F I L A Fabbrica Italiana Lapis ed Affini S p A : .I.L.A. S.p.A. Interim inancial Report at March 31 2024

Interim Financial Report

March 31, 2024

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

F.I.L.A. GROUP

INTERIM FINANCIAL REPORT

AT MARCH 31, 2024

F.I.L.A. - Fabbrica Italiana Lapis ed Affini S.p.A.

Via XXV Aprile 5 Pero (MI)

Interim Financial Report
March 31, 2024
CONTENTS
I - Interim Directors' Report	3
Corporate Bodies	3
Overview of the F.I.L.A. Group	4
Key events of the reporting period	6
Key Financial Highlights	7
F.I.L.A. Group's Financial Highlights	12
Adjusted financial performance	12
Business seasonality	14
Statement of Financial Position	16
Financial overview	19
Segment reporting	23
Business Segments - Statement of financial position	24
Business Segments - Income Statement	25
Business Segments - Other Information	26
Subsequent events	27
Outlook	27
Treasury shares	27
Accounting policies	28
II - Consolidated Financial Statements of the F.I.L.A. Group at March 2024	29
Interim Consolidated Financial Statements	29
Statement of Financial Position	29
Statement of Comprehensive Income	30
Statement of changes in Shareholders' Equity	31
Consolidated Statement of Cash Flows	32
Attachments	34
Attachment 1 - List of companies included in the consolidation scope and other equity investments	34
Transactions relating to Atypical and/or Unusual Operations	35
Statement of the Manager in Charge - Interim Financial Report	36

1

Interim Financial Report

March 31, 2024

DIRECTORS' REPORT

AT MARCH 31, 2024

2

Interim Financial Report

March 31, 2024

I - Interim Directors' Report

Corporate Bodies

Board of Directors
Chairperson (*)	Giovanni Gorno Tempini
Honorary Chairperson	Alberto Candela
Chief Executive Officer (**)	Massimo Candela
Executive Director (**)	Luca Pelosin
Non-executive Director	Annalisa Matilde Barbera
Non-executive Director (*)	Gianna Luzzati
Non-executive Director (*)	Carlo Paris
Non-executive Director (*)	Donatella Sciuto

1. Independent director in accordance with Article 148 of the Consolidated Finance Act and Article 3 of the Code of Conduct. (**) Executive Director

Control, Risks and Related Parties Committee

Gianna Luzzati

Carlo Paris

Donatella Sciuto

Remuneration Committee

	Donatella Sciuto
	Gianna Luzzati
	Annalisa Matilde Barbera
Board of Statutory Auditors
Chairperson	Gianfranco Consorti
Standing Auditor	Sonia Ferrero
Standing Auditor	Pietro Michele Villa
Alternate Auditor	Stefano Amoroso
Alternate Auditor	Tina Marcella Amata
Independent Auditors	Deloitte & Touche S.p.A.

3

Interim Financial Report

March 31, 2024

Overview of the F.I.L.A. Group

The F.I.L.A. Group (hereafter also the "Group") operates in the creativity tools market, producing and marketing colouring, design, modelling, writing and painting objects, such as pencils, crayons, modelling clay, chalk, oil colours, acrylics, watercolours, paints and paper for the fine arts, school and leisure.

The F.I.L.A. Group at March 31, 2024 operates through 23 production facilities and 32 subsidiaries across the globe and employs approx. 3,300 people, becoming a pinnacle for creative solutions in many countries with brands such as GIOTTO, DAS, LYRA, Canson, Maimeri, Daler-Rowney Lukas, Ticonderoga, Pacon, Strathmore, Princeton and Arches.

