Tod : 2019/03/11 6.15pm – In FY2018 Group’s sales totalled 958.3 million Euros at constant rates, with a 13.4% EBITDA margin. Proposal of a dividend of 1 Euro per share.

Milan - March 11th, 2019

TOD'S S.p.A. - In FY2018 Group's sales totalled 958.3 million Euros at constant rates, with a 13.4% EBITDA margin. Proposal of a dividend of 1 Euro per share.

The Board of Directors approved the draft of 2018 Annual Report

Sales revenues: 940.5 million Euros (958.3 million at constant rates)

EBITDA: 118.3 million Euros (128.3 million at constant rates)

EBIT: 71.8 million Euros (81.2 million at constant rates)

Group's net income: 47.1 million Euros

Net financial position: 75.3 million Euros

Dividend: 1.00 Euro per share

Tod's S.p.A., the Italian company listed on the Milan Stock Exchange and holding of the luxury goods group of the same name operating in luxury and quality shoes, accessories and apparel with the Tod's, Hogan, Fay and Roger Vivier brands, today approved the draft of the Group's 2018 Annual Report.

Message from the Group's Chairman and CEO

Diego Della Valle, Chairman and CEO of the Group, commented as follows:

" FY 2018 results reflect the industrial plan underway in the Group and the strategic decision to invest significant financial resources to support future revenue growth. We are working to ensure that the development plan for the coming years can be fully implemented as soon as possible. We are convinced that the business model we are developing for each brand is the right one, especially considering the world of strong and well-structured brands we are competing with. For this reason, we must increasingly highlight the excellence of our products, in terms of quality, craftsmanship, style and creativity, to make them increasingly attractive and unique in the luxury market.

The quality and the geographic distribution of our retail network are excellent; improving its efficiency and sales results is one of the most important objectives, which would allow us to obtain the desired results quickly.

The collections now in stores are collecting a very positive acceptance from our customers; the communication strategy, in all its forms and in all its channels, is appropriate and will be stronger and more focused. Excellent are the results of our e-commerce channel, which is growing very fast. Our focus is now to continue to work in this direction, targeting higher efficiency and revenue growth.

Given the financial stability of our Group and thanks to the high caliber of the current management team, we are confident to meet our goals."

Comments to the Group's sales

In fiscal year 2018, consolidated sales were 958.3 million Euros, at constant exchange rates, meaning by using the average exchange rates of FY 2017, including the related effects of hedging contracts; this value is broadly aligned with the figure registered in FY 2017.

At reported rates, revenues totalled 940.5 million Euros; Tod's and Roger Vivier were the most affected by currencies fluctuations, due to their higher presence abroad.

In the following paragraphs, the comments will refer to figures at constant exchange rates, which we believe best express the real performance of the business.

Breakdown of consolidated sales by brand

(million Euros)
Tod's	498.7	509.6
Hogan	206.1	207.5
Roger Vivier	173.5	179.0
Fay	61.3	61.3
Other	0.9	0.9
TOTAL	940.5	958.3

FY 2018
reported rates constant rates	2017
515.7	- 3.3%	-1.2%
203.9	+1.1%	+1.8%
179.3	-3.2%	-0.2%
63.5	-3.5%	-3.4%
0.9	n.m.	n.m.
963.3	-2.4%	-0.5%

% change reported rates constant rates

FY

Tod's sales totaled 509.6 million Euros in 2018. Good results were achieved in the Americas and in Asia, while Europe was affected by lower purchases of tourists and political and economic uncertainties in Italy and in France.

Hogan revenues were 207.5 million Euros, up 1.8% from the previous year. As already commented for the previous quarters, the weakness of the Italian market was more than offset by the solid double-digit growth recorded abroad.

Sales of Roger Vivier totaled 179 million Euros at constant rates, broadly flattish as compared to FY 2017.

Revenues registered a visible improvement, with the arrival in stores of the new products designed by Gherardo Felloni, which are getting excellent feedback. Good results in Asia, while the market was weaker in Europe, especially as sales to tourists.

Finally, sales of Fay were 61.3 million Euros; the 3.4% decrease, as compared to FY 2017, is mainly due to the weakness of the domestic market.

