DANIELI YEAR 2018

CONTENTS

2 LETTER TO THE SHAREHOLDERS

6 SOME THOUGHTS ABOUT MARKET STRATEGY Danieli Year 2018 8 DANIELI GROUP Results from AT A GLANCE Innovation, Reliability 13 REPORT OF THE BOARD and Partnership OF DIRECTORS

35 DANIELI PLANTMAKING DIVISION

40 THE DANIELI TEAM

48 RESEARCH AND DEVELOPMENT

ANNEX DANIELI DIGI&MET SIMPLIFYING METALS COMPLEXITY

52 ENGINEERING DESIGN PROCESS

54 AUTOMATION AND PROCESS CONTROL SYSTEMS

56 DANIELI QUALITY PHILOSOPHY

64 LSTK CAPABILITIES

66 DANIELI SERVICE AND CUSTOMER SUPPORT

68 DANIELI ENVIRONMENT

70 MAIN ORDERS ACQUIRED AND PLANT STARTUP

90 DANIELI STEELMAKING DIVISION

102 DANIELI HISTORY AND MILESTONES

Danieli & C. Officine Meccaniche S.p.A. The data in this publication Headquarters in Buttrio (Udine) Italy refer to the period Share Capital: euro 81,304,566 fully-paid 01.07.2017 / 30.06.2018

GROUP 1 Dear Shareholders, Customers and Colleagues

Letter to the Stakeholders Results for the fiscal year 2017 / 2018:

(millions of euro) 2017 / 18 2018 / 19

Group Results Group Forecast

Revenue 2,706 2,750 / 2,850

EBITDA 229 220 / 230

Order book 2,954 2,900 / 3,100

The fiscal year 2017/18 ended according to forecast, with sales In spite of this, the plant-making division is expected to record and EBITDA improved compared to 2016/17 by respectively 9% low margins also for the fiscal year 2018/19, since its invoiced and 13.%. value will include the low-priced sales of plants of 2017. However, an improvement is expected starting from 2019/20, certainly as a result of a reduction in the under-absorption costs, Market and Scenario Forecast and we also will try hard to improve sales margins, which today are not yet adequate. The two main business segments, plant making and steel This will depend also on the success of the currently ongoing making, have shown different trends by comparison to the restructuring policies aimed at reducing overcapacity in the previous fiscal year. organizations of the major plant makers worldwide, as well as on In fact, as anticipated in the previous Letter to the Shareholders these firms’ determination to pursue positive balance sheets. for fiscal year 2016/17, the plant-making segment still feels the In contrast, the steel-making segment recorded a positive result effects of the serious crisis that steel makers experienced during in the second half of the year for the reasons noted above and is 2015, 2016 and 2017. expected to maintain the same trend during the next fiscal year. This has reduced considerably not only steel makers’ new The big question is how long this positive situation for the steel investments, but also the purchase prices of new plants. market will last, as it depends on among other things the USA Consequently, the suppliers of steel-making equipment and policy, but also on the trends of the world economy. plants also have suffered from this crisis, because of the under- At the moment we are gearing up for good market conditions absorption of fixed costs and narrow sales margins. estimated for the next 12 to 18 months’ period and to organize At the end of 2017, thanks to the customs tariff policies applied ourselves for the next market downturn. in the USA and then progressively also in Europe, as well as to the limitations imposed on the imported steel quantities, in the USA and then gradually also in Europe and in other countries, Technological Achievements in addition to steel consumption increase steel makers saw an increase in demand and in revenue margins. As regards our technological achievements, which are essential Consequently, the demand for new steel-making plants also has for us to remain a step ahead of our competitors, the following increased, starting from spring 2018. list details the most significant ones:

2 DANIELI YEAR 2018 GROUP 3 Letter to the Stakeholders

Plant Making alone accounts for 50% of the global one, and therefore from a domestic customer base. — We started up two high-tech plants for VAS and VASD Obviously, the Chinese competitiveness should be considered (voestalpine Stahl, Austria). This concerns a continuous casting as one of the benchmarks that need to be monitored carefully. machine producing high-quality steel slabs and a new wirerod Certainly, such factors as “innovaction” and quality will mill whose main features in terms of quality and flexibility are contribute to counter this new competition, which in turn is unmatched worldwide. The commissioning of these plants was improving in quality and the number of patents it lists. achieved to the customer’s full satisfaction. Therefore, our next goals include the strengthening of the — The second MI.DA. endless plant was started up successfully activity of our China-based workshops and engineering in the USA. Steel makers are showing a growing interest in this departments in order to remain cost-competitive with the compact plant which, besides being competitive in terms of Chinese plant-makers, while always maintaining high levels of CapEx and OpEx, can be considered environmentally friendly product quality and technology to be front runners. because of the substantial reduction in CO2 emissions, energy In parallel we also will improve the competitiveness and and water consumption and noise it allows the operators to productivity of our production plants in Thailand, India, Russia achieve. and Europe, to serve the local markets efficiently. — Danieli Automation has obtained important successes with Moreover, competition from Germany and Japan has been the new generation of high power drives, induction heaters, and very strong lately – during the market downturn - due to an steps towards Industry 4.0 and robotization. overcapacity in relation to demand. — Finally, the outlook for FATA EPC is very good in relation Therefore, restructuring plans are ongoing and we hope that this, The working environment, services to staff (including the Conclusions to orders of environmentally friendly power plants, not only combined with an increase in demand, will help sales prices to provision of nursery and preschool facilities), and a sports centre gas-powered processes but also based on concentrated solar improve. equipped with a summer campus for the employees’ children, are To conclude, in short: power technologies. The future prospects for the latter cutting- under continuous improvement. edge technologies are very promising, if results come up to Also, the “environmentally friendly and safe” policy is being — Results have been in line with forecasts. expectations. Steel Making constantly enhanced and implemented in our workshops, and — Even if the current fiscal year 2018/19 is expected to be then integrated into the design solutions of our plant-making better than the past 2017/18, the invoiced value for the plant- In anticipation of a possible market downturn that is likely to division. making segment will show the effects of the sales of plants at Steel Making occur in 12 or 18 months’ time, we are working to improve low prices during the crisis period, which are not yet sufficiently productivity, OpEx and service to the customer. One of the most successful examples is the MI.DA. project, improving due to the strong competition among plant makers for With the steel market on the upswing, the outlook for the steel- We believe that investing in metallurgical research and further which is becoming a global benchmark for reducing the overcapacity and market leadership. making segment is very good. developing our more downstream activities and Industry environmental impact of a steel-making plant. — On the plus side, however, it is certain that the backlog of the From a technological point of view, ABS (Acciaierie Bertoli 4.0 technologies will enable us to improve considerably the Our company is well aware of the fact that, in order to secure plant-making division will progressively improve, and this should Safau) will proceed with its Industry 4.0 and robotization competitive level of our company. its future, it must produce profit and that in order to produce positively impact the financial statements of the fiscal year program. profit the average intellectual level and motivation of the team, 2019/20 compared to 2018/19, which in any case will be better It will continue to pursue competitiveness and high added-value together with an adequate consideration of merit, must be than the previous one. products, as well as to progressively mitigate its environmental Teamwork and Leadership constantly improved. — For the steel-making division, the fiscal year 2018/19 is impact while improving its safety strategy. And this applies as well to the protection of the environment expected to bring excellent results. and safety in the workplace, in addition to a stimulus to innovate — The current plan for investments in “innovaction”, technology Obviously, the above-mentioned goals in general can be with a view to the customers’ satisfaction. and “green steel” solutions will be pursued further. Moreover, Competitiveness: achieved more easily if supported by efficient teamwork and Also worth mentioning on this point is the promotion of social a particular focus will be given to staff training and soft skills, positive leadership. initiatives outside the company, referring here to cultural with a view to the team’s continuous improvement in support of In order to enhance teamwork within the company, together with activities and to the maintenance of historical heritage. competitiveness and customer satisfaction. Plant Making a continuous updating in line with technological developments, In order to maintain the positive trend detailed above, including — The shareholders have agreed to leave as usual a large part which is essential to be able to innovate and compete, we also profits, continuous investments are necessary and in this regard of the profits (85%) in the company to finance innovation and Most probably in the near future (in the next 5 to 8 years) will further expand the activities of Danieli Academy. we wish to thank our shareholders and stakeholders for the trust investments and to remain financially strong. our additional competitors in several fields will be Chinese In addition to its technological efforts, Academy will focus more they place in our company: through the last 15 years they have companies that can benefit from approximately 40% lower on soft-skills training in relation to the different specializations allowed us to invest on average 85% of our profits back into the Gianpietro Benedetti costs and from the fact that they operate in a local market that and duties. company. CHAIRMAN OF THE BOARD OF DIRECTORS

4 DANIELI YEAR 2018 GROUP 5 Some thoughts about market strategy

Our industry is emerging from one of the longest price slumps in of a lean, agile and responsive organization, we have to put recent memory. ourselves in a condition in which there is no risk of losing these This has had major repercussions for our company - leading to characteristics due to an under- or oversizing that is unrelated to a significant optimization of resources, which from a peak of real market conditions. As everyone knows, this market is highly 11,000 employees has dropped to the current number of 9,358 changeable and has recently shown that it can undergo sudden, - and in the world. Production and productivity are at recession major changes in a short time. levels, and a market recovery is needed to respond to market demands. But how have we managed to come out of this stronger than Innovation before? Everything we do has to be founded on a solid basis of skills and We were quick to make the decision to upgrade our organization knowledge, of which innovation is the backbone, innovation that and then implement our plan in order to remain competitive; is increasingly being done for and with our customers/partners. we diversified at the right time and in the right way by investing Innovation at 360 degrees on products, processes, mechanics in both the steelmaking segment and in plantmaking with the and automation, which is becoming more and more closely acquisition of Fata SpA; we never stopped investing in resources connected with digitization. and technology; and above all, in spite of the strong market Investing in resources for innovation has never stopped, but in pressure and trends (not least the under absorption that cut our the last few years it actually has been given a boost thanks to profit margin) we never renounced our international nature, the partnerships we set up with various customers, with the new as evidenced by the numerous manufacturing and engineering research center and the new Digi&Met division, a true breeding facilities we have all over the world. ground for Industry 4.0 applications for steelmaking. Owning large factories certainly caused us to suffer in the last few years of the market slump, as they require a continuous work flow to support themselves and be sustainable. But now they are Job Order Filling again a formidable asset to our organization, enabling us to be more competitive and to perform better than our competitors We are guided by the knowledge that the best way to satisfy our short, it encourages the creation of long-term relationships, or allows our workshops to be effective and efficient while reaching who shop around. customers is to give them what we promised within the specified even better, Endless Partnerships. their maximum potential. timeframe and with the quality they expect from us. One result Having our own factories is good, being present where the Now we have to keep evolving to remain “a step ahead”. is a renewal of the job order filling process. More satisfaction steel is produced and used is even better, but it’s not enough! The choices that were made several years ago are no longer means more profit and therefore a more promising future. We What is required is an unwavering commitment to continuously People applicable or current, and the ones we make at the present time feel that shifting the company’s focus towards the customer is improving our supply chain and internal productivity toward will not be applicable in the future. necessary and cannot be delayed; this is the reason that currently customer satisfaction, in terms of quality and costs. We mentioned the importance of being close to markets and With these thoughts in mind, and the optimistic outlook of we have several specific projects under way within the Group to being flexible in monitoring them, giving attention to the the current market cycle, let’s take a look at the main points of achieve this. customer, innovation, workshops and supply chain, all working the medium-to-long-term strategy we are working on, where Activity Planning together to achieve quality in terms of time and costs and the focus is on a single unchanging goal, the satisfaction of our continuously seeking excellence in all technological aspects. customers. We do not shop around for noble equipment Our business involves complex projects with long lead times, To fulfill this requirement we can count on the excellence of our and each project differs from the previous one. It is obvious that human capital. One of our strengths and strategic qualities that sets us apart Planning is a significant and substantial part of all our processes. We must never stop striving for merit, encouraging it in our Flexibility from our competitors is that we own our factories. Starting from the first sales negotiations, through to project kick- colleagues, rewarding it and praising it, thereby fostering a spirit More than 50% of steel consumption is in Asia, where we have a off and all the activities to prepare for the startup of a new plant, of initiative in all 9,000 of our employees. The planning of activities and the method used to fill job orders strong presence with workshops in China, Thailand, and India. planning is fundamental to reach the desired standards and to Passion and accountability in the people who work at Danieli are must not be confused with inflexibility and bureaucracy. In fact, Having full control over our manufacturing means that we assure the customer that we can deliver what was promised in intangible assets, great qualities to be nurtured so that we can we are working towards improving the way we respond to the can guarantee high-quality standards, and the fact that we are the contract. continue to be recognized as a partner of reference. short-term performance of a single project, as well as our ability physically close to these markets means shorter lead times and We are working on organization, tools and procedures to quicken to anticipate fluctuating market trends in the long term. This more efficient after-sales service. The result of this is increased the pace in this direction. Giacomo Mareschi Danieli, CEO is currently our mantra; while recognizing the positive aspects focus on details that demonstrates value to our customers. In And let’s not forget that careful planning is the variable that Alessandro Trivillin, CEO

6 DANIELI YEAR 2018 GROUP 7 DANIELI PROCESS Danieli at a Glance CONTROL SYSTEMS Processes and Technologies

The Danieli Team is a multinational collection of companies that have helped shape the history -not to mention the progress- of metals production. The Danieli Group’s know-how covers essentially all the production steps for high-quality metal products, from mining to finish processing, including blast furnaces and direct reduction plants, as well as electrical meltshops and converter shops. SCRAP SHEARS AND SHREDDERS

DANIELI TURNKEY PLANTS SUPPLIED WORLWIDE

DANIELI ENVIRONMENTAL DIRECT ELECTRIC PLANTS REDUCTION ARC FURNACES PLANTS

BLAST FURNACE SECONDARY AND CONVERTER METALLURGY PROJECTS STATIONS

CASTING STRANDS SLAB, BLOOM, HOT STRIP, HEAVY SECTION, SEAMLESS TUBE EXTRUSION ALUMINIUM FOR SLABS, AND BILLET PLATE AND COLD RAIL, BAR AND WELDED AND FORGING HOT AND COLD BLOOMS, GRINDING MILLS AND WIREROD PIPE PLANTS PRESSES MILLS AND BILLETS MACHINES MILLS

Thorough planning, complete systems integration and construction with our own heavy lifting equipment, provide our teams with full operational flexibility. Danieli Engineering DANIELI HEATING and Danieli Construction International: your trusted STRIP DRAWING AND HEAT partners with 37 years of experience in on-time project delivery PROCESSING AND PEELING TREATMENT and cost management. LINES MACHINES SYSTEMS

8 DANIELI YEAR 2018 GROUP 9 Danieli at a Glance Group Structure

Finance Companies DANIELI & C. Board of Directors OFFICINE MECCANICHE SPA ITALY GIANPIETRO BENEDETTI Chairman

DANIELI INDUSTRIELLE CAMILLA BENEDETTI INTERNATIONAL SA BETEILIGUNG SA LUXEMBOURG LUXEMBOURG Deputy Chairman GIACOMO MARESCHI DANIELI CEO

DANIELI ALESSANDRO TRIVILLIN FINANCE SOLUTIONS SA LUXEMBOURG CEO ALESSANDRO BRUSSI CARLA DE COLLE CHIARA MIO GIULIO CAPOCACCIA

PLANTMAKING STEELMAKING Directors

EUROPE SOUTH EAST ASIA AMERICAS MIDDLE EAST EUROPE Board of Statutory Auditors

DAVIDE BARBIERI President GAETANO TERRIN DANIELI DANIELI CENTRO DANIELI UK ROTELEC SA (FRA) DANIELI METALL. DANIELI DANIELI MIDDLE EAST ABS SPA VINCENZA BELLETTINI AUTOMATION SPA COMBUSTION SPA HOLDING LTD EQUIPMENT & SERVICE DO BRASIL SA ENG. & SERV. CO (ITA) (ITA) (ITA) (GBR) CO LTD (CHN) (BRL) (EGY) Auditors GIULIANO RAVASIO MARINA BARBIERI TELEROBOT LABS SRL DANIELI CENTRO INNOVAL SUND BIRSTA AB DANIELI CO LTD DANIELI INDUSTRIAL ABS CENTRE (ITA) CRANES SPA TECHNOLOGY LTD (SWE) (THA) CORPORATION BETEILIGUNG CO METALLURGIQUE SARL EMANUELA ROLLINO (ITA) (GBR) (USA) (SAU) (FRA) Deputy Auditors

DANIELI SYSTEC DOO DANIELI GERMANY FATA SPA (ITA) TERMO MAKINA SAN. DANIELI AUTOMATION DANIELI ABS Group Executive Board (HRV) GMBH (DEU) V.T. A.S. (TUR) CO LTD AUTOMATION USA LLC DEUTSCHLAND GMBH (THA) (USA) (DEU) GIANPIETRO BENEDETTI Chairman DANIELI CONSTR. DANIELI PROCOME FATA GULF TURISMO 85 SRL* DANIELI INDIA LTD ABS IBERICA SL INTERNATIONAL SPA IBERICA SA CO WLL (QAT) (ITA) (IND) (ESP) CARLA DE COLLE (ITA) (ESP) Chairman Steelmaking ALESSANDRO TRIVILLIN

DANIELI ENGINEERING DANIELI VOLGA LLC MORE SRL (ITA) SCUOLE E ASILI DANIELI ENGINEERING ABS GIACOMO MARESCHI DANIELI & SERVICE GMBH (RUS) CECILIA DANIELI SRL* JAPAN LTD SCANDINAVIA AB (AUT) (ITA) (JPN) (SWE) ALESSANDRO BRUSSI WERNER AUER ROLANDO PAOLONE DANIELI CORUS DANIELI MORGÅRDSHAMMAR AB INDUSTRIELLE The development plan which provided ABS SISAK DOO TECHNICAL SERVICES HENSCHEL SAS (SWE) BETEILIGUNG CO LTD (HRV) BV (NLD) (FRA) (VNM) for the acquisition of leading LUCA FERRARESI companies in the supply of equipment ANTONELLO MORDEGLIA for the steel industry has been completed. Since 2000, our product ESW lines have been expanded to cover RÖHRENWERKE GMBH blast furnaces, DR plants, seamless (DEU) and welded pipe mills and now cover the whole spectrum of ironmaking and steelmaking plants, from iron ore to QUALISTEEL SPA any steel finished products as well as (ITA) Plantmaking and Steelmaking Companies *Services and other Activities those for non-ferrous metals.

10 DANIELI YEAR 2018 GROUP 11 Gra ci_FINANCE_2018

DanieliSales Revenue Group: 3,500 Danieli Year 2017/ 18 Danieli Group Sales Revenue 3,000

2,500

2,000

The average year-on-year growth of the global economy for 2018 of 3.9% is higher than 3.7% in 2017: however, 1,500 (thousands of euro) 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 growth is differentiated between emerging countries and developing economies, improving by 4.9%, and stable 1,000 and mature economies with an average growth rate that Order backlog 3,682,000 3,387,000 3,225,000 3,206,000 3,079,000 3,155,000 2,814,000 2,532,000 2,954,000 is lower but stable by 2.4%. The worldwide growth outlook for 2019 is stable, with 500 a projected GDP growth rate of 3.9% still driven by 150 2,508 1,000 1, 2,002 3,115 2,583 3,081 2,944 2,491 2,706 730 1,495 2,457 3,210 2,782 emerging and developing economies. 3,118 2,766 Sales revenue 2,583,317 3,118,485 3,081,108 2,782,294 2,944,102 2,765,940 2,508,352 2,490,912 2,705,600 0 USA is growing well with consumption supported by a

protected and financially strong domestic market, Japan 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 is stable, while India and China always maintain high Net Income Net income 201,040 192,461 174,578 163,165 153,577 161,738 87,999 50,540 58,400 growth at 7.3% and 6.6%, respectively, well supported by public investment programmes developed by their governments. Total net worth 1,028,314 1,185,896 1,292,113 1,427,266 1,548,396 1,713,744 1,777,158 1,817,828 1,853,000 China is gradually shifting its development model towards an economy more directed to internal services Danieli Group: 200 and consumption albeit production and infrastructure Net Income investments are still crucial to ensure sustained growth. Research 150,000 139,000 146,000 140,000 150,000 200,000 185,000 175,000 185,000 In 2018, Europe recorded a slight decrease compared and development to 2017, and with the prospect of a still declining but 150 resilient 2019, sustained by the low cost of money, a still Employees 8,663 9,392 10,037 10,944 11,424 10,954 9,419 8,959 9,358 low price of energy factors and the solidity of exports. The increase in the price of oil and main raw materials 100 relaunched the economies of the producer countries, while a coordinated monetary policy by the main central Consolidated net 2.60 2.50 2.51 2.20 2.06 2.17 1.19 0.68 0.78 income per share (euro) banks, together with the implementation of stimulus tax policies allowed the strengthening of growth in countries 50 with mature economies, improving the quality and ­­­­ No. of ordinary shares 40,879 40,879 40,879 40,879 40,879 40,879 40,879 40,879 40,879 competitiveness of internal production and reducing 146 201 192 153 47 88 10 12 35 73 135 192 162 162 51 58 Chinese exports made less competitive by the adopted 0 10 protectionist measures.

