Outlook of the Management for the Current Year

Pirelli Group

For the full year 2008, taking also into account statements made on the occasion of publication of financial statements as of 30 June, the Company confirms its expectations of consolidated EBIT before restructuring charges lower overall than in 2007. The size of the decline will be greater than what had been estimated at the end of the first half, in consideration of the further deterioration of markets of reference in the third quarter '08 also expected for the last part of the year.

Pirelli Real Estate

Given the financial crisis, causing a sharp market slowdown, the Company is unable to confirm its full-year EBIT target for 2008. The Company nonetheless expects its consolidated net result, after extraordinary income and expenses, to reach break even.

The Company is working to adjust to the current market scenario and is committed to achieve an even more solid financial structure, by guaranteeing  economic and financial balance, with a clear focus on enhancing recurring income stream and cash generation.