Pininfarina S p A : GROUP – INTERIM FINANCIAL REPORT AT 30 JUNE 2023

PRESS RELEASE

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

PININFARINA GROUP INTERIM FINANCIAL REPORT

GOING CONCERN ISSUES AND OUTLOOK FOR 2023

Cambiano, 1 August 2023 - The Board of Directors of Pininfarina S.p.A. met today and approved the Group's interim financial report for the first six months of 2023.

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Key Financial Figures

PININFARINA GROUP

(€'million)	30 06 2023	30 06 2022	31 12 2022	Variation*
TOTAL REVENUE	37.1	34.8		2.2
GROSS OPERATING PROFIT (LOSS)	(0.9)	1.7		(2.6)
OPERATING LOSS	(2.7)	(0.4)		(2.3)
LOSS FOR THE PERIOD	(3.7)	(1.3)		(2.4)
NET FINANCIAL POSITION (DEBT)	(3.8)	4.4	1.3	(5.1)
EQUITY	31.9	39.4	35.7	(3.8)

* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2022.

The gross operating profit or loss (EBITDA) is the operating profit or loss (EBIT) gross of amortisation, depreciation, provisions, impairment losses, reversals of impairment losses and utilisation of provisions.

PARENT

(€'million)	30 06 2023	30 06 2022	31 12 2022	Variation*
TOTAL REVENUE	26.2	21.7		4.5
GROSS OPERATING PROFIT	0.02	1		(1.03)
OPERATING LOSS	(1.2)	(0.4)		(0.8)
LOSS FOR THE PERIOD	(1.8)	(1.1)		(0.7)
NET FINANCIAL POSITION	(2.9)	5.2	2.5	(5.4)
EQUITY	43.9	50.6	45.8	(1.8)

* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2022.

The gross operating profit or loss (EBITDA) is the operating profit or loss (EBIT) gross of amortisation, depreciation, provisions, impairment losses, reversals of impairment losses and utilisation of provisions.

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Comment on results

In the first half of 2023 the Pininfarina Group recorded an overall growth in total revenue of approximately 6.6% compared to the same period of the previous year, confirming the positive dynamics of the reference markets, but also showing a deterioration in margins, which affected all companies in the group except the American subsidiary.

Despite total revenue increased by roughly 20.9% over the first half of 2022, Pininfarina S.pA. showed a sharp deterioration in operating result compared to the same period last year, mainly due to the increase in specific costs related to productive projects.

Pininfarina of America showed an increase in total revenue of approximately 26.8% compared with the same period last year, with a consequent improvement in the operating result.

Pininfarina Shanghai, despite the intensification of commercial initiatives, continued to be affected by the difficult conditions of the reference market, as shown by the fall in total revenue of approximately 56% compared with the same period of the previous year and an operating result still negative of €0.9 million (compared with an operating loss of €0.3 million in the same period of the previous year).

Pininfarina Deutschland, mainly as a result of the postponement of some projects, recorded total revenue of €6.6 million, a decrease of approximately €0.9 million compared to the corresponding period of the previous year and an operating loss of €1.8 million (compared to the operating loss of €0.6 million in the first half of 2022).

Pininfarina Engineering S.r.l. in liquidation, which has been inactive since the last quarter of 2020 and without employees, is awaiting completion of the winding up procedure.

The Group did not have to interrupt or restrict any of its activities during the period as a result of the Covid-19 pandemic.

The Pininfarina Group was not particularly affected by the Russia-Ukraine conflict, which dominated the current geopolitical scene, during the period.

With respect to the macroeconomic scenario and the impact of the significant rise in prices of energy and commodities, the parent's energy spending skyrocketed by about 180% compared to the same period of the previous year, when it still benefited from its two-year contracts at fixed rates. The Group has prudently considered these negative effects in its estimates for 2023.

The Group's cash and cash equivalents of €16.3 million decreased by €6.5 million during the period, as a result of working capital trends.

The non-current bank loans and borrowings increased by €522 thousand, due to the parent's unrealised interest expense arising from amortised-cost accounting. The Group's current financial liabilities include bank advances of €0.8 million relating to the German subsidiary's factoring agreements.

The parent has continued to meet its obligations, without undue distress, including those under the debt rescheduling agreement (2016-2025) with certain banks. Such agreement, which came into force on 30 May 2016, provides for just one financial covenant (consolidated equity at a minimum of €30 million), compliance with which is assessed at 31 March each year up until repayment of the loan. At 31 March 2023, the covenant had been complied with. Should the minimum equity threshold not be complied with, the agreement would not be automatically terminated, as it provides for specific remedies which can be implemented in the six months after the date of non-compliance, and the lending banks can also waive their right to take action. The Mahindra Group has provided a surety that is enforceable if the parent fails to meet its obligations under the rescheduling agreement.

Neither the parent, Pininfarina S.p.A., nor its subsidiary Pininfarina Engineering S.r.l. in liquidation availed themselves of the loans provided for by the measures approved by the Italian government

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to support companies or granted by banks. No measures in favour of other group companies were reported.

Support and relief measures

In accordance with ESMA recommendations (Public Statement 32-63-972 of 20 May 2020 and reiterated in Public Statement 32-63-1186 of 29 October 2021), it is noted that the Group did not enjoy any support or relief measures in the first half of 2023.

