Trevi Finanziaria Industriale S.p.A.

Buy Digging value out from the land – initiation with Buy, PT € 16.10

December 5, 2007 Andrea Balloni Analyst + 39 02 8738 9609 andrea.balloni@berenberg.de

Italy

For our disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) and our disclaimer please see the end of this document. Please note that the use of this research report is subject to the conditions and restrictions set forth in the disclosures and the disclaimer at the end of this document.

Table of contents

Digging value out from the land 1

Investment case 2

A small step, from special foundations to oil drilling 2

Quality: few players can be so “special” 3

Growth: a fast pace in both divisions 4

Valuation: CFRoEV points to € 16.10, based on fully diluted shares 7

Theme: low risks and potential catalysts 10

Sustainability of returns and long-term value 11

Competitive analysis 17

Financials 22

Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) 28

Contacts: Capital Markets 30

1

Digging value out from the land

A 50-year-long FOCUS on special foundations has turned Trevi into one of the sector leaders. A long experience in foundation equipment has allowed Trevi to diversify the focus on the oil drilling market.

The KNOW-HOW developed as a worldwide vertically integrated player and the SCALE generated by a wide distribution network are Trevi’s main strengths in the foundations division. In the oil drilling division, Trevi operates as a FIRST MOVER with the new application of hydraulic systems, providing a first-in-class machine.

Trevi is benefiting from impressive growth based on:

1) Strong increase in investments in public infrastructures in emerging markets with huge and important works such as the Panama Canal expansion ($ 5.3bn of total worth)

2) Mature markets: where the demand of green energy, increasing world trade and the need to overhaul dams and bridges are pushing public infrastructures (in the US, $2.5bn are expected to be spent for restructuring 10 dams in the next two years).

3) Extremely high oil price/demand

4) The launch of new products

Trevi is expected to report a 2006-09e sales CAGR of 20.3% that should be translated into an EBITDA CAGR of 25.8% and an EPS CAGR of 42.3%.

Initiating coverage with BUY, PT set at € 16.10 based on 08-09e CFRoEV.

Y/E 31.12., EUR m 2005 2006 2007e 2008e 2009e Sales 497 642 798 953 1,118 EBITDA 49 82 113 138 167 EBIT 29 58 85 108 135 Net profit 13 27 45 60 77 Y/E net debt (net cash) 126 176 163 146 126 EPS reported (1) 0.20 0.42 0.70 0.93 1.20 EPS recurring (2) 0.20 0.42 0.70 0.93 1.20 CPS 0.50 0.83 1.16 1.44 1.77 DPS 0.03 0.05 0.11 0.14 0.15 Gross margin 57.7 % 56.2 % 55.8 % 55.6 % 55.5 % EBITDA margin 9.9 % 12.8 % 14.1 % 14.5 % 15.0 % EBIT margin 5.8 % 9.0 % 10.7 % 11.3 % 12.0 % Dividend yield 0.2 % 0.4 % 0.9 % 1.2 % 1.2 % ROCE 10.6 % 16.1 % 20.0 % 24.3 % 28.8 % EV/sales 1.8 1.5 1.2 1.0 0.8 EV/EBITDA 18.5 11.7 8.4 6.8 5.5 EV/EBIT 31.8 16.6 11.1 8.6 6.8 PER 59.5 28.5 16.9 12.8 9.9 Cash flow RoEV 3.1 % 6.3 % 9.0 % 11.7 % 14.9 % Note: 1) before goodwill amortisation; 2) after goodwill amortisation, adj. for non recurring items. Source: Company data, Berenberg Bank

Price: EUR 11.93 04/12/2007 Milan Close

Buy Price target: EUR 16.10 Reuters TFI - Bloomberg TFI IM Share data Shares outstanding (mill.) 64.0Market capitalisation (mill. EUR) 763Enterprise value (mill. EUR) 951Free float 39.0%Ø daily trading volume (pcs.) 256,000Authorised capital (mill. pcs.) -Company agenda Sales : 01-01Performance data High 52 weeks (EUR) 14.7Low 52 weeks (EUR) 9.2Relative performance to MIBTEL1 month -8.9 %3 months -1.2 %12 months 35.0 %Key data Price/book value 4.7Net gearing 99.7 %CAGR sales 2005 - 2009 22.5 %CAGR EPS 2005 - 2009 56.6 %

Change 2007e 2008e 2009e old Δ old Δ old Δ Sales - - - - - - EBIT - - - - - - EPS - - - - - - Business activities: Foundation construction and equipment (77% of sales); drilling services and equipmemt (23% of sales) Major shareholders: Trevisani Davide 56% JP Morgan 5.2% Fidelity 2.1%

Trevi Finanziaria Industriale S.p.A. Mid cap: construction (full coverage)

December 5, 2007 Andrea Balloni Analyst + 39 02 8738 9609 andrea.balloni@berenberg.de

2

Investment case

A small step, from special foundations to oil drilling Trevi Finanziaria Industriale (Trevi) was founded in 1957 by Davide Trevisani, the current main shareholder (56% of total shares), and listed in 1999 on the Italian stock market. The company is mainly focused on two different businesses, closely linked with each other: • Special foundations division • Drilling division In the special foundations division, Trevi plays a key role, providing both equipment (through Soilmec, second player worldwide, 18% of market share) and special foundations services (through Trevi SPA that is a leading player in the regions where it operates), with an impressive historical track record in geotechnical and maritime works (more than 30 dams restructured or built in the last 7 years). In the oil drilling division, Trevi has entered the market through a very competitive machine (the HH model), providing both equipment (through the fully owned Drillmec) and services (through the fully owned Petreven).

Foundations (services/equipments) Oil Drilling (services/equipments) Group

Market share Equipments ca.18%; Services: 3-6% Drilling machines: 4% on-shore market (estimated by the company)

CustomersEquipments: Keller, Soletanche and a wide range of local players. Services: public and

private contractors

Equipments: in 2007 the main customers was Repsol. Services: Repsol, Petrobras,

Chevron

Distribution Soilmec: 45 worldwide direct distributors and 80 independent distributors

Drillmec: 10 worldwide direct distributors, in addition to the Soilmec direct

distributors

Competitors Equipments: Bauer and Casagrande; Services: Bauer, Keller, Soletanche

Equipments: National oil Varco (US) and Bentec (EU). Services: Pride, Precision

Drilling and Saipem

Suppliers

Production sites

Capacity utilisation Services: full utilisation. Equipments: estimated at 77%

Services: full utilisation. Equipments: estimated at 74%

Sales 07 (EUR m) 585.2 213.3 798.4Sales share 73% 27% 100%

EBIT 07 (EUR m) 60.0 25.7 85.7EBIT margin 10.3% 12.1% 10.7%

ROCE 07Foundation services at 18.2%; Foundation

equipments: 30.4%Oil drilling services at 10.6%; Oil drilling

equipments: 13.2% 20.0%

Drillmec and Soilmec are the main suppliers of services divisions; for the equipment divisions, Caterpilar is the main suppliers, in a wide range of smaller local suppliers

Equipments: Italy and US - Services: on site

Thanks to 30 operating companies in 26 countries, Trevi has developed a global presence, building strong relationships in many countries, both mature and emerging, such as the US, the Emirates, Nigeria, Algeria and Argentina.

