Press release

IFIL - IFIL’S Board of Directors approves first half 2006 resultsSeptember 13, 2006

The board of directors of IFIL S.p.A., which met today in Turin under the chairmanship of Gianluigi Gabetti, examined the consolidated results for the first six months of 2006.
The consolidated profit of the IFIL Group for the first half of 2006 amounts to € 189.5 million and shows a decrease of € 434.6 million compared to the consolidated profit for the first half of 2005 (€ 624.1 million) which, however, included the gain realized on the sale of the investment in La Rinascente for € 459.1 million.
The consolidated net financial position of the "Holdings System" at June 30, 2006 shows a positive € 438.8 million, with an increase of € 90.5 million compared to the position at December 31, 2005 (€ 348.3 million). The change is due to the receipt of dividends from holdings (+€ 237.6 million), the investment made in Banca Leonardo S.p.A. (-€ 46.6 million), the dividends paid out by IFIL (-€ 85.6 million) and other net changes (-€ 14.9 million).
Consolidated equity of the Group at June 30, 2006 amounts to € 5,175 million (€ 5,186 million at the end of 2005). The decrease of € 11 million is due to negative exchange differences (-€ 144.5 million), dividends paid out by IFIL (-€ 85.6 million), the fair value adjustment of the investment in SanPaolo IMI (+€ 26.7 million, after tax), the consolidated profit of the Group for the first half (+€ 189.5 million) and other net changes (+€ 2.9 million).

Major events during the first half of 2006
Investigations by Consob and the Judicial Authorities
On February 21, 2006, Consob notified IFIL S.p.A. of its objections under art. 187-septies of Legislative Decree No. 58/1998 in relation to the content of the press release dated August 24, 2005. On March 9, 2006, the company’s offices were searched by order of the Turin district attorney’s office with regard to the same facts raised in the objections by Consob. At the same time, IFIL was notified of the inquiry into its administrative responsibility under Legislative Decree No. 231/2001. Protests were lodged against the objections advanced by Consob. The administrative proceedings and the preliminary investigations by the Turin district attorney’s office are in progress.

Update on the dispute with K Capital
On May 9, 2006, the Turin Court rejected the request to cancel the resolution to increase IFIL capital stock reserved for Istituto Finanziario Industriale S.p.A. passed by the extraordinary stockholders’ meeting of IFIL held on June 23, 2003, as well as the request for compensation of damages filed by K Capital.

Investment in Banca Leonardo
On April 24, 2006, after receiving authorization from the pertinent authority, the subsidiary Ifil Investissements purchased 14,200,000 Banca Leonardo S.p.A. shares (class A stock), equal to 10% of the capital of the bank, for an investment of € 46.6 million.
Non-convertible bond issue
On June 9, 2006, following the resolution passed by the board of directors’ meeting on May 12, 2006, IFIL issued non-convertible bonds for a face value of € 200 million maturing June 9, 2011.

Operating performance by the major subsidiaries and associates
Fiat Group
Net revenues of the Fiat Group in the first half of 2006 total € 26,164 million. This is an increase of 14.7% over the corresponding period of 2005, driven by strong sales at Fiat Auto – which grew by 22.2% - and the positive performance of the principal industrial sectors. Trading profit of € 982 million (3.8% of revenues) rose by € 575 million compared to € 407 million for the same period of 2005 (1.8% of revenues). The consolidated net result (Group and minority interest) shows a net income of € 481 million (€ 510 million in the corresponding period of 2005, which, however, benefited from net unusual income of € 761 million). On the basis of its first-half results, the Fiat Group announced an upward revision of the Group’s targets for the full year 2006.

Sequana Capital Group
In the first half of 2006, the Sequana Capital Group shows consolidated profit of € 106.5 million, with an increase of 44.9% compared to the first half of 2005 (€ 73.5 million). As far as the paper business is concerned, performance was irregular: basically stable at Antalis (which contributed € 15.7 million to Sequana Capital’s result compared to € 16.1 million in the corresponding period of the prior year) and a decline on the part of ArjoWiggins, which, although it generated good cash flows during the first half of the year, contributed € 16.5 million to Sequana Capital’s result compared to € 32.5 million in the first six months of 2005. Note should be taken of the excellent performance reported by SGS in this period (an 18.5% jump in sales and a 16.4% increase in its contribution to the consolidated result of Sequana Capital compared to the first half of 2005).

