Fila — Investor Presentation 2020

May 15, 2020

Q1 2020 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 F.I.L.A.'s activities. Statements contained in this presentation, particularly regarding any possible or assumed future performance of the F.I.L.A. Group, are or may be forward-looking statements based on F.I.L.A.'s current expectations and projections about future events. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that are in some cases beyond F.I.L.A.'s control. These risks, uncertainties and factors may cause F.I.L.A.'s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements (and from past results, performances or achievements). Forward-looking statements are not guarantees of future performance. Consequently, F.I.L.A. 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 expected developments. The data and information contained in this document are subject to changes and integrations. Although F.I.L.A. reserves the right to make such changes and integrations when it deems necessary or appropriate, F.I.L.A. assumes no affirmative obligation to update, change or integrate this document, except as and to the extent required by law. Any reference to the past performance of the F.I.L.A. Group shall not be taken as an indication of future performance. In addition, this presentation includes certain ''Adjusted'' financial and operating indicators and non-IFRS measures, which have been adjusted to reflect extraordinary events, non-recurring and/or non-monetary transactions and/or activities that are not directly related to the Group's ordinary business. These measures are not indicative of our historical operating results, nor are they meant to be predictive of future results. These measures are used by F.I.L.A.'s management to monitor the underlying performance of the business and the operations. Since not all companies calculate these measures in an identical manner, F.I.L.A.'s presentation may not be consistent with similar measures used by other companies. Such "Adjusted" information has been included to facilitate the comparison of financial information among different financial periods; however, it should be noted that such information is not recognized as a measure of financial performance or liquidity under IFRS and/or does 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. The information contained in this document does not constitute or form any part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as any inducement to enter into, any investment activity. This document does not purport to contain all of the information that may be required to evaluate any investment in the Company or any of its securities and should not be relied upon to form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is intended to present background information on F.I.L.A., its business and the industry in which it operates and is not intended to provide complete disclosure upon which an investment decision could be made. The merit and suitability of investment in F.I.L.A. should be independently evaluated and determined by investors. Analyses in this presentation are not, and do not purport to be, appraisals of the assets, stock or business of F.I.L.A., and do not form any publicity material relating to the securities. Any person considering an investment in F.I.L.A. is advised to obtain independent advice as to the legal, tax, accounting, regulatory, financial, credit and other related advice prior to making an investment.

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•Core Business Revenues of 145,8mln €, +1,4% compared to Q1 2019 Results (+1,8% of organic growth excluding FX and M&A effects driven from North America growth);

•Adjusted EBITDA (IFRS 16 excluded) of 16,8mln €, -8,7% compared to Q1 2019 Results (-9,7% of organic growth excluding FX and M&A effects) mainly due to inefficiencies in sales and production related to the COVID-19;

•Adjusted Net Profit (IFRS 16 excluded) of -0,2mln € (+3,6mln € in Q1 2019), mainly affected by higher financial costs related to negative FX effect;

•Net Bank Debt decrease of 9,8mln € in the last twelve months, notwithstanding the cash out for Arches acquisition of 43,6mln € and related consultancy fees and other closing expense for 3mln € => Net Bank Debt decrease in last twelve months of 56,4mln € excluding Arches Acquisition cash out;

•Free Cash Flow to Equity -37,4mln €, including consultancy fees and other closing expense for 3mln € and slighting better than in Q1 2019 (-35,2mln €);

•Net Financial Position at -584,6mln € as at March 31, 2020, including IFRS16 effect; negative variation compared to December 2019 value (- 498,2mln €) due to Arches M&A cash out and business seasonality impact.

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Q1 2020 Core Business Sales

• Core Business Sales of 145,8mln €, +1,4% compared to Q1 2019 Results;

• Organic Growth +2,5mln € (+1,8%), FX and M&A effects excluded, of which:
  • ‒ By Geographic Area: North America +6,7mln € (+11,2%) partially offset by Europe -1,7mln € (-3,5%), Asia -1,3mln € (-6,4%), Centre & South America -1,2mln € (-9,3%), Other Countries flat;
  • ‒ By Product line: Fine Art, Hobby & Digital +4,7mln € (+11,3%), Industrial +0,5mln € (+10,3%) partially offset by School & Office -2,7mln € (-2,8%).
• M&A effects related to Arches acquisition in March 2020 and Superior business sold in October 2019.

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SALES BY PRODUCT LINE SALES BY GEOGRAPHICAL AREA

Data in millions of euros; for precise data refer to 3M FILA financial report

Q1 2020 EBITDA Adjusted (Excluded IFRS 16)

• Adjusted EBITDA of 16,8mln €, -8,7% compared to Q1 2019 Results;
• Organic variation -1,7mln € (-9,7%), FX and M&A effects
• 5,4mln € of extraordinary costs in Q1 2020, mainly related to Fila Arches acquisition and 2,8mln € of extraordinary costs in Q1 2019 mainly for reorganization costs;
• M&A effects related to Arches acquisition in March 2020 and Superior business sold in October 2019.

excluded;

Data in millions of euros; for precise data refer to 3M FILA financial report

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Q1 2020 Net Income Adjusted (Excluded IFRS 16)

• Adjusted Net Income of -0,2mln €, -106,7% compared to Q1 2019. Results mainly affected by higher financial costs related to negative FX effect;
• The adjustment of the Group Result in Q1 2020 for 5,4mln € mainly refers to extraordinary operating costs for Arches acquisition, net of taxes effects;
• The adjustment of the Group Result in Q1 2019 for 2,2mln € mainly refers to group reorganization costs, net of taxes effects.

