Brunello Cucinelli — Earnings Release 2022

Mar 15, 2023

March 15 2023 FY 22 Results

Brunello Cucinelli

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"The year 2022 was for our Casa di Moda a year that we define as one of inspiration, of consistent growth, but above all of striking recognition of our brandits identity in style, craftsmanship, exclusivity and in the way it presents itself respect to Creation.

We view this year 2023 as the beginning of a new time, animated by the awakeninggreat values and ideals; and perhaps it is time to come up with up-to-date solutionsblue-collar workers, restoring moral and economic dignity to the craft trades, ourbeing a manufacturing country that is well-loved by the entire world.

After the noble international Neiman Marcus Fashion Award 2023 received a few ago in Paris, which represents a sort of "Academy Award of Fashion", givenexcellent sales in the first quarter – almost ended – and the sizeable Fall-Winter orders for men and women, we have decided to raise our estimates to a + 15% revenues for the year whilst assuming a healthy increase of around +10% for

in

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2018 – 2022: excellent quantitative and qualitative growth

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Human Privacy Time for Spirit, time for Harmony

"The eyes are the interpreters of the soul." Cicero

"Nature is a gentle, prudent and just guide." Montaigne

€920 mln +29.1%

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€608 mln +9.9%

€544 mln -10.5%

€712 mln +30.9%

€553 mln +8.1%

FY 2022 Financials Highlights

REVENUES	EBITDA	NET PROFIT
€919.7 mln	€266.4 mln	€87.2 mln
+29.1%	+37.8%	+54.9%
+24.8% cost. curr	29.0% on sales	9.5% on sales

WHOLESALE +18.5% 37.7% on sales

ASIA

+28.1% 23.8% on sales +40.5% 36.4% on sales

AMERICAS

DIVIDEND BoD proposing €0,65 dividend equal to 50% pay-out ratio

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NET FINANCIAL POSITION* €7.1 mln (€ 23.0 mln as of Dec. '21)

* Lease obligations are excluded

FY 2022 Highlights

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Balanced contribution of the channels (62% and 38% of total respectively)

Balanced contribution of the geographies (Europe 40%, Americas 36%, 24%)

Balances contribution of women's and men's collections (parity in volume still a slight prevalence of women in value)

Network of boutiques further strengthened: openings in Palo Alto in and expansions in San Francisco, Cannes and Zurich

Excellent order intake on the SS23: very good result in the wholesale channelin 2022, as well as a good start in 2023

Very solid income statement structure, with all the main cost lines under control and a healthy marginality fuelled by a small leverage effect

Outlook

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"We are very satisfied with this first part of 2023, with the sell-outs of the Spring Summer 2023 collections fully confirming the favourable feedback during the presentations of the collections, both from multi-brand partners and the specialised press.

We also feel that our brand is living a splendid moment, thanks also to the very important recognitions received. In the market, we still register a higher demandluxury goods than supply in this first part of the year.

For these reasons, we expect very strong growth in the first quarter of 2023, also favoured by the comparative basis of the first quarter of 2022, which is less demanding than the following quarters.

The Fall Winter 2023 order collection ended with very important results, and the collections also received very positive comments from the specialised press.

On the basis of these elements, we can envisage a very nice growth in sales for 2023 and raise our estimates from +12% to +15%, with a healthy and fairand a level of investment consistent with our long-term planning.

Finally, in 2024 we consider revenue growth in the region of +10% to be reasonable.

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€ mln	FY 21	FY 22	YoY % Chg
Net Revenues	712.2	919.7	+29.1%
			Constant exchange rates +24.8%
Italy	84.2	102.8	+22.0%
Europe (excl. Italy)	219.2	263.8	+20.4%
Total Europe	303.4	366.6	+20.8%
Americas	238.2	334.7	+40.5%
Asia	170.6	218.4	+28.1%

Region Highlights

ITALY

Excellent results in Italy, with DOS growth throughout the year went as well as positive contribution of multi-brand partners September's Milan Fashion Week: very special moment, celebrating the recovery and renewed sociability, under the name of refined dressing

EUROPE

Great strength of demand in all nations, showing growth well distributed between cities and provincial towns

Purchases by the local customer and return of international tourism, particularly from the North American region

