Informazioni sull'andamento della...

2012 Half Year Financial Report(Translation of the 2012 Half‐Year Financial Report approved in italian,

solely for the convenience of international readers)

Group

TOD’S Group 2012 Half Year Financial Report

06.30.2012

Table of contents

TABLE OF CONTENTS

Company’s data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Corporate Governance bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

TOD’S Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Group’s organizational chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Distribution network as of June 30t h

2012 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Key consolidated financial f igures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Highlights of results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Interim Report ................................ ................................ ................................ ........ 9

Group’s activity ......................................................................................................... 10

Group’s brands .......................................................................................................... 10

Organizational structure of the Group ....................................................................... 12

Foreign currency markets .......................................................................................... 12

Main events and operations during the period .......................................................... 12

The Group’s results in HY 2012 .................................................................................. 13

Significant events occurring after the end of the period ........................................... 21

Business Outlook ....................................................................................................... 21

Half-Year Condensed Financial Statements as of June 30th 2012................................................................22

Consolidated Profit and Loss ..................................................................................... 23

Consolidated Comprehensive Income ........................................................................ 24

Consolidated Statements of Financial Position .......................................................... 25

Consolidated Statements of Cash Flows ..................................................................... 27

Statement of changes in equity ................................................................................. 28

Half‐Year Condensed Financial Statements as of June 30th 2012 ‐ Supplementary notes........................ 29

1. General notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

2. Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

3. Seasonal or cyclical nature of interim transactions .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

4. Alternative indicators of performances .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

5. Scope of consolidation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

6. Segment reporting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

7. Earnings per share .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

8. Dividends .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

9. Intangible and tangible fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

10. Net financial position .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

11. Hedging of f inancial risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

12. Transactions with related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Attestation of the Half -Year condensed financial statements of TOD’S Grou p pursuant

article 154 bis of D.LGS. 58/98 and of article 81 -ter of Consob Regulation n. 11971 of May

14th

1999 and further modifications and integrations. ................................................41


06.30.2012

1 Company’s data

Company’s data

Registered office

TOD’S S.p.A.

Via Fil ippo Della Valle, 1

63811 Sant'Elpidio a Mare (Fermo) - Italy

Tel. +39 0734 8661

Legal data Parent company

Share capital resolved euro 61,218,802

Share capital subscribed and paid euro 61,218,802

Fiscal Code and registration number on Company Register of Court of Fermo: 01113570442

Registered with the Chamber of Commerce of Fermo under n. 114030 R.E.A.

Offices and Showrooms Dusseldorf – Kaistrasse, 2

Hong Kong – 35/F The Lee Gardens, 33 Hysan Avenue, Causeway Bay

London – Old Bond Street, 16

Milan - Corso Venezia, 30

Milan - Via Savona, 56

Milan - Via Serbelloni, 1-4

Milan - Via della Spiga, 22

New York - 450, West 15t h

Street

Paris – Rue Royale, 20

Seoul – 89-10, Cheongdam-dong, Kangnam-ku

Shanghai - 1717 Nanjing West Road, Wheelock Square 45/F

Tokyo – Omotesando Building, 5-1-5 Jingumae

Production facilities Comunanza (AP) - Via Merloni, 7

Comunanza (AP) - Via S.Maria, 2-4-6

Sant'Elpidio a Mare (FM) - Via Fil ippo Della Valle, 1

Bagno a Ripoli, Loc. Vallina (FI) - Via del Roseto, 60

Bagno a Ripoli, Loc. Vallina (FI) - Via del Roseto, 50

Tolentino (MC) - Via Sacharov 41/43


06.30.2012

2 Corporate Governance bodies

Corporate Governance bodies

Board of directors ( 1)

Diego Della Valle Chairman

Andrea Della Valle Vice - Chairman

Luigi Abete

Maurizio Boscarato

Luigi Cambri

Luca Cordero di Montezemolo

Emanuele Della Valle

Fabrizio Della Valle

Emilio Macellari

Pierfrancesco Saviotti

Stefano Sincini

Vito Varvaro

Executive Committee Diego Della Valle Chairman

Andrea Della Valle

Fabrizio Della Valle

Emilio Macellari

Stefano Sincini

Vito Varvaro

Compensation Luigi Abete Chairman

Committee Luigi Cambri


Control and Risk Luigi Cambri Chairman

Committee Maurizio Boscarato


Independent Directors Pierfrancesco Saviotti Chairman

Committee Luigi Abete

Luigi Cambri

Board of statutory ( 2 )

Enrico Colombo Chairman

Auditors Gilfredo Gaetani ( 3 )

Acting stat. auditor

Fabrizio Redaelli Acting stat. auditor

Massimo Foschi Substitute auditor

Aldo Bisoli ( 3 )

Substitute auditor

Independent Auditors ( 4)

PricewaterhouseCoopers S.p.A.

Executive responsible for Rodolfo Ubaldi

f inancial report ing

( 1 ) Term of the off ice: 20 12-2014 (resolut ion of the Shareholders ’ meeting as of Apri l 19 t h , 2012)

( 2 ) Term of the off ice: 2010 -2012 (resolut ion of the Shar eholders ’ meeting as of Apri l 22 n d , 2010) ( 3 ) Appointed by the S hareholder meeting as of Apri l 19 t h , 2012 ( 4 ) Term of the off ice: 2012 -2020 (resolut ion of the Shareholders ’ meeting as of Apri l 19 t h , 2012)


06.30.2012

3 Composition of the Group

TOD’S Group

TOD’S S.p.A. Parent Company, owner of TOD’S, HOGAN and FAY brands and l icensee of ROGER VIVIER brand.

Del.Com. S.r.l. Subholding for operation of national subs idiar ies and DOS in I taly . TOD’S International B.V. Subholding for operation of international subs idiar ies and DOS in The Netherlands. An.Del. Usa Inc. Subholding for operation of subs idiar ies in the United States. Del.Pav S.r.l. Company that operates DOS in I taly . Filangieri 29 S.r.l. Company that operates DOS in I taly . Gen.del. SA Company that operates DOS in Switzer land. TOD’S Belgique S.p.r.l. Company that operates DOS in Belg ium. TOD’S Deutschland Gmbh Company that distr ibutes and promotes products in Germany and manages DOS in Germany. TOD’S Espana SL Company that distr ibutes and promotes products in Spain and operates DOS in Spain. TOD’S France Sas Company that distr ibutes and promotes products in France and manages DOS in France. TOD’S Luxembourg S.A. Company that operates DOS in Luxembourg. TOD’S Hong Kong Ltd Company that distr ibutes and promotes products in Far East and South Pacif ic and manages DOS in Hong Kong. TOD’S Japan KK Company that operates DOS in Japan. TOD’S Korea Inc. Company that promotes products in Korea. TOD’S Macao Ltd Company that

operates DOS in Macao. TOD’S Retail India Private Ltd Company that operates DOS in India. TOD’S (Shanghai) Trading Co. Ltd Company that operates DOS in China.

TOD’S Singapore Pte Ltd Company that operates DOS in S ingapore.

TOD’S UK Ltd Company that distr ibutes and promotes products in Great Br itain and manages DOS in Great Br itain. Webcover Ltd Company that operates DOS in Great Br itain. Cal.Del. Usa Inc. Company that operates DOS in Cal ifornia (USA). Deva Inc. Company that distr ib utes and promotes products in North America, and manages DOS in the State of NY (USA). Flor. Del. Usa Inc. Company that operates DOS in F lor ida (USA). Hono. Del. Inc. Company that operates DOS in Hawai (USA). I l. Del. Usa Inc. Company that operates DOS in I ll inois (USA). Neva. Del. Inc. Company that operates DOS in Nevada (USA). Or. Del. Usa Inc. Company that operates DOS in Cal ifornia (USA). TOD’S Tex. Del. Usa Inc. Company that operates DOS in Texas (USA). E-TOD’S Inc. E-commerce company for US market. Holpaf B.V. Real estate company. Alban.Del Sh.p.k. Production company. Sandel SA Not operating company. Un.Del. Kft Production company. Re.Se.Del. S.r.l. Company for services. Formapura S.r.l. Company for services. TOD’S Brasil Ltda Start up company that operates DOS in Brazi l .


06.30.2012

4 Composition of the Group

Group ’s organizational chart

TOD’S S.p.A.

TOD’S International BVAmsterdam – The Netherlands

S.C. - Euro 2,600,200

An.Del. USA Inc.New York U.S.A.

S.C. - Usd 3,700,000

Del.Com S.r.l.S.Elpidio a Mare - Italy

S.C. - Euro 31,200

TOD’S Hong Kong LtdHong Kong

S.C. - Usd 16,550,000

TOD’S UK LtdLondon – Great Britain

S.C. - Gbp 350,000

TOD’S Belgique S.p.r.l.Bruxelles - BelgiumS.C. - Euro 300,000

TOD’S Espana SLMadrid – Spain

S.C. - Euro 468,539.77

TOD’S Japan KKTokio - Japan

S.C. - Jpy 100,000,000

TOD’S Korea Inc Seoul - Korea

S.C. Won 1,600,000,000

TOD’S Singapore LtdSingapore

S.C. - Sgd 300,000

Un.Del KftTata - Hungary

S.C. - Huf 42,900,000

TOD’S Luxembourg S.A.Luxembourg

S.C. Euro 31,000

TOD’S France SasParis - France

S.C. - Euro 780,000

TOD’S Deutschland GmbhDusseldorf - GermanyS.C. - Euro 153,387.56

Cal.Del. USA Inc.Beverly Hills, Ca U.S.A.

S.C. - Usd 10,000

TOD’S Tex. Del. Inc.Dallas, Tx U.S.A

S.C. - Usd 10,000

Deva Inc.Wilmington, DE U.S.A.

S.C. - Usd 500,000

Flor.Del. USA Inc.Tallahassee, Fl U.S.A.

