Belluno Companies Registration Office No. 00240790253
Economic and Administrative Register No.: 52081

DE RIGO S.p.A.
Registered office in Villanova Industrial Zone, 12- 32013 Longarone (BL)
Share capital Euro 10,968,535.24 fully paid-in

Directors’ Reporton the 2022 separate and consolidated financial
statements
In implementation of Legislative Decree No. 32, Article 1, point c) of February 2, 2007, the company utilises
the option to present in a single document the consolidated Directors’ Report and the separate Directors’
Report, with a greater focus in the consolidated financial statements, where appropriate, upon matters ofsignificance for the companies included in the consolidation.
Therefore, the present consolidated Directors’ Report also contains the disclosure required by Article 2428
of the Civil Code, with reference to the separate financial statements of De Rigo S.p.A..

Corporate Boards
The Board of Directors of the parent company comprises 6 members:
Ennio De Rigo Piter
Emiliana De Meio
Massimo De Rigo Piter
Maurizio Dessolis
Michele AracriRoberto De Rigo

Chairperson
Vice-Chairperson
Executive Vice-Chairperson
Executive Vice-Chairperson
Executive Director
Director

The Board of Directors will remain in office until the approval of the 2023 Annual Accounts. As of thefinancial statements approval date, Director Roberto De Rigo has resigned.
According to the motions of June 6, 2018, the Chairperson assumes the broadest powers of ordinary andextraordinary administration, while the three Vice-Chairpersons, Emiliana De Meio, Massimo De Rigo Piterand Maurizio Dessolis and the Executive Director Michele Aracri have powers limited to ordinary
administration.
The Board of Statutory Auditors comprises 3 standing members:
Paolo Bifulco
Alessandro Bampo
Gianfilippo Cattelan
Federica Monti
Stefano Lodolo

Chairperson
Statutory Auditor
Statutory Auditor
Alternate Auditor
Alternate Auditor

The Board of Statutory Auditors will remain in office until the approval of the 2024 Annual Accounts.
Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 1Group operating structure
De Rigo S.p.A(Industrial and property
holding company withbrand management)

Production andWholesale Division(Wholesale business)

Retail Sales Division(Retail business)

Shareholders
At December 31, 2022, the shareholder structure of De Rigo S.p.A. comprised:
De Rigo Holding S.r.l.
Ennio De Rigo Piter
Roberto De Rigo
Giorgio De Rigo Piter
Others

96.889%1.922%
0.474%
0.474%
0.241%At December 31, 2022, De Rigo S.p.A. securities comprised only ordinary shares not listed on an official
market.
At the reporting date, De Rigo S.p.A. does not hold treasury shares.
The subsidiaries do not directly or indirectly hold shares of the parent company.

Operating conditions and developments
Dear Shareholders,
The organisation and solidity of our business model have been tested a number of times over the pastfiscal year, allowing us to once again confirm the Group's resilience and adaptability even in turbulent
times.
The early stages of the year were marked by of the outbreak of war between Russia and Ukraine. The
resulting tension in energy markets put further pressure on inflation, which had begun to rise in late 2021.
The impact on the supply chain in 2021 has faded gradually, to be replaced by a more significant increasein primary factor costs (above all in raw materials and energy), which in turn has impacted negatively on
margins.
The return of inflation caused uncertainty across a number of markets during the year, initially leading toa general slowdown in orders. Over time, and thanks to the innovations the Group has introduced to themarket, we have been able to recover from reduced sales, laying an increasingly robust and positive
groundwork for future sales growth.
Once again, we extend a sincere thanks to all Group employees, who are today the Group’s greatest
supplier of energy in achieving these fantastic results.
Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 2

This positive performance was once again shared across all the Group’s divisions.
A number of changes to working methods have become the norm within the Group, where employees
continue to perform some of their work remotely. This has led to a significant reduction in travel and inperson meetings, with the sole exception of those with customers who prefer to meet physically.
Our Wholesale division benefitted both from the launch of several new brands introduced by the Groupover the past two years and from the revival of the large Asian market, where the Southeastern markets
almost returned to normal. The recovery in the Chinese market, on the other hand, began in H2.
Our Retail division also saw a significant increase in sales in all three markets in which it operates (Spain,
Portugal and Turkey).
The positivity at the end of last year and the promising start to this bode well for an even more fruitful2023.

Economic environment
The European economy continued to see growth, with GDP rising 3.5% in 2022 after growth of 5.3% in
2021 (EU-27). These GDP levels confirm that the continent has emerged from the pandemic crisis byexceeding 2019 levels.
The American economy benefitted with GDP growth of 2.1%, while Chinese output grew 3.0%.
Despite further recovery in 2022, the international financial organisations forecast reduced growth for2023. This is a result both of the effects of the Russian-Ukraine war on the international economy andthe potential slowdown in the real economy caused by interest rate hikes designed to contain high levels
of inflation.

