F I L A Fabbrica Italiana Lapis ed Affini S p A : .I.L.A. S.p.A. Interim inancial Report at September 30 2023

Interim Financial Report

September 30, 2023

(Translation from the Italian original which remains the definitive version)

F.I.L.A. GROUP

INTERIM FINANCIAL REPORT

AT SEPTEMBER 30, 2023

F.I.L.A. - Fabbrica Italiana Lapis ed Affini S.p.A.

Via XXV Aprile 5 Pero (MI)

Interim Financial Report

September 30, 2023

CONTENTS
I - Interim Directors' Report	3
Corporate Bodies	3
Overview of the F.I.L.A. Group	4
Key events of the reporting period	6
Key Financial Highlights	10
F.I.L.A. Group's Financial Highlights	15
Adjusted financial performance	15
Business seasonality	17
Statement of Financial Position	18
Financial overview	21
Segment reporting	26
Business Segments - Statement of financial position	27
Business Segments - Statement of comprehensive income	28
Business Segments - Other Information	29
Subsequent events	30
Outlook	30
Treasury shares	30
Basis of preparation and accounting standards	32
II - Consolidated Financial Statements of the F.I.L.A. Group at September 30, 2023	33
Interim Consolidated Financial Statements	33
Statement of Financial Position	33
Statement of Comprehensive Income	33
Statement of changes in Equity	35
Consolidated Statement of Cash Flows	36
Attachments	38
Attachment 1 - List of companies included in the consolidation scope and other equity investments	38
Transactions relating to Atypical and/or Unusual Operations	39
Statement of the Manager in Charge - Interim Financial Report	40

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Interim Financial Report

September 30, 2023

DIRECTORS' REPORT

AT SEPTEMBER 30, 2023

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I - Interim Directors' Report

Corporate Bodies

Board of Directors
Chairperson (*)	Giovanni Gorno Tempini
Honorary Chairperson	Alberto Candela
Chief Executive Officer (**)	Massimo Candela
Executive Director (**)	Luca Pelosin
Non-executive Director	Annalisa Matilde Barbera
Non-executive Director (*)	Giorgina Gallo
Non-executive Director (*)	Carlo Paris
Non-executive Director (*)	Donatella Sciuto

1. Independent director in accordance with Article 148 of the Consolidated Finance Act and Article 3 of the Code of Conduct. (**) Executive Director

Control, Risks and Related Parties Committee

Donatella Sciuto

Annalisa Matilde Barbera

Carlo Paris

Remuneration Committee

	Carlo Paris
	Annalisa Matilde Barbera
	Giorgina Gallo
Board of Statutory Auditors
Chairperson	Gianfranco Consorti
Standing Auditor	Sonia Ferrero
Standing Auditor	Pietro Michele Villa
Alternate Auditor	Stefano Amoroso
Alternate Auditor	Gianna Luzzati
Independent Auditors	KPMG S.p.A.

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Overview of the F.I.L.A. Group

The F.I.L.A. Group (hereafter also the "Group") operates in the creativity tools market, producing and marketing colouring, design, modelling, writing and painting objects, such as pencils, crayons, modelling clay, chalk, oil colours, acrylics, watercolours, paints and paper for the fine arts, school and leisure.

The F.I.L.A. Group at September 30, 2023 operates through 25 production facilities and 33 subsidiaries across the globe and employs approx. 11,700 people, becoming a pinnacle for creative solutions in many countries with brands such as GIOTTO, DAS, LYRA, Canson, Maimeri, Daler- Rowney Lukas, Ticonderoga, Pacon, Strathmore, Princeton and Arches.

