2016 Financial Statements

Transcription

1 2016 Financial Statements

2 Table of contents Shareholders' Meeting Agenda 9 Operating performance 13 ASTM S.p.A. Shareholding 14 Group structure and business segments 15 Management Report Significant events and new initiatives 19 Operating activities 21 Economic, Equity And Financial Data 29 Alternative performance measures 35 Financial income 37 Analysis of 2016 results of the parent company and the main investee companies 39 Risk factors and uncertainties 71 Segment information 72 Other specific disclosures pursuant to current legislation 72 Significant subsequent events 75 Business outlook 75 Appointment of the Board of Statutory Auditors and appointment of the Statutory Auditor 75 Proposal for allocation of the net profit Separate Financial Statements 2016 Consolidated Financial Statements Financial Statements: Financial Statements: Balance Sheet 80 Balance Sheet 138 Income statement 81 Income statement 139 Cash flow statement 82 Cash flow statement 140 Statement of changes in shareholders equity 83 Statement of changes in shareholders equity 141 General information 87 Reconciliation statement between shareholders' Valuation criteria and accounting standards 88 equity, the profit (loss) for the period of ASTM S.p.A. Explanatory notes: and the corresponding amounts of the ASTM Group 142 Information on the balance sheet 94 General information 145 Information on the income statement 105 Principles of consolidation and valuation criteria 146 Other information 111 Explanatory notes: Certification of the Separate Financial Statements pursuant to art. 154 bis of Legislative Decree no. 58/ Scope of consolidation Operating segments Information on the balance sheet Report of the Board of Statutory Auditors 125 Information on the income statement 200 Independent Auditors Report 133 Other information 212 Certification of the Consolidated Financial Statements pursuant to art. 154 bis of Legislative Decree no. 58/ Report of the Board of Statutory Auditors 237 Independent Auditors Report 241 ANNEX to the Management Report: Report on Corporate Governance and ownership structure ( CORPORATE GOVERNANCE )

3 SEPARATE FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2016 ASTM S.p.A.

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5 ORDINARY SHAREHOLDERS MEETING 28 APRIL 2017

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7 Board of Directors and Board of Statutory Auditors Società per Azioni (public limited company) Share capital EUR 49,499,300 fully paid up Tax code and registration number at the Register of Companies of Turin: Registered Office in Turin Corso Regina Margherita 165 Website: e mail: astm@astm.it Management and coordination: Argo Finanziaria S.p.A. Unipersonale MEMBERS OF THE BOARD OF DIRECTORS Chairman Gian Maria Gros Pietro Vice Chairmen Daniela Gavio Marcello Gavio Managing Director Alberto Rubegni Directors Beniamino Gavio Stefania Bariatti Caterina Bima (3) Marco Antonio Cassou Giuseppe Garofano (2) Giuseppe Gatto (2) Barbara Poggiali (1) Luigi Roth (2) Anna Chiara Svelto (1) Stefano Viviano (4) Marco Weigmann (1) Secretary Cristina Volpe BOARD OF STATUTORY AUDITORS Chairman Marco Fazzini Standing Auditors Ernesto Ramojno Piera Braja (3) Substitute Auditors Massimo Berni Annalisa Donesana Roberto Coda (1) Member of the "Remuneration Committee" (2) Member of the "Risk and Control Committee" (3) Member of the "Supervisory Body" (4) Director responsible for the internal audit and risk management system INDEPENDENT AUDITORS Deloitte & Touche S.p.A. TERM OF OFFICE The Board of Directors was appointed for three financial years by the Ordinary Shareholders Meeting on 28 April 2016 and its term of office will expire with the Shareholders Meeting that will be held for the approval of the 2018 Financial Statements. The Board of Statutory Auditors was appointed for three financial years by the Ordinary Shareholders Meeting on 22 April 2014 and its term of office will expire with the Shareholders Meeting that will be held for the approval of the 2016 Financial Statements. The Independent Auditors were appointed by the Ordinary Shareholders Meeting on 28 April 2009 and are in office for nine financial years. Their term of office will expire with the Shareholders Meeting that will be held for the approval of the 2017 Financial Statements. POWERS OF COMPANY OFFICERS The Chairman, who was appointed on 28 April 2016 by the Ordinary Shareholders Meeting, exercises the powers granted to him by the Board on 28 April The Vice Chairmen who were appointed by the Board of Directors on 28 April 2016 were granted management powers to be exercised in case of absence or impediment of the Chairman. The Managing Director was appointed by means of a Board resolution dated 28 April 2016 and exercises the management powers granted to him by law and the Articles of Association.

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9 AGENDA 1. Financial statements for FY 2016, Management report of the Board of Directors: related and consequent resolutions. Analysis of the Consolidated Financial Statements 2016 and the Sustainability Report Allocation of profit for the year and distribution of the dividend. 3. Report on remuneration, pursuant to Article 123 ter of Legislative Decree no. 58 of 24 February Board of Statutory Auditors: 4.1 Appointment of the Board of Statutory Auditors 4.2 Appointment of the Chairman of the Board of Statutory Auditors 4.3 Determination of the remuneration of the Chairman of the Board of Statutory Auditors and of the Acting Auditors. 5. Request for authorisation to purchase and sell treasury shares. 6. Early and consensual termination of the assignment of statutory audit and assignment of new statutory audit duties for the financial years: 6.1 Early and consensual termination of the assignment of the statutory audit for the period entrusted to Deloitte & Touche SpA. 6.2 Assignment of the statutory audit for the period; determination of their compensation. 7. Appointment of a Director or reduction in the number of members of the Board of Directors.

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11 Financial Statements as at 31 December 2016

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13 Operating performance Below are the main consolidated income and financial data at 31 December 2016: (amounts in millions of EUR) Turnover 1, ,104.3 Net toll revenues Construction sector revenues Gross operating margin (EBITDA) "Adjusted" gross operating margin Operating profit Operating cash flow Motorway investments (amounts in millions of EUR) 31 December December 2015 Adjusted net financial indebtedness 1, ,245.5 ***** In 2016, the "gross operating margin" increased by EUR 18.7 million, amounting to EUR million. This increase reflects the growth in the gross operating margin of both the "motorway sector" (approximately EUR 32.6) as well as the "construction sector" (EUR 5.6 million), partially offset by the decline recorded in the ancillary sectors" (EUR 19.5 million). More specifically, with regard to the "motorway sector", this change was the result of: (i)a rise in traffic in 2016 (+1.85% 1 ) which, together with the toll adjustments recognised with effect from 1 January 2016 (which, limited and partially to the Torino Milano section), triggered a growth in net toll revenue of EUR million (+3.53%),(ii) a drop in "royalties" and "other revenue" (EUR 2.5 million) and (iii) a reduction in "operating costs" also due to efficiency improvement policies (EUR +1.7 million). With regard to the "construction sector" the growth in gross operating margin is the result of consolidation starting from the second half of 2016 of the Itinera Group (EUR +6.3 million) and of the decrease in the contribution of ABC Costruzioni S.p.A. (EUR 0.7 million). The recognition of non recurring charges in 2016 led to an "adjusted gross operating margin" of EUR million (EUR million in 2015, taking into account non recurring items). The change in "gross operating margin" (EUR million, including the "non recurring components"), is offset by the increase in depreciation and provisions made in the period (EUR 14.8 million) and the decrease in the balance of financial operations (totalling EUR 15 million). Due to the above, net of the corresponding tax effect and of the profit pertaining to minority interests, "profit for the period attributable to the Parent Company" amounted to approximately EUR 95.5 million (EUR million in 2015). This result, net of "extraordinary" items (capital gains from the disposal of investments in 2015, higher write downs of equity investments in 2016, variances for "non recurring" operating income and costs) amounts to around EUR million and shows and improvement compared to the figure for 2015, equal to around EUR 7 million % rise in motorway traffic "adjusted" to take account of the leap year effect. 13

14 ASTM S.p.A. Shareholding As at 31 December 2016, the number of ordinary shares was equal to 98,998,600. Based on the available information, the holders of ordinary shares amounting to more than 3% of the share capital are detailed below: (1) Aurelia S.r.l %; Codelfa S.p.A %; Argo Finanziaria S.p.A %. (2) ASTM S.p.A ; Albenga Garessio Ceva S.p.A. 0.06%; Ativa S.p.A. 0.02%. Gavio Group 59.12% Treasury shares 6.64% (1) (2) Outstanding shares 34.24% Total % ASTM S.p.A. on the stock exchange security performance in 2016 Information on the security No. of shares as at 31 December ,998,600 Treasury shares as at 31 December 2016 (6,577,706) Outstanding shares as at 31 December ,420,894 Market capitalisation as at 31 December 2016 (million EUR) balance dividend per share (June 2016, EUR) interim dividend per share (November 2016, EUR) 0.20 Listing as at 30 December Maximum price in the period 1 January 31 December 2016 (27 May 2016) Minimum price in the period 1 January 31 December 2016 (5 December 2016) 8.89 Average daily volumes in the period 1 January 31 December 2016 (thousands of shares) 72 14

15 Group structure and business segments ASTM is an industrial holding company working primarily in the management of motorway networks under concession and in the design and construction of major infrastructure. Specifically, the Group is engaged in the management of motorway networks under concession through SIAS S.p.A., the largest motorway operator in north western Italy (a 63.4% owned subsidiary), listed on the Borsa Italiana Italian Electronic Stock Market (MTA), and Ecorodovias Infraestrutura e Logística S.A., Brazil s third largest motorway operator (jointly controlled through an effective holding of approximately 41% of the share capital), a Brazilian holding company listed on the Novo Mercado BOVESPA. The Group is also engaged in the field of major infrastructure works in Italy and worldwide through its subsidiary Itinera S.p.A., a leading national player in the sector. The current structure of the Group only with regard to the main investee companies (1) is detailed below: ( ) ( ) ( ) ( )( ) 1 from Ativa from Sitaf 1.08 Holding Companies Motorway Companies Urban mobility sector licensees 2 Construction Companies IT Services Parking areas Engineering Companies ( ) Holding company operating in the parking sector, which holds the following equity investments: Fiera Parking (MI) 99%, Parcheggio Piazza Meda (MI) 50%, Parcheggio Piazza Trento e Trieste (MB) 50%, Parcheggio Via Manuzio (MI) 50%, Parcheggio Piazza Vittorio (TO) 50% ( ) With effect from 1 July 2016, ASTM, following the contribution of the investments held in Itinera S.p.A. by Argo Finanziaria S.p.A. and by its subsidiary Codelfa, directly and indirectly holds an interest equal to the entire share capital of Itinera S.p.A., except for 1 share. ( ) Based on the contractual agreements, this percentage interest corresponds to 50% of the voting rights ( ) On 3 October 2016, the shareholders' meeting of ABC Costruzioni S.p.A. approved the merger of ABC Costruzioni S.p.A. and Itinera S.p.A. ( ) Brazilian holding company (listed on the Novo Mercado BOVESPA and jointly controlled), which holds companies operating in the motorway concession and logistics sectors, as detailed below (1) The entire list of investee companies is included in the "Notes Scope of consolidation" in the consolidated financial statements. 15

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17 Management Report

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19 ASTM S.p.A. Management Report 2016 SIGNIFICANT EVENTS AND NEW INITIATIVES SHARE CAPITAL INCREASE WITH THE EXCLUSION OF THE PRE EMPTION RIGHT AND CONTRIBUTION OF THE CONTROLLING INTEREST IN ITINERA S.P.A. BY ARGO FINANZIARIA S.P.A. AND CODELFA S.P.A. On 28 April 2016, the Shareholders Meeting approved an increase in the share capital of ASTM S.p.A., against payment and with exclusion of the pre emption right, in accordance with article 2441, paragraph four, clause one, of the Italian Civil Code, for a maximum overall amount of EUR 5,499,300.00, plus a share premium of EUR 122,524, to be executed through the issue of 10,998,600 ordinary shares with no par value and with regular dividend rights, at an issue price of EUR per share, through the contribution by Argo Finanziaria S.p.A. and its subsidiary Codelfa S.p.A. of the equity investments held in Itinera S.p.A. representing a total of 53.35% of its share capital. As a result of the contribution, formalised on 11 May 2016 and effective as of 1 July 2016, ASTM S.p.A. will hold, directly and indirectly, equity interests equal to the entire share capital of Itinera S.p.A., except for one single share. The transfer of control in Itinera to ASTM S.p.A. will enable the company s strategic profile to be strengthened, focused on the development of its greenfield concessions business, and opportunities to be seized as they arise in the national and international markets, in particular in South America, based on recent agreements made with CR Almeida S.A. for the acquisition of joint control over Ecorodovias Infraestrutura e Logística S.A.. BRAZIL ACQUISITION OF JOINT CONTROL OF ECORODOVIAS INFRAESTRUTURA E LOGÍSTICA S.A. As mentioned in previous reports, on 4 May 2016, ASTM S.p.A. and SIAS S.p.A., through IGLI S.p.A. 1, closed an agreement with CR Almeida S.A. Engenharia e Construções ( CR Almeida ) for the acquisition of joint control by IGLI S.p.A., with Primav Construções e Comércio S.A. ( Primav, a wholly owned subsidiary of CR Almeida), of the new Brazilian company Primav Infraestrutura S.A. (the Newco ), into which the following interests were transferred: (i) 64% of the share capital of Ecorodovias Infraestrutura e Logística S.A. ( Ecorodovias ), a company listed on the Novo Mercado BOVESPA which manages approximately 1,860 km of motorways in Brazil and holds controlling shareholdings in companies operating in the logistics and port sectors; (ii) 55% of the share capital of Concessionária Monotrilho Linha 18 Bronze S.A. ( VEM ABC ), a company engaged in the urban mobility sector; (iii) a financial debt of approximately BRL 2,571 million plus interest charges accruing from 1 January 2016 to the date of the agreement. The agreement was closed through the subscription by IGLI S.p.A. of new share capital in the Newco totalling BRL 2,104 million (equal to approximately EUR 476 million 2 ), as the result of which ASTM S.p.A. and SIAS S.p.A., through the subsidiary IGLI S.p.A., have acquired an equity interest of 64.1% of the share capital of the Newco (with an effective corresponding holding of approximately 41% of Ecorodovias and approximately 35% of VEM ABC). The remaining 35.9% of the share capital of the Newco is held by CR Almeida through Primav. Under additional agreements made between the parties, the original investment in the new share capital subscribed by IGLI S.p.A. in the Newco was reduced by BRL 120 million (equal to approximately EUR 27 million 2 ) in exchange for a loan of the same amount by IGLI S.p.A. to Primav, to be repaid commencing as of 2018 in five annual instalments plus interest payable at an annual interest rate equal to the Brazilian Interbank Deposit Rate ( CDI ). 1 With regard to the transaction in question, on 13 January 2016, ASTM S.p.A. and SIAS S.p.A. entered into an investment agreement and a shareholders agreement to regulate the amount of their respective investments and their mutual relations, establishing inter alia that the investment in the Brazilian Newco will be made through IGLI S.p.A. (100% owned by ASTM S.p.A.). In compliance with the provisions of the agreement, SIAS S.p.A. purchased shares of IGLI S.p.A. from ASTM S.p.A. for a value of around EUR 25.8 million and in February 2016, SIAS S.p.A. subscribed a reserved share capital increase of IGLI S.p.A. for an amount of roughly EUR million. Following that transaction, SIAS S.p.A. acquired 40% of the share capital of IGLI S.p.A., while the remaining 60% was retained by ASTM S.p.A. 2 Calculated on a EUR/BRL exchange rate of 4,4189, corresponding to the exchange rate fixed by hedging derivatives. 19

20 ASTM S.p.A. Management Report 2016 As a result of the aforementioned transactions, the share capital of the Newco is divided into ordinary shares (61.8% of the share capital) and preference shares without voting rights (38.2% of the share capital). At the closing date of the transaction, CR Almeida, through Primav, held 50% of the ordinary shares, with the other 50% held by IGLI S.p.A., while 13.09% of the preference shares were held by CR Almeida, through Primav, and 86.91% held by IGLI S.p.A.. The preference shares of the Newco held by CR Almeida were pledged as security on the repayment of the loan provided by IGLI S.p.A. to Primav. In the first few months of 2017, following discussions with CR Almeida concerning, among other things, the possible early repayment of the loan, IGLI concluded an agreement whereby upon repayment of the aforementioned loan and payment of 55 million Reais (approx. EUR 17 million at current exchange rates) it will acquire all Primav preferred shares indirectly held by CR Almeida. Based on the above agreement, IGLI will hold 69.1% of the share capital of the Newco which corresponds, in transparency, to approximately 44.2% of the share capital of Ecorodovias. The arrangements have enabled the Group to become the world s fourth largest toll motorway operator, with a network of approximately 3,317.1 km of roads and to successfully diversify its interests at the international level and grow in the concessions and in the greenfield development sectors. 20