Group overview
Group consolidated income statement
As reported below in the reclassified Income Statement, consolidated revenues rose 7.4% to Euro 452.7
million (from Euro 421.6 million in 2021). At like-for-like exchange rates, the increase on 2021 revenues
would be 10%.
Wholesale division revenues increased 6.3% to Euro 239 million, from Euro 224.8 million in 2021. At likefor-like exchange rates, revenue growth over 2021 would have been 5.6%.
Net profit in the Retail division was up 8.4% to Euro 227.7 million, from Euro 210.1 million in 2021.
Adjusted EBITDA, calculated as the adjusted operating profit before amortisation and depreciation,
increased 3.2% to Euro 32.0 million, from Euro 31 million in 2021, with a 7.1% revenue margin. The
improved Adjusted EBITDA mainly stems from the continuous sales recovery in both the Retail andWholesale segments, not offset by a consequent increase in costs thanks to the cost-cutting policies
introduced by management over recent years. The careful management of collections and inventory has
allowed us to maintain high service standards, although significantly containing obsolescence related risks.

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 3

Adjusted EBITDA was Euro 22.5 million, compared to Euro 19.0 million in 2021, with a 5.0% margin (4.5%
in the previous year).
Net extraordinary and financial income of Euro 36.9 million was reported, compared to Euro 10.4 million in
2021. Specifically, the main effects are attributable to:i) In 2022, the Boots Opticians chain distributed a dividend of Euro 51.9 million to the Group.
ii) At the same time, the investment in Boots Opticians was partially written down by Euro 19.2 million
to reflect the correct level of equity.
v) Net exchange gains amounted to Euro 0.6 million, down from Euro 2.4 million in 2021.
The net result was a profit of Euro 48.1 million, up from Euro 27.4 million in 2021.
At December 31, 2022, the De Rigo Group reported a net cash position of Euro 119.9 million, increasingon Euro 100.9 million at December 31, 2021.
At December 31, 2022, the De Rigo Group reported a pension deficit of Euro 17.2 million, decreasing on
Euro 59.6 million at December 31, 2021.

The consolidated income statement reports the key operating figures (in thousands of Euro), reclassified
for an improved understanding of operating events:
NET SALES REVENUES

2022
452,6882021
421,561% Change
7.4%

Sold product cost

(190,991)(179,545)

6.4%

GROSS MARGIN

261,697

242,0168.1%

Advertising & promotion costs
Sales costs
General & administrative costs(31,068)(169,984)(38,123)(27,428)(162,874)(32,677)

13.3%
4.4%
16.7%

OPERATING COSTS(239,175)(222,979)

7.3%

ADJUSTED OPERATING PROFIT

22,522

19,037

18.3%

Interest income
Interest charges
Other extraordinary income and charges
OTHER REVENUES (COSTS)

722(1,363)37,53436,893608(1,532)
11,322
10,39818.7%-11.0%
231.5%
254.8%PROFIT BEFORE TAXES

59,41529,436101.8%

INCOME TAXES(11,193)(2,036)449.7%NET PROFIT BEFORE MINORITY INTERESTS

48,222

27,400

76.0%

(78)

39

-298.1%

48,14427,43975.5%

MINORITY INTEREST SHARE
NET PROFIT

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In order to more clearly present the operating result, in the income statement the effect was isolated ofnon-recurring and extraordinary costs incurred in the year related to the defined benefit pension fund, tothe non-consolidated investments, to the extraordinary write-downs of equity investments as a result of
Impairment tests, in addition to the usual exchange movement impacts.

Group consolidated revenues by region
The Group reports the following results by region:•

European revenues totalled Euro 346.6 million, up 7.6%. There was growth in all markets except
the United Kingdom, which contracted slightly. The greatest growth was reported by the Retail
division in both the Iberian Peninsula and Turkey.

•

The Americas revenues decreased slightly (-2.2%) to Euro 54.7 million, from Euro 56 million in
2021. At like-for-like exchange rates with 2021, revenues in this region would total Euro 48.5
million;•rest of the world revenues were up 11.5% to Euro 43.4 million, thanks above all to growth in Asiaand the Middle East, particularly in the United Arab Emirates, Hong Kong and India.

•

other revenues principally concern royalties collected by the Group on licenses granted to third
parties on the Police brand in categories other than eyewear. Part of the increase on the previous
year is also attributable to the release of the provision for returns in the amount of Euro 1.3 million
Euro and the donation to employees made by the De Rigo family for Euro 0.8 million.

Sales by region

2022

Europe (excluding Italy)

321.9

24.6

54.7

56.0

(1.2)

43.4

38.9

4.5

444.7

416.8

27.9

8.0

4.8

3.3

452.7

421.6

31.1

Rest of the world

Other revenues
Consolidated revenues

Change %346.6

The Americas

Total

Change

2021

7.6%
-2.2%
11.5%
6.7%
68.6%
7.4%

Consolidated Group revenues by business division
The following table outlines the financial highlights of the two divisions in 2022 and 2021 in millions ofEuro:

