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Buongiorno, sharp growth for the First Half of 2006: EBITDA increased 173% compared to 2005

Milan, September 12, 2006 – The Board of Directors of Buongiorno S.p.A. (MTAX STAR, Borsa Italiana: BNG), a multinational operating in the market of multimedia content via telephone and digital channels, approved today the figures for the first quarter 2006, drafted in accordance with the International Accounting Standards (IAS/IFRS).

The results released to the market on August 3, 2006 after analysing the Quarterly Report at June 30, 2006 have been confirmed. The reclassified consolidated Profit and Loss Account, Balance Sheet, and Cash Flow, and the Parent Company reclassified separated Profit and Loss Account and Balance Sheet are attached to this release. The main comments on the 2006 Half-Year Report of Buongiorno Group are reported below.

Value of Production for H1 2006 grew by 68% compared to the same period of 2005, thus increasing from Euro 58.9 million to Euro 99.2 million. Core business revenues for the first half of 2006 increased 70% compared to the previous year, reaching Euro 98.3 million.

The increase in revenues was mainly attributable to the “organic” growth of business and, to a lesser extent, to the effect of acquisitions completed in the second half of 2005 (Dioranews, Tutch and Freever). These acquisitions accounted for around 8% of revenues in the first half of the year and so only for 13% of the 68% revenue growth rate for the period.

The geographical breakdown shows that the sharp increase in revenues was driven by the US, where sales increased over 6 times from Euro 4.9 million in 2005 to Euro 33.4 million in 2006. Growth was also sustained in the Iberian Peninsula and South America (+26%). Revenues in central Europe also increased 30% year-on-year, boosted by acquisitions made in the second half of 2005; in northern Europe, while Consumer Services grew significantly, Marketing Services were downsized, especially the CD Premium segment, in accordance with the Industrial Plan, leading to an overall 4% contraction in revenues in the region. The Group’s objective of geographically diversifying its revenues has now been completely achieved with the balanced mix among the various regions.

Moreover, in the first six months of 2006, the Group continued in its internationalization process, setting up subsidiaries in Turkey, Brazil, Bolivia, Ecuador, Peru, Colombia and Chile. Furthermore, in August, the Group’s US subsidiary acquired the US company Rocket Mobile and Mr. Fernando Gonzales Mesones assumed responsibility for North America, Latin America, and the Iberian peninsula.

In terms of business lines, the most significant share of core business revenues was represented by revenues from Consumer Services, that grew 95% compared to the same period in 2005, rising from around Euro 47 million to Euro 91.5 million, and thus accounting for 93% of total revenues in H1 2006.
Marketing Services revenues dropped 37% from Euro 10.9 million in H1 2005 to approximately Euro 6.8 million in the same period of 2006. This decrease is consistent with the Group’s strategic decision to focus only on several specific operations, relationship marketing in particular.

Operating costs show a different trend compared to the same period in 2005 due to the change in revenue breakdown, which features a much sharper prevalence of income from Consumer Services out of the total revenues figure (81% in 2005 compared with 93% in 2006). The cost of services and use of third-party assets increased 67% from Euro 43.6 million in the first half of 2005 to Euro 72.7 million, in line with the increase in revenues. The strategic decision to invest in the direct distribution channel for services using the company-owned Blinko trademark, mainly in Spain and in non-European countries, required a significant increase in marketing expenses, the bulk of which was allocated to gaining new subscribers to the various wireless services.

Industrial Added Value (IAV), calculated as core business revenues minus the variable cost of sales and marketing expenses, was approximately Euro 36 million in the six months, up about 62% compared to Euro 22.1 million in the same period of the prior year.

The ratio of personnel costs to revenues decreased from 19.8% to 16.3%, despite a 40% increase in these costs, from Euro 11.5 million in the first half of 2005 to Euro 16 million in the first half of 2006. About Euro 543 thousand were non monetary costs relating to stock option plans currently in force (IFRS 2). Average employees increased from 421 in the first half of 2005 to 618 in the first half of 2006 (623 at the end of June 2006). The growth in the workforce has taken place primarily in the United States and in the new areas of business development and enhancement, including the acquisitions carried out in France and the Netherlands, which contributed with 150 new staff.

Consolidated Gross Operating Margin (GOM/EBITDA) for the half year amounted to Euro 10.4 million, a 173% increase compared to the same period in 2005 (Euro 3.8 million); the ratio of GOM to revenues improved from 6.6% to 10.6%. Operating Income for the period was Euro 8.1 million, compared to Euro 1.9 million in the first half of 2005.

Profit before taxation for the period amounted to Euro 5.9 million, compared to Euro 1.3 million in the first half of 2005. Taxes for the period amounted to around Euro 455 thousand, mainly IRAP. Consolidated Net Income before minorities amounted to approximately Euro 5.5 million in the first half of 2006, up from Euro 1.1 million in the same period of the previous year.

At the end of August, Mitsui & Co., Ltd. and Buongiorno SpA agreed upon the amendment of their shareholders’ agreements on the equity investment in Buongiorno USA Inc.. More specifically, the clause pertaining to the PUT/CALL option on Mitsui’s minority interests in the company has been eliminated in full. As of September 30, the original capital increase will no longer be accounted for as a financial debt. It will instead be recognized in equity reserves.

As of June 30, 2006, the Buongiorno Group’s Net Invested Capital amounted to Euro 57 million, including Net Fixed Assets of Euro 59 million and Net Working Capital of Euro 14 thousand, the Fund for Risks and Charges and the Severance Indemnity Fund, which totalled approximately Euro 2.1 million. At June 30, 2006, the Group had a consolidated Net Financial Position of Euro 1.1 million, compared to a negative amount of Euro 4.4 million in Q1 2006 and of Euro 6.5 million at December 31, 2005, reflecting the Company’s strong ability to generate cash from ordinary operations, thus reducing the need for financing, especially short-term financing.

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About Buongiorno Group
Buongiorno S.p.A. (Italy, MTAX STAR: BNG) is a multinational operating in the market of multimedia content via telephone and digital channels. Buongiorno is one of the major groups worldwide in the mobile Value Added Service sector, is the market leader in Europe and has a significant position in the US and in Latin America. Buongiorno operates in Russia and Asia Pacific through a joint venture with the Japanese Group Mitsui & Co., Ltd. Buongiorno operates with two business lines: value-added services for mobile and fixed-line telephone users (Consumer Services) distributed with the Blinko (www.blinko.com) brand through partnerships with the major media groups and telecommunications operators, and relationship marketing services (Marketing Services) for businesses.

Additional information about Buongiorno S.p.A. is available on the website www.buongiorno.com or by contacting:
Michaela M. Carboni Monica Montefusco
Investor Relations Director Global PR & Events Manager
Tel. +39 02 58213541 Tel. +39 02 58213548
Email: michaela.carboni@buongiorno.com Email: monica.montefusco@buongiorno.com