Confidential LVMH / alliance

PRELIMINARY | SUBJECT TO FURTHER REVIEW AND EVALUATION Luxury sector landscape

n The luxury sector was dominated by large conglomerates with global presence and diversified portfolios n Larger luxury groups acted as consolidators acquiring smaller companies /

2011E revenues of key sector players (€ in millions) Market cap €56,286m €13,991m €25,031m €10,960m €16,167m €16,307m €5,624m €6,079m €2,693m €2,264m 21,948

15,063

7,220 6,465 5,188

2,640 2,429 1,954 1,158 857

LVMH PPR Richemont Luxottica Swatch Hermes Tiffany & C o. Bulgari Tod's Group

Bulgari was a relatively small company in the luxury space

Source: FactSet as of 01 March 2011. Confidential 1 Handout Share price performance of key luxury players

Sector share price performance rebased to Bulgari share price (€)

9.5

9.0

8.5 49.0% 44.8% 8.0 35.9% 34.5% 33.7% 7.5 31.6%

7.0

6.5 10.9% 6.0

5.5

5.0 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 S ep-10 O ct-10 Nov-10 D ec-10 Jan-11 Mar-11 Bulgari S .P .A. LVMH Moet Louis Vuitton P P R S .A. C ompagnie Financiere Richemont S .A. S watch G roup AG MS C I Textile Apparel & Luxury G oods MS C I E urope

The luxury sector had performed strongly in the twelve months before the transaction

Source: FactSet as of 01 March 2011. Confidential 2 Potential partners / buyers overview Key financials 2011E Net debt / Key brands Market cap Revenues Net debt/(cash) EBITDA EBITDA Major shareholder(1) LVMH

€56,286 €21,948m €2,099m €5,632m 0.4x n Arnault Family − Economic 48% − Voting 64%

PPR

€13,991m €15,063m €3,781m €1,920m 2.0x n Pinault Family − Economic 41% − Voting 56%

Richemont

€25,031m €7,220m (€1,882m) €1,849m NM n Rupert Family − Economic 9% − Voting 49%

Swatch

€16,167m €5,188m (€1,762m) €1,409m NM n Hayek Family − Economic 24% − Voting 43%

Source: Company information, FactSet as of 01 March 2011. Note: Data calendarised to December year end and converted into € at spot exchange rate as of 01 March 2011. Confidential (1) Fully diluted holdings, net of treasury shares. 3 Potential partners / buyers Pros & Cons LVMH

Buyer perspective Seller perspective

Pros & Cons P Strong LTM stock performance vs. FTSE France Large P Becoming part of the leading luxury group with proven and Cap Index unique integration track record P Favourable exchange ratio (0.06x vs. 5-year average of P Possibility to become the flagship brand in LVMH Watches 0.09x)(1) and Jewellery business P Opportunity to add a unique brand to LVMH portfolio and P Possibility to lead the entire Watches & Jewellery business strengthening of LVMH Watches & Jewellery business unit unit (c.5% of the Group revenues ex Bulgari) P High liquidity position (~€2.5bn of cash on balance sheet)

? Relative valuation? ? Ownership dilution? ? Earnings dilution? O Unfavorable exchange ratio (0.06x vs. 5-year average of (1) O Potential lower appetite for further M&A activity following 0.09x) acquisition of Hermés stake

Historical exchange ratio evolution(1)

0.160 Trading Bulgari LVMH multiples on n EV/EBITDA 11E: 13.9x 9.9x 0.140 01 March 11 n EV/EBITDA 12E: 11.8x 8.6x n P / E 11E 29.2x 19.5x n P / E 12E 21.8x 16.9x 0.120

0.100 0.06x 0.080 0.09x 0.060

0.040 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Exchange ratio 5-year average

Source: FactSet as of 01 March 2011. (1) Number of new buyer shares issued for each target share acquired. Confidential

4 Potential partners / buyers Pros & Cons (cont’d) PPR

Buyer perspective Seller perspective

Pros & Cons P Excellent LTM stock performance P Become the second largest shareholder in PPR+Bulgari P Acquisition of Bulgari would accelerate the transformation combined entity into a pure luxury company P Possibility to stay at the helm of luxury business of the P Increase exposure to jewellery / watches company P Favourable exchange ratio (0.066x vs. 5-year average of 0.078x)(1) P Sale of Conforama provided PPR with financial resources

