THE NEW MONCLER INVESTOR RELATIONS APP IS NOW AVAILABLE

A quality product is the result of shared standards, cooperation, joint efforts, stable and trust-based relationships with all partners in the supply chain.

Moncler believes in the importance of developing increasingly close and profitable synergies and collaborations with those who not only ensure reliability in production performance, but also share the Company’s values and expectations in terms of ethical, environmental and social standards.

A total of 459 suppliers1 are involved in the manufacture of Moncler’s products. They are grouped into four macro-categories: raw materials, façon manufacturers, finished products, and services.

Raw material suppliers mainly provide fabrics, yarns, down, leathers, accessory components (buttons, zippers, ribbons, elastics, etc.), and furs. Fabrics are sourced primarily from Japan, France and Italy. Suppliers of yarns and accessory components are mainly Italian. Most furs are sourced in Europe and North America, while down is purchased from European, North American and Asian suppliers.

Façon manufacturers are specialist garment makers with a high level of technical skill, whom Moncler supplies with raw materials and entrusts with the manufacture of its finished products. The

production process is carefully monitored by Moncler experts, who verify compliance with required standards through a strict methodology and regular on-site inspections. This process applies in particular to jackets, trousers, skirts, dresses, all knitwear, and some adult cut-and-sew knits. Most of these suppliers are located in Eastern Europe, where a long manufacturing tradition guarantees a high level of technical expertise and sufficient production capacity. Once again in 2020, the business model introduced by the Moncler Genius collections, with its continuous product evolution and diversification, led the Company to turn to suppliers – particularly in Italy – with solid experience in complex, unusual processes.

Finished product suppliers manufacture products on behalf of Moncler based on the technical designs received, sourcing the raw materials themselves as per Moncler standards, with the exception of strategic materials such as down, nylon, and logoed materials, which are provided directly by the Company. At all stages of the manufacturing process these suppliers interact with Moncler’s experts, who make on-site visits and carefully supervise the process to ensure final products meet the high quality standards required. Some cut-and-sew knits

(mainly T-shirts and polo shirts), some soft accessories (such as hats and gloves), footwear, handbags, and small leather goods are mainly produced by these suppliers. Cut-and-sew knitwear suppliers are vertically integrated and are located in Europe and in Turkey. Soft accessories suppliers are mostly Turkish and Italian and have a high level of specific skill, while footwear and handbags are produced by European suppliers, most of them Italian.

• Service suppliers assist Moncler in pattern making and quality control processes and are mainly located near the Company.

Where possible, the Group uses local suppliers situated near its main offices, which streamlines logistics and generates income and jobs within the local communities. The majority of Moncler’s suppliers (93%) are located2 in the EMEA Region, primarily in Italy.

Moncler diversifies its purchasing expenditure across a number of partners so as to avoid depending on any given supplier, which would pose a potential business risk. The Company’s top 60 suppliers account for about 70% of the total value of orders. The Group is careful to promptly identify any problems that might disrupt supply, addressing them accordingly to mitigate risk.

SUPPLIER BY GEOGRAPHICAL AREA2
SUPPLIER BY TYPE3
ORDER VALUES BY GEOGRAPHICAL AREA
SUPPLY CHAIN EXCELLENCE

For several years Moncler has followed a programme called Supply Chain Excellence, which aims to achieve the highest possible standards by way of an advanced model designed to master the constant evolution of the market.

The entire programme hinges on people and their contribution. About 100 employees participate in the work groups, which have produced numerous initiatives and improvement pathways that have required major efforts in reviewing and coordinating processes and integrating people from different departments. The critical success factors existing today and necessary for the future have been analysed and specific projects have been launched. They all share the objective of achieving operational excellence in terms of quality, time to market, sustainability, reliability, flexibility and efficiency.

Some of the main initiatives in 2020 were as follows:

Collection Excellence: the Product Lifecycle Management (PLM) platform was extended to all product lines and categories. In 2021 this project will continue with further developments and improvements. All information on collection development is now kept in a single place and shared with all relevant departments, making the process more collaborative and efficient.

New collection development hub: the Milan hub was fully operational during the year, with key design and development personnel working together in total synergy. Technical skills for the development of specific garment lines were further reinforced, leading to collections of even higher quality.

Supply Chain Collaboration: the project aimed at creating a new collaboration platform to give Moncler better visibility and control over all production phases, with advantages for responsiveness and flexibility has been slowed down in 2020 due to the COVID-19 emergency. The new platform will include special applications for suppliers to communicate with Moncler in real time.

Manufacturing Excellence: new methods, organization and management models for outerwear packaging based on the lean management philosophy have been implemented in a new prototype department. Adoption of the lean management philosophy, in addition to making the production model more efficient and flexible, has also led to the formation of “continuous improvement committees”. Using objective data, employees from different departments participate proactively and through focus groups to achieve constant improvements to

operational performance.

Demand-driven operating model: to respond quickly and flexibly to changing market conditions, the Company continued to review its operating and planning model in order to create greater coordination between market demand, production and distribution. In 2020 these activities focused mainly on Moncler’s permanent items.

Development of the knitwear division: additional work was done on the centre of excellence for knitwear in Trebaseleghe, Padua. Consistently with the aim of developing new product categories, technical and innovative skills were boosted and tangible improvements made to the stylistic, creative, and qualitative content of the collections developed during the year.

•  Constant improvement in garment quality: internal technical competencies continued to be strengthened to ensure constant oversight of the design, industrialization, pre-production and production phases, whether carried out internally or at suppliers’ premises. This is an approach the Company will continue to pursue as it increasingly focuses on the quality of upstream processes as a means of reducing potential defects in the finished products.

NOTES

1 Excluding prototype and pattern making suppliers, and suppliers with sales orders of less than 1,000 euros a year.

2 For façon manufacturers and finished product suppliers, the geographic location is the country the product was ‘made in’; for service and raw material suppliers, it is the country where the supplier’s head office is registered.

3 Percentage calculated on the total number of suppliers.

SEARCH MONCLERGROUP.COM: