Company presentation – Full year 2016

SOL Group at a glance• Founded in 1927, is an Italian based multinational company present in 28 countries with more of 3,200 people

employed.

• Two core , separated but integrated and synergic business ar eas: Technical Gas sector (production, applied

research and marketing of pure, medical and industr ial gases) and Home-Care service sector (supply of

medical products and medical assistance services as well as equipment for home care therapy).

• Two recent businesses: Hydro Energy and Biotechnology .• Two recent businesses: Hydro Energy and Biotechnology .

• Strong results and sound balance sheet:

• Over 703 millions € of Total Group revenues in FY2016 (+4.3% FY2015);

• Over 52% of international revenues in 2016 (vs 23.7% in 2000 )

• 6.0% sales CAGR in the last 10 years;

• 23.8% of EBITDA margin in 2016;

• 0.473 of Debt/Equity ratio;

• Dividend policy: 29% average dividend pay out ratio over the last 10 yea rs.

2

SOL Group – Geographic Presence

SOL Group is presentin 28 countries

3

The Technical Gases Business

4

A complete range of industrial gas (both atmospheric and non-atmospheric):medicinal, pure and special gases.

The Technical Gases Business

� Oxygen� Nitrogen� Argon� Hydrogen� Carbon dioxide� Acetylene

Production and distribution of Gases

SOL Group operates in the technical gases business througho ut the brand SOL

� Ultra high purity gases

� Medical gases� Gaseous

helium� Liquid helium

� Electronics gases

� Ammonia� Combustible

gases

Research, design, and construction of:• Industrial gas production facilities,• Plant and equipment for gas utilization• Services and consultancy

Acetylene� Nitrous oxide� Gas mixtures

� Equipment for medical applications� Equipment for cryogenic applications� Deep freezing tunnels� Oxygen burners� Ozonisers

Supply of plants, equipments, services and consulta ncy

Liquid helium� Refrigerating

gases

� Medical air plants� On-site plants� Welding machines

and equipment

5

Technical Gases BusinessTechnical gases business (M€)

FY2016 FY2015 YoY

Sales 373 364 + 2.6%

EBITDA 76 68 + 12.2%

EBITDA % 20.3% 18.6% + 1.7%

Investments 57 46 + 25.0%

SOL Group 2016 Total revenues

Technical Gases48.9%

• In 2016 the division invested over the

15% of its revenues.

• 2.8% sales CAGR over the last 10 ys.

282,5296,3

313,5296,3

325,1

363,6373,1

341,8351,7

340,6 344,9

180

230

280

330

380

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mil

lions

Eu

ro

10 years Sales in Technical Gases 2006 - 2016

6

Market characteristics

• Resilient and growing market

• Margin protected thanks to high

entry barriers

Technical Gases business

SOL

• High diversification of sales area :

• More than 50,000 clients served;

• More than 90 different

applications for technical gases

• Long term contracts with customers:

Gas pipeline: up to 15 years;• Limited economic cycle demand

dependence of each sales area

• Broad variety and diversification

of end-markets and applications

• Medium/long term contracts

• Local presence as a key factor

Resilience + Growth + Demand stability + Low risk l evel

• Gas pipeline: up to 15 years;

• Compressed gases: up to 5

years;

• Cryogenic liquid gases: up to 3

years

• Strong local presence :

• 25 countries, 38 primary

transformation plants, 56

secondary transformation plants.

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• The uses of specialty gases are expanding in many different context. The market need

for maximum accuracy finds its answer in the world of gases:

• Universities and research centers : highly purified gas carriers for gas

chromatography, calibration equipment and gaseous compounds used as

Technical Gases Business

Specialty and medicinal gases and services

chromatography, calibration equipment and gaseous compounds used as

precursors for chemical synthesis;

• Chemical and pharmaceutical carrier gases and calibration gases in many

activities related to process control;

• Hospitals: medicinal gases for pharmaceutical use, pure products and mixtures

for laboratory and analytical activities as a support to diagnostic processes,

cryomangement services;

• High-tech industry sectors (such as electronics, automotive and renewable

energies) where the use of gases is vital to the innovation of production

processes.

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Primary Production Sites (ASU, …)

• 39 primary production sites :

HYDROGEN - H2

CARBON DIOXYDE - CO2

ACETYLENE - C2H2

NITROUS OXYDE - N2O

AIR SEPARATION / LIQUEFACTION - OXYGEN, NITROGEN, AR GON

India

EIRE

• 39 primary production sites :

units that produce gases

from row materials (electric

energy, atmospheric air,

natural gas, calcium carbide

and ammonium nitrate).