S.C. - Usd 10,000

Hono.Del. Inc.Honolulu, Hi U.S.A.S.C. - Usd 10,000

Del.Pav. S.r.l.S.Elpidio a Mare - Italy

S.C. - Euro 50,000

Re.Se.Del. S.r.l.S.Elpidio a Mare - Italy

S.C. - Euro 25,000

Filangieri 29 S.r.l.S.Epidio a Mare - Italy

S.C. - Euro 100,000

TOD’S (Shanghai) Trading Co. LtdShanghai- China

S.C. Usd 6,000,000

TOD’S India Retail Private LtdMumbai – India

S.C. Inr 193,900,000

Webcover LtdLondon – Great Britain

S.C. - Gbp 2

Il.Del. USA Inc.Springfield, Il U.S.A.

S.C. - Usd 10,000

Neva.Del. Inc.Carson City, Nv U.S.A.

S.C. - Usd 10,000

Or.Del. USA Inc. Sacramento, Ca U.S.A.

S.C. - Usd 10,000

100%

100%

100%

99%

90%

100%

100%

100%

100%

50% 50%

Gen.Del. SAZurich – Switzerland

S.C. Chf 200,000

Sandel SASan Marino

S.C. - Euro 258,000

1%

E-TOD’S Inc.Wilmington, De U.S.A

S.C. - Usd 200

100%

ALBAN.DEL Sh.p.kTirana – Albania

S.C. – Euro 720,000

100%

1% 99%

10%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

50%

50%

50%

100%

1%

100% 100%

Holpaf B.V.Amsterdam – The Netherlands

S.C. - Euro 5,000,000100%

Formapura S.r.l.Milan– Italy

S.C. - Euro 10,000

100%

TOD’S Macao LdaMacao

S.C. Mop 20,000,000

TOD’S Brasil Ltda.San Paolo - BrasileS.C. - Brl 500,000

90% 10%


06.30.2012

5 Distribution network

Distribution network as of June 30t h

2012

Total

RoW

Saudi Arabia

Bahrain

U.A.E.

Kuwait

Lebanon

Qatar

Total

Asia

Japan

China

Korea

(D)=DOS (F)=FRANCHISING

RoW (D) (F)Saudi Arabia 2Baharain 2United Arab E. 5Kuwait 2Lebanon 2Qatar 1Total 14

USA (D) (F)U.S.A. 14

(D)=DOS (F)=FRANCHISED STORES

Asia (D) (F)Japan 27 1China 20 4Korea 9 7Philippines 2Hong Kong 8 1India 2Indonesia 3Macao 1 1Malaysia 2Singapore 2 1Taiwan 14Thailandia 3U.S.A. 1Total 69 40

(D)=DOS (F)=FRANCHISED STORES

Europe (D) (F)

Italy 44 4

Belgium 1

France 12 1

Germany 9

Great Britain 5

Greece 5

Luxembourg 1

Netherlands 1

Portugal 1

Russia 3

Spain 2 1

Switzerland 3

Turkey 1

Total 78 16

RoW (D) (F)

Saudi Arabia 2

Bahrain 2

U.A.E. 5

Kuwait 2

Lebanon 2

Qatar 1

Total 14

Asia (D) (F)

Japan 29 1

China 35

Korea 12 6

Philippines 2

Hong Kong 10 1

India 1

Indonesia 4

Macau 1 1

Malaysia 3

Singapore 2 1

Taiwan 17

Thailand 2

U.S.A. 1

Total 90 39

USA (D) (F)

U.S.A. 14 2

Total 14 2

DOS, 2012 new openings Franchised stores, 2012 new openings Far East Europe Hefei (China) Moscow (Russ ia)

Xi’an ( 1 )

(China) Paris (Airport) (France)

Shenyang ( 1 )

(China)

Shanghai ( 1 )

(China) Far East Harbin (China) Kaohsiung (Taiwan) Hiroshima (Japan)

USA USA Costa Mesa (USA) Honolulu (USA) Waik ik i (USA)

( 1 ) Franchised stores take over

For a complete l ist of retail outlets operated by the DOS and franchising network, reference should be made to the corporate web site: www.todsgroup.com

http://www.todsgroup.com/


06.30.2012

6 Key financial f igures

Key consolidated financial figures

P&L key figures (Euro mn)

H1 2012 H1 2011 H1 2010 H1 2009

Revenues 482.5 439.5 377.5 359.0

EBITDA 123.5 25.6% 115.6 26.3% 90.7 24.0% 78.9 22.0%

EBIT 103.4 21.4% 96.4 21.9% 74.3 19.7% 63.2 17.6%

PRE-TAX 104.0 21.5% 96.9 22.0% 77.0 20.4% 62.5 17.4%

Net income 74.1 15.4% 66.1 15.0% 52.4 13.9% 43.1 12.0%

Key Balance Sheet figures (Euro mn)

06.30.12 12.31.11 06.30.11

Net working capital (*) 242.5 226.8 209.8

Net fixed capital 399.4 393.0 375.4

Shareholder's equity 690.2 688.8 617.5

Net financial position 79.4 110.7 88.7

Capital expenditures 26.2 61.9 37.7

(*) Trade receivables + inventories – trade payables

Financial key figures (Euro mn)

06.30.12 12.31.11 06.30.11

Self-financing 93.3 172.0 83.7

Cash flow from operation 68.4 128.0 70.2

Free cash flow (33.9) 12.9 (12.8)

H1 12 Revenues - % by brand

H1 12 Revenues - % by region

H1 12 Revenues - % by product

TOD'S59.3%

HOGAN27.1%

FAY6.7%

Roger Vivier6.8%

Other0.1%

Italy41.2%

Europe20.9%

North Am.7.9%

RoW30.0%

Shoes74.7%

Leather goods17.2% Appar.

8.0% Other0.1%


06.30.2012

7 Key financial f igures

The Group employees

06.30.12 12.31.11 06.30.11 06.30.10

Year to date 3,787 3,549 3,416 3,102

EX = executives

WHC = white collar employees

BLC = blue collar employees

2012 Group employees

EX1%

WHC65%

BLC34%

Main Stock Market indicators (Euro) – TOD’S S.p.A.

S h a r e s ’ p r i c e

Official price at January 2n d 2012 63.40

Official price at June 29 t h 2012 78.95

Minimum price (January-June) 61.55

Maximum price (January-June) 88.30

M a r k e t c a p i t a l i z a t i o n

At January 2 t h 2012 1,940,636,023

At June 29 t h 2012 2,416,612,209

D i v i d e n d p e r s h a r e

Year 2011 2.50

Year 2010 2.00

Extraordinary Dividend 2010 3.50

O r d i n a r y s h a r e s

Number of outstanding shares 30,609,401

Stock performance (Euro)Earning per share (euro)

2.43

2.14

1.69

1.39

HI 2012 HI 2011 HI 2010 H1 2009

50,00

55,00

60,00

65,00

70,00

75,00

80,00

85,00

90,00

January-June2012


06.30.2012

8 Hightlights of results

Highlights of results

Revenues: revenues totalled 482.5 mill ion euros

during the period (the average change in foreign

exchange rates had a positive impact of 11.0

mill ion euros), equivalent to growth of 9.8%

from H1 2011. Sales by the DOS network

totalled 273.4 mill ion euros (+20.5%).

EBITDA: gross operating profit amounts to

1 2 3 . 5 mill ion euros (+7.9 mill ion euros

compared to H1 2011) and it was equivalent to

25.6% of sales. It amounts to 117.7 mill ion

euros on a comparable exchange rate basis .

EBIT: net operating profit totalled 1 0 3 . 4 mill ion

euros, +7.3% compared with H1 2011 (96.4

mill ion euros). When measured on a comparable

exchange rate basis, EBIT totalled 9 8 . 1 mill ion

euros.

Net financial position (NFP): the Group had

154.5 mill ion euros in l iquid assets at June 30t h

2012. Its net f inancial position was 79.4 mill ion

euros at the same date.

Capital expenditures: 26.2 mill ion euros in

capital expenditures were made in H1 2012, in

H1 2011 amounted to 37.7 mill ion euros.

Distribution network: at June 30t h

the single

brand distribution network comprised 182 DOS

and 71 Franchised stores.

Sales revenues (Euro mn)

EBITDA (Euro mn)

EBIT (Euro mn)

NFP (Euro mn)

471.5 482.5

439.5

377.5 359.0

H1 12 comp. ex. rates basis

H1 12 H1 11 H1 10 H1 09

117.7 123.5 115.6

90.7

78.9


H1 12 H1 11 H1 10 H1 09

98.1 103.4

96.4

74.3

63.2


H1 12 H1 11 H1 10 H1 09

79.4 88.7

200.3

100.0

06.30.12 06.30.11 06.30.10 06.30.09

Interim Report

Group


06.30.2012

10 Interim report

Group’s activity

TOD’S Group operates in the luxury sector under its proprietary brands (TOD’S, HOGAN, and FAY)

and licensed brands (ROGER VIVIER). It actively creates, produces and distributes shoes, leather

goods and accessories, and apparel. The mission is to offer global customers top -quality products

that satisfy their functional requirements and aspirations.

Development of production. Group’s production structure is based on complete control of the

production process, from creation of the collections to production and then distribution of the

products. This approach is considered key to assuring the prestige of its brands.

Shoes and leather goods are produced in Group -owned plants, with partial outsourcing to

specialized workshops. All of these outsourcers are located in areas with a strong tradition of

shoe and leather good production. This preference reflects the fact that an extremely high

standard of professional quality is required to make these items, with a signi ficantly high level of

added value contributed to the final product by manual work.

The Group relies exclusively on selected specialized outsourcers, which enables it to exploit their

respective specializations in crafting the individual products sold as p art of the apparel l ine.

Distribution structure. The prestige of Group’s brands and the high degree of specialization

necessary to offer the respective products to customers entails distribution through a network of

similarly specialized stores. Acco rdingly, the Group relies principally on three channels: DOS

(directly operated stores), franchised retail outlets, and a series of selected, independent

multibrand stores.

Group’s strategy is focused on development of the DOS and franchising network s, given that

these channels offer greater control and more faithful transmission of the individual brands. It is

also clear that, in particular market situations, distribution through independent multibrand

stores is more efficient. This channel is of k ey importance to the Group.