3

Source: Company data Quality: few players can be so “special”

Special foundations: 1) impressive track record (know-how) and 2) scale are the main competitive advantages

Oil drilling sector: Trevi was the first mover in the application of the hydraulic systems, providing a first-in-class machine

Sustainable returns guaranted by 1) high barriers to entry and 2) the time advantage as first mover

In the construction sector, Trevi is one out of two global and vertically integrated players (providing services and equipment) operating in one of the most demanding niches, special foundations. Special foundations, which are mainly related to the public infrastructure sector, are characterised by larger dimensions, very tough ground conditions, demanding environmental conditions and space restrictions. The strong know-how developed in 50 years and the solid track record in working in very difficult situations have given Trevi an outstanding reputation. Trevi is recognized as one of the leading players in geotechnical and marine works (more than 30 restructured/built-up dams in the last 7 years), with a deep knowledge of different soils and a high level of industrial safety and environmental protection. Trevi is the second global supplier (roughly 18% market share) of equipment for foundations with more than 120 distributors worldwide. Thanks to the advantage of scale, Trevi, compared to local players, is able to provide a wider range of products and components (with a different level of performance and dimension) with an innovation that is based on both R&D investments and the experience related to globally provided services. The hard to copy scale and know-how are the main guarantees for Trevi to increase in the next few years both its market share and its returns. Trevi has entered the huge and mature oil drilling sector with a best-in-class product that, thanks to the hydraulic applications, can guarantee: • Increased drilling performance by 30% • Reduced drilling cost by 30% • Smaller occupied area and reduction in transport costs • Reduction in accidents on work

One FOCUS on special foundations niche Differentiating through KNOW-HOW … … and SCALE that translate into SUBSTAINABLE RETURNS A second FOCUS on oil drilling sector …

2006 Sales breakdown by region.. Domestic

17%

Rest of Europe

13%

NAFTA14% Asia

Pacific 31%

Rest of world25%

...and by division

Foundation services

50%

Drilling services

4%

Foundation equipment

27%

Drilling equipment

19%

4

The better quality of the drilling machines is well perceived by customers that pay 5% more, compared to traditional machines. Trevi was the first mover in applying the hydraulic systems to the drilling division, gaining a time advantage over the other sector players that is going to allow the Italian player to further increase its market share, launching new products, with improving returns.

… with a TECHNOLOGICAL LEADERSHIP

Growth: a fast pace in both divisions

2006-09e sales CAGR expected at 20.3%, driven by:

• Emerging markets, requiring infrastructure works to sustain GDP growth

• Mature markets that need to overhaul old dams and bridges

• The requirement of new dams and the expansion of harbour quays

• Increasing oil demand/prices and the launch of new products

The strong 2006-09e sales CAGR of 20.3% is the result of many different drivers related to both the foundation and drilling divisions. In special foundation services (06-09e sales CAGR +7.8%), thanks to the strong geographical diversification, Trevi is able to benefit from drivers related to both mature and emerging markets, with a particular focus on geotechnical and marine works. • Overall, in the emerging markets, GDP growth rate has to be supported

by strong investments in public infrastructures; not just China and India, but also Mid-East countries (such as the Emirates), some African countries and Latin America, where Trevi has built strong relationships in the last 6 years, are expected to increase investments in public infrastructure.

• In some mature markets the need to overhaul dams and bridges is increasing more and more. In the US where in 2005 the Army Corps of Engineering awarded Trevi with the worldwide biggest intervention on a dam in operation, the collapse of Minneapolis bridge and the flooding related to Katrina hurricane have emphasised the need for important public infrastructure investment mainly in geotechnical and marine works. 10 projects related to dams’ restructuring have already been approved and financed for a total amount of $ 2.5bn (roughly 50% related to foundations) and should be awarded in the next 2-3 years.

• The increasing global demand for green energy should push the need of new dams in both mature and emerging markets.

• The increasing level of world trade in terms of volume is raising the need for widening harbours and quays.

In Foundations division, services sales CAGR at 7.8%, thanks to many drivers

5

Global GDP, trade and container trade volumes (index 1998 = 100)

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200250

300350

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2006

2007

e20

08e

2009

e20

10e

GDP Trade volume Container trade

Source: Drewry, IMF, Global Insight The special foundation equipment division (06-09e sales CAGR +23.3%) is expected to benefit from the same drivers as the services division which are pushing the market of equipment for foundation works both in terms of volume and selling prices, in addition to the launch of new products/ components such as: • The new hydromill, launched in 2007, with an estimated selling price in

the range of € 1m t € 1.5 m. • The new smaller and more agile cranes that integrate the range of the

already existing models, with average selling prices in the range of € 0.6m to € 1.2m.

• The new electronic applications such as the remote control and the data transfer through satellite

In the oil drilling division, considering both services (06-09e sales CAGR +53%) and machines (CAGR +34.6%), expectations are even brighter on the back of: • The success that HH machines are gaining: since the launch in 2004,

Trevi has globally delivered or been awarded orders for 89 machines (24 still to deliver), relating to both oil and water drilling, gaining in a few years a small global market share (1.8%). On the back of both the growing distribution network and the widening product range (drilling machines able to reach 6,000m of depth, expected to be launch in 2008e), Trevi is expected to further increase its market shares.

• The globally rising oil demand/price, on the back of the strong GDP growth of emerging markets, that is boosting the number of new rigs also at a low depth (below 4,000m).

Oil price-Rigs trends

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2007

0200400600800100012001400160018002000220024002600280030003200

Oil price Total rig On-shore rig Source: Berenberg Bank, Baker Huges

Equipment sales CAGR at 23.3%: new products and new market shares Oil drilling division driven by increasing market shares and oil price trend

6

The strong 2007-09e sales CAGR should be translated into a 25.8% EBITDA CAGR and 42.3% EPS CAGR. Trevi’s profitability is expected to increase (EBITDA margin from 13.3% in 2006 to 15.2% in 2009e) mainly driven by: • The expected efficiencies in oil drilling equipment. Drillmec, that in

2006 reported an EBITDA of below 10%, should in the next two years reach a 13% level, being closer to the 14.5% EBITDA margin related to Soilmec. The improvement of the division is mainly related to the end of the start-up phase with the production on scale of the HH machines.

• The increasing dimension of the orders: Trevi, also thanks to the increasing capital employed, should be able to participate in the biggest orders worldwide, raising the average of the dimension of each order and improving the EBITDA margin from the 2006 level of 12.8% to the expected level of 14.2%.

• The increasing weight of oil drilling services which have a profitability in terms of EBITDA margin that is double the average group margin.

As a consequence of the stronger expected sales growth rate of the equipment division (06-09e sales CAGR at 28.2%) compared to the services division (06-09e sales CAGR at 12.8%), the ROCE of Trevi is expected to improve from the level of 20% estimated for 2007e to the level of 28% in 2009e. This improvement is mainly related to Drillmec that in 2006, according to Berenberg calculations, has a ROCE of below 17% and that should gradually reach the higher level of Soilmec (above 25% calculated on 2006), driven by both the increasing EBIT margin and capital turnover (increasing capacity utilisation and higher level of advance payments).

An EBITDA margin expected to move from 13.3% to 15.2% ROCE is expected to strongly improve ... … mainly driven by Drillmec

7

Valuation: CFRoEV points to € 16.10, based on fully diluted shares

Based on the 08-09e CFRoEV, PT is set at € 16.10, potential upside of 35%

DCF valuation substantially confirms Buy rating on the stock

Higher expected ROCE compared to BAUER

Cash flow return on enterprise value The target price for Trevi was set at € 16.10 per share, implying a potential upside compare to the market price higher than 35%. Considering the high visibility on the 2008e financial figures, guaranteed by the duration of the order backlog of one year and the strong competitive position of Trevi, the PT calculation is based on the average 2008-09e CFRoEV. In order to consider the convertible bond of € 70m that, with a strike price at € 11.30, is currently in the money, the PT was calculated considering a fully diluted number of shares at 71m (instead the current number of 64m) and a NFP reduced by € 70m.

Based on a fully diluted number of shares, PT at € 16.10, potential upside at 35%

Trevi Finanziaria Industriale S.p.A.Fair value = (adj. EBIT margin / hurdle rate) x sales

2005 2006 2007 2008 2009

Hurdle rate 10.0% 10.0% 10.0% 10.0% 10.0%EBIT 28.7 58.1 85.4 108.0 134.5+ depreciation of fixed assets 18.8 22.3 24.9 27.3 29.7+ amortisation of goodwill 0.0 0.0 0.0 0.0 0.0+ amortisation of intangible as 1.7 1.7 2.2 2.8 3.2- maintenance capex 20.0 20.0 25.0 26.0 28.0- minorities 0.9 1.2 2.0 2.6 3.4= adjusted EBIT 28.3 60.8 85.6 109.5 136.1Reported EBIT margin 5.8% 9.0% 10.7% 11.3% 12.0%Adjusted EBIT margin 5.7% 9.5% 10.7% 11.5% 12.2%Actual EV/sales 1.79 1.47 1.17 0.96 0.80Fair EV/sales 0.57 0.95 1.07 1.15 1.22x sales 497 642 798 953 1118= fair EV 283 608 856 1095 1361- net debt (cash)* 125.8 175.8 93.4 75.6 55.9

- pension provisions 23.3 24.8 24.8 24.8 24.8- off balance sheet financing 0 0 0 0 0= fair market capitalisation 134 408 738 994 1,280No. of shares (million)** 64 64 71 71 71Fair value per share (EUR) 2 6 10 14 18

Premium (-) / discount (+) in -19% -3% -1% 21% 56%Source: Berenberg Bank *Net debt reduced in 07-09 in order to consider the conversion of the bond** number of shares fully diluited since 2007

8

Discounted cash flow and sensitivity analysis The DCF substantially confirms the CFRoEV valuation, pointing at a fair value at € 16.20 per share. The main DCF assumptions are: • A medium-term (2011-16e) NOPAT growth rate of 3.2% • A 0% long-term growth rate • A 4% equity risk premium, 4.3% risk-free yield, beta of 1.0x and, as a

consequence, a long-term WACC of 7.9%

DCF model Terminal mill. EUR 2007e 2008e 2009e 2010e 2011e 2012e 2013e 2014e 2015e 2016e Value Operating result (NOPAT) 54.7 69.1 86.1 103.6 108.3 111.9 115.7 119.3 122.0 124.7 Depreciation 27.2 30.1 32.9 34.6 35.8 37.0 38.3 39.7 41.1 42.5 Increase/decrease in working capital -14.5 -18.0 -34.7 -24.8 -25.6 -26.5 -27.5 -28.4 -29.4 -30.4 Investments 50.0 50.0 50.0 50.0 28.2 30.5 30.7 28.0 30.4 33.3 Net cash flow 17.3 31.2 34.3 63.4 90.3 91.9 95.9 102.6 103.2 103.4 1,616.1 Present value 17.2 28.9 29.5 50.2 66.2 62.5 60.5 59.9 55.9 51.9 808.5 WACC 7.5 % 7.6 % 7.7 % 7.9 % 7.9 % 7.9 % 7.9 % 7.9 % 7.9 % 7.9 % Long-term growth rate 0.0% DCF per share derived from WACC derived from Total net present value 1,292 Interest costs, pre tax 6.0 % thereof, terminal value: 63% Tax rate 36.0 % Net debt/ (net cash)* 106 Interest costs, after tax 3.8 % Minority/Pension provision/other 30 Required ROE 8.3 % Equity value 1,155 Equity risk premium 4.0 % No. of outstanding shares (million)* 71 Risk-free yield (10y. Bond) 4.3 % Discounted cash flow per share (EUR) 16.2 Beta 1.0 * Fully diluted. Source: Berenberg estimates

Sensitivity-analysis DCF Medium-term growth rate Fair value per share

in EUR 2.2% 2.7% 3.2% 3.7% 4.2% 0.8 8.6% 13.7 14.0 14.4 14.8 15.2 0.9 8.3% 14.4 14.7 15.1 15.5 15.9 1.0 7.9% 15.3 15.7 16.2 16.6 17.0 1.1 7.5% 16.4 16.9 17.3 17.8 18.3

Beta

1.2

WA

CC

7.2% 17.3 17.8 18.3 18.8 19.3 Source: Berenberg estimates

9

Peer group analysis Considering the particular structure of Trevi, with a vertically integrated and geographically diversified foundation division and with a higher than average construction sector profitability, BAUER can be considered as the best comparable for the Italian company.

Peer-group-comparison

04.12.07 2007e 2008e 2009e 2007e 2008e 2009e 2007e 2008e 2009e 2007e 2008e 2009eBauer 1.1 0.9 0.8 6.8 5.9 5.2 10.0 9.0 8.0 14.1 12.6 11.0Trevi 1.2 1.0 0.8 8.4 6.8 5.5 11.1 8.6 6.8 16.9 12.8 9.9

premium (+) / discount (-) 10.9% 3.6% -2.9% 24.8% 14.2% 4.0% 10.9% -3.8% -15.5% 19.7% 1.3% -9.6%Source: Berenberg Bank

EV / Sales EV / EBITDA EV / EBIT PER

Peer-group-comparison

04.12.07 2006 2007e 2008e 2009e average '06-'09 2006 2007e 2008e 2009e 2006 2007e 2008e 2009eBauer 16.0% 20.5% 20.1% 20.3% 19.2% 1.8 1.9 1.9 1.9 8.7% 10.7% 10.5% 10.5%Trevi 16.1% 20.0% 24.3% 28.8% 22.3% 1.8 1.9 2.1 2.4 9.0% 10.7% 11.3% 12.0%

premium (+) / discount (-) 1.0% -2.2% 20.9% 41.6% -2.4% -2.2% 12.3% 23.2% 3.5% 0.0% 7.7% 14.9%Source: Berenberg Bank

ROCE EBIT marginCapital turnover

On the back of the higher expectations in terms of EBIT margin and capital turnover for the period 2008-09e, Trevi should report in the next couple of years a higher ROCE compared to BAUER. The higher returns are mainly driven by the mechanical division (above all by oil drilling equipment) which is increasing its weight in the company’s P&L and has a higher capital turnover compared to the average. At the current market price, Trevi is discounted compared to BAUER both in terms of 08-09e EV/EBIT and 09e PER.

10

Theme: low risks and potential catalysts

Low risks thanks to the strong geographical diversification

The low exposure to the residential sector gives Trevi further appeal

Potential M&A activity in drilling division could boost the stock price

Panama Canal expansion

Low risk thanks to diversification Considering the current market situation, with a low visibility on the trend of the main mature economies, Trevi is able to reduce the risk thanks to: • The strong geographical diversification that allows Trevi to benefit from

the current emerging markets’ GDP growth • The presence in mature markets, such as the US where the sinking GDP

growth could be the reason for increasing government spending in the infrastructure sector

Low exposure to the residential sector At present, Trevi, with a focus on special foundations, could be considered as a defensive stock in the construction sector, thanks to the low exposure to the weak residential division. Panama Canal enlargement In October 2006, Panama approved the expansion project of its Canal in order to double the number of ships in transit per year. The expansion works should last 8 years, starting in the second part of 2008, regarding 81km length of the whole Canal. Even considering it is too early to estimate a potential impact on Trevi’s P&L (the total project is worth $5.3bn), a potential awarding of orders to Trevi (more likely partial, due to the large dimension of the order) is supposed to be an important trigger for the stock price. The tender should take place by the end of H1 08e. M&A could boost the drilling evaluation A potential M&A activity related to Drillmec and Petreven could be an important catalyst for Trevi, pushing the valuation of the drilling division. A potential IPO of one of the drilling companies (such as Drillmec) would allow Trevi to collect cash in order to make acquisitions. In this case, the M&A activity would give Drillmec the opportunity for: • Increasing the product range on offer • Increasing the dimensions in terms of production capacity and market

share

In the short term In the medium to long term

11

Sustainability of returns and long-term value

1. Capital employed As a consequence of the full integration between services and equipment, both in the foundation and drilling divisions, Trevi has a different capital employed structure compared to the other players of the construction sector (which have a high incidence of the net working capital). Of € 418m of Trevi´s capital employed, roughly € 200m are represented by fixed assets (€ 192m property, plant and equipment), with a stronger incidence of the two services divisions which account for € 150m of fixed assets. These fixed assets are mainly related to the equipment and machines bought by drilling and foundations services divisions such as rotary rigs, tunnelling equipments, diaphragm wall equipment, drilling machines: in 2006, 95% of total capex (€ 56m) was spent by Petreven and Trevi SPA. In 2006, out of € 56m total capex, 35% (€ 20m) were related to maintenance. Considering the strong growth rate expected for the drilling division, this amount should increase in the next three years until the level of € 30m. Maintenance capex is mainly related to the substitution of the equipment related to services which has an average life in the range of 10-15 years. 33% of the 2006 capital employed is working capital (see question 3 for more details) and the remaining part is represented by cash (roughly € 90m). Out of a total working capital of € 128m, the equipment division has the higher weight (56% at € 71m) mainly on the back of the higher level of inventories.

