Unieuro — Earnings Release 2020

Nov 12, 2020

RECORD SEMESTER IN THE MIDST OF UNCERTAINTY

H1 2020/21 Results 12 November 2020

Disclaimer

IFRS-16

One year after the first adoption of IFRS 16, the transitional phase during which Unieuro's financial reporting was based on adjusted data and in continuity with the previous accounting standard IAS 17 and the interpretations thereof has ended.

From the quarter under review, in line with practices that were gradually established among retailers listed on international markets, the Company will therefore comment only on the economic figures after the application of the above accounting standard, focusing on Adjusted EBIT and Adjusted Net Profit.

On the other hand, net debt and cash flow will still not include the notional component linked to the application of IFRS 16.

Safe Harbour Statement

This documentation has been prepared by Unieuro S.p.A. for information purposes only and for use in presentations of Unieuro's results and strategies.

This presentation is being furnished to you solely for your information and may not be reproduced or redistributed to any other person or legal entity.

This presentation might contain certain forward looking statements that reflect the Company's management's current views with respect to future events and financial and operational performance of the Company and its subsidiaries.

Statements contained in this presentation, particularly regarding any possible or assumed future performance of Unieuro S.p.A., are or may be forward-looking statements based on Unieuro S.p.A.'s current expectations and projections about future events, and in this respect may involve some risks and uncertainties. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Unieuro S.p.A. to control or estimate.

You are cautioned not to place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this presentation. Unieuro S.p.A. does not undertake any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation.

Any reference to past performance or trends or activities of Unieuro S.p.A. shall not be taken as a representation or indication that such performance, trends or activities will continue in the future.

This presentation has to be accompanied by a verbal explanation. A simple reading of this presentation without the appropriate verbal explanation could give rise to a partial or incorrect understanding.

This presentation is of purely informational and does not constitute an offer to sell or the solicitation of an offer to buy Unieuro's securities, nor shall the document form the basis of or be relied on in connection with any contract or investment decision relating thereto, or constitute a recommendation regarding the securities of Unieuro.

Unieuro's securities referred to in this document have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Due to rounding, numbers presented throughout this presentation may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Agenda

• Highlights

• Market & Business Performance
• Financials
• Going Forward

Highlights – Key Messages

Business resilience to Covid-19 and effective contingency actions driving to unexpected record-breaking H1 2020/21 results

Good performance of revenues in September and October. Limited impact so far from the second wave of pandemic

Ready to tackle any scenario by leveraging on our rapid response ability and omnichannel strategy

Restart of business expansion through internalisation of shop-in-shops, indirect coverage of Naples and new store openings

Agenda

• Highlights
• Market and Business Performance
• Financials
• Going Forward

Market Scenario: Channel Mix Impacted by Covid-19

Growth: strong increase in Q2 fully offsetting fall in Q1

• Offline: driven down by lockdown and social distancing rules in Q1, especially hard on Tech Superstores
• Online: extraordinary growth mitigating brick-and-mortar sales decrease

Competitive Scenario: Mass Merchandisers (incl. pure players) +20% and Electrical Specialists +10% benefitting from the emergency context. Tech Superstore (-1%) recovering in Q2

Internet penetration: approx. 26% in H1 2020/21, +10 p.p. yoy

Unieuro: online success and offline recovery in Q2 enabling the Company to overperform again the consumer market

Grey goods: strong increase for IT products (+37%), supported by underlying consumption trends (i.e. smart working, e-learning), arising from the need to connect and communicate during a long forced isolation as well as "new normal"

White goods: recovery in Q2 after a negative Q1 (-11%).:

• MDA, whose purchase is more frequently linked to in-store experience, suffering lockdown
• SDA (+12.8%) boosted by domestic food preparation and household cleaning (especially high-end vacuum cleaners)

Brown goods: strong decrease in TV sales, also because of sport events cancellation, despite impressing online performance

Unieuro(1): buoyant online performance in all product categories despite competitive pressure from pure players. Positive effect from the prompt release of omnichannel services.

Notes: Unieuro H1 ends on 31 August. Source: Company elaborations on Gfk data. (1) Unieuro's growth per product category and single channel only concerns the Consumer segment net of Services, Entertainment and products outside the scope of consumer electronics, while including Travel sales.

