exor-2021-12-31-en

EXOR IN 2021

I want to start this letter with an overview of our performance. In 2021, Exor’s Net Asset Value

per share, or NAV per Share, increased by 29.7% and we outperformed by 0.4 p.p. our

benchmark, the MSCI World Index in Euro. (This year we changed the denomination from US

dollars to Euros to increase our alignment with our balance sheet and listing currency.)

EXOR NAV PER SHARE PERFORMANCE vs. THE MSCI WORLD INDEX (in EUR)

Annual percentage change

Year

1 - Exor NAV per share in EUR

2 - MSCI World Index in EUR

Relative results (1-2)

2009

87.1

37.8

49.3

2010

44.2

17.2

27.0

2011

(23.8)

(4.5)

(19.3)

2012

19.3

11.4

7.9

2013

15.8

18.7

(2.9)

2014

14.5

17.2

(2.7)

2015

20.8

8.3

12.5

2016

13.2

8.5

4.7

2017

37.9

5.5

32.4

2018

(9.5)

(5.9)

(3.6)

2019

37.1

27.5

9.6

2020

3.5

4.6

(1.1)

2021

29.7

29.3

0.4

Compound annual rate

19.8

13.0

6.8

Note: data in 2009 starts from March 1st, the date before Exor's listing on Borsa Italiana (Euronext Milan).

Our performance was mainly driven by the underlying growth in value of our listed companies.

In 2021, CNH Industrial grew by 66.3%, Stellantis by 41.1% and Ferrari by 20.6%. In addition,

we benefited from an adjustment in the valuation of PartnerRe (+13.1% in USD, +20.6% in

Euro) to bring it in line with the agreed sale price.

LETTER TO SHAREHOLDERS

NET ASSET VALUE AT 31 DECEMBER 2021

€ million

31-Dec-2021

31/12/2020

Change vs.

31 December 2020

Amount

Companies

34,314

26,941

7,373

+27.4%

Investments and other assets

1,833

1,210

623

+51.5%

Gross Asset Value (GAV)

36,147

28,151

7,996

+28.4%

Gross Debt

(4,307)

(4,110)

(197)

+4.8%

Other Liabilities

(771)

—

(771)

n.a.

Net Asset Value (NAV)

31,069

24,041

7,028

+29.2%

NAV per Share (EUR)

132.4

102.1

30.3

+29.7%

Companies (95% of GAV)

Our companies are the ones in which we have significant ownership. In each of these, we play

a role within their governance and work with them to support not only their financial

performance but also how they renew themselves, how they create distinctiveness and how

they act in a responsible way. Exor’s purpose is “to build great companies” and we believe this

means constantly raising the bar in all four of these areas.

This year I am going to begin this overview with our largest privately held company, PartnerRe.

In December 2021, we signed a definitive agreement for the sale of PartnerRe to Covéa for a

total cash consideration of $9 billion. As I wrote in our Letter to Shareholders in 2019, we

believe that Covéa will provide a “good home for PartnerRe and its employees” and that having

access to Covéa’s balance sheet will be “competitively advantageous” for the business.

However, as I then noted in my letter of 2020, we also felt that the revised price offered by

Covéa during our initial negotiations “did not properly reflect the company’s true value and its

bright prospects”. In 2021, a new round of discussions with Covéa took place and this enabled

us to reach a revised agreement with a high degree of trust. We are pleased that this

transaction is now going ahead as we continue to believe that it is in the best interests of

PartnerRe, Covéa and Exor.

Given that PartnerRe represented the biggest ever acquisition in Exor’s history, I would like to

share with you how we worked with the Board and its leadership team during our ownership on

its path to becoming a great company.

We acquired PartnerRe in March 2016 after its Board decided not to pursue a merger with a

competitor and accepted a superior cash offer from Exor. At the time, PartnerRe was facing

several challenges.

LETTER TO SHAREHOLDERS

III

These included absorbing an outlier Non-Life underwriting loss following the Tohuku earthquake

in 2011 (which resulted in a downgrade from the rating agencies), owning a sub-scale and

unprofitable Non-Life primary insurance business, and managing a Life & Health reinsurance

business that lacked product diversity and a presence in key markets.

From this starting point, we supported the company to improve its strategy and its operations.

The company downsized its primary insurance business given its lack of scale, infrastructure

and access to distribution. It meanwhile grew its Life & Health reinsurance business organically

as well as through the acquisition of Aurigen, a leading Canadian insurer, which was purchased

at book value in 2017. After being strengthened by these actions, the Life & Health business

provided growing and diversifying profit streams with limited capital consumption. During our

ownership, the value in force of this business more than tripled, growing from $204 million in

December 2015 to $757 million in December 2021. This segment also showed healthy

profitability, reporting $70 million in allocated underwriting profit in 2020 and $97 million in 2021,

despite the increased mortality losses sadly generated in these years by the COVID-19

pandemic.

During our ownership PartnerRe also developed a third-party capital Insurance Linked Solutions

(ILS) business. ILS used capital provided by PartnerRe’s partners – primarily pension funds,

asset managers and other institutional investors – to underwrite a portion of its catastrophe and

specialty business. This ILS business allowed PartnerRe to de-risk its balance sheet,

transforming a highly volatile stream of profits with high capital consumption into a less capital-

intensive asset management income stream. By December 2021, the ILS business had

$1.1 billion of assets under management making it an important player in this attractive market

for reinsurers.

We also worked with PartnerRe on its operations to improve its investment returns, operating

costs, capital structure and Non-Life underwriting profits.

We addressed investment returns by simplifying PartnerRe’s investment activity to focus on

core fixed income products and to use Exor and PartnerRe’s investment capabilities to manage

directly the bulk of its financial assets (the assets not intended to back reinsurance liabilities). As

a result of these actions, PartnerRe was able to earn superior returns and decrease its

sensitivity to interest rates. Total invested assets grew from $16.5 billion in 2016 to $20.5 billion

in 2021 and the company’s investment performance ranked in the top quartile of the industry.

PartnerRe’s operating costs were addressed by streamlining its organisational structure, IT

infrastructure and location footprint. These actions reduced annual operating costs by over

$100 million during our ownership (a greater than 25% reduction). We reinvested a portion of

these savings to build the Life & Health business, growing the number of associates in that area

from 98 to 286. These decisions delivered a significantly improved cost ratio, from 7.2% to

5.7%, which is among the best in the industry.

LETTER TO SHAREHOLDERS

PartnerRe’s capital structure was optimised by changing its mix of Tier 1 and 2 capital,

alongside diversifying its funding market to include European issued debt since this is

significantly cheaper than its USD denominated counterpart. Through these changes, the

company was able to reduce its annual financial run rate costs (interest expenses and preferred

dividends) by $41 million in 2021 compared to 2015. By increasing its European debt, it was

also able to better match its assets to its liabilities.

Despite these successes, we found it initially more difficult to improve the performance of

PartnerRe’s Non-Life business partly because four out of the six years of Exor’s ownership were

characterised by market catastrophe losses in excess of $60 billion per year. However, the

result of our efforts to improve performance in this area became evident in 2021, when

PartnerRe delivered a Non-Life underwriting profit of $507 million (a combined ratio of 90.5%),

despite the fact that the industry absorbed over $100 billion of market catastrophe losses last

year.

Overall, the improvements at PartnerRe that were achieved during our ownership are expected

to deliver $3.5 billion of capital gains to Exor (including dividends). These gains come after

paying out over $2 billion in catastrophe and COVID-19 losses to policyholders since 2016,

money that has supported thousands of people around the world impacted by tragic disasters

and pandemic events.

As PartnerRe moves under the ownership of Covéa, the combined company will benefit from

the increased scale and financial strength of its shared business lines. Although we are saying

goodbye to PartnerRe, we will maintain strong ties as we will with Covéa by continuing to invest

together, having established a relationship that is based on mutual trust and a shared long-term

horizon. I would like to thank PartnerRe’s Board, its Chairman Brian Dowd, its CEO Jacques

Bonneau (who will continue to lead the company), its management team and its associates for

all they have done and I wish them well as they take the next steps on their journey to building a

great company.

In 2021, Ferrari, our most valuable company, achieved a record year that highlighted the

strength of its product lines with double-digit growth in net revenues of €4.3 billion (+23.4%) and

record EBITDA of €1.5 billion. The order book for last year was the strongest ever and covers

well into 2023 with all regions showing significant growth. The company has carefully managed

this impressive order intake in line with its strategy of controlling growth and preserving

exclusivity. Ferrari sold 11,155 units in 2021 and continues to offer extraordinary vehicles

positioned at the top end of the luxury industry.

During this year, Ferrari has added to its range including the launch of the 812 Competizione

with its revolutionary aerodynamics, the exhilarating 296 GTB, which features the latest hybrid

powertrain, combining a V6 turbo with an electric motor, and the evocative Ferrari Daytona SP3,

the latest limited edition Icona. Ferrari has also introduced its brand into exciting new territories

including launching its first fashion collection – a range that truly reflects its excellence in quality

and design – and starting to give its stores a new look to complement its offering.

LETTER TO SHAREHOLDERS

In addition, the company also reopened and revitalised its Cavallino restaurant in Maranello,

while retaining its heritage.

On the track this was Ferrari’s best ever GT season, winning the Drivers’ and Manufacturers’

World titles in the FIA World Endurance Championship and claiming victory at the 24 Hours of

Le Mans. It also announced its eagerly awaited return to the top class of the FIA World

Endurance Championship in 2023 with its Le Mans Hypercar (LMH) programme and attracted a

passionate new audience with the Ferrari Esports Series, gaining 35,000 participants across

Europe. With five podium places and third place in the constructor standings, the Formula One

season produced some encouraging signs and the company is now focussed on the 2022

challenge, confident that the Scuderia has the best pair of drivers on the grid in Charles Leclerc

and Carlos Sainz, who are off to a good start.

Enzo Ferrari, who founded the company, once said that “Ferrari above all is made of people”.

After stepping in last year as CEO, I can only echo this, thanking the Ferrari team for everything

that we achieved together and warmly welcoming Benedetto Vigna who succeeded me.

Benedetto joins Ferrari from STMicroelectronics (“ST”), where he was President of its Analog,

MEMS (Micro-electromechanical Systems) and Sensors Group, ST’s largest and most profitable

operating business. His knowledge, gained from over 25 years working at the heart of the

semiconductor industry that is rapidly transforming the automotive sector, will accelerate

Ferrari’s ability to pioneer the application of next generation technologies.

LETTER TO SHAREHOLDERS

As it continues on its journey, Ferrari will be working with LoveFrom, the creative collective led

by Jony Ive (who has also joined the Exor Partners Council) and Marc Newson. Exor has

announced a multi-year collaboration with LoveFrom and the first expression of this new

partnership will bring together Ferrari’s legendary performance and excellence with LoveFrom’s

unrivalled experience and creativity that has defined extraordinary world-changing products.

During my last Ferrari leadership meeting as CEO, I shared with my colleagues the existential

moment that Hermès went through a century ago. The two grandsons of the founder, Thierry

Hermès, did not see eye to eye on the way forward for the family business, which was then a

global leader in luxury saddlery and accessories for carriages and horses. Émile-Maurice had

returned from America where he had seen the rapid rise of the automobile, which was disrupting

their market. He told his brother, Adolphe, that Hermès had to seek renewal and change. But,

while Émile-Maurice wanted to embrace this challenge, Adolphe decided to sell his stake in the

business to his brother. Émile-Maurice then began using the company’s leather goods skills to

produce suitcases for automobiles and, in 1922, introduced handbags after his wife complained

of not being able to find one to her liking. The company has since gone from strength to

strength, while continuing to be owned and operated by its founding family – an inspiration to

everyone who leads companies in transitioning markets.

Ferrari is not alone in operating in a rapidly changing world. Like Ferrari, Stellantis is committed

to seeking renewal and change within a revolutionising industry. In 2021 alone, there were 11

sizable public listings of pure EV (electric vehicle) players. The top 10 most valuable pure EV

companies, which together sold close to 1% of total vehicle units and a third of the electrified

units, were worth over $1.5 trillion at year end, while the most valuable 10 traditional car

companies, which sold most of the remaining 99% of units, were worth $1 trillion. Markets are

clearly telling us where the future is going and Émile-Maurice is a great example for us to keep

in mind.

Stellantis used its Electrification Day in July 2021 and its Software Day in December to outline

its future direction. These two themes underpin Stellantis’ shift to become a sustainable mobility

tech company. For example, its EV battery sourcing strategy plans to secure more than 130

gigawatt hours (GWh) of capacity by 2025 and more than 260 GWh by 2030. The EV battery

and component needs will be met using five “gigafactories” in Europe and North America,

together with additional supply contracts and partnerships. Software needs to work in harmony

with electrification, so Stellantis has also mapped out how it will deploy next-generation tech

platforms. These build on existing infrastructure to change how customers interact with its

brands and cars, moving from 12 million monetizable connected cars globally to 34 million cars.

In its inaugural year, Stellantis responded to the changes in its industry by launching more than

10 new models across its portfolio of 14 storied brands. Alongside this, it showed strong growth

in EV sales, with the star being the Fiat 500 Electric. Under the leadership of its CEO, Carlos

Tavares, and with the support of his leadership team and associates representing 170 different

nationalities, it delivered an incredibly strong year, along with integrating the new company and

managing a global semiconductor shortage.

LETTER TO SHAREHOLDERS

VII

The company delivered €152 billion in pro forma net revenues in 2021, an 11.8% pro forma

adjusted operating income margin and a pro forma net profit of €13.4 billion.

In April 2021, we announced that we had entered into a consultation understanding with

Peugeot 1810 aimed at strengthening the relations between the Agnelli and Peugeot families

and to provide support for Stellantis and its long-term success. As founding families, we are

proud of what has been achieved but even more excited about the future.

While 2021 represented an exciting year for several of our companies, others faced significant

challenges. For Juventus the 2020/2021 season was turbulent both on and off the pitch. Like

the rest of the sports and entertainment industry, the pandemic prevented fans from seeing their

teams in action. In 2021, Juventus saw 50% of its games at the Allianz Stadium played behind

closed doors with the remainder restricted by limited attendance mandates ranging between

1,000 attendees to 50% of capacity. This robbed the players of the energy that the crowd brings

– something the former bianconeri player and Chairman Giampiero Boniperti, who sadly left us

in 2021, knew well, observing that “there is no greater gift than the love of the supporters”.

Unfortunately, the pandemic hit Juventus just as it was beginning to realise its new plan to grow

the business using the €300 million capital increase decided at the end of 2019. The

combination of the loss of revenues and the global transfer market falling from $7.4 billion in

2019 to $4.9 billion in 2021, led to a difficult first half of the 2021/2022 season with Juventus

closing with a loss of €119 million. In response to this, Juventus developed a new plan and

launched a capital increase of €400 million that was approved in October 2021. These

difficulties highlighted the structural weakness of the football industry in Italy and Europe.

Andrea Agnelli, the Juventus Chairman, has, therefore, advocated for changes in the industry’s

structure and governance to make it more equitable and sustainable for all those who love this

sport.

On the pitch, the Serie A title eluded our men’s team, but the women’s team continued their

domestic dominance with a 4th consecutive Scudetto. The men were able, however, to win the

Italian Supercoppa in January before going on to take the Coppa Italia in May. As we have

learned, when performance is lacking, change is required, which is why we have appointed a

new Board, CEO, Sporting Director, Coach and players. We have also ensured the company

has sufficient time and resources to get back to the top on and off the pitch, which is the

greatest desire of its passionate supporters and shareholders.

Like Juventus, Welltec endured 12 months of market turmoil in 2021. In addition, in April of last

year, the company also had to handle a management transition when its founder and CEO

Jørgen Hallundbæk retired and passed the reins to the COO Peter Hansen. In June 2021,

together with 7-Industries, we then raised our joint participation to 95% to support Welltec in the

next stage of its growth. In September 2021, on the back of positive Q2 activity and improved

market conditions, coupled with a $52 million capital injection (to which we and 7-Industries

subscribed, bringing Exor’s total investment in Welltec to $231.5 million), Welltec refinanced its

outstanding $340 million bond.

VIII

LETTER TO SHAREHOLDERS

Helped by an improvement in energy prices and activity, Welltec was able to end the year

stronger than it started, delivering its first substantial net profit since 2014.

Despite the improving outlook, the company began 2022 with great sadness since it was

marked by the loss of Welltec’s founder. Jørgen Hallundbæk transformed the way the oil and

gas sector operates through his invention of the Well Tractor, a robot that displaced

conventional solutions, enhancing recovery rates and lowering environmental risks. By

introducing new ideas into a complex and conservative industry, he was able to build a global

technology company that embodied his entrepreneurial spirit and innovative thinking.

After facing several difficult years, we believe Welltec is well positioned to benefit from the

strong multi-year cyclical recovery that we expect in the oil and gas sector, with demand

remaining broadly stable for the next couple of decades. To match this, and to counter the

natural production decline rate of oil fields, the sector will need to increase spending

substantially from current depressed levels. We therefore look forward to supporting Welltec as

it continues to develop new, safer and more sustainable solutions for the energy industry.

ESG. At our 2019 Investor Day, we promised that we would define our approach to ESG both

across our companies and within Exor itself. We continued to develop this thinking throughout

the COVID-19 pandemic and were delighted to share it with you at our latest investor day in

November 2021.

Exor’s purpose, as I shared near the beginning of this letter, is “to build great companies” and

we believe that acting in a responsible way is a fundamental part of being a great company.

Being responsible means not only aligning with best practices but also identifying clear

priorities, setting data-driven targets, and raising the bar over time with the goal of achieving

industry ESG leadership. Our companies today are at different stages of this ESG journey. CNH

Industrial, for example, is already regarded as an ESG leader while here at Exor we have just

started our journey.

The approach to ESG that we described in November will apply both to Exor itself and to our

companies. This framework was challenging to develop as we needed something that reflected

the diversity of the companies within our portfolio, while still being meaningful and ambitious. It

is framed in three parts – first foundational elements, then our passions and finally our

communication approach.

The foundational elements are the essential starting conditions that we expect all our

companies to put in place regardless of their industry or size. We have then identified one

passion within each of the ESG pillars that we intend to pursue both at Exor and through our

companies. Within the Environmental pillar our focus is emissions reduction; within the Social

pillar our focus is using education to decrease inequalities and promote innovation; and within

the Governance pillar we are focusing on increasing diversity & inclusion. These passions are

all material and they derive from our history since they represent topics we have traditionally

tackled either at Exor or within our companies.

LETTER TO SHAREHOLDERS

When we presented this thinking to you in November, we described how we would

communicate our progress on it against the UN’s Sustainable Development Goals. We also set

out the ESG commitments we were making at Exor and the ones we will encourage our

companies to make. Our initial progress on these commitments is described in our

Sustainability Report, which also contains the first greenhouse gas inventory of our company

covering all our Scope 1, 2 and 3 emissions. We are now examining how we can reduce Exor’s

environmental impact before offsetting any remaining emissions to reach our goal of net zero

emissions by 2025.

We have also made progress at Exor on our second passion – education – through our support

to I4C (Innovation 4 Change), the innovation programme started in 2016 by Collège des

Ingénieurs in collaboration with CERN Ideasquare. During this 5-month programme, the

60 young, talented and predominately STEM-based students develop innovative and scalable

business ideas and solutions to help solve problems of social interest, with the ambition to

generate a significant impact on the world in a medium-long term perspective. Each idea is

launched by an industry partner who provides a challenge inspired by the United Nations

Sustainable Development Goals (UN SDGs).

Alongside our work with I4C, we have also continued to partner with Fondazione Agnelli on

efforts to decrease inequalities in educational outcomes. In the 2022/2023 academic year, we

will be launching an initiative to reduce the gender gap in STEM subjects. This will focus on

developing the spatial skills of primary school children through the use of building blocks as well

as training teachers on how to remove gender bias from classrooms. On our third passion,

diversity & inclusion, we have said we will maintain our 40/60 female/male gender balance and

increase our inclusion. To do this we are considering diverse candidates for all new

appointments and have been undertaking a number of activities to promote inclusion.

Our Board has strongly supported our thinking on ESG and we have a separate ESG Board

Committee that will hold us accountable to our commitments and raise our aspirations.

LETTER TO SHAREHOLDERS

We are also conscious that ESG also represents a potential investment theme. Our recent

investments in H2 Green Steel (large-scale green steel production in northern Sweden) and

Treedom (certified B-Corp that directly finances agroforestry projects) have provided us with

some interesting initial reflections on this emerging and evolving space.

***

Others (5.0% of GAV)

At 31 December 2021, our largest allocation of capital outside of our companies is to Exor

Seeds, an activity that I described in my letter to you last year. Seeds had a strong year in 2021

supported by the ongoing digital transformation across nearly every industry, in particular within

our focus areas of mobility, fintech and healthcare. Since inception we have invested

€380 million in 60 companies globally, split evenly between the U.S. and Europe, with ~10% in

APAC and Latin America.

In 2021, 15 of our Seeds companies had up-rounds, and nearly half of our capital was deployed

to double down on those that we believe will be long-term winners. Despite the fact that pre-IPO

and later stage growth round dynamics are changing with fewer crossover investors, smaller

round sizes, and modestly lower valuations, competition for high quality early-stage deals

remains fierce. In times like these, founders have appreciated the value of our permanent

capital, our purpose and values, and long history as owner operators. We remain nimble and

continue to win more competitive deals from the relationships built with founders and other VC

investors since our Seeds effort began in 2017.

We are happy that Diego Piacentini, the only executive to have held senior roles at both Apple

(1987 to 1999) and Amazon (2000 to 2016) during their formative years, has joined us to chair

Exor Seeds. He will support the Seeds team, as they continue to pursue our ambition of

achieving a financial return in line with top quartile VCs while adding value to Exor companies

(without playing the role of corporate VC), and creating a vetted pipeline of 21st century Exor

companies.

March 2022 marked the 5th anniversary of our public equities investment activity, which is

steered by Matteo Scolari and his team. Since inception, the portfolio has delivered a

cumulative gross return of 207.1% in USD or 24.7% annualized with no down years, thanks to

hedging activity. In comparison, the performance of the MSCI World Total Return index over the

same period was 81.5% or 12.5% annualized (with negative returns in 2018 and to date in

2022).

Through our investments in Canada-based Cameco and NexGen Energy, uranium was one of

the main positive contributors to our performance in 2021. Cameco is the world’s largest

independent listed uranium company, while NexGen is developing the largest low-cost uranium

project globally. We believe nuclear power will be instrumental in tackling the triple challenge of

reducing energy poverty, electrifying industrial applications and replacing fossil fuels.

LETTER TO SHAREHOLDERS

As nuclear plants provide reliable and carbon-free baseload power, they are the ideal addition to

intermittent renewable energy sources such as solar and wind. China has identified nuclear as a

key technology to reduce its reliance on fossil fuels and is building dozens of new reactors.

In the West, nuclear has been included in the EU’s green taxonomy while the US has reinstated

its commitment to carbon-free nuclear power.

While the demand picture is as bright as ever, the uranium industry is in a structural supply

deficit. A decade of low prices has forced producers drastically to reduce their investments in

production and exploration with Cameco suspending production at its largest mine, McArthur

River. Over the past year, utilities’ increasing concerns around future supply security along with

significant activity from financial investors have resulted in uranium prices almost doubling.

However, in our opinion, prices will need to rise further to incentivize new projects, benefiting

our investments since they enjoy sizable low-cost reserves.

The biggest detractor to performance in 2021 was our investment in Ocado, which was caught

up in a protracted patent infringement challenge launched by a competitor. The increased

uncertainty surrounding Ocado’s intellectual property rights, combined with last year’s poor

performance of internet-related stocks, caused its shares to reverse most of the prior year’s

gains. However, Ocado recently scored two important victories in the US courts, reinforcing our

view that the company’s legal position is robust. We have taken this opportunity to add to our

investment at what we believe are very attractive prices.

In 2021, we were excited to welcome Nikhil Srinivasan, who joined us from his role as CIO at

PartnerRe, and his team into the Exor family. Nikhil’s team will focus primarily on private

markets, and although their investments are made on a global basis with a sector agnostic

approach, there will be an Asia bias. They have, for example, already made an investment in

TVS Supply Chain Solutions (TVS SCS), a business division of the diversified Indian

conglomerate, TVS Group. TVC SCS has become a leading logistics player both at a national

and global scale with a focus on three services verticals: integrated supply chain management,

global forwarding solutions and last mile solutions. The business operates in over 50 countries

with 18,000 employees and 300+ Fortune 1000 customers and is demonstrating strong growth

with revenues of $917 million in 2021 and an EBITDA margin of 8%-9% that has experienced a

CAGR of 37% from 2005 to 2021.

In addition to the investments described above, we also had cash, cash equivalents and listed

securities of €738 million at the end of 2021.

***

XII

LETTER TO SHAREHOLDERS

GROSS DEBT AT 31 DECEMBER 2021

In 2021, we returned to the public market after two years, successfully pricing a €500 million 10-

year bond. We were able to benefit from a stable market window and found strong investor

demand, achieving the lowest bond yield and coupon ever for Exor (0.971% and 0.875%

respectively). In conjunction with the new issuance, we also announced an offer to repurchase

our 2022 and 2024 bonds in cash, repurchasing €298 million in aggregate.

At 31 December 2021, the majority of our gross debt of €4.3 billion was made up of bonds of

€4.1 billion (of which 59% public bonds and 41% private placements) with an average maturity

of ~7 years and an average cost of ~2.4%. In addition, we had a €150 million term loan with

maturity in 2024, available committed credit lines for €385 million, and uncommitted credit lines

for €545 million, all of which were undrawn.

***

2022

We started 2022 with the listing of Iveco Group on 3rd of January. Iveco Group was spun out of

CNH Industrial and contains its truck, speciality vehicle and engine businesses. As CNH

Industrial explained in its Investor Day in 2019, Iveco Group faces very different competitive

markets, customers and challenges than the rest of its businesses and, as a stand-alone

company, will benefit from separate leadership and focus.

Although Iveco Group is a new company, it can trace its origins back to 1903 when Fiat

produced its first commercial vehicle, the 24HP. The name Iveco was born in 1975 as the

acronym for Industrial Vehicles Corporation following the merger of five truck companies within

Fiat – the Italian group of Fiat, OM and Lancia, the French Unic and the German Magirus Deutz.

Further European consolidation occurred near the end of the 1980s when Iveco acquired Ford

Truck (UK), Astra (Italy) and Pegaso (Spain).

Guided by a strong and talented management team led by Gerrit Marx, the 34,000 employees

of Iveco Group are embracing their future as a more focused company that can move from its

2021 net industrial revenues of €12.7 billion to its target range of €16.5 billion – €17.5 billion by

2026.

Following the spin-off of Iveco Group, CNH Industrial is focussed on becoming the pre-eminent

manufacturer of leading-edge equipment for the world’s agriculture and construction workers.

The acquisition of Raven Industries, a leader in precision agriculture technology, for $2.1 billion

was a bold decision that highlighted CNH Industrial intention to combine strong autonomous

and precision agtech innovation capabilities with its existing strong equipment technologies. I

look forward to spending more time on CNH Industrial’s ambitious future in next year's Letter to

Shareholders.

LETTER TO SHAREHOLDERS

XIII

1) FY2021 consolidated revenues.

On February the 18th, our Board agreed to settle with the Italian Tax Authorities on a complex

tax issue, specifically in respect to the Exit Tax.

As a result of the subsequent principle of law published in 2021, a matter of interpretation on the

application of the PEX regulation back in 2016 arose. We remain convinced that we acted in

accordance with the rules but, with the objective of avoiding the time and costs of a major tax

dispute, have decided to enter into a settlement agreement with the Italian Tax Authorities. The

settlement entailed the immediate payment of €746 million, of which €104 million is interest. The

settlement does not and should not be interpreted as a recognition, or even partial acceptance

by Exor of the subsequent interpretations advanced by the Italian Tax Authorities and it is

notable that the Italian Tax Authorities have levied no penalties in relation to this claim. There

are no other outstanding fiscal issues pending for Exor in respect of any of the years in which

the company was a tax resident in Italy.

While we are disappointed by these events, we recall the wise words of Luigi Einaudi, one of

the most preeminent Presidents of Italy as well as a journalist for La Stampa and The

Economist who once said that: “thousands, millions of people work, produce and save in spite

of everything we can invent to harass, hinder and discourage them. It is the natural calling that

drives them…the pleasure, the pride in seeing one’s own company thrive, generate revenue

and customer trust…”.

With this in mind, we are more determined than ever to follow our calling and seek out new

opportunities to create value not just for Exor but at the same time for our communities.

XIV

LETTER TO SHAREHOLDERS

As we described at our Investor Day, we will continue to focus on building great companies with

great people. While we remain open to all situations where this can apply, we are currently

focused on a few sectors and themes where we want to both leverage on our experience, like

luxury, and build knowledge such as healthcare and technology.

For the same reason, we are also are proud to have launched an Italy-focused seed program to

support the country’s most promising entrepreneurs building the next generation of great

companies. Under this initiative, Exor Seeds will invest in pre-seed and seed stage startups,

providing them with a €150,000 equity investment together with a rapid and efficient decision-

making process and founder-friendly terms requiring no Board seat.

This kind of initiative, where we support ambitious founders developing new and positively

disruptive businesses, is rooted in Exor’s own, long history of entrepreneurialism and is

consistent with our purpose of building great companies. So, in the spirit of optimism on which

all great businesses are founded, I would like to end this year by inviting any founders or

business leaders, who are working to realise a big vision and who are in search of support to

bring it to life, to get in touch with us.

LETTER TO SHAREHOLDERS

Board of Directors

Chairman and Chief Executive Officer

John Elkann

Vice Chairman

Alessandro Nasi

Non-independent Directors

Andrea Agnelli

Ginevra Elkann

Independent

Senior non-executive Director

Marc Bolland

Non-executive Directors

Joseph Bae

Ajay Banga

Melissa Bethell

Laurence Debroux

Compensation and Nominating Committee

Marc Bolland (Chair), Joseph Bae and Melissa Bethell

Audit Committee

Laurence Debroux (Chair), Ginevra Elkann and Melissa Bethell

ESG Committee

Ajay Banga (Chair), Marc Bolland and Laurence Debroux

Independent Auditors

Ernst & Young Accountants LLP

Expiry of term of office

The Board of Directors was appointed on 20 May 2020 and Mr. Ajay Banga on 27 May 2021. The Board’s appointment term

will expire concurrently with the shareholders' meeting that will approve the 2022 annual financial statements, hence in 2023.

BOARD REPORT

KEY DATA

Exor Group – Consolidated Data

€ million

31/12/2021

31/12/2020(a)

Net Revenues

33,617

26,792

Profit (loss) before tax

4,653

(214)

Net profit (loss) from continuing operations

3,350

(230)

Net profit (loss)

3,454

of which attributable to owners of the parent

1,717

(30)

(a)Adjusted following the classification of FCA Group and PartnerRe Group as a discontinued operation. For further detail see Note 3 Scope of consolidation in

the Consolidated Financial Statements.

APM(a) and other information

€ million

31/12/2021

31/12/2020

Share of earnings of investments and dividends

4,680

173

31/12/2021

31/12/2020

Consolidated net financial position of Exor's Holdings System

(3,924)

(3,251)

Net Asset Value(b)

31,069

24,041

Per share(b) _ €

132.41

102.08

Market Capitalization

19,029

15,959

Per share(c) _ €

78.96

66.22

Issued capital and reserves attributable to owners of the parent

16,759

13,090

Per share(d) _ €

72.33

56.67

(a)The Alternative Performance Measures are defined on page 18. The basis of preparation is presented in the section “Review of the Consolidated Results of the

Exor Group - Shortened”.

(b)NAV per share at 31 December 2021 and 31 December 2020 are based on 234,645,891 shares and 235,516,639 shares respectively. Treasury stock includes

shares held in treasury at the service of stock option plans. At 31 December 2020 it included also 870,748 shares not allocated to stock option plans. Shares

bought back in the context of the 2018-2020 program are not included.

(c)Market capitalization per share based on 241,000,000 total issued shares.

(d)Issued capital and reserves attributable to owners of the parent based on 231,708,756 total outstanding shares (231,006,756 in 2020).

Earnings per share (€)(a)

2021

2020

Profit (loss) attributable to owners of the parent – basic

7.80

(0.13)

Profit (loss) attributable to owners of the parent – diluted

7.79

(0.13)

Earnings per share (€) from continuing operation

Profit (loss) attributable to owners of the parent – basic

7.41

(0.94)

Profit (loss) attributable to owners of the parent – diluted

7.40

(0.95)

(a)Additional details on the calculation of basic and diluted earnings per share are provided in Note 9 to the Consolidated Financial Statements.

Dividend per share (€)

Paid in 2021

Paid in 2020

Dividend paid – Total € million

99.60

Per share

0.43

Stock Market data

01/01/22 – 23/03/22

01/01/21 – 31/12/21

At the end of the period (€)

68.80

78.96

Maximum (€)

81.22

84.92

Minimum (€)

57.66

61.38

Average daily volume exchanged during the period (shares)

305,271

311,760

Average daily value of exchanges during the period (in Euro)(a)

21,787,283

22,275,938

(a)Official daily trading price by daily volume, managed by Borsa Italiana during the period.

BOARD REPORT

EXOR PROFILE

EXOR N.V. (“Exor N.V.” or "Exor" or the “Company”) is listed on the Euronext Milan managed by

Borsa Italiana S.p.A. (EXM) and headquartered in Amsterdam, the Netherlands.

Exor is registered in the Dutch companies’ register of the Chamber of Commerce (Kamer van

Koophandel) under registration number 64236277. The registered office is Gustav Mahlerplein 25,

1082 MS, Amsterdam, the Netherlands, telephone number +31 (0) 202402220.

BOARD REPORT

PROFILE

Exor is one of Europe’s largest diversified holding companies, with a Net Asset Value (NAV)1 of around

€31 billion at 31 December 2021.

For over a century, Exor has made successful investments and built great companies, combining an

entrepreneurial spirit with financial discipline. Exor works closely with the companies that it owns, and in most

cases is the main shareholder of those companies. Exor itself is majority owned and controlled in turn by Giovanni

Agnelli B.V., which represents the interests of the descendants of Senator Giovanni Agnelli, the founder of FIAT.

PURPOSE

Exor’s purpose is to Build Great Companies. Through doing this it creates opportunities for talented people, makes

a positive contribution to society and delivers superior returns to its investors. It defines Great Companies as

shown below, with the focus being not only on their short term performance but also on their longer term growth,

renewal and change, as well as on the need to act responsibly.

TO BUILD:

GREAT COMPANIES:

•Foster a culture with clarity of purpose

and shared values

•Appoint leaders who walk the talk

•Create governance that ensures

alignment of culture and actions

BUILD

GREAT

COMPANIES

•Perform to the highest standards

•Seek renewal and change

•Are distinctive in what they do

•Act in a responsible way

VALUES

Exor’s purpose is underpinned by its values. Each of these is described through two words that are in tension with

each other. Finding the right balance between these values is the role of leaders within Exor and its companies.

AMBITION & HUMILITY

CURIOSITY & FOCUS

We set high aspirations but remain grounded

We seek new ideas while prioritising what matters

COURAGE & RESPONSIBILITY

PATIENCE & DRIVE

We take bold actions while being mindful of their

consequences

We take a long-term perspective but are relentless in getting

things done

BOARD REPORT

APPROACH TO NEW INVESTMENTS

Exor's approach to investing in new companies is based around its purpose and values. Exor identifies sectors and

themes that are of potential interest and looks for opportunities within them, while not excluding other opportunities.

All opportunities are then screened using a clear set of investment criteria:

UNDERSTANDING

PEOPLE

VALUE

We invest only when we

understand

We back talent and look for

cultural alignment

We decide based on value not

only price

✓

We learn from practitioners

who bring deep knowledge

✓

We believe people are what

makes the difference

✓

We assess intrinsic and

potential value to invest

when the price is right

✓

We form our own opinions

and strive to be aware of

what we don’t know

✓

We know that behaviours are

as important as skills or

knowledge

FINANCIAL PRIORITIES

Through delivering on its purpose of building great companies, Exor aims to achieve the financial targets listed

below.

•NAV per share to outperform the MSCI World index

•Financial strength and discipline, keeping LTV2 ratio below 20%

•Generate Free Cash Flow in excess of dividends paid

•Cash Holding Cost as a percentage of Gross Asset Value below 10bps

(1)An Alternative Performance Measure as defined on page 18.

(2)Reference is made to the Loan-to-Value (LTV) ratio as defined by Standard and Poor’s, which uses the LTV ratio to assess the financial

risk profile of an Investment Holding Company, namely Adjusted Debt (or Gross Debt minus Cash and Equivalents) divided by Portfolio

Value (or Gross Asset Value minus Cash and Equivalents), expressed as a percentage.

BOARD REPORT

EXOR PORTFOLIO: COMPANIES AND INVESTMENTS

Exor’s portfolio is made up of companies and investments.

Companies: these constitute around 95% of the portfolio by value and consist of five larger companies and seven

smaller companies. Exor is a significant shareholder in all of these companies and in many cases is the reference

shareholder.

Company

Description

Economic

rights and

voting rights1

% on

GAV1

Ferrari is among the world’s leading luxury brands focused on the design,

engineering, production and sale of the world’s most recognisable luxury

performance sports cars.

Ferrari is listed on the New York Stock Exchange and the Euronext Milan

managed by Borsa Italiana and is included in the FTSE MIB Index.

22.9%

25.6%

36.0%

PartnerRe is a leading global pure-play reinsurer, with a broadly diversified

and balanced portfolio of traditional reinsurance risks and capital markets

risks.

PartnerRe commenced operations in 1993 and provides Non-life (Property

& Casualty (P&C) and Specialty) and Life and Health reinsurance on a

worldwide basis.

100.0%

24.4%

99.8%

Stellantis is one of the world’s leading automakers and a mobility provider,

guided by a clear vision: to offer freedom of movement with distinctive,

affordable and reliable mobility solutions.

Stellantis is listed on the New York Stock Exchange, the Euronext Paris

and the Euronext Milan managed by Borsa Italiana and is included in the

FTSE MIB Index.

14.4%

22.0%

14.4%

CNH Industrial is a world-class equipment and services company that

sustainably advances the noble work of agriculture and construction

workers.

CNH Industrial is listed on the New York Stock Exchange and the Euronext

Milan managed by Borsa Italiana and is included in the FTSE MIB Index.

26.9%

14.1%

42.5%

Juventus was founded in 1897 and it is one of the most prominent

professional football teams in the world.

Juventus is listed on the Euronext Milan managed by Borsa Italiana.

63.8%

1.7%

77.9%

Iveco Group is a global automotive leader active in the Commercial &

Specialty Vehicles, Powertrain and related Financial Services arenas.

Iveco Group is listed on Euronext Milan managed by Borsa Italiana and is

included in the FTSE MIB Index.

27.1%

1.6%

42.5%

BOARD REPORT

Company

Description

Economic

rights1

% on

GAV1

Christian Louboutin was founded in 1991 and has grown to become one of

the leading names in global luxury, world famous for its signature red sole

women’s shoes. The company is also recognised for having successfully

diversified its business into men’s footwear, leather goods & accessories

and beauty. Christian Louboutin operates about 150 boutiques around the

world.

24.0%

1.6%

24.0%

First launched in New York City in 2013, Via is a technology company

specialising in the dynamic, data-driven optimisation of public mobility

systems in cities all around the world.

17.6%

1.4%

17.6%

The Economist Group is a leading source of analysis on international

business and world affairs. Based in London and serving a global

readership and client base, it delivers its information through a range of

formats, from newspapers and magazines to conferences and electronic

services.

43.4%

1.1%

20.0%2

GEDI Gruppo Editoriale is a leading Italian media group, operating through

a set of first tier media brands including newspapers and magazines, radio,

digital and advertising. It owns two of the leading Italian newspapers La

Repubblica and La Stampa, Il Secolo XIX and other local newspapers,

several magazines and three national radio stations including Radio

Deejay.

89.6%

0.6%

89.6%

Welltec® services the energy industry with market leading technologies

that are used to build and repair oil and gas wells. Its solutions help clients

to optimise their production and minimise their environmental footprint. The

company was established in 1994 and is based in Denmark.

47.6%

0.3%

47.6%

SHANG XIA is a luxury company whose brand has been established jointly

by the designer Jiang Qiong Er and France's Hermès Group. The brand

uses its distinctive combination of contemporary design, hand artisanship

and Chinese culture to create an artistic portfolio of furniture, homeware,

apparel, leather goods, jewellery and accessories.

77.3%

0.3%

77.3%

(1)At 28 February 2022.

(2)Voting rights are limited to 20%.

BOARD REPORT

Investments: Exor’s investments include both private and public situations as well as alliances.

–Private: sector agnostic investments focused on best ideas across the capital structure in unlisted companies

with an Asia bias.

–Public: a portfolio of minority investments in a small number of publicly-listed companies.

–Seeds: a portfolio of minority investments in early stage and late-stage companies through which it backs

talented founders who have the ambition to build great companies.

–Alliances: situations where Exor does not directly invest but works with a partner.

BOARD REPORT

SIGNIFICANT EVENTS IN 2021

BOARD REPORT

SIGNIFICANT EVENTS IN 2021

Significant events below refer to Exor N.V. and the Holdings System(1).

Creation of Stellantis

On 16 January 2021, PSA merged with and into FCA. By virtue of the merger, FCA issued 1.742 FCA common

shares for each outstanding PSA ordinary share and each PSA ordinary share ceased to exist. Each issued and

outstanding common share of FCA remained unchanged as one common share in FCA. The surviving entity

changed its name to Stellantis on 17 January 2021, which was the accounting acquisition date for the business

combination.

Following the merger, Exor continues to hold 449,410,092 common shares of Stellantis, corresponding to 14.4% of

the outstanding capital.

On 29 January 2021, the extraordinary dividend of approximately €2.9 billion (Exor’s share €827 million) was paid

to holders of FCA common shares of record as of the close of business on Friday, 15 January 2021.

As part of the merger, Stellantis distributed to its shareholders its 39.34% stake in Faurecia and the proceeds

generated by the sales of ordinary shares of Faurecia carried out in 2020. On 22 March 2021 Exor received

7,653,004 Faurecia ordinary shares (measured at €363 million) and a €43 million cash dividend.

Issue of non-convertible bond due on 19 January 2031

On 19 January 2021 Exor issued bonds for a nominal amount of €500 million, maturing on 19 January 2031 with a

fixed annual coupon of 0.875%. The purpose of the issue was to raise new funds for Exor's general corporate

purposes, including the refinancing of existing debt. The bonds are listed on the Luxembourg Stock Exchange for

trading on the Euro MTF Market, with a BBB+ credit rating assigned by Standard & Poor’s.

Tender offers on 2022 and 2024 Exor Bonds

On 12 January 2021 Exor launched an invitation to eligible noteholders of the Exor outstanding €750,000,000

2.125% Notes due 2022 and the Exor outstanding €650,000,000 2.50% Notes due 2024, listed on the Luxembourg

Stock Exchange, to tender their notes for purchase by Exor for cash.

On 20 January 2021 Exor announced that it accepted all validly tendered notes for an aggregate nominal amount

of €297,713,000. Therefore the nominal amounts outstanding after the repurchase settlement date are

€601,891,000 of Notes due 2022 and €500,396,000 of Notes due 2024.

Investment in Christian Louboutin

On 8 March 2021 Exor and Christian Louboutin signed an agreement whereby Exor would invest €541 million to

become a 24% shareholder in Christian Louboutin, alongside the founders and to nominate 2 of the 7 members of

its board of directors. The transaction closed on 13 April 2021.

Increase in the investment in Via Transportation

In the year 2021 Exor invested a total amount of $188 million (€158 million) to acquire a further 7,43% stake in Via

Transportation. At 31 December 2021 Exor held 17.56% of the share capital of Via Transportation for a total

amount of $509 million (€449 million).

Increase in the investment in Exor Seeds

In the year 2021 Exor increased its investment in Exor Seeds by $284 million (€241 million).

Increase in the investment in Welltec

In the year 2021 Exor acquired a further 25.5% of Welltec for a total consideration of $48 million (€39 million). In

addition, Exor made an equity contribution of $25 million in the context of the company's refinancing in

October 2021. At 31 December 2021 Exor held 47.6% of the share capital of Welltec.

(1) An Alternative Performance Measure as defined on page 18.

BOARD REPORT

Creation of the new partnership between EXOR and The Word-Wide Investment Company Limited (WWICL)

in NUO S.p.A.

On 16 June 2021 Exor and The World-Wide Investment Company Limited (“WWICL”), Hong Kong’s oldest family

office, created a partnership between two multi-generational entrepreneurial families to invest in and support the

global development of medium-sized Italian companies specialising in consumer goods excellence. The new

company, called NUO S.p.A. will be endowed with initial permanent capital of €300 million contributed equally by its

founders. In December 2021 Exor invested €22 million in NUO S.p.A.

Juventus Football Club capital increase

On 25 August 2021, Juventus board of directors proposed a capital increase for a total amount of €400 million,

approved by the extraordinary shareholders’ meeting on 29 October 2021. The capital increase was completed at

the end of 2021 with a full subscription. Exor subscribed its quota of the capital increase for a total of €255 million,

of which €75 million paid on 27 August 2021 and the remaining €180 million paid on 9 December 2021.

After this operation Exor owns 1,611,669,116 Juventus shares (63.77% of the share capital).

Definitive Agreement for the sale of PartnerRe signed by Exor and Covéa

On 16 December 2021 Exor and Covéa signed a Definitive Agreement to sell PartnerRe, the global reinsurer

wholly-owned by Exor.

The agreed cash consideration of $9.0 billion to be paid by Covéa at closing of the transaction is based on a

consolidated common shareholders’ equity value of $7.0 billion. Preferred Shares issued by PartnerRe and listed

on the NYSE are not part of the transaction.

Subject to obtaining approvals from the applicable regulatory and competition authorities, it is expected that the

transaction will be completed in mid-2022.

Following a successful closing of the transaction, Exor and Covéa will continue their reinsurance cooperation, with

Exor acquiring from Covéa interests in special purpose reinsurance vehicles managed by PartnerRe for

approximately $725 million. These vehicles will invest in property catastrophe and other short-tail reinsurance

contracts underwritten by PartnerRe. Covéa, Exor and PartnerRe will also continue to invest jointly in Exor-

managed funds with reinforced alignment of interests.

BOARD REPORT

REVIEW OF THE CONSOLIDATED RESULTS

OF THE EXOR GROUP

Exor (and the subsidiaries constituting the Holdings System) together with its operating subsidiaries,

constitute the “Exor Group” or the “Group”.

This section includes a selection of the most relevant financial data from the consolidated financial

statements of the Exor Group.

In order to ensure that data is coherent and uniform, it is presented based on Exor consolidation

rules and IFRS accounting standards and therefore may differ from the data published by

subsidiaries in their financial reports.

BOARD REPORT

REVIEW OF THE CONSOLIDATED RESULTS OF THE EXOR GROUP

Accounting of Stellantis and deconsolidation of FCA

On 16 January 2021 PSA merged with and into FCA, with FCA as the surviving company in the merger. On

17 January 2021 the combined company was renamed Stellantis N.V.

Exor's Consolidated Financial Statements at 31 December 2021 include the financial data of FCA for the period

1 January - 16 January 2021 before the merger with PSA, applying the line by line consolidation method.

Following the merger, Exor lost control over FCA and therefore derecognized the former FCA Group net assets at

16 January 2021 and accounted for the investment in Stellantis applying the equity method, having a significant

influence over Stellantis in accordance with IAS 28.

The economic data of FCA have been excluded from continuing operations and are presented in a single line item

within the consolidated income statement for the year 2021 and 2020, as a discontinued operation. The assets and

liabilities of FCA Group at 31 December 2020 have not been reclassified for the comparative consolidated

statement of financial position. For further detail see Note 3 Scope of consolidation in the Consolidated financial

Statements.

Deconsolidation of PartnerRe

On 16 December 2021 Exor and Covéa signed a Definitive Agreement to sale PartnerRe, the global reinsurer

wholly-owned by Exor. At 31 December 2021, the sale within the next twelve months became highly probable and

the subsidiary met the criteria to be classified as a disposal group held for sale and a discontinued operation

pursuant to IFRS 5, since it represents a separate major line of Exor Group Business.

The economic data of PartnerRe have been excluded from continuing operations and are presented in a single line

item within the consolidated income statement for the year 2021 and 2020, as a discontinued operation. The assets

and liabilities of PartnerRe at 31 December 2020 have not been reclassified for the comparative consolidated

statement of financial position. For further detail see Note 3 Scope of consolidation in the Consolidated financial

Statements.

Significant economic data(a)

€ million

STELLANTIS(b)

CNH

INDUSTRIAL

FERRARI

PARTNERRE(c)

JUVENTUS

GEDI(d)

OTHER AND

ADJUSTMENTS(e)

CONSOLIDATED

2021

Revenues from

continuing operations

—

28,309

4,271

—

446

520

33,617

Net profit (loss) from

continuing operations

1,905

1,502

833

(215)

(35)

(640)

3,350

Profit (loss)

attributable to owners

of the parent(f)

1,905

398

201

580

(137)

(31)

(1,199)

1,717

2020

Revenues from

continuing operations

—

22,749

3,460

—

509

367

(293)

26,792

Net profit (loss) from

continuing operations

—

(608)

609

—

(153)

(13)

(65)

(230)

Profit (loss)

attributable to owners

of the parent(f)

—

(178)

146

181

(98)

(11)

(70)

(30)

(a)Data prepared by each subsidiary for Exor consolidation purposes, which may differ from data published by each subsidiary in its own financial report.

(b)Consolidated with the equity method starting from 17 January 2021.

(c)Data reclassified as a discontinued operation.

(d)Data 2020 referred to the period 1 May - 31 December 2020.

(e)Includes the net result of Exor and subsidiaries of the Holdings System, excluding the share of the profit of the operating companies consolidated line by line,

presented in their respective columns.

(f)Exor share of the results attributable to the owners of the parent of each segment entity. The share of the result of FCA ( €8 million and €9 million for the period

1 January - 16 January 2021 and the year 2020 respectively) and the share of result of PartnerRe (€580 million for the year 2021 and €181 million are included

in the column other and adjustments.

BOARD REPORT

Net revenues

Net revenues of CNH Industrial for the year 2021 were €28,309 million, with an increase of €3,599 million

compared to the year 2020 (€22,749 million), due to higher volumes driven by strong industry demand together

with favourable price realization.

Net revenues of Ferrari for the year 2021 were €4,271 million, with an increase of €811 million or 23.4% (an

increase of 26.0% on a constant currency basis), compared to €3,460 million in the year 2020, mainly attributable

to the combination of €738 million increase in cars and spare parts, €38 million increase in engines, a €41 million

increase in sponsorship, commercial and brand, partially offset by €6 million decrease in other net revenues.

Net Profit (loss) from continuing operations

Net profit from continuing operations of CNH Industrial was €1,502 million in the year 2021 as a result of the strong

performance from all segments, while in the year 2020 the result was a net loss of €608 million and included the

before and after-tax goodwill impairment loss of €523 million, other assets impairment charges of €288 million

(€237 million after-tax), as well as asset optimization charges of €256 million (€206 million after-tax).

In the year 2021 the net profit from continuing operations of Ferrari was €833 million, significantly up versus the

year 2020 (€609 million). The increase of €224 million was mainly attributable to the increase in net revenues. In

the year 2020 costs as a percentage of net revenues were negatively impacted by the COVID-19 pandemic, which

caused a seven-week production and delivery suspension in the year 2020 as well as changes to the calendar and

format of the 2020 Formula 1 World Championship.

Significant financial data(a)

€ million

STELLANTIS(b)

FCA

CNH

INDUSTRIAL

FERRARI

PARTNERRE(c)

JUVENTUS

GEDI

OTHER AND

ADJUSTMENTS(d)

CONSOLIDATED

31 December 2021

Cash and cash

equivalents

—

6,058

1,344

—

160

329

7,905

Total assets

8,624

—

45,129

6,863

25,429

962

675

3,429

91,111

Gross debt(e)

—

21,569

2,667

—

239

161

4,314

28,950

Total equity

8,624

—

7,440

2,211

7,316

303

193

(1,717)

24,370

Issued capital and

reserves

attributable to

owners of the

parent(e)

8,624

—

1,962

533

7,139

194

171

(1,864)

16,759

31 December 2020

Cash and cash

equivalents

—

23,846

7,847

1,363

1,916

515

35,561

Total assets

—

100,053

41,199

6,262

22,537

967

660

1,267

172,945

Gross debt(e)

—

21,750

21,805

2,727

1,915

396

143

4,196

52,932

Total equity

—

25,861

5,489

1,789

6,583

125

231

(2,418)

37,660

Issued capital and

reserves

attributable to

owners of the

parent(f)

—

7,337

1,431

452

6,025

207

(2,442)

13,090

(a)Data prepared by each subsidiary for Exor consolidation purposes which may differ from data published by each subsidiary in its own financial report.

(b)Consolidated with the equity method starting from 17 January 2021.

(c)At 31 December 2021 cash and cash equivalents and gross debt are reclassified as assets and liabilities held for sale.

(d)Includes the data of Exor and subsidiaries of the Holdings System, excluding the data of the operating companies consolidated line by line, presented in their

respective columns.

(e)Gross debt referred to CNH Industrial includes industrial activities and financial services debt.

(f)Exor share of the equity attributable to the owners of the parent of each segment entity.

BOARD REPORT

Gross debt

€ million

31/12/2021

31/12/2020

Bonds

13,283

23,517

Borrowings from banks

2,880

13,108

Asset-backed financing

10,661

10,518

Payables represented by securities

1,081

1,696

Lease liabilities

504

2,253

Other financial debt and liabilities

541

1,840

Gross debt(a)

28,950

52,932

(a)Data at 31 December 2020 included gross debt related to FCA for €21,750 million and PartnerRe for €1,915 million.

Financial debt is constituted mainly of bond issues and bank borrowings. As is usual practice, the major part of

such debt agreements contains covenants which inter alia limit the capacity of Group companies to contract further

debt, make certain types of investment, put into effect certain types of transaction with Group companies, dispose

of certain assets or merge with or into other companies and use assets as security for other transactions. Further,

certain bond issues and bank borrowings require the issuer to remain in compliance with financial ratio covenants.

In the year 2020, Exor and its subsidiaries took several key actions to secure their financial position, including

drawing credit lines and facilities and securing additional incremental instruments to strengthen the available

liquidity.