? Relative valuation? O Unfavorable exchange ratio (0.066x vs. 5-year average of (1) ? Earnings dilution? 0.078x) O Relatively high size of Bulgari (too big a bite?) O Diversified business with exposure to retail business (Fnac, Redcats) O Even after the disposal of Conforama, current PPR leverage O PPR still more levered than peers (Pro-forma Net Debt / limits the possibility to fund an acquisition with additional debt EBITDA 2011E of 2.0x vs. key competitors with leverage <1.0x) Historical exchange ratio evolution(1)

0.180 Trading Bulgari PPR multiples on n EV/EBITDA 11E: 13.9x 9.6x 0.160 01 March 11 n EV/EBITDA 12E: 11.8x 9.0x n P / E 11E 29.2x 14.8x 0.140 n P / E 12E 21.8x 13.1x 0.120 0.100 0.080 0.078x 0.066x 0.060 0.040 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Exchange ratio 5-year average

Source: FactSet as of 01 March 2011. (1) Number of new buyer shares issued for each target share acquired. Confidential

5 Potential partners / buyers Pros & Cons (cont’d) Richemont

Buyer perspective Seller perspective

Pros & Cons P Excellent LTM stock performance P Become a core shareholder of the combined entity alongside P Adding a renowned brand to its unique luxury brand portfolio Rupert Family P Favourable exchange ratio (0.18x vs. 5-year average of P Possibility to maintain full operating independence in the 0.33x)(1) context of the maison business model P Solid cash balance P Possibility to leverage on Richemont expertise and distribution network in the watch segment

? Relative valuation? O Unfavorable exchange ratio (0.18x vs. 5-year average of (1) ? Earnings dilution? 0.33x) O Net-a-Porter integration ongoing O Two different categories of shares at Richemont level with significant discrepancies in terms of voting rights − Registered shares held by the R. Family are not listed − Statutory provision to maintain the ratio between registered and bearer shares unchanged in case of capital increase Historical exchange ratio evolution(1)

0.55 Trading Bulgari Rich. multiples on n EV/EBITDA 11E: 13.9x 12.6x 01 March 11 n EV/EBITDA 12E: 11.8x 11.2x 0.45 n P / E 11E 29.2x 19.1x n P / E 12E 21.8x 16.8x 0.35 0.33x

0.25 0.18x 0.15

0.05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Exchange ratio 5-year average

Source: FactSet as of 01 March 2011. (1) Number of new buyer shares issued for each target share acquired. Confidential

6 Potential partners / buyers Pros & Cons (cont’d) Swatch

Buyer perspective Seller perspective

Pros & Cons P Possibility to further strengthen the competitive position in P Complementary distribution channels with a focus on directly the watches and jewellery segments owned retail distribution P Favourable exchange ratio (0.02x vs. 5-year average of P Possibility to leverage on Swatch strong expertise and 0.04x) positioning in the watch segment P Solid cash balance P Possibility to increase presence in the US market

? Relative valuation? O Unfavorable exchange ratio (0.02x vs. 5-year average of (1) ? Earnings dilution? 0.04x) O Integration risk given the relative size of the acquisition O Two different categories of shares at Swatch level with significant discrepancies in terms of voting rights

Historical exchange ratio evolution(1)

0.10 Trading Bulgari Swatch multiples on n EV/EBITDA 11E: 13.9x 10.2x 01 March 11 n EV/EBITDA 12E: 11.8x 9.1x 0.08 n P / E 11E 29.2x 16.9x n P / E 12E 21.8x 14.6x 0.06 0.04x 0.04 0.02x 0.02

0.00 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Exchange ratio 5-year average

Source: FactSet as of 01 March 2011. (1) Number of new buyer shares issued for each target share acquired. Confidential

7 Handout Key data for accretion / (dilution) and leverage analysis

Price per share (€) €7.72 €115.3 €110.3 €41.9 €310.4

# of shares out. 349m 488m 127m 597m(1) 54m(2)

Market cap €2,693m €56,286m €13,991m €25,031m €16,167m

Net debt / (cash) 0 €2,099m €3,781m (€1,882m) (€1,762m)

EBITDA 2011E €193m €5,632m €1,920m €1,849m €1,409m

Net income 2012E €123m €3,337m €1,073m €1,490m €1,108m

Cost of debt NA 5.5% 6.0% 6.0% 6.0%

Marginal tax rate NA 33.3% 33.3% 21.0% 19.6%

Which could be the most suitable partner from an accretion / (dilution) and leverage standpoint?

