Basic Net SpA

Earnings Release • Oct 28, 2021

9m 2021 Results Conference call

October 28th 2021

Continuous growth of Aggregated sales of licensees at +16,5%. EBITDA at € 33,6m (€ 16,1m in 9m20) reported record performance in Q3 (€ 19,0m). NFP decreased at € 66,0m vs YE2020 (€ 82,2m).

9m aggregated sales amounted to € 692m (+13,7% YoY), led by aggregated sales of licensees (ASL) up 16,5% YoY. Aggregated sales of sourcing centers (ASSC) improved at +6,3% YoY.

Consolidated sales amounted to € 216m (+10,1% YoY). Direct sales of goods (+8,0% YoY) benefitted from a strong contribution from Kappa Europe (+19,9%), while suffering some delay to 4Q due to shipments issues.

EBITDA stood at € 33,6m (€ 16,1m in 9m 2020) driven by higher volumes in all geographies of direct operations. 3Q EBITDA exceeded 3Q 2019 EBITDA (€ 19,0m vs € 17,9m).

Net Financial Position, at € 66,0m, reduced to below pre-Covid indebtedness, thanks to free cash flow of the period exceeding € 23,5m.

€ 216m Consolidated Sales

€ 66,0m NFP

1

AGGREGATED SALES YTD

BY QUARTER

Aggregated Sales of Sourcing Centers (ASSC, € m)

Aggregated Sales of Licensees (ASL, € m)

Q1 Q2 Q3

2

Consolidated sales of goods (€ m)

Royalties income ASSC (€ m)

Royalties income ASL (€ m)

Q1 Q2 Q3

in € million

• Contribution margin: higher contribution margin mainly driven by sales in Italy (+3,1%) and strong growth at Kappa Europe (+19,9%). Margins remain overall stable despite the increase of shipping costs and raw materials.
• Royalties and sourcing: strong increase in both royalties from ASL (€ +5,0m), led by organic growth, and ASSC (+€ 1,8m).
• Labour cost: slightly increased, mostly due to lower temporary layoffs vs last year.
• Sponsorship and media: lower costs of sponsorship agreements, mainly due to re-negotiations to account for the impact of covid-19 in H1 and substitution of sponsored teams.
• Other: mainly re-negotiations of leases for shops closed during the period (€ +0,5m) and lower bad debt provision (€ +1,2m).

9m 2021 Consolidated Net Financial Position

in € .000	30.09.21	31.12.20	30.09.20
Net Cash	2.031	(6.266)	(20.427)
ST portion of MT Loans	(8.620)	(8.412)	(8.124)
MT Loans	(38.207)	(44.387)	(30.163)
IFRS 16 debt	(21.165)	(23.097)	(21.429)
Net Financial Position	(65.959)	(82.162)	(80.143)
Equity	133.285	119.276	118.025
NFP/Equity	0,49	0,69	0,68

5

in € million	9m 2021	9m 2020	9m 2019
Consolidated sales	216,4	196,5	235,7
EBITDA	33,6	16,1	38,2
EBITDA margin	14,2%	7,6%	15,0%
EBIT	24,3	7,4	29,4
EBIT margin	10,3%	3,5%	11,5%
Free cash flow	23,5	8,3	(12,8)
Trade Working Capital	59,8	67,6	104,5

9m 2021 NFP Bridge

• Operating activities: positive adjusted net income (€ +25,3 m). Continuous improvement in net working capital optimisation.
• Investing activities: recurring capex (€ 4,4m) and renovation works at BasicVillage Milano (€ 2,0m).
• Financing activities: mainly dividend distribution (€ 3,1m), own shares buy-back (€ 2,6m) and additional IFRS 16 debt for new shops-related leases (€ 1,5m).

Back-Up

3Q 2021 Communication activities

Adjusted net income	Net result adjusted by Depreciation and amortization
Aggregated Sales of Licensees (ASL)	sales by commercial licensees
Aggregated Sales of Sourcing Centers (ASSC)	sales by productive licensees
Consolidated sales	the sum of royalties income from ASL, sourcing commissions from ASSC and direct sales of goods