MONCLER ANNUAL REPORT AT 31 DECEMBER 2020BOARD OF DIRECTORS REPORT 5150

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 December, which are important months for Moncler s business.

In the Americas, revenues saw a decline of 15% at constant exchange rates and 16% at current exchange rates, recovering in the fourth quarter (+5% at constant exchange rates) with positive performance in both channels.

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 12% at constant exchange rates, due to the measures aimed at reducing store traffic imposed by governments worldwide in 2020 to limit the spread of the virus and the subsequent repeated closure of stores. Fourth quarter results marked a strong improvement (+5% at constant exchange rates) led by Asia, in particular the Chinese market and e-commerce, which reported double-digit growth with a sharp acceleration in the last quarter. Revenues of DOS opened by at least 12 months (Comparable Store Sales Growth - CSSG) decreased by 18%, due to the repeated lockdowns and the pandemic s negative effects on stores traffic. In the second half the CSSG was equal to -9%.

The wholesale channel recorded revenues of 350.9 million euros compared to 370.8 million euros in 2019, a decrease of 5% at constant and current exchange rates, with double-digit growth in the fourth quarter (+31% at constant exchange rates). The progressive improvement of the results in the second part of the year, and in particular in Q4, 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.

ANALYSIS OF CONSOLIDATED OPERATING AND NET RESULTS

COST OF GOODS SOLD AND GROSS MARGIN

In 2020 Moncler s consolidated gross margin reached 1,089.6 million euros, equal to 75.6% of revenues compared to 77.7% in 2019. In the second half of the year, the gross margin was 78.1%, substantially in line with the 78.3% in H2 2019. During the first half of 2020, the gross margin was negatively impacted by the pandemic s effects on revenues which caused significant inventory write-downs of the Spring/Summer 2020 collections.

SELLING EXPENSES AND EBIT

In 2020, selling expenses were 463.6 million euros, or 32.2% of revenues compared to 30.0% in 2019. During the second half of the year, Moncler recorded an important improvement in the incidence of selling expenses 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. Selling expenses include 240.2 million euros of rents before the application of the IFRS 16 (254.8 million euros in 2019). General and administrative expenses were 173.4 million euros, equal to 12.0% of revenues compared to 10.5% in 2019, also in this case with an improved performance in the second part of the year. The stock-based compensation plans, included in selling, general and administrative expenses, were equal to 31.0 million euros compared to 29.4 million euros in 2019. 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 projects decided after the Covid-19 outbreak. Depreciation and amortisation, excluding those related to right-of-use assets, rose to 80.2 million euros, increasing by 15% compared to 70.0 million euros in the previous year, representing 5.6% of revenues compared to 4.3% in 2019.

EBIT was 368.8 million euros, a decrease of 25% compared to 491.8 million euros in 2019, representing an EBIT margin of 25.6% compared to 30.2% in 2019. In the second half of the year, EBIT was equal to 404.3 million euros, with a margin of 39.0% compared to 36.8% in the second half of 2019. This result confirms the quality of the actions promptly implemented to mitigate the pandemic impacts and the ability to focus on consolidating the Brand s strength and the Group s long-term development.

NET FINANCIAL RESULT

In 2020, the net financial result was negative and equal to 23.3 million euros, compared to 21.1 million euros in the corresponding period of 2019 including lease liabilities arising from the application of the IFRS 16 accounting principle for 22.0 million euros (20.2 million euros in 2019).

The tax rate was 13.1% in 2020, compared to 23.8% in 2019. In 2020, the Group recorded a lower tax rate, due to extraordinary tax benefit deriving from the Moncler trademark fiscal recognition pursuant to the article 110 of the Legislative Decree no. 104/2020, August Decree . This tax benefit expires in 2020 and therefore the Group will return to a normalized tax rate from 2021. Net result was 300.4 million euros, equivalent to 20.9% of revenues, a decrease of 16%, compared to 358.7 million euros in 2019.

Revenues by Distribution Channel

Fiscal Year 2020 Fiscal Year 2019 YoY growth %

(Euro/000) % (Euro/000) % At current

exchange rates At constant

exchange rates

Retail 1,089,496 75.6% 1,256,918 77.2% -13% -12%

Wholesale 350,913 24.4% 370,787 22.8% -5% -5%

Total Revenues 1,440,409 100.0% 1,627,704 100.0% -12% -11%

CONSOLIDATED BALANCE SHEET AND CASH FLOW ANALYSIS

NET WORKING CAPITAL

Net working capital increased to 165.0 million euros compared to 128.2 million euros as of 31 December 2019, equivalent to 11.5% of revenues, compared to 7.9% as of 31 December 2019; this increase is mainly due to higher inventories generated by the pandemic effects.

NET FINANCIAL POSITION

The net financial position as of 31 December 2020 was positive and equal to 855.3 million euros compared to 662.6 million euros as of 31 December 2019. Net Financial Position is broken down in the following table:

FY 2020 Reclassified Consolidated Statements of Financial Position (Euro/000) 31/12/2020 31/12/2019

Intangible assets 437,890 434,972

Tangible assets 212,189 212,917

Right-of-use assets 590,798 593,623

Other non-current assets/(liabilities) 177,817 90,658

Total non-current assets/(liabilities) 1,418,694 1,332,170

Net working capital 165,011 128,166

Other current assets/(liabilities) (151,457) (160,244)

Total current assets/(liabilities) 13,554 (32,078)

Invested capital 1,432,248 1,300,092

Net debt/(net cash) (855,275) (662,622)

Lease liabilities 640,251 639,207

Pension and other provisions 20,135 17,139

Shareholders' equity 1,627,137 1,306,368

Total sources 1,432,248 1,300,092

(Euro/000) 31/12/2020 31/12/2019

Payables (211,903) (248,621)

Inventory 202,770 208,868

Receivables 174,144 167,919

Net Working Capital 165,011 128,166

% on revenues 11.5% 7.9%

(Euro/000) 31/12/2020 31/12/2019

Cash 923,498 759,073

Short term debt11 (42,885) (18,248)

Long term debt (25,338) (78,203)

Net Debt 855,275 662,622

Lease liabilities (640,251) (639,207)

11. Net of financial credit.