertakes the production of a wide range of customised products for cosmetic and perfumery containers and also for food and beverage niche markets worldwide; - Vetreco Srl: this Business Unit is engaged in the processing of raw glass into the finished material ready for use by glassmakers. 11

14 The consolidation scope of the Zignago Vetro Group at 30 September 2016 and 2015 and at 31 December 2015 was as follows: - Zignago Vetro SpA (parent) The companies consolidated under the line-by-line method are as follows: - Verreries Brosse SAS: - Huta Szkła Czechy S.A. (HSC SA) - Zignago Glass USA Inc. The companies valued under the equity method are the following: - Vetri Speciali SpA - Vetreco Srl The consolidation principles, including the percentage holdings held by Zignago Vetro S.p.A. are outlined in the paragraph accounting principles and policies in the notes to the consolidated financial statements. In the Directors Report, as previously stated, the figures are based on the management view of the Group business, which provides for the proportional consolidation of joint ventures, in continuity with the accounting policies adopted until 31 December

15 Significant events in the first nine months of 2016 Distribution of dividends The Shareholders Meeting of Zignago Vetro SpA on 28 April 2016 approved the distribution of a dividend of Euro per share, totalling Euro 20.3 million, with payment date of 11 May Treasury shares On 28 April 2016 the Shareholders Meeting of Zignago Vetro SpA revoked, for the part not executed, the resolution granted in favour of the Board of Directors to purchase and sell treasury shares as approved by the Shareholders Meeting of 28 April 2015 and authorised the Board of Directors to purchase and sell treasury shares for a maximum number whose total nominal value, including any shares held by subsidiaries, must not exceed one-fifth of the share capital. The new authorisation is proposed for a period of 18 months, commencing from 28 April The minimum purchase price shall not be less than 20%, and the maximum price not more than 20%, of the share price registered on the trading day prior to each operation; the disposal price shall not be 20% higher or lower than the share price registered on the trading day prior to each operation. These price limits will not be applied where the sale of shares is to employees, including management, executive directors and consultants of Zignago Vetro and its subsidiaries in relation to incentive stock option plans. Within the share buy-back programme reported above, at 30 September 2016, 1,421,390 treasury shares, taking account of the number of treasury shares held and of the effect from the Scrip issue approved on 23 April 2012, had been acquired, corresponding to 1.615% of the share capital, for a payment of Euro 5 million. In the first nine months of 2016, no treasury shares were sold or acquired. 13

16 Zignago Vetro Group Operating Performance In 2016, Beverage and Food glass container demand in Italy and Europe continued to steadily develop, supported by improved consumption levels, in particular on segments driven by finished product export demand. The global Perfumery markets expanded further, with divergent performances across the various regions. The Luxury segment of the Perfumery market continued to feature excess supply, against demand which - although improving - stemmed mainly from long-standing products, with very few new launches. Demand in some Cosmetics sector segments fell significantly at a global level, due to a reduced sell out in a number of countries (in particular for nail varnish containers), impacted in part by socio-political conditions in certain regions. The skincare segment continued to grow. 14

17 Consolidated revenues of the Zignago Vetro Group for the third quarter of 2016 amounted to Euro 77.8 million (+0.3% on the same period of the previous year: Euro 77.5 million); in the first nine months of 2016 revenues amounted to Euro million, +2.6% on the same period of 2015 (Euro million). Material costs and external services, including changes in inventories and internal production of fixed assets, in the third quarter of 2016 amounted to Euro 40.8 million (52.4% of revenues), -5.1% compared to Euro 43 million (55.4% of revenues) in Q3 2015; in the first nine months of 2016, these costs amounted to Euro million compared to Euro 130 million (+0.5%), with a reduced percentage on revenues from 54.6% to 53.5%. The consolidated added value in the third quarter of 2016 increased 7.1% (Euro 37 million compared to Euro 34.5 million for the same period of the preceding year) and the added value margin rose from 44.6% to 47.6%. In the first nine months of 2016, this indicator amounted to Euro million, increasing +5% on the same period of the previous year (Euro million). The margin increased from 45.4% to 46.5%. Personnel expense in the third quarter of 2016 totalled Euro 18.4 million compared to Euro 17.4 million in 2015 (+5.8%), accounting for 23.7% of revenues compared to 22.5%. In 9M 2016 personnel expense totalled Euro 56.4 million compared to Euro 53.7 million (+0.4%) in the same period of the previous year, accounting for 23.1% of revenues compared to 22.6% in The increase in the first nine months of the current year is principally related to higher wage costs. The Consolidated EBITDA in the third quarter of 2016 was Euro 18.5 million compared to Euro 17.1 million in the third quarter of 2015 (+8.3%) a margin of 23.8% compared to 22.1% in Q The 9M consolidated EBITDA amounted to Euro 57.2 million compared to Euro 54.4 million in the first nine months of 2015 (+5.1%). The revenue margin was 23.4% compared to 22.8% in The Consolidated EBIT in the third quarter of 2016 amounted to Euro 10 million compared to Euro 8.4 million in Q (+19.6%). In the first nine months of 2016 the consolidated EBIT totalled Euro 31.2 million compared to Euro 28.7 million in the same period of the previous year (+8.8%). The margin increased from 10.8% to 12.9% in the third quarter and from 12% to 12.8% in the first nine months of 2015 compared to

18 The consolidated operating profit in the third quarter of 2016 decreased 7.9% (Euro 9.9 million compared to Euro 10.8 million in Q3 2015, which included an insurance reimbursement against damages incurred in a preceding year), with the margin decreasing to 12.7% from 13.8%. The operating profit for the first nine months of 2016 reduced on the same period of the previous year by 1.3% (Euro 31.6 million compared to Euro 32 million), with the margin decreasing from 13.4% in the first nine months of 2015 to 12.9%. The consolidated profit in the third quarter of 2016 amounted to Euro 6.4 million (8.2% of revenues) compared to Euro 6.2 million and 8% of revenues in the same period of the previous year (+2.8%). The net profit for the first nine months of the year amounted to Euro 18.9 million, decreasing 2% on Euro 19.3 million in the first nine months of 2015, while the margin amounted to 7.8% (8.1% in the previous year). The tax-rate in the first nine months was 33.3%, compared to 33.7% in The cash flow generated from the net profit and amortisation/depreciation in the first nine months of the year amounted to Euro 44.1 million (18% of revenues) compared to Euro 44.4 million (18.6% of revenues) in the same period of the previous year. 16

19 The key data of the reclassified consolidated income statement of the Zignago Vetro Group in Q and 2015, according to management s view, as described previously, are shown below. Q Q Change Euro thou. % Euro thou. % % Revenues 77, % 77, % 0.3% Changes in finished and semi-finished products and work in progress 4, % 1, % n.a. Internal production of fixed assets % % (33.4%) Value of production 82, % 79, % 4.0% Cost of goods and services (45,223) (58.2%) (44,503) (57.4%) 1.6% Value added 36, % 34, % 7.1% Personnel expense (18,440) (23.7%) (17,423) (22.5%) 5.8% EBITDA 18, % 17, % 8.3% Amortisation & Depreciation (8,331) (10.7%) (8,541) (11.0%) (2.5%) Accruals to provisions (218) (0.3%) (217) (0.3%) 0.5% EBIT 9, % 8, % 19.6% Net recurring non-operating income (117) (0.2%) 2, % n.a. O perating Profit 9, % 10, % (7.9%) Net financial expense (578) (0.7%) (1,210) (1.6%) (52.2%) Net exchange gains/(losses) % (66) --- n.a. Profit before taxes 9, % 9, % 0.3% Income taxes (3,123) (4.0%) (3,267) (4.2%) (4.4%) (Tax-rate 2016: 33 %) (Tax-rate 2015: 34.6%) Profit for the period 6, % 6, % 2.8% Consolidated Revenues for Q and 2015 were as follows: (Euro thousands) Q Q Cge. % Zignago Vetro SpA 46,379 45, % Verreries Brosse SAS and its subsidiaries 11,310 11,666 (3.1%) Vetri Speciali SpA 15,753 15,996 (1.5%) HSC SA 5,443 5, % Zignago Glass USA n.s. Vetreco Srl % Total aggregate 79,914 79, % Intercompany revenue elimination (2,147) (1,797) 19.5% Total 77,767 77, % 17

20 The key data of the reclassified consolidated income statement of the Zignago Vetro Group in 9M 2016 and 2015, according to management s view, as described previously, are shown below. Revenues Change Euro thou. % Euro thou. % % 244, % 238, % 2.6% Changes in finished & semi-finished products & work in progress 2, % 6, % n.s. Internal production of fixed assets % 1, % (25.7%) Value of production 247, % 245, % 0.8% Cost of goods and services (134,090) (54.9%) (137,577) (57.8%) (2.5%) Value added 113, % 108, % 5.0% Personnel expense (56,408) (23.1%) (53,736) (22.6%) 5.0% EBITDA 57, % 54, % 5.1% Amortisation & Depreciation (25,162) (10.3%) (25,036) (10.5%) 0.5% Accruals to provisions (807) (0.3%) (659) (0.3%) 22.5% EBIT 31, % 28, % 8.8% Net recurring non-operating income % 3, % (88.5%) O perating Profit 31, % 32, % (1.3%) Net financial expense (3,033) (1.2%) (2,896) (1.1%) 4.7% Net exchange rate gains/(losses) (122) (0.1%) n.s. Profit before taxes 28, % 29, % (2.6%) Income tax & IRAP (9,470) (3.8%) (9,845) (4.2%) (3.8%) (Tax-rate 2016: 33,3%) (Tax-rate 2015: 33,7%) Consolidated profit for the period 18, % 19, % (2.0%) Profit for the period 9M M , % 19, % (2.0%) Consolidated Revenues for 9M 2016 and 2015 are reported below: (Euro thousands) 9M M 2015 Cge. % Zignago Vetro SpA 139, , % Verreries Brosse SAS and its subsidiaries 38,923 39,795 (2.2%) Vetri Speciali SpA 51,817 52,701 (1.7%) HSC SA 16,839 16, % Zignago Glass USA n.s Vetreco Srl 2,896 2, % T otal aggregate 250, , % Intercompany revenue elimination (6,275) (5,728) 9.5% T otal 244, , % 18

