Danieli & C Officine Meccaniche S p A : Sep 27, 2016 Approval of the annual report as of 30.6.2016

Fully paid-up share capital of euro 81,304,566

Registration Number with the Register of Companies of Udine, tax number and VAT registration number 00167460302

www.danieli.com

Danieli's Board of Directors met today, September 27, 2016, to examine and approve the financial statements for the parent company and the consolidated financial statements for the Danieli Group, referring to the year from July 1, 2015, to June 30, 2016.

CONSOLIDATED ANNUAL REPORT FOR THE YEAR ENDED JUNE 30, 2016

Group revenues are lower in the period for both operating sectors - Plant Making (engineering and manufacturing of plants for the production of metals - steel and aluminum), and Steel Making (steel production) with the ABS Group (Acciaierie Bertoli Safau and ABS Sisak), albeit for different reasons:

• Danieli Plant Making did not reach all its production targets due to unforeseen events occurring in the plant-making areas, which will be recovered in the next financial year;

• The turnover of ABS Steel Making, on the other hand, is affected by lower selling prices than in 2014/2015, although production volumes remained unchanged (about 1 million tons), basically tied to a drop in raw material costs. Margins, however, were satisfactory throughout the year even though the plants were only utilized at 70% capacity because of the downturn in European and international markets, Oil and Gas in particular.

Consolidated profit for the period is almost in line with the forecasts made at the beginning of the year, albeit lower than the figure reported for the same period last year, which was largely tied to positive exchange rate effects that in 2016 were not significant.

The Group's financial position and shareholders' equity continue to be solid.

As regards capital expenditures, during the year the Plant Making sector saw the completion of both a production ramp up in our new plants in India and Russia, and the operational integration of the newly acquired FATA SpA into the Group.

In the Steel Making (ABS) sector, after the capital expenditures in the new blooming mill 1000 and the revamping of the MCC3 conticaster, the Rotoforge was also started up successfully. This machine was developed and designed by Danieli and is the first in the world to combine the two traditional hot-working technologies for long products made of special steels: rolling and forging.

The innovative content of the considerable capital expenditures made in ABS will bring about a significant improvement in the quality of the products being offered, while broadening the range and covering new market segments more competitively.

In the first half of 2016, world steel production was almost 795 million tons, reporting an approximate 1.9% decrease over the same period in 2015, where a total of approximately 1,620 million tons was reached over the 12-month period.

Forecasts for 2016 point to an overall decline of around 1-1.5 %, with Asia showing a 1% decrease and advanced and emerging countries experiencing a sharper drop of about 2-2.5%.

In 2016, therefore, the steel market is stabilizing at levels lower than pre-recession figures, due to the lack of a Chinese driving force together with a slow global economy. We believe that we have entered a "new normal" phase similar to the one that characterized the years 1970-2000, and that could continue for at least 5/6 years or more. The low energy and raw material prices, together with a shift in Chinese industry from an investment-based economy to a consumer or service- based economy, are having a decisive impact (together with the effects of an accommodating monetary policy being implemented by the major central banks) on world growth. A shared strategy is still needed, especially in Europe, to bridge the development gap in some countries and promote greater competitiveness in the weaker economies.

It is expected that, in essence, steel consumption will remain at current levels for the next 2/3 years, after which it will grow by 1-2% per annum. This will also depend on the trend of oil and raw material prices to stimulate the economies and investment in developing countries.

- "Passion to innovate and perform" but also "We do not shop around for noble equipment". The Danieli Group will continue to consolidate and expand its business in order to ensure greater competitiveness in terms of innovation, technology, quality, costs, productivity and customer service.

Not only is Danieli known for its capabilities in the supply of plants but also for its manufacturing know-how: in Europe, for its noble and high-tech products; in Asia, for the design and manufacture of consolidated, proven products made with the same quality as those in Europe.

- "A step ahead" which aims to set up a new organizational model for the Group, promoting multicultural intellectual growth and creating solutions to meet current market requirements more effectively

In particular, in order to consolidate these strategies, the company plans to expand the Danieli Academy to train junior employees, provide refresher courses for senior staff, and make the most of talented youths.

As we are convinced that the New Normal period will last for at least 5 years, we consider the drop in investments in new plants as an established fact, a drop that will be offset by the revamping of existing plants and services. But this is not sufficient. More innovation and downstreams are needed, and we are working on a vision in this respect for the medium-long term.

The Group's order book is in line with the figures expressed at the end of the last fiscal year, and is well diversified according to geographical area and product line. For the year ended June 30, 2016, it amounts to 2,814 million euro (of which 162 million euro in the special steelmaking sector) compared to 3,155 million euro for the year ended June 30, 2015 (of which 169 million euro for special steels).

The recognized strategic role of the metals industry as well as its multiplying effect on employment and the development of the manufacturing industry generally continues to drive this sector through investments in innovative plants in both developing countries and in those with mature economies.

As of June 30, 2016, the Danieli Group employed 9,419 people - 1,215 in the Steel Making

segment and 8,204 in the Plant Making segment.

The downturn in the Asian market has led to a reshaping of our facilities in India, Thailand and China, which in any event will still account for 40% of the Group total since Asia produces approximately 55% of the steel produced globally.

Danieli continues to pursue innovation, efficiency and quality of customer service at a fast pace, promoting team excellence, which is taking on an increasingly important and strategic role for the success of the company. Consequently, this confirms the importance of carefully managing and making the most of the potential and aptitude of people in order to ensure that the Group's training programs are in line with the best practices.

The economic value that is generated converts the Group's ability to create wealth and distribute it into remuneration for the stakeholders.

The tables below show how economic value is distributed among stakeholders through the reclassification of data from the consolidated income statement.

(millions of euro)

Net global value added is divided among the following beneficiaries, where personnel (direct remuneration comprising salaries, wages, employee termination indemnity and indirect remuneration made up of social security contributions) and the Public Administration (income taxes and other taxes) cover almost 83% of the total, while the remaining 17% includes venture capital (dividend distribution), third parties (non-controlling interests), company remuneration (reinvested earnings), remuneration to lenders (interest on loans) and donations and sponsors (sponsorships, donations and other forms of contribution).

(millions of euro)

Danieli also took part in the Carbon Disclosure Project (CDP), and in 2015 was among the most worthy Italian and European entities, showing a marked improvement in classification thanks to our increasing commitment to developing SusSteel and Green Steel solutions for our customers.

The CDP Climate Change initiative helps more than 800 institutional investors identify from among thousands of corporations the ones that are the most motivated to grow sustainably by managing the effects of climate change on their businesses.