No. of non-convertible 40,425 40,425 40,425 40,425 40,425 40,425 40,425 40,425 40,425 The development of applied research and the 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 saving shares promotion of training implemented across the board by professionals remain the best possible tool (together with bureaucratic simplification and a stimulus financial Dividends distribution 26,202 26,193 25,002 23,075 23,075 8,195 8,195 8,195 8,195 policy) to promote the re-shoring of many industrial Net Worth activities migrated in past years to Low Cost countries Danieli Group: 2,000 and now available again in economically developed Net Worth Dividend per ordinary 0.33 0.33 0.33 0.30 0.30 0.10 0.10 0.10 0.10 countries competitively with innovative and quality share (euro) products. 1,750

1,500 Dividend 0.3507 0.3507 0.3507 0.3207 0.3207 0.1207 0.1207 0.1207 0.1207 per non-convertible saving share (euro)­­ 1,250

1,000 Thanks to prudent policies and the highly entrepreneurial spirit of our shareholders, 750 which have always allowed us to allocate a large part of our profits to research and 500 development, Danieli has been able to achieve positive results even in periods of economic downturn. 250 1,777 428 439 554 709 1,028 1,292 1,548 1,818 1,853 508 432 598 830 1,186 1,427 1,714 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

(millions of euro) (millions of euro)

12 DANIELI YEAR 2018 GROUP 13 The steel market The market for steel making plants Construction and sale of plants for the steel industry Danieli Kohler / USA, Italy Air Wiping Equipment for Zinc Coating Worldwide steel production reached nearly 881 The maintenance of a high level of steel production Twelve design centres: Danieli Fata Hunter / UK, USA, Germany, Italy million tonnes in the first half of 2018, up by 4.6% in the world and the interest in further consolidating Casting, rolling and painting plants for aluminium strip compared to the same period of 2017, which reached production in geographical areas still not well-served Danieli Centro Combustion SpA Italy Danieli Fata EPC / Italy, USA, India, People’s Republic approximately a total of 1,691 million tonnes over 12 by current producers, and in others where it may be Fata SpA Italy of China, UAE months. possible to produce more economically using the Danieli Germany GmbH Germany Construction of Turnkey Industrial Plants The forecasts for 2018 show an overall increase by energy factors present in a more innovative and efficient Danieli Fröhling / Germany nearly 4.0-4.5%, with Asia (driven by China and manner, maintain our customers' keen interest in Danieli Corus BV Netherlands Specialty Mills and Strip Finishing Lines India) up by 5.5% and advanced countries, together investing both in new plants, in addition to updating DWU Engineering Polska Zoo Poland with emerging ones, with a more limited increase of technologically and developing those already existing Danieli UK Holding Ltd United Kingdom Danieli Morgårdshammar / Italy, Sweden Long Product Rolling Mills approximately 2.0-2.5%. that allow flexible and quality production, using the Innoval Technology Ltd United Kingdom The plant utilisation average coefficient compared to available resources in a sustainable way. Danieli Centro Tube / Italy Danieli Engineering Rom Srl Romania the maximum theoretical level reached approximately Demand is maintaining appreciable growth in the BRIC Seamless Pipe Plants 78.5% at the end of June 2018, improving definitely and North African countries for integrated large plants Danieli Procome Iberica SA Spain Danieli W+K / Germany, Italy compared to 73% in June 2017. whereas in the USA and EU for mid-sized flexible plants Danieli Heavy Machinery Engineering LLC Ukraine Longitudinal and Spiral Welded Pipe Plants The steel market improved in 2018 with the expectation and modernisation of existing plants to enable higher Danieli Engineering Japan Ltd Japan Danieli Centro Maskin / Italy, Sweden of stabilising further in 2019. quality production used in mechanical engineering, car Industrielle Beteiligung Co Ltd Vietnam Conditioning, Drawing and Finishing Plants Producers confirmed increasingly their greater care making and infrastructure. Danieli Rotelec / France, Italy in operating plants worldwide in a sustainable way by Anti-dumping policies implemented by the main steel Seventeen production units and design centres: Electromagnetic Stirrers and Induction Heating Systems using the new technologies available (Green Steel) by producing countries stimulated demand for new plants, reducing both GHG emissions and energy consumption supported by strong and stable domestic demand that Danieli Breda / Italy Danieli & C SpA / Italy per ton and reducing waste to make production to the will lead to further plant investments during 2019. Extrusion and Forging Plants community and the environment more efficient and To maintain competitiveness in a “New Normal” market, Danieli Automation SpA / Italy Danieli Centro Combustion / Italy socially sustainable. Danieli invested in technologies that, while maintaining Danieli Centro Cranes SpA / Italy Reheating Systems In 2018, the demand for steel in China increased, customer focus, improve plant productivity and with Danieli Special Cranes Srl / Italy Danieli Olivotto Ferrè / Italy driven by domestic consumption, while exports it value added per capita also by developing the More SpA / Italy Heat Treatment Furnaces remained low both due to high level of prices (since DIGIMET project that makes operational the principles Danieli Engineering & Services GmbH / Austria Danieli Hydraulics / Italy, Thailand it was necessary to produce in an economically of revolution 4.0 in the steel industry to ensure total Industrial Hydraulic and Lubrication Equipment sustainable way) and to the duties imposed by control of the production variables both when devising Rotelec SA / France Danieli Centro Cranes / Italy importing countries to avoid anti-dumping practices, and commissioning the plants but also to speed up Danieli Germany GmbH / Germany Heavy-Duty Cranes whereas out of China, the application of mercantilist and production processes by reducing costs and optimising Danieli Henschel SAS / France, Russia protectionist policies supported the domestic market, production efficiency. Danieli Environment / Italy Danieli Czech Engineering AS / Czech Republic Ecological and Recovery Systems where the availability of scrap and its competitive cost The research and technological development Danieli Volga LLC / Russia made producers from electrical furnace competitive, carried out by Danieli over the last ten years have Danieli Construction / Italy, Thailand also favoured by their inherent flexibility in production. led to an expansion in the range of products offered Morgårdshammar AB / Sweden Turnkey Construction, Erection and Systems Customer service, high-quality finishing and production within the Metal sector (steel, aluminium and other Sund Birsta AB / Sweden, People’s Republic of China Engineering quality remain the most important factors to obtain metals), reducing significantly the cost required for Termo Makina San vT AS / Turkey Danieli Service / Italy, Austria, People’s Rep. of China, more remunerative prices from the market and greater the initial investment per individual project (CapEx) Danieli India Ltd / India India, Russia, USA, Brazil, Thailand continuity in the deliveries to serve customers who tend and even optimising operational expenditure (OpEx), Danieli Met. Equipment & Service (China) Co. Ltd. / Technical Service and Original Spare Parts to reduce minimum stock volumes and require more by integrating multiple stages of processing in the People’s Rep. of China Danieli Group: Danieli Group: and more “on time” deliveries. production process, widening the target audience of Order backlog Danieli Co Ltd / Thailand Order backlog A general improvement is expected in the second half of potential investors in the sector thanks to increased Production and sale of special steels at June 30, 2018, 2018 and in 2019, with private investments and public economic feasibility of investments, both in countries per product line. 2018 The product lines are as follows: infrastructure projects that will come into effect both in with mature economies and in those still at the These operations are carried out by the subsidiaries The order backlog per product line countries with emerging economies and in mature and development phase. Acciaierie Bertoli Safau S.p.A., ABS Sisak d.o.o. and amounts to Danieli Plant Engineering / Italy developed economies. Maintenance by the Group of a stable and substantial ESW Röhrenwerke GmbH, which are in a position of 2,954 M Euro. Turnkey Plants and Systems Engineering order book confirms the propensity of our customers leadership in Europe in the special structural steels to invest in new plants, thanks to the competitiveness Danieli Automation / Italy, USA sector, with production to order of high quality products and innovative solutions proposed by Danieli currently Process Control Systems for the most demanding applications in the form of qualified and well-referenced across the entire Danieli Centro Metallics / Italy ingots up to 160 tonnes, blooms, billets, forged and metalmaking industry. Ore Processing and Direct Reduction Plants rolled products with a high level of verticalisation, with Danieli Corus IJmuiden / The Netherlands diameters from 15 to 800 mm, to which the seamless Integrated Steelmaking Plants tubes for industrial use produced by ESW in Germany are added. 17% Long Products Danieli Linz / Austria Division Danieli Group operations Oxygen Converter Steelmaking Plants The structural steels family includes high carbon steels, case-hardened, hardened and tempered, and surface Danieli Centro Recycling / Italy, UK, France, Germany, The Danieli Group designs, builds and sells plants for hardened steels verticalised in many types of product, Other 36% USA the iron and steel industry, offering a complete range which have applications in all engineering components. Scrap Processing Plants of machines from primary process management to Their field of use is very extensive: motor vehicles and 16% Steel Meltshop the manufacture of finished goods (essentially from Danieli Centro Met / Italy, Austria engines in general, tractors and earthmoving machines, Division ore to finished product). It also produces and sells Electric Steelmaking Plants and Long Product Casters machine tools, the railway industry and the energy and special steels for the long products market through its Danieli Davy Distington / UK, Italy petrochemical industries. subsidiaries Acciaierie Bertoli Safau S.p.A., ABS Sisak Thick and Thin Slab Casters d.o.o and ESW GmbH that use secondary metallurgy Danieli Wean United / Italy, USA, Germany 13% 18% (electric arc furnaces) for the production of liquid steel. Flat Product Rolling Mills and Strip Processing Lines Steelmaking Flat Products Division Division

14 DANIELI YEAR 2018 GROUP 15 in millions of euro June 30, 2018 June 30, 2017 Change The Group order book is well-diversified by the rolling capacity of the plants and that will be Highlights of the geographical area and by product type and as at June implemented over the next two financial years consolidated income 30, 2018 amounted to approximately 2,954 million The level of revenues of the Group increased by 9% statement as at June Revenues 2,705.6 2,490.9 9% euro (of which 393 million euro in the special steel compared to the previous year with almost constant 30, 2018 making segment) up by 17% , compared to 2,532 turnover in plant segment (Plant Making) and an million euro as at June 30, 2017 (of which 375 million increase in turnover in the steel segment (Steel Normalised gross operating margin euro for special steels). Making), which also shows higher production volumes (Adjusted EBITDA) (*) 239.9 225.0 Some major contracts already signed with foreign compared to 2016/2017 thanks to the restart of ABS customers are not included in the order book: they will Sisak and despite the restructuring (now completed) % of revenues 8.9 9.0 be included only upon completion of loan procedures of the ESW pipe manufacturer, which will be able to still being finalised. operate more efficiently in the next financial year. Gross operating margin (EBITDA) (**) 228.5 202.5 13% The rationalisation process in the Plant Making sector Revenues for the Plant Making segment are consistent (*) The Normalised gross operating margin continued with particular attention to competitiveness with the forecasts at the beginning of the year and (Adjusted EBITDA) excludes “non- % revenues 8.5 8.1 in terms of innovation, technology, quality, efficiency derive from the compliance with the construction recurring” charges and costs of 11.1 million euro incurred in the financial year and customer service, with: programmes contractually agreed with the customers, ended June 30, 2018 (22.5 million euro in — development of innovation and production of noble with an EBITDA of 107.0 million euro, to be Depreciation, amortization and write-downs 2016/17), of which: products mainly in Europe, normalised to 113.3 million euro after being subjected — 6.3 million euro in the Plant Making segment (16.8 million euro in 2016/17) for of fixed assets (124.9) (132.2) — the design and production of plants with already to charges of approximately 6.3 million euro related restructuring and reorganisation in Fata consolidated technologies is carried out in the Asian to non-recurring and restructuring costs occurred in S.p.A., related to costs incurred in the Operating income 103.9 70.3 48% second half of 2017 on specific factories, at a lower cost but with the same European FATA for problematic projects and/or projects very late problematic projects and other projects % revenues 3.8 2.8 quality, covering both the Western steelmaking market in coming into force. with delayed start in markets not normalised and the Asian one, which to date accounts for more Revenues for the Steel Making segment are well above than half of global steel production. the budget at the beginning of the year and have a — 4.8 million euro in the St el Making Net financial income/(charges) (19.6) (6.6) segment (5.7 million euro in 2016/17), profitability of 121.8 million euro, to be normalised to related to the consolidation of the learning curve of production activities, incurred in Companies measured at equity 0.6 (0.7) The integration process with Fata S.p.A. was 126.6 million euro, taking into account non-repeatable the second half of 2017 at the newly completed during the year, still generating in the costs of approximately 4.8 million euro following the acquired steelworks ESW Röhrenwerke Profit before tax 84.9 63.0 35% GmbH in Germany. period some restructuring and reorganisation costs restart of the restructuring of the pipe manufacturer Income taxes (26.9) (12.9) quantifiable in approximately 6.3 million euro related ESW Röhrenwerkle GmbH acquired last year in (**) The Gross Operating Margin (EBITDA) Net profit for the period 58.0 50.1 16% to contingent situations that we consider to be non- Germany. represents the operating profit as in the consolidated income statement, before % revenues 2.1 2.0 recurring and not repeatable in the coming years. Therefore, the 2017/2018 financial year has an depreciation, amortisation and write-downs The budget of Fata S.p.A.: for 2018/2019, the improved operating profitability (EBIT) compared to of fixed asset and receivables. Profit (Loss) attributable The Gross Operating Margin (EBITDA) and company expects a return to profit thanks to the good the previous year, albeit affected in both operating the Adjusted one are measures used by the to non-controlling interests 0.4 0.4 level of orders acquired during the period and the segments: issuer to monitor and evaluate the measures taken to rationalise the structure and re- — in the Plant Making segment, for extraordinary performance of the Danieli Group, although Net profit attributable to the Group 58.4 50.5 16% not defined as an accounting measurement engineer the products sold. expenses of approximately 6.3 million euro related within IFRS. Consequently, the criteria for % revenues 2.2 2.0 In the Steel Making segment, investments downstream to non-recurring and restructuring costs occurred in determining these economic figures may not be consistent with the one used by of the production plants continued to be completed FATA for problematic projects and/or projects very late other entities, and therefore may not be in order to guarantee a high degree of finish in coming into force. altogether comparable. throughout the entire range of sizes offered, with the — in the Steel Making segment for approximately 9.3 Danieli Group structure collection is expected beyond 12 months. aim of delivering a more value-added product and million euro due to the effect of the restructuring in Order acquisition for the year is in line with the budget personalised service to our customers. ESW and some write-downs on goodwill made in the Danieli & C. Officine Meccaniche S.p.A and already assures good production planning for next The objective is to raise the technological period since the related economic requirements were (Parent Company) year, with operating income expected to improve also competitiveness of ABS by improving production no longer met. for the 2018/2019 financial year. quality and efficiency, reducing the cost of processing The production sold during the financial year by The company’s revenues amounted to 853.7 million and increasing quality and customer service, the Steel Making segment (ABS Group) reached euro (935.3 million euro in 2017) with EBITDA of 20.5 The Parent company Danieli & C. Officine Meccaniche rationalising and completing the product range to be approximately 1,280,000 tons (up by 15% compared million euro (37.1 million euro in 2017) and net profit S.p.A. directly owns the following companies: able to export directly 50-60% of production. to the volumes of the corresponding period of the prior of 206.4 million euro (13.6 million euro in 2017). Restructuring work continued during the period at year), with the aim of keeping this level of growth in During the year, the company received an intra-group — Industrielle Beteiligung SA, the holding company the German company ESW Röhrenwerke GmbH, volumes also in the next financial year bringing the dividend of 218 million euro, which enabled it to fully for the Group’s manufacturing firms; which operates in the seamless tube production company ABS Sisak in Croatia to full production. rebalance its indebtedness towards third parties and for industrial use. During the period, the company ABS S.p.A. provides high quality products and delivery other Group companies. — Danieli International SA, which invests liquidity completed a radical restructuring that brought about times in line with the best global producers, and In this period, the company maintained a sizeable in the international financial markets through the 4.8 million euro in non-recurring expenses and was its objective is to be the leading operator in Italy in volume of turnover in line with the previous year, while company Danieli Finance Solutions S.A. able to operate more efficiently from the first half of the special steel sector and among the top three in the operating income was still penalised by additional 2018 with a market for seamless tubes that was once Europe. start-up costs on some job orders ended during the again receptive thanks to the recovery of the energy The performances of both the Plant Making period. Analysis of/commentary on the economic and sector in general. For the 2018/2019 financial year, (engineering and plant construction) and Steel Making Research and development activities continued with financial position of the Danieli Group ESW may show positive operating margins, thanks segments (special Steel production) and keeping the the use of important corporate resources, above all to to the investments made to modernise the plants by order book at good levels mean positive results are expand and complete the range of products offered, As at June 30, 2018, the main economic and financial removing "bottlenecks" and improving the finishing of expected next year in line with the budget forecasts developing high-tech solutions and environmental data were as follows: the products. and without significant extraordinary charges. management and energy recovery systems to be used — revenues: 2,705.6 million euro up by 9% compared The ABS Sisak plant in Croatia was gradually restarted In particular, in the Steel Making segment, a good mainly in cutting-edge facilities. to 2,490.9 million euro as at June 30, 2017; from the end of 2017 with a growing margin after 2018/2019 is expected, without one-off negative The company continued to implement its investment — Group's net profit: 58.4 million euro, marking an two years of plant shutdown and, thanks to the new influences, with greater efficiency in production plan by increasing the productivity and efficiency of increase of 16% compared to 50.5 million euro as at investments underway, it will be able to reach a high (having completed the homologation of the products the Buttrio plants by replacing operating machinery June 30, 2017; utilisation coefficient already at the end of 2018, with a processed by the ROTOFORGIA plant) and with the older than 15 years. — consolidated shareholders' equity: 1,853.0 million return to profit. full operation of ABS Sisak and a production with The financial management of the period shows a result euro, up by 35.2 million euro compared to 1,817.8 In the Plant Making segment, investments will be profitable margins of the ESW pipe manufacturer in in line with forecasts as regards the management of million euro as at June 30, 2017; approximately 10/15 million euro per year, in addition Germany. exchange rates and cash-flow related to job orders in — positive net financial position: 836.7 million euro, to those for research and innovation, which are still The operating income of the Plant Making segment progress, while it was penalised in the financial year by down by 75.8 million euro compared to 912.5 million high, whereas important new investments are being is expected to grow in 2018/2019, equally distributed charges for discounting financial receivables for which euro as at June 30, 2017. studied in the Steel Making segment to increase throughout the main product lines (steelworks,

16 DANIELI YEAR 2018 GROUP 17 in millions of euro Year to Year to long products and flat products), with essentially accounted for 29.7% of steel making revenues and Revenues June 30, 2018 % June 30, 2017 % Change homogeneous profitability in all geographical areas 44.5% of the total. by geographical concerned, and a successful contribution to the Group area from the Parent company and from main operating The Net Invested Capital increased compared to Europe and Russia 1,411.3 52.2 1,107.4 44.5 27.4% affiliates. the previous financial year allowing to cover the Thanks to investments made in both operating investments completed in the financial year in both Middle East 481.8 17.8 572.3 23.0 -15.8% segments, the Danieli Group proposes to offer its operating segments with an increasing Working capital The Americas 277.6 10.3 275.2 11.0 0.9% customers an increasingly better service in terms of thanks to the payments of advances from customers Far East 534.9 19.8 536.0 21.5 -0.2% quality, price and delivery timeliness, operating with an on new orders acquired during the period. organisation that aims to optimise company processes This situation, with expectations of continuing positive in order to reduce waste, striving for maximum cash flows in the next few years, is expected to allow Total 2,705.6 100 2,490.9 100.0 8.6% customer satisfaction. the Group to repay its debt to banks, with a further reduction in gross financial indebtedness, already Liquidity management continued during the year in decreased during the period by 172.7 million euro. accordance with the usual low-risk and easy to realise investment principles, incurring no financial loss and The net financial position is still strong and was with a satisfactory return on investments in euro and calculated by including, within “bank debts and other those denominated in foreign currencies (essentially in financial liabilities", customer advance payments on USD), with a negative effect on the income statement job orders not yet in production, amounting to 52.4 Profitability ratios Description June 30, 2018 June 30, 2017 Key consolidated only related to the alignment of the exchange rates of million euro as at June 30, 2018 (196.3 million euro financial ratios ROE Group profit for the year 3.1% 2.8% the latter essentially to the exchange rates in force on as at June 30, 2017). These amounts are included Group shareholders’ equity June 30, 2018. in the consolidated balance sheet as payables for construction contracts and customer advance Group EBITDA as at June 30, 2018 was 228.8 payments, together with residual payables for the ROI Operating income 9.8% 7.4% million euro, an increase by approximately 13% on purchase of equity investments of approximately 20.2 Net capital employed the previous year, and margins were still substantial million euro (20.6 million euro as at June 30, 2017), enough compared to the turnover for the period, to included in other liabilities. GOM (EBITDA) 12.3% 11.1% cover the very high research and development costs Shareholders’ equity incurred in the period. The remaining customer advances, amounting to 650.8 million euro as at June 30, 2018 and 405.7 GOM (EBITDA) 12.19 15.97 The Normalised EBITDA as at June 30, 2018 of million euro as at June 30, 2017, are included in (*) net of interests on discounting Financial charges (*) 239.9 million euro increased by 7% compared to working capital as they are used to finance job orders operations. GOM (Adjusted EBITDA) GOM (Adjusted EBITDA) 8.9% 9.0% the previous financial year and reflects the margins in progress. The related amounts are still included Note that the figures used deriving from the development in 2017/2018 of the as payables for construction contracts and customer to calculate the performance Revenues order book present as at July 01, 2017 gross of the advance payments in the consolidated balance sheet. ratios shown above do not always GOM (EBITDA) GOM (EBITDA) 8.5% 8.1% extraordinary charges incurred in the financial year The net positive financial position as at June 30, constitute standard measurements and considered one-off and not repeatable. 2018 decreased by 75.8 million euro compared in the context of the Group’s Revenues accounting policies. Net financial income came to a negative 5.8 million to the previous year reaching the amount of 836.7 Gross financial indebtedness 2.18 2.60 euro, (after exchange rate alignment) affected million euro, and it is penalised by a debt of 20.0 GOM (EBITDA) by discounting charges calculated on financial million euro to be paid contractually for business receivables with deferred payment; the management combinations but only against the collection from third ROS Operating income 3.8% 2.8% of the par exchange rate was negative due to the parties of an at least equivalent positive flow, thus not Revenues strengthening of the euro against the US dollar, but resulting in a real negative effect on the group's cash. Financial charges Financial charges 0.70% 0.53% with a less significant change as at June 30, 2018 This amount is still important, stemming partly from compared to the end of the half-year as at December advances collected on current contracts and partly over revenues Revenues 31, 2017. Cash management was in any case handled from a careful financial management of production on prudently, maintaining a high solvency profile while job orders, and will enable the Group to finance the closing the year with a satisfactory net cash position. important investments in research and development in Capital ratios Description June 30, 2018 June 30, 2017 Total taxes for the period amounted to 26.9 million the Plant making segment as well as those required for Debt to equity ratio Gross financial indebtedness 29.7% 39.8% euro (12.9 million euro in the previous year), the new plants of the Steel making segment to diversify Consolidated shareholders’ equity essentially deriving from the application of ordinary and increase production and strengthen the efficiency taxation to the results of consolidated companies in operations. Financial Consolidated shareholders’ equity 39.5 37.8% without the significant impact of one-off items. By maintaining this level of cash, the Group can independence Total assets meet without financial stresses the new technological The net profit for the period came to 58.0 million euro, challenges of building plants with high innovative Primary structural margin Consolidated shareholders’ equity 167.1% 157.1% increasing by 16% compared with 50.1 million euro as content, by independently covering all extraordinary Non-current assets at June 30, 2017. expenses that may arise from technical difficulties Secondary Consolidated shareholders’ equity + during their start-up. structural margin non-current liabilities 204.9% 178.7% Consolidated revenues by geographical area Non-current assets Statement of changes in net financial position Current ratio Current assets 148.2% 133.2% In the Plant Making segment, the geographical Current liabilities distribution of revenues is based primarily on the The statement of changes in net financial position volume of shipments made, as well as progress confirms the Group’s ability to generate significant Quick ratio Current assets (- Inventories) 106.4 98.3% with equipment construction operations both at our positive cash flows from operations, which were Current liabilities factories and in terms of on-site installation and start- absorbed during the financial year to cover up throughout the world. disbursements on investments made, and with a decrease in working capital by 173.0 million euro Profit indicators June 30, 2018 June 30, 2017 As for Steel Making, 36.6% of revenues were (compared to 52.5 million euro in the previous year). Revenues per employee (thousands of euro) 289.1 278.0 concentrated in Europe and Russia as at June 30, The net cash flow from operations amounted to 10.1 2018 (compared to 52.2% of total revenues of million euro (87.2 million in the previous period) the area), while as at June 30, 2017, that region and allowed the financial coverage of net operating

