SAES GETTERS. Key Figures E

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1 Italian Research Change in View Milan, September 27, 2005 Price ord. (Eu): Price target 12 m (Eu): Previous Target (Eu): BCI Index: Reuters code: Bloomberg code: 1,667 SAEI.MI SG IM Company Data Price sav. (Eu): No. of shares ord. (mn): 15 No. of shares sav. (mn): 8 Mkt Cap. total (Eu mn): 362 Market Float ord (Eu mn): 111 Market Float ord (%): 42.2% 2004 BVPS (Eu): P/BV: 2.4 ROE (Curr. Year): 9.7% ROCE (Curr. Year): 25.8% 3Y CAGR EPS ( 04/ 07): 9.2% PEG Ratio: 2.3 Change in EPS estimates: % 12.1% 16.9% Stock Performances: 1 m 3 m 12 m Abs: 2.0% 0.9% 16.4% Rel: -1.7% -7.1% -9.8% 12M High/Low (Eu): 19.28/14.73 SAES GETTERS - 12 Months Sep-04 Nov-04 Jan-04 Mar-04 May-05 Jun-05 Sep-05 SAES GETTERS Sector : Subsector : Key Figures E BUY Capital Goods Technology Year to Sales Operating Net Profit EPS P/E P/CEPS Div EV/ EV/ 31/12 Profit stated restated Yield Ebitda Ebit (Eu mn) (Eu mn) (Eu mn) (Eu) (%) 2003A nm nm 2004A E E E Note : Eu/$ at 1.,22 From CRT to LCD: Saes Remains Leader Saes Getters is the world leader in the market for mercury dispensers for LCD screens (over 90% market share). In our opinion, the company will benefit greatly in the coming years from investments made by the major global manufacturers in the flat screens segment. The benefit will be twofold as Saes will profit from both the sharp increase in the sale of flat screens and the increase in screen sizes (standard for LCD TVs will go from 26 to 42 ). Estimates revised upwards: the above leads us to revise our net profit estimates upwards for , while we are leaving 2005 estimates more or less unchanged. We expect Saes to move from net profit of Eu16mn in 2005 to around Eu20mn in % pay-out? We believe that the current financial structure (around Eu80mn in cash estimated at the end of 2005) could not only justify a 100% pay-out in the next three years, but also means we aren t ruling out an extraordinary dividend and/or a further share buy back. BUY, target Eu22.5 (for ordinary shares) and Eu 16.9 (for savings shares). We are revising our recommendation from Neutral (target Eu17.2) to BUY as we believe that the market has not yet included the growth that we are expecting from the company in the next few years. Indeed, we believe that the development of the LCD market can more than offset the decline in the cathode tubes market. Among other things, the current financial structure (we don t think that Saes will make any acquisitions in the short term) could justify an increase in the pay-out and we see no reason why it shouldn t continue the trend of strong dividend increases which began last year. What s more, we believe that the stock at 18x 2006 P/E is not demanding given the improving newsflow. Giuseppe Puglisi puglisi@intermonte.it SAES GETTERS SAES GETTERS rel. to BCI Source: Thomson Financial The reproduction of the information, recommendations and research produced by Intermonte SIM contained herein, and of any of its parts, is strictly prohibited. None of the contents of this document may be shared with third parties without Company authorization. Intermonte SIM S.p.A Corso Vittorio Emanuele II, Milano phone: fax:

2 SAES GETTERS - Key Figures PROFIT&LOSS (Eu mn) 2003A 2004A 2005E 2006E 2007E Total sales EBITDA EBITA EBIT Associates Financial income (charges), others Extraordinary (1) (1) Pre-tax profit (Loss) (5) Taxes (1) (13) (12) (15) (16) Minorities Net profit (5) Net profit restated PER SHARE DATA (Eu) 2003A 2004A 2005E 2006E 2007E Total shares out (mn) EPS stated (0.23) EPS restated CEPS restated BVPS Dividend per share (ord) Dividend pay out ratio (%) -65.0% 146.8% 98% 98% 98% BALANCE SHEET (Eu mn) 2003A 2004A 2005E 2006E 2007E Total fixed assets Net working capital Long term liabilities (13) (13) (17) (17) (17) Net capital employed Net financial position Group equity Net equity CASH FLOW (Eu mn) 2003A 2004A 2005E 2006E 2007E Gross cash flow Change in NWC 4 (1) (0) (1) (1) Capital expenditure (15) (10) (10) (11) (12) Acquisitions & divestments Other cash items (4) (1) (25) (16) (19) Net cash flow (4) 24 (7) 5 4 RATIOS (%) 2003A 2004A 2005E 2006E 2007E EBITDA margin 14.1% 32.0% 28.7% 31.5% 31.7% EBIT margin 2.1% 20.5% 19.7% 22.7% 23.2% Tax rate -17.3% 44.4% 42.0% 42.0% 41.0% ROCE 3.2% 29.3% 25.8% 30.8% 32.1% ROE -3.3% 9.9% 9.7% 11.9% 13.3% Debt/equity -37.7% -48.6% -44.7% -47.3% -49.3% Capex as % of sales 12.0% 7.1% 8.0% 8.0% 8.0% NWC as % of sales 29.7% 27.5% 30.0% 28.3% 27.4% GROWTH RATES (%) 2003A 2004A 2005E 2006E 2007E Sales -10.6% 12.2% -8.1% 9.0% 7.0% EBITDA -28.8% 154.4% -17.6% 19.6% 7.7% EBIT -73.2% 981.0% -11.8% 25.6% 9.4% Net profit nm nm 1.8% 22.9% 12.0% EPS restated -61.8% 487.9% -3.5% 21.2% 11.3% 2

