Accounting principles and notes

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Accounting principles and notes

1. Group profile
Saes Getters S.p.A., the parent company, and its subsidiaries operate both in Italy and abroad in the development, production and marketing of getters and other components for cathode ray tubes and flat panel displays as well as getters and other components for industrial applications, and in the gas purification industry. The Group also operates in the field of advanced materials, particularly in the development of getters for microelectronic and micromechanical systems, optical crystals, shape memory alloys and metalorganic precursors. The parent company Saes Getters S.p.A. is controlled by S.G.G. Holding S.p.A. There are no changes in the scope of consolidation to report since December 31, 2004. The structure of the Saes Getters Group and the scope of consolidation are shown in note no. 39.

2. Summary of main accounting principles

Following the entry into force of EC Regulation no. 1606/2002, the Saes Getters Group adopted IAS/IFRS accounting standards as from 1 January 2005. This half year report was prepared according to these new standards and, in particular, according to IAS 34 "Interim Financial Reporting". These standards were adopted in preparing the comparative balance sheets, income statements and cash flow statements, with the exception of the measurement and recognition of financial instruments, particularly with regard to exchange risk hedges and the recognition of treasury shares. The Company in fact exercised the option specified in IFRS 1 to define the date of transition as January 1, 2005 for IAS 32 and 39. Please refer to the section on accounting principles and notes for further details. As part of the first-time adoption, IFRS 1 "First-time adoption of International Financial Reporting Standards" was applied. For a description of the effects arising from the transition to International Financial Reporting Standards (IAS/IFRS), please refer to note no. 39, containing a reconciliation between shareholders' equity and net income for the period according to Italian Accounting Principles and according to International Financial Reporting Standards (IAS/IFRS), both with reference to the previous comparable interim period (ended June 30, 2004) and to December 31, 2004, the reporting date for the last financial statements prepared in accordance with the accounting principles previously utilized. The standards adopted in this half year report and in the reconciliations presented may be different from the IFRS standards effective as at December 31, 2005, as a result of the European Commission's future guidance on the approval of the standards or the subsequent issue of new accounting standards, interpretations or implementation guidelines issued by the International Accounting Standards Board (IASB) or the International Financial Reporting Interpretation Committee (IFRIC). It should be taken into consideration that the half-year report does not include all the information required to prepare full annual financial statements. However, as a result of the first-time adoption of international financial reporting standards, these are more extensive than those required pursuant to IAS 34 and comparable with those contained in annual financial statements. Having exercised the option specified in Article 4, sub-section 2 of Legislative Decree no. 38/2005 on the exercising of the options provided for in EC Regulation no. 1606/2002 on accounting standards, the parent company and the subsidiary Saes Advanced Technologies S.p.A. intend to

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draw up the individual financial statements for the year ended December 31, 2005 according to international accounting standards. The main accounting standards applied are described below. Consolidation principles The main consolidation principles adopted in drawing up the consolidated financial statements are as follows: - The book value of investments in share capital is eliminated against the respective proportion of shareholders' equity in respect of the assumption of assets and liabilities, according to the full consolidation method. - In accordance with IAS 31, the book value of investments in jointly controlled companies included in the consolidated financial statements according to the proportionat consolidation method is eliminated against the respective fraction of shareholders' equity pertaining to the Group in respect of the assumption of assets and liabilities for the amount corresponding to the Group's percentage investment. Each item of the income statement is also entered in the consolidated financial statements for the amount corresponding to the Group's percentage investment. Debit and credit items and all other transactions between the jointly controlled company and the subsidiaries are eliminated according to the Group's percentage ownership. Residual balances are recognized in the balance sheet and in the income statement together with third party transactions. - Any positive difference between the cost of acquisition and the subsidiaries' equity share, expressed at the fair value at the time of acquiring the investment, if the necessary requirements are met, is posted as "Goodwill". - Profits and losses not yet realized arising from transactions between consolidated companies are eliminated as are debit and credit items and all other transactions between the companies included in the scope of consolidation. - The financial statements of foreign subsidiaries are converted into the currency of account (euro) by applying the current year-end exchange rate to assets and liabilities and the average exchange rate for the year to income statement entries. The difference between net income for the period obtained from converting at average exchange rates and net income for the period obtained from converting at year-end rates is entered in a special sub-item of the shareholders' equity "Currency translation reserve" included in the item "Sundry reserves and retained earnings". The same item also considers the effect on shareholders' equity of changes in exchange rates between the end of the previous financial year and the end of the current financial year. Details of the exchange rates applied in the conversion of financial statements expressed in a foreign currency are given in note no. 40. Accounting schemes The balance sheet layout conforms to the minimum content required by international accounting standards and is based on a distinction between current and non-current assets and liabilities depending on whether these items are realized within or after twelve months of the balance sheet date. The income statement is based on a cost allocation structure. The accounting schemes are consistent with the reports prepared for the internal organizational and management structure. Property, plant and equipment These are stated at cost or deemed cost, less accumulated depreciation and impairment losses.

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The cost includes additional charges and direct and indirect production costs in the amount reasonably attributable to the asset. Maintenance costs incurred after first recognition are capitalized only if they bring about an increase in the future economic benefits of the assets to which they relate. Some fixed assets were measured at fair value on the date of transition to International Financial Reporting Standards (IAS/IFRS) and are measured at deemed cost, which consists of the amount adjusted by the Group's Italian companies in accordance with the specific monetary revaluation laws at the time of these revaluations. Depreciation is calculated on a straight-line basis according to the expected useful life of the fixed assets, using the following rates: Buildings Machinery and equipment Industrial and commercial equipment Other assets 2.5%-3% 10%-25% 20%-25% 7%-25%

Finance leases are classified as those which transfer to the lessee substantially all the risks and rewards incidental to ownership. Fixed assets acquired under finance leases are recognized at the lower of fair value and the present value of the minimum lease payments owed, according to the contracts, and are depreciated on the basis of their expected useful life. The liability to the lessor is classified amongst financial liabilities in the balance sheet. Interest included in the lease payments is charged to the income statement for the period as financial expenses. Other leases are considered as operating leases and the respective costs are recognized on the basis of the conditions stipulated in the respective contracts. Intangible assets In accordance with IAS 38, intangible assets are recognized only if they are identifiable, if future economic benefits will probably flow from their use and if their cost can be reliably measured. Intangible assets are amortized according to their estimated useful life, if finite, as follows: Industrial and other patent rights 3-5 years/duration of the contract Concessions, licenses, trademarks and similar rights 3-50 years/duration of the contract Other 3-8 years/duration of the contract Intangible assets with an indefinite useful life are not amortized but are assessed for impairment at least annually or according to the frequency determined by impairment risk indications. Subsequent expenditure is only recognized if it increases the economic benefits expected from the use of the intangible assets to which it relates. Goodwill Any positive difference between the cost of acquisition of a business combination and the fair value of the assets and liabilities acquired is stated amongst intangible assets as goodwill. Any negative difference is charged to the income statement at the time of acquisition. Goodwill is not amortized but must be tested for impairment in accordance with IAS 36 Impairment of assets, at least annually or according to the frequency determined by impairment risk indications. After initial recognition, goodwill is stated at cost less any impairments recognized. During the first-time adoption of International Financial Reporting Standards, the Group took advantage of the specific exemption allowed under IFRS 1 which makes it possible to avoid the retrospective application of IFRS 3 Business combinations for acquisitions made prior to the date of transition to IFRS. Therefore, the goodwill generated by acquisitions prior to January 1, 2004 is

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stated at the value determined according to the accounting principles previously applied, after measuring and recognizing any lasting impairments. Research and development expenses The expenses incurred in research activities undertaken to acquire new scientific or technical knowledge or to broaden existing knowledge are charged to the income statement. The expenses incurred in development activities where research findings are applied to new or substantially improved products and processes are capitalized if all of the following conditions are met: technical feasibility, intention to complete the asset for use or sale, ability to use or sell the asset; likely to generate future economic benefits from the expenditure incurred (in particular by demonstrating the existence of a market for the asset being developed); availability of technical and financial resources to complete the development of the asset; expenditure measured reliably. Impairment The recoverable amount of property, plant and equipment and intangible assets is verified at least annually if there is an indication of impairment. An impairment loss should be recognized whenever the carrying amount of an asset exceeds its recoverable amount. Intangible assets with an indefinite useful life are tested for impairment annually or according to the frequency determined by impairment risk indications. If it is not possible to determine the recoverable amount for an individual asset, the Group estimates the recoverable value of the related cash generating unit. The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. Value in use is determined from estimated future cash flows based on a pre-tax discount rate that reflects the time value of money and the risks specific to the asset. Impairment loss is equal to the part of carrying amount exceeding recoverable amount. If, subsequently, an impairment loss on an asset other than goodwill is reversed or reduced, the carrying amount of the asset is increased based on its estimated recoverable amount, but not to exceed the amount that the asset would have had if no impairment loss had ever been recognized. Impairment loss and reversal of an impairment loss are recognized in the income statement Investments in share capital and other financial assets These belong to the categories "available-for-sale financial assets" or "held-to-maturity investments" defined by IAS 39. Assets in the first category are measured at fair value if a market price is available or at cost if it is not possible to determine the fair value. Assets in the second category are valued at amortized cost. Inventory and construction contracts Inventory is stated at the lower of purchase or production cost, calculated according to the FIFO method, and the market value. Production cost includes the direct costs of materials and labor and indirect production costs (variable and fixed). Obsolete and slow-moving stock is written down in relation to its possible use or realization. Construction contracts are measured on the basis of the stage of completion, net of any advances invoiced to customers. The production cost includes the direct costs of materials and labor and the indirect production costs (variable and fixed) reasonably attributable to them. Losses on construction contracts, if any, are charged to the income statement if it is likely that the total estimated expenses will exceed the total revenues expected.