PRODUCTION AND SERVICEREVENUESEBIT BEFORE PENSION FUND
ACCRUAL

EBITDAGroup Divisions

2022

2021

Change %

2022

2021

Change %

2022

2021

Change %Production andwholesale

239.0

224.8

6.3%

11.5

13.2

-13.1%

8.6

8.7

-1.6%

Retail

227.7

210.1

8.4%

20.8

18.1

15.0%

14.3

10.7

33.6%

Inter-company
eliminations

-14.1

-13.4

4.9%

-0.3

-0.3

-6.4%

-0.4

-0.4

-4.2%

Total

452.7

421.6

7.4%

32.0

31.0

3.2%

22.5

19.0

18.3%

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

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Production and sale wholesale (Wholesale)
Wholesale division revenues were up 6.3% to Euro 239.0 million, compared to Euro 224.8 million in 2021.
Growth was evident across all of the Group’s branches. The markets contributing most to growth wereTurkey, the UAE, Brazil and the independent distributor channel.
The post-pandemic recovery in sales was most marked in sunglasses, where sales grew 13.7% while still
remaining below 2019 levels.
After the Group’s launch of new licensed brands in 2021 (Yalea, Philipp Plein, TUMI, Rodenstock, andAramis), 2022 also saw the inclusion of some new licenses, including Roberto and Just Cavalli, GAP, which
contributed to the Group’s sales from Q4 2022 only.
Retail sales
The Group Retail network at December 31, 2022 comprised the following sales points:

Directly owned stores

Stores under franchise

2022

2021

Change2022

2021

General Optica
Opmar Optik
Boots Opticians

229
67
383

224
65
387

5
2
-4

85
0
161

75
0
162

Total

679

676

3

246

237

Total

Change2022

2021

Change

10
0
-1

314

299

67

65

544

549

15
2
-5

9

925

913

12

The network of Group stores comprises: General Optica, the leading chain of opticians on the Spanish
market and owner of the Mais Optica brand, one of the main chains in Portugal; the Opmar Optik chain,
the second largest retailer in Turkey; Boots Optical Investment Holdings Limited, the second largest chainof opticians on the British market, in which the Group has a holding of 42% (consolidated indirectly at
Equity).
The retail sales of General Optica and Opmar Optik alone amounted to Euro 227.7 million, up 8.4% onEuro 210.1 million in 2021. At like-for-like exchange rates, Retail division revenues would have risen approx.
Euro 13.1 million (+14.6% on 2021) due to the weakening of the Turkish Lira.
Growth has been positive since Q2 2021, albeit with some uncertainty as the Russian-Ukrainian crisis
continues. The recovery in sunglasses sales, combined with sustained growth in prescription glasses andother product categories, have supported the increased market share.
The review of the Turkish chain’s business model not only protected it from the volatility of Turkey’s
macroeconomic situation, but also provided great impetus and dynamism to the entire local organisation,
enabling it to achieve significant growth in its customer base. Thanks to the actions taken on Turkish
market, the chain’s sales grew 152% in local currency terms. Unfortunately, the depreciation of the Turkish
Lira reduced the chain’s contribution to Group consolidated sales, bringing it to a still excellent +52%. The
numerous actions taken and particularly regarding the redefinition and management of the company’s
policy on operating costs allowed the chain to once again report an improved operating result on theprevious year.

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 6

Consolidated costs
The principal operating costs reported the following movements (in thousands of Euro as per the financial
statements):

Description

2022

2021

%
ChangePersonnel costs

134,906

126,163

6.9%

Raw materials, consumables and goods, adjusted by the change in theinventories of raw materials, consumables and goods and of the change ininventories of work in progress, semi-finished and finished goods.

164,482

154,254

6.6%

Service costs

89,55281,858

9.4%

Rents, lease and similar

28,12825,776

9.1%

11,66315,088-22.7%

6,481

7,962

-18.6%

435,210 411,101

5.9%

Amortisation, depreciation & write-downs
Provisions for risks, other provisions and other operating charges
TOTAL COSTS OF PRODUCTION ADJUSTED BY THE CHANGE IN
INVENTORIESThe movements in operating costs related to:
Personnel costs: +6.9%, mainly following the non-use of the social security schemes, which had beenutilised at some Group companies in 2021.
Raw material purchase costs and inventory changes: +6.6%, reflecting the general price increases
caused by inflation.
Service costs: +9.4%, mainly related to the increase in advertising and marketing costs on the basis of
the higher sales. Third-party processing costs also increased in response to the higher volumes generated
by good sales performance.
Costs for use of third party assets: +9.1%, mainly related to increases in rent caused by high inflation.
Amortisation, depreciation and write-downs: -22.7%, mainly related to the fact that the De Rigo
Rem goodwill amortisation process was completed in 2021.
Provisions for risks, other provisions and other operating charges: -18.6%, mainly related to thecomparison with the previous year, when an extraordinary provision to the returns reserve of Euro 1.1
million was recognised.

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 7

During the year, the Group undertook the following transactions with related parties:!

Financialreceivables

De Rigo Immobiliare

FinancialpayablesOtherpayablesRevenues

11

De Rigo Refrigeration
Srl
Amsterdam Properties
S.L.