21 ASTM S.p.A. Management Report 2016 OPERATING ACTIVITIES MANAGEMENT OF EQUITY INVESTMENTS In addition to the contribution of the equity investment in Itinera S.p.A. and acquisition of joint control of Primav Infraestrutura S.A., below are the main transactions performed over the period in relation to equity investments: On 22 February 2016, the subsidiary Satap S.p.A. was awarded, under a public call for tenders held by the Municipality of Ceriale, 4,500 shares, equal to 0.75% of the share capital of Albenga Garessio Ceva S.p.A., for a total outlay of EUR 58 thousand. As a result of the above acquisition and the share capital reduction following the cancellation of 106,297 shares held by the Metropolitan City of Turin and the Provincial Administration of Imperia, the holding of the Group in the above mentioned company amounted to %. On 30 March 2016, SIAS S.p.A. acquired 9,900 shares (equal to 0.006% of the share capital) in SALT S.p.A. which were offered for sale by the Chamber of Commerce of Arezzo, for a total amount of EUR 42 thousand; As a result of said purchase, the stake held in this Company is now equal to % of the share capital. During the reporting period, the subsidiary SALT S.p.A. acquired a total of 7,745,197 shares (equal to 7.98% of the share capital) in Autocamionale della Cisa S.p.A. for a total outlay of EUR 17.2 million. As a result of the purchase, the Group s stake in this Company is now equal to 99.35% of the share capital. The subsidiary Finanziaria di Partecipazioni e Investimenti S.p.A., as part of the commitments undertaken in the investment project between Compagnia Aerea Italiana S.p.A. and Etihad Airways P.J.S.C., subscribed 27,344,466 new shares in Compagnia Aerea Italiana S.p.A. for a total amount of EUR 0.3 million. The subsidiary Finanziaria di Partecipazioni e Investimenti S.p.A. subscribed 109,143 new shares in Banco Popolare Società Cooperativa for a total outlay of EUR 0.3 million. In July 2016, the subsidiary SALT S.p.A. purchased 613,735 shares (equal to 0.76% of the share capital) of Autostrada dei Fiori S.p.A. from the Province of Savona, for a total amount of EUR 3.2 million. As a result of the purchase, the Group s stake in this Company is now equal to 70.92% of the share capital. On 13 September 2016, Autostrada dei Fiori S.p.A. acquired an additional 66,253 shares (equal to 0.73% of the share capital) of Autostrada Torino Savona S.p.A., which were offered for sale by FCT Holding S.p.A. at a unit price per share of EUR 0.73 (for a total amount of EUR 48 thousand). As a result of the said acquisition, the stake that is currently held in this Company is equal to 100% of the share capital. On 23 December 2016, Itinera S.p.A. purchased another 17,419,991 shares Tangenziale Esterna S.p.A. from Salini Impregilo S.p.A. following the agreements entered into on 25 November As a result of the purchase, the Group s is now equal to 18.69% of the share capital. In November 2016, Itinera S.p.A. purchases an additional 15% stake in Urbantech S.p.A.; following this additional purchase, Itinera S.p.A. now It holds 100% of the share capital. 21

22 ASTM S.p.A. Management Report 2016 On 19 September 2016 the Boards of Directors of both companies approved the merger of ABC Costruzioni S.p.A. into Itinera S.p.A.. On 3 October 2016 the respective shareholders meetings of both companies approved the merger of ABC Costruzioni S.p.A. with Itinera S.p.A.. Again with reference to corporate transactions undertaken with the aim of achieving industrial and corporate integration of the Group companies engaged in synergistic businesses, the following are highlighted: Merger Autostrada Torino Savona S.p.A./Autostrada dei Fiori S.p.A. On 21 and 22 November 2016, the Shareholders Meetings of Autostrada Torino Savona S.p.A. and Autostrada dei Fiori S.p.A. approved the plan for the merger of Autostrada Torino Savona S.p.A. with Autostrada dei Fiori S.p.A.. Merger Autocamionale della Cisa S.p.A./SALT S.p.A. On 12 and 15 December 2016, the Shareholders' Meetings of Autocamionale della Cisa S.p.A. and SALT p.a approved the plan for the merger of Autocamionale della Cisa S.p.A. with SALT p.a.. With reference to the integration of the companies holding motorway concessions, it should be noted that the above described mergers are subject to obtaining the relevant authorisations from the Granting Body. Treasury shares During the financial year ASTM S.p.A. purchased 1,575,378 treasury shares (equal to 1.591% of the share capital), for a total amount of EUR 15.6 million. 22

23 ASTM S.p.A. Management Report 2016 REGULATORY FRAMEWORK AND TOLL RATES As mentioned in previous reports, based on provisions set out in the Italian Interministerial Decrees issued on 31 December 2015 by the Ministry of Infrastructure and Transport ("MIT") in agreement with the Ministry of Economy and Finance ("MEF"), from 1 January 2016 the following toll increases were approved for the licensees in which the ASTM Group holds investments, specifically: +6.50% for SATAP SpA (A4 Torino Milano section), whose Economic Financial Plan ("PEF") is fully operational following the registration by the Court of Auditors of the second Addendum entered into with the MIT in December 2013; +0.03% for ATIVA S.p.A.; +2.10% for Tangenziale Esterna S.p.A.. For all the other motorway stretches managed by subsidiaries (including jointly controlled companies) of the SIAS Group and, in particular, by SATAP SpA (A21 Torino Piacenza stretch), Autostrada Torino Savona SpA (A6), Autostrada dei Fiori SpA (A10), SALT SpA (A12), Autocamionale della Cisa SpA (A15), SAV SpA (A5) and Società di Progetto BreBeMi SpA (A35) the toll adjustments were provisionally suspended considering that the relevant Economic Financial Plans were in the inquiry phase with the competent Ministries. In this regard, according to the related year end Italian Interministerial decrees: (i) MIT should request (as it effectively did) that the proposed Economic Financial Plans formulated by the aforementioned licensees be registered with the CIPE by 1 February 2016 for the related opinion, (ii) the final toll adjustment for 2016 was to be determined through Italian Interministerial Decrees approving the Economic Financial Plans and would be immediately applicable, (iii) the recovery of the toll adjustment for the period of suspension from 1 January 2016 to the issue date of the Decrees approving the Economic Financial Plans was to be recognised on approval of the toll adjustment for All the subsidiary licensees have duly taken legal action both against the alleged illegitimate suspension decrees on the grounds that they subordinate the suspended toll adjustments to a process that is still underway (approval of the Economic Financial Plan) and falls within the competence of the Ministry itself and against the non response of the Public Administration to the failure to approve the Economic Financial Plans within the legal time limits. As regards the undue suspension of toll adjustments, in October a favourable judgement was reached on the action brought by SAV S.p.A. before the Regional Administrative Court of Valle d Aosta. The court accepted the appeal, declaring the suspension of the toll rate adjustment for 2016 to be illegitimate and giving the granting body 60 days to comply, giving SAV S.p.A. the right to request the appointment of an Acting Commissioner if the Ministries fail to comply by the deadline. In addition, regarding the appeal filed by the subsidiary Autostrada dei Fiori SpA in relation to the failure to update the Economic Financial Plan, the Liguria Regional Administrative Court has ruled that the state administration was in breach, setting a deadline of 30 days for it to comply, giving Autostrada dei Fiori SpA the right to request the appointment of an Acting Commissioner if the Ministries fail to comply by the deadline. Regarding the appeals filed by the subsidiaries SALT SpA, Autocamionale della Cisa SpA, Autostrada Torino Savona SpA and SATAP SpA (A21 Section) in relation to the failure to update the Economic Financial Plan, the Lazio Regional Administrative Court has ruled (in judgments published on 2 and 3 November 2016) that the state administration was in breach, setting a deadline of 30 days for it to comply, giving the aforesaid companies the right to request the appointment of an Acting Commissioner if the MIT (Ministry for Infrastructure and Transport) and the MEF (Ministry for the Economy and Finance) fail to comply by the deadline. At the date of this report, the process of approval of the PEF of the Subsidiaries is not yet completed, while it is worth noting that during 2016, the PEF of Bre.Be.Mi. was re balanced. 23

24 ASTM S.p.A. Management Report 2016 However, it should be noted in this regard that CIPE, in its meeting of last 10 August, expressed a favourable opinion, with observations and recommendations, on the updating of the PEFs. During the period, negotiations continued with the MIT to identify compensatory measures, in the form of the redetermination of concession terms and amendments to some concession clauses, which can support the necessary investments, in the absence of state aid, and with socially sustainable tolls. As highlighted in previous reports, the foregoing initiatives were launched when the Italian government, along the precedent set in France, announced its intention to file with the competent European Union authorities a stimulus plan for the sector which involved the licensee companies belonging to the SIAS Group. The plan contemplated compensatory and viability measures granted in exchange for infrastructure investments in disadvantaged stretches of motorways. More specifically, cross support/financing solutions between the following stretches are currently being assessed: (i) the Asti Cuneo (A33), Torino Piacenza (A21) and Torino Milano (A4) stretches, in order to functionally complete the Asti Cuneo stretch, and (ii) the Sestri Levante Livorno (A12 SALT) and Parma La Spezia (A15 Autocamionale della Cisa) motorway sections, to enable, among others, the completion of Lot 1 of TI BRE without the contractually agreed toll increases. As mentioned, the negotiations are ongoing and, at this time, it is not possible to predict their outcome. The lack of progress of the aforementioned project of integration/cross financing is delaying the opportunity for the subsidiary Asti Cuneo SpA to accomplish its corporate purpose. In this respect, it should be noted that in May 2014 the Company prepared and submitted to the Granting Body a proposal for the PEF review, to which the Company is still awaiting for a reply and an assessment of competent Bodies; The continuation of this impasse situation required the identification of which actions, including legal ones, need to be taken in order to protect the company and the Concession activity. In particular, it should be noted that, in the non desirable scenario in which no agreement on the rebalancing of the PEF is reached, the Company shall be entitled to terminate the concession contract, with the payment of the net value of the works executed and fully financed by the licensee company (equal to around EUR 318 million, as per the Financial Statements at 31 December 2016) and the relevant accessory costs (including penalties and other costs incurred or to be incurred as a result of contract termination). In this case, the Company would also put in place the necessary actions aimed at compensation for the failure to recognize the adequate return on invested capital, which as mentioned above amounts to EUR 318 million (on this matter, the sole value of the figurative entries updated at the end of 2016 amounted to about EUR 180 million), in addition to the request relating to the non collection of the return on capital still to be invested (at least in relation to design lots approved so far by the granting Ministry). It should also be noted that, in order to avoid losing the administrative permits obtained, the licensee in view of the nonapproval of the executive plan for lot II.6 by the MIT, delivered in October 2015 has brought administrative proceedings before the Piedmont Regional Administrative Court to obtain an order to compel the Ministry to issue the decree approving said project. With ruling 1075/2016 published on 27 July 2016, the Piedmont Regional Administrative Court declared the silence of the ministry on the approval of the executive plan presented by the Granting Body to be illegitimate. The Ministry submitted an appeal to the Council of State for the said judgment to be amended. In ruling 4725/2016 published on 20 October, the Council of State rejected the application for precautionary relief submitted by the Ministry, confirming the judgment of the Regional Administrative Court of Piedmont. The MIT subsequently notified the licensee not to proceed with the approval of the executive project for lack of funding. Asti Cuneo SpA consequently appealed the refusal to grant the approval during At this stage, the situation of the Auto via Padana S.p.A. SPV subsidiary should be highlighted. To this end, on 13 May 2015, the MIT had notified the final award to the temporary grouping of companies consisting of SATAP (with a 70% share) and 24

25 ASTM S.p.A. Management Report 2016 Itinera (with a 30% share) of the concession for the "A21 Piacenza Cremona Brescia" motorway, with a duration of 25 years, whose tender was held in 2012 e for which an invitation to take part in the restricted procedure was received in November On 2 December 2015 shareholders SATAP SpA (70%) and Itinera SpA (30%) set up the project company Autovia Padana SpA which, pursuant to Art. 156 of Italian Legislative Decree no. 163/06, automatically took over from the above mentioned temporary grouping of companies in managing the awarded tender. Despite the time that has elapsed, we must unfortunately note that, at the date of these financial statements, the license contract has not yet been signed, due to delays on the part of the Granting Body, which are causing damage to the Company and the Group. In particular, the main reason for the non conclusion of the procedure seems to be the in depth investigation that the granting authority initiated with respect to the implementation of European Directive no. 1999/62/EE and subsequent amendments and additions (Eurovignette Directive), provided for by the tender call. This legislation is grounded in a precise Community obligation laid down for new licenses, stipulating that motorway Licensees of Member States must introduce a variability in the charge for the infrastructure (toll) based on the pollutant emission category (EURO) of heavy vehicles (classes 3, 4 and 5). As mentioned, the delay causes damage to the group, which as far back as December 2015, in order to fund the initiative, signed a loan agreement for EUR 270 million, in addition to a VAT line of EUR 66 million, loans that have already reached maturity and have been renewed twice. It is clear that for some time the Group has been forced to use resources in an unproductive way, taking away lines of credit from other gainful employment and sustaining costs related to the availability of lines. Actions are therefore being considered to resolve the situation for the protection of the acquired rights. By 15 October 2016, the above mentioned Group concession holders also reported to the Granting Body the toll rate increase requests for the year 2017, involving the recovery of the toll increase not paid in 2015 and 2016, and no change in the financial effects. On the basis of what was established by the Intergovernmental Decrees issued on 30 December 2016 by the MIT in conjunction with the MEF, from 1 January 2017 toll rate increases have been recognized for the licensees affiliated with the SIAS Group, with different criteria in relation to the effectiveness or otherwise of the new PEF. In particular, the subsidiary SATAP SpA (A4 Torino Milano section), whose PEF is fully effective following the registration by the Court of Auditors of the second Addendum signed with MIT in December 2013, was recognized a toll rate increase amounting to %. As for the Company with the Economic Financial Plan in progress, the following toll rate increases have been recognized: +0.85% for SATAP S.p.A. A21 Torino Piacenza Section; +0.24% for Autocamionale della Cisa S.p.A.; +2.46% for Autostrada Torino Savona S.p.A.; 0% for Autostrada dei Fiori S.p.A., SALT p.a. and SAV S.p.A. With respect to joint ventures, the two with an updated PEF, Tangenziale Esterna S.p.A. and Brebemi S.p.A., received a toll adjustment in line with their requests, of 1.90% and 7.88% respectively; ATIVA S.p.A., whose concession contract expired in August 2016, achieved a toll increase of 0.88%. With reference to the Companies with PEF in progress, please note that the related ministerial decrees show that: (i) the approval procedure is still underway for the PEF update, which provides for the recovery of not yet recognised toll increases; (ii) pending finalisation of the PEF, the toll increase for 2017 was determined based on the currently applicable PEF, without prejudice to any recovery; (iii) any positive or negative toll recovery required, including those pertaining to previous years, shall be determined after the finalisation of the PEF. In relation to the above, the Group's subsidiaries have triggered legal action in the appropriate forums against the MIT decrees. 25

26 ASTM S.p.A. Management Report 2016 With reference to the failed recognitions of toll rates by MIT for Licensees with PEF in progress, please note that: for FY 2015, the MIT and the Group companies had signed a memorandum of understanding providing for the application of increases capped at 1.50%, and the recovery of the reduced receipts under the PEF pending approval, for equivalent financial effects; for 2016, as previously mentioned, the MIT had unilaterally suspended the toll rate increases, given the fact that the related PEFs were still under investigation by the relevant ministries. In this regard, concerning the above mentioned years, the difference between actually implemented increases and requested increases amounts to about EUR 51 million, as can be seen from the following table: amounts in millions of EUR Total SATAP A21 (6.4) (10.4) (16.8) SALT (3.5) (4.7) (8.2) CISA (4.6) (6.4) (11.0) ADF (3.1) (5.9) (9.0) ATS (1.2) (3.1) (4.3) SAV (0.9) (1.0) (1.9) Total (19.7) (31.5) (51.2) 26

