Italian Exhibition S p A : 2023 Annual Financial Report

CONTENTS
GROUP STRUCTURE	3
CORPORATE BODIES	4
INTRODUCTION	5
GROUP PROFILE	5
DIRECTORS' REPORT ON OPERATIONS	6
FINANCIAL HIGHLIGHTS	7
CONSOLIDATED FINANCIAL STATEMENTS	40
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	41
CONSOLIDATED INCOME STATEMENT	43
COMPREHENSIVE CONSOLIDATED INCOME STATEMENT	44
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	45
CONSOLIDATED CASH FLOW STATEMENT	46
EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	47
ANNEXES	120
INDEPENDET AUDITORS' REPORT TO THE CONSOLIDATED FINANCIAL STATEMENT
...................................................................................................................................................................	129
FINANCIAL STATEMENTS	134
STATEMENT OF FINANCIAL POSITION	135
INCOME STATEMENT	137
STATEMENT OF COMPREHENSIVE INCOME	138
CASH FLOW STATEMENT	140
EXPLANATORY NOTES TO THE ANNUAL FINANCIAL STATEMENTS	127
ANNEXES	188
INDEPENDENT AUDITORS' REPORT ON THE SEPARATE FINANCIAL STATEMENTS191
BOARD OF STATUTORY AUDITORS' REPORT	193
DISCLAIMER

This document contains forward-looking statements relating to future events and operating, economic and financial results of the Group. These forecasts entail, by nature, a component of risk and uncertainty, as they depend on the occurrence of future events and developments. Actual results may deviate even significantly from those announced, depending on a variety of factors, the majority of which are beyond the Group's control.

GROUP STRUCTURE

CORPORATE BODIES

BOARD OF DIRECTORS(1)

Maurizio Renzo Ermeti	Chairman
Corrado Arturo Peraboni	Chied Executive Office
Daniela Della Rosa	Indipendent Director and Lead Indipendent Director
Gian Luca Brasini	Managing Director
Valentina Ridolfi	Indipendent Director
Andrea Pellizzari	Indipendent Director
Simona Sandrini	Indipendent Director
Alessandra Bianchi	Indipendent Directro

BOARD OF STATUTORY AUDITORS(2)

Luisa Renna	Chairwoman
Stefano Berti	Statutory Auditor
Fabio Pranzetti	Statutory Auditor
Meris Montemaggi	Alternate Auditor

CONTROL AND RISK COMMITTEE

Daniela Della Rosa	Chairwoman
Alessandra Bianchi	Full Member
Simona Sandrini	Full Member

APPOINTMENTS AND REMUNERATION COMMITTEE

Valentina Ridolfi	Chairwoman
Alessandra Bianchi	Full Member
Andrea Pellizzari	Full Member

INDIPENDENT AUDITORS(3)

PricewaterhouseCoopers S.p.A.

MANAGER RESPONSIBLE FOR PREPARING THE COMPANY'S FINANCIAL DOCUMENTS

Lucia Cicognani provisionally replacing Teresa Schiavina

1. The Board of Directors shall remain in office until the Shareholders' Meeting called to approve the financial statements for the year at 31 December 2023.
2. The Board of Statutory Auditors shall remain in office until the Shareholders' Meeting called to approve the financial statements for the year at 31 December 2025.
3. PricewaterhouseCoopers S.p.A. has been appointed to perform the statutory audit for the nine years 2019 - 2027 and shall remain in office until the Shareholders' Meeting called to approve the financial statements for the year at 31 December 2027.

4

INTRODUCTION

This annual financial report has been prepared in compliance with Article 154 ter of the Consolidated Law on Finance and is prepared in accordance with the International Accounting Standards (IAS/IFRS) adopted by the European Union.

This version has been prepared for convenience of use and does not contain the ESEF information as specified in the ESEF Technical Regulatory Standards (EU Delegated Regulation 2019/815 as amended).

The Financial Report to the consolidated financial statements as at 31 December 2023 in ESEF format, including markings, is available on the Company's website https://www.iegexpo.it/.

GROUP PROFILE

The IEG Group handles the organisation of trade fair events, the hosting of trade fairs and other events in exhibition spaces, the promotion and management of conference centres, and the provision of services related to trade fair and conference events. The Group also works in the fields of publishing and exhibition services related to hosted sports events.

The Group confirmed its position as one of the leading national and European operators in the trade fair organisation sector: in particular, it is a leader in Italy in organising international events, focussing on those targeted to the professional sector (so-called B2B events).