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Trade and other receivables These are stated at nominal value less appropriate allowances for estimated irrecoverable amounts. Assets and liabilities held for sale These are assets and liabilities whose value will be recovered through sale rather than through use, insofar as they are subject to disposal. This specific classification is adopted when the sale occurs or when the assets and liabilities meet the criteria of "held for sale", if known previously. These are measured at the lower of carrying value and fair value, less their costs to sell. Impairments at the time of classification of assets and liabilities as held for sale are charged to the income statement, together with subsequent income and expenses arising from the measurement of these items. Derivative financial instruments In accordance with IAS 39, at the end of the period derivative financial instruments are measured at fair value and hedge accounting is applied if all requirements set out by the standard are met, i.e.: there is formal designation and documentation of a hedging relationship at inception; the hedge is expected to be highly effective; hedge effectiveness is reliably measurable; the hedge has been highly effective throughout the reporting periods for which it was designated; If all conditions for the application of hedge accounting are met, derivative financial instruments are treated according to the cash flow hedge model, which is applied to hedges against changes in cash flows arising from highly probable future transactions that may produce effects on the income statement. According to the cash flow hedge model, the effective portion of the gain or loss on derivative financial instruments is recognized in an equity reserve. Cumulative gains or losses recognized in equity are charged to the income statement for the period in which the hedged transaction is recognized. The ineffective portion of the gain or loss on financial instruments is charged directly to the income statement. Cumulative gains or losses related to forecasted hedged transactions that are no longer expected to occur are also charged to the income statement. If a hedging instrument or relationship is terminated and the forecasted hedged transaction has not yet occurred, the cumulative gains or losses recognized in equity at that time are charged to the income statement when the related transaction occurs. Accrued income/liabilities, prepaid expenses and deferred income These items include portions of costs and revenues which are common to two or more financial years, in accordance with accrual basis accounting. Shareholders' Equity The dividends distributed by the parent company are booked as liabilities at the time of the distribution decision. Transactions involving the purchase and sale of treasury shares are recognized directly as movements in shareholders' equity, without going through the income statement.

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Financial liabilities These are initially stated at cost, i.e. the resources received net of the additional charges to pay off the liability. Subsequently, financial liabilities are valued at amortized cost, i.e. the amount of the initial liability net of capital repayments and additional charges amortized. Staff leaving indemnity and other employee benefits This item includes staff leaving indemnity and other employee benefits, set aside to cover the accrued liabilities payable to employees according to the laws, national collective agreements and supplementary company agreements in force in the countries in which the consolidated companies operate. Both defined contribution and defined benefit plans are included. Under defined contribution plans, obligations are recorded as expenses on an accrual basis. Under defined benefit plans, obligations are valued by independent actuarial consultants according to the Projected Unit Credit Method, separately applied to each plan. As part of the first-time adoption of International Financial Reporting Standards (IAS/IFRS), all actuarial gains and losses existing on January 1, 2004 were recognized in the special equity reserve, together with the other impacts arising from the transition. After the date of transition to IFRS, the corridor approach is applied in respect of actuarial gains and losses, which are recognized for the cumulative part exceeding 10% of the present value of the defined benefit obligation at the end of the previous period. The liabilities arising from defined benefit plans are made up of the present value of the obligation towards employees, adjusted by unrecognized actuarial gains or losses and past service costs not yet recorded. Payments under defined contribution plans are charged to the income statement as costs when incurred Provisions for contingencies and obligations Provisions for contingencies and obligations are set aside to cover legal or constructive obligations, arising from past events and their settlement will require a probable outflow of resources, the amount of which can be reliably estimated. Changes of estimate are recognized in the income statement for the period in which the change occurs. If the effect is significant, provisions for contingencies and obligations have to be stated at the present value. Trade and other payables These relate respectively to trade or miscellaneous relations and are stated at nominal value. Treasury shares Treasury shares are deducted from equity. The original cost and the items generated from their subsequent sale are recognized as changes in shareholders' equity. Revenue recognition Revenues are recognized to the extent that it is probable that economic benefits will flow to the Group and the amount of revenue can be measured reliably. Revenues are stated net of discounts, allowances and returns.
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Revenues from the sale of goods are recognized when the transfer to the buyer of the risks and rewards of ownership takes place. Revenues generated from the rendering of services are recognized in the period in which the service was rendered. Grants Grants are recognized in the income statement where there is reasonable assurance that these will be obtained and that all the conditions for their recognition will be met. Capital grants, in the amount pertaining to the year, are charged to the income statement on the basis of the useful life of the assets to which the grants relate. The proportion of the capital grant that relates to future financial years is entered under the item "Accrued liabilities". Operating grants are recognized according to the accrual method of accounting in the same period in which the associated costs are incurred, shown net of these grants. Cost of sales The cost of sales represents the cost of buying or producing the products and goods that have been sold and includes the cost of raw materials, goods and direct and indirect production costs. The cost of sales also includes margins on construction contracts recognized by reference to the stage of completion (percentage of completion method). Research and development expenses All research expenses are charged to the income statement for the year in which they are incurred. Development expenses must be capitalized if the conditions set out in IAS 38 are met as already described in the notes on intangible assets. If the requirements for the mandatory capitalization of development expenses are not met, the expenses are charged to the income statement for the year in which they are incurred. Selling expenses These include the expenses that are incurred during the year as a result of selling products. General and administrative expenses These include the expenses that are incurred during the year in relation to the administrative structure. Financial items These include interest income and expense, exchange gains and losses (both realized and unrealized) and any adjustments to securities. Interest expense of any kind is charged to the income statement for the year in which it is incurred. Income taxes Income taxes for the period include both current and deferred taxes and are charged to the income statement for the year, except those relating to items directly debited or credited in an

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item of shareholders' equity for which the tax effect is recognized in equity. Current taxes are recognized on the basis of estimated taxable income in accordance with the provisions in force, taking account of the applicable exemptions and tax credits due. Deferred taxes are recognized for temporary differences between the carrying amount of an asset or liability and its value for tax purposes. Deferred tax assets, including those arising from tax losses carried forward and unused tax credits, are recognized to the extent that it is probable that future taxable income will be available to allow for their recovery. Deferred tax assets and liabilities are determined according to the tax rates that are applicable in the years during which the temporary differences are realized or settled in the respective countries in which the Group's companies operate. The consolidated financial statements recognize provisions for taxes owed in the event of the distribution of profits and reserves by subsidiaries, excluding those relating to profits and reserves that are not considered likely to be distributed in the foreseeable future. Earnings per share Earnings per share are calculated by dividing the net income for the period attributable to holders of ordinary and savings shares by the weighted average number of shares in issue during the period. Business segments A business segment is a separately identifiable business component whose function is to provide an individual product or service or series of products and services and which is subject to different risks and returns from those of other business segments.

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Notes to the financial statements

All amounts stated in the notes and in the financial statements are expressed in thousands of euro unless otherwise specified.

3. Net sales
Consolidated net sales for the first half of 2005 were c66,447 thousand, down by 8.8% on the figure of c72,847 thousand posted in the first half of 2004. The drop in sales net of the exchange rate effect was 6.7% whilst the strengthening of the euro against the major foreign currencies caused a further fall of 2.1%. In particular, the Cathode Ray Tubes and Semiconductors Business Areas achieved lower sales, only partially offset by the growth in sales in the Flat Panel Displays Business Area. It should be recalled that in the first half of 2004, some assets relating to the semiconductor market were disposed of as part of a plan aimed at recovering efficiency and focusing on profitable businesses. Net of the assets disposed of, the drop in sales would have been 5.7%. A breakdown of net sales according to Business Unit and Business Area is given below: Business Unit and Business Area Cathode Ray Tubes Flat Panel Displays Subtotal Information Displays Lamps Electronic Devices Vacuum Systems and Thermal Insulation Semiconductors Subtotal Industrial Applications Subtotal Advanced Materials Total Net Sales Legenda: Information Displays Business Unit Cathode Ray Tubes Flat Panel Displays Industrial Applications Business Unit Lamps Electronic Devices Vacuum Systems and Thermal Insulation Semiconductors 1st Half 2005 16,176 23,490 39,666 5,661 6,240 3,222 11,370 26,493 288 66,447 1st Half 2004 22,715 19,948 42,663 5,721 5,869 3,045 15,549 30,184 0 72,847 Difference (6,539) 3,542 (2,997) (60) 371 177 (4,179) (3,691) 288 (6,400) -28.8% 17 .8% -7.0% -1.0% 6.3% 5.8% -26.9% -12.2% n.a. -8.8%

Barium getters for cathode ray tubes Getters and metal dispensers for flat panel displays

Getters and metal dispensers used in discharge lamps and fluorescent lamps Getters and metal dispensers for electron vacuum devices Pumps for vacuum systems and products for thermal insulation Gas purifier systems for semiconductor industry and other industries and installations for the telecommunications industry

Advanced Materials Business Development Unit Advanced Materials Getters for microelectronic and micromechanical systems, optical crystals, shape memory alloys and metalorganic precursors

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4. Cost of sales
The amount stated in the income statement in the first half 2005 was c31,768 thousand, down by c4,483 thousand on the figure of c36,251 thousand posted in the first half 2004. A breakdown of the cost of sales according to Business Unit is given below: 1st Half 2005 14,766 16,422 580 31,768 1st Half 2004 16,688 19,306 257 36,251 Difference (1,922) (2,884) 323 (4,483)

Information Displays Industrial Applications Advanced Materials & Corporate Costs Cost of sales

Both Business Units saw a sharp fall in the cost of sales, mainly as a result of lower net sales and of the positive effects arising from the restructuring operations and disposals implemented in the previous period, particularly in terms of personnel costs. A breakdown of the cost of sales according to category is given below: 1st Half 2005 9,291 5,965 16,923 (411) 31,768 1st Half 2004 9,784 7 ,212 18,596 659 36,251 Difference (493) (1,247) (1,673) (1,070) (4,483)

Raw Materials Direct labor Manufacturing overhead (Increase) decrease in inventory Cost of sales

The reduction in the cost of direct labor and manufacturing overheads was chiefly due to the aforementioned restructuring operations and disposals.

5. Operating expenses
Operating expenses totaled c21,857 thousand (c21,168 thousand in the first half of 2004), broken down by destination as follow: 1st Half 2005 7 ,188 7 ,770 6,899 21,857 1st Half 2004 6,525 8,063 6,580 21,168 Difference 663 (293) 319 689

Research and development expenses Selling expenses General and administrative expenses Totale operating expenses

Operating expenses increased by c689 thousand, principally as a result of increased research and development expenses and the inclusion, in the general and administrative expenses, of nonrecurring consultancy expenses in relation to the voluntary conversion of savings shares into ordinary shares which took place in January 2005.

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A breakdown of total expenses by nature included in the cost of sales and in operating expenses is given below: Total costs by nature Personnel cost Travel expenses Maintenance and repairs Depreciation Amortization Material and office material Insurance services Promotion and advertising Provision for bad debts Consultant fees Rent office Licenses and patents Post, telephone, telex, fax Transport, insurance, freight Recovery of insurance, transport, freight Other recovery Other expenses Total 1st Half 2005 21,309 1,151 2,247 5,217 520 2,448 502 182 107 2,725 288 597 394 630 (200) (414) 7 ,042 44,745 1st Half 2004 23,503 1,145 2,203 5,411 575 2,590 558 230 61 2,653 507 772 492 615 (44) (979) 6,684 46,976 Difference (2,194) 6 44 (194) (55) (142) (56) (48) 46 72 (219) (175) (98) 15 (156) 565 358 (2,231)

The item Consultant fees includes, inter alia, the costs associated with the voluntary conversion of savings shares into ordinary shares. The total labor cost was c21,309 thousand, down on the same period last year (c23,503 thousand), mainly reflecting the decrease in the number of Group employees resulting from the aforementioned restructuring operations and the disposal of the assets relating to the Semiconductors Business Area. It should also be recalled that the item Other expenses includes the fees owed to the Directors (which rose from c715 thousand in the first half of 2004 to c1,080 thousand for the period ended June 30, 2005) and to the Board of Statutory Auditors (which rose from c43 thousand in the first half of 2004 to c44 thousand for the period ended June 30, 2005).