18 DANIELI YEAR 2018 GROUP 19 investments, of 83.5 million euro (75.1 million euro reputation, the propensity to innovation and protection independent manner and across the board. as at June 30, 2017). Hence, a final cash absorption, Consolidated of the personnel by promoting professional growth The analysis with the results of the materiality and the after financing operating investments, of 73.4 million and safety in the workplace together with support to identification of the relevant issues was then submitted euro (whereas it was positive by 12.1 million euro as Non-Financial Statement local communities in Italy and abroad and attention to to the attention of the Executive Committee of the at June 30, 2017). The total positive change in the net culture and youth. company, which absorbed the main ones considering financial position, down by 75.8 million euro, in any Therefore, Danieli's values for future generations that the Board of Directors had previously absorbed as case includes the outlay for the payment of dividends represent an important legacy of skills, knowledge and its own the 17 material aspects defined as Sustainable in November 2017, amounting to 8.2 million euro. processes for the creation of value that form a heritage Development Goals (SDG) by the United Nations. to be preserved and further developed in a logic of The Group's approach to Corporate Social Responsibility long term and continuous improvement. Investments and research activities Governance And Compliance The Chairman of the Board of Directors of the Given the above, Danieli defined the relevant material The main investments in tangible and intangible fixed company and his Directors confirm the commitment of aspects to be reported in this Non-Financial Statement The Corporate Governance structure adopted by assets in the period, totalling 74.6 million euro, were the Group to increasingly carry out its role of Corporate taking into account the reference context, the specific Danieli is indicated in the 2017/2018 Report on as follows: Responsibility towards the global community not only nature of the operating sector and the indications Corporate Governance and Ownership Structure — 43.4 million euro for new finishing plants directly but also indirectly promoting the research received from stakeholders. (approved by the Board of Directors on September completed in ABS and used in the steel making and development of equipment and machines for The macro areas covered by this statement are: 25, 2018) and envisages a Board of Directors, an segment to provide greater flexibility and efficiency in producing steel with Green Steel and Sustainable Steel — Governance and Compliance. Executive Committee, in addition to the Board of steel production, by expanding the range of products solutions, improving efficiency, safety and reducing — Human capital. Statutory Auditors and the Supervisory Body. offered with improvements to their quality, together waste and the impact of GreenHouse Gas emissions — Research, development and product quality. The company adopts a corporate management model with a careful environmental management of all (GHG) to protect the environment. — Commitment to the Environment. based on a system of principles and rules of behaviour phases of production; — Supply chain. (collected in a Code of Ethics and in the protocols — 31.2 million euro for new machine tools installed Danieli has always considered as a priority the issue — Community commitment. developed pursuant to Italian Legislative Decree in production facilities abroad, with the objective of of protecting human health and the environment, 231/2001) and by Risk Management and Control tools improving efficiency and expand the market for sales accompanied by a commitment to research, for both financial and non-financial issues under the of our plants and in Italy to assure the replacement of innovation and social responsibility. Stakeholder Engagement and materiality analysis supervision of Internal Audit. operating machinery in use for more than fifteen years Today, it is necessary to operate in a complex global Danieli adopted and implemented a Code of Ethics in the Parent company’s factories. context, with the Group aimed at consolidating Danieli mapped the stakeholders present in the (adopted by all the Companies of the Group with its reputation by carrying out business activities geographical contexts in which it operates, by very small changes required by organisational During the period, the Group moved ahead with increasingly integrating industrial strategies with identifying the most important ones on the basis of characteristics of some subsidiaries) to identify and research programmes initiated in previous years, with sustainability issues. the interactions existing with the two main operating promote homogeneous behaviour standards for those a view to providing customers with new-technology The increasingly challenging objectives in the metal sectors of the Group. who work with and for Danieli and complying with the plants capable of superior quality output and lower industry to make conscious use of resources by The Group adopted flexible and diversified practices principles of legality and transparency. In this context, investment (CapEx) and production costs (OpEx). reducing emissions, noise and waste production of dialogue and involvement in order to share present special emphasis is placed on the rules aimed at This process involved expenditure of approximately required, and still require, a great commitment from and future development strategies and objectives with prohibiting acts of corruption, private or otherwise, and 35 million euro for direct and indirect research Danieli to develop new technological solutions that the main stakeholders. the provisions on the prevention of conflicts of interest. activities (almost entirely supported by the Plant guarantee our customers sustainable production No critical issues and/or significant aspects emerging Over the year, Danieli developed and applied its own Making segment for approximately 2% of the relevant and, at the same time, a competitive OPEX in plant from stakeholder engagement activities carried out by Organisation, Management and Control Model for the turnover),2018 with the management of a volume of management. Therefore, on the basis of what has Group companies are reported. prevention of offences pursuant to Italian legislative innovative projects of approximately 150 million euro been achieved so far and with a view to continuous decree no. 231 of 2001, hereinafter also referred to (approximatelyDanieli Group: 10% of the turnover of the Plant improvement, the path taken by the Group in the The Danieli Group operates in two substantially as "Model 231 adopted today by the Parent company, MakingInvestments segment). in R&D (lower columns) and costs incurred field of sustainability is based on a continuous different industrial sectors: Danieli Automation S.p.A., Fata S.p.A. and ABS, for new products development. implementation of the values and operating practices — Steel production with Acciaierie Bertoli Safau by progressively expanding it with new protocols to in implementation of the principles of the Code of S.p.A. (hereinafter also referred to as "ABS") and gradually cover all the sensitive operating areas of the 200 Ethics, which inspires the Group, and the main affiliates (Steel Making segment), by using secondary company and changing its contents in accordance 200 Research (lower compliance models (primarily the Organisational metallurgy (electric arc furnaces) for the production of with legislative innovations and organisational changes 185 185 columns) Model pursuant to Italian Legislative Decree 231/01), liquid steel. in time. Internal regulations aimed at preventing 175 175 and costs incurred as well as specific objectives that the Group sets itself — Production of machines to produce steel with environmental offences (where the Parent company, for new products for the short to medium term, including: Danieli & C. Officine Meccaniche S.p.A. and affiliates ABS, Danieli Met. Equipment & Service (China) Co. 150 development. 150 — Strengthening the Governance of Sustainability (Plant Making segment), by offering a complete range Ltd. and Danieli Co.Ltd, Danieli India Ltd. obtained within the Group; of machines from primary process management to the the ISO 14001 certification) and offences in the field 125 — The development and implementation of a specific manufacture of finished goods (essentially from ore to of safety at work (where the Parent company, ABS, reporting procedure of non-financial information, by finished product) Danieli Automation S.p.A., Danieli Met. Equipment 100 defining the methods, responsibilities and timing, and has always addressed in a more structured and & Service (China) Co. Ltd., Danieli Co.Ltd, Danieli as well as specific levels of control of data and careful way the management in the territory of issues India Ltd. and Danieli Corporation (USA) obtained 75 information; related to the steel sector in consideration of the the OHSAS ISO 18001 certification) are particularly — The identification and assessment of specific greater significance of the social and environmental important in this area. The Supervisory Body oversees 50 110 155 non-financial risks, related to the Group's main impacts related to this specific activity. the updating and verification of compliance of the 150 150 150 sustainability issues, and their integration into the above-mentioned Model. This body has autonomous 25 business risk management process. The assessment of the relevant issues and their powers and consists of internal and external personnel 40 45 35 25 35 materiality was carried out for the steel sector (Steel with impartiality and specific skills. Moreover, in the 0 13/14 14/15 15/16 16/17 17/18 Within this path of sustainability, the communication Making) in detail by involving the internal and external area of environmental issues, the company ABS is a of non-financial information thus represents a first stakeholders of the Group, whereas for the machinery member of the ETS system (Emission Trading System) step in the Group's commitment to work in line with sector (Plant Making) the involvement was directed for the calculation and certification of greenhouse gas the provisions of the Paris Climate Agreement and towards the internal stakeholders given the greater emissions. to achieve the 17 Sustainable Development Goals extent and variety of companies involved at world level Training programmes are planned and implemented defined by the United Nations with Agenda 2030 for despite having a production with low environmental on a regular basis aimed at disseminating a culture Sustainable Development, promoting all ESG issues impact as a whole. of corporate responsibility and business legality as as well. outlined in the internal regulations, first of all the Code The result of the company is not limited to The process followed by the company was based of Ethics. management profits but it should be understood on the preparation of questionnaires submitted to The company asked its employees to confirm that they considering also the capital strength, the international the main stakeholders to collect information in an have read the Code of Ethics, which was sent to all

20 DANIELI YEAR 2018 GROUP 21 collaborators who have committed these serious The main stakeholders recognised by the Danieli Group are: Human Resources contractual violations. Environment Trade associations Local authorities June 30, 2018 June 30, 2017 Moreover, Danieli adopted as its own the principles of Plantmaking Steelmaking Plantmaking Steelmaking transparency of the International's Business Principles Customers Collectivity and local communities Employees Danieli & C SpA in Italy 2,233 2,119 for Countering Bribery and also takes part in a Collective Suppliers and Business Partners Future generations Investors and financial analysts Action in the Metal Technologies segment under the Italian affiliates 889 1,199 861 1,180 coordination of the Basel Institute on Governance, Public bodies Media and press organizations Non-governmental organisations aimed at maintaining a "fair competition" among the Foreign offices and affiliates 4,679 358 4,559 240 Trade unions Universities and Research Centres key competitors operating in the segment (SMS Group, 7,801 1,557 7,539 1,420 Primetals and Tenova), through the adoption of similar internal rules for all participants, aimed at preventing corruption and other improper practices. Material aspects of the Danieli Group During the period, there were no violations of Figure by category Anti-Corruption Business ethics and integrity Governance and management facts and/or behaviour not in compliance with the of sustainability June 30, 2018 June 30, 2017 provisions of the Code of Ethics that required an in- depth intervention by the Internal Audit and/or the Relations with stakeholders Creation of economic value Presence on the market and Apprentices 134 108 Supervisory Board. indirect economic impacts Blue collars 3,035 2,865 Supplier social assessment Support to local communities Protec- Occupational health and safety White collars and Middle 5,971 5,757 Training and Development tion of human rights Diversity Human Capital managers Industrial relations Company welfare Innovation and R&D Managers 218 227 Human resources, prime origin and driving force Product quality and safety Environmental impact of products Management of energy Danieli Group: behind all innovation, are in Danieli the central consumption Total employees Dipendenti9,358 per area geografica 8,957 pivot of the organisation of the work that aims to 2018 ensure excellence and quality in customer service. Waste management and hazardous Greenhouse Gas Production Water resource Consistently with this concept, they are always the materials management and quality subject of constant attention: from enhancing the of wastewater discharges individual employees’ potential and aptitudes, to Biodiversity Conscious consumption of raw Environmental assessment promoting the professional development of teams and materials of suppliers individuals, with instruments and initiatives to improve and enrich managerial skills, technical and specialist competencies, ethics and dedication to perform. 16% With a structured simplification, the values with which Americas in order to inform them of the zero-tolerance position compliance with the set objectives; Danieli Group: it is desirable for the Danieli Team to identify itself were and the practices adopted by the company to prevent — ensuring support to the other Control Bodies and 1% Employees per geographical area. identified: corruption, export control and the security of financial with the players of the Internal Control and Risk Female count — customer-oriented approach transactions. Management System in order to ensure a sound, fordidascalia about 12%. con 12%— female passion Danieli established the Compliance Manager function, consistent and correct management of the company — team spirit who in the performance of his/her functions also with the set goals. South East 32% — respect for people planned a series of courses for senior employees on Preliminary due diligence procedures were Asia — consistency and reliability Anti Bribery practices to mitigate the risk of corruption implemented and are regularly applied to the main — excellence towards agents and suppliers. contractual partners of the company, which envisage — sustainability. In each company of the Group, a whistle-blowing the use of software systems that allow to carry out system is being implemented through dedicated analytical checks (as defined by the transparency These values are built every day with concrete actions channels and independent control authorities to report principles issued by the World Bank) in order to 1% 66% Europe and are transmitted by setting an example with violations of the Code of Ethics or Model 231. preventively monitor the presence of any risk areas. Middle East and Russia transparency and trust. The company set up an internal control and risk The applicable CONSOB regulations were adopted Personnel management is developed in accordance management system consisting of a set of rules, and, in particular, the CONSOB regulation on related- with the principles included in the Code of Ethics and procedures and organisational structures that allow party transactions is implemented, with the obligation in compliance with the laws and regulations applicable the identification, measurement and management of of reporting by senior management of each company in the countries in which the Danieli Group operates. the main business risks in order to protect the correct of the group any commercial/financial transaction with 2018 The approach of the company with regard to the management of the company's operating activities with: related parties of significant value. personnel aimed at: 1% — orderly management of powers and decision- Danieli is committed to complying with the anti- Training — attracting talented people through scouting making; corruption laws in force in all the countries in which activities and in particular graduates also with the — segmentation of activities separating operational it operates, adopting a "zero tolerance" approach to collaboration of the best educational institutions; and control activities; all forms of corruption and spreading a culture of Danieli Group: — enhancing individual skills through development — traceability of the choices and decisions taken; compliance to its personnel so as to always operate Training and training programmes by supporting an extensive the whole thing maintaining confidentiality and with honesty and integrity in line with the relevant and shared culture that also allows the consolidation compliance with the regulations for the protection of international best practices. 16% and transfer of skills between employees; privacy. In the field of competitive practices, as formalised — promoting a culture of safety at all levels of the in the Code of Ethics, the company is inclined to Safety 2017: 110,376organisation ore and always maintaining the highest trainingAmericas37% 1% The Company has an Internal Audit function in charge ensure maximum competitiveness on the market and, 2018: 122,300level of health and safety protection for workers by of verifying - on a continuous basis and in relation therefore, its commercial policy is developed in full Technical using appropriate measures for the protection and 42% +11% to specific requirements and in accordance with compliance with all applicable laws and regulations on training prevention of occupational risks; international professional standards - that the internal competition. South East 32% — motivating and retaining professional resources with control and risk management system is functioning The monitoring activity carried out by the Compliance Asia an incentive and fair remuneration system based on and adequate, taking into account the development Managers and the Internal Audit pursues the objective meritocracy following market best practice. of business operations and the context of reference as of preventing and minimising the risk of active and well as existing best practices for: passive corruption by carrying out a specific Risk Danieli operates on a Wordwide basis and the planning — carrying out interventions aimed at checking that Assessment process where necessary and providing of human resource requirements (according to a the rules and procedures of the control processes are for conservative penalties, termination of employment standardised process for defining organic plans) 1% 14% 7% 66% LanguageEurope observed and that all the subjects involved work in and actions for damages against employees and MiddleManagerial East trainingand Russia is carried out centrally in coordination with the training

22 DANIELI YEAR 2018 GROUP 23

1% 2018 Injury frequence indicator

production units, while selection, recruitment and Nations Guiding Principles on Business and Human 015 0 15 Danieli Group: The Parent company, ABS, Danieli Automation contracting are then managed independently by the Rights), fully in line with the Universal Declaration Injury frequency S.p.A., Danieli Met. Equipment & Service (China) Co. 5.5 indicator individual Group companies, also taking into account of Human Rights, with the commitment to require 2017 2018 Ltd., Danieli Co.Ltd, Danieli India Ltd. and Danieli the different national legislations applicable on site. the entire chain of subcontractors used to be treated 2.7 Corporation (USA) have an OHSAS 18001 certified The recruitment process also uses a computer tool equally in their structures. Injury severity indicator management system. In particular, the subsidiary that allows an initial evaluation of soft and hard skills. This continuous investment, together with the constant ABS received the certification in January 2013 and in 6.24 Danieli's remuneration policy follows: offer of career opportunities and prospects tied to 2018 November 2016, the inspection was carried out during — all practices and procedures necessary to comply merit, engenders a strong pride in belonging among 0.71 which non-compliance was not found. with the provisions on minimum wages, our personnel, stimulating all of them to do their part in — a careful management of remuneration in order maintaining their companies’ efficiency, effectiveness The company approach for the prevention of to obtain the loyalty of key figures, encouraging them and competitiveness. 0 0.5 1.0 1.5 accidents and injuries has achieved overall positive Male Female Danieli Group: to remain and stabilising collaboration in the medium Injury severity indicator results through the years; in particular, in the period to long term in the interests of the company and its 0.17 in question, there was a significant drop both in the 2017 Età anagra ca stakeholders. Welfare and health in the workplace 0.00 frequency and severity of injuries. The trend of the The Group uses a management application called severity index remained substantially in line with the MET YOU to assess performance, the progressive During the 2017/2018 tax year, the Italian companies 2018 previous year, while the frequency index increased development of skills and to have a complete view of fully implemented the provisions of the renewal of the 0.18 slightly in relation to the Steel Making activities 2018 the resources used by the Group ensuring transparency CCNL (National Collective Labour Agreement) signed Danieli Group: 0.00 following the start of production at ESW Röhrenwerke and traceability of what has been done. on 26/11/2016. Age of Employees - Percentage Distribution GmbH and ABS Sisak d.o.o., with operating practices The objective is to fill all company positions with The subject matter of the renewal was both the salary - that are not yet optimal and subject to a continuous qualified profiles so as to always guarantee the with the payment of the one-off bonus and the increases process of revision and improvement. Danieli Group: continuity of operations, always taking into account of the minimum amounts according to the pay-scale - Age of Employees The injury indexes are calculated in accordance the induction period necessary for the assimilation of and the forecast for supplementary health care. with the procedures established by UNI 7249: 2007 Male Female company policies and procedures and the need for Moreover, a project was implemented for flexible "Statistics on injuries at work", indicating the number training for specific technical alignment. benefits for all Italian employees working in Italy and of injuries that occurred per million hours worked. The Group points out that the workforce used in its abroad and other similar formulas for other employees factories and construction sites is highly specialised abroad where required by local regulations. The positive results, despite the slowdown in the last and that the risk of using child labour or the risk of The personnel are covered by an insurance period, were achieved also thanks to the pursuit of the forced labour is minimal. programme against accidents, travel and project entitled “Alcohol and the workplace”, directed For all employees, projects were started in the business reimbursement of medical expenses in case of at contrasting alcohol abuse in the company, which is and staff areas through the Hoshin method to disclose business trips to mitigate the risks of these events. S often a contributing cause in unacceptable accident and measure the application of Danieli's values with Moreover, the Metasalute Fund for health care and situations both from the viewpoint of the frequency of continuity. a general coverage programme against accidents of events, and of their severity. As explained in the Code of Ethics, Danieli also the working personnel operate whereas the Danieli 2018 confirms its commitment to respect human rights, Foundation also provides support to former employees During the 2017/2018 tax year, training activities on against discrimination in the workplace and child, in case of any situation of need. Danieli Group: safety were carried out totalling approximately 45,287 irregular or forced labour by promoting equal EducationalU Level - Percentage Distribution O hours involving approximately 9,049 persons. opportunities (in terms of gender, origin, religion, age, During the first months of the year, the activity related political orientation, sexual orientation, disability), Safety Male Female to the five-year compulsory retraining of the basic protection of diversity, freedom of association and the Danieli Group: training for all workers began. development of knowledge and professionalism of its Danieli defined a company management model Educational level own employees to better express their talents and the identifying the roles, operational responsibilities The personnel are covered by an insurance responsiveness to problem solving. and methods for carrying out the main production programme against injuries, travel and reimbursement Danieli protects the integrity of its personnel by processes, paying the utmost attention to the health of medical expenses in case of business trips to protecting workers from acts of physical, psychological and safety of workers. Età aziendale mitigate the risks of these events. or mobbing violence and by guaranteeing working In particular, specific guidelines and company Età aziendale If local needs require a special control unit, the conditions that respect the dignity of the person in procedures were prepared for each operating unit and company equips foreign sites with a Security structure compliance with the labour laws applicable in the the activities carried out by them in order to: 2018 with specialised personnel that: countries in which it operates and with national — identify and assess any possible exposure to the Età aziendale 2018 — develops an action plan to protect the job order, collective agreements where present. hazard; Danieli Group: — operates in line with local regulations and The company deals, where applicable, with — identify potentially exposed persons; Danieli Group:Seniority of Service - Percentage Distributionstandards, in order to guarantee the continuity of organisations representing workers with an attitude that — implement risk mitigation measures and control 2018 Seniority of Service - Percentage Distribution operations, the integrity of personnel and that of the is always open and constructive where required. their application; company assets used, operating in compliance with The working conditions, working hours and economic by training the personnel at the same time and raising the company's Code of Ethics. treatment of employment relationships are established their awareness through specific information and Danieli Group:D H S O 45 on the basis of the national rules envisaged with communication campaigns. Seniority of Service - Percentage Distribution Male Female 45 40 the aim of ensuring compliance with the applicable Employers and Safety Managers are responsible for Training legislation in each country ensuring full transparency the implementation of health prevention activities and 40 Danieli35 Group: 35 Seniority of Service of information on contractual terms and conditions of the implementation of safety in the workplace using 45 30 The “Danieli Academy” is the kingpin and the employment for candidates. specialist personnel who devote particular attention to organisational centre of the corporate training system 30 Danieli never received any reports from employees and, the training and education of personnel assigned to 40 25 and it pursues the dual objective of promoting and 25 during the year, no well-founded violations of working specific operational tasks. 35 20 improving the growth and development of human conditions were raised against the company, not even Risk Assessment Documents are prepared, and resources and of fostering and consolidating corporate 20 15 through national or foreign trade unions. coordination meetings are held between third-party 30 vision and values.

