(Translation from the Italian original which remains the definitive version)

Interim Consolidated Financial statements as at 30 June 2022

(with independent auditors' report thereon)

KPMG S.p.A. 12 September 2022

KPMG S.p.A. Revisione e organizzazione contabile Via Innocenzo Malvasia, 6 40131 BOLOGNA BO Telefono +39 051 4392511 Email [email protected] PEC [email protected]

(This independent auditors' report has been translated into English solely for the convenience of international readers. Accordingly, only the original Italian version is authoritative.)

Report on review of condensed interim consolidated financial statements

To the shareholders of Cellularline S.p.A.

Introduction

We have reviewed the accompanying condensed interim consolidated financial statements of the Cellularline Group, comprising the statement of financial position as at 30 June 2022, the income statement and the statements of comprehensive income, cash flows and changes in equity for the six months then ended and notes thereto. The directors are responsible for the preparation of these condensed interim consolidated financial statements in accordance with the International Financial Reporting Standard applicable to interim financial reporting (IAS 34), endorsed by the European Union. Our responsibility is to express a conclusion on these condensed interim consolidated financial statements based on our review.

Scope of the review

Limited, società di diritto inglese.

We conducted our review in accordance with Consob (the Italian Commission for Listed Companies and the Stock Exchange) guidelines set out in Consob resolution no. 10867 dated 31 July 1997. A review of condensed interim consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA Italia) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the condensed interim consolidated financial statements.

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Cellularline Group Report on review of condensed interim consolidated financial statements 30 June 2022

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed interim consolidated financial statements of the Cellularline Group as at and for the six months ended 30 June 2022 have not been prepared, in all material respects, in accordance with the International Financial Reporting Standard applicable to interim financial reporting (IAS 34), endorsed by the European Union.

Bologna, 12 September 2022

KPMG S.p.A.

(signed on the original)

Davide Stabellini Director of Audit

2022 INTERIM FINANCIAL REPORT

CORPORATE BODIES 4
GROUP STRUCTURE AT 30 June 2022 6
DIRECTORS' REPORT 8
1.	Introduction	9
2.	Methodological note	9
3.	Accounting policies	10
4.	Main financial and performance indicators	10
5.	Market performance	11
6.	Group performance	11
7.	Statement of financial position	18
8.	Investments and research and development activities	22
9.	Information on transactions with related parties and non-recurring, atypical or unusual transactions	22
10.	Atypical and/or unusual transactions	22
11.	Share-based payments	23
12.	Treasury shares and shares of the parent	23
13.	The main risks and uncertainties to which the Group is exposed	23
14.	Management and coordination	28
15.	Branches	28
16.	Workforce	28
17.	Information on environmental impact	28
18.	Significant events during and after the reporting period	29
19.	Business outlook	30
	CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS	32
	AT 30 JUNE 2022	32
	NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS	38
1.	Introduction	39
2.	Basis of preparation and main accounting standards	39
3.	Segment reporting	49
4.	Notes to the individual condensed interim consolidated financial statements captions	49
5.	Transactions with related parties	68
6.	Other information	69
CERTIFICATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS AT 30 JUNE 2022 PURSUANT TO ART. 81-TER OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999, AS AMENDED AND SUPPLEMENTED 71

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

Registered Office:

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

Legal information:

Share capital Euro 21,343,189 fully paid-up VAT reg. no. and Tax Code 09800730963 Economic and Administrative Register RE-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	Chairman
Christian Aleotti	Deputy Chairman and Chief Executive Officer
Marco Cagnetta	Chief Executive Officer
Giorgina Gallo	Independent Director
Alberto Grignolo	Independent Director
Paola Schwizer	Independent Director
Davide Danieli	Director
Marco Di Lorenzo	Director
Cristian D'Ippolito	Director
Gaia Guizzetti	Director
Carlo Moser	Director

Risk and Control Committee

Paola Schwizer	Chairwoman and Independent Director
Giorgina Gallo	Independent Director
Alberto Grignolo	Independent Director

Appointments and Remuneration Committee

Giorgina Gallo	Chairwoman and Independent Director
Paola Schwizer	Independent Director
Cristian D'Ippolito	Director

Committee for Transactions with Related Parties

Paola Schwizer	Chairwoman and Independent Director
Giorgina Gallo	Independent Director
Alberto Grignolo	Independent Director

Board of Statutory Auditors

Cristiano Proserpio	Chairman
Daniela Bainotti	Standing Auditor
Paolo Chiussi	Standing Auditor
Guido Prati	Alternate Auditor
Stefania Bettoni	Alternate Auditor

Supervisory Body

Anna Doro Chairwoman Fabrizio Capponi Member Ester Marino Member

Independent Auditors

KPMG S.p.A.

GROUP STRUCTURE AT 30 June 2022

GROUP COMPOSITION

At 30 June 2022, the Group consists of the following companies:

Cellularline S.p.A., the parent, incorporated under Italian law with registered address at Via Lambrakis 1/a, Reggio Emilia (Italy), and operating in Italy and abroad in the sector of design, distribution (including third-party brand products) and marketing of accessories and devices for multimedia products (smartphones, tablets, wearables, audio devices, etc.) and accessories and devices for mobile connectivity (in the car and on motorcycles/bikes). The parent has a permanent establishment in Paris, at 91, Rue Du Faubourg Saint Honoré (France), where employees operate on a permanent basis, carrying out strictly commercial activities for the management of relationships 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, 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, 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, which owns the property leased to the commercial company Cellular Swiss S.A.;
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 75%-owned subsidiary that owns - as a holding company - 100% of Systema 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), 75% of which is indirectly owned through the investment held in Pegaso s.r.l.; Systema operates on the European market for mobile phone accessories in the Telcochannel.
Worldconnect AG, a Swiss-registered company based in Diepoldsau, Switzerland, an 80%-owned subsidiary, is the world market leader in premium travel adapters. Founded in 2002, Worldconnect through its trademarks SKROSS and Q2 Power and leading OEM partnerships - operates internationally

with a vast range of products comprising multiple travel adapters, specific adapters for individual countries and peripheral power devices.

Coverlab S.r.l., an Italian company based in via Flaminia Conca 35, Rimini, is a 55%-owned e-commerce company, operating - through its proprietary website - in the custom segment of smartphone accessories under the brand Coverlab.
Cellularline USA Inc., a company incorporated under the laws of the United States based at 350 5TH AVE FL 41, New York, is a wholly-owned subsidiary, which distributes Cellularline Group products in the USA and Canada.
Cellular Swiss S.A., a company incorporated under Swiss law with registered office in Route de Marais 17, Box No. 41, Aigle (Switzerland) a 50%-owned associate, which distributes the Cellularline products in the Swiss market.

DIRECTORS' REPORT

1. Introduction

The Cellularline Group (hereinafter the "Group" or the "Cellularline Group") 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, by volume, among the top operators in Spain, Switzerland, Belgium, the Netherlands and Austria and boasts a strong competitive position in the other European countries.

These condensed interim consolidated financial statements were approved by the Board of Directors on 8 September 2022, in line with the financial calendar approved by the Board of Directors on 15 December 2021. Since 22 July 2019, the Parent's shares have been listed on Euronext STAR Milan, organised and managed by

Borsa Italiana S.p.A..

These condensed interim consolidated financial statements at 30 June 2022 include the financial statements of the parent and its subsidiaries (hereinafter also the "Group" or the "Cellularline Group").

2. Methodological note

This Directors' Report provides information on the financial position, performance and cash flows of the Cellularline Group at 30 June 2022, compared with the prior interim period figures at 30 June 2021 (at 31 December 2021 for the statement of financial position).

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

The amounts and percentages were calculated in thousands of euros and, therefore, any differences in certain tables are due to rounding.

3. Accounting policies

This Directors' Report at 30 June 2022 was prepared in accordance with the provisions of art. 154-ter, paragraph 4 of Legislative Decree no. 58/98 of the T.U.F. [Consolidated Finance Act] - 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 for the preparation of the annual financial statements and must therefore be read together with the Consolidated Financial Statements of the Cellularline Group at 31 December 2021. The accounting policies and criteria adopted are consistent with those used for the annual consolidated financial statements at 31 December 2021.

In order to facilitate an understanding of the Group's economic and financial performance, a number of Alternative Performance Indicators ("APIs") were identified, as defined by the ESMA 2015/1415 guidance. For more details, please refer to Annex 1 of this report.

4. Main financial and performance indicators1

(In thousands of Euro)
	H1 2022	H1 2021
Performance indicators
Revenue	54,558	39,707
Adjusted EBITDA2	3,319	1,576
Adjusted EBIT3	484	(884)
Loss for the period attributable to owners of the parent	(43,011)	(3,225)
Adjusted loss for the period attributable to the owners of the parent4	(280)	(152)

(In thousands of Euro)	Balance at
	31 December
	30 June 2022	2021	30 June 2021
Financial indicators
Cash flows generated by operating activities (*)	5,531	19,072	15,470
Net financial indebtedness	40,216	37,351	38,155
Adjusted net financial indebtedness5	39,296	36,125	36,745
Adjusted net financial indebtedness/Adjusted LTM EBITDA	2.3x	2.2x	2.5x

(*) In order to provide better comparability, some items for H1 2021 have been reclassified.

For more details with reference to the change in cash flows generated by operating activities, please refer to paragraph 7. "Statement of Financial Position" included in this Directors' Report.

5Adjusted net financial indebtedness is adjusted for financial liabilities per warrant.

¹ Adjusted indicators are not identified as IFRS indicators and, therefore, should not be considered as an alternative measure for the assessment of the Group's results. Since the composition of these indicators is not regulated by IFRS, the Group's calculation criterion applied may not be consistent with that adopted by other companies or that may be adopted in the future by the Group, or created by it, and thus not comparable.

² Adjusted EBITDA is the Consolidated EBITDA adjusted by (i) non-recurring expense/(income), (ii) the effects deriving from non-core events, (iii) the effects of events associated with non-recurring transactions and (iv) exchange gains/(losses).

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

⁴Adjusted loss for the period attributable to the owners of the parent is calculated as the consolidated profit or loss for the year adjusted for (i) adjustments incorporated in Adjusted EBITDA, (ii) adjustments of amortisation and depreciation relating to the Purchase Price Allocation, (ii) adjustments of nonrecurring financial expense/(income) and (v) the theoretical tax impact of these adjustments.

5. Market performance

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 for smartphone accessories below EUR 100 - the one in which the Group mainly operates grew in all major European countries (+26.4%) in H1 2022 compared to the same period last year.

6. Group performance

The income statement presented in this Directors' Report has been reclassified in accordance with the presentation methods that management believes best represent the trend of the Group's operating profitability during the six months.

Income Statement

(thousands of Euro)	H1 2022	Of which related parties	% of revenue	H1 2021	Of which related parties	% of revenue
Revenue from sales	54,558	1,996	100%	39,707	1,554	100%
Cost of sales	(32,885)		-60.3%	(23,753)		-59.8%
Gross operating profit	21,673		39.7%	15,954		40.2%
Sales and distribution costs	(15,001)		-27.5%	(11,375)		-28.6%
General and administrative costs	(52,224)	(6)	-95.7%	(11,470)	(5)	-28.9%
Other non-operating income	802		1.5%	1,979		5.0%
Operating loss	(44,750)		-82.0%	(4,912)		-12.4%
* of which depreciation and amortisation (including PPA amortisation)	6,060		11.1%	5,673		14.3%
* of which impairment of goodwill	39,925		73.2%	-		-
* of which non-recurring expense	968		1.8%	811		2.0%
* of which operating exchange gains	1,116		2.0%	4		0.0%
Adjusted operating profit (Adjusted EBITDA)	3,319		6.1%	1,576		4.0%
Financial income	308		0.6%	244		0.6%
Financial expense	(998)		-1.8%	(1,587)		-4.0%
Exchange gains/(losses)	1,329		2.4%	(6)		0.0%
Gains/(losses) on equity investments	-		0.0%	120		0.3%
Pre-tax loss	(44,111)		-80.9%	(6,141)		-15.5%
* of which PPA amortisation	3,225		5.9%	3,213		8.1%
* of which impairment of goodwill	39,925		73.2%	-		-
* of which non-recurring expense	968		1.8%	811		2.0%
* of which fair value gain (loss) on the warrant	(307)		-0.6%	757		1.9%
Adjusted pre-tax loss	(300)		-0.5%	(1,360)		-3.4%
Current and deferred taxes	1,100		2.0%	2,916		7.3%
Loss for the period attributable to the owners of the
parent	(43,011)		-78.8%	(3,225)		-8.1%
* of which PPA amortisation	3,225		5.9%	3,213		8.1%
* of which impairment of goodwill	39,925		73.2%	-		-
* of which non-recurring expense	968		1.8%	811		2.0%
* of which fair value gains (loss) on warrants	(307)		-0.6%	757		1.9%
* of which tax effect on the above items	(1,080)		-2.0%	(1,708)		-4.3%
Adjusted loss for the period attributable to the
owners of the parent	(280)		-0.5%	(152)		-0.4%

6.1 Consolidated revenue

It should be noted that the H1 revenue, given the seasonality of the business, accounts for less than 40% of the annual total and is therefore not necessarily representative of an annual trend.

In the first half of 2022, the Group realised revenue from sales of EUR 54,558 thousand, up 37.4% compared to the same period of the previous year (EUR 39,707 thousand), thanks to the recovery of demand in both the domestic and international markets; the latter is also benefiting from the strong increase in sales by Worldconnect, thanks to the increase in traffic recorded in the Airport Travel Retail channel compared to the previous year. It should be noted that Coverlab – a start-up company active in the social commerce channel - contributed EUR 551 thousand in the period under review, so that the like-for-like revenue development (i.e., the comparison of sales with the corresponding period of last year on a like-for-like basis) amounted to +36.0%.

6.1.1 Revenue from sales by product line

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

(i) Red line, including accessories for multimedia devices (such as cases, covers, phone holders for cars, protective glass, power supply units, portable chargers, data and charging cables, headphones, earphones, speakers, wearable technology products and travel adapters);
(ii) Black 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 line, which includes all the products marketed in Italy and abroad, not under the Group's proprietary trademarks.

					Change
(In thousands of Euro)	H1 2022	% of revenue	H1 2021	% of revenue	Δ	%
Red – Italy	18,013	33.0%	16,019	40.3%	1,994	12.4%
Red – International	25,079	46.0%	15,176	38.2%	9,903	65.3%
Revenue from Sales - Red	43,092	79.0%	31,195	78.6%	11,897	38.1%
Black – Italy	2,245	4.3%	2,269	5.7%	(24)	-1.0%
Black – International	1,896	3.5%	2,274	5.7%	(378)	-16.6%
Revenue from Sales - Black	4,141	7.8%	4,543	11.4%	(402)	-8.8%
Blue – Italy	5,478	10.0%	3,203	8.1%	2,275	71.0%
Blue - International	1,845	3.4%	652	1.6%	1,193	>100%
Revenue from sales - Blue	7,323	13.4%	3,855	9.7%	3,468	90.0%
Other – Italy	2	0.0%	114	0.3%	(112)	>100%
Revenues from Sales/Others	2	0.0%	114	0.3%	(112)	>100%
Total Revenue from sales	54,558	100.0%	39,707	100.0%	14,851	37.4%

The following table shows revenue, broken down by product, for the periods considered:

Revenue from sales by product line

the Red Line recorded a year-on-year increase of 38.1% (EUR 11,897 thousand), accounting for approximately 80% of the overall performance for the period. Growth was driven by the recovery of demand in international markets (+65.3%) thanks to the contribution of both Cellularline and Worldconnect products as described above;
the Black Line recorded sales of Euro 4,141 thousand; substantially in line (Euro -402 thousand) with the same period of the previous year;
the Blue Line recorded growth of Euro 3,468 thousand, mainly due to increased demand for products of non-Group owned brands distributed in Italy.

