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Saipem SpA share performance

Note to Saipem share performance

On December 31, 2010, the trading price of Saipem’s ordinary shares on the Milan Stock Exchange stood at €36.90, representing a gain of 53.6% compared to the closing price of €24.02 recorded at the end of 2009.

The expectations of an economic recovery which characterised the closing months of 2009 were further reinforced at the beginning of 2010 by the stabilisation of oil prices at levels seen as capable of sustaining an upturn in investments by oil companies. These conditions helped sustain demand for oil services and contributed to a strong performance by the oil services sector generally and the Saipem share in particular during the whole of the first quarter. The share, having fallen to its lowest point of the period of €23.08 between the end of January and the beginning of February, in fact subsequently began to climb to almost €30 in mid-April – its highest price since May 2008, i.e. since before the financial crisis. The tragic accident that occurred on April 20, 2010 in the waters of the Gulf of Mexico, which led to the sinking of a drilling rig owned and operated by the American company Transocean, raised numerous doubts and concerns with regard to both the risks involved in drilling deepwater hydrocarbon fields and the ability of the oil industry to exploit them in an effective manner and, in addition to the impact caused by the accident, the Oil & Gas sector was also hit by the sovereign debt crisis triggered by the crises in Greece and Ireland, which affected the stock markets during the second and third quarters, and also indirectly affected the Saipem share. However, the easing up of the pressure on Eurozone markets and the economic stimulus packages introduced in the final part of the year enabled the stock markets to recover part of the lost ground. The Saipem share, thanks in part to the acquisition of a large number of important new contracts and the release of results that exceeded expectations, grew steadily throughout the final quarter of 2010, reaching a new record high to €37.27 and closing the year at just below €37.

During the year, the Saipem share outperformed the FTSE/MIB index by more than 63%, posting the second best performance of the index’s constituents. The company ranked 9th on the index in terms of market capitalisation, with a figure of €16.3 billion, compared with €10.6 billion in 2009.

With regard to share liquidity, shares traded in 2010 totalled approximately 745 million, representing a decrease compared with the figure of approximately 875 million registered in 2009. The average number of shares traded daily totalled just under 3 million (3.5 million in 2009), while the value of shares traded amounted to €20.6 billion, representing an increase by 36% compared with 2009 (€15 billion).

Stock exchange data and indices
  31.12.2006 31.12.2007 31.12.2008 31.12.2009 31.12.2010
Share capital
(€) 441,410,900 441,410,900 441,410,900 441,410,900 441,410,900
Ordinary shares
  441,251,799 441,251,800 441,262,713 441,265,604 441,270,452
Savings shares
  159,101 159,100 148,187 145,296 140,448
Market capitalisation
(€ million) 8,699 12,051 5,262 10,603 16,288
Gross dividend per share:
           
- ordinary shares
(€) 0.29 0.44 0.55 0.55 0.63 (1)
- savings shares
(€) 0.32 0.47 0.58 0.58 0.66 (1)
Price/earning ratio per share: (2)            
- ordinary shares
  22.65 13.77 5.75 14.48 19.30
- savings shares
  22.55 14.38 8.12 14.48 19.09
Price/cash flow ratio per share: (2)            
- ordinary shares
  14.17 10.42 4.15 9.05 11.97
- savings shares
  14.11 10.88 5.86 9.05 11.84
Price/adjusted earning ratio per share:
           
- ordinary shares
  22.65 20.74 7.26 14.48 19.67
- savings shares
  22.55 21.65 10.25 14.48 19.46
Price/adjusted cash flow ratio per share:
           
- ordinary shares
  14.17 13.98 4.88 9.05 12.11
- savings shares
  14.11 14.59 6.89 9.05 11.98
(1) To be approved by the Shareholders’ Meeting to be held on April 30 or May 4, 2011, at first and second call, respectively. (2) Figures pertain to the consolidated financial statements.

On May 27, 2010, a dividend of €0.55 per ordinary share was distributed to shareholders, which was in line with the dividend paid out in the previous year.

The price of the savings shares, which are convertible at par with ordinary shares, and are of a limited number (140,448 at December 31, 2010), rose by 52% from €24.02 at year end 2009 to €36.5 at year end 2010. The dividend distributed on savings shares was €0.58 per share, which was also in line with the dividend paid out in the previous year.

Share prices on the Milan Stock Exchange (€) 2006 2007 2008 2009 2010
Ordinary shares:            
- maximum
  21.14 31.56 30.44 24.23 37.27
- minimum
  13.79 18.32 10.29 10.78 23.08
- average
  17.85 24.72 23.19 17.51 28.16
- year-end   19.71 27.30 11.92 24.02 36.90
Savings shares:            
- maximum
  21.50 41.50 30.05 24.02 37.00
- minimum
  14.42 19.10 16.82 14.85 23.00
- average
  18.24 26.97 26.43 18.54 29.80
- year-end  19.62 28.50 16.82 24.02 36.50

Saipem and FTSE MIB - Average monthly prices January 2006-March 2011

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