FILA Fabbrica Italiana Lapis d Affni : March 20 - CET 6.00 PM - PR F.I.L.A. Group FY 2018 Results

PRESS RELEASE

FY2018: ACQUISITION OF PACON GROUP, REORGANISATION OF FILA GROUP FOLLOWING RECENT ACQUISITIONS AND CONCLUSION OF SHARE CAPITAL

INCREASE OF EURO 100 MILLION WITH FULL SUBSCRIPTION

2018 PRO-FORMA REVENUE OF THE FILA GROUP OF EURO 678.6 MILLION AND PRO-

FORMA EBITDA OF EURO 111.4 MILLION

STRONG REVENUE, EBITDA AND ORGANIC MARGIN RECOVERY IN Q4 2018 ON SAME

PERIOD OF PREVIOUS YEAR

• •Adjusted FY2018 Core Business Revenue of Euro 602.9 million, +18.1% on previous year (adjustment effect from introduction of IFRS 15 of Euro 14.2 million). FY2018 Pro-forma revenue Euro 678.6 million;

• •Organic revenue up 0.5%, net of negative currency and M&A effects, improving on first nine months of the year with growth of 2.4% in Q4;

• •Organic growth in Asia in 2018, particularly in India, and Central-South America, respectively of 23.4% and 10.3% on the previous year, offsetting the revenue contraction in North America due to internal organisational issues, and in Europe that, in spite of the ongoing Group reorganisation, began to show signs of recovery in the fourth quarter of the year.

• •Adjusted EBITDA of Euro 96.9 million, +20.2% on Euro 80.6 million in 2017 (+1.9% organic, a substantial recovery on -5.8% contraction in the first nine months of the year, +43.2% in Q4 2018), with a margin of 16.1%. FY2018 Pro-forma EBITDA Euro 111.4 million;

• •Adjusted net profit of Euro 27.3 million compared to Euro 29.1 million for 2017, principally due to higher amortisation and depreciation and financial charges, with the latter related to the new loan granted for the acquisition of Pacon;

• •Net Debt of Euro 452.8 million (including approx. Euro 100 million for share capital increase) at December 31, 2018, compared to Euro 239.6 million at December 31, 2017. This increase is mainly due to the acquisition of Pacon for Euro 301.7 million and the impact of working capital management, in particular regarding inventories;

• •On June 7, 2018, the acquisition of Pacon Holding Company was completed, establishing therefore an important platform for development in the U.S.A.. Pacon Group 2018 revenue of USD 202.2 and Adjusted EBITDA of USD 31.4 million1, although reflected in the cash flow statement for 2018 from the acquisition date and respectively for only Euro 112.4 mln and Euro 16.9 million;

• •The independence of five directors of the company and all Statutory Auditors confirmed

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Pero, March 20, 2019- The Board of Directors of F.I.L.A. -Fabbrica Italiana Lapis ed Affini S.p.A. ("F.I.L.A."or the"company"),listed on the Milan Stock Exchange, STAR Segment, ISIN code IT0004967292, today reviewed and approved the 2018 results prepared according to IFRS.

F.I.L.A. - a Company which operates in the creativity tools market - producing design, colouring, writing and modelling objects - reports Adjusted 2018 Core Business Revenue of Euro 602.9 million, up 18.1% on 2017. Adjusted EBITDA in the year of Euro 96.9 million was up 20.2% on 2017. Adjusted Net Profit after extraordinary items and minorities of Euro 27.3 million.

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"Double-digit growth on the Asian market continued in 2018, particularly in India, and also in Central-South America" stated Massimo Candela, CEO of F.I.L.A "This growth has offset the internal issues currently being resolved in North America, while Europe saw a major organic revenue recovery in the fourth quarter. The introduction of SAP, the concentration of European warehousing at Annonay, the merger in the United States and the delayed recovery of Europe have had an impact on the timeframe to improve working capital, which has been delayed by two quarters. FILA's medium-term objectives remain clear and confirmed, with the quite complex acquisitions process launched in 2017 and the restructuring and operating system changes progressing six months behind schedule. We are not satisfied with the working capital results, although as we are fully concentrated on inventory we have sought not to further stress the operating structures, although it remains a key objective for 2019. Major fragmentation is a continued feature of the sector and FILA remains one of the leading players capable of acting as an aggregator. This is particularly the case in light of the 2018 restructuring, which has paved the way for future growth and business consolidation. I can confirm this view following the share capital increase, although with a delay in the reorganisation as the pro-forma 2018 EBITDA numbers have shown".

