VALENTINO FASHION GROUP : LE CONSEIL D'ADMINISTRATION APPROUVE LES RESULTATS POUR LES 9 PREMIERS MOIS DE L'ANNEE 2007

LE CONSEIL D'ADMINISTRATION APPROUVE LE RAPPORT DES 9 PREMIERS MOIS DE L'ANNEE 2007


CHIFFRE D'AFFAIRES CONSOLIDE : + 9,2 % (à taux de change constant +12 %)
RESULTAT NET DU GROUPE: + 11,4 %

9 PREMIERS MOIS DE L'ANNEE 2007

- Chiffre d'affaires consolidé : 1 720,5 millions d'euros (+9,2 % par rapport à 2006 : 1 575,4 millions d'euros)
- EBIT : 261,0 millions d'euros (+14,8 % par rapport à 2006 : 227,4 millions d'euros)
- Résultat net du groupe : 102,4 millions d'euros (+11,4 % par rapport à 2006 : 91,9 millions d'euros)

3EME TRIMESTRE DE L'ANNEE 2007 :

- Chiffre d'affaires consolidé : 693,2 millions d'euros (+6,7 % par rapport à 2006 : 649,6 millions d'euros)
- EBIT : 148,6 millions d'euros (+11,0 % par rapport à 2006 : 133,9 millions d'euros)
- Résultat net du groupe : 60,9 millions d'euros (+6,8 % par rapport à 2006 : 57,0 millions d'euros)

Milan, 9th November 2007 - Today the Board of Directors of Valentino Fashion Group S.p.A. approved the Report on the third quarter and the first nine months of 2007.

FIRST NINE MONTHS OF 2007

Sales

Consolidated sales were E1,720.5 million in the first nine months of Sales 2007, increased by 9.2% (currency adjusted +12%) over the comparable period in 2006.

Growth in the period was the result of a positive trend of all the main brands.

+---------------------------------+------------+------------+---------+-------------+
|          (EUR millions)         |  January/  |  January/  |  Change |  Comparable |
+---------------------------------+------------+------------+---------+-------------+
|                                 |  September |  September |    in % |      change |
+---------------------------------+------------+------------+---------+-------------+
|                                 |       2007 |       2006 |         |    in % [1] |
+---------------------------------+------------+------------+---------+-------------+
|  Hugo Boss                      |    1,327.7 |    1,215.6 |   + 9.2 |         +12 |
+---------------------------------+------------+------------+---------+-------------+
|  Valentino                      |      192.3 |      178.7 |   + 7.6 |         +11 |
+---------------------------------+------------+------------+---------+-------------+
|  Marlboro Classics/other brands |      250.3 |      226.4 |  + 10.6 |         +11 |
+---------------------------------+------------+------------+---------+-------------+
|  Other and elisions             |     (49.8) |     (45.3) |         |             |
+---------------------------------+------------+------------+---------+-------------+
|  Total                          |    1,720.5 |    1,574.4 |   + 9.2 |         +12 |
+---------------------------------+------------+------------+---------+-------------+

Group's sales confirmed a growing trend (+6.7%) even in the third quarter of the year, which usually registers, as the first one, higher levels due to the wholesale dynamics.

On a geographical basis the Group's sales continued to show growth on all the main markets, particularly in Europe (+9.5%) and in the United States (currency adjusted +21%).

+---------------------------+------------+------------+---------+-------------+
|       (EUR millions)      |  January/  |  January/  |  Change |  Comparable |
+---------------------------+------------+------------+---------+-------------+
|                           |  September |  September |    in % |      change |
+---------------------------+------------+------------+---------+-------------+
|                           |       2007 |       2006 |         |    in % [2] |
+---------------------------+------------+------------+---------+-------------+
|  Europe                   |    1,216.2 |    1,111.1 |   + 9.5 |       + 9.5 |
+---------------------------+------------+------------+---------+-------------+
|  Americas                 |      283.2 |      255.6 |  + 10.8 |         +19 |
+---------------------------+------------+------------+---------+-------------+
|  Asia and other countries |      174.0 |      165.4 |   + 5.2 |         +11 |
+---------------------------+------------+------------+---------+-------------+
|  Net sales subtotal       |    1,673.4 |    1.532.1 |   + 9.2 |         +12 |
+---------------------------+------------+------------+---------+-------------+
|  Royalties                |       47.1 |       43.3 |   + 8.8 |             |
+---------------------------+------------+------------+---------+-------------+
|  Total                    |    1,720.5 |    1,575.4 |   + 9.2 |         +12 |
+---------------------------+------------+------------+---------+-------------+

