Pininfarina : First half 2018 Report

Pininfarina Group-First half 2018 Report

Events after the reporting period

Outlook 2018

Cambiano, 2 August 2018-The Board of Directors of Pininfarina S.p.A., chaired by Paolo Pininfarina, mettoday and approved the Group's interim financial report at 30 June 2018. The key financial figures of the Pininfarina Group as at the first six months of 2018 and 2017 are as follows:

(€/million)	30 06 2018	30 06 2017	31 12 2017	Variation*
Value of Production	55,3	39,6	15,7
Ebitda	7,0	2,2	4,8
Ebit	5,1	0,7	4,4
Gain/Loss for the period	3,1	-0,6	3,7
Net Financial Debt	3,8	8,3	12,0	-8,2
Equity	62,3	56,5	58,8	3,5

* Variations in the statement of financial position and equity figures relate to the corresponding figures at 31 December 2017.

EBITDA is the operating profit or loss gross of amortisation, depreciation, provisions, impairment losses, reversals of impairment losses and utilisation of 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 aspects that emerge from the analysis of the consolidated data for the first half of 2018, compared with those of the first half of 2017, concern the increase in production value and the strong growth in EBITDA, EBIT and net profit period. The net financial position remained positive, while shareholders' equity increased following the half-year results, in particular:

- the value of production increased by 39.6%, compared to the figures as at 30 June 2017 due to the greater contribution of all the automotive sectors;

- the gross operating margin was more than three times higher than the one of the first half 2017, mainly due to the contribution of the activities carried out in Italy and China. The operating result also improved significantly between the two half-years compared to the performance of the gross operating margin;

- within the Group and compared to the first half of 2017, Italian automotive activities increase the value of production and profitability, while the German subsidiaries show a reduction in turnover and consequent negative margins. The activities in China continue to grow as well as industrial design;

- The result for the period shows a net profit of 3.1 million euros which compares with the net loss of 0.6 million euros at 30 June 2017;

- the Group's capital and financial structure as at 30 June 2018, compared to the figures as at 31 December 2017, shows a strengthening of the shareholders' equity which includes the profit for the period and a net financial position which, although down compared to the figure of 31 December 2017, it remains positive.

At June 30, 2018, the workforce consisted of 626 units, 34 more than a year earlier (592 units).

On May 14, 2018 a new company called "Pininfarina Engineering S.r.l." was established, 100% owned by Pininfarina S.p.A. and subject to its direction and coordination. On 25 June 2018 an agreement was signed between the two companies for the transfer of a business unit through which Pininfarina Engineering S.r.l. received in conferment by the sole shareholder Pininfarina SpA the "Engineering" business unit concerningthe engineering activity carried out by the transferor, partly directly and partly through the subsidiary Pininfarina Deutschland Holding GmbH, which is also the object of the transfer. The effects and starting date of the transfer have been effective since 1 July 2018. The operation illustrated above is part of the reorganization of the investments of Pininfarina SpA. aimed at concentrating, in single legal entities, the different activities in which the group operates. The creation of a specific company in which Italian engineering activities flowed and indirectly those of Germany (through the conferment of the investment in Pininfarina Deutschland Holding) will allow a greater management efficiency due to the better integration of resources technical and human already present and operating in Italy and Germany and those in India belonging to the Mahindra group.

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

(€/million)	30 06 2018	30 06 2017	31 12 2017	Variation*
Value of Production	37,6	22,5	15,1
Ebitda	5,3	1,1	4,2
Ebit	3,8	0,0	3,8
Gain/Loss for the period	3,2	-0,3	3,5
Net Financial Debt	-0,6	5,7	7,5	-8,1
Equity	63,3	58,5	59,8	3,5

* Variations in the statement of financial position and equity figures relate to the corresponding figures at 31 December 2017.

EBITDA is the operating profit or loss gross of amortisation, depreciation, provisions, impairment losses, reversals of impairment losses and utilisation of provisions.

EBIT is the operating profit or loss.

Information required by Consob (the Italian Commission for listed companies and the stock exchange) pursuant to article 114.5 of Legislative decree no. 58/98

• 1) The net financial position of the Pininfarina Group and Pininfarina S.p.A., with separate classification of current and non-current items, are attached hereto.

