Form 20-F X Form 40-F ______

(Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934).

Yes ______ No X

Benetton Group's Half Year Report as of June 30, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Benetton Group S.p.A.

By: /s/ Luciano Benetton

______________________

Name: Luciano Benetton

Title: Chairman

Dated: September 22, 2003

Benetton Group

2003 half-year report

Benetton Group S.p.A.

Villa Minelli

Ponzano Veneto (Treviso) - Italy

Share capital: euro 236,026,454.30 fully paid-in

Tax ID/Treviso Company register: 00193320264

3 Directors and other officers

4 Financial highlights

The new approach

Economic results

Brands and markets

Technology

Capital expenditures

Communication

6 Supplementary information

- Distribution of dividends

- Financial management

- Treasury shares

- Relations with the Parent Company and its subsidiaries

- Directors

7 - Principal organizational and corporate changes

- Significant events after June 30, 2003

- Outlook for the full year

8 Group results

- Consolidated statement of income

10 - Financial situation - highlights

13 Balance sheet - Assets

15 Balance sheet - Liabilities and Shareholders' equity and Memorandum account

17 Statements of income

19 Statements of changes in Shareholders' equity

20 Statements of changes in minority interests

21 Statements of cash flow

Activities of the Group

Form and content of the consolidated financial statements

Principles of consolidation

25 Accounting policies

Supplementary information

27 Comments on the principal asset items

33 Comments on the principal liability and equity items

39 Memorandum accounts

40 Comments on the principal statement of income items

Board of Directors

Luciano Benetton Chairman

Carlo Benetton Deputy Chairman

Silvano Cassano Managing Director

Giuliana Benetton Directors

Gilberto Benetton

Alessandro Benetton

Reginald Bartholomew

Luigi Arturo Bianchi

Sergio De Simoi

Gianni Mion

Ulrich Weiss

Pierluigi Bortolussi Secretary to the Board

Board of Statutory Auditors

Angelo Casò Chairman

Filippo Duodo Auditors

Dino Sesani

Antonio Cortellazzo Alternate auditors

Marco Leotta

Independent Auditors

Deloitte & Touche S.p.A.

(1) Net of treasury shares held during the period

Having completed the disposal of the sports brands, the arrival in May 2003 of the new management team lead by Silvano Cassano, managing director, represents the first step in refocusing the Benetton Group on its core business of clothing, honing its competitive edge and continuing the dynamic expansion of activities. New management, including the Finance, Marketing, Production, Sales, Human Resources and Product directors, has begun to elaborate a long-term development plan which will be presented to the international markets in December 2003.

Consolidated revenues for the first half of 2003 were 969 million euro, compared with 1,002 million euro in the comparative period of 2002. This reduction was principally due to currency impact linked to the US dollar and the yen. Excluding this effect, sales would have been in line with those of the prior period.

Net income was about 50 million euro, amounting to 5.2% of revenues, compared with 60 million euro in the first half of 2002; normalized net income for the period was 73 million euro.

Gross operating income was 415 million euro versus 453 million euro in the comparative period of 2002. Income from operations, 130 million euro, was 13.4% of sales (13.5% in the first half of 2002). Ordinary income (income from operations plus net financial charges and the foreign exchange gains/losses) was 122 million euro, rising one point as a percentage of revenues with respect to the first half of 2002.

Group self-financing totaled 157 million euro, down from 188 million euro in the first half of 2002. Shareholders' equity as of June 30, 2003 amounted to 1,117 million euro.

Net indebtedness amounts to 571 million euro (compared with 702 and 613 million euro, respectively, as of June 30 and December 31, 2002). This improvement largely reflects the effect of sports equipment brands disposal.

A "Market analysis" department has been created within the Marketing function with a view to positioning the United Colors of Benetton, Sisley, Playlife and Killer Loop brands in a more precise and distinctive fashion. The intention is to translate their international renown into improved opportunities for growth in the various markets.

Efforts have continued to delocalize manufacturing within Europe, particularly in the east, and Tunisia, where a project has been launched to double production capacity over the next two years.

