Unieuro S.p.A.: Financial soundness and very encouraging results in the first quarter of 2020/21, impacted by the Covid-19 emergency

PRESS RELEASE

UNIEURO S.P.A.: FINANCIAL SOUNDNESS AND VERY ENCOURAGING RESULTS IN THE FIRST QUARTER OF 2020/21, IMPACTED BY THE COVID-19 EMERGENCY

•  March and April revenues affected by the Covid-19 emergency (-30% compared to the same period in 2019), buoyant recovery in May (+20%) with the start of "Phase 2"

•  Revenues at 428.9 million Euro, down 13.4% compared to 495.3 million Euro in the first quarter of the previous year

•  Lockdown effect on physical channels, partially offset by the boom (+142.8%) in e-commerce, which rose to 28.7% of revenues

•  Limited impact of the emergency on profitability thanks to management timely actions: EBIT Adjusted1 negative by €11.1 million (-€2.5 million in Q1 2019/20) in the seasonally weakest quarter of the year

•  Corporate soundness intact: cash absorption2 of €40.1 million in the quarter, stable year on year, and net financial debt3 contained at €11.2 million (€39.1 million as of 31 May 2019)

•  Positive signs from the June trend, although risks related to Covid and the macroeconomic situation call for caution

Forlì, July 10, 2020 - The Board of Directors of Unieuro S.p.A. (MTA: UNIR), the Italian leader in the retail market of consumer electronics and household appliances, met today chaired by Stefano Meloni to examine and approve the Interim Report on Operations as of 31 May 2020.

It should be noted that, one year after the first adoption of IFRS 16, the transitional phase during which Unieuro's financial reporting was based on adjusted data and in continuity with the previous accounting standard IAS 17 and the interpretations thereof has ended. From the quarter under review, in line with practices that were gradually established among retailers listed on international markets, the Company will therefore comment only on the economic figures after the application of the above accounting standard, focusing on Adjusted EBIT and Adjusted Net Profit. On the other hand, net debt and cash flow will still not include the notional component linked to the application of IFRS 16.

The quarter March-May 2020, the first of Unieuro's 2020/21 financial year, featured the unpredictable spread of the Covid-19 epidemic, which had a negative impact on revenues and profitability, partially offset by the benefits of prompt managerial actions4.

1

All data contained in this press release are consolidated data. The scope of consolidation includes the Parent Company Unieuro S.p.A., the wholly-owned subsidiary Monclick S.r.l. (starting on 1 June 2017) and the wholly-owned subsidiary Carini Retail S.r.l. (starting on 1 March 2019).

Economic and financial figures reflect the adoption of IFRS 16 accounting principle, which came into force on 1st January 2019. Unieuro presents and comments on such measures, unless otherwise indicated.

In a completely unprecedented and exceptional context, the drop in revenues was limited to 13.4%, while the e-commerce boom (+142.8%) made up for the dramatic impact of the lockdown on brick-and-mortar stores, both direct and indirect, in March and April. Profitability, which in itself was already not very significant due to the seasonal nature of the business, was affected by the repercussions of the crisis, but it also benefited from the timely protective actions taken by Management4, as a result of which EBIT Adjusted1 registered a limited decrease, ending up at -€11.1 million from -€2.5 million. Adjusted net profit5 came to -€13.8 million.

Cash requirements2, amounting to €40.1 million, were stable year-on-year thanks to tight working capital control and a swift reduction in operating costs, enabling Unieuro to record a negative net financial position of only €11.2 million at the end of May.

"We are utterly proud of how Unieuro, its 5,000 employees, suppliers, partners and even shareholders have responded with determination and promptness to the threats that have made the quarter just ended possibly the most critical time in the company's more than eighty years of heritage.

Thanks to this sense of purpose and a long-term strategic approach that proved successful, we were able to contain the effects of the Covid-19 emergency and close the quarter with unhoped-for results and enviable financial and equity soundness.

With all due caution, we look forward to the coming months with confidence, reassured by the very encouraging data for May and June and the positive feedback from customers on the new omnichannel services, designed to make the shopping experience safe and rewarding even at times of Coronavirus".

Giancarlo Nicosanti Monterastelli, CEO of Unieuro.

Revenues for the 1st quarter 2020/21

In the quarter ended 31 May 2020, Unieuro posted revenues of €428.9 million, down by 13.4% on the €495.3 million of the previous year, thus reporting a mild decline of €66.3 million.

The trend in revenues was clearly influenced by the Covid-19 emergency, which prompted on the one hand the adoption by the authorities of heavy restrictions on the free movement of people and on the other a swift change in consumer purchasing behaviour, in the light of the new social distancing requirements.

2

All data contained in this press release are consolidated data. The scope of consolidation includes the Parent Company Unieuro S.p.A., the wholly-owned subsidiary Monclick S.r.l. (starting on 1 June 2017) and the wholly-owned subsidiary Carini Retail S.r.l. (starting on 1 March 2019).

Economic and financial figures reflect the adoption of IFRS 16 accounting principle, which came into force on 1st January 2019. Unieuro presents and comments on such measures, unless otherwise indicated.

Traffic and revenues from the network of stores, both direct and indirect, were therefore penalized, whereas e-commerce benefited greatly from the ensuing circumstances, thus allowing Unieuro - with its well-established digital presence - to at least partially offset the drop in sales in physical stores.

Overall, the months of March and April thus recorded a cumulative loss of revenues equal to 30% compared to the same two-month period in 2019. With the start of the so-called "Phase 2" and thanks to the measures taken in the meantime in terms of store safety and customer service, the month of May featured a buoyant rebound year on year, equal to about +20%.

Overall, the trend in like-for-like revenues6 - i.e. the comparison of sales with those in the same period last year based on the same scope of operations - ended up with a reduction of 9.5%. Excluding from the scope of analysis the stores adjacent to newly opened stores, and therefore not included in the like-for-like computation, like-for-like sales displayed a lower decrease of 5.5%.

Revenues by sales channel

Period ended

Changes

(In millions of Euro and as a percentage of revenues)

31 May 2020	%	31 May 2019	%	%
Retail	225.1	52.5%	347.2	70.1%	(122.1)	(35.2%)
Online	123.0	28.7%	50.7	10.2%	72.3	142.8%
Indirect	49.3	11.5%	59.9	12.1%	(10.6)	(17.7%)
B2B	28.5	6.6%	29.0	5.9%	(0.5)	(1.8%)
Travel	3.1	0.7%	8.5	1.7%	(5.5)	(63.9%)
Total revenues	428.9	100.0%	495.3	100.0%	(66.3)	(13.4%)



The Retail channel (52.5% of total revenues) - consisting of 239 direct stores located in areas deemed commercially strategic and characterized by different sizes in terms of surface area - posted a decline of 35.2%, to € 225.1 million against € 347.2 million recorded in the same period of the previous year. In addition to the voluntary closure of the network from 14 to 29 March, the channel suffered a dramatic drop in traffic due to restrictions on the movement of people and social distancing regulations, which took a heavy toll especially on stores located outside city centres, in large shopping malls and in shopping parks. Starting from April, the easing of restrictions and the actions taken by Unieuro to support the customer experience in an omnichannel perspective, have led to an

3

All data contained in this press release are consolidated data. The scope of consolidation includes the Parent Company Unieuro S.p.A., the wholly-owned subsidiary Monclick S.r.l. (starting on 1 June 2017) and the wholly-owned subsidiary Carini Retail S.r.l. (starting on 1 March 2019).

Economic and financial figures reflect the adoption of IFRS 16 accounting principle, which came into force on 1st January 2019. Unieuro presents and comments on such measures, unless otherwise indicated.

improvement in retail sales, which in May were higher than in the same month in 2019.

The Online channel (28.7% of total revenues) posted extraordinary growth of 142.8%, pushing revenues to €123 million compared to €50.7 million in the same period of the previous year. This downright exceptional performance is the result of both the emergency situation that has arisen - which has led customers to favour e-commerce over physical stores - as well as of the prompt response by Unieuro, which tackled the lockdown by tactically refocusing its marketing activities, both mainstream and digital, on the Online channel. Its dual presence on the web, guaranteed by two well-known and distinct brands such as Unieuro and Monclick, has further contributed to the success achieved.

The Indirect channel (11.5% of total revenues) - which includes sales to the network of affiliated stores and revenues generated in the segment of Mass Merchandisers through partnerships with leading industry operators, for a total of 259 stores - reported revenues of 49.3 million Euros, a limited reduction of 17.7% compared to 59.9 million in the same period of the previous year. Although the restrictive measures imposed by the authorities had a negative impact on the turnover and traffic of the affiliated stores too, the distinctive features of these stores - small to medium size, focused on proximity services and mostly located in central-southern Italy - resulted in a significant resilience of the business, which has gradually normalized with the start of the so-called "Phase 2".