6. Other income (expenses) net

The item Other income (expenses), net shows a year-on-year decrease of c566 thousand. It should be recalled that in the last period a capital gain (of c803 thousand) was made from the disposal of the assets relating to gas impurity analyzers based on IMS technology relating to the subsidiary New Trace Analytical, Inc. (formerly Molecular Analytics, Inc.). The item is broken down as follows.

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Capital gains on disposal of assets Gains from financial instruments evaluated at fair value Other income Total Other Income Losses on disposal of assets Writedowns of intangible fixed assets Other expenses Total Other Expenses Other income (expenses), net

1st Half 2005 113 356 375 844 (5) (103) (890) (998) (154)

1st Half 2004 838 0 502 1,340 (43) 0 (885) (928) 412

Difference (725) 356 (127) (496) 38 (103) (5) (70) (566)

Other Income recorded in the first half of 2005 shows a year-on-year decrease of c496 thousand, again principally due to the aforementioned capital gain made in 2004. The item Gains from financial instruments evaluated at fair value includes the income arising from the fair value measurement of the hedges taken out to protect against changes in cash flows expected from foreign currency sale transactions (US dollars and Japanese yen). These hedges are recognized according to the cash flow hedge model. The comparative figures relating to last period do not include the effect of IAS 32 Financial instruments: Disclosure and presentation and IAS 39 Financial instruments: Recognition and measurement, after defining January 1, 2005 as the transition date for their application. If IAS 32 and IAS 39 had been applied for the period under comparison, the value of these financial components would have been determined by reference to the effect of the hedges existing at the end of the first half of 2004. The costs included in the item Other Expenses are overall in line with the last period. During the first half of 2005, intangible assets were written down by the Japanese subsidiary in the amount of approximately c100 thousand.

7. Interest and other financial income, net

This item shows a total year-on-year increase of c165 thousand, which is mainly due to the higher interest income on bank deposits resulting from a higher average level of cash and cash equivalents in the six months than in the previous period and lower interest expense as a result of reduced bank borrowing. 1st Half 2005 739 (118) 621 1st Half 2004 531 (75) 456 Difference 208 (43) 165

Bank interest, net Other financial income (expenses) Interest and other financial income, net

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8. Foreign exchange gains (losses), net

This item shows a total year-on-year increase of c778 thousand and is broken down as follows: 1st Half 2005 1,543 (697) 846 1st Half 2004 1,170 (1,102) 68 Difference 373 405 778

Foreign exchange gains Foreign exchange losses Total

The change reflects the trend of exchange rates during 2005 compared with the corresponding period in 2004.

9. Income taxes
This item shows a total year-on-year decrease of c159 thousand. 1st Half 2005 3,974 2,153 6,127 1st Half 2004 4,915 1,371 6,286 Difference (941) 782 (159)

Current income taxes Deferred taxes Total

This item includes current taxes and provisions for deferred taxes which include, inter alia, the tax effect of consolidation adjustments. The breakdown shows a reduction in current taxes from c4,915 thousand in the first half of 2004 to c3,974 thousand in the first half of 2005. This reduction is due to lower taxable income for the Group's companies. The item also includes positive adjustments made in relation to current taxes in the previous year totaling c346 thousand. The net amount of deferred taxes developed from a negative balance of c1,371 thousand in the first half of 2004 to a negative balance of c2,153 thousand in the first half of 2005. The change is mainly due to the utilization by the parent company Saes Getters S.p.A. of deferred tax assets due to previous write down of investments in share capital, in addition to the effect of the provisions for the taxes owed, if any, in the event of the distribution of the accumulated profits of the subsidiaries as at June 30, 2005. Income taxes increased from 38.4% of pre-tax profits in the first half of 2004 to 43.3% in the period ended June 30, 2005, mainly as a result of the greater impact of the provisions for the taxes owed, if any, in the event of the distribution of the accumulated profits and reserves of the subsidiaries as at June 30, 2005, partially offset by the different contribution of the profit making companies located in countries with different taxation and through the effect of the aforementioned tax adjustments. The differential between the theoretical tax liability on the basis of the tax rates applied in Italy for IRES (33%) and IRAP (4.25%) and the actual consolidated tax liability for the first half

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of 2005 (43.3%) is mainly due to the effect of the aforementioned provisions for taxes owed, if any, in the event of the distribution of the accumulated profits and reserves of the subsidiaries and to the adjustments to the dividends as a result of their effect on the consolidated pre-tax income. These effects are partially offset by the impact of the various tax rates applicable to the Group's individual companies. It should be noted that, with effect from May 12, 2005, the parent company Saes Getters S.p.A. and the subsidiary Saes Advanced Technologies S.p.A. signed an agreement for tax consolidation with S.G.G. Holding S.p.A., the company that controls Saes Getters S.p.A., thus exercising the group taxation option offered in Article 117 of the Income Tax Act (TUIR), with the effects set out in Article 118 of the same Act.

10. Earnings per share

The earnings per share ratio was calculated by dividing the period income of the Saes Getters Group by the average outstanding number of shares in issue in the first six months of 2005. Earnings per share Number of ordinary shares : Number of savings shares : Total number of shares : Average number of ordinary treasury shares : Average number of savings treasury shares : Average number of treasury shares : Average number of outstanding ordinary shares : Average number of outstanding savings shares : Average number of outstanding shares : Earnings attributable to ordinary shares : Earnings attributable to savings shares : Earnings attributable to shareholders (s/000) : Earnings per share (s) : - ordinary shares - savings shares 1st Half 2005 15,271,350 7,460,619 22,731,969 302,028 3,757 305,785 14,969,322 7,456,862 22,426,184 5,265 2,743 8,008 0.3517 0.3678 1st Half 2004 13,874,930 9,625,070 23,500,000 191,128 173,306 364,434 13,683,802 9,451,764 23,135,566 5,961 4,117 10,078 0.4356 0.4356

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11. Segment information

The income statement and balance sheet values shown in the following analytical statements are described for primary business segments in accordance with IAS 14. There are two primary business segments identified on the basis of the products developed and sold: Information Displays and Industrial Applications. The column "Not allocated" includes corporate income statement and balance sheet values and income statement and balance sheet values relating to research and development projects undertaken to achieve diversification in the area of advanced materials, as well as any other income statement and balance sheet values that cannot be allocated to primary segments. The presentation shown reflects the Group's organizational structure and the internal reporting structure. The main income statement figures relating to the primary business segments identified are as follows:
Information Displays 1st Half 2005 Total Net Sales Gross Profit (Loss) % on net sales Total operating expenses Other income (expenses), net Operating Income (Loss) % on net sales Interest and other financial income, net Foreign exchange gains (losses), net Income before taxes Income taxes Net Income 39,666 24,900 62.8% (8,019) 222 17,103 43.1% 1st Half 2004 42,663 25,975 60.9% (7,115) (362) 18,498 43.4% Industrial Applications 1st Half 2005 26,493 10,071 38.0% (8,742) (372) 957 3.6% 1st Half 2004 30,184 10,878 36.0% (10,825) 774 827 2.7% Not allocated 1st Half 2005 288 (292) -101.4% (5,096) (4) (5,392) -1872.2% 1st Half 2004 (257) n.a. (3,228) (3,485) n.a. Total 1st Half 2005 66,447 34,679 52.2% (21,857) (154) 12,668 19.1% 621 846 14,135 (6,127) 8,008 1st Half 2004 72,847 36,596 50.2% (21,168) 412 15,840 21.7% 456 68 16,364 (6,286) 10,078

The main balance sheet figures relating to the primary business segments are as follows:
Information Displays June 30, December 31, 2005 2004 Non current assets Current assets Total assets Non current liabilities Current liabilities Total liabilities Other segment information Capital expenditure Depreciation and Amortization Non-cash expenses other than Depreciation and Amortization 2,375 2,762 510 3,885 5,598 1,559 1,136 1,957 777 2,331 4,920 2,522 846 1,018 86 2,419 1,594 197 4,357 5,737 1,373 8,635 12,112 4,278 32,810 26,810 59,620 5,232 11,413 16,645 32,525 24,928 57,453 5,147 10,270 15,417 Industrial Applications June 30, 2005 22,175 21,764 43,939 4,825 8,616 13,441 December 31, 2004 22,080 22,429 44,509 4,111 8,796 12,907 Not allocated June 30, December 31, 2005 2004 17,967 82,029 99,996 7,431 9,861 17,292 18,813 94,903 113,716 7,235 10,869 18,104 Total June 30, December 31, 2005 2004 72,952 130,603 203,555 17,488 29,890 47,378 73,418 142,260 215,678 16,493 29,935 46,428

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The following table shows an analysis of net sales by geographical location of customers: Revenues by geographical location of customers Italy Other EU and Europe North America Japan Asia (excl. Japan) Other Total Net Sales 1st Half 2005 371 10,163 11,551 17 ,839 25,231 1,292 66,447 1st Half 2004 696 11,291 12,789 17 ,098 29,563 1,410 72,847 Difference (325) (1,128) (1,238) 741 (4,332) (118) (6,400)

This shows, in particular, a drop in net sales in Asian countries except for Japan which has had 4.3% growth on the same period last year. The downturn in sales on the Asian market is mainly due to weaker demand for getters on the traditional cathode ray tubes market, only partially offset by the growth of demand for mercury dispensers used in cold cathode lamps (Flat Panel Displays Business Area). Sales were also down on the North American and European market, due, in part, to lower sales of getters for cathode ray tubes and, in part, to the disposal, in the first half of 2004, of the assets relating to gas impurity analyzers (previously Analytical Technologies Business Area) and of the assets relating to quality assurance and quality control services for the semiconductor market (previously Facilities Technologies Business Area).

