CONSOLIDATED HALF-YEAR FINANCIAL REPORT AT 30 JUNE 2019

	COMPANY DATA OF THE PARENT COMPANY CELLULARLINE S.p.A. 3
	CORPORATE BODIES 4
	GROUP STRUCTURE 6
	INTERIM REPORT ON THE OPERATING PERFORMANCE OF THE CELLULARLINE
	GROUP 8
1.	Introduction 9
2.	Methodological note 9
3.	Reference accounting standards 10
4.	Main financial and operational indicators 11
5.	Market trends 11
6.	Group equity and economic profit /loss for the year 12
7.	Balance Sheet and Financial Position 20
8.	Investments and research and development activities 25
9.	Information on transactions with related parties, on non-recurring, atypical or unusual transactions 25
	10. Atypical and/or unusual transactions 25
	11. Share-based payment arrangements 25
	12. Treasury shares and shares of the parent company 25
	13. Main risks and uncertainties the Group is exposed to 26
	14. List of secondary offices 30
	15. Personnel information 30
	16. Significant events during the half-year and after the end of the six month period 31
	17. Management outlook 32
	CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS AT 30 JUNE 2019 37
	EXPLANATORY NOTES 43
1.	Introduction 44
2.	Criteria adopted to prepare the Consolidated Consolidated Half-YEAR Financial Statements and summary of accounting principles 44
3.	Information on operating sectors 55
4.	Explanatory notes to the individual items of the Consolidated Half YEAR Financial Statements 56
5.	Transactions with Related Parties 75
6.	Other information 77
	CERTIFICATION OF THE CONSOLIDATED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS AT 30 JUNE 2019 PURSUANT TO ART. 81-TER OF CONSOB REGULATION NO.

COMPANY DATA OF THE PARENT COMPANY CELLULARLINE S.p.A.

Registered Office:

Cellularline S.p.A. Via Grigoris Lambrakis 1/a 42122 Reggio Emilia (RE) - Italy

Legal details:

Share capital Euro 21,343,189 fully paid-up VAT reg. no. and Tax Code 09800730963 Economic and Administrative Register Reg. of Co. -315329 Certified e-mail address: [email protected] ISIN: IT0005244618 Alphanumeric code: CELL Corporate website: www.cellularlinegroup.com

CORPORATE BODIES

Board of Directors

Antonio Luigi Tazartes	Chairperson
Piero Foglio Deputy	Chairperson
Christian Aleotti	Chief Executive Officer
Marco Cagnetta	Chief Executive Officer
Cristian D'Ippolito	Director
Carlo Moser	Director
Andrea Francesco Enrico Ottaviano	Director
Paola Camagni Independent	Director
Laura Gualtieri Independent	Director
Ilaria Tiezzi	Independent Director

Control and Risk Committee

Laura Gualtieri	Chairperson and Independent Director
Paola Camagni	Independent Director
Ilaria Tiezzi	Independent Director

Appointment and Remuneration Committee

Ilaria Tiezzi	Chairperson and Independent Director
Paola Camagni	Independent Director
Cristian D'Ippolito	Director

Related party transaction committee

Paola Camagni	Chairperson and Independent Director
Laura Gualtieri	Independent Director
Ilaria Tiezzi	Independent Director

Supervisory Body

Anna Doro	Chairperson
Fabrizio Capponi	Member
Pietro Di Nicola	Member

Board of Statutory Auditors

Cristiano Proserpio	Chairperson
Alessandro Ceriani	Standing Auditor
Paola Schwizer	Standing Auditor
Luca Donati	Alternate Auditor
Barbara Negri	Alternate Auditor

Auditing firm KPMG S.p.A.

GROUP STRUCTURE

GROUP COMPOSITION

The Group is made up of the following companies:

Cellularline S.p.A., a company incorporated under Italian law with registered office in Via Lambrakis 1/A, Reggio Emilia (Italy), Parent Company operating in Italy and abroad in the sector of design, distribution (including of products not under its own brand) and marketing of accessories and devices for multimedia products (smartphones, tablets, wearables, audio products, etc.) and accessories and devices for connectivity in motion (in the car and on motorcycles/bikes), which includes a permanent establishment located in Paris at number 91, Rue Du Faubourg Saint Honoré (France). The latter represents a fixed base with two employees who carry out purely commercial activities and is aimed at managing relations with customers in the French market.
Cellular Spain S.L.U., a company incorporated under Spanish law with registered office in C/Newton, 1 building 2 ship 1, Leganes (Madrid) a wholly-owned subsidiary company, which distributes the Cellularline brand to the Spanish and Portuguese markets.
Cellular Inmobiliaria Italiana S.L.U., a company incorporated under Spanish law with registered office in Cl. Industrial No. 50 Sur Edi 2 Ship 27, Leganes (Madrid), a wholly-owned subsidiary company, which owns a property - formerly the headquarters of Cellular Spain - currently leased to third parties;
Cellular Immobiliare Helvetica S.A., with registered office in Lugano, Via Ferruccio Pelli no. 9 (Switzerland), a wholly-owned subsidiary company, which owns the property leased to the commercial company Cellular Swiss S.A.;
Cellular Swiss SA, a company incorporated under Swiss law with registered office in Route de Marais 17, Box No. 41, Aigle (Switzerland) a 50% owned associated company, which distributes the Cellularline brand to the Swiss market;
Pegaso s.r.l., a company incorporated under Italian law with registered office in Via Brigata Reggio 24, Reggio Emilia (Italy), acquired on 3 April 2019 and a 60% subsidiary that owns - as a holding company - 100% of Systema s.r.l. (formerly Systemaitalia s.r.l.);

Systema s.r.l., a company incorporated under Italian law with registered office in Via della Previdenza Sociale 2, Reggio Emilia (Italy), 60% of which is indirectly owned through the investment held in Pegaso s.r.l.; Systema is a company engaged at European level in the market for mobile phone accessories in the Telcochannel.

INTERIM REPORT ON THE OPERATING PERFORMANCE OF THE CELLULARLINE GROUP

1. Introduction

Cellularline S.p.A. (hereinafter also "Cellularline" or the "Company"), a company incorporated under Italian law with registered office in Reggio Emilia, Via G. Lambrakis 1/A, is one of the main operators in the smartphone and tablet accessories sector in the EMEA area, as well as a market leader in Italy; moreover, the Group ranks among the top three operators in Germany and Spain, among the top five players in the Netherlands and boasts a good competitive position in the other European countries.

The consolidating company is the result of the merger by incorporation (the "Business Combination"), on 28 May 2018, of Ginetta S.p.A. and Cellular Italia S.p.A. into Crescita S.p.A., a company listed on AIM Italia, the Alternative Capital Market organised and managed by Borsa Italiana S.p.A. until 21 July 2019.

On 22 July 2019, Cellularline transitioned to the STAR Segment of the Italian Electronic Stock Exchange (MTA) and, as a result, the preparation of the Consolidated Half-YEAR Consolidated Financial Statements became mandatory. These Consolidated consolidated half-YEAR financial statements for the six-month period ended 30 June 2019 include the financial statements of the Parent Company and its subsidiaries (hereinafter also the "Group" or the "Cellularline Group").

2. Methodological note

In the remainder of this Interim Report on the Operating Performance, information is provided on the economic and financial position of the Cellularline Group as at 30 June 2019, compared with the figures for the previous interim period ended 30 June 2018.

In order to make the economic, equity and financial situation of the Explanatory Notes easier to understand, a pro-forma income statement as at 30 June 2018 has been prepared, which includes the economic situation for the period of six months of all the companies involved in the Business Combination operation, as if the latter had taken place on 1 January 2018. With reference to the income statement, it should be noted that - since nonrecurring costs and revenues occurred in 2018, mainly as a result of the Business Combination, and in 2019 as a result of the listing in the STAR segment and the M&A transaction - the income statement items influenced by these effects were shown in order to facilitate a more consistent comparison with the performance of the first six months of 2019.

Amounts are expressed in thousands of Euro, unless otherwise indicated.

The amounts and percentages were calculated on values in thousands of Euro and, therefore, any differences found in some tables are due to rounding.

3. Reference accounting standards

This Interim Report on the Operating Performance at 30 June 2019 was prepared in accordance with the provisions of art. 154 ter., par. 4 of Legislative Decree 58/98 - of the Consolidated Law on Finance, and subsequent amendments and additions, in compliance with art. 2.2.3 of the Stock Exchange Regulations - and in application of IAS 34. It does not include all the information required by IFRS in the preparation of the annual financial statements and must therefore be read together with the Financial Statements of the Cellularline Group at 31 December 2018. The accounting standards and criteria adopted are consistent with those used for the consolidated financial statements at 31 December 2018, with the exception of the effects of the amendments made following the application of the new international accounting standard IFRS 16. This Interim Report on the Operating Performance at 30 June 2019 is the first in which the Group applied IFRS 16. Significant changes in accounting standards are described in the Explanatory Notes.

In order to facilitate an understanding of the Group's economic and financial performance, a number of Alternative Performance Indicators ("APIs") were identified. For a correct interpretation of these APIs, the following should be noted: (i) these indicators are based exclusively on the Group's historical data and are not indicative of its future performance, (ii) the APIs are not required by IFRS and, though derived from the consolidated financial statements, are not subject to audit, (iii) the APIs should not be considered a substitute for the indicators required by the reference accounting standards (IFRS), (iv) these APIs must be read together with the Group's financial information taken from the Consolidated Consolidated Half-YEAR Financial Statements; (v) the definitions and criteria adopted to determine the indicators used by the Group, as they do not derive from the reference accounting standards, may not be homogeneous with those adopted by other companies or groups and, therefore, may not be comparable with those possibly presented by such parties, and (vi) the APIs used by the Group are drawn up according to a continuous and homogeneous definition and representation for all the periods for which financial information is included in the Consolidated Consolidated Half-YEAR Financial Statements.

The APIs shown (Adjusted EBITDA, Adjusted EBIT, Adjusted Group Consolidated Profit/Loss, Adjusted Cash Flow from Operations, Adjusted Net Financial Debt, Adjusted Net Financial Debt/EBITDA Adjusted LTM, Cash generation and Cash Conversion Ratio) are not identified as accounting measures under IFRS and, therefore, as explained above, should not be considered as alternative measures to those provided by the Group's financial statements for the assessment of the economic performance and the related financial position. Certain indicators defined as "Adjusted" are reported in order to represent the Group's operating and financial performance, net of non-recurring events, non-core events and events linked to extraordinary operations, as identified by the Group. These indicators reflect the main economic and financial data, net of non-recurring income and charges that are not strictly correlated with the Group's core business and operations, and therefore allow a more consistent analysis of the Group's performance in the years presented in the Interim Report on the Operating Performance.

4. Main financial and operational indicators¹

(In thousands of Euro)	Half year ending on
	30 June 2019	30 June 2018 Pro-forma
Economic indicators for the half-year
Revenues	55,288	48,727
Adjusted EBITDA2	9,183	8,323
Adjusted EBIT3	7,609	7,016
Group profit /loss	2,576	(424)
Adjusted Group profit/loss4	6,205	4,679

	Situation at
(In thousands of Euro)	30 June 2019	31 December 2018	30 June 2018
Equity and financial indicators for the year
Cash flow generated by operating activities	942	22,209	12,573
Adjusted Cash flow generated by operating activities	4,212	27,579	12,241
Net financial indebtedness	39,574	24,488	34,953
Adjusted Net financial indebtedness	32,114	21,790	30,153
Adjusted Net financial indebtedness /Adjusted EBITDA LTM5	0.92	0.64	n.a.
Cash generation6	7,311	31,101	7,067
Cash Conversion Ratio7	79.6%	91.8%	84.9%

For further details on the change in cash flows generated by operations, reference should be made to paragraph "7. Balance Sheet and Financial Position" included in this Interim Report on the Operating Performance.

5. Market trends

The market the Group operates in is characterised by seasonal phenomena that are typical of the market of electronic products and accessories. Sales are higher in the second half of each year, with a peak in demand near and during the Christmas period.

The EMEA market context for smartphone accessories with a value of less than Euro 100 - which is the one which the Group mainly operates in - showed a slight growth in the first half of 2019 (+4%, entirely due to the Audio segment); this average performance trend is also the result of very different trends in the main countries, with a persistent weakness in the Italian market (-5%), in which, however, the Group increased its market shares compared to 2018.

¹ These interim operating results are not identifiable as an accounting measure under IFRS and, therefore, should not be considered a substitute measure to assess the trend of the Group's results. Since the composition of these indicators is not regulated by the reference accounting standards, the Group's determination criterion applied may not be consistent with the one adopted by other companies or with the one that may be adopted in the future by the Group, or created by it, and thus not comparable.

²Adjusted EBITDA is given by the adjusted Consolidated EBITDA (i) of non-recurring charges/(income), (ii) the effects deriving from non-recurring events (iii) events linked to extraordinary operations and (iv) the operating foreign exchange translation gains/(losses).

³ Adjusted EBIT is given by the adjusted result of operations (i) of non-recurring charges/(income), (ii) the effects deriving from non-recurring events (iii) events linked to extraordinary operations and (iv) adjustments of the amortisation and depreciation relating to the Purchase Price Allocation.

⁴ Adjusted Consolidated Profit for the Period is calculated as adjusted Result of the Period of the (i) adjustments incorporated in Adjusted EBITDA, (ii) adjustments of amortisation and depreciation relating to the Purchase Price Allocation, (ii) adjustments of non-recurring financial charges/(income) and (v) the theoretical tax impact of these adjustments.

⁵ In order to ensure the comparability of the Adjusted/ Adjusted EBITDA LTM net financial indebtedness indicator, the Adjusted EBITDA figure for the last twelve months was considered. Adjusted net financial indebtedness is adjusted for financial payables per warrant.

⁶ Cash generation is an indicator of the Group's ability to generate cash and is calculated as the difference between Adjusted EBITDA and Capex.

⁷ Cash Conversion Ratio is an indicator of the Group's ability to generate cash and is calculated as the percentage ratio between Cash Generation and Adjusted EBITDA.

6. Group equity and economic profit /loss for the year

The income statement formats presented in this Interim Report on the Operating Performance were reclassified in accordance with the presentation methods deemed useful by Management to represent the trend in the Group's operating profitability during the six months.

Income Statement

	Half year ending on 30/06/2019	Of which related	% of revenues	Half year ending on 30/06/2018	Of which related	% of revenues
(In thousands of Euro)		parties		pro-forma	parties
Revenues from sales	55,288	2,292	100%	48,727	1,721	100%
Cost of sales	(30,356)	-	-54.9%	(25,466)	-	-52.3%
Gross Margin	24,932	-	45.1%	23,260	-	47.7%
Selling and distribution costs	(11,922)	-	-21.6%	(11,583)	-	-23.8%
General and administrative costs	(10,131)	(20)	-18.3%	(11,247)	(20)	-23.1%
Other non-operating costs (revenues)	320	(53)	0.6%	(1,320)	(50)	-2.7%
Operating profit (loss)	3,199	-	5.8%	(890)	-	-1.8%
* of which tangible and intangible amortisation and depreciation	4,451	-	8.1%	4,183	-	8.6%
* of which Business Combination/STAR	967	-	1.7%	4,495	-	9.2%
* of which other extraordinary costs/M&A	644	-	1.1%	200	-	0.4%
* of which operating foreign exchange translation gains/(losses)	(77)	-	0.2%	334	-	0.7%
Adjusted EBITDA	9,183	-	16.9%	8,323	-	17.1%
* of which tangible and intangible amortisation and depreciation, excluding PPA	(1,574)	-	2.8%	(1,306)	-	2.7%
Adjusted EBIT	7,609	-	13.8%	7,016	-	14.4%
Financial income	210	-	0.4%	5,193	-	10.7%
(Financial charges)	(975)	-	-1.8%	(14,006)	-	-28.7%
Gains/(losses) on exchange rates	(77)	-	-0.1%	340	-	0.7%
Income from (Expense on) equity investments	-	-	-	(262)	-	-0.5%
Profit (loss) before taxes	2,356	-	4.5%	(9,624)	-	-19.8%
* of which Business Combination/STAR	967	-	1.8%	4,495	-	9.2%
* of which other extraordinary costs/M&A	644	-	1.1%	200	-	0.4%
* of which PPA amortisation and depreciation	2,877	-	5.2%	2,877	-	5.9%
* of which fair value warrants	(74)	-	-0.1%	(4,246)	-	-8.7%
* of which warrant charges	-	-	-	12,800	-	26.3%
* of which warrant income	-	-	-	(712)	-	-1.5%
Profit (loss) before taxes adjusted	6,770	-	13.9%	5,790	-	11.9%
Current and deferred taxes	220	-	0.4%	9,200	-	18.9%
Profit/loss before minority interests	2,576	-	4.7%	(424)	-	-0.9%
Profit/loss for minority interests	(1)	-	-0.0%	-	-	-100%
Group profit /loss	2,575	-	4.7%	(424)	-	-0.9%
* of which net costs of Business Combination/STAR	967	-	1.8%	4,495	-	9.2%
* of which other extraordinary costs/M&A	644	-	1.1%	200	-	0.4%
* of which warrant income and charges	-	-	-	12,088	-	24.8%
* of which tax effect on costs for Business Combination /STAR	-	-	-	(400)	-	-0.8%
* of which PPA amortisation and depreciation, net of tax effect	2,074	-	3.7%	2,074	-	4.3%
* of which fair value warrant, net of tax effect	(56)	-	-0.1%	(3,227)	-	-6.6%
* of which Patent Box benefit on previous years	-	-	-	(10,128)	-	-20.8%
Group profit/loss for the year adjusted	6,205	-	12.7 %	4,679	-	9.6%

6.1 Consolidated revenues

It should be noted that the Group's revenues in the six months, given the seasonality of the business, with sell-in and sell-out in the first half of the year generally lower than 40% of the annual trend, are not necessarily representative of an annual trend.

Compared to the same six-month period of the previous year, the general trend of revenues is positive (+ Euro 6,561 thousand) thanks to the positive performance of all three product lines (Red, Black and Blue) and the acquisition of the company Systema; this increase is due for approximately Euro 3,100 thousand (+6.3%) to organic growth and for approximately Euro 3,500 thousand (+7.2%) to the consolidation in the second quarter of sales of the newly acquired Systemaitalia company.

Organic growth is the result of the strategic and commercial actions taken since the second half of 2018 and of the disappearance of the non-recurring negative factors that had mainly influenced the Italian market during the first half of 2018, which continues to feature a performance below the European average.

In general, for the Red Line, the trend in European markets in the first half of 2019 was characterised by a fairly stable performance in the accessories segment, and by growth for the premium Audio segment (on which the Group's share is limited). Finally, it should be noted that the above figures are influenced by the acquisition of Systema, which was completed on 3 April 2019.

