PININFARINA : FIRST HALF 2019 REPORT EVENTS AFTER THE REPORTING PERIOD OUTLOOK 2019

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Pininfarina Group - First half 2019 Report

Events after the reporting period

Outlook 2019

Cambiano, 5 August 2019- The Board of Directors of Pininfarina S.p.A., chaired by Paolo Pininfarina, met today and approved the Group's interim financial report at 30 June 2019. The key financial figures of the Pininfarina Group as at the first six months of 2019 and 2018 are as follows:

(€/million)	H1 2019	H1 2018	2018	Variation*
Revenues	46,4	55,3		-8,9
Ebitda	0,9	7,0		-6,1
Ebit	-1,9	5,1		-7,0
Profit (loss) for the period	-2,6	3,1		-5,7
Net Financial position (debt)	-7,3	3,8	5,2	-12,5
Equity	59,3	62,3	61,7	-2,4

* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2018.

EBITDA is the operating profit or loss gross of amortisation, depreciation and provisions. EBIT is the operating profit or loss.

Pursuant to article 154-bis. 2 of the Consolidated finance act, the manager in charge of financial reporting, Gianfranco Albertini, states that the financial disclosures provided in this press release are consistent with the relevant documentation, ledgers and accounting records.

The most significant issues that arise from a comparison of the H1 2019 and H1 2018 consolidated financial figures include the decrease in revenue - mainly dependent on the effects of the suspension of some orders

• and the decline in financial margins (the operating result and the net result for the period both closed negative). Equity at the reporting date, compared to the figure as at 31 December 2018, decreased due substantially to the result for the period. The recorded net financial position changed sign and became negative mainly due to the effect induced by the adoption of the new international accounting standard IFRS 16 (effective from 1 January 2019) which provided for the recording of a financial liability equal to the discounted value of the contracts of rent or lease in force (right of use). Specifically:
• • the revenue decreased overall by 16%, compared to the figures as at 30 June 2018, the design sector dropped by 10% while the engineering sector fell by 23%. Within the sectors and according to geographical areas, design activities in Italy and U.S.A. decreased while those carried out in China increased. Regarding engineering sector, the activities in Italy are contracted while those realized in Germany increased;
  • the gross operating profit has fallen sharply compared to the first half of 2018, due to the lower value of production and the reduction in prices applicable in the reference markets, still remained positive thanks to the contribution of engineering activities in Italy and Germany and to design activities in China;
  • at the reporting date the reduction in the gross operating profit and the presence of higher provisions influenced the operating result for the period, which was negative;

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• net financial expense, mainly composed of notional charges, decreased by more than 60% thanks to the positive performance of the managed cash that has generated a positive result arising from changes in the fair value at the reporting date;
• As a result of the above mentioned figures, the result for the period recorded a loss of € 2.6 million compared to the net profit of € 3.1 million for the first half of 2018.

The net financial position was negative for € 7.3 million compared to the positive figure of € 5.2 million at 31 December 2018 (positive value of € 3.8 million at 30 June 2018). It should be noted that, in the absence of the accounting effects induced by the above-mentioned international accounting standard IFRS 16, the net financial position at 30 June 2019 would have been negative for € 0.3 million.

Equity at the reporting date decreased to € 59.3 million (€ 62.3 million for the first half of 2018) compared to € 61.7 million at 31 December 2018, mainly due to the net loss for the period.

The headcount increased by 10% (+ 63 units) from 626 at 30 June 2018 to 689 at the reporting date.

The key financial figures of the parent, Pininfarina S.p.A., are summarised below:

(€/million)	H1 2019	H1 2018	2018	Variation*
Revenues	23,5	37,6		-14,1
Ebitda	-0,5	5,3		-5,8
Ebit	-2,3	3,8		-6,1
Profit (loss) for the period	-2,3	3,2		-5,5
Net Financial Position (debt)	-1,9	-0,6	0,0	-1,9
Equity	69,4	63,3	66,2	3,2

* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2018.

EBITDA is the operating profit or loss gross of amortisation, depreciation and provisions. EBIT is the operating profit or loss.

Events after the reporting period

There are no significant events that occurred after the reporting date.

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Outlook for 2019

On the basis of the final data for the H1 2019 and the projections to finish the current year, it is expected for the entire 2019 financial year: a decrease in the value of production by about 10% compared to 2018 financial year and a negative operating result while the reduction in gross debt is confirmed.

The previous expectations, released on the occasion of the approval of the 31 March 2019 data, were the following: "The Group is expected to consolidate the results achieved for 2018, although with reduced revenue and operating profit. It still plans to reduce its gross financial debt.".