Q1 2020 Net Financial Position

• Net Bank Debt decrease of 9,8mln € in the last twelve months, notwithstanding the cash out for Arches acquisition of 43,6mln € and related consultancy fees and other closing expense for 3mln € => Net Bank Debt decrease in last twelve months of 56,4mln € excluding Arches Acquisition cash out.
• Q1 2020 Net Financial Position increase of 86,4mln €, below main variations:
  • M&A Arches acquisition price for 43,6mln €;
  • Free Cash Flow to Equity negative for 37,4mln € (34,4mln € excluding consultancy fees and other closing expense for 3mln €).

Q1 2020 Cash Flow Statement

(€ million)		Q1 2019A	Q1 2020A
	CASH FLOW
	EBIT	8,1	2,9
6 1 RS IF D DE U XCL E	Adjustments for non monetary costs	7,1	8,6
	Adjustments for taxes	(1,3)	(1,3)
	Cash-flow from operating activities before changes in NWC	13,9	10,1
	Changes in net working capital	(39,7)	(41,7)
	Operating cash-flow	(25,8)	(31,6)
	Investments in tangible and intagible assets	(3,7)	(3,7)
	Free Cash Flow	(29,5)	(35,2)
	Net financial expenses	(6,1)	(5,7)
	Other changes	(0,9)	1,4
	IFRS 16 Impact		2,0
	Free Cash Flow to Equity	(35,2)	(37,4) *
	Capital increase/reimbursement/dividends	-	-
	Adjustment mark to market hedging	(4,5)	(9,2)
	Effect of FX rate movements	(4,1)	3,4
	IFRS 16 Net Financial Position	(81,8)	0,4
	M&A - Arches acquisition	-	(43,6)
	Changes in Net Financial Position	(125,5)	(86,4)

*Including cash out of 3,0mln € for consultancy fees and other closing expense related to Arches acquisition.

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Appendix

Q1 2020 Income Statement Reported

(€ million)	Q1 2019A	% on Sales	Q1 2020A	% on Sales
PROFIT & LOSS
Core Business Sales	143,8		145,8
Other revenues	1,7		3,1
Total revenues	145,5		148,9	0,0%
Cost for Raw Materials and Supplies net Increase(decrease) inventory	(60,3)	(41,9%)	(64,9)	(44,5%)
Costs for Services and Use of Third-Party Assets	(29,9)	(20,8%)	(30,1)	(20,7%)
Personnel Costs	(34,9)	(24,2%)	(35,3)	(24,2%)
Other Operating Costs	(1,9)	(1,3%)	(3,8)	(2,6%)
Total operating costs	(127,0)	(88,3%)	(134,0)	(91,9%)
EBITDA	18,5	12,9%	14,9	10,2%
Depreciation and Amortization	(9,8)	(6,8%)	(10,6)	(7,3%)
Write-Downs	(0,4)	(0,3%)	(0,6)	(0,4%)
EBIT	8,3	5,8%	3,7	2,5%
Financial income/expenses	(5,9)	(4,1%)	(8,6)	(5,9%)
Income/expenses from associates at equity method	0,0	0,0%	0,0	0,0%
PBT	2,4	1,7%	(4,9)	(3,4%)
Taxes	(1,3)	(0,9%)	(1,0)	(0,7%)
Net profit (loss) of continuing operating activities	1,1	0,8%	(5,9)	(4,1%)
Net profit (loss) of discontinued operating activities	-	0,0%	-	0,0%
Total net profit (loss) of the period	1,1	0,8%	(5,9)	(4,1%)
Total net profit (loss) attributable to non controlling interests	0,6	0,4%	0,1	0,1%
Fila Group's total net profit (loss) of the period	0,5	0,3%	(6,0)	(4,1%)

Q1 2020 Income Statement Adjusted

(€ million)		% on Sales	Q1 2020A	% on Sales
P&L ADJUSTMENTS
REPORTED CORE BUSINESS SALES	143,8		145,8
Total Adjustments	-		-
ADJUSTED CORE BUSINESS SALES	143,8		145,8
REPORTED EBITDA	18,5	12,9%	14,9	10,2%
IFRS 16 Impact	(2,9)		(3,5)
Total Adjustments	2,8		5,4
ADJUSTED EBITDA EXCLUDED IFRS 16	18,4	12,8%	16,8	11,5%
REPORTED FILA GROUP NET PROFIT	0,5	0,3%	(6,0)	-4,1%
Total Adjustments	2,2		5,4
ADJUSTED FILA GROUP NET PROFIT	2,7	1,9%	(0,6)	(0,4%)
IFRS 16 Impact	(0,9)		(0,4)
ADJUSTED FILA GROUP NET PROFIT EXCLUDED IFRS 16	3,6	2,5%	(0,2)	(0,2%)

Q1 2020 Balance Sheet Reported

(€ million)	2019A	Q1 2020A
BALANCE SHEET
Intangible assets	430,6	473,2
Tangible Assets	186,0	181,6
Financial Fixed Assets	3,7	3,5
Fixed Assets	620,3	658,3
Other Non Current Assets/Liabilities	18,3	17,8
Trade Working Capital	291,1	323,8
Other Current Assets and Liabilities	3,8	3,8
Net Working Capital	294,9	327,6
Provisions & Funds	(78,0)	(82,3)
NET CAPITAL EMPLOYED	855,5	921,5
Shareholders equity	(357,3)	(336,9)
Net Financial Position	(498,2)	(584,6)
TOTAL NET SOURCES	(855,5)	(921,5)

FILA Shareholders

Total shares * Ordinary shares only Ordinary 68,1% Shares 84,2% Class B Shares 15,8%

*Total shares 51.004.952 of which : Ordinary shares 42.923.096; Class B shares 8.801.856 (enjoy three votes each in accordance with Article 127 sexies of Legislative Decree No. 58/1998). Last update April 2020

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