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ANNUAL REPORT 2012

MOLESKINE S.p.A.
Consolidated Statement of Financial Position
as of December 31 2012

AUDITORS REPORT IN ACCORDANCE WITH ARTICLE 14 OF LEGISLATIVE DECREE


N 39 OF 27 JANUARY 2010
To the shareholders of
Moleskine SpA

We have audited the consolidated financial statements of Moleskine SpA and its subsidiaries
(Moleskine Group) as of 31 December 2012 which comprise the statement of consolidated
financial position, statement of consolidated comprehensive income, statement of changes in
consolidated equity,
equit statement of consolidated cash flows and related explanatory notes. The
directors of Moleskine SpA are responsible for the preparation of these financial statements in
compliance with the International Financial Reporting Standards as adopted by the European
Union. Our responsibility is to express an opinion on these consolidated
consolidated financial statements
based on our audit.

We conducted our audit in accordance with the auditing standards issued by the Italian
Accounting Profession (Consiglio Nazionale dei Dottori Commercialisti e degli Esperti
Contabili) and recommended by Consob,, the Italian Commission for listed Companies and the
Stock Exchange. Those standards require that we plan and perform the audit to obtain the
necessary assurance about whether the consolidated financial statements are free of material
misstatement and, taken as a whole, are presented fairly. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimate
estimates made by
the directors. We believe that our audit provides a reasonable basis for our opinion.
For the opinion on the consolidated financial statements of the prior year, which are presented
for comparative purposes as required by law, reference is made to our report dated 20
September 2012 on aggregated consolidated financial statements of Moleskine Group for the
years ended 31 December 2011,
20 2010 and 2009, prepared in connection with the registration
document for the public offering and admission to listing
listing of the ordinary shares of Moleskine
SpA,, deposited with Consob on 11 January 2013 following the communication of the approval
dated 9 January 2013.

In our opinion, the consolidated financial statements of the Moleskine Group as of 31


December 2012 comply with the International Financial Reporting Standards as adopted by
the European Union; accordingly, they have been prepared clearly and give a true and fair
view of the financial position, result of operations and cash flows of the Moleskine Group for
the year then ended.

The directors of Moleskine SpA are responsible for the preparation of a report on operations in
compliance with the applicable laws.
law Our responsibility is to express an opinion on the

PricewaterhouseCoopers SpA
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consistency of the report on operations with the financial statements, as required by law. For
this purpose, we have performed the procedures required under Italian Auditing Standard
n001
001 issued by Consiglio Nazionale dei Dottori Commercialisti e degli Es
Esperti Contabili and
recommended by Consob.
C
. In our opinion, the report on operations is consistent with the
consolidated financial statements of Moleskine Group as of 31 December 201
2012.
Milan, 25 February 2013
PricewaterhouseCoopers SpA
Signed by
Giorgio Greco
(Partner)

This report has been translated into the English language from the original, which was issued in
Italian, solely for the convenience of international readers.

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MANAGEMENT REPORT
MOLESKINE GROUP

Moleskine Group

BOARD OF DIRECTORS AND AUDITORS


AUDITORS AS OF DECEMBER 31, 2012

Board
Board of Directors1

Carlo Bosello
Arrigo Berni
Marco Ariello
Francesco Franceschi
Philippe Claude Sevin
Giuseppe Zocco

Chairman
Chief Executive Officer
Director
Director
Director
Director

Board of Statutory Auditors2

Rocco Santoro
Andrea Bolletta
Leo De Rosa
Annalisa Domizi
Andrea Lo Presti

Chairman
Statutory Auditors
Statutory Auditors
Alternate Statutory Auditors
Alternate Statutory Auditors

Independent Auditors

PricewaterhouseCoopers SpA

1
The board of directors in office at the date of approval of these consolidated financial statements as of December 31,2012, appointed at the AGM
of June 14, 2011, will resign from the date when the Companys shares start to be traded on the MTA.
2
The board of statutory auditors in office at the date of approval of these consolidated financial statements as of December 31, 2012, appointed at
the AGM of June14, 2011, will resign from the date when the Companys shares start to be traded on the MTA.

Management report 2012

Pagina 1

Moleskine Group

STRUCTURE OF THE GROUP AS OF DECEMBER 31, 2012

The Group includes, in addition to the holding company Moleskine S.p.A. (Moleskine
Moleskine
Moleskine or the
Company
Company),
Moleskine America),
Company Moleskine America, Inc. (Moleskine
America 100% wholly owned and located in
New York, 210 Eleventh Avenue, Suite 1004 and, starting from the second half of 2011, Moleskine
Asia Ltd (Moleskine
Moleskine Asia),
Asia located in Hong Kong, Suite 3202A, 32/F, The Centrium, and 100%
wholly owned by the Company. On July 24, 2012, a new company (Moleskine
Moleskine Shanghai)
Shanghai was
created, owned entirely by the Group through Moleskine Asia and located in Shanghai, 500
Xiangyang Road South, Suite 1406 Xuhui District.
The following chart shows the structure of the Group and Moleskines subsidiaries with the
percentages held.

Moleskine
S.p.A.

Moleskine
America

Moleskine
Asia

100%

100%

Moleskine
Shanghai
100%

Management report 2012

Pagina 2

Moleskine Group

INTRODUCTION
With reference to the year ended December 31, 2012, the figures given in this report together with
the associated remarks are meant to give an overview of Group's equity and financial and situation,
the changes that occurred during the period in question, as well as any significant events that
affected the results.
OPERATING CONDITIONS AND BUSINESS DEVELOPMENT
DEVELOPMENT
The Group develops, markets and sells a family of products through the Moleskine brand that
provide open platforms for creativity and communication, contributing to the expansion and
dissemination of culture and knowledge and are closely connected to the digital world.
The Group sells three lines of products and services:
i) Paper products, such as notebooks, diaries, home office products and gifts (the "Paper
Paper
Collections"),
Collections
ii) The writing, travelling & reading collections (the "WTR
WTR Collections"),
which include
Collections
objects such as pens, pencils, bags, reading glasses, booklights which collections were
launched mid2011, and
iii) Digital services and products (Digital
Digital)
Digital such as templates downloadable from its
website, applications for smartphones and tablets, a virtual marketplace and the new line
Smart Notebook recently introduced (October 2012) and developed together with Evernote,
as well as a printondemand service offered through a partnership with Milk Books.
The Group distributes products, directly or indirectly, in approximately 90 countries:
(i)

indirectly through a network of 51 distributors (the "B2C


B2C channel")
channel that serves
bookstores, department stores, specialty stores, stationery stores and museums
("Retailers
Retailers");
Retailers and

(ii)

directly a) through its own distribution network, selling customized editions to


business customers ("B2B
B2B"),
b) through its website ("eeCommerce"),
and c)
B2B
Commerce
through its retail network composed of 10 directly operated stores, 4 in China and 6
in Italy.

Activities carried out by the Group to increase brand recognition


In 2012, the Group attended the Fuori Salone event in Milan and the PPAI Expo 2012 (Promotional
Products Association International) tradeshow, which was held in Los Angeles in January 2012,
presenting several personalized products for the B2B channel. In the third quarter of 2012, the
Group also organized events, workshops and temporary stores at the architects exhibitions for the
biennial Beijing and Venice, participated with own stands at the digital exhibition held in Berlin
(IFA) and continued to invest in sponsorships to increase brand visibility in social
communications. The Company has registered a new logo and a new font with an increased
graphic impact in terms of recognition, especially relating to the WTR collection, ensuring a

Management report 2012

Pagina 3

Moleskine Group

protection in all of the countries where the existing brand is present, with the aim of creating a
flexible and replicable system which reinforces the products and uniqueness of our offering.
The activities carried out by the Group to increase brand visibility during 2012 included projects
implemented online by i) launching structured email marketing activities (newsletters) aimed at
the databank of registered users, ii) developing a MyMoleskine website page where users can
upload images and videos of their creations on Moleskine journals, iii) planning and implementing
on the Web content (including videos) relating to new product launches, iv) strengthening the
Groups presence on the main social networks (Facebook, Twitter, YouTube, Vimeo, Flickr, G+,
Pinterest, Instagram) through the development of dedicated pages, and v) optimizing search
engines linked to the Groups websites and strengthening the concept of closeness to the end
user, published in 6 different languages.

Expansion of the product line


The Group developed a process for the innovation and development of new products. This process
is performed both internally within the Group and in cooperation with outside designers, based on
recommendations from a product committee, comprising the top management of the Company.
More specifically, the Group continually developed and expanded the product mix for its core
business categories, the Paper Collections, as represented by the launch of the WTR Collections in
2011.

New sales channels for product distribution


The launch of the WTR Collections resulted in a significant increase in sales through the
department store and Retail channels. The Group has commenced pursuing a strategy of opening
DOS (Directly Operated Stores) through which all categories of its products are directly distributed
to consumers. As of December 31, 2012, 9 DOS had been opened, 5 in Italy (in the train stations of
Milan, Rome, Turin and Naples and at Romes Fiumicino airport) and 4 in China (Xintiandi, Kerry
Parkside, Raffles City Mall and Takashimaya Dept. Store).

Operating activities in currencies different from the euro


The Group performs a significant portion of its business in international markets, including
through companies that use currencies different from the euro (Moleskine America, Moleskine
Asia and Moleskine Shanghai). Consequently, revenues and expenses denominated in foreign
currencies can be affected by fluctuations in exchange rates, which have an impact on sales
margins. Likewise, trade payables and receivables denominated in currencies different from the
euro can be affected by fluctuations in exchange rates, with an impact on the results of operations.
The main exchange rates to which the Group is exposed are:

USD, for sales and purchases in USD made on the American and Asian markets;
GBP, for sales made in GBP in the United Kingdom.

Management report 2012

Pagina 4

Moleskine Group

In 2012, the U.S. dollar and the British pound strengthened by 7.7% and 6.6%, respectively, against
the euro.
The table below provides a breakdown of revenues by currency for the years ended December 31,
2012 and 2011:
Y ear en d ed D ec emb er 3 1,
2 0 12
Euro
USD
GBP
HKD
CNY
Rev en u es

43.977
27.943
3.603
2.545
68
7 8 . 13 6

2 0 11
%
56,3%
35,8%
4,6%
3,3%
0,1%

%
64,5%
30,4%
5,2%
0,0%
0,0%

43.366
20.422
3.467

10 0 , 0 %

67.255

10 0 , 0 %

The following table shows the movement in revenues translated at the actual exchange rate for the
period compared to a constant exchange rate.
In thousands of Euro

USD
GBP

c ur r ent exc h an g e r ate


2 0 12 v s 2 0 11
%
36,8%
3,9%

c o n stant exc h ang e r ate


2 0 12 v s 2 0 11
%
26,3%
3,1%

16 , 2 %

13 , 1%

Rev enu es

The table below provides a breakdown of costs by currency for the years ended December 31, 2012
and 2011:
In thousands of Euro
Year ended December 3 1,
2 0 12

2 0 11
%

Euro

23.635

51,3%

22.060

57,9%

USD

20.675

44,9%

15.758

41,3%

GBP

88

0,2%

12

0,0%

HKD

1.318

2,9%

295

0,8%

335

0,7%

0,0%

46.051

10 0 , 0 %

3 8 . 12 4

Other currencies
C osts for fini shed products, r aw materi als and consumabl es, ser vi ce costs and personnel costs

10 0 , 0 %

Purchases denominated in foreign currencies, which are mainly made by the Company, primarily
relate to purchases in China.
The Group does not adopt specific policies to hedge fluctuations in exchange rates other than
adjusting price lists in foreign currencies. Instead, the Group has a policy which is aimed at
matching purchases and sales in the same currency, thereby mitigating the risk of fluctuations in
exchange rates (socalled natural hedging).

Management report 2012

Pagina 5

Moleskine Group

Seasonality of sales
Sales in the market in which the Group operates are characterized by seasonality which therefore
has an impact on our results of operations.
In the B2C channel and specifically with regard to Diaries and Planners, sales are concentrated
mainly in the second quarter and part of the third quarter of the year. On the other hand, most of
the Groups sales in the B2B channel, eCommerce and Retail activities (DOS) are concentrated in
the last quarter of each year, i.e., in the Christmas period.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
The following table sets forth the Groups income statement for the years ended December 31,
2012 and 2011:
Year ended D ecemb er 3 1,
2 0 12

C hang e
2 0 11

% of
r evenues

In thousands of Euro and percentage of revenues

2 0 12 v s 2 0 11
% of
r ev enues

Revenues
Other income
Finished products, raw materials and consumables
Service costs
Personnel costs
Other operating expenses
Depreciation, amortization and impairments

78.136
203
(17.996)
(18.256)
(9.799)
(916)
(953)

100,0%
0,3%
(23,0%)
(23,4%)
(12,5%)
(1,2%)
(1,2%)

67.255
344
(18.028)
(12.589)
(7.507)
(1.034)
(823)

100,0%
0,5%
(26,8%)
(18,7%)
(11,2%)
(1,5%)
(1,2%)

10.881
(141)
32
(5.667)
(2.292)
118
(130)

16,2%
(41,0%)
(0,2%)
45,0%
30,5%
(11,4%)
15,8%

Oper ati ng pr o fit

3 0 . 4 19

3 8 ,9 %

2 7 .6 18

4 1,1%

2.801

10 , 1%

Finance expense
Finance income

(3.374)
33

(4,3%)
0,0%

(6.730)
396

(10,0%)
0,6%

3.356
(363)

(49,9%)
(91,7%)

27.078

3 4 ,7 %

2 1. 2 8 4

3 1, 6 %

5.794

27,2%

Income tax expense

(8.881)

(11,4%)

(7.464)

(11,1%)

(1.417)

19,0%

Net pr o fit

18 . 19 7

2 3 ,3 %

13 . 8 2 0

20,5%

4.377

3 1, 7 %

Pr o fi t b efo r e i nc ome tax

***
In the table that follows, income statement data were restated to show changes in EBIT and
EBITDA, which serve as indicators of operating profitability.
Year ended D ecemb er 3 1,
2 0 12
2 0 11

In thousands of Euro and percentage of revenues


Operating profit (EBIT)
Depreciation, amortization and impairments
EB ITD A (* )

% of r evenues

30.419
953

27.618
823

3 1. 3 7 2
40,2%

28.441
42,3%

(*) The Group defines EBITDA as the operating profit (EBIT) before depreciation, amortization and impairments of noncurrent assets. EBITDA is
not recognized as a measure of financial performance or liquidity under IFRS. Since all companies may not calculate this measure in an identical
manner, the Groups presentation may not be consistent with similar measures used by other companies. Therefore, investors should not place
undue reliance on this data.

Management report 2012

Pagina 6

Moleskine Group

Revenues by distribution channel and product line


The following tables set forth a breakdown of revenues by distribution channel and product line for
the years ended December 31, 2012 and 2011:
In thousands of Euro
Year ended December 3 1,
Revenues by di str i buti on channel

2 0 12

C hang es

2 0 11
% of
r evenues

2 0 12 vs 2 0 11
% of
r evenues

Indi r ect di str i buti on


B2C revenues (1)

61.163

78,3%

55.478

82,5%

5.685

10,2%

12.720
3.293
960

16,3%
4,2%
1,2%

10.664
1.113

15,9%
1,7%
0,0%

2.056
2.180
960

19,3%
195,9%
n.a.

7 8 . 13 6

10 0 , 0 %

10 . 8 8 1

16 , 2 %

Di r ect di str i buti on


B2B revenues
Ecommerce revenues (2)
Retail revenues (3)
Revenues

67.255

10 0 , 0 %

In thousands of Euro
Year ended December 3 1,
Revenues by product l ine

2 0 12

2 0 11
% of
revenues

Paper collections
WTR collections (1) (4)
Revenues

(1)

(2)
(3)

(4)

C hang es
2 0 12 vs 2 0 11
% of
revenues

72.667
5.469

93,0%
7,0%

62.816
4.439

7 8 .13 6

10 0 ,0 %

6 7 .2 5 5

93,4%
6,6%
10 0 ,0 %

%
9.851
1.030

15,7%
23,2%

10 .8 8 1

16 ,2 %

Digital products were launched in 2010 with the development of the note taking application for the iPhone (Moleskine App). However,
the revenues generated by these products in 2012 and 2011 did not represent a material amount and were included in the B2C
revenues;
Ecommerce activities commenced in July 2010 in Italy, in April 2011 in the rest of Europe and in August 2011 in the United States;
The Retail activity began in June 2012 through two brand stores in Milan and in Rome and, from September 2012, through the sales
points of the previous Chinese distributor. During the third quarter of 2012 stores were opened in Turin, Naples and at the airport of
Rome Fiumicino.
The full launch of the WTR Collections took place in June 2011.

Revenues increased by Euro 10,881 thousand, or 16.2%, from Euro 67,255 thousand in 2011 to
Euro 78,136 thousand in 2012. At constant exchange rates, revenues would have increased by
13.1% in 2012 compared to 2011 (constant exchange rate revenues are calculated by translating
the 2011 revenues with the average 2012 U.S. Dollar/Euro exchange rate and GBP/Euro exchange
rate).
The increase in revenues primarily relates to an increase in sales volumes, and for the remainder,
to an increase in sales prices. Revenues increased in all sales channels and was mainly related to
the geographical expansion and the acquisition of new customers, as well as the introduction of
new products.
In the B2C channel, revenues increased by Euro 5,685 thousand, or 10.2%, from Euro 55,478
thousand in 2011 to Euro 61,163 thousand in 2012. This increase is mainly related to i)
geographical expansion, ii) the acquisition of new customers, iii) the ongoing implementation of
initiatives to expand the range of products, iv) the expansion of the distribution network, and v)

Management report 2012

Pagina 7

Moleskine Group

increase of the space allotted in stores (visual merchandising) together with the abovementioned
activities implemented to enhance the recognition of brand.
With regard to products within the Paper Collection business line, the Group continued to pursue
the introduction of new products in 2012, which included the creation of 12 month Limited Diaries,
with the launch, in the second half of 2012, of greeting cards and professional notebooks, the
Cahier (ie, notebooks with a cover of flexible card, featuring a sewing machine), limited edition
notebooks ("Audio cassette", "Lego" and "the Hobbit") and other notebooks. Finally, a new line of
Smart Notebook, developed in collaboration with Evernote, was recently introduced. In 2012, the
revenues generated from new products of the Paper Collections business line amounted to Euro
8,677 thousand.
Sales volumes in the B2C channel in 2012 benefited from strategies to develop the distribution
network, which were implemented through increased marketing initiatives at sales locations with
the aim of expanding our brand at retailers, consolidating and broadening merchandising
programs with major customers and new Ateliers to increase the space allocated to our products
and enhance their visibility. At the date of this document about 58 Atelier were opened worldwide.
In the B2B channel, revenues increased by Euro 2,056 thousand, or 19.3%, from Euro 10,664
thousand in 2011 to Euro 12,720 thousand in 2012. The increase in revenues primarily relates to an
increase in the number of orders compared with the prior year, with the average order value
remaining unchanged.
In relation to the ecommerce channel, it should be noted that direct online sales of our products
was extended to all major European markets in April 2011 and in August 2011, to the United
States. On October 1, 2012, we launched a line of Smart Notebooks through our eCommerce
websites. Smart Notebooks are notebooks that, due to special marking and by using stickers
recognizable by the Evernote camera application, allow users to reproduce handwritten notes and
sketches in digital format and transfer them onto their account in archived form. Consequently,
revenues in the ecommerce channel increased from Euro 1,113 thousand in 2011 to Euro 3,293
thousand in 2012.
During 2012, the Group have commenced a strategy for the opening of DOS through which all
categories of our products are directly distributed to consumers. The opening of DOS, which allow
display of a greater range of products, represents an opportunity both in terms of business and in
terms of promotion of brand awareness and of our products, to the benefit of the entire
distribution network. In 2012, the revenues generated from this new channel amounted to Euro
960 thousand.
* * *

Management report 2012

Pagina 8

Moleskine Group

Revenues by geographical area


The following table sets forth a breakdown by geographical area of revenues for the years ended on
December 31, 2012 and 2011:
In thousands of Euro
Year ended Decemb er 3 1,
2 0 12

C hang es
2 0 11

% of
r evenues
Europe (including Italy), Middle East, Africa
USA/Canada/Latin America
Asia Australia
Revenues

2 0 12 vs 2 0 11
% of
r evenues

41.217
28.119
8.800

52,8%
36,0%
11,3%

41.078
20.003
6.174

7 8 . 13 6

10 0 , 0 %

67.255

61,1%
29,7%
9,2%
10 0 ,0 %

139
8.116
2.626

0,3%
40,6%
42,5%

10 . 8 8 1

16 , 2 %

The following table sets forth the percentage of revenues contributed by the different geographical
areas in each sales channel for the years ended on December 31, 2012 and 2011:
Percentage of revenues by channel on geographical areas
Year ended December 3 1, 2 0 12
Europe (including
USA/Canada/Latin
Asia Australia
Italy), Middle East,
America
Africa
B2C
B2B
Ecommerce
Retail

51,4%
58,9%
43,1%
92,9%

37,1%
28,2%
56,8%
0,0%

Year ended December 3 1, 2 0 11


Europe (including
USA/Canada/Latin
Asia Australia
Italy), Middle East,
America
Africa

11,6%
12,9%
0,1%
7,1%

59,4%
70,8%
55,6%
0,0%

31,0%
21,5%
44,4%
0,0%

9,6%
7,8%
0,0%
0,0%

The following table sets forth the percentage of revenues contributed by the different sales channels
in each geographical area in the years ended on December 31, 2012 and 2011.
Percentage of revenues by geographical areas on different channels
Europe (including Italy), Middle East, Africa
2 0 12
B2C
B2B
Ecommerce
Retail

2 0 11
76,2%
18,2%
3,4%
2,2%
10 0 , 0 %

USA/Canada/Latin America
2 0 12

80,1%
18,4%
1,5%
0,0%
10 0 , 0 %

80,6%
12,7%
6,7%
0,0%
10 0 , 0 %

2 0 11
86,1%
11,5%
2,5%
0,0%
10 0 , 0 %

Asia Australia
2 0 12
80,6%
18,6%
0,0%
0,8%
10 0 , 0 %

2 0 11
86,6%
13,4%
0,0%
10 0 , 0 %

Revenues in Europe (including Italy), Middle East and Africa increased by Euro 139 thousand, from
Euro 41,078 thousand in 2011 to Euro 41,217 thousand in 2012.
This change is due to different trends from country to country and reflects the specific
circumstances of each market and not a general trend. In particular, a decline in Italy and Spain
was more than offset by growth in France, the United Kingdom and Germany.
Revenues in Italy represented 10.7% of total revenues for the year ended December 31, 2012. The
decrease in revenues in 2012 compared to 2011 is due to the reorganization of distribution
channels, particularly libraries where reorganization was already performed in other European

Management report 2012

Pagina 9

Moleskine Group

Countries. In Spain, the decrease in 2012 compared to 2011 was due to high economic difficulties
affecting the country.
Revenues in USA/Canada/Latin America increased by Euro 8,116 thousand, or 40.6%, in 2012
compared to 2011, with the most significant increase in the United States, primarily due to the
acquisition of new customers.
Revenues in AsiaAustralia increased by Euro 2,626 thousand, or 42.5%, in 2012 compared to
2011, mainly due to strong performance in the Australian and Korean markets and due to the
startup of new distributors.
With regard to the percentage of revenues contributed by the different geographical areas in the
B2C channel, it should be noted that revenues in USA/Canada/Latin America and AsiaAustralia
increased by 6.1% and 2.0%, respectively, whilst revenues in Europe (including Italy), Middle East
and Africa decreased by 7.9%. On the other hand, in the B2B channel, revenues in Europe
(including Italy), Middle East and Africa decreased by 11.9%, whilst revenues in USA/Canada/Latin
America and AsiaAustralia increased by 6.7% and 5.1%, respectively.
For additional details, please see the information provided above, in the section entitled Revenues
by distribution channel and product line.