Financialincome(charges)

Costs

71

1

3
224

BOOTS OPTICIANS*
Total

Trade
Other
receivables receivables

(3)
-

9

1,460
1,460

-

-

53,736

5

53,738300-* The chain Boots Opticians has in place an agreement with the company BBGR Ltd. for the supply and mounting of lenses and logistics management. Under thisagreement, De Rigo Vision invoices the majority of orders received by the Boots Opticians chain to the company BBGR Ltd., which, once the requested service has
been provided, invoices in turn Boots Opticians. Therefore, in order to provide a better representation for the reader, the items concerning BBGR are aggregatedwith those of Boots Opticians.
Due to a dispute with the company that began in 2018, the Group does not consider Sewon I.T.C. “as an associated company.” Company which owes a receivable ofEuro 3,990 thousand, which was fully written-down in 2019.

The receivables from De Rigo Holding S.r.l. are of a financial nature and concern other receivables fromthe parent company. Receivables and payables with other associates concern trade receivables.
The Group is involved in tax disputes in a number of countries. The most significant is in Italy, where theTax Agency, following the execution of audits, issued separate tax assessments for income taxes andpenalties relating to financial years 2008, 2009, 2010, 2011, 2012, 2013 and 2014 for a total of approx.
Euro 8.6 million and mainly regarding transfer pricing (the calculation of inter-company transaction prices).
The Company, considering itself to have acted correctly and in full compliance with applicable regulations,presented an appeal against all of the tax assessments to the competent Tax Commission and also
forwarded to the Agency international reports - Department of Finance and the Ministry for the Economy
and Finance - respectively for each of the EU countries involved in which the Group operates through abranch and for the 2008-2011 and 2012-2014 tax periods, subject to audit, separate applications for the
initiation of a mutual agreement procedure as per Article 6 of Convention 90/436/EC against double taxation(“MAP”).
Between 2019 and 2021, the Preliminary agreements and international disputes office of the Tax Agency
communicated to the Company that it had stipulated the following agreements with the competent tax
authorities:• France (for the years 2008-2014, the complete cancellation of the disputes regarding the years
2008, 2009, 2012, 2013 and 2014 and a more than significant reduction agreed in the assessment
for the years 2010 and 2011 concerning the transactions with its French branch);• United Kingdom (for the years 2008-2014, the complete cancellation of the disputes regarding theyears 2008, 2010, 2011, 2012, 2013 and 2014 and a more than significant reduction agreed in theassessment for the years 2009 concerning the transactions with its British branch);• Spain (the complete cancellation of the disputes for the years 2008-2014 concerning thetransactions with its Spanish branch);
In February 2020, the Tax Agency - Veneto Regional Section began a further audit on the years 2015, 2016
and 2017 which, following the COVID-19 restrictions, concluded - in September 2020 for 2015 only and inJune 2021 for the years 2016 and 2017 - with a request to increase the assessable base, mainly as a resultof Transfer Pricing matters, by approx. Euro 2.6 million.
In the two-year period 2021-2022, the Tax Agency - Veneto Regional Section, also issued separate tax
assessments for income taxes and penalties relating to financial years 2015 and 2016 for a total of approx.
Euro 0.8 million. As in previous years, the Company filed appeals against the 2015 and 2016 tax
assessments with the relevant Tax Commission. It also filed petitions to begin a mutual agreement
procedure against double taxation (“MAP”) with the International Relations Section of the Finance
Department of the Ministry for the Economy and Finance regarding Greece (for the years 2015 and 2016),
Japan (for the years 2015 and 2016) and Hong Kong (for the year 2016 only).

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page 8

In 2022, the Preliminary agreements and international disputes office of the Tax Agency communicated to
the Company that with the relevant Japanese tax authorities it had agreed a significant reduction in theassessments related to the 2015 and 2016 fiscal years concerning the Company’s transactions with its
Japanese branch.
Also during July 2021, following a tax audit for the years 2016 and 2017 carried out by the German tax
authorities in relation to the German subsidiary De Rigo Vision DACH GmbH, the Company also filed an
additional application with the Italian tax authorities for MAP utilisation in Germany.
In December 2022, the Preliminary agreements and international disputes office of the Tax Agency
announced that it had agreed with the relevant German tax authorities a total reduction of approximately
2.7 million Euro in the Company’s 2016 and 2017 taxable income.
As a result of this agreement, in January 2023 the Company filed for reimbursement for a total of Euro 0.8
million.
In relation to the agreement reached between the Italian and German tax authorities, we note that theGerman subsidiary - in place of the parent company - will be subject to withholding tax on the agreed
amount.
After the withholding has been paid, the Company may file a reimbursement claim with the German tax
authorities for the full amount paid as withholding. In pursuit of its defence strategy regarding Transfer
Pricing, in the years 2017-2019 the Company also presented to the competent tax authorities separate
applications for a Preliminary Agreement Procedure (“PAP”) on a bilateral basis for some of its European
subsidiaries (France, Spain, Germany).
To date the PAPs with Spain for the years 2018-2022 and with France for the years 2021-2023 have been
finalised. The application to renew the APA for Spain was filed in 2022.
On the basis of the outcomes of the aforementioned MAP and APA and considering that it has charged tothe income statement payments equal to a third of each challenge received for the initial three years
declared (2008-2009-2010), the Company considers the risks provision accrued in 2022 as appropriate tocover any liabilities which may arise with regards to the tax disputes. From this perspective, we note thedecision not to record in 2022 any effect of the reimbursement petition filed following the MAP agreementin Italy and Germany related to the years 2016 and 2017.

