Aeffe S p A : 9M 20 Results Press Release

PRESS RELEASE

Improving Trend In The Third Quarter

Approved Results As At 30 September 2020

San Giovanni in Marignano, 11th November 2020 - The Board of Directors of Aeffe SpA - operating in the luxury sector, listed on the STAR segment of Borsa Italiana, with a presence in the prêt-à-porter, footwear and leather goods division under renowned brand names such as Alberta Ferretti, Philosophy di Lorenzo Serafini, Moschino and Pollini - approved today the Interim consolidated financial statement as of September 30, 2020.

• Consolidated revenues of €206.8m, compared to €269.0m of the first nine months of 2019, with a 23.1% decrease at constant exchange rates (-23.2% at current exchange rates).
• Adjusted Ebitda of €12.2m (5.9% of revenues), net of an extraordinary write-downof raw materials inventories of €4.0m due to the Covid-19 pandemic, compared to Ebitda of €46.1m in the first nine months of 2019. Reported Ebitda of €8.2m.
• Adjusted Group net loss, net of non-recurring costs of €5.1m, equal to €7.4m compared to Profit of €13.2m in the first nine months of 2019. Reported net loss of €12.5m.
• Net financial debt with IFRS 16 effect of €148.7m compared to €149.9 as of September 2019. Financial debt net of IFRS 16 effect of €60.1m as of September 2020.
• Confirmed the Action Plan adopted by management to safeguard employees and protect the economic and financial solidity of the business, with positive effects already recorded in terms of cost efficiency and working capital management.
• Focus on collections more oriented to market changes and on the development of e-commerce and omnichannel distribution.

Consolidated Revenues

In the first nine months of 2020, AEFFE consolidated revenues amounted to €206.8m compared to €269.0m the first nine months of 2019, with a 23.1% decrease at constant exchange rates (-23.2% at current exchange rates).

The trend of the first nine months of the year has been penalized by the rapid spread of the Covid-19 pandemic and the consequent rigorous measures adopted by the various countries in terms of bans and suspension of

1

international traffic of people and non-essential activities; these restrictions concerned both the Group's directly operated stores and the wholesale distribution, with negative effects on both channels.

Revenues of the prêt-à-porter division amounted to €151.7m, down by 24.4% both at current and constant exchange rates compared with the first nine months of 2019.

Revenues of the footwear and leather goods division decreased by 15.4% both at constant and current exchange rates, before interdivisional eliminations and amounted to €81.9m.

In the third quarter of the year the Group has registered a good recovery in revenues, mainly as a result of shipments of the F/W 2020 collections, as postponed beyond the end of the first half of the year due to the difficult international market context and lockdown measures. The Fall/Winter 2020 collections have shown significant resilience among our clients despite the extremely complicated macroeconomic context; the Group has achieved the objective to maintain the overall percentage of returns and discounts on this season's collections below 10%, as compared to orders originally collected. This figure is extremely positive considering the difficult market conditions linked to the Covid-19 emergency and testifies appreciation and appeal of the Group's brands across clients.

Massimo Ferretti, Executive Chairman of Aeffe Spa, has commented: "In a market characterized by a generalized contraction in consumption and a prudent stance, we positively evaluate the improving trend of the business in the third quarter of the year, which, along with the benefits of the actions taken to support the economic and financial soundness of the Group, is reflected in the results of the first nine months.

Thanks to the reputation of our brands and the concrete investment plan implemented in the areas of digital marketing with the development of a "virtual showroom" and the strengthening of e-commerce, the order collection for the next Spring/Summer 2021 collections registered a trend above expectations, albeit with a negative balance. Despite the context remains uncertain and challenging, we are confident that the strategy adopted will be able to create solid foundations with a medium-long term horizon".