21 Consolidated Revenues breakdown by geographic area: (Euro thousands) Q3 9M Change % Change % Italy 49,948 48, % 153, , % European Union (Italy excl.) 22,731 23,191 (2.0%) 73,904 73, % Other segments 5,088 5,859 (13.2%) 16,727 17,855 (6.3%) Total 77,767 77, % 244, , % Group revenues outside Italy, net of inter-company sales, for the first nine months amounted to Euro 90.6 million, compared to Euro 91.1 million in the first nine months of 2015 (-0.5%) and account for 38.1% of total revenues (first nine months 2015: 38.3%). The third quarter figures are summarised below: (Euro thousands) Q3 9M Change % Change % Zignago Vetro SpA 8,743 10,092 (13.4%) 28,815 29,631 (2.8%) Verreries Brosse SAS and its subsidiary 10,861 11,007 (1.3%) 36,938 36, % Vetri Speciali SpA 4,191 4,259 (1.6%) 13,105 13,881 (5.6%) HSC SA 4,024 3, % 11,773 10, % Total 27,819 29,050 (4.2%) 90,631 91,080 (0.5%) % of revenues 35.9% 37.5% 38.1% 38.3% The consolidated net profit for the third quarter and the first nine months of 2016 and 2015 was as follows: (Euro thousands) Change % Change % Zignago Vetro SpA 3,465 5,062 (31.5%) 19,584 18, % Verreries Brosse SAS and its subsidiary Q3 (647) (1,388) (53.4%) (2,445) (702) n.a. Vetri Speciali SpA 3,114 2, % 9,954 9, % HSC SA 447 (294) n.a. 1, % Zignago Glass USA (44) (40) 10.0% (138) (64) n.a. Vetreco Srl 43 (114) n.a. (115) (292) n.a. Total aggregate 6,378 6, % 28,003 27, % Consolidation adjustments (25) (27) n.a. (9,056) (8,366) 8.2% 9M Profit for the period 6,353 6, % 18,947 19,339 (2.0%) The consolidation adjustments at 30 September 2016 and 2015 relate principally to the elimination of the Vetri Speciali SpA dividends (Euro 9.1 million in 2016, Euro 8.4 million in 2015). 19

22 The key data of the reclassified consolidated income statement of the Zignago Vetro Group in Q and 2015, based on the application of international accounting standards, and therefore IFRS 11, are illustrated below: Q Q Change Euro thou. % Euro thou. % % Revenues 61, % 61, % 0.7% Changes in finished and semi-finished products and work in progress 2, % (31) (0.1%) n.a. Internal production of fixed assets % % (33.4%) Value of production 64, % 61, % 4.8% Cost of goods and services (36,938) (60.0%) (35,796) (58.5%) 3.2% Value added 27, % 25, % 7.1% Personnel expense (14,509) (23.5%) (13,953) (22.9%) 4.0% Effect of measurement of JV using Equity method 3, % 2, % 10.2% EBITDA 16, % 14, % 10.7% Amortisation & Depreciation (7,255) (11.9%) (7,305) (11.9%) (0.7%) Accruals to provisions (206) (0.3%) (154) (0.3%) 33.8% EBIT 8, % 7, % 21.7% Net recurring non-operating income (297) (0.4%) 2, % n.a. O perating Profit 8, % 9, % (9.3%) Net financial expense (481) (0.8%) (1,078) (1.8%) (55.4%) Net exchange gains/(losses) % (86) (0.1%) n.a. Profit before taxes 8, % 8, % (0.1%) Income taxes (1,757) (2.9%) (1,936) (3.2%) (9.2%) (Tax-rate 2016: 21.7 %) (Tax-rate 2015: 23.8%) Profit for the period 6, % 6, % 2.8% 20

23 For a better understanding of the results for Q3 2016, stated in accordance with management s view, a reconciliation is provided below of the reclassified income statement between the version which values the investments in joint ventures at equity and the version utilising the proportional consolidation method, as adopted by the Group until 31 December 2013: Q IAS / IFRS Vetri Speciali SpA Proportional consolidation Vetreco Srl Adjustment to Parent policies Neutralisation JV under the equity method Q pre- IFRS 11 (management view ) Euro thou. Euro thou. Euro thou. Euro thou. Euro thou. Euro thou. Revenues 61,586 15, (261) (276) 77,767 Changes in finished & semifinished products & work in progress 2,631 1, ,175 Internal production of fixed assets Value of production 64,482 16,975 1, (276) 82,207 Cost of goods and services (36,938) (7,844) (717) (45,223) Value added 27,544 9, ,984 Personnel expense (14,509) (3,829) (102) (18,440) Effect of measurement of JV using Equity method 3, (3,138) --- EBITDA 16,173 5, (3,138) 18,544 Amortisation & Depreciation (7,255) (998) (78) (8,331) Accruals to provisions (206) (12) (218) EBIT 8,712 4, (3,138) 9,995 Net recurring non-operating income (297) (44) --- (117) Operating Profit 8,415 4, (28) (3,138) 9,878 Net financial expense (481) (59) (38) (578) Net exchange rate gains/(losses) Profit before taxes 8,110 4, (28) (3,138) 9,476 Income tax & IRAP (1,757) (1,343) (32) (3,123) Consolidated profit for the period 6,353 3, (19) (3,138) 6,353 Profit for the period 6,353 3, (19) (3,138) 6,353 21

24 The key data of the reclassified consolidated income statement of the Zignago Vetro Group in 9M 2016 and 2015, based on the application of international accounting standards, and therefore IFRS 11, are illustrated below: 9M M 2015 Change Euro thou. % Euro thou. % % Revenues 191, % 184, % 3.6% Changes in finished & semi-finished products & work in progress 1, % 6, % n.s. Internal production of fixed assets % 1, % (25.7%) Value of production 193, % 191, % 0.7% Cost of goods and services (108,518) (56.8%) (110,997) (60.2%) (2.2%) Value added 84, % 80, % 4.8% Personnel expense (44,558) (23.3%) (42,961) (23.2%) 3.7% Effect of measurement of JV using Equity method 9, % 9, % 5.8% EBITDA 49, % 47, % 6.0% Amortisation & Depreciation (22,007) (11.5%) (21,638) (11.7%) 1.7% Accruals to provisions (670) (0.4%) (511) (0.3%) 31.1% EBIT 27, % 24, % 9.3% Net recurring non-operating income (325) (0.1%) 2, % n.s. O perating Profit 26, % 27, % (1.5%) Net financial expense (2,715) (1.4%) (2,475) (1.3%) 9.7% Net exchange rate gains/(losses) (126) (0.1%) n.s. Profit before taxes 24, % 24, % (3.3%) Income tax & IRAP (5,073) (2.7%) (5,505) (3.0%) (7.8%) (Tax-rate 2016: 21.1 %) (Tax-rate 2015: 22.2%) Consolidated profit for the period 18, % 19, % (2.0%) Profit for the period 18, % 19, % (2.0%) 22

25 For a better understanding of the results for 9M 2016, stated in accordance with management s view, a reconciliation is provided below of the reclassified income statement between the version which values the investments in joint ventures at equity and the version utilising the proportional consolidation method, as adopted by the Group until 31 December 2013: 9M 2016 Vetri IAS/ IFRS Speciali SpA Proportional consolidation Vetreco Srl Adjustment to Parent principles Neutralisation JV under the equity method 9M 2016 pre- IFRS 11 (management view) Euro thou. Euro thou. Euro thou. Euro thou. Euro thou. Euro thou. Revenues 191,106 51,817 2,896 (892) (681) 244,246 Changes in finished and semifinished products and work in progress 1, ,596 Internal production of fixed assets Value of production 193,081 52,348 2, (681) 247,656 Cost of goods and services (108,518) (23,890) (2,363) (134,090) Value added 84,563 28, ,566 Personnel expense (44,558) (11,536) (314) (56,408) Effect of measurement of JV using Equity method 9, (9,858) --- EBITDA 49,863 16, (9,858) 57,158 Amortisation & Depreciation (22,007) (2,924) (231) (25,162) Accruals to provisions (670) (137) (807) EBIT 27,186 13, (9,858) 31,189 Net recurring non-operating inc. (325) O perating Profit/(loss) 26,861 14, (9,858) 31,572 Net financial expense (2,715) (205) (113) (3,033) Net exchange gains/(losses) (126) (122) Profit/(loss) before taxes 24,020 14,340 (113) 28 (9,858) 28,417 Income taxes (5,073) (4,386) (2) (9) --- (9,470) Consolidated net profit/(loss) 18,947 9,954 (115) 19 (9,858) 18,947 Profit/(loss) for the period 18,947 9,954 (115) 19 (9,858) 18,947 23

26 Statement of financial position The reclassified consolidated statement of financial position at 30 September and 30 June 2016 and at 31 December and 30 September 2015 of the Zignago Vetro Group, prepared according to management s view described previously, is as follows: Euro thou. Euro thou. Euro thou. Euro thou. Trade receivables 63,901 72,265 66,674 61,210 Other receivables 14,247 13,085 14,870 11,805 Inventories 79,239 73,961 77,222 74,793 Current non-financial payables (73,941) (67,196) (70,934) (68,765) Payables on fixed assets (11,097) (9,393) (7,975) (7,886) A) Working capital 72,349 82,722 79,857 71,157 Net tangible and intangible assets 177, , , ,128 Goodwill 40,799 40,780 40,808 40,692 Other equity investments and non-current assets 6,848 6,701 8,133 9,227 Non-current provisions and non-financial payables (17,872) (17,761) (18,186) (18,641) B) Net fixed capital 207, , , ,406 A+B= Net capital employed 279, , , ,563 Financed by: Current loans and borrowings 113, , ,989 94,182 Cash and cash equivalents (91,978) (79,217) (103,542) (95,818) Current net debt 21,066 30, (1,636) Non-current loans and borrowings 114, , , ,326 C) Net financial debt 135, , , ,690 Opening equity 145, , , ,766 Dividends (20,346) (20,346) (17,316) (17,316) Change in translation reserve & other eq. changes (193) (621) Cash Flow Hedge reserve Profit for the period 18,947 12,594 29,046 19,339 D) Closing equity 144, , , ,873 C+D = Total financial debt and equity 279, , , ,563 The working capital decreased 9.4% (Euro 7.5 million) compared to 31 December 2015 and decreased 12.5% (Euro 10.4 million) compared to 30 June Trade receivables reduced by 4.2% (Euro 2.8 million) compared to the end of 2015 and reduced by 11.6% (Euro 8.4 million) compared to 30 June Inventories increased on the end of 2015 Euro 2 million and by Euro 5.3 million on 30 June Current non-financial payables increased Euro 3 million compared to 31 December 2015 and by Euro 6.7 million compared to 30 June Payables on fixed assets increased 39.1% (Euro 3.1 million) compared to 31 December 2015 and 18.1% (Euro 1.7 million) compared to 30 June

