ANNUAL REPORT 2015

Production sites

TRACTORS

ENGINES

COMBINE HARVESTERS

GRAPES AND OLIVES HARVESTERS

LINSHU (CN)

SUIHUA (CN)

TREVIGLIO (I)

BANDIRMA (TR)

LAUINGEN (D)

CHÂTEAUBERNARD (F)

RANIPET (IND)ŽUPANJA (HR)

Key figures

Key financial indicators(Thousand euros)

2015 2014

Revenue 1,390,175 1,210,214

EBITDA 125,354 110,404

EBIT 80,418 74,547

Net profit 49,835 40,627

Cash flow from operating activities (net profit + amortisation/depreciation) 89,410 72,191

Net financial position (114,221) (127,849)

Equity 334,687 287,274

Earnings per share (EUR) 1.56 1.27

Key performance indicators(As % of revenue)

2015 2014

Gross margin 19.98 20.81

EBITDA 9.02 9.12

EBIT 5.78 6.16

Net profit 3.58 3.36

Cost of sales 80.02 79.19

Commercial expenses 8.21 8.76

General and administrative expenses 3.34 3.09

Research and Development expenses (excluding capitalisation) 3.55 3.79

Cash flow from operating activities (net profit + amortisation/depreciation) 6.43 5.97

Working capital* 14.59 19.25

Days of sales outstanding 57 52

Inventory turnover 3.1 2.4

Revenue per headcount (EUR/000) 334.58 294.10

Staff costs (EUR/000) 159,543 152,455

Staff costs per headcount (EUR/000) 38.29 35.16

Headcount as of 31-12-2015 4,167 4,336

* trade receivables + inventory - trade payables

Key

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ANNUAL REPORT 2015

Holding companies Production and sales companies Sales companies

SAME DEUTZ-FAHRŽETELICE

(CROATIA)

SHANDONG CHANGLINDEUTZ-FAHR*

(CHINA)

GRÉGOIRE

(FRANCE)

SAME DEUTZ-FAHR TRAKTÖR

SANAYİ VE TİCARET(TURKEY)

SDF

SAME DEUTZ-FAHR RUSSIA**(RUSSIA)

SAME DEUTZ-FAHRPORTUGAL

(PORTUGAL)

SAME DEUTZ-FAHRIBÉRICA(SPAIN)

SAME DEUTZ-FAHRFRANCE

(FRANCE)

SAME DEUTZ-FAHRSCHWEIZ

(SWITZERLAND)

SAME DEUTZ-FAHRPOLSKA

(POLAND)

SAME DEUTZ-FAHRDEUTSCHLAND

(GERMANY)

SAME DEUTZ-FAHRINDIA

(INDIA)

SAME DEUTZ-FAHRITALIA

(ITALY)

SAME DEUTZ-FAHRUK

(GREAT BRITAIN)

SAME DEUTZ-FAHRBENELUX

(NETHERLANDS)

SAME DEUTZ-FAHRNORTH AMERICA

(USA)

SUPERVISORY BOARD

Vittorio Carozza Chairman

Francesco Carozza Vice Chairman

Luisella Cassani Carozza

Fabio Gaggini

Antonio Ortolani

Edoardo Spezzotti

MANAGEMENT BOARD

Aldo CarozzaChairman

Lodovico BussolatiChief Executive Officer

Filippo Simonetti

INDEPENDENT AUDITORS Deloitte & Touche S.p.A.

** joint venture at 50%.* joint venture at 95%.

Our missionis to supply customers worldwide with tractors, diesel engines and agricultural equipment of acknowledged reliability, quality and performance. Our strategy is focused on improving both productivity and the well-being of the end users.

Vittorio Carozza

Our company has been supplying innovative products since 1927, developed as a result of continuous technological research, encompassing tractors and agricultural machinery to satisfy customers’ growing needs for better performance, safety and comfort.

The company currently has 8 plants worldwide, 15 sales companies, over 3,000 dealers and over 4,100 employees. The mission remains the same. What has changed is the degree of internationalisation, in terms of production and distribution, the extent of the product range and the brand portfolio.

