Dear shareholders,

2016 has been a great year for our Group: for the third year running, our results have met and in some cases exceeded the very ambitious targets we had set ourselves.

Over the last three years, we have seen organic growth and profitability above the sector average. Our ability to select those projects with the best profit/risk ratio is one of the key factors underpinning our 2016-2019 business plan presented in London in May 2016. Our acquisition of Lane Construction in the US, which took place towards the end of 2015/start of 2016, was a key contributor to our progress and will allow us to capitalise on opportunities in the US market as a local operator.

We have continued our ongoing transformation from a privately-owned construction company to a global multinational, leader in the large infrastructures sector. Three years ago, we defined our vision: to become a pure player in the infrastructure sector, a market leader for large complex works and the most geographically diversified group in the world. The market has increasingly acknowledged our progress with the Group ranked number one in the water purification sector for the fourth year running (ENR no.1 ranking) and in the US roads sector with Lane (ENR no. 1 ranking).

2016 has been a very difficult year in economic and geopolitical terms. The global growth rate was around 2.3% while that of the advanced economies was 1.6%. The emerging countries' development continued to be held back by the widespread political instability.

Against this backdrop, the construction market is increasingly seen as an economic driver and investments in infrastructure viewed as a boost to economic recovery. Many countries are moving in this direction, first and foremost, the US, whose new administration has announced a USD1 trillion investment plan.

The Group's flexible business model has allowed it to grow and avail of the best market opportunities. Our aim is to build up our presence in strongly growing areas like the US and Australia, while we have maintained our stronghold in the Arab countries and confirmed our footprint in those areas where we have traditionally had a base, such as the more stable African countries.

We will also continue to focus on those projects that span the global mega trends characterising our sector: renewable energy, megacities, sustainable mobility, strengthening our position in these areas, especially the construction of metros and railways as well as wastewater treatment projects.

2016 has been one of the most important years in the Group's history in terms of the delivery of completed projects and acquisition of new ones: we delivered and opened the new Panama Canal, perhaps one of the most complicated infrastructures ever built and which will generate total income of USD5 billion for Panama when it is fully operational.

In December, we delivered the GIBE III dam in Ethiopia, which is currently the highest RCC dam in the world. This project worth an approximate €1.5 billion has confirmed the Group's global leadership in the water management sector.

Another project we are very proud of is the Stavros Niarchos Foundation's Cultural Centre in Athens, a €600 million project designed by Renzo Piano. It obtained the Platinum certification from the LEED (Leadership in Energy and Environmental Design) Programme, acknowledging its compliance with strict environmental sustainability criteria which, together with its architectural complexity, make it unique.

We also commenced work on a very strategic mobility project in Europe during the year: the Brenner tunnel, which will become one of the core transport corridors of the trans-European transport network (TEN-T) and the longest underground railway line in the world.

The Group acquired many new projects in 2016. The main ones include the Rogun hydroelectric project in Tajikistan worth €1.8 billion and involving construction of the tallest dam in the world; the Koysha dam in Ethiopia worth €2.5 billion, the Perth metro in Australia for €790 million and the construction of a residential urban area in Kuwait city, as part of the larger South Al Mutlaa Housing project for €467 million.

Lane was awarded several projects in the US, including the Purple Line Transit System in Maryland (Lane's share exceeds €600 million) and the Interstate 70 in Pennsylvania. At the start of 2017, it also acquired additional projects, such as extension of the 395 Express Lanes in Virginia and the important expansion of the Al Maktoum Airport in the United Arab Emirates (once completed, it is expected to become the largest airport in the world in terms of its size and passenger capacity by 2050).

The Lane acquisition has been a key lever to allow the Group's growth in the US, which is its most strategic market according to the next three-year business plan. The results have already been very satisfactory with Lane increasing its order backlog to €2.5 billion in 2016. Merging Salini Impregilo's and Lane's skills will enable them to exploit the best opportunities on the US market, partly thanks to a marketing campaign for Lane's strategic repositioning to cover not only the roads and highways sector but also the dams, metro and railway sectors.

The Group's ability to win and deliver projects and its sound financial management can be seen in its results for the year. Revenue exceeded the target €6.1 billion to come in at €6.124.5 billion. EBITDA jumped 9.5% on 2015 to €560.7 million. New orders of €7.3 billion show the Group's ability to reach and exceed its goals, confirmed by the extraordinary order backlog of €36.9 billion, of which €29.4 billion relates to construction contracts.

Strengthening Salini Impregilo’s brand at international level helps consolidate its market leadership. For this reason, it has decided to bolster its reputation by rolling out a marketing campaign on its business culture.

The first important step of this campaign was launched in late 2016 with a conference, "Presente e futuro delle infrastructure nel mondo". At the end of September, Salini Impregilo kickstarted its plan to celebrate the Group's 110 years, involving institutions, investors, opinion leaders and the media and its employees. The event launched the "Beyond - Delivering the Future for the past 110 years" exhibition held at the Triennale di Milan, which was the first time ever that large engineering works were presented as works of art.

The success of these initiatives encouraged the Group to develop a programme for 2017 to launch Lane’s new presence in the US. Events and concerts will be held in Milan, Washington and New York in 2017 to celebrate the 150th anniversary of Arturo Toscanini’s birth, which will draw parallels between Toscanini’s brilliance with that of the Group.

The Group intends to grow in a sustainable manner, which includes its local communities. The Group contributes to local development by setting up schools, providing training, employment and work opportunities for our subcontractors and we also assist our customers to meet the Sustainable Development Goals set by the United Nations.

This growth and transformation process is backed up by the consolidation of internal processes and structures that involve the risk management, quality, health and safety and compliance units. During 2016, we introduced 24 new procedures and related processes, assisted by regular internal communication, to promote the change management process and involve people in the new processes.

Our steady growth over the last few years is a result of our people's contribution, the key strategic asset that sets the Group apart in the services and projects we offer our customers. During 2016, we honed the development paths for employees and started a knowledge-sharing project at group level. Our employee retention plans are flanked by projects to attract the best talent on the market, with special projects such as the International Construction Management masters course at the Milan Polytechnic University and employer branding events in some of the main technical universities around the world.

We can affirm that the Group is well placed to take on future challenges.



Pietro Salini