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Contents

Results and significant events for the year 27

The international economy and industry trends 30

Business and financial performance in 2008 31

Performance by country and business 44

Energy project 57

Dealings with related parties 58

Information systems 60

Sustainable development 60

Engineering, technical assistance, research and development 64

Innovation 66

E-business 66

Disputes and pending proceedings 68

Significant post balance-sheet events 69

Outlook 70

Annual Report

Directors’ report

General information

Financial statements 72 Notes 76 Annexes 144

Representation pursuant to art. 154-bis paragraph 5 TUF 154

Report of the Independent Auditors 155

Consolidated financial statements

Italcementi S.p.A. Directors, Officers and Auditors 6

Professional profiles of the members of the Board of Directors and Board of Statutory Auditors 7

Call of Shareholders' Meeting 14

Italcementi Group in the world 16

Highlights 18

Italcementi S.p.A. on the Stock Exchange 19

Presentation

Financial statements 158

Report of the Independent Auditors 162

Summary of resolutions 163

Parent company financial statements

Corporate Governance 166

Annexes 206

Representation pursuant to art. 154-bis paragraph 5 TUF 212

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Italcementi S.p.A.

Via G. Camozzi, 124 - 24121 Bergamo - Italy

Share Capital € 282,548,942

Bergamo Companies Register

Company subject to management control

Italcementi S.p.A.

Via G. Camozzi, 124 - 24121 Bergamo - Italy

Share Capital € 282,548,942

Bergamo Companies Register

(6)
(7)

experienced a sharp slowdown. The repercussions of this scenario on the performance of

the Italcementi Group were reflected in a larger than expected downturn in its annual

results.

The current situation on the markets and in the world economy in general has been

described in many quarters as the worst since 1929. At that time our company had already

been active for more than fifty years: it successfully overcame the crisis by focusing on its

industrial and financial fundamentals. Today, our industrial operations are following the

example of that earlier experience and taking all the necessary steps to lower the

break-even point. Measures and sacrifices designed on one hand to cut fixed costs, on the other

to redouble efforts to raise efficiency and effectiveness in every corporate activity and

process.

As we said, this is not a new approach for Italcementi. A useful reminder appears in the

comments of chairman Cesare Pesenti in the 1930 annual report:

.

An equally important factor is a strategy to ensure the solidity of the Group’s financial and

equity structure, the cornerstone for a long-term approach in an industry subject to

significant cyclical swings. Returning to 1931, Cesare Pesenti wrote that the approach

adopted by the company

.

The undertakings and sacrifices introduced then lie at the heart of our entrepreneurial and

cultural heritage and are the values on which we have built a Group that intends to be a

long-term sustainable player.

Today, we have already identified and planned a series of measures to respond to the

current difficulties, and we expect to see the first benefits before the end of the current year.

With 2009 likely to be a very difficult year given a crisis that has assumed a systemic

dimension, we shall be working to make sure that, despite the difficulties we face and in

parallel with constant attention to our financial and capital structure, we are in a position to

respond to any opportunities for further consolidation and growth.

Carlo Pesenti

Chief Executive Officer

Giampiero Pesenti

Chairman

(8)

Italcementi S.p.A. Directors, Officers and Auditors

Antonio Catani

Honorary Chairman

Board of directors

(Term ends on approval of financial statements at 12.31.2009)

Giampiero Pesenti

1

Chairman

Pierfranco Barabani

1

Executive Deputy Chairman

Carlo Pesenti

1-2

Chief Executive Officer-CEO

Alberto Bombassei

6

Alberto Clô

3-5-6

Federico Falck

5-6

Pietro Ferrero

6

Danilo Gambirasi

Karl Janjöri

4-6

Italo Lucchini

4

Emma Marcegaglia

6

Sebastiano Mazzoleni

Yves René Nanot

1

Marco Piccinini

Ettore Rossi

6-7

Attilio Rota

1-5-6

Carlo Secchi

5-6

Emilio Zanetti

4-6

Paolo Santinoli

8

Secretary to the Board

Board of statutory auditors

(Term ends on approval of financial statements at 12.31.2008)

Acting auditors

Maria Martellini

Chairman

Claudio De Re

Claudio Cavalli

Substitute auditors

Eugenio Mercorio

Dino Fumagalli

7

Pietro Curcio

Giovanni Ferrario

Chief Operating Officer - COO

Carlo Bianchini

Manager in charge of preparing

the company’s financial reports

Reconta Ernst & Young S.p.A.

Independent Auditors

1 Member of the Executive Committee

2 Executive Director responsible for supervising the internal control system 3 Lead independent director

4 Member of the Remuneration Committee 5 Member of the Internal Control Committee

6 Independent Director (in accordance with the Voluntary Code of Conduct) 7 Member of the Compliance Committee

(9)

Board of Directors

Giampiero Pesenti

Degree in mechanical engineering – Milan Polytechnic.

1958, began working in the Technical Division of Italcementi S.p.A., the family firm

established in 1864.

1983, appointed Chief Operating Officer; 1984, Chief Executive Officer; since 2004

Chairman of Italcementi S.p.A.

1984, appointed Chairman-Chief Executive Officer of Italmobiliare S.p.A., the holding

company that controls Italcementi S.p.A., the Sirap Gema group and other finance and

banking companies.

Pierfranco Barabani

Degree in civil engineering – Milan Polytechnic.

Worked as an independent professional until 1970, when he joined Italcementi S.p.A.,

holding a variety of posts: Assistant to the Chief Operating Officer, Property Manager,

Corporate General Affairs Manager.

1993, appointed Chief Operating Officer and held the post until September 1999.

Carlo Pesenti

Degree in mechanical engineering – Milan Polytechnic.

Master in economics & management – Bocconi University, Milan.

After joining the Italcementi Group, gained significant experience in a variety of Group

production units and especially in the Corporate Finance, Administration & Control Division.

Having held the post of Joint Chief Operating Officer, in May 2004 he was appointed

Italcementi Chief Executive Officer.

Chief Operating Officer of Italmobiliare.

Alberto Bombassei

Honorary degree in mechanical engineering.

In 1961 he joined his father and uncle to found the Brembo company, of which he became

Chief Operating Officer in 1976. In 1984 he was appointed Chief Executive Officer, and in

1993 also became Chairman.

Professional profiles of the members

(10)

From June 2001 to May 2004 he was President of Federmeccanica.

Currently Chairman of Brembo S.p.A., a market leader in the design and production of

high-performance brakes for cars, motorbikes, commercial vehicles, as well as for race

competitions and the spare parts market.

He is also Vice President of Confindustria for Industrial Relations and Social Affairs

.

Alberto Clô

Degree in political science – Bologna University.

Full professor of Industrial Economics and Public Services Economics at Bologna

University.

Author of numerous books, essays and articles on industrial economics and energy,

founder and since 1984 editor of the “Energia” review.

Minister of Industry and Foreign Trade in the Dini Government (1995-96).

Federico Falck

Degree in mechanical engineering – Milan Polytechnic.