Cash flow

€ million

31/12/2021

31/12/2020(a)

Cash flow from (used in) operating activities:

4,177

14,061

- continuing operations

5,392

3,927

- discontinued operations

(1,215)

10,134

Cash flow from (used in) investing activities

(7,058)

(10,102)

- continuing operations

(5,525)

(1,567)

- discontinued operations

(1,533)

(8,535)

Cash flow from (used in) financing activities

(2,188)

10,626

- continuing operations

(1,937)

1,109

- discontinued operations

(251)

9,517

Translation differences

502

(1,949)

Net change in cash and cash equivalents

(4,567)

12,636

Cash and cash equivalents at the beginning of the period

35,561

22,935

Cash and cash equivalents at the beginning of the period included in Assets held for sale

Deconsolidation of FCA at 16 January 2021

(22,532)

—

Cash and cash equivalents at the end of the period included in Assets held for sale

(584)

(27)

Cash and cash equivalents at the end of the period

7,905

35,561

(a)Adjusted following the presentation of FCA and PartnerRe as a discontinued operation.

In the year 2021 group companies generated positive cash flows from operating activities for €4,177 million, while

the cash flow in investing activities is a negative €7,058 million mainly related to the investments in property, plant

and equipment and intangible assets for €1,960 million and investment in subsidiaries and associates for

€2,928 million.

In the year 2021 net cash used in financing activities was €2,188 million, primarily related to the repayment of notes

and to the other long-term debt for a total of €2,091 million, partially offset by issues of new notes (€1,355 million).

In the year 2020 the group companies generated positive cash flows from the operating activities for

€14,061 million (of which €10,134 million from discontinued operations) and negative cash flows from investing

activities for €10,102 million (of which €8,535 million from discontinued operations).

BOARD REPORT

Cash flows from investing activities from continuing operations (€1,567 million) mainly refer to the investments in

property, plant and equipment and intangible assets for €1,653 million, investment in subsidiaries and associates

for €582 million, partially offset by a net positive change in financial receivables for €490 million.

In the year 2020 cash flow from financing activities from continuing operation was €1,109 million primarily related to

issue new note, net by repayment for €2,360 million, partially offset by net change in financial debt for €779 million).

BOARD REPORT

ALTERNATIVE PERFORMANCE MEASURES (APM)

This section presents the Alternative Performance Measures (APM) identified by Exor’s

management to facilitate the understanding of the economic and financial performance of Exor and

the Group:

•Net Asset Value (NAV)

•Net Financial Position (NFP)

•Share of the profit (loss) of investments accounted for using the equity method

BOARD REPORT

ALTERNATIVE PERFORMANCE MEASURES (APM)

To facilitate the understanding of the economic and financial performance of Exor and of the Group, the

Management of Exor has identified a number of Alternative Performance Measures (APM), which are used to

identify operational trends and to make investment and resource allocation decisions. To ensure that the APM are

correctly interpreted, it is emphasized that these measures are not indicative of the future performance of the

Group. The APM are not part of international reporting standards (IFRS) and are unaudited. They should not be

taken as replacements of the measures required under the reference financial reporting standards.

The APM should be read together with the consolidated financial information prepared using the shortened

consolidation criterion. Since they are not based on the reference financial reporting standards, the APM used by

Exor may not be consistent and comparable with those used by other companies or groups. The APM used by Exor

have been consistently calculated and presented for all the reporting periods for which financial information is

presented in this Report.

It should also be noted that the principal subsidiaries and associates make use of alternative performance

measures to illustrate their performance to the market. Such indicators are commonly used by analysts and

investors in the sectors to which the subsidiaries belong to evaluate business performance. A description of how

such indicators are calculated is provided by the individual subsidiary companies and these are included in the

section Review of performance of the Operating Subsidiaries in the Board Report, as extracted from their

respective published documents. Such information is prepared autonomously by the companies and is not

homogeneous. Set out below are the main APM’s identified by Exor:

•Net Asset Value

•Net Financial Position

•Share of the (loss) profit of investments accounted for using the equity method.

Net Asset Value (NAV)

Definition and Methodology

Net Asset Value (NAV) corresponds to the total value of assets net of the Gross Debt and other liabilities of the

Holdings System as defined below.

To determine the value of an asset:

•Listed equity investments and other listed securities are valued at official market prices.

•Unlisted equity investments are valued on the basis of the valuation method that better reflects their most

recent fair value which can be either (i) a valuation determined annually by independent experts at the end

of the year, (ii) a valuation of a recent round or arms-length transaction or (iii) a valuation at cost if the

investment has been completed recently.

•Investments in funds or other investment vehicles are valued at NAV or Exor's share of the value reported

by the fund.

•Bonds held to maturity are valued at amortized cost and bonds held for trading are valued at market value.

•Treasury stock includes the shares held in treasury designated to service stock option plans (measured at

the option exercise price under the plan if this is less than the market price). Treasury stock does not

include the shares bought back under the share buyback program launched in November 2018 and

completed in November 2020. Starting from 31 December 2021, shares held in treasury and not allocated

to stock option plans are excluded from the NAV calculation.

The sum of the aforesaid values constitutes the total value of assets (Gross Asset Value or GAV). Gross Debt

corresponds to the total amount of the financial debt of the Holdings System and Other liabilities include liabilities

not included in the net financial position.

Items included in the calculation of Gross Asset Value and Gross Debt which are denominated in foreign currencies

are converted at the official exchange rates at the corresponding reporting date.

BOARD REPORT

Highlights

•At 31 December 2021 Exor’s NAV is €31,069 million compared to €24,041 million at 31 December 2020.

•At 31 December 2021 Exor’s NAV per share amounts to €132.41 compared to €102.08 at 31 December

2020, an increase of €30.33/share or 29.7%. This compares to an increase of 29.3% for the MSCI World

Index in Euro.

NAV per share is based on 234,645,891 shares at 31 December 2021 and 235,516,639 shares at 31 December

2020. At 31 December 2021, this is calculated based on 241,000,000 issued shares excluding (i) the 5,483,361

shares bought back in the context of the share buyback program launched in November 2018 and completed in

November 2020 and excluding (ii) the 870,748 shares held in treasury and not allocated to stock option plans.

Change in NAV per share compared to the MSCI World Index in Euro

BOARD REPORT

Gross Asset Value composition

The following chart illustrates the GAV composition at 31 December 2021 (€36,147 million), compared to

31 December 2020 (€28,151 million).

31 December 2021

31 December 2020

BOARD REPORT

Breakdown of Net Asset Value in Euro

Amount

Companies

34,314

26,941

7,373

27.4%

Ferrari

22.9%

Official market price

10,109

8,383

1,726

20.6%

PartnerRe(b)

100.0%

Fair value

8,109

6,723

1,386

20.6%

Stellantis

14.4%

Official market price

7,499

—

7,499

n.a.

FCA

—

Official market price

—

6,588

(6,588)

n.a.

CNH Industrial

26.9%

Official market price

6,300

3,789

2,511

66.3%

Juventus

63.8%

Official market price

556

691

(135)

(19.5)%

Other companies(c)

Fair value

1,741

767

974

127.0%

Others

1,833

1,210

623

51.5%

Seeds

Fair value

489

114

375

328.9%

Listed Securities(d)

Official market price

355

345

n.m.

Public funds(e)

Fair value

337

283

19.1%

Other assets(f)

Fair value

152

105.4%

Financial assets(g)

Official market price

100

37.0%

Alliances(h)

Fair value

—

n.a.

Cash and cash equivalents

283

492

(209)

(42.5%)

Treasury stock(i)

164

(69)

(42.1%)

Gross Asset Value

36,147

28,151

7,996

28.4%

Gross Debt

(4,307)

(4,110)

(197)

4.8%

Other liabilities(j)

(771)

—

(771)

n.a.

Net Asset Value (NAV)

31,069

24,041

7,028

29.2%

NAV per Share in Euro(k)

132.41

102.08

30.33

29.7%

€ million

Ownership % at

31 December 2021

Valuation methodology(a)

31/12/2021

31/12/2020

Change vs.

31 December 2020

(a)Listed equity investments and other securities are valued at official market prices; unlisted equity investments are valued at fair value, which can be either (i)

determined annually by an independent expert, (ii) based on a recent round or arms-length transaction or (iii) at cost if the investment has been completed

recently.

(b)At 31 December 2021 the fair value was aligned with the price under the terms of the definitive agreement signed with Covéa on 16 December 2021, equal to

$9 billion plus a price adjustment of around $328 million. At 31 December 2020 the fair value was determined by an independent expert.

(c)Other companies at 31 December 2021 include Christian Louboutin (€541 million), Via Transportation (€449 million), The Economist (€364 million), GEDI

(€202 million), Welltec (€101 million) and SHANG XIA (€84 million). Other companies at 31 December 2020 included The Economist (€280 million), GEDI

(€207 million), Via Transportation (€163 million), Shang Xia (€78 million) and Welltec (€39 million).

(d)Listed securities at 31 December 2021 include Faurecia (€320 million) among others.

(e)Until 31 December 2021, public funds were classified in the net financial position under the item cash, cash equivalents and financial assets. At

31 December 2021, following a management reassessment of these investments, they have been reclassified outside the net financial position. The previous

year has been restated accordingly. Public funds are managed by Exor Capital LLP mainly through a Luxembourg SICAV Fund.

(f)Other assets include minor investments and receivables among others. Not included in the net financial position.

(g)Assets included in the net financial position. These are investment-grade and high-yield bonds purchased by Exor.

(h)Alliances include the investment in NUO.

(i)At 31 December 2021 treasury stock includes shares held in treasury at the service of stock option plans, valued at the option strike price if less than market

price. At 31 December 2020 it included also 870,748 shares not allocated to stock option plans. Shares bought back in the context of the 2018-2020 program

are not included.

(j)Mainly related to the Tax claim settled on 18 February 2022.

(k)Based on 234,645,891 shares at 31 December 2021 and 235,516,639 shares at 31 December 2020.

BOARD REPORT

Reconciliation with the IFRS financial statements

The following table shows the reconciliation between the Net Asset Value (NAV) and the issued capital and

reserves attributable to owners of the parent.

€ million

31/12/2021

31/12/2020

Issued capital and reserves attributable to owners of the parent

16,759

13,090

Difference between the market value and the book value of the investments

14,215

10,785

Treasury stock and other

166

Net Asset Value (NAV)

31,069

24,041

The following table shows the difference between the market value and the book value of Investments:

31/12/2021

31/12/2020

€ million

Book value

Market value

Book value

Market value

Ferrari

533

10,109

452

8,383

PartnerRe

7,139

8,109

6,025

6,723

Stellantis(a)

8,624

7,499

—

FCA(a)

—

7,337

6,588

CNH Industrial

1,962

6,300

1,431

3,789

Juventus Football Club

194

556

691

Christian Louboutin(b)

562

541

—

Exor Seeds

489

156

114

The Economist Group

317

365

299

280

GEDI Gruppo Editoriale

171

202

207

Others(c)

1,432

1,468

356

353

Total

21,423

35,638

16,343

27,128

Difference

14,215

10,785

(a)On 16 January 2021, PSA merged with and into FCA. The surviving entity changed its name to Stellantis on 17 January 2021, which was the accounting

acquisition date for the business combination.

(b)The accounting acquisition date is 30 April 2021.

(c)Mainly includes investments in Welltec, NUO and Exor Capital LLP.

Net financial position of the Holdings System

The net financial position of the Holdings System, determined by applying the shortened consolidation criterion, is a

representative measure of the financial resources and commitments directly attributable to and managed by Exor.

Using the shortened consolidation criterion adopted by Exor, rather than the line-by-line method of consolidation

required by law and under IFRS, the data derived from the financial statements or accounting data prepared in

accordance with IFRS by Exor and by the subsidiaries constituting the Holdings System - Exor Nederland N.V. (the

Netherlands), Exor S.A. (Luxembourg), Exor Investments Limited (United Kingdom), Ancom USA Inc. (USA), Exor

SN LLC (USA) - are consolidated in the financial statements of the parent company Exor using the line-by-line

method, while the data derived from the financial statements or accounting data prepared in accordance with IFRS

of the operating subsidiaries and associates (Ferrari, Stellantis, PartnerRe, CNH Industrial, Juventus Football Club,

The Economist Group, GEDI Gruppo Editoriale, Exor Seeds, Shang Xia, Christian Louboutin, Welltec, NUO and

Exor Capital LLP (previously Exor Investment (UK) LLP), are included in the consolidated financial statements of

the parent company Exor using the equity method.

The presentation of financial data under the shortened consolidation method facilitates the analysis of the financial

position and results of Exor and it is generally recognized by the financial community, including financial

counterparties and rating agencies.

BOARD REPORT

Nevertheless, such data do not fully represent, nor should be treated as the consolidated financial position of the

Exor Group prepared in accordance with International Financial Reporting Standards (IFRS). In fact, the shortened

consolidation method is not contemplated in the reference accounting standards on the presentation of

consolidated financial statements and may not be consistent with the method adopted by other groups and,

therefore, such data may not be comparable with the data reported by such groups.

The consolidated data prepared in shortened form are not audited by the independent auditors.

Set out below are the data relating to the net financial position prepared in shortened consolidation form:

€ million

31/12/2021

31/12/2020

Financial assets and financial receivables

100

367

Cash and cash equivalents

283

492

Cash, cash equivalents and financial assets

383

859

Exor bonds

(4,069)

(3,855)

Bank debt

(150)

—

Commercial paper

—

(160)

Other financial liabilities

(88)

(95)

Gross debt

(4,307)

(4,110)

The reconciliation of the consolidated cash and cash equivalents of Exor Group with the consolidated cash and

cash equivalents of the Holdings System is as follows:

€ million

31/12/2021

31/12/2020

Cash and cash equivalents(a)

7,905

35,561

(Less) Cash and cash equivalents of the operating subsidiaries accounted for using the

equity method in the Holdings System

(7,622)

(35,069)

Financial assets and financial receivables

100

367

Cash, and cash equivalents and financial assets of the Holdings System

383

859

(a)GAAP measure. Data at 31 December 2020 included cash and cash equivalents of FCA (€23,846 million), deconsolidated at 16 January 2021 following the

merger with PSA occurred in 2021.

The reconciliation of the consolidated gross debt of Exor Group with the consolidated gross debt of the Holdings

System is as follows:

€ million

31/12/2021

31/12/2020

Gross debt(a)

(28,950)

(52,932)

(Less) Gross debt of the operating subsidiaries accounted for using the equity method in

the Holdings System

24,643

48,822

Gross debt of the Holdings System

(4,307)

(4,110)

(a)GAAP measure. Data at 31 December 2020 included gross debt of FCA (€21,750 million), deconsolidated at 16 January 2021 following the merger with PSA

occurred in 2021.

BOARD REPORT

Share of the profit (loss) of investments accounted for using the equity method

The composition of the share of the profit (loss) of investments accounted for using the equity method is as follows:

€ million

2021

2020

Change

Ferrari

201

146

PartnerRe

580

181

399

Stellantis(a)

1,905

—

1,905

FCA(b)

—

CNH Industrial

398

(176)

574

Juventus Football Club

(137)

(98)

(39)

Christian Louboutin

—

Exor Seeds

111

The Economist Group

(2)

GEDI Gruppo Editoriale

(31)

(11)

(20)

Other

(3)

Share of the profit (loss) of investments accounted for using the equity

method

3,088

2,987

(a)The result refers to the period 17 January to 31 December 2021.

(b)The result refers to the period 1 January to 16 January 2021.

The reconciliation of the share of the profit of investments accounted for using the equity method with the profit

(loss) attributable to owners of the parent is as follows:

€ million

2021

2020

Change

Profit (loss) attributable to owners the parent(a)

1,717

(30)

1,747

Less:

- Other losses (gains)

—

(31)

- Profit from investments at FVTOCI

(8)

—

(8)

- Net financial income/expenses

105

(48)

- Net recurring general expenses

—

- Net non-recurring other income/expenses(b)

514

(50)

564

- Income taxes and other taxes and duties

789

785

Share of the profit (loss) of investments accounted for using the equity

method

3,088

3,009

(a)GAAP measure.

(b)In the year 2021 includes €504 million arising from the deconsolidation of FCA, following the merger of PSA with and into FCA, in particular, €490 million relate

to the reversal to the income statement of Exor's share in the FCA items previously recognized in other comprehensive income reserve.

BOARD REPORT

REVIEW OF THE CONSOLIDATED RESULTS

OF THE EXOR GROUP – SHORTENED

This section includes the results of the Exor Group based on the “shortened” criterion of

consolidation.

According to this method, the Holdings System companies are consolidated line-by-line and the

operating subsidiaries and associates are consolidated using the equity method.

While the presentation of such data is not contemplated in the reference accounting standards, Exor

believes that this information facilitates the analysis of the results and the financial position of Exor

Group.

BOARD REPORT

REVIEW OF THE CONSOLIDATED RESULTS OF THE EXOR GROUP - SHORTENED

As described above in the APM section, Exor applies a shortened consolidation criterion to facilitate the analysis of

the financial position and results of Exor.

Using the shortened consolidation criterion, rather than the line-by-line method of consolidation required by law and

under IFRS, the data derived from the financial statements or accounting data prepared in accordance with IFRS

by Exor and by the companies constituting the Holdings System are consolidated in the financial statements of the

parent company Exor using the line-by-line method, while the data derived from the financial statements or

accounting data prepared in accordance with IFRS of the operating subsidiaries (Ferrari, PartnerRe,

CNH Industrial, Juventus Football Club, GEDI Gruppo Editoriale, Exor Seeds, Exor Capital - previously Exor

Investment (UK) - and Shang Xia) and associates (Stellantis, The Economist Group, Christian Louboutin, Welltec

and NUO) are included in the consolidated financial statements of the parent company Exor using the equity

method.

The consolidated data prepared in shortened form are not audited by the independent auditors.

Accounting for Stellantis and the deconsolidation of FCA

On 16 January 2021, PSA merged with and into FCA. By virtue of the merger, FCA issued 1,742 FCA common

shares for each outstanding PSA ordinary share and each PSA ordinary share ceased to exist. Each issued and

outstanding common share of FCA remained unchanged as one common share in FCA. The surviving entity

changed its name to Stellantis on 17 January 2021, which was the accounting acquisition date for the business

combination. Following the merger, Exor continues to hold 449,410,092 common shares of Stellantis,

corresponding to 14.4% of the outstanding capital.

In accordance with the above transaction Exor lost control over FCA and therefore derecognized the former FCA

Group net assets at 16 January 2021 and reclassified to the income statement, in the Net non-recurring other

income/(expenses) item, the amounts previously recognized in other comprehensive income related to the

subsidiary. Additional details are provided in Note 4.

At the date of completion of the merger Exor assessed to have significant influence on Stellantis and started

applying the equity method according to IAS 28. On initial recognition the investment was accounted for at cost,

equal to €6,660 million, attributed to Exor's share of Stellantis's net fair value as part of the purchase price

allocation process completed at 31 December 2021.

Accounting for Christian Louboutin

On 13 April 2021 Exor closed the transaction for the acquisition of the 24% interest in Christian Louboutin, for a

total consideration of €541 million.

At 31 December 2021, Christian Louboutin was accounted for using the equity method, in accordance with IAS 28,

on the basis of the consolidated financial information prepared in accordance with IFRS at that date, while the

income statement includes the share of the result for the period 1 May to 31 December 2021.

At 31 December 2021 the purchase price allocation process is completed.

BOARD REPORT

The following table shows the scope of consolidation under the shortened method:

Reporting

currency

% of consolidation

31/12/2021

31/12/2020

Holding Company

–EXOR N.V. (the Netherlands)

€

100

Companies in the Holdings System consolidated line-by-line

–Exor Nederland N.V. (the Netherlands)

100

–Exor S.A. (Luxembourg)

€

100

–Ancom USA Inc. (USA)

100

–Exor SN LLC (USA)

100

–Exor Investments Limited (United Kingdom)

100

Investments in operating subsidiaries and associates, accounted for

using the equity method

–Ferrari

€

24.17

24.05

–PartnerRe

100

–Stellantis(a)

€

14.35

—

–FCA(a)

€

—

28.54

–CNH Industrial

27.06

27.10

–Juventus Football Club

€

63.77

–Christian Louboutin(b)

€

24.03

—

–Exor Seeds

79.96

76.34

–The Economist Group

43.40

–GEDI Gruppo Editoriale

€

89.62

–Shang Xia

CNY

77.30

–Welltec

47.62

22.12

–NUO

€

50.00

—

–Exor Capital LLP(c)

100

99.67

(a)On 16 January 2021, PSA merged with and into FCA. The surviving entity changed its name to Stellantis on 17 January 2021, which was the accounting

acquisition date for the business combination.

(b)The accounting acquisition date is 30 April 2021.

(c)Previously Exor Investments (UK) LLP, in 2021 has become an independent operating company outside of the Holdings System.

The exchange rates used to translate foreign currencies into Euro are as follows:

2021

2020

Average

31/12

Average

31/12

U.S. dollar

1.183

1.133

1.142

1.227

British pound

0.860

0.840

0.890

0.899

Chinese Renminbi

7.628

7.195

7.875

8.023

Exor closed the year 2021 with a consolidated profit of €1,717 million; the year 2020 ended with a consolidated

loss of €30 million (mainly due to the negative impact of the COVID-19 pandemic on the overall performances of

the subsidiaries). The net change of €1,747 million is mainly attributable to the improvement of the performances of

the operating companies (€3,009 million), partially offset by the effect of the settlement reached by Exor with the

Italian Tax Authorities (“Agenzia delle Entrate”) for €744 million recognized in tax expenses (of which €101 million

as interest expense) and a non-recurring loss (€504 million) arising from the deconsolidation of FCA, following the

merger with PSA. Additional details are provided in Notes 1, 4 and 5.

BOARD REPORT

At 31 December 2021 the consolidated equity attributable to owners of the parent amounts to €16,759 million with

a net increase of €3,669 million, compared to €13,090 million at 31 December 2020. Additional details are provided

in Note 8.

The consolidated net financial position of the Holdings System at 31 December 2021 is a negative €3,924 million

and reflects a negative change of €673 million compared to the negative financial position of €3,251 million at

31 December 2020, mainly due to dividends received from investments (€1,208 million), more than offset by

investments (€1,335 million) and dividend distributed (€100 million). Additional details are provided in Note 9.

The shortened consolidated income statement and statement of financial position and notes on the most relevant

line items are presented below.

EXOR GROUP – Consolidated Income Statement – Shortened

€ million

Note

2021

2020

Change

Profit (loss) from investments in subsidiaries and associates:

Share of the profit (loss)

3,088

3,009

Other (losses) gains(a)

—

(31)

Dividends received

1,592

1,498

Dividends eliminated(b)

(1,592)

(94)

(1,498)

Profit (loss) from investments in subsidiaries and associates

3,088

3,040

Profit (loss) from investments at FVTOCI

—

Net financial (expenses) income:

Profit (loss) from cash, cash equivalents and financial

assets

Cost of debt(c)

(124)

(104)

(20)

Exchange (losses) gains, net

(7)

Net financial (expenses) income

(57)

(105)

Net recurring general expenses

(19)

—

Net non - recurring other income (expenses)

(514)

(564)

Income taxes and other taxes and duties

(789)

(4)

(785)

Profit (loss) attributable to owners of the parent

1,717

(30)

1,747

(a)Year 2020 included the impairment recognized on the goodwill of Welltec (-€49 million) and the badwill recognized on the acquisition of GEDI (+€18 million).

(b)Dividends from investments in subsidiaries and associates which are included in the share of the profit (loss) from investments in subsidiaries and associates

are eliminated in the consolidation process.

(c)Includes the one-off losses on partial bond cancellation (€21 million).

EXOR GROUP – Consolidated Statement of Financial Position – Shortened

€ million

Note

31/12/2021

31/12/2020

Change

Investments in subsidiaries and associates

20,159

16,099

4,060

Investments at FVTOCI

853

191

662

Investments at FVTPL(a)

350

—

350

Other asset (liabilities), net

(679)

(730)

Invested capital

20,683

16,341

4,342

Issued capital and reserves attributable to owners of the

parent

16,759

13,090

3,669

Cash, cash equivalents and financial assets

(383)

(859)

476

Gross debt

4,307

4,110

197

Equity and net financial position

20,683

16,341

4,342

(a)At 31 December 2021, the item includes the fair value of financial assets managed by Exor Capital LLP mainly through a Luxembourg SICAV Fund. At

31 December 2020, the item was included in cash, cash equivalents and financial assets.

BOARD REPORT

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - SHORTENED

1.Profit (loss) from investments in subsidiaries and associates

Share of the profit (loss) of investments accounted for using the equity method

The share of the results of investments accounted for using the equity method in the year 2021 is a profit of

€3,088 million, with an increase of €3,009 million compared to the loss of the year 2020 (79 million). The

positive change reflects in particular the strong performance of Stellantis (€1,905 million) and the improvements

of CNH Industrial (€574 million) and PartnerRe (€399 million).

Result(a)

Exor’s share(b)

€ million

2021

2020

2021

2020

Change

Ferrari

831

608

201

146

PartnerRe

587

177

580

181

399

Stellantis(c)

14,200

—

1,905

—

1,905

FCA(d)

—

CNH Industrial(e)

1,471

(656)

398

(176)

574

Juventus Football Club(f)

(215)

(153)

(137)

(98)

(39)

Christian Louboutin(g)

—

Exor Seeds(h)

184

111

The Economist Group(i)

(2)

GEDI Gruppo Editoriale(j)

(35)

(13)

(31)

(11)

(20)

Other(k)

—

(3)

Share of the profit (loss) of

investments in subsidiaries and

associates

3,088

3,009

(a)Results attributable to owners of the parent. Results reported in foreign currencies have been converted into Euro at the average exchange rate of the

year.

(b)Including consolidation adjustments.

(c)The result refers to the period 17 January – 31 December 2021.

(d)The result of the year 2021 refers to the period 1 January 2021 - 16 January 2021, before the merger with PSA occurred in 2021. The result of the year

2020 included impairment losses following the assessment of certain assets as a consequence of the COVID-19 pandemic for €1,447 million (total Exor's

share €413 million): in particular €549 million for deferred tax assets, €898 million for impairment charges of tangible and intangible assets.

(e)The result of the year 2020 includes impairment losses following the assessment of certain assets as a consequence of the COVID-19 pandemic for

€1,029 million (total Exor's share €279 million): in particular €504 million for goodwill impairment loss, €272 million for impairment charges of other assets

and €253 million for asset optimization charges.

(f)The result refers to the accounting data prepared for consolidation in Exor for the period 1 January – 31 December.

(g)The result refers to the period 1 May 2021 to 31 December 2021.

(h)The result is due to the evaluation at FVTPL of the underlying investment.

(i)The result refers to the period 1 October – 30 September.

(j)In the year 2020 the result referred to the period 1 May – 31 December, as Exor acquired control on 30 April 2020.

(k)Mainly include the share of the results of Welltec, Exor Capital LLP and Shang Xia.

For comments on the performance of the principal operating subsidiaries, please refer to the section “Review of

performance of the main companies”.

BOARD REPORT

Dividends

€ million

2021

2020

Change

Dividends from investments accounted for using the equity method:

–Ferrari

(11)

–PartnerRe

–Stellantis(a)

550

—

550

–FCA

827

—

827

–CNH Industrial

—

–Christian Louboutin

—

–The Economist Group

—

–Exor Capital

—

Dividends included in the net financial position

1,592

1,498

Less: Dividends included in the share of the (loss) profit of investments

accounted for using the equity method

(1,592)

(94)

(1,498)

Dividends included in the income statement

—

(a)Of which €363 million corresponding to 7,653,004 ordinary shares of Faurecia, distributed as a part of the merger of PSA with and into FCA.

2.Net financial (expenses) income

In the year 2021 net financial expenses amount to €57 million (net financial expenses of €105 million in the

year 2020).

€ million

2021

2020

Change

Profit (loss) from cash, cash equivalents, financial assets and

investments at FVTPL:

Unrealized gains (losses)(a)

Interest income on:

–bank current accounts and deposits

—

(1)

–debt securities

—

–financial receivables

—

Total

Cost of debt:

Bonds(b)

(121)

(101)

(20)

Bank debt

(3)

—

Total

(124)

(104)

(20)

Exchange gains (losses)

(7)

Net financial (expenses) income recorded in the income statement

(57)

(105)

(a)Mainly includes the change in fair value related to cash invested in financial assets managed by Exor Capital LLP through a Luxembourg SICAV Fund.

(b)Includes the one-off losses on partial bond cancellation (€21 million).

3.Net recurring general expenses

Net recurring general expenses in the year 2021 amount to €19 million, in line with the year 2020.

The main items are detailed below:

€ million

2021

2020

Change

Personnel costs

(6)

(7)

Compensation and other costs relating to directors

(2)

(1)

Service costs, net

(9)

(5)

(4)

Net recurring general expenses included in net financial position

(17)

(13)

(4)

Share based compensation plan costs

(2)

(6)

Net recurring general expenses recorded in the income statement

(19)

—

BOARD REPORT

4.Net non-recurring other (expenses) income

In the year 2021 net non-recurring expenses amount to €514 million of which €504 million arising from the

deconsolidation of FCA, following the merger of PSA with and into FCA. In particular €490 million relate to the

reversal to the income statement of Exor's share in the FCA items, previously recognized in other

comprehensive income reserve.

In the year 2020 net non-recurring other income (expenses) amounted to €50 million and mainly referred to a

one-off income (€63 million), partially offset by consulting fees related to investment and disinvestment projects

(€12 million) and contributions to cultural and charitable associations (€1 million).

5.Income taxes and other taxes and duties

In the year 2021 income taxes amount to €789 million and mainly includes the effect of a settlement reached on

18 February 2022 by Exor with the Italian Tax Authorities (“Agenzia delle Entrate”) on a complex tax issue,

specifically in respect of the Exit Tax and has paid €746 million, of which €104 million is represented by interest.

The issue is related to the Italian registered company Exor S.p.A. that in December 2016 merged with its Dutch

subsidiary Exor Holding N.V. to create today’s Exor domiciled fiscally in the Netherlands. At the time of this

cross-border merger, the exiting company Exor S.p.A. applied the Participation Exemption (PEX) regulations as

set out in Article 87 of the Italian Corporate Income Tax Act. Under this regime, 95% of any capital gains

relating to the value of its holdings was exempt and therefore excluded from the holding company’s taxable

income for the determination of the Exit Tax.

With a subsequent principle of law “Legal Principle 10/2021”, published on 11 May 2021, the Agenzia delle

Entrate contended that the PEX should not apply to cases in which a holding company transfers its fiscal

domicile abroad without maintaining a permanent establishment in Italy.

As a result of the subsequent principle of law published in 2021, a complex matter of interpretation on the

application of the PEX regulation back in 2016 has arisen. Exor remains convinced that it acted in accordance

with the rules. However, with the objective of avoiding the time and costs of a major tax dispute, it has decided

to enter into a settlement agreement with the Agenzia delle Entrate.

At 31 December 2021, the effect of this settlement is a recognition of a liability of €744 million, of which

€643 million of income taxes and €101 million of interest.

At the same time, Exor settled with the Agenzia delle Entrate a previous tax claim related to the treatment of

financial income in the fiscal year 2015, against which Exor had appealed and other minor formal matters. The

closing of the litigation generates income taxes of €32 million, interest of €3 million and an increase of tax

liability of €20 million.

There are no outstanding fiscal issues pending for Exor in respect of all the years in which it was tax resident in

Italy, the ordinary statutory terms for any assessment having also expired.

BOARD REPORT

6.Investments in subsidiaries and associates

€ million

31/12/2021

31/12/2020

Change

Ferrari

533

452

PartnerRe

7,139

6,025

1,114

Stellantis(a)

8,624

—

8,624

FCA(a)

—

7,337

(7,337)

CNH Industrial

1,962

1,431

531

Juventus Football Club

194

114

Christian Louboutin(b)

562

—

562

Exor Seeds

489

156

333

The Economist Group

317

299

GEDI Gruppo Editoriale

171

207

(36)

Shang Xia

(10)

Other(c)

100

Investments in subsidiaries and associates

20,159

16,099

4,060

(a)On 16 January 2021, PSA merged with and into FCA. The surviving entity changed its name to Stellantis on 17 January 2021, which was the accounting

acquisition date for the business combination.

(b)The acquisition date is 30 April 2021.

(c)Mainly includes investments in Welltec, NUO and Exor Capital LLP.

The positive change in Exor’s investment in Ferrari (€81 million) is primarily due to Exor’s share of the profit

(€201 million), partially offset by the payment of dividends (€39 million) and the buy-back of treasury stock

(€56 million).

The positive change in Exor’s investment in PartnerRe (€1,114 million) is mainly attributable to the positive

translation differences (€567 million) and Exor’s share of the profit (€580 million), partially offset by dividend

distributions (€90 million).

The positive change in Exor's investment in Stellantis (€1,964 million, from €6,660 million at 16 January 2021 to

€8,624 million at 31 December 2021) is mainly attributable to Exor's share of the profit (€1,905 million), to the

positive change in the remeasurement of defined benefit plans reserve (€252 million) and to the positive

translation differences (€304 million), partially offset by dividend distributions (€143 million) and distribution of

Faurecia (€406 million, of which €363 million as investment and €43 million as cash).

The positive change in Exor’s investment in CNH Industrial (€531 million) can be ascribed primarily to Exor’s

share of the positive result (€398 million), to the positive translation differences (€144 million), partially offset by

the payment of dividends (€41 million) and the negative movement on the fair value reserve (€32 million).

7.Investments measured at fair value through other comprehensive income

The investments measured at fair value through other comprehensive income amount to €853 million

(€191 million at 31 December 2020) and include principally investments in equity instruments.

€ million

31/12/2021

31/12/2020

Change

VIA Transportation(a)

449

163

286

Faurecia(b)

320

—

320

Other investments

Investments measured at fair value through other comprehensive

income

853

191

662

(a)Of which €158 million as increase in investment and €128 million as positive change in fair value.

(b)Distributed by Stellantis as part of the merger. On 22 March 2021 Exor received 7,653,004 Faurecia ordinary shares accounted for €363 million.

At 31 December 2021 the fair value adjustment is negative for €43 million.

BOARD REPORT

8.Issued capital and reserves attributable to owners of the parent

€ million

31/12/2021

31/12/2020

Change

Share capital

—

Reserves

17,055

13,386

3,669

Treasury stock

(298)

—

Issued capital and reserves attributable to owners of the parent

16,759

13,090

3,669

Details of changes during the year are as follows:

€ million

31/12/2021

31/12/2020

Initial amount

13,090

15,025

Movements attributable to Exor and the Holdings System:

–Buyback Exor treasury stock

—

(29)

–Dividend paid by Exor

(100)

–Fair value adjustment to investments and other financial assets

(13)

–Measurement derivative financial instruments

(5)

–Translation differences

427

(440)

–Other net

(9)

(44)

Movements attributable to operating companies accounted for using the equity method:

–Reversal OCI reserve of FCA to profit and loss

490

—

–Translation differences

737

(1,233)

–Remeasurement of defined benefit plans

363

(39)

–Fair value

(31)

–Buyback treasury stock

(56)

(32)

–Cash flow hedge

–Other net

(3)

Consolidated profit (loss) attributable to owners of the parent(a)

1,717

(30)

Net change during the year

3,669

(1,935)

Final amount

16,759

13,090

(a)The result of the year 2021 includes the negative impact due to the reclassification to the income statement of the amount previously recognized in other

comprehensive income (mainly translation differences) related to FCA (€490 million).

9.Net financial position of the Holdings System

The net financial position of the Holdings System at 31 December 2021 is a negative €3,924 million and shows

a negative change of €673 million compared to the balance at 31 December 2020 (a negative €3,251 million).

€ million

31/12/2021

31/12/2020

Change

Financial assets

100

367

(267)

Cash and cash equivalents

283

492

(209)

Cash, cash equivalents and financial assets

383

859

(476)

Exor bonds

(4,069)

(3,855)

(214)

Bank debt

(150)

—

(150)

Commercial paper

—

(160)

160

Other financial liabilities

(88)

(95)

Gross debt

(4,307)

(4,110)

(197)

Net financial position of the Holdings System

(3,924)

(3,251)

(673)

BOARD REPORT

Financial assets include principally financial instruments accounted for at FVTPL and debt securities listed on

an active market measured at amortized cost. Cash and cash equivalents include short-term deposits spread

over an appropriate number of counterparties chosen according to their creditworthiness and their reliability

since the primary objective is to hold investments which can readily be converted into cash.

Bonds issued by Exor and outstanding at 31 December 2021 are as follows:

Nominal

Balance at

Issue

Maturity

Issue

Fixed

amount

31/12/2021

31/12/2020

Change

date

price

Rate (%)

(million)

(€ million)

03-Dec-15

02-Dec-22

99.499

2.125

€602

(a)

(602)

(749)

147

08-Oct-14

08-Oct-24

100.090

2.500

€500

(b)

(503)

(653)

150

07-Dec-12

31-Jan-25

97.844

5.250

€100

(104)

—

22-Dec-15

22-Dec-25

100.779

(c)

2.875

€450

(c)

(451)

—

20-May-16

20-May-26

99.650

4.398

$170

(151)

(139)

(12)

18-Jan-18

18-Jan-28

98.520

1.750

€500

(502)

—

29-Apr-20

29-Apr-30

98.489

2.250

€500

(500)

(499)

(1)

19-Jan-21

19-Jan-31

99.089

0.875

€500

(498)

—

(498)

09-May-11

09-May-31

100.000

2.800

(d)

¥10,000

(77)

(80)

14-Oct-19

14-Oct-34

99.725

1.750

€500

(e)

(479)

(477)

(2)

15-Feb-18

15-Feb-38

98.183

3.125

€200

(202)

(201)

(1)

(4,069)

(3,855)

(214)

–Current portion

(640)

(35)

(605)

–Non-current portion

(3,429)

(3,820)

391

(a)After the repurchase settlement dated 20 January 2021; originally €750 million.

(b)After the repurchase settlement dated 20 January 2021; originally €650 million.

(c)Originally €250 million; the amount was increased by another €200 million on 10 May 2016. The issue price corresponds to the weighted average of the

prices calculated on the entire amount of €450 million.

(d)To protect against currency fluctuations, a hedging transaction was put in place using a cross currency swap. The cost in Euro is fixed at 6.012% per

year.

(e)Originally €300 million; the amount was increased by another €200 million with settlement date 23 June 2020.

Exor intends to repay the bonds in cash at maturity using available liquid resources and undrawn credit lines.

Exor may, from time to time, buy back bonds on the market also for purposes of their cancellation. Such

buybacks, if made, depend upon market conditions, Exor's financial situation and other factors which could

affect such decisions.

Other financial liabilities (€88 million) mainly includes the fair value of cash flow hedge derivative instruments

(€28 million) and put options on certain minority stakes in GEDI and Shang Xia (€23 million and €23 million,

respectively).

BOARD REPORT

The net change in the year 2021, a negative €673 million, can be analysed as follows:

€ million

31/12/2021

31/12/2020

Net financial position of the Holdings System - Initial amount

Note

(3,251)

(2,631)

Dividends received from investments

1,208

Investments(a)

(1,335)

(500)

Asset disposals

Dividends paid by Exor

(100)

Buyback Exor treasury stock

—

(29)

Reclassification of financial assets outside of the financial position (b)

(294)

—

Other changes

(164)

(124)

Net change during the year

(673)

(620)

Net financial position of the Holdings System - Final amount

(3,924)

(3,251)

(a)2021 includes the acquisition of the 24% of Christian Louboutin (€541 million), the increase of the investment in Via Transportation (€158 million), Exor

Seeds (€241 million), Juventus (€255 million), Welltec (€61 million) and other investments (€79 million). The year 2020 mainly included the acquisition of

the controlling stake in GEDI Gruppo Editoriale (€188 million), the acquisition of the stake in Via Transportation (€183 million) and the acquisition of the

77.3% of Shang Xia (€80 million).

(b)Until 31 December 2021, the financial assets managed by Exor Capital LLP mainly through a Luxembourg SICAV Funds were classified in the net

financial position under the item cash, cash equivalents and financial assets. At 31 December 2021, following a management reassessment of these

investments, they have been reclassified outside the net financial position.

€ million

2021

2020

1. Dividends received from investments

1,208

Ferrari

PartnerRe

Stellantis(b)

187

—

FCA(a)

827

—

CNH Industrial

—

The Economist Group

—

Other

—

2. Other changes

(164)

(124)

Net recurring general expenses

(17)

(13)

Net non - recurring other income (expenses)(c)

(10)

Net financial (expenses) income generated by the financial position(d)

(112)

(105)

Other net changes

(25)

(56)

(a)Extraordinary dividend resulting from the merger between PSA and FCA.

(b)Of which €144 million as cash dividend and €43 million as cash from the distribution of Faurecia. Excluding €363 million corresponding to 7,653,004

ordinary shares of Faurecia, distributed as a part of the merger of PSA with and into FCA.

(c)Excluding the items reclassified to income statement due to the deconsolidation of FCA.

(d)In 2021 related to: cost of debt (€124 million), net exchange gains (€7 million) and other financial income (€4 million). In 2020 related to: unrealized gains

on financial assets (€1 million), cost of debt (€104 million), net exchange losses (€7 million) and other financial income (€5 million).

At 31 December 2021 Exor has €150 million term loan with maturity 2024, available committed credit lines in

Euro of €385 million, of which €200 million expiring after 31 December 2022, as well as uncommitted credit

lines of €545 million. In 2021 Exor did not draw uncommitted credit lines.

Exor’s long-term and short-term debt ratings from Standard & Poor's are “BBB+” and “A-2” respectively, with a

"stable outlook".

BOARD REPORT

REVIEW OF THE PERFORMANCE

OF THE MAIN COMPANIES

(The share capital and voting rights percentages are based on data at 31 December 2021)

Set out below is a summary of the key highlights from the interim reports of the operating

subsidiaries and associates, including their Management Reports.

In order to facilitate the readers’ use and cross reference the data have been extracted from the

financial statements of the respective subsidiary and associate and presented using the original

reporting currency and accounting principles.

Therefore, data presented in this section may differ from those prepared for Exor consolidation

purposes.

Further information and details of significant events of subsidiaries are shown in the respective

companies’ reports.

BOARD REPORT

(24.17% stake and 34.54% of voting rights on issued capital)

Key consolidated data reported by Ferrari in the year 2021 are as follows:

Year

Change

€ million

2021

2020

Shipments (in units)

11,155

9,119

2,036

22%

Net revenues

4,271

3,460

811

23%

EBIT

1,075

716

359

50%

Net profit

833

609

224

37%

Net industrial debt(1)

297

543

(246)

—

(1)Defined as net debt less net debt of financial services activities.

COVID-19

The global spread of the COVID-19 virus, which was declared a global pandemic by the World Health Organization

in March 2020, has led to governments around the world mandating various restrictive measures to contain the

pandemic, including social distancing, quarantine, “shelter in place” or similar orders, travel restrictions and

suspension of non-essential business activities. To date, several of these measures are still in place or were

reintroduced at various points in time as a result of further “waves” of the pandemic, although the scope and timing

of restrictive measures have varied greatly across jurisdictions.

As the virus spread and the severity of the COVID-19 pandemic became apparent, Ferrari’s leadership took

actions to protect and support its employees and communities, mitigate the impacts on the Group’s financial

performance and strengthen the Group’s liquidity and financial position.

Ferrari’s leadership is continuously monitoring the evolution of the COVID-19 pandemic as new information

becomes available as well as the related effects on the results of operations and financial position of the Group.

Ferrari has been gradually recovering from the effects of the COVID-19-related suspension of production and other

business activities that occurred primarily in 2020. The effects of the pandemic on Ferrari in 2021 were limited and,

building on the otherwise strong performance in a year in which the Group exceeded its guidance on all metrics,

management looks to seize the opportunities ahead and share its future plans on 16 June 2022 in Maranello at the

Capital Markets Day.

The future impacts of COVID-19 on Ferrari’s results of operations and financial condition will depend on ongoing

developments in relation to the pandemic, including the success of the gradual release of containment measures

and vaccination programs worldwide, as well as the overall condition and outlook of the global economy.

Shipments

Shipments totalled 11,155 units in 2021, up 2,036 units or 22.3% versus the prior year.

Shipments increased by 2,036 cars, or 22.3 percent, driven by a 34.6 percent increase in shipments of our V8

models while shipments of our V12 models decreased by 16.1 percent, mainly due to the 812 Superfast, which

was phased out during 2021. In particular, the increase in shipments was driven by the F8 family, together with the

Ferrari Roma and the SF90 Stradale, which both reached global distribution in the second quarter of 2021, as well

as the ramp up of the Ferrari Portofino M and the SF90 Spider, partially offset by the Ferrari Portofino, the 488

Pista family and the 812 Superfast. Additionally, deliveries of the Ferrari Monza SP1 and SP2 increased in 2021

compared 2020, in line with planning, and the models are reaching the end of production. The positive mix impact

was driven by the SF90 family and the Ferrari Monza SP1 and SP2, as well as higher revenues from

personalizations.

BOARD REPORT

Year

Change

Units(1)

2021

2020

EMEA

5,492

4,818

674

14%

Americas

2,831

2,325

506

22%

Mainland China, Hong Kong and Taiwan

899

456

443

97%

Rest of APAC

1,933

1,520

413

27%

Shipments

11,155

9,119

2,036

22%

(1)Excluding the XX Programme, racing cars, Fuori Serie, one-off and pre-owned cars.

Net revenues

Net revenues for 2021 were €4,271 million, an increase of €811 million or 23.41% (an increase of 26.0% on a

constant currency basis), compared to €3,460 million in 2020. The increase was attributable to the combination of

€738 million increase in cars and spare parts, €38 million increase in engines, €41 million increase in sponsorship,

commercial and brand, partially offset by a €6 million decrease in other net revenues.

Net revenues generated from cars and spare parts were €3,573 million (up 26.0% or 28.8% at constant currency,

due to higher car volumes, positive mix and personalizations, partially offset by negative foreign currency

exchange impact. Shipments in 2020 were were impacted by the seven week production and delivery suspension

in the first half of the year caused by the COVID-19 pandemic.

Net revenues generated from Engines were €189 million for 2021,an increase of €38 million, or 25.7%, from

€151 million for 2020.The increase was mainly attributable to an increase in engines sold to Maserati and, to a

lesser extend, higher revenues from the rental of engines to other Formula 1 racing teams.

Net revenues generated from sponsorship, Formula 1 commercial agreements and brand management activities

were €431million for 2021, an increase of €41 million, or 10.4 percent, from €390 million for 2020. The increase

was primarily attributable to Formula 1 racing activities, driven by the more favourable Formula 1 calendar

compared to 2020, and brand-related activities, partially offset by a lower prior year Formula 1 ranking.

Year

Change

at current

at constant

€ million

2021

2020

amount

currency

Car and spare parts

3,573

2,835

738

26%

29%

Engines

189

151

26%

Sponsorship, commercial and brand

431

390

10%

13%

Other

(6)

(7)%

(5)%

Net revenues

4,271

3,460

811

23%

26%

EBIT

EBIT for 2021 was €1,075 million, an increase of €359 million, or 50.2 percent, from €716 million for 2020. As a

percentage of net revenues, EBIT increased from 20.7 percent in 2020 to 25.2 percent in 2021.

The increase in EBIT was primarily attributable to the combined effects of (i) positive volume impact of

€220 million, (ii) positive product mix impact of €212 million, (iii) an increase in research and development costs of

€61 million, (iv) an increase in selling, general and administrative costs of €12 million, (v) positive contribution of

€77 million driven by Formula 1 racing activities reflecting the more favourable Formula 1 calendar compared to

2020 as well as higher contribution from brand-related activities, Maserati engines and other supporting activities,

partially offset by a lower prior year Formula 1 ranking, and (vi) negative foreign currency exchange impact of

€77 million (including foreign currency hedging instruments) primarily driven by the strengthening of the Euro

compared to the U.S. Dollar and the Japanese Yen.

The positive mix impact was driven by the SF90 family, the Ferrari Monza SP1 and SP2, and personalizations,

partially offset by the ramp up of the Ferrari Roma and the Portofino M and reduced contribution of the 812

Superfast, which was phased out during 2021.

BOARD REPORT

Net industrial debt

Net industrial debt at 31 December 2021 was €297 million, compared to €543 million at 31 December 2020 with a

decrease of €246 million. During the year a total value of €231 million shares were repurchased and €162 million

were distributed in dividends, while lease liabilities per IFRS 16 were €56 million.

€ million

31/12/2021

31/12/2020

Change

Debt

(2,630)

(2,725)

of which: Lease liabilities as per IFRS 16 (simplified approach)

(56)

(62)

Cash and cash equivalents

1,344

1,362

(18)

Net debt

(1,286)

(1,363)

Net debt of financial services activities

(989)

(820)

(169)

Net industrial debt(1)

(297)

(543)

246

(1)Net industrial debt is defined as net debt excluding the net debt of financial services activities.

2022 Outlook

The year 2022 is subject to trading conditions unaffected by further COVID-19 pandemic restrictions and based on

the following assumptions:

–carefully leveraging strong demand;

–richer model mix being more than offset by the negative impact from the Ferrari Monza SP1 and SP2 phase

out;

–Ferrari Daytona SP3 and Ferrari Purosangue will commence production in 2022 with deliveries starting in

2023;

–Formula 1 revenues reflecting more diversified but lower sponsorship, partially offset by better prior year

ranking;

–increasing depreciation and amortization in line with the start of production of new models;

–industrial free cash flow generation sustained by Daytona SP3 advances collection;

–disciplined capital expenditures to fuel long term development.

Net revenues: ∼ € 4.8 billion

Adj. EBITDA: € 1.65-1.70 billion (34.5%-35.5%)

Adj. EBIT: € 1.10-1.15 billion (23%-24%)

Adj. Diluted EPS: € 4.55-4.75 per share(*)

Industrial Free Cash Flow: ≥ € 0.60 billion

(*) Calculated using the weighted average diluted number of common shares at 31 December 2021 (184,722 thousand).

BOARD REPORT

(100% interest in common shareholder’s equity and 99.8% of voting rights; through Exor Nederland N.V.)

Data presented and commented below are derived from PartnerRe’s consolidated financial information for the year

ended 31 December 2021 and 2020 prepared in accordance with US GAAP.

Year

$ million

2021

2020

Net premiums written

7,134

6,301

Non-life combined ratio(a)

90.5%

106.0%

Life and Health allocated underwriting result(b)

Net investment return

2.7%

4.6%

Other expenses

399

356

Net income attributable to PartnerRe common shareholders(c)

679

206

Net Income ROE(d)

9.7%

3.1%

(a)PartnerRe uses a combined ratio to measure results for the Non-life P&C and Specialty segments. The combined ratio is the sum of the technical and other

expense ratios.

(b)PartnerRe uses allocated underwriting result as a measure of underwriting performance for its Life and Health segment. This metric is defined as net

premiums earned, other income or loss and allocated net investment income less life policy benefits, acquisition costs and other expenses.

(c)Net income/loss attributable to PartnerRe common shareholders is defined as net income/loss attributable to PartnerRe less preferred dividends.

(d)Net income ROE is calculated as net income return on average common shareholders’ equity.

Net premiums written for 2021 increased to $7.1 billion compared to $6.3 billion in 2020. Non-life net premiums

written increased 14% for the full year 2021 compared to the same period of 2020. The current year included

favourable premium adjustments from prior underwriting years, compared to the prior year which included adverse

premium adjustments related to the economic downturn.

The Non-life underwriting profit was $507 million (combined ratio of 90.5%) for the full year 2021. This compares to

Non-life underwriting loss of $304 million (combined ratio of 106.0%) for the full year 2020. Large catastrophic

losses were $483 million for the full year 2021 and included losses for Hurricane Ida, Winter Storm Uri, the

European Floods, and related losses under aggregate covers, which adversely impacted the P&C and Specialty

combined ratios by 12.1 points and 3.3 points, respectively. This compared to large catastrophic losses of 6.5

points and 11.6 points on the P&C and Specialty combined ratios, respectively, for the full year 2020 from

COVID-19 and Hurricane Laura. There were no changes in PartnerRe's net non-life COVID-19 ultimate loss

estimates that were established in 2020.

The P&C segment reported a combined ratio 94.3% for the full year 2021, compared to 102.2% for the full year

2020. While large catastrophic losses increased across comparative periods, this was offset by an aggregation of

mid-size loss events during 2020. Excluding large catastrophic losses, the combined ratio improved in relation to

the comparative period as the current accident year attritional loss ratio benefited as a result of portfolio reshaping

in prior periods and rate increases.

The Specialty segment reported a combined ratio 83.1% for the full year 2021, compared to 112.2% for the full

year 2020. In addition to the decrease in large catastrophic losses, the improvement in the combined ratio was

driven by improvements in the current accident year attritional loss ratio resulting from strategic reductions in less

profitable lines and favourable prior years' reserve development, which was 6.9 points favourable for the full year

2021, primarily driven by financial risks and aviation lines. This compared to adverse prior years' reserve

development 7.2 points for the full year 2020.

The Life and Health allocated underwriting result was a profit of $97 million for the full year 2021, compared to a

profit $70 million for 2020. Losses on protection products due to COVID-19 increased by $10 million, with

$36 million for the full year 2021 compared to $26 million for the full year 2020. Excluding COVID-19, the increase

in allocated underwriting result was driven by improvement in the short-term protection business, which was

partially offset by a lower level of gains related to recaptures of business compared to the full year 2020.

BOARD REPORT

Net investment income increased $15 million, or 4.4%, for the full year 2021, compared to the same period of

2020, primarily due to the impact of re-allocations to investment grade corporate bonds, and higher reinvestment

rates driven by increases in worldwide risk-free rates in 2021.

Net realized and unrealized investment gains of $38 million for the full year 2021 included net realized and

unrealized investment losses of $539 million on fixed maturities and short-term investments, $277 million of net

realized and unrealized investment gains on equities and $300 million of net realized and unrealized gains on

other invested assets and investments in real estate. Losses on fixed maturities and short-term investments were

primarily unrealized and driven by increases in worldwide risk free rates and losses on real estate sector

investments in PartnerRe's Asia high yield portfolio, partially offset by narrowing credit spreads. Gains on equities

were also primarily unrealized, resulted from increases in worldwide equity markets and also included a large

realized gain on the sale of a preferred share investment in the fourth quarter of 2021. Gains on other invested

assets were primarily driven by unrealized gains on private equity investments.

For 2020, net realized and unrealized investment gains of $454 million included net realized and unrealized

investment gains of $245 million on fixed maturities and short-term investments, primarily due to decreases in

world-wide risk free rates and credit spreads, and $209 million of net realized and unrealized investment gains on

equities, investments in real estate and other invested assets. Interest in earnings of equity method investments of

$127 million for full year of 2021 primarily reflects the unrealized Almacantar gain recorded in the fourth quarter

and realized and unrealized gains on private equity funds and New York real estate funds.

Other Income Statement items

Other expenses of $399 million (expense ratio of 5.7%) for the full year 2021 increased $43 million compared to

$356 million (expense ratio of 5.4%) for 2020. The increase was driven primarily by increased personnel

expenses, including higher annual incentive and long term incentives due to the higher growth in book value

reported by PartnerRe in 2021.

