Indra Sistemas SA Voluntary Tender Offer for the Acquisition of 100% of the Share Capital of Tecnocom Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stacy Pollard - JPMorgan - Analyst : Thank you. I had three questions please. First of all, can you talk about the restructuring costs to get those synergies? Secondly, the free cash flow expectations of the combined entity for 2017/2018 how we should think about that. And is that additive to your 2018 target of around EUR200 million? And then the third question, can you discuss the capital raising plans when they might be enacted? And would that be for the full EUR160 million, is that the anticipation?

Question: Stacy Pollard - JPMorgan - Analyst : Sorry, could you just repeat that last bit, increasing the targets, which target is (multiple speakers) to?

Question: Stacy Pollard - JPMorgan - Analyst : Okay, thank you for that.

Question: Adam Wood - Morgan Stanley - Analyst : Hi. It's Adam Wood from Morgan Stanley. Thanks very much for taking the question. I'd like -- just wondered if you could give us a little bit of help understanding the timing of the transaction. Obviously, you're still in the middle of your own transformation plan at Indra. Are you very confident that's now on track to be delivered? Could you help us understand the risk of disruption to your own synergy plans within Indra, because obviously you're going to be going through a second kind of synergy and transformation plan to bring Tecnocom on board. And then maybe secondly, it feels like this is a doubling down and increasing your exposure twice to services, which has been reasonably a challenging market both in Spain and Latin America. How much do you depend on the market improving to be able to deliver particularly the revenue but also the cost synergies? And are there any signs of that in a market, which pushed you to do this transaction now, rather than waiting until more of your own plan was completed. Thank you.

Question: Adam Wood - Morgan Stanley - Analyst : That's perfect, thank you very much. That's very helpful.

Question: Gregory Ramirez - Bryan Garnier & Co - Analyst : Yes, good morning. Thank you for taking my questions. I don't know Tecnocom very well inside out, but you talked about the operating synergies and what could be improved on the capacity utilization, the average pyramid offshore leverage, etc. Could you help us to understand where are the inefficiencies on these points on the Tecnocom side, which will help to improve that compared to Indra's levels? And I have a second question regarding Indra's targets in terms of operating margins you define from 2018, so it was 10% to 11%. When I made the calculations including cost and revenue synergies, you could get, including Tecnocom, an operating margin between 10% and 11% or maybe I missed something. Do we have to add some cost, which could be reinvested on top of the synergies that makes that the 10% could not be achieved in 2018? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 29, 2016 / 10:00AM, IDR.MC - Indra Sistemas SA Voluntary Tender Offer for the Acquisition of

Question: Gregory Ramirez - Bryan Garnier & Co - Analyst : That's okay. But maybe just for clarification, when you talked about the incurring costs the timing of the costs and the timing of the synergies is it on -- it's not on the calendar basis. This is, I would say, from the effective date of the integration of Tecnocom that is to say April or May 2017. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 29, 2016 / 10:00AM, IDR.MC - Indra Sistemas SA Voluntary Tender Offer for the Acquisition of

Question: Adam Wood - Morgan Stanley - Analyst : Okay. Thank you very much, I understand.

Question: Gautam Pillai - Goldman Sachs - Analyst : Yes, thanks for taking my questions. Can I ask about the timing of the deal from Tecnocom perspective? Have you been looking at this asset for a long time? And also on regards to the M&A process, was this a competitive bid or were you the only sole company looking at them? And then my second question would be on the growth profile of Tecnocom. So they did something like 9% growth in 2015 but this has slowed to 3% in nine months 2016. Is there a seasonality issue there? Or could you point to some particular reason for this? And what do you expect this business to grow in the next, probably in the next three to five years?

Question: Gautam Pillai - Goldman Sachs - Analyst : On the growth profile it slowed from 9% in 2015 to 3% in 2016 so far.

Question: Gautam Pillai - Goldman Sachs - Analyst : Sure. Can I just add one more follow up on that and touch upon the payment systems business of Tecnocom? And what they do here exactly is it something like an issuer processing business similar to parts of Worldline or Atos. And are the revenues, which they get here transaction linked, so they get paid on a per-transaction basis? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 29, 2016 / 10:00AM, IDR.MC - Indra Sistemas SA Voluntary Tender Offer for the Acquisition of Unidentified Company Representative Yes, well they have a very good platform, very well positioned in the market and very strong from the technological point of view. And also, they are, of course, competing with Atos and with these companies. But we think that its platform is, well as I said they are very strong. They are also very well positioned not only in Spain also in Latin America. And regarding this growth that you were asking before, we see they are very well positioned in a lot of local banks in the Latin America area. And this will give us the opportunity to go with our models regarding our core banking or our core insurance that will permit us to sell more and do this cross-selling regarding these financial institutions that we are not positioned now. And also, this platform is not only -- you are not only selling the platform you are also having the opportunity to sell BPO, because some of their clients have contracted in these platforms not through a direct acquisition, they have -- and they have bought it software as a service. And they are giving a complete service of these payment systems in some of these local banks in the Latin America area. So, first, the payment system is a very good platform, very complementary to our offer. We face strong demand in the Latin American market. And also, we have a complete network or footprint of other countries not in Latin America that we'll have also the opportunity to sell these system payments platforms in other areas not Latin America like you said. And also, they are in customers like these local banks in Colombia, Peru, Dominican, Chile that will permit will allow us to sell our services and our other solutions in these clients. So I think it's a very good product and I think very complementary to our current offer.

Question: Georgios Kertsos - Berenberg - Analyst : Yes, hi thanks for taking the question. Most of my questions have been actually answered, one last one from me if I may. So given the fact that I think you mentioned that Tecnocom is the third largest player in the Spanish market, do you guys expect any antitrust issues? Thank you.

Question: Georgios Kertsos - Berenberg - Analyst : Thank you. Understood, very clear thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 29, 2016 / 10:00AM, IDR.MC - Indra Sistemas SA Voluntary Tender Offer for the Acquisition of