Financial report FY2024

Annual Report

Contents

on the Group's performance 166

1. Criteria for preparation of the consolidate

financial statements 166

Letter to Shareholders

Dear Shareholders,

2024 was another very positive year, characterised by further growth in sales and profitability.

Both the group's main brands, OVS and Upim, achieved excellent results: the first, with a 6% increase in sales, mainly obtained on a like-for-like basis, and the second, with growth of over 8%, thanks to new store openings. Stefanel contributed positively, with a strong acceleration in the second half of the year. The year therefore closed with overall growth of 6.2%.

Once again, the main development driver for clothing was the womenswear, with excellent results especially for the B.Angel brand. Sales and margins

also increased for men's and children's clothing. For the second year in a row, the beauty segment maintained a double-digit growth trend and remains an important cross-selling lever able to capture the interest of female consumers.

The combination of higher sales and an improved margin led to a substantial increase in EBITDA, achieved despite inflationary pressures on indirect costs.

The year saw significant investments. In particular, the garment reuse plant has been launched in Puglia as part of the circular economy, and the installation of new smart checkouts has been completed, enabling full integration between physical stores and digital systems, a personalised shopping experience and more streamlined and interconnected store operations. Cash generation is up 7% compared to 2023.

Looking ahead to the coming years, we plan to further expand our product range aimed at women, a key segment representing over half of the market where OVS still has significant growth potential. This includes the recent launch of the Les Copains collection and the strengthening of the beauty segment. The expansion of the OVS and Upim networks and international expansion will continue.

Furthermore, in the current macroeconomic context, characterised by uncertainty and rising costs for households that could result in a slowdown in consumption, we believe we can continue to leverage our ability to attract consumers from higher price segments.

Sincere thanks to all our stakeholders: to our shareholders for the trust they continue to place in us, to all our employees for their tireless contribution and commitment and to our partners for their valuable collaboration.

Chief Executive Officer

Annual Report 2024

Highlights

1,513

1,536

1,631

2022

2023

2024

180.2

182.2

195.3

2022

64.1

2023

64.3

2024

68.6

M

Net financial position

2022

2023

2024

(in milions of euro)

6 OVS

Net sales

EBITDA

Operating cash flow

OVS 7

Annual Report 2024

Corporate officers

BOARD OF DIRECTORS1

FRANCO MOSCETTI2 GIOVANNI TAMBURI3 STEFANO BERALDO CARLO ACHERMANN 3 4 ROBERTO CAPPELLI

ELENA ANGELA LUIGIA GARAVAGLIA 4

ALESSANDRA GRITTI CHIARA MIO 2 3 4

FLAVIA SAMPIETRO 2

BOARD OF STATUTORY AUDITORS1

STEFANO POGGI LONGOSTREVI FEDERICA MENICHETTI MASSIMILIANO NOVA

MARZIA NICELLI DONATA PAOLA PATRINI

Chairman

Vice-Chairman

Chief Executive Officer and General Manager Director

Director Director Director Director Director

Chairman Standing Auditor Standing Auditor Alternate Auditor Alternate Auditor

INDEPENDENT AUDITOR

KPMG S.P.A.5

FINANCIAL REPORTING OFFICER

NICOLA PERIN6

1. In office from 31 May 2023 until the Shareholders' Meeting called to approve the financial statements as at 31 January 2026

2. Member of the Control, Risks and Sustainability Committee

3. Member of the Appointments and Remuneration Committee

4. Member of the Related Party Transactions Committee

5. Appointed by the Shareholders' Meeting of 31 May 2022 for financial years 2023-2031

6. In office until the end of the term of office of the incumbent Board of Directors, i.e. until the Shareholders' Meeting called to approve the financial statements at 31 January 2026

8 OVS

9

Annual Report

Group structure

at 31 January 2025

The following chart shows how the OVS Group is organised, indicating the relative equity investments as percentages at the reporting date:

S.p.A.

100%

70%

100%

100%

100%

100%

100%

51%

100%

100% 31.6%

100%

100%

80%

100%

Commercial companies in the European market

Commercial companies in the American market

Commercial companies in the Asian market

Sourcing companies

Services and/or other non-retail business companies

Related company since

3% 16.07.2024

OVS 11

Brand

Italy's leading brand of clothing.