Began his career in 1977 at the Acciaierie e Ferriere Lombarde Falck S.p.A. (now “Falck

S.p.A.”); after internships in a number of US steel companies, he worked mainly in

production and procurements for steel operations; Procurements Manager and Chief

Operating Officer for many years.

Currently Chairman of the Board of Directors of Falck S.p.A. and Chairman of the Board of

Directors of ACTELIOS S.p.A., a Falck Group company listed on the Milan Stock Exchange

(STAR segment).

Pietro Ferrero

Degree in biology – Turin University.

1985, joined Ferrero at the Allendorf plant and then moved to the Alba facility to work on

technical and production questions.

1992, appointed Operations Manager in the European Division of the Ferrero Group.

Currently Chairman of Ferrero S.p.A. and Chief Executive Officer of Ferrero International

S.A.

Danilo Gambirasi

Science high-school degree.

Italcementi S.p.A., first as Deputy Corporate Procurements Manager, later as International

Relations & Fuel Procurement Manager until his retirement in 1997.

(11)

Karl Janjori

Increasingly senior posts at Union Bank of Switzerland until his appointment in 1991 as

Executive Vice President and Member of the Group Executive Board.

Other posts:

Ɣ

Director since 1987 and Chairman from 1997 to 2005 of Banco di Lugano;

Ɣ

Director since 1986 and Chairman from 1999 to 2004 of Forbo Holding A.G.;

Ɣ

Director from 1981 to 2000 of EMS Chemie Holding A.G.

Italo Lucchini

Degree in economics & commerce – Bocconi University, Milan.

Assistant lecturer at Bocconi University and non-tenured lecturer at Bergamo University.

Now works as a public accountant with a successful practice in Bergamo.

Supervisory Director at Unione di Banche Italiane S.c.p.a. and Chairman of the Board of

Statutory Auditors of BMW Italia S.p.A. and its subsidiaries.

Emma Marcegaglia

Degree in business economics – Bocconi University, Milan.

Master in business administration, New York University.

Previous posts:

Ɣ

Director, Finecobank S.p.A.;

Ɣ

Confindustria Vice President for Europe, from 2000 to 2002;

Ɣ

National President Young Entrepreneurs, Confindustria, from 1996 to 2000;

Ɣ

National Vice President Young Entrepreneurs, Confindustria, from 1994 to 1996;

Ɣ

President Young Entrepreneurs for Europe (YES) since 1997.

Currently Chief Executive Officer of Marcegaglia S.p.A., a leading steel processing

company, and of other Group companies, some of which operate in tourism.

From May 2004 to May 2008, Vice President of Confindustria with responsibility for

infrastructure, energy, transport and the environment, and representative for Italy in the

European Commission’s high-level Group on Energy, Competitiveness & Environment.

Since May 2008 President of Confindustria.

(12)

Sebastiano Mazzoleni

Degree in geology – Milan State University.

Master in Business Administration (MBA) – Bocconi University, Milan.

Began his professional career in 1996 with CTG S.p.A. as a research geologist with

responsibility for assessing raw material reserves for cement production, coordinating work

groups in Italy, France, Spain and Thailand.

2000, moved to Italcementi S.p.A. as Project Manager in the Marketing Division, with joint

responsibility for drawing up new product marketing plans and benchmark analyses for the

development of competitive positioning models.

2003, involved in the creation of the new Group New Product Marketing Division, where he

is currently responsible for innovation management in the USA, Greece, Bulgaria, Turkey,

Egypt, Thailand, Kazakhstan and India. He is also Group manager of the new project for

enhancement of recoverable resources.

Yves René Nanot

Degree in engineering – Paris.

Master and Ph.D in Business Administration from University of California, Los Angeles.

Held a variety of posts at Dupont de Nemours and then in the Total Group; 1993, joined

Ciments Français where he is currently Chairman and Chief Operating Officer.

Marco Piccinini

Attended science high school and the faculty of architecture. Subsequently studied

"International Negotiating Techniques” at the Institut des Hautes Etudes Internationales in

Geneva.

Director of a number of listed and unlisted companies active in banking, insurance,

automobiles, luxury goods, services and tourism.

Ettore Rossi

Degree in economics & commerce – Catholic University, Milan.

Worked in the Italcementi company from September 1953 to December 31, 1999, in the

Corporate Administration Division.

A senior administration manager from 1967, he held the posts of Secretary to the

Corporate Administration Division (1977/1985), Joint Corporate Administration Manager

(1985/1986), Corporate Finance Administration & Control Manager (1986/1995), Deputy

General Administration Manager (1995/1999).

He has sat on the boards of directors and boards of statutory auditors of a number of

Group companies.

(13)

Attilio Rota

Degree in law – Pavia University.

Has sat on the boards of directors and boards of statutory auditors of companies in the

publishing, cement, and agriculture sectors as well as on the boards of public and private

bodies.

Practicing barrister in Bergamo.

Director-Controller of the Bergamo branch of Bank of Italy.

Carlo Secchi

Degree in economics & commerce – Bocconi University, Milan.

Diploma in economic planning (Institute of Social Studies, The Hague, 1969-1970).

Further studies at Netherlands Economic Institute and the Center for Development

Planning, Erasmus University (Rotterdam, 1970-1972).

Full professor in European Economic Policy since November 1, 1983, and director of the

Institute for Latin American Studies and Countries in Transition (ISLA) at the Bocconi

University, Milan.

Conducts research work as a member of numerous scientific committees, boards or entities

active in science and culture.

Director of various listed and unlisted companies.

Emilio Zanetti

Honorary degree in economics & commerce.

Chairman of BPU BANCA – Banche Popolari Unite from July 2003 to March 2007.

Current posts:

Ɣ

Chairman of the Management Committee of UBI BANCA – Unione di Banche Italiane

since April 2007;

Ɣ

Chairman of Banca Popolare di Bergamo S.p.A. (formerly Banca Popolare di Bergamo

– Credito Varesino) since July 1985.

(14)

Board of Statutory Auditors

Maria Martellini

Degree in economics & commerce – Bocconi University, Milan.

Works as an independent professional.

Full professor of Economics & Corporate Management, Faculty of Economics, Brescia

University. Contract professor on courses in Economics & Industrial Company

Management and Enterprise Assessment at the Bocconi University, Milan.

Claudio Cavalli

Technical-commercial high-school diploma.

Independent professional since 1967, specializing in the corporate sector.

Provides specialized consultancy in corporate economics, administration and finance,

conducts inspections and assessments, plans and organizes corporate re-organizations,

mergers, spin-offs.

Claudio De Re

Degree in economics & commerce – Bocconi University, Milan.

Independent professional since 1962.

Pietro Curcio

Degree in economics & commerce – La Sapienza State University, Rome.

Worked in the Tax Affairs Office of Esso Italiana S.p.A.

Subsequently appointed Tax Manager of Exxon Chemical, Milan; 1985, appointed Treasury

& Tax Manager at Face Finanziaria; subsequently became Chief Financial Officer at Alcatel

Italia and Treasury & Tax Manager at Alcatel Alsthom for Southern Europe.

Currently Chief Operating Officer at Finsise S.p.A.

Dino Fumagalli

Degree in economics & commerce – Bergamo University.

Independent professional since 1983.