It organizes and manages trade fairs primarily in the following structures:

• Quartiere Fieristico di Rimini (Trade Fair District), located in via Emilia n. 155, Rimini;
• Quartiere fieristico di Vicenza (Trade Fair District), located in via dell'Oreficeria n. 16, Vicenza;
• Palacongressi di Rimini, located in via della Fiera n. 23, Rimini;
• Vicenza Convention Center, located in via dell'Oreficeria n. 16, Vicenza.

The two trade fair districts are owned by the Parent Company Italian Exhibition Group S.p.A., the Rimini convention centre is leased while the one in Vicenza is part owned and part leased, based on a gratuitous loan for use agreement expiring on 31 December 2050.

The Parent Company also operates through local units located in Milan and Arezzo.

Aside from the Rimini and Vicenza sites, the Group organises trade fairs in the trade fair districts of other operators in Italy and abroad (e.g. Rome, Milan, Arezzo, Dubai, Chengdu, Leon, São Paulo, to mention just a few) also through subsidiaries, associated and joint control companies.

Italian Exhibition Group S.p.A. is a subsidiary of Rimini Congressi S.r.l., which, in turn, drafts the consolidated financial statements. The Company is not subject to management and coordination by Rimini Congressi S.r.l. pursuant to art. 2497 et seq. of the Italian Civil Code, as none of the activities typically entailing management and coordination within the meaning of Art. 2497 et seq. of the Italian Civil Code exist.

5

DIRECTORS' REPORT ON OPERATIONS

FINANCIAL HIGHLIGHTS

The following table summarizes the main economic and financial results of the IEG Group as at 31 December 2023 and the comparison with the previous year. This Consolidated Annual Financial Report at 31 December 2023 has been prepared in compliance with Article 154 ter of the Consolidated Law on Finance and in accordance with the International Accounting Standards (IAS/IFRS) adopted by the European Union.

The amounts presented in this Report on Operations are expressed in thousands of euros; the notes commenting on them are expressed in millions of euros. The comparative figures for 2022 have been restated to reflect the final accounting of the purchase price allocation from the acquisition of V Group S.r.l. in accordance to IFRS 3, and a change in accounting policy for the classification of revenues from contribution received from ICE - the Italian Trade Agency for the promotion of Italian companies abroad and internationalization, in accordance to IAS 20, paragraph 29 and IAS 8. Details of these adjustments are provided in Annex 4.

		31/12/2023		% of		31/12/2022		% of	Variation	Var. %
			Revenues			Revenues
					Restated
Revenues		212,424		100.0%		160,445		100.0%	51,979	32.4%
Adjusted gross operating margin (EBITDA)		49,545		23.3%		18,068		11.3%	31,478	>100%
Adjusted operating income (EBIT)		31,568		14.9%		2,186		1.4%	29,382	>100%
Profit/(Loss) for the year		13,332		6.3%		(837)		-0.5%	14,169	>100%
Net Financial Position (NFP)		(71,921)				(95,354)			23,433	-24.6%

The Group closed 2023 with Revenues of 212.4 million euros, up 52.0 million euros compared to the 160.4 million euros recorded in 2022. The Group has continued to achieve record turnover thanks to the steady organic growth that has led some events to achieve their best performance ever, as well as the recovery of post-pandemic volumes, which had continued to penalize Q1 2022 with the postponement of certain events, reducing exhibition and visitor volumes.

Adjusted EBITDA amounted to 49.5 million euros, an improvement of 31.5 million euros, compared to 31 December 2022 when the Group recorded gross operating margins of 18.1 million euros, but also an increase compared to 2019, the last pre-pandemic year, which was a record year for the Group in terms of sales and margins. The EBITDA margin came to 23.3% recovering 12.1 percentage points compared to 31 December 2022, thanks to higher volumes and price effect, despite inflation pressure which continues to impact supplies, particularly those related to services, transport and materials.

Adjusted EBIT amounted to 31.6 million euros up 29.4 million euros compared to the previous year, marking the Group's best result ever, reaching 14.9% of revenues compared with 1.4% at 31 December 2022.

The group closed the year with a profit of 13.3 million, up 14.2 million euros compared to the previous year, when it made a loss of 0.8 million euros.

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DIRECTORS' REPORT ON OPERATIONS

The Net Financial Position as of 31 December 2023 amounted to 71.9 million euros, an improvement of

23.4 million euros compared to the previous year when it was 95.4 million euros thanks to steady operating cash generation.