Unieuro Managing Exceptional Business Volatility

Epidemic outbreak in Italy	Phase 1: Total lockdown (not concerning CE sector) (9 March)	Phase 2: Gruadual reopening & social distancing (4 May)		Wave 2 of Pandemic (October)	Local lockdowns and new restrictions
	Q1 2020/21		Q2 2020/21

• March and April sales -30% yoy, May +20%
• Lockdown effect on physical channels, partially offset by booming e-commerce (+142.8%)
• Limited impact of the emergency on profitability thanks to management timely actions

• Corporate soundness intact

• Exceptional sales performance across all channels and product categories

• Gradual recovery in store traffic coupled with high conversion rate
• Strong growth in profitability and cash flow, also thanks to the non-replicable benefits of undertaken actions
• Good sales performance in September and October
• Restrictive measures currently in place imposing the closure on public holidays and preholidays of ca. 50% of DOS up to December 3
• Limited impact so far

PEOPLE PROTECTION MEASURES
P&L PROTECTION MEASURES		LONG-TERM POSITIVE OUTCOME (i.e. digital flyer, variable rents)
BALANCE SHEET PROTECTION MEASURES			STRUCTURAL BENEFITS EMERGED (i.e. lower sustainable inventory level)

Long-Term Strategy Always in Place

8

STRATEGIC PILLAR	Proximity	Experience	Retail Mix
	• 4 new DOS, two of which inside Spazio Conad hypermarkets and one within the scope of partnership with Finiper • Direct stores shipping directly to customers during pandemic peak, fulfilling online orders also when closed to the public • 2 Unieuro by Iper shop-in-shops switched from affiliates to DOS in view of total internalization of the business	• Gradual and careful restart of store refurbishment activity • "Steward" new figure: a store employee specifically trained to manage traffic in store, respecting rules and optimizing people flows • Pay&Collect option introduced to satisfy new social distancing needs: order and payment online, pick-up in store • Launch of new omnichannel services aiming at safeguarding customers' health and time during the pandemic	• White goods and services online offer strengthened to face temporary and structural evolution of consumer habits
		Supply Chain: Piacenza logistics hub always operational
ENABLER		Brand Equity: 2,000 smartphones donated to hospitals, underlining how Unieuro is close to the Italian people
		Partnership with Suppliers: strong support by vendors during the Covid	peak

Facing Restrictions Through New Omnichannel Services

An innovative omni- channel project to face current and structural changes in consumer habits

• Covid crisis and "new normal" leading to a quick evolution of customer needs and behaviour
• Disruption to be managed rethinking the customer experience
• 5 new services, all free
• 4 services – aTUperTU, CIAOfila, AUTOritiro and CLICCA&ritira – already in place and aimed at feeling safer and saving time
• Remote advise via videocall currently available for some products and brand (i.e. Samsung, Dyson)

Personalized in-store one-to-one advise, to be booked in advance through Unieuro's digital plaform

Product pick-up outside the shop, without even exiting the car, through app notifications

Booking of entrance time slot via website or app, thus avoiding time waste and queues

Advanced click&collect service, bookable online, available all around the shop and not only at the cashier

Strategic Rationale

• Engaging "heavy digital" and "smart multichannel" customers
• Stimulating higher traffic, appeal and customer loyalty, during Phase 2 and going on
• Focusing on advisory and upselling activities, boosting the whole level of customer service
• Saving people's time and respecting public and internal safety measures by monitoring accesses to store

• Leveraging Unieuro's digital presence (website, app, Google My Business) to boost "drive-to-store"

Agenda

• Highlights
• Market and Business Performance
• Financials
• Going Forward

H1 2020/21 Key Financials

Net Financial Debt (Cash) (€m)

Adj. Net Income/(Loss) (€m)

Adj. Free Cash Flow (€m)

Net Working Capital (€m)

Sales

Strong rebound in Q2 (+15.2%) compensating lockdown effects on Q1 (-9.5%) and leading to a new record

• March and April (epidemic peak in Italy): sales -30% yoy
• − restrictions imposed by Authorities
• − 16 days of voluntary shutdown of the entire DOS network
• − forced switch to e-commerce and changes in consumer habits

• From May to August (start of "Phase 2"): sales recovery

• − softening of lockdown regulation
• − rising demand on almost all product category
• − quiet summer bringing a gradual recovery of store traffic to pre-Covid levels

