SOURCE: EUROTECH S.p.A

March 30, 2007 06:02 ET

EUROTECH: The Board of Directors of Eurotech has approved the Statutory and Consolidated financial statements at 31 December 2006.

AMARO, ITALY -- (MARKET WIRE) -- March 30, 2007 --


- GROUP REVENUES: +70.0%: FROM EUR 29.85 MILLION IN 2005 TO EUR 50.76 MILLION IN 2006

- EBITDA : FROM EUR 3.29 MILLION TO EUR 3.03 MILLION

- EBIT: FROM EUR 2.3 MILLION TO EUR 1.07 MILLION

- RESULT BEFORE INCOME TAXES: FROM EUR 2 MILLION TO EUR 3.32 MILLION WITH GROWTH OF 65.6%

- NET FINANCIAL POSITION: FROM EUR 20.35 MILLION AT 31.12.2005 A EUR 99.91 MILLION IN 2006

- GROUP NET PROFIT: FROM EUR 1.06 MILLION TO EUR 1.47 MILLION

In addition to approving the Financial Statements, the Board of Directors of Eurotech also resolved to submit to the shareholders meeting, in the ordinary session, the proposal to authorize trading of treasury shares, extending the audit assignment to the independent auditors for the financial years 2008-2013, and incorporation of the consideration owed to the independent auditors for the account audit done for the financial years 2006 and 2007.

Adaptation of corporate governance.

Amaro (UD), 30 March 2007.

Yesterday, the Board of Directors of Eurotech S.p.A. - under the chairmanship of Roberto Siagri - met in Amaro to reviewed and approved the draft Financial Statements at 31 December 2006, which will also be submitted to the Annual General Meeting of shareholders to be held on 30 April 2007, on first call, and if necessary on 7 May 2007, on second call. Growth continues for the Eurotech Group, active in the research, development, production and marketing of miniaturized computers (nanoPCs) and High Performance Computers (HPCs), listed on the MTA/MTAX (electronic equities) market of the Milan Bourse in the STAR segment since 30 November 2005.

+-------------+----------+----------+--------+----------+----------+-++
|CONSOLIDATED |          |          |        |  PRICE   |          | ||
+-------------+----------+----------+--------+----------+----------+-++
|HIGHLIGHTS   |31/12/2005|31/12/2006|CHANGE %|ALLOCATION|31/12/2006| ||
+-------------+----------+----------+--------+----------+----------+-++
|(EUR  '000)  |          |OPERATIONS|        |       (*)|          | ||
+-------------+----------+----------+--------+----------+----------+-++
|SALES        |    29,851|    50,759|   70.0%|         -|    50,759| ||
+-------------+----------+----------+--------+----------+----------+-++
|EBITDA       |     3,298|     3,026|   -8.2%|     (653)|     2,373| ||
+-------------+----------+----------+--------+----------+----------+-++
|EBIT         |     2,300|     1,070|  -53.5%|   (1,406)|     (336)| ||
+-------------+----------+----------+--------+----------+----------+-++
|FINANCIAL    |          |          |        |          |          | ||
+-------------+----------+----------+--------+----------+----------+-++
|MANAGEMENT   |     (297)|     2,247|     nmf|         -|     2,247| ||
+-------------+----------+----------+--------+----------+----------+-++
|PROFIT (LOSS)|          |          |        |          |          | ||
+-------------+----------+----------+--------+----------+----------+-++
|BEFORE TAX   |     2,003|     3,317|   65.6%|   (1,406)|     1,911| ||
+-------------+----------+----------+--------+----------+----------+-++
|CONSOLIDATED |          |          |        |          |          | ||
+-------------+----------+----------+--------+----------+----------+-++
|NET RESULTS  |     1,064|     1,467|   37.9%|     (895)|       572| ||
+-------------+----------+----------+--------+----------+----------+-++
+-------------+----------+----------+--------+----------+----------+-++
(*) Price allocation: as set forth by IFRS 3, after acquisition, a company must record the fair value of identifiable assets (including intangible assets not previously recognized) and liabilities (including potential liabilities and excluding future restructuring). Following the purchase of the Arcom Group (executed in April 2006 and with effect from the Q2 2006), the resulting effects on the income statement arising from accounting this purchase have generated effects on costs of raw materials, amortization and depreciation and income taxes.

GROUP RESULTS

Group revenues grew by 70.0%, i.e. EUR 20.91 million, rising from EUR 29.85 million in 2005 to EUR 50.76 million in 2006. This growth was achieved both organically and by virtue of the acquisition of the Arcom Group completed at the beginning of April 2006. If the business combination had taken place at the beginning of the year, ordinary operating revenues would have amounted to EUR 56.45 thousand.

