ed that a potential revenues slowdown could reduce the Group s capability to generate profits.

ENVIRONMENTAL RISKS In carrying out its activities, the Group has always paid particular attention to the environment and its related risks. In this sense, in 2020, it signed the Science Based Targets (SBTi) Initiative, defin- ing targets for the reduction of greenhouse gas emissions consis- tent with the commitment of the United Nations; and, starting from 2021, the Group voluntarily reports corporate risks related to cli- mate change according to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) of the Financial Stability Board. The potential risks analysed relate to increased severity of extreme and chronic weather events, increased cost of raw materials, the introduction of regulations aimed at contain- ing climate change, possible regulations on the labelling of textile products and any changes in customer behaviour.

With regard to its logistics hub in Piacenza (Italy) and the peripheral hubs in America, China, Japan and Korea, where Moncler checks, stores and handles raw materials and fin- ished products, the Company has adopted the prevention and risk mitigation measures, in the event of a temporary disrup- tion of operations due to external or natural events, including insurance policies covering the loss of integrity of business as- sets and business interruption damages and has developed relat- ed contingency plans.

RISK ASSOCIATED WITH KEY MANAGEMENT PERSONNEL The Moncler Group s results depend also on the ability of its man- agement team, who has had a decisive role in the development of the Group and which has a significant experience in the luxu- ry goods sector. If the existing relationships with some of these individuals were to be interrupted without proper and timely re- placement, the competitive ability of the Group and its growth prospects may be affected.

The Group believes that it has an operational and manage- rial structure capable of ensuring the continuity of the business, also through the definition of a succession plan and the adoption of retention plans for key professional figures, as well as talent management programs aimed at developing skills and talent re- tention.

RISKS RELATED TO BRANDS AND PRODUCTS CO UNTERFEITING AND THE PROTECTION OF INTELLECTUAL PROPERTY RIGHTS The luxury goods market is known to be characterised by brands and products counterfeiting.

The Moncler Group has made considerable investments for the adoption of innovative technologies, which allow products to be tracked along the value chain, to prevent and mitigate the ef- fects of counterfeiting of its brands and products and to protect its intellectual property rights in the territories in which it operates. However, it cannot be excluded that the presence on the market of significant quantities of counterfeited products may adversely affect the image of the brands, with a negative impact on revenues and operating results.

RISKS RELATED TO THE EVOLUTION OF THE REGULATORY FRAMEWORK The Moncler Group operates in a complex international environ- ment and is subject, in the various jurisdictions in which it op- erates, to rules and regulations which are constantly monitored, especially for all matters relating to the health and safety of work- ers, environmental protection, rules around manufacturing of products and their composition, consumer protection, personal data protection, protection of intellectual and industrial property rights, competition rules, fiscal and customs rules, and, in gener- al, all relevant regulatory provisions.

The Group operates following the legal provisions in force and has established processes that guarantee knowledge of the specific local regulations where it operates and of the regulato- ry amendments that gradually take place. Nevertheless, since the legislation on some matters, especially on tax issues, is charac- terised by a high degree of complexity and subjectivity, it can-

not be excluded that a different interpretation to that of the Group could have a significant impact on the results. In this regard, the Moncler Group is engaged in a program for the definition of pre- ventive agreements (Advance Pricing Agreements) partly final- ised with the Tax Authorities of the main countries in which the Group operates.

In addition, the enactment of new legislation or amend- ments to existing laws, which may require the adoption of more stringent production standards, for example in the field of product compliance, could lead, by way of example, to compliance costs linked to the production processes or to the features of the prod- ucts, or could even limit the Group s operations with a negative impact on the financial results.

EXCHANGE RATE RISKS The Moncler Group operates in international markets using cur- rencies other than the Euro, of which mainly Renminbi, Yen, U.S. Dollar, Korean Yuan and British pound. Therefore, it is exposed to the risk associated with fluctuations in exchange rates, equal to the transaction amount (mainly income) which are not covered by a matching transaction of the same currency. The Group has implemented a strategy to gradually hedge the risks related to exchange rate fluctuations, limiting its actions to the so called transactional risk , and has adopted a stringent policy on curren- cy risk that sets the minimum limit of coverage per currency at the beginning of each sales campaign at 75%, and the minimum limit of coverage per currency at the end of the sales campaign at 90%.

However, also due to the so called translational risk , aris- ing from the translation in Euro of financial statements of foreign companies denominated in local currency, it cannot be excluded that significant changes in exchange rates could have a positive or negative impact on the Group s results and financial position.

For more information, please refer to the specific section 9.1 of the Notes to the Financial Statements.

INTEREST RATE RISKS The Moncler Group has no significant financial agreements ac- tive by third parties as it is fully capable of self-financing. Fur- thermore, the Group may make use of loans from third parties, specifically bank loans; in case it should choose to resort to such loans, it would be subject to the risk of interest rate risk revision. The Group, in order to partially hedge the risk of increased inter- est rate, could potentially enter into some hedging transactions. However, any significant fluctuations in interest rates could lead to an increase in borrowing costs, with a negative impact on the Group s financial results.

For more information, please refer to the specifi c section of the Notes to the Financial Statements 9.1.

CREDIT RISK The Moncler Group operates in accordance with the credit control policies aimed at reducing the risks resulting from insolvency of its wholesale customers. These policies are based on preliminary in-depth analysis of the reliability of the customers and based on eventual insurance coverage and/or guaranteed forms of payment. In addition, the Group has no signifi cant concentrations of credit.

However, it cannot be excluded that a rise in the difficulty of some clients may result in losses on receivables, with a neg- ative impact on the Group s financial results. The Moncler Group monitors and manages with particular attention its exposure to wholesale customers with significant orders, also by requesting and obtaining bank guarantees and money deposits in advance of shipments.

For more information, please refer to the section 9.2 of the Notes to the Financial Statements.

BOARD OF DIRECTORS REPORT74 75 MONCLER GROUP

2021BOARD OF DIRECTORS REPORT