Finished products, raw materials and consumables


The following table sets forth a breakdown of Finished products, raw materials and consumables
for the years ended December 31, 2012 and 2011.
In thousands of Euro and percentage of revenues
2 0 12

F i ni shed pro ducts, r aw mater i al s and co nsumabl es


Finished and semifinished products purchases
Raw materials purchases
Exhibition stands production
Catalogs
Packaging
Other
Change in inventories
Total fi ni shed pr o ducts, r aw mater i al s and consumab l es

Year ended December 3 1,


2 0 11

16.180
3.511
1.715
231
125
(326)
(3.440)
17 . 9 9 6

% of
revenues
20,7%
4,5%
2,2%
0,3%
0,2%
(0,4%)
(4,4%)
2 3 ,0 %

14.704
2.702
1.553
244
112
373
(1.660)
18 . 0 2 8

C hang es
2 0 12 vs 2 0 11

% of
r evenues
21,9%
4,0%
2,3%
0,4%
0,2%
0,6%
(2,5%)
2 6 ,8 %

%
1.476
809
162
(13)
13
(699)
(1.780)

10,0%
29,9%
10,4%
(5,3%)
11,6%
(187,4%)
107,2%

(3 2 )

(0 ,2 %)

Finished products, raw materials and consumables decreased by Euro 32 thousand, or 0.2%, from
Euro 18,028 thousand in 2011 to Euro 17,996 thousand in 2012 and as percentage of revenues
decreased from 26.8% in 2011 to 23.0% in 2012.
For a better understanding of this item, the ratio of the costs for finished products, raw materials
and consumables to revenues should be viewed together with that of processing costs.

Management report 2012

Pagina 10

Moleskine Group

Year end ed D ecemb er 3 1,


2 0 12
% of
r ev enu es

In thousands of Euro and percentage of revenues


Revenues

C h an g e

2 0 11

2 0 12 v s 2 0 11
% of
r evenu es

78.136

100,0%

67.255

100,0%

10.881

16,2%

Finished products, raw materials and consumables


Processing costs

(17.996)
(1.776)

(23,0%)
(2,3%)

(18.028)
(1.462)

(26,8%)
(2,2%)

32
(314)

(0,2%)
21,5%

Total finished products, raw materials and consumables and processing costs

(19.772)

(25,3%)

(19.490)

(29,0%)

(282)

1,4%

D i ffer en ce (* )

58.364

74,7%

47 .7 65

7 1,0 %

10 . 5 9 9

2 2 ,2 %

(*) It should be noted that the information set forth above is not a measure of gross profit. Such measure is only the algebraic sum of Revenues,
Costs for finished products, raw materials and consumables and Processing costs (classified under Service Costs in the income statement).
This measure is not recognized as a measure of financial performance or liquidity under IFRS. Since all companies may not calculate this measure
in an identical manner, our presentation may not be consistent with similar measures used by other companies. Therefore, investors should not
place undue reliance on this data.

The difference between revenues, finished products, raw materials and consumables and
processing costs, increased by Euro 10,599 thousand, or 22.2%, from Euro 47,765 thousand in
2011 to Euro 58,364 thousand in 2012.
When the changes in both cost items are viewed together, their combined ratio to revenues shows
a decrease of 3.7 percentage points compared with the previous year (25.3% in 2012 and 29.0% in
2011). In particular, the ratio of costs for finished products, raw materials and consumables to
revenues decreased by 3.8 percentage points (23.0% in 2012 and 26.8% in 2011), whilst the ratio of
processing costs to revenues was substantially in line (2.3% in 2012 and 2.2% in 2011). This trend
is mainly related to the increase in sales prices driven by the changes in product mix and by the
simultaneous reduction in purchase costs (due to diversification of supply policies from different
vendors, particularly in relation to suppliers from Vietnam) partially offset by unfavorable
movements in the exchange rate between the Euro and the Dollar.

Management report 2012

Pagina 11

Moleskine Group

Service costs
The following table sets forth a breakdown of Service costs for the years ended December 31,
2012, and 2011.
In thousands of Euro and percentage of revenues
2 0 12

Year ended D ec emb er 3 1,


2 0 11

C hang es
2 0 12 vs 2 0 11

S er vi ce co sts
Commercial sales costs
Sales transportation
Consulting fees
Processing costs
Storage costs
Marketing and communication expenses
Costs for general services
Design costs
Customs expenses
Maintenance, repairs and assistance
Rents
Royalties
Bank Expense
Leasing
Administrative Costs
To tal ser vi c e c o sts

% of
r evenues
3.239
2.388
2.147
1.776
1.688
1.645
1.600
1.038
979
509
461
409
262
71
44
18 . 2 5 6

4,1%
3,1%
2,7%
2,3%
2,2%
2,1%
2,0%
1,3%
1,3%
0,7%
0,6%
0,5%
0,3%
0,1%
0,1%
23,4%

% of
r evenues
1.543
1.723
1.961
1.462
1.097
1.004
1.185
558
864
310
349
273
161
60
39
12 . 5 8 9

2,3%
2,6%
2,9%
2,2%
1,6%
1,5%
1,8%
0,8%
1,3%
0,5%
0,5%
0,4%
0,2%
0,1%
0,1%
18 , 7 %

%
1.696
665
186
314
591
641
415
480
115
199
112
136
101
11
5
5 .6 6 7

109,9%
38,6%
9,5%
21,5%
53,9%
63,8%
35,0%
86,0%
13,3%
64,2%
32,1%
49,8%
62,7%
18,3%
12,8%
45,0%

Service costs increased by Euro 5,667 thousand, or 45.0%, from Euro 12,589 thousand in 2011 to
Euro 18,256 thousand in 2012 due in part to the costs recorded in 2012, related to the listing on
the stock exchange. As a percentage of revenues, service costs increased from 18.7% in 2011 to
23.4% in 2012.
The increase in service costs is mainly related to:

Commercial sales costs: which increased by Euro 1,696 thousand, or 109.9%, from Euro
1,543 thousand in 2011 to Euro 3,239 thousand in 2012. As a percentage of revenues,
commercial sales costs increased by 1.8 percentage points. This trend is mainly related to
the commissions, related to the ecommerce channel, paid to the web agencies to generate
and increase traffic on the online sales web site, as well as growing investments in
promotional and commercial initiatives supporting the business.
Sales transportation costs: which increased by Euro 665 thousand, or 38.6%, from Euro
1,723 thousand in 2011 to Euro 2,388 thousand in 2012 mainly related to the increase in
sales volumes. As a percentage of revenues, sales transportation costs increased by 0.5
percentage points. This increase is mainly related to air transportation, not present in
2011, linked to new commercial activities of strategic importance.
Consulting fees: which increased by Euro 186 thousand, or 9.5%, in 2012 compared to
2011, mainly related to the structuring of the operational flows within the Group,
consultancy to refine the budgeting and forecasting tools as well as the management

Management report 2012

Pagina 12

Moleskine Group

reporting, partly offset by a decrease in recruitment costs and costs related to brand
protection.
Processing costs: for this item, please see the information provided in the section entitled
Finished products, raw materials and consumables".
Storage costs: which increased by Euro 591 thousand due to higher sales volumes. As a
percentage of revenues storage costs increased by 0.6 percentage points in 2012 compared
to 2011 due to higher logistic costs in order to meet the requirements of some new
American retailers in 2012, as well as the costs incurred in 2012 for the change of the
European logistics platform.
Marketing and communication expenses: which increased by Euro 641 thousand, or
63.8%, in 2012 compared to 2011, mainly related to costs incurred for the development
and consolidation of our brand. As a percentage of revenues, marketing and
communication expenses increased by 0.6 percentage points in 2012 compared to 2011.
Costs for general services: which increased by Euro 415 thousand, from Euro 1,185
thousand in 2011 to Euro 1,600 thousand in 2012 mainly due to the increase in legal
consulting fees, as well as the preparation of contracts to support the new retail structure.
Design costs: which increased by Euro 480 thousand, from Euro 558 thousand in 2011 to
Euro 1,038 thousand in 2012, due to the analysis performed for the design of the concepts
related to exhibitors of the new WTR Collection.
Maintenance, repairs and assistance costs: which increased by Euro 199 thousand, from
Euro 310 thousand in 2011 to Euro 509 thousand in 2012, mainly due to IT support
services in relation to a growth in workforce and the renewal of the office parking.

Personnel costs
The following table sets forth a breakdown of Personnel costs for the years ended December 31,
2012, and 2011.
In thousands of Euro and percentage of revenues
Year ended D ec emb er 3 1,
2 0 12
Per s o nnel c o s ts
Salaries and wages
Social security contributions
Post employment employee benefits
Board of Directors remuneration
Other personnel costs
To tal per s o nnel c o sts

Management report 2012

7.069
1.998
205
392
135
9.79 9

% of
r ev enues
9,0%
2,6%
0,3%
0,5%
0,2%
12 , 5 %

C hang es

2 0 11

4.831
1.594
148
412
522
7.507

% of
r evenues
7,2%
2,4%
0,2%
0,6%
0,8%
11, 2 %

2 0 12 vs 2 0 11
%
2.238
404
57
(20)
(387)
2.292

46,3%
25,3%
38,5%
(4,9%)
(74,1%)
30,5%

Pagina 13

Moleskine Group

The following table sets forth the average number of employees during the years ended December
31, 2012 and 2011 and the actual number of employees as of such dates:
Year ended D ec emb er 3 1,
2 0 12
av er ag e
year end

U n i ts
Directors
Executive
Managers
White collar workers
Collaborators
To tal empl o yees and c o l l ab o r ato r s

2 0 11
av er ag e
year end

4
14
17
84
6

4
14
18
94
7

5
11
15
66
3

4
14
16
74
5

12 5

13 7

10 0

113

Personnel costs increased by Euro 2,292 thousand from Euro 7,507 thousand in 2011 to Euro
9,799 thousand in 2012. The increase in the personnel costs during such period is mainly related
to an increase in the average number of employees, from 100 employees in 2011 to 125
employees 2012.
The increase in headcount was focused mainly in the sales and marketing departments.
For further details, please refer to Note 7.5 Personnel costs in the consolidated financial
statements as of December 31, 2012.
Other
Other operating expenses
The following table sets forth a breakdown of Other operating expenses for the years ended
December 31, 2012, and 2011.
In thousands of Euro and percentage of revenues
Year ended December 3 1,
2 0 12
Other oper ati ng expenses
Gifts and donations
Other miscellaneous operating expenses
Charitable donations
Impairments of receivables
Accruals to provision for risks and charges
Total other oper ating expenses

451
132
163
20
150
9 16

% of
r evenues
0,6%
0,2%
0,2%
0,0%
0,2%
1, 2 %

C hang e

2 0 11

333
374
168
159

1. 0 3 4

% of
r evenues
0,5%
0,6%
0,2%
0,2%
0,0%
1, 5 %

2 0 12 vs 2 0 11
%
118
(242)
(5)
(139)
150
(118 )

35,4%
(64,7%)
(3,0%)
(87,4%)
n.a.
(11, 4 %)

Other operating expenses decreased by Euro 118 thousand from Euro 1,034 thousand in 2011 to
Euro 916 thousand in 2012.

Management report 2012

Pagina 14

Moleskine Group

Depreciation, amortization and impairments


The following table sets forth a breakdown of Depreciation, amortization and impairments for
the years ended December 31, 2012, and 2011.
In thousands of Euro and percentage of revenues
Year ended December 3 1,
2 0 12

Amortization of intangible assets


Depreciation of property, plant and equipment
Impairment losses of intangible assets
Impairment losses of property, plant and equipment
Total depr eciation, amor tization and i mpai r ments

2 0 11

% of
r evenues

D epr eci ation, amor tization and impair ments

C hang e
2 0 12 vs 2 0 11

% of
r evenues

433
520

0,6%
0,7%
0,0%
0,0%

395
415

953

1, 2 %

13

0,6%
0,6%
0,0%
0,0%

38
105

(13)

823

1, 2 %

13 0

9,6%
25,3%
0,0%
(100,0%)
15 , 8 %

Depreciation, amortization and impairments increased by Euro 130 thousand, or 15.8%, from
Euro 823 thousand in 2011 to Euro 953 thousand in 2012 and as a percentage of revenues were
substantially unchanged.
Operating Profit
The table below shows the operating profit (EBIT) and EBITDA amounts and the ratios of
operating profit (EBIT) and EBITDA to revenues.

Year en ded D ec emb er 3 1,


2 0 12

2 0 11

In thousands of Euro and percentage of revenues


Operating profit (EBIT)
% of Revenues

30.419
38,9%

27.618
41,1%

EBITDA (*)
% of Revenues

31.372
40,2%

28.441
42,3%

(*) The Group defines EBITDA as the operating profit (EBIT) before depreciation, amortization and impairments of noncurrent assets. EBITDA is
not recognized as a measure of financial performance or liquidity under IFRS. Since all companies may not calculate this measure in an identical
manner, the Groups presentation may not be consistent with similar measures used by other companies. Therefore, investors should not place
undue reliance on this data.

Operating profit increased by 10.1%, from Euro 27,618 thousand in 2011 to Euro 30,419 thousand
in 2012 whilst as a percentage of revenues decreased by 2.2 percentage points, from 41.1% in 2011
to 38.9% in 2012, as a result of the factors explained above.
Consistent with the trend of the operating profit, EBITDA increased by Euro 2,931 thousand, from
Euro 28,441 thousand (42.3% of revenues) in 2011 to Euro 31,372 thousand (40.2% of revenues)
in 2012.

Management report 2012

Pagina 15

Moleskine Group

Finance income (expense)


The table below sets forth a breakdown of Finance income and Finance expense for the years
ended December 31, 2012, and 2011.
In thousands of Euro and percentage of revenues
Year ended D ec emb er 3 1,
2 0 12

2 0 11

% of
r ev enues

F i nance i ncome/ (expense)


Bank interest income and other finance income
Foreign exchange gains
Other finance income
Total fi nance i ncome

C hang e

33

33

0,0%
0,0%
0,0%
0,0%

2 0 12 vs 2 0 11

% of
r ev enues
22
178
196
396

0,0%
0,3%
0,3%
0,6%

11
(178)
(196)
(3 6 3 )

50,0%
(100,0%)
(100,0%)
(9 1, 7 %)

Interest expenses on bank loans


Interest expenses on shareholders' loans
Financial charges on loans from shareholders' discount
Foreign exchange losses
Other finance cost
Total fi nance expense

(2.927)

(83)
(364)
(3 . 3 7 4 )

(3,7%)
0,0%
0,0%
(0,1%)
(0,5%)
(4 , 3 %)

(3.777)

(2.657)

(296)
(6 . 7 3 0 )

(5,6%)
0,0%
(4,0%)
0,0%
(0,4%)
(10 , 0 %)

850

2.657
(83)
(68)
3 .3 5 6

(22,5%)
0,0%
(100,0%)
n.a.
23,0%
( 4 9 , 9 %)

Total fi nance i ncome/ (expense)

(3 .3 4 1)

(4 , 3 %)

(6 . 3 3 4 )

(9 , 4 %)

2 .9 9 3

( 4 7 , 3 %)

Net finance expense decreased by Euro 2,993 thousand, or 47.3%, from Euro 6,334 thousand
(9.4% of revenues) in 2011 to Euro 3,341 thousand (4.3% of revenues) in 2012 mainly related to i)
the implicit interest generated by the discounting of the longterm interestfree loan to Appunti,
recorded in 2011, and ii) a decrease in the average bank debt outstanding and the persistence of
favorable market rates.

Income tax expense


The table below provides a breakdown of Income tax expense for the years ended December 31,
2012, and 2011.
In thousands of Euro and percentage of revenues
Year ended Dec ember 3 1,
2 0 12
% of
r evenues

Inco me tax expense

C hang e

2 0 11

2 0 12 vs 2 0 11

% of
r evenues

Pr o fi t b efo r e i nco me tax

27.078

34,7%

2 1. 2 8 4

3 1, 6 %

5.794

27,2%

Current tax
Deferred income tax
To tal i nco me tax expense

9.054
(173)
8.881

11,6%
(0,2%)
11,4 %

8.429
(965)
7 .4 6 4

12,5%
(1,4%)
11,1%

625
792
1. 4 17

7,4%
(82,1%)
19 , 0 %

Effecti ve tax r ate

3 2 ,8 %

3 5 ,1%

The Groups effective tax rate was 32.8% and 35.1%, in 2012 and 2011 respectively.

Management report 2012

Pagina 16

Moleskine Group

Net profit
The table below shows the net profit amount and the ratio of net profit to revenues for the years
ended December 31, 2012 and 2011.

Year en ded D ec emb er 3 1,


2 0 12

2 0 11

In thousands of Euro and percentage of revenues


Net profit
% of revenues

18.197
23,3%

13.820
20,5%

As a result of the factors explained above net profit increased from Euro 13,820 thousand in 2011
to Euro 18,197 thousand in 2012 and as a percentage of revenues increased by 2.8 percentage
points, from 20.5% in 2011 to 23.3% in 2012.

Management report 2012

Pagina 17

Moleskine Group

ANALYSIS OF THE SOURCES AND USES OF RESOURCES


The following table sets forth our indebtedness and capital resources as of December 31, 2012 and
2011.
In thousands of Euro
S o u r c es and U s es
U ses
Inventories
Trade receivables
Other current assets
Trade payables
Income tax payables
Other current liabilities
Net wo r k i ng c ap i tal

A s o f D ec emb er 3 1,
2 0 11
2 0 12
12.284
16.321
1.836
(15.767)
(466)
(3.124)
11. 0 8 4

Property, plant and equipment


Goodwill and trademarks
Other intangible assets
Other noncurrent assets
No nc u r r ent ass ets
Deferred tax liabilities
Current and noncurrent provisions for risks and charges
Postemployment and other employee benefits
C u r r ent and no n c u r r ent l i ab i l i ti es
Net i nv es ted c ap i tal
S o u r c es
Equity
Net financial indebtedness
T o tal so u r c es o f fi nanc i ng

8.903
12.194
226
(9.749)
(1.945)
(2.080)
7.549

2.216
76.751
1.967
289
8 1. 2 2 3

1.381
76.513
838
188
78.920

(15.202)
(702)
(922)
(16 . 8 2 6 )
75.481

(15.470)
(524)
(569)
( 16 . 5 6 3 )
69.906

31.975
43.506
75.481

14.011
55.895
69.906

The table that follows shows the average days sales outstanding (DSO), the days payables
outstanding (DPO) and the day sales of inventory (DSI) as of December 31, 2012 and 2011.
A s o f D ec emb er 3 1,
2 0 12
Days sales outstanding (DSO)
Days payable outstanding (DPO)
Days sales of inventory (DSI)

62
119
208

2 0 11
60
95
158

Net working capital increased by Euro 3,535 thousand, from Euro 7,549 thousand as of December
31, 2011 to Euro 11,084 thousand as of December 31, 2012, mainly related to an increase in
inventories and receivables, partially offset by the increase in trade payables. In particular:

Management report 2012

Pagina 18

Moleskine Group

Trade receivables increased by Euro 4,127 thousand, or 33.8%, compared with December
31, 2011 due to the growth in the business (and in particular growth in sales in the last
quarter of 2012) and also, to a lesser extent, the late payment of a receivable from an Italian
distributor related to their internal reorganization process.
Inventories increased by Euro 3,381 thousand, or 38%, compared with December 31, 2011,
mainly related to a combination of factors, including the effect of the movements in the
exchange rate between the Euro and the Dollar and the increase in inventories of products
and display systems used to support the Groups growth strategy in the B2C channel, new
direct channels as well as on line and retail. Inventories also increased as a result of the
internalization of supply of raw materials in order to improve product margins and an
increase in inventories required to support launches in 2013.
Trade payables increased by Euro 6,018 thousand, or 61.7%, compared with December 31,
2011, as a result of the increase in inventories described above.

Noncurrent assets mainly relate to goodwill and the Moleskine trademark. In particular, goodwill
and trademarks include goodwill amounting to Euro 22,290 thousand as of each of the balance
sheet dates, whilst the remaining balance is related to the Moleskine trademark.
The following table sets forth a breakdown of our net financial indebtedness as of December 31,
2012 and 2011.
In thousands of Euro
Net
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.

fi nanc i al i ndeb tedn es s


Cash
Cash equivalents
Trading securities
Li q ui di ty (A ) + (B ) + (C )
Current financial receivables
Short term bank debts
Current portion of medium/long term financial loans
Other current financial liabilities
C ur r en t fi nanc i al l i ab i l i ti es (F ) + (G) + (H)
Net c ur r en t fi nanc i al i nd eb tedn es s (I) + (E) + (D )
Noncurrent portion of medium/long term financial loans
Bond issued
Other medium/long term financial liabilities
No ncu r r ent fi nanc i al l i ab i l i ti es (K) + (L) + (M )
Net fi n an ci al i n deb ted ness (J) + (N)

A s o f Dec emb er 3 1
2 0 12
2 0 11
7.208
3.001

7.208
3 .001

(9.879)
(8.473)
(53)
(16)
(9 . 9 3 2 )
(8 . 4 8 9 )
(2 . 7 2 4 )
(5 . 4 8 8 )
(39.895)
(49.653)

(887)
(754)
(4 0 . 7 8 2 )
(5 0 . 4 0 7 )
(4 3 . 5 0 6 )
(5 5 . 8 9 5 )

For further details please refer to Note 6.10 Current and noncurrent financial liabilities in the
consolidated financial statements as of December 31, 2012.
The following table summarizes cash flows of the Group for the years ended December 31, 2012
and 2011.

Management report 2012

Pagina 19

Moleskine Group

Year ended December 3 1,

In thousands of Euro

20 12

20 11

Cash flow from operating activities before movements in working capital

32.727

30.262

Changes in working capital:


Change in inventories
Change in trade receivables and other receivables
Change in trade and other payables
Change in postemployment and other employee benefits and in provisions for risks and charges

(4.040)
(5.284)
6.753
(425)

(2.329)
(1.919)
136
(381)

Cash flow absorbed from movements in working capital

(2.996)

(4.493)

Income tax paid

(10.697)

(8.712)

Cash flow from operating activities


Cash flow used in investing activities
Cash flow used in financing activities

19.034
(3.145)
(11.625)

17.057
(1.540)
(14.091)

Chang e in cash and cash equival ents

4.26 4

1.42 6

Cash and cash equivalents at the beginning of the year


Exchange differences in cash and cash equivalents

3.001
(57)

1.527
48

Cash and cash equival ents at the end of the year

7 .2 08

3 .0 01

Net cash from operating activities increased by Euro 1,977 thousand from Euro17,057 thousand in
2011 to Euro 19,034 in 2012. For further details relating to the trend of working capital see the
comments set out above.
Net cash used in investing activities amounted to Euro 3,145 thousand in 2012 and Euro 1,540
thousand in 2011.
Net cash used in financing activities amounted to Euro 11,625 thousand in 2012 and Euro 14,091
thousand in 2011.
In particular, during 2012, net cash used in financing activities mainly related to the repayment of
the principal amount of Tranche A of the Facility Agreement for an amount of Euro 7,467 thousand
and Euro 1,448 thousand for the advance payment of the excess cash related to the financial year
2011.
Conversely, during 2011, net cash used in financing activities was mainly related to the partial
repayment, for an amount of Euro 6,000 thousand of the financial liability with Appuntirelating to
the acquisition by Analogie of 70% of the share capital of the former Moleskine.