The company has therefore decided to change its name from SAME DEUTZ-FAHR to SDF, to make a more precise distinction between institutional activities and those linked to the individual brands, and also to include a pay-off in the brand name, a brief descriptive text which summarises our mission.

The new logo is a development of the previous one, with a new and more succinct language, the same colour and symbol and a pay-off which encompasses and summarises what has always inspired the company’s work, from the very first innovations of Francesco and Eugenio Cassani.

Technology leads the way.

Designed to face the challenges of the future.

The aim of DEUTZ-FAHR is to supply farmers and contractors with leading edge agricultural machines to optimise productivity. In 2015, the brand presence was consolidated in both the high power tractor and combine harvester segments, confirming its distinguishing traits: efficiency, performance and technology.

DEUTZ-FAHR 9 Series cultivating and DEUTZ-FAHR C7000 harvesting. Bavaria, Germany.

Innovation reaches the vineyards.

Our customers look for comfortable machinery, with high safety standards and top performance even when operating in vineyards and orchards. We have based the ActiveDrive system with independent front wheel suspension for the new SAME Frutteto model on the most evolved high-power tractor technology, creating the best solution the market has to offer in terms of comfort for the user and control of the vehicle in all ground conditions.

SAME Frutteto S ActiveDrive spraying in the vineyard. Franciacorta, Italy.

The excellence of style reaches new dimensions.

Technology, design, performance. Once again in 2015, Lamborghini Trattori was presented to the market focusing on those distinguishing traits which have always supported its development and complemented the restyling of the range. The new tractors are a perfect combination of performance and attention to detail, offering the total excellence of Lamborghini Trattori.

Lamborghini C. Six, Lamborghini Spark and Lamborghini Ego.

The best technology is in control of the key components.

One of the cornerstones of the SDF strategic plan is development of the product range. That is why a large part of investment has been allocated to Research & Development, with the aim of designing the key components of our products in-house and in synergy: Farmotion engines, CVT transmissions, state-of-the-art cabs and front axles.

Transmission assembly line. Treviglio, Italy.

Towards an increasingly global agriculture.

Internationalisation is a key element of the company’s development strategy. Turkey and China made a major contribution to this aspect in 2015, due in part to the introduction of new products in the local market, with SDF considerably increasing its position in Turkey. In China, the year saw the acquisition and full control of the joint venture activities, the creation of a new product platform and a considerable increase in production.

DEUTZ-FAHR Agrolux. Marmara, Turkey.

Revenue (million euros)

1,390

Net profit(million euros)

50

Investments(million euros)

103

The strategic plan behind growth in 2015.

Supervisory Board: from left

Francesco Carozza Vice Chairman

Luisella Cassani Carozza

Vittorio Carozza Chairman

Antonio Ortolani

Fabio Gaggini

Edoardo Spezzotti

In 2015, in order to allow our collaborators, customers, suppliers and anyone who has relations with us to understand our activities more clearly, we have decided to make two important changes, the first relating to our “Brand” and the second to the company’s “Corporate Governance Model”.

In the case of our “Brand”, the previous one “SAME DEUTZ-FAHR” has been replaced with the new one “SDF”, with addition of the pay-off “Farming Technology. Since 1927.” We believe this change makes our activity more identifiable and easier to understand at a worldwide level.

Two brief comments are needed to explain the second point, the “Corporate Governance Model”. The first relates both to its weight and to geographical development of the individual brands. The DEUTZ-FAHR trademark has been developing very well for many years now in various parts of the world, but particularly in Germany. This country has therefore become extremely important for us. This is confirmed by the fact that DEUTZ-FAHR products have developed in the European agricultural mechanisation market, which has been in crisis for many years, bucking the trend and allowing all our activities to flourish despite these difficulties. The second point relates to the company’s current size and complexity. We believe it is necessary to make a greater distinction between the responsibilities of shareholders and those of management, in line with what is now a well-established custom for German companies.