The Black and Blue lines grew by 14% and 37%, respectively. This latter product line suffered complex issues in the phase of starting up new distribution projects, partly because of the recent slowdown in the market for the Huawei brand following tensions with the US Government; however, there was an increase in sales resulting from new distribution projects in Italy for Samsung brand accessories.

6.1.1 Revenues from Sales by product line

The Group designs, distributes and markets a wide range of products divided into the following product lines:

(i) Red product line, including accessories for multimedia devices (such as cases, covers, car supports, protective glass, power supply units, portable chargers, data and charging cables, headphones, earphones, speakers and wearable technology products);
(ii) Black product line, including all products and accessories related to the world of motorcycles and bicycles (such as, for example, intercoms and supports for smartphones); and
(iii) Blue product line, which includes all the products marketed in Italy not under the Cellularline brand (SanDisk and Vivanco products, to which Huawei and Samsung products have been added since January 2019).

The following table shows revenues, broken down by product, for the periods analysed:

Revenues from Sales by product line

	Half year ending on				Change
(In thousands of Euro)	30 June 2019	% of revenues	30 June 2018 pro-forma	% of revenues	Value	%
Red - Italy	25,505	46.1%	21,593	44.3%	3,912	18.1%
Red – International	21,678	39.2%	20,761	42.6%	917	4.4%
Revenues from Sales - Red	47,183	85.3%	42,354	86.9%	4,829	11.4%
Black – Italy	2,136	3.9%	1,648	3.4%	489	29.7%
Black – International	2,113	3.8%	2,078	4.3%	35	1.7%
Revenues from Sales - Black	4,249	7.7%	3,726	7.6%	523	14.0%
Blue – Italy	2,933	5.3%	2,144	4.4%	789	36.8%
Revenues from Sales - Blue	2,933	5.3%	2,144	4.4%	789	36.8%
Others - Italy	840	1.5%	485	1.0%	355	73.1%
Others - International	83	0.2%	18	0.0%	65	100%
Revenues from Sales Others	923	1.7%	504	1.0%	419	83.3%
Total Revenues from sales	55,288	100%	48,727	100%	6,561	13.5%

The Red product line, which accounts for approximately 85% of the Group's consolidated revenues, produced the highest growth (Euro 4,829 thousand) in the first half of 2019, mainly due to the following factors:

Contribution by Systema of approximately Euro 3,500 thousand;
Early benefits deriving from an important multi-year agreement, signed with a primary retailer of Consumer Electronics, which led to the extension of the supply of accessories to 46 new points of sale;
reopening of some points of sale, acquired from some top players in the Consumer Electronics channel, which had caused a negative impact in terms of reduced turnover in the first half of 2018;
positive contribution of the AQL brand audio products and the new added-value services provided by the Group, including Case&Go and Glass&Go, launched in Q4 2018.

The Black product line, +14% compared to the first half of 2018, increased thanks to the launch of the new range of intercom products.

The significant growth of the Blue product line (+37% compared to 30 June 2018 pro-forma) is mainly due to the distribution in Italy of the original accessories, following the new contracts signed in Q4 2018 with Samsung and Huawei, partly offset by the drop in revenues deriving from marketing the other two brands.

6.1.2 Consolidated revenue by geographical segment

The following table shows revenues, broken down by geographical area, for the periods analysed:

	Half year ending on				Change
(In thousands of Euro)	30 June 2019	% of revenues	30 June 2018 pro-forma	% of revenues	Value	%
Italy	31,414	56.8%	25,870	53.1%	5,544	21.4%
Austria/Germany	5,472	9.9%	6,625	13.6%	-1,153	-17.4%
France	3,802	6.9%	2,837	5.8%	965	34.0%
Benelux	2,957	5.3%	1,806	3.7%	1,151	63.7%
Spain/Portugal	2,916	5.3%	3,083	6.3%	-167	-5.4%
Eastern Europe	2,686	4.9%	2,791	5.7%	-105	-3.8%
Switzerland	2,194	4.0%	1,618	3.3%	576	35.6%
Northern Europe	2,054	3.7%	2,460	5.0%	-406	-16.5%
Middle East	573	1.0%	522	1.1%	51	9.8%
Others	1,220	2.2%	1,115	2.3%	105	9.4%
Total Revenues from sales	55,288	100%	48,727	100%	6,561	13.5%

The growth of the Italian market, by more than 21% compared to the same six-month period of the previous year, is mainly due to the absence of some non-recurring negative factors that had negatively affected the market during the first half of 2018.

With regard to international markets, there was a positive trend in France, Benelux and Switzerland, partly offset by a slight decline - also due to temporary factors - in Austria/Germany.

6.2 Cost of sales

Cost of sales amounted to Euro 30,356 thousand in the first half of 2019, compared to Euro 25,466 thousand at 30 June 2018 pro-forma. In 2019 the incidence of the cost of sales on sales was greater than in 2018 by about 2.6%, mainly as a consequence of the dilution resulting from the consolidation of Systemaitalia, a company operating in the Telcochannel, whose margin is lower than the average margin obtained by the Group.

The remainder is attributable to the performance of the Euro/USD exchange rate - particularly favourable in the first half of 2018 compared to the rate recorded in the reference period -, the increase in sales under the AQL brand (recently launched in international markets, with more aggressive pricing), the customer mix and a higher incidence of Black and Blue Line sales, characterised by lower margins.

Overall, during the six months production costs in USD in the Far East were substantially stable compared to the previous year. The Group has favoured - when possible and not penalising the market positioning at a strategic level - the supply by sea, thus benefiting from slightly more favourable average transport costs, despite an increase in stock levels.

6.3 Selling and distribution costs

(In thousands of Euro)		Half year ending on		Changes
	30 June 2019	30 June 2018 pro forma	Δ	%
Personnel costs for sales and distribution	5,064	4,886	178	3.6%
Agent commissions	2,675	2,099	576	27.4%
Transports for sales	2,046	1,909	137	7.2%
Advertising and consultancy expenses	804	1,080	(276)	1.9%
Travel costs	740	726	14	-25.6%
Other sales and distribution costs	593	883	(290)	-32.8%
Total Sales and distribution costs	11,922	11,583	339	2.9%

The change, equal to Euro 339 thousand, is mainly due to the increase in agency costs deriving from the growth in sales on the domestic market and to the reduction in advertising costs related to a different mix of communication channels used, as well as a general cost rationalisation.

6.4 General and administrative costs

	Half year ending on	Changes
(In thousands of Euro)	30 June 2019	30 June 2018 pro-forma	Δ	%
Amortisation of intangible assets	3,676	3,721	(45)	-1.2%
Depreciation of tangible assets	775	462		313 67.7%
Provisions for risks and write-downs	55	350	(295)	- 84.3%
Cost of administrative staff	2,406	2,322	84	3.6%
Administrative, legal, personnel and management consultancy	1,818	1,554		264 17.0%
Commissions and fees	125	1,573	(1,448)	- 92.1%
Rent payable and other rental fees	88	80		8 10.0%
Remuneration of the Board of Directors and Board of Statutory Auditors	271	162		109 67.3%
Other general and administrative costs	917	1,023	(106)	- 10.4%
Total General and administrative costs	10,131	11,247	(1,116)	-9.9%

General and administrative costs, net of amortisation and depreciation of intangible assets deriving from the Purchase Price Allocation (Euro 2,887 thousand) and extraordinary charges related to the translisting from AIM to STAR and the M&A operation (Euro 1,611 thousand) recorded mainly under the items of costs for administrative consultancy and commissions, decreased compared to the previous six-month period, due to the commissions (success fee) relating to the Business Combination operation incurred in the first half of 2018.

6.5 Other non-operating costs and revenues

This item includes non-operating costs and revenues for a net positive balance of Euro 320 thousand; these refer to costs and revenues for which the Group performs a marginal operating function. The item can be broken down as follows:

	Half year ending on		Changes
(In thousands of Euro)	30 June 2019	30 June 2018 pro-forma	Δ	%
SIAE fees recovered	292	531	(239)	-45.0%
Recovery from suppliers for promotions	64	44	20	45.5%
Contingent assets	176	107	69	64.5%
(SIAE and CONAI contributions)	(334)	(560)	226	-40.4%
(Contingent liabilities)	(130)	(221)	91	-41.2%
(Capital losses)	(3)	(4)	1	-25.0%
(Gifts to customers for promotions)	(35)	(25)	(10)	40.0%
(Non-deductible costs)	(9)	(1,511)	1,502	-99.4%
Other non-operating costs /(revenues)	299	319	(20)	-6.3%
Total Other non-operating costs and revenues	320	(1,320)	1,640	100%

The change compared to the same six-month period of the previous year is mainly due to the costs incurred in the first half of 2018 (included in the item "non-deductible costs") for the Business Combination transaction.

6.6 Adjusted EBITDA

The main data used to calculate Adjusted EBITDA is shown below:

(In thousands of Euro)	Half year ending on		Changes
	30 June 2019	30 June 2018 pro-forma	Δ	%
Operating profit (loss)	3,199	(890)	4,088	100%
Amortisation/Depreciation of intangible and tangible assets	4,451	4,183	268	6.0%
Business combination costs/STAR	967	4,495	(3,528)	<100%
Other non-recurring costs/M&A	644	200	434	68.5%
Gains/(losses) on operating exchange rates	(77)	334	(211)	<100%
Adjusted EBITDA	9,183	8,323	860	10.3%

Adjusted EBITDA was Euro 9,183 thousand (Euro 8,323 thousand in 2018 pro-forma), an increase of 10.3%, and had a 16.6% margin on sales (17.1% in 2018 pro-forma).

The slight decrease in the margin, equal to 0.5% compared to the previous six months, is due to the rising cost of sales, partially offset by the net effect between a lower incidence of sales and distribution costs and a moderate increase in "ordinary" general and administrative costs, the latter also following the strengthening of the management structure and personnel of the group, in conformity with the compliance requirements set by STAR and to support the strategic development of the business.

The adjustments made to EBITDA, excluding amortisation and depreciation, amounted to Euro 1,534 thousand in the first half of 2019 (Euro 5,029 thousand in the same six-month period of 2018 pro-forma) and mainly consisted of:

(i) business combination/STAR costs: these relate to costs incurred for financial and legal consultancy and success fees of a non-recurring nature and related to the translisting from AIM to STAR;
(ii) other non-recurring costs: these include consultancy costs for M&A transactions for the acquisition of Systema and non-recurring charges/incentives;
(iii) operating exchange gains/(losses): the figure relates to the effect of the adjustment of trade items expressed in foreign currencies at the closing date of the period and the effect recognised in the financial items of the income statement, attributable to currency purchase transactions for trade transactions in dollars; although these are not non-recurring income and expenses, with this adjustment the Group intends to represent the operating performance, net of currency effects.

6.7 Financial income and charges

Net financial income and charges show a net negative balance of Euro 765 thousand (Euro 8,813 thousand at 30 June 2018 pro-forma).

Financial income of Euro 210 thousand refers to:

Euro 136 thousand for bank interest income;
Euro 74 thousand for the change, compared to the previous year, in the fair value of the warrants issued by the Group (no. 6,130,954 as at 30 June 2019);

Financial charges of Euro 975 thousand mainly refer to interest due to banks, related to the loan started on 29 June 2017 for an original amount of Euro 85,000 thousand.

The decrease compared to the previous six months is due to the following effects present in the first half of 2018:

Euro 12,088 thousand relating to the costs incurred for the purchase of the two Call Options held by the two Chief Executive Officers for Euro 12,800 thousand following the Business Combination; net of financial income of Euro 712 thousand relating to the sums received before the merger of Ginetta for the signing by the two Managers of the contracts relating to the Call Options;
Euro 4,631 thousand for income relating to the fair value of warrants.

6.8 Gains/(losses) on exchange rates

	Half year ending on			Changes
(In thousands of Euro)	30 June 2019	30 June 2018 pro-forma	Δ	%
Gains/(losses) on commercial exchanges	(89)	390	(479)	<100%
Gains/(losses) on financial exchanges	12	4	8	100%
Gains/(losses) on exchanges from derivatives	-	(54)	54	100%
Total Foreign exchange translation gains (losses)	(77)	340	(417)	<100%

The negative change of Euro 417 thousand is mainly due to the unfavourable trend of the EUR/USD exchange rate in the first half of 2019.

6.9 Adjusted EBIT

The main data used to calculate Adjusted EBIT is shown below:

(In thousands of Euro)	Half year ending on			Changes
	30 June 2019	30 June 2018 pro-forma	Δ	%
Operating profit (loss)	3,199	(890)	4,088	100%
PPA amortisation and depreciation	2,877	2,877	-	0.0%
Business combination costs/STAR	967	4,495	(3,528)	<100%
Other non-recurring costs/M&A	644	200	434	68.5%
Gains/(losses) on operating exchange rates	(77)	334	(211)	<100%
Adjusted EBIT	7,609	7,016	593	8.4%

Adjusted EBIT is Euro 7,609 thousand (Euro 7,016 thousand in 2018 pro-forma); the increase is mainly due to the factors mentioned in the Adjusted EBITDA paragraph.

6.10 Adjusted Group profit/loss

The main data used to calculate the Adjusted Group profit/loss is shown below:

(In thousands of Euro)	Half year ending on		Changes
	30 June 2019	30 June 2018 pro-forma	Δ	%
Group profit /loss	2,576	(424)	3,000	100%
Business combination costs/STAR	967	4,495	(3,528)	<100%
Other non-recurring costs/M&A	644	200	444	68.9%
PPA amortisation and depreciation, net of tax effect	2,074	2,074	-	0.0%
Fair value warrant, net of tax effect	(56)	(3,227)	3,171	<100%
Warrant income and charges	-	12,088	(12,088)	100%
Tax effect on costs of Business Combination/STAR	-	(400)	408	100%
Patent Box benefit on previous years	-	(10,128)	10,128	100%
Adjusted Group profit/loss	6,205	4,679	1,526	32.6%

The Adjusted Group profit/loss for the first half of 2019 amounted to Euro 6,205 thousand (Euro 4,679 thousand in the same period of 2018 pro-forma), up both in absolute terms (+ 32.6%) and as a percentage of sales (11.2% vs 9.6%), thanks to the improved operating performance and a decrease in net financial charges. In particular, the latter, net of extraordinary items, decreased by about Euro 600 thousand, due to both the reduction in average indebtedness for the period and the step-down in mid-2018 of the spread on the existing loan (thanks to the reduced level of indebtedness achieved); these charges are not affected by the acquisition of 60% of Systema, as they are paid in full using available liquidity.

7. Balance Sheet and Financial Position

Balance Sheet

	Of which			Of which
(In thousands of Euro)	Situation at	related		Situation at	related
ASSETS	30/06/2019	parties	%	31/12/2018	parties	%
Intangible assets	76,366	-	25.5%	78,614	-	25.1%
Goodwill	96,627	-	32.2%	93,857	-	30.0%
Property, plant and equipment	7,268	-	2.4%	7,229	-	2.3%
Right of use	2,117	-	0.7%	-	-	-
Deferred tax assets	912	-	0.3%	963	-	0.3%
Financial receivables (non-current)	525	525	0.2%	-	-	-
Total non-current assets	183,815	-	61.3%	180,663	-	57.8%
Inventories	27,523	-	9.2%	20,614	-	6.6%
Trade receivables	51,768	6,052	17.3%	59,421	5,689	19.0%
Current tax receivables	7,065	-	2.4%	5,967	-	1.9%
Financial assets	60	-	0.0%	56	-	0.0%
Other assets	3,558	-	1.2%	3,930	-	1.3%
Cash and cash equivalents	25,839	-	8.6%	41,989	-	13.4%
Total current assets	115,812	-	38.7%	131,977	-	42.2%
TOTAL ASSETS	299,627	-	100.0%	312,640	-	100.0%
					-
Share capital	21,343	-	7.1%	21,343	-	6.8%
Other reserves	156,166	-	52.1%	146,897	-	47.0%
Retained earnings from consolidation	8,489	-	2.8%	(6,243)	-	-2.0%
Group profit /loss	2,575	-	0.9%	32,378	-	10.4%
Group shareholders' equity	188,574	-	62.9%	194,375	-	62.2%
Shareholders' equity attributable to minority interests	1	-	0.0%	-	-	-
Total Shareholders' Equity	188,575	-	62.9%	194,375	-	62.2%
LIABILITIES
Payables to banks and other lenders	44,478	-	14.8%	51,667	-	16.5%
Deferred tax liabilities	20,469	-	6.8%	21,337	-	6.8%
Employee benefits	865	-	0.3%	411	-	0.1%
Provisions for risks and charges	1,568	-	0.5%	1,299	-	0.4%
Other financial liabilities	3,215	-	1.0%	-	-	-
Total non-current liabilities	70,595	-	23.5%	74,713	-	23.9%
Payables to banks and other lenders	13,535	-	4.5%	12,169	-	3.9%
Trade payables	16,019	359	5.3%	20,186	488	6.5%
Current tax payables	397	-	0.1%	93	-	0.0%
Provisions for current risks and charges	570	-	0.2%	530	-	0.2%
Other liabilities	5,692	-	1.9%	7,877	-	2.5%
Other financial liabilities	4,244	-	1.4%	2,698	-	0.9%
Total current liabilities	40,457	-	13.5%	43,552	-	13.9%
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	299,627	-	100.0%	312,640	-	100.0%

Financial Position

	Situation at	Situation at
(In thousands of Euro)	30/06/2019	31/12/2018
Cash and cash equivalents/ (Financial payables):
Cash	9	11
Bank deposits	25,830	41,978
Liquidity	25,839	41,989
Current financial receivables	60	56
Current bank payables	(13,535)	(12,169)
Other financial payables	(4,244)	(2,698)
Current financial indebtedness	(17,719)	(14,867)
Net current financial indebtedness	8,120	27,179
Non-current bank debts	(44,478)	(51,667)
Other financial payables	(3,215)	-
Non-current financial indebtedness	(47,693)	(51,667)
Net financial indebtedness	(39,574)	(24,488)
Other financial payables - Put/Call	2,700	-
Other current payables - Warrants	2,624	2,698
Other financial payables - IFRS 16	2,136	-
Adjusted Net financial indebtedness	(32,114)	(21,790)

The composition of the Group's net working capital and net invested capital at 30 June 2019 and 31 December 2018 is detailed below:

		Situation at
(In thousands of Euro)	30 June 2019	31 December 2018
Inventories	27,523	20,614
Trade receivables	51,768	59,421
Trade payables	(16,019)	(20,186)
Operating Trade Working Capital	63,272	59,849
Other working capital items	3,964	1,398
Net Working Capital	67,236	61,247
Non-current assets	183,815	180,663
Provisions and other non-current liabilities	(22,902)	(23,047)
Net capital invested	228,149	218,863
Net financial indebtedness	39,574	24,488
Shareholders' equity	188,575	194,375
Total shareholders' equity and Financial liabilities	228,149	218,863

The Group's Operating Trade Working Capital at 30 June 2019 is equal to Euro 63,272; the value compared to 31 December 2018 increases by Euro 3,423 thousand due to the seasonal effect of the Group's business; that is, mainly due to the purchase of the inventory necessary to support the higher sales in the second half of the year, partly offset by the reduction in trade receivables and payables at the end of the year of the following financial year.

The Group's Net Capital Invested amounted to Euro 228,149 thousand at 30 June 2019 (Euro 218,863 thousand at 31 December 2018); the change was mainly due, in addition to the increase in net working capital described

above, to the effect of the acquisition of Systema and the related - provisional - accounting of the capital gain resulting from the transaction for Euro 2,770 thousand.

The composition of the net financial indebtedness (also adjusted) at 30 June 2019 and 31 December 2018 is shown in detail below:

		Situation at	Changes
(In thousands of Euro)	30 June 2019	31 December 2018	Δ	%
(A) Cash	9	11	(2)	-18.2%
(B) Other cash and cash equivalents	25,830	41,978	(16,148)	-38.5%
(C) Securities held for trading	-	-	-	-
(D) Liquidity (A)+(B)+(C)	25,839	41,989	(16,150)	-38.5%
(E) Current financial receivables	60	56	4	7.1%
(F) Current bank payables	-	-	-	-
(G) Current portion of non-current debt	13,535	12,169	1,366	11.2%
(H) Other current financial payables	4,244	2,698	1,546	57.3%
(I) Current financial indebtedness (F)+(G)+(H)	17,779	14,867	2,912	19.6%
- of which guaranteed	-	-	-	-
- of which not guaranteed	17,779	14,867	2,912	19.6%
(J) Net current financial indebtedness (I)+(E)+(D)	(8,120)	(27,179)	19,059	-70.1%
(K) Non-current bank debts	44,478	51,667	(7,189)	-13.9%
(L) Bonds issued	-	-	-	-
(M) Other non-current financial payables	3,215	-	3,215	100%
(N) Non-current financial indebtedness (K)+(L)+(M)	47,693	51,667	(3,974)	-7.7%
- of which guaranteed	-	-	-	-
- of which not guaranteed	47,693	51,667	(3,974)	-7.7%
(O) Net financial indebtedness (J)+(N)	39,574	24,488	15,085	61.6%
Other financial payables - Put/Call	2,700	-	2,700	100%
Other current payables - Warrants	2,624	2,698	(74)	-2.8%
Other financial payables - Lease accounting (IFRS 16)	2,136	-	2,117	100%
Adjusted Net financial indebtedness	32,114	21,790	10,324	32.1%

Net financial indebtedness was Euro 39,574 thousand at 30 June 2019, an increase on 31 December 2018, though showing a low Leverage ratio (Net financial indebtedness/adjusted EBITDA), equal to 1.1x at 30 June 2019 vs 0.6x at 31 December 2018.

The indebtedness mainly includes medium/long-term bank loans, in addition to the debt for the exercise of put/calls relating to the purchase of the remaining 40% of the shares of Systema and the financial liability deriving from warrants and the application of IFRS 16.

The increase in net financial indebtedness at 30 June 2019, compared to 31 December 2018, of Euro 15,085 thousand, is mainly due to the following factors:

distribution of dividends for Euro 6,088 thousand on 22 May 2019;
payment of approximately Euro 2,500 thousand for the purchase of 60% of the company Pegaso s.r.l. (acquired on 3 April 2019), parent company of Systema;
payment of approximately Euro 1,400 thousand for the purchase of treasury shares in execution of the buy-back plan approved by the Shareholders' Meeting of 21 November 2018;
payment in January 2019 of the entire VAT payable for the month of December, for approximately Euro 1,100 thousand, the advance payment in December 2018 not being required as this is the first year of actual operating business of the merging company Crescita S.p.A. (now Cellularline).

The main phenomena that influenced cash flow trends in the periods under review are summarised below. Net cash flow generated/(absorbed) by operating activities

	Half year ending on
(In thousands of Euro)	30 June 2019	30 June 2018 pro-forma
Cash flow generated by operating activities
Gains/(losses) of the period	2,575	(424)
Adjusted for:
- Income taxes	220	9,200
- Net financial income/(expenses)	765	5,016
- Depreciation, amortisation and write-downs of fixed assets	5,290	4,147
Changes in:
- Inventories	(6,908)	(3,763)
- Trade receivables	7,594	22,931
- Trade payables	(4,167)	(7,985)
- Other changes in operating assets and liabilities	(3,648)	(2,601)
Taxes paid	-	(185)
Interest paid	(765)	(14,025)
Cash flow generated/(absorbed) by operating activities	942	12,573
Net charges deriving from the Business Combination/STAR	1,611	4,480
Advance payment for commercial contributions	1,733	-
Financial income from warrants	(74)	(4,812)
Net cash flow generated/(absorbed) by adjusted operating activities	4,212	12,241

The net cash flow generated/(absorbed) by the Adjusted operating activities decreased by approximately Euro 8,000 thousand due to a number of non-recurring factors in the first half of 2019, including:

lower collections of approximately Euro 3,700 thousand, following a non-recourse sale in Q4 2018;
higher advances of approximately Euro 1,400 thousand deriving from the advance payment of some products which are estimated to experience an increase in the purchase cost in the following months; this effect will be partially reabsorbed by the end of the financial year;
payment in January 2019 of the entire VAT payable for the month of December, for approximately Euro 1,100 thousand, the advance payment in December 2018 not being required as this is the first year of actual operating business of the merging company Crescita S.p.A. (now Cellularline).

Cash flow generated/(absorbed) by investment activities

	Half year ending on
(In thousands of Euro)	30 June 2019	30 June 2018 pro-forma
Cash flow from investment activities
Acquisition of subsidiary company, net of cash acquired and other costs	(2,770)	(70,139)
(Purchase)/sale of property, plant and equipment and intangible assets	(4,359)	(1,256)
Cash flow generated/(absorbed) by investment activities	(7,129)	(71,395)

In the first half of 2019 the investment activity mainly concerned:

goodwill deriving from the acquisition of 60% of Systema for Euro 2,770 thousand;
investments in plants, machinery and equipment for approximately Euro 1,800 thousand;
right of use of approximately Euro 2,100 thousand following the recognition of IFRS 16.

The main investments in the first half of 2018 concerned the Business Combination transaction, the effect of which is equal to the consideration paid, net of the liquidity acquired.

Cash flow generated/(absorbed) by lending activities

	Half year ending on
(In thousands of Euro)	30 June 2019	30 June 2018 pro-forma
Cash flow from financing activities
Increase/(Decrease) in financial liabilities	(6,666)	(4,852)
Increase/(Decrease) in other financial liabilities	5,079	4,812
(Purchase)/sale of treasury shares	(1,439)	(12,301)
Dividend distribution	(6,088)	-
Capital increase	-	8,043
Other changes in shareholders' equity	(849)	92,783
Net cash and cash equivalents generated by lending activities	(9,963)	88,485

The cash flow from financing activities at 30 June 2019 mainly reflects:

the payment of the instalment of the bank loan in place for Euro 6,666 thousand;
the distribution of a dividend of Euro 6,088 thousand, as resolved by the Shareholders' Meeting on 16 April 2019;
the payable for exercising the put/calls relating to Systema, amounting to Euro 2,700 thousand;
the purchase of treasury shares for Euro 1,439 thousand in execution of the buy-back plan approved by the Shareholders' Meeting of 21 November 2018.

8. Investments and research and development activities

During the first half of 2019 the Group continued its research and development activities, focusing its efforts on developing new projects deemed to be of particular importance:

study, design and development of innovative accessories for smartphones, tablets and electronics, also developing the related packaging and innovative display systems designed to highlight the technological content of products;
study, design and development of new sales channels, especially for the expansion of the Cellularline brand in the Digital sector;
continuation of the study, design and development to create an innovative B2B, B2C and Business Intelligence information system designed to optimise various business functions.

For the development of these projects, the Group incurred charges relating to the cost of the human resources involved in these activities, as well as the use of external consultants, which - after careful analysis - were partly capitalised in development costs and amortised over two years.

The research activities in question will continue throughout 2019, with greater focus on brand awareness.

9. Information on transactions with related parties, on non-recurring, atypical or unusual transactions

Information on transactions with related parties is presented in Note 5 to the Consolidated Consolidated Half-YEAR Financial Statements.

10. Atypical and/or unusual transactions

During the first half of 2019, there were no atypical and/or unusual transactions, as defined in CONSOB Communication no. DEM/6064293 of 28 July 2006.

11. Share-based payment arrangements

Information on Payment agreement based on shares is presented in Note 8.10 to the Consolidated Consolidated Half-YEAR Financial Statements.

12. Treasury shares and shares of the parent company

On 29 January 2019 the Board of Directors of Cellularline started a programme for the purchase of treasury shares, starting from 30 January 2019, based on the authorising resolution of the Shareholders' Meeting of 21 November 2018, until 30 June 2019.

At 30 June 2019, the Company had purchased 197,428 ordinary shares at an average price of Euro 7.31, for a total value of Euro 1,438,601; at the same date, the Parent Company held 6.6% of the ordinary shares.

Subsequently, on 10 July 2019, the Board of Directors approved the continuation of the treasury share purchase programme as from 22 July 2019, in accordance with the resolutions of the above-mentioned Shareholders' Meeting.

The Board of Directors resolved that the purchase will be carried out in more tranches, up to a maximum number of 230,000 shares, for a maximum value of Euro 2,300,000. The programme will last until 31 December 2019, without prejudice to the validity for the 18 months following the Shareholders' Meeting of the authorisation to purchase of the Shareholders' Meeting of 21 November 2018.

13. Main risks and uncertainties the Group is exposed to

This section provides information on the Group's exposure to each of the risks and uncertainties, the objectives, policies and processes for managing these risks and the methods used to assess them, as well as the Group's capital management.

The overall responsibility for creating and supervising a Group risk management system lies with the Management, which is responsible for developing and monitoring the Group's risk management policies.

The Group's risk management policies are designed to identify and analyse the risks to which the Group is exposed, to establish appropriate limits and controls and to monitor risks and compliance with these limits. These policies and related systems are reviewed regularly to reflect any changes in market conditions and the Group's activities. Through training, standards and management procedures, the Group aims to create a disciplined and constructive control environment in which its employees are aware of their roles and responsibilities.

In this context, the Parent Company Cellularline S.p.A. has adopted the Code of Ethics and the Organisation and Management Model pursuant to Legislative Decree No. 231 of 8 June 2001, giving appropriate notice to all the parties concerned, and keeps it updated according to regulatory developments and corporate activity.

13.1 Risks related to competition and competitiveness

The market for accessories for mobile devices (smartphones and tablets) is characterised by a high level of competitiveness, which could also be strengthened by the possible entry of potential new Italian or foreign competitors. The Group's current or future competitors may be able to implement marketing and commercial development policies that will enable them to gain market share to the detriment of those operators that use multiple sales channels. In this case, the Group could be forced to reduce its sales prices without any corresponding reduction in the purchase costs of its products, thus achieving a lower margin on the sale of its products. One of the Group's main threats is the sale of competing products by producers located in the Far East.

If the Group, in the event of an increase in the number of direct and/or indirect competitors, is not able to maintain its competitive strength on the market, there could be negative effects on the business and growth prospects as well as on the economic, equity and financial position of the Group. Further risks are linked to possible changes in consumer purchasing behaviour in the light of demographic changes, increasing digitisation, changing economic conditions and purchasing power. Any misinterpretation of developments in consumer behaviour, trends in terms of prices and product ranges may result in the risk of failed or delayed adoption of

appropriate sales models and in the failed or delayed exploration of new sales channels , with possible negative effects on the Group's economic, equity and financial position.

13.2 Risks connected to seasonal phenomena

The market the Group operates in is characterised by seasonal phenomena that are typical of the market of electronic products and accessories. In particular, sales in the second half of each year account on average for more than 60% of total annual sales, with a peak in demand in the last quarter of the year (Black Friday and Christmas). Absolute EBITDA, in consideration of a more linear and uniform distribution of structural costs (personnel, rents and general expenses) throughout the year, is also affected by this seasonality, showing a higher average EBITDA incidence in the second half of the year. The incorrect definition of the product range in terms of variety and availability during the periods of the year that are characterised by high sales values or the untimeliness of the change in strategy in terms of updated sales data and information could have a negative impact on the match between product offer and customer demand, with negative effects on the Group's economic, equity and financial position.

13.3 Risks associated with the evolution of the regulatory framework

The Group is subject to the regulations applicable to products manufactured and/or marketed. The evolution of the regulations or any changes to the regulations in force, also at international level, could require the Group to bear additional costs to adapt its production facilities or the characteristics of its products to the new provisions, with a consequent negative effect on the Group's growth prospects as well as on its economic, equity and financial position.

13.4 Risks connected with the macroeconomic trend

The Group operates in various international markets and is therefore exposed to the risks of possible changes in the geo-political and macroeconomic conditions of those markets. In particular, the Group is exposed to the risk of possible future reductions in revenues deriving from the limited purchasing power of the average consumer due to the continuation of any phenomena of economic recession. The performance of the European economy, the context of political, economic and financial instability as well as the volatility of the financial markets could influence the performance of the Group, with possible negative effects on its economic, equity and financial position.

The economic environment and the perception of weak economic recovery prospects could also further influence changes in consumer preferences and spending patterns.

With reference to the worsening of the crisis between China and the USA regarding customs duties, the Parent Company is not in a position to assess the impact that this could have on macroeconomic trends and, consequently, on the Group's operations and results. If the current period of gradual economic recovery were to slow down or halt, or if further periods of economic and/or financial crisis were to occur, or if trade tensions

between the USA and China were to become even more acute, there could be possible negative effects on the Group's economic, equity and financial position.

13.5 Risk associated with price trends and possible procurement difficulties and relations with suppliers

The Group operates on international markets, with customers operating mainly in the EMEA area and with suppliers of products located mainly in the Far East (China and the Philippines); as of today, sales are therefore made almost exclusively in EUR, while the majority of purchases of products are regulated in USD, as is the practice of the reference industry.

The Group is therefore exposed to the exchange rate risk - for the main types of product supplies - almost exclusively to the USD and is considering the arrangement of a policy to hedge against this risk, although there are numerous factors that limit the risk profile, including: the high rate of product innovation (about 35% of annual turnover derives from products launched in the same year), the possibility to carry out, in a relatively short time (3-6 months), revisions to customer price lists and, finally, the high contractual flexibility with suppliers in the Far East (with whom there are no - with rare exceptions - commitments to purchase minimum quantities at predefined prices for periods exceeding 6 months).

The main foreign exchange rates applied during the year were as follows:

Currency	Average H1	End of period	Average H1	Period end at 31
	2019	30 June 2019	2018	December 2018
US Dollar/ Euro	1.13	1.13	1.21	1.15

In 2019, the Group did not use derivative financial instruments to hedge fluctuations in the EUR/USD exchange rate.

In addition, any legislative, political and economic changes, as well as potential social instability or the introduction of restrictions or customs duties on the export of products, or the introduction into the European Union of any restrictions on the import of products from these countries, could have a negative impact on the production capacity of suppliers and on the procurement activities of the Group, with consequent possible negative effects on the business and prospects, as well as on the economic, equity and financial position of the Group. The Group, as a result of any future cases of non-delivery and/or delayed delivery of products and components by suppliers and/or third party shippers (in particular from the so-called Emerging countries) could, due to the occurrence of such events, suffer delays and/or interruptions in the product production and distribution cycle, with possible negative effects on the business and its prospects, as well as on its economic, equity and financial position.

13.6 Liquidity Risk

From an operational point of view, the Group controls the liquidity risk through the annual planning of expected cash flows and payments. Based on the results of such planning, the needs, and thus the financial resources for covering them, are identified. The average debt exposure is shown below:

(In thousands of Euro)	within 12 months	1 - 5 years	beyond 5 years
Employee benefits	-	865	-
Trade payables	16,019	-	-
Deferred tax liabilities	-	20,469	-
Payables to banks and other lenders	13,535	44,478	-
Provisions for non-current risks and charges	-	1,568	-
Provisions for current risks and charges	570	-	-
Other liabilities	5,692	-	-
Other financial liabilities	4,244	3,215	-
Current tax payables	397	-	-
Total	40,457	70,595	-

In order to prevent unforeseen cash outflows from becoming critical, the Group aims to retain a balance between maintaining the funding and flexibility, through the use of available liquidity and credit lines.

13.7 Credit risks

Credit risk is the risk that a customer or one of the counterparties to a financial instrument may cause a financial loss by defaulting on an obligation and arises mainly from the Group's trade receivables and financial investments.

The Group is exposed to the risk that its customers may delay or fail to meet their payment obligations within the agreed terms and conditions and that the internal procedures adopted in relation to the assessment of creditworthiness and solvency of customers are not sufficient to ensure the successful completion of collections. Such failed payments, late payments or other default situations may be due to the insolvency or bankruptcy of the customer, economic events or specific situations of the customer.

Specifically, attention must be paid to the credit policy with regard to both consolidated and newly acquired customers, strengthening the policies of preventive action, by acquiring more complete commercial information (from different sources) for all major and/or new customers and by making the analyses of credit reports progressively more systematic, including the assessment of the customer portfolio and the definition of credit limits.

However, it should be noted that the progressive deterioration of the economic/financial performance of some historical Italian Consumer Electronics retailers in past years has had an inevitable impact on the amount of the provision for bad debts set aside in recent periods.

(In thousands of Euro)	expiring	within 6 months	from 6 to 12 months	beyond 12 months
Trade receivables (gross of provision for
bad debts)	34,018	9,077	458	5,612
Receivables from associated companies	1,645	2,759	1,988	-
Total gross trade receivables	35,663	11,836	2,445	5,612
(Provision for bad debt)	-	-	-	(3,788)
Total Net trade receivables	35,663	11,836	2,445	1,824

The schedule of trade receivables is shown below:

The Group sets aside an allowance for impairment losses that represents an estimate of losses on trade receivables, other receivables and non-current financial assets. The main components of this allowance are the individual write-downs of significant exposures and the collective write-down of homogeneous groups of assets against losses already incurred that have not yet been identified; the collective write-down is determined on the basis of the historical series of similar losses on receivables.