OVS is about contemporary, essential Italian style at excellent value for money and with a good deal of attention to sustainability in the choice of materials and production processes.

OVS is increasingly evolving from a vertical model to a marketplace model, physical and virtual, with the

introduction of iconic brands and innovative proposals that are able to satisfy different lifestyles.

With over 1,300 stores, OVS is present throughout Italy and abroad in the main city centers, shopping malls and residential areas.

OVS is the leading company on the Italian market for kids' clothes, with a double-digit market share.

Its target consists of kids from 0 -15 years old, offering competitively priced clothing of the highest quality made with carefully selected raw materials,

and developed to combine style and practical wear.

It is present in Italy and internationally

with direct stores as well as through franchising.

12 OVS

Contemporary fashion brand for men, women and kids, designed by Massimo Piombo. The collections express the famous Italian designer's taste and talent in textile research, attention to detail, and flair in combining shapes and colours.

Piombo is in Italy with shop-in-shops that can be found in over 500 OVS stores, and with brand stores in Cortina d'Ampezzo and Forte dei Marmi.

Iconic Italian brand acquired by OVS S.p.A. in 2022. Les Copains stands out for its elegant, versatile style, dedicated to the contemporary woman who chooses to express herself with elegance at different moments in the day.

The brand can be found on corners inside OVS stores.

Upim is an Italian family store and a benchmark for value for money, convenient and affordable shopping dedicated to the daily needs of families. It offers

a local-based service, with a wide variety of ranges, including clothing for the whole family, beauty care, and homeware.

14 OVS

Upim counts over 300 stores in Italy and abroad, mostly directly owned, located through the city centers, in shopping malls and in residential areas.

Blukids is the UPIM clothing brand dedicated to children from 0 to 15 years. It offers safe garments because

they are certified and quality guaranteed, always at a competitive price.

Blukids currently features 350 shops in Italy and abroad and over 300 corners in the OVS stores.

CROFF is a historic brand in home decoration, dedicated to those who love easy, informal contemporary design to experience every day.

Its collections, with a unique style and an excellent value for money, are made by carefully selected European and international manufacturers.

OVS 15

CROFF is present in Italy with standalone formats, shop-in-shops inside Upim stores, in city centres, shopping malls and residential areas.

STEFANEL is the contemporary Italian clothing brand dedicated to women and famous for

the design and quality of its knitwear.

Established in 1959, it has been part of the OVS Group since 2021.

It has over 100 stores in Italy and abroad, with direct stand-alone formats and franchises, as well as corners inside department stores.

Report on Operations

at 31 January 2025

Annual Report 2024

Foreword on methodology

The Annual Report at 31 January 2025 has been prepared in accordance with the IAS and IFRS international reporting standards issued by the International Accounting Standards Board, and includes the following:

• Separate and consolidated statement of financial position

• Separate and consolidated income statement

• Separate and consolidated statement of comprehensive income

• Separate and consolidated statement of cash flows

• Statement of changes in shareholders' equity of the Parent Company and the Group

• Notes to the separated and consolidated financial statements at 31 January 2025.

In this Report on Operations at 31 January 2025, in addition to the indicators provided for in the financial statements and in compliance with the IFRSs, some alternative performance indicators used by management to monitor and assess the Group's performance are also presented. In particular, with the introduction of the IFRS 16 international accounting standard, relating to the accounting treatment of leases, with effect from financial year 2019, in order to make the Group's data comparable with the years prior to 2019 and for a better understanding of performance in relation to other comparables in the sector, some adjustments have been introduced with regard to: EBITDA, operating result, profit before tax, net result for the year, net invested capital, net financial position and cash flow generated by operating activities, as detailed below. For this reason, the results are also commented on excluding IFRS 16 in order to maintain a consistent basis of comparison. As in previous years, the impacts of the application of IFRS 16 have been reported separately, and the reconciliation with the financial statements is further detailed in the section entitled "Reconciliation of the consolidated results for 2024" below.

Group operating performance

FY 2024 saw further accelerated growth in terms of sales and profitability.