Contacts:

Pininfarina:

Gianfranco Albertini, C.F.O. and Investor Relations, Phone [phone]

Francesco Fiordelisi, Corporate communication, Phone [phone].7262530

Studio Mailander:

Carolina Mailander, Phone [phone].6555651

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RECLASSIFIED INTERIM FINANCIAL STATEMENTS

The reclassified interim financial statements group the figures presented in the legally-required statements to improve their understanding, without however changing their presentation logic.

The terms "EBITDA" and "EBIT" as used in the reclassified interim financial statements are the "operating profit or loss", gross of amortisation, depreciation, provisions, impairment losses, reversals of impairment losses and utilisation of provisions, and "operating profit or loss" presented in the IFRS interim financial statements, respectively.

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								COMUNICATO STAMPA
	PININFARINA GROUP
	Reclassified income statement
		(€'000)
				Data	at					Data at
		First half		First half
		2019	%	2018	%	Variation	2018
Revenue from sales and services	43.736	94,24	54.169	98,01	(10.433)	102.899
Change in finished goods	6	0,01	(14)	(0,03)	20	(26)
Other revenue and income	2.667	5,75	1.114	2,02	1.553	2.454
Revenue	46.409	100,00	55.269	100,00	(8.860)	105.327
Net gains on the sale of non-current assets	-	-	184	0,33	(184)	184
Materials and services (*)	(17.907)	(38,58)	(23.426)	(42,38)	5.519	(42.900)
Change in raw materials	43	0,09	83	0,15	(40)	41
Value added	28.545	61,51	32.110	58,09	(3.565)	62.652
Labour cost (**)	(27.647)	(59,58)	(25.128)	(45,46)	(2.519)	(50.038)
EBITDA	898	1,93	6.982	12,63	(6.084)	12.614
Amortisation and depreciation	(2.386)	(5,14)	(1.894)	(3,43)	(492)	(3.433)
(Additions to)/utilisation of provisions and impairment losses	(423)	(0,91)	(2)	-	(421)	(5.386)
EBIT	(1.911)	(4,12)	5.086	9,20	(6.997)	3.795
Net financial expense	(504)	(1,08)	(1.272)	(2,30)	768	(2.397)
Share of profit of equity-accounted investees	(19)	(0,04)	(34)	(0,06)	15	(21)
Profit before taxes	(2.434)	(5,24)	3.780	6,84	(6.214)	1.377
Income taxes	(207)	(0,45)	(676)	(1,23)	469	796
Profit for the period/year	(2.641)	(5,69)	3.104	5,61	(5.745)	2.173

1. Materials and servicesare net of utilisations of the provisions for product warranty and risks (€2.9 thousand and €92.3 thousand for the first half of 2018 and 2019, respectively)
   (**) Labour costis net of utilisations of the restructuring provision (€39.3 thousand and €184.5 thousand for 2018 and 2019, respectively).
   As required by Consob resolution no. DEM/6064293 of 28 July 2006, a reconciliation of the data in the condensed interim consolidated financial statements with those in the reclassified schedules is provided below:
   - Materials and services include raw materials and components, other variable production costs, external variable engineering services, exchange rate gains and losses and other expenses.
   - Amortisation and depreciation comprise amortisation of intangible assets and depreciation of property, plant and equipment and investment property.
   - (Additions to)/utilisation of provisions and impairment losses include additions to/utilisation of provisions, impairment losses and inventory write-downs.
   - Net financial expense comprises net financial expense and dividends.

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PININFARINA GROUP

Reclassified statement of financial position

(€'000)

			Data at			Data at
		30.06.2019	31.12.2018	Variation	30.06.2018
Net non-current assets (A)
Net intangible assets	7.691	7.326	365	7.158
Net property, plant and equipment and investment proper	50.292	49.979	313	49.520
Right of use activities	7.063	-	7.063	-
Equity investments	837	857	(20)		844
Totale A	65.883	58.162	7.721	57.522
Working capital (B)
Inventories	457	408	49	4.892
Contract assets	5.334	3.131	2.203	4.430
Net trade receivables and other assets	35.388	34.647	741	33.997
Assets held for sale	-	-	-	-
Deferred tax assets	3.011	3.019	(8)	874
Trade payables	(14.901)	(16.595)	1.694	(18.241)
Contract liabilities	(14.043)	(13.566)	(477)	(9.707)
Provisions for risks and charges	(568)	(620)	52	(549)
Other liabilities	(8.730)	(7.268)	(1.462)		(9.905)
Total B	5.948	3.156	2.792		5.791
Net invested capital (C=A+B)	71.831	61.318	10.513		63.313
Post-employment benefits (D)	5.185	4.778	407	4.737
Net capital requirements (E=C-D)	66.646	56.540	10.106		58.576
Equity (F)	59.337	61.749	(2.412)	62.340
(Net financial position) debt (G)
Non-current loans and borrowings	28.074	21.891	6.183	24.525
(Net current financial position)/debt	(20.765)	(27.100)	6.335		(28.289)
Total G	7.309	(5.209)	12.518		(3.764)
Total as in E (H=F+G)	66.646	56.540	10.106	58.576