Breakdown of consolidated sales by product category

(million Euros)
Shoes	743.7	758.2
Leather goods
and accessories	128.6	131.7
Apparel	67.3	67.5
Other	0.9	0.9
TOTAL	940.5	958.3

FY 2018
reported rates constant rates	2017
757.9	-1.9%	0.0%
135.8	-5.3%	-3.0%
68.7	-2.0%	-1.7%
0.9	n.s.	n.s.
963.3	-2.4%	-0.5%

% change reported rates constant rates

FY

Revenues from shoes were 758.2 million Euros in FY2018, in line with the figure registered last year.

Sales of leather goods and accessories totaled 131.7 million Euros, down 3% from FY 2017.

Finally, sales of apparel were 67.5 million Euros, slightly below the figure of last year; the performance broadly reflects the trend registered by the Fay brand.

Breakdown of consolidated sales by region

(million Euros)

FY	% change
reported rates constant rates	2017	reported rates constant rates

FY 2018

Italy Europe (excl. Italy)

282.2 243.9

282.2 246.4

298.2 245.1

Americas (*) Greater China (**) Rest of World

73.0

76.9

78.0

-5.4% -0.5% -6.5%

-5.4% +0.5% -1.4%

210.3

218.8

212.0

131.1

134.0

130.0

TOTAL

940.5

958.3

963.3

-0.8% +0.9% -2.4%

+3.2% +3.1% -0.5%

(*) This line includes the whole American continent (Northern and Southern America).

(**) This line includes: mainland China, Hong Kong, Macao and Taiwan.

Domestic sales were 282.2 million Euros; the 5.4% decrease, as compared to 2017, is mainly due to the persistent weakness experienced by this market.

In the rest of Europe, the Group's revenues totaled 246.4 million Euros, slightly increasing compared to the previous year.

In the Americas sales amounted to 76.9 million Euros; the 1.4% decrease from 2017 is due to the wholesale channel. The retail channel registered positive results, especially thanks to purchases from local customers.

The Group's sales in Greater China totaled 218.8 million Euros, up 3.2% from 2017 and with an acceleration of the performance in the fourth quarter. Positive results in mainland China, which represents approx. 60% of this region, in Hong Kong and in Macao.

Finally, in the area "Rest of the World" the Group's revenues were 134 million Euros, up 3.1% from 2017.

Breakdown of consolidated sales by distribution channel

(million Euros)

Retail (DOS+online)Third parties (Franchised stores + Independent retailers)

TOTAL

FY 2018	FY
reported rates constant rates	2017
621.1	-2.1%	+0.2%
342.2	-2.8%	-1.8%
963.3	-2.4%	-0.5%

% change reported rates constant rates

607.8

622.4

332.7 335.9

940.5 958.3

In 2018, retail sales totaled 622.4 million Euros, in line with the figure of 2017, and represent approx. two thirds of the Group's turnover.

The Same Store Sales Growth (SSSG) rate, calculated at constant exchange rates as the worldwide average of sales growth rates registered by the DOS network, is -3.0% in the fiscal year (from January 1st to December 31st, 2018). The difference, compared to the 9-month figure, is mainly due to the worsening of sales in Italy and the rest of Europe, despite the improvement registered in Greater China.

As of December 31st, 2018 the Group's distribution network was composed by 284 DOS and 120 franchised stores, compared to 275 DOS and 112 franchised stores as of December 31st, 2017.

Revenues to third parties totaled 335.9 million Euros, down 1.8% from the previous year, due to the already commented weakness of this channel in some important markets, such as Italy and USA.

Comments on the Profit & Loss key figures

In fiscal year 2018 the Group's EBITDA was 118.3 million Euros, with a 12.6% margin on sales; at constant exchange rates, EBITDA would have been 128.3 million Euros, with a 13.4% margin on sales.

Despite the improvement of the contribution margin, as compared to the previous year, 2018 EBITDA was affected by the sharp acceleration in communication and marketing expenses and the higher costs associated with the strengthening of the stylistic teams, started in the second half of the year.