MONCLER ANNUAL REPORT AT 31 DECEMBER 2020SEPARATE FINANCIAL STATEMENTS 161160

4.

COMMENTS ON THE STATEMENT OF FINANCIAL POSITION

4.1. BRANDS AND OTHER INTANGIBLE ASSETS

Intangible assets changes for the years 2020 and 2019 are shown in the following tables: As at 31 December 2020

Brands and other intangible assets (Euro/000)

2020 2019

Gross value Accumulated depreciation

and impairment Net value Net value

Brands 223,900 0 223,900 223,900

Software 434 (427) 7 15

Other intangible assets 7,898 (6,170) 1,728 1,592

Total 232,232 (6,597) 225,635 225,507

Gross value Brands and other intangible assets (Euro/000) Brands Software

Other intangible assets Total

1 January 2020 223,900 434 7,032 231,366

Acquisitions 0 0 682 682

Disposals 0 0 0 0

Impairment 0 0 0 0

Other movements, including transfers 0 0 184 184

31 December 2020 223,900 434 7,898 232,232

Accumulated amortisation Brands and other intangible assets (Euro/000) Brands Software

Other intangible assets Total

1 January 2020 0 (419) (5,440) (5,859)

Depreciation 0 (8) (730) (738)

Disposals 0 0 0 0

Other movements, including transfers 0 0 0 0

31 December 2020 0 (427) (6,170) (6,597)

As at 31 December 2019

The increase in the caption other intangible assets mainly refer to the brand registration expenses.

4.2. IMPAIRMENT OF INTANGIBLE ASSETS WITH AN INDEFINITE USEFUL LIFE

The Moncler brand, which has an indefinite useful life, has not been amortised, but has been tested for impairment by management. The impairment test on the brand was performed by comparing its carrying value with that derived from the discounted

cash flow method applying the Royalty Relief Method, based on which the cash flows are linked to the recognition of a royalty percentage applied to the revenues that the brand is able to generate.

For the 2020 valuation, the expected cash flows and revenues for 2021 are based on the Budget approved by the Board of Directors on 28 January 2021, for 2022, on the 2020-2022 Business Plan approved by the Board of Directors on 11 June 2020 and for 2023 to 2025, on the basis of management estimates consistent with the expected development plans and the assessments of independent external consultants. The «g» rate used was 2.9%.

The discount rate was calculated using the weighted average cost of capital («WACC»), by weighting the expected rate of return on invested capital, net of hedging costs from a sample of companies within the same industry. The calculation took into account fluctuation in the market as compared to the previous year and the resulting impact on interest rates. The cost of capital (WACC) was calculated at 7.8%. The results of the sensitivity analysis indicate that the carrying amount of the Moncler brand is in line with the benchmark with a g rate = 0% and WACC = 69.8%.

4.3. PROPERTY, PLANT AND EQUIPMENT

Gross value Brands and other intangible assets (Euro/000) Brands Software

Other intangible assets Total

1 January 2019 223,900 434 6,175 230,509

Acquisitions 0 0 796 796

Disposals 0 0 0 0

Impairment 0 0 0 0

Other movements, including transfers 0 0 61 61

31 December 2019 223,900 434 7,032 231,366

Accumulated amortisation Brands and other intangible assets (Euro/000) Brands Software

Other intangible assets Total

1 January 2019 0 (405) (4.388) (4.793)

Depreciation 0 (14) (1.052) (1.066)

Disposals 0 0 0 0

Other movements, including transfers 0 0 0 0

31 December 2019 0 (419) (5.440) (5.859)

Property, plant and equipment (Euro/000)

2020 2019

Gross value

Accumulated depreciation and

impairment Net value Net value

Land and buildings 1,629 (440) 1,189 1,482

Plant and Equipment 5 (5) 0 0

Leasehold improvements 4 (2) 2 3

Other fixed assets 459 (265) 194 124

Assets in progress 16 0 16 108

Total 2,113 (712) 1,401 1,717