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Draft 2011 Annual Report

Italcementi ANNUALREPORT

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    Draft

    2011 Annual Report

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    Contents

    Consolidated Annual Report

    ANNUAL REPORT

    PRESENTATIONLetter to the stakeholders 4

    Italcementi Group in the world 6

    Highlights 8

    Italcementi S.p.A. on the Stock Exchange 9

    GENERAL INFORMATIONProfessional profiles of the members of the Board of Directors and the Board of Statutory Auditors 15

    Notice of call 22

    Italcementi S.p.A. Annual Report

    Directors report

    Results and significant events for the year 151

    Dealings with related parties 155

    Human resources 157

    Disputes and pending proceedings 161

    Italcementi Cav. Lav. Carlo Pesenti foundation 161

    Performance of the Ciments Franais group 163

    Report on corporate governance and ownership structure 165

    Resolution 201

    Separate financial statements

    Financial statements 240

    Notes 245

    Annexes 299

    Representation pursuant to art. 154-bis paragraph 5 TUF 301

    Report of the Board of Statutory Auditors 302

    Report of the Independent Auditors 308

    EXTRAORDINARY SESSION 309

    Consolidated financial statements

    Financial statements 64

    Notes 69

    Annexes 137

    Representation pursuant to art. 154-bis paragraph 5 TUF 145

    Report of the Independent Auditors 146

    Directors reportResults and significant events for the year 29

    The international economy and industry trends 31

    Business and financial performance in 2011 32

    Risks and uncertainties 41

    Performance by country and business 45

    Energy project 51

    Dealings with related parties 53

    Information systems 54

    Engineering, technical assistance research and development 58

    Innovation 59

    E-business 59

    Disputes and pending proceedings 60

    Significant events after December 31, 2011 61

    Outlook 62

    This Annual Report has been prepared in English for the convenience of international readers.

    The original Italian documents should be considered the authoritative version.

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    2011 Annual Report

    Italcementi S.p.A.

    Via G. Camozzi, 124 - 24121 Bergamo - ItalyShare Capital 282,548,942Bergamo Companies Register

    Company subject to managementand coordination activity by Italmobiliare S.p.A.

    The photos illustrating this report refer to the i.labproject, the Italcementi Group's new Research and Innovation Center in Bergamo,

    designed by architect Richard Meier. The i.lab building, which covers a surface area of 23,000 square meters, has been build under

    LEED standards, the most authoritative rating system assessing the energy and environmental sustainability of buildings.

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    Letter to the stakeholders

    4

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    www.italcementigroup.com

    5

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    6

    TERMINALSAlbania

    GambiaSri LankaMauritania(grinding center)

    Italcementi Groupin the world(as of December 31st 2011)

    NORTH AMERICAESSROCCIMENT QUEBECESSROC SAN JUANRIVERTON

    ARROWCAMBRIDGECRIDER & SHOCKEY

    FRANCECIMENTS FRANCAISCIMENTS CALCIAGSMUNIBTON

    AXIM

    SPAINFINANCIERA Y MINERA

    ITALYITALCEMENTICALCESTRUZZICTG

    AXIM ITALIAITALGEN

    BELGIUMCCB

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    Presentation Italcementi Group in the world 6

    General information Highlights 8

    Annual Report Italcementi S.p.A. on the Stock Exchange 9

    Extraordinary session 309

    2011 Annual Report

    www.italcementigroup.com

    7

    BULGARIADEVNYA CEMENTVULKAN CEMENT

    GREECEHALYPS CEMENT

    TURKEYAFYON

    CYPRUSVASSILIKO CEMENT

    EGYPTSUEZ CEMENTTOURAH CEMENTHELWAN CEMENTRMB

    MOROCCOCIMENTS DU MAROC

    SAUDI ARABIAINTERNATIONAL CITY FORREADY MIX (JV)

    KUWAITHILAL CEMENT COMPANY

    KAZAKHSTANSHYMKENT CEMENT

    INDIAZUARI CEMENT

    THAILANDJALAPRATHAN CEMENT

    ASIA CEMENT

    CHINASHAANXI FUPING CEMENT

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    8

    Group business and financial highlights

    (in millions of euro) 2011 2010 2009 2008 2007

    Revenue 4,721 4,660 5,006 5,776 6,001

    Recurring EBITDA 697 842 972 1,113 1,404

    EBITDA 738 839 957 1,103 1,405

    EBIT 129 370 443 607 958

    Profit (loss) for the period 91 197 215 277 612

    Profit (loss) attributable to owners of parent (3) 46 71 142 424

    Capital expenditure 402 542 742 988 999

    Total equity 4,895 4,986 4,692 4,622 4,760

    Equity attributable to owners of parent 3,495 3,525 3,353 3,330 3,479

    Net debt 2,093 2,231 2,420 2,679 2,418

    Number of employees at December 31 19,896 20,139 21,155 22,243 23,706

    Highlights

    (in millions of euro) 2011 2010 % %

    change change*

    Cement 3,056 3,315 (7.8) (2.7)

    Ready mixedconcrete/Aggregates 1,388 1,038 33.8 3.5

    Other 277 307 (10.1) (2.2)

    Total 4,721 4,660 1.3 (1.3)

    * changes at constant size and exchange rates

    Recurring EBITDA(in millions of euro)

    Sales volumes and internaltransfers by business

    * change at constant size

    2011 2010

    842

    %39.03.0%58.0%

    697

    44.0%2.3%53.7% Cementoe clinker (Mt)

    Inerti (Mt)

    Calcestruzzo(Mmc)

    e

    51,1(1,9)%

    36,7

    38,13,7%

    9,5

    14,553,2%

    52,1

    (1,9)%*

    (5,1)%*

    0,8%*

    2011

    2010

    North AmericaOthers

    Central Western Europe2011

    2010

    Contribution to consolidated revenue by line of business

    64.7% 29.4% 5.9% 71.1% 22.3% 6.6%

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    9

    2

    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

    1.a Share capital at 12.31.2011

    At 12.31.2011, Italcementi S.p.A. share capitalwas 282,548,942 represented by 282,548,942shares with a par value of 1 each, of which177,117,564 ordinary shares and 105,431,378savings shares.

    1.b Ordinary shares

    Survey of shareholders with over 2% of sharecapital at 12.31.2011 (based on theshareholders' register, Consobcommunications and other information).

    Italian Funds 1.62%

    Foreign Companies 1.82%

    Foreign Insurance Co. 1.52%

    Italian Insurance Co. 0.12%

    Other 2.02%

    Private Individuals 41.78%

    Foreign Funds 21.05%

    Foreign Banks 6.36%

    Italian Banks 4,41%

    Brokers and Omnibus Accounts 15.59%

    Italian Companies 3.70%

    1.c Ordinary shares

    Breakdown of free float basedon information in theshareholders' register forpayment of the FY 2010dividend Shareholders listed inthe register: 19,793

    1

    2

    3

    4

    56

    7

    8

    9

    10

    11

    2 Financial indicators

    Italcementi S.p.A. 2011 2010 2009 2008 2007

    (euro)

    Market prices (annual average official prices):

    - Ordinary share 5.855000 7.200000 8.893000 11.020000 20.022000

    - Savings share 2.899000 4.007000 4.793000 7.889000 13.238000

    Per share dividend:

    - Ordinary share 0.120000 (1) 0.120000 0.120000 0.180000 0.360000

    - Savings share 0.186478 (1) 0.120000 0.120000 0.210000 0.390000

    Dividend yield (on annual average official prices):

    - Ordinary share 2.05% 1.67% 1.35% 1.63% 1.80%

    - Savings share 6.43% 2.99% 2.50% 2.66% 2.95%

    (1) proposal of Board of Directors of March 2, 2012

    Savings shares 37%

    Ordinary shares 63%

    1

    2

    Italmobiliare 60.363%

    Free float 34.914%

    1

    2

    Group First Eagle Funds (First EagleInvestment Management, LLC) - USA 2.812%

    3

    Treasury shares 2.142%4

    1011

    1

    1

    2

    1

    4

    678

    9

    5

    4

    3

    3

    2

    Presentation Italcementi Group in the world 6

    General information Highlights 8

    Annual Report Italcementi S.p.A. on the Stock Exchange 9

    Extraordinary session 309

    2011 Annual Report

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    3.a Italcementi share prices and "FTSE MIB INDEX" (01.02.2007 - 02.29.2012)

    2Mar.11

    11Apr.11

    21May.

    11

    30June.

    11

    9Aug.

    11

    18Sep.

    11

    28Oct.11

    7Dec.

    11

    2Jan.

    07

    11Feb.

    07

    23Mar.07

    2May.

    07

    11June.

    07

    21July.

    07

    30Aug.

    07

    9Oct.07

    18Nov.

    07

    28Dec.

    07

    6Feb.

    08

    17Mar.08

    26Apr.08

    5June.

    08

    15July.

    08

    24Aug.

    08

    3Oct.08

    12Nov.

    08

    22Dec.

    08

    31Jan.

    09

    12Mar.09

    21Apr.09

    31May.

    09

    10July.

    09

    19Aug.

    09

    28Sep.

    09

    7Nov.

    09

    17Dec.

    09

    26Jan.

    10

    7Mar.10

    16Apr.10

    26May.

    10

    5July.

    10

    14Aug.

    10

    23Sep.

    10

    2Nov.

    10

    12Dec.

    10

    21Jan.

    11

    16Jan.

    12

    25Feb.

    12

    23

    21

    19

    11,000

    13,000

    15,000

    17,000

    19,000

    21,000

    23,000

    25,000

    27,000

    29,000

    31,000

    33,000

    35,000

    37,000

    39,000

    41,000

    43,000

    45,00025

    FTSEMIBINDEX

    17

    15

    13

    11

    9

    7

    5

    3

    1

    3.b Italcementi shares and "FTSE MIB INDEX" performance (base 01.02.2007 = 100)

    3 Share prices and market capitalization

    120

    100

    80

    60

    40

    20

    110

    90

    70

    50

    30

    2Mar.11

    11Apr.11

    21May.

    11

    30June.

    11

    9Aug.

    11

    18Sep.

    11

    28Oct.11

    7Dec.

    11

    2Jan.

    07

    11Feb.

    07

    23Mar.07

    2May.

    07

    11June.

    07

    21July.

    07

    30Aug.

    07

    9Oct.07

    18Nov.

    07

    28Dec.

    07

    6Feb.

    08

    17Mar.08

    26Apr.08

    5June.

    08

    15July.

    08

    24Aug.

    08

    3Oct.08

    12Nov.

    08

    22Dec.

    08

    31Jan.

    09

    12Mar.09

    21Apr.09

    31May.

    09

    10July.

    09

    19Aug.

    09

    28Sep.

    09

    7Nov.

    09

    17Dec.

    09

    26Jan.

    10

    7Mar.10

    16Apr.10

    26May.

    10

    5July.

    10

    14Aug.

    10

    23Sep.

    10

    2Nov.

    10

    12Dec.

    10

    21Jan.

    11

    16Jan.

    12

    25Feb.

    12

    Italcementi savings shares

    Italcementi ordinary shares

    FTSE MIB INDEX

    Italcementi savings shares

    Italcementi ordinary shares

    "FTSE MIB INDEX"

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    3.c Italcementi share prices and "FTSE MIB INDEX" (01.03.2011 - 02.29.2012)

    8

    7

    6

    5

    4

    0

    1

    2

    3

    3Jan.

    11

    23Jan.

    11

    12Feb.

    11

    04Mar.11

    24Mar.11

    13Apr.11

    03May.

    11

    23May.

    11

    12June.

    11

    02July.

    11

    22July.

    11

    11Aug.

    11

    13Jan.

    11

    02Feb.

    11

    22Feb.

    11

    14Mar.11

    03Apr.11

    23Apr11

    13May.

    11

    02June.

    11

    22June.

    11

    12July.

    11

    01Aug.

    11

    21Aug.

    11

    31Aug.

    11

    10Sep.

    11

    20Sep.

    11

    30Sep.

    11

    10Oct.11

    20Oct.11

    30Oct.11

    09Nov.

    11

    19nov.

    11

    29nov.

    11

    09Dec.

    11

    19Dec.

    11

    29Dec.

    11

    08Jan.

    11

    18Jan.

    12

    28Jan.

    12

    07feb.

    12

    17Feb.

    12

    27Feb.

    12

    FTSEMIBINDEX

    12,000

    14,000

    16,000

    18,000

    20,000

    22,000

    24,000

    3.d Italcementi share and "FTSE MIB INDEX" performance (base 01.03.2011 = 100)120

    110

    100

    90

    80

    70

    40

    50

    60

    3Jan.

    11

    23Jan.

    11

    12Feb.

    11

    04Mar.11

    24Mar.11

    13Apr.11

    03May.

    11

    23May.

    11

    12June.

    11

    02July.

    11

    22July.

    11

    11Aug.

    11

    13Jan.

    11

    02Feb.

    11

    22Feb.

    11

    14Mar.11

    03Apr.11

    23Apr11

    13May.

    11

    02June.

    11

    22June.

    11

    12July.

    11

    01Aug.

    11

    21Aug.

    11

    31Aug.

    11

    10Sep.

    11

    20Sep.

    11

    30Sep.

    11

    10Oct.11

    20Oct.11

    30Oct.11

    09Nov.

    11

    19nov.

    11

    29nov.

    11

    09Dec.

    11

    19Dec.

    11

    29Dec.

    11

    08Jan.

    11

    18Jan.

    12

    28Jan.

    12

    07feb.

    12

    17Feb.

    12

    27Feb.

    12

    Presentation Italcementi Group in the world 6

    General information Highlights 8

    Annual Report Italcementi S.p.A. on the Stock Exchange 9

    Extraordinary session 309

    Italcementi savings shares

    Italcementi ordinary shares

    "FTSE MIB INDEX"

    Italcementi savings shares

    Italcementi ordinary shares

    "FTSE MIB INDEX"

    2011 Annual Report

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    12

    2011 2012

    Share price (euro) Capitalization (millions of euro)01.03.11 high low 02.29.12 01.03.11 high low 02.29.12

    Ordinary shares 6.529 7.647 4.081 5.703 1,156 1,354 723 1,010

    Savings shares 3.616 3.890 1.718 2.454 381 410 181 259

    Total 1,537 1,764 904 1,269

    FTSE MIB INDEX 20,436 23,178 13,474 16,351

    3.e Share prices and market capitalization from 01.03.2011 to 02.29.2012

    3.f Average monthly capitalization (January 2011 - February 2012)

    Italcementi ordinary shares

    Italcementi savings shares

    Total capitalization

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    Month Ordinary shares (euro) Savings shares (euro)

    Number Weighted Trade Number Weighted Trade

    of traded monthly value of traded monthly value

    shares average price shares average price

    January 2011 22,840,216 6.311 144,143,991 3,445,499 3.562 12,271,747

    February 22,793,639 6.672 152,077,627 4,302,879 3.571 15,364,715

    March 19,178,428 7.336 140,699,989 4,656,927 3.778 17,593,731

    April 9,360,220 7.170 67,109,451 1,961,600 3.710 7,278,120May 16,391,654 7.034 115,298,510 2,696,290 3.635 9,802,068

    June 9,103,404 6.322 57,547,710 2,922,009 3.096 9,047,518

    July 10,226,323 5.912 60,458,518 4,554,844 2.704 12,316,727

    August 13,849,651 4.960 68,688,529 3,293,559 2.335 7,691,421

    September 15,953,916 4.559 72,732,158 5,411,506 2.116 11,452,033

    October 12,186,079 4.707 57,362,988 2,625,846 2.210 5,804,094

    November 19,388,888 4.646 90,079,014 3,686,258 1.979 7,294,241

    December 5,653,626 4.491 25,390,706 1,925,830 1.786 3,438,864

    January 2012 6,407,382 5.073 32,506,972 2,817,268 2.049 5,772,373

    February 6,311,299 5.750 36,292,403 3,576,974 2.354 8,420,207

    4.b Monthly turnover (January 2011 - February 2012)

    2011 2012

    4 Trading volumes on the Italian Stock Exchange

    Italcementi ordinary shares

    Italcementi savings shares

    Presentation Italcementi Group in the world 6

    General information Highlights 8

    Annual Report Italcementi S.p.A. on the Stock Exchange 9

    Extraordinary session 309

    4.a Number of traded shares and weighted monthly average price

    2011 Annual Report

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    14

    Corporate bodies

    Board of Directors(Term ends on approval of financial statements at 12.31.2012)

    Giampiero Pesenti 1 ChairmanPierfranco Barabani 1 Executive Deputy Chairman

    Lorenzo Renato Guerini 8 Deputy ChairmanCarlo Pesenti 1-2 Chief Executive Officer - CEO

    Giulio Antonello 7Alberto Bombassei 4-7

    Giorgio BonomiAlberto Cl 3-5-6-7

    Federico Falck 1-5-6-7Danilo GambirasiCarlo Garavaglia 7

    Italo Lucchini 4Sebastiano Mazzoleni

    Yves Ren Nanot 1Marco Piccinini

    Ettore Rossi 7-9Attilio Rota 1-5-6-7

    Carlo Secchi 5-6-7Elena Zambon 7Emilio Zanetti 4-7

    Paolo Santinoli 10 Secretary to the Board

    Board of Statutory Auditors(Term ends on approval of financial statements at 12.31.2011)

    Acting AuditorsMaria Martellini ChairmanMario Comana

    Luciana GattinoniSubstitute Auditors

    Fabio Bombardieri

    Carlo Luigi RossiLeonardo Cossu

    Chief Operating Officer - COO

    Giovanni Ferrario

    Manager in charge of preparing the companys financial reports

    Carlo Bianchini

    Independent Auditors(Term ends on approval of financial statements at 12.31.2019)

    KPMG S.p.A.

    1 Member of the Executive Committee2 Executive Director responsible for overseeing the functioning of the internal control system

    3 Lead independent director4 Member of the Remuneration Committee5 Member of the Internal Control Committee6 Member of the Committee for Transactions with Related Parties7 Independent Director (in accordance with the Voluntary Code of Conduct and Legislative Decree no.58 of February 24, 1998)8 Independent Director (in accordance with the Legislative Decree no.58 of February 24, 1998)9 Member of the Compliance Committee10 Secretary to the Executive Committee

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

    Board of Directors

    Giampiero Pesenti

    Born in Milan, May 5, 1931

    Degree in mechanical engineering Milan Polytechnic.

    1958, began working in the Technical Division of Italcementi S.p.A., the family firmestablished in 1864.

    1983, appointed Chief Operating Officer; 1984, Chief Executive Officer; since 2004Chairman of Italcementi S.p.A..

