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1
Projection 2004, Budget 2005 and Business Plan
2006-09 Growth in front of us From development of
Tetraconazole to launch of new products
Presentation to Financial Community Milan,
November 18-19, 2004
2
Contents
Strategic guide-lines Our products source for
growth Financial estimates Conclusions
3 - 8 - 16 - 27 -
7 15 26 29
3
Strategic guide-lines
4
Preamble to Business Plan1/2 the approach
REASONABLE EVOLUTION Results expected from
actions already finalised or being finalised
ORGANIC GROWTH 1 new molecule every 2 years in
RD pipeline

• PRUDENCE
• To expense all development costs of further new
  products
• Option sales USA/soybean not considered

5
Preamble to Business Plan2/2 policy of RD
capitalisation
Before Vietti Reform and IAS
After Vietti Reform and IAS
Costs for the development of new molecules
capitalised and depreciated immediately in 5
years Year by year, depreciation of capitalised
RD costs at launch, 60-80 of such costs
already depreciated
Costs for the develop. of new molecules can be
capitalised but are to be depreciated after
launch, in 10 years Progressive increase of
intangibles, with growth of civilistic profits
but with risk fully transferred to future years
ISAGROs policy focused on prudence and
responsibility
To expense costs for the develop. of further new
molecules from 2004-05
Thus, also generating fiscal benefits
6
Strategic guide-lines

• Proprietary molecules
• Further development of Tetraconazole sales in
  South America
• 4 new molecules (3 from synthesis, 1 biological)
  and
• 2 new copper-based products
• 3 further new molecules in pre-development, 1
  every 2 years

• Manufacturing activities
• Further development of manufacturing synergies
• Progressive internalisation of the production of
  proprietary products
• Rationalisations (break-even on lower volumes)

• Development of commercial presence
• On strategic markets
• Direct control of Registrations and Trademarks

7
Dimensions and competitive capacity

• Innovative, global, concentrated business
• Displacement/ replacement of existing products
• High segmentation (country/crop/disease)

I S A G R O Small Global Player with strategic
allies in distribution (also shareholders)

• Market spaces depending upon
• Having INNOVATIVE PRODUCTS
• Having ACCESS TO DISTRIBUTION
• Competition segment by segment

sugarbeet / JAPAN 43 sugarbeet / ITALY
13 sugarbeet / USA 43 coffee
/BRAZIL 8 cotton / INDIA 3
olive tree / ITALY 29 olive tree / SPAIN
10 vegetables / SPAIN 2 soybean /
BRAZIL 12 grapes / ITALY 22
ISAGRO MARKET SHARES
Year 2003 (soybean/BRAZIL 2004E)
8
Our products source for growth
9
From development of existing products...
Registrations
Obtained
Under way
23
Tetraconazole Copper Benalaxyl
109
19
155
FUNGICIDES
114
16
Dimethoate Pyrethroids
31
3
INSECTICIDES
3
22
2
27
Bio-stimulators
BIOLOGICALS
Pheromones
7
4
As at 31/10/04 Registrations for
Pheromones required only in some Countries (e.g.
Italy, Germany)
10
to launch of new products

• Development of new products fully in line with
  Nov. 2003 estimates
• In Europe, trend of increase of bureaucratic
  times for registration at local level

IR5878 Herbicide Launch in 2006
IR6141 Fungicide Launch in 2006

• 3 RD highly promising
• Herbicide
• Induction of resistance
• Special nutrition

Remedier Biological Launch in 2006
Innovative Research
Launch and sales at regime
Pre-development
Development
Copper W.G. Fungicide Launched in 2004
IR7592 and IR6396
Fungicide
Herbicide
Launch after 2010
IR5885 Fungicide Launch in 2008
Hydroxyde and ICC087 Fungicides Launch in 2006
Status as at 11/11/2004
Partially cannibalising Benalaxyl after 2007-08
11
The development of Tetraconazole

