DOCUMENTATION AVAILABLE TO THE PUBLIC AND INDEPENDENT AUDITORS’ REPORT ON THE INTERIM FINANCIAL REPORT AT 30 JUNE 2020. INFORMATION REQUESTED BY CONSOB PURSUANT TO ARTICLE 114 OF TUF

DOCUMENTATION AVAILABLE TO THE PUBLIC. INDEPENDENT AUDITORS’ REPORT

Astaldi informs that the Board of Directors approved the Interim Financial Report at 30 June 2020 after having reviewed and supplemented the information contained in the section relative to the Events after the reporting period, with reference to the news concerning a precautionary measure adopted by the Judicial Authority of El Salvador against Astaldi, already disclosed to the market on 1 October 2020.

The Interim Financial Report, together with the Independent Auditors’ Report, is  available on the Company’s website www.astaldi.com, in the section Investor Relations–Financial Reports), and was filed at the Company’s registered office and Borsa Italiana S.p.A., and is available to anyone requesting it. The documentation in question is also available on the authorised storage mechanism www.1info.it.

With reference to the provisions contained in CONSOB communication no. 9081707 of 16 September 2009, Astaldi informs that the Independent Auditors, in their report on the Condensed Consolidated Interim Financial Statements  at 30 June 2020, pointed out that no elements have come to their attention that would suggest that Astaldi Group’s Condensed Consolidated Financial Statements at 30 June 2020 have not been prepared, in all their significant aspects, in compliance with IAS34 requirements, unless as regards the failure to present the comparative data at 30 June 2019. Furthermore, the Independent Auditors drew attention to the description offered by the Directors in the section “Evaluation on business continuity” contained in the notes to the Condensed Consolidated Interim Financial Statements regarding significant uncertainties that could give rise to significant doubts on business continuity. As regards this aspect, the conclusions of the Independent Auditors are set out with no observations.

The Independent Auditors’ Report to Astaldi Group’s Interim Financial Report at 30 June 2020 is attached (document available only in Italian version).

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INFORMATION REQUESTED BY CONSOB PURSUANT TO ARTICLE 114 OF ITALIAN LEGISLATIVE DECREE NO. 58/1998 (“CONSOLIDATED FINANCE ACT - TUF”)

At the request of CONSOB  pursuant to article 114 of Legislative Decree No. 58/1998 (“Consolidated Finance Act - TUF”), Astaldi provides the following information

a)    Net Financial Position of Astaldi S.p.A. and Astaldi Group at 30 June 2020, with highlighting of short-term items separately from medium/long-term items

At 30 June 2020, the Group recorded Net financial debt (as per ESMA memorandum dated 10 February 2005) equal to EUR 2,686.7 million (EUR 2,437 million at 31 December 2019) and comprehensive financial debt of EUR 2,368.7 million (EUR 2,301.6 million at 31 December 2019).

On the same date, Astaldi S.p.A. recorded Net financial debt (as per ESMA memorandum dated 10 February 2005) equal to EUR 2,755 million (EUR 2,481.2 million at 31 December 2019) and comprehensive financial debt of EUR 2,514.1 million (EUR 2,419.1 million at 31 December 2019).

It must be preliminarily noted that, further to submission on 28 September 2018 of the application for admission to the procedure for composition with creditors “with reservation”, pursuant to article 161, subsection 6, of the Italian Insolvency Law, the financial liabilities directly referring to Astaldi S.p.A. at said date have been classified among the short-term items of the Net Financial Position.

Please find below a summary of the Net Financial Position at 30 June 2020 of Astaldi Group and, to follow, of Astaldi S.p.A.

Table no. 1 - Net Financial Position of Astaldi Group at 30 June 2020.

Table no. 2 - Net Financial Position of Astaldi S.p.A. at 30 June 2020

The Comprehensive net financial debt takes into account, in addition to the net financial debt (letter S in the above table) determined in accordance with the provisions of the recommendation of the European Securities and Markets Authority – ESMA (formerly CESR) of 10 February 2005, the non-current loan assets. Finally, it should be noted that the Net Financial Debt, also in comparative terms, does not contain the amount of the derivatives used in hedging activities since by their very nature they do not represent financial amounts.

b)    Overdue debts of Astaldi S.p.A. and Astaldi Group at 30 June 2020, split according to type (financial, commercial, tax, social security and due to employees) and any related action taken by creditors

The overdue debts of Astaldi Group and Astaldi S.p.A. at 30 June 2020 are shown below.

Overdue debts of Astaldi S.p.A.^[1] at 30 June 2020

Please find below a summary of the overdue debts of Astaldi S.p.A. at 30 June 2020.

Table no. 3 - Overdue debts of Astaldi S.p.A. at 30 June 2020

Overdue debts of Subsidiaries and Joint Operations at 30 June 2020

Please find below a summary of the overdue debts of subsidiaries and joint operations at 30 June 2020.

