annual report2006 “To consolidate as leading Italian General Contractor and mission enhance value, progress and well-being for the communities” main ratios ratios (million of euro) 2006 2005 2004 (percentage) R.O.S. R.O.I. R.O.E. economic items total revenues 1,072 1,021 1,054 40.0% 30.5 30.5 EBIT 78 78 71 30.0% 27.8 profit before interests 61 55 43 20.0% 15.8 15.4 net income 30 32 28 13.8 10.0% 7.3 7.6 6.7 financial items 0.0% gross self-financing margin 60 69 52 capital expenditure 109 47 50 % on total revenues 2006 2005 2004 EBIT 7.3% 7.6% 6.7% R.O.S. = EBIT / total revenues R.O.I. = EBIT / net invested capital profit before interests 5.7% 5.3% 4.1% R.O.E. = EBIT / net equity net income 2.8% 3.2% 2.7% balance sheet items (values) GEARING RATIO CURRENT RATIO QUICK RATIO total fixed assets 331 213 178 net invested capital 567 493 461 2.5 net debt (*) 281 231 115 2.0 net equity 281 256 233 1.5 1.3 1.3 1.3 1.1 1.0 1.0 0.9 1.0 1.0 0,5 0.5 (*) Net of own shares. 0.0 order backlog by lines of business 2006 2005 2004 (million of euro) GEARING RATIO = net financial indebtedness / net equity CURRENT RATIO = short-term assets / short-term liabilities 2006 2005 QUICK RATIO = total account receivables and cash / short-term liabilities 24% 47% 27% 39% ■ ■ (million of euro) EBITDA EBIT EBT 200 ■ ■ 150 126 7% 116 113 100 78 78 71 9% 61 5% 50 55 43 5% 0 1% 15% 1% 21% 2006 2005 railways and subways 3,279 2,167 2006 2005 2004 EBITDA = income before interests, taxes, depreciation and amortization roads and motorways 1,036 1,156 EBIT = income before interests and taxes seaports and airports 41 52 EBT = income before taxes hydraulic and hydroelectric power plant 325 252 net cash flow industrial and civil buildings 630 409 (million of euro) concessions 1,699 1,530 2006 2005 2004 total order backlog 7,009 5,567 net income 30 32 28 depreciation, amortization and provisions 38 45 31 dividends (8) (8) (7) gross self-financing margin 60 69 52 order backlog by geographical area turnover ratios (million of euro) (percentage) Assets turnover Inventory turnover 2006 2005 (revenues/total assets) (revenues/inventory) Italy 70% Italy 85% 4.50 4.3 ■ ■ 4.00 abroad 30% abroad 15% 3.50 3.00 3.1 2.7 ■ ■ 2.50 2.00 1.50 1.00 0.8 0.6 0.7 0.50 2006 2005 0.00 Italy 4,881 4,749 abroad 2,128 817 total order backlog 7,009 5,567 2006 2005 2004 main ratios ratios (million of euro) 2006 2005 2004 (percentage) R.O.S. R.O.I. R.O.E. economic items total revenues 1,072 1,021 1,054 40.0% 30.5 30.5 EBIT 78 78 71 30.0% 27.8 profit before interests 61 55 43 20.0% 15.8 15.4 net income 30 32 28 13.8 10.0% 7.3 7.6 6.7 financial items 0.0% gross self-financing margin 60 69 52 capital expenditure 109 47 50 % on total revenues 2006 2005 2004 EBIT 7.3% 7.6% 6.7% R.O.S. = EBIT / total revenues R.O.I. = EBIT / net invested capital profit before interests 5.7% 5.3% 4.1% R.O.E. = EBIT / net equity net income 2.8% 3.2% 2.7% balance sheet items (values) GEARING RATIO CURRENT RATIO QUICK RATIO total fixed assets 331 213 178 net invested capital 567 493 461 2.5 net debt (*) 281 231 115 2.0 net equity 281 256 233 1.5 1.3 1.3 1.3 1.1 1.0 1.0 0.9 1.0 1.0 0,5 0.5 (*) Net of own shares. 0.0 order backlog by lines of business 2006 2005 2004 (million of euro) GEARING RATIO = net financial indebtedness / net equity CURRENT RATIO = short-term assets / short-term liabilities 2006 2005 QUICK RATIO = total account receivables and cash / short-term liabilities 24% 47% 27% 39% ■ ■ (million of euro) EBITDA EBIT EBT 200 ■ ■ 150 126 7% 116 113 100 78 78 71 9% 61 5% 50 55 43 5% 0 1% 15% 1% 21% 2006 2005 railways and subways 3,279 2,167 2006 2005 2004 EBITDA = income before interests, taxes, depreciation and amortization roads and motorways 1,036 1,156 EBIT = income before interests and taxes seaports and airports 41 52 EBT = income before taxes hydraulic and hydroelectric power plant 325 252 net cash flow industrial and civil buildings 630 409 (million of euro) concessions 1,699 1,530 2006 2005 2004 total order backlog 7,009 5,567 net income 30 32 28 depreciation, amortization and provisions 38 45 31 dividends (8) (8) (7) gross self-financing margin 60 69 52 order backlog by geographical area turnover ratios (million of euro) (percentage) Assets turnover Inventory turnover 2006 2005 (revenues/total assets) (revenues/inventory) Italy 70% Italy 85% 4.50 4.3 ■ ■ 4.00 abroad 30% abroad 15% 3.50 3.00 3.1 2.7 ■ ■ 2.50 2.00 1.50 1.00 0.8 0.6 0.7 0.50 2006 2005 0.00 Italy 4,881 4,749 abroad 2,128 817 total order backlog 7,009 5,567 2006 2005 2004 ...... annual report2006 FROM LEFT TO RIGHT: VENEZUELA Los Teques Subway ITALY Naples Subway ROMANIA Bucharest-Costanta Highway ITALY Hospital in Mestre ITALY Pont-Ventoux Hydroelectric Power Plant ...... .... 