Great desire of many customers to return to experience physical stores

AMERICAS

High-luxury demand showed "structural" characteristics Positive contribution from store openings and boutique expansions Wholesale channel did very well, thanks to an established presence in luxury Department Stores and prestigious Specialty Stores

ASIA

Strong increases, with double digit growth achieved in China in all quarters of 2022

High potential for our brand in China coherent within the project of sustainable growth in the medium to long term

Excellent contribution from Japan, as well as from South Korea and the Middle East, which are accelerating their relative growth trends

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WOMEN 56,0%

READY TO WEAR 84.4%

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€ mln	FY 21	FY 22	YoY % Chg
Net Revenues	712.2	919.7	+29.1%
Retail Channel	419.8	573.3	+36.6%
Wholesale Channel	292.4	346.4	+18.5%

Channel Highlights

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RETAIL CHANNEL

Like-for-like growth, with very good sell-out figures for both the Spring Summer and Fall Winter 2022 collections

Significant contribution to the growth of new spaces: prestigious flagship openings, expansions and finally conversions to direct management of spaces within Luxury Department Stores

WHOLESALE CHANNEL

Wonderful growth, highlighting in its entirety the strategic importance for our brand and "contemporary" apparel offerings

Results benefiting from our partners' need to meet strong end-customer demand

The Spring Summer and Fall Winter collections reported excellent results, with significant sell-out numbers

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Monobrad Network

RETAIL MONOBRAND boutiques as of December '22 boutiques as of December '21 boutiques as of December '20

WHOLESALE MONOBRAND

• boutiques as of December '22
• boutiques as of December '21
• boutiques as of December '20

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Our Idea of a "Contemporary License"

Contemporary Licence: Eyewear

Contemporary eyewear licence with EssilorLuxottica, a natural extension of the collaboration with Oliver Peoples

New agreement will come into effect on January 1, 2023 and run until December 31, 2032; first collection will be introduced to the market in the first quarter of 2024

Our creative team collaborating, step by step, on the styling and creation of the prototypes, following all the stages related to production as weel as the distribution of Brunello Cucinelli branded eyewear collections

Strong collaboration for distribution, identifying the most exclusive spaces in which to present the 'eyewear' collections

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Brand image and gratitude for awards received

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Style and Recognition

DESIGNER OF THE YEAR AWARD

In September 2021, Brunello Cucinelli received the very important 'Designer of the Year' award from British GQ magazine in London. This award earned us great visibility in terms of image throughout 2022.

NEIMAN MARCUS FASHION WARD

Prestigious "Neiman Marcus Fashion Award for Distinguished Service in the field of Fashion" attributed to Brunello Cucinelli for 2023 that honors the figures in the world who have most influenced Fashion

Along with the exclusivity that we believe our offering represents, we would also like our products to be recognizable by their style

Neiman Marcus Fashion Award

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Brunello Cucinelli, among the greatest in world fashion

Very important recognition awarding for decades great personalities, celebrities and style icons such as Coco Chanel, Christian Dior, Valentino, Giorgio Armani, Miuccia Prada and Karl LagerfeldBrunello Cucinelli commented as follows:

«I am immensely grateful to my highly esteemed Geoffroy van Raemdonck andTodorovich, who at this particular point in time have the honour of Neiman Marcus, one of the highest expressions of fashion and luxury in the world,also an icon of lifestyle and elegance. I would also like to thank all the Neiman whom I have admired during our twenty years of collaboration as great humanity, as well as appreciating them as very special professionals.particularly honoured and I like to think of this award as a high recognition thatcredit to the people of Solomeo, to the creative hands of the best Italian that – with their daily dedication – have built 'The Dream of Solomeo' togethermy family and all my co-workers. In our work, as in life, we have always triedinspired by the values of Humanistic Capitalism, linked to Human Sustainability,respect for all human beings and in harmony with the whole of Creation. Thankthank you very much».

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Humanistic Capitalism and Human Sustainability

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Moral and economic dignity of work: great value of craftsmanship

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FY 2022: important milestone in terms of the Human Resources, reaching over 2,300 direct employees; about half of our Human Resources work in Italy, specialising mainly in the production and craftsmanship side, while the remaining half, focused on the commercial side, is distributed in different countries around the world. During 2022, we have continued to devote very high attention to our idea of Humanistic Capitalism and Human Sustainability. As a sign of continuity with our core values, we continue to strive for 'fair profit', 'fair growth' and 'fair balance'.

