SAES Getters : First half 2017 consolidated results

PRESS RELEASE

• Record H1 revenues equal to €117.3 million, up by 30.6% compared to €89.8 million in 1H 2016
• Total revenues of the Group equal to €124 million, up by 31.6% compared to €94.2 million in 1H 2016
• Consolidated gross profit equal to €51.6 million, up by 29.1% compared to €40 million in 1H 2016
• Consolidated operating income equal to €20.5 million, significantly increased (+71.6%) compared to €11.9 million in 1H 2016
• Consolidated EBITDA equal to €25.1 million (21.4%) compared to €16.1 million (17.9%) in 1H 2016
• Consolidated net income more than doubled and equal to €11.3 million, compared to €5.5 million in 1H 2016
• Net financial position slightly improved (-€33.6 million compared to -€33.8 million at the end of 2016), despite the payment of dividends (€12.3 million) and the investments, thanks to the significant operating cash flow generation

The Board of Directors of SAES Getters S.p.A., gathered today in Lainate (MI), approved the consolidated results of the first half of 2017 (January 1 - June 30).

"There is a strong satisfaction for the sales that reached their record level and the improvement of operating indicators in the first six months of the year. These results were driven by the organic growth in the sectors of gas purification and of medical devices, in addition to the new activities in the sector of Electronic Devices, from which we expect a further growth in the second half of the year"- Eng. Massimo della Porta, President of SAES Getters S.p.A. said. - "We expect the second semester to be equally strong, despite the turnabout in the euro-dollar exchange rate and the summer seasonality. Our expectations for the new business initiatives remain unchanged, with a significant contribution starting from next year".

In the first half of 2017 the SAES® Group achieved consolidated net revenues equal to €117.3 million, up by 30.6% compared to €89.8 million achieved in the corresponding period of 2016. The exchange rate effect was positive and equal to +3.1%, mainly related to the appreciation of US dollar against the euro in the first part of the semester. The acquisition of Metalvuoto S.p.A., occurred at the end of the previous year, generated sales equal to €7 million in the first half of 2017 (+7.7% is the increase in revenues related to the change of the scope of consolidation). With the same exchange rates and the same scope of consolidation, the organic growth was equal to +19.8%, mainly driven by the gas purification sector (Systems for Gas Purification & Handling Business), by the sector of Nitinol for medical devices (Nitinol for Medical Devices Business) as well as by that of electronic devices (Electronic Devices Business).

1 Total revenues of the Group are achieved by incorporating with the proportional method, instead of the equity method, the joint ventures of the Group, namely Actuator Solutions (50%), SAES RIAL Vacuum S.r.l. (49%) and Flexterra (33.79%).

The strong growth of consolidated revenues enabled the increase (+29.1%) of the consolidated gross profit2, equal to

€51.6 million in the first half of 2017, compared to €40 million in the corresponding period of 2016. The gross margin3 was equal to 44%, slightly down compared to 44.5% in the first half of 2016, due to the dilution following the consolidation of the newly acquired Metalvuoto S.p.A., currently characterized by a different structure of production variable costs compared to that of the traditional perimeter of the Group (namely, higher incidence of costs of raw materials).

By excluding the non-recurring costs for personnel and write-off (total amount of about €0.4 million) related to the already announced future liquidation of the German subsidiary Memry GmbH, the adjusted operating income4 was equal to €20.8 million (or 17.7% of consolidated revenues).

By excluding the non-recurring personnel costs related to the future liquidation of the German subsidiary Memry GmbH (about €0.1 million), the adjusted EBITDA6 was equal to €25.2 million in the first half of 2017, or 21.5% of consolidated revenues.

For further details, please refer to the following sections of this press release.

Relevant events occurred in the first semester of 2017

On January 10, 2017 the company Flexterra Taiwan Co., Ltd., wholly owned by Flexterra, Inc. (USA), was established. The new company is headquartered in Zhubey City (Taiwan).

On January 19, February 10 and March 17, 2017 SAES Nitinol S.r.l. paid three additional tranches (equal to €1 million each) of the total financing of €4.5 million signed on November 28, 2016 in favor of Actuator Solutions GmbH. The last tranche of the financing, equal to €0.5 million, was paid on April 24, 2017. The contract provides for the priority reimbursement of such loan, compared to other loans granted to Actuator Solutions by its shareholders.

On April 7, 2017 SAES Getters S.p.A. signed a new loan agreement with Unicredit S.p.A. for a total amount of €10 million, with a duration of five years (expiring on March 31, 2022), without any pre-amortization period. The contract provides for the repayment of fixed principal amounts on a three-month basis and interests indexed to the three-month Euribor, plus a spread equal to 1%. The loan includes some covenants that are standard for this type of transactions, calculated semiannually on consolidated economic and financial figures.

2 Calculated as the difference between net sales and industrial costs directly and indirectly attributable to the products sold.

3 Calculated as the ratio between gross profit and consolidated revenues.

4 Adjusted operating income is meant to be the operating income itself, further adjusted to exclude items considered as not indicating the current operating performance by the Management. As its calculation is not ruled by the IFRS principles, the method applied by the Group may be not

homogeneous, and so far not comparable, with the ones applied by other Groups.