27 Net fixed capital at 30 September 2016 increased compared to 31 December 2015 by Euro 12.3 million. Tangible and intangible asset investment by the Zignago Vetro Group in the first nine months of 2016 amounted to Euro 41.9 million, of which Euro 17 million in the third quarter. In the same period of the previous year, capital investments amounted to Euro 37 million, of which Euro 9.6 million in the third quarter. Investments in the first nine months of 2016 and 2015 concerned in particular: - Zignago Vetro SpA for Euro 10.6 million (Euro 28.7 million in the same period of 2015) mainly for industrial plant, machinery, and equipment, including moulds; - Verreries Brosse SAS for Euro 2 million (Euro 2.7 million in the first nine months of 2015) principally for plant and industrial equipment replacement, including moulds; - Vetri Speciali SpA, for its share, for Euro 15.6 million (Euro 1.4 million in the first nine months of 2015) for plant and equipment, including moulds; - Huta Szkła Czechy SA for Euro 13.6 million for plant and equipment (Euro 4.1 million in 9M 2015), including moulds; - Vetreco Srl, for its share, for Euro 0.1 million (Euro 0.1 million in the first nine months of 2015) concerning scheduled investment. Consolidated equity, including the net result for the first nine months of the year, amounted at 30 September 2016 to Euro million compared to Euro million at 31 December 2015 (- 1%) and Euro million at 30 June 2016 (+4.7%). The reduction on 31 December 2015 of Euro 1.5 million is due to a consolidated profit for the period (Euro 18.9 million) lower than the dividend distributed (Euro 20.3 million) and the change in the translation reserve (- Euro 0.1 million). The Zignago Vetro Group workforce at 30 September 2016 numbered 2,128 compared to 1,914 at 30 September At 30 June 2016 there were 2,084 employees while at 31 December 2015 employees numbered 1,975. The employees of Vetri Speciali SpA and its subsidiaries and of Vetreco Srl have been fully incorporated. The composition of Group personnel at 30 September 2016 is shown in the table below: Composition Executives Managers White-collars Blue-collars Men (number) Women (number) of which: - open ended contracts term contracts Average age Years worked

28 The net financial debt, again according to management s view as outlined in the introduction, at 30 September 2016 was Euro million, increasing Euro 6.3 million (+4.8%) on Euro 129 million at 31 December 2015 and reducing Euro 9 million (-6.2%) on 30 June The cash flow movements affecting the consolidated net financial position in the third quarter and in the first nine months of the year compared with the same periods in the previous year were as follows: (Euro thousands) Net financial debt at end of preceding period Q M 2016 Q M 2015 (144,199) (128,960) (129,607) (107,749) Self-financing: - profit for the period 6,353 18,947 6,182 19,339 - amortisation & depreciation 8,331 25,162 8,541 25,036 - accruals to provisions, net of utilisations 111 (314) (38) 1,162 - net gains/(losses) on sale of property, plant & equipment 2 (239) --- (290) 14,797 43,556 14,685 45,247 Decrease (increase) in working capital 10,373 7,508 (1,393) (10,704) Investments in property, plant and equipment (17,053) (41,883) (9,577) (36,996) Investments in intangible assets 91 (17) 7 (13) Net Decrease (increase) in other non-current assets Book value of property, plant and equipment sold (147) 1,285 (921) (1,509) 1,203 3,488 1,064 3,266 (5,533) (29,619) (10,820) (45,956) Free cash flow 9,264 13,937 3,865 (709) Distribution of dividends --- (20,346) --- (17,316) Effect on equity of translation of foreign currency financial statements & other changes (277) Decrease in net financial debt Net financial debt 8,987 (6,252) 3,917 (17,941) (135,212) (135,212) (125,690) (125,690) 26

29 The table below shows the composition of the consolidated net financial position, on the basis of management s view, at 30 September and 30 June 2016 and 31 December and 30 September 2015: (Euro thousands) A. Cash B. Other cash equivalents 91,966 79, ,520 95,812 C. Securities held for trading D. Liquidity (A)+(B)+(C) 91,978 79, ,542 95,818 E. Current financial assets F. Current bank loans and borrowings 84,795 83,428 89,783 78,442 G. Current portion of non-current debt 26,102 23,885 12,873 14,674 H. Other current fin. payables 2,147 2,298 1,333 1,066 I. Current financial debt (F)+(G)+(H) 113, , ,989 94,182 J. Net current financial position (I)-(E)-(D) 21,066 30, (1,636) K. Non-current bank loans and borrowings 114, , , ,326 L. Bonds issued M. Other non-current payables N. Non-current financial debt (K)+(L)+(M) 114, , , ,326 O. Net financial debt (J)+(N) 135, , , ,690 27

30 Reconciliation between the Group and Parent net result and equity The reconciliation between the net result for the first nine months of 2016 and the equity at 30 September 2016 of the Parent Company and the consolidated result are summarised below: (Euro thousands) Profit for the period 9M 2016 Equity at Financial statements of the Parent 19,584 95,583 Consolidation adjustments: - interests in joint ventures measured using equity method 9,858 34,844 - reversal of inter-company Profit (19) (46) - reversal of inter-group dividend (9,056) goodwill on acquisition of HSC SA and adjustment to period-end exchange rate Carrying amount of equity investments: ,511 Verreries Brosse SAS --- (4,000) Zignago Glass USA Inc. --- (189) Huta Szkla Czechy SA --- (10,327) --- (14,516) Profit for the period and equity of the subsidiaries Verreries Brosse SAS (2,445) 11,665 Zignago Glass USA Inc. (138) (56) Huta Szkla Czechy SA 1,163 15,990 (1,420) 27,599 Consolidated financial statements 18, ,177 28

31 The reclassified balance sheet of the Zignago Vetro Group at 30 September 2016, according to IFRS in force at the interim reporting date at 30 September 2016, compared with 30 June and 31 December 2015 and 30 September 2015 is reported below: Euro thou. Euro thou. Euro thou. Euro thou. Trade receivables 52,045 57,175 53,476 49,764 Other receivables 11,086 10,372 11,879 9,471 Inventories 68,055 64,217 66,487 64,465 Current non-financial payables (56,724) (53,274) (55,554) (53,732) Payables on fixed assets (6,750) (5,764) (7,320) (7,414) A) Working capital 67,712 72,726 68,968 62,554 Net tangible and intangible assets 134, , , ,196 Goodwill Equity investments measured under the equity method 61,094 57,956 60,292 56,697 Other equity investments and non-current assets 6,278 6,151 7,564 7,804 Non-current provisions and non-financial payables (14,854) (14,771) (15,137) (15,295) B) Net fixed capital 187, , , ,127 A+B= Net capital employed 255, , , ,681 Financed by: Current loans and borrowings 102,334 92,741 92,475 83,008 Cash and cash equivalents (91,598) (79,180) (100,063) (93,840) Current net debt 10,736 13,561 (7,588) (10,832) Non-current loans and borrowings 100, , , ,640 C) Net financial debt 111, , , ,808 D) Non-controlling interest equity Opening equity 145, , , ,766 Dividends (20,346) (20,346) (17,316) (17,316) Other changes in equity (193) (621) Cash Flow Hedge Reserve Profit for the period 18,947 12,594 29,046 19,339 D) Closing equity 144, , , ,873 C+D+E = Total financial debt and equity 255, , , ,681 29

32 For a better understanding of the balance sheet at 30 September 2016, stated in accordance with management s view, a reconciliation is provided below of the version which values the investments in joint ventures at equity and the version utilising the proportional consolidation method, as adopted by the Group until 31 December IAS/IFRS Vetri Speciali SpA Proportional consolidation Vetreco Srl Adjustment to Parent principles Neutralisation JV under the pre-ifrs 11 equity method (management view) Euro thou. Euro thou. Euro thou. Euro thou. Euro thou. Euro thou. Trade receivables 52,045 11, (92) 63,901 Other receivables 11,086 2, ,247 Inventories 68,055 11, (494) ,239 Current non-financial payables (56,724) (15,705) (1,604) (73,941) Payables on fixed assets (6,750) (4,322) (25) (11,097) A) Working capital 67,712 4, (494) ,349 Net tangible and intangible assets 134,758 37,888 4, ,265 Goodwill , ,799 Equity investments measured under the equity method 61, (61,094) --- Other equity investments and noncurrent assets 6, ,848 Non-current provisions and nonfinancial payables (14,854) (3,006) (12) (17,872) B) Net fixed capital 187,989 75,377 4, (61,094) 207,040 A+B= Net capital employed 255,701 80,146 4,975 (339) (61,094) 279,389 Financed by: Current loans and borrowings 102,334 5,654 5, ,044 Cash and cash equivalents (91,598) (265) (115) (91,978) Current net debt 10,736 5,389 4, ,066 Non-current loans and borrowings 100,788 13, ,146 C) Net financial debt 111,524 18,747 4, ,212 D) Non-controlling interest equity Opening equity 145,629 60, (358) (60,292) 145,629 Dividends (20,346) (9,056) ,056 (20,346) Other changes in equity (53) (53) Profit for the period 18,947 9,954 (115) 19 (9,858) 18,947 E) Closing equity 144,177 61, (339) (61,094) 144,177 C+D+E = Total financial debt and equity 255,701 80,146 4,975 (339) (61,094) 279,389 * * * 30

33 Research, development and advertising costs The companies of the Group undertook research and development focused on process and product innovation which resulted in, among other developments, the use of new materials, the introduction of new products and the application of new technical-production solutions for the food and beverages, cosmetics and perfumery and special containers sectors. The Parent also carried out research and development for the design and introduction of new information management systems, including improvements to the process IT set up, in order to create more efficient and effective operating instruments. Therefore, the Company can avail of the tax credit under Law 190/2014, establishing this amount according to the methodologies communicated in the Tax Agency Circular. Environmental information In the first nine months of 2016, the commitment of the companies of the Zignago Vetro Group continued in the protection of the environment with the continual improvement of the policies of territorial protection and management of environmental issues with actions aimed to reduce atmospheric emissions and energy consumption in the utilisation of natural resources and the optimisation of the production cycle, while remaining continually attentive to new and future technology developed internationally. Risks related to personnel, security and management The Companies of the Zignago Vetro Group implement plant management policies to minimise the risk of accidents ensuring high levels of security in line with best industrial practices, utilising insurance to guarantee an extensive degree of protection for company structures, third party risks and interruptions in production activity. The company trains and motivates the workforce to guarantee efficiency and normal operational continuity. Personal data security and protection Pursuant to rule 26 of Attachment B of Legislative Decree No. 196 of 30 June 2003 (Employee data protection code), the Companies of the Group adopted new security measures required by the above-mentioned decree and updated the Security Programming Document. 31

