Fope S p A : Consolidated Financial Statement at 2023

FOPE GROUP Consolidated Financial Statement as of December 31, 2023

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This document is a courtesy translation from Italian into English.

In case of any inconsistency between the two versions, the Italian original version shall prevail.

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1	L E T T E R TO S H A R E H O L D E R S

Dear Shareholders,

The consolidated financial statements of the FOPE S.p.A. Group for the year ended 31 December 2023, showing a profit of Euro 10,075,118, is presented to you for your perusal.

Net revenues stood at Euro 66.77 million, an increase of Euro 4.61 million (+7.41%) compared to the previous financial year. 85.06% of revenues were generated by sales made on foreign markets.

The positive sales results achieved are consistent with the budget expectations outlined at the beginning of 2023, which reflected a complex international economic sce- nario, as confirmed by indicators that slowed down particularly in the second half of the year. Growth was witnessed in foreign markets as well as in the Italian mar- ket, the latter standing out in 2023 for its excellent sales performance driven both by the Venice-based boutique and in general by our retailers, with a strong presence of foreign tourists in Italy also playing a role.

The financial hedging policy on gold requirements neutralised fluctuations in gold prices and the primary margin on sales did not deviate from budget figures. Overall profitability also remained in line with the good percentages posted in financial year 2022, despite higher costs incurred for new marketing and communication activities as compared to the previous year.

Growth was seen in all markets, including countries with tourist flows. The collections presented at the beginning of the year - two of them made with new meshes developed by the production technology departments, and the Luna and Aria collections - showed a highly successful impact at our retailers.

In the pursuit of the key strategy of brand visibility and awareness across the mar- kets, two new single-brand boutiques were opened during the year in locations viewed as most attractive for the jewellery industry: the first in Tokyo Ginza, opened in June, and the second in Kuala Lumpur, opened in November 2023. Both boutiques were set up in cooperation with our local retailers.

During 2023, the Company maintained a major commitment to marketing and advertising activities to support the distribution network, with a significant and innovative focus on digital activities. In line with the market presence strategies and alongside with the single-brand boutiques, new Shop in Shops (customised corners within existing retail shops) were opened, and more are scheduled to open in 2024.

The FOPE collections are designed and manufactured by relying on a cycle of processes carried out entirely in-house. The production departments worked with maximum efficiency. Moreover, the productivity increase driven by process optimisation and the hiring of new staff, also enabled them to process the acquired order volumes in

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compliance with our service quality levels in terms of delivery and scheduled times.

Ethics and sustainability issues are always a priority and focus for the Company as it continues to strive to improve its position, while showing attention for each business activity.

With special reference to environmental sustainability, in 2023 - based on FY 2022 data - we achieved a major milestone, i.e. the "Neutral Carbon Footprint Company" certification issued by the assigned third-party body.

The important and positive results for the period were achieved thanks to the expe- rience, passion and commitment of the FOPE team, to whom I wish to express our sincere appreciation for the work done and for sharing our ideals and our development plan, which combines the strength of values consolidated over time with a strong innovative drive.

The Consolidated Financial Statements were audited by the auditing firm BDO Italia S.p.A.

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2	G R O U P P R O F I L E

FOPE S.p.A., the parent company and the three subsidiaries operate in the jewellery industry as a manufacturer and distributors of high-end jewellery under their own brand name. FOPE is an international brand whose turnover in 2023 consisted of sales on foreign markets to the extent of 85.06%. In addition to developing new product "collections", the Group is historically also focused on the innovation process to efficiently combine its goldsmith tradition with the best industrial production techniques whereby jewellery featuring elegant and sophisticated designs is made.

Its headquarters, offices and workshop are located in Vicenza, in one of Italy's main goldsmith districts, where the brand was created and developed.

FOPE S.p.A. is a certified member of the Responsible Jewellery Council, an International non-profit organisation that promotes responsible, ethical, social and environmental standards and practices in respect of human rights.

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C O M PA N Y H I S T O R Y

1929 - Umberto Cazzola opened the first handmade jewellery workshop in the city of Vicenza in Contrà Sant'Ambrogio, with the name Fabbrica Italiana Cinturini Metallici (FICM), specialising in the production of extendible metal watch straps.

1960 - Odino Cazzola founded the FOPE brand giving the company new momentum by focusing efforts on the export of gold cases and bracelets for watches, with his customers base including the greatest Swiss Houses of Haute Horlogerie.

1970 - His children, Ines and Umberto, held management positions within the company and revitalised development endeavours. Production was renovated, and precious jewels started to be created. In those years, the Novecento mesh - still in production today - was designed and continued to become a FOPE jewellery classic.

1980 - The product range expanded during those years to meet the needs of an increasingly large and demanding clientele. New productive criteria were introduced in order to meet strict quality standards and ensure compliance with product warranty and international certification.

1997 - The company changed into an Italian limited liability company under the name of FOPE S.r.l.

2000 - FOPE launched significant advertising campaigns, redefining its commercial strategies as it did away with distributors and created a direct relationship with the Jewellery market.

2007 - FOPE launched on the market the extendible Flex'it mesh designed by the company and covered by an international invention patent, crafted entirely in gold. The jewels created with this particular mesh became "extendible" thanks to microscopic gold springs inserted between each element of the mesh.