Installation of SAP was progressed during the first half of 2003, in order to integrate on one on-line technological platform all the clothing-business processes of the various companies within the Benetton Group. The overall project has been subdivided into parallel sub-projects, coordinated to ensure final integration, covering: sales, central production, distribution, indirect purchasing and finance, as well as the foreign manufacturing locations.

During the first half of 2003 the Group invested over 91 million euro in fixed assets, compared with 85 million for the same period in 2002. Most investments went into the retail network; the Group spent 73 million euro on the purchase, modernization and upgrading of buildings that will house megastores. Production investments came to 11 million euro and mainly concerned the Group's italian manufacturing companies.

Once again, the worldwide 2003 communications campaign for United Colors of Benetton has made the ability and experience of the Group available to an important humanitarian organization for communications on social issues. Food for life, devised and implemented by Fabrica together with the WFP-World Food Programme (the largest international aid organisation for the relief of hunger), reminds us that, beyond personal survival, food represents an important driver for both peace and the social and economic development of emerging nations. This project also included a special edition of Colors and a volume published by Electa on the anthropological and artistic aspects of food.

Distribution of dividends. The Shareholders of Benetton Group S.p.A. voted on May 12, 2003 to distribute a dividend of 0.35 euro per share, for a total of 63,545 thousand euro.

Financial management. The Group has reserved a particula attention for trends in the financial markets, especially the direction taken by interest and exchange rates. It handles financial risks by constantly monitoring its exchange and interest rate positions, which it actively manages in keeping with budget objectives.

Financial management during the semester benefited from the effects of the sports equipment business disposal and the general reduction in interest rates. These factors improved the level of Group indebtedness and lowered net financial charges.

Treasury shares. During the period, Benetton Group S.p.A. neither bought nor sold any treasury shares, shares or quotas in parent companies, either directly or indirectly or through subsidiaries, trustees or other intermediaries.

Relations with the Parent Company and its subsidiaries. The Benetton Group had limited trading dealings with Edizione Holding S.p.A. (the Parent Company), with its subsidiaries and with other parties which, directly or indirectly, are linked by common interests with the majority Shareholder. Trading relations with such parties are conducted on an arm's-length basis. These transactions relate primarily to purchases of tax credits and services.

The relevant totals appear below:

The Group has undertaken some transactions, mainly relating to manufacturing activities, with companies directly or indirectly controlled, or in any case under the influence of managers serving within the Group. The Company's management believes that such transactions were completed at going market rates. The total value of such transactions was not, in any case, significant in relation to the Group's total production value. No Director, Manager, or Shareholder is a debtor of the Group.

Directors. The Company's directors as of June 30, 2003 are as follows:

Luciano Benetton, Gilberto Benetton, Carlo Benetton are brothers; Giuliana Benetton is their sister; Alessandro Benetton is Luciano Benetton's son.

Principal organizational and corporate changes. In January 2003 the Benetton Group reached an agreement with the Tecnica Group for the sale of the business relating to the Nordica brand. The sale took effect from February 1, 2003. The overall price for the transaction was determined from a valuation of all the components comprising the business. The value of intellectual property alone, including the Nordica trademark, was fixed at 38 million euro. Collection will take place in six-monthly installments over 5 years, starting in 2004. Under this agreement, Benetton Group S.p.A. has acquired 10% of Tecnica S.p.A.'s share capital with a guaranteed put (sale) option exercisable from February 1, 2008, as well as a call (repurchase) option exercisable by Tecnica S.p.A. between February 1, 2006 and January 31, 2008. This acquisition is valued at 15 million euro.

At the end of March, the Group also formalized the sale of the Prince and Ektelon brands to Lincolnshire Management Inc., a U.S. private equity fund. The consideration for the sale of these brands and the associated intangible fixed assets amounts to 36.5 million euro, of which 10 million euro was received on April 30, the sale's completion date; the remaining 26.5 million euro will be received in January 2004.

