THE E&C SCENE – OPPORTUNITIES & CHALLENGES Pierroberto Folgiero, Group CEO Milan ECRI Sponsors Meeting, 6th June 2013

June 2013 1

2 June 2013

Group Overview

Industry Trends

Group Strategy & Risk Management

*overall value of the Habshan 5 project, MT share is 50% **referred to Tecnimont Group

GROUP OVERVIEW: Facts & Figures

Focus on Oil&Gas Petrochemicals Fertilizers

Flexible Business Model offering advanced skills in Licensing, Engineering Services, EP (Engineering & Procurement), EPC (Engineering, Procurement & Construction)

Ø Zero Incident Target Safety Culture US$4.7bn*

The largest gas treatment plant ever awarded in Abu Dhabi (UAE) on a Lump Sum Turn Key (LSTK) basis

3 June 2013

Total Recordable Incident Rate: 0.05** vs 0.38 industry benchmark

Energy & Ventures

Engineering & Construction

Technology & Licensing

GROUP OVERVIEW: Global & Technological Leadership

*management estimate **Research by Primary Consulting Company

in Licensing hydrogen technology (with single train capacity up to 180,000 Nm3/h) and in licensing Sulphur Recovery and Tail Gas Treatment Technology (with design capacity of single train up to 1,500 t/d)

Awards in 2012 Long standing client relationships €2.6bn

Well recognized

position

4

World ranking in EPC onshore Revenues**

+700 Individual Patents

#13

30%

Market share in polyolefins* (#1 worldwide as per capacity installed in the last 6 ys), including a 40% in LDPE (Low Density PolyEthylene)

50%

35%

Market share in licensing urea plants technology (#1 worldwide)*

Market share in licensing urea granulation technology (#2 worldwide)*

June 2013

5

EXTENSIVE INTERNATIONAL PRESENCE: Our Employees

About 4,500 employees as of December 31, 2012, half of which are employed outside Italy

Presence in about 30 countries with 45 operating companies

EMPLOYEES BY COMPETENCE At 31/12/12

Overall 4,470

Engineering 2,255

Operations 933

Other Technical area 422

Commercial 123

Staff 737

EMPLOYEES BY COUNTRY At 31/12/12

Total 4,470

Italy 2,037

Rest of Europe 487

Asia 1,898

South America 46

Africa 2

Group presence

June 2013

6 June 2013

Group Overview

Industry Trends

Group Strategy & Risk Management

Source: Source BP Energy Outlook 2030, year 2012

Btoe

GAS DEMAND

+2,6%

• Stable expected growth for Gas demand

• Asia Pacific and Middle East driving growth, but Europe and Eurasia will continue to be the main consuming areas

GAS LIQUEFACTION DEMAND

Bcm

•Gas liquefaction to grow faster than gas consumption due to international price differences in gas supply and to the higher flexibility granted by LNG

GAS DEMAND

Gas demand growing fast with a shift towards Asia Pacific and Middle East

7 June 2013

Source: Analysis by a Primary Consulting Company based on market reports (Wood Mackenzie; GDF Suez; FACTS; Morgan Stanley; Platts; Macquarie)

Mtons/year

FERTILIZERS DEMAND PETROCHEMICALS DEMAND

+9,2%

Industrial petrochemicals demand acceleration will be initially driven by higher operating rates in existing plants and limited capacity growth

Shale gas expected to impact the geographical mix thanks to lower feedstock cost

Global demand for fertilizers expected to grow at a slow but steady rate

High expected growth in South East Asia will lead to high capacity investment in the area

Mtons/year +1,7%

+4,6%

FERTILIZER AND PETROCHEMICALS DEMAND

Demand for Fertilizers to Grow Steadily, while Demand for Petrochemicals to Firmly Recover from Recent Slowdown

8 June 2013

Source: Market reports, IFA - data elaborated by a Primary Consulting Company

Source: Deutsche Bank Petrochemicals Yearbook 2011 e JP Morgan 2011 – other Market reports – data elaborated by a Primary Consulting Company

MARKET OUTLOOK

Addressable Market for Maire Tecnimont by Geography (2013-2017)

North America

$131bn

South America

$69bn

Middle East

$95bn

SE Asia $58bn

India $24bn

Australia $90bn Africa $136bn

Europe $27bn

CIS & Turkey

$81bn

9 June 2013

Source: Public sources, analyst / industry reports, O&G journal, company websites and IFA (Ammonia / Urea), elaborated by a Primary Consulting Company :

10 June 2013

Group Overview

Industry Trends

Group Strategy & Risk Management

STRATEGIC INITIATIVES DRIVING CHANGE

Strategic Priorities

Enhance and Develop Technology Driven Business

Reduce EPC Risk Positioning

Develop Engineering Services Revenues

Expand Geographic Footprint

Align Organization and pursue Group Synergies

“One Company”

1

2

3 4

5

11 June 2013

1) Enhance and develop Technology driven business

Grow license driven model and extend Fertilizer offer to technology engineering and critical items procurement. Pursuit of

small equity investments on case by case basis, initially in the Fertilizer sector.

2) Reduce EPC risk positioning

Greater selectivity of projects and well calculated construction risk profile. Focus on value at the expense of volume.

