New Valentino Spin-off

The Italian fashion house Valentino is to be spun-off into a separate new entity called Valentino Fashion Group SpA.

Parent company Marzotto SpA announced the change last week. It plans on spinning off its fashion brands, which include Marlboro Classics, a stake in Hugo Boss AG and Valentino into a new company. Shareholders in Marzotto will receive shares in the new firm equal to those owned in Marzotto SpA.

The spin-off will separate the fashion business from the textile brands, allowing the company on building the latter's presence, while the fashion brands are developed separately. Marzotto CEO Antonio Favrin said: "The spin-off enables the company to enhance the value of both sectors, creating the best conditions for growth and development."

www.marzotto.it
21 March 2005

Marzotto to double sales in five years

Marzotto , the Italian company behind the Valentino and Hugo Boss brands, plans to double sales in five years at the latest. In 2003 Marzotto Spa.reached sales of €1.7 billion.

The most important factor in its growth is China. The Italians plan to sell all of the brands they make in China. Marzotto will focus on new markets by organic growth and less on acquisitions.

Chairman Antonio Favrin, says he believes that in near future there will only be a market for six big fashion groups at the most, and intends his company to be one of them.

In the first nine months of this year Marzotto turnover grew 1.5 per cent to €1.4 billion. Pre tax profit was up almost 20 per cent to €149.4 million.

16 November 2004
www.marzotto.it

Valentino supports Marzotto

This week Italian fashion and textile group Marzotto reported that its sales rose 3.4% year on year in the first quarter, helped by adding designer label Valentino to its rack. Marzotto said first-quarter turnover totalles EUR544m, 86% of which were generated by its clothing unit, which includes German ready-t--wear label Hugo Boss.

Marzotto bought lossmaking Valentino last march as part of a strategy to shift out of the drooping textile market but the Rome-based label helped cut Marzotto's operating profit by more that 30% last year. Earlier this year, Marzotto forecast it should see slight growth in both its sales and operating margin during 2003, despite the cloudy economic outlook.

April 17, 2003
www.marzotto.it

Organisational reshuffle at Marzotto

As part of a simplification process of the organisational structure of Italian fashion house the Marzotto Group sold Marzotto GmbH (100% controlled by Marzotto S.p.A., partly directly and partly through Marzotto International NV) the shareholdings held in the companies Hugo Boss AG and Nová Mosilana a.s. to its holding company Marzotto International NV (directly 100% controlled by Marzotto S.p.A.).
This transaction did not modify the percentage of the indirect shareholdings of Marzotto S.p.A. in the companies Hugo Boss AG and Nová Mosilana a.s.

March 14, 2003
www.marzotto.it

Profit Marzotto Group falls considerably

Italian textile and fashion group Marzatto has seen its earnings go down with fifty percent. The third quarter of the year 2002 reported a Group's net profit of 24.8 million euro (£18 million), half of the profit that was made in 2001 (46,6 million euro). In May this year, Marzotto bought Valentino for £146 million.

Nevertheless, the Hugo Boss group, in spite of the constantly negative circumstances endured by the financial cycle in Germany and the still extremely slow recovery being seen in the US market, has managed to match the economic-performance projections already produced for the year 2002.
As far as the entire year is concerned, sales are expected to be in line with the level attained the previous year, whilst net profit should amount to 70 million euro.

Marlboro Classics did excellent as well. In spite of unfavourable market conditions, the Group's Spring/ Summer 2003 campaign is more or less showing the same sales levels as those seen the previous year. Marlboro Classics is still enjoying significant growth (+ 12%), which is helping to make up for the reduction in orders endured by classic menswear and womenswear (- 10%), which are more sensitive to the current weakness in demand.Sales and operating profit for the year 2002 for Marlboro Classics are expected to be in line with the previous year.

www.marzotto.it

December 19, 2002

Marzotto Group - First half of 2002 results
Today the Board of Directors of Marzotto S.p.A., examined the Group's economic and financial results (still to be audited) as at June 30, 2002.
The figures showed below do not include the economic and financial results of the Valentino Group (acquired on May 31, 2002), not yet available. In the Interim Report for the first half of 2002 (which will be published by September 13, 2002)

Valentino’s economic results pertaining to the Group, foreseen at a loss of about 2.5 million EUR,will be consolidated on an equity basis.
Net consolidated sales in 2002 first half, considering homogeneous activity areas compared to 2001, amounted to 832 million EUR, decreasing by 3.7% compared to the same period of last year (863 million).
The reduction was a result of the drop in the textile sector’s sales (- 20.8%) due to the extremely unfavorable market trend and to the restructuring plan in progress. The clothing sector, characterized by stiff competition, registered 1.2% increase.
Group’s operating profit amounted to 39 million EUR (4.7% of sales), against 87 million EUR as at June 30, 2001 (10% of sales).

The heavy downturn in period’s result was due to:
- the decrease in the Gross Operating Margin (- 34 million EUR), down to 90 million (10,8% on sales) from 124 million (14,4% on sales) in the first half of 2001. By business area, the fall was a consequence of:
¨ the decline in the clothing sector’s profitability, which, even if at a good level (12.6% of sales), was affected by the decrease in Hugo Boss’ results, mainly because of difficulties in the United States;
¨ the negative performance of the textile sector, in woolen and linen areas, caused both by the effects of the restructuring in progress and by the ongoing market difficulties, which resulted in a reduction in unit selling prices and margins, even
if with a raw material price rise;
- the prudential allocation of higher provisions for bad debts (16 million as at June 30, 2002, against 4 million as at June 30, 2001), even if with a reduction in debtors (-6%) more than proportional on sales decrease (- 3.7%);
- the 2 million EUR increase in operating depreciation. Pre-tax consolidated profit as at June 30, 2002, net of tax credits on dividends, amounted to 28 million EUR (June 30, 2001: 82 million) and was affected, besides the above mentioned decrease in the operating profit, also by the negative balance (6 million EUR) of the extraordinary charges and income (June 30,
2001: positive for 1 million).

As at June 30, 2002, considering homogenous activity areas compared to 2001:
a) net consolidated profit including profit attributable to minority shareholders was equal to 19 million EUR, down from 39 million EUR in the first half of the year 2001;
b) net profit attributable to the Parent Company's shareholders amounted to 4 million EUR (June 30, 2001: 16 million).
As at June 30, 2002, considering homogenous activity areas, Group's net financial debt amounted to 535 million EUR; 429 million as at June 30, 2001 (+ 106 million). During the said period the Marzotto Group made investments of 116 million EUR in
fixed assets and of 36 million in the acquisition of the Valentino Group, besides distributing dividends to the Parent Company’s shareholders and to minority shareholders for 50 million EUR and financing the increase in the net working capital
for 50 million.

* * * * *
Mainly as a consequence of the revision of the economic forecasts for the year announced by the subsidiary Hugo Boss, the Board of Directors anticipates for the whole year 2002, considering homogenous activity areas compared to 2001:
- Group’s sales slightly lower than those of the previous year;
- operating profit down to 7/8% on sales compared to 10.5% in the year 2001;Considering the Valentino Group’s losses and the capital gains concerned with non-strategic asset disposal, net profit in the year 2002, in respect of the new consolidation
structure, should not differ from that of 2001.

* * * * *
During the meeting the Board of Directors has also appointed Mr. Dario Segre as Director and member of the Executive Committee. Mr. Segre succeeds Mr. Paolo Scaroni who has resigned.

www.marzotto.it

26-7-2002