• Like-for-like sales: +3.9%

• − +6.5% excluding from the scope the stores adjacent to newly opened stores, and therefore not included in the like-for-like computation
• − strong underlying consumer trends supporting IT (smart working, e-learning) and SDA (house cleaning, food preparation)
• − Online +91.9%, decelerating after the emergency peak
• No significant perimeter change

Sales Breakdown

Retail	675.8 €m	-10.6 %
Online	215.4 €m	+91.9%
Indirect	128.1 €m	+7.6%
B2B	50.7 €m	-5.9 %
Travel	9.0 €m	-51.3 %

Grey	532.9 €m	+6.1%
White	307.3 €m	+0.4%
Brown	141.9 €m	-10.4 %
Other prod.	49.7 €m	+12.2%
Services	47.3 €m	-2.0%

• H1 2020/21 Sales by Channel Retail recovering from May to August after being penalized by store closures and fall in traffic, especially in malls and suburban shops
• Online experiencing an extraordinary growth, supported by:
  • − changes in consumer behaviour
  • − Unieuro strong online presence (Unieuro.it and Monclick)
• Indirect channel reversing the Q1 trend and growing faster than the market :
  • − small dimension and local focus helping during lockdown
  • − benefitting from proximity and service trends
• B2B only marginally impacted by epidemics
• Travel strongly hit by Covid-19 effect on airports
• H1 2020/21 Sales by Category¹ Grey pushed by consumer trends emerging from pandemic:
• − communication, e-work and e-learning
• White recovering after weak Q1, thanks to:
  • − full store reopening and gradual traffic increase
  • − home cleaning and food preparation needs
• Brown suffering the most, also because of sport events cancellation
• Other products higher yoy, pushed by home entertainment trends and e-mobility
• Services: slightly negative performance

Notes: Consolidated results. Unieuro H1 ends on 31 August. Data in millions of Euro, unless otherwise stated. See Glossary for definitions. (1) The segmentation of sales by product category takes place on the basis of the classification adopted by the main sector experts. Note therefore that the classification of revenues by category is revised periodically in order to guarantee the comparability of Group data with market data.

Profitability

Adj. EBIT

• Covid-19 impact, compensated by non-replicable benefits of undertaken actions
• Gross Profit down by 0.9 p.p. (+1 p.p. in Q2) extraordinarily hit worsened channel and category mix
• Effective cost control measures, boosting profitability:
• − Personnel costs savings mainly granted by social safety nets activated (ca. 8 €m). Incidence on sales down from 8.5% to 7%
• − Marketing costs down from 2.4% to 1.8% of sales, benefitting from the temporary shift from paper to digital fliers
• − Significant increase in Logistics costs (from 2.9% to 3.5%) due to booming home deliveries, both from Piacenza central hub and direct stores
• − Other costs savings (incidence from 3.5% to 2.6%) reflecting extraordinary cut in renting costs (8.6 €m) as well as lower maintenance and utility costs. Digital payment fees up
• D&A slight increase, reflecting long-term capex trend and devaluation of physical assets in view of the relocation of Forlì HQ

Financial Overview

Net Working Capital

• Impressive reversal of free cash flow performance: from seasonal absorption of 22.7 €m in 19/20 to generation of 28.5 €m in 20/21
• …leading to a positive Net financial position (56.1 €m vs. negative 49.5 €m as of 31 August 2019), even higher than Net cash recorded on 29 Feb. 2020 (29.6 €m)
• Main drivers:

6.5

• − Strong operating profitability
• − Net Working Capital still expanding, also thanks to structural benefits from stock level optimization (-61.5 €m vs. 31 August 2019)
• − Total capex more than halved:
• o restart of store network expansion and upgrade
• o new ERP project in progress
• o no acquisitions nor extraordinary capex
• Significant cash and short-term credit facilities available

2020

2020

Extraordinary

H1 2020/21 Key Operational Data

Unieuro's Retail Network

	31 Aug. 2020	Openings	Closures	29 Feb. 2020	o/w Click & Collect
DOS:	254	+6	-1	249	242
- Malls and free standing stores	235	+2		233
- Shop-in-shops	8	+4		4
- Travel stores	11		-1	12
Affiliated stores:	255	+1	-7	261	152
- Traditional	239	+1	-5	243
- Shop-in-shops	16		-2	18
TOTAL STORES:	509	+7	-8	510	394