Geographical Areas Europe June 30, 2005 (6) Consolidato Direct sales (1) Inter-segment sales (2) Total sales Operating income (loss) (3) Total assets (4) Capital expenditure (5) June 30, 2004 Direct sales (1) Inter-segment sales (2) Total sales Operating income (loss) (3) Total assets (4) Capital expenditure (5) 15,296 25,378 40,674 6,454 176,197 1,958 0 1,071 1,071 20 39,156 10 16,618 4,274 20,892 2,011 26,399 57 23,398 255 23,653 2,767 15,097 0 17,535 1,345 18,880 4,769 45,669 44 0 (32,324) (32,324) (181) (84,542) 1 72,847 0 72,847 15,840 217,976 2,070 Italy 13,530 23,708 37,238 3,707 178,115 3,948 Other EU and Europe 34 737 771 (482) 16,046 2 United States of America 15,466 780 16,246 1,566 20,685 150 Asia Consolidated Japan 22,006 382 22,388 2,343 15,878 0 Rest of Asia 15,411 640 16,051 5,317 43,144 257 Adjustments (6) 0 (26,247) (26,247) 217 (70,313) 0 66,447 0 66,447 12,668 203,555 4,357

(1) Direct sales to unaffiliated customers comprise sales by Group companies from that geographical segment. (2) Inter-segment sales include sales to Group companies located in other geographical areas. Inter-segment sales are generally priced at cost plus an appropriate mark-up for profit. (3) This refers to the operating income (loss) posted by Group companies belonging to the geographical area in question, net of adjustments made for consolidation purposes in respect of transactions carried out between Group companies belonging to the same geographical area. (4) This refers to total assets as carried in the balance sheet of Group companies belonging to the geographical area in question, net of adjustments made for consolidation purposes in respect of transactions carried out between Group companies belonging to the same geographical area. (5) This includes the total investments made by Group companies belonging to the segment, net of adjustments made for consolidation purposes in respect of transactions carried out between Group companies belonging to the same geographical area. (6) This refers to adjustments made for consolidation purposes in respect of transactions carried out between Group companies belonging to different geographical areas.

41

Non current assets

12. Property, plant and equipment, net

Total property, plant and equipment, less accumulated depreciation, was c60,726 thousand and c59,769 thousand as at June 30, 2005 and December 31, 2004 respectively. The changes are shown below: Land and buildings Net book value Balance at December 31, 2004 Additions Disposals Reclassifications Depreciation Writedowns Conversion differences Balance at June 30, 2005 Balance at December 31, 2004 Historical cost Accumulated depreciation Net book value Balance at June 30, 2005 Historical cost Accumulated depreciation Net book value Plant and machinery Assets under construction and advances Total

27,340 155 39 (597) 1,024 27,961 38,055 (10,715) 27,340 39,967 (12,006) 27,961

29,507 2,294 (14) 858 (4,620) 907 28,932 98,450 (68,943) 29,507 103,142 (74,210) 28,932

2,922 59,769 1,785 4,234 (14) (897) 0 (5,217) 0 23 1,954 3,833 60,726 2,922 139,427 0 (79,658) 2,922 59,769 3,833 146,942 0 (86,216) 3,833 60,726

The item Land and buildings and the item Plant and machinery include assets redeemed by the Group's Italian companies at the end of finance leases with a net book value of c4,532 thousand and c142 thousand respectively as at June 30, 2005 (compared with c4,626 thousand and c207 thousand respectively as at December 31, 2004). There are no finance leases currently in progress. The increases in the item Plant and machinery and in the item Assets under construction and advances are mainly due to the investments made by the Group's Italian companies to purchase special machinery and equipment for the building of new production lines and for improving and developing those already existing. With regard to the assets belonging to the Group's Italian companies previously affected by the application of specific monetary revaluation laws, the Group decided to exercise the exemption allowed under IFRS 1 First-time Adoption of International Financial Reporting Standards in relation to the possibility of the selective adoption of fair value on the date of transition to IFRS. Therefore, these assets are measured on the basis of the deemed cost, which is the restated amount at the time of making these revaluations. The net carrying amount of the revaluations made, net of the amortized portion, on the transition date was c137 thousand and c963 thousand for the assets in the category of Land and buildings and in the category of Plant and machinery respectively.

42

13. Intangible assets, net

Total intangible assets, less amortization, was c3,151 thousand and c3,586 thousand as at June 30, 2005 and December 31, 2004 respectively. The changes are shown below:
Development costs Industrial and other patent rights Concessions, Other licences, intangible trademarks and assets similar rights Assets under development and advance Total

Net book value Balance at December 31, 2004 Additions Disposals Reclassifications Amortization Writedowns Conversion differences Balance at June 30, 2005 Balance at December 31, 2004 Historical cost Accumulated amortization Net book value Balance at June 30, 2005 Historical cost Accumulated amortization Net book value

0 23

681 54 71 (149)

1,695 21 (246) 29 1,499 4,288 (2,593) 1,695 4,558 (3,059) 1,499

379 3 (125) (103) 21 175 4,695 (4,316) 379 4,526 (4,351) 175

831 22 (71)

23 0 0 0 23 0 23

15 672 1,483 (802) 681 1,660 (988) 672

782 831 0 831 782 0 782

3,586 123 0 0 (520) (103) 65 3,151 11,297 (7,711) 3,586 11,549 (8,398) 3,151

The write-down included in the item Other intangible assets relates to the elimination of the residual value of certain marketing rights by the subsidiary Saes Getters Japan Co. Ltd. as no future economic benefits are expected to flow from their use. The item Assets under construction and advances essentially includes capitalized costs relating to the development and improvement of the Group's IT systems (rights, licenses, etc.) and the purchase of new application software. All intangible assets have a defined useful life. The development expenses that meet the criteria for mandatory capitalization amount to c23 thousand as at June 30, 2005.

14. Deferred tax assets

This item posted a balance of c7 ,920 thousand as at June 30, 2005 compared with c8,959 thousand as at December 31, 2004 and reflects the net balance of deferred taxes for temporary differences between the value ascribed to assets or liabilities according to statutory criteria and

43

the value ascribed for tax purposes, as well as the effect of tax losses that may be carried forward and consolidation adjustments. The item includes the deferred tax effect (positive effect of c185 thousand) associated with the recognition of a special reserve (negative balance as at June 30, 2005) in the shareholders' equity following the application of the cash flow hedge model to hedges against changes in cash flows arising from highly probable future transactions. Tax losses that may be used to reduce the future taxable income of the Group's companies that generated them amounted to c48,927 thousand (of which c30,975 thousand can be carried forward without time limit) as at June 30, 2005. The potential deferred tax assets (c13,827 thousand as at June 30, 2005) are not recognized in view of the uncertainties about their recoverability.

15. Other long term assets

These are broken down as follows: Guarantee deposits Other Total June 30, 2005 559 596 1,155 December 31, 2004 531 573 1,104 Difference 28 23 51

The item Other mainly consists of investments made by the US subsidiaries in relation to the agreements for supplementary pension allowances agreed locally with employees.

Current assets

16. Inventory
The item in question is broken down as follows: Raw materials, auxiliary materials and spare parts Work in progress and semi-finished goods Finished products and goods Total June 30, 2005 December 31, 2004 4,186 3,687 8,635 16,508 4,313 3,330 8,093 15,736 Difference (127) 357 542 772

Inventory values are expressed net of the inventory allowance (c3,556 thousand as at June 30, 2005 compared with c3,790 thousand as at December 31, 2004) in order to bring these into line with their estimated realizable value. During the period, inventory write downs of c158 thousand were charged to the income statement. The overall increase in inventory compared with December 31, 2004 is essentially due to contingent production plans and to the effect of translation gains resulting from the trend of the euro against the major foreign currencies. The item Work in progress and semi-finished goods includes the measurement according to the percentage of completion method for construction contracts undertaken by the parent
44

company, whose accrued margin amounted to c10 thousand as at June 30, 2005 compared with c252 thousand as at December 31, 2004.

17. Trade receivables

As at June 30, 2005, the item in question is broken down as follows: Gross value June 30, 2005 Trade receivables 30,833 Bad debt provision June 30, 2005 (714) Net value Net value Difference June 30, December 31, 2005 2004 30,119 28,581 1,538

Trade receivables (all due within one year) relate to ordinary sales transactions. The bad debt provision shown above reflects an adjustment made to bring the value of receivables in line with their estimated realizable value. The net increase in trade receivables since December 31, 2004 is primarily due to the positive effect of the translation gains arising from the conversion of financial statements expressed in a foreign currency resulting from the trend of the euro against the main currencies and to the high level of net sales achieved in the month of June.

18. Prepaid expenses, accrued income and other

This item, which includes current non-trade receivables from third parties, along with prepaid expenses and accrued income, showed a balance of c8,342 thousand as at June 30, 2005 compared with c7 ,926 thousand as at December 31, 2004. The balances are broken down as follows: Income taxes receivable VAT receivables Other tax receivables Social security receivables Personnel Short-term guarantee deposits Parent company receivables for consolidated taxation Other Total other receivables Interest receivable Other accrued income Total accrued income Rents payable Insurance premiums Other Total prepaid expenses Total prepaid expenses, accrued income and other June 30, 2005 60 2,946 71 104 219 9 3,238 989 7,636 0 43 43 15 77 571 663 8,342 December 31, 2004 734 4,203 53 93 170 80 0 1,681 7,014 10 137 147 18 296 451 765 7,926 Difference (674) (1,257) 18 11 49 (71) 3,238 (692) 622 (10) (94) (104) (3) (219) 120 (102) 416

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The item Income taxes receivables as at December 31, 2004 related primarily to amounts receivable for corporation tax (IRES) and amounts paid in advance, carried mainly in the accounts of the parent company. The lower balance as at June 30, 2005 compared to December 31, 2004 is due to the use of these receivables for the taxes owed (IRES) in relation to the taxable income produced by the Italian companies in the first half of 2005. The item Parent company receivables for consolidated taxation included the amount receivable as a result of the Group's Italian companies subscribing to the national tax consolidation with the parent company S.G.G. Holding S.p.A. The item Other, which falls under the category of other receivables, included the amounts receivable as public grants accrued as at June 30, 2005 by the parent company (c487 thousand compared with c1,138 thousand as at December 31, 2004) principally in terms of grants for operating expenses for research projects in progress, and the residual receivables claimed by the subsidiary Saes Advanced Technologies S.p.A. from the Ministry of Treasury, Budget and Economic Planning (c276 thousand, unchanged since December 31, 2004) for the incentives outlined in the "Territorial Agreement for the Marsica Area". The decrease since December 31, 2004 is mainly due to the collection of part of these receivables in respect of public grants by the parent company.