Therefore, as a result of both these aspects, we have decided to adopt the German two-tier board system, with a “Supervisory Board” of which all shareholders and non-executive directors are members, tasked with defining strategies for the company’s future and periodically checking that said strategies are correctly implemented and a “Management Board” which will be responsible for implementing company strategies and reporting to the “Supervisory Board”.

We believe this two-tier board system will be beneficial to the company’s future.

Vittorio Carozza Chairman

Statement of the Chairman.

Dear readers,

In 2015, the world agricultural machinery market experienced a drop of around 10% in sales volumes, principally as a result of the extremely low prices of the main agricultural commodities, a factor, which unfortunately has also been confirmed in the first months of 2016. North and South America were the most heavily hit regions, with market reductions of 13% and 28% respectively. Europe registered an average fall of 5%. Volumes were basically stable in Asia and in Africa, while Turkey registered an important market increase, exceeding 66,000 units. However, our company successfully increased its revenue in 2015 and confirmed the good profit levels achieved over recent years, reaping the rewards of the strategic plan started in 2010, which included extraordinary investment to complete the range of products manufactured for traditional markets and to start production and sales activities in China and Turkey. The company considers it essential to base its actions and decisions on the market in implementing the strategic plan and therefore focuses on knowing and understanding customers’ requirements and needs in the regions where we operate.

We have consequently created organisational and operational structures which guarantee that markets, products and distribution models are analysed properly, to ensure that the right operating and product development choices are made. The results achieved in 2015 show 25% growth of revenue in China, achieved through the new products developed to satisfy demand on the local market for machines over 90 horsepower and an improvement of overall company management. Our market share in Turkey increased by a further 21% and therefore reached

Management Board:from left

Lodovico BussolatiChief Executive Officer

Aldo CarozzaChairman

Filippo Simonetti

Letter from the Chief Executive Officer.

6.2%, while revenue increased by 47%, making this the fifth most important market for the company, after Germany, France, China and Italy.

Sales of combine harvesters confirmed the positive volumes reached in 2014, consolidating the growth of recent years. Saturation of production capacity at the Croatian plant is our priority objective for the coming years and will be achievable as a result of new products and commercial strengthening. The vine growing sector is flourishing worldwide and the grape harvesters and sprayers manufactured by Grégoire benefited particularly from this situation, thanks partly to the launch of new products and overall improvement in management. Revenue increased by 7% and the net result by over 90%.

Spare parts activities were positive and made the usual essential contribution to both turnover and to the final result. The new products added to the range in Europe over recent years allowed us to increase our market share from 10.7% in 2014 to 11.4% in 2015.

The result was that, despite the 5% fall of the European market, our revenue in Europe increased by 8% to 990 million euros. On the whole, in 2015 we have manufactured 33,494 tractors and 6,784 harvesting machines, in comparison to 30,247 tractors and 5,736 harvesting machines for the previous year. According to those figures, in 2015, the production for the Chinese market accounted for 23% of the tractor total and 91% of the harvesting machines. Total revenue increased by 15%

to 1,390 million euros, compared with 1,210 million euros the previous year, as a result of both the increase in volumes sold and 100% consolidation of the company in China, compared with the previous 50%, due to acquisition of 45% of the shares from our local partner in 2015. Growth would have been 8% with the same area of consolidation. The total workforce in 2015 was 4,167 people, compared with 4,336 the previous year, which allowed a recovery of overall efficiency, due particularly to activities in China and in India, where the workforce decreased from 1,692 to 1,503 employees in 2015, despite the increase in volumes manufactured. Recruitment of young graduates continued apace, as did the “High Potential People” project for internal growth of talent. Profitability in 2015 was in line with expectations and confirmed the excellent growth of recent years. The group EBITDA was 9%, totalling 125 million euros, compared with 110 million euros in 2014, and the net result increased by 23% to 50 million euros, compared with 41 million euros the previous year.