Total Retail Area (sqm, DOS only)

Sales density (€/sqm, LTM)

Net Promoter Score(1) (direct channel only)

Active Loyalty Cards(2) (thousands)

Workforce (FTEs)

Notes: Consolidated results. Unieuro H1 ends on 31 August. Data in millions of Euro, unless otherwise stated. (1) Net Promoter Score (NPS) measures customer experience and predicts business growth. It can range from -100 (if every customer is a Detractor) to 100 (if every customer is a Promoter). (2) Active loyalty cards defined as customers who made at least a transaction within the last 12 months.

Agenda

• Highlights
• Market and Business Performance
• Financials
• Going Forward

Reinforcing Presence Inside Hypermarkets

Total internalisation of «Unieuro by Iper» business, previously affiliated

• New rent agreement with Finiper for stores to be directly managed by Unieuro, marking the success of the partnership signed in January 2019 and further evolving the cooperation between the two companies
• All 21 shop-in-shops inside "Iper, La grande i" hypermarkets now part of the Retail Channel:
• 3 shops (Savignano, Verona and Milano Portello) born as direct stores
• 2 shops (Arese and Lonato) converted in August 2020
• remaining 16 shops converted in September
• Exclusive right on consumer electronics and household appliances sale inside "Iper, La grande i" hypermarkets maintained
• Personnel shift from Finiper to Unieuro (123 units belonging to the 16 shop-in-shops internalised in September)
• Total number of DOS reaching 270 units
• Catching higher margins by innovating the relationship with mass merchandisers
• Better exploiting the potential of Unieuro brand into the Mass Merchandisers segment
• Leveraging on know-how gained during the affiliation phase
• Streamlining operations by integrating 16 new DOS into Unieuro's direct network
• Further strengthening the Retail channel

Strategic Rationale

First Step of Expansion in Campania Region

Partnership with Gruppo Partenope for 5 stores in prestigious locations in the Naples area

• Affiliation agreement with a local player, previously working within Expert buying group
• 5 great and unique locations perfectly covering the city center of Naples (4 stores), together with a shop in the Northern metropolitan area (Cardito)
• Potential turnover (sell-in) of 20 €m at run rate, to be recorded within the Indirect Channel
• First move in Campania region (5.8 million inhabitants, high CE spending), where Unieuro only manages one DOS (Avellino)
• Reopening under the Unieuro banner mostly accomplished (4 stores on 3 November), in time for the Black Friday campaign
• "Scusate il ritardo" [Sorry for the delay] local adv campaign by Unieuro to strongly support the partner

Strategic Rationale

• Landing in a populous and underpenetrated area, as a first step towards an efficient coverage of Campania
• Benefitting from the partner's strong local know-how
• Limiting capex and execution risks in a peculiar and very competitive local market
• Strengthening Unieuro's position vis-a-vis a direct competitor (buying group)

LTIP, Capital Increase and Buy-Back Proposals

Ordinary and Extraordinary Shareholders' Meeting, 17 December 2020

Proposal of Performance Share Plan 2020-2025 (LTIP)

• The Plan: free allocation of rights to receive Unieuro ordinary shares, together with a cash bonus based on any cash dividends paid by the Company up to the allotment date
• Total amount: up to 900,000 ordinary shares
• Conditions: the achievement of certain performance objectives (Adj. EBIT and Adj. Free Cash Flow) as well as specific vesting conditions
• Allocation dates: 2023 (1st cycle), 2024 (2nd cycle) and 2025 (3rd cycle)
• Beneficiaries (1st cycle): max 45 executive directors a/o executives with strategic responsibilities a/o employees
• Objectives:
• Motivation and focus on strategic factors
• Retention of key resources
• Alignment of beneficiaries' and shareholders' interest

• Attraction of talented professionals

• The Capital Increase: free issue of new shares over a period of five years from the date of the resolution, even on several occasions

• Total amount: up to 900,000 new ordinary shares with no express indication of their nominal value
• Objective: serving the LTIP, ensuring a sufficient number of shares to be allocated to beneficiaries, if performance objectives and other conditions are achieved

