PRESS RELEASE ISAGRO: THE BOARD OF DIRECTORS APPROVES THE 2010 STATUTORY AND CONSOLIDATED FINANCIAL STATEMENTS & THE BUSINESS PLAN

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1 PRESS RELEASE ISAGRO: THE BOARD OF DIRECTORS APPROVES THE 2010 STATUTORY AND CONSOLIDATED FINANCIAL STATEMENTS & THE BUSINESS PLAN 2010 consolidated figures (not subject to audit) - Revenues million (+4.2% vs. pro-forma 2009) - EBITDA 18.9 million (-0.8% vs. pro-forma 2009) - EBIT 8.4 million (-11.0% vs. pro-forma 2009) - Result before taxes 6.1 million (-6.0% vs. pro-forma 2009) - Net prof. from contin. operat. 2.1 million (vs. 3.6 million in pro-forma 2009) - Total net result (4.3) million (vs. 0.7 million in pro-forma 2009) - NFP from continuing operat.* 97.7 million (vs million as at pro-forma Dec. 31 st, 2009) - Debt/equity ratio 1.24 (vs as at pro-forma Dec. 31 st, 2009) * Not including 55,0 million of proceeds coming from strategic deals Dividend distribution proposal of 0.30 per-share (subordinated to the payment in advance of the outstanding quota of the banking loan, amounting to 15.1 million, issued in January 2009) Milan, March 16 th, 2011 The Board of Directors of Isagro S.p.A., which met today, approved the Statutory accounts, the draft consolidated financial statements as at December 31 st, 2010, the Business Plan, to be made available to the public at the Company headquarters (also on the Internet site and at the offices of Borsa Italiana S.p.A. in accordance with legal requirements, and intends to propose to the next General Meeting, to be held on March 28 th, 2011 in Ordinary and Extraordinary meetings, the distribution of a dividend of 0.30 per-share, subordinated to the payment in advance of the outstanding quota of 15.1 million of the banking loan of 30.4 million which was issued on January 29 th, 2009 by a pool of banks led by Intesa San Paolo. 1

2 2010 financial year ended with a consolidated profit from continuing operations of 2.1 million, this is off-set by a loss of 6.4 million from discontinued operations, which takes into account the writeoff ( 2,764 million) of the goodwill belonging to the company to be dismissed Sipcam Isagro Brasil whilst it does not include the capital gain (estimated in 8.4 million) from the sold participation in Isagro Italia which will be accounted in the 2011 financial year, for a negative Total net result for the Group equal to 4.3 million and with a Net financial position from continuing operations as at December 31 st, 2010 equal to 97.7 million (this value does not include the positive effect of 55.0 million cash-in from 2011 strategic deals). For Isagro S.p.A., the period ended with a negative Net result of 6.8 million and a Net financial position equal to 86.7 million. The new Business Plan, which reflects the effects deriving from the strategic deals communicated in 1 st Quarter 2011, highlights important targets of organic growth for the Group, thanks, in particular, to the growing contribution from new registrations of proprietary products worldwide and to the significant reduction of financial debts. In this respect it has been published available to the public at the Company headquarters (also on the Internet site and at the offices of Borsa Italiana S.p.A. the document A new set-up for the core business FINANCIAL YEAR The strategic turnaround During 2010, based on the experience acquired in the last few years, some initiatives were started, which were subsequently defined with the agreements reached in the first few months of this year: 1) Establishment of a strategic alliance with Chemtura Agrosolutions in Research & Development and in the commercialization of agropharma (press releases of January 26 th, 2011); 2) Agreement for the transfer of the equity investment in the distribution company Sipcam Isagro Brasil hereafter S.I.B. (press release of January 27 th, 2011); 3) Transfer of the equity investment in the distribution company Isagro Italia (press release of January 27 th, 2011); 4) Liquidation of the company Isagro Sipcam International hereafter I.S.I. the holder of the Barpen (100%) and AgroMax (75%) equity investments, and acquisition by Isagro of 100% of the equity investment in the distribution company Barpen, operating in Colombia, with the disposal of the indirect equity investment in the Argentinean distribution company AgroMax (press release of March 15 th, 2011). The four deals above are part of a strategic plan pursued by Isagro and aimed at reallocating the Group s resources to core-business related activities, i.e. research, development, production, marketing and commercialization of proprietary products across the globe. Indeed, the alliance with the new industrial partner ensure not only an improved Net financial position consequently to the collection of 20 million (accountable in 2011), but also guarantees the sharing of the Innovative research risk while speeding up the development and commercialization of products in jointventure. Furthermore, the transfer of the equity investments in Isagro Italia and S.I.B. frees considerable financial resources, i.e. more than 50 million of local financial debt to be deconsolidated and 35 million as total amount for the transfers (without impact on the 2010 financial statements as accountable in 2011), which were utilized to support the distribution of crop protection products for the largest part of third parties with limited profitability. 2