During the year in question, management pursued the plan for growth in size and internationalization on several fronts through acquisition of Arcom Control Systems Ltd. and Arcom Control Systems Inc. which took place in April 2006, and Applied Data Systems Inc., which took place in December and was executed the following month.

Management expects to continue to develop the plan to increase the size of the Group in 2007.

EBITDA amounted to EUR 3.03 million net of EUR 653 thousand due to price allocation for the business combination - recorded in the accounts pursuant to the provisions of IFRS 3 - involving purchase of the Arcom Group stake. The figure was influenced by management's desire to strengthen the industrial and managerial structure in order to cope with the future growth in size of the Group. EBIT, net of price allocation, posted a decrease between EUR 1.07 million and EUR 2.3 million in 2005. This incremental margin is closely related to the progress of EBITDA and is influenced by higher amortization and write downs charged in 2006. Financial management posted a positive change in absolute values of EUR 2.54 million between 2005 and 2006, despite the negative net impact of EUR 409 thousand, already shown in the infra-annual reports, due to acquisition of USD 24 million which took place in mid February and connected with contract obligations (option letters) undertaken 3 February 2006 for acquisition of the Arcom Group. Contributing to this positive change, in addition to the interest accruing on liquid assets pursuant to the increase in capital in July 2006, were the EUR 1.31 million in net proceeds from taking part in the PTO of the English Radstone Technology Plc. which the Group attempted to acquire in September 2006. The pre-tax result increased by 65.6% equal to EUR 1.32 million, increasing from EUR 2.0 million in 2005 to EUR 3.32 million in 2006, net of the "price allocation" . In terms of net results, the Group increased from EUR 1,064 thousand in 2005 to EUR 1,467 in 2006, net of the price allocation, with an increase of 37.9%. Besides reflecting the trend in pre-tax performance, this result was mainly due to the tax burden of the Group's various companies and to minority interest.

At 31 December 2006, the Group reported a positive net financial position of EUR 99.91 million, to be used mainly for external growth.

In addition, the shareholders' meeting was called to resolve on the proposal to authorize trading of treasury shares. In particular, the Board of Directors resolved to submit to the shareholders' meeting, in the ordinary session, the proposal to authorize trading of treasury shares, for a period of 18 months after the date of the ordinary shareholders' meeting, in accordance with the combined provisions of Articles 2357 and 2357-ter of the Civil Code and Article 132 of Leg. Decree 58/1998 and related implementation provisions. Transactions in treasury shares, subject of the authorization proposal to submit to the ordinary shareholders' meeting, can be made, on a case by case basis, contingent on the following purposes (i) to buy and/or sell treasury shares for investment and/or pegging the share and its liquidity on the securities market, in the terms of and with the methods established by applicable provisions, including in relation to the work of the broker hired by the Company to carry out the role of "Specialist" in the Star segment of the MTAX, in accordance with the market regulations of Borsa Italiana S.p.A., or (ii) use treasury shares as part of the transactions related to current operations or projects in line with the strategic lines that the Company intends to follow, in relation to which there is the opportunity for share trading. Authorization is required for the purchase of ordinary shares without par value, in one or more tranches, up to a maximum amount for which, considering ordinary Eurotech shares held in the portfolio of the Company and its subsidiaries, the number of treasury shares is not more than 10% of the share capital pursuant to Art. 2357, section 3, of the Civil Code. The Board also proposes that, except for the matters envisaged for the work of the Specialist, the acquisition price cannot be higher than the arithmetic mean of the reference prices of ordinary Eurotech shares in the 30 days prior to each transaction, plus 20% and not less than the aforementioned mean, minus 20%. As regards the work of the Specialist, the Board proposes to authorize trading treasury shares in compliance with the provisions of Borsa Italiana S.p.A. based on the average daily value of trading Eurotech shares in the previous six months, applying the spread (defined as the maximum price differential of the proposals, calculated as a ratio between the difference in the sale price and the purchase price and their subtotal) determined by Borsa Italiana in accordance with the Instructions. Currently, Eurotech holds 6,900 treasury shares in its portfolio, which represent 0.02% of the share capital.

The shareholders' meeting is also called to resolve on increasing the fee paid to the independent auditors, Reconta Ernst & Young S.p.A., for the accounting audit done for the financial years 2006 and 2007 pursuant to changes taking place in the structure of the Eurotech Group, resulting from the acquisitions of Arcom Control Systems Ltd., Arcom Control Systems Inc. and Applied Data Arcom Systems Inc, executed in 2006 and 2007.