19. Investments in share capital and other financial assets

As at December 31, 2004, this item included the book value of treasury shares in the amount of c2,505 thousand, reclassified as a negative amount in shareholders' equity by changing the opening balances as a result of January 1, 2005 being defined as the transition date for the application of IAS 32 (Financial instruments: Disclosure and presentation) and IAS 39 (Financial instruments: Recognition and measurement). The comparative figures relating to last year do not therefore include the effect of the aforementioned standards. If IAS 32 and IAS 39 had been applied for the period under comparison, the reclassification of the book value of treasury shares as a negative amount in shareholders' equity would have been based on the values existing as at December 31, 2004. In accordance with the resolution adopted pursuant to Articles 2357 and 2357ter of the Civil Code, during the year the parent company sold and bought treasury shares as shown in the following table: Book values Unit values (euro) Total values (thousands of euro) 8.36 1,598

Ordinary shares Number of shares Balances at December 31, 2004 191,128 Additions Disposals Conversion 110,900 Balances at June 30, 2005 302,028 Savings shares Number of shares Balances at December 31, 2004 173,306 Additions 10,013 Disposals (1,411) Conversion (171,895) Balances at June 30, 2005 10,013

8.11 8.27

899 2,497

Book values Unit values (euro) Total values (thousands of euro) 5.23 907 12.10 121 5.23 (8) 5.23 (899) 12.10 121

Total treasury shares 2,618 Balances at June 30, 2005 10,01otale azioni proprie As a result of the voluntary conversion of savings shares into ordinary shares, which took place in January 2005, the parent company submitted for conversion 171,895 savings treasury shares remaining after the sale of 1,392 shares in order to allow shareholders to hold entire multiples for conversion, and sold the remaining 19 shares on the market. The
46

conversion ratio was 20 ordinary shares for every 31 savings shares. SAES Getters ordinary shares held in the company's portfolio as at June 30, 2005 had a par book value of c162 thousand and represented 1.33% of the capital stock (1.98% of ordinary shares). SAES Getters savings shares held in the company's portfolio as at June 30, 2005 had a par book value of c5 thousand and represented 0.04% of the capital stock (0.13% of savings shares).

20. Cash and cash equivalents

The balances are broken down as follows: Bank deposits Cash on hand Total June 30, 2005 75,563 32 75,595 December 31, 2004 87 ,480 31 87,511 Difference (11,917) 1 (11,916)

The decrease in the item Bank deposits since December 31, 2004 is mainly due to the greater outlays for payment of dividends, partially offset by the cash generated by day-to-day business. The item Bank deposits mainly consists of short-term deposits held by the parent company and by the subsidiary Saes Getters International Luxembourg S.A. at leading credit institutions. The item Bank deposits includes time deposits made by the parent company in the amount of c58,000 thousand, all maturing within the first fifteen days of July 2005. The cash and cash equivalents held by the Group as at June 30, 2005 were mainly expressed in euro.

Shareholders equity

21. Shareholders equity

As at June 30, 2005, shareholders' equity amounted to c156,177 thousand, down by c13,073 thousand on December 31, 2004. The changes that occurred during the period are described in the statement of changes in shareholders' equity. The consolidated financial statements include provisions for any taxes owed in the event of the distribution of the profits accumulated in previous years by the subsidiaries, excluding those associated with taxable temporary differences which are not expected to be settled in the foreseeable future in the form of a dividend distribution.

47

Capital stock As at June 30, 2005, the capital stock, fully subscribed and paid-up, amounted to c12,220 thousand and is made up of 15,271,350 ordinary shares and 7 ,460,619 savings shares, making a total of 22,731,969 shares. As at December 31, 2004, the capital stock consisted of 13,874,930 ordinary shares and 9,625,070 savings shares, making a total of 23,500,000 shares. Between January 3 and January 14, 2005 inclusive, the optional conversion of savings shares into ordinary shares took place at a ratio of 20 ordinary shares for every 31 savings shares. This operation resulted in the conversion of 2,164,451 savings shares, corresponding to 22.49% of the total number of savings shares currently in issue. As a result of this operation, the par book value increased from c0.52 per share as at December 31, 2004 to c0.537569 per share as at June 30, 2005. The changes in the number of shares in issue during the first half of 2005 are shown below. No of shares at Dec. 31, 2004 13,683,802 9,451,764 23,135,566 191,128 173,306 364,434 13,874,930 9,625,070 23,500,000 Increase 1,285,520 (10,013) 1,275,507 110,900 10,013 120,913 1,396,420 1,396,420 Decrease (1,991,145) (1,991,145) (173,306) (173,306) (2,164,451) (2,164,451) No of shares at June 30, 2005 14,969,322 7 ,450,606 22,419,928 302,028 10,013 312,041 15,271,350 7 ,460,619 22,731,969

- Ordinary shares - Savings shares Outstanding shares - Ordinary shares - Savings shares Treasury shares - Ordinary shares - Savings shares Total number of shares

All shares of the parent company are listed on the Italian Electronic Stock Market ("Mercato Telematico Azionario"). In 2001 the company was a founding member of the new segment of the Mercato Telematico Azionario called STAR (Securities with High Requirements), dedicated to small-caps and mid-caps that meet specific requirements with regard to reporting transparency, liquidity and corporate governance. Share issue premium This item includes amounts paid by shareholders over the par value of shares underwritten by capital increases. As at June 30, 2005, this amounted to c38,300 thousand compared to c38,292 thousand as at December 31, 2004. Treasury shares These are reclassified to be deducted from equity as from January 1, 2005 in accordance with IAS 32. Please refer to note no. 19. Legal reserve This item refers to the parent company's legal reserve of c2,444 thousand as at June 30, 2005 and is unchanged from December 31, 2004.

48

Sundry reserves, retained earnings and accumulated losses This item includes: - the reserve for treasury shares, which showed a balance of c2,618 thousand as at June 30, 2005, equal to the book value of Saes Getters ordinary and savings shares at the end of the period; - the cash flow hedge reserve (which has a negative balance of c414 thousand as at June 30, 2005), generated by the fair value measurement of hedges taken out by the Group's Italian companies to protect against changes in cash flows expected from foreign currency sale transactions (US dollars and Japanese yen), which are mainly inter-company in nature. Following the definition of January 1, 2005 as being the transition date for the application of IAS 32 and IAS 39 both relating to financial instruments, this reserve was set up in 2005 by restating the opening balances for the year, according to the treatment prescribed by IAS 8 in the case of a change in accounting policies. The comparative figures relating to last year do not include the effect of IAS 32 Financial instruments: Disclosure and presentation and IAS 39 Financial instruments: Recognition and measurement, after defining January 1, 2005 as being the transition date for their application. If IAS 32 and IAS 39 had been applied for the period under comparison, the value of this reserve as at December 31, 2004 would have been determined by reference to the effect of the hedges existing at the end of the previous year; - the reserves (totaling c3,026 thousand) formed from the credit balances of monetary revaluation resulting from the application of Law 72 of March 19, 1983 (c574 thousand), Law 413 of December 30, 1991 (c762 thousand) and Law 342 of November 21, 2000 (c1,690 thousand) by the Group's Italian Companies. The revaluation reserves, pursuant to Law 413/1991 and Law 342/2000, are shown net of substitute tax amounting to c166 thousand and c397 thousand respectively. Please refer to note no. 12 for further details; - the reserve for purchase of treasury shares that has been decided but not yet utilized, totaling c10,379 thousand as at June 30, 2005, compared with c10,500 thousand as at December 31, 2004; - the other reserves of subsidiaries, retained earnings, other equity items related to the Group's companies not eliminated as part of the consolidation process and the exchange gains or losses arising from the conversion of financial statements expressed in foreign currencies. The translation reserve had a positive balance of c3,163 thousand as at June 30, 2005, an increase of c4,425 thousand on the negative balance of c1,262 thousand recorded as the end of last year. This variation is due to the overall impact on consolidated shareholders' equity caused by converting the financial statements of foreign subsidiaries expressed in foreign currencies into euro, as well as by the respective consolidation adjustments. The Group exercised the exemption allowed under IFRS 1 First-time Adoption of International Financial Reporting Standards regarding the possibility of resetting to zero the accumulated gains or losses generated by the consolidation of foreign subsidiaries as at January 1, 2004 and therefore the translation reserve only includes the translation gains or losses generated after the date of transition to IFRS. The following table shows the income and expenses recognized directly in the shareholders' equity in the first half of 2005: Gain on sale of treasury shares Cash flow hedge reserve movements Exchange rate differences from conversion of financial statements denominated in foreign currency Total income (expenses) recognised directly in the equity 9 (1,511) 4,425 2,923

The reconciliation between the net income and shareholders' equity of Saes Getters S.p.A. and the consolidated net income and consolidated shareholders' equity as at June 30, 2005

49

and December 31, 2004 is set out below (amounts in thousands of euro): June 30, 2005 Net Shareholders' Income Equity 20,028 120,743 December 31, 2004 Net Shareholders' Income Equity 19,321 125,988

Group's Parent Company Saes Getters S.p.A. Difference between the consolidated companies' shareholders' equity and the book value represented by the investment Net profit (losses) of the consolidated companiesnet of dividends distributed and investment writedowns Elimination of profits arising from inter-company transactions, net of the related tax effect Appropriation of deferred taxes related to subsidiaries' reserves for which is foreseeable distribution Other minor adjustments Consolidated accounts

52,942

60,223

(12,067)

(2,170)

641

(14,518)

730

(15,263)

(580) (14) 8,008

(2,781) (209) 156,177

(2,060) 326 16,147

(2,201) 503 169,250

In accordance with the new statutory rules governing financial statements, introduced as a result of the reform of company law (Legislative Decree 6/2003), all tax adjustments previously originated were eliminated in 2004 from the parent company's individual financial statements.

22. Investments in jointly controlled companies

All subsidiaries are wholly owned, except for the jointly controlled company Nanjing Saes Huadong Getters Co. Ltd., for which the proportional consolidation method applies. The Group's 65% stake in the assets, liabilities, income and expenses of the jointly controlled company Nanjing Saes Huadong Getters Co. Ltd., included in the consolidated financial statements according to the proportionate consolidation method, is shown below: Non current assets Current assets Total assets Shareholders' equity Non current liabilities Current liabilities Total liabilities and shareholders' equity June 30, 2005 4,807 6,896 11,703 11,067 0 636 11,703 December 31, 2004 4,577 7 ,392 11,969 11,006 0 963 11,969

50

Net sales Cost of sales Operating expenses Other income (expenses), net Non operating income (expenses) net Income before taxes Income taxes Net income

June 30, 2005 2,696 (1,598) (377) 2 12 735 (96) 639

June 30, 2004 3,489 (1,716) (376) 1 9 1,407 (109) 1,298

Non current liabilities

23. Non current financial liabilities

This item consists of subsidized credits from the special applied research fund granted to the parent company by the Ministry of Productive Activities through the bank SanPaolo IMI. The maturities of the loans are shown below: Less than 1 year Between 1 and 5 years Over 5 years Total June 30, 2005 December 31, 2004 254 255 2,475 2,352 1,089 1,339 3,818 3,946 Difference (1) 123 (250) (128)

The average rate on June 30, 2005 was 1.20%.

24. Deferred tax liabilities

This item consists of the provision for deferred taxes owed in the event of the distribution of the profits and reserves of the subsidiaries, excluding those relating to profits and reserves that are not considered likely to be distributed in the foreseeable future. The increase since December 31, 2004 was due to the higher profits accumulated by the subsidiaries as a consequence of the results of the period, partially offset by their use in respect of taxes and withholdings recorded upon receipt of the dividends collected during 2005 by the parent company and by Saes Getters International Luxembourg S.A.