The 'just profit' also presupposes the just recognition of the central value of the people directly involved in manual labour, specifically our esteemed workers and craftsmen.

Precisely for this reason, we had already introduced an extraordinary wage supplement in 2022, with the desire to relieve inflationary pressure on nonmanagerial figures. To further enhance the valuable work of our workers, we therefore decided at the beginning of 2023 on a structural increase of their salary level.

Our 10 years in the stock exchange market

First ten years since our 2012 listing on the stock exchange marks an important milestone: at the heart of the listing project idea that the company could 'live into the next centuries' by pursuing gentle growth and healthy profitability

We feel, therefore, that we have succeeded in living up to what Brunello Cucinelli stated in 2012 on the occasion of the listing:

"My life's dream was precisely this: to make man's work more human and to try this company so that it would live the next fifty to one hundred years. [...] When the meeting with the investors [...] we explained to them the philosophy of the and made it clear that we wanted to seek a sustainable, gentle profit; with theintention of imagining a company that could grow without harming humanity or, atthe least harm possible. [...] Abroad, they are fascinated by this philosophy of enterprise, by the value of skilled hands working with their dignity, with their pride,their curiosity. They were all fascinated by the idea of restoring moral and dignity to work. [...] We wanted to look for new partners, who could act ascustodians of this enterprise for the next century. [...] So, if I had to say what I strongly believe in a new capitalism, a new contemporary humanistic capitalism. does all this come from? Today's young people know everything, at twenty-threeare informed about everything in real time, and we are no longer credible if we longer real; that is why we need a humanistic capitalism in which enlightenmentromanticism is founded, in which mind and soul meet."

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Income Statement

€ mln

	FY 2021	FY 2022	Ch %
EBITDA ex-IFRS 16	110 0	172 4	56 7% +
%	15 4%	18 7%	b 330 + .p.

	FY 2021	FY 2022	Ch %
Revenues	712 2	919 7	29 1% +
First Margin	479 0	658 0	37 4% +
%	67 3%	71 5%	b 420 + .p.
SG&A	-285 7	-391 6	37 1% +
%	40 1%	42 6%	250 b + .p.
EBITDA	193 3	266 4	37 8% +
%	27 1%	29 0%	b 190 + .p.
D&A	3 -116	-131 9	13 5% +
%	16 3%	14 3%	b - 200 .p.
EBIT	77 0	134 4	74 5% +
%	10 8%	6% 14	380 b + .p.
Financial Net Income (Expenses)	-13 0	-10 4
EBT	64 0	124 0
Tax Rate	12 1%	29 7%
Net Income	3 56	87 2	9% 54 +
%	7 9%	9 5%	b 160 + .p.

Income Statement Highlights

Complete rebalancing of our margins, thanks to the +29.1% growth in sales, which made it possible to completely reabsorb the transitory effects of the pandemic on the

Strong increase in sales was favored by the major decisions taken in the hardest year of the pandemic, keeping solid the entire corporate and production structure and investment and business planning unchanged

Significant improvement in the First Margin at 71.5% (67.3% last year), with the positive contribution of the sales mix (channel, geographic areas and product), and

Currency impact

Exchange rates positively affect the First Margin, contributing in parallel to the increase in overheads in currency produced abroad

The increase in operating costs is related to business development, particularly growth in the retail channel, and currency dynamics

Human Resources Structure

with our human resources structure of 2,308 FTEs compared to 2,160 last year (in 2019 the number of FTEs was 1,890)

Income Statement Highlights

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Development of the retail channel:

• new openings (119 DOS compared with 114 previous year)
• significant boutiques expansions
• contribution from conversions to the direct management of spaces within Luxury
  • Department Stores in the last 2 years (42 hard shops vs. 31 as of dec. 20)

Increase related to both the development of sales spaces and new spaces dedicated to hospitality: presence in the boutiques of small bars of different formats and bookshops, and the "Casa Cucinelli" spaces, where we try to give full expression to

Increase is mainly related to events and activities dedicated to hospitality with customers in the boutiques, in the Casa Cucinelli spaces, and on the occasion of visits to our village of Solomeo

