Unieuro S p A : Interim Director’s Report as at 30 November 2022

Interim Directors' Report

as at 30 November 2022

1. Introduction

The Unieuro Group (hereinafter also the "Group" or "Unieuro Group") is formed by the companies Unieuro S.p.A. and Monclick S.r.l., consolidated since 1 June 2017.

The company Unieuro S.p.A. (hereinafter also the "Company" or "Unieuro" or "UE") is a company incorporated under Italian law based in Forlì in Via Piero Maroncelli 10, founded in the late 1930s by Vittorio Silvestrini. Unieuro is now the leading company in the distribution of consumer electronics and appliances in Italy and it operates as an integrated omnichannel distributor in four major product segments: Grey (telephone systems, computers and photos), White (large and small appliances), Brown (consumer electronics and media storage), Other Products (consoles, video games, bicycles) and offering parallel ancillary services such as delivery and installation, extended warranties and consumer financing.

The company Monclick S.r.l.(hereinafter also known as "Monclick" or "MK") wholly owned by Unieuro, is a company under Italian law with its registered office in Milan at Via Marghera 28, which sells online IT, electronic and telephone products and appliances in Italy through its website www.monclick.it, offering a catalogue with over 70,000 items and guaranteeing a comprehensive purchasing experience completed through the home delivery and installation of the chosen product. It also operates in the segment known as B2B2C, where the customers are operators which need to purchase electronic products to distribute to their regular customers or employees to accumulate points or participate in competitions or incentive plans.

The Group's mission is to accompany customers in all phases of their shopping experience, placing them at the centre of an integrated ecosystem of products and services with a strategic approach focusing on accessibility, a local presence and nearness.

Since April 2017, Unieuro shares have been listed on the EURONEX STAR segment of the Milan stock exchange and the Company is in all respects a public company. At the date of this Report, the Unieuro free float amounted to roughly 80% of the Company's share capital. Below shows the percentage of Unieuro's ordinary shares held at the date of this Report, either directly or indirectly by shareholders or by those at the top of the ownership chain who have declared that the holding threshold of 5% of Unieuro's subscribed capital has been reached or exceeded in accordance with Article 120 of the Consolidated Finance Act and Consob Issuers' Regulation. This percentage is updated on the basis of the information available to the Company:

DECLARANT		DIRECT SHAREHOLDER	NUMBER	% OF NUMBER OF SHARES REPRESENTING THE
			OF	SHARE CAPITAL
			SHARES
XAVIER NIEL	•	ILIAD HOLDING S.P.A.		12.177%
	•	ILIAD SA	2,520,374
AMUNDI ASSET MANAGEMENT	•	AMUNDI SGR S.P.A.	1,396,730	6.748%
	•	AMUNDI ASSET MANAGEMENT
GIUSEPPE SILVESTRINI	•	VICTOR S.R.L.	1,290,620	6.235%
	•	MONTE PASCHI FIDUCIARIA S.P.A.
	•	GIUSEPPE SILVESTRINI

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Interim Report on Operations

2. Procedural note

The Interim Report on Operations herein, contains information relating to consolidated revenues, consolidated profitability, cash flows and the statement on the economic and financial position of the Unieuro Group as at 30 November 2022, compared with the figures as at 30 November 2021, for the economic results and the cash flows and with the figures of the latest financial statements approved as at 28 February 2022 for the economic and financial statement.

On 20 December 2021, the Unieuro Board of Directors approved an amendment to the communication policy for periodic financial information on a quarterly basis. In this regard, as of the same date, the impact of direct taxes for the period was excluded from the calculation of the economic and financial figures presented in interim reports on operations, relating to the first quarter and the first nine months of the financial year. The decision was made in the light of the need to fully consider any effects of the Budget Laws on the Company's accounts, considering the timing of their approval with respect to the approval date of Unieuro's nine-month results (January of each year).

Unless otherwise indicated, all amounts are stated in millions of Euro. Amounts and percentages were calculated on amounts in thousands of Euro and, thus, any differences found in certain tables are due to rounding.

This Interim Report on Operations was drawn up in accordance with Art. 82-ter of the Issuers' Regulation, pursuant to Art. 154-ter, paragraphs 5 and 6 of Italian Legislative Decree no. 58/1998. Therefore, the provisions of international accounting standard (IAS) 34 - Interim Financial Reporting were not adopted.

The publication of the Interim Report on Operations as at 30 November 2022 is regulated by the provisions of the Stock Exchange Regulations, specifically Article 2.2.3, paragraph 3 of the Stock Exchange Regulations.

The accounting standards used by the Group are the International Financial Reporting Standards ("IFRS") adopted by the European Union and in accordance with Legislative Decree 38/2005, as well as other CONSOB provisions concerning financial statements. The accounting criteria and the consolidation principles adopted are consistent with those used in the Group's Consolidated Financial Statements as at 28 February 2022, to which reference is made.