• Max reach-in area is 400 km.

9

Morocco

Filling Stations

• 56 secondary transformation sites

(filling station): units that are

dedicated to filling activity, storage

and distribution of gas in general.

Moreover they produce ultra high

purity gases and gas mixtures.

• Max reach-in area is

150km.

The company

established a 50%

joint venture with an

important Indian

partner (that has 25%

of CO2 market share)

for the production and

distribution of

technical gases.EIRE

150km.

10

SOL owns a company

in Morocco for the

production and

distribution of

technical gases.

Morocco

The Home Care Business

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The Home Care Business

• In the second half of the eighties, SOL seized a new market div ersification opportunity by

entering into the Home-Care service sector, synergical with the technical gas sector.

• The Group works through the VIVISOL Group, which supplies technologically advanced home

care services to patients for the treatment of chronic patho logies.

• VIVISOL manages the complete patient care from the delivery of medic al equipment and drugs,

performed by specialized home care professionals, to the pro vision of qualified medical and

nursing services, as well as tele-monitoring services and emergency management .nursing services, as well as tele-monitoring services and emergency management .

• The company operates in 12 leading

countries in Europe, in Brazil and

Turkey, with over 60 offices employing

over 1.600 employees and serving more

than 350.000 patients daily.

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0% 20% 40% 60% 80% 100%

2016

2000

1990

1980

49%

80%

98%

100%

51%

20%

2%

0%

Technical Gases Home care

Home Care Business

Home care respiratory assistance

Other home care assistance

Respiratory home-care services concern the home delivery t opatients of oxygen or enriched air and other services such asventilation, diagnosis of pulmonary pathologies and thera pyof respiratory disorders.

� Long term oxygen therapy

� Mechanical ventilation therapy

� Assistance to patients undergoing oxygen therapy during travels ( VIVITRAVEL)

� Diagnosis and treatment of sleep disorder conditions

Home care equipment

The other home-care services include telemedicine service s,artificial nutrition, integrated home-care service in therespiratory framework and in monitoring child respiratorydisorders.

VIVISOL markets also equipment intended for the diagnosisand therapy of the above-mentioned pathologies and itscustomers include hospitals, pharmacists, laboratories,clinics and doctors.

� Home and traveling oxygen therapy equipments

� Ventilation equipment

� Instruments and accessories for diagnosis and aerosol treatment

� Home aids

� Home care artificial nutrition

� Integrated home care services

� Remote monitoring and diagnosis of respiration conditions

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Home Care Business

Hone Care business

(M€)

FY2016 FY2015 YoY

Sales 360 340 + 5.9%

EBITDA 92 81 + 13.7%

EBITDA % 25.5% 23.7% + 1.7%

Investments 41 39 + 5.7%

SOL Group 2016 Total revenues

Home Care51,1 %

• VIVISOL was able to grow 6%

in 2016, with an EBITDA

margin higher than 25%.

• The Group is continuing to

invest significantly in this

business.

121,9142,7

160,3182,5

213,4

339,8360,0

281,2312,8

238,8264,9

0

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mil

lion

s Eu

ro

10 years Sales in Home Care 2006 - 2016

14

Home Care Business

Key growth drivers:

• Aging population – demographics

• Restructuring of Health Care Systems through

de-hospitalization and home care

• Developments in portable medical technologies

• Better quality of life for Patients at home

• Increasing of respiratory and chronic pathologies

15

Home Care - VIVISOL branchesVIVISOL is present in 12

leading countries in

Europe, Brazil and Turkey

with over 60 branches.

Turkey

16

Home Care Business

VIVISOL Belgium - Lessines

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The Hydro Energy Business

18 18

• Leveraging on its core business

development in the Eastern Europe , SOL

entered into the Hydro-Energy sector.

• The industrial gas sector, is one of the

most energy intensive one. This

characteristic supported the Group

decision to invest in the Hydro-Energy

The Hydro Energy Business

sector in order to enjoy synergies with its

Industrial Gases Business.

Currently the company owns and operates 5

hydro-electric power plants in Slovenia

(about 50 Million KWh/year), 2 plants in

Albania (about 25 Million KWh/year); 4

plants in Macedonia (about 35 Million

KWh/year); 4 plants (one is under

construction) in Bosnia (about 6 Million

KWh/year).