Income Statement Highlights

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% on sales

€ mln

% on sales

27

Net Working Capital

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TRADE NET WORKING CAPITAL

Trade net working capital was €182.4 million (19.8% incidence), compared to €169.4 million last year (23.8% incidence)

INVENTORY

Increase related to new commercial initiatives; incidence of 26.4% compared to 28.0% previous year, benefited from the excellent second half sales performance, higher than expected and resulted in a momentary and extraordinary reduction in the ratio compared to our usual standard

TRADE RECEIVABLES

Trade receivables up +5,2%, against a wholesale channel revenue growth of +18.5% in 2022

TRADE PAYABLES

Trade payables increase related to business development

* Other Credits/(Debts) trend mainly due to the measurement at fair value of outstanding hedging derivatives

	FY 2021	FY 2022	delta
Trade Receivables	72 8	76 6	3 8
Inventories	199 3	242 8	43 6
Trade Payables	-102 7	-137 0	-34 4
Trade Net Working Capital	169 4	182 4	13 0
Incidence on FY22 Revenues	23.8%	19.8%
Credits/(Debts) * Other	-27 3	-41 6	-14 4
Working Capital Net	142 2	140 8	-1 4
Incidence on FY22 Revenues	20.0%	15.3%

Investments

The important multi-year investment project remained unchanged in the pandemic years, accompanying our process of healthy growth and maintaining contemporaneity

Commercial investments dedicated to new boutiques, the renovation and expansion of existing ones, and the care of the new spaces of Casa Cucinelli

Development in the digital world, ongoing modernization of the Solomeo factory and the start of the redevelopment of the 8-hectare area on the outskirts of Solomeo

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Acquisition of 43% of the prestigious Lanificio Cariaggi Cashmere

Brunello Cucinelli in March 2022 acquired from the Cariaggi family a 43% stake in the share capital of Cariaggi Lanificio S.p.A., with headquarters in Cagli (Pesaro and Urbino). The purchase price of the shareholding was €15.05 million.

Brunello Cucinelli, Executive Chairman and Creative Director of the Casa di Moda commented: «It is with a great sense of gratitude that we announce that our company has acquired 43% of Cariaggi Lanificio S.p.A., of Cagli. I had the opportunity to start my own business in cashmere thanks to the human trust that the Cariaggi and Caprai families placed in me. For this, thank you very much. I have always believed that Cariaggi is perhaps one of the jewels of Italian manufacturing, with products of great quality and craftsmanship; there is no doubt that it should be counted among the first industries in the sector in the world, if not the first, and that it represents something important for our territory and its culture. In this project, I am not hiding my love for our land, as well as the great opportunity that our respective children and grandchildren will have to continue manufacturing products in this wonderful fibre that we call 'golden fleece' for decades to come, thus contributing to improving the living conditions of our people».

Acquisition of a large 8 hectare area

Acquisition of a large 8 hectare area on the outskirts of Solomeo, where an industrial complex built in the 1970s operated until about thirty years ago

This area will be completely redeveloped and work has already begun, followed by the building conversion plan that will allow us to gradually build up to approximately 40 thousand square metres (in addition to related services and outdoor spaces)

Through this project, it will be possible to dedicate large spaces to our Casa di Moda, in a location strategically close to the Solomeo factory, accompanying the growth of the company in the years to come

We therefore believe that this project aims, in line with the company's philosophy and our idea of Humanistic Capitalism and Human Sustainability, to enhance the area in which we live and work, seeking an important redevelopment of what we call the "appealing suburbs".

Characteristic Financial Indebtedness

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Cash generation from operating activities and the sound management of net working capital allow for sustained investments and the distribution of a dividend of EUR 0.65 per share, with a pay-out of 50%

The characteristic Net Financial Indebtedness amounted to €7.1 million, further improving compared to the €23.0 million of 2021

Substantial parity reached, even in the presence of the acquisition of 43% of Lanificio Cariaggi Cashmere for Euro 15.05 million

