FOPE REPORTS SIGNIFICANT GROWTH FOR 2019: REVENUES +11.9%, EBITDA +11.2%

International revenues accounted for 82%; positive performance also in Italy

Revenues: Euro 35.0 million, +11.9% (FY2018: Euro 31.3 million)
EBITDA: Euro 6.8 million, +11.2% (FY2018: Euro 6.1 million)
EBITDA MARGIN: 19.4% (FY2018: 19.5%)
Net Profit: Euro 4.8 million (FY2018: Euro 3.3 million)
Net Financial Position: Euro 0.1 million (FY2018: Euro 0.1 million)
Equity: Euro 20.8 million (FY2018: Euro 16.0 million)

Vicenza, 26 March 2020

The Board of Directors of FOPE (FPE:IM), a leading Italian fine jewellery company listed on AIM Italia, approved today the Consolidated Financial Statements and the Draft Separate Financial Statements at 31 December 2019.

Diego Nardin, FOPE Chief Executive Officer: "2019 ended on a positive note, with sales and other indicators up steadily as well as a robust financial position. Sales rose in the main international markets where we are focusing our investments, showing that the actions we have taken are in the right direction.

The increase in volumes, combined with the continued efficiency of our operations, caused EBITDA to improve in absolute terms (Euro 6.8 million) and to remain in line with the prior year in terms of margin.

Notably, November 2019 saw the opening of Boutique Fope on London's renowned Old Bond Street. The goal of this ambitious project was to bring the Fope brand to a location with international allure such as London to boost brand awareness in the British market and, most importantly, the global market.

Amid the health emergency associated with the COVID-19 outbreak, which is causing an economic downturn across the world, we have been maintaining contact and relationships with our customers through smart working. The Company introduced new jewellery collections at the VicenzaOro trade show in January 2020 and through other marketing initiatives prior to the emergency. Our product is manufactured entirely in-house and does not rely on supplies of products and components that could potentially be disrupted as a result of the emergency. Production operations are currently suspended in accordance with the law".

Consolidated highlights at 31 December 2019

Net revenues totalled Euro 35.0 million, up +11.9% from Euro 31.3 million in 2018 largely because of the company's international performance, especially in Europe and the US.

EBITDA amounted to Euro 6.8 million, up +11.2% from Euro 6.1 million in 2018, resulting in a 19.4% EBITDA margin (19.5% in 2018). EBIT totalled Euro 5.4 million, up 9.4% from 2018 (Euro 5.0 million).

Pre-tax profit for the year amounted to Euro 5.0 million, up from Euro 4.7 million in 2018.

Net profit for the year totalled Euro 4.8 million, rising steadily compared to Euro 3.3 million in 2018—especially thanks to the positive impact of the application of the so-called "Patent Box" on the tax expense for the year.

On 18 April 2019, the Company finalised an agreement with the competent office of the Italian Revenue Agency establishing the methods and bases for measuring the amount of income eligible for the so-called "Patent box", as per Article 1, paragraphs 37-44 of Italian Law no. 190 of 23 December 2014, with respect to the fiscal years 2016 through 2020. The "Patent box" is a special tax regime applicable to companies that generate income by directly or indirectly using patents, trademarks, model designs, original works, and other intangible assets. Specifically, in the reporting period FOPE benefited from the tax impact of the "Patent Box", as the tax expense for 2019 was reduced by Euro 498,568 and the tax expense for previous years was reduced by Euro 680,690.

The Net Financial Position totalled Euro 0.1 million, essentially unchanged from the prior year (Euro 0.1 million) despite the investment plans carried out, as the Company carefully managed working capital and, specifically, trade receivables.

Equity stood at Euro 20.8 million, compared to Euro 16.0 million at 31 December 2018. Equity reflects the increase in share capital caused by two factors:

the conversion of outstanding Warrants, amounting to Euro 137,165.10 and resulting in the issue of 35,535 new shares. The conversion refers to the third and final window for exercising the Warrants;
the voluntary conversion of part of the 2016 2021 4.5% Convertible Bond, amounting to Euro 993,600 and resulting in the issue of 258,336 new shares. To date, there are 2,064 convertible bonds outstanding with a total nominal amount of Euro 206,400.

In accordance with the Italian accounting standard OIC32, Equity includes the Reserve for Hedges of Planned Transactions; in 2019, this reserve added Euro 0.85 million to Equity, whereas in 2018 it had a positive Euro 0.29 million impact. The Hedges the Company put in place are intended to stabilise the price of gold as well as exchange rates.