DOS sales, equal to 15% of total sales, rose by 21% thanks to both the increase in the number of shops (345 against 275 at 30 September 2006) and the improved performance on comparable floor space.

EBIT

Group EBIT increased by 14.8% to E261.0 million (15.2% on sales), thanks to improvement recorded by all brands.

+---------------------------------+--------------------+--------------------+---------+
|          (EUR millions)         |  January/September |  January/September |  Change |
+---------------------------------+--------------------+--------------------+---------+
|                                 |               2007 |               2006 |    in % |
+---------------------------------+--------------------+--------------------+---------+
|  Hugo Boss                      |              217.7 |              188.3 |  + 15.6 |
+---------------------------------+--------------------+--------------------+---------+
|  Valentino                      |               26.9 |               24.0 |  + 12.1 |
+---------------------------------+--------------------+--------------------+---------+
|  Marlboro Classics/other brands |               24.2 |               20.1 |  + 20.4 |
+---------------------------------+--------------------+--------------------+---------+
|  Other and elisions             |              (7.8) |              (5.0) |         |
+---------------------------------+--------------------+--------------------+---------+
|  Total                          |              261.0 |              227.4 |  + 14.8 |
+---------------------------------+--------------------+--------------------+---------+

Pre-tax profit

Pre-tax profit was E247.7 million as at 30 September 2007, up by 13.3% form E218.7 million as at 30 September 2006.

Net income

Consolidated net income, including income attributable to minority shareholders, amounted to E176.5 million, up by 13.0% (30 September 2006: E156.2 million).

Group net income

Net income attributable to the Parent Company's shareholders was E102.4 million, increased by 11.4% over the first nine months of 2006 (E91.9 million).

Investments

Investments in the period amounted to E59.6 million (30 September 2006: E82.4 million). The most significant projects concerned the opening of 61 new points of sale and the updating of the Group IT platform.

Net financial debt

Group's net financial debt was equal to E435.4 million as at 30 September 2007 (E392.9 million as at 30 September 2006). The increase was mainly due to higher operational outflows.

Net equity

Group's net equity, including minority interests, was E736.5 million as at 30 September 2007 (E672.1 million as at 30 September 2006).

OUTLOOK FOR THE YEAR

The good results recorded during last quarter as well as the orders backlog for Spring/Summer 2008 collections and growth in direct retail allow to anticipate a full-year rise in sales by about 10%, with operating and pre-tax profit improving more than proportionally than sales.

******

Statement of the Corporate Financial Reporting Manager

The Corporate Financial Reporting Manager, Luca Vianello, states, pursuant to article 154-bis, paragraph 2, of the Consolidated Law on Finance, that the accounting information contained in this document corresponds to the documentary evidence, record books and accounting entries.

******

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

For further information:
Investor Relations
Tel. 02/62491442
e-mail: [email protected]

[1] On the basis of constant exchange rates compared with 2006
[2] On the basis of constant exchange rates compared with 2006