3 The fourth transaction, though of a smaller size, was also arranged in line with the new strategy, since the acquisition of 100% of the Colombian Barpen (a company able to self-finance its business through current operations) ensures its full control and a growing contribution of proprietary products to revenues, as envisaged by the new industrial plan. Furthermore, the divestment of the distribution business in Italy, Brazil and Argentina does in no way concern the marketing and commercialization of Isagro s proprietary products, which will continue to be sold in these countries by entrusting their distribution to third parties. On this point, within the framework agreements for the transfer of equity investments in the three distribution companies, medium to long term supply and distribution agreements were signed with these latter companies. Due to the events above, Isagro will focus its resources on the development of proprietary molecules and on their commercialization, channeling its products mainly via third-party distributors, thus lifting itself from the burdensome of financial commitments made mainly to support the distribution of third-party products in countries that often apply long credit extension terms, and, on selective basis, through its distribution networks, whenever the necessary conditions are met (significant and growing weight of turnover from proprietary products and limited financial commitment to support credit exposure from third parties products) results The Isagro Group s perimeter and qualitative profile have been deeply affected by the strategic deals above, compared to This press release analyses the events occurred during 2010, with 2009 pro-forma data made available to highlight the contribution made by the continuing operations of the Group to the economic and equity results, while isolating the impact of discontinued operations and/or held for sale (the equity investments in the distribution companies Isagro Italia, S.I.B. and AgroMax); instead, the joint-venture agreement with Chemtura Agrosolutions will not be taken into account, for which the economic/financial impact will be accounted starting from January The consolidated Revenues from continuing operations grew by million (+4.2%) compared to million of the 12 months of This increase is mainly attributable to: (i) Increased sales of the proprietary fungicide Tetraconazole in Brazil consequently to the rising demand from the three local distributing companies; (ii) Recovery of sales of the proprietary fungicide Tetraconazole in the USA (the local distributor is running out of the stock accrued in 2006) to cure secondary diseases affecting soybean; (iii) Growing contribution of new registrations, especially those concerning recently introduced products such as Kiralaxyl, Orthosulfamuron and Valifenalate generated by the innovative research of Isagro; sales of these new products should reach maturity over the next few years; (iv) Increased sales and higher profitability from the subsidiary Isagro Asia; (v) Rise in the average cost of copper as a raw material during 2010 which, being partially reflected in sale prices of copper-based products, had a positive impact on sales despite eroding profitability levels. These events only partially jeopardized by missing sales of products based on Benalaxyl, the active ingredient disposed in 2009, equal to 5.7 million. The consolidated EBITDA as at December 31 st, 2010 stood at million, slightly down by million compared to the same period of 2009 (-0.8%). The EBIDTA as at December 31 st, 2009, equal to million, also included non-recurring net incomes for million vs

