Press Releases and Statements

Benetton Board approves 2006 First Quarter Results

Consolidated revenues climb to 416 million euro, net income of 24 million euro

Ponzano, May 15, 2006 – The Benetton Board of Directors today approved the consolidated results for the first quarter of 2006.

Group net revenues for the first quarter of 2006 were 416 million euro, compared with 383 million in the corresponding period of 2005 (+8.6%). “Apparel” sector sales amounted to 389 million euro, against 355 million euro in the first quarter of 2005, with a change of 9.5%.

In the “Apparel” sector, to be noted are the contribution to revenues by the Turkish partnership (established in May 2005), of 12 million euro, and the contribution of sales from the directly operated stores.

Revenue performance by independent partners was mainly influenced by the effects of the commercial development policy and the dynamics of 2006 spring-summer collection deliveries, designed to enhance service to stores.

Markets which continue to show significant growth are the Mediterranean basin, South Korea, China and India.

Sales were affected by positive exchange rates for around 5 million euro, representing 1.3% of total revenues.

Gross operating income was 43.0% of revenues compared with 44.2% in the same period of 2005, with a contribution margin of 35.7% compared with 37.0% in the first quarter of 2005.

EBIT was 35 million euro, 8.4% of revenues, against 37 million euro in the first quarter of 2005 (9.8%).

Net income was 24 million euro, representing 5.8% of revenues, compared with 27 million euro in the first quarter of 2005 (7%).

Shareholders’ equity, at March 31, 2006, amounted to 1,300 million euro (1,275 million at December 31, 2005). The improved net financial position of 377 million euro, versus 477 million euro at March 31, 2005, was achieved in the context of growth in operating investments and an improvement in working capital.

The results of the first quarter make it possible to confirm the previously comunicated guidance for 2006; an increase in consolidated revenues at least equal to that in 2005, an EBIT of around 9.5%-10% of consolidated revenues and net income in the region of 6.5%.

This press release contains forward looking statements which reflect Management’s current views and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments.


Consolidated statement of income

Benetton Board approves 2006 First Quarter Results_1

Financial situation – highlights

Benetton Board approves 2006 First Quarter Results_2

Statement of cash flow

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(A) Includes the purchase of financial assets in the amount of 40 million euro.

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