27 ASTM S.p.A. Management Report 2016 TRAFFIC PERFORMANCE The overall traffic performance for 2016, as compared to the same period in 2015, is detailed below: (millions vehicle/km) Changes Light Heavy Total Light Heavy Total Light Heavy Total Total Q1: 1/1 31/3 1, ,059 1, , % 3.07% 6.19% Total Q2: 1/4 30/6 1, ,424 1, , % 3.41% 1.26% Total Q3: 1/7 30/9 2, ,861 2, , % 1.79% 1.76% Total Q4: 1/10 31/12 1, ,213 1, , % 2.45% 1.60% Total 1/1 31/12 7,264 2,293 9,557 7,150 2,233 9, % 2.67% 1.85% Effect of leap year 0.24% Adjusted change in traffic 1.61% As shown in the table above, traffic data for FY 2016 (the period which also benefits from the extra day of February, given it was a leap year) showed with reference to the categories of "light vehicles" and "heavy vehicles" further consolidation in the positive trend already witnessed in the previous year. With respect to each transit category, in the first nine months of FY 2016 there was growth in traffic volumes for "heavy vehicles" (+2.67%) and "light vehicles" (+1.59%). The uneven trend between individual quarters of the growth in light vehicles was affected by the Easter holidays in March (April in 2015) and the adverse weather conditions that affected the north western regions in May and June 2016, as well as by some important events that took place in 2015, such as the Exposition of the Shroud (Turin 19 April 24 June) and the EXPO 2015 (Milan, 1 May 31 October). Despite the recovery that began in 2014, "traffic volumes" are lower than pre crisis figures (for example, 2007) by approximately 7.2%, as shown in the table below (1) : (1) Changes in the scope of consolidation for the period have not been taken into account. Therefore, "traffic volumes" concerning Ativa S.p.A., Autostrada Asti Cuneo S.p.A. and Autostrada Torino Savona S.p.A. have not been considered. 27

28 ASTM S.p.A. Management Report 2016 The traffic performance by single Licensee is shown below: (millions vehicle/km) 1/1 31/12/2016 1/1 31/12/2015 Changes Company Light Heavy Total Light Heavy Total Light Heavy Total SATAP S.p.A. Tronco A4 1, ,205 1, , % 2.41% 0.77% SATAP S.p.A. A21 section 1, ,008 1, , % 3.46% 2.77% SAV S.p.A % 0.94% 2.57% Autostrada dei Fiori S.p.A , , % 4.51% 1.05% SALT p.a. 1, ,887 1, , % 1.73% 2.91% Autocamionale della Cisa S.p.A % 0.48% 1.69% Autostrada Torino Savona S.p.A % 2.38% 0.98% Autostrada Asti Cuneo S.p.A % 4.73% 3.92% Total 7,264 2,293 9,557 7,150 2,233 9, % 2.67% 1.85% Effect of leap year 0.24% Adjusted change in traffic 1.61% INVESTMENTS Motorway sector The investments made during the last two years are detailed below with reference to the motorway sector: (amounts in millions of EUR) SATAP S.p.A Autocamionale della Cisa S.p.A Autostrada Asti Cuneo S.p.A Autostrada dei Fiori S.p.A SALT S.p.A SAV S.p.A Autostrada Torino Savona S.p.A TOTAL The reduction in the amount of investment in motorway infrastructure by the Group over the previous year reflects both the completion of several important works as well as the reduction in investment due to the failure to update the Economic Financial Plans, mentioned earlier. 28

29 ASTM S.p.A. Management Report 2016 ECONOMIC, EQUITY AND FINANCIAL DATA GROUP ECONOMIC DATA The comparison between income items for the financial years 2015 and 2016 reflects the consolidation (effective from 1 July 2016) of the Itinera Group and the ACI Group. (amounts in thousands of EUR) Changes Motorway sector revenue operating activities (1) 1,007, ,317 32,810 Construction sector revenues (2) 105,635 1, ,320 Engineering sectors revenues 10,292 15,656 (5,364) Technology sector revenue 36,069 66,475 (30,406) Parking sector revenue (3) 3,087 6,368 (3,281) Other revenues (4) 45,830 40,199 5,631 Total turnover 1,208,040 1,104, ,710 Operating costs (1)(2)(4) (543,528) (458,497) (85,031) Gross operating margin 664, ,833 18,679 Non recurring items (1,844) 3,336 (5,180) "Adjusted" gross operating margin 662, ,169 13,499 Net amortisation/depreciation and provisions (313,181) (296,519) (16,662) Write down of goodwill (1,901) 1,901 Operating income 349, ,749 (1,262) Financial income 47,434 39,810 7,624 Financial charges (118,317) (122,959) 4,642 Capitalised financial charges 21,316 24,566 (3,250) Write down of equity investments (12,672) (3,078) (9,594) Profit (loss) of companies accounted for by the equity method (13,890) 507 (14,397) Net financial income (76,129) (61,154) (14,975) Profit before tax 273, ,595 (16,237) Income taxes (current and deferred) (96,740) (100,785) 4,045 Profit (loss) for the period 176, ,810 (12,192) Profit assigned to minority interests 81,091 80, Profit assigned to the Parent Company's Shareholders 95, ,121 (12,594) (1) Amounts net of the fee/additional fee payable to ANAS (EUR 74.1 million in 2015 and EUR 72.1 million in 2015). (2) With regard to concession holder companies, the IFRIC12 sets out full recognition in the Profit and Loss Account of costs and revenues for "construction activity" concerning noncompensated revertible assets. In order to provide a clearer representation in the table above, these components amounting to EUR million for the FY 2016 of which EUR million relating to the motorway sector and EUR 11.9 million relating to the construction sector (EUR million in 2015, for the motorway sector alone) were reversed for the same amount from the corresponding revenue/cost items. (3) Given the acknowledgement of a minimum guaranteed amount by the Granting Body, IFRIC12 requires: (i) the recognition in the financial statements of a financial receivable for the discounted amount of minimum cash flows guaranteed by the Granting Body; (ii) the decrease in revenues with regard to the portion attributable to the guaranteed minimum amount; and (iii) the recognition of financial income against said financial receivable. With regard to above, proceeds from parking activities and the gross operating margin of the subsidiary Fiera Parking S.p.A. were reduced by EUR 4 million in 2016, due to the so called "guaranteed minimum amount". (4) Amounts net of cost/revenues reversals of EUR 3.1 million in 2016 (EUR 7.1 million in 2015). In 2016, "Turnover" at Group level exceeded EUR 1.2 billion. The item "motorway sector revenue" totalled EUR 1,007.1 million (EUR million in FY 2015) and breaks down as follows: (amounts in thousands of EUR) Changes Net toll revenues 978, ,445 33,419 Rental income Royalties from service areas 28,263 28,872 (609) Total motorway sector revenue 1,007, ,317 32,810 29

30 ASTM S.p.A. Management Report 2016 The increase in "net toll revenue", equal to EUR 33.4 million (+3.53%) was due to the growth in traffic volumes for EUR 19.6 million (a 1.85% increase which had a 2.07% effect on "net toll revenue" considering the traffic/toll mix) and to a +1.46% increase in tolls as of 1 January 2016 (EUR 13.8 million), partially limited to the Torino Milano section. The decrease in rental income royalties from service areas was due to the decrease in consumption in service areas. the change in the construction sector is mainly attributable for EUR million to the consolidation of the Itinera Group and the ACI Group as of 1 July The decrease in revenues of the "engineering" sector was mainly due to lower activities carried out for third parties by Group companies. The reduction reflects the persistent uncertainty in this sector and, especially, the delayed approval of the licensees economic financial plans. The "technology" sector saw a decrease in activities with third parties, mainly attributable to the completion of certain contracts in the previous year. This reduction is only partially reflected in "operating costs". Parking sector revenue refers to the payments received (net of the guaranteed minimum amount ) by Fiera Parking S.p.A.; the figure for FY 2015 benefits from higher revenue from the EXPO 2015 event (Milan, 1 May 31 October). The increase in operating costs (equal in total to EUR 85 million) was due to: (i) the consolidation of Itinera S.p.A. and ACI s.c.p.a. as of 1 July 2016, (ii) the reduction in the costs of the engineering and technology sectors due to lower work carried out for third parties, (iii) higher costs paid by the service sector and (iv) lost costs for the motorway sector. With regard to the above, the gross operating margin increased by EUR 18.7 million and reflects the changes in the Group's operating sectors. In detail: (amounts in millions of EUR) FY 2016 FY 2015 Changes Motorway sector Construction Sector Engineering Sector (0.3) Technology Sector (12.2) Parking Sector (1.4) Services Sector (holding companies) (16.0) (10.4) (5.6) Total The entry "non recurring items", negative by EUR 1.8 million, is the result of: (i) success and discretionary fees paid to the advisers following the acquisition of joint control over Ecorodovias Infraestrutura e Logística S.A.. (EUR 2.7 million) and (ii) the payment to the subsidiary Autostrada dei Fiori S.p.A. of compensation for the occupation in the years 2014 and 2015 of the areas relating to Ventimiglia vehicle terminal (EUR +0.8 million). In FY 2015, this item, positive by EUR 3.3 million, referred: (i) for an amount of EUR 2 million, an insurance refund (received from the subsidiary Autostrada dei Fiori S.p.A. for the expenses incurred for the flooding events occurred in January 2014 on the managed section), (ii) for EUR 1.4 million, an extraordinary contribution granted to Fiera Parking S.p.A., (iii) for EUR 3.5 million, "one off" income which was recorded based on a favourable ruling of risks provisions set aside in FY 2011 by the subsidiaries SATAP S.p.A. and Autocamionale della Cisa S.p.A. with regard to integration requests of sub concession fees for the financial years and (iv) the amounts recognised, for a total of EUR 3.5 million, to a former Director and a former General Manager of the Company as part of settlement agreements (EUR 2.5 million by ASTM S.p.A. and EUR 1 million by SIAS S.p.A.). The item "net amortisation/depreciation and provisions" totalled EUR million (EUR million in 2015). The increase in this item is the result (i) of the consolidation of Itinera Group figures (EUR 2.9 million), (ii) higher amortisation 1 With respect to profit margin variance, the consolidation of the Itinera Group, effective from 1 July 2016, resulted in an increase of EUR 6.6 million. 30

31 ASTM S.p.A. Management Report 2016 for risks and charges and an increase in depreciation for non compensated revertible assets (1) of EUR 27 million, (iii) an increase in provisions for risks and charges and write downs of EUR 0.8 million, and (iv) the positive variance of the provision for restoration, replacement and maintenance" for EUR 14 million. In the previous period, the entry "write down of goodwill" referred to the so called impairment loss concerning the goodwill entered for Autocamionale della Cisa SpA and SALT SpA. The change in the item financial income is due to: (i) higher interest income and foreign exchange gains accrued on Brazilian investments and (ii) lower capital gains from the disposal of equity investments (in the previous financial year, the disposal of equity investments held in Banca Popolare di Milano, Società per Autostrada Tirrenica S.p.A. and Assicurazioni Generali S.p.A. had generated capital gains of EUR 11 million in total). The item "financial charges" including the charges for interest rate swap agreements decreased due to (i) the reduction in the average financial indebtedness compared to the same period the previous year and (ii) the effect of the interest rate trend on the variable rate portion of net financial indebtedness. The item "write down of equity investments" mainly refers to the "fair value measurement of the investment in Salini Impregilo S.p.A. savings shares (EUR 5.3 million), Banca Ca.Ri.Ge. S.p.A. (EUR 5 million) and Alerion Clean Power S.p.A. (EUR 2.2 million). The item profit of companies accounted for by the equity method included the share of profits from jointly controlled entities and associated companies. In particular, it results from: (i) profits recorded by SITAF S.p.A. (EUR 8.9 million), ATIVA S.p.A. (EUR 8.6 million), Itinera S.p.A. (EUR 3.5 million for the first half of the year), Road Link Holdings Ltd. (EUR 1.1 million), SITRASB S.p.A. (EUR 0.8 million), by companies operating in the parking sector (EUR 1 million in total) and (ii) the losses attributable to TEM S.p.A./TE S.p.A. (EUR 12.9 million), Autostrade Lombarde S.p.A./Bre.Be.Mi S.p.A. (EUR 8.5 million), Federici Stirling Batco LLC (EUR 2.2 million), OMT S.p.A. ( EUR 0.3 million), Primav Infraestrutura S.A. (EUR 13.8 million), the latter ascribable to the amortisation for the difference between the price paid for the acquisition and the relevant pro rata interest in the shareholders' equity. With regard to the above, the portion of "profit for the period" assigned to the Parent Company s Shareholders amounted to EUR 95.5 million (EUR million in FY 2015). 2 This result, net of any "extraordinary" items ( capital gains from the disposal of investments in FY 2015, higher write downs of equity investments in FY 2016, variances for "non recurring" operating income and costs) shows and improvement compared to the figure for 2015, equal to around EUR 7 million (+7%). 1 Starting from the FY 2016, in accordance with the amendment to IAS 38, the amortisation of non compensated revertible assets in the motorway sector was calculated based on expected traffic development (kilometres) rather than on expected revenue growth (traffic x rate) over the term of the concessions: this new calculation method resulted in a EUR 6.5 million increase in amortisation/depreciation compared to the amount that would have resulted using the previous method. Please note that in calculating the amortisation/depreciation, reference has been made, among other things, to the so called "takeover" values set out in the Economic Financial Plans which are currently being examined by the Granting Body. 2 The table below shows the reconciliation of the profit assigned to the Parent Company's shareholders as per the consolidated financial statements and the relevant "adjusted" value of "extraordinary" items : (amounts in millions of EUR) Difference Profit assigned to the Parent Company's Shareholders consolidated financial statements (12.6) Non recurring items for operating activity (pro rata) 1.9 (0.8) 2.7 Capital gains for FY 2015 (pro rata) (9.4) 9.4 Write down of equity investments "Adjusted" profit assigned to the Parent Company's Shareholders

32 ASTM S.p.A. Management Report 2016 GROUP EQUITY AND FINANCIAL DATA The main items of the consolidated financial position at 31 December 2016, compared with the corresponding figures of the previous year, may be summarised as follows: (amounts in thousands of EUR) 31/12/ /12/2015 Changes Net fixed assets 3,287,603 3,345,352 (57,749) Equity investments and other financial assets 1,344, , ,813 Working capital 42,640 (53,245) 95,885 Invested capital 4,675,064 4,008, ,949 Provision for restoration, replacement and maintenance of non compensated (159,175) (173,594) 14,419 Employee severance indemnity and other provisions (73,235) (60,476) (12,759) Invested capital less provisions for medium and long term risks and charges 4,442,654 3,774, ,609 Shareholders equity and profit (loss) (including minority interests) 2,743,520 2,440, ,456 "Adjusted" net financial indebtedness 1,621,498 1,245, ,991 Other long term payables Deferred income of the payable due to Central 77,636 88,474 (10,838) Equity and minority interests 4,442,654 3,774, ,609 *** The item net financial indebtedness breaks down as follows: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash and cash equivalents 877,185 1,176,540 (299,355) B) Securities held for trading 11,660 11,660 C) Liquidity (A) + (B) 888,845 1,176,540 (287,695) D) Financial receivables 451, ,167 (28,319) E) Bank short term borrowings (44,913) (18,155) (26,758) F) Current portion of medium/long term borrowings (486,831) (176,232) (310,599) G) Other current financial liabilities (*) (282,820) (43,579) (239,241) H) Short term borrowings (E) + (F) + (G) (814,564) (237,966) (576,598) I) Current net cash (C) + (D) + (H) 526,129 1,418,741 (892,612) J) Bank long term borrowings (956,785) (1,208,880) 252,095 K) Hedging derivatives (87,466) (107,018) 19,552 L) Bonds issued (992,744) (1,217,437) 224,693 M) Other long term payables (2,346) (1,671) (675) N) Long term borrowings (J) + (K) + (L) + (M) (2,039,341) (2,535,006) 495,665 O) Net financial indebtedness (**) (I) + (N) (1,513,212) (1,116,265) (396,947) P) Non current financial receivables 49,787 49, Q) Discounted value of the payable due to ANAS Central Insurance Fund (158,073) (178,479) 20,406 R) "Adjusted" net financial indebtedness (O) + (P) + (Q) (1,621,498) (1,245,507) (375,991) (*) Net of SIAS 2.625% convertible bond held by the Parent Company ASTM (equal to approximately EUR million) (**) Pursuant to ESMA Recommendation As at 31 December 2016, the item "net financial indebtedness" totalled EUR 1,513.2 million (EUR 1,116.3 million as at 31 December 2015). The change in the financial year was mainly due to: (i) the capital increase of Primav Infraestrutura S.A. (EUR million) and the interest bearing loan granted to Primav Construções e Comércio S.A. (EUR 27.1 million), (ii) the payment of dividends (FY 2015 final and FY 2016 interim) both by the Parent Company (EUR 39.2 million) and Subsidiaries to Minority Shareholders (EUR 38.4 million), (iv) the implementation of enhancement works on the Group's motorway infrastructure 32