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1Data provided by Pacon management and not approved by F.I.L.A. Board of Directors or management, nor subject to audit or other checks by the latter.

Operating performance - F.I.L.A. GROUP

Adjusted Core Business Revenueof Euro 602.9 million was up 18.1% on the previous year (Euro 510.4 million net of the adjustment effect following the introduction of IFRS 15 of Euro 14.2 million). Organic revenue was up 0.5% in 2018 on 2017, with growth of 2.4% in the fourth quarter, net of:

• •the negative currency effect of approx. Euro 22.4 million (principally due to the weakening of the Mexican Peso, the US Dollar and the Indian Rupee).

• •the M&A effect for Euro 112.4 million with the consolidation of the Group headed by Pacon Holding Company (respectively "Pacon" and the "Pacon Group") from June 7, 2018.

Organic revenue growth was evident in Central-South America, in particular Mexico, Chile, Argentina and Brazil, +10.3% (+Euro 6.9 million), and in Asia, particularly in India, +23.4% (+Euro 14.5 million), offsetting the contraction in Europe, mainly in Italy and France, -2.7% (-Euro 5.9 million), which however recovered in the fourth quarter in the year - particularly Canson, in North America - 7.7% (-Euro 12 million) due to internal organisational problems and in the Rest of the World -19.5% (-Euro 0.9 million).

Adjusted Operating Costsin 2018 of Euro 514.7 million increased approx. Euro 66.6 million on 2017, mainly due to the M&A effect and partly offset by the weakening of the currencies of the main Group companies against the Euro. Raw material costs in addition rose in 2018 - particularly for pulp, packaging and cedar wood - alongside higher transport costs (in particular in the U.S.A.) and overhead costs (in India and Mexico relating mainly to the expanded workforce and at F.I.L.A. S.p.A. for the introduction of SAP). During the year, the benefits from the synergies created by the centralisation of inventories in Europe and from the acquisition of Pacon in the U.S.A. have not yet materialised and shall be seen from 2019.

Adjusted EBITDAwas Euro 96.9 million and grew 20.2% on 2017, while organically reporting a 1.9% increase on the previous year, with growth of 43.2% in the fourth quarter of the year, which more than offset the 5.8% contraction in the first nine months of the year which was mainly due to the unforeseen operating costs relating to inefficiencies in the integration process and the currency effect. The adjustment on 2018 EBITDA concerns extraordinary non-recurring charges of Euro 23.4 million, principally concerning consultancy for the M&A's in 2018 and reorganisation costs and only residually from the application of IFRS 15 (Euro 1.1 million);

Adjusted EBITamounted to Euro 71.6 million, up 17.7% on Euro 60.8 million in 2017 and includes amortisation, depreciation and write-downs of Euro 25.3 million, increasing Euro 5.5 million and mainly due to the higher amortisation and depreciation stemming from M&A's.

The adjustment on EBIT (totalling Euro 22.6 million), in addition to the above effects, includes the first time application in financial year 2018 of IFRS 9 for Euro 0.8 million.

Adjusted Net Financial Chargesincreased approx. Euro 10.9 million to Euro 26.7 million, substantially due to the higher financial charges on the new loan granted for the acquisition of the Pacon Group.

Adjusted Group income taxesamounted to Euro 15.7 million, increasing on 2017 by Euro 1.5 million.

Excluding the non-controlling interest result, the F.I.L.A. Group (the"Groupor the"F.I.L.A. Group") adjusted Net Profitin 2018 was Euro 27.3 million, compared to Euro 29.1 million in the previous year.

Statement of Financial Position review - F.I.L.A. Group

The Net Capital Employedof the F.I.L.A. Group at December 31, 2018 of Euro 791.6 million is principally comprised of net fixed assets of Euro 554.0 million (increasing on December 31, 2017 by Euro 252.8 million) and net working capital totalling Euro 310.6 million (increasing on December 31, 2017 by Euro 95.1 million).

Intangible Assetsrose Euro 237.8 million on December 31, 2017, substantially as a result of the change in consolidation scope. The acquisition of the Pacon Group in fact contributed to the consolidated financial statements intangible assets of Euro 163.3 million (principally concerning brands and customer lists valued according to the Purchase Price Allocation method) and goodwill generated by the transaction of Euro 70.9 million.