    1984, appointed Chairman-Chief Executive Officer of Italmobiliare S.p.A., the holdingcompany that controls Italcementi S.p.A., the Sirap Gema group and other finance andbanking companies.

    Director of Mittel S.p.A., Allianz S.p.A., Compagnie Monegasque de Banque, Finter BankZurich and other companies in the Italmobiliare Group.

    Pierfranco Barabani

    Born in Milan, September 9, 1936

    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.

    Lorenzo Renato Guerini

    Born in Bergamo, September 10, 1949

    Degree in Business Economics Bocconi University, Milan.

    Master from the Wharton School University of Pennsylvania.

    Registered on the Bergamo Roll of Certified Accountants; registered on the National Roll

    of Account Auditors; technical consultant to the Bergamo Law Court.Began professional career in 1973 as an account auditor with Arthur Andersen.

    1978, joined the Montedison Group in a managerial post, handling management control forthe Groups international companies.

    1980, joined the KPMG Network and became a partner in 1984; 1989, set up KPMGauditing arm in Bergamo; 1994, appointed head of KPMG Network operations in Milan;1997, appointed Chairman of KPMG S.p.A., Chairman of the KPMG Italian Network andmember of the Board of Directors of KPMG International, posts he held for 13 years untilreaching the maximum allowed term of office.

    An independent professional since January 2011. April 2011, joined the Italcementi S.p.A.Board of Directors.

    Deputy Chairman of Italcementi S.p.A. since September 2011.

    www.italcementigroup.com

    15

    Presentation 4

    General information Professional profiles of the members of the Board of Directors

    Annual Report and the Board of Statutory Auditors 15

    Extraordinary session Notice of call 22

    2011 Annual Report

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    16

    Carlo PesentiBorn in Milan, March 30, 1963

    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 Groupproduction units and especially in the Corporate Finance, Administration & ControlDivision.

    Having held the post of Joint Chief Operating Officer, in May 2004 he was appointedItalcementi Chief Executive Officer.

    Chief Operating Officer of Italmobiliare.

    Giulio Antonello

    Born in Bari, April 12, 1968

    Degree in Finance from Wharton School, University of Pennsylvania, and MIA fromColumbia University.

    Worked as an investment banker for the Crdit Agricole group in New York.

    On return to Europe, held a number of posts in the Ciment Portland SA cement group(now part of Holcim AG) in Switzerland.

    Was a member of the Board of Directors of companies including Concrete Milano S.p.A.,Dolomite Colombo S.p.A. and Industriale Calce S.p.A.

    2006, CEO of Alerion Clean Power S.p.A., a company listed on the Milan stock exchange,

    which produces energy from renewable sources.1996-2011, also a member of the Board of Directors of Campisi SIM, Telelombardia S.p.A.,Antenna 3 S.p.A., Enertad S.p.A. (today ERG Renew), SIAS S.p.A., Industria eInnovazione S.p.A. and Reno de Medici S.p.A.

    Alberto Bombassei

    Born in Vicenza, October 5, 1940

    Chairman and Chief Executive Officer of Brembo S.p.A., a worldwide market leader inbraking systems and acknowledged innovator in disk brake technology.

    2003, awarded an honorary degree in mechanical engineering by the University of

    Bergamo2004, named a Cavaliere del Lavoro in Italys honors system.

    From June 2001 to May 2004, President of Federmeccanica.

    Since May 2004 Vice President of Confindustria for Industrial Relations and Social Affairs.

    Director of Atlantia S.p.A., Pirelli & C. S.p.A., Nuovo Trasporto Viaggiatori S.p.A. and FiatIndustrial S.p.A.

    Giorgio Bonomi

    Born in Bergamo, November 2, 1955

    Degree in law Milan State University.

    Practises law in Bergamo. Account auditor.As a specialist in distribution contracts, he has been involved in the creation of some ofItalys most important purchasing consortia. Assists some of the leading Italian groups onadvertising and mass merchandising, with a particular focus on growth and corporatedisputes (M&A).

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    Alberto ClBorn in Bologna, January 26, 1947, where he lives. Married with two children

    Degree in political science Bologna University.

    Full professor of Industrial Economics and Public Services Economics at BolognaUniversity.

    1995-1996, Minister of Industry and interim Minister of Foreign Trade and President of theEU Council of Ministers of Industry and Energy during Italys six-month presidency.

    1996, named a Cavaliere di Gran Croce in Italys honors system.

    Federico Falck

    Born in Milan, August 12, 1949 Married with two childrenDegree in mechanical engineering Milan Polytechnic.

    Began his career in 1977 at the Acciaierie e Ferriere Lombarde Falck S.p.A. (now FalckS.p.A.); after internships in a number of US steel companies, he worked mainly inproduction and procurements for steel operations; Procurements Manager and ChiefOperating Officer for many years.

    Currently Chairman of the Board of Directors of Falck S.p.A. and Falck RenewablesS.p.A., a Falck Group company listed on the Milan Stock Exchange (STAR segment);Director of Banca Popolare di Sondrio; Regional Councilor and Milan Section Councilor ofUnione Cristiana Imprenditori Dirigenti, member of the management committee ofAssolombarda, Director Fondazione Sodalitas (association for development of socialenterprise), Director of Fondazione Centesimus Annus.

    He was Chairman of ADR, Aeroporti di Roma Director of Camfin, Credito Italiano, BancoLariano, Cassa di Risparmio di Parma e Piacenza S.p.A., Viscontea Assicurazioni,Emittente Titoli and Chairman of Sodalitas.

    Danilo Gambirasi

    Born in Bergamo, January 22, 1932

    Science high-school degree.

    Italcementi S.p.A., first as Deputy Corporate Procurements Manager, later as InternationalRelations & Fuel Procurement Manager until his retirement in 1997.

    Carlo Garavaglia

    Born in Legnano (Milan), May 15, 1943

    Degree in economics & commerce Catholic University of Milan.

    Since 1972 member of Milan Roll of Public Accountants.

    Since 1979 an official account auditor, now a statutory auditor.

    From 1970 to 1976 a senior manager and partner of KPMG Peat Marwick in Milan.

    Founding partner of the L. Biscozzi A. Fantozzi tax law firm, since 1998 founding partnerof the Biscozzi Nobili legal and tax firm.

    Director of a number of listed and unlisted companies, honorary consul of Luxembourg forLombardy.

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    Italo LucchiniBorn in Bergamo, December 28, 1943

    Degree in economics & commerce Bocconi University, Milan.

    Assistant lecturer at Bocconi University, non-tenured lecturer at Bergamo University, publicaccountant with a successful practice in Bergamo.

    Supervisory Director at Unione di Banche Italiane S.c.p.a. and Chairman of the Board ofStatutory Auditors of BMW Financial Services Italia S.p.A. and BMW Italia S.p.A. and itssubsidiaries, also of Fedrigoni S.p.A. and Cartiere Fedrigoni & C. S.p.A.

    Sebastiano Mazzoleni

    Born in Milan, May 11, 1968

    Degree in geology Milan State University.

    Master in Business Administration, Bocconi University, Milan.

    Began his professional career in 1996 with CTG S.p.A., as a research geologist withresponsibility for assessing raw material reserves for cement production, coordinating workgroups in Italy, France, Spain and Thailand.

    2000, moved to Italcementi S.p.A. as Project Manager in the Marketing Division, with jointresponsibility for drawing up new product marketing plans and benchmark analyses for thedevelopment of competitive positioning models.

    2003, involved in the creation of the new Group New Product Marketing Division, where hewas responsible for innovation management in the USA, Greece, Bulgaria, Turkey, Egypt,

    Thailand, Kazakhstan and India. He was also Group manager of the new project forenhancement of recoverable resources.

    Since 2010 active in non-profit and consultancy on innovation.

    Yves Ren Nanot

    Born in Asnires (France), March 27, 1937

    Degree in engineering Paris.

    Master and Ph.D. in Business Administration from the University of California, LosAngeles.

    Held a variety of posts at Dupont de Nemours and then in the Total Group; 1993, joinedCiments Franais where he is currently Chairman.

    Marco Piccinini

    Born in Rome, July 2, 1952

    Attended science high school and the faculty of architecture. Subsequently studied"International Negotiating Techniques at the Institut des Hautes Etudes Internationales inGeneva.

    Director of a number of listed and unlisted companies active in automobiles and finance.

    Citizen of Monaco, advisor on finance and economy to the government of the Principalityof Monaco.

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    Ettore RossiBorn in Vicosoprano (Switzeland), August 4, 1934

    Degree in economics & commerce Catholic University, Milan.

    Worked in the Italcementi company from September 1953 to December 31, 1999, in theCorporate Administration Division.

    A senior administration manager from 1967, he held the posts of Secretary to theCorporate Administration Division (1977/1985), Joint Corporate Administration Manager(1985/1986), Corporate Finance Administration & Control Manager (1986/1995), DeputyGeneral Administration Manager (1995/1999).

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

    Attilio Rota

    Born in Bergamo, December 5, 1935

    Degree in law Pavia University.

    Has sat on the boards of directors and boards of statutory auditors of companies in thepublishing, cement, and agriculture sectors as well as on the boards of public and privatebodies.

    Practicing barrister in Bergamo.

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

    Carlo SecchiBorn in Mandello del Lario (Lecco), February 4, 1944

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

    Full professor in European Economic Policy since November 1, 1983, and director of theInstitute for Latin American Studies and Countries in Transition (ISLA) at the BocconiUniversity, Milan.