33 ASTM S.p.A. Management Report 2016 (EUR million), (v) the purchase of treasury shares by ASTM S.p.A. (EUR 15.6 million), (vi) the acquisition of holdings and minority interests (EUR 36.8 million) and (vii) the change in net working capital and other variances (EUR 58.9 million), (viii) the payment of the instalment due with respect to the payable due to ANAS Central Insurance Fund (EUR 31 million), (ix) the investments in other fixed assets and minor variances (EUR 13.1 million), which were offset by: (i) the operating cash flow (equal to EUR million), (ii) cash and cash equivalents for Autostrada Albenga Garessio Ceva S.p.A. (EUR 1.3 million), a company consolidated with effect from the current financial year, as well as (iii) the net financial position of the Itinera and ACI Groups, consolidated with effect from 1 July 2016 (EUR 5.9 million). The "net financial position" also includes the positive difference accrued during the year (EUR 19.6 million) with regard to the fair value of the IRS contracts (no cash item). With reference to the structure of the item "net financial indebtedness", the following is noted: the change in the item "cash and cash equivalents" implements, in addition to the above mentioned changes: (i) payment of instalments due for the "current portion of non current debt" (equal to EUR million) (ii) the purchase of securities held for trading (EUR 11.7 million). These outlays were only partially offset by: (i) the refund of an insurance policy that reached natural expiry (EUR 26.9 million) taken out by the subsidiary SATAP SpA; (ii) the use of available credit lines by Autostrada Asti Cuneo SpA (EUR 6.8 million), and (iii) the collection of grants (EUR 16.9 million) and (iv) taking out new loans (EUR 190 million) and of cash and cash equivalents relating to the Itinera and ACI groups; The "securities held for trading" refer to the bank certificates of deposit BMP Brasil; this item includes accrued interest and is calculated at the EUR/BRL exchange rate as at 31 December 2016; the change in the item financial receivables (amounting to EUR 28.3 million) is due to: (i) the repayment of the policy taken out by the subsidiary SATAP SpA in 2010 with Allianz SpA (EUR 26.9 million), (ii) the collection of the above ANAS grants (EUR 16.9 million) (iii) the decrease in the "pledge" current accounts (EUR 0.2 million), offset by (i) the increase in receivables from interconnection (EUR 7.3 million), (ii) confirmation of interest accrued on the loans granted to Primav Construcoes e Comercio S.A. and on the deposit certificates (EUR 3.5 million), (iii) confirmation of income accrued on capitalisation policies (EUR 4.9 million); the change in the item "bank short term borrowings" totalling EUR 26.8 million is attributable to both use by Autostrada Asti Cuneo SpA of available credit lines as well as the change in the scope of consolidation (EUR 19.9 million); the change in the item "current portion of non current indebtedness" is due to (i) repayment of instalments due in 2016 (EUR million), (ii) reclassification from the item "bank debt (non current)" of instalments due within 12 months ( EUR million), (iii) taking out new loans (EUR 190 million); (iv) the assessment of accrued interest (EUR 2 million), and (v) change in the scope of consolidation (EUR 11.5 million); the change in other current financial liabilities was mostly attributable to: (i) the reclassification of the "SIAS convertible bond" due in the month of June 2017 from the item "issued bonds" (EUR 226 million), (ii) the recognition for the portion for the period of the differential, calculated at the time of issue, between the rate of "real interest" and the rate of "market interest" of the convertible bond (EUR 3.5 million), (iii) increase in other liabilities (EUR 10.6 million), partially offset by lower payables for interconnection (EUR 0.9 million); the decrease in the item bank long term borrowings is due to: (i) reclassification, under "current portion of noncurrent indebtedness", of the instalments due within 12 months (EUR million) partially offset by (i) the change in the scope of consolidation with regard to funding of the subsidiary Itinera SpA and Taranto Logistica SpA (EUR 29.5 million) and (ii) the effects related to the "amortised cost" (EUR 1.7 million); 33

34 ASTM S.p.A. Management Report 2016 "hedging derivatives" amount to EUR 87.5 million, due to the recognition of the negative difference concerning the fair value of IRS agreements. As at 31 December 2016, approximately 80% of the consolidated medium/longterm indebtedness is "fixed rate"/"hedged". The all in weighted average rate related to total Group indebtedness is equal to 3.29%; the item "issued bonds" relates to the " bond" and the " bond"; the change was due to the aforementioned reclassification of the " bond" in the item "other current financial liabilities", as well as the effects of the so called "amortized cost". *** With respect to the adjusted net financial position, in addition to the above it is noted that: the item "non current financial receivables" (EUR 49.8 million) represents, as provided for in IFRIC 12 Interpretation, the discounted value of the medium/long term portion of cash flows related to the so called "minimum amount guaranteed by the Granting Body" with regard to concession agreements signed by Fiera Parking S.p.A. and Euroimpianti Electronic S.p.A.; the change in the item "discounted value of the payable due to ANAS Central Insurance Fund", equal to EUR 20.4 million, is due to the payment of the instalments falling due (EUR 31 million) and the charges for discounting the payable itself (EUR 10.6 million). It is noted that the "net financial position" does not include stakes of "investment funds" for approximately EUR 10 million, signed in the year in order to invest cash. * * * The financial resources available at 31 December 2016 are broken down as follows: (amounts in millions of EUR) Cash and financial receivables 1,341 Cassa Depositi e Prestiti loan (pertaining to SATAP S.p.A.) 350 (1) Pool loan (pertaining to SIAS S.p.A.) 270 (1) VAT loan (pertaining to Autovia Padana S.p.A.) 66 (1) Uncommitted credit lines (pertaining to ASTM S.p.A. and consolidated companies) 664 (1) Committed cash credit lines (Itinera Group) 10 (1) Subtotal 1,360 Total financial resources at 31 December ,701 1 This item is detailed in the note Other information (ii) Financial risk management. 34

35 ASTM S.p.A. Management Report 2016 ALTERNATIVE PERFORMANCE MEASURES Pursuant to Consob Communication of 3 December 2015 implementing in Italy the guidelines on Alternative Performance Measures (hereinafter also APM") issued by the European Securities and Markets Authority (ESMA), which are mandatory when publishing regulated information or prospectuses after 3 July 2016, the criteria used to develop the main APMs published by the ASTM Group are described below. The APMs presented in the "Management Report" are considered relevant for assessing the overall operating performance of the Group, the operating segments and the individual Group companies. In addition, the APMs are considered to provide better comparability over time of the same results, although they are not a replacement or an alternative to the results provided in the "Consolidated Financial Statements" according to the IAS/IFRS (official or reported data). With reference to the APMs relating to the consolidated results, it should be noted that, in the Economic, equity and financial data section, the ASTM Group presents reclassified financial statements that differ from those envisaged by the IAS/IFRS included in the Condensed Consolidated Half yearly Financial Statements; therefore, the reclassified consolidated income statement, consolidated statement of financial position and net financial indebtedness contain, in addition to the economic financial and equity data governed by the IAS/IFRS, certain indicators and items derived therefrom, although not required by said standards and therefore called APMs. The main APMs presented in the Management Report and a summary description of their composition, as well as a reconciliation with the corresponding official data, are provided below: a) "Revenues": differs from "Total revenues" in the Consolidate Financial Statements as it does not include (i) revenue for the design and build of non compensated revertible assets, (ii) the toll/surcharge payable to ANAS, (iii) reversal of costs/revenues for consortium companies (iv) and "non recurring" revenue items that the Company does not deem can be replicated. b) Gross operating margin : is the summary indicator of operating performance and is determined by subtracting from the "Total revenue" all recurring operating costs, excluding amortisation and depreciation, provisions and writedowns of intangible and tangible assets. The "Gross operating margin" does not include the balance of non recurring items, the balance of financial items and taxes. c) "Adjusted gross operating margin": is calculated by adding/subtracting non recurring operating costs and revenue from the "gross operating margin". d) Operating income : measures the profitability of total capital invested in the company and is determined by subtracting the amortisation and depreciation, provisions and write downs of intangible and tangible assets from the "gross operating margin. e) "Net invested capital": shows the total amount of non financial assets, net of non financial liabilities. f) "Adjusted net financial indebtedness : is the indicator of the net invested capital portion covered by net financial liabilities and corresponds to "Current and non current financial liabilities", net of "Current financial assets", "Insurance policies" and "Financial receivables from minimum guaranteed amounts (IFRIC 12)". Note that the Adjusted net financial indebtedness differs from the net financial position prepared in accordance with the ESMA recommendation of 20 March 2013, as it includes the Present value of the amount due to ANAS Central Insurance Fund and Non current financial receivables. The adjusted net financial indebtedness statement contains an indication of the value of the net financial position prepared in accordance with the aforementioned ESMA recommendation. g) Operating cash flow : is the indicator of the cash generated or absorbed by operations and was determined by adding to the profit for the year the amortisation and depreciation, the adjustment of the provision for restoration, 35

36 ASTM S.p.A. Management Report 2016 replacement and maintenance of non compensated revertible assets, the adjustment of the employee severance indemnity provision, the provisions for risks, the losses (profits) of companies accounted for by the equity method and the write downs (revaluations) of financial assets, and by subtracting the capitalisation of financial charges. h) "Adjusted" profit assigned to the Parent Company's Shareholders: it shows the profit attributed to the Parent Company's Shareholders, net of "extraordinary" items (capital gains from the disposal of equity investments in FY 2015, higher write downs of equity investments in the FY 2016, difference of "non recurring" operating costs and income. 36

37 ASTM S.p.A. Management Report 2016 FINANCIAL INCOME Motorway sector SIAS Group In 2010, the SIAS Group implemented a financial structure model that diversifies financing sources and centralises the Group's funding activities within SIAS S.p.A., with the subsequent transfer of funds to operating companies, by means of specific intercompany loans. Therefore, SIAS S.p.A. acts as the Group s interface with the debt market in its various forms: lending banks, institutions and parties interested in purchasing bond issues. The implementation of this structure makes it possible to obtain medium/long term committed funds (i) choosing from a variety of financial instruments (mainly bond loans and medium/long term loans) and numerous counterparties (international and national banks or other institutions such as the European Investment Bank and Cassa Depositi e Prestiti S.p.A.), (ii) at better conditions, standardised for the entire Group, (iii) while avoiding any form of structural subordination between creditors at the level of investee companies and the new creditors of SIAS S.p.A. As a result of this financial structure it was possible to create the "creditworthiness" of the Group which derives, in turn, from the "creditworthiness" of the companies with mature concessions, capable of generating significant cash flows, and companies with concessions being developed. In this area, it is noted that the rating agencies Moody s and Fitch assigned a "Group credit rating" for the EMTN programme of SIAS S.p.A. (issues of secured notes) of Baa2 (stable outlook) and BBB+ (stable outlook), respectively. Based on this financial structure, the funds obtained by SIAS S.p.A. are, in turn, lent out to the operating subsidiaries through specific intercompany loan agreements, to support their financial requirements for investments in line with the Economic Financial Plans and/or, in any event, with the needs of the individual companies. It is also worth pointing out that the debt contracted by SIAS S.p.A. as part of this structure is backed by a specific security package in order to guarantee the creditors of SIAS S.p.A. effective access to the operating companies financed, preventing any structural subordination between the creditors of SIAS S.p.A. and the direct creditors of the beneficiary companies of the intercompany loans. 37

38 ASTM S.p.A. Management Report 2016 With regard to the diversification of financing sources, the SIAS Group was able to reduce its exposure towards the banking system, through the issue of the bond loans as part of the EMTN programme and the issue of loans by the EIB. As compared to the total indebtedness, the Group exposure went from 70% as at 31 December 2009 to approximately 33% as at 31 December As regards the concentration of Group funding activities within SIAS S.p.A., the indebtedness of SIAS S.p.A., compared to the total debt of the SIAS Group, went from 19.1% as at 31 December 2009 to 70.6% as at 31 December 2016: (amounts in millions of EUR) Gross financial indebtedness SIAS Group (a) 1,754 2,769 2,658 SIAS S.p.A. Gross financial indebtedness (b) (*) 335 1,940 1,876 Holding company/group gross financial indebtedness ratio (b/a) 19.1% 70.1% 70.6% (*) In 2016, net of the intercompany loan received from the subsidiary SATAP S.p.A. (EUR 160 million). 38

39 ASTM S.p.A. Management Report 2016 ANALYSIS OF 2016 RESULTS OF THE PARENT COMPANY AND THE MAIN INVESTEE COMPANIES ASTM S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Income from equity investments 53,441 49,575 3,866 Other financial income 6,381 9,302 (2,921) Interest and other financial charges (3,049) (3,857) 808 Financial income and charges 56,773 55,020 1,753 Value adjustments of financial assets revaluations 5,178 (5,178) write downs (5,128) (1) (5,127) Other operating income 2,097 5,141 (3,044) Other operating costs (10,169) (12,417) 2,248 Pre tax profit (loss) 43,573 52,921 (9,348) Income taxes 2,114 (1,216) 3,330 Profit for the period 45,687 51,705 (6,018) The items contained in the Parent Company s income statement reflect the industrial holding activity carried out by it. In particular, income from equity investments refers to dividends and interim dividends collected in 2016, mainly by SIAS S.p.A. (EUR 44.9 million), Sineco S.p.A. (EUR 1.6 million), as well as to the capital gains from the sale of shares held in IGLI S.p.A. (EUR 6.5 million). The increase over the previous financial year was mainly due to higher capital gains posted, offset by the absence of dividends distributed by the subsidiary SINA S.p.A.. Other financial income mainly relates to interest accrued on SIAS S.p.A. convertible bonds. The item interest and other financial charges (mainly) refers both to passive interest on the EUR 150 million bank loan granted by Unicredit during the FY 2016 and to interest pertaining to the infra group loan arranged with the associate IGLI S.p.A. repaid in March 2016; the decrease is due to the lower average net financial debt compared to the previous financial year. The item "revaluations" refers to the alignment to the "option component" " related to the SIAS convertible bonds held by the Company at the relevant "fair value". The item "other operating income" represents the compensation for the administrative financial and corporate service activities carried out for Group companies. The said income is offset by "other operating costs", which mainly consist of the costs for employed staff and the costs for services. The change in both the other operating income and other operating costs items is (essentially) ascribable to the termination of the service contract with the subsidiary SATAP S.p.A. as a result of the transfer to the latter of the business line including among other things the staff who performed financial, accounting and corporate services in favour of the subsidiary. 39

40 ASTM S.p.A. Management Report 2016 The main items related to the financial income as at 31 December 2016, compared with those as at 31 December 2015, may be summarised as follows: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash and cash equivalents 42, ,077 (107,269) B) Securities held for trading C) Liquidity (A) + (B) 42, ,077 (107,269) D) Financial receivables 2,752 12,916 (10,164) E) Bank short term borrowings F) Current portion of medium/long term borrowings (149,773) (149,773) G) Other current financial liabilities (251) (276,000) 275,749 H) Short term borrowings (E) + (F) + (G) (150,024) (276,000) 125,976 I) Current net cash (C) + (D) + (H) (104,464) (113,007) 8,543 J) Bank long term borrowings K) Hedging derivatives L) Bonds issued M) Other long term payables N) Long term borrowings (J) + (K) + (L) + (M) O) Net financial indebtedness (I) + (N) (104,464) (113,007) 8,543 (*) Pursuant to ESMA Recommendation As at 31 December 2016, the "net financial indebtedness" of the company totalled EUR 104 million (EUR 113 million as at 31 December 2015). In order to provide IGLI S.p.A. with financial resources for the initiative in Brazil, in the first few days of March 2016 ASTM S.p.A. repaid the EUR 276 million loan, using both the available liquidity and the loan granted by UniCredit S.p.A. to the Company (for an amount of EUR 150 million). With reference to the structure of the item "net financial indebtedness", the following is noted: - With regard to the change in "cash and cash equivalents", it is pointed out that the liquidity deriving from: (I) operations (EUR 37.6 million), (ii) the sale of capitalisation policies (EUR 10.1 million), (iii) the sale of part of the IGLI SpA shares (EUR 25.8 million) and the shares of Alerion SpA (EUR 1.1 million) and (iv) the granting of a bank loan with Unicredit (EUR million) was used (i) for the distribution of dividends ( balance of 2015 and interim 2016) for a total of EUR 39.1 million, (ii) for the purchase of treasury shares (EUR 15.6 million), (iii) for the repayment of EUR million of the loan with the subsidiary IGLI SpA and (iv) for payment of expenses related to the capital increase (EUR 1.3 million); - the item "financial receivables" refers to financial receivables due from the subsidiary SIAS SpA (EUR 2.7 million); The change in this item is due to the aforementioned sale of capitalisation policies; - the item "current portion of non current indebtedness" refers to the loan granted by the bank Unicredit Credit S.p.A.; - the change in the item "other current financial liabilities" refers to repayment of the loan received at the time from the subsidiary IGLI S.p.A. * * * The "Reconciliation statement between the shareholders equity, the profit (loss) for the period of ASTM S.p.A. and the corresponding amounts of the ASTM Group", as required by the CONSOB Communication no. DEM/ of 28 July 2006, is included among the "Consolidated Financial Statements". 40