Finally, the shareholders' meeting is called to resolve on extending the audit assignment to Reconta Ernst & Young for the financial years 2008- 2013, in compliance with legislative changes taking place.

During the meeting, the Board of Directors approved a series of amendments to the corporate governance documents of the Company, in order to consider - among other things - adaptation of the Self-Governance Code of March 2006. Specifically, the Board of Directors increased to three the number of members of the Remuneration Committee (now comprised of Directors Michele Vitali, Alberto Felice De Toni and Giovanni Spangaro) and the Internal Control Committee (now comprised of Directors Caterina Belletti, Alberto Felice De Toni and Giovanni Spangaro), (ii) approved an updated version of the Internal Dealing Procedure, and (iii) approved the annual report on corporate governance.

RESTATED CONSOLIDATED INCOME STATEMENT

+-------------------------+----------+------+----------+------+-++
|OPERATING RESULTS        |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|(Thousands of Euro)      |31/12/2005|     %|31/12/2006|     %| ||
+-------------------------+----------+------+----------+------+-++
|Revenues from sales of   |    29,851|100.0%|    50,759|100.0%| ||
|products and services    |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Cost of materials        |  (14,559)|-48.8%|  (25,296)|-49.8%| ||
+-------------------------+----------+------+----------+------+-++
|Gross profit             |    15,292| 51.2%|    25,463| 50.2%| ||
+-------------------------+----------+------+----------+------+-++
|Service costs            |   (5,639)|-18.9%|  (11,601)|-22.9%| ||
+-------------------------+----------+------+----------+------+-++
|Lease & hire costs       |     (492)| -1.6%|   (1,007)| -2.0%| ||
+-------------------------+----------+------+----------+------+-++
|Payroll costs            |   (7,211)|-24.2%|  (12,889)|-25.4%| ||
+-------------------------+----------+------+----------+------+-++
|Other provisions and     |     (204)| -0.7%|     (296)| -0.6%| ||
|other costs              |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Other revenues           |     1,552|  5.2%|     2,703|  5.3%| ||
+-------------------------+----------+------+----------+------+-++
|Profit before            |     3,298| 11.0%|     2,373|  4.7%| ||
|depreciation and         |          |      |          |      | ||
|amortization             |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Profit before            |          |      |          |      | ||
|depreciation and         |          |      |          |      | ||
|amortization             |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|(EBITDA)                 |     3,298| 11.0%|     2,373|  4.7%| ||
+-------------------------+----------+------+----------+------+-++
|Depreciation &           |     (987)| -3.3%|   (2,528)| -5.0%| ||
|amortisation             |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Asset impairment         |      (11)|  0.0%|     (181)| -0.4%| ||
+-------------------------+----------+------+----------+------+-++
|Operating profit         |     2,300|  7.7%|     (336)| -0.7%| ||
+-------------------------+----------+------+----------+------+-++
|Share of associates'     |         3|  0.0%|      (51)| -0.1%| ||
|profit af equity         |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|PTO launch charges       |         0|  0.0%|   (2,003)| -3.9%| ||
+-------------------------+----------+------+----------+------+-++
|Income from PTO          |         0|  0.0%|     3,312|  6.5%| ||
+-------------------------+----------+------+----------+------+-++
|Finance expense          |     (595)| -2.0%|   (2,033)| -4.0%| ||
+-------------------------+----------+------+----------+------+-++
|Finance income           |       295|  1.0%|     3,022|  6.0%| ||
+-------------------------+----------+------+----------+------+-++
|Profit before taxes      |     2,003|  6.7%|     1,911|  3.8%| ||
+-------------------------+----------+------+----------+------+-++
|Income tax               |     (981)| -3.3%|   (1,445)| -2.8%| ||
+-------------------------+----------+------+----------+------+-++
|Net profit (loss) before |     1,022|  3.4%|       466|  0.9%| ||
|minority inerest         |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Minority interest        |      (42)| -0.1%|     (106)| -0.2%| ||
+-------------------------+----------+------+----------+------+-++
|Group net profit (loss)  |     1,064|  3.6%|       572|  1.1%| ||
|for period               |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Base earnings per share  |     0.095|      |     0.022|      | ||
+-------------------------+----------+------+----------+------+-++
|Diluted earnings per     |     0.101|      |     0.021|      | ||
|share                    |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
CONSOLIDATED INCOME STATEMENT - RECONCILIATION OF OPERATING AND REPORTED DATA
+------------------------+----+---------+------+---------+------+----------
|                        |    |12 months|      |12 months|      |Effect of|
+------------------------+----+---------+------+---------+------+---------|
|                        |    |     2005|     %|     2006|     %|purchase |
                         |    |         |      |         |      |price    |
+------------------------+----+---------+------+---------+------+---------+
|                        |    |         |      |         |      |allocation
+------------------------+----+---------+------+---------+------+---------+
|OPERATING DATA (EUR'000)|    |         |      |         |      |         |
|                        |    |         |      |         |      |         |
+------------------------+----+---------+------+---------+------+---------+
|SALES REVENUES          |    |   29,851|100.0%|   50,759|100.0%|
|
+------------------------+----+---------+------+---------+------+---------+
|COST OF MATERIALS       |    | (14,559)|-48.8%| (25,296)|-49.8%|      653|
+------------------------+----+---------+------+---------+------+---------+
|GROSS PROFIT            |    |   15,292| 51.2%|   25,463| 50.2%|653      |
+------------------------+----+---------+------+---------+------+---------+
|OTHER OPERATING COSTS   | (*)| (13,546)|-45.4%| (25,793)|-50.8%|
|
+------------------------+----+---------+------+---------+------+---------+
|OTHER OPERATING         |    |         |      |         |      |
|
+------------------------+----+---------+------+---------+------+---------+
|REVENUES                |(**)|    1,552|  5.2%|    2,703|  5.3%|
|
+------------------------+----+---------+------+---------+------+---------+
|EBITDA                  |    |    3,298| 11.0%|    2,373|  4.7%|      653|
+------------------------+----+---------+------+---------+------+---------+
|DEPRECIATION &          |    |         |      |         |      |         |
+------------------------+----+---------+------+---------+------+---------+
|AMORTIZATION            |    |    (998)| -3.3%|  (2,709)| -5.3%|      753|
+------------------------+----+---------+------+---------+------+---------+
|EBIT                    |    |    2,300|  7.7%|    (336)| -0.7%|    1,406|
+------------------------+----+---------+------+---------+------+---------+
|(EXPENSES) REVENUES FROM|    |         |      |         |      |         |
+------------------------+----+---------+------+---------+------+---------+
|RADSTONE TRANSACTION    |    |         |      |    1,309|  2.6%|         |
+------------------------+----+---------+------+---------+------+---------+
|FINANCE INCOME (EXPENSE)|    |    (297)| -1.0%|      938|  1.8%|         |
+------------------------+----+---------+------+---------+------+---------+
|PROFIT (LOSS) BEFORE TAX|    |    2,003|  6.7%|    1,911|  3.8%|    1,406|
+------------------------+----+---------+------+---------+------+---------+
|INCOME TAX              |    |    (981)| -3.3%|  (1,445)| -2.8%|    (511)|
+------------------------+----+---------+------+---------+------+---------+
|NET PROFIT (LOSS) BEFORE|    |         |      |         |      |         |
+------------------------+----+---------+------+---------+------+---------+
|MINORITIES              |    |    1,022|  3.4%|      466|  0.9%|      895|
+------------------------+----+---------+------+---------+------+---------+
|GROUP NET PROFIT (LOSS) |    |         |      |         |      |         |
+------------------------+----+---------+------+---------+------+---------+
|FOR PERIOD              |    |    1,064|  3.6%|      572|  1.1%|      895|
+------------------------+----+---------+------+---------+------+---------+
+------------------------+----+---------+------+---------+------+--- -----+