Founded in Florence in 1920 by two noble Tuscan families, della Gherardesca and Marchesi Antinori, F.I.L.A. S.p.A. (hereafter also the "Parent") has achieved strong international growth in the past 20 years, supported by a series of strategic acquisitions. Over the years, the Parent has acquired: (i) the Italian firm Adica Pongo in 1994, a leading producer of modelling clay for children; (ii) the Spanish firm Spanish Fila Hispania S.L. (formerly Papeleria Mediterranea S.L.) in 1997, the Group's former exclusive distributor in Spain; (iii) the French firm Omyacolor S.A. in 2000, a leading manufacturer of modelling putties and clays; (iv) the U.S. Dixon Ticonderoga Group in 2005, a leading producer and distributor of pencils in North America, with subsidiaries operating on the Canadian, Mexican, Chinese and European markets; (v) the German LYRA Group in 2008, which allowed the Group to enter the German, Scandinavian and Eastern Asian markets; (vi) the business unit operated by Lapiceria Mexicana in 2010, one of the main local competitors in the budget coloured and graphite pencils market; and (vii) the business unit operated by Maimeri S.p.A. in 2014, a manufacturer and distributor of paints and accessories for fine arts. In addition to these operations, on the conclusion of an initiative which began with the acquisition of a significant influence in 2011, control of the Indian company DOMS Industries Pvt Ltd. was acquired in 2015 (viii). In 2016, the F.I.L.A. Group focused upon development through strategic Art&Craft sector acquisitions, seeking to become the leading market player. On February 3, 2016, F.I.L.A. S.p.A. acquired control of the Daler-Rowney Lukas Group, an illustrious brand producing and distributing materials and accessories on the arts and crafts market since 1783, with a direct presence in the United Kingdom, the Dominican Republic, Germany and the USA (ix). In September 2016, the F.I.L.A. Group acquired the entire share capital of St. Cuthberts Holding Limited and the operating company St. Cuthberts Mill Limited, a highly-renowned English paper mill, founded in 1907, located in the south-west of England and involved in the production of high quality artist's papers (x). In October 2016, F.I.L.A. S.p.A. acquired the Canson

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Group, founded in 1557 by the Montgolfier family, with headquarters in Annonay in France, production facilities in France and conversion and distribution centres in Italy, France, China, Australia and Brazil. Canson products are available in over 120 countries and the brand is the most respected globally involved in the production and distribution of high added value paper for the fine arts, design, leisure and schools, but also for artists' editions and technical and digital drawing materials (xi).

In June 2018, F.I.L.A. S.p.A., through its US subsidiary Dixon Ticonderoga Co. (U.S.A.), consolidated its role as a leading player on the US market with the acquisition of the US Group Pacon, which through brands such as Pacon, Riverside, Strathmore and Princeton, is a leader in the US schools and arts and crafts sector. Dixon Ticonderoga Co. (U.S.A.) was subsequently merged into Pacon Corporation (U.S.A.), which later changed its name to Dixon Ticonderoga Co. (U.S.A.) (xii). On March 2, 2020, F.I.L.A.- Arches S.A.S., a French company wholly-owned by F.I.L.A. S.p.A., completed the purchase from the Ahlstrom-Munksjö Group of the fine art business unit specialised in fine art operating through the ARCHES® brand (xiii).

On February 8, 2022, the UK subsidiary Daler Rowney Ltd. acquired 100% of the UK company Creative Art Products Limited, located in Manchester (UK), which specialises in the schools segment and produces and distributes a wide range of art materials for children, both under the Scola brand and private label brands (xiv).

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Key events of the reporting period

On February 21, 2023, the Indian subsidiary DOMS Industries Limited acquired 30% of the toy manufacturer and associated company Clapjoy Innovation Private Limited, for a total value of INR 15,013 thousand (Euro 168 thousand). The Indian subsidiary expects that, with this acquisition, it may repeat its success in the stationery business and become a major player in the toy industry by leveraging the synergies between the two companies;

On March 28, 2023, the Indian subsidiary DOMS Industries Limited divested at cost value its holdings in the associated companies Uniwrite Pens and Plastics Pvt Ltd, Fixy Adhesives Private Limited and Inxon Pens & Stationary Private;

On May 24, 2023, 10% of the investment held by the parent F.I.L.A. S.p.A. in the Turkish subsidiary FILA Stationary and Office Equipment Industry Ltd. Co. was transferred free of charge to the latter's current managing director;

On July 20, 2023, the Board of Directors of the Indian subsidiary, DOMS Industries Limited, approved the launch of its listing process. This will be conducted through an initial public offering of newly issued ordinary shares with a total value of approximately INR 350 crore (approximately Euro 39 million) and an offer for sale of ordinary shares for certain existing shareholders, in accordance with applicable Indian regulations.

The Parent F.I.L.A. S.p.A. on July 21, 2023, as the current controlling shareholder of the Indian company, approved participation in the transaction as a promoter by bringing a number of ordinary shares of DOMS Industries Limited totalling approximately INR 800 crore (corresponding to approximately Euro 90 million) for sale at the closing of the transaction, remaining the largest single shareholder of the company post-IPO.

The listing transaction is currently expected to close, subject to suitable market conditions and the receipt of the necessary approvals, by the end of 2023.

On August 1, 2023 , the Indian subsidiary DOMS Industries Limited acquired 75% of the associated company Micro Wood Private Limited, for a total value of INR 705,600 thousand (Euro 8,017 thousand). The company acquired is engaged in the production of packaging material and the manufactured products are sold principally to the parent;

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In the period between August 7, 2023 and September 26, 2023, the Parent F.I.L.A. S.p.A. purchased treasury shares on the regulated Euronext Milan market for 143,875 ordinary shares of F.I.L.A. S.p.A. for a total value of Euro 1,172 thousand. These transactions were carried out as part of the share buyback program, whose first tranche was approved by the Company's Board of Directors on August 3, 2023, and as per the authorisation of the Shareholders' Meeting of April 21, 2023.

Details, on a daily basis, of ordinary share purchases are provided below:

Date	Number of ordinary shares	Average price (Euro)	Amount (Euro)
purchased
07/08/2023	1,200	8.32	9,980
08/08/2023	3,500	8.18	28,619
09/08/2023	2,000	8.17	16,349
10/08/2023	3,000	8.13	24,378
11/08/2023	3,500	8.02	28,054
16/08/2023	1,500	8.11	12,165
17/08/2023	10,000	8.08	80,835
18/08/2023	4,758	8.02	38,165
21/08/2023	3,000	8.09	24,269
22/08/2023	3,000	8.03	24,087
25/08/2023	2,607	8.37	21,812
28/08/2023	2,210	8.22	18,175
29/08/2023	1,500	8.26	12,393
30/08/2023	1,000	8.34	8,342
31/08/2023	1,000	8.45	8,450
01/09/2023	12,500	8.3	103,750
04/09/2023	12,000	8.32	99,832
05/09/2023	13,508	8.33	112,556
06/09/2023	11,530	8.2	94,528
07/09/2023	10,000	8.11	81,125
08/09/2023	16,500	8.15	134,395
11/09/2023	11,542	8.18	94,384
21/09/2023	4,000	7.74	30,962
22/09/2023	2,500	7.68	19,199
25/09/2023	5,300	7.51	39,782
26/09/2023	720	7.38	5,313
Total	143,875		1,171,899

Prior to the launch of the Program, the company held 186,891 ordinary treasury shares.

On September 30, 2023, the Group held 330,766 treasury shares, for a total value of Euro 2,966 thousand (equal to the "Negative reserve for treasury shares in portfolio" deducted from consolidated equity);

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On September 26, 2023, the liquidation (begun in January 2022) concluded of the Italian subsidiary Canson Italy S.r.l.;

Activities are underway to conclude the 65% sale of the holding of the parent F.I.L.A. S.p.A. in the Russian subsidiary Fila Stationary O.O.O., to the current managing director of the latter.

Impacts of events related to the conflict in Ukraine

On February 24, 2022, Russia launched a military operation in the east of Ukraine, resulting in the current conflict.

The geo-political tensions involving Russia and Ukraine have prompted a major international humanitarian and social crisis, with significant impacts primarily for their populations, but also for internal economic activities and commercial trade in the area. These extraordinary events in terms of their nature and extent have prompted global repercussions on: i) supply chains, particularly with regard to raw material and energy supply and prices; ii) international market demand levels; iii) inflation and the consequent restrictive interest rate policies; iv) the strengthening of the dollar as a haven from risk and rising interest rates.

The operating and financial impacts of the conflict between Russia and Ukraine on the F.I.L.A. Group and on its Russian commercial subsidiary Fila Stationary O.O.O. are not considered significant, also in view of the fact that the revenue of the subsidiary accounts for approx. 0.1% of the Group's total. The F.I.L.A. Group does not have suppliers or production plant in the area. The Russian subsidiary has a net commercial exposure to third parties at September 30, 2023 of Euro 323 thousand, which takes into account the impairment made by the Group on the basis of assessments upon their recoverability. Group management continues to monitor the recoverability of the net exposure to third parties of the Russian subsidiary.

In light of these serious events, the Group is in addition monitoring the short-term situation so as to be ready to offset the impacts of all future decisions upon the presence in Russia. There are no F.I.L.A. Group companies in Ukraine at September 30, 2023.

At Group level, the effects and the criticalities generated by the inflation of raw and ancillary materials for production continue to be monitored, assessing the possibility of identifying alternative procurement sources where needed or undertaking adequate compensatory measures.

With reference to the valuations made for the purposes of the financial statements (recoverability of intangible assets, recoverability of deferred tax assets, fair value of financial

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instruments, liabilities for employee defined benefits etc.), the Directors consider that, given the information currently available, these factors of uncertainty are already included in the main sensitivity analyses provided with reference to the main financial statement captions subject to estimates. With particular reference to the uncertainties related to the developing conflict, it may not be excluded however that, should the crisis extend at an international level, the general economic consequences and specific consequences for the Group could be more severe than that envisaged at present, requiring a new estimate to be made, with a negative impact on the financial statement captions subject to estimate and in terms of the scenarios considered for the sensitivity analysis at September 30, 2023.

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