Equity Company Note

Maire Tecnimont

7 August 2008

Good 1H08, Waiting for Prospects to Materialise

ADD

Maire Tecnimont - Key estimates and data

Y/E December
2007A
Revenues
EUR M
1,981.2
EBITDA
EUR M
142.4
EBIT
EUR M
127.1
Net income
EUR M
73.3
Dividend ord.
EUR
0.07
Adj. EPS
EUR
0.23
EV/EBITDA
x
5.2
Adj. P/E
x
16.2

Target Price: EUR 4.3

2008E
2,408.7
174.2
158.2
98.8
0.09
0.31
3.3
12.0

2009E
2,716.0
207.8
196.8
123.6
0.12
0.38
2.8
9.6

2010E
2,887.1
230.4
219.4
138.9
0.13
0.43
2.0
8.6

A: actual; E: estimates; Source: Company data and Intesa Sanpaolo Research

Oil & Gas

Results Note

Intesa Sanpaolo
Research Department
Roberto Ranieri
Research Analyst
+39 02 7261 5011

Banca IMI is Sponsor to Maire Tecnimont

2Q/1H08 results. Good results slightly above our expectations: 2Q08 EBITDA slightly
decreased yoy, mainly for the weaker performance of the O&G division, which more than
offset the solid Chem&Petrochemicals results; consolidated 1H08 EBITDA margin was around
7.2% vs. 7.9% in 1H07; 2Q08 and 1H08 net income increased, thanks to lower net financial
charges and a lower tax rate. The results growth was mainly driven by the Petrochemicals
sector performance, which reported a 1H08 EBITDA margin of around 11% (9% in 1H07) and
a 14.7% EBITDA margin in 2Q08 vs. 10.7% in 2Q07. C&P results were mainly supported by
the contribution of the Borouge 2 project, which is currently 26% complete. Oil & Gas is the
laggard business division reporting 1H08 revenues of EUR 32M (-56%) for a negative 1H08
EBITDA of EUR 16M vs. EUR -2M in 1H07; the negative EBITDA performance was mainly due
to additional costs on the Fos Caveau LNG project fully expensed in 1H08 to cover completion
of the project. Backlog was around EUR 4.2Bn, decreasing yoy (vs. EUR 5.2Bn in 1H07) and
lower than that of 1Q08 (EUR 4.5Bn).
Outlook. Guidance on FY08E expected results and margins has been confirmed. The bad
news is on backlog, but the Company is expecting an upturn by the end of the year at least to
replace 2008 revenues: in fact, some good contracts should arise in the next few months
from: i) a change of orders for a total EUR 1.6Bn, and ii) a total of EUR 5.6Bn projects under
tendering or already tendered, based on which, the Company confirmed that it should at least
replace the FY08E revenues.
Estimates and valuation. We did not make changes to our estimates. We changed our
target following the periodical changes we make to the WACC components (risk premium
from 4.5% to 5.5% and risk free rate from 4.5% to 4.75%) and of sector multiples. Our
target goes from EUR 4.9 to EUR 4.3/share, calculated on the basis of the average of the
sector P/E09E and EV/EBIT exit multiple. ADD confirmed.
Key risks. In our view, the main risks weighing on the share are: i) the macroeconomic
scenario: slower GDP growth could delay new investments in the industry somewhat; ii) the
margin pressure, due to cost inflation; iii) further USD weakness; and iv) backlog
concentration could put a high portion of revenues at risk.
Key results
EUR M
Sales
EBITDA
% of Sales
EBIT
Net Income
Adj Net Income
Net Financial Position

