The Board of Directors of Pininfarina S.p.A. met on Friday under the chairmanship of Sergio Pininfarina and approved the report on operations of the Group in the first nine months of 2005.

At September 30, 2005, production value amounted to 272.5 million euros, or 35.5% less than in the in the first nine months of last year. Despite this decrease, all profitability indicators confirmed the positive trend of the first half of the year, improving both in absolute terms and as a percentage of production value compared with the first nine months of 2004. The balance of the net financial position, while positive by 42.1 million euros, was lower than the 71.6 million euros reported at December 31, 2004 (74.8 million euros at September 30, 2004).

A review of the data by business segment shows that the manufacturing operations generated production value totaling 145.3 million euros (53.4% less than in 2004), accounting for 53.3% of total consolidated production value (73.8% last year). The process of gearing up for new orders is the reason for this decrease. With regard to these orders, production of two important models - the Alfa Romeo Brera, which will be manufactured at Group facilities in Italy, and the Volvo C70, which will be made by Pininfarina Sverige at a factory in Sweden staffed with more than 700 employees — got under way in the past few weeks. Three additional new models will join these two on the production line in the first half of 2006: the Alfa Romeo Spider, the Mitsubishi Colt C.C. and the Ford Focus C.C. The Group will then be producing a full model lineup and will be able to rehire all of the employees who are currently enrolled in the Special Government Layoff Benefits Fund so to reach a number of 3,000 employees spread all over the 6 countries in which Pininfarina is present.
 

The Group’s service businesses, which include the design, industrial design and engineering operations, generated production value totaling 127.2 million euros, for an increase of 14.9% compared with the data at September 30, 2004. These businesses accounted for 46.7% of total Group production value in the first nine months, up from 26.2% a year ago. These operations are continuing to expand their customer base and recently signed another contract in the all-important Chinese market.

The outlook for the rest of the year continues to call for consolidated production value to be about 30% lower than at December 31, 2004, as the contribution that the Alfa Brera and Volvo C70 are beginning to provide will help reduce the decrease reported at September 30, 2005. Year-end EBIT should be close to breakeven and the net financial position should show a somewhat lower balance than at September 30, 2005.