Again during March 2003, the Benetton Group signed a binding preliminary agreement for the sale of the Rollerblade trademark to Prime Newco, a company within the Tecnica Group. This transaction was formalised at the end of June with the receipt, collected in full on the contract date, of 20 million euro just for the Rollerblade trademark. Other components of the business and the entire interest in the Swiss subsidiary, Benetton Sportsystem Schweiz A.G., subject to separate valuations, were also transferred at the same time. As additional consideration for the transfer of know-how, the Group will also receive 1.5% of Rollerblade's sales for the next five years, with a minimum guaranteed payment of 5 million euro; the results of operations during the first six months of 2003 have been attributed to the Group.

With regard to manufacturing activities, a new company has been formed in Tunisia under the name of Benetton Manufacturing Tunisia S.à. r.l., as part of the project to delocalize production.

The liquidation of Benest Ltd., a dormant company previously based in Moscow, was completed during the period.

Significant events after June 30, 2003. There are no significant events to report, except for the continuation or completion of the matters discussed in the preceding paragraph.

Outlook for the full year. As already mentioned, new management expects to present a long-term development plan for the Group to the international markets by the end of the year.

At the same time, a corporate reorganization has been planned in order to devolve operating activities to dedicated legal entities that are closer to the market, and to adjust the corporate and operating structure in line with the Group's new strategic guidelines. These steps will enhance the competitiveness and efficiency of the individual operating activities.

Results for the full year and net sales, in particular, will be influenced by two main factors: our price containment policy, due to increased competitive pressures, and the higher volume of sales. Revenues are expected to be in line with those for 2002, taking into consideration the exchange rate effect and the disposal of the sports equipment business.

On a consolidated basis, normalized net income for the year is expected to match, at least, the normalized results for 2002 (128 million euro).

Capital expenditure in 2003, principally focused on the project to develop the commercial network, is expected to be in line with the prior year.

In comparison with 2002, net indebtedness is expected to fall significantly as a consequence of the cash flow generated in the current year, partly from the various disposals in the sports sector.

Consolidated statement of income. The highlights of the Group's statement of income are presented below, together with those for the same period of last year. They are based on the reclassified statement of income adopted for internal reporting purposes.

Revenues for the first half of 2003 were about 33 million euro (-3.2%) lower than in the same period in 2002. This fall was heavily affected by exchange rate movements, particularly with regard to the dollar and the yen, with an impact at a consolidated level of more than 34 million euro. Excluding this effect, consolidated sales would have been in line with those for the comparative period in 2002.

The cost of sales edged from 549 million to 554 million euro, representing 57.2% of net sales compared with 54.8% in the first half of 2002. This trend, particularly influenced by the growth in casual wear, reflects the higher volume of sales and increased costs associated with the enrichment of the product.

Gross operating income represents 42.8% of net revenues, down from 45.2% previously; this effect was caused by the exchange rate impact and by a different product-mix in the casual wear collections.

Variable selling costs totaled 58 million euro or 5.9% of sales, compared with 6.1% in 2002. This improvement was mostly due to lower costs in the casual sector.

General and administrative expenses decreased by around 30 million euro (-11.7%) with respect to the comparative period of last year. Accordingly, they have improved from 25.6% to 23.5% of net sales. Lower costs mainly reflect the disposal of the sports equipment business, with consequent benefits regarding depreciation, payroll costs and the other general expenses of that sector; the casual wear business has also reported a significant reduction in general expenses, which fell by 3% with respect to the first half of 2002.

Income from operations recovered as a result of lower general expenses and overheads, representing 13.4% of net revenues compared with 13.5% in the prior year. The results from currency management also improved as a result of exchange rate movements during the period.

Net financial charges fell to 17 million euro, or 1.8% of sales; this was principally due to lower average indebtedness and to the effect of lower interest rates.

As a result, the ordinary income improved from 116 to 122 million euro, representing 12.6% of consolidated net sales.

Other charges reflect extraordinary events that took place in the period, such as acceptance of the tax amnesty by Italian companies and the adjustment to current values of certain assets connected with the management of the sales network; these events had a marked effect on net income for the period which amounted to about 50 million euro, or 5.2% of sales, compared with 60 million euro in the first half of 2002. Normalized net income, after eliminating the effect of extraordinary charges, amounted to 73 million euro or 7.6% of net sales.