Net foreign exchange losses were $31 million for the full year 2021 and driven by the appreciation of the U.S.

dollar against certain major currencies (primary the Euro, British Pound and Swiss Franc), while net foreign

exchange losses were $52 million for the full year 2020 were driven by the depreciation of the U.S. dollar against

the same currencies.

Interest expense was $56 million for the full year 2021, compared to $39 million for the same period of 2020. The

increase for the full year 2021 was driven by the issuance of $500 million 4.50% Fixed-Rate Reset Junior

Subordinated Notes due 2050 during the third quarter of 2020.

A preferred dividend of $23 million for the full year 2021, compared to $46 million for the same period of 2020. In

May 2021, PartnerRe fully redeemed its Series G, H and I preferred shares for a liquidation value of $637 million.

PartnerRe also incurred a loss on redemption of $21 million, related to the preferred share issuance costs that

were included in Additional paid-in-capital at issuance, and upon redemption were expensed, with no net impact to

Common shareholder's equity. Following the redemption, only Series J preferred shares remain.

Income tax expense was $38 million on pre-tax income of $762 million for the full year 2021 compared to a benefit

of $13 million on pre-tax income of $241 million in 2020. These amounts were primarily driven by the geographical

distribution of pre-tax profits and losses.

Balance sheet and capitalization

Total investments and cash and cash equivalents were $20.4 billion at 31 December 2021, up 1.4% compared to

31 December 2020. The increase was primarily driven by cash provided by operating activities of $1,233 million,

partially offset by cash used for the net redemptions of preferred shares with a liquidation value of $437 million,

common and preferred dividends paid of $130 million and net decreases in payables for securities purchased.

Cash and cash equivalents, fixed maturities, and short-term investments, which are government issued or

investment grade fixed income securities, were $14.5 billion at 31 December 2021, representing 71% of the total

investments and cash and cash equivalents.

The average credit rating of the fixed income portfolio was AA- at 31 December 2021. The expected average

duration of the public fixed income portfolio at 31 December 2021 was 4.0 years, while the average duration of

PartnerRe’s liabilities was 4.3 years.

Dividends declared and paid to common shareholders were $107 million for the full year 2021, compared to

$50 million for the full year 2020.

BOARD REPORT

Common shareholder's equity (or book value) of $7.3 billion and tangible book value of $6.8 billion at

31 December 2021 increased by 9.8% and 10.8%, respectively, compared to 31 December 2020, primarily due to

the comprehensive income for the full year 2021, partially offset by dividends on common and preferred shares.

Book value, excluding dividends on common shares for 2021, was up 11.4% compared to 31 December 2020.

Total capital was $9.4 billion at 31 December 2021, up 1.6% compared to 31 December 2020, primarily due to the

increase in book value described above and the issuance of the Series J Preferred Shares, partially offset by the

redemption of Series G, H and I preferred shares and a decrease in the U.S dollar value of PartnerRe's Euro

denominated debt, as the U.S dollar strengthened against the Euro during the year.

Dividend paid to Exor

In July 2021, PartnerRe declared and paid to EXOR Nederland N.V common share dividends of $107 million,

compared to $50 million for 2020.

Reconciliation of reported US GAAP financial information to IFRS financial information used for line-by-

line consolidation purposes

The differences between the US GAAP net income ($679 million) and the IFRS net income ($695 million) are

immaterial and related only to the economic effects of the application of the acquisition method by Exor to account

for the acquisition.

2022 Outlook

PartnerRe believes that overall, reinsurance will broadly remain a cyclical market, albeit of less amplitude, primarily

as a result of capital inflows and outflows, and that the cycles will become more specific and local, with less global

amplitude. The current macro condition with inflation, supply chain constraints and climate change concerns will

continue to keep pressure, both on primary and reinsurance rates for the foreseeable future.

The outlooks for 2022 for each of PartnerRe's segments are summarized as follows:

2022 P&C Segment Outlook

During the 1 January 2022 renewals, PartnerRe observed improving pricing trends, especially within casualty and

professional lines as well as in the property catastrophe business, particularly in the loss-affected accounts. In

spite of a competitive reinsurance market with adequate overall capacity, PartnerRe was able to maintain, and in

certain instances, grow its premium base at favourable rates.

2022 Specialty Segment Outlook

During the 1 January 2022 renewals, PartnerRe generally observed improved pricing, particularly in cyber and in

property classes, where market participants held firm on both loss-affected and non loss-affected accounts.

Incumbency and our ability to trade across multiple lines were key to achieving our signings.

2022 Life and Health Outlook

The 1 January 2022 renewal for life business is not significant, as only a limited portion of the premiums written

associated with the life portfolio is short-term business. Management expects continued growth in the PartnerRe’s

life portfolio in 2022 assuming constant foreign exchange rates, mainly due to growth in Asia, Canada, Europe and

the United States. Pricing conditions are not expected to materially differ from 2021.

BOARD REPORT

(14.4% stake, 14.4% of voting rights on issued capital)

The key consolidated data of Stellantis for the year 2021 are presented below:

Year

Change

€ million

2021

2020

amount

Net revenues

149,419

47,656

101,763

+214

Pro-forma1 Net revenues

152,119

133,882

18,237

+14

Pro-forma1 Adjusted operating income2

18,011

9,224

8,787

+95

Net profit (loss)

13,218

2,338

10,880

+465

Pro-forma1 Net profit (loss)

13,354

4,790

8,564

+179

(1)Full year 2021 Pro-forma results are presented as if the merger had occurred on 1 January 2020 and include results of FCA for the period 1 January –

16 January 2021. Year 2020 represents results of the continuing operations of PSA only and are not directly comparable to previously reported results of PSA

and reflect accounting policies and reporting classifications of Stellantis. Year 2020 Pro-forma results are presented as if the merger had occurred on

1 January 2020.

(2)Adjusted operating income is a non-GAAP financial measure used to measure performance. Adjusted operating income/(loss) excludes from Net profit/(loss)

from continuing operations adjustments comprising restructuring, impairments, asset write-offs, disposals of investments and unusual operating income/

(expense) that are considered rare or discrete events and are infrequent in nature, as inclusion of such items is not considered to be indicative of the

Stellantis's ongoing operating performance, and also excludes Net financial expenses/(income), Tax expense/(benefit) and Share of the profit of equity method

investees. For the year ended 31 December 2021, Pro Forma Adjusted operating income includes the Adjusted operating income of FCA for the period

1°January – 16 January 2021. For the year ended 31 December 2020, Pro Forma Adjusted operating income includes the Adjusted operating income result of

FCA for the period 1 January – 31 December 2020.

FCA - PSA merger

On 17 December 2019, FCA and PSA entered into a combination agreement providing for the combination of FCA

and PSA through a cross-border merger, with FCA as the surviving legal entity in the merger.

On 14 September 2020, FCA and PSA agreed to amend the combination agreement. According to the combination

agreement amendment, the FCA extraordinary dividend, to be paid to former FCA shareholders was reduced to

€2.9 billion, with PSA’s 46% stake in Faurecia planned to be distributed to all Stellantis shareholders promptly after

closing following approval of the Stellantis board and shareholders.

On 4 January 2021, PSA and FCA extraordinary general shareholder meetings approved the merger. Following the

respective shareholder approvals and receipt of the final regulatory clearances, FCA and PSA completed the legal

merger.

On 17 January 2021, the combined company was renamed Stellantis, the board of directors was appointed and

the Stellantis articles of association became effective. On this date, the Stellantis management and board of

directors collectively obtained the power and the ability to control the assets, liabilities and operations of both FCA

and PSA. As such, under IFRS 3 - Business Combinations (“IFRS 3”), 17 January 2021 is the acquisition date for

the business combination.

The merger was accounted for by Stellantis using the acquisition method of accounting in accordance with IFRS 3,

which requires the identification of the acquirer and the acquiree for accounting purposes. Based on the

assessment of the indicators under IFRS 3 and consideration of all pertinent facts and circumstances,

management determined that PSA is the acquirer for accounting purposes and as such, the merger has been

accounted for as a reverse acquisition. In identifying PSA as the acquiring entity, notwithstanding that the merger

was effected through an issuance of FCA shares, the most significant indicators were (i) the composition of the

combined group’s board, composed of eleven directors, six of whom were to be nominated by PSA, PSA

shareholders or PSA employees, or were current PSA executives, (ii) the combined group’s first CEO, who is

vested with the full authority to individually represent the combined group, and was the president of the PSA

Managing Board prior to the merger, and (iii) the payment of a premium by pre-merger shareholders of PSA.

BOARD REPORT

On 29 January 2021, the approximately €2.9 billion extraordinary distribution was paid to holders of FCA common

shares of record as of the close of business on Friday, 15 January 2021.

Pro-forma Net revenues and Pro-forma Adjusted operating income

Net revenues

Adjusted operating income

Year

2021

2020

€ million

2021

2020

69,736

60,633

North America

11,356

6,123

10,681

6,252

South America

882

156

59,060

56,480

Enlarged Europe

5,370

3,059

5,201

4,756

Middle East & Africa

545

300

3,980

3,200

China and India & Pacific

442

231

2,021

1,375

Maserati

103

(91)

1,440

1,186

Other activities, unallocated items and eliminations

(687)

(554)

152,119

133,882

Total

18,011

9,224

NORTH AMERICA

The increase in Pro-forma Net revenues in 2021 compared to 2020 was primarily due to favourable vehicle mix

and strong net pricing, partially offset by unfavourable translation differences.

The increase in Pro-forma Adjusted operating income in 2021 compared to 2020 was driven by higher net

revenues and purchasing and manufacturing efficiencies, partially offset by increased raw materials, logistics and

research and development costs.

SOUTH AMERICA

The increase in Pro-forma Net revenues in 2021 compared to 2020 was mainly driven by higher volumes and

strong net pricing, as well as favourable vehicle and market mix, partially offset by negative translation differences.

The increase in Pro-forma Adjusted operating income in 2021 compared to 2020 was driven by higher net

revenues, more than offsetting higher raw materials costs and unfavourable translation differences and transaction

effects.

ENLARGED EUROPE

The increase in Pro-forma Net revenues in 2021 compared to 2020 was mainly due to favourable vehicle mix,

primarily higher BEV and PHEV volumes, net pricing, as well as parts and services, partially offset by reduced new

and used vehicle volumes.

The increase in Pro-forma Adjusted operating income in 2021 compared to 2020 was driven by increased Net

revenues, purchasing and manufacturing efficiencies, as well as reduced compliance costs, more than offsetting

higher raw materials costs.

MIDDLE EAST & AFRICA

The increase in Pro Forma Net revenues in 2021 compared to 2020 was mainly driven by higher net pricing,

including pricing actions for Turkish lira devaluation, and increased volumes, partially offset by negative translation

differences, mainly from Turkish lira.

The increase in Pro Forma Adjusted operating income in 2021 compared to 2020 reflects higher Net revenues,

partially offset by negative translation differences.

CHINA AND INDIA & PACIFIC

The increase in Pro Forma Net revenues in 2021 compared to 2020 was primarily due to overall higher volumes

and favourable market mix and net pricing.

The increase in Pro-forma Adjusted operating income in 2021 compared to 2020 was mainly driven by favourable

net pricing, volumes and vehicle mix, primarily related to Jeep Wrangler and Ram 1500, partially offset by

increased product costs.

BOARD REPORT

MASERATI

The increase in Pro-forma Net revenues in 2021 compared to 2020 was primarily due to higher volumes,

favourable market mix, mainly in China, and improved net pricing.

The increase in Pro-forma Adjusted operating income in 2021 compared to 2020 was mainly due to higher

volumes and net pricing, driven by launch of refreshed line-up, favourable market mix, particularly in China, and

improved residual values, partially offset by negative foreign exchange transaction effects.

The following table is the reconciliation of Net profit to Pro-forma Adjusted operating income (non-GAAP measure).

Year

€ million

2021

2020

Net profit from continuing operations

13,218

2,338

Tax expense

1,911

504

Net financial expenses

734

Share of the profit of equity method investees

(737)

Operating income

15,126

3,010

FCA operating income 1 January -16 January 2021

FCA operating income 1 January - 31 December 2020

—

2,165

Pro-forma adjustments

2,261

Pro-forma operating income

15,299

7,436

Adjustments:

Restructuring and other costs, net of reversal1

873

490

Change in estimate of non-contractual warranties2

732

—

Reversal of inventory fair value adjustment in purchase accounting3

522

—

Impairment expense and supplier obligations4

309

1,129

Provision fro U.S. investigation matters5

222

Loss/(Gains) on disposal of investments

—

(178)

Brazilian indirect tax - reversal of liability/recognition of credits6

(253)

—

Other7

529

125

Total adjustments

2,712

1,788

Pro-forma Adjusted operating income

18,011

9,224

(1)Restructuring and other costs related to reorganization of operations and dealer network, primarily in Enlarged Europe.

(2)Change in estimate for warranty costs incurred after the contractual warranty period.

(3)Reversal of fair value adjustment recognized in purchase accounting on FCA inventories.

(4)Primarily related to certain vehicle platforms in Enlarged Europe.

(5)Provision recognized for estimated probable losses to settle matters under investigation by the U.S. Department of Justice, primarily related to criminal

investigations associated with U.S. diesel emissions matters.

(6)Benefit related to final decision of Brazilian Supreme Court on calculation of state value added tax.

(7)Includes other costs primarily related to merger and integration activities.

BOARD REPORT

Cash flows from operating activities to Pro-forma Industrial free cash flows

(€ million)

Year 2021

Cash flows from operating activities

18,646

Less: Cash flows from operating activities – discontinued operations

—

Cash flows operating activities – continuing operations

18,646

Less: operating activities not attributable to industrial activities

276

Less: capital expenditures and capitalized research and development expenditures and change in amounts

payable on property, plant and equipment and intangible assets for industrial activities

10,081

Add: proceeds from disposal of assets and other changes in investing activities

327

Less: contributions of equity to joint ventures and minor acquisitions of consolidated subsidiaries and equity

method investments

811

Add: net intercompany payments between continuing operations and discontinued operations

—

Add: defined benefit pension contribution, net of tax

Industrial free cash flows

7,885

Add: FCA Industrial free cash flows 1 January - 16 January 2021

(1,813)

Pro-forma Industrial free cash flows

6,072

Aggregated Industrial free cash flows Year 2020

(€ million)

Year 2020

PSA Automotive free cash flows

2,660

FCA Industrial free cash flows

624

Aggregated Industrial free cash flows(1)

3,284

(1)The aggregated Industrial free cash flows for 2020 is the simple aggregation of FCA and PSA (excluding Faurecia) and does not reflect purchase accounting

adjustments required by IFRS.

2022 Outlook

2022 Industry Outlook: North America +3%; South America +3%; Enlarged Europe +3%; Middle East & Africa

+Stable; India & Asia Pacific +5%; China Stable.

2022 Guidance: Adjusted operating income margin(1) of Double-Digit. Industrial Free Cash Flows(2) Positive.

Assumes economic and COVID-19 conditions remain substantially unchanged.

(1)Guidance includes impacts from purchase accounting and changes in accounting policies as required by IFRS in connection with the Merger. Guidance refers

to sections - non-GAAP Financial Measures and Pro-forma, which include results of FCA for the period 1 January – 16 January 2021.

(2)Industrial free cash flows is calculated as Cash flows from operating activities less: cash flows from operating activities from discontinued operations; cash

flows from operating activities related to financial services, net of eliminations; investments in property, plant and equipment and intangible assets for industrial

activities; contributions of equity to joint ventures and minor acquisitions of consolidated subsidiaries and equity method investments; adjusted for: net

intercompany payments between continuing operations and discontinued operations; proceeds from disposal of assets and contributions to defined benefit

pension plans, net of tax. For the year ended 31 December 2021, Pro Forma Industrial free cash flows includes the Industrial free cash flows of FCA for the

period 1 January – 16 January 2021. The timing of Industrial free cash flows may be affected by the timing of monetization of receivables and the payment of

accounts payables, as well as changes in other components of working capital, which can vary from period to period due to, among other things, cash

management initiatives and other factors, some of which may be outside of the Company’s control.

BOARD REPORT

(27.06% stake, 41.68% of voting rights on issued capital)

Iveco Group Business Spin-off and Discontinued Operations

Until 31 December 2021, CNH Industrial N.V. owned and controlled the Off-Highway business (the Agriculture

business, the Construction business, and the related Financial Services business) and On-Highway business (the

Commercial and Specialty Vehicles business, the Powertrain business, and the related Financial Services

business, together the “Iveco Group business” or "Iveco Group").

Effective 1 January 2022, the Iveco Group business was separated from CNH Industrial N.V. in accordance with

Section 2:334a (3) of the Dutch Civil Code by way of a legal statutory demerger to Iveco Group N.V. (the

"Demerger").

On 3 January 2022, Iveco Group N.V. common shares began trading on the regulated market Euronext Milan,

under the ticker symbol "IVG". As a result of the Demerger, each holder of CNH Industrial N.V. common shares

(and special voting shares as the case may be) received one Iveco Group N.V. share for every five CNH Industrial

N.V. common shares (or special voting share as the case may be) held at close of business on the record date for

allocation (4 January 2022). Since 3 January 2022, CNH Industrial N.V. and Iveco Group N.V. have been quoted

separately on the regulated markets and operate as independent listed companies, each with its own management

and Board of Directors.

As the transaction took effect on 1 January 2022, the consolidated financial statements for the year ended

31 December 2021 relate to CNH Industrial Pre-Demerger.

Additionally, as the Demerger is a "business combination involving entities or businesses under common control",

it is outside the scope of application of IFRS 3 – Business Combinations and IFRIC 17 – Distributions of Non-cash

Assets to Owners. Accordingly, in the 2022 consolidated financial statements for CNH Industrial Post-Demerger

and Iveco Group, the opening position for items in the statement of financial position will be equivalent to the

carrying amounts reported in the consolidated financial statements of CNH Industrial Pre-Demerger.

Key consolidated figures for both groups, for the year 2021 are as follows:

2021

2020

Change

$ million

Off

Highway

CNH

Industrial

Pre-

Demerger

Off

Highway

CNH

Industrial

Pre-

Demerger

Total

Revenues1

19,474

14,963

34,437

14,696

11,892

26,588

7,849

Revenues in €2

n.a.

28,309

n.a.

22,749

5,560

Adjusted EBIT of

Industrial Activities3

1,729

357

2,086

517

(101)

416

1,670

Net (loss) income

1,686

1,777

(270)

(425)

(695)

2,472

of which attributable

to owners of the

parent

1,677

1,740

(284)

(466)

(750)

2,490

(1)Revenues of CNH Industrial Pre-Demerger before the eliminations ($956 million in 2021 and $604 million in 2020).

(2)Revenues of CNH Industrial Pre-Demerger net of eliminations .

(3)Adjusted EBIT of Industrial Activities is a non-GAAP financial measure used to measure performance. Adjusted EBIT of Industrial Activities is defined as profit/

(loss) before taxes, financial services results, industrial activities financial expenses, restructuring costs and certain non- recurring items. In particular, non-

recurring items are specifically disclosed items that management considers rare or discrete events that are infrequent in nature and not reflective of on-going

operational activities.Adjusted EBIT is a non-GAAP financial measure used to measure performance. Adjusted EBIT is defined as profit/(loss) before taxes,

financial services results, industrial activities financial expenses, restructuring costs and certain non- recurring items.

BOARD REPORT

COVID 19 Effects and Actions

The COVID-19 pandemic and the related actions of governments and other authorities to contain COVID-19

spread continue to affect CNH Industrial’s business, results and cash flow. Governments in many countries where

CNH Industrial operates, designated part of our businesses as essential critical infrastructure businesses. This

designation allows CNH Industrial to operate in support of its dealers and customers to the extent possible. CNH

Industrial also continues to prioritize the health, safety and well-being of its employees.

The Company remains cautious about future impacts on CNH Industrial's end-markets and business operations of

restrictions on social interactions and business operations to limit the resurgence of the pandemic. CNH Industrial

is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, its employees and the

Company's results of operations, financial condition and cash flows.

Global Supply Chain Disruptions

On 13 October 2021, CNH Industrial announced the temporary closure of several of its European agricultural,

commercial vehicle and powertrain manufacturing facilities in response to ongoing disruptions to the procurement

environment and shortages of core components, especially semiconductors. The global supply chain still shows

increasing input costs and logistics pressures, with ongoing disruptions to the procurement environment forcing

repeated reviews of production schedules. Global supply chain represented the main challenge for the operations

in the year, with multiple bottlenecks resulting in increased raw material prices, intermittent subcomponent

availability, notably for semiconductors, and increased transportation costs.

Revenues

Consolidated net revenues for 2021 were $33,481 million, an increase of 28.9% (up 27.3% on a constant currency

basis) compared to 2020. This increase is primarily due to an increase of 30.6% (up 28.9% on a constant currency

basis) compared to the prior year in net revenues of Industrial Activities due to continued strong industry demand

and positive price realization.

The following discussion provides a breakdown for Off-Highway and On-Highway businesses.

Off Highway – CNH Industrial excluding Iveco Group

In 2021, net revenues of CNH Industrial excluding Iveco Group were $19,474 million, up 32.5% compared to 2020

(up 31.6% on a constant currency basis). The net sales of Industrial Activities of Continuing Operations were

$17,835 million, up 36.4% (35.4% on a constant currency basis) compared to 2020. The increase was due to

higher industry demand, favourable price realization and lower destocking compared to the previous year.

Net revenues for Agriculture were $14,754 million in 2021, up 35.2% (34.2% on a constant currency basis), mainly

due to higher industry demand, better mix, favourable price realization and lower destocking compared to 2020.

For 2021, worldwide industry unit sales for tractors increased 14% compared to 2020, while worldwide industry

sales for combines were up 19% compared to 2020. In North America, industry volumes in the over 140 hp tractor

market sector were up 23% and combines were up 25%. Industry volumes for under 140 hp tractors were up 10%.

European markets were up 16% and 17% for tractors and combines, respectively. In South America, tractor

industry volumes increased 22% and combine industry volumes increased 19%. Rest of World markets increased

15% for tractors and 19% for combines.

Net revenues for Construction were $3,081 million in 2021, up 42% compared to 2020 (up 40.9% on a constant

currency basis), driven by favourable price realization, higher demand, and lower destocking by dealers and

distributors.

In 2021, global demand for construction equipment was up 14% compared to 2020, with Heavy sub-segment up

16% and Light sub-segment up 13%. Demand increased 23% in North America, 19% in Europe, 87% in South

America, and 6% in Rest of World.

Financial Services reported net revenues of $1,664 million in 2021, up 1.2% compared to 2020 (up 0.9% on a

constant currency basis), primarily due to higher used equipment sales and higher average portfolios in Europe,

South America and Rest of Word, partially offset by lower average portfolio in North America due to a reduction in

wholesale financing.

BOARD REPORT

On Highway – Iveco Group

The consolidated net revenues of the Iveco Group were $14,963 million, an increase of 25.8% (up 22.8% on a

constant currency basis) compared to 2020. The net sales of the Industrial Activities of Iveco Group were

$14,808 million, an increase of 25.7% compared to the prior year (up 22.7% on a constant currency basis), due to

higher volumes and positive price realization.

Commercial and Specialty Vehicles' net revenues were $12,204 million in 2021, up 29.6% compared to 2020 (up

27.3% on a constant currency basis), primarily driven by higher truck volumes and positive price realization.

In 2021, the European truck market (GVW ≥3.5 tons), excluding U.K. and Ireland, increased by 11% compared to

2020. The LCV market increased 8%, and the M&H truck market increased by 19%. In South America, new truck

registrations (GVW ≥3.5 tons) increased 39% compared to 2020, with an increase of 39% and 42% in Brazil and in

Argentina, respectively. In Rest of World, new truck registrations increased 18% compared with 2020.

CNH Industrial’s estimated market share in the European truck market (GVW ≥3.5 tons), excluding U.K. and

Ireland, was 11.8%, up 1.2 percentage points ("p.p.") compared with 2020. The European market share increased

1.9 p.p. to 13.2% in LCV and increased 0.1 p.p. to 8.9% in M&H segment. In South America, in 2021, CNH

Industrial’s market share increased 0.8 p.p. to 10.5%.

During 2021, Commercial and Specialty Vehicles delivered approximately 161,178 vehicles (including buses and

specialty vehicles), representing a 36% increase from 2020. Volumes were 40% higher in LCV and 43% higher in

M&H truck segments. Commercial and Specialty Vehicles’ deliveries increased 33%, 73% and 26% in Europe,

South America and Rest of World, respectively.

In 2021, Commercial and Specialty Vehicles' ratio of truck orders received to units shipped and billed, or book-to-

bill ratio, for the European truck market was 1.57, an increase of 32% compared to 2020. In 2021, truck order

intake in Europe increased 81% compared to previous year.

Powertrain net revenues were $4,435 million in 2021, an increase of 22.1% (up 19.4% on a constant currency

basis) compared to 2020, mainly due to higher volumes. Sales to external customers accounted for 41% of total

net revenues (52% in 2020).

During 2021, Powertrain sold approximately 538,300 engines, an increase of 12% compared to 2020. In terms of

customers, 32% of engines were supplied to Commercial and Specialty Vehicles, 17% to Agriculture, 6% to

Construction and the remaining 45% to external customers (units sold to third parties were down 16% compared to

2020). Additionally, Powertrain delivered approximately 67,900 transmissions and 192,500 axles, an increase of

36% and 38%, respectively, compared to 2020.

Financial Services reported net revenues of $230 million in 2021, up 22.3% compared to 2020 (up 18.4% on a

constant currency basis), due to higher volumes from financing activities.

Year

$ million

2021

2020

% change

Off Highway - CNH Industrial excluding Iveco Group

Agriculture

14,754

10,916

35.2

Construction

3,081

2,170

42.0

Financial Services

1,664

1,644

1.2

Elimination and other

(25)

(34)

n.s.

Total CNH Industrial excluding Iveco Group

19,474

14,696

32.5

On Highway - Iveco Group

Commercial and Specialty Vehicles

12,204

9,420

29.6

Powertrain

4,435

3,633

22.1

Financial Services

230

188

22.3

Eliminations and other

(1,906)

(1,349)

n.s.

Total Iveco Group

14,963

11,892

25.8

Elimination Off Highway - On Highway

(956)

(604)

n.s.

Total Revenues

33,481

25,984

28.9

BOARD REPORT

Adjusted EBIT of Industrial Activities

Adjusted EBIT of Industrial Activities was $2,086 million ($416 million in 2020), with an adjusted EBIT margin of

6.6%. The increase in adjusted EBIT was primarily attributable to all segments being up year over year.

Off Highway – CNH Industrial excluding Iveco Group

Adjusted EBIT of Industrial Activities of CNH Industrial excluding Iveco Group was $1,729 million, a $1,212 million

increase compared to 2020. The improvement was driven by higher volume, favourable mix and positive price

realization, partially offset by higher raw material and freight costs, and higher variable compensation.

Adjusted EBIT of Agriculture was $1,794 million in 2021, compared to $856 million in 2020. The $938 million

increase was driven by higher volumes, favourable mix and price realization in all regions, partially offset by higher

raw material and freight costs, higher SG&A costs driven by higher variable compensation. R&D spend returning to

more normal levels from the low levels experienced in the previous year. Adjusted EBIT margin increased 440 bps

to 12.2%.

Adjusted EBIT of Construction $83 million in 2021 (up $276 million compared to 2020). The improvement was due

to positive price realization and favourable volumes and mix, partially offset by higher production costs related to

raw material and freight

On Highway – IVECO Group

Adjusted EBIT of Industrial Activities of Iveco Group was $357 million (€101 million loss in 2020). The improvement

was driven by higher volume and positive price realization, partially offset by higher raw material costs, freight

costs, and rework costs due to components shortages.

Adjusted EBIT of Commercial and Specialty Vehicles was $300 million in 2021 (an increase of $469 million

compared to 2020). The improvement was driven by higher volumes and positive price realization, partially offset

by increased raw material costs, freight costs, and rework costs due to components shortages. SG&A costs

increase was driven by higher variable compensation. R&D spending returned to more normal levels from the lows

of the prior year. Adjusted EBIT margin was 2.5%.

Adjusted EBIT of Powertrain was $246 million in 2021, a $23 million increase compared to 2020, mainly due to

favourable volume and mix in the first half of the year, almost offset by unfavourable raw material costs, higher

freight costs due to logistics constraints, higher SG&A costs and lower absorption of fixed cost in the second half of

the year due to certain third-party sales discontinuation. R&D spending returned to a pre-pandemic level. Adjusted

EBIT margin was 5.5%, in 2021.

Year

$ million

2021

2020

% change

Off Highway - CNH Industrial excluding Iveco Group

Agriculture

1,794

856

109.6

Construction

(193)

-143.0

Elimination and other

(148)

(146)

n.s.

Total Adjusted EBIT of Industrial Activities excluding Iveco Group

1,729

517

234.4

On Highway - IVECO Group

Commercial and Specialty Vehicles

300

(169)

-277.5

Powertrain

246

223

10.3

Eliminations and other

(189)

(155)

n.s.

Total Adjusted EBIT of Industrial Activities IVECO Group

357

(101)

(453.5)

Total Adjusted EBIT of Industrial Activities CNH Industrial Pre -

Demerger

2,086

416

401.4

BOARD REPORT

Off Highway – CNH Industrial excluding Iveco Group

2022 Outlook (US GAAP)

CNH Industrial manages its operations, assesses its performance and makes decision about allocation of

resources based on financial results prepared only in accordance with U.S. GAAP, and, accordingly, also the full

year guidance presented below is prepared under U.S. GAAP.

CNH Industrial is providing the following 2022 outlook for its Industrial Activities:

–Net sales(*) to grow 10% to 14% including currency translation effects;

–SG&A expenses lower or equal to 7.5% of net sales;

–Free Cash Flow in excess of $1 billion;

–R&D Expenses and Capital expenditures up at around $1.4 billion from around $1.0 billion in 2021.

On Highway – Iveco Group

2022 Outlook (IFRS)

Iveco Group’s preliminary 2022 expectations are as follows:

–Net revenues of Industrial Activities to increase up to 5%;

–SG&A of Industrial Activities as a percentage of Net revenues to remain around 6.5%;

–Net cash of Industrial Activities equal or above 31 December 2021 amount.

This outlook doesn’t reflect possible consequences and impacts deriving from the global geopolitical scenario

determined by the Ukraine-Russia crisis.

(*) Net sales reflecting the exchange rate of 1.20 EUR/USD

BOARD REPORT

(63.77% of share capital)

The following information refers to the first half of 2021/2022 of Juventus F.C.

I Half

€ million

2021/2022

2020/2021

Change

Revenues

223

258

(35)

Operating costs

(242)

(263)

Operating result

(111)

(105)

(6)

Loss for the period

(119)

(114)

(5)

€ million

31/12/2021

30/06/2021

Change

Shareholders' equity

303

275

Net financial debt

389

(310)

For a correct interpretation of the data, it should be noted that the financial year of Juventus does not coincide with the calendar year, but covers the period 1 July –

30 June, which corresponds to the football season. The accounting data under examination (6 months) thus represents the first half of operations for the financial

year 2021/2022.

On the other hand, the financial data prepared only for Exor consolidated reporting purposes covers the period of 12 months (the second half of the financial year

2020/2021 and the first half of the financial year 2021/2022) and cannot be construed as representing the basis for a Juventus 2021/2022 full-year projection.

Result performance is characterized by the highly seasonal nature typical of the sector, determined mainly by the calendar of football events and the two phases of

the players’ Transfer Campaign.

The financial position and cash flows are also affected by the seasonal nature of the income components; in addition, some revenue items are collected in a period

different from the period to which they refer.

For a correct interpretation of the data, it should be noted that the continuing health emergency related to the

COVID-19 pandemic and the consequent measures imposed by the Authorities have significantly penalised - as

for all companies in the sector - both the results of the first half of the 2021/2022 financial year and those of the

previous year. The pandemic mainly affected - directly and indirectly - match revenues, revenues from product

sales and revenues from players' rights management, with an inevitable negative impact of both economic and

financial nature.

The Group's economic trend is characterised by a strong seasonal nature, typical of the business sector,

determined essentially by participation in sports competitions, the calendar of sports events and the players'

Transfer Campaign.

The first half of the 2021/2022 financial year closed with a consolidated loss of €119 million, a moderate increase

compared to the loss of €114 million in the first half of the previous financial year, due to lower revenues for

€35 million, mainly related to lower income from television and radio rights (€39 million); in the first half of the

previous year, this item benefited also from the higher number of Serie A and UEFA Champions League matches

played in the period. The negative effect mentioned above was partially offset by higher match revenues, an

increase of €8 million thanks to the partial reopening of the stadium, and lower operating costs for €21 million.

The increase in net equity is due to the completion of the capital increase transaction (€394 million, net of related

costs), partially offset by the result of the period.

The decrease in net financial debt (€310 million) is linked to the capital increase (€394 million), whose effects were

partially compensated by negative cash flows from operation (-€28 million), payment related to the Transfer

Campaign (-€48 million), investment in other fixed assets (-€1 million) and cash flows from financing activities

(-€7 million).

BOARD REPORT

Audit by Consob

By letter dated 12 July 2021, Consob (Italian Supervising Authority) initiated an inspection of Juventus pursuant to

Article 115, paragraph 1, letter c) of Legislative Decree no. 58/1998 concerning the acquisition of documentation

and information relating to the item "Income from players' registration rights" recorded in the financial statements at

30 June 2020 and 30 June 2021.

Juventus responded to the Authority's requests and provided due and full cooperation during the aforementioned

audits. At present, the Company has not received any notice of the initiation of proceedings by the said Authority.

Requests for information from sports Authorities

In a letter dated 4 October 2021, Co.Vi.So.C. (an Italian sport Authority), on the basis of press reports, requested

Juventus to provide information about the requests for inquiries regarding the separate and consolidated financial

statements of Juventus received in 2021 from inspection bodies and, in particular, information about the expected

response time and the elements of assessment regarding the facts subject to the said requests for inquiries;

subsequently, in a letter dated 29 November 2021, Co.Vi.So.C. requested Juventus to provide further information,

in particular with regard to the news published in the press concerning the criminal proceedings described in the

following section.

On 24 November 2021, the Procura Federale (Federal Prosecutor's Office) of the F.I.G.C. (Federazione Italiana

Giuoco Calcio) made a request to Juventus for documentation concerning the transfer of the rights to the

performances of various football players, in the framework of proceedings opened by the same Prosecutor's

Office. Juventus provided these documents and all the information requested.

On 21 February 2022, Juventus received, together with 10 other Italian football companies and respective senior

managers, a “Comunicazione di conclusione delle indagini” (Communication of termination of investigations) from

the Federal Prosecutor’s Office before the F.I.G.C. with regard to the valuation of the effects of certain transfers of

players’ rights on the financial statements and the accounting of gains, following the “segnalazione” (report) by

Co.Vi.So.C., for the postulated breach of article 31, paragraph 1, and articles 6 and 4 of the “Codice di Giustizia

Sportiva” (Sport Justice Code). The communication served, concerning certain transfers completed in the financial

years 2018/19, 2019/20 and 2020/21, does not constitute the exercise of the disciplinary action by the Federal

Prosecutor’s Office. Juventus had access to the records and articulate its defences in accordance with the terms

set forth in the code and trusts it will be in a position to demonstrate the correctness of its conduct.

Criminal proceedings pending before the Turin Judicial Authority

On 26 November 2021 and 1 December 2021, search and seizure orders were served on Juventus, through the

Officers of the "Guardia di Finanza of the Nucleo di Polizia Economico-Finanziaria" of Turin.

In the same date, Juventus was informed of the existence of an investigation by the Public Prosecutor's Office of

the Court of Turin, against itself and some of its current and former representatives, concerning the item "Income

from players' registration rights" recorded in the financial statements at 30 June 2019, 2020 and 2021 for the

offences referred to in Article 2622 of the Italian Civil Code (False corporate communications by listed companies)

and art. 8 of Legislative Decree no. 74/2000 (Issue of invoices or other documents for non-existent transactions)

and, as far as the Company is concerned, for the offence envisaged by articles 5 (Liability of the body) and 25-ter

(Corporate offences) of Legislative Decree no. 231/2001.

The investigation launched by the Public Prosecutor's Office at the Court of Turin is ongoing and to date, no notice

of conclusion of the preliminary investigations pursuant to art. 415-bis of the Code of Criminal Procedure has been

served. Juventus is cooperating with the investigators and trusts that it will clarify any aspect of interest to them,

believing that it has operated in compliance with the laws and regulations governing the preparation of financial

reports, in accordance with accounting principles and in line with international football industry practice and market

conditions.

BOARD REPORT

Outlook 2022

As a result of the continuing health emergency linked to the COVID-19 pandemic, the economic, financial and

sporting reference context is still characterised by a high degree of uncertainty, which makes the formulation of

reliable forecasts regarding possible short - to - medium term developments quite complex. However, the positive

effects of the vaccination campaigns underway, both in Italy and globally, now make it possible to presume a

gradual reduction in the various restrictive measures imposed by the Authorities during the second half of the

2021/2022 financial year and a substantial normalisation of the general economic context starting from the second

half of the current year.

The Juventus' Group continues to monitor the developments of the pandemic and governmental measures, in

order to align promptly the management of its business to the changing environment, adopting appropriate

measures to protect its revenue sources and assets, and to continue to apply high standards to the measures

adopted to safeguard the health and welfare of its registered customers and employees.

As things stand at present, the 2021/2022 financial year – still heavily affected by the direct and indirect effects of

the pandemic – is expected to show a significant loss. It should also be noted that, on the assumption of a

substantial normalisation of the general economic context starting from the second half of 2022, and as a result of

the cost rationalisation and revenue recovery activities carried out in the financial year ended 30 June 2021 and

effective in the medium term, the Group's economic performance is expected to improve significantly starting from

2022/2023 financial year.

In assessing the business outlook, the uncertainties typical of football operations remain, stemming in particular

from the First Team's performance in the competitions in which it participates.

BOARD REPORT

(89.62% of share capital)

The financial data prepared for EXOR consolidated reporting purposes differs from those reported by GEDI since

the data consolidated by Exor reflects the effects of the application by Exor of the acquisition method to account

for its acquisition of GEDI.

The following information refers to the key consolidated figures of GEDI.

Year

€ million

2021

2020

Change

Net revenues

520

533

(13)

Gross operating profit (loss)

Gross operating profit (loss) - adjusted

Operating profit (loss)

(38)

(165)

127

Operating profit (loss) - adjusted

(12)

Net loss

(50)

(166)

116

€ million

31/12/2021

31/12/2020

Change

Shareholders' equity

213

227

(14)

Net financial debt

116

106

COVID-19

The performance in 2020 was severely penalised by the trend in the first six months, a period in which all areas of

the Group's business were heavily affected by the circumstances surrounding the spread of the COVID-19 virus

and the resulting restrictive measures adopted by the public and local authorities to contain it. In particular, the

drop in consumption was reflected directly in the trend of advertising investments.

The start of 2021 has also been affected by the ongoing impact of COVID-19 and its related restrictive measures.

In Italy, the number of cases started to grow in February and reached a peak in the last ten days of March. Since

mid-April, the situation has been improving and has made it possible to slowly phase out restrictions and reopen

commercial activities.

The vaccination campaign and the introduction of new rules such as the green pass had positive impacts in terms

of general infection levels and hospitalisations, leading to a gradual improvement in the situation.

The evolution of the health emergency continues to have a significant impact on macro-economic forecast, and

while the extensive vaccination coverage achieved has been reflected positively in the medium-term forecasts, the

duration and intensity of the post-pandemic recovery remain uncertain.

GEDI monitors the evolution of the situation on a daily basis in order to minimize its effects on the business, both

in terms of work-place health and safety and of GEDI’s economic performance and financial position. GEDI has

established and promptly implemented the necessary action plans, while continuing at the same time to invest

accordingly with the individual strategies identified.

Revenues

Year

€ million

2021

2020

Change

Circulation

218

253

(35)

Advertising

260

239

Add-ons and others

Total

520

533

(13)

BOARD REPORT

In the context described above consolidated revenues stood at €520 million, excluding the impact of the local

papers sold last year (this translates to a growth of 2.7%). Revenues from digital activities represented 17.3% of

consolidated revenues (22.1% for the la Repubblica brand).

Circulation revenues from traditional products and digital subscriptions amounted to €218 million, a decline of 6%

on a comparable data from last year).

In 2021, the actions to increase the sales of digital subscriptions have continued: the subscriber base, which has

grown by 30% compared to the close of 2020, has attained higher profitability compared to the same period in

2020. This improvement is principally due to the transition of the customer base from promotional offers made in

2020 to full pricing. It is a measure of the continued interest of subscribers in GEDI’s digital products – going

beyond the effects of the COVID-19 emergency and in spite of the ending of the promotional period – and of the

effectiveness of the new customer retention and engagement initiatives designed to reduce churn and to increase

readers’ consumption of products.

In May 2021 the new Repubblica App was released which combines in one single app all the newspaper’s digital

offerings (both free of charge and subscription) with state of the art functionalities.

Meanwhile, the production of paid digital content, particularly audio, was developed: up to 25 audio-articles were

published per day (175 per week) by La Repubblica and La Stampa, in addition to daily reports by regular

contributors, several original audio-series and the Long-Form audio version of La Repubblica.

With an average of around 4.9 million unique users a day and 26.6 million unique users a month on both of its

websites (Audiweb, average data for January – December 2021), the Group is the fifth largest operator on the

Italian digital market.

2021 was also a year of innovation, focusing on the quality of content for the GEDI Group's social media channels,

a strategy that has proven highly successful in terms of reach and engagement. The growth on Instagram was

particularly positive, as reflected in the results of La Repubblica (1.6 million followers, up 21.2% compared to 2020,

and 58.6 million user-generated interactions), La Stampa (460,000 followers, +24.7% in 2020, and 9.1 million user-

generated interactions) and Radio Deejay (1.1 million followers, +14.9% in 2020, and 13.8 million user-generated

interactions). When combined with the results of the new companies acquired by the Group, total generated

interactions reached over 85 million with over 140 million views, not counting reels. We also saw positive growth

on Facebook, up by an average of 4% year-on-year for the Group's publications, with a total of over 70 million

user-generated interactions and more than 250 million views.

During 2021, the strategy of releasing Content Hubs continued, with Moda & Beauty, il Gusto and Italian Tech,

distributed across la Repubblica, La Stampa and all the local daily newspapers, in multichannel format (digital and

paper) with a digital focus and a unified organizational structure. In 2020, the Green & Blue and Salute Content

Hubs were successfully launched.

The purpose of the Content Hubs is to increase digital subscriptions, host interesting content for advertisers and

ensure production and sales efficiency along the vertical themes.

Advertising revenues amounted to €260 million; excluding the impact of the local papers sold in the previous year,

growth stood at 12.5%.

In terms of the various media within the Group, GEDI’s advertising revenue from print newspapers increased by

8.4%, radio broadcasting by 14.9% and internet by 24.3% respectively.

Net loss

The consolidated net result was a loss of €50 million, including provisions relative to the disputes regarding alleged

fraud against INPS of €23 million, impairment on publications of €17 million, restructuring expenses, depreciation

on printing equipment and real estate, and other extraordinary items, with a total impact on net profit of €7 million.

Furthermore, in 2021, the sale of the equity investment in the company Editoriale Corriere di Romagna was

concluded, resulting in capital gains of €0.1 million (book value €0.6 million, sale price €0.7 million), as were the

sales of the equity investments in Editoriale La Libertà, Telelibertà and Altrimedia with a loss of €0.7 million (book

value €9.2 million, sale price €8.5 million). Finally, a write-down of €1.8 million was recorded for the equity

investments held in the Italian press agency ANSA, aligning the book value to the fair value.

BOARD REPORT

In 2020 the loss for the year was €166 million, including impairments on goodwill and publications of €82 million,

restructuring expenses and other extraordinary items with an impact on net profit of €24 million and losses realised

on the sale of local papers of €11 million. In 2020 write-downs of €7 million were also recorded on the value of the

investment held in Editoriale Libertà and Editoriale Corriere di Romagna and €13 million for adjustments on

deferred tax assets due to the worsening forecasts for the recovery of previous tax losses due to COVID-19. Net of

the aforementioned effects, the adjusted loss for 2021 was €2 million, compared to a loss of €29 million in the

previous year.

2022 Outlook

For 2022, the leading agencies and institutions are indicating a growth in Italian GDP above 4% and suggest that

the Italian economy could return to pre-crisis production levels in the first quarter of the year. However, the drawn-

out duration of the pandemic continues to cause a significant slowdown of activities in certain economic sectors; in

particular, the Omicron variant of the COVID-19 virus was particularly damaging for families and businesses,

generating serious organisational problems due to the high level of infectiousness of the variant despite the

fortunately less critical clinical context. Furthermore, international tensions in Eastern Europe, with the consequent

spike in costs of energy and certain raw materials, undoubtedly represent another critical concern.

At present, therefore, the factors that contribute to the construction of revenue forecasts, and in particular of

advertising revenues, both for the editorial (printed and digital) and the radio broadcasting segments continue to be

subject to major uncertainty.

To mitigate the effects of these external events, GEDI's management is implementing a series of incisive actions to

contain the main cost categories. The aim is to achieve further savings while at the same time continuing to invest

according to the individual strategies identified, in particular, seizing all the opportunities offered by the digital

revolution to make the transformation needed to reach an ever-larger customer base on any platform.

Despite this, 2022 has been marked by some important projects aimed at developing the monetisation of content

produced by the GEDI Group's brands.

The availability of a vast collection of audio content able to span different genres and interests has led to the

launch in January 2022 of One Podcast, an app that aggregates all the Group's audio content in one place: news,

radio shows, and a catalogue of podcasts, live radio broadcasts, re-runs of radio episodes, clips and online radio.

News content is monetised through subscriptions while radio content is freely accessible to all users.

Also in January the new HuffPost website was launched with a new graphic design, fresh content and a strategy

aimed at consolidating the readership community. The range of information, analyses and investigative reports

was expanded thanks to collaborations with prestigious columnists, and a paywall was introduced for all of the

publication's exclusive content. In mid-February the new app for smartphone and tablets was launched.

Finally, on 31 January 2022 the sale of the business unit comprising the daily newspaper La Nuova Sardegna and

the printing centre to the SAE S.p.A. publishing group was completed and the building used for its editorial and

administrative offices was sold to a third party. The publication had been leased to the company DB Information

S.p.A. since December 2016. The operation follows the sale of four local newspapers by GEDI to SAE in October

2020. The concessionaire A. Marzoni&C. will continue to manage the advertising revenue for the publication.

With regard to future evolutions, considering the actions put in place and those yet to be implemented, the Group

believes - assuming the absence of a renewed spike in infections and the consequent imposition of containment

measures and/or the worsening of the international context - to have the managerial and financial leverage needed

to guarantee a positive future outlook in the medium and long term. The actions undertaken by the Government to

sustain the national economy may, also, provide a positive contribution to the Company’s results.

BOARD REPORT

SUBSEQUENT EVENTS AND

2022 OUTLOOK

BOARD REPORT

SUBSEQUENT EVENTS AND 2022 OUTLOOK

Subsequent events

Dividends and distribution of reserves expected to be received in the year 2022

The dividends and distributions of reserves already received or proposed by the board of directors of some

subsidiaries are as follows:

Number

of shares

Dividends

Investee company

Per share

(€)

Total

(€ million)

Ferrari N.V.

44,435,280

1.362

Stellantis N.V.

449,410,092

1.04

467

CNH Industrial N.V.

366,927,900

0.28

103

Exor's share of dividends

631

Demerger between CNH Industrial and Iveco Group

Effective 1 January 2022 the Commercial and Specialty Vehicles, Powertrain and related Financial Services

businesses were separated from CNH Industrial. Iveco Group became a public listed company independent from

CNH Industrial and, from 3 January 2022, its common shares are traded on Euronext Milan. Each holder of

common shares in the share capital of CNH Industrial received one common share of Iveco Group for every five

CNH Industrial common shares held. Exor, which continues to be the shareholder of reference in both entities

following completion of the spin-off process, holding 366,927,900 common shares CNH Industrial, received

73,385,580 Iveco Group common shares (a 27.06% stake) and the same number of special voting shares. As the

demerger is a “business combination involving entities or businesses under common control”, it is outside the

scope of application of IFRS 3 – Business Combinations and IFRIC 17 – Distributions of Non-cash Assets to

Owners. Accordingly, in Exor's 2022 Consolidated Financial Statements, the opening position at 1 January 2022 for

items in the statement of financial position (relative to CNH Industrial post-demerger and Iveco Group), will be

equivalent to the carrying amounts of CNH Industrial pre-demerger at 31 December 2021.

Increased voting rights related to Exor's stake in Juventus Football Club

As of 3 January 2022, after an uninterrupted period of 24 months during which its shares in Juventus were

maintained registered in the special list, in accordance with the company's voting rights regulations, Exor increased

voting rights in Juventus and currently holds 77.874% of the voting rights.

Settlement with the Italian Tax Authorities

On 18 February 2022 Exor settled with the Italian Tax Authorities (“Agenzia delle Entrate”) a complex tax issue,

specifically related to the exit tax due by the Italian registered company Exor S.p.A. that in December 2016 merged

with its Dutch subsidiary Exor Holding N.V. to create today’s Exor domiciled fiscally in the Netherlands.

Exor remains convinced that it acted in accordance with the rules; however, with the objective of avoiding the time

and the costs of a major tax dispute, it agreed to enter into a settlement with the Agenzia delle Entrate and paid

€746 million, of which €104 million represented by interest.

The effect of the settlement, which was paid in full on 18 February 2022, has been reflected in the Company’s 2021

accounts, to the extent applicable.

Cash consideration for the sale of PartnerRe to Covéa increased by $328 million

The agreed cash consideration of $9.0 billion to be paid by Covéa on the closing of the transaction was based on a

consolidated common shareholders’ equity value of $7.0 billion. Based on PartnerRe's common shareholders'

equity at 31 December 2021, the agreed cash consideration will be adjusted, as per the agreed terms, to include

additional proceeds for around $328 million (of which $150 million paid by Covéa and $178 million paid by

PartnerRe as a special dividend).

BOARD REPORT

Exor buyback program

On 8 March 2022 Exor launched a share buyback program that will involve from time to time the repurchase of up

to €500 million of ordinary shares by 2024 (the "Program"), in line with the disclosure made at the 2021 Investor

Day. Exor started the repurchase of up to €100 million, as the first tranche of the Program, to be executed on

Euronext Milan through a non-discretionary buyback agreement with a primary financial institution. The shares that

are being repurchased will be cancelled.

The Program will be conducted in the framework of the resolution adopted by the Annual General Meeting of

Shareholders (“AGM”) held on 27 May 2021. The shares will be repurchased at a price not higher than 10% above

the reference price recorded on the day before each transaction is made.

The repurchases will be carried out in compliance with applicable rules and regulations, including the Market Abuse

Regulation 596/2014 and the Commission Delegated Regulation (EU) 2016/1052.

Conflict between Russia and Ukraine

The conflict between Russia and Ukraine is causing a severe humanitarian crisis involving millions of people. Exor

expresses solidarity with all who are and will be suffering the consequences.

In response to these events the EU, the United States and the United Kingdom, among other countries, imposed

sanctions against certain Russian individuals and entities. Potential effects at a global scale include supply chain

disruptions, rises in commodity prices, inflationary pressures and volatility in the capital markets.

Exor’s subsidiaries have conducted business in jurisdictions that may be subject to trade or economic sanctions

and such sanctions could be expanded. Exor and its subsidiaries will continue to comply with and implement

sanction regimes or other similar laws or regulations.

Exor acknowledges the high uncertainty regarding the duration, outcome and long-lasting consequences of the

conflict. The overall effect of these factors on Exor’s business cannot be estimated with a sufficient degree of

confidence, and Exor will continue to monitor closely the developments.

2022 Outlook

Exor N.V. does not prepare budgets or business plans, nor does it publish forecast data or data on the basis of

which it is possible to calculate forecast data.

Certain Exor operating companies (Ferrari, Stellantis and CNH Industrial) publish forecast data on their

performance, while other operating companies (PartnerRe and Juventus Football Club) publish information on the

foreseeable outlook. Additional information is provided under “Review of performance of the main operating

companies” in the Board Report.

The forecast data and information of the above mentioned operating companies are drawn up autonomously and

communicated by the respective companies and are not homogeneous. Quantitative forecast disclosures prepared

by these operating companies and the type of information provided, as well as the underlying assumptions and

calculation methods vary according to the accounting principles applicable to each subsidiary and the conventional

application practices in the respective sector of reference.

Exor N.V. in fact, is a holding company without a specific business of reference, head of a diversified and non-

integrated group that operates in different segments and does not exercise direction and coordination activities

over its companies, which operate in a completely independent manner.

Exor N.V. deems that the forecasted data and information of the companies are not significant or suitable for the

purposes of providing indications about the prospective economic trend of Exor N.V.’s operations, nor represent a

forecast or estimate of the company’s results. Therefore, in assessing Exor N.V.’s future prospects it is not possible

to rely on the data and prospective information published by the aforesaid operating companies.

BOARD REPORT

1 April 2022

The Board of Directors

John Elkann

Alessandro Nasi

Andrea Agnelli

Ginevra Elkann

Marc Bolland

Joseph Bae

Ajay Banga

Melissa Bethell

Laurence Debroux

BOARD REPORT

MAJOR SHAREHOLDERS AND

OWNERSHIP STRUCTURE

BOARD REPORT

MAJOR SHAREHOLDERS AND OWNERSHIP STRUCTURE

Introduction

EXOR N.V. (“Exor N.V” or "Exor" or the “Company”) is a public limited liability company (naamloze vennootschap),

incorporated under the laws of the Netherlands and its shares are listed in Italy on the Euronext Milan. The

Company’s legal and tax residence is in the Netherlands.

Capital Structure

Structure of share capital

Share class

Number of shares

Listing market

Rights and obligations

Ordinary shares1

241,000,000

Euronext

1 The ordinary shares are registered shares, freely transferable and issued in electronic form. Shares are managed through the centralized clearing system

organized by Monte Titoli.

As of 31 December 2021 the Company held 9,291,244 of its own ordinary shares as treasury stock.

Economic and administrative rights

Each Exor ordinary share entitles its holder to one vote at general meetings of shareholders – ordinary and

extraordinary – as well as to the economic and administrative rights according to the applicable provisions of law

and of the Company’s articles of association (the “Articles of Association”).

Issuance of shares

Shares may be issued pursuant to a resolution of the general meeting of shareholders. This competence concerns

all non-issued shares of the Company’s authorized capital, except insofar as the competence to issue shares is

vested in the board of directors (the “Board of Directors”) by a resolution of the general meeting of shareholders to

this extent.

Shares may be issued pursuant to a resolution of the Board of Directors, if and insofar as the Board of Directors is

designated to do so by the general meeting of shareholders. Such designation can be made each time for a

maximum period of five years and can be extended each time for a maximum period of five years. A designation

must determine the number of shares of each class concerned which may be issued pursuant to a resolution of the

Board of Directors. A resolution of the general meeting of shareholders to designate the Board of Directors as a

body of the Company authorized to issue shares can only be withdrawn upon proposal of the Board of Directors.