Member of the National Commission for the Enactment of Accounting Policies, 1989 to

1991.

(15)

Eugenio Mercorio

Degree in economics & commerce – Bergamo University.

Independent professional. Certified accountant specializing in corporate and tax

consultancy and as a consultant for insolvency procedures.

(16)

Call of Shareholders’ Meeting

The Shareholders are called to a Meeting on April 17, 2009, at 10 am, in via Madonna

della Neve, 8, Bergamo, on first call and on April 20, 2009, at the same time and in the

same venue, on second call, to discuss and adopt resolutions on the following

Order of Business

1) Reports of the Board of Directors and the Board of Statutory Auditors on financial year

2008: examination of the financial statements as at and for the year to December 31,

2008, and resolutions arising.

2) Authorization for the purchase and disposal of treasury shares.

3) Appointment of statutory auditors, the Chairman of the Board of Statutory Auditors and

determination of their fee.

In accordance with the law and the company by-laws, shareholders holding ordinary

shares for which the declaration envisaged by art. 2370, para. 2, Italian Civil Code, has

been notified to the company no later than two business days before the date of the

Shareholders' Meeting are entitled to participate in the Shareholders' Meeting.

* * *

Documentation relating to the matters on the order of business will be available to the

public at the company registered office and at Borsa Italiana S.p.A. at least 15 days before

the date of first call. Shareholders are entitled to obtain copies thereof.

The documentation will also be available for consultation in the same period at the internet

address www.italcementigroup.com.

* * *

Pursuant to the by-laws, the appointment of the Board of Statutory Auditors takes place on

the basis of lists.

Lists may be presented only by shareholders who, alone or together with other

shareholders, can prove that they hold overall a percentage of the voting capital of no less

than 2%.

No shareholder may present or participate in the presentation of more than one list,

directly or through a third party or trust company, or vote for different lists.

Shareholders belonging to the same group and shareholders who adhere to a

shareholders’ agreement regarding the company shares may not present more than one

list, directly or through a third party or through trust companies.

Lists presented in violation of these restrictions will not be accepted.

Each list consists of two sections: one for candidates for acting auditor and the other for

candidates for substitute auditor.

Each section must list, in progressive order, the names of no more than three candidates

for acting auditor and no more than three candidates for substitute auditor.

Each candidate may be put forward in one list only or will be ineligible.

The lists must be deposited at the company offices at least 15 days prior to the date set

for the Shareholders’ Meeting on first call, together with the following documentation:

a) the declarations in which the individual candidates accept their nomination and take

personal responsibility for attesting the non-existence of reasons for ineligibility or

incompatibility, as well as the existence of the further requirements prescribed by the

law, the by-laws and the Voluntary Code of Conduct;

(17)

b) a short curriculum vitae giving the personal and professional details of each candidate,

indicating posts as director and auditor held in other companies;

c) information relating to the identity of the shareholders who presented the lists,

indicating the percentage stake held overall and certification proving the holding of such

a stake;

d) the declaration of shareholders, other than those who hold, also jointly, a controlling or

majority stake, attesting to the presence, or to the absence, of inter-connections

between them as defined and governed by the current laws.

A presented list that does not comply with the above provisions will be considered as not

presented.

In the event that, within the limit of 15 days preceding the date of the Shareholders’

Meeting, a single list has been deposited, or only lists presented by shareholders who are

inter-connected pursuant to current laws, additional lists may be presented up to the fifth

day following this deadline and the 2% threshold indicated above will be halved.

The Board of Directors

(18)

FRANCE

CIMENTS FRANCAIS CIMENTS CALCIA GSM UNIBÉTON AXIM

ITALY

ITALCEMENTI CALCESTRUZZI CTG

SOCIETÀ DEL GRES AXIM ITALIA ITALGEN

NORTH AMERICA

ESSROC CIMENT QUEBEC ESSROC SAN JUAN RIVERTON ARROW CAMBRIDGE CRIDER & SHOCKEY

SPAIN

FINANCIERA Y MINERA

BELGIUM

CCB

MOROCCO

CIMENTS DU MAROC

EGYPT

SUEZ CEMENT TOURAH CEMENT HELWAN RMB

BULGARIA

DEVNYA CEMENT VULKAN

GREECE

HALYPS CEMENT

TURCHIA

SET

CYPRUS

VASSILIKO CEMENT

EGYPT

SUEZ CEM CIMENTS CALCIA GSM UNIBÉTON AXIM C C S A IT

SPAIN

FINANCIERA Y MINERA

B

C

MOROCC

CIMENTS DU

NORTH AMERICA

Italcementi Group in the world

(as of 31

th

December

2008)

(19)

KAZAKHSTAN

SHYMKENT CEMENT

SAUDI ARABIA

INTERNATIONAL CITY FOR READY MIX (JV)

THAILAND

JALAPRATHAN CEMENT ASIA CEMENT

CHINA

SHAANXI FUPING CEMENT

INDIA

ZUARI CEMENT

TERMINALS

Albania

Gambia

Kuwait

Sri Lanka

Mauritania

(grinding center)

INDIA

ZUARI CEMENT

(20)

Group business and financial highlights

2008

2007

2006

2005

2004

(in millions of euro)

IFRS

IFRS

IFRS

IFRS

IFRS

Revenues

5,776

6,001

5,854

5,000

4,528

Recurring EBITDA

1,113

1,404

1,447

1,153

1,091

EBITDA*

1,103

1,405

1,434

1,137

1,096

EBIT 607

958

1,012

766

788

Net profit for the period

272

612

651

541

465

Group net profit

139

424

449

391

351

Investments in fixed assets

980

999

773

1,209

378

Total shareholders’ equity

4,615

4,760

4,660

4,356

3,090

Group shareholders’ equity

3,325

3,479

3,298

3,037

2,399

Net debt

2,679

2,418

2,210

2,215

1,569

Number of employees at December 31

22,243

23,706

22,868

21,854

17,377

Highlights

Breakdown of consolidated revenues by line of business

(in millions of euro)

2007

2008

%change

Cement

4,000

4,131

3.3

Ready mixed concrete/

aggregates

1,736

1,334

(23.2)

Other

264

310

17.4

Total

6,001

5,776

(3.8)

*changes at constant size and exchange rates + 1.7%

2007

66.7 % 4.4% 28.9%

2008

71.5% 5.4% 23.1%

Recurring EBITDA

(in millions of euro)

Sales volumes and internal

transfers by business

Cement and clinker (Mt) Aggregates (Mt) Ready mixed concrete (Mmc) 64.6

*change at constant size 2007 2008

62.6 56.3 47.6 20.5 13.9 (4.3)%* 1,404 (3.1)% (6.5)%* (15.5)% (6.0)%* (32.5)%

2007

1,113

2008

44.3% 5.0% 50.7% 40.4% 9.1% 50.5% North America

(21)

1 2 3 4 5 6 7 8 9 10 11

Italcementi S.p.A. on the Stock Exchange

1 Share capital and shareholders

Ticker symbol

Italcementi

Italcementi bearer

Italcementi registered

ordinary shares

savings shares

savings shares

BLOOMBERG:

IT IM

ITR IM

-REUTERS:

ITAI.MI

ITAIn.MI

-ISIN:

IT0001465159

IT0001465167

IT0001465175

Savings shares 37% Ordinary shares 63%

1.a Share capital at 12.31.2008

At 12.31.2008, Italcementi S.p.A. share capital was

282,548,942 represented by 282,548,942 shares with a par

value of

1 each, of which 177,117,564 ordinary shares and

105,431,378 savings shares.

