PRESS RELEASE 2013 RESULTS APPROVED ITALIA INDEPENDENT GROUP CONTINUES TO GROW - Net revenue + 59.1%, equal to 24.9 million euro (15.7 million euro for the year ended 31 December 2012) - Gross margin + 63.8%, equal to 17.2 million euro (10.5 million euro for the year ended 31 December 2012) - EBITDA + 57.4%, 4.7 million euro (3.0 million euro for the year ended 31 December 2012) - Group s net profit for the year equal to 0.5 million euro (0.9 million euro for the year ended 31 December 2012) - Net financial position negative by 3.9 million euro (3.7 million at 31 December 2012) Turin, 27 March 2014 Italia Independent Group S.p.A. is pleased to announce that its Board of Directors, during its meeting today, examined and approved the Group s consolidated financial statements and the Company s draft financial statements at 31 December 2013. Andrea Tessitore, Italia Independent Group s co-founder and CEO, declared: We are very proud of our performance and the extraordinary growth of our Group. We met all 2013 targets and, in particular, we proved the success of our business model also abroad. It is time we looked to the future, we strengthened our pillars and we pursued international development, while balancing growth against the need to consolidate our presence on the main foreign markets. Consolidated highlights for 2013 The Group remained in a strong growth phase, with consolidated net revenue up 59.1% on 2012. Specifically, consolidated net revenue amounted to 24.9 million euro, owing primarily to growth in the eyewear sector which, in 2013, accounted for 78.3% of total consolidated revenue (compared to 70.8% in 2012). The following is a breakdown of consolidated net revenue for 2013 by business lines. 1
The eyewear sector in particular showed an increase in revenue both in Italy (+32.3% compared to 2012) and abroad, with significant growth in France and Spain and in the rest of the world. The US branch also began to contribute to the Group s revenue in 2013, generating revenue of 1.1 million euro. The Spanish Italia Independent Iberia S.L., with registered office in Barcelona, was incorporated in November 2013. The following is a breakdown of revenue by region for the eyewear sector only. With respect to distribution, in 2013, the Italia Independent brand reached approximately 2,200 customers in Italy and about 1,800 in foreign markets (mainly France, Spain, Greece, Switzerland and Germany) and roughly 250 in the US. In the rest of the world, the brand is present through distribution agreements. Overall, in 2013, the Italia Independent brand was distributed in 72 countries. 2
The Group was also extremely active with respect to business development, forging several relationships which, inter alia, led to the market launch of the Smeg 500 refrigerator, developed with Smeg (an Italian multinational which operates in the field of domestic appliances), of a series of mobile phones designed with Vertu (a British multinational which is active in the luxury mobile phone sector), of an eyewear capsule collection created with Marchon (one of the world s leading players of the eyewear sector) and of clothing, in collaboration with brands such as K-Way, Bear and Colmar. With respect to communication, the agency Independent Ideas met 2013 targets, optimizing the balance between operating revenue and costs and strengthening its consultancy role with its most long-standing customers. The team s professionalism and harmony remain the Group s core assets, considering, in particular, Independent Ideas growing support to communication and marketing of the Italia Independent brand and the Group s other businesses. Gross margin also increased in both absolute terms (+63.8%, equal to 17.2 million euro compared to 10.5 million euro in 2012) and relative terms: gross margin came to 69.2% of revenue, compared to 67.2% in the previous year. This was primarily due to two factors: on the one hand, the greater influence of the eyewear sector (which offers higher margins) on the Group s revenue, and, on the other, the smaller relative weight of international distributors compared to sales channels managed directly by the Group. EBITDA increased to 4.7 million euro compared to 3.0 million euro in 2012 and remained at the percentage levels reported at the end of the previous year, that is 18.8% of consolidated revenue. The increase in gross margin was offset by a proportional rise in operating costs tied to the expansion of the organization, as well as the expenses related to the start-up of the US branch. By contrast, there was a slight decline in EBIT compared to the previous year (almost unchanged in absolute terms: 2.1 million euro in 2013 compared to 2.2 million in 2012) owing to the impact of the amortization of costs tied to the process of listing on AIM Italia concluded on 28 June 2013 and of the costs incurred to purchase minority interests on 15 July 2013. The Group s net profit for the year amounts to 0.5 million euro compared to 0.9 million euro in 2012 (0.46 million euro net of