EUROTECH S.p.A: RESULTATS DU PREMIER TRIMESTRE EN HAUSSE DE 119 % A 15,16 MILLIONS D'EUROS

(*) Price Allocation effects relating to the acquisition in April 2006 of the Arcom Group and Applied Data Systems Inc..

GROUP RESULTS

The Groups result in exam for the first quarter turned out to be improved in comparison to what had been presented to the financial community on April 2, 2007

Group revenues grew by 119%, i.e. €8.24 million, rising from €6.92 million in Q1 2006 to €15.16 million in Q1 2007.

Management also pursued a dimensional growth plan during the quarter under examination and internationalisation through the acquisition of Applied Data Systems Inc., which was completed on 8 January 2007.

The figures for the quarter show that gross profit grew by € 4.56 million from € 3.64 million in the first quarter of 2006 to € 8.20 million in the first quarter of 2007 with an incidence on revenues up from 52.6% in the first quarter of 2006, to 54.1% in the first quarter of 2007. This improvement compared to the 31 December 2006 figures is also slightly in excess of management's expectations for 2007, highlighting the lack of pressure on sale prices.

EBITDA amounted to € -561 thousand, net of € 189 thousand due to the price allocation for the business combinations recorded in the accounts pursuant to the provisions of IFRS 3 following the acquisition of the stakes in the Arcom Group and Applied Data Systems Inc.. Operating costs, which are mainly fixed, had a significant impact during a quarter in which, due to the concentration of the business, revenues are lower than in later quarters. The significant increase in sales forecast for the coming quarters will make it possible to better absorb these fixed costs.

The operating result (EBIT), net of the "price allocation", decreased between the first quarter of 2006 and the same period of 2007, from € -146 thousand in 2006 to € -918 thousand in 2007. This trend is strictly correlated to the EBITDA trend and higher amortisation and depreciation booked in 2007.

Financial management reported a positive change between the first quarter of 2006 and the first quarter of 2007 in absolute value of € 788 thousand, mainly as an effect of the income from the available liquidity following the share capital increase in July 2006 and the positive effect of the exchange rates management.

Profit before tax improved from € -485 thousand in the first quarter of 2006 to a result net of the "price allocation" of € -469 thousand in the first quarter of 2007.

The Group's net profit fell from € -434 thousand in the first quarter of 2006 to € -504 thousand in the first quarter of 2007, both net of the "price allocation". This performance, other than reflecting the trend of pre-tax profit, is mainly due to the impact of the tax charge on the Group's various companies and, to a lesser extent, profit attributable to minority interest.

As at 31 March 2007, and following the acquisition at the beginning of 2007, the Group still showed a positive net financial position of € 64.54 million, which is to be used mainly for external growth.

THE EUROTECH GROUP
Eurotech (ETH.MI) operates in the research, development, production and marketing of miniature computers (Nano-PC) and high performance computers (HPC).

Eurotech S.p.a. www.eurotech.com

Contacts:

Investor relations
Massimo Mauri
Tel. 0433-485411
e-mail: [email protected]

Communications department
Barbara Razzini
Tel. 0433-485411
e-mail: [email protected]

Press office:

Community
Consulenza nella comunicazione
Marco Rubino
Tel. 02-89404231
e-mail:[email protected]

ATTACHMENTS – FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENT

		First 3		First 3		change (b-a)
CONSOLIDATED INCOME STATEMENT		months		months
(€ '000)	Note	2006 (a)	%	2007 (b)	%	amount	%
Sales revenue	C	6.922	100,00%	15.155	100,00%	8.233	118,90%
Cost of material	D	(3.279)	-47,40%	(7.142)	-47,10%	(3.863)	117,80%
Gross profit		3.643	52,60%	8.013	52,90%	4.370	120,00%
Services costs	E	(1.977)	-28,60%	(3.254)	-21,50%	(1.277)	64,60%
Lease & hire costs		-113	-1,60%	-334	-2,20%	-221	195,60%
Payroll costs	F	(2.367)	-34,20%	(5.337)	-35,20%	(2.970)	125,50%
Other provisions and costs	G	-55	-0,80%	-217	-1,40%	-162	294,50%
Other revenues	H	979	14,10%	379	2,50%	-600	-61,30%
EBITDA		110	1,60%	-750	-4,90%	-860	n.s.
Depreciation & Amortization	I	-256	-3,70%	-908	-6,00%	-652	254,70%
Asset impairment	I	0	0,00%	0	0,00%	0	n/a
EBIT		-146	-2,10%	(1.658)	-10,90%	(1.512)	n.s.
Share of associates' profit at equity		0	0,00%	0	0,00%	0	n/a
Finance expense	L	-631	-9,10%	-398	-2,60%	233	-36,90%
Finance income	L	292	4,20%	847	5,60%	555	190,10%
Profit before tax		-485	-7,00%	(1.209)	-8,00%	-724	149,30%
Income tax	M	7	0,10%	235	1,60%	228	n.s.
Net profit before minority interest		-478	-6,90%	-974	-6,40%	-496	103,80%
Minority interest	Q	-44	-0,60%	-13	-0,10%	31	-70,50%
Group net profit (loss)		-434	-6,30%	-961	-6,30%	-527	121,40%