1Q08A
506
33
6.5
30
14
14

2Q07A
523
53
10.1
46
22
21

2Q08A % chg 08/07

641
22.6
50
-6.1
7.7
41
-10.7
32
48.4
30
43.2
366

A: actual; E: estimates; Source: Company data and Intesa Sanpaolo Research

See page 6 for full disclosures and analyst certification

1H07A
820
65
7.9
56
25
24

1H08A % chg 08/07

1,147
40.0
83
28.1
7.2
71
27.6
47
84.6
44
80.9
366

Energy & Utilities Team

Fabio M. Picardi
Roberto Ranieri

Price performance, -1Y

7/8/08
5.00

4.50

4.00

3.50

3.00

2.50

2.00

1.50
A
S
O
MAIRE TECNIMONT

MILAN MIBTEL - PRICE INDEX

Source: Thomson Reuters

Data priced on 06.08.2008

Target price ()
4.3
Target upside (%)
18
Market price ()
3.7
52-week range ()
4.6/2.8
Market cap ( M)
1,190.3
No. of shares (M)
322.5
Free float (%)
32.6
Major shareholder
DAmato
(%)
63.1
Reuters
MTCM.MI
Bloomberg
MT IM
Mibtel
22167
Performance %
Absolute
Rel. to Mibtel
-1M
-9.6
-1M -10.1
-3M
-4.7
-3M
10.2
-12M
N/A -12M
N/A
Source: Intesa Sanpaolo Research
estimates and Thomson Reuters

Equity Company Note

7 August 2008
Maire Tecnimont - Key figures
Sector
REUTERS CODE
Values per share (EUR)
No. ordinary shares (M)
No. NC saving/preferred shares (M)
Total no. of shares (M)
Adj. EPS
CFPS
BVPS
Dividend Ord
Dividend SAV Nc
Income statement (EUR M)
Sales
EBITDA
EBIT
Pre-tax income
Net income
Adj. net income
Cash flow (EUR M)
Net income before minorities
Depreciation and provisions
Change in working capital
Operating cash flow
Capital expenditure
Other (uses of Funds)
Free cash flow
Dividends and equity changes
Net cash flow
Balance sheet (EUR M)
Net capital employed
of which associates
Net debt/-cash
Minorities
Net equity
Market cap
Minorities value
Enterprise value (*)
Stock market ratios (x)
Adj. P/E
P/CEPS
P/BVPS
Dividend yield (% ord)
EV/sales
EV/EBITDA
EV/EBIT
EV/CE
D/EBITDA
D/EBIT
Profitability & financial ratios (%)
EBITDA margin
EBIT margin
Tax rate
Net income margin
ROE
Debt/equity ratio
Growth (%)
Sales
EBITDA
EBIT
Pre-tax income
Net income
Adj. net income

Oil&Gas
MTCM.MI
2006A
300.0
0.0
300.0
0.1
0.2
0.4
0.0
0.0
2006A
1059.8
94.1
71.9
61.1
30.0
30.2
2006A
30.5
22.2
176.9
229.6
0.0
-36.1
193.4
0.0
193.4
2006A
-24.4
26.0
-140.3
8.8
107.1
1107.3
0.0
941.0
2006A
36.7
21.2
10.3
0
0.9
10.0
13.1
-38.6
-1.5
-2.0
2006A
8.9
6.8
50.0
2.8
28.1
-1.2

Mkt price EUR/Share

Target price EUR/Share
2007A
322.5
0.0
322.5
0.2
0.3
0.8
0.1
0.0
2007A
1981.2
142.4
127.1
122.2
73.3
73.3
2007A
73.3
15.3
162.7
251.3
0.0
-71.4
179.9
97.8
277.7
2007A
-153.1
26.0
-418.0
8.8
256.1
1190.3
0.0
746.3
2007A
16.2
13.4
4.6
1.8
0.4
5.2
5.9
-4.9
-2.9
-3.3
2007A
7.2
6.4
40.0
3.7
28.6
-1.6
2007A
86.9
51.4
76.9
100.1
144.1
143.0