2006 Annual Report 2 summary ... ...... Letter to Shareholders 4 Main events of 2006 8 Group profile 12 Summary 3 Call of the Shareholders’ Meeting 20 Consolidated Financial Statements 24 Parent Company Financial Statements 186 Other information 282 ...... ... 2006 Annual Report 4 letter to shareholders ... ...... Letter to Shareholders 5 The Chariman’s letter to Shareholders 6 ...... ... The Chairman’s letter to Shareholders Dear Shareholders, Your Company closed the 2006 fiscal year with data confirming the effectiveness of the business model adopted. During a period in which the expectations of a considerable spur on domestic ac- tivities, induced by the so-called Italian Law "Legge Obiettivo", were fulfilled only partially and in the last part of the year, the Company's income statement, howev- 2006 Annual Report er, showed better income results and revenues, as expected. The Company's pol- icy for the development of foreign activities, above all in the areas where it has 6 been carrying out its activity for decades, allowed balancing the slowdown of the domestic market, thanks to the flexibility of the operating activity allowed by the business model. Such policy gave the opportunity, on one side, to more profitably develop foreign activities and, on the other, to support general contracting and project financing activities in the domestic market, such latter activities being typically character- ized by considerable amounts and high technological contents. The successful bid for the line C of the underground of Rome, which is the most important work in terms of economic value and operational commitment awarded to a General Con- tractor in Italy in 2006, is merely an example of the meaningful business outcomes obtained by the Company during the year just ended. ... ...... ERNESTO MONTI Chairman of Astaldi S.p.A. The figures appearing from the financial statements are evidence of the strategy worked out by the Company's management and implemented by the support of all employees and collaborators. The increase in revenues by more than 5 percent, obtained in a general framework of uncertainties for the domestic market of large- size works, underlines the quality and flexibility of the Company's operating mod- el, which is the basis of the Group's equity soundness and steady economic Letter to Shareholders growth. The fiscal year just ended is the last year of the management bodies' term of of- 7 fice and of my appointment as Chairman of the Board of Directors. Therefore, I take this occasion to sincerely thank all of Astaldi's Shareholders, members of the Board of Directors, Auditors, managers and employees. I am highly proud of hav- ing contributed to the Company's development during these years and of having managed the admission of Astaldi S.p.A. in the Italian Stock Market. And, as Hon- orary Chairman, I will be able to foster my relationship with the Company which, I am confident, will keep on growing. The Chairman (Ernesto Monti) ...... ... 2006 Annual Report 8 main events of 2006 ... ...... Main events of 2006 9 2006 Main events 10 ...... ... 2006 Main events February Astaldi, as partner of a joint venture, is awarded with the gen- eral contracting for the construction of the line C of the underground of Rome February Astaldi, as leader of a joint venture, is awarded with the project fi- nance for the construction and subsequent management of the new line 5 of the underground of Milan March Final award to Astaldi, as partner of a joint venture, of the con- tract for the construction of the railway section Mecheria-Redjem Demouche, in Algeria April Astaldi, as partner of a joint venture, is awarded with the contracts for the construction of the new railway lines San Juan de Los Morros-San Fernando de Apure and Chaguaramas-Cabruta, in Venezuela 2006 Annual Report 10 April The railway project Puerto Cabello-La Encrucijada, already at an ad- FROM LEFT TO RIGHT: vanced phase of execution by Astaldi as partner of a joint venture, is supplement- ITALY New Milan Expo Fair Centre ed with new contract options ITALY Rome-Naples High-Speed Railway ITALY May The preliminary archaeological investigations for the construction of New Hospital in Mestre the new line C of the underground of Rome have been started ..