The gross industrial margin decreased from 20.81% to 19.98%, a slight drop caused by the increased contribution to group revenue of China, a market which typically returns lower profit levels and therefore has a diluting effect on the consolidated profitability indicators. Commercial expenses in 2015 increased by a total of 8 million euros, around 5.5 million euros of which related to the Chinese affiliate, due to both increased sales volumes and to total consolidation. The ratio of these expenses on total revenue therefore decreased from 8.76% to 8.21%. The percentage of general and administrative expenses on total revenue increased

from left

Filippo SimonettiChief Financial Officer & I.T. Executive Director Elia Grando MattiazziCommunication Manager Ivano VolponLegal & Corporate Affairs and Internal Audit Director

Massimo RibaldoneR&D Executive Director

Paolo GhislandiHuman Resources & Organisation Director Massimo PensaPurchasing Executive Director Lodovico BussolatiChief Executive Officer

Lodovico Castellani TarabiniCommercial Extra Europe Executive Director

Alberto PerfettoAfter Market Director Rainer MorgensternCommercial Europe Executive Director

Lodovico BussolatiChief Executive Officer

Christian TovazziSales Administration & Development Director Alessandro LucianiQuality Director Andrea PaganelliIndustrial Executive Director

slightly as a result of the increase in long-term expenses, while research and development costs were basically stable.

The company registered an unprecedented level of investment expenditure in 2015, totalling 103 million euros, of which 33 million euros for new products and 41 million euros for the first phase of construction of the new plant in Lauingen being the most significant items. 43 million euros was also spent to acquire a majority stake in the joint venture in China. Despite this, careful management of working capital allowed us to achieve a net financial position at the year-end of -114 million euros, compared with -128 million euros the previous year. As said, the global market situation in the early months of 2016 remained very similar to the situation of the previous year, with agricultural commodity prices at historically low levels and difficulties on the traditional markets, in contrast with China, Turkey and Africa, which would appear to be maintaining stable levels, albeit with a greater level of uncertainty over the coming months. Our company remains optimistic about the positive trend of the agricultural mechanisation sector over the medium and long term, in line with the opinion of the principal sector analysts and operators. We are starting 2016 with confidence and determination and remain convinced that the company will reap the rewards of the extraordinary investment of the strategic plan started in 2010, which is still in progress, not least because we can count on a group of highly motivated collaborators with strong ethical and professional qualities. Volumes are expected to increase slightly, due to the improvement of our tractor market shares in Europe, Turkey and China, a significant increase in sales

of combine harvesters, a slight increase in sales of spare parts and the continued positive performance of sales of Grégoire products. The role of shareholders and board members is increasingly effective and essential for definition of strategy and as support for management in creating the best operating conditions. The financial resources provided to the company for the 2010/2020 strategic plan are truly extraordinary and exceptional and offer a clear demonstration of the level of confidence and respect for the skills and professional capabilities of the working group. We cannot fail to be proud of this and be fully aware of the vital role we are playing in such a crucial phase of growth and change for the company.

Our work in brief.

Awards

9

Tractors and harvesting machines manufactured

40,278

Headcount(as of 31-12-2015)

4,167

Production sites

8

2015 was a year of consolidation for this brand and restyling of the white bodywork continued, on versions for both European and international markets. The start of the year also saw the market launch of the new tractor in the 35-55 hp class, called Lamborghini Ego. The style, attention to detail and exclusivity of the Lamborghini Trattori brand, identifies a range which will delight anyone working in open fields, orchards or among the vineyards, not only for its design, but also for the technological content and top performance.

Following a revamp of the range of harvester machines for narrow vineyards, the new Grégoire G4.200 model was presented to the market. Like the G4.210 and G4.220 models, the new self propelled grape harvester is a multi-purpose tractor which can operate in all stages of vineyard growth. This machine guarantees high performance even in extreme working conditions, thanks to the 3.6 litre DEUTZ Stage 3B engine, providing 123 hp, and, first of its range, allows spraying operations to be performed in total safety, due to the advanced filter system on the 4Class cab.