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

    entities active in science and culture.Director of various listed and unlisted companies.

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    Elena ZambonBorn in Vicenza, October 15, 1964

    Degree in Business Economics Bocconi University, Milan.

    From 1989 to 1994 worked at Citibank N.A. where she was in charge of internationalinvestors on the Italian market and, subsequently, of reports and risk assessments forinstitutional clients (especially insurance, financial and world corporation groups).

    Currently Chairman of Zambon S.p.A., a pharmaceuticals multinational established inVicenza in 1906, Deputy Chairman of ZaCh System Zambon Advanced Fine ChemicalsS.p.A. and Director of Zambon Company S.p.A., the group holding.

    Also Chairman of Secofind SIM S.p.A., the Multi-Family Office formed in 2000 to extend toother entrepreneurial families the expertise accumulated in wealth management for the

    Zambon family since 1994 in selection and control of asset managers.August 2011, member of Board of Directors of Fondo Strategico Italiano.

    Emilio Zanetti

    Born in Bergamo, October 26, 1931

    2002, honorary degree in economics & commerce from Bergamo University.

    1986, named a Cavaliere del Lavoro in Italys honors system.

    Since July 1985 Chairman of Banca Popolare di Bergamo S.p.A. (formerly BancaPopolare di Bergamo - Credito Varesino s.c.r.l.).

    Since 1993 director and Executive Committee member of Associazione Bancaria Italiana

    and formerly Vice President from 1998 to 2000.Since April 2007 Chairman of the Management Committee of UBI BANCA (Unione diBanche Italiane).

    Since October 1983 director of S.A.C.B.O. S.p.A. and Deputy Chairman since May 2008.

    Board of Statutory Auditors

    Maria Martellini

    Born in Rome, July 8, 1940

    Degree in economics & commerce Bocconi University, Milan.

    Specialization in economics of industry, London School of Economics.Full professor of economics & corporate management.

    Certified accountant and account auditor.

    Director of a number of listed and unlisted companies.

    Mario Comana

    Born in Bergamo, January 22, 1957

    Degree in economics & commerce Bergamo University.

    Specialization at Harvard University, Cambridge.

    Since 2000, full professor of financial intermediary economics at LUISS Guido Carli,

    Rome.Certified accountant and author of numerous banking publications; works as a consultantto financial intermediaries and as an independent and court-appointed consultant onfinancial questions and assessments.

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    Luciana GattinoniBorn in Bergamo, November 29, 1950

    Degree in economics & commerce Bocconi University, Milan.

    Has worked as a certified accountant since 1976, primarily on corporate and tax questions,and as a court consultant on insolvency procedures.

    She is also an auditor of a number of non-profit foundations and associations in the artsand science.

    Leonardo Cossu

    Born in Verona, May 23, 1958

    Degree in economics & commerce University of Brescia.Registered on the roll of certified accountants and accountants and on the register ofaccount auditors.

    Certified accountant, company assessor and technical consultant to the Brescia LawCourt, advisor to corporate clients on consolidation, change, growth and development ingeneral.

    Specific professional expertise in the corporate field; for more than fifteen years has beena director and independent director in companies listed on the Milan stock exchange,overseeing the operational aspects of the application for admission to trading and relationswith shareholders.

    Chairman of the board of statutory auditors, acting auditor, director and chief executive

    officer of a number of companies active in finance, banking and industry.Chairman and coordinator for more than fifteen years of the Fee Liquidation AdvisoryCommittee of the Brescia Roll of Certified Accountants and Accountants.

    Fabio Bombardieri

    Born in Alzano Lombardo (Bergamo), August 14, 1959

    Registered on the roll of certified accountants and accountants and on the register ofaccount auditors.

    Holds a number of positions in the area of voluntary jurisdiction and insolvencyprocedures.

    Provides professional services mainly for medium-size companies.

    Director/auditor of companies in the credit and publishing fields and of a number offoundations and non-commercial entities.

    Carlo Luigi Rossi

    Born in Alzano Lombardo (Bergamo), October 11, 1947

    Degree in economics & commerce Catholic University of Milan.

    June 1975, established the eponymous consultancy studio providing accounting,administrative, corporate and fiscal services.

    Holds a number of positions in the area of insolvency procedures.

    In the area of civil judicial proceedings, he works as a court-appointed technical

    consultant; for penal proceedings he works as a consultant to the state prosecutor.

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    The Shareholders are hereby called to attend the annual general Meeting on first call onApril 18th, 2012 at 10 a.m., in Bergamo, Via Madonna della Neve 8, and on second call onApril 19th, 2012, same time and place, to resolve upon the following

    Agenda

    Ordinary Items

    1) Board of Directors and Board of Statutory Auditors Reports on 2011 fiscal year:examination of financial statements at December 31st, 2011 and consequent resolutions;

    2) Remuneration Report;

    3) Authorization to purchase and dispose of treasury shares;

    4) Supplement to the Board of Directors;

    5) Appointment of the Statutory Auditors, of the Chairman of the Board of StatutoryAuditors and determination of its compensation;

    6) Proposal upon the increase of the total amount of rights allocated to the Long-termmonetary incentive Plans for Officers, linked to the appreciation of the Italcementishares.

    Extraordinary Items

    Proposal to amend articles 5 (Share capital), 15 (Appointment of the Board of Directors),16 (Replacement of Directors), 26 (Appointment of the Board of Statutory auditors) and 27(Replacement of Auditors) of the company bylaws. Ensuing and consequent resolutions.

    * * *

    Entitlement to take the floor: those who, according to the accounting entries of theIntermediary, are entitled to the voting rights at the end of the seventh open market daybefore the meeting date on first call (April 5th, 2012), have the right to take the floor.

    Entitlement to take the floor at the Meeting and to exercise voting right is proved by anotice to the Company, served by the Intermediary in favour of who is entitled to the votingright. Credit and debit entries registered in the Intermediary accounts after the abovementioned deadline do not affect the entitlement of the voting rights exercise at theMeeting. Therefore, holders of ordinary shares after such date are not entitled to take the

    floor or vote at the Meeting.Shareholders who own ordinary shares that have not been dematerialized must previouslydeliver them to an Intermediary, in time to be centralized in a dematerialization system.

    Vote by proxy: those who are entitled to take the floor at the Meeting can be representedby means of written proxy under current law provisions, and can use the form available atour registered offices (Via G. Camozzi 124, 24121 Bergamo ) and on the Companywebsite: www.italcementigroup.com. The proxy can be notified to the Company by meansof registered letter sent to the headquarters (Finance Department Shareholders Office,at the above mentioned address) or by sending it to the address of certified electronicmail: [email protected]. The representative can also deliver or send to theCompany, instead of the original, a copy of the proxy, also on an IT support, stating, under

    his/her own responsibility, that the proxy is a copy of the original, and the identity of thedelegating person.

    * * *

    Notice of Call

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    Questions on the items on the agenda: shareholders can also submit questions on theitems on the agenda before the Meeting. In order to facilitate the appropriate developmentand preparation of the Meeting, such questions must be received by the end of the fourthopen market day before the Meeting date on first call (i.e. by April 12th, 2012) by means ofa registered letter sent to the headquarters (Corporate Affairs Department at the abovementioned address) or by sending notice to the address of certified electronic mail:[email protected] with a certification issued by an Intermediarywho can prove the entitlement of the voting right. Questions submitted before the Meetingare answered during the Meeting at the latest. The Company can provide with a soleanswer to questions having the same content.

    Supplements to the agenda: according to the applicable law and the company bylaws,shareholders who, even jointly, own at least one fortieth of share capital represented byshares with voting rights, can request in writing, within 10 days from the publication of thisnotice of call, for supplements to the Meeting agenda, stating in their application whichfurther issues are being suggested. Requests must be sent by means of registered letterto the headquarters (Corporate Affairs Department to the above mentioned address) orby sending notice to the address of certified electronic [email protected], along with a certification issued by anIntermediary who can prove the legitimacy to supplement the items on the agenda. Areport on the items whose examination is proposed, must be delivered to the Board ofDirectors by the same deadline and following the same procedure.

    The supplement to the items on the agenda will be published, following the sameprocedure provided for the publication of this notice of call, at least 15 days before the

    Meeting date on first call; at the same time, the report drafted by shareholders who madethe request will be publicly available, along with any remarks of the Board of Directors.

    A supplement to the agenda is not accepted for items on which the Meeting, under theapplicable law, resolve upon proposal of the directors or based on Boards project orreport.

    * * *

    Supplements to the Board of Directors: It should be noted that, since this is a mereintegration of the Board of Directors, the Meeting shall resolve upon the proposalaccording to legal majorities and therefore without the application of the List Vote.

    In order to facilitate the appropriate development of the Meeting, shareholders who, aloneor together with other shareholders, that can prove they hold a percentage of the share

    capital with voting rights no lower than 2%, are invited to present their own candidates.Proposals may be filed by means of a registered letter sent to the headquarters (CorporateAffairs Department at the above mentioned address) or by sending notice to the addressof certified electronic mail: [email protected] least 5 days beforethe Meeting date on first call (i.e. by April 13th, 2012) along with the followingdocumentation:

    a) statements by which individual candidates accept their candidature and, under his/herown responsibility, state the non-existence of causes for ineligibility and the entitlementof the good reputation requirements established by the law;

    b) a brief resume on the personal and professional skills of each candidate with indicationof their position as director and statutory auditor in other companies;

    c) statements by which individual candidate declare entitlement of the independencequalification required by the law and by the Code of Conduct;

    d) information on the identity of shareholders who have presented candidates;

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    e) a statement of the shareholders who do not hold, even jointly, a controlling or majoritystake, bearing witness to the absence of any connection with the majority shareholder,as defined by the law in force.