Group’s brands

The Tod’s brand is known for shoes and luxury leather goods, with s tyles that have became icons

of modern living; Tod’s is known in the luxury goods sector as a symbol of the perfect

combination of tradition, quality and modernity. Each product is hand-crafted with highly-skil led

techniques, intended, after laborious rewo rking, to become an exclusive, recognisable, modern


06.30.2012

11 Interim report

and practical object. Some styles, l ike the Driving Shoe and the D bag, are cherished by

celebrities and ordinary people worldwide, and have become icons and forerunners of a new

concept of elegance, for both women and men.

Begun in the 80s with shoe collections fo r women, men and children, the Hogan brand now also

crafts various leather goods items. The Hogan brand is distinctive for high quality, functionality

and design. Every product stems from a highly skil led design technique and is created using

quality materials with a particular passion for details and a search for perfection. Hogan products

are the highest expression of a “new luxury” lifestyle. Hogan is meant for someone who cherishes

the type of luxury associated with product excellence, innovative origin al design and

consummate practicality. The Traditional and the Interactive shoe styles endure as continuing

“best sellers”.

FAY is a brand created in the mid 80s with a product range of high quality casual wear. The brand

is known for its quality craftsmanship, for the excellence of its m aterials, a meticulous attention

to craft details and its high functionality without sacrif icing style and quality. FAY products are

wearable everywhere: from the stadium to the office, in urban areas and in the countryside. The

line, which has seasonal men’s, women’s and junior’s collections, focuses on classic evergreen

styles, continuously modified and refreshed with innovative and recognisably eye -catching

design.

The Fabergé of shoes, and creator of the first stiletto heel in the 1950's, Roger Vivie r designed

extravagant and luxuriously decorated shoes that he described as being “sculptures.” Today, the

artistic heritage and excellent traditional roots of the Vivier fashion house have been revived .

Under the management of Creative Director Bruno Fris oni, Vivier’s work and vision endure. New

chapters are added to this unique life story every year, which goes beyond the world of footwear

to include handbags, small leather goods, jewellery and sunglasses.


06.30.2012

12 Interim report

Organizational structure of the Group

Group’s organisational configuration rotates around TOD’S S.p.A. that is at the hear t of Group’s

organisation, its parent company that owns TOD’S, HOGAN and FAY brands, holds the licenses to the

ROGER VIVIER, and manages Group’s production and distribution . Through a series of sub-holdings,

the organisation is rounded out by a series of commercial companies that are delegated complete

responsibility for retail distribution through the DOS network. Certain of them, strategically located

on international markets, are assigned major roles in product distribution, marketing and promotion,

and public relations processes along the “value chain”, while simultaneously guaranteeing the

uniform image that Group brands must have worldwide.

Foreign currency markets

Comparative analysis of the average exchange rates for the euro against other major currencies

between January and June 2012 and the first half of 2011 reveals a general decrease in the value of

the euro, especially with respect to Asian currencies, U.S. dollar and those currencies which are linked

to it.

5.2% 5.1%

7.8%7.1% 7.5%

10.2% 10.7%

GBP CHF HKD SGD USD JPY RMB

Change (%) on exchange rate - major extra/UE currencies

Change vs H1 2011 average

Main events and operations during the period

The first half 2012 confirms broadly the same growth for the Group as the one already performed

in the 1s t

quarter 2012, despite the challenging comparison basis represented by the important

results of the first half 2011. Excellent results for the DOS network, which achieved a further

acceleration in respect of the growth already performed during the first quarter, driven by the

Asian markets where all brands confirm double digit growth rates.

The distribution network of the mainland China (PRC) has been further expanded: with the

openings, during the first half 2012, of two further TOD’S stores and the take over of existent

franchised stores, the Group has obtained the total control of the distribution network in China.


06.30.2012

13 Interim report

The distribution network is made up of 35 DOS, that confirms the primary role played by this

important market in relation to the international luxur y landscape.

During the first half 2012, the Group began start up activit ies of the distribution network in the

Brazil ian market, in rapid development, through the incorporation of TOD’S Brasil Comércio de

Artigos de Cuoro Ltda . For the next months, TOD’S brand will be in all the three main shopping

centers of San Paolo, which is the reference point for the luxury market in Brazil.

Additional impulse was given by the Group commitment in the field of social responsibility: i n a

diff icult moment for our Country, which generates great worries among workers concerning

future opportunities and increasing economic difficulties, Tod’s Group extends a series of

initiatives to employees of the Industrial Division, following similar activities previously offered,

with the purpose to improve the daily l ife of its employees and of their families.

Following the above mentioned initiatives, in addition to the economic contribution of 1,400

eurs, the employees of the industrial division will benefit both of healthcare ins urance, even for

their family members in case of special medical needs or major surgeries , and they will benefit of

the coverage for the expenses of the employees children’s schoolbooks .

Continuing on the social responsibility f ield, the Group also made a contribution of approximately

1 mill ion euros to a project in collaboration with Save the Children , to help Japanese children in

Miyagi and Iwate Prefectures affected by the March 11s t

, 2011 earthquake.

In view of integrating in its organisation a whole s eries of outsourced strategic marketing and

promotion activities, the Group acquired, through the parent TOD’S S.p.A., 100% of the units of

Formapura S.r. l. , an Italian company with which it had a collaboration relationship involving the

aforementioned act ivities for several years. On May 10t h

, 2012 the Board of Directors of TOD’S

S.p.A. resolved to take over Formapura S.r. l. through merger in order to complete the integration

and streamlining of its activities, organisation and functions .

On August 1s t

, 2012 the Group, through the holding company TOD’S S.p.A., purchased 100% of the

share capital of Edmond S.r. l. , an Italian real estate company, which owns a land next to the

headquarter in Sant’Elpidio a Mare, guaranteeing in this way the availability of space for a

further expansion of the production structures.

The Group’s results in HY 2012

The Group’s half -year f igures confirm the results posted in the first quarter of 2012. Excellent

performances were achieved abro ad, in particular on US and Asian market s, which grew,

respectively, by 30% and 55.6%.

In general, the entire DOS network registered a bril l iant pe rformance. Retail sales increased by

20.5% in respect of the same period of 2011, pushing the Group’s turnover to 482.5 mill ion euros

in H1 2012 (+ 43 mill ion euros in respect of 439.5 mill ion of euros of H1 2011, with a 9.8 %


06.30.2012

14 Interim report

growth). At constant exchange rates, meaning by using H1 2011 average exchang e rates, sales

would have been 471.5 mill ion euros, up 7.3% from H1 2011 .

Also profitability confirms the trend of the first part of this year. In H1 2012, EBITDA a nd EBIT

grew, respectively, by 6.8% and 7.3 %, compared to the corresponding figures of H1 2011, and

amounted, respectively, to 123.5 and 103.4 mill ion Euros. In H1 2012, the EBITDA margin on sales

was 25.6% and the EBIT margin was 21.4 %. Consolidated net income grew double-digit, up to 74.1

mill ion euros (compared to 66.1 mill ion Euros as of June 30t h

, 2011), driven also by the significant

improvement of the tax rate, which decreased by 300 basis points (28.8% in H1 2012 compared to

31.8% of H1 2011).

(Euro 000 ’s)

FY 11 Main P&L indicators H1 2012 H1 2011 Change %

8 9 3 , 6 3 8 S a l e s r e v e n u e s 4 8 2 , 4 5 6 4 3 9 , 4 5 8 4 2 , 9 9 8 9 . 8

2 3 2 , 4 1 7 E B I T D A 1 2 3 , 5 0 0 1 1 5 , 6 1 6 7 , 8 8 4 6 . 8

( 3 7 , 7 8 7 ) D e p r. , a m o r t . , w r i t e - d o w n s ( 2 0 , 0 7 1 ) ( 1 9 , 2 0 0 ) ( 8 7 1 ) 4 . 5

1 9 4 , 6 3 0 E B I T 1 0 3 , 4 2 9 9 6 , 4 1 6 7 , 0 1 3 7 . 3

1 9 6 , 8 8 6 P r e - t a x p r o f i t 1 0 3 , 9 6 0 9 6 , 8 6 5 7 , 0 9 5 7 . 3

1 3 5 , 6 8 8 C o n s o l i d a t e d n e t i n c o m e 7 4 , 0 7 0 6 6 , 0 6 4 8 , 0 0 6 1 2 . 1

F o r e i g n e x c h a n g e i m p a c t o n r e v e n u e s ( 1 0 , 9 9 9 )

A d j u s t e d s a l e s r e v e n u e s 4 7 1 , 4 5 7 4 3 9 , 4 5 8 3 1 , 9 9 9 7 . 3

F o r. e x c h . i m p a c t . o n o p e r a t i n g c o s t 5 , 1 6 1

A d j u s t e d E B I T D A 1 1 7 , 6 6 2 1 1 5 , 6 1 6 2 , 0 4 6 1 . 8

F o r. e x c h . i m p a c t . o n d e p r e c . & a m o r t . 4 9 1

A d j u s t e d E B I T 9 8 , 0 8 2 9 6 , 4 1 6 1 , 6 6 6 1 . 7

E B I T D A % 2 5 . 6 2 6 . 3

E B I T % 2 1 . 4 2 1 . 9

A d j u s t e d E B I T D A % 2 5 . 0 2 6 . 3

A d j u s t e d E B I T % 2 0 . 8 2 1 . 9

Ta x r a t e % 2 8 . 8 3 1 . 8 (Euro 000 ’s)

06.30.11 Main Balance sheet indicators 06.30.12 12.31.11 Change 2 0 9 , 8 1 0 N e t w o r k i n g c a p i t a l ( * ) 2 4 2 , 4 8 9 2 2 6 , 7 6 6 1 5 , 7 2 3

3 7 5 , 4 1 1 N o n - c u r r e n t a s s e t s 3 9 9 , 3 8 2 3 9 3 , 0 0 4 6 , 3 7 8

( 5 6 , 5 0 7 ) O t h e r c u r r e n t a s s e t s / l i a b i l i t i e s ( 3 1 , 1 4 3 ) ( 4 1 , 7 3 2 ) 1 0 , 5 8 9

528,714 Invested Capital 610,728 578,038 32,690

8 8 , 7 4 8 N e t f i n a n c i a l p o s i t i o n 7 9 , 4 3 4 1 1 0 , 7 4 9 ( 3 1 , 3 1 5 )

617,462 Shareholder’s equity 690,162 688,787 1,375

3 7 , 6 7 7 C a p i t a l e x p e n d i t u r e s 2 6 , 2 0 2 6 1 , 8 8 2 ( 3 5 , 6 8 0 )

7 0 , 1 7 7 C a s h f l o w f r o m o p e r a t i o n 6 8 , 4 4 7 1 2 8 , 0 4 0 ( 5 9 , 5 9 3 )

( 1 2 , 7 9 4 ) F r e e c a s h f l o w ( 3 3 , 9 4 1 ) 1 2 , 8 5 7 ( 4 6 , 7 9 8 )

( * ) Trade rece ivables + inventor ies – t rade payables


06.30.2012

15 Interim report

Revenues. Consolidated sales were 482.5 million euros in the first half of 2012, up 9.8% from H1

2011. At constant exchange rates, meaning by using H1 2011 average exchange rates, sales would

have been 471.5 mill ion euros, up 7.3% from H1 2011.