Ordinary
3.69
4.3
2008E
322.5
0.0
322.5
0.3
0.4
1.0
0.1
0.0
2008E
2408.7
174.2
158.2
162.9
98.8
98.8
2008E
99.3
16.0
86.5
201.8
-2.0
-8.0
191.8
-22.6
169.2
2008E
-245.6
26.0
-587.2
9.3
332.3
1190.3
0.0
577.2
2008E
12.0
10.4
3.6
2.4
0.2
3.3
3.6
-2.3
-3.4
-3.7
2008E
7.2
6.6
39.1
4.1
29.7
-1.7
2008E
21.6
22.3
24.4
33.3
34.8
34.8

Rating
ADD
2009E
322.5
0.0
322.5
0.4
0.4
1.3
0.1
0.0
2009E
2716.0
207.8
196.8
201.4
123.6
123.6
2009E
124.0
11.0
-96.0
39.0
-2.0
-7.0
30.0
-30.4
-0.4
2009E
-151.6
26.0
-586.8
9.7
425.5
1190.3
0.0
577.6
2009E
9.6
8.8
2.8
3.0
0.2
2.8
2.9
-3.8
-2.8
-3.0
2009E
7.7
7.2
38.4
4.5
29.0
-1.3
2009E
12.8
19.3
24.4
23.6
25.1
25.1

2010E
322.5
0.0
322.5
0.4
0.5
1.6
0.1
0.0
2010E
2887.1
230.4
219.4
225.2
138.9
138.9
2010E
139.4
11.0
18.6
168.9
-2.0
-7.0
159.9
-38.0
121.9
2010E
-172.2
26.0
-708.7
10.2
526.3
1190.3
0.0
455.7
2010E
8.6
7.9
2.3
3.4
0.2
2.0
2.1
-2.6
-3.1
-3.2
2010E
8.0
7.6
38.1
4.8
26.4
-1.3
2010E
6.3
10.9
11.5
11.8
12.4
12.4

(*) EV = Mkt cap+ Net Debt + Minorities Value - Associates A: actual; E: estimates; Source: Company data and Intesa Sanpaolo Equity Research