Management report 2012

Pagina 20

Moleskine Group

RESEARCH & DEVELOPMENT

During 2012 the Company continued to invest in strategic projects to broaden the scope of
application of the brand, using the merchandisingfunctional affinity criterion, and turning on the
inestimable symbolicrelational value of the Moleskine brand, in which certain paradigms have
been identified capable of meeting the current and potential needs of the market segment of
Moleskine users for application of the brand outside the existing product concepts.
Among R&D activities, efforts continued to be focused on designing and developing new products
in the current merchandise category and designing and realising products in the new merchandise
categories of collections and new sales channels (including the Retail channel), showing the
versatility of the Moleskine brand as capable of transferring to environments and business
models different from traditional ones.

PRINCIPAL RISKS AND UNCERTAINTIES FOR THE GROUP


The main business risks identified, monitored and, to the extent specified below, actively managed
by the Group are as follows:

Market risk arising from the fluctuation of interest rates, commodity prices and exchange rates
between the Euro and the other currencies in which the Group deals;

Credit risk arising from a possible default by a counterparty; and

Liquidity risk arising from the absence of financial resources needed to meet financial
obligations.

For quantitative details of the analyses connected to the abovementioned risk, reference is made
to note 16 Management of financial risks in the consolidated financial statements as of
December 31, 2012.

FINANCIAL INSTRUMENTS
For information relating to financial instruments, refer to Note 6.10 Current and noncurrent
financial liabilities in the consolidated financial statements as of December 31.

MANAGEMENT AND COORDINATION


As of December 31, 2012 the share capital was 84.78% held by Appunti and the remaining was
15.22% held by Pentavest, whose shares are held in trust by Istifid.

Management report 2012

Pagina 21

Moleskine Group

The company considers that it is not subject to management and coordination by Appunti as: i)
the Company is totally autonomous in its dealings with customers and suppliers, with no
interference by anyone outside the Company, ii) Appunti has no central financial role with the
Company, iii) the main decisions regarding management of the Company and its subsidiaries are
taken within the Company itself, iv) the company's Board of Directors is responsible for
scrutinising and approving strategic, industrial and financial proposals and the budgets of the
company and the Group, the scrutiny and approval of the Group's organisational structure, the
evaluation of the adequacy of the organisation, administration and accountancy of the Company
and of the Group.
RELATED
RELATEDPARTY TRANSACTIONS
The details related to the financial position, profit and loss impact and cash flow balances
associated with the Groups transactions with related parties are reported in Note 8 Relatedparty
transactions in the consolidated financial statements as of December 31, 2012.

RISK OF VIOLATION OF INTELLECTUAL PROPERTY RIGHTS


The Company continued to invest in measures to protect the Moleskine brand, and the same
policy was applied to the web, intensifying monitoring and surveillance of active sites and
domains relating to products/services that are identical and/or similar to Moleskines, increasing
the number of applications to register and/or purchase domain names containing the word
Moleskine, so as to acquire direct control, preventing the undue exploitation of a registered
trademark and the possible dissemination of content that is not in line with the values of the
brand and could potentially threaten its image.
Attention has also been focusing on copyright infringements through AdWords in the countries
where such violations can be fought in court.

Finally, it should be noted that in order to protect the content of technological innovation of
certain new products, specifically the Smart Notebook and the Postal notebook, Moleskine is in
the process of obtaining the related patent for invention, giving Moleskine full exclusive rights to
use those products for the entire period of protection offered by the patent.
ENVIRONMENT AND PERSONNEL
With reference to investment in measures to protect and enhance environmental resources, it
should be noted that Moleskine holds two certificates under the chain of custody standards (FSC
Forest Stewardship Council and PEFC Programme for Endorsement of Forest Certification
schemes) that guarantee the traceability of woodbased raw materials in the transformation
process, maintaining an unequivocal origin from certified forests and guaranteeing high
standards of protection of the environmental, social, and economic characteristics of forests.
Management report 2012

Pagina 22

Moleskine Group

Moreover the Company continued to invest in the environmental sustainability project, started in
2011, with a view to communicating both internally and externally the attention to be paid to the
guidelines of so called green procurement, through the use of environmental parameters in the
Companys procurement procedures.
The Company continuously supports the activities of FAI, Fondo per lAmbiente Italiano, through
exhibitions and donations. In detail, the publications The Hand of the Architect/Designer/Graphic
Designer are sold in final auctions whose proceeds are donated to FAI for conservation projects
and projects with a high environmental value.
Also in terms of contractual arrangements, it should be noted that all new general terms of
procurement agreed with the key goods suppliers include a requirement of certification of the
entire production chain with regard to working conditions, specifically in relation to health and
safety, child labour, forced labour (exploitation), the legality of employment contracts, and the
environment, in conformity with the international Social Accountability standard SA8000, as
updated from time to time and in effect.
The abovementioned general terms of procurement, in addition, require all products to be in
compliance with the EUs R.E.A.C.H. regulations and other international regulations applicable to
the registration, evaluation, authorisation and restriction of chemicals contained in the products
imported into our sales territories.
Finally, during the year no serious workplace accidents, deaths, charges for damages from
occupational diseases of employees or former employees were reported, nor was the Group sued
for other personnelrelated claims.
During the year there were no occurrences of damage caused to the environment and group
companies did not receive any fines or final sentences for environmental offences or damages.

TREASURY SHARES AND SHARES IN PARENT COMPANIES


As of December 31, 2012 Group companies did not hold, and had not purchased or sold during
the year, either directly or through others, any treasury shares or shares in parent companies.
COMPLIANCE WITH PRIVACY CODE REQUIREMENTS
Pursuant to Annex B, item 26, of Legislative Decree No. 196/2003 Personal data protection code
(the Privacy Code), The board of directors states that the Company has adopted measures to
protect personal information, in compliance with the provisions of the Privacy Code, in the manner
and timeframe set out therein. In detail, the Security Policy Document, which can be freely
consulted at the companys registered office, is kept updated by the person in charge of data
processing in compliance with the requirements of the Privacy Code.

Management report 2012

Pagina 23

Moleskine Group

LEGISLATIVE DECREE NO. 231/01


The Company has adopted an organisation, management and control model in compliance with
the provisions of Legislative Decree No. 231/2001, designed to ensure correctness and
transparency in the Companys operations, to safeguard the position and image of the Company
and Group entities, the expectations of its shareholders and the work of its employees. Moreover,
the Company has adopted an Ethics Code and has appointed a Supervisory board responsible for
monitoring the effectiveness of the aforementioned model.
ARTICLE 36 OF THE MARKET REGULATIONS
It should be noted that Moleskine America is an entity established and regulated by the laws of a
nonEuropean Union member state (specifically, by the federal laws of the United States of
America and by the laws of the State of New York) and is of significant importance to the Group
pursuant to article 151 of the Issuers Regulations. Accordingly, with reference to Moleskine
America, the Company has adopted the necessary measures, in terms of governance and the
administrativeaccounting system, to comply with the provisions applicable to listed issuers that
control companies established and regulated by the laws of nonEuropean Union Member States
pursuant to article 36 of Consob Regulation 16191/2007.
Moleskine Asia and Moleskine Shanghai are not of significant importance to the Group pursuant
to article 151 of the Issuers Regulations because their total assets are below 2% of the groups
total assets as per the consolidated financial statements as of 31 December 2012 and their
revenues are below 5% of the Groups consolidated revenues for the year ended 31 December
2012.

SIGNIFICANT EVENTS SUBSEQUENT TO THE CLOSING DATE


Please refer to Note 15 Material events after the reporting period in the consolidated financial
statements as of December 31, 2012.

Management report 2012

Pagina 24

Moleskine Group

FUTURE OUTLOOK
The outlook for 2013 is for further growth in revenues and operating results.
The key drivers of growth for 2013 are expected to be:
a) An improvement in brand visibility. Following the results achieved in 2012, in 2013
Moleskine will continue using 3 formats of instore events, to which a fourth dedicated to
analoguedigital connections will be added (#MyAnalogCloud). Moreover, online activities
will be developed further, after extending the Moleskine app to the Android and Windows 8
platforms, as well as iOS, with features suitable to start an offering of paying services, in
addition to the free services.
b) A broadening of the product range. In the Paper area new products will continue to be
introduced with an impact on revenues that is expected to be in line with 2012. Of note are
the launch of a colour line in the Classic collection and two particularly awaited Limited
Editions: Mickey Mouse and Hobbit 2. The WTR collections will see a further consolidation
of the offering range, designed to gradually achieve gradually the distribution targets which
we have established.
c) B2C indirect distribution. We will continue expanding our indirect distribution network,
mainly in America and Asia. We will also continue, in all geographical areas, expanding our
network of corners and dedicated spaces.
d) B2C direct distribution
a. Ecommerce. In 2013 Moleskines ecommerce revenues will benefit from a further
expansion of activities in Asia and Latin America, from a further increase in
expenditure to develop traffic in the geographical areas already covered and from a
change in the perimeter of outsourced activities that will make it possible to increase
profit margins in the second half of the year. In addition, the offering of printon
demand services, launched in 2012 for certain photo book formats, will be gradually
extended to the entire range of Moleskine products.
b. Retail. Based on the satisfactory results of new direct store openings during 2012 in
Italy and China, during 2013 we will start rolling out the formats tested in Europe,
the US and China.
e) B2B.The Custom Edition business will continue growing thanks to a further strengthening
of the sales structure in all geographical areas.

Management report 2012

Pagina 25

Moleskine Group

From an operating perspective, we are successfully continuing the start of production with new
suppliers, from which we expect a gradually increasing contribution to the further improvement of
profit margins.

Milan, 22nd February 2013

For the Board of Directors


The Chairman
Mr. Carlo Bosello

Management report 2012

Pagina 26

Moleskine Group

CONSOLIDATED STATEMENT OF FINANCIAL POSITION


As of December 31, 2012 and 2011

In thousands of Euro
Property, plant and equipment
Goodwill and trademarks
Other intangible assets
Other noncurrent assets

Note
6.1
6.2
6.3
6,4

Total noncur r ent assets


Inventories
Trade receivables
Other current assets
Cash and cash equivalents

6,5
6,6
6,7
6,8

Total cur r ent assets


TOTA L A SSETS
Share capital
Other reserves
Net profit

2 0 12

A s of Decemb er 3 1,
of which with
2 0 11
related parties

2.216
76.751
1.967
289

1.381
76.513
838
188

8 1.2 2 3

78.920

12.284
16.321
1.836
7.208

8.903
12.194
226
3.001

3 7 .6 4 9

24.324

118 .8 7 2

10 3 . 2 4 4

2.000
11.778
18.197

2.000
(1.809)
13.820

TOTA L EQU ITY

6,9

3 1.9 7 5

14 . 0 11

Noncurrent financial liabilities


Deferred tax liabilities
Postemployment and other employee benefits
Noncurrent provisions for risks and charges

6,10
6,11
6,12
6,13

40.782
15.202
922
105

50.407
15.470
569
105

5 7 . 0 11

66.551

Total noncur r ent l iab i l i ti es


Trade payables
Income tax payables
Current financial liabilities
Current provisions for risks and charges
Other current liabilities
Total cur r ent l i ab il ities
TOTA L LIA B ILITIES
TOTA L LIA B ILITIES A ND SHA REHOLDERS' EQU ITY

6,14
6,15
6,10
6,13
6,16

15.767
466
9.932
597
3.124

36

424

9.749
1.945
8.489
419
2.080

2 9 .8 8 6

22.682

8 6 .8 9 7

89.233

118 .8 7 2

10 3 . 2 4 4

of which with
related parties

14

Moleskine Group

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


For the years ended December 31, 2012 and 2011

Year ended D ec emb er 3 1,


No te

2 0 12

In thousands of Euro
Revenues
Other income
Finished products, raw materials and consumables
Service costs
Personnel costs
Other operating expenses
Depreciation, amortization and impairments

7.1
7.2
7.3
7.4
7.5
7.6
7.7

Op er ati ng p r o fi t
Finance expense
Finance income

7.8
7.8

(3.374)
33
2 7.07 8

7.9

Net pr o fi t
Ear ni ng s per shar e
Basic (euro)
Diluted (euro)

(51)
(1.906)
(150)

3 0 . 4 19

Pr o fi t b efo r e i nc o me tax
Income tax expense

78.136
203
(17.996)
(18.256)
(9.799)
(916)
(953)

of which with
related parties

7,10
7,10

(8.881)

of which non
recurring

of which with
related parties

2 0 11

67.255
344
(18.028)
(12.589)
(7.507)
(1.034)
(823)

To tal o ther c o mp r ehensi ve i nc o me


To tal c o mpr ehen si ve i nc o me fo r the year

(29)

(6.730)
396
2 1. 2 8 4
(7.464)

18 . 19 7

13 . 8 2 0

0,0910
0,0910

0,0691
0,0691

(133)
37

(754)
207

(211)

(29)

58

(17)

25

(2 6 6 )

(5 4 3 )

17 . 9 3 1

(31)
(1.647)
(150)

2 7 . 6 18

Other c o mpr ehen si ve i nc o me


Fair value cash flow hedge derivatives
Fair value cash flow hedge derivatives tax effect
Actuarial gain/(losses) on postemployment and other
employee benefits
Actuarial gain/(losses) on postemployment and other
employee benefits tax effect
Foreign exchange from the translation of financial statements in
currencies other than Euro

of which non
recurring

13 . 2 7 7

(2.693)

(2.657)

Moleskine Group

CONSOLIDATED STATEMENT OF CASH FLOWS


For the years ended December 31, 2012 and 2011

Note

In thousands of Euro

Year ended December 31,


of which with
2011
related parties

20 12

of which with
related parties

Cash flow from operating activities


Profit before income tax

27.078

21.284

7.7

953

823

6.12 6.13
6.6
6.5
7.8

716
20
659
3.341
(40)

510
159
882
6.334
270

Adjustments for:
Depreciation and amortization of intangible assets and property, plant and equipment
Accruals to provisions for risks and charges and postemployment and other
employee benefits
Accruals to provision for doubtful receivables
Accruals to provision for inventory obsolescence
Net finance expense
Other non monetary changes

Cash flow from operating activities before movements in working capital


Changes in working capital:
Change in inventories
Change in trade receivables and other receivables
Change in trade and other payables
Change in postemployment and other employee benefits and in provisions for risks and charges

32.72 7

6.5
6.6 6.7
6.14 6.16
6.12 6.13

(4.040)
(5.284)
6.753
(425)

3 0.262

34

(2.329)
(1.919)
136
(381)

Cash flow absorbed from movements in working capital

(2.9 96)

(4.493 )

Income tax paid

(10.697)

(8.712)

Cash flow from operating activities

19.03 4

Cash flow used in investing activities


Investments:
Investments in intangible assets
Investments in property, plant and equipment
Disposals of property, plant and equipment and intangible assets

6.2 6.3
6.1
6,1

Cash flow used in investing activities

(440)

17.057

(1.814)
(1.341)
10

(740)
(800)

(3.145)

(1.540 )

Cash flow from financing activities


Changes in shortterm loans
Repayment of medium/longterm loans
Repayment of shareholders' financial liabilities
Payment of ancillary costs
Interest paid
Other changes in financial liabilities

(2.627)
(83)

(467)
(3.781)
(6.000)
(290)
(3.258)
(295)

Cash flow used in financing activities

(11.6 25)

(14 .091)

Change in cash and cash eq uivalents

4.26 4

1.426

3.001
(57)
7.208

1.527
48
3.001

Cash and cash equivalents at the beginning of the year


Exchange differences in cash and cash equivalents
Cash and cash equivalents at the end of the year

6.10
6.10
6.10
6.10
6.10

6.8
6.8

(8.915)

(6.000)

Moleskine Group

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY


As of and for the years ended December 31, 2012 and 2011

Note
In thousands of Euro
A s o f D ec emb er 3 1, 2 0 10

6.9

S h ar e
p r emi u m
r es er v e

S har e
c api tal

T r ans l ati o n
r es er v e

10 0

65.406

Free capital increase


Conversion of debt with Appunti

1.900

(1.900)

S h ar eh ol d er s tr ansac ti o ns

1. 9 0 0

( 1. 9 0 0 )

Profit for the year 2011


Currency translation
Actuarial gain on postemployment and other employee benefits
Cash flow hedge reserve changes

C as h F l o w
Hed g e r es er v e
0

( 12 2 . 8 3 6 )

45.660
45.660

T o tal E q ui ty

12 . 13 4

( 4 5 . 19 6 )

0
45.660
45.660

13.820
(21)
0

25

(547)
(54 7)

Allocation of net profit of year 2010


Employee stock option reserve
6.9

2.000

63.506

Profit for the year 2012


Currency translation
Actuarial gain on postemployment and other employee benefits
Cash flow hedge reserve changes

25

(54 7)

13 . 8 2 0

12.134
270

(12.134)

0
270

(64 .79 3)

13 . 8 2 0

14 . 0 11

18.197

18.197
(17)
(153)
(96)
17 . 9 3 1

(153)
0

(17 )

(96)
(9 6 )

Allocation of net profit of year 2011


Employee stock option reserve
6.9

2.000

63.506

(64 3)

13.820
25
(21)
(547)
13 . 2 7 7

( 2 1)

(17)

C o mp r eh ens i ve i nc o me fo r th e year

A s o f D ec emb er 3 1, 2 0 12

Net p r o fi t

25

C o mp r eh ens i ve i nc o me fo r th e year

A s o f D ec emb er 3 1, 2 0 11

Oth er
r es er v es

(15 3 )

18 . 19 7

13.820
33

(13.820)

0
33

(5 1. 0 9 3 )

18 . 19 7

3 1. 9 7 5

Moleskine Group

NOTES
1. GENERAL INFORMATION
Moleskine S.p.A. (hereinafter also the Company
Company
Moleskine)
Company or Moleskine
Moleskine is a company which is
incorporated and domiciled in Italy and is governed by the laws of the Italian Republic. The
address of its registered office is Via Stelvio 66, Milan, Italy.
The Company and its subsidiaries (together the Group
Group)
Group develop, distribute and sell a range
of products under the Moleskine brand, such as notebooks, agendas, portfolios, purses, writing
materials, reading articles and other items related to the digital world. The Groups products
may be divided into three lines:

collections of notebooks, agendas and homeoffice products (the Paper


Paper Collections);
Collections

writing, travel and reading accessories (the WTR


WTR Collections1);

digital products and services ("Digital


Digital").
Digital

The Group distributes its products i) indirectly through bookstores, department stores,
specialty stores, stationery stores, and museums (B2C) and ii) directly through its sales
network for customized products intended for business clients (B2B), through its website (e
Commerce) and through a network of brand stores (Retail).
The Group has offices in Europe, the United States and Asia.
Appunti), of
As of December 31, 2012, 84.78% of the Company is held by Appunti S..r.l. (Appunti
Appunti
which Syntegra Capital has a 79.623% shareholding (through the companies (i) Syntegra
Holding III S..r.l., (ii) Syntegra Investment Holding III S..r.l. and (iii) Syntegra Investments III
S..r.l (Syntegra
Syntegra Investments))
Pentavest).
Investments and for 15.22% by Pentavest S.. r.l. (Pentavest
Pentavest

These consolidated financial statements were approved by the Board of Directors on February
22, 2012.
These consolidated financial statements have been audited by PricewaterhouseCoopers S.p.A.,
the auditors of the Company.

For the years ended December 31, 2012 and 2011 WTR Collection revenues (B2C channel) include revenues generated through the
sale of digital products and services (Digital).

Notes to the consolidated financial statement 2012

Pagina 1

Moleskine Group

2. SUMMARY OF ACCOUNTING PRINCIPLES


The main accounting principles applied in the preparation of these consolidated financial
statements are illustrated below.
2.1 BASIS OF PREPARATION
This document includes the consolidated financial statements as of and for the year ended
December 31, 2012 (the Consolidated
Consolidated Financial Statements),
and comprises the
Statements
consolidated statement of financial position, the consolidated statement of comprehensive
income, the consolidated statement of cash flows, the consolidated statement of changes in
shareholders equity and the explanatory notes.
Up until the financial statements for the year ended December 31, 2011, the Company
prepared its consolidated financial statements in accordance with the Italian Civil Code
which governs the preparation of financial statements, as construed by the accounting
principles issued by the Organismo Italiano di Contabilit (the Italian
Italian GAAP).
GAAP
On the basis of Italian Legislative Decree no. 38/2005, published in the Gazzetta Ufficiale n.
66 of 21 March 2005, the Company has decided to apply the option in preparing its
Consolidated Financial Statements as from the financial year ended December 31, 2012 in
accordance with International Financial Reporting Standards (IFRS
IFRS),
as issued by the
IFRS
International Accounting Standards Board (IASB
IASB),
IASB and adopted by the European Union
(EU
EU
EUIFRS).
IFRS
The Company has prepared a registration document, which was filed with Consob on
January 11, 2013 following the approval on January 9, 2013, for the public offering and
admission to listing of the ordinary shares of the Company (the Registration
Registration Document
Document).
In connection with the preparation of the Registration Document, the Company prepared
combined consolidated financial statements for the years ended December 31, 2011, 2010
and 2009 in accordance with EUIFRS, which were approved by the Board of Directors on
September 20, 2012. In this context, it was necessary to undertake a conversion process
from Italian GAAP to EUIFRS in accordance with the requirements of IFRS 1 Firsttime
Adoption of International Financial Reporting Standards. The date of transition to the EU
IFRS was identified as January 1, 2009 (Transition
Transition Date).
The combined consolidated
Date
financial statements for the years ended December 31, 2011, 2010 and 2009, which
represent the first consolidated financial statements prepared in accordance with the EU
IFRS, provide the disclosures required by IFRS 1 in relation to the effects of the transition
from Italian GAAP to EUIFRS.
EUIFRS is defined as all the International Accounting Standards (IAS
IAS)
IAS and International
Financial Reporting Standards (IFRS
IFRS)
IFRS and all the interpretations of the International
Financial Reporting Interpretations Committee (IFRIC
IFRIC),
previously the Standing
IFRIC
Interpretations Committee (SIC
SIC),
which at the date of approval of the Consolidated
SIC
Notes to the consolidated financial statement 2012

Pagina 2

Moleskine Group

Financial Statements, have been subject to approval by the European Union in accordance
with Regulation (EC) No 1606/2002 by the European Parliament and the European Council
of July 19, 2002. EUIFRS has been applied consistently for all the periods presented in the
Consolidated Financial Statements.
These Consolidated Financial Statements have been prepared on a going concern basis as
the Directors have verified the absence of indicators of financial, managerial or other critical
situations that might indicate doubts about the Group's ability to meet its obligations in the
foreseeable future and in particular over the next 12 months.
2.2 FORM AND CONTENT OF THE FINANCIAL STATEMENTS
STATEMENTS
The classification criteria adopted by the Group are as follows:

i)

the statement of financial position is presented using the current and noncurrent
format;

ii)

the statement of comprehensive income is presented by nature;

iii)

the statement of cash flows is presented using the indirect method.