• Fungicide invented by Isagro Ricerca
• From 2003, further development of sales on
  soybean against Asian Rust in Brazil (2nd world
  producer) with perspectives of further diffusion
  in the USA (1st prod.), Argentina (3rd prod.) and
  other South-American countries - afterwards
  occurred
• In 2004, re-definition of production set-up
  (agreements with Oxon, DuPont, Solvay/Solexys and
  Caffaro) so to
• diversify and secure supply sources in the long
  run
• increase significantly available production
  capacity

Quantities Tons
43
Revenues million
1,893
1,337
1,001
27
20
400
210
110
2002
2003
2004E
2002
2003
2004E
Formulated product
Active ingredient
Production capacity before agreements of 360
tons/year forecasted 2004 sales of 400 tons
12
ASIAN RUST FUNGINE DISEASE ON SOYBEAN
Treated area

• endemic

• chronic

• destructive

Non treated area
Use of Tetraconazole - SÃO DESIDÉRIO, RODA VELHA,
BA, March 8th, 2003
13
Asian Rust in Brazil

• Infection begun in 2001 (spores transported via
  air from Asia)
• Mkt. share Tetraconazole in Brazil 12 (high
  efficacy with absence of resistence)

Estimate for current campaign
2003
Areas cultivated with soybean assumed stable in
2005-09
2002
2001
SABI/ COMTEX significant increase expected
Brazil estimated first produ- cer of soybean
by 2010 (October 22, 2004)
14
Asian Rust in USA

• MARKET
• USA first world producer of soybean
• First infected samples found in Louisiana in Nov.
  2004
• Annual market estimated prudentially at US 300
  million
• Great mobilisation of Universities and
  Institutions
• ISAGRO
• Temporary authorisation to sell application
  already made
• Estimated sales in USA on soybean not considered
  in Base Case

Source US Agriculture Department Source
Reuters, Pictet, Syngenta
15
New products
IR6141
REMEDIER

• Anti-peronosporic fungicide
• Target grape, potato, tomato
• Markets E, F, I, South America
• Launch in 2006
• Partially substituting Benalaxyl

• Biological fungicide
• Target vegetables, arboreous
• Markets E, I
• Launch in 2006
• Possible employment in Biological
• Agriculture

IR5878
IR5885

• Post-emergence herbicide
• Target rice (also OGM)
• Markets BRA, Far East, I, USA
• Launch in 2006
• High selectivity and excellent
• ecotox profile

• Anti-peronosporic fungicide
• (complementary to IR6141)
• Target grape, potato, tomato
• Markets E, F, I, MEX, USA
• Launch in 2008
• Excellent efficacy and ecotox
• profile

16
Financial estimates
17
2005-09 basic assumptions

• Inflation EU 2.50 in 2005 and 3.00 in
  2006-09
• India 6.00
• LME cost of Copper 2.100/ton
• Short term interest 4.50
• M/L term interest L 2.80 (weighted average
  between loan and borr. facilities)
• Exchange rates / 1.25
• INR/ 57.0
• Yen/ 134
• Dividends between 40 and 45 of net result
  (excl. extraord. items)
• Taxes IRAP 4.25 - IRES 33