25. Staff leaving indemnity and similar obligations

It should be noted that this item includes liabilities to employees under both defined contribution and defined benefits plans existing in certain Group companies in accordance with the contractual and legal obligations existing in Italy, Japan and Korea.

51

Changes occurred during the period were as follows: Balance at January 1, 2005 Provision for the period recorded in the income statement Indemnities paid during the period Differences arising from the translation of financial statements denominated in foreign currencies Balance at June 30, 2005 The amounts recognized in the income statement are broken down as follows: Current service cost Interest cost (defined benefit plans) Net actuarial losses (gains) recognised in the period Provision for the period recorded in the income statement 778 161 (2) 937 9,959 937 (403) 242 10,735

The obligations relating to defined benefit plans are measured annually by independent actuarial consultants according to the Projected Unit Credit Method, separately applied to each plan. The reconciliation as at December 31, 2004 is shown below: Present value of defined benefit obligations Fair value of plan assets Unrecognised actuarial (gains) losses Expenses from past service cost not yet recognised Accounting liabilities in respect of defined benefit obligations Accounting liabilities in respect of defined contribution obligations Staff leaving indemnity and similar obligations at December 31, 2004 8,408 0 (73) 0 8,335 1,624 9,959

The main assumptions used for the actuarial valuation as at December 31 2004 of the defined benefits plans are given below: Discount rate Expected salary increase rate Italy 4.0% 3.0% Japan 2.5% 2.0% Korea 5.0% 4.5%

The number of employees as at June 30, 2005 was 882 (of which 360 are employed outside Italy). This reflects a decrease in headcount of 3 compared with December 31, 2004 and 56 compared with June 30, 2004. As at June 30, 2005, the Group's employees were distributed as follows:
June 30, 2005 December 31, 2004 Average six months ended June 30, 2005 Average six months ended June 30, 2004

Managers Employees and middle management Workers Total

61 416 405 882

58 414 413 885

60 416 411 887

66 477 437 980

It should be noted that the headcount at the jointly controlled company Nanjing Saes Huadong Getters Co. Ltd. amounted to 102 as at June 30, 2005 (of which 8 managers, 33 employees and middle managers and 61 workers). This headcount is included in the consolidated financial statements on the basis of percentage stake held by the Group (65%).

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26. Provisions
The composition of these provisions and the related changes are set out below: January 1, 2005 Provision for warranty on products sold Provision for penalties Other provisions Total 185 80 817 1,082 Provisions Uses Conversion June 30, differences 2005 26 11 29 66 256 91 53 400

77 77

(32) (793) (825)

The decrease in the item Other provisions was mainly due to the use of the provision (totaling c443 thousand as at December 31, 2004 and c21 thousand as at June 30, 2005 respectively) set aside for the liabilities expected in the liquidation of the residual assets of the indirectly controlled subsidiary New Trace Analytical, Inc. (formerly Molecular Analytics, Inc.). The table below distinguishes between provisions included amongst current and non-current liabilities: Current provisions Non current provisions Total June 30, 2005 114 286 400 December 31, 2004 867 215 1,082 Difference (753) 71 (682)

Current liabilities

27. Trade payables

These amounted to c9,661 thousand for the period ended June 30, 2005, down by c242 thousand compared with December 31, 2004. There are no trade payables represented by bills. All trade payables fall due within one year and arise from commercial transactions.

28. Other payables

The item Other payables included amounts that are not strictly of trade nature and amounted to c10,063 as at June 30, 2005 compared with c10,428 thousand as at December 31, 2004. These may be broken down as follows: Payables to employee (holidays, wages and staff leaving) Insurance premiums payable Social security payables Tax payables (excluding income taxes) Other Total June 30, 2005 4,947 50 1,757 1,029 2,280 10,063 December 31, 2004 4,412 72 1,886 2,124 1,934 10,428 Difference 535 (22) (129) (1,095) 346 (365)

53

The item Payables to employees includes accruals made during the year for holidays, extra monthly wages and, for Italian companies, wages and salaries for the month of June. The increase in the item Payables to employees as at June 30, 2005 compared with the end of last year is mainly due to the recognition of the accrued quota of the extra monthly salaries by the Group's Italian companies and to the higher amount of provisions for holidays, partially offset by the settlement of the amounts payable in respect of staff leaving indemnity by the parent company. The item Social security payables mainly consists of amounts payable by the Group's Italian companies to the INPS (Italian social security system) as employer's contributions. The item Tax payables (excluding income taxes) as at December 31, 2004 included the appropriation (of c745 thousand) for withholding taxes on the dividends distributed in December 2004 by the subsidiary Saes Getters Korea Corporation. These withholding taxes were paid during the first half of 2005. These payables are all due within one year.

29. Accrued income taxes

As at June 30, 2005, this item amounted to c4,239 thousand, down by c1,328 thousand on the figure for the end of last year. The balance is expressed net of income tax advances of c1,628 thousand, paid by the subsidiary Saes Advanced Technologies S.p.A. to the parent company S.G.G. Holding S.p.A. as part of the subscription to the national tax consolidation system. Tax payables are all payable within one year.

30. Derivative financial instruments evaluated at fair value (cash flow hedge)
This item includes the liabilities arising from the fair value measurement of hedges against changes in cash flows originated by future foreign exchange sale transactions, which are mainly inter-company in nature, expected during the current and following year. These hedges are recognized according to the cash flow hedge model. The comparative figures relating to last year do not include the effect of IAS 32 Financial instruments: Disclosure and presentation and IAS 39 Financial instruments: Recognition and measurement, after defining January 1, 2005 as being the transition date for their application. If IAS 32 and IAS 39 had been applied for the period under comparison, the value of the receivables or payables as at December 31, 2004 arising from the fair value measurement of hedges to protect from changes in cash flows originated by future foreign exchange sale transactions existing at the end of last year would have been determined. .

31. Bank overdraft

This item consists of liabilities arising from overdrafts on transfer accounts held with banks. The lower amount compared with December 31, 2004 is mainly due to the repayment of financial payables by the US subsidiaries FST Consulting International, Inc. and Saes Pure Gas,

54

Inc., partially offset by the greater level of bank borrowing by the Japanese subsidiary and by the depreciation of the euro against the major foreign currencies. Bank overdraft was expressed in US dollars and Japanese yen.

32. Accrued liabilities

These can be broken down as follows: Accrued expenses: - Interest payables - Other accrued expenses Total accrued expenses Deferred income Total accrued expenses and deferred income June 30, 2005 1 692 693 1,750 2,443 December 31, 2004 3 497 500 1,960 2,460 Difference (2) 195 193 (210) (17)

The item Deferred income included the part relating to future years (c1,322 thousand) of the capital grant allowed by the Ministry of the Treasury, Budget and Economic Planning to Saes Advanced Technologies S.p.A. in relation to investments made in previous years. The decrease in this item since December 31, 2004 was due to the reduction in the above deferred income on grants in relation to the amount pertaining to the first half of 2005.

33. Fair value of financial assets and liabilities

As prescribed in IAS 32, a comparison is given between the value entered in the balance sheet as at June 30, 2005 and the fair value of financial assets and liabilities, as follows: Book Value 1,155 30,119 39 8,342 75,595 Fair Value 1,155 30,119 39 8,342 75,595 3,564 10,185 9,661 602 2,514 254

Financial assets Other long term assets Trade receivables Financial receivables Prepaid expenses, accrued income and other Cash and cash equivalents

Financial liabilities Non current financial liabilities 3,564 Other payables (non current and current) 10,185 Trade payables 9,661 Derivative financial instruments evaluated at fair value (cash flow hedge) 602 Bank overdraft 2,514 Current portion of long term debt 254

55

34. Statement of cash flow

The funds generated by operating activities were c13,096 thousand compared with c14,683 thousand in the same period last year. The decrease is mainly due to lower income in the period and to the increase in taxes paid, partially offset by the change in the net working capital. The funds used in investing activities totaled c4,340 thousand, an increase on the figure of c582 thousand in the same period last year. This growth is mainly due to larger investments in property, plant and equipment. The funds used in financing activities increased from c3,642 thousand in the first half of 2004 to c22,797 thousand in the first half of 2005. This change is mainly attributable to the payment of higher dividends compared with the same period last year. Net cash and cash equivalents are stated net of Bank overdraft, insofar as the latter falls under the category of liabilities to be repaid on request by the bank. A reconciliation is given below between the cash and cash equivalents indicated in the balance sheet and what is shown in the cash flow statement. Cash and cash equivalents Bank overdraft Cash and cash equivalents, net June 30, 2005 75,595 (2,514) 73,081

The comparative figures relating to last year do not include the effect of IAS 32 Financial instruments: Disclosure and presentation and IAS 39 Financial instruments: Recognition and measurement, after defining January 1, 2005 as being the transition date for their application. If IAS 32 and IAS 39 had been applied for the period under comparison, the net cash and cash equivalents would have been stated net of treasury shares, i.e. c70,216 thousand as at June 30, 2004 and c84,400 thousand as at December 31, 2004.

35. Commitments and contingencies

The following table shows the guarantees provided by the Group to third parties and other off balance-sheet items: June 30, 2005 Guarantees in favour of third parties Forward exchange contracts 13,122 27 ,929 December 31, 2004 14,658 19,945 Difference (1,536) 7 ,984

The item Guarantees in favour of third parties was mainly made up of guarantees given to the VAT Office (c12,971 thousand, compared with c14,123 thousand as at December 31, 2004) to guarantee refunds applied for. The maturities for operating lease payments in force as at June 30, 2005 are shown below: Less than 1 year 47 Between 1 and 5 years 58 Over 5 years 0 Total 105

Operating lease obligations

The guarantees provided by the Group in respect of credit facilities, in the interest of subsidiaries, which were not utilized on the reporting date, were c23,035 thousand as at June 30, 2005 (compared with c24,616 thousand as at December 31, 2004).

56

The item Forward exchange contracts included the counter-value of transactions performed to hedge against the risks of fluctuation in the exchange rates in effect on the balance-sheet date. These transactions, implemented by the parent company and by the subsidiary Saes Advanced Technologies S.p.A., consist of forward contracts on the US dollar and on the Japanese yen, associated with credits outstanding on the reporting date and with future credits, relating to sales in US dollars and Japanese yen. These contracts will extend to the 2005 and 2006 financial year. As regards contracts on the US dollar, the spot exchange rate fixed with credit institutions is 1.2329 to the euro and 1.2565 to the euro for transactions respectively implemented in the periods 2005 and 2006. As regards contracts on the Japanese yen, the spot exchange rate fixed is 135.47 to the euro.