6.1.2 Consolidated revenue by geographical segment

The following table shows revenue, broken down by geographical segment, for the periods considered:

					Change
(In thousands of Euro)	H1 2022	% of revenue	H1 2021	% of revenue	Δ	%
Italy	25,737	47.2%	21,605	54.4%	4,132	19.1%
DACH	5,016	9.0%	3,020	7.6%	1,996	66.1%
Spain/Portugal	4,650	8.6%	3,599	9.1%	1,051	29.2%
Eastern Europe	4,973	8.5%	2,879	7.3%	2,094	72.7%
France	2,960	5.4%	2,799	7.0%	161	5.7%
Benelux	2,974	5.5%	2,102	5.3%	872	41.5%
Northern Europe	4,222	7.7%	2,015	5.1%	2,207	>100%
Middle East	846	2.4%	332	0.8%	514	>100%
Others	3,181	5.8%	1,356	3.4%	1,825	>100%
Total Revenue from sales	54,558	100.0%	39,707	100.0%	14,851	37.4%

Revenue from sales by geographical segment

With regard to the analysis of sales by geographical segment for the period, it should be noted that - thanks to the growth in sales recorded in all countries - the share of sales in foreign markets accounted for over 50% of the Group's total sales, with an increase in the incidence of 7.2 p.p. (52.8% compared to 45.6% in H1 2021). Amongst others, the Nordic, DACH and Eastern European markets performed particularly well.

6.2 Cost of sales

In the first half of 2022, cost of sales came to EUR 32,885 thousand (EUR 23,753 thousand in H1 2021) equating to 60.3% of revenues, essentially unchanged compared with 59.8% of the same period of last year.

6.3 Sales and distribution costs

			Changes
(In thousands of Euro)	H1 2022	H1 2021	Δ	%
Sales and distribution personnel expense	6,084	5,433	651	12.0%
Commissions to agents	2,654	2,286	368	16.1%
Transport	4,199	2,350		1,849 78.7%
Advertising and consultancy expenses	1,031	642	389	60.6%
Other sales and distribution costs	1,033	664		369 55.6%
Total sales and distribution costs	15,001	11,375	3,626	31.9%

Although this item increased by EUR 3,626 thousand in absolute terms as compared to the corresponding period of the previous year, it decreased by 1.1% as a percentage of revenue to 27.5% as compared to 28.6% in the first half of 2021. This efficiency improvement is a direct consequence of both the higher absorption of fixed costs due to the strong growth in revenue in the period, and the careful cost control policy implemented by management. The main benefits come from the reduction in the incidence of (i) personnel expense (-2.5%); (ii) commissions to Italian agents resulting from a lower weight of domestic sales compared to foreign markets (-0.9%) and (iii) Advertising expenses and Other sales and distribution costs (-0.5%), partially offset by the increase in the incidence

of transport costs (1.8%) as a result of the high pressure on transport and energy costs.

			Changes
(In thousands of Euro)	H1 2022	H1 2021	Δ	%
Amortisation	4,810	4,768	42	0.9%
Depreciation	1,250	905	345	38.1%
Impairment of goodwill	39,925	-	39,925	>100%
Provisions for risks and impairment losses	121	85	36	42.4%
Administrative personnel expense	2,892	2,579	313	12.1%
Strategic, administrative, legal, HR consultancy, etc.	1,051	1,206	(155)	-12.9%
Commissions and fees	74	44	30	68.2%
Directors' and statutory auditors fees	496	478	18	3.8%
Other general and administrative costs	1,605	1,405	200	14.2%
Total General and administrative costs	52,224	11,470	40,754	>100%

6.4 General and administrative costs

General and administrative costs amounted to Euro 52,224 thousand in the first half of 2022, compared to Euro 11,470 thousand in the first half of 2021. The significant increase is related to the result of the impairment test of the Goodwill for EUR 39,9 million.

6.5 Other non-operating costs and income

This item includes non-operating costs and income for a net positive balance of EUR 802 and refers to "no-core" activities. The item can be broken down as follows:

			Changes
(In thousands of Euro)	H1 2022	H1 2021	Δ	%
Prior year income (expense)	43	(192)	235	>100%
Recoveries of SIAE fees	(3)	130	(133)	>100%
SIAE and CONAI contributions	(72)	(199)	127	-63.8%
Other	834	2,240	(1,406)	-62.8%
Net other non-operating income	802	1,979	(1,177)	-59.5%

The total amount of Other non-operating costs and income decreased compared to 2021 by Euro 1,177 thousand as a consequence the positive contribution Härtefall cashed from Worldconnect in the first half of 2021.

6.6 Adjusted EBITDA

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

(In thousands of Euro)			Changes
	H1 2022	H1 2021	Δ	%
Operating loss	(44,750)	(4,912)	(39,838)	>100%
Amortisation and depreciation	6,060	5,673	387	6.8%
Impairment of goodwill	39,925	-	39,925	>100%
Net non-recurring expense	968	811	157	19.4%
Net exchange gains	1,116	4	1,112	>100%
Adjusted EBITDA	3,319	1,576	1,743	>100%

Adjusted EBITDA amounted to EUR 3,319 thousand in the period under review, an increase of EUR 1,743 thousand compared to the same period of the previous year. The Adjusted EBITDA margin shows a 2.1% margin recovery over the period, from 4.0% in H1 2021 to the current 6.1%, as a direct result of the higher absorption of fixed costs due to the strong revenue growth in the period and a careful cost control policy implemented by management.

Adjustments made to EBITDA, excluding depreciation and amortisation, amounted to EUR 42,009 thousand during the first half of 2022 (EUR 815 thousand during the first half of 2021) and mainly consisted of:

(i) Impairment of goodwill, as a result of the goodwill impairment test, an impairment loss of EUR 39.9 million was recognised in the profit and loss account in the first half of the year; this effect can be attributed to the increase in the discount rate ('Weighted Average Cost of Capital' or 'WACC'), a variable that has a decisive impact on the results of the test. The significant increase in the WACC rate used for the purpose of the impairment test in these half-year consolidated financial statements is mainly attributable to the changes in the market parameters, on which the determination of this rate is based, observed during the last months of the half-year, but is also influenced by the fact that the WACC includes an adjustment factor in order to consider the potential risk of not fully achieving the economic-financial objectives included in the 2022-2025 Business Plan (the 'Plan').

(ii) exchange gains of EUR 1,116 thousand related to the effect of translating trade receivables/payables expressed in foreign currencies at the reporting date, due to currency purchase for transactions in USD recognised in profit

or loss under financial income; although these are not non-recurring income and expense, with this adjustment the Group intends to present the operating performance, net of currency effects.

(iii) non-recurring expense/(income) (EUR 968 thousand); these are income and expense related to non-recurring, non-core events or related to extraordinary transactions.

6.7 Financial income and expense

Net financial expense amounts to EUR 690 thousand (EUR 1,343 thousand in the first half of 2021), as detailed in the table below:

				Changes
(In thousands of Euro)	H1 2022	H1 2021
Other financial income and fair value gains	307	243	64	26.3%
Interest income	1	1	0	42.9%
Total Financial income	308	244	64	26.4%
Commissions and fair value losses	(478)	(957)	479	-50.1%
Interest expense on non-current loans	(441)	(591)	150	-25.2%
Other interest expense	(79)	(39)	(40)	>100%
Total Financial expense	(998)	(1,587)	589	-37.1%
Net Financial expense	(690)	(1,343)	653	-48.6%

The lower net financial expense (EUR 653 thousand) was mainly attributable to the change in the fair value of outstanding warrants, which in 2021 had generated a loss of EUR 757 thousand, while in 2022 it had a positive effect on the income statement of EUR 307 thousand. There was also higher expense in the period under review related to premiums paid on derivative contracts to hedge against the currency risk for the purchase of products denominated in US dollars in the amount of EUR 386 thousand.

Financial expense for the first half of 2022 comes to EUR 998 thousand and mainly refers to:

EUR 478 thousand related to bank fees and premiums for derivative contracts;
EUR 441 thousand relative to interest to banks for the loan stipulated in October 2020 for an original amount of EUR 50,000 thousand (the residual debt at 30 June 2022 is EUR 30,000 thousand);
EUR 79 thousand for other interest expense.

6.8 Exchange gains and losses

(In thousands of Euro)			Changes
	H1 2022	H1 2021	Δ	%
Exchange gains on trade transactions	1,116	4	1,112	99.6%
Exchange gains/(losses) on financial transactions	213	(10)	223	>100%
Net exchange gains/(losses)	1,329	(6)	1,335	>100%

The positive change of EUR 1,335 thousand is mainly due to the trend of the EUR/USD exchange rate and the hedges applied.

6.9 Adjusted EBIT

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

		Changes
(In thousands of Euro)	H1 2022	H1 2021	Δ	%
Operating loss	(44,750)	(4,912)	(39,938)	>100%
PPA amortisation	3,225	3,213	12	0.4%
Impairment of goodwill	39,925	-	39,925	>100%
Non-recurring expense	968	811	157	19.4%
Exchange gains	1,116	4	1,112	>100%
Adjusted EBIT	484	(884)	1,368	>100%

Adjusted EBIT amounted to a positive EUR 484 thousand (a negative EUR 884 thousand in the first half of 2021). The adjustments made to the Group EBIT refer to the factors mentioned in the paragraph on adjusted EBITDA, the amortisation of purchase price allocation of EUR 3,225 thousand.

6.10 Adjusted loss for the period attributable to the owners of the parent

The main data used to calculate the Adjusted loss for the period attributable to the owners of the parent is shown below:

			Changes
(In thousands of Euro)	H1 2022	H1 2021	Δ	%
Loss for the period attributable to the owners of the parent	(43,011)	(3,225)	(39,786)	>100%
Non-recurring expense)	968	811	158	19.4%
PPA amortisation	3,225	3,213	12	0.4%
Impairment of goodwill	39,925	-	39,925	>100%
Fair value gain (loss) on warrants	(307)	757	(1,064)	>100%
Tax effect of the above items	(1,080)	(1,708)	628	-36.8%
Adjusted loss for the period attributable to the owners of the parent	(280)	(152)	(128)	84.2%

The adjusted loss attributable to the owners of the parent for H1 2022 is EUR 280 thousand (a loss of EUR 152 for the first half of 2021).

In addition to the factors mentioned in the paragraph on adjusted EBIT, the adjustments made to this item mainly relate to the change in the fair value of warrants and the tax effects of the items adjusted.

7. Statement of financial position

Statement of financial position

(In thousands of Euro)	Balance at 30 June 2022	Of which related	%	Balance at 31 December 2021	Of which related parties	%
ASSETS		parties
Intangible assets	58,245		23.6%	61,355		21.8%
Goodwill	69,290		28.1%	108,773		38.7%
Property, plant and equipment	7,690		3.1%	7,487		2.7%
Equity investments in associates and other companies	58		0.0%	58		0.0%
Right-of-use assets	4,906		2.0%	1,774		0.6%
Deferred tax assets	5,789		2.3%	4,748		1.7%
Non-current financial assets	-		0.0%	-	-	-
Total non-current assets	145,978		59.2%	184,195		65.5%
Inventories	43,590		17.7%	30,518		10.9%
Trade receivables	44,197	4,198	17.9%	52,117	4,702	18.5%
Current tax assets	990		0.4%	1,214		0.4%
Financial assets	61		0.0%	60		0.0%
Other assets	2,261		0.9%	4,948		1.8%
Cash and cash equivalents	9,651		3.9%	8,138		2.9%
Total current assets	100,750		40.8%	96,995		34.5%
TOTAL ASSETS	246,728		100.0%	281,190		100.0%
Share capital	21,343		8.7%	21,343		7.6%
Other reserves	168,365		68.2%	159,174		56.6%
Retained earnings	15,648		6.3%	28,688		10.2%
Loss for the period/year attributable to the owners of the
parent	(43,011)		-17.4%	(3,846)		-1.4%
Equity attributable to the owners of the parent	162,345		65.8%	205,359		73.0%
Non-controlling interests	-			-		-
Total Equity	162,345		65.8%	205,359		73.0%
LIABILITIES
Bank loans and borrowings and loans and borrowings from other financial backers	20,682		8.4%	25,642		9.1%
Deferred tax liabilities	2,451		1.0%	2,349		0.8%
Employee benefits	551		0.2%	772		0.3%
Provisions for risks and charges	1,415		0.6%	1,616		0.6%
Other financial liabilities	10,114		4.1%	7,494		2.7%
Total non-current liabilities	35,213		14.3%	37,873		13.5%
Bank loans and borrowings and loans and borrowings from
other financial backers	16,824		6.8%	10,129		3.6%
Trade payables	22,680		9.2%	19,825		7.1%
Current tax liabilities	621		0.3%	1,230		0.4%
Provisions for risks and charges	-		0.0%	-		-
Other liabilities	6,737		2.7%	4,489		1.6%
Other financial liabilities	2,308		0.9%	2,285		0.8%
Total current liabilities	49,170		19.9%	37,958		13.5%
TOTAL EQUITY AND LIABILITIES	246,728		100.0%	281,190		100.0%

Financial Position

		Balance at
(In thousands of Euro)	30 June 2022	31 December 2021
Available cash/(Financial liabilities):
Cash	11	26
Bank deposits	9,640	8,112
Cash and cash equivalents	9,651	8,138
Current financial assets	61	60
Current bank loans and borrowings	(16,824)	(10,129)
Other financial liabilities	(2,308)	(2,285)
Current financial indebtedness	(19,071)	(12,354)
Net current financial indebtedness	(9,420)	(4,216)
Non-current bank loans and borrowings	(20,682)	(25,642)
Other financial liabilities	(10,114)	(7,494)
Non-current financial indebtedness	(30,796)	(33,135)
Net financial indebtedness	(40,216)	(37,351)
Other current financial liabilities - warrants	920	1,226
Adjusted net financial indebtedness	(39,296)	(36,125)

The composition of the Group's net working capital and net invested capital at 30 June 2022 and 31 December 2021 is detailed below:

		Balance at
(In thousands of Euro)	30 June 2022	31 December 2021
Inventories	43,590	30,518
Trade receivables	44,197	52,117
Trade payables	(22,680)	(19,825)
Net trade working capital	65,107	62,810
Other working capital items	(4,107)	443
Net working capital	61,000	63,253
Non-current assets	145,978	184,195
Non-current provisions and other liabilities	(4,417)	(4,738)
Net invested capital	202,561	242,710
Net financial indebtedness	40,216	37,351
Equity	162,345	205,359
Total equity and financial liabilities	202,561	242,710

The Group's net trade working capital at 30 June 2022 amounted to EUR 65,107 thousand with an increase of EUR 2,297 thousand compared to 31 December 2021 due to the seasonality of the business. Efficient operational management by the management, however, reduced the percentage of sales for the period to 58.9% from 69.8% at the end of June 2021.

