Fila — Investor Presentation 2018

Nov 13, 2018

9M 2018 FILA Group Results

Disclaimer

This document has been prepared by F.I.L.A. S.p.A. ("F.I.L.A." or the "Company"), for information purposes only, exclusively with the aim of assisting you to understand and assess the activities of F.I.L.A..

Statements contained in this presentation, particularly regarding any possible or assumed future performance of the FILA Group, are or may be forward-looking statements based on FILA's current expectations and projections about future events.

Such forward-looking statements are subject to risks and uncertainties, the non-occurrence or occurrence of which could cause the actual results including the financial condition and profitability of FILA to differ materially from, or be more negative than, those expressed or implied by such forward-looking statements. Consequently, FILA and its management can give no assurance regarding the future accuracy of the estimates of future performance set forth in this document or the actual occurrence of the predicted developments.

The data and information contained in this document are subject to variations and integrations. Although FILA reserves the right to make such variations and integrations when it deems necessary or appropriate, FILA assumes no affirmative disclosure obligation to make such variations and integration, except to the extent required by law.

Any reference to past performance of the FILA Group shall not be taken as an indication of future performance.

In addition, this presentation includes certain ''Adjusted'' financial and operating indicators and other measures, which have been adjusted to reflect extraordinary events, non-recurring transactions and activities which are not directly related to the Group's ordinary business. Such "Adjusted" information has been included to allow a better comparison of financial information across the periods; however, it should be noted that such information are not recognized as measures of financial performance or liquidity under IFRS and/or do not constitute an indication of the historical performance of the Company or the Group. Therefore, investors should not place undue reliance on such data and information.

This document does not constitute or form part of any offer or invitation to purchase or subscribe any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

By attending this presentation, you agree to be bound by the foregoing terms.

9M 2018 Highlights

FILA 9M 2018: STRONG REVENUE GROWTH IN ASIA AND SOME CENTRAL-SOUTH AMERICAN COUNTRIES, OFFSETTING TEMPORARY NORTH AMERICAN AND EUROPEAN SLOWDOWN. GOOD PERFORMANCE BY PACON, WITH RESULTS FULLY CONSOLIDATED FROM JUNE 2018. SUCCESSFUL START AT END OF AUGUST OF NEW ANNONAY CENTRALISED HUB

•Adjusted 9M 2018 Core Business Revenue of Euro 441,6 million, +12,8% on same period of previous year (adjustment effect from introduction of IFRS 15 of Euro 4,1 million); Organic revenue, net of negative currency and M&A effect, substantially in line with 9M 2017.

•Organic growth in Asia, particularly India, and in Central-South America, in the first nine months of the year, is respectively 23,2% and 11,9% on the same period of the previous year; this growth offset by temporary slowdown in North America, due to organizational and commercial aspects concerning Pacon acquisition, and Europe, particularly Italy and France, for strategic and commercial choices.

•Adjusted EBITDA of Euro 73,6 million, +8,3% on Euro 68,0 million for 9M 2017 (-5,8% organic, principally due to local negative fx effect and unexpected increase of operating costs for inefficiencies in integration process); revenue margin of 16,7%.

•Adjusted net profit of Euro 22,6 million compared to Euro 27,5 million for 9M 2017, principally due to higher D&A and financial charges related to the new loan granted for the Pacon acquisition.

•Net Debt of Euro 591,3 million at September 30, 2018, compared to Euro 239,6 million at December 31, 2017. The movement mainly concerns the acquisition of Pacon for Euro 301,9 million and the business seasonality impacts on net working capital.

• 9M 2018 Pacon Revenue USD 190,4 million and Adjusted EBITDA of USD 30,9 million, although reflected in the 9M 2018 report from the acquisition date (June 7 th , 2018) and for respectively only Euro 70,5 million and Euro 11,9 million*.

9M 2018 Core Business Sales

• Adjusted Core Business Sales +50,1mln € (+12,8%), Organic -0,2mln € (-0,06%), net of FX and M&A, of which:
• ‒ By Geographic Area: Asia +10,7mln € (23,2%), Centre & South America +5,5mln € (11,9%), totally offset by North America - 9,4mln € (-7,7%), Europe -6,2mln € (-3,6%) and Other Countries - 0,8mln € (-22,1%);
• ‒ By Product line: School & Office +2,4mln € (0,9%), Industrial +1,1mln € (8,4%), totally offset by Fine Art, Hobby & Digital - 3,7mln € (-3,4)%
• ‒ +4,1mln € adjustment for IFRS 15 first time adoption

SALES BY PRODUCT LINE SALES BY GEOGRAPHICAL AREA

9M 2018 EBITDA

ADJUSTED EBITDA

• Adjusted EBITDA +5,6mln € (+8,3%), Organic -3,9mln € (-5,8%), net of FX and M&A effect
• 12,1mln € of extraordinary costs in 9M 2018A, related to the Pacon Group acquisition, reorganization, stock option costs and IFRS 15 first time adoption
• 5,94mln € of extraordinary costs in 9M 2017A, mainly related to the reorganization costs

9M 2018 Net Income and Net Financial Position

ADJUSTED NET INCOME

• The adjustment of the Group Result in 9M 2018A refers to extraordinary operating and financial costs for M&A, reorganization and stock options plan, IFRS 15 and 9 first time adoption, net of tax effect

• The adjustment of the Group Result in 9M 2017A refers mainly to reorganization and stock options costs, net of taxes effects and partially offset by adjustments of 1mln € for financial proceeds coming from the disposal of 30% participation in FILA Nordic (Sweden)

