Gamesa Corporacion Tecnologica : The Company submits the 2016 first quarter activity report

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January-March 2016 Results

5 May 2016

A STRONG START TO THE YEAR: COMERCIAL ACTIVITY AND RECORD FIRST-QUARTER VOLUMES, REVENUES AND PROFITABILITY ENDORSE THE FULFILLMENT OF 2016 GUIDANCE

Gamesa Corporación Tecnológica1 achieved strong results at the beginning of 2016, achieving levels of first-quarter activity, revenues and operating and net profitability without precedent in the company's history. This performance, coupled with strong commercial activity, provides assurance of achieving the guidance for 2016, which was brought forward and stepped up with respect to that initially envisaged for the end of the 2015-2017 business plan.

Strong commercial activity was evidenced by the intake of orders for 1,031 MW in the first quarter, 26% more than in the same period of 2015. The order book stood at 3,167 MW, 22% more than at the end of the first quarter of 2015, covering 90% of sales guidance for 20162.

Revenues in the first quarter of 2016 amounted to €1,064 million, 30% more than in Q1 15, and underlying EBIT pre-Adwen totalled €1193 million, equivalent to 81% year-on-year growth and an EBIT margin of 11.1%, i.e. 3.2 percentage points better than in Q1 15. Underlying net profit3 pre-Adwen increased by 82% to €80 million.

This profitable growth was achieved while keeping tight control over working capital, which decreased by 61% year-on-year to 4.1% of revenues4, i.e. over 8 percentage points lower than in the same period of 2015 (12.8%). Control of working capital and focused capex enabled Gamesa to end the first quarter of 2016 with a net cash balance of €194 million.

The creation and consolidation of Adwen, the joint venture with Areva to operate in the offshore business, had a negative impact of €8 million on net profit. Including that impact, net profit amounted to €72 million.

Consolidated key figures Q1 16

• Revenues: €1,064 million (+29.7% y/y)

• Underlying EBIT pre-Adwen3: €119 million (+80.9% y/y)

• Underlying net profit pre-Adwen3: €80 million (+82.2% y/y)

• Net financial debt (NFD)5: -€194 million (-0.3x EBITDA6 )

  o MWe sold: 1,061 MWe (+49.0% y/y)

• Firm order intake: 1,031 MW (+26.1% vs. Q1 15)

Gamesa Corporación Tecnológica ended Q1 15 with €1,064 million in revenues, 30% more than in the same period of 2015, due to strong growth in wind turbine manufacturing activity and sales.

1 Gamesa Corporación Tecnológica engages in wind turbine manufacture, which includes the development, construction and sale of wind farms, as well as operation and maintenance services.

2 Activity volume coverage calculated on the basis of volume guidance for 2016 of 3,800 MWe (activity guidance for 2016: >3,800 MWe).

3 Net profit excludes items amounting to -€8mn in the first quarter of 2016 relating to Adwen (equity method).

Variations with respect to the numbers in the same period of 2015 are calculated by excluding those items in 2016. EBIT and underlying net profit pre-Adwen in the first quarter of 2015 are expressed net of items amounting to €29 million and €18.5 million, respectively.

4 Ratio of working capital to revenues in the last twelve months.

5 Net financial debt means interest-bearing debt, including subsidised loans, derivatives and other current financial liabilities, less other current financial assets and cash.

6Underlying EBITDA pre-Adwen 2016 last twelve months.

Revenues in the Wind Turbine Generator (WTG) division increased by 34% y/y, to €957 million, due to growth in volume and the launch of new products such as the G114-2.0 MW and G114-2.5 MW, as well as taller towers. Growth in volume (1,061 MWe), +49% with respect to the first quarter of 2015, occurred in practically all regions: Europe/RoW, Latin America, US and India. China was the only exception to double- and triple-digit growth, but a recovery is expected in subsequent quarters, to achieve single-digit growth in the full year. The reduction in revenues in China in the first quarter also resulted in a reduction in the category of financial customers and industrial developers, grouped under "Others", while electric utilities and IPPs continue to evidence solid growth.

Revenues from O&M services totalled €108 million, i.e. flat with respect to Q1 15, in line with the stability observed in the post-warranty fleet under maintenance (15 GW).

The growth in sales volume is the result of the strong commercial activity by Gamesa, against a backdrop of extraordinary growth in global demand in 2015, which will be high single-digit in the coming years, excluding those markets where growth was abnormally high in 2015 due to regulatory changes (Germany, the USA and China).

Gamesa's sound competitive position, supported not only by a diversified geographical footprint (presence in 54 countries) but also by an extensive customer base, a portfolio of products and services aimed at maximising the return on wind assets, and a presence throughout the wind value chain, enabled the company to consolidate the rising trend in order intake. Gamesa signed 1,031

MW7 in the first quarter of 2016, 26% more than in the same period of 2015, with the result that order intake in the last twelve months amounted to 4.1 GW, bringing the book-to-bill ratio8 to

1.16x. The order book as of 31 March 2016 stood at 3,167 MW, 22% more than at the end of March 2015, and covered 90% of sales guidance for 20169, 13 percentage points more than at the end of March 2015 for completion in 2015 (3,180 MWe).

7 Firm orders and confirmation of framework agreements for delivery in the current and subsequent years. Includes orders signed in Q116 (660 MW) that were announced individually in Q2 16.

8 Book-to-bill ratio (MWe) in the last twelve months.

9 Coverage calculated on the basis of volume guidance for 2016: >3,800 MWe

Order intake in the period included a strong contribution from new generations of products, the G114 2.0-2.5 MW, whose contribution rose from 20% of order intake in the first quarter of 2015 to 45% in the same period of 2016. Also in geographical terms, Gamesa retains its leading position in developing markets, with strong growth in orders received from India, Latin America, and China, as well as the US.

In this context of growing activity, Gamesa remained focused on controlling structural costs so as to maintain a low break-even point. As a result, Q1 2016 structural expenses10 amounted to 7.9% of revenues, i.e. within the objective set in the business plan 2015-2017.

Control of fixed costs, together with ongoing optimisation of variable costs, has enabled Gamesa to offset a lower relative contribution to group revenues from O&M which enjoys higher margin than the manufacturing division, and steadily increase total operating profitability. Additionally, during the first quarter of 2016, profitability was boosted by a favourable scope of projects. Meanwhile, performance by the currencies in which Gamesa operates had a negative exchange rate impact of 0.4 percentage points, in line with the 2016E guidance (± 0.5% pp). As a result, Gamesa ended the first quarter of 2016 with an underlying EBIT margin (pre-Adwen) of 11.1%, over three percentage points (+3.2

pp) higher than in the same period of 201511, while underlying EBIT (pre-Adwen) amounted to

€119 million, 81% more than in the same period of 2015.

10 Fixed expenses excluding depreciation and amortisation.

11EBIT and EBIT margin in 2015 excluding non-recurring impact of capital gains from the creation of the Adwen joint venture, which amounted to €29 million in Q1 15 (no impact at EBIT level in the remainder of

2015).