4 million recorded this year; thus highlighting a negative difference of million, to be added to the missing contribution to EBITDA of the margins from sales of Benalaxyl based products (the active ingredient disposed on June 25 th, 2009 as already mentioned). This difference was almost entirely offset by the increased contribution margin for the period due to the sales of crop protection products for the reasons highlighted above. The consolidated EBIT as at December 31 st, 2010 was equal to million, down by million compared to million as at December 31 st, 2009, after absorbing depreciation and amortization for the period of million, up by million compared to the twelve months of 2009, and recording an impairment in the goodwill of the Colombian company Barpen, equal to million. Financial items as of December 31 st, 2010 overall recorded a million improvement compared to December 31 st, 2009, mainly due to: (i) Net interest expense and commission, which are down by million, from million to million, mainly due to the reduction in the cost of money in the Euro zone, marginally offset by greater indebtedness; (ii) Increased profits from currency hedging and copper hedging transactions equal to million, from 1,106 million as at December 31 st, 2009 to as at December 31 st, 2010 ( million of which relate to profits from copper hedging transactions and million of which from currency hedging losses). As a result of the above, the consolidated Profit before tax as at December 31 st, 2010 was million, substantially in line with million as at December 31 st, The Group net profit from continuing operations as at December 31 st, 2010 was million after having absorbed taxes for million including the write-off of deferred taxes for million, compared to the net profit of million of December 31 st, The Net result deriving from discontinued operations and/or held for sale was negative for million from operations, compounded by the write-off of the goodwill of the Brazilian distribution company S.I.B. for million (the capital gain, estimated in 8,4 million, from the sold equity investments in Isagro Italia will only be accounted in the 2011 financial year), compared with the negative result of million as at December 31 st, Due to the elements above, the Group s net result for 2010 was negative for million, compared to a profit of for As far as balance sheet is concerned, always with reference to continuing operations, its accounting representation as at December 31 st, 2010 does not consider the positive impact of the cash-in ( 55.0 million) from extraordinary deals as these were realized in the current year. However, by separating the assets and the liabilities attributable to discontinued operations or held for sale, the equity effect deriving from deconsolidating disposed assets can be highlighted. Net fixed assets grew from million as at December 31 st, 2009 to million as at December 31 st, 2010, with a rise of million (+0.6%) mainly due to the increased value of intangible fixed assets by million, net of the carrying value of the active ingredient Dimethoate equal to 1.8 million and transferred last May, mainly for investments in new registrations (for which amortization, though increasing, is still lower than the relevant investments for the period), which summed with the increase of million in other assets and liabilities 4

5 substantially offset the negative impact deriving from a decrease in tangible fixed assets for million due to depreciations higher than new investments. It is to be noted that most of the intellectual property included in the assets of Isagro relates to development costs and new registrations mainly referring to proprietary products of the Group, for which the market value is only partially expressed by it. Net working capital grew from million as at December 31 st, 2009 to million as at December 31 st, 2010, posting a rise of mainly due to the increase in trade receivables for million. This increase was due, on the one hand, to the increased turnover, particularly as a result of the higher sales in the 4 th Quarter 2010 compared to the same period of 2009 by the US subsidiary Isagro USA and the Indian subsidiary Isagro Asia, which grew by 3.9 million and 1.0 million respectively, and, on the other hand, to the extension of payment terms required by the market also saw a rise in purchases by 12.0 million, which only marginally affected the inventory level, which grew by million, thanks to the policy adopted at supply-chain management level. The overall rise of the positive items of commercial net working capital, equal to million, was only partially offset by trade payables that grew as a consequence of the joint effect of increased purchases and more extended payments terms as well as an increase in overdue payables to suppliers. Following the strategic deals performed this year, the overdue payables to suppliers have been completely zeroed since January 31 st, Equity amounted to million as at December 31 st, 2010, up by million (+0.3%) from million as at December 31 st, 2009, mainly as a result of the change in the translation reserve, attributable to disposed assets/assets being disposed and continuing operations, equal to million, which more than offset the 2010 loss. Due to the above referenced elements, Net financial position attributable to continuing operations as at December 31 st, 2010 amounted to million, up by 15.0% compared to million as at December 31 st, As highlighted above, the Net financial position as at December 31 st, 2010 does not include 55.0 million cash from strategic operations attributable to By virtue of the above, the ratio of net equity to Net financial position (not inclusive of the above mentioned income) as at December 31 st, 2010 grew to 1.24 compared to 1.08 as at December 31 st, As regards the 2010 accounts of the parent company Isagro S.p.A., which reflect the effects of the events above, Revenues reached million, the EBITDA was million and a Net loss is estimated for million, after absorbing an overall impairment of fixed assets of million. As far as balance sheet is concerned, Isagro S.p.A.'s accounts as at December 31 st, 2010 recorded a Shareholders' equity of million and a Net financial position of million, with a debt/equity ratio of 1.20, financing a Net working capital of million and a Net fixed capital of million. Moreover, the effects of the four strategic deals described at the beginning of this press release are only marginally posted in the 2010 financial statements, since only the write-down of the disposed assets was accounted for, while the relevant capital gains and the positive effect of collecting 55.0 million from the transfer prices of the equity investments on the Net financial position will be accounted for in