    The intermediary certification proving ownership of the shareholding prescribed at the dateon which candidates are presented may also be produced after the filing provided that itreaches the company within 5 days before the meeting date on first call (i.e. by April 13th,2012).

    Candidates so presented will be timely made available to the market through publicationon the Company website www.italcementigroup.it.

    In any case, shareholders can present candidates directly at the venue of the Meeting.

    * * *Appointment of the Board of Statutory auditors: the appointment of the Board ofStatutory Auditors shall occur on the basis of lists.

    Lists may be presented only by shareholders who, alone or together with othershareholders, can prove they hold an overall percentage of the share capital with votingrights no lower than 2%.

    No shareholder may present or participate in the presentation of more than one list,neither through third parties or trust company.

    Shareholders belonging to the same group and shareholders who join a shareholdersagreement on the company shares may not present or vote for more than one list, neitherthrough third party or trust companies.

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

    Each list shall be made up of two sections: one for candidates for the office of ActingAuditor, the other for the candidates for the office of Substitute Auditor.

    The names of no more than three candidates for the office of Acting Auditor and no morethan three candidates for the office of Substitute Auditor must be listed in each section, bymeans of a progressive number.

    Each candidate may be presented on one list only under penalty of ineligibility.

    Lists must be filed with the company head office (Corporate Affairs Department to theabove mentioned address) or sent by means of certified electronic mail to:[email protected], at least 25 days before the meeting date on first

    call (i.e. by March 24th, 2012), along with the following documentation:a) statements by which individual candidate accept their candidature and, under his/her

    own responsibility, state the non-existence of causes for ineligibility or incompatibility aswell as the entitlement of further requirements established by the law, company bylawsand Code of Conduct;

    b) a brief resume on the personal and professional skills of each candidate with indicationof their position as director and statutory auditor in other companies;

    c) information on the identity of shareholders who have presented lists;

    d) a statement of the shareholders who do not hold, even jointly, a controlling or majoritystake, bearing witness to the absence of any connection with the majority shareholder,

    as defined by the law in force.

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    The intermediary certification proving ownership of the shareholding prescribed at the dateon which lists are presented may also be produced after the filing of the list provided that itreaches the company within 21 days before the meeting date on first call (i.e. by March28th, 2012).

    A list presented not in compliance with the above provisions will be considered as notpresented.

    In the event, by the deadline of 25 days before the date of the Meeting (i.e. by March 24th,2012), a single list has been filed, or only lists presented by shareholders who areconnected to each other under current regulations, further lists can be presented until thefollowing third day, and the threshold of 2% above mentioned will be halved.

    * * *

    The Meeting Documents, required by applicable laws and regulations, will be madepublicly available, according to legal deadlines, at the registered offices, at Borsa ItalianaS.p.A. and on the Company website www.italcementigroup.com.

    In particular:

    * 1st item on the agenda ordinary items: 21 free days before the Meeting on first call;

    * 2nd and 3rd item on the agenda ordinary items: 21 days before the Meeting on firstcall;

    * 4th and 6th item on the agenda ordinary items: 30 days before the Meeting on firstcall;

    * 5th

    item on the agenda ordinary items: 40 days before the Meeting on first call;* sole item on the agenda extraordinary items: 21 days before the Meeting on first call;

    Shareholders have the right to review all the documents filed with the registered offices,and to obtain a copy of them.

    * * *

    The regularity of the Meeting and the validity of its resolutions on the items on the agendaare governed by law.

    The company share capital is equal to 282,548,942, divided into 177,117,564 ordinaryshares and 105,431,378 savings shares with a face value of 1 each. When this notice ispublished, the number of ordinary shares representing share capital with voting rights,therefore net of 3,793,029 ordinary treasury shares held by the company, is equal to173,324,535.

    The Board of Directors

    ((Notice published on 8th March 2012 on Il Sole - 24 Ore, Milano Finanza and Eco di Bergamo and on the Companys website)

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    Consolidated Annual Report

    Annual Report

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    Directors report

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

    consolidated financial statements for 2011, and the comparatives for 2010, have been

    drawn up in compliance with the International Financial Reporting Standards (IFRS).

    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, 2011, but not endorsed by the European Union at that

    date. Furthermore, the European Union has endorsed additional standards/interpretations

    that Italcementi S.p.A. will apply at a subsequent time, having decided not to elect earlyapplication.

    The main changes with respect to the financial statements at December 31, 2010, are set

    out in detail in the notes, in the section Statement of compliance with the IFRS.

    With regard to the scope of consolidation, the Calcestruzzi group has been

    consolidated (on a line-by-line basis) as from January 1, 2011, while the Group operations

    in Turkey headed by Set Groupwere deemed available-for-sale (application of IFRS 5) as

    from the beginning of the year and subsequently sold at the end of March. In compliance

    with IFRS 5the gains or losses relating to discontinued operations have been presented

    as a separate item on the income statement both for the period under examination and for

    2010. A similar presentation has been adopted for cash flows. In December, Axim-branded

    cement and concrete additives operations in Italy, France, USA, Canada, Morocco andSpain were sold. Full details about the changes in the scope of consolidation are provided

    in the notes (note 3).

    Earnings indicators

    To assist comprehension of its financial data, the Group employs a number of widely used

    indicators, which are not contemplated by the 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

    face of the statement of financial position, 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 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

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

    the tables summarizing the Groups financial performance, in relation to comparative

    amounts and other amounts from the same period (e.g., change in revenue, recurring

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

    revenue). The use of amounts not directly apparent from the financial statements (e.g., the

    exchange-rate effect on revenue and on earnings) and the presentation of comments and

    assessments assist qualification of the trends in the amounts concerned.

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    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

    in comparison with previous periods. The non-financial indicators refer to external and

    internal elements: the general economic situation and the situation of the industry in which

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

    prices and key 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 debt provides information about the effects of changes in

    interest rates and the main exchange rates on the statement of financial position and the

    income statement.

    Results and significant events for the year

    Results

    Inevitably, the Groups results were affected by the continuing difficulties in the international

    economic scenario in 2011.

    Sales volumes, on a like-for-like basis, were down in aggregates and cement, but grew

    slightly in ready mixed concrete.

    Revenue, at 4,720.5 million euro (4,660.0 million euro in 2010), was up 1.3% (-1.3% on a

    like-for-like basis and at constant exchange rates), largely due to the change in the Groupscope of consolidation.

    Recurring EBITDA, at 697.3 million euro (841.7 million euro), was down 17.2%.

    After amortization and depreciation charges of 474.8 million euro (461.2 million euro) and

    impairment losses of 134.3 million euro (8.0 million euro), EBITwas 129.0 million euro

    (370.2 million euro), a reduction of 65.2%.

    Profit before tax,at 53.0 million euro (276.5 million euro), was down 80.8%.

    After income tax expense of68.8 million euro (60.6 million euro), the loss relating to

    continuing operationsamounted to 15.8 million euro (profit of 215.8 million euro in 2010).

    Thanks to the net gain of 106.9 million euro from the sale of Set Group, profit for the

    periodwas 91.2 million euro (197.1 million euro). The loss attributable to owners of the

    parentwas 3.1 million euro (profit of 45.8 million euro), while profit attributable to non-

    controlling interests decreased to 94.3 million euro, from 151.3 million euro in 2010.

    Net debtatDecember 31, 2011, amounted to 2,093.0 million euro, down by 137.9 million

    euro from December 31, 2010 (2,230.9 million euro).

    Total equity was 4,894.9 million euro, a decrease of 91.0 million euro from December 31,

    2010, while equity attributable to owners of the parent was 3,494.9 million euro, down

    by 30.2 million euro from December 31, 2010 (3,525.1 million euro).

    Significant events for the year

    Significant events in the first nine months of the year, previously illustrated inthe half-

    year financial report and the quarterly reports at the end of March and September, are

    described below.

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    Presentation 4

    General information 15

    Annual Report Consolidated Annual Report Directors report 28

    Extraordinary session Italcementi S.p.A . Annual Report Consolidated financial statements 63

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    The Calcestruzzigroup returned to the scope of consolidation of Italcementi S.p.A. asfrom January 1, 2011. With a ruling on April 20, 2011, the court of Caltanissetta ordered the

    full cancellation of the preventive seizure on Calcestruzzi S.p.A. and the restitution of

    company assetsto the owners. In May, the Calcestruzzi S.p.A. shareholders approved a

    share capital increase from59.2 million euro to 110 million euro, which was

    subscribed and simultaneously paid in full by Italcementi S.p.A. for 99.90% and by

    SICIL.FIN.S.r.l. (now Italcementi Ingegneria S.r.l.) for 0.10%.

    At the end of January, in view of the political unrest in Egypt, the Group suspended local

    production operations for about one week.

    In March Set Group Holdingwas sold to the Turkish group Limak HoldingandItalgen

    Elektrik Uretimwas sold to Enerjisa (a Sabanci-Verbund joint venture).

    As a result of the sale on the stock market of the sharesheld in Afyon Cimento Sanayii

    Turk A.S., Ciments Franais S.A. reduced its controlling interest from 76.51% to 51.0%. At

    the end of June, Mediobanca was engaged as financial advisor for sale of the entire

    remaining shareholding in the Turkish company.

