Aeffe

Interim / Quarterly Report • Nov 11, 2021

This Interim financial statement has been translated into English solely for the convenience of the International reader. In the event of conflict or inconsistency between the terms used in the Italian Version of the report and the English version, the Italian version shall prevail, as the Italian version constitutes the official document.

SUMMARY

INTERIM FINANCIAL STATEMENT AT 30 SEPTEMBER 2021	1
CORPORATE BOARDS OF THE PARENT COMPANY	3
ORGANISATION CHART	4
BRANDS PORTFOLIO	5
HEADQUARTERS	6
SHOWROOMS	7
MAIN FLAGSHIPSTORE LOCATIONS UNDER DIRECT MANAGEMENT	8
MAIN ECONOMIC-FINANCIAL DATA	9
FINANCIAL STATEMENTS	10
INTERIM MANAGEMENT REPORT	15
EXPLANATORY NOTES	16

Corporate Boards of the Parent Company

Chairman

Massimo Ferretti

Deputy Chairman

Alberta Ferretti

Chief Executive Officer

Simone Badioli

Directors Marcello Tassinari – Managing Director Roberto Lugano Daniela Saitta Bettina Campedelli Michela Zeme Marco Francesco Mazzù

President

Stefano Morri

Board of Directors Board of Statutory Auditors

Statutory Auditors

Fernando Ciotti Carla Trotti

Alternate Auditors Nevio Dalla Valle Daniela Elvira Bruno

Compensation Committee

President Daniela Saitta

Members Roberto Lugano Michela Zeme

Risk and Sistainability Committee

President Bettina Campedelli

Members Roberto Lugano Daniela Saitta

Organisation chart

Brands portfolio

Headquarters

AEFFE

Via Delle Querce, 51 47842 - San Giovanni in Marignano (RN) Italy

MOSCHINO

Via San Gregorio, 28 20124 - Milan Italy

POLLINI

Via Erbosa I° tratto, 92 47030 - Gatteo (FC) Italy

VELMAR

Via Delle Querce, 51 47842 - San Giovanni in Marignano (RN) Italy

Showrooms

MILAN

(FERRETTI – PHILOSOPHY – POLLINI) Via Donizetti, 48 20122 - Milan Italy

LONDON

(FERRETTI – PHILOSOPHY – MOSCHINO) 28-29, Conduit Street W1S 2YB - London UK

NEW YORK

(GROUP) 30, West 56th Street 10019 - New York USA

MILAN

(MOSCHINO) Via San Gregorio, 28 20124 - Milan Italy

PARIS

(FERRETTI – PHILOSOPHY - MOSCHINO) 43, Rue due Faubourg Saint Honoré 75008 - Paris France

Main flagshipstore locations under direct management

ALBERTA FERRETTI
Milan
Rome
Paris
London
POLLINI
Milan
Venice
Bolzano

MOSCHINO

Milan Rome Capri Paris London New York Seoul Pusan Daegu

SPAZIO A

Varese

Florence Venice

Main economic-financial data

	Main economic-financial data
			9 M	9 M
			2021	2020
Total revenues	(Values in millions of EUR)		254.6	213.3
Gross operating margin (EBITDA) Net operating profit (EBIT)	(Values in millions of EUR) (Values in millions of EUR)		36.0 17.5	8.2 ( 12.5)
Profit before taxes	(Values in millions of EUR)		15.5	( 14.8)
Net profit for the Group	(Values in millions of EUR)		23.2	( 12.5)
Basic earnings per share	(Values in units of EUR)		0.232	( 0.125)
Cash Flow (net profit + depreciation)	(Values in millions of EUR)		41.2	5.0
Cash Flow/Total revenues	Ratio		16.2	2.4
		30 September	31 December	30 September
		2021	2020	2020
Net capital invested	(Values in millions of EUR)	271.7	319.7	338.0
	(Values in millions of EUR)	140.3	141.0	148.7
Net financial indebtedness Group net equity	(Values in millions of EUR)	131.3	148.2	158.0

		2021	2020	2020
Net capital invested	(Values in millions of EUR)	271.7	319.7	338.0
Net financial indebtedness	(Values in millions of EUR)	140.3	141.0	148.7
Group net equity	(Values in millions of EUR)	131.3	148.2	158.0
Group net equity per share	(Values in units of EUR)	1.2	1.4	1.5
Current assets/Current liabilities	Ratio	1.4	2.1	2.4
Current assets less invent./Current liabilities (ACID Test)	Ratio	0.7	0.9	1.0
Net financial indebtedness/Net equity	Ratio	1.1	0.8	0.8