Does the ownership of this capital represent a Yes competitive strength?

The ownership of the capital (and the strong vertical integration) represents an important Trevi strength, for both the drilling and the foundation divisions. In the drilling division, the HH machine, developed by Drillmec, is the basis of the success of Petreven in drilling services. The better performance and lower drilling costs are mainly related to the Drillmec equipment. Even though the hydraulic system, which is the basis of success of the HH machine, is a technology with a low level of complexity, its application to drilling business and the know-how in process developed by Petreven in the last five years can give Trevi a good competitive advantage. In the services division, the ownership of the equipment is important as well. Compared to local players, the ownership of a large range of equipment (and a higher level of net invested capital) allows Trevi to be competitive in many works characterised by different space/soil conditions and also participate in the largest bids where a solid balance sheet could be requested.

12

Is working capital significant? Yes After the good improvement of the 2002-04 period, the Trevi working capital is expected to slightly increase in the next few years, on the back of the higher growth rate of the equipment division that should involve a higher incidence of inventories. Overall, the level of working capital on the capital employed seems to be well managed and substantially in line with the average. Historically, the main issue was represented by the accounts receivable (37% of sales in 2005): Trevi, mainly thanks to the equipment division’s higher growth rate (compared to services), was able to increase the level of advance payment from customers, decreasing the incidence on both total sales and capital employed.

0%10%20%30%40%50%

04 05 06 07e 08e

Working capital / CEAverage

Is capital intensity appropriate for this sort of business? Yes Being at the same time both services and equipment provider and operating in the difficult and more challenging sector (compared to construction) of special foundations, with a second focus on the oil drilling division, Trevi has a particular capital structure compared to both the normal construction sector players and the common machine providers. The low capital intensity related to the equipment division, well balanced by the higher capital intensity of the services division has led Trevi to reach a 2007e ROCE of 20%, substantially in line with main competitor BAUER. The end of the start-up phase of Drillmec (oil drilling equipment) and the biggest dimension of Trevi’s new orders in foundation services should further increase the level of the expected ROCE.

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capital turnover

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atin

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Trevi Bauer

Bilfinger

Keller

Hochtief

FKI

SandvikAtlas

ROCE (%)

Source: Company data, Berenberg estimates

13

Is the current level of capital efficiency sustainable? Yes The current level of capital efficiency is sustainable and could also improve, following the increasing incidence of the equipment division (06-09e sales CAGR at 28.2% vs +12.8% of services division) that has a higher capital turnover ratio (2.4x in 2006) compared to the services division (1.6x). In terms of capacity utilisation, in the equipment division, thanks to the high level of production outsourced (based on a wide range of suppliers), Trevi is able to further increase the level of volumes with the same level of capital employed. On the contrary, in the services division, there is less room to increase production capacity, without raising the capital employed, with regard to both foundations and oil drilling.

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Is the capex cycle currently in the investor’s favour? Yes and NO Yes, with regard to the equipment division that has just finished the start-up phase related to oil-drilling machines and that has just started to launch some new products in the foundations division. No, with regard to the services division that is expected to increase again through expansion capex. Overall, after the peak achieved in 2006, the level of total capex (maintenance + expansion) is expected to decrease in the following period.

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Gross capex as % of salesMaintenance capex as % of sales

Can the company afford its capital requirement? Yes Excluding 2006, impacted by a particularly high level of expansion capex, Trevi has always been able to afford its capital requirement, generating a positive excess cash flow. Considering the next few years, Trevi should be able to increase the excess cash flow, on the back of both a lower level of expansion capex and increasing operating cash-in.

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100

150

03 04 05 06 07e 08e

EUR

m

Cash flowCapital requirements

2. P&L environment Is the company’s pricing environment positive? Yes Overall, the Trevi price environment is positive. The decreasing gross margin is mainly related to the different sales breakdown in terms of services and equipment (the latter experiencing a higher growth rate). Foundation division Due to the high complexity level of foundations services related to some public infrastructures, the price of the order is not a key factor in the final decision of the contractor. The expected duration of the works,

0%

20%

40%

60%

80%

03 04 05 06 07e 08e

Gross margin

14

the level of personal safety, the complexity of the activities and equipment requested are the real strengths for winning the tender bid and the main drivers of the final selling prices. Thanks to both the favourable competitive landscape (the three main players, including Trevi, have a global market share of roughly 70%) and the positive market trend (high growth of demand), the selling prices of the equipment division are expected to increase in the 2007-08e period, by 7% and 3%, respectively. Drilling division Thanks to the strong performance of the HH drilling machine, well recognised by customers, Trevi has a good pricing power in both drilling services and equipment, being able to apply higher prices (compared to the average of the market) by 5%. On the costs side, in terms of raw materials, Trevi has an exposure to both concrete (10% of total operating costs) and steel (less than 10% of total operating costs) prices: fluctuations are generally passed on to customers. Sometimes, raw materials are directly provided by customers. Is the cost base well controlled? Yes Trevi in the last three years showed a strong labour cost control, reducing its incidence on sales from 23.4% of 2003 to 16.3% of 2006 (15.7% expected on 2007), thanks to 1) increasing outsourcing related to some production phase at a low value added; 2) the end of the start-up phase related to Drillmec, 3) the increasing geographical diversification in low labour-cost countries and 4) the different order backlog breakdown, with an increasing weight of works with a higher value added.

85.0%

87.0%

89.0%

91.0%

93.0%

03 04 05 06 07e 08e

0

50100

150200

250

Opex/Value of productionSales per employee (1000 EUR)

Is the company operationally geared? No Out of the total cost base, fixed costs represent only 25.3% in 2006. Such a low level of operational gearing is mainly related to the equipment production that is mainly based on outsourcing production of a high part of components. Fixed costs are mainly related to labour cost (16.3% of sales), depreciation and amortisation (3.7% of sales), and other (4.3% of sales). Among the variable costs, the main account is related to purchases of raw materials and other work in process that has an incidence of 49% on sales.

0

5

10

15

20

03 04 05 06 07e 08eOper. leverage Average

15

3. Solvency Does the company carry debt? Yes After the extraordinarily high level of 2006 capex, Trevi accounted for € 175.8m of the net financial position, that means a D/E of 1.4x. Out of € 265m of gross debt, roughly € 200m are related to long-term debt (three years of duration, 5.5% interest rate). In 2006, Trevi issued a convertible bond for an amount of € 70m (fixed interest rate at 1.5%): with a strike price of € 11.30; the convertible option is currently in the money. The interest cover, at 3.8x in 2006, is expected to move to 6.8x in 2007e and the D/EBITDA should move from 2.1x of 2006 to 1.5x of 2007e.

-50%

0%

50%

100%

150%

200%

03 04 05 06 07e 08e

Net gearing Average

4. Returns Are returns sufficient? Yes Yes. With a ROCE of 16% in 2006, Trevi’s returns are sufficient to cover the average cost of capital and let us expect a further increase in the next couple of years (2007e ROCE expected at 20%).