6 Dividend distribution proposal Following the strategic actions taken after the end of 2010, including the transfer of the equity investment in S.I.B. expected to occur shortly, conditions are set to pay in advance the outstanding quota of 15.1 million of the banking loan of 30.4 million issued by a pool of banks in January 2009 as well as to restart the policy of dividend distribution implemented until 2006 and suspended during the four-year period Hence, subject to the repayment of the above mentioned loan, a proposal will be submitted to the Shareholders meeting to distribute a dividend of 0.30 per-share, drawing from the retained earnings. This dividend would be equal to the one distributed in 2006 and would correspond to a yearly value of 0.06 per-share in the period. Perspectives for the current year The Company expects, for the current year, to reach a Net result of 13.4 million owing to the effects deriving from the strategic deals occurred during the beginning of the year, with current operations essentially in break-even. As far as the balance sheet is concerned, Net financial position is estimated at 64.7 million (essentially in line with the working capital estimated at 61.5million) after the distribution of dividends for 5.3 million ( 0.30 per-share) BUSINESS PLAN In accordance with the strategic objectives established as part of the company planning process, Isagro provided its forecasts for the period, which are set out below. Economic-financial figures Consolidated Profit & Loss /million pro-forma E 2012E 2013E 2014E Revenues EBITDA EBIT Net Result (4.3) Consolidated Balance Sheet /million pro-forma E 2012E 2013E 2014E Net Fixed Assets Net Current Assets Net Invested Capital financed by: Equity Net Financial Position Debt/Equity ratio

7 With reference to the financial structure in the business plan period, note that the debt, after a drop due to the income from strategic deals in the first quarter 2011, is expected to increase (from 64.7 million on January 1 st, 2012 to 79.2 million on December 31 st, 2014) due to the increase in Working capital following increased sales when the Plan is up and running. The director in charge of preparing the corporate accounting documents, Mr. Lucio Zuccarello, hereby declares, pursuant to paragraph 2, article 154bis of the Consolidation Finance Act, that the accounting information provided in this press release and related to the consolidated figures as of December 31 st, 201 corresponds to the financial statements, books and accounting records. Isagro is the leading company of a Group which, in a little more than fifteen years, has become a qualified operator in the field of agrochemicals. Isagro is active in the discovery, development, production and marketing, on a worldwide scale, of proprietary agricultural pharmaceuticals, as well as in their distribution in some important markets. Further information is available from: ISAGRO S.p.A. Stefano Pirri tel Investor Relations Maria Teresa Agazzani tel Corporate Communication 7

8 CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31 st,

9 (not subject to audit) (amounts expressed in thousands euro) 12/31/2010 Differences 12/31/ /31/2009 pro-forma memo Net fixed assets Goodwill (210) -5,4% Other intangible assets ,3% Tangible assets (2.032) -6,4% Financial assets ,9% Non current funds 0 0 N/A 0 (376) Other medium/long term assets and liabilities ,8% TOTAL NET FIXED ASSETS ,6% Net current assets Inventories ,4% Trade receivables ,6% Trade payables (34.512) (5.379) -18,5% (29.133) (53.147) Risk funds (1.583) ,6% (3.408) (3.904) Other current assets and liabilities 337 (2.396) -87,7% TOTAL NET CURRENT ASSETS ,8% INVESTED CAPITAL ,7% Personnel fund (4.008) ,7% (4.868) (5.477) NET INVESTED CAPITAL ,5% Non financial assets and liabilities related to Discontinued operation ,6% Total ,2% financed by: Equity Capital stock ,0% Reserves and earnings brought forward ,7% Translation adjustment reserve of Continuing operation (2.385) ,5% (4.543) (2.996) Translation adjustment reserve of Discontinued operation ,1% Minority interest 33 (334) -91,0% Net group result (4.252) (4.912) N/A Total equity ,3% Net financial debts Medium/long term debts - towards banks (4.107) -17,2% towards banks - low rate 869 (847) -49,4% towards MIUR - low rate 0 (1.390) N/A others (333) ,4% (9.240) (5.285) Total medium long term debts ,5% Short term debts - towards banks ,9% towards banks - low rate 248 (168) -40,4% towards MIUR - low rate ,7% others (4.740) (4.926) N/A 186 (5.305) Total short term debts ,0% Cash and cash at banks (4.528) ,9% (7.934) (14.083) Total net financial debts ,0% Net financial position of Discontinued operation (1.810) -3,5% Total ,0% Debt/Equity ratio 1,24 1,08 1,75 CONSOLIDATED INCOME STATEMENT JANUARY - DECEMBER