    In August and September respectively, Moodys Investor Servicesand Standard and

    Poors confirmed theirBaa3 and BBB-/A-3 ratings assigned to Italcementi and Ciments

    Franais, but downgraded the outlook from stable to negative.

    In September, through the Indian company Zuari Cement, the Group acquired from ZuariIndustries a 74% stake in Gulbarga Cement, a company based in the region ofKarnataka, which is planning to build a new cement plant with an annual cement capacityof 3 million metric tons.

    Significant events in the fourth quarter are described below, some of which wereillustrated in the quarterly report at September 30, 2011.

    In October, Italcementi Finance S.A., the French company that acts as the Groups

    treasury vehicle, received Banque de France authorization to launch commercial paper

    under a programfor a maximum amount of 800 million euro. The program, with a short-

    term Moodys NP rating and Standard & Poors A3 rating, is unconditionally guaranteed by

    Italcementi S.p.A..

    With regard to action to raise efficiency and optimize facilities, the Group formulated a

    series of measures on costs designed to strengthen profit margins. These initiatives

    some of which were launched during the fourth quarter of the year will bring benefits in

    the order of 160 million euro when fully implemented.

    In December, in line with the rating review policy adopted for almost all the major cement

    players, Moodys Investor Services downgraded its long-term ratings forItalcementi and

    Ciments Franais, and its senior unsecured ratings for Italcementi Finance and Ciments

    Franaisto Ba1.

    Also in December all operations in the sector of Axim-branded ready mixed concrete and

    cement additives were sold to the Swiss group Sika. The operations in question were

    organized in six companies with industrial facilities and commercial divisions active in Italy,

    France, USA, Canada, Morocco and Spain, with revenue of approximately 61 million euro

    in 2010 and 150 employees. The agreement also provides for a strategic partnership in

    R&D, sales and marketing and the supply of additives for the Group.

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    The international economy and industry trendsWorld economic trends in 2011 varied greatly, not only from one region to another, but also

    from one quarter to the next. The first half remained lively, but was followed by a

    significantly slower second half, due to financial stability risks in some euro zone countries,

    the restrictive fiscal policies adopted in most of the euro zone, the more cautious monetary

    policies in a number of emerging countries, as well as the geo-political unrest especially in

    the Middle East. For the year as a whole, global economic growth, which in 2010 had

    returned to more than 5%, was, according to preliminary estimates, once again close to its

    long-term values (around 3.5%); the growth rate in the advanced economies (1.6%) was

    half that of the previous year.

    Raw material prices largely reflected the general cyclical weakening; nevertheless, oilprices displayed a notable resistance to decline, influenced in part by the important

    recovery of the dollar. Falls in exchange rates, weak stock markets and tighter capital flows

    were the main features of many emerging countries in the last part of the year. Despite

    widespread moderation in wages and salaries, in the advanced area inflation rose faster

    than expected, due to the previous increases in the basic input prices and the rises in

    indirect taxation imposed by fiscal austerity policies.

    In the advanced economies, the deterioration in the macroeconomic climate hit the

    construction sector in the final phase of the longest recession of the postwar period,

    contributing, in many countries, to a further postponement in the upturn. Nevertheless, the

    most evident feature was the divergence in the cyclical positions of the countries in which

    the Group operates, both emerging and mature. Among the mature countries, there was amoderate construction recovery in France and Belgium, while the southern euro zone

    countries reported a further significant fall in activity. The USA was in an intermediate

    position, with the recessionary pressures of the last six years probably fading, but signs of

    a recovery, even from the very low levels reached, still appearing to be very weak.

    In the emerging countries, the economic trends in the construction sector were generally

    favorable; in some cases, however, signs of a slowdown emerged as economic policies

    paid greater attention to avoiding excessive speculative bubbles in real estate. The Group

    results in the area were also critically affected by events relating to the complex political

    transition taking place in Egypt, whose influence was also felt in the construction sector.

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    Annual Report Consolidated Annual Report Directors report 28

    Extraordinary session Italcementi S.p.A . Annual Report Consolidated financial statements 63

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    Financial performance in 2011Key consolidated figures

    (in millions of euro)

    2011 2010

    (IFRS 5)

    % change

    vs. 2010

    Revenue 4,720.5 4,660.0 1.3

    Recurring EBITDA 697.3 841.7 (17.2)

    % of revenue 14.8 18.1

    Other operating income (expense) 40.7 (2.3) n.s.

    EBITDA 738.1 839.4 (12.1)

    % of revenue 15.6 18.0

    Amortization and depreciation (474.8) (461.2) 3.0

    Impairment losses on non-current assets (134.3) (8.0) n.s.

    EBIT 129.0 370.2 (65.2)

    % of revenue 2.7 7.9

    Finance costs (102.1) (89.8) 13.7

    Impairment losses 7.5 (21.0) n.s.

    Share of profit/(loss)

    of equity-accounted investees 18.6 17.1 9.3

    Profit before tax 53.0 276.5 (80.8)

    % of revenue 1.1 5.9

    Income tax expense (68.8) (60.6) 13.5

    Profit (loss) relating to continuing operations (15.8) 215.8 n.s.

    Profit (loss) relating to discontinued operations 106.9 (18.8) n.s.

    Profit (loss) for the period 91.2 197.1 (53.7)

    % of revenue 1.9 4.2

    attributable to:

    Owners of the parent (3.1) 45.8 n.s.

    Non-controlling interests 94.3 151.3 (37.7)

    Cash flow from operating activities 417.7 754.9 (44.7)

    Capital expenditure 402.4 542.2 (25.8)

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    Quarterly trend

    (in millions of euro)

    Full year

    2011

    Q4

    2011

    Q3

    2011

    Q2

    2011

    Q1

    2011

    Revenue 4,720.5 1,120.3 1,148.2 1,298.8 1,153.2

    % change vs. 2010 1.3 2.9 (1.9) (3.8) 9.7

    Recurring EBITDA 697.3 133.4 191.8 241.7 130.4

    % change vs. 2010 (17.2) (24.6) (14.7) (19.6) (6.4)

    % of revenue 14.8 11.9 16.7 18.6 11.3

    EBITDA 738.1 154.7 193.0 242.3 148.0

    % change vs. 2010 (12.1) (13.5) (14.7) (18.7) 8.8

    % of revenue 15.6 13.8 16.8 18.7 12.8

    EBIT 129.0 (107.3) 78.3 122.4 35.6

    % change vs. 2010 (65.2) n.s. (27.3) (31.3) 17.6

    % of revenue 2.7 (9.6) 6.8 9.4 3.1Profit (loss) relating to continuing

    operations (15.8) (121.1) 26.7 60.2 18.5

    Profit (loss) for the period 91.2 (121.6) 25.0 60.2 127.6

    % of revenue 1.9 (10.9) 2.2 4.6 11.1

    Profit (loss) attributable to

    owners of the parent (3.1) (126.4) 8.2 34.3 80.7

    Net debt 2,093.0 2,093.0 2,218.6 2,256.7 2,166.4

    (at period end)

    Fourth-quarter sales volumes and internal transfers

    The figures and changes presented below do not include Set Group operations (Turkey),

    which were sold at the end of the first quarter of 2011; the figures and changes for ready

    mixed concrete and aggregates reflect the re-inclusion of the Calcestruzzi group in the

    scope of consolidation.

    Q4

    2011

    Q4

    2011

    Q4

    2011

    Historiclike-for-like

    basis Historiclike-for-like

    basis Historiclike-for-like

    basis

    Central Western

    Europe 4.3 (4.6) (4.6) 8.3 11.0 0.4 2.6 89.3 2.1

    North America 1.1 7.4 7.4 0.4 66.7 66.7 0.2 17.1 17.1

    Emerging Europe,

    North Africa and

    Middle East 4.0 (3.0) (3.0) 0.3 2.8 2.8 0.6 4.8 1.9

    Asia 2.6 (5.0) (5.0) n.s. n.s. n.s. 0.1 (31.6) (31.6)

    Cement and clinker

    trading 0.7 (3.3) (3.3) - - - n.s. n.s. n.s.

    Eliminations (0.5) n.s. n.s. - - - - - -

    Total 12.2 (2.7) (2.7) 9.0 12.0 2.0 3.5 53.0 1.1

    n.s. not significant

    Amounts refer to companies consolidated an d proportionate ly consolidate d

    (*) excluding decreases for processi ng

    Central We stern Europe: Italy, France, Belgium, Spain, Greece - North Am erica: USA, Canada - Emerging Europe, North Africa and

    Middle East : Egypt, Morocco, Bulgaria, Turkey, Kuwait, Saudi A rabia - Asia: India, Thailan d, China, Kazakhstan

    % change vs.

    Q4 2010

    % change vs.

    Q4 2010

    % change vs.

    Q4 2010

    Cement and clinker(millions of metric tons)

    Aggregates*(millions of metric tons)

    Ready mixed concrete(millions of m)

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    Annual Report Consolidated Annual Report Directors report 28

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    In cement and clinker, performance in the mature countries slowed, despite the progressreported in France Belgium and North America. In Emerging Europe, North Africa and

    Middle East, the growth in Morocco and Bulgaria did not counterbalance the decline in

    Egypt. In Asia, the rise in sales volumes in India was not sufficient to cover the contraction

    on the other markets, which were also affected by the floods that hit Thailand. Trading

    operations also reported a downturn, primarily in intragroup trading.