13.8 Interest rate risks

In relation to the risk of changes in interest rates, the Group has not yet entered into interest rate swaps to hedge the risk of changes in interest rates on the syndicated loan, started on 29 June 2017 for an original amount of Euro 85 million (reduced to Euro 58.3 million at 30 June 2019), given also the current limited level of net indebtedness; consequently, interest rates fluctuations could lead to an increase in financial charges relating to debt, which is currently exclusively at variable rates.

With reference to the interest rate risk, a sensitivity analysis was carried out to determine the effect on the consolidated income statement (gross of the tax effect) that would result from a hypothetical positive and negative change of 100 basis points in interest rates compared to those actually recorded in each period. The analysis was carried out mainly with regard to short and medium/long-term financial liabilities. The following table shows the results of the analysis carried out.

	Rate increase 1%
(In thousands of Euro)	30 June 2019	30 June 2018 pro-forma
Payables to banks and other lenders	(358)	(417)

It should be noted that a negative change of 100 basis points in interest rates does not determine a positive effect on the Group income statement since the loans require the Euribor not to be negative (floor at 0.0%).

14. List of secondary offices

The Company has its registered office in Reggio Emilia, Via Grigoris Lambrakis no. 1/A and at 30 June 2019 had no secondary offices.

15. Personnel information

There have been no particular cases worthy of mention in this report, such as deaths, serious accidents at work or occupational diseases for which the Group has been held responsible.

The work is carried out in full compliance with all the rules and regulations in force regarding safety in the workplace.

Furthermore, the Group routinely trains its human resources, in the belief that the professional and working growth of each individual is a prerequisite for the continuous improvement and enhancement of the activities carried out.

The number of employees at the end of the period was 224 (215 at 31 December 2018).

16. Significant events during the half-year and after the end of the six month period

Significant events during the six-month period

Treasury share purchase programme

On 29 January 2019, the Parent Company's Board of Directors launched a treasury share purchase programme, based on the authorisation of the Shareholders' Meeting of 21 November 2018 (until 30 June 2019) - which provided for a maximum number of shares not exceeding 2% of the share capital for a maximum value of Euro 4,300 thousand to be carried out within 18 months from the date of the Shareholders' Meeting - aimed at:

setting up a share depository to sell, dispose of and/or use its treasury shares, in line with the strategic guidelines that the Group intends to pursue, in the context of extraordinary transactions,
supporting the liquidity of the shares themselves, so as to facilitate the smooth running of trading and avoid price movements that are not in line with market trends, in accordance with current market practices.

Purchases will be made at a unit price that must not exceed a maximum of 5% of the reference price recorded by the stock in the stock exchange session of the day preceding each individual transaction. The programme shall run until 31 December 2019.

Acquisition of control of Systema, player operating in the Telco channel

On 23 February 2019 the Group signed a binding agreement for the acquisition of control over Systema s.r.l., a company operating in the mobile telephone accessories market on the Telco channel at European level, which has been collaborating with leading international telephone operators in Central and Southern Europe for more than 10 years now.

On 3 April 2019, the Group finalised the closing of the acquisition of control of Systema by purchasing 60% of the share capital of Pegaso s.r.l., a company that holds the entire share capital of Systema.

Through this operation, Cellularline significantly strengthens its European positioning also in the Telco channel.

Project for listing on the STAR segment of the MTA

The Group continued its preparatory activities for the project of admission to trading of the Company's ordinary shares and warrants on the Mercato Telematico Azionario (STAR segment); on 17 April 2019 the Company submitted its application for listing to Borsa Italiana S.p.A..

Significant events after the half-year closing

Admission to listing on the STAR segment of the MTA

On 15 July 2019 Borsa Italiana S.p.A. by order no. 8577, authorised the admission to listing of the Company's ordinary shares and warrants on the Mercato Telematico Azionario ("MTA") organised and managed by Borsa Italiana and their simultaneous removal from trading on the multilateral trading facility AIM Italia.

On 17 July 2019, the National Commission for Companies and the Stock Exchange (CONSOB), with communication no. 0416568/19, approved the prospectus for the admission to trading of the Company's ordinary shares and warrants on the Mercato Telematico Azionario (MTA) organised and managed by Borsa Italiana S.p.A.

On 18 July 2019, Borsa Italiana S.p.A. issued a notice to commence trading of the Company's ordinary shares and warrants on the Mercato Telematico Azionario (MTA) starting from 22 July 2019. In that same notice, Borsa Italiana also awarded the Company's ordinary shares STAR status.

Treasury share purchase programme

On 10 July 2019, the Board of Directors approved the continuation of the treasury share purchase programme as from 22 July 2019, in accordance with the resolutions of the Shareholders' Meeting of 21 November 2018. The Board of Directors resolved that the purchase will be carried out in more tranches, up to a maximum number of 230,000 shares, for a maximum value of Euro 2,300,000. The programme will last until 31 December 2019, without prejudice to the validity for the 18 months following the Shareholders' Meeting of the authorisation to purchase of the Shareholders' Meeting of 21 November 2018.

Changing Systema's company name

On 29 August 2019, the Shareholders' Meeting of Systemaitalia s.r.l. changed the company name to Systema s.r.l..

17. Management outlook

The market trend forecast for the second half of 2019 is not expected to differ significantly from that of the first half, as the positive effects of the launch of numerous new premium smartphones and the favourable trend of some product categories (audio, bluetooth products, wireless charging, etc.) could be temporarily offset by lower sales of Chinese-made smartphones due to the so-called US/China "trade wars".

Despite this complex market context, the Group expects its revenues to continue growing in the second half of the year, mainly thanks to the effects of the acquisition of Systema, constant product innovation and a strengthened presence in the various channels. Overall, it is also conceivable that the incidence of turnover

developed in the Italian market will increase slightly compared to 2018, due to the absence of the non-recurring negative factors that occurred in the previous half year in Italy.

With reference to product margins, it should be noted that the percentage erosion that occurred during the first half of the year derives primarily from Systema's lower margin; with particular reference to this company, it should be noted that the integration process and, consequently, the achievement of the first synergies of revenues and costs, will be completed during the fourth quarter of 2019 and therefore their positive impacts will be limited in 2019, but at full capacity from 2020.

Reggio Emilia, 12/09/2019.

The Chairperson of the Board of Directors Mr. Antonio Luigi Tazartes

Manager responsible for preparing the accounting and corporate documents Stefano Cerrato

ATTACHMENT 1

CONSOLIDATED FINANCIAL STATEMENTS OF CELLULAR LINES AT 30 JUNE 2019 CONSOLIDATED BALANCE SHEET AND FINANCIAL POSITION

(In thousands of Euro)	Situation at 30/06/2019	Of which related parties	Situation at 31/12/2018	Of which related parties
ASSETS
Non-current assets
Intangible assets	76,366	-	78,614	-
Goodwill	96,627	-	93,857	-
Property, plant and equipment	7,268	-	7,229	-
Right of use	2,117	-	-	-
Deferred tax assets	912	-	963	-
Financial receivables	525	525	-	-
Total non-current assets	183,815	-	180,663	-
Current assets
Inventories	27,523	-	20,614	-
Trade receivables	51,768	6,411	59,421	5,813
Current tax receivables	7,065	-	5,967	-
Financial assets	60	-	56	-
Other assets	3,558	-	3,930	-
Cash and cash equivalents	25,839	-	41,989	-
Total current assets	115,812	-	131,977	-
TOTAL ASSETS	299,627	-	312,640	-
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital	21,343	-	21,343	-
Other reserves	156,166	-	146,897	-
Retained earnings from consolidation	8,489	-	(6,243)	-
Group profit /loss	2,575	-	32,378	-
Group shareholders' equity	188,574	-	194,375	-
Shareholders' equity attributable to minority interests	1	-	-	-
TOTAL SHAREHOLDERS' EQUITY	188,575	-	194,375	-

LIABILITIES
Non-current liabilities
Payables to banks and other lenders	44,478	-	51,667	-
Deferred tax liabilities	20,469	-	21,337	-
Employee benefits	865	-	411	-
Provisions for risks and charges	1,568	-	1,299	-
Other financial liabilities	3,215	-	-	-
Total non-current liabilities	70,595	-	74,713	-
Current liabilities
Payables to banks and other lenders	13,535	-	12,169	-
Trade payables	16,019	359	20,186	124
Current tax payables	397	-	93	-
Provisions for risks and charges	570	-	530	-
Other liabilities	5,692	-	7,877	-
Other financial liabilities	4,244	-	2,698	-
Total current liabilities	40,457	-	43,552	-
TOTAL LIABILITIES	111,052	-	118,265	-
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	299,627	-	312,640	-

CONSOLIDATED FINANCIAL STATEMENTS OF CELLULAR LINES AT 30 JUNE 2019 PRO-FORMA CONSOLIDATED INCOME STATEMENT

(In thousands of Euro)	Half year ending on 30/06/2019	Of which related parties	Half year ending on 30/06/2018 Pro-forma	Of which related parties
Revenues from sales	55,288	2,292	48,727	1,721
Cost of sales	(30,356)	-	(25,466)	-
Gross Operating Margin	24,932	-	23,261	-
Selling and distribution costs	(11,922)	-	(11,583)	-
General and administrative costs	(10,131)	(20)	(11,247)	(20)
Other non-operating costs /(revenues)	320	(53)	(1,320)	(50)
Operating profit (loss)	3,199	-	(890)	-
Financial income	210	-	5,193	-
Financial charges	(975)	-	(14,006)	-
Gains/(losses) on exchange rates	(77)	-	340	-
Income from (Expense on) equity investments	-	-	(262)	-
Profit (loss) before taxes	2,356	-	(9,624)	-
Current and deferred taxes	220	-	9,200	-
Profit/loss before minority interests	2,576	-	(424)	-
Profit/loss pertaining to minority interests	(1)	-	-	-
Group profit /loss	2,575	-	(424)	-

COMPREHENSIVE PRO-FORMA CONSOLIDATED INCOME STATEMENT

(In thousands of Euro)	Half year ending on 30/06/2019	Half year ending on 30/06/2018 Pro-forma
Group profit /loss	2,575	(424)
Other components of comprehensive profit/loss that will not be reclassified to the income statement
Actuarial gains (losses) on defined plans and benefits	(102)	8
Actuarial gains (losses) on provisions for risks	(135)	18
Income taxes on other components of comprehensive profit/loss	66	(7)
Total other components of comprehensive profit/loss	(171)	19
Total comprehensive profit/loss for the year	2,404	(405)

ATTACHMENT 1

CONSOLIDATED FINANCIAL STATEMENTS OF CELLULAR LINES AT 30 JUNE 2019 PRO-FORMA CONSOLIDATED CASH FLOW STATEMENT

(In thousands of Euro)	Half year ending on 30/06/2019	Half year ending on 30/06/2018 Pro-forma

Gains/(losses) of the period	2,575	(424)
Current taxes	220	9,200
Amortisation	4,451	4,183
Write-downs and provisions	839	(36)
Income from (Expense on) equity investments	-	262
Financial income/expenses accrued	765	5,016
	8,850	18,201
(Increase)/decrease in inventories	(6,908)	(3,763)
(Increase)/decrease in trade receivables	7,594	22,931
Increase/(decrease) in trade payables	(4,167)	(7,985)
Increase/(decrease) in other assets and liabilities	(3,643)	(2,598)
Payment of employee benefits	(21)	(3)
	1,706	26,783
Net financial charges paid	(765)	(14,025)
Income taxes paid	-	(185)
Cash flow generated (absorbed) by operating activities	942	12,573
Net charges deriving from the Business Combination/STAR	1,611	4,480
Advance payment for commercial contributions	1,733	-
Financial income from warrants	(74)	(4,812)
Adjusted Cash flow generated (absorbed) by operating activities	4,212	12,241
Acquisition of subsidiary company, net of cash acquired and other costs	(2,770)	(70,139)
(Purchase)/sale of property, plant and equipment and intangible assets	(4,359)	(1,256)
Net cash flow generated by (absorbed) investing activities	(7,129)	(71,395)
Other financial receivables and payables	4,236	4,812
Capital increase	-	8,043
(Dividends/reserves distributed)	(6,088)	-
Net (purchase)/sale of treasury shares	(1,439)	(12,301)
Other SE changes	(849)	92,783
Long-term (decrease) in payables to banks and other lenders	(6,666)	(19,666)
Long-term payables to banks and other lenders - loan origination	-	13,000
Increase in payables to other lenders	843	1,814
Net cash flow generated by (absorbed) financing activities	(9,963)	88,485
Increase/(decrease) in cash and cash equivalents	(16,150)	29,663
Cash and cash equivalents at the beginning of the year	41,989	11,941
Cash and cash equivalents at year end	25,839	41,605

CONSOLIDATED HALF-YEAR

FINANCIAL STATEMENTS

AT 30 JUNE 2019

CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2019

STATEMENT OF THE CONSOLIDATED BALANCE SHEET AND FINANCIAL POSITION

(In thousands of Euro)	Notes	Situation at 30/06/2019	Of which related parties	Situation at 31/12/2018	Of which related parties
ASSETS
Non-current assets
Intangible assets	4.1	76,366	-	78,614	-
Goodwill	4.2	96,627	-	93,857	-
Property, plant and equipment	4.3	7,268	-	7,229	-
Right of use	4.4	2,117	-	-	-
Deferred tax assets	4.5	912	-	963	-
Financial receivables	4.6	525	525	-	-
Total non-current assets		183,815	-	180,663	-
Current assets
Inventories	4.7	27,523	-	20,614	-
Trade receivables	4.8	51,768	6,411	59,421	5,813
Current tax receivables	4.9	7,065	-	5,967	-
Financial assets		60	-	56	-
Other assets	4.10	3,558	-	3,930	-
Cash and cash equivalents	4.11	25,839	-	41,989	-
Total current assets		115,812	-	131,977	-
TOTAL ASSETS		299,627	-	312,640	-
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity
Share capital		21,343	-	21,343	-
Other reserves		156,166	-	146,897	-
Retained earnings from consolidation		8,489	-	(6,243)	-
Group profit /loss		2,575	-	32,378	-
Group shareholders' equity	4.12	188,574	-	194,375	-
Shareholders' equity attributable to minority interests		1	-	-	-
TOTAL SHAREHOLDERS' EQUITY		188,575	-	194,375	-

LIABILITIES
Non-current liabilities
Payables to banks and other lenders	4.13	44,478	-	51,667	-
Deferred tax liabilities	4.5	20,469	-	21,337	-
Employee benefits	4.14	865	-	411	-
Provisions for risks and charges	4.15	1,568	-	1,299	-
Other financial liabilities	4.13	3,215	-	-	-
Total non-current liabilities		70,595	-	74,713	-
Current liabilities
Payables to banks and other lenders	4.13	13,535	-	12,169	-
Trade payables	4.16	16,019	359	20,186	124
Current tax payables	4.5	397	-	93	-
Provisions for risks and charges	4.15	570	-	530	-
Other liabilities	4.17	5,692	-	7,877	-
Other financial liabilities	4.13	4,244	-	2,698	-
Total current liabilities		40,457	-	43,552	-
TOTAL LIABILITIES		111,052	-	118,265	-
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES		299,627	-	312,640	-

CONSOLIDATED BALANCE SHEET AND FINANCIAL POSITION

CONSOLIDATED INCOME STATEMENT

(In thousands of Euro)	Notes	Half year ending on 30/06/2019	Of which related parties	Half year ending on 30/06/2018	Of which related parties
Revenues from sales	4.18	55,288	2,292	12,819	152
Cost of sales	4.19	(30,356)	-	(7,419)	-
Gross Operating Margin		24,932	-	5,400	-
Selling and distribution costs	4.20	(11,922)	(350)	(1,819)	-
General and administrative costs	4.21	(10,131)	(20)	(5,592)	(3)
Other non-operating costs /(revenues)	4.22	320	(53)	(31)	(8)
Operating profit (loss)		3,199	-	(2,042)	-
Financial income	4.23	210	-	4,554	-
Financial charges	4.23	(975)	-	-	-
Gains/(losses) on exchange rates	4.24	(77)	-	224	-
Income from (Expense on) equity investments		-	-	(262)	-
Profit (loss) before taxes		2,356	-	2,474	-
Current and deferred taxes	4.25	220	-	10,345	-
Profit/loss before minority interests		2,576	-	12,819	-
Profit/loss pertaining to minority interests		(1)	-	-	-
Group profit /loss		2,575	-	12,819	-
Basic earnings per share (Euro per share)	4.26	0.13		0.89
Diluted earnings per share (Euro per share)	4.26	0.13		0.89

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In thousands of Euro)	Notes	Half year ending on 30/06/2019	Half year ending on 30/06/2018
Group profit /loss		2,575	12,819
Other components of comprehensive profit/loss that will not be reclassified to the income statement
Actuarial gains (losses) on defined plans and benefits		(102)	18
Actuarial gains (losses) on provisions for risks		(135)	8
Income taxes on other components of comprehensive profit/loss		66	(7)
Total other components of comprehensive profit/loss		(171)	19
Total comprehensive profit/loss for the year		2,404	12,838
Basic earnings per share (Euro per share)	4.26	0.13	0.89
Diluted earnings per share (Euro per share)	4.26	0.13	0.89

CONSOLIDATED CASH FLOW STATEMENT

(In thousands of Euro)	Half year ending on 30/06/2019	Half year ending on 30/06/2018

Gains/(losses) of the period	2,575	12,819
Current taxes	220	10,345
Amortisation	4,451	697
Write-downs and provisions	839	1,987
Income from (Expense on) equity investments	-	262
Financial income/expenses accrued	765	(4,631)
	8,851	21,480
(Increase)/decrease in inventories	(6,908)	(21,537)
(Increase)/decrease in trade receivables	7,594	(50,731)
Increase/(decrease) in trade payables	(4,167)	20,055
Increase/(decrease) in other assets and liabilities	(3,643)	(431)
Payment of employee benefits	(21)	(3)
	1,706	(31,167)
Net financial charges paid	(765)	(185)
Income taxes paid	-	11,122
Cash flow generated (absorbed) by operating activities	942	(20,230)
Net charges deriving from the Business Combination/STAR	1,611	4,480
Advance payment for commercial contributions	1,773	-
Financial income from warrants	(74)	(4,812)
Adjusted Cash flow generated (absorbed) by operating activities	4,212	(20,561)
Acquisition of subsidiary company, net of cash acquired and other costs	(2,770)	-
Goodwill from Business Combination	-	(93,857)
(Purchase)/sale of property, plant and equipment and intangible assets	(4,359)	(87,397)
Net cash flow generated by (absorbed) investing activities	(7,129)	(181,254)
Other financial receivables and payables	4,236	(570)
Capital increase	-	8,043
(Dividends/reserves distributed)	(6,088)	-
Net (purchase)/sale of treasury shares	(1,439)	(12,301)
Other SE changes	(849)	44,476
Long-term (decrease) in payables to banks and other lenders	(6,666)	(19,666)
Long-term payables to banks and other lenders - loan origination	-	89,976
Payment of transaction costs relating to financial liabilities	843	1,814
Net cash flow generated by (absorbed) financing activities	(9,963)	111,772
Increase/(decrease) in cash and cash equivalents	(16,150)	(89,710)
Cash and cash equivalents at the beginning of the year	41,989	131,315
Cash and cash equivalents at year end	25,839	41,605