Source: FactSet. (1) # of equivalent shares. Each share having 10 economic rights. Confidential (2) # of equivalent shares. Each share having 5 economic rights. 8 Bulgari acquisition matrix

(1)

Source: FactSet. (1) Volume Weighted Average Price. Confidential Premia paid in previous majority voluntary tender offers in Italy. Comparable companies trading multiples. 9 Average trading multiples of previous comparable transactions.

Top-notch valuation

June 2008 – June 2011 share price performance Valuation considerations

20.0 30 Jun 2011: Antitrust approvals EV / LTM EBITDA multiple of selected transactions in the luxury 14.0 and closing of the space(1) Agreement

Tender offer price: €12.25 LVMH / Bulgari 27.7x 89.7% 12.0 15.0 Offer price: €12.25 ~60% premium vs. pre- PPR / 23.0x (2) announcement price 10.0

07 Mar 2011: Volume (m) LVMH / 16.9x Announcement of the Agreement 10.0 between Bulgari- LVMH / Donna 8.0 16.6x Price (in €) Trapani Family and Karan LVMH Permira / 14.4x 6.0 Valentino 5.0 Labelux / Jimmy 13.8x (29.9% ) Choo 4.0 Permira / Hugo 13.3x Boss

2.0 0.0 Eurazeo / 12.0x Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Moncler Volume (in millions) Bulgari FTS E Italy

“As befits a high-end jeweler, Bulgari has secured a top price…” – Wall Street Journal

Source: Company data, FactSet. (1) First name indicates acquiror, second name indicates target. Confidential (2) Blended multiple of three-stage PPR acquisition of Gucci. 10 Bulgari share price performance post announcement

January 2011 – September 2011 share price performance

20.0 30 Jun 2011: 29 Sep 2011: Antitrust approvals Bulgari is delisted 14.0 and closing of the from the stock Agreement exchange

Tender offer price: €12.25 51.1% 15.0 12.0

07 Mar 2011: Mandatory tender offer period Announcement of the

Agreement between Volume (m) 10.0 Bulgari-Trapani Family and LVMH 10.0 Price (in €)

8.0

5.0

6.0 (32.1% )

4.0 0.0 Jan-11 Feb-11 Mar-11 Apr-11 Jun-11 Jul-11 Aug-11 S ep-11 Volume (in millions) Bulgari FTS E Italy

After the announcement of the transaction, Bulgari share price aligned to the mandatory tender offer price of €12.25 per share

Source: Company data, FactSet. . Confidential 11 LVMH share price performance post announcement

March 2011 – May 2012 indexed share price performance(1)

150.0

140.0

130.0 13.8%

7.0% 120.0 5.0% 1.4% 1.2% 110.0

(8.1% ) 100.0 (10.6% )

90.0

80.0 Mar-11 Apr-11 May-11 Jul-11 Aug-11 S ep-11 Nov-11 D ec-11 Jan-12 Mar-12 Apr-12 May-12 LVMH Moet Hennessy Louis Vuitton P P R S .A. C ompagnie Financiere Richemont S .A. S watch G roup AG Tiffany & C o. Luxottica G roup S .p.A. Tod's S .p.A.

After the announcement of the transaction, LVMH share price performed positively

Source: Company data, FactSet. (1) Prices indexed to LVMH share price. Confidential . 12 Detailed transaction overview

Transaction summary and structure

On 05 March 2011, Paolo Bulgari, Nicola Bulgari and Francesco Trapani (the “Bulgari Family”), the majority shareholders of Bulgari, and LVMH entered into an agreement having as object a business combination between LVMH and Bulgari (the “Agreement”)

n The Bulgari Family agreed to contribute and transfer to LVMH all the 152.5m Bulgari shares owned, equal to 50.6% of the share capital of Bulgari plus any additional share acquired before the Closing Date (30 June 2011) in exchange for newly issued LVMH shares − In particular, the Bulgari Family agreed to contribute 13.8m shares received upon the settlement of an equity swap equal to 4.58% of the share capital of Bulgari. The Bulgari Family entered into such equity swap to hedge the dilution risk arising from the potential conversion of a €150m Bulgari convertible bond

