1 DANIELI & C. OFFICINE MECCANICHE S.p.A. Buttrio (UD) via Nazionale n. 41 Fully paid-up share capital of euro 81,304,566 Registration Number with the Register of Companies of Udine, tax number and VAT registration number PRESS RELEASE DANIELI GROUP The Danieli Board of Directors met today, September 25, 2013, to examine and approve the annual report for Danieli and the Danieli Group, referring to the year ended June 30, CONSOLIDATED DATA FOR THE FISCAL YEAR FROM JULY 1, 2012, TO JUNE 30, 2013 (figures in millions of euro) to 30/06/2013 to 30/06/2012 Variation (*) Revenues 2, , % Gross operating margin (EBITDA) % EBIT % Net profit for the period % Net profit attributable to the Group % Net positive financial position % Number of employees 10,944 10,037 9% Group order book 3,206 3,225-1% (Steelmaking) % (*) Figures readjusted following the application of the amendments to IAS19 (Employee Benefits). Summary of results for the year 2012/2013 Group revenues remained steady in the engineering and manufacture of metal producing plants (Plantmaking segment), while the ABS Group (Steelmaking segment) made up of Acciaierie Bertoli Safau and ABS Sisak - saw a substantial drop in revenues because of the recession in Italy/Europe. The Board of Directors acknowledges the results and points out that: - Danieli Plantmaking (engineering and manufacture of metal making plants (steel and aluminum)) met its revenue objectives, thanks not only to its leading position in many sectors but also to the increasing competitiveness of the engineering and manufacturing costs of Danieli Asia, while continuing to produce quality products. We can also confirm the good level of competitiveness of our European subsidiaries, especially Sweden and France, in addition to the Italian Group; - ABS Steelmaking, in the first six months of 2013, showed signs of improvement, and this will continue throughout the second half of 2013 as well. ABS has also
2 2 prepared its strategy up to 2018, which will require an estimated 200 million euro of additional investment in the companies of the ABS Group. On the investment front, in Plantmaking our investment program for the new Research Center and workshop in Buttrio has been completed, while the new workshops in India and Russia will definitely be inaugurated by the end of November In Steelmaking, ABS has completed its first investment phase in Italy and at Sisak (Croatia) and the plants have been started up successfully. Worldwide prospects for the metal making sector affecting Danieli s Plantmaking business In mid 2013 (6 months) world steel production reached almost 790 million tons, a 2% increase over the same period last year. China, India and the Middle East are recording a further increase in volumes while Russia, the US and the EU are posting decreases, and Japan is gradually catching up to its consumption levels of the past. The proven strategic role of the metals producing industry and its bolstering effect on development and employment in the manufacturing industry in general, has heightened interest in monitoring and developing this sector, even in countries with mature economies. In fact, the US, UK, Germany and France have plans to relaunch the metals industry (steel/aluminum), as well as the automotive/high-tech and manufacturing industries in general. It is however a fact that demand will increase, especially in Asia. We estimate that a significant general improvement could start to take shape at the end of 2014, and then fully materialize in Summary of results by business segment Revenues (in millions of euro) 30/06/ /06/2012 Variation Plantmaking 2, , % Steelmaking % Total 2, , % Gross operating margin (EBITDA) (in millions of euro) 30/06/ /06/2012 (*) Variation Plantmaking % Steelmaking % Total % Operating income (in millions of euro) 30/06/ /06/2012 (*) Variation Plantmaking % Steelmaking % Total % Net profit for the year (in millions of euro) 30/06/ /06/2012 (*) Variation Plantmaking %
3 3 Steelmaking % Total % (*) Figures readjusted following the application of the amendments to IAS19 (Employee benefits). Strategies One of Danieli s mottos is Passion to innovate and perform. The Danieli Group will continue to grow internationally, and to strengthen its competitiveness in terms of innovation, technology, quality, costs, productivity and customer service. Our general strategy focuses on innovation, high-tech and noble products in Europe, and on the design and manufacture of products that are tested and perfected in our workshops in Asia, which produce the same quality as in Europe. In particular, the following investments are needed to sustain this strategy, which was first put into place about ten years ago: - Plant Making (DANIELI): - opening of the new Research Center" in Buttrio to increase our research and innovation capabilities; - expansion of our Chinese workshops, which will essentially be doubled in size; - startup of our new workshops in India and Russia, together with the new engineering departments; - expansion of Danieli Academy (school for junior employees and refresher courses for senior employees). - Steel Making (ABS) - upgrading of existing plants in the meltshop and blooming mill areas of ABS Cargnacco; - the new ROTOFORGE project; - new investments in Sisak, Croatia (which will resume production by the end of September) and in Metz, France, with the new European Metallurgical Research Center; - increasing the value added of the range of steels produced. Order Book The Group s order book has basically remained unchanged compared to 2012 and is well diversified according to geographical area and product line; for the year ended June 30, 2013, it amounts to 3,206 million euro (of which 184 million euro in the production of special steels) compared to 3,225 million euro for the period ended June 30, 2012 (of which 173 million euro for special steels). Human resources At June 30, 2013, the Danieli Group employed 10,944 people, an increase of 907 over the year ended June 30, The number of staff has grown 9% since 2012, and this is due in particular to the upsizing of Danieli Asia. Danieli pursues high standards of innovation, excellence and quality in customer service so it follows that the team's excellence is even more significant. Therefore, in addition to constant attention to encouraging the potential and aptitude of people, it was also decided to expand the Danieli Academy.