34 Financial instruments: Group objectives & policies and description of risks The main financial instruments used by the Zignago Vetro Group consist of trade receivables and payables, cash & cash equivalents, bank borrowing and interest rate swap and commodity contracts. As regards the Group s financial management, the operating cash flow is considered to be consistent with objectives for repayment of existing debt and such as to assure appropriate financial equilibrium and adequate remuneration of equity via dividend flows. The Zignago Vetro SpA Group had undertaken at 30 September 2016, 6 interest rate swap in order to hedge the interest rate risk on medium-long term loans undertaken by the parent company Zignago Vetro SpA. The mark-to-market of these derivatives at 30 September 2015 were as follows (in Euro): Company Bank Underlying Date Notional Expiry Market of at the value Signing reference date Zignago Vetro SpA Unicredit Loan 31/12/ ,142,857 31/12/2020 (339,166) Zignago Vetro SpA Unicredit Loan 31/03/ ,857,143 31/12/2020 (452,222) Zignago Vetro SpA Mediobanca Loan 21/01/ ,857,143 31/12/2020 (255,927) Zignago Vetro SpA Mediobanca Loan 31/03/ ,142,857 31/12/2020 (341,237) Zignago Vetro SpA Banco Brescia Loan 18/12/ ,169,879 18/12/2019 (191,528) Zignago Vetro SpA BNL Loan 22/12/ ,500,000 22/06/2021 (566,605) Total 111,669,879 (2,146,685) The above-mentioned operations were undertaken for hedging purposes. However these operations do not comply with all the requirements of IAS / IFRS accounting standards to be considered as such for accounting purposes. For these reasons Zignago Vetro SpA does not use the so-called hedge accounting method and records the economic effects of hedging directly to the statement of profit and loss. We consider that the Zignago Vetro Group is not exposed to credit risk any higher than the industry average, given that most receivables relate to customers of well-established commercial reliability and that receivables are insured. Allowance for doubtful debts has in any case been made to cover against any residual credit risks. We specify that such provisions were made in the period and in previous periods against specific positions involved in procedures or with longer past-due status than the Group companies average collection times. General provisions have also been made for potential insolvency of debtors. In relation to the currency risk we report that the Group did not subscribe to any currency hedging instruments and, in accordance with the Group policy up to the present moment, derivative financial instruments are not undertaken for trading purposes. Therefore the Group remains exposed to the currency risk on the assets and liabilities in foreign currencies at year-end, which is not considered significant. A number of Group subsidiaries are located in countries not within the 32

35 Eurozone: United States and Poland. As the Group s functional currency is the Euro, the income statements of these companies are converted into Euro at the average exchange rate and, at likefor-like revenues and margins in the local currency, changes in the exchange rate may impact the value in Euro of revenues, costs and results. Zignago Vetro SpA is exposed to fluctuations in some commodity prices, in particular those relating to energy factors, such as fuel, utilised in the production process. In order to neutralise the price effect, as these fluctuations may significantly impact upon production costs, the Company undertook hedging operations through the use of derivative financial instruments. At 30 September 2016 Zignago Vetro has two commodity swap contracts in place, signed with a primary Italian banking institution, to hedge against the risk in fluctuations in the cost of fuel. The mark-to-market of these derivatives at the date of the present report was Euro +204 thousand, gross of the tax effect. For these operations, Zignago Vetro adopted the so-called hedge accounting method, recording the effects of the mark-to-market changes in a specific equity reserve and not through P&L. The Group s present reference market does not include areas possibly requiring country-risk management. Commercial operations substantially take place in western countries, primarily in the Euro and USD areas. * * * Pursuant to the Bank of Italy/ Consob /Isvap document No. 2 of 6 February 2009 and IAS , it is considered, based on the strong profitability, on the Group s solid balance sheet and in spite of the current economic environment, that there are no uncertainties or risks on the going concern of the business. * * * It is considered that the information provided, together with the information illustrated below and relating to the performance of the individual companies, represents a true, balanced and exhaustive analysis of the situation of the Group and of the operational results, for the overall operations and in the various sectors, in accordance with the size and complexity of the Group s business operations. For greater clarity, the operating results and statements of financial position of the parent and subsidiaries are presented according to the contribution of each of them to the Consolidated Interim Financial Report at 30 September They are shown according to normal reporting practices. 33

36 THE COMPANY Zignago Vetro SpA Beverage and Food glass container demand in Europe continued to develop moderately, supported by improved consumption levels, in particular on segments driven by finished product export. The global Perfumery market again performed well, supported by emerging economy and North American sales, while Europe reported weak sales. Cosmetics demand for nail varnish containers fell significantly at a global level, due to a reduced sell out in a number of countries, impacted in part by socio-political conditions in certain regions. 34

37 The Zignago Vetro SpA reclassified income statement for the third quarter of 2016 compared to the previous year is shown below: Change Euro thou. % Euro thou. % % Revenues 46, % 45, % 2.00% Changes in finished & semi-finished products & work in progress 1, % 2, % n.a. Internal production of fixed assets % % n.a. Value of production 48, % 48, % 0.2% Cost of goods and services (28,653) (61.8%) (28,457) (62.6%) 0.7% Value added 19, % 19, % (0.5%) Personnel expense (8,693) (18.7%) (8,424) (18.5%) 3.2% EBITDA 11, % 11, % (3.2%) Amortisation & Depreciation (5,087) (11.0%) (4,939) (10.9%) 3.0% Accruals to provisions (192) (0.4) (115) (0.3%) n.a. EBIT 5, % 6, % (9.3%) Net recurring non-operating income (254) (0.5%) 2, % n.a. O perating Profit 5, % 8, % n.a. Net financial expense (339) (0.7%) (936) (0.6%) n.a. Net exchange gains/(losses) % (42) (0.1%) n.a. Profit before taxes 5, % 7, % n.a. Income taxes (1,790) (3.9%) (2,518) (5.5%) n.a. (Tax-rate Q3 2016: 34.1%) (Tax-rate Q3 2015: 33.2%) Q Q Profit for the period 3, % 5, % (31.5%) 35

38 The Zignago Vetro SpA reclassified income statement for the first nine months of 2016 compared to the previous year is shown below: 9M M 2015 Change Euro thou. % Euro thou. % % Revenues 139, % 132, % 5.6% Changes in finished & semi-finished products & work in progress 1, % 5, % n.s. Internal production of fixed assets % % n.s. Value of production 142, % 138, % 2.6% Cost of goods and services (81,568) (58.3%) (83,201) (62.8%) (2.0%) Value added 60, % 55, % 9.5% Personnel expense (26,323) (18.8%) (24,801) (18.7%) 6.1% EBITDA 34, % 30, % 12.2% Amortisation & Depreciation (15,262) (10.9%) (14,553) (11.0%) 4.9% Accruals to provisions (449) (0.3%) (248) (0.2%) 81.0% EBIT Net recurring non-operating income O perating Profit 18, % 15, % 17.8% (258) (0.2%) 2, % n.s. 18, % 18, % 0.8% Investment income 9, % 8, % 7.8% Net financial expense (2,350) (1.7%) (1,931) (1.5%) n.s. Net exchange gains/(losses) (32) n.s. Profit before taxes 24, % 24, % 1.4% Income tax & IRAP (5,354) (3.8%) (5,595) (4.2%) (4.3%) (Tax-rate 9M 2016: 21.5%) (Tax-rate 9M 2015: 22.8%) Profit for the period 19, % 18, % 3.1% In the third quarter revenues amounted to Euro 46.4 million, increasing 2% on the same period of 2015 (Euro 45.5 million). Sales of glass containers and accessories increased from Euro 41.6 million in the third quarter of 2015 to Euro 42.7 million in Q (2.7%). Revenues in the first nine months of 2016 amounted to Euro million compared to Euro million in the same period of the previous year (+5.6%). Sales of glass containers and accessories (the latter referring to Zignago Vetro SpA s services on the market) amounted to Euro million compared to Euro million in 9M 2015 (+6.2%). 36

39 Revenues by geographic area, excluding sundry materials and services: (Euro thousands) Q3 9M Cge. % Cge. % Italy 33,510 31, % 99,117 91, % European Union (Italy excluded) 7,358 8,698 (15.4%) 23,285 25,075 (7.1%) Other segments 1,848 1, % 6,540 5, % Total 42,716 41, % 128, , % of which export 9,206 10,419 (11.6%) 29,825 30,416 (1.9%) % 21.6% 25.0% 23.1% 25.0% In the first nine months of the year, exports decreased 1.9% on the same period of 2015, accounting for 23.1% of containers and accessories revenues (25% in 2015). In the third quarter of 2016, exports decreased by 11.6% on Q and accounted for 21.6% of revenues (25% in Q3 2015). Material costs and external services, including changes in inventories and internal production of fixed assets, increased in the first nine months of 2016 on the same period of 2015 from Euro 77.1 million to Euro 79.3 million (+2.8%). These costs as a percentage of revenues were 56.7% (58.2% in 9M 2015). In the third quarter of 2016 these costs increased on Q from Euro 25.6 million to Euro 26.5 million (+13.7%), while as a percentage of revenues increasing from 56.3% to 57.3%. Personnel expense in the first nine months of the year increased compared to the same period of 2015 by +6.1%. Personnel expense as a percentage of revenues were 18.8% compared to 18.7%. In the third quarter of 2016, they rose 3.2% and accounted for 18.7% of revenues (18.5% in 2015). EBITDA in the first nine months of the year amounted to Euro 34.2 million compared to Euro 30.5 million in 2015 (+12.2%) with a revenue margin of 24.5% compared to 23% in the first nine months of In Q EBITDA reduced 3.2% (from Euro 11.5 million to Euro 11.1 million), while the revenue margin decreased from 25.2% to 23.9%. EBIT in the first nine months of 2016 totalled Euro 18.5 million, up 17.8% compared to Euro 15.7 million in the same period of the previous year. The EBIT margin increased from 11.9% in the first nine months of 2015 to 13.2% in the first nine months of The reduction in Q on the same period of 2015 was 9.3% (from Euro 6.4 million to Euro 5.8 million), with the revenue margin decreasing from 14.1% to 12.5%. 37

40 Investment income in the first nine months of the year amounted to Euro 9.1 million and concerns Vetri Speciali SpA dividends (Euro 8.4 million in 2015: +7.8%). The profit before taxes for the first nine months of 2016 was Euro 24.9 million, increasing 1.4% on Euro 24.6 million in the first nine months of The revenue margin reduced to 17.8% from 18.6%. In the third quarter of 2016 the profit before taxes decreased 30.7% (from Euro 7.6 million to Euro 5.3 million), with a profit margin of 11.3% (16.7% in 2015). In the third quarter of 2016 the profit totalled Euro 3.5 million, 31.5% lower than the third quarter of 2015 (Euro 5.1 million) 7.5% of revenues (11.1% in 2015). The profit for the first nine months was Euro 19.6 million compared to Euro 19 million in the first nine months of 2015 (+3.1%) after income taxes respectively of Euro 5.4 million and Euro 5.6 million. The tax-rate for the first nine months of 2016 was 21.5% compared to 22.8% in the first nine months of Cash flow generated from profits and amortisation/depreciation for the nine months ended 30 September 2016 amounted to Euro 34.8 million (Euro 33.5 million in the same period of 2015), + 3.9%. Cash flow as a percentage of revenues was respectively 24.9% and 25.3%. In the third quarter cash flow amounted to Euro 8.5 million compared to Euro 10 million in 2015 (-14.5%). 38