+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|            Income statement           |            |          |            |          |         |           |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|                                       |   January/ |          |   January/ |          |  Change |  Ch. in % |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  (thousands of euro)                  |  September |     2007 |  September |     2006 |         |           |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Net sales                            |    1.720,5 |  100,00% |    1.575,4 |  100,00% |   145,1 |     9,20% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Cost of goods sold                   |     -865,9 |  -50,30% |     -816,1 |  -51,80% |   -49,8 |     6,10% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Gross margin                         |      854,6 |   49,70% |      759,3 |   48,20% |    95,3 |    12,60% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Product research and development     |            |          |            |          |         |           |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  costs                                |        -44 |   -2,60% |      -40,4 |   -2,60% |    -3,6 |     8,90% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Advertising, marketing and promotion |            |          |            |          |         |           |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  costs                                |     -122,9 |   -7,20% |     -104,9 |   -6,70% |     -18 |    17,20% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Selling and distribution costs       |     -303,5 |  -17,60% |     -273,1 |  -17,30% |   -30,4 |    11,10% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  General and administrative costs     |     -122,2 |   -7,10% |     -106,7 |   -6,80% |   -15,5 |    14,50% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Operating income                     |        262 |   15,20% |      234,2 |   14,80% |    27,8 |    11,90% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Other (costs) and revenues           |         -1 |          |       -6,8 |   -0,40% |     5,8 |   -85,30% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  EBIT                                 |        261 |   15,20% |      227,4 |   14,40% |    33,6 |    14,80% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Net financial income                 |       -0,1 |          |          - |          |    -0,1 |           |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Net financial income / (charges)     |      -13,2 |   -0,80% |       -8,7 |   -0,50% |    -4,5 |    51,70% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Income before taxes                  |      247,7 |   14,40% |      218,7 |   13,90% |      29 |    13,30% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Taxes                                |      -71,2 |   -4,10% |      -62,5 |   -4,00% |    -8,7 |    13,90% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Net income                           |      176,5 |   10,30% |      156,2 |    9,90% |    20,3 |    13,00% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Minority interest                    |      -74,1 |   -4,30% |      -64,3 |   -4,10% |    -9,8 |    15,20% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+
|  Group net income                     |      102,4 |    6,00% |       91,9 |    5,80% |    10,5 |    11,40% |
+---------------------------------------+------------+----------+------------+----------+---------+-----------+

+---------------------------------------------------+-------------+-------------+---------+-------------+
|                   Balance sheet                   |             |             |         |             |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  (thousands of euro)                              |  30.09.2007 |  30.09.2006 |  Change |  31.12.2006 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Net trade receivables                            |       452,3 |         426 |    26,3 |       264,1 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Other receivables                                |        88,1 |        61,3 |    26,8 |        84,9 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Inventories                                      |         395 |       326,3 |    68,7 |         391 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Short-term non-financial liabilities             |      -391,2 |      -389,9 |    -1,3 |      -372,5 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Net working capital                              |       544,2 |       423,7 |   120,5 |       367,5 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Assets due beyond 12 months                      |       126,6 |       112,6 |      14 |       120,3 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Equity investments                               |         2,9 |         0,4 |     2,5 |         0,4 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Net tangible fixed assets                        |       261,2 |       271,6 |   -10,4 |       285,9 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Intangible fixed assets                          |       102,7 |          95 |     7,7 |          96 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Goodwill and trademarks                          |       304,7 |       303,7 |       1 |       304,2 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Medium/long-term assets                          |       798,1 |       783,3 |    14,8 |       806,8 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Medium/long-term non-financial liabilities       |      -118,2 |       -95,2 |     -23 |      -114,8 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Deferred tax provision                           |       -52,2 |       -46,8 |    -5,4 |       -51,2 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Net invested capital                             |     1.171,9 |     1.065,0 |   106,9 |     1.008,3 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|                                                   |             |             |         |             |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Short-term financial liabilities                 |       298,1 |       206,6 |    91,5 |       174,2 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Cash & cash equivalents and short-term financial |             |             |         |             |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  assets                                           |       -69,3 |       -72,5 |     3,2 |       -66,6 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Medium/long-term financial liabilities           |       206,6 |       259,3 |   -52,7 |       233,3 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Medium/long-term financial assets                |           - |        -0,5 |     0,5 |           - |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Net financial debt                               |       435,4 |       392,9 |    42,5 |       340,9 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Minority interest                                |       271,7 |       251,2 |    20,5 |       246,2 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Group net equity                                 |       464,8 |       420,9 |    43,9 |       421,2 |
+---------------------------------------------------+-------------+-------------+---------+-------------+
|  Financing of net invested capital                |     1.171,9 |     1.065,0 |   106,9 |     1.008,3 |
+---------------------------------------------------+-------------+-------------+---------+-------------+

Copyright Hugin