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The Biotechnology Business

20 20

• SOL Group is active in supplying biotechnological equipment

and services to hospitals, clinics and laboratories (cryobanks,

cellfactories, cryomanagement, cryotransportation)

• With BIOTECHSOL is active in the area of tissue and stem cells

banking and biological tissues transportation.

The Biotechnology Business

• With the acquisition of the majority of DIATHEVA, SOL Group is

active in drug discovery and drug delivery (recombinant

monoclonal antibodies), molecular diagnostic, GMP produc tion

of recombinant proteins

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400

450

500

550

600

650

700

750

SOL Group: 30 years Deflated Turnover (1986-2016)

2016=703.4 (x1,5)

0

50

100

150

200

250

300

350

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

22

1986= 125.0

1996=219.7 (x1.8)

2006=466.0 (x2.1)

87,497,1 99,4

109,7123,6 130,4 132,2 131,7

142,9 148,4

167,6

22,2%22,7%

21,6%

23,7% 23,8%

22,7%

23,8%23,5%

22,1%22,5% 22,0%

0

20

40

60

80

100

120

140

160

180

Mil

lion

s Eu

ro

15%

20%

25%

30%

% o

n s

ale

s

393,6427,1

460,0 462,6

518,9

555,7583,0 595,4

636,4

674,2703,4

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

Mil

lion

s Eu

ro

SOL Group: consolidated results (2006 – 2016)

EBITDASales

0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

15%

EBITDA % on Sales

35,2

46,051,5 49,9

59,6

80,9

65,661,953,656,559,6

9,0%

10,8%11,2%

10,8%

11,5%

9,7%

9,0%

9,7%

11,5%

9,7%

10,7%

0

10

20

30

40

50

60

70

80

90

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mil

lion

s Eu

ro

0%

2%

4%

6%

8%

10%

12%

% o

n s

ale

s

EBIT % on Sales

0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EBIT Cash Flow

60,9

75,787,6 81,7

92,6 97,0 98,592,4

106,2112,9

127,5

15,5%

17,7%

19,0%

17,7% 17,8%16,9%

18,1%17,5%

15,5%

16,7%16,7%

0

20

40

60

80

100

120

140

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mil

lion

s Eu

ro

0%

5%

10%

15%

20%

% o

n s

ale

s

Cash Flow % on Sales

23

0,120

0,150

0,1100,100 0,120

0,140

0,160

6,5%

7,8%

5,6%

6,3%

5,1%

6,5%

5,1%5,8%

6%

7%

8%

10 years net profit and dividend growth

NET PROFIT DPS - Dividend Yield

0,068

0,081 0,081 0,084

0,0950,1000,100

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

0,000

0,020

0,040

0,060

0,080

0,1004,5%

5,1%4,8%

3,8%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

0%

1%

2%

3%

4%

5%

% o

n s

ale

s

Net profit CAGR + 10.0% DPS CAGR + 8.2%

10Y AVERAGE PAY-OUT RATIO 29%

24

International Expansion

SOL is focused on its international expansion:

• The Group started its operations in

Italy where it currently has 15

primary production sites.300

350

400

10 years sales outside Italy 2006-2016

• In 2016 the Group is present in 28

countries.

• In 2016 the non-domestic sales

exceeded the Italian sales

• (52.9% / 47.1%).

134,0151,1

172,2 186,6217,3

349,3372,1

286,3322,0

246,2272,8

0

50

100

150

200

250

300

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mil

lion

s Eu

ro

25

(Excluded sales in India)

Capital Expenditures (2006-2016)

High annual investments

• The Group every year invest

about 15% of its revenues;

• The Sol business require a high

level of investments for long 13,5%

16,1%

13,7%

12,0%

14,0%

12,6%

14,8%15,2%16,2%

14,7%15,4%

75

100

Mil

lion

s Eu

ro 15%

20%

25%

% o

n s

ale

s

10 years of investments on sales 2006-2016

level of investments for long

term growth options;

• In 2016 almost the 50% of the

Group investments was made

outside Italy.

53,3

69,274,3

63,4 62,1

84,7 85,491,8 94,5

84,7

98,4

12,0%12,6%

0

25

50

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Mil

lion

s Eu

ro

0%

5%

10% % o

n s

ale

s

Capex % on sales

26

Shareholding information and market price

Outstanding Shares

• 90.700.000 ordinary shares

• par value: 0,52

Shareholding Structure

• Fumagalli and Annoni

families 60%

• Main Institutional Investors:

• Tweedy Brown 7,346%

• J O Hambro 5,072%

• Allianz 5,072%Source: Borsa Italiana

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