The Company has chosen to present one statement of comprehensive income, which
presents not only the profit for the period, but also changes in shareholders equity that are
recognized directly to equity through other comprehensive income.
The statements as identified above are those that best represent the economic, equity and
financial position of the Group.
The Consolidated Financial Statements have been prepared in Euro, the Groups functional
currency.
The amounts shown in the financial statements and accompanying notes are expressed in
thousands of Euro, unless otherwise indicated.

2.3 SCOPE OF CONSOLIDATION


CONSOLIDATION
The Consolidated Financial Statements include, as well as the financial statements of the
Company, the financial statements of Moleskine America, Inc. (Moleskine
Moleskine America
America),
merica 100%
wholly owned and located in New York, 210 Eleventh Avenue, Suite 1004 and, starting from
the second half of 2011, the financial statements of Moleskine Asia Ltd (Moleskine
Moleskine Asia),
Asia
located in Hong Kong, Suite 3202A, 32/F, The Centrium, and 100% wholly owned by the
Company. On July 24, 2012, the new company Moleskine Commerce and Trade (Shanghai)
Co. Ltd (Moleskine
Moleskine Shanghai)
Shanghai was established, owned entirely by the Group through
Moleskine Asia and located in Shanghai, 500 Xiangyang Road South, Suite 1406 Xuhui
District.

Notes to the consolidated financial statement 2012

Pagina 3

Moleskine Group

2.4 CONSOLIDATION PRINCIPLES


The criteria adopted by the Group to define the scope of consolidation and the relevant
methods of accounting are set forth below.
SUBSIDIARIES

Subsidiaries are companies in which the Group has the power directly or indirectly to govern
financial and operating policies and to receive the resulting benefits. Control may be
exercised through direct or indirect ownership of the majority of voting rights, or through
contractual or legal agreements, regardless of shareholding. When assessing whether
control exists, the existence of potential exercisable voting rights at the statement of
financial position date is considered.
In general, control is assumed to exist when the Group holds directly or indirectly more than
50% of the voting rights.
Subsidiaries are fully consolidated from date on which the Group obtains control over the
entity up to the date on which control is transferred to a third party. The financial statements
within the scope of consolidation are those prepared for the year ended December 31, 2012,
and have been adjusted, where necessary, in order to ensure compliance with the
accounting principles of the Group.
Subsidiaries are fully consolidated on a line by line basis as follows:

the assets and liabilities, revenues and costs of the subsidiaries are consolidated line
by line and the proportionate share of shareholders equity and net profit are allocated to
noncontrolling interests where applicable; equity and net profit attributable to non
controlling interests are reported separately in shareholders equity and the statement of
comprehensive income;

the Group applies the acquisition method to business combinations. Under the
acquisition method, the consideration transferred in a business combination is measured at
fair value, calculated as the sum of the fair value of the assets transferred and of the
liabilities assumed by the Group on the date of acquisition and the equity instruments
issued in exchange for control of the company acquired. Costs related to the acquisition are
generally recorded in the statement of comprehensive income as incurred. The identifiable
assets acquired and the liabilities assumed are recognized at fair value on the acquisition
date, except for the following items which are recognized in accordance with their relevant
accounting principle:
i) deferred tax assets and liabilities;
ii) employee benefit assets and liabilities;

Notes to the consolidated financial statement 2012

Pagina 4

Moleskine Group

iii) liabilities and equitybased instruments relating to sharebased payments of the


company acquired or to payments based on the shares of the Group, issued to replace
contracts of the company acquired;
iv) assets held for sale and discontinued operations;

significant gains and losses, with the related tax effects, arising from transactions
made between fully consolidated entities, and not yet realized with third parties, are
eliminated, unless the transaction provides evidence of impairment of the asset transferred.
Intercompany payables and receivables, costs and revenues, and financial income and
expenses are also eliminated if significant.
TRANSACTIONS WITH NON
NONCONTROLLING INTERESTS

The Group accounts for transactions with noncontrolling interests as equity transactions.
This implies that, in the case of acquisitions or disposals of noncontrolling interests when
the control is maintained, any difference between the cost of acquisition and the related
share of net assets acquired is accounted for in equity.
TRANSLATION OF THE FINANCIAL STATEMENTS OF FOREIGN ENTITIES

The financial statements of subsidiaries are prepared in the currency of the primary
economic environment in which they operate. The financial statements of the Group entities
are translated into Euro as follows:

assets and liabilities are translated using the exchange rate at the statement of
financial position date;

revenues and costs are translated using the average exchange rate for the period;

the translation reserve, which is recorded in the statement of comprehensive income


includes both the difference generated by translating income statement items at a different
exchange rate from the periodend rate and the differences generated by translating opening
equity amounts at a different exchange rate from the periodend rate.

goodwill, where applicable, and fair value adjustments from the acquisition of a
foreign entity are treated as assets and liabilities of the foreign entity and are translated at
the closing exchange rate.
Entities included in the scope of consolidation which did not have Euro functional currency
are Moleskine America (USD), Moleskine Asia (HKD) and Moleskine Shanghai (CNY).
The exchange rates used for the translation of such foreign currency financial statements
were as follows:

Notes to the consolidated financial statement 2012

Pagina 5

Moleskine Group

A s o f D ec emb er 3 1,
C ur r en c y
USD
HKD
CNY

2 0 12
1,3194
10,226
8,2207

2 0 11
1,2939
10,051
n.a

A ver ag e fo r th e year end ed D ec emb er 3 1,


C ur r en c y
2 0 12
2 0 11
USD
1,28479
1,39196
HKD
9,96626
10,8362
CNY (*)
8,08060
n.a
(*) Average calculated from August 2012, the date on which activities of the Shanghai based entity commenced,, to December 2012.

2.5 TRANSLATION OF FOREIGN CURRENCY DENOMINATED TRANSACTIONS AND


BALANCES
Foreign currency transactions are translated into the functional currency using the prevailing
exchange rate at the date of the transaction. Subsequently, monetary assets and liabilities
denominated in foreign currencies are translated into the functional currency based on the
exchange rate at the reporting date. Exchange rate gains and losses are recorded in the
statement of comprehensive income.
Foreign currency denominated non monetary assets and liabilities continue to be recorded at
the exchange rate of the date of the transaction.
2.6 MEASUREMENT CRITERIA
PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recorded at the purchase or production cost, net of
accumulated depreciation and any impairment. The cost includes directly attributable costs
incurred in order to condition the asset for its use and any dismantling or removal costs that will
be incurred as a result of contractual obligations requiring the property to be returned in its
original condition. Borrowing costs are also included within the cost of the asset if the
conditions of IAS 23 are satisfied.
Expenses incurred for ordinary and/or cyclical maintenance and repairs are charged directly to
the income statement when incurred. Costs incurred for expansion, modernization or upgrade
of owned or leased assets are capitalized to the extent that they meet the requirements to be
classified separately as an asset or part of an asset.
Property, plant and equipment acquired through finance leases, in which the risks and rewards
of the assets are substantially transferred to the Group, are recorded as assets at the lower of
the assets fair value or the present value of the minimum lease payments, including any
purchase option. The property, plant and equipment held under finance lease is depreciated on
a straight line basis over the useful life of the asset, unless the duration of the finance lease is

Notes to the consolidated financial statement 2012

Pagina 6

Moleskine Group

shorter than the useful life of the assets and it is not reasonably certain that ownership of the
asset will be transferred to the Group. In such instances the asset is depreciated over the
duration of the finance lease contract.
Leases where the lessor substantially retains all the risks and rewards of ownership are recorded
as operating leases. Payments made under operating leases are recorded in the statement of
comprehensive income on a straightline basis over the period of the lease contract.
Depreciation is charged using the straightline method, at rates that allow depreciation of the
assets until the end of their useful life.
The depreciation rates estimated by the Group for different categories of property, plant and
equipment are as follows:

Depreciation rate %
Computer equipment

20%

Miscellaneous equipment

15%

Exhibition stands

20% 50%

Office furniture

12% 33%

Furniture

12%

Office equipment

20%33%

Vehicles

25%33%

Leasehold improvements

straightline basis over the term of


the leasing contract

The depreciation rates of property, plant and equipment and their residual values are revised
and updated, if necessary, at each statement of financial position date.
GOODWILL

Goodwill is defined as the excess between the amount of consideration transferred in a business
combination, the amount of shareholders equity belonging to noncontrolling interests and the
fair value of any shareholding previously held in the acquired company compared with the fair
value of the net assets acquired and liabilities assumed on the date of acquisition. If the value of
the net assets acquired and liabilities assumed on the date of acquisition exceeds the amount of
consideration transferred, the value of the shareholders equity belonging to noncontrolling
interests and the fair value of any shareholding previously held in the acquired company, this
excess is immediately recognized in the statement of comprehensive income.
Goodwill is not amortized but is tested annually for impairment. The impairment test is
performed with reference to the cash generating unit (CGU) to which the goodwill is attributed.
Any impairment of goodwill is recognized if the recoverable amount of the goodwill is lower than
its carrying amount. Recoverable amount is understood as the greater of the fair value less costs

Notes to the consolidated financial statement 2012

Pagina 7

Moleskine Group

to sell of the CGU, and the respective value in use. Revaluation of goodwill in the event of a
previous writedown due to impairment is not allowed. In the event that the impairment
resulting from the test is greater than the amount of goodwill allocated to a CGU, the residual
excess is allocated to the other assets included in the CGU proportionately to their carrying
amount.
Impairment testing is performed at least annually or more frequently if events or changes in
circumstances indicate a potential impairment.
TRADEMARKS

The Moleskine trademark is considered as an intangible asset with indefinite useful life, as
confirmed by an independent expert opinion. Accordingly the trademark is not amortized but is
tested for impairment by performing the impairment test identified above in the paragraph
above relating to goodwill.
INTANGIBLE ASSETS WITH FINITE USEFUL LIVES

Intangible assets are identifiable nonmonetary assets that have no physical substance, which
are controllable and capable of generating future economic benefits. Such assets are recognized
at purchase and/or production cost, including directly attributable expenses to prepare the
assets for their use, net of accumulated amortization and any impairment.
Amortization is calculated using the straight line method on the basis of the estimated useful
life from the moment when the intangible asset is available for use. The useful life estimated by
the Group for the different categories of intangible assets is 35 years.
IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

At each reporting date, the Group performs analyses in order to identify the existence of
indicators of the impairment of property, plant and equipment and intangible assets which are
not fully depreciated or amortized. If such indicators are identified, the recoverable amount of
such assets is estimated, recording in the statement of comprehensive income any writedown
compared with the book value. The recoverable amount of an asset is the greater of its fair value
less costs to sell, and its value in use, calculated as the present value of the assets estimated
future cash flows. For an asset which does not generate broadly independent cash flows, the
realization value is determined in relation to the cashgenerating unit to which that asset
belongs. In determining the value in use, the expected future cash flows are discounted at a
discount rate which reflects the current market valuation of the cost of money, considering the
period of the investment and the specific risks of the asset. An impairment is recognized in the
statement of comprehensive income when the book value of the asset is greater than the
recoverable amount. When the reasons for recording the impairment no longer exist, the
impairment loss recognized is reversed to the statement of comprehensive income and the
carrying amount of the asset is increased to its recoverable amount, however, the increased
amount cannot exceed the book value that would have been determined, net of depreciation,
had no impairment loss been recognized for the asset in prior years.

Notes to the consolidated financial statement 2012

Pagina 8

Moleskine Group

TRADE RECEIVABLES AND OTHER CURRENT AND NON


NONCURRENT RECEIVABLES

Trade receivables and other current and noncurrent receivables (financial assets) are financial
instruments, primarily receivables from customers, which are not derivatives and are not quoted
on an active market, for which fixed or determinable payments are expected. Trade receivables
and other receivables are classified as current assets in the statement of financial position,
except for those with a contractual maturity greater than 12 months from the date of the
statement of financial position, which are classified as noncurrent assets.
These financial assets are recorded in the statement of financial position from the point at which
the Group becomes counterparty of the related contract. Financial assets are derecognized when
the rights to receive cash flows have expired or have been transferred, or when the Group has
substantially transferred all the risks and rewards of ownership to a third party.
Such assets are initially recognized at fair value and subsequently at amortized cost, using the
effective interest rate method, less any impairment.
If objective evidence exists that the Group will not be able to recover the receivable in
accordance with the contractual terms, an impairment loss is recognized.
The amount of the writedown is measured as the difference between the book value of the
asset and the present value of the assets future cash flows.
Receivables are presented in the statement of financial position net of the provision.
DERIVATIVE FINANCIAL INSTRUMENTS

All derivative financial instruments (including embedded derivatives) are recognized at fair
value.
Paragraph 10 of IAS 39 defines an embedded derivative as a component of a hybrid (combined)
instrument that also includes a nonderivative host contract. A hybrid financial instrument is
composed of a nonderivative host financial instrument and a derivative that modifies the
features of the hybrid financial instrument, making its cash flows fluctuations similar to those of
an independent derivative financial instrument. An embedded derivative affects the financial
instrument cash flows depending on changes on interest rates, on exchange rates, or other
variables. Depending on the conditions, it may be necessary to separate the embedded
derivative from the host contract and separately recognize its fair value.
In the Groups financial statements, embedded derivatives are present in contracts to purchase
raw material and finished goods in currencies other than the Group entitys and the suppliers
functional currency. In this case the host contract is the purchase contract in Euro and the
derivative financial instrument is the exposure to fluctuations of the contract currency against
the Euro.
Derivative financial instruments are classified as hedging instruments when the relationship
between the derivative and the hedged item is formally designated and documented, and the
hedging effectiveness, which is periodically tested, is high.

Notes to the consolidated financial statement 2012

Pagina 9

Moleskine Group

The following accounting policies are applied:


i) Fair value hedge changes in the fair value of derivatives that are designed as fair value
hedges are recorded in the statement of comprehensive income, together with any
changes in the fair value of the hedged asset or liability;
ii) Cash flow hedge if the derivative financial instrument is designated to hedge against
the cash flow risk arising on an asset, liability or a highly probable event which could have
an effect on the statement of comprehensive income, the effective portion of the gain or
loss on the derivative financial instrument is recognized in equity (through other
comprehensive income). Accumulated gains and losses are reversed form equity into the
statement of comprehensive income in the same period in which the hedged event is
realized. Gains and losses relating to the portion of the hedge that becomes ineffective
are recorded in the statement of comprehensive income when the ineffectiveness is
realized.
Changes in the fair value of derivatives that do not meet the requirements for hedge accounting
are recorded in the statement of comprehensive income.
FAIR VALUE ESTIMATION OF FINANCIAL INSTRUMENTS

The fair value of financial instruments traded in active markets is based on quoted market prices
at the statement of financial position date. The fair value of financial instruments which are not
traded in an active market is determined by using valuation techniques based on methodologies
and assumptions using market conditions at the statement of financial position date.
INVENTORY

Inventory is stated at the lower of purchase or production cost, using the weighted average cost
method, and the net realizable value calculated as the amount which the Group intends to
obtain from its sale in the normal conduct of its business.
CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash on hand, bank current accounts, on demand deposits
and other shorttime highly liquid financial investments, which are readily convertible into cash
or cash equivalents within 90 days of the original date of acquisition and are subject to an
insignificant risk of change in value.
FINANCIAL LIABILITIES, TRADE PAYABLES AND OTHER LIABILITIES

Financial liabilities (other than derivative financial instruments), trade payables and other
payables are initially recognized at fair value, net of directly attributable transaction costs, and
are subsequently measured at amortized cost applying the effective interest rate method. If there
is a change in the expected cash flows which can be reliably determined, the value of the
liabilities is recalculated to reflect this change. Financial liabilities are classified as current
Notes to the consolidated financial statement 2012

Pagina 10

Moleskine Group

liabilities, unless the Group has the unconditional right to defer payment for at least twelve
months after the statement of financial position date.
Financial liabilities are derecognized at the time of their extinguishment and when the Group
has transferred all the risks and charges relating to the instrument.
POST EMPLOYMENT AND OTHER EMPLOYEE BENEFITS

Post employment and other employee benefits paid during or after termination of the
employment relationship consist primarily of postemployment benefits (Trattamento di Fine
Rapporto TFR), governed by Italian law under Article 2120 of the Italian Civil Code. TFR is
considered as a defined benefit plan, i.e. a formalized program of benefits following the end of
the employment relationship constituting a future obligation and for which the Group assumes
the respective actuarial and investment risks. As required by IAS 19, the Group uses the
Projected Unit Credit Method to determine the present value of the obligation and the respective
provision of current employment benefits; this calculation requires the use of objective actuarial
hypotheses consistent with demographic variables (mortality rate, personnel turnover rate) and
financial variables (discount rate, future increases in remuneration levels). Actuarial gains and
losses are recognized in equity.
As a result of Italys social security reform, starting from January 1, 2007 the TFR accruals can be
allocated to pension funds set up at the Italian National Society Security Institute or, in the case
of entities with less than 50 employees, may remain within the company, in accordance with
previous years. Employees were given the option of choosing how to allocate their TFR until June
30, 2007.
The liabilities for previous TFRs continue to represent a defined benefit plan to be valued
according to actuarial hypotheses.
PROVISIONS FOR RISKS AND CHARGES

Provisions are recorded for specific losses or liabilities that are certain or probable, the amounts
and or timing of which cannot be determined accurately at the period end.
Provisions are recognized only when a present legal or constructive obligation exists as a result
of a past event and it is probable that an outflow of resources will be required to settle the
obligation. The amount of the provision reflects the best estimate of the expenditure required to
settle the obligation. The discount rate used to determine the present value of the provision
takes into account market conditions and the risk profile of the associated liability.
When the time value is significant and the date of settlement can be reliably estimated,
provisions are measured at the present value of the payments expected to be required to settle
the obligation using a rate that reflects current market assessments of the time value of money
and the risks specific to the obligation. The increase in the provision due to the passage of time
is recognized in finance expense.
No provision is recorded for risks for which a liability is not probable, but only possible. Such
risks are however disclosed as contingent liabilities.

Notes to the consolidated financial statement 2012

Pagina 11

Moleskine Group

REVENUE RECOGNITION

Revenues from the sale of goods are recognized in the statement of comprehensive income at
the time of transfer to the customer of the risks and benefits of the product sold, normally
coinciding with delivery or shipment of the merchandise to the customer. Revenues from
services are recognized in the accounting period in which the services are rendered, with
reference to the completion of the service provided and in relation to the total services yet to be
rendered.
Revenues are recognized at the fair value of the consideration received. Revenues are recognized
net of valueadded taxes, expected returns, discounts and allowances.
RECOGNITION OF COSTS

Costs are recognized when goods and services are purchased.


SHARE
SHAREBASED PAYMENT TRANSACTIONS

For sharebased payments, the Group recognizes the cost of the service when the service is
provided. The counter entry is recorded in equity or as a liability depending on the transaction,
and in particular whether the transaction will be settled through the issuance of shares (equity
settled) or by a cash payment (cash settled).
For cashsettled sharebased payments, the Group records the service received and associated
liability at fair value. At the end of each reporting period until the liability is settled, the fair value
of the liability is remeasured, with any changes in fair value recognized in the statement of
comprehensive income.
For equitysettled sharebased payments, the Company assesses the fair value only at the plans
grant date. An equity settled plan is also identified where other group entities have the liability
for settlement.
INCOME TAXES

Current taxes are calculated based on the taxable income for the year, applying the current tax
rates on the date of the financial statements.
Deferred taxes are calculated for all differences emerging between the tax basis of an asset or
liability and the respective carrying amount. Deferred tax assets, including those relating to tax
losses not offset by deferred tax liabilities, are recognized to the extent that it is likely that future
taxable income will be available against which they may be recovered. Deferred taxes are
determined using the tax rates that are expected to apply in the periods in which the differences
will be realized or extinguished, based on the tax rates in force or substantially in force on the
statement of financial position date.
Current and deferred taxes are recognized in the statement of comprehensive income, except for
those related to items charged or credited directly in equity, in which case the respective tax

Notes to the consolidated financial statement 2012

Pagina 12

Moleskine Group

impact is also recognized directly to equity. Taxes are offset when they are applied by the same
tax authority and there is a legal right to offset.
EARNINGS PER SHARE

Basic
Earnings per share is calculated dividing the profit attributable to the Group by the weighted
average of the ordinary shares outstanding during the period, excluding any treasury shares.

Diluted
Diluted earnings per share is calculated dividing the profit attributable to the Group by the
weighted average of ordinary shares outstanding during the year, excluding any treasury shares.
To calculate diluted earnings per share, the weighted average of the shares outstanding is
modified assuming the conversion of all the potential shares having a dilutive effect, while the
Groups net profit is adjusted to take into account the effects of the conversion, net of tax.
3. ESTIMATES AND ASSUMPTIONS
The preparation of the Consolidated Financial Statements requires that management apply
accounting standards and methods which, under certain circumstances, are based on difficult
subjective measurements and estimates based on past experience and on assumptions
considered, at various times, to be reasonable and realistic in terms of the respective
circumstances. The use of such estimates and assumptions affects the amounts reported in the
Consolidated Financial Statements, as well as the information disclosed. Actual results for
those areas requiring management judgment or estimates may differ from those recorded in the
financial statements due to the occurrence of events and the uncertainties which characterizes
the assumptions and conditions on which the estimates are based.
The areas applicable to the Group, that require greater subjectivity of management in making
estimates and where a change in the conditions underlying the assumptions could have a
significant impact on the Groups financial statements are described in brief below:
a) Goodwill and trademarks: goodwill and trademarks with indefinite useful lives are subject
to an annual impairment test to ascertain whether there has been any impairment, which
is recognized through a writedown, when the carrying amount of the cash generating
unit to which it is allocated is greater than its recoverable amount (defined as is the
greater of its value in use and its fair value). The calculation of these values requires
management to perform subjective evaluations based on information available within the
Group and externally, as well as on past experience. When a potential impairment has
been identified, the Group calculates the impairment using valuation techniques deemed
suitable. The impairment test is also performed on intangible and tangible assets on
identification of impairment indicators which suggest that the Group may not be able to
recover the book value of the asset through use. The identification of impairment
indicators and the estimate of the impairment depend on factors that may vary over time,
influencing the measurements and estimates made by management.