In H1 2012, revenues to third parties totalled 209.1 million Euros. The slight decrease compared to

H1 2011 is mainly due to the rationalization of the Italian wholesale distribution.

Excellent results for the DOS network, which represents 56.7% of the Group’s turnover as of June

30th

, 2012. Sales of this channel globally amounted to 273.4 million euros in H1 2012, up 20.5%

from H1 2011 (+16% at constant exchange rates).

Significant acceleration of the organic growth: the Same Store Sales Growth (SSSG) rate, calculated

as the worldwide

average of sales

growth rates

reported by DOS

opened as of January

1st, 2011 , was 10.6

% for the first 31

weeks of 2012 (from

January 1st to July

29th

, 2012),

compared to 7.8%

posted until the

(Euro mn) H1 2012 % H1 2011 % Change %DOS 273.4 56.7 227.0 49.1 46.4 20.5Third parties (WS) 209.1 43.3 212.5 50.9 (3.4) (1.6)Total 482.5 100.0 439.5 100.0 43.0 9.8

DOS56,7%

Third parties (WS)

43,3%

DOSDOS

WS

WS

0

50

100

150

200

250

300

350

400

H1 2012 H1 2011

DOS56.7%

Third parties (WS)

43.3%

DOSDOS

Third parties (WS) Third parties

(WS)

0

50

100

150

200

250

300

350

400

450

500

H1 2012 H1 2011

beginning of May. As of June 30th

, 2012 the Group’s distribution network was composed by 182 DOS

and 71 franchised stores, compared to 161 DOS and 70 franchised stores as of the end of June 2011.

Outstanding results for TOD’S in H1 2012; the brand accelerated its growth in Q2, driven by the

excellent results of the DOS network. Its sales total led 286.2 million euros in H1 2012, up 19.4%

from H1 2011 (+15.6% at constant exchange rates).

TOD’S Group

2010 Half Year Financial Report 06.30.2012

16 Interim report

The HOGAN brand

totalled 130.6 million

euros of sales in H1

2012, compared to

148.3 million euros

of the same period of

2011. As already

commented in the

past press releases,

the brand’s

performance reflects

the Italian wholesale

rationalization,

(Euro mn) H1 2012 % H1 2011 % Change %

TOD'S 286.2 59.3 239.7 51.9 46.5 19.4HOGAN 130.6 27.1 148.3 36.4 (17.7) (12.0)FAY 32.5 6.7 35.4 9.1 (2.9) (8.1)RV 32.7 6.8 15.6 2.5 17.1 110.3Other 0.5 0.1 0.5 0.1 0.0 n.s.Total 482.5 100.0 439.5 100.0 43.0 9.8

TOD'S59,3%

HOGAN27,1%

FAY6,7%

RV2,5%

TOD'STOD'S

HOGAN

HOGAN

0

50

100

150

200

250

300

350

400

H1 2012 H1 2011

TOD'S59.3%

HOGAN33.8%

FAY6.7%

RV6.8%

TOD'STOD'S

HOGANHOGAN

FAYFAY

RVRV

0

50

100

150

200

250

300

350

400

450

500

H1 2012 H1 2011

implemented in order to preserve the exclusivity of the brand and the quality of the receivables.

The brand continues to perform strongly abroad, following its international growth strategy. Also

the performance of the FAY brand reflects the same rationalization strategy, adopted in Italy,

combined with an acceleration of the internat ional expansion. In H1 2012, FAY revenues totalled

32.5 million Euros, compared to 35.4 million Euros of H1 2011.

Finally, ROGER VIVIER confirms its excellent performance. In H1 2012 its revenues tota lled 32.7

million euros, more than doubled compared to H1 2011 (the growth is 110.3%, or +101.2% at

constant exchange rates). This brand is continuing its successful expansion in Italy and abroad, with

the aim to become one of the most exclusive maison of luxury accessories in the world.

The strong double-digit sales growth for shoes confirms the undisputed leadership of the Group in

its core business.

Revenues totalled

360.6 million euros in

H1 2012, up 10.8%

from H1 2011 (+8.3%

at constant exchange

rates).

Double-digit growth

also for leather goods

and accessories; sales

of this product

category totalled

(Euro mn) H1 2012 % H1 2011 % Change %

Shoes 360.6 74.7 325.5 74.8 35.1 10.8Leather goods 83.1 17.2 72.7 15.3 10.4 14.3Appareal 38.3 8.0 41.0 9.8 (2.7) (6.5)Other 0.5 0.1 0.3 0.1 0.2 n.s.Total 482.5 100.1 439.5 100.0 43.0 9.8

Shoes74,7%

Leather goods17,2%

Appar.7,9%

Other0,1%

ShoesShoes

Leather goods

0

50

100

150

200

250

300

350

400

H1 2012 H1 2011

Shoes74.7%

Leather goods17.2%

Appar.7.9%

ShoesShoes

Leather goods Leather

goods

Appar.

Appar.

0

50

100

150

200

250

300

350

400

450

500

H1 2012 H1 2011


06.30.2012

17 Interim report

83.1 million euros in H1 2012, up 14.3% from H1 2011 (+10.3% at constant exchange rates). Finally,

revenues from apparel were 38.3 million euros in H1 2012; the small reduction compared to H1

2011 broadly reflects the performance of the FAY brand, as earlier commented.

In line with the international growth strategy implemented by the Group, the importance of the

international markets is increasing significantly: as of June 30 th, 2012 foreign sales represent 58.8%

of the Group’s turnover, compared to 48.6% of June 201 1.

In H1 2012, domestic

revenues totalled

199 million euros;

the difference

compared to H1 2011

reflects also the

already commented

rationalization of the

Italian wholesale

distribution. Double-

digit sales growth

of the area “Rest of

(Euro mn) H1 2012 % H1 2011 % Change %

Italy 199.0 41.2 226.1 54.0 (27.1) (12.0)Europe 100.8 20.9 91.2 21.3 9.7 10.6North America 38.1 7.9 29.3 6.7 8.8 30.0Asia and RoW 144.6 30.0 92.9 18.0 51.7 55.6Total 482.5 100.0 439.5 100.0 43.0 9.8

Italy41,2%

Europe20,9%

Nord Am.6,8%

Asia and RoW

30,0%

Italy Italy

EuropeEurope

North. Am. North. Am.

RoW

0

50

100

150

200

250

300

350

400

H1 2012 H1 2011

Italy41.2%

Europe20.9%

North Am.7.9%

Asia and RoW

30.0%

Italy Italy

EuropeEurope

North Am. North Am.

Asia and RoW

Asia and RoW

0

50

100

150

200

250

300

350

400

450

500

H1 2012 H1 2011

Europe”, driven by the outstanding results of UK and France. Revenues of this area total led 100.8

million euros in H1 2012 (up 10.6% from H1 2011 +9.4% at constant exchange rates). Sales on the

US market accelerated their growth rate, confirming the success enjoyed by the Group’s products

on this important region. In H1 2012, revenues total led 38.1 million euros, up 30% from H1 2011

(+23.3% at constant exchange rates).

Finally, the Group registered excellent results in the area “Asia and Rest of the World”, which

represents approx. 30% of the Group’s turnover as of June 30th

, 2012. Sales of this region totalled

144.6 million euros in H1 2012, up 55.6% from H1 2011 (+47% at constant exchange rates). We

underline the outstanding results posted in Greater China, where the Group confirms its

extraordinary growth rates; significant sales increase also in Japan, both at reported and at

constant rates.

O p e r a t i n g r e s u l t s . EBITDA in H1 2012 totalled 123.5 mill ion euros, up 7.9 million euros from

the amount reported in H1 2011, when it was 115.6 mill ion euros. Gross operating profit was

thus equivalent to 25.6% of consolidated revenue (H1 201 1: 26.3%).

On a comparable exchange rate basis EBITDA would be about 117.7 mill ion euros, and would

represent about 25% of sales.


06.30.2012

18 Interim report

Positive effects on operating results were

generated by the increase in DOS sales driven by

geographical areas (USA and Asia) with higher

margins. EBITDA variation in respect of the first

half 2011 has been driven by the physiological

growth of some operating costs related to the

current business. Lease and rental expenses

( leases of locations and royalties for use of

l icenses) totalled 40.4 mill ion euros at June 30t h

2012, up 10 mill ion euros from 2011 mainly due

to the expansion of the DOS network in respect

to the first half of 2011; they represented

EBITDA (Euro mn)

117.7 123.5

115.6

H1 2012 comparable exch. rate basis

H1 2012 H1 2011

8.4% of revenue at June 30t h

2012 and 6.9% at June 30t h

2011. The cost for Group employee

remuneration totalled 71.3 mill ion euros, compared with 63.1 mill ion euros in the first six

months of the previous year. The change is mainly connected with the increase in headcou nt,

with a total of 3,787 employees at June 30t h

2012, or 238 and 371 persons more than at

December 31s t

and June 30th

2011, respectively. The increase in employees stems mainly from

the expansion of the DOS network and the reinforcement of the corporate operational

functions. At June 30t h

2012, employee costs equalled 14.8% of Group revenue, as compared

with 14.4% in the first six months of 201 1. During the quarter, the Group also made an

additional commitment to social responsibility projects. It contributed approximately 1 mill ion

euros to a project in collaboration with Save the Children , to help Japanese children in Miyagi

and Iwate Prefectures affected by the March 11s t

, 2011 earthquake.