Revenues by geographical area are as follows:

Sales by geographic area reflect the adverse impact on the foreign markets of exchange rate movements. In particular, the dollar area has penalized the results for the semester.

> Performance by activity. The Group's activities are traditionally divided into three sectors to provide the basis for effective administration and adequate decision-making by company management, and to supply accurate and relevant information about company performance to financial investors.

The business sectors are as follows:

• the casual wear sector, representing the Benetton brands (United Colors of Benetton, Undercolors and Sisley), which also incorporates complementary products, such as accessories and footwear, as well as figures for the retail business;
• the sportswear and equipment sector, with the Playlife, Nordica, Prince, Rollerblade and Killer Loop brands; the contribution made in this area by the various brands was not consistent during period, since Nordica, Prince and Rollerblade contributed for one, four and six months, respectively, to the Group's results;

• the manufacturing and others sector, including sales of raw materials, semi-finished products, industrial services and revenues and expenses from real estate activity.

Information regarding the "casual wear" and "manufacturing and other" sectors for 2002 has been appropriately reclassified to eliminate intercompany effects, in order to reflect the real contribution made by each sector to the consolidated results.

Sector revenues decreased by 2.2%. Excluding the adverse impact of exchange rate movements, the revenues of the casual wear sector would have increased by 0.6% and, accordingly, would have been in line with the prior year; the action taken by the Group to contain prices in order to combat competitive pressures is relevant in this context. Cost of sales has increased as a percentage of net revenues due to both the higher volume of production and increased costs connected with the enrichment of the product. Gross margin has eased from 49% to 46.2% of sales.

Selling, general and administrative expenses have decreased following implementation of an incisive cost containment plan.

Income from operations, 125 million euro, represents 16% of net sales.

The sports sector was influenced by the disposal of the sports equipment business; lower sales during the period were also due to the exchange rate movements which penalized the Group, contributing 8.1% out of the 12.1% total change in revenues.

Gross operating income of 40 million euro represents 33.3% of sales.

Income from operations benefited from the absence of depreciation and other selling, general and administrative expenses associated with the business disposals.

The sales of the manufacturing sector were slightly better than in the prior period. Gross operating income represents 19.9% of total sales, compared with 17.9% in the first half of 2002. Income from operations was essentially stable.

Financial situation - highlights. The Group's financial position is summarised below on a comparative basis with the situation at the end of 2002:

Consistent with the situation as of December 31, 2002, the effect of restructuring the sports equipment sector, representing the total realizable value of the assets to be sold, has been shown separately from working capital. The decrease since December represents the value of the businesses already sold regarding the Nordica, Prince and Rollerblade trademarks, following implementation of the related disposal contracts. The balance represents the sales value agreed during the first half of 2003 of real estate belonging to a foreign subsidiary that is used in the business sold.

Compared with the situation as of December 31, 2002, working capital has decreased by about 21 million euro to 777 million euro. This reduction mainly reflects lower inventories of about 27 million euro, partly due to the disposal of the sports equipment sector.

Working capital has decreased by 69 million euro since June 30, 2002, of which about 48 million euro relates to the core business and 21 million euro to the disposal of the sports equipment business.

Total capital employed has decreased from 1,768 million euro to 1,703 million euro due to the combined effect of various factors, such as additions to tangible, intangible and financial fixed assets, net of disposals.

Cash flows during the half-year are summarized below with comparative figures for the same period of last year:

The self-financing generated by the Group as of June 30, 2003 amounted to 157 million euro, compared with 188 million euro in the first half of 2002.

The sale of the sports equipment business was a significant element of total disposals during the period.

Further information of an economic and financial nature is provided in the financial statements and explanatory notes.

Balance sheet - Assets (thousands of euro)

Balance sheet - Liabilities and Shareholders' equity (thousands of euro)

Memorandum accounts (thousands of euro)

Statements of income (thousands of euro)