• 2) The Group has no past-due liabilities (of a commercial, financial, tax or social security nature). No actions against the Group have been filed by creditors.

• 3)The Group's and parent's related party transactions areattached hereto.

• 4) Under the existing Rescheduling Agreement, there is just one financial covenant, to be checked yearlybeginning from 31 March 2018: consolidated equity at a minimum level of €30,000,000.

• 5)The parent's debt restructuring plan is proceeding in accordance with the current agreements.

• 6) Implementation of the business plan approved by the board of directors on 27 November 2015 continues as forecast.

Events after the reporting period

Today the Boards of Directors of Pininfarina S.p.A. and of Pininfarina Extra S.r.l. (a company wholly owned by the Parent Company) met, approving, inter alia, the merger by incorporation project of Pininfarina Extra S.r.l. in Pininfarina S.p.A. This is how the procedure that will lead to the complete integration between the two companies, which is likely to be valid from 1 January 2019, has begun.

The operation is aimed at rationalizing the corporate structure of the Group headed by Pininfarina S.p.A. favoring: the completion of the reorganization of the Group's corporate structure with the concentration of specific and distinct Design and Engineering activities in "Legal Entities", the centralization of commercial strategies and synergies in executive functions and the shortening of the control chain with financial benefits and economic deriving from the optimization of the structure and the relative costs.

No other significant events occurred after the end of the semester.

Outlook for 2018

The consolidated figures for the entire financial year 2018 - concerning the value of production, operating margins and the net financial position - are expected to improve compared to the corresponding values recorded in 2017.

The Board of Directors, in implementation of the Shareholders' Meeting resolution of 21 November 2016, finally resolved to increase the share capital even in several tranches, for a maximum amount of 2,225,925 euros (two million two hundred twenty-five thousand nine hundred and twenty five), with exclusion of the option right pursuant to Article 2441, paragraph 8 of the Italian Civil Code, by issuing maximum no. 2,225,925 (two million two hundred twenty-five thousand nine hundred twenty-five) ordinary shares with a par value of 1 (one) each, reserved for subscription to the beneficiaries of the "2016-2023 Stock Option Plan", in accordance with the provisions contained therein, at the unit price euro 1.10 (one point ten). The deadline for the partial or total subscription of the shares was set at 21 November 2023.

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

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.

PININFARINA GROUP

Reclassified income statement

(€'000)

First half 2018

Revenue from sales and services

Change in inventories and contract work in progress

Other revenue and income

48,457 2,934 3,878

% 87.67 5.31 7.02

First half 2017

34,546 1,423 3,658

% 87.18 3.60 9.22

Variation

2017

13,911

79,642

1,511 50

220 7,410

Revenue

55,269

100.00

39,627

100.00

15,642 87,102

Net gains on the sale of non-current assets

184

0.33

1

-

183

137

Materials and services (*)

(23,426)

(42.38)

(15,439)

(38.96)

(7,987)

(35,245)

Change in raw materials

83

0.15

76

0.19

7

85

Value added

32,110

58.10

24,265

61.23

7,845

52,079

Labour cost (**)

(25,128)

(45.47)

(22,082)

(55.72)

(3,046)

(44,596)

Gross operating profit

6,982

12.63

2,183

5.51

4,799

7,483

Amortisation and depreciation

(1,894)

(3.43)

(1,514)

(3.82)

(380) (3,023)

(Additions to)/utilisation of provisions and impairment losses

(2)

0.00

(12)

(0.03)

10 (232)

Operating profit

5,086

9.20

657

1.66

4,429 4,228

Net financial expense

(1,272) (2.30)

(986)

(2.50)

(286)

(2,107)

Share of profit (loss) of equity-accounted investees

(34) (0.06)

7

0.02

(41) 12

Profit (loss) before taxes

3,780

6.84

(322)

(0.82)

4,102 2,133

Income taxes

(676)

(1.23)

(282)

(0.71)

(394) (821)

Profit (loss) for the period/year

3,104-

5.61-

(604)

(1.53)

-

-

3,708 1,312-

(*)Materials and servicesare net of utilisations of the provisions for product warranty and risks (€1.3 thousand and €2.9 thousand forH1 2017 and H1 2018, respectively).

(**)Labour costis net of utilisations of the restructuring provision (€4.6 thousand and €39.3 thousand for H1 2017 and H1 2018,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.