CONSOLIDATED FINANCIAL STATEMENTS AS at 31 DECEMBER 2018 Azimut Holding S.P.A

CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2018 Azimut Holding S.p.A. 1 AZIMUT GROUP Annual report 2018 Page COMPANY BODIES 3 AZIMUT GROUP'S STRUCTURE 4 MAIN INDICATORS 5 MANAGEMENT REPORT 7 Baseline scenario Significant events of the year Azimut Group's financial performance for 2018 Key balance sheet figures Information about main Azimut Group companies Main risks and uncertainties Related-party transactions Organisational structure and corporate governance Human resources Research and development Significant events after the reporting date Business outlook Consolidated non-financial statement CONSOLIDATED FINANCIAL STATEMENTS 108 Consolidated balance sheet Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of changes in shareholders' equity Consolidated cash flow statement NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 116 Part A – Accounting policies Part B – Notes to the consolidated balance sheet Part C – Notes to the consolidated income statement Part D – Other information CERTIFICATION OF THE CONSOLIDATED FINANCIAL 254 STATEMENTS 2 COMPANY BODIES Board of Directors Pietro Giuliani Chairman Paolo Martini Co-Managing Director Andrea Aliberti Director Alessandro Zambotti Director Gabriele Blei (**) Director Marzio Zocca Director Marco Mandelli (*) Director Ester Aldighieri (*) Director Raffaella Pagani Director Antonio Andrea Monari Director Anna Maria Bortolotti Director Renata Ricotti Director Board of Statutory Auditors Vittorio Rocchetti Chairman Costanza Bonelli Standing Auditor Daniele Carlo Trivi Standing Auditor Maria Catalano Alternate Auditor Luca Giovanni Bonanno Alternate Auditor Independent Auditors PricewaterhouseCoopers S.p.A. Manager in charge of financial reporting Alessandro Zambotti (*) With effect from 24 April 2018 as per the Shareholders’ Meeting of 28 April 2016 (**) Co-opted on 18 December 2018 to replace Sergio Albarelli 3 AZIMUT GROUP'S STRUCTURE The Azimut Group operates globally in 17 countries and is comprised of the parent company, Azimut Holding S.p.A., and 86 subsidiaries. source: company figures updated to 31 December 2018 Note (1): controls the distribution companies M&O Consultoria, FuturaInvest and Azimut Brasil Wealth Management. Note (2): controls AZ Sinopro Insurance Planning. Note (3): Azimut acquired the residual 49% on 31 January 2018. Note (4): 30% held by Azimut Partecipazioni, wholly-owned by Azimut Holding, and merged into Azimut Capital Management SGR S.p.A., with effect from 01 January 2018, and 19% held by Azimut Financial Insurance S.p.A.. Note (5): controls 47 companies at 31 December 2018. Note (6): controls SDB Financial Solutions, effective from 8 January 2018. Year of 1989 2004 Year of flotation incorporation 17 50.8 Total assets Geographical coverage countries 4.4 Inflows for 2018 1,747 Financial advisors 748,454 Revenues for 2018 122,146 Net profit for 2018 946 Employees 9.53 Share price 4 MAIN INDICATORS 2012 2013 2014 2015 2016 2017 2018 Financial indicators (in millions of euros) Total income: 434 472 552 708 706 811 748 of which fixed 282 322 394 485 519 607 629 management fees EBIT 177 182 193 280 205 278 193 Net profit for the 161 156 92 247 173 215 122 year Operating indicators Financial 1,396 1,477 1,524 1,576 1,637 1,638 1,747 advisors 160 163 173 195 198 208 218 Customers thousand thousand thousand thousand thousand thousand thousand Assets in fund management 17.5 21.4 26.7 31.2 35.8 40.40.2 2 39.8 (billions of euro) Net inflows 1.6 3.1 4.8 4.5 3.5 4.2 2.3 (billions of euro) Customers' net weighted average 8.00% 4.20% 4.80% 1.60% 3.60% 2.20% -6.20% performance 5 Breakdown of assets under management 31/12/2018 Mutual funds 64% Discretionary portfolio management 21% AZ Life insurance 12% Advisory 3% 6 MANAGEMENT REPORT FINANCIAL MARKETS AND THE GLOBAL ECONOMY Background scenario The period of sustained growth of the world’s economy continued at a moderate pace in 2018. In the second half of the year, the first signs of weakening, which had already been detected in the economic indices for the first quarter of the year, became more acute. The concerns about the protectionist measures launched by the United States resulted in the imposition of duties on steel, aluminium and, therefore, on a wide range of Chinese products, followed by the adoption of countermeasures by China, which have already reduced the bilateral trade between the two countries. In China, economic growth slowed as well as the demand for goods produced abroad. For the time being, the US economy is growing strongly. In 2018, the average annual change in GDP was slightly below 3%. The short-term effects of the tax reform and the still favourable financial terms drove internal demand. Unemployment decreased to 3.9%, though the signs of pressures on remuneration remain limited. Inflation is back to 2%, but is still far from being a source of concern for the Federal Reserve. The