ADJUSTED NET FINANCIAL POSITION

Net debt increase of 351,6mln € mainly due to:

• Negative M&A effect of 301,9mln €, related to Pacon Group acquisition
• Operating CF -10,0 mln €, mainly due to seasonality
• Capex for 14,9mln €
• Financial expenses for 19,7mln € including 7,0mln € of one-off bank fees
• Dividends paid for 3,9mln €
• Negative FX effect of 2,4mln €

Appendix

9M 2018 Income Statement

(€ million)	9M 2017A	% on Sales	9M 2018A	% on Sales
PROFIT & LOSS
Core Business Sales	391,5		437,5
Other revenues	16,5		6,2
Total revenues	408,1		443,7	-
Cost for Raw Materials and Supplies net Increase(decrease) inventory	(161,0)	(41,1%)	(188,0)	(43,0%)
Costs for Services and Use of Third-Party Assets	(87,2)	(22,3%)	(99,1)	(22,7%)
Personnel Costs	(80,5)	(20,6%)	(86,6)	(19,8%)
Other Operating Costs	(17,3)	(4,4%)	(8,5)	(2,0%)
Total operating costs	(346,1)	(88,4%)	(382,2)	(87,4%)
EBITDA	62,0	15,8%	61,5	14,1%
Depreciation and Amortization	(13,3)	(3,4%)	(16,6)	(3,8%)
Write-Downs	(0,9)	(0,2%)	(2,3)	(0,5%)
EBIT	47,9	12,2%	42,6	9,7%
Financial income/expenses	(11,3)	(2,9%)	(19,4)	(4,4%)
Income/expenses from associates at equity method	-	0,0%	0,1	0,0%
PBT	36,5	9,3%	23,3	5,3%
Taxes	(12,4)	(3,2%)	(12,1)	(2,8%)
Total net profit (loss) of the period	24,1	6,2%	11,2	2,5%
Total net profit (loss) attributable to non controlling interests	1,2	0,3%	1,1	0,3%
Fila Group's total net profit (loss) of the period	23,0	5,9%	10,1	2,3%
(€ million)	9M 2017A	% on Sales	9M 2018A	% on Sales
P&L ADJUSTMENTS
REPORTED CORE BUSINESS SALES	391,5		437,5
Total Adjustments			4,1
ADJUSTED CORE BUSINESS SALES	391,5		441,6
REPORTED EBITDA	62,0	15,8%	61,5	14,1%
Total Adjustments	5,9		12,1
ADJUSTED EBITDA	68,0	17,4%	73,6	16,7%
FILA GROUP REPORTED NET PROFIT	23,0	5,9%	10,1	2,3%
Total Adjustments	4,5		12,5
FILA GROUP ADJUSTED NET PROFIT	27,5	7,0%	22,6	5,1%

8

9M 2018 Balance Sheet

(€ million)	2017A	9M 2018A
BALANCE SHEET
Intangible assets	208,1	418,4
Tangible Assets	88,4	99,9
Financial Fixed Assets	4,7	5,2
Fixed Assets	301,2	523,5
Other Non Current Assets/Liabilities	15,6	18,1
Inventory	178,7	262,6
Trade Receivables and Other receivables	132,8	209,8
Trade Payables and Other Payables	(96,3)	(112,5)
Trade Working Capital	215,2	359,9
Other Current Assets and Liabilities	0,2	(1,3)
Net Working Capital	215,4	358,7
Provisions & Funds	(53,0)	(59,0)
NET CAPITAL EMPLOYED	479,2	841,2
Shareholders equity	(239,6)	(250,0)
Net Financial Position	(239,6)	(591,3)
TOTAL NET SOURCES	(479,2)	(841,2)

9M 2018 Cash Flow Statement

(€ million)	9M 2017A	9M 2018A
CASH FLOW
EBIT	47,9	42,6
Adjustments for non monetary costs	18,6	21,5
Adjustments for taxes	(10,9)	(11,6)
Cash-flow from operating activities before changes in NWC	55,6	52,5
Changes in inventories	(15,9)	(25,5)
Changes in trade receivables & others	(64,8)	(34,2)
Changes in trade payables & others	1,8	(0,1)
Changes in other current assets/liabilities	(2,5)	(2,7)
Changes in net working capital	(81,4)	(62,5)
Operating cash-flow	(25,9)	(10,0)
Investments in tangible and intagible assets	(15,3)	(14,9)
Other changes	(0,7)	1,1
Free Cash Flow	(41,8)	(23,8)
Capital increase/reimbursement/dividends	(3,8)	(3,9)
Financial Expenses	(6,6)	(19,7)
Participation acquisition and disposal	0,8	(215,2)
Effect of FX rate movements	(2,3)	(2,4)
Net financial position due to consolidation area changes	0,7	(86,7)
Changes in Net Financial Position	(53,0)	(351,6)

Quarterly CB Sales, EBITDA, TWC and NFP

QUARTERLY ADJUSTED CORE BUSINESS SALES AND ADJUSTED EBITDA

(€ million)

(€ million) QUARTERLY TWC AND NFP

11

(1) Affected by extraordinary items

FILA Shareholders

Total shares 41.332.477, of which : Ordinary shares 34.765.969, Class B shares 6.566.508 (enjoy three votes each in accordance with Article 127 sexies of Legislative Decree No. 58/1998). Last update August 2018

Investor Relations F.I.L.A. Stefano De Rosa CFO/IR Officer – Francesca Cocco IR ir@fila.it (+39) 02 38105206