Fila — Investor Presentation 2017

Mar 21, 2018

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.

FY2017 Highlights

FILA: DOUBLE DIGIT INCREASE OF SALE IN CENTRE-SOUTH AMERICA AND INDIA, STABLE GROWTH IN NORD AMERICA AND FOCUS ON GROUP INTEGRATION AND MARGIN IMPROVEMENT

•FY2017 Core Business Revenue of Euro 510,4 million, up 20,8% on FY2016 (Euro 87,8 million), mainly due to 2016 M&A activity (acquisition of D&R Group, St Cuthberts and Canson) ;

•Organic revenue growth of 4,7%, excluding the currency effect and changes to the consolidation scope; double digit increase confirmed in Centre & South America, in particular Mexico and in Asia, in particular India;

• Flat European market in FY2017 with growth coming from the most recently established commercial companies in particular Greece, Russia, Poland, Turkey, Benelux an Spain;

•Adjusted EBITDA of Euro 80,6 million, +19,9% on Euro 67,2 million in FY2016, of which +3,3% organic growth;

•Adjusted Net Profit, excluding extraordinary costs and tax effects, of Euro 29,1 million (Euro 28,2 million in FY2016);

•Net Debt of Euro -239,6 million at December 31st, 2017 (Euro -223,4 million in FY2016), mainly affected by the Earn-Out Accrual for the adjustment price mechanism of Canson Group Acquisition (Euro 7,5 million to be paid in FY 2018) and by a temporary increase of the Net working Capital due to the strong revenues performance in North and South America.

FY2017 Core Business Sales

• Core Business Sales +20,8% (+87,8mln €). Organic growth, +19,9mln € (+4,7%), net of M&A and FX effect, of which:

• By Geographic Area: mainly Centre-South America +8,9mln € (+15,7%), Asia +7,8mln € (+15,1%), North America +3,2mln € (+2,4%), Europe +0,4mln € (+0,2%), partially offset by Other Countries -0,4mln € (-16,5%)
• By Product line: Other Creativity Instruments +12,8mln € (+6,1%), Pencils +6,6mln € (+4,2%) Office, Industrial Products of +0,5mln € (+1,0%)
• M&A effect 73,8mln € (mainly for 66,4mln € Canson Group, 4,6mln € D&R Group and 3,0mln € St. Cuthberts)

SALES BY PRODUCT LINE SALES BY MARKETING DIVISION SALES BY GEOGRAPHICAL AREA

FY2017 EBITDA

ADJUSTED EBITDA

• Adjusted EBITDA + 13,4mln € (+19,9%), Organic Growth +2,2mln € (+3,3%), net of M&A and FX effect
• 7,5mln € of extraordinary costs in FY2017A, mainly related to reorganization and stock option costs
• 10,4mln € of extraordinary costs in FY2016A, mainly related to M&A activities.
• M&A effect of 11,1mln € (mainly for 10,1mln € Canson Group, 0,5mln € D&R Group and 0,8mln € St Cuthberts)

FY2017 Net Income and Net Financial Position

ADJUSTED NET INCOME

ADJUSTED NET FINANCIAL POSITION

• The normalization of the Group Result in FY2017A refers mainly to reorganization and stock options costs, net of taxes effects and for 7,5mln € to the Earn- Out accrual for the adjustment price mechanism of Canson Group Acquisition, partially offset by adjustments of 1mln € for financial proceeds coming from the disposal of 30% participation in FILA Nordic (Sweden)
• The normalization of the Group Result in FY2016 refers to extraordinary operating costs, net of taxes effects

Net debt increase of 16,2mln € mainly due to:

• Operating CF 28,1mln Euro
• Capex for 23,9mln €
• Dividend paid to shareholders for 3,8mln €
• Interest paid for 8,3mln €
• Canson Earn Out accrual for 7,5mln € offsetted by 1mln € Cash in for the disposal of 30% participation in FILA Nordic (Sweden)
• Negative FX effect of 2,5mln €