4 4 Consolidated Value Added The economic value that is generated converts the Group s ability to create wealth and distribute it into remuneration for the stakeholders. The tables below show how the economic value is distributed among stakeholders through reclassification of data from the consolidated income statement. Total value added A. Revenues 2,782,294 3,081,108 B. Intermediate operating costs 2,180,978 2,483,754 (A - B) Characteristic value added 601, ,354 C. Accessory parts 25,938 52,693 Total Net Value Added 627, ,047 Total value added expressed in percentage increased in the period and remained steady in spite of reduced revenues. The figure for personnel remuneration remains high and accounts for 65% of the total value added, as it plays a central role within the Danieli organization. Resolutions of the Board of Directors In addition to approving the financial statements, the Board of Directors will make the following proposals at the shareholders meeting to be held on October 28, 2013, at 2:00 p.m. (only one convocation): 1. Distribution of a unit divided of 0.30 euro for ordinary shares and euro for savings shares, amounting to a total of 23,074,526 euro, in exchange for coupon n. 35 for both categories of shares on November 4, 2013, payable as of November 7, 2013 (record date November 6, 1013); this dividend represents the distribution of the year s profit. The Board also acknowledged that during the year bonuses were paid out to employees amounting to a total cost of approximately 6.2 million euro for the company. Danieli Group Operations The Danieli Group essentially runs two main businesses: The first Plantmaking involves plant engineering and manufacturing, including turnkey plants, for the production of metals. Its principal operating companies in the Plantmaking segment are in Europe (Italy, Sweden, Germany, France, Austria, The Netherlands, the United Kingdom, Russia, Spain) and in Asia (China, Thailand, India, Vietnam), with service centers in the US, Brazil, Egypt and Ukraine. In the Plantmaking segment Danieli is one of the top three manufacturers in the world for metal making plants and machines, leader in meltshops and plants for the production of long products (these plants produce steel in an electric arc furnace sometimes from direct reduced iron and in addition to being competitive in terms of Capex and Opex, are also environment-friendly, compared to integrated plants that use blast furnaces and coke), and second in the manufacture of plants for flat products. Not only is Danieli recognized for its capabilities as a plant designer, but also as a plant manufacturer, hence the motto: we do not shop around for noble equipment. The second business - Steelmaking involves the production of special steels at Acciaierie Bertoli Safau S.p.A. (ABS) and ABS Sisak d.o.o. (ABS Sisak). These products are intended for the automotive industry, heavy-duty vehicles, engineering, energy and petroleum industries. ABS is the number one steelmaker in Italy and among the leading ones in Europe.
5 5 In Friuli-Venezia Giulia the Danieli Group provides employment for about people, either directly or through linked industries, and represents almost 40% of the yearly exports of the province of Udine and 20% of those of the region of Friuli. Attached are the balance sheet, income statement, and consolidated financial position for the period ended June 30, 2013, together with the data for the period ended June 30, 2012, for the Group and the parent company Danieli & C. Officine Meccaniche S.p.A.