0 %

4 %

8 %

12 %

16 %

2 0 %

Average ROCE Average WACC

Are returns cyclical? Yes and NO Yes, overall - the construction sector is cyclical and strictly related to the GDP growth of the different countries. No for both the special foundation niche and Trevi that are characterised by different situations. First of all, special foundations are less impacted by the residential sector trend and more driven by the public infrastructure sector. Secondly, the strong geographical differentiation allows Trevi, and the other global players, to more than offset the weakness of some mature markets through the strong growth of the emerging markets, such as the Far East, the Mid-East and Africa.

Are returns sustainable? Yes The impressive track record in foundation services, the good competitive position in equipment and the bright scenario in the drilling division should allow Trevi to increase its market share, maintaining positive and improving returns that in the last three years were impacted by the start-up phase of the oil drilling division.

0%5%

10%15%

20%25%30%

03 04 05 06 07e 08eROCE

16

Does the share price reflect the quality, consistency Yes and visibility of returns?

Yes, the stock price usually reflects the quality of the company, as well as both the trend of the reference markets and the visibility of returns. Thanks to the 1-year visibility related to the order backlog, the stock price has historically traded at the fair value of the share, calculated on the basis of the following year: this means that today the stock should trade at higher than € 16 per share and, as a consequence, the potential upside is higher than 25%.

0

5

10

15

20

05 06 07e 08e 09e

€ pe

r sha

re

0

1

2

3

4

Yr. high share price Fair share price ROCE/hurdle

Calculation assumptions: • Capital turnover: net sales / average capital employed (ie shareholder’s equity + minority interest + provisions

and accrued liabilities + interest-bearing liabilities) • Fair share price: assumes that investors seek to purchase assets at such a price (EV) that the cash flow return

(operating profit + depreciation + amortisation – maintenance capex) exceeds their opportunity costs (10%) • Gross capex: capex + payments for acquisitions • Cash flow: cash flow before working capital changes • Capital requirements: capex + payments for acquisitions + working capital changes • Average ROCE and WACC are calculated pre-tax, arithmetic mean of 2001-2006e • Operating leverage: measures the impact of changes in sales on changes in EBIT (example: given an op. lev. of

6x, a 10% sales increase would lead to a 60% increase in EBIT assuming all costs except COGS remain stable)

17

Competitive analysis

Focus on special foundations engineering and oil drilling rigs

Differentiation is represented by 1) higher safety, 2) experience with different scenarios, 3) environmental protection and 4) reduced lead times

The first mover in oil drilling investing in hydraulic applications, granting better drilling performance (+30%) and cost reduction

Sustainable returns guaranteed by the impressive track-record (KNOW-HOW), global presence (SCALE) and the R&D activity

SPECIAL FOUNDATION DIVISION In the construction sector, foundations are generally intended for transferring structures’ loads to the ground. In particular, Trevi has a focus on special foundations, which are works generally related to the public infrastructure sector and characterised (compared to normal foundations) by: • Larger dimensions: in the case of most public infrastructure projects,

such as dams, bridges, airports, undergrounds or highways, the relating foundations are significantly larger in terms of dimension compared to normal residential foundations, requiring different techniques (for working in larger space) and special equipment (with a faster drilling speed).

• Larger depths: particularly in the case of geotechnical and marine orders, the depth of the works could be extremely deeper compared to normal foundations, needing a higher knowledge of the soil and different equipment (for example, with a more powerful torque).

• Space restrictions: this is one of the main features of special foundation works. Waterproofing and consolidation works of an already operating dam or bridge, or the underground foundations of a metropolitan area are the typical example of works in space restrictions. Working in these conditions requires to have both special machines, at the same time lighter, more agile and with a good level of performance, and a particular careful project management in order to assure a good level of safety and environmental protection;.

• Very tough ground conditions: operating on a global basis in special

foundations means to excavate in a wide variety of soils, dry or water-logged, loose or cohesive, with different structure and density, requiring different variety of equipments and methods.

• Challenging environmental conditions: some works at extremely high

altitude (such as in South America), at particularly low (-50° degrees in Canada) or high (+53° degrees in Iran) temperatures, are typically related to special foundations works that require special techniques and project management.

The challenging side of the construction sector

18

The FOCUS on a “niche” of special foundation engineering In 50 years of history, Trevi has developed a worldwide FOCUS on special foundation engineering, both in terms of: • Services (3-6% market share) as the fourth largest global player after

Keller, Soletanche and BAUER, and • Equipment, as the second player, after BAUER (that has a 37% market

share), with a global market share of 18% Trevi and BAUER are the only two players that are vertically integrated (providing services and equipments) and have a global presence. The historical order backlog analysis shows that Trevi could be considered as a specialist in deep foundations, water well drilling, tunnels’ consolidation and execution, recovery of polluted areas, with a focus on geotechnical and marine works, and particularly in: • Foundation for dams, with a track record of more than 30 dams built of

restructured during the last 7 years • Foundations for bridges, with a track record of 7 big bridges built of

restructured during the last 7 years • Foundations for quays of harbours, with a track record of 9 works

developed during the last 7 years Trevi’s DIFFERENTIATION is related to KNOW-HOW and SCALE, both based on the vertical integration and geographical diversification 1) KNOW-HOW … Trevi has developed a strong know-how over the years (that few players have) and a solid track record (well recognised by customers) for working in very difficult situations. Waterproofing and consolidation of an already existent and operating dam, for example, with drilling depths that are often deeper than 150m and with particular space restrictions, such as the construction of a diaphragm wall from a floating barge or executed from the dam crest, is a kind of work that requires both a particular knowledge of the process and the use of dedicated equipment that is the result of a long and worldwide experience, very difficult to reproduce and that allows Trevi to guarantee to customers: • The shortest lead time • The highest safety • The best environmental protection The global track record of Trevi in some particular works, such as dams, bridges and harbours, underlines the deep know-how accumulated in geotechnical and marine works, whereas the high number of acknowledgements received as best contractor demonstrate that these expertises are well recognised by the customers.

A leading position in geotechnical-marine works

Testified by many acknowledgements of customers … ... on a global basis

19

For local and smaller players in foundation services, the scarcity of know-how and track record, the lack of adequate equipment and the lower dimensions in terms of capital employed represent the biggest barriers to entry in the main tender contracts. Compared to its international competitors, the main barriers to entry (and differentiation) are represented by the track record developed in both particulars works (such as dams, harbours and bridges) and countries (such as the US, Philippines, Argentina, Venezuela, Nigeria, Algeria and the Mid-East) where Trevi plays a leading role. It is meaningful that Trevi was awarded for consolidating the foundations of the Tuttle Creek dam in the US that represents not only the most considerable job ever awarded by the US Army Corps of Engineers, but also the largest intervention ever executed in the world on an operating dam. The strong know-how developed by Trevi in working in particularly difficult situations is also reflected in the equipment provided for special foundations. The machines for special foundations differ from those for normal foundations both in terms of: • Dimensions: equipment in some circumstances is requested to be larger

and more powerful compared to normal machines, in order to reduce the rigging time in larger spaces, or in other circumstances is requested to be lighter and more agile in order to both decrease transportation costs and work in situations with space restrictions

• Performances and technologies: larger space conditions, different ground conditions and profounder depth could require more powerful rotary or sometimes even different technologies

The vertical integration of the company, which produces machines and provides services, gives Trevi a double competitive advantage: 1) On the one hand, the company can develop machines with technological innovation based on both R&D activity and the experience in services globally provided. 2) On the other hand, the sustained innovation in equipment allows Trevi to be awarded the most demanding bid contracts. The result is always innovative equipment which covers: • A wide range of activities • A wide range of dimensions • A wide range of power 2) … and SCALE Compared to regional players, scale is an unquestionable competitive advantage of Trevi, both in terms of foundations services and equipment. 45 direct distributors worldwide (and 80 independent) for the equipment division and the direct coverage through operating companies in 17 countries for the services division have allowed Trevi to become:

An important track-record … … including the restructuring works of the biggest operating dam The know-how in services reflected in equipment division

More than 120 distributors …

20

• The second player worldwide in the equipment division, with an estimated market share of roughly 18%: the two main competitors are BAUER (market leader, 37% estimated market share, providing a range of products of bigger dimensions) and Casagrande (third player, roughly 15% market share). Overall, the first three players have an estimated market share of 70%.