+------------------------+------------+------+
|                        |12 months of|      |
+------------------------+------------+------+
|                        | 2006 net of|     %|
+------------------------+------------+------+
|                        |       price|      |
+------------------------+------------+------+
|OPERATING DATA (EUR'000)|  allocation|      |
+------------------------+------------+------+
|SALES REVENUES          |      50,759|100.0%|
+------------------------+------------+------+
|COST OF MATERIALS       |    (24,643)|-48.5%|
+------------------------+------------+------+
|GROSS PROFIT            |      26,116| 51.5%|
+------------------------+------------+------+
|OTHER OPERATING COSTS   |    (25,793)|-50.8%|
+------------------------+------------+------+
|OTHER OPERATING         |            |      |
+------------------------+------------+------+
|REVENUES                |       2,703|  5.3%|
+------------------------+------------+------+
|EBITDA                  |       3,026|  6.0%|
                                
|DEPRECIATION &          |            |      |
|                        |            |      |
|AMORTIZATION            |     (1,956)| -3.9%|
+------------------------+------------+------+
|EBIT                    |       1,070|  2.1%|
+------------------------+------------+------+
|(EXPENSES) REVENUES FROM|            |      |
+------------------------+------------+------+
|RADSTONE TRANSACTION    |       1,309|  2.6%|
+------------------------+------------+------+
|FINANCE INCOME (EXPENSE)|         938|  1.8%|
+------------------------+------------+------+
|PROFIT (LOSS) BEFORE TAX|       3,317|  6.5%|
+------------------------+------------+------+
|INCOME TAX              |     (1,956)| -3.9%|
+------------------------+------------+------+
|NET PROFIT (LOSS) BEFORE|            |      |
+------------------------+------------+------+
|MINORITIES              |       1,361|  2.7%|
+------------------------+------------+------+
|GROUP NET PROFIT (LOSS) |            |      |
+------------------------+------------+------+
|FOR PERIOD              |       1,467|  2.9%|
+------------------------+------------+------+
+------------------------+------------+------+
(*) The item "other operating costs" includes operating costs, provisions to the risk fund and provisions to the allowance for doubtful accounts.

(**) The item "other operating revenues" includes the contributions received from public bodies, capitalized costs for internal increases and other minor proceeds:

