Press release

IFI - IFI’s Board of Directors approves Q1 2006 resultsMay 12, 2006

The Board of Directors of IFI – Istituto Finanziario Industriale S.p.A., which met today in Turin under the chairmanship of Gianluigi Gabetti, approved the results for the first three months of 2006.

The consolidated profit of the IFI Group for the first quarter of 2006 is € 41.5 million (€ 49.1 million in the first quarter of 2005). The decrease, equal of € 7.6 million, is due to the lower result reported for the period by the subsidiary IFIL.

The consolidated equity of the Group at March 31, 2006 is € 3,199.9 million (€ 3,084 million at the end of 2005). The increase of € 115.9 million is due to the consolidated profit of the Group for the period (+€ 41.5 million), the share of negative translation differences (-€ 24.6 million) and other net changes (+€ 99 million) reported principally by the subsidiary IFIL.

The net financial position of IFI S.p.A. at March 31, 2006 shows a negative € 303.1 million. This is € 25.4 million higher than at the end of 2005 (-€ 277.7 million), mainly as a result of investments made to increase the holding in the subsidiary IFIL (€ 18.4 million).

Major events

In February and March 2006, IFI purchased 4,368,876 IFIL ordinary shares (0.42% of the class of stock) on the market for an investment of € 18.4 million. At March 31, 2006, IFI held 664,860,716 IFIL ordinary shares, equal to approximately 64% of the class of stock, and 1,886,420 IFIL savings shares, equal to 4.99% of the class of stock. During the period April 1, to May 12, 2006, IFI made additional purchases on the market of 2,875,000 IFIL ordinary shares (0.28% of the class of stock) for an investment of € 14.2 million. IFI currently holds 667,735,716 IFIL ordinary shares, equal to 64.29% of the class of stock, and 1,866,420 IFIL savings shares, equal to 4.99% of the class of stock. The investment holding represents 62.23% of all capital stock.

In its meeting of March 31, 2006, the Board of Directors of IFI S.p.A., in order to reduce the company’s debt, voted to sell the entire investment in Exor Group (equal to 29.3% of capital stock) to the same Exor Group. Given that the transaction was between related parties, Citigroup Global Markets was appointed as advisor and checked the fairness of the sales price, equal to € 206.8 million (€ 60.5 per share). The transaction, carried out on April 7, 2006, allowed IFI S.p.A. to considerably reduce its debt (which today amounts to about € 111 million) and realize a gain of € 104 million at the level of IFI S.p.A. (€ 7.5 million on consolidation). On May 4, 2006, Exor Group proceeded to cancel the treasury shares it purchased, with a consequent reduction in capital stock.

Business outlook

Taking into account the motion for the distribution of dividends from 2005 profits formulated by the IFIL Board of Directors and the operating and financial effects of the sale of the investment in Exor Group, 2006 forecasts for IFI S.p.A. are for a considerably higher profit than in 2005 and a significant reduction in net debt.

On the basis of the indications formulated by the IFIL Group, the IFI Group is expected to show a profit for 2006, although lower than that of 2005, which had included non-recurring income.

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