BULGARI S.P.A. : Bulgari Group: excellent sales performance in the first half of 2011

Bulgari Group: excellent sales performance in the first half of 2011

Turnover: 548.0 million Euro (+23.6% at current exchange rates;

+23.3% at comparable exchange rates)

Contribution margin: 61.1% (62.2% in the first half of 2010)

Operating profit: 15.3 million Euro

Net profit: 9.1 million Euro

Rome, 25 July 2011 ? The Board of Directors of Bulgari S.p.A. approved today the interim report on operations of the Bulgari Group for the first half of 2011, which showed a turnover of 548.0 million Euro, a growth of 23.6% at current exchange rates (+23.3% at comparable exchange rates) compared with the same period of the previous year, an operating profit of

15.3 million Euro and a net profit of 9.1 million Euro.

All the changes in turnover reported below are expressed at current exchange rates unless otherwise indicated.

Turnover by category of product

In the six months in question all product categories contributed positively to the growth.

Jewellery grew by 20.2% at current exchange rates (+19.5% at comparable exchange rates) thanks to the success in the sales of high jewellery, of the B.zero1 line and its new extension in ceramics, and also, in the medium-high range, of the Sassi line.

Watches recorded an appreciable increase of 25.9% (+25.4% at comparable exchange rates), led by the excellent result also obtained this year by the female model Serpenti, while, for the male segment, the complicated models and the new versions of the Octo model, which in

2010 was awarded Watch of the Year by the prestigious magazine Montres Passion, were particularly successful. Perfumes also registered a very good performance (+26.9%), thanks to the new launches Mon Jasmin Noir and MAN.

Finally, accessories continued to give great satisfaction showing a growth of 24.2%.

Turnover by geographical area

All geographical areas performed exceedingly well: Europe showed a growth of 18.6% (with

Italy at +11.1%), Americas of 16.1% and Japan of 4.6%. The Rest of Asia maintains its performance at a very quick pace (+44.2%) thanks also to the strong contribution of the Chinese market (Greater China: +59.5%). Finally, the Middle East/Other reported an increase of 34.3%.

Comment on the Income Statement

The contribution margin in the first half increased from 275.9 million Euro in 2010 to 334.6

million Euro (+21.3%) following allocations to cover the risk of stock obsolescence. Such allocations were concentrated in the second quarter of the year, in this way causing a growth in the contribution margin lower than that of turnover and a subsequent decrease in its incidence on revenue (59.0% in 2011 compared with 61.0% in 2010).

Total operating costs, excluding those for advertising and promotion, increased from 221.6 million Euro in the first half of 2010 to 245.6 million Euro (+10.8%). This increase is due to

costs for supporting and developing the business in a context of ongoing maintaining of high efficiency levels. Among operating costs, promotional and advertising expenses amounted to

58 million Euro and increased their percentage incidence on turnover (10.6% compared with

9.6% in 2010) following a planning of activities which saw a greater concentration during the first part of the year in support of product launches.

Thanks to the containing of costs and the good performance of revenue, operating profit amounted to 15.3 million Euro compared with 12.3 million Euro in the first half of 2010. However, it is worth emphasising that this result was impacted by the non-recurring costs of

15.8 million Euro incurred for consultancy activities relating to the agreement signed with LVMH, which lead the operating profit to actually amount to 31.1 million Euro, therefore recording a steady growth compared with the 2010 result of 11.8 million Euro.

The net profit, finally, was equal to 9.1 million Euro, a strong increase compared with the 7.7 million Euro loss recorded in the first half of 2010. This result also felt the positive impact of proceedings from exchange rate hedging implemented by the Group.

Comment on the Statement of financial position

The Group?s net financial indebtedness as of 30 June 2011 amounted to 159.1 million Euro

compared with 135.3 million Euro as of 31 December 2010 and 290.2 million Euro as of 30

June 2010 with an increase of 17.6 % year on year.

The overall shareholders? equity at the end of June 2011 amounted to 921.8 million Euro compared with 840.1 million Euro as of 30 June 2010. The financial position benefited positively from the stock control policy and the selective investment strategy partially compensated by the distribution of dividends for 36.2 million Euro which occurred in May

2011.

Inventory, net of the exchange rate effect, recorded an increase of 13.2% compared with the figure as of 31 December 2010 due to the normal seasonal nature of the business which leads to the establishment of inventory during the first half of the year.

Finally, during the six months in question, the company made investments for 21.4 million

Euro (-7% compared with the same period of 2010).

In today's meeting the board has resolved as well upon the statement provided for articles 103 of Legislative Decree n. 58 of February 24th 1998 and 39 of Consob Regulation n. 11971 of May 14th 1999 (the Issuer's Statement), regarding the mandatory public offer on Bulgari S.p.A. ordinary shares launched by LVMH Moët Hennessy - Louis Vuitton S.A. pursuant to article 106 point 1 of Legislative Decree n. 58 of February 24th 1998. The board has expressed a favourable opinion on the offer and has confirmed the fairness of the consideration offered equal to Euro 12,25 per ordinary share.