Revenues Breakdown by Region

(in thousands of Euro)	9M 20	9M 19	%	%
Reported	Reported	Change	Change*
Italy	97.858	125.195	-21,8%	-21,8%
Europe (Italy exluded)	61.006	62.334	-2,1%	-2,2%
Asia and Rest of the World	39.217	67.464	-41,9%	-41,7%
America	8.673	14.048	-38,3%	-38,2%
Total	206.754	269.041	-23,2%	-23,1%

(*) Calculated at constant exchange rates

In the first nine months of 2020 all geographic areas, although showing a decrease compared to the same period in 2019, recorded a good recovery in the third quarter of the year.

Sales in the Italian marketdecreased by 21.8% to €97.9m compared to the first nine months of 2019, driven by both the retail and wholesale channels, due to the sharp decline in tourism flows following the stringent measures to contrast the spread of the pandemic. However, in the third quarter Italy recorded a good recovery, showing a slightly upward trend compared to the same period of last year.

The Italian market accounted for 47.3% of consolidated revenues.

At constant exchange rates, in the first nine months of 2020, sales in Europe, contributing to 29.5% of consolidated sales, decreased by 2.2%; in the third quarter UK and Germany outperformed the average of the area, showing an upward trend compared to the third quarter of 2019.

In Asia and in the Rest of the World, the Group's sales totalled €39.2m, amounting to 19.0% of consolidated sales, recording a decrease of 41.7% at constant exchange rates compared the first nine months of 2019 (-34.7% in the third quarter). The Far East area has been hardly impacted by the restrictions imposed to limit the virus, while Middle East has experienced a less significant decline. The Greater China area reported a 41% decrease over the period; however, the region has recorded in the last quarter positive signs in terms of sales and traffic in the stores, showing an evident recovery trend.

2

At constant exchange rates, sales in America, contributing to 4.2% of consolidated sales, posted a decrease of 38.2% (-10.3% in the third quarter); the Covid-19 impact has involved both the retail and the wholesale channels.

Revenues by distribution channel

(In thousands of Euro)	9M 20	9M 19	%	%
Reported	Reported	Change	Change*
Wholesale	148.938	187.575	-20,6%	-20,6%
Retail	50.163	71.608	-29,9%	-29,9%
Royalties	7.652	9.858	-22,4%	-22,4%
Total	206.754	269.041	-23,2%	-23,1%

(*) Calculated at constant exchange rates

By distribution channel, all distribution channels were affected by the effects of the spread of Covid-19.

The wholesalechannel, contributing to 72% of consolidated sales, recorded a 20.6% decrease both at constant and current exchange rates. In the third quarter the decrease amounted to 6.7% at constant exchange rates and with an improvement compared to the first half of the year thanks to the regular shipments of the F/W20 collections.

The sales of directly-operated stores (DOS), equal to 24.3% of Group sales, decreased by 29.9% at constant and current exchange rates compared to the first nine months of 2019. In the third quarter, sales in the retail channel decreased by 9.4% at constant exchange rates, recording a gradual and steady improvement compared to the first semester, despite still being influenced by the limited traffic in shops.

E-commerce sales continued to perform well during the period.

Revenues from royalties decreased by 22.4% compared to the first nine months of 2019 and represent 3.7% of consolidated revenues.

Network of Monobrand Stores

DOS	9M 20	FY 19			Franchising	9M 20	FY 19
Europe	43	42			Europe	40	40
Americas	1	3			Americas		1
Asia	16	16			Asia	108	122
Total	60	61			Total	148	163

As far as the directly operated stores network is concerned, during the period the Moschino brand stores in Los Angeles and in New York were closed because no longer considered strategic in terms of location, along with the opening of a multi-brand store in Italy. In terms of franchised stores, in the period some openings and closures took place in Europe and in the Asian market due to the strategic repositioning of the stores.

Group's Operating and Net Result Analysis

In the first nine months of 2020, the adjusted consolidated Ebitda equalled to €12.2m, net of an extraordinary write-down of the raw materials inventories of the leather goods division for €4.0m as no longer suitable to manufacture new collections in line with the changed market needs following the Covid-19 pandemic.

The adjusted consolidated Ebitda of €12.2m (with an incidence of 5.9% on turnover) decreased by €33.9m Euro compared to €46.1m of Ebitda in the first nine months of 2019 (equal to 17.1% of revenues). The reported consolidated Ebitda was €8.2m.