The increase of amortisation and depreciation

expenses is not significant, from 18.4 mill ion

euros in H1 2011, to 19.0 mill ion euros in H1

2012; the ratio on revenue is 3.9% decreased

from H1 2011 (4.2%). Net of additional operating

provisions of 1.1 mill ion euros, EBIT in H1 2012

totalled 103.4 mill ion euros, increased by 7.0

mill ion euros in respect of the first half 2011

when it was 96.4 mill ion euros. Substantially in

l ine the ratio on sales, equal to 21.4% (21.9% H1

2011). On a comparable exchange rate basis, EBIT

would have been 98.1 million euros, and would

EBIT (Euro mn)

98.1 103.4

96.4

H1 2012 comparable exch. rate basis

H1 2012 H1 2011

be equal to 20.8% of revenues. Net financial income for the period was positive for 0.5 mill ion.

Consolidated net profit in H1 2012 was 74.1 mill ion euros, representing growth of 1 2.1% from

TOD’S Group

2012 Half Year Financial Report 06.30.2012

19 Interim report

the figure for the same period of the previous year (f irst six months of 2011: 66.1 mill ion

euros). At June 30t h

2012, net profit was equal to 15.4% of revenue, compared with 15.0% in H1

2011. Net profit shows the result after income taxes accrued for the period (including the

effects of deferred taxes) totalling 29.9 mill ion euros, for a tax rate of 28.8% , significantly

improved in respect to the first half 2011 (31.8%).

Capital expenditures. Capital expenditure in H1 2012 totalled 26.2 mill ion euros increased in

respect of H1 2011 when they totalled 17.7 mill ion euros , net of intangible asset related to the

agreement signed for f inancing of restoration work on the Coliseum .

26.2

37.7

61.9

96.1

21.3

H1 2012 H1 2011 FY 2011 FY 2010 FY 2009

Tangible & intangible assets -Capital expenditures(Euro mn)

The capital expenditures during the period by the DOS network totalled a bout 11.4 mill ion euros.

This amount was used primarily for both new

DOS openings and for renovation activities

performed during the period; among which,

renovation for boutiques HOGAN at Via

Montenapoleone in Milan and at Rue du

Faubourg Saint-Honoré in Paris. Moreover,

during the first half 2012, it has been

expanded office and showrooms space in

Milan; TOD’S and HOGAN showrooms have

been created in Shanghai and fitting out of

new headquarter, office and showrooms in

Hong Kong.

INVESTMENTS BY ALLOCATION

DOS44%Prod.

20%

Other36%

Net financial position (NFP). At June 30t h

2012, net f inancial position was positive and equal to

79.4 mill ion euros (88.7 mill ion euros at June 30t h

2011), including liquid assets (cash and bank

deposits) for 154.5 mill ion euros, and liabilities for 75.1 mill ion euros, of which 38.8 mill ion

euros for long-term exposures.


06.30.2012

20 Interim report

Net Financial position (Euro 000 ’s) 06.30.11 06.30.12 12.31.11 Change Current f inancial assets

157,017 Cash and cash equivalents 154,542 187,756 (33,214)

157,017 Current f inancial assets 154,542 187,756 (33,214)

Current f inancial l iabilit ies

(25,343) Current account overdraft (30,383) (29,743) (640)

(5,168) Current share of medium-long term financing (5,943) (5,856) (87)

(30,511) Current f inancial l iabilit ies (36,326) (35,599) (727)

126,506 Current net f inancial position 118,216 152,157 (33,941)

Non-Current f inancial l iabilit ies

(37,758) Financing (38,782) (41,408) 2,626

(37,758) Non-Current f inancial l iabilit ies (38,782) (41,408) 2,626

88,748 Net f inancial position 79,434 110,749 (31,315)

Net financial position at June 30t h

2012 amounts to 79.4 mill ion euros (110.7 mill ion euros at

December 31s t

2011). Gross of dividends paid, net f inancia l position would be equal to 156.0

mill ion euros (+45.3% mill ions in respect to December 31s t

2011).

(Euro 000 ’s) Cash Flows H1 2012 H1 2011

Profit ( loss) for the period 74,358 65,409

Non cash items 18,943 18,283

Cash Flow 93,301 83,692

Changes in operating net working capital (24,854) (13,515)

Operating cash flow 68,447 70,177

Cash Flow from (used in) investment activity (26,685) (31,270)

Cash Flow from (used in) f inancing activity (75,703) (51,701)

Cash Flow from (used in) continuing operation (33,941) (12,794)

Cash flow from assets held for sale - -

Cash Flow generated (used) (33,941) (12,794)

Net f inancial position at the beginning of the period 152,157 139,300

Net financial position at the end of the period 118,216 126,506

Change in current net f inancial position (33,941) (1 2 , 7 9 4 )

Cash flow was 93.3 mill ion euros in H1 2012, up 9.6 mill ion euros from H1 2011. Operating cash

flow was 68.4 mill ion euros (70.2 mill ion euros at June 30t h

2011), due to greater use of working

capital, largely connected with the temporary accumulation of inventories due to the advanced

stage of production for the next Fall -Winter collection, which will be sold entirely in the second

half, and due to the DOS network expansion .

In addition, it grew the value of investments to finance capital expenditure , mainly driven by

dividends distribution; net of these, the f ree cash flow used in the period totalled 33.9 mill ion

euros.


06.30.2012

21 Interim report

Significant events occurring after the end of the period

On August 1s t

, 2012 the Group, through the holding company TOD’S S.p.A., purchased 100% of the

share capital of Edmond S.r.l. , an Italian real estate company, which owns a land i n Sant’Elpidio a

Mare. On August 8t h

, 2012 the two Board of Directors deliberated the merger by absorption of

Edmond S.r. l. into TOD’S S.p.A..

Business Outlook

Consistently with its international expansion strategy, the Group confirms to be one of the major

players in the world of luxury and of quality, iconic and exclusive products worldwide. The Italian

environment remains tough, but the Group continues to post outstanding results abroad, in

particular on Asian and US markets , which are maintaining excellent performances. Therefore,

considering also the half -year results, which confirm once more the solid growth of the Group’s

sales and profits, it’s fair to assume that also the second half of the year will achieve good

results, and that the Group will post a signif icant growth in full year 2012.

Sant’Elpidio a Mare, August 8t h

, 2012

The Chairman of the Board of Directors

Diego Della Valle

Half-Year Condensed Financial Statementsas of June 30th 2012

Group


06.30.2012

2 3 Financial Statements

Consolidated Profit and Loss

Euro 000’s H1 2012 H1 2011 Year 2011

Revenues

Sales revenues 482,456 439,458 893,638

Other revenues and income 6,695 8,614 15,994

Total revenues and income 489,151 448,072 909,632

Operating costs

Change in inventories (work in progr. & finished goods) 26,316 16,640 31,798

Cost of raw materials, supplies, and material for consumption (145,043) (103,222) (224,662)

Cost of services (119,826) (135,571) (265,993)

Cost of use of third parties assets (40,444) (30,434) (64,671)

Cost of labour (71,288) (63,125) (126,840)

Other operating charges (15,366) (16,744) (26,847)

Total operating cost (365,651) (332,456) (677,215) EBITDA 123,500 115,616 232,417

Amortization, depreciation and write -downs

Amortization of intangible assets (4,569) (5,341) (9,957)

Depreciation of tangible assets (14,405) (13,102) (25,845)

Other adjustments - - (86)

Total amortization, depreciation and write -downs (18,974) (18,443) (35,888)

Provision (1,097) (757) (1,899)

EBIT 103,429 96,416 194,630

Financial income and charges

F inancial income 8,746 8,391 18,522

Financial charges (8,215) (7,942) (16,266)

Total f inancial income (charges) 531 449 2,256

Income (losses) from equity investments - - -

Profit before taxes 103,960 96,865 196,886

Income taxes (29,890) (30,801) (61,198)

Profit/(Loss) for the period 74,070 66,064 135,688

Non-controll ing interest 288 (655) (691)

Profit /(Loss) of the G roup 74,358 65,409 134,997

EPS (Euro) 2.43 2.14 4.41

EPS diluted (Euro) 2.43 2.14 4.41


06.30.2012


Consolidated Comprehensive Income

Euro 000’s

H1 2012 H1 2011 Profit ( loss) for the period (A) 74,070 66,064

Other Comprehensive Income:

Derivative financial instruments (cash flow hedge) ( * ) 1,702 1,156

Gains/(Losses) from foreign subs idiaries F/S translation 2,251 (3,844)

Total Other Comprehensive Income (B) 3,953 (2,688)

Total Comprehensive Income (A) + (B) 78,023 63,376

Attributable to Shareholders of Parent Company 78,291 62,757

Attributable to non-controll ing interests (268) 619

( * ) Income taxes of the period include tax effect.


