65 BOARd OF dIReCTORS RePORT64 BOARd OF dIReCTORS RePORT MONCLER GROUP 2023

eas. In particular, in recent years the importance of Asian markets for the luxury goods sector has increased, reaching around half of turnover for the Moncler brand at the end of 2023, whereas Stone Island, having only recently begun its international expansion, par- ticularly in Asia and America, remains more exposed to the europe- an market (70% of revenues in fiscal year 2023).

CYBER RISKS AND PERSONAL DATA PROTECTION RISKS The rapid technological evolution and growing organisational complexity of the Group, together with the increasing sophistica- tion and frequency of cyber attacks, do not exclude the potential risk to the Group of cyber attacks through the use of innovative at- tack techniques.

Moncler is investing significantly in its model for managing cyber risks with a view to business continuity and data protection, adopting the best technologies and methodologies for vulnerability identification and system protection, ensuring the presence of qual- ified cyber security expertise, staff training and a careful process of periodic risk assessment and review also in relation to third parties.

RISKS RELATED TO THE COST AND AVAILABILITY OF HIGH QUALITY RAW MATERIALS, SUPPLY CHAIN CONTROL AND SUPPLIER RELATIONS Moncler and Stone Island brand products require high-quality raw materials, including, but not limited to, down, nylon, cotton and wool. The price and availability of raw materials depend on a wide variety of factors, which are largely beyond the Group s control and diffi- cult to predict.

Although the Group has always managed to ensure a supply of raw materials adequate to its production requirements in terms of quantity and quality, hypothetical further tensions on the supply side could lead to difficulties in supply and a further increase in costs, with negative consequences for the Group s economic results. In order to minimise the risks associated with the potential unavailability of raw materials in the timescales required for production, Moncler adopts a multi-sourcing strategy for supplier diversification and plans pur- chases with a medium-term time horizon. In addition, suppliers of raw materials must meet precise contractual quality, composition and performance requirements and comply with applicable laws on worker protection, working conditions, local labour laws, respect for animal welfare, the environment and the use of hazardous chemicals.

In the area of workers rights, the Moncler Group includes, among its supplier qualification criteria, company audits carried out by qualified professionals.

With regard to respect for animals, the Moncler brand formed a multi-stakeholder forum that approved and continuously monitors and integrates the dIST (Down Integrity System & Traceability) pro- tocol, to which suppliers must adhere strictly, ensuring the trace- ability of the raw material, respect for animals and the finest quality throughout the supply chain. With regards to hazardous chemicals, the Group requires its suppliers to operate in absolute compliance with the most restrictive international laws applicable to hazardous or potentially hazardous chemicals, including the european ReACH regulation, Chinese GB standards, Japanese JIS standards, as well as with the Product Restricted Substance List (PRSL) and the cor- porate Manufacturing Restricted Substances List (MRSL), which include not only legal parameters, but also many more restrictive voluntary requirements, in line with a precautionary approach.

RISKS RELATED TO BRAND IMAGE, REPUTATION AND RECOGNITION The luxury goods sector is influenced by changing consumer tastes, preferences and lifestyles in the various regions in which it operates. The Moncler Group s success is significantly influenced by the image, reputation and recognition of its brands. If in the fu- ture the Group is not able, through its products and initiatives, to maintain the image, reputation and recognition of its brands, sales and economic results may be affected.

The Group therefore constantly strives to maintain and in- crease the strength of the Moncler and Stone Island brands, with a focus on product quality, innovation, communication and the devel- opment of its distribution model according to criteria of selectivity, quality and sustainability, including when it comes to the selec- tion of counterparties with which to operate. The Group integrates

sustainability assessments, including those related to compliance with local values (religious, cultural and social) into its communi- cation and marketing strategies, out of a belief that the continuous creation of value for all its stakeholders is a fundamental priority in strengthening its reputation.

RISKS RELATED TO RELATIONS WITH THIRD-PARTY PRODUCERS The Moncler Group directly manages the development of its collec- tions as well as the purchase or selection of raw materials, whereas for the garment manufacturing phase it relies on both own factories and independent third parties that operate under the Group s close supervision (façon manufacturers).

Although the Group does not depend to a significant extent on any façon manufacturer, the suspension or termination of a re- lationship with some of the most significant façon manufacturers could adversely affect the Group s business, with consequences for its sales and earnings.

The Moncler Group constantly monitors the supply chain of third-party manufacturers in order to ensure, in addition to require- ments of high quality and financial reliability, full compliance with labour laws, worker safety and the environment and the principles of its Supplier Code of ethics and Conduct through audits at third party contractors and their sub-suppliers. However, there is still a risk that a counterparty will not fully comply with the contracts en- tered into with Moncler in terms of quality, timeliness of deliveries and compliance with the applicable regulations.

RISKS ASSOCIATED WITH THE RETAIL DISTRIBUTION NETWORK With the Moncler brand, the Moncler Group generates most of its revenues through the retail channel, consisting of directly operat- ed single-brand stores (dOSs) and the online store, whereas the Stone Island brand is more exposed to the wholesale channel (58% of 2023 revenues). Over the years, the Group has demonstrated its ability to open new stores in the most prestigious locations in major world cities and in top-tier department stores, despite the compe- tition between operators in the luxury goods sector to secure such positions, which is very strong. The Group thus may encounter dif- ficulties in opening new stores in the future, with negative conse- quences for its business growth prospects.

In addition, by its nature, the retail business has a higher inci- dence of fixed costs, mainly relating to lease agreements. Although management has demonstrated its ability to develop profitable re- tail business over the years, a potential slowdown in sales in specific geographical areas could reduce the Group s ability to turn a profit.

ENVIRONMENTAL RISKS environmental issues and the related risks are also subject to as- sessment and formulation of mitigation plans.

With reference to the environmental risks linked to climate change, in 2021 the Group began voluntarily reporting company risks related to climate change in both its non-Financial Statement and the CdP Climate Change Questionnaire, as required by the eu- ropean Securities and Market Authority (eSMA) and the recommen- dations of the Task Force on Climate-related Financial disclosures (TCFd) of the Financial Stability Board: Governance, Strategy, Risk Management, Metrics and Targets.

The potential and actual risks analysed concern the intensi- fication of extreme climatic phenomena, the increase of average temperatures, the increase in the cost of certain types of raw ma- terials, the introduction of regulations aimed at containing climate change and possible changes in customer purchasing habits.

In addition to the risks associated with climate change, the Group also identifies among environmental risks the failure to com- ply or incomplete compliance with relevant rules and laws which could result in possible criminal penalties and/or financial outlays; environmental pollution phenomena related, for example, to uncon- trolled emissions, inadequate disposal of waste and wastewater or spills of dangerous substances into the ground.

The Group is committed to preventing and mitigating any en- vironmental risks through various initiatives and projects.

In 2020 Moncler joined the Science-Based Targets initiative (SBTi), setting targets for reducing greenhouse gas emissions in