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY

(In thousands of Euro)	Share Capital	Other reserves	Profit/ (losses) carried forward	Profit/loss for the year	Minority interest in reserves and result	Total Shareholders' Equity
Balance at date of incorporation 1 February 2017	-	-	-	-	-		-
Capital increase	13,300	116,180	-	-	-		129,480
Comprehensive profit/loss for the year	-	-	-	(3,488)	-		(3,488)
Balance at 31 December 2017	13,300	116,180	-	(3,488)	-		125,992
Allocation of previous year's result	-	-	(3,488)	3,488	-		-
Changes in the scope of consolidation		58,478	(5,594)	-	-		52,884
Withdrawal of members from Business Combination	-	(12,301)	-	-	-		(12,301)
Comprehensive income for the period	-	19	-	-	-		19
Capital increase	8,043	-	-	-	-		8,043
Gains/(losses) of the period	-	-	-	(424)	-		(424)
Balance at 30 June 2018	21,343	162,376	(9,082)	(424)	-		174,213
Allocation of previous year's result	-	-	(3,488)	3,488	-		-
Changes in the scope of consolidation	-	42,882	(2,755)	-	-		40,127
Withdrawal of members from Business Combination		(12,301)	-	-	-		(12,301)
Comprehensive income for the period	-	136	-	-	-		136
Capital increase	8,043	-	-	-	-		8,043
Comprehensive profit/loss for the year	-	-	-	32,378	-		32,378
Balance at 31 December 2018	21,343	146,897	(6,243)	32,378	-		194,375

Allocation of previous year's result		8,065	24,313	(32,378)		-	-
Changes in the scope of consolidation		1,375	(2,054)		-	-	(679)
Other components of the statement of comprehensive income		(171)		-	-	-	(171)
Dividend distribution		-	(6,088)		-	- (6,088)
Purchase of treasury shares		-	(1,439)		-	- (1,439)
Gains/(losses) of the period		-		- 2,575		1	2,575
Balance at 30 June 2019	21,343	156,166	8,489	2,575		1	188,574

EXPLANATORY NOTES

1. Introduction

During 2018 the Parent Company completed a Business Combination transaction that provided for the merger by incorporation of Ginetta S.p.A. and Cellular Italia S.p.A. into Cellularline (formerly Crescita S.p.A.). This merger took place following the acquisition by the Company of a 49.87% stake in the share capital of Ginetta, in turn the sole shareholder of Cellular Italia, for a cash consideration of approximately Euro 80 million and a cash consideration of Euro 73 million, deriving from the exchange with third parties for the remaining 50.13%.

Before the merger, Crescita S.p.A. was a company incorporated according to the Special Purpose Acquisition Company (SPAC) scheme, listed on the AIM Italia market managed by Borsa Italiana S.p.A. and having the purpose of collecting - through the placement of its own ordinary shares - risk capital to be used for the acquisition of a significant holding in a company, firm, enterprise or business branch, to be carried out in any manner, including aggregation through contribution or merger, also in combination with the purchase or subscription of equity investments. Ginetta S.p.A. was a company falling within the definition of the so-called "mixed holdings", whose main activity was the acquisition, management and disposal of equity investments and other interests in both domestic and foreign companies. Cellular Italia S.p.A. was a leading company in the trade of accessories for multimedia products, for connectivity in motion. Cellularline S.p.A., derived from the Business Combination on 4 June 2018, is now one of the leading operators in the sector of accessories for smartphones and tablets in the EMEA area.

Since 22 July 2019, Cellularline shares have been listed on the STAR segment of the Milan Stock Exchange.

At the date of the Consolidated Consolidated Half-YEAR Financial Statements at 30 June 2019, the shareholders of Cellularline holding more than 5% of the share capital with voting rights are as follows:

L Catterton Europe 10.43%
Christian Aleotti 7.96%

It should be noted that the consolidated income statement figures presented below are not comparable with the corresponding previous period of 2018; in fact, the consolidated income statement at 30 June 2018 represents the economic effects of the "operating" companies only from 4 June 2018 (date of legal effectiveness of the merger).

For a better understanding of the Group's business, reference should be made to the Interim Report on the Operating Performance, where a pro-forma consolidated income statement at 30 June 2018 is presented as if the Business Combination had taken place on 1 January 2018.

2. Criteria adopted to prepare the Consolidated Consolidated Half-YEAR Financial Statements and summary of accounting principles

The following are the preparation criteria, main accounting policies and measurement criteria adopted to prepare and draw up the Consolidated Consolidated Half-YEAR Financial Statements for the six-month period ended 30 June 2019 (the "Consolidated Consolidated Half-YEAR Financial Statements"). These principles and criteria were applied consistently for all the years presented in this document, taking into account the provisions of note 2.5.1 "Changes in accounting principles".

2.1 Basis for the preparation of the Consolidated Consolidated Half-YEAR Financial Statements

These Consolidated Consolidated Half-YEAR Financial Statements were prepared in accordance with IAS 34 (Interim financial statements) and should be read in conjunction with the Group's latest annual consolidated financial statements at 31 December 2018 ("the latest financial statements"). Although they do not include all the information required for full disclosure of the financial statements, specific explanatory notes are included to explain events and transactions that are relevant to understanding changes in the Group's financial position and performance since the last financial statements.

2.2 Criteria for the preparation of the Consolidated Consolidated Half-YEAR Financial Statements

The Consolidated Consolidated Half-YEAR Financial Statements were prepared on the assumption of going concern, as the directors verified that there are no financial, management or other indicators that could indicate critical issues regarding the Group's ability to meet its obligations in the foreseeable future and in particular in the next 12 months.

The Consolidated Consolidated Half-YEAR Financial Statements are presented in Euro, the Group's functional currency. Amounts are expressed in Euro unless otherwise specified. Rounding is carried out at an individual accounting account level and therefore totalised. It should also be noted that any differences in some tables are due to rounding values expressed in thousands of Euro.

The Consolidated Consolidated Half-YEAR Financial Statements consist of the following and these explanatory notes:

A) Statement of the consolidated balance sheet and financial position: the consolidated balance sheet and financial position is disclosed by presenting current and non-current assets and liabilities separately from current and non-current liabilities, with a description in the notes, for each item of assets and liabilities, of the amounts that are expected to be settled or recovered within or after 12 months from the date of reference of the Consolidated Consolidated Half-YEAR Financial Statements.
B) Consolidated income statement: the classification of costs in the consolidated income statement is based on their function, showing the intermediate results relating to the gross operating result, the net operating result and the result before taxes.
C) Consolidated statement of comprehensive income: this statement includes the profit/(loss) for the period and the expenses and income recognised directly in shareholders' equity for transactions other than those carried out with shareholders.
D) Consolidated cash flow statement: the consolidated cash flow statement shows cash flows from operating, investing and financing activities. The flows of the operating activity are represented by applying the indirect method, through which the result is adjusted by the effects of non-cash transactions, by any deferral or allocation of previous or future operating collections or payments and by revenue elements connected with the financial flows deriving from the investment or financial activity.
E) Statement of changes in consolidated shareholders' equity: this statement includes, in addition to the result of the consolidated statement of comprehensive income, also the transactions that took place

directly with the shareholders who acted in this capacity and the details of each individual component. Where applicable, the table also includes the effects, for each item of shareholders' equity, deriving from changes in accounting standards.

F) Explanatory Notes to the Consolidated Financial Statements.

The Consolidated Consolidated Half-YEAR Financial Statements are presented in comparative form.

As mentioned in the Introduction to these Explanatory Notes, it should be noted that the consolidated income statement figures at 30 June 2019 are not comparable with the corresponding period of 30 June 2018.

These are the first financial statements in which the Group applies IFRS 16; the changes in the significant accounting standards are described in note 2.5.1.

These Consolidated Consolidated Half-YEAR Financial Statements were authorised for publication by the Board of Directors on 12 September 2019.

2.3 Consolidation principles and scope of consolidation

Consolidation criteria

The consolidated financial statements include the financial statements or accounting statements of the subsidiary companies included in the scope of consolidation, drawn up at 30 June each year. Control of an investee entity exists when the investor is exposed to, or is entitled to, the variable returns of the investee entity and has the possibility of influencing those returns through the exercise of power over the entity. An investor has power over an investee entity when it holds valid rights that give it the current ability to direct the relevant activities, i.e. those that significantly affect the performance of the investee entity.

The results of subsidiary companies acquired, including through mergers, or sold during the year are included in the consolidated income statement from the effective date of acquisition until the effective date of disposal.

When necessary, adjustments were made to the financial statements of subsidiary companies to align the accounting policies used with those adopted by the Group and in compliance with IFRS.

All significant transactions between Group companies and the related balances are eliminated on consolidation.

The minority interest in the net assets of consolidated subsidiary companies is identified separately from the Group's shareholders' equity. This interest is determined on the basis of the percentage held in the fair values of the assets and liabilities recorded at the date of the original acquisition and in the changes in shareholders' equity after that date. Subsequently, the losses attributable to minority shareholders in excess of their shareholders' equity are allocated to the Group's shareholders' equity, with the exception of cases in which minority shareholders have a binding obligation and are able to provide additional investments to cover losses.

Business combinations

The acquisition of subsidiary companies is accounted for using the acquisition method. The cost of the acquisition is determined by the sum of the current values at the date of obtaining control of the assets considered, the liabilities incurred or assumed and the financial instruments issued by the Group in exchange for control of the acquired company.

The goodwill deriving from the acquisition is only determined in the acquisition phase, posted as assets and represented by the additional value of the acquisition cost when compared with the Group portion of the current values of the identifiable assets, liabilities and potential liabilities recorded.

The minority interest in the acquired company is initially valued at the share of the current values of the assets, liabilities and contingent liabilities recorded.

The acquisition of subsidiary companies is accounted for using the acquisition method. The identifiable assets, liabilities and contingent liabilities of the acquired company that meet the conditions for recognition in accordance with IFRS 3 are recognised at their fair value at the acquisition date, with the exception of noncurrent assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5, which are recognised and measured at fair values less costs to sell.

Goodwill arising from the acquisition of control of an equity investment or business unit represents the excess of the acquisition cost (defined as the sum of the consideration transferred in the business combination), increased by the fair value of any previously held equity investment in the acquired company, over the fair value of the identifiable assets, liabilities and contingent liabilities of the acquired entity at the acquisition date.

In the case of purchase of non-total controlling interests, goodwill can be determined at the acquisition date with respect to the percentage of control acquired and by measuring at fair value the minority interest in shareholders' equity (full goodwill).

The choice of the valuation method can be made from time to time for each transaction.

For the purposes of determining goodwill, the consideration transferred in a business combination is calculated as the sum of the fair value of the assets transferred and liabilities assumed by the Group at the acquisition date and the equity instruments issued in exchange for control of the acquired entity, also including the fair value of any consideration subject to the conditions set out in the acquisition contract.

Any adjustments to goodwill may be recognised in the measurement period (which may not exceed one year from the acquisition date) as a result of subsequent changes in the fair value of contingent consideration or the determination of the current value of assets and liabilities acquired, if only provisionally recognised at the acquisition date and if such changes are determined as adjustments on the basis of more information about facts and circumstances existing at the date of the combination. In the event of disposal of shares in subsidiary companies, the residual amount of goodwill attributable to them is included in the determination of the capital gain or loss on disposal.

In 2019, the Parent Company completed a Business Combination transaction that involved the acquisition of 60% of Pegaso s.r.l., which in turn controls 100% of Systema s.r.l., a company active in the market for mobile phone accessories in the Telco channel.

The initial accounting of the amounts recognised in the financial statements, following the business combination on the assets, liabilities or elements of the consideration, was been definitively included.

Scope of consolidation

The Consolidated Consolidated Half-YEAR Financial Statements at 30 June 2019 include the balance sheet and income statement figures of Cellularline S.p.A. (Parent Company) and operating companies in which the Parent Company holds, directly or indirectly, more than 50% of the share capital, or has control thereof in accordance with the criteria defined by IFRS 10.

Company	Headquarter	Currency	Share Capital	ownership %
				Direct	Indirect
Cellularline S.p.A.	Italy (Reggio Emilia)	Euro units	21,343,189	-	-
Cellular Spain S.L.U.	Spain (Madrid)	Euro units	3,006	100%	-
Cellular Immobiliare Helvetica S.A.	Switzerland (Lugano)	CHF units	100,000	100%	-
Cellular Inmobiliaria S.L.U.	Spain (Madrid)	Euro units	3,010	100%	-
Pegaso s.r.l.	Italy (Reggio Emilia)	Euro units	70,000	60%	-
Systema s.r.l.	Italy (Reggio Emilia)	Euro units	100,000	-	60%

The method used for consolidation is that of full consolidation for the following companies:

The associated company Cellular Swiss S.A. is instead consolidated using the equity method, as shown in the table below:

Company	Headquarter	Currency	Share Capital	ownership %
				Direct	Indirect
Cellular Swiss S.A.	Switzerland (Aigle)	CHF units	100,000	50%	-

2.4 Use of estimates and evaluations for the preparation of the Consolidated Consolidated Half-YEAR Financial Statements

When preparing the Consolidated Consolidated Half-YEAR Financial Statements, Management had to formulate valuations, estimates and assumptions that influence the application of accounting standards and the amounts of assets, liabilities, costs and revenues recognised in the financial statements. However, it should be noted that, since these are estimates, the results obtained will not necessarily be the same as those represented here.

The main subjective assessments made by management in applying the Group's accounting standards and the main sources of uncertainty in the estimates were the same as those applied for the preparation of the consolidated financial statements for the year ended 31 December 2018, with the exception of the new assessments relating to the application of IFRS 16, described in note 2.5.

Fair value measurement

When measuring the fair value of an asset or liability, the Group makes use of observable market data as far as possible.

The fair values are divided into various hierarchical levels based on the input data used in the valuation techniques, as illustrated below:

Level 1 are (unadjusted) prices quoted in active markets for identical assets or liabilities that the Group can access at the measurement date;
Level 2 are variables other than the quoted prices included in Level 1 that can be observed directly or indirectly for assets or liabilities;
Level 3 are non-observable variables for assets or liabilities.

If the input data used to measure the fair value of an asset or liability can be classified in the different levels of the fair value hierarchy, the entire measurement is included in the same hierarchy as the lowest level of input that is significant for the entire measurement.

2.5 Relevant Accounting Standards

Transactions in foreign currencies are translated into the functional currency of each entity of the Group at the exchange rate in force at the date of the transaction.

Monetary items in foreign currency at the closing date of the financial year are converted into the functional currency using the exchange rate at that date. Non-monetary items that are measured at fair value in a foreign currency are translated into the functional currency using the exchange rates in force on the date on which the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are converted using the exchange rate in force on the same date of the operation. Exchange differences arising on translation are generally recognised in profit or loss for the period under financial expense.

The exchange rates used to translate the financial statements of Immobiliare Helvetica at 30 June 2019 into Euro were as follows:

Currency	2019 average	End of period
		at 30 June 2019
CHF/ Euro Exchange rate	1.13	1.11

IFRS 3

On 3 April 2019 Cellularline S.p.A. acquired control - through the purchase of 60% of Pegaso s.r.l - of Systema s.r.l. (100% owned by Pegaso itself), a company engaged in the market for mobile phone accessories in the Telco channel. The acquisition involved a total outlay of Euro 5,200 thousand between the price paid and the assumption of debts for Euro 2,700 thousand. With reference to this acquisition, the Group will identify the fair value of the assets acquired, liabilities and contingent liabilities assumed in accordance with IFRS 3.

As required by IFRS 3, the difference between the price paid and the provisional fair value (corresponding to the book value) of the net assets acquired was preliminarily attributed for Euro 2,800 thousand with starter.

From the date of acquisition, the acquired company contributed Euro 3,500 thousand to the consolidated net turnover.

The provisional fair value (corresponding to the book value) of the assets and liabilities at the acquisition date is indicated below:

(In thousands of Euro)	03 April 2019
Property, plant and equipment	47
Intangible assets	14
Financial assets	2
Advance tax assets	680
Inventories	705
Trade receivables	4,172
Cash and cash equivalents	1,905
Total assets acquired	7,525
Deferred tax liabilities	(14)
Contingent liabilities	(509)
Trade payables and other payables	(4,592)
Total liabilities acquired	5,115
Total Shareholders' Equity acquired	2,410
Goodwill	2,770
Price recognised	5,180

Goodwill

It should be noted that, at the time of the acquisition of Systema s.r.l., Cellularline adopted the option, provided for by IFRS 3, of making a provisional allocation of the cost of the business combinations to the fair value of the assets acquired, the liabilities and potential liabilities assumed. If new information obtained within one year from the acquisition date relating to facts and circumstances existing at the acquisition date leads to adjustments to the amounts disclosed or to any further provisions existing at the acquisition date, the accounting for the acquisition will be revised. The reference accounting standard for business combinations is IFRS 3; it requires that all business combinations be accounted for through the application of the Acquisition Method.

Goodwill arising from the acquisition was recognised as shown in the table below:

(In thousands of Euro)	31 March 2019
Total consideration transferred	5,180
Fair value of net identifiable assets	(2,410)
Goodwill	2,770

2.5.1 Changes in accounting standards

With the exception of the matters described below, these Consolidated Half-YEAR Consolidated Financial Statements have been prepared using the same accounting standards as those applied in the last annual financial statements.

The changes in accounting standards will also have an impact on the Group's consolidated financial statements for the year ending 31 December 2019.

The Group adopted IFRS 16 (Leasing) as from 1 January 2019. IFRIC 23, IAS 28 and IAS 19, which came into force on 1 January 2019, did not have a significant impact on the Group's consolidated financial statements.

IFRS 16 introduces a single model for accounting for leases in the financial statements of lessees whereby the Group, as lessee, has recognised an asset that represents the right to use the underlying asset and a liability that reflects the obligation to pay the lease payments. The accounting methods for the lessor, on the other hand, remain similar to those provided for by the previously applicable standard.

The Group has used the option to adopt IFRS 16 with the modified retrospective method, which provides for the possibility of recognising the right of use at 1 January 2019 for an amount equal to the financial liability remaining at that date, without recalculating the figures for the previous year.