n The agreed exchange ration was 0.108407 newly issued LVMH share for 1 Bulgari share contributed, and was calculated assuming an agreed price per Bulgari share of €12.25 Key transaction data n Paolo Bulgari (Chairman of Bulgari) and Francesco Trapani (CEO of Bulgari) Offer price (€) 12.25 were appointed directors of LVMH Premium to Pre-annuncement price (03 Mar 2011) 59.4% − Francesco Trapani was appointed Head of LVMH Watches & Jewelry 1m VWAP (one-month Volume Weighted Average Price) 59.9% division and member of LVMH Executive Committee 3m VWAP 57.3% n On 30 June 2011 all the necessary Antitrust approvals were obtained and 6m VWAP 66.2% the Bulgari Family contributed the majority stake in Bulgari into LVMH and 12m VWAP 82.1% received LVMH shares in exchange

Implied Equity Value (€m) 4,273 n The execution of the Agreement triggered the obligation for LVMH to launch Implied Enterprise Value (€m) 4,269 a Mandatory Tender Offer (the “Offer”) on the minority shareholders of Implied multiples Bulgari at a price of €12.25 per share payable in cash EV / EBITDA LTM 27.7x n On 23 September 2011 the Offer was successfully completed (92% EV / EBITDA 2011E 22.2x acceptance). LVMH exercised the squeeze-out right on the residual Bulgari P / E LTM 112.4x minorities and Bulgari shares were suspended from trading on 29 P / E 2011E 44.5x September 2011 LVMH acquisition of Bulgari has reshaped the Watches & Jewelry market, doubling LVMH presence in the space

Confidential 13 Strong strategic rationale

1 Capitalise on shared philosophy for exceptional craftsmanship, creativity and production expertise

2 Complete a unique luxury brand portfolio, while preserving Bulgari brand heritage and exclusivity

LVMH Watches & Jewelry division revenues (€ in millions) x2 Create a global leader in the strategic Watches & 3 2,054 Jewelry segment 985 2010 reported revenues 2010 pro forma revenues

Accelerate Bulgari growth and reach full potential We found in and the Group he has built all the elements that are required to guarantee the long term future of Bulgari: the ability to 4 joining an exceptional platform and leveraging on gather into one powerful organisation different brands that can grow and LVMH expertise and resources develop while preserving both their identity and originality Paolo Bulgari, Chairman” of Bulgari The alliance between my Group and the Bulgari Family is a perfect 5 Shared vision of family control and long-term combination from all points of view as we share the same culture in terms strategy of respect for identity and roots of the brands, quest for excellence, creativity and innovation. ” Bernard Arnault, Chairman and CEO of LVMH Benefit of the leadership of Francesco Trapani as Our entrance into LVMH will allow Bulgari to reinforce its worldwide 6 Head of the enlarged LVMH Watches & Jewelry growth and to realise noteworthy synergies, in particular in the areas of division purchasing and distribution. ” Francesco Trapani, CEO of Bulgari Strategic alliance between the Bulgari Family and LVMH based on shared philosophy and a clear and strong industrial transaction rationale

Source: Company data. Confidential 14 Enthusiastic press reaction

It took 10 long years of relentless pursuit, but finally, this week, The luxury megadeal is back, thanks to Bernard Arnault… In luxury titan LVMH Moët Hennessy Louis Vuitton announced it has typical Arnault , the acquisition will immediately reshape the bagged Bulgari, the storied jewelry house. Bulgari is one of the last landscape of the fine jewelry and watch sector, stepping up family-controlled luxury brands and the first major acquisition of LVMH pressure on LVMH's competitors Swatch Group and Compagnie chair Bernard Arnault in the last 10 years. Analysts told The Financial Financière Richemont SA and potentially stirring other deals in the Times—which first broke the news in its online edition—that “the deal luxury sector. the Bulgari deal will double the size of LVMH's watch and was unprecedented in terms of the price and the incentives given jewelry division in one fell swoop, make the Bulgari family the second- to the Bulgari family.” largest family shareholders in LVMH after Arnault himself, with a 3.3 ” percent stake, and give Bulgari the financial muscle to further expand Inquirer, 11 March 2011 its product categories and retail footprint ”Conde Nast, 8 March 2011 The peaceful negotiations between LVMH and the Bulgari family stand in stark contrast to LVMH’s battle with a hallowed name in French luxury, Hermès, whose controlling family has largely A person close to the deal said that the Bulgari family, which united in an effort to fend off its acquisitive rival. Mr. Arnault surprised includes brothers Paolo and Nicola, were united in their decision to the family late last year when he revealed that, through derivatives, he agree to a share swap with Bernard Arnault, chairman and chief had amassed a 20 percent stake in the maker of Kelly and Birkin executive of LVMH handbags and iconic colorful . Luca Solca, a ” analyst at the research firm Sanford C. Bernstein, said: ‘‘The major Financial Times, 7 March 2011 difference is that Bulgari wants to play ball while the controlling family at Hermès doesn’t and slammed the door in the face of Mr. Arnault and LVMH. At the end of the day, if you have other people involved in your company, you need to get along with them and share a Arnault, a friend of French president Nicolas Sarkozy, had been common view on how the business can be developed.’’. courting Bulgari's Trapani family for nearly a decade, people close ” to the talks said Monday... Arnault also found the right arguments International Herald Tribune, 8 March 2011 to convince Bulgari's controlling shareholder, the Trapani family, which was still saying a year ago the company was not for sale. He offered them 3.5 percent of LVMH, an unprecedented move for that company, which has made most of its acquisitions in cash. As befits a high-end jeweler, Bulgari has secured a top price. Arnault also offered Bulgari two seats on the LVMH board. The LVMH Moët Hennessy Louis Vuitton offered €4.3 billion ($6.01 billion) package was attractive enough to best rivals such as retailer PPR and for the Italian jeweler, including debt, on Monday, valuing it at an eye- 's Richemont, which both tried to woo Bulgari, people close watering 22 times forecast 2011 earnings before interest, taxes, to the groups said. depreciation and amortization, or Ebitda, well above LVMH's 10 times ” valuation.” Reuters, 7 March 2011 The deal has received greatWall Street attention Journal, 8from March international 2011 press due to its size and complexity

Confidential 15 Positive reaction from research community Post 07 March 2011 (Announcement date)

Brokers’ recommendations and target prices Selected brokers’ comments

Rec ommendation On fundamentals, our fair valuation stands at €8.54 per share and our to tender Prem. / (disc.) positive view on the group’s prospects has been based on the Italian jeweller’s Brokers TP (€) Rating Date the s hares vs forec as t date superior earnings growth given the exposure to high-growth emerging markets (China accounts for 18% of group sales and emerging markets around 30%)

Mediobanc a 12.25 Sell 08-Mar-11 Yes 1.2% and the lean costs structure which provides operating leverage. Consequently, the bid of €12.25 is undoubtedly generous and provides Natixis 12.25 Sell 08-Mar-11 Yes 1.2% some 44% upside to our fair value. Tendering the shares to LVMH seems a suitable choice to us so we would accept the deal. We consequently Unicredit 12.25 Hold 08-Mar-11 Yes 1.2% raise our TGT price to €12.25 per share.

C iti 12.25 Hold 16-Mar-11 Yes 0.7% Mediobanca, 08 March 2011

UBS 12.25 Hold 18-Mar-11 NA 0.3% Friday after the close Bulgari in principle posted its last set of full-year Goldman Sachs 12.25 Hold 07-Apr-11 NA – results as an independent listed company. The margins improvement continued in Q4 2010, with an adjusted EBIT margin of 12.5% (+220bp), in line S oc iete Generale 12.37 Sell 20-Apr-11 Yes 0.8% with our expectations and close to those of the consensus. In contrast, net profit came to €28m, falling well below our €36m forecast owing to a 4% surge Average 12.27 0.8% in the tax rate to 27.5%. We continue to believe the company and majority family owners were right to accept LVMH’s acquisition/partnership offer, Median 12.25 0.8% the terms of which are particularly good and motivating. Now LVMH has to Minimum 12.25 – significantly and sustainably boost the brand’s margins and kick start growth at the watches division. Maximum 12.37 1.2% Societe Generale, 14 March 2011

We believe that leveraging LVMH's stronger watches & jewellery platform, managerial skills and financial resources, will help Bulgari to exploit the full long-term potential of its brand, boosting sales and profits at a much faster pace than on a stand-alone basis. We thus recommend tendering shares to the LVMH's offer. Unicredit, 08 March 2011 The deal has been well perceived by brokers, thanks to the attractive valuation offered to Bulgari shareholders

Source: FactSet, brokers’ reports. Confidential 16