Outlook of the Management for the Current Year

Regarding the 2008 outlook we confirm business operating results in line with year 2007, notwithstanding continuous pressure on the tyre business due to volatility of raw material costs.
Our focus on the industrial businesses, with the repurchase of the minority stake in Pirelli tyre, as well as a solid financial structure, allow us to foresee, at best, growth in markets such as Russia and India.

We confirm for the Real Estate business results in line with 2007 (excluding the DGAG deconsolidation impact), in spite of the uncertainties in the real estate market.

As far as the smaller businesses are concerned we see possible consolidation taking place in the photonics market, with Pirelli possibly taking part in a combination of different technologies.
At the same time, we are following with great interest the evolution taking place in environmental sectors, such as the photovoltaic sector and  particulate filters - rules in the European Countries are changing quickly - in order to be ready to exploit our capabilities in the best way on the market.