41 The Zignago Vetro SpA reclassified balance sheet at 30 September and 30 June 2016 and at 31 December and 30 September 2015 is as follows: Euro thou. Euro thou. Euro thou. Euro thou. Trade receivables 42,774 43,580 39,664 38,813 Other receivables 7,600 7,266 8,931 6,962 Inventories 44,634 42,077 43,168 40,848 Current non-financial payables (44,349) (40,167) (42,472) (40,538) Payables on fixed assets (3,046) (3,872) (5,613) (5,749) A) Working capital 47,613 48,884 43,678 40,336 Net property, plant & equipment 87,181 89,705 95,034 91,670 Equity investments 40,766 40,766 40,766 40,436 Non-consolidated equity investments & other noncurrent assets 4,006 4,042 5,867 5,919 Non-current provisions & non-financial payables (12,039) (11,980) (12,400) (12,521) B) Net fixed capital 119, , , ,504 A+B = Net capital employed 167, , , ,840 Financed by: Current loans & borrowings 82,158 73,775 73,478 62,720 Cash and cash equivalents (103,599) (89,706) (104,362) (99,210) Current net debt (21,441) (15,931) (30,884) (36,490) Non-current loans & borrowings 93,385 94, , ,784 C) Net financial debt 71,944 78,945 76,740 74,294 Opening equity 96,205 96,205 89,867 89,867 Dividends (20,346) (20,346) (17,316) (17,316) Profit for the period 19,584 16,119 23,543 18,995 Hedging reserve Other changes in equity D) Closing entity 95,583 92,472 96,205 91,546 C+D = Total financial debt & equity 167, , , ,840 The working capital in the first nine months of 2016 increased on 31 December 2015 by Euro 3.9 million (+9%) and in Q decreased by Euro 1.3 million (-2.6%). Trade receivables increased compared to the end of 2015 by Euro 3.1 million, while other receivables decreased Euro 1.3 million; compared to 30 June 2016 respectively reducing Euro 0.8 million and increasing Euro 0.3 million. Inventories increased Euro 1.5 million (+3.4%) compared to 31 December 2015, while increasing Euro 2.6 million compared to 30 June 2016 (+6.1%). Current non-financial payables increased Euro 1.9 million compared to 31 December 2015 and Euro 4.2 million on 30 June 2016; payables on fixed assets reduced Euro 2.6 million on 31 December 2015 and Euro 0.8 million on 30 June 30,

42 Net fixed capital at 30 September 2016 decreased compared to 31 December 2015 Euro 9.4 million, principally concerning capital expenditure (Euro 10.6 million) lower than depreciation provisioned in the same period (Euro 15.3 million). The decrease in equity at 30 September 2016 compared to 31 December 2015 (Euro 0.6 million) reflects the net profit in the period lower than the dividend distributed. Due to that outlined above, the net debt at 30 September 2016 amounted to Euro 71.9 million, Euro 4.8 million lower than 31 December 2015 (-6.3%) and Euro 7 million lower than 30 June 2016 (-8.9%). At 30 September 2016, there were 606 employees (at 31 December 2015 and 30 September 2015 respectively 585 and 602 employees). Market conditions in the first part of the year, although featuring uneven performances among market segments and regions, indicate a substantial maintenance of glass container demand, and results in line with those reported to-date. 40

43 THE CONSOLIDATED SUBSIDIARIES Verreries Brosse SAS Registered office: Vieux-Rouen-sur-Bresle (France) Business sector: glass bottles for luxury fragrances Chairman Board of Directors Paolo Giacobbo Maurizio Guseo - General Manager Roberto Celot Ovidio Dri Alberto Faggion Franco Grisan Maurizio Guseo Nicolò Marzotto Michele Pezza In 2016 the global luxury Perfumery market saw a contained improvement, with sales increasing in the emerging economies and North America, and a slight decrease in Europe. The market continued to feature excess supply, against demand which - although improving - stemmed mainly from long-standing products, with very few new launches. The demand for skincare containers continues to be strong. The container market for quality spirits is stable and has recovered from the decrease in sales on the Chinese market. As already reported results in the first half of the year were impacted by a number of factors, including external, and particularly the repeated strikes called in France in response to the Government s labour market reform initiatives. In the third quarter of the year, the Company saw improved results. 41

44 The Verreries Brosse reclassified consolidated income statement for Q compared to the same period of the previous year is shown below: Q Q Change Euro thou. % Euro thou. % % Revenues 11, % 11, % (3.1%) Changes in finished and semi-finished products and work in progress % (1,425) (12.2%) n.a. Value of production 11, % 10, % 15.4% Cost of goods and services (6,721) (59.4%) (6,210) (52.9%) 8.2% Value added 5, % 4, % 26.5% Personnel expense (4,237) (37.5%) (4,046) (34.7%) 4.7% EBITDA % (15) (0.1%) n.a. Amortisation & Depreciation (1,503) (13.3%) (1,748) (15.0%) (14.0%) Accruals to provisions (1) --- n.a. EBIT (641) (5.7%) (1,764) (15.1%) n.a. Net non-recurring charges (35) (0.3%) --- n.a. O perating profit/(loss) (676) (6.0%) (1,764) (4.0%) n.a. Net financial expense (118) (1.0%) (118) (1.0%) --- Net exchange gains/(losses) (1) --- (6) (0.1%) n.a. Profit/(loss) before taxes (795) (7.0%) (1,888) (16.2%) n.a. Income taxes % % n.a. Profit/(loss) for the period (647) (5.7%) (1,388) (11.9%) n.a. 42

45 The Verreries Brosse reclassified consolidated income statement for 9M 2016 compared to the same period of the previous year is shown below: 9M M 2015 Change Euro thou. % Euro thou. % % Revenues 38, % 39, % (2.2%) Changes in finished and semi-finished products and work in progress (366) (0.9%) 2, % n.a. Value of production 38, % 42, % (9.0%) Cost of goods and services (22,637) (58.2%) (23,480) (59.0%) (3.6%) Value added 15, % 18, % (15.8%) Personnel expense (13,659) (35.1%) (13,963) (35.1%) (2.2%) EBITDA 2, % 4, % (54.2%) Amortisation & Depreciation (4,759) (12.2%) (5,245) (13.2%) (9.3%) Accruals to provisions (160) (0.4%) (196) (0.5%) (18.4%) EBIT (2,658) (6.8%) (504) (1.3%) n.a. Net non-recurring charges (63) (0.2%) n.a. O perating profit/(loss) (2,721) (7.0%) (493) (1.2%) n.a. Net financial expense (299) (0.8%) (466) (1.2%) (35.8%) Net exchange gains/(losses) (7) % n.a. Profit/(loss) before taxes (3,027) (7.8%) (845) (2.1%) n.a. Income taxes % % 307.0% Profit/(loss) for the period (2,445) (6.3%) (702) (1.8%) n.a. Revenues by geographic area: (Euro thousands) Q3 9M Change % Change % Italy (32.8%) 1,962 3,072 (36.1%) European Union 10,207 10, % 34,189 33, % Other segments (24.1%) 2,772 2,978 (6.9%) Total 11,310 11,666 (3.1%) 38,923 39,795 (2.2%) 43

46 In the first nine months of 2016, revenues amounted to Euro 38.9 million, reducing 2.2% on the same period of 2015 (Euro 39.8 million). In the third quarter the decrease was 3.1%. Material costs and external services, including the changes in inventories, in the first nine months of 2016 accounted for 59.1% of revenues compared to 52.5% in the same period of In the third quarter of 2016 these costs accounted for 54.9% compared to 65.4% in Personnel expense in the first nine months of 2016 decreased 2.2% compared to the same period of These expenses account for 35.1% of revenues. In the third quarter of the year, personnel expense increased on Q (+4.7%), from Euro 4 million to Euro 4.2 million. The EBITDA in the first nine months of the year amounted to Euro 2.3 million (Euro 4.9 million in the same period of 2015); the revenue margin decreased from 12.4% to 5.8%. In the third quarter of 2016 the EBITDA margin was 7.6% compared to -0.1%. The pre-tax result in 9M 2016 was a loss of Euro 3 million compared to a loss of Euro 0.8 million in the same period of The cash flow generated from the net profit and amortisation/depreciation in the first nine months of the year amounted to Euro 2.3 million, compared to Euro 4.5 million in the same period of 2015 (- 49.1%). 44

47 The Verreries Brosse reclassified consolidated balance sheet at 30 September and 30 June 2016 and at 31 December 31 and 30 September 2015 was as follows: Euro thou. Euro thou. Euro thou. Euro thou. Trade receivables 8,419 11,867 11,897 9,468 Other receivables 2,507 2,031 2,129 1,487 Inventories 17,638 17,007 18,119 18,918 Current non-financial payables (10,655) (11,537) (11,228) (10,973) Payables on fixed assets (438) (665) (1,063) (864) A) Working capital 17,471 18,703 19,854 18,036 Net intangible and tangible assets 21,906 22,776 24,684 24,719 Equity investments and other non-current assets 1,757 1,610 1,184 1,261 Non-current provisions and non-financial payables (1,661) (1,662) (1,585) (1,620) B) Net fixed capital 22,002 22,724 24,283 24,360 A+B= Net capital employed 39,473 41,427 44,137 42,396 Financed by: Current loans and borrowings 28,041 26,825 26,846 28,129 Cash and cash equivalents (7,358) (6,644) (6,391) (4,378) Current net debt 20,683 20,181 20,455 23,751 Non-current loans and borrowings 7,125 8,934 9,572 5,447 C) Net financial debt 27,808 29,115 30,027 29,198 Opening equity 14,110 14,110 13,900 13,900 Other changes in equity Profit/(loss) for the period (2,445) (1,798) 210 (702) D) Closing equity 11,665 12,312 14,110 13,198 C+D = Total financial debt and equity 39,473 41,427 44,137 42,396 The working capital at 30 September 2016 decreased Euro 2.4 million compared to 31 December 2015 (-12%) and reduced Euro 1.2 million compared to 30 June 2016 (-6.6%). Trade receivables at 30 September 2016 amounted to Euro 8.4 million, decreasing Euro 3.5 million on 31 December 2015 (-29.2%) and Euro 3.5 million on 30 June 2016 (-29.1%). Inventories of Euro 17.6 million decreased Euro 0.5 million compared to 31 December 2015 (- 2.7%), while increasing Euro 0.6 million (+3.7%) compared to 30 June

48 Net fixed capital at 30 September 2016 decreased by Euro 2.3 million compared to the end of 2015 (-9.4%), due principally to amortisation and depreciation in the period (Euro 4.8 million) being higher than investments (Euro 2 million). The net financial debt at 30 September 2016, due to the reported movements, totalled Euro 27.8 million compared to Euro 30 million (-7.4%) at 31 December 2015 and Euro 29.1 million (-4.5%) at 30 June At 30 September 2016, there were 318 employees (at 31 December and 30 September 2015 respectively 338 and 342 employees). In the final quarter of the year it is expected that the Company - in the absence of events outside its scope such as the strikes in the first half year - will continue the margin recovery seen in the third quarter. 46

49 Huta Szkła Czechy S.A. (HSC SA) Registered office: Trabkj (Poland) Business sector: glass containers Chairman: Management Board : Paolo Giacobbo Roberto Cardini General Manager Roberto Celot Alberto Faggion Franco Grisan Nicolò Marzotto Stefano Marzotto Supervisory Board : Paolo Nicolai - chairman Stefano Perosa Carlo Pesce The European hollow glass market for Beverages and Food reported moderate consumption demand for containers. The global Perfumery market again performed well, supported by emerging economy and North American sales and a degree of stability in Europe. In the Cosmetics sector the demand for nail varnish products remained low, due to a reduced sell out in some countries. The political situations in Turkey, Eastern European and Venezuela have also had an impact. The skincare segment continued to grow. 47

