Fila — Investor Presentation 2023

Aug 3, 2023

H1 2023 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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H1 2023 Highlights

• ˗ Adjusted Core Business Sales of 415,6mln €, +6,4% (+25,0mln €) on the same period of the previous year (390,6mln € in H1 2022); +7,9% at comparable FX rates. Asia +19,2mln € (+34,2%), Middle and South America +7,6mln € (+20,6%), North America +8,9mln € (+5,2%) and Other Countries +0,1mln € (+5,6%) partially offset by Europe -4,9mln € (-4,0%).
• ˗ Adjusted EBITDA, excluding IFRS 16 impact, of 72,3mln €, +11,5% (+7,5mln €) in H1 2022 (64,8mln €); +10,0% at comparable FX rates (+6,5mln €), highlighting a more than proportional growth than revenues thanks to the positive performance in North America, Asia and Middle-South America.
• ˗ Adjusted EBITDA margin at 17,4% with a significant increase of 80bp on the same period of the previous year (16,6%) and better than foreseen, mainly thanks to the positive effect generated by price increase, expected to continue in the following quarters, and cost efficiencies, despite the services costs increase to support the growth. Significant margin improvement in North America.
• ˗ Adjusted Net Profit, excluding IFRS 16 impact, of 28,6mln €, flat on the same period of the previous year. This value is significantly impacted by higher net financial expenses at 17,4mln € compared to the ones of the same period of the previous year, of which 15,2mln € mainly related to the increase in variable interest rates and the residual part of around 1,2mln € related to the negative financial exchange effects on the main currencies.
• ˗ Net Bank Debt of 408,3mln € (428,2mln € in H1 2022) with a decrease in the last twelve months of 19,9mln €, decrease of 17,8mln € excluding positive FX effect of approx. 2,1mln €.
• ˗ Adjusted "Free Cash Flow to Equity" at -48,2mln € (-50,0mln € in H1 2022), with an improvement of +1,8mln € on H1 2022 mainly due to higher operating cash flow generation and lower working capital absorption of 14,2mln €, partially mitigated by higher CAPEX for 10,7mln €, almost completely related to Asia to support the growth and higher net financial expenses for 6,6mln €, mainly due to the interest rates increase.
• ˗ Net Bank Debt and "Free Cash Flow to Equity" are better than foreseen in H1 2023 and confirming at least our 2023 expected cash generation.

H1 2023 Core Business Sales

• Adjusted Core Business Sales of 415,6mln €, +6,4% on H1 2022A; +30,9mln € (+7,9%) at comparable FX rates, of which:

‒ By Geographic Area: Asia +19,2mln € (+34,2%), North America +8,9mln € (+5,2%), Middle and South America +7,6mln € (+20,6%), and Other Countries +0,1mln € (+5,6%) partially offset by Europe -4,9mln € (-4,0%).

SALES BY GEOGRAPHICAL AREA

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H1 2023 EBITDA Adjusted (Excluded IFRS 16)

• Adjusted EBITDA of 72,3mln €, +11,5% on H1 2022A; +6,5mln € (+10,0%) at comparable FX rates;
• 3,4mln € of extraordinary costs in H1 2023A mainly related to Group reorganization costs – restructuring costs (2,3mln €), FILA consultancy fees (0,9mln €) and Shares-Based premium (0,2mln €); 0,5mln € of extraordinary costs in H1 2022A mainly related to FILA Group reorganization costs – restructuring costs, consultancy fees and Covid-19 pandemic, partially offset by Shares-Based premium.

ADJUSTED EBITDA BY GEOGRAPHICAL AREA

Data in millions of euros; for precise data refer to 6M FILA financial report

H1 2023 Adjusted Net Profit (Excluded IFRS 16)

• Total adjusted Net Profit of 28,6mln €, flat on H1 2022A;
• The adjustment of the Net Profit in H1 2023A for 2,8mln € mainly related to Group reorganization costs – restructuring costs, FILA consultancy fees and Shares-Based premium, net of taxes effects;
• The adjustment of the Net Profit in H1 2022A for 0,4mln € mainly refers to Group reorganization costs – restructuring costs and consultancy fees, Covid-19 pandemic and Shares-Based premium, net of taxes effects.

H1 2023 Net Bank Debt and NFP (Excluded IFRS 16 and Mark to Market Hedging)

(€ million)
	H1 2022A	2022A	H1 2023A
Cash and Cash Equivalents	101 7 ,	107 5 ,	65 3 ,
Financial Liabilities and Receivables	(529 9) ,	(459 1) ,	(473 6) ,
Bank Debt Net	(428 2) ,	(351 6) ,	(408 3) ,
Amortized cost	(0 1) ,	1 7 ,	1 4 ,
Excl Mark Market IFRS16 and Hedging NFP to	(428 3) ,	(349 8) ,	(407 0) ,

• Net Bank Debt decrease of 19,9mln € in the last twelve months, decrease of 17,8mln € excluding positive FX effect of approx. 2,1mln €.

