MONCLER ANNUAL REPORT AT 31 DECEMBER 2020CONSOLIDATED FINANCIAL STATEMENTS 103102

4.1. REVENUES

The breakdown of the main revenues categories from customers by distribution channel and geographical area is pro- vided below.

REVENUES BY DISTRIBUTION CHANNEL

Revenues by distribution channels are broken down as follows:

Sales are made through two main distribution channels, retail and wholesale. The retail channel includes stores that are directly managed by the Group (free-standing stores, concessions, e-commerce and factory outlet), while the wholesale channel includes stores managed by third parties that sell Moncler products either in single-brand spaces (i.e. shop-in-shop) or inside multi-brand stores (both physical and online).

In 2020, revenues from the retail distribution channel amounted to 1,089.5 million euros compared to 1,256.9 million euros in 2019, representing a decrease of 13.3%, due to the measures aimed at reducing store traffic imposed by governments world- wide in 2020 to limit the spread of the virus and the subsequent repeated closure of stores. Results of the second part of the year marked a strong improvement led by Asia, in particular the Chinese market, and e-commerce.

The wholesale channel recorded revenues of 350.9 million euros compared to 370.8 million euros in 2019, a decrease of 5.4%. The progressive improvement of the results in the second part of the year was driven by important product reorders, a different timing in the shipments of the Fall/Winter collections and by the excellent performance of e-tailers.

(Euro/000) 2020 % 2019 %

Total revenues 1,440,409 100.0% 1,627,704 100.0%

of which

- Wholesale 350,913 24.4% 370,787 22.8%

- Retail 1,089,496 75.6% 1,256,917 77.2%

4.

COMMENTS ON THE CONSOLIDATED INCOME STATEMENT

REVENUES BY GEOGRAPHICAL AREA

Sales are broken down by geographical area as reported in the following table:

Asia registered a positive performance in 2020. Mainland Chi- na led the performance of the Region with strong double-digit growth in the year with an acceleration in the last months of the year, which was followed by Korea and Japan, both also improving in the last months of the year.

In EMEA (Italy excluded), revenues decreased by 18.1%, with a improved performance in the second part of the year. This was supported by good local demand which partially offset the lack of tourists despite the temporary closure of some stores. Germany, Scandinavia and Russia recorded the strongest per- formance in the year, with excellent results in both channels.

Italy recorded a 33.9% revenue decline in the year, and in the fourth quarter. The performance was significantly impact- ed by the stringent measures implemented to contain the Cov- id-19 pandemic, which not only limited the inflow of tourists but also led to the prolonged closure of stores. These impacts continued in the last months of the year when the main Italian stores were closed for several days during November and De- cember, which are important months for Moncler s business. In the Americas, revenues saw a decline of 16.4%, recovering in the fourth quarter, with positive performance in both channels.

4.2. COST OF SALES

In 2020, cost of sales decreased by 11.6 million euros in ab- solute terms (-3.2%), going from 362.4 million euros in 2019 to 350.8 million euros in 2020. Cost of sales as a percentage of sales has increased, going from 22.3% in 2019 to 24.4% in 2020, mainly due to the significant inventory write-downs of Spring/Summer 2020 products made in the first half of the year due to the Covid-19 pandemic.

4.3. SELLING EXPENSES

In 2020 selling expenses amounted to 463.6 million euros (488.8 million euros in 2019), decreasing 25.2 million euros between 2019 and 2020.

As a percentage of revenues, selling expenses, although increased from 30.0% in 2019 to 32.2% in 2020, during the second half of the year, recorded an important improvement thanks to the recovery of revenues and a greater control on costs related to the stores management, in particular in terms of rents and personnel.

In fact, selling expenses mainly include rent costs ex- cluded from the application of the IFRS 16 for 110.7 million

euros (144.9 million euros of total rent costs in 2019), person- nel costs for 107.3 million euros (119.1 million euros in 2019) costs for depreciation of the right of use for 113.1 million eu- ros (94.6 million euros in 2019) and other amortisation and de- preciation for 62.6 million euros (56.6 million euros in 2019).

During the year, the Group initiated important negotia- tions with main landlords to review rents, in light of the effects of the Covid-19 pandemic. The economic benefits have been reflected in the results of the period and were recognised un- der this item because they were considered as reductions in rents rather than changes in lease agreements. As indicated in note 2.21, the accounting treatment used is consistent with the practical expedient introduced by the amendment to IFRS 16 published by the IASB on 28 May 2020 and ratified on 12 October 2020. The item also includes costs related to stock-based compen- sation plans for 6.1 million euros (5.5 million euros in 2019).

4.4. GENERAL AND ADMINISTRATIVE EXPENSES

In 2020, general and administrative expenses amounted to 173.4 million euros, up 1.9 million euros when compared to last year.

General and administrative expenses represented 12.0% of turnover; in 2019 the percentage was 10,5%, also in this case with an improved performance in the second part of the year. The item also includes costs related to stock-based com- pensation plans for 24.9 million euros (23.9 million euros in 2019).

4.5. MARKETING EXPENSES

Marketing expenses were 83.8 million euros, representing 5.8% of revenues which is lower than the 7.0% recorded in 2019, also due to the selection and focus of all marketing pro- jects decided after the Covid-19 outbreak.

Revenues by region (Euro/000) 2020 % 2019 % Variation Variation %

Italy 122,345 8.5% 184,988 11.4% (62,643) (33.9)%

EMEA, Italy excluded 379,538 26.3% 463,530 28.5% (83,992) (18.1)%

Asia and rest of world 717,860 49.8% 715,244 43.9% 2,616 0.4%

Americas 220,666 15.3% 263,942 16.2% (43,276) (16.4)%

Total 1,440,409 100.0% 1,627,704 100.0% (187,295) (11.5)%