Free float 35,38% Arnhold and S.Bleichroeder

2,22% Treasury shares 2,14% Italmobiliare 60,26%

1.b Ordinary shares

Survey of shareholders with over 2% of share capital at

12.31.2008 (based on the shareholders' register, Consob

communications and other information).

Brokers and Omnibus Accounts 2% Foreign Insurance Co. 1% Italian Insurance Co. 1% Foreign Companies 1% Other 1% Private Individuals 31% Foreign Funds 25% Foreign Banks 13% Italian Banks 10% Italian Companies 8% Italian Funds 7%

1.c Ordinary shares

Breakdown of free float based on

information in the shareholders'

register for payment of the FY

2007 dividend; Shareholders

listed in the register: 24,333.

1 2 3 4 5 6 7 8 9 10 11

2 Financial Indicators

(euro)

2008

2007

2006

2005

2004

Italcementi S.p.A.

Market prices

(annual average official prices):

- Ordinary share

11.020

20.022

19.297

13.312

10.773

- Savings share

7.889

13.238

12.589

9.498

7.050

Per share dividend:

- Ordinary share

(1)

0.180

0.360

0.360

0.330

0.300

- Savings share

(1)

0.210

0.390

0.390

0.360

0.330

Dividend yield

(on annual average official prices):

- Ordinary share

1.63%

1.80%

1.87%

2.48%

2.78%

- Savings share

2.66%

2.95%

3.10%

3.79%

4.68%

(22)

3.a Italcementi share prices, “Ultimo Mibtel” index and “S&P/MIB” index (01/02/2004 - 02/27/2009)

2 Jan. 04 2 Feb. 04 2 Mar

. 04 2 Apr . 04 2 May . 04

2 June 04 2 July 04 2 Aug.

04

2 Sept. 04 2 Oct. 04 2 Nov

. 04

2 Dec. 04 2 Jan. 05 2 Feb. 05 2 Mar

. 05 2 Apr . 05 2 May . 05

2 June 05 2 July 05 2 Aug.

05

2 Sept. 05 2 Oct. 05 2 Nov

. 05

2 Dec. 05 2 Jan. 06 2 Feb. 06 2 Mar

. 06 2 Apr . 06 2 May . 06

2 June 06 2 July 06 2 Aug.

06

2 Sept. 06 2 Oct. 06 2 Nov

. 06

2 Dec. 06 2 Jan. 07 2 Feb. 07 2 Mar

. 07 2 Apr . 07 2 May . 07

2 June 07 2 July 07 2 Aug.

07

2 Sept. 07 2 Oct. 07 2 Nov

. 07

2 Dec. 07 2 Jan. 08 2 Feb. 08 2 Mar 2 Jan. 09

. 08 2 Apr . 08 2 May . 08

2 June 08 2 July 08 2 Aug.

08

2 Sept. 08 2 Oct. 08 2 Nov

. 08 2 Dec. 08 2 Feb. 09 24 20 26 22 18 16 14 12 10 8 6 4 2

3.b Italcementi shares, “Ultimo Mibtel” index and “S&P/MIB” index performance (base 01.02.2004 = 100)

3 Share prices and market capitalization

2 Jan. 04 2 Feb. 04 2 Mar

. 04 2 Apr . 04 2 May . 04

2 June 04 2 July 04 2 Aug.

04

2 Sept. 04 2 Oct. 04 2 Nov

. 04

2 Dec. 04 2 Jan. 05 2 Feb. 05 2 Mar

. 05 2 Apr . 05 2 May . 05

2 June 05 2 July 05 2 Aug.

05

2 Sept. 05 2 Oct. 05 2 Nov

. 05

2 Dec. 05 2 Jan. 06 2 Feb. 06 2 Mar

. 06 2 Apr . 06 2 May . 06

2 June 06 2 July 06 2 Aug.

06

2 Sept. 06 2 Oct. 06 2 Nov

. 06

2 Dec. 06 2 Jan. 07 2 Feb. 07 2 Mar

. 07 2 Apr . 07 2 May . 07

2 June 07 2 July 07 2 Aug.

07

2 Sept. 07 2 Oct. 07 2 Nov

. 07

2 Dec. 07 2 Jan. 08 2 Feb. 08 2 Mar 2 Jan. 09

. 08 2 Apr . 08 2 May . 08

2 June 08 2 July 08 2 Aug.

08

2 Sept. 08 2 Oct. 08 2 Nov

. 08

2 Dec. 08 2 Feb. 09

“Ultimo Mibtel”

index “S&P/MIB”index Italcementi savings shares Italcementi ordinary shares “Ultimo Mibtel” index “S&P/MIB” index Italcementi savings shares Italcementi ordinary shares

(23)

3.c Italcementi share prices, “Ultimo Mibtel” index and “S&P/MIB” index (01/02/2008 - 02/27/2009)

17 16 14 12 15 13 11 10 9 8 7 6 5 4 3

2 Jan. 08 9 Jan. 08 16 Jan. 08 23 Jan. 08 30 Jan. 08 6 Feb. 08 13 Feb. 08 20 Feb. 08 27 Feb. 08 5 Mar

. 08 12 Mar . 08 19 Mar . 08 26 Mar . 08 2 Apr . 08 9 Apr . 08 16 Apr . 08 23 Apr . 08 30 Apr . 08

7 May 08 14 May 08 21 May 08 28 May 08 4 June 08 11 J

u

n

e

0

8

18 June 08 25 June 08 2 July 08 9 July 08 16 July 08 23 July 08 30 July 08 6 Aug.

08 13 Aug. 08 20 Aug. 08 27 Aug. 08

3 Sept. 08 10 Sept. 08 17 Sept. 08 24 Sept. 08 1 Oct. 08 8 Oct. 08 15 Oct. 08 22 Oct. 08 29 Oct. 08 5 Nov

. 08 12 Nov . 08 19 Nov . 08 26 Nov . 08

3 Dec. 08 10 Dec. 08 17 Dec. 08 24 Dec. 08 31 Dec. 08 7 Jan. 09 14 Jan. 09 21 Jan. 09 28 Jan. 09 4 Feb. 09 11 Feb. 09 18 Feb. 09 25 Feb. 09

3.d Italcementi shares, “Ultimo Mibtel” index and “S&P/MIB” index performance (base 01.02.2008 = 100)

2 Jan. 08 9 Jan. 08 16 Jan. 08 23 Jan. 08 30 Jan. 08 6 Feb. 08 13 Feb. 08 20 Feb. 08 27 Feb. 08 5 Mar

. 08 12 Mar . 08 19 Mar . 08 26 Mar . 08 2 Apr . 08 9 Apr . 08 16 Apr . 08 23 Apr . 08 30 Apr . 08