Financial statements

Income statement at 30 September

(Values in units of EUR)	Notes	9 M	% on	9 M	% on	Change	%
		2021	revenues	2020	revenues
REVENUES FROM SALES AND SERVICES	(1)	250,032,610	100.0%	206,753,651	100.0%	43,278,959	20.9%
Other revenues and income		4,592,554	1.8%	6,585,061	3.2%	( 1,992,507)	(30.3%)
TOTAL REVENUES		254,625,164	101.8%	213,338,712	103.2%	41,286,452	19.4%
Changes in inventory		( 16,038,808)	(6.4%)	4,704,944	2.3%	( 20,743,752)	(440.9%)
Costs of raw materials, cons. and goods for resale		( 82,791,076)	(33.1%)	( 82,564,846)	(39.9%)	( 226,230)	0.3%
Costs of services		( 67,378,577)	(26.9%)	( 71,318,048)	(34.5%)	3,939,471	(5.5%)
Costs for use of third parties assets		( 3,677,942)	(1.5%)	( 4,537,669)	(2.2%)	859,727	(18.9%)
Labour costs		( 46,107,778)	(18.4%)	( 46,863,216)	(22.7%)	755,438	(1.6%)
Other operating expenses		( 2,594,051)	(1.0%)	( 4,606,953)	(2.2%)	2,012,902	(43.7%)
Total Operating Costs		( 218,588,232)	(87.4%)	( 205,185,788)	(99.2%)	( 13,402,444)	6.5%
GROSS OPERATING MARGIN (EBITDA)	(2)	36,036,932	14.4%	8,152,924	3.9%	27,884,008	342.0%
Amortisation of intangible fixed assets		( 3,196,909)	(1.3%)	( 3,351,174)	(1.6%)	154,265	(4.6%)
Depreciation of tangible fixed assets		( 3,278,509)	(1.3%)	( 3,867,836)	(1.9%)	589,327	(15.2%)
Depreciation of right-of-use assets		( 11,591,877)	(4.6%)	( 11,758,474)	(5.7%)	166,597	(1.4%)
Revaluations/(write-downs) and provisions		( 494,748)	(0.2%)	( 1,640,219)	(0.8%)	1,145,471	(69.8%)
Total Amortisation, write-downs and provisions		( 18,562,043)	(7.4%)	( 20,617,703)	(10.0%)	2,055,660	(10.0%)
NET OPERATING PROFIT/LOSS (EBIT)		17,474,889	7.0%	( 12,464,779)	(6.0%)	29,939,668	(240.2%)
Financial income		555,144	0.2%	503,979	0.2%	51,165	10.2%
Financial expenses		( 1,164,358)	(0.5%)	( 1,331,477)	(0.6%)	167,119	(12.6%)
Financial expenses on right-of-use asset		( 1,412,075)	(0.6%)	( 1,515,546)	(0.7%)	103,471	(6.8%)
Total Financial Income/(expenses)		( 2,021,289)	(0.8%)	( 2,343,044)	(1.1%)	321,755	(13.7%)
PROFIT/LOSS BEFORE TAXES		15,453,600	6.2%	( 14,807,823)	(7.2%)	30,261,423	(204.4%)
Taxes		7,703,488	3.1%	849,462	0.4%	6,854,026	806.9%
NET PROFIT/LOSS	(3)	23,157,088	9.3%	( 13,958,361)	(6.8%)	37,115,449	(265.9%)
(Profit)/loss attributable to minority shareholders		-	0.0%	1,430,496	0.7%	( 1,430,496)	(100.0%)
NET PROFIT/LOSS FOR THE GROUP		23,157,088	9.3%	( 12,527,865)	(6.1%)	35,684,953	(284.8%)
Basic earnings per share		0.232		( 0.125)
Dilutive earnings per share		0.232		( 0.125)