By means of the resolution adopted by the general meeting on 27 May 2021, the Board of Directors has been

designated as the competent body to issue ordinary shares and to grant rights to subscribe for shares for a term of

five (5) years with effect from 27 May 2021. The Board of Directors has been authorized to increase the share

capital with such number of shares for a nominal value up to five million Euro (Euro 5,000,000.00) and to issue

convertible bonds for an aggregate issue price up to one billion Euro (Euro 1,000,000,000.00), and to issue the

underlying ordinary shares (or granting of rights to subscribe for such underlying ordinary shares) pursuant to the

applicable conversion ratio.

Payment for shares shall be made in cash unless another form of consideration has been agreed. Payment in a

currency other than Euro may only be made with the consent of the Company.

Upon the issuance of ordinary shares, each holder of ordinary shares will have pre-emptive rights in proportion to

the aggregate nominal value of his ordinary shares. A shareholder will not have pre-emptive rights in respect of

ordinary shares issued against a non-cash contribution. Nor will the shareholder have pre-emptive rights in respect

of ordinary shares issued to employees of the Company or of a group company (groepsmaatschappij).

Prior to each individual issuance of ordinary shares, pre-emptive rights may be restricted or excluded by a

resolution of the general meeting of shareholders. However, with respect to an issue of ordinary shares pursuant to

a resolution of the Board of Directors, the pre-emptive rights can be restricted or excluded pursuant to a resolution

of the Board of Directors if and insofar as the Board of Directors is designated to do so by the general meeting of

shareholders. By means of the resolution adopted by the general meeting on 27 May 2021, the Board of Directors

has been authorized to limit or exclude pre-emptive rights of shareholders when issuing ordinary shares or granting

rights to subscribe for ordinary shares for a term of five (5) years with effect from 27 May 2021.

BOARD REPORT

Holders of Special Voting Shares have no pre-emptive rights on the issuance of shares of any class and with

respect to the issuance of Special Voting Shares no pre-emptive rights exist.

The general meeting of shareholders or the Board of Directors, as the case may be, shall decide – when passing

the resolution to issue shares or rights to subscribe for shares – in which manner the shares shall be issued and, to

the extent that rights of pre-emption apply, within what period those rights may be exercised.

Special Voting Structure

In order to foster the development and continued involvement of a core and stable base of long-term shareholders

in a manner that reinforces the group’s stability, as well as providing Exor with enhanced flexibility when pursuing

strategic investment opportunities in the future, the Articles of Association provide for a special-voting structure (the

“Special Voting Structure”). The purpose of the Special Voting Structure is to reward long-term ownership of Exor

ordinary shares by granting long-term Exor shareholders with special voting shares to which multiple voting rights

are attached additional to the right granted by each Exor ordinary share held.

More precisely, according to the Special Voting Structure:

(i)after 5 years of uninterrupted ownership of Exor ordinary shares held in the Loyalty Register (as defined

below), each Exor shareholder will be entitled to 5 voting rights for each Exor ordinary share and, to this

purpose, will receive – and Exor will issue – one special voting share, to which 4 voting rights are attached,

and with a nominal value of Euro 0.04 (“Special Voting Share-A”), additional to each Exor ordinary share

owned (to which 1 voting right is attached); and

(ii)after 10 years of uninterrupted ownership of Exor ordinary shares held in the Loyalty Register (as defined

below), each Exor shareholder will be entitled to 10 votes for each Exor ordinary share and, to this

purpose, each Special Voting Share-A held will be converted into one special voting share B, to which 9

voting rights are attached, and with a nominal value of Euro 0.09 (“Special Voting Share-B”), additional to

each Exor ordinary share owned (to which 1 voting right is attached).

Special Voting Shares-A and Special Voting Shares-B, which are collectively referred to as “Special Voting Shares”,

will not be tradable and will have only minimal economic entitlements.

Application for Special Voting Shares – Loyalty Register

A shareholder may at any time opt to become eligible for Special Voting Shares by requesting the agent (the

“Agent”) referred to Article 3.3 of the Terms and Conditions for Special Voting Shares (the “SVS Terms”), acting on

behalf of the Company, to register one or more ordinary shares in the loyalty register (the “Loyalty Register”)

maintained by the Company pursuant to the SVS Terms. Such request will need to be made by the relevant

shareholder via its intermediary, by submitting (i) a duly completed form (the “Election Form”) and (ii) an

intermediary confirmation statement attesting the uninterrupted holding of Exor ordinary shares, pursuant to the

SVS Terms.

Together with the Election Form, the relevant shareholder must submit a duly signed power of attorney, irrevocably

instructing and authorizing the Agent to act on his behalf and to represent him in connection with the issuance,

allocation, acquisition, conversion, sale, repurchase and transfer of Special Voting Shares in accordance with and

pursuant to the SVS Terms (the “Power of Attorney”).

Upon receipt of the Election Form, the intermediary’s confirmation and the Power of Attorney, the Agent will

examine the same and use its reasonable efforts to inform the relevant shareholder, through his intermediary, as to

whether the request is accepted or rejected (and, if rejected, the reasons why) within ten business days of receipt

of the above-mentioned documents. The Agent may reject a request for reasons of incompleteness or

incorrectness of the Election Form, the Power of Attorney or the broker’s confirmation or in case of serious doubts

with respect to the validity or authenticity of such documents. If the Agent requires further information from the

relevant shareholder in order to process the request, then such shareholder shall provide all necessary information

and assistance required by the Agent in connection therewith.

Exor ordinary shares for which a shareholder has issued a request for registration in the Loyalty Register – as well

as ordinary shares already registered – are referred to as “Electing Ordinary Shares”.

BOARD REPORT

Transfer of Electing Ordinary Shares, Qualifying Ordinary Shares and Special Voting Shares; removal from the

Loyalty Register

According to the SVS Terms and during the time in which Electing Ordinary Shares or Qualifying Ordinary Shares

are held in the Loyalty Register, these cannot be sold, disposed of or transferred unless to a Loyalty Transferee.

No shareholder shall, directly or indirectly, (a) sell, dispose of or transfer any Special Voting Share or otherwise

grant any right or interest therein, unless the shareholder is obliged to transfer Special Voting Shares to a Loyalty

Transferee, or (b) create or permit to exist any pledge, lien, fixed or floating charge or other encumbrance over any

Special Voting Share or any interest in any Special Voting Share.

As described above, anyone holding Electing Ordinary Shares or Qualifying Ordinary Shares may request at any

time that all or part of their Electing Ordinary Shares or Qualifying Ordinary Shares be removed from the Loyalty

their Exor shares as indicated below. Starting from the time the above mentioned request is made, it shall be

considered that the person holding Qualifying Ordinary Shares has waived the attribution of the voting rights

associated with the Special Voting Shares issued and attributed in relation to the Qualifying Ordinary Shares.

Each of the above mentioned requests shall result in a compulsory transfer by effect of which the Special Voting

Shares shall be offered and transferred to Exor without any consideration (om niet) under the Articles of Association

and the SVS Terms. Exor may keep the Special Voting Shares as treasury shares, but shall not be entitled to

exercise the related voting rights. Alternatively, Exor may withdraw and cancel the Special Voting Shares and by

this effect the nominal value of those shares shall be allocated to the special capital reserve of Exor. Therefore, the

voting rights embodied in Special Voting Shares shall cease to apply with reference to the related Qualifying

Ordinary Shares removed from the Loyalty Register.

Each shareholder holding Qualifying Ordinary Shares shall promptly notify Exor about the occurrence of an event

of Change of Control (as defined under the SVS Terms) which concerns the same. A shareholder’s Change of

Control causes the related Qualifying Ordinary Shares to be removed from the Loyalty Register. The voting rights

attaching to Special Voting Shares and assigned in relation to the corresponding Qualifying Ordinary Shares shall

be suspended with immediate effect as a result of any event of Change of Control, directly or indirectly, related to

each holder of Qualifying Ordinary Shares held in the Loyalty Register.

Other characteristics of Special Voting Shares

Issuance of Special Voting Shares does not require qualified shareholders to pay up their nominal value to Exor.

Pursuant to Article 13.4 of the Articles of Association, Exor maintains a separate reserve (the “Special Capital

Reserve”) to pay-up Special Voting Shares. The Board of Directors is authorized to credit or debit the Special

Capital Reserve at the expense or in favour of the Company’s general share premium reserve. If the Board of

Directors so decides, Special Voting Shares can be issued at the expense of the Special Capital Reserve in lieu of

an actual payment for the shares concerned.

However, the holder of Special Voting Shares issued at the expense of the Special Capital Reserve may at any

time substitute the charge of the Special Capital Reserve by making an actual payment to the Company in respect

of the shares concerned (in accordance with payment instructions provided by the Board of Directors on request) in

an amount equal to the nominal value of such Special Voting Shares (such shares being defined as “Special Voting

Shares paid-up in cash”).

As anticipated, Special Voting Shares have minimal economic entitlement. Under Dutch law, in fact, Special Voting

Shares cannot be excluded – as a whole – from the assignment of economic rights. Consequently, in accordance

with Article 28.2 of the Articles of Association, holders of Special Voting Shares paid-up in cash will be entitled to

the payment of an annual dividend equal to one per cent (1%) of the amount actually paid for such shares in

accordance with the above, provided, however, that profits realized with respect to the financial year concerned are

not fully appropriated to increase and/or form reserves. Actual payments made during the financial year to which

the dividend relates will not be counted.

BOARD REPORT

In case of liquidation of the Company, out of the balance remaining after payment of its debts, the following

payments will be proceeded:

–firstly, the amounts actually paid-in on Special Voting Shares in accordance with Article 13.5 of the Articles of

Association will be transferred to those holders of Special Voting Shares whose Special Voting Shares have so

been actually paid for; and

–secondly, the balance remaining will be transferred to the holders of ordinary shares in proportion to the

aggregate number of the ordinary shares held by each of them.

Pursuant to Article 11 of the SVS Terms, in the event of a breach of any of the obligations of a shareholder, that

shareholder must pay to the Company an amount for each Special Voting Share affected by the relevant breach

(the “Compensation Amount”), which amount is the average closing price of an ordinary share on Euronext Milan

calculated on the basis of the period of twenty (20) trading days prior to the day of the breach or, if such day is not

a business day, the preceding business day, such without prejudice to the Company’s right to request specific

performance.

Pursuant to Article 12 of the SVS Terms, the SVS Terms may be amended pursuant to a resolution by the Board of

Directors, provided, however, that any material, not merely technical amendment will be subject to the approval of

the general meeting of shareholders of Exor, unless such amendment is required to ensure compliance with

applicable laws or listing regulations.

Allocation of Special Voting Shares

As per the date on which an Exor ordinary share has been registered in the Loyalty Register in the name of one

and the same shareholder or its Loyalty Transferee (as defined under the SVS Terms) for an uninterrupted period

of five years (the “SVS A Qualification Date”), such Electing Ordinary Share will become a “Qualifying Ordinary

Share A” and the holder thereof will be entitled to acquire one Special Voting Share A in respect of each of such

Qualifying Ordinary Share A.

As per the date on which an Exor ordinary share has been registered in the Loyalty Register in the name of one

and the same shareholder or its Loyalty Transferee for an uninterrupted period of ten years (the “SVS B

Qualification Date”), such Electing Ordinary Share – which, in the meantime, will have become a Qualifying

Ordinary Share A – will become a “Qualifying Ordinary Share B”. Qualifying Ordinary Shares A and Qualifying

Ordinary Shares B are collectively referred to as “Qualifying Ordinary Shares”.

On the SVS B Qualification Date, the Agent will, on behalf of the Company, issue a conversion statement pursuant

to which the Special Voting Shares A corresponding to the number of Qualifying Ordinary Shares B will

automatically convert into an equal number of Special Voting Shares B.

On 13 December 2021, after (five) 5 years of registration in the Loyalty Register, the Electing Ordinary Shares held

by Giovanni Agnelli B.V. became Qualifying Ordinary Shares A and Giovanni Agnelli B.V. became entitled to acquire

one Special Voting Share A in respect of each of such Qualifying Ordinary Share A. On 13 December 2021, Exor

issued 124,717,132 Special Voting Shares A allocated to Giovanni Agnelli B.V., now holding 85.44% of voting rights

on outstanding capital and 84.37% of voting rights on issued capital.

Repurchase of Shares

The authorization of the Board of Directors to repurchase its own fully paid-up ordinary shares, up to the maximum

number of ordinary shares that can be repurchased under Dutch law, and further within the limits of Dutch law,

applicable regulations and the Company’s Articles of Association, has been extended, by the annual general

meeting of shareholders held on 27 May 2021 for a term of 18 months, starting from the date thereof.

Restrictions on the transfer of shares

There are no restrictions on the transfer of Exor ordinary shares, no limitations on ownership and no clauses

requiring acceptance on the part of the Company or of other shareholders upon a transfer of shares.

The above shall not apply to transfers of Special Voting Shares or Electing Ordinary Shares or Qualifying Ordinary

Shares: for such provisions, reference is made to the section above.

BOARD REPORT

Restrictions on voting rights

There are no restrictions on voting rights.

Shareholders

Significant shareholdings

Based on the regulatory filings with the Netherlands Authority for the Financial Markets (Autoriteit Financiële

Markten, the “AFM”) the following entities own at 31 December 2021, directly or indirectly, more than 3% of the

share capital carrying voting rights:

Shareholder

% of issued capital

Giovanni Agnelli B.V.

52.01%

Harris Associates LP

4.99%

Baillie Gifford

3.14%

Vanguard Group

3.05%

In total ten shareholders, one of which is Giovanni Agnelli B.V., are registered, for a total amount of 132,228,028

shares, in the Loyalty Register to participate in the Special Voting Structure, as explained above.

Giovanni Agnelli B.V. is the largest shareholder of Exor through its 52.01% shareholding interest in Exor’s issued

capital. Giovanni Agnelli B.V. is a Dutch private company with limited liability and the shares of which are held by

the descendants of Giovanni Agnelli, founder of Fiat. The main business objective is to preserve unity and

continuity of its controlling equity interest in Exor.

Consequently, Giovanni Agnelli B.V. could strongly influence all matters submitted to a vote of Exor’s shareholders,

including approval of annual dividends, election and removal of directors and approval of extraordinary business

transactions.

Employee shareholdings: system for the exercise of voting rights

A specific mechanism for the exercise of voting rights applicable to employees’ shareholdings does not exist. In

particular the voting rights on shares deriving from the vesting of shares or from the exercise of option rights under

stock option plans or incentive plans – for information on which reference should be made to the section

“Remuneration of Directors” – are not subject to any form of restriction and are directly exercisable by the

beneficiaries.

Shareholder agreements

Exor is not aware of shareholder agreements concerning either the exercise of the rights attached to the

Company’s shares or the transfer of the shares.

Change of control clauses and By-Law provisions relevant to a public offer

Any change in control of the Company2 would entitle subscribers of the following bonds outstanding at

31 December 2021 to demand early repayment.

–Non-convertible bond issue 2015/2022 of €750 million (€602 million outstanding)

–Non-convertible bond issue 2014/2024 of €650 million (€500 million outstanding)

–Non-convertible bond issue 2012/2025 of €100 million

–Non-convertible bond issue 2015/2025 of €450 million

–Non-convertible bond issue 2016/2026 of $170 million

–Non-convertible bond issue 2018/2028 of €500 million

–Non-convertible bond issue 2020/2030 of €500 million

–Non-convertible bond issue 2011/2031 of ¥10 billion

–Non-convertible bond issue 2021/2031 of €500 million

BOARD REPORT

–Non-convertible bond issue 2019/2034 of €500 million

–Non-convertible bond issue 2018/2038 of €200 million.

In addition, three lending banks would have the right to demand the cancellation of irrevocable lines of credit

totalling €250 million, which, however, were unutilized at 31 December 2021.

Except for the aforesaid, as of the date of this report, there are no significant agreements to which the Company is

a party that would become effective, be amended or be extinguished on a change of control of the Company.

The Articles of Association do not provide for derogations from the passivity rule or for the application of the

breakthrough rule contemplated in the Dutch and Italian legislation on public offers.

2 The articles of association of the majority shareholder Giovanni Agnelli B.V. include a condition that requires (i) the unanimous vote of directors in function, and (ii)

the approval of the general meeting of shareholders by a special majority of more than two thirds of the votes cast representing more than two thirds of the issued

and outstanding share capital for any disposal of ordinary shares in Exor which does not leave at least 51% of the ordinary share capital of Exor in the full ownership

of Giovanni Agnelli B.V.

BOARD REPORT

RISK MANAGEMENT

RISKS AND CONTROL SYSTEM

BOARD REPORT

RISK MANAGEMENT, RISKS AND CONTROL SYSTEM

In compliance with the principles of the Dutch Corporate Governance Code, Exor has adequate internal risk

management and control systems in place. To assess the risk affecting the Company’s activities and the

effectiveness of the internal control system, Exor has in place an internal control and risk management system

(the “System”) based on the model provided by the COSO Framework (Committee of Sponsoring Organizations of

the Treadway Commission Report – Enterprise Risk Management model) and the principles of the Dutch

Corporate Governance Code. The System consists of a set of policies, procedures, rules and organisational

structures the purpose of which is to provide an adequate process for the identification, measurement,

management and monitoring of the principal risks in order to ensure the reliability, accuracy and timeliness of

financial information, the safeguarding of the Company’s assets, the efficiency and effectiveness of business

processes and the Company’s compliance with laws and regulations. An effective internal control and risk

management system contributes to the conduct of the business in a manner consistent with its pre-established

objectives and facilitates well-informed decision-making. The System is integrated within the organisation and

governance structure adopted by Exor and is developed giving adequate consideration to the reference models

and the best practices available nationally and internationally.

The responsibility for the institution and maintenance of an effective System, which is coherent with Exor’s

business, process objectives and for the corresponding risk management method employed with a pre-

established containment plan, is entrusted to the Board of Directors.

In particular, Exor’s System operates at three levels of internal control:

–First Level: operating areas identification, evaluation and monitoring of applicable risks in the single

processes and the establishment of specific actions managing such risks. At this level the structures

responsible for the individual risks are located, in terms of their identification, measurement and

management, as well as the performance of the necessary checks.

–Second Level: departments responsible for risk control which define methodologies and tools for managing

risks and the monitoring of such risks.

–Third Level: provides an independent and objective assurance of the adequacy and effective operation of

the first and second levels of control and in general of the overall mode of managing risks. This activity is

carried out by the Internal Audit function which operates independently.

The System is subject to annual verification and update in order to ensure its constant suitability as an instrument

of control over the business’s principal areas of risk.

The Audit Committee monitors the effectiveness of the Company’s System.

Internal control and external control over financial reporting

The System of control over financial reporting is set in a broader framework of internal control and risk

management and has the purpose of ensuring the reliability, accuracy, completeness and timeliness of the

Group’s financial information.

The System of internal controls over financial reporting is focused on the procedures and organisational structures

which ensure the reliability, accuracy, completeness and timeliness of financial reporting.

The System of internal control over financial reporting aims to ensure the adequate and effective application of the

administrative and accounting procedures designed to provide a true and fair representation as well as reliable

information on the business activities in the financial reports (annual consolidated and company only financial

statements and shortened half yearly consolidated financial statements) prepared by the Company.

The approach adopted by the Company for the evaluation, monitoring and continuous updating of the System of

control over financial reporting, is based on a ‘top-down, risk-based’ process consistent with the COSO

Framework (Committee of Sponsoring Organizations of the Treadway Commission Report – Internal Control

Integrated Framework). This enables focus on areas of higher risk and/or materiality, where there is risk of

significant errors, including those attributable to fraud, in the elements of the financial statements and related

documents.

BOARD REPORT

The principal characteristics of the System of control over financial reporting are based on the following

components and phases:

–Identification and assessment of administrative and accounting risks.

–Identification of the controls responding to the risks identified.

–Verification of the effective application of the controls and evaluation of any problems detected.

The Exor System of control over financial reporting has been developed taking into consideration existing law and

the regulations, best practices as well as the guidelines provided by the competent bodies and is composed of the

following administrative and accounting procedures:

–Code of Conduct – which illustrates the ethical principles and values of the Company and must be observed

by Company personnel involved, for any reasons, in the implementation of the System of control over

financial reporting;

–System of delegated powers and proxies – which identifies the powers to represent the Company held by

individual managers;

–Risk Management process – which identifies roles, responsibilities and methodologies in performing the risk

management activity and in the preparation, diffusion and checking of financial reports disclosed to the

market;

–Administrative and accounting procedures – which establish the responsibilities and rules for the process

controls to be applied;

–Financial reporting instructions and closing timetables – which are used to communicate operational

instructions for the preparation of the reporting package;

–The process of internal attestation by the corporate bodies of the significant subsidiaries as regards the data

and the related internal control system under their responsibility reported to the parent company.

Internal control covering the preparation and processing of financial information

Overview of the organisational structure and management of accounting and financial information

The consolidated financial statements of the Exor group are prepared in accordance with International Financial

Reporting Standards (IFRS) and interpretations as adopted in the European Union at the balance sheet date, as

described in the annual financial report.

As parent company, EXOR N.V., under the responsibility of the Chief Financial Officer defines and oversees the

preparation of reported accounting and financial information of EXOR N.V. and the process related to the financial

information being requested from the operating subsidiaries. Accordingly, the Chief Financial Officer of EXOR N.V.

ensures that the processes for preparing accounting and financial information produce reliable information and

give, in a timely manner, a fair view of the Company’s financial position and results. He obtains and reviews all

information that he deems useful, such as closing assumptions, critical accounting positions and judgments,

changes in accounting method and results of audits performed by the external auditors.

For consolidation purposes, the Chief Financial Officers of operating subsidiaries are responsible for preparing the

reporting packages of such companies in accordance with group instructions. These financial statements are

prepared under the control of their respective Board of Directors and are the responsibility of company

management of each subsidiary. Each reporting package is accompanied with a representation letter in which

management of the subsidiary takes responsibility for the information provided in the consolidation process.

Members of the EXOR N.V. Audit Committee examine the annual and interim financial statements of EXOR N.V.

and monitor the process for preparing accounting and financial information. Their conclusions are based notably

on information produced by the Chief Financial Officer and his team, exchanges with the team during Audit

Committee meetings and the findings of internal audits. The Chair of the Audit Committee reports on the

committee’s work to the Board of Directors.

The Board of Directors of EXOR N.V. approves EXOR N.V. consolidated financial statements (interim and annual)

and separate (company) financial statements.

To secure better upward reporting to Exor’s external (statutory) auditors, the Group engages the same auditing

firms for all subsidiaries, to the extent possible. Selection criteria for the statutory auditors includes their ability to

audit all directly- and indirectly-held subsidiaries throughout the world.

BOARD REPORT

Processes for the preparation and processing of accounting and financial information for the consolidated financial

statements

The process for the preparation of the consolidated financial statements is organised and coordinated under the

responsibility of the Chief Financial Officer.

The consolidated financial statements are produced using a consolidation software configured to automate a

certain number of consistency checks on the data in the reporting packages.

Detailed consolidation instructions are sent before each interim and annual closing to the attention of the finance

departments of the various consolidated subsidiaries.

The closing schedule for accounts and the related instructions are prepared sufficiently in advance to enable the

financial teams of the subsidiaries to organise their procedures and anticipate closing constraints.

The consolidation department looks at uniformity of treatment by examining accounting principles in the financial

statements of each subsidiaries.

Risk Management

Exor has adopted its own Enterprise Risk Management (“ERM”) system to identify and analyse the main risks

associated with the Company’s activities and the achievement of its objectives.

The Exor ERM system is based on the above mentioned COSO ERM Framework, which defines risk

management as a “process effected by the Board of Directors, management and other personnel, applied in

setting strategy across the organization and designed to identify potential events that may affect the business, in

order to manage the risk within the risk appetite and to provide reasonable assurance regarding the achievement

of the business objectives”. The COSO Framework is based on five areas: the control environment, risk

assessment, control activities, information and communication, and monitoring and supervision.

The Audit Committee monitors the effectiveness of the Company’s internal control and ERM system and, together

with executive management, performs a thorough exercise for the identification of the main risks and their ranking.

In 2020 a detailed risk assessment and update of the risk profile, as well as a re-assessment of the relevant risks

and risk appetite has been performed, especially in view of the developments caused by COVID-19. In 2021, the

annual risk assessment has been performed in which the 2020 outcome has been re-evaluated and updated. Risk

Appetite indicators (Risk Category & Measurement & Tolerance Level) have been reviewed and confirmed for

2021 and onwards.

The ERM system is integrated within the Company’s organisation and corporate governance, supporting the

efficiency and effectiveness of business processes, the reliability of financial information and compliance with laws

and regulations. An effective ERM system contributes to the conduct of the business in a manner consistent with

its objectives and facilitates well-informed decision-making.

In this context, the Board of Directors is responsible for the identification of the risks to which Exor and the

“Holdings System” are exposed in relation to the business objectives and Company characteristics, and for

performing an assessment of the possible risk scenarios mitigation, considering the effectiveness of the control

process currently in place.

Risks related to the companies are identified and addressed by the companies themselves, within the framework

of their own internal control. Exor, through the participation in the respective Boards, supports the adoption of a

sound internal control environment.

The Exor ERM system is subject to verification and update over time in order to ensure its constant suitability as

an instrument of control over the business’s principal areas of risk.

The assessment of the controls may require the definition of compensating controls and plans for mitigation and

improvement. The results of monitoring are subject to periodic review by management and are communicated to

the Audit Committee (which in return reports to the Board of Directors).

Risk Appetite

Exor set its risk appetite within risk taking and risk acceptance parameters which are driven by applicable laws,

the Code of Conduct, core principles and values, corporate policies and directives.

BOARD REPORT

Exor operates within a moderate overall risk range, inherent to its activities and strategy. In this context, Exor’s

highest risk appetite relates to the strategic and operational objectives related to a positive Net Asset Value (NAV)

per share / MSCI ratio in the long term and maintaining an adequate credit rating and cash flow to enable

continuity of investment activities, while ensuring in any case the compliance with the criteria that direct Exor

investment choices.

Exor’s lowest risk appetite relates to the objectives of protecting the Group reputation, compliance with the rules

and regulations and of accuracy and reliability of the financial reporting. Meeting applicable legal and regulatory

obligations will take priority over other business objectives.

The Exor risk management and internal control system comprises a structured process aimed at addressing

individual risk categories, with a defined risk appetite applied to each category as detailed below:

Risk Category

Risk Description

Risk Appetite

Strategic Risks

Strategic risks may affect Exor

long-term strategic performance

objectives.

Moderate

Exor is willing to accept moderate risks in order to realise

its strategic objectives. Exor defined tolerable levels of

deviation from NAV per share compared with MSCI, credit

rating and cash flow targets in the short and medium

term, in order to achieve long term goals.

Operational

Risks

Operational risks include

adverse, unexpected impacts

resulting from internal processes,

people and systems, or from

external events linked to the

performance of the Company’s

portfolio of businesses.

Low –

Moderate

Exor aims for lean operations focused on its core

activities.

Compliance

Risks

Compliance risks cover

unanticipated failures to comply

with applicable laws, regulations,

policies and procedures.

Low

Exor strives to comply with (international) applicable laws

and regulations at all times. Exor focuses on good

governance of its activity as a diversified investment

holding company.

Financial

reporting risks

Financial reporting risks primarily

relate to (failure) of internal

controls leading to possible

misrepresentation of Exor’s

positions and performance to

investors and other stakeholders

Low

In the external reporting Exor aims to provide an

insightful, fair and accurate representation of the Group

and Company performance and economic results.

Adequacy of financial reporting is secured through the

financial reporting policies and internal control framework

at Exor and its affiliates.

Financial Risks

Financial risks include

uncertainty of financial return and

the potential for financial loss due

to capital structure imbalances,

inadequate cash flows and the

volatility of financial instruments.

Low –

Moderate

Inherent to Exor’s long-term investment horizon, a low to

moderate level of financial risk is accepted in our

investment portfolio. Through capital market transactions,

cash balances and bank credit line agreements, Exor

seeks to maintain a capital structure profile which

achieves long-term goals and maintains its covenant

compliance.

Exor has established the appetite for principal risks, identifying its overall risk capacity and appetite position.

Risk metrics for each principal risk have been identified in order to put in place monitoring activity and corrective

mitigation actions, if needed.

Key risks and key trends

As a part of the 2021 risk assessment process, management performed an update of the previous Risk

Assessment. Based on the potential business impact and likelihood of occurrence, as well as existing and/or

planned countermeasures (mitigating actions) the risks have been reviewed and updated where needed.

BOARD REPORT

The risk impact could result in a material direct or indirect adverse effect on its business, operations, financial

condition and performance, reputation and/or other interests. The results of this assessment were presented to

the Audit Committee on 7 September 2021 and to the Board of Directors on 17 November 2021.

Exor expects that the implemented (internal and external) controls will mitigate the risks up to the level of the risk

appetite.

The summary table below is intended to present an overview of the main risks identified and the related mitigant

activities in place. The sequence in which these risks are presented does not reflect any order of importance,

likelihood or materiality.

Risk Event

Risk Description

Control/Mitigation Activities

Dividend risk (Cash Flow)

(Financial risk)

Risk of holding investments in companies that do not

pay sufficient dividend to recover the operating costs,

net financial expenses of Exor and to have free cash

flow to invest and/or to reduce the debt over time.

Careful management of cash in / cash out and

investment portfolio diversification. Exor maintains an

adequate cash flow management by performing cash

flow analysis, adjusting and monitoring the flows on a

regular basis.

Exor is engaged in continuous dialogue with the

companies through presence in the Board.

The Company risk management approach mixes a wide

variety of investments within the portfolio thus mitigating

unsystematic risk events in the collection of dividends

from the investments.

Portfolio composition

(Strategic/operational

risk)

Risk that investment decisions do not allow Exor to (i)

define an adequate portfolio mix in terms of

diversification of the investments, resulting in difficulties

in optimising the Group's future performance; (ii) obtain

a return on investments that will increase the Net Asset

Value (NAV), surpassing the MSCI World Index in USD;

and (iii) limit the impact of climate change adverse

development on the overall portfolio performance.

The Company risk management approach mixes a wide

variety of investments within the portfolio. The

Company portfolio consists of different kinds of

investments, consequently characterised by an overall

lower risk level.

Company investment procedures ensure adequate

evaluation also in relation to portfolio composition.

Stock market

performance

(Strategic risk)

Risk that fluctuations in the stock market can affect the

value of investments.

Asset allocation. The Company risk management

approach mixes a wide variety of investments within the

portfolio. The Company portfolio is composed of

diversified and different kinds of investment,

consequently characterised by an overall lower risk

level.

The diversification by sector and geography for

example mitigates unsystematic risk events in the

portfolio, so the positive performance of some

investments neutralises the negative performance of

others.

Financial structure /

availability of cash

(Financial risk)

Risk related to the financial structure with a potential

increase in financial costs for Exor and not having

sufficient credit available to catch investment

opportunities and/or to assists in case of financial

difficulties of the subsidiaries.

Careful management of cash in / cash out and

investment portfolio diversification. Exor maintains an

adequate cash flow management by performing cash

flow analysis, adjusting and monitoring the flows on a

regular basis.

The Company diversifies the sources of financing and

manages the maturity and the cost through active

liability management.

General state of the

economy / potential

changes in the economic,

social or political

environment

(Financial risk)

Risk related to developments in the political /

economic / social environment (e.g. legislation,

nationalisation, terrorism, general state of the economy,

transition to lower carbon economy, supply chain

disruption) of the countries where the Company and/or

the subsidiaries operate, with potential adverse effects

on the businesses in which they operate.

The Company risk management approach and

investment procedures ensure diversification of the

portfolio and global presence of the operating

subsidiaries.

BOARD REPORT

Other risk factors1

Based on the regular assessment performed by Exor, this section provides a list of other risk factors that may be

considered relevant apart from the main risks disclosed above.

The following risk factors, in the judgement of the Board of Directors, are deemed relevant to the expectation of

the Company’s continuity for the period of twelve months after the preparation of the Board Report.

As a long-term investor, Exor is also vigilant with regard to the occurrence of emerging risks which, without

constituting specific risks at this stage, are the subject of particular attention. As such, the climate risk (i.e. the

impact that global warming could have on its business or that of its portfolio companies) is considered. The

transformation of working methods with the rise of remote working is likely to pose new risks in terms of both

cyber security and attractiveness and talent retention. Other risks, of which Exor is unaware as of the date of this

document, may also exist or arise.

Exor indirectly faces specific risks related to the companies, which are identified and addressed by the companies

themselves within the framework of their own internal control. The analysis conducted by these entities in terms of

risk identification and internal control is described in the reference documents available on their website.

RISKS RELATED TO BUSINESS, STRATEGY AND OPERATIONS

Risks relating to international markets and exposure to changes in local conditions and trade policies, as

well as economic, geopolitical or other events

Exor’s earnings and financial position, and those of its subsidiaries and associates, are particularly influenced by

the general state of the economy in the countries in which they operate and by the variables which affect

performance, including increases or decreases in gross national product, access to credit, the level of consumer

and business confidence, the cost of raw materials and the rate of unemployment. The principal sectors of

business are also subject to highly cyclical demand and tend to reflect the overall performance of the economy, in

certain cases even amplifying the effects of economic trends.

Moreover, the evolution of world monetary and financial market conditions and the associated uncertainties,

especially in emerging markets, could adversely affect present economic conditions.

The principal risks associated with a slowdown in the markets in which Exor’s investments operate comprise

increases in energy prices and fluctuations in raw materials or possible contractions in infrastructure spending. In

addition, in the Eurozone, unemployment remains significant, and a slow or inefficient implementation of structural

reforms and budget adjustments in the public and private sectors will continue to hamper the pace of the recovery.

Exor is also susceptible to risks relating to epidemics and pandemics of diseases. The outbreak of coronavirus

COVID-19, a virus causing potentially deadly respiratory tract infections, which was declared a global pandemic

by the World Health Organization in March 2020, led to governments around the world mandating increasingly

restrictive measures to contain the pandemic, including social distancing, quarantine, “stay-at-home” or similar

orders, travel restrictions and suspension of non-essential business activities.

Notwithstanding, the ultimate impact of the pandemic on Exor’s business, results of operations and financial

condition will depend on numerous evolving factors and future developments that Exor is not able to predict,

including the ultimate duration, spread and severity of the outbreak and potential subsequent waves (e.g. delta

and Omicron variant), the ultimate extent and duration of the effect on the global economy and how quickly and to

what extent normal economic and operating conditions can resume.

The ongoing coronavirus pandemic and any possible future outbreaks of other viruses may have a significant

adverse effect on Exor and its capability to fully achieve its investing strategies and cause delays in the

completion, or failure to complete, any acquisition, disposal, merger, joint venture or similar transaction.

Exor may also be exposed through its investments to any market downturn arising in connection with the UK's exit

from the European Union (Brexit). The United Kingdom (UK) left the European Union (EU) on 31 January 2020

and the transition period ended on 31 December 2020. The precise impact of the future relationship between the

UK and the EU on the business of Exor is difficult to determine.

BOARD REPORT

1 This section is not intended to provide a full list of all of the Exor’s risk factors.

Although Exor does not believe Brexit will have a direct material impact on its financial position, the form of Brexit

remains uncertain and may result in greater restrictions on imports and exports between the UK and EU countries,

a fluctuation in currency exchange rates and additional regulatory complexity as well as further global economic

uncertainty, all of which could have a material adverse effect.

The exit of the United Kingdom (or any other country following the example of the United Kingdom) from the

European Union, the potential decision of any European country that adopted the Euro to adopt a different

currency, or prolonged periods of uncertainty connected to these circumstances could have significant negative

impacts on international markets, including further declines in stock exchange indices and in the value of Sterling

and the Euro and/or greater volatility of markets in general due to the increased uncertainty, with possible negative

consequences on Exor and/or Exor’s investments, operating results, capital and financial condition.

In addition to the above and given that there is currently no legal procedure or practice aimed at facilitating the exit

of a Member State from the Euro, the consequences of these decisions are exacerbated by the uncertainty

regarding the methods by which a Member State could manage its current assets and liabilities denominated in

Euros and the exchange rate between the newly adopted currency and the Euro. A collapse of the Eurozone could

be accompanied by the deterioration of the economic and financial situation of the European Union and could

have a significant negative effect on the entire financial sector, creating new difficulties in the granting of sovereign

loans and loans to businesses and involving considerable changes to financial activities both at market and retail

level. Should this occur, Exor and/or Exor’s investments, financial condition and results of operations would be

materially adversely affected.

New or revised agreements between the United States and its trading partners may also impact business and

potential changes in tax laws that could adversely affect US operations. These developments have introduced an

elevated level of economic and policy uncertainty and could have a material adverse effect on business, financial

condition and results of operations. Such developments could cause financial and capital markets within and

outside the US and Europe to constrict, thereby negatively impacting Exor’s ability to finance its business.

The rapidly escalating tensions between Russia and Ukraine led to Russia’s invasion of Ukraine on

24 February 2022 and represent a tragedy to the people. In response to these events, certain regions (including

the United States, the United Kingdom and the EU) imposed sanctions against certain Russian individuals and

entities. Moreover, there is further disruption imposed on people and economic activity both at a regional and

global scale across all sectors such as supply chains, commodity prices and exchange rates, in addition to

volatility of the global markets and financial system. Exor’s subsidiaries have conducted business in jurisdictions

that may be subject to trade or economic sanctions and such sanctions could be expanded. If Exor and its

subsidiaries fails to comply with sanction regimes or other similar laws or regulations, they could be subject to

damages and potentially other financial penalties, suspension of licenses, or a cessation of operations at its

businesses, as well as damage to its brands’ images and reputations. The overall effect of these factors on Exor’s

business cannot be estimated with a sufficient degree of confidence. Exor will continue to closely monitor the

developments.

It is therefore not possible to provide an accurate indication of the future trends of the above factors and variables

which may have an adverse impact on the demand for products and services, earnings, business prospects and

the financial position of Exor and its subsidiaries and associated.

Risks relating to the business, operations and profitability of Exor

The composition of Exor’s investment portfolio may vary substantially from time to time. Maintaining long-term

ownership in investments and a flow of investments and divestments in new investment activities involves

commercial risk, such as having a high exposure to a certain industry or an individual holding, changed market

conditions for finding attractive investment candidates or barriers that arise and prevent exit from a holding at the

chosen time.

BOARD REPORT

Exor does not have operations or significant assets other than the capital stock of its subsidiaries and other

intercompany balances. Exor has cash outflows in the form of other expenses, payments on its indebtedness and

dividends to its shareholders. Exor relies primarily on cash dividends and payments from its subsidiaries to meet

its cash outflows. In particular, Exor does not have a significant operating business of its own and, accordingly,

Exor’s financial condition depends upon the results of its investment activities, including the receipt of funds by

other members of the Group. Exor expects future dividends and other permitted payments from its subsidiaries to

be the principal source of funds to repay its indebtedness and to pay expenses and dividends. The ability of Exor's

subsidiaries to make such payments (in the form of dividends and intercompany payments) depends on their

economic performance and financial condition and may also be limited by contractual or regulatory constraints. No

assurance can be given that Exor will receive adequate funding to maintain its financial condition.

The financial results of the Exor Group and of Exor are no indicators of the future profitability of Exor. For the 2021

financial statements, the Group’s assessment is that no material uncertainties (as defined in paragraph 25 of

IAS 1 - Presentation of Financial Statements) exist about its ability to continue as a going concern.

There can be no assurance concerning the profitability of Exor in future periods.

Risks associated with the distribution of dividends

The distribution of dividends by Exor and the amount of such dividends depend on the Company’s future profits

which in turn depend on the dividends distributed by Exor’s subsidiaries and associates and on the gains realised

on divestment of these companies, events which by their nature are neither periodic nor recurrent.

The failure to achieve the objectives of the business plans of subsidiaries and associates due to, among other

things, deterioration of economic and financial conditions and of the general conditions of the market, may have a

significant negative effect on the economic results and financial position of Exor’s subsidiaries and associates and

affect their capability to pay dividend to Exor.

Therefore, no assurance can be given with regard to the fact that Exor will receive constant flows of dividends

from the subsidiaries and associates which depend on the economic and financial performance and the

investment and dividend policies of such companies.

Accordingly, Exor’s results in different financial years may not be regular and/or comparable. Where investments

have been made having recourse to debt financing, part of the resources arising from the divestment will, as a

priority, be applied in repayment of such debt and only the remaining part may be used for the distribution of

dividends. In addition, Exor or its investments may be bound contractually or otherwise to not distribute dividends

or to distribute limited dividends in certain circumstances or periods. It will be recalled that the dividends

distribution by PartnerRe depends also on capital requirements, including regulatory requirements.

Further, Exor does not have a policy for the payment of dividends (for example a minimum distribution per share in

absolute terms or as a percentage-dividend payout) and has not made any specific undertaking in this respect.

Risks relating to Exor’s credit rating

Exor's corporate credit rating from S&P is currently “BBB+” for long-term debt and “A-2” for short-term debt with a

stable outlook. Its ability to access capital markets, and the cost of borrowing in those markets, is highly

dependent on its credit ratings. The rating agencies may review their ratings for possible downgrades, and any

downgrades would increase Exor’s cost of capital, potentially limiting its access to sources of financing, and could

negatively affect its businesses.

Risks associated with market conditions

Exor holds investments in both publicly listed companies and unlisted companies. The value of the investments in

listed companies is based on their market prices, whereas for investments in unlisted companies one of the

methods used to value the shareholdings is based on multiples of comparable listed companies. Therefore,

changes in prices and market conditions can negatively impact the value of Exor’s business operations. A

substantial weakening of equity and/or bond markets or changes in interest rates and/or currency exchange rates

could impact negatively on the value of Exor’s investments.

Further, the operating costs which Exor incurs cannot be reduced with the same speed as a fall or unabated

decline in financial markets and, in the case of inadequately efficient cost management, this could negatively

impact the financial results of Exor.

BOARD REPORT

Risks associated with the sectors and markets in which Exor’s subsidiaries and associates operate

Through its investments in subsidiaries and associates, Exor currently operates mainly in the sectors of

reinsurance (PartnerRe), automobile (Stellantis), trucks, commercial vehicles, buses (Iveco Group, spun off from

CNH Industrial in January 2022), tractors, agricultural and construction equipment (CNH Industrial), performance

and luxury cars (Ferrari), media, publishing and editorial (GEDI and The Economist Group) and professional

football (Juventus Football Club). As a result, Exor is exposed to the risks typical of the sectors and markets in

which such subsidiaries and associates operate. Therefore, the performance of the main subsidiaries has a very

significant impact on the earnings, financial position and cash flows of Exor.

In the football industry, revenues are driven by the performance of football teams. Therefore, revenues of football

teams may vary significantly depending on their participation and performance in domestic and international

competitions. Also, business and financial performances are affected significantly by transactions made as part of

the transfer campaign and the management of a player’s registrations rights. A significant portion of the revenues

of Juventus includes, but is not limited to, its broadcasting and media rights, the management of its brand,

sponsorship and advertising market.

Revenues deriving from such activities may be affected by various circumstances, such as future changes to the

rules and criteria set out both at national and European level to govern the distribution of the broadcasting and

media rights and by events in the football industry that, even if unrelated to Juventus, may negatively affect its

brand or reputation. Juventus’ sponsorship and advertising revenues are also affected by the terms and conditions

of the relevant sponsorship and advertising agreements; when the current agreements expire, Juventus may not

be able to renew or replace them with contracts on similar or better terms.

In respect of the editorial, publishing and media industry, companies operating in the sector derive substantial

revenues from the sale of advertising on newspapers, inserts and websites. Expenditures by advertisers tend to

be cyclical, reflecting overall economic conditions and buying patterns. In addition, newer technologies and free-

press are increasing the number of media available to audiences and may cause changes in consumer behaviour

that could affect the attractiveness of the media and publishing industries’ offerings, both to advertisers and to the

public generally, which could have an adverse effect on the relevant business. The publishing industry is also

largely exposed to the threat of content piracy and infringement of intellectual property rights. Furthermore, in

general, the industry is highly regulated by laws and regulations issued and administered by various authorities;

such authorities regulate, among other things, the ownership of media and various authorities have under

consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters,

including technological changes, which could, directly or indirectly, adversely affect the editorial, publishing and

media industry business.

The sectors and markets in which the Exor's principal investments operate have already been affected by the

current COVID‑19 pandemic. In particular, the adoption of lockdown measures taken to limit the spreading of

COVID‑19 have caused, and may continue to cause, a decline in demand for the products and services that

Exor’s subsidiaries and associates provide and as a result adversely impact the business and operations of Exor’s

subsidiaries and associates.

Exposure to financial counterparty risk

Exor is exposed to financial institution counterparty risk and will continue to be exposed to the risk of loss if

counterparty financial institutions fail or are otherwise unable to meet their obligations. Financial services

institutions are inter-related as a result of trading, counterparty and other relationships. Exor has exposure to

many different industries and counterparties and routinely executes transactions with counterparties in the

financial industry, including financial intermediaries, brokers and dealers, commercial banks and investment banks

for its own account. Defaults by, or even the perceived questioning of the creditworthiness of, one or more

financial services institutions or the financial services industry, generally, has led and may continue to lead to

market-wide liquidity problems and could also lead to losses or defaults. The exact nature of the risks faced by

Exor is difficult to predict and guard against in view of the severity of the global financial crisis and the fact that

many of the related risks to the business are totally, or in part, outside of Exor's control.

BOARD REPORT

Risks associated with the consolidated indebtedness of the Exor Group

The overall amount of the consolidated indebtedness of the Exor Group could have a significant negative impact

on the business and the financial performance of Exor and of the Exor Group. A deterioration in market conditions,

which the companies of the Group were not able to tackle rapidly, could have negative effects on revenues and

cash flows of Group companies; such a situation could result in higher financial charges with a consequent

negative impact on the profitability of such Group companies and as a consequence on the flow of dividends and

other payments to Exor.

The deterioration of the economic and financial position of the Group companies could, also, have negative effects

on the possibility of accessing sources of additional funding for the achievement of the business objectives of Exor

and of the Group companies, for capital expenditure, working capital and the repayment of debt as well as on the

cost of the latter; such circumstances could render the Group more vulnerable. Further, if Exor and the other

companies in the Group should fail to generate the financial resources necessary to repay debt within the terms

agreed, they would be compelled to seek other financial resources or to refinance or renegotiate existing debt on

more onerous terms and conditions, with the consequent limitation of available funds and the increase of the

related costs.

Any difficulty in obtaining financing could have a significant impact on the Group, its business prospects and its

profits. It should be noted that Exor has not given any guarantees regarding the indebtedness of its operating

subsidiaries and associates.

Risks associated with acquisitions and disposals

No assurance can be given that the present investments or those in the future, if completed, will not impact

negatively on Exor’s results and financial position in the short and/or the medium term and on its ratings and will

not encounter obstacles of an administrative, legal, technical, industrial, operational, regulatory or financial policy

nature or other difficulties, such that they may not assure the achievement of the results, objectives or benefits

expected. Exor is also exposed to the risk that the disposal of its investments may be effected on terms and

conditions which are unsatisfactory with consequent negative impacts on its financial position and on its own

prospects.

Exor is a diversified holding company and in the normal course of its business assesses new investment

opportunities as well as opportunities to disinvest, such activity being its core business. In assessing new

investment opportunities, Exor intends to keep its indebtedness at a level consistent with the objective of

maintaining an investment grade rating, that is to say a ”BBB” or higher. Any delay in completing, or the failure to

complete, an acquisition, disposal, merger, joint venture or similar operation, could prejudice the full achievement

or delay fully achieving, the results and the benefits expected for Exor, and could have significant negative

repercussions on its business prospects and on its results and/or its financial situation.

Risks associated with the investment portfolio and the concentration of investments

Exor is a diversified holding company, with the financial results of its major investments and the capital distributed

by the companies invested (as dividends or otherwise) having a significant impact on its performance.

Since Exor holds a limited number of investments, the economic and financial performance of Exor may be

materially influenced by the negative economic and financial results even of a single investment. In fact, a high

level of concentration in specific regions and sectors can create significant economic risks for the portfolio in the

event of a downturn in those regions or sectors.

Exor’s investment portfolio is monitored and analysed constantly both through the use of corporate governance

rights (e.g. board representation) and through constant dialogue with the management of the companies without

affecting their independence as the managers of the companies.

Exor does not have a specific policy on investment and disposals: investment decisions taken by Exor are

formulated on the basis of in-depth assessments and the expertise developed in specific sectors, as well as on the

basis of the potential contribution of the individual investment to the geographical and sector diversification of the

portfolio and of its capacity to generate future cash flows.

Disposals have been guided by the wish to reduce exposure to non-global businesses or the wish to take

advantage of concrete opportunities to divest in a market which offered an adequate economic result.

BOARD REPORT

The maintenance of long-term investments and the decisions to invest and divest entail business risks, such as

having a concentrated portfolio in one or a few companies or industries, being subject to movements and changes

in market conditions and having to deal with obstacles holding back the disposal of investments. This also means

that, immediately after the disposal of a (or several) significant portfolio investment (or investments), Exor could

temporarily be exposed to few companies or industries, exhibiting low levels of portfolio diversification.

Risks associated with the loss of key management figures

The success of Exor and of the Exor Group has depended, and will continue to depend, partially upon the ability

to attract and retain management personnel and its abilities to manage efficiently Exor and the Exor Group. If the

Exor Group should lose the contribution of key executives, this could have a significant negative effect on the

business prospects as well as on the financial results and/or financial position.

Furthermore, if one or more managers should resign from service with Exor or with Exor’s investee companies

and should it not be possible to adequately replace them in a timely manner with persons of equal skill and

experience, the competitive capacity of such companies could diminish with potentially negative effects on the

business and on the ability to replicate the results achieved in the past.

Risks associated with the presentation of consolidated data in shortened form (Shortened Consolidation)

The Shortened Consolidation data is prepared by Exor on the basis of a “shortened” method of consolidation in

which the data derived from the IFRS financial statements of Exor and of the subsidiaries of the Holdings System:

Exor Nederland N.V. (the Netherlands); Exor S.A. (Luxembourg); Ancom USA Inc. (USA); Exor SN LLC (USA);

Exor Investments Limited (United Kingdom) are included in the financial statements of the parent company Exor

using the line-by-line method, while the data derived from the financial statements prepared in accordance with

IFRS of the operating subsidiaries and associates (PartnerRe, CNH Industrial, Ferrari, Juventus Football Club,

GEDI, Exor Seeds, Shang Xia, Stellantis, Christian Louboutin, The Economist Group, Welltec and Exor Capital)

are included in the financial statements of the parent company Exor using the equity method.

While the data and information prepared using the shortened consolidation method are recognized by the financial

community, by financial counterparties and by the rating agencies, and Exor believes that these data and

information facilitate analysis of the financial position and results of Exor, such data do not fully represent, nor

should be treated as the consolidated financial position of the Exor Group prepared in accordance with

International Financial Reporting Standards (IFRS). In fact the shortened consolidation method is not

contemplated in the reference accounting standards on the presentation of consolidated financial statements and

may not be consistent with the method adopted by other groups and, therefore, such data may not be comparable

with the data reported by such groups.

The consolidated data prepared in shortened form are not audited by the independent auditors.

Risks and uncertainties associated with the development and interpretation of tax regulations

The economic and financial activities of Exor and of its principal subsidiaries and associates make it subject to a

variety of taxes and duties. Exor and those subsidiaries and associates are, therefore, exposed to the risk that the

level of taxation to which they are subjected may rise in the future. Any such increase in the level of taxation, or

the introduction of new taxes, to which Exor and its principal subsidiaries and associates may be subjected, could

have negative effects on the economic results and financial position of Exor.

Additionally, Exor and its principal investee companies are also exposed to risk from the interpretative complexity

of tax regulations and may from time to time be subjected to inspections by the tax authorities. This complexity

may also have an impact on future acquisition and divestment operations.

BOARD REPORT

RISKS RELATED TO THE COMMON SHARES

Risk related the presence of a majority shareholders

Exor is controlled by a majority shareholder with the ability to sell its shares. This situation could have an adverse

effect on Exor’s stock price. Based on the most recent information available Giovanni Agnelli B.V. holds 52.99% of

the issued capital of Exor, such that its control is not at present contestable.

In addition, this control situation implies that decisions of the majority shareholder could have adverse

consequences for Exor.

The loyalty voting structure could have a negative effect on the liquidity of the common shares, may make

it more difficult for shareholders to acquire a controlling interest, change the management or the strategy

of the Group or exercise influence over it, resulting in a reduction in the market price of the common

The introduction of the Special Voting Structure is intended to reward long-term shareholding and provide an

incentive for a stable shareholder base, giving shareholders the opportunity to decide to receive special voting

shares after a certain uninterrupted period of ownership of common shares.

The provisions of the Articles of Association which establish the Special Voting Structure, allowing qualifying

shareholders to exercise up to 5 or 10 voting rights for each Exor common share held, may make it more difficult

to acquire, or attempt to acquire, control of Exor and prevent or discourage any initiatives seeking to change

Exor’s management, even if a change of control were considered favourably by shareholders holding the majority

of the Exor common shares.

The Special Voting Structure may prevent or discourage initiatives of shareholders seeking to change the

ownership structure or the strategy of Exor or to exercise their influence and also may prevent or discourage

initiatives of shareholders seeking to bring about changes in the company’s management.

Shareholders who hold a significant quantity of Exor common shares for the uninterrupted periods prescribed in

the Articles of Association and who request special voting shares could be in a position to exercise a significant

quota of voting rights at meetings of shareholders and to have substantial influence over Exor.

The Special Voting Shares cannot be traded and must be transferred to Exor for no consideration (om niet)

immediately prior to cancellation of the common shares from the Exor special register.

The Special Voting Structure could further reduce the liquidity of Exor common shares adversely affecting the

trading price in the market.

It should be recalled, however, that the Special Voting Structure will begin to have its effect only when five years

have passed from the date of adoption of the new Articles of Association following the Merger’s becoming

effective, assuming that the holders of Exor common shares satisfy the conditions for requesting Special Voting

Shares.

No Special Voting Shares had been issued at the December 2016 Merger date, while after the maturity terms

some shareholders registered in the Exor special register have requested to receive Special Voting Shares; at

31 December 2021 there are 124,717,132 Special Voting Shares outstanding, entirely issued to Giovanni Agnelli

B.V.

Risks related to the tax treatment of Special Voting Shares

No statutory, judicial or administrative authority directly discusses how the receipt, ownership, or disposition of

Special Voting Shares should be treated for Italian or Dutch tax purposes and as a result the tax consequences in

the Netherlands are uncertain. The fair market value of the Exor Special Voting Shares, which may be relevant to

the tax consequences, is a factual determination and is not governed by any guidance that directly addresses

such a situation. Considering that the Exor Special Voting Shares are not transferable (other than, in very limited

circumstances, together with the associated Exor common shares) and that a shareholder’s rights to receive

amounts in respect of the Special Voting Shares are extremely limited, Exor believes and intends to take the

position that the fair market value of each Special Voting Share is minimal. However, the relevant tax authorities

could assert that the value of the Special Voting Shares as determined by Exor is incorrect. The tax treatment of

the Special Voting Shares and the consequences of acquiring them, therefore, are not entirely clear and

established.