ALTERNATIVE PERFORMANCE INDICATOR (API)

Management uses certain performance indicators that are not identified as accounting measures under IFRS (NON-GAAP measures), to enable a better assessment of the Group's performance. The determination criterion applied by the Group may not be consistent with that adopted by other Groups and the indicators may not be comparable with those determined by the latter. These performance indicators, determined in accordance with the Guidelines on Performance Indicators issued by ESMA/2015/1415 and adopted by CONSOB in communication no. 92543 of 3 December 2015, refer only to the performance of the accounting year covered by this Consolidated Annual Financial Report and the periods compared. The performance indicators should be considered as complementary and do not replace the information drafted in accordance with the IFRSs. A description of the main indicators adopted is given below.

• EBIT (Earnings Before Interest, Taxes) or Operating Income: this indicator is defined as Profit/(Loss) for the year from continuing operations before financial management and income taxes.
• Adjusted EBIT (Earnings Before Interest, Taxes) or Adjusted Operating Income: this indicator is defined as Profit/(Loss) for the year from continuing operations before financial management and income taxes and costs and revenues considered by management to be non-recurring.Please refer to annex number three of this document for the reconciliation of APIs.
• EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) or Gross Operating Margin: this indicator is defined as Profit/(Loss) for the year from continuing operations before depreciation of property, plant and equipment and amortisation of intangible assets and rights of use, financial management and income taxes.
• Adjusted EBITDA or Adjusted Gross Operating Margin: this indicator is defined as Profit/(Loss) for the year from continuing operations before depreciation and amortization of property, plant and equipment, intangible assets and usage rights, financial management, income taxes and costs and revenues considered by management to be non-recurring.Please refer to annex number three of this document for the reconciliation of APIs.
• Net Trade Working Capital: this indicator is calculated as the sum of Inventories and Trade Receivables net of Trade Payables.
• Net Working Capital: this indicator is calculated as the sum of Net Trade Working Capital and Other Current Assets and Liabilities including Current Provisions for Risks and Charges.
• Net Invested Capital: this indicator is total Current and Non-Current Assets, excluding financial assets, net of Current and Non-Current Liabilities, excluding financial liabilities.
• NFP (Net Financial Position): this indicator is calculated in accordance with the provisions of "Warning notice no. 5/21" dated 29 April 2021 issued by Consob, which refers to ESMA Guideline 32-382-1138 of 4 March 2021.
• Monetary NFP (Monetary Net Financial Position): this indicator is calculated in accordance with the provisions of "Warning notice no. 5/21" of 29 April 2021 issued by Consob, which refers to ESMA Guideline 32-382-1138 of 4 March 2021, with the exclusion of items related to leases accounted for in accordance with IFRS 16, Put Options and Derivative Financial Instruments recognised in accordance with IFRS 9.

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DIRECTORS' REPORT ON OPERATIONS

• Free Cash Flow: this indicator is calculated as cash flow from operating activities net of investments in property, plant and equipment and intangible assets (excluding fixed assets under right of use recognized during the year in accordance with IFRS 16) and financial and tax income and expenses serving operating activities.

RECLASSIFIED GROUP ECONOMIC RESULTS

The following table shows the main economic components for the year compared with the previous year:

Reclassified Consolidated Income Statement		31/12/2023		%			31/12/2022		%	Variation	Var. %
				Restated
Revenues		212,424		100.0%			160,445		100.0%	51,979	32.4%
Operating Costs		(121,627)		-57.3%			(106,515)		-66.4%	(15,112)	14.2%
Contribution Margin		90,796		42.7%			53,930		33.6%	36,866	68.4%
Labour costs		(41,539)		-19.6%			(38,102)		-23.7%	(3,437)	9.0%
Depreciation and Amortisation		(23,532)		-11.1%			(15,882)		-9.9%	(7,651)	48.2%
Non-Recurring Charges and Income		5,842		2.8%			2,239		1.4%	3,602	>100%
Adjusted Operating Income (EBIT)		31,568		14.9%			2,186		1.4%	29,382	>100%
Non-Recurring Charges and Income		(5,842)		-2.8%			(2,239)		-1.4%	(3,602)	>100%
Operating Income (EBIT)		25,726		12.1%			(54)		0.0%	25,780	>100%
Financial Management		(4,981)		-2.3%			537		0.3%	(5,517)	>100%
Earning Before Taxes		20,746		9.8%			483		0.3%	20,263	>100%
Income Taxes		(7,414)		-3.5%			(1,320)		-0.8%	(6,093)	>100%
Group result for the period		13,332		6.3%			(837)		-0.5%	14,169	>100%
Depreciation and Amortisation		(23,532)		-11.1%			(15,882)		-9.9%	(7,651)	48.2%
EBITDA		49,259		23.3%			15,828		9.9%	33,431	>100%
Non-Recurring Charges and Income		287		0.1%			2,239		1.4%	(1,952)	-87.2%
Adjusted EBITDA		49,545		23.3%			18,068		11.3%	31,478	>100%

Group Revenues as of 31 December 2023 were 212.4 million euros, up 52.0 million euros (+32.4%) compared to 31 December 2022. Organic growth as of 31 December 2023 was 35.5 million euros (+22.2% compared to the previous period), mainly driven by higher volumes and, to a lesser extent, by price adjustments.

