Annual Report 2020 Salvatore Ferragamo Group Annual Report as at 31 December 2020 Salvatore Ferragamo S.p.A. Florence General information Registered office Salvatore Ferragamo S.p.A. Via Tornabuoni, 2 - 50123 Florence Legal information Authorized share capital 16,939,000 Euro - Subscribed and paid-up share capital 16,879,000 Euro Tax code and Florence Company Register no.: 02175200480 Registered with the Florence Chamber of Commerce under REA (Economic and Administrative Register) no. 464724 - Corporate website https://group.ferragamo.com/it/ Salvatore Ferragamo Group Board of Directors’ report Contents Letter from the Chairman 4 Board of Directors’ report on operations as at 31 December 2020 6 Corporate boards 10 Group structure 12 Group description 13 Main Stock Market indicators – Salvatore Ferragamo S.p.A. 14 1. The Group’s main income and financial results for the year 2020 16 2. Introduction 18 3. The Salvatore Ferragamo Group’s activities 18 4. The Group’s operating performance 26 5. Operating performance of the Parent company Salvatore Ferragamo S.p.A.. 48 6. Reconciliation between the Parent company’s net profit/(loss) for the period and shareholders’ equity and the consolidated values of the Group 57 7. Results of Group companies 58 8. Significant events occurred during the year 59 9. Information on corporate governance and ownership structure 70 10. Other information 75 11. Research and development 78 12. Transactions with related parties 78 13. Main risks and uncertainties 79 14. Significant events occurred after 31 December 2020 86 15. Macroeconomic situation and outlook 86 16. Separate Financial Statements as at 31 December 2020 of Salvatore Ferragamo S.p.A. – Proposal for approval 87 Consolidated Non-Financial Statement pursuant to Italian Legislative Decree 254/2016 88 2 | Annual Report as at 31 December 2020 • Salvatore Ferragamo Board of Directors’ report Consolidated Non-Financial Statement Consolidated Financial Statements Separate Financial Statements Consolidated Financial Statements as at 31 December 2020 218 Financial Statements 222 Consolidated Statement of Financial Position – Assets 222 Consolidated Statement of Financial Position – Liabilities and Shareholders’ Equity 223 Consolidated Income Statement 224 Consolidated Statement of Comprehensive Income 225 Consolidated Statement of Cash Flows 226 Statement of changes in consolidated shareholders’ equity 227 Explanatory notes to the consolidated financial statements 228 Comments on the main statement of financial position items (assets, shareholders’ equity and liabilities) 274 Comments on the main income statement items 302 Other information 311 Disclosure pursuant to art. 149-duodecies of the Issuers’ Regulation 327 Statement pursuant to article 154 bis of Leg. Decree no. 58 of 24 February 1998 (Consolidated Law on Finance) 328 Independent Auditor’s Report 330 Separate Financial Statements as at 31 December 2020 340 Financial Statements 344 Statement of financial position – assets 344 Statement of financial position – liabilities and shareholders’ equity 345 Income statement 346 Statement of comprehensive income 347 Statement of cash flows 348 Statement of changes in shareholders’ equity 349 Explanatory notes to the separate financial statements 350 Comments on the main statement of financial position items (assets, shareholders’ equity and liabilities) 388 Comments on the main income statement items 416 Other information 427 Disclosure pursuant to art. 149-duodecies of the Issuers’ Regulation 443 Statement pursuant to article 154 bis of Leg. Decree no. 58 of 24 February 1998 (Consolidated Law on Finance) 444 Report of the Board of Statutory Auditors 446 Independent Auditor’s Report 460 This document has been translated into English solely for the convenience of international readers. Salvatore Ferragamo • Annual Report as at 31 December 2020 | 3 Salvatore Ferragamo Group Board of Directors’ report Letter from the Chairman We will always remember 2020 for the personal and professional challenges it posed, but also for the solidarity, determination, resilience, and courage of many. The health emergency has changed the world and, as a result, also Companies and how these approach their business. The Covid-19 emergency and the lockdowns imposed in several geographies during the first half of the year significantly affected the Group’s business, causing a contraction in both revenues and margins. The industry we operate in was forced to rethink schedules and priorities. This was an overdue and useful exercise: for Salvatore Ferragamo, it made us even more aware that we must make a fresh start by putting sustainability at the center of our strategy. We have reimagined our way of working, putting the health of our staff first and striving to ensure everyone can work safely. Technology has allowed us to continue meeting, and the Ferrragamo teams have showed great dedication and willingness. I am grateful to our people for the passion and sense of belonging to the brand that they have showed even at the most challenging times. 