central bank has continued to gradually increase official rates, with three hikes on the fed funds for a total of 75 basis points and to reduce its security portfolio by no longer reinvesting all the amounts that reached maturity. Conversely, the slowdown in growth was considerably strong in the Eurozone. In addition to the slowdown in foreign demand, the economy was affected by a net decrease in the demand for vehicles in the second half of the year, also attributable to the change in the emission standard. In the third quarter, the trend growth fell to 1.6% year on year and the economic indices highlighted a further slowdown in the last quarter. However, the employment level continued to rise, reducing unemployment to 7.9% of the workforce in November. Inflation remains modest and below the objectives of the European Central Bank. In June, the latter announced its intention of ceasing the net purchases of securities under the asset purchase programme (APP) at the end of December, after cutting purchases to 15 billion per month in the fourth quarter. Conversely, the reinvestments 7 upon maturity will continue also in 2019. The ECB also announced that the official rates are expected to remain unchanged throughout summer 2019. For the time being, the short-term rates remain negative and stable. With respect to Brexit negotiations, in November, the parties reached a consensus on the definition of the withdrawal agreement and on a political declaration related to existing relationships. However, so far, the UK parliament’s strong opposition to the agreement has made its ratification impossible. Major financial tensions characterised Italy’s debt in the two-month period May-June, coinciding with the negotiations for the formation of a new government, and between October and November, as part of the preparation of the 2019 budget law. In May, the spreads with respect to Germany rose quickly for all maturities. On 29 May, at the same time as the end-month auctions, characterised by low demand, the short-term spreads rose even above the long-term ones, which is typical of exceptional financial stress. These tensions reflected investors’ concerns about the new government’s willingness to continue to cut public debt, leading them, in some cases, to consider a significant risk of redenomination. However, at year end, the proposed budget law was significantly revised, with some changes that the European Commission deemed sufficient to avoid the immediate opening of an infringement procedure for excessive debt and such to bring the deficit to reassuring levels for investors. This resulted in a rapid drop of the BTP-Bund spread from over 320 basis points to approximately 280. However, the spreads remain well above the average for the January-April period, and reflect the risk of rating downgrades. Similarly to other European countries, also in Italy, the real economy lost momentum. The GDP’s trend growth fell to 0.7% year on year in the third quarter, with a 0.1% decrease on the previous quarter. The slowdown reflects the lack of the industrial sector’s contribution to growth as a result of the decrease in exports, household consumption, and, starting from the third quarter of 2018, in capital investments. In November, industrial production decreased considerably year on year. Business confidence indices continued to decrease throughout the fourth quarter of the year. However, despite the marked slowdown, the pace of economic expansion can still ensure a modest increase in employment and a 8 further reduction in the unemployment rate, which fell to 10.5% in November. The year-on-year change in the consumer price index was still modest (1.2% in December). International financial markets Following the increased uncertainties surrounding the growth prospects of the global economy, the long-term rates in the main advanced economies are down again, after the increase recorded at the beginning of October. Share prices further reduced given the high volatility. In the Eurozone, the risk premium slightly increased. In the fourth quarter of the year, the yield of the ten-year government bonds decreased in all the main economic regions. In the United States, this widespread decrease is accompanied by an expected more gradual adjustment of the normalisation of the monetary policy, while, in the United Kingdom, the uncertainties are also caused by the Brexit. In the fourth quarter, the interest rates on the 10-year German bonds decreased by 23 basis points, to 0.24%. The 10-year government bond-Bund yield spreads rose by approximately 20 basis points in Ireland and Spain and by roughly 10 basis points in Belgium, France and Portugal. In Italy, the spread decreased by 65 basis points on the high peak hit in mid-November thanks to the agreement between the Government and the European Commission: indeed, in mid-January, it was back to end-of-September levels (262 basis points).

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