Notes to the consolidated financial statement 2012

Pagina 13

Moleskine Group

b) Allowance for doubtful trade receivables: the allowance for doubtful trade receivables
represents managements best estimate of losses on trade receivables. The estimate is
based on the Groups expected losses, on the history of similar receivables, on
receivables which are currently or were historically overdue, analyses performed on the
quality of receivables and on economical and market projections.
c) Deferred taxes: deferred taxes are accounted for based on expectations of taxable income
in future years. The valuation of expected taxable income for purposes of accounting for
deferred tax assets depends on factors that may vary over time and have significant
effects on the recoverability of such assets.
d) Management incentive scheme costs: the accounting for the costs of the management
incentive scheme (as described in Note 7.5 Personnel Costs) is influenced by the
estimated timing of the occurrence of events related to the incentive scheme as well as
the possibility of such events occurring (in particular the listing of the Companys shares)
and the expected value of the plan. These estimates depend on factors which vary over
time, that are difficult for management to predict. Changes in these factors can
significantly influence the costs accounted for.
e) Provisions for risk and charges: Provisions are recorded for legal and tax issues, for
which a negative outcome at the reporting date is probable. The amount of provisions
recorded represent managements best estimates at the reporting date, which involve
assumptions that may vary over time and, therefore, could have a significantly different
impact compared with the current estimates made by management in preparing the
Groups financial statements.
f) Derivative financial instruments (refer to Note 2.6 Measurement criteria).
g) Provision for inventory obsolescence.
4.1 Accounting standards, interpretations and amendments applied starting January 1, 2012
Summarized below are the accounting standards, interpretations and amendments whose
application is obligatory for periods commencing January 1, 2012. These standards,
interpretations and amendments have not had an impact on the Groups financial statements,
as they are not applicable to the Group:

Description

Amendments to IFRS 7: Financial


instruments: Disclosure, on
transfer of financial assets

Endorsed by the EU at
the date of the
financial statements

Effective date

November 2011

Annual periods beginning on or after July 1, 2011

Notes to the consolidated financial statement 2012

Pagina 14

Moleskine Group

Amendments to IAS 12 Deferred


Tax Recovery of Underlying Assets

December 2012

Annual periods beginning on or after Jan 1, 2012

4.2 Accounting
Accounting standards, interpretations and amendments not yet applicable or not yet
adopted by the group
Summarized below are the international accounting standards, interpretations, amendments to
the existing standards and interpretations or specific provisions included in standards or
interpretations of the IASB, with an indication of those which have and have not been adopted
for use in Europe at the date of the Consolidated Financial Statements:

Endorsed by the EU at
the date of the
financial
financial statements

Effective date

NO

Annual periods beginning on or after Jan 1, 2015

December 2012

Annual periods beginning on or after Jan 1, 2014

December 2012

Annual periods beginning on or after Jan 1, 2014

IFRS 12 Disclosure of Interests in


Other Entities

December 2012

Annual periods beginning on or after Jan 1, 2014

IFRS 13 Fair Value Measurement

December 2012

Annual periods beginning on or after Jan 1, 2013

Description

IFRS 9: Financial instruments


IFRS 10 Consolidated Financial
Statements and IAS 27 (amended)
Separate Financial Statements
IFRS 11 Joint Arrangements and
IAS 28 (amended) Investments in
Associates and Joint Ventures.

Amendments to IAS 1 Financial


statement
Presentation Presentation of Items
of Other Comprehensive Income
IAS 19 (amended) Employee
Benefits
IFRS 7 Disclosures Offsetting
Financial Assets and Financial
Liabilities

June 2012

June 2012

Annual periods beginning on or after Jan 1, 2013

December 2012

Annual periods beginning on or after Jan 1, 2013

NO

Annual periods beginning on or after Jan 1, 2013

Amendment to IFRS 1First


time adoption Government loans
Amendment to IAS 32 Financial
instruments Presentation
Offsetting financial assets and
financial liabilities

Annual periods beginning on or after July 1, 2012

December 2012

Notes to the consolidated financial statement 2012

Annual periods beginning on or after Jan 1, 2014

Pagina 15

Moleskine Group

IFRIC 20 Stripping costs in the


production phase of a surface mine

December 2012

Annual periods beginning on or after Jan 1, 2013

NO

Annual periods beginning on or after Jan 1, 2013

December 2012

Annual periods beginning on or after Jan 1, 2014

NO

Annual periods beginning on or after Jan 1, 2014

Amendments to IFRS 10, 11


and 12 on transition guidance
IAS 28 (revised 2011)
Associates and joint
ventures
Amendments to IFRS 10, IFRS 12
and IAS 27 Investment entities

The Group did not early adopt any accounting standards and or interpretations whose
application is obligatory for periods commencing subsequent to January 1, 2012.
The Group is assessing the effects of the application of the new standards and amendments
above, which are currently not considered to be material.

5. SEGMENT REPORTING
IFRS 8 Operating Segments defines an operating segment as a component of an entity:

that engages in business activities from which it may earn revenues and incur expenses;

whose operating results are regularly reviewed by the entitys chief operating decision
maker; and

for which discrete financial information is available.

For the purposes of IFRS 8 Operating Segments, the activity in which the Group engages may
be classified into a single operating segment.
The Groups structure, organized by product lines, distribution channels and geographical areas,
identifies a strategic, unitary vision of the business. Such representation is consistent with the
manner in which management makes decisions, allocates resources and defines the
communication strategy, thus rendering a possible split of the business into segments
inefficient.
In the interest of full disclosure, a breakdown of revenues by product line, distribution channel
and geographical area is presented in Note 7.1 Revenues.
In accordance with the requirements of IFRS 8, paragraph 33, the following is a breakdown of
property, plant and equipment and intangible assets by geographical area. Assets have been
allocated according to the country in which each asset operates, with the exception of
trademarks and goodwill, the value of which has been included in the line Nonallocated.

Notes to the consolidated financial statement 2012

Pagina 16

Moleskine Group

In thousands of Euro
F i xed as s ets b y g eo g r ap h i c al ar ea
Italy
USA
Asia
Nonallocated
T o tal fi xe d as s ets

A s o f D ec emb er 3 1,
2 0 12
2 0 11
3.734
2.118
96
52
353
49
76.751
76.513
80.934
78.732

5.1 Major customers


Considering the Groups business model, which relies largely on indirect sales through
distributors, the revenues earned by the Group through the largest distributor, operating
exclusively in the U.S. market, accounted for 25% and 22% of total revenues for the years ended
December 31, 2012 and 2011, respectively.

Notes to the consolidated financial statement 2012

Pagina 17

Moleskine Group

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION


6.1 Property, plant and equipment
The following tables set forth movements in Property, plant and equipment for the years
ended December 31, 2012 and 2011:
In thousands of Euro
A s of
D ec emb er 3 1,
2 0 11

A d d i ti o ns

D i s p o s al s / Oth
er mo v ements

E xc h ang e
r ate
d i ffer enc es

A s o f D ec emb er
3 1, 2 0 12

Property, plant and equipment


Cost
Computer equipment
Miscellaneous equipment
Workshop
Exhibition stands
Ind u s tr i al and c ommer c i al eq u i p ment

68
570
131
106
875

39
216
413
191
859

Office furniture
Furniture
Office equipment
Vehicles
Oth er as s ets

357
23
280
72
732

297

374

(56)
(5 6 )

Leas eh o l d i mp r o v ements

899

10 8

14

1. 0 2 1

2.506

1. 3 4 1

(4 2 )

3.805

T o tal c o s t

107
786
544
297
1. 7 3 4

654
23
357
16
1. 0 5 0

77

A c c u mu l ated d epr ec i ati o n


Computer equipment
Miscellaneous equipment
Workshop
Exhibition stands
Ind u s tr i al and c ommer c i al eq u i p ment

(61)
(139)
(18)
(80)
(2 9 8)

(9)
(86)
(46)
(43)
(18 4 )

Office furniture
Furniture
Office equipment
Vehicles
Oth er as s ets

(129)
(14)
(109)
(70)
(3 2 2)

(50)
(3)
(92)
(14 5 )

Leas eh o l d i mp r o v ements

(5 0 5)

(19 1)

(1. 12 5 )

(5 2 0 )

577
410
394
1. 3 8 1

675
229
(83)
821

T o tal ac c u mu l ated d ep r ec i ati o n

56
56

(70)
(225)
(64)
(123)
(4 8 2 )

(179)
(17)
(201)
(14)
(4 11)
(6 9 6 )

56

(1. 5 8 9 )

Net b o o k v al u e
Industrial and commercial equipment
Other assets
Leasehold improvements
Pr o p er ty, p l ant and eq u i p ment Net b o o k v al u e

Notes to the consolidated financial statement 2012

14
14

1.252
639
325
2 . 2 16

Pagina 18

Moleskine Group

In thousands of Euro
A s of D ec emb er
3 1, 2 0 10

A dd i ti ons

D i s pos al s /
Other
mo vements

Exchang e r ate
di ffer ences

As of
D ec emb er 3 1,
2 0 11

Property, plant and equipment


C o st
Computer equipment
Miscellaneous equipment
Workshop
Exhibition stands
In dus tr i al and commer ci al eq u i pment

78
472

Office furniture
Furniture
Office equipment
Vehicles
Other ass ets

267
23
152
72
5 14

2 18

357
23
280
72
732

Leasehol d i mpr ov ements

733

16 6

899

1. 7 19

800

T otal c ost

64
330

4
240
144
28
4 16

68
570
131
106
875

(13)
(13 )

90
128

(13 )

2 .506

A c cu mul ated d epr eci ati on


Computer equipment
Miscellaneous equipment
Workshop
Exhibition stands
In dus tr i al and commer ci al eq u i pment

(55)
(76)
(50)
(18 1)

(6)
(64)
(18)
(30)
(118 )

Office furniture
Furniture
Office equipment
Vehicles
Other ass ets

(81)
(11)
(59)
(52)
(2 0 3 )

(48)
(3)
(50)
(18)
(119 )

(129)
(14)
(109)
(70)
(3 2 2 )

Leasehol d i mpr ov ements

(3 2 7 )

(17 8 )

(5 0 5 )

T otal acc umu l ated depr ec i ati on

(7 11)

(4 15 )

291
311
406
1. 0 0 8

298
99
(12)
385

(61)
(139)
(18)
(80)
(2 9 8 )

(1. 12 5 )

Net b ook val ue


Industrial and commercial equipment
Other assets
Leasehold improvements
Pr o per ty, pl an t and eq u i pment Net b oo k v al ue

(13)

(13 )

577
410
394
1. 3 8 1

As of December 31, 2012 none of the Groups property, plant and equipment was provided as a
guarantee or security to third parties, nor did the Group act as a lessor.
The investments in the year ended December 31, 2012, which amount to Euro 1,341 thousand,
relate primarily to the following:
-

miscellaneous equipment for Euro 216 thousand, relating primarily to the purchase of
molds for the production of items in the WTR collections;
exhibition stands for Euro 191 thousand, relating to the purchase of exhibition structures
(socalled Isole), loaned to retailers as an alternative item of the workshops, described
hereafter;
workshops for Euro 413 thousand, relating to the purchase of exhibition structures at
retail points of sale, loaned to distributors free of charge;

Notes to the consolidated financial statement 2012

Pagina 19

Moleskine Group

furniture for Euro 297 thousand for the temporary stores based in Milan, Rome, Turin,
Naples and in the airport of Rome Fiumicino;
leasehold improvements for Euro 108 thousand, relating primarily to renovation work at
our subsidiaries offices.

6.2 Goodwill and trademarks


The following table sets forth a breakdown of Goodwill and trademarks as of December 31,
2012 and 2011:
Goodw ill and trademarks
Moleskine Trademark
Modo & Modo acquisition goodwill
Total g oodw ill and trademark s

A s of December 3 1,
2 0 12
2 0 11
54.461
54.223
22.290
22.290
7 6 .7 5 1
7 6 .5 13

As of December 31, 2012, Goodwill and trademarks amounts to Euro 76,751 thousand (Euro
76,513 thousand as of December 31, 2011) and includes the Moleskine trademark amounting to
Euro 54,461 thousand and goodwill amounting to Euro 22,290 thousand. Goodwill mainly
represents the difference between the contribution paid for the acquisition of Modo e Modo
S.p.A. in October 2006 and the net fair value of the assets acquired and liabilities assumed.
The increase in the value of the trademark compared to the value as of December 31, 2011 is as
a result of the costs incurred to register the trademark and the new logo in new countries and for
new classes of products, as well as registration of the new legal status.
Both the trademark and goodwill are intangible assets with indefinite useful lives.
With specific reference to the indefinite useful life of the Moleskine trademark, based on such
consideration, an analysis was performed by the Company of all the significant (legal, juridical,
contractual, competitive, economic and other) factors connected with the trademark: the
conclusion reached is that there is not a foreseeable period of time over which the Company
expects that the use of the trademark will generate cash inflows.
This assessment is also confirmed by an expert legal opinion prepared by an independent expert
that states it is impossible to assign a finite useful life to this intangible asset given the absence
of factors that could cause its obsolescence and in light of the life cycles of the products to
which the trademark relates.
The main considerations made by the Company are detailed below:

In the past, the Moleskine brand was applied, intensively and increasingly, to a series of
products of the called Paper Collection, i.e. diaries, notebooks and address books. The
remaining useful life of these products is quite long and cannot be estimated easily, and
processes of product marginalisation are not known or foreseeable;

Notes to the consolidated financial statement 2012

Pagina 20

Moleskine Group

Starting from the year 2010, the Moleskine trademark has increasingly been the subject
of brand extension policies to product categories other than Paper, as a result of which
it has been extended to products with an individual life cycle in the socalled WTR
Collections, such as writing instruments (pens, pencils, etc.), reading instruments
(reading glasses and booklights), and handgoods (backpacks, bags, laptop and
smartphone cases), to name a few;
There are no contractual arrangements, regulations or law provisions capable of limiting
the useful life, or making it difficult to extend the registration of the trademark, which on
the contrary can easily be undertaken and at limited cost;
The maintenance costs of the Moleskine trademark appear to be limited. With regard to
historical products (diaries and notebooks) awareness of the brand has spread with
limited promotional and advertising expenditure. The policy of extending the brand to
product categories other than those in which the Company has operated since its origin
(the Paper Collection) requires larger but still modest expenditures, given the brands
ability to establish itself independently also in nontraditional merchandise categories,
which in turn originates from its high recognition.

As of December 31, 2012 goodwill and trademarks have been tested for impairment, in
accordance with IAS 36, in order to determine whether such assets have become impaired. In
order to perform the impairment test both the trademark and goodwill have been allocated to
the cashgenerating unit (CGU) associated with Business to Consumer (B2C) sales.
The impairment test is performed by comparing the carrying amount of goodwill, the trademark
and the total net assets of the B2C CGU with that CGUs value in use. The value in use is
calculated using the discounted cash flows (DCF), discounting the unlevered free cash flow
associated with the CGU, as derived from strategic plans prepared by management covering the
three years after the date of impairment test.
The longterm growth rate used in the calculations was 2%, being the average expected annual
growth rates for developed economies (OECD) for the period covered by the plan.
The discount rate for the cash flows (the weighted average cost of capital WACC), which
reflects the markets assessments of the cost of money and specific risks associated with the
related business segment and geographical areas, is 13.2%.
Based on the impairment test, the estimated recoverable amount of the cashgenerating unit
exceeded its carrying amount as of the test date.
On the basis of the sensitivity analyses conducted, reasonable changes in the major variables
involved (an increase or decrease in WACC and growth rate of 0.5% and 1%, and 2% and 0%
respectively) did not result in potential impairment losses.
As of December 31, 2012 the Group management therefore believe that the conditions have
been met for maintaining the value of goodwill and the trademark.

Notes to the consolidated financial statement 2012

Pagina 21

Moleskine Group

6.3 Other intangible assets


The following tables set forth a breakdown of the movements in Other intangible assets for
the years ended December 31, 2012 and 2011:
In thousands of Euro

Other i ntang i b l e ass ets

As of
December 3 1,
2 011

Additions

Disposals /
Other
movements

R eclassifications

As of
December 3 1,
2 012

C o st

84
50
1.457

332
1.9 2 3

Development costs
Industrial patents and intellectual property rights
Concessions and licences
Intangibles in progress
Other intangible assets
Total co st

97
346
506
161
466
1.5 7 6

(14)
(14 )

181
396
1.963
161
784
3 .4 8 5

(44)
(40)
(1.080)
(354)
(1.5 18)

(14)
(14 )

137
356
883
161
430
1.9 6 7

A cc umul ated amo r ti zati o n


Development costs
Industrial patents and intellectual property rights
Concessions and licences
Other intangible assets
Total accumul ated amo r ti zati o n

(16)
(3)
(835)
(231)
(1.0 8 5 )

(28)
(37)
(245)
(123)
(4 3 3)

Net b o o k v al ue
Development costs
Industrial patents and intellectual property rights
Concessions and licences
Intangibles in progress
Other intangible assets
Other i ntang i b l e ass ets Net b o o k val ue

Notes to the consolidated financial statement 2012

68
47
622

101
838

69
309
261
161
343
1.14 3

Pagina 22

Moleskine Group

In thousands of Euro

Oth er i ntang i b l e as s ets

A s of
Decemb er 3 1,
2 0 10

A dditions

Disposals /Oth
er mov ements

968
73
225
1.2 6 6

84
50
416

107
657

(541)
(149)
(690)

(16)
(3)
(294)
(82)
(395)

427
73
76
576

68
47
122

25
262

R eclas sif ic ations

A s of
December 3 1,
2 0 11

Cost
Development costs
Industrial patents and intellectual property rights
Concessions and licences
Intangibles in progress
Other intangible assets
To tal c o s t

73
(73)

84
50
1.457

332
1.9 2 3

A c c u mu l ated amo r ti zati o n


Development costs
Industrial patents and intellectual property rights
Concessions and licences
Other intangible assets
To tal ac c umul ated amo r ti zati o n

(16)
(3)
(835)
(231)
( 1.0 8 5 )

Net b o o k v al u e
Development costs
Industrial patents and intellectual property rights
Concessions and licences
Intangibles in progress
Other intangible assets
Oth er i ntang i b l e as s ets Net b o o k v al u e

73
(73)

68
47
622

101
838

As of December 31, 2012, based on actual trends and projections, the Group did not identify any
impairment indicators with respect to other intangible assets.
The investments in the year ended December 31, 2012 amount to Euro 1,576 thousand and
relate primarily to the following:
-

outsourcing development of new applications of note taking drawing to allow the


purchase of digital products for IoS (Apples operating system), Android/Samsung and
Windows 8, for Euro 296 thousand (recorded as Industrial patents and intellectual
property rights), and the development of applications (in app purchase) that will be
available for these operating systems, for Euro 105 thousand (recorded as Other
intangible assets);
development of new technical features for the on line sales website for Euro 165
thousand (recorded as Other intangible assets) to improve the management of the
internet traffic for the webstore Moleskine.com;
purchase of new licenses and the implementation of new developments for the Navision
operating system, the business intelligence targit system, the payroll processing system
and implementing new interfaces with information systems to be managed in DOS, for
Euro 480 thousand (recorded as Concession and licences);
costs incurred during the period for the lease of sale space from a Chinese distributor,
for Euro 196 thousand (recorded as Other intangible assets);

Notes to the consolidated financial statement 2012

Pagina 23

Moleskine Group

6.4 Other non


noncurrent assets
The following table sets forth a breakdown of Other noncurrent assets as of December 31,
2012 and 2011:
Other nonc urrent as s ets
Security deposits
Advance to personnel
Tax receivables
To tal o ther nonc urrent as s ets

A s o f Dec ember 3 1,
2 0 11
2 0 12
240
142
15
12
34
34
289
18 8

Security deposits includes the amounts paid for deposits on outstanding lease agreements.
Tax receivables amounting to Euro 34 thousand refers in total to the refund for which
Moleskine has applied in accordance with the provisions of the AntiCrisis Decree (Article 6,
paragraph 1, of Law Decree No. 185 of 11/29/2008) with respect to overpayment of IRES and
nondeduction of IRAP during tax periods 2004 to 2007.

6.5 Inventories
The following table sets forth a breakdown of Inventories as of December 31, 2012 and 2011:
In thousands of Euro
In v en to r i es
Finished products, raw materials and semifinished products
Advance payments to suppliers
Provision for inventory obsolescence
T o tal i n v en to r i es

A s o f D ec emb er 3 1,
2 0 12
2 0 11
14.743
10.995
38
32
(2.497)
(2.124)
12 . 2 8 4
8.903

The following table presents the movements in the provision for inventory obsolescence during
the years ended December 31, 2012 and 2011:
Valori in migliaia di Euro
Ri manenz e
Rimanenze di prodotti finiti , semilavorati e materie prime
Anticipi a fornitori
Fondo svalutazione di magazzino
T o tal e Ri manen ze

A l 3 1 d i c emb r e
2 0 12

A l 3 1 d i c emb r e
2 0 11
10.995
32
(2.124)
8.903

As of December 31, 2012, inventories of finished products, net of the provision for inventory
obsolescence, consisted of the inventory of the Company amounting to Euro 11,865 thousand
(Euro 8,750 thousand as of December 31, 2011), the inventory of Moleskine America amounting
to Euro 179 thousand (Euro 121 thousand as of December 31, 2011), the inventory of Moleskine
Shanghai amounting to Euro 181 thousand and the inventory of Moleskine Asia amounting to
Euro 21 thousand.

Notes to the consolidated financial statement 2012

Pagina 24

Moleskine Group

As of December 31, 2012, the Group had goods held by third parties amounting to Euro 6,174
thousand.
Uses/releases of the provision for inventory obsolescence relate to disposals of products
(particularly agendas) made during the years concerned and the pulping of defective articles of
second and third choice. Accruals were made to the provision to cover the risk of the
obsolescence of agendas of the following year that were in inventory at the yearend, and to
cover slow moving products, for which the realizable value based on sales forecasts and
initiatives was estimated to be less than the inventory book value.
As of December 31, 2012 no inventories were pledged as guarantees.
6.6 Trade receivables
The following table sets forth a breakdown of Trade receivables as of December 31, 2012 and
2011:
In thousands of Euro
T r ad e r ec ei v ab l es
Trade receivables with customers
Invoices to be issued
Credit notes
Provision for doubtful receivables
T o tal tr ad e r ec ei v ab l es

A s o f D ec emb er 3 1,
2 0 12
2 0 11
16.298
133
(38)
(72)
16 . 3 2 1

12.537
148
(318)
(173)
12 . 19 4

The following table sets forth the movements in the provision for doubtful receivables for the
years ended December 31, 2012 and 2011:
In thousands of Euro
Pr o v i s i o n fo r d o u b tfu l r ec ei v ab l es
Opening balance
Accruals
Uses/releases
Pr o v i s i o n at year en d

Y ear 2 0 12
173
32
(133)
72

Year 2 0 11
428
159
(414)
17 3

For further discussion on credit risk see Note 16, Management of financial risks.
There are no receivables due in more than five years as of the reporting dates.
The following table sets forth the breakdown of trade receivables by currency:
In thousands of Euro
T r ad e r ec ei v ab l es
Euro
US dollar
Pound Sterling
HKD
CNY
T o tal tr ad e r ec ei v ab l es

Notes to the consolidated financial statement 2012

A s o f D ec emb er 3 1,
2 0 12
2 0 11
10.553
7.083
4.792
4.372
732
689
210
50
34

16 . 3 2 1
12 . 19 4

Pagina 25

Moleskine Group

6.7 Other current assets


The following table sets forth a breakdown of Other current assets as of December 31, 2012
and 2011:
In thousands of Euro
Oth er c u r r en t as s ets
Tax receivables
Prepayments to suppliers
Prepayments and accrued expenses
Listing costs
T o tal o th er c u r r en t as s ets

A s o f D ec emb er 3 1,
2 0 12
2 0 11
320
158
221
1.137
1. 8 3 6

12
93
121

226

As of December 31, 2012 Listing costs, which amounts to Euro 1,137 thousand, refers to
costs related to the IPO project. These costs have been accounted for in accordance with IAS 32.
On completion of the Listing the ratio between the number of new shares/ number of shares
after the IPO will determine the percentage of listing costs to be accounted for as a direct
reduction in equity. The remaining percentage will be recognized as an expense in the statement
of comprehensive income.
Tax receivables includes an amount of Euro 165 thousand relating to an IRES receivable paid as
a result of not deducting IRAP on employee related costs in previous tax periods (in particular
2007 to 2011) and is calculated net of the deductions of Legislative Decree no 446/97, Article.11,
comma.1, letter a), 1bis, 4bis and 4bis1. This receivable originates from the provisions of
article 2 of the Salva Italia decree (Legislative Decree No. 201/11) and will be reimbursed
according to specific measures issued by the Inland Revenue on December 17, 2012.
6.8 Cash and cash equivalents
Cash and cash equivalents (Euro 7,208 thousand as of December 31, 2012 and Euro 3,001
thousand as of December 31, 2011) relates to current accounts held with leading Italian, U.S.,
Chinese and Hong Kong financial institutions.
As of December 31, 2012, Cash held by the Groups companies is as follows:

Company
Moleskine S.p.A.