CONSOLIDATED BALANCE SHEET

+-------------------------+----------+----------+-------+-----+
|(Thousands of Euro)      |31/12/2005|31/12/2006|Changes|(b-a)|
+-------------------------+----------+----------+-------+-----+
|ASSETS                   |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Intangible assets        |     6,235|    26,715| 20,480|     |
+-------------------------+----------+----------+-------+-----+
|Property, Plant and      |     2,550|     4,121|       |1,571|
|equipment                |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Investments in associate |        82|       757|       |  675|
|and other companies      |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Deferred tax assets      |     1,008|     3,715|       |2,707|
+-------------------------+----------+----------+-------+-----+
|Other non-current assets |        22|       139|       |  117|
+-------------------------+----------+----------+-------+-----+
|Total non-current assets |     9,897|    35,447| 25,550|     |
+-------------------------+----------+----------+-------+-----+
|Inventories              |     6,004|    12,307|       |6,303|
+-------------------------+----------+----------+-------+-----+
|Contracts in progress    |     2,044|       810|(1,234)|     |
+-------------------------+----------+----------+-------+-----+
|Trade receivables        |     7,267|    10,351|       |3,084|
+-------------------------+----------+----------+-------+-----+
|Other current assets     |     2,090|     4,260|       |2,170|
+-------------------------+----------+----------+-------+-----+
|Cash & cash equivalents  |    25,584|   119,614| 94,030|     |
+-------------------------+----------+----------+-------+-----+
|Totale current assets    |    42,989|   147,342|104,353|     |
+-------------------------+----------+----------+-------+-----+
|Total assets             |    52,886|   182,789|129,903|     |
+-------------------------+----------+----------+-------+-----+
|LIABILITIES AND EQUITY   |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Share capital            |     4,656|     8,751|       |4,095|
+-------------------------+----------+----------+-------+-----+
|Reserves                 |    26,734|   131,436|104,702|     |
+-------------------------+----------+----------+-------+-----+
|Net profit (loss) for    |     1,064|       572|       |(492)|
|period                   |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Group shareholders'      |    32,454|   140,759|108,305|     |
|equity                   |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Minority capital and     |       593|        39|       |(554)|
|reserves                 |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Minority profit (loss)   |      (42)|         8|       |   50|
|for period               |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Equity attributable to   |       551|        47|       |(504)|
|minority interest        |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Total shareholders'      |    33,005|   140,806|107,801|     |
|equity                   |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Medium-/long-term        |     2,597|    15,910| 13,313|     |
|borrowing                |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Employee benefit         |       481|       569|       |   88|
|obligations              |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Deferred tax liabilities |       324|     3,594|       |3,270|
+-------------------------+----------+----------+-------+-----+
|Other non-current        |        75|       374|       |  299|
|liabilities              |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Total non-current        |     3,477|    20,447| 16,970|     |
|liabilities              |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Trade payables           |     9,572|    12,234|       |2,662|
+-------------------------+----------+----------+-------+-----+
|Short-term borrowing     |     2,639|     3,790|       |1,151|
+-------------------------+----------+----------+-------+-----+
|Valore equo strumenti    |        28|        15|       | (13)|
|derivati                 |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
|Tax liabilities          |       392|     2,885|       |2,493|
+-------------------------+----------+----------+-------+-----+
|Other current liabilities|     3,773|     2,612|(1,161)|     |
+-------------------------+----------+----------+-------+-----+
|Total current liabilities|    16,404|    21,536|       |5,132|
+-------------------------+----------+----------+-------+-----+
|Total liabilities        |    19,881|    41,983| 22,102|     |
+-------------------------+----------+----------+-------+-----+
|Total liabilities and    |    52,886|   182,789|129,903|     |
|equity                   |          |          |       |     |
+-------------------------+----------+----------+-------+-----+
NET FINANCIAL POSITION
+-------------------------+----------+----------+
|(EUR '000)               |31/12/2005|31/12/2006|
+-------------------------+----------+----------+
|Cash & cash equivalents  |    25,584|   119,614|