The Business-to-Business channel (6.6% of total revenues) - which caters to business customers, including foreign customers, operating in sectors other than that of Unieuro, such as hotels and banks, as well as operators purchasing electronic products to be distributed to their regular customers or to employees for loyalty points, prize contests, or incentive plans (referred to as B2B2C segment) - reported sales of 28.5 million euros, down 1.8% compared to 29 million euros in the same period of the previous year. By its very nature, the channel was only marginally affected by the effects of the pandemic.

Lastly, the Travel channel (0.7% of total revenues) - made up of 11 directly operated stores located at main public transport hubs such as airports and railway or metro stations - recorded a sharp decrease in revenues to Euro 3.1 million (-63.9%). The performance was inevitably affected by the collapse of air traffic brought about by the pandemic and the total or partial closure - still in force - of some airports.

Revenues by product category7

4

All data contained in this press release are consolidated data. The scope of consolidation includes the Parent Company Unieuro S.p.A., the wholly-owned subsidiary Monclick S.r.l. (starting on 1 June 2017) and the wholly-owned subsidiary Carini Retail S.r.l. (starting on 1 March 2019).

Economic and financial figures reflect the adoption of IFRS 16 accounting principle, which came into force on 1st January 2019. Unieuro presents and comments on such measures, unless otherwise indicated.

Period ended

Changes

(In millions of Euro and as a percentage of revenues)

31 May 2020	%	31 May 2019	%	%
Grey	223.6	52.1%	243.0	49.1%	(19.4)	(8.0%)
White	109.8	25.6%	130.6	26.4%	(20.7)	(15.9%)
Brown	57.6	13.4%	80.0	16.2%	(22.4)	(28.0%)
Other products	19.9	4.6%	19.5	3.9%	0.3	1.7%
Services	18.0	4.2%	22.2	4.5%	(4.1)	(18.7%)
Total revenues	428.9	100.0%	495.3	100.0%	(66.3)	(13.4%)

Δ

The category of Grey Goods (52.1% of total revenues) - i.e. phones, tablets, information technology, accessories for phones, cameras and all wearable technology products - reported revenues of 223.6 million euros, a limited drop of 8% compared to 243 million euros in the same period of the previous year. In spite of the decline, the category benefited from strong underlying consumption trends, which came to being with distant working and learning in reaction to the epidemic and, in general, arising from the need to connect and communicate during a long forced isolation.

The category of White Goods (25.6% of total revenues) - comprising major domestic appliances (MDA), such as washing machines, dryers, refrigerators or freezers, and stoves, small domestic appliances (SDA), such as vacuum cleaners, food mixers, coffee machines, as well as the air conditioning segment - generated sales of 109.8 million Euros, down 15.9% compared to 130.6 million in the same period of the previous year. The performance, slightly lower than that of turnover as a whole, was affected by the drop in sales of large household appliances such as washing machines, refrigerators and dryers, whose purchase is more frequently linked to in-store experience. Conversely, small appliances have benefited from the needs arisen during the lockdown, including domestic food preparation and household cleaning.

The category of Brown goods (13.4% of total revenues) - which include television sets and related accessories, audio devices, smart TV devices and car accessories, as well as storage devices - recorded total revenues of €57.6 million, down 28% on the €80 million of the same period of the previous year. The decline mainly affected sales of TV sets, which were impacted, among other things, by the postponement of sports events as a result of Covid-19.

The category of Other products (4.6% of total revenues) - which include sales in the entertainment sector and sales of other products not included in the consumer electronics market, such as hover boards and bicycles - displayed a countertrend increase in revenues, up 1.7% to € 19.9 million. The entertainment segment, including consoles and

5

All data contained in this press release are consolidated data. The scope of consolidation includes the Parent Company Unieuro S.p.A., the wholly-owned subsidiary Monclick S.r.l. (starting on 1 June 2017) and the wholly-owned subsidiary Carini Retail S.r.l. (starting on 1 March 2019).

Economic and financial figures reflect the adoption of IFRS 16 accounting principle, which came into force on 1st January 2019. Unieuro presents and comments on such measures, unless otherwise indicated.