2020 OUTLOOK1

• Construction Backlog: ~€ 33 billion, equal to more than five years of production

• Revenues: € 5.7 – 6.0 billion (€ 6.2 – 6.5 billion including estimated badwill)
• EBITDA margin: 4.0% - 5.0% (>11% including estimated badwill)
• Net Debt: € 0.6 - 0.8 billion

STRATEGIC DRIVERS AND FINANCIAL TRAJECTORY OF CORE BUSINESS

• Strategic Drivers: continue business de-risking although leveraging opportunities from greater post-COVID-19 infrastructure investments; consolidation of presence in Italy; expansion in related sectors; efficiency and digitalisation; sustainable growth
• Financial trajectory expected to recover sharply in 2021:
  • Average Book-to-bill: >1.0 in 2021-2023
  • Revenues: € 6.5 – 7.2 billion in 2021; € 7.4 – 8.3 billion in 2023
  • EBITDA margin: ca. 8.0% in 2021; >8.5% in 2023
  • Net Debt: € 0.5-0.3 billion in 2021; € 0.3 – 0.04 billion in 2023

MILAN, November 26, 2020 – The Board of Directors of Webuild (MTA: WBD) reviewed the consolidated pro-forma financial results for full-year 2019 and the first half of 2020 that include the impact of the Group’s acquisition of Astaldi. The Board also approved the Group’s strategic guidelines, as well as its financial trajectory for the 2020-2023 period that take into consideration the acquisition of Astaldi and relate to the aggregated core business, which has been developed to take into account the current global macroeconomic scenario in the midst of the Covid-19 health emergency and could face modifications due to significant changes to the scenario and subsequent further interruptions or the slowing down of the Group’s activities.

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CONSOLIDATED PRO-FORMA FINANCIAL DATA FOR 2019 AND FIRST HALF OF 2020

The following is a summary of Webuild’s adjusted2 pro-forma financial data at December 31, 2019 and June 30, 2020 reflecting the impact the acquisition of a 66.3% stake in Astaldi S.p.A. on the Group’s results. Although the transaction was completed on November 5, 2020, the data include Astaldi’s contribution for the entire 12-month period ending on December 31, 2019 and the 6-month period ending on June 30, 20203.

Revenues, EBITDA and Net Equity include a gain equal to €487.6 million as a result of a preliminary estimate made under the Purchase Price Allocation (PPA) accounting procedure related to the acquisition of Astaldi, in accordance with IFRS 3 “Business Combinations”. The gain will be included in the financial statement of Webuild subsequent to the Astaldi acquisition and will establish a fair value for the acquired activities and assets and the related price allocation. The final estimate of fair value on the date of the acquisition of activities and assets could differ significantly from the value in the reported estimates, leading to a significant variation in the pro-forma value of the abovementioned gain. The calculation of the pro-forma data, the risks and related limits are contained in the “Information Document relating to the subscription of a capital increase of Astaldi S.p.A. and the consequent acquisition of a controlling interest in the share capital of the same,” issued under the provisions of Art. 71, Comma 1, in conformity with Attachment 3B Schedule No. 3 of CONSOB Regulation No. 11971/1999 pf May 14, 1999, including successive amendments, published on November 20, 2020.

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WEBUILD PERFORMANCE WITHIN GLOBAL CONTEXT

In the first nine months of 2020, there was a sudden worsening of the global macroeconomic scenario due to the Covid-19 pandemic and the measures taken by governments to address the health emergency. According to the latest estimates by the International Monetary Fund (IMF) published in October 2020, the global economy is forecast to contract by 4.4% in 2020. However, these forecasts are characterised by a high level of uncertainty in light of the arrival of a second wave of the pandemic in many countries.

The extraordinary impact of the pandemic and the safety measures that were implemented as a consequence led to a slower production rate at construction sites globally. The impact on the Group’s revenues resulted in it being able to meet 75% of production expectations set for the current year.