minorities compared to 0.6 million euro in the previous year). The consolidated balance sheet items that underwent the greatest changes were intangible fixed assets and the net financial position. Intangible fixed assets increased significantly compared to the end of the previous year (up 7.7 million euro), primarily due to the recognition of costs tied to the listing process and the purchase of minority interests. Net financial position came to a negative 3.9 million euro compared to -3.7 million euro at 31 December 2012. The proceeds of the listing, which amounted to approximately 11 million euro (this figure is gross of fees and other expenses connected to the listing process) were mainly used to repurchase the minority interests of Italia Independent S.p.A. (equal to 27.5% of share capital, with a total disbursement of 5.4 million euro), to cover the start-up costs of foreign branches and to pay the costs tied to the listing process. At the level of the holding company, Italia Independent Group S.p.A. reported a loss for 2013 of 408 thousand euro. 3
Significant events after the reporting date In January 2014, two leases were agreed to open the first single-brand shops in the US. Both shops will be inaugurated in the first half of the year, one in Miami s Wynwood district and the other in NY Manhattan-Soho. A lease was entered into with the new French branch, Italia Independent France, to open the first French single-brand shop in the Paris Saint Germain district. Opening of this shop is also set to take place in the first half of the year. Today, the Company s Board of Directors approved the Group s organizational, management and control model pursuant to Legislative decree no. 231/2001 and entrusted the standing members of the Board of Statutory Auditors with supervisory duties in accordance with article 6.4-bis, referred to in Legislative decree no. 231/2001. Finally, on 3 April 2014, the Company will participate in the AIM Investor Day 2014 organized by IR Top and sponsored by Borsa Italiana. During this event, the figures described herein will be communicated to investors. Calling of the ordinary shareholders meeting and relevant documentation The Board of Directors has decided to call the shareholders in an ordinary meeting on 30 April 2014 on first call and, if necessary, on 2 May 2014, on second call, to approve the financial statements at 31 December 2013 and to resolve on the allocation of the result for the year. The notice calling the meeting will be posted on the Company s website (www.italiaindependentgroup.com) and the daily La Stampa. The documentation required by ruling legislation applicable to the above issues, along with the 2013 consolidated financial statements, will be filed with the Company s registered office and will be available on the Company s website (www.italiaindependentgroup.com), within the Investor Relations section in accordance with the law and the regulation. ** * ** In this press release, use is made of certain alternative performance indicators not envisaged by the IFRS (EBITDA, EBIT and net financial position), for the meaning of which reference should be made to the 2013 consolidated financial statements. This press release may include forward-looking information, including references which do not relate exclusively to historical figures or current events and which, therefore, because of its nature, is uncertain. Forward-looking information is based on several assumptions. expectations, projections and forecast figures pertaining to future events and are exposed to a number of uncertainties and other factors which go beyond the Company s and/or the Group s control. Many factors can generate results and trends which are considerably different from forward-looking information, in terms of implicit or explicit content. Consequently, this information shall not be considered as a reliable indicator of future performance. Italia Independent Group does not undertake to publicly update or review the forward-looking information following the provision of new information due to future events or for other reasons, unless this is required by applicable legislation. The information and the opinions set out in this press release are those available at the date of this document and may be subject to sudden 4