After very unfavourable conditions in the first half of the year, which nevertheless saw an increase in sales, the second half of the financial year saw growth of almost 9%. The year therefore ended with sales up 6.2%.

Both OVS and Upim, the group's main brands, achieved excellent results: the first, with a 6% increase in sales, mainly obtained on a like-for-like basis, and the second, with growth of over 8%, also benefiting from new store openings.

Stefanel contributed positively with strong growth in terms of sales in the second half of the year.

International activities also resulted in increased sales and margins.

E-commerce growth is strong in terms of top line and profitability, partly thanks to the new technological infrastructures becoming operational.

In the world of clothing, and particularly in Italy, the main driver of growth is once again the product range aimed at women, with particular emphasis on collections aimed at young women, as demonstrated by the excellent results of the B-Angel brand. Sales and margins also increased for men's and children's clothing. For the second year in a row, the beauty segment maintained a double-digit growth trend and remains an important cross-selling lever due to the interest it generates within the female audience.

The sales margin rose to 58.2% in 2024, up 90 basis points, mainly due to the improved purchase cost of spring-summer 2024 compared to 2023.

The combination of higher sales and better margins led to an EBITDA increase for the year of 13 million euro, despite inflationary pressures on indirect costs, in particular the increase in personnel costs due to the renewal of the national collective labour agreement.

In addition, EBITDA was impacted by more than 4 million euro relating to the write-down of receivables due from customers in financial difficulty and the reversals of previous R&D tax benefits affecting most fashion companies. The magnitude of these events, for which provisions had already been made during the year, has only recently shown itself to be greater than reasonably anticipated.

The year saw investments of 86 million euro, including approximately 15 million euro for the completion of significant technological innovation projects. In particular, in February 2025 the garment reuse plant was completed and launched in Puglia as part of the circular economy, and the installation of new smart checkouts has been completed, enabling full integration between physical stores and digital systems, a personalised shopping experience and more streamlined and interconnected store operations. Cash generation is up 7% compared to 2023.

18 OVS

Report on Operations

Consolidated Sustainability Report

Consolidated

financial statements

Notes to the

financial statements

Separate

financial statements

Key information

on operating results at 31 January 2025

In FY 2024, the OVS Group continued its upward trend, with all key financial KPIs improving compared to the previous year. In particular, further growth was recorded in both sales and EBITDA.

The financial year ended 31 January 2025 closed with net sales of €1,631 million, up 6.2% compared with the previous year.

The main brands, OVS and Upim, performed extremely well. Stefanel also showed strong growth, with the second half of the year seeing acceleration thanks to the new stylistic direction. Excellent results in both clothing, especially womenswear, and beauty, which maintains double-digit growth.

The increase in sales and the improvement in commercial margin of 58.2% (up 90 bps compared with 2023) generated adjusted EBITDA for the year of

During the 2022-2024 three-year period, the Group generated cash of almost 200 million euro, despite substantial investments in technological innovation projects to improve operations.

The new spring-summer 2025 collections were well received by customers and first quarter sales were in line with the excellent performance of 2024.

As outlined below, a dividend of €0.11 per share will be proposed to the Shareholders' Meeting, up 57% compared to the dividend on 2023 results.

An extension of the current buyback plan for an additional €10 million will also be proposed.

The table below summarises the Group's key performance indicators.

OVS 19

Annual Report 2024

Key performance indicators

The table shows the result adjusted to represent the Group's operating performance net of non-recurring events which are unrelated to ordinary operations and the effects of the adoption of IFRS 16.

In 2024, the results were adjusted mainly to strip out the impacts of IFRS 16. In particular, with regard to the effects of IFRS 16, the following should be noted: (i) €197.8 million on EBITDA to reflect rent, (ii) €45.1 million in higher net costs on EBIT due to the reversal of depreciation and amortisation of €152.8 million, and (iii) €16.1 million in lower net costs on the reported result for the year due to the reversal of €63.9 million relating to net financial expenses and

€2.7 million in higher taxes. Lastly, (iv) the net financial position was adjusted for a €1.045.9 million decrease in liabilities.

