Fope — Interim / Quarterly Report 2019

Sep 23, 2019

FOPE: REVENUE AND MARGINS HOLD STEADY IN 1H2019

• Revenue: Euro 15.53 million, +1.6% (1H2018: Euro 15.28 million)
• EBITDA: Euro 3.20 million (1H2018: Euro 3.16 million)
• Net Profit: Euro 1.86 million (1H2018: Euro 1.90 million)
• Net Financial Position: Euro 3.90 million (FY2018: Euro 0.11 million)
• Equity: Euro 16.57 million (FY2018: Euro 15.98 million)

Vicenza, 23 September 2019

The Board of Directors of FOPE (FPE:IM), a leading Italian fine jewellery company listed on AIM Italia, approved today the Interim Consolidated Financial Statements at 30 June 2019, subject to a limited audit.

Diego Nardin, FOPE Chief Executive Officer: "The results for the first six months of 2019 allow us to confirm our full-year guidance. Notably, margins remained in line with 31 December 2018, the order book is growing and in line with budget estimates, and, because of seasonality, revenue for the first half of the year does not yet reflect the rise in sales. The new collections launched in early 2019 have been well received by the market, and this helped us achieve our sales targets already in the first few months of the year.

Consolidated highlights at 30 June 2019

Net Revenue amounted to Euro 15.53 million, +1.6% compared to 1H2018 (Euro 15.28 million). The increase was driven by rising sales volumes in international markets (accounting for 81% of the total), and specifically Europe and America, where the FOPE brand is continuing to expand its presence. This had a positive impact on sales and is reflected in the investments in marketing and communication intended to support the distribution network. The Italian market grew compared to 1H2018, largely because of the contribution from sales volumes at authorised retailers in tourist areas.

EBITDA amounted to Euro 3.20 million, in line with Euro 3.16 million in 1H2018, resulting in a 20.6% EBITDA margin (20.7% in 1H2018).

EBIT totalled Euro 2.57 million, compared to Euro 2.62 million in 1H2018. The Pre-tax profit for the period amounted to Euro 2.43 million, compared to Euro 2.63 million in 1H2018.

Net Profit totalled Euro 1.86 million, compared to Euro 1.90 million in 1H2018.

The Net Financial Position amounted to Euro 3.90 million (Euro 0.11 million at 31/12/2018) and was influenced by the change in inventories of fine gold, the dividend payout, and progress payments for the expansion of the Group's head office.

Equity stood at Euro 16.57 million (Euro 15.98 million at 31/12/2018).

Net Invested Capital, totalling Euro 20.47 million (Euro 16.09 million at 31/12/2018), included Euro 10.67 million in Non-current assets (Euro 9.30 million at 31/12/2018), Euro 12.34 million in Net Working Capital (Euro 9.55 million at 31/12/2018), and Euro 2.53 million in Provisions (Euro 2.76 million at 31/12/2018).

Significant events during and after the reporting period

In March 2019, at Baselworld—an international trade show—FOPE launched a major rebranding project that involved redesigning its logo and image as well as creating new materials according to an innovative concept and in line with the elegance that has always been the brand's hallmark.

In April 2019, the Parent FOPE S.p.A. 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.

There were no significant events after 30 June 2019.

Outlook

Based on the full-year guidance, the Group expects to increase its sales volumes and deliver a profit for 2019. The results for the first half of year confirm such forecasts and, therefore, the above expectations.

Meeting with the financial community

FOPE announces that on 27 September 2019, it will attend the X Edition of LUGANO INVESTOR DAY, organised by IR Top Consulting with the support of PMI Capital and Borsa Italiana. During the event, which will begin at 8:30 a.m. at the Splendide Royal Hotel (Azalea Room), Riva Antonio Caccia, 7 - Lugano (CH), Diego Nardin will meet with the Swiss financial community during the plenary session, scheduled for 10:30 a.m., as well as in one-to-one and group meetings. The Company Profile will be made available in advance of the event at the company's website www.fopegroup.it in the Investor Relations section.

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 31 million in revenues in 2018, 37 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 selected 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 Piazza San Marco, Venice. 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. These exquisitely elegant collections stand out for their comfort and portability. FOPE has obtained the voluntary TF (Traceability & Fashion) certification, and is a certified member of the Responsible Jewellery Council.

