VALENTINO FASHION GROUP: Le Conseil d'Administration a approuv? les r?sultats du troisi?me trimestre 2006

On a geographical basis Group sales showed growth on all markets, particularly in Europe (+13.6%) and in the United States (+18%).

[1] The results of the first nine months of 2006 are compared with the January/June 2005 pro-forma results, as the Group has been operational since 1st July 2005.

(EUR millions)	January/September 2006	January/September 2006	Change %
Europe	1,111.1	977.9	13.6
Americas	255.6	214.8	19.0
Asia	139.5	126.7	10.1
Other countries	25.9	23.8	8.8
Products and services	1,532.1	1,343.2	14.1
Royalties	43.3	41.0	5.6
Total	1,575.4	1,384.2	13.8

The brand extension is continuing successfully, with the womenswear and accessory collections posting growth rates higher than the Group' average (both +34%).

Directly operated shops were 275 at 30 September 2006 against 200 at 30 September 2005. DOS sales, equal to 14% of total sales, rose by 31% (+10% on constant floor space and exchange rates).

EBIT

Group's EBIT increased by 17.2% to €227.4 million (14.4% on sales), thanks to the improvement achieved by all brands.

More in detail:

(EUR millions)	January/September 2006	January/September 2005	Change %
Hugo Boss	188.3	166.1	13.4
Valentino	24.6	18.5	33.0
Marlboro Classics/other brands	19.5	14.7	32.7
Other and elisions	(5.0)	(5.3)	5.7
Totale	227.4	194.0	17.2

Pre-tax income

Pre-tax income was €218.7 million as at 30 September 2006, a 19% rise on €183.8 million at 30 September 2005.

Net income

Consolidated net income, including income attributable to minority shareholders, amounted to €156.2 million, increased by 18.3% from €132.0 million at 30 September 2005.

Group net income

Net income attributable to the Parent Company's shareholders was €91.9 million, up by 21.1% on €75.9 million in the first nine months of 2005.

Investment

Investment in the period increased sharply to €82.4 million (€62.9 million at 30 September 2005) and was mainly allocated to developing direct retail and implementing the IT platform for the integrated management of the supply chain.

Net financial debt

Group's net financial debt was €392.9 million at 30 September 2006, increased form €358.7 million at 30 September 2005, mainly as result of the rise in net working capital.

The increase on €333.5 million of 31 December 2005 was due to the business seasonality and to the dividend pay-out of the first year half.

FORESEEABLE BUSINESS OPERATIONS PERFORMANCE

Mr Antonio Favrin, Chairman of Valentino Fashion Group S.p.A. commented:

"The good results achieved, lead us to confirm full year's sales growth in line with the first nine months and even higher improvement for both operating and pre-tax income.

The development of our business, particularly of womenswear and accessory collections, both for wholesale and retail, will allow us to reach new positive growth targets in 2007."

*****

This press release is available on the Company's website: www.valentinofashiongroup.com

For further information:
Luca Caserta
Investor Relations Manager
Tel. 02/624911
Cell. 335/7547224
e-mail: [email protected]

Income statement
	January/September 2006		January/September 2005		Change	Ch. in %
(millions of euro)
Net sales	1,575.4	100.0%	1,384.2	100.0%	191.2	13.8%
Cost of goods sold	(816.1)	(51.8%)	(733.1)	(53.0%)	(83.0)	(11.3%)
Gross profit	759.3	48.2%	651.1	47.0%	108.2	16.6%
Product research and development costs	(40.4)	(2.6%)	(34.2)	(2.4%)	(6.2)	(18.1%)
Advertising, marketing and promotion costs	(104.9)	(6.7%)	(95.0)	(6.9%)	(9.9)	(10.4%)
Selling and distribution costs	(273.1)	(17.3%)	(228.0)	(16.5%)	(45.1)	(19.8%)
General and administrative costs	(106.7)	(6.8%)	(97.4)	(7.0%)	(9.3)	(9.5%)
Operating income	234.2	14.8%	196.5	14.2%	37.7	19.2%
Other non-recurring (costs)/ revenues	(6.8)	(0.4%)	(2.5)	(0.2%)	(4.3)	n.s.
EBIT	227.4	14.4%	194.0	14.0%	33.4	17.2%
Net financial income/(charges)	(8.7)	(0.5%)	(10.2)	(0.7%)	1.5	14.7%
Income before taxes	218.7	13.9%	183.8	13.3%	34.9	19.0%
Taxes	(62.5)	(4.0%)	(51.8)	(3.8%)	(10.7)	(20.7%)
Net income before minorities	156.2	9.9%	132.0	9.5%	24.2	18.3%
Minority interest	(64.3)	(4.1%)	(56.1)	(4.0%)	(8.2)	(14.6%)
Group net income	91.9	5.8%	75.9	5.5%	16.0	21.1%