The drop in production led to a reduction in the absorption of fixed costs that - together with the extraordinary costs incurred to ensure the safety of workers - reduced Group margins. Even though the health emergency resulted in the extension of the period of time to collect credits, Webuild continued to support its own suppliers. The pandemic saw to the postponement until after 2020 of the awarding of new projects worth approximately € 20 billion.

Within this context, Webuild nevertheless continued to remain focused on delivering its strategic and financial objectives, such as:

• Focus on regions with low risk profiles, such as Italy, Europe, North America and Australia. These regions have come to represent 63% of the order backlog in 2020 compared with 58% in 2018;

• Important contribution to Italy’s construction sector via the construction of the Genoa-San Giorgio Bridge in record time, the relaunch of strategic infrastructure for € 3.6 billion (Verona-Padua high-speed railway, Ionian Highway, Genoa Railway Hub) and the execution of strategic projects, supporting local construction businesses with guaranties and payments;

• External growth, consolidating the Italian construction sector via the acquisition of Astaldi, Cossi Costruzioni and stakes held by Condotte in the COCIV and IRICAV II consortia responsible for the construction of high-speed railways between Milan and Genoa, and Verona and Padua, respectively;

• No contracts cancellation as a result of the pandemic: the lower revenues and margins for 2020 will be carried over to successive years; at the present time, all construction sites are open even though not all of them have returned to production levels registered prior to the pandemic;
• Solid net financial position, improving from the first half 2020;
• Adequate liquidity maintained at Group level.

In light of the above and in the absence of any unforeseen developments in the health emergency that could lead to a further impact on the global economy, the Group foresees the following for 2020:

• Construction Backlog: ~€ 33 billion, equal to more than five years of production
• Revenues: €5.7-6.0 billion (including badwill, range seen at € 6.2-6.5 billion)
• EBITDA margin: 4.0-5.0% (including badwill, margin seen at >11%)
• Net Debt: € 0.6-0.8 billion

These figures are at constant foreign exchange rates and include Astaldi’s contribution for twelve months of 2020 following its acquisition on November 5, 2020.

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STRATEGIC DRIVERS

The global infrastructure market is changing constantly and influenced by various factors that include, among others, demographic growth, urbanisation, the impact of the Covid-19 pandemic, climate change, and new economic measures.

The period that will follow the pandemic offers significant opportunities for the sector, thanks to the following factors:

• Launch of important infrastructure investment plans in developed countries (Europe, the United States and Australia). In addition to new, large projects, part of the demand will concern the maintenance and renewal of existing infrastructure;
• Focus on innovation and sustainability (e.g. the Recovery Fund in Europe) that needs players with scale and expertise.

Within this context, Webuild is implementing the following guidelines:

1. De-risk the order backlog by taking advantage of opportunities offered by a trend towards more infrastructure investment in markets with low risk profiles, including Italy, North America, central and northern Europe and Australia;
2. Consolidate presence in Italy, accelerating work on projects in the order book and taking advantage of the Group’s greater scale to seize opportunities arising from Italy’s latest measures for the infrastructure sector, which provides for a new advance payment regime and a simplified tender procedure;
3. Expand in adjacent segments that can enable greater diversification of the order backlog and cash flow, such as infrastructure maintenance in Italy;
4. Continue to implement an operational efficiency drive worth €120 million by 2023, focusing on overhead costs, indirect costs at work sites and consortia, and direct costs at work sites in order to create synergies with Astaldi. Measures include:

• Completion of the “crash program” launched in 2020 with an expected benefit of €17–20 million in additional earnings before interest and taxes (EBIT);
• Change in the Group’s structural organisation at the corporate and branch level;
• Lower indirect costs for projects;
• Lower costs related to Italian consortia;
• Improve organisational efficiencies on new projects via automation or the digitalisation of back-office processes;

1. Strengthen leadership in innovation, including an investment of more than € 26 million to make core processes digital in Procurement, Business Development, Bidding, Operations, Control and Human Resources. A multi-year digital programme aimed to improve margins for ca. 70-100 basis points;
2. Focus on Environmental, Social and Governance (ESG), favouring infrastructure projects that help reduce harmful gas emissions, all the while guaranteeing high worker safety standards.

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