Toto S.p.A. Costruzioni Generali

TOTO S.P.A. COSTRUZIONI GENERALIHowever, the recovery of more adequate levels of confidence in our country and the firminvolvement of the European Central Bank, which has ensured unlimited availability offunds for the European banking system, could help bring the crisis under control in arelatively shorter time than expected.Target sectorThe crisis, which has affected the building sector since 2008, is anything but over. Thedrop in investments in construction in 2011 reached almost 6% and a further 4% isexpected for 2012. In five years – from 2008 to 2012 – the total loss in terms ofinvestments will be over 24%, returning to the levels of the mid-1990s. In the public workssector, the drop in investments will even be as high as 37%.During an economic phase where restrictive policies on state budgets have full priorityover initiatives aimed at promoting growth, it is clear that the sector such as Toto's isparticularly suffering.Growth targets currently be followed in project financing, both in joint ventures and instand alone operations, with equity investments in SPVs, to ensure the ability to act as anEPC Contractor in construction work.Our company has also identified two other substantial countermeasures which enable it tolook at the future in a positive light: The diversification of the client portfolio in Italy, nolonger limited to a single large client, and the creation of a sales team dedicated to foreignmarkets with the opening of a branch in the Emirates which will cover the Middle East inparticular.Order portfolioThe company has a substantial portfolio of orders ensuring continuity ofoperations over the next few years. This allows it to implement a selective vettingprocess for operating commitments in the various sectors of interest.On 31 December 2011 the order portfolio amounted to approximately € 519 million.YEAR-END ORDER PORTFOLIO1.000875800600702588655519400200-2007 2008 2009 2010 2011Directors’ Report to the financial statements as of 31/12/2011 Page 4