Income statement for the third quarter

(Values in units of EUR)	Notes	III O	% on	III Q	% on	Change	96
		2021	revenues	2020	revenues
REVENUES FROM SALES AND SERVICES	(1)	95,012,794	100.0%	87,891,804	100.0%	7,120,990	8.1%
Other revenues and income		1,162,581	1.2%	1,921,232	2.2%	(758,651)	(39.5%)
TOTAL REVENUES		96,175,375	101.2%	89,813,036	102.2%	6,362,339	7.1%
Changes in inventory		11,172,884)	(11.8%)	7,271,684)	(8.3%)	3,901,200)	53.6%
Costs of raw materials, cons. and goods for		26,949,431)	(28.4%)	28,543,245)	(32.5%)	1,593,814	(5.6%)
Costs of services		23,391,617	(24.6%)	25,894,836)	(29.5%)	2,503,219	(9.7%)
Costs for use of third parties assets		2,220,854)	(2.3%)	(1,855,907)	(2.1%)	(364,947)	19.7%
Labour costs		15,486,269)	(16.3%)	17,354,095)	(19.7%)	1.867.826	(10.896)
Other operating expenses		999,083)	(1.1%)	(1,312,028)	(1.5%)	312,945	(23.9%)
Total Operating Costs		(80,220,138)	(84.4%)	(82,231,795)	(93.6%)	2,011,657	(2.4%)
GROSS OPERATING MARGIN (EBITDA)	(2)	15,955,237	16.8%	7,581,241	8.6%	8,373,996	110.5%
Amortisation of intangible fixed assets		1,077,516)	(1.1%)	(1,118,627)	(1.3%)	41,111	(3.7%)
Depreciation of tangible fixed assets		1,104,575)	(1.2%)	(1,268,938)	(1.4%)	164,363	(13.0%)
Depreciation of right-of-use assets		3,752,996)	(3.9%)	(3,697,326)	(4.2%)	(55,670)	1.5%
Revaluations/(write-downs) and provisions		(181,661)	(0.2%)	(1,148,049)	(1.3%)	966.388	(84.2%)
Total Amortisation, write-downs and provisions		6,116,748)	(6.4%)	7.232.940	(8.2%)	1,116,192	(15.4%)
NET OPERATING PROFIT/LOSS (EBIT)		9,838,489	10.4%	348,301	0.4%	9,490,188	2,724.7%
Financial income		250.296	0.3%	250,681	0.3%	385)	(0.2%)
Financial expenses		560,839)	(0.6%)	847,849)	(1.0%)	287,010	(33.9%)
Financial expenses on right-of-use asse		376,088)	(0.4%)	432,692	(0.5%)	56,604	(13.1%)
Total Financial Income/(expenses)		686,631)	(0.7%)	1,029,860)	(1.2%)	343,229	(33.3%)
PROFIT/LOSS BEFORE TAXES		9,151,858	9.6%	(681,559)	(0.8%)	9,833,417	(1,442.8%)
laxes		3,421,827)	(3.6%)	804, 111)	(0.9%)	2,617,716)	325.5%
NET PROFIT/LOSS	(3)	5,730,031	6.0%	(1,485,670)	(1.7%)	7,215,701	(485.7%)
(Profit)/loss attributable to minority shareholders		4,141,016	4.4%	142,469)	(0.2%)	4,283,485	(3,006.6%)
NET PROFIT/LOSS FOR THE GROUP		9,871,047	10.4%	(1,628,139)	(1.9%)	11,499,186	(706.3%)

Reclassified balance sheet

(Values in units of EUR)	Notes	30 September	31 December	30 September
		2021	2020	2020
Trade receivables		60,115,371	39,094,519	47,971,218
Stocks and inventories		93,958,043	109,285,351	112,268,554
Trade payables		( 70,989,557)	( 69,328,170)	( 63,107,474)
Operating net working capital	(4)	83,083,857	79,051,700	97,132,298
Other short term receivables		28,591,086	28,570,739	27,924,325
Tax receivables		6,267,888	10,465,392	12,659,310
Derivative assets		-	-	-
Other short term liabilities		( 57,982,486)	( 16,676,076)	( 18,087,115)
Tax payables		( 5,815,626)	( 3,753,375)	( 3,691,125)
Derivative liabilities		-	( 349,002)	( 77,164)
Net working capital		54,144,719	97,309,378	115,860,529
Tangible fixed assets		59,465,478	61,657,913	62,617,672
Intangible fixed assets		69,756,705	72,489,488	73,226,955
Right-of-use assets		89,433,089	100,471,903	102,156,141
Equity investments		30,070	131,558	131,558
Other fixed assets		2,168,837	2,615,956	2,979,520
Fixed assets	(5)	220,854,179	237,366,818	241,111,846
Post employment benefits		( 4,434,299)	( 4,900,460)	( 5,002,330)
Provisions		( 1,600,775)	( 1,543,670)	( 1,945,741)
Assets available for sale		-	-	-
Long term not financial liabilities		( 1,158,814)	( 1,768,758)	( 859,503)
Deferred tax assets		19,170,998	21,287,015	17,971,454
Deferred tax liabilities		( 15,307,123)	( 28,016,336)	( 29,178,440)
NET CAPITAL INVESTED		271,668,885	319,733,987	337,957,815
Share capital		24,949,859	25,043,866	25,052,166
Other reserves		110,542,690	131,311,933	132,337,859
Profits/(Losses) carried-forward		( 27,320,769)	13,273,509	13,140,147
Profit/(Loss) of the period		23,157,088	( 21,396,847)	( 12,527,865)
Group interest in shareholders' equity		131,328,868	148,232,461	158,002,307
Minority interests in shareholders' equity		-	30,524,025	31,257,926
Total shareholders' equity	(6)	131,328,868	178,756,486	189,260,233
Short term financial receivables		( 2,849,987)	( 651,944)	( 683,293)
Cash		( 39,367,323)	( 39,828,260)	( 33,722,768)
Long term financial liabilities		45,791,467	34,348,837	36,997,305
Long term financial receivables		-	( 2,037,324)	( 2,135,292)
Short term financial liabilities		57,756,718	60,938,851	59,670,029
Financial debt without IFRS 16		61,330,875	52,770,160	60,125,981
Short term lease liabilities		13,249,056	12,974,406	13,458,777
Long term lease liabilities		65,760,086	75,232,935	75,112,824
Financial debt	(7)	140,340,017	140,977,501	148,697,582
Shareholders' equity and financial debt		271,668,885	319,733,987	337,957,815