Distribution of the net profit for the year

With respect to the allocation of the profit for the year, totalling Euro 4,677,274, the Board of Directors, considering the uncertainty associated with the emergency created by the Covid-19 outbreak, relative to the operating and financial guidance already issued for 2020, proposesto allocate the profit for the year to retained earnings, submitting any decision in this regard to the General Meeting convened to approve the annual Financial Statements, with the hope that more certainty will be forthcoming.

Significant events after the reporting period

On 21 February 2020, Fope's majority shareholders finalised an agreement to sell their shares to CoMo S.r.l., which is not currently part of the ownership structure (see the Press Release published on the same date).

Outlook

The approval of the Draft Financial Statements comes amid the health emergency associated with the COVID-19 outbreak, which is causing an economic downturn across the world. To date there is not enough information to simulate its impact on the company's economic and financial performance.

With respect to business operations, the Company is maintaining contact and relationships with its customers through smart working. Fope introduced new jewellery collections at the VicenzaOro trade show in January 2020 and through other marketing initiatives prior to the emergency. The product is manufactured entirely in-house and does not rely on supplies of products and components that could potentially be disrupted as a result of the emergency. Considering the above as well as currently available information, we believe that the going concern assumption is appropriate.

Fope's production operations are temporarily suspended in accordance with the Italian Prime Minister's Decree of 22 March 2020, as they are not included in the list of business operations allowed to continue.

Convening of the Annual General Meeting

The Board of Directors has resolved to convene the General Meeting, granting the Chair of the Board all the powers required to convene the meeting when he sees fit and in accordance with the law and the by-laws—including through special proxies.

The press release is available on the websites www.fopegroup.com and

FOPE (FPE:IM) is a historic Italian jewellery company established in Vicenza in 1929 and a leader in the fine jewellery market. With Euro 35 million in revenues in 2019, 46 employees, and a strong international presence (it generates 82% of its revenues abroad), FOPE pursues a strategic growth project based on expanding and consolidating the brand in the international luxury market by leveraging 4 competitive advantages: product quality, perfect combination of Made-in-Italy craftsmanship and technology, recognisable design, and long-standing customer relationships. FOPE operates globally through a well-established and select network

of over 600 stores in 50 countries (with a direct presence in the US, Arab, and UK markets through the subsidiaries FOPE USA Inc., FOPE Services DMCC, and FOPE Jewellery Limited, respectively). The business model focuses on maintaining direct business relationships with multi-brand jewellery retailers (either independent or part of groups) that specialise in luxury products such as fine jewellery and watches. FOPE does not work with intermediaries: instead, it enters into direct partnerships that ensure the loyalty and reliability of the customer/retailer as well as an outstanding after-sale service. In 2015, the Company opened its first mono-brand store in Venice's Piazza San Marco. The entire production cycle—from prototyping to the shipping of finished jewels to over 50 countries takes place inside the headquarters in Vicenza. FOPE's investments in R&D have led to an extremely high level of standardisation and automation, with proprietary technology that allows to optimise processes and times in order to deliver products of world-class quality. FOPE's jewels range from timeless classics featuring the iconic Novecento mesh to the more recent Flex'it lines, which include the original bracelets made flexible thanks to a patented system of tiny gold springs embedded in the mesh—strikingly elegant collections that always stand out in terms of comfort and portability. FOPE has obtained the voluntary TF (Traceability & Fashion) certification and is a certified member of the Responsible Jewellery Council.

ISIN ordinary shares: IT0005203424 –ISIN "FOPE POC 4.5% 2016-2021": IT0005203671

CONTACTS

IR TOP CONSULTING

INVESTOR RELATIONS Maria Antonietta Pireddu, [email protected] │ Federico Nasta, [email protected] | T +39 0245473884

FINANCIAL MEDIA RELATIONS Domenico Gentile, [email protected] │ Antonio Buozzi, [email protected] | T +39 0245473884

INTEGRAE SIM

NOMAD | T +39 02 87208720 │ Via Meravigli 13, Milan

Attachments:

Consolidated Income Statement
Consolidated Balance sheet
FOPE SpA Income Statement
FOPE SpA Balance sheet

CONSOLIDATED INCOME STATEMENT

Euro	31/12/2019	31/12/2018	Change
Net revenues	34,964,396	31,258,572	3,705,824
Other incomes	965,714	378,982	586,732
Operating costs	(25,701,633)	(22,257,353)	(3,444,280)
Added value	10,228,477	9,380,201	848,276
Cost of personnel	(3,447,007)	(3,283,723)	(163,284)
EBITDA	6,781,470	6,096,478	684,992
Depreciation and Amortization	(1,348,416)	(1,131,772)	(216,644)
EBIT	5,433,054	4,964,706	468,348
Financial income and expense	(482,471)	(220,920)	(261,551)
EBT	4,950,583	4,743,786	206,797
Tax	(103,560)	(1,396,900)	1,293,340
Net Profit	4,847,023	3,346,886	1,500,137