50 The HSC SA reclassified income statement for Q compared to the same period of the previous year is shown below: Q Q Cge. Euro thou. % Euro thou. % % Revenues 5, % 5, % 3.8% Changes in finished & semi-finished products & work in progress % (1,018) (19.4%) n.s. Internal production of fixed assets % % n.s. Value of production 6, % 4, % 35.3% Cost of goods and services (3,408) (62.6%) (2,701) (51.5%) 26.2% Value added 2, % 1, % 49.3% Personnel expense (1,505) (27.7%) (1,399) (26.7%) 7.6% EBITDA 1, % % 209.9% Amortisation & Depreciation (665) (12.2%) (618) (11.8%) 7.6% Accruals to provisions (14) (0.3%) (38) (0.7%) n.s. EBIT % (292) (5.6%) n.s. Net recurring non-operating income (8) (0.1%) (20) (0.4%) n.s. O perating Profit/(loss) % (312) (5.9%) n.s. Net financial expense (24) (0.4%) (24) (0.5%) --- Net exchange gains/(losses) % (38) (0.7%) n.s. Profit/(loss) before taxes % (374) (7.1%) n.s. Income taxes (118) (2.2%) % n.s. Profit/(loss) for the period % (294) (5.6%) n.s. 48

51 The reclassified income statement of HSC SA for 9M 2016, compared to the same period of the previous year is as follows: 9M M 2015 Cge. Euro thou. % Euro thou. % % Revenues 16, % 16, % 2.3% Changes in finished & semi-finished products & work in progress % (1,097) (6.7%) n.s. Internal production of fixed assets % % (25.1%) Value of production 17, % 15, % 12.1% Cost of goods and services (9,800) (58.2%) (9,467) (57.5%) 3.5% Value added 7, % 6, % 24.9% Personnel expense (4,290) (25.5%) (4,078) (24.8%) 5.2% EBITDA 3, % 2, % 59.8% Amortisation & Depreciation (1,986) (11.8%) (1,840) (11.2%) 7.9% Accruals to provisions (61) (0.4%) (67) (0.4%) (9.0%) EBIT 1, % % 313.5% Net recurring non-operating income (4) --- (4) --- n.s. O perating Profit 1, % % 316.7% Net financial expense (66) (0.4%) (78) (0.5%) (15.4%) Net exchange gains/(losses) (87) (0.5%) (78) (0.5%) n.s. Profit before taxes 1, % % 529.1% Income taxes (309) (1.8%) (49) (0.3%) 530.6% (Tax-rate Q3 2016: 21%) (Tax-rate Q3 2015: 20.9%) Profit for the period 1, % % 528.6% Revenues in the first nine months of 2016 totalled Euro 16.8 million, improving 2.3% on the same period of 2015 (Euro 16.5 million). In the third quarter revenues amounted to Euro 5.4 million, increasing 3.8% on the same period of 2015 (Euro 5.2 million). 49

52 Revenues by geographic area: (Euro thousands) Q3 9M Change % Change % Italy 1,400 1,553 (9.9%) 4,936 5,608 (12.0%) European Union (Italy excl.) 2,840 2, % 9,794 8, % Other segments 1, % 2,109 2,455 (14.1%) Total 5,443 5, % 16,839 16, % Materials and external services, including changes in inventories and internal production of fixed assets, amounted in the first nine months of 2016 to Euro 8.9 million 52.7% of revenues (61.2% in 9M 2015). In the third quarter of 2016 they amounted to Euro 2.8 million, accounting for 51.6% of revenues compared to Euro 3.5 million and 66.4% in the same period of Personnel expense amounted to Euro 4.3 million, accounting for 25.5% of revenues (24.8% in the same period of 2015). In the third quarter, personnel expense increased 7.6% compared to the same period of the previous year. The average workforce increased. The EBITDA in 9M 2016 amounted to Euro 3.7 million, a 21.8% revenue margin (in the previous year Euro 2.3 million and 14%). EBITDA in Q3 amounted to Euro 1.1 million, a margin of 20.7% compared to 6.9%. EBIT amounted to Euro 1.6 million in 9M 2016 and Euro 0.4 million in 9M 2015, with a 9.7% revenue margin compared to 2.4%. In Q EBIT amounted to Euro 0.4 million compared to a loss of Euro 0.3 million, with a margin of 8.2% compared to -5.6%. The profit in the first nine months of 2016 amounted to Euro 1.2 million, compared to Euro 0.2 million in the same period of 2015, with respective margins of 6.9% and 1.1%. The net profit in the quarter was Euro 0.4 million (8.2% margin), compared to a loss of Euro 0.3 million in the same period of the previous year (-5.6% margin). The cash flow generated by the net result and amortisation and depreciation amounts to Euro 3.1 million, comprising 18.7% of revenues in 9M 2016, while in 2015 totalling Euro 2 million and 12.3% of revenues. 50

53 The HSC SA reclassified balance sheet at 30 September and 30 June 2016 and at 31 December and 30 September 2015 is as follows: Euro thou. Euro thou. Euro thou. Euro thou. T rade receivables 2,733 3,319 3,100 2,992 Other receivables 977 1, ,022 Inventories 5,850 5,191 5,239 4,752 Current non-financial payables (3,627) (3,223) (3,063) (3,786) Payables on fixed assets (3,266) (1,227) (644) (801) A) Working capital 2,667 5,134 5,451 4,179 Net intangible and tangible assets 25,671 20,435 14,249 13,807 Equity investments and other non-current assets Non-current provisions and non-financial payables (1,154) (1,129) (1,152) (1,154) B) Net fixed capital 25,011 19,787 13,598 13,260 A+B = Net capital employed 27,678 24,921 19,049 17,439 Financed by: Current loans and borrowings 1,133 1,139 5,451 5,459 Cash and cash equivalents (3,723) (3,404) (2,551) (3,492) Current net debt (2,590) (2,265) 2,900 1,967 Non-current loans and borrowings 14,278 12,051 1,139 1,409 C) Net financial debt 11,688 9,786 4,039 3,376 Opening equity 15,010 15,010 13,789 13,789 Other changes in equity (183) (591) Profit for the period 1, , D) Closing equity 15,990 15,135 15,010 14,063 C+D = Total financial debt and equity 27,678 24,921 19,049 17,439 The working capital at 30 September 2016 decreased on 31 December 2015 by Euro 2.8 million, of which Euro -0.3 million for trade receivables, Euro +0.6 million for inventories, Euro -0.5 million for current non-financial payables and Euro -2.6 million for fixed asset payables. 51

54 The net fixed capital amounted to Euro 25 million at 30 September 2016, increasing Euro 11.4 million on 31 December 2015 and Euro 5.2 million on 30 June The net debt at 30 September 2016 amounted to Euro 11.7 million compared to net debt of Euro 9.8 million at 30 June At 30 September 2016 employees numbered 461, while at 31 December and 30 September 2015 respectively 418 and 406. The forecast for the current year, considering an equivalent general environment, indicates results in line with those reported to date. 52

55 Vetri Speciali SpA Registered office: Trento Via Manci, 5 Business sector: specialty glass containers Chairman: Vice Chairman: Chief Executive Officer: Directors: Statutory Auditors: Vitaliano Torno Stefano Marzotto Giorgio Mazzer Luca Marzotto Massimo Noviello Carlo Pesce - chairman Lorenzo Buraggi Stefano Meneghini The demand for special containers remained at strong levels. This was seen generally across all market segments, in particular for operators with a greater export focus. In October 2016 the Company completed the construction of the new furnace at the new Gardolo (TN) plant and began operations. 53

56 The Vetri Speciali SpA reclassified income statement for Q compared to the same period of the previous year, for the share pertaining to Zignago Vetro SpA (50%), is summarised below: Revenues Cge. Euro thou. % Euro thou. % % 15, % 15, % (1.5%) Changes in finished & semi-finished products & work in progress 1, % % n.s. Value of production 16, % 16, % 0.8% Cost of goods and services (7,844) (49.8%) (8,126) (50.8%) (3.5%) Value added 9, % 8, % 4.7% Personnel expense (3,829) (24.3%) (3,351) (20.9%) 14.3% EBITDA 5, % 5, % (1.3%) Amortisation & Depreciation (998) (6.3%) (1,160) (7.3%) (14.0%) Accruals to provisions (12) (0.1%) (63) (0.4%) n.s. EBIT 4, % 4, % 3.5% Net recurring non-operating income % % n.s. O perating Profit 4, % 4, % 2.2% Net financial expense (59) (0.4%) (93) (0.6%) (36.6%) Net exchange gains/(losses) n.s. Profit before taxes 4, % 4, % 2.5% Income tax & IRAP (1,343) (8.5%) (1,364) (8.5%) (1.5%) (Tax-rate Q3 2016: 30.1%) (Tax-rate Q3 2015: 31.4%) Q Q Profit for the period 3, % 2, % 4.4% 54

57 The Vetri Speciali SpA reclassified income statement for 9M 2016 compared to the same period of the previous year, for the share pertaining to Zignago Vetro SpA (50%), is summarised below: 9M M 2015 Changes Euro thou. % Euro thou. % % Revenues 51, % 52, % (1.7%) Changes in finished & semifinished products & work in progress % (569) (1.1%) n.s. Value of production 52, % 52, % 0.4% Cost of goods and services (23,890) (46.1%) (24,996) (47.4%) (4.4%) Value added 28, % 27, % 4.9% Personnel expense (11,536) (22.3%) (10,461) (19.8%) 10.3% EBITDA 16, % 16, % 1.5% Amortisation & Depreciation (2,924) (5.6%) (3,172) (6.0%) (7.8%) Accruals to provisions (137) (0.3%) (148) (0.3%) (7.4%) EBIT 13, % 13, % 3.8% Net recurring non-operating income % % n.s. O perating Profit 14, % 14, % 2.1% Net financial expense (205) (0.4%) (305) (0.6%) (32.8%) Net exchange gains/(losses) % n.s. Profit before taxes 14, % 13, % 2.7% Income tax & IRAP (4,386) (8.5%) (4,385) (8.3%) 0.0% (Tax-rate 9M 2016: 30.6%) (Tax-rate 9M 2015: 31.4%) Profit for the period 9, % 9, % 3.9% The share of consolidated revenues in the first nine months of the year amounted to Euro 51.8 million, a decrease of 1.7% compared to Euro 52.7 million in the same period of the previous year. Revenues in the third quarter 2016 totalled Euro 15.8 million, decreasing by 1.5% compared to Euro 16 million in the third quarter of Revenues by geographic area Q3 9M (Euro thousands) Change % Change % Italy 11,562 11,737 (1.5%) 38,712 38,820 (0.3%) European Union 2,817 1, % 7,812 6, % Other segments 1,374 2,344 (41.4%) 5,293 7,070 (25.1%) Total 15,753 15,996 (1.5%) 51,817 52,701 (1.7%) 55