Non-recurring and financial management and consolidated investments
Extraordinary and financial management reported net income of Euro 36.9 million, compared to charges ofEuro 10.4 million in the previous year.
This improvement is mainly due to the distribution of the dividend by Boots Opticians for Euro 51.9 million
and the consequent Euro 19.2 million write-down of the Group’s investment in this company (compared toa revaluation of Euro 9.7 million in 2021). This was carried out to better express the value of the Group’s
share of equity.
A further contribution comes from the revaluation of the Euro 4.7 million investment in De Rigo Brasil, on
which the Group had previously recognised a risk for loss coverage. This was offset by the Company’s
strong results in the last two years.
Net exchange losses of Euro 0.6 million were reported, compared to net gains of Euro 2.4 million in 2021.

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 9

The Group net financial position, in thousands of Euro, at year-end was as follows:
2022
Bank deposits
Cash in hand and similar
Cash and cash equivalents

Financial receivables from parent company
Shareholder loan receivables (payables) (within one year)
Bank payables (within one year)
Receivables (payables) to other lenders (within one year)
Advances on foreign payments
Short-term portion of loans
Short-term financial receivables (payables)
Short-term net financial position
Bonds and convertible bonds (beyond one year)
Shareholder loans (beyond one year)
Bank payables (beyond one year)
Payables to other lenders (beyond one year)
Advances on foreign payments
Long-term portion of loans
Financial receivables
Net financial position - medium/long-term
Net Financial Position

2021

Change84,95071,35913,591

1,390

1,757

(367)

86,33973,115

13,22435,02935,02900(1,234)(6,401)

5,167

(24)

(394)

370

-

-

-

-

33,77028,234

5,537

120,110

101,349

18,761

-

-

-

-

0

(170)

170

(300)

(285)

(15)

-

-

-

-

164

0

164

(136)

(455)

319

119,974

100,894

19,080----At the end of 2022, the Group reported a net cash position of Euro 119.9 million, compared to Euro 100.9
million in the previous year. Operating activities generated cash flows of Euro 40.7 million, compared toEuro 40.3 million in the previous year, while working capital management absorbed resources of Euro 24.2
million, compared to a generation of Euro 11 million in the previous year. The Group invested Euro 13.4
million, compared to Euro 10.9 million in the previous year, particularly for the opening of new sales points
in Spain and the restructuring of existing sales points, in addition to the development of the Group IT
systems. In the same period, the Group made fixed asset disposals of Euro 0.4 million.

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 10

The balance sheet reclassified to net capital employed is reported below, in thousands of Euro:

2022
Trade receivables

2021

Change57,12354,9642,159

49,49757,744(8,246)

97,94175,942

21,999(113,384)
91,178(117,393)
71,257

4,009
19,921

66,11463,366

2,749

180

55

125

21,192

41,845(20,654)B) Net fixed capital(75,012)
12,474(99,905)
5,361

24,893
7,113

A+B= Net capital employed

103,651

76,61827,033(119,974)(100,894)(19,080)

176,767

149,329

27,438

-

-

840

745

95

D) Closing shareholders’ equity

48,144
223,626

27,439177,513

20,705
46,113C+D = Total financial debt (cash) and shareholders’ equity

103,651

76,61827,033

Other receivables
Inventories
Current non-financial payables

A) Working capital
Net tangible and intangible assets
Financial assets
Investments
Non-current provisions and non-financial payables

C) Net financial debt
Opening Group shareholders’ equity
Other shareholders’ equity changes
Treasury shares(2,126)-

Non-controlling interests capital and reserves
Group net profit

Trade receivables are substantially in line with the previous year, despite the increase in revenues andthanks to the close management of collections, which has kept in solvencies under control.
Inventories slightly increased to deal with the higher level of sales.
The decrease in the value of equity investments is mainly related to the write-down of the investment in
the associate Boots Opticians to adjust to the value of its equity following the payment of an extraordinary
dividend.
Trade payables increased due to the greater procurement in the second half of the year compared to theprevious year, linked to the increase in sales.
The key earnings indicators are reported below (in millions of Euro):
Debt coverage index
The Group has a positive net financial position.

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

page 11

Return on sales (ROS):
2022

2021

EBIT
Revenue

22.5
452.7

19.0
421.6

ROS %

5.0%

4.5%

Return on investment (ROI):
2022
EBIT
Net Capital Employed
ROI %

2021

22.5
103.6

19.0
76.6

21.7%

24.9%

Return on equity (ROE):
2022

2021

Net result
Net equity

48.1
222.8

27.4
176.8

ROE %

21.6%

15.5%

Consolidated tax charge
The Group reported an effective average tax rate of 18.8%, compared to 19.6% in the previous year.
For further information, reference should be made to the Explanatory Notes.