In compliance with applicable provisions of law, the Issuer's Statement with its enclosures shall be disclosed to the market as part of the offering document.

Bulgari is one of the global players on the luxury market. In 2010 the Group posted a turnover of 1,069 million Euro. Bulgari relies on a stores network in the most exclusive shopping areas in the world and on selected distributors. As of 31.06.2011 the number of the Bulgari stores in the world was 295 of which 174 as directly owned stores. Bulgari has a product portfolio that ranges from jewels and watches to accessories and perfumes.

EUR M.	H1 2011	H1 2010
REVENUES	548.0	443.3
EBIT	15.3	12.3
NET RESULT	9.1	(7.7)

EUR M.	Q2 2011	Q2 2010
REVENUES	293.4	244.2
EBIT	3.0	12.6
NET RESULT	-0.2	0.6

BULGARI GROUP ? REVENUES BY PRODUCT CATEGORY ? H1 11

REVENUES BY PRODUCT CATEGORY	H1 2011	H1 11/ H1 10	H1 10/ H1 09
REVENUES BY PRODUCT CATEGORY	EUR M.	% On Revenues	% REPORTED	% COMP. FX.	% REPORTED	% COMP. FX.
Jewels	243.5	44.4%	20.2%	19.5%	14.8%	10.5%
Watches	111.1	20.3%	25.9%	25.4%	-1.2%	-4.6%
Perfumes & Cosmetics	129.7	23.7%	26.9%	28.2%	16.1%	13.6%
Accessories	44.9	8.2%	24.2%	22.4%	25.4%	20.7%
Hotel	8.8	1.6%	12.0%	-	-0.3%	-
Royalties & Other	10.1	1.8%	58.4%	-	7.6%	-
TOTAL	548.0	100%	23.6%	23.3%	11.8%	8.2%

BULGARI GROUP ? REVENUES BY GEO AREA - H1 2011

REVENUES BY GEO AREA	H1 2011	H1 11/ H1 10	H1 10/ H1 09
REVENUES BY GEO AREA	EUR M.	% On Revenues	% REPORTED	% COMP. FX	% REPORTED	% COMP. FX.
EUROPE	178.1	32.5%	18.6%	-	1.0%	-
of which Italy	55.6	10.1%	11.1%	-	2.7%	-
AMERICAS	72.2	13.2%	16.1%	22.7%	53.4%	52.7%
ASIA	254.1	46.4%	28.1%	27.1%	14.7%	9.6%
of which Japan	84.4	15.4%	4.6%	-0.2%	1.2%	-4.0%
of which Rest of Asia	169.7	31.0%	44.2%	47.1%	26.2%	21.4%
MIDDLE EAST/OTHER	43.6	8.0%	34.3%	-	-5.1%	-
TOTAL	548.0	100%	23.6%	23.3%	11.8%	8.2%

BULGARI GROUP ? REVENUES BY PRODUCT CATEGORY ? Q2 11

REVENUES BY PRODUCT CATEGORY	Q2 2011	Q2 11/ Q2 10	Q2 10/ Q2 09
REVENUES BY PRODUCT CATEGORY	EUR M.	% On Revenues	% REPORTED	% COMP. FX.	% REPORTED	% COMP. FX.
Jewels	129.5	44.1%	13.2%	16.7%	18.2%	10.0%
Watches	60.5	20.6%	29.5%	33.9%	-1.0%	-8.4%
Perfumes & Cosmetics	69.6	23.7%	22.2%	26.8%	7.6%	2.3%
Accessories	24.2	8.2%	29.1%	33.5%	28.2%	16.9%
Hotel	4.7	1.6%	10.0%	-	4.5%	-
Royalties & Other	5.0	1.7%	55.4%	-	14.6%	-
TOTAL	293.4	100%	20.1%	24.0%	11.9%	4.5%

BULGARI GROUP ? REVENUES BY GEO AREA - Q2 11

REVENUES BY GEO AREA	Q2 2011	Q2 11/ Q2 10	Q2 10/ Q2 09
REVENUES BY GEO AREA	EUR M.	% On Revenues	% REPORTED	% COMP. FX.	% REPORTED	% COMP. FX.
EUROPE	99.0	33,8%	20,8%	-	-2,5%	-
of which Italy	30,3	10,3%	12,8%	-	-1,0%	-
AMERICAS	39,1	13,3%	11,5%	24,3%	65,1%	56,1%
ASIA	131,4	44,8%	23,1%	28,3%	18,5%	6,8%
of which Japan	44,9	15,3%	-0,3%	-0,3%	12,4%	-1,0%
of which Rest of Asia	86,5	29,5%	40,1%	50,7%	23,3%	13,3%
MIDDLE EAST/OTHER	23,8	8,1%	17,1%	-	-10,8%	-
TOTAL	293,4	100%	20,1%	24,0%	11,9%	4,5%

Source: Bulgari S.p.A. ? Not audited preliminary results.

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