CONSOLIDATED INCOME STATEMENT – RECONCILIATION OF OPERATING AND REPORTED DATA

					3 months of
				Effect of	2007 net of
		3 months		purchase price	price
OPERATING DATA (€'000)		2007	%	allocation	allocation	%
SALES REVENUES		15.155	100,00%		15.155	100,00%
COST OF MATERIALS		(7.142)	-47,10%	189	(6.953)	-45,90%
GROSS PROFIT		8.013	52,90%	189	8.202	54,10%
OTHER OPERATING COSTS	(*)	(9.142)	-60,30%		(9.142)	-60,30%
OTHER OPERATING
REVENUES	(**)	379	2,50%		379	2,50%
EBITDA		-750	-4,90%	189	-561	-3,70%
DEPRECIATION &
AMORTIZATION		-908	-6,00%	551	-357	-2,40%
EBIT		(1.658)	-10,90%	740	-918	-6,10%
FINANCE INCOME (EXPENSE)		449	3,00%		449	3,00%
PROFIT (LOSS) BEFORE TAX		(1.209)	-8,00%	740	-469	-3,10%
INCOME TAX		235	1,60%	-283	-48	-0,30%
NET PROFIT (LOSS) BEFORE
MINORITIES		-974	-6,40%	457	-517	-3,40%
GROUP NET PROFIT (LOSS)
FOR PERIOD		-961	-6,30%	457	-504	-3,30%

CONSOLIDATED BALANCE SHEET

(Thousands of Euro)	31/03/2006	31/12/2006	31/03/2007	Changes (b-a)
ASSETS
Intangible assets	6.633	26.715	56.887	30.172
Property, Plant and equipment	3.177	4.121	4.906	785
Investments in associate and other companies	82	757	755	-2
Deferred tax assets	1.076	3.715	3.874	159
Other non-current assets	1.692	139	147	8
Total non-current assets	12.660	35.447	66.569	31.122
Inventories	7.384	12.307	17.128	4.821
Contracts in progress	2.930	810	1.711	901
Trade receivables	5.439	10.351	11.564	1.213
Other current assets	2.628	4.260	7.219	2.959
Valore equo attivo strumenti derivati	0	0	37	37
Cash & cash equivalents	24.947	119.614	84.351	(35.263)
Totale current assets	43.328	147.342	122.010	(25.332)
Total assets	55.988	182.789	188.579	5.790

LIABILITIES AND EQUITY

Share capital	4.656	8.751	8.751	0
Reserves	27.971	131.436	131.417	-19
Net profit (loss) for period	-434	572	-961	(1.533)
Group shareholders' equity	32.193	140.759	139.207	(1.552)
Minority capital and reserves	551	39	47	8
Minority profit (loss) for period	-44	8	-13	-21
Equity attributable to minority interest	507	47	34	-13
Total shareholders' equity	32.700	140.806	139.241	(1.565)
Medium-/long-term borrowing	3.793	15.910	15.887	-23
Employee benefit obligations	501	569	612	43
Deferred tax liabilities	322	3.594	7.744	4.150
Other non-current liabilities	91	374	425	51
Total non-current liabilities	4.707	20.447	24.668	4.221
Trade payables	8.054	12.234	12.893	659
Short-term borrowing	7.050	3.790	3.964	174
Valore equo passivo strumenti derivati	15	15	1	-14
Tax liabilities	360	2.885	1.441	(1.444)
Other current liabilities	3.102	2.612	6.371	3.759
Total current liabilities	18.581	21.536	24.670	3.134
Total liabilities	23.288	41.983	49.338	7.355
Total liabilities and equity	55.988	182.789	188.579	5.790

NET FINANCIAL POSITION

	31/03/2006	31/12/2006	31/03/2007
(€'000)
Cash & cash equivalents	24.947	119.614	84.351
Strumenti finanziari derivati	-15	-15	36
Short-term borrowing	(7.050)	(3.790)	(3.964)
Short-term net financial position	17.882	115.809	80.423
Medium-/long-term borrowing	(3.793)	(15.910)	(15.887)
Medium-/long-term net financial position	(3.793)	(15.910)	(15.887)
NET FINANCIAL POSITION	14.089	99.899	64.536

NET WORKING CAPITAL

	(€'000)	31/03/2006	31/12/2006	31/03/2007	Changes
			(a)	(b)	(b-a)
Inventories		7.384	12.307	17.128	4.821
Contracts in progress		2.930	810	1.711	901
Trade receivables		5.439	10.351	11.564	1.213
Other current assets		2.628	4.260	7.219	2.959
Current assets		18.381	27.728	37.622	9.894
Trade payables		(8.054)	(12.234)	(12.893)	-659
Tax liabilities		-360	(2.885)	(1.441)	1.444
Other current liabilities		(3.102)	(2.627)	(6.372)	(3.745)
Current liabilities		(11.516)	(17.746)	(20.706)	(2.960)
Net working capital		6.865	9.982	16.916	6.934