Non-current assets decreased mainly as a result of the following changes: (i) Impairment of goodwill of EUR 39,925, (ii) decrease in intangible assets of about EUR 3,110 thousand mainly due to amortisation related to Purchase Price Allocation, (iii) increase in Usage Rights mainly due to the effect of the accounting of a new lease agreement in accordance with IFRS 16 in the amount of Euro 3,209 thousand (iv) increase in deferred tax assets of EUR 1,041 thousand.

The Group's net invested capital amounted to EUR 202,561 thousand at 30 June 2022, a decrease from the same period of the previous year due to the impairment of goodwill (EUR 242,710 thousand at 31 December 2021). Below is a reconciliation of the net financial indebtedness at 30 June 2022, of EUR 40,216 thousand, and at 31 December 2021, of EUR 37,351 thousand, according to the scheme envisaged by ESMA Guidance 32-382-1138 dated 4 March 2021 and indicated in the Consob Note 5/21 dated 29 April 2021:

	Balance at	Changes
(In thousands of Euro)	30 June 2022	31 December 2021	Δ	%
(A) Cash	9,651	8,138	1,513	18.6%
(B) Other cash and cash equivalents	-	-	-	-
(C) Other current financial assets	61	60	1	1.7%
(D) Cash and cash equivalents (A)+(B)+(C)	9,712	8,198	1,514	18.5%
(E) Current financial liabilities	2,308	2,285	23	1.0%
(F) Current portion of non-current indebtedness	16,824	10,129	6,695	66.1%
(G) Current financial indebtedness (E) + (F)	19,132	12,414	6,718	54.1%
- of which guaranteed	-	-	-	-
- of which not guaranteed	19,132	12,414	6,718	54.1%
(H) Net current financial indebtedness (G) - (D)	9,420	4,216	5,204	123.4%
(I) Non-current financial indebtedness	30,796	33,135	(2,339)	(7.1%)
(J) Debt instruments	-	-	-	-
(K) Trade payables and other current liabilities	-	-	-	-
(L) Non-current financial indebtedness (I)+(J)+(K)	30,796	33,135	(2,339)	(7.1%)
- of which guaranteed	-	-		-
- of which not guaranteed	30,796	33,135	(2,339)	(7.1%)
(M) NET FINANCIAL INDEBTEDNESS (H) + (L)	40,216	37,351	2,865	7.7%
Other financial liabilities - warrants	(920)	(1,226)	306	(25.0%)
Adjusted net financial indebtedness	39,296	36,125	3,171	8.8%

Net financial indebtedness includes, in addition to cash and cash equivalents of EUR 9,712 thousand, non-current bank loans (EUR 30,796 thousand), short-term bank debt (EUR 6,804 thousand), debt related to the valuation of put/call options for the purchase of non-controlling interests (EUR 6,492 thousand), financial liabilities related to warrants (EUR 920 thousand) and lease liabilities in accordance with IFRS 16 (EUR 5,014 thousand).

The increase in adjusted Net Financial indebtedness at 30 June 2022, compared to 31 December 2021, was mainly due to the increase in net trade working capital as a result of the strong increase in sales volumes, the investments envisaged in the development plan, and the payment of dividends in the amount of EUR 1.0 million during the first half of 2022.

The main factors that influenced the Group's cash flow trends in the period considered are summarised below (compared with the same period of last year).

Net cash flows from operating activities

(In thousands of Euro)	H1 2022	H1 2021
Cash flows from operating activities
Loss for the period	(43,011)	(3,225)
Adjustments for:
- Income taxes	(1,100)	(2,916)
- Net accruals and impairment losses	(492)	89
- Losses/(gains) on equity investments	-	(120)
- Financial (income)/expense accrued	643	1,344
- Amortisation, depreciation and impairment of goodwill	46,000	5,673
- Other non-monetary changes (*)	66	(7)
Changes in:
- Inventories	(13,156)	1,018
- Trade receivables	8,156	15,947
- Trade payables	2,855	(2,844)
- Other changes in operating assets and liabilities	5,653	2,288
- Payment of employee benefits and change in provisions	(81)	-
Cash flows from operating activities	5,531	17,247
Taxes paid/offset	(941)	(1,367)
Interest and other net charges paid	(998)	(410)
Cash flows from operating activities	3,592	15,470

(*) In order to provide better comparability, these items for H1 2021 have been reclassified.

The net cash flows generated by operating activities recorded a decrease of EUR 11,878 thousand, mainly due to the dynamics of working capital following the increase in strong sales volumes recorded in the period.

Cash flows used in investing activities

(In thousands of Euro)	Half year ending on
	30 June 2022	30 June 2021
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired and other costs	-	(1,732)
(Purchases)/sale of property, plant and equipment and intangible assets (*)	(2,829)	(1,527)
Cash flows used in investing activities	(2,829)	(3,259)

(*) In order to provide better comparability, these items for H1 2021 have been reclassified.

In the first half of 2022, the investment activity mainly concerned:

investments in intangible assets of about EUR 2,023 thousand (including the effect of converting financial statements carried in foreign currencies), mainly related to the evolution of the main company software and R&D on new products/brands;
investments in plant, machinery and equipment in the amount of about EUR 806 thousand (including the effect of converting financial statements carried in foreign currencies).

Cash flows generated by/(used in) financing activities

(In thousands of Euro)	H1 2022	H1 2021
Cash flows from financing activities
Increase/(decrease) in financial liabilities	1,735	(4,521)
Increase/(decrease) in other financial liabilities (*)	(962)	941
Dividend distribution	(1,012)	-
Payment of transaction costs relating to financial liabilities	48	166
Other changes in equity (*)	355	60
Net cash flows used in financing activities	164	(3,354)

(*) In order to provide better comparability, these items for H1 2021 have been reclassified.

The cash flows used in financing activities in the first half of 2022 mainly reflect:

the payment of the instalment of the non-current bank loan existing with Banco BPM S.p.A. and Intesa Sanpaolo S.p.A for EUR 5,000 thousand, offset by the utilisation of a current loan for temporary needs amounting to EUR 6,716 thousand;
the payment of the 2021 dividend, as resolved by the Shareholders' Meeting in April 2022, equal to EUR 0.05 per eligible share for a total outlay of EUR 1,012 thousand
the change in the item Other financial liabilities is mainly attributable to the change in lease liabilities recognised in accordance with IFRS16 and the change in warrants.

8. Investments and research and development activities

During the first half of 2022 - as in previous reporting periods - the Group carried out constant research and development activities, focusing its efforts on selected projects deemed to be of particular importance:

technological product innovation, with the aim of achieving ecological transition targets (accessories, cases, packaging solutions, etc.);
aesthetic and design innovation of the main product lines;
technological process innovation in the main business areas, including supply chain, information technology and e-commerce, the project of which is developed in-house.

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

Information on transactions with related-party is presented in Note 5 to the Condensed Interim Consolidated Financial Statements.

10. Atypical and/or unusual transactions

During the first half of 2022, there were no atypical and/or unusual transactions, as defined in CONSOB Communication no. DEM/6064293 of 28 July 2006.

11. Share-based payments

Information on share-based payment plans is presented in Note 4.12 to the Condensed Interim Consolidated Financial Statements.

12. Treasury shares and shares of the parent

During the first half of 2022, 632,240 treasury shares were assigned in connection with the distribution of the extraordinary dividend resolved by the shareholders' meeting of 27 April 2022.

Therefore, the number of treasury shares held in the portfolio at 30 June 2022 was 1,004,265 (1,636,505 at 31 December 2021), or 4.6% of the share capital.

13. The main risks and uncertainties to which the Group is exposed

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 management of capital.

The overall responsibility for creating and supervising a Group risk management system lies with the parent's Directors, who are 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 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 activities.

13.1 Risks related to competition and competitiveness

The mobile device (smartphones and tablets) accessories market is characterised by a high level of competitiveness, which could also increase further with 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, often through the on-line channel and with low quality and/or non-certified product offerings.

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 its business and growth prospects as well as on its financial position and performance. Further risks are linked to possible changes in

consumer purchasing behaviour in the light of demographic changes, increasing digitalisation, changing economic conditions and purchasing power. Any misjudgement regarding 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 financial position and performance.

13.2 Seasonal risks

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 far more linear and uniform distribution of overhead costs (personnel, rents and general expenses) throughout the year, is also affected by this seasonality, showing a significantly 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 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 financial position and performance.

13.3 Risks related to changes in 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 financial position and performance.

13.4 Risks related to macroeconomic developments, conflict Russia Ukraine and risks related to the effects of COVID-19

As it operates in several international markets, the Group is affected by changes in the macroeconomic conditions of the markets concerned. In addition to the health emergency - which broke out in the first quarter of 2020 and has not yet been fully resolved on a global level - geopolitical uncertainty has been added as a result of the start of the war in Ukraine, with a consequent increase in unpredictability regarding potential future repercussions on the global economy.

In particular, if there were to be additional waves of COVID-19 infections, the various countries' authorities could reinstate all or part of the restrictive measures, with subsequent negative effects on global economic activities and on the Group's business.

economic effects on global markets, which have been immediately reflected in the rising costs of some energy (gas and oil) and food (wheat) commodities. It should be noted that the Group has no direct or indirect operations in Ukraine and Russia, so the military conflict has had no direct impact on performance and business at present. However, it cannot be excluded that if further deterioration of global macroeconomic conditions were to occur as a result of the worsening and/or enlargement of the conflict, such as a prolonged recession in Europe and/or worldwide, the Group financial position and performance could be adversely impacted.

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

The Group operates in 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 settled in USD, as is the practice of the reference industry. The Group is therefore exposed to currency risk - for the main types of product supplies - almost exclusively in USD. However, there are numerous factors that limit its risk profile, including: i) the high rate of product innovation (about 35% of annual turnover derives from products launched in the year), ii) the possibility to carry out, in a relatively short time (3-6 months), revisions to customer price lists and, lastly, iii) the high contractual flexibility with suppliers in the Far East (with no commitments to purchase minimum quantities at predefined prices for periods exceeding 6 months - with rare exceptions).

The performance of foreign exchange rates applied during the period was as follows:

Currency	Average H1 2022	At 30 June 2022	Average 2021	At 31 December 2021
Euro/USD	1.09	1.04	1.18	1.13

In 2022, the Group used 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 financial position and performance of the Group.

In the last months has seen a gradual generalised increase in prices with world inflation at record levels for the past decades, which has had a direct impact on reducing demand from end consumers. The cost increase was mainly driven by rising energy and transport costs caused by both the still existing Covid-19 restrictions in the Far East and problems in the supply chain. The Group is also suffering from the indirect negative effects of supply chain problems as a result of the semiconductor shortage, with the effect of a reduced availability of smartphones on the market and consequently lower sales of accessories of the latter.

Should the critical situation in the supply chain worsen and the price increase continue for a long time, there could be cases of both non-delivery and/or delayed delivery of products and products whose cost would no longer be

economical, with possible negative effects on the Group's business and its prospects, as well as on its financial position and performance.

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)	Due within 12 months	1 - 5 years	over 5 years	Total
Employee benefits	-	551	-	551
Trade payables	22,680	-	-	22,680
Deferred tax liabilities	-	2,451	-	2,451
Bank loans and borrowings and loans and borrowings from other financial backers	16,824	20,682	-	37,506
Non-current provisions for risks and charges	-	1,415	-	1,415
Other liabilities	6,737	-	-	6,737
Other financial liabilities	2,308	9,950	164	12,422
Current tax liabilities	621	-	-	621
Total	49,170	35,049	164	84,383

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

With regard to potential liquidity risks, the Group continues to show a solid equity and financial structure, considering the limited Leverage Ratio (2.25x), the current cash and cash equivalents (EUR 9,651 thousand), the committed credit facility for M&As involved in the non-current loan contract in place (EUR 20.0 million) and the credit lines made available by various credit institutions and not used (about EUR 14.3 million).

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 long-standing and newly acquired customers, strengthening the policies of preventive action, by acquiring more complete credit information (from different sources) for all major and/or new customers and by progressively increasing the

systematic way in which credit report analyses are conducted, including the assessment of the customer portfolio and the assignment of credit limits.

The schedule of trade receivables at 30 June 2022 is shown below:

(In thousands of Euro)	Not yet due	Due within 6 months	Due in 6 to 12 months	Due after 12 months
Trade receivables (gross of provision for
bad debts)	32,397	4,337	1,254	5,212
Amounts due from associates	1,067	3,129	1	1
Total gross trade receivables	33,464	7,466	1,255	5,213
(Loss allowance)	-	-	-	(3,201)
Total net trade receivables	33,464	7,466	1,255	2,012

The Group recognises a loss allowance considering estimated losses on trade receivables, other assets and noncurrent financial assets. The main components of this allowance are the individual loss allowances on significant exposures and the collective impairment of homogeneous groups of assets for losses already incurred that have not yet been identified; the collective impairment is determined on the basis of the historical data on similar credit losses.

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 interest-rate risk on the syndicated loan, entered into on 26 October 2020 for an original amount of EUR 50 million (reduced to EUR 30.0 million at 30 June 2022), given also the current limited level of net indebtedness; consequently, interest rate fluctuations could lead to an increase in financial expense on the loan, which is currently exclusively at a variable rate.

With reference to the interest-rate risk, a sensitivity analysis was carried out to determine the effect on the consolidated income statement (before the tax effect) that would result from a hypothetical negative change of 100 basis points in the interest rate compared to that actually recorded in the period. The following table shows the results of the analysis.

	Rate increase 1%
(In thousands of Euro)	30 June 2022	30 June 2021
Bank loans and borrowings and loans and borrowings from other financial backers	(177)	(284)

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%).

13.9 Risks related to the administrative liability of legal persons

In 2017 the parent adopted the organisational model and the code of ethics and appointed the supervisory body as provided for by Legislative Decree no. 231 of 8 June 2001, in order to ensure compliance with the set conditions of fairness and transparency in the execution of business activities, to protect its position and image, the expectations of shareholders and the work of employees. The model is a valid tool for raising the awareness of all those who work on behalf of the parent, so that they behave correctly and properly while performing their activities, as well as a means of prevention against the risk of committing crimes.

13.10 Risks associated with climate change

Risk that a catastrophic event resulting from acute weather phenomena (storms, floods, earthquakes, fires or heat waves) and/or chronic weather phenomena, i.e. long-term climatic changes (temperature changes, rising sea levels, reduced water availability, loss of biodiversity, etc.), may damage assets or cause a production stoppage for the Group and/or suppliers, and prevent the Group from carrying out its operations by interrupting the value chain or lead to a slowdown in the supply chain.

The Group also examined the risk associated with Climate Change. At present, no significant elements have been highlighted such as to identify triggers that could generate accounting impacts. In particular, the recoverability of the value of inventories, the potential impact on the residual useful life of assets, following the potential need to replace them in order to comply with new policies or non-compliance with current regulations, and the potential impact on the demand for products were examined without finding any critical issues. Given the ongoing evolution of the subject, the Group will continue and expand its monitoring of such possible risks in the future.

14. Management and coordination

Cellularline S.p.A. is not managed and coordinated by companies or entities and defines its general and operational strategic guidelines independently.

15. Branches

The Company has its registered office in Reggio Emilia, at Via Grigoris Lambrakis n. 1/A and has a branch office in France, based in Paris at 91, Rue Du Faubourg Saint Honoré.