Cash flow

Cash flow
(Values in thousands of EUR)	9 M	9 M
	2021	2020
Opening balance	39,828	28,390
Profit/loss before taxes	15,454	( 14,808)
Amortisation / write-downs	18,562	19,791
Accrual (+)/availment (-) of long term provisions and post employment benefits	( 409)	( 94)
Paid income taxes	( 827)	( 676)
Financial income (-) and financial charges (+)	2,021	2,343
Change in operating assets and liabilities	( 210)	( 8,849)
Cash flow (absorbed) / generated by operating activity	34,591	( 2,293)
Increase (-)/ decrease (+) in intangible fixed assets	( 464)	( 495)
Increase (-)/ decrease (+) in tangible fixed assets	( 1,086)	( 4,037)
Increase (-)/ decrease (+) in right-of-use assets	( 553)	( 3,200)
Investments and write-downs (-)/ Disinvestments and revaluations (+)	101	-
Cash flow (absorbed) / generated by investing activity	( 2,002)	( 7,732)
Other variations in shareholders' equity	( 30,377)	( 856)
Dividends paid	-	-
Proceeds (+)/repayment (-) of financial payments	8,260	25,509
	( 9,198)	( 7,232)
Proceeds (+)/ repayment (-) of lease payments	286	280
Increase (-)/ decrease (+) in long term financial receivables	( 2,021)	( 2,343)
Financial income (+) and financial charges (-)
Cash flow (absorbed) / generated by financing activity	( 33,050)	15,358
Closing balance	39,367	33,723

Changes in shareholders' equity

(Values in thousands of EUR)	Share capital	Share premium reserve	Cash flow reserve	Other reserves	Fair Value reserve	IAS reserve	Reamisurement of defined benefit plans reserve	Translation reserve	Profits/(Losses) carried- forward	Net profit / loss for the Group	shareholders' equity Group interest in	Minority interests in shareholders' equity	Total shareholders' equity
At January 1, 2021	25,044	70,144	( 252)	49,756	7,901	7,607				( 1,343) ( 2,502) 13,274 ( 21,397) 148,232		30,524	178,756
Allocation of 31/12/20 profit/(loss)	-	-	-	( 21,028)	-	-	-	-	( 369)	21,397	-	-	-
Dividends paid	-	-	-	-	-	-	-	-	-	-	-	-	-
Treasury stock (buy-back)/ sale	( 94)	( 473)	-	-	-	-	-	-	-	-	( 567)	-	( 567)
Total comprehensive income/(loss) at 30/09/21	-	-	252	-	-	-	-	599	-	23,157	24,008	-	24,008
Other changes			-	( 118)	-	-	-		- ( 40,226)	-	( 40,344)	( 30,524)	( 70,868)
At September 30, 2021	24,950	69,671		- 28,610	7,901	7,607			( 1,343) ( 1,903) ( 27,321) 23,157		131,329	- 131,329
(Values in thousands of EUR)	Share capital	Share premium reserve	Cash flow reserve	Other reserves	Fair Value reserve	IAS reserve	Reamisurement of defined benefit plans reserve	Translation reserve	Profits/(Losses) carried- forward	Net profit / loss for the Group	shareholders' equity Group interest in	Minority interests in shareholders' equity	Total shareholders' equity
At December 31, 2019	25,286	70,775	53	44,748	7,901	7,607		( 1,286) ( 1,976)	6,586	11,693	171,387	32,688	204,075
Allocation of 31/12/19 profit/(loss)	-	-	-	5,138	-	-	-	-	6,555	( 11,693)	-	-	-
Dividends paid	-	-	-	-	-	-	-	-	-	-	-	-	-
Treasury stock (buy-back)/ sale	( 234)	( 613)	-	-	-	-	-	-	-	-	( 847)	-	( 847)
Total comprehensive income/(loss) at 30/09/20	-	-	( 109)	-	-	-	-	99	-	( 12,528)	( 12,538)	( 1,430)	( 13,968)
Other changes	-	-		-	-	-	-	-	-	-	-	-	-

Interim management report

In the first nine months of 2021, consolidate revenues are equal to EUR 250,033 thousand compared to EUR 206,754 thousand in the first nine months of 2020, with an increase of 20.9% at current exchange rates (+21.2% at constant exchange rates).

In the first nine months of 2021 the consolidated Ebitda was equal to EUR 36,037 thousand (with an incidence of 14.4% of total sales), compared to EUR 8,153 thousand in the first nine months of 2020 (3.9% of total sales), with a EUR 27,884 thousand increase.

The marginality grew more than proportionally compared to the sales increase. This reflects both the significant sales increase and the positive results deriving from costs savings for personnel, rents and overheads, coming from the actions the Group put in place to face the consequences of the spread of the virus on a global scale.

At 30 September 2021, operating net working capital amounts to EUR 83,084 thousand (26.6% of LTM sales) compared to EUR 97,132 thousand at 30 September 2020 (33.6% of LTM sales).

The financial debt net of IFRS 16 effects at the end of September 2021 amounts to EUR 61,331 thousand compared to EUR 60,126 thousand at the end of September 2020, registering a EUR 1,205 thousand worsening.