EBITDA for the 2024 financial year was also adjusted as follows:

(i) €6.3 million in net foreign exchange gains on forward hedging of purchases of goods in foreign currency, reclassified from "Net financial expenses (income)" to "Purchases of raw materials, consumables and goods"; (ii) €3.1 million in costs relating to stock option and stock grant plans (non-cash costs); and (iii) other net one-off costs of €6.6 million, mainly related to some foreign businesses being divested.

Other adjustments that impacted EBIT and EBT related to: (i) costs of €9.3 million related to the amortisation of intangible assets due to the purchase price allocation (PPA) related to business combinations (including the recent PPA of JB Licenses S.r.l.); and (ii) adjusted financial income of €13.4 million, mainly relating to foreign exchange gains arising from the valuation of items denominated in foreign currency, including with respect to forward derivatives and realised foreign exchange gains (the latter reclassified to "Purchases of raw materials, consumables and goods").

Lastly, the adjusted net result for the period reflects taxes recalculated following the aforementioned adjustments, entailing an increase in expenses of €3.1 million.

In 2023, the results had been adjusted mainly to strip out the impacts of IFRS 16. In particular, with regard to the effects of IFRS 16, the following should be noted: (i) €191.7 million on EBITDA to reflect rent,

(ii) €33.5 million in higher net costs on EBIT due to the reversal of depreciation and amortisation of €158.2 million, and (iii) €7.1 million in lower net costs on the reported result for the year due to the reversal of €40.9 million relating to net financial expenses and €0.3 million in higher taxes. Lastly, (iv) the net financial position was adjusted for a

€996.7 million decrease in liabilities.

EBITDA for the 2023 financial year was also adjusted as follows:

(i) €9.3 million in net foreign exchange gains on forward hedging of purchases of goods in foreign currency, reclassified from "Net financial expenses (income)" to "Purchases of raw materials, consumables and goods"; (ii) €0.7 million in extraordinary bonuses to Middle Eastern customers; (iii) €1.5 million in costs relating to stock option and stock grant plans (non-cash costs); and (iv) other net one-off costs of €2.9 million, mainly related to the start-up phase of some foreign businesses.

Other adjustments that affected EBIT and EBT related to: (i) costs of

€8.6 million related to the amortisation of intangible assets due to the purchase price allocation (PPA) of past business combinations, and other extraordinary depreciation, amortisation and write-downs of assets of €2.6 million related to some partially discontinued Italian and foreign businesses; and (ii) adjusted financial income of €4.1 million, mainly relating to foreign exchange gains arising from the valuation of items denominated in foreign currency, including with respect to forward derivatives and realised foreign exchange gains (the latter reclassified to "Purchases of raw materials, consumables and goods").

Lastly, the adjusted net result for the period reflected taxes recalculated following the aforementioned adjustments, entailing an increase in expenses of €5.2 million.

20 OVS

Report on Operations

Consolidated Sustainability Report

Consolidated financial statements

Notes to the financial statements

Separate

financial statements

OVS 21

Adjusted consolidated result

The following table shows the adjusted consolidated results for 2024, classified by nature, compared with the previous year (in millions of euro).

(*) Other operating income and revenues have been reclassified to total net operating costs to provide a correct representation of the gross margin.

22

OVS

The following table shows the consolidated results by business segment for 2024 compared with the same period of the previous year (in millions of euro).

OVS 23

Annual Report 2024

Comments on the main items in the adjusted consolidated income statement

Net sales

(amounts in millions of euro)

1,535.6

1,631.4

1,140.1

1,209.0

+7.1%

350.3

FY 2023

FY 2024

FY 2023 FY 2024

FY 2023 FY 2024

378.7

Net sales (€m)

by Distribution channel and main brands

Dos & Websities Franchising&Marketplace

289.6 +2.4% 296.4

Adjusted net sales for the year reached €1,631.4 million, up 6.2% compared with the previous year. This robust growth was generated by 7.1% growth in DOS and a 2.4% increase in the franchise channel.