16. Workforce

In 2022, in the belief that people are one of the Group's strategic assets, it was decided to continue to invest in improving people management practices and policies through the implementation and continuous maintenance of HR processes and systems. Moreover, the Group continues to carry out training and development activities for its employees on a regular basis, in the certainty that the professional and working growth of each individual is a prerequisite for continuous improvement in performance.

The work is carried out in full compliance with the rules and regulations in force regarding safety in the workplace. There have been no specific incidents to be mentioned in this report, such as deaths, serious accidents at work or occupational diseases for which the Group has been held liable.

The number of employees at 30 June 2022 was 260, compared to 254 in the previous year.

17. Information on environmental impact

The Group firmly believes in respecting the environment and the ecosystem in which it operates; this is why it carries out its business taking into account the protection of the environment and the need for sustainable use of natural resources, in accordance with the provisions of current environmental legislation, committing itself to act responsibly towards the territory and the community. The Group condemns any type of action or behaviour that

is potentially harmful to the environment. Although it does not have any significant environmental impacts, the Group has adopted specific procedures for the disposal of Waste Electrical and Electronic Equipment (WEEE).

18. Significant events during and after the reporting period

In addition to that mentioned above, the following events took place in the reporting period:

AEO (Authorised Economic Operator) authorisation granted by the Customs and Monopolies Agency (February): Cellularline has obtained the authorisation with the highest degree of reliability (AA) in both customs simplification (AEOC) and security (AEOS), demonstrating the high level of compliance achieved within the supply chain. Since it is valid throughout the European Union, but also recognised in important third countries including the United States, China, Japan and Switzerland, this authorisation will ensure Cellularline an even higher standing at a global level, consolidating the leadership achieved by the Group in the EMEA area and facilitating its expansion into other international markets.
Resignation of a Non -Executive Director and appointment by co-optation of a Director (February): in February 2022, the Non-Executive Director of Cellularline S.p.A. - Stefano Cerrato - resigned. Following his resignation, in February 2022, Davide Danieli - currently Group Chief Corporate & Financial Officer, Investor Relater and Manager in charge of financial reporting as of 21 April 2021 - was co-opted as a nonexecutive Director.
100% stake in the quota capital of Pegaso S.r.l., sole quotaholder of Systema S.r.l. (March): in March, the acquisition was concluded of the remaining 25% of the quota capital of Pegaso S.r.l., the sole quotaholder of Systema, a company operating in the market for mobile phone accessories in the Telco channel. The transaction does not change Systema's contribution to the Cellularline Group's consolidated results because it has always been fully consolidated since it was included in the reporting scope in April 2019.
Cellularline USA Inc. (April): Cellularline S.p.A. has established a new sales entity for the North American and Canadian market.
The Shareholders' Meeting (April) approved all the items on the agenda and, in particular:
- o approval of the Financial Statements at 31 December 2021 and resolved to cover the loss for the year, amounting to EUR 4,862 thousand, through the utilisation of Retained Earnings;
- o approval of the distribution of an extraordinary dividend partly in cash and partly through the assignment of treasury shares held in portfolio, to be paid from available reserves and subject to the increase of the legal reserve up to one-fifth of the share capital in the following manner: i) distributing a portion of the "Retained Earnings" in the amount of EUR 0.05 per ordinary share entitled, and therefore for a maximum of EUR 1,011,584.20 and ii) by means of free assignment to shareholders, as an extraordinary dividend, of a maximum of 632,240 ordinary treasury shares, in the amount of 1 ordinary treasury share for every 32 ordinary shares;
- o approval of the Report on the Remuneration Policy and fees paid: approval of the remuneration and compensation policy pursuant to Art. 123-ter, paragraph 3 ter, of Legislative Decree No. 58/1998;

o authorisation to purchase treasury shares up to a maximum number that, taking into account the ordinary shares of Cellularline S.p.A. from time to time held in portfolio by the Company and its subsidiaries, does not exceed a total of 7.0% of the Company's share capital, for a period not exceeding eighteen months.
Non-binding letter of intent by Esprinet S.p.A.: On 8 May, the Board of Directors of Cellularline S.p.A. took note of the non-binding letter of intent with which Esprinet S.p.A. communicated that it was interested in promoting a voluntary tender offer aimed at delisting the Company, concerning all of the Company's ordinary shares. Subsequently, on 26 May, the Board of Directors resolved to allow Esprinet to start the due diligence activities, limited to selected information with respect to those requested and, in any case, with the exclusion of commercially sensitive information for the Company, in order to allow, as requested in the Expression of Interest, the preliminary analyses for the possible promotion of the offer.

Subsequent events

Publication on July 13 of preliminary figures for the first half of 2022 for Sales Revenue and Net Financial Indebtedness, not subject to full or limited audit.
4 SIDE S.r.l., a company whose quota capital is wholly owned by Esprinet S.p.A., announces on 8 August that it has filed with CONSOB the offer document, intended for publication, relating to the voluntary public tender offer for all the ordinary shares of Cellularline S.p.A..
CONSOB requested on 11 August to make amendments and additions to the Offer Document filed by 4 SIDE S.r.l. by ordering, pursuant to Article 102, paragraph 4 of the TUF, the suspension of the term for the approval of the Offer Document until the completion of the information framework and in any case, for a period not exceeding 15 calendar days from the date of suspension of the aforesaid term.
On 26 August, CONSOB ordered the resumption of the terms of the administrative procedure aimed at approving the Offer Document filed by 4 SIDE S.r.l., whose preliminary terms will expire on 7 September 2022.
On 6 September, issue of CONSOB authorisation for the publication of the Offer Document filed by 4 SIDE S.r.l. relating to the voluntary public tender offer for the entirety of Cellularline S.p.A.'s ordinary shares.
On 8 September, publication of the Offer Document filed by 4 SIDE S.r.l. relating to the voluntary public tender offer for the entirety of Cellularline S.p.A.'s ordinary shares.

19. Business outlook

Based on the performance recorded in the first half of 2022 and the additional benefits expected from the many strategic actions implemented, management remains positive about the continuation of the year expecting to see a consolidation of the growth booked in H1 2022 over 2021, also for the second half of 2022, despite a difficult macroeconomic context.

The management continues to pursue the objectives defined in the strategic development plan based on four main lines:

Brand and products: innovation and expansion of the product range, interpreting market trends to meet the needs of the end consumer;
Core business: confirmation of leadership in the domestic market through the strengthening of partnerships with major retailers and expansion in international markets through the acquisition of new customers and agreements with strategic local distributors;
E-commerce: implementation of both business-to-consumer through Group's proprietary sites and marketplaces - and business-to-business with the strengthening of partnerships with the online sites of the main players in the sector from an omnichannel perspective;
M&A: scouting out potential transactions in channels, products and markets considered strategic, also exploiting the opportunities provided by the current market context.

The main risk factors for future business performance may come from a further worsening of the macroeconomic environment mainly as a result of the generalised increase in prices - primarily energy and transport - and the economic consequences of the conflict between Russia and Ukraine.

Reggio Emilia, 08/09/2022.

Antonio Luigi Tazartes The Chairman of the Board of Directors

___________________

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2022

INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT 30 June 2022

STATEMENT OF FINANCIAL POSITION

(In thousands of Euro)	Notes	Balance at 30 June 2022	Of which Related parties	Balance at 31 December 2021	Of which related parties
ASSETS
Non-current assets
Intangible assets	4.1	58,245		61,355
Goodwill	4.2	69,290		108,773
Property, plant and equipment	4.3	7,690		7,487
Equity investments in associates and other companies		58		58
Right-of-use assets	4.4	4,906		1,774
Deferred tax assets	4.5	5,789		4,748
Financial assets		-		-
Total non-current assets		145,978		184,195
Current assets
Inventories	4.6	43,590		30,518
Trade receivables	4.7	44,197	4,198	52,117	4,702
Current tax assets	4.8	990		1,214
Financial assets	4.9	61		60
Other assets	4.10	2,261		4,948
Cash and cash equivalents	4.11	9,651		8,138
Total current assets		100,750		96,995
TOTAL ASSETS		246,728		281,190
EQUITY AND LIABILITIES
Equity
Share capital	4.12	21,343		21,343
Other reserves	4.12	168,365		159,174
Retained earnings	4.12	15,648		28,688
Loss for the period/year attributable to the owners of the parent		(43,011)		(3,846)
Equity attributable to the owners of the parent		162,345		205,359
Non-controlling interests		-		-
TOTAL EQUITY		162,345		205,359
LIABILITIES
Non-current liabilities
Bank loans and borrowings and loans and borrowings from
other financial backers	4.13	20,682		25,642
Deferred tax liabilities	4.5	2,451		2,349
Employee benefits	4.14	551		772
Provisions for risks and charges	4.15	1,415		1,616
Other financial liabilities	4.13	10,114		7,494
Total non-current liabilities		35,213		37,873
Current liabilities Bank loans and borrowings and loans and borrowings from
other financial backers	4.13	16,824		10,129
Trade payables	4.16	22,680		19,825
Current tax liabilities	4.17	621		1,230
Provisions for risks and charges	4.15	-		-
Other liabilities	4.18	6,737		4,489
Other financial liabilities	4.13	2,308		2,285
Total current liabilities		49,170		37,958
TOTAL LIABILITIES		84,383		75,831
TOTAL EQUITY AND LIABILITIES		246,728		281,190

INCOME STATEMENT

(thousands of Euro)	Notes	Half year ending on 30/06/2022	Of which related parties	Half year ending on 30/06/2021	Of which related parties
Revenue from sales	4.19	54,558	1,996	39,707	1,554
Cost of sales	4.20	(32,885)		(23,753)
Gross operating profit		21,673		15,954
Sales and distribution costs	4.21	(15,001)		(11,375)
General and administrative costs	4.22	(52,224)	(6)	(11,470)	(5)
Other non-operating costs/(income)	4.23	802		1,979
Operating loss		(44,750)		(4,912)
Financial income	4.24	308		244
Financial expenses	4.24	(998)		(1,587)
Exchange gains/(losses)	4.25	1,329		(6)
Gains/(losses) on equity investments		-		120
Pre-tax loss		(44,111)		(6,141)
Current and deferred taxes	4.26	1,100		2,916
Loss for the period before non-controlling interests		(43,011)		(3,225)
Loss for the period attributable to non-controlling interests		-		-
Loss for the period attributable to the owners of the parent		(43,011)		(3,225)
Basic earnings per share (Euro per share)	4.27	(2.11)		(0.16)
Diluted earnings per share (Euro per share)	4.27	(2.11)		(0.16)

STATEMENT OF COMPREHENSIVE INCOME

(thousands of Euro)	Half year ending on 30/06/2022	Half year ending on 30/06/2021
Loss for the period attributable to the owners of the parent	(43,011)	(3,225)
Other components of comprehensive income that will not be reclassified to profit or loss
Actuarial gains on defined benefit plans	194	64
Actuarial gains on provisions for risks	298	10
Gains/(losses) on translation of foreign operations	588	(237)
Income taxes	(137)	(21)
Other comprehensive income/(expense) for the period	943	(184)
Comprehensive expense for the period	(42,068)	(3,409)

STATEMENT OF CASH FLOWS

(thousands of Euro)	Notes	H1Half year ending on 2022	H1 Half year ending on 2021
Loss for the period		(43,011)	(3,225)
Amortisation, depreciation and impairment of goodwill		46,000	5,673
Net impairment losses and accruals		(492)	89
(Gains)/losses on equity investments		-	(120)
Accrued financial expense		643	1,344
Current and deferred taxes		(1,100)	(2,916)
Other non-monetary changes		66	(7)
		2,106	838
(Increase)/decrease in inventories		(13,156)	1,018
Decrease in trade receivables		8,156	15,947
Increase/(decrease) in trade payables		2,855	(2,844)
Increase in other assets and liabilities		5,653	2,288
Payment of employee benefits and change in provisions		(81)	-
Cash flow generated by operating activities		5,531	17,247
Interest paid and other net charges paid		(998)	(410)
Income taxes paid		(941)	(1,367)
Net cash flow generated by operating activities		3,592	15,470
Acquisition of subsidiary, net of cash acquired		-	(1,732)
Purchase of property, plant and equipment and intangible assets		(2,829)	(1,527)
Cash flows used in investing activities		(2,829)	(3,259)
Dividends distributed		(1,012)	-
Other financial assets and liabilities (*)		(962)	941
Other changes in equity		355	60
Increase/(decrease) in bank loans and borrowings and loans and borrowings from other financial backers		1,735	(4,521)
Payment of transaction costs relating to financial liabilities		48	167
Net cash flows generated by (used in) financing activities		164	(3,354)
Increase/(decrease) in cash and cash equivalents		925	8,857
Effect of exchange rate fluctuations (*)		588	(232)
Total cash flows		1,513	8,625
Opening cash and cash equivalents	4.11	8,138	8,629
Closing cash and cash equivalents	4.11	9,651	17,254

(*) In order to provide better comparability, these items for H1 2021 have been reclassified

STATEMENT OF CHANGES IN EQUITY

(thousands of Euro)	Share Capital	Other reserves	Retained earnings/(losses carried forward)	Loss for the period/year	Non controlling interests	Total Equity
Balance at 31 December 2020	21,343	157,761	15,451	13,900	-	208,455
Net result of the period	-	-	-	(3.846)	-	(3.846)
Others comprehensive income	-	705	-	-	-	705
Total Net result of the period	-	705,00	-	(3.846)	-	(3.141)
Allocation of prior year profit	-	663	13,238	(13.900)	-	-
Dividend distribution	-	-	-	-	-	-
Purchase of treasury shares	-	-	-	-	-	-
Other changes	-	45	-	-	-	45
Balance at 31 December 2021	21,343	159,174	28,688	(3.846)	-	205,359
Net result of the period	-	-	-	(43.011)	-	(43.011)
Others comprehensive income	-	943	-	-	-	943
Total Net result of the period	-	943	-	(43.011)	-	(42.068)
Allocation of prior year profit	-	-	(3.846)	3,846	-	-
Dividend distribution	-	5,868	(6.880)	-	-	(1.012)
Other changes	-	2,380	(2.314)	-	-	65
Balance at 30 June 2022	21,343	168,365	15,648	(43,011)	-	162,345

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. Introduction

Since 22 July 2019, the Parent's shares have been listed on Euronext STAR Milan, organised and managed by Borsa Italiana S.p.A..

At the reporting date of the condensed interim consolidated financial statements at 30 June 2022, the shareholders of Cellularline holding more than 5% of the share capital with voting rights are as follows:

Christian Aleotti 8.543%
First Capital S.p.A. 6.599%
Quaero Capital S.A. 6.137%

1.1 Impact of the COVID-19 and the conflict between Russia and Ukraine emergency on the Group's performance and financial position, measures taken, risks and areas of uncertainty

As it operates in several international markets, the Group is affected by changes in the macroeconomic conditions of the markets concerned. In addition to health emergency - which broke out in the first quarter of 2020 and has not yet been fully resolved on a global level - geopolitical uncertainty has been added as a result of the start of the war in Ukraine, with a consequent increase in unpredictability regarding potential future repercussions on the global economy.