Table no. 4 - Overdue debts of Subsidiaries and Joint Operations at 30 June 2020

As regards actions taken by the creditors of the other Subsidiaries and Joint Operations, it must be noted that at 30 June 2020, some legal actions had been taken by said creditors (payment orders and/or collection notices) with regard to trade relations. The aggregate value of these debts amounts to approximately EUR 1.3 million^[2].

c)    Main changes in transactions involving related parties of Astaldi S.p.A. and Astaldi Group with regard to the last annual financial report approved pursuant to article 154-ter of the Consolidated Finance Act

 The main transactions that took place in HY1 2020 concern:

• the development of construction works performed by the Company (also through special joint operations set up with other partners) on behalf of the investee SPVs for Concession activities, mainly referring to the project relative to the Milan Underground, Line 4 (MM4 Consortium, Italy). As regards the activities in question the corresponding operating revenue, as well as the related trade receivables and contract assets/liabilities were recognised in the interim consolidated financial statements at 30 June 2020;
• the consortium costs charged to the Parent by the following companies: (i) Brennero Tunnel Construction S.c.r.l., (Brenner Base Tunnel, Lot Mules 2-3) and Metro C S.c.p.A. (Rome Underground, Line C);
• the effects of a lease contract currently in force between the Parent and Brennero Tunnel Construction S.c.r.l. for a Tunnel Boring Machine (TBM) needed to excavate the Brenner Base Tunnel were also recognised.

In addition to what is directly referable to the usual performance of business activities^[3], the loans made by the Parent to its subsidiaries Astaldi Canada Enterprises Inc. (approximately EUR 10.5 million, to deal with the developing of the production activities in Canada) and Astaldi Concessioni S.p.A. (approximately EUR 8.2 million, for the planned investments in the concession segments) must be in particular noted in HY1 2020.

d)    Compliance with covenants, negative pledges and all other debt clauses of Astaldi Group entailing limitations on the use of financial resources, with listing at 30 June 2020 of the level of compliance with said clauses

Submission of the application for composition with creditors has entailed the occurrence of a significant event pursuant to existing loan and bond loan contracts on said date and, in some cases, has led to forfeiture of the benefit of the term of the relative contracts. Moreover, it must be noted that the specific provisions of articles 55 and 169 of the Italian Insolvency Law would mean that the financial debts of Astaldi could be taken as overdue from the date of submission of the appeal, regardless of the relative contractual provisions.

Instead, with regard to the bond loan originally worth EUR 75 million issued on 12 February 2019 (Euro 75,000,000.00 Super-senior Secured PIYC Floating Rate Notes due 12 February 2022), subsequently increased and modified up to EUR 190 million on 27 November 2019 (up to Euro 190,000,000.00 Super-senior Secured PIYC Floating Rate Notes due 12 February 2022), it must be noted that the latter – while not entailing the application of financial covenants – contains a negative pledge clause and a limitation of the undertaking of additional debt, save for some specific exceptions provided for in the relative bond loan regulations. Furthermore, the use of financial resources (so-called use of proceed) arising from said bond loan is only allowed within the limits set down in the authorisation provided by the Court of Rome, Insolvency Division, pursuant to article 182-quinquies, subsection 3, of the Italian Insolvency Law. At 30 June 2020 said clauses resulted to be complied.

e)    State of implementation of any business and financial plans

As already disclosed by the Company on 16 September 2020 (press release available on the Company’s website www.astaldi.com, in the section Media-Press releases), the Company deemed it appropriate to review 2020 estimates to also take into account the COVID–19 impact on the Group’s operations in 2020 first half, as recalled hereafter:

• Total revenue: approximately EUR 1.5 billion;
• Adjusted EBITDA: > 5%;
• Adjusted EBIT: > 3%;
• Net Financial Debt (after restructuring of debt exposure): positive for more than EUR 300 million.

The above-reported values are only referable to operations included in the Scope of Continuity, as defined in the Composition Plan and Proposal.

As already pointed out in the above-mentioned press release, as regards FY 2021, 2022 and 2023, taking into account the measures hypothesised by the Italian Government and by the governments of other European and non-European countries that provide for the relaunch of the economy mainly through extraordinary investment plans that will see the infrastructure sector as one of the most heavily involved and promoted, and the Group’s future activities could benefit from this, the Company, based on the information currently available, believes that it is reasonable that in the above-mentioned years the conditions are met to recover the income volumes and margins estimated not to be achieved in 2020, in order to pursue the objectives included in the Plan, although not an annual basis, in the overall timeframe considered therein (2019-2023). 

It is herein also reaffirmed that should this emergency situation due to Covid-19 pandemic persist, and whose duration and eradication are not foreseeable, it cannot be excluded that the assumptions taken into consideration by the Board of Directors at the time of the evaluation of the new  2020 management guidelines may prove unreliable, generating negative effects on the Group’s equity, economic and financial position, which are not foreseeable at the current date and which could jeopardise achievement of the Plan within the timeframe taken into consideration.

All the press releases mentioned herein are also available on the Company’s website www.astaldi.com, in the section Media-Press releases.

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STATEMENT OF MANAGER IN CHARGE OF FINANCIAL REPORTING PURSUANT TO ARTICLE 154-BIS, SUBSECTION 2, OF THE CONSOLIDATED FINANCE ACT

The Manager in Charge of Financial Reporting Paolo Citterio, hereby declares, pursuant to subsection 2 of article 154-bis of Legislative Decree No. 58/1998 (Consolidated Finance Act), that the accounting information contained herein tallies with accounting documents, ledgers and entries.