10 (not subject to audit) (amounts in thousands euro) 2010 Differences pro-forma memo Revenues from sales and services 133, % 5, , ,321 Increases in assets through internal works 4, % (648) 4,247 5,469 Other revenues and income 4, % (7,181) 5,374 (155,328) Consumption of materials and external services (106,939) n/a 3,590 (99,758) (3,102) Variations in inventories of products % (182) (3,114) 4,444 Allowances and provisions (528) -77.0% 1,764 (2,292) (3,067) Other not recurrent income (costs) 8, % (5,264) 13,292 13,292 Added value 43, % (2,518) 46,146 55,029 % on Revenues 32.6% 35.9% 41.1% Labour costs (24,398) -0.3% 73 (24,471) (30,416) Other not recurrent income (costs) % 2,345 (2,345) (2,345) Labour costs allowances (334) 17.6% (50) (284) (382) Gross operating margin (EBITDA) 18, % (150) 19,046 21,886 % on Revenues 14.1% 14.8% 16.4% Depreciation: - tangible assets (4,753) 1.8% (85) (4,668) (5,260) - intangible assets (5,189) 6.0% (293) (4,896) (5,064) - write-off (515) n/a (516) 0 0 Operating result (EBIT) 8, % (1,044) 9,482 11,562 % on Revenues 6.3% 7.4% 8.6% Financial charges (3,605) -10.9% 439 (4,044) (8,894) Exchange gains/losses and derivatives 1, % 173 1,106 (142) Write-down/write-ups of investments 4 n/a 43 (39) (39) Result before taxes 6, % (389) 6,505 2,487 % on Revenues 4.6% 5.1% 1.9% Current and deferred taxes (4,019) 41.4% (1,176) (2,843) (1,803) Third-party share of (profit)/losses of Continuing operation 26 n/a 52 (26) 0 Gain/(loss) of Continuing operation 2, % (1,513) 3, % on Revenues 1.6% 2.8% 0.0% Net result of Discontinued operation (6,435) 116.1% (3,457) (2,978) 0 Third party share of (Gain)/loss of Discontinued operation 60 n/s Total Group profit/(loss) (4,252) n/a (4,912) CONSOLIDATED CASH FLOW STATEMENT JANUARY - DECEMBER

11 (not subject to audit) (thousands euro) 12/31/ /31/2009 Cash - opening balance 14,083 13,630 Current operations Net result of Continuing operation 2,097 3,662 Net result of Discontinued operation (6,435) (2,978) - Depreciation of tangible assets 5,454 5,260 - Amortization of intangible assets 5,399 5,064 - Losses in value of fixed assets 3, Provisions to reserves (including employee indemnity) 1,418 4,214 - (Gains)/losses from disposal of tangible and intangible assets (8,155) (13,630) - Capital (gains)/losses on disposal of financial assets and investments Net interest expenses due to financial institutions and leasing companies 9,766 8,862 - Net income/(charges) on derivative instruments 645 3,718 - Rersult on investments valued with the equity method (19) (16) - Income taxes 4,440 1,803 Cash flow from current operations 17,890 15,959 - (Increases)/decreases in trade receivables (13,376) 8,971 - (Increases)/decreases in inventories 5,034 13,115 - (Increases)/decreases in trade payables 5,066 (11,150) - Net change in other assets/liabilities (776) 4,003 - Use of funds (including employee indemnity) (4,245) (3,580) - Net interest expenses paid to financial institutions and leasing companies (10,218) (8,889) - Financial flow from derivative instruments (3,603) (3,451) - Income taxes paid (2,965) (4,885) Cash flow from operations (7,193) 10,093 Investments - (Investments)/disinvestments in intangible assets (9,572) (9,847) - (Investments) in tangible assets (3,249) (2,455) - Realization price on sale of intangible and tangible assets 10,122 13,864 - (Purchase)/sale of financial assets 188 (86) Cash flow from investments (2,511) 1,476 Financing activities - Increase/(decrease) in financial debts (current and not) 4,301 (8,363) - (Increase)/decrease in financial receivables 3,351 (1,259) - Distribution of dividends - Expenditure for changes in the shareholders' base of subsidiaries and jv (406) (395) - Paid in for increase in capital 0 0 Cash flow from financing activities 7,246 (10,017) Change in translation differences (125) (1,099) Cash flow of the period (2,583) 453 Cash - closing balance 11,500 14,083 of which: - Continuing operation 4,528 7,934 - Discontinued operation 6,972 6,149 11,500 14,083 11