Alliances and consortia with construction companies (versus traditional subcontractor schemes). Cooperation with large

scale players based upon distinctive capabilities

3) Develop Engineering Services revenues

Technology–driven commercial proposition differentiates the company from traditional generalist market players. Increased

emphasis on engineering services to compensate, at EBITDA level, for decreasing EPC volumes

4) Expand geographic footprint

Enter untapped markets, taking into account local content requirements and leveraging on leading technological capabilities

5) Align organization and pursue Group synergies

‘One Company’ initiative to increase commercial effectiveness, review of organizational structure and process optimization

to lower G&A expenses

“centralize what you must, but decentralize what you can”

Roadmap for the regionalization of Commercial Presence has started with the first countries: Sud America and Russia&CIS

STRATEGIC INITIATIVES DRIVING CHANGE

12 June 2013

DOWNSTREAM BUSINESS OVERVIEW

PRODUCTS

TYPICAL VOLUMES*

MARGINS*

RISK

*Illustrative

Maire Tecnimont De-Risking Strategy: more projects with less risks

DIRECT LICENSE PDP € 1-10m VERY HIGH DOUBLE DIGIT LOW

BASIC € 1-10m HIGH DOUBLE DIGIT LOW

FEED € 4-15m HIGH DOUBLE DIGIT LOW

DETAILED ENGINEERING SERVICES € 10-40m MID DOUBLE DIGIT LOW

EP € 50-250m LOW DOUBLE DIGIT MEDIUM

EPC € 0.3-4bn SINGLE DIGIT HIGH

LICENSING PROCESS DESIGN

EXECUTION DRIVEN TECHNOLOGY DRIVEN

ENGINEERING PROCUREMENT CONSTRUCTION

SECTOR VALUE CHAIN

13 June 2013

GOLDEN RULES

LESSONS LEARNED: Latin America

Multiple exceptional events of great magnitude occurred simultaneously

Stronger criteria for “exceptional event” detection and risk management enhancement

Several large projects in the same country and with similar risk profile

New portfolio management strategies (higher granularity of projects, backlog diversification, increased geographical spread)

Regionalization of the organization aimed at achieving Client proximity and local sub-contractor integration

Difficult interaction with local content both in term of Client relationship and local sub-contractor knowledge

Rigid rules of engagement on execution risks based upon analytical calculation and remuneration of construction risks. Focus on EP contractual scheme

Weak quantification of execution risks since the commercial phase

SHORTCOMINGS

14 June 2013

LatAm Plants are all in operation in accordance with the performance requirements

Enterprise Risk Management (ERM) to gradually and structurally integrate the ERM approach with the key processes and Group performance management.

The Enterprise Risk Management is aimed at identifying, assessing, monitoring, mitigating and managing the company’s risks & opportunities (portfolio approach), leveraging also on a strong interaction with the Project Risk Management processes and procedures.

ENTERPRISE RISK MANAGEMENT

15 June 2013

• Strategy and processes

• Organization and Accountability

• Methodologies

• Controls and Reporting

• Data & Systems

ERM infrastructure

• Board, to supervise risks with a structured approach

• Top Management to assess the strength/weaknesses of the Business Plan

• Middle Management to fast respond to deviations from targets

Supports

16 June 2013

ENTERPRISE AND PROJECT RISK MANAGEMENT

» Enterprise-wide view based on common methodology

» Cross risks (e.g. financial risks, industry trends, Business Partners, supply chain, etc.)

» Single project view

» Focus on project risk events (e.g. Physical/Site)

Based on a value-driven approach, the Enterprise Risk Management (ERM) focuses on risks “that really matter” at enterprise level, providing a consolidated and shared picture of top risks that could affect Group’s strategic objectives and expected results.

The ERM integrates the project risk management view by addressing both relevant specific projects risks as well as cross-company risks

NOT OVERLAPPING BUT INTEGRATION

FOCUS

Project 1

Project 2

Project 3

Oil & Gas

Project 1

Project 2

…

PetChem

…

Power …

MAIRE TECNIMONT

Project Risk Management

Enterprise Risk Management

Strategic Plan

17

POLITICAL & LAW

INVESTMENT

PROFITABILITY

SITE ACCESSIBILITY

PERMITS OBTAINMENT

LICENCE/TECHNOLOGY

FEED QUALITY

ESTIMATING

PROJECT DESIGN

PROCUREMENT

& SHIPPING

EXECUTION

QUALITY

HUMAN RESOURCES

PERFORMANCE

HSE

CLIENT TECHNICAL STANDARDS

LOCAL REGULATIONS

SUBSURFACE CONDITIONS

INFLATION

SECURITY

EXCHANGE RATES

Each risk should be allocated to the party best positioned and capable to manage it

CLIENT EPC CONTRACTOR

PROJECT RISK MANAGEMENT

June 2013

PROJECT RISK MANAGEMENT

Proposal preparation Proposal review & submission Execution Phase

Preparation of Risk Register in accordance with identified risk categories in order to evaluate risk status

Divisional risk review: • Ownership assignment • Risk Reduction: mitigation,

transfer, acceptance, avoidance

Contingency allocation: • Montecarlo simulation to

calculate the appropriate level of contingency

Risk Committee: • Review risk evaluation &

contingency cover

CEO approval

Proposal Submission

Quarterly risk reassessment meeting: • Ownership assignment • Risk Reduction • Montecarlo simulation to evaluate project

contingency is sufficient to cover the risks during remaining duration of project

Close out report: • Major events occurred during

project execution with impact on contingency

• Actions taken resulting in risk reduction

• Lessons learned

Risk Reduction

RIS

K L

EVEL

t Contingency covers 75% of remaining risk

100%

18 June 2013