The conflict between Russia and Ukraine, which started on 24 February 2022, is having major consequences globally, not only because of the severe humanitarian crisis that has ensued, but also because of the possible economic effects on global markets, which have been immediately reflected in the rising costs of some energy (gas and oil) and food (wheat) commodities. It should be noted that the Group has no direct or indirect operations in Ukraine and Russia, so the military conflict has had no direct impact on performance and business at present. However, it cannot be excluded that if further deterioration of global macroeconomic conditions were to occur as a result of the worsening and/or flooding of the conflict, such as a prolonged recession in Europe and/or worldwide, the Group could be adversely impacted by the relative economic, asset and financial situation.

2. Basis of preparation and main accounting standards

The following are the preparation criteria, main accounting policies and measurement criteria adopted to prepare and draw up the Condensed Interim Consolidated Financial Statements at 30 June 2022 (the "Condensed Interim

Consolidated Financial Statements"). They have been applied consistently for all the years presented in this document, taking into account what is stated in Note 2.5.1, "New accounting standards, amendments and interpretations endorsed by the European Union that became effective as of the financial year beginning 1 January 2022".

2.1 Basis of preparation

These Condensed interim Consolidated 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 2021 ("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 Basis of presentation

The Condensed Interim Consolidated Financial Statements were prepared on a going-concern basis, 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 Condensed Interim Consolidated 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 aggregated. It should also be noted that any differences in some tables are due to rounding values expressed in thousands.

The Condensed Interim Consolidated Financial Statements consist of the following and these notes:

A) Statement of financial position: the statement of 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 reporting date of the Condensed Interim Consolidated Financial Statements.
B) Income statement: the classification of costs in the consolidated income statement is based on their function, showing the gross operating profit/(loss), the net operating profit/(loss) and the pre-tax profit/(loss).
C) Statement of comprehensive income: this statement includes the profit/(loss) for the period and the expense and income recognised directly in equity for transactions other than those carried out with shareholders.
D) Statement of cash flows: the cash flow statement shows cash flows from operating, investing and financing activities. Cash flows from operating activities are represented using the indirect method, through which the profit/(loss) for the period is adjusted by the effects of non-monetary transactions, any

deferral or accrual of previous or future collections or payments and revenue connected with the cash flows deriving from investing or financing activities.

E) Statement of changes in equity: this statement includes, in addition to the result of the 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, it also includes the effects of changes in accounting policies for each item of equity.

F) Notes to the condensed interim consolidated financial statements.

The Condensed Interim Consolidated Financial Statements are presented with comparative figures.

These Condensed Interim Consolidated Financial Statements were authorised for publication by the Board of Directors on 8 September 2022.

2.3 Basis of consolidation and scope of consolidation

Basis of consolidation

The condensed interim consolidated financial statements include the interim financial statements or accounting statements at 30 June 2022 of the subsidiaries included in the scope of consolidation. An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. 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 subsidiaries acquired, including through mergers, or sold during the period are included in the income statement from the effective date of acquisition until the effective date of disposal.

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

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

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity. This interest is determined on the basis of the percentage held in the fair values of the assets and liabilities recognised at the date of the original acquisition and in the changes in equity after that date. Subsequently, the losses attributable to non-controlling interests in excess of their equity are allocated to equity attributable to the owners of the parent, with the exception of cases in which the non-controlling interests have a binding obligation and are able to provide additional investments to cover the losses.

Business combinations

The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is determined by the aggregate acquisition-date fair values of the assets given, liabilities incurred or assumed and equity instruments issued by the Group in exchange for control of the acquiree.

The identifiable assets, liabilities and contingent liabilities of the acquiree that meet the conditions for recognition in accordance with IFRS 3 are recognised at their acquisition-date fair values, with the exception of non-current

assets (or disposal groups), which are classified as held for sale in accordance with IFRS 5. These are recognised and measured at their fair values less costs to sell.

Goodwill arising from the acquisition of control of an investee or a business unit reflects the excess of the acquisition cost (defined as the aggregate considerations transferred in the business combination), plus the fair value of any previously held interests in the acquiree, over the acquisition-date fair values of the acquiree's identifiable assets, liabilities and contingent liabilities.

In an acquisition that does not entail control, goodwill can be determined at the acquisition date either in proportion to the percentage of control acquired or by measuring the fair value of non- controlling interests.

The choice of the measurement method can be made on a case-by-case basis for each transaction.

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 payments subject to conditions or in the determination of the fair values of the acquired assets and assumed liabilities, if goodwill could only be determined provisionally at the acquisition date and if such changes are determined to reflect new information about facts and circumstances existing at the combination date. In the event of the sale of interests in subsidiaries, the residual amount of goodwill attributable to them is included in the determination of the gain or loss on the sale.

In March, the parent finalised the purchase of the remaining 25% of the quota capital of Pegaso S.r.l., a holding company that wholly controls Systema S.r.l., which is active in the market for mobile phone accessories in the Telco channel. The acquisition of the residual share does not change the contribution of the aforementioned which was already accounted for under the full goodwill method.

In April, the Parent incorporated Cellularline USA Inc., a company active in the marketing of Group brand products in North America and Canada.

Scope of consolidation

The Condensed Interim Consolidated Financial Statements at 30 June 2022 include the statement of financial position and income statement figures of Cellularline S.p.A. (Parent) and the operating companies in which the Parent holds, directly or indirectly, an interest of more than 50%, or controls according to the definition in IFRS 10.

Company	Office	Currency	Share/quota Capital	ownership %
				Direct	Indirect
Cellularline S.p.A.	Italy (Reggio Emilia)	Euro	21,343,189	-	-
Cellular Spain S.L.U.	Spain (Madrid)	Euro	3,006	100%	-
Cellular Immobiliare Helvetica S.A.	Switzerland (Lugano)	CHF	100,000	100%	-
Cellular Inmobiliaria S.L.U.	Spain (Madrid)	Euro	3,010	100%	-
Pegaso S.r.l.	Italy (Reggio Emilia)	Euro	70,000	100%	-
Systema S.r.l.	Italy (Reggio Emilia)	Euro	100,000	-	100%
Worldconnect AG	Switzerland (Diepoldsau)	CHF	100,000	80%
Coverlab S.r.l.	Italy (Rimini)	Euro	68,890	55%
Cellularline USA Inc	New York	USD	50,000	100%

The line-by-line method is used for the consolidation of the following companies:

Worldconnect AG and Coverlab S.r.l. are consolidated 100% by virtue of the put/call contracts signed by the parent, which regulate the acquisition of the remaining shares in the subsidiaries. Coverlab S.r.l. has been consolidated since 30 June 2021.

The associate Cellular Swiss S.A. is measured using the equity method, as shown in the table below:

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

2.4 Use of estimates and judgements in the preparation of the Condensed Interim Consolidated Financial Statements

When preparing the Condensed Interim Consolidated 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 revenue recognised in the financial statements.

Estimates and assumptions are based on information known at the date of preparation of the Condensed Interim Consolidated Financial Statements, management's experience and any other elements considered relevant. The final amounts may differ from these estimates.

The main subjective assessments made by management in applying the Group's accounting policies and the main sources of uncertainty in the estimates were the same as those applied for the preparation of the consolidated financial statements at 31 December 2021.

Goodwill

The Group tests goodwill for impairment annually and whenever there is any indication of impairment. For the purposes of impairment testing,verifies the recoverable amount of the cash-generating unit to which the goodwill is allocated annually, or more frequently in the presence of impairment indicators. The recoverable amount is determined as value in use using the discounted cash flow method.

This criterion is based on the general concept that the Enterprise Value of an entity is equal to the present value of the following two elements:

the cash flows it will be able to generate within the forecast period;
the terminal value, i.e. the value of the business as a whole, after the forecast period.

In applying this method, the Group uses various assumptions, including the estimate of future increases in sales, operating costs, the growth rate of terminal values, investments, changes in working capital and the weighted average cost of capital (discount rate).

The performance of the impairment test is characterised by a high degree of judgement with particular reference to the estimation of expected operating cash flows, which are subject to physiological uncertainty profiles, and the financial parameters to be used for discounting these flows.

Changes in the main estimates and assumptions made in the preparation of the Plan, and therefore of the impairment test, may change the value in use and realisable value of the recognised assets.

On 9 March 2022, the Company's Board of Directors approved the 2022-2025 Business Plan, which contains the Group's strategic guidelines and medium- to long-term objectives, which are broken down as follows: (i) Brands and Products; (ii) Italian Market; (iii) International Market Priorities; (iv) Travel Retail and optimisation of other distribution channels; (v) E-commerce; (vi) Organisation, Processes and Digitalisation; (vii) ESG; and (viii) M&A. On 28 July 2022, the Company approved the "forecast" data with reference to 2022, which confirms the expectation of a significant growth in revenue and EBITDA compared to 2021, but are lower than those forecast in the 2022 budget; in general terms, the Company believes that the long-term strategic guidelines of the Plan are confirmed by the current year's performance.

For the purpose of preparing the condensed interim consolidated financial statements atas 30 June 2022, the Company performed an analysis on the possible presence of indicators of goodwill impairment and, as a result of this analysis, deemed it appropriate to perform an impairment test, since firstly, the carrying amount of equity of attributable to the owners of the parent was higher than the value of the Stock Exchange capitalisation as of the same date.

The Group, therefore, with the support of an Independent Advisor (Deloitte & Touch), performed an impairment test, whose criteria were approved by the Board of Directors of the Parent on 28 July 2022 and the results of which were approved on 8 September 2022, in order to identify any impairment losses.

The Company performed an impairment test essentially consistent in its approach to that adopted with reference to the consolidated financial statements at 31 December 2021, and updated all relevant parameters based on information available from external sources, starting in particular with the determination of the discount rate (WACC) and the perpetual growth rate subsequent to the explicit forecast (g-rate).

At the end of the test, an impairment loss on Goodwill of Euro 39.9 million was recognised in the income statement, which is mainly attributable to the effect of the significant increase in the discount rate used for the purposes of the test, which firstly reflects the significant worsening intervened in the first half (and especially during the second quarter) of macro parameters. Refer to note '4.2 Goodwill' for more detailed information.

Customer relationships

The Directors have carried out an analysis to verify the possible need to subject these intangible assets with a defined useful life to an impairment test, considering - as provided for by IAS 36 and specified by the recent rulings of the OIV Independent Body of Evaluation- the possible presence of internal and external indicators of impairment.

Following the formalization of internal analyzes, the Directors did not identify specific impairment indicators relative to these assets. This conclusion confirms the carrying amount of EUR 29.8 million (with a remaining useful life estimated as 9.5 years) of the Cellularline Customer Relationship at 30 June 2022, which also takes into account previous impairment losses of EUR 4.0 million at 31 December 2020 and EUR 7.2 million at 31 December 2021.

Trademarks

Following the formalisation of internal analyses, the Directors did not identify any specific impairment indicators relating to these assets.

Fair value measurement

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

The fair values are divided into various hierarchical levels based on the input data used in the measurement 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 inputs used to measure the fair value of an asset or a liability might be categorised within different levels of the fair value hierarchy, the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level of input that is significant to the entire measurement.

2.5 Main Accounting Policies

The accounting standards adopted to prepare the Condensed Interim Consolidated Financial Statements are compliant with those used to prepare the Cellularline Group Consolidated Financial Statements at 31 December 2021, with the exception of the adoption of new standards, amendments and interpretations, approved by the IASB and endorsed for adoption in Europe, adoption of which is mandatory for accounting periods starting on or after 1 January 2021, listed in the paragraph below, described in paragraph 2.5.1.

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

Monetary items in foreign currency at the reporting date are translated 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 translated using the exchange rate in force at the transaction date. Exchange gains and losses arising from the translation are generally recognised in profit or loss under financial income and expense.

The exchange rates used to translate the financial statements of Cellular Immobiliare Helvetica SA and Worldconnect AG at 30 June 2022 into EUR were as follows:

Average Currency H1 2022		At 30/06/2022
EUR/CHF exchange rate	1,032	0.996

2.5.1 New accounting standards, amendments and interpretations endorsed by the European Union that became effective from 1 January 2022

The accounting standards, amendments and interpretations, in force from 1 January 2022 and endorsed by the European Commission, are set out below:

With Regulation (EU) no. 2021/1080 of 28 June 2021, published in the Official Journal of the European Union on 2 July 2021, the following documents published by the IASB Board on 14 May 2020 were adopted:

Amendments to IFRS 3 Reference to the Conceptual Framework: the amendments update the reference in IFRS 3 to the Conceptual Framework in the revised version, without entailing any changes to the provisions of the standard. With the amendment to IFRS 3, the new definitions of assets and liabilities in the new Conceptual Framework published in March 2018 will have to be used to identify the assets and liabilities of the acquiree, with the exception of liabilities assumed in the acquiree, which after the acquisition date are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets or IFRIC 21 Taxes;
Amendments to IAS 16 Property, plant and equipment: proceeds before intended use: the IASB Board has clarified that the proceeds from the sale of goods produced by an asset during the period prior to the date on which the asset is in the location and condition necessary for it to be capable of operating in the manner intended by management must be recognised in profit/(loss) for the period. As a result of the above amendment, it will no longer be permitted to recognise as a direct reduction of the cost of the asset income from the sale of goods produced before the asset is available for use, for example, from the sale of samples produced during the testing phase of the proper functioning of the asset;
Amendments to IAS 37 Onerous Contracts Cost of Fulfilling a Contract: the IASB Board clarified that the costs necessary for fulfilling a contract include all the costs directly related to the contract and therefore include
- incremental costs, i.e., costs that would not have been incurred in the absence of the contract (e.g. raw materials, direct labour costs, etc.)
- a portion of other costs that, although not incremental, are directly related to the contract (e.g. portion of depreciation of assets used to perform the contract).

The IASB Board, moreover, confirmed that, before recognising a provision for onerous contract, the entity must recognise any impairment losses on non-current assets and clarified that impairment losses must be determined with reference not only to assets fully dedicated to the contract, but also to other assets that are partially used to fulfil the contract;

• Improvements to IFRS - 2018-2020 cycle (Amendments to IFRS 1, IFRS 9 and IAS 41): the Improvements to IFRS Standards are the result of the annual improvement process aimed at resolving non-urgent issues related to inconsistencies or unclear terminology identified in the International Financial

Reporting Standards. It should be noted that the document "Improvements to IFRS - 2018-2020 cycle" also includes an amendment to IFRS 16 that is not subject to endorsement by the European Union as it relates to an illustrative example that is not an integral part of IFRS 16.

These amendments, which were endorsed by the European Union on 28 June 2021 (EU Regulation no. 2021/1080), apply to annual periods beginning on or after 1 January 2022 and are not expected to have a material impact on the Group's financial statements.

The following is a list of documents applicable beginning with the financial statements for annual periods beginning on or after 1 January 2022 described above:

Document title	Issue date	Date of entry into force	Date of EU endorsement regulation and publication date
Property, plant and equipment - Proceeds before intended use (Amendments to IAS 16)	14 May 2020	1 Jan. 2022	28 June 2021 (EU) 2021/1080 2 July 2021
Onerous contracts - Cost of fulfilling a contract (Amendments to IAS 37)	14 May 2020	1 Jan. 2022	28 June 2021 (EU) 2021/1080 2 July 2021
Reference to the Conceptual Framework (Amendments to IFRS 3)	14 May 2020	1 Jan. 2022	28 June 2021 (EU) 2021/1080 2 July 2021
Improvements to IFRS Standards (2018-2020 cycle) [Amendments to IFRS 1, IFRS 9, IFRS 16 (*), and IAS 41]	14 May 2020	1 Jan. 2022	28 June 2021 (EU) 2021/1080 2 July 2021

(*) The amendment to IFRS 16 has not been endorsed by the European Union because the amendment refers to an illustrative example that is not an

integral part of the Standard.