Consequently, the balances of the Consolidated consolidated half-YEAR financial statements at 30 June 2019 are not comparable with the values of the half-year ended 30 June 2018 and the financial year ended 31 December 2018.

The details of the changes to this accounting standards are specified below.

Definition of leasing

Previously, the Group determined at the beginning of the contract whether the contract was, or contained, a lease in accordance with IFRIC 4 "Determining whether an arrangement contains a lease". In accordance with IFRS 16, the Group assesses whether the contract is a lease or contains it on the basis of the new definition of a lease. Under IFRS 16, the contract is, or contains, a lease if, in exchange for consideration, it transfers the right to control the use of an identified asset for a period of time.

At the date of initial application of IFRS 16, the Group decided to adopt a practical measure that allows it not to re-examine which transactions constitute a lease. IFRS 16 was applied only to contracts that had previously been identified as leases. Contracts that were not identified as leases by applying IAS 17 and IFRIC 4 were not reassessed to determine whether they were leases. Therefore, the definition of a lease in IFRS 16 has been applied only to contracts entered into or amended on or after 1 January 2019.

Lessee accounting model

The Group leases assets such as buildings and motor vehicles. As a lessee, the Group previously classified leases as operating or financial, assessing whether the lease transferred substantially all the risks and rewards of ownership. In accordance with IFRS 16, the Group recognises in its balance sheet and financial position the assets for the right of use and the liabilities for the lease for the leases.

However, the Group has decided not to recognise assets for the right of use and liabilities relating to the leasing of low value assets (less than USD 5,000). Therefore, the Group recognises the payments due for the leases relating to these leases as a cost on a straight-line basis over the lease term.

The Group presents assets for the right to use that do not meet the definition of investment property under the item "Property, plant and equipment", i.e. the same item used to present the underlying assets of the same nature that it holds. Assets for the right of use that meet the definition of investment property are presented under the same heading. The book values of the assets for the right of use are listed below.

Effects of applying IFRS 16

(In thousands of Euro)	Properties	Cars	Total
Balance at 1 January 2019	788	1,249	2,038
Balance at 30 June 2019	833	1,284	2,117

The Group presents the leasing liabilities in the item 'Other financial liabilities' in the summary balance sheet and financial position.

At the effective date of the lease, the Group recognises the asset for the right to use and the liability for the lease. The asset for the right of use is initially valued at cost, then at cost net of accumulated depreciation and impairment losses, and adjusted to reflect the revaluation of the lease liability. The asset for the right of use that meets the definition of investment property is shown in the item of the same name and is initially measured at cost and subsequently at fair value, in accordance with the Group's accounting standards.

The Group values the lease liability at the present value of the payments due for leases not paid at the effective date, discounting them using the interest rate implicit in the lease. Where it is not possible to determine this rate easily, the Group uses the marginal lending rate. Generally, the Group uses the marginal lending rate as the discount rate.

The lease liability is subsequently increased by the interest accrued on this liability and decreased by the payments due for the lease made and is revalued in the event of a change in the future payments due for the lease deriving from a change in the index or rate, in the event of a change in the amount that the Group expects to pay as a guarantee on the residual value or when the Group changes its valuation with reference to the exercise or otherwise of a purchase, extension or cancellation option.

The Group has estimated the lease term of certain contracts in which it acts as a lessee and which provide for renewal options. The Group's assessment of whether or not there is a reasonable certainty of exercising the option influences the estimate of the lease term, significantly impacting the amount of the lease liabilities and assets for the right of use recognised.

The Group has used the following practical methods to apply IFRS 16 to leases previously classified as operating leases under IAS 17:

it applied the exemption from the recognition of assets for the right of use and lease liabilities to leases with a term of less than 12 months;
it excluded initial direct costs from the valuation of the asset for the right of use at the date of initial application;
it relied on the experience gained in determining the duration of the lease containing options for extending or terminating the lease.

Effects of first applying IFRS 16

In the initial application of IFRS 16, the Group recognised additional assets for the right of use, including investment property and other lease liabilities.

	1 January 2019
(In thousands of Euro)
Assets for the right of use included in the item "Right of use"	2,038
Leasing liabilities	(2,038)

When valuing the liabilities of leases classified as operating leases, the Group discounted the payments due for the lease using the marginal loan rate at 1 January 2019. The weighted average rate applied is 4.5% per annum. Following the first application of IFRS 16 to leases previously classified as operating leases, the Group recognised assets for the right of use and leasing liabilities of Euro 2,117 thousand and Euro 2,136 thousand at 30 June 2019.

In addition, in relation to leases recognised in accordance with IFRS 16, the Group has recognised depreciation and interest in place of operating lease costs. During the six-month period ended on 30 June 2019, the Group recorded amortisation and interest of Euro 366 thousand and Euro 47 thousand respectively.

2.6 Adoption of new accounting standards

Below are the new accounting standards or amendments to the standards, applicable for financial years beginning after 1 January 2019, whose early application is permitted. The Group has decided not to adopt them in advance for the preparation of these financial statements.

Amendments to References to Conceptual Framework in IFRS Standards:

— Definition of a Business (Amendments to IFRS 3): in October 2018 the document was published with the changes made by the International Accounting Standards Board (Board) to IFRS 3 (Business combinations). The Board developed these changes after taking into account the feedback received in its Post-implementation Review (PIR) of IFRS 3.

The amendments clarify the definition of an enterprise, with the objective of helping entities determine whether a transaction should be accounted for as a business combination or as an acquisition of assets. The changes are intended to:

a. clarify that, in order to be considered an enterprise, an acquired set of assets and goods must include, as a minimum, a substantial input and process that together contribute significantly to the ability to create output;
b. eliminate the assessment of the ability of market participants to replace any missing inputs or processes and to continue to produce outputs;
c. add guidelines and illustrative examples to help entities assess whether a substantial process has been acquired;
d. limit the definitions of enterprise and production, focusing on goods and services provided to customers and removing the reference to the ability to reduce costs;

e. add an optional concentration test that allows a simplified assessment of whether a set of assets and properties acquired is not a business.

Entities shall apply the amendments to transactions for which the acquisition date is after the beginning of the first annual period beginning on or after 1 January 2020. Earlier application is allowed.

— Definition of Material (Amendments to IAS 1 and IAS 8): published in October 2018, amended paragraph 7 of IAS 1 and paragraph 5 of IAS 8, and deleted paragraph 6 of IAS 8. An entity shall apply those amendments prospectively for annual periods beginning on or after 1 January 2020. Earlier application is allowed. If an entity applies those amendments for an earlier period it shall disclose such fact.

The Board is releasing two versions of its amendments to the definition of material in IAS 8 to allow early adoption of that amendment regardless of the adoption of amendments to references to the conceptual framework in IFRSs. References to the Conceptual Framework for Financial Reporting (Conceptual Framework) in the Basis for Conclusions refer to the version of the Conceptual Framework published in 2018, unless otherwise stated. However, the conclusions reached would be the same if the 2010 version of the conceptual framework were applied.

Information is material if by omitting, misrepresenting or concealing, it can reasonably be expected to influence the decisions that major users of financial statements for general purposes make on the basis of those financial statements, which provide financial information about a specific reporting entity.

Relevance depends on the nature or extent of the information, or both. An entity assesses whether information, individually or in combination with other information, is relevant in the context of the financial statements as a whole.

Information is redacted if it is disclosed in a manner that would have a similar effect on primary users of financial statements to omit or misrepresent such information. The following are examples of circumstances that may lead to relevant information being redacted:

a. information about an item, transaction or other material event is disclosed in the financial statements, but the language used is vague or unclear;
b. information about an item, transaction or other material event is scattered across the financial statements;
c. items, transactions or other dissimilar events are inappropriately aggregated;
d. items, transactions or other similar events are inappropriately aggregated;
e. the financial statements are less intelligible due to the concealment of material information by intangible information, to the extent that a primary user is unable to determine which information is material.
IFRS 17 Insurance Contracts: establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It requires the application of similar principles to reinsurance contracts held and investment contracts with discretionary participation elements issued. The objective is to ensure that entities provide material information so as to faithfully represent such

contracts. This information provides a basis for the users of financial statements to assess the effect that contracts within the scope of IFRS 17 have on an entity's balance sheet, profit and loss and cash flows.

IFRS 17 is applicable from the financial statements starting on or after 1 January 2021. Earlier application is allowed.

On the basis of the circumstances and cases in which the new documents are applied and taking into account the current accounting standards adopted by the Group, it is considered that there will be no significant impact from the first application of these documents.

2.7 Seasonality

The market the Group operates in is characterised by seasonal phenomena. In particular, sales are higher in the final part of each year, with a peak in demand near and during the Christmas period; also the costs of purchasing goods from suppliers are mainly concentrated in that period. On the other hand, operating costs show a more linear trend given the presence of a component of fixed costs (personnel, rents and general expenses) which have a uniform distribution over the year. As a result, operating margins are also affected by this seasonal nature.

The trend in revenues and the trend in costs described above have an impact on the trend in net commercial working capital and net financial indebtedness, which is structurally characterised by the generation of cash in the final part of the year.

Therefore, the analysis of interim economic, equity and financial results and indicators cannot be considered fully representative, and it would therefore be wrong to consider the indicators for the period as a proportional share of the entire year.

3. Information on operating sectors

The operating sector identified by the Group, which includes all the services and products provided to customers, is unique and coincides with the entire Group. The Group's vision of the company as a single business means that it has identified a single Strategic Business Unit ("SBU").

The Group's activities develop through a single operating segment and can be divided into three main product lines:

Red product line (accessories for multimedia devices);
Black product line (accessories for the world of motorcycles and bicycles);
Blue product line (third party products marketed under concession for distribution).

4. Explanatory notes to the individual items of the Consolidated Consolidated Half YEAR Financial Statements

4.1 Intangible assets

The balance of the item Intangible assets, broken down by category at 30 June 2019 and 31 December 2018, is

shown below:

(In thousands of Euro)	Situation at 30 June 2019			Situation at 31 December 2018
	Historical cost	(Accumulated amortisation)	Net book value	Historical cost	(Accumulated amortisation)	Net book value
Development costs Industrial patents and intellectual	1,472	(927)	545	1,044	(503)	541
property rights Concessions, licenses, trademarks and	1,533	(747)	786	957	(404)	545
similar rights	20,386	(1,253)	19,133	20,245	(677)	19,568
Customer relationship	59,707	(4,976)	54,731	59,707	(2,679)	57,028
Work in progress and advances	1,072	-	1,072	809	-	809
Other fixed assets	386	(287)	99	366	(251)	123
Total Intangible assets	84,556	(8,190)	76,366	83,128	(4,514)	78,614

The change in the item Intangible assets, broken down for the period from 31 December 2018 to 30 June 2019 is shown below:

(In thousands of Euro)
Balance at 31 December 2018	78,614
Increases	1,555
Acquisitions of business units	13
(Decreases)	(140)
(Depreciation, amortisation and write-downs) / revaluations	(3,676)
Balance at 30 June 2019	76,366

With reference to the six-month period ended 30 June 2019, it should be noted that the Group has made investments for Euro 1,555 thousand.

In particular, investments are mainly attributable to:

development costs of Euro 426 thousand; this item includes the costs incurred for investments in specific product innovation projects. These are considered to be multi-year costs, as they relate to projects under construction, whose products are clearly identified, have a market from the marketing of which sufficient profit margins are provided to cover also the amortisation of capitalised costs, which normally takes place over 2 years.
Industrial patents and intellectual property rights, equal to Euro 318 thousand: this item mainly includes software, i.e. the costs incurred for the implementation and development of the main management programme and other specific applications, which are normally amortised over 3 years. The investments are mainly related to innovations in SAP management, new applications used by sales staff, the ecommerce project for the development of online sales and further innovations/IT projects, aimed at increasingly effective and efficient information tools to support the organisational structure of the Group.

Work in progress and advances: this item includes increases for about Euro 456 thousand relating to IT projects that will come into operation in 2019, including the "SAP Hybris" project, which is considered to be strategic for the development of B2B and B2C and will support business growth in different channels, including Digital activities, also for various geographic areas.

4.2 Goodwill

The details of the item Goodwill at 30 June 2019 and 31 December 2018 is shown below:

(In thousands of Euro)		Situation at
	30 June 2019	31 December 2018
Goodwill	96,627	93,857
Total Goodwill	96,627	93,857

The change in the item Goodwill, broken down for the period from 31 December 2018 to 30 June 2019 is shown below:

(In thousands of Euro)	Goodwill
Balance at 31 December 2018	93,857
Acquisitions	2,770
Increases	-
(Write-downs)	-
Balance at 30 June 2019	96,627

The value of goodwill at 30 June 2019, equal to Euro 96,627 thousand, increased compared to the year ended 31 December 2019 by Euro 2,770 thousand. The increase refers to the acquisition of Systema s.r.l.; Cellularline adopted the option, provided for by IFRS 3, of making a provisional allocation of the cost of the business combinations to the fair value of the assets acquired, the liabilities and potential liabilities assumed. If new information obtained within one year from the acquisition date relating to facts and circumstances existing at the acquisition date leads to adjustments to the amounts disclosed or to any further provisions existing at the acquisition date, the accounting for the acquisition will be revised.

4.2.1 Impairment test

As part of the analysis of the internal and external indicators required by IAS 36 in order to detect the potential presence of impairment on non-current assets, it emerged that the market capitalisation at 30 June 2019 was lower than the consolidated shareholders' equity:

Description	30/06/2019	06/09/2019
No. of shares	21,868,189	21,868,189
Stock exchange price Euro (In Euro)	7.6	7.2
Company Capitalisation (In thousands of Euro)	166,198	157,451
Consolidated Shareholders' Equity (In thousands of Euro)	188,575	188,575
Difference (In thousands of Euro)	(22,445)	(31,124)

In fact, the determination of any losses/restoration of the value of fixed assets is generally carried out in full when preparing the annual financial statements; interim valuations are carried out in the presence of events (socalled "trigger events") that may have affected the main indicators and/or assumptions used for the preparation of the so-called "impairment tests" and which could have led to significant changes in value as a result.

Following the identification of the trigger event relating to the lower market capitalisation compared to the consolidated shareholders' equity, a sensitivity analysis was carried out: the business dynamics recorded in the period and the updates of the forecasts on future trends are substantially consistent with the assumptions made for the verification of the recoverability of the value of goodwill made in the preparation of the consolidated financial statements of the Cellularline Group at 31 December 2018.

Therefore, no indicators of possible impairment losses have been identified and, therefore, no specific impairment tests have been carried out on goodwill following the one approved by the Board of Directors of Cellularline on 11 March 2019.

4.3 Property, plant and equipment

The balance of the item Property, plant and equipment, broken down by category at 30 June 2019 and 31 December 2018, is shown below:

(In thousands of Euro)	Situation at 30 June 2019		Situation at 31 December 2018
	Historical cost	(Accumulated depreciation)	Net book value	Historical cost	(Accumulated depreciation)	Net book value
Land and Buildings	5,522	(186)	5,336	5,373	(96)	5,277
Plant and machinery	763	(296)	467	646	(157)	490
Industrial and commercial equipment Work in progress and advances	1,844 47	(426) -	1,418 47	1,619 89	(246) -	1,373 89
Total Property, plant and equipment	8,176	(908)	7,268	7,728	(499)	7,229

The change in the item Property, plant and equipment, broken down for the period from 31 December 2018 to 30 June 2019 is shown below:

(In thousands of Euro)
Balance at 31 December 2018	7,229
Increases	272
Acquisitions of business units	40
(Decreases)	(15)
Reclassifications	140
(Depreciation, amortisation and write-downs) / revaluations	(409)
(Decrease in Accumulated depreciation)	11
Balance at 30 June 2019	7,268

With reference to the six-month period ended 30 June 2019, the Group has made investments, net of decreases in the category "Assets under construction", for Euro 272 thousand, mainly related to industrial and commercial equipment.

4.4 Right of use

This item, amounting to Euro 2,117 thousand (Euro 0 at 31 December 2018), refers exclusively to the recording of the "right of use" following the application of the accounting standard IFRS 16 - Lease Accounting. For further details, reference should be made to section 5 "Changes in accounting principles".

4.5 Deferred tax assets and deferred tax liabilities

The change in the item Deferred tax assets and in the item Deferred tax liabilities broken down for the period from 31 December 2018 to 30 June 2019 and for the period is shown below.

Deferred tax assets

(In thousands of Euro)
Balance at 31 December 2018	963
Provisions/(Releases) to	(79)
Income Statement
Provisions/(Releases) to
Statement of Comprehensive	28
Income
Balance at 30 June 2019	912

The balance at 30 June 2019, amounting to Euro 912 thousand, is mainly composed of deferred tax assets originating mainly from provisions for taxes. The following aspects have been taken into account in the calculation of deferred tax assets:

the tax regulations of the country in which the Group operates and their impact on temporary differences, and any tax benefits deriving from the use of tax losses carried forward, considering the possible recovery of the same over a period of three years;
the forecast Group profits in the medium and long term.

On this basis, the Group expects to generate future taxable profits and, therefore, to be able to recover the recorded deferred tax assets with reasonable certainty.

Deferred tax liabilities

(In thousands of Euro)
Balance at 31 December 2018	21,337
Provisions/(Releases) to Income Statement	(902)
Provisions/(Releases) to Statement of Comprehensive Income	34
Balance at 30 June 2019	20,469

Deferred tax liabilities are mainly due to deferred taxation arising from the purchase price allocation of identified assets (customer relationships and brands).

It is estimated that this debt is attributable to differences that will be absorbed in the medium and long term.

4.6 Financial receivables

This item, amounting to Euro 525 thousand (Euro 0 at 31 December 2018), refers exclusively to the financial receivable from the associated company Cellular Swiss S.A. (consolidated using the equity method). On 12 June 2019, at the same time as the approval of the 2018 financial statements of the associated company, part of the Parent Company's receivable from that company was subordinated (a total net receivable of Euro 6,211 thousand at 31 December 2018), for an amount of CHF 600,000 (corresponding to approximately Euro 540,000 at the CHF/EUR exchange rate at 30 June 2019). This value was recorded net of the related effect of the amortised cost.

4.7 Inventories

Inventories are made up as follows:

(In thousands of Euro)	Situation at
	30 June 2019	31 December 2018
Finished products and goods for resale	26,128	21,020
Advances	2,345	894
Gross Warehouse	28,473	21,914
(Provision for inventory obsolescence)	(950)	(1,300)
Total Inventories	27,523	20,614

The value of gross inventories includes finished products at the warehouse of the Parent Company and the subsidiaries Systema and Cellular Spain, as well as goods in transit for which the Group has already acquired the title of ownership for Euro 4,141 thousand (Euro 2,086 thousand at 31 December 2018). Advances include prepayments for the purchase of finished products.