+-------------------------+----------+----------+
|Short-term borrowing     |   (2,639)|   (3,790)|
+-------------------------+----------+----------+
|Short-term net financial |    22,945|   115,824|
|position                 |          |          |
+-------------------------+----------+----------+
|Medium-/long-term        |   (2,597)|  (15,910)|
|borrowing                |          |          |
+-------------------------+----------+----------+
|Medium-/long-term net    |   (2,597)|  (15,910)|
|financial position       |          |          |
+-------------------------+----------+----------+
|NET FINANCIAL POSITION   |    20,348|    99,914|
+-------------------------+----------+----------+
NET WORKING CAPITAL
+-------------------------+----------+----------+-------+
|         (EUR '000)      |31/12/2005|31/12/2006|Changes|
+-------------------------+----------+----------+-------+
|                         |       (a)|       (b)|  (b-a)|
+-------------------------+----------+----------+-------+
|Inventories              |     6,004|    12,307|  6,303|
+-------------------------+----------+----------+-------+
|Contracts in progress    |     2,044|       810|(1,234)|
+-------------------------+----------+----------+-------+
|Trade receivables        |     7,267|    10,351|  3,084|
+-------------------------+----------+----------+-------+
|Other current assets     |     2,090|     4,260|  2,170|
+-------------------------+----------+----------+-------+
|Current assets           |    17,405|    27,728| 10,323|
+-------------------------+----------+----------+-------+
|Trade payables           |   (9,572)|  (12,234)|(2,662)|
+-------------------------+----------+----------+-------+
|Tax liabilities          |     (392)|   (2,885)|(2,493)|
+-------------------------+----------+----------+-------+
|Other current liabilities|   (3,801)|   (2,627)|  1,174|
+-------------------------+----------+----------+-------+
|Current liabilities      |  (13,765)|  (17,746)|(3,981)|
+-------------------------+----------+----------+-------+
|Net working capital      |     3,640|     9,982|  6,342|
+-------------------------+----------+----------+-------+
+-------------------------+----------+----------+-------+
OPERATING RESULTS Eurotech S.p.A
+-------------------------+----------+------+----------+------+-++
|OPERATING RESULTS        |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|(Thousands of Euro)      |31/12/2005|     %|31/12/2006|     %| ||
+-------------------------+----------+------+----------+------+-++
|Revenues from sales of   |    16,940|100.0%|    16,323|100.0%| ||
|products and services    |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Other revenues           |        65|  0.4%|       215|  1.3%| ||
+-------------------------+----------+------+----------+------+-++
|Cost of materials        |  (10,171)|-60.0%|   (9,372)|-57.4%| ||
+-------------------------+----------+------+----------+------+-++
|Service costs            |   (3,096)|-18.3%|   (5,911)|-36.2%| ||
+-------------------------+----------+------+----------+------+-++
|Lease & hire costs       |     (245)| -1.4%|     (195)| -1.2%| ||
+-------------------------+----------+------+----------+------+-++
|Payroll costs            |   (2,495)|-14.7%|   (3,376)|-20.7%| ||
+-------------------------+----------+------+----------+------+-++
|Other provisions and     |     (100)| -0.6%|     (104)| -0.6%| ||
|other costs              |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Costs adjustments for    |          |      |          |      | ||
|in-house generation of   |          |      |          |      | ||
|non-                     |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|current assets           |       864|  5.1%|     1,204|  7.4%| ||
+-------------------------+----------+------+----------+------+-++
|Depreciation &           |     (495)| -2.9%|   (1,008)| -6.2%| ||
|amortisation             |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Asset impairment         |         0|  0.0%|         0|  0.0%| ||
+-------------------------+----------+------+----------+------+-++
|Write-down of investments|         0|      |     (430)| -2.6%| ||
+-------------------------+----------+------+----------+------+-++
|Operating profit         |     1,267|  7.5%|   (2,654)|-16.3%| ||
+-------------------------+----------+------+----------+------+-++
|Finance expense          |     (498)| -2.9%|   (2,669)|-16.4%| ||
+-------------------------+----------+------+----------+------+-++
|Finance income           |       305|  1.8%|     2,561| 15.7%| ||
+-------------------------+----------+------+----------+------+-++
|Profit before taxes      |     1,074|  6.3%|   (2,762)|-16.9%| ||
+-------------------------+----------+------+----------+------+-++
|Income tax               |     (643)| -3.8%|       305|  1.9%| ||
+-------------------------+----------+------+----------+------+-++
|Net profit (loss) before |       431|  2.5%|   (2,457)|-15.1%| ||
|minority inerest         |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Minority interest        |         0|  0.0%|         0|  0.0%| ||
+-------------------------+----------+------+----------+------+-++