• One of the four main players with BAUER, Keller and Soletanche in the services division

Source: Company data The strong geographical diversification and the scale, based on the impressive distribution network (difficult to copy), allow Trevi: • To provide a wider range of products, compared to local players, in

terms of dimension, power and tools, at a lower production cost • To provide substitution parties produced on scale and not tailor-made • To provide a prompt assistance service SUSTAINABLE RETURNS in a market with too HIGH BARRIERS TO ENTRY Dimension (in term of capital employed)/scale/geographical diversification and the know-how developed in 50 years in the niche of special foundations should allow Trevi to further improve its current returns in a market where the level of competition is expected to remain unchanged. OIL DRILLING DIVISION Trevi in the last four years has entered the huge market of oil/gas drilling that accounts for more than 2,170 drilling rigs worldwide (excluding Russia and China), with an innovative machine called the HH model, focused on on-shore drilling and reaching a depth of 4,000 meters.

... for being competitive in many local markets HH model: focus on on-shore drilling …

VenezuelaTrevi Cimentaciones C.A.

U.S.A.Trevi Icos Corporation (Boston)Trevi Icos South Inc.

MozambiqueProfuro Lda

NigeriaTrevi Foundations

U.A.E.Swissboring

OmanSwissboring

AlgeriaTrevi Algerie

GermanySpezialtiefbau GmbHSwedenHercules Trevi Foundations A.B.

Italy Trevi S.p.A. (Cesena)RCT S.r.l. (Milano)

Hong KongTrevi Construction

PhilippinesTrevi Philippines Inc.

JapanSoilmec Japan

ChinaR. officeHong KongSoilmec H.K. Ltd

SingaporeSoilmec Far East Ltd

ItalySoilmec S.p.A. (Cesena)PSM S.r.l. (Treviso)

Italy (Piacenza)DRILLMEC S.p.A.EDRA S.r.l.

U.S.A.Drillmec Inc.

ArgentinaPilotes Trevi

ColombiaPetreven Colombia

CanadaTrevi Foundations Canada Inc.

QatarSwissboring

IranTrevi Iran Branch

New ZealandTrevi Construction

FranceSoilmec France

PeruPetreven PerùBranch

Petreven - UTE

Petreven Venezuela

UKSoilmec Ltd

AustriaTrevi Branch

IndiaSoilmec India

VenezuelaTrevi Cimentaciones C.A.

U.S.A.Trevi Icos Corporation (Boston)Trevi Icos South Inc.

MozambiqueProfuro Lda

NigeriaTrevi Foundations

U.A.E.Swissboring

OmanSwissboring

AlgeriaTrevi Algerie

GermanySpezialtiefbau GmbHSwedenHercules Trevi Foundations A.B.

Italy Trevi S.p.A. (Cesena)RCT S.r.l. (Milano)

Hong KongTrevi Construction

PhilippinesTrevi Philippines Inc.

JapanSoilmec Japan

ChinaR. officeHong KongSoilmec H.K. Ltd

SingaporeSoilmec Far East Ltd

ItalySoilmec S.p.A. (Cesena)PSM S.r.l. (Treviso)

Italy (Piacenza)DRILLMEC S.p.A.EDRA S.r.l.

U.S.A.Drillmec Inc.

ArgentinaPilotes Trevi

ColombiaPetreven Colombia

CanadaTrevi Foundations Canada Inc.

QatarSwissboring

IranTrevi Iran Branch

New ZealandTrevi Construction

FranceSoilmec France

PeruPetreven PerùBranch

Petreven - UTE

Petreven Venezuela

UKSoilmec Ltd

AustriaTrevi Branch

IndiaSoilmec India

21

In a sector where equipment is traditionally based on mechanical technology, Trevi, driven by the experience accumulated in the foundation equipment division, has developed the HH machine which is DIFFERENTIATED by the use of hydraulic systems. The use of hydraulic systems allows Trevi to provide a high quality product in terms of performance, dimensions and safety, generating VALUE for its customers mainly thanks to: • An average reduction of drilling costs by 30% • An average reduction of transport cost by 40% • An average increase of drilling performance by 30% • A reduction of occupied area by 75% • A strong reduction in the number of accidents The value provided by HH machines is well perceived by Trevi customers, which are prepared to pay a higher price (+5%) compared to the average of the market. The growing distribution network, made up by 10 direct distributors, also supported by the bigger Soilmec distribution network, can allow Trevi to develop economies of SCALE, reducing the weight of R&D costs and widening the range of products. Despite the small global market share … Today, providing both drilling services and equipment, with 89 HH drilling machines ordered worldwide or to be delivered in a few years, in a market where the main players are many times bigger, Trevi is playing the game of newcomer, gaining a small global market share (4.5%, considering both HH machines and traditional equipment) with a wide geographical diversification (US 0.5% to move to 2%, Latin America 4.8%, Africa 7.4%). … TIME is playing into Trevi’s hands … Even though the hydraulic applications are a widely available technology, Trevi was able to achieve such positive results in the oil drilling sector mainly thanks to the long experience related to the foundation equipment division. Although there is no doubt that other sector players will in the future launch machines as competitive as Trevi’s, this is certainly unlikely to happen in the short term. It is more likely for another newcomer like BAUER (that has accumulated the same know-how as Trevi) to launch a hydraulic drilling machine in the short term rather than one of the main sector players which a have long time lag in applying this kind of technology. … giving the opportunity to increase market share Being the first mover, it is clear that Trevi has the opportunity to grow its market share, widening the product range with equipment able to drill at a higher depth (from the currently achieved depth of 4,000m to the higher level of 6,000m) or developing machines with a focus also on off-shore rigs.

… with a first-in-class machine … … appreciated by customers

22

Financials

Profit and loss account (mill. EUR) 2005 2006 2007e 2008e 2009e Sales 497 642 798 953 1,118 Own work capitalised 10 33 41 49 57 Total sales 507 675 839 1,002 1,175 Other operating income 0 0 0 0 0 Material expenses 220 315 394 472 555 Personnel expenses 94 105 122 145 166 Other operating expenses 143 174 211 247 287 EBITDA 49 82 113 138 167 Depreciation 19 22 25 27 30 EBITA 30 60 88 111 138 Amortisation of goodwill 0 0 0 0 0 Amortisation of intangible assets 2 2 2 3 3 Impairment charges 0 0 0 0 0 EBIT 29 58 85 108 135 Interest income 2 2 2 2 1 Interest expenses 5 18 14 12 10 Other financial result 0 0 0 0 0 Financial result -3 -15 -12 -11 -9 Income on ordinary activities before taxes 25 43 74 98 126 Extraordinary income/loss 0 0 0 0 0 EBT 25 43 74 98 126 Taxes 12 15 26 35 45 Net income from continuing operations 14 28 47 62 80 Income from discontinued operations (net of tax) 0 0 0 0 0 Net income 14 28 47 62 80 Minority interest 1 1 2 3 3 Net income (net of minority interest) 13 27 45 60 77 Source: Company data, Berenberg estimates