Proposal of authorisation to purchase and dispose of treasury shares

• the Buy-Back: purchase (for a period of 18 months from the date of the Shareholders' meeting resolution approving the proposal) and disposal (without time limits) of ordinary shares of the Company
• Total amount: up to 2,000,000 ordinary shares of the Company representing, as at today, 10% of the share capital
• Main objectives:
• Disposing of treasury shares in the context of extraordinary transactions
• medium and long term investment, taking advantage of market opportunities
• Carrying out market liquidity support activities, in order to facilitate the smooth conduct of trading and avoid abnormal price movements
• Serving the LTIP, as well as any other future equity incentive plans

Looking Beyond the Covid Emergency

Accelerating the omnichannel strategy

A strong digital platform serving and being served by stores as the surest way to grant consumers the best post-Covid customer experience

Quickly reacting to changes

Velocity demonstrated while facing the epidemic as an asset of the Company in a rapidly evolving scenario

Leveraging on Unieuro brand and marketing skills

Active engagement of all consumer categories – including heavy digital – to fully exploit the omnichannel platform

Focusing on capital allocation

Cost control and strict working capital management to overcome the pandemic and its macroeconomic impact on cash flows

Notes and Glossary

All data contained in this presentation are consolidated, thus including the Parent Company Unieuro S.p.A. and the wholly-owned subsidiaries Monclick S.r.l. and Carini Retail S.r.l..

Economic and financial figures reflect the adoption of IFRS 16 accounting principle, unless otherwise indicated.

Growth of like-for-like Revenues is calculated by including: (i) Retail and Travel stores in operation for at least one full Fiscal Year at the end of the reference period, after taking into account stores affected by discontinued operations in a significant manner (e.g. temporary closures and major refurbishments) and (ii) the entire online channel.

Adjusted EBIT is EBIT adjusted for: (i) non-recurring expenses/(income), (ii) non-recurring depreciation, amortisation and write-downs, and (iii) the impact from the adjustment of revenues for extended warranty services net of related estimated future costs to provide the assistance service, as a result of the change in the business model for directly managed assistance services.

Adjusted Net Income is calculated as Net Income adjusted for (i) the adjustments incorporated in the Adjusted EBIT, (ii) the adjustments of the non-recurring financial expenses/(income) and (iii) the theoretical tax impact of these adjustments.

Adjusted Free Cash Flow is defined as cash flow generated/absorbed by operating activities net of investment activities inclusive of financial expenses and lease flows and adjusted for non-recurring investments and other non-recurring operating flows and including adjustments for non-recurring expenses (income) and their non-cash component and the related tax impact.

Net debt (cash), or Net financial position, is financial debt – not including Lease liabilities (IFRS 16) – net of cash and cash equivalents.

		H1	20/21			H1	19/20
	Adjusted	%	Reported	%	Adjusted	%	Reported	%
Sales	1.079,0	100,0%	1.079,0	100,0%	1.059,5	100,0%	1.059,5	100,0%
- Change Purchase of goods in Inventory	(846 8) ,	(78 5%) ,	(848 5) ,	(78 6%) ,	(822 2) ,	(77 6%) ,	(826 2) ,	(78 0%) ,
Gross profit	232,2	21,5%	230,6	21,4%	237,3	22,4%	233,4	22,0%
Personnel costs	(75 3) ,	(7 0%) ,	(75 5) ,	(7 0%) ,	(90 4) ,	(8 5%) ,	(91 1) ,	(8 6%) ,
Logistic costs	(37 7) ,	(3 5%) ,	(37 8) ,	(3 5%) ,	(30 7) ,	(2 9%) ,	(31 6) ,	(3 0%) ,
Marketing costs	(19 1) ,	(1 8%) ,	(19 3) ,	(1 8%) ,	(25 8) ,	(2 4%) ,	(27 1) ,	(2 6%) ,
Other costs	(28 1) ,	(2 6%) ,	(33 6) ,	(3 1%) ,	(36 9) ,	(3 5%) ,	(38 6) ,	(3 6%) ,
Other operating and income costs	(3 5) ,	(0 3%) ,	(3 5) ,	(0 3%) ,	(2 8) ,	(0 3%) ,	(2 8) ,	(0 3%) ,
EBITDA	68,5	6,3%	60,8	5,6%	50,7	4,8%	42,2	4,0%
D&A	(46 0) ,	(4 3%) ,	(46 0) ,	(4 3%) ,	(44 4) ,	(4 2%) ,	(44 7) ,	(4 2%) ,
EBIT	22,5	2,1%	14,8	1,4%	6,3	0,6%	(2 ,6)	(0 ,2%)
Financial Income - Expenses	(6 8) ,	(0 6%) ,	(6 8) ,	(0 6%) ,	(6 6) ,	(0 6%) ,	(6 6) ,	(0 6%) ,
Adjusted Profit before Tax	15,7	1,5%	8,0	0,7%	(0 ,2)	(0 ,0%)	(9 ,1)	(0 ,9%)
Taxes	(1 2) ,	(0 1%) ,	(0 5) ,	(0 0%) ,	(0 7) ,	(0 1%) ,	0 0 ,	0 0% ,
Net Income	14,5	1,3%	7,5	0,7%	(1 ,0)	(0 ,1%)	(9 ,1)	(0 ,9%)