41 ASTM S.p.A. Management Report 2016 IGLI S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Income from equity investments 272 7,313 (7,041) Other financial income 24,324 3,843 20,481 Interest and other financial charges (7,770) (7,770) Financial income and charges 16,826 11,156 5,670 Value adjustments of financial assets Other operating income Other operating costs (1,159) (189) (970) Pre tax profit (loss) 15,701 10,988 4,713 Income taxes (3,516) (1,999) (1,820) Profit for the period 12,185 8,989 3,196 "Income from equity investments" includes the dividend distributed by the investee company Salini Impregilo S.p.A. amounting to EUR 272 thousand. In the previous year, this item included an amount of EUR 6.6 million related to the gain on the sale of shares held in Banca Popolare di Milano S.c.ar.l.. "Other financial income" is due mainly to (i) interest income on the loan granted to Primav Construcoes e Comercio S.A. (EUR 4.7 million), (ii) interest income on the Brazilian Bank Deposit Certificate (EUR 10.3 million) to (iii) exchange gains arising from the Euro/Real conversion at the exchange rate of 31 December 2016 of the aforementioned loan (EUR 5.7 million) and of the Brazilian Bank Deposit Certificate (EUR 1.7 million). The item "interest and other financial charges" refers mainly to (i) the write down of part of the interest income and of the penalty accrued on the loan granted to Primav Costrucoes e Comercio S.A. (EUR 2.2 million) and (ii) impairment of the investment in Salini Impregilo S.p.A. Risparmio (EUR 5.3 million). The item "other operating costs" increased compared to the previous year, mainly attributable to the higher operating costs incurred with reference to the Brazilian operation. The main items related to the financial income as at 31 December 2016, compared with those as at 31 December 2015, may be summarised as follows: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash and cash equivalents 1,378 52,000 (50,622) B) Securities held for trading 11,660 11,660 C) Liquidity (A) + (B) 13,038 52,000 (38,962) D) Financial receivables 3, ,000 (272,259) E) Bank short term borrowings F) Current portion of medium/long term borrowings G) Other current financial liabilities H) Short term borrowings (E) + (F) + (G) 16, ,000 (311,221) I) Current net cash (C) + (D) + (H) J) Bank long term borrowings K) Hedging derivatives L) Bonds issued M) Other long term payables N) Long term borrowings (J) + (K) + (L) + (M) 16, ,000 (311,221) O) Net financial indebtedness (*) (I) + (N) 16, ,000 (311,221) (*) Pursuant to ESMA Recommendation The change during the year in the "net financial position" is mainly attributable to (i) the purchase of the equity investment in Primav Infraestrutura SA (EUR million), (ii) disbursement of the loan to Primav Costrucoes e Comercio SA (EUR 27.1 million) partially offset by the capital increase fully subscribed by SIAS SpA (EUR million). 41

42 ASTM S.p.A. Management Report 2016 "Liquidity" at 31 December 2016 amounted to EUR 13 million (EUR 52 million at 31 December 2015), and consisted of EUR 11.7 million from the Brazilian Bank Deposit Certificate, adjusted for the EUR/BRL exchange rate at 31 December 2016, including accrued interest. The change in "financial receivables" is due to full repayment, on 1 March 2016, of the loan granted in previous years to ASTM S.p.A. amounting to EUR 276 million. 42

43 ASTM S.p.A. Management Report 2016 Società Iniziative Autostradali e Servizi SIAS S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Income from equity investments 107, ,924 4,565 Other financial income 67,487 69,469 (1,982) Interest and other financial charges (71,214) (71,951) 737 Financial income and charges 103, ,442 3,320 Value adjustments of financial assets (4,146) (5,358) 1,212 Other operating income 6,154 6,400 (246) Other operating costs (15,093) (12,931) (2,162) Amortisation/depreciation and provisions (1,603) (592) (1,011) Pre tax profit (loss) 89,074 87,961 1,113 Income taxes 1, Profit for the period 90,747 88,696 2,051 The items contained in SIAS S.p.A. s income statement reflect the industrial holding activity carried out by it. More specifically, the item "income from equity investments" (amounting to EUR million, in line with the previous year) was due to the dividends paid during the financial year by SATAP S.p.A. (EUR 52.2 million), SALT S.p.A. (EUR 31.2 million), SINELEC S.p.A. (EUR 11.5 million), SAV S.p.A. (EUR 4.4 million), SIAS Parking S.r.l. sole shareholder (EUR 0.4 million), ATIVA S.p.A. (EUR 5.9 million), Road Link Holdings Ltd (EUR 1.4 million) and Assicurazioni Generali S.p.A. and FNM S.p.A. (for a total amount of EUR 0.5 million). The items "other financial income" and "interest and other financial charges" reflect the centralisation of the financial funding activities within SIAS S.p.A., with the subsequent transfer of funds to operating companies, by means of specific intercompany loans. The item "value adjustments to financial assets" was due to the writedown of the investment in Road Link Holdings Ltd after specific Impairment. The item "other operating income" reflects the accounting, administration and financial consultancy activities provided by SIAS S.p.A. to Group companies. The increase in "other operating costs" was due primarily to the amount recognized to higher costs for services also incurred in relation to the consulting and assistance provided to the Group companies and to the investment in Brazil (for a total of EUR 3 million) offset by a decrease in the other operating costs (totalling EUR 0.9 million). "Amortisation/depreciation and provisions" essentially refer to the allocation to the tax "risks provision", which was prudentially made in relation to the deductibility of interest expense calculated on the "liability component" of the "SIAS 2.625% " convertible bond loan. In the year 2015, the provision allocated also took account of the fund recalculation as a result of the planned reduction of the IRES rate from 27.5% to 24%. The item "income taxes" reflected the peculiarity of the activity carried out by the company and included the "income" related to the so called "tax consolidation". *** 43

44 ASTM S.p.A. Management Report 2016 The main items related to the financial income as at 31 December 2016, compared with those as at 31 December 2015, may be summarised as follows: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash and cash equivalents 152, ,148 (26,778) B) Securities held for trading C) Liquidity (A) + (B) 152, ,148 (26,778) D) Financial receivables 203, ,790 2,788 E) Bank short term borrowings F) Current portion of medium/long term borrowings (181,848) (112,091) (69,757) G) Other current financial liabilities (519,611) (27,893) (491,718) H) Short term borrowings (E) + (F) + (G) (701,459) (139,984) (561,475) I) Current net cash (C) + (D) + (H) (345,511) 239,954 (585,465) J) Bank long term borrowings (341,094) (482,034) 140,940 K) Hedging derivatives L) Bonds issued (992,744) (1,317,749) 325,005 M) Other long term payables N) Long term borrowings (J) + (K) + (L) + (M) (1,333,838) (1,799,783) 465,945 O) Net financial indebtedness (*) (I) + (N) (1,679,349) (1,559,829) (119,520) (*) Pursuant to ESMA Recommendation The "net financial indebtedness" as at 31 December 2016 showed a balance of EUR 1,679.3 million (EUR 1,559.8 million as at 31 December 2015). This amount does not include receivables for "intercompany loans" granted, as part of the financial structure at holding level, to the investee companies SALT S.p.A., SATAP S.p.A., Autocamionale della Cisa S.p.A., SAV S.p.A., Autostrada dei Fiori S.p.A., Autostrada Asti Cuneo S.p.A., Autostrada Torino Savona S.p.A. and Tangenziale Esterna S.p.A., amounting to EUR 1,516 million (EUR 1,580 million as at 31 December 2015). Liquidity generated from both operating activities (equal to approximately EUR 93.2 million) was used in order to pay dividends for a total amount of EUR 72.8 million (EUR 40.9 million as balance dividend for 2015 and EUR 31.9 million as interim dividend for 2016). The Company also proceeded to the purchase of shares and the payment of the share capital increase approved by Igli S.p.A. (for a total amount of EUR million) and the purchase of shares in SALT S.p.A. (EUR 0.1 million). During the financial year under review, the Company also collected an amount of EUR 73.3 million, net of disbursements, as medium/long term intercompany loans from its subsidiaries and companies under joint control. With reference to the structure of the item "net financial indebtedness", the following is noted: the change in the item "cash and cash equivalents" implements, in addition to the above mentioned changes: (i) payment of instalments due for the "current portion of non current debt" (equal to EUR 71.2 million) and (ii) granting of an intercompany short term loan by the subsidiary SATAP S.p.A. (EUR 160 million); the change in the item financial receivables (amounting to EUR 2.8 million) is due to: (I) collection of instalments due in the period of intercompany loan and of accrued interest (approx. EUR 62 million) offset (ii) by assessment of the total income accrued on policies (EUR 2.8 million), (iii) reclassification of instalments due in the next 12 months of intercompany loans and any accrued interest (EUR 62 million). the change in the item current portion of medium/long term borrowings was due to: (I) repayment of instalments falling due in the period (EUR million), (ii) reclassification from "non current borrowings" of instalments due within 12 months (EUR 142 million) and (iii) disbursement of a new loan (EUR 40 million) and assessment of the accrued interest; 44

45 ASTM S.p.A. Management Report 2016 the change in other current financial liabilities is the result of: (i) reclassification of the " bond issue" due in the month of June 2017 from the item "issued bonds" (EUR million), (ii) recognition for the portion accruing in the period of the differential, calculated at the time of issue, between the "real interest" rate and the "market interest" rate of the convertible bond issue (EUR 5.2 million), (iii) of the above mentioned intercompany loan taken out by the subsidiary SATAP S.p.A. (EUR 160 million) and the related accrued interest (EUR 0.2 million); the increase in the item "bank long term borrowings" is due to: (i) reclassification to the item "current portion of medium/long term borrowings" of the instalments due in the following 12 months (EUR 142 million) and (ii) the affects of the so called amortised cost (EUR 1 million); the item "issued bonds" relates to the " bond" and the " bond"; the change was due to the aforementioned reclassification of the " bond" in the item "other current financial liabilities", as well as the effects of the so called "amortized cost". It is noted that the "net financial position" does not include stakes of "investment funds" for approximately EUR 10 million, signed in the year in order to invest cash. *** With reference to the convertible bond issued by SIAS S.p.A. during 2005, the repayment of which is planned for 30 June 2017, although the possibility of effective conversion into SIAS shares is not excluded, the company is establishing the financial resources necessary for full repayment of the same (equal to approx. EUR million). These financial resources will be ensured by the liquidity as at 31 December 2016, by the disposal of certain long term investments in low risk products (mainly capitalisation policies) made in previous years, by the cash flows arising from the dividends resolved by subsidiaries and by possible use of available credit facilities and/or loans from subsidiaries. *** 45

46 ASTM S.p.A. Management Report 2016 RESULTS OF OPERATIONS Motorway sector As at 31 December 2016, the Group was managing a motorway network of approx. 3,317 km; this network is located in Italy for 1,373 km, while 1,944 km are located abroad. Motorway sector Italy In Italy, the Group operates in the north western area of the country. The extension of the overall motorway network managed through subsidiaries, jointly controlled entities and associated companies in Italy was as follows: COMPANY % MANAGED SECTION KM SATAP SOCIETÀ AUTOSTRADA TORINO ALESSANDRIA PIACENZA P.A % A4 TORINO MILANO A21 TORINO PIACENZA SALT SOCIETÀ AUTOSTRADA LIGURE TOSCANA 95.23% SESTRI LEVANTE LIVORNO, VIAREGGIO LUCCA CISA AUTOCAMIONALE DELLA CISA S.P.A % LA SPEZIA PARMA SAV SOCIETÀ AUTOSTRADE VALDOSTANE 65.08% QUINCINETTO AOSTA 59.5 ADF AUTOSTRADA DEI FIORI S.P.A % SAVONA VENTIMIGLIA ATS AUTOSTRADA TORINO SAVONA S.P.A % TORINO SAVONA AT CN SOCIETÀ AUTOSTRADA ASTI CUNEO S.P.A % ASTI CUNEO 78.0 TOTAL AMOUNT MANAGED BY SUBSIDIARIES (A) 1,016.5 (1) (2) 41.17% TANGENZIALE DI TORINO (TURIN BYPASS), ATIVA AUTOSTRADA TORINO IVREA VALLE D AOSTA S.P.A. (3) TORINO QUINCINETTO, IVREA SANTHIÀ AND SITAF SOCIETÀ ITALIANA TRAFORO 36.60% TORINO BARDONECCHIA, FREJUS TUNNEL 94.0 AUTOSTRADALE DEL FREJUS S.P.A. SITRASB SOCIETÀ ITALIANA TRAFORO DEL GRAN 36.50% GREAT ST. BERNARD TUNNEL 12.8 TE TANGENZIALE ESTERNA S.P.A. (3) 14.94% (4) TANGENZIALE EST ESTERNA DI MILANO (MILAN 32.0 (5) BREBEMI SOCIETÀ DI PROGETTO AUTOSTRADA 2.71% BRESCIA BERGAMO MILANO 62.0 DIRETTA BRESCIA MILANO S.P.A. (3) TOTAL AMOUNT MANAGED BY JOINTLY CONTROLLED TOTAL (A+B) 1,373.1 (1) Including the 81 km long road link between Parma and Nogarole Rocca (not yet built). (2) Including 23 km under construction. (3) Companies jointly controlled with another entity, by virtue of a specific agreement. (4) Company with direct investments by the subsidiaries SIAS S.p.A. (7.44%), SATAP S.p.A. (1.02%) and Itinera S.p.A. (6.48%) and indirectly through TEM S.p.A., in which the Group holds 41.6% of the share capital. (5) Company with a direct investment by the subsidiary Itinera S.p.A. with 2.71% of the share capital and indirectly through Autostrade Lombarde S.p.A. (79% of the share capital) in which the Group holds 13.3% of the share capital. The network managed in Italy will be extended by a further 88.6 km once formalities are concluded in relation to the concession awarded for the Piacenza Brescia motorway section. 46

47 ASTM S.p.A. Management Report 2016 The net toll revenues figure of the individual subsidiary concession holders for the year 2016 compared with the same period of the previous year is shown below: Amounts in thousands of EUR Change SATAP A 4 SOCIETA' AUTOSTRADA TORINO ALESSANDRIA PIACENZA P.A. 227, ,248 16,374 SATAP A 21 SOCIETA' AUTOSTRADA TORINO ALESSANDRIA PIACENZA P.A. 169, ,105 5,187 SALT SOCIETA' AUTOSTRADA LIGURE TOSCANA P.A. 183, ,099 4,768 CISA AUTOCAMIONALE DELLA CISA S.P.A. 95,710 94,231 1,479 SAV SOCIETA' AUTOSTRADE VALDOSTANE S.P.A. 67,466 65,859 1,607 ADF AUTOSTRADA DEI FIORI S.P.A. 152, ,944 2,954 ATS AUTOSTRADA TORINO SAVONA S.P.A. 64,569 64, AT CN SOCIETA' AUTOSTRADA ASTI CUNEO S.P.A. 17,438 16, TOTAL 978, ,445 33,419 *** The gross operating margin figure of the individual subsidiary concession holders for the year 2016 compared with the same period of the previous year is shown below: Amounts in thousands of EUR Change SATAP A 4 SOCIETA' AUTOSTRADA TORINO ALESSANDRIA PIACENZA P.A. 169, ,527 18,255 SATAP A 21 SOCIETA' AUTOSTRADA TORINO ALESSANDRIA PIACENZA P.A. 117, ,595 3,998 SALT SOCIETA' AUTOSTRADA LIGURE TOSCANA P.A. 123, ,832 2,090 CISA AUTOCAMIONALE DELLA CISA S.P.A. 57,970 56,062 1,908 SAV SOCIETA' AUTOSTRADE VALDOSTANE S.P.A. 47,816 45,573 2,243 ADF AUTOSTRADA DEI FIORI S.P.A. 93,272 90,716 2,556 ATS AUTOSTRADA TORINO SAVONA S.P.A. 33,022 32, AT CN SOCIETA' AUTOSTRADA ASTI CUNEO S.P.A. 2,393 1,343 1,050 TOTAL (1) 645, ,940 32,830 (1) The table does not show the GOM for Autovia Padana S.p.A. (not operational at the reporting date), totalling approx. EUR 0.3 million 47

