Salcef S p A : 2022 Integrated Report (edited version)

LETTER TO THE STAKEHOLDERS

GRI 2-22

2022 Integrated Annual Report

Dear stakeholders,

Three years after our stock market listing, we are proud to present our first Integrated Annual Report, another important milestone in our growth path, demonstrating the maturity of our organisation and our proactive, transparent approach to engagement with you, our stakeholders. We decided to integrate information about our financial and ESG performances into one document because we strongly believe this provides a clearer understanding of how sustainability plays an increasingly integral role in our daily lives and drives our performance.

2022 was a landmark year for the group, which has reached a new scale despite the challenging global scenario, characterised by the outbreak of the war in Ukraine, fears about an energy crisis in Europe, unforeseen spiralling inflation and their very significant repercussions. Thanks to the fundamental contribution of our people, who once again leveraged their strength, ability to adapt and team spirit, the group was able to continue its growth journey and to achieve and even outperform its strategic, financial and sustainability objectives.

In strategic terms, we completed not one but two important acquisitions during the year, investing almost €100 million, and beating our objective of completing one acquisition a year. With the contribution of PSC Group's railway business unit (acquired in March) and Francesco Ventura Costruzioni Ferroviarie (the acquisition of which was finalised just before year end), we have reinforced our competitive foothold not only in our core sectors and segments, such as permanent way systems and electrification, as well as moving into new areas connected to railway infrastructure in which governments are investing heavily, such as railway signalling, electric substations and railway safety systems. Thanks to these two acquisitions, the group's workforce has expanded to welcome around 500 new colleagues, bringing our total resources to over 1,900, a new record for us.

The group's growth is also confirmed by all its key economic and financial parameters. For the second consecutive year, revenue grew by approximately 30%, including 22% through organic growth, to €565 million. Inflation and the mix of projects entering operations affected our margins, which maintained excellent levels in excess of 20%, pushing up EBITDA by more than 15% to €114 million. Thanks to the above-mentioned acquisitions and a superb commercial performance, our order backlog has reached a record high of €1.7 billion, as we were awarded important contracts both in Italy, mostly under the umbrella of the National Recovery and Resilience Plan, and abroad (chiefly to build a light transit line in the United States and to upgrade infrastructure in Romania). On the financial front, we continued our investment plan to expand and modernise our fleet as well as to develop new products and solutions. Overall, we invested approximately €48 million, representing another increase on 2021.

In the ESG area, the group also improved its environmental performance, cutting its CO2 emissions intensity rate by 18%. We also increased the proportion of new hires in the under 30 years of age bracket to 39% (compared to 23% in 2021), confirming our ambition to be an increasingly attractive and competitive employer for the younger generations. We bettered our occupational safety record, with the consolidated injury rate (the frequency rate multiplied by the severity rate) down 37% on 2021, proof of the success of the group's training programmes and awareness raising initiatives for all work site personnel. During the year, two policies on diversity and inclusion and human rights were drafted, reaffirming the group's commitment to our human capital, which is essential for our development, and they will be applied in 2023. We are also very pleased to announce that the restructuring of the new headquarters in Rome has been completed. This state-of-the-art green building includes a gym and a canteen with high quality meals with selected ingredients for employees. The group's ESG achievements have been recognised by leading ESG rating agencies, such as MSCI, which has upgraded the group's ESG rating for the second consecutive year bringing it up to "A", and Ecovadis which has assigned five platinum medals and one gold medal to six group companies.

GILBERTO SALCICCIA Chairperson of the board of directors

VALERIANO SALCICCIA

Chief executive officer

We have deployed nearly all the resources made available by investors to drive the group's growth three years ago. We believe that we have acted in the interests of all our stakeholders in doing so and have created a group with strong roots and the ambition and tools to continue its journey and confirm its role as a primary facilitator of the transition towards sustainable mobility.

Methodological note

Guide to the report

Highlights

Letter to the stakeholders

€m

1. Excludes the effect of changes in fair value of the additional conversion warrants on financial expense
2. Excludes the effect on income taxes of the recognition/reversal of deferred tax assets on fiscally-driven revaluations and the recognition of non-recurring tax expense
3. Excludes the effect of changes in fair value of financial investments on financial expense
4. Excludes the effect of recognising the additional conversion warrants
5. Excludes the effects of changes in fair value of financial investments and contract advances received from the customer IRICAV DUE, net of costs already incurred, for the HS/HC Verona - Padua railway contract
6. Excludes the effect of the recognition in 2020 and reversal in subsequent years of deferred tax assets on fiscally-driven revaluations

€m

Guide to the report

Highlights

Letter to the stakeholders

6

7 1