Alpitour Group
Thanks in part to the 2006 Turin Winter Olympics, the consolidated figures of the Alpitour Group at April 30, 2006 show revenues of € 484.7 million, a net increase compared to the first half of the prior year (+42.7%). In a period when the season is extremely negative for the tourism business (which principally generates revenues in the summer season while structure costs are spread evenly over the entire year), the consolidated result of the Group is a loss of € 17.5 million, which is an improvement over the negative result of € 23.9 million reported in the first half of the prior year.

Juventus Football Club
During the fiscal year 2005/2006, Juventus F.C. recorded revenues of € 251.5 million (+9.7% compared to the prior year), of which € 44.2 million is nonrecurring revenues. Game revenues decreased by € 22.8 million to € 16.6 million, principally on account of lower proceeds from the U.E.F.A. Champions League and from friendly matches. The result for the fiscal year is a loss of € 21.6 million compared to a loss of € 3 million in 2004/2005 and includes
€ 13.1 million for impairments (€ 5.4 million in the prior year), of which € 12.1 million refers to the accounting amount of players’ registration rights sold during the summer transfer campaign of the 2006/2007 season.
In June, a disciplinary proceeding against Juventus began before the sports authorities at various levels of judgment and is now under arbitration before the Coni Court of Conciliation and the Court of Arbitration. The Court of Arbitration could reduce the sanctions which, at this time, among other things, require the team to play in the Serie B division during the 2006-2007 season with a 17-point penalty.

Significant events subsequent to the end of the first half of 2006
Public Exchange Offering approved by the subsidiary Sequana Capital
On September 6, 2006, the board of directors of the subsidiary Sequana Capital approved the project to place Sequana Capital’s focus on the paper sector (in which it operates through the wholly-owned subsidiaries ArjoWiggins and Antalis operate). Consequently, it approved the Public Exchange Offering of a maximum of 57.6 million Sequana Capital shares (approximately 54% of capital stock) for a maximum of 1.9 million SGS shares (23.8% of capital stock) held by Sequana Capital itself, in a ratio of 1 SGS share for every 31 Sequana Capital shares tendered in the Offering. Alternatively, the stockholders may opt to receive the price of € 21 in cash for each Sequana Capital share sold to the company. The transaction, subject to the approval of the French stock exchange commission and the extraordinary stockholders’ meeting should be concluded by the end of 2006.
The IFIL Group announced its intention to participate in the Offering by exchanging a part of the Sequana Capital shares it currently holds with SGS shares. The stake in SGS will be higher than 12%.
IFIL was advised in the evaluation of this exchange by Banca Leonardo.

SanPaolo IMI and Banca Intesa merger plan
On August 26, 2006, the boards of directors of Banca Intesa and SanPaolo IMI approved the guide lines of a merger plan to create a single banking group that would the market leader in Italy and a protagonist in the main European countries. The plan will be drawn up and authorized in its final version by November in order to be approved by the extraordinary shareholders’ meetings of the respective companies by the end of the year.

Bonds falling due
In accordance with Borsa Italiana S.p.A. instructions, IFIL provides disclosure of the fact that its bonds IFIL 2003-2006 of face value € 100 million will fall due in December 2006.

The rating assigned to IFIL’s long-term debt by Standard & Poor’s is “BBB+”, whereas the rating on short-term debt is “A-2”, with a stable outlook.
Business outlook
For fiscal 2006, IFIL S.p.A. is expected to report a profit.
On a consolidated level, taking into account the forecasts formulated by the major holdings, the IFIL Group expects to show a profit in 2006, although lower than the profit reported in 2005, which was the highest in the Group’s history.

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