The financial debt includes the first EUR 30 million of the EUR 67 million necessary to acquire the 30% of Moschino Spa:, not considering them, the financial debt net of the effect of IFRS 16 would have been EUR 31.3 million with a cash generation in the first nine months of 2021 equal to EUR 33 million.

Explanatory notes

Income statement

1. Revenues from sales and services

Nine months 2021 vs 2020

In the first nine months of 2021, consolidate revenues are equal to EUR 250,033 thousand compared to EUR 206,754 thousand in the first nine months of 2020, with an increase of 20.9% at current exchange rates (+21.2% at constant exchange rates).

The growth in the first nine months of the year reflects the extremely positive contribution provided in particular from the United States and Continental Europe and from direct online (+56% September 2021 vs September 2020).

Sales by brand

(Values in thousands of EUR)	9 M		9 M			Change
	2021	%	2020	%	Δ	%
Alberta Ferretti	13,697	5.5%	12,424	6.0%	1,273	10.2%
Philosophy	12,131	4.9%	11,126	5.4%	1,005	9.0%
Moschino	199,868	79.9%	163,327	79.0%	36,541	22.4%
Pollini	21,551	8.6%	16,977	8.2%	4,574	26.9%
Other	2,786	1.1%	2,900	1.4%	( 114)	(3.9%)
Total	250,033	100.0%	206,754	100.0%	43,279	20.9%

In the first nine months of 2021, Alberta Ferretti brand increases by 10.2%, generating 5.5% of consolidated sales, while Philosophy brand increases by 9.0%, generating 4.9% of consolidated sales.

In the same period, Moschino brand sales increase by 22.4%, contributing to 79.9% of consolidated sales.

Pollini brand increases by 26.9%, generating 8.6% of consolidated sales, while the other brands sales decrease by 3.9%, contributing to 1.1% of consolidated sales.

Sales by geographical area

(Values in thousands of EUR)	9 M		9 M			Change
	2021	%	2020	%	Δ	%
Italy	102,632	41.0%	93,028	45.0%	9,604	10.3%
Europe (Italy excluded)	80,664	32.3%	62,480	30.2%	18,184	29.1%
Asia and Rest of the World	50,137	20.1%	39,503	19.1%	10,634	26.9%
America	16,600	6.6%	11,743	5.7%	4,857	41.4%
Total	250,033	100.0%	206,754	100.0%	43,279	20.9%

In the first nine months of 2021, the Group registered double-digit growth in all markets in which operates, with very strong increases in Europe, Asia, Rest of the World and America.

In Asia and in the Rest of the World, the Group's sales totalled EUR 50,137 thousand, amounting to 20.1% of consolidated sales, recording an increase of 26.9% at current exchange rates compared to the first nine months of 2020. The Greater China area drove growth reporting a 35% increase.

(Values in thousands of EUR) 9 M 9 M Change 2021 % 2020 % Δ % Wholesale 189,425 75.8% 148,939 72.0% 40,486 27.2% Retail 50,840 20.3% 50,163 24.3% 677 1.3% Royalties 9,768 3.9% 7,652 3.7% 2,116 27.6% Total 250,033 100.0% 206,754 100.0% 43,279 20.9%
retail channel continued to be partially influenced by the limited tourists' flow.
In the first nine months of 2021, sales in Europe, contributing to 32.3% of consolidated sales, increased by 29.1% mainly thanks to the positive trend of Germany, UK and Eastern Europe in the wholesale channel. The
Sales in America, contributing to 6.6% of consolidated sales, posted an increase of 41.4% at current exchange rates, thanks to the excellent trend of both the retail and the wholesale channels, online included.

Sales by distribution channel

The sales of directly-operated stores (DOS), including direct online, (retail channel), equal to 20.3% of consolidated sales, showed a good recovery thanks to the progressive easing of the restrictions to the international travels. The retail channel showed an increase of 1.3% at current exchange rates compared to the correspondent period of last year. E-commerce sales, considered stand alone, posted instead a very positive trend in the period, recording excellent performances across all brands and geographies.

Royalty incomes increased by 27.6% compared to the first nine months of 2020 and represented 3.9% of consolidated sales.

Third quarter 2021 vs 2020

In the third quarter of 2021, revenues from sales and services are equal to EUR 95,013 thousand with an increase of 8.1% compared with EUR 87,892 thousand in the third quarter of 2020.

Sales by brand

(Values in thousands of EUR)	III Q		III Q			Change
	2021	%	2020	%	Δ	%
Alberta Ferretti	6,295	6.6%	5,721	6.5%	574	10.0%
Philosophy	4,955	5.2%	5,096	5.8%	( 141)	(2.8%)
Moschino	71,544	75.3%	69,091	78.6%	2,453	3.6%
Pollini	10,365	10.9%	7,014	8.0%	3,351	47.8%
Other	1,854	2.0%	970	1.1%	884	91.1%
Total	95,013	100.0%	87,892	100.0%	7,121	8.1%

In the third quarter of 2021, Alberta Ferretti brand increases by 10.0% generating 6.6% of consolidated sales, while Philosophy brand decreases by 2.8% generating 5.2% of consolidated sales.