Social, political and trade union developments
The intense commercial activity across the world has allowed the Group to resume normal operations,
without a repeat of any of the work stoppages applied at various Group companies in the previous two
years.
In 2022, normal recruitment and induction of new employees resumed in order to cope with the increased
operational activity, employee retirements, and increased employee turnover recorded at different levels
and functions.
The difficulties in recruiting the staff required by the Group to fill vacant positions, along with inflationarypressure, will no doubt lead to increases in labour costs in the coming years.

Personnel
The average Group workforce at December 31, 2022 and 2021, broken down by category and in FTE, isreported below:
2022
Executives
White-collar
Blue-collar
Other
Total

2021
47
2,468
555
185
3,255

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

Changes
47
2,420
577
114
3,158

48
(22)
71
97

page 12Other information
In accordance with Article 2428, paragraph 2, we report the following:

Research and development
The Group has always invested in aligning its production processes with the most advanced technologicalstandards. The limited amount of technological developments on the market in recent times have restricted
the need for significant industrial investment.
IT investments are increasingly important for our Group. The replacement of IT systems was extended
also to other Group companies, which currently largely operate through a centralised SAP system. The
activities to improve the level of computerisation of the sales networks in the countries in which the Group
operates directly continued again in 2022, especially in the United States.
The intensive production research and development activities did not result in the capitalisation of costs,
as mainly concerning individual product models, for which their utility is limited to the period of productionof the model and is generally concentrated in a period of less than one year, or for the completion of plantand machinery for which these operations are outsourced and included in the acquisition cost of the asset.

Disclosures as per Article 2428, paragraph 2, point 6-bis, of the Civil CodePursuant to Article 2428, paragraph 2, point 6-bis of the Civil Code, information relating to the use offinancial instruments is detailed below as such information is relevant for a valuation of the company’s
equity and financial position.
Company management seek to hedge risks through the use of various types of existing beneficial financial
instruments, to ensure that currency, interest rate and price risk are knowledgeably managed. Where risks
may be covered through insurance, the Group undertakes the necessary policies. With regards to currency
risks, the company usually hedges its currency surplus/deficit so as to minimise the economic effect.
Specifically, these technologies include:

Credit Risk
The credit risk deriving from normal Group operations with commercial counterparties is managed andcontrolled within the procedures for the allocation and monitoring of client credit standings. Credit
management activities are coordinated through reporting and periodic meetings concerning all Group
companies.
The amount and measurement criteria for the Doubtful debt provision at the reporting date are outlined in
the Explanatory Notes.
At the reporting date, any significant concentrations of credit risk have been monitored, with appropriate
write-down provisions established where necessary. The pandemic emergency has, however, created ahighly unpredictable economic environment, making financial statement measurements difficult. The Grouphas increased the monitoring of receivables in order to anticipate any insolvency situations which may arise
as a result of the emergency.
At the date of the approval of the financial statements, the Group reports that its customers ability tocomply with contractual payment terms is normal. This did not result in a significant increase in the risk
level. However, it cannot be excluded that continuing inflation, with high interest rates and potentiallydrawn-out effects of the Russia-Ukraine crisis, may lead to a higher Group customer insolvency rate thanconsidered in the assessments made by management when allocating sufficient resources to offset delayedor even non-payment.
Over the past two years, the Group has made greater recourse to credit insurance policies for its customers
as it seeks to mitigate any impact in the event of major insolvencies.

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Liquidity and cash flow risk
The majority of Group receivables are short-term. For some receivables for which late payment wasconsidered as a potential insolvency indicator, the Group has already provisioned for the relative risk. At
the reporting date, the Group does not have significant exposures which may compromise its liquidation
capacity.
The following is also noted:•••

debt instruments or other lines of credit to service liquidity requirements are in place;other sources of financing exist;
there is no significant concentration of liquidity risk, either from financial assets or the sources offinancing.

Due to the potential recurrence of the COVID-19 pandemic, it may not be excluded that the Group’s
operating liquidity is significantly impacted.

Market risk
A sensitivity indication at the reporting date is provided below, highlighting the effects of possible changes
on the income statement in relation to the significant risk variables for each of the following components:• interest rate risk: the Group is exposed to interest rate risk from limited financial payables to credit
institutions. As this debt is indexed to the Euribor rate, any change results in a positive or negative
impact on the income statement. Management consider that the exposure to this risk is marginalin comparison to the amount of business generated.
• currency risk: the Group undertakes commercial transactions (purchase and sale of goods) incurrencies other than the Euro (principally the US Dollar, GB Sterling, Brazilian Real, Turkish Lira,
Chinese Renminbi and Japanese Yen). The currency hedging policy therefore seeks to minimise
the differences generated between the budget exchange rate and that relating to commercial
transactions for the purchase or sale of goods and services in foreign currencies (receipts or
payments). Sudden depreciations can, however, affect foreign currency balances not hedged
against the risk of exchange rate fluctuations, particularly in those countries where the cost ofhedging makes it difficult to set up a continuous exchange rate risk hedging policy. The derivative
instruments utilised by the company to hedge currency risk principally concern options and forward
contracts.
• price risks: very few raw materials utilised by the company have historically reported significant
price changes. These changes do not have significant impacts on the income statement.
• commercial risk: inflationary pressures in several markets, along with rising interest rates, directly
affected consumption levels in a number of markets. The continuation of these effects for a periodof many months may have a significant impact on the consumption of the products distributed by
our Group, as a result of a decreased need to purchase, with a consequent extension of the
repurchase period, in addition to a drop in volumes from the difficulties in reaching sales points
during the periods in which these rules are applied.

