Fila — Investor Presentation 2023

Mar 22, 2023

FY2022 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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FY2022 Highlights

• ˗ Adjusted Core Business Sales of 764,6mln €, +17,0% (+111,1mln €) on the same period of the previous year (653,5mln € in FY2021); +10,1% at comparable FX rates (+65,8mln €). Asia +47,7mln € (+70,2%), Middle and South America +27,3mln € (+59,6%), partially offset by North America -8,6mln € (-2,9%). Europe and Other Countries substantially in line with the previous year.
• ˗ Indian Market at 109mln € (third parties revenues) in FY2022 in line with expectations, +92% on the previous year at comparable FX rates.
• ˗ Adjusted EBITDA, excluding IFRS 16 impact, of 110,3mln €, +1,1% (+1,2mln €) on the previous year (109,1mln € in FY2021) mainly related to the positive performance in Asia, Middle and South America (-2,3% at comparable FX rates, -2,5mln €).
• ˗ Adjusted EBITDA margin at 14,4% (16,7% in FY2021) due to different sales mix and growth in areas with lower margins as India and Mexico and to the inflation impact on raw material and transportation partially mitigated through by sale price increase.
• ˗ Total adjusted Net Profit excluding IFRS 16 impact, of 42,8mln €, -1,2mln € (-2,7%) on FY2021.
• ˗ Net Bank Debt of 351,6mln € (343,8mln € in FY2021) with a decrease in the last twelve months of 14,0mln €, excluding negative FX effect of approx. 14,4mln €, Upfront and consultancies Fees for Refinancing of approx. 6,0mln € and M&A effect of approx. 1,4mln €.
• ˗ Adjusted "Free Cash Flow to Equity"* at 29,2mln € (72,3mln € in FY2021), mainly due to the temporary increase in inventories, amplified by inflationary effects and by a still complex scenario, characterized by the persistence of the difficulties of the world supply chain worldwide, amplified post-pandemic by the Russian-Ukrainian crisis and by inflation. It is worth also to highlight that FY2022 "Free Cash Flow to Equity" was impacted by the recovery of investments and higher interests paid.

* Excluding the non recurrent cashout related to the Upfront and consultancies Fees for Refinancing of approx. 6,0mln €

FY2022 Core Business Sales

• Adjusted Core Business Sales of 764,6mln €, +17,0% on 2021A; +65,8mln € (+10,1%) at comparable FX rates, of which:

• ‒ By Geographic Area: Asia +47,7mln € (+70,2%), Middle and South America +27,3mln € (+59,6%) partially offset by North America -8,6mln € (-2,9%), Europe -0,6mln € (-0,2%) and Other Countries -0,03mln € (-0,7%).
• ‒ 0,2mln € adjustment in 2021A due to customer claims for Covid-19 mainly of Dixon Ticonderoga Company (US).

SALES BY GEOGRAPHICAL AREA

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

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FY2022 EBITDA Adjusted (Excluded IFRS 16)

• Adjusted EBITDA of 110,3mln €, +1,1% on 2021A; -2,5mln € (-2,3%) at comparable FX rates;
• 6,8mln € of extraordinary costs in 2022A mainly related to FILA consultancy fees (3,5mln € of which 2,2mln € for refinancing), Group reorganization costs/restructuring costs (3,1mln €) and Covid-19 pandemic (1,1mln €), partially offset by Shares-Based premium (-0,9mln €); 4,1mln € of extraordinary costs in 2021A mainly related to Covid-19 pandemic, FILA Group reorganization costs, consultancy fees and Shares-Based Premium.

ADJUSTED EBITDA BY GEOGRAPHICAL AREA

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FY2022 Adjusted Net Profit (Excluded IFRS 16)

• Total adjusted Net Profit of 42,8mln €, -1,2mln € (-2,7%) on 2021A;
• The adjustment of the Net Profit in 2022A for 10,9mln € mainly refers to consultancy fees and Upfront fees for Refinancing, Group reorganization costs/restructuring costs, Covid-19 pandemic and Shares-Based premium, net of taxes effects;
• The adjustment of the Net Profit in 2021A for 3,3mln € mainly refers to extraordinary operating costs for Covid-19 pandemic impact and reorganization/restructuring costs, net of taxes effects.

FY2022 Net Bank Debt and NFP (Excluded IFRS 16 and Mark to Market Hedging)

(€ million)	2021A	2022A
Cash and Cash Equivalents	137 2 ,	107 5 ,
Financial Liabilities and Receivables	(481 0) ,	(459 1) ,
Bank Debt Net	(343 8) ,	(351 6) ,
Amortized cost	3 7 ,	1 7 ,
Excl and Mark Market Hedging NFP IFRS16 to	(340 1) ,	(349 8) ,

• Net Bank Debt increase of 7,8mln € in the last twelve months, decrease of 14,0mln € excluding negative FX effect of approx. 14,4mln €, Upfront Fees and consultancy fees for Refinancing of approx. 6,0mln € and M&A effect of approx. 1,4mln €.