Intesa Sanpaolo Research Department

Equity Company Note

7 August 2008

Notes

Intesa Sanpaolo Research Department

Equity Company Note

7 August 2008

Notes

Intesa Sanpaolo Research Department

Equity Company Note

7 August 2008

Notes

Intesa Sanpaolo Research Department

Equity Company Note

7 August 2008
Disclaimer
Analyst certification
The financial analyst who prepared this report, and whose name and role appear on the first page, certifies that:
(1) The views expressed on companies mentioned herein accurately reflect independent, fair and balanced personal views; (2) No direct or indirect
compensation has been or will be received in exchange for any views expressed.
Specific disclosures
1. Neither the analyst nor any member of the analysts household has a financial interest in the securities of the Company.
2. Neither the analyst nor any member of the analysts household serves as an officer, director or advisory board member of the Company.
3. The analyst named in the document is a member of AIAF.
4. The analyst named in this document is not registered with or qualified by FINRA, the U.S. regulatory body with oversight over Banca IMI
Securities Corp. Accordingly, the analyst may not be subject to NASD Rule 2711 and NYSE Rule 472 with respect to communicates with a
subject company, public appearances and trading securities in a personal account. For additional information, please contact the Compliance
Department of Banca IMI Securities Corp at 212-326-1133.
5. The analyst of this report does not receive bonuses, salaries, or any other form of compensation that is based upon specific investment banking
transactions.
6. The research department supervisors do not have a financial interest in the securities of the Company.
7. This document has been disclosed to the issuer and amended following this disclosure prior to its dissemination.
This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Banca IMI S.p.A. Milan, Banca IMI S.p.A-London Branch (a member
of the London Stock Exchange) and Banca IMI Securities Corp (a member of the NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full
responsibility for the contents of this report and also reserves the right to issue this document to its own clients. Banca IMI S.p.A. and Intesa
Sanpaolo S.p.A., which are both part of the Intesa Sanpaolo Group, are both authorised by the Banca d'Italia and are both regulated by the
Financial Services Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.
Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information
and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or
correctness. Past performance is not a guarantee of future results. The investments and strategies discussed in this research may not be suitable
for all investors. If you are in any doubt you should consult your investment advisor.
This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of
any financial products. It should not be regarded as a substitute for the exercise of the recipients own judgment. No Intesa Sanpaolo S.p.A. or
Banca IMI S.p.A. entities accept any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in
this report. This document may only be reproduced or published together with the name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.
Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management Policy for managing effectively the conflicts of interest
which might affect the impartiality of all investment research which is held out, or where it is reasonable for the user to rely on the research, as
being an impartial assessment of the value or prospects of its subject matter. A copy of this Policy is available to the recipient of this research
upon making a written request to the Compliance Officer, Intesa Sanpaolo S.p.A., 90 Queen Street, London EC4N 1SA. Intesa Sanpaolo S.p.A.
has formalised a set of principles and procedures for dealing with conflicts of interest (Research Policy). The Research Policy is clearly explained
in the relevant section of Intesa Sanpaolos website (www.intesasanpaolo.com).
Member companies of the Intesa Sanpaolo Group, or their directors and/or representatives and/or employees and/or members of their
households, may have a long or short position in any securities mentioned at any time, and may make a purchase and/or sale, or offer to make a
purchase and/or sale, of any of the securities from time to time in the open market or otherwise.
Intesa Sanpaolo S.p.A. issues and circulates research to Qualified Institutional Investors in the USA only through Banca IMI Securities Corp., 1
William Street, New York, NY 10004, USA, Tel: (1) 212 326 1230.
Residents in Italy: This document is intended for distribution only to professional investors as defined in art.31, Consob Regulation no. 11522 of
1.07.1998 either as a printed document and/or in electronic form.
Person and residents in the UK: This document is not for distribution in the United Kingdom to persons who would be defined as private
customers under rules of the FSA.
US persons: This document is intended for distribution in the United States only to Qualified Institutional Investors as defined in Rule 144a of the
Securities Act of 1933. US Customers wishing to effect a transaction should do so only by contacting a representative at Banca IMI Securities
Corp. in the US (see contact details above).
Valuation methodology
The Intesa Sanpaolo S.p.A. Equity Research Department values the companies for which it assigns recommendations as follows:
We obtain a fair value using a number of valuation methodologies including: discounted cash flow method (DCF), dividend discount model
(DDM), embedded value methodology, return on allocated capital, break-up value, asset-based valuation method, sum-of-the-parts, and
multiples-based models (for example PE, P/BV, PCF, EV/Sales, EV/EBITDA, EV/EBIT, etc.). The financial analysts use the above valuation methods
alternatively and/or jointly at their discretion. The assigned target price may differ from the fair value, as it also takes into account overall
market/sector conditions, corporate/market events, and corporate specifics (ie, holding discounts) reasonably considered to be possible drivers of
the companys share price performance. These factors may also be assessed using the methodology indicated above.

Intesa Sanpaolo Research Department

Equity Company Note

7 August 2008
Equity rating key
In its recommendations, Intesa Sanpaolo S.p.A. uses an absolute rating system, which is not related to market performance and whose key is
reported below:
BUY: if the target price is 20% higher than the market price.
ADD: if the target price is 10%-20% higher than the market price.
HOLD: if the target price is 10% below or 10% above the market price.
REDUCE: if the target price is 10%-20% lower than the market price.
SELL: if the target price is 20% lower than the market price.
Target price: the market price that the analyst believes the share may reach within a one-year time horizon.
Market price: closing price on the day before the issue date of the report, as indicated on the first page, except where otherwise indicated, as
shown on the first page.
RATING SUSPENDED: the rating and target price have been suspended temporarily to comply with applicable regulations and/or firm policies in
certain circumstances, including when Intesa Sanpaolo Group is acting in an advisory capacity in a merger or strategic transaction involving the
company.
NO RATING: the company is or may be covered by the Research Department but no rating or target price is assigned.
Coverage policy and frequency of research reports
The list of companies covered by the Research Department is available upon request. Intesa Sanpaolo S.p.A. aims to provide continuous coverage
of the companies on the list in conjunction with the timing of periodical accounting reports and any exceptional event that affects the issuers
operations. The companies for which Banca IMI acts as sponsor or specialist are covered in compliance with regulations issued by regulatory
bodies with jurisdiction. In the case of a short note, we advise investors to refer to the most recent company report published by Intesa Sanpaolo
S.p.As Research Department for a full analysis of valuation methodology, earnings assumptions, risks and the historical of recommendation and
target price. Research is available on Banca IMIs website (www.bancaimi.com or www.intesasanpaolo.com) or by contacting your sales
representative.
Historical recommendations and market price trend (-1Y)