(with a negative impact of 3m in 2005 vs. 2004,
assumed constant all over plan period, at EBITDA
level)
20 tax rate for fiscal relief in 2004-05
(following IPO) not considered, with retroactive
effect from 2003
18
Revenues evolutionBase case sales on
soybean/USA not considered
Sales development of new products with erosion of
existing prod.
million
Tetraconazole develop. in South America (soybean)
260
243
224
199
183
172
CAGR 12
153
193
CAGR 9
176
160
139
127
116
96
47
47
45
34
41
36
37
23
20
19
19
19
20
20
2003 2004E 2005E 2006E 2007E
2008E 2009E
Proprietary agropharma
Third parties agropharma
Other products/services
19
RD costs
million
15.5
14.5
14.3
13.9
0.9
13.2
13.4
0.9
12.7
3.4
1.1
2.8
1.5
2.5
11.5
10.4
9.3
8.3
8.2
8.2
8.0
3.1
2.9
3.0
3.0
2.8
2.9
2.8
2003 2004E 2005E
2006E 2007E 2008E 2009E
Memo 1 RD on revenues from proprietary
agropharma
13.8
12.5
11.0
9.1
8.3
8.1
8.0
Memo 2 RD capitalisations (/million)
9.9
8.2
6.4
3.0
0.7
-
-
Capitalisations
Development
Innovative research
Defence and others
20
Headcount and labour costs
26.8
25.7
25.0
24.5
23.9
23.3
23.1







744
744
738
738
733
741
745
22
22
22
16
22
14
9
256
257
248
272
292
282
292
461
462
488
444
430
434
430
2003 2004E 2005E
2006E 2007E 2008E
2009E
Headcount India
Headcount Italy
Labour costs ( million)
Headcount RoW
Excluding seasonal workers of Isam S.r.l.
21
Capex(Investments in tangible assets)
million
RD Centre in Novara Pilot plant for IR6141
WG Technology and plant for M-Alcohol
Plant for IR5878
Plant for IR5885
5.4
5.7
5.3
4.1
3.5
3.3
2.2
2003 2004E 2005E 2006E 2007E
2008E 2009E
Excluding investments in Bussi for the
production of Tetraconazole, covered by a
downpayment from Solvay/Solexys
Gross of write-offs
22
EBITDA Base case sales on soybean/USA not
considered
2003
2004
2005
2006E
2007E
2008E
2009E
million
CAGR
pro-forma
forecast
budget
RD expenses
(13.2)
(14.5)
(13.9)
(12.7)
(13.4)
(14.3)
(15.5)
of which capitalised
9.9


8.2


6.4


3.0


0.7


-

-


EBITDA
23.0


28.6


27.0


27.2


31.9


35.8


40.2


10
on revenues
15.0
16.6
14.8
13.7
14.2
14.7
15.5
Hedging on Copper
(0.7)
(3.0)
-


-


-


-


-


RD capitalisable but expensed
-


1.3


2.4


4.8


7.7


9.8


11.2



Normalised EBITDA
22.3


27.0


29.4


32.0


39.6


45.6


51.4


15
on revenues
14.6
15.6
16.1
16.1
17.6
18.8
19.7
Including effects of non speculative
hedging on Copper See also slide 5
23
EBITDA Upside/Downside
Upside sales soybean/USA high probability

• Annual market prudentially estimated at 300
  million
• Certainty of Asian Rust disease, high
  probability of obtaining registration to sell for
  Tetraconazole
• Achievable market share not lower than 10
  (yielding high margins)

Downside sales sugarbeet/USA low probability

• Risk no release of final/ no renewal of
  temporary authorisation to sell Tetraconazole
• Temporary authorisation released in 1998 and
  renewed year by year till 2004
• Share in the segment 43

Source Reuters, Pictet, Syngenta
24
Net result Base case sales on soybean/USA not
considered
2003
2004
2005
2006E
2007E
2008E
2009E
million
C
AGR
pro-forma
forecast
budget
EBIT
15.0


18.4


18.9


19.0


22.2


24.2


28.1


11
on revenues
9.8
10.7
10.3
9.5
9.9
10.0
10.8
Normalised EBIT
14.3


16.7


21.3


23.7


29.7


33f.7


39.0


18
Net result
5.8


8.0


7.8


7.6


9.5


10.9


13.3


15

on revenues
3.8
4.6
4.3
3.8
4.2
4.5
5.1
Normalizzato Net result
5.4


6.9


9.3


10.6


14.2


16.8


20.1



24

13.3


15.1


16.2


16.2


18.5


20.8


23.0


Cash flow
Dividends
1.6


2.9


3.2


3.4


4.0


4.8


5.6



Excluding extraordinary income as per
Vietti reform Net result depreciation
? deferred fiscal liabilities/(assets)
Between 40 and 45 of Net result (excl.
Extraordinary incomes) under payment in the
following year
25
Financial structure
2003
2004
2005
2006E
2007E
2008E
2009E
million
CAGR
pro-forma
forecast
budget
Net Inv. Cap.
131.9