15 There are no significant risks in terms of personnel companies and site managers, verifying the health and 25 10 The “Danieli Academy” is a business school in the management and in relation to the protection of safety issues of external workers. 10 5 company to support both the process of change and diversity, duly referred to in the Company's Code of The health of workers is guaranteed in the workplace 20 the organisational development, as well as a place 5 Ethics and in the Report on Corporate Governance and also with the help of an internal Company Health 15 of learning where resources are enhanced through U O Ownership Structure regarding the composition of the Service present in all production units that carries professional consolidation and team work with the 10 board and the independent control bodies. out a health surveillance program with prevention U O support of Universities and of local High Schools. Danieli's position on human rights refers to the and control procedures, information campaigns and 5 Male Female The Group is also determined to create new Male Female principles promoted by the United Nations (United periodic inspections. development opportunities, with particular reference to U O

24 DANIELI YEAR 2018 GROUP 25 Male Female 2018 20182018Total turnover Total turnover technology and employment, and it actively cooperates The goal is to contribute to build a stable education Total turnoverDanieli Group. 0 510 15 20 Therefore, the Danieli quality system operates in with major Universities and Education Institutions, path of integration between university and companies, Rate of new employee compliance with the standards required by the sponsoring innovation projects and offering concrete aiming to stimulate and develop, in the young, the hires (%) certificationsentrate (%) ISO 9001:2105; ISO 3834-2:2005; 0 5120170 15 20 entrate (%) suggestions to promote youth employment. culture of knowledge, entrepreneurship, innovation, EN 1090-1:2009 + A1:2011, ensuring that the 0 510 15 20 The refresher and training courses for employees the satisfaction of achieving results and teamwork, products supplied are manufactured in accordance 2017 entrate (%) (1,304 courses equal to approximately 122,300 hours) keys to future innovative development. entrate (%) with the customer's expectations and in compliance represent a company investment and are of different 2017 2018 with contractual, safety, statutory or regulatory types with multiple goals: obligations. — sharing the basic technical and technological Company portal 2018 The standardised application of rules and processes knowledge that constitute the company’s value and across all Group units represents company know-how uniqueness today, and will increasing do so in the In addition to the company website, the Danieli 2018 available to all employees to identify Best Practices to future; Synapse company portal is also available for each Danieli Group. be followed in all Group factories, always guaranteeing 0 510 15 20 — development of specific technical – specialist employee, allowing immediate interaction with the Rate of employee the same level of quality and safety. knowledge and skills, including managerial ones, both company, guaranteeing up-to-date information on terminations (%) uscite (%) 0 510 15 20 general and running across the entire organisation, topics of specific interest, as well as services and 2017 The production of machinery for the metal industry and tied to a specific role/function; assistance on safety and governance in the broadest 0 510 15 20 uscite (%) and the production of steel both require compliance — consolidation of language skills; sense. 2017 with regulations, laws and requirements issued by — training workers on rules of behaviour and company Each employee can customise the service that is uscite (%) national and international directives whose observance procedures related to safety. continuously updated and guaranteed even on 2017 2018 is required and regulated by the production smartphones. specifications envisaged by the company and by ABS 2018 that envisage the use of technical personnel trained Collaboration with institutions for school and university 2018 and aware of the limits envisaged and imposed by education IT security applicable standards and regulations. Male Female The Parent company constantly collaborates with A special attention was paid to the company for Male Female Finally, the company's quality system envisages High Schools, ITS and Italian and foreign Universities, business protection concerning Cyber Risks operating verification plans and controls to ensure compliance organising and managing each year approximately on several fronts: Male Female — and completing with the implementation of with the followed production standards. 110 work-related learning projects and 40 curricular — dedicated personnel training on a worldwide basis; Male Female prototypes and/or industrial equipment in the internships with related thesis. — cognitive analysis of system, network and user laboratory or at our customers where to carry out tests behaviour to reduce the time required for accident of production and performance. Commitment to the Environment Moreover, the company actively takes part in the study interception; Research results in the form of ideas, concepts, programmes of High Schools, ITS and Universities as — BIA revision (Business/IT alignment), gap technological approaches and operational capabilities For Danieli, environmental protection is not only a follows: identification and application of corrections to represent an important intangible asset to ensure priority for the Group in relation to the production 1. frontal lessons; machines and software; Danieli's technological leadership in the market. activities directly carried out in both the Steel Making 2. organising guided tours in the company; — evising and publishing safety policies; The protection of intellectual property plays a and Plant Making sectors, but also an opportunity for 3. taking part in vocational meetings aimed at student — accident management standardisation. strategic role for the company that every year invests the latter to be promoted to customers to enable them work placement; countless resources to develop new products and to comply with applicable legal requirements, and a 4. taking part in career days. All the above-mentioned activities are covered new technologies to be applied in industrial solutions conscious use of resources as part of a continuous by a dedicated budget, and the high standard of offered to customers. improvement process in line with best practices. The company is a founding member of the Fondazione our systems (as Danieli is a world leader in the ITS Malignani of Udine and sponsors each year the development of Hi-Tech technologies) avoided today The maintenance of know-how and existing patents The Group's environmental protection approach is Mechatronic Course that has 2 classes totalling 50 any opening of our network thanks to existing firewalls. requires a constant updating activity that is also aimed primarily at ensuring compliance with the legal students. carried out with dedicated projects and with the requirements applicable to its own production activities Each year, approximately 100 newly-qualified students involvement of the main local universities. by identifying, monitoring and mitigating all related and new graduates are hired by Danieli & C. Officine Research, Development And Product Quality environmental aspects: Meccaniche S.p.A. with a professionalising training The total annual expenditure of about 150 million — using appropriate safety procedures and efficient contract. Danieli concentrates its research and development euro includes both prototype and direct research and technical prevention systems; activities exclusively in the technological areas falling related expenditure for innovative projects without — developing new technologies (also with Hoshin This initiative focuses on young people to stimulate within the Group's operating sector (metal production margins and the first industrial applications that projects) that allow a rational use of natural resources them in a training course that essentially gives them and production of machinery for the metal working require a strong commitment for the company in start- (raw materials, energy, water and waste management); four perspective elements of development, which are industry), starting with the development of the primary ups and performance tests. — achieving an increasingly effective mitigation of of crucial importance today: process and ending with the finished product (in pollution, GHG emissions, waste, noise and any 1. a highly specialised career, within a multinational practice, from ore to finished product). In Italy, there is a Research Centre with about 150 inconvenience to the local communities concerned; context; In summary, the following process areas are covered: employees with a new structure inaugurated in 2017 — by raising personnel awareness through specific 2. guarantee of recruitment at the end of the training reduction of iron ore / melting / casting / rolling / to serve the machinery and plant sector and in France training and education. and work placement course; finishing / management of non-ferrous metals. there is a Research Centre with about 25 employees to 3. a remuneration aligned with that of the personnel serve the steel sector to offer our customers new alloys The Danieli Group defined reference targets in order to of the same level from the beginning of the training The ability to develop new technologies and for industrial applications. maintain high environmental protection standards: course; technological packages in the sectors indicated — promoting a culture of health and environmental 4. the possibility of taking a highly specialising training above is for the Danieli Group a fundamental ability to protection in all workers and their families; course thanks to the support of expert business tutors maintain competitiveness in the steel and aluminium Product quality — designing plants with ever better performance from (training on the job) and to the participation in training market. the viewpoint of the environment and workers’ health courses (Danieli Academy). Meeting deadlines and quality of the products supplied and safety; The research process usually develops in an orderly in line with the obligations contracted towards the — constantly informing and training workers on The focus on young talents is also emphasised by the manner: customer is the main objective of the company and of general and specific risks, on rules of behaviour and annual sponsoring of scholarships and graduation — starting from the collection and analysis of data its employees to obtain customer satisfaction. company procedures; awards for worthy newly-qualified students and new from existing plants; To achieve these results, the Group adopted a — investments of economic, technical and human graduates in technical and scientific branches. — then developing studies on the physics, chemistry Corporate Quality Policy based on company values resources to achieve environmental protection goals The “Ideathon ABS” contest allowed university and mechanics of products validating the conclusions and culture that defines construction methods, quality for Danieli and for our customers; students and young graduates to contribute with an with mathematical models and laboratory tests; standards and performance indicators to be followed — promoting knowledge of environmental regulations innovative idea to be applied in ABS to make the — continuing with the 3D engineering of the plants to prevent product non-conformities and provide and generating widespread awareness of their business activity “smarter” and more profitable. (operating them also in a virtual manner); quality goods and services contractually required. importance, by example and through systematic

26 DANIELI YEAR 2018 GROUP 27 Energy - GRI 302-1 June 30, 2018 June 30, 2017 oversight of their compliance also along the supply Making sector uses a series of procedures to identify Survey resulting in 2017 among the most deserving Energetici consumption by type of fuel and process chain used by the group; all the environmental aspects that may suffer a subjects within the Italian and European companies — improving waste management by providing beneficial or negative impact as a result of interaction with a stable position in the ranking thanks to the LPG by production process (GJ) 9.820 6.751 specific labelled containers and dedicated areas with the production activities of the plants: commitment carried out in developing SustSeel Methane gas by production process (GJ) 3.107.090 3.142.149 bearing appropriate signs, and through more accurate — under normal operating conditions (increasing efficiency in steel production) and Green separation of waste; — in abnormal or extraordinary operating conditions Steel (minimising environmental impacts in steel Diesel by production process (GJ) 33.763 40.510 — improving hazardous materials management by — in case of emergency production) solutions for the Group and for our Petrol and other fuels (GJ) identifying and labelling all containers, providing customers. containment basins and suitable absorbing materials and manage any substantial changes to the internal For company cars (owned and rented) (GJ) 2.104 470 in case of spills, conducting practical emergency and external context of the factories, in particular with On June 5, 2017, Danieli undertook with SBTI Electricity consumed (GJ) of which 3.816.477 3.560.721 simulation exercises. regard to the quality of environmental components and (Science Based Targets Initiative) to define, within the Electricity purchased (GJ) of which 3.808.754 3.560.721 compliance requirements. next 24 months and on the basis of the Science Basis During the launch of new projects (especially in the Criteria, the targets for reducing emissions by pointing Electricity from renewable sources (GJ) 1.712.094 1.683.364 Plant Making segment), the company always carries The identification of environmental aspects and out the commitment to achieve an improvement in Electricity from non-renewable sources (GJ) 2.096.660 1.877.357 out a risk assessment, which also identifies significant the assessment of their significance is carried out the results both in Scope 1 but also in Scope 2 and Internally produced and self-consumed environmental issues related to the development of by following a matrix assessment methodological Scope 3 as defined by the Green House Gas Protocol electricity (GJ), of which 7.722 0 the job order at its customers' production sites, and approach, identifying both direct (compliance with updated in June 2017 in collaboration with World identifies the measures needed to mitigate the impact laws/regulations and impacts on all parties involved) Resources Institute. produced by photovoltaic plant (GJ) 2.502 0 on local communities, which in most projects are and indirect (regulatory, economic aspects based To mitigate the environmental impact of the steel produced by an ORC (Organic Rankine Cycle) plant (GJ) 5.220 0 manageable and extremely limited. on the influence related to Danieli's activities) industry, ABS has also created in Pozzuolo del Friuli environmental aspects. a "forest", i.e. a natural park on a 26 hectare site and Total energy consumption (GJ) 6.969.253 6.750.601 The Parent company, ABS, Danieli Met. Equipment with more than 10,000 tall trees, which is the largest Note: The conversion factors used are taken from the Department for Environmental, Food & Rural Affairs (DEFRA), & Service (China) Co. Ltd., Danieli Co. Ltd, and Danieli Procedures and assessments are periodically updated ever created in Europe. Greenhouse gas reporting conversion factors 2017. India Ltd. have an ISO 14001 certified management and every time interventions are made on the plants Waste management is carried out in compliance system. The subsidiary ABS, whose business activities that modify their characteristics and performance. with the regulations in force, following their methods are highly energy-intensive, implemented also an ISO of disposal and destination envisaged by the law 50001 certified energy management system in which classification for each specific category of waste. an energy audit is carried out every 4 years. Environmental sustainability Disposal activities are carried out by certified external Total volume of water withdrawn with a breakdown by source companies where permitted by the relevant regulations GRI 303-1 June 30, 2018 June 30, 2017 Energy consumption and water withdrawals are the The steel industry accompanies the economic growth and with the use of the most up-to-date and efficient Surface water utilisation (m3) 252,392 54,734 main indicators of the environmental impact of the of the world community contributing to social welfare technological solutions on the market. Group's production processes, since there are no with an increasing respect for the environment 3 Groundwater utilisation (m ) 1,519,684 1,398,939 significant impacts in terms of direct emissions but following the guidelines defined by the United Over the years, the Danieli Group implemented a Municipal water utilization (m3) 281,702 276,230 only indirect ones. In particular, as part of energy Nations (UN-SDGs) and in line with the commitments policy of reducing the consumption of raw materials 3 efficiency initiatives, the Parent company installed two undertaken with the COP21 Paris Treaty. that enabled it to optimise them. In particular, last Total water utilisation (m ) 2,053,778 1,729,903 photovoltaic systems covering the roofs of industrial The World Steel Association identified eight main year, heat treatment activities increased to improve buildings and the company ABS installed an ORC parameters to measure the sustainable performance of product quality by using the plants efficiently with Greenhouse gas emissions into the atmosphere (t) June 30, 2018 June 30, 2017 (Organic Rankine Cycle) system to produce energy steel production divided into three families: integrated and waste-free production cycles. using the heat from the fumes of electric furnaces In particular, the ABS company and the entire GRI 305-1 used in the production of steel A) environmental sustainability Steel-making sector are the Group's most impactful Scope 1 CO2 direct emissions 277,367 307,425 — reduction of Greenhouse Gas Emissions (GHG); companies in terms of raw material consumption. Environmental data refers to the Danieli Group. As — reduction of energy consumption; Therefore, the following table shows the materials used GRI 305-2 regards the Parent company, in addition to its head — efficiency in production; during the year by ABS only, in which non-recyclable

Location-based Scope 2 CO2 indirect emissions 435,366 408,524 office, the main Italian local units are also included. — environmental protection; materials include gases and refractory materials, The portion of electricity purchased from renewable B) social sustainability whereas recyclable materials include scrap and Market-based Scope 2 CO indirect emissions 512,524 481,438 2 sources does not have Certificates of Guarantee of — safety in production; packaging Origin. Therefore, the calculation of indirect CO2 — development and training of human capital; emissions according to the Scope 2 Market-based C) economic sustainability Other pollutant emissions into the atmosphere logic also takes this portion into account — innovation in new technologies; Supply Chain GRI 305-7 June 30, 2018 June 30, 2017 — equitable distribution of value added. For ABS, which operates in the Steel Making segment, The quality of the supply is a key element for NOx Nitrogen oxide (t) 701 639 greenhouse gas emissions are certified on the basis The development of these indicators in the past 3 Danieli and the supplier is an important asset with SOx Sulphur oxide (t) 18 11 of the Emission Trading System (ETS). Therefore, years shows a constant commitment in the protection which to build relationships based on principles of Dust (t) 79 23 the emission factors used for ABS are those required of the environment and in social responsibility and transparency, integrity and trust that can last in the by the EU ETS regulations. For the other Group an improvement in economic sustainability related to long term. CO (t) 1,595 281 companies, the emission factors used are those DaNews: the quarterly increased investments in new technologies with an Dioxins and furans (PCDD/F) (g) 1 1 proposed by Terna for Location-based Scope 2 indirect magazine of Danieli Group increased value added distributed to the community. In the machinery and steel sectors, the Danieli Group emissions (Terna, International Comparisons 2015), provides readers with uses a total of around 5,000 suppliers to service its and the residual mixes for Market-based Scope 2 thorough information about Danieli became an integral part of these results activities and factories in the West and the East: indirect emissions (Association of Issuing Bodies, the activities and the by accompanying (with the equipment supplied) — in the steel sector, there are about 500 suppliers for technology developments European Residual Mixes 2016, 2016). our customers in the process of technological about 2,000 customers; Note: The data for other pollutant emissions into the atmosphere have been estimated on the basis of the measure- carried out by Danieli ments and analyses carried out at the emission points. Product Lines. and productive improvement with innovative and — in the machinery sector, there are about 4,500 Reading the data, it can be seen that 95% of energy sustainable solutions. suppliers for about 500 customers. consumption, 87% of water utilisation and 97% In the construction of plants, Danieli guarantees the of direct CO2 - Scope 1 emissions are related to principles described above also to our customers The main suppliers are subject to technical and ethical the Danieli Group's Steel Making segment, while by implementing technical solutions in line with the prequalification according to the Code of Ethics, the residual portion is related to the Plant Making contractual obligations undertaken and with those company anti-corruption directives and relations segment, which has a much lower environmental envisaged by the various regulations in force, both in between individuals and the management of privacy. impact than the steel making segment, which terms of energy performance and in terms of reduction Danieli is investing in the supply chain to prevent requires careful and continuous assessment of all the in emissions, in order to minimise their environmental procurement risks and to ensure their compliance with environmental parameters associated with production. impact. existing environmental and social issues.

Due to the specific nature of its activities, the Steel Danieli also took part in the Carbon Disclosure The choice and management of suppliers follows a

28 DANIELI YEAR 2018 GROUP 29 guideline that envisages: macro areas of intervention: Score summary statement. Score Levels Sector benchmark — segregation of duties; — social and charitable Companies at Management level are — the use of a Vendor list managed by a computer — culture, art and education taking further steps to effectively system; — sports and entertainment reduce emissions, indicating more 200 200 advanced environmental stewardship. A A — acceptance of general conditions of supply This good result signals that Danieli including security, environment and human rights Danieli takes an active part in the development of & C Officine Meccaniche SpA is LeadershipLeadership A- A- 150 150 issues; positive relations with local communities, defining and measuring and managing its impact. B B — acceptance of the provisions of the Danieli Code of managing initiatives in their favour (e.g., the initiatives Danieli & C Officine Meccaniche SpA Ethics; to restore the historical and architectural heritage on has developed a policy and strrategic ManagementManagement B- B- — getting through a Supplier Quality Development buildings of public interest in the city of Udine, the framework within which to take action 100 100 and reduce negative climate change C C (SQD). Telethon marathon in Udine, work in support of local impacts. communities and medical research, contributions AwarenessAwareness C- C- 50 50 The Group manages its activities with suppliers to local musical events, support to schools through D D with relations based on transparency, selecting contributions to expand classrooms/improve learning Sector benchmark. them correctly and impartially based on quality/ instruments, etc.). The bar chart above shows the count DisclosureDisclosure D- D- 0 0 competitiveness checking of the offers and without During the period, Danieli continued its work to of scores achieved by sector peers in A AA- A-B BB- B-CC C- C- D DD- D- the industrial sector. taking advantage of any situations of weakness or promote architectural restoration in the main sites F: FailureF: Failure to provide to provide sufficient sufficient information information to CDP to to CDP be evaluatedto be evaluated for this for purpose this purpose dependence. of cultural and historical interest of Udine and took The band of Danieli & C Officine Meccaniche SpA is coloured red. also part in tangible support actions in favour of the Danieli is increasingly using only qualified and people damaged in summer 2016 by the earthquake certified suppliers to limit the occurrence of technical, in Central Italy. qualitative, environmental and safety problems in its The Danieli Foundation assures health care for former WasteScoreScore summary summary statement. statement. children,Sector anSector annual benchmark. coursebenchmark. that provides a day every supplies, reducing commercial and reputational risks employees and their families. GRICompanies 306-2Companies at Management at Management level level are aretaking takingJune 30, 2018 June 30, 2017 other TheweekThe tobar spend barchart at chart a teachingabove above farmshows showsin the the area. the for the company. The Turismo 85 S.r.l. travel agency, company The qualification process is managed by the Parent belonging to the Group, offers attractive prices to Tfurtherotal hazardousfurther steps wastesteps to (t), effectively to of whicheffectively reduce reduce emissions, emissions,37,127 34,612 Moreover,count thecount officiallyof scores of scoresrecognised achieved achieved primary by school by company's Procurement Department and envisages: employees, proposing monthly tourist destinations at disposedindicatingindicating of more more advanced advanced environmental environmental steward-13,118 steward- 12,086 “Ceciliasector Danieli”sector peers (now peers with in athe innew theindustrial accommodation industrial — the completion of questionnaires to identify their discounted prices and day trips, promoting co-worker ship.ship. This This good good result result signals signals that that Danieli Danieli & C & C facility),sector. bothsector. for the families of the employees and for company structure, governance and financial data, socialisation outside working hours. recovered 24,009 22,526 the families of the local community, where the Italian certifications, environment and safety and human TotalOfficine non-hazardousOfficine Meccaniche Meccaniche waste (t), ofSpA which SpA is measuring is measuring and156,501 and 123,562 traditionThe blendsThe band withband of an Danieli innovativeof Danieli &approach C & C to the rights; In addition to direct sponsorship of Group companies English language and to new technologies was opened non-hazardousmanagingmanaging wasteits impact. itsdisposed impact. of Danieli Danieli & C &Officine C Officine 110,960Mecca- Mecca- 87,113 OfficineOfficine Meccaniche Meccaniche SpA SpA is is — specific in-depth sessions with visits to the with a number of local sports teams, the Danieli in September 2016. An innovative teaching path production units to assess the technical and Sports Group was also set up in Italy. It operates non-hazardousnicheniche SpA wasteSpA has recovered hasdeveloped developed a policy a policy and and strrategic 45,541strrategic 36,449 basedcoloured on lecturescoloured withred. mother-tonguered. teachers and on operational capacities and quality procedures followed as an association open to the community (with Tframeworkons offramework waste (t) within within which which to take to take action action and 193,628and reduce reduce 158,174 the laboratory approach to science and new computer in general and specifically for the types of products more than 2,000 members) founded to promote negativenegative climate climate change change impacts. impacts. technologies. and services of interest to the Danieli Group; aggregation, physical fitness and Group spirit, while The English Plus course envisages 5 hours of weekly — scheduled Quality Audit and Verification Sessions at maintaining a healthy sense of sporting competition. English Language from the first class and modules of suppliers even without prior notice to the latter. The latter has also promoted a series of agreements Materials purchased by weight (MT) Science, Geography, Art and Computing (3 to 5 hours with various commercial and service operators in the GRI 301-1 June 30, 2018 June 30, 2017 a week) with mother-tongue teachers (CLIL - Content Specific contractual clauses are included in contracts area to ensure favourable conditions for its members and Language Integrated Learning method). It 3 with suppliers who undertake to comply with our Code (employees and non-employees). Non-recyclable gases (m ) 61,907,613 58,556,634 ensures a certification of skills released by Cambridge of Ethics, in addition to the requirements of Model 231 Many initiatives have been developed by Danieli for its Purchased non-recyclable materials (t) 159,241 143,762 Esol. and the requirements of quality, health and safety. employees: Purchased recyclable materials (t) 1,233,479 1,162,269 — Concerts organised for employees and family The Tech Plus course consists of specific Supplier performance and compliance monitoring members Raw material consumption figures refer only to the company ABS. programming and educational robotics (Scratch and activities are carried out by Danieli personnel during — MetYou project for the management of Soft and Lego Wedo) enabling the approach of the child to the order Expediting sessions. Hard Skills of personnel “coding” and to technology through the construction — "Pink" (gender) parking (at the Parent company of animated objects. It ensures a certification of skills Directly generated and distributed economic value In the Plant Making segment, there is a high presence and in ABS) released by Eipass Junior (European Informatics of high-tech knowledge-intensive suppliers that are — Family party and open factory in ABS in millions of euro June 30, 2018 June 30, 2017 Pass). part of a “make of buy” strategy with an impact on — Parent company Christmas party and lottery A. Directly generated economic value 2,718.8 2,504.8 noble components and on solutions offered to our — Blood donation with mobile blood bank customers. — Support activities for personnel employed in B. Distributed economic value 2,547.3 2,334.4 Participation in trade associations operating units in Thailand, China and India. (A - B) Economic value retained 171.5 170.4 In the Steel Making sector, suppliers are engaged in The Italian companies of the Group are registered with continuous deliveries and large handling volumes The last investment made by the Danieli Group is in Confindustria in their own local areas whereas Danieli where the quality and punctuality of the service are the company Telefriuli S.p.A., working in the region is also registered with the World Steel Association crucial to ensure a rational and efficient production for more than 20 years, with the intent to support the Analysis of the distributed economic value with headquarters in Brussels, Belgium and with process. issuer in proposing to the community a local television the European Engineering Industries Association and news report highly dedicated and rooted to the in millions of euro June 30, 2018 % June 30, 2017 % with headquarters in Brussels, Belgium, while the territory. A. Operating costs 2,027.6 79.6 1,856.0 79.5 subsidiary ABS is registered with the Italian association Community Commitment Danieli provides the children of its employees and METALFER. non-employees with the support of the company B. Personnel remuneration 442.0 17.4 425.1 18.2 The Danieli Group believes in its social role within nursery school, accommodating family needs through C. Public administration remuneration 35.1 1.4 20.9 0.9 the complex systems in which it operates at a global work schedule flexibility and opening days, and Directly generated and distributed economic value D. Venture capital remuneration 8.3 0.3 8.2 0.4 level and contributes to the development of the areas kindergartens, providing the possibility of caring in which it operates with projects in favour of the for children from 3 to 6 years of age with the same E. Third party remuneration (0.4) 0.0 (0.4) 0.0 The following tables show the distribution of economic social communities present there (social initiatives, flexibility of working hours and hospitality. The F. Non recurring ancillary components 27.6 1.1 15.7 0.7 value among stakeholders through the reclassification sponsorships and philanthropic donations) by following traditional training offer is supplemented by permanent of the figures of the consolidated income statement. the guidelines and counterparty checks envisaged by English language labs, outdoor activities of contact G. Lender remuneration 6.1 0.2 7.7 0.3 In particular, the determination of the generated value the ISO 37001 standard and with budgets approved with nature, the weekly proposal of psychomotor H. Donations and sponsorships 1.1 0.0 1.2 0.1 added shows the wealth created by the Group and its by company management. practice sessions according to the Aucouturier method for distributing it to the identified stakeholders. Total distributed economic value 2,457.3 100.0% 2,334.4 100.0% Most of the actions carried out can be classified into 3 method, music sessions and only for kindergarten Non recurring ancillary components derive from