Revenues growth from changes in the scope of consolidation in 2023 was 7.3 million euros (+4.5% on the previous year), thanks to the acquisition of My Plant & Garden and A&T in Italy, Jewellery Event (SIJE), Cafè Asia and Sweets &Bakes Asia & Restaurant Asia (CARA) in Singapore, MundoGEO and DroneShow in Brazil.

The recovery of turnover after Covid ('Restart' effect) with the scheduling of events cancelled, suspended, or reduced in the first quarter of 2022 amounted to 14.1 million euros (+8.8% on the previous year).

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DIRECTORS' REPORT ON OPERATIONS

With reference to the Group's sole operating segment namely "Hosting of trade fairs, events and performance of related services", revenues breakdown by line of business is shown below:

			31/12/2023		%		31/12/2022		%	Variation	Var. %
					Restated
Organised Events			122,093		58%		86,662		54%	35,431	41%
Hosted Events			4,525		2%		3,148		2%	1,377	44%
Congress Events			19,226		9%		14,776		9%	4,451	30%
Related Services			62,684		30%		51,976		32%	10,708	21%
Publishing, Sporting	Events, Other		3,895		2%		3,883		2%	12	1%
Activities
TOTAL REVENUES			212,424		100%		160,445		100%	51,979	31%

Revenues from Organised Events, which represented 58% of the Group's revenues in 2023, were 122.1 million euros, with an increase of 35.4 million euros compared to the previous year. The year 2023 saw the scheduling, as before the pandemic, of three of the main events organised by the Group, such as 'Sigep', 'VicenzaOro January' and 'T.Gold', and of the first edition of 'K.EY', arising from the spin-off of the energy sector from Ecomondo. The main driver of the incremental change in turnover was the organic component which was 21.8 million euros (+25.1%), while the so-called "Restart" effect of the events was 10.4 million euros, marking an increase of 12.0% compared to the previous period.

The Hosted Events recorded total revenues of 4.5 million euros, with an organic increase compared to 2022 (3.1 million euros as of 31 December 2022) of 1.4 million euros.

Revenues from Conferences were originated by the operation of Rimini Convention Centre and Vicenza Convention Centre (VICC). In 2023 a total of 126 conferences were held in the two locations, with revenues of 19.2 million euros, and an incremental growth of 4.5 million euros compared to 2022 (when the amount was 14.8 million euros), thanks to an increase in the physical presence of participants, which was restricted in 2022.

Revenue in 2023 attributable to the Related Services segment amounted to 62.7 million euros (52.0 million euros as of 31 December 2022), up 10.7 million euros compared to the previous year, driven by

10.2 million euros of organic growth, while the post-pandemic 'Restart' effect contributed about 1.4 million euros to the revenue growth for the period.

Publishing, Sports Events and Other Activities, through the publishing activities carried out for tourism sector (TTG Italia, Turismo d'Italia e HotelMag) and for the gold sector (VO+ e Trendvision), the sports events and other residual revenues, have developed total revenues for 3.9 million euros, substantially in line with the result achieved as of 31 December 2022.

Operating Costs as of 31 December 2023 amounted to 121.6 million euros (106.5 million euros as of 31 December 2022), with the percentage of turnover decreasing from 66.4% to 57.3%, as a result of higher volumes, mainly due to organic growth and partly to the so-called 'Restart' effect.

The Contribution Margin recorded in the year was equal to 90.8 million Euros, an increase of 36.9 million euros compared to the previous year (53.9 million euros) and it corresponded to 42.7% of revenues, marking an improvement compared to the previous year, when the percentage of the turnover was equal to 33.6% thanks to the recovery of volumes and prices, despite the inflationary increases in the supply costs of materials and transport and in particular on the related Services.

Labour costs as of 31 December 2023 were 41.5 million euros, with an increase of 3.4 million euros compared to the previous year when they were 38.1 million euros. The incidence of revenues improved

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