In thousands
of Euro
6,170

Moleskine America

279

Moleskine Asia

461

Moleskine Shangai

298

Total cash

Notes to the consolidated financial statement 2012

7,208

Pagina 26

Moleskine Group

As of December 31, 2012 there is no restricted cash.


The following table presents a breakdown of cash and cash equivalents by currency:
A s o f D ec emb er
3 1, 2 0 12

In thousands of Euro
Euro
US dollar
HKD
CNY
To tal

A s o f D ec emb er
3 1, 2 0 11

4.237
2.213
750
8

2.133
868

7.208

3.001

6.9 Shareholders equity


Movements in shareholders equity reserves are presented in the statement of changes in equity.
Share capital amounts to Euro 2,000 thousand as of December 31, 2012, is fully paidin and
consists of 200,000,000 shares with no nominal value per share.
6.10 Current and non
noncurrent financial liabilities
6.10.1 Non
Noncurrent financial liabilities
The following table sets forth a breakdown of noncurrent financial liabilities as of December 31,
2012 and 2011:
In thousands of Euro
A s o f D ec emb er 3 1, 2 0 12 A s o f D ec emb er 3 1, 2 0 11
No n c u r r en t f i n an c i al l i ab i l i ti es
Long term loans

39.895

49.653

887

754

40.782

50.407

IRS derivatives fair value


T o tal n o n c u r r en t f i n an c i al l i ab i l i ti es

6.10.2 Current financial liabilities


The following table sets forth a breakdown of current financial liabilities as of December 31,
2012 and 2011:
In thousands of Euro
A s o f D ec emb er 3 1, 2 0 12

A s o f D ec emb er 3 1, 2 0 11

C ur r ent fi n an c i al l i ab i l i ti es
Long term loans
Accrued interest
T o tal c u r r ent fi n an c i al l i ab i l i ti es

9.879
53

8.473
16

9 .93 2

8.489

* * *

Notes to the consolidated financial statement 2012

Pagina 27

Moleskine Group

As of December 31, 2012 the Group did not have any outstanding loans in currencies other than
Euro.
The following table presents a breakdown of financial liabilities (current and noncurrent) as of
December 31, 2012 and 2011:
In thousands of Euro
Fin a n cial l iabilitie s (curre n t
a n d n on curre n t)

I n te re st ra te

As of D e ce mbe r 31, 2012


Not ion al Comme n ce M aturity
amoun t me n t da te
dat e

Book
val ue

M at urin g M a turin g in
M at urin g
in 1 ye ar 2 5 ye ars ove r 5 ye ars

Facility Agreement Tranche A

Euribor 6 m + spread

41.600

2011

2016

29.479

9.091

20.388

Facility Agreement Tranche B

Euribor 6 m + spread

22.400

2011

2017

21.825

1.275

20.550

(1.530)
53
887
50.714

(487)
53

9.932

(1.043)

887
40.782

Borrowing costs
Accrued interest
IRS derivatives fair value
Total fin an cial lia bilitie s (curre n t an d n on curre n t )

In thousands of Euro
Fin a n cial l iabilitie s (curre n t
a n d n on curre n t)

I n te re st ra te

As of D e ce mbe r 31, 2011


Not ion al Comme n ce M aturity
amoun t me n t da te
dat e

Book
val ue

M at urin g M a turin g in
M at urin g
in 1 ye ar 2 5 ye ars ove r 5 ye ars

Facility Agreement Tranche A

Euribor 6 m + spread

41.600

2011

2016

37.819

8.514

Facility Agreement Tranche B

Euribor 6 m + spread

22.400

2011

2017

22.400

512

(2.093)
16
754
58.896

(553)
16

8.489

Borrowing costs
Accrued interest
IRS derivatives fair value
Total fin an cial lia bilitie s (curre n t an d n on curre n t )

29.305

21.888

(1.439)

754
28.620

(101)

21.787

As of December 31, 2012 long term bank loans related entirely to the Facility Agreement, a
floating rate loan subscribed with GE Capital S.p.A., Banca Popolare di Milano S.c.a.r.l. and
Banca Popolare di Lodi S.p.A. (the Lenders
Lenders)
Lenders on July 15, 2011. The Facility Agreement consisted
of two tranches, Tranche A and Tranche B, in the original amounts of Euro 41,600 thousand and
Euro 22,400 thousand, respectively, with final maturity dates of November 30, 2016 and
November 30, 2017, respectively. The repayment schedule for Tranche A envisaged the
repayment of principal installments on a halfyearly basis beginning on December 31, 2011,
whereas the repayment schedule for Tranche B envisaged the repayment in full in the year 2017,
in two equal tranches on May 30 and November 30.
The Company had secured the Facility Agreement on 100% of the Companys share capital, as
well as its intellectual property ownership rights to the Moleskine trademark in accordance with
Article 140 of the Industrial Property Code.
The Facility Agreement required mandatory repayments, in whole or in part, of the loan pursuant
to the following terms and conditions:
change of control: mandatory full prepayment of the loan if (i) Appunti does not hold
50% plus one share of the share capital with voting rights of the Company, (ii) or
Syntegra Investment does not hold 50% plus one share of the share capital with voting
rights of Appunti;

Notes to the consolidated financial statement 2012

Pagina 28

Moleskine Group

listing of the shares of the Company: mandatory partial prepayment of the loan, in case
of listing of the shares (event that does not determine a change of control), of 75% of the
proceeds deriving from such listing in case, at the time such listing takes place, the
Leverage Ratio (calculated as the ratio between net financial indebtedness and EBITDA)
is equal or above 2.00:1;
Excess Cash: mandatory partial prepayment of the loan from the approval of the annual
2011 financial statements of 75% of the Excess Cash generated in each financial year.
In brief the Excess Cash is equal to the difference between the consolidated cash flow
generated in the financial year and the payments related to the amortization of the
financial debts of the same financial year.

The Facility Agreement also required the Group to comply with the following covenants to be
calculated annually with respect to the Groups consolidated financial statements prepared in
accordance with Italian GAAP, and halfyearly on the basis of the internal management financial
information:
-

net financial indebtedness / EBITDA;

EBITDA / net interest for the period;

cash flow / debt repayment (including interest);

net financial indebtedness / equity; and

investments in property, plant and equipment and intangible assets.

Failure to comply with one of the covenants, where not remedied within the contractually
established terms, would trigger compulsory early repayment of the loan.
With regard to the early repayment clause of the Facility Agreement related to Excess Cash, the
Company, based on the provisions of the Facility Agreement and taking into account the
financial information at December 31, 2011, determined that the facilitys early repayment
obligation amounted to Euro 1,463 thousand. On October 19, 2012, the abovementioned
amount was finally agreed with the Lenders and paid by the Company.
Taking into account the financial information at December 31, 2012, the Company determined
that the facilitys early repayment obligation amounted to Euro 2,997 thousand. The early
repayment obligation arising from the abovementioned clause has an immediate effect.
Consequently, at December 31, 2012, the abovementioned amount was classified among current
financial liabilities due within one year, rather than among longterm financial liabilities, as
required under the original loan amortization plan. It should be noted that such amount is
based on management calculations and will be verified and approved by the Lenders.

Notes to the consolidated financial statement 2012

Pagina 29

Moleskine Group

On February 15, 2013 an agreement was made that amended the Facility Agreement as follows:
(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)
(viii)

(ix)

The Lenders give their consent to the listing of Moleskine shares on the Italian
electronic stockmarket (MTA), waiving their rights under the Facility Agreement
following the listing on condition that the Companys shares are traded on the MTA
by December 31, 2013. In particular, the Lenders waived the right to demand early
repayment of the loan;
The Lenders undertake to extinguish the pledge on the Companys shares, it being
understood that in the event of (i) failure of Moleskine shares to be traded on the
MTA by December 31, 2013, (ii) suspension or interruption of the global offering,
or (iii) failure to enter into lockup arrangements with management and
shareholders by the time the offer price is set and communicated, then the pledge
shall be reestablished;
In the event that trading of the Moleskine shares on the MTA commences by June
30, 2013, any amount that may be payable by the Company to the Lenders by way of
Excess Cash is not required to be paid;
The Excess Cash shall be payable, starting from the date of approval of the financial
statements as of December 31, 2013, (a) in the amount of 50% if the Leverage
Ratio (the ratio of net financial indebtedness to EBITDA) is equal to or higher than
0.5; or (b) in the amount of 40% if the Leverage Ratio is lower than 0.5;
Following the start of trading of Moleskine shares on the MTA, the Company shall
repay the loan in such an amount as to reduce the outstanding amount to Euro
20,000 thousand (the "Outstanding
Outstanding Amount")
Amount through, among other things, the
full repayment of Tranche B and a partial repayment of Tranche A;
The Company undertakes to pay the Lenders a waiver fee, by way of compensation
for the waiver by them of their rights under the Facility Agreement, equal to 150
basis points calculated on the Outstanding Amount;
The Change of Control clause is eliminated;
Starting from January 1, 2014, the Company may distribute dividends for amounts
(a) not exceeding 50% of the 'Excess Cash if the Leverage Ratio is equal to or higher
than 0.5; or (ii) not exceeding 60% of the 'Excess Cash if the Leverage Ratio is lower
than 0.5;
The final maturity date of the Facility Agreement for Tranche A is modified and will
be September 30, 2016.

Moreover, the amending agreement provides for the possibility for Moleskine to prepare
consolidated financial statements in accordance with EUIFRS as early as for the year ended
December 31, 2012 and, therefore, to calculate the covenants on this basis. Failure to comply
with one of the covenants, with reference to the year ended December 31, 2012 only, as a result
of the application of EUIFRS shall not trigger default under the terms of the Facility Agreement,

Notes to the consolidated financial statement 2012

Pagina 30

Moleskine Group

provided that the covenant is met on the basis of consolidated financial statements prepared
under Italian GAAP.
It should be noted that the net financial indebtedness / equity covenant, calculated on the basis
of consolidated financial statements as of December 31, 2012 prepared under EUIFRS, is not
complied with. However, all covenants required to be met for the year ended December 31, 2012
are complied with on the basis of consolidated financial statements prepared under Italian
GAAP. Consequently, based on the above, i.e. the provisions of the amending agreement, there
are no triggers of default with reference to the covenants as of December 31, 2012.
The amending agreement requires, starting from the date of listing of the Moleskine shares,
compliance with the following covenants to be calculated annually and halfyearly with respect
to the Groups consolidated financial statements prepared in accordance with EUIFRS:
-

Net financial indebtedness / EBITDA;


Cash flow / debt repayment (including interest);
Expenditure on property, plant and equipment and intangible assets.

For the year ended December 31, 2012 the spread on the loan was between 2% and 3.5%.
The following table sets forth the expected repayments required to fully repay the Facility
Agreement, taking into account the amendment signed on February 15, 2013:
In thousand of Euro

2 0 13

2 0 14

2 0 15

2 0 16

To tal

Repayment of the Facility Agreement (including interest) (*)

32.168

32.168

Repayment under the new repayment plan (including interest) (*)


Proceeds from public offering to repay debt (*)
Waiver fee for renegotiation of the loan

2.248
(31.304)
300

7.930

7.620

3.694

To tal r epaymen ts

3 . 4 12

7.930

7.620

3.694

21.492
(31.304)
300

22.656

(*) Such amounts have been calculated considering the clauses of the contract amendment signed on February 15, 2013 and on the basis that
the listing of the Companys shares takes place during the first half of 2013 (worst case in terms of cash outflow for the Company)

The following table sets forth the expected annual finance expense (including waiver fee) which
will be recorded in the Companys income statement until the expiry of such financing.
In thousand of Euro
F i n an c e expen ses

2 0 13
2.4 89

2 0 14
1. 0 4 4

2 0 15
560

2 0 16
94

To tal
4 . 18 7

Borrowing costs
The costs incurred by the Group to obtain bank borrowings have initially been recognized as a
decrease to the financial liability and subsequently recorded in the statement of comprehensive
income applying the amortized cost method in accordance with IAS 39.

Notes to the consolidated financial statement 2012

Pagina 31

Moleskine Group

Derivative financial instruments


The following table sets forth a breakdown of outstanding derivative financial instruments as of
December 31, 2012 and 2011:
In thousands of Euro

Der ivati ve financi al instruments

Derivative financial instruments on Facility Agreement:


IRS BPM
IRS MPS
IRS BP Lodi
Total deri vati ve fi nancial i nstr uments

Contract
Contr act
Noti onal val ue
c ommencemen
matur ity date at si g ning date
t date

Fai r value as of December 3 1,


2 0 12

2 0 11

32.000
7/29/2011
7/28/2011
8/2/2011

6/30/2014
6/30/2014
6/30/2014

583
207
97
887

495
177
82
754

During 2011, the Company entered into three IRS derivative contracts, originally amounting to
Euro 32,000 thousand, hedging the risk of fluctuation of the interest rate on the Facility
Agreement. Those contracts were designated as hedges according to the requirements of IAS 39
and as such were accounted for as cash flow hedges.
The effectiveness of the derivative was confirmed through the effectiveness test.
6.11 Deferred tax liabilities
Deferred tax liabilities represents the net balance of the deferred tax assets and deferred tax
liabilities arising on the temporary differences between the tax bases of assets and liabilities and
their carrying amounts.
The following tables set forth the movements in deferred taxes during the years ended
December 31, 2012 and 2011:
In thousands of Euro
D es c r i pti o n

Val u e as o f
D ec emb er 3 1,
2 0 11

Re l eas es / ac c r u al s Rel eas es / ac c r u al s


to P& L
to eq u i ty

Val u e as o f
D ec emb e r 3 1,
2 0 12

D efer r ed tax assets


Elimination of capitalized borrowing costs
Provision for inventory obsolescence
Derivatives fair value (IRS and embedded)
Elimination of intangible assets not eligible for capitalization under IAS 38
Provision for doubtful receivables
Provision for returns
Unrealized foreign exchange loss
Management incentive plan
Other
T o tal d efer r ed tax as s e ts

632
589
304
145
126
133
42

177
2 . 14 8

(49)
103
(130)
(30)
(119)
(4)
(28)
155
122
20

37

37

583
692
211
115
7
129
14
155
299
2.205

D efer r ed tax l i ab i l i ti es
Moleskine trademark
Amortized cost
Provision for postemployment benefit
Other
T o tal d efer r ed tax l i ab i l i ti es

(16.956)
(575)
(34)
(53)
(17 . 6 18 )

155
(24)
22
15 3

58

58

(16.956)
(420)

(31)
( 17 . 4 0 7 )

T o tal n et d efer r ed taxe s

(15 . 4 7 0 )

17 3

95

( 15 . 2 0 2 )

Notes to the consolidated financial statement 2012

Pagina 32

Moleskine Group

In thousands of Euro
D es c r i p ti o n

Val ue as o f
D ec emb er 3 1,
2 0 10

Rel eas es /
ac c r u al s to P& L

Rel eas es /
ac c r ual s to eq ui ty

Val ue as o f
D ec emb er 3 1,
2 0 11

D efer r ed tax assets


Elimination of capitalized borrowing costs
Provision for inventory obsolescence
Derivatives fair value (IRS and embedded)
Elimination of intangible assets not eligable for capitalization under IAS 38
Provision for doubtful receivables
Provision for returns
Unrealized foreign exchange losses
Other
T o tal d efer r ed tax as s ets

762
486
26
130
96
105
19
131
1. 7 5 5

(130)
103
71
15
30
28
23
46
18 6

207

207

632
589
304
145
126
133
42
177
2 . 14 8

D efer r ed tax l i ab i l i ti es
Moleskine trademark
Discounting of shareholders' debt
Amortized cost
Provision for postemployment benefit
Other
T o tal d efer r ed tax l i ab i l i ti es

(16.956)
(2.785)
(666)
(15)
(37)
(2 0 . 4 5 9 )

731
91
(27)
(16)
779

2.054

2.06 2

(16.956)

(575)
(34)
(53)
(17 . 6 18 )

T o tal net d efer r ed taxes

(18 . 7 0 4 )

965

2.26 9

(15 . 4 7 0 )

6.12 Post
Postemployment and other employee benefits
The following table sets forth the movements in Postemployment and other employee
benefits (the TFR
TFR)
TFR for the years ended December 31, 2012 and 2011:
In thousands of Euro
Opening b alanc e

Year ended Dec emb er 3 1,


2 0 12
2 0 11

Benefits paid
Actuarial (gains)/losses

569
179
31
(68)
211

474
135
24
(93)
29

Total pos temployment and other employee b enef its

922

569

Service Cost
Interest Cost

The principal assumptions used to calculate the value of the postemployment benefit liabilities
are as follows:
As of D e ce mbe r 31,
2011
2012
I n come st a t e me n t a ssump t ion s
Discount rate
Inflation rate
Rate of increase in wages

3,4%
2,0%
3,5%

5,5%
2,0%
3,5%

D e mogra p hic a ssump t ion s


Probability of resignation
Probability of TFR advances

4,0%
2,0%

4,0%
2,0%

Notes to the consolidated financial statement 2012

Pagina 33

Moleskine Group

6.13 Provisions for risks and charges (current and non


noncurrent)
The following tables present the movements in the provision for risks and charges for the years
ended December 31, 2012 and 2011:
In thousands of Euro
Pr o v i s i o n fo r r i s k s and c h ar g es
(c u r r ent and n o n c ur r en t)

A s o f D ec emb er
3 1, 2 0 11

A c c r ual s

105
419
524

150
387
537

A s o f D ec emb er
3 1, 2 0 10

A c c r ual s

105
332
437

375
375

Provision for risks


Provision for returns
To tal

Use

(357)
(3 5 7 )

Rec l as s i fi c ati o n A s o f D ec emb er


s
3 1, 2 0 12
62
(64)
(2 )

317
385
702

In thousands of Euro
Pr o v i s i o n fo r r i s k s and c h ar g es
(c u r r ent and n o n c ur r en t)
Provision for risks
Provision for returns
To tal

Use

(288)
(2 8 8 )

Rec l as s i fi c ati o n A s o f D ec emb er


s
3 1, 2 0 11

105
419
524

Provision for risks, which amounts to Euro 317 thousand as of December 31, 2012, include (i)
an amount of Euro 105 thousand for the estimated liability relating to the Official Report on
Findings from the Italian Revenue Authority, Provincial Directorate Milan 1, received on
December 22, 2010 and (ii) an amount of Euro 150 thousand relating to the accrual for a dispute
with a French distributor with whom the Company had been negotiating a change of distributor
for the French market during 2010 and 2011. No agreement was reached. The accrual
represents 50% of the claim for damages for precontractual liability from the interruption of
negotiations, advanced by the other party. The accrual is based on advice from French legal
advisors supporting the Company based on the evaluation of the summons received.

It should also be noted that on October 15, 2012 the Company received a Notice of Assessment
following the tax audit that ended with the notification of the Official Report on Findings
mentioned above. The Notice of Assessment confirmed the findings reported in the Official
Report on Findings and added observations made following the submission of a defence brief by
the Company. The latter, assisted by its tax consultants, opted to apply, on November 15, 2012,
for agreement to the tax authoritys proposed settlement pursuant to article 6 of Legislative
Decree No. 218/97, mainly with the intent to avoid lengthy litigation. Accordingly, on February 7,
2013 the Company filed a brief with the Provincial Directorate Milan 1 containing a proposal to
settle the claims raised in the Notice of Assessment. In light of the above and of the fact that to
date the Revenue Agency has not yet examined the case, the Company considers there are no
further elements justifying an additional provision for tax risks.
Reclassification of Euro 62 thousand relates to the reclassification of a trade payable with a
former distributor in the Japanese market. The payable, relating to 2008, was contested by the
Company as not due, however the distributor has never issued a credit note or chased payment
of the invoice. However, based on the information and evaluations available, the amount has
been reclassified to provisions for risks and charges.

Notes to the consolidated financial statement 2012

Pagina 34

Moleskine Group

Provision for returns amounts to Euro 385 thousand as of December 31, 2012. Uses of the
provision relate to credit notes issued for goods returned by customers from sale transactions in
the previous year. The accruals relate to managements estimate of returns of products sold
during the year for which the Company will issue credit notes. The reclassification of Euro 64
thousand relates to invoices to be received for returns with a German retailer.
6.14
6.14 Trade payables
The following table sets forth a breakdown of trade payables as of December 31, 2012 and 2011:
In thousands of Euro
As of D e ce mbe r 31 ,
2 01 2
2 01 1
13.647
8.343
2.244
1.150
(120)
354
(4)
(98)
15 .7 67
9. 74 9

Tr a de p a y a ble s
Trade payables with suppliers
Accrued invoices
Embedded derivatives fair value
Credit notes to be received
Tot a l t ra de p a y a bl e s

The figures include payables arising as a result of the operating activities of the Group, in
particular the purchase of raw materials and external processing services.
Embedded derivatives at fair value relate to the derivatives embedded within purchase contracts
denominated in U.S. dollars from suppliers whose functional currency is not the U.S. dollar. The
main purchases to which such derivatives relate are made from suppliers based in Vietnam,
China, Hong Kong and Taiwan.
At the above dates there were no payables due in more than 5 years.
The following table sets forth the breakdown of payables by currency:

In thousands of Euro
As of D e ce mbe r 31,
2011
2012
Euro
US dollar
CNY
HKD
Pound Sterling
Other currencies
Tot a l

Notes to the consolidated financial statement 2012

10.138
4.643
522
387
18
59

5.102
4.627

20

15.767

9.749

Pagina 35

Moleskine Group

6.15 Tax payables and receivables


Tax payables and receivables represent the Groups position with the tax authorities with respect
to current taxes, net of any prepayments.
6.16 Other current liabilities
The following table sets forth a breakdown of Other current liabilities as of December 31, 2012
and 2011:
In thousands of Euro
Oth er c ur r ent l i ab i l i ti es
Payables to employees and directors
Customer advance payments
Social security payables
Withholding taxes payable accrual for employees
Payables to supplementary pension funds
Withholding taxes payable accrual for selfemployed persons
Other miscellaneous liabilities
Other accrued liabilities
T o tal o th er c ur r en t l i ab i l i ti es

A s o f D ec emb er 3 1,
2 0 11
2 0 12
1.912
1.019
451
562
234
194
187
165
60
52
24
21
154
5
102
62
3 . 12 4
2 .0 8 0

Payables to employees and directors relate to liabilities for yearend bonuses, accrued and
unused holidays and leave, and loyalty and performance bonuses accrued during the year. In
relation to bonus see Note 7.5 Personnel Costs.

Other miscellaneous liabilities mainly include the VAT payable paid in January 2013.

