The Board of Directors of Marcolin approves results for first half of 2006

Billings: 82,693 thousand euros (88,201 in 2005, -6.2%; +42% at constant data)
Ebitda: 3,600 thousand euros (5,870 thousand in 2005)
Ebit: 131 thousand euros (1,271 thousand in 2005)
Net result: -3,677 thousand euros (-2,089 thousand euros in 2005)
Net Financial Position: -41,274 thousand euros (-37,328 thousand euros in 2005)

The Board of Directors of Marcolin S.p.A., chaired by Giovanni Marcolin Coffen, met today and approved the Marcolin Group Report for the first six months of 2006, whose full version will be available on the company's website (www.marcolin.com) from the date it is filed.

BILLINGS

Compared to the same period last year, the Group recorded a falloff in billings of 5,508 thousand euros, a decrease of 6.2%.

Net of the Dolce & Gabbana lines for the first half of 2005 (the license agreement ended December 31, 2005), Marcolin Group billings at June 30, 2006, increased by 110% compared to the same period of the previous financial year (+42%, excluding the results of the new brands).

The substantial recovery in revenue was achieved thanks to sales of the new Tom Ford Eyewear and Just Cavalli Eyewear lines, showing the expected success, and excellent performance by the Roberto Cavalli Eyewear lines (+95% compared to June 30, 2005), Montblanc Eyewear (+118%), Miss Sixty Glasses (+53%), Timberland (+35%) and, on the American market, Kenneth Cole (+23%).

The analysis of sales broken down by geographical area shows a drop in billings (-16.9%) in Europe - the Italian market excluded (+3.9%) - entirely due to the lack of sales for the Dolce & Gabbana lines.

Cébé revenues from sales were substantially in line with the same period of the previous financial year (+1%).
A slight downturn in sales in the US (-1.6%) was set off by an increase of 2% in Marcolin USA billings (expressed in US dollars) compared to the previous period in 2005; this was achieved mainly by an increase in the sales of the Kenneth Cole and Timberland lines.

OPERATING RESULT

Ebitda was 3,599 thousand euros (equal to 4.4% of billings) compared to 5,870 thousand euros (6.7% of billings) for the first six months of 2005.

The reduction in Ebitda compared to the first six months of 2005 was mainly due to the following reasons:- lack of margins on billings from Dolce & Gabbana lines
- significant marketing costs for the promotion of new lines
- higher costs for the development and production of new lines.

During the first six months, the Ebitda result for Cébé was negative for 2,539 thousand euros (negative for 2,068 at June 30, 2005). The result was mainly due to the burdens for the devaluation of stocks on hand to cover the renewal of models and the ongoing strategic restructuring, organization and commercial process.The Ebitda for Marcolin USA was positive for 616 thousand euros, compared to the negative result of 930 thousand euros at June 30, 2005.

During the first six months of 2006, consolidated Ebit was 0.2% of billings (1.4% at June 30, 2005) equal to 131 thousand euros (1,271 thousand euros at June 30, 2005).

NET RESULT

During the first six months of 2006, the consolidated after-tax result was negative for 3,677 thousand euros (negative for 2,089 thousand euros at June 30, 2005).

SECOND QUARTER 2006 RESULTS

The financial data regarding the second quarter of 2006 show that:• revenues from sales were 41,854 thousand euros against 45,471 thousand euros for the second quarter 2005, a downturn of 8%;
• Ebitda stood at 2,218 thousand euros (1,686 thousand euros in the second quarter 2005), an improvement of 31.5% and equal to 5.3% of billings (3.7% in the second quarter 2005);
• Ebit was 924 thousand euros (negative at 1,217 thousand euros in the second quarter 2005), an improvement of 2,141 thousand euros and 2.2% of billings (-2.7% in the second quarter 2005);
• the net result was negative for 1,755 thousand euros (negative for 2,112 thousand euros in the second quarter 2005). The positive operating result confirms the suitability of the measures adopted in previous months and which are still ongoing.

NET FINANCIAL POSITION

The net financial position improved and stood at 3,958 thousand euros compared to December 31, 2005, due to the flow generated by operating activities. The trend in net financial position is also linked to seasonal trends.

RELEVANT FACTS EMERGED AFTER THE END OF THE SIX MONTHS AND EXPECTED OPERATING CHANGES

In the second quarter of 2006 the license contract for the production and distribution of Montblanc eyewear was renewed. The brand sales are increasing on all markets with particularly positive results in Central and South America, and in the Middle and Far East. With this positive trend the Marcolin Group is increasingly consolidating in markets where its presence was not particularly significant.

Due to the contribution made by the new lines in the portfolio, the billings in July and August confirmed their positive trend.

As to the expected operating changes, the financial year 2006 will be marked by a significant, though gradual, recovery in billings and margins. The company will continue to strengthen its structure to meet corporate objectives and its strategic decision to focus on the 'Made in Italy' products.

Furthermore, the consolidated results for the first six months of 2006 show that during the current financial year the Marcolin Group will record a net result which, although negative, will be a clear improvement against 2005. Specifically, the second six months of 2006 will not be negatively affected by the end of the relationship with Dolce & Gabbana generated in the second half of 2005.

General Manager Antonio Bortuzzo said:'Thanks to the substantial growth in billings for the licenses already in the portfolio and the contribution to sales by products in new license agreements, the Group has achieved two important objectives: to replace the billings lost with the end of the Dolce&Gabbana license and to have a more balanced long-term license portfolio with considerable potential and greater diversification. These characteristics enable us to be more optimist about the future'.