Pininfarina S p A : GROUP – INTERIM FINANCIAL REPORT AT 30 SEPTEMBER 2021

PRESS RELEASE

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

Pininfarina Group Interim Financial Report

Reference markets and Coronavirus

Information required by Consob pursuant to art. 114.5 of Legislative decree no. 58/98

Going concern issues and Outlook for 2021

Cambiano, 12 November 2021 - The Board of Directors of Pininfarina S.p.A., chaired by Paolo Pininfarina, met today and approved the Group's interim financial report at 30 September 2021. The key financial figures of the Pininfarina Group as at 30 September 2021 and the relevant comparative figures 2020 are as follows:

(€/million)	Q3 2021	Q3 2020	2020	Variation*
Revenue	49.0	49.4		-0.4
Ebitda	2.5	-6.2		8.7
Ebit	-0.6	-9.1		8.5
Loss for the period	-1.8	-10.8		9.0
Net Financial position (debt)	6.8	-16.8	2.4	4.4
Equity	35.9	28	34.2	1.7

* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2020.

EBITDA is the operating profit or loss gross of amortisation, depreciation and provisions. EBIT is the operating profit or loss.

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

Reference markets and Coronavirus

The conditions of the Pininfarina Group's reference market for the first nine months of 2021 were better than those of the corresponding period of 2020.

All the group companies grew their design activities leading to a generalised upturn in profit margins while the volume of engineering operations in Germany is aligned with that of the corresponding period of 2020, with a considerable decrease in operating loss.

The Group discontinued its engineering business in Italy, which was operated by Pininfarina Engineering S.r.l., as a result of the decision of 26 October 2020 to wind up the subsidiary.

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

Pininfarina Group's financial performance and financial position

The Group recognised revenue of €49 million for the period, substantially unchanged from the corresponding period of 2020 (€ 49.4 million). The contribution of its business segments in the comparison between the two periods was different, in fact, while the engineering segment show a decline of about 30%, the design segment increased by about 16%. Following the decision of 26 October 2020 to wind up Pininfarina Engineering S.r.l., the Group's revenue at 30 September 2021 does not include its contribution unlike in the corresponding period of 2020.

The gross operating loss of €6.2 million for the Q3 of 2020 improved to gross operating profit of €2.5 million in Q3 2021. This considerable improvement is the result of the operating profitability achieved in the design segment, in addition to the large reduction in the loss compared to that induced in 2020 by the engineering segment, which is mostly due to discontinuance of the complete car development services previously offered by Pininfarina Engineering S.r.l. in liquidation.

D I R E Z I O N E C O M U N I C A Z I O N E E I M M A G I N E - W W W . P I N I N F A R I N A . C O M - I N F O @ P I N I N F A R I N A . C O M

PRESS RELEASE

The improvement to gross operating profit has positively affected the operating loss for the period, which went from €9.1 million in Q3 of 2020 to €0.6 million.

Net financial expense at the reporting date amounts to €1 million, an improvement of approximately €0.4 million compared to Q3 of the 2020 mainly due to an income recognised by Pininfarina of America and the decrease in financial expense related to debt with banks. In particular, as part of the measures introduced by the US government to counter the negative effects of the spread of Covid-19, the US subsidiary applied for and obtained authorisation not to repay the loan obtained from a government body (value of the contingent assets of approximately €0.2 million).

The income tax expense for the period is €0.2 million compared to €0.3 million for the corresponding period of 2020.

As a result of the above, the Group recorded a loss for the period of €1.8 million compared to a loss of €10.8 million for the same period of the previous year.

The group's equity amounts to €35.9 million at the reporting date, up by €1.7 million on 31 December 2020, principally due to the capital increase (net of the transaction costs) and the loss for the period.

The net financial position was €6.8 million at the reporting date, compared to €2.4 million at 31 December 2020, also this improvement is largely due to the parent's capital increase.

The workforce decreased by 168 units to 515 at the reporting date (30 September 2020: 683; -25%). The decrease is mainly due to the restructuring that affected Pininfarina Engineering S.r.l. in liquidation and Pininfarina Deutschland GmbH.

Cash flows

The Group's cash and cash equivalents (€32.5 million) increased by €4 million compared to 31 December 2020, mostly due to the contribution from the parent's capital increase completed on 25 June 2021.

The Group paid off all its bank overdrafts.Its non-current bank loans and borrowings increased by €0.8 million, mostly due to the parent's unrealised interest expense arising from amortised-cost accounting.

Pininfarina S.p.A.'s financial debt

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 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 2021, 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 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.