CONSOLIDATED BALANCE SHEET

Euro	31/12/2019	31/12/2018	Change
Net intangible assets	2,545,614	2,094,319	451,295
Net tangible assets	10,069,456	7,009,835	3,059,621
Financial assets	10	200,010	(200,000)
Fixed Assets	12,615,080	9,304,164	3,310,916
Inventories	6,202,041	5,703,656	498,385
Account Receivable	8,295,128	7,925,453	369,675
Other Receivables	1,793,771	767,561	1,026,210
Hedging op. cr.position	1,356,226	536,766	819,460
Current Asset	17,647,166	14,933,436	2,713,730
Accounts Payables	5,668,042	4,230,634	1,437,408
Oher Payables	767,393	1,156,666	(389,273)
Current liabilities	6,435,435	5,387,300	1,048,135
Net Working Capital	11,211,731	9,546,136	1,665,595
Severance pay Fund	869,491	892,886	(23,395)
Agencies indemn.Fund and Other	1,926,468	1,747,044	179,424
Hedging op.Fund	167,235	121,675	45,560
Total funds	2,963,194	2,761,605	201,589
Invested capital	20,863,617	16,088,695	4,774,922
Share capital and equity reserve	(19,919,314)	(15,683,425)	(4,235,889)
Hedging op.Reserve	(852,821)	(294,535)	(558,286)
Shareholders' equity	(20,772,135)	(15,977,960)	(4,794,175)
M/L term financial position	(5,630,087)	(5,707,768)	77,681
Short-term financial position/(cash)	5,538,605	5,597,033	(58,428)
Net Position Debt/(cash)	(91,482)	(110,735)	19,253
Equity and Net Position Debt	20,863,617	16,088,695	4,774,922

FOPE SPA INCOME STATEMENT

Euro	31/12/2019	31/12/2018	Change
Net revenues	34,964,397	31,258,572	3,705,825
Other incomes	969,174	494,799	474,375
Operating costs	(26,628,827)	(23,196,989)	(3,431,838)
Added value	9,304,744	8,556,382	748,362
Cost of personnel	(2,787,941)	(2,560,644)	(227,297)
EBITDA	6,516,803	5,995,738	521,065
Depreciation and Amortization	(1,311,761)	(1,103,266)	(208,495)
EBIT	5,205,042	4,892,472	312,570
Financial income and expense	(480,516)	(219,974)	(260,542)
EBT	4,724,526	4,672,498	52,028
Tax	(47,252)	(1,395,794)	1,348,542
Net Profit	4,677,274	3,276,704	1,400,570

FOPE SPA BALANCE SHEET

Euro	31/12/2019	31/12/2018	Change
Net intangible assets	2,320,603	2,094,319	226,284
Net tangible assets	10,014,428	6,983,712	3,030,716
Financial assets	134,118	334,118	(200,000)
Fixed Assets	12,469,149	9,412,149	3,057,000
Inventories	6,202,041	5,703,656	498,385
Account Receivable	8,295,128	7,925,453	369,675
Subsidiaries Receivables	116,080	111,004	5,076
Other Receivables	1,545,344	649,394	895,950
Hedging op. cr.position	1,356,226	536,766	819,460
Current Asset	17,514,819	14,926,273	2,588,546
Accounts Payable	5,253,252	3,825,437	1,427,815
Subsidiaries Payables	597,428	686,337	(88,909)
Oher Payables	1,131,029	1,535,873	(404,844)
Short term debt	6,981,709	6,047,647	934,062
Net Working Capital	10,533,110	8,878,626	1,654,484
Severance pay Fund	(869,491)	(892,886)	23,395
Agencies indemn.Fund and Other	(1,324,304)	(1,233,233)	(91,071)
Hedging op.Fund	(167,235)	(121,675)	(45,560)
Invested Capital	20,641,229	16,042,981	4,598,248
Share capital and equity reserve	19,527,588	15,469,620	4,057,968
Hedging op.Reserve	852,821	294,535	558,286
Shareholders' equity	20,380,409	15,764,155	4,616,254
M/L term financial position	5,630,087	5,707,768	(77,681)
Short-term financial position/(cash)	(5,369,267)	(5,428,942)	59,675
Net Position Debt/(cash)	260,820	278,826	(18,006)
Equity and Net Position Debt	20,641,229	16,042,981	4,598,248

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