3 3 Saes Getters is the Leader in a Rapidly Growing Industry As well as being the world leader in the production of getters for cathode tubes, with a market share of around 85%, it has diversified production in recent years, becoming the world leader (with a market share of over 90%) in the production of mercury dispensers for the backlighting of LCDs. As can be seen from the figure below, mercury dispensers are used in the cathod lamps for back lighting of LCD screens. TFT-LCD Structure MERCURY DISPENSER BY SAES GETTERS The LCD market has developed significantly in recent years, and consistent investment, both completed and projected, (US$28bn in the next 5 years) has made the possibility of having an LCD TV larger than 26 into a reality. The Future of TFT-LCDs LCD market has rapidly evolved over a short period of time, enabling great new LCD TVs LCD are already mainstream solution for PCs, and may become so for 42" and below TVs Large LCDs now a competitive solution for the full HDTV market, enabling larger and more diverse TV market LCDs are digital displays enabling new products, such us rear-seat automotive entertainment and video phones

4 LCD screens are used in a number of applications, which do not all involve home entertainment. LCD Example Applications HOME THEATER 17'' NOTEBOOK TABLET PC VIDEO PHONE NOTEBOOK PC DUAL 15.0'' MONITOR Increasing demand as the digital home becomes commonplace with one wire broadband access, telecom, HDTV, etc. AVIONICS MEDICAL FLAT TV The market for large flat screens is more or less divided between three players (LG- Philips, Samsung and AUO) which make up around 60% of the market. LCD Market Share Others 41.4% LG. Philips LCD 23.4% (1st) Q1'05 Total "Large" TFT-LCD Module (by Revenues)* Samsung 21.8% Total : US$7.5B *Note: "Large" = 10.0" and above AUO 13.4% 4

5 5 In recent years the market has grown considerably, and in mn units were shipped (with a CAGR of 44.6%), of which around 90% were for the PC market (notebooks and flat screens for PCs). TFT-LCD Unit Shipment Trends (millions) TFT-LCD Unit Shipments Have Shown Strong Growth m CAGR = 44.6% 8.2 LCD TV NBPC m 74.0 MONITOR All the same we are expecting the LCD market to reach around 200mn units in Saes Getters - LCD Market Units 2002A 2003A 2004A 2005E 2006E 2007E 2008E Total LCD units % growth 45% 67% 23% 18% 36% 22% 10% Source: Intermonte SIM estimates & LG Philips data

6 Benefits of Increasing Screen-Size The most important issue to consider is that the bigger the screen the greater the number of mercury dispensers used. Therefore, in our view, the growth of mercury dispenser sales will be more than proportionate to the growth of flat screen sales. As the following shows, the emerging standard relates to 26 and 42 screens and the main players have already adopted these standards. 26W, 32W, 37W & 42W Emerging as Industry Standards The majority of TFT-LCD TV panel makers have adopted 26W, 32W, 37W and 42W as their standard wide TV family 26W 32W 37W 40W 42W LPL SEC AUO CMO Sharp Over the next few years the average size of LCD screens will increase from the current 19 to roughly 30. Large TFT-LCD Average Size (10" and above) TODAY LCD TV LCD Monitor NBPC 10 PAST FUTURE 6