Support and relief measures

In accordance with ESMA recommendations (Public Statement 32-63-972 of 20 May 2020), the support and relief measures already enjoyed in the first nine months of 2021 or that will be enjoyed by the Group are summarised below:

• in Italy, the Covid-19-government-sponsoredlay-off scheme for 70 employees for a total of 22,741 hours;
• in Germany, the government-sponsoredlay-off scheme (Kurzarbeit) for 60 workers for a total of 21,897 hours;
• in 2020, in the US, the subsidiary Pininfarina of America Corp. received a loan of approximately €0.2 million, bearing interest at 1% p.a. and repayable in 18 monthly instalments starting from January 2021.

On 23 April 2021, the subsidiary was notified of the Small Business Administration's acceptance of its application for the non-repayment of the loan as part of the measures for helping businesses to overcome the negative effects of the spread of the coronavirus.

D I R E Z I O N E C O M U N I C A Z I O N E E I M M A G I N E - W W W . P I N I N F A R I N A . C O M - I N F O @ P I N I N F A R I N A . C O M

PRESS RELEASE

The Group plans to continue to use the social shock absorbers made available by governments in Italy and Germany.

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

1. 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;
2. The Group has no past-due liabilities (of a commercial, financial, tax or social security nature). No actions against the Group have been filed by creditors;
3. The Group's and parent's related party transactions are attached hereto. Except for a major trading transaction (supply of design and engineering services) between the parent and its associate Automobili Pininfarina GmbH whose activities continued during the quarter, the related party transactions are substantially unchanged from those reported in the separate and consolidated interim financial report at 30 June 2021.
   Revenue from related party transactions accounted for 6.7% of the Group's total revenue for the first nine months of 2021, compared to 7.1% for the first half of 2021;
4. 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 2021, it had been complied with. The Group has no further loans and borrowings carrying clauses that limit its use of financial resources;
5. On 12 May 2021, when the Board of Directors approved the Interim financial report at 31 March 2021, Pininfarina S.p.A. announced that its outlook for 2021 was revenue in line with 2020, along with an operating loss and a loss for the year, albeit better that those of 2020. On the basis of the consolidated figures for the Q3 2021, these expectations are confirmed. Other than the above, the parent has not disclosed any other financial forecasts.

Going concern issues in the light of the Covid-19 pandemic

The Group has not been affected by downturns in activities and/or cancellations of orders due to the coronavirus during the first nine months of 2021. The outlook for the entire year - which also considers the poor performance of the reference markets seen in 2020 - does not currently incorporate worsening impacts caused by Covid-19. However it is impossible to predict the future development of the pandemic and its additional economic and financial backlash in the coming months.

In their comments on the 2020 figures, the directors had explained that the sluggish conditions of the Group's reference markets were due to two factors: the continuation of the negative economic cycle of the global automotive industry and the Covid-19 pandemic, which put additional constraints on commercial projects, slowing down the acquisition of new contracts and/or reducing expected contract profit margins.

In this environment of weak reference markets and given the expectations about their future performance, the parent is tackling three closely related issues:

• maintaining an appropriate level of liquidity for the Group's requirements;
• protecting the capitalisation level required by the law and bank agreements;
• creating the conditions for restoring profitability as soon as possible.

In order to strengthen the parent's liquidity and capitalisation, on 25 June 2021 the parent concluded the capital increase resolved by the shareholders on 16 March 2021. Moreover, the subsidiary Pininfarina Deutschland Holding GmbH collected, in the first quarter of 2021, the considerable amount of roughly €4.1 million, as the consideration for the sale of one of its buildings and the positive trend of the working capital. According to the current figures, the directors deem that the parent's and Group's financial resources at the reporting date are adequate to cover the expected operating cash outflows for the next 12 months.

D I R E Z I O N E C O M U N I C A Z I O N E E I M M A G I N E - W W W . P I N I N F A R I N A . C O M - I N F O @ P I N I N F A R I N A . C O M

PRESS RELEASE

The parent must monitor its equity at consolidation level closely, not only in order to comply with the requirements of the Italian Civil Code governing share capital protection. Indeed, the only financial covenant provided for by the existing debt restructuring agreement is a minimum level of €30 million of consolidated equity, compliance with which is assessed at 31 March each year (at 31 March 2021, the covenant had been complied with). The Mahindra Group has provided a surety that is enforceable if the parent fails to meet its obligations under the rescheduling agreement.

The recent conclusion of the share capital increase in order to strengthen the financial position has already been discussed.

In order to tackle their performance issues and return to a profit-making position, considering the market performance of the last two years and currently foreseeable outlook, the parent and the Group adopted various measures in 2020, including winding up of the subsidiary Pininfarina Engineering S.r.l., given the market conditions and its no longer sustainable performance; implementation of a redundancy plan for Pininfarina Deutschland GmbH, involving 46 people (approximately 20% of its workforce); reduction of the number of direct and indirect staff working at Pininfarina S.p.A. in 2020 and in 2021, in order to bring the professional skills and number of resources into line with the current market requirements and a plan to reduce operating expense and overheads, also by increasing resort to outsourcing in some cases.