58 Material costs and external services in the first nine months of 2016, including the changes in inventories, decreased by 8.6% compared to the same period of 2015, while the percentage of revenues decreased from 48.5% to 45.1%. In the third quarter of 2016, the percentage of these costs on revenues decreased by 9%, comprising 42% of revenues compared to 45.5% in Q Personnel expense in the first nine months of 2016 rose 10.3% compared to the same period of In the third quarter of 2016 they increased 14.3%. Personnel expense on revenues in 9M 2016 and 2015 were respectively 22.3% and 19.8% and in the respective third quarters 24.3% and 20.9%. The EBITDA amounted to Euro 16.9 million in the first nine months of 2016 compared to Euro 16.7 million in the first nine months of 2015 (+1.5%). The margin in 9M 2016 was 32.7% compared to 31.6% in the same period of In the third quarter of 2016 EBITDA share decreased 1.3% (Euro 5.3 million compared to Euro 5.4 million), with the margin increasing from 33.6% to 33.7%. The EBIT share amounted to Euro 13.9 million in the first nine months of 2016, up 3.8% on the first nine months of 2015 and with a margin of 26.7% of revenues compared to 25.3%. The EBIT in the third quarter increased 3.5% on Q3 2015, with the revenue margin increasing to 27.2% from 25.9%. The profit before taxes share amounted to Euro 14.3 million in the first nine months of 2016, increasing 2.7% on Euro 14 million in the first nine months of The margin was 27.7%. In the third quarter of 2016 the profit before taxes improved 2.5% (Euro 0.1 million), with a revenue margin of 28.3% compared to 27.2%. Income taxes of Euro 4.4 million in the first nine months of 2016 were unchanged on the same period of The tax-rate in the period was 30.6% compared to 31.4%. The share of the consolidated net profit in the first nine months of 2016 was Euro 10 million compared to Euro 9.6 million in the same period of the previous year (+3.9%), equal to 19.2% and 18.2% of revenues respectively. The share of net profit in the quarter was Euro 3.1 million (19.8% of revenues), compared to Euro 3 million (18.6% of revenues) in the same period of 2015 (+4.4%). The share of cash flow generated from the net profit and amortisation and depreciation in the first nine months of 2016 amounted to Euro 12.9 million compared to Euro 12.8 million in the same period of 2015 (+1%), which as a percentage of revenues was 24.9% (24.2% in the first nine months of 2015). 56

59 The Vetri Speciali SpA reclassified balance sheet at 30 September and 30 June 2016 and at 31 December and 30 September 2015 for the share pertaining to Zignago Vetro SpA (50%) was as follows: Euro thou. Euro thou. Euro thou. Euro thou. T rade receivables 11,240 14,533 12,567 10,901 Other receivables 2,238 1,714 1,865 1,729 Inventories 11,318 9,940 10,877 10,470 Current non-financial payables (15,705) (12,548) (13,738) (13,712) Payables on fixed assets (4,322) (3,604) (652) (469) A) Working capital 4,769 10,035 10,919 8,919 Net tangible and intangible assets 37,888 31,903 25,204 24,106 Goodwill 40,086 40,086 40,086 39,967 Investments and other non-current assets ,260 Non-current provisions and non-financial payables (3,006) (2,978) (3,034) (3,333) B) Net fixed capital 75,377 69,409 62,655 62,000 A+B= Net capital employed 80,146 79,444 73,574 70,919 Financed by: Current loans and borrowings 5,654 11,745 6,374 6,068 Cash and cash equivalents (265) (30) (3,479) (1,978) Current net debt 5,389 11,715 2,895 4,090 Non-current loans and borrowings 13,358 9,444 10,178 9,686 C) Net financial debt 18,747 21,159 13,073 13,776 Opening equity 60,501 60,501 55,962 55,962 Dividends paid in the period (9,056) (9,056) (8,402) (8,402) Other equity changes Profit for the period 9,954 6,840 12,923 9,583 D) Closing equity 61,399 58,285 60,501 57,143 C+D = Total financial debt and equity 80,146 79,444 73,574 70,919 The share of working capital at 30 September 2016 amounted to Euro 4.8 million, a decrease on 30 June 2016 (-52.5%) and on 31 December 2015 (-56.3%). In particular, trade receivables at 30 September 2016 amounted to Euro 11.2 million, decreasing on 30 June 2016 (Euro 14.5 million; %) and on 31 December 2015 (Euro 12.6 million: %). Inventories at 30 September 2016 increased by Euro 1.4 million compared to 30 June 2016 and increased Euro 0.4 million compared to 31 December

60 The share of net fixed capital of Euro 75.4 million at 30 September 2016 increased Euro 6 million compared to 30 June 2016 and by Euro 12.7 million compared to 31 December The share of capital expenditure (Euro 15.6 million) was lower than depreciation in the period (Euro 2.9 million). The share of net equity at 30 September 2016 amounted to Euro 61.4 million, increasing by Euro 3.1 million and by Euro 0.9 million respectively on 30 June 2016 and on 31 December These changes follow the recording of the result for the period, net of the distribution of the dividend (Euro 9.1 million). The share of net debt at 30 September 2016 amounted to Euro 18.7 million, an increase of Euro 5.7 million (+43.4%) on 31 December 2015 and decreasing Euro 2.4 million (-11.4%) on 30 June At 30 September 2016, there were 720 employees (at 31 December and 30 September 2015 respectively 617 and 550 employees). Results for the year are expected to remain at good levels, once again supported by strong demand. 58

61 For completeness the reclassified statement of profit and loss and statement of financial position of Vetri Speciali SpA (100% of the relative data) are shown below. The Vetri Speciali SpA reclassified income statement for Q and 2015 (with 100% of data) is reported below. Q Q Changes Euro thou. % Euro thou. % % Revenues 31, % 31, % (1.5%) Changes in finished and semi-finished products and work in progress 2, % 1, % n.a. Value of production 33, % 33, % 0.8% Cost of goods and services (15,688) (49.8%) (16,251) (50.8%) (3.5%) Value added 18, % 17, % 4.7% Personnel expense (7,657) (24.3%) (6,702) (20.9%) 14.2% EBITDA 10, % 10, % (1.3%) Amortisation & Depreciation (1,996) (6.3%) (2,320) (7.3%) (14.0%) Accruals to provisions (24) (0.1%) (126) (0.4%) n.a. EBIT 8, % 8, % 3.5% Net recurring non-operating income % % n.a. O perating Profit 9, % 8, % 2.1% Net financial expense (118) (0.4%) (187) (0.6%) (36.9%) Net exchange gains/(losses) % n.a. Profit before taxes 8, % 8, % 2.5% Income taxes (2,686) (8.5%) (2,727) (8.5%) (1.5%) (Tax-rate Q3 2016: 30.1%) (Tax-rate Q3 2015: 31.4%) Profit for the period 6, % 5, % 4.4% 59

62 The Vetri Speciali SpA reclassified income statement for 9M 2016 and 2015 (with 100% of data) is reported below. 9M M 2015 Changes Euro thou. % Euro thou. % % Revenues 103, % 105, % (1.7%) Changes in finished and semi-finished products and work in progress 1, % (1,138) (1.1%) n.a. Value of production 104, % 104, % 0.4% Cost of goods and services (47,779) (46.1%) (49,991) (47.4%) (4.4%) Value added 56, % 54, % 4.9% Personnel expense (23,071) (22.3%) (20,921) (19.8%) 10.3% EBITDA 33, % 33, % 1.5% Amortisation & Depreciation (5,847) (5.6%) (6,343) (6.0%) (7.8%) Accruals to provisions (274) (0.3%) (296) (0.3%) (7.4%) EBIT 27, % 26, % 3.8% Net recurring non-operating income 1, % 1, % n.a. O perating Profit 29, % 28, % 2.1% Net financial expense (409) (0.4%) (610) (0.6%) (33.0%) Net exchange gains/(losses) % n.a. Profit before taxes 28, % 27, % 2.7% Income taxes (8,774) (8.5%) (8,771) (8.3%) 0.0% (Tax-rate 9M 2016: 30.6%) (Tax-rate 9M 2015: 31.4%) Profit for the period 19, % 19, % 3.9% 60

63 The Vetri Speciali SpA reclassified balance sheet at 30 September and 30 June 2016 and at 31 December and 30 September 2015 (100% of the data) is reported below Euro thou. Euro thou. Euro thou. Euro thou. T rade receivables 22,479 29,066 25,133 21,802 Other receivables 4,475 3,428 3,730 3,458 Inventories 22,635 19,879 21,754 20,940 Current non-financial payables (31,410) (25,095) (27,475) (27,424) Payables on fixed assets (8,644) (7,208) (1,304) (937) A) Working capital 9,535 20,070 21,838 17,839 Net tangible and intangible assets 75,776 63,805 50,407 48,212 Goodwill 80,171 80,171 80,171 79,934 Investments and other non-current assets ,519 Non-current provisions and non-financial payables (6,007) (5,955) (6,067) (6,666) B) Net fixed capital 150, , , ,999 A+B= Net capital employed 160, , , ,838 Financed by: Current loans and borrowings 11,308 23,490 12,748 12,135 Cash and cash equivalents (529) (60) (6,957) (3,954) Current net debt 10,779 23,430 5,791 8,181 Non-current loans and borrowings 26,716 18,887 20,355 19,371 C) Net financial debt 37,495 42,317 26,146 27,552 Opening equity 121, , , ,924 Dividends paid in the period (18,112) (18,112) (16,805) (16,805) Other equity changes Profit for the period 19,909 13,681 25,847 19,167 D) Closing equity 122, , , ,286 C+D = Total financial debt and equity 160, , , ,838 61

64 Vetreco Srl (*) Registered office: Supino (FR) Via Morolense Business sector: treatment and sale of recycled glass Chairman: Vice Chairman: Directors: Statutory Auditors: Germana Signa Roberto Celot Rocco Furia Dario Lorenzon John Gerard Sadlier Maria Gabriella Spinelli Alberto Faggion - chairman Riccardo Bolla Augusto Valchera (*) The amounts reported in the comments represent 100% of the Company data. In Q3 2016, the Company delivered improved production and plant performances, returning positive results. However, rising raw material procurement costs, the low quality of raw glass - still not at expected levels - and consequent higher treatment costs continue to impact upon operations. The Company is strongly focused on the continual research into improving technical and organisational aspects to resolve existing issues and further improve results. 62

65 The Vetreco Srl reclassified income statement (100% of the data) for Q and 2015 was as follows: Q Q Changes Euro thou. % Euro thou. % % Revenues 3, % 2, % 15.0% Changes in finished and semifinished products and work in progress % % 18.0% Value of production 3, % 2, % 15.2% Cost of goods and services (2,392) (74.4%) (2,597) (92.9%) (7.9%) Value added % % 198.8% Personnel expense (338) (10.5%) (397) (14.2%) (14.9%) EBITDA % (71) (2.5%) n.a. Amortisation & Depreciation (258) (8.0%) (253) (9.1%) 2.0% EBIT % (324) (11.6%) n.a. Net financial expense (126) (3.9%) (128) (4.6%) (1.6%) Profit/(loss) before taxes % (452) (16.2%) n.a. Income taxes (109) (3.4%) % n.a. Profit/(loss) for the period % (378) (13.5%) (137.8%) 63