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page 14

The environment
The Group has always operated in compliance with environmental regulations, taking all action necessary
to align production standards with those required by the applicable regulations.
Specifically, as regards the production process, this has involved the introduction of new eco materials,
such as bioplastics, recycled polymers and bio-based materials. Recycled materials and natural-origin
polymers have also been adopted for packaging.
A focus on the environment has also led to improved waste collection, also increasing the types of waste
collected separately. Acetate and metal scraps are reused by reintroducing them into the production
process. The goal of reducing waste was also pursued by eliminating plastic bottles, which were replacedwith drinking fountains.
Finally, we note that thanks to the plant’s photovoltaic system, energy consumption has been improved
through self-production, improved efficiency and usage monitoring. This has led to the achievement ofsignificant CO2 emission reduction targets.

Subsequent events and outlook
The initial months of 2023 confirmed the strong development of commercial activities in a number ofregions, allowing the Group to once again commit to the targets indicated in this year’s budget. Recovery
has been uneven, however, and in some areas - particularly in Central European markets - economic
tensions caused by the Russia-Ukraine conflict and rising interest rates continue to put pressure on
consumption levels. Tourist flows remain low compared to 2019, particularly in Asia, which continues tohave a negative impact on travel retail-related sales.
The gradual rise in interest rates has also had an effect on the long-term yield curve, leading to a visible
reduction in pension liabilities which, along with the extraordinary contributions made by the Group, haveresulted in a decrease in the deficit below the level provisioned in the financial statements. This suggeststhat 2023 could potentially benefit from a complete elimination of the deficit and a partial release of therisk provision for the English pension fund.
During the year, all necessary steps were taken to integrate the Rodenstock Group’s Eyewear division. Fullintegration of the division is expected in the middle of this year.
In the weeks before the closing of these financial statements, the Shareholders’ Meeting approved the
distribution of an Extraordinary Shareholders’ Meeting dividend of Euro 95.3 million, largely to the parent
company De Rigo Holding S.p.A., consisting of Euro 57.9 million in cash and Euro 35.2 million by offsetting
an intercompany receivable from the parent company.
When distributing the extraordinary dividend, the Company negotiated and signed a medium-term loan ofEuro 60 million with a bank syndicate comprising Intesa Sanpaolo, Unicredit, BNL Paribs and Banco BPM.
The loan has a term of five years and includes an amortising portion and a bullet portion.
In February 2023, a powerful earthquake struck part of the southeastern Turkey. The Group operates inthat area through a network of stores under the Opmar Optik brand. The earthquake rendered buildings
housing three of the Group’s stores inaccessible, and the Group therefore ceased operations in that area.
Employees at the three affected outlets and members of their families who were among the people
displaced were relocated by the Group to nearby areas, enabling them to find shelter and return to work.
As yet it is not known whether the closed stores will be able to resume normal operations.

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page 15

Parent company De Rigo S.p.A. overview
Parent Company Income Statement
Parent company revenues of Euro 6.7 million compared to Euro 5.5 million last year, mainly due to theincrease in royalties on the active licenses of the Police brand.
EBIT amounted to Euro 5.1 million, compared to Euro 3.8 million in the previous year.
The net result was a profit of Euro 26.1 million, compared to Euro 4.9 million in 2021, mainly due to thedividend paid by General Optica.
The income statement reports the key operating figures of the parent company De Rigo S.p.A. (inthousands of Euro), reclassified for an improved understanding of operating events:
2022
NET SALES REVENUES%
Change

2021

6,713

5,545

21.1%

Sold product cost

(285)

(287)

-0.7%

GROSS MARGIN

6,428

5,258

22.3%

Advertising & promotion costs
Sales costs
General & administrative costs
OPERATING COSTS

(110)
(13)
(1,255)(1,378)(6) 1664.0%
(13)
0.0%
(1,419)-11.5%(1,438)
-4.2%

EBIT

5,050

3,820

32.2%

Interest income
Interest charges
Other non-operating income (charges)
OTHER REVENUES (COSTS)

222
(16)
22,64622,853

97
(10)
2,376
2,463

129.5%
63.2%
853.3%
827.9%PROFIT BEFORE TAXES

27,903

6,283 344.1%

INCOME TAXES(1,846)(1,314)

NET PROFIT

26,057

4,969 424.4%

40.5%

Costs of the Parent Company
The principal operating costs reported the following movements (in thousands of Euro as per the financial
statements):
Description

2022

2021

% Change

Personnel costs

0

0

0.00%

Raw materials, consumables and goods, adjusted by the change in the inventories of raw
materials, consumables and goods and of the change in inventories of work in progress,
semi-finished and finished goods.

11-13.2%

Service costs
Rents, lease and similar

1,231

Amortisation, depreciation & write-downs

360

366

-1.5%

Provisions for risks, other provisions and other operating charges

112

281

-60.3%TOTAL COSTS OF PRODUCTION ADJUSTED BY THE CHANGE IN INVENTORIES

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

1,113
-

1,705

10.6%
-

1,762

-3.2%

page 16

Service costs increased 79.2% on the previous year, mainly due to the higher marketing contributions
granted to customers.
The other accounts were substantially in line with the previous year.
During the year, the company undertook the following transactions with related parties:
Trade
Receivables
De Rigo Vision S.P.A.

Trade Payables

452

General Optica Internacional
S.A.
Derigo Ve Opmar Optik Ticaret
Anonim Sirketi

261

Financialliabilities

Revenues

55,052

261

14

16

1,004

4

35,193464

261

Purchases

2,975

12

De Rigo Holding Srl
Total

Financial
Receivable
s

1,641

91,249

-

4,634

276

Financial management and investments of the parent company De Rigo S.p.A
Net financial income of Euro 206 thousand is an increase on the previous year.
Extraordinary items in 2022 mainly include a dividend of Euro 22.7 million, while in 2021 we included a
dividend of Euro 2.1 million.
At December 31, 2022, De Rigo S.p.A. reported a net cash position of Euro 89.6 million, compared to Euro
64.4 million in 2021.
2022
Bank deposits
Cash in hand and similar
Treasury shares
Cash and cash equivalents
Bonds and convertible bonds (within one year)
Shareholder loans (within one year)
Bank payables (within one year)
Payables to subsidiaries (within 12 months)
Financial assets from parent companies
Short-term portion of loans
Financial assets from subsidiaries
Short-term financial receivables (payables)

Short-term net financial position
Bonds and convertible bonds (beyond one year)
Shareholder loans (beyond one year)
Bank payables (beyond one year)
Other lenders (beyond one year)
Advances on foreign payments
Long-term portion of loans

Directors’ Report on the 2022 separate and consolidated financial statements - Draft

2021

Change

58

91

(33)

1
-

1
-

0
-

59

92

(33)

-

-

-

(261)

(23,247)

22,98635,029-35,029-54,73252,5182,214

89,50164,30025,201

89,56064,392

25,168----page 17

Financial receivables
Net financial position - medium/long-term
Net Financial Position-

89,560-64,392-

25,168The balance sheet reclassified to net capital employed is reported below, in thousands of Euro:
2022

2021

ChangeTrade receivables

1,595

1,160

435

Other receivables
Inventories

1,384
-

399
-

984
-

Current non-financial payables(1,813)

(902)

(911)

A) Working capital

1,165

658

508

Net tangible and intangible assets

2,300

2,650

(350)

1,164
206,618453
206,618

711
-

(334)

(354)

20

B) Net fixed capital

209,748

209,366

381

A+B= Net capital employed

210,913210,024889C) Net financial debt

(89,560)(64,392)(25,168)

Opening equity
Treasury shares
Minority interest capital and reserves

274,416-

269,447-

4,969-

Net profit for the year

26,057

4,969

21,088D) Closing shareholders’ equity

300,473

274,416

26,057

C+D = Total financial debt (cash) and shareholders’ equity

210,913210,024

889

Financial assets
Investments
Non-current provisions and non-financial payables

For further information, reference should be made to the Explanatory Notes.
The key earnings indicators are reported below (in millions of Euro):
Debt coverage index
The company has a positive net financial position.

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page 18

Return on sales (ROS)
2022

2021

EBIT
Revenues

5.1
6.7

3.8
5.5

ROS %

75.2%

68.9%

Return on investment (ROI)
2022

2021

EBIT
Net Capital Employed

5.1
210.9

3.8
210.0

ROI %

2.4%

1.8%

Return on equity (ROE):
2022

2021

Net result
Net equity

26.1
300.5

5.0
274.4

ROE %

8.7%

1.8%

Parent Company tax charge
The company reported an effective average tax rate of 6.6%, compared to 20.9% in the previous year,
mainly as a result of different tax treatment of the dividend received.

Human resources
The company did not have any employees in the years 2022 and 2021.

Processing of personal data
The Company, supported by outside consultants, substantially completed the project for alignment with
the new European General Data Protection Regulation (“GDPR” – Regulation 2016/679), entering into force
from May 26, 2018.

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Further information
No atypical or unusual transactions were undertaken with related parties.
With regards to any investments held by Directors, Statutory Auditors or General Managers, reference
should be made to the Explanatory Notes.
The information provided sets out a true, balanced and exhaustive analysis of the company’s position,
performance and operating results, overall and among the various sectors in which it operates, also throughsubsidiaries.

Proposal for the approval of the financial statements and theallocation of the net profit
It is proposed that the Shareholders’ Meeting allocates the net profit of the parent company De Rigo S.p.A.
of Euro 26.1 million to the extraordinary reserve.

The Chairperson of the Board of Directors

Ennio De Rigo Piter

The undersigned ENNIO DE RIGO PITER, Chairperson of the Board of Directors of the company De Rigo S.p.A.,
declares that the present electronic document conforms to that transcribed and signed in the company’s accounting
records.

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