FOPE pursued its international commitment very strongly during those years, resulting in sales volumes of foreign markets exceeding those of the domestic market. The current Governance and Organisation structure was established.

2013 - FOPE launched the "A Tale of Beauty" communication project centring on the essence of Italian character of the brand, with actress Anna Valle acting as its Brand Ambassador.

2014 - The establishment of FOPE Services Dmcc Dubai, a company incorporated under UAE law, enabled the allocation of a FOPE commercial resource dedicated to the development and direct support of the areas of greatest interest in the Gulf countries and South-East Asia.

2015 - Opening, in November, of the Company's first single-brand FOPE boutique in Piazza San Marco in Venice. On December 15th, the Shareholders' Meeting resolved to change FOPE S.r.l. into an Italian law public limited company.

2016 - FOPE S.p.A. listed on the AIM (Alternative Investment Market), currently Euronext Growth Milan, of Borsa Italiana (Italian Stock Exchange). November 30th, 2016 is the first day of trading of the Company's shares on the stock market.

2017 - Acquisition of a minority share (20%) in Milano 1919 S.r.l., a company owning the Antonini jewellery brand. Antonini, a historical and known house of high-quality Italian jewellery - established and still based in Milan -, produces and distributes

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prestigious collections of exquisitely and exclusively designed jewellery.

2018 - FOPE Jewellery Limited was established, a company incorporated under English law whose registered office is in Birmingham with a mandate from FOPE S.p.A. to sell the brand's collections and provide operational support to distributors for the English-speaking UK and Irish market, i.e. one of the Group's main markets.

2019 - The new FOPE Boutique in the prestigious Old Bond Street in London opened at the end of November. The purpose of the ambitious project was to showcase the FOPE brand in a location with international standing, such as London, to gain a strong brand awareness effect for the British market and even more for the international market.

2020 - As a result of the lockdown imposed by the health emergency due to COVID-19, the Parent Company closed its headquarters from 14 March to 4 May 2020. During the lockdown period, production and shipment operations stopped, while administra- tive, sales and marketing tasks continued through remote working.

The FOPE boutique in Kuala Lumpur in Malaysia officially opened at the end of 2020. The project was carried out in collaboration with our distributor in the city, with whom we enjoy a long-standing partnership.

2021 - The FOPE showroom opened in April in an upmarket location in the city of Dubai. In July, FOPE extended its design to men's jewellery and launched a specific collection. The collection, featuring Flex'it bracelets and the use of black diamonds, is designed for dynamic and confident men who travel, love comfort and convenience as well as elegance.

2022 - FOPE Deutschland GmbH was established as a wholly-owned subsidiary of FOPE S.p.A. The new company and the establishment of the resulting operating structure made it possible to revise the entire commercial organisation for the German market with a view to development.

June signed the opening of a new single-brand boutique in Japan, in the most prestigious shopping district of Tokyo, Ginza; confirming the investments in progress, aiming to develop the business in the Japanize market. In November a new boutique was opened also in Kuala Lumpur. Its grand opening took place in February 2024, within the new upscale department store "Seibu", located in the Exchange TRX mall of the Malaysian capital city. Both boutiques represent the Company's goal of reinforcing and promoting the brand in the international markets even more.

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B U S I N E S S M O D E L

The business model is based on the following elements, which represent the Group's strengths:

• collections of products designed and manufactured in-house, at the he- adquarters in Vicenza and exclusively sold under the FOPE brand;
• distribution handled by multi-brand jewellers (FOPE S.p.A.'s customers) with medium-high positioning;
• direct sale to jewellers (as independent or group-owned customers) wi- thout intermediary agents or external distributors (with the exception of the two subsidiaries owned by the Group);
• strong brand and design characterisation and awareness;
• presence in international markets;
• special attention to product and process innovation, relying on patents for inventions developed by the Parent Company;
• direct control across the production chain, from the processing of raw material to finishing.

FOPE S.p.A. is responsible for research and technological development, the concept and creation of new collections, production, logistics as well as the Group's commercial and marketing organisation. All company departments, including production, are located at the headquarters of FOPE S.p.A., within a building constructed in 2000 and expanded during 2019, combining space rationality and efficiency with a modern, highly aesthetic architectural style. The absence of any harmful emissions from the production department has enabled the headquarters to remain in the urban context of the city of Vicenza.

FOPE USA Inc., headquartered in Boca Raton (Miami), is the Parent Company's distributor for the US market and agent for the Caribbean and South American markets.

FOPE S.p.A. - DMCC Branch, opened in October 2020 with headquarters in Dubai, is responsible for providing Customer Service to the Group's customers residing in Arab markets and in the South-East Asia area.

FOPE Jewellery Ltd, headquartered in Solihull (UK), a 75% subsidiary of FOPE S.p.A. with 25% capital owned by the company's three market development managers, is the Parent Company's distributor for the UK market.

FOPE Deutschland GmbH, a German company headquartered in Mönchengladbach (Germany), is a fully-owned subsidiary of FOPE S.p.A.

During the year, the new company FOPE Japan GK was established with a capital of

JPY 5,600,000.

It became officially operational in 2024, and for such reason it is not part of the E.Y. 2023 consolidated financial statements.

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