06.30.2012


Consolidated Statements of Financial Position

Euro 000’s

06.30.12 12.31.11 06.30.11 Non current-assets

Intangible f ixed assets

Asset with indefinite useful l ife 149,024 149,024 149,024

Key money 22,571 23,731 25,605

Others 28,052 29,250 29,688

Total intangible f ixed assets 199,647 202,005 204,317

Tangible f ixed assets

Building and lands 109,412 109,787 100,660

Plant and machinery 7,431 7,031 4,311

Equipment 14,674 13,613 12,902

Leasehold improvements 37,145 33,496 30,351

Others 31,073 27,072 22,870

Total tangible f ixed assets 199,735 190,999 171,094

Other assets

Real estate investments 41 42 44

Equity investments 20 20 20

Deferred tax assets 44,925 39,603 36,647

Others 10,995 9,661 8,393

Total other assets 55,981 49,326 45,104

Total non-current assets 455,363 442,330 420,515

Current-assets

Inventories 264,221 236,631 227,689

Trade receivables 153,618 150,011 126,468

Tax receivables 20,635 12,839 7,246

Derivative financial instruments 907 1,320 3,506

Others 14,336 13,488 12,565

Cash and cash equivalents 154,542 187,756 157,017

Total current assets 608,259 602,045 534,491

Assets held for sale - - -

Total assets 1,063,622 1,044,375 955,006


06.30.2012


Euro 000’s

(continues) 06.30.12 12.31.11 06.30.11 Equity

Share capital 61,219 61,219 61,219

Capital reserves 214,055 214,055 214,055

Treasury stock - - -

Hedging and translation reserves (918) (4,851) (6,915)

Retained earnings 336,215 277,742 277,962

Profit attributable to the Group 74,358 134,997 65,409

Total Equity attr ibutable to the Group 684,929 683,162 611,730

Non controlling interests

Share capital and reserves 5,521 4,934 5,077

Profit attributable to non controll ing interests (288) 691 6 5 5

Total Equity attr ibutable to non controlling interests 5,233 5,625 5,732

Total Equity 690,162 688,787 617,462

Non current l iabilit ies

Provisions for risks 2,111 1,914 1,515

Deferred tax l iabil it ies 31,842 30,902 28,749

Retirement benefit obligation 11,565 11,565 11,233

Others 19,490 19,584 20,280

Bank borrowings 38,782 41,408 37,758

Total non-current l iabilit ies 103,790 105,373 99,535

Current l iabilit ies

Trade payables 175,350 159,876 144,347

Tax payables 17,908 16,454 18,105

Derivative financial instruments 3,223 6,957 1,769

Others 36,863 31,329 43,277

Banks 36,326 35,599 30,511

Total current l iabilit ies 269,670 250,215 238,009

Liabil it ies held for sale - - -

Total Equity and liabilit ies 1,063,622 1,044,375 955,006


06.30.2012


Consolidated Statements of Cash Flows

Euro 000’s Period Period Jan. – Jun. 12 Jan. – Jun. 11 Profit ( loss) attr ibutable the Group 74,358 65,409

Non cash adjustments :

Amortization, depreciation, revaluation and write -downs 23,128 21,370

Change in employee severa nce indemnity reserve - 499

Change in deferred tax assets/liabil it ies (4,382) (3,593)

Other changes 197 7

Cash Flow (a) 93,301 83,692

Changes in current assets and liabilit ies:

Inventories (30,908) (27,317)

Trade receivables (4,443) (7,071)

Tax receivables (7,796) (3,390)

Other current assets (435) (1,724)

Trade Payables 15,474 14,339

Tax payables 1,454 (1,959)

Other current l iabil it ies 1,800 13,607

Change in operating working capital (b) (24,854) (13,515)

Cash flow from operating activities (c)=(a)+(b) 68,447 70,177

Net investments in tangible and intangible assets (24,622) (36,819)

( Increase) reduction of equity investments - -

Other changes in f ixed assets (730) 6,151

Reduction ( increase) of other non current assets (1,333) (602)

Cash Flow from (used in) investment activities (d) (26,685) (31,270)

Dividends paid (76,524) (61,219)

Changes in long term loans (2,720) 14,687

Capital increase - -

Other changes in shareholders equity 3,933 (3,998)

Changes in non-controll ing interests (392) (1,171)

Cash Flow from (used in) f inancing activities (e) (75,703) (51,701)

Cash Flow from continuing operations (f)=(c)+(d)+(e) (33,941) (12,794)

Cash flow from assets held for sale (g) - -

Net Cash Flow (h)=(f)+(g) (33,941) (12,794)

Net current f inancial position at the beginning of the period 152,157 139,300

Net current f inancial position at the end of the period 118,216 126,506

Change in current net f inancial position (33,941) (12,794)


06.30.2012


Statement of changes in equity

January - June 2012 Euro 000’s Hedging and Total Share Capital translation Retained Group Minority Capital reserves reserves earnings interests interests Total Balance as of 01.01.12 61,219 214,055 (4,851) 412,739 683,162 5,625 688,787

Profit and Loss account 74,358 74,358 (288) 74,070

Directly in Equity 3,933 3,933 20 3,953

Total Comprehensive Income - - 3,933 74,358 78,291 (268) 78,023

Dividends (76,524) (76,524) (124) (76,648)

Capital Increase

Share based payments

Other

Balance as of 06.30.12 61,219 214,055 (918) 410,573 684,929 5,233 690,162

January - June 2011 Euro 000’s Hedging and Total Share Capital translation Retained Group Minority Capital reserves reserves earnings interests interests Total Balance as of 01.01.11 61,219 214,055 (4,263) 340,527 611,538 6,903 618,441

Profit and Loss account 65,409 65,409 655 66,064

Directly in Equity (2,652) (2,652) (36) (2,688)

Total Comprehensive Income - - (2,652) 65,409 62,757 619 63,376

Dividends (61,219) (61,219) (1,790) (63,009)

Capital Increase

Share based payments

Other (1,346) (1,346) (1,346)

Balance as of 06.30.11 61,219 214,055 (6,915) 343,371 611,730 5,732 617,462

Half‐Year Condensed Fiancial Statements as of June 30th 2012 Supplementary notes

Group


06.30.2012

3 0 Supplementary notes

1. General notes

The half-year Financial Report, which includes the half-year condensed financial statements of

TOD’S Group at June 30th, 2012, has been prepared in accordance with Article 154 ter (2, 3 and

4) of the Consolidated Law on Financial Intermediation (“TUF”), introduced by Legislative Decree

195/2007 in implementation of Directive 2004/109/EC (the “Transparency” directive) . The half-

year condensed financial statements complies with IAS 34 – Interim Financial Reporting, adopted

according to the procedure envisaged in Article 6 of EC Regulation no. 1606/2002. Consequently,

it does not include all the information required for the annual report and must be read together

with the annual report prepared for the financial year at December 31s t

2011.

The half-year condensed financial statements includes the half-year condensed financial

statements of TOD’S S .p.A. and its Italian and foreign subsidiaries, together identified as TOD’S

Group, drafted with the reference date of June 30t h

, 2012 (January 1s t

– June 30t h

) .

The half-year condensed financial statements (profit and loss account, comprehensive profit and

loss account, Consolidated Statement of Financial position, Consolidated Statement of Cash

Flows, and Consolidated statement of changes in equity) were drafted in the long form and are

the same as those used for the consolidated financial statements at December 31s t

, 2011.

As envisaged in IAS 34, the notes to the financial statements were drafted in summary form and

refer only to the components of the profit and loss account, balance sheet, and funds flow

statement, whose composition or change in amount or nature was significant. Thus, they

il lustrate additional information for accurate comprehension of Group’s f inancial position at June

30t h

, 2012.

Following art. 3 of Consob resolution n.18079 dated 20 January 2012 we inform you that the

Company adopt the waiver provided by art. 70 (8) and art. 71 (1-bis) of Consob regulation n.

11971/99.

The half-year condensed financial statements at June 30t h

, 2012 was approved by the Board of

Directors of TOD’S S.p.A. on August 8t h

, 2012, when its publication was authorised. It was audited

(limited review) by the independent auditor PricewaterhouseCoopers S.p.A..

2. Accounting policies

The half-year condensed financial statements were prepared according International Accounting

Standards (“IFRS”) issued by International Accounting Standards Board (“IASB”) and approved by

the European Union. IFRS refers also to the International Accounting Stand ards (“IAS”) , in force

at reporting date, and all interpretative documents issued by International Financial Reporting

Interpretations Committee (“SIC”) .


06.30.2012


The accounting standards used to prepare this half-year condensed financial statements are

consistent with those used to prepare the consolidated annual report at 31s t

December 2011, to

which reference is made for full treatment.

i. Accounting standards, amendments and interpretations applied since January 1s t

2012,

relevant for the half-year condensed financial statements of the Group as of June 30th

2012

There are no accounting standards, amendments and interpretations applied since January 1 st

2012, relevant for the Group half-year condensed financial statements .

i i. Accounting standards, amendments and interpretations applied since January 1s t

2012, not

relevant for the half-year condensed financial statements of the Group as of June 30th

2012

IFRS 7 Amendment – Financial Instruments, additional disclosures: the amendment will improve

understandings of f inancial statements users concerning risk exposure on transfer of f inancial

assets and the related effects on the entity f inancial position .

Estimates and assumptions. Preparation of the financial f igures reported on the half-year

condensed financial statements entails making estimates and assumptions based on the

management’s best valuation. Estimates and assumptions are reviewed regularly . If these

estimates and assumptions should change in future from the actual circumstances, they will

obviously be modified for the period in which those circumstances changed.

Specifically with regard to determination of eventual impairment losses affecting fixed assets,

complete tests are performed only when the annual report is prepared, when all information as

might be necessary are available, unless there are indications that require immediate valuation

of eventual impairment losses or the occurrence of events that required reiteration of the

procedure. The analyses carried out at this reporting date have not revealed any impairment

indicators.

Presentation of financial statements drafted in for eign currency. The rates applied for

translation of the financial statements of subsidiaries using a functional currency other than the

currency used for consolidation, are il lustrated in the following table and compared with those

used in the previous period:


06.30.2012


Jan. - June 2012 Jan. - June 2011

Exch. rate at Average Exch. rate at Average June 30 t h exch. rate June 30 t h exch. rate

US Dollar 1.259 1.296 1.445 1.402

UK pound sterl ing 0.807 0.822 0.902 0.868

Swiss franc 1.203 1.205 1.207 1.269

Hong Kong dollar 9.766 10.059 11.247 10.909

Japanese yen 100.13 103.21 116.25 114.93

Hungarian forint 287.77 295.20 266.11 269.36

Singapore dollar 1.597 1.639 1.776 1.765

Korean WON 1,441.00 1,480.45 1,543.19 1,543.88

Chinese Renminbi 8.001 8.189 9.3416 9.169

Macao Pataca 10.059 10.357 11.579 11.230

Albanian Lek 138.14 139.23 141.25 140.59

Indian Rupee 70.120 67.546 64.562 63.088

3. Seasonal or cyclical nature of interim transactions

TOD’S Group engages in a business that, despite the effects related to monthly differences in the

flows of revenues and costs generated by its industrial activity over the course of the year , it

does not manifest significant seasonal or cyclical changes in overall annual sales .