5 EBITDA is not deemed as an accounting measure under International Financial Reporting Standards (IFRSs); however, we believe that EBITDA is an important parameter for measuring the Group's performance and therefore it is presented as an alternative indicator. Since its calculation is not

regulated by applicable accounting standards, the method applied by the Group may not be homogeneous with the ones adopted by other Groups. EBITDA is calculated as "Earnings before interests, taxes, write-off, depreciation and amortization".

6 Adjusted EBITDA is meant to be the EBITDA itself, further adjusted to exclude items considered as not indicating the current operating

performance by the Management. As its calculation is not ruled by the IFRS principles, the method applied by the Group may be not homogeneous, and so far not comparable, with the ones applied by other Groups.

At the same date, SAES Getters S.p.A. signed an Interest Rate Swap (IRS) contract expiring on March 31, 2022, on the total residual debt of the above-mentioned loan. The contract provides for the exchange of the three-month Euribor, either positive or negative, with a fixed rate of 0%. In case of negative three-month Euribor, the contract provides a floor equal to -1%.

On April 19, 2017 SAES Getters S.p.A. signed an Interest Rate Swap (IRS) contract on the mid-long-term loan of €10 million obtained by Intesa Sanpaolo S.p.A. on December 21, 2016. The IRS contract is applied on 50% of the residual debt outstanding at each repayment date, starting from June 30, 2017 and expiring on December 21, 2022. Such contract provides for the exchange of the six-month Euribor with a fixed rate of 0.16%.

In order to protect the results and the profitability from the fluctuation of the exchange rates, on May 24, 2017 some contracts for the forward sale of US dollar were signed for a total notional value of USD 3.9 million; such contracts provide for an average forward exchange rate equal to 1.1252 against the euro and will be in force for the entire 2017. Similar contracts, for a notional value of JPY 203 million, were underwritten at the same date, with an average forward exchange rate equal to 125.4185 against the euro. Also these contracts will be in force for the entire 2017.

On June 1, 2017 the solidarity contract, applied in the Parent Company's manufacturing unit located at Avezzano, was resolved before its natural expiration date. Please note that, in the first five months of 2017, the application of such contract provided for a decrease in labor costs equal to €0.4 million.

On June 29, 2017 SAES Getters S.p.A. provided an early repayment for both tranches (one of which secured by SACE) of the loan to support advanced R&D projects, signed in June 2015 with EIB (European Investment Bank), The repayment totally amounted to €6 million as principal, in addition to an indemnity fee to EIB equal to €10 thousand and to the payment of a premium of about €76 thousand to SACE. Finally, the related transaction costs, equal to around

€149 thousand, previously divided into installments on the basis of the duration of the loan, were recorded into the income statement.

Changes in the Business structure organization

Following the acquisition of the control of Metalvuoto S.p.A., a significant player in the advanced packaging field, occurred at the end of 2016, a third Business Unit named "Solutions for Advanced Packaging" was established, in order to ensure a better information transparency.

Finally, please note the new segmentation of the Industrial Applications Business Unit and the re-naming of some already existing operating segments, to better comply with the new organizational structure of the Group.

The figures related to 2016 were reclassified on the basis of the new organizational structure, to allow a homogeneous comparison with the current year.

Industrial Applications Business Unit

The trend of the euro against the major foreign currencies led to a positive exchange rate effect equal to +3.1%, net of which revenues organically increased by 26%.

Compared to the first half of 2016, the growth was mainly concentrated in the Systems for Gas Purification & Handling Business (organic variation of +44.2%) thanks to the investments in new semiconductors and displays fabs in Asia (particularly in China, Korea and Taiwan). The Electronic Devices Business also recorded a strong increase (organic growth equal to +77%), thanks to some new advanced productions for telecom market in the manufacturing unit of Avezzano, as well as to higher sales of film getters and traditional ones, also favored by the more and more increasing penetration of the infrared technology for surveillance and industrial applications. Also the Systems for UH Vacuum Business recorded an organic growth (+16.5%), concentrated in the sector of scientific instruments and in that of particle accelerators. Also the Healthcare Diagnostics Business (organic growth of +3.9%), as well as the Sintered Components for Electronic Devices & Lasers Business (organic growth of +3.2%) improved although at a lower rate, thanks to the good penetration in the reference applications market.

On the contrary, the Security & Defense Business showed a decrease compared to the first half of 2016 (organic decrease equal to -25.8%); this business, despite a substantially positive market trend, reflects the currently technological transition from the traditional getter to the miniaturized one.

In line with the previous year, the Light Sources Business (a decrease of -19.9%, now being considered structural and spread over all the geographical areas), penalized by the technological competition of LEDs towards fluorescent lamps, as well as the Thermal Insulation Business (organic decrease equal to -17.7%), suffering from the weakness in the sales of getters for insulation panels for the refrigeration market and of getters for vacuum bottles for the consumer market, recorded a decrease.

The table below shows the revenues in the first half of 2017 related to the various business areas, with evidence of the exchange rate effect and of the organic change compared to the corresponding period of 2016.

Thousands of euro (except %)

Shape Memory Alloys (SMA) Business Unit