36. Related party disclosures

As regards transactions with Related Parties, consultancy services were provided in fiscal, legal and corporate matters by K Studio Associato for a total cost of c84 thousand in the first half of 2005. The above relationship was entered into under economic and financial conditions in line with market conditions. Following the subscription to the national tax consolidation system by the Group's Italian companies with the parent company S.G.G. Holding S.p.A., Saes Getters S.p.A. and its subsidiary Saes Advanced Technologies S.p.A. as at June 30, 2005 have receivables from S.G.G. Holding S.p.A. of c3,238 thousand and c1,628 thousand respectively. The above reveals that the directors have complied with the requirements laid down by Consob in its Communications of February 20, 1997 February 27 1998, March 2, 1998 and September , , 30, 2002.

37. Events after the balance sheet date and business performance outlook
On July 18, 2005, a preliminary contract was signed to acquire a 30% investment in the company Scientific Materials Europe S.r.l., based in Tortol, Nuoro, Italy. This company is engaged in the production, manufacturing and marketing of synthetic crystals for industrial and research laser applications. The purchase price is approximately c0.5 million and will be paid in cash. The company posted net sales of c0.6 million in 2004. As part of the strategy of ditching non-synergic businesses and focusing on profitable activities, the Group sold the subsidiary FST Consulting International, Inc. (hereinafter FST) based in San Luis Obispo, California (USA) to Mr. David Ladd with effect from July 29, 2005. The company is engaged in the installation of towers for the telecommunications sector. It should be recalled that FST was also engaged in providing quality control and certification services for the semiconductor market, and the respective assets were sold on April 1, 2004. The selling price, after a partial reduction and distribution of capital stock to the parent company Saes Getters International Luxembourg S.A. in the amount of $2.1 million, was $0.3 million in cash. The capital loss arising from the sale was c328 thousand. In 2004, FST posted gross sales of $10,867 thousand (c8,743 thousand) and a net loss of $667 thousand (c537 thousand). In 2005, until the transfer date, the company posted gross sales of $4,819 thousand (c3,786 thousand at the average progressive exchange rate on the transfer date) whereas the net loss on the transfer date was $313 thousand (c245 thousand). The Group's economic result will continue to be influenced by exchange rates of the Euro against the major currencies. Transactions were also concluded to hedge against the exchange

57

rate risk vis--vis the US dollar and the Japanese yen, with a view to protecting the Group's margins against fluctuations in exchange rates. The company is confident about the prospects for the second half of 2005. In particular, compared with the second half of 2004, the forecast is for growth in sales of products for liquid crystal displays but a drop in sales of getters for cathode ray tubes owing to the maturity of the market. Other relevant industrial markets in which the Group operates should confirm overall stability or growth. Activities will also continue to develop new products in the area of advanced materials, some of which are already being launched onto the market.

38. Transition to the IFRS international accounting standards

The reconciliations are given below for the balance sheet and income statement as required by IFRS 1 First-time Adoption of International Financial Reporting Standards, accompanied by explanatory notes on the principles adopted and the items that appear in the reconciliations. The balance sheet and income statement prepared according to the layouts required by the Legislative Decree No. 127/1991 have been restated in short form to comply with the presentation criteria which will be adopted to prepare IFRS financial statements. The standards adopted in the reconciliations presented may be different from the IFRS standards effective as at December 31, 2005, as a result of the European Commission's future guidance on the approval of the standards or the subsequent issue of new accounting standards, interpretations or implementation guidelines issued by the International Accounting Standards Board (IASB) or the International Financial Reporting Interpretation Committee (IFRIC). The auditing firm Reconta Ernst & Young S.p.A. completed the audits on the above reconciliations as of the transition date and as of December 31, 2004 and issued a report, on July 27 2005, certifying the conformity of the IFRS reconciliation statements with the criteria , and principles defined in Article 82-bis of the Regulations for Issuers.

58

Consolidated balance sheet reconciliation table as of the date of transition to IFRS (January 1, 2004) Notes January 1, 2004 Facultative Italian exemptions Gaap and mandatory exceptions Accounting January 1, 2004 standards IFRS differences on net equity

ASSETS Non current assets Property, plant and equipment, net Intangible assets, net Investments in share capital and other financial assets Deferred tax assets Other long term assets Total non current assets 1 2 3 59,261 4,369 0 11,735 1,181 76,546 18,518 26,744 0 14,128 5,192 70,404 134,986 211,532 5,151 (30) (1,925) 0 3,196 (3) 64,412 4,339 0 9,810 1,181 79,742 18,515 26,744 0 14,128 5,192 70,404 134,983 214,725

Current assets Inventory 4 Trade receivables Financial receivables Prepaid expenses, accrued income and other Investments in share capital and other financial assets Cash and cash equivalents Total current assets Total assets SHAREHOLDERS' EQUITY AND LIABILITIES Capital stock Conversion reserve Other reserves Net income (loss) Total shareholders' equity

0 0

(3) 3,193

12,220 (2,003) 150,059 (5,498) 154,778 2,574 0 10,190 0 98 12,862 154,778 10,594 9,516 3,922 1,655 0 14,410 172 3,623 43,892 211,532

2,003 (2,003) 0

3,057 3,057

12,220 0 151,113 (5,498) 157,835 2,574 298 10,028 0 98 12,998 157,835 Total 10,594 9,516 3,922 1,655 0 14,410 172 3,623 43,892 214,725

Non current liabilities Non current financial liabilities Deferred tax liabilities 6 Staff leaving indemnity and similar obligations 7 Non current provisions Other payables Total non current liabilities Tota Total shareholders' equity 5 Current liabilities Trade payables Other payables Accrued income taxes Current provisions Derivative financial instruments evaluated at fair value (cash flow hedge) Bank overdraft Current portion of long term debt Accrued liabilities Total current liabilities Total liabilities and shareholders' equity

298 (162) 0 0 136 3,057

0 0

0 3,193

59

Consolidated balance sheet reconciliation table as of December 31, 2004 Notes December 31, 2004 Italian Gaap Facultative exemptions and mandatory exceptions Accounting December 31, 2004 standards IFRS differences on net equity

ASSETS Non current assets Property, plant and equipment, net Intangible assets, net Investments in share capital and other financial assets Deferred tax assets Other long term assets Total non current assets 1 2 3 54,929 3,604 0 10,833 1,104 70,470 15,492 28,581 1 7,926 2,505 87,511 142,016 212,486 4,840 (18) (1,874) 0 2,948 244 59,769 3,586 0 8,959 1,104 73,418 15,736 28,581 1 7,926 2,505 87,511 142,260 215,678

Current assets Inventory 4 Trade receivables Financial receivables Prepaid expenses, accrued income and other Investments in share capital and other financial assets Cash and cash equivalents Total current assets Total assets SHAREHOLDERS' EQUITY AND LIABILITIES Capital stock Retained earnings Net income (loss) Total shareholders' equity Non current liabilities Non current financial liabilities Deferred tax liabilities Staff leaving indemnity and similar obligations Non current provisions Other payables Total non current liabilities Current liabilities Trade payables Other payables Accrued income taxes Current provisions Derivative financial instruments evaluated at fair value (cash flow hedge) Bank overdraft Current portion of long term debt Accrued liabilities Total current liabilities Total liabilities and shareholders' equity

0 0

244 3,192

12,220 137,826 16,141 166,187 3,691 2,213 10,121 215 124 16,364 9,903 10,428 2,911 867 0 3,111 255 2,460 29,935 212,486

3,057 6 3,063

12,220 140,883 16,147 169,250 3,691 2,504 9,959 215 124 16,493 9,903 10,428 2,911 867 0 3,111 255 2,460 29,935 215,678

6 7

291 (162) 0 129

0 0

0 3,192

60

Consolidated balance sheet reconciliation table as of June 30, 2004 June 30, 2004 Facultative Italian exemptions Gaap and mandatory exceptions Accounting standards differences on net equity June 30, 2004 IFRS

Notes

ASSETS Non current assets Property, plant and equipment, net Intangible assets, net Investments in share capital and other financial assets Deferred tax assets Other long term assets Total non current assets Current assets Inventory Trade receivables Financial receivables Prepaid expenses, accrued income and other Investments in share capital and other financial assets Cash and cash equivalents Total current assets Total assets SHAREHOLDERS' EQUITY AND LIABILITIES Capital stock Retained earnings Net income (loss) Total shareholders' equity Non current liabilities Non current financial liabilities Deferred tax liabilities Staff leaving indemnity and similar obligations Non current provisions Other payables Total non current liabilities Current liabilities Trade payables Other payables Accrued income taxes Current provisions Derivative financial instruments evaluated at fair value (cash flow hedge) Bank overdraft Current portion of long term debt Accrued liabilities Total current liabilities Total liabilities and shareholders' equity 12,220 140,863 10,048 163,131 2,330 0 10,427 263 98 13,118 8,579 10,045 4,248 963 0 12,007 244 3,418 39,504 215,753 3,057 30 3,087 12,220 143,920 10,078 166,218 2,330 292 10,268 263 98 13,251 8,579 10,045 4,248 963 0 12,007 244 3,418 39,504 218,973 1 2 3 55,815 3,932 0 12,097 1,211 73,055 17,240 31,848 37 8,845 5,201 79,527 142,698 215,753 4,994 (22) (1,891) 0 3,081 139 60,809 3,910 0 10,206 1,211 76,136 17,379 31,848 37 8,845 5,201 79,527 142,837 218,973