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ANNEX

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Detailed Income Statement

€ mln

	2021 FY	2022 FY
Revenues	712 2 ,	919 7 ,
Consumption Costs	(113 6) ,	(95 5) ,
Material Cost Raw	(96 0) ,	(137 6) ,
Inventories Change	(17 6) ,	42 0 ,
Outsourced Manufacturing	(119 6) ,	(166 2) ,
First Margin	479 0 ,	658 0 ,
(excl ) Services Costs Out Manuf	(151 5) ,	(206 0) ,
Personnel costs	(132 9) ,	(164 7) ,
Other operating expenses	(9 8) ,	(16 5) ,
Other income	10 1 ,	1 9 ,
tangible Increase in assets	3 4 ,	2 2 ,
Bad Debt and other provisions	(4 9) ,	(8 5) ,
EBITDA	193 3 ,	266 4 ,
D&A	(116 3) ,	(131 9) ,
EBIT	77 0 ,	134 4 ,
Financial expenses	(34 9) ,	(80 9) ,
Financial income	21 9 ,	70 5 ,
EBT	64 0 ,	124 0 ,
Income taxes	(7 7) ,	(36 8) ,
Tax rate	12 1% ,	29 7% ,
Net Income	3 56 ,	87 2 ,
Minority Interest	3 0 ,	6 6 ,
Group Net Profit	53 3 ,	80 6 ,

Total Net Financial Expense details

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	FY 2021	FY 2022
Net Income	56 3	87 2
D&A	116 3	131 9
Ch NWC and other In	35 6	(3 2)
Cash flow from operations	208 2	215 9
Tangible and intangible investments (investments)/divestments Other	(56 0) (2 4)	(63 5) (18 1)
Cash flow from investments	(58 4)	(81 5)
Dividends	0 0	(32 3)
Share capital and reserves increase	0 0	6 0
change financial debt Net in	(127 4)	(89 4)
Total Cash Flow	22 4	18 7

	FY 2021	FY 2022
Trade receivables	72 8 ,	76 6 ,
Inventories	199 3 ,	242 8 ,
(-) Trade payables	(102 7) ,	(137 0) ,
assets/(liabilities) Other current	(27 3) ,	(41 6) ,
Working Capital Net	142 2 ,	140 8 ,
Goodwill	0 7 ,	0 0 ,
Intangible assets	518 0 ,	534 0 ,
Tangible assets	172 6 ,	195 9 ,
Financial assets	17 4 ,	44 3 ,
Total Assets	715 1 ,	2 774 ,
assets/(liabilities) Other	34 9 ,	47 5 ,
Invested Capital Net	892 2 ,	962 5 ,
(-) Cash & Cash equivalents	(100 7) ,	(120 1) ,
Short Debt term	125 9 ,	167 1 ,
Debt Long term	544 6 ,	522 6 ,
Financial Indebtedness	569 8 ,	569 5 ,
Shareholders Capital	13 6 ,	13 6 ,
Share-premium Reserve	57 9 ,	57 9 ,
Reserves	191 3 ,	230 4 ,
Group Net Profit	53 3 ,	80 6 ,
Group Equity	316 1 ,	382 5 ,
Minority shareholders	3 6 ,	10 4 ,
Total Equity	322 4 ,	393 0 ,
Total Funds	892 2 ,	962 5 ,

Investor Relations

€ mln

Board of Directors

Brunello Cucinelli	Excutive Chairman and Creative Director
Riccardo Stefanelli	C.E.O.
Luca Lisandroni	C.E.O.
Camilla Cucinelli	Director
Giovanna Manfredi	Director
Carolina Cucinelli	Director
Andrea Pontremoli	Independent Director
Stefano Domenicali	Independent Director
Emanuela Bonadiman	Independent Director
Maria Cecilia La Manna	Independent Director
Ramin Arani	Independent Director

Investor Relations & Corporate Planning Director

Pietro Arnaboldi

mail: pietro.arnaboldi@brunellocucinelli.it

+39 075 6970079

Viale Parco dell'Industria, 5 - Solomeo (PG) - Italia

This presentation may contain forward looking statements which reflect Management's current views and estimates.

The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward looking statements.

Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments.

Figures as absolute values and in percentages are calculated using precise financial data. Some of the differences found in this presentation are due to rounding of the values expressed in millions of Euro.

The Manager in Charge of preparing the Corporate accounting documents, Moreno Ciarapica, declares pursuant to and to the effects of article 154-bis, paragraph 2 of Legislative Decree no. 58 of 1998 that the disclosures included in this release correspond to the balances on the books of account and the accounting records and entries.

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