changes. Furthermore, any reference to the Company s or the Group s past performance should not be considered as an indication of future performance. With respect to the accounting figures shown in this press release, neither the legally-required audit nor the checks by the Board of Statutory Auditors have been completed. *** Italia Independent Group: Italia Independent Group (IIG AIM Italia/MAC) heads a group active in the eyewear and lifestyle products through its brand Italia Independent and communication through its agency Independent Ideas. The Group also acts as a platform for entrepreneurial and commercial initiatives in the communication, design and style sectors aimed at creating synergies to support the growth of the Italia Independent brand in Italy and abroad, leveraging its cross-border management experience in communication and product development. To this end, the Group participates in entrepreneurial initiatives developed through I-Spirit Vodka, Sound Identity, Care Label and Independent Value Card. Italia Independent Group S.p.A. Investor relations Pietro Peligra tel +39 02 89697474 fax +39 011 2635601 Email: investorrelations@iigroup.it www.italiaindependentgroup.com Nomad e Specialista Equita SIM S.p.A. Roberto Borsato Tel: 02 6204 1 Fax: 02 2900 5805 Email: r.borsato@equitasim.it Ufficio Stampa Corporate Close to Media +39 02 70006237 Luca Manzato (luca.manzato@closetomedia.it; cell 335 8484706) Adriana Liguori (adriana.liguori@closetomedia.it; cell 345 1778974) Consolidated financial statements are set out below 5
Consolidated income statement for the year ended 31 December 2013 Unaudited Consolidated income statement 2013 2012 Revenue Sales revenue 27,824 111.6% 16,673 106.4% Returns and allowances (3,772) -15.1% (1,859) -11.9% Total revenue 24,052 96.5% 14,814 94.6% Other income - royalties 870 3.5% 852 5.4% Total value of production 24,922 100% 15,666 100% Cost of sales (7,678) -30,8% (5,139) -32.8% Gross profit/margin 17,245 69.2% 10,527 67.2% Operating costs Sales and distribution costs (5,329) -21.4% (3,008) -19.2% Travel costs (421) -1.7% (259) -1.7% Leases (547) -2.2% (231) -1.5% Personnel expenses (4,624) -18.6% (3,200) -20.4% General and administrative costs (1,219) -4.9% (566) -3.6% Other operating costs (423) -1.7% (288) -1.8% Total operating costs (12,563) -50.4% (7,552) -48.2% EBITDA 4,682 18.8% 2,975 19.0% Depreciation and amortization (1,788) -7.2% (304) -1.9% Provisions and write-downs (758) -3.0% (426) -2.7% EBIT 2,136 8.6% 2,245 14.3% Financial expense, net (291) -1.2% (426) -2.7% Extraordinary expense, net (225) -0.9% (114) -0.7% Euro rounding differences (2) EBT 1,618 6.5% 1.704 10.9% Taxes (1,081) -4.3% (798) -5.1% Net profit for the year (gross of minorities) 537 2.2% 907 5.8% Net profit for the year (net of minorities) 456 1.8% 602 3.8% 6
Consolidated balance sheet as at 31 December 2013 Unaudited Consolidated balance sheet 31 December 2013 31 December 2012 USES Fixed assets Intangible fixed assets 8,644 964 Tangible fixed assets 2,915 2,515 Financial fixed assets 434 110 Total fixed assets (A) 11,993 3,589 Net working capital Inventories 3,660 2,397 Trade receivables 11,372 7,955 Tax/social-security payables (232) (526) Other receivables 793 259 Trade payables (7,005) (5,232) Other payables (672) (302) Net working capital (B) 7,916 4,551 Invested capital (A + B) 19,909 8,140 Provisions Provision for staff leaving indemnity (227) (109) Other provisions (709) (433) Total provisions ( C ) (936) (542) Net invested capital (A + B + C) 18,973 7,598 SOURCES Net equity 15,063 3,879 Net financial position Financial liabilities 8,231 4,502 Shareholder loans (rounding) 0 Cash and cash equivalents (4,321) (783) Total net financial position 3,910 3,719 Total sources 18,973 7,598 7
Consolidated net financial position at 31 December 2013 Unaudited NET FINANCIAL POSITION 31 December 2013 31 December 2012 A. Cash in hand 160 39 B. Cash equivalents 4,160 744 C. Securities held for trading 0 D. Cash and cash equivalents (A) + (B) + (C) 4,320 783 E. Current financial assets 0 F. Short-term bank borrowings (3,635) (2,032) G. Current portion of non-current borrowings (803) (208) H. Other current financial liabilities (78) (77) I. Current borrowings (F)+(G)+(H) (4,516) (2,317) J. Current net financial position (I) + (E) + (D) (196) (1,534) K. Non-current bank borrowings (2,253) (608) L. Bonds issued 0 H. Other non-current liabilities (1,461) (1,577) N. Non-current borrowings (K) + (L) + (M) (3,714) (2,185) O. Net financial position (J) + (N) (3,910) (3,719) 8
Consolidated cash flow statement for 2013 Unaudited Cash flow statement 2013 2012 A. Cash flows from/(used in) operating activities (740) 602 Net profit for the year 537 907 Adjustments for non-monetary costs and revenue 2,087 608 Depreciation and amortization 1,788 304 Increase in provisions for risks and charges 277 233 Increase in employee benefit provision 118 70 Translation differences (96) 1 Changes in net working capital (3,364) (913) (Increase in trade receivables) (3,417) (3,068) (Increase in sundry receivables) (1,436) (291) Decrease in inventories (1,262) (1,246) (Decrease in trade payables) 1,773 3,085 (Decrease in sundry payables) 978 607 B. Cash flows used in investing activities (5,277) (2,412) (Purchase of intangible fixed assets) (1,556) (2,412) (Purchase of tangible fixed assets) (627) (Purchase of financial fixed assets) (324) (Listing costs) (2,770) C. Cash flows from financing activities 9,555 2,062 Proceeds on the issuance of share capital 11,050 800 (Purchase)/sale of equity investments (5,223) 0 Receipt/(Repayment) of loans 3,728 1,285 (Dividends paid) 0 (23) D. Net cash flows from operations (A ± B ± C) 3,538 252 E. Opening cash balance 783 531 F. Closing cash balance (D ± E) 4,321 783 9