BOARD REPORT

CORPORATE GOVERNANCE

BOARD REPORT

GOVERNANCE

Introduction

EXOR N.V. (“Exor” or the “Company”) is a public limited liability company (naamloze vennootschap), incorporated

under the laws of the Netherlands. Its shares are listed in Italy on the Euronext Milan, organized and managed by

Borsa Italiana S.p.A. (the “EXM”). The Company’s legal and tax residence is in the Netherlands.

Exor attaches great importance to good corporate governance. The board of directors of Exor (the ''Board'' or

''Board of Directors''), consisting of executive directors (the ''Executive Directors'') and non-executive directors (the

''Non-Executive Directors''), is responsible for the corporate governance structure of Exor. Exor endorses the Dutch

Corporate Governance Code’s principles and best practice provisions adopted by the Monitoring Committee

Corporate Governance Code 2016 (the “Dutch Corporate Governance Code”). The purpose of the Dutch Corporate

Governance Code is to facilitate, with or in relation to other laws and regulations, a sound and transparent system

of checks and balances within Dutch listed companies and, to that end, to regulate relations between the Board of

Directors, its committees and its shareholders.

It should be noted that the Dutch Corporate Governance Code provisions primarily refer to companies with a two-

tier board structure (consisting of a management board and a separate supervisory board), while Exor has

implemented a one-tier board. The best practices reflected in the Dutch Corporate Governance Code for

supervisory board members apply by analogy to Non-Executive directors.

This Annual Financial Report provides the relevant information on the overall corporate governance structure of the

Company. This report also includes information which the Company is required to disclose pursuant to the Dutch

Decree on section 10 of the Directive on takeover bids (“Takeover Directive”).

Exor discloses in this Annual Financial Report and intends to disclose in its future Annual Financial Reports, any

material departure from the best practice provisions of the Dutch Corporate Governance Code.

Corporate Offices and Home Member State

The Company has its corporate seat at Gustav Mahlerplein 25, 1082 MS Amsterdam, the Netherlands. Exor has

elected the Netherlands as Home Member State for the purposes of Article 2, paragraph 1, letter i), Article 20 and

Article 21 of the Directive 2004/109/EC of the European Parliament and the Council of 15 December 2004 (the so-

called “Transparency Directive”). The Company is registered in the Dutch Commercial Register under number

64236277.

BOARD OF DIRECTORS

Pursuant to the articles of association of the Company (the ''Articles of Association''), the total number of members

of the Board must be at least seven and at most nineteen (the “Directors”, each of them individually a ''Director'').

The members of the Board were initially appointed on 11 December 2016, being the effective date of the cross-

border merger of EXOR S.p.A. with and into the Company. The members of the Board have been reappointed at

the annual general meeting of shareholders (''Annual General Meeting of Shareholders'') on 20 May 2020. During

this last Annual General Meeting of Shareholders, the Directors were reappointed for a term of three years, each of

them until the closure of the Annual General Meeting of Shareholders convened in 2023 for approval of the 2022

annual accounts. Mr. A. Banga has been appointed as non-executive director at the Annual General Meeting of

Shareholders on 27 May 2021 for a term of two years until the closure of the Annual General Meeting of

Shareholders convened in 2023 for approval of the 2022 annual accounts.

Pursuant to the Articles of Association and the Dutch Corporate Governance Code, the term of office of Directors

may not exceed a maximum period of four years at a time. A Director who ceases office in accordance with the

previous provisions is immediately eligible for re-appointment.

The Board of Directors is entrusted with the management of the Company and as a whole is responsible for the

strategy of the Company, which is determined in order to realize long-term value creation for the Company. In the

performance of its tasks, the Board of Directors is guided by this long-term value creation and takes into account

the stakeholder interests that are relevant in this context. The Board of Directors is composed of one executive

director, the Chief Executive Officer and Chairman of the Company (the "Executive Director"), having the day-to-

day responsibility for management of the Company, and eight Non-Executive Directors. The Non-Executive

Directors do not have day-to-day responsibility and their duty is to supervise the Executive Director. Each Director

is responsible for the general course of affairs of the Company and the business connected with it.

BOARD REPORT

Pursuant to article 19 of the Articles of Association, the general authority to represent the Company is vested with

the Board of Directors or the Executive Director acting independently.

By means of the resolution adopted on 12 December 2016, the Board of Directors appointed the following internal

committees: (i) an audit committee (the "Audit Committee") and (ii) a compensation and nominating committee (the

"CNC"). The Board of Directors appointed an ESG committee during its meeting held on 27 May 2021.

The table below shows the name, year of birth, position held, appointment date and current term in office of each of

the Directors.

Name

Year of

birth

Position

Nationality

(Re)Appointment

date

Current period

in office(a)

Mr. John Elkann

1976

Chairman and Chief

Executive Officer

Italy

20 May 2020

5 years

Mr. Alessandro Nasi

1974

Vice Chairman and

Non-Executive Director

Italy

20 May 2020

5 years

Mr. Andrea Agnelli

1975

Non-Executive Director

Italy

20 May 2020

5 years

Mrs. Ginevra Elkann

1979

Non-Executive Director

Italy

20 May 2020

5 years

Mr. Marc Bolland

1959

Senior Non-Executive

Director

The Netherlands

20 May 2020

5 years

Mr. Joseph Bae

1972

Non-Executive Director

U.S.A.

20 May 2020

3 years

Mr. Ajay Banga(b)

1959

Non-Executive Director

U.S.A.

27 May 2021

1 year

Ms. Melissa Bethell

1974

Non-Executive Director

United Kingdom

20 May 2020

4 years

Mrs. Laurence Debroux

1969

Non-Executive Director

France

20 May 2020

4 years

Mr. António Horta-Osório(c)

1964

Non-Executive Director

Portugal

20 May 2020

4 years

(a)Years since the first appointment as Director by the Annual General Meeting of the Company.

(b)Appointed per 27 May 2021.

(c)Resigned per 27 May 2021.

Five of the eight Non-Executive Directors (representing a majority) qualify as independent for the purposes of the

Dutch Corporate Governance Code.

The following members are considered independent within the meaning of the Dutch Corporate Governance Code:

–Marc Bolland;

–Joseph Bae;

–Ajay Banga;

–Melissa Bethell;

–Laurence Debroux.

The Board of Directors has resolved to grant to the following people a specific title:

–John Elkann: Chief Executive Officer and Chairman;

–Alessandro Nasi: Vice-Chairman;

–Marc Bolland: Senior Non-Executive Director. According to article 18 of the Articles of Association, the

chairman of the Board, as referred to in the Dutch Civil Code, has the title of “Senior Non-Executive

Director”.

The composition of the Board of Directors, and their respective CVs, is as follows:

BOARD REPORT

John Elkann (1976) - Chairman and Chief Executive Officer (Executive Director)

John Elkann is the sole Executive Director and CEO of Exor. He obtained a scientific baccalaureate from the Lycée

Victor Duruy in Paris, and graduated in Engineering from Politecnico, the Engineering University of Turin. While at

university, he gained work experience in various companies of the Fiat Group in the UK and Poland

(manufacturing) as well as in France (sales and marketing). He started his professional career in 2001 at General

Electric as a member of the Corporate Audit Staff, with assignments in Asia, the USA and Europe.

Additional positions:

John Elkann is currently chairman of Stellantis N.V. (formerly FCA N.V.), Ferrari N.V. Giovanni Agnelli B.V. and

GEDI Gruppo Editoriale S.p.A. In addition, he is chairman of the Giovanni Agnelli Foundation, a member of MoMA

and of the JP Morgan International Council.

Alessandro Nasi (1974) - Vice Chairman and Non-Executive Director

Alessandro Nasi obtained a degree in Economics at the University of Turin. He started his career as a financial

analyst in several banks, gaining experience at a division of Unicredit in Dublin, at PricewaterhouseCoopers in

Turin, at Merrill Lynch and JP Morgan in New York. He then joined JP Morgan Partners in New York as an

Associate in their Private Equity Division. In the years thereafter, he held various senior managerial positions at

Stellantis (formerly Fiat Group) and CNH Industrial.

Additional positions:

Alessandro Nasi serves as chairman of the board of Iveco Defence, Comau and Astra and is a member of the

board of CNH Industrial, Iveco Group and Giovanni Agnelli B.V. In addition, he is a member of the advisory board of

the Lego Brand Group and an independent director of GVS S.p.A.

Andrea Agnelli (1975) - Non-Executive Director

Andrea Agnelli studied at Oxford (St Clare’s International College) and Milan (Università Commerciale Luigi

Bocconi). While at university, he gained professional experience both in Italy and abroad, including positions at

Iveco-Ford in London, Piaggio in Milan, Auchan Hypermarché in Lille, Schroder Salomon Smith Barney in London

and is currently the executive chairman at Juventus Football Club S.p.A. in Turin.

He began his professional career in 1999 at Ferrari Idea di Lugano and moved to Paris later and assumed

responsibility for marketing at Uni Invest SA, a Banque San Paolo company specializing in managed investment

products. He furthermore held positions in companies such as Philip Morris International and IFIL Investments

S.p.A. (now EXOR N.V.).

Additional positions:

Andrea Agnelli is a director of Giovanni Agnelli B.V., Stellantis N.V. (formerly FCA N.V.) and a member of the

advisory board of BlueGem Capital Partners LLP. In addition, he is the executive chairman of Lamse S.p.A. From

2012 to 2021, he was a member of the Executive Board of the European Club Association (ECA), which he served

as Chairman from September 2017. Between 2015 and 2021, he held the position as ECA representative at the

UEFA Executive Committee. In April 2021 he assumed the position of Vice President of the Super League, of which

Juventus is a founding member. He is also the president of "Fondazione del Piemonte per l’Oncologia".

Ginevra Elkann (1979) - Non-Executive Director

Ginevra Elkann graduated in Visual Communication at the American University of Paris and completed a Master in

Film Making at the London Film School. Ginevra Elkann is president of Asmara Films, a film production company

founded in 2010.

Additional positions:

Since 2011, she is the president of Pinacoteca Giovanni and Marella Agnelli. She sits on the Boards of Christie’s,

Foundation Cartier and UCCA in Beijing, China. In addition, Mrs. Elkann sits in the board of trustees of the

American Academy in Rome. Since April 2021, she is a board member of Christian Louboutin SAS.

BOARD REPORT

Marc Bolland (1959) - Senior Non-Executive Director

Marc Bolland graduated with an MBA from the University of Groningen in the Netherlands. In November 2011, he

was awarded an Honorary Doctorate from the University of York, in the UK. He began his professional career at

Heineken N.V. in 1987 as a Management trainee. During his first 14 years he occupied several international

management positions at Heineken N.V., WM Morrison Supermarkets plc, Marks and Spencer plc and the

Blackstone Group International Partners LLP, where he currently is Chairman Europe.

Additional positions:

Marc Bolland is currently a non-executive director of the Coca-Cola company board, Atlanta USA. In addition, he is

a trustee of the Royal Collection Trust and the chairman of the Royal Collection Entreprises. He is also the vice

president at Unicef UK and was elected vice chairman of the Consumer Goods Forum in 2014. He was appointed

by HRH the Prince of Wales as his personal National Ambassador and was appointed by the Prime Minister as a

British Business Ambassador.

Joseph Bae (1972) - Non-Executive Director

Joseph Y. Bae holds a B.A., magna cum laude, from Harvard College. He is the co-chief executive officer of KKR.

Previously he was the managing partner of KKR Asia and the global head of KKR's Infrastructure and Energy Real

Asset businesses. He has also worked for Goldman Sachs & Co. in its principal investment area, where he was

involved in a broad range of merchant banking transactions.

Additional positions:

Mr. Bae has been a member of the board of directors of KKR & Co. Inc. since July 2017. He is the chairman of

KKR's Asia and Americas Private Equity Investment Committees and serves on KKR's European Private Equity,

Growth Equity, Energy, Global and Asia Pacific Infrastructure, Real Estate and Special Situations Investment

Committees. He is also a member of KKR's Inclusion and Diversity Council. He is active in a number of non-profit

educational and cultural institutions, including co-founding and serving on the board of the Asian American

Foundation, serving as a member of Harvard University's Global Advisory Council and serving as a member of the

Board and Executive Committee of the Lincoln Center.

Ajaypal Banga (1959) - Non-Executive Director

Ajay Banga is vice chairman at General Atlantic. He joined General Atlantic after 12 years at Mastercard, where he

served over 11 years as president and chief executive officer and one year as executive chair of the board of

directors. Mr. Banga began his career at Nestlé in India, where he worked on assignments spanning sales,

marketing and general management. He also spent two years with PepsiCo before joining Citigroup, where he rose

to the role of chief executive officer of Citigroup Asia Pacific.

Additional positions:

In addition, Ajay Banga serves as chairman of the International Chamber of Commerce and is an independent

director at Temasek. He is also an advisor to General Atlantic’s BeyondNetZero venture. Mr. Banga is a member of

the Trilateral Commission, the co-chair of the Partnership for Central America, a founding trustee of the U.S.-India

Strategic Partnership Forum and chairman emeritus of the American India Foundation. Furthermore, he is a co-

founder of The Cyber Readiness Institute, vice chair of the Economic Club of New York. He is also a member of the

Weill Cornell Medicine board of fellows.

Melissa Bethell (1974) - Non-Executive Director

Melissa Bethell has an MBA with distinction from Harvard Business School and received a BA with honours in

Political Science and Economics from Stanford University. She is currently a partner at Atairos, an investment fund

backed by Comcast NBC Universal, where she is the Managing Partner of Atairos Europe. She was previously a

managing director at Bain Capital for over 18 years and member of the senior leadership team responsible for

strategy setting, fundraising and portfolio management. Prior to joining Bain Capital, Ms. Bethell worked in the

Capital Markets group at Goldman Sachs & Co., with a focus on media and technology. Ms. Bethell previously held

non-executive director positions at Samsonite, Worldpay and Atento.

Additional positions:

In addition, she is a non-executive director of Tesco plc and Diageo plc.

BOARD REPORT

Laurence Debroux (1969) - Non-Executive Director

Laurence Debroux holds a Master in Management from HEC (Paris) and began her career in investment banking.

She has had Executive responsibility for Global functions such as Strategic Planning & Business Control, Tax &

Financial Markets, Business Development, Financial Processes & Internal Control, Accounting & Reporting,

Procurement and Information Systems. Laurence Debroux was CFO and member of the Executive Board of

Heineken N.V. from April 2015 until April 2021.

Before joining Heineken she had been chief financial and administrative officer and a member of the executive

board of JCDecaux since July 2010. Prior to this, Mrs. Debroux spent 14 years with the global healthcare company

SANOFI where she held various executive positions including CFO and chief strategic officer.

Additional positions:

In addition, Laurence Debroux is a member of the Board of Directors, Chair of the Audit Committee and member of

the Remuneration Committee of Novo Nordisk A/S; she is also a member of the Board of Directors of Juventus

S.p.A., and a non-executive director at Kite Insights (The Climate School) and HEC Paris.

António Horta-Osório (1964) - Non-Executive Director

António graduated in management and business administration at Universidade Católica Portuguesa and has an

MBA from INSEAD where he was awarded the Henry Ford II prize – and an AMP from Harvard Business School.

He has also been awarded Honorary Doctorates from the University of Edinburgh, the University of Bath, the

University of Warwick, the University of Birmingham and from the Universidade Catolica Portuguesa. He started his

career at Citibank Portugal and subsequently worked for Goldman Sachs in New York and London, Banco

Santander de Negócios Portugal, Santander Totta, Banco Santander Brazil. He has been the Chairman of Credit

Suisse Group since 1 May 2021 until 16 January 2022. Prior to joining Credit Suisse, he was the Group Chief

Executive of Lloyds Banking Group, to which he was appointed in 2011 at the invitation of the British Government

and led for 10 years.

In 2021 he was Knighted by Queen Elizabeth II, for his work in financial services as well as for voluntary services to

mental healthcare and culture. In 2014 the Government of Portugal awarded him with the Order of Merit Grã‐Cruz.

The Spanish Government in 2009 awarded him the order of Isabel la Catolica, Commander by Number and in 1998

he was also awarded the National Order of Cruzeiro do Sul from the Government of Brazil.

Additional positions:

In addition, he is the Chairman of the Board of Directors of BIAL in Porto, Portugal, and he is also a non‐executive

Director at Fundação Champalimaud, Stichting/Enable INPAR, at PartneRe, where he also chairs the Investment

Committee. Mr. Horta-Osório has been Chairman of the Wallace Collection since 2015 until December 2021.

Composition and diversity of the Board of Directors

The Company believes that it is a prerequisite for effective management and supervision of the Company to have a

Board of Directors that has an appropriate and diverse mix of skills, cultural/professional backgrounds, experience,

expertise and diversity factors (such as education, gender, age, nationality). The Board of Directors believes that,

considering the specific characteristics, the culture and the business of the Company, the Board of Directors has

the appropriate diversity mix, independence and judgment to allow the Board of Directors to fulfil its responsibilities,

execute its duties appropriately and to have a good understanding of the current affairs and long-term risks and

opportunities related to the Company’s business.

In this context, and as prescribed in the Dutch Corporate Governance Code, a diversity policy, included in the

board regulations, is in place, as to diversity in education, gender (composition to be at least 1/3 male and 1/3

female), background, knowledge, expertise and work experience, was adopted by the Board of Directors on

13 November 2017.

The Board of Directors endorses the importance of diversity in education, work experience, nationality, age and

gender and in addition, the Board of Directors tries to maintain a balance between experience and affinity with the

nature, culture and the business of the Company.

On 1 January 2022 new female quota rules (i.e. composition to be at least 1/3 male and 1/3 female) came into

force. These new rules apply to supervisory boards and non-executive directors of Dutch companies listed on

Euronext Amsterdam. An appointment in violation of the new rules is void, but does not affect the validity of any

board decision-making.

BOARD REPORT

The new rules do not apply to re-appointments of board members within a period of eight years from their first

appointment. Although these new female quota rules do not apply to the Company, because it is not listed on

Euronext Amsterdam, the Company voluntarily meets the female quota rules as prescribed by the Dutch company

law.

Currently, three of the nine members of the Board of Directors are female, being at least 1/3 male and 1/3 female.

The Company will continue to strive to meets the new female quota provisions.

Board Practice and Committees

Directors are expected to prepare themselves for and to attend all Board of Directors meetings, the Annual General

Meeting of Shareholders and the meetings of the committees of which they are a member of, with the

understanding that, on occasion, a Director may be unable to attend a meeting.

In total ten Board of Directors meetings were held in 2021. Due to COVID-19, the Directors participated in these

meetings mainly by means of video conference and when COVID-19 measures permitted in person. The table

below shows the attendance of the individual Board members at these meetings. In these meetings, the Board

discussed a number of subjects, including the general state of affairs, as well as the strategy of the Company,

investment opportunities, long-term value creation, the Company's 2021 objective, the values and purposes for the

coming years, ESG related topics, the external auditor rotation, debt management and the procedures and

evaluation of the functioning of the Board, its members and its Committees.

Director

Board of Directors

Audit Committee

Compensation and

Nominating Committee

ESG Committee

John Elkann

10/10

Alessandro Nasi1

10/10

3/3

Andrea Agnelli

9/10

Ginevra Elkann2

9/10

2/2

Marc Bolland3

10/10

3/3

1/1

Joseph Bae4

9/10

2/2

6/6

Ajay Banga5

7/7

1/1

Melissa Bethell4

8/10

5/5

3/3

Laurence Debroux

10/10

5/5

1/1

António Horta-Osório6

3/3

1Member of the Compensation and Nominating Committe until 27 May 2021.

2Member of the Audit Committee until 27 May 2021 and rejoined as of 7 September 2021.

3Joined the Compensation and Nominating Committee as of 27 May 2021.

4Joined the Audit Committee as of 27 May 2021 and member until 7 September 2021.

5Joined the board as of 27 May 2021.

6Resigned per 27 May 2021.

Evaluation

Annually, under the oversight and responsibility of the Compensation and Nominating Committee and of the Senior

Non-Executive Director and with the assistance of the general counsel, the Board of Directors evaluates and

discusses its own functioning and performance, the functioning of its Committees and its individual Directors. In

2021, the evaluation of the Board of Directors and its Committees consisted of a self-assessment facilitated by

written questionnaires. The main topics of the questionnaire related to the composition, competence, performance,

meeting information provision as well as oversight and involvement of the Board and the functioning of the internal

Committees. The outcome of the questionnaire (the response rate was 100%) was assessed and discussed in the

Compensation and Nominating Committee. The general impression emerged from this self-evaluation was positive.

In addition to the written questionnaires, the Senior Non-Executive Director and the chair of the Compensation and

Nominating Committee held individual conversation with each of the Directors. In these conversations, the overall

functioning of the Board, that of the individual Director and the Executive Director were discussed.

BOARD REPORT

The Committee, as well as the Senior Non-Executive Director, gave their feedback and recommendations in the

Board of Directors meeting in which the evaluation was further discussed. During this meeting, the functioning of

the individual Directors and the Board as a whole has also been considered in more detail and this has been very

insightful. The overall conclusion on the composition and functioning of the Board is good and supportive and the

Directors valued positively the open and constructive discussions as well as the discussions on purpose and long-

term strategy. Consequently, the general impression that emerged from this evaluation was good to excellent. A

further conclusion that could be drawn on the basis thereof, as prescribed by the best practice provision 2.2.8 of

the Dutch Corporate Governance Code, is that the Board would like to spend more time on the topics discussed in

the respective committee meetings and this topic is being addressed by reserving more time in the board meetings.

Board Regulations

The Board of Directors has adopted internal regulations in accordance with article 20.8 of the Articles of

Association; these were lastly amended on 26 March 2018. The Board aims to be as transparent as possible about

its working methods and therefore the regulations are publicly available on the Company's website (https://

www.exor.com/pages/exor/governance/corporate-regulations).

The regulations govern the operating of the Board of Directors and its Committees internally and contain provisions

concerning the manner in which meetings of the Board of Directors are convened and held, including the decision-

making process. In addition, the regulations further elaborate on topics such as conflicts of interests, related-party

conflicts and the relationship with shareholders.

Indemnification of Directors

To the extent permissible by law, as prescribed under article 24 of the Articles of Association, the Company is

required to indemnify any and all of its Directors, both former members and members currently in office or persons

who may have served at its request as a director or officer of another company, (each of them an “Indemnified

Person”), against any and all expenses actually and necessarily incurred by any of them in connection with the

defence of any action; suit or proceeding in which they, or any of them, are made parties, or a party, by reason of

being or having been Director or officer of the Company, or such other company, except in relation to matters as to

which any such person shall be adjudged in such action, suit or proceeding to be liable for gross negligence or

wilful misconduct in the performance of their duty. Such indemnification shall not be deemed exclusive of any other

rights to which those indemnified may be entitled otherwise, claims, judgments, fines and penalties (“Claims”)

incurred by the Indemnified Person as a result of any expected, pending or completed action, investigation or other

proceeding, whether civil, criminal or administrative, initiated by any party other than Exor itself or a controlled

entity of Exor, in relation to any acts or omissions in or related to their capacity as an Indemnified Person. Claims

will include derivative actions of or initiated by the Company or a group company thereof against the Indemnified

Person and (recourse) claims by the Company itself or a group company thereof for payments of claims by third

parties if the Indemnified Person will be held personally liable therefore.

Conflict of interests

At Exor, we strive to compose the Board in such a way that the Directors can operate independently and critically

with regard to each other, the Board and any particular interests. The Board of Directors adopted rules dealing with

conflict of interests and related party transactions on 5 April 2017 and last amended and updated these on

13 November 2019.

In general, any form of appearance or conflicting interests between the Company and members of the Board must

be avoided. Therefore, a Director of the Company is not allowed to participate in discussions or decision-making

within the Board of Directors, if with respect to the matter concerned he or she has a direct or indirect personal

interest that conflicts with the interests of the Company and the business connected with it (“Conflict of Interests”).

This prohibition does not apply if the Conflict of Interests exists for all Directors; should this be the case, the Board

of Directors shall maintain its power, subject to the approval of the general meeting of shareholders.

A Director having a Conflict of Interests or an interest which may have the appearance of such a Conflict of

Interests must declare the nature and extent of that interest to the other Directors. All transactions, where there is a

Conflict of Interests, must be concluded on terms that are customary in the branch or sector concerned and must

be approved by the Board of Directors.

In the financial year 2021, there were no transactions involving a conflict of interests with members of the Board.

BOARD REPORT

Determination of independence and related-party conflicts

To further ensure the independence of the members of the Board, each Director needs to inform the Board

(through the Company Secretary of the Board of Directors) as to all material information regarding any

circumstances or relationships that may impact their characterization as “independent,” or impact the assessment

of their interests. One of the ways in which this is done is by responding promptly to the annual questionnaire

circulated by or on behalf of the Company Secretary that is designed to elicit relevant information regarding

business and other relationships.

In addition, each Director shall annually assess in good faith whether he or she (i) is independent (as referred to in

best practice provision 2.1.8 of the Dutch Corporate Governance Code) and/or (ii) would have a Conflict of

Interests in connection with any transactions between the Company and a significant shareholder or related party

of the Company, including affiliates of a significant shareholder (such conflict being, a “Related-Party Conflict”).

Currently, Giovanni Agnelli B.V. would be considered a significant shareholder. Based on each Director’s

assessment, the Board of Directors shall make a determination at least annually regarding such Director’s

independence and such Director’s Related-Party Conflict.

These annual determinations shall be conclusive, absent a change in circumstances from those disclosed to the

Board of Directors that necessitates a change in such determination.

In the financial year 2021, there have been no Related Party Conflicts.

Mr. Elkann, Executive Director and chairman of Exor, also fulfils a role as chairman of Ferrari N.V., Stellantis N.V.

and Giovanni Agnelli B.V., the latter being the largest shareholder of the Company. Ferrari, Stellantis and certain

companies within their respective groups qualify as related parties to Exor and the Company may therefore have

potential conflicts of interests with these companies.

Amount and Composition of the remuneration of the Board of Directors

Details of the remuneration of the members of the Board of Directors and its committees are set forth under the

Section “Remuneration of Directors”.

THE AUDIT COMMITTEE

The Audit Committee, under the responsibility of the Board of Directors, assists and supports the Board of Directors

with its oversight of, amongst others: (i) the integrity and quality of the Company’s financial statements and the

auditors’ report thereon; (ii) the effectiveness of the risk management and the systems of internal controls that

management and the Board of Directors have established, including the internal audit reviews thereon; (iii) the

Company’s compliance with legal and regulatory requirements; (iv) the Company’s follow-up on recommendations

and observations of the internal and the independent auditors; (v) the Company’s policies and procedures; (vi) the

qualifications, independence and remuneration of the Company’s independent auditors and any non-audit services

provided to the Company by the independent auditors; (vii) the effectiveness and functioning of the Company’s

internal audit function and independent auditors; and (viii) the implementation and effectiveness of the Company's

ethics and compliance program.

The tasks and functions of the Audit Committee are described in the Audit Committee charter, which was last

amended and approved during the Board meeting held on 13 November 2018. The charter is published on the

Exor website (https://www.exor.com/pages/exor/governance/corporate-regulations).

Composition of the Audit Committee

The Audit Committee is elected by the Board of Directors and is composed of at least three Non-Executive

Directors. The majority of the Audit Committee should qualify as independent within the meaning of the Dutch

Corporate Governance Code and each member shall neither have a material relationship with the Company, as

determined by the Board of Directors nor perform the functions of auditors or accountants for the Company.

Furthermore, at least one member shall be a financial expert and have competence in accounting or auditing,

relevant knowledge and experience of financial administration and accounting for listed companies or other large

legal entities.

BOARD REPORT

Until 27 May 2021, the Audit Committee consisted of the following members:

▪Ms. M. Bethell (Chair);

▪Mrs. L. Debroux; and

▪Mrs. G. Elkann.

At 27 May 2021 Mrs. Debroux succeeded Ms. Bethell as Chair of the Audit Committee. Ms. Bethell remained on as

member, with Mrs. Elkann stepping down per that same date and rejoining the Committee as of 7 September 2021,

replacing Mr. Bae who served as a member of the Committee from 27 May until 7 September 2021.

The majority of the above members qualify as independent and the Board considers them to be financial experts.

Meetings

Unless the Audit Committee determines otherwise, the independent external auditors, the Chief Financial Officer,

the Chief Audit Executive as the internal auditor and the General Counsel will attend the meetings of the Audit

Committee. The Company’s Executive Director will be free to attend the meetings of the Audit Committee unless

the Audit Committee determines otherwise. The Audit Committee can also require him to join the meeting.

The Audit Committee met six times during 2021. The average attendance rate was 100%. In relation to the group

external auditor rotation the Audit Committee met on several occasions with the Steering Committee, advisors and

the tender candidates.

The main items discussed and/or reviewed during these meetings were, amongst others, the annual and semi-

annual financial reports; the risk assessment and risk appetite; appropriateness of the risk management & control

systems in place; the company’s and group external auditor rotation; the internal and external audit plans and

scope; updates on compliance and legal matters; review of updated policies; discussion of (i) the internal audit

assessment on the company-only/consolidated financial reporting, as well as on the tax and whistleblower/anti-

bribery and corruption procedures; (ii) the quality of the control environment; (iii) the evaluation of the external

auditors and the (re)appointment of the external auditors; (iv) the evaluation of the internal audit function and; (v)

the self-assessment of the Audit Committee itself.

The CFO, the General Counsel and the Chief Audit Executive (head of the internal audit function) and the external

auditors (Ernst & Young Accountants LLP) attended all the meetings. Furthermore, the Committee held executive

sessions with and between the committee members itself and with the external auditors.

INTERNAL AUDIT FUNCTION

The Corporate Governance Code places emphasis on an internal audit function and the Company underlines the

importance of an internal audit function. Therefore, the Board of Directors meeting resolved to outsource the

internal audit function to BDO Consultants B.V. since the size and nature of the Company are not suited to have an

audit department established internally. An internal audit charter has been adopted and as of her appointment, the

Chief Audit Executive has attended all the Audit Committee meetings.

The Company also has an internal control system in place, which is integrated within the organizational and

corporate governance framework adopted by the Company. This system contributes to the protection of corporate

assets and ensures the efficiency and effectiveness of business processes, the reliability of financial information

and compliance with laws, regulations, the Articles of Association, policies and internal procedures.

In the financial year 2021, all significant internal audit reviews, assessments and tests were performed. As part of

these reviews and tests, the effectiveness of the risk management and internal control systems was tested and no

material weaknesses or deficiencies were identified.

BOARD REPORT

THE COMPENSATION AND NOMINATING COMMITTEE

The Compensation and Nominating Committee, under the responsibility of the Board of Directors, assists and

supports the Board of Directors with its oversight of, amongst others: (i) determining the (Non-) Executive

compensation; (ii) the Company’s remuneration policy; (iii) review of the remuneration reports; (iv) drawing up of

the selection criteria and appointment procedures for Directors of the Company; (v) periodic assessment of the size

and composition of the Board of Directors and as appropriate making proposals for changes in the composition of

the Board of Directors; (vi) periodic assessment of the performance of individual Directors and reporting on this to

the Board of Directors; and (vii) proposals for the nomination and re-nomination of Executive and Non-Executive

Directors to be appointed by the shareholders meeting.

The tasks and functions of the Compensation and Nominating Committee are described in the Compensation and

Nominating Committee Charter, which was last amended and approved during the Board meeting held on

13 November 2019. The Charter is published on the Exor website (https://www.exor.com/pages/exor/governance/

corporate-regulations).

Composition of the Compensation and Nominating Committee

The Compensation and Nominating Committee is elected by the Board of Directors and is comprised of at least

three Non-Executive Directors. Until 27 May 2021, the majority and thereafter all members were independent in

accordance with the Dutch Corporate Governance Code and article 2 of the Compensation and Nominating

Committee Charter.

Until 27 May 2021, the Compensation and Nominating Committee consisted of the following members:

▪Mr. A. Horta-Osório (Chair);

▪Mr. A. Nasi; and

▪Mr. J. Bae.

As of 27 May 2021 Mr. Bolland succeeded Mr. Horta-Osório as Chair of the Compensation and Nominating

Committee, Ms. Bethell joined and Mr. Nasi stepped down per the same date.

Meetings

In 2021, the Compensation and Nominating Committee met six times and the average attendance rate was 100%.

The main items discussed and/or reviewed during these meetings were, amongst others: the design of the new

remuneration policy and long term incentive plan; the CEO compensation; review of the 2020 Remuneration

Report; the review of and discussions on the results of the self-assessment and the recommendations thereof to

the Board of Directors; establishment of the independence of the Non-Executive Directors; assessment of the

composition of the Non-Executive Directors.

THE ESG COMMITTEE

The Environmental, Social and Governance (“ESG”) Committee, established in 2021, assists and supports the

Board of Directors and shall, if applicable, prepare the resolutions to be adopted by and acts to be performed by

the Board of Directors in carrying out its governance and oversight responsibilities with regard to sustainability,

environmental, social, corporate governance and other human capital matters (“ESG Matters”). The Board of

Directors remains responsible for the resolutions taken.

The Committee oversees and gives guidance to the Company’s Board of Directors on key global ESG Matters and/

or as to the general evolution of the ESG landscape. It does this in relation to the Company itself and also advises

the Company representatives on how they can use their roles in the governance of the businesses partially or

wholly owned by the Company to champion further progress within those businesses on ESG Matters.

The tasks and functions of the ESG Committee are further described in the ESG Committee Charter, which was

approved during the Board meeting held on 17 November 2021. The Charter is published on the Exor website

(https://www.exor.com/pages/exor/governance/corporate-regulations).

BOARD REPORT

During the financial year 2021, the ESG Committee consisted of the following members:

▪Mr. A. Banga (Chair);

▪Mr. M. Bolland; and

▪Mrs. L. Debroux.

In 2021, the ESG Committee met once with an attendance rate of 100%.

The Chair of the ESG Committee may, as he or she deems appropriate, invite the Executive Director, members of

the management team, advisors, experts or others to attend the meetings of the ESG Committee.

The main items discussed and/or reviewed during this meeting were, amongst others: the ESG Committee charter;

the ESG message during the Exor Capital Markets Day; the carbon neutrality trend and selected topics in each of

the three ESG pillars.

For a description of the Company’s commitment to ESG matters, reference should be made to the Sustainability

report section of this Board Report. In addition, it should be noted that the Company is a diversified holding

company and as such does not engage in operational activities where human rights can be potentially at stake.

Nevertheless, the Company recognizes the importance of corporate social responsibility, including human rights.

The Company supports the universal declaration of human rights and has a set principles of conduct and rules in

the Code of Conduct to sustain and protect human rights and the Company will do whatever is in its power to

prevent, limit and address human right impact.

GENERAL MEETING OF SHAREHOLDERS

Each year, though not later than in the month of June, an annual general meeting of shareholders will be held.

Other general meetings of shareholders will be held whenever the Board of Directors deems such to be necessary,

without prejudice to the provisions of Sections 2:108a, 2:110, 2:111 and 2:112 of the Dutch Civil Code.

The agenda of the general meeting will include the following subjects for discussion or voting:

(a)discussion of the board report;

(b)discussion and adoption of the annual accounts;

(c)dividend proposal (if applicable);

(d)appointment of Directors;

(e)appointment of an external auditor;

(f)other subjects presented for discussion or voting by the Board of Directors and announced with due

observance of the provisions of the Articles of Association, as for instance (i) release of Directors from

liability; (ii) discussion of the policy on reserves and dividends; (iii) authorization of the Board of Directors to

issue shares; and/or (iv) authorization of the Board of Directors to resolve to acquire own shares.

Calling of meetings

Notice of general meetings of shareholders is given by the Board of Directors and must be given with due

observance of the statutory notice period of forty-two (42) days and in line with other relevant statutory provisions

or regulations applicable to the Company pursuant to the listing of its shares on the Euronext Milan.

The notice of the meeting will state (a) the subjects to be dealt with; (b) venue and time of the meeting; (c) the

requirements for admittance to the meeting as described in Articles 35.2 and 35.3 of the Articles of Association, as

well as the information referred to in Article 36.3 of the Articles of Association (if applicable); and (d) the address of

the Company's website, together with any such other information as may be required by law.

In addition, shareholders acting solely or jointly representing at least ten percent (10%) of the issued share capital

may request the Board of Directors, in writing, to call a general meeting of shareholders, stating the matters to be

dealt with. Shareholders and/or other persons entitled to attend the general meeting who, alone or jointly, meet the

requirements set forth in section 2:114a subsection 2 of the Dutch Civil Code will have the right to request the

Board of Directors to place items on the agenda of the general meeting if certain requirements are being met.

BOARD REPORT

The manner in which persons entitled to attend the general meeting of shareholders can register and exercise their

rights will be set out in the notice convening the meeting. General meetings of shareholders can be held in

Amsterdam or Haarlemmermeer (including Schiphol Airport), at the choice of those who call the meeting.

Conduct of the meeting

In general, general meetings of shareholders will be chaired by the Senior Non-Executive Director or his

replacement. Each shareholder and each other person entitled to attend the general meeting of shareholders is

authorised to attend, to speak at, and to the extent applicable, to exercise his voting rights in the general meeting of

shareholders. They may be represented by a proxy holder authorised in writing.

A person entitled to attend the general meeting of shareholders or his proxy will only be admitted to the meeting if

he has notified the Company of his intention to attend the meeting in writing at the address and by the date

specified in the notice of meeting. The proxy is also required to produce written evidence of his mandate.

The Board of Directors is authorised to determine that the voting rights and the right to attend the general meeting

of shareholders can be exercised by using an electronic means of communication. If so decided, it will be required

that each person entitled to attend the general meeting of shareholders, or his proxy holder, can be identified

through the electronic means of communication, follow the discussions in the meeting and, to the extent applicable,

exercise the voting right. The Board of Directors may also determine that the electronic means of communication

used must allow each person entitled to attend the general meeting of shareholders or his proxy holder to

participate in the discussions.

The Board of Directors may determine further conditions to the use of electronic means of communication as

referred above, provided such conditions are reasonable and necessary for the identification of persons entitled to

attend the general meeting of shareholders and the reliability and safety of the communication. Such further

conditions will be set out in the notice of the meeting. The foregoing does, however, not restrict the authority of the

chairman of the meeting to take such action as he deems fit in the interest of the meeting being conducted in an

orderly fashion. Any non- or malfunctioning of the means of electronic communication used is at the risk of the

persons entitled to attend the general meeting of shareholders using the same.

The chairman of the meeting will decide upon the admittance to the meeting of persons other than those who are

entitled to attend. The company secretary will arrange for the keeping of an attendance list in respect of each

general meeting of shareholders. The attendance list will contain in respect of each person with voting rights

present or represented: his name, the number of votes that can be exercised by him and, if applicable, the name of

his representative. The chairman of the meeting can decide that also the name and other information about other

people present will be recorded in the attendance list.

The Company is authorized to apply such verification procedures as it reasonably deems necessary to establish

the identity of the persons entitled to attend the general meeting of shareholders and, where applicable, the identity

and authority of representatives. The Board of Directors shall provide the general meeting of shareholders with all

requested information, unless this would be contrary to an overriding interest of the Company.

Each ordinary share confers the right to cast one vote. Each Special Voting Share-A confers the right to cast four

votes and each Special Voting Share-B confers the right to cast nine votes. At the general meeting of shareholders,

all resolutions must be adopted by an absolute majority of the votes validly cast, except in those cases in which the

law or the Articles of Association require a greater majority. If there is a tie in voting, the proposal will thus be

rejected.

The Board of Directors may determine that votes cast prior to the general meeting of shareholders by electronic

means of communication or by mail, are equated with votes cast at the time of the general meeting. Such votes

may not be cast before the record date referred to above. Without prejudice to the provisions of article 35 of the

Articles of Association, the notice convening the general meeting of shareholders must state how shareholders may

exercise their rights prior to the meeting. Blank and invalid votes will be regarded as not having been cast and the

chairman of the meeting will decide whether and to what extent votes are taken orally, in writing, electronically or by

acclamation.

When determining how many votes are cast by shareholders, how many shareholders are present or represented,

or what portion of the Company's issued capital is represented, no account will be taken of shares for which no

votes can be cast by law.

BOARD REPORT

No voting rights shall be exercised in the general meeting of shareholders for shares owned by the Company or by

a subsidiary of the Company. Pledgees and usufructuaries of shares owned by the Company and its subsidiaries

shall however not be excluded from exercising their voting rights, if the right of pledge or usufruct was created

before the shares were owned by the Company or a subsidiary. Neither the Company nor any of its subsidiaries

may exercise voting rights for shares in respect of which it holds a right of pledge or usufruct.

Minutes will be kept of the proceedings at the general meeting of shareholders by, or under supervision of, the

company secretary, which will be adopted by the chairman of the meeting and the secretary and will be signed by

them as evidence thereof. However, the chairman of the meeting may determine that notarial minutes will be

prepared of the proceedings of the meeting. In that case the co-signature of the chairman will be sufficient. The

minutes of the general meeting of shareholders shall be made available, on request, to the shareholders no later

than three months after the end of the meeting, after which the shareholders shall have the opportunity to react to

the minutes in the following three months. The minutes shall then be adopted in the manner as described in the

Articles of Association.

CODE OF CONDUCT

By means of the resolution passed on 24 November 2016, the Board of Directors approved and adopted the Code

of Ethics, which Code of Ethics has been amended, updated and renamed the Code of Conduct and approved by

the Board of Directors meeting in November 2017 (the “Code”).

The Code sets out the principles and the ethical values that contribute to a culture which EXOR follows in the

conduct of its activities and the quality and integrity which it requires of all persons in the Company and more

generally of all those who work with and are collaborators of the Company. Together with all the other regulations,

policies and dispositions issued by the Company, the Code constitutes the foundation necessary for the prevention

and detection of any infringement of the law.

The Code includes specific guidelines relating to the mission and values contributing to a long-term-horizon-culture,

the ethical principles, social commitment, principles for the management of its investments and conduct principles,

anti-corruption, respect of human rights, conflicts of interest and abuse of inside information, data privacy,

safeguarding of the Company’s assets, workplace health and safety, and relationships with third parties, such as

public institutions.

All of Exor's Directors, managers and staff, those who have a function of representation, administration and

direction, all employees (without any exception) and all collaborators (including, as mere example, consultants,

professional advisors etcetera) are required to be familiar, and to comply with the dispositions of the Code.

To strengthen its effectiveness and ensure proper compliance with the Code, the Company is committed to

ensuring maximum diffusion by means of appropriate communication methods, such as through training and

measures that increase awareness of its contents. In addition, there is a whistleblower procedure to report

violations and disciplinary measures can be imposed in case of non-compliance with the provisions of the Code.

Exor furthermore takes steps to ensure that the companies in which it has an investment have adopted principles

similar to or based on those of the Code.

The Code is available on EXOR’s website (https://www.exor.com/pages/exor/governance/corporate-regulations).

Anti-Bribery and Corruption

The Company recognizes the importance of conducting business in an ethical way. In this respect our Code of

Conduct provides for a set of rules to act and to conduct, in all internal and external affairs, to the highest standards

of integrity, honesty and fairness, avoiding bribery and corruption in any form, including collusive behaviour.

Furthermore, the Company does not allow charity and political contributions that act as a mean of corruption.

During 2021 there were no reports made nor signals of bribery or corruption. During the same year Exor made no

monetary contributions to nor any spendings for politics and lobbyists.

BOARD REPORT

DISCLOSURES PURSUANT TO THE DECREE IMPLEMENTING ARTICLE 10 EU-DIRECTIVE ON TAKEOVERS

In accordance with the Dutch Besluit artikel 10 overnamerichtlijn (the “Decree”), the Company makes the following

disclosures.

(a)For information on the capital structure of the Company, the composition of the issued share capital and

the existence of the two classes of shares, reference should be made to the section above Major

Shareholders and Ownership Structure. For information on the rights attached to the ordinary shares

reference is made to the Articles of Association which can be found on the Company's website. To

summarize, the rights attached to ordinary shares comprise pre-emptive rights upon issue of ordinary

shares, the right to attend the general meeting of shareholders and to speak and vote at that meeting and

the entitlement to distributions of such amount of the Company's profit as remains after allocation to the

reserves. For information on the rights attached to the special voting shares reference should be made to

the Articles of Association and the terms of the special voting shares (the ''SVS Terms'') which can both be

found on the Company's website and more in particular to the section Special Voting Structure above.

(b)No transfer restrictions apply to ordinary shares. Pursuant to the Articles of Association and the SVS Terms

transfer restrictions apply for special voting shares. For information on participation in the Company's

capital in respect of which pursuant to Sections 5:34, 5:35 and 5:43 of the Dutch Financial Supervision Acts

(Wet op het financieel toezicht) notification requirements apply reference is made to the section "Major

Shareholders and Ownership Structure" of this Board Report. This section lists the shareholders who hold

3% or more of the issued ordinary shares.

(c)No special control rights or other rights accrue to shares in the capital of the Company other than the right

of holders of ordinary shares to receive special voting shares if and when the terms and conditions as set

out in the SVS Terms are met.

(d)A mechanism for verifying compliance with a scheme allowing employees to subscribe for or to acquire

shares in the capital of the Company or a subsidiary if the employees do not arrange for such verification

directly is not applicable to the Company.

(e)No restrictions apply to voting rights attached to ordinary shares in the capital of the Company, nor are

there any deadlines for exercising voting rights. No depositary receipts for ordinary shares have been

issued with the cooperation of the Company.

(f)The Company is not aware of the existence of any agreements with any shareholder which may result in

restrictions on the transfer of shares or limitation of voting rights.

(g)The rules governing the appointment and dismissal of members of the Board of Directors are stated in the

Articles of Association. All members of the Board of Directors are appointed by the general meeting of

shareholders. The Board of Directors will nominate a candidate for each vacant seat. A nomination by the

Board of Directors will be binding. However, the general meeting of shareholders may deprive the

nomination of its binding character by a resolution passed with a two-thirds majority of the votes cast. If the

binding nomination is not deprived of its binding character, the person nominated will be deemed

appointed. If the nomination is deprived of its binding character, the Board of Directors will be allowed to

make a new binding nomination. The term of office of Directors may not exceed a maximum period of four

years at a time. A Director who ceases office in accordance with the previous provisions is immediately

eligible for reappointment. The rules governing an amendment of the Articles of Association are stated in

the Articles of Association and require a resolution of the general meeting of shareholders which can only

be adopted upon a proposal of the Board of Directors.

BOARD REPORT

(h)The Board of Directors has been designated by the general meeting of shareholders as the competent

body to issue ordinary shares and to grant rights to subscribe for shares for a term of five years with effect

from 27 May 2021. The Board of Directors will be authorized to increase the share capital with such

number of shares for a nominal value up to EUR 5,000,000 and to issue convertible bonds for an

aggregate issue price up to EUR 1,000,000,000, and to issue the underlying ordinary shares (or granting of

rights to subscribe for such underlying ordinary shares) pursuant to the applicable conversion ratio. This

designation can be used for any and all purposes. The Board of Directors is also authorized to limit or

exclude pre-emptive rights of shareholders when issuing ordinary shares or granting rights to subscribe for

ordinary shares, for a term of five years with effect from 27 May 2021. With respect to Special Voting

Shares A, the Board of Directors has been designated by the general meeting of shareholders as the

competent body to issue Special Voting Shares A and to grant rights to subscribe for Special Voting Shares

A for a term of five years with effect from 27 May 2021. The power of the Board of Directors concerns all

authorized but un-issued Special Voting Shares A in the Company's share capital from time to time. The

Board of Directors has also been authorized by the general meeting of shareholders with effect from

27 May 2021 to resolve on the acquisition by the Company of its own fully paid-up ordinary shares, up to

the maximum number of shares that can be repurchased under Dutch law, and further within the limits of

Dutch law and the Articles of Association through a purchase on the stock exchange or otherwise for a

term of 18 months against a repurchase price between, on the one hand, the nominal value of the shares

concerned and, on the other hand, an amount of 110% of the reference price recorded for the ordinary

shares on the Euronext Milan on the day before each transaction is made or, in the event of purchases

carried out through public purchase or exchange offerings, on the day before the disclosure to the public.

The maximum amount to be used for the repurchase of ordinary shares will be EUR 500,000,000.

(i)The Company is not a party to any significant agreements which will take effect, will be altered or will be

terminated upon a change of control of the Company as a result of a public offer within the meaning of

Section 5:70 of the Dutch Financial Supervision Acts (Wet op het financieel toezicht), provided that certain

of the loan agreements entered into by the Company contain clauses that, as is customary for financing

agreements of similar type, may require early repayment or termination in the event of a change of control

of the Company.

(j)The Company did not enter into any agreement with a director or employee providing for a payment /

distribution upon termination of employment as a result of a public offer within the meaning of article 5:70 of

the Dutch Financial Supervision Acts.

INSIDER TRADING POLICY

The Exor insider trading policy (the "Insider Trading Policy") sets forth the guidelines, recommendations and

prohibitions for all members of the Board of Directors and employees of Exor regarding the legal and regulatory

duties and sanctions applicable to insider trading and unlawful disclosure of inside information. In addition, the

Insider Trading Policy states the notification obligations that have to be fulfilled under Dutch and Italian law by

members of the Board of Directors when dealing in securities of Exor and its group companies. The insider Trading

Policy is also applicable to persons closely associated (immediate family members or members of the same

household) with the members of the board of directors or employees.

With the Insider Trading Policy, Exor makes sure that the requirements of article 18(2) and 19(5) of the Market

Abuse Regulation (Regulation 596/2014) will be fulfilled. The amended and restated Exor Insider Trading Policy

was adopted by the Board of Directors on 13 November 2019. Exor also maintains a so-called insider list including

all persons, who in the exercise of their employment, profession or duty, have access to inside information.

Compliance with the Dutch Corporate Governance Code

The Company acknowledges the importance of good corporate governance. The Company endorses the principles

and best practice provisions of the Dutch Corporate Governance Code and complies with the majority of the

provisions, except for the best practice provisions listed below:

a)Best practice provision 2.1.7 (iii) of the Dutch Corporate Governance Code: For each shareholder, or group

of affiliated shareholders, who directly or indirectly hold more than ten percent of the shares in the

company, there is at most one supervisory board member who can be considered to be affiliated with or

representing them as stipulated in best practice provision 2.1.8, sections vi. and vii.

BOARD REPORT

The Non-Executive Directors Alessandro Nasi, Andrea Agnelli and Ginevra Elkann are considered non-independent

non-executive directors within the meaning of best practice provision 2.1.7 (iii) of the Dutch Corporate Governance

Code. These three members belong to the Agnelli family, which controls Giovanni Agnelli B.V. In light of the major

shareholding of Giovanni Agnelli B.V., the Company’s history and its commencement the Company feels it is

appropriate that more than one member of the Agnelli family has a seat on the Board of Directors as a Non-

Executive Director.

b)Principle 2.3.2 of the Dutch Corporate Governance Code: If the supervisory board consists of more than

four members, it shall appoint from among its members an audit committee, a remuneration committee and

a selection and appointment committee.

The Company has combined the roles of the remuneration committee and the selection and appointment

committee in one committee, called the Compensation and Nominating Committee. The Company feels that there

would be no benefits for the Company, given its size and the nature of its organizational structure, in splitting the

Compensation and Nominating Committee as prescribed under the Dutch Corporate Governance Code.

c)Best practice provision 4.3.3 of the Dutch Corporate Governance Code: The general meeting of

shareholders of a company not having statutory two-tier status (structuurregime) may pass a resolution to

cancel the binding nature of a nomination for the appointment of a member of the management board or of

the supervisory board and/or a resolution to dismiss a member of the management board or of the

supervisory board by an absolute majority of the votes cast.

Pursuant to article 15.3 of the Company’s Articles of Association the binding nature may only be cancelled with a

two-third majority of the votes cast. The Company feels that in view of the major shareholding of Giovanni Agnelli

B.V. it is appropriate to have such a threshold.

REPORT OF THE NON-EXECUTIVE DIRECTORS

Introduction

This is the report of the Non-Executive Directors of the Company on the financial year 2021 as referred to in best

practice provision 5.1.5 of the Dutch Corporate Governance Code. The Board of Exor is structured as a one-tier

board and does therefore not have a separate supervisory body. According to the Articles of Association, the Board

of Directors consists of at least seven and at most nineteen members, comprising both members having

responsibility for the day-to-day management of the Company (executive Directors) and members not having such

day-to-day responsibility (non-executive Directors).

The Non-Executive Directors of Exor are responsible for the supervision of the policy and the general course of

affairs of the Company and its affiliated enterprises carried out by the Executive Director, including the

implementation of the strategy of the Company regarding long-term value creation. The Non-Executive Directors

perform this task in an independent way and act solely in the interest of the Company in doing so. They are guided

by the interests of the Company and its affiliated enterprises and take into account the stakeholder interests that

are relevant in this context.

The tasks of the Executive and Non-Executive Directors in a one-tier board such as the Company’s Board of

Directors may be allocated under or pursuant to the Articles of Association, provided that the general meeting of

shareholders has stipulated whether each individual Director is appointed as an executive or as a non-executive

director and furthermore provided that the task to supervise the performance by the Directors of their duties can

only be performed by the Non-Executive Directors. Regardless of an allocation of tasks, all Directors remain

collectively responsible for the proper management and strategy of the Company (including supervision thereof in

the case of Non-Executive Directors).

Details of the current composition of the Board of Directors, including the Non-Executive Directors, and its

committees are set forth in the section “Board of Directors”.

BOARD REPORT

Supervision by the non-executive Directors

In their periodic meetings, the Non-Executive Directors discussed with the Executive Director, a number of

subjects, including amongst others, the Company's strategy, the long-term business plans, the implementation of

such plans and the risks associated with such plans.

The Non-Executive Directors furthermore supervise the policies carried out by the Executive Directors and the

general affairs of the Company. In so doing, the Non-Executive Directors have also focused on the effectiveness of

the Company’s internal risk management and control systems, the integrity and quality of the financial reporting

and the Company’s long-term business plans and strategy, the implementation of such plans and the associated

risks.

The Non-Executive Directors also determine the remuneration of the Executive Directors and nominate Director

candidates, via the Compensation and Nominating Committee, for appointments. Furthermore, the Board of

Directors may allocate certain specific responsibilities to one or more individual Directors or to a committee

comprised of eligible Directors of the Company. In this respect, the Board of Directors has allocated certain specific

responsibilities to the Audit Committee, the Compensation and Nominating Committee and the ESG Committee.

Further details on the manner in which these Committees have carried out their duties, are set forth in the sections:

“The Audit Committee”, “The Compensation and Nominating Committee” and "the ESG Committee".