1. "Other liabilities" include the following items: deferred tax liabilities, other financial liabilities, current tax liabilities and other liabilities.

PININFARINA GROUP

Net financial debt

(€'000)

		Data at			Data at
	30.06.2019	31.12.2018	Variation	30.06.2018
Cash and cash equivalents	13.177	18.357	(5.180)	19.335
Current assets held for trading	13.806	13.106	700	12.508
Current bank overdrafts	(1.043)	(725)	(318)	-
Right of use liabilities	(1.537)	-	(1.537)	-
Loans and borrowings - related parties	-	-	-	-
Current portion of bank loans and borrowings	(3.638)	(3.638)	-		(3.554)
Net current financial position (debt)	20.765	27.100	(6.335)		28.289
Non-current loans and receivables - third parties	-	-	-	-
Non-current loans and receivables - related parties	550	550	-	652
Non-currentheld-to-maturity investments	-	-	-	-
Medium-long term right of use liabilities	(5.434)	-	(5.434)	-
Non-current bank loans and borrowings	(23.190)	(22.441)	(749)		(25.177)
Non-current loans and borrowings	(28.074)	(21.891)	(6.183)		(24.525)
NET FINANCIAL POSITION (DEBT)	(7.309)	5.209	(12.518)		3.764

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PININFARINA S.p.A.

Reclassified income statement

(€'000)

			Data	at
	First half		First half
	2019	%	2018	%	Variation
Revenue from sales and services	22.753	96,78	36.932	98,29	(14.179)
Change in finished goods	6	0,03	(8)	(0,02)	14
Other revenue and income	751	3,19	651	1,73	100
Revenue	23.510	100,00	37.575	100,00	(14.065)
Net gains on the sale of non-current assets	-	-	184	0,49	(184)
Materials and services (*)	(13.601)	(57,85)	(18.892)	(50,28)	5.291
Change in raw materials	43	0,18	83	0,22	(40)
Value added	9.952	42,33	18.950	50,43	(8.998)
Labour cost (**)	(10.483)	(44,59)	(13.624)	(36,26)	3.141
EBITDA	(531)	(2,26)	5.326	14,17	(5.857)

Data at

2018

61.925

(15)

1.313

63.223

184

(32.099)

41

31.349

(22.589)

8.760

Amortisation and depreciation	(1.303)	(5,54)	(1.498)	(3,98)	195	(2.567)
(Additions to)/utilisation of provisions and impairment losses	(496)	(2,11)	4	0,01	(500)	264
EBIT	(2.330)	(9,91)	3.832	10,20	(6.162)	6.457
Net financial expense	173	0,73	(461)	(1,23)	634	(1.580)
Share of profit of equity-accounted investees	(19)	(0,08)	(40)	(0,11)	21	(33)
Profit before taxes	(2.176)	(9,26)	3.331	8,86	(5.507)	4.844
Income taxes	(105)	(0,44)	(179)	(0,47)	74	886
Profit for the period/year	(2.281)	(9,70)	3.152	8,39	(5.433)	5.730

1. Materials and servicesare net of utilisations of the provisions for product warranty and risks (€2.9 thousand and €92.3 thousand for the first half of 2018 and 2019, respectively)
   (**) Labour costis net of utilisations of the restructuring provision (€39.3 thousand and €184.5 thousand for 2018 and 2019, respectively).
   As required by Consob resolution no. DEM/6064293 of 28 July 2006, a reconciliation of the data in the condensed interim consolidated financial statements with those in the reclassified schedules is provided below:
   - Materials and servicesinclude raw materials and components, other variable production costs, external variable engineering services, exchange rate gains and losses and other expenses.
   - Amortisation and depreciationcomprise amortisation of intangible assets and depreciation of property, plant and equipment and investment property.
   -(Additions to)/utilisation of provisions and impairment losses include additions to/utilisation of provisions, impairment losses and inventorywrite-downs.
   - Net financial expensecomprises net financial expense and dividends.

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PININFARINA S.p.A.