		Q2 20/21			Q2 19/20				% change
	Adjusted	%	Reported	%	Adjusted	%	Reported	%	(Adjusted)
Sales	650,1	100,0%	650,1	100,0%	564,3	100,0%	564,3	100,0%	15,2%
Purchase of goods - Change in Inventory	(498 2) ,	(76 6%) ,	(499 4) ,	(76 8%) ,	(437 9) ,	(77 6%) ,	(439 9) ,	(78 0%) ,	13 ,
profit Gross	151,9	23,4%	150,7	23,2%	126,3	22,4%	124,4	22,0%	20,3%
Personnel costs	(45 0) ,	(6 9%) ,	(45 1) ,	(6 9%) ,	(44 2) ,	(7 8%) ,	(44 3) ,	(7 9%) ,	1 8% ,
Logistic costs	(20 9) ,	(3 2%) ,	(21 0) ,	(3 2%) ,	(17 0) ,	(3 0%) ,	(17 2) ,	(3 1%) ,	22 9% ,
Marketing costs	(11 0) ,	(1 7%) ,	(11 2) ,	(1 7%) ,	(13 4) ,	(2 4%) ,	(13 7) ,	(2 4%) ,	(18 2%) ,
Other costs	(16 0) ,	(2 5%) ,	(21 4) ,	(3 3%) ,	(19 1) ,	(3 4%) ,	(19 0) ,	(3 4%) ,	(16 2%) ,
Other operating and income costs	(2 2) ,	(0 3%) ,	(2 2) ,	(0 3%) ,	(1 7) ,	(0 3%) ,	(1 6) ,	(0 3%) ,	29 9% ,
EBITDA	56,9	8,8%	49,9	7,7%	30,9	5,5%	28,5	5,1%	83,9%
D&A	(23 3) ,	(3 6%) ,	(23 3) ,	(3 6%) ,	(22 2) ,	(3 9%) ,	(22 4) ,	(4 0%) ,	5 1% ,
EBIT	33,6	5,2%	26,6	4,1%	8,8	1,6%	6,1	1,1%	283,0%
Financial Income - Expenses	(3 2) ,	(0 5%) ,	(3 2) ,	(0 5%) ,	(3 5) ,	(0 6%) ,	(3 5) ,	(0 6%) ,	(7 6%) ,
Adjusted Profit before Tax	30,4	4,7%	23,4	3,6%	5,3	0,9%	2,6	0,5%	475,4%
Taxes	(2 0) ,	(0 3%) ,	(1 4) ,	(0 2%) ,	(0 7) ,	(0 1%) ,	(0 5) ,	(0 1%) ,	191 ,
Net Income	28,3	4,4%	21,9	3,4%	4,6	0,8%	2,2	0,4%	518,4%

H1 and Q2 Adjustments to P&L

*		*

* mainly related to provisions for suppliers and sub-suppliers of services for which requests in the area of labour law have been received from third parties who hold Unieuro jointly and severally liable.