|Group net profit (loss)  |       431|  2.5%|   (2,457)|-15.1%| ||
|for period               |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
|Base earnings per share  |     0.095|      |   (0.070)|      | ||
+-------------------------+----------+------+----------+------+-++
|Diluted earnings per     |     0.101|      |   (0.070)|      | ||
|share                    |          |      |          |      | ||
+-------------------------+----------+------+----------+------+-++
INCOME STATEMENT - EUROTECH SPA
+-------------------------+----------+----------+-------------+
|(Thousands of Euro)      |31/12/2005|31/12/2006|Changes (b-a)|
+-------------------------+----------+----------+-------------+
|ASSETS                   |          |          |             |
+-------------------------+----------+----------+-------------+
|Intangible assets        |     2,023|     2,742|          719|
+-------------------------+----------+----------+-------------+
|Property, Plant and      |     1,261|     2,795|        1,534|
|equipment                |          |          |             |
+-------------------------+----------+----------+-------------+
|Investments in           |     5,467|    44,846|       39,379|
|subsidiaries             |          |          |             |
+-------------------------+----------+----------+-------------+
|Investments in associate |        79|       551|          472|
|and other companies      |          |          |             |
+-------------------------+----------+----------+-------------+
|Deferred tax assets      |       834|     3,122|        2,288|
+-------------------------+----------+----------+-------------+
|Finanziamenti a società  |       242|    24,894|       24,652|
|controllate a medio/lungo|          |          |             |
|termine                  |          |          |             |
+-------------------------+----------+----------+-------------+
|Other non-current assets |        17|        31|           14|
+-------------------------+----------+----------+-------------+
|Total non-current assets |     9,923|    78,981|       69,058|
+-------------------------+----------+----------+-------------+
|Inventories              |     3,704|     5,560|        1,856|
+-------------------------+----------+----------+-------------+
|Contracts in progress    |     2,045|       810|      (1,235)|
+-------------------------+----------+----------+-------------+
|Trade receivables        |     4,162|     2,896|      (1,266)|
+-------------------------+----------+----------+-------------+
|Trade receivables -      |       661|     3,183|        2,522|
|subsidiaries and         |          |          |             |
|associate companies      |          |          |             |
+-------------------------+----------+----------+-------------+
|Other current assets     |       964|     3,615|        2,651|
+-------------------------+----------+----------+-------------+
|Finanziamenti a società  |     1,268|       860|        (408)|
|controllate a breve      |          |          |             |
|termine                  |          |          |             |
+-------------------------+----------+----------+-------------+
|Cash & cash equivalents  |    25,231|    71,902|       46,671|
+-------------------------+----------+----------+-------------+
|Totale current assets    |    38,035|    88,826|       50,791|
+-------------------------+----------+----------+-------------+
|Total assets             |    47,958|   167,807|      119,849|
+-------------------------+----------+----------+-------------+
|LIABILITIES AND EQUITY   |          |          |             |
+-------------------------+----------+----------+-------------+
|Share capital            |     4,656|     8,751|        4,095|
+-------------------------+----------+----------+-------------+
|Reserves                 |    26,446|   131,636|      105,190|
+-------------------------+----------+----------+-------------+
|Net profit (loss) for    |       496|   (2,457)|      (2,953)|
|period                   |          |          |             |
+-------------------------+----------+----------+-------------+
|Shareholders' equity     |    31,598|   137,930|      106,332|
+-------------------------+----------+----------+-------------+
|Medium-/long-term        |     2,406|    15,416|       13,010|
|borrowing                |          |          |             |
+-------------------------+----------+----------+-------------+
|Employee benefit         |       245|       305|           60|
|obligations              |          |          |             |
+-------------------------+----------+----------+-------------+
|Other non-current        |        52|       129|           77|
|liabilities              |          |          |             |
+-------------------------+----------+----------+-------------+
|Total non-current        |     2,703|    15,850|       13,147|
|liabilities              |          |          |             |
+-------------------------+----------+----------+-------------+
|Trade payables           |     8,392|     7,836|        (556)|
+-------------------------+----------+----------+-------------+