In addition, the Non-Executive Directors supervised the adoption and implementation of the procedures, strategies

and policies of the Company, reviewed this Annual Financial Report, including the Remuneration Report, the

financial results and received updates on legal and compliance matters. The Non-Executive Directors have also

reviewed the reports of the Board of Directors and its committees.

During the meetings held in 2021, for an overview of which reference is made to the section “Board of Directors”,

the key topics discussed were, amongst others: the strategy, performance and strategy of the operating

subsidiaries, cash flow and debt management, values, purpose and objectives 2021, the financial results and

reporting, investment opportunities and transactions, executive compensation, risk management & control, legal

and compliance matters, ESG related matters, the Remuneration Report and evaluation of the Board.

Independence of the non-executive Directors

The Non-Executive Directors are required by Dutch law to act solely in the interest of the Company. The Non-

Executive Directors have determined that five of the eight Non-Executive Directors qualify as independent in

accordance with the Dutch Corporate Governance Code. For a more comprehensive overview, reference is made

to the section ''Determination of independence and related-party conflicts''.

Whilst Exor acknowledges that it is not in compliance with best practice provision 2.1.7 (iii) of the Dutch Corporate

Governance Code on the basis that more than one of its Non-Executive directors are affiliated with Exor’s largest

shareholder, Giovanni Agnelli B.V. and notwithstanding the foregoing regarding the non-independent directors, Exor

is of the opinion that it otherwise meets the independence requirements set forth in best practice provision 2.1.10 of

the Dutch Corporate Governance Code.

Evaluation by the non-executive Directors

The Non-Executive Directors are responsible for supervising the Board of Directors and its committees, as well as

the individual Executive and Non-Executive Directors, and are assisted by the Compensation and Nominating

Committee in this respect.

In 2021, the evaluation of Executive Directors consisted of a self-assessment facilitated by written questionnaires.

The outcome of the questionnaire (the response rate was 100%) was assessed and discussed in the

Compensation and Nominating Committee. In addition to the written questionnaires, the Senior Non-Executive

Director and the Chair of the Compensation and Nominating Committee held individual conversations with the each

Non-Executive Directors. In these conversations, the overall functioning of the Board, that of the individual

Directors and the Executive Director were discussed. The overall conclusion on the composition and functioning of

the Board is good and supportive and the Directors valued positively the open and constructive discussions as well

as the discussions on purpose and long-term strategy.

It was further concluded that each of the Non-Executive Directors continued to demonstrate commitment to his or

her respective role in the Company.

100

BOARD REPORT

For a more comprehensive overview, reference is made to the section ''Evaluation''.

The Non-Executive Directors have been regularly informed by each committee as referred to in best practice

provision 2.3.5 of the Dutch Corporate Governance Code, of the results and recommendations of these meetings

and the conclusions of those committees were taken into account when drafting this report of the Non-Executive

Directors.

The Non-Executive Directors were able to review and evaluate the performance of the Audit Committee and the

Compensation and Nominating Committee.

Further details on the manner in which these committees have carried out their duties, are set forth in the sections

“The Audit Committee”, “The Compensation and Nominating Committee” and "The ESG Committee" within “Board

Practices and Committees” above.

IN CONTROL STATEMENT

Internal Control System

Based on the assessment performed, the Board of Directors believes that, as of 31 December 2021, the Group’s

and the Company’s Internal Control over Financial Reporting is considered effective and that (i) the Board Report

provides sufficient insights into any material weakness in the effectiveness of the internal risk management and

control systems. This is discussed in the Internal Audit Function on page 91, (ii) the internal risk management and

control systems are designed to provide reasonable assurance that the financial reporting does not contain any

material inaccuracies. This is discussed in Risk Management, Risks and Control System on page 71, (iii) based on

the current state of affairs, it is justified that the Group’s and the Company’s financial reporting is prepared on a

going concern basis. This is justified by the discussion in the Consolidated Financial Statements from page 154

and in the Company Financial Statement from page 275, and (iv) the Board Report states those material risks and

uncertainties that are, in the Board of Director’s judgment, relevant to the expectation of the Company’s continuity

for the period of twelve months after the preparation of the Board Report. You may refer to the Risk Factors section

on page 76.

1 April 2022

________________

John Elkann

Chairman and Chief Executive Officer

BOARD REPORT

101

RESPONSIBILITIES IN RESPECT TO THE ANNUAL REPORT

The Board of Directors is responsible for preparing the Annual Report, inclusive of the Consolidated and Company

Financial Statements and Board Report, in accordance with Dutch law and International Financial Reporting

Standards as issued by the International Accounting Standards Board and as adopted by the European Union (EU-

IFRS).

In accordance with Section 5:25c, paragraph 2 of the Dutch Financial Supervision Act, the Board of Directors states

that, to the best of its knowledge, the Financial Statements prepared in accordance with applicable accounting

standards provide a true and fair view of the assets, liabilities, financial position and profit or loss for the year of the

Company and its subsidiaries and that the Board Report provides a true and a fair view of the performance of the

business during the financial year and the position at balance sheet date of the Company and its subsidiaries,

developments during the year, together with a description of the principal risks and uncertainties that the Company

and the Group face.

1 April 2022

The Board of Directors

John Elkann

Alessandro Nasi

Andrea Agnelli

Ginevra Elkann

Marc Bolland

Joseph Bae

Ajay Banga

Melissa Bethell

Laurence Debroux

102

BOARD REPORT

SUSTAINABILITY REPORT

Exor’s Sustainability Report is presented as part of the Annual Report and has been prepared in

accordance with the Global Reporting Initiative (GRI) Standards under the Core option and in

accordance with the Sustainability Accounting Standards Board (SASB).

The available disclosures recommended by the Task Force on Climate-related Financial Disclosures

(TCFD) are presented in a content index at the end of this report.

BOARD REPORT

103

I.REPORTING SCOPE AND BOUNDARIES

This section addresses the requirements of the Dutch Civil Code, and of the Dutch Decree on Non-Financial

Information (Besluit bekendmaking niet-financiële informatie), which is a transposition of Directive 2014/95/EU

“Disclosure of non-financial and diversity information” into Dutch law.

The reporting scope of non-financial information in this section is at Exor’s holding level (EXOR N.V. and the

Holdings System subsidiaries) although this section also describes how Exor considers sustainability issues in

relation to the governance of its portfolio. Exor’s main listed operating companies (Ferrari, Stellantis, CNH

Industrial and Juventus) publish their own Sustainability Reports, which are available on their official websites,

but a summary of their approach to sustainability is also included at the end of this section.

II.HOW EXOR'S BUSINESS MODEL IMPACTS SUSTAINABILITY

1.OVERVIEW

Exor is a diversified holding company with a culture that combines entrepreneurial spirit and financial discipline.

Most of its portfolio is made up of companies in which Exor is the largest shareholder. Exor’s purpose is to build

great companies while providing opportunities for its people to grow, to make a positive contribution to society

and to deliver superior returns to its investors.

Exor believes that great companies are not just those that perform to the highest standards but also those that

seek out renewal and change and are distinctive in what they do. In doing all of this, great companies need to

act in a responsible way. Exor therefore expects all of its companies engage with all their stakeholders on

sustainability and other topics and to set and achieve clear environmental, social and governance targets.

TO BUILD:

GREAT COMPANIES:

•Foster a culture with clarity of purpose

and shared values

•Appoint leaders who walk the talk

•Create governance that ensures

alignment of culture and actions

BUILD

GREAT

COMPANIES

•Perform to the highest standards

•Seek renewal and change

•Are distinctive in what they do

•Act in a responsible way

2.IMPLEMENTATION AND LONG-TERM VALUE CREATION

Through its role in their governance, Exor ensures that its companies derive the benefits of its ownership. Exor

also uses its role within the governance of its companies to support their achievement of their sustainability

goals and to ensure long-term value creation. The benefits of Exor's ownership are summarised below.

104

BOARD REPORT

CREATING AN

ENVIRONMENT WHERE

COMPANIES CAN THRIVE

EMPOWERING LEADERS

TO BUILD GREAT

COMPANIES

USING GOVERNANCE TO

STEER OUR COMPANIES

✓

Long-term, stable ownership

✓

Use our network to find new

leaders

✓

Build effective Boards

✓

Permanent capital

✓

Act as a “critical-friend” to our

leaders

✓

Support companies in their

management successions

✓

Strong network

✓

Strong culture across our

companies

✓

Play an active role in the Boards

of all our companies

✓

Support and challenge

companies’ plans

✓

Promote diversity and

inclusiveness

Exor recruits the best possible talent, offers equal opportunities, promotes a diverse workforce and builds

relationships both internally and within its companies based on collaboration, integrity and mutual respect. An

important part of creating this environment is ensuring that its people respect its values.

Exor’s values, together with its purpose of building great companies, form the foundation of its culture. These

values are described below and are deliberately written in pairs. There is often tension between the words in

these pairs and it is the job of the leaders within Exor, and within its companies, to find the right balance

between them:

AMBITION & HUMILITY

CURIOSITY & FOCUS

We set high aspirations but remain grounded

We seek new ideas while prioritising what matters

COURAGE & RESPONSIBILITY

PATIENCE & DRIVE

We take bold actions while being mindful of their

consequences

We take a long-term perspective but are relentless in

getting things done

By building Great Companies using these values, Exor aims to deliver the following financial priorities:

–Outperforming the MSCI World Index over the long term through the increase in its NAV per share

–Maintaining financial strength and discipline while keeping its Loan-To-Value ratio below 20%.

–Generating free cash flows above its dividend outflows over time.

–Keeping cash holding costs as a percentage of its Gross Asset Value below 10 bps.

Exor's purpose and values underpin how it interacts with its companies. As with all the elements of greatness,

Exor encourages and constructively challenges its companies to act in a responsible way by setting and

achieving a clear set of ESG goals. It does this through the role it plays within their governance while always

being conscious of their autonomy.

BOARD REPORT

105

III.ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) RESPONSIBILITY

1.EXOR’S ESG APPROACH

Exor believes that great companies should act in a responsible way. In doing this, it expects its companies to:

–Align with best practices and reporting frameworks;

–Identify priorities, set targets, measure and report progress;

–Continue to raise the bar;

–Aspire to industry ESG leadership.

Exor has created an ESG framework that it applies to itself and uses across its companies. This is structured in

the three parts described below.

FOUNDATIONS

•These are the fundamental ESG governance procedures, policies and

guidelines that Exor and its companies need to operate with integrity,

responsibility and ethics

PASSIONS

•Exor has identified one passion within each ESG pillar that it holds in common

across its companies, enabling them to work together to increase their impact

COMMUNICATION

•Exor expects its companies to communicate their ESG priorities and progress

clearly to their stakeholders and Exor facilitates engagement across its

companies on the overall framework and on the passions

1.1FOUNDATIONS

Exor has identified a set of fundamental ESG procedures, policies and guidelines that it applies to itself and to

its companies. These foundational elements provide excellent starting conditions to create long-term

sustainable value. They include but are not limited to:

–Making ESG a priority among leadership teams and Boards;

–Adopting a Code of Conduct and adhering to widely-recognised guidelines;

–Implementing a whistle-blower mechanism;

–Ensuring that risks are evaluated and mitigants are identified periodically.

Exor expects that this list of foundational elements will evolve over time.

1.2PASSIONS

Exor has identified one passion within each of the three ESG pillars as described below. These passions are

derived from Exor's discussions with its stakeholders, as well as from its history and values.

106

BOARD REPORT

ENVIRONMENT

SOCIAL

GOVERNANCE

Emissions reduction

Education: decreasing

inequalities and promoting

innovation

Diversity and inclusion

We are committed to 21st

century, sustainable

manufacturing with a clear path

to carbon neutrality

We have a history of

championing the life changing

power of education

We believe hiring and

empowering diverse talent

leads to better business results

Exor has made commitments on each of these passions at holding company level. These commitments are

described below in Section 2. It is also encouraging all of its companies to make progress on these passions,

as described in Section 3.

1.3 COMMUNICATION

Exor’s ESG passions are aligned with a sub-set of the United Nation’s Sustainable Development Goals (SDGs)

as shown below. Exor is using these for communication at the holding group level and is also encouraging their

use at company level.

ENVIRONMENT

SOCIAL

GOVERNANCE

Emissions reduction

Education: decreasing

inequalities and promoting

innovation

Diversity and inclusion

1.4 USING GOVERNANCE TO DELIVER EXOR'S ESG FRAMEWORK

Exor's approach to governance is summarised in the table below. This governance framework has been

derived based on extensive discussions with stakeholders and through interviewing other organisations to

understand their best practices. Exor believes that a clear governance framework is essential to encouraging its

companies to adopt its ESG framework and to support them in delivering their ESG priorities.

BOARD REPORT

107

BOARD

STRUCTURE

We create effective Board Structures

•Board size – we have reduced the size of our Boards to increase the quality of

Board debates

•Committees – we have streamlined committees, focusing them on audit, ESG

and remuneration

•Meetings – we create systematic Board schedules and agendas

PEOPLE

We spend time choosing the right Directors

•Exor role – we play an active governance role on the Boards of all our

companies

•Diversity – we ensure we have a range of perspectives on all our Boards

•Expertise – we appoint Directors with appropriate sector and functional

expertise

PROCESS

We incentivise and improve Board performance

•Assessment – we conduct regular Chair, CEO and Board reviews

•Remuneration – we expect Directors to become shareholders

•Director terms – we appoint Directors for clear and overlapping terms

2.EXOR'S ESG APPROACH AT HOLDING COMPANY LEVEL

2.1STAKEHOLDER ENGAGEMENT

Exor believes in the importance of maintaining a continuous dialogue with both internal and external

stakeholders. A review of relevant stakeholder groups at the Exor holding company level has been performed

to understand their priorities using the engagement methods described below.

STAKEHOLDER

AREAS OF FOCUS

ENGAGEMENT METHODS

Exor employees

Motivation and Development, Equal

opportunities and Diversity, Health and

Safety, Ethical business conduct

Regular meetings and communications,

Annual review of objectives, Internal

initiatives and Compensation

Investors & Analysts, Rating agencies,

Media

Market transparency, Communications,

Financial Performance

Annual and half-year reporting, Investor

events, Meetings with investors, Corporate

website, Press releases

Operating companies

Governance, Boards of Directors

Active representation and participation in the

Boards, Regular Communication and

meetings

Authorities and regulators

Compliance with applicable laws and

regulations, Risk management

Implementation of governance, risk

management structures and corporate

responsibility best practices

Exor is committed to:

–Maintaining a regular dialogue with each of these stakeholder groups;

–Being clear about its purpose, its values and its priorities both internal and externally;

–Providing relevant information to each stakeholder group, while being accessible and responsive;

–Promoting transparent capital markets, while aligning to best practices and disclosing information in an

accurate, complete, balanced and reliable manner.

108

BOARD REPORT

2.2ESG FOUNDATIONS

At holding company level, Exor has taken a number of specific actions to ensure that it is well positioned to

build long-term sustainable value. These actions include the following:

Establishing an ESG Board Committee

In May 2021, Exor announced the formation of an ESG Committee which will report to Exor’s Board. This is

chaired by Ajay Banga with Laurence Debroux and Marc Bolland attending as members. This Committee will

oversee Exor’s ESG activities at holding company level; will supervise Exor’s reporting on ESG issues at

holding company level; and will advise Exor on how it should champion progress on ESG through the role it

plays within the governance of its companies.

Adopting a Code of Conduct

Exor has in place a Code of Conduct that has been approved by its Board of Directors. This Code includes

guidelines on a number of matters including: health and safety, business ethics and anti-corruption, principles

for the management of investments, human resources management, respect of human rights (in line with the

United Declaration on Human Rights), conflicts of interest and abuse of inside information, data privacy,

safeguarding of Company’s assets and relationships with public institutions.

Implementing a Whistleblowing policy

The Code of Conduct includes a whistleblowing policy. This makes clear that all of Exor’s employees or

collaborators are expected to report any infringement against the Code of Conduct or against legal

requirements without fear of retaliation. Concerns can be raised internally with Exor’s General Counsel or, if

that is not appropriate, to the Chair of Exor’s Board or the Chair of the Audit Committee.

Conducting a periodic risk assessment

Exor maintains an internal control and risk management system to identify, measure, manage and monitor its

principal risks. This enables it to ensure the reliability, accuracy and timeliness of its financial information, the

safeguarding of its assets, the efficiency and effectiveness of its business processes and its compliance with

laws and regulations. For more information regarding the key global risks identified by Exor and the control

measures taken, refer to the section – “Risk management, risks and control system” in this report.

2.3ESG PASSIONS

As described above, Exor has identified a set of ESG passions with one focused on each pillar of the ESG

framework. At holding company level it has made the following commitments in relation to these passions:

–Emissions reduction: achieve carbon neutrality by 2022 and net zero emissions by 2025;

–Education: 1) Decrease inequalities by running an education programme to reduce the gender gap in

STEM subjects. This will be done in collaboration with Fondazione Agnelli. 2) Promote innovation by

helping high potential young entrepreneurs build disruptive ventures. This will be done through

collaboration with Innovation 4 Change;

–Diversity and inclusion: maintain the existing 40/60 gender balance and consider diverse candidates for

all new appointments.

2.3.1ENVIRONMENTAL PASSION - EMISSIONS REDUCTION

Exor commitment at holding level: achieve carbon neutrality by 2022 and net zero emissions by 2025

While its environmental impact as a standalone company is limited given its size, Exor nonetheless

believes that it has a responsibility to reduce its emissions at holding company level.

As a first step to achieving its commitment, Exor has measured its greenhouse gas (GHG) emissions. This

emissions inventory has been produced in accordance with the internationally acknowledged and

recognised standards of the Greenhouse Gas Protocol initiative.

BOARD REPORT

109

This inventory covers the period from 2019 to 2021 and includes Scope 1 and Scope 2 emissions as well

as all relevant categories of Scope 3 emissions. Given the nature of Exor's business activities, Scope 3

emissions represented the largest contributors towards Exor's overall footprint. In addition, the emissions

that derive from the Scope 1 and 2 emissions of Exor's largest companies, with respect to ownership, were

included as part of the analysis to give a full picture of Exor both as an individual company and as an

investor. In the future, when data becomes available, this metric will be expanded to include the Scope 3

emissions of Exor's largest companies.

Following this initial assessment of Exor’s environmental footprint, the company will examine how it can

reduce its emissions. This will include, for example, reducing Scope 3 emissions by making changes to

purchased goods/services and travel. Exor is also promoting recycling and waste reduction within its

offices and encouraging a more sustainable working space. Any remaining emissions will be offset using

the best in class offsetting options.

All units are tCO2e

2019

2020

2021

Exor Scope 1 Emissions

Exor Scope 2 Emissions

Exor Scope 3 Emissions

2,019

742

995

Exor Total Holding Level Emissions

2,045

762

1,067

Exor Companies Emissions (Scope 1 and 2)1

671,310

554,563

1) Emissions of Exor companies outside of Exor’s operational control are accounted for under Scope 3 Category 15 in proportion to Exor’s ownership.

The attribution factors used to determine the share of the overall emissions of the investee companies that are attributable to Exor were calculated

following the definition of the PCAF (2020) – The Global GHG Accounting and Reporting Standard for the Financial Industry (first edition). The

outstanding amount (numerator of the attribution factor) and EVIC (denominator of the attribution factor) are always calculated as of the calendar year-

end, i.e. 31st December (N.B. as The Economist Group closes its financial year in March, the gross debt considered for the calculation of the EVIC is as

of 30th September). In those cases where the financial and thus reporting year of a company diverges from the calendar year, the emissions reported for

that financial year were attributed to the corresponding calendar year.

The companies included were Fiat Chrysler Automobiles N.V., CNH Industrial N.V., Ferrari N.V., GEDI Gruppo Editoriale, Juventus Football Club S.p.A

and The Economist Group. The emissions of these companies were collected from their latest Sustainability Report or Annual Report. The emissions of

other Exor companies were not included as they do not determine their emissions.

At the time of the completion of the Annual Report, the emissions of 2021 have not yet been publicly disclosed by all the above Exor companies. This

value will be communicated at a later date following the publication of emissions data by the relevant companies.

2.3.2SOCIAL PASSION - EDUCATION

Exor commitment at holding level: 1) Decrease inequalities by running an education programme to

reduce the gender gap in STEM subjects. This will be done in collaboration with Fondazione Agnelli. 2)

Promote innovation by helping high potential young entrepreneurs build disruptive ventures. This will be

done through collaboration with Innovation 4 Change;

Exor believes that education is a life changing tool that can be used to reduce inequalities by giving

students new opportunities, and through those, access to a better quality of life. It can also be a powerful

tool for increasing innovation and excellence. Given these beliefs, Exor has always maintained a strong

relationship with Fondazione Agnelli, an independent institute founded in 1966 that conducts detailed

research on education and teaching.

1) Reducing the gender gap in STEM subjects

Gender stereotypes and ineffective teaching methods feed the gender gap in STEM from a very early

stage in schools. As a result, many girls find STEM subjects difficult at school and they are less likely to

choose STEM degrees when they grow up.

To address this issue Exor is launching an initiative, run in collaboration with Fondazione Agnelli. This

initiative will target young girls (but be available to all students) in primary schools and promote the

development of spatial skills. These skills, which are a key factor in developing STEM-based

competencies, can be improved through construction play such as using building blocks and bricks. The

programme will focus both on students – who will be engaged in construction play sessions – as well as

teachers who will be trained on removing gender bias from classrooms and integrating construction play to

boost STEM skills. The initiative is expected to be launched in the 2022/2023 school year.

110

BOARD REPORT

2) Helping high potential young entrepreneurs

Exor’s second education initiative will be focused on encouraging innovation by working with high potential

entrepreneurs through its continued support of Innovation 4 Change (I4C). Developed by Collège des

Ingénieurs Italia, Politecnico di Torino and CERN Ideasquare in 2016, the 5-month I4C has become the

leading Italian innovation project. The initiative sees a pool of talented MBA, doctoral and creative design

students unite to create an impact startup that responds to a sustainability-focused challenge posed by a

corporate partner.

The partners who proposed the challenges this year were AGC, Arduino, Banca Mediolanum, CNH

Industrial, Enel, DSM, Ministry of Justice and Rai Way. In response to these the participants came up with

a variety of innovative startups ranging from a tv box to provide home treatment for Alzheimer patients to

creating invisible sound bubbles to manage noise pollution. The programme concluded with a pitch and

demo day that saw Farmelody, with their focus on using the microbiome to drive more sustainable farming

methods, taking home first place.

2.3.3GOVERNANCE PASSION - DIVERSITY AND INCLUSION

Exor commitment at holding level: maintain the existing 40/60 gender balance and consider diverse

candidates for all new appointments.

Exor strongly believes in the importance of both building diversity and ensuring that all of its employees

have an equal opportunity to develop, progress and be rewarded within its organisation. Diversity and

inclusion is not only a moral imperative, it also brings clear business benefits as it can lead to more

innovation, increased productivity and better talent attraction.

Exor already has a good gender balance within its structure and is committed to maintaining this balance.

Considering diverse candidates for all new appointments will play an important role in doing this.

Alongside diversity, Exor is also committed to promoting greater inclusivity and has undertaken a number

of activities to promote this over the last year. These included launching an annual employee survey, which

focused on the transition back to the office from home working, and holding its annual Exor Day, which took

place in December virtually due to the pandemic restrictions. This internal event brought together all

employees from all teams and countries to discuss Exor’s values, to review Exor’s priorities and to hold an

internal debate. An in-person Exor Day is planned for the summer of 2022. Exor has also updated its

performance management process to include Exor’s values more explicitly and to increase the consistency

of the process across different teams.

NUMBER OF EMPLOYEES1

Employees

31 December 2021

31 December 2020

Total

of which women

47.4%

58.8%

1) Key workforce metrics are reported below. Please note 2020 figures have been restated due to the fact that Exor Capital (previously Exor Investment

(UK) LLP) has become an independent operating company outside of the Holdings System.

2.4COMMUNICATING EXOR'S ESG ACTIVITIES

Exor will continue to communicate openly and transparently about its ESG activities at holding company level.

Exor’s Sustainability Report has been prepared in accordance with the Global Reporting Initiative (GRI)

Standards under the Core option and in accordance with the Sustainability Accounting Standards Board

(SASB). The available disclosures recommended by the Task Force on Climate-related Financial Disclosures

(TCFD) are presented in a content index at the end of this report.

BOARD REPORT

111

Exor also periodically engages with ESG ratings agencies to ensure that it is held accountable for the work that

it undertakes on ESG at holding company level.

3.EXOR'S ESG APPROACH ACROSS ITS COMPANIES

The previous section considered Exor’s approach to ESG at holding company level. This section turns to Exor’s

approach to championing ESG activities with its companies. Exor’s companies operate in a wide range of

sectors including Luxury Goods (Ferrari), Reinsurance (PartnerRe), Automotive (Stellantis), Agricultural and

Construction Equipment (CNH Industrial), Commercial Vehicles (Iveco Group, a company that was spun off

from CNH Industrial in January 2022), media (The Economist and GEDI) and professional football (Juventus

Football Club).

Exor monitors the performance of the companies in which it is the largest shareholder both through its role in

their Boards and through its dialogue with their management teams. However, while Exor takes seriously the

positive role it can play in championing ESG topics, it always does so while respecting the autonomy of the

companies that it owns. A summary of the ESG activities of the largest Exor companies can be found towards

the end of this section.

3.1ESG FOUNDATIONS

Exor supports its companies in developing and adopting a set of ESG foundational policies and strategies that

are relevant to their respective sectors. In doing so it is important that each company should address

shareholder priorities while creating long-term value.

All of the largest companies within Exor’s portfolio have established ESG Committees, have put in place

relevant ESG policies that adhere to widely-recognised guidelines, have effective risk evaluation and mitigation

systems and have implemented a whistle-blower mechanism.

3.2ESG PASSIONS

Exor is encouraging all its companies to make progress on the ESG passions in the following ways:

–Emissions reduction: set reduction targets for Scope 1 and 2 emissions and measure Scope 3

emissions;

–Education: pursue company-relevant educational initiatives accompanied by clear metrics and targets;

–Diversity and inclusion: set diversity targets and measure and report progress against them.

In many cases work is already underway on these priorities at company level. Exor will continue to champion

these themes including through its role in the governance of these companies and through setting up networks

to share best practices, and expects significant additional progress to be made in the coming years. Some of

the work that has already been done on these passions at company level and the commitments that have

already been made is summarised below.

3.2.1ENVIRONMENTAL PASSION - EMISSIONS REDUCTION

The Economist Group made an ambitious commitment through the rigorous and globally renowned

Science Based Targets initiative (SBTi). The Economist Group commits to reduce absolute Scope 1, 2 and

3 GHG emissions 25% by FY2025 from a FY2020 base year. Within that target, The Economist Group

commits to reduce absolute Scope 1 and 2 emissions 68% by FY2025 from a FY2020 base year, and

reduce absolute Scope 3 GHG emissions 23% within the same timeframe. The Economist Group also

commits to increase annual sourcing of renewable electricity from 0% in FY2020 to 100% by FY2025.

112

BOARD REPORT

CNH Industrial has maintained its industry-leading position for over a decade and continues to set

challenging long-term targets to reduce its carbon footprint such as a 50% reduction in CO2/h of production

by 2030 and a 90% share of renewable electricity by 2030 as well. In December 2021, CDP, the

international non-profit that drives companies and governments to reduce their greenhouse gas emissions

and safeguard water resources, has recognised CNH Industrial N.V. as a global leader in corporate

sustainability by including it on the CDP’s prestigious ‘A List’ for tackling climate change as well as acting to

protect water security. CNH Industrial is one of the 57 companies that achieved a double ‘A’, out of the over

13,000 disclosing businesses in CDP’s 2021 assessment.

3.2.2SOCIAL PASSION - EDUCATION

Since 2008, the TechPro2 initiative by FCA and CNH Industrial has provided students with theoretical and

practical skills. The training course entails a 2-stage curriculum: theory is taught at training institutes and

hands-on learning at partner company workshops. Over 13,000 students have benefited from nearly

400,000 hours of training at 63 worldwide locations since the inception of the project.

Digitali e Uguali is the project launched by YOOX and the GEDI publishing group, in collaboration with the

Specchio d'Italia Foundation and the Golinelli Foundation. The project aims to contribute to bridging the

digital gap and solving the strong problem of technological inequality among the younger generations in

Italy through the distribution of computers to schools. Digitali e Uguali was initially born from an idea of a

group of students from the University of Bologna and Almacube together with YOOX NET-A-PORTER

GROUP in April 2020 following the COVID-19 emergency.

3.2.3GOVERNANCE PASSION - DIVERSITY AND INCLUSION

On 12 July 2021 Ferrari S.p.A. maintained their Equal-Salary Certification status, achieved one year ago,

as only the beginning of a long-term process involving all stages of its people management and

development. In 2020, it was the first Italian company to ever receive this certification which involves an

extremely rigorous process including an audit. Ferrari continued to extend its excellence in this passion as

Ferrari North America also confirmed the Equal-Salary Certification for the first time in 2021.

BOARD REPORT

113

Stellantis has set both short-term and long-term targets around women in leadership positions. In 2021,

women represented 24% of leadership roles and Stellantis is striving for 27% by 2025 and above 35% by

2030. The Business Resource Groups develop multicultural learning opportunities, mentoring and outreach

events with Women of Stellantis representing nearly 3,000 members in 26 countries. The efforts of

Stellantis surrounding diversity and inclusion were recognised by DiversityInc, which included it as one of

the Top 50 Companies for Diversity in North America.

3.3FERRARI

Ferrari is committed to creating a culture of sustainability. Ferrari recognises that creating such a culture

requires effective risk management, responsible and proactive decision-making and innovation.

Sustainability is a core element of Ferrari’s governance model and executive management plays a direct and

active role in developing and achieving its sustainability objectives under the oversight of its Board of Directors.

3.3.1Stakeholder engagement

In 2021, Ferrari carried out various activities in order to enhance the voice of its stakeholders on

sustainability themes. Ferrari engaged with its employees by explaining what sustainability stands for

within Ferrari while taking into consideration their priorities and suggestions. Ferrari also engaged with its

top investors to better understand what they consider to be the main ESG drivers for Ferrari.

Considering the rising environmental and social changes, these engagement activities are an important

part of the sustainability approach to help Ferrari identify its sustainability risks and opportunities, as well

as supporting management in achieving its objectives.

In 2021, Ferrari ranked among the global leaders in environmental performance and transparency in the

annual report published by CDP, the independent non-profit organisation specialising in environmental

reporting and in the evaluation of corporate sustainability strategies. Ferrari was awarded a B rating,

ranking significantly above both the European regional average and the sector’s average, for actions

implemented to combat climate change.

3.3.2Materiality analysis

In 2021, Ferrari updated the analysis of the most relevant sustainability topics to better reflect sustainability

context developments, changes in its drivers and goals, as well as its 2019-2022 plan, based on its 5

sustainability strategic pillars: exceeding expectations; reducing environmental footprint; being the

employer of choice; creating and sharing value with the community and; proactively fostering best practice

governance.

114

BOARD REPORT

The most relevant topics identified by Ferrari, representing its strategic sustainability priorities, are related

to product responsibility: image and brand reputation, innovation: technology and design, quality and safety

of products and customers, customer satisfaction and supply chain responsible management. Special

attention is also paid to ethical business conduct and risk management and compliance. The analysis also

confirmed the importance of the development of human capital and the commitment to employees’ health

and safety. With a particular focus on reducing emissions, environmental responsibility is also a key aspect

that is continuing to grow in relevance.

3.3.3Sustainability governance

The Governance and Sustainability Committee is responsible for, among other things, assisting and

advising the Board of Directors with monitoring and evaluating reports on the Group’s sustainable

development policies.

The foundation of Ferrari’s governance model is the Code of Conduct that reflects its commitment to a

culture dedicated to integrity, responsibility and ethical behaviour. The Code of Conduct aims to ensure that

all members of the Ferrari Group workforce act with the highest level of integrity, comply with applicable

laws and build a better future for the Company and the communities in which it operates. Ferrari's Code of

Conduct includes, among others, rules related to anti-bribery, anti-corruption, competitive behaviour and

conflicts of interest.

3.3.4Social Responsibility

Ferrari has always put people and their passion at the centre of all its processes and involvement in

motorsport, starting with its employees and their families then extending outward to clients and the

community as a whole.

The high attention and care for its products is the foundation upon which Ferrari’s success is built and this

is feasible thanks to the efforts of the people working in Ferrari. One of the many strengths is the ability to

attract, retain and develop talents. Since 1997, Ferrari has developed the “Formula Uomo” initiative, with

the intention of developing a high-quality working life for its employees. Over the years, the project has

become a pillar of its culture, based on redesigning the working environment, enforcing a safety-first

culture, enabling individual development, enhancing teamwork and building a community comprising 57

different nationalities.

In 2021, Ferrari started the program “Formula Insieme”, whose aim is to pursue the continuous

development of the company through a “plan, do, check, act” approach, starting from its employees’

opinions, gaining awareness of their points of view and identifying opportunities for continuous

improvement.

NUMBER OF EMPLOYEES

Employees

31 December 2021

31 December 2020

Total

4,609

4,556

of which women

15.2%

14.8%

Ferrari is aware of its responsibility towards the community and its efforts are directed to support the

development of the local community, mainly through collaborations with local universities and thanks to the

industry network in the Emilia-Romagna region. Ferrari believes that promoting the education of young

talents is an essential step to reinforce the connection with local communities. Shaping brilliant engineers

with a specific academic background that focuses on new technologies within the automotive industry, and

in particular innovative solutions for state-of-the-art performance in luxury cars, is also a prerequisite for

Ferrari to seize future opportunities.

BOARD REPORT

115

Ferrari is partner of the Motorvehicle University of Emilia-Romagna (MUNER) and has established long-

term relationships with technical schools in Maranello and other towns nearby. Education is also the focus

of a series of different initiatives that provide scholarships to talented junior high, high school and university

students.

3.3.5Environmental Responsibility

Ferrari’s most significant environmental efforts are deployed through efficiencies in the manufacturing

processes and a programme for the reduction of polluting emissions.

The monitoring and management of the environmental performance of its productive plants is assigned to

a team that reports to the Chief Technologies and Infrastructures Officer. Their effort is aimed at minimising

the impact of its activities on the environment, particularly in relation to the energy consumption of

production facilities. A different team is in charge of overseeing regulatory developments while monitoring

the emissions of Ferrari cars.

Part of the environmental impact of Ferrari’s activities is also related to the product lifecycle.

In 2021, Ferrari calculated its carbon footprint considering the GHG emissions related to all the Group

activities over its entire value chain, including both direct and indirect GHG emissions. Ferrari’s carbon

footprint calculation, based on GHG protocol methodology, has been certified according ISO 14064-1:2018

requirements. Ferrari is committing to achieve carbon neutrality by 2030 on its entire value chain looking at

both direct and indirect GHG emissions.

FERRARI: ENVIRONMENTAL IMPACT KPIs

31 December 2021

31 December 2020

Total energy consumption

(thousands GJ)

1,774

1,619

Total CO2eq emissions (Scope 1

and 2 market-based method)

(tons of CO2eq)

95,514

88,380

NOX (tons)

SOX (tons)

Volatile Organic Compounds

(VOCs) (tons)

Dust (tons)

Total water withdrawal

(thousands of m3)

735.7

701.4

In addition to its focus on the energy consumption in its facilities, Ferrari is deploying considerable

resources for the development of hybrid and electric powertrains, which will be mounted on an increasingly

larger proportion of its car models; this is intended to improve performance and driving experience while

also satisfying customer preferences and regulatory requirements regarding emissions.

3.3.6Responsible Supply Chain

Ferrari’s focus on excellence, in terms of luxury, quality, aesthetics and performance, requires it to

implement a responsible and efficient supply chain management in order to select suppliers and partners

that are able to meet its high standards. Ferrari encourages the adoption and sharing of sustainable

practices among its business partners, suppliers and dealers. All suppliers must respect the Ferrari Code

of Conduct, which includes the set of values recognized, adhered to and promoted by Ferrari.

For more information, refer to the Ferrari 2021 Sustainability Report and corporate website

116

BOARD REPORT

3.4 PARTNERRE

PartnerRe is a leading global (re)insurer with a broadly diversified and balanced portfolio of traditional

(re)insurance and capital markets risks. PartnerRe helps insurance companies manage their risks by absorbing

some of their losses and by doing so stabilises insurance company results and enables growth and innovation

to continue. PartnerRe also has significant investments in the financial markets which contribute to the real

economy.

PartnerRe and its subsidiaries are committed to fulfilling its ambition of being a responsible corporate citizen

while balancing profitability with effective risk management and a prudent investment policy, which ultimately

benefits all of its stakeholders, including shareholders, clients, capital providers, employees and local

communities. PartnerRe’s Environmental Social Governance (ESG) mission and initiatives focus on improving

society and helping to manage climate risks in a continually evolving landscape. This mission embraces

PartnerRe’s core values of Integrity, Performance, Collaboration, Straightforward Communication, Respect and

Care. To put PartnerRe’s ESG mission into effect, it has adopted the following ESG goals:

1.Good business conduct, ethics and governance;

2.Managing the impacts of climate change across liabilities, assets and its corporate operations to build

global resilience;

3.Community support and wellness;

4.Diversity and inclusion.

3.4.1Good Business Conduct, Ethics and Governance

Good corporate governance is essential to effective and prudent management of risks and to ensure value

preservation through ethics and integrity and safeguard a sustainable future for PartnerRe’s stakeholders.

The Board of Directors of PartnerRe Ltd. (Board) currently consists of six directors, four of whom are

independent. The Board has established an Audit Committee, an Investment Committee and an

Underwriting and Risk Committee and each committee is responsible for contributing toward PartnerRe’s

ESG mission and evolving as it continues its ESG journey. Each member of PartnerRe’s Executive

Leadership Team (ELT) is committed to its ESG mission and ESG goals are reflected in each person’s key

performance indicators and is a factor in remuneration schemes. In addition, one member of the ELT has

been selected as executive sponsor of PartnerRe’s implementation of ESG activities.

PartnerRe’s Code of Business Conduct and Ethics (Code) sets out the high standards of behaviour and the

strong ethical foundation on which it is built. The Code applies to all directors, officers and employees and

was adopted by the Audit Committee of PartnerRe. It is revisited each year to ensure that PartnerRe’s

business practices comply with its standards and the evolving legal requirements, and for each employee

to commit to transform their words into meaningful actions that shape PartnerRe’s culture and reputation.

3.4.2Managing the Impacts of Climate Change

The global and regional climate has changed and will continue to change as a result of human activities. As

a reinsurer, PartnerRe’s business is directly and indirectly affected by climate change.

BOARD REPORT

117

PartnerRe is committed to understanding the risks from climate change, and to quantifying their impact on

its business. PartnerRe follows the scientific community (Inter-governmental Panel on Climate Change)

consensus as input to its managing and monitoring of climate change risk throughout the company.

PartnerRe considers the potential effects of climate change with its enterprise risk management (ERM)

framework, which contemplates strategic, reinsurance, financial market and credit, emerging, reputational

and operational risks. Annually, the ERM policies are reviewed and adjusted in accordance with an

evolving understanding of climate risks, thereby fostering responsible behaviours and informed risk-taking.

PartnerRe has adapted its underwriting guidelines and investment guidelines to account for ESG

considerations. For example, its Specialty Property Mining Underwriting Guidelines include specific coal-

related restrictions on facultative business and the Investments Operating Guidelines include specific

restrictions on investments in issuers that generate certain revenues from thermal coal and are involved in

the development and proliferation of controversial weapons.

PartnerRe strives to reduce its environmental impact by decreasing its office carbon footprint through

improving energy efficiency, increasing use of renewable resources and sharing and leveraging best

practices across its offices.

Through its Carbon Cutting Challenge, PartnerRe employees all across the globe reduced 13,000 kg of

CO2, 710 kg of waste and saved 710 kg of water during initiative. In addition, as part of Earth Day, in

partnership with Native Energy, PartnerRe offset 100% of its operational carbon footprint and provided

funding to help the Haiti Clean Water Project.

3.4.3Community Support and Wellness

PartnerRe gives back to its local communities and encourages employees to actively participate by

providing support to local charitable organisations or branches of national/international organisations.

PartnerRe aligns its corporate giving with employee participation, dollar matching for employees’ charitable

giving, as well as disaster relief. PartnerRe hosts a company-wide day of giving, focused on nurturing local

communities and the environment. In 2021, this was not possible due to COVID-19 restrictions.

PartnerRe values the well-being, growth and development of its employees. For example, it offers all

employees access to a Global Employee Assistance Program that provides a continuum of care across all

aspects of health and well-being and a customised Stay Fit program aimed at developing awareness about

healthy work-life habits and building resilience. PartnerRe’s commitment to learning and development is

supported by ReMind, its dedicated platform enabling employees to take hold of their own growth and

development.

3.4.4Diversity and Inclusion

PartnerRe believes that companies with an inclusive culture and a higher degree of diversity across all

levels are better at making business decisions. Such an environment also makes for better employees,

because it creates a workplace in which everyone can succeed, learn and grow.

For PartnerRe, Diversity and Inclusion means consciously hiring and advancing people from all

backgrounds and with a diverse range of identities, and doing this at every level of the organisation.

PartnerRe has the systems in place and a culture of inclusion where every employee feels welcomed and

respected to perform at their best.

In 2021, all employees were invited to take part in two D&I surveys. When comparing the data from both

surveys, the most recent results show that PartnerRe is trending upwards with favourable responses

increasing or remaining consistent on most survey items. Additionally, when comparing its results to its

provider’s Global High Performing Benchmark, PartnerRe scores on par or above on most items.

This positive momentum towards D&I is a direct result of all employees’ efforts throughout 2021.

Improvements in D&I require all parts of the organisation to contribute towards promoting an inclusive

environment and improving diverse representation at PartnerRe.

118

BOARD REPORT

The most recent D&I survey data reflects this sentiment, showing that at least 80% of respondents report

having personally contributed to improving D&I at PartnerRe.

For more information, please refer to the 2021 PartnerRe 20-F Report, filed with the SEC, its 2021 ESG Report

and corporate website.

3.5 STELLANTIS

In this new era of mobility, the Stellantis portfolio of brands is uniquely positioned to offer distinctive and

sustainable solutions to meet the evolving needs of customers, as they embrace electrification, connectivity,

autonomous driving and shared ownership. To increase the positive impacts and reduce the negative

consequences of its activities throughout the value chain, Stellantis takes specific actions that are designed to

maintain or develop its environmental, relational, financial, human, industrial and intellectual capital.

3.5.1Materiality Analysis

Stellantis has identified six CSR macro-risks which are the pillars of its approach to CSR: bringing a

tangible impact on climate change, driving Stellantis’s transformation through the development of human

capital, meting changing customer expectations on mobility (market risks), preventing ethics violations,

promoting protection and implementing responsible use of natural resources and ensuring protection of

human rights and supporting a balanced economic development of territories.

In light of Stellantis’s activities, each macro-risk has been broken down into a number of CSR issues, which

are considered to be material to the Company and its stakeholders. In total, there are 22 CSR issues that

are considered to be material by Stellantis experts and stakeholders.

Based on this double materiality approach, these 22 CSR issues are considered as having a substantive

influence on the stakeholders’ assessments and decisions. Each CSR issue is a CSR challenge for

Stellantis.

3.5.2Sustainability Governance

Stellantis Corporate governance ensures that Stellantis is managed in the interests of its shareholders and

its main stakeholders. In accordance with the Company’s articles of association, the Board of Directors has

adopted the charter of the ESG Committee. The function of the ESG Committee is to assist and advise the

Board of Directors and act under authority delegated by the Board of Directors with respect to monitoring,

evaluation and reporting on the sustainable policies and practices, management standards, strategy,

performance and governance globally of Stellantis and its subsidiaries.

3.5.3Social Responsibility

Stellantis must have a comprehensive strategy that includes a plan to retrain or ensure a professional

transition for employees. Stellantis desires and aspires to conduct constructive, trustful and responsible

social dialogues with employee representatives at each level.

BOARD REPORT

119

Since the merger of PSA and FCA at the very beginning of 2021, Stellantis started dialogues with

employee representatives and promotes both contractual and constructive approach. It operates according

to a policy of responsible and sustainable employment, and Stellantis aims to anticipate transformations

and reinforce employees’ employability by offering different paths such as reskilling and upskilling

programs to safeguard careers.

Targeted recruitment processes are deployed within Stellantis worldwide to support the onboarding and

integration of new talents. Stellantis aims to recruit diverse talent, including more female employees, based

on a recruitment policy developing attractiveness and equal treatment, and has been hiring actively

worldwide.

NUMBER OF EMPLOYEES

Employees

2021

Total

281,595

of which women

21%

Moreover, as a corporate citizen, Stellantis wants to make a positive contribution to society in the countries

where it operates. Stellantis wants to share with its communities its values, knowledge and resources

through its philanthropic actions.

Stellantis, as a member of the Global Compact, plays a role in building a more stable, inclusive and

sustainable society. By mobilising financial and human resources to help Non-Governmental Organizations

(NGO), Non-Profit Institutions (NPI) and support employee initiatives, Stellantis can develop and deploy

philanthropic projects of general interest adapted to the specific needs of the communities in which it

operates.

3.5.4Environmental Responsibility

Stellantis has a holistic approach to climate change. The Stellantis decarbonisation strategy is structured

around three pillars:

•Cutting vehicle CO2 emissions;

•Moving forward into a carbon-efficient production system;

•Improving the environmental performance of the supply chain.

As CO2 emissions regulations thresholds are becoming more stringent for car manufacturers, Stellantis is:

developing increasingly low carbon offerings connected to electrification, making production location more

sustainably efficient, engaging suppliers and expanding vertical integration in Stellantis supply chains.

3.5.5Diversity and Equal Opportunity

By virtue of its structure and global vocation, Stellantis considers diversity as a strength. Through diverse

teams, who are representative of the markets and communities it operates in, Stellantis gains a better

understanding of the needs and expectations of its customer base, and a deeper understanding of market

dynamics. Through fostering an inclusive culture, Stellantis drives employee engagement and creates the

conditions for all employees to reach their full potential, leading to greater performance and business

sustainability.

Stellantis is aligned with the vision of the United Nations Sustainable Development Goal on Gender

Equality, and has signed up to the UN Women’s Empowerment Principles, which encourages companies to

promote gender equality and the empowerment of women in the workplace, industry, and community. With

this commitment, Stellantis shares its intention to adopt business practices that support gender equality

and empower women within the Stellantis organisation, globally and across the automotive industry.

For more information, refer to the Stellantis 2021 CSR Report and corporate website.

120

BOARD REPORT

3.6CNH INDUSTRIAL

CNH Industrial is committed to a better future, integrating sustainability in its day-to-day activities and involving

all employees. The full integration of environmental and social considerations with economic objectives enables

CNH Industrial to identify potential risks and seize additional development opportunities, resulting in a process

of continuous, and sustainable, improvement that creates value over the long-term.

3.6.1Stakeholder Engagement

In the past six years, CNH Industrial has evaluated its material topics through stakeholder engagement to

assess:

•their relevance to CNH Industrial, based on feedback from the Sustainability Steering Committee

members;

•their relevance to stakeholders, based on feedback from a sample of 2,068 stakeholders (55 in 2020)

including employees, customers, dealers, opinion leaders, public institutions, non-governmental

organizations, investors, and journalists.

CNH Industrial managers and stakeholders were engaged through an online survey or direct interviews.

They were asked to evaluate the 14 material topics identified, ranking the five most significant based on

their impact on the economy, the environment, and society.

3.6.2Materiality analysis

The materiality analysis is a tool that CNH Industrial uses to ensure close alignment between the material

topics identified and its business decisions, increasingly integrating sustainability principles into CNH

Industrial’s daily activities.

The materiality analysis by CNH Industrial confirms the greater significance of business-related aspects, in

line with the sustainability priorities defined within CNH Industrial's Strategic Business Plan. Specifically,

from a circular economy perspective, the material topic Circular product life cycle was considered, both

within and outside CNH Industrial, as one of the most relevant to CNH Industrial, highlighting the

importance of adopting alternative solutions that minimise the impact of a product’s life cycle.

CO2 and other air emissions was also one of the most relevant topics, considering not only the impact of

manufacturing processes but also of the entire value chain (logistics, supply chain, and product use). Even

the topic Occupational health and safety ranked among the most relevant to both CNH Industrial and its

stakeholders, highlighting the importance of an approach based on effective preventive and protective

measures that involves all employees.

BOARD REPORT

121

3.6.3Sustainability governance

In 2016, the Sustainability Steering Committee was established to identify sustainability strategies,

integrate them with business needs, adopt a medium-to-long term vision, and provide a forum for

communication and benchmarking among the geographic areas.

CNH Industrial's sustainability management system consists of several tools, including, among others:

•the Code of Conduct, approved by the Board of Directors, and related policies that set out CNH

Industrial’s approach to key topics;

•a set of approximately 200 sustainability-related Key Performance Indicators (KPIs), designed to

provide maximum coverage of all the key environmental, social, and governance aspects, in line with

the GRI Standards and the SASB Standards and those of the major sustainability rating agencies;

•the Sustainability Plan, also including the strategic sustainability targets, which identifies action

priorities and tracks commitments undertaken; and

•the annual Sustainability Report, which discloses CNH Industrial’s sustainability performance.

NUMBER OF EMPLOYEES

Employees

31 December 2021

31 December 2020

Total

71,895

64,016

3.6.4Environmental responsibility

CNH Industrial is committed to climate change mitigation and aims at full transparency in its management

of climate related risks and opportunities, in accordance with the recommendations of the Task Force on

Climate-related Financial Disclosures ("TCFD").

The identification of climate-related risks and opportunities led to the definition of a decarbonisation

strategy, which in turn has been incorporated within, and regularly influences, CNH Industrial’s Strategic

Business Plan. To further address the potential impacts of climate change, CNH Industrial has integrated

relevant projects and a number of other specific climate-related topics within its Sustainability Plan and has

defined long-term strategic targets that will further drive key business strategies.

Climate-related risks and opportunities are embedded within CNH Industrial’s strategy to ensure resiliency

of its business model in light of shifting global challenges. The shift in consumer preferences and demand

towards sustainable transport solutions, driven by both an increase in climate-related awareness and

strong stimulus coming from regulators, may result in potential risks for manufacturers that must adapt to

the evolving market. To counter this, CNH Industrial applies these evolutions in the development of its

product portfolio to steer the focus of research and development towards sustainable technologies (e.g.

“green” fuels, electric and hydrogen propulsion technologies, digitalisation and related intelligent

capabilities that include precision farming and smart water management, etc.). CNH Industrial also takes

advantage of collaboration with strategic business partners, startups, and external expertise in the

emerging technology sector.

122

BOARD REPORT

CNH INDUSTRIAL: ENVIRONMENTAL IMPACT KPIs

2021

2020

Total direct energy consumption

(GJ/000)

3,313

2,728

Total indirect energy consumption

(GJ/000)

3,471

2,862

Total CO2 emissions (Scope 1 and

Scope 2 – market-based)

(Mtons/000)

333

284

For more information, refer to the CNH Industrial 2021 Sustainability Report and corporate website.

3.7JUVENTUS

Juventus aims at using football as a tool of promoting and conveying values such as respect, sharing, and

social inclusion. Juventus’ commitment is to keep improving as a club and as a company by attempting to

identify and meet the demands of its stakeholders, not only in the short term.

Juventus commits to supporting activities in three areas in which a football company may have the greatest

influence: playtime, education and social inclusion.

Every year, Juventus promotes a wide range of interaction and engagement activities among its stakeholders

including athletes, fans, suppliers, educational institutions and universities, sports institutions, media, sponsors

and trade partners, staff, management and employees among others.

Juventus aspires to establish and consolidate a relationship of trust with its stakeholders. The Code of Ethics

fixed the values of Juventus. Adherence to the Code is required of corporate bodies and employees, as well as

all those who work for the achievement of business objectives, each within their own functions and

responsibilities.

The Juventus Corporate Governance System is founded on: the values defined in the Code of Ethics, the

central role of Management and Control bodies, the central role of the Board of Directors, management

transparency, careful distribution of management responsibilities, the monitoring and evaluation of the internal

control and risk management system, a risk management system in line with best practices.

Juventus invests in recruiting the best talents who will represent Juventus with professionalism and

competence. Juventus is at the forefront of participation in job fairs in the sector and in all the events that

represent a point of contact with candidates and allow them to learn more about it as a leading Entertainment

Company on the world sports scene.

BOARD REPORT

123

Throughout the 2020/2021 season, Juventus continued to contribute to the themes of ESG through various

initiatives. Juventus succeeded in completely zeroing its carbon footprint for the 2020/2021 season by

purchasing Certified Emission Reductions from the UN Carbon Offset Platform. As part of the Illuminiamo il

futuro campaign with Save the Children, Juventus redeveloped the Punto Luce Vallette youth centre. In

addition, Juventus extended its Gioca con me initiative, which was launched in 2012. The focus is on fostering

an inclusive society by using sport as a means to instil the values of togetherness and fair play.

Juventus acknowledges its role in society and in the world of football and wants to lead the change in the

sector as a football company contributing to the achievement of certain UN Sustainable Development Goals

(SDGs): SDG 3 – Good health and well-being, SDG 4 – Quality education, SDG 10 – Reduced inequalities,

SDG 13 – Climate Action and SDG 17 – Partnerships for the goals.

For more information, refer to the Juventus 2020/2021 Annual Report, 2020/2021 Sustainability Report and

corporate website.

124

BOARD REPORT

IV. ADDITIONAL DISCLOSURES

1.IDENTIFIED MATERIAL ESG TOPICS

Exor focuses on a number of ESG issues that have been identified relevant to its stakeholders, its activities and

the fulfilment of its long-term objectives.

These are identified through an internal assessment, a review of market best practices and peer benchmarking.

FACTOR

IDENTIFICATION OF MATERIAL TOPICS

Environmental

Exor understands that its environmental footprint is minimal due to the nature of

its activities at the group holding company level. Exor has begun to measure its

environmental footprint in order to establish a baseline and the aim to further

reduce it and where not possible, offset any remaining emissions.

Social

Exor aims to improve and strengthen its impact on the social systems within

which it operates, in particular in relation to education.

Governance

Exor is implementing a governance structure and composition that ensures

transparency, accountability and diversity with particular focus on diversity and

inclusion.

Activities that are more relevant including, among others, human right, bribery and corruption and the identification of the material topics for the operating

companies within the Exor Group are addressed separately in “Section 3. "Summary of the ESG performance of the operating Exor companies” and on the

operating companies’ websites.

Its focus areas at holding company level are defined below.

FOCUS AREA

ACTION

Exor to be an active and responsible owner focused

on the long-term development and success of its

companies

Engaging in continuous dialogue with the companies,

through presence in the Boards. Promoting solid

governance and business practices.