Note: Valentino Fashion Group S.p.A. is the beneficiary company of the partial proportional demerger, effective from 1st July 2005, of the apparel business of Marzotto S.p.A. As a consequence, in order to allow a homogenous comparison of the financial and economic results at 30 September 2006 with those of the previous year comparable period, pro-forma accounts for 2005 have also been prepared.

Income statement
	July/September 2006		July/September 2005		Change	Ch. in %
(millions of euro)
Net sales	649.6	100.0%	570.8	100.0%	78.8	13.8%
Cost of goods sold	(332.9)	(51.2%)	(294.6)	(51.6%)	(38.3)	(13.0%)
Gross profit	316.7	48.8%	276.2	48.4%	40.5	14.7%
Product research and development costs	(13.1)	(2.0%)	(11.6)	(2.0%)	(1.5)	(12.9%)
Advertising, marketing and promotion costs	(33.5)	(5.2%)	(36.6)	(6.4%)	3.1	8.5%
Selling and distribution costs	(97.7)	(15.1%)	(77.5)	(13.6%)	(20.2)	(26.1%)
General and administrative costs	(34.6)	(5.3%)	(32.5)	(5.7%)	(2.1)	(6.5%)
Operating income	137.8	21.2%	118.0	20.7%	19.8	16.8%
Other non-recurring (costs)/ revenues	(3.9)	(0.6%)	(2.7)	(0.5%)	(1.2)	(44.4%)
EBIT	133.9	20.6%	115.3	20.2%	18.6	16.1%
Net financial income/(charges)	(4.6)	(0.7%)	(2.8)	(0.5%)	(1.8)	(64.3%)
Income before taxes	129.3	19.9%	112.5	19.7%	16.8	14.9%
Taxes	(33.8)	(5.2%)	(26.9)	(4.7%)	(6.9)	(25.7%)
Net income before minorities	95.5	14.7%	85.6	15.0%	9.9	11.6%
Minority interest	(38.5)	(5.9%)	(33.6)	(5.9%)	(4.9)	(14.6%)
Group net income	57.0	8.8%	52.0	9.1%	5.0	9.6%

Balance sheet	30.09.2006	30.09.2005	Change	31.12.2005
(millions euro)
Trade receivables	426.0	359.0	67.0	242.9
Other receivables	61.3	67.5	(6.2)	73.0
Inventories	326.3	292.1	34.2	349.1
Trade payables and other liabilities	(389.9)	(334.2)	(55.7)	(337.8)
Net working capital	423.7	384.4	39.3	327.2
Other non-recurring assets	112.6	68.1	44.5	109.8
Investments	0.4	0.4	-	0.4
Net tangible fixed assets	271.6	245.2	26.4	253.3
Intangible fixed assets	95.0	80.6	14.4	87.0
Goodwill and trademarks	303.7	303.3	0.4	303.7
Medium/long-term assets	783.3	697.6	85.7	754.2
Non-current liabilities and provision	(95.2)	(79.6)	(15.6)	(85.3)
Deferred taxes provision	(46.8)	(32.9)	(13.9)	(47.6)
Net invested capital	1,065.0	969.5	95.5	948.5
Short-term financial liabilities	206.0	158.4	47.6	191.1
Cash & cash equivalents and short-term financial asset	(71.9)	(73.4)	1.5	(75.6)
Medium/long-term financial liabilities	259.3	274.3	(15.0)	218.4
Medium/long-term financial assets	(0.5)	(0.6)	0.1	(0.4)
Net financial debt	392.9	358.7	34.2	333.5
Minority interest	251.2	242.7	8.5	234.8
Group net shareholder's equity	420.9	368.1	52.8	380.2
Financing of net invested capital	1,065.0	969.5	95.5	948.5