24 OVS

Report on Operations

Consolidated Sustainability Report

Consolidated

financial statements

Notes to the

financial statements

Separate

financial statements

EBITDA

(amounts in millions of euro)

182.2

195.3

152.6

162.8

34.6

40.1

EBITDA (€m) and EBITDA

margin (%) aggregate and of the main brands

FY 2023 FY 2024

FY 2023 FY 2024

FY 2023 FY 2024

In the 2024 financial year, the Group generated an adjusted EBITDA of €195.3 million, up €13.0 million compared to €182.2 million in 2023, representing 12.0% of sales.

The OVS EBITDA stood at €162.8 million, up €10.2 million compared with 2023, while the Upim EBITDA stood at €40.1 million, up €5.5 million.

This result was impacted by one-off write-downs of more than €4 million.

EBIT

EBIT, adjusted to better reflect the Group's operating performance, amounted to 129.0 million euros, significantly improved compared with 119.1 million euros in 2023. The decrease during the year was essentially due to the robust increase in EBITDA, only marginally offset by the increase in depreciation and amortisation, which rose as a result of the substantial special investments made in the last three years.

Net result for the year

Adjusted net profit for the year was €77.9 million. Compared with €75.9 million in the previous year, the result reflects an improvement due to higher EBITDA, but was nevertheless impacted by a higher tax rate due to regulatory changes at both international and national level. The reported net profit and net profit of OVS S.p.A. closed at €52.1 million and €51.6 million respectively.

OVS 25

Annual Report 2024

Non-recurring income and expenses

The adjusted consolidated results of the OVS Group included, at 31 January 2025, non-recurring and non-operating income and expenses totalling €7.4 million before tax (compared with €6.3 million at 31 January 2024). These relate to net one-off costs of €3.9 million, some partially discontinued foreign businesses of

€2.7 million and extraordinary amortisation and write-downs of related assets for €0.8 million.

Net Financial Position

As of 31 January 2025, the Group's net financial position, adjusted for the mark-to-market impact of hedging instruments and the adoption of IFRS 16, stood at

€148.3 million, essentially unchanged compared with 31 January 2024. The ratio of adjusted net financial position to adjusted EBITDA is 0.76x, a slight recent improvement compared to 0.80x as of 31 January 2024. The net financial position includes the purchase of

46.1 million euros in treasury shares (19,749,000 shares purchased at an average price of €2.5357, net of 2,578,740 shares sold for an average price of €1.5273 as part of stock option plans) and the distribution of dividends for €25.3 million.

Please see the following paragraphs for a breakdown of the net financial position of the Parent Company, OVS S.p.A..

26 OVS

Report on Operations

Consolidated Sustainability Report

Consolidated

financial statements

Notes to the

financial statements

Separate

financial statements

Summary statement of financial position

The table below shows the consolidated statement of financial position for 2024 compared with the end of the previous year (in millions of euro). It is also shown adjusted to provide a representation of the Group's financial position net of application of IFRS 16 and reclassifying liabilities for returns recognised under IFRS 15 (€28.9 million at 31 January 2025) among the components of operating working capital (compared with the presentation in the financial statements under Other current payables).

OVS 27

Annual Report 2024

The reported net invested capital of the Group at 31 January 2025, which therefore also includes the impact of IFRS 16, amounted to €2,072.7 million, up by €29.9 million compared with 31 January 2024, due to the combined effect of a further improvement in operating working capital that decreased during the year by €7.5 million, more than offset by a significant increase in net fixed assets of approximately €46.6 million and mainly attributable to the increase in Right-of-use assets, partly due to contractual changes, and the further strong push of investments in 2024.

Shareholders' equity

Consolidated shareholders' equity amounted to €893.2 million at 31 January 2025, down from €900.9 million in the previous year. The main changes during the year, as well as the result, include (i) changes in the treasury share reserve of -€44.5 million due to share purchases in the 12 months, already net of shares sold in the same period under stock option plans and (ii) the distribution of dividends of €17.5 million (it should be noted that dividends of €7.8 million paid out in February 2024 had already been approved in December 2023 and were therefore included in the changes in shareholders' equity in 2023).

The reconciliation table for the shareholders' equity

and the net result for the year of the Parent Company with the consolidated shareholders' equity and the consolidated net result for the year is shown below in the notes to the consolidated financial statements.

28 OVS