Notes to the consolidated financial statement 2012

Pagina 36

Moleskine Group

6.17
6.17 Net financial indebtedness
The following table sets forth a breakdown of net financial indebtedness as of December 31,
2012 and 2011, calculated in accordance with the CONSOB Regulation of July 28, 2006 and the
ESMA/2011/81 Recommendations:

Net fi n an c i al i n d eb ted n es s

A s o f D ec emb er 3 1,
2 0 11
2 0 12

A.

Cash

7.208

3.001

B.

Cash equivalents

C.

Trading securities

D.

Li q u i d i ty (A ) + ( B ) + ( C )

7.208

3 .0 0 1

E.

Current financial receivables

F.

Short term bank debts

G.

Current portion of medium/long term financial loans

H.

Other current financial liabilities

(53)

(16)

I.

C u r r en t fi n an c i al l i ab i l i ti es (F ) + ( G ) + ( H)

(9 .9 3 2 )

(8 .4 8 9 )

J.

Net c u r r en t fi n an c i al i n d eb ted n es s ( I) + ( E ) + (D )

(2 .7 2 4 )

(5 .4 8 8 )

K.

Noncurrent portion of medium/long term financial loans

(39.895)

(49.653)

L.

Bonds issued

M.

Other medium/long term financial liabilities

(9.879)

(887)

(8.473)

(754)

N.

No n c u r r en t fi n an c i al l i ab i l i ti es (K) + ( L) + ( M )

(4 0 .7 8 2 )

(5 0 . 4 0 7 )

O.

Net fi n an c i al i n d eb ted n es s ( J) + (N)

(4 3 .5 0 6 )

(5 5 . 8 9 5 )

Notes to the consolidated financial statement 2012

Pagina 37

Moleskine Group

NOTES TO THE STATEMENT OF COMPREHENSIVE INCOME


7.1 Revenues
The following table sets forth a breakdown of revenues by distribution channel, product and
geographical area for the years ended December 31, 2012 and 2011:
In thousands of Euro
Year ended December 3 1,
2 0 12

2 0 11

Indir ect distr ibution


B2C revenues (1)

61.163

55.478

12.720
3.293
960
7 8 .13 6

10.664
1.113

Dir ect distr ibution


B2B revenues
Ecommerce revenues (2)
Retail revenues (3)
Revenues

6 7 .2 5 5

In thousands of Euro
Year end ed D ec emb er 3 1,
2 0 12
2 0 11
Paper collections
WTR collections (1) (4)

72.667
5.469

62.816
4.439

Revenu es
7 8 . 13 6
67.255
(1) Digital products and services (Digital
Digital)
Digital were launched in 2010 through the development of the notetaking application for iPhones
(Moleskine App). The revenues generated by these products in the years 2011 and 2012 were modest in amount, accordingly only B2C
revenues were included.
(2) Ecommerce activity began in July 2010 in Italy, in April 2011 in the rest of Europe and in August 2011 in the United States.
(3) The Retail activity began in June 2012 through two brand stores in Milan and in Rome and, from September 2012, through the sales
points of the previous Chinese distributor. During the third quarter of 2012 stores were opened in Turin, Naples and at the airport of
Rome Fiumicino.
(4) The full launch of the WTR Collections took place in June 2011.
In thousands of Euro
Year end ed D ec emb er 3 1,
2 0 11
2 0 12

Revenues by g eo g r aph i cal ar ea


Europe (including Italy), Middle East, Africa
USA/Canada/Latin America
Asia Australia
Rev enu es

41.217
28.119
8.800

41.078
20.003
6.174

7 8 . 13 6

67.255

Revenues generated in Italy amount to Euro 8,396 thousand in the year ended December 31,
2012 (Euro 9,461 thousand in the year ended December 31, 2011)
Revenues also include exchange differences realized on sales transactions in foreign currencies
other than each Group companys functional currency.

Notes to the consolidated financial statement 2012

Pagina 38

Moleskine Group

7.2 Other income


Other income refers primarily to revenues arising from the recharge of processing services.

7.3 Finished products, raw materials and consumables


The following table sets forth a breakdown of Finished products, raw materials and
consumables for the years ended December 31, 2012 and 2011:
In thousands of Euro
F i ni s h ed pr o ducts , r aw mater i al s and c o ns umab l es
Finished and semifinished products purchases
Raw materials purchases
Exhibition stands production
Catalogue
Packaging
Other
Change in inventories
To tal fi ni s h ed pr o ducts , r aw mater i al s and c o ns umab l es

Year ended D ec emb er 3 1,


2 0 12
2 0 11
16.180
14.704
3.511
2.702
1.715
1.553
231
244
125
112
(326)
373
(3.440)
(1.660)
17 . 9 9 6
18 . 0 2 8

Other includes gains and losses generated by exchange differences on purchase transactions
undertaken in foreign currencies other than each Group companys functional currency and fair
value changes of embedded derivatives.

Notes to the consolidated financial statement 2012

Pagina 39

Moleskine Group

7.4 Service costs


The following table sets forth a breakdown of Service costs for the years ended December 31,
2012 and 2011:
In thousands of Euro
S er vi c e c o s ts
Cost of sales
Sales transportation
Consulting fees
Processing costs
Storage costs
Marketing and communication expenses
Costs for general services
Design costs
Customs expenses
Maintenance, repairs and assistance
Rents
Royalties
Bank expense
Leasing
Administrative costs
T otal s er vi c e c os ts

Year end ed D ec emb er 3 1,


2 0 11
2 0 12
3.239
1.543
2.388
1.723
2.147
1.961
1.776
1.462
1.688
1.097
1.645
1.004
1.600
1.185
1.038
558
979
864
509
310
461
349
409
273
262
161
71
60
44
39
18 . 2 5 6
12 . 5 8 9

The main components of service costs are described below.


Cost of sales includes costs associated with sales and promotions, it includes the costs incurred
for promotional initiatives at points of sale, costs incurred to obtain privileged spaces within
points of sale and commissions paid to distributors for identifying commercial opportunities in
the B2B channel.
Sales transportation costs include the costs incurred to transport products from centralized
hubs (Italy and China) to distributors.
Consulting fees primarily relate to the reorganization of the logistics network, the reorganization
of the product development department, ecommerce development projects and ITrelated
services. Also included are costs arising from tax advisory, personnel management (personnel
search and reorganization of company functions) and other administrative consulting services.
Processing costs primarily relate to the costs incurred to personalize products on behalf of
customers from the B2B sales channel.
Storage costs include the costs of storing merchandise in centralized hubs (Italy and China).
Marketing and communication expenses relate to marketing and brandrelated costs aimed at
increasing brand awareness through press releases, event sponsorship and participation in fairs.
The item also includes consulting costs incurred for website development.
Costs for general services include legal and advice costs incurred to defend the Moleskine
brand, audit expenses, insurance and miscellaneous overheads.
Notes to the consolidated financial statement 2012

Pagina 40

Moleskine Group

7.5 Personnel costs


The following table sets forth a breakdown of Personnel costs for the years ended December
31, 2012 and 2011:
In thousands of Euro
Year en d ed D ec emb er 3 1,
2 0 12
2 0 11
7.069
4.831
1.998
1.594
205
148
392
412
135
522
7.507
9.799

P er s o n n el c o s ts
Salaries and wages
Social security contributions
Post employment employee benefits
Board of Directors remuneration
Other personnel costs
T o tal p er s o n n el c o s ts

The following table sets forth a breakdown of the average number and periodend number of
employees and collaborators by category as of and for the years ended December 31, 2012 and
2011:
Year end ed D ec emb er 3 1,

U ni ts
Directors
Executive
Managers
White collar workers
Collaborators
To tal empl o yees and c o l l ab o r ato r s

2 0 12
year
aver ag e
end

2 0 11
year
aver ag e
end

4
14
17
84
6

4
14
18
94
7

5
11
15
66
3

4
14
16
74
5

12 5

13 7

10 0

113

Please note that this table includes a line item for Directors. They are not employees of the Company, while the related cost is
accounted for as personnel cost.

Management incentive plan


On November 22, 2012, the Board of Directors approved a plan to distribute a bonus, in cash
and in shares in the event that the Companys shares are listed on the MTA, or in cash if
Moleskine shares are not listed, in the event of a change of control of the Company or, at any
rate, as of December 31, 2018. The plan is reserved for certain managers of the Company
performing strategically important roles or functions that justify a loyalty incentive plan (the
Plan
Plan).
Plan
On the next day, i.e. November 23, 2012, the beneficiaries of the Plan signed a formal
agreement.
The Plan Regulations are as follows:
1) Duration: January 1, 2013 December 31, 2018.

Notes to the consolidated financial statement 2012

Pagina 41

Moleskine Group

2) Date of adoption: date of resolution of the Board of Directors approving the Plan
(November 22, 2012).
3) Award of the bonus: the award of the bonus to each beneficiary approved by the Board of
Directors subject to verification that the conditions of the Plan have been fulfilled.
4) Purpose of the Plan: the purpose of the Plan is to award bonuses to beneficiaries on
condition that a beneficiary is employed by Moleskine throughout the duration of the
Plan, except for the termination assumptions indicated below, in accordance with
different terms and conditions upon the occurrence of one of the following events:
i)

The Companys shares are listed: in this event each of the beneficiaries will be
entitled to:
a) First tranche: a cash bonus determined on the basis of the Companys value,
calculated based on the offering price of Moleskine shares in the IPO multiplied
by the total number of shares, which shall change depending on the year in which
the listing occurs;
b) Second tranche: shares in the Company in a number that shall be determined
on the basis of the Companys value 12 months from the date Moleskine shares
start to be traded. The shares awarded in the second tranche will have a lockup
period of 6 months for 50% and 12 months for the remaining 50%. The shares
will be issued as part of a capital increase reserved for the beneficiaries of the
Plan;

ii)

Change of Control: in this event each beneficiary will be entitled to a cash bonus
determined on the basis of the Companys value, calculated based on the transfer
price of each Moleskine share multiplied by the total number of shares;

iii)

Plan expiry: if on expiry of the Plan, i.e. as of December 31, 2018, the Companys
shares have not been listed and there has been no change of control, each
beneficiary will be entitled to a cash bonus determined on the basis of the
Companys value calculated as follows: 7.9 times EBITDA as of December 31,
2018 less the net financial position at the same date. The components of EBITDA
and net financial position are specified in the Plan Regulations.

5) Employment termination assumptions: the Plan provides the following: a) If the


Companys shares are listed, should employment terminate for any reason (other than
death or disability), the beneficiary shall forfeit all rights to the award and disbursement
of the bonus, both in cash and in shares, that have not yet vested; b) If a change of
control occurs and the Plan expires, should employment be terminated for cause before
the date of transfer of control or expiry of the Plan, the beneficiary shall forfeit all rights.

Notes to the consolidated financial statement 2012

Pagina 42

Moleskine Group

In contrast, should employment be terminated for reasons other than those set out
above (dismissal without cause, resignation for cause, death or disability, etc.) the
Company shall pay the beneficiary a bonus for the amount vesting until the date
employment terminates, determined in accordance with the matrix indicated above, and
calculated applying to the bonus as per the matrix a reduction coefficient specified in the
Plan Regulations.
Based on the applicable financial reporting standard, the fair value of the Plan, determined also
with the support of an independent expert, was recognised in the Groups income statement for
the year 2012, for the portion vesting in the year, assuming as vesting event the listing of
Moleskine shares on the MTA in the year 2013. In detail, the portion of personnel costs referred
to cash disbursements was reported by recording a payable to personnel under Other current
liabilities, while the portion of personnel costs referred to the award of Moleskine shares was
recorded against equity.
In addition to the cost of the Plan as illustrated above, personnel costs of the year 2012 include
also the cost of a bonus plan reserved for certain mangers of the Company in previous years,
which was measured also with the support of an independent expert. Also with reference to this
plan, which shall be settled solely in cash, payment has been determined assuming as vesting
event the listing of Moleskine shares on the MTA in the year 2013.
The total fair value of the bonus plans has been estimated as Euro 2,417 thousand (including
the related social charges), whereof Euro 564 thousand is reported on the income statement for
the year 2012.
7.6 Other operating expenses
The following table sets forth a breakdown of Other operating expenses for the years ended
December 31, 2012 and 2011:
In thousands of Euro
Oth er o per ati ng exp ens es
Gifts and donations
Charitable donations
Accruals to provision for risk and charges
Other miscellaneous operating expenses
Impairments of receivables
To tal o th er o per ati ng expens es

Year ended D ecemb er 3 1,


2 0 12
2 0 11
451
163
150
132
20

333
168

9 16

1. 0 3 4

374
159

Gifts and donations relate to products distributed by the Group for promotional and marketing
purposes.
Charitable donations relate primarily to donations to Fondazione ONLUS Lettera 27.

Notes to the consolidated financial statement 2012

Pagina 43

Moleskine Group

See Note 6.13 "Provisions for risks and charges current and noncurrent" for information on the
accruals during the period.
7.7 Depreciation, amortization and impairment
The following table sets forth a breakdown of Depreciation, amortization and impairment for
the years ended December 31, 2012 and 2011:
In thousands of Euro
D epr ec i ati o n, amo rti zati on and i mpai r ments

Year ended D ecemb er 3 1,


2 0 12
2 0 11

Amortization of intangible assets

433

395

Depreciation of property, plant and equipment

520

415

Impairment losses of property, plant and equipment

T otal deprec i ati o n, amor ti zati o n and i mpai r ments

13

953

823

The movements in depreciation and amortization during the period reflects the process of
depreciating property, plant and equipment and amortizing intangible assets according to their
estimated useful lives.
7.8 Finance income/(expense)
The following table sets forth a breakdown of Finance income and Finance expense for the
years ended 31 December, 2012 and 2011:
In thousands of Euro
F i nan c e i n c o me/ (expen s e)
Bank interest income and other finance income
Foreign exchange gains
Interest income on derivatives
T o tal fi nanc e i nc o me

Year en d ed D ec emb er 3 1,
2 0 12
2 0 11
33

33
(2.927)

22
178
196
396

Interest expenses on bank loans


Financial charges on loans from shareholders' discount
Foreign exchange losses
Interest expenses on derivatives
Other finance cost
T o tal fi nanc e exp ens e

(83)
(256)
(108)
(3 . 3 7 4 )

(3.777)
(2.657)

(155)
(141)
(6 . 7 3 0 )

T o tal fi nanc e i nc o me/ ( expen s e)

( 3 . 3 4 1)

(6 . 3 3 4 )

In 2011, discounting of shareholders loan related to the implicit interest generated by the
discounting of the longterm interestfree loan with Appunti. This loan was fully extinguished
during 2011, through the advance partial repayment (May 18, 2011) of Euro 6,000 thousand and
through the conversion of a nondistributable equity reserve on December 12, 2011 for the
residual loan at such date.

Notes to the consolidated financial statement 2012

Pagina 44

Moleskine Group

Foreign exchange gains and losses, included within finance income and finance expense, refer
solely to exchange differences realized on transactions of a financial nature, which have been
realized in the relevant period.

7.9 Income tax expense


The following table sets forth a breakdown of Income tax expense for the years ended
December 31, 2012 and 2011:
In thousands of Euro
Year ended D ec emb er 3 1,
2 0 12
2 0 11

Inco me tax expens e


Current tax
Deferred income tax
To tal i nco me tax expens e

9.054
(173)
8.881

8.429
(965)
7.464

The following table provides a reconciliation of the theoretical tax expense to actual tax expense:
In thousands of Euro
D es cr i pti on

Pr o fi t b efor e i n come tax exp ens e


Theoretical taxes
IRAP
Other
A ctu al tax exp ens e

Year end ed D ec emb er 3 1,


2 0 12
2 0 11
27 .07 8
7.446
1.374
61

27,5%
5,1%
0,2%

2 1. 2 8 4
5.853
1.263
348

27,5%
5,9%
1,6%

8.8 81

3 2,8 %

7.4 64

3 5 , 1%

7.10 Earnings per share


At the general meeting of September 6, 2012 the decision was taken to transform the Company
from a limitedliability company to a jointstock company. As a result of the transformation, the
Companys capital was divided into 200,000,000 shares.
Earnings per share has been calculated by dividing net profit by the number of ordinary shares
issued in accordance with the resolution by the general meeting.
There were no significant potential dilutive instruments in issue, accordingly there were no
dilution effects and diluted earnings per share coincides with basic earnings per share.
8. Related
Relatedparty transactions
During 2012, the Group undertook transactions with related parties which mainly related to:

fees paid to Mr. Bosello, board chairman of Moleskine, for tax advisory services;

Notes to the consolidated financial statement 2012

Pagina 45

Moleskine Group

charitable donations made to Fondazione ONLUS Lettera 27 (Francesco Franceschi,


director of Moleskine, is the organizations chairman);

The following tables set forth an analysis of the financial position, profit and loss impact and
cash flow balances associated with the Groups transactions with related parties for the years
ended December 31, 2012 and 2011 .
In thousands of Euro
A s o f and fo r th e year en ded D ecemb er 3 1, 2 0 12
T r ade payab l es
Oth er c ur r en t
Oper ati ng c o s ts
Net fi n anc e
l i ab i l i ti es
i nc o me/ ( expens e)

(29)

(150)
5

(5)

31

(46)

424
(1.906)

Syntegra Capital Investors Limited


Fondazione ONLUS Lettera 27
Index Ventures
Studio Bosello & Associati
Board of Directors and key management
T o tal r el ated par ty tr ans ac ti o ns

36
15.767
0,2%

Total of statement of financial position line item


% o f s tatemen t o f fi n anc i al p o s i ti o n l i ne i tem

424
3.124
13 , 6 %

(2 . 10 7 )
(47.920)
4,4%

(2 9 )
(3.341)
0 ,9 %

In thousands of Euro
A s o f and fo r th e year en ded D ecemb er 3 1, 2 0 11
T r ade payab l es
Oth er c ur r en t
Oper ati ng c o s ts
Net fi n anc e
l i ab i l i ti es
i nc o me/ ( expens e)

(36)

(2.657)

(150)

14

(31)

1
(1.647)
14
1
(1. 8 2 8 )
(2.693 )
9.749
2.080
(39.981)
(6.334)

Syntegra Capital Investors Limited


Appunti S..r.l.
Fondazione ONLUS Lettera 27
Studio Bosello & Associati
Board of Directors and key management
T o tal r el ated par ty tr ans ac ti o ns
Total of statement of financial position line item
% o f s tatemen t o f fi n anc i al p o s i ti o n l i ne i tem

In thousands of Euro

0 , 1%

S h ar eh o l d er s
tr an sac ti o n s

Cash flow from operating activities


Cash flow used in investing activities
Cash flow used in financing activities

In thousands of Euro
Cash flow from operating activities
Cash flow used in investing activities
Cash flow used in financing activities

S h ar eh o l d er s
tr an sac ti o n s

(6.000)

0,0%

4,6%

42 ,5 %

Year en ded D ec emb er 3 1, 2 0 12


Oth er r el ated
T o tal r el ated
p ar ti es
p ar ty
T o tal c as h fl o w
tr an s acti o n s
tr an s ac ti o n s
34

34

19.034
(3.145)
(11.625)

Year end ed D ec emb er 3 1, 2 0 11


Oth er r el ated
T o tal r el ated
p ar ti es
p ar ty
T o tal c as h fl o w
tr an s acti o n s
tr an s ac ti o n s
(440)

(440)

(6.000)

17.057
(1.540)
(14.091)

0,2%
0,0%
0,0%

2,6%
0,0%
42,6%

The related party transactions discussed above were conducted on normal commercial terms
and conditions.

Notes to the consolidated financial statement 2012

Pagina 46

Moleskine Group

8.1 Directors and key executives compensation


The total amount of compensation paid to the Companys Board of Directors for the year ended
December 31, 2012 was Euro 392 thousand (Euro 412 thousand for the year ended December
31, 2011).
The total amount of compensation paid to key executives amounted to Euro 1,070 thousand for
the year ended December 31, 2012. Additionally, during 2012 costs amounting to Euro 444
thousand were recorded in relation to the incentive and retention system for certain key
executives see Note 7.5, Management incentive plan.

9. Board of Statutory Auditors compensation


Compensation paid to the Companys Board of Statutory Auditors for the year ended December
31, 2012 was Euro 23 thousand (Euro 17 thousand for the year ended December 31, 2011).
10. External auditors fees
Fees for the statutory audit of the Groups financial statements paid to the auditing firm
PricewaterhouseCoopers S.p.A. for the years ended December 31, 2012 and 2011 are presented
in the following table:

In thousands of Euro
F ees pai d to exter n al au d i to r
Statutory audit of the annual financial statements (*)
Attestation services

Year end ed D ec emb er 3 1,


2 0 12
2 0 11
97

30

295

Other services fees

126

91

T o tal fees p ai d to exter nal aud i to r

5 18

12 1

(*) include audit fees of the Groups consolidated financial statements prepared for inclusion in the registration document.

Attestation services includes fees for audit services for the purposes of the issuance of
attestations required by the IPO process. Other service fees for the year ended December 31,
2012 include fees for certification of the covenants for the financial statements as well as fees
related to assistance under Law 262 and Legislative Decree 231.
Fees for the year ended December 31, 2011 include costs for the agreed upon procedures for
calculating covenants as of June 30, 2011, activities related to the 2010 VAT return and the
review of the 20112017 financial plan prepared as part of the merger procedure in accordance
with Article 2501bis of the Italian Civil Code, as cited above.

Notes to the consolidated financial statement 2012

Pagina 47

Moleskine Group

11. Commitments and guarantees


Lease commitments
As of December 31, 2012, the Group had outstanding commitments in connection with lease
agreements totaling Euro 1,218 thousand relating to the property located at Viale Stelvio 66 in
Milan, Italy, the property located at 210 Eleventh Avenue in New York, the property located at
The Centrium, 60 Wyndham Street, Central, Hong Kong, 32/F and the property located at
Xiangyang Road South, Suite 1406 Xuhui District in Shanghai.
Additionally, during 2012 Moleskine America amended its rental agreement, extending the
duration from February 28, 2012 to June 30, 2017 and increasing the rental space.
The following sets forth a breakdown of the minimum payments under agreements to which the
Group is a party as of December 31, 2012:
In thousands of Euro
< 1 year
1 5 years
> 5 years
T otal e

A s of D ecemeb er 3 1, 2 0 12
438
780

1. 2 18

Guarantees
As of December 31, 2012, the Company had an outstanding guarantee granted to a lessee on
behalf of the subsidiary Moleskine America in connection with future lease payments amounting
to Euro 836 thousand (Euro 228 thousand as of December 31, 2011).
Additionally, the Company has provided a bank guarantee to Societ per Azioni Esercizi
Aeroportuali S.E.A. S.p.A. and Aeroporti di Roma S.p.A, in relation to the subconcessions of
sales points at Milan Linate and Rome Fiumicino airports, respectively for amounts of Euro 80
thousand and Euro 67 thousand which are valid for the duration of the conventions..
12. Contingent liabilities
Other than the tax dispute described in Note 6.13, Provisions for risks and charges (current
and noncurrent), there were no ongoing legal or tax proceedings involving any Group
company.
13. Transactions arising from atypical and/or unusual dealings
During 2012 no atypical and/or unusual transactions, as defined by CONSOB Communication
of July 28, 2006, were undertaken.

