RISKS RELATED TO CYBER ATTACK AND THE PROTECTION OF PERSONAL DATA On 22 December 2021, Moncler was victim of a sophisticated mal- ware attack on its IT systems resulting in the temporary outage of its IT services, which were then gradually restored to maximum se- curity and without significant impacts on the business. However, the malware attack caused the exfiltration, resulting in the loss of confidentiality, of personal information regarding employees, cli- ents in the Company s database and some suppliers, consultants and business partners. This data breach was promptly communi- cated both to the competent authorities, including the Italian and foreign Data Protection Authorities, and to those directly involved. In addition, a team of cybersecurity experts was immediately acti- vated, who also contributed with elements to the strengthening of security measures on IT infrastructures.

The Company still collaborates with the locally compe- tent personal data protection authorities in order to provide all the information periodically requested and, to date, there is no evidence of any sanctions against the Group referring to the at- tack. However, it cannot be excluded at present that the Com- pany, on one side, might be subject to financial sanctions, even of a significant amount, and, on the other side, might receive claims for damages from individual or groups of customers.

In addition, despite the process of strengthening the cy- bersecurity measures and the internal and external expertise, the rapid technological evolution and the increasing organisation- al complexity of the Group along with the growing sophistication and frequency of cyber-attacks, expose the Group to the poten- tial risk of new cyber-attacks. Thus, Moncler is further strengthen- ing its cyber risk management model, which includes procedural aspects, training, risk evaluation and periodic review, including those related to third parties. The ultimate goal of this model is to ensure the implementation of strong protection and business continuity tools and processes, including the adoption of the best technologies and methodologies for identifying and protecting the Group from cyber threats.

RISKS RELATED TO COST AND AVAILABILITY OF HIGH-QUALITY RAW MATERIALS, TO CONTROL OF THE SUPPLY CHAIN AND TO RELATIONSHIPS WITH SUPPLIERS Moncler and Stone Island s products require raw materials of high quality, including, but not limited to down, nylon, cotton and wool. The price and availability of raw materials depend on a wide vari- ety of factors largely beyond the control of the Group and difficult to predict.

Although in recent years the Group has always managed to guarantee an adequate and highly qualified sourcing of raw mate- rials as also demonstrated particularly during 2021, which was characterised by costs inflation of raw materials, transport and labour costs as well as by a greater sourcing difficulty it cannot be excluded that there could be some tension on the supply side that could lead to a shortage of supply resulting in a significant increase in costs that could have negative impacts on the finan- cial results of the Group. In order to minimise the risks related to a potential unavailability of raw materials in the time required by production, the Moncler brand adopts a multi-sourcing strategy of diversifying suppliers and purchase plans with a medium-term time horizon. Furthermore, these raw material suppliers are con- tractually required to abide by clear commitments to quality and compliance with current legislation on worker protection and on local labour law regulations, animal and environmental protection and usage of hazardous chemicals.

With reference to workers rights, the Moncler Group in- cludes, among the suppliers qualification criteria, the passing of social audits carried out by qualified professionals.

With regards to animal welfare, the Moncler brand creat- ed a multi-stakeholder forum, which approved and constant- ly monitors and integrates the DIST (Down Integrity System and Traceability) Protocol, focused on the down. All suppliers have to scrupulously comply with it, in order to guarantee the traceability of raw materials, animal welfare and the highest quality through- out the supply chain. With regards to hazardous chemicals, the Group requires its suppliers to operate in full compliance with the most restrictive international legislation applicable to hazard-

ous or potentially dangerous chemicals, including the European REACH14 regulation, the Chinese GB15 standards, the Japanese JIS16 standards and to abide to the Company s Product Restricted Substance List (PRSL) and Manufacturing Restricted Substanc- es List (MRSL), which include not only legal parameters but also several voluntary standards that are even more restrictive, in line with a precautionary approach.

RISKS ASSOCIATED WITH BRANDS IMAGE, PERCEPTION AND RECOGNITION The luxury goods sector is influenced by changes in clients tastes and preferences, but also by different habits in the regions in which it operates. The Group s success is significantly influenced by the image, perception and recognition of its brands. The Group constantly focuses on maintaining and enhancing the strength of the Moncler brand and the Stone Island brand, paying particular attention to the quality of the products, the design, the innovation, the communication and the development of its own distribution model, by looking for selectivity, quality and sustainability, also in the choice of the partners. The Group integrates sustainabili- ty assessments, also linked to local values (religious, cultural and social) in its communication and marketing strategies, believing that the continue creation of value for its stakeholders is an es- sential priority to strengthen its reputation.

If the Group will not be able in the future to maintain a high brands image, reputation and recognition, through its products and activities, revenues and financial results may be affected negatively.

RISKS ASSOCIATED WITH RELATIONSHIPS WITH THIRD PARTY MANUFACTURERS The Moncler Group, both with the Moncler brand and the Stone Is- land brand, directly manages the development of the collections as well as the purchase or the choice of raw materials, while for the production of its garments it uses both independent third-par- ty manufacturers (façon manufacturers), who operate under the close supervision of the Group, and, for the Moncler brand, inter- nal production.

Although the Group does not depend to a significant extent on any given façon manufacturer, there is the possibility that any interruption or termination for any reason of the relationships with these manufacturers may materially affect the Group s business with a negative impact on sales and earnings.

The Moncler Group maintains constant and continual con- trol over its third-party manufacturers in order to ensure there is full compliance, in addition to the highest quality requirements, with labour laws, workers safety, environmental laws and with the principles of Moncler s Code of Ethics and Suppliers Code of Con- duct. Moncler performs audits at these third-party manufacturers and at their sub-suppliers verifying also the compliance with ded- icated health measures within the plants related to the Covid-19 pandemic. The risk cannot be excluded, however, that any one of these might not fully comply with the agreements entered into with Moncler in terms of quality, timely delivery and compliance with applicable regulations.

RISKS ASSOCIATED WITH THE RETAIL DISTRIBUTION NETWORK The Moncler Group generates with the Moncler brand the majori- ty of its revenues through the retail channel, consisting of directly operated mono-brand stores (DOS) and the online channel. While the Stone Island brand is more exposed to the wholesale channel (75% of FY 2021 revenues). Over the years, the Group has demon- strated the ability to open new stores in the most prestigious lo- cations in the most important cities in the world and within high profile department stores, despite competition among key play- ers in the luxury goods sector to secure a strong position in that sector. This is the reason why it should not be excluded that the Group might face difficulties in opening new stores, which could have a negative impact on the growth of the business.

In addition, by its nature, the retail business is character- ised by a great incidence of fixed costs, mainly related to rent- al agreements. Although management showed the ability in the years to develop a profitable retail business, it cannot be exclud-

14 Registration, Evaluation, Authorisation and Restriction of Chemi- cals.

15 National Standard of the People s Republic of China. 16 Japanese Industrial Standards.

BOARD OF DIRECTORS REPORT72 73 MONCLER GROUP

2021BOARD OF DIRECTORS REPORT