Exor to be an attractive employer committed to

building a diverse and high-performing workforce

Attracting and retaining talent through engagement,

competence development, reward and a strong company

culture.

Exor to contribute to the cultural, social and economic

development of communities

Engaging with local communities and supporting projects

and initiatives, with a special focus on the field of

education.

2.CODE OF CONDUCT

By means of the resolution passed on 24 November 2016, the Board of Directors approved and adopted the

Code of Ethics, which Code of Ethics was amended, renamed the Code of Conduct and approved by the Board

of Directors in November 2017 (the “Code”).

Exor conducts its business with integrity and with respect for all its stakeholders, while safeguarding its

corporate image and reputation, by following and respecting the values, principles and guidelines as laid down

in the Code. Its rigorous observance is required of all people in the Company and of all those who collaborate

in the pursuit of its corporate mission.

BOARD REPORT

125

Exor’s governance model, regulating the decision-making process and approach of the Company and its

employees in the interest of its stakeholders is firmly based on the Code. Together with all the other regulations,

policies and dispositions issued by the Company, the Code constitutes the foundation necessary for the

prevention and detection of any infringement of the law.

The Code includes specific guidelines relating to health and safety, business ethics and anti-corruption,

principles for the management of investments, human resource management, respect of human rights, conflicts

of interest and abuse of inside information, data privacy, safeguarding of Company’s assets and relationships

with public institutions.

Explicit reference is made to the respect of human rights in all of its activities by endorsing the principles of the

United Nations “Declaration on Human Rights”.

Exor is committed to the following integrity principles:

–Observance of the law: the behaviour of people associated with Exor (including executives, managers,

directors, employees and external consultants or advisors), in the activities undertaken in the interests of

the Company is founded on the rigorous observation of national, community and international laws and

regulations.

–Equality and Impartiality: people associated with Exor are required to act in the best interest of the

Company while taking decisions with professional rigour and impartiality and applying to the decisions

criteria, which are objective and neutral.

–Transparency: people associated with Exor must be founded on the maximum transparency and reliability,

ensuring that transparent, truthful, complete and accurate information is communicated to all stakeholders

without favouring any interest group or single individual. Exor undertakes to provide all the information

necessary for the market to make informed investment decisions, ensuring the correctness and clarity of

the aforesaid information and the equality of access to it.

–Honesty and correctness in the presence of potential conflict of interest: each transaction should

take place in the interest of the Company and should be conducted through a correct and balanced

management. Situations where the people involved in transactions are or could be in conflict of interests

must be avoided. In the presence of a potential conflict of interests, people associated with Exor are

required to inform their Company referent. The Directors undertake to inform the Board of Directors of any

financial advantage which they may derive from transactions submitted to the Board’s review.

–Confidentiality: the Company ensures the confidentiality of the information in its possession and does not

use confidential information unless in possession of express and explicit authorization and, anyhow, always

in observance of the applicable legislation concerning the protection of personal data. Disclosure of

information is permitted solely for business or professional purposes; the third party is expressly notified of

the confidential nature of the information and requested to observe the confidentiality obligation. No

employee or collaborator may derive advantage of any kind from the use of confidential information, nor

may disclose such information to others without an authorisation.

The Company is committed to assuring the maximum diffusion of the Code through appropriate communication

methods, including training and measures to increase awareness of its contents. Exor also takes steps to

ensure that the companies, in which it has an investment, adopt Codes of Conduct whose principles are based

on those of its Code of Conduct (available on Exor’s corporate website at www.exor.com).

2.1WHISTLEBLOWING MECHANISM

Exor’s Code of Conduct outlines how any employee or collaborator, on becoming aware of presumed violations

of the Code or of general conduct, which is not compliant with the rules of conduct adopted by the Company, is

expected to report the matter immediately, and without fear of retaliation. The person should report to the

appointed trusted person (legal / general counsel). In case the report concerns the trusted person itself or a

non-executive member of the Board, reports should be made directly to the Chairman of the Board. If the report

concerns an executive member of the Board, reports should be made to the Chairman of the Audit Committee.

126

BOARD REPORT

3.ANTI-BRIBERY AND CORRUPTION

Exor’s Code of Conduct includes, among others, rules related to anti-bribery, anti-corruption, competitive

behaviour and conflicts of interest. Exor is committed to the highest standards of integrity, honesty, correctness,

fairness and legality in all internal and external affairs and will not tolerate any kind of bribery or corruption.

In particular, the Company asks all recipient of the Code of Conduct to participate actively in the fight against

every form of corruption and to avoid any activity or behaviour, which is incompatible with the obligations arising

from the relationship with the Company on behalf of which they are acting.

It is also forbidden to offer, promise, give, pay or authorise the giving or payment, directly or indirectly, of an

economic advantage or other utility to a third party (private or public) with the object of:

–Inducing a third party to perform any function or act in a manner, which is improper or contrary to the duties

of his or her position (or to reward the performance of the same).

–Improperly obtaining or maintaining an unfair business advantage, in violation of the applicable laws.

A violation of anti-bribery and anti-corruption laws is a serious offence for both companies and individuals,

which can result in significant fines, reputational damage and imprisonment of individuals.

4.INSIDER TRADING POLICY

The Exor Insider Trading Policy describes the guidelines, recommendations and prohibitions for all members of

the Board of Directors and employees of Exor regarding the legal and regulatory duties and sanctions

applicable to insider trading and unlawful disclosure of inside information. In addition, the Insider Trading Policy

states the notification obligations that must be fulfilled under Dutch and Italian law by members of the Board of

Directors when dealing in securities of Exor and its group companies. The Insider Trading Policy is also

applicable to persons closely associated (immediate family members or members of the same household) with

the members of the Board of Directors or employees.

With the Insider Trading Policy Exor makes sure that the requirements of article 18(2) and 19(5) of the Market

Abuse Regulation (Regulation 596/2014) will be fulfilled. The amended and restated Exor Insider Trading Policy

was adopted by the Board of Directors on 13 November 2019.

5.TAX APPROACH

Responsible tax behaviour is an essential element and an integral part of Exor’s sustainability strategy. Thereby

Exor takes the social and corporate responsibility into consideration and the interests of all its stakeholders. As

part of Exor’s aim to create sustainable growth for all its stakeholders and recognising the role that tax plays in

this regard, Exor commits to the following global tax approach.

Profile

Exor aims for a low tax risk profile. The tax regulations are subject to change, among others due to recent

developments in the international tax arena (e.g. BEPS). The tax regulations are often complex and subject to

interpretation. In that regard, tax certainty is aimed on the adopted tax positions. Where no certainty can be

obtained in advance, Exor ensures that the position is settled in line with its tax approach.

Structuring

Exor uses structures that meet the intentions and the spirit of the law and does not compromise business

motives for tax gains. Exor does not use tax havens (as defined by the European Commission’s “blacklist”) for

tax avoidance purposes and does not engage in artificial tax arrangements. Exor aims for a tax neutral

investment structure, not resulting in economic double taxation for its investors.

Tax planning is considered part of the overall business strategy but Exor ensures that it is based on sound

commercial business activity. This means that aside from factors such as financial impact, complexity and

reputation, solid business and/or commercial reasons have to exist.

BOARD REPORT

127

Compliance

Exor strives to be compliant with all applicable laws at all times. Exor’s tax approach is based on a well-defined

set of principles and internationally accepted standards. We support and adhere to the principles promoting tax

transparency and responsible tax management as set out in the OECD Action Plan on Base Erosion and Profit

Shifting (BEPS), and the EU Anti-Tax Avoidance Directives (ATAD I and II).

Exor aims to comply with the spirit as well as the letter of the law. Exor complies with any legitimate disclosure

requirement at first demand. Exor files its tax returns timely and accurately in compliance with reasonable and

responsible interpretations of local tax laws and regulations. Moreover, the way of working conforms to Exor’s

Code of Conduct.

Transfer pricing

Exor aims to pay an appropriate amount of tax according to where value is created within the normal course of

business activity. Any transfer pricing is always calculated using the “arm’s-length” principle.

Transparency

Exor integrates transparency in its approach to tax. Disclosures are made in accordance with the relevant

domestic regulations, as well as applicable reporting requirements and standards.

Relationships with tax authorities

Exor seeks to develop strong, honest and mutually respectful relationships with national tax authorities based

on transparency and mutual trust. All dealings with them are undertaken in a professional, courteous and timely

manner. Exor provides the tax authorities with all relevant information they require within a reasonable

timeframe.

6.HR POLICY

Safeguarding and ensuring the well-being of the people that work at and within Exor is of critical importance.

Their creativity, drive, perseverance and loyalty have contributed to the successful development of the

Company and will continue to shape its future. Exor makes high demands of its employees: expecting them to

excel in their work, to collaborate in diverse teams and to improve and expand their own capabilities.

Exor is committed to a working environment where there is mutual trust and respect and where everyone feels

responsible for the performance and reputation of the Company.

In return, Exor offers a chance to operate in a dynamic and enjoyable work environment and to collaborate with

highly skilled and ambitious colleagues from all over the world. Exor wants its employees to enjoy their work

and to be proud to work for the Company.

Exor offers programs and tools to help its employees to balance their personal and professional lives.

Depending on the employee needs, Exor provides the tools to address the expectations of an evolving labour

market. Exor has arrangements in place to improve work-life balance including flexitime, part-time or reduced

hours, telecommuting, parental leave and other leaves.

6.1WORKPLACE HEALTH AND SAFETY

Exor provides for working conditions which respect the dignity of the individual and it assures a healthy and

safe workplace, in compliance with the applicable occupational accident prevention and health regulations. It

also promotes a health and safety culture among all its employees.

7.EXOR EMPLOYEE STATISTICS

Exor has a lean organisation structure at holding company level, employing 19 people at 31 December 2021.

Exor puts considerable effort into its recruiting processes, training and competency development, and into

building a strong company culture, because it believes in the importance of its people in its future success. As a

result, the Exor workforce is characterised by its diverse, youthful and intellectually curious nature.

Moreover, Exor recognises that its employees possess considerable expertise and talent that can be used for

the betterment of communities in which it operates. Exor employees are actively encouraged to support

educational endeavours whether it be as mentors, guest speakers, or experts in their respective field.

128

BOARD REPORT

Exor promotes diversity and believes that no individual should be subjected to discrimination based on their

age, gender, sexual orientation, race, nationality, political opinion or religious faith (for example). The Company

also undertakes to ensure that authority is exercised fairly and correctly, avoiding any abuse of power or

activities that harm the dignity and autonomy of employees or collaborators.

Under no circumstances will Exor tolerate requests or threats aimed at inducing persons to act in breach of the

law or of the Code of Conduct, or to behave in a manner, which conflicts with the moral convictions and

personal preferences of the individual.

Exor values and promotes a multicultural environment within its offices and its employees come from diverse

professional, national and cultural backgrounds. As a result, it is tracking diversity and plans to broaden the

dimensions under which diversity is measured over time in order to allow truly diverse workplaces to flourish.

Key workforce metrics are reported below. Please note 2020 figures have been restated due to the fact that

Exor Capital (previously Exor Investment (UK) LLP) has become an independent operating company outside of

the Holdings System.

BY EMPLOYMENT CONTRACT (PERMANENT AND TEMPORARY), BY GENDER

Type of employment

contract

31 December 2021

31 December 2020

Male

Female

Total

Male

Female

Total

Permanent

Temporary

Total

BY GEOGRAPHICAL AREA

Geographical Area

31 December 2021

31 December 2020

Male

Female

Total

Male

Female

Total

The Netherlands

Luxembourg

United Kingdom

Total

PER EMPLOYEE CATEGORY BY GENDER

Employment category

31 December 2021

31 December 2020

Male

Female

Total

Male

Female

Total

Top Managers

Middle-managers

Professionals

Total

BOARD REPORT

129

PER EMPLOYEE CATEGORY BY AGE GROUP

Employment category

31 December 2021

31 December 2020

<30

30-50

>50

Total

<30

30-50

>50

Total

Top Managers

Middle-managers

Professionals

Total

EMPLOYEE TURNOVER

New hires

2021

2020

Number of employees

Turnover %

31.6%

17.6%

Leavers

2021

2020

Number of employees

Turnover %

21.1%

29.4%

In 2021, among the new hires, two were female and four were male. Of the leaving employees, three were

female and one was male.

In 2020, all the new hires were female. Of the leaving employees, three were female and two were male.

130

BOARD REPORT

8.BOARD DIVERSITY

As governance is the tool that Exor uses to steer its companies on their path to greatness, the Company

believes that its own governance must meet the highest standards. Therefore, Exor wants to ensure that the

diversity of thought in its Board continues to be a central factor in its governance.

To meet this objective, Exor ensures that its Board of Directors has the diversity of experience, expertise and

backgrounds, and the appropriate independence and judgment needed to fulfil its responsibilities and execute

its duties.

Independent

Male

Aged 50+

6 nationalities

Non independent

Female

Aged 30-50

MARC

BOLLAND

JOSEPH Y.

BAE

AJAY

BANGA

MELISSA

BETHELL

LAURENCE

DEBROUX

Senior Operating Partner and

Chairman Europe at the

Blackstone Group

International Partners LLP

Co-Chief Executive Officer of

KKR

Executive Chairman of

Mastercard

Partner at Atairos

and Managing Partner of

Atairos Europe

Board Member of HEC Paris,

Novo Nordisk A/S and former

CFO of Heineken N.V.

For further information, please refer to the Directors’ full biographies under the Governance section of the Exor

website.

At 31 December 2021, the composition of the Board of Directors by gender and age groups is as follows:

Directors by gender

and age group

30-50

>50

Total

Male

Female

Total

BOARD REPORT

131

V. EU TAXONOMY ON SUSTAINABLE ACTIVITIES

The EU Taxonomy is a classification system introduced by the Regulation (EU) 2020/852 (“the Regulation”) and

designed to encourage investments towards sustainable activities and to boost the achievement of the goals set by

the European Green Deal. The Regulation defines a set of environmentally sustainable economic activities, in

relation to six different environmental objectives. During 2021, the first two, Climate Change Mitigation and Climate

Change Adaptation, were regulated through the publication of the 2021/2139 Delegated Act (“Climate Delegated

Act”), that contains the description of each activity and the related technical screening criteria defining the condition

under which the activity can be defined as “Taxonomy-aligned”. The remaining four objectives (Sustainable use and

protection of water and marine resources, Transition towards a circular economy, Prevention and reduction of

pollution and Protection and restoration of biodiversity and ecosystems) will be regulated during 2022.

For this first reporting year, companies within the scope of the Regulation are required to disclose the proportion of

turnover, capital expenditures (CapEx), and operating expenditures (OpEx) of taxonomy eligible activities related to

climate change objectives, i.e. the proportion of activities described in the Climate Delegated Act, irrespective of

whether that economic activity meets any or all of the technical screening criteria.

In this context, working closely with the operating companies, Exor proceeded to a preliminary assessment of the

eligibility of the Group’s activities, matching them with those listed in the Annexes 1 and 2 of the Climate Delegated

Act. By analysing both operating companies’ business activities and related NACE codes, compared to those

foreseen by the EU Taxonomy, the following eligible activities have been identified.

SECTOR

ACTIVITY

DESCRIPTION

OPERATING COMPANY1

MANUFACTURING

3.3 – Manufacture of low carbon

technologies for transport

Manufacture of cars

Ferrari

Manufacturing of Commercial

Vehicles segment (CV), vehicle

maintenance and repair

CNH Industrial

TRANSPORT

6.5 – Transport by motorbikes,

passenger cars and light

commercial vehicles

Financial services activities

Ferrari

Leasing for CV vehicles

CNH Industrial

INFORMATION AND

COMMUNICATION

8.3 – Programming and

broadcasting activities

Frequency modulation radio

broadcasting

GEDI

ARTS, ENTERTAINMENT AND

RECREATION

13.2 – Libraries, archives,

museums and cultural activities

Museum

Juventus

13.3 – Motion picture, video and

television programme production,

sound recording and music

publishing activities

TV Production

Juventus

1.The scope of the assessment includes all subsidiaries considered significant and consolidated with line-by-line method. Companies consolidated at equity

method or reclassified within assets held for sales are excluded from the analysis. The scope of the assessment includes all subsidiaries considered significant

and consolidated with line-by-line method. Companies consolidated at equity method or reclassified within assets held for sales are excluded from the analysis.

The most relevant contribution to the consolidated KPIs arises from CNH Industrial and Ferrari operations in

manufacturing, maintenance and repair of commercial vehicles (the first) and cars (the latter). Additional residual

eligible activities have been detected in GEDI and Juventus.

Based on this assessment, each operating company determined the proportion of turnover, CapEx and OpEx

referred the eligible activities, pursuant to provisions laid down in the Regulation and the 2021/2178 Delegated Act.

132

BOARD REPORT

In light of the regulatory developments, and the subsequent extension of the scope of the Regulation foreseen for

2022, the Group will carry out additional analysis that can eventually identify further eligible activities, to be

disclosed in next reporting cycle.

2021

EU TAXONOMY - ELIGIBLE

EU TAXONOMY – NOT ELIGIBLE

Turnover

36%

64%

CapEx

39%

61%

OpEx

56%

44%

Accounting Policy (1.2.1)

For the determination of the three KPIs, the Accounting and Finance Department of each operating company have

been involved and, where relevant, the Sustainability Department. Based on the indications given in Annex 1 to

Delegated Act 2178/2021, each Department identified the values to be included in the KPIs from the balance sheet

items, as described in the next paragraph.

For the calculation of the numerator, only the balance sheet items related to the eligible activities (3.3, 6.5, 8.3, 13.2

and 13.3) were considered. For the calculation of the denominator, all the items provided for by the regulations at a

consolidated Exor N.V. level were included, as specified within the contextual information paragraph.

Assessment of compliance with Regulation (EU) 2020/852 (1.2.2)

The activities identified as Taxonomy eligible are listed in the table above. The avoidance of double counting has

been made possible by:

•Eliminating the infra – group transactions from the calculation;

•Assessing the reconciliation between the line items at company level and their reclassification at

consolidated level.

Contextual information (1.2.3)

The KPIs were determined by aggregating the single KPIs of each component, after having removed potential

infra-Group items.

KPI

Denominator

Numerator

Turnover

Consolidated net turnover in accordance with IAS 1.82(a) and with article

2, point (5), Directive 2013/34/EU

Net revenues from eligible activities1

CapEx

Additions to tangible and intangible fixed assets during the financial year,

before depreciation, amortization and any re-measurements, including

those resulting from revaluations and impairments, as well as excluding

changes in fair value. It includes acquisitions of tangible fixed assets

(IAS 16), intangible fixed assets (IAS 38) and right-of-use assets (IFRS

16), and additions resulting from business combinations.

Additions related to capital expenditures referred to

the identified eligible activities and related

economic activities connected to individual

measures enabling the activities to become low-

carbon or to lead to greenhouse gas reductions as

well as individual building renovation measures.

OpEx

Direct non-capitalized costs that relate to:

a.research and development,

b.building renovation measures,

c.short-term lease,

d.maintenance and repair

and any other direct expenditures relating to the day-to-day servicing of

assets of property, plant and equipment.

Direct non-capitalized costs related to the identified

eligible activities and related to the purchase of

output from taxonomy-eligible economic activities

connected individual measures enabling the

activities to become low-carbon or to lead to

greenhouse gas reductions as well as individual

building renovation measures.

1.According to the Climate Delegated Act, if the activities contribute to the climate change adaptation objective, the turnover can be included in the numerator

only if they qualify as "enabling activities", i.e. provided they meet the technical screening criteria laid down in Annex I and II to the Climate Delegated Act.

Since the actual alignment with the technical screening criteria has not been assessed yet, it was not possible to determine whether the activity can be defined

as enabling. Therefore, activities 8.3, 13.2 and 13.3 are marked as “eligible-to-be-enabling” for this reporting cycle, and revenues associated with the radio

activity, the Juventus museum and TV production have been included in the numerator.

There are no amounts related to eligible activities conducted for the internal consumption of the Group. Within the

CapEx and OpEx items, there are no items related to a plan to expand the economic activities aligned to the

Taxonomy.

BOARD REPORT

133

VI. GRI CONTENT INDEX

General disclosures

Page

Comment

Organizational profile

102-1

Name of the organization

Exor N.V.

102-2

Activities, brands, products and services

5-9

102-3

Location of headquarters

102-4

Location of operations

102-5

Ownership and legal form

63-69

102-6

Markets served

Mainly Europe and United States.

102-7

Scale of the organization

3, 18-25,

128-130

102-8

Information on employees and other workers

128-130

102-9

Supply chain

As a diversified holding company with a lean organization of 19 employees at

31 December 2021, Exor's supply chain is limited to office supplies and

consulting or service companies in its main offices in Amsterdam and London.

There has been no major change of suppliers in 2021 compared to 2020.

102-10

Significant changes to the organization and its supply

chain

There have been no significant changes to the organization or supply chain.

102-11

Precautionary Principle or approach

70-82

No direct reference is made to the precautionary principle or approach at the

Exor holding level. Reference is made to the risk management framework, risk

and control systems in place.

102-12

External initiatives

107,

110-114

102-13

Membership of associations

110-114

Strategy

102-14

Statement from senior decision-maker

I-XV

See Letter to shareholders.

Ethics and integrity

102-16

Values, principles, standards, and norms of behaviour

5-6, 96-99

Governance

102-18

Governance structure

83-102

102-22

Composition of the highest governance body and its

committees

84-94

102-25

Conflicts of interest

102-35

Remuneration policies

141-150

Stakeholder engagement

102-40

List of stakeholder groups

108

102-41

Collective bargaining agreements

No employees at the Exor holding level are covered by such agreements.

Reference is made to the Code of Conduct (available on the Exor’s website),

where Exor recognizes the freedom of association and the right to collective

bargaining.

102-42

Identifying and selecting stakeholders

108

102-43

Approach to stakeholder engagement

108

102-44

Key topics and concerns raised

108, 125

Reporting Practice

102-45

Entities included in the consolidated financial statements

178

102-46

Defining report content and topic Boundaries

125

102-47

List of material topics

125

102-48

Restatements of information

No changes compared to Year 2020.

102-49

Changes in reporting

No significant changes compared to Year 2020.

102-50

Reporting period

Year 2021

102-51

Date of most recent report

31 December 2020

102-52

Reporting cycle

Annually

102-53

Contact point for questions regarding the report

[email protected]

102-54

Claims of reporting in accordance with the GRI

Standards

103

102-55

GRI content index

134-135

102-56

External assurance

Not verified by an external third party.

134

BOARD REPORT

Topic-specific disclosures

Page

Comment

Economic

103-1

Explanation of the material topic and its Boundary

125

103-2

103-3

Management approach components and evaluation

106-112,

125

201-1

Direct economic value generated and distributed

3, 5-6

203-2

Significant indirect economic impacts

107,

109-124

205-2

Communication and training about anti-corruption

policies and procedures

205-3

Confirmed incidents of corruption and actions taken

207-1

Approach to tax

127-128

Environmental

103-1

Explanation of the material topic and its Boundary

125

103-2

103-3

Management approach components and evaluation

106-112,

125

305-1

Direct (Scope 1) GHG emissions

109-110

305-2

Energy indirect (Scope 2) GHG emissions

109-110

305-3

Other indirect (Scope 3) GHG emissions

109-110

Social

103-1

Explanation of the material topic and its Boundary

125

103-2

103-3

Management approach components and evaluation

106-112,

125

401-1

New employee hires and employee turnover

128-130

405-1

Diversity of governance bodies and employees

128-131

419-1

Non-compliance with laws and regulations in the social

and economic area

No significant fines or non-monetary sanctions were incurred during FY 2021.

BOARD REPORT

135

VII. SASB STANDARDS

Exor uses the SASB Standards (version 2021-12) specific to the industry "Asset Management & Custody

Activities", in line with the Sustainable Industry Classification System.

SASB DISCLOSURE TOPICS & ACCOUNTING METRICS

Topic

Accounting Metric

SASB code

Comment

Page

Transparent

Information & Fair

Advice for

Customers

(1) Number and (2) percentage of covered employees with

a record of investment-related investigations, consumer-

initiated complaints, private civil litigations, or other

regulatory proceedings

FN-AC-270a.1

Not applicable: Exor N.V. has no customers or

clients.

Total amount of monetary losses as a result of legal

proceedings associated with marketing and communication

of financial product related information to new and

returning customers

FN-AC-270a.2

Not applicable: Exor N.V. has no customers or

clients.

Description of approach to informing customers about

products and services

FN-AC-270a.3

Not applicable: Exor N.V. has no customers or

clients.

Employee Diversity

& Inclusion

Percentage of gender and racial/ethnic group

representation for (1) executive management, (2) non-

executive management, (3) professionals, and (4) all other

employees

FN-AC-330a.1

Exor discloses Board diversity metrics and

workforce breakdown by gender, age,

geographic location, contract type and

category.

128-131

Incorporation of

Environmental,

Social, and

Governance

Factors in

Investment

Management &

Advisory

Amount of assets under management, by asset class, that

employ (1) integration of environmental, social, and

governance (ESG) issues, (2) sustainability themed

investing, and (3) screening

FN-AC-410a.1

Not applicable: Exor N.V. has no customers or

clients.

Description of approach to incorporation of environmental,

social, and governance (ESG) factors in investment and/or

wealth management processes and strategies

FN-AC-410a.2

After identifying potential opportunities, Exor

assesses them against a set of clear

investment criteria. Following its assessment,

Exor selects companies that it believes have

the capacity to become great. One element of

Exor’s definition of great companies are those

that act in responsible way: they align with the

best standards and frameworks in ESG, they

identify key material themes and put in place

targets with metrics as they continue to the

raise the bar in their aspiration of industry ESG

leadership.

Description of proxy voting and investee engagement

policies and procedures

FN-AC-410a.3

Exor engages with its operating companies

through active representation and participation

in the Boards, Regular Communication and

meetings.

107-108

Business Ethics

Total amount of monetary losses as a result of legal

proceedings associated with fraud, insider trading, anti-

trust, anti-competitive behaviour, market manipulation,

malpractice, or other related financial industry laws or

regulations

FN-AC-510a.1

In February 2022, Exor has settled with the

Italian Tax Authorities on a complex tax issue,

specifically in respect of the Exit Tax.

Description of whistleblower policies and procedures

FN-AC-510a.2

Description of whistleblowing mechanism is

presented in the Sustainability Report.

126

136

BOARD REPORT

SASB ACTIVITY METRICS

Activity Metric

SASB code

Comment

Page

(1) Total registered and (2) total unregistered assets under

management (AUM)

FN-AC-000.A

Not applicable: Exor N.V. has no customers or

clients.

Total assets under custody and supervision

FN-AC-000.B

Not applicable: Exor N.V. has no customers or

clients.

BOARD REPORT

137

VIII. TCFD CONTENT INDEX

Topic

TCFD code

Page

Comment

Governance

Describe the board’s oversight of climate-related risks and opportunities

TCFD – G(a)

93-94

The Board of Directors oversees ESG

matters through a dedicated ESG

committee.

Metrics & Targets

Disclose the metrics used by the organization to assess climate-related

risks and opportunities in line with its strategy and risk management

TCFD – MT(a)

109-110

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse

gas (GHG) emissions and the related risks

TCFD – MT(b)

109-110

Describe the targets used by the organization to manage climate-

related risks and opportunities and performance against targets.

TCFD – MT(c)

109-110

138

BOARD REPORT

REMUNERATION REPORT

BOARD REPORT

139

REMUNERATION REPORT

Foreword

This section on the remuneration of the Executive and Non-Executive directors is divided into two sections.

Section I of the Remuneration Report provides general information regarding the current remuneration policy (the

“Remuneration Policy”) – as approved and adopted by the general meeting of shareholders on 20 May 2020 – and

describes the policies, structures and principles applicable to the remuneration of executive directors (the

''Executive Directors'') and non-executive directors (''Non-Executive Directors'') of EXOR N.V. (“Exor” or the

“Company”).

A proposal for a new Remuneration Policy, including a new long-term incentive plan will be presented to Exor's

shareholders for approval at the Annual General Meeting of Shareholders (“AGM”) in May 2022.

Section II of the Remuneration Report provides information on the application of the Remuneration Policy during

the year and the compensation paid to the Executive and Non-Executive Directors (together, the ''Directors'' and

each of them individually, a ''Director'') with reference to the period from 1 January 2021 until the end of the

financial year (i.e. 31 December 2021). The Chief Executive Officer, Mr John Elkann, is the sole Executive Director

of the Company.

Within the scope of EXOR’s Remuneration Policy, the remuneration of the Executive Directors is determined by the

board of directors (the ''Board'') at the recommendation of the Compensation and Nominating Committee of the

Company (the “CNC”).

This Remuneration Report contains disclosures as required under the Shareholder Rights Directive II and its

implementation into the Dutch Civil Code, and in line with this regulation, will be subject to an advisory vote at the

2022 AGM.

SECTION I

Objectives and principles of the Remuneration Policy

Objectives and principles

The objective of the Remuneration Policy is to provide a compensation structure that allows the Company to attract

and retain the most highly qualified executives and to motivate them to achieve business and financial goals that

create long-term value for shareholders in a manner consistent with the Company’s core business and leadership

values.

For these objectives to be achieved, the Remuneration Policy is determined considering (i) best practices in

compensation policy design (in accordance, inter alia, with the Dutch Corporate Governance Code); and (ii) the

need for sustainable compensation and aligned with the medium-to-long-term interests of all stakeholders.

The Remuneration Policy aims to provide a total compensation opportunity that is competitive compared to the

compensation paid by comparable companies and to reinforce the Company’s performance-driven culture and

meritocracy. It furthermore assures that the interests of the Executive and Non-Executive Directors are closely

aligned to those of the Company, its business and stakeholders, encouraging them to perform at the best of their

ability with a view to the Company's sustainable success.

All the above is in the context of the specific characteristics of the Company, in particular of the ownership structure

and the simple organizational structure. The Remuneration Policy is determined to be coherent with the Company’s

risk management policy and internal control system.

The Remuneration Policy was, in light of the new disclosure requirements under the new Shareholders Rights

Directive, last amended by the AGM in May 2020 and was well received by the shareholders and was approved by

over 97% of the votes. At that time, no new long-term incentive scheme was implemented due to the prevailing

economic situation in financial year 2020.

During the last 12 months, the CNC reviewed and assessed the effectiveness of the variable remuneration and the

Remuneration Policy as a whole. It is envisaged that the Company will submit a new Remuneration Policy for the

Company's Executive Directors at the shareholders’ meeting to be held on 24 May 2022. This proposal will

emphasize the Company's performance driven culture and include a re-design of the long-term incentive.

140

BOARD REPORT

The proposed Remuneration Policy will be placed on the Company’s website (https://www.exor.com) upon

convening the 2022 AGM. The 2020 Remuneration Report was presented to the shareholders for an advisory vote

at the AGM held on 27 May 2021 and received 82.09% shareholders’ approval. Changes have been made to this

year’s Remuneration Report to address the feedback received by some institutional investors.

Scenario analysis

In the CNC, the Non-Executive Directors examined, by taking into account different scenario assumptions, the

relationship between the performance criteria chosen and the possible results of the variable remuneration

components and the manner in which this effects the remuneration of Exor’s Executive Directors (scenario

analysis).

As such, the Non-Executive Directors have also assessed the functioning of the Remuneration Policy taking into

account the relationship between the Company’s objectives, the chosen performance criteria and the long-term

interest/value creation. The CNC believe that linking our remuneration primarily to financial performance criteria is

in line with Exor's role as holding company and its purpose to build great companies and sustainable long-term

perspective. The CNC will continue to assess the adequacy of the performance measures used in light of long-term

sustainable value creation.

2021 Internal pay ratios

In line with the Dutch Corporate Governance Code and in order to make sure that the remuneration to be awarded

is proportional to those set for employees within Exor, the internal pay ratio is taken into consideration when

determining the Remuneration Policy for the Executive and Non-Executive Directors. Analysing the difference in

remuneration levels of the Executive Directors, Non-Executive Directors and other employees helped the CNC in

developing a balanced view of the remuneration levels. The ratio between the annual total remuneration of the

Executive Director and the average total remuneration for all employees within the Holdings System (as defined in

the section Alternative Performance Measures of this Annual Financial Report) was 9:1 for the 2021 financial year

and down compared to the financial year 2020 (13:1).

The development of this ratio will be monitored and disclosed going forward. The CNC also monitors the ratio on a

total compensation basis, incorporating the value of variable compensation delivered to the Executive Director and

all employees within the Holdings System.

Framework for Executive Directors Remuneration

The Board determines the compensation for Executive Directors based on recommendations from the CNC and in

accordance with the Remuneration Policy.

The compensation structure for Executive Directors includes a fixed component and a variable component based

on short and long-term performance. A balanced combination hereof, that also takes into account suitably

ambitious performance parameters, provides the Executive Directors with an incentive to implement the corporate

strategy and to ensure Exor's sustained success. The CNC believe this reconciles the interests of all stakeholders,

in particular those of the shareholders of the Company and those of the employees.

In determining the level and structure of the compensation of Executive Directors, the Non-Executive Directors will

take into account, among other things, the Company’s financial and operational results and other business

objectives. The components of Executive Directors’ variable remuneration are subsequently linked to

predetermined, assessable targets. The Company establishes target compensation levels using a market-based

approach and periodically benchmarks the compensation program of the Executive Directors against peer

companies and monitors compensation levels and trends in the market, whilst also taking into account the broader

public opinion.

Fixed components

The base salary is the fixed part of the annual cash compensation for Executive Directors. The primary objective is

to attract and retain highly qualified senior executives. The base salary is set at a market-competitive level taking

into account the individual responsibilities, experience and required competences of the Executive Directors. The

Company’s policy is to periodically benchmark comparable salaries paid to executives with similar experience by

comparable companies.

BOARD REPORT

141

Variable components

Executive Directors are also eligible to receive variable compensation subject to the achievement of pre-

established financial performance criteria, aligning to the Dutch Corporate Governance Code. The variable

components consist of Short- and Long-Term Incentives which will only be paid if at the end of the year the average

change in Net Asset Value (the “NAV”) per Exor share in US$ in the three preceding years exceeds the average

change in the MSCI World Index in the three preceding years.

The CNC believe that linking the variable component of the remuneration primarily to financial performance criteria

is in line with Exor's role as a holding company and with its purpose to build great companies and a sustainable

long-term perspective. Exor focuses on economic growth and wants its Executive Directors to do the same with a

view to achieving long-term value creation for all stakeholders. The CNC will continue to assess the adequacy of

the performance measures used to support sustainable long term value creation.

Short-Term Incentives

The primary performance objective of short-term variable cash incentives is to incentivize Executive Directors to

focus on the Company's priorities for the current or next year. Executive Directors’ variable remuneration is linked

to the achievement of pre-determined short-term (i.e. annual) financial and other identified objectives proposed by

the CNC and approved by the Non-Executive Directors each year and which are ultimately to be considered to be

in the best interest of all stakeholders.

Long Term Incentives

The primary performance objective of long-term variable incentives is to (i) align the interests of the Executive

Directors with the interest of Exor's shareholders and other stakeholders; (ii) motivate the attainment of the

Company's financial and other performance goals and reward sustained long-term value creation; and (iii) serve as

an important attraction and long-term retention tool that is being used to strengthen loyalty to the Company.

Other Benefits

Executive Directors may also be entitled to customary fringe benefits such as company car and driver, personal/

home security, (medical) insurances, tax preparation and financial counselling. The CNC may grant other benefits

to the Executive Directors in particular circumstances. In 2021 no such particular circumstances occurred.

SECTION II

2021 Application of the Executive Remuneration Framework

The applicability of the remuneration framework for the sole Executive Director, Mr John Elkann, is described

hereafter.

Fixed components

The annual fixed compensation of the Executive Director is US$1,000,000. No increase was made during 2021.

Variable components

The Executive Director is eligible for a variable component of US$1,000,000, the so-called “cash performance”. As

stipulated in the Remuneration Policy, the cash performance will only be paid if at the end of the year the average

change in Net Asset Value (the “NAV”) per EXOR share in US$ in the three preceding years exceeds the average

change in the MSCI World Index in the three preceding years.

For the year ending 31 December 2021, performance of the three preceding financial years 2019 – 2021 was:

•The average performance of the MSCI World Index was: 19.8%

•The average change in EXOR’s NAV per share in US$ was: 22.4%

On the basis that the predetermined performance objective was achieved, the Executive Director’s variable

component will be paid in full. The CNC is of the view that this outcome reflects the overall performance of the

individual and the Company.

142

BOARD REPORT

Framework for Non-Executive Directors Remuneration

The remuneration of Non-Executive Directors is a cash remuneration only which is fixed and is not dependent on

the Company’s financial results. Non-Executive Directors are not eligible for variable compensation and do not

participate in any incentive plans. The committee membership and committee chair fee payments will be made all

in cash. Based on the Remuneration Policy, the annual compensation for Non-Executive Directors is as follows:

–€50,000 for each Non-Executive Director;

–an additional €15,000 for each member of the Audit Committee and €20,000 for the Audit Committee

Chairman;

–an additional €7,500 for each member of the Compensation and Nominating Committee and €10,000 for

the Compensation and Nominating Committee Chairman; and

–an additional €7,500 for each member of the ESG Committee and €10,000 for the ESG Committee

Chairman.

The remuneration as received by each Non-Executive Director individually is reflected in more detail in the table in

the paragraph Directors' Compensation.

Incentive Plans for Executive Directors and management

By means of the resolution adopted by the general meeting of shareholders, the Company resolved to maintain

effective all the stock option plans already established by EXOR S.p.A. (now EXOR N.V.) in order to attract, retain

and motivate directors as well as employees and other individuals having business relationships with Exor to

reward such persons for their loyalty and their commitment to the long-term value creation of Exor (the “Stock

Option Plans”).

The Remuneration Policy has proven to be effective in terms of establishing a correlation between Exor’s strategic

goals and the chosen performance instrument (Stock Option Plans), as the main key performance instrument of the

Executive Director’s long-term incentive, which represents a significant part of his compensation package and

supports both Exor’s business strategy and the long-term value creation for shareholders, being stock appreciation.

The Long-term incentive compensation is an important component of the Executive Directors’ compensation

structure and, in addition, a tool to motivate and reward employees of the Company. This compensation component

is designed to:

–align the interest of our Executive Directors and other key contributors with the interests of Exor's

shareholders;

–motivate the attainment of Company performance goals and reward sustained shareholder value creation;

and

–serve as an important attraction and long-term retention tool that management and the Compensation and

Nominating Committee use to strengthen loyalty to the Company.

The Long term incentive compensation is a retention plan and for this reason not a performance linked

remuneration, however the recipient has to be an employee of Exor and can only exercise the stock option 3 years

after the vesting date, hence in line with the Dutch Corporate Governance Code the Stock Options cannot be

exercised during the first three years after they have been granted.

The 2012 Incentive Plan

The 2012 Incentive Plan is in two parts, the first has the form of a stock grant and the second that of a stock option.

Under the stock grant part of the plan, which was denominated as the “Long Term Stock Grant”, recipients were

granted a maximum of 400,000 shares, conditional on the continuation of the professional relationship with the

Company and with companies in the so called “Holdings System”. At the end of May 2018, the Long Term Stock

Grant vested and 124,612 shares were delivered to the beneficiaries.

Under the second part, denominated as the “Company Performance Stock Option”, a maximum of 3,000,000

options are granted, allowing recipients to purchase a corresponding number of shares, conditional on the

achievement of a pre-established performance objective and on the continuation of the professional relationship

with the Company and with the companies in the Holdings System.

The performance objective was determined as the change in Exor’s NAV being greater than the change in the

MSCI World Index expressed in Euro in the year preceding the year in which the options vest.

BOARD REPORT

143

At the end of May 2018, under the Company Performance Stock Options vested 1,019,200 options of which

450,000 to the Executive Director and 569,200 to other beneficiaries; this allowed them to purchase a

corresponding number of EXOR ordinary shares at a price per share of €16.59 and €16.62, respectively. The

options were exercisable until the end of 2021. At the end of 2020 the options outstanding, vested and not

exercised, were 450,000 granted to the sole Executive Director of the Company and 252,000 to other beneficiaries.

During 2021, the Executive Director and the other beneficiaries exercised their respective options.

The 2016 Long Term Stock Option Plan

The general meeting of shareholders held on 25 May 2016 approved a stock option plan (the “2016 Long Term

Stock Option Plan”).

Under the 2016 Long Term Stock Option Plan, the CEO was awarded a number of options in 2016 made in lieu of

annual long-term incentive awards for five years 2016 through 2020. The final tranche of the 2016 award has

vested in 2021. In line with the Dutch Corporate Governance Code, each option may not be exercised until after 3

years from the vesting of the options and until 31 December 2026 and recipients who do not exercise their options

by that date will cease to have any rights.

The plans will be serviced exclusively through treasury shares of the Company, without recourse to the issue of

shares and, therefore, will not have a dilutive effect. If so required, the Company will purchase, in compliance with

the applicable regulations, a quantity of own shares sufficient to cover the entire plan approved by the

shareholders. In connection with the servicing of the plan no other financial instruments will be issued by the

Company or by its subsidiary or by third parties.

At the end of 2021 the options outstanding are 2,013,950 granted to the Executive Director of the Company (of

which 805,580 exercisable) and 923,185 to other beneficiaries (of which 368,099 exercisable) at the exercise price

of €32.38.

No awards were made under the 2016 Long Term Stock Option Plan during 2021.

Director and Officer Overlaps

There is an overlap between the composition of the Board of Directors of Giovanni Agnelli B.V. and that of the

Board of Directors of the Company.

More specifically, John Elkann, Alessandro Nasi and Andrea Agnelli are also Directors of Giovanni Agnelli B.V. of

which John Elkann is also the Chairman.

Non-monetary benefits and supplementary insurance coverage

In line with best practice in the field of compensation and in consideration of the specific responsibilities assigned,

the compensation plans of Directors include non-monetary benefits (such as, reimbursement of expenses for travel

outside the municipality of residence). For all Directors there is also insurance cover for directors’ civil liability

relating to claims for compensation for non-fraudulent acts performed in the performance of the director’s duties. All

the aforesaid being in addition to the reimbursement of out-of-pocket expenses incurred in the performance of the

activities associated with the responsibilities assigned.

There are no pension arrangements in place for the Directors.

Treatment on cessation of office and non-competition agreements

There are no severance agreements or arrangements between the Company and its Directors which provide for

indemnities in the event of early termination of the relationship or for the granting or maintaining of non-monetary

benefits for Directors who have left the Company or for consulting arrangements covering periods after termination

of the relationship or for compensation for non-competition agreements.

Board of Directors

Hereafter follows an illustration, on an individual basis, of the compensation paid in whatever form to the Executive

and Non-Executive Directors in the financial year 2021. The data in the tables relates to Board positions held in the

Company and in the listed and non-listed (operating) subsidiaries.

In addition, the share ownership table sets out the number of common shares of Exor and the (operating)

subsidiaries, owned by the members of the Board at the end of December 2021.

144

BOARD REPORT

Directors' Compensation

The following table summarizes the remuneration paid to the members of the Board for the year ended

31 December 2021.

Amount in €

EXOR N.V.

OTHER(1)

TOTAL

Directors of

Exor N.V.

Office

held

Year

Salary

Annual

fee

(cash)

Compensation

Annual fee

(equity)

Bonus

and

other

(non-

equity)

Committee

Total

Exor N.V.

Total

Other

Total

Compensation

ELKANN

John

Executive Director

(Chairman and CEO)

2021

850,043

1,473,676

897,918

3,221,637

379,025

3,600,662

2020

230,080

(2)

3,595,769

814,930

4,640,779

2,800,579

7,441,358

NASI

Alessandro

Non-Executive Director

(Vice Chairman)

2021

(3)

3,000

271,858

274,858

2020

(3)

7,500

727,653

735,153

AGNELLI

Andrea

Non-Executive Director

2021

(3)

566,423

2020

(3)

506,820

ELKANN

Ginevra

Non-Executive Director

2021

(3)

(4)

2020

(3)

(4)

BOLLAND

Marc

Non-Executive Director

2021

50,000

10,500

60,500

2020

12,500

(2)

12,500

BAE

Joseph

Non-Executive Director

2021

(5)

2020

(5)

BANGA

Ajay

Non-Executive Director

2021

(6)

30,000

6,000

36,000

2020

BETHELL

Melissa

Non-Executive Director

2021

50,000

21,500

71,500

2020

12,500

(2)

20,000

32,500

DEBROUX

Laurence

Non-Executive Director

2021

50,000

22,500

72,500

11,781

84,281

2020

12,500

(2)

15,000

27,500

HORTA-OSORIO

Antonio

Non-Executive Director

2021

(7)

20,000

4,000

24,000

252,464

276,464

2020

12,500

(2)

10,000

22,500

Total 2021

1,050,043

1,473,676

897,918

67,500

3,489,137

1,481,551

4,970,688

(1)Related to the remuneration received from the management positions held respectively at CNH Industrial, Ferrari, PartnerRe, Juventus and FCA (in 2020).

(2)In response to the healthcare crisis caused by the COVID-19 pandemic, the Board of Directors waived their full cash compensation from April 2020 to the end

of the year to help fund Company initiatives to support the communities in which Exor operates.

(3)Directors have waived their right to the emolument of €50,000 as determined by the Exor Shareholders' Meeting.

(4)Director has waived her right to the emolument of €10,767 ( €15,000 in 2020) as determined by the Exor Shareholders' Meeting.

(5)Director has waived his right to the emolument of €61,733 as determined by the Exor Shareholders' Meeting, €50,000 for Salary/Annual Fee and €11,733 for

Committee (€50,000 for Salary/Annual Fee and €7,500 for Committee in 2020).

(6)Director from 27 May 2021.

(7)Director until 27 May 2021.

BOARD REPORT

145

The following table summarizes the remuneration paid to the members of the Board for the year ended

31 December 2021 from the operating subsidiaries:

Amount in €

Other

Directors of

Exor N.V.

Office

held

Year

CNH

Industrial

Ferrari

PartnerRe

Juventus

FCA

Total

ELKANN John

Executive Director

(Chairman and CEO)

2021

336,938

42,087

379,025

2020

77,790

331,612

2,391,177

2,800,579

NASI Alessandro

Non-Executive Director

(Vice Chairman)

2021

271,858

2020

727,653

AGNELLI Andrea

Non-Executive Director

2021

558,537

7,886

566,423

2020

506,820

DEBROUX Laurence

Non-Executive Director

2021

11,781

2020

HORTA-OSORIO Antonio

Non-Executive Director

2021

252,464

2020

Total 2021

271,858

336,938

294,551

570,318

7,886

1,481,551

With regard to the remuneration received from the operating subsidiaries CNH Industrial, Ferrari, PartnerRe and

Juventus, reference is made to the information published in their respective annual reports.

146

BOARD REPORT

Directors’ Remuneration and Company Performance

In line with the Dutch Civil Code, the performance of the Company, the annual change of remuneration of each

Director, and of the average employee remuneration other than directors from 2017 to 2021 financial years is

disclosed in the following table.

€

2021

2020

2019

2018

2017

(Change to 2020)

(Change to 2019)

(Change to 2018)

(Change to 2017)

Company performance

Net profit attributable to owner of the

parent

1,717,000,000

(+5,823.3%)

(30,000,000)

(-101%)

3,053,000,000

(+126.7%)

1,347,000,000

(-3.23%)

1,392,000,000

(n/a)

Net Asset Value per share

132.42 (+29.7%)

102.08 (+ 3.5%)

98.6 (+37.2%)

71.89 (-9.6%)

79.48

Earnings per share - diluted

7.79 (+6,092%)

(0.13) (-101%)

13.12 (+131.4%)

5.67 (-3.4%)

5.87

Executive Director

John Elkann

3,221,637 (-30.6%)

4,640,779

(-13.67%)

5,375,390 (-0.85%)

5,421,511 (-2.2%)

5,543,052

Non-Executive Directors

Alessandro Nasi

3,000 (-60%)

7,500 (0%)

7,500

Andrea Agnelli

0 (0%)

Ginevra Elkann

0 (0%)

Marc Bolland

60,500 (+384%)

12,500 (-75%)

50,000 (-14,29%)

58,333 (-17%)

70,000

Joseph Bae

0 (0%)

n/a

Ajay Banga(1)

36,000 (+100%)

n/a

Melissa Bethell

71,500 (+120.0%)

32,500 (-53.57%)

70,000 (+13.51%)

61,667 (+23%)

50,000

Laurence Debroux

72,500 (+163.6%)

27,500 (-57.69%)

65,000 (+10.64%)

58,750 (+18%)

50,000

Antonio Horta-Osório(2)

24,000 (+6.7%)

22,500 (-62.5%)

60,000 (+7.46%)

55,833 (+12%)

50,000

Employees

Average employee remuneration(3)

373,126 (+5.3%)

354,494 (+3.2%)

343,415 (-9.3%)

378,649 (-18.1%)

462,566

(1)From 27 May 2021.

(2)Until 27 May 2021.

(3)Calculated as total employee cost divided by the average number of FTEs.

Stock options granted in previous years

The following table summarizes outstanding stock options held by the Executive Director of Exor at

31 December 2021:

at 1 January

2021

at 31

December

2021

Name/Plan

Grant Date

Exercise price

Granted and

not vested

Granted

Vested

Expired

Granted and

not vested

Elkann John / Exor

2016 Plan

7/1/2016

€32.38

402,790

—

402,790

—

BOARD REPORT

147

Share plans granted to Directors

The following table gives an overview of the share plans held by Directors of Exor at 31 December 2021:

Name

Plan

Grant Date

Vesting

Date

Number of

shares under

award at 1

January 2021

Granted

Vested

Number of shares

under award at 31

December 2021

subject to a

Performance

condition

ELKANN John

Ferrari Equity incentive Plan

2019-2021 PSUs and RSUs

April 2019

March 2022

20,703

—

20,703

13,802

ELKANN John

Ferrari Equity incentive Plan

2020-2023 PSUs and RSUs

April 2020

March 2023

4,829

—

4,829

3,219

ELKANN JOHN / Ferrari Equity

incentive Plan 2020-2022 PSUs

and RSUs

April 2021

March 2024

—

4,448

2,965

The number of conditional shares outstanding as per 31 December 2020 under the FCA 2019 and FCA 2020 plans

reported in the 2020 remuneration report have not been reported in the table shown above. This is because these

plans belong to Stellantis following the merger between PSA and FCA and Stellantis is not a subsidiary of Exor as

FCA was in the past.

Share Ownership

The following table summarizes the number of common shares of Exor and its subsidiaries owned by Exor

directors at 31 December 2021:

EXOR N.V.

common shares

CNH Industrial N.V.

common shares

Ferrari N.V.

common shares

JUVENTUS S.p.A.

ordinary shares

ELKANN John

15,375

NASI Alessandro

348,994

375

AGNELLI Andrea

1,122

96,711

148

BOARD REPORT

Consolidated Financial Statements

at 31 December 2021

CONSOLIDATED INCOME STATEMENT

Years ended 31 December

(€ million)

Note

2021

20201

Net revenues

33,617

26,792

Cost of sales

(25,979)

(21,937)

Selling, general and administrative expenses

(2,673)

(2,245)

Research and development costs

(1,823)

(1,699)

Other income (expenses), net

(378)

(734)

Result from investments

2,057

(1)

Net financial expenses

(169)

(390)

Profit (loss) before taxes

4,653

(214)

Tax expense

(1,302)

(16)

Profit (loss) from continuing operations

3,350

(230)

Profit (loss) from discontinued operations, net of tax

104

231

Profit (loss) for the period

3,454

Profit (loss) attributable to:

Owners of the parent

1,717

(30)

Non-controlling interests

1,737

Profit (loss) from continuing operations attributable to:

Owners of the parent

1,630

(214)

Non-controlling interests

1,720

(16)

Earnings per share (in €)

Basic earnings per share

7.803

(0.132)

Diluted earnings per share

7.792

(0.134)

Earnings per share from continuing operations (in €)

Basic earnings per share

7.409

(0.944)

Diluted earnings per share

7.398

(0.946)

1.The 2020 data have been re-presented following the classification of FCA and PartnerRe as Discontinued Operations for the year ended 31 December 2021,

as requested by the IFRS 5 – Non current Assets Held for Sale and Discontinued Operations.

(The accompanying notes are an integral part of these consolidated financial statements)

150

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Note

Years ended 31 December

(€ million)

2021

20201

Profit (loss) for the period from continuing operations

3,350

(230)

Profit (loss) for the period from discontinued operations

104

231

Profit (loss) for the period (A)

3,454

Items that will not be reclassified to the Consolidated Income Statement in

subsequent periods:

Gains (losses) on remeasurement of defined benefit plans

154

(18)

Share of gains (losses) on remeasurement of defined benefit plans for equity

method investees

252

—

Gains (losses) on financial assets at fair value through other comprehensive

income

(28)

108

Related tax effect

(20)

Items relating to discontinued operations, net of tax

197

(106)

Total items that will not be reclassified to the Consolidated Income

Statement in subsequent periods, net of tax (B1)

555

(2)

Items that may be reclassified to the Consolidated Income Statement in

subsequent periods:

Gains (losses) on cash flow hedging instruments

—

Foreign exchange translation gains (losses)

1,072

(1,552)

Share of other comprehensive income (loss) of equity method investees

261

(1)

Related tax effect

(19)

Items relating to discontinued operations, net of tax

2,193

(2,930)

Total items that may be reclassified to the Consolidated Income Statement in

subsequent periods, net of tax (B2)

3,533

(4,435)

Total Other Comprehensive Income (Loss), net of tax (B)=(B1)+(B2)

4,088

(4,437)

Total Comprehensive Income (A)+(B)

7,542

(4,436)

Total Comprehensive Income (Loss) attributable to:

Owners of the parent

3,811

(1,727)

Non-controlling interests

3,731

(2,709)

Total Comprehensive Income (Loss) attributable to owners of the parent:

Continuing operations

3,017

(1,540)

Discontinued operations

794

(187)

1.The 2020 data have been re-presented following the classification of FCA and PartnerRe as Discontinued Operations for the year ended 31 December 2021,

as requested by the IFRS 5 – Non current Assets Held for Sale and Discontinued Operations.