23

Profit and loss account (common size) 2005 2006 2007e 2008e 2009e Sales 98.0 % 95.1 % 95.1 % 95.1 % 95.1 % Own work capitalised 2.0 % 4.9 % 4.9 % 4.9 % 4.9 % Total sales 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Other operating profit 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Material expenses 43.4 % 46.6 % 46.9 % 47.1 % 47.2 % Personnel expenses 18.6 % 15.5 % 14.6 % 14.5 % 14.2 % Other operating expenses 28.3 % 25.8 % 25.1 % 24.6 % 24.4 % EBITDA 9.9 % 12.8 % 14.1 % 14.5 % 15.0 % Depreciation 3.7 % 3.3 % 3.0 % 2.7 % 2.5 % EBITA 6.1 % 9.3 % 11.0 % 11.6 % 12.3 % Amortisation of goodwill 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Amortisation of intangible assets 0.3 % 0.2 % 0.3 % 0.3 % 0.3 % Impairment charges 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % EBIT 5.8 % 9.0 % 10.7 % 11.3 % 12.0 % Interest income 0.3 % 0.3 % 0.2 % 0.2 % 0.1 % Interest expenses 1.0 % 2.6 % 1.7 % 1.2 % 0.8 % Other financial result 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Financial result -0.7 % -2.3 % -1.4 % -1.1 % -0.8 % Income on ordinary activities before taxes 5.0 % 6.3 % 8.8 % 9.7 % 10.7 % Extraordinary income/loss 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % EBT 5.0 % 6.3 % 8.8 % 9.7 % 10.7 % Tax rate 45.8 % 34.4 % 36.0 % 36.0 % 36.0 % Net income from continuing operations 2.7 % 4.1 % 5.6 % 6.2 % 6.8 % Income from discontinued operations (net of tax) 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % Net income 2.7 % 4.1 % 5.6 % 6.2 % 6.8 % Minority interest 0.2 % 0.2 % 0.2 % 0.3 % 0.3 % Net income (net of minority interest) 2.5 % 4.0 % 5.4 % 6.0 % 6.6 % Source: Company data, Berenberg estimates

24

Balance sheet mill. EUR 2005 2006 2007e 2008e 2009e Intangible assets 4 5 5 7 7 Property, plant and equipment 168 192 209 227 244 Financial assets 3 2 2 2 2 Fixed assets 175 200 217 236 254 Inventories 120 169 221 265 314 Accounts receivable 183 226 277 331 388 Other current assets 0 0 0 0 0 Liquid assets 52 90 77 54 34 Deferred taxes 13 19 23 27 32 Other accruals 8 8 10 12 14 Current assets 376 512 607 689 782 TOTAL 551 712 824 926 1,035 Shareholders’ equity 97 122 164 217 285 Minority interest 5 5 7 10 13 Long-term debt 95 197 180 150 120 Pension provisions 23 25 25 25 25 Other provisions 0 0 0 0 0 Non-current liabilities 119 222 205 175 145 Short-term debt 82 69 60 50 40 Accounts payable 215 255 341 418 490 Advance payments 0 0 0 0 0 Other liabilities 2 3 4 5 5 Deferred taxes 31 36 43 51 56 Other accruals 0 0 0 0 0 Current liabilities 330 362 448 524 592 TOTAL 551 712 824 926 1,035 Balance sheet (common size) 2005 2006 2007e 2008e 2009e Intangible assets 1 % 1 % 1 % 1 % 1 % Property, plant and equipment 31 % 27 % 25 % 25 % 24 % Financial assets 1 % 0 % 0 % 0 % 0 % Fixed assets 32 % 28 % 26 % 26 % 24 % Inventories 22 % 24 % 27 % 29 % 30 % Accounts receivable 33 % 32 % 34 % 36 % 37 % Other current assets 0 % 0 % 0 % 0 % 0 % Liquid assets 9 % 13 % 9 % 6 % 3 % Deferred taxes 2 % 3 % 3 % 3 % 3 % Other accruals 1 % 1 % 1 % 1 % 1 % Current assets 68 % 72 % 74 % 74 % 76 % TOTAL 100 % 100 % 100 % 100 % 100 % Shareholders’ equity 18 % 17 % 20 % 23 % 28 % Minority interest 1 % 1 % 1 % 1 % 1 % Long-term debt 17 % 28 % 22 % 16 % 12 % Pension provisions 4 % 3 % 3 % 3 % 2 % Other provisions 0 % 0 % 0 % 0 % 0 % Non-current liabilities 22 % 31 % 25 % 19 % 14 % Short-term debt 15 % 10 % 7 % 5 % 4 % Accounts payable 39 % 36 % 41 % 45 % 47 % Advance payments 0 % 0 % 0 % 0 % 0 % Other liabilities 0 % 0 % 0 % 0 % 1 % Deferred taxes 6 % 5 % 5 % 6 % 5 % Other accruals 0 % 0 % 0 % 0 % 0 % Current liabilities 60 % 51 % 54 % 57 % 57 % TOTAL 100 % 100 % 100 % 100 % 100 % Source: Company data, Berenberg estimates

25

Cash flow statement mill. EUR 2005 2006 2007e 2008e 2009e Net profit/loss 14 28 47 62 80 Depreciation of fixed assets 19 22 25 27 30 Amortisation of goodwill 0 0 0 0 0 Amortisation of intangible assets 2 2 2 3 3 Other -2 2 0 0 0 Cash flow from operations before changes in w/c 32 53 74 92 113

Change in inventory -29 -49 -52 -44 -48 Change in accounts receivable -85 -43 -51 -54 -57 Change in accounts payable 105 39 86 77 72 Change in other working capital positions 4 0 1 3 -1

Change in working capital -4 -52 -15 -18 -35 Cash flow from operating activities 28 1 60 75 79 Maintenance capex 20 20 25 26 28 Cash flow from operating activities after maintenance 8 -19 35 49 51 Capex, excluding maintenance 5 36 25 24 22 Payments for acquisitions 0 0 0 0 0 Financial investments -1 -1 0 0 0 Income from asset disposals 0 0 0 0 0 Cash flow from investing activities -24 -55 -50 -50 -50 Cash flow before financing 4 -54 10 25 29 Increase/decrease in debt position 31 88 -26 -40 -40 Purchase of own shares 0 0 0 0 0 Capital measures 0 0 0 0 0 Dividend paid 1 2 3 7 9 Others -18 6 6 0 0 Effects of exchange rate changes on cash 0 0 0 0 0 Cash flow from financing activities 13 92 -23 -47 -49 Increase/decrease in liquid assets 17 38 -13 -22 -20 Liquid assets at end of period 52 90 77 54 34 Source: Company data, Berenberg estimates Growth rates yoy in % 2005 2006 2007e 2008e 2009e Sales 35.7 % 29.3 % 24.3 % 19.3 % 17.3 %

organic growth - - - - - external growth - - - - -

EBITDA 40.2 % 66.7 % 37.3 % 22.7 % 21.2 % EBIT 57.8 % 96.5 % 46.8 % 26.4 % 24.3 % Net profit 357.8 % 103.9 % 68.5 % 32.6 % 28.9 % EPS reported (1) 442.2 % 108.7 % 68.5 % 32.6 % 28.9 % EPS recurring (2) 442.2 % 108.7 % 68.5 % 32.6 % 28.9 % Note: 1) before goodwill amortisation; 2) after goodwill amortisation, adj. for non recurring items. Source: Company data, Berenberg estimates

26

Y/E 31.12., IFRS 2005 2006 2007e 2008e 2009e Regional sales (mill. EUR) Domestic 98 109 136 149 157 Rest of Europe 54 85 137 191 239 NAFTA 56 89 85 85 98 Asia/Pacific 151 198 222 236 252 Rest of world 137 161 219 291 372 TTL 497 642 798 953 1,118 Regional sales shares Domestic 19.8 % 17.0 % 17.0 % 15.7 % 14.0 % Rest of Europe 11.0 % 13.2 % 17.1 % 20.1 % 21.4 % NAFTA 11.2 % 13.9 % 10.7 % 9.0 % 8.8 % Asia/Pacific 30.4 % 30.8 % 27.8 % 24.8 % 22.5 % Rest of world 27.6 % 25.1 % 27.4 % 30.5 % 33.3 % TTL 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Source: Company data, Berenberg estimates