Reclassified statement of financial position

(€'000)

		Data at			Data at
	30.06.2019	31.12.2018	Variation	30.06.2018
Net non-current assets (A)
Net intangible assets	7.151	5.963	1.188	5.930
Net property, plant and equipment and investment property	41.019	40.231	788	40.082
Right of use activities	228	0	228	0
Equity investments	22.214	24.044	(1.830)		22.117
Total A	70.612	70.238	374	68.129
Working capital (B)
Inventories	457	266	191	2.924
Contract assets	1.264	839	425	2.610
Net trade receivables and other assets	25.781	22.387	3.394	27.302
Assets held for sale	-	-	0	-
Deferred tax assets	1.280	1.255	25	-
Trade payables	(12.488)	(14.566)	2.078	(16.056)
Contract liabilities	(7.398)	(7.541)	143	(8.940)
Provisions for risks and charges	(568)	(528)	(40)	(543)
Other liabilities	(4.050)	(3.342)	(708)		(7.491)
Total B	4.278	(1.230)	5.508	(194)
Net invested capital (C=A+B)	74.890	69.008	5.882		67.935
Post-employment benefits (D)	3.537	2.717	820	3.972
Net capital requirements (E=C-D)	71.353	66.291	5.062		63.963
Equity (F)	69.419	66.239	3.180	63.316
(Net financial position) debt (G)
Non-current loans and borrowings	21.057	20.025	1.032	22.923
(Net current financial position)/debt	(19.123)	(19.973)	850		(22.276)
Total G	1.934	52	1.882		647
Total as in E (H=F+G)	71.353	66.291	5.062	63.963

PININFARINA S.p.A.

Net financial debt

(€'000)

		Data at
	30.06.2019	31.12.2018	Variation
Cash and cash equivalents	9.335	11.183	(1.848)
Current assets held for trading	13.806	13.106	700
Right of use liabilities	(100)	-	(100)
Loans and borrowings - related parties	(340)	(738)	398
Current portion of bank loans and borrowings	(3.578)	(3.578)	0
Net current financial position/(debt)	19.123	19.973	(850)
Non-current loans and receivables - related parties	2.203	2.326	(123)
Medium-long term right of use liabilities	(130)	-	(130)
Non-current bank loans and borrowings	(23.130)	(22.351)	(779)
Non-current loans and borrowings	(21.057)	(20.025)	(1.032)
NET FINANCIAL POSITION (DEBT)	(1.934)	(52)	(1.882)

Data at

30.06.2018

13.597

12.508

-

(335)

(3.494)

22.276

2.134

-

(25.057)

(22.923)

(647)

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Related party transactions - Pininfarina Group

The table below, which is presented pursuant to Consob communication no. DEM/6064293 of 28 July 2006, summarises related party transactions, including intragroup transactions. These transactions were carried out at market conditions, consistent with the nature of the goods exchanged or services provided. They were neither atypical nor unusual for the purposes of the above-mentioned communication.

	Commercial		Financial			Operating		Financial
	Assets		Liabilities		Assets		Liabilities			Revenue		Expense		Income		Expense
Signature S.r.l.	78.956	39.638	550.000	-		60.010	47.701	-	-
Tech Mahindra Ltd	93.694	92.059	-	-		147.061	88.891	-	-
Tech Mahindra GmbH	27.618	-	-	-		113.202	-	-	-
Mahindra&Mahindra Limited	1.475.118	-	-	-		6.237.027	-	-	-
Mahindra Graphic Research Design S.r.l.	-	-	-	-		-	143.585	-	-
Ssangyong Motor Company	-	-	-	-		302.000	-	-	-
Automobili Pininfarina GmbH	692.650	-	-	-		9.176.101	-	-	-
Total	2.368.036	131.697	550.000			-	16.035.401	280.177	-	-

Intragroup transactions include:

• Signature S.r.l.: loan agreement, purchases and sales of goods with Pininfarina S.p.A.;
• Tech Mahindra Ltd: services agreements with Pininfarina Deutschland GmbH and Pininfarina Engineering S.r.l.;
• Tech Mahindra GmbH: lease agreement for equipped office premises with Pininfarina Deutschland GmbH;
• Mahindra & Mahindra Ltd: brand licence agreement and engineering services agreements with Pininfarina S.p.A. and Pininfarina Engineering S.r.l.;
• Mahindra Graphic Research Design S.r.l.: engineering services agreements with Pininfarina S.p.A. and Pininfarina Engineering S.r.l.;
• Ssangyong Motor Company: design services agreement with Pininfarina S.p.A.;

-

• Automobili Pininfarina GmbH: design and engineering agreement with Pininfarina S.p.A..