5
4.5
4

Historical recommendations and target price trend (-1Y)

Date
Rating
TP
Mkt Price
16-Jan-08
ADD
3.92
3.31
14-Mar-08
BUY
4.30
3.45
7-May-08
ADD
4.30
3.88
15-May-08
ADD
4.62
4.05
13-Jun-08
ADD
4.90
4.40

3.5
3
Aug-07

Dec-07
I:MT(P)

Apr-08

Aug-08

Target Price

Specific disclosures
Banca IMI discloses interests and conflicts of interest, as defined by: Articles 69-quater and 69-quinquies, of Consob Resolution No.11971 of
14.05.1999, as subsequently amended and supplemented; the NYSEs Rule 472 and the NASDs Rule 2711; the FSA Policy Statement 04/06
Conflicts of Interest in Investment Research March 2004 and the Policy Statement 05/03 Implementation of Market Abuse Directive, March
2005. The Intesa Sanpaolo Group maintains procedures and organisational mechanisms (Information barriers) to professionally manage conflicts
of interest in relation to investment research. We provide the following information on Intesa Sanpaolo Groups conflicts of interest:
1 The Intesa Sanpaolo Group has a conflict of interest inasmuch as it plans to solicit investment banking business or intends to seek
compensation from the Company in the next three months.
2 The Intesa Sanpaolo Group has made significant financing to Maire Tecnimont and its parent and group companies.
3 Banca IMI was Joint Global Coordinator, Lead Manager and Sponsor for Maire Tecnimont in the IPO on November 2007.
Intesa Sanpaolo Research Rating Distribution (at 1 May 2008)
Number of companies covered: 105
BUY
Total Equity Research Coverage (%)
36
of which Intesa Sanpaolos Clients* (%)
28

ADD
29
33

HOLD
29
33

REDUCE
4
25

SELL
2
100

(*) Companies on behalf of whom Intesa Sanpaolo and the other companies of the Intesa Sanpaolo Group have provided corporate and Investment banking services in the last 12
months; percentage of clients in each rating category

Intesa Sanpaolo Research Department

Equity Company Note

7 August 2008
Banca IMI SpA

Intesa Sanpaolo Research Department Head of Research Gregorio De Felice

Head of Equity & Credit Research
Giampaolo Trasi

+39 02 7261 2297

giampaolo.trasi@intesasanpaolo.com

Equity Research
Monica Bosio
Luca Bacoccoli
Marta Caprini
Sergio Ciaramella
Alberto Francese
Manuela Meroni
Gian Luca Pacini
Bruno Permutti
Fabio M. Picardi
Roberto Ranieri
Lorenzo Re

+39 02 7261 2725

+39 02 7261 5026
+39 02 8796 2087
+39 02 7261 5688
+39 02 7261 2707
+39 02 7261 5937
+39 02 7261 2971
+39 02 7261 5772
+39 02 7261 2972
+39 02 7261 5011
+39 02 7261 2387

monica.bosio@intesasanpaolo.com
luca.bacoccoli@intesasanpaolo.com
marta.caprini@intesasanpaolo.com
sergio.ciaramella@intesasanpaolo.com
alberto.francese@intesasanpaolo.com
manuela.meroni@intesasanpaolo.com
gianluca.pacini@intesasanpaolo.com
bruno.permutti@intesasanpaolo.com
fabio.picardi@intesasanpaolo.com
roberto.ranieri@intesasanpaolo.com
lorenzo.re@intesasanpaolo.com

