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• Turnover: 256 million Euro (+2% at comparable exchange rates, flat at current exchange rates)
• Gross Margin: 65.4% vs. 64.8% in 2007
• Operating profit: 29 million Euro (-38%)
• Net profit: 23 million Euro (-44%)

Rome, November 13th 2008 – The Board of Directors of Bulgari S.p.A. approved today the interim management statements of the Bulgari Group as of September 30th 2008, which highlights a turnover of 256 million Euro, increased by 2% at comparable exchange rates (-0.5% at current exchange rates) compared to the same period of last year. In the first nine months of the year revenues increased by 6% at comparable exchange rates (+2% at current exchange rates), from 744 to 763 million Euro.

All the variations reported below are expressed at comparable exchange rates unless noted otherwise.

Revenues by product category
In the period July – September 2008 jewellery, core business of the Company, registered once again a sales increase (+4% compared to the third quarter 2007) leading to a rise of 7% in the first nine months of the year. This is an especially positive result considering that the comparison base includes two extraordinary sales of high jewellery pieces made in April and September 2007.
Sales of watches fell by 6% in the quarter and by 3% in the first nine months. The performance in the quarter has been partially influenced once again by shortages in sourcing some technical components, which resulted in losses of production volume, and by a slowing demand in the wholesale channel.
Accessories registered a 16% decrease in the quarter (to be compared with the increase of 38% posted in the same quarter of last year), which leads to a -2% cumulative variation in the nine months. It is however worth noting that sales performance in the directly owned stores for this category registered a strong double-digit increase both in the quarter and in the first nine months of the year.
Finally, perfumes continued to post a strong growth (+15% in the quarter, +21% in the nine months).

Revenues by geographical area
As a consequence of the worldwide crisis of the financial markets and its impact on the demand for goods and services, all geographical areas registered an overall slowdown in sales.
Europe, in particular, posted a 5% growth in the quarter (Italy –5%) and a 6% growth in the first nine months (Italy –8%) also thanks to the positive contribution of almost all the countries in the region. The United States registered an 8% decrease in the quarter and a 6% decrease in the nine months. However, excluding the extraordinary sales of high jewellery pieces made by the Fifth Avenue store in New York and previously mentioned, this market showed an almost 10% increase both in the quarter and in the nine months. As for Asia (+2% in the quarter and +9% in the nine months), Japan showed a 3% decrease in the quarter due to a sales contraction in the wholesale channel and to a modest sales growth in the retail channel, while it confirmed its rise in the first nine months of the year (+2%).

Rest of Asia, finally, confirms once again its growth trend (+7% in the quarter and +18% in the nine months). Directly owned stores in particular, continued to show an aggressive double-digit growth rate.

Profit & Loss highlights
Gross Margin remained flat in the quarter at 167 million Euro but the percentage ratio on turnover increased to 65.4% vs. 64.8% in 2007. In the nine months gross margin registered a 4% increase moving from 478 to 498 million Euro, with a strong increase in terms of percentage ratio on turnover (65.4% vs. 64.2% in the first nine months of 2007).
Total operating costs went from 120 to 138 million Euro in the quarter (+16%) and from 368 to 418 million Euro in the nine months (+14%). As already occurred in the first two quarters, also in the third quarter the comparison base with the previous year is significantly influenced by the opening of important flagship stores in the fourth quarter 2007, with all the consequent increases in amortization, other general expenses (in particular leases) and personnel. Advertising and promotional expenses (+18% in the quarter and +14% in the nine months) were influenced, among the other things, by the investments made to support the launch of the new fragrance Jasmin Noir, which has been introduced to trade and press last July.
However, as largely anticipated by the Company, in the full year 2008 the expected increase of total operating costs including advertising and promotional expenses will be at a notably lower level thanks to the fact that only in the fourth quarter the comparison base will be again homogeneous and to the first significant effects of the cost control policy ongoing since several months. Operating profit was 29 million Euro in the quarter (-38% compared to 47 million Euro in the same quarter 2007) and 80 million Euro in the first nine months (-27% compared to 109 million Euro in the first nine months of 2007), with a 10.5% percentage ratio on turnover (14.7% in the nine months of 2007).
Net profit was 23 million Euro compared to 41 million Euro in the third quarter of 2007 (-44%). In the nine months net profit went from 99 to 77 million Euro, registering a 22% decrease with a 10.1% impact on turnover vs. 13.3% in the nine months of last year.

Balance sheet highlights
The Net Financial position of the Group as of 30.09.2008 was 331 million Euro compared to 177 million Euro as of 30.09.2007 and to 141 million Euro as of 31.12.2007.
Compared to the end of 2007, the debt increase in the first nine months is influenced by the dividend distribution in May of 96 million Euro, by the continuation of the investment plans which, although strongly reduced compared to last year, generated a 70 million Euro expenditure and by a 146 million Euro increase in inventory. The increase in inventory was partially due to exogenous factors (the recent Euro depreciation, the increase in the price of gold, the recent slowdown of demand and increase of semi-manufactured products in the watch segment due to the shortages in sourcing technical components mentioned before), and, for a lager part, to endogenous factors in line with the Company’s plans (numerical increase and surface enlargement of the store network, the overall enlargement and upgrading of the product offer in all categories and, in particular, in the medium-high jewellery).

The Bulgari Group had an overall total of 259 stores as of 30 September 2008, of which 161 are directly owned stores.

Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: "The results reached by the Group in the third quarter inevitably reflect the current economic crisis – and the reduced people’s tendency to purchase as a consequence – which has hit all the sectors and is continuing to have repercussions also in October. Although pursuing an even stricter cost control to further improve efficiency in the medium term, the Group is strongly determined to confirm and defend the long term strategies adopted so far to protect and increase the strength and attractiveness of the brand, the highest quality of its products and the fundamental presence in the key-markets. In a still unsettled macroeconomic environment, whose evolution is difficult to be predicted, I think that therefore we can realistically expect a turnover increase lower than previously estimated and, consequently, a decrease in the net and operating profit compared to the previous year. In any case such decrease will be lower than the one registered in the first nine months. Moreover, although it is clearly an unprecedented crisis, I would like to underline that the Group, given its financial solidity and the proven experience of its management, has already shown in the past to be able to face and handle very difficult moments with sense of timing, and I am therefore confident that the Bulgari brand will be winning and well-positioned once again at the time of the economic recovery”.

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