48 ASTM S.p.A. Management Report 2016 Motorway sector in Italy Subsidiaries SATAP Società Autostrada Torino Alessandria Piacenza S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Net toll revenue (1) 396, ,353 21,562 Other motorway sector revenue (2) 13,998 14,571 (573) Other revenue 12,229 13,176 (947) Revenues (A) 423, ,100 20,042 Operating costs (1)(2) (B) (135,767) (137,978) 2,211 Gross operating margin (A B) 287, ,122 22,253 EBITDA margin % 68% 66% Non recurring items 3,100 (3,100) "Adjusted" gross operating margin 287, ,222 19,153 (1) Amounts net of the fee/additional fee payable to ANAS (EUR 34.4 million in 2016 and EUR 33.6 million in 2015). (2) Amounts net of revenues and capitalised costs for construction activities of non compensated revertible assets (EUR million for FY 2016 and EUR million for FY 2015, respectively). In order to enable the analysis of the revenue and expenditure items related to the two managed stretches, the item "gross operating margin" for the "Torino Piacenza" (A21) and "Torino Milano" (A4) stretches may be broken down as follows. Torino Piacenza (A21 stretch) (amounts in thousands of EUR) Changes Net toll revenues 169, ,104 5,188 Other motorway sector revenue 7,813 7,861 (48) Other revenue 7,795 7,808 (13) Revenues (A) 184, ,773 5,127 Operating costs (B) (67,307) (66,178) (1,129) Gross operating margin (A B) 117, ,595 3,998 Non recurring items 1,184 (1,184) "Adjusted" gross operating margin 117, ,779 2,814 The increase in net toll revenue equal to EUR 5.2 million (+3.16%) was driven entirely by higher traffic volumes and by the traffic mix, as toll rates were not raised over the period. The item "other motorway sector revenue" mainly refers to rental income on service areas. The increase of EUR 1.1 million in operating costs is due essentially to: (i) higher costs incurred for "maintenance of non compensated revertible assets" (EUR million), for "personnel costs" (EUR +2.5 million) and other operating costs (EUR +0.2 million) and (ii) lower service costs (EUR 3 million) and other costs of non compensated revertible assets (EUR 0.4 million). With regard to the above, the "gross operating margin" (EBITDA) increased by EUR 4 million, amounting to EUR million. In 2015, the item "significant non recurring items" related to the "one off" income, based on the favourable ruling by the competent Court, of the risks provision set aside in FY 2011 for the dispute initiated with ANAS S.p.A. with regard to the requests for higher sub concession fees for the financial years ***** 48

49 ASTM S.p.A. Management Report 2016 Torino Milano (A4 stretch) (amounts in thousands of EUR) Changes Net toll revenues 227, ,249 16,375 Other motorway sector revenue 6,185 6,710 (525) Other revenue 4,433 5,368 (935) Revenues (A) 238, ,327 14,915 Operating costs (B) (68,460) (71,800) 3,340 Gross operating margin (A B) 169, ,527 18,255 Non recurring items 1,916 (1,916) "Adjusted" gross operating margin 169, ,443 16,339 The increase in "net toll revenue", equal to EUR 16.4 million (+7.75%), was due to the increase in both toll rates (EUR million), and traffic volumes (EUR million). Other motorway sector revenues mainly refer to rental income on service areas. The reduction in the period is linked to the decrease in consumption in service areas. The decrease amounting to EUR 0.9 million in "other revenues" is mainly due to the presence in the figure for the year 2015 of a reimbursement related to costs incurred for environmental reclamation of a service area. The decrease of EUR 3.3 million in "operating costs" is due primarily to lower (i) costs for "maintenance associated with non compensated revertible assets" (EUR 1.3 million), costs for "winter services" (EUR 0.2 million), service costs and other operating costs (EUR 1.8 million). The gross operating margin (EBITDA) totalled EUR million (EUR million in 2015). In 2015, the item non recurring items relates to the release of the risks provision that was prudentially set aside in FY 2011 for the requests made by ANAS S.p.A. with regard to the integration of the sub concession fee for the financial years *** As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 131, ,706 (153,639) B) Financial receivables 285, , ,053 C) Short term borrowings (151,522) (53,001) (98,521) D) Current net cash (A) + (B) + (C) 265, ,592 (132,107) E) Long term borrowings (1,036,136) (1,194,526) 158,390 F) Net financial indebtedness (D) + (E) (770,651) (796,934) 26,283 G) Discounted value of the payable due to ANAS Central Insurance Fund (4,046) (7,903) 3,857 H) "Adjusted" net financial indebtedness (F) + (G) (774,697) (804,837) 30,140 In the financial year, the company continued its investment programme in motorway assets (EUR million). The "liquidity" and "financial receivables" items reflect the disbursement of a loan to the Parent Company SIAS S.p.A. (EUR 160 million). Moreover, during the financial year, the company distributed the balance dividend for FY 2015 and the interim dividend for FY 2016, for a total amount of EUR 52.2 million. 49

50 ASTM S.p.A. Management Report 2016 SALT Società Autostrada Ligure Toscana p.a. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Net toll revenue (1) 183, ,099 4,768 Other motorway sector revenue (2) 5,944 6,215 (271) Other revenue 5,648 7,543 (1,895) Revenues (A) 195, ,857 2,602 Operating costs (1)(2) (B) (71,537) (71,025) (512) Gross operating margin (A B) 123, ,832 2,090 EBITDA margin % 63% 63% (1) Amounts net of the fee/additional fee payable to ANAS (EUR 13.7 million in 2016 and EUR 13.3 million in 2015). (2) Amounts net of revenues and capitalised costs for construction activities of non compensated revertible assets (EUR 19.7 million for 2016 and EUR 24.8 million in 2015, respectively). The increase in net toll revenue equal to EUR 4.8 million (+2.66%) was driven entirely by higher traffic volumes and by the traffic mix, as toll rates were not raised over the period. The decrease in other revenues is mainly related to the decrease in contingent assets and lower income pertaining to the financial year with regard to the difference, which was previously deferred, between the original amount of the payable due to the Central Insurance Fund and its current value. The increase in operating costs (equal to EUR 0.5 million) is due to: (i) the increase in "payroll costs" (EUR +1.3 million), in "other operating costs" (EUR +0.4 million) offset by lower costs for "maintenance of non compensated revertible assets" (EUR 0.3 million) and for "winter services" (EUR 0.2 million) and other costs relating to revertible assets (EUR 0.7 million). The gross operating margin (EBITDA) totalled EUR 124 million (EUR million in 2015). * * * As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 213, ,067 (30,154) B) Financial receivables 90,069 76,803 13,266 C) Short term borrowings (35,228) (34,973) (255) D) Current net cash (A) + (B) + (C) 268, ,897 (17,143) E) Long term borrowings (463,790) (493,461) 29,671 F) Net financial indebtedness (D) + (E) (195,036) (207,564) 12,528 G) Discounted value of the payable due to ANAS Central Insurance Fund (14,606) (28,194) 13,588 H) "Adjusted" net financial indebtedness (F) + (G) + (H) (209,642) (235,758) 26,116 It is noted that the said financial situation does not include the mezzanine loan granted to the subsidiary Autostrada Asti Cuneo S.p.A. for an amount equal to EUR 60 million (fixed rate loan granted at market conditions, having taken into account the duration and the subordinated repayment conditions). Moreover, during the financial year, the company also distributed the balance dividend for FY 2015 and the interim dividend for FY 2016, for a total amount of EUR 32.8 million. 50

51 ASTM S.p.A. Management Report 2016 CISA Autocamionale della Cisa S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Net toll revenue (1) 95,710 94,231 1,479 Other motorway sector revenue (2) 4,465 4,546 (81) Other revenue 5,216 4, Revenues (A) 105, ,350 2,041 Operating costs (1)(2) (B) (47,421) (47,288) (133) Gross operating margin (A B) 57,970 56,062 1,908 EBITDA margin % 55% 54% Non recurring items 370 (370) "Adjusted" gross operating margin 57,970 56,432 1,538 (1) Amounts net of the fee/additional fee payable to ANAS (EUR 6.4 million in 2016 and EUR 6.3 million in 2015). (2) Amounts net of revenues and capitalised costs for construction activities of non compensated revertible assets (EUR 26.2 million for 2016 and EUR 14.1 million in 2015, respectively). The increase in net toll revenue equal to EUR 1.5 million (+1.57%) was driven entirely by higher traffic volumes and by the traffic mix, as toll rates were not raised over the period. The increase in operating costs (equal to EUR 0.1 million) was due to: (i) the increase in costs for maintenance of noncompensated revertible assets (EUR +0.4 million), in service costs (EUR +0.4 million) and (ii) to the decrease in costs revertible assets (EUR 0.2 million), raw material costs and "other operating costs" (EUR 0.5 million). The gross operating margin (EBITDA) totalled EUR 58 million (EUR 56.1 million in 2015). In 2015, the item non recurring items related to the "one off" income of the risks provision that was set aside in FY 2011 for the requests made by ANAS S.p.A. with regard to the integration of the sub concession fee for the financial years * * * As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 131, ,665 (6,429) B) Financial receivables 35,980 35, C) Short term borrowings (16,649) (16,441) (208) D) Current net cash (A) + (B) + (C) 150, ,595 (6,028) E) Long term borrowings (154,729) (165,077) 10,348 F) Net financial indebtedness (D) + (E) (4,162) (8,482) 4,320 G) Discounted value of the payable due to ANAS Central Insurance Fund (46,233) (44,013) (2,220) H) "Adjusted" net financial indebtedness (F) + (G) + (H) (50,395) (52,495) 2,100 Moreover, during the financial year, the company distributed the balance dividend for FY 2015 and the interim dividend for FY 2016, for a total amount of EUR 12.8 million. 51

52 ASTM S.p.A. Management Report 2016 SAV Società Autostrade Valdostane S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Net toll revenue (1) 67,466 65,859 1,607 Other motorway sector revenue (2) (2) Other revenue 7,568 7, Revenues (A) 75,898 74,130 1,768 Operating costs (1)(2) (B) (28,082) (28,557) 475 Gross operating margin (A B) 47,816 45,573 2,243 EBITDA margin % 63% 61% (1) Amounts net of the fee/additional fee payable to ANAS (EUR 2.6 million in 2016 and EUR 2.6 million in 2015). (2) Amounts net of revenues and capitalised costs for construction activities of non compensated revertible assets (EUR 2.2 million for FY 2016 and EUR 1.8 million for FY 2015, respectively). The increase in net toll revenue equal to EUR 1.6 million (+2.44%) was driven entirely by higher traffic volumes and by the traffic mix, as toll rates were not raised over the period. The decrease of EUR 0.5 million in "operating costs" is mainly due to the decrease in "payroll costs" and "maintenance associated with non compensated revertible assets. The gross operating margin (EBITDA) totalled EUR 47.8 million (EUR 45.6 million in 2015). * * * As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 15,942 13,582 2,360 B) Financial receivables 14,832 15,148 (316) C) Short term borrowings (12,878) (12,968) 90 D) Current net cash (A) + (B) + (C) 17,896 15,762 2,134 E) Long term borrowings (68,404) (79,708) 11,304 F) Net financial indebtedness (D) + (E) (50,508) (63,946) 13,438 G) Discounted value of the payable due to ANAS Central Insurance Fund (93,188) (98,369) 5,181 H) "Adjusted" net financial indebtedness (F) + (G) (143,696) (162,315) 18,619 Moreover, during the financial year, the company distributed the balance dividend for FY 2015 and the interim dividend for FY 2016, for a total amount of EUR 6.7 million. 52

53 ASTM S.p.A. Management Report 2016 ADF Autostrada dei Fiori S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Net toll revenue (1) 152, ,944 2,954 Other motorway sector revenue (2) 4,828 4, Other revenue 4,121 4,640 (519) Revenues (A) 161, ,114 2,733 Operating costs (1)(2) (B) (68,575) (68,398) (177) Gross operating margin (A B) 93,272 90,716 2,556 EBITDA margin % 58% 57% Non recurring items 856 2,000 (1,144) "Adjusted" gross operating margin 94,128 92,716 1,412 (1) Amounts net of the fee/additional fee payable to ANAS (EUR 9.5 million in 2016 and EUR 9.3 million in 2015). (2) Amounts net of revenues and capitalised costs for construction activities of non compensated revertible assets (EUR 7.2 million for FY 2016 and EUR 7.1 million for FY 2015, respectively). The increase in net toll revenue equal to EUR 2.9 million (+1.97%) was driven entirely by higher traffic volumes and by the traffic mix, as toll rates were not raised over the period. The change in other revenues is mainly due to absence of income pertaining to the financial year with regard to the difference, which was previously deferred, between the original amount of the payable due to the Central Insurance Fund and its current value, since the debt was repaid during the year. The increase in operating costs (equal to EUR 0.2 million) was due to: the increase in "other costs for motorway assets" and "payroll costs", partially offset by lower "service costs. The gross operating margin (EBITDA) totalled EUR 93.3 million (EUR 90.7 million in 2015). "Non recurring items" refer to payment of compensation for occupation in 2014 and 2015 of the areas related to the Ventimiglia vehicle terminal. In 2015, this item, amounting to EUR 2 million, referred to an insurance refund received for the expenses incurred for the flooding events which occurred in January 2014 on the managed section. * * * As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 61,440 23,110 38,330 B) Financial receivables 28,503 26,490 2,013 C) Short term borrowings (13,778) (23,279) 9,501 D) Current net cash (A) + (B) + (C) 76,165 26,321 49,844 E) Long term borrowings (131,864) (139,200) 7,336 F) Net financial indebtedness (D) + (E) (55,699) (112,879) 57,180 G) Discounted value of the payable due to ANAS Central Insurance Fund H) "Adjusted" net financial indebtedness (F) + (G) (55,699) (112,879) 57,180 Moreover, during the financial year, the company distributed the balance dividend for FY 2015 and the interim dividend for FY 2016, for a total amount of EUR 24 million. 53

54 ASTM S.p.A. Management Report 2016 ATS Autostrada Torino Savona S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Net toll revenue (1) 64,570 64, Other motorway sector revenue (2) 1,322 1, Other revenue 5,516 4, Revenues (A) 71,408 70,251 1,157 Operating costs (1)(2) (B) (38,386) (37,959) (427) Gross operating margin (A B) 33,022 32, EBITDA margin % 46% 46% (1) Amounts net of the fee/additional fee payable to ANAS (EUR 6.4 million in 2016 and EUR 6.3 million in 2015). (2) Amounts net of revenues and capitalised costs for construction activities of non compensated revertible assets (EUR 12.9 million for 2016 and EUR 28.5 million in 2015, respectively). The increase in net toll revenue equal to EUR 0.3 million (+0.51%) was driven entirely by higher traffic volumes and by the traffic mix, as toll rates were not raised over the period. The increase in other revenues is mainly due to higher income from disposal gains, contingent assets and recovery of exceptional journey costs. The increase of EUR 0.4 million in "operating costs" is due to: (i) the increase in (i) "other service costs" ( EUR million), in "raw material costs" ( EUR million) and to (ii) the decrease in costs for "winter services", "other costs related to motorway assets" and "other operating costs" (EUR 1.1 million). With regard to the above, the gross operating margin totalled EUR 33 million (EUR 32.3 million in 2015). * * * As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 16,432 26,724 (10,292) B) Financial receivables 25,515 25, C) Short term borrowings (21,076) (22,157) 1,081 D) Current net cash (A) + (B) + (C) 20,871 29,847 (8,976) E) Long term borrowings (79,700) (79,659) (41) F) Net financial indebtedness (D) + (E) (58,829) (49,812) (9,017) G) Discounted value of the payable due to ANAS Central Insurance Fund H) "Adjusted" net financial indebtedness (F) + (G) (58,829) (49,812) (9,017) During the financial year, the company distributed the 2015 dividend for EUR 11 million. 54

55 ASTM S.p.A. Management Report 2016 AT CN Autostrada Asti Cuneo S.p.A. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Net toll revenue (1) 17,438 16, Other motorway sector revenue (2) Other revenue 959 1,093 (134) Revenues (A) 18,406 17, Operating costs (1)(2) (B) (16,013) (16,475) 462 Gross operating margin (A B) 2,393 1,343 1,050 (1) Amounts net of the fee/additional fee payable to ANAS (EUR 1 million in 2016 and EUR 1 million in 2015). (2) Amounts net of revenues and capitalised costs for construction activities of non compensated revertible assets (EUR 7 million in 2016 and EUR 17.4 million in 2015, respectively). The increase in "net toll revenues", equal to EUR 0.7 million (+4.31%), was entirely due to the increase in traffic volumes and mix, as no increase was applied to toll rates. The decrease of EUR 0.5 million in "operating costs" is mainly due to the reduction in "payroll costs" (EUR 0.5 million) and "other operating costs" (EUR 0.2 million), as well as the increase in "costs related to revertible assets" (EUR +0.2 million). The "gross operating margin" (EBITDA) totalled EUR 2.4 million, showing an improvement of about EUR 1 million compared to FY * * * As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 873 1,042 (169) B) Financial receivables 4,065 4,085 (20) C) Short term borrowings (160,685) (60,483) (100,202) D) Current net cash (A) + (B) + (C) (155,747) (55,356) (100,391) E) Long term borrowings (50,000) (150,000) 100,000 F) Net financial indebtedness (D) + (E) (205,747) (205,356) (391) G) Discounted value of the payable due to ANAS Central Insurance Fund H) "Adjusted" net financial indebtedness (F) + (G) (205,747) (205,356) (391) During the year, the company, in the presence of new loans taken out, repaid loans due. It is also noted that the said financial situation does not include an amount of EUR 60 million concerning the partial use of the mezzanine loan (subordinated Shareholders' loan equal to EUR 95 million) granted to the Company by SALT S.p.A. 55