    In aggregates, the growth achieved with respect to the fourth quarter of 2010 arose mainly

    from the strong performance in France Belgium, Italy and North America, set against

    sharp falls in Greece and Spain.

    The small improvement in ready mixed concrete, on a like-for-like basis, arose in part

    from the trends already described for aggregates, with increases in France Belgium, Italy

    and North America, and falls in Greece and Spain. The sector also reported strongprogress in Morocco and Kuwait, and a significant contraction in Egypt.

    Fourth-quarter results

    Fourth-quarterrevenue amounted to 1,120.3 million euro (+2.9%), with growth reported in

    Central Western Europe as a result of the upward trend in prices and the perimeter effect in

    Italy, and in North America, thanks to positive sales volumes. Conversely, a decline was

    reported on the emerging markets as a whole, penalized chiefly by Egypt and Thailand,

    despite the progress in Morocco and India. On a like-for-like basis and at constant

    exchange rates, revenue would have been 1.7% down from the fourth quarter of 2010.

    Recurring EBITDA, at 133.4 million euro, was down 24.6% from the year-earlier quarter.EBIT was negative at 107.3 million euro, compared with positive EBIT of 54.1 million euro

    in the year-earlier fourth quarter. The downturn arose mainly from significant impairment

    losses (134.4 million euro) on property, plant and equipment, intangible assets and

    goodwill, compared with 7.4 million euro in the year-earlier quarter.

    As a result of these impairment losses, a loss of 121.6 million euro was posted for the

    fourth quarter (profit of 63.6 million euro in the fourth quarter of 2010).

    Full-year sales volumes and internal transfers

    As noted in the remarks on the fourth quarter, the figures and changes in full-year volumes

    do not include Set Group operations, but reflect the re-inclusion of the Calcestruzzi group in

    the scope of consolidation.

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    Sales volumes by geographical area

    2011 2011 2011

    Historiclike-for-like

    basis Historiclike-for-like

    basis Historiclike-for-like

    basis

    Central Western

    Europe 18.8 (2.3) (2.3) 34.8 3.8 (5.8) 10.7 88.8 1.5

    North America 4.2 5.1 5.1 1.4 40.7 40.7 0.8 (1.4) (1.4)

    Emerging Europe,

    North Africa and

    Middle East 16.1 (5.4) (5.4) 1.7 (16.7) (16.9) 2.4 3.5 0.5

    Asia 11.1 0.3 0.3 0.2 3.3 3.3 0.7 (5.9) (5.9)Cement and clinker

    trading 2.7 (27.1) (27.1) - - - - n.s. n.s.

    Eliminations (1.8) n.s. n.s. - - - - - -

    Total 51.1 (1.9) (1.9) 38.1 3.7 (5.1) 14.5 53.2 0.8

    n.s. not significant

    Cement and clinker(millions of metric tons)

    Aggregates*(millions of metric tons)

    Ready mixed concrete(millions of m)

    (*) excluding decreases for process ing

    Amounts refer to companies consolidated an d proportionately cons olidate d

    % change vs.

    2010

    % change vs.

    2010

    % change vs.

    2010

    In cement and clinker, there was a mild slackening in the mature countries, arising from

    progress in France Belgium and North America, offset by downturns in Italy, Greece and

    Spain. The small improvement in Asia was driven by India, while Thailand was stable

    (penalized in the fourth quarter as mentioned above) and the other countries slowed. TheEmerging Europe, North Africa and Middle East area was influenced above all by the

    decline in Egypt, countered only in part by the healthy trend in Morocco. A reduction in

    sales volumes was reported for Trading, mainly on intragroup trading.

    The decline in aggregates, at constant size, stemmed from the general reduction in sales

    volumes in Central Western Europe (where only France Belgium reported growth) and in

    Morocco. The downturn was contained in part by the progress in North America.

    In ready mixed concrete, on a like-for-like basis, there was a small improvement. The

    healthy performance in France Belgium, Morocco and Kuwait more than made up for the

    decline in other markets.

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    Annual Report Consolidated Annual Report Directors report 28

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    Revenue and operating performanceContribution to consolidated revenue

    (in millions of euro)

    % % % % (*)

    Line of business

    Cement and clinker 3,056.3 64.7 3,315.0 71.1 (7.8) (2.7)

    Ready mixed concrete and aggregates 1,387.9 29.4 1,037.5 22.3 33.8 3.5

    Miscellaneous 276.4 5.9 307.4 6.6 (10.1) (2.2)

    Total 4,720.5 100.0 4,660.0 100.0 1.3 (1.3)

    Geographical area

    Central Western Europe 2,596.3 55.0 2,337.6 50.2 11.1 1.3North America 404.7 8.6 414.6 8.9 (2.4) 2.5

    Emerging Europe, North Africa and Middle

    East 1,009.5 21.4 1,237.7 26.6 (18.4) (13.2)

    Asia 497.9 10.5 445.3 9.5 11.8 16.2

    Cement and clinker trading 138.6 2.9 136.2 2.9 1.8 1.0

    Other 73.5 1.6 88.5 1.9 (16.9) (10.6)

    Total 4,720.5 100.0 4,660.0 100.0 1.3 (1.3)

    * a co ns a n e xc a nge ra e s a n scop e o co nso a o n

    2011 2010 Change

    2011/10

    Revenue and operating results by geographical area

    (in millions o f euro)

    2011 % chang e

    vs. 2010

    2011 % change

    vs. 2010

    2011 % change

    vs. 2010

    2 01 1 % cha nge

    vs. 2010

    Central Western Europe 2,680.8 11.4 307.1 (6.4) 340.3 3.4 (4.1) n.s.

    North America 405.1 (2.5) 16.3 (35.6) 23.0 5.8 (45.4) 5.8

    Emerging Europe, North

    Africa and Middle East 1,030.2 (17.2) 316.7 (24.6) 317.8 (23.8) 193.1 (34.2)

    Asia 499.4 11.2 81.8 19.9 82.8 22.3 38.1 90.5

    Cement and clinker trading 183.4 (20.0) 10.6 (25.6) 10.7 (25.5) 6.8 (40.0)

    Other 423.9 (0.2) (33.8) (>100.0) (35.0) (>100.0) (58.1) (>100.0)

    Eliminations (502.3) n.s. (1.4) n.s. (1.5) n.s. (1.4) n.s.

    Total 4,720.5 1.3 697.3 (17.2) 738.1 (12.1) 129.0 (65.2)

    n .s . n o s gn ca n

    Revenue Recurring EBITDA EBITDA EBIT

    The 1.3% increase in revenuefrom 2010 arose from the business slowdown (-1.3%) and

    negative exchange-rate effect (-2.2%), countered by a material consolidation effect

    (+4.8%).

    A factor in revenue performance was the fall in sales volumes, countered in part by a

    favorable sales prices trend in some countries, notably India, Italy, Thailand and Morocco.

    At constant exchange rates and scope of consolidation, the mature countries reported an

    improvement, thanks to France Belgium and North America.

    The negative exchange-rate effect arose chiefly from the depreciation of the Egyptian

    pound, US dollar and rupee against the euro.

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    The operating performance was supported by industrial efficiency and growing profitmargins in Italy, but adversely affected by events on the Egyptian market, the consolidation

    of the Calcestruzzi group and, at EBIT level, by heavy impairment losses. Compounding

    this complex situation were higher energy costs and the depreciation of some currencies

    against the euro, while a positive contribution came from CO2emission rights and the

    valorization of energy efficiency credits for a total of 87.6 million euro (55.2 million euro in

    2010).

    Recurring EBITDA was 697.3 million euro, down 17.2% from 2010. After net non-recurring

    income of 40.7 million euro (net expense of 2.3 million euro in 2010), EBITDA was 738.1

    million euro, a decrease of 12.1% from 2010. The non-recurring items were net gains from

    the sale of assets (66.3 million euro) and net expense for corporate restructurings (25.6

    million euro), mainly in Italy.After amortization and depreciation of 474.8 million euro (461.2 million euro) and

    impairment losses of 134.3 million euro (8 million euro), EBITwas 129.0 million euro, down

    65.2% from 2010. Impairment losses related to goodwill (82.6 million euro), property, plant

    and equipment (36.6 million euro) and intangible assets (15.1 million euro); details are

    provided in the notes. Impairment losses on goodwill referred to non-recent acquisitions in

    Spain, Greece and Italy, the countries most affected by the market crisis.

    Among the individual countries, the most significant progress in recurring EBITDA was

    reported in Morocco, India, Thailand, while by far the largest reduction was in Egypt.

    Finance costs and other itemsIn 2011 net interest expense on net debt decreased to 85.4 million euro (90.4 million euro

    in 2010) as described in notes (note 30).

    Overall, finance costs net of finance income rose from 89.8 million euro to 102.1 million

    euro (+13.7%).

    The trend was also due to net exchange rate losses of 10.6 million euro (gains of 8.4

    million euro in 2010), with a negative increase of 19.0 million euro from 2010, and to net

    derivatives for hedges on CO2emission rights and Certified Emission Reductions (CERs),

    with a negative effect of 6.5 million euro.

    The share of profit/(loss) of equity-accounted investees, 18.6 million euro, was up from

    2010 (17.1 million euro).Reversal ofimpairment losses on financial assetsamounted to 7.5 million euro (losses

    of 21.0 million euro in 2010). This arose as a result of the reversal, in the 2011 income

    statement after the consolidation of the Calcestruzzi group as from January 1, 2011, of the

    impairment loss on the Calcestruzzi group posted in the fair value reserve on December

    31, 2010.

