Fila — Management Reports 2023

May 31, 2023

Sales and Distribution

FRANCESCO MANIGLIA

Chief Commercial & Sales Officer

FY2022 Sales By Geographic Area

Adjusted Core Business Sales of 764,6 mln ¤, +17,0% on FY 2021; +65,8 mln ¤ (+10,1%) at comparable FX rates, of wich:

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%).

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

Q1 Sales by Geographical Area

Adjusted Core Business Sales of 178,7mln ¤, +7,6% on Q1 2022A; +12,4mln ¤ (+7,5%) at comparable FX rates, of which:

Asia +7,8mln ¤ (+29,1%), Middle and South America +4,4mln ¤ (+29,2%), North America +1,7mln ¤ (+2,5%) and Other Countries +0,1mln ¤ (+13,6%) partially offset by Europe -1,6mln ¤ (-2,8%).

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

Q1 2023 channel trend

• Q1 number and are inline with the 2023 expected growth.
• Positive trend in all the different channels with the exception of E-commerce (Amazon). Our main key customers improved their e-commerce platform in order to support business growth.
• Strategic channels to build out medium long term business growth: Retailer, School & Office Suppliers, Wholesalers. On these three specific channels, we expect in 2023 a growth rate between 2% and 4%.

	Q1 2022	Q1 2023	Q1 2023 VS Q1 2022	Q1 2023 WEIGHT ON TOTAL SALES %
	March	March
Wholesalers / Distributors	59.785.576	66.539.979	+11,30%	37,24%
Retailers	40.104.425	42.843.860	+6,83%	23,98%
School and Office Suppliers	23.861.360	25.445.003	+6,64%	14,24%
Large Retailers (Mass Market)	17.236.252	18.826.740	+9,23%	10,54%
B2B	10.652.097	11.579.352	+8,70%	6,48%
E-Commerce	8.654.560	6.852.332	-20,82%	3,83%
Exporter	2.908.941	3.614.898	+24,27%	2,02%
Other	2.816.918	2.83.570	+5,92%	1,67%
Channel	166.019.961	178.688.339	+7,63%	100,00%

AMAZON EU- Turnover (2019-2022) Overview*

Amazon in Europe registered a relevant growth during the pandemic period (2022 numbers + 94% vs pre-pandemic), but a slow down in 2022 compared to 2021 bubble.

* Includes Italy (Fila & Maimeri), Spain, France, Germany, Uk and Poland.

Strategic commercial actions to drive future sales and profitability growth

Improve sales organization

Improve execution of our product strategy

Sales organization background

• The strength of our brand portfolio is an asset that distinguishes us from competition in every market.
• On the other hand, we need to manage an operative complexity: each branch manages in average 4 BU, 15 brands, 15.000 SKU's and 4 sales channels.
• Main BUs are Fine Art and School and office, both must be developed to their fullest potential.
• Our branches sales forces manage the entire portfolio. They focus on the historical BU missing some opportunities on the other ones. ( excluding Dixon US).

Sales organization – objectives and actions

OBJECTIVES

• Enhance brand portfolio by focusing on each BU (main priorities Fine Art and School and Office).
• Create strong sales team competences to manage each BU with the right approach.

ACTIONS

• Market assessment to define our priorities by BU in each country (Markets Share and potential growth).
• Creation of 2 dedicated sales forces for top BUs (School and Fine art).
• Scope: European branches.
• Timing: assessment in 2023; test in selected branches in 2024
• Roll out in 2025.

EXPECTED RESULTS

• Efficient brand portfolio management.
• Close the gaps in the weakest BU vs potential improvement in market share.
• Drive incremental sales and margins.

Product strategy execution background

• We are in a very competitive environment: customers are focusing more and more on price, very often leaving aside brand awareness, quality and service.
• We are choosing different battles than that of the price in order to ensure our business and our profitability.
• We want to improve vs competition in order to build a solid relationship with our customers improving our position from "sellers" to "consultant/partner" based on quality and service.
• Currently, our execution is still from our enhanced product strategy. Therefore, we must cover this gap.
• Starting point: connect marketing product strategy to channels and customers (by cluster) in order to improve our execution.

Product strategy execution through the new tool "Salesware" - objectives and actions 1/2

OBJECTIVES

• Reduce the gap between the product strategy and the current execution and improve our channel distribution.
• Move customer focus from price to product quality, sell out performance and inventories optimization.
• Improve sales growth and profitability driving product mix.
• Improve sales team visits in terms of efficiency in order to spend more time to focus on new prospect.

ACTIONS

"Salesware product strategy" the new tool created will allow us to simplify customers' management, reducing the gap from the product strategy and the current execution, prepare sales visits and monitoring execution and results based on the business trend analysis and the selected KPY's

• KPY's definition that allow us to manage the customers according to the Group strategies and goals
• Sales team involved in training sessions
• Roll out in selected European branches (Feb 2024)
• Go live in the European scope: end 2024

Product strategy execution through the new tool "Salesware" - objectives and actions 2/2

EXPECTED RESULTS

Acceleration in growth estimate: extra + 5% on the already existing expected growth within the European perimeter.

• Sales key account: deep preparation and better customer management, moving from seller to consultant.
• Customer visit efficiency and effectiveness: negotiation on top opportunities and selected KPI's and visit timing reduction by 30% with positive effect on route compliance.

Improve our customers partnership: loyalty, the sell out acceleration and inventory reduction.