133.4


136.5


140.7


143.4


140.6


142.0


financed by
Equity
55.3


61.6


64.6


69.0


75.2


82.0


90.5



(net of dividends)
7.8

Sev. Indemn. Fund










7.4
7.6
7.7
7.9
8.0
8.2
Net financial debts
68.8


64.4


64.2


63.9


60.3


50.5


43.3


-6
of which M/L term
27.6


27.4


25.1


18.2


14.1


10.1


7.0


Debt/Equity
1.2


1.0


1.0


0.9


0.8


0.6


0.5


ROI
11
14
14
13
16
17
20
Normalised ROI
11
12
15
16
19
21
24
ROE
11
13
12
11
13
13
15
Normalised ROE
10
12
14
15
17
18
18
Base casesales on soybean/USA not considered
26
Employment of cash flow(Net result
depreciation deferred taxes)

• Free cash flow after dividends to reduce Net
  financial debt

12.0
million
13.9
CAGR free cash flow 2004-07 15
7.0
7.2
3.1
3.5
6.0
3.6
0.2
0.3
9.8
3.2
2.9
3.4
4.8
4.4
1.6
6.5
4.8
4.0
5.3
11.9
2.3
8.6
6.7
6.2
5.6
4.8
1.2
0.5
2004E 2005E 2006E 2007E
2008E 2009E
Free Cash Flow
Investments
? NWC and Sev. Ind. Fund
Debt reduction
Dividends (cash-wise)
Net of write-offs (in 2004) Net of
downpayment from Solvay/Solexys (in 2005)
27
Conclusions
28
Dividend policy Base case sales on
soybean/USA not considered

• On an average basis, in the range of 40-45 of
  net result (excl. extraord. incomes)

million
5.6
4.8
4.0
2.9
3.2
3.4
1.6
7.7
6.1
5.5
5.1
4.6
4.2
4.2
2003 2004E 2005E 2006E
2007E 2008E 2009E
Net result
Dividends (on Net result of the year)
Retained earnings
EpS
0,37

0.50


0.49


0.48


0.59


0.68


0.83


DpS
0.10

0.18


0.20


0.21


0.25


0.30


0.35


29
Investment case
From actions already finalised/being finalised
strong growth of results and dividends
From possible sales of Tetraconazole on
Soybean/USA further economic/financial growth
From prospective availability of additional
financial leverage new opportunities for
growth
30
Contacts
For information, please contact
Ruggero Gambini Strategic Control Manager
Investor Relator tel. [phone] fax.
39.02.40901.353 email rgambini_at_isagro.it
Internet www.isagro.com
General information isagro_at_isagro.it
31
Disclaimer
Estimates, considerations, statements and
opinion, except for what referring to actuals,
are to be considered as data, estimates,
considerations, statements and opinion regarding
future, and have been elaborated and stated on
the basis of available information and/or on the
basis of those information considered the most
reliable and/or the most reasonable. Such data,
estimates, considerations, statements and opinion
could prove to be incomplete and/or wrong and
they incorporate elements of risk of uncertainty,
beyond the company control. For such reasons,
actual results may prove to differ versus Data,
estimates, considerations, statements and opinion
contained in such presentation. Such data,
estimates, considerations, statements and opinion
are not to be considered as a proposal of
investment, under any circumstances, in Isagros
shares. Any refer to Isagro products is to be
considered exclusively as general information
about the group activity and is not to be
intended, under any circumstances, as invitation
to employ or propose the employment of such
products.