Founded in Florence in 1920 by two noble Tuscan families, della Gherardesca and Marchesi Antinori, F.I.L.A. S.p.A. (hereafter also the "Parent") has achieved strong international growth in the past 20 years, supported by a series of strategic acquisitions. Over the years, the Parent has acquired: (i) the Italian firm Adica Pongo in 1994, a leading producer of modelling clay for children; (ii) the Spanish firm Spanish Fila Hispania S.L. (formerly Papeleria Mediterranea S.L.) in 1997, the Group's former exclusive distributor in Spain; (iii) the French firm Omyacolor S.A. in 2000, a leading manufacturer of modelling putties and clays; (iv) the U.S. Dixon Ticonderoga Group in 2005, a leading producer and distributor of pencils in North America, with subsidiaries operating on the Canadian, Mexican, Chinese and European markets; (v) the German LYRA Group in 2008, which allowed the Group to enter the German, Scandinavian and Eastern Asian markets; (vi) the business unit operated by Lapiceria Mexicana in 2010, one of the main local competitors in the budget coloured and graphite pencils market; and (vii) the business unit operated by Maimeri S.p.A. in 2014, a manufacturer and distributor of paints and accessories for fine arts. In addition to these operations, on the conclusion of an initiative which began with the acquisition of a significant influence in 2011, control of the Indian company DOMS Industries Pvt Ltd. was acquired in 2015 (viii). In 2016, the F.I.L.A. Group focused upon development through strategic Art&Craft sector acquisitions, seeking to become the leading market player. On February 3, 2016, F.I.L.A. S.p.A. acquired control of the Daler-Rowney Lukas Group, an illustrious brand producing and distributing materials and accessories on the arts and crafts market since 1783, with a direct presence in the United Kingdom, the Dominican Republic, Germany and the USA (ix). in September 2016, the F.I.L.A. Group acquired the entire share capital of St. Cuthberts Holding Limited and the operating company St. Cuthberts Mill Limited, a highly-renowned English paper mill, founded in 1907, located in the south-west of England and involved in the production of high quality artist's papers (x). in October 2016, F.I.L.A. S.p.A. acquired the Canson Group, founded in 1557 by the Montgolfier family, with headquarters in Annonay in France, production facilities in France and conversion and distribution centres in Italy, France, China, Australia and Brazil. Canson products are available in over 120 countries and the brand is the most respected globally involved in the production and distribution of high added value paper for the fine arts, design, leisure and schools, but also for artists' editions and technical and digital drawing materials (xi).

4

Interim Financial Report

March 31, 2024

In June 2018, F.I.L.A. S.p.A., through its US subsidiary Dixon Ticonderoga Co. (U.S.A.), consolidated its role as a leading player on the US market with the acquisition of the US Group Pacon, which through brands such as Pacon, Riverside, Strathmore and Princeton, is a leader in the US schools and arts and crafts sector. Dixon Ticonderoga Co. (U.S.A.) was subsequently merged into Pacon Corporation (U.S.A.), which later changed its name to Dixon Ticonderoga Co. (U.S.A.) (xii).

On March 2, 2020, F.I.L.A.- Arches S.A.S., a French company wholly-owned by F.I.L.A. S.p.A., completed the purchase from the Ahlstrom-Munksjö Group of the fine art business unit specialised in fine art operating through the ARCHES® brand (xiii).

On February 8, 2022, the UK subsidiary Daler Rowney Ltd. acquired 100% of the UK company Creative Art Products Limited, located in Manchester (UK), which specialises in the schools segment and produces and distributes a wide range of art materials for children, both under the Scola brand and private label (xiv) brands. On December 20, 2023, the listing of the subsidiary DOMS Industries Limited on the National Stock Exchange of India was completed. Following the public listing, F.I.L.A. S.p.A. still remained a shareholder of the Indian company with a 30.6% interest (xv).

5

Interim Financial Report

March 31, 2024

Key events of the reporting period

On January 22, 2024, the Shareholders' Meeting of F.I.L.A. S.p.A. resolved: (i) the distribution of an extraordinary dividend of Euro 0.58 for each (ordinary and special) F.I.L.A. share in circulation on the coupon date (net of treasury shares in portfolio on that date); (ii) the appointment of Deloitte & Touche S.p.A. to undertake the legally-required audit for the period 2024-2032, pursuant to Legislative Decree No. 39/2010 and Regulation (EU) No. 537/2014.

With regard to the distribution of the extraordinary dividend, considering the 51,058,297 F.I.L.A. shares outstanding as of today, net of the 330,766 treasury shares held by the Company, the maximum total amount of the dividend will be Euro 29,421,967.98.

Impacts of events related to the conflict in Ukraine and Israel

The operating and financial impacts of the conflict between Russia and Ukraine on the F.I.L.A. Group and on its Russian commercial subsidiary Fila Stationary O.O.O. are not considered significant, also in view of the fact that the revenue of the subsidiary accounts for approx. 0.1% of the Group's total. The F.I.L.A. Group does not have suppliers or production plant in the area. The Russian subsidiary has a net commercial exposure to third parties at March 31, 2024 of Euro 2.2 million, fully written-down on the basis of assessments upon their recoverability. Group management continues to monitor the recoverability of the net exposure to third parties of the Russian subsidiary.