The value of inventories is adjusted by the provisions for inventory write-downs, which includes the prudential write-down of goods subject to possible obsolescence.

The increase in gross inventory, equal to approximately Euro 6,800 thousand compared to 31 December 2018, is mainly due to the following factors:

seasonality of the Group's business for the purchase of the inventory necessary to face the higher sales in the second half of the year, including an increase of more than Euro 2,000 thousand in goods in transit compared to 31 December 2018;
change in the scope of consolidation resulting from the acquisition of Systema, with an effect on inventories of approximately Euro 1,400 thousand;
higher advances of approximately Euro 1,400 thousand deriving from the advance payment of some products which are estimated to experience an increase in the purchase cost in the following months; this effect will be partially reabsorbed by the end of the financial year.

The change in the item provisions for inventory write-downs, broken down for the period from 31 December 2018 to 30 June 2019 is shown below:

(In thousands of Euro)	Provision for inventory obsolescence
Balance at 31 December 2018	(1,300)
(Provision)	(950)
Releases to Income Statement	-
Uses	1,300
Balance at 30 June 2019	(950)

During the period, the Group, following an analysis of slow-moving products, set aside Euro 950 thousand for problems (typical of the sector) related to the obsolescence / slow transfer of inventories, in order to align their value to the estimated realisable value.

The use of the provisions for Euro 1,300 refers to partial scrapping during 2019, also in order to optimise the logistic spaces.

4.8 Trade receivables

The details of the item Trade receivables at 30 June 2019 and 31 December 2018 are shown below:

(In thousands of Euro)	Situation at
	30 June 2019	31 December 2018
Trade receivables from third parties	55,556	63,114
Gross trade receivables	55,556	63,114
(Provision for bad debts)	(3,788)	(3,693)
Total Trade receivables	51,768	59,421

The value of receivables decreased by Euro 7,653 thousand compared to the previous financial year; the decrease is mainly due to a seasonal phenomenon of the business linked to the increase in sales in the last quarter of the financial year.

The change in the Provision for bad debts at 30 June 2019 is shown below:

(In thousands of Euro)	Provision for bad debts
Balance at 31 December 2018	(3,693)
(Provision)	(95)
Releases to Income Statement	-
Uses	-
Balance at 30 June 2019	(3,788)

Write-downs of receivables refer mainly to disputed receivables or to customers subject to bankruptcy proceedings. The uses are for credit situations for which the elements of certainty and precision, or the presence of bankruptcy procedures in place, determine the removal of the position itself. As shown in the tables above, the provision for bad debts amounted to Euro 3,788 thousand at 30 June 2019 and to Euro 3,693 thousand at 31 December 2018.

Credit risk is the exposure to the risk of potential losses arising from the failure of the counterparty to meet its obligations. The Group has credit control processes in place that include customer reliability analysis and exposure control by means of reports with a breakdown of due dates and average collection times.

The change in the provision, following the allocation set aside in the period, is the result of an analytical assessment of non-performing loans and loans that have been proven to be of uncertain collectability as well as a general assessment based on the historicity of the loan impairment.

The carrying amount of trade receivables is deemed to approximate their fair value.

4.9 Current tax assets

The details of the item Current tax assets at 30 June 2019 and 31 December 2018 are shown below:

Current tax assets

(In thousands of Euro)	Situation at
	30 June 2019	31 December 2018
Tax receivable of previous years (Patent Box)	4,762	4,762
Receivables for tax payments on account	1,552	1,046
VAT credit	452	-
Credit for withholding taxes on interest income	150	133
Other receivables	149	26
Total Current tax assets	7,065	5,967

Current tax assets mainly include the Parent Company's tax credit for direct tax credits from previous years. In particular, the item is affected by the tax credit accrued following the application of the Framework Agreement with the Revenue Office for the purposes of the so-called Patent Box signed in March 2018. This credit was formed following the recalculation of the direct IRES and IRAP taxes for the three financial years from 2015 to 2017 and will be used to offset the payment of IRES and IRAP advances.

4.10 Other assets

The details of the item Other current assets at 30 June 2019 and 31 December 2018 are shown below:

(In thousands of Euro)		Situation at
	30 June 2019	31 December 2018
Prepaid expenses	2,734	2,943
Receivables from others	546	457
Insurance policies	245	345
Trade fair events	33	185
Total Other current assets	3,558	3,930

The item Other current assets mainly includes prepaid expenses for the advance payment of contributions to customers following the execution of commercial contracts that will produce economic benefits also in future periods.

4.11 Cash and cash equivalents

The details of the item Cash and cash equivalents at 30 June 2019 and 31 December 2018 are shown below:

(In thousands of Euro)	Situation at
	30 June 2019	31 December 2018
Bank accounts	25,830	41,978
Cash on hand	9	11
Total Cash and cash equivalents	25,839	41,989

Cash and cash equivalents amounted to Euro 25,839 thousand at 30 June 2019 (Euro 41,989 thousand at 31 December 2018). The item consists of cash on hand, securities and sight or short-term deposits with banks that are actually available and readily usable. The decrease of Euro 16,150 thousand is mainly due to non-recurring effects, including:

distribution of dividends for Euro 6,088 thousand on 22 May 2019;
payment of approximately Euro 2,500 thousand for the purchase of 60% of the company Pegaso s.r.l. (on 3 April 2019), parent company of Systema s.r.l.;
higher advances to suppliers of approximately Euro 1,400 thousand deriving from the advance payment of some products which are estimated to experience an increase in the purchase cost in the following months; this effect will be partially reabsorbed by the end of the financial year;
payment of approximately Euro 1,400 thousand for the purchase of treasury shares in execution of the buy-back plan approved by the Shareholders' Meeting of 21 November 2018;
payment in January 2019 of the entire VAT payable for the month of December, for approximately Euro 1,100 thousand, the advance payment in December 2018 not being required as this is the first year of actual operating business of the merging company Crescita S.p.A. (now Cellularline).

For further details regarding the dynamics that influenced cash and cash equivalents, reference should be made to the Cash Flow Statement.

4.12 Shareholders' equity

Shareholders' equity was Euro 188,574 thousand (Euro 194,375 thousand at 31 December 2018), a decrease during the year mainly due to the distribution of a dividend of Euro 6,088 thousand, as resolved by the Shareholders' Meeting on 16 April 2019.

Share capital

The share capital at 30 June 2019 amounts to Euro 21,343, divided into 21,673,189 ordinary shares and 195,000 special shares. There are also 6,130,954 warrants outstanding.

On 22 July 2019, Borsa Italiana S.p.A. commenced trading of the Parent Company's ordinary shares and warrants on the Mercato Telematico Azionario (MTA), with STAR status.

Other reserves

At 30 June 2019, other reserves amounted to Euro 156,166 thousand and were divided as follows:

Share premium reserve, which amounts to Euro 137,708 thousand;
Reserves for a net amount of Euro 32,199 thousand deriving mainly from the allocation of the Purchase Price Allocation;
Negative reserve for treasury shares in portfolio for Euro 13,740 thousand; at 30 June 2019 the Parent Company purchased 197,428 ordinary shares at an average price of Euro 7.31 for a total value of Euro 1,438,601.

Share-based payment arrangements

The Group has a stock option program in place (settlement with equity instruments) that allows executives with strategic responsibilities to purchase shares in the Company. The following table summarises the main conditions of the Stock Option programme:

Date of assignment	Maximum number of	Conditions for the accrual of the	Contractual duration of options
04 June 2018	instruments 915,000 (*)	right In proportion to the normal value	Three-YEAR

(*) of which assigned to managing directors and managers with strategic responsibilities up to 682,477.

The options will vest, with the corresponding right of the beneficiaries to the free allocation of the relevant shares, in proportion to the normal value, according to the scheme shown in the table below:

Normal Value	% Units accrued
<of Euro 14	0%
Euro 14	24%
Euro 15	38%
Euro 16	56%
Euro 17	78%
>= of Euro 18	100%

During the period ended 30 June 2019, there were no assets held for specific business purposes.

4.13 Payables to banks and other financial payables (current and non-current)

The details of the item Payables to banks and other current and non-current lenders at 30 June 2019 are shown below:

(In thousands of Euro)	Situation at
	30 June 2019	31 December 2018
Payables to banks and other lenders (current)	13,535	12,169
Payables to banks and other lenders (non-current)	44,478	51,667
Other current financial payables	4,244	2,698
Other non-current financial payables	3,215	-
Total financial liabilities	65,472	66,534

At 30 June 2019, payables to banks and other financial payables refer to the following

Euro 57,404 thousand (net of bank fees) for the bank loan started on 29 June 2017 (and subsequently amended on 28 May 2018 following the Business Combination transaction, which was a change of control event) by Cellular Italia (later merged into Cellularline) with Banca Popolare di Milano S.p.A., as agent bank and financing bank, and UBI Banca S.p.A. as financing bank. The maximum total principal amount of the loan was Euro 85 million, with the obligation to repay it every six months by means of instalments of Euro 6,667 thousand each, by the due date of 20 June 2022. The financing provides for a financial constraint (leverage ratio) that has always been respected. The interest on the loan in question is at a variable rate, calculated considering the Euribor plus a spread provided for in the contract (currently equal to 1.80%);
Euro 2,700 thousand for the payable for the financial liability deriving from the probable exercise of the put/call options relating to the acquisition of Systema;
Euro 2,624 thousand for the payable for the financial liability relating to warrants;
Euro 2,136 thousand to the payable for leasing deriving from applying IFRS 16;
Euro 608 thousand to bank debts deriving from the consolidation of Systema.

(In thousands of Euro) Origination Due date Original amount Interest rate Situation at 30 June 2019 Residual debt of which current portion of which noncurrent portion Banca Popolare di Milano 29/06/2017 20/06/2022 42,500 1.80% 29,167 6,667 22,500 UBI Banca S.p.A. 29/06/2017 20/06/2022 42,500 1.80% 29,167 6,667 22,500 Payables to banks and other lenders 85,000 58,333 13,333 45,000

Financial liabilities at 30 June 2019, gross of bank fees , are shown below:

Loans are valued at amortised cost in accordance with IFRS 9 and therefore their value, which amounted to Euro 57,404 thousand at 30 June 2019 (Euro 63,836 thousand at 31 December 2018), was reduced by ancillary charges on the loans.

Details of the financial liabilities are shown below based on the expiry dates:

(In thousands of Euro)	Situation at
	30 June 2019	31 December 2018
Within 1 year	18,126	14,867
From 1 to 5 years	47,287	51,667
Beyond 5 years	60	-
Total	65,472	66,534

The net financial indebtedness at 30 June 2019 is detailed below; it should be noted that the net financial indebtedness is presented in accordance with the provisions of Consob Communication no. 6064293 of 28 July 2006 and in compliance with the recommendations of ESMA/2013/319.

(In thousands of Euro)		Situation at	Changes
	30 June 2019	31 December 2018	Δ	%
(A) Cash	9	11	(2)	-18.2%
(B) Other cash and cash equivalents	25,830	41,978	(16,148)	-38.5%
(C) Securities held for trading	-	-	-	-
(D) Liquidity (A)+(B)+(C)	25,839	41,989	(16,150)	-38.5%
(E) Current financial receivables	60	56	4	7.1%
(F) Current bank payables	-	-	-	-
(G) Current portion of non-current debt	13,535	12,169	1,366	11.2%
(H) Other current financial payables	4,244	2,698	1,546	57.3%
(I) Current financial indebtedness (F)+(G)+(H)	17,779	14,867	2,912	19.6%
- of which guaranteed	-	-	-	-
- of which not guaranteed	17,779	14,867	2,912	19.6%
(J) Net current financial indebtedness (I)+(E)+(D)	(8,120)	(27,179)	19,059	-70.1%
(K) Non-current bank debts	44,478	51,667	(7,189)	-13.9%
(L) Bonds issued	-	-	-	-
(M) Other non-current financial payables	3,215	-	3,215	100%
(N) Non-current financial indebtedness (K)+(L)+(M)	47,693	51,667	(3,974)	-7.7%
- of which guaranteed	-	-	-	-
- of which not guaranteed	47,693	51,667	(3,974)	-7.7%
(O) Net financial indebtedness (J)+(N)	39,574	24,488	15,085	61.6%

4.14 Employee benefits

At 30 June 2019, this item, amounting to Euro 865 thousand (Euro 411 thousand at 31 December 2018) and derives from the actuarial valuations of the employee severance indemnity (TFR) of the Parent Company; and compared to 31 December 2018, it includes the effect of Systema s.r.l. for Euro 401 thousand; these valuations were carried out on the basis of the method of benefits accrued using the "Project Unit Credit" criterion as provided for by IAS 19.

The actuarial model is based on:

discount rate of 0.77%, which was derived from the Iboxx Corporate AA index with a duration of 10+;
annual inflation rate of 1.50%;

annual rate of increase in the employee severance indemnity of 2.625%, which is equal to 75% of inflation plus 1.5 percentage points.

In addition, sensitivity analyses were carried out for each actuarial hypothesis, considering the effects that would have occurred following changes in the actuarial hypotheses that were reasonably possible at the balance sheet date; the results of these analyses do not give rise to significant effects.

4.15 Provisions for risks and charges

The change in the item Provisions for risks and charges, broken down for the period from 31 December 2018 to 30 June 2019 is shown below:

(In thousands of Euro)	Provision to cover losses on equity investments	Provision for supplementary customer allowances	Other Provisions	Total
Balance at 31 December 2018	530	1,299	-	1,829
- of which current portion	530	-	-	530
- of which non-current portion	-	1,299	-	1,299
Acquisitions	-	287	40	327
Provisions	-	74	-	74
Uses/Releases	-	(91)	-	(171)
Balance at 30 June 2019	530	1,568	40	2,138
- of which current portion	530	-	40	570
- of which non-current portion	-	1,568	-	1,568

The provision to cover losses on equity investments is attributable to the losses of the associated company Cellular Swiss for the amount exceeding the write-down of the investment, in application of the equity consolidation method.

The Provision for supplementary customer allowances refers to the valuation of the supplementary customer allowance of the Parent Company and of Systema for the amount that will be paid to agents for the termination of the agency relationship for events not attributable to the agency. The actuarial valuation, consistent with IAS 37, was carried out by quantifying future payments through the projection of the indemnity accrued at the balance sheet date by the agents operating until the presumed (random) termination of the contractual relationship. For actuarial valuations, demographic and economic-financial assumptions were adopted; specifically, the discount rate was set with reference to the IBoxx Eurozone AA index in relation to the duration of the collective equal to 0.77%.

Other provisions, amounting to Euro 40 thousand, derive from the consolidation of Systema and related to commercial disputes.

4.16 Trade payables

The details of the item Trade payables at 30 June 2019 and 31 December 2018 are shown below:

(In thousands of Euro)		Situation at
	30 June 2019	31 December 2018
Trade payables from third parties	(15,660)	(16,968)
Trade payables from related parties	(359)	(488)
Total trade payables	(16,019)	(20,186)

At 30 June 2019 trade payables relate to commercial transactions within normal payment terms, all due within one year and are equal to Euro 16,019 thousand (Euro 20,186 thousand at 31 December 2018). The decrease in the period of Euro 4,168 thousand is mainly due to a seasonal effect of the business, which increases physiologically in the last quarter.

4.17 Other liabilities

The details of the item Other liabilities payables at 30 June 2019 and 31 December 2018 are shown below:

(In thousands of Euro)	Situation at
	30 June 2019	31 December 2018
Payables for Personnel	2,146	1,776
Payables to shareholders	1,769	2,113
Payables to social security institutions	718	802
Other payables	708	1,190
Tax payables	351	1,996
Total Other Liabilities	5,692	7,877

At 30 June 2019, other reserves amounted to Euro 5,692 thousand (Euro 7,877 thousand at 31 December 2018) and were mainly divided as follows:

Euro 2,146 thousand relating to employees for amounts to be paid and bonuses;
Euro 1,769 thousand for payables to shareholders refer to the residual tax benefit on prior periods deriving from the effects of the Patent-box agreement signed between Cellular Italia and the Inland Revenue. This amount represents the sum that, following the Framework Agreement, must still be paid to the Selling Shareholders, corresponding to the tax benefits, originating from the Patent-box, for the years prior to the merger. In July 2019, Euro 1,669 thousand was paid; the remaining part of Euro 100 thousand will probably be paid in December 2019, after the submission of the tax return for the 2018 financial year;
Euro 718 thousand to social security institutions for contributions to be paid.

Introduction on the comparability of the consolidated income statement

For a better understanding of the Group's business, reference should be made to the Interim Report on Operating Performance, where a pro-forma consolidated income statement at 30 June 2018 is presented as if the Business Combination had taken place on 1 January 2018.

4.18 Revenues

At 30 June 2019 revenues from sales amounted to Euro 55,288 thousand (Euro 12,819 thousand at 30 June 2018). The following table shows revenues, broken down by product line and geographical area for 2019.

As already mentioned, the Group's activities develop through a single operating segment and can be divided into three main product lines:

Red product line (accessories for multimedia devices);
Black product line (accessories for the world of motorcycles and bicycles);
Blue product line (third party products marketed under concession for distribution).

The following tables show revenues, broken down by product line and geographical area.

(In thousands of Euro)	Half year ending on					Change
	30 June 2019	% of revenues	30 June 2018	% of revenues	Value	%
Red - Italy	25,505	46.1%	5,549	43.3%	19,956	>100%
Red – International	21,678	39.2%	5,481	42.8%	16,197	>100%
Revenues from Sales - Red	47,183	85.3%	11,030	86.0%	36,153	>100%
Black – Italy	2,136	3.9%	544	4.2%	1,593	>100%
Black – International	2,113	3.8%	254	2.0%	1,859	>100%
Revenues from Sales - Black	4,249	7.7%	798	6.2%	3,451	>100%
Blue – Italy	2,933	5.3%	578	4.5%	2,355	>100%
Revenues from Sales - Blue	2,933	5.3%	578	4.5%	2,355	>100%
Others - Italy	840	0.8%	395	3.1%	445	>100%
Others - International	83	0.1%	18	0.1%	65	>100%
Revenues from Sales Others	923	1.7%	414	3.2%	509	>100%
Total Revenues from sales	55,288	100%	12,819	100%	42,469	>100%

Revenues from Sales by product line

Revenues from Sales by geographical area

(In thousands of Euro)	Half year ending on					Change
	30 June 2019	% of revenues	30 June 2018	% of revenues	Value	%
Italy	31,414	56.8%	7,066	55.1%	24,348	>100%
Austria/Germany	5,472	9.9%	1,305	10.2%	4,167	>100%
Spain/Portugal	2,916	5.3%	1,560	12.2%	1,356	>100%
Switzerland	2,194	4.0%	385	3.0%	1,809	>100%
Benelux	2,957	5.3%	498	3.9%	2,459	>100%
Northern Europe	2,054	3.7%	541	4.2%	1,513	>100%
France	3,802	6.9%	391	3.1%	3,411	>100%
Eastern Europe	2,686	4.9%	440	3.4%	2,246	>100%
Middle East	573	1.0%	123	1.0%	450	>100%
Others	1,220	2.2%	510	4.0%	710	>100%
Total Revenues from sales	55,288	100%	12,189	100%	42,469	>100%

4.19 Cost of sales

The cost of sales amounts to Euro 30,356 thousand at 30 June 2019 (Euro 7,419 at 30 June 2018) and mainly includes the costs of purchase and processing of raw materials for Euro 28,056 thousand, personnel costs for Euro 1,125 thousand, accessory costs for Euro 571 thousand and logistics costs for Euro 22 thousand.