30 DANIELI YEAR 2018 GROUP 31 net financial income and expenses (excluding the result of a more careful management of operating The officially recognised “Cecilia expenses relating to payables to banks), gains and costs and a precise planning of plant start-ups. Danieli” primary school, for all losses from foreign currency transactions and income The general improvement of the geopolitical climate, employee and local families. and expenses on equity investments. which in part limited trade in some areas of the world, The school curriculum enriches the traditional education with Net global value added is divided among the following could allow an acceleration in the process of economic courses dedicated to the English beneficiaries: personnel (direct remuneration growth, especially for the manufacturing and steel language, linked to a workshop consisting of wages, salaries, employee severance sectors, which remain the basis for the development of approach to new information indemnity and indirect remuneration consisting of infrastructures and the metalworking industry. technologies. social security contributions); Public Administration The Group continues to pursue its efficiency (income taxes and other taxes and duties); venture objectives such as increased productivity, reduction Moreover, the Danieli company nursery school accommodates capital (dividend distribution); third parties (non- in structural costs and innovation with the goal of employee and non-employee controlling interests); company remuneration improving competitiveness in the global market and families’ needs through work- (reinvested earnings); remuneration to lenders ensuring an improved service especially to Southeast schedule flexibility and opening (interest on loans) and donations and sponsorships Asian customers where steel production is mostly days, and kindergartens, caring (sponsorships, donations and other forms of concentrated. for children from 3 to 6 years of contribution). There are no other significant unknown factors for the age with the same flexibility of year ahead, barring unforeseeable events beyond our working hours and hospitality. control. Treasury shares

As of June 30, 2016 the company held 2,961,213 Proposals by the Board of Directors ordinary shares and 3,945,363 savings shares with to the annual general meeting a par value of 1 euro each, for a total par value of 6,907 thousand euro (8.49% of the share capital). We express our appreciation and thanks to all those No ordinary or savings shares were purchased or sold whose perseverance and professionalism contribute during the year. to maintaining our strong competitive position and high technological status in world markets. We rely on their enthusiasm, as well as on our own, as we seek Events occurring after the end to progress with the serenity, confidence and strength Left: The "Fathers and Sons" necessary to meet future challenges. exhibition in Illegio (Udine): of the reporting period The financial statements of Danieli & C. Officine a journey through 60 paintings and sculptures from the 4th Century BC Meccaniche S.p.A. for the financial year ended June to the 20th Century, to rediscover In a world steel market which is still strong and 30, 2018, which we submit for your approval, show increasing, company operations continued with no successful, imperfect or absent, a profit of 206,367,347 euro that we propose be human and divine paternity. significant events occurring since June 30, 2018. allocated as follows: Right: The Castle of Udine (Leo Alignment of currency items to the exchange rate von Klenze, 1850; Monaco, Galerie prevailing on September 25, 2018 would not result in Meier). Danieli's contribution will significant changes in unrealised exchange differences consist of improvements to the during the period compared to the figure recorded as external structure and facilities as well as a series of extraordinary at June 30, 2018. Dividend payable from Nov. 21, 2018 maintenance works. Except for what has already been discussed, no other (distribution date Nov. 19, 2017; events occurred after June 30, 2018 which could have registration date Nov. 20, 2017) had an impact on the economic, equity and financial Headquarters and laboratories of position as shown in the balance sheet, the income the Danieli Academy in Buttrio. statement and statement of comprehensive income at to the 37,918,320(1) The Academy is a strategic said date, or required further adjustments or additional corporate tool for the systemic ordinary shares notes to the consolidated financial statements and to and systematic development of the separate financial statements. euro 0.100 per share euro 3,791,832 the individual and organizational skills of human resources, and their effects on the business, leading to the 36,479,670(2) to the creation of a positive brand identity. Outlook savings shares euro 0.1207 per share euro 4,403,096 The coordinated work of the governments of major industrialised countries brought about a slow but clear improvement in the economic recovery for Total dividends euro 8,194,928 the manufacturing, mechanical engineering and steel making industries that may further develop in To extraordinary reserve euro 198,172,419 2019 with an accommodating policy for credit and investments. In any case, steel consumption remains strong in 2018 Total net profit for the year euro 206,367,347 and 2019 in absolute terms, growing significantly in ASIA and recovering in other countries. Given this scenario, we expect that the Steel Making segment (ABS) will therefore perform satisfactorily in (1) net of 2,961,213 2018/2019 with an efficient production mix and good ordinary treasury shares held production volumes. on September 25, 2018. For the Plant Making segment, turnover is expected (2) net of 3,945,363 to grow in 2018/2019, thanks to the order book as at savings treasury shares held June 30, 2018, and with a better operating income, on September 25, 2018.

32 DANIELI YEAR 2018 GROUP 33 Danieli The Reliable and Innovative Partner in the Metals Industry Plantmaking Division

34 DANIELI YEAR 2018 GROUP 35 Engineering and Plantmaking Leading Team

Group Executive Board Danieli Product Lines, Danieli Epc and Danieli Customer Service More Srl (Italy) Danieli Germany GmbH G. Charoenvananatee, Sister Companies, Site Management Services E. Brusini, M. Zanco — EAF Special technologies (Germany) D. D’Odorico, T. Nammisa, Customer Service, Manufacturing, A. Lombardi L. Londero, M. Iacuzzi — Flat Products Rolling / N. Nakamura, N. Patrizi, Procurement, Technical Service and Spare Parts Metallurgical Engineering for Final N. Sathichoke Logistics Management Danieli Construction International A. Vallan, P. Bahadian Bardy, Danieli Centro Recycling Applications Spa G. De Lorenzo, M. Padovan, (UK, Germany, France) J. Schröder Danieli India Ltd (India) S. Baici, A. Heltai, E. Gardina, A. Zanon, A. Viviani, C. Garlant — Scrap Recycling Technologies — Engineering, Project G. Carnelutti, A. Betts, Management, Site Management, GIANPIETRO BENEDETTI G. Furino, A. Di Minin Executive Managing Staff Group Technical Sales, Key Danieli Corporation G. Lovadina Forging, Extrusion, Seamless Manufacturing and Service Chairman Account Management, Marketing, Fata EPC (Italy) (USA, Canada) and Welded Pipes for Danieli Products Special projects M. Di Giacomo, G. Ximeris, — Marketing, Engineering, Project Danieli Procome Iberica SA (Spain) M. Totis F. Esposito, G.S. Rao, ALESSANDRO TRIVILLIN A. Lombardi, S. Pagani D. Fabro A. Diasparro Management, Site Assistance, — Charging systems for EAF, B. Ghosh, R. Hisaria, Supply Chain, Manufacturing, Service DRP and Pelletizing Plants Danieli Centro Tube (Italy) A. Todisco, A. Pandey, Procurement, Logistics, Group Technical and Commercial Costing and Tendering, Advisory Services for Plant P. Losso, B. Malan, L. Rossetto, G. Nigris, A. Aldama, J. De Blas Danieli W+K (Germany, Italy) S. Jain, S. Banerjee, S. Singh, Governance of Operations and Sales, Macroplanning Macroplanning Startup and Commissioning F. Palagiano — Seamless Pipe Mills, Welded V. Vipra, H. Mehdipour Quality, Customer Service, M. Di Giacomo, G. Ximeris P. Menta, E. Parisi, Pipe Mills Human Capital Management, I. Grgic, A. Todisco M. Chiandetti Danieli Mexico (Mexico) Long Products C. Bartolini, E. Cernuschi, Danieli Engineering Japan Ltd Academy, Controlling, Legal Human Capital Management — Service, Sales, Marketing, F. Mulinaris, L. Crespan S. Bettinelli, G. Grandi (Japan) Affair, Internal Audit and S. Stafisso, C. Benedetti — Engineering and Service Information Technology Danieli Automation Project Management Research Center and Digi&Met 4.0 A. Voltolina, G. Nigris, Danieli Morgårdshammar (Italy) Danieli Breda (Italy) A. Mordeglia, N. Nakamura Danieli Academy G. Marconi, C. Tomat A. Mordeglia, A. Ardesi, A. Vallan — Bar, Wire rod Mills, Heavy Bar — Extrusion and Forging Presses Junior Recruitment and / Section Mills C. Bartolini, A. Galli, GIACOMO MARESCHI DANIELI Development, Kindergarden A. Todisco, A. Brussi, S. Stafisso, Danieli Do Brasil Ltda (Brasil) I. Danielis, C. Fabbro, A. Rossit, P. Fraternale Manufacturing, Procurement Group Technical Commercial and Primary School M. Ometto Danieli Plant Engineering M. Occhipinti, F. Rocchetti and Logistics Sales, Macroplanning, Costing — Service, Marketing, P. Perabò M. Pitton, S. Giacomelli Engineering, Project Management, M. Crosti and Tendering, Danieli Plant Danieli Automation Spa A. Mordeglia, A. Ardesi, Site Assistance Sund Birsta AB, Heating Systems Engineering, Commissioning, Finance, Administration, Technical Sales and Project A. Todisco, M. Ometto, L. Mottes, F. Turibio, W. Souza Morgårdshammar AB (Sweden) and Heat Treatment Furnaces — Governance of Operations Danieli Construction, General Contracting, Controlling Directors E. Plazzogna, E. Gigante, — Long Product Rolling Mills G. Cruder, L. Marson Services A. Brussi, L. Ferraresi M. Pitton, D. Fabro, A. Mestroni, G. Brunetti, Danieli Engineering and Services for Special Steels, Binding and Danieli Centro Combustion Spa L. Tambosco, G. Nigris, S. Martinis, F. Perotti, Austria GmbH (Austria) Handling systems for Bars, Wire Danieli Olivotto Ferrè (Italy) —Worldwide Manufacturing ­— Administration, Controlling R. Pezzano G.B. Vallarino, R. Guido, — Service, Marketing, Rod, and Hot / Cold Flat Products Danieli Centro Combustion India M. Rinaldis ALESSANDRO BRUSSI A. Deana, M. Marinutti P. Marstedt, O. Englund, — Heating Systems and Heat Finance and Administration R. Poboni, S. Vasinis Engineering, Site Assistance Danieli Engineering Products S. Bergamasco, G. Ranc C. Sahlin Treatment Furnaces — Worldwide Procurement — Finance and Contracting M. Pitton, S. Giacomelli, Digi&Met 4.0 A. Donetti, E. Mozzi, C. Pittini, M. Del Giaccio WERNER AUER A. Brussi, A. Mareschi Danieli, A. Di Giacomo Danieli Centro Maskin (Italy) C.A. Migliardi Flat Products Plants, R. Grosso, M. Ius A. Mordeglia, M. Ometto, A. Ardesi Ironmaking and Converter — Inspection and Conditioning — Worldwide Logistics Danieli Germany, Danieli Corus Danieli Centro Metallics Steelmaking Plants, Cold Finishing Lines E. Copetti Technical Services — Legal Affairs — Iron ore / Pelletizing / DR Plants Danieli Rotelec (France) W. Auer, N. Bleijendaal S. Orlando Danieli Asia F. Londero A. Martinis, M. Zampa A. Menocci, B. Mockmongkonkul, — Buttrio Workshops ROLANDO PAOLONE F. Guastini, P. Declerc Danieli Corus Technical Services D. D’Odorico, F.D. Martino, M. Muroni Long Products Plants, — Internal Audit, Turn Around Danieli Environment and Systems BV (The Netherlands) Flat Products F. Esposito, G.S. Rao, Group Technical Director, Project Danieli Taranis LLC (USA) — Ecological and Recovery L. Sandrin, H. Hödl D. Ambrosino, G. Ximeris, Quality Control Danieli Research Center, A. Nardone, W. Dow, — Blast Furnace and Oxygen L. Ferraresi Systems Steelmaking Technologies L. Ferraresi M. Gavasso, R. Balestra, Process Automation, C.J. Feather F. Casarsa, M.P. Cudicio W. Auer, N. Bleijendaal, Danieli Wean United, Products Competitiveness Information Technology Danieli Systec Doo (Croatia) R. Jonkman, G. Apeldoorn, Danieli Fata Hunter (Italy) Danieli Metallurgical Equipment Danieli Volga LLC (Russia) A. Stewart, M. Cappa Danieli Centro Cranes F. Van Gool — Hot and Cold Rolling / & Services Co Ltd (China) — Marketing, Service, ANTONELLO MORDEGLIA — Heavy-Duty Cranes S. Stafisso, A. Todisco, R. Košmerl Processing Lines / Aluminium Hot — Engineering, Project Engineering, Project Management, Danieli Automation / Automated yards and Cold Rolling Mills and Stretchers Management, Site Management, Manufacturing and Digi&Met 4.0 L. Argiolas, A. Vrech Elsid Cheda Ltd (Russia) Electric Steelmaking, S. Berger, C. Bilgen,M. Bulfone, Manufacturing and Service for A. Colussi, I. Doro, P. Deano, E. Cuzzot Continuous Casting S. Dolzan, R. Holz, I. Koshyk, Danieli Products M. Rinaldis, A. Polulyakh Danieli Hydraulics R. Sellan, L. Morsut T. Settimo, A. Coari, M. Mazza, F.D. Martino, D. Ambrosino, — Industrial Hydraulic and Danieli Automation Co Ltd M. Turchetto, L. Vignolo L. Coianiz, J. Guo, M. Meloni, Termo Makina San. V.T.A.S. Lubrication Equipment Danieli Centro Met (Italy) D. Pedrocchi, C. Zhang (Turkey) F. Casarsa, C. Benini (Thailand) M. Oliviero — Electric Meltshops / Billet, Danieli Kohler (USA) — Sales, Marketing, Service, Bloom, Beam blank casters / Slab — Air Wiping Equipment Danieli Co Ltd Cranes and Meltshop Equimpent ® MI.DA. - Micromill Danieli casters G. Kohler, M. Turchetto (Thailand and Vietnam) Manufacturing A. De Luca, A. Tellatin Danieli Telerobot Labs Srl (Italy) D. Corsini, F. Becchi P. Burin, D. Lestani, — Engineering, Project M. Zanco, M. Crosti, T. Yilmaz A. Della Vedova, M. Knights, Innoval Technology Ltd (UK) Management, Manufacturing Layout and Basic Engineering H. Koblenzer, A. Sgrò, — Process Technology and Advisor and Service for Danieli Products, G. Caimano, A. Panizzi M. Massimo Services for Aluminium Flat Hydraulics, Pressure Vessels Product Mills A. Menocci, B. Mockmongkonkul, T. Farley, G. Mahon D. Ambrosino,

36 DANIELI YEAR 2018 PLANTMAKING 37 Significant events of the Group’s Danieli Plantmaking Main events of the year consolidated international standing.

In thousands of euro Plantmaking Sales and operating results June 30, 2018 June 30, 2017 Net revenues 1,726,778 1,787,718 Gross operating margin (EBITDA) 106,973 137,079 Depreciation, amort. and write-downs (65,184) (80,035) Operating income 41,789 57,044 Net financial income/(charges) (18,583) (5,657) Profit before tax 23,206 51,387 Income taxes (9,652) (10,428) Net profit 13,554 40,959

Segment assets 3,586,252 3,855,146 (increases in investments in tangible and intangible fixed assets included) 31,199 45,220 Segment liabilities 2,394,200 2,635,814 Net financial position 951,772 1,052,598

The Danieli Group designs and builds plants — Plants for secondary processing, such as peeling, for all process areas, such as: straightening, 2-roll reeling and drawing machines; — Forging presses and manipulators and complete — Mines; forging plants; — Pellet production plants; — Extrusion presses for ferrous and non-ferrous — Blast furnaces; materials; — Direct reduction; — Plants for longitudinal cutting and for transversal — Scrap shredders, cutting to size of sheet and plate in all non-ferrous — Steelworks for production of liquid steel; metals and stainless steel; — Conticasters for blooms, billets; slabs; thin slabs; — Level 1, 2, 3 and 4 plant automation systems; — Rolling mills for long products; — Cranes and lifting equipment. — Rolling mills for seamless tubes; — Lines for welded tubes; In the long product rolling plant sector, the Danieli — Hot and cold rolling mills for flat products (all Group is world market leader in terms of both ferrous and non-ferrous metals and stainless steel); the number of plants in use and annual sales and, — Process lines for flat products; in particular, is the undisputed technological leader — Complete plants for dimensional checking and for for level of automation as well as plant reliability, non-destructive quality control, and conditioning plants; productivity and achievable product quality. From top left to right: Celebration of project completion Official inauguration of CC8 slab caster for special steels for the Blast Furnace No. 4 reconstruction at ArcelorMittal at voestalpine Stahl, Austria; Official inauguration of the Zenica, Bosnia and Herzegovina; Signing ceremony for a world’s most modern wire rod mill at voestalpine Wire FQT seamless pipe complex for OMK Vyksa Steel Works, Technology, Austria; official groundbreaking Russia; Contract signing for a 0.5-Mtpy electric steel ceremony for the scrap-based Danieli Nano Mill meltshop rehabilitation project in the MENA region; at Las Lomas, Bolivia.