Lamborghini Trattori Grégoire2015 was the year which confirmed the SAME brand’s leading position in the specialist machinery segment, boosted by the Best of Specialized award received at Tractor of the Year 2016 for the Frutteto S ActiveDrive. This new model increased our technological assets in this segment, providing a compact tractor not only with independent front wheel suspension, but also with a system which can optimise traction in all ground conditions, improving comfort and safety. In the specialised segment, 2015 was also the year of the Frutteto Natural, a tractor with an excellent price-quality ratio designed for both European and non-European markets. In the first part of the year, SAME also renewed the Solaris range, a hugely successful model in the 35 to 55 hp segment.

On the most evolved markets, 2015 saw full production for the DEUTZ-FAHR 9 Series model; top of the range in terms of both power and technological content. The new C6205 compact combine harvester was introduced, with the new Stage 4 engine, a modern design and a comfortable new cab. For emerging markets, the new 3E Series entered production in 2015, a simple and efficient tractor designed specifically for the needs of global markets requiring tractors between 35 and 42 hp. In addition, there were also the P2H platform Chinese produced tractors from 140 to 170 hp, developed with top components and quality standards for the domestic market. The 5G LRC with a SDF 1.000 series Stage 3 engine is the first example of a global platform which, starting with the 5G and due to engine interchangeability, can be adapted to the needs of all markets.

SAME DEUTZ-FAHR

Our brands.

2015 saw the introduction of important new elements on the entire 30 to 140 hp range of this brand, which is produced in China and designed primarily for the local market. A revamping of the transmission, combined with more powerful engines, created a truly high-performance range, enhancing overall productivity. A new range of more comfortable cabs, with carefully chosen components and air conditioning, were introduced onto the larger models, and a more elegant and contemporary design characterised the revamping of the entire Shu-He range. The activity linked with harvesters was basically consolidated, with a range of harvesting machines with mechanical transmission from 32 to 140 hp.

Shu-HeThe year saw the Swiss brand re-establish its heritage from 1929 and a look that was revamped in 2014, with a return to the original colours to emphasise the charm of tradition combined with state-of-the-art technical solutions and quality. Hürlimann tractors have technological features and power extensions designed specifically for the Swiss market - livestock farming, hay making, green space maintenance and specialist work in vineyards and orchards.

With its range of 23 to 50 hp tractors with specific equipment and tyres suited to the various conditions of use, the Lamborghini Green Pro confirms its position as the ideal solution for the needs of hobby farming, green space maintenance and greenhouse work. Hydrostatic transmissions, a high driving seat, ample space for the operator and the choice between a roll over protection structure or cab guarantees the best working environment, in all operating conditions.

Hürlimann Lamborghini Green Pro

Valerio Assesselli and Mario ChignoliTransmission assembly

Anthony Rodier Cab assembly

Oliver Fritz (in the foreground) and Albert KeisFinal assembly line

Dejan KesinovicTransmission assembly

2015 marked the introduction of the new IT operating system. Treviglio was the first SDF plant to implement this system and major efforts have been made to complete the project within the established times. The new system has led to considerable changes, including complete redesign of the materials logistics flow and implementation of a production bill of materials designed to facilitate the production process. Activities for installation of a new and modern painting plant were also started during late 2015 and this will enter into operation in 2016.

2015 was a year of successes at Châteaubernard (Cognac). Production capacity of sprayers and grape harvesters increased and was managed to allow delivery of 20% more products in terms of volumes, with good cost control. The rationalisation of processes started in 2014 also continued, with further improvement of the hourly cost per resource used and a tangible improvement in terms of production process, allowing improved quality and increased efficiency and workers’ safety. The biggest challenge was entry into production of two new ranges (G3 and G7.200), which accounted for over 45% of the total number of grape harvesters produced, therefore proving to be an important achievement.

2015 was an important year for the Lauingen plant and will be remembered for two factors in particular. The first was production start-up of the DEUTZ-FAHR 9 Series, which required synergy between all the functions involved to ensure the required standards were met. The second was the major work involved in construction of the new, state-of-the-art production plant in our industry, which will be completed in 2016. The production, technologies and logistics departments also worked to define the new processes which will be implemented in the future DEUTZ-FAHR plant and will form the basis of future products.