56 ASTM S.p.A. Management Report 2016 Società di progetto Autovia Padana S.p.A. This company, incorporated on 2 December 2015, is held by the subsidiaries SATAP S.p.A. (70% of share capital) and Itinera S.p.A. (30% of share capital) and, pursuant to art. 156 of Legislative Decree no. 163/06, was awarded the concession for the "A21 Piacenza Cremona Brescia" motorway. The accounting records as at 31 December 2016 revealed a loss of EUR 0.2 million (in substantial break even in 2015). 56

57 ASTM S.p.A. Management Report 2016 Motorway sector Jointly controlled entities and associated companies ATIVA Autostrada Torino Ivrea Valle d Aosta S.p.A. As at 31 December 2016 the company showed net toll revenues amounting to EUR million, up by approximately EUR 2.5 million (+2.05%) compared to the previous financial year. This change is due to increased volumes and traffic mix. The gross operating margin totalled EUR 74 million (EUR 72.1 million in 2015). The net financial position as at 31 December 2016 showed net liquid funds equal to EUR 47.2 million (EUR 4.4 million as at 31 December 2015). It should be noted that the concession granted to ATIVA S.p.A. expired on 31 August 2016; pending the outcome of the tender for the award of a new concession, the company continued management of the motorway sections Torino Quincinetto, Ivrea Santhià, Tangenziale di Torino (Turin bypass) and Torino Pinerolo, in accordance with the provisions of the current concession and with the indications received from the Granting Body. TANGENZIALE ESTERNA S.p.A. The accounting records as at 31 December revealed a loss of EUR 36.3 million (loss of EUR 21.3 million in 2015). This amount is mainly due to financial charges (which were no longer capitalised as the infrastructure came into operation in May 2015) and to the amortisation of non compensated revertible assets. Società di Progetto Autostrada Diretta Brescia Milano Bre.Be.Mi. S.p.A. At 31 December the Company showed a loss of EUR 49.1 million (EUR 68.9 million as at 31 December 2015). This amount is mainly due to financial charges (which were no longer capitalised as the infrastructure came into operation in July 2014) and to the amortisation of non compensated revertible assets. The result reflects the start up phase of the project. It is worth noting that, during 2016, the company managed to balance the Financial Plan, which is based on: an extension of six years of the duration of the concession; a government grant in favour of the Concession Holder totalling EUR 320 million, to be paid in annual instalments until 2029, of which EUR 60 million Regional Contribution and EUR 260 million State Contribution; the right to implementation of the interconnection on the Brescia side of the Bre.Be.Mi with the A4 motorway. 1 Financial statements prepared in compliance with National Accounting Standards/OIC. 57

58 ASTM S.p.A. Management Report 2016 SITAF Società Italiana per il Traforo Autostradale del Frejus S.p.A. The financial statements as at 31 December show net toll revenues amounting to EUR million, up by approximately EUR 4 million (+3.25%) compared to the previous financial year. This change is due, for EUR 2.9 million, to the increase in revenues in T4 (resulting from (i) the increase in traffic volumes for both heavy vehicles, +4.69% and light vehicles, +1.57%, and (ii) the increase in toll rates, +0.02%) and, for EUR 1.1 million, to the increase in revenues for the A32 section (resulting from (i) the growth in traffic volumes for light vehicles, +0.72%, (ii) the increase in traffic volumes for heavy vehicles, +4.66%). The "gross operating margin" totalled EUR 76 million (EUR 75.9 million in FY 2015). SITRASB Società Italiana Traforo del Gran San Bernardo S.p.A. The item "motorway sector revenue", up by EUR 0.3 million compared to the previous financial year, totalled EUR 11.3 million. The gross operating margin totalled EUR 4.6 million 1 (EUR 4.9 million in FY 2015). The net financial position as at 31 December 2016 revealed liquid funds for EUR 12.6 million (EUR 15.5 million as at 31 December 2015). 1 Financial statements prepared in compliance with National Accounting Standards/OIC. 58

59 ASTM S.p.A. Management Report 2016 Motorway sector Outside Italy Brazil The Group operates in one of the wealthiest areas of Brazil through the jointly controlled company Primav Infraestrutura S.A., a Brazilian company that controls the listed sub holding company EcoRodovias Infraestrutura e Logística S.A.. The extension of the overall motorway network managed in Brazil through the subsidiaries and associated companies of EcoRodovias Infraestrutura e Logística S.A. was as follows: COMPANY % MANAGED SECTION KM CONCESIONARIA ECOVIA CAMINHO DO MAR S.A % CURITIBA METROPOLITAN AREA PORT OF PARANAGUA RODOVIA DAS CATARATAS S.A. ECOCATARATAS % PARANÀ "TRIPLE BORDER" (BRAZIL, ARGENTINA AND PARAGUAY) CONCESSIONARIA ECOVIAS DOS IMIGRANTES S.A % SAO PAOLO METROPOLITAN AREA PORT OF SANTOS CONCESSIONARIA DAS RODOVIAS AYRTON SENNA E CARVALHO PINTO S.A. ECOPISTAS % SAO PAOLO METROPOLITAN AREA INDUSTRIAL REGION OF VALE DO RIO PARAIBA CONCESSIONARIA PONTE RIO NITEROI S.A. ECOPONTE % RIO DE JANEIRO NOTEROI STATE OF RIO DE JANEIRO 23.0 EMPRESA CONCESSIONARIA DE RODOVIAS DO SUL S.A. ECOSUL 90.00% PELOTAS PORTO ALEGRE AND RIO GRANDE PORT ECO 101 CONCESSIONARIA DE RODOVIAS S.A % MACURI/BA RIO DE JANEIRO BORDER TOTAL AMOUNT MANAGED BY SUBSIDIARIES (A) 1,791.7 CONSORCIO ROTA DO HORIZONTE S.A % BELO HORIZONTE BELTWAY STATE OF MINAS GERAIS 66.0 (1) (1) Belo Horizonte ring road under construction TOTAL AMOUNT MANAGED BY JOINTLY CONTROLLED COMPANIES AND 66.0 TOTAL (A+B) 1,857.7 Primav Infraestrutura S.A. It is consolidated with the "equity method" as a company subject to joint control and, therefore, not subject to reporting in these financial statements. Nevertheless, given the importance of the investment, below is some information on income performance, as well as data related to traffic and revenues in 2016, compared with the corresponding data for the previous year. 59

60 ASTM S.p.A. Management Report 2016 With reference to the income performance of the EcoRodovias Infraestrutura e Logistica Group, it is noted that in FY 2016 EcoRodovias consolidated its activities and, despite a reduction in traffic volumes ( 2.1% compared to FY 2015), it showed an improvement in profitability with a pro forma EBITDA increased from 1,389.3 million Reais to 1,520.2 million Reais (+ 9.4% compared to FY 2015). Traffic volumes for each Brazilian licensee company in 2016, as compared to the previous year, are detailed below: (thousands of equivalent paying vehicles) (1) Changes Company Light Heavy Total Light Heavy Total Light Heavy Total Ecovia Caminho Do Mar 4,429 11,662 16,091 4,674 10,897 15, % 7.0% 3.3% Ecocataratas 9,788 16,985 26,773 9,736 16,394 26, % 3.6% 2.5% Ecovias dos Imigrantes S.A. 33,998 26,672 60,670 35,542 29,138 64, % 8.5% 6.2% Ecopistas 56,871 23,834 80,705 60,213 28,235 88, % 15.6% 8.8% Ecoponte (2) 24,275 4,560 28,835 14,135 2,910 17, % 56.7% 69.2% Ecosul 6,670 19,227 25,897 6,985 20,217 27, % 4.9% 4.8% Eco ,838 30,371 46,209 16,713 35,434 52, % 14.3% 11.4% Total 151, , , , , , % 6.9% 2.1% In 2016, the volume of traffic in terms of "equivalent paying vehicles" decreased by 2.1% overall. For comparative purposes, not taking into account the Ecoponte licensee traffic volumes, for which toll collection began on 1 June 2015, traffic volumes decreased by a total of 6.2%. With reference to heavy vehicles, the overall reduction in traffic volumes recorded by the licensee companies is directly related to the recession that hit the country and to the contraction in industrial production. With regard to light vehicles, traffic volumes for the licensee companies Ecovias dos Imigrantes, Ecovia Caminho do Mar, Ecosul and ECO 101 were affected by adverse weather conditions and by the absence of long weekends at the end of the year which adversely affected the flow of tourists to the seaside resorts in the states of São Paulo, Paraná and Rio Grande do Sul and Espirito Santo, as well as the recession in the country. The decline in traffic relating to the licensee company Ecopistas is attributable to the decrease in industrial production in the region. Ecocataratas recorded an increase in traffic as a result of the increased flow of tourists to Paraguay. The traffic of the licensee company Ecoponte increased due to the greater flow of tourists to the lake resorts thanks to favourable weather conditions. 1 Traffic volumes are expressed in "equivalent paying vehicles", the basic reference unit used for toll statistics on the Brazilian market. Light vehicles (such as cars) correspond to one equivalent vehicle unit. Heavy vehicles (such as lorries and buses) are converted to equivalent vehicles using a multiplier that is applied to the number of vehicle axles and is established in the terms of each concession contract. 2 Toll collection for the Ecoponte concession began on 1 June

61 ASTM S.p.A. Management Report 2016 The toll revenues which also take into account the tariff increases of the individual licensee companies for 2016 (compared to 2015) are as follows: Change % 11.8% 0.6% 0.1% 77.3% 29.5% 1.7% TOTAL 2, , % Total in millions of EUR(1) % (amounts in millions of BRL) Ecovia Caminho Do Mar Ecocataratas Ecovias dos Imigrantes S.A. Ecopistas Ecoponte Ecosul Eco Based on the Euro/Reais exchange rate of as at 30 December 2016 Revenues 2015 Revenues 2016 Eco 101 8% Ecovia Caminho Do Mar 11% Eco 101 9% Ecocataratas 13% Ecoponte 5% Ecoponte 3% Ecosul 9% Ecovia Caminho Do Mar 11% Ecocataratas 13% Ecopistas 12% Ecopistas 11% Ecovias dos Imigrantes S.A. 40% Ecovias dos Imigrantes S.A. 43% In 2016, the gross operating margin of the motorway concession sector in Brazil amounted to BRL 1,536.8 million (BRL 1,364.4 million in the first half of 2015). Motorway sector Outside Italy Great Britain Through the investee company Road Link Holdings Ltd (20% of the share capital) the Group holds a stake in Road Link (A69) Ltd., which manages the 84 km long Newcastle Carlisle motorway section in the United Kingdom. The concession will expire in During the financial year, it contributed to the Group s profit with an amount of approximately EUR 1.1 million. 61

62 ASTM S.p.A. Management Report 2016 RESULTS OF OPERATIONS Construction Sector The Group operated in the Construction sector until 30 June 2016 through the subsidiary ABC Costruzioni S.p.A. (85.9% owned); following the contribution of the investments in Itinera S.p.A. by Argo Finanziaria S.p.A. and by its subsidiary Codelfa S.p.A., with effect from 1 July 2016 the Group also operates through Itinera S.p.A., ACI S.c.p.A. and their respective subsidiaries. For the above, the data relating to the above companies are consolidated only for the second half of As described in more detail in the section on management of equity investments", as part of a plan for the operational restructuring and rationalisation of the construction sector, in October 2016 the shareholders' meetings of ABC Costruzioni S.p.A. and Itinera S.p.A. approved the merger plan of ABC Costruzioni S.p.A. with Itinera S.p.A.. Consequently, following the merger, the construction sector has been operating since 31 December 2016 through the Itinera Group and ACI Group. *** Itinera Group The companies in the Itinera Group operate in the construction sector and their main activities are the construction and maintenance of road, motorway and railway infrastructures, building works, as well as works for the construction of tunnels and underground railways. In the FY 2016, as in the previous year, the Group carried out its activities in a domestic market that has been plagued by serious difficulties for a number of years. The Group is achieving its development objectives in line with the identified strategic guidelines. Together with the creation of a "construction site" through aggregations of Group companies, this leads to a structural reorganisation, with a special focus on the international market. In this regard, with the aim of achieving a substantial share of its sales abroad, during the reporting period the group completed procedures for the opening of new business units in the USA, Kenya, Armenia, South Africa and Saudi Arabia, on top of those already opened in the second half of 2015 in Algeria, Abu Dhabi, Angola, Dubai, Oman, Romania and Zambia. The work order book of the Itinera Group at 31 December 2016 amounted to approximately EUR 3.9 billion (EUR 3.8 billion at 31 December 2015) and includes works expected to be carried out as part of awards granted by Ecorodovias' subsidiaries for an amount of EUR 361 million as at today. The work portfolio refers, for around 20.4% of its total, to productions to be executed abroad. In the FY 2016, the Itinera Group posted a "value of production" of EUR 381 million and a "profit for the period" of approximately EUR 5.9 million. The net financial indebtedness as at 31 December 2016 showed a balance of EUR 7.5 million (EUR 43.3 million as at 31 December 2015). 62

63 ASTM S.p.A. Management Report 2016 RESULTS OF OPERATIONS Engineering Sector The Group operates in the Engineering Sector mainly through the following subsidiaries: SINA S.p.A. (investee company with 100% of the share capital) SINECO S.p.A. (investee company with 100% of the share capital) Cisa Engineering S.p.A. (investee company with 100% of the share capital) Siteco Informatica S.r.l. (investee company with 80% of the share capital) Consorzio Sintec (investee company with 60% of the consortium fund) Lira S.r.l. (investee company with 75% of the share capital) SINA S.p.A. This Company operates in the study, planning and works management areas for railway and motorway works. The main revenue and expenditure items of the Company may be summarised as follows: Changes Construction and engineering sector revenue 21,207 26,020 (4,813) Revenues (A) 21,207 26,020 (4,813) Operating costs (B) (22,932) (27,580) 4,648 Gross operating margin (A B) (1,725) (1,560) (165) In 2016, the item "turnover" amounts to EUR 21.2 million; the decrease compared to the previous year (EUR 4.8 million) which reflects the contraction in activities carried out with Group companies and with third parties is attributable to the persistent uncertainty characterizing this sector due, in particular, to the delayed approval of the licensees economicfinancial plans. Lower turnover impacted operating costs, which fell by EUR 4.6 million. Therefore, the "gross operating margin" is negative for EUR 1.7 million (negative for EUR 1.6 million in 2015). In 2016, the company embarked on the first phase of a reorganization and restructuring plan based on staff reductions aimed among other things at restoring profitability. The net financial position as at 31 December 2016 revealed net liquid funds for EUR 16.8 million (EUR 15.8 million as at 31 December 2015). 63

64 ASTM S.p.A. Management Report 2016 SINECO S.p.A. The Company carries out monitoring and control activities related to the state of preservation of transport infrastructures throughout the territory. The main revenue and expenditure items of the Company may be summarised as follows: Changes Construction and engineering sector revenue 22,291 23,667 (1,376) Revenues (A) 22,291 23,667 (1,376) Operating costs (B) (16,900) (17,640) 740 Gross operating margin (A B) 5,391 6,027 (636) In FY 2016, the "turnover" totalled EUR 22.3 million (EUR 23.6 million in FY 2015). "Operating costs" totalled EUR 16.9 million, a reduction of EUR 0.7 million compared to last year. With regard to above, the gross operating margin totalled EUR 5.4 million (EUR 6 million in FY 2015). The net financial position as at 31 December 2016 revealed liquid funds for EUR 2.5 million (EUR 3.3 million as at 31 December 2015). CISA Engineering. S.p.A. The Company operates in the study and planning sector for motorway works. The main revenue and expenditure items of the Company may be summarised as follows: Changes Construction and engineering sector revenue 1,478 1, Other revenue Revenues (A) 1,478 1, Operating costs (B) (908) (960) 52 Gross operating margin (A B) In FY 2016, the company posted a "turnover" of EUR 1.5 million (EUR 1.1 million in 2015). "Operating costs" totalled EUR 0.9 million (EUR 1 million in 2015). The gross operating margin was therefore equal to EUR 0.6 million (EUR 0.2 million in the third quarter of 2015). The net financial position as at 31 December 2016 showed net liquid funds equal to EUR 1 million (EUR 0.9 million as at 31 December 2015). 64