Balance Sheet

	Aug. 31 2020	Feb. 29 2020
Trade Receivables	77 6 ,	51 3 ,
Inventory	332 2 ,	369 8 ,
Trade Payables	(466 8) ,	(479 6) ,
Trade Working Capital	(57 ,0)	(58 ,5)
Current Tax Assets and Liabilities	(1 7) ,	(1 4) ,
(1) Current Assets	17 5 ,	24 5 ,
Liabilities (2) Current	(222 8) ,	(222 0) ,
Short Term Provisions	(1 3) ,	(1 2) ,
Net Working Capital	(265 ,4)	(258 ,7)
Tangible and Intangible Assets	103 6 ,	111 9 ,
Right of Use	457 3 ,	478 3 ,
Deferred Net Tax Assets and Liabilities	37 2 ,	35 2 ,
Goodwill	195 2 ,	195 2 ,
(3) Other Long Term Assets and Liabilities	(23 3) ,	(17 7) ,
INVESTED CAPITAL TOTAL	504,6	544,2
Net financial Debt	56 1 ,	29 6 ,
Lease liabilities	(456 6) ,	(477 6) ,
(IFRS 16) Net Financial Debt	(400 ,5)	(448 ,0)
Equity	(104 ,2)	(96 ,2)
SOURCES TOTAL	(504 ,6)	(544 ,2)

Working Capital Net	(265 ,4)	(258 ,7)		31 Aug. 2020	29 Feb. 2020
			expenses (mainly Warranties) Accrued Extended	(149,8)	(150,1)
Tangible and Intangible Assets	103 6 ,	111 9 ,	Personnel debt	(36,7)	(38,7)
Right of Use	457 3 ,	478 3 ,	VAT debt	(16,8)	(16,4)
Net Deferred Tax Assets and Liabilities	37 2 ,	35 2 ,	Other	(16,9)	(14,3)
Goodwill	195 2 ,	195 2 ,	LTIP Personnel debt	(2,6)	(2,4)
(3) Other Long Term Assets and Liabilities	(23 3) ,	(17 7) ,	Current Liabilities	(222,8)	(222,0)

(3) Other Long Term Assets and Liabilities

Net financial Debt	56 1 ,	29 6 ,		31 Aug. 2020	29 Feb. 2020
Lease liabilities	(456 6) ,	(477 6) ,	Financial (deposits, leases) assets	2,9	3,0
(IFRS Net Financial Debt 16)	(400 ,5)	(448 ,0)	Deferred Benefit Obligation (TFR)	(11,8)	(12,0)
			Long Term Provision for Risks	(11,4)	(5,7)
Equity	(104 ,2)	(96 ,2)	Other Provisions	(3,0)	(3,0)
			LTIP Personnel debt	-	(0,0)
SOURCES TOTAL	(504 ,6)	(544 ,2)	Other Long Term Assets and Liabilities	(23,3)	(17,7)

Cash Flow Statement

	H1 20/21	H1 19/20	% change	Q2 20/21	Q2 19/20	% change
Reported EBITDA	60,8	42,2	44,2%	49,9	28,5	75,0%
Taxes Paid	(0 ,9)	-	na	(0 ,9)	-	na
Interests Paid	(6 ,1)	(6 ,3)	(2 ,8%)	(3 ,3)	(3 ,5)	(6 ,2%)
Change in NWC	13,7	(23 ,1)	(159 ,3%)	38,8	10,9	255,9%
Change in Other Assets and Liabilities	0,2	0,3	(31 ,7%)	0,1	(0 ,2)	(127 ,8%)
Operating Cash Reported Flow	67,7	13,0	420,0%	84,4	35,6	137,0%
Purchase of Tangible Assets	(3 ,5)	(9 ,7)	(64 ,1%)	(2 ,0)	(4 ,4)	(55 ,6%)
Purchase of Intangible Assets	(3 ,0)	(3 ,3)	(10 ,9%)	(1 ,6)	(2 ,3)	(30 ,7%)
Change in capex payables	(6 ,5)	(0 ,8)	710,5%	0,2	(0 ,2)	(193 ,7%)
Acquisitions	(8 ,3)	(11 ,0)	(24 ,6%)	(2 ,3)	(4 ,5)	(49 ,0%)
Free Cash Flow	46,4	(11 ,9)	(490 ,9%)	78,8	24,1	226,9%
Cash effect of adjustments	0,3	4,1	(92 ,3%)	0,1	2,1	(93 ,3%)
Non recurring investments	8,3	14,5	(42 ,4%)	2,3	8,0	(70 ,9%)
Other non recurring cash flows	1,1	(1 ,5)	(170 ,6%)	1,2	(1 ,5)	(179 ,6%)
Adjusted Cash (IFRS 16) Free Flow	56,1	5,2	982,1%	82,4	32,6	152,8%
Lease Repayment	(27 ,7)	(27 ,9)	(0 ,6%)	(13 ,9)	(15 ,6)	(11 ,1%)
Adjusted Free Cash Flow	28,5	(22,7)	(225,5%)	68,6	17,0	303,2%
Cash effect of adjustments	(1 ,4)	(2 ,6)	(46 ,8%)	(1 ,3)	(0 ,6)	142,7%
Acquisition Debt	-	(22 ,7)	(100 ,0%)	-	(5 ,3)	(100 ,0%)
Dividends	-	(21 ,4)	(100 ,0%)	-	(21 ,4)	(100 ,0%)
Other Changes	(0 ,5)	(0 ,6)	(9 ,8%)	0,1	(0 ,1)	(178 ,5%)
Δ Net Financial Position	26,5	(69,9)	(137,9%)	67,3	(10,4)	(748,0%)

