Basic Net SpA — Call Transcript 2023

Jul 28, 2023

1H 2023 RESULTS CONFERENCE CALL

TURIN, 28 JULY 2023

EXECUTIVE SUMMARY NETWORK ACTIVITY

1H 2023

GROUP INTERIM RESULTS 1H 2023

EXECUTIVE SUMMARY

1H 2023 characterized by strong direct sales of goods (+15,55%) consistently with Q1 as network sales are basically steady due to a downfall in sales of sourcing centers (-7,0%). EBITDA slightly improving vs PY, NFP unchanged compared to Q1 and year-end levels.

TOTAL AGGREGATED SALES

01 EXECUTIVE SUMMARY

1H aggregated sales amounted to € 558,3 mln (-1,7% YoY), led by aggregated brand sales (ASL) up 0,7% YoY. Aggregated sales of sourcing centers (ASSC) reduced by -7,0% compared to 1H 2022 exceptional purchases following covid and logistics disruption.

GROUP CONSOLIDATED REVENUES

Group consolidated revenues amounted to € 180,0 mln (+10,9% YoY). Direct sales of goods (+15,5% YoY) benefitted from a strong performance of all countries and brands directly managed by the Group plus the consolidation of K-Way France (only Q2 in 2022).

EBITDA

EBITDA stood at € 22,6 mln (€ 22,4 mln in 1H 2022) driven by a strong contribution from the newly acquired K-Way France and good commercial performances from all geographies of direct operations, as the Group keeps investing to foster long term growth.

NFP WITH BANKS

Net Financial Position with banks, at € 97,0 mln (compared to € 93,9 mln at YE 2022) as the Group has paid the first instalment of K-Way France earn-out and generated a strong operating cash flow exceeding € 22,5 million.

TOTAL AGGREGATED SALES (TAS) € 558,3 mln

-1,7% vs 2022 (€ 567,9 mln)

+10,9% vs 2022 (€ 162,3 mln) € 180,0 mln GROUP CONSOLIDATED REVENUES

EBITDA +0,9% vs 2022 (€ 22,4 mln) € 22,6 mln

NFP WITH BANKS - € 97,0 mln

- € 3,1 mln vs YE2022 (- € 93,9 mln)

NETWORK ACTIVITY 1H 2023

ASL – GEOGRAPHIC AREA

in € million	30.06.23	in %	30.06.22	in %	Var	Var %
Europe	279,6	70,6%	248,5	63,1%	31,1	12,5%
Asia and Oceania	28,9	7,3%	35,0	8,9%	(6,1)	(17,4%)
Americas	44,8	11,3%	60,0	15,3%	(15,3)	(25,4%)
Middle East and Africa	42,9	10,8%	50,0	12,7%	(7,1)	(14,2%)
Total ASL	396,2	100,0%	393,5	100,0%	2,6	0,7%

10 Participation into Rimini Wellness th edition of Kappa® Future Festival

Launch of SS23 lifestyle collection in co-lab with AS Monaco

Kappa as Lifestyle Partner at Giro d'Italia

02 NETWORK ACTIVITY AT 30/06/2023

Q2 MARKETING

Launch of the 2024 bike collection at Eurobike (Frankfurt)

Sponsorship of the Bardiani CSF Faizanè team, riding at Giro d'Italia

Briko took part into the 9th edition of BAM! Festival

Koshi Mizukami

Launch of the first co-branding with Universal Works

New capsule collection with Highsnobiety in exclusive for Paris Fashion Week

Limited edition in co-lab with Japanese artist Yu Nagaba

Sponsorizzazione del surfista Leonardo Fioravanti Secondo drop with Italian brand Santini Cycling Wear

02 NETWORK ACTIVITY AT 30/06/2023

Q2 MARKETING

Co-lab with Pacha Ibiza

Co-lab with Max&Co

Co-lab with Roy Roger's

Co-lab with Barbie as of the eponymous Movie hits the theaters

Co-lab with Alaïa

02 NETWORK ACTIVITY AT 30/06/2023

Q2 MARKETING ACTIVITY

Co-lab with the iconic menswear brand Drake's The Earth Collection: second co-lab with Hanami

GROUP INTERIM RESULTS 1H 2023

CONSOLIDATED REVENUES

NET EARNINGS WALK

€ 10,7 mln € 7,4 mln

NET FINANCIAL POSITION

in € .000	30.06.23	in %	31.12.22	in %	30.06.22	in %
Sub-total net money holdings	(37.427)	27,1%	(26.439)	18,7%	(29.063)	24,4%
Short-term portion of m/l term loans	(15.428)		(15.423)		(12.479)
Short-term net financial position	(52.854)	38,2%	(41.862)	29,5%	(41.543)	34,8%
Long-term portion of m/l term loans	(44.021)		(51.756)		(30.617)
Financial leasing payables	(153)		(259)		(380)
Sub-total loans and leasing payables	(44.174)	31,9%	(52.014)	36,7%	(30.997)	26,0%
Net financial position with banks	(97.028)	70,1%	(93.876)	66,3%	(72.540)	60,8%
Right of use debts	(31.570)		(30.734)		(33.118)
Payables for future acquisition of company shares	(9.738)		(17.081)		(13.598
Net financial position	(138.336)	100,0%	(141.691)	100,0%	(119.256)	100,0%

NET FINANCIAL POSITION WALK 03 GROUP INTERIM RESULTS

22,6 (5,2) (7,3) (1,2) (3,6) (+) Adjusted net result: € 15,5 mln (+) Δ in Net Working Capital: € 7,2 mln (–) Other: € 0,1 mln

NFP with banks YE2022 - € 93,9 mln OPERATING CASH FLOW INVESTMENT IN FIXED ASSETS TREASURY SHARES PAYMENTS OF LEASES NFP with banks 6m2023 - € 97,0 mln (8,4) K-WAY FRANCE EARN-OUT DIVIDEND PAYMENTS

GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES

Commercial licensees or licensees	independent business owners, granted licenses to distribute Group brand products in their respective regions
Productive licensees or sourcing centers	third-party entities whose function is to manufacture goods branded with the Group brands for the exclusive sale to Commercial licensees or to Group companies
Total Aggregated Sales (TAS)	the sum of Aggregated Brand Sales (ASL) and Aggregated Sales of Sourcing Centers (ASSC)
Aggregated Brand Sales (ASL)	sales by commercial licensees – that generate royalties for BasicNet Group – and sales by the Group companies
Aggregated Sales of Sourcing Centers (ASSC)	sales by productive licensees – that generate sourcing commissions for BasicNet Group
Consolidated revenues	the sum of royalties, sourcing commissions, sales of products made by BasicNet Group companies and real estate revenues
EBITDA	"operating result" before "amortisation and depreciation"
Net Financial Position	total of current and medium/long-term financial payables, less cash and cash equivalents and other current financial assets
Net Financial Position with banks	Net Financial Position, excluding IFRS 16 and financial liabilities for the acquisition of businesses

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THANK YOU