Milan, February 26 2004

1
STAR COMPANY RESULTS
Milan, February 26 2004
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Contents

• Equity Story
• Targetti Group and lighting market
• Key success factors market strategy and
  diversification
• Financials
• Business areas in 4Q03
• 2004 overview
• Back up slides

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TARGETTI SANKEYEquity Story
Official price (Feb 19 2004) Euro 3,13 2003
performance 0.9 Market cap. (millions
of euro) 55,4 No. of shares (millions)
17,7 Free float 32.99 2003 Max/Min
Euro 3,27 / 2,76 Payout Ratio
97/03 gt 40 Free Cash Flow 2003 / Mkt
Cap. 6.00

• Leading group in architectural lighting for
  interiors and exteriors
• Technological driver, product innovation and
  brand recognition
• Growing turnover, even in a difficult market
• Diversification as a response to cyclicity

2001
2000
1999
1998
1997
2002
2003
Euro/000
101,298
79,194
60,116
54,602
128,314
Revenues
130,240
131,678
16,583
20,846
13,460
13,005
9,530
8,652
EBITDA
16,340
9,296
7,903
9,421
7,158
9,096
13,828
EBIT
9,701
3,319
5,322
2,591
4,135
3,494
2,742
Net Profit
7,437
Not audited EBT
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TARGETTI SANKEYLighting market an overview

• 2002 European Lighting Market

10.5 billion Euro

• 2003 sentiment

another negative year on European basis

• Breakdown per European countries

• Progressive shift of market

Source CSIL
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TARGETTI SANKEYLighting market different
sectors
INDUSTRIAL
DECORATIVE

• Highly fragmented
• (several small players)
• Low barriers
• Low efficiency
• Strong specialization
• Italian leadership

• Consolidated market
• High barriers
• High efficiency
• Low prices and margins
• High volumes

HISTORICALLY

• Strictly affected by
• fashion/luxury cycle
• Lower margins
• Fierce competition

• Lower margins
• Further consolidation
• Product perception
• as a commodity

TREND
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TARGETTI SANKEYIndoor and Outdoor Architectural
Lighting
CITY BEAUTIFICATION ARCHITEINMENT

• Macroeconomic Drivers

- Public Expenditure - Real Estate Market -
Consumer Confidence - GNP - Tourism -
Wellness and Entertainment Needs
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TARGETTI SANKEYMarket strategy 3 ways to
approach the client
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TARGETTI SANKEYRelevant Corporate Clients
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TARGETTI SANKEYSales breakdown in 2003
REVENUES per main BUSINESS AREAS, as of Dicember
31, 2003
(millions of Euro)
LIGHTING SOURCES 17.2 mln (13.1)
EXTERIORS and PUBLIC LIGHTING 42.0 mln (31.9)
INTERIOR LIGHTING 68.5 mln (52.0)
Note Other residual businesses (Duratel) account
for 4.0 mln (3.0)
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TARGETTI SANKEYFinancials

• Consolidated Income Statement (Full Year)
• Quarter results
• EBITDA Contribution
• Consolidated Balance sheet
• Cash Flow generation and Financial Structure

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TARGETTI SANKEYConsolidated Income Statement
(Full Year)
03/02
2003
1999 2000 2001
2002 REVENUES 79.2 101.3
128.3 130.2 EBITDA 13.0
13.5 16.6 20.8 (as of
revenues) 16.4 13.3
12.9 16.0 Goodwill
(0.5) (1.2) (1.3)
(1.3) Depreciat. and Provis.
(3.1) (4.3) (6.0)
(5.7) EBIT
9.4 7.9 9.3
13.8 (as of revenues)
11.9 7.8
7.2 10.6 EBT
8.0 6.7
7.1 11.4 (as of
revenues) 10.1 6.6
5.5 8.8 NET PROFIT
4.1 2.6
3.3 5.3 (as of
revenues) 5.2
2.6 2.6 4.1
131.7
1.1
- 21.6
16.3 12.4
(1.6) (5.1)
(millions of Euro)
9.7 7.4
- 29.8
- 35.0
7.4 5.6
Not audited
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TARGETTI SANKEYQuarter Results
2002
2003
Q1 Q2 Q3 Q4
Q1 Q2 Q3 Q4
Revenues
31.3 35.9 30.8 32.2
31.2 32.3 29.7 37.6
(millions of Euro)
EBITDA EBITDA margin EBIT EBIT margin EBT
3.4 4.0 3.4 5.4 10.9
12.5 11.6 14.3 1.8 2.5
1.9 3.4 5.8 7.6
6.5 9.2 1.2 1.4
1.5 3.2
3.5 7.5 6.3 3.5 11.2
20.8 20.4 10.9 1.7 5.6
4.6 1.6 5.5 15.6 14.9
5.0 1.1 4.5 4.4 0.9