Pininfarina Group's financial performance and financial position

Revenue from sales and services, including the change in contract assets and royalties, amounted to €36.8 million, up by €2.2 million on the same period of the previous year (€34.6 million). Other revenue and income of €0.3 million up by €0.1 million over the corresponding period of 2022.

Total revenue increased by 6.6% to €37.1 million from €34.8 million for H1 2022. The engineeering segment contributed to the increase, while the design segment is in line with the previous year.

Operating expense, including changes in inventories, came to €18.7 million (€14.3 million in H1 2022).

Value added decreased to €18.4 million compared to €20.5 million for the same period of the previous year.

Personnel expense amounted to €19.3 million (€18.8 million in H1 2022). The workforce numbered 455 at the reporting date (30 June 2022: 458).

The gross operating loss of €0.9 million (operating profit of €1.7 million in H1 2022) is the result of Pininfarina of America's and the parent's good performance, offset by the operating losses reported by the Chinese and German group companies.

Amortisation and depreciation amounted to €1.8 million, substantially in line with the corresponding period of the previous year.

Additions to/decreases in provisions and impairment losses and gains came to a negative €0.03 million (negative €0.1 million for H1 2022).

As a result, the Group recognised an operating loss of €2.7 million (€0.4 million in H1 2022).

Net financial expense at €0.7 million is substantially unchanged compared to the corresponding period of the previous year.

Income taxes of €0.3 million, up by €0.1 million on the same period of the previous year, relate to Pininfarina of America.

Therefore, the Group recorded a loss for the period of €3.7 million compared to a loss of €1.3 million for the corresponding period of the previous year.

Going concern issues

In approving the Interim financial report at 30 June 2023, the Board of Directors made the necessary assessments regarding the existence of the going concern assumption and, although there is significant uncertainty related to the revenue and improved profitability goals, dependent on stable recovery of the markets in which the Group and the parent operate over the next few months, especially the German and Chinese markets, as well as on the evolution of the costs to win future contracts and procurement costs to enable the achievement of positive margins that are also essential for maintaining the Group's equity requirements under the Rescheduling Agreement, has deemed it correct to prepare the report on a going concern basis.

The Company will carry out constant monitoring of the evolution of the factors taken into consideration, so as to be able to make the most appropriate corrective determinations, should the prerequisites be met.

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Information required by Consob (the Italian Commission for listed companies and the stock exchange) pursuant to article 114.5 of Legislative decree no. 58/98

• The net financial position of the Pininfarina Group and Pininfarina S.p.A., with separate classification of current and non-current items, are attached hereto.
• The parent has no past-due liabilities, while the subsidiaries Pininfarina Deutschland GmbH and Pininfarina Shanghai have past-due trade receivables of €0.9 million (including €0.6 million due to the Tech Mahindra Group) and €0.5 million, respectively, which did not give rise to payment orders, disputes, legal proceedings or suspension of supplies.
• The Group's and parent's related party transactions are attached hereto. The related party transactions are substantially unchanged from those reported in the separate and consolidated financial statements at 31 December 2022. Revenue from related party transactions accounted for 6.7% of the Group's total revenue for the first half of 2023, compared to 4.8% for 2022.
• As discussed above, under the existing Rescheduling Agreement between the parent and the banks, there is just one financial covenant, to be checked annually beginning from 31 March 2018: consolidated equity at a minimum level of €30 million. At 31 March 2023, it has been complied with. The Group has no further loans and borrowings carrying clauses that limit its use of financial resources.
• On 23 March 2023, when the shareholders approved the draft 2021 annual report, Pininfarina S.p.A. announced that its outlook for 2022 was an increase in total revenue compared to 2022. Other than the above, the parent had not disclosed any other financial forecasts for 2023.

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Significant events after the reporting date

Pininfarina Engineering S.r.l. in liquidation filed, on 10 July 2023, an appeal in opposition without payment to the debit notice notified for the alleged violations of contribution obligations by the subsidiary Pininfarina Engineering S.r.l. in liquidation for €927,459 (€807,200 plus penalties and interest on arrears), already described in the paragraph of the Notes "Contingent Liabilities and Litigation".

On 11 July 2023, the Court granted the request filed by Pininfarina Engineering S.r.l. in liquidation to suspend the debit notice and therefore suspended its enforceability, setting the hearing for the discussion of the case on 14 November 2023.

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Outlook for 2023

Based on the current situation of the business sectors in which the Pininfarina Group operates, its outlook for 2023 is an increase in total revenue compared to 2022.

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Pursuant to article 154-bis.2 of the Consolidated Finance Act, the manager in charge of financial reporting, Roberta Miniotti, states that the financial disclosures provided in this press release are consistent with the relevant documentation, ledgers and accounting records.

Contacts:

Pininfarina:

Francesco Fiordelisi, Investor Relations & Corporate communication, Phone [phone], [e-mail]

Carolina Mailander Comunicazione:

Carolina Mailander, [e-mail]

Stella Casazza, Phone [phone], [e-mail]

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RECLASSIFIED FINANCIAL STATEMENTS (*)

1. The reclassified financial statements group the figures presented in the legally-required statements to improve their understanding, without however changing their presentation logic.

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