4. Alternative indicators of performances

In order to strip the effects of changes in exchange rates from the average values of the first six

months of 2012 from the results for the six months of 2011, the typical economic indicators

(Revenues, EBITDA, EBIT) have been recalculated by applying the average exchange rates for th e

six months of 2011, thereby rendering them fully comparable with those of the previous period.

These criteria for measuring business performance must not be considered alternative to those

established by IFRS.

Furthermore – as it has already been mentioned in the preceding paragraph, the Group’s cash

f low is uneven from quarter to quarter, largely on account of its industrial activity. Consequently,

the analysis of interim results and financial stat ement indicators (EBITDA, EBIT, f inancial position

and working capital) cannot be considered fully representative, and it would thus be improper to

consider the indicators for the reference period to be in proportion to the results for the entire

financial year.

5. Scope of consolidation

On May 4th 2012, it has been incorporated TOD’S Brasil Comércio de Artigos de Cuoro Ltda

(“TOD’S Brasil Ltda”) , controlled for 90% by the parent company TOD ’S S.p.A. and for 10% by the

sub-holding TOD’S International BV. The company was not operative at 30 June 2012.


06.30.2012


As previously mentioned, the parent company TOD’S S.p.A. acquired Formapura S.r. l. effective

from January 1s t

, 2012. Line-by-line consolidation of this company , which has not produced any

significant effects on the current financial statements, represents the only change in the

consolidation scope as compared with the Consolidated Financial Statements at Decemb er 31s t

,

2011. Moreover, the subsidiary E -TOD’S Inc. became fully operational in Q1 2012 (after being

incorporated in 2011). The latter business unit is responsible for e -commerce in the United

States.

Compared with the half-year condensed financial state ments at June 30s t

, 2011, it should also be

mentioned that the indirect subsidiary Tod’s Saint Barth Sas – which was non-operating for all of

FY 2011 – was deconsolidated effective December 31s t

, 2011.

It is assumed that the Group controls those companies in which it does not own more th an 50%

of the capital, and thus disposes of the same p ercentage of voting power at the Shareholders’

Meeting, where the Group has the power to exercise direct or indirect control of those

companies’ f inancial and operating policies in view of realizing benefits from their activities.

The following list i l lustrates the ent ire consolidation scope at June 30th, 2012:

Parent Company TOD’S S.p.a. S .E lp id io a Mare - I ta ly Share Capital (S.C.) - Euro 61,218,802

Direct subsidiaries TOD’S Deutsch. Gmbh TOD’S France Sas An.Del. USA Inc. TOD’S Internat. BV Dusseldorf - Germany Par is - F rance New York - U.S .A Amsterdam –Nether lands S .C . - Euro 153,387.56 S .C . - Euro 780,000 S .C . - Usd 3,700,000 S .C . - Euro 2,600,200 % held: 100% % held: 100% % held: 100% % held: 100%

Del.Com S.r. l . Holpaf B.V. TOD’S Bras i l Ltda S .E lp id io a Mare – I ta ly Amsterdam – Nether lands San Paolo - Braz i l S .C . - Euro 31 ,200 S .C . - Euro 5,000,000 S .C . – Br l 500,000 % held: 100% % held: 100% % held: 100%

Indirect subsidiaries

Cal .Del. USA Inc. TOD’S Tex Del USA Inc. Deva Inc. F lor .Del. USA Inc. Bever ly H i l ls, Ca - U.S .A . Dal las, Tx - U.S .A Wi lmington, DE – U.S.A . Ta l lahassee, F l - U.S.A. S .C . - Usd 10,000 S .C . - Usd 10,000 S .C . - Usd 500,000 S .C . - Usd 10,000 % held: 100% % held: 100% % held: 100% % held: 100%

Hono.Del. Inc . I l .Del. USA Inc. Neva.Del. Inc. Or .Del. USA Inc. Honolulu, H i - U.S.A. Spr ingf ie ld, I l - U.S .A . Carson C ity, Nv - U.S .A. Sacramento, Ca - U.S .A. S .C . - Usd 10,000 S .C . - Usd 10,000 S .C . - Usd 10,000 S .C . - Usd 10,000 % held: 100% % held: 100% % held: 100% % held: 100%

E-TOD’S Inc. Gen.Del SA Sandel SA TOD’S Belg ique S.p.r . l. Wilmington, De – U .S .A. Ginevra - Switzer land San Marino Bruxel les - Belg ium S .C . – Usd 200 S .C . - Chf 200,000 S .C . - Euro 258,000 S .C . - Euro 300,000 % held: 100% % held: 100% % held: 100% % held: 100%

TOD’S Espana SL TOD’S Hong Kong Ltd TOD’S Japan KK Alban.Del Sh.p.k. Madrid – Spain Hong Kong Tokyo - Japan T irana - A lbania S .C . - Euro 468,539.77 S .C . - Usd 16,550,000 S .C . - Jpy 100,000,000 S .C . - Euro 720,000 % held: 100% % held: 100% % held: 100% held: 100%


06.30.2012


Indirect subsidiaries

TOD’S Singapore Pte Ltd Un.Del Kft TOD’S UK Ltd Webcover Ltd S ingapore Tata - Hungary London – Great Br i ta in London – Great Br i ta in S .C . - Sgd 300 ,000 S .C . - Huf 42,900,000 S .C . - Gbp 350 ,000.00 S .C . - Gbp 2 .00 % held: 100% % held: 100% % held: 100% % held: 50%

TOD’S Luxembourg SA TOD’S Korea Inc. TOD’S Macao ltd TOD’S (Shanghai) Tr. Co Ltd Luxembourg Seoul - Korea Macao Shanghai – China S .C . - Euro 31 ,000.00 S .C . - Won 1,600,000,000 S .C . – MOP 20,000,000 S .C . – USD 6 ,000,000 % held: 50% % held: 100% % held: 100% % held: 100% TOD’S India Retail Pte Ltd Re .Se.Del. S .r . l . De l.Pav. S. r . l . F i lang ier i 29 S. r . l . Mumbai - India S .E lp id io a Mare- I ta ly S .E lp id io a Mare- I ta ly S .E lp id io a Mare- I ta ly S .C . – INR 193,900,000 S .C . - Euro 25 ,000.00 S .C . - Euro 50 ,000 S .C . - Euro 100,000 held: 51% held : 100% held: 50% held: 50% 6. Segment reporting

The search for higher levels of operating efficiency ha s revealed the general importance of a

significant portion of service activities (f irst and foremost production), both at the central and

peripheral levels, as the basis for maximi sing profitability. This renders the possibility of

aggressive segmentation of the business uneconomical under current circumstances.

At the operating level, Group’s organization is based on an articulated matrix structure according

to the different functions/activities in the value chain, alternatively according to brand, product,

channel and geographical area. The overall organization envisages a unified strategic vision of

the business.

This type of organization is reflected in the ways in which management monitors and strategically

focuses the Group’s activities.

The economic disclosure set out in the Interim Report is completed as follows, including a break -

down of consolidated revenues by BRAND, CHANNEL, PRODUCT TYPE and REGION, and INCOME

STATEMENT for the business:

2012 Capital expenditures

By investment allocation (Euro mn) By region (Euro mn)

11,4

5,3

9,5

-

8,6

4,4

24,7

Key money DOS Prod. Other

H1 2009

H1 2008

17,2

1,8 1,0

6,2

29,6

31,4

3,7

Italy Europe North Am. Asia and RoW

H1 2009

H1 2008

8.6

4.4

24.7

-

9.2

3.8

3.1

Key money DOS Prod. Other

H1 2011

H1 2010

29.6

3.0 1.4

3.7

7.5

2.91.5

4.2

Italy Europe North Am. Asia and RoW

H1 2011

H1 2010


06.30.2012


Distribution network

TOD’S GROUP - Distr ibution network

06.30.12 06.30.11

Italy DOS 44 41

FRANCHISED STORES 4 5

Europe DOS 34 33


USA DOS 14 14

FRANCHISED STORES 2 -

Asia and RoW DOS 90 73


Total DOS 182 161

Total FRANCHISED STORES 71 70

TOD'S HOGAN

120

61

107

58

DOS Franchised stores

H1 2012 H1 2011

16

8

13

10


H1 2012 H1 2011

120

61

107

58

DOS Franchised storesH1 2012 H1 2011

16

8

13

10


FAYROGER

VIVIER

2

0

3

0


H1 2012 H1 2011

10

1

7

1


H1 2012 H1 2011

2

0

3

0


10

1

7

1



06.30.2012


7. Earnings per share

The calculation of base and diluted earnings per share is based on the followings:

i . R e f e r e n c e p r o f i t

(Euro 000’s) From continuing and discontinued operations HY 2012 H1 2011 Profit used to determine basic earning per share 74,358 65,409

Dilution effects - -

Profit used to determine dilu ted earning per share 74,358 65,409

(Euro 000’s)

From continuing operations H1 2012 H1 2011 Profit attributable to equity holders of the Company 74,358 65,409

Income (Loss) from discontinued operations - -

Profit used to determine basic earning per share 74,358 65,409

Dilution effects - -

Profit used to determine diluted earning per share 74,358 65,409

In both periods, f irst half 2012 and 2011, there were no dilutions of net consolidated earnings,

partly as a result of activities that were discontinued during the periods in question.

i i . R e f e r e n c e n u m b e r o f s h a r e s H1 2012 H1 2011 Weighted average number of shares to determine basic earning per share 30,609,401 30,609,401

Share options - -

Weighted average number of shares to determine d iluted earning per share 30,609,401 30,609,401

8. Dividends

Pursuant to a resolution by the Shareholders’ Meeting of April 19t h

2012, the parent company

TOD’S S.p.A . paid its shareholders dividends in May for the net prof it realised in FY 2011. The

aggregate value of dividends paid totals 76,523,502.50 euros, at the rate of 2.50 euros for each

of the 30,609,401 shares comprising share capital at the ex dividend date (May 21s t

2012).

Moreover, other Group companies paid 124 thousand euros in dividends to their own minority

shareholders.


