2006 first-half sales: €101 million (+11%)
Tuesday, July 25^th, 2006

A positive first-half performance

Sales growth of early 2006 continued in the spring. Second-quarter consolidated sales expanded 10% to €48.3 million.

2006 first-half sales reached €101.2 million, up 11% at current exchange rates over the first half of 2005 (+9.3% at constant exchange rates).

- With sales in the first half approaching €70 million, Burberry fragrances were up 12% where the powerful Burberry London launch was slightly offset by a marginal decline in existing lines (excluding Burberry Brit Red to be discontinued at the end of 2006);

- Lanvin fragrances (14% of total sales) posted satisfactory growth of 22% excluding the Oxygène and Vétyver lines being discontinued as planned;

- Paul Smith fragrances gained 13% in the first half. The Paul Smith and Paul Smith Extrême lines have returned to growth (both up 13%) while the Paul Smith Floral line launched at the end of 2005 has performed well, particularly in the United Kingdom, offsetting the limited success of the Paul Smith London line for women;

- The launch of the S.T. Dupont Noir line, was very well-received in Eastern Europe and the Middle East, and solid performances by the other S.T. Dupont fragrances contributed sales of €5 million in the period;

- Following expansion into new export markets and the launch of Eau maximum, the Nickel brand’s position in France was strengthened (number 3 in the men's skincare segment with a 9.3% market share in 2005 – source: Secodip), as sales surged significantly (+64%). After the opening of a licensed Spa in London in spring 2006, similar initiatives for Berlin, Dubai and Moscow are currently under consideration;

- With gains by the Tumulte line, launched in fall 2005 that benefited from a renewal in demand in France, Christian Lacroix fragrances posted sales of €2.4 million.

The company has maintained its track record of strong growth in the United States (+21%) accompanied by excellent performances in Europe (+16%) despite weak consumer spending trends in most markets of this region.
 

Growth prospects remain good

Progress in the development phase for the Roxy fragrances to be launched in fall 2007 has been rapid and will be pursued in the coming months. This will be accompanied by the implementation of distribution structures in the four major European markets (Germany, Spain, Italy and the United Kingdom) that are expected to be operational in this same year.

Based on first half performances and fall launches (notably by the Burberry, Lanvin and Paul Smith brands), the company maintains guidance for 2006 of sales of €215 million approximately.

Positive trends for gross margins and effective control of selling expenses should result in further gains in the 2006 first-half operating and net margins over the same period in 2005.