In light of these serious events, the Group is in addition monitoring the short-term situation so as to be ready to offset the impacts of all future decisions upon the presence in Russia.

There are no F.I.L.A. Group companies in Ukraine at March 31, 2024.

For further details, reference should be made to the "Key events in the year" section of the Annual Financial Report at December 31, 2023.

A military conflict involving Israel has been ongoing since October 7, 2023.

The operating and financial impacts of the conflict on the Israeli commercial subsidiary Fila Art and Craft Ltd are not considered significant, also in view of the fact that the revenue of the subsidiary accounts for approx. 0.5% of the Group's total.

The F.I.L.A. Group does not have suppliers or production plant in the area.

The Israeli subsidiary has a net commercial exposure to third parties at March 31, 2024 of Euro 696 thousand. Group management continues to monitor the recoverability of the net exposure to third parties of the subsidiary, although currently no recoverability risks exist.

6

Interim Financial Report

March 31, 2024

Key Financial Highlights

The F.I.L.A. Group Key Financial Highlights for Q1 2024 are reported below:

	March 31, 2024 % revenue March 31, 2023	% revenue
Euro thousands
Revenue	131,898	100.0%	178,688	100.0%
Gross operating profit (1)	20,432	15.5%	26,290	14.7%
Operating profit	12,663	9.6%	15,390	8.6%
Net financial expense	(3,850)	-2.9%	(10,137)	-5.7%
Total taxes	(2,357)	-1.8%	(2,365)	-1.3%
F.I.L.A. Group Profit attributable to the owners
of the Parent	6,178	4.7%	1,255	0.7%
Earnings per share (€ cents)
basic	0.12		0.02
diluted	0.12		0.02

Change	of which DOMS
Industries Limited
2024 - 2023
	(3)
(46,790)	-26.2%	(30,096)	-16.8%
(5,858)	-22.3%	(5,715)	-21.7%
(2,727)	-17.7%	(4,180)	-27.2%
6,286	62.0%	24	0.2%
7	0.3%	980	41.4%
4,923	392.3%	(1,620)	-129.1%

ADJUSTED Net of Non-Recurring expenses - Euro	March 31, 2024 % revenue March 31, 2023	% revenue		Change	of which DOMS		IFRS 16	Adjustments for
thousands	2024 - 2023	Industries Limited		effects	Non-Recurring
					(3)		expenses
Revenue	131,898	100.0%	178,688	100.0%	(46,790)	-26.2%	(30,096)	-16.8%	-	-
Gross operating profit (1)	21,116	16.0%	28,262	15.8%	(7,146)	-25.3%	(5,715)	-20.2%	2,895	(684)
Gross operating profit net of IFRS16	18,536	14.1%	24,339	13.6%	(5,804)	-23.8%	(5,359)	-22.0%	2,580	(684)
Operating profit	12,980	9.8%	17,361	9.7%	(4,381)	-25.2%	(4,180)	-24.1%	434	(317)
Net financial expense	(3,850)	-2.9%	(10,137)	-5.7%	6,286	62.0%	24	0.2%	(907)	-
Total taxes	(2,381)	-1.8%	(2,635)	-1.5%	254	9.6%	980	37.2%	60	24
F.I.L.A. Group Profit attributable to the owners
of the Parent	6,471	4.9%	2,955	1.7%	3,516	119.0%	(1,620)	-54.8%	(412)	(293)

Earnings per share (€ cents)

basic	0.13	0.06
diluted	0.12	0.06
	March 31, 2024	March 31, 2023
Euro thousands
Cash flows from operating activities	(29,659)	(31,850)
Free cash flow to equity	(40,558)	(55,462)
Net investments	(2,284)	(12,518)
% revenue	1.7%	7.0%
	March 31, 2024	December 31, 2023
Euro thousands
Net capital employed	922,212	877,364
Net Financial debt (2)	(363,016)	(303,412)
Net Financial debt excluding IFRS16 and MTM	(299,493)	(226,643)
Equity	(559,196)	(573,953)