7 7 Financials Saes Getters s turnover is split between three different business units. The information display business unit which, according to our estimates, will account for roughly 65% of Saes Getters sales in 2006, will enjoy a sharp increase in mercury dispenser sales, which will more than offset the decrease in getters for cathode tubes. Saes Getters - Turnover Breakdown (Eu mn) 2003A 2004A 2005E 2006E 2007E Cathod ray tubes % growth -21.0% -3.5% -20.0% -9.0% -3.0% Flat Panel % growth n.a. 54.0% 28.0% 25.0% 18.0% Information displays % growth n.a. 16.5% 2.0% 10.6% 10.7% Source: Intermonte SIM estimates We expect that the company s turnover could amount to Eu142mn in 2006 (from an estimated Eu 130mn in 2005) mainly thanks to mercury dispensers, with a potential increase in the operating margin from an estimated 19.7% in 2005 to roughly 22.5% in We think it would be realistic to assume that the company could generate a net profit of Eu 20mn in Therefore, we are revising our 2006 estimates up by roughly 12% while leaving those for 2005 unchanged. Saes Getters - Profit & Loss (Eu mn) 2003A 2004A 2005E 2006E 2007E Total Sales % growth -10.6% 12.2% -8.1% 9.0% 7.0% COGS (72.9) (69.9) (61.6) (65.3) (69.6) % on sales 57.8% 49.4% 47.3% 46.0% 45.8% Gross Profit margin on sales 42.2% 50.6% 52.7% 54.0% 54.2% Operating Income margin on sales 2.1% 20.5% 19.7% 22.7% 23.2% Net Profit (5.4) margin -4.3% 11.4% 12.6% 14.2% 14.9% Source: Intermonte SIM estimates As for cashflow, we think that Saes could generate operating cashflow of Eu 20mn per annum in the coming years. Therefore, considering the current financial structure (the company has roughly Eu 80mn in cash) after having paid a dividend of Eu 1 in 2005, we think that a payout ratio of 100% would be feasible in the next 3 years, leaving the financial structure almost unchanged and offering shareholders a yield of 5%. We cannot not rule out the possibility that the company may decide to reduce the current amount of cash by increasing its buy back plan or paying an extraordinary dividend in 2005.

8 Valuation & Investments Case We have revised our recommendation upwards from Neutral to BUY with target price at Eu 22.5 for ordinary shares (from previous Eu 17.2) and Eu 16.9 for savings shares (previously Eu 13.3), because we think: 1) the company may benefit considerably (in terms of turnover growth and margins) from the sharp increase in larger flat screen sales forecast for the coming years; 2) the World Cup takes place in 2006, and TV sales are usually higher in World Cup years; 3) Saes could offer a payout ratio of 100% over the next 3 years and we cannot rule out the possibility of an extraordinary dividend should the company decide to increase leverage; 4) current valuations (18x 2006 P/E) do not include the growth that we are forecasting for the company in the coming years. 8

9 The reproduction of the information, recommendations and research produced by Intermonte SIM contained herein and of any its parts is strictly prohibited. None of the contents of this document may be shared with third parties without company authorization This report is directed exclusively at market professional and institutional investor customers and is not for distribution to private customers, who should not rely on this material. Moreover, any investment or service to which this report may relate will not be made available to such private customers The information and data in this report has been obtained from sources which we believe to be reliable, though the accuracy of which is not guaranteed. Its main scope is to offer up-to-date and accurate information; it should not, therefore, be intended as a solicitation or offer to buy or sell securities In order to disclose its possible conflicts of interest Intermonte SIM states that: - the Parent Company, Banca Monte dei Paschi di Siena, owns, directly or indirectly, a significant stake in the following Companies: Aeroporto di Firenze, Alerion Industries S.p.A., Banca Popolare di Spoleto, BNL, Cir Energia (Gruppo CIR), Dada, EL.EN, Ferrovie Nord Milano, Fiat, Snia, Unipol; - a few members of the Board of Directors of the following Companies have positions within Banca Monte dei Paschi di Siena Group: Aeroporto di Firenze, Alerion Industries S.p.A., Banca Popolare di Spoleto, BNL, Caltagirone S.p.A., Caltagirone Editore, Cementir, Dada, EL.EN, Engineering, Sias, Sorin, Unipol, Vianini Industria, Vianini Lavori; - within the last year Banca Monte dei Paschi di Siena and/or other Banks of its Group acted or are acting (see companies indicated in bold type) as Retail Manager or co-manager of an offering of the following Companies securities: AEM, Enel, Fiat, Geox S.p.A., IGD, Isagro, Italease, Marr S.p.A., Panaria Group, Procomac, Terna, Trevisan, Toro Assicurazioni; - Intermonte SIM is Specialist, in accordance with the Italian Securities Markets regulations, with the related obligation of coverage and distribution of research, of the following Companies: Datalogic, Erg, Esprinet, La Doria, Saes Getters, Socotherm, TAS; - Banks of the Banca Monte dei Paschi di Siena Group, issue financial instruments related to the shares of the following Companies and/or are market makers and/or are arrangers and/or are distributors; Autostrade, Banca Fideuram, Banca Intesa, Bipop-Carire, Edison, Enel, Eni, Erg, Fiat, Generali Assicurazioni, Impregilo, Mediaset, Mediolanum, Pirelli & C., Ras, SanPaolo-IMI, Seat Pagine Gialle, Telecom Italia, Tim, Tiscali, Unicredito Italiano; - the Monte Paschi di Siena banking group provides a significant amount of financing to the following Companies: Alitalia, Camfin, Datalogic, Hera, Pirelli & C., Pirelli & C. Real Estate, Seat Pagine Gialle, Telecom Italia, Tim.