In the same period, Moschino brand sales increase by 3.6% contributing to 75.3% of consolidated sales.

Sales by geographical area

Pollini brand increases by 47.8% generating 10.9% of consolidated sales, while the other brands sales
III Q Change
2020 % Δ
42,883 48.8% 1,066
24,546 27.9% 4,935
14,442 16.4% 823
6,021 6.9% 297

Sales in Europe increase by 20.1% contributing to 31.0% of consolidated sales to EUR 29,481 thousand.

In Asia and Rest of the World, sales are equal to EUR 15,265 thousand with an increase of 5.7% and a contribution of 16.1% of consolidated sales.

Sales in America are equal to EUR 6,318 thousand, contributing to 6.6% of consolidated sales, with an increase of 4.9%.

Sales by distribution channel

(Values in thousands of EUR)	III Q		III Q			Change
	2021	%	2020	%	Δ	%
Wholesale	68,389	72.0%	62,211	70.8%	6,178	9.9%
Retail	22,894	24.1%	23,052	26.2%	( 158)	(0.7%)
Royalties	3,730	3.9%	2,629	3.0%	1,101	41.9%
Total	95,013	100.0%	87,892	100.0%	7,121	8.1%

By distribution channel in the third quarter of 2021, wholesale sales increase by 9.9% contributing to 72.0% of consolidated sales.

Sales of our directly-operated stores (retail channel) amount to EUR 22,894 thousand with a decrease of 0.7% contributing to 24.1% of consolidated sales.

Royalty income is 41.9% higher than in the corresponding period of the previous year, representing 3.9% of consolidated sales.

2. Gross Operating Margin (EBITDA)

Nine months 2021 vs 2020

In the first nine months the consolidated Ebitda was equal to EUR 36,037 thousand (with an incidence of 14.4% of total sales), compared to EUR 8,153 thousand in the first nine months of 2020 (3.9% of total sales), with a EUR 27,884 thousand increase.

The marginality grew more than proportionally compared to the sales increase. This reflects both the significant sales increase and the positive results deriving from costs savings for personnel, rents and overheads, coming from the actions the Group put in place to face the consequences of the spread of the virus on a global scale.

For the prêt-à-porter division, in the first nine months of 2021 Ebitda was equal to EUR 21,776 thousand (with an incidence of 13.1% of total sales), compared to a EUR 5,866 thousand (3.9% of total sales) of the first nine months of 2020, recording a growth of EUR 15,910 thousand.

For the footwear and leather goods division, the Ebitda amounted to EUR 14,261 thousand (13.0% of total sales), compared to a EUR 2,287 thousand (2.8% of total sales), of the first nine months of 2020, with a EUR 11,974 thousand increase due to the sales increase.

Third quarter 2021 vs 2020

In the third quarter of 2021 consolidated Ebitda is EUR 15,955 thousand (with an incidence of 16.8% of consolidated sales), showing an increase of profitability compared to EUR 7,581 thousand in the third quarter of 2020, (with an incidence of 8.6% of consolidated sales).

3. Net Result

Nine months 2021 vs 2020

The net result posts a profit of EUR 23,157 thousand compared to a loss of EUR 13,958 thousand in the first nine months of 2020. The adjusted profit of the period, net of extraordinary fiscal benefits related to revaluations and realignments implemented in accordance with art. 110 of Law Decree 104/2020 ("August Decree"), amounted to EUR 8.2 million.

Third quarter 2021 vs 2020

In the third quarter of 2021 the net result is a profit of EUR 5,730 thousand showing an increase compared to a loss of EUR 1,486 thousand in the third quarter of 2020.

Segment information

Economic performance by Divisions

At international level, the Group is divided into two main business sectors:

• (i) Prêt-à porter Division;
• (ii) Footwear and leather goods Division.

Nine months 2021 vs 2020

The following tables indicate the main economic data for the first nine months of 2021 and 2020 of the Prêtà porter and Footwear and leather goods Divisions.

(Values in thousand of EUR)	Prêt-à porter Division	Footwear and leather	Elimination of	Total
9M 2021		goods Division	intercompany transactions
SECTOR REVENUES	166,775	109,935	( 26,677)	250,033
Intercompany revenues	( 11,150)	( 15,527)	26,677	-
Revenues with third parties	155,625	94,408	-	250,033
Gross operating margin (EBITDA)	21,776	14,261	-	36,037
Amortisation	( 14,791)	( 3,276)	-	( 18,067)
Other non monetary items:
Revaluations / write-downs	( 300)	( 195)		( 495)
Net operating profit / loss (EBIT)	6,685	10,790	-	17,475
Financial income	210	406	( 61)	555
Financial expenses	( 2,109)	( 528)	61	( 2,576)
Profit / loss before taxes	4,786	10,668	-	15,454
Income taxes	8,201	( 498)	-	7,703
Net profit / loss	12,987	10,170	-	23,157