06.30.2012


9. Intangible and tangible fixed assets

Capital expenditure in H1 2012 totalled 26.2 mill ion euros. The capital expenditures of the DOS

network totalled about 11.4 mill ion euros. This amount was used primarily for both new DOS

openings and for renovation activities performed during the period ; among which, renovation for

boutiques HOGAN at Via Montenapoleone in Milan and at Rue du Faubourg Saint-Honoré in Paris.

Moreover, during the first half 2012, it has been expanded office and showrooms space in Milan;

TOD’S and HOGAN showrooms have been created in Shanghai and f itting out of new headquarter,

office and showrooms in Hong Kong

Intangible assets of TOD’S S .p.A. include the net book value related to the agreement signed with

the Ministry of Cultural Affairs and the Supervisor for Central Rome ’s Archaeological Area for

f inancing the restoration work on the Coliseum, amounting to 15.7 mill ion euros. The liability for

f inancing restoration works, measured discounting expected cash flows for restoration activities

based on the expected work plan , amounts to 19.7 mill ion euros, of which 19.0 mill ion euros for

long-term exposures.

10. Net financial position

Net Financial position (Euro 000 ’s)

06.30.11 06.30.12 12.31.11 Change Current f inancial assets

157,017 Cash and cash equivalents 154,542 187,756 (33,214)

157,017 Current f inancial assets 154,542 187,756 (33,214)

Current f inancial l iabilit ies

(25,343) Current account overdraft (30,383) (29,743) (640)

(5,168) Current share of medium-long term financing (5,943) (5,856) (87)

(30,511) Current f inancial l iabilit ies (36,326) (35,599) (727)

126,506 Current net f inancial position 118,216 152,157 (33,941)

Non-Current f inancial l iabilit ies

(37,758) Financing (38,782) (41,408) 2,626

(37,758) Non-Current f inancial l iabilit ies (38,782) (41,408) 2,626

88,748 Net f inancial position 79,434 110,749 (31,315)

Net f inancial position at June 30t h

2012 amounts to 79.4 mill ion euros (110.7 mill ion euros at

December 31s t

2011). Gross of dividends paid, net f inancia l position would be equal to 156.0

mill ion euros (+45.3% mill ions in respect to December 31s t

2011).

11. Hedging of financial risks

Consistently with the provisions of the Code of Self -discipline of Listed Companies, TOD’S Group

has set up a system for monitoring the financial risks to which it is exposed. These can be

identified as follows:


06.30.2012


i. Credit risk. This represents the exposure of TOD’S Group to potential losses stemming from

default on the obligations assumed by co mmercial counterparties.

i i. Liquidity risk. This represents the risk stemming from the unavailability of f inancial resources

as necessary to meet the short -term commitments assumed by the Group and its own

financial requirements.

i i i. Market risk. This type of risk includes those risks that are directly or indirectly tied with the

fluctuation of physical and financial market prices to which a company is exposed:

– exchange rate risk;

– interest rate risk;

– commodity risk, which is tied to the volatil ity of prices for the raw materials used in the

production process.

The policy adopted for management of the aforementioned risks, provides that the Group

constantly monitors the financial risks connected with its operations, so that it can assess thei r

potential negative effects in advance and take the necessary actions to mitigate them.

Particularly in regard to exchange rate risk, the Group has adopted a risk management policy that

pursues the objective of guarant eeing that the value in euro of the receipts from wholesale sales

in foreign currency of each collection (Spring -Summer and Fall-Winter) is equal or better on

average to what would be obtained by applying the set target exchange rates. The foregoing

purposes are pursued by execut ing forward contracts for each individual currency in which the

Group operates (principally USD, CHF, GBP, HKD, SGD), in order to hedge a specific percentage of

revenue volumes (and costs) expected in the individual currencies other than the functional

currency, without any speculative or trading purpose, consistently with the strategic policies

adopted for prudential management of cash flows. This might involve foregoing opportunities,

but also avoids incurring speculative risks. The fair value of these derivative financial instruments

is classif iable as being 2n d

level, according to the hierarchy of fair value requested by IFRS 7.

12. Transactions with related parties

Effective January 1s t

, 2011, the Group adopted the new procedure for related party transacti ons

in implementation of the Regulation of Related Party Transactions, adopted by CONSOB with

Resolution no. 17221 of March 12n d

, 2010 and subsequently amended with Resolution no. 17389

of June 23rd

, 2010.

In accordance with market best practices, signif icant related party transactions are subject to an

in-depth review involving, inter alia: ( i) complete, prompt transmission of material information to

the delegated Board of Directors committees , especially to the Control and Risk Committee (ex

Internal Control and Corporate Governance Committee) and – beginning January 1s t

, 2011 – to

the Independent Directors Committee, each within the ambit of their delegated responsibilities .


06.30.2012


These Committees, respectively for the majority or entirety made up of independent directors, in

the performance of their functions also avail themselves of the assistance of independent

experts; ( i i) the issuance of an opinion (either binding or non-binding, as appl icable) before

approval of the transaction by the Board of Directors (or, if appropriate, by the body delegated

to resolve on the transaction). Without prejudice to the principles of procedural fairness cited

hereinabove, no unusual or atypical related party transactions, or other related party

transactions that might compromise corporate assets or the completeness and fairness of Group

accounting and other information were ex ecuted during the period. All transactions – which are

connected with the normal operations of TOD’S Group companies – were executed solely on

behalf of the Group by applying contractual conditions consistent with those that can

theoretically be obtained on an arm’s length basis .

Transactions concluded during the period.

On December 28t h

, 2011, and effective from January 1s t

, 2012, the Group executed an acquisition

in view of integrating a series of outsourced strategic marketing and promotion activities in its

own organisation. For less than 1 mill ion euros, the Group acquired, through its parent company

TOD’S S.p.A., 100% of the equity of Formapura S.r. l., an Italian company owned and controlled by

Director Emanuele Della Valle . On May 10t h

, 2012 the Board of Directors of TOD’S S.p.A. resolved

to take over Formapura S.r. l. through merger in order to complete the integration and

streamlining of its activities, organisation and functions .

In continuation of contractual relati onships already existing in 2011, TOD’S Group continued to

maintain a series of contractual relationship with related parties (directors/controlling or

significant shareholders) in the first half of 2012. The main object of the transactions was the

sale of products, lease of sales spaces, show rooms and offices, use of the ROGER VIVIER brand

license.

i. Commercial transactions with related parties – Revenues Euro 000’s

Sales of Rendering Sales Operating Other products of services of assets Royalties lease operations

30 June 2012

Parent Company ( * ) 1,922 2,249 2,205 27

Directors

Exec. with strat. respons.

Total 1,922 2,249 - 2,205 27 -

30 June 2011

Parent Company ( * ) 1,182 1,296 5,093 67

Directors 1 32


Totale 1,183 1,296 - 5,093 99 -


06.30.2012


i i. Commercial transactions with related parties – Costs Euro 000’s Purchase of Rendering Sales Operating Other products of services of assets Royalties lease operations

30 June 2012

Parent Company ( * ) 763 13 2,150 1,834 73

Directors 192


Total 763 13 - 2,342 1,834 73

30 June 2011

Parent Company ( * ) 978 1,061 2,132 4

Directors 1,741


Total 978 1,741 - 1,061 2,132 4

i i i. Commercial transactions with related parties – Receivables and payables Euro000’s 06.30.12 06.30.11

Receivables Payables Receivables Payables

Parent Company ( * ) 1,775 1,717 4,496 1,721

Directors 69 67 7 1,230


Total 1,844 1,784 4,503 2,951

(*) Companies directly or indirectly controlled by Chairman of the Board of Directors Diego Della Valle.

Given the insignificance of these amounts, they ha ve not been separately l isted on the face of

the financial statements. Transactions between Group companies included in the s cope of

consolidation have been eliminated from the half-year condensed financial statements .

Consequently, they have not been highlighted in these notes.

Compensation of Directors, Statutory Auditors and General Managers

Compensation of Directors and Executives with strategic responsibilities of TOD’s S.p.A. have

been determined in accordance with the Compensa tion Policy adopted by TOD’S S.p.A. Board of

Directors resolution at November 11s t

, 2011. For the first half of 2012 (including compensation

for the activities performed at subsidiarie s) compensation amount to respectively 1.6 mill ion

euros and 0.3 mill ion euros.

Compensation for Statutory Auditors of TOD’S S.p.A. at June 30t h

, 2012 amount to 0.2 mill ion of

euro.


06.30.2012

4 1 Attestation

Attestation of the Half-Year condensed financial statements of TOD’S Group pursuant

article 154 bis of D.LGS. 58/98 and of article 81-ter of Consob Regulation n. 11971 of

May 14t h

1999 and further modifications and integrations.

1. The undersigned Stefano Sincini, Chief Executive Officer of TOD’S S.p.A., and Rodolfo Ubaldi,

manager responsible for the drawing up of the financial reports of TOD’S S.p.A., certify, in

accordance with the provisions of Article 154 -bis, subsections 3 and 4, of Legislative Decree no.

58 of February 24t h

, 1998:

• the adequacy in terms of the company’s characteristics and

• effective application

of administrative and accounting procedures for pre paration of the 2012 Half Year condensed

financial statements during the period January 1s t

, 2012 to June 30t h

, 2012.

2. They also certify that Half-Year condensed financial statements :

a) have been prepared in accordance with Internati onal Financial Reporting Standards, as

endorsed by the European Union through Regulation (EC) 1606/2002 of the European

Parliament and Counsel, dated 19t h

July 2002;

b ) correspond with the account book and ledger entries;

c) give a true and fair view of the assets, l iabilities, income and financial position of the

issuer and entities included in the scope of consolidation.

3. Interim report provides a reliable analysis of the significant events for the first six months of

the current fiscal year and the impa ct of such events on the Half year condensed financial

statements as well as a description of the main risks and uncertainties for the second half of the

year in addition to a reliable analysis of the information on the significant related party

transactions.

Sant’Elpidio a Mare, August 8t h

, 2012

Manager responsible for drawing Chief Executive Officer up of the financial report

Stefano Sincini Rodolfo Ubaldi

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