• Relevant recovery in marginality in 4Q03, mainly
  driven by strong
• revenues

Not audited
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TARGETTI SANKEYEBITDA Contribution
20.8
4Q
16.6
17
16.3
4Q
30
30
3Q
33
(millions of Euro)
32
3Q
21
36
2Q
21
25
2Q
17
1Q
1Q
17
21
1Q
2001
2002
2003
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TARGETTI SANKEYConsolidated Balance Sheet
1999 2000 2001 2002
2003 NWC 21.4 26.2 40.5 44.2 51.4
Fixed Assets
24.3 35.7 37.6 35.0 32.8 Capital Employed
42.1 58.0 72.6 73.3 77.9
Shareholders Equity 30.3 37.6 43.9 47.1
53.1 Net Financial
Debt 11.7 20.4 28.7 26.2 24.7
(millions of Euro)

• Progressive improve of NFP (1.5 M from 2002 4.0
  M from 2001)

Not audited
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TARGETTI SANKEYCash flow generation and
Financial Structure
Healthy Financial Structure
2001 2002 2003 D/E 0.65 0.56 0.47
High cash flow generated for shareholders in 2002
and 2003 (millions of Euro) 2002
2003 Improve of NFP 2.5 1.5 Dividends
1.4 1.8 3.9 3.3
Despite two difficult years, both on
macroeconomic and industry side, Targetti Group
strengthened its cash flow generation and
financial structure
before 2003 income taxes
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TARGETTI SANKEYBusiness areas in 4Q03
1. Interior Architectural Lighting 2.
Exteriors and Public Lighting 3. Lamps
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TARGETTI SANKEYInterior Architectural Lighting
4Q02 4Q03 var.
FY2002 FY2003 var.

• Revenues 18.3 19.0 3.8
• EBITDA 1.7 2.6
  52.9
• EBITDA margin 9.3 13.7

79.5 68.5 - 13.8
(millions of Euro)
14.3 7.4 - 48.3
18.0 10.8

• Difficult market conditions and price competition
  affected volumes and margins in FY2003
• Slight increase in revenues (but strong increase
  in marginality) in 4Q03
• (for the first time after a few months)
• Positive effects from the re-organisation of
  Victoria - MLE
• (realized in 2H03)
• Accelerating in new interesting projects Lancia,
  Fiat and Alfa Romeo showrooms, Canton Airport

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TARGETTI SANKEYExteriors and Public Lighting
FY2002 FY2003 var.
4Q02 4Q03 var.

• Revenues 9.4 11.8
  26.3
• EBITDA 1.2 1.8 44.2
• EBITDA margin 13.2 15.1

35.3 42.0 18.7
(millions of Euro)
5.7 6.2 8.7
16.1 14.8

• Revenues keep on growing at fast pace
• (in a slightly growing market)
• Improve of marginality, also due to the growing
  impact of Exterieur Vert

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TARGETTI SANKEYLamps
FY2002 FY2003 var.
4Q02 4Q03 var.

• Revenues 3.5 5.7 64.5
• EBITDA 0.5 0.8 78.9
• EBITDA margin 13.5 14.7

12.3 17.2 39.4
(millions of Euro)
0.7 2.3 202.5
6.1 13.1

• Revenues and margins are still performing in
  excellent way
• Recovery in margins
• Consolidation of Chinese entities
• (which generate cash flow)

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TARGETTI SANKEY2004 overview

• Good 4Q03 results confirmed that
• - in a stagnant market, Targetti volumes are
  still growing
• - every business area is growing faster than
  the market
• - Targetti Group could quickly benefit of a
  (even slow) market recovery
• - brand recognition is strong

• At today, 2004 triggers are
• - strengthening manufacturing consolidation
• (moving production to more cost efficient
  areas)
• - consolidating market position in a weak
  market
• - exploiting new emerging markets
• (China / East Europe)

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TARGETTI SANKEYBack up slides

• Shareholders Structure
• Stock Performance
• Corporate Governance
• Contacts

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TARGETTI SANKEYShareholders Structure
Targetti Giampaolo 46.02 Domenico Neri Srl
15.25 Orlandi Antonio 5.74 Henderson
Investors 3.39 Nextra IM Sgr 2.92 Rest
of the market 26.68
Stock Option Plan (2003 2007) Relating
1.500.000 shares (8.5 of Share Capital).
Lock up agreement Domenico Neri Srl undertakes
not to sell its shares for a period of three
years since September 27, 2001.
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TARGETTI SANKEYStock performance (Jan 02 2003
Feb 19 2004)
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TARGETTI SANKEYCorporate Governance

• BOARD of DIRECTORS
• Chairman Giampaolo Targetti
• C.E.O. Lorenzo Targetti
• Alvaro Andorlini
• Directors Giancarlo Lippi
• Carlo Marchi
• Antonio Orlandi
• Domenico Neri
• Antonio Neri
• Luciano Sorbi
• Riccardo Varaldo
• Targetti Sankey joined the STAR segment in
  April, 01 2001.
• Indipendent Directors

Remuneration Committee Marchi, Orlandi, Varaldo
Internal Control Committee Marchi, Orlandi,
Varaldo
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TARGETTI SANKEYContacts
Fabio Norcini Ph. 39 055 37 91
299 E-mail f.norcini_at_targetti.it Investor
Relations Manager Web site www.targetti.it
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STAR COMPANY RESULTS
Milan, February 26 2004