The decline in margins is directly attributable to the decline in sales both in wholesale and retail channels across all geographies where the Group operates due to the Covid-19 pandemic, as described above. However, in the first nine months margins benefited, for the corresponding period of time, from positive results in terms of cost

3

efficiency deriving from the actions taken to face the global consequences of the virus spread, which largely materialised from the second quarter of the year. Cost savings involved various types of expenditure closely related to the economic situation of the health emergency, mainly including personnel, rental and travel costs and overheads.

For the prêt-à-porter division, in the first nine months of 2020 Ebitda amounted to €5.9m, compared to €33.4m of the first nine months of 2019; the change was due to the sales decline.

Ebitda adjusted of the footwear and leather goods division (net of the extraordinary write-down of the inventory of raw materials) amounted to €6.3m, compared to a €12.7m of the first nine months of 2019, with a €6.4m decrease due to the sales decline. Reported Ebitda was €2.3m.

Consolidated Ebit adjusted, net of non-recurring costs of €5.1m, was negative for €7.4m, compared to the figure of €26.0m of the first nine months of 2019, down with a €33.4m, mainly due to the Ebitda reduction.

The reported consolidated Ebit was negative by €12.5m.

The adjusted net loss of the Group, net of non-recurring costs of €5.1m, was equal to €7.4m compared to the Net Profit for the Group of €13.2m of the first nine months of 2019.

The reported net loss equalled to €12.5m.

Group's Balance Sheet Analysis

The balance sheet as of 30th September 2020 shows a Shareholders' equity equal to €158.0m and financial debt net of IFRS 16 effect amounts to €60.1m, decreasing compared to the debt as at the end of June 2020. During the year 2020 financial debt increased, mostly because of the increase in working capital.

As of 30th September 2020, operating net working capital amounts to €97.1m (33.6% of LTM sales) compared to €97.3m as of 30th September 2019 (27.7% of LTM sales).

The increase in the incidence of net working capital on revenues is mainly due to the increase in the ratio of receivables from customers following the postponement of shipments of the F/W 2020 collections from the second to the third quarter of the year and higher stocks of finished products of the same season in the retail channel.

Capex in the first nine months of 2020, amounting to €4.5m, mainly refer to the completion of a new warehouse.

Actions adopted by the Group to face the Covid-19 pandemic effects. Business update

The international macroeconomic situation remains complicated and the Covid 19 pandemic, which characterized the first semester of the year, has continued to influence negatively also the third quarter of the year, significantly impacting the entire luxury industry globally, albeit with less intensity.

At the date of this press release, as a result of new restrictions on the activities imposed by the government authorities aimed at containing the pandemic across the Group's main reference markets, including Italy, approximately ten direct shops are closed with others operating with limited opening hours, waiting from the new upcoming government regulations in this regard expected for the beginning of December.

In this highly challenging scenario, the Group's brands, and Moschino in particular, benefited from their solid market positioning. AEFFE confirms its commitment in terms of research, creativity and high-quality manufacturing with the aim of further strengthening the portfolio brands positioning to counter the effects of the pandemic.

AEFFE has taken timely measures deemed of fundamental importance for the Group's long-term interests and to meet the challenges of the current international situation.

The primary objective of the Group from the outset has been to protect the safety and the health of its employees, partners and clients. In this regard, the Group has urgently and responsibly adopted all the security measures and protocols introduced by the authorities in the various countries, while ensuring the continuity of the business operations adopting smart-working solutions, when possible.

The corrective measures taken by the Group to contrast the negative effects of the global emergence of the Covid-19 pandemic effectively and efficiently are summarised below.

In terms of sales,the actions adopted aim to: 1) carefully manage the relations with the main commercial partners, especially in the Far East area, supporting them as much as possible; 2) enhance digital activities to support the online business, customer care in particular, through the reallocation of human resources and time for the development of technologies and tools able to satisfy customers' needs for a more and more personalized customer experience. For some stores, streaming shopping technology has been introduced with

4