7 May 08 14 May 08 21 May 08 28 May 08 4 June 08 11 J

u

n

e

0

8

18 June 08 25 June 08 2 July 08 9 July 08 16 July 08 23 July 08 30 July 08 6 Aug.

08 13 Aug. 08 20 Aug. 08 27 Aug. 08

3 Sept. 08 10 Sept. 08 17 Sept. 08 24 Sept. 08 1 Oct. 08 8 Oct. 08 15 Oct. 08 22 Oct. 08 29 Oct. 08 5 Nov

. 08 12 Nov . 08 19 Nov . 08 26 Nov . 08

3 Dec. 08 10 Dec. 08 17 Dec. 08 24 Dec. 08 31 Dec. 08 7 Jan. 09 14 Jan. 09 21 Jan. 09 28 Jan. 09 4 Feb. 09 11 Feb. 09 18 Feb. 09 25 Feb. 09

“Ultimo Mibtel”

index “S&P/MIB”index Italcementi savings shares Italcementi ordinary shares “Ultimo Mibtel” index “S&P/MIB” index Italcementi savings shares Italcementi ordinary shares

(24)

3.f Average monthly capitalization (January 2008 - February 2009)

3.e Share prices and market capitalization from 01.02.2008 to 02.27.2009

Share price

(euro)

Capitalization

(millions of euro)

01.02.08

high

low

02.27.09

01.02.08

high

low

02.27.09

Ordinary shares

14.447

14.447

6.538

7.080

2,559

2,559

1,158

1,254

Savings shares

10.754

10.754

3.944

4.243

1,134

1,134

416

447

Total

3,693

3,693

1,574

1,701

“Ultimo Mibtel”

29,058

29,058

12,494

12,526

“S&P/MIB”

38,035

38,063

15,218

15,282

3 Share prices and market capitalization

Total capitalization Italcementi savings shares Italcementi ordinary shares

(25)

4 Trading volumes on the Italian Stock Exchange

Month

Ordinary shares (euro)

Savings shares (euro)

Number

Average

Trade

Number

Average

Trade

of traded

monthly

value

of traded

monthly

value

shares

price

shares

price

January 2008

31,138,219

13.597

423,380,994

6,565,722

9.811

64,415,556

February

23,901,665

13.174

314,887,765

7,036,231

9.459

66,556,498

March

18,374,226

12.548

230,553,817

3,554,087

9.001

31,989,480

April

26,351,120

13.793

363,469,374

7,337,659

9.964

73,111,585

May

19,267,948

13.411

258,396,163

9,808,434

9.929

97,390,006

June

18,827,513

11.738

220,993,780

5,335,700

8.587

45,816,654

July

30,602,614

9.386

287,221,472

5,511,850

6.935

38,222,293

August

21,179,302

9.175

194,310,646

3,284,303

7.190

23,614,520

September

36,810,398

9.864

363,093,996

3,763,369

7.443

28,011,491

October

25,832,590

8.283

213,978,167

4,540,197

6.068

27,548,740

November

8,447,423

8.481

71,638,661

3,131,674

5.004

15,670,941

December

11,820,228

8.604

101,703,703

2,086,850

4.658

9,720,954

January 2009

19,520,219

8.152

159,122,828

3,341,533

5.180

17,309,053

February

15,103,312

7.386

111,546,042

2,580,828

4.491

11,589,541

307,176,777

3,314,297,408

67,878,437

550,967,312

4.a Turnover

Italcementi savings shares Italcementi ordinary shares

(26)
(27)
(28)

Directors’ report

Following the adoption by the European Union of Regulation no. 1606 of 2002, the

Italcementi S.p.A. consolidated financial statements for 2008, and the comparatives for

financial year 2007, which have already been published, have been drawn up in

compliance with the International Accounting and Financial Reporting Standards

(IAS/IFRS).

The changes that have taken place in the reporting standards and interpretations since

2007 are set out in detail in the notes, in the section “Declaration of compliance with the

IFRS”. They did not produce any material effects. In accordance with the aforementioned

Regulation, the principles to be adopted do not include the standards and interpretations

published by the International Accounting Standards Board (IASB) and the International

Financial Reporting Interpretations Committee (IFRIC) at December 31, 2008, but not

adopted by the European Union at that date. Furthermore, the European Union has

adopted additional standards /interpretations, which Italcementi S.p.A. will apply as from

2009, having decided not to elect early application.

Scope of consolidation – Changes

As noted in the report to the 2007 consolidated financial statements and the subsequent

quarterly and half-year reports for the financial year under analysis, as a consequence of

the preventive seizure of the assets of Calcestruzzi S.p.A. ordered on January 29, 2008

and still in effect, the

Calcestruzzi group

, pursuant to IAS 27 § 21, is no longer included in

the scope of consolidation.

The other main changes in the

scope of consolidation

concern the acquisitions in 2007 of

companies active in the ready mixed concrete sector in North America and in Egypt and in

the cement sector in China and in Kuwait, as well as the acquisitions in 2008 of:

-

Verticalnet Inc.

(e-business, USA), consolidated since the end of January 2008;

-

Crider & Shockey

(ready mixed concrete, USA) consolidated as from March 2008;

-

Kuwait German Ready Mix

(ready mixed concrete, Kuwait) consolidated on a line-by-line

basis as from May 2008;

-

Misr for Energy SAE

(Egypt),

Italgen Elektrik Uretim A.S.

and

Bares Elektrik Uretimi

A.S.

(Turkey), active in the energy sector and part of the Italgen Group, consolidated on a

line-by-line basis as from the second half of 2008;

-

Al Mahaliya

(ready mixed concrete, Kuwait) consolidated on a line-by-line basis as from

July 2008, and the investment in the newly formed joint venture

International City for

Ready Mix

(ex Arabian Ready Mix Co.; ready mixed concrete, Saudi Arabia), consolidated

on a proportionate basis since the beginning of 2008.

As noted in the quarterly report at September 30, 2008, since the agreement for the sale of

the operations of the companies Set Group, Set Cimento, Set Beton and Afyon Cimento

was not executed, the Group decided to review its options with a view to strategically

optimizing its operations in Turkey. The operations in question are no longer deemed

available for sale and are therefore consolidated on a line-by-line basis, whereas in the

quarterly report at March 31, 2008, and the half-year report at June 30, 2008, they were

treated in compliance with IFRS 5.

(29)

Earnings indicators

To assist comprehension of its business and financial data, the Group employs a number of

widely used indicators, which are not contemplated by the IAS IFRS.

Specifically, the income statement presents the following intermediate results / indicators:

Recurring EBITDA, EBITDA, EBIT, computed as the sum of the preceding items. On the

balance sheet, similar considerations apply to net debt, whose components are detailed in

the specific section of the notes.

Since the indicators employed by the Group are not envisaged by the IAS IFRS, their

definitions may not coincide with and therefore not be comparable to those adopted by

other companies/groups.