    Profit for the period

    Profit before tax was 53.0 million euro, down by 80.8% from 2010 (276.5 million euro).

    Income tax expense, at 68.8 million euro, was up 13.5% from 2010 (60.6 million euro),

    largely as a result of the income contribution of countries with higher tax rates, non-deductible expense and the change in the tax rate in Egypt, which was increased to 25% at

    the end of June 2011 from the previous rate of 20%.

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    Theloss relating to continuing operations came to15.8 million euro (a profit of 215.8million euro in 2010).

    The net gain of 106.9 million euro from the sale of Set Group generated a profit for the

    period of 91.2 million euro (197.1 million euro), with a loss attributable to the owners of

    the parent of 3.1 million euro (profit of 45.8 million euro) and a profit attributable to non-

    controlling interests of 94.3 million euro (151.3 million euro).

    Total comprehensive income

    Starting from the profit for the period, the comprehensive income for 2011 showed a

    negative balance of 57.9 million euro (a positive balance of 223.9 million euro in 2010)

    arising mainly from: translation losses of 26.2 million euro, fair value losses on available-for-sale financial assets for 49.3 million euro, fair value gains on derivatives for 20.1 million

    euro. Considering the profit for the period of 91.2 million euro described in the previous

    section and the components described above, 2011 total comprehensive income was

    positive at 33.2 million euro (a negative amount of 47.2 million euro attributable to owners

    of the parent and a positive amount of 80.4 million euro attributable to non-controlling

    interests), compared with a positive total of 420.9 million euro in 2010 (200.9 million euro

    attributable to owners of the parent and 220.0 million euro attributable to non-controlling

    interests).

    The statement of comprehensive income provides a comparison with 2010.

    Capital expenditure

    Capital expenditure by geographical area (*)

    (in millions of euro)

    2011 2010 2011 2010 2011 2010 2011 2010

    Central Western Europe 2.9 4.0 171.5 207.7 20.8 16.6 195.2 228.3

    North America - 0.5 18.4 42.3 0.1 0.5 18.5 43.3

    Emerging Europe, North Africa

    and Middle East - 4.8 83.4 164.4 0.4 0.4 83.8 169.6

    Asia - 5.3 60.6 83.6 - - 60.6 88.9

    Cement and clinker trading - - 3.8 2.5 0.1 0.2 3.9 2.7Others and eliminations - 0.2 (0.1) 2.2 4.0 4.4 3.9 6.8

    Total 2.9 14.8 337.6 502.7 25.4 22.1 365.9 539.6

    Change in payables for non-

    current assets - 9.8 36.4 (7.2) - - 36.4 2.6

    Total capital expenditure 2.9 24.6 374.0 495.5 25.4 22.1 402.4 542.2

    (*) amoun ts refer to the area for which the investment is intended

    Financial assetsPPE+investment

    propertyIntangible assets

    Total capital

    expenditure

    2011 capital expenditure amounted to 402.4 million euro, a decrease of 139.8 million euro

    from 2010 (542.2 million euro).

    Investments in property, plant and equipment and investment property totaled 374.0 million

    euro, down by 121.5 million euro from 2010 (495.5 million euro) due to the completion ofstrategic investments that had an impact in 2010; investments were largely in Italy, France-

    Belgium, India, Egypt and Morocco.

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    Investments in intangible assets amounted to 25.4 million euro, an increase of 3.3 millioneuro from 2010 (22.1 million euro), and were chiefly for software development.

    Investments in financial assets were marginal, at 2.9 million euro (24.6 million euro in

    2010).

    Statement of financial position, cash flows and net debt

    Condensed statement of financial position

    (in millions of euro) 12.31.2011 12.31.2010

    Property, plant and equipment and investment property 4,470.8 4,628.2

    Goodwill and intangible assets 2,017.4 2,150.4

    Equity investments and other assets 670.4 651.6

    Non-current assets 7,158.5 7,430.3

    Current assets 2,572.3 2,590.8

    Total assets 9,730.8 10,021.1

    Equity attributable to owners of the parent 3,494.9 3,525.1

    Equity attributable to non-controlling interests 1,400.0 1,460.8

    Total equity 4,894.9 4,985.9

    Non-current liabilities 2,802.9 3,266.2

    Current liabilities 2,033.1 1,769.0

    Total liabilities 4,835.9 5,035.2

    Total equity and liabilities 9,730.8 10,021.1

    Condensed statement of cash flows

    (in millions of euro) 2011 2010

    Net debt at beginning of period (2,230.9) (2,419.9)

    Cash flow from operating activities:

    Cash flow before change in working capital 438.5 621.1

    Change in working capital (20.8) 133.8

    Total cash flow from operating activities 417.7 754.9

    Capital expenditure:

    PPE, investment property and intangible assets (399.5) (517.6)

    Financial assets (2.9) (24.6)

    Total capital expenditure (402.4) (542.2)

    Proceeds from the sale of non-current assets 184.2 143.2

    Dividends paid (142.6) (130.0)

    Calcestruzzi group net debt at January 1, 2011 (217.7) -

    Cash flow from discontinued operations (Set Group Holding) 279.2 (6.1)

    Other 19.5 (30.7)

    Change in net debt 137.9 189.0

    Net debt at end of period (2,093.0) (2,230.9)

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    Net debt breakdown(in millions of euro) 12.31.2011 12.31.2010

    Current financial assets (659.7) (835.6)

    Current financial liabili ties 756.7 535.4

    Non-current financial assets (117.1) (65.0)

    Non-current financial liabili ties 2,113.1 2,596.1

    Net debt 2,093.0 2,230.9

    Net debt at December 31, 2011, amounted to 2,093.0 million euro, a reduction of 137.9

    million euro from the end of 2010, despite the negative effect of 217.7 million euro arising

    from the consolidation of the Calcestruzzi group as from January 1, 2011. Given lower cash

    flow from operating activities, the improvement stemmed largely from the sale of assets no

    longer of strategic importance (mainly Turkey, Axim).

    Financial ratios

    (absolute amounts in millions of euro)

    Net debt 2,093.0 2,230.9

    Consolidated equity 4,894.9 4,985.9

    Net debt 2,093.0 2,230.9

    Recurring EBITDA 697.3 836.3

    Recurring EBITDA 697.3 836.3

    Net finance costs* 126.1 115.5

    * finance costs net of capital gains/losses on sale of equity investments

    3.0 2.7

    "Leverage"

    2010

    44.7"Gearing"%

    5.5

    2011

    42.8

    7.2"Coverage"

    12.31.2010

    12.31.2011

    Equity

    Total equity at December 31, 2011, was 4,894.9 million euro, down by 91.0 million euro

    from December 31, 2010 (4,985.9 million euro).

    The main increases were:

    - profit for the period, 91.2 million euro;

    - gains of 62.8 million euro from the sale of Afyon shares,

    the decreases were:

    - dividends paid, 142.8 million euro;

    - the net change of 32.9 million euro in the hedging reserve and the fair value reserve;

    - the acquisition of Ciments Franais treasury shares for 35.9 million euro;

    - the reduction of 25.0 million euro in the translation reserves.

    At December 31, 2011, there were no changes in treasury shares in portfolio with respect

    to December 31, 2010. Italcementi S.p.A. held 3,793,029 ordinary treasury shares (2.14%

    of ordinary share capital) servicing stock option plans and 105,500 savings treasury shares(0.1% of savings share capital).

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    Reconciliation between parents profit for the year and equity andloss for the year and equity attributable to owners of the parent

    (in millions of euro) 2011

    Profit (loss) for the period of the parent (Italcementi S.p.A.) 7.0

    Consolidation adjustments:

    - Profit (loss) for the period of consolidated companies (in accordance with Group accounting

    policies) 562.0

    - Elimination of intragroup dividends collected during the year (507.2)

    - Reversal of impairment losses (revaluations) in consolidated equity investments 89.2

    - Elimination of intercompany (gains) losses and other changes (59.9)

    - Consolidated profit (loss) for the period 91.2- Attributable to non-controlling interests 94.3

    - Attributable to owners of the parent (3.1)

    December 31,

    2011

    Equity of the parent company (Italcementi S.p.A.) 1,784.6

    Consolidation adjustments:

    - Elimination of carrying amount of consolidated equity investments

    Carrying amount of consolidated equity investments (8,464.4)

    Equity o f consolidated companies (in accordance with Group accounting policies) 11,574.6

    - Consolidated equity 4,894.9

    - Equity attributable to non-controlling interests 1,400.0- Equity attributable to owners of the parent 3,494.9

    Risks and uncertainties

    In May 2010, Italcementi S.p.A. formed a Risk Management Department, reporting to the

    Italcementi S.p.A. Chief Executive Officer, to improve its ability to create value for

    stakeholders by optimizing enterprise risk management (ERM). The mission of the function

    is to guarantee a structured approach to risk management, integrated with the Group

    growth strategy, and to support the improvement of Group performance by identifying,

    measuring, managing and controlling key risks.

    The creation of the Risk Management Department is part of the Risk & Complianceprogram set up in 2008, based on the methodology developed by the Committee of

    Sponsoring Organizations of the Tradeway Commission (COSO), and consisting of the

    following phases.

    1. Identification of the main areas of risk for Group strategic goals and development of

    methods and tools to analyze and assess the correlated risk events.

    2. Assessment, at country level and at aggreg