Property, plant and equipmentincreased on December 31, 2017 by Euro 16.1 million. This is due both to the acquisition of the Pacon Group (contribution at the consolidation date of Euro 13.9 million) and net investments made of Euro 15.5 million, principally by DOMS Industries Pvt Ltd (India), Canson SAS (France), F.I.L.A.-Dixon, S.A. de C.V. (Mexico), Pacon Corporation (U.S.A.) and F.I.L.A. S.p.A. to extend and develop production facilities and logistical offices. The movement is mainly offset by depreciation of Euro 12.8 million.

The reduction inFinancial Assetson December 31, 2017 was Euro 1.1 million and mainly related to the settlement of the derivative instruments (Interests rate swaps) undertaken by F.I.L.A. S.p.A. and the relative loan agreed in 2016 by the parent in support of corporate transactions in the year. Considering that the accounting treatment adopted was that for derivative hedging instruments (hedge accounting), the settlement of the IRS' opened for Euro 1.0 million was entirely offset by the simultaneous elimination of the equity reserve established to incorporate the fair value changes.

The increase inNet Working Capitalof Euro 95.1 million relates to the following:

• •Inventories- the increase of Euro 83.7 million mainly related to the inventory from the consolidation of the Pacon Group (contribution at the acquisition date of Euro 60.7 million). Net of the M&A effect, it concerned in particular Canson SAS (France), the US subsidiaries Dixon Ticonderoga Company and Canson Inc., F.I.L.A.-Dixon, S.A. de C.V. (Mexico), DOMS Industries Pvt Ltd (India) and F.I.L.A. S.p.A;

• •Trade and Other Receivables- increasing Euro 18.8 million due to the consolidation of the Pacon Group (contribution at the acquisition date of Euro 45 million). Net of the M&A effect, the account decreased Euro 26.2 million, mainly due to reduced revenues generated in North America and improved receipts. In addition, "Trade and Other Payables" as per IFRS 9 reduced by Euro 1.2 million;

• •Trade and Other Payables- increasing Euro 9.3 million, principally due to the M&A effect from the acquisition of the Pacon Group.

The increase in Provisionson December 31, 2017 of Euro 40.5 million is mainly due to the increase in Deferred tax liabilities for Euro 36.1 million, also mainly due to the acquisition of the Pacon Group, the increase in Provisions for Risks and Charges of Euro 2.2 million, mainly due to the accruals made by Canson Inc. (U.S.A.) concerning expected charges for the conclusion of supply contracts and the fitting out of facilities following the sale of the South Hutley (Massachusetts) production site in view of the merger and the transfer of production to Pacon Corporation (U.S.A.), in addition to Employee benefits for Euro 2.2 million, mainly concerning actuarial losses reported by the company Daler Rowney Ltd (United Kingdom).

F.I.L.A. GroupEquityof Euro 338.8 million increased Euro 99.2 million over December 31, 2017. Net of the period profit of Euro 10.5 million (of which Euro 1.7 million concerning non-controlling interests), the residual movement principally concerns the subscription to the share capital increase of F.I.L.A. S.p.A. for Euro 96 million (including Euro 4 million of charges related to the share capital increase, net of the tax effects), positive currency effects of Euro 3.4 million, the decrease of the reserves established for fair value changes to derivatives subscribed by F.I.L.A. S.p.A., Dixon Ticonderoga Company (U.S.A.) and Canson SAS (France) for Euro 6.1 million, the negative effects from application of IFRS 9 for Euro 1.2 million and the distribution of dividends to non-controlling interests for Euro 4.1 million.

At December 31, 2018,the Group Net Debttotalled Euro 452.8 million, increasing Euro 213.2 million on December 31, 2017.

This increase principally concerns:

• •Operating Cash Flow before Net Working Capital changes of Euro 62.2 million;

• •the negative net cash effect of Euro 11.6 million concerning working capital movements and mainly due to the increase both of "Inventories" and of "Trade and Other Payables", in part offset by the reduction in "Trade and Other Receivables";

• •net investments in "Tangible and Intangible Assets" for Euro 23.4 million; principally by DOMS Industries Pvt Ltd (India), Canson SAS (France), Pacon Corporation (U.S.A.), F.I.L.A.-Dixon, S.A. de C.V. (Mexico) and F.I.L.A. S.p.A.;

• •cash flows generated from the subscription to the share capital increase of F.I.L.A. S.p.A. for Euro 100 million and of warrants by Pacon's management for Euro 1.8 million;

• •the distribution of dividends to shareholders of F.I.L.A. S.p.A. and Group minorities for Euro 4.1 million;