IFRS accounting standards, amendments and interpretations not yet endorsed by the European Union

The following documents will only become applicable after EU endorsement:

Document title	Issue date	Date of entry into force	Date of EU endorsement regulation and publication date
IFRS 17 Insurance Contracts (including amendments published 25 June 2020)	18 May 2017 25 June 2020	1 Jan. 2023	19 Nov. 2021 (EU) 2021/2036 23 Nov. 2021
Classification of liabilities as current or non-current (amendments to IAS 1) + Deferral effective date (*)	23 Jan. 2020 15 July 2020	1 Jan. 2023	TBD
Disclosure of accounting policies (Amendments to IAS 1 and IFRS Practice Statement 2)	12 Feb. 2021	1 Jan. 2023	TBD
Definition of accounting estimates (Amendments to IAS 8)	12 Feb. 2021	1 Jan. 2023	TBD
Deferred tax related to assets and liabilities arising from a single transaction (Amendments to IAS 12)	7 May 2021	1 Jan. 2023	11 Aug. 2022 (EU) 2022/1392 12 Aug. 2022
Initial application of IFRS 17 and IFRS 9 - Comparative information (Amendment to IFRS 17)	9 Dec. 2021	1 Jan. 2023	TBD

(*) A project is underway by the IASB Board to modify the requirements of the document published in 2020 and to postpone its entry into force to 1 January 2024. The Exposure Draft was released on 19 November 2021.

Thisthese condensed interim consolidated financial statements has been prepared using the same accounting standards applied by the Company for the preparation of the Consolidated Financial Statements at 31 December 2021.

2.6 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 has a uniform distribution over the year. As a result, operating margins are also affected by this seasonal nature.

The trend in revenue 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; in particular, given the dynamics observed in the prices of goods transport, it was necessary to favour cheaper, but slower means of transport (shipping), which led to an anticipation of inventories.

Therefore, the analysis of interim results and financial position 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. Segment reporting

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

The Group's activities develop through one operating segment, which can be divided into three main product lines:

Red line (accessories for multimedia devices);
Black line (accessories for motorcycles and bicycles);
Blue line (third party products marketed under distribution agreements).

4. Notes to the individual condensed interim consolidated financial statements captions

4.1 Intangible assets

The specific table below shows changes in this item indicating the historical cost, accumulated amortisation, changes in the year and the closing balance of each asset. Amortisation was calculated using the rates that reflect the assets' residual useful lives.

The change in intangible assets, broken down by category at 31 December 2021 and 30 June 2022, is shown below:

						Excha
(In thousands of Euro)	31 December 2021	Increases	(Decreases/ Imp. losses)	Reclassific ations	(Amortisation)	nge differe nce	30 June 2022
Development costs	1,080	538	-	-	(575)	12	1,055
Industrial patents and intellectual property rights	4,526	554	-	239	(799)	117	4,637
Concessions, licenses, trademarks and similar rights	19,085	16	-	-	(758)	102	18,445
Customer relationships	36,233	-	-	-	(2,560)	111	33,784
Assets under development and payments on account	431	140	(8)	(239)	-	-	324
Total intangible assets	61,355	1,248	(8)	-	(4,692)	342	58,245

With reference to the six-month period ended 30 June 2022, it should be noted that the Group has made investments for EUR 1,248 thousand.

In particular, investments are mainly attributable to:

• industrial patents and intellectual property rights, amounting to EUR 554 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 three years. The investments are mainly related to innovations in SAP management, on business inteelligeence systems and further innovations/IT projects, aimed at increasingly effective and efficient information tools to support the organisational structure of the Group;

• development costs of EUR 538 thousand; this item mainly includes the costs incurred for investments in specific product innovation projects. These are considered to generate long-term benefits, as they relate to projects under development, whose products are clearly identified, are intended for a market with sufficient profit margins to cover the amortisation of capitalised costs, which is normally two years.

As already described previously, from the internal analysis carried out, the Directors have not identified specific impairment indicators relating to the Customer list and Brands.

4.1.1 Brand impairment test

As already described, from the internal analyzes carried out, the Directors did not identify specific impairment indicators relating to Customer Relationships and Brands.

4.2 Goodwill

The details of Goodwill at 30 June 2022 and 31 December 2021 are shown below:

(In thousands of Euro)
	30 June 2022	31 December 2021
Goodwill	69,290	108,773
Total Goodwill	69,290	108,773

The changes in Goodwill from 31 December 2021 to 30 June 2022 are shown below:

(In thousands of Euro)	Goodwill
Balance at 31 December 2021	108,773
Acquisitions	-
Increases	-
Exchange difference	442
(Impairment)	(39,925)
Balance at 30 June 2022	69,290

4.2.1 Impairment test of goodwill

At 30 June 2022, goodwill recorded in the consolidated financial statements amounted to Euro 69,290 thousand and was allocated to the only cash generating unit (hereinafter also referred to as the "CGU"), which coincides with the entire Cellularline Group.

Based on the above considerations, the Group, following an analysis of impairment indicators, deemed it appropriate to carry out the impairment test on Goodwill also at the time of the condensed interim consolidated financial statements at 30 June 2022 given that, in particular with reference to external information sources, the equity attributable to the owners of the parent is higher than the stock market capitalisation value at that same date.

In accordance with the applicable standard (IAS 36), to test goodwill for impairment at 30 June 2022, the Directors

carried out a specific impairment test, with the support of an independent advisor.

In particular, the impairment test was conducted with reference to the entire Group, which represents the Cash Generating Unit to which the goodwill was allocated, based on the economic-financial forecasts based on the 2022- 2025 Business Plan approved on 9 March 2022, but also taking into account the "forecast" data for 2022 approved on 28 July 2022 as described below, and using the Discounted Cash Flow method.

The discount rate used was the weighted average cost of capital ("Weighted Average Cost of Capital" or "WACC") of approximately 10.4% (7.7% at 31 December 2021) and an estimated perpetually sustainable growth rate ("g") of 1.85% determined consistently with long-term inflation expectations in the Eurozone (source:. International Monetary Fund, April 2022), representative of the geographical market areas in which the Group operates. The WACC is the average of the cost of equity and the cost of debt capital weighted according to financial structure of comparable companies. It should be noted that the estimates and data relating to the performance and financial forecasts to which the above parameters are applied are determined by Management on the basis of past experience and expectations of developments in the markets in which the Group operates.

The significant increase in the WACC rate used for the purpose of impairment testing in these condensed interim consolidated financial statements is mainly attributable to the changes in market parameters, on which the determination of this rate is based, observed during the last few months of the reporting period, but is also influenced by the fact that the WACC includes a correction factor of 0,83%, determined on the assumption that the performance lag expected for 2022 from the most recent forecasts for the current year remains constant in proportion in the subsequent explicit forecast years and in the terminal flow; this factor takes into account, precisely, the EBITDA variances between the "forecast" data and the 2022 budget and the continuing uncertainty related to the performance of the economic framework as a whole. Therefore, this component, although reflected in the discount rate and not in the cash flows, originates from simulations carried out on the assumption that the Plan's objectives will not be fully achieved, given the persistence of a context of uncertainty.

The impairment test resulted in an impairment loss on goodwill of EUR 39.9 million.

The analyses conducted led to an estimated recoverable amount, in the form of Enterprise Value, of approximately EUR 202.6 million, which corresponds to an Equity Value of approximately EUR 162.3 million.

The results obtained were subjected to a sensitivity analysis considering that it is reasonably possible that a change in the assumptions underlying the test could significantly alter the results. This analysis showed that alternatively (i) a further 5% reduction in EBITDA, with respect to what has already been reflected in WACC through the aforementioned correction factor, leads to a higher impairment loss on Goodwill of EUR 12.7 million, (ii) an increase in WACC of +1% leads to a higher impairment loss on Goodwill of EUR 22.5 million, and (iii) a zero growth rate (g-rate) leads to a higher impairment loss on Goodwill of EUR 21.3 million.

For more details on the methodology followed by the group in estimating the recoverable amount of Goodwill, please refer to the 2021 Annual Report.

4.3 Property, plant and equipment

The change to Property, plant and equipment, broken down by category at 31 December 2021 and 30 June 2022, is shown below:

(In thousands of Euro)	31 December 2021	Increases	(Depreciati on)	(Decreases/Imp. losses)	Exchang e differenc e	Reclassif ications	Use of provisi on	30 June 2022
Land and buildings	5,051	1	(95)	-	42	-	-	4,999
Plants and machinery Industrial and	308	84	(60)	-	1	48	-	381
commercial equipment Assets under construction and	1,959	648	(446)	(118)	19	6	88	2,156
payments on account	169	39	-	-	-	(54)	-	154
Total property, plant and equipment	7,487	772	(601)	(118)	62	-	88	7,690

With reference to the six-month period ended 30 June 2022, the Group has made investments, net of decreases in the category "Assets under construction", for EUR 772 thousand, mainly related to industrial and commercial equipment: in particular, a Photovoltaic Plant was installed and purchases of plotters given on free loan to customer investments have been made in the IT infrastructure.

4.4 Right-of-use assets

This item, amounting to EUR 4,906 thousand (EUR 1,774 thousand at 31 December 2021), refers exclusively to the recognition of rights of use following the initial application of IFRS 16 - Leases.

The changes in the year were as follows:

(In thousands of Euro)	Right-of-use assets
Balance at 31 December 2021	1,774
Increases	3,920
Exchange difference	6
Decreases	(13)
(Depreciation)	(781)
Balance at 30 June 2022	4,906

The increases recognised in the period, equal to EUR 3,920 thousand, mainly refer to the stipulation of the new contract with Transmec, relative to the Campogalliano warehouse and certain contracts to lease cars and commercial vehicles.

4.5 Deferred tax assets and liabilities

The change in the item Deferred tax assets and in the item Deferred tax liabilities broken down for the period from 31 December 2021 to 30 June 2022 is shown below.

Deferred tax assets

(In thousands of Euro)
Balance at 31 December 2021	4,748
Accruals/(releases) in profit or loss	1,094
Accruals/(releases) in comprehensive income	(53)
Balance at 30 June 2022	5,789

The balance at 30 June 2022, amounting to EUR 5,789 thousand, comprises deferred tax assets originating mainly in the parent from accruals to taxed provisions, temporarily non-deductible amortisation/depreciation and the impact of the application of IFRS, though not for taxation purposes and the period loss.

In particular, IRES and IRAP deferred tax assets calculated on the amortisation of the Customer Relationships and Cellularline and Interphone brands and on the impairment loss resulting from the impairment test on the Customer Relationships of 2021 amount to a total of EUR 3,899 thousand.

The change is mainly attributable to deferred taxes calculated on losses recognised in the period, in the amount of EUR 454 thousand, and temporarily non-deductible amortisation/depreciation, in the amount of EUR 632 thousand.

The following aspects were 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 their potential recoverability over a period of three years;
the Group's forecast 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 recognised deferred tax assets with reasonable certainty.

Deferred tax liabilities

(In thousands of Euro)
Balance at 31 December 2021	2,349
Accruals/(releases) in profit or loss Accruals/(Releases) to the Statement of Comprehensive Income (Gain on	(11)
translation of financial statements of foreign companies)	30
Accruals/(releases) in comprehensive income (income tax)	83
Balance at 30 June 2022	2,451

Deferred tax liabilities are primarily attributable to the deferred taxation in connection with the fair value of the

warrant and the purchase price allocation of Worldconnect and Systema.

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

4.6 Inventories

Inventories at 30 June 2022 amounted to EUR 43,590 thousand, net of the allowance for inventory write-down of EUR 1,526 thousand. Inventories include those at the Group's warehouse and goods in transit, for which the Group has already acquired ownership, for EUR 7,096 thousand (EUR 3,493 thousand at 31 December 2021). Inventories consist mainly of finished products; advances also include advances for the purchase of finished products.

The increase compared to 31 December 2021 is attributable to the seasonality of the business and changed product procurement methods, which led to an anticipation of inventories in order to reduce transport costs. Inventories are made up as follows:

(In thousands of Euro)
	30 June 2022	31 December 2021
Finished products and goods	34,726	26,715
Goods in transit	7,096	3,493
Advances	3,294	1,752
Gross inventories	45,116	31,960
(Allowance for inventory write-down)	(1,526)	(1,442)
Total Inventories	43,590	30,518

Changes in allowance for inventory write-down between 31 December 2021 and 30 June 2022 are shown below:

(In thousands of Euro)	Allowance for inventory write-down
Balance at 31 December 2021	(1,442)
(Accruals)	(1,275)
Releases to profit or loss	-
Exchange difference	(9)
Utilisations	1,200
Balance at 30 June 2022	(1,526)

During the period, the Group, following an analysis of slow-moving products, set aside Euro 1,275 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 amount.

The utilisation of the provisions of EUR 1,200 thousand refers to part of the scrapping during the first half of 2022.

4.7 Trade receivables

Trade receivables at 30 June 2022 and 31 December 2021 are shown in detail below:

(In thousands of Euro)

	30 June 2022	31 December 2021
Trade receivables from third parties	43,200	50,851
Trade receivables from related parties	4,198	4,702
Gross trade receivables	47,398	55,553
(Loss allowance)	(3,201)	(3,436)
Total trade receivables	44,197	52,117

The amount of receivables decreased by EUR 7,920 thousand compared to the previous financial year; the decrease is mainly due to a seasonal phenomenon of the business.

Changes in the loss allowance at 30 June 2022 are shown below:

(In thousands of Euro)	Loss allowance
Balance at 31 December 2021	(3,436)
(Accruals)	(122)
Releases to profit or loss	-
Exchange difference	(2)
Utilisations	359
Balance at 30 June 2022	(3,201)

Impaired assets refer mainly to disputed amounts or customers subject to bankruptcy proceedings. The utilisations reflect amounts that, based on certain, precise information or pending bankruptcy procedures were impaired in full.

Credit risk is the exposure to potential losses arising from non-performance of the obligations taken on by the counterparty. The Group has credit control processes in place that include customer creditworthiness analyses and credit exposure controls based on reports with a breakdown of due dates and average collection times.

The change in the loss allowance, following the accrual of the period, is the result of an analytical assessment of non-performing assets and assets that have been proven to be of uncertain recoverability as well as a general assessment based on the asset's historical credit loss.

The carrying amounts of trade receivables are deemed to approximate their fair value.

4.8 Current tax assets

The details of the item Current tax assets at 30 June 2022 and 31 December 2021 are shown below:

(In thousands of Euro)		Balance at
	30 June 2022	31 December 2021
Tax asset of prior years	663	1,214
Credit for tax advances	327	-
Total Current tax assets	990	1,214

Current tax assets mainly include: (i) tax advances in the amount of EUR 327 thousand, (ii) tax assets for previous years in the amount of EUR 548 thousand, and (iii) taxes requested for refund in the amount of EUR 115 thousand.

4.9 Financial assets

Financial assets at 30 June 2022 amounted to EUR 61 thousand (EUR 60 thousand at 31 December 2021) and mainly refer to guarantee deposits.