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3. Key financial performance indicators

To facilitate the understanding of the Group's economic and financial progress, some Alternative Performance Indicators ("APIs") are indicated. For a correct interpretation of the APIs, note the following: (i) these indicators are derived exclusively from the Group's historical data and are not indicative of future trends, (ii) the APIs are not provided for by the IFRS and, despite being derivatives of the Consolidated Financial Statement, they are not subject to audit, (iii) the APIs should not be regarded as substitutes for the indicators provided for in the reference accounting standards (IFRS), (iv) the interpretation of these APIs should be carried out together with the Group's financial information drawn from the Interim Performance Report; (v) the definitions and the criteria adopted for the determination of the indicators used by the Group, since they do not derive from the reference accounting standards, may not be aligned with those adopted by other companies or groups and, therefore, they may not be comparable with those potentially presented by such entities, and (vi) the APIs used by the Group are prepared with continuity and consistency of definition and they represent all the financial periods for which information is included in the Interim Performance Report.

The APIs reported (Consolidated Adjusted EBIT, Consolidated Adjusted EBIT margin, Adjusted Consolidated Profit (loss) for the period, Net Working Capital, Consolidated Adjusted levered Free Cash Flow and [Net debt]/ Net cash - under IAS

1. are not identified as accounting measures in IFRS, therefore - as noted above - they shall not be considered as alternative measures to those provided in the Group's Consolidated Financial Statement to assess their operating performance and related financial position.

Certain indicators are referred to as "Adjusted", to represent the Group's management and financial performance, net of non-recurring events, non-characteristic events and events related to extraordinary transactions, as identified by the Group. The Adjusted indicators shown consist of: Consolidated Adjusted EBIT, Consolidated Adjusted EBIT Margin, Consolidated Adjusted Profit Before Tax and Consolidated Adjusted Free Cash Flow and (Net debt) / Net cash - under IAS 17. These indicators reflect the main operating and financial measures adjusted for non-recurring income and expenses that are not strictly related to the core business and operations and for the effect from the change in the business model for extended warranty services (as more fully described below in the API "Consolidated Adjusted EBIT"). They make it possible to analyse the Group's performance in a more standardised manner in the periods reported in the Interim Report on Operations.

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				Interim Report on Operations
	Key financial performance indicators1
	(in millions of Euro)		Period ended
		30 November 2022	30 November 2021
	Operating indicators
	Consolidated revenues	2,102.6	2,154.3
	Consolidated Adjusted EBIT2	19.9	56.5
	Consolidated Adjusted EBIT margin3	0.9%	2.6%
	Consolidated Adjusted Profit Before Tax4	10.2	46.9
	Period's Profit of Before Tax (PBT)	(1.6)	35.8
	Cash flows
	Consolidated Adjusted Free Cash Flow5	29.6	73.9
	Investments paid in the period	(34.0)	(45.8)
	(in millions of Euro)		Period ended
		30 November 2022	28 February 2022
	Indicators from statement of financial position
	Net working capital	(351.7)	(332.6)
	(Net debt) / Net cash - Under IAS 176	133.1	135.7
	(Net debt) / Net cash	(318.9)	(314.5)

1. Adjusted indicators are not identified as accounting measures in the IFRS and, thus, should not be considered as alternative measures for assessing the Group's results. Since the composition of these indicators is not governed by established accounting standards, the calculation criterion applied by the Group might not be the same as that used by other companies or with any criterion the Group might use or create in the future, which therefore will not be comparable.
2. Consolidated Adjusted EBIT is Consolidated EBIT adjusted for (i) non-recurring expenses/(income), (ii) the impact from the adjustment of revenues for extended warranty services net of related estimated future costs to provide the assistance service, as a result of the change in the business model for directly managed assistance services, and (iii) non-recurring amortisation/depreciation. See section 4.2 for additional details.

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The Consolidated Adjusted EBIT Margin is the ratio of Consolidated Adjusted EBIT to revenues.

The Consolidated Adjusted Profit Before Tax is calculated as the consolidated profit before tax adjusted for (i) the adjustments incorporated in the Consolidated Adjusted EBITDA, (ii) the adjustments of non-recurring depreciation, amortisation and write-downs, (iii) the adjustments of non- recurring financial expenses/(income).

Consolidated Adjusted Free Cash Flow is the consolidated cash flow generated/absorbed by operating and investing activities, including financial expenses, prior to the adoption of IFRS 16. The Consolidated Adjusted Free Cash Flow is adjusted for non-recurring operating and investment cash flows, and includes adjustments for non-recurring charges (income), their non-monetary component and the related tax effects. See section 4.5 for additional details.

The (Net debt) / Net cash - Under IAS 17, indicates the consolidated (Net debt) / Net cash without incorporating the effects related to the application of IFRS 16. See section 6 for additional details.

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