The Županja plant worked in 2015 to adapt the quality standards and production processes to the major new technological features of the combine harvesters with Stage 4 engines. Major investments were made in the supply of new equipment and in the purchase of new and more modern machinery, with the aim of guaranteeing the necessary increase in production capacity and laying the foundations for the start of major insourcing activities which will allow costs and quality to be further optimised. The second part of the year saw production start-up for the new C6000 range.

TreviglioItaly

ChâteaubernardFrance

LauingenGermany

ŽupanjaCroatia

Production sites.

Ismail GürşatFirst assembly

Due to continued growth in demand for tractors in Turkey and major growth in the market share of SDF brands, the plant in Bandirma considerably increased production in 2015. The activities developed the previous year were therefore consolidated, opening the way for projects to increase production capacity further over the coming years.

BandirmaTurkey

R. Logeshwaran Engine assembly

The Indian plant continued its major growth phase during 2015 and achieved a record in tractor production. The year also saw the launch of the new 3E Series tractor, a 35-42 hp tractor designed for the domestic market, which is also proving to be interesting for other important foreign markets.

RanipetIndia

Bingbo FengPainting

Juan YangCab assembly

In 2015, the Linshu plant worked to revamp the entire Shu-He range, simultaneously consolidating production of the tractor range from 140 to 170 hp. Production of the new DEUTZ-FAHR range from 90 to 130 hp for the domestic market also started. Total production increased by 40% compared with 2014, partly due to cooperation with the other SDF plants, which led to implementation of more efficient production processes.

In line with the industrial plan, all production plant installation activities were completed in 2015, including the painting plant. Industrialisation of the new DEUTZ-FAHR of 210 hp was also completed and production will start in the first quarter of 2016.

LinshuChina

SuihuaChina

Research and Development.

Research & Development plays a primary role in the company’s strategic plan, and development of the product range is one of the cornerstones of this plan. Control of technological know-how and in-house development of key components are the factors that guide the work of SDF engineers.

Four key components were created on this basis. The Farmotion engine, designed and developed by SDF specifically for use in agriculture, guarantees benefits in terms of power, compactness and simplicity of maintenance. The CVT (continuously variable transmission) is one of the most advanced technologies in this sector. The cabs, starting with MaxiVision, which redefined the sector standards in terms of ergonomics and visibility, providing operators with the highest levels of comfort and rational use. The front axles, which include the innovative independent suspension system for vineyard and orchard tractors on the new SAME Frutteto ActiveDrive.

In-house development of key components offers major advantages. Firstly, it allows greater synergy between components, as there is a single design philosophy behind them. Secondly, integration of the design units at the company has allowed greater control of development costs and times. Another important effect offered by centralising design is integration of the various human resources, with growth of specific and transversal skills. Resources are managed

through a matrix-type organisational structure, through which the various engine, transmission, hydraulics, cab and electronic systems development departments support all the SDF research divisions located in the various production plants, allowing further production synergies. In conclusion, this allows the vehicle design units located in Italy, Germany, France, Croatia, Turkey, India and China to develop specific platforms by integrating the solutions supplied by the key component production units.

4 cylinder Farmotion engine Designed, produced and tested by SDF

T5100 CVT transmission Designed, produced and tested by SDF

SDF is therefore able to innovate rationally, reducing the risks linked with this type of activity and offering the market products which are both innovative and economically competitive.

2015 was quite a significant year for recruitment at SDF, in particular in Treviglio. Entry into force of Jobs Act and the new regulations on employment contracts with a gradual raising protection have created the foundations for decisive recommencement of the recruitment policy in Italy and also at the group headquarters. There were around one hundred new recruits in Treviglio from March to December, of whom 32 are white collars and 67 are blue collars. The most noteworthy figure relates to long-term hiring of plant workers previously recruited on a temporary basis. This confirms the social mission of the company which, although it makes modest use of flexibility procedures, promotes stability and long-term employment, when the economic situation allows this.

This was a decisive year for continuous training and particularly for the high-potential human resources development project started in 2012. The project was also extended to a foreign organisation, the German branch, for the very first time. A group of young colleagues at the Lauingen plant were therefore involved in assessment initiatives using the same methods adopted for their Italian colleagues. Dynamic assessment, which was highly appreciated by the participants, highlighted the excellent quality of the resources and provided useful information on career and personal development plants.