4.10 Other assets

Other assets at 30 June 2022 come to EUR 2,261 thousand (EUR 4,948 thousand at 31 December 2021) and mainly include the advance payment of contributions to customers following the signing of commercial contracts for approximately EUR 1,671 thousand and VAT credits for the period of EUR 356 thousand.

4.11 Cash and cash equivalents

The breakdown of cash and cash equivalents at 30 June 2022 and 31 December 2021 is shown below:

(In thousands of Euro)
	30 June 2022	31 December 2021
Bank accounts	9,640	8,112
Cash on hand	11	26
Total Cash and cash equivalents	9,651	8,138

Cash and cash equivalents amount to EUR 9,651 thousand at 30 June 2022 (EUR 8,138 thousand at 31 December 2021). The item consists of cash on hand, securities and demand deposits or short-term deposits with banks that are currently available and readily usable.

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

4.12 Equity

Equity was EUR 162,345 thousand (EUR 205,359 thousand at 31 December 2021), having decreased during the period mainly as a result of the loss for the period.

Share capital

The share capital at 30 June 2022 amounts to EUR 21,343, divided into 21,868,189 ordinary shares.

There are also 6,130,954 warrants outstanding.

Since 22 July 2019, the Parent's Parent shares have been listed on Euronext STAR Milan, organised and managed by Borsa Italiana S.p.A..

Other reserves

At 30 June 2022, other reserves amount to EUR 168,365 thousand (EUR 159,174 thousand at 31 December 2021) and were divided as follows:

Share premium reserve, which amounts to EUR 140,424 thousand;
Other reserves for a net amount of Euro 37,262 thousand deriving mainly from the allocation of the Purchase Price Allocation;
Negative reserve for treasury shares in portfolio in the amount of EUR 9,321 thousand (at as 31 December 2021, it was EUR 15,189 thousand); the decrease for the period was due to the resolution of an extraordinary dividend by the shareholders' meeting of 27 April 2022, through which 632,240 treasury shares were assigned.

Retained earnings

At 30 June 2022, retained earnings from consolidation amounted to EUR 15,648 thousand.

Loss for the period attributable to the owners of the parent

The loss attributable to the owners of the parent for the period ended 30 June 2022 came to EUR 43,011 thousand.

Share-based payment plans

In 2021, the Group approved a Stock Grant Plan, which envisages the award of rights to certain key managers to receive Company shares free of charge.

The free award of such rights to receive shares comes under the scope of the "Cellularline S.p.A. 2021-2023 Incentive Plan", submitted for approval by the ordinary shareholders' meeting on 28 April 2021.

The following table summarises the main conditions of the stock grant plan:

Date of assignment of the 1st cycle	Maximum number of instruments	Vesting conditions	Contractual duration of options
09 June 2021	90,000 *	70% Relative Total Shareholder Return 30% Consolidated Adjusted EBITDA	Three years

(*) The number of instruments reported refers to the first tranche of awards of the three-year cycle, of which 55,000 assigned to CEOs and key managers At the date of this Report, two assignment cycles have been activated

The plan envisages three cycles of annual awards of rights to Beneficiaries (2021, 2022 and 2023), each of which with a three-year performance period and a two-year lock-up on the shares assigned by virtue of the rights awarded for each cycle, where conditions are met and in accordance with the terms and conditions set forth in the Plan and its Regulation. The rights assigned to the beneficiaries will accrue, and accordingly give entitlement to their holders to receive Company shares, according to the degree to which measurable multi-year performance objectives, predetermined by the Company, are achieved. These performance objectives contribute with a different percentage weighting towards the accrual of the rights and attribution of the shares, all as indicated:

(i) the Relative Total Shareholder Return (or Relative TSR) is the share performance objective and contributes towards the incentive variable remuneration envisaged by the plan (in the form of shares), weighing for 70%, (ii) the Consolidated Three-Year Adjusted EBITDA is the corporate performance objective and contributes towards the incentive variable remuneration envisaged by the plan (in the form of shares), weighing for 30%. At 30 June 2022, in accordance with IFRS 2, the measurement regarded the total fair value of the approved plan. The "market based" component (Relative Total Shareholder Return) has been estimated using a stochastic simulation with the Monte Carlo Method, which, on the basis of suitable hypotheses, made it possible to define a

The "non-market based" component has been measured at the reporting date to take into account expectations regarding the number of rights that may be accrued (in the specific case, considering the performance of EBITDA with respect to the plan targets).

4.13 Bank loans and borrowings banks and other financial liabilities (current and non-current)

significant number of alternative scenarios over the time frame considered.

The details of the item Bank loans and borrowings banks and other current and non-current financial liabilities at 30 June 2022 are shown below:

(In thousands of Euro)
	30 June 2022	31 December 2021
Current bank loans and borrowings and loans and borrowings from other financial backers	16,824	10,129
Non-current bank loans and borrowings and loans and borrowings from other financial backers	20,682	25,642
Total bank loans and borrowings and loans and borrowings from other financial backers	37,506	35,771
Other current financial liabilities	2,308	2,285
Other non-current financial liabilities	10,114	7,493
Total other financial liabilities	12,422	9,778
Total financial liabilities	49,928	45,549

At 30 June 2022, Bank loans and borrowings and loans and borrowings from other financial backers come to EUR 37,506 thousand (EUR 35,771 thousand at 31 December 2021) and mainly include:

the bank loan of the Parent, stipulated in October 2020 in the re-financing transaction for EUR 30,000 thousand, net of the amortised cost.
the Parent's short-term hot money bank loan in the amount of EUR 6,720 thousand;
the loan stipulated by the subsidiary Worldconnect, in connection with the Covid-19 emergency for EUR 1,004 thousand.

The bank loan of the Parent at 30 June 2022, gross of bank fees, is shown below:

(In thousands of Euro)	Inception	Expiry	Original amount	Balance at 30 June 2022
				Outstanding debt	current portion	non-current portion
Banco BPM S.p.A.	26 October 2020	20 June 2025	25,000	15,000	5,000	10,000
Intesa Sanpaolo S.p.A.	26 October 2020	20 June 2025	25,000	15,000	5,000	10,000
Bank loans and borrowings and loans and borrowings from other financial backers			50,000	30,000	10,000	20,000

The bank loan payable to the above institutions is subject to economic and financial covenants. These covenants have been complied with at 30 June 2022.

The loan is measured at amortised cost in accordance with IFRS 9 and therefore the carrying amount of EUR 29,782 thousand at 30 June is reduced by transaction costs.

The original principal amount of the loan was EUR 50 million, with repayment in six-monthly instalments of EUR 5,000 thousand each, with final repayment on 20 June 2025. The loan is subject to a financial covenant (leverage ratio) which has always been complied with at the reporting date. Interest on the loan accrues at a variable rate, calculated considering the Euribor plus a contractually agreed spread (for the instalment from 20 June 2022 to 20 December 2022, the spread applied is 2.05%);

A breakdown of the financial liabilities is shown below based on their maturity:

(In thousands of Euro)
	30 June 2022	31 December 2021
Within 1 year	19,132	12,639
From 1 to 5 years	30,632	32,845
Over 5 years	164	65
Total financial liabilities	49,928	45,549

For details regarding the item Other financial liabilities (current and non-current), please refer to Note 4.18. Below is a reconciliation of the net financial indebtedness at 30 June 2022, of EUR 40,216 thousand, and at 31 December 2021, of EUR 37,351 thousand, according to the scheme envisaged by ESMA Guidance 32-382-1138 dated 4 March 2021 and indicated in the Consob Note 5/21 dated 29 April 2021:

			Changes
(In thousands of Euro)	30 June 2022	31 December 2021	Δ	%
(A) Cash	9,651	8,138	1,513	18.6%
(B) Other cash and cash equivalents	-	-	-	-
(C) Other current financial assets	61	60	1	3.3%
(D) Cash and cash equivalents (A)+(B)+(C)	9,712	8,198	1,514	18.5%
(E) Current financial liabilities	2,308	2,285	23	1.0%
(F) Current portion of non-current indebtedness	16,824	10,129	6,695	66.1%
(G) Current financial indebtedness (E) + (F)	19,132	12,414	6,718	54.1%
- of which guaranteed	-	-	-	-
- of which not guaranteed	19,132	12,414	6,718	54.1%
(H) Net current financial indebtedness (G) - (D)	9,420	4,216	5,204	123.4%
(I) Non-current financial indebtedness	30,796	33,135	(2,339)	(7.1%)
(J) Debt instruments	-	-	-	-
(K) Trade payables and other current liabilities	-	-	-	-
(L) Non-current financial indebtedness (I)+(J)+(K)	30,796	33,135	(2,339)	(7.1%)
- of which guaranteed	-	-		-
- of which not guaranteed	30,796	33,135	(2,339)	(7.1%)
(M) NET FINANCIAL INDEBTEDNESS (H) + (L)	40,216	37,351	2,865	7.7%

"Other current financial assets" mainly include the fair value at the reporting date of the exchange rate derivatives subscribed by the Group for its core business; these derivatives do not meet the requirements of hedge accounting.

4.14 Employee benefits

At 30 June 2022, this item, amounting to EUR 551 thousand (EUR 772 thousand at 31 December 2021), includes the actuarial measurement of the Parent and the subsidiary Systema's post-employment benefits (TFR); these measurements were carried out using the "Project Unit Credit" method as provided for by IAS 19.

The change in the period is attributable to staff turnover and actuarial valuations.

The actuarial model is based on:

discount rate of 3.22%, which was derived from the Iboxx Corporate AA index with a duration of 10+;
annual inflation rate of 2.10%.
annual rate of increase in the post-employment benefits of 3.075%, which is equal to 75% of inflation plus 1.5 percentage points.

In addition, sensitivity analyses were carried out for each actuarial assumption, considering the effects that would have occurred as a result of reasonably possible changes in the actuarial assumptions at the reporting date; the results of these analyses do not give rise to significant effects.

4.15 Provisions for risks and charges

Changes in the Provisions for risks and charges between 31 December 2021 and 30 June 2022 are shown below:

(In thousands of Euro)
	Provision for agents' leaving indemnities (FISC)	Total
Balance at 31 December 2021	1,616	1,616
- of which current portion	-	-
- of which non-current portion	1,616	1,616
Provisions	90	90
(Uses/Releases)	(291)	(291)
Balance at 30 June 2022	1,415	1,415
- of which current portion	-	-
- of which non-current portion	1,415	1,415

The provision for agents' leaving indemnities (FISC) refers to the probable amount to be paid by the Parent and the subsidiary Systema to agents for the termination of their agency contracts. The actuarial measurement, consistent with IAS 37, was carried out by quantifying future payments through the projection of the indemnity accrued at the reporting date by the agents operating until the presumed (random) termination of the contractual relationship. For actuarial measurements, 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 at 0.98%.

4.16 Trade payables

The breakdown of Trade payables at 30 June 2022 and 31 December 2021 is shown below:

(In thousands of Euro)
	30 June 2022	31 December 2021
Third parties	22,680	19,825
Related parties	-	-
Total trade payables	22,680	19,825

At 30 June 2022, trade payables, all due within the year within normal payment terms, amounted to EUR 22,680 thousand (EUR 19,825 thousand at 31 December 2021) and refer to the acquisition of goods and services.

4.17 Tax liabilities

At 30 June 2022, the item comes to EUR 621 thousand (EUR 1,230 thousand at 31 December 2021) and mainly includes the last instalment on the substitute tax on the realignment of statutory and tax values of the Cellularline and Interphone trademarks and the customer relationships for EUR 611 thousand, payment of which is expected by June 2023.

4.18 Other liabilities

The breakdown of Other liabilities at 30 June 2022 and 31 December 2021 is shown below:

(In thousands of Euro)

	30 June 2022	31 December 2021
Employees	2,610	1,849
Tax liabilities	2,118	1,031
Social security liabilities	876	949
Other	1,133	660
Total Other liabilities	6,737	4,489

At 30 June 2022, the item amounts to EUR 6,737 thousand (EUR 4,489 thousand at 31 December 2021) and mainly consists of:

EUR 2,610 thousand relating to employees for amounts to be paid (13th month's salary and bonuses);
tax liabilities of EUR 2,118 thousand (withholdings VAT);
Euro 876 thousand to social security institutions for contributions to be paid relating to personnel;
Euro 1,133 thousand for other (advances to customers and accrued expenses and deferred income).

4.19 Revenue

In the first half of 2022, revenue from sales amounts to EUR 54,558 thousand (EUR 39,707 thousand in the first half of 2021). As mentioned earlier, the Group's business operates through one operating segment which can be divided into three main product lines:

Red line (accessories for multimedia devices);
Black line (accessories for motorcycles and bicycles);
Blue line (third party products marketed under distribution agreements).

The following tables show revenue, broken down by product line and geographical segment.

Revenue from sales by product line

					Change
(In thousands of Euro)	H1 2022	% of revenue	H1 2021	% of revenue	Δ	%
Red – Italy	18,013	33.0%	16,019	40.3%	1,994	12.4%
Red – International	25,079	46.0%	15,176	38.2%	9,903	65.3%
Revenues from Sales - Red	43,092	79.0%	31,195	78.6%	11,897	38.1%
Black – Italy	2,245	4.1%	2,269	5.7%	(24)	-1.0%
Black – International	1,896	3.5%	2,274	5.7%	(378)	-16.6%
Revenues from Sales - Black	4,141	7.8%	4,543	11.4%	(402)	-8.8%
Blue – Italy	5,478	10.0%	3,203	8.1%	2,275	71.0%
Blue - International	1,845	3.4%	652	1.6%	1,193	>100%
Revenue from sales - Blue	7,323	13.4%	3,855	9.7%	3,468	90.0%
Other – Italy	2	0.0%	114	0.3%	(112)	>-100%
Revenues from Sales/Others	2	0.0%	114	0.3%	(112)	>-100%
Total Revenue from sales	54,558	100.0%	39,707	100.0%	14,851	37.4%

Revenue from sales by geographical segment

					Change
(In thousands of Euro)	H1 2022	% of revenue	H1 2021	% of revenue	Δ	%
Italy	25,737	47.1%	21,605	54.4%	4,132	19.1%
DACH	5,016	9.0%	3,020	7.6%	1,996	66.1%
Spain/Portugal	4,650	8.6%	3,599	9.1%	1,051	29.2%
Eastern Europe	4,973	8.5%	2,879	7.3%	2,094	72.7%
France	2,960	5.4%	2,799	7.0%	161	5.7%
Benelux	2,974	5.5%	2,102	5.3%	872	41.5%
Northern Europe	4,222	7.7%	2,015	5.1%	2,207	>100%
Middle East	846	2.4%	332	0.8%	514	>100%
Others	3,181	5.8%	1,356	3.4%	1,825	>100%
Total Revenue from sales	54,558	100.0%	39,707	100.0%	14,851	37.4%

4.20 Cost of sales

The cost of sales amounts to EUR 32,885 thousand in the first half of 2022 (EUR 23,753 in the first half of 2021) and mainly includes the costs of purchasing and processing raw materials (EUR 30,976 thousand), personnel expense (EUR 1,335 thousand) and logistics costs (EUR 547 thousand).