This report contains many financial and non-financial earnings indicators, including those

indicated above. The financial indicators, taken from the financial statements, are used in

the tables summarizing Group business, equity and financial performance, in relation to

comparative values and other values from the same period (e.g., change in revenues,

recurring EBITDA and EBIT with respect to the previous year, and change in their return on

revenues). The use of economic values not directly apparent from the financial statements

(e.g., the exchange-rate effect on revenues and on earnings) and the presentation of

comments and assessments assists qualification of the trends in the values concerned.

The directors’ report also provides a series of financial ratios (gearing, leverage, coverage)

that are clearly of importance for a better understanding of Group performance, especially

with respect to the previous period. The non-financial indicators refer to external and

internal elements: the situation of the general economy and the industry in which the Group

operates, trends on the various markets and lines of business, trends in sales prices and

cost factors, acquisitions and disposals, other significant events in the period,

organizational developments, the introduction of laws and regulations, etc. In the notes, the

section on the net financial position provides information about the effects of changes in

interest rates and the main exchange rates on the balance sheet and the income

statement.

Results and significant events for the year

Results

Inevitably, the Group’s results were affected by the international economic events of 2008.

Specifically, in the first half, the sharp rise in raw materials prices, especially energy prices,

was a significant factor. Subsequently, as the financial crisis spread from the USA across

the world, its repercussions began to emerge in many sectors of the real economy.

Under these conditions, Group revenues held well despite negative effects from the scope

of consolidation, volumes and exchange rates. Operating results, on the other hand,

showed a significant decline. This had a negative impact on profit for the year, which was

also adversely affected by adjustments to financial asset values, but benefited from

non-recurring finance income. Given the earnings downturn, income tax was significantly lower

in absolute terms than in 2007. Consolidated revenues totaled 5,775.6 million euro, a

decrease of 3.8% (+1.7% at constant size and exchange rates).

Recurring EBITDA, at 1,113.1 million euro, fell by 20.7% on 2007.

After a small increase in amortization and depreciation (+1.1%) and impairment variations

(44.7 million euro), EBIT was 607.3 million euro (-36.6%).

(30)

Profit before tax

, at 420.8 million euro (851.9 million euro in 2007), also reflected the

negative impact of adjustments to financial asset values totaling 124.9 million euro (absent

in 2007) and referring largely to the write-down on the equity investment in the Turkish

company Goltas, to Calcestruzzi and to other financial assets, but benefited from

non-recurring finance income of 50 million euro arising from final recognition of the advance

received in connection with the termination of the agreement for the sale of operations in

Turkey.

The earnings decline produced a reduction in

income tax expense

, from 239.4 million

euro in 2007 to 148.5 million euro in 2008.

Net profit for the year

was 272.2 million euro (612.5 million euro in 2007), while

net profit

attributable to the Group

was 138.8 million euro (423.9 million euro in 2007).

Minority

interests

decreased from 188.6 million euro to 133.4 million euro.

Net debt

at December 31, 2008, was 2,679.3 million euro, up by 419.0 million euro from

the situation at December 31, 2007, restated for comparative purposes to exclude amounts

for the Calcestruzzi group, which is not included in the 2008 scope of consolidation.

Total shareholders' equity

, at 4,615.0 million euro, decreased by 145.5 million euro from

December 31, 2007, while

Group shareholders' equity

amounted to 3,324.8 million euro,

down by 154.7 million euro from the end of 2007.

Significant events for the year

The significant events of the

fourth quarter of 2008

are described below.

Ɣ

As noted above, in October the agreement between

Ciments Français

and

OJSC

Holding Company Sibirskiy Cement

for the sale to the latter of SET Group

operations in Turkey was terminated. The

non-execution of the agreement

led to final

recognition of the advance received;

Ɣ

in November,

Moody’s Investor Services reviewed its rating

for Italcementi to

Baa2/stable from the previous Baa1/negative. The Baa1 rating for the subsidiary

Ciments Français was confirmed, with the outlook downgraded from stable to negative;

Ɣ

in December the

sale

to Sirci S.p.A. of the Italsintex S.p.A. company, which operates

with the

Gresintex

trademark, was finalized;

Ɣ

under the program approved by the Shareholders' Meeting of April 14, 2008,

Ciments

Français S.A.

acquired

136,073

treasury shares

for a value of approximately 6.9

million euro. These shares joined the 566,999 treasury shares already purchased

during the year (value 60.1 million euro). Considering that on July 31, 2008, the Board

of Directors of Ciments Français S.A. decided to

cancel

964,522 shares, at December

31, 2008,

treasury shares

numbered 476,205 accounting for approximately 1.3% of

share capital.

Significant events in the

first nine months

of 2008, already reported in the 2008 half-year

and quarterly reports, are described below. A number of

acquisitions took place

during

the period, most notably:

Ɣ

the

grinding center

for cement production in

Ravenna

;

Ɣ

the US company

Verticalnet, Inc.,

which was merged with

BravoSolution USA, Inc.

into a new entity with the name Verticalnet, Inc. dba (doing business as) BravoSolution

US;

(31)

Ɣ

Kuwait German Ready Mix and Al Mahaliya, two companies active in ready mixed

concrete in Kuwait, acquired through Hilal Cement Company;

Ɣ

Bares Elektrik Uretimi A.S., a Turkish company that holds the licenses for

construction of a wind farm in the Balikesir region (North-West Turkey), acquired by

Italgen S.p.A. through its Turkish subsidiary Italgen Elektrik Uretim A.S.;

Ɣ

the purchase on the market by Société Internationale Italcementi France S.a.s. of

139,310 Ciments Français shares, for an outlay of approximately 14.6 million euro.

Ɣ

Other significant events in the first nine months of 2008 already mentioned in the

half-year and quarterly reports included:

Ɣ

the sale to a third party of all shares held in the Domiki Beton S.A. company by

Calcestruzzi S.p.A. and Halyps S.A.;

Ɣ

the announcement of a new partnership agreement with the Muhaidib Saudi group,

under which Ciments Français will take a 12.5% shareholding in a new cement plant

in Syria;

Ɣ

the licensing agreement with Heidelberg Cement for joint use of a series of patents for

photocatalytic cements and binders developed by the Italcementi Group and for the TX

Active® brand. The agreement marked the launch of a new technical research

cooperation program;

Ɣ

the agreement with the Libyan Fund for Economic and Social Development to build a

new cement plant about 50 km from Tobruk, in Eastern Libya. The industrial plan for

this equally owned joint venture envisages construction of a plant with an annual

capacity of 4 million metric tons of Portland cement and an option for a new white

cement line;

Ɣ

the rating review by Standard & Poor’s, which lowered its long-term ratings for

Italcementi and Ciments Français from “BBB+” to “BBB”; the outlook for both

companies is stable;

Ɣ

the confirmation, for 2008-2009, of Italcementi as one of the companies in the Dow

Jones Sustainability World Index (DJSI World).

(32)

The international economy and industry trends

Economic trends in 2008 were exceptional on many fronts. The gradual economic decline

driven by a deepening and ever broader financial crisis brought to an end one of the most

intensive phases of income growth ever recorded at world level. The speed at which the

turbulence in the financial sector spread to the real economy and its impact on areas and

countries apparently unconnected with the epicenter of the crisis were entirely unexpected.