27

Ratios 2005 2006 2007e 2008e 2009e

Asset utilisation efficiency Capital employed turnover 1.8 1.8 1.9 2.1 2.4 Operating asset turnover 1.9 1.9 2.2 2.4 2.5 Plant turnover 3.0 3.3 3.8 4.2 4.6 Inventory turnover 4.1 3.8 3.6 3.6 3.6

Operational efficiency Operating return 19.2 % 24.6 % 30.8 % 34.1 % 36.8 % Total operating costs / sales 92.1 % 92.4 % 91.0 % 90.6 % 90.2 % Sales per employee (EUR k) 152.6 164.8 177.3 183.7 188.3 EBITDA per employee (EUR k) 15.1 21.0 25.0 26.6 28.2 EBIT margin 5.8 % 9.0 % 10.7 % 11.3 % 12.0 %

Return on capital EBIT / Y/E capital employed 9.5 % 13.9 % 19.6 % 23.9 % 27.8 % EBIT / avg. capital employed 10.6 % 16.1 % 20.0 % 24.3 % 28.8 % EBITDA / Y/E capital employed 16.3 % 19.6 % 25.8 % 30.6 % 34.7 % EBITDA / avg. capital employed 18.1 % 22.8 % 26.4 % 31.1 % 35.8 %

Return on equity Net profit / Y/E equity 13.2 % 21.9 % 27.5 % 27.6 % 27.0 % Recurring net profit / Y/E equity 13.2 % 21.9 % 27.5 % 27.6 % 27.0 % Net profit / avg. equity 15.9 % 24.4 % 31.5 % 31.4 % 30.7 % Recurring net profit / avg. equity 15.9 % 24.4 % 31.5 % 31.4 % 30.7 %

Security Y/E net debt or (net cash) (mill. EUR) 126 176 163 146 126 Debt / equity 182.5 % 217.9 % 146.5 % 92.2 % 56.1 % Net debt / equity 129.4 % 144.2 % 99.7 % 67.1 % 44.2 % Interest cover 5.7 3.3 6.1 8.9 13.6 EBITDA / interest paid 9.8 4.7 8.1 11.4 16.9 Altman's Z-score 1.7 1.8 2.1 2.5 3.1 Dividend payout ratio 12 % 12 % 15 % 15 % 12 %

Liquidity Current ratio 1.1 1.4 1.4 1.3 1.3 Acid test ratio 0.8 0.9 0.9 0.8 0.8 FCF / net profit 0.2 -2.0 0.2 0.4 0.4

Funds management Avg. working capital / sales 17.0 % 17.8 % 18.6 % 17.5 % 17.4 % Cash flow / sales 5.7 % 9.5 % 10.7 % 11.5 % 12.2 % FCF / sales 0.6 % -8.5 % 1.2 % 2.6 % 2.6 % Stocks in days of sales 199 196 205 205 207 Trade debtors in days of sales 135 129 127 127 127 Trade creditors in days of COGS 357 296 316 324 323 Cash conversion cycle -23 29 15 8 11 Trade creditors / trade debtors 117.4 % 112.6 % 123.2 % 126.6 % 126.4 %

Other Interest received / avg. cash 3.7 % 3.0 % 2.4 % 2.4 % 2.4 % Interest paid / avg. debt 3.1 % 8.0 % 5.5 % 5.5 % 5.5 % Capital expenditure / dep'n 115.9 % 230.4 % 184.1 % 166.3 % 151.8 % Cost per employee (EUR k) 29 27 27 28 28 Capital exp. / sales 4.8 % 8.6 % 6.3 % 5.2 % 4.5 % Maint. cap. exp./ sales 4.0 % 3.1 % 3.1 % 2.7 % 2.5 % Cash flow (mill. EUR) 28 61 86 109 136 Cash ROCE 10.4 % 16.9 % 20.1 % 24.7 % 29.1 % Free cash flow yield 1.7 % -12.9 % 1.3 % 3.2 % 3.8 % Source: Company data, Berenberg estimates

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Disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG) Company Disclosures Trevi Finanziaria Industriale S.p.A. no disclosures (1) Berenberg Bank or its affiliate(s) was Lead Manager or Co-Lead Manager over the previous 12 months of a

public offering of this company. (2) Berenberg Bank acts as Designated Sponsor for this company. (3) Over the previous 12 months, Berenberg Bank and/or its affiliate(s) has effected an agreement with this

company for investment banking services or received compensation or a promise to pay from this company for investment banking services.

(4) Berenberg Bank and/or its affiliate(s) holds 5 % or more of the share capital of this company. (5) Berenberg Bank holds a trading position in shares of this company. (6) Berenberg Bank and/or its affiliate(s) a holds a net short position of 1 % or more of the share capital of this

company, calculated by methods required by German law as of the last trading day of the past month. (7) Within the last five years Berenberg Bank was a member of the issuing syndicate of this company. Historical target price and rating changes for Trevi Finanziaria Industriale S.p.A. in the last 12 months Date Target price - EUR Rating Initiation coverage 05-December-07 16.10 Buy 05-December-07 Berenberg distribution of ratings and in proportion to investment banking services Buy 60.32 % 66.67 % Sell 13.87 % 8.33 % Hold 25.81 % 25.00 % Valuation basis/rating key Buy: Sustainable upside potential of more than 10% within 12 months. Sell: Sustainable downside potential of more than 10% within 12 months. Hold: Upside/downside potential limited. No immediate catalyst visible. NB Berenberg Bank does not make recommendations on the basis of performance expected “relative“ to the market. Competent supervisory authority Bundesanstalt für Finanzdienstleistungsaufsicht –BaFin- (Federal Financial Supervisory Authority), Graurheindorfer Straße 108, 53117 Bonn and Lurgiallee 12, 60439 Frankfurt am Main, Germany

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Remarks Berenberg has made any effort to carefully research all information contained in this financial analysis. The information on which the financial analysis is based has been obtained from sources which we believe to be reliable such as, for example, Reuters, Bloomberg and the relevant specialised press as well as the company which is the subject of this financial analysis. Only that part of the research note is made available to the issuer, who is the subject of this analysis, which is necessary to properly reconcile with the facts. Should this result in considerable changes a reference is made in the research note. Opinions expressed in this financial analysis are our current opinions as of the issuing date indicated on this document. We do not commit ourselves in advance to whether and in which intervals an update is made. The companies analysed by Berenberg Bank are divided into two groups: “full coverage” - continued update - and “screening coverage” - update as and when required in irregular intervals. The document and the recommendations and estimations contained therein are not linked - whether directly or indirectly - to the compensation of the analyst responsible for the document.

The following internet link provides further remarks on our financial analyses: http://www.berenberg.de/research.html?&L=1

Please note that our research is only for the personal use of Berenberg clients. Do not pass on to third parties or make available to third parties.

Disclaimer This document has been prepared by Berenberg Bank or one of its affiliates (collectively “Berenberg“). This document does not claim completeness regarding all the information on the stocks, stock markets or developments referred to in it. On no account should the document be regarded as a substitute for the recipient’s procuring information for himself or exercising his own judgements. The document has been produced for information purposes for institutional clients or market professionals. Private customers, into whose possession this document comes, should discuss possible investment decisions with their customer service officer as differing views and opinions may exist with regard to the stocks referred to in this document. This document is not a solicitation or an offer to buy or sell the mentioned stock. The document may include certain descriptions, statements, estimates, and conclusions underlining potential market and company development. These reflect assumptions, which may turn out to be incorrect. Berenberg and/or its employees accept no liability whatsoever for any direct or consequential loss or damages of any kind arising out of the use of this document or any part of its content. Berenberg may act as market-maker or underwrite issues for any securities mentioned in this document, derivatives thereon or related financial products or perform or seek to perform capital market or underwriting services. Berenberg reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without Berenberg’s prior written consent. Remarks regarding foreign investors The preparation of this document is subject to regulation by German law. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. United Kingdom This document is meant exclusively for institutional investors and market professionals but not for private customers. It is not for distribution to or the use of private investors or private customers. © November 2007 Berenberg

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