Notes to the consolidated financial statement 2012

Pagina 48

Moleskine Group

14. Material non


nonrecurring events and transactions
In accordance with the CONSOB Communication of July 28, 2006, it should be noted the
Groups results for the year ended December 31, 2011 were influenced by the following non
recurring expenses.
During 2011, nonrecurring finance expenses totaling Euro 2,657 thousand were recognized as
follows:

Euro 1,064 thousand relates to the expense arising on the advance partial repayment of
Euro 6,000 thousand on May 18, 2011 of the loan with Appunti. The expense represents
the implicit interest accrued from January 1, 2011 to the date of the advance partial
repayment, as well as the expenses related to the early repayment.; and

Euro 1,593 thousand refers to the expense associated with the debt of Euro 51,080
thousand which was converted into a nondistributable equity reserve on December 12,
2011. The expense represents the implicit interest accrued from January 1, 2011 until the
date of the conversion.

See Notes 6.10, Current and Non Current Financial Liabilities and Note 7.8 Finance
income/(expense) for further details.
There were no material nonrecurring events or transactions to be reported with respect to the
year 2012.
15. Material events after the reporting period
From January 2013, the Group transferred the invoicing activities for the American market to
Moleskine America Inc., to allow more effective management of commercial and logistical
activities for this market, through a greater proximity to local distributors and retailers to ensure
also best response time to support their needs as a result of increasing volumes and expansion
of the new direct sales channels, online and retail. Until December 31, 2012 this entity was
actively involved in the development and promotion of the American B2C business.
In relation to the Retail business line, the most significant events were:, a) expansion of the
existing store in Xintiandi Mall, Shangai and b) opening of a monobrand store in Linate airport
and the signing of an agreement for space in Terminal 4 of London Heathrow airport, initially on
a temporary basis, based on the wider scale project of the Company related to expansion in the
main train stations and airports in Italy and abroad.
On January 7, 2013 Borsa Italiana S.p.A. approved the application to listing of the shares of
Moleskine S.p.A. on the Mercato Telematico Azionario, and on January 9, 2013 CONSOB
approved the registration document in accordance with article 8 of the Issuers Regulations
Regolamento Emittenti).

Notes to the consolidated financial statement 2012

Pagina 49

Moleskine Group

On February 15, 2013 and amendment to the Facility Agreement was signed. See Note 6.10
NonCurrent Financial Liabilities for further information.
16. Management of financial risks
The main business risks identified, monitored and, to the extent specified below, actively
managed by the Group are as follows:

market risk arising from the fluctuation of interest rates, commodity prices and exchange
rates between the Euro and the other currencies in which the Group deals;

credit risk arising from a possible default by a counterparty; and

liquidity risk arising from the absence of financial resources needed to meet financial
obligations.

The following section provides qualitative and quantitative indications concerning the
uncertainty of such risks.
16.1 Market risk
Foreign exchange risk
The exposure to the risk of fluctuations in exchange rates arises from the Groups trading
activities, which may be conducted in currencies other than the Euro (primarily the U.S. dollar).
Revenues and costs denominated in a foreign currency may be influenced by fluctuations in the
exchange rate, resulting in an impact on margins (economic risk), just as trade and financial
payables and receivables denominated in a foreign currency may be affected by the translation
rates used, impacting the statement of comprehensive income (transaction risk). Exchange rate
fluctuations are also reflected in consolidated net profit and equity, given that the financial
statements of the two subsidiaries are prepared in a currency other than the Euro and then
translated (translation risk).
The main exchange rates to which the Group is exposed are:

EUR/USD, in relation to sales and purchases in USD on the U.S. and Asian markets;
and

EUR/GBP, in relation to sales in GBP on the UK market.

During 2012, the total amount of operating costs exposed to exchange rate risk amounted to
approximately onethird of total costs. During 2012, the total amount of revenues exposed to
exchange rate risk was equivalent to 43.8% of sales (35.6% in 2011).
The Group pursues a strategy that calls for purchases and sales in the same currency, which in
managements judgment mitigates the risk arising from fluctuations in exchange rates.

Notes to the consolidated financial statement 2012

Pagina 50

Moleskine Group

Therefore, the Group does not adopt specific policies to hedge against exchange risk associated
with its commercial activities, other than the monitoring of the foreigncurrency price list. In
addition, in distribution contracts where sales price lists are set in a currency other than the
Euro, the Company has established hedging clauses that provide for the financial effects of
fluctuations in exchange rates beyond certain thresholds to be charged back to the customer.

Sensitivity analysis relating to exchange rate risk


For the purposes of the sensitivity analysis relating to exchange rate risk, the items of the
statement of financial position (financial assets and financial liabilities) denominated in a
currency other than each Group companys functional currency were identified. In assessing the
potential effects of fluctuations in exchange rates, intragroup payables and receivables in a
currency other than the accounting currency were also taken into consideration.
For the purposes of the analysis, an appreciation of 10% and a depreciation of 10% in the
exchange rate between the currency in which the line item is denominated and the accounting
currency were considered.
The following table presents the results of the analysis conducted:
In thousands of Euro
S ens i ti v i ty anal i s ys
USD
10%
Year 2012
Year 2011

125
70

+10%
(102)
(57)

E f f e c t o n n e t p r o f i t an d o n eq u i ty, c o n s i d e r i n g tax ef f ec t
GBP
HKD
Other currencies
10%
+10%
10%
+10%
10%
+10%
57
54

(46)
(44)

116
21

(94)
(17)

(4)

T o tal
10%
3

294
14 5

+10%
(2 3 9 )
( 118 )

Note: Positive figures reflect a gain in net profit and an increase in equity, whereas the negative figures reflect a loss in net profit
and a decrease in equity.

Interest rate risk


The Group is exposed to interest rate risk as it is externally financed through debt and invests its
cash on hand in bank deposits. Changes in market interest rates influence the cost and return of
the various forms of borrowing and investing and therefore the Groups finance income and
finance expense. The Group regularly assesses its exposure to the risk of changes in interest
rates and partially manages such risk through the use of interest rate derivative financial
instruments, namely interest rate swaps (IRSs), used for hedging purposes only. The Group
adopt hedge accounting to record the related hedging financial instruments as the requirements
for so doing had been satisfied.
The interest rate to which the Group is most exposed is the Euribor.
The following table sets forth a breakdown of gross financial indebtedness as of the reporting
dates, indicating the portion subject to hedging through derivative contracts and the type of
interest rate applicable.

Notes to the consolidated financial statement 2012

Pagina 51

Moleskine Group

In thousands of Euro
A s o f D ec emb er 3 1,
G r o s s fi nan ci al i n deb ted nes s

2 0 12
Without
With
derivative derivatives*

% with
derivative

Total

2 0 11
Without
With
derivatives derivatives*
Total

% with
derivatives

variable rate loans

24.976

26.328

51.304

51%

30.100

30.109

60.209

50%

T o tal g r o s s fi nan c i al i n d eb ted nes s


* Amortised cost effects not considered

24.976

2 6 .32 8

5 1. 3 0 4

5 1%

3 0 . 10 0

30.109

6 0 .20 9

50%

A breakdown of the financial liabilities is presented in Note 6.10, Current and Non Current
Financial Liabilities.

Sensitivity analysis relating to interest rate risk


The Groups exposure to interest rate risk has been analyzed through a sensitivity analysis of the
finance costs and income related to current and noncurrent financial liabilities and bank
deposits. The following is a brief description of the method used for that analysis, along with the
results achieved.
The analysis considered the effects on the Groups profit net profit and equity for the years 2012
and 2011 of a hypothetical increase in decrease in rates of 50 bps. The calculations applied the
hypothetical change to the interest rates on the average annual balance of the Groups bank
deposits and the periodend balances of gross financial indebtedness, the interest rates on
floatingrate liabilities and the interest rate used to discount interestfree loans.
For the year ended December 31, 2012 indebtedness hedged by derivative contracts were not
included within the balances analyzed as part of the sensitivity analysis.
The following table presents the results of the analysis conducted:
In thousands of Euro
S en s i ti v i ty an al i s ys

Year 2012
Year 2011

E ffec t o n n et p r o f i t c o n s i d er i n g tax
effec t
50 bps
+50 bps
232
118

(232)
(118)

E ffec t o n eq u i ty, c o n s i d er i n g tax


effec t
50 bps
+50 bps
232
118

(232)
(118)

Note: Positive figures reflect a gain in net profit and an increase in equity, whereas the negative figures reflect a loss in net profit
and a decrease in equity.

Price risk
The Group is exposed to price risk from fluctuations of commodity prices, mainly arising from
the presence of a limited number of suppliers of goods and the need to guarantee procurement
volumes and avoid jeopardizing inventory stocks and comprising delivery times. The Groups
actions to contain price risk include promoting the development of the network of suppliers,
with the objective of not only allowing consistent access to the best pricing conditions to
strengthen margins, but also diminishing the degree of dependence on specific geographical

Notes to the consolidated financial statement 2012

Pagina 52

Moleskine Group

areas, China in particular, by seeking production partners in new countries such as Vietnam and
South Korea.
In addition the Group further limits price risk through its procurement policy, which calls for the
annual negotiation of purchase price lists with suppliers, and ensures that prices are
contractually fixed for a period of at least 12 months and therefore are not affected by
fluctuations relating to changes in commodity prices, which are borne entirely by the supplier.
Therefore management deems the overall exposure to price risk as remote.
16.2 Credit risk
The Group is exposed to Credit risk from potential losses arising from the nonfulfillment of
obligations assumed by trade and financial counterparties.
The total exposure to credit risk as of December 31, 2012 and 2011 is represented by the sum of
financial assets, broken down by due dates as follows:
In thousands of Euro
A s o f D e c e mb er 3 1, 2 0 12

No t
o v er d u e

Ov er d u e d ays
0 3 0

6 1 9 0

T o tal
9 1 3 6 5

Ov e r 3 6 5

289

289

11.176

3.183

425

1.118

480

11

16.393

Other non current assets


Trade receivables

3 16 0

(64)

(8)

(72)

Other current assets

1.836

1.836

Advances received

(451)

(451)

12 . 8 5 0

3 . 18 3

425

1. 118

4 16

17 . 9 9 5

Provision for doubtful receivables

T o tal e e xp o s u r e to c r e d i t r i s k

In thousands of Euro
A s o f D ec e mb e r 3 1, 2 0 11

No t
o v er d u e

Ov er d u e d ays
0 3 0

3 16 0

6 1 9 0

T o tal
9 1 3 6 5

Ov e r 3 6 5

188

188

7.577

4.323

289

82

57

39

12.367

Provision for doubtful receivables

(74)

(22)

(38)

(39)

(173)

Other current assets

226

226

(562)

(562)

7.355

4.301

289

82

19

12 . 0 4 6

Other non current assets


Trade receivables

Advances received
T o tal e e xp o s u r e to c r e d i t r i s k

Current and noncurrent assets include tax receivables, advance payments to suppliers, advance
payments of insurance and security deposits. On the whole, they present a low level of credit
risk.
The risk of insolvency associated with trade receivables is monitored centrally by the Groups
administrative department, which reviews the Groups credit exposure, monitors the collection
of trade receivables and determines whether to accept new customers by conducting qualitative
and quantitative analyses of creditworthiness, performed partly by using databases specialized
in providing corporate rating services. The Groups credit risk policy is differentiated by sales
channel, i.e. B2B or B2C.

Notes to the consolidated financial statement 2012

Pagina 53

Moleskine Group

The Groups credit risk policy is differentiated by sales channel, i.e. B2B or B2C. The Group
monitors the risk associated with receivables arising from the B2C channel, which accounted for
89% of total receivables as of December 31, 2012, 85% of total receivables as of December 31,
2011, by obtaining letters of credit or bank guarantees, as well as insuring receivables with a
leading insurance company. Total insured receivables amounted to Euro 3,857 thousand as of
December 31, 2012 (Euro 3,660 thousand as of December 31, 2011), whereas receivables
secured by guarantees and letters of credit amounted to Euro 4,583 thousand as of December
31, 2011 (Euro 4,855 thousand as of December 31, 2011).
The risk associated with the B2B channel is also limited as the Groups policy generally calls for
advance payment and grants payment deferrals only if insurance guarantees have been
obtained.
The following table sets forth details of the trade receivables which are overdue as of December
31, 2012 and 2011 and the percentage of such receivables included in the provision for doubtful
receivables.
In thousands of Euro
A s o f D ec emb er 3 1
2 0 11
2 0 12
Total overdue trade receivables
Provision for doubtful overdue trade receivables
% coverage of overdue receivables by the provision for doubtful overdue receivables

5.217
72
1,4%

4.790
99
2,1%

As of December 31, 2012 overdue trade receivables amounted to Euro 5,217 thousand, of which
Euro 3,608 related to receivables which were overdue by less than 60 days. At the date of
preparation of the Consolidated Financial Statements, 46% of the receivables which as of
December 31, 2012 were overdue be less than 60 days have been settled.
The following table sets forth details regarding the gross doubtful receivables in absolute value
and as a percentage of total trade receivables as well as details regarding the percentage of such
doubtful receivables covered by the provision for doubtful receivables
In thousands of Euro
A s o f D ec emb er , 3 1
2 0 12
2 0 11
Total gross trade receivables
Trade receivables for which recoverability is doubtful
% of trade receivables for which recoverability is doubtful over total gross trade receivables
Provision for doubtful receivables
% coverage of trade receivables for which recoverability is doubtful by provision for doutbtful receivables

16.393
162
1,0%
(72)
44,4%

12.367
361
2,9%
(173)
47,9%

As of December 31, 2012 trade receivables included an amount of Euro 44 thousand which was
under dispute. This amount relates to a receivable from a supplier relating to the recharge of
penalties for late delivery of goods.
The following table sets forth information regarding insured and secured trade receivables.

Notes to the consolidated financial statement 2012

Pagina 54

Moleskine Group

In thousands of Euro
A s o f D ec emb er , 3 1
2 0 12
2 0 11
Total gross trade receivables
% of trade receivables which are insured or secured
Total overdue trade receivables
% of trade receivables which are insured or secured over the total overdue receivables
Trace receivables for which recoverability is doubtful
% of trade receivables which are insured or secured over the trade receivables for which recoverability
is doubtful

16.393
51%
5.217
26%
162

12.367
68%
4.790
74%
361

17%

19%

The following table presents the concentration of trade receivables as of December 31, 2012 and
2011:
Concentration of receivables
A s of D ecemb er , 3 1
2 0 12
2 0 11
Concentration of the largest customer over the total trade receivables
Concentration of the largest five customers over the total trade receivables
Concentration of the largest ten customers over the total trade receivables
Concentration of the largest twenty customers over the total trade receivables

21%
60%
74%
85%

28%
60%
75%
87%

The following table sets forth the percentage of overdue receivables represented by the top five
customers as of December 31, 2012 and 2011:
Concentration of receivables
A s o f D ec emb er , 3 1
Overdue trade receivables relating to
trade receivable balance
Overdue trade receivables relating to
customers trade receivable balance
Overdue trade receivables relating to
customers trade receivable balance
Overdue trade receivables relating to
customers trade receivable balance
Overdue trade receivables relating to
customers trade receivable balance

2 0 12

2 0 11

0%

39%

78%

67%

67%

8%

3%

42%

0%

0%

the largest customer as a percentage of the customers


the second largest customer as a percentage of the
the third largest customer as a percentage of the
the fourth largest customer as a percentage of the
the fifth largest customer as a percentage of the

The Group has a significant concentration of credit risk from a single customer, from which it
held a receivable of Euro 3,386 thousand as of December 31, 2012 and Euro 3,468 thousand as
of December 31, 2011, or 21% and 28% of total trade receivables as of the respective dates. The
credit position towards that customer was secured in its entirety by letters of credit.
As shown in the above table, receivables are presented net of the associated provision for
doubtful receivables, calculated based on an analysis of positions for which conditions for
recoverability have presented themselves. Impaired receivables amounted to Euro 72 thousand
as of December 31, 2012 and Euro 173 thousand as of December 31, 2011. Overdue receivables
Notes to the consolidated financial statement 2012

Pagina 55

Moleskine Group

which have not been impaired as there is no evidence that they will not be collected amounted
to Euro 5,145 thousand as of December 31, 2012 and Euro 4,691 thousand as of December 31,
2011.
When investing temporary liquidity surpluses, the Group deals only with counterparties of high
creditworthiness.
16.3 Liquidity risk
Liquidity risk is associated with the Groups ability to meet its obligations. Prudent management
of liquidity risk arising from normal operations entails maintaining an adequate level of cash on
hand, shortterm securities and access to funds available through lines of credit.
Liquidity risk is managed at the central level based on guidelines established by the Groups
finance department and approved by the chief executive officer. The finance department
periodically monitors the Groups financial position by preparing reports of forecasted and
actual cash inflows and outflows. The Group aims to ensure that its needs are adequately
covered by thoroughly monitoring loans, open lines of credit and uses of such lines of credit in
order to optimize its resources and manage any temporary liquidity surpluses.
The Groups goal is to implement a financial structure that ensures a level of liquidity in
accordance with business objectives, minimizing opportunity costs, and strikes a balance in
terms of the duration and composition of debt.
The following table breaks down financial liabilities (including trade payables and other current
liabilities). All balances presented are undiscounted nominal future cash flows determined
according to residual contractual maturities of both principal and interest. Loans are presented
based on the contractual maturity date on which repayment is due. Please note that this table do
not include any possible partial early repayments of Facility Agreement included in the
amendment signed on February 15, 2013 in relation to listing of the shares of the Company
(refer to what is described in note 6.10 " Current and Non Current Financial Liabilities").

Notes to the consolidated financial statement 2012

Pagina 56

Moleskine Group

In thousands of Euro
Due
D ec emb er 3 1, 2 0 12

< 1 year

2 5 year s

> 5 year s

Noncurrent financial liabilities


Derivative financial instruments
Current financial liabilities
Trade payables
Other current liabilities

12.106
15.767
3.124

45.262
887

T o tal fi n an c i al l i ab i l i ti es

30.997

4 6 . 14 9

T o tal

4 5 .2 6 2
887
12 . 10 6
15 . 7 6 7
3 . 12 4

7 7 . 14 6

In thousands of Euro
Due
D ec emb er 3 1, 2 0 11

< 1 year

2 5 year s

> 5 year s

T o tal

Noncurrent financial liabilities


Derivative financial instruments
Current financial liabilities
Trade payables
Other current liabilities

11.788
9.749
2.080

36.960
754

22.659

T o tal fi n an c i al l i ab i l i ti es

2 3 . 6 17

3 7 . 7 14

2 2 .6 5 9

5 9 . 6 19
754
11. 7 8 8
9.749
2.080
83.990

The following table presents trade payables as of December 31, 2012 and 2011 divided by
maturity:
In thousands of Euro
Not over due
0 30

31 60

A s of December 3 1, 2 0 12
D ue
61 90
90 365

Over 3 6 5

Total
over due

Total

Trade payable

10.037

4.572

708

396

37

17

5.730

15.767

Total

10 .0 3 7

4.572

708

396

37

17

5.730

15 .7 6 7

In thousands of Euro
Not over due
0 30

31 60

A s of December 3 1, 2 0 11
D ue
61 90
90 365

Over 3 6 5

Total
over due

Total

Trade payable

7.582

1.884

114

47

40

82

2.167

9.749

Total

7 .5 8 2

1. 8 8 4

114

47

40

82

2 . 16 7

9 .7 4 9

The following table sets forth overdue payables in absolute value and as a percentage of total
trade payables as of December 31, 2012 and 2011:
In thousands of Euro
A s of D ec emb er 3 1,
2 0 12
2 0 11
Total trade payables

15.767

9.749

Overdue trade payables

5.730

2.167

% of overdue trade payables over the total trade payables

36,3%

22,2%

Notes to the consolidated financial statement 2012

Pagina 57

Moleskine Group

As of December 31, 2012 we do not have any legal disputes with suppliers, claims against us or
suspension of orders with suppliers. Therefore, we do not consider a high risk profile in this
regard.
The table below shows the concentration of trade payables as of December 31, 2012 and 2011:
Concentration of trade payables
A s o f D ec emb e r ,
2 0 12
Percentage
payables
Percentage
payables
Percentage
payables
Percentage
payables

31
2 0 11

of trade payables relating to the largest supplier over total trade


11%

15%

34%

45%

48%

59%

64%

74%

of trade payables relating to the five largest supplier over total trade
of trade payables relating to the ten largest supplier over total trade
of trade payables relating to the twenty largest supplier over total trade

17. Financial assets and financial liabilities by category


The following table sets forth a breakdown of financial assets and financial liabilities by category
as of December 31, 2011 and 2012:
A s of December 3 1, 2 0 12

In thousands of Euro

Financial
Financial assets and assets and
liabilities measured liabilities
at fair value through fair value
P&L
allocated in
OCI

Other non current assets


Trade receivables
Other current assets
Cash and cash equivalents
Total

Noncurrent financial liabilities


Derivative financial instruments
Trade payables
Income tax payables
Other current liabilities
Current financial liabilities
Total

887

887

Notes to the consolidated financial statement 2012

Loans and
recivables

289
16.321
1.836
7.208
2 5 .6 5 4

Financial assets Financial liabilities


available for sale at amortised cost

Total

289
16.321
1.836
7.208
2 5 .6 5 4

39.895

15.767
466
3.124
9.932
6 9 . 18 4

39.895
887
15.767
466
3.124
9.932
7 0 .0 7 1

Pagina 58

Moleskine Group

A s of December 3 1, 2 0 11

In thousands of Euro

Financial assets and Financial assets


liabilities measured and liabilities fair
at fair value through value allocated in
P&L
OCI

Other non current assets


Trade receivables
Other current assets
Cash and cash equivalents
Total

Noncurrent financial liabilities


Derivative financial instruments
Trade payables
Income tax payables
Other current liabilities
Current financial liabilities
Total

754

754

Loans and
recivables

Financial assets Financial liabilities


available for sale at amortised cost

188
12.194
226
3.001
15 .6 0 9

Total

188
12.194
226
3.001
15 .6 0 9

49.653

9.749
1.945
2.080
8.489
7 1.9 16

49.653
754
9.749
1.945
2.080
8.489
7 2 .6 7 0

As of December 31, 2012, trade receivables and other financial assets, trade payables, other
liabilities and other financial liabilities, classified as current on the statement of financial
position have been recognized at amortized cost. Given that the items concerned refer primarily
to assets underlying trade arrangements set to be settled in the near term, the currying amount
approximates the fair value.
As of December 31, 2012, noncurrent financial liabilities and financial assets were carried at
market rates and therefore the fair values of such liabilities and assets are essentially in line with
their carrying amounts.
18. Information concerning fair value
The following table presents information of the method applied to determine the fair value of
financial instruments designated at fair value. The levels have been defined as follows:

level 1: quoted prices in active markets;

level 2: technical assessments based on observable market information, either directly or


indirectly; and

level 3: not based on observable market data.

The following table presents assets and liabilities designated at fair value as of December 31,
2012 and 2011:

Notes to the consolidated financial statement 2012

Pagina 59

Moleskine Group

In thousands of Euro

A s o f D ec emb er 3 1, 2 0 12
Lev el 1

Derivative financial instruments (IRS)


Embedded derivatives
T o tal

Lev el 2

887
(120)

A s o f D ec emb er 3 1, 2 0 11
Lev el 1

T o tal

767

In thousands of Euro

Derivative financial instruments


Embedded derivatives

Lev el 3

Lev el 2

Lev el 3
754
354

1. 10 8

Milan, 22nd February 2013

For the Board of Directors


The Chairman
Mr. Carlo Bosello

Notes to the consolidated financial statement 2012

Pagina 60