The sudden change in the economic climate in 2008 was reflected in, among other things,

raw materials prices, energy in particular: after hitting new highs in the first half of the year,

prices dropped abruptly as from July.

In many countries, the response of governments and central banks focused initially on

monetary policy, with interest-rate cuts, huge injections of liquidity and measures providing

direct support for financial firms in greatest difficulty. Sweeping fiscal plans were also

announced in many countries: the positive impact such plans may have on confidence and

on the economy will emerge only at a later date, since implementation of initiatives of this

type is a longer process.

The sudden slowdown in the mature countries hit the emerging area, including the most

dynamic Asian regions, at three levels: the reduction in exports, the flight from high-risk

activities, the fall in raw materials prices. Together with a significant slowdown in the growth

rate, the emerging area also experienced a growing differentiation in cyclical positions, with

countries with high current deficits and/or weak financial structures more exposed to

financial instability. Instability was also seen on the currency markets, in the emerging area

and elsewhere. The dollar/euro exchange rate was particularly volatile, with only a partial

recovery at the end of the year from the new lows reached in the first half of 2008.

In the construction sector, the worsening financial crisis turned into a powerful factor

amplifying existing difficulties on many mature markets, chiefly due to the severe squeeze

on credit almost everywhere. Furthermore, the general deterioration in economic

expectations had an hard impact on private and business building projects, which are

generally very sensitive to economic conditions.

In the USA, the slowdown in the residential sector was far stronger than expected,

generating what has now become the most grave and prolonged recession of the postwar

period. In the European countries where the Group operates, the decline set in at different

times and rates; nevertheless the business slump accelerated everywhere in the second

half. Although business activity weakened throughout the emerging area, the cyclical

differential widened both in the Mediterranean area and in Asia. In the Mediterranean,

Morocco and Egypt continued to report very healthy performance; among the Group’s

Asian countries, where growth continued, beginning with India, Thailand stood out for its

poor performance, due to continuing domestic political unrest.

(33)

Business and financial performance in 2008

Key consolidated figures

(in millions of euro)

2008

2007

% change

vs. 2007

Revenues

5,775.6

6,000.9

(3.8)

Recurring EBITDA

1,113.1

1,403.9

(20.7)

% of revenues

19.3

23.4

Other non-recurring income (expense)

(10.3)

1.1

n.s.

EBITDA

1,102.9

1,405.1

(21.5)

% of revenues

19.1

23.4

Amortization and depreciation

(450.9)

(445.9)

1.1

Impairment variation

(44.7)

(1.2)

>100

EBIT

607.3

958.0

(36.6)

% of revenues

10.5

16.0

Finance income (costs)

(86.7)

(119.4)

(27.3)

Impairment on financial assets

(124.9)

-

n.s.

Share of results of associates

25.1

13.3

88.5

Profit before tax

420.8

851.9

(50.6)

% of revenues

7.3

14.2

Income tax expense

(148.5)

(239.4)

(38.0)

Net profit for the year

272.2

612.5

(55.6)

% of revenues

4.7

10.2

Group net profit

138.8

423.9

(67.3)

Minority interest

133.4

188.6

(29.3)

Cash flow from operating activities

634.9

935.0

(32.1)

(34)

Quarterly trend

(in millions of euro)

Full year

2008

Q4

2008

Q3

2008

Q2

2008

Q1

2008

Revenues

5,775.6

1,356.2

1,493.3

1,574.9

1,351.1

% change vs. 2007

(3.8)

(2.3)

(3.0)

(4.8)

(4.7)

Recurring EBITDA

1,113.1

207.1

312.7

334.6

258.7

% change vs. 2007

(20.7)

(30.6)

(18.9)

(23.5)

(8.5)

% of revenues

19.3

15.3

20.9

21.2

19.1

EBITDA

1,102.9

201.0

306.8

335.6

259.5

% change vs. 2007

(21.5)

(30.3)

(21.3)

(24.2)

(8.8)

% of revenues

19.1

14.8

20.5

21.3

19.2

Amortization and depreciation

(450.9)

(126.8)

(107.1)

(109.0)

(107.9)

Impairment variation

(44.7)

(44.7)

0.1

(0.1)

EBIT

607.3

29.5

199.8

226.6

151.4

% change vs. 2007

(36.6)

(82.8)

(28.2)

(31.7)

(14.0)

% of revenues

10.5

2.2

13.4

14.4

11.2

Finance income (costs)

(86.7)

22.1

(36.8)

(35.1)

(36.9)

Impairment on financial assets

(124.9)

(98.3)

(11.4)

(15.2)

Share of results of associates

25.1

6.4

5.6

12.3

0.8

Net profit for the period

272.2

(53.0)

106.5

137.3

81.3

% of revenues

4.7

(3.9)

7.1

8.7

6.0

Group net profit

138.8

(56.6)

65.9

91.6

37.9

% of revenues

2.4

(4.2)

4.4

5.8

2.8

Net debt

2,679.3

2,679.3

2,581.4

2,608.3

2,306.5

(at end of period)

Fourth-quarter sales volumes and internal transfers

Q4

2008

Q4

2008

Q4

2008

Historic Constant size Historic Constant size Historic Constant size Central Western Europe

5.5

(11.6)

(11.4)

9.9

(13.0)

(13.0)

1.7

(15.9)

(15.9)

North America

1.1

(20.3)

(20.3)

0.1

55.0

(2.6)

0.2

8.5

(9.6)

Eastern Europe and

Southern Med Rim

4.9

0.3

0.3

0.5

(28.5)

(28.5)

0.9

(7.5)

(7.5)

Asia

2.6

(9.3)

(9.3)

0.1

(20.6)

(20.6)

0.2

(25.3)

(25.3)

Cement and

clinker trading

1.0

(27.4)

(27.3)

-

-

-

0.1

-

-Eliminations and others

(0.8)

n.s.

n.s.

-

-

-

-

-

-Total

14.3

(8.6)

(8.5)

10.6

(13.6)

(13.9)

3.1

(10.0)

(13.4)

n.s. not significant

Amounts refer to companies consolidated on a line-by-line basis and, pro-quota, to companies consolidated on a proportionate basis (*) excluding outgoes on the work-in-progress account

Central Western Europe: Italy, France, Belgium, Spain, Greece - North America: U.S.A., Canada - Eastern Europe and Southern Med Rim: Egypt, Bulgaria, Morocco, Turkey - Asia: India, Thailand, China, Kazakhstan

% change vs. Q4 2007 % change vs. Q4 2007 % change vs. Q4 2007

Cement and clinker

(millions of metric tons)

Aggregates*

(millions of metric tons)

Ready mixed concrete

(35)

At constant size, fourth-quarter sales volumes, affected by particularly unfavorable

meteorological conditions in Central Western Europe, decreased overall in all lines of

business with respect to the year-earlier period.

In the cement and clinker sector, there was a sharp drop in sales volumes in North

America, Central Western Europe, Asia and Trading. Southern Europe and the Southern

Med Rim reported a small improvement driven by healthy performance in Morocco, which

more than made up for the contained reduction on the other markets.