4.21 Sales and distribution costs

In the first half of 2022, the sales and distribution costs amounted to EUR 15,001 thousand (EUR 11,375 thousand in the first half of 2021) and break down as follows:

(In thousands of Euro)
	H1 2022	% of revenue	1 2021	% of revenue
Sales and distribution personnel expense	6,084	11.2%	5,433	13.7%
Commissions to agents	2,654	4.9%	2,286	5.8%
Transport	4,199	7.7%	2,350	5.9%
Advertising, commercial and adv. consultancy costs	1,031	1.9%	642	1.6%
Other sales and distribution costs	1,033	1.9%	664	1.7%
Total sales and distribution costs	15,001	27.5%	11,375	28.6%

4.22 General and administrative costs

In the first half of 2022, the general and administrative costs amounted to EUR 52,224 thousand (EUR 11,470 thousand in the first half of 2021) and break down as follows:

(In thousands of Euro) H1 ²⁰²² % of revenue H1 ²⁰²¹ % of revenue Amortisation 4,810 8.8% 4,768 12.0% Depreciation 1,250 2.3% 905 2.3% Impairment of goodwill 39,925 73.2% - - Provisions for risks and impairment losses 121 0.2% 85 0.2% Administrative personnel expense 2,892 5.3% 2,579 6.5% Administrative, legal, personnel consultancy etc. 1,051 1.9% 1,206 3.0% Directors' and Statutory Auditors' fees 496 0.9% 478 1.2% Commissions and fees 74 0.1% 44 0.1% Other general administrative costs 1,605 2.9% 1,405 3.5% Total general and administrative costs 52,224 95.7% 11,470 28.9%

4.23 Other non-operating costs and income

In the first half of 2022, non-operating costs and income amounted to EUR 802 thousand (EUR 1,979 thousand in the first half of 2021) and break down as follows:

(In thousands of Euro)
	H1 2022	% of revenue	H1 2021	% of revenue
Prior year income and (expense)	43	0.1%	(192)	-0.5%
Recoveries of SIAE fees	(3)	0.0%	130	0.3%
(SIAE and CONAI contributions)	(72)	-0.1%	(199)	-0.5%
Other non-operating (costs)/income	834	1.5%	2,240	5.6%
Net other non-operating income	802	1.5%	1,979	5.0%

Net other non-operating income was positive at EUR 802 thousand and decreased by EUR 1,177 thousand compared to the first half of 2021, due to the Härtefall contribution, which was paid to Worldconnect in H1 2021.

4.24 Financial income and expense

Net financial expense amounts to EUR 690 thousand (income of EUR 1,343 thousand in the first half of 2021).

(In thousands of Euro)
	H1 2022	% of revenue	H1 2021	% of revenue
Other financial income and change in fair value	307	0.6%	243	0.6%
Interest income	1	0.0%	1	0.0%
Total Financial income	308	0.6%	244	0.6%
Commissions and other financial expense from fair value	(478)	-0.9%	(957)	-2.4%
Interest expense on non-current loans	(441)	-0.8%	(591)	-1.5%
Other interest expense	(79)	-0.1%	(39)	-0.1%
Total Financial expense	(998)	-1.8%	(1,587)	-4.0%
Net financial expense	(690)	-1.3%	(1,343)	-3.4%

Net financial expense for H1 2022 comes to EUR 690 thousand, while in H1 2021, it came to EUR 1,343 million. This difference is mainly attributable to the change in the fair value of outstanding warrants, which in the first half of 2021 had generated a cost of EUR 757 thousand, while in the first half of 2022 it had a positive effect on the income statement of EUR 307 thousand. There were also higher charges related to premiums paid on derivative contracts for hedging against exchange rate risk for the purchase of products denominated in US dollars in the amount of EUR 386 thousand.

Financial expense for the first half of 2022 comes to EUR 998 thousand and mainly refers to:

EUR 441 thousand relative to interest to banks for the loan stipulated in October 2020 for an original amount of EUR 50,000 thousand (the residual debt at 30 June 2022 is EUR 30,000 thousand);
EUR 478 thousand for bank commission;
EUR 79 thousand other interest expense.

4.25 Exchange gains and losses

The breakdown of the item for the six-month periods ended 30 June 2022 and 30 June 2021 is shown below:

(In thousands of Euro)
	H1 2022	% of revenue	H1 2021	% of revenue
Net exchange gains on trading	1,116	2.0%	4	0.0%
Net exchange gains/(losses) on financial transactions	213	0.4%	(10)	0.0%
Net exchange gains (losses)	1,329	2.4%	(6)	0.0%

4.26 Income taxes

The details of the item Income taxes for the first half of 2022 and 2021 are shown below:

(In thousands of Euro)
	H1 2022	H1 2021
Current taxes	(1)	(20)
Current taxes from previous years	(4)	158
Deferred taxes	1,105	2,778
Total	1,100	2,916

Taxes for infra-annual periods are calculated by applying the tax rate determined on the most up-to-date forecast situation as at 31 December available at the time of closing (budget or forecast) to the pre-tax profit for the period or loss for each individual entity. The change from the first half of 2021 was mainly due to the allocation of deferred tax assets on the negative result for the period ended 30 June 2022 and deferred tax assets calculated on the amortisation of the Customer Relationships and Cellularline and Interphone brands.

Deferred tax of Euro 1,105 thousand refers to:

income from the accrual for deferred tax assets on the loss for the period of the various Group companies, amounting to EUR 454 thousand;
provision for deferred tax assets on the amortisation of Customer Relationships and Cellularline and Interphone brands, amounting to EUR 632 thousand;

costs for the accrual of deferred tax liabilities arising from the change in the fair value of the warrant, amounting to approximately EUR 74 thousand;
income from the release of deferred tax liabilities arising from the effect of amortisation on the PPA of Worldconnect and Systema, amounting to EUR 81 thousand;
other minor changes for EUR 13 thousand.

4.27 Basic and diluted earnings per share

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

(In thousands of Euro)
	H1 2022	H1 2021
Loss for the period [A]	(43,011)	(3,225)
Number of shares (in thousands) taken into account for the calculation of basic and diluted earnings per share [B]	20,357	20,234
Basic and diluted earnings per share ( ) [A/B] in Euro	(2.11)	(0.16)

The number of shares taken into account for the calculation increased following the allocation of 632,240 treasury shares as part of the distribution of the 2021 dividend.

4.28 Statement of cash flows

The main factor that influenced cash flow trends in the periods considered are summarised below.

Cash flows from operating activities

(In thousands of Euro)	H1 2022	H1 2021
Cash flows from operating activities
Loss for the period	(43,011)	(3,225)
Adjustments for:
- Income taxes	(1,100)	(2,916)
- Net accruals and impairment losses	(492)	89
- Loss/(gain) on equity investments	-	(120)
- Accrued net financial expense	643	1,344
- Amortisation, depreciation and impairment of goodwill	46,000	5,673
- Other non-monetary changes (*)	66	(7)
Changes in:
- Inventories	(13,156)	1,018
- Trade receivables	8,156	15,947
- Trade payables	2,855	(2,844)
- Other changes in operating assets and liabilities	5,653	2,288
- Payment of employee benefits and change in provisions	(81)	-
Cash flow generated by operating activities	5,531	17,247
Taxes paid/offset	(941)	(1,367)
Interest paid	(998)	(410)
Cash flows generated by operating activities	3,592	15,470

(*) In order to provide better comparability, these items for H1 2021 have been reclassified.

Cash flows from investing activities

(In thousands of Euro)
	H1 2022	H1 2021
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired and other costs	-	(1,732)
Net purchases of property, plant and equipment and intangible assets (*)	(2,829)	(1,527)
Cash flows used in investing activities	(2,829)	(3,259)

(*) In order to provide better comparability, these items for H1 2021 have been reclassified.

Cash flows from financing activities

(In thousands of Euro)	H1 2022	H1 2021
Cash flows from financing activities
Increase/(Decrease) in financial liabilities	1,735	(4,521)
Increase/(decrease) in other financial liabilities (*)	(962)	941
Dividend distribution	(1,012)	-
Payment of transaction costs relating to financial liabilities	48	166
Other changes in equity (*)	355	60
Cash flows generated by/(used in) financing activities	164	(3,354)

(*) In order to provide better comparability, these items for H1 2021 have been reclassified.

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 are part of the ordinary course of business of the Group's companies. These transactions mainly concern (i) the supply of products and accessories for mobile telephony, (ii) the supply of services functional to the operation of the business 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), implemented by the Group up to 30 June 2022 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 2022, indicating the type of relationship:

Related parties	Type and main relationship
Cellular Swiss S.A.	50%-owned associate of Cellularline S.p.A. (measured using the equity method); the remaining shareholders are: Ms Maria Luisa Urso (25%) and Mr Antonio Miscioscia (25%)
Christian Aleotti	Shareholder and Chief Executive Officer of Cellularline S.p.A.

The table below shows the statement of financial position balances of the Group's Related Party Transactions for the six-month period ended 30 June 2022:

(In thousands of Euro)	Current trade receivables	Other non-current assets	(Trade payables)
Cellular Swiss S.A.	4,198	-	-
Total	4,198	-	-
Impact on the financial statements item	9.5%	-	-

The table below shows the income statement balances of Cellularline's transactions with related parties for the first half of 2022:

(In thousands of Euro)	Revenue from sales	(Sales and distribution costs)	(General and administrative costs)	Other non-operating (costs)/ income
Cellular Swiss S.A.	1,996	-	(1)	-
Other	-	-	(5)	-
Total	1,996	-	(6)	-
Impact on the financial statements item	3.7%	-	-0.0%	-

The main related parties with which Cellularline carried out transactions in the six months ended 30 June 2022 are as follows:

Cellular Swiss S.A.: trading relationship involving the transfer of goods held for sale by Cellularline to Cellular Swiss S.A., with the latter recharging a portion 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;
Two lease contracts with Christian Aleotti signed on 1 September and 16 October 2017.

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 approval of these condensed interim consolidated financial statements, the accrued provisions are sufficient to ensure the correct presentation of 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 Directors' Report.

6.3 Guarantees granted in favour of third parties

This item includes sureties payable in favour of third parties for EUR 600 thousand, mainly relating to a customer to guarantee any contractual penalties for commercial supplies.

6.4 Subsequent events

Publication of preliminary data on 13 July figures for the first half of 2022 for Sales Revenue and Net Financial Debt, not subject to full or limited audit.
4 SIDE S.r.l., a company whose quota capital is wholly owned by Esprinet S.p.A., announced on 8 August that it has filed with CONSOB the offer document, intended for publication, relating to the voluntary public tender offer for all the ordinary shares of Cellularline S.p.A..
CONSOB requested on 11 August to make amendments and additions to the Offer Document filed by 4 SIDE S.r.l. by ordering, pursuant to Article 102, paragraph 4 of the TUF, the suspension of the term for the approval of the Offer Document until the completion of the information framework and in any case, for a period not exceeding 15 calendar days from the date of suspension of the aforesaid term.
On 26 August, CONSOB ordered the resumption of the terms of the administrative procedure aimed at approving the Offer Document filed by 4 SIDE S.r.l., whose preliminary terms will expire on 7 September 2022.
On 6 September, issue of CONSOB authorisation for the publication of the Offer Document filed by 4 SIDE S.r.l. relating to the voluntary public tender offer for the entirety of Cellularline S.p.A.'s ordinary shares.

• On 8 September, publication of the Offer Document filed by 4 SIDE S.r.l. relating to the voluntary public tender offer for the entirety of Cellularline S.p.A.'s ordinary shares.

___________________ ___________________

Reggio Emilia, 08/09/2022.

Antonio Luigi Tazartes Davide Danieli The Chairman of the Board of Directors Manager in charge of financial reporting

CERTIFICATION OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2022 PURSUANT TO ART. 81-TER OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999, AS AMENDED AND SUPPLEMENTED

The undersigned Christian Aleotti and Marco Cagnetta, in their capacity as Managing Directors, and Davide Danieli, in his capacity as Manager in charge of financial reporting of the Cellularline Group, attest, also considering 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
that the administrative and accounting procedures for the preparation of the Condensed Interim Consolidated Financial Statements as at and for the six-month period ended 30 June 2022 have been effectively applied.

In this regard, we note that no significant issues emerged.

We also certify that the Condensed Interim Consolidated Financial Statements as at and for the six-month period ended 30 June 2022 of the Cellularline Group:

have been prepared in accordance with the applicable International Financial Reporting Standards endorsed by the European Union pursuant to Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002;
correspond with the entries in the ledgers and the accounting records;
give a true and fair view of the performance and financial position of the issuer and of all the companies included in the consolidation.

The Directors' Report includes a reliable analysis of references to important events that occurred in the first six months of the year and their impact on the condensed interim consolidated financial statements, together with a description of the main risks and uncertainties for the remaining six months of the year. The Directors' Report also includes a reliable analysis of information on significant transactions with related parties.

___________________ ___________________

Reggio Emilia, 08/09/2022.

Christian Aleotti Marco Cagnetta Deputy Chairman and CEO Chief Executive Officer

Davide Danieli Manager in charge of financial reporting

___________________

AI assistant

Cellularline — Interim / Quarterly Report 2022

4473_ir_2022-09-14_f3706a1a-7179-40cf-9ab5-de1a14ef410a.pdf

Interim Consolidated Financial statements as at 30 June 2022

Report on review of condensed interim consolidated financial statements

Introduction

Scope of the review

Conclusion

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

Registered Office:

Legal information:

CORPORATE BODIES

Board of Directors

Risk and Control Committee

Appointments and Remuneration Committee

Committee for Transactions with Related Parties

Board of Statutory Auditors

Supervisory Body

Independent Auditors

GROUP STRUCTURE AT 30 June 2022

GROUP COMPOSITION

1. Introduction

2. Methodological note

3. Accounting policies

4. Main financial and performance indicators1

5. Market performance

6. Group performance

Income Statement

6.1 Consolidated revenue

6.1.1 Revenue from sales by product line

6.1.2 Consolidated revenue by geographical segment

6.2 Cost of sales

6.3 Sales and distribution costs

6.4 General and administrative costs

6.5 Other non-operating costs and income

6.6 Adjusted EBITDA

6.7 Financial income and expense

6.8 Exchange gains and losses

6.9 Adjusted EBIT

6.10 Adjusted loss for the period attributable to the owners of the parent

7. Statement of financial position

Statement of financial position

Financial Position

Net cash flows from operating activities

Cash flows used in investing activities

Cash flows generated by/(used in) financing activities

8. Investments and research and development activities

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

10. Atypical and/or unusual transactions

11. Share-based payments

12. Treasury shares and shares of the parent

13. The main risks and uncertainties to which the Group is exposed

13.1 Risks related to competition and competitiveness

13.2 Seasonal risks

13.3 Risks related to changes in the regulatory framework

13.4 Risks related to macroeconomic developments, conflict Russia Ukraine and risks related to the effects of COVID-19

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

13.9 Risks related to the administrative liability of legal persons

13.10 Risks associated with climate change

14. Management and coordination

15. Branches

16. Workforce

17. Information on environmental impact

18. Significant events during and after the reporting period

Subsequent events

19. Business outlook

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT 30 JUNE 2022

STATEMENT OF FINANCIAL POSITION

INCOME STATEMENT

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF CASH FLOWS

STATEMENT OF CHANGES IN EQUITY

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

1. Introduction

1.1 Impact of the COVID-19 and the conflict between Russia and Ukraine emergency on the Group's performance and financial position, measures taken, risks and areas of uncertainty

2. Basis of preparation and main accounting standards

2.1 Basis of preparation

Cellularline Interim / Quarterly Report 2022