In addition to the above figures, Studio Starclex - Studio Legale Associato Guglielmetti, related to Romina Guglielmetti (director of Pininfarina S.p.A.), provided legal assistance to the parent for €18.000.

On 26 September 2018, Pininfarina Engineering S.r.l. signed an engineering services agreement with Mahindra & Mahindra Ltd ("M&M") for the development of a project to design the upper body systems of the body shell, integration of the body shell with the main operating systems and implementation of the performance requested of a new Mahindra vehicle based on its new platform.

Pininfarina Engineering S.r.l. will receive a fee of €10,375,000.00 for its services to be provided over roughly 16 months. This fee qualifies the transaction as a "major transaction" pursuant to the relevant legislation. The services provided are part of the "company's normal business activities" and are rendered "on an arm's length basis". At June 30, 2019 the value of the services provided to the customer was €10.086.368, of which € 4.772.368 pertaining to the first half of 2019.

The parent company signed with Automobili Pininfarina GmbH ("AP") four successive agreements related to the same project (respectively on June 29, 2018, March 26 2019, May 31, 2019, July 22, 2019) for the supply of design and engineering services concerning the development of a project concerning, in brief: the design of the interior and exterior of a new car, the design of the "upper body systems" of the body, the integration of the body with the main operating systems and the realization of the required performances of a new vehicle based on its new platform.

Pininfarina S.p.A. will receive a fee of €14.656.132, for its services to be provided from June 2018 to september 2019. The above mentioned total fee qualifies the transaction as a "major transaction" pursuant to the relevant legislation. The services provided are part of the "company's normal business activities" and are

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rendered "on an arm's length basis". At June 30, 2019 the value of the services provided to the customer was €11.102.707, of which €7.187.072 pertaining to the first half of 2019.

Directors' and statutory auditors' fees

(€'000)	First half 2019		First half 2018
Directors	477	505
Statutory auditors	53	56
Totale
530	561

Related party transactions - Pininfarina S.p.A.

	Commercial		Financial		Operating		Financial
	Assets		Liabilities		Assets		Liabilities		Revenue		Expense		Income		Expense
Signature S.r.l.	78.956	39.638	550.000	-	60.010	47.701	-	-
Pininfarina Engineering S.r.l.	2.628.066	2.354.814	152.741	339.883	1.137.797	4.948.713	-	-
Pininfarina Deutschland Holding GmbH	-	-	-	-	-	-	-	-
Pininfarina Deutschland GmbH	-	-	1.500.000	-	-	-	5.060	-
Pininfarina Shanghai Co. Ltd	213.794	-	-	-	364.090	11.000	500.000	-
Pininfarina of America Corp.	243.880	-	-	-	275.537	-	-	-
Tech Mahindra Ltd	89.215	5.800	-	-	124.582	5.800	-	-
Mahindra&Mahindra Limited	-	-	-	-	1.464.527	-	-	-
Automobili Pininfarina GmbH	688.961	-	-	-	9.176.101	-	-	-
Ssangyong Motor Company	-	-	-	-	302.000	-	-	-
Total	3.942.872	2.400.252	2.202.741	339.883	12.904.644	5.013.214	505.060	-

Intragroup transactions include:

• Signature S.r.l.: loan agreement and purchases of goods;
• Pininfarina Engineering S.r.l.: lease for equipped office premises, secondment agreement and cost sharing agreement, services agreements;
• Pininfarina Deutschland GmbH: loan agreement;
• Pininfarina Shanghai Co Ltd: services agreement;
• Pininfarina of America Corp.: secondment agreement and cost sharing agreement
• Tech Mahindra Ltd: services agreement e and recharge of costs incurred by Pininfarina S.p.A. on the company's behalf;
• Mahindra & Mahindra Ltd: brand licence agreement and engineering services agreements;
• Automobili Pininfarina GmbH: design and engineering agreement;
• Ssangyong Motor Company: design services agreement.

In addition to the above figures, Studio Starclex - Studio Legale Associato Guglielmetti, related to Romina Guglielmetti (director of Pininfarina S.p.A.), provided legal assistance to the company for €18.000.

Directors' and statutory auditors' fees

(€'000)	First half 2019		First half 2018
Directors	477	375
Statutory auditors	50	52
Totale	527	427

The total fees to Pininfarina S.p.A.'s key management personnel approximate €0.9 million for the first half of 2019.

D I R E Z I O N E C O M U N I C A Z I O N E E I M M A G I N E - W W W . P I N I N F A R I N A . C O M - I N F O @ P I N I N F A R I N A . C O M