6 6 Consolidated Financial Statements of the Danieli Group in millions of euro to 30/06/2013 to 30/06/2012 (**) CONSOLIDATED BALANCE SHEET (*) Assets Non-current assets 1, Current assets 4, ,187.4 Total Assets 5, ,100.5 Liabilities and shareholders equity Share capital Other reserves and profits carried forward, including 1, ,226.2 profit for the year Shareholders' equity 1, ,307.5 Minority interest in shareholders equity 4.9 (15.4) Non-current liabilities Current liabilities 3, ,304.2 Total Liabilities 5, ,100.5 to 30/06/2013 to 30/06/2012 (**) CONSOLIDATED INCOME STATEMENT Revenues 2, ,081.1 Raw materials and consumables (1,399.3) (1,676.2) Personnel costs (409.0) (375.8) Other operating costs (693.5) (719.1) Depreciation, amortization and write-downs (98.1) (95.8) Operating income Financial income (charges) Profit (loss) from foreign currency transactions Income from valuation of shareholdings in affiliates according to the net equity method (0.9) 2.0 Profit (loss) before taxes Income taxes (45.2) (92.3) After-tax profit Net loss (profit) attributable to non-controlling interests (0.6) 17.3 Group Profit (*) Please note that some items of the consolidated balance sheet and income statement are presented in abridged form compared to the schedules of the annual report. (**) Figures readjusted following the application of the amendments to IAS19 (Employee Benefits) and the application of IFRS 3.
7 7 CONSOLIDATED NET FINANCIAL POSITION (in millions of euro) 30/06/ /06/2012 (*) Variation Non-current financial assets - Non-current financial receivables Total non-current financial assets Current financial assets - Securities and other financial receivables (88.2) - cash at banks , Total current financial assets 1, , Non-current financial liabilities - Bank debts (41.0) Total non-current financial liabilities (41.0) Current financial liabilities - bank debts and other financial liabilities Total current financial liabilities Non-current net financial position (175.5) (221.9) 46.4 Current net financial position 1, ,048.0 (21.4) Net financial position Gross financial indebtedness (1,001.5) (917.9) (83.6) (*) Figures readjusted following the application of IFRS 3.
8 8 Financial statements of Danieli & C. - Officine Meccaniche S.p.A. in millions of euro BALANCE SHEET (*) 30/06/ /06/2012 Assets Non-current assets 1, ,278.1 Current assets 1, ,404.0 Total Assets 2, ,682.1 Liabilities and shareholders equity Share capital Other reserves and profits carried forward, including profit for the year Shareholders' equity Non-current liabilities Current liabilities 1, ,996.7 Total Liabilities 2, ,682.1 in millions of euro INCOME STATEMENT (*) 30/06/ /06/2012 (**) Revenues ,261.8 Raw materials and consumables (503.8) (745.5) Personnel costs (150.5) (144.6) Other operating costs (298.5) (293.0) Depreciation, amortization and write-downs (15.8) (16.9) Operating income Financial income (charges) 51.3 (2.5) Profit (loss) from foreign currency transactions Profit (loss) before taxes Income taxes (4.2) (27.7) Net profit for the period (*) Please note that some items of the consolidated balance sheet and income statement are presented in abridged form compared to the schedules of the annual report. (**) Figures readjusted following the application of the amendments to IAS19 (Employee Benefits).
9 9 NET FINANCIAL POSITION OF DANIELI & C, - OFFICINE MECCANICHE S.p.A. (in millions of euro) 30/06/ /06/2012 Variation Current financial assets - other financial receivables (0.1) - cash at banks (121.5) Total current financial assets (121.6) Non-current financial liabilities - bank debts (66.1) Total non-current financial liabilities (66.1) Current financial liabilities - debts to banks and other financial liabilities Total current financial liabilities Non-current net financial position (56.5) (122.6) 66.1 Current net financial position (165.8) 77.5 (243.3) Negative net financial position (222.3) (45.1) (177.2) Gross financial indebtedness (321.0) (265.4) (55.6)
10 10 The officer in charge of drawing up the corporate accounting documents, Mr. Alessandro Brussi, declares, pursuant to paragraph 2 of article 154 bis of the Financial Consolidation Act, that, to the best of his knowledge, the accounting data in this press release correspond to the results in the accounting records, account books and book entries for the period ended June 30, CORPORATE CONTACTS: Investor relations: Mr. Alessandro Brussi (tel ) Department of Corporate Affairs: Daniela Boz (tel ) Danieli & C. Officine Meccaniche S.p.A. Via Nazionale Buttrio (Udine) Fully paid-up share capital of euro 81,304,566 Tax number, VAT registration number and number of registration with the Register of Companies of Udine: REA number (Index of Economic and Administrative Information): UD Tel fax Financial statements and publications available on the web site of Borsa Italiana S.p.A. and on the web site of the Company: Investors' section