38 DANIELI YEAR 2018 PLANTMAKING 39 Danieli Plantmaking The Team

Danieli Plant Engineering Since 1964 Italy Turnkey Plants and Systems Engineering Danieli Fata EPC Since 1965 Italy, USA, India, China, UAE Turnkey Plant Engineering, Procurement, Construction Danieli Automation & Digi&Met Since 1969 Italy, USA Process Control Systems Danieli Centro Metallics Since 1987 Italy Ore Processing and Direct Reduction Plants Danieli Corus IJmuiden Since 1977 The Netherlands Integrated Steelmaking Plants Danieli Centro Germany Since 2011 Austria, Germany Oxygen Converter Steelmaking Plants Danieli Centro Recycling Since 1998 Italy, UK, France, Germany Scrap Processing Plants Danieli Centro Met Since 1914 Italy, Austria Electric Steelmaking and Long Product Casters Danieli Davy Distington Since 1951 UK, Italy Thick and Thin Slab Casters Danieli Wean United Since 1901 Italy, USA, Germany Flat Product Rolling Mills and Strip Processing Lines Danieli Kohler Since 1959 USA, Italy Air Wiping Equipment for Zinc Coating Danieli Fröhling Since 1947 Germany Specialty Mills and Strip Finishing Lines Danieli Fata Hunter Since 1936 Italy, USA Aluminium Casting, Rolling, and Coil Coating Lines Danieli Morgårdshammar Since 1856 Italy, Sweden Long Product Rolling Mills Danieli Centro Tube Since 2004 Italy Seamless Pipe Plants Danieli W+K Since 1968 Germany, Italy Longitudinal and Spiral Welded Pipe Plants Danieli Centro Maskin Since 1953 Italy, Sweden Conditioning, Drawing, and Finishing Plants Danieli Rotelec Since 1977 France, Italy EMS and Induction Heating Systems Danieli Hydraulics Since 2008 Italy, Thailand Industrial Hydraulic and Lubrication Equipment Danieli Breda Since 1950 Italy Extrusion and Forging Plants Danieli Centro Combustion Since 1981 Italy Heating Systems Danieli Olivotto Ferrè Since 1927 Italy Heat Treatment Furnaces Danieli Centro Cranes Since 1958 Italy Heavy-duty Cranes Danieli Environment and Systems Since 1973 Italy Green Technology and Systems Danieli Construction Since 2003 Italy, Thailand Turnkey Construction, Erection, and Systems Engineering Danieli Service Since 1962 Italy, Austria, China, India, Technical Service and Original Spare Parts Russia, USA, Brazil, Thailand Danieli Team’s mission is to serve Customers with competitive plants and process technology/ automation to produce quality with the lowest depreciation and production cash costs and to offer friendly after-sale service involving highly qualified, specialized engineers. The technology spectrum -from ore to finished product- and relevant process know-how provided by our Product Lines, the well-known tendency towards innovation and high reliability are the best guarantees in reaching this target.

40 DANIELI YEAR 2018 PLANTMAKING 41 The Reliable Innovative Partner in the Metals Industry Danieli Plantmaking The Team

More than 25 divisions, each one staffed Italy, Austria, UK, by individuals with specific technical USA Germany Italy capabilities, and bringing long and notable legacies from their own countries form a multicultural, multilingual team that helps us to establish the best relationships with our customers around the world. DANIELI AUTOMATION & DIGI&MET DANIELI CENTRO GERMANY DANIELI DAVY DISTINGTON Process Control Systems Oxygen Converter Steelmaking Plants Thick and Thin Slab Casters / Since 1969 / Since 2011 / Since 1951

With more than 40 years of experience focused Danieli Centro Germany is a steelmaking center Danieli Davy Distington pioneered continuous casting on metals worldwide, Danieli Automation is your of competence, where proven oxygen converter technology and today, through continuous innovation, technological partner for production management, specialists interact with experts on sublance systems, is world’s leader in the design and manufacture of process and equipment control, advanced process models, and technological packages, as well advanced continuous slab casters. instrumentation, and state-of-the-art electrical as with the pioneering Danieli R&D Researchers. solutions.

Italy Italy Italy, Italy, UK, USA, France, Germany Germany, USA

DANIELI PLANT ENGINEERING DANIELI CENTRO METALLICS DANIELI CENTRO RECYCLING DANIELI WEAN UNITED Turnkey Plants and Systems Engineering Ore Processing and Direct Reduction Plants Scrap Processing Plants Flat Products Rolling Mills and Strip Processing Lines / Since 1964 / Since 1987 / Since 1998 / Since 1901

We supply integrated plants for the metal industry, With more than 50 years of research and experience Danieli Centro Recycling is the innovative team to Over the course of its long history Danieli Wean United including technologies, auxiliary plants, construction, in design, construction, commissioning and operation meet new challenges in the design and construction has developed a thorough knowledge together with a and after-commissioning assistance. of iron ore processing and direct reduction plants, we of advanced recycling plant technology, giving added well-earned experience in the downstream processing We provide customers with a single-point responsibility, supply any type and size of DRI based minimills. value to scrap, and focusing on the needs and of the hot/cold rolled steel and strip processing lines. ensuring project delivery time assurance and total requirements of aiming for zero environmental impact. investment cost certainty.

Italy, The Italy, USA USA, Netherlands Austria India, China, UAE

DANIELI FATA EPC DANIELI CORUS IJMUIDEN DANIELI CENTRO MET DANIELI KOHLER Turnkey Plant Engineering, Procurement, Construction Integrated Steelmaking Plants Electric Steelmaking and Long Product Casters Air Wiping Equipment for Zinc Coating / Since 1965 / Since 1977 / Since 1914 / Since 1959

Danieli Fata EPC operates in the field of plant Danieli Corus has firm roots in IJmuiden, where steel The constant evolution of technical and process know- Danieli Kohler is world leader in the supply of highly engineering, procurement and construction, production started in 1924 and quickly developed how through significant investments in R&D as well as technological equipment, with more than 150 providing customized, state-of-the-art technology towards world benchmark for Blast Furnace synergies and cooperation with our customers have installations in molten metal coating lines of all types. and enviromentally consistent solutions for primary ironmaking and BOF steelmaking. made Danieli Centro Met a worldwide leading supplier aluminium smelters, downstream aluminium projects, of electric steelmaking plants. oil & gas, power generation plants.

42 DANIELI YEAR 2018 PLANTMAKING 43 Danieli Plantmaking / The Team The Reliable Innovative Partner in the Metals Industry

Germany Italy France, Italy Italy

DANIELI FRÖHLING DANIELI CENTRO TUBE DANIELI ROTELEC DANIELI CENTRO COMBUSTION Specialty Mills and Strip Finishing Lines Seamless Pipe Plants Ems and Induction Heating Systems Heating systems / Since 1947 / Since 2004 / Since 1977 / Since 1981

Danieli Fröhling is well known all over the world Through a highly qualified and long lasting Danieli Rotelec is a leading company in the Equipment is bespoke to suit the needs of each as a manufacturer of machines of the highest quality experienced engineering team, Danieli Centro Tube manufacture of electromagnetic stirrers for conticasters client and includes cutting-edge technologies which for rolling and processing of non-ferrous metals, designs, manufactures and supplies and induction bar edge heaters for hot strip mills, concentrate on environmentally friendly solutions. not simply satisfying its demanding customers technologically-advanced complete plants and offering a unique combination of metallurgical A well-established network of after sales services but rather inspiring them by continuously extending equipment for the hot rolling and cold finishing process know-how, and expertise in designing/self- guarantees equipment supplied, regardless of different technical limits. of high-quality seamless pipes. manufacturing of equipments. feedstocks; billets, blooms, beam blanks, slabs or pipes, etc.

Italy, Germany, Italy, Italy USA Italy Thailand

DANIELI FATA HUNTER DANIELI W+K DANIELI HYDRAULICS DANIELI OLIVOTTO FERRE’ Aluminium Casting, Rolling, and Coil Coating Lines Longitudinal and Spiral Welded Pipe Plants Industrial Hydraulic and Lubrification Equipment Heat Treatment Furnaces / Since 1936 / Since 1968 / Since 2008 / Since 1927

Danieli Fata Hunter is one of the world leaders in Danieli W+K is a strong, reliable and competent Thanks to the expertise and know-how gained in the With over 800 references, Danieli Olivotto Ferre’ implementing single equipment as well as complete partner for the pipe and tube industry. It develops steel industry, Danieli Hydraulics can provide any stage is able to supply a wide range of economic and turnkey plants for the aluminium flat rolled product customer-orientated individual solutions not only with of engineering, production and commissioning process sustainable heating solutions and modern heat treating industries and for steel and stainless steel processing upcoming modernization projects and the delivery of also for other markets, such as oil & gas, mining, paper furnaces covering a whole range of appliances and industries, with a comprehensive ability and know-how single plant components but also with the installation industry, cement industry, hydro-power, tools machine, services for the metals industry. for all production ranges. of a complete turnkey pipe plant. marine, etc.

Italy, Italy, Italy Italy Sweden Sweden

DANIELI MORGÅRDSHAMMAR DANIELI CENTRO MASKIN DANIELI BREDA DANIELI CENTRO CRANES Long Product Rolling Mills Conditioning, Drawing and Finishing Plants Extrusion And Forging Plants Heavy-Duty Cranes / Since 1856 / Since 1953 / Since 1950 Since 1958

We believe in what we build day by day and we are Danieli Centro Maskin is a reliable and innovative For well over 50 years Danieli Breda has been Design and supply of cranes and lifting systems for the what we produce. partner for challenging new goals in the design and recognized as one of the world’s front-runners in the heavy industry and logistics, with dedicated solutions This is written in our DNA since 1856. From bigger to construction of advanced grinding, drawing, peeling design, manufacture and supply of machines and for lifting and handling of materials and equipment in smaller, from heaviest to longer, from smaller to faster, and cold finishing lines for sbq bars. integrated plants for processing ferrous and non- the most severe conditions. Our products are designed simply undisputable features in the metals industry. ferrous materials in the field of extrusion and forging to operate where reliability, safety, and cost-effective technology. solutions are a must.

44 DANIELI YEAR 2018 PLANTMAKING 45 Danieli Plantmaking / The Team _action

Italy

DANIELI ENVIRONMENT AND SYSTEMS To be a step ahead

Green Technology and Systems Danieli Inno v / Since 1973

A division that specializes in environmental protection, offering a full range of proprietary technologies for air pollution control, water treatment, energy saving, energy recovery, solid waste recovery, and noise reduction.

Italy, Thailand

DANIELI CONSTRUCTION Turnkey construction, erection and systems engineering / Since 2003

Danieli Construction International operates worldwide with own handling and transportation equipment and through specialized and trained people covering a full range of services related to Civil and MEIP (Mechanical, Electrical, Instrumentation, Piping) installations for industrial plants.

Italy, Austria, China, India, Russia, USA, Brazil, Thailand

DANIELI SERVICE Technical Service and Original Spare Parts / Since 1962

Always close to our partners. Counting on Danieli Service support means becoming more than just a customer: it means becoming a partner in the strategic challenges requested by market developments, so as to be always a step ahead in CapEx and OpEx.

46 DANIELI YEAR 2018 Danieli Research and Development imagine, design, manufacture, and test the processes and equipment for the Metals Industry of the next 20 years

Research and Development — Successful industrial tests for projects carried out a new-design mould plates for in the financial year 2017/2018 thin slab caster. More than double service life and better product quality. Ironmaking, Steelmaking, — Development of an innovative and Continuous Casting plants and ‘green’ secondary cooling system for slab and bloom casters. — Continued design development

To be a step ahead — First industrial installation of / the innovative DANCU-Danieli of slab caster segment rolls to Charging Unit for Blast Furnaces improve their service life and the and DRP reactors. product quality.

_action — Development and tests of a — Continued improvement of SEN new process for the recovery of the and tundish design for thin- and fines in DRP plants. thick-slab casters. — Completion of a new slag — Development of an innovative stopper system. monitoring system for slab caster — Development and installation segment rolls.

Danieli inno v of a technological package for automatic scrap yard management, with the aim of Rolling Mills for Long Products identifying and tracking scrap quality. — Plant-wide improvement of wire — Successful industrial installation rod rolling mills for specialty steels. of an improved scrap continuous — Successful industrial installation charging system as part of the of the first, innovative, four-roll Q-MELT technological package for sizing mill for the production of automatic EAF operation. top-quality SBQ bars. — Continued development of an — Continued improvement in innovative meltshop design based endless rolling technology by the on the concepts of continuous combined use of billet welding melting and maximized digital machines and spooler systems. control, and an environmental — Development of the Smart friendly approach. Guide: a new-generation roller — Industrial test for a new billet guide series. shape for the ECR-Endless — Prototype tests for a fully Casting Rolling plants to reach automatic ring-change system on a productivity of over 90 tph per ESS cantilever rolling stands (no strand and reduced containment. man on the floor). — Successful industrial tests of an — Development of a robotized innovative soft reduction system labeling system for coils. for round blooms. — Development of a monitoring

48 DANIELI YEAR 2018 PLANTMAKING 49 Danieli Research and Development

system for rolling mill consumables Non-ferrous Metals system for BOF converters. by RFID technology. — Continued development of — Successful installation of the — Industrial installation of an the Energy Monitoring System for Jumbo RD: the world’s largest innovative system for adaptive plant-wide energy consumption straightener for heavy beams. modular cooling of aluminium optimization. — Successful installation of a extruded profiles. — Continued improvement of new-design disc saw for cutting of — Startup of an innovative plant the Q-CAST package series (LPC, hot blooms. for the production of copper wire QMAP, QCORE, QCOOL, QMOD) in coils. for flat-product and long-product — Development of a new conticasters. Hot and Cold Strip Mills and lubrication system for aluminium — Evolution of the HiPAC Processing Lines cold rolling mills. technology, the Danieli Automation platform for real-time control. — Start of industrial production — Development of the Q-BOX of the transverse induction heating Heating Systems package for optimized pinch system for hot strip mills. roll operation at very high rolling — Successful installation of the — Continued development and speeds. improved thermal treatment testing of burners and heat — Continued testing and system for hot strip mills (run-out exchangers for radiant-tube optimization of Q-ONE power table). heating systems (radiant tube U converter system for AC EAF — Industrial application of the and W type). electrical supply. newly developed innovative direct — Development and testing of — Application of Q-LIVE virtual quenching system for plates. regenerative burners for low and reality simulator in a hot-dip — Development of improved high LHV. galvanizing line and in an cooling systems for strips and — Further improvement of the aluminium rolling mill. plates with a fast regulation time. high-efficiency jet coolers for hot — Continued tests on the — Continued development of dip galvanizing lines. Q3-PREDICTIVE machine numerical models for metallurgical — Development and testing for learning applications for process process design and L2 process burners used in the furnace' optimization, quality prediction, control. free-flame sections, focusing on and material properties In 2017/2018 Danieli Group invested 35 MEuro — Studies for alternative strip sub-stoichiometric combustion to forecasting. in direct and indirect research activities, coating materials and systems. prevent strip oxidation — Continued development and — Continued development of a — Continued tests on Rige application of teh Automatic and more than 150 MEuro in the management new-generation high-productivity application for reheating large Scrap Yard concept with AI-based of innovative job orders. pickling line together with an furnaces, using Natural Gas. material classification and 3D real- innovative control system. — Continued tests on ultra-low time inventory. NOx burners for both reheating — Development and first plant and process line furnaces, tests of Q-AFS slag level detection Seamless Pipe Mills focusing on the use of low calorific system based on 4.0 radar value gas (below 3,000 kcal/Nm3). technology. — Continued development of the — Successful installation of FQT-Fine Quality Train technology Q-ROBOT CAST Ladle with and design. Automation and Process Control sampling and lancing functions. — Successful industrial application Systems — Installation of cutting-edge of an optimized cold pilger mill release technological packages for technology. — Successful industrial installation conventional and thin slab casters. — Successful installation of a of a second Q-Melt package for — Industrial application of unique 3-roll CRM-Cross Rolling fully automatic EAF operation. Q-SHAPE DSD for draw sizing Mill for superior-quality, oversize — Completion of the Q-TEMP control in SBQ rolling mills. special pipes. package for temperature tracking — Development of Q-TECH — Development and tests of the in vacuum degassing systems. package for offline dimensioning HPE-Hot Pull Elongator technology — Industrial installation of the of flat products plants based on for seamless pipe rolling mills. advanced temperature monitoring automation models Q.

50 DANIELI YEAR 2018 PLANTMAKING 51 Engineering DesignProcess Multidisciplinary, perfect integration of tools and human knowledge for the success of the project

1,600 engineers and technicians that cover all the disciplines from civil to automation passing through mechatronic, To be a step ahead / hydraulics, and electricals. _action Danieli inno v The strength of a Company cold rolling, which is fundamental is directly proportional to the in the design of the rolling strength of its Engineering Team. mills for sections, heavy beams and rails, is regularly used to This sentence explains how Danieli support the Design Team. Most approaches the Engineering of the basic design is realized Design Process. at the headquarters in Buttrio, The global Engineering Team of where more than half of the Danieli counts more than 1,600 technicians are located. A well engineers and technicians that proven team effort will ensure the cover all the disciplines from civil perfect integration of the various engineering to automation, passing disciplines. Perfect integration of through mechatronic, hydraulics, tools and human knowledge is and electrical systems engineering. fundamental to the success of the For the design, Danieli uses the project. Multidisciplinary review latest generation of 3D CAD meetings are regularly planned to programs, able to interface with follow up the activities from the any kind of CAD available on the timing and technical points of view. customer side. Modelling tools During these assessments, for Multibody and Multiphysics procurement and production simulations, to properly read teams are involved to cover and the physical phenomena are anticipate any potential issue. commonly used during the The Danieli Design Team development of the project. Finite has experience and strong Element Modelling, to forecast competencies in all the processes the plastic deformation as well as relevant to the fields of metal torque and load during hot and transformation.

52 DANIELI YEAR 2018 PLANTMAKING 53 Danieli Automation and Process Control Systems know-how and Smart solutions to step toward Industry 4.0 simplifying metals complexity To be a step ahead / _action

Danieli inno v Danieli Automation is the computerized quality and company within the Danieli Group production control systems responsible for the transfer are developed in house and of technological know-how are the means to transfer Danieli Digi&Met is the cross- from other Danieli technological process know-how to final functional business unit

divisions to end users, supplying users, thanks to the synergistic DanieliPantone 805 (fluo) R 255 / hasG 75 / B 78 createdC 0 / M 84 / Y 64 / K 0 to develop the interface between plant relationship with Danieli and the and implement new plant process and operator. technological background shared design concepts based on Its mission is to provide process with the parent company. digital innovation, and also automation and control systems This co-operation with new business models based for the metals industry, covering the mechanical designers on servitization and outcome the wide spectrum of Danieli has led to optimized economy principles, to ensure technologies, ranging from iron and standardized solutions, consistency in quality, plant ore to long and flat products. resulting in best performances utilization, OpEx and faster Software algorithm models, and quicker plant start-ups. deliveries.

54 DANIELI YEAR 2018 PLANTMAKING 55 Seven Danieli Production Centers worldwide to ensure the same quality everywhere

Danieli Quality Philosophy chemical and physical properties of the products before and after At Danieli we are aware that know- treatment. how is not only the technological — Assemble and complete final process and design expertise tests that ensure performance and but it is also the manufacturing reliability over time with teams that capability that we have developed also are in close connection with and consolidated over time with commissioning. the aim of offering our customers To be a step ahead / cutting-edge equipment and Thanks to all this and also to prompt service. We can boast advanced planning tools, real-time advanced manufacturing plants traceability systems, 3D measuring

_action in all the most important steel machines, and metallurgical labs, markets: China, India, Thailand, we have overall control of our Russia, and, obviously, state-of- projects from in-house design and the-art technology in Europe. manufacturing to on-site startup The plants cover an indoor area of and commissioning. Therefore, 500,000 sqm and employ 2,500 we produce internally the most

Danieli inno v highly skilled technicians who strategic and complex machines provide five millions of productive that incorporate the company’s hours per year and work in a safe know-how at top-quality standards. and eco-friendly environment. In fact, Danieli doesn’t want In particular, we are able to: to compromise the quality and reliability levels of the — Weld thicknesses up to 1,000 equipment supplied. That’s mm on products weighing up to why the workshops abroad are 500 tons. completely owned and managed — Carry out boring, milling, by Danieli, and can be seen as a turning, and grinding operations on whole workshop, where culture, 250 machine tools equipped with and high standards of quality the latest generation numerical and reliability guarantee the controls and special tools able to same excellent results we have work on eight axes simultaneously. at the headquarters workshops — Produce high-precision in Italy, and allow us to claim gears and perform all types of “Danieli workshops: same quality heat treatment by checking the worldwide”.

56 DANIELI YEAR 2018 PLANTMAKING 57 Danieli Headquarters / Italy Total surface: 320,000 m2; Danieli Workshops Worldwide Workshop area: 92,000 m2; Technical and administrative offices: 28,000 2m . Employment: 1,800 engineers. Start of operations: 1962.

Danieli Volga / Russia Danieli Austria Total surface: 250,000 m2; Total surface: 40,000 m2; Workshop area: 10,000 m2; Workshop area: 6,000 m2; Technical and administrative Technical and administrative offices: 1,800 m2. offices: 1,400 m2. Employment: 90 engineers. Employment: 40 engineers. Start of operations: 2014. Start of operations: 2008.

Danieli / Germany Total surface: 4,200 m2; Workshop area: 2,800 m2; Technical and administrative offices: 1,400 m2. Employment: 140 engineers. Danieli India Start of operations: 2005. Total surface: 320,000 m2; Workshop area: 41,000 m2; Seven Danieli Production Centers worldwide Technical and administrative offices: 2,500 m2. to ensure the same quality everywhere Employment: 500 engineers. Start of operations: 2013.

Danieli Thailand Danieli China Total surface: 525,000 m2; Total surface: 200,000 m2; Workshop area: 90,000 m2; Workshop area: 90,000 m2; Technical and administrative Technical and administrative offices: 13,000 m2. offices: 12,000 m2. Employment: 900 engineers. Employment: 950 engineers. Start of operations: 2005. Start of operations: 2 007.

58 DANIELI YEAR 2018 PLANTMAKING 59 Italy

Danieli Headquarters Sales, design, engineering, Buttrio manufacturing, assembly, project management, R&D, after-sales service.

Russia

Danieli Volga Sales, engineering, procurement, Dzerdzhisnk, Nižnij Novgorod manufacturing, project management, after-sales service, site services.

India

Danieli India Sales, engineering, procurement, Sri City, Andhra Pradesh manufacturing, assembly, project management, after-sales service. Danieli Workshops Worldwide

China

Danieli China Sales, design, manufacturing, Changshu, Shanghai assembly, project management, after-sales service.

Thailand

Danieli Thailand Sales, design, engineering, Rayong / Industrial Area manufacturing, assembly, project management, after-sales service.

60 DANIELI YEAR 2018 PLANTMAKING 61 Right, top: Assembly shop at Danieli HQ in Buttrio. Right, bottom: Assembly and functional testing operations of a nine-roller Jumbo straightener (2,500-cm3 modulus) for ultra- heavy sections, including parallel- flange beams and columns with up to 1,138-mm web wide, up to 476-mm flange height, up to 140-mm flange thickness and up to 1,377-kg/m linear weight.

Bottom: Automated vertical warehouse for simplified, quick and accurate picking operations, with no risks to the operators’ safety.