With reference to the winding up of the subsidiary Pininfarina Engineering S.r.l., the related restructuring provision accrued at 31 December 2020 was recognised to fully cover the obligations reasonably expected at that date on the basis of the collective trade union agreements, the legal requirements, the individual agreements and, given the usual outcome of these procedures, the possible refusal to participate in the plan envisaged by the collective agreements by employees who oppose the agreement. The winding up procedure continued throughout the first nine months of 2021 and part of the workforce covered by the restructuring plan left in line with the programme substantially set out when the provision was accrued. However, as the procedure has not been completed, the related risks are still applicable and the Group maintained the outstanding balance of the restructuring provision at 30 September 2021.

At 30 September 2021, all the individual agreements with the redundant 46 workers at Pininfarina Deutschland GmbH envisaged in its restructuring plan have been signed. They cover the workers' termination benefits as provided for in the restructuring plan at 31 December 2020.

Operating profit margins improved considerably in the first nine months of 2021 compared to the same period of the previous year, confirming the soundness of the actions taken in this respect in the previous year. Business opportunities and prices offered were stable during the period, in line with the directors' forecasts for 2021.

As described in the 2020 Annual Report, the market situation of that year, which reflected social difficulties that are well known throughout the world, was one of the most difficult in recent decades, particularly in the market sectors in which the Pininfarina Group operates. The demand for services continues to exist for design- related activities albeit much less so for pure engineering based on technical deliverables and the downwards pressure on prices seen in 2020 was eased.

In order to deal with this situation the parent and the group, through the above listed countermeasures, is rapidly redirecting its available resources towards those activities considered most likely to generate profits.

In this scenario, the Directors have ascertained that the simulations previously developed - regarding the positive effect of the restructuring and refocusing actions undertaken by the Group starting from 2020 and the absorption of operating cash flow still in 2021 - are confirmed. The forward-looking scenarios suggest the possibility to return to a stable financial situation thanks to the forecast expected partial upswing in sales compared to the current volumes (which are not however expected to change in the very near future). The Group's ability to continue as a going concern will require significant efforts in terms of sales volumes, cost containment and costs to win future contracts given the situation outlined above.

According to the directors, given the issues described above, there is significant uncertainty about the achievement of the production volumes and profitability goals, as they depend on the recovery of the markets in which the Group and the parent operate in the coming years and the success of the actions taken to create

D I R E Z I O N E C O M U N I C A Z I O N E E I M M A G I N E - W W W . P I N I N F A R I N A . C O M - I N F O @ P I N I N F A R I N A . C O M

PRESS RELEASE

the conditions for the return to profitability. This uncertainty may cast material doubts as to their ability to continue as going concerns.

Notwithstanding the above, the directors deem that all measures to limit operating cash outflows and all possible measures to contain costs have been implemented. They have assessed existing and prospective projects based on commercial relationships with customers, as well as the Group's available financial resources. After having carried out all relevant checks and evaluated the above uncertainty, also considering the figures for the period, management reasonably expects that the parent and the Group have sufficient resources available to continue their operations for the foreseeable future, as provided for by the IFRS. Due to the above reasons, the Directors deem it correct to prepare this interim financial report at 30 September 2021 on a going concern basis.

Events after the reporting period

With reference to the winding up process of the subsidiary Pininfarina Engineering S.r.l. - which started on 26 October 2020 - on 2 November 2021 the company terminated the employment relationship with the last 8 people (out of the initial 135) who, on that date, had not yet left the company during the liquidation period. As of 3 November 2021, Pininfarina Engineering S.r.l. in liquidation consequently has no staff in place.

There are no other significant events that occurred after the reporting date.

Outlook for 2021

Based on the current situation of the business sectors where the Pininfarina Group operates, its outlook for 2021 is revenue in line with 2020, along with an operating loss and a loss for the year, albeit better that those of 2020.

The key financial figures of the parent, Pininfarina S.p.A., are summarised below:

(€/million)	Q3 2021	Q3 2020	2020	Variation*
Revenue	30.9	28.0		2.9
Ebitda	1.2	-3.7		4.9
Ebit	-0.9	-7.1		6.2
Loss for the period	-2.0	-8.3		6.3
Net financial position (debt)	6.2	-7.9	4.7	1.5
Equity	46.4	46.9	45.2	1.2

* Variations in the statement of financial position figures relate to the corresponding figures at 31 December 2020.

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

Contacts:

Pininfarina:

Gianfranco Albertini, C.F.O. and Investor Relations, Phone [phone]

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

Carolina Mailander Comunicazione:

Carolina Mailander, [e-mail]

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

D I R E Z I O N E C O M U N I C A Z I O N E E I M M A G I N E - W W W . P I N I N F A R I N A . C O M - I N F O @ P I N I N F A R I N A . C O M