The significant decline in Central Western Europe (France-Belgium, Spain) affected Group

performance in aggregates and ready mixed concrete. Greece reported satisfactory

growth in both sectors; in ready mixed concrete, Egypt made progress and Morocco was

substantially stable.

Fourth-quarter results

In the fourth quarter, the slowdown in volumes caused by the growing impact of the

financial crisis on the real economy (especially in some industrialized countries) pushed

revenues down to 1,356.2 million euro (-2.3% YoY). The decrease was mitigated by good

performance in some emerging countries (Egypt, Morocco and Bulgaria) and by the

globally positive sales price dynamic.

An important reduction was reported in North America, Central Western Europe and

Trading.

Recurring EBITDA was 207.1 million euro, down 30.6% from the year-earlier period. The

result reflected lower sales volumes and the negative dynamic in operating expenses,

whose impact was offset only in part by the start of the downturn in energy costs and the

positive sales price trend.

EBIT was 29.5 million euro (-82.8%), after an increase in amortization and depreciation

(+10.6 million euro, or 9.2%) and, above all, impairment losses of 44.7 million euro on fixed

assets, compared with negligible amounts (0.6 million euro) in the fourth quarter of 2007,

as described in the notes.

The fourth quarter posted a net loss of 53.0 million euro (net profit of 146.8 million euro in

the year-earlier period), reflecting the impact of adjustments to financial asset values

totaling 98.3 million euro (75.6 million euro on the equity investment in Turkey’s Goltas,

15.4 million euro on Calcestruzzi and 7.3 million euro on other financial assets). As

mentioned earlier, after the termination of negotiations for the sale of operations in Turkey,

recognition of the advance of 50 million euro was finalized; the amount was classified

under finance income.

(36)

Full-year sales volumes and internal transfers

Sales volumes by geographical area

2008

2008

2008

Historic Constant size Historic Constant size Historic Constant size Central Western Europe

24.0

(7.3)

(6.7)

43.7

(16.9)

(7.0)

7.4

(49.3)

(8.9)

North America

5.3

(14.7)

(14.7)

0.5

64.2

2.8

1.0

17.5

(7.9)

Eastern Europe and

Southern Med Rim

20.6

(2.1)

(2.1)

2.6

(3.3)

(3.3)

4.4

7.1

0.7

Asia

11.3

4.4

(1.1)

0.7

7.8

7.8

0.8

(11.3)

(11.3)

Cement and

clinker trading

5.5

(10.4)

(15.3)

-

-

-

0.2

-

-Eliminations and others

(4.0)

n.s.

n.s.

-

-

-

-

-

-Total

62.6

(3.1)

(4.3)

47.6

(15.5)

(6.5)

13.9

(32.5)

(6.0)

n.s. not significant

Central Western Europe: Italy, France, Belgium, Spain, Greece - North America: U.S.A., Canada - Eastern Europe and Southern Med Rim: Egypt, Bulgaria, Morocco, Turkey - Asia: India, Thailand, China, Kazakhstan

% change vs. 2007 % change vs. 2007 % change vs. 2007

(*) excluding outgoes on the work-in-progress account

Cement and clinker

(millions of metric tons)

Aggregates*

(millions of metric tons)

Ready mixed concrete

(millions of m³)

Amounts refer to companies consolidated on a line-by-line basis and, pro-quota, to companies consolidated on a proportionate basis

Compared with 2007, Group sales volumes were down in all lines of business at constant

size, with a particularly significant reduction in the fourth quarter.

In cement and clinker, the sales volumes decline arose largely in the mature countries

(especially Italy, Spain and North America), and in Trading. In the emerging countries,

domestic cement sales were substantially stable as a result of improvements in Bulgaria,

Morocco, Egypt, India and China, offset by decreases in Turkey, Thailand and Kazakhstan.

Sales volumes in aggregates, at constant size, were affected by the heavy decline in

Spain, a more contained reduction in France and positive performance on the other

markets (notably Belgium, Greece and Morocco).

In ready mixed concrete, also at constant size, the slowdown in Central Western Europe

produced a fall in overall volumes, despite healthy performance in Egypt and Morocco.

The larger reduction reported on an historic basis in aggregates and ready mixed concrete

reflects the impact of deconsolidation of the Calcestruzzi S.p.A. group, which was

consolidated until September 30, 2007. This effect was compensated in part by the ready

mixed concrete acquisitions in North America and Egypt.

(37)

Revenues and operating results

Contribution to consolidated revenues

(in millions of euro)

%

%

%

% (*)

Line of business

Cement and clinker

4,131.2

71.5

4,000.3

66.7

3.3

1.9

Ready mixed concrete and aggregates

1,334.0

23.1

1,736.4

28.9

(23.2)

(0.2)

Miscellaneous

310.4

5.4

264.3

4.4

17.4

12.4

Total 5,775.6

100.0

6,000.9

100.0

(3.8)

1.7

Geographical area

Central Western Europe

3,217.2

55.7

3,593.5

59.9

(10.5)

(2.3)

North America

500.4

8.7

605.7

10.1

(17.4)

(14.3)

Eastern Europe and Southern Med Rim

1,347.1

23.3

1,172.7

19.5

14.9

7.0

Asia

414.9

7.2

415.9

6.9

0.2

17.0

Trading

296.0

5.1

213.1

3.6

38.9

21.5

Total 5,775.6

100.0

6,000.9

100.0

(3.8)

1.7

(*) at constant size and exchange rates

2008

2007

Change

2008/07

Revenues and operating results by geographical area

(in millions of euro)

2008 % change vs. 2007 2008 % change vs. 2007 2008 % change vs. 2007 2008 % change vs. 2007 Central Western Europe

3,331.4

(9.2)

564.9

(20.4)

581.3

(19.8)

344.0

(30.6)

North America

500.4

(17.4)

55.5

(56.5)

53.2

(58.2)

8.3

(89.7)

Eastern Europe and

Southern Med Rim

1,358.9

11.6

395.1

(9.2)

371.8

(11.6)

231.5

(21.8)

Asia

449.5

1.2

105.1

(15.5)

103.8

(15.8)

38.0

(53.5)

Cement and

clinker trading

370.8

1.7

18.1

(11.5)

18.3

(15.9)

13.5

(31.2)

Others and inter-area

eliminations

(235.4)

n.s.

(25.6)

n.s.

(25.5)

n.s.

(28.0)

n.s.

Total

5,775.6

(3.8)

1,113.1

(20.7)

1,102.9

(21.5)

607.3

(36.6)

n.s. not significant

Revenues

Recurring

EBITDA

EBITDA

EBIT

The 3.8% decrease in revenues from 2007 arose from a negative consolidation effect

(-3.6%) and a negative exchange-rate effect (-1.9%), whereas business performance was a

positive contributing factor (+1.7%).

At constant size and exchange rates, revenue growth was assisted by the emerging

countries as a whole (especially Egypt and, to a lesser extent, India, Morocco and

Bulgaria), whose performance more than offset the sharp downturn in the mature countries

(North America, Spain, Italy), Turkey and Kazakhstan.

The negative consolidation effect reflected the deconsolidation of Calcestruzzi (-5.0%),

counterbalanced only in part by the acquisitions (+1.4%) described earlier in this report.

References

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