INTERIM FINANCIAL REPORT OF ANSALDO STS GROUP AS OF 30 JUNE 2018 ANSALDO STS S.p.A. Registered office in Genoa, Via P. Mantovani 3-5 Share capital paid up Euro 100,000,000 Genoa Business and Trade Registry - Tax ID 01371160662 - 1 - CONTENTS Company Bodies and Committees ............................................................................................................... 4 Directors’ report as at 30 June 2018............................................................................................................ 5 Introduction................................................................................................................................................. 5 Key performance indicators of the Ansaldo STS Group................................................................................ 5 Consolidated Financial Position................................................................................................................. 11 Reconciliation between the profit for the period and the shareholders’ equity of the Parent Company and the Group ....................................................................................................................................................... 13 Composition of “non-GAAP” alternative performance indicators and other indicators ................................ 14 Alternative “non-GAAP” performance indicators....................................................................................... 14 Other indicators no GAAP......................................................................................................................... 15 Related-party transactions.......................................................................................................................... 16 Report on operations.................................................................................................................................. 17 Market and Business scenario.................................................................................................................. 17 Business Performance ............................................................................................................................. 20 Significant transactions during the period and events after 30 June 2018 ....................................................... 26 Research and development ........................................................................................................................... 27 Human resources and Organisation............................................................................................................... 29 Ansaldo STS ............................................................................................................................................. 29 Headcount as at 30 June 2018.................................................................................................................... 30 Financial Disclosure..................................................................................................................................... 31 Corporate governance and ownership structure pursuant to Article 123-bis of Legislative decree No. 58 of 24 February 1998 and subsequent amendments and additions (CONSOLIDATED FINANCE LAW) ... 32 Outlook ....................................................................................................................................................... 36 Condensed interim consolidated financial statements as at and for the six months ended 30 June 2018. 37 1 Financial statements........................................................................................................................ 38 1.1 Consolidated income statement....................................................................................................... 38 1.2 Consolidated statement of other comprehensive income .................................................................. 39 1.3 Consolidated statement of financial position.................................................................................... 40 1.4 Consolidated statement of cash flows .............................................................................................. 41 1.5 Consolidated statement of changes in equity.................................................................................... 42 2 Notes to the condensed interim consolidated financial statements as at 30 June 2018 ....................... 43 2.1 General information........................................................................................................................ 43 2.2 Basis of consolidation..................................................................................................................... 44 2.3 Consolidation Scope ....................................................................................................................... 48 2.4 Exchange rates adopted................................................................................................................... 50 3 Segment reporting........................................................................................................................... 51 4 Notes to the consolidated statement of financial position ................................................................. 52 4.1 Related-party transactions............................................................................................................... 52 4.2 Intangible assets ............................................................................................................................. 56 4.3 Property, plant and equipment......................................................................................................... 57 4.4 Equity investments ......................................................................................................................... 57 4.5 Non-current receivables and other assets ......................................................................................... 59 4.6 Inventories...................................................................................................................................... 60 4.7 Assets and Liabilities from contracts............................................................................................... 60 4.8 Trade and financial receivables ....................................................................................................... 61 4.9 Tax receivables and payables ......................................................................................................... 62 4.10 Other current assets........................................................................................................................ 63 4.11 Cash and cash equivalents.............................................................................................................. 64 4.12 Share capital.................................................................................................................................. 64 4.13 Retained earnings .......................................................................................................................... 65 4.14 Other reserves................................................................................................................................ 65 4.15 Equity attributable to non-controlling interests ............................................................................... 67 4.16 Financial payables ......................................................................................................................... 67 4.17 Provisions for risks, charges and contingent liabilities ..................................................................... 69 4.18 Employee benefits ......................................................................................................................... 70 4.19 Other current and non-current liabilities .......................................................................................... 71 4.20 Trade payables................................................................................................................................ 72 4.21 Guarantees and other commitments................................................................................................ 72 5 Notes to the consolidated income statement..................................................................................... 73 5.1 Impact of related-party transactions on profit or loss....................................................................... 73 - 2 - 5.2 Revenues from contracts with customers......................................................................................... 75 5.3 Other operating income.................................................................................................................. 75 5.4 Purchases and services................................................................................................................... 76 5.5 Personnel costs .............................................................................................................................. 76 5.6 Amortisation, depreciation and impairment losses .......................................................................... 77 5.7 Other operating expenses ............................................................................................................... 77 5.8 Internal work capitalised...............................................................................................................