B&C Speakers S p A : 2021-03-22 The Board of Directors approves the Draft Financial Statement for the year 2020

PRESS RELEASE

B&C Speakers S.p.A.:

The Board of Directors approves the Draft Financial Statement for the year 2020

•  Consolidated revenues amounted to € 31.98 million (a decrease compared to the

  € 56,29 million in 2019);

•  Consolidated EBITDA equal to € 5.12 million (a decrease compared to the € 10.90

  in 2019);

•  Group net profit amounted to € 1.65 million, down compared to € 8.67 million in

  2019);

•  Group net financial position positive and equal to € 0.6 million (it was negative

  and amounted to € 5.01 million at year-end 2019);

•  Continuation of the actions already taken at the beginning of the pandemic to mitigate the financial and economic effects linked to Covid19.

•  Proposed distribution to shareholders of an ordinary dividend equal to Euro 0.26

  for each share held with ex-dividend date at May 4, 2020

Bagno a Ripoli (Florence - Italy), March 22, 2021 - The Board of Directors of B&C Speakers S.p.A.,

one of the foremost international players in the design, manufacture, distribution and marketing of professional electro-acoustic transducers approved the Draft Financial Statement for the year 2020, drawn up in accordance with IFRS international accounting standards.

CEO Lorenzo Coppini commented: "after this disastrous year for social relations and aggregation, launching large-scale vaccination operations is bringing renewed optimism. Especially in countries where a strong regression of the pandemic has already been achieved, such as the USA, China and the UK, the entertainment and live music market is resuming with enthusiasm, confirming that public can't wait to have fun again by participating to a ritual, be it the opera at the Theater or the Heavy Metal concert in the mud, which no virtual experience can ever replace. Therefore we're expecting an accelerating year and a gradual exit from the current situation of drastic contraction in demand, waiting for Europe to move too".

Revenues

As we all know, the Group's reference market suffered the negative effects of the pandemic throughout the year, which actually prohibited any event involving social aggregation and led to the interruption or cancellation of all live music events that would have generated an important business opportunity for B&C Speakers.

The effect of these decisions resulted in a significant decrease in the Group's turnover, equal to Euro 31.98 million for the year 2020, while it was equal to Euro 56.28 million at the end of 2019.

The decrease in the Group's turnover compared to 2019 occurred, albeit with different timing and methods, on all the reference markets, as summarized in the chart below:

Geographical Area	2020	%	2019	%
Latin America	2.037.630	6%	4.670.023	8%
Europe	12.233.506	38%	25.596.396	45%
Italy	2.413.606	8%	3.745.025	7%
North America	8.825.250	28%	11.284.178	20%
Middle East & Africa	368.524	1%	404.264	1%
Asia & Pacific	6.096.739	19%	10.587.354	19%
Total revenues	31.975.254	100%

Change	% Change
(2.632.394)	-56%
(13.362.889)	-52%
(1.331.419)	-36%
(2.458.928)	-22%
(35.740)	-9%
(4.490.616)	-42%
56.287.240100%	(24.311.986)	-43%

It should be noted that the Asian market, and China in particular, during the quarter just ended, confirmed the signs of a gradual recovery in demand made possible by the good results achieved in that area in containing the virus. The geographical area that, at Group level, has best reacted to such crisis, is in any case the North American one, thanks to the success achieved in the sale of car transducers and in the sale to end-customers through an effective network of retailers, traditional and non-traditional, which they partly offset the loss in turnover suffered by manufacturers.

Cost of sales

As a result of the significant drop in turnover, the cost of sales showed a slight worsening in its incidence on revenues in 2020 compared to the same period of 2019, going from 61.42% to 63.79%; this worsening is attributable to the contraction in sales not entirely balanced by the direct labor cost containment policies that the company has put in place, including the use of the Covid Redundancy fund.

Indirect Personnel

The cost for indirect personnel, although decreasing by 24.4% compared to 2019, increased its incidence on turnover from 6.92% to 9.20%; this is explained by the fact that, despite the use of social safety nets, the cost of labor cannot be treated as a variable cost; within the category in question, it should be also emphasized that R&D activities did not suffer any slowdown throughout the year.

Commercial Expenses

This category refers to costs for commercial consultancy, advertising and marketing expenses, travel and business trips and other minor charges relating to the commercial sector.

Commercial expenses show a sharp decrease in absolute value compared to the previous year and a consequent reduction in the impact on turnover, this contraction is also explained by the cancellation of all trade fairs scheduled during the year.

Administrative and General

General and administrative costs showed a substantial decrease of 16.77% compared to 2019, this decrease was not proportional to the decrease in turnover so the incidence of this category of costs (on revenues) reached 10.9% from 7.4% at the end of 2019.

EBITDA and EBITDA Margin

Mainly due to the dynamics illustrated above, EBITDA of 2020 was equal to Euro 5.12 million, down 59,3% compared to the same period of 2019.

The EBITDA margin therefore goes from 22.35% of revenues at the end of 2019 to 16.02% at the end of 2020.

Depreciation

Depreciation of tangible and intangible fixed assets and rights of use amounted to Euro 1.99 million (same value for the whole 2019).

EBIT

EBIT for 2020 amounts to Euro 2.89 million, another sharp decrease compared to the same period of 2019.

Group Net Profit

The Group's net profit at the end of 2020 amounts to Euro 1.92 million representing a percentage of 5.9% of consolidated revenues with an overall decrease of 77.74% compared to the corresponding period of 2019.

It should be noted that the Group's net profit is also affected by the presumed losses from the exchange of currency surpluses (bank deposits and trade receivables), which has been affected by the depreciation of the US Dollar against Euro occurred during the second half of 2020.

On the other hand, it is a positive thing to point out that the management of the securities held in the portfolio has guaranteed full recovery of the losses reported at the beginning of the year.

The 2020 financial year closed with a positive net result equal to Euro 1.65 million (the same management in 2019 guaranteed, at its full potential, a net profit of Euro 8.67 million)

The overall Net Financial Position of the Group (including the securities in portfolio held for use of liquidity) is back to an upward trend and equal to Euro 0.6 million against a (negative) value of Euro 5.01 million at the end of 2019.

The reason for this improvement was the ability of operational management to generate cash, despite the contraction in volumes.

(values in Euro thousands)

31 december 31 december

2020 (a)

2019 (a)Variazione

A. Cash

13.415 8.044 21.460

5.277 154%

• C. Securities held for trading

  7.916 2%

• D. Cash and cash equivalent (A+C)

13.194 63%

• F. Bank overdrafts

  (0) (6.904) (944)

  (314) -100%

• G. Current portion of non current borrowings

• H. Current lease liabilities

  (6.686) 3% (1.138)

• I. Current borrowingse (F+G)

  (7.848)

  (8.138) -4%

• J. Current net financial position (D+I)

  13.612

  5.056 169%

• K. Non current borrowings

• M. Non current lease liabilities

  (10.755) (2.267)

  (6.958) 55% (3.104)

• N. Non current borrowings

  (13.022)

  (10.062) 29%

• O. Total net financial position (J+N)

590

(5.006) -112%

(a) Informations extracted and / or calculated from the financial statements prepared in accordance with IFRS as adopted by the European Union.

Provided here below the Group's reclassified Income Statement for 2020 compared with the previous year: