F I L A Fabbrica Italiana Lapis ed Affini S p A : FILA Group FY2023 Sustainability Report

20

23

SUSTAINABILITY REPORT

CONSOLIDATED NON-FINANCIAL STATEMENT

As per Legislative Decree No. 254/2016

Issuer: Fabbrica Italiana Lapis ed Affini S.p.A. - Website: www.filagroup.it

Reporting period: 2023

Report approval date: March 19, 2024

CON

TENTS

F.I.L.A.'s Manifesto

Letter to the Stakeholders

Introduction

2022 Sustainability Report Overview

1. Identity and profile

1. The F.I.L.A. Group
2. 1. Purpose, Vision, Mission and Values
   2. Responsible business conduct
3. Group structure and size
4. 1. Group structure: a truly global presence
   2. Production sites
   3. Direct economic value generated and distributed
5. The history of the F.I.L.A. Group: successful mergers and acquisitions
6. 1. History of the F.I.L.A. Group
   2. Successful mergers and acquisitions

2. Strategy, business model and sustainability

1. F.I.L.A. Group Strategy and Business
2. 1. Integrated strategic plan
   2. Vertically integrated business model
3. The F.I.L.A. Group and Sustainability
4. 1. Sustainability plan and Sustainable Development Goals - SDGs
   2. Socio-environmentalpolicies and guidelines of the Group
5. Materiality analysis and stakeholder engagement
6. 1. F.I.L.A. Group materiality
   2. Stakeholder engagement initiatives
7. Group organisational model
8. 1. Corporate governance model
   2. Geographical organisation
   3. The value chain
   4. Brands and products
9. Corporate Governance and risk management
10. 1. Governance structure
    2. Board of directors
    3. Board of statutory auditors
    4. Internal audit
    5. Identifying and controlling risks
    6. 231 Model and supervisory board
    7. Information technology security

CONTENTS 2/168

1. Material environmental topics
2. 1. Respect for the environment and material topics for F.I.L.A.
   2. 1. Environmental protection
      2. Environmental policies
      3. Material environmental topics
   3. Use of raw materials and the circular economy
   4. Consumption of energy resources
   5. Atmospheric emissions and climate change
   6. Water consumption
   7. Other environmental topics
   8. 1. Waste management
      2. Environmental protection investments
      3. Compliance with environmental standards
3. Material employment topics
4. 1. Respect for the individual and material topics for F.I.L.A.
   2. 1. Composition of the workforce
      2. Employee welfare and well-being
      3. Personnel turnover
      4. Remuneration
      5. Training
      6. Industrial relations and job protection
   3. Equal opportunities
   4. Occupational health and safety

CON

TENTS

5. Material social topics

1. F.I.L.A.'S social role and material social topics
2. Product quality and safety
3. Supplier relations
4. 1. Supplier assessment and management
   2. Green procurement
5. Protecting diversity in local communities
6. Group social responsibility efforts
7. 1. F.I.L.A. S.P.A. Social responsibility in italy.
   2. Social activities in italy
      of industria maimeri through the maimeri foundation
   3. Social activities around the world

1. Material human rights topics
2. 1. Respect for human rights
   2. Freedom of association and collective bargaining
3. Material topics relating to combatting corruption
4. 1. Anti-corruption
   2. Measures to combat active and passive corruption
   3. Other material topics
      in combatting corruption Annex

CONTENTS 3/168

Annex

1. Methodological note
   A.1 Reporting model
   A.2 Reporting and consolidation process
   A.3 Materiality analysis
   A.4 Reconciliation table with Legislative decree no. 254/16
   A.5 Reporting scope
   A.6 Internal control and independent

audit

1. Group companies included in the reporting scope by reporting topic
2. GRI Content Index
3. Tables listing GRI indicators and information
4. The F.I.L.A. Group and the european taxonomy
5. Independent Auditors' Report

FAB

BRICA

ITALIANA

LAPIS

ED AFFINI

F.I.L.A.'s Manifesto

Creativity is our challenge, colours and paper are our talents.

Proudly Italian, we have crossed the oceans, reaching 150 countries in five continents, and think of ourselves as citizens of the world. We have developed together with you, taking inspiration from diverse cultures, and visiting millions of homes, schools, offices and workshops with over 25 iconic brands.

Our history is built on our passion for art and creativity, taking consistency and transparency as guiding principles that we have never ceased to follow.

Excellence is our mission. Production is a vocation that takes place in over 20 facilities across the world.

contents

FABBRICA ITALIANA LAPIS ED AFFINI 4/168

We have been at your side for generations, with thousands of products for writing, designing, colouring, modelling and painting. These irreplaceable tools feed an enormous creative passion and transform your actions into ideas and visions, creating indelible marks of life.

Ours is a love story that has lasted a century, shaped by millions of hands. A blank page waiting to be written on.

Let's colour the future. Since 1920.

contents

FABBRICA ITALIANA LAPIS ED AFFINI 5/168

LETTER TO THE STAKEHOLDERS

FAB

BRICA

ITALIANA

LAPIS

ED AFFINI

Dear Stakeholders,

We are currently experiencing a period of significant uncertainty, within a global economic environment marked by geopolitical crises, loss of human life on multiple fronts, destruction, and unpredictability.

Our sympathy goes out to all those who are suffering and have suffered from the consequences of the ongoing conflicts. This year, we provided tangible assistance by donating colouring and drawing products to the Italian Red Cross for distribution to those in needs in Ukraine.

Even though the pandemic emergency has ended, the global situation remains complex. The war in Ukraine and the more recent one in the Middle East are influencing global dynamics, leading to inflationary pressures in most economies. These conflicts are also affecting globalisation, commodity and energy prices, security and operational logistics, but most importantly, people's safety.

The F.I.L.A. Group has remained dedicated to accomplishing its Sustainability Plan objectives, as set out in its 2021-2025 Strategic Plan, despite the challenging circumstances. The Group has continued to allocate resources, including personnel and investments, towards achieving these goals.

We approved a multi-year investment plan that will reduce direct CO2 emissions by over 6,000 tonnes per year. This will be achieved through the construction of a biomass plant at our Canson SAS (France) paper mill. Additionally, the first phase of work began at our Rufina plant, which will be outfitted with a photovoltaic system once all necessary assessments are complete. These investments complement the energy efficiency projects outlined in the Sustainability Plan, demonstrating the Group's commitment to reducing CO2 emissions and water withdrawals, with initiatives scheduled to be fully operational by 2024. We continue to make progress obtaining certifications for our plants in the areas of health and safety (ISO45001) and the environment (ISO14001). Meanwhile,

our workforce remains almost unchanged compared to last year (11,352 in 2022 and 11,794 in 2023).

We remain committed to supporting education and culture through various initiatives. These include conferences with universities (Culture, Art, and Industry Conference organised by the Fondazione Maimeri in collaboration with the University of Milan), museum support (the Louvre Museum in Paris, Biennale Education Architettura, MU.BA Museo dei Bambini in Milan, Città della Scienza in Naples, and the Associazione MUS.E in Florence), and assistance for schools and teachers (e.g. Dixon Kunshan with the Cheng County Education Bureau, and Dixon Ticonderoga with the Kids In Need Foundation National Resource Center). We also support scientific research (Gold for Kids project with the Fondazione Umberto Veronesi), healthcare efforts (DOMS in India), sustainable fashion (designers such as VIN + OMI supported by Daler Rowney), and engage in institutional activities in Italy in partnership with organisations such as the Italian Red Cross and other volunteer groups.

contents

FAB

BRICA

ITALIANA

LAPIS

ED AFFINI

2023 came to a close with the successful listing of the Indian subsidiary, DOMS Industries Limited, on the National Stock Exchange of India. F.I.L.A. retained a 30.6% shareholding in the subsidiary's share capital. The effects of the Indian listing allowed the Group to significantly reduce the leverage ratio to support future growth objectives.

We continued to engage in open and constructive dialogue with our stakeholders, welcoming suggestions to further our path of continuous improvement.

The objective of the 2023 Sustainability Report is to improve awareness of the Group's environmental, social, and governance initiatives. This document presents an overview of the Consolidated Non-Financial Statement, along with other relevant information.

6/168

GIOVANNI GORNO TEMPINI

Chairperson of the

Board of Directors

of F.I.L.A. S.p.A.

MASSIMO CANDELA

Chief Executive Officer

of F.I.L.A. S.p.A.

INTRODUCTION

contents

FABBRICA ITALIANA LAPIS ED AFFINI 7/168

FAB

BRICA

ITALIANA

LAPIS

ED AFFINI

The Sustainability Report (hereinafter also the "Report") of Fabbrica Italiana Lapis e Affini S.p.A. (hereinafter also "F.I.L.A. S.p.A.", "F.I.L.A.", "the Company", or "the Parent") also constitutes a "Consolidated Non-FinancialStatement" hereinafter also the "NFS" or "Statement", which has been prepared in accordance with Legislative Decree No. 254/2016.

Based on engagement activities that involved both internal and external stakeholders, this Report describes the results achieved for 2023, in addition to the innovations, projects, associated risks, approach, and policies adopted in terms of sustainability by the F.I.L.A. Group ("hereinafter the Group") in relation to economic, environmental, and social performance.

F.I.L.A. S.p.A. prepares the Sustainability Report, including the NFS, in accordance with the GRI Standards and Articles 3 and 4 of Legislative Decree No. 254/2016 for the period from January 1, 2023 to December 31, 2023. This Report also describes significant new developments that occurred before March 15, 2024.

The NFS is separate from the Directors' Report. It was approved by F.I.L.A. S.p.A.'s

Board of Directors on March 19, 2024 and was subject to a limited assurance engagement by KPMG S.p.A., which expressed its conclusion in the "Independent Auditors' Report" accompanying this document.

The limited assurance engagement does not cover the information required by the European Taxonomy Regulation (Regulation (EU) 2020/852), set out in "E. The F.I.L.A. Group and the European Taxonomy". In addition, this limited assurance engagement does not cover "financial materiality" information.

Sustainability reporting is based on a materiality analysis, a process that helps identify the material topics in terms of the business profile, strategies, impacts, risks, the expectations of its stakeholders, and the industry to which the entity belongs. The information contained herein adheres to the principles of materiality, accuracy, balance, clarity, comparability, completeness, the sustainability context, timeliness, verifiability, and significance, as required by applicable legislation and the GRI Standards.

The material topics identified cover environmental issues (the use of raw materials, consumption of energy resources, atmospheric emissions and water consumption), employment (equal opportunity and occupational health and safety), social issues (product quality and safety, supplier relations, protecting diversity), topics relating to human rights (respect for human rights, freedom of association and collective bargaining), topics relating to the fight against corruption, both active and passive, and information security.

Reporting has been integrated with additional information on the Group's activities (where relevant) in the following chapters, to best address each topic analysed, making reference to other public documents for further details, where appropriate.

Questions about the reporting process or information contained in the Report can be sent to [e-mail]

contents

FABBRICA ITALIANA LAPIS ED AFFINI 8/168

2023 SUSTAINABILITY REPORT OVERVIEW THE F.I.L.A. GROUP AT A GLANCE

FAB

BRICA

ITALIANA

LAPIS

ED AFFINI

We are a leading global company that researches, designs, manufactures, and sells tools for creative expression. We design, produce, and package drawing, colouring, painting, and modelling tools and media for children, young people, and adults. We have more than 25 iconic brands and sell thousands of products around the world.

The Parent F.I.L.A. S.p.A. has been listed on Euronext Milan, Euronext STAR Milan, segment, since November 2015. The controlling shareholder is Massimo Candela, who, directly or indirectly, holds 27.147% of the ordinary shares and 53.699% of the voting rights.

SALES BY GEOGRAPHICAL SEGMENT IN 2023

11,7%		Europe
	N. America
	19,1%	C&S America
	Asia
		ROW

0,5%

41,2%

27,5%

SALES BY STRATEGIC BUSINESS SEGMENT IN 2023

Fine Arts, Hobby & Digital

Today, the Group is present on five continents by way of 33 operating branches and 25 plants. The most significant Group companies in terms of production volume and turnover are:

• F.I.L.A. S.p.A.
• Dixon Ticonderoga in Canada and the USA
• DOMS in India1
• Dixon Ticonderoga in Mexico
• Canson in France
• Daler-Rowneyin Great Britain and the Dominican Republic
• Lyra in Germany
• F.I.L.A. Dixon Kunshan in China

Growth has always been in F.I.L.A.'s DNA.	School & Office
Since 1994, the Parent has embarked on a	Industrial
questtointernationaliseitsbusinessthanks
3,8%
primarily to a prudent M&A strategy,
which has led to some major acquisitions.	72,4%
The far-reaching geographical expansion
has been accompanied by consolidation	23,8%
in mature markets through the extension
of products in the Fine Arts segment.

1 2023 came to close with the successful listing of the Indian subsidiary, DOMS Industries Limited, on the National Stock Exchange of India. F.I.L.A. will remain the largest shareholder with a 30.6% investment. The effects of the Indian listing allowed the Group to significantly reduce the leverage ratio to support future growth objectives.

contents

FAB

BRICA

ITALIANA

LAPIS

ED AFFINI

A truly global presence

						1
		4
						Finland
					UK
4						5
USA - Canada						France
			1			2
2		Dominican					Italy
	Republic
	Mexico

1

Brazil

1

Argentina

9/168

1

Germany

Wood

Plantation

2

China

2

India

Countries with

FILA presence

Countries with establishments of production

F.I.L.A. Headquarter

Countries with establishments of production

FAB

BRICA

ITALIANA

LAPIS

ED AFFINI

contents

FABBRICA ITALIANA LAPIS ED AFFINI 10/168

The F.I.L.A. Group's brand portfolio is summarised in the following graph:

PRODUCT
CATEGORIES	Paper for the Fine Arts
	Paper for school
	Paper for leisure and craft
Paper	Coloured paper
Paper for traditional printmaking
	Digital Fine Arts paper
	Oil and acrylic colours
	Watercolours and gouache
Fine Arts & Craft	Canvases and brushes
	Accessories
	Basic craft
	Graphite pencils
Writing	Ballpoint pens, fineliners
and gel link pens
	Highlighters and markers
	Coloured and graphite pencils
	Wax and oil crayons
Drawing and Colouring	Felt-tip pens
	Paints and watercolours
	Chalks and glues
	Plasticine
Modelling	Play dough
	Modelling clay

School				CONSUMER
				CATEGORIES
pre-school primary secondary	Art School	Office	Industry
school	school	Hobby and Artists