ISIN of FOPE common shares: IT0005203424 – ISIN of "Warrant FOPE 2016-2019": IT0005203432 – ISIN of "FOPE POC 4.5% 2016-2021": IT0005203671

Contacts

IR Top Consulting Investor Relations Maria Antonietta Pireddu - m.pireddu@irtop.com Media Relations Domenico Gentile, Antonio Buozzi - ufficiostampa@irtop.com T +390245473884 Via C. Cantù, 1 – 20123 Milan www.aimnews.it

Integrae SIM NomAd e Specialist Via Meravigli 13 – 20123 Milan T +390287208720 info@integraesim.it

CONSOLIDATED INCOME STATEMENT

Euro	30/06/2019	30/06/2018
Revenue	15,531,464	15,282,202
Other revenue and income	502,121	207,155
External costs	10,955,688	10,754,077
Added value	5,077,897	4,735,372
Personnel costs	1,877,902	1,578,540
EBITDA	3,199,995	3,156,832
%	20.6%	20.7%
Depreciation and amortisation	634,891	535,541
EBIT	2,565,104	2,621,291
%	16.5%	7.2%
Financial income and charges	(132.690)	12,134
Pre-tax profit	2,432,414	2,633,425
Earnings before Tax	575,189	733,679
Net profit	1,857,225	1,899,655
%	12.0%	12.4%

CONSOLIDATED BALANCE SHEET

Euro	30/06/2019	31/12/2018
Net intangible fixed assets	2,073,664	2,094,320
Net tangible fixed assets	8,392,668	7,009,835
Holdings/equity and other financial fixed assets	200,010	200,010
Non-current assets	10,666,342	9,304,165
Warehouse stock	7,786,599	5,703,656
Trade receivables	8,740,147	7,925,453
Current receivables	697,003	767,562
Cash flow hedging op. cr. position	1,142,556	536,766
Short-term assets for the year	18,366,305	14,933,437
Trade payables	4,163,638	4,230,634
Current liabilities	1,862,530	1,156,666
Short-term liabilities for the year	6,026,168	5,387,300
Net working capital	12,340,137	9,546,137
Severance pay fund	849,098	892,886
End-of-mandate indemnity fund and other funds	1,615,422	1,747,044
Expected cash flow hedging op. fund	70,436	121,675
Provisions for risks and non-current charges	2,534,956	2,761,605
Total assets	20,471,523	16,088,697
Share capital and equity reserve	(15,800,240)	(15,683,424)
Expected cash flow hedging op. reserve	(770,707)	(294,535)
Shareholders' equity	(16,570,947)	(15,977,959)
Medium to long-term financial position	(7,163,192)	(5,707,768)
Short-term financial position	3,262,614	5,597,033
Net financial position	(3,900,578)	(110,735)
Equity and net financial position	20,471,525	16,088,694

CONSOLIDATED NET FINANCIAL POSITION

	30/06/2019	31/12/2018
NET position short Bank reports and cash values	6,567,322	8,013,610
Short-term financial position	(3,304,709)	(2,416,577)
Net short-term financial position	3,262,613	5,597,033
Convertible bond (POC)	(1,200,000)	(1,200,000)
Medium to long-term financial position	(5,963,192)	(4,507,768)
Net financial position	(3,900,579)	(110,735)

CONSOLIDATED CASH FLOW STATEMENT

Euro	30/06/2019	31/12/2018
Profit for the year	1,857,225	3,346,886
Portion of amortisation	634,891	1,131,772
Changes in severance pay and end-of-mandate indemnity funds	(8,145)	(183,670)
Gross self-financing	2,483,971	4,294,988
Changes in trade receivables	(841,740)	48,619
Changes in other short-term receivables	70,091	38,630
Changes in inventories	(2,082,943)	(960,931)
Changes in short-term payables	498,648	1,086,149
Changes in net working capital	(2,355,944)	212,467
Cash flow generated by operations	128,027	4,507,455
Changes in tangible and intangible fixed assets	(1,997,069)	(3,489,326)
Changes in financial fixed assets	466	(78,798)
M/L term financing reimbursement	(686,444)	(2,641,684)
Uses of financing	(2,683,047)	(6,209,808)
Financing acquisition	3,030,000	5,970,000
Convertible bonds issue	0	0
Changes in shareholders' equity reserve	(1,740,409)	287,329
Sources of financing	1,289,591	6,257,329
Cha. expected cash flow hedging op. cr. pos.	(605,790)	(430,111)
Cha. expected cash flow hedging op. fund	(51,239)	(167,560)
Cha. expected cash flow hedging op. reserve	476,172	425,744
Cha. expected cash flow hedging op. positions	(180,857)	(171,927)
Net cash flow	(1,446,286)	4,383,049
Net position banking relationships as at 30/06/2019	6,567,323	0
Net position banking relationships as at 31/12/2018	8,013,609	8,013,609
Net position banking relationships as at 30/06/2018		0
Net position banking relationships as at 31/12/2017	0	3,630,560
Changes in net financial position	(1,446,286)	4,383,049