65 ASTM S.p.A. Management Report 2016 Siteco Informatica S.r.l. The company operates in the development of technological software in particular application software for the management of road databases and in the engineering and integration of technologies and instruments to carry out highperformance tools for photographic, geometric and topographic surveys of infrastructures. In 2016, revenues stood at EUR 2.1 million (EUR 1.7 million in 2015), compared with operating expenses of EUR 2 million (EUR 1.7 million in 2015), gross operating profit amounted to EUR 0.1 million (close to breakeven in 2015). The "net financial position" as at 31 December 2016 revealed borrowings totalling EUR 0.2 million (indebtedness amounting to EUR 0.2 million as at 31 December 2015). Consorzio SINTEC The consortium carries out monitoring and control activities related to the state of preservation of infrastructures. In 2016 revenues totalled EUR 2 million (EUR 4.9 million in FY 2015). The "net financial position" as at 31 December 2016 revealed liquid funds equal to EUR 0.3 million (EUR 0.7 million as at 31 December 2015). Lira S.r.l. in liquidation The company is in liquidation and was active in the field of research and testing of equipment and devices necessary to ensure an adequate level of passive safety in road traffic. In 2016 revenues totalled EUR 0.1 million (EUR 0.5 million in FY 2015). The "net financial position" as at 31 December 2016 revealed liquid funds equal to EUR 0.5 million (EUR 0.4 million as at 31 December 2015). 65

66 ASTM S.p.A. Management Report 2016 RESULTS OF OPERATIONS Technology Sector The Group operates in the Technology Sector through the following subsidiaries: Sinelec S.p.A. (investee company with % of the share capital) Euroimpianti Electronic S.p.A. (investee company with 100% of the share capital). Brescia Milano Manutenzioni S.c.ar.l. (investee company with 62% of the share capital) Pedemontana Lombarda Manutenzioni S.c.ar.l. (investee company with 64.6% of the share capital). Sinelec S.p.A. The company operates in the lease sector of both fibre optics and sites for the positioning of transmission devices for companies operating in the mobile telephony sector, as well as in the sector of outsourcing management and supply of integrated IT systems for motorway companies. The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Technology sector revenue 52,999 67,994 (14,995) Other revenue Revenues (A) 53,828 68,810 (14,982) Operating costs (B) (39,907) (45,283) 5,376 Gross operating margin (A B) 13,921 23,527 (9,606) The company posted a "turnover" of EUR 53.8 million, down by EUR 15 million compared to the previous financial year; this change, which reflects lower activities carried out with both the Group companies and third parties, is mainly attributable to the completion of certain contracts in the previous year. Operating costs reflect the decrease in production and amounted to EUR 40 million. Lower turnover, together with contracts delivering lower margins compared to those of the same period of the previous year, resulted in a EUR 9.6 million drop in gross operating margin, which fell to EUR 13.9 million (EUR 23.5 million in FY 2015). The "net financial position" as at 31 September 2016 showed liquid funds for EUR 14 million, which consisted of the liquid funds available on the Company s current accounts (EUR 18.8 million as at 31 December 2015). During the year, the company distributed dividends for a total amount of EUR 13.3 million. 66

67 ASTM S.p.A. Management Report 2016 Euroimpianti Electronic S.p.A. The company operates in the area of planning and production of electrical, telephone and electronic systems for motorway companies. The main revenue and expenditure items of the Company may be summarised as follows: Changes Technology sector revenue 35,960 53,968 (18,008) Other revenue 1, ,258 Revenues (A) 37,737 54,487 (16,750) Operating costs (B) (32,995) (47,178) 14,183 Gross operating margin (A B) 4,742 7,309 (2,567) The company posted a "turnover" of EUR 37.7 million, down by EUR 16.7 million compared to the previous financial year. Lower turnover impacted operating costs, which fell by EUR 14.2 million. The "gross operating margin" totalled EUR 4.7 million (EUR 7.3 million in 2015). The "net financial position" as at 31 December 2016 showed liquid funds equal to EUR 3.7 million (indebtedness of EUR 1.5 million as at 31 December 2015). Brescia Milano Manutenzioni S.c.ar.l. The company operates in the road lighting maintenance sector, providing its services primarily to Argentea Gestioni S.c.p.a., holder of the maintenance and management contract for the Brescia Bergamo Milano motorway. In 2016 revenues and operating costs totalled EUR 1.2 million (EUR 2.6 million in FY 2015). Pedemontana Lombarda Manutenzioni S.c.ar.l. The company operates in the road system maintenance sector, It mainly carries out its activities on behalf of Autostrada Pedemontana Lombarda S.p.A., holding the maintenance contract for systems on the A8 A9 stretch, the first lot of the Como and Varese by passes. Revenues and costs for FY 2016 totalled EUR 0.4 million. 67

68 ASTM S.p.A. Management Report 2016 RESULTS OF OPERATIONS Parking Sector As is well known, the Group operates in the "Parking Sector" through the subsidiary SIAS Parking S.r.l. (investee company with 100% of the share capital) and Fiera Parking S.p.A. (investee company with 99% of the share capital) and the following "jointly controlled" companies: Parcheggio Piazza Meda S.r.l. (investee company with 50% of the share capital) Parcheggio Piazza Trento e Trieste S.r.l. (investee company with 50% of the share capital) Parcheggio Piazza Vittorio S.r.l. (investee company with 50% of the share capital) Parcheggio Via Manuzio S.r.l. (investee company with 50% of the share capital) Fiera Parking S.p.A. The company manages the parking area at Fiera Milano (Rho Pero). The main revenue and expenditure items of the Company may be summarised as follows: (amounts in thousands of EUR) Changes Parking sector revenue (1) 7,053 10,256 (3,203) Other revenue 311 1,389 (1,078) Revenues (A) 7,364 11,645 (4,281) Operating costs (B) (1,963) (3,600) 1,637 Gross operating margin (A B) 5,401 8,045 (2,644) In 2016, the proceeds from car park operations amounted to EUR 7 million (1) compared to EUR 10.3 million (1) in 2015, a period benefiting from higher revenues due to the Expo event (Milan 1 May 31 October 2015). "Other income" in 2015 included a contribution for operating expenses amounting to EUR 1.4 million. The decrease in turnover impacted both operating costs which amounted to EUR 2 million (EUR 3.6 million in 2015), as well as EBITDA, which stood at EUR 5.4 million (EUR 8 million in 2015). * * * As regards the financial position, a summary of its main components is provided below: (amounts in thousands of EUR) 31/12/ /12/2015 Changes A) Cash 5,864 5, B) Financial receivables 4,044 3, C) Short term borrowings (2,606) (2,513) (93) D) Current net cash (A) + (B) + (C) 7,302 7, E) Long term borrowings (25,321) (28,563) 3,242 F) Net financial indebtedness (D) + (E) (18,019) (21,480) 3,461 G) Non current financial receivables 47,368 48,328 (960) H) "Adjusted" net financial indebtedness (F) + (G) 29,349 26,848 2,501 The items "financial receivables" and "non current financial receivables" represent, as provided for in IFRIC 12 Interpretation, the discounted value of the medium/long term portion of cash flows related to the so called "guaranteed minimum amount by the Granting Body" as set out in the concession agreement. 1 Given the acknowledgement of a minimum guaranteed amount by the Granting Body, IFRIC12 requires: (i) the recognition in the financial statements of a financial receivable for the discounted amount of minimum cash flows guaranteed by the Granting Body; (ii) the decrease in revenues with regard to the portion attributable to the guaranteed minimum amount; and (iii) the recognition of financial income against said financial receivable. However, only in order to provide full information on the revenue and expenditure items relating to the management of the Fiera Parking S.p.A. parking areas, the data provided in these notes include parking revenues with regard to the portion attributable to the so called "guaranteed minimum amount" equal to approximately EUR 4 million in 2016 (EUR 3.9 million in 2015). 68

69 ASTM S.p.A. Management Report 2016 Parcheggio Piazza Meda S.r.l. The company manages the car parking area of Piazza Meda in Milan. The item parking sector revenue totalled EUR 3.3 million (EUR 3.4 million in 2015). The gross operating margin totalled EUR 2.5 million (EUR 2.5 million in 2015). The net financial position as at 31 December 2016 showed borrowings of EUR 15.1 million (EUR 15.5 million as at 31 December 2015). Parcheggio Piazza Trento e Trieste S.r.l. The company manages the car parking area of Piazza Trento e Trieste in Monza. The item "parking sector revenue" totalled EUR 2 million, in line with the previous financial year. The gross operating margin totalled EUR 1.4 million (EUR 1.4 million in 2015). The net financial position as at 31 December 2016 showed borrowings of EUR 3.6 million (EUR 4.1 million as at 31 December 2015). Parcheggio Piazza Vittorio Veneto S.r.l. The company manages the car parking area of Piazza Vittorio Veneto in Turin. The item parking sector revenue totalled EUR 1.6 million (EUR 1.6 million in 2015). The "gross operating margin" totalled EUR 1.1 million (EUR 1 million in FY 2015). The net financial position as at 31 December 2016 showed borrowings of EUR 2.4 million (EUR 2.9 million as at 31 December 2015). Parcheggio Via Manuzio S.r.l. The company manages the car parking area of Via Manuzio in Milan. The item parking sector revenue totalled EUR 0.4 million (EUR 0.4 million in 2015). The gross operating margin totalled EUR 0.3 million (EUR 0.2 million in 2015). The net financial position as at 31 December 2016 showed borrowings of EUR 3.9 million (EUR 4.2 million as at 31 December 2015). 69

70 ASTM S.p.A. Management Report 2016 RESULTS OF OPERATIONS Services Sector Finanziaria di Partecipazioni e Investimenti S.p.A. (former Autostrade dei Parchi S.p.A.) As at 31 December 2016, the Company was an investee company of the Group (which held 100% of its share capital). In 2016, the company posted a "loss" of EUR 5.2 million (loss of EUR 3 million in 2015), mainly due to the write down of the book value of the equity investment held in Banca Ca.Ri.Ge. S.p.A. for an overall amount of EUR 5 million. The "net financial position" as at 31 December 2016 showed "liquid funds" equal to EUR 6.2 million (EUR 7.1 million as at 31 December 2015). During the year, the company paid the share capital increases approved by the investee companies Compagnia Aerea Italiana S.p.A. and Banca Popolore Società Cooperativa totalling EUR 0.8 million. VEM The company VEM ABC, operating in the urban mobility sector, holds the concession to build and operate a 14.9 km monorail connecting the City of Sao Paolo and the bordering region of ABC, an important industrial region, with 13 stations. The concession has a 25 year term; works will commence in 2017 and will last for about 4 years. The value of the expected investment is around BRL 6 billion (EUR 1.7 billion), with a government grant of 50%. * * * Baglietto S.p.A. In 2016, the company, despite the shipbuilding sector being affected by the protracted international economic stagnation, completed and delivered to their owners two 43 and 54 metre yachts, entered into a construction contract regarding a 19 metre motorboat and also continued the construction of 43, 46, 48 and 55 metre yachts. The production value therefore amounted to EUR 21.1 million. The progress of construction contracts or refits subject to contract allowed overhead costs to be only partially covered and therefore there was an operating loss of EUR 7.6 million (EUR 11.8 million in 2015) As at 31 December 2016, exposure to banks amounted to EUR 19 million. It should be noted that in February 2017 Baglietto S.p.A. signed a contract for the sale of a 46 metre yacht, already presented at the Cannes 2016 and Monaco 2016 trade fairs, which will be delivered in spring 2017 to the final owner. 70

71 ASTM S.p.A. Management Report 2016 RISK FACTORS AND UNCERTAINTIES The main risks (1) and uncertainties to which the Company is exposed are detailed below: Renewal of the Economic Financial Plans of motorway licensee companies With regard to the issues concerning the renewal of the economic financial plans for motorway companies and the related consequences on the tariff trend, reference is made to the information included in the section Regulatory framework and relations with the Granting Body. Disputes with the Revenue Office As at 31 December 2016, some Group Companies were subject to tax investigations by the Italian Revenue Office and the Tax Police. If some observations were made with regard to different interpretations of tax provisions compared to those adopted by the Companies, these confirmed to have acted in compliance with the rules governing the preparation of the financial statements and in line with the reference accounting standards. In case such observations resulted in a subsequent tax assessment by the Revenue Office, the Companies lodged an appeal and reaffirmed the correctness of the procedures adopted. In some cases, if these were to the advantage of the Company, outstanding disputes were settled by adhering to the proposals made by the Office with regard to the instruments and procedures set out by the tax regulations. RFI S.p.A. lawsuit With reference to the lawsuit brought in June 2016 by Rete Ferroviaria Italiana S.p.A. against ANAS S.p.A. and the subsidiary SATAP S.p.A., regarding the acknowledgement of the costs incurred to carry out the works to solve the interference caused by the high speed/high load line with the existing A4 Torino Milano motorway, on the basis of the reference accounting standards, the Company decided not to make any allocations in these financial statements. Summary of disputes With reference to the lawsuit initiated by Sintesi S.p.A. in 2006 against the (i) Ministry of Infrastructure and Transport and (ii) Itinera, managing partner (40%) of the temporary association of companies of which Pizzarotti & Co. S.p.A. (40%), CO.GE. Costruzioni Generali S.r.l. (19.99%) and Impresa Gelfi Costruzioni S.p.A. in receivership (0.01%), as concessionary for the building of the Bollate jail, belonged, having the claim for compensation due to illegal occupation of properties belonging to it as it objects based on the reference accounting principles decided not to make any provisions for the current financial statements. With further details with regard to these issues, reference is made to the section "Other information" in the Notes to the Consolidated Financial Statements. (1) With regard to the "financial risk" management, reference should be made to the "Other information" section included in the Explanatory Notes of the consolidated financial statements. 71

72 ASTM S.p.A. Management Report 2016 *** To date, the main assets held by ASTM S.p.A. consists of the equity investments in SIAS S.p.A. and Itinera S.p.A.: therefore, the operating results of ASTM S.p.A. mainly depend on said investee companies and reflect the economic and financial performance, as well as investment and distribution policies of its dividends. SEGMENT INFORMATION Pursuant to CONSOB Communication no of 27 October 1998, it should be underlined that as already pointed out in the previous section Business segments and Group composition the primary business segment of the Group is represented by the management of motorway networks under concession, as well as by related activities. As a consequence, the economic financial components of the consolidated financial statements are mainly attributable to this type of activity. In the Notes to the Financial Statements, an analysis of the results by business segment is included in the related section "Operating segments", pursuant to IFRS 8. OTHER SPECIFIC DISCLOSURES PURSUANT TO CURRENT LEGISLATION Information on Environment and Staff With regard to environment related information, it should be underlined that the Group Companies carry out their activities in full compliance with environmental and hygiene requirements at work. Moreover, the Group motorway companies adopted a series of measures aimed at limiting the environmental impact. The main measures are detailed below: the arrangement of acoustic mapping and agglomerates, action plans and noise limitation and reduction plans. These activities play an important role in order to manage any problem related to noise pollution and its effects; the works for the installation of noise barriers included in the noise limitation and reduction plans are being carried out; the use of special drainage asphalt, in order to reduce noise pollution; the use of photocatalytic paints, capable of reducing pollutants; the recycling of ripping surface materials and asphalt concrete; the treatment and purification of wastewater in the service areas; the treatment and purification of wastewater of toll collection buildings; the adaptation of systems for waste disposal and management, for the waste produced in connection with motorway accidents, with the help of specialised companies; With reference to employee related information, the Group Companies have maintained conduct based on the following principles: acting in compliance with current regulations; guaranteeing the health and safety of workers in all work environments and sectors; 72

73 ASTM S.p.A. Management Report 2016 engaging and motivating all staff, through information, instruction and possible training on safety issues in construction worksites; involving the companies operating in construction sites via coordination meetings; cooperation and resolution of work related interference. With reference to employee related information for the ASTM Group, it is noted that, also in 2016, the Group Companies carried out the enhancement policy for human resources, aimed at improving the organisational model, also in order to obtain higher operational flexibility. The following table shows the staff employed as at 31 December 2016, compared with the figures as at 31 December 2015: 31/12/2015 Itinera and Other ACI Group changes 31/12/2016 Executives (1) 122 Middle managers Office workers 2, (58) 2,435 Workers (16) 760 Total 2, (69) 3,466 For further information on Environment and Staff please refer to the 2016 Sustainability Report prepared by the Company on a voluntary basis. Treasury shares and shares or stakes of Parent Companies On 28 April 2016, the Ordinary Shareholders Meeting approved the request to authorise the purchase and disposal of treasury shares. It will be possible to purchase shares, up to a maximum of 17,600,000 ordinary shares, up until the approval date of the 2016 financial statements and, in any case, for no more than 18 months from the resolution date. As part of said resolution by the Shareholders Meeting, on the same date the Board of Directors approved the launch of the treasury shares purchase plan by authorising the acquisition of up to a further 3,520,000 ASTM shares. In execution of this plan, 1,184,678 ASTM shares were purchased and, therefore, to date the parent company holds a total of 6,577,706 (corresponding to approximately 6.64% of the share capital), of which 6,497,328 treasury shares directly and indirectly through its subsidiaries Autostrada Albenga Garessio Ceva S.p.A. (58,878 shares) and ATIVA S.p.A. (21,500 shares). The Shareholders' Meeting that will be convened on 28 April 2017 will approve the proposal for a new authorisation to purchase/sell treasury shares, since the previous authorisation approved on 28 April 2016 will expire with the approval of the financial statements as at 31 December