MAC & Corporate Broking Research

Maria Paola Toschi
Sabrina Maggio
Serena Polini

+39 02 7261 2293

+39 02 7261 2294
+39 02 7261 2292

maria.toschi@intesasanpaolo.com
sabrina.maggio@intesasanpaolo.com
serena.polini@intesasanpaolo.com

Research Production
Anna Whatley
Cinzia Bovina
Bruce Marshall
Annita Ricci

+39 02 7261 2763

+39 02 7261 5437
+39 02 7261 2278
+39 02 7261 2279

anna.whatley@intesasanpaolo.com
cinzia.bovina@intesasanpaolo.com
robert.marshall@intesasanpaolo.com
annita.ricci@intesasanpaolo.com

Institutional Sales
Nicola Maccario
Insaf Amri
Carlo Cavalieri
Francesca Guadagni
Gregory Halvorsen
Claudio Manes
Nicola Mastrototaro
Robert Meier
Laura Spinella
Daniela Stucchi

+39 02 7261 5517

+39 02 7261 5897
+39 02 7261 2722
+39 02 7261 5817
+39 02 7261 5857
+39 02 7261 5542
+39 02 7261 2976
+39 02 7261 2158
+39 02 7261 5782
+39 02 7261 5708

nicola.maccario@bancaimi.com
insaf.amri@bancaimi.com
carlo.cavalieri@bancaimi.com
francesca.guadagni@bancaimi.com
gregory.halvorsen@bancaimi.com
claudio.manes@bancaimi.com
nicola.mastrototaro@bancaimi.com
robert.meier@bancaimi.com
laura.spinella@bancaimi.com
daniela.stucchi@bancaimi.com

US Institutional Sales
Jack Del Duca
Barbara Leonardi

+1 212 326 1234

+1 212 326 1232

DelDucaJ@bancaimius.com
LeonardiB@bancaimius.com

Sales Trading
Roberto Gussoni
Adele Marchetti
Lorenzo Pennati
Stefano Rivarola
Mark Wilson

+39 02 7261 5929

+39 02 7261 5880
+39 02 7261 5647
+39 02 7261 5420
+39 02 7261 2758

roberto.gussoni@bancaimi.com
adele.marchetti@bancaimi.com
lorenzo.pennati@bancaimi.com
stefano.rivarola@bancaimi.com
mark.wilson@bancaimi.com

Securities Lending
Carlo Antonioli

+44 207 894 2444

carlo.antonioli@bancaimi.co.uk

Corporate Brokerage
Danilo Brusa
Fabrizio Speroni

+39 02 7261 5917

+39 02 7261 5894

danilo.brusa@bancaimi.com
fabrizio.speroni@bancaimi.com

Market Hub Brokerage & Execution

Italian Equities - Sergio Francolini
Foreign Equities - Francesco Riccardi

+39 02 7261 5859

+39 02 7261 2901

sergio.francolini@bancaimi.com
francesco.riccardi@bancaimi.com

Market Hub Exchange Traded Derivatives

Matteo Massardi
Biagio Merola - Milan
Duncan Barker - London

+39 02 7261 2407

+39 02 7261 2420
+39 02 7261 2427

matteo.massardi@bancaimi.co.uk
biagio.merola@bancaimi.com
duncan.barker@bancaimi.co.uk

Market Hub @ sales

Giovanni Spotti

+39 02 7261 2339

giovanni.spotti@bancaimi.com

Piazzetta Giordano DellAmore, 3

20121 Milan, Italy
Tel: +39 02 7261 1

Banca IMI
Securities Corp.
1 William Street
10004 New York, NY, USA
Tel: (1) 212 326 1230

Banca IMI
London Branch
90 Queen Street
London EC4N 1SA, UK
Tel +44 207 894 2600

Banca IMI

Intesa Sanpaolo Research Department