Right page, top: Assembly of pay-off reels for a high-speed (Danieli Turboflo® process) CPL-Continuous Pickling Line. Right page, bottom: Assembly of a carousel coiler for a PLTCM line. The carousel coiler makes it possible to maximize production capacity due to the lack of stoppage time for coil evacuation, and the well-known advantages of the continuous rolling process over the batch mode. Danieli Workshops Worldwide

62 DANIELI YEAR 2017 PLANTMAKING 63 Danieli Turnkey and Product-in-hand projects a high-end, global expertise to avoid risks, to minimize CapEx and OpEx and to maximize ROI

200 providing engineering services People and technologically advanced plant solutions

providing skilled and fast- To be a step ahead

/ 3,000 People track construction and erection services _action 1,200 providing expert advisory services for plant People commissioning and assisting the customer in managing process and production

Danieli inno v organization

Danieli Plant Engineering together Thanks to its extensive, in-house — definition of a tailor-made with the construction and advisory knowledge of plant processes, winning solution of the plant, fit-to- service arms of Danieli (i.e.: Danieli equipment and operations, and its purpose with state-of-the-art, own Construction International and ability to act in partnership with the engineered and manufactured Danieli Commissioning and Ramp- customers from the beginning of equipment, granting economic, up Services) represents today the the project and through to social, and environmental ideal EPC Partner for the metals production stabilization, Danieli sustainability; industry owners’, worldwide, since addresses all project requirements the Danieli TK Team acts either as to avoid risks, to minimize CapEx — execution of the TK Project as a multi-referenced main contractor and OpEx and to maximize ROI. EPC main contractor with single- or as a reliable and knowledgeable To reach the above targets, Danieli point responsibility via a trouble- business provider, capable of grants to the customer a “Service” free implementation on budget, developing products and services characterized and driven by the schedule and performances, with value-added solutions. following main fundamental always bearing in mind, throughout guidelines: the whole project life, to create — joint assessment of the market value to our customers; requirements and finding of the “value pools” where the production In other words: a real step ahead of a new plant could be located in the TK Project Business most strategically; approach and execution.

64 DANIELI YEAR 2018 PLANTMAKING 65

Danieli Service and Customer Support sharing and optimization of resources to create a new business ecosystem for our mutual benefit

65,000 hours / year of technical support and consultancy for productivity and quality improvement To be a step ahead / _action Danieli inno v

The new paradigm With continuous investment in our of Customer Service technology, people, and a critical focus on improving customer The aim of Danieli Service is to service, we achieved our highest support our customers through the sales revenues on record in the lifecycle of their plant and last financial year (2016/17) but equipment, providing a wide range are now adapting at a faster rate of services that range from spare to meet the increasingly complex parts and technological products and challenging economic climate through to technical assistance, of the “New Normal”. revamps, refurbishment and In recognition of the latter, the next reconditioning, training, and many phase of our evolution includes the other value-added solutions. development of a more Recent advancements have synchronised approach and an included the development of highly expansion of our services to interactive advanced services, include total asset management. from traditional maintenance Together with our suppliers, our management and condition- customers and their customers, monitoring systems to real-time our vision is to create a common support and diagnostics. platform to enable the sharing Our world-class specialists and and optimization of resources facilities are at your disposal to and the creation of a new align these services to your needs, “business ecosystem” for our where and when required. mutual benefit.

66 DANIELI YEAR 2018 PLANTMAKING 67 Danieli Green Metal Technologies knowledge, experience and commitment to ensure operational health, sustainability and competitiveness

Water treatment and consumption decrease Fume treatment and noise reduction

Water is a valuable natural resource, and the market will require Danieli fume-cleaning technologies can cover all the technological continuous improvement to reduce wastewater discharges needs thanks to the experience developed while supplying and integration of cooling systems for different processes, with hundreds of plants worldwide. The major efforts done in recent reduction of the total fresh water use. In the past 30 years, years have been focused on both reducing the emissions to the Danieli has supplied over 180 water treatment plants, gaining external environment and on providing the operators with healthy a deep experience in the use and management of water, with working places. All the emissions points are sealed, and the dust a philosophy dedicated to continuous R&D. Our technological produced is captured by dedicated suction hoods to generate packages for softening, demineralization, ultrafiltration and the “Green Layout”. The most relevant pollutants controlled reverse osmosis (Zero Liquid Discharge) are proven solutions to are: dust, dioxin, heavy metals, NOx, and other organic matter, address possible problems related to the future scarcity of water and our future target is to achieve “zero emissions” to external for industrial production and water pollutions. environment. GIV E E F W I

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S GIVE WATER A SECOND LIFE E _action Danieli inno v

More and more restrictive limits on this new trend of environmental Energy saving through reduction of emissions Solid waste and recovery the use of natural resources, obligations, the industrial producers on the emissions, on the production require reliable partners with Energy savings and efficiency mean automation of start-stop The circular economy calls for the recovery and recycling of all of wastes, on noise impacts - both knowledge, experience and functions based on the true operating requirements of the the waste materials produced in a steel making plant such as inside the plant working areas and commitment to ensure operational production plant. Important energy savings come as well from an slag and dust. Danieli through its patented Indutec™ process in the surrounding environment health, sustainability and effective way to recover the exhaust heat from the fume-treatment and Ecogravel™ plant, is able to eliminate the problem of - will be applied for the metals competitiveness, without slowing plant, accomplished by the Danieli Clean Heat Recovery plant hazardous wastes by turning them into an economic value as production sector.To respond to the production of metals. (CHR™). On our website, visit the section on CHR™ to learn recycled material to be reused in the production cycle (such as about the technical, environmental and economic benefits of pig iron and inert slag) or salable products in the market (such converting thermal energy into electrical power. as conglomerate materials for civil construction products and for paving of the roads, or crude zinc oxide). At end of the production cycle, there is no waste discharged to the ecosystem.

68 DANIELI YEAR 2018 PLANTMAKING 69 — Minimills, ironmaking Main orders acquired and steelmaking plants of the year Main events of the year Main events

Americas Europe Gruppo Cividale, Italy Africa and Middle East Q-ONE power system on a Nucor Corp., USA Van Merksteijn Int.l, 30-tons AC Electric Arc Furnace. ETRHB, Algeria No. 1 MI.DA.-Micromill Danieli The Netherlands 800,000-tpy MI.DA. Micromill to produce 380,000 tpy of rebars. 900,000-tpy scrap-based, green Evraz ZSMK, Russia Danieli for 8 to 40 mm rebar steel minimill for the production A Q-TEMP VD technology production. Nucor Corp., USA of wire rod for concrete package to enable continuous No. 2 MI.DA.-Micromill Danieli reinforcement and mesh products. liquid steel temperature MENA Region to produce 380,000 tpy of rebars. monitoring in the existing vacuum 450,000-tpy minimill for rebar Asil Çelik, Turkey degassing unit without the production, on a turnkey basis. Deacero Ramos, Mexico Complete meltshop necessity of vacuum killing. This Q-Melt® Dynamic Heat Suite for modernization, including will ensure constant and accurate UB Group FZE, UAE the automatic control of the EAF reconstruction of the EAF and temperature measurement, New electric steel meltshop for higher productivity and lower secondary metallurgy stations reducing treatment cycle and to produce up to 500,000 tpy energy consumption. and installation of Q-Melt® and increasing VD productivity. of billets, mainly based on a series of technological packages 70-t EAF and LF; material to further reduce the OpEx and SN Maia (Megasa Group), handling system, fume treatment improve profitability. Portugal plant, four-strand conticaster, Automatic EAF tapping system to and complete electrical and Kroman Çelik execute complete furnace tapping automation systems. PTC 1760H triple acting scrap remotely from the main pulpit, baler, and a CIB 1400-15L side increasing operation safety and compression scrap shear; one of improving process control. the largest and most productive of its category. ÓAM Ózdi Acélmüvek (Max Aicher Group), Hungary Central Asia High-efficiency fume treatment New 300-t BOF vessel, with plant to treat fumes and dust increased reaction volume, emissions of the primary and complete with new suspension secondary suctions lines of a 67-t system and trunnion ring, slag EAF and LMF. shields, and coupling.

70 DANIELI YEAR 2017 PLANTMAKING 71 Main orders acquired Main orders acquired Main orders acquired — Minimills, ironmaking — EPC — Flat product casting, rolling and steelmaking plants and strip processing lines of the year Main events

Far East Guihang Metal Products, China Europe Africa and Middle East Americas Wieland-Werke, Germany Far East 120-t EAF equipped with ECS- High-performance slitting line Guilin Pinggang, China continuous charging scrap system, ENEL, Italy ALBA-Aluminium Bahrain, Logan Aluminum, USA for thin-gauge copper alloys strip Hoa Phat Steel, Vietnam 1.2-Mtpy MI.DA. Micromill to replace an induction melting EPC contract to build a 4.26-MW Bahrain A DiamondFlex 6-high Cold for automotive and electronics QSP complex -including two Danieli with twin-strand furnace. Concentrated Solar Plant in Sicily EPC contract for the Fume Rolling Mill; the fastest and most industry applications. vertical-curved casters, a twin- conticaster and two separate Treatment Center for the new powerful Cold Mill in the world. strand shuttle furnace, and a rolling lines for straight bars and Qingyuan Tsingshan S.s., China HEP- Hrvatska elektroprivreda, Anode Baking Furnace within TMZ, Uzbekistan 2+4 stands hot strip mill- to wire rod; a world’s first. 150-t EAF equipped with ECS- Croatia smelter’s Line 6 Expansion 500,000-tpy Cold Mill Complex, produce up to 3.5 Mtpy of continuous charging scrap system, EPC and LTSA contract for Project. Europe including Push-Pull Pickling HRC in commercial and special Shanxi Jianbang, China to guarantee a tap-to-tap time of construction of modern CCP- Line, Two-stand Cold Mill, Hot- steels. Danieli Automation will 1.2-Mtpy MI.DA. Micromill 40 min. Combined-Cycle Power Plant ALBA-Aluminium Bahrain, Tatmetal, Turkey Dip Galvanizing Line. provide a complete electrical Danieli with twin-strand using only gas fuel, with electrical Bahrain Tandem Mill with five, 6-high and automation package. Danieli conticaster and two separate Chizhou Gui Hang Metal, China output of 150 MWe and heat EPC contract for the supply and stands to produce high-strength Rusal Krasnoyarsk, Russia Construction will perform the rolling lines for straight bars and 130-t EAF equipped with ECS- output of 114 MWt. installation of electrical bulk quality grades with superior 2-high Research Rolling Mill. erection of the complete supplied wire rod; a world’s first. continuous charging scrap system, material inside the Smelter- flatness. Homogenizing furnace for billets technological equipment. to replace an induction melting Carbon Area within smelter’s Line and slabs. Agha Steel Industries, Pakistan furnace. 6 Expansion Project. Yildiz Demir Çelik, Turkey Shandong Nanshan Aluminium, MI.DA.-Micromill Danieli to Second Hot Dip Galvanizing Line Severstal, Russia China produce 400,000 tpy of rebars. Hegang Laoting, China ALBA-Aluminium Bahrain, to add 400,000-tpy capacity to Continuous Pickling Line for Order for a 4,500-mm Plate Hot Two Sublance and Advanced Bahrain the complex and to expand the Cherepovets Steel Complex, to Rolling Mill and for a 2,350-mm SeAH Besteel, Korea Slag Control System on 260 ton EPC contract to expand the products range to GI and Zinc- process 2-Mtpy of carbon and 4-high EDT-Electro Discharge Q-Melt® suite on their EAF converters. industrial port to enhance Aluminum coated coils. engineering steel grades. Texturing Cold Rolling Mill to No. 3 to reduce process the capacity of the unloading, produce coiled sheet aluminium variability and OpEx. Nghi Son, Vietnam handling, and storage of raw strip material to meet the demand >Zero Scale Pit™< water materials (alumina and petroleum for automotive flat products. Dalipal Pipe Co., China treatment plants to complete the coke). EAF equipped with the Q-Melt order for two new conticasters Model advanced dynamic heat- caster and high-speed bar mill process control system. projects.

72 DANIELI YEAR 2018 PLANTMAKING 73 Main orders acquired Plant startup — Minimills, ironmaking — Long product casting and rolling plants. and commissioning and steelmaking plants — Seamless pipe mills of the year Main events

Europe ArcelorMittal Kryvyi Rih, Ukraine Far East Americas Europe Far East Upgrading of the “250-4” bar Megasa Group, Spain mill through the installation of Maanshan Iron and Steel SIMEC, Mexico ArcelorMittal Zenica, Bosnia and ViJa Steel, Vietnam Bar mill and wire rod mill a new 200-tph walking-beam China Startup of the steel meltshop that Hercegovina Startup of a MI.DA.® Endless modernization projects in Spain reheating furnace and a five-pass Two-strand conticaster for completes the 600,000 tpy Recommissioning of the 2,003-m³ Casting and Rolling line to and Portugal. rougher. This will make it possible Jumbo Beam Blanks up to minimill for SBQ products for blast furnace No. 4 after produce 350,000 tpy of rebar rolling of larger billets in order to 1,300x510x140 mm. automotive applications. rebuiding cooling and lining products. Lech-Stahlwerke, Germany produce up to 1 Mtpy of straight systems. Order for a package of eight EOT and spooled rebars. SAIL Rourkela Steel Plant, India cranes (FEM class A7/M7), each Africa and Middle East MMK Magnitogorsk, Russia Recommissioning of the 1,491-m³ with 15t lifting capacity, to serve Diler Demir Çelik, Turkey Recommissioning of the 1,554-m³ blast furnace No. 1 after the 1.1-Mtpy bar mill. Six-strand billet caster upgrade to Egyptian Steel, Egypt blast furnace No. 1 after rebuiding cooling and lining extend production to SBQ grades. Startup of a MI.DA® Micromill rebuiding cooling and lining systesm. Abinsk Electric Steel, Russia The project includes the complete Danieli for the production of systems. New wire rod line to produce replacement of the equipment 530,000 tpy of rebars. Agha Steel, Pakistan up to 500,000-tpy of commercial installed on the caster curve. Baku Steel Company, Azerbaijan Startup of a steel meltshop and special construction steel MENA Region Startup of a steel meltshop revamped through the complete grades in coils of up to 2,000 kgs. Kardemir Karabük, Turkey Startup of a MI.DA® Micromill upgraded with the installation of a reconstruction of the EAF and Order for a high-tech five- Danieli for the production of 3-strand conticaster and a series installation of a new fume OMK Vyksa Steel Works, Russia strand billet conticaster for high 350,000 tpy of rebars. of technology packages to improve treatment plant. Order for a 500-ktpy seamless added-value SBQ steel grades the level of plant performance. pipe complex for the production for mechanical engineering and Union Chlorine, UAE Hoa Phat Steel, Vietnam of OCTG seamless pipes (Casing automotive applications. Final acceptance of a “greenfield” MKE,Turkey Recommissioning of the 477-m³ and Tubing), Linepipe and plant for production of caustic Startup of a steel meltshop blast furnace Kinh Mon No. 2 Industrial pipes with the range Kroman Çelik, Turkey soda, hydrochloric acid, and supplied on a turnkey after rebuiding cooling and lining of 2” 7/8 to 10” 3/4. based on The modernization project of the sodium hypochlorite, built on a basis to produce up to 120,000 systems. based on the newest FQT process Danieli high-speed wire rod mill turnkey basis. tpy of liquid steel in special technology- and a finishing center, supplied in 2006 aims to increase engineering grades for ingot complete with a heat treatment final product quality and the SMC-Standard Metallurgical casting. line, and Quality Assurance and finishing speed. Company, Nigeria Finishing lines. Startup of a 250,000-tpy Nano meltshop comprised of a 40-t DC EAF, Ladle Furnace, 2-strand conticaster for billets, and the related fume treatment plant.

74 DANIELI YEAR 2018 PLANTMAKING 75 Plant startup and commissioning Plant startup and commissioning — Flat product casting, rolling and strip processing lines — Long product casting and rolling plants

— Seamless pipe mills of the year Main events

Europe Far East Henan Mingtai, China Americas Europe Far East Sichuan Liu He Forging, China Startup of a 1,500-mpm trimming Startup of an innovative rolling voestalpine Stahl, Austria SAIL Rourkela Steel Plant, India line for lighter-gauge strips and for Deacero Ramos Arizpe, Mexico voestalpine Wire Technology, Tokyo Steel, Japan mill for medium round and flat Record startup of a slab caster Recommissioning of the 1,491 m³ intermediate trimming (and Startup of a rolling mill for light Austria Final acceptance of a five-strand bars of stainless and special steels producing top-quality exposed blast furnace No. 1 after slitting up to three strips) of bars and medium sections, as part Official inauguration of the most conticaster for billets and blooms. for supercritical applications. automotive grades. After five rebuiding cooling and lining thicker material up to 2.5 mm of a 1.5-Mtpy minimill. modern wire rod mill in the world. The machine features an utmost weeks, the new caster was already systesm. with a width of 2,650 mm. The mill products meet the flexibility and was conceived to Changcheng S.S., China producing on five shifts, and highest technological standards of cast three sections simultaneously Startup of a bar-in-coil line to during the first 13 weeks covered JSW Tarapur, India Zhongwang Tianjin, China Africa and Middle East the most demanding applications and with different cutting lengths, process up to 300,000 tpy of 20 to almost all the contractual steel Startup of DCR-Double Cold Startup of a 1,500-mpm trimming (e.g. automotive, power at a pace of up to 48 tph per 40-mm-diameter martensitic products. Reduction mill part of a 200,000- line for can stock aluminium strip Alfapipe Ghardaia, Algeria generation) and unconditionally strand. stainless steels bars. tpy tinplate complex. as part of a complex of six Successful commissioning of an meets every Industry 4.0 standard. OCM Kirov, Russia longitudinal cutting lines and 80-in. HSAW welded pipe plant Tokyo Steel, Japan Feng Hsin, Taiwan Official inauguration of one of the Henan Zhongfu Ind. Co., China associated packing line equipment (the first of two lines ordered from SAM, Riva Group, France Successful commissioning of an Final acceptance of a new, high- most advanced rolling mill for Final acceptance of a high-speed Danieli) specifically designed to Final acceptance of two high- 8-laser heads HiProfile PR88300 speed rolling mill to produce copper strip. The four-high mill (1,500 mpm) trimming line for Ton Dong A, Vietnam process high wall thickness pipes speed shears for automatic head gauge, to perform accurate profile 745,000 tpy of quality rebar from produces copper strips up to a aluminium strip with thickness Final Acceptance of a state-of- up to 25.4 mm for gas & oil and tail cropping of 5.0 to 20 mm measurement of large beams and 10 to 36 mm. width of 1,050 mm, at finish ranging from 0.1 to 0.8 mm and the-art two-stand cold reversing transfer systems. wire rod, complete with the Active channels up to 600 mm, at Tokyo thickness ranging from 5 to 0.5 max. width of 2,150 mm. mill and a 180-mpm galvanizing Pinch Rolls package for top- Steel’s Utsunomiya Works. SAIL BSP, India mm. line for top-quality GL coated quality coils. Startup of a high-tech 900,000 Rizhao Steel, China products. Topy Industries, Japan tpy bar and rod mill for carbon Yildiz Demir Çelik, Turkey Final acceptance of a 2-Mtpy Acciaierie di Verona, Italy Startup of a 240,000-tpy K-Spool and engineering steels. Startup of a temper mil, batch continuous pickling line featuring Hoa Phat Steel Sheet, Vietnam Startup of the six-strand billet line operating two horizontal annealing furnaces, and a HDGL the patented Turboflo pickling Startup of a 400,000-tpy cold mill conticaster that will feed the spooler stations producing 1- to Fuco Steel, Vietnam. as part of the 1.5-Mtpy cold mill technology to run stably at 400 complex comprising a push-pull 750,000-tpy high-tech Danieli 3.5-t compact coils of rebar at Startup of a 600,000-tpy rolling complex for pickled/cold rolled/ mpm. pickling line, two reversible cold wire rod mill. coiling speeds of up to 35 mps . mill for wire rod, rebars, and small galvanized and annealed/skin- mill stands, and two hot dip sections. passed coils for high quality Anshan Iron & Steel, China galvanizing lines. applications. Final acceptance for a Multi- Cassette Leveler processing Hoa Sen Group, Vietnam Tezcan, Turkey 4,100-mm wide plates in Startup of a 180,000-tpy hot-dip Startup of the 350,000-tpy hot dip thicknesses from 5 to 70 mm, in a galvanizing line for high-quality galvanizing line No. 3 for CR strip mix of grades that include HSS paint and roofing products. in LC, MC and HSS grades. for construction and military applications.

76 DANIELI YEAR 2018 PLANTMAKING 77 Plant startup and commissioning — Extrusion and forging presses

— Inspection, conditioning and cold finishing lines of the year Main events

Digi&Met: the Center for innovative leadership. The opening was celebrated on October 25, 2018, in a festive ceremony followed by “The Challenges of Innovation” Conference. The new space stimulates creativity and encourages idea and knowledge sharing with an open plan and other features such as standing desks and collaboration areas. With its particular structure and an interesting design it aims to inspire and trigger passion for innovation.

Digi&Met is more than just a concept. It is an idea factory. A forefront of designing solutions for the success of our customers.

Americas Europe Asas, Turkey Far East Startup of a 13-MN extrusion Indalum, Mexico Extrugasa, Spain press equipped with a new billet Ningbo Powerway Alloy Material, Startup of a complete aluminium Startup of a 47-MN extrusion loader to reduce the dead cycle China extrusion plant, including 28-MN press, front-loading type, time. Startup of a 300-mpm chain-track extrusion press, rapid heating equipped with ESED 2 - Energy drawing machine for Cu-alloys billet furnace, and intensive Saving Electrical Drive. JSC Volgograd Steel Works drawn bars. cooling system for automotive “Krasny Oktyabr”, Russia profiles. Metra, Italy Startup of a peeling line equipped Wanchuang, China Startup of a 70-MN revamped with a CTM/PL 250 peeling Startup of a 32-MN extrusion Kaiser Aluminium, USA extrusion press. machine for bars up to 205 mm. press for aluminium alloys. Startup of a 35-MN extrusion press after the revamping of the Nisva, Italy UMMC Tyumen, Russia billet loading area. Startup of a 6-ton chain-track Commisioning of billet drawing machine for high-speed conditioning and bar cold drawing of top-quality special processing facilities part of a engineering steel bars. 550,000-tpy minimill plant for special steel long products.