(Values in thousand of EUR)	Prêt-à porter Division	Footwear and leather	Elimination of	Total
9M 2020		goods Division	intercompany
			transactions
SECTOR REVENUES	151,726	81,864	( 26,836)	206,754
Intercompany revenues	( 8,409)	( 18,427)	26,836	-
Revenues with third parties	143,317	63,437	-	206,754
Gross operating margin (EBITDA)	5,866	2,287	-	8,153
Amortisation	( 16,090)	( 2,888)	-	( 18,978)
Other non monetary items:
Revaluations / write-downs	( 376)	( 1,264)		( 1,640)
Net operating profit / loss (EBIT)	( 10,600)	( 1,865)	-	( 12,465)
Financial income	491	122	( 109)	504
Financial expenses	( 1,936)	( 1,020)	109	( 2,847)
Profit / loss before taxes	( 12,045)	( 2,763)	-	( 14,808)
Income taxes	494	356	-	850
Net profit / loss	( 11,551)	( 2,407)	-	( 13,958)

Prêt-à porter Division

Revenues of the prêt-à-porter division increase by 9.9% from EUR 151,726 thousand in the first nine months of 2020 to EUR 166,775 thousand in the first nine months of 2021.

EBITDA of the prêt-à-porter division, in the first nine months of 2021 is EUR 21,776 thousand (13.1% of sales) compared to an EBITDA of EUR 5,866 thousand in the first nine months of 2020 (3.9% of sales), showing an increase of EUR 15,910 thousand.

Footwear and leather goods Division

Revenues of the footwear and leather goods division increase by 34.3% from EUR 81,864 thousand in the first nine months of 2020 to EUR 109,935 thousand in the first nine months of 2021.

EBITDA of the Footwear and leather goods division amounts to EUR 14,261 thousand (13.0% of sales) compared to EUR 2,287 thousand in the first nine months of 2020 (2.8% of sales), with a EUR 11,974 thousand increase due to the sales progression.

Third Quarter 2021 vs 2020

The following tables indicate the main economic data for the third quarter of 2021 and 2020 of the Prêt-à porter and Footwear and leather goods Divisions.

(Values in thousand of EUR)	Prêt-à porter Division	Footwear and leather	Elimination of	Total
		goods Division	intercompany
III Q 2021			transactions
SECTOR REVENUES	61,876	41,733	( 8,596)	95,013
Intercompany revenues	( 3,836)	( 4,760)	8,596	-
Revenues with third parties	58,040	36,973		95,013
Gross operating margin (EBITDA)	9,735	6,220		15,955
Amortisation	( 4,852)	( 1,082)		( 5,934)
Other non monetary items:
Revaluations / write-downs	( 100)	( 82)		( 182)
Net operating profit / loss (EBIT)	4,783	5,056		9,839
Financial income	70	198	( 18)	250
Financial expenses	( 758)	( 197)	18	( 937)
Profit / loss before taxes	4,095	5,057		9,152
Income taxes	( 1,992)	( 1,430)		( 3,422)
Net profit / loss	2,103	3,627		5,730

(Values in thousand of EUR)	Prêt-à porter Division	Footwear and leather	Elimination of	Total
III Q 2020		goods Division	intercompany
			transactions
SECTOR REVENUES	63,096	34,173	( 9,377)	87,892
Intercompany revenues	( 3,553)	( 5,824)	9,377	-
Revenues with third parties	59,543	28,349		87,892
Gross operating margin (EBITDA)	5,859	1,722		7,581
Amortisation	( 5,147)	( 938)		( 6,085)
Other non monetary items:
Revaluations / write-downs	8	( 1,156)		( 1,148)
Net operating profit / loss (EBIT)	720	( 372)		348
Financial income	187	97	( 33)	251
Financial expenses	( 601)	( 713)	33	( 1,281)
Profit / loss before taxes	306	( 988)		( 682)
Income taxes	( 589)	( 214)		( 803)
Net profit / loss	( 283)	( 1,202)		( 1,485)

Balance sheet

4. Operating net working capital

At 30 September 2021, operating net working capital amounts to EUR 83,084 thousand (26.6% of LTM sales) compared to EUR 97,132 thousand at 30 September 2020 (33.6% of LTM sales).

The improvement of the incidence of net working capital on sales mainly refers to lower inventories.

5. Fixed assets

The change in fixed assets of 16,513 thousand at 30 September 2021 compared to 31 December 2020 is due to the amortisation of the period and to the capex realised during the first nine months of 2021.

6. Shareholders' equity

The Group's shareholders' equity moved mainly due to the profit for the period of EUR 23,157 thousand and the purchase of the 30% minority stake in Moschino Spa for a consideration of EUR 66,571 thousand, partially offset by the acquisition of the minority interests in shareholders' equity equal to EUR 30,524 thousand.