	H1 2022A	H1 2023A
Trade	387	377
Working	8	5
Capital	,	,
Sales	719	789
Reported	3	6
Rolling	,	,
Capital/Sales Trade Reported Working	9% 53 ,	8% 47 ,

H1 2023 Cash Flow Statement

(€ million)	H1 2022A	H1 2023A
CASH FLOW
EBIT	48,3	53,0
Adjustments for non monetary costs	16,1	20,3
Adjustments for taxes	(6 ,9)	(5 ,2)
Cash-flow from operating activities before changes in NWC 6	57,4	68,0
RS 1 Changes working capital in net	(95 ,5)	(81 ,3)
IF Operating cash-flow	(38 ,1)	(13 ,3)
D tangible and intangible Investments in DE assets	(7 ,2)	(17 ,9)
U Cash Flow Free	(45 ,3)	(31 ,2)
XCL financial Net expenses E	(8 ,6)	(15 ,2)
Other changes	3,8	(1 ,8)
Cash Flow Equity Free to	(50 ,0)	(48 ,2)
increase/reimbursement/dividends Capital	(14 ,0)	(7 ,6)
Changes Amortized in cost	(3 ,7)	(0 ,3)
Changes mark market hedging to	9,1	1,3
Effect of movements* FX rate	(18 ,7)	(0 ,9)
Changes in Financial Position IFRS 16 Net	(8 ,5)	1,9
M&A Effect (Creative Products Limited) Art	(1 ,7)	-
Changes in Financial Position Reported Net	(87 ,5)	(53 ,8)

* Related to Net Bank Debt

53,8mln € Please refer to NFP Reported analysis at page 13

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Appendix

H1 2023 Income Statement Reported

(€ million)	H1 2022A	% on Sales	H1 2023A	% on Sales
PROFIT & LOSS
Core Business Sales	390,6		415,6
Other revenues	6,2		5,0
Total revenues	396,8		420,6
Cost for Raw Materials and Supplies net Increase(decrease) inventory	(187,3)	(47,9%)	(197,2)	(47,4%)
Costs for Services and Use of Third-Party Assets	(57,6)	(14,8%)	(61,6)	(14,8%)
Personnel Costs	(75,9)	(19,4%)	(80,2)	(19,3%)
Other Operating Costs	(4,1)	(1,1%)	(4,8)	(1,2%)
Total operating costs	(325,0)	(83,2%)	(343,7)	(82,7%)
EBITDA	71,8	18,4%	76,9	18,5%
Depreciation and Amortization	(20,7)	(5,3%)	* (20,7)	(5,0%)
Write-Downs	(1,1)	(0,3%)	(1,1)	(0,3%)
EBIT	50,0	12,8%	55,1	13,3%
Financial income/expenses	(14,3)	(3,7%)	(20,8)	(5,0%)
Income/expenses from associates at equity method	0,4	0,1%	0,5	0,1%
PBT	36,1	9,2%	34,8	8,4%
Taxes	(8,8)	(2,2%)	(9,5)	(2,3%)
Total net profit (loss) of the period	27,3	7,0%	25,3	6,1%
Total net profit (loss) attributable to non controlling interests	2,4	0,6%	4,0	1,0%
Fila Group's total net profit (loss) of the period	24,9	6,4%	21,3	5,1%

* Of which: Tangible Assets 7,8mln €; IFRS 16 Tangible Assets 5,9mln €; Intangible Assets 7,0mln € (PPA 5,8mln €)

H1 2023 Income Statement Adjusted

(€ million)	2022A H1	% on Sales	2023A H1	% on Sales
P&L ADJUSTMENTS
REPORTED CORE BUSINESS SALES Total	390,6		415,6
Adjustments ADJUSTED CORE BUSINESS SALES	- 390,6		- 415,6
REPORTED EBITDA	71,8	18,4%	76,9	18,5%
IFRS 16 Impact	(7 5) ,		(8 0) ,
Total Adjustments	0 5 ,		3 4 ,
ADJUSTED EXCLUDED IFRS 16 EBITDA	64,8	16,6%	72,3	17,4%
REPORTED NET PROFIT	27,3	7,0%	25,3	6,1%
IFRS 16 Impact	0 9 ,		0 5 ,
Total Adjustments	0 4 ,		2 8 ,
ADJUSTED NET PROFIT EXCLUDED IFRS 16	28,6	7,3%	28,6	6,9%

H1 2023 Balance Sheet Reported

(€ million)	2022A	2023A H1
BALANCE SHEET
Intangible assets	446 5 ,	438 2 ,
Tangible Assets	166 2 ,	172 7 ,
Biological Assets	1 8 ,	1 7 ,
Financial Fixed Assets	4 2 ,	5 5 ,
Fixed Assets	618 7 ,	618 0 ,
Assets/Liabilities Other Non Current	24 0 ,	25 2 ,
Trade Working Capital	300 1 ,	377 5 ,
Other and Liabilities Current Assets	2 8 ,	(2 9) ,
Working Capital Net	302 9 ,	374 6 ,
Provisions & Funds	(82 8) ,	(82 4) ,
NET CAPITAL EMPLOYED	862 8 ,	935 4 ,
Shareholders equity	(427 7) ,	(446 4) ,
Financial Position Net	(435 2) ,	(489 0) ,
TOTAL NET SOURCES	(862 8) ,	(935 4) ,

Data in millions of euros; for precise data refer to 6M FILA financial report 12

H1 2023 NFP Reported

	H1 2022A	2022A	H1 2023A
NFP Reported	(524,8)	(435,2)	(489,0)
Mark to Market Hedging	(0,7)	3,2	4,5
IFRS 16	(95,8)	(88,5)	(86,6)
NFP Excl. IFRS16 and Mark to Market Hedging	(428,3)	(349,8)	(407,0)

H1 2023A Net Financial Position increase of 53,8mln € compared to 2022A.

FILA Shareholders

Total shares * Ordinary shares only

*Total shares 51.058.297 of which: Ordinary shares 42.976.441; Class B shares 8.081.856 (enjoy three votes each in accordance with Article 127 sexies of Legislative Decree No. 58/1998).

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