78 DANIELI YEAR 2018 PLANTMAKING 79 Algerian Qatari Steel (AQS) minimill will produce up to 2 Mtpy of bars and wirerod. For the timely execution of such a complex project Danieli deployed its unique, in-house reliable resources, know-how and “turnkey” capabilities: — More than 320,000 hours of project management, project engineering, detail design and coordination. — Consistently deploying a construction workforce at the site of more than 2,000 skilled workers and supervisors. The full lump-sum turnkey implementation has included 11,959 concrete piles and CFA columns; 140,000 m3 of concrete technological foundations; 25,000 t of steel structures; 3,600 t of piping; and 42,000 t of electromechanical equipment.

80 DANIELI YEAR 2018 PLANTMAKING 81 High-tech slab caster at voestalpine Stahl, Austria. The new CC8 continuous casting machine is a forward-looking facility that produces slabs for HS and ULC steels that meet the highest surface requirements, primarily for applications in the automotive and electrical industries. The startup was impressively fast: after five weeks, the caster was already producing on five shifts, and during the first 13 weeks it covered almost all the contractual steel products. Q-MAP; Q-WIDTH; Q-LEVEL+; Q-COOL; Q-CORE and Q-PULSE; Q-ROBOT and in-mould and strand EMS are just a few of the advanced technological packages incorporated in the new conticaster.

82 DANIELI YEAR 2018 PLANTMAKING 83 The Egyptian Steel MI.DA.- Micromill Danieli No. 2, located in Al Ain Al Sokhna, is a technological twin to the IIC-Plant installed in Beni Suef. The latter was the first MI.DA., boosting plant productivity up to 830,000 tpy. The plant was designed for the world’s highest productivity: 75 tph in a single, endless line. Further to the complete L1/ L2 automation and process control systems, Danieli Automation supplied its Q3MET L3 Manufacturing Execution System, the Q3DMMS Maintenance Management System, and the Q3Intelligence Business Intelligence solution.

84 DANIELI YEAR 2018 PLANTMAKING 85 Control pulpit in a modern wire rod mill. In 2010, Danieli Automation developed the 3Q platform: the first application in the world to be used as a digitalized operator interface and as an operator guide in decision-making.

The digital pulpit, based on 3Q Automation platform provides a comfortable and safe work environment combined with ergonomic and friendly user interfaces.

86 DANIELI YEAR 2018 PLANTMAKING 87 450-ktpy hot-dip galvanizing line at Tosyali Toyo, Turkey. Dedicated to GI production, the line processes CR strip in LC, MC, and HSS grades for automotive products, at speeds of up to 200 mpm, achieving a uniform and low-thickness zinc coating (down to 40 g/m2 each side).

First galvanized coil was produced 1.5 months ahead of schedule; another example of efficiency and expertise that confirms Danieli’s reliability as a fast-track supplier of strip processing lines.

88 DANIELI YEAR 2018 PLANTMAKING 89 Danieli The tradition of innovation since 1813 Steelmaking Division

90 DANIELI YEAR 2018 STEELMAKING 91 Danieli Steelmaking Division

ABS production and sale Steelmaking Division of special steels Executive Board

Acciaierie Bertoli Safau, with its wide range of products (ingots, blooms, CARLA DE COLLE rolled bars, Rotoforged bars, forged bars and coils), in terms of both Chairman dimension and quality, solidified its international position as one of the ALESSANDRO TRIVILLIN most important players in the production of special steels. The continuous CEO product and process innovation, together with its long tradition and experience, guarantee the quality and the value of ABS’ steel. ABS is able FABIO BRUNETTI to satisfy every customers’ request, even those with the most stringent Head of Controlling requirements and is a supplier for several demanding sectors, particularly: FEDERICO BUIATTI Automotive, Mechanical Engineering, Oil & Gas, Wind Energy, Railways, Chief Business Support and Yellow Goods. Officer SALVATORE CATANIA Steelmaking Division Structure HR Director ANDREA CHITTARO ABS Acciaierie Steelmaking Plant (Udine, Italy) Quality Director Bertoli Safau Spa GLADYS CODARINI Chief Operations Officer ABS Sisak doo Steelmaking Plant (Sisak, Croatia) CLAUDIO DUSIO Purchasing Director MIRTA FIOR Qualisteel Srl Cold Finished Bars Production Unit Logistics and Planning (Udine, Italy) Director GIUSEPPE FLABOREA ESW Röhrenwerke Seamless Tubes Rolling Plant Finance & Administration (Eschweiler, Germany) Director GIUSEPPE GIACOMINI Plant Director ABS Centre Research & Development Centre Métallurgique Sarl (Metz, France) STEFANO SCOLARI Chief Business Development Officer ABS Deutschland Sales Agency (Ratingen, Germany) CHIARA TASSIN Chief Information Officer ABS Scandinavia Sales Agency (Oerebro, Sweden) (CIO)

ABS Iberica Sales Agency (Bilbao, Spain)

92 DANIELI YEAR 2018 STEELMAKING 93 Danieli Steelmaking Division Companies

Sales and operating In thousands of euro June 30, 2018 June 30, 2017 results Net revenues 991,274 739,858 Gross operating margin (EBITDA) 121,831 65,403 Depreciation, amortization, and write-downs (59,678) (52,161) Operating income (EBIT) 62,153 13,242 Net financial income/(charges) (476) (1,563) Profit before tax (EBT) 61,677 11,679 Income taxes (17,244) (2,472) Net profit 44,433 9,207

Segment assets 1,134,991 1,009,565 Increase in investments in tangible and intagible assets 43,378 28,352 Segment liabilities 474,027 411,069

Acciaierie Bertoli Safau Spa (ABS) Automotive and Mechanical Engineering sectors showed strong demand, while the volumes of ITALY steel required for Oil&Gas applications remain, in quantitative terms, still far from the records in tonnes The ABS company reported sales and other income expressed in the years 2006/2008. of 928.3 million euro for the period 2017/2018 Extra-EU exports have remained vigorous and (722.6 million euro in 2016/2017) compared with dynamic in all major areas of the world, including approximately 1,163,000 tonnes shipped, with a net the US, despite the introduction of duties by the US profit of 59.5 million euro compared with the previous government. year, which closed with a profit of 17.3 million euro. Regarding plant and infrastructure investments, The steel market showed a good performance in the new Rotary Cutting Machine was installed and financial year 2017/2018 with a positive first half put into production in the Marte Line, which allows and a second half in further growth in both sales and the trimming and cutting to size of Rotoforgia and company margins. Blooming products with an improvement in efficiency The second half of the year showed good volumes and and productivity of the product line. margins both in sales and in the acquisition of orders, The new Galdabini cold-straightening machine has confirming the constancy in production costs and thus been put into service in the Rotoforgia and Blooming projecting a positive trend also for 2018/2019. product finishing service centre. Thanks to a 2,500- In the year under review, the start-up of the new ton press, it is possible to straighten bars with ROTOFORGIA plant was completed, with a complete sections up to 600 mm and weights up to 30 tonnes, “fine-tuning” of the production cycles and flows of the completely automatically without operator intervention. entire production process and obtaining good results In the Luna rolling line, the Bordioni line was started in terms of internal health values in the rolling process, up after its revamping, with the aim of obtaining also on products with larger sections and extremely better performances regarding geometry, binding and challenging characteristics, as currently required by dimensional flexibility of the roll, such as to satisfy the today’s market. most stringent requests of customers in the industry. During fiscal year 2017/2018, the market was The lighting system was upgraded, and the WiFi characterised by a good dynamism in global demand network was installed in a wide-ranging manner, from all segments of interest for ABS. allowing 100% logistical operation even during night The sales policy was directed towards the search for shifts. value through the analysis of the specific needs of the In the field of environmental sustainability, the customer and the conscious search for the optimal expansion of the Fumi 2 plant was also finalised, product-customer mix; this aspect, together with the providing more than double the EAF furnace’s fume positive market trend, influenced the positive growth of extraction capacity compared to the past, placing the average price, which showed an improvement of ABS absolutely in line with best practices and with 20% compared to the previous year. the new standards set by AIA 2016, while doubling its As far as the end markets of use are concerned, the extraction capacity.

94 DANIELI YEAR 2018 STEELMAKING 95 Danieli Steelmaking Division Companies Danieli Steelmaking Division Companies

Thanks to the innovation of production processes, and Qualisteel Srl ABS ESW Röhrenwerke the research conducted by ABS Centre Metallurgique also in collaboration with important end-users, ABS is ITALY GERMANY able to produce thousands of different types of steel and is already working in a perspective of development In the period Qualisteel S.r.l. operated guaranteeing During the 2017/2018 financial year, the company for totally different new products, which will be cold finishing activities on ABS products, completing continued to restructure its production structure in strategic in future years and intended for specific their verticalization: both rolled bars and polished bars order to return to operation as soon as possible with a increasingly growing niche markets. ABS confirms were processed where profitability was higher. positive operating margin. its strategy aimed at supplying high quality finished The company reported sales and other income of Unfortunately, the results are still not satisfying with products, the company’s point of excellence, with the 8.7 million euro for the 2017/2018 financial year, sales of 74.0 million euros and a loss of 10.3 million objective of achieving positive results in the future compared with 7.9 million euro in the 2016/2017 euros. thanks to a continuous diversification of the product financial year, with a break-even result at 30 June However, the market is still receptive, and the planned range created to meet market demand and to acquire 2018. investments are now being completed, as they can be further niches (high profitability) of the same. The company has continued the process of lean started already in the second half of 2018. The order book at 30 June 2018 amounted to manufacturing and creating production efficiency by During the first half of 2018, activities were gradually approximately 525 thousand tonnes, compared improving production logistics to deliver compliant implemented up to nineteen shifts per week to approximately 250 thousand tonnes at 30 June products with greater delivery guarantee and shorter (compared to the previous fifteen shifts), with the sales 2017; this level of orders maintains the company’s packaging times. mix moving towards products with higher added value visibility in the short/medium term and requires due to the quality of the starting material (high-alloy precise production planning, together with flexible steels) or for post-production processing and controls. management in the organisation of work and plants. It is believed that the interventions carried out on Abs Centre Metallurgique (Acm) Sas the plants and on the production, planning will bring good results immediately in the next financial year FRANCE with a decrease in OpEx costs, a better quality of the Abs Sisak products and an increase in production volumes. ACM is based in Metz and represents for the Danieli The installation of the new heat treatment plant directly CROATIA Group a centre of excellence for the research and in the process line will allow a significant reduction study of steel production, covering the entire operating in production costs, with energy savings as well as a The company resumed production in September chain, from the raw material (scrap) to the finished drastic reduction in delivery times. The insertion of a 2017 and during the first half of 2018 progressively product developed according to specific customer cooling box will, in fact, allow a controlled cooling of increased production volumes which, operating in requirements. the pipes managing the temperatures of tempering in three shifts, will stabilise at around 350,000 tonnes A team of twenty engineers and technicians develop the plate, before carrying out the normalization and at the end of 2018. The negative operating result was the research activities through a variety of projects remediation of the same. therefore influenced in general by the non-constant aimed at improving the operation in the processes and The increase in production efficiency, the growth of production, realising at 30 June 2018 a loss of 21.9 / or the quality of the product. the market (both in terms of volumes and prices) and million hrk, equal to 2.9 million euro (loss of 15.0 During the year, the need to find solutions aimed at the widening of the production mix in terms of the size million hrk equal to 2.0 million euro at 30 June 2017). lightening the parts produced by ABS customers, and quality of the tubes sold are at the basis of the The new system of duties and controls applied in the while guaranteeing high mechanical performance, led economic improvements expected for the 2018/2019 EU to prevent dumping by some Ukrainian, and then to the development of a range of completely innovative financial year, which has as its objective the return to Chinese producers first allowed them to operate during bainitic steels specifically designed for specific profit for the company. the year with prices and margins that were once again customer needs. profitable. The 2017/2018 financial year is therefore The research, however, has not only concerned affected by the costs of restarting and the learning products in the strict sense but also numerous curve necessary to operate again in efficiency, while technologies to support the different areas of the the 2018/2019 financial year will be better thanks also company. The tools used were the most varied to a greater depth of vision and better saturation for depending on the needs from image analysis to the production plants. support operators during the work of selection and classification of scrap rather than in the testing of Investments in progress will enable better energy products up to the study of inclusions. management for electric furnaces with the activation The above is just one of many partnerships created of a Danieli’s innovative QONE plant to reduce grid with customers and directly with OEMs in order to disturbances and improve production efficiency improve the service offered in line with the best market (valued around 8 million euro) and other investments trends. to facilitate the increase in production already underway. Joint activities with the local University of Metallurgy continue and have been strengthened thanks to the collaboration between the University itself and the ABS Metallurgical Research Centre (ACM).

96 DANIELI YEAR 2018 STEELMAKING 97 Danieli Steelmaking Division

Sustainability: was done this year: at the end of ABS WINS THE STEELIE AWARD willing to go beyond November Cargnacco Plant has been audit and the BS OHSAS ABS identifies sustainability 18001, the international standard as one of its core values and which provides a framework to a stategic factor for long-term identify, control and decrease the The winners of the 9th Steelie Awards were greater mechanical pressure on the individual growth vision. On a daily basis it risks associated with health and announced at the Annual Dinner of the World Steel pieces than those exercisable by classic rolling works to integrate the social and safety, within the workplace has Association on October 16. mills, ensuring internal health characteristics of the environmental variables in its been renewed, while on 31of May steel at par with forged products. Traditional hot- core business. The technological Qualisteel achived it. In the last Acciaierie Bertoli Safau S.p.A., won the trophy rolled mills achieve a maximum reduction per innovation is the keystone of the fiscal year ABS in collaboration (Steelie) for the Rotoforgia innovative project in the rolling pass of only about 60-70 mm, for each environmental component and it is with Regional helicopter rescue category Innovation of the year! transit of the charge on the section with opposed also strictly related to the people, service (HEMS) has made a cylinders (lacking however, optimal homogeneity in their skills and involvement. helipad pitch for the occasional The new Rotoforge (RF) installed at ABS’ “Linea the heart of the piece). Among the most relevant activities landing because the timeliness Marte” facility is a prototype, the first in the and efficiency of the rescue can Quality In the road map, there are: world, and promises to revolutionize production Rotoforgia allows a higher reduction per rolling become a decisive element in case of forged products through introduction of a pass – up to 200 mm for each transit. The use of illness or accident. Quality Dept, as a part of — Energy Savings. During the continuous production process while overcoming of large rolls and the consequent reduction Customer’s Team, co-operates AF 17/18, the projects promoted the traditional limitations of rolling and forging. It of feeding angles allows for a reduction in the with direct Customers (forging by ABS in accord with GSE are involves use of a series of continuous technologies number of rolling passes required even for heavier / machining companies), OEM numerically doubled involving all in addition to the RF, such as a new walking beam starting products, thereby improving productivity. (Original Equipment Manufacturer) the areas including steel plant, furnace and a new cutting section for continuous Overall, central health internal soundness, and Endusers in developing rolling plant, heat treatment and operation. commonly measured using ultrasound methods solutions which aim to optimize ancillary services. A project we and expressed in FBH (flat bottom hole) of the transformation processes and to particularly care about is the ABS Rotoforgia is a hybrid, which has a similar Rotoforging process is close to 2 mm, typical of improve the properties of steel internal heating project. This production process and characteristics to a rolling forged products. In comparison, rolled products parts, ensuring high customization plant implementation will make it mill through the use of a forge, as it exerts much settle at values of around 10 mm FBH. level and continuous technical possible to heat up office building, support. Same effort is put on canteen and changing rooms re- internal production processes using the thermal effluent of the aiming to ensure high quality at Safety Rotoforgia plant heating furnace. sustainable costs. This means energy-efficiency With regard to emergency and smart use of heat for smart Moreover, this year ABS management, the installation of industry. maintained or renewed these an alarm system throughout the Training & Information certifications: plant has been completed. In — Environment. Today Life Cycle the event of particularly serious Assessments, LCA, provide the Over 11,000 hours of safety — IATF 16949 and UNI EN ISO emergencies, this system signals best framework for assessing the training were organised with 9001 for Quality Management the need to evacuate the buildings. potential environmental impacts the participation of over 3,600 System. For fire prevention purposes, of products that’s why ABS people, meaning that, on average, the installation of specific tags decided to apply this methodology each ABS worker took part in — CE Marking according to the on all fire extinguishers (fire to develope its first project of 3 different courses on health Construction Products Regulation extinguishers, hydrants, etc.) has screening for our production cycle. and safety at work. The figure 305/2011/UE (EN 10025-1). also been completed, allowing The target of this project is to help shows the important effort that monitoring of the outcome of us to identify improvement areas the company makes annually in — American Bureau of Shipping, periodic checks and the state of from the technical, management, order to spread specific technical Bureau Veritas, Det Norske Veritas operation. logistic point of view and to guide skills and promote awareness and Lloyd’s Register approvals for the re-design and re-thinking of among all workers. This year’s marine applications. By information acquired from products and processes, in order courses covered several topics, the analysis of the main causes to minimize their environmental including major accident risk, — TÜV approval according to the of accidents, which highlight the footprint, through optimization use of work equipment such as Pressure Equipment Directive predominance of the behavioural of the consumption of natural forklifts and overhead cranes, use 97/23/EC and AD2000 Merkblatt factor, over the past year ABS resources and waste minimisation, of PPE. The “Alcohol and Work” W0. has launched a project involving within the framework of the programme continues to be active, the managers to investigate the Circular Economy. Kosei Shindo, President, with periodic checks aimed at Representative Director, Nippon Steel And obtained this new certification: issue of individual responsibility, at excluding, for staff assigned to and Sumitomo Metal Corporation — CE Marking according to the the same time establishing good — Health & Safety. Another particular tasks at risk, problems (NSSMC) with Gianpietro Benedetti, Construction Product Regulation operating practices to be shared important step to state that safety relating to alcohol addiction and Member of the Board of Directors, 305/2011/UE ( EN 10343 ). to all staff. is a priority within our organisation the use of drugs. Acciaierie Bertoli Safau S.p.A.

98 DANIELI YEAR 2018 STEELMAKING 99 ABS / A wide range of special steels products ABS 2018 Sales - End Use

Product mix Others End Use. During the last fiscal year ABS consolidated its position in the reference 10% markets, and opened to Ingots up to 130 t others. The shipments slightly Power changed: improving their Generation 9% Forged bars up to 1,000 mm percentage (Mechanical Engineering and the Others) Blooms up to 850 mm or lightly decreased (Power Oil & Gas 10% 39% generation, Oil&Gas and Automotive). Rolled bars up to 500 mm Mechanical Bar in coils up to 60 mm Engineering

Peeled bars up to 300 mm 32% Ground bars up to 160 mm ABS 2018 Seamless tubes up to OD 244 mm Sales AutomotiveGeographical Area

Row Geographical Area. ABS confirms both its good 10% position on the domestic market (55%) and its traditional export activity. The great part of the export goes within European States (35%). 35% Europe Ecogravel® Italy 55% Industrial aggregate from EAF slag recovery, for bituminous conglomerates, cement mixes, and concrete. ABS 2018 Sales- Products Surface finish

As-cast, As-rolled, Shot-blasted, Rough-forged, Forged Peeled-reeled, Rough-turned, Ground 3% Products. The overall volumes delivered during the fiscal year 2017/2018 and produced in the Udine Heat treatments steelmaking plant increased 29% Semis (+6.5%), with an important Shearability annealing quote in hot-rolled products Soft annealing shipments. Isothermal annealing Spheroidizing annealing Normalizing Hardening and tempering Hot rolled 68%

100 DANIELI YEAR 2018 STEELMAKING 101 Danieli Group History

Danieli’s origins date to 1914 C.E.O.- were entrusted with the completed with the construction when Mario and Timo Danieli management of the company. of fully owned and directly founded the Angelini Steelworks The planned expansion of the managed design and production in Brescia, Italy, one of the first company was based on two centers in China, Thailand, companies to use the electric arc guidelines: Vietnam and India, followed furnace for steel making. by Russia, Turkey, and Brazil, In 1929 part of the steelworks — increase the number of all of which were added to was transferred to Buttrio to products offered through the the European plants already manufacture tools for forging purchase of companies considered existing in Italy, Sweden, and plants and auxiliary machines for to be international benchmarks; Germany, guaranteeing the same rolling mills. — internationalization of the excellent quality equipment In 1955, led by Luigi Danieli, the company with the construction of and service produced at Danieli company started designing and plants and engineering offices in Headquarters. manufacturing equipment for the areas forecast for strong growth. steel industry. His idea was to Beginning in 1969, through manufacture more competitive Since then, through the Danieli Automation, the equipment, simplify layouts and acquisition of German company has developed its own maximize the use of automation. (Josef Fröhling), Swedish automation systems, including One of the concepts developed, (Morgårdshammar), British (Davy instrumentation and power the “EAF/Conticaster-Rolling Distington), French (Rotelec), control technologies. mill” production route, has American (Wean Industries, Danieli Automation has grown characterized and contributed to United Engineering), and Dutch considerably in the past 20 years. the successful development of the (Corus Technical Services) In particular, in 2015 they began minimill process, which is widely companies, leaders in their investing in Industry 4.0 and adopted today. specific fields of activity, and the purchased a company specialized In 1982 the company was listed continuous development of the in the use of robots. on the Milan Stock Exchange, acquired process technologies and In 1995 Danieli acquired a and in 1984 Mrs. Cecilia Danieli equipment, Danieli has become a steelmaking company - ABS (who had managed the financial global player in plant making over - which today is among the and administrative departments of the full range of products, from European leaders in engineering the Group since 1977) -who was ore, scrap and treating; to flat, steels production. In addition appointed Chairman- and Mr. long, tubular, forged and extruded to being a profitable business Gianpietro Benedetti (who had products processing; and fume, in itself, it is also used as a been Technological, Commercial water and slag treating. laboratory for metallurgy, and Project execution Director At the end of the 1990s the equipment/processes, and their since 1977) -who was appointed internationalization process was related automation.

Danieli Group Milestones

Danieli’s objective is constant manufacturing, our own process technological improvement. automation, construction, project Danieli is recognized as one management and customer of the most innovative and service. These are the basis of the reliable companies in the Danieli strategy that will allow us metals producing industry. to maintain our leadership and On the right page are shown expand our market share in some of the technological plantmaking in the coming years. milestones Danieli implemented Please visit our website for the through continuous investments complete list of our contribution in innovation, together with to the history of the metals high-quality in-house producing industry.

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