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30 Jul 08.Finmeccanica reported first-half results on July 30th. Finmeccanica continued to grow organically during the first half of 2008, confirming the stability and quality of its growth plan. Revenues came in at €6,433m in 1H08, (2007: €6,079m). EBITA was €400m (2007: €351m) in the same period of 2007, with an increase of €49m.

Revenues came in at €6,433m (2007: €6,079m), an increase of €354m (+6%). Aerospace and Defence accounted for 80% of production in the period, and Energy and Transport 20%. The increase was mainly due to the Aeronautics sector, with greater contributions coming from both the civil segment (increase in production of ATR, B787 and A380 aircraft) and the military segment (greater activity on the C-27J and Eurofighter). There was also significant revenue growth in the Space business, owing to higher output in manufacturing and services, and in the Transport sector.

Net profit was €297m, a rise of €120m compared to 1H07. The
figure was boosted by the capital gain from the sale of 2.9% of STM. Stripping out this transaction, profit still advanced by +37%.

Net debt stood at €2,607m, from €2,268m in 1H07. The result reflects the normal seasonal fluctuations in Group company revenues, and is in any case within the limits set by the ratings agencies and below the limits set by the Group itself as part of its prudent financial policy.

New orders totalled €6,809m, an increase of €331m (+5%) on the figure of €6,478m recorded in 1H07, and were received in almost all segments. Aerospace and Defence accounted for 76% of new orders, with the remaining 24% recorded in Energy and Transport. In more detail: Defence Systems (+90% versus 1H07); Energy (+77%); Space (+28%); Helicopter (+10%); Security & Defence Electronics (+9%).

The order backlog came in at €39,005m, an increase of 8% on the €36,245m recorded at 30 June 2007. Aerospace and Defence accounted for 79% of the backlog, while the remaining 21% related to Energy and Transport. At theend of the period, the order backlog was equivalent to around three years of production.

Costs in Research and Development totalled €834m, compared to €851m in the same period of 2007. This was equivalent to 13% of revenues. In the first half of the year, 95% of R&D spending was in Aerospace and Defence, with the remaining 5% in Energy and Transport. The main programmes related to: Security & Defence Electronics (33% of R&D spending); Aeronautics (29% of R&D spending) and Helicopters (16% of R&D spending).

Finmeccanica’s headcount stood at 61,909 at 30 June 2008, an increase of 1,161 vs. the 60,748 staff on the payroll at 31 December 2007. The increase was due in particular to a net increase in the Aeronautics,
Helicopters and Energy sectors. In geographical terms, 70% of staff are located in Italy, and 30% are based abroad (mainly in the UK, France and the US).

Adj. EPS (Earnings Per Share net of extraordinary operations and minority
interests) is up by 41% compared with 1H07 and is EUR cents 53.

Costs in Research and Development totalled €834m, equivalent to 13% of revenues.

On 14 July The Company announced that the €3.2bn syndicated loan for the acquisition of DRS Technologies, Inc. by Finmeccanica S.p.A. has been completed successfully. Domestic and international banks together offered around €7bn, more than double the original amount.

This led to a significant reduction in the amounts allocated, with banks required on average to lend less than half the amount originally offered.

In addition to the four bookrunners (Goldman Sachs International, Intesa Sanpaolo S.p.A., Mediobanca-Banca di Credito Finanziario S.p.A. and Unicredit Group), 36 banks took part in the transaction, of which 16 acted as Mandated Lead Arrangers.

“We are particularly pleased that this transaction has been welcomed so strongly by the domestic and the international banking sector,” said Pier Francesco Guarguaglini, Ch

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