(The accompanying notes are an integral part of these consolidated financial statements)

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

151

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December

(€ million)

Note

2021

2020

Assets

Intangible assets

8,639

33,318

Property, plant and equipment

7,777

35,169

Investments and other financial assets

12,746

6,174

Deferred tax assets

1,165

2,192

Inventories

6,951

14,322

Trade and other receivables

18,415

24,102

Investments of reinsurance companies

—

14,422

Other assets

1,629

7,357

Assets held for sale

25,883

328

Cash and cash equivalents

7,905

35,561

Total Assets

91,111

172,945

Equity and Liabilities

Equity attributable to owners of the parent

16,759

13,090

Non-controlling interests

7,611

24,570

Total Equity

24,370

37,660

Liabilities

Provisions for employee benefits

1,592

10,671

Other provisions

3,384

15,176

Technical reserves reinsurance companies

—

13,336

Deferred tax liabilities

358

2,256

Financial debt and other financial liabilities

28,950

52,932

Trade payables

7,040

26,796

Tax payables

1,205

707

Other liabilities

5,987

13,212

Liabilities held for sale

18,225

199

Total Liabilities

66,741

135,285

Total Equity and Liabilities

91,111

172,945

(The accompanying notes are an integral part of these consolidated financial statements)

152

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

CONSOLIDATED STATEMENT OF CASH FLOWS

Years ended 31 December

(€ million)

Note

2021

20201

Cash flows from operating activities:

Profit (loss) from continuing operations

3,350

(230)

Amortisation and depreciation

1,728

1,689

Gains on disposal of non-current assets

(40)

(102)

Other non-cash items2

1,420

960

Dividends received

Change in provisions

357

148

Change in deferred taxes

(205)

(325)

Change in inventories, trade and other receivables and payables

(1,279)

1,758

Cash flows from operating activities – discontinued operations

(1,215)

10,134

Total

4,177

14,061

Cash flows used in investing activities:

Investments in property, plant and equipment and intangible assets

(1,960)

(1,653)

Investments in joint ventures, associates, unconsolidated subsidiaries and financial assets

(2,928)

(331)

Consideration paid for the acquisition of GEDI net of cash and cash equivalents acquired

—

(175)

Consideration paid for the acquisition of Full More Group net of cash and cash equivalents

acquired

—

(76)

Proceeds from disposal of investments, tangible, intangible and financial assets

165

267

Net change in financial receivables

(945)

490

Net change in securities

(104)

Net cash proceeds from disposal of discontinued operations

—

Other changes

130

—

Cash flows used in investing activities – discontinued operations

(1,533)

(8,535)

Total

(7,058)

(10,102)

Cash flows used in financing activities:

Issuance of notes

1,355

3,085

Repayment of notes

(2,258)

(725)

Proceeds of other long-term debt

729

2,173

Repayment of other long-term debt

(562)

(1,778)

Net change in short-term debt and other financial assets/liabilities

(615)

(1,174)

Capital increases by subsidiaries

138

Exercise of stock options

—

Buyback of treasury shares

—

(28)

Dividends paid

(455)

(268)

Other changes

(281)

(208)

Cash flows used in financing activities – discontinued operations

(251)

9,517

Total

(2,188)

10,626

Translation exchange differences

502

(1,949)

Total Change in Cash and Cash Equivalents

(4,567)

12,636

Cash and cash equivalents at beginning of the period

35,561

22,935

Cash and cash equivalents at the beginning of the period included in Assets held for sale

Deconsolidation of FCA Group

(22,532)

—

Cash and cash equivalents at the end of the period included in Assets held for sale

(584)

(27)

Cash and cash equivalents at the end of the period

7,905

35,561

1.The 2020 data have been re-presented following the classification of FCA and PartnerRe as Discontinued Operations for the year ended 31 December 2021,

as requested by the IFRS 5 – Non current Assets Held for Sale and Discontinued Operations.

2.In 2021 mainly related to the share in the profit (loss) of the investments accounted by the equity method. In 2020 mainly referred to the impairment losses

recognized in the income statement on goodwill, development expenditure previously capitalized, property, plant and equipment and inventories.

(The accompanying notes are an integral part of these consolidated financial statements)

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

153

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(€ million)

Capital

Treasury

Stock

Reserve

Other

reserves

Cash

flow

hedge

reserve

Currency

translation

differences

Financial

assets

measured

FVTOCI

Remeasure

-ment of

defined

benefit

plans

Cumulative

share of OCI

of equity

method

investments

Total

Owners

of the

parent

Non-

controlling

interests

Total

At 1 January 2020

(269)

15,553

313

(43)

(258)

(280)

15,025

27,534

42,559

Share-based compensation

—

115

Buyback of treasury shares

—

(29)

—

(29)

—

(29)

Capital increase by subsidiaries

—

Dividends declared

—

(100)

—

(100)

(168)

(268)

Total comprehensive income

—

(30)

(1,569)

(39)

(111)

(1,727)

(2,709)

(4,436)

Effect of the change in the

percentage ownership of

companies1

—

(39)

—

(3)

(1)

—

(42)

—

Other changes

—

(73)

—

(73)

(213)

(286)

At 31 December 2020

(298)

15,347

(1,259)

(24)

(298)

(391)

13,090

24,570

37,660

1.Of which -€5 million relates to the CNH Industrial Group, +€1 million relates to the Ferrari Group and -€37 million relates to the FCA Group, -€5 million relates

to GEDI Group and +€4 million relates to Exor Seeds.

(€ million)

Capital

Treasury

Stock

Reserve

Other

reserves

Cash

flow

hedge

reserve

Currency

translation

differences

Financial

assets

measured

FVTOCI

Remeasure

-ment of

defined

benefit

plans

Cumulative

share of OCI

of equity

method

investments

Total

Owners

of the

parent

Non-

controlling

interests

Total

At 1 January 2021

(298)

15,347

(1,259)

(24)

(298)

(391)

13,090

24,570

37,660

Share-based compensation

—

145

Buyback of treasury shares

—

Capital increase

—

(5)

—

182

Dividends

—

(100)

—

(100)

(2,387)

(2,487)

Total comprehensive income

—

1,717

1,143

106

753

3,811

3,731

7,542

Loss of control of FCA Group and

recognition of Stellantis

—

124

(124)

—

(18,044)

Effect of the change in the

percentage ownership of

companies1

—

(17)

—

(17)

(5)

(22)

Other changes

—

(114)

—

(97)

(509)

(606)

At 31 December 2021

(298)

16,900

(116)

(68)

255

16,759

7,611

24,370

(1)Of which -€24 million relates to the Welltec Group, +€2 million relates to the Ferrari Group and +€7 million relates to Exor Seeds, -€2 million related to CNH

Industrial.

(The accompanying notes are an integral part of these consolidated financial statements)

154

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.General information on the activities of the Group

EXOR N.V. (“Exor N.V.” or "Exor" or the “Company” and together with its subsidiaries the “Exor Group” or the

“Group”), was incorporated as a public limited company (naamloze vennootschap) under the laws of the

Netherlands on 30 September 2015 and in 2016 became the holding company for the Exor Group following the

cross-border merger with EXOR S.p.A. (the “Merger”).

Exor is one of Europe’s largest diversified holding companies and is controlled by Giovanni Agnelli B.V. (Giovanni

Agnelli) which holds approximately 52% of its share capital.

Exor and its subsidiaries operate through CNH Industrial N.V. and its subsidiaries (“CNH Industrial” or the “CNH

Industrial Group”) in agricultural equipment, construction equipment and commercial vehicles, PartnerRe Ltd and

its subsidiaries (“PartnerRe” or the “PartnerRe Group”) in the reinsurance sector, Ferrari N.V. and its subsidiaries

(“Ferrari” or the “Ferrari Group”) in luxury performance sports car, GEDI Gruppo Editoriale S.p.A. and its

subsidiaries ("GEDI" or the "GEDI Group") in the media sector and Juventus Football Club S.p.A. and its

subsidiaries (“Juventus” or "Juventus Group") in the professional football sector.

2.Basis of preparation and significant accounting policies

Authorization of consolidated financial statements and compliance with International Financial Reporting

Standards

These consolidated financial statements, together with the notes thereto, at and for the year ended

31 December 2021 (the “Consolidated Financial Statements”) were authorised for issuance on 24 March 2022 and

have been prepared in accordance with the International Financial Reporting Standards (“IFRS”) issued by the

International Accounting Standards Board (“IASB”) and as adopted by European Union (“EU-IFRS”) and Part 9 of

Book 2 of the Dutch Civil Code. The designation “IFRS” also includes International Accounting Standards (“IAS”) as

well as all interpretations of the IFRS Interpretations Committee (“IFRIC”).

Basis of preparation

The Consolidated Financial Statements are prepared under the historical cost convention, except where the use of

fair value is required for the measurement of certain financial assets and derivatives, as well as on the going

concern assumption. In this respect the Group's assessment is that no material uncertainties (as defined in IAS 1 –

Presentation of Financial Statements) exist about its ability to continue as a going concern. Despite operating in a

continuously difficult economic and financial environment, negatively impacted by the continuing spread of the

COVID-19 pandemic, the Group’s assessment is that no material uncertainties (as defined in paragraph 25 of IAS

1) exist about its ability to continue as a going concern, in view also of the measures already undertaken by Exor's

subsidiaries to preserve cash and contain costs, and to preserve the Group's industrial and financial flexibility, and

its strong liquidity position.

All significant assumptions and estimates underlying the preparation of the following items were subject to an

analysis in order to identify and address the new uncertainties related to climate changes which could affect the

business: going concern, inventory management, property, plant and equipment, goodwill, brands, intangible

assets with a finite life, tax reliefs, revenue recognition, provisions and onerous contracts.

The Group’s presentation currency is the Euro, which is also the functional currency of the Company and, unless

otherwise stated, information is presented in millions of Euro.

The Group presents the income statement using a classification based on the function of expenses, rather than a

presentation based on the nature of expenses, as it is more representative of the format used for internal reporting

and management purposes and consistent with international practice.

The statement of financial position is presented in decreasing order of liquidity as permitted by IAS 1 paragraph 60.

More specifically, the consolidated financial statements include both industrial companies and financial services

companies. While a separate classification of current and non-current in the statement of financial position provides

useful information for industrial business, for the entities that have diverse operations and for which financial

services activities are significant, a presentation of assets and liabilities in increasing or decreasing order of liquidity

provides information that is reliable and more relevant.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

155

New standards and amendments effective from 1 January 2021

The following amendments and interpretations, which were effective from 1 January 2021, were adopted by the

Group. The adoption of these amendments had no material impact on the Consolidated Financial Statements.

Interest Rate Benchmark Reform – Phase 2

There was no effect from the adoption of a package of amendments to IFRS 9 – Financial Instruments, IAS 39 –

Financial Instruments: Recognition and Measurement, IFRS 7 – Financial Instruments: Disclosures, IFRS 4 –

Insurance Contracts and IFRS 16 – Leases in response to the reform of inter-bank offered rates (IBOR) and other

interest rate benchmarks. The amendments aimed at helping companies to provide investors with useful

information about the effects of the reform on those companies’ financial statements. These amendments focus on

the effects on financial statements when a company replaces the old interest rate benchmark with an alternative

benchmark rate as a result of the reform.

The new amendments relate to:

•changes to contractual cash flows – a company will not be required to derecognize or adjust the carrying

amount of financial instruments for changes required by the interest rate benchmark reform, but will instead

update the effective interest rate to reflect the change to the alternative benchmark rate;

•hedge accounting – a company does not have to discontinue its hedge accounting solely because it makes

changes required by the interest rate benchmark reform if the hedge meets other hedge accounting criteria;

and

•disclosures – a company is required to disclose information about new risks that arise from the interest rate

benchmark reform and how the company manages the transition to alternative benchmark rates.

There was no effect from the adoption of the amendments to IFRS 4 – Insurance Contracts which deferred the

expiry date of the temporary exemption from applying IFRS 9 to annual periods beginning on or after

1 January 2021.

New standards and amendments effective from 1 April 2021

In March 2021, the IASB extended by one year the applicability of a previous amendment to IFRS 16 issued in

2020 that permits lessees, as a practical expedient, not to assess whether particular rent concessions occurring as

a direct consequence of the COVID-19 pandemic are lease modifications and instead to account for those rent

concessions as if they are not lease modifications, thus giving the possibility to the lessees to recognize the entire

economic benefit of such discounts immediately through profit or loss. There was no significant effect from the

adoption of this amendment.

New standards and amendments not yet effective

The standards, amendments and interpretations issued by the International Accounting Standards Board (“IASB”)

that will have mandatory application in 2022 or subsequent years are listed below. Effective dates refer to those as

issued by the IASB and may differ from those of the EU when the relevant standard is endorsed. The Group will

introduce any new standards, amendments and interpretations once they are endorsed by European Union and as

of their dates.

IFRS 17 – Insurance contracts

In May 2017 the IASB issued IFRS 17 — Insurance Contracts, which establishes principles for the recognition,

measurement, presentation and disclosure of insurance contracts issued as well as guidance relating to

reinsurance contracts held and investment contracts with discretionary participation features issued. In June 2020

the IASB issued amendments to IFRS 17 aimed at helping companies implement IFRS 17 and making it easier for

companies to explain their financial performance. The new standard and amendments are effective on or after

1 January 2023. The Group does not expect any material impact from the adoption of these amendments.

Amendments to IAS 1

In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1),

which affects the requirements in IAS 1 for the presentation of liabilities, including clarifying one of the criteria for

classifying a liability as non-current. The amendments are effective for annual reporting periods beginning on or

after 1 January 2023. The Group does not expect any material impact from the adoption of these amendments.

156

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Amendments to IFRS 3 — Business combinations

In May 2020 the IASB issued amendments to IFRS 3 — Business combinations to update a reference in IFRS 3 to

the Conceptual Framework for Financial Reporting without changing the accounting requirements for business

combinations. These amendments are effective on or after 1 January 2022. The Group does not expect any

material impact from the adoption of these amendments.

Amendments to IAS 16 — Property, Plant and Equipment

In May 2020 the IASB issued amendments to IAS 16 — Property, Plant and Equipment. The amendments prohibit

a company from deducting from the cost of property, plant and equipment amounts received from selling items

produced while the company is preparing the asset for its intended use. Instead, a company should recognize such

sales proceeds and the related cost in the income statement. These amendments are effective on or after

1 January 2022. The Group does not expect any material impact from the adoption of these amendments.

Amendments to IAS 37 — Provisions, Contingent Liabilities and Contingent Assets

In May 2020 the IASB issued amendments to IAS 37 — Provisions, Contingent Liabilities and Contingent Assets,

which specify which costs a company includes when assessing whether a contract will be loss-making. These

amendments are effective on or after 1 January 2022. The Group does not expect any material impact from the

adoption of these amendments.

Annual Improvements to IFRSs 2018 - 2020 Cycle

In May 2020 the IASB issued Annual Improvements to IFRSs 2018 - 2020 Cycle. The improvements have

amended four standards with effective date 1 January 2022: i) IFRS 1 — First-time Adoption of International

Financial Reporting Standards in relation to allowing a subsidiary to measure cumulative translation differences

using amounts reported by its parent, ii) IFRS 9 — Financial Instruments in relation to which fees an entity includes

when applying the ‘10 percent’ test for derecognition of financial liabilities, iii) IAS 41 — Agriculture in relation to the

exclusion of taxation cash flows when measuring the fair value of a biological asset, and iv) IFRS 16 — Leases in

relation to an illustrative example of reimbursement for leasehold improvements. The Group does not expect any

material impact from the adoption of these amendments.

Amendments to IAS 1 — Presentation of Financial Statements and IFRS

In February 2021 the IASB issued amendments to IAS 1 — Presentation of Financial Statements and IFRS

Practice Statement 2: Disclosure of Accounting policies which require companies to disclose their material

accounting policy information rather than their significant accounting policies and provide guidance on how to apply

the concept of materiality to accounting policy disclosures. These amendments are effective on or after

1 January 2023. The Group does not expect any material impact from the adoption of these amendments.

Amendments to IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors: Definition of

Accounting Estimate

In February 2021 the IASB issued amendments to IAS 8 — Accounting Policies, Changes in Accounting Estimates

and Errors: Definition of Accounting Estimates which clarify how companies should distinguish changes in

accounting policies from changes in accounting estimates. These amendments are effective on or after

1 January 2023. The Group does not expect any material impact from the adoption of these amendments.

Amendments to IAS 12 — Income Taxes: Deferred Tax related to Assets and Liabilities Arising From a Single

Transaction

In May 2021 the IASB issued amendments to IAS 12 — Income Taxes: Deferred Tax related to Assets and

Liabilities Arising From a Single Transaction that clarify how companies account for deferred tax on transactions

such as leases and decommissioning obligations. These amendments are effective on or after 1 January 2023. The

Group does not expect any material impact from the adoption of these amendments.

Amendments to IFRS 17 - Insurance contracts

In December 2021 the IASB issued an amendments to IFRS 17 — Insurance Contracts: Initial Application of IFRS

17 and IFRS 9 - Comparative Information, which provides a transition option relating to comparative information

about financial assets presented on initial application of IFRS 17. The amendment is aimed at helping entities to

avoid temporary accounting mismatches between financial assets and insurance contract liabilities, and therefore

improve the usefulness of comparative information for users of financial statements. The amendment is effective on

or after 1 January 2023. The Group does not expect any material impact from the adoption of this amendments.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

157

Basis of consolidation

Subsidiaries

Subsidiaries are entities over which the Group has control. Control is achieved when the Group has power over the

investee, when it is exposed to, or has rights to, variable returns from its involvement with the investee, and has the

ability to use its power over the investee to affect the amount of the investor’s returns.

The Group considers all the facts and circumstances in determining whether it controls an entity when it owns less

than the majority of the voting rights or similar rights of the entity.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are

changes to one or more of the elements of control, as indicated in paragraph 7 of IFRS 10.

Subsidiaries are consolidated on a line-by-line basis from the date on which control is achieved by the Group until

the date that control ceases.

Equity attributable to non-controlling interests and non-controlling interests in the profit (loss) of consolidated

subsidiaries are presented separately from the interests of the owners of the parent in the statement of financial

position and income statement respectively. Losses applicable to non-controlling interests that exceed the

minority’s interests in the subsidiary’s equity are allocated against the non-controlling interests.

Changes in the Group’s ownership interests in a subsidiary that do not result in the Group losing control over the

subsidiary are accounted for as an equity transaction. The carrying amounts of the equity attributable to owners of

the parent and non-controlling interests are adjusted to reflect the changes in their relative interests in the

subsidiary.

Any difference between the carrying amount of the non-controlling interests and the fair value of the consideration

paid or received in the transaction is recognized directly in the equity attributable to the owners of the parent.

Subsidiaries are deconsolidated from the date that control ceases. When the Group ceases to have control over a

subsidiary, it derecognizes the assets (including any goodwill) and liabilities of the subsidiary at their carrying

amounts, derecognizes the carrying amount of non-controlling interests in the former subsidiary and recognizes the

fair value of any consideration received for the transaction.

Any retained interest in the former subsidiary is recognized at fair value. Any gains or losses recognized in other

comprehensive income in respect of the measurement of the assets of the subsidiary are accounted for as if the

subsidiary had been sold (i.e., reclassified to the income statement or transferred directly to retained earnings as

required by other IFRS).

Joint ventures and Associates

Joint ventures are entities in which the Group has contractually agreed sharing of control of an arrangement or

where a contractual arrangement exists where two or more parties undertake an economic activity that is subject to

joint control.

Associates are entities over which the Group has significant influence, as defined in IAS 28 – Investments in

Associates and Joint Ventures. Significant influence is the power to participate in the financial and operating policy

decisions of the investee but without control or joint control over those policies.

Investments in joint ventures and associates are accounted for using the equity method from the date that joint

control or significant influence commences until the date it ceases. When the Group’s share of losses of a joint

venture or associate exceeds the Group’s interest in that joint venture or associate, the Group discontinues

recognizing its share of further losses. Additional losses are provided for, and a liability is recognized, only to the

extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associates.

The Group discontinues the use of the equity method from the date that the investment ceases to be an associate

or a joint venture, or when it is classified as available for sale.

Interests in Joint Operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to

the assets and obligations for the liabilities relating to the arrangement. Joint control is the contractually agreed

sharing of control of an arrangement, which exists only when decisions about the relevant activities require the

unanimous consent of the parties sharing control.

158

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

When the Group undertakes its activities under joint operations, it recognizes its related interest in the joint

operation including: (i) its assets, including its share of any assets held jointly, (ii) its liabilities, including its share of

any liabilities incurred jointly, (iii) its revenue from the sale of its share of the output arising from the joint operation,

(iv) its share of the revenue from the sale of the output by the joint operation and (v) its expenses, including its

share of any expenses incurred jointly.

Transactions eliminated in consolidation

All significant intragroup balances and transactions and any unrealized gains and losses arising from intragroup

transactions are eliminated. Unrealized gains and losses arising from transactions with associates and joint

ventures are eliminated to the extent of the Group’s interest in those entities. Unrealized losses are eliminated

unless the transaction provides evidence of an impairment of the assets transferred.

Foreign currency transactions

The functional currency of the Group’s entities is the currency of their primary economic environment. In individual

companies, transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the

transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate

prevailing at the date of the statement of financial position. Exchange differences arising on the settlement of

monetary items or on reporting monetary items at rates different from those at which they were initially recorded,

are recognized in the income statement.

Consolidation of foreign entities

The principal exchange rates used to translate other currencies into Euro are as follows:

2021

2020

Average

At 31 December

Average

At 31 December

U.S. dollar

1.183

1.133

1.142

1.227

Brazilian real

6.378

6.310

5.894

6.374

Chinese renminbi

7.628

7.195

7.875

8.023

Polish zloty

4.565

4.597

4.443

4.560

Argentinian peso

121.381

116.239

103.043

British pound

0.860

0.840

0.890

0.899

Swiss franc

1.081

1.033

1.071

1.080

Canadian dollar

1.486

1.439

1.530

1.563

Hong Kong dollar

9.193

8.833

8.859

9.514

Danish krone

7.437

7.436

7.454

7.441

Singapore Dollar

1.589

1.528

1.574

1.622

Australian Dollar

1.575

1.562

1.655

1.590

Japanese Yen

129.877

130.380

121.846

126.490

Date of reference

The investments are consolidated using the financial statements at 31 December, Exor’s year-end closing date,

which cover a 12-month period, or accounting data prepared at the same date (whenever the closing date is

different from Exor’s), adjusted, where necessary, to conform with the accounting principles of the Group.

The Economist Group, whose financial year closes on 31 March of each year, has been consolidated using the

equity method on the basis of the most recent data available (30 September 2020). At 31 December 2021 there

were no significant variations to The Economist Group data used for the purposes of these consolidated financial

statements.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

159

Assets Held for Sale and Discontinued Operations

Pursuant to IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, non-current assets and

disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale

transaction rather than through continuing use. This condition is regarded as met only when the asset or disposal

group is available for immediate sale in its present condition subject only to terms that are usual and customary for

sales of such asset or disposal group and the sale is highly probable, with the sale expected to be completed within

one year from the date of classification.

Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying

amount and fair value less costs to sell and are presented separately in the consolidated statement of financial

position. Non-current assets and disposal groups are not classified as held for sale within the consolidated

statement of financial position for the comparative period.

A discontinued operation is a component of the Group that either has been disposed of or is classified as held for

sale and (i) represents either a separate major line of business or a geographical area of operations, (ii) is part of a

single coordinated plan to dispose of a separate major line of business or geographical area of operations, or (iii) is

a subsidiary acquired exclusively with a view to resell and the disposal involves loss of control.

Classification as a discontinued operation occurs upon disposal or when the asset or disposal group meets the

criteria to be classified as held for sale, if earlier. When the asset or disposal group is classified as a discontinued

operation, the comparative information is reclassified within the consolidated income statement as if the asset or

disposal group had been discontinued from the start of the earliest comparative period presented.

Business combinations

Business combinations are accounted for by applying the acquisition method. Under this method:

▪the consideration transferred in a business combination is measured at fair value, which is calculated as the

sum of the acquisition-date fair values of the assets transferred and liabilities assumed by the Group and the

equity interests issued in exchange for control of the acquiree. Acquisition-related costs are generally

recognized in profit or loss as incurred;

▪at the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair

value at that date, except for deferred tax assets and liabilities, assets and liabilities relating to employee

benefit arrangements, liabilities or equity instruments relating to share-based payment arrangements of the

acquiree or share-based payment arrangements of the Group entered into to replace share-based payment

arrangements of the acquiree, assets (or disposal groups) that are classified as held for sale, which are

measured in accordance with the relevant standard;

▪goodwill is measured as the excess of the aggregate of the consideration transferred in the business

combination, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's

previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the

identifiable assets acquired and the liabilities assumed. If the net of the acquisition-date amounts of the

identifiable assets acquired and liabilities assumed exceeds the aggregate of the consideration transferred, the

amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held

interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a gain from a bargain

purchase;

▪non-controlling interest is initially measured either at fair value or at the non-controlling interest’s proportionate

share of the acquiree's identifiable net assets. The selection of the measurement method is made on a

transaction-by-transaction basis;

▪any contingent consideration arrangement in the business combination is measured at its acquisition-date fair

value and included as part of the consideration transferred in the business combination in order to determine

goodwill. Changes in the fair value of the contingent consideration that qualify as measurement period

adjustments are recognized retrospectively, with corresponding adjustments to goodwill. Measurement period

adjustments are adjustments that arise from additional information obtained during the ‘measurement

period’ (which may not exceed one year from the acquisition date) about facts and circumstances that existed

as of the acquisition date. Any changes in fair value after the measurement period are recognized in profit or

loss.

160

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is

remeasured at its acquisition-date fair value and any resulting gain or loss is recognized in the income statement

under Result from investments. Changes in the equity interest in the acquiree that have been recognized in other

comprehensive income in prior reporting periods are reclassified to the income statement as if the equity interest

had been disposed of.

Fair value measurement

Some of the Group’s assets and liabilities are measured at fair value at the balance sheet date. Fair value is the

price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date.

In estimating the fair value of an asset or a liability, the Group uses valuation techniques that are appropriate in the

circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant

observable inputs and minimizing the use of unobservable inputs. Additional information about fair value, fair value

hierarchy, valuation techniques and inputs used in determining the fair value of assets and liabilities is provided in

Note 16, Note 31 and, where required, in the individual notes relating to the assets and liabilities whose fair values

were determined.

In addition, fair value measurements are categorized within the fair value hierarchy, described as follows, based on

the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to

the fair value measurement in its entirety:

▪Level 1:quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access

at the measurement dated;

▪level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,

either directly (as prices) or indirectly (derived from prices) on the market;

▪level 3: inputs that are not based on observable market data.

Intangible assets

Goodwill

Goodwill represents the excess of the fair value of consideration paid over the fair value of net tangible and

identifiable intangible assets acquired in a business combination. Goodwill is not amortized but is tested for

impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Intangible assets with indefinite useful lives

Intangible assets with indefinite useful lives consist principally of brands which have no legal, contractual,

competitive, economic, or other factors that limit their useful lives. Intangible assets with indefinite useful lives are

not amortized but are tested for impairment annually or more frequently if events or circumstances indicate that the

asset may be impaired.

Intangible assets with a finite useful life

Intangible assets with a finite useful life are recognized at purchase or production cost less amortization and

cumulative impairment losses. Amortization is calculated on a systematic basis over the asset’s useful life and

begins when the asset is available for use.

The main intangible assets with a finite useful life are as follows:

Development costs

Development costs for vehicle production projects (trucks, buses, agricultural and construction equipment and

engines) are recognized as an asset if and only if both of the following conditions are met: a) development costs

can be measured reliably, and b) the technical feasibility of the product, volumes and pricing support the view that

the development expenditure will generate future economic benefits. Capitalized development costs include all

direct and indirect costs that may be directly attributed to the development process. Capitalized development costs

are amortized on a systematic basis from the start of production of the related product over the product’s estimated

average life, as follows:

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

161

Trucks and buses

Agricultural and

Construction Equipment

Engines

Number of years

4-8

8-10

All other development costs which do not meet the above criteria are expensed as incurred.

Players’ registration rights

Players’ registration rights are recognized at cost, including auxiliary expenses, and discounted to present value.

They are amortized on a straight-line basis over the duration of the contracts the company has signed with the

individual football players.

Other intangible assets

Other intangible assets with a finite useful life are recognized in accordance with IAS 38 – Intangible Assets when it

is probable that the use of the asset will generate future economic benefits for the Group and the cost of the asset

can be measured reliably. Other intangible assets are recorded at purchase or production cost and amortized on a

straight-line basis over their estimated useful lives. Other intangible assets recognized subsequent to the

acquisition of a company are recorded separately from goodwill if their fair value can be measured reliably.

Property, plant and equipment

Cost

Property, plant and equipment is initially recognized at cost which comprises the purchase price, any costs directly

attributable to bringing the assets to the location and condition necessary to be capable of operating in the manner

intended by management and any initial estimate of the costs of dismantling and removing the item and restoring

the site on which it is located. Self-constructed assets are initially recognized at production cost. Subsequent

expenditures and the cost of replacing parts of an asset are capitalized only if they increase the future economic

benefits embodied in that asset. All other expenditures are expensed as incurred. When such replacement costs

are capitalized, the carrying amount of the parts that are replaced is recognized in the income statement.

Borrowing costs that are directly attributable to the acquisition, construction or production of property, plant or

equipment or an intangible asset that is deemed to be a qualifying asset are capitalized. All other borrowing costs

are expensed when incurred.

Depreciation

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings

Plant, machinery and

equipment

Other assets

Depreciation rate

2.5% - 10%

3% - 33%

Impairment of assets

Goodwill and intangible assets with indefinite useful lives are tested for impairment annually or more frequently, if

there is an indication that an asset may be impaired. Assets with finite useful lives are tested for impairment only if

impairment indicators are present. At the end of each reporting period the Group assesses whether there is any

indication that its finite-lived intangible assets (including capitalized development expenditures) and its property,

plant and equipment may be impaired.

If indications of impairment are present, the carrying amount of the asset is reduced to its recoverable amount, that

is, the higher of fair value less costs of disposal and its value in use. Where it is not possible to estimate the

recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit

to which the asset belongs. In assessing the value in use of an asset, the estimated future cash flows are

discounted to their present value using a discount rate that reflects the current market assessments of the time

value of money and the risks specific to the asset. An impairment loss is recognized if the recoverable amount is

lower than the carrying amount.

162

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Where an impairment loss for assets, other than goodwill, subsequently no longer exists or has decreased, the

carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount,

but not in excess of the carrying amount that would have been recorded had no impairment loss been recognized.

The reversal of an impairment loss is recognized in the income statement immediately.

Financial assets and liabilities

Financial assets primarily include trade receivables, receivables from financing activities, investments in other

companies, derivative financial instruments, cash and cash equivalents and debt securities that represent

temporary investments of available funds and do not satisfy the requirements for being classified as cash

equivalents.

Financial liabilities primarily consist of debt, derivative financial instruments, trade payables and other liabilities.

Receivables from dealer financing activities are typically generated by sales of vehicles and are generally managed

under dealer network financing programs. These receivables are interest-bearing with the exception of an initial,

limited, non-interest-bearing period. The contractual terms governing the relationships with the dealer networks

vary according to market and payment terms, which range from two to twelve months.

Classification and measurement

The classification of a financial asset is dependent on the Group’s business model for managing such financial

assets and their contractual cash flows. The Group considers whether the contractual cash flows represent solely

payments of principal and interest that are consistent with a basic lending arrangement. Where the contractual

terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related

financial assets are classified and measured at fair value through profit or loss (“FVTPL”).

Financial asset cash flow business model

Initial measurement(1)

Measurement category(3)

Solely to collect the contractual cash flows represented by

principal and interest (Held to Collect)

Fair Value including

transaction costs

Amortized Cost(2)

Collect both the contractual cash flows and generate cash flows

arising from the sale of assets (Held to Collect and Sell)

Fair Value including

transaction costs

Fair value through other

comprehensive income

(“FVTOCI”)

Generate cash flows primarily from the sale of assets (Held to

Sell)

Fair Value

Fair value through profit and

loss (“FVTPL”)

(1)A trade receivable without a significant financing component, as defined by IFRS 15, is initially measured at the transaction price.

(2)Receivables with maturities of over one year, which bear no interest or have an interest rate significantly lower than market rates are discounted using market

rates.

(3)On initial recognition, the Group may irrevocably designate a financial asset at FVTPL that otherwise meets the requirements to be measured at amortized cost

or at FVTOCI if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Factors considered by the Group in determining the business model for a group of financial assets include:

•past experience on how the cash flows for these assets were collected;

•the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and

future sales activity expectations;

•how the asset’s performance is evaluated and reported to key management personnel; and

•how risks are assessed and managed and how management is compensated.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business

model for managing financial assets, in which case all affected financial assets are reclassified on the first day of

the first reporting period following the change in the business model.

Cash and cash equivalents include cash at banks, units in money market funds and other money market securities,

commercial paper and Certificates of deposits that are readily convertible into cash, with original maturities of three

months or less at the date of purchase. Cash and cash equivalents are subject to an insignificant risk of changes in

value and consist of balances across various primary national and international money market instruments. Money

market funds consist of investments in high quality, short-term, diversified financial instruments that can generally

be liquidated on demand and are measured at FVTPL. Cash at banks and other cash equivalents are measured at

amortized cost.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

163

Investments in other companies are measured at fair value. The Group may irrevocably elect to present

subsequent changes in the investment’s fair value in Other comprehensive income (“OCI”) upon the initial

recognition of an equity investment that is not held to sell. This election is made on an investment-by-investment

basis. Generally, any dividends from these investments are recognized in Other income from investments within

Result from investments when the Group’s right to receive payment is established. Other net gains and losses are

recognized in OCI and will not be reclassified to the consolidated income statement in subsequent periods.

Impairment losses (and the reversal of impairment losses) on equity investments measured at FVTOCI are not

reported separately from other changes in fair value in OCI.

Impairment of financial assets

The IFRS 9 impairment requirements are based on a forward-looking expected credit loss (“ECL”) model. ECL is a

probability-weighted estimate of the present value of cash shortfalls.

These estimates were assessed on an individual basis, taking into account the ageing of customers’ balances,

specific credit circumstances and historical experience, and on a collective basis, using loss forecast models that

considered a variety of factors that include, but are not limited to, historical loss experience, collateral value,

portfolio balance and delinquency.

In accordance with IFRS 9, the simplified approach, which requires recognition of expected lifetime losses, was

applied to trade receivables. For receivables from financing activities the Group applied the general approach

recording the credit losses either on a 12-month or lifetime basis.

The simplified approach for determining the lifetime ECL allowance is performed in two steps:

•All trade receivables that are in default, as defined below, are individually assessed for impairment; and

•A general reserve is recognized for all other trade receivables (including those not past due) based on historical

loss rates.

The Group considers a financial asset to be in default when: (i) the borrower is unlikely to pay its obligations in full

and without consideration of compensating guarantees or collateral (if any exist); or (ii) the financial asset is more

than 90 days past due.

The Group applies the general approach as determined by IFRS 9 by assessing at each reporting date whether

there has been a significant increase in credit risk on the financial instrument since initial recognition. The Group

considers receivables to have experienced a significant increase in credit risk when certain quantitative or

qualitative indicators have been met or the borrower is more than 30 days past due on its contractual payments.

The “three-stages” for determining and measuring the impairment based on changes in credit quality since initial

recognition are summarized below:

Stage

Description

Time period for

measurement of

ECL

Stage 1

A financial instrument that is not credit impaired on initial recognition

12-month ECL

Stage 2

A financial instrument with a significant increase in credit risk since initial recognition

Lifetime ECL

Stage 3

A financial instrument that is credit-impaired or has defaulted

Lifetime ECL

Considering forward-looking economic information, ECL is determined by projecting the probability of default,

exposure at default and loss given default for each future contractual period and for each individual exposure or

collective portfolio.

The discount rate used in the ECL calculation is the stated effective interest rate or an approximation thereof. Each

reporting period, the assumptions underlying the ECL calculation are reviewed and updated as necessary. Since

adoption, there have been no significant changes in estimation techniques or in significant assumptions that led to

material changes in the ECL allowance.

The gross carrying amount of a financial asset is written-off to the extent that there is no realistic prospect of

recovery. This is generally the case when the Group determines that a debtor does not have assets or sources of

income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial

assets that are written off could still be subject to enforcement activities.

164

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Hedge accounting

Derivative financial instruments are used for economic hedging purposes, in order to reduce currency, interest rate

and market price risks (primarily related to commodities and securities).

The fair value of other financial assets and liabilities, which mainly include derivative financial instruments, is

measured by taking into consideration market parameters at the balance sheet date and using valuation

techniques widely accepted in the financial environment.

In particular:

•the fair value of forward contracts and currency swaps is determined by taking the prevailing exchange rates

and interest rates at the balance sheet date;

•the fair value of interest rate swaps and forward rate agreements is determined by taking the prevailing interest

rates at the balance sheet date and using the discounted expected cash flow method;

•the fair value of combined interest rate and currency swaps is determined using the exchange rates and

interest rates prevailing at the balance sheet date and the discounted expected cash flow method;

•the fair value of swaps and options hedging commodity price risk is determined by using suitable valuation

techniques and taking market parameters at the balance sheet date (in particular, underlying prices, interest

rates and volatility rates).

IFRS 9 aims to simplify hedge accounting and to reflect the effect of an entity’s risk management activities in the

financial statements, allowing more hedging instruments and hedged items to qualify for hedge accounting.

Fair value hedges

Where a derivative financial instrument is designated as a hedge of the exposure to changes in fair value of a

recognized asset or liability attributable to a particular risk that could affect the Consolidated Income Statement, the

gain or loss from remeasuring the hedging instrument at fair value is recognized in the Consolidated Income

Statement. The gain or loss on the hedged item attributable to the hedged risk adjusts the carrying amount of the

hedged item and is recognized in the Consolidated Income Statement.

Cash flow hedges

Where a derivative financial instrument is designated as a hedge of the exposure to variability in future cash flows

of a recognized asset or liability or a highly probable forecasted transaction and could affect the Consolidated

Income Statement, the effective portion of any gain or loss on the derivative financial instrument is recognized

directly in Other comprehensive income/(loss). When the hedged forecasted transaction results in the recognition

of a non-financial asset, the gains and losses previously deferred in Other comprehensive income/(loss) are

reclassified and included in the initial measurement of the cost of the non-financial asset. The effective portion of

any gain or loss is recognized in the Consolidated Income Statement at the same time as the economic effect

arising from the hedged item that affects the Consolidated Income Statement. The gain or loss associated with a

hedge or part of a hedge that has become ineffective is recognized in the Consolidated Income Statement

immediately.

When a hedging instrument or hedge relationship is terminated but the hedged transaction is still expected to

occur, the cumulative gain or loss realized to the point of termination remains and is recognized in the Consolidated

Income Statement at the same time as the underlying transaction occurs. If the hedged transaction is no longer

probable, the cumulative unrealized gain or loss held in Other comprehensive income/(loss) is recognized in the

Consolidated Income Statement immediately.

Hedges of a net investment

If a derivative financial instrument is designated as a hedging instrument for a net investment in a foreign operation,

the effective portion of the gain or loss on the derivative financial instrument is recognized in Other comprehensive

income/(loss). The cumulative gain or loss is reclassified from Other comprehensive income/(loss) to the

Consolidated Income Statement upon disposal of the foreign operation.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

165

Hedge effectiveness is determined at the inception of the hedge relationship and through periodic prospective

effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging

instrument. The Group enters into hedge relationships where the critical terms of the hedging instrument match

closely or exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed.

If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match closely

or perfectly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative method to

assess effectiveness.

Ineffectiveness is measured by comparing the cumulative changes in fair value of the hedging instrument and

cumulative change in fair value of the hedged item arising from the designated risk. The primary potential sources

of hedge ineffectiveness are mismatches in timing or the critical terms of the hedged item and the hedging

instrument.

The hedge ratio is the relationship between the quantity of the derivative and the hedged item. The Group’s

derivatives have the same underlying quantity as the hedged items, therefore the hedge ratio is expected to be one

for one.

If hedge accounting cannot be applied, the gains or losses from the fair value measurement of derivative financial

instruments are recognized immediately in the Consolidated Income Statement.

Transfers of financial assets

The Group derecognizes financial assets when the contractual rights to the cash flows arising from the asset are

no longer held or if it transfers substantially all the risks and rewards of ownership of the financial asset. On

derecognition of financial assets, the difference between the carrying amount of the asset and the consideration

received or receivable for the transfer of the asset is recognized in the Consolidated Income Statement.

The Group transfers certain of its financial, trade and tax receivables, mainly through factoring transactions.

Factoring transactions may be either with recourse or without recourse. Certain transfers include deferred payment

clauses requiring first loss cover (for example, when the payment by the factor of a minor part of the purchase price

is dependent on the total amount collected from the receivables), whereby the transferor has priority participation in

the losses, or requires a significant exposure to the variability of cash flows arising from the transferred receivables

to be retained. These types of transactions do not meet the requirements of IFRS 9 for the derecognition of the

assets since the risks and rewards connected with ownership of the financial asset are not substantially

transferred, and accordingly the Group continues to recognize these receivables within the Consolidated Statement

of Financial Position and recognizes a financial liability for the same amount under Asset-backed financing, which

is included within Financial Debt. These types of receivables are classified as held-to-collect, since the business

model is consistent with the Group’s continuing recognition of the receivables.

The fair value of financial instruments is measured in accordance with a fair value hierarchy that prioritizes the

information used to measure fair value into three broad levels. Transfers between the hierarchy levels are

recognized at the beginning of the period.

Investments at fair value of Reinsurance companies

Investments at fair value of reinsurance companies represent investments held by PartnerRe and include fixed

income securities, short term investments, equities, accrued interest, non-foreign exchange derivatives, other

invested assets and funds held by reinsurance companies. PartnerRe classifies the majority of its reinsurance

investments as financial assets at fair value through profit or loss (FVTPL). Upon initial recognition these

investments are designated as FVTPL because they are managed and their performance is evaluated on a fair

value basis. Derivative assets and liabilities are classified as held for trading.

Certain investments are classified as available-for-sale financial assets and are measured at fair value. When

market prices are not available, the fair value of available-for-sale financial assets is measured using appropriate

valuation techniques (e.g., discounted cash flow analysis based on market information available at the balance

sheet date).

166

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Gains and losses on available-for-sale financial assets are recognized directly in other comprehensive income until

the financial asset is disposed of or impaired; when the asset is disposed of, the cumulative gains or losses,

including those previously recognized in other comprehensive income, are reclassified to the income statement for

the period in financial income and expenses; when the asset is impaired, accumulated losses are recognized in the

income statement. Assessments are made regularly as to whether there is any objective evidence that a financial

asset or group of assets may be impaired. If any such evidence exists, any impairment loss is included in the

income statement for the period. Certain other funds held by reinsurance companies are classified as loans and

receivables and are measured at amortized cost.

Gains and losses arising from the changes in the fair value of reinsurance investments classified as FVTPL or held

for trading are included in the Consolidated Income Statement in the period in which they arise. Net investment

income for the reinsurance investments includes interest and dividend income, amortization of premiums and

discounts on fixed maturities and short-term investments and investment income on funds held by reinsurance

companies, and is net of investment expenses and withholding taxes. Investment income is recognized when

earned. Realized gains and losses on the disposal of investments are determined on a first-in, first-out basis.

Investment purchases and sales are recorded on a trade-date basis.

Inventories

Inventories of raw materials, semi-finished products and finished goods (including assets sold with a buy-back

commitment) are stated at the lower of cost and net realizable value, cost being determined on a first-in-first-out

(FIFO) basis. The measurement of inventories includes the direct costs of materials, labour and indirect costs

(variable and fixed). A provision is made for obsolete and slow-moving raw materials, finished goods, spare parts

and other supplies based on their expected future use and realizable value. Net realizable value is the estimated

selling price in the ordinary course of business less the estimated costs of completion and the estimated costs for

sale and distribution.

Employee benefits

Defined contribution plans

Costs arising from defined contribution plans are expensed as incurred.

Defined benefit plans

The Group’s net obligations are determined separately for each plan by estimating the present value of future

benefits that employees have earned in the current and prior periods and deducting the fair value of any plan

assets. The present value of the defined benefit obligation is measured using actuarial techniques and actuarial

assumptions that are unbiased and mutually compatible and attribute benefits to periods in which the obligation to

provide post-employment benefits arise by using the Projected Unit Credit Method. Plan assets are recognized and

measured at fair value.

When the net obligation is a potential asset, the recognized amount is limited to the present value of any economic

benefits available in the form of future refunds or reductions in future contributions to the plan (asset ceiling).

The components of the defined benefit cost are recognized as follows:

•the service costs are recognized in the income statement by function and presented in the relevant line items

(cost of sales, selling, general and administrative costs, research and development costs, etc.);

•the net interest on the defined benefit liability or asset is recognized in the income statement as financial

income (expenses), and is determined by multiplying the net liability (asset) by the discount rate used to

discount obligations taking into account the effect of contributions and benefit payments made during the year;

•the remeasurement components of the net obligations, which comprise actuarial gains and losses, the return

on plan assets (excluding interest income recognized in the income statement) and any change in the effect of

the asset ceiling are recognized immediately in Other comprehensive income. These remeasurement

components are not reclassified in the Consolidated Income Statement in a subsequent period.

Past service costs arising from plan amendments and curtailments are recognized immediately in the income

statement.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

167

Other long-term employee benefits

The Group’s obligations represent the present value of future benefits that employees have earned in return for

their service during the current and prior periods. Remeasurement components on other long-term employee

benefits are recognized in the Consolidated Income Statement in the period in which they arise.

Termination benefits

Termination benefits are expensed at the earlier of i) when the Group can no longer withdraw the offer of those

benefits and ii) when the Group recognizes costs for a restructuring.

Post-employment plans other than pensions

The Group provides certain post-employment defined benefits, mainly healthcare plans. The method of accounting

and the frequency of valuations are similar to those used for defined benefit pension plans.

Share-based compensation

Share-based compensation plans that are be settled by the delivery of shares are measured at fair value at the

grant date. This fair value is expensed over the vesting period of the plan with a corresponding increase in equity.

Share-based compensation plans that are be settled in cash or by the delivery of other financial assets are

recognized as a liability and measured at fair value at the end of each reporting period and when settled. Any

subsequent changes in fair value are recognized in the income statement.

Provisions

Provisions are recognized when the Group has a present obligation, legal or constructive, as a result of a past

event, it is probable that an outflow of resources embodying economic benefits will be required to settle the

obligation and a reliable estimate of the amount of the obligation can be made.

Changes in estimates of provisions are reflected in the Consolidated Income Statement in the period in which the

change occurs.

Technical reinsurance reserves

Non-life and health technical reinsurance reserves include amounts determined from loss reports on individual

treaties (case reserves), additional case reserves when PartnerRe’s loss estimate is higher than reported by the

cedants (ACRs) and amounts for losses incurred but not yet reported to PartnerRe (IBNR). Such reserves are

estimated by Management based upon reports received from ceding companies, supplemented by PartnerRe’s

own actuarial estimates of reserves for which ceding company reports have not been received, and based on

PartnerRe’s own historical experience. To the extent that PartnerRe’s own historical experience is inadequate for

estimating reserves, such estimates may be determined based upon industry experience and Management’s

judgment. The estimates are continually reviewed and the ultimate liability may be in excess of, or less than, the

amounts provided. Any adjustments are reflected in the periods in which they are determined, which may affect

PartnerRe’s operating results in future periods.

Technical reinsurance reserves for life policies have been established based upon information reported by ceding

companies, supplemented by PartnerRe’s actuarial estimates of mortality, critical illness, persistency and future

investment income, with appropriate provision to reflect uncertainty.

PartnerRe purchases retrocessional contracts to reduce its exposure to risk of losses on reinsurance assumed.

Reinsurance recoverable on paid and unpaid losses involves actuarial estimates consistent with those used to

establish the associated technical reinsurance reserves.

Reinsurance acquisition costs

Reinsurance acquisition costs for non-life and health contracts comprised of incremental brokerage fees,

commissions and excise taxes which vary directly with, and are related to, the acquisition of reinsurance contracts,

are capitalized and charged to expense as the related premium is earned. All other acquisition related costs,

including all indirect costs, are expensed as incurred.

Acquisition costs related to life contracts are deferred and amortized over the premium-paying periods in proportion

to anticipated premium income, allowing for lapses, terminations and anticipated investment income.

168

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Actual and anticipated losses and loss expenses, other costs and investment income related to underlying

premiums are considered in determining the recoverability of deferred acquisition costs related to PartnerRe’s Non-

life business. Actual and anticipated loss experience, together with the present value of future gross premiums, the

present value of future benefits, settlement and maintenance costs are considered in determining the recoverability

of deferred acquisition costs related to PartnerRe’s Life business.

Treasury stock

The cost of any treasury stock purchased and/or held, also through subsidiaries, as a result of specific shareholder

resolutions, is recognized as a deduction from equity. The proceeds from any subsequent sale are recognized in

equity.

Revenue recognition

Revenue is recognized when control of the vehicles, equipment, services or parts has been transferred and the

Group’s performance obligations to its customers have been satisfied. Revenue is measured as the amount of

consideration the Group expects to receive in exchange for transferring goods or providing services.

The timing of when the Group transfers the goods or services to the customer may differ from the timing of the

customer’s payment.

Revenues are stated net of discounts, allowances, settlement discounts and rebates, as well as costs for sales

incentive programs, which are determined on the basis of historical costs, country by country, and charged against

profit for the period in which the corresponding sales are recognized.

The Group also enters into contracts with multiple performance obligations. For these contracts, the Group

allocates revenue from the transaction price to the distinct goods and services in the contract on a relative

standalone selling price basis. To the extent that the Group sells the good or service separately in the same market,

the standalone selling price is the observable price at which the Group sells the good or service separately. For all

other goods or services, the Group estimates the standalone selling price using a cost-plus-margin approach.

Sales of goods

The Group has determined that the customers from the sale of vehicles, equipment and parts are generally

dealers, distributors and retail customers.

Transfer of control, and thus related revenue recognition, generally corresponds to when the vehicles, equipment

and parts are made available to the customer. Therefore, the Group recognizes revenue at a point in time, when

control is transferred to the customer at a sale price that the Group expects to receive.

For all sales, no significant uncertainty exists surrounding the purchaser’s obligation to pay for vehicles, equipment

and parts. The Group records appropriate allowance for credit losses and anticipated returns as required. Fixed

payment schedules exist for all sales, but payment terms vary by geographic market and product line.

The cost of incentives, if any, is estimated at the inception of a contract at the expected amount that will ultimately

be paid and is recognized as a reduction to revenue at the time of the sale. If a vehicle or equipment contract

transaction has multiple performance obligations, the cost of incentives is allocated entirely to the vehicle or

equipment as the intent of the incentives is to encourage sales of vehicles or equipment. If the estimate of the

incentive changes following the sale to the customer, the change in estimate is recognized as an adjustment to

revenue in the period of the change. The Group grants certain sales incentives to support sales of its products to

retail customers. At the later of the time of sale or the time an incentive is announced to dealers, the Group records

the estimated impact of sales allowances in the form of dealer and customer incentives as a reduction of revenue.

Subsequent adjustments to sales incentive programs related to products/vehicles previously sold are recognized

as an adjustment to revenues in the period the adjustment is determinable.

The determination of sales allowances requires management to make estimates based upon historical data,

estimated future market demand for products, field inventory levels, announced incentive programs, competitive

pricing and interest rates, among other things.

With reference to the sales to dealers accompanied by “floor plan” agreements under which the Group offers

wholesale financing including “interest-free” financing for a specified period of time (which also varies by

geographic market and product line), two separate performance obligations exist. The first performance obligation

consists of the sale of the equipment/vehicle to the dealer.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

169

The interest-free financing represents a cash sale incentive recognized as a reduction of net sales. The second

performance obligation consists of a credit facility extended to the dealer. The remuneration of this performance

obligation is represented by the interest charged to the dealer. This remuneration is recognized over the period of

the outstanding exposure.

For parts sales, when the Group provides its customers with a right to return a transferred product, revenue and

corresponding cost of sales are recognized for parts that are not expected to be returned. The expected returns are

estimated based on an analysis of historical experience. The portion of revenue (and corresponding cost of sales)

related to the parts that are expected to be returned is recognized at the end of the return period. The amount

received or receivable that is expected to be returned is recognized as a refund liability, representing the obligation

to return the customer’s consideration. Furthermore, at the time of the initial sale, the Group recognizes a return

asset for the right to recover the goods returned by the customer. This asset is initially measured at the former

carrying amount of the inventory. At each reporting date, both the refund liability and the return asset are re-

measured to record for any revisions to the expected level of returns, as well as any decreases in the value of the

returned products.

Rendering of services

Revenues from services provided are primarily comprised of extended warranties and maintenance and repair

services and are recognized over the contract period when the costs are incurred, that is when the claims are

charged by the dealer. Amounts invoiced to customers for which the Group receives consideration before the

performance is satisfied are recognized as contract liability. These services are either separately-priced or included

in the selling price of the vehicle. In the second case, revenue for the services is allocated based on the estimated

stand-alone selling price. In the event that the costs expected to be incurred to satisfy the remaining performance

obligations exceed the transaction price, an estimated contract loss is recognized.

Shipping and other transportation activities performed as an agent are recognized on a net basis, which is netting

the related freight cost against the freight revenue.

Rents and other income on assets sold with buy-back commitments

The Group enters into transactions for the sale of vehicles to some customers with an obligation to repurchase

(“buy-back commitment”) the vehicles at the end of a period (“buy-back period”) at the customer’s request. For

these types of arrangements, at inception, the Group assesses whether a significant economic incentive exists for

the customer to exercise the option.

If the Group determines that a significant economic incentive exists for the customer to exercise the buy-back

option, the transaction is accounted for as an operating lease. In such case, vehicles are accounted for as Property,

plant and equipment because the agreements typically have a long-term buy-back period. The difference between

the carrying value (corresponding to the manufacturing cost) and the estimated resale value (net of refurbishing

costs) at the end of the buy-back period is depreciated on a straight-line basis over the same period. The initial sale

price received is recognized in “Other current liabilities” and is comprised of the repurchase value of the vehicle,

and the rents to be recognized in the future recorded as contract liability. These rents are determined at the

inception of the contract as the difference between the initial sale price and the repurchase price and are

recognized as revenue on a straight-line basis over the term of the agreement. At the end of the agreement term,

upon exercise of the option, the used vehicles are reclassified from Property, plant and equipment to Inventories.

The proceeds from the sale of such vehicles are recognized as Revenues.

If the Group determines that a significant economic incentive does not exist for the customer to exercise the buy-

back option, the transaction is treated as a sale with a variable consideration whose variable component is the buy-

back provision accrual. The buy-back provision accrual is the difference between the repurchase price and the

estimated market value of the used vehicle at the end of the buy-back period and is recorded only when the

repurchase price is greater than the estimated market value of the used vehicle. The buy-back provision accrual is

estimated and recognized as a reduction of revenues at the time of the sale. Any subsequent change following

such periodic reassessment is recognized as a reduction of revenues at that time.

Interest income of financial services activities

Interest income, which is primarily generated from the Group’s provision of dealer and retail financing, is

recognized using the effective interest method.

170

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Reinsurance Premiums

Non-life and health net premiums written and earned are based upon reports received from ceding companies,

supplemented by PartnerRe’s own estimates of premiums for which ceding company reports have not been

received. The determination of premium estimates requires a review of PartnerRe’s experience with cedants,

familiarity with each market, an understanding of the characteristics of each line of business and Management’s

assessment of