Activities also continued in Treviglio in the conception, planning and supply of training targeted at all staff levels. This included IT and language courses (increasingly provided to blue collars) and courses on transversal aspects (inter-personnel communication, time management, delegation and feedback) and more strictly managerial ones (management of business drivers, management of collaborators).

After sales and spare parts services.

Besides using expert and qualified consultants on the various topics, the company organisation also continually promotes and emphasises in-house training in the different contexts and the ability to offer positive incentives to its employees, for example, by sharing the professional testimonials and experiences of its collaborators. The first company event on internationalisation held in Treviglio, with participation of the CEOs of the group’s industrial branches, was of great value and interest. The purpose of the event was to inform all employees on the growing internationalisation of SDF and to further promote exchange of resources between the various organisations, boosting growth of an international culture.

Human resources and collaborations.

On an extremely competitive market which requires maximum productivity of vehicles with minimum machine shut-down times, the Service division invested significantly in 2015 in improving the service supplied by the network, improving the technical skills, instruments and assistance procedures. The launch of the 9 Series marked the occasion to introduce a new service model which guarantees the DEUTZ-FAHR network is ready to provide the maximum level of assistance to its customers, even before the first tractor reaches the market, due to detailed technical documentation, a complete and suitable stock of parts and highly professional technical training. The increasing presence of highly technological systems in tractors and harvesting machines requires improved technical and electronic skills of the network and its continual retraining to guarantee assistance which always satisfies the customer’s expectations. The SDF Academy registered a 30% increase in the number of technical training days provided to the network.

Once again with a view to improving the level of service, the Compass system was developed in 2015, through which dealers are able to count on prompt, skilled and professional support in after-sales activities. The trial phase has been started with several Italian dealers and the new system will be extended to the entire network during 2016.

In conclusion, the new Extended Warranty program was introduced in 2015 to provide customers with complete control of operating costs, for both the tractor and the combine harvester ranges. This program is proving to be a major success and 600 customers had already joined within six months of its introduction onto the market.

Service2015 was a strategic year for the Parts division of SDF. At the start of the year, the new IT operating system was implemented and radically transformed the working processes and methods. The consequent benefits will further improve business potential and the level of service provided on SDF original parts. Economic results of parts sales totalled 237 million euros, an increase of 4% compared to 2014, even considering that the opening of the parts system was deferred to the second half of January 2015 to allow complete start-up of the new IT operating system. Growth in sales of accessories and complementary products which form part of the StarT and Agricenter projects, whose revenue totalled 53 million euros, with a 23% increase over the last two years.

Parts

Sales of SDF Lubricants exceeded 7.3 million litres in 2015, a 3% increase compared with 2014. The Performance Engine Oil, the new lubricant for high performance engines, was introduced with the start of production of the new DEUTZ-FAHR 9 Series. Due to the technological qualities, the new product can increase protection of the engine and guarantee its efficiency and performance over time, thus significantly reducing oil and fuel consumption, with a positive impact on the customer’s operating costs.

Lubricants

Consolidated financial statement as of 31st December 2015.

Consolidated income statement (Thousand euros)

2015 2014

Revenue 1,390,175 1,210,214

Cost of sales (1,112,437) (958,389)

Gross margin 277,738 251,825

Commercial expenses (114,077) (105,992)

General and administrative expenses (46,409) (37,441)

Research and Development expenses (37,043) (33,980)

Other operating income 209 135

EBITDA 125,354 110,404

EBIT 80,418 74,547

Net financial result (11,784) (6,297)

Non-operating income/(expenses) 1,991 (6,854)

Result before taxes 70,625 61,396

Income taxes (20,451) (20,764)

Net income including minority interests 50,174 40,632

Minority interests (339) (5)

Net profit 49,835 40,627

Consolidated balance sheet (Thousand euros)