Change 2024 - 2023

2,191

14,904

10,234

Change IFRS 16 2024 - 2023 effects

(877,364) (11,490)

303,412 10,851

(72,849)

14,756 639

1. The Gross Operating Margin (EBITDA) corresponds to the operating result before amortisation and depreciation and write-downs;
2. Net financial structure indicator calculated as the aggregate of the current and non-current financial debt, net of cash and cash equivalents and current financial assets. Net financial debt as defined by Consob Notice DEM/6064293 of July 28, 2006 and Consob Attention Call No. 5/21 of April 29, 2021, excludes non-current financial assets.
3. The data refer to the associated company DOMS Industries Limited at consolidation level. Following its listing on December 20,2023 on the National Stock Exchange of India, the company has been deconsolidated.

7

Interim Financial Report

March 31, 2024

2024 Adjustments:

The adjustments to the Q1 2024 "Gross Operating Profit" concern non-recurring operating charges of Euro

0.7 million regarding the reorganisation charges for Euro 0.4 million, the portion for the period concerning the medium/long-term"2022-2026 Performance Shares" incentive plan for Euro 0.2 million Group and consultancy charges for Euro 0.1 million;

The adjustment to the "Operating Profit" was Euro 0.3 million, relating to the above-stated effects on the "Gross Operating Profit" and to the release of the previously accrued provision for the estimated losses of the Russian subsidiary Fila Stationary O.O.O.;

The adjustment to the Q1 2024 "Profit attributable to the owners of the parent" was Euro 0.3 million and principally concerns the above effects on the "Operating Profit", net of the tax effect.

2023 Adjustments:

The adjustments to the Q1 2023 "Gross Operating Profit" concern non-recurring operating charges of Euro

2.0 million regarding the reorganisation and restructuring charges for Euro 1.3 million, Group consultancy charges for Euro 0.6 million and the portion for the period concerning the medium/long-term"2022-2026

Performance Shares" incentive plan for Euro 0.1 million;

The adjustment of the "Operating Profit" was Euro 2.0 million, resulting from the aforementioned effects on the "Gross Operating Profit";

The adjustment to the Q1 2023 "Profit attributable to the owners of the parent" was Euro 1.7 million and principally concerns the above effects on the "Operating Profit", net of the tax effect.

In order to permit a more accurate assessment of the F.I.L.A. Group's financial performance and financial position, some alternative performance measures are presented alongside the conventional financial measures pursuant to the IFRS. Such alternative performance measures are not to be considered replacements for the IFRS-compliant measures. These measures are also tools used by the Directors to identify operating trends and for decision-making upon investments, the allocation of resources and other operative decisions. Alternative performance measures are not covered by IFRS and are therefore not comparable with similar performance and disclosure measures used in the financial statements of other entities.

The alternative performance measures used are illustrated below:

Gross operating profit or EBITDA: this is calculated as profit for the reporting period, excluding the

following components: (i) income taxes for the reporting period, (ii) depreciation, amortisation and impairment losses, and (iii) financial income and expense.

8

Interim Financial Report

March 31, 2024

The F.I.L.A. Group uses this measure as an internal management target and in external presentations (for analysts and investors), as it is useful in measuring the overall operating performance of the F.I.L.A. Group and of F.I.L.A. S.p.A.

The table below presents a reconciliation of the profit for the period with the Gross Operating Profit or

EBITDA:

Euro thousands

Profit attributable to non-controlling interests Profit attributable to the owners of the parent

March 31, 2024	March 31, 2023
277	1,633
6,178	1,255

Profit for the year	6,455	2,888
Income taxes	2,357	2,365
Current taxes	2,582	3,189
Deferred taxes	(224)	(824)
Financial items	3,850	10,137
Financial income	(2,494)	(1,861)
Financial expenses	6,344	12,261
Share of losses of equity-accounted investees	-	(263)
Amortisation, depreciation and impairment losses	7,769	10,900
Gross operating profit	20,432	26,290

The Group defines adjusted "Gross Operating Profit or EBITDA excluding non-recurring charges and IFRS 16" as gross operating profit or EBITDA before: (i) non-recurring expense and (ii) the application of IFRS 16.

The following is a reconciliation between Gross Operating Profit or EBITDA and Gross Operating Profit or EBITDA excluding non-recurring charges and IFRS 16:

9