0 0

139 3,220

6 7

292 (159) 0 133

0 0

0 3,220

61

Notes to the balance sheet reconciliations

1. Property, plant and equipment: by applying the finance method to leasing transactions, as prescribed by IAS 17 the net book value of property, plant and equipment acquired under , leases by the Group's Italian companies was recognized in opening equity according to IFRS. As at December 31, 2003, all leases were terminated, financial liabilities were settled and assets redeemed. The difference between the values of property, plant and equipment recognized according to Italian accounting principles and those determined according to international accounting standards on the dates of December 31, 2004 and June 30, 2004 consists of the net book value of the assets recognized on the date of transition to IFRS, less depreciation for the year 2004 and for the first half of 2004 respectively. Under Italian accounting principles, no asset was recognized until the moment of redemption in respect of finance leases, while disclosure on the effects of the finance method was given in the accompanying notes. 2. Intangible assets: in accordance with IAS 38, some categories of costs such as start-up and expansion did not meet the conditions to be recognized as an intangible asset. The residual values on the date of transition to IFRS were therefore eliminated. The difference between the values of intangible assets on the dates of December 31, 2004 and June 30, 2004 respectively also reflected depreciation for the year 2004 and for the first half of 2004 respectively according to Italian accounting principles 3. Deferred tax assets: the difference on the dates of January 1, 2004, December 31, 2004 and June 30, 2004 included the tax effect generated by restatements for the application of IFRS on the respective dates 4. Inventory: the difference in relation to Italian accounting principles included the effect of the measurement based on the percentage of completion method for construction contracts in force at the parent company, in accordance with IAS 11, totaling c1 thousand on the date of transition to IFRS, compared with c252 thousand as at December 31, 2004 and c151 thousand as at June 30, 2004. This positive effect was partially offset by the write down of the value of spare parts entered as stock and not capitalizable in accordance with IAS 2 5. Shareholders' equity: the total amount of adjustments owing to different accounting principles on the transition date of January 1, 2004 was c3,057 thousand and was posted to a reserve, in accordance with IFRS 1. The differences generated after the date of transition to IFRS have had an effect on the income for the period. It should be noted that there was a reclassification from the translation reserve to other reserves in the negative amount of c2,003 thousand, as a result of the Group's decision to elect the optional exemption contained in IFRS 1, which allows the possibility of resetting to zero the accumulated gains or losses generated by the consolidation of foreign subsidiaries on the date of transition to IFRS. Gains or losses relating to possible disposals of foreign subsidiaries after January 1, 2004 will only include the translation differences generated after the date of transition to IFRS. 6. Deferred tax liabilities: the restatement was due to the tax effect generated by the application of IAS 17 by one of the Group's Italian companies. 7 Staff leaving indemnity and other employee benefits: in accordance with IAS 19, the . benefits for employees in the category of defined benefit plans were treated according to the actuarial methodology. Such measurement reduced the opening liability by c162 thousand at Group level, whereas the impact on the income for 2004 was not significant.
62

Consolidated income statement reconciliation table as of December 31, 2004 2004 Italian Gaap 141,649 (69,913) 71,736 R&D expenses (13,428) Selling expenses (15,966) G&A expenses (13,255) Total operating expenses (42,649) Other income (expenses), net (387) Operating income 28,700 Interest and other financial income, net 1,473 Foreign exchange gains (losses), net (1,133) Income before taxes 29,040 Income taxes (12,899) Net income 16,141 Net sales Cost of sales Gross profit Accounting standards differences 2004 IFRS

155 155 (129) (3) (72) (204) (49) (49) 55 6

141,649 (69,758) 71,891 (13,557) (15,969) (13,327) (42,853) (387) 28,651 1,473 (1,133) 28,991 (12,844) 16,147

Consolidated income statement reconciliation table as of June 30, 2004 2004 1st Half Italian Gaap 72,847 (36,344) 36,503 R&D expenses (6,459) Selling expenses (8,061) G&A expenses (6,543) Total operating expenses (21,063) Other income (expenses), net 412 Operating income 15,852 Interest and other financial income, net 456 Foreign exchange gains (losses), net 68 Income before taxes 16,376 Income taxes (6,328) Net income 10,048 Net sales Cost of sales Gross profit Accounting standards differences 2004 1st Half IFRS 72,847 (36,251) 36,596 (6,525) (8,063) (6,580) (21,168) 412 15,840 456 68 16,364 (6,286) 10,078

93 93 (66) (2) (37) (105) (12) (12) 42 30

63

Notes to the income statement reconciliations

A summary is given below of the accounting differences applicable to the income statement in relation to the year 2004 and to the first half of 2004 respectively.

2004 Italian Gaap

1 2 Financial Constuction lease contracts (IAS 17) (IAS 11)

3 4 5 Employee Intangible Spare benefits assets parts (IAS 19) writedown writedown (IAS 38) (IAS 2)

6 Tax eff. consolid. adj (IAS 12)

Total diff.

2004 IFRS

141,649 (69,913) 71,736 R&D expenses (13,428) Selling expenses (15,966) G&A expenses (13,255) Total operating expenses (42,649) Other income (expenses), net (387) Operating income 28,700 Interest and other financial income, net 1,473 Foreign exchange gains (losses), net (1,133) Income before taxes 29,040 Income taxes (12,899) Net income 16,141 2004 1st Half Italian Gaap

Net sales Cost of sales Gross profit

(110) (110) (129) (78) (207) (317)

251 251

4 4 (3)

10 10

0 0

0 251

(3) 1

6 6 16

0 0

0 0

155 155 (129) (3) (72) (204) (49)

141,649 (69,758) 71,891 (13,557) (15,969) (13,327) (42,853) (387) 28,651 1,473 (1,133) 28,991 (12,844) 16,147 2004 1st Half IFRS

(317) 117 (200)

251 (92) 159

1 1

16 (2) 14

0 0

0 32 32 6 Tax eff. consolid. adj (IAS 12)

(49) 55 6

1 2 Financial Constuction lease contracts (IAS 17) (IAS 11)

3 4 5 Employee Intangible Spare benefits assets parts (IAS 19) writedown writedown (IAS 38) (IAS 2)

Total diff.

Net sales Cost of sales Gross profit R&D expenses Selling expenses G&A expenses Total operating expenses Other income (expenses), net Operating income Interest and other financial income, net Foreign exchange gains (losses), net Income before taxes Income taxes Net income

72,847 (36,344) 36,503 (6,459) (8,061) (6,543) (21,063) 412 15,852 456 68 16,376 (6,328) 10,048

(57) (57) (66) (39) (105) (162)

150 150

0 (2)

6 6

(6) (6)

0 150

(2) (2)

2 2 8

0 (6)

0 0

93 93 (66) (2) (37) (105) (12)

72,847 (36,251) 36,596 (6,525) (8,063) (6,580) (21,168) 412 15,840 456 68 16,364 (6,286) 10,078

(162) 59 (103)

150 (56) 94

(2) 1 (1)

8 (1) 7

(6) 1 (5)

0 38 38

(12) 42 30

64

1. By applying the finance method to leasing transactions, as prescribed by IAS 17 the , depreciation of property, plant and equipment was recognized according to the respective depreciation schedules. According to Italian accounting principles, the lease payment was booked for the quota attributable to the period. On the date of transition to IFRS (December 31, 2003), all lease contracts were terminated. Consequently, no other economic impacts arising from the transition to IFRS were recorded. 2. In accordance with IAS 11, construction contracts specifically for the production of tangible assets for certain customers are measured according to the percentage of completion method. The respective margin was therefore recognized. According to Italian accounting principles, the construction contracts undertaken by the parent company were measured at cost and the margin was recognized when invoiced. 3. In accordance with IAS 19, the benefits for employees in the category of defined benefit plans were treated according to the actuarial methodology. The effects on the income statement of the various Group companies affected are not significant. 4. Amortization of start-up and expansion costs recorded according to Italian accounting principles which do not meet the requirements for recognition as an intangible asset according to IAS 38 was eliminated. 5. Spare parts entered as stock and not capitalizable according to IAS 2 were written down. 6. In accordance with IAS 12, the rate applied in the calculation of deferred tax assets associated with consolidation adjustments for the elimination of the unrealized margin in the inventories acquired by Group companies, is that of the purchasing company, whereas under Italian accounting principles, the rate in force in the seller's country was applied. The reconciliation between net income according to Italian accounting principles and net income according to IFRS is shown in the following table: 2004 Net income according Italian Gaap Depreciation of tangible fixed assets acquired by means of finance leases contracts (IAS 17) Evaluation of construction contracts on the basis of the percentage of completion (IAS 11) Elimination of amortization of intangible assets written down (IAS 38) Actuarial evaluation of defined benefit plans in favour of employees (IAS 19) Write down of spare parts in inventory (IAS 2) Tax effects on the above adjustments Different calculation of tax effects on adjusments to eliminate intercompany profit on inventory acquired from Group companies (IAS 12) Net income according IFRS 16,141 (317) 251 16 1 0 23 1st Half 2004 10,048 (162) 150 8 (2) (6) 4

32 16,147

38 10,078

There is no significant impact on the cash flow statement for the year 2004 owing to IFRS transition.

65

39. Scope of consolidation

The following table shows the companies included in the scope of consolidation according to the full consolidation method: Currency Capital Stock % Ownership Direct Indirect

Company Directly-Controlled subsidiaries: Saes Advanced Technologies S.p.A. Avezzano, LAquila (Italy) Saes Getters Usa, Inc. Colorado Springs (Colorado - USA) Saes Getters Japan Co. Ltd. Shinagawa - Tokyo (Japan) Saes Getters (GB) Ltd. Daventry (UK) Saes Getters (Deutschland) GmbH Cologne (Germany) Saes Getters Singapore Pte Ltd. Singapore Saes Getters International Luxembourg S.A. Luxembourg Indirectly-controlled subsidiaries: Through Saes Getters Usa, Inc.: Saes Pure Gas, Inc. San Luis Obispo (California - USA)

Euro $ USA Yen GBP Euro $Sing. Euro

2,600,000 9,250,000 20,000,000 20,000 52,000 300,000 11,312,777

100,00 100.00 100.00 100.00 100.00 100.00 99.92

0.08*

$ USA

7 ,612,661

100.00

Through Saes Getters International Luxembourg S.A.: Saes Getters Korea Corporation Seoul (Korea) Won Saes Getters Technical Service (Shanghai) Co., Ltd. Shanghai (Peoples Repubblic of China) $ USA New Trace Analytical, Inc. Baltimore (Maryland - USA) $ USA FST Consulting International, Inc. San Luis Obispo (California - USA)** $ USA Saes Getters Ireland Limited Dublin (Ireland)*** Euro
* % held by Saes Advanced Technologies S.p.A. ** sold on July 29, 2005 *** put into liquidation procedure

10,497 ,900,000 4,100,000 22,000,000 10,500,000 -

37 .48 -

62.52 100.00 100.00 100.00 100.00

66

The following table shows the company included in the scope of consolidation according to the proportionate consolidation method: Company Nanjing Saes Huadong Getters Co. Ltd. Nanjing (Peoples Repubblic of China) Currency $ USA Capital Stock 13,570,000 % Ownership Direct Indirect 65.00 -

40. Exchange rates used in the conversion of financial statements expressed in foreign currency
The following table shows the exchange rates applied in converting foreign financial statements: Expressed in foreign currency (per 1 euro) June 30, 2005 Average Final rate rate 1.284 1.209 136.189 133.950 1,303.726 1,239.850 10.633 2.116 39.674 0.686 10.008 2.038 38.211 0.674 December 31, 2004 June 30, 2004 Average Final Average Final rate rate rate rate 1.243 1.362 1.227 1.216 134.381 139.650 133.051 132.400 1,422.549 1,410.050 1,432.407 1,404.450 10.292 2.100 41.472 0.678 11.278 2.226 43.954 0.705 10.162 2.085 40.872 0.674 10.064 2.090 40.979 0.671

Currency US Dollars JPY Korean Won Renminbi (People's Republic of China) Singapore Dollars New Taiwan Dollars UK Pounds

Lainate (Milan), September 28, 2005 On behalf of the Board of Directors The Chairman Paolo della Porta

67

68