	2021A	2022A
Trade Working Capital	277 2 ,	300 1 ,
Sales Reported	653 3 ,	764 6 ,
Trade Capital/Sales Working Reported	42 4% ,	39 2% ,

	2021A	2022A
Leverage ratio	3 0 ,	3 1 ,
leverage ratio Covenant - SFA	3 9 ,	3 9 ,

FY2022 Cash Flow Statement

(€ million)	2021A	2022A
CASH FLOW
EBIT	74,8	68,9
Adjustments for non monetary costs	31,8	36,7
Adjustments for taxes	(9 ,1)	(17 ,6)
6 Cash-flow from operating activities before changes in NWC	97,4	88,0
RS 1 Changes in working capital net	3,2	(19 ,1)
IF cash-flow Operating	100,6	68,9
D tangible and intangible DE Investments in assets	(12 ,0)	(16 ,7)
U Cash Flow Free	88,6	52,2
XCL financial Net expenses E	(18 ,5)	(24 ,8)
Other changes	2,3	(4 ,2)
Cash Flow Equity Free to	72,3	** 23,2
Capital increase/reimbursement/dividends	(7 ,0)	(15 ,2)
Changes Amortized in cost	(2 ,5)	(1 ,9)
Changes mark market hedging to	8,9	13,0
Effect of movements* FX rate	(13 ,1)	(14 ,4)
Changes in Financial Position IFRS 16 Net	(2 ,4)	(1 ,2)
(Creative Limited) M&A Effect Products Art	-	(1 ,4)
Changes Financial in Net Position Reported	56,2	2,1

* Related to Net Bank Debt

** Including 6,0mln € of bank and consultancy fees related to Refinancing (approx. 29,2mln € excluding the outlay)

2,1 Please refer to NFP Reported analysis at page 13

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Appendix

FY2022 Income Statement Reported

(€ million)	2021A	on Sales %	2022A	on Sales %
PROFIT & LOSS
Sales Core Business	653,3		764,6
Other revenues	6,8		10,1
Total revenues	660,1		774,6
for Materials and Supplies Increase(decrease) Cost Raw inventory net	(299 ,9)	(45,9%)	(375 ,5)	(49,1%)
for and of Third-Party Costs Services Use Assets	(100 ,8)	(15,4%)	(119 ,8)	(15,7%)
Personnel Costs	(134 ,2)	(20,5%)	(152 ,3)	(19,9%)
Other Operating Costs	(5 ,3)	(0,8%)	(7 ,7)	(1,0%)
Total operating costs	(540 ,2)	(82,7%)	(655 ,4)	(85,7%)
EBITDA	119,9	18,4%	119,2	15,6%
and Depreciation Amortization	(40 ,8)	(6,2%)	* (42 ,2)	(5,5%)
Write-Downs	(0 ,6)	(0,1%)	(4 ,2)	(0,6%)
EBIT	78,5	12,0%	72,7	9,5%
income/expenses Financial	(24 ,4)	(3,7%)	(34 ,9)	(4,6%)
Income/expenses from method associates equity at	0,3	0,0%	0,8	0,1%
PBT	54,5	8,3%	38,6	5,1%
Taxes	(15 ,0)	(2,3%)	(8 ,3)	(1,1%)
profit (loss) of Total the period net	39,4	6,0%	30,3	4,0%
(loss) Total profit attributable non controlling interests net to	1,4	0,2%	5,0	0,7%
Fila Group's total profit (loss) of the period net	38,0	5,8%	25,3	3,3%

* Of which: Tangible Assets 16,1mln €; IFRS 16 Tangible Asset 11,8mln €; Intangible Assets 14,3mln € (PPA 12,0mln €)

FY2022 Income Statement Adjusted

(€ million)	2021A	% on Sales	2022A	% on Sales
P&L ADJUSTMENTS
REPORTED CORE BUSINESS SALES	653,3		764,6
Total Adjustments ADJUSTED CORE BUSINESS SALES	0,2		-
	653,5		764,6
REPORTED EBITDA	119,9	18,4%	119,2	15,6%
IFRS 16 Impact	(15 ,0)		(15 ,7)
Total Adjustments	4,1		6,8
ADJUSTED EBITDA EXCLUDED IFRS 16	109,1	16,7%	110,3	14,4%
REPORTED NET PROFIT	39,4	6,0%	30,3	4,0%
IFRS 16 Impact	1,2		1,6
Total Adjustments	3,3		10,9
ADJUSTED NET PROFIT EXCLUDED IFRS 16	44,0	6,7%	42,8	5,6%

FY2022 Balance Sheet Reported

(€ million)	2021A	2022A
BALANCE SHEET
Intangible assets	8 445 ,	446 5 ,
Tangible Assets	169 7 ,	166 2 ,
Biological Assets	1 9 ,	1 8 ,
Financial Fixed Assets	5 6 ,	4 2 ,
Fixed Assets	623 0 ,	618 7 ,
Assets/Liabilities Other Non Current	19 1 ,	24 0 ,
Trade Working Capital	277 2 ,	300 1 ,
Other and Liabilities Current Assets	(0 2) ,	2 8 ,
Working Capital Net	277 0 ,	302 9 ,
Funds Provisions &	(83 7) ,	(82 8) ,
NET CAPITAL EMPLOYED	835 4 ,	862 8 ,
Shareholders equity	(398 1) ,	(427 7) ,
Financial Position Net	(437 3) ,	(435 2) ,
TOTAL NET SOURCES	(835 4) ,	(862 8) ,

FY2022 NFP Reported

	2021A	2022A
NFP Reported	(437,3)	(435,2)
Mark to Market Hedging	(9,9)	3,2
IFRS 16	(87,3)	(88,5)
NFP Excl. IFRS16 and Mark to Market Hedging	(340,1)	(349,8)

2022A Net Financial Position decrease of 2,1mln € compared to 2021A.

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