4.20 Selling and distribution costs

At 30 June 2019, sales and distribution costs amounted to Euro 11,922 thousand (Euro 1,819 thousand at 30 June 2018); these consisted of personnel costs (Euro 5,116 thousand), sales network commissions (Euro 2,675 thousand) and transport costs (Euro 2,046 thousand), as shown in the following table.

(In thousands of Euro)	Half year ending on
	30 June 2019	% of revenues	30 June 2018	% of revenues
Personnel costs for sales and distribution	5,064	9.2%	719	5.6%
Commissions to customers	2,675	4.8%	415	3.2%
Transports for sales	2,046	3.7%	261	2.0%
Travel costs	740	1.3%	122	1.0%
Commercial, advertising and consultancy expenses	804	1.5%	151	1.2%
Other sales and distribution costs	593	1.1%	151	1.2%
Total Sales and distribution costs	11,922	21.6%	1,819	14.2%

4.21 General and administrative costs

General and administrative costs mainly include amortisation of intangible assets arising from the Purchase Price Allocation for Euro 2,887 thousand and in extraordinary charges relating to the Business Combination for Euro 1,611 thousand (mainly recorded under the items for administrative consultancy and commissions).

(In thousands of Euro)	Half year ending on
	30 June 2019	% of revenues	30 June 2018	% of revenues
Amortisation of intangible assets	3,676	6.6%	1,328	10.4%
Depreciation of tangible assets	776	1.4%	68	0.5%
Provisions for risks and write-downs	55	0.1%	58	0.5%
Cost of administrative staff	2,406	4.4%	342	2.7%
Administrative, legal, personnel consultancy etc.	1,818	3.3%	840	6.5%
Commissions and fees	125	0.2%	1,399	10.9%
Rent payable and other rental fees	88	0.2%	13	0.1%
Remuneration of the Board of Directors and Board of Statutory Auditors	271	0.5%	26	0.2%
Other general administrative costs	917	1.7%	1,595	12.4%
Total general and administrative costs	10,131	18.3%	5,592	43.6%

4.22 Other non-operating costs and revenues

Other non-operating costs and revenues at 30 June 2019 amounted to Euro 320 thousand and mainly related to the recovery of SIAE rights for Euro 292 thousand, offsetting the related costs for Euro 334 thousand. Contingent assets and liabilities amounted to Euro 176 thousand and Euro 130 thousand, respectively, and are mainly attributable to certain medium-small differences in the allocation of premiums and commercial contributions.

(In thousands of Euro)	Half year ending on
	30 June 2019	% of revenues	30 June 2018	% of revenues
SIAE fees recovered	292	0.5%	147	1.1%
Recovery from suppliers for promotions	64	0.1%	7	0.1%
Contingent assets	176	0.3%	54	0.4%
(SIAE and CONAI contributions)	(334)	-0.6%	(153)	-1.2%
(Contingent liabilities)	(130)	-0.2%	(140)	-1.1%
(Capital losses)	(3)	0.0%	-	0.0%
(Gifts to customers for promotions)	(35)	-0.1%	(3)	0.0%
(Non-deductible costs)	(9)	0.0%	-	0.0%
Other non-operating costs /(revenues)	299	0.5%	57	0.4%
Total Other non-operating costs and revenues	320	0.6%	(31)	-0.2%

4.23 Financial income and charges

Net financial income and charges show a net negative balance of Euro 765 thousand (Euro +4,554 thousand at 30 June 2018).

Financial income of Euro 210 thousand refers to:

Euro 136 thousand for bank interest income;
Euro 74 thousand for the change, compared to the previous year, in the fair value of the warrants issued by the Group (no. 6,130,954 at 30 June 2019);

Financial charges of Euro 975 thousand mainly refer to interest due to banks, related to the loan started on 29 June 2017 for an original amount of Euro 85,000 thousand.

4.24 Gains and losses on exchange rates

(In thousands of Euro)	Half year ending on
	30 June 2019	% of revenues	30 June 2018	% of revenues
Gains/(losses) on commercial exchanges	(89)	-0.2%	224	0.6%
Gains/(losses) on financial exchanges	12	0.0%	-	-
Gains/(losses) on exchanges from derivatives	-	-	-	-
Total Foreign exchange translation gains (losses)	(77)	-0.1%	224	0.6%

4.25 Taxes

The details of the item Taxes for the six-month period ended 30 June 2019 and 30 June 2018 are shown below:

(In thousands of Euro)		Half year ending on
	30 June 2019	30 June 2018
Current taxes	(328)	10,836
Deferred taxes	548	(491)
Total	220	10,345

The income tax charge is recognised, based on IAS 34, on the basis of management's best estimate of the weighted average annual tax rate for the entire year, applying it to the pre-tax profit for the period applied to the individual entities.

The change compared to 30 June 2018 is mainly due to the Patent Box benefit , relating to the three-year period 2015/2017 for Euro 10,128 thousand, recorded during the first half of 2018 following the agreement signed with the Revenue Office Management.

4.26 Basic and diluted earnings per share

Basic earnings per share were calculated by dividing the consolidated result for the period by the average number of ordinary shares. The table below shows the details of the calculation:

(In thousands of Euro)	Half year ending on
	30 June 2019	30 June 2018
Result for the period/year [A]	2,575	12,819
Number of shares (in thousands) taken into account for the calculation of basic and diluted earnings per share [B]	20,566	14,266
Basic and diluted earnings per share ) [A/B] (in Euro	0.13	0.89

4.27 Cash flow statement

The main phenomena that influenced cash flow trends in the periods under review are summarised below.

Net cash flow generated/(absorbed) by operating activities

(In thousands of Euro)	Half year ending on
	30 June 2019	30 June 2018
Cash flow generated by operating activities
Gains/(losses) of the period	2,575	12,189
Adjusted for:
Income taxes	220	10,135
Net financial income/(expenses)	765	(4,369)
Depreciation, amortisation and write-downs of fixed assets	5,290	2,684
Changes in
- Inventories	(6,908)	(21,537)
- Trade receivables	7,594	(50,731)
- Trade payables	(4,167)	20,055
- Other changes in operating assets and liabilities	(3,643)	(434)
Taxes paid	-	11,122
Interest paid	(765)	(185)
Cash flow generated/(absorbed) by operating activities	942	(20,229)
Net charges deriving from the Business Combination/STAR	1,611	4,480
Advance payment for commercial contributions	1,733	-
Financial income from warrants	(74)	(4,812)
Adjusted Net cash flow generated/(absorbed) by operating activities	4,212	(20,561)

Cash flow generated/(absorbed) by investment activities

(In thousands of Euro)	Half year ending on
	30 June 2019	30 June 2018
Cash flow from investment activities
Acquisition of subsidiary company, net of cash acquired and other costs	(2,720)	(93,857)
(Purchase)/sale of property, plant and equipment and intangible assets	(4,359)	(87,397)
Cash flow generated/(absorbed) by investment activities	(7,129)	(181,254)

Cash flow generated/(absorbed) by lending activities

(In thousands of Euro)	Half year ending on
	30 June 2019	30 June 2018
Cash flow from financing activities
Increase/(Decrease) in financial liabilities	(6,666)	70,310
Increase/(Decrease) in other financial liabilities	5,079	1,244
(Purchase)/sale of treasury shares	(1,439)	(12,301)
Dividend distribution	(6,088)	-
Capital increase	-	8,043
Other changes in shareholders' equity	(849)	44,476
Net cash and cash equivalents generated by lending activities	(9,963)	111,772

5. Transactions with Related Parties

The Company has entered into, and continues to have, transactions of various kinds, mainly of a commercial nature, with related parties identified on the basis of the principles established by the International Accounting Standard IAS 24.

Transactions with related parties are neither atypical nor unusual and fall within the ordinary course of business of Group companies. These transactions mainly concern (i) the supply of products and accessories for mobile telephony, (ii) the supply of services functional to the performance of the activity and (iii) the disbursement of loans to the above-mentioned related parties.

Transactions with Related Parties, as defined by IAS 24 and governed by Article 4 of Consob Regulation 17221 of 12 March 2010 (and subsequent amendments), entered into by the Group up to 30 June 2019 concern mainly commercial transactions relating to the supply of goods and the provision of services.

The following is a list of the related parties with which other transactions took place in the first half of 2019, indicating the type of relationship:

Related parties	Type and main correlation relationship
Cellular Iberia S.L.	Company in which related natural persons have an interest (Stefano Aleotti (25%) and Piero Foglio (25%))
Cellular Swiss S.A.	Company 50% associated with Cellularline S.p.A. (consolidated using the equity method); the remaining shareholders are: Ms Maria Luisa Urso (25%) and Mr Antonio Miscioscia (25%)
Crescita Holding s.r.l.	Crescita Holding s.r.l., a company in which Alberto Toffoletto (Chairperson of Crescita until the date of the relevant transaction), Antonio Tazartes (Chairperson of the Board of Directors), Marco Drago (director until the date of the relevant transaction), Massimo Armanini (director until the date of the relevant transaction) and Cristian D'Ippolito (director)
Heirs Alessandro Foglio Bonacini, Manuela Foglio, Monia Foglio Bonacini, Christian Aleotti, Stefano Aleotti	Shareholders of Cellularline S.p.A.
Pegaso s.r.l./Systema s.r.l.	A 60% owned company (consolidated on a line-by-line basis) that controls 100% of Systema; the remaining shareholders are Gianni Pietranera (26.8%) and Piero Uva (13.2%).
Other	Family members of the Directors and Shareholders of Cellularline S.p.A.

The table below shows the balance sheet balances of the Company's Related Party Transactions for the sixmonth period ended 30 June 2019:

(In thousands of Euro)	Current trade receivables	Other Receivables non-current	(Trade payables)
Cellular Swiss S.A.	6,391	525	(359)
Cellular Iberia S.L.	20	-	-
Total	6,411	525	(359)
Impact on the budget item	12.4%	100%	2.2%

(In thousands of Euro)	Revenues from sales	(Selling and distribution costs)	(General and administrative costs)	Other non-operating costs (Revenues)
Cellular Swiss S.A.	2,015	-	-	(2)
Cellular Iberia S.L.	277	-	-	1
Shareholders	-	-	(20)	-
Other	-	-	-	(52)
Total	2,292	-	(20)	(53)
Impact on the budget item	4.1%	%	0.2%	-16.5%

The table below shows the economic balances of Cellularline's Related Party Transactions by until 30 June 2019:

The main credit/debt and economic relations with related parties that the Cellularline had in the period ended 30 June 2019 are as follows:

Cellular Iberia S.L.: commercial relationship relating to the supply of goods for sale by Cellularline to Cellular Iberia S.L.;
Cellular Swiss S.A.: commercial relationship relating to the sale of assets for sale by Cellularline to Cellular Swiss S.A., with the latter charging a share of the commercial contributions incurred for the acquisition of new customers and/or the development of existing customers, in line with the Group's commercial policies;
shareholders of Cellularline S.p.A.: lease agreements with Cellularline as lessee, entered into with some of its shareholders, as lessors, specifically:
(i) lease with Victor-Tex (the lessor are now Alessandro Foglio Bonacini's heirs) on 1 March 2010;

(ii) lease agreement signed with Mr. Stefano Aleotti on 6 March 2013;

(iii)lease agreement signed with Manuela Foglio, Monia Foglio Bonacini, Alessandro Foglio Bonacini and Christian Aleotti on 1 September 2017;
lease agreement signed with Manuela Foglio, Monia Foglio Bonacini, Alessandro Foglio Bonacini and Christian Aleotti on 16 October 2017;
Other: wages and salaries for employee services relating to the following persons:
- o Barbara Foglio, sister of the current Deputy Chairperson of the Board of Directors Piero Foglio, whose remuneration is classified under general and administrative costs;
- o Veronica Sezzi, daughter of the manager with strategic responsibilities Emilio Sezzi, whose remuneration is classified among the costs of sale and distribution.

6. Other information

6.1 Contingent liabilities

On the basis of the information available to date, the Company's Directors believe that, at the date of approving these financial statements, the provisions made are sufficient to ensure the correct representation of the financial information.

6.2 Risks

It should also be noted that the Group is exposed to the various risks already illustrated in Paragraph 13 of the Interim Report on the Operating Performance.

6.3 Guarantees granted in favour of third parties

This item includes sureties payable in favour of third parties for Euro 420 thousand, mainly relating to a customer to guarantee any contractual penalties for commercial supplies.

6.4 Subsequent events

Admission to listing on the STAR segment of the MTA

Treasury share purchase programme

CERTIFICATION OF THE CONSOLIDATED CONSOLIDATED HALF-YEAR FINANCIAL STATEMENTS AT 30 JUNE 2019 PURSUANT TO ART. 81-TER OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999 AND SUBSEQUENT AMENDMENTS AND ADDITIONS

The undersigned Christian Aleotti and Marco Cagnetta, in their capacity as Managing Directors, and Stefano Cerrato, in his as Manager responsible for preparing the accounting and corporate documents of the Cellularline Group, certify, taking into account the provisions of Article 154-bis, paragraphs 3 and 4, of Legislative Decree 58 of 24 February 1998:

the adequacy in relation to the characteristics of the business, and
the effective application of the administrative and accounting procedures for the preparation of the Consolidated interim consolidated financial statements for the six-month period ended 30 June 2019.

In this regard, it should be noted that no significant aspects emerged.

We also certify that the Consolidated Interim Consolidated Financial Statements for the six-month period ended 30 June 2019 of the Cellularline Group:

were prepared in accordance with the applicable international accounting standards recognised by the European Community pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002;
correspond to the results of the accounting books and records;
provide a true and fair view of the balance sheet and financial position of the issuer and of all the companies included in the consolidation.

The interim report on the operating performance includes a reliable analysis of the trend and result of operations as well as the situation of the issuer and of all the companies included in the consolidation, together with a description of the main risks and uncertainties to which they are exposed.

___________________ ___________________

Reggio Emilia, 12 September 2019

Christian Aleotti Marco Cagnetta

Chief Executive Officer Chief Executive Officer

Stefano Cerrato

Manager responsible for preparing the accounting and corporate documents

_________________________

AI assistant

Cellularline — Interim / Quarterly Report 2019

4473_ir_2019-09-13_ef5718a1-e4d1-4422-bef8-132fc28ecc6f.pdf

COMPANY DATA OF THE PARENT COMPANY CELLULARLINE S.p.A.

Registered Office:

Legal details:

CORPORATE BODIES

Board of Directors

Control and Risk Committee

Appointment and Remuneration Committee

Related party transaction committee

Supervisory Body

Board of Statutory Auditors

GROUP STRUCTURE

GROUP COMPOSITION

INTERIM REPORT ON THE OPERATING PERFORMANCE OF THE CELLULARLINE GROUP

1. Introduction

2. Methodological note

3. Reference accounting standards

4. Main financial and operational indicators1

5. Market trends

6. Group equity and economic profit /loss for the year

Income Statement

6.1 Consolidated revenues

6.1.1 Revenues from Sales by product line

Revenues from Sales by product line

6.1.2 Consolidated revenue by geographical segment

6.2 Cost of sales

6.3 Selling and distribution costs

6.4 General and administrative costs

6.5 Other non-operating costs and revenues

6.6 Adjusted EBITDA

6.7 Financial income and charges

6.8 Gains/(losses) on exchange rates

6.9 Adjusted EBIT

6.10 Adjusted Group profit/loss

7. Balance Sheet and Financial Position

Balance Sheet

Financial Position

Cash flow generated/(absorbed) by investment activities

Cash flow generated/(absorbed) by lending activities

8. Investments and research and development activities

9. Information on transactions with related parties, on non-recurring, atypical or unusual transactions

10. Atypical and/or unusual transactions

11. Share-based payment arrangements

12. Treasury shares and shares of the parent company

13. Main risks and uncertainties the Group is exposed to

13.1 Risks related to competition and competitiveness

13.2 Risks connected to seasonal phenomena

13.3 Risks associated with the evolution of the regulatory framework

13.4 Risks connected with the macroeconomic trend

13.5 Risk associated with price trends and possible procurement difficulties and relations with suppliers

13.6 Liquidity Risk

13.7 Credit risks

13.8 Interest rate risks

14. List of secondary offices

15. Personnel information

16. Significant events during the half-year and after the end of the six month period

Significant events during the six-month period

Treasury share purchase programme

Acquisition of control of Systema, player operating in the Telco channel

Project for listing on the STAR segment of the MTA

Significant events after the half-year closing

Admission to listing on the STAR segment of the MTA

Treasury share purchase programme

Changing Systema's company name

17. Management outlook

ATTACHMENT 1

CONSOLIDATED FINANCIAL STATEMENTS OF CELLULAR LINES AT 30 JUNE 2019 CONSOLIDATED BALANCE SHEET AND FINANCIAL POSITION

CONSOLIDATED FINANCIAL STATEMENTS OF CELLULAR LINES AT 30 JUNE 2019 PRO-FORMA CONSOLIDATED INCOME STATEMENT

COMPREHENSIVE PRO-FORMA CONSOLIDATED INCOME STATEMENT

ATTACHMENT 1

CONSOLIDATED FINANCIAL STATEMENTS OF CELLULAR LINES AT 30 JUNE 2019 PRO-FORMA CONSOLIDATED CASH FLOW STATEMENT

CONSOLIDATED HALF-YEAR

CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2019

STATEMENT OF THE CONSOLIDATED BALANCE SHEET AND FINANCIAL POSITION

CONSOLIDATED BALANCE SHEET AND FINANCIAL POSITION

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED CASH FLOW STATEMENT

Cellularline Interim / Quarterly Report 2019

4. Main financial and operational indicators¹