66 The Vetreco Srl reclassified income statement (100% of the data) for 9M 2016 and 2015 was as follows: 9M M 2015 Changes Euro thou. % Euro thou. % % Revenues 9, % 7, % 21.6% Changes in finished and semifinished products and work in progress % % (76.8%) Value of production 9, % 8, % 19.5% Cost of goods and services (7,877) (81.6%) (7,092) (89.3%) 11.1% Value added 1, % 1, % 77.6% Personnel expense (1,045) (10.8%) (1,046) (13.2%) (0.1%) EBITDA % (23) (0.3%) n.a. Amortisation & Depreciation (769) (8.0%) (752) (9.5%) 2.3% EBIT 3 0.0% (775) (9.8%) n.a. Net financial expense (376) (3.9%) (386) (4.9%) (2.6%) Profit/(loss) before taxes (373) (3.9%) (1,161) (14.6%) (67.9%) Income taxes (11) (0.1%) % (105.8%) Profit/(loss) for the period (384) (4.0%) (972) (12.2%) (60.5%) Revenues almost entirely concern the processing of raw glass and the supply of cullet ready for reuse. The principal cost accounts concern raw material, services and personnel expenses. The margin continues to remain weak, following the results reported in the first quarter of the year. There was a significant improvement in the third quarter. 64

67 The Vetreco Srl reclassified balance sheet (100% of the data) at 30 September and 30 June 2016 and 31 December and 30 September 2015 was as follows: Euro Euro Euro Euro Trade receivables 2,360 2,162 2,416 2,101 Other receivables 3,078 3,329 3,754 2,016 Inventories 1, ,266 1,195 Current non-financial payables (5,345) (4,888) (5,787) (4,687) Payables on fixed assets (82) (82) (11) (11) A) Working capital 1,211 1,422 1, Net tangible and intangible assets 15,396 15,625 16,019 16,085 Other equity investments and non-current assets Non-current provisions & loans and borrowings (44) (38) (47) (39) B) Net fixed capital 15,372 15,607 15,992 16,066 A+B= Net capital employed 16,583 17,029 17,630 16,680 Financed by: Current loans and borrowings 16,854 17,082 17,133 17,018 Cash and cash equivalents (384) (23) C) Net financial debt 16,470 17,059 17,133 17,018 Opening equity Shareholder capital payment , Profit/(loss) for the period (384) (527) (1,237) (972) D) Closing equity 113 (30) 497 (338) C+D = Total financial debt and equity 16,583 17,029 17,630 16,680 The reclassified statement of financial position reports net tangible and intangible fixed assets totalling Euro 15.4 million, almost entirely concerning the production facility. The net debt at 30 September 2016 amounted to Euro 16.5 million. The other receivables account substantially concerns tax receivables, in particular VAT. At 30 September 2016, there were 36 employees (at 31 December and 30 September 2015 respectively 29 and 35 employees). 65

68 SIGNIFICANT EVENTS AFTER 30 SEPTEMBER 2016 AND OUTLOOK Significant events after 30 September 2016 No significant events further to those previously outlined took place after 30 September Atypical and/or unusual operations There were no atypical and/or unusual transactions for the period ended 30 September 2016 as defined by Consob Communication DEM/ Outlook Based on the information available, demand in the sectors in which the Zignago Vetro Group operates is expected to remain at a good level, with sales and margins at least matching those for the first nine months. Fossalta di Portogruaro, 9 November 2016 For the Board of Directors The Chairman Mr. Paolo Giacobbo 66

69 Interim Financial Report Consolidated Financial Statements 67

70 Consolidated Financial Statements Consolidated Statement of Financial Position (Euro thousands) ASSETS Non-current assets Property, plant & equipment 134, , , ,153 Goodwill Intangible assets Equity-accounted Joint Ventures 61,094 57,956 60,291 56,697 Equity investments Other non-current assets 2,452 2,433 4,247 4,448 Deferred tax assets 3,439 3,331 2,931 2,970 Total non-current assets 202, , , ,422 Current assets Inventories 68,055 64,217 66,487 64,465 T rade receivables 52,045 57,175 53,476 49,764 Other current assets 8,685 7,982 9,220 7,172 T ax Assets 2,401 2,390 2,659 2,299 Cash and cash equivalents 91,598 79, ,063 93,840 Total current assets 222, , , ,540 TO TAL ASSETS 425, , , ,962 EQUITY & LIABILITIES EQ UITY Share capital 8,800 8,800 8,800 8,800 Reserves 35,521 35,521 35,521 35,521 T reasury shares (5,027) (5,027) (5,027) (5,027) Retained earnings and profit for the period 106, , ,006 98,299 Other equity items (1,724) (1,798) (1,671) (1,720) TO TAL EQ UITY ATTRIBUTABLE TO O WNERS O F THE PARENT 144, , , ,873 EQ UITY ATTRIBUTABLE TO NO N- CO NTRO LLING INTERESTS TO TAL EQ UITY 144, , , ,873 LIABILITIES Non-current liabilities Provisions for risks and charges 4,030 3,636 3,867 3,390 Post-employment benefits 4,733 4,732 4,838 4,815 Non-current loans and borrowings 100, , , ,640 Other non-current liabilities 3,671 3,820 4,063 4,429 Deferred tax liabilities 2,420 2,583 2,369 2,661 Total non-current liabilities 115, , , ,935 Current liabilities Bank loans and borrowings - current portion 102,334 92,741 92,475 83,008 T rade and other payables 44,322 42,145 44,412 41,963 Other current liabilities 16,680 16,194 16,583 15,779 Current income taxes 2, ,878 3,404 Total current liabilities 165, , , ,154 TO TAL LIABILITIES 281, , , ,089 TO TAL EQ UITY AND LIABILITIES 425, , , ,962 68

71 Consolidated Financial Statements Consolidated Income Statement (Euro thousands) Q Q M M 2015 Revenues 61,586 61, , ,529 Raw material, ancillary, consumables and goods (16,340) (15,756) (54,047) (43,798) Service costs (17,338) (19,406) (51,279) (58,857) Personnel expense (14,459) (13,825) (44,411) (42,751) Amortisation & Depreciation (7,255) (7,305) (22,007) (21,638) Other operating costs (928) (683) (3,408) (2,482) Other operating income 11 2,259 1,049 2,954 Effect of measurement of Joint Ventures 3,138 2,847 9,858 9,318 Operating profit 8,415 9,282 26,861 27,275 Financial income Financial expense (526) (1,307) (2,854) (3,021) Net exchange gains/(losses) 176 (86) (126) 44 Profit before taxes 8,110 8,118 24,020 24,844 Income taxes (1,757) (1,936) (5,073) (5,505) Profit for the period 6,353 6,182 18,947 19,339 Non-controlling interests profit Owners of the parent net result 6,353 6,182 18,947 19,339 Earnings per share: Basic earnings (and diluted) per share

72 Consolidated Financial Statements Consolidated Statement of Comprehensive Income Q Q M M 2015 (Euro thousands) Profit for the period 6,353 6,182 18,947 19,339 Items that will be subsequently reclassified to profit or loss Translation difference for foreign operations 74 (187) (53) 84 Tax effect (187) (53) 84 Total items that will be subsequently reclassified to profit or loss 74 (187) (53) 84 Items that will not be subsequently reclassified to profit or loss Actuarial gains/(losses) on defined benefit plans Tax effect Total items that will not be subsequently reclassified to profit or loss O ther comprehensive income (expense) for the period, net of taxes Total comprehensive income for the period 74 (187) (53) 84 6,427 5,995 18,894 19,423 Attributable to: Owners of the parent 6,427 5,995 18,894 19,423 Non-controlling interests ,427 5,995 18,894 19,423 70

73 Consolidated Financial Statements Consolidated Statement of Cash Flows (Euro thousands) 9M 2016 HY M 2015 CASH FLOW FROM OPERATING ACTIVITIES: Profit before taxes 24,020 15,910 36,233 24,844 Adjustments to reconcile net profit with cash flow generated from operating activities: Amortisation & Depreciation 22,007 14,752 27,580 21,638 Gains/(losses) on sale of property, plant & equipment (241) (241) 212 (287) Accrual to allowance for impairment Net changes in post-employment benefits (105) (106) (112) (200) Net changes in other provisions 163 (231) Financial income and exchange gains (139) (94) (866) (590) Financial expenses and exchange losses 2,980 2,630 4,169 3,021 Income taxes paid in the period (4,678) (4,638) (5,077) (1,214) Measurement of joint ventures at equity (9,858) (6,720) (12,565) (9,318) Dividends distributed by equity-accounted joint ventures 9,056 9,056 8,402 8,402 Changes in operating assets and liabilities: Decrease/(increase) in trade receivables 1,253 (3,841) (5,457) (1,854) Decrease/(increase) in other current assets 535 1,238 (2,514) (466) Decrease/(increase) in inventories (1,568) 2,270 (8,453) (6,431) Increase/(decrease) in trade & other payables 479 (712) 3,699 1,155 Increase/(decrease) in other current liabilities 163 (359) 1, Change in other non-current assets and liabilities 1,403 1, Total adjustments and changes 21,628 14,717 11,627 15,524 Net Cash Flows from operating activities (A) 45,648 30,627 47,860 40,368 CASH FLOW FROM INVESTING ACTIVITIES: Investments in intangible assets (1) (92) (86) (1) Investments in property, plant & equipment (26,244) (16,182) (46,676) (35,494) Increase/(decrease) in trade payables for purchases of non-current assets (571) (1,556) (12,944) (12,850) Proceeds from sales of property, plant and equipment 3,487 2,280 4,351 3,342 Net cash flow used in investing activities (B) (23,329) (15,550) (55,355) (45,003) CASH FLOWS FROM FINANCING ACTIVITIES: Interest paid in the period (3,046) (2,660) (4,175) (3,181) Interest received in the period Net change in current loans and borrowings (1,192) (9,575) 1,428 (5,545) Net change in non-current loans and borrowings ,616 44,950 Repayments of non-current loans and borrowings (6,496) (4,133) (12,244) (10,767) Dividends distributed (20,346) (20,346) (17,316) (17,316) Net cash flow used in financing activities Change in assets and liabilities items due to translation effect Net change in cash and cash equivalents (C) (30,941) (36,620) 18,175 8,731 (D) (396) (35) (A+B+C+D) (8,465) (20,883) 10,284 4,061 Cash & cash equivalents at beginning of period 100, ,063 89,779 89,779 Cash & cash equivalents at end of period 91,598 79, ,063 93,840 71

74 Consolidated Financial Statements Statement of Changes in Consolidated Equity 72