4 | Annual Report as at 31 December 2020 • Salvatore Ferragamo Board of Directors’ report Consolidated Non-Financial Statement Consolidated Financial Statements Separate Financial Statements As the health emergency swept over us, Children’s Hospital in Florence. At such a innovation: this vision has guided us also we took action to support associations and particular and challenging historical moment, during this year as we discovered alternative, healthcare entities in the fight against the we made a point of supporting the young and regenerated and circular materials for our pandemic. Among other projects, we helped research efforts, which are key to a fresh start. collections. From organic silk to regenerated the Italian Red Cross with the renovation of nylon yarns, from recycled post-consumer Florence’s Fraticini Hospital, and supported In 2020, in line with the commitments of the cashmere to certified leather, we are the Tuscany Region by donating 50,000 Fashion Pact, we were the first Italian luxury combining creativity and experimentation units of hand sanitizer and pledging to company to set science-based targets to with the same enthusiasm that colored my manufacture and donate over 100,000 masks reduce our direct and indirect CO2 emissions father’s work. through our contract manufacturers. by 42% by 2029. This commitment makes us proud: a heartfelt thanks to all the teams The experience of our supply chain, comprised That said, the pandemic did not sway us from that worked together to define the targets of world-class artisans, has allowed us our commitments. and dedicate themselves every day to to continue providing our customers with achieving them. products that are the pinnacle of Italian We continued our partnership with the Meyer quality, beauty, and comfort. And we want to Foundation, supporting newborn screening Our history has taught us that at challenging start again from our products. activities and the planned expansion of the times, we can find solutions in creativity and Before the pandemic, our company had been working to consolidate its positioning, investing to bolster its digital presence, optimize physical stores, and communicate in a way consistent with the values that have always defined us. The pandemic has reinforced our vision, and we continue on this journey by focusing on the long-term strategy: we believe the key to the recovery is continuing to believe in ideas, commitment, and creativity, without ever forgetting our history and heritage. The main lesson we have learned is that the power of collaboration allows to grow and innovate, always responding positively to change. Ferruccio Ferragamo Salvatore Ferragamo S.p.A. Chairman Salvatore Ferragamo • Annual Report as at 31 December 2020 | 5 Board of Directors’ report on operations as at 31 December 2020 Salvatore Ferragamo Group Board of Directors’ report 8 | Annual Report as at 31 December 2020 • Salvatore Ferragamo Board of Directors’ report Consolidated Non-Financial Statement Consolidated Financial Statements Separate Financial Statements Board of Directors’ report on operations as at 31 December 2020 Corporate boards 10 Group structure 12 Group description 13 Main Stock Market indicators – Salvatore Ferragamo S.p.A. 14 1. The Group’s main income and financial results for the year 2020 16 2. Introduction 18 3. The Salvatore Ferragamo Group’s activities 18 4. The Group’s operating performance 26 5. Operating performance of the Parent company Salvatore Ferragamo S.p.A. 48 6. Reconciliation between the Parent company’s net profit/(loss) for the period and shareholders’ equity and the consolidated values of the Group 57 7. Results of Group companies 58 8. Significant events occurred during the year 59 9. Information on corporate governance and ownership structure 70 10. Other information 75 11. Research and development 78 12. Transactions with related parties 78 13. Main risks and uncertainties 79 14. Significant events occurred after 31 December 2020 86 15. Macroeconomic situation and outlook 86 16. Separate Financial Statements as at 31 December 2020 of Salvatore Ferragamo S.p.A. - Proposal for approval 87 Consolidated Non-Financial Statement pursuant to Italian Legislative Decree 254/2016 88 Salvatore Ferragamo • Annual Report as at 31 December 2020 | 9 Salvatore Ferragamo Group Board of Directors’ report Corporate boards Board of Directors (1) Ferruccio Ferragamo (8) Chairman Michele Norsa (6) (11) Executive Deputy Chairman Micaela le Divelec