|Trade payables -         |       138|       223|           85|
|subsidiaries and         |          |          |             |
|associate companies      |          |          |             |
+-------------------------+----------+----------+-------------+
|Short-term borrowing     |     1,950|     3,402|        1,452|
+-------------------------+----------+----------+-------------+
|Valore equo strumenti    |        28|        15|         (13)|
|derivati                 |          |          |             |
+-------------------------+----------+----------+-------------+
|Tax liabilities          |       290|     1,187|          897|
+-------------------------+----------+----------+-------------+
|Other current liabilities|     2,859|     1,364|      (1,495)|
+-------------------------+----------+----------+-------------+
|Total current liabilities|    13,657|    14,027|          370|
+-------------------------+----------+----------+-------------+
|Total liabilities        |    16,360|    29,877|       13,517|
+-------------------------+----------+----------+-------------+
|Total liabilities and    |    47,958|   167,807|      119,849|
|equity                   |          |          |             |
+-------------------------+----------+----------+-------------+
NET FINANCIAL POSITION - EUROTECH S.p.A
+-------------------------+----------+----------+
|(EUR '000)               |31/12/2005|31/12/2006|
+-------------------------+----------+----------+
|Cash & cash equivalents  |    25,231|    71,902|
+-------------------------+----------+----------+
|Finanziamenti a società  |     1,268|       860|
|controllate a breve      |          |          |
|termine                  |          |          |
+-------------------------+----------+----------+
|Short-term borrowing     |   (1,950)|   (3,402)|
+-------------------------+----------+----------+
|Short-term net financial |    24,549|    69,360|
|position                 |          |          |
+-------------------------+----------+----------+
|Finanziamenti a società  |       242|    24,894|
|controllate a medio/lungo|          |          |
|termine                  |          |          |
+-------------------------+----------+----------+
|Medium-/long-term        |   (2,406)|  (15,416)|
|borrowing                |          |          |
+-------------------------+----------+----------+
|Medium-/long-term net    |   (2,164)|     9,478|
|financial position       |          |          |
+-------------------------+----------+----------+
|NET FINANCIAL POSITION   |    22,385|    78,838|
+-------------------------+----------+----------+
NET WORKING CAPITAL - EUROTECH S.p.A
+-------------------------+----------+----------+-------+
|(EUR '000)               |31/12/2005|31/12/2006|Changes|
+-------------------------+----------+----------+-------+
|                         |       (a)|       (b)|  (b-a)|
+-------------------------+----------+----------+-------+
|Inventories              |     3,704|     5,560|  1,856|
+-------------------------+----------+----------+-------+
|Contracts in progress    |     2,045|       810|(1,235)|
+-------------------------+----------+----------+-------+
|Trade receivables        |     4,162|     2,896|(1,266)|
+-------------------------+----------+----------+-------+
|Trade receivables -      |       661|     3,183|  2,522|
|subsidiaries and         |          |          |       |
|associate comp           |          |          |       |
+-------------------------+----------+----------+-------+
|Other current assets     |       964|     3,615|  2,651|
+-------------------------+----------+----------+-------+
|Current assets           |    11,536|    16,064|  4,528|
+-------------------------+----------+----------+-------+
|Trade payables           |   (8,392)|   (7,836)|    556|
+-------------------------+----------+----------+-------+
|Trade payables -         |     (138)|     (223)|   (85)|
|subsidiaries and         |          |          |       |
|associate compa          |          |          |       |
+-------------------------+----------+----------+-------+
|Tax liabilities          |     (290)|   (1,187)|  (897)|
+-------------------------+----------+----------+-------+
|Other current liabilities|   (2,887)|   (1,379)|  1,508|
+-------------------------+----------+----------+-------+
|Current liabilities      |  (11,707)|  (10,625)|  1,082|
+-------------------------+----------+----------+-------+
|Net working capital      |     (171)|     5,439|  5,610|
+-------------------------+----------+----------+-------+
THE EUROTECH GROUP

Eurotech (ETH.MI) is a company active in the research, development, production and marketing of miniaturised computers (NanoPCs) and of computers featuring high-performance computing capability (HPCs).

Eurotech SpA www.eurotech.com

Company contacts:

Investor relations

Massimo Mauri

Tel. 0433-485411

e-mail:m.mauri@eurotech.com

Communication Department

Barbara Razzini

Tel. 0433-485411

e-mail: b.razzini@eurotech.it

Press Office:

Community- Communication consulting

Marco Rubino

Tel. 02-89404231

e-mail: marco.rubino@communitygroup.it

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