Q2 20/21	Q2 19/20	% change
49,9	28,5	75,0%
(0,9)		na
(3,3)	(3,5)	(6,2%)
38,8	10,9	255,9%
0,1	(0,2)	$(127, 8\%)$
84,4	35,6	137,0%
(2,0)	(4, 4)	(55,6%)
(1,6)	(2,3)	(30,7%)
0,2	(0,2)	(193, 7%)
(2,3)	(4, 5)	$(49,0\%)$
78,8	24,1	226,9%
0,1	2,1	(93,3%)
2,3	8,0	$(70, 9\%)$
1,2	(1,5)	$(179, 6\%)$
82,4	32,6	152,8%
(13, 9)	(15,6)	$(11, 1\%)$
68,6	17,0	303,2%
(1,3)	(0,6)	142,7%
	(5,3)	$(100,0\%)$
	(21, 4)	$(100,0\%)$
0,1	(0,1)	$(178, 5\%)$
67,3	(10, 4)	(748,0%)

Net Financial Debt

	31 Aug. 2020	29 Feb. 2020
Short-Term Bank Debt	(10 1) ,	(0 0) ,
Long-Term Bank Debt	(53 4) ,	(41 1) ,
Bank Debt	(63 ,5)	(41 ,1)
Other Debt to Lenders	(11 ,7)	(8 9) ,
Acquisition Debt	(8 9) ,	(17 1) ,
Other Financial Debt	(20 ,6)	(26 ,0)
Cash Cash and Equivalents	140 2 ,	96 ,7
Net Financial Debt	56,1	29,6
Lease liabilities	(456 ,6)	(477 ,6)
(IFRS 16) Net Financial Debt	(400 ,5)	(448 ,0)

IFRS 16 Impact

Main Effects on Unieuro's H1 2020/21 Results (management data, non-audited)

	31 August 2020 (IAS 17)		31 August 2020 (IFRS 16)
• reduction of operating costs (rental fees paid on stores, headquarters, ADJ. EBITDA warehouses and vehicles), net of income from store sub-lease agreements	35.1	+33.4	68.5
• effects on EBITDA ADJ. EBIT • increase in D&A due to amortisation of rights of use	19.6	+2.9	22.5
• effects on EBIT ADJ. PROFIT BEFORE TAXES • increase in Financial expenses for interests connected with rights of use	17.6	-1,9	15.7
NET • recognition of liabilities for rights of use (other current and non-current financial FINANCIAL payables), net of non-current financial receivables concerning sub-lease agreements DEBT (CASH)	(56.1)	+456.6	400.5

NEXT CORPORATE AND IR EVENTS

MID & SMALL VIRTUAL CONFERENCE by Virgilio IR

1, 2, 3 December 2020

9M 2020/21 RESULTS 13 January 2021

3°ITALIAN MID CAP CONFERENCE by Mediobanca 19, 20 January 2021

IR CONTACTS

Andrea Moretti Investor Relations Director

+39 335 5301205

amoretti@unieuro.com investor.relations@unieuro.com

***

Unieuro S.p.A.

Via Schiaparelli, 31 47122 – Forlì (FC) – Italy

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