Safilo Group: results of second quarter 2006

During a meeting with investors, Safilo Group Spa announced the consolidated revenues data for the first six months of 2006 and the second quarter of 2006.

Billings for the first six months totaled Euro 605.4 million, an increase of 7.8% compared to the 561.8 million recorded in the first six months of 2005. At constant exchange rates, the increase in sales is 5.5%.

The positive results of the first six months of the financial year were thanks to the good performance by products under license and the positive recovery of house brand sales (+13.2%), a demonstration of the effectiveness of the re-launch strategies for house brands. The trend was excellent in Italian and American markets with increases of 9.2% and 16.4%, respectively.

The second quarter recorded growth of 8.0% which, at constant exchange rates, has accelerated compared to the trend during the first months of the year. This improvement is due to the good commercial situation in general and to increased production capacity.

These positive results were achieved despite the first effects of a slowdown in the sales of Ralph Lauren brands; this license contract is due to expire end 2006.

Safilo Group Spa president Vittorio Tabacchi said: 'The positive sales trend confirms the validity of our business formula and the dynamism of a group that is always ready to take on new growth opportunities'.

Details of sales by geographical area and product:

Italia
The domestic market continues to be positive, with growth of 9.2% over the six months and 8.3% for the second quarter. Thanks to the popularity of the 2006 collections with Italian clients, sunglasses (+6.8%) and vision frames (+14.3%) gave a brilliant performance. The designer labels that made a major contribution to these results were Armani,Gucci , Valentino and house brands Safilo and Oxydo.

Europe (excluding Italy)
After a few problems with services in the early part of the year, there was a slight downturn in the first six months' sales in the European area (-2.6%). However, higher production levels associated with refocusing on deliveries to European clients, brought a positive result in the second quarter (+3.7%). This improvement is especially due to the sales of sunglasses, whereas geographically-speaking there were good results in Germany (+13.1%) and Great Britain (+11.9%). In terms of growth by brand, performance was good by Armani, Diesel,Dior , Valentino and house brands Safilo, Blue Bay and Oxydo.

America.
The trend during the first quarter 2006 has been confirmed for the American market with second quarter sales increasing by 13.3%. These results were achieved despite the fact that this area is the most penalized by the falloff in sales of Ralph Lauren products. There was significant growth in the department stores sector and for sports articles, and the trend in sales by brands was good for the Armani, Dior, Gucci and Valentino lines and, in the sports channel, for the house brand Smith.Excellent results also for the commercial division, Outlook, with 11.3% growth in the six months, and for the Solstice retail chain (+42.1% in the six months), whose outlets at June 30, 2006, totaled 68 (13 were opened in the second quarter alone).

Asia.
Very positive growth rates continue for sales on the Asian market (over the six months, +8.9% at current rates and +6.4% at constant rates). All product categories have met with considerable success on this market and sunglasses in particular recorded growth of 12.5% in the six months and 9.1% in the second quarter. The Armani, Dior and Gucci collections were especially popular during the first six months of the year. Among the subsidiaries in Asia, the trend was positive for Hong Kong (+19.3%), China (+52.9%) and Australia (+6.0%) .