Appendix

FY2017 Income Statement

(€ million)	2016A	% on Sales	2017A	% on Sales
PROFIT & LOSS
Core Business Sales	422,6		510,4
Other revenues	19,7		18,3
Total revenues	442,3		528,7	-
Cost for Raw Materials and Supplies net Increase(decrease) inventory	(181,0)	(42,8%)	(214,2)	(42,0%)
Costs for Services and Use of Third-Party Assets	(101,7)	(24,1%)	(115,7)	(22,7%)
Personnel Costs	(82,4)	(19,5%)	(106,3)	(20,8%)
Other Operating Costs	(20,3)	(4,8%)	(19,3)	(3,8%)
Total operating costs	(385,4)	(91,2%)	(455,5)	(89,3%)
EBITDA	56,8	13,4%	73,1	14,3%
Depreciation and Amortization	(14,9)	(3,5%)	(17,8)	(3,5%)
Write-Downs	(0,8)	(0,2%)	(2,1)	(0,4%)
EBIT	41,1	9,7%	53,3	10,4%
Financial income/expenses	(5,8)	(1,4%)	(22,4)	(4,4%)
Income/expenses from associates at equity method	(0,0)	(0,0%)	0,1	0,0%
PBT	35,3	8,4%	30,9	6,1%
Taxes	(13,3)	(3,2%)	(13,5)	(2,7%)
Net profit (loss) of continuing operating activities	22,0	5,2%	17,4	3,4%
Net profit (loss) of discontinued operating activities	-	0,0%	-	0,0%
Total net profit (loss) of the period	22,0	5,2%	17,4	3,4%
Total net profit (loss) attributable to non controlling interests	1,0	0,2%	1,6	0,3%
Fila Group's total net profit (loss) of the period	21,0	5,0%	15,8	3,1%
(€ million)	2016A	% on Sales	2017A	% on Sales
P&L ADJUSTMENTS
REPORTED EBITDA	56,8	13,4%	73,1	14,3%
Total Adjustments	10,4		7,5
ADJUSTED EBITDA	67,2	15,9%	80,6	15,8%
FILA GROUP REPORTED NET PROFIT	21,0	5,0%	15,8	3,1%
Total Adjustments	7,2		13,3
FILA GROUP ADJUSTED NET PROFIT	28,2	6,7%	29,1	5,7%

FY2017 Balance Sheet

(€ million)	2016A	2017A
BALANCE SHEET
Intangible assets	218,4	208,1
Tangible Assets	81,3	88,4
Financial Fixed Assets	3,7	4,7
Fixed Assets	303,4	301,2
Other Non Current Assets/Liabilities	20,7	15,6
Inventory	177,4	178,7
Trade Receivables and Other receivables	113,6	132,8
Trade Payables and Other Payables	(90,4)	(96,3)
Trade Working Capital	200,5	215,2
Other Current Assets and Liabilities	0,2	0,2
Net Working Capital	200,7	215,4
Provisions & Funds	(62,4)	(53,0)
NET CAPITAL EMPLOYED	462,4	479,2
Shareholders equity	(239,0)	(239,6)
Net Financial Position	(223,4)	(239,6)
TOTAL NET SOURCES	(462,4)	(479,2)

FY2017 Cash Flow Statement

(€ million)	2016A	2017A
CASH FLOW
EBIT	41,1	53,3
Adjustments for non monetary costs	17,9	22,8
Adjustments for taxes	(12,0)	(14,8)
Cash-flow from operating activities before changes in NWC	47,0	61,2
Changes in inventories	(16,5)	(10,8)
Changes in trade receivables & others	(4,6)	(28,5)
Changes in trade payables & others	15,4	9,9
Changes in other current assets/liabilities	(0,8)	(3,7)
Changes in net working capital	(6,4)	(33,1)
Operating cash-flow	40,5	28,1
Investments in tangible and intagible assets	(12,4)	(23,9)
Other changes	0,0	0,2
Free Cash Flow	28,1	4,4
Capital increase/reimbursement/dividends	(4,5)	(3,8)
Net interests	(5,7)	(8,3)
Participation acquisition and disposal	(84,9)	0,8
Effect of FX rate movements	2,2	(2,5)
Net financial position due to consolidation area changes	(119,9)	(6,8)
Changes in Net Financial Position	(184,7)	(16,2)

Quarterly CB Sales, EBITDA, TWC and NFP

(€ million)

QUARTERLY CORE BUSINESS SALES AND ADJUSTED EBITDA

(€ million) QUARTERLY TWC AND NFP

11

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 March 2018

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