2015 2014

ASSETS

Current assets 919,569 878,863

Intangible and tangible fixed assets 343,551 250,752

Financial fixed assets 11,426 10,305

Total assets 1,274,546 1,139,920

LIABILITIES

Current liabilities 662,485 655,388

Non-current liabilities 181,871 106,806

Provisions 89,439 90,420

Equity 334,687 287,274

Minority interests 6,064 32

Total liabilities and equity 1,274,546 1,139,920

Return on equity (R.O.E.) 14.89% 14.14%

Return on sales (R.O.S.) 5.78% 6.16%

Return on investments (R.O.I.)* 6.31% 6.54%

Fixed investments to revenue 5.53% 3.38%

Equity ratio 26.26% 25.20%

* total assets net of equity investments.

2015 2014

By market

EU countries 936,468 67.36% 873,062 72.14%

Non-EU countries 453,707 32.64% 337,152 27.86%

Total 1,390,175 100.00% 1,210,214 100.00%

By product

Tractors 1,004,073 72.23% 856,370 70.76%

Combine harvesters 52,217 3.76% 54,253 4.48%

Spare parts 241,248 17.35% 234,529 19.38%

O.E.M. 2,132 0.15% 5,504 0.45%

Grapes and olives harvesters 25,599 1.84% 22,906 1.89%

Others 17,888 1.29% 8,552 0.71%

Small combines 38,567 2.77% 14,049 1.16%

Walking tractors and O.E.M. 8,451 0.61% 14,050 1.17%

Total 1,390,175 100.00% 1,210,214 100.00%

Tractors by brand

DEUTZ-FAHR 626,363 62.38% 568,879 66.43%

SAME 176,634 17.59% 172,771 20.17%

Lamborghini Trattori 74,983 7.47% 72,871 8.51%

Hürlimann 9,594 0.96% 9,656 1.13%

Others 25,899 2.58% 4,093 0.48%

SHU-HE 90,601 9.02% 28,100 3.28%

Total 1,004,073 100.00% 856,370 100.00%

Tractors by hp

0/50 q.ty 7,396 20.28% 6,576 19.92%

amount 65,947 6.57% 30,363 3.55%

50/100 q.ty 18,542 50.85% 16,627 50.37%

amount 394,096 39.25% 349,527 40.81%

100/150 q.ty 7,022 19.26% 7,082 21.45%

amount 258,383 25.73% 280,679 32.78%

150/200 q.ty 2,160 5.92% 2,069 6.27%

amount 146,789 14.62% 137,772 16.09%

> 200 q.ty 1,346 3.69% 656 1.99%

amount 138,858 13.83% 58,029 6.78%

Total q.ty 36,466 100.00% 33,010 100.00%

amount 1,004,073 100.00% 856,370 100.00%

Revenue(Thousand euros)

Working capital (trade receivables + inventory - trade payables) (Thousand euros)

2015 2014

Trade receivables 234,885 184,435

Inventory 364,173 403,765

Trade payables (422,475) (355,175)

Total 176,583 233,025

Fixed investments (Thousand euros)

2015 2014

Fixed investments 76,890 40,849

Net financial position (Thousand euros)

2015 2014

SHORT TERM LIQUIDITY/(INDEBTEDNESS)

Banks, cash on hand 212,218 211,356

Due to banks (142,622) (220,418)

Due to other financial institutions within one year (1,946) (11,981)

Total short term liquidity/(indebtedness) 67,650 (21,043)

MEDIUM/LONG TERM INDEBTEDNESS

Due to other financial institutions after one year (4,001) (3,543)

Due to banks after one year (172,486) (96,630)

Long term financial facilities for technical innovation programs (5,384) (6,633)

Total medium/long term indebtedness (181,871) (106,806)

Total financial liquidity/(indebtedness) (114,221) (127,849)

SDF S.p.A.Viale F. Cassani, 14 - 24047 Treviglio (BG) - Italysdfgroup.com Prepared by Group Communication press.headquarters@sdfgroup.com Cod. 308.3636.3.9 - 05/16 - Printer: TICOM srl - Graphic project: InTesta - Gruppo Armando Testa

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