7. Net financial position

The financial situation of the Group as at 30 September 2021 shows a debt of EUR 140,340 thousand including the IFRS 16 effect, compared to the debt of EUR 148,698 thousand as of September 30, 2020, with an improvement of EUR 8,358 thousand (debt of EUR 140,977 thousand due to end of 2020) attributable to both the best results achieved and the effective management of working capital. The debt at 30 September 2021 relating to IFRS 16 amounts to EUR 79,009 thousand, of which EUR 13,249 thousand is current and EUR 65,760 thousand is non-current. Debt net of the IFRS 16 effect at the end of September 2021 amounts to EUR 61,331 thousand compared to the debt of EUR 60,126 thousand at the end of September 2020, recording a worsening of EUR 1,205 thousand.

On July 28, 2021, Aeffe SpA took over the 30% minority stake in Moschino SpA. The consideration for the acquisition of the shares, equal to EUR 66,571,000, was paid for EUR 30 million at the same time as the transfer of the shares while the residual amount of EUR 36,571,000 will be paid to the sellers by 30 November 2021.

Furthermore on October 26, 2021, Aeffe SpA has reached an agreement with Sinv S.p.A. to take over in advance the license for the production and distribution of "Love Moschino" women's apparel collections currently held by Sinv, following the acquisition of the full control of Moschino S.p.A. formalized last July. The consideration was set at EUR 3,637,000 and the relative payment will be made with cash on hand by 30 November 2021.

Other information

Earnings per share

Reference earnings

The calculation of basic and dilutive earnings per share is based on the following elements:

(Values in thousands of EUR)	30 September	30 September
	2021	2020
From continuing activities
Earnings for determining basic earnings per share	23,157	( 12,528)
Earnings for determing earnings per share	23,157	( 12,528)
Dilutive effects	-	-
Earnings for determing dilutive earnings per share	23,157	( 12,528)
From continuing and discontinued activities
Earnings for the period	23,157	( 12,528)
Earnings from discontinued operations	-	-
Earnings for determining basic earnings per share	23,157	( 12,528)
Dilutive effects	-	-
Earnings for determing dilutive earnings per share	23,157	( 12,528)
Number of reference share
Average number of shares for determing earnings per share	99,799	100,209
Share options	-	-
Average number of shares for determing diluted earnings per	99,799	100,209

Basic results per share

The profit attributable to holders of ordinary shares of parent company AEFFE S.p.A., amounts to EUR 23,157 thousand (September 2020: EUR -12,528 thousand).

Dilutive results per share

The calculation of diluted earnings per share for the period January - September 2021, matches with the calculation of basic earnings per share, as there are no tools with potential dilutive effects.

Significant events subsequent to the balance sheet date

On October 26, 2021, Aeffe SpA has reached an agreement with Sinv S.p.A. to take over in advance the license for the production and distribution of "Love Moschino" women's apparel collections currently held by Sinv, following the acquisition of the full control of Moschino S.p.A. formalized last July.

Atypical and/or unusual transactions

Pursuant to Consob communication n. DEM/6064293 dated 28 July 2006, it is confirmed that during the first nine months of 2021, the Group did not enter into any atypical and/or unusual transactions, as defined in that communication.

Significant non-recurring events and transactions

On 28 July 2021, Aeffe S.p.A. acquired from Sinv Holding S.p.A., Sinv Real Estate S.p.A. and Sinv Lab S.r.l., the minority stake of Moschino S.p.A., allowing Aeffe to take full ownership of the Company.

The transaction is part of the strategy related to the Moschino brand, which aims at the process of future integration of the womens' apparel collections into Aeffe Group to enhance their potential thanks to the exploitation of synergies.

The transaction has a high strategic value for the AEFFE Group and represents an important opportunity for business growth and development allowing an agile and flexible planning of medium-long term strategies and activities related to the Moschino brand, with the aim to strengthening its positioning and enhancing its high great growth potential.The operation is part of the development strategy focused on a completely independent business model, with full controll of the brand value chain, from product to quality and with positive effects on image, distribution and communication.

The consideration for the purchase of the shares, equal to Euro 66,571,000, was paid for Euro 30 million at the same time as the transfer of the shares, while the remining amount of Euro 36,571,000 will be paid to the sellers by 30 November 2021. The fairness of the price was confirmed by an independent fairness opinion issued by Deloitte Financial Advisory S.r.l. on 22 July 2021.

To pay the fee, Aeffe has used and will use cash on hand, existing credit lines and new medium / long-term loans.

Outlook

The performance of the first 2021 nine months has been characterized by the good progression of all Group's brands, on the point of view of turnover as well as on the marginality one. Looking at the future, good signals come from the Spring-Summer 2022 sales campaign, which closed with a 22% increase compared to counter-season last year. Furthermore, the whole control of Moschino and the internalization of

Moschino Donna licenses starting from the autumn-winter 2023 season will allow to implement strategies able to express to the best the brand's potential.

The executive responsible for preparing the company's accounting documentation Marcello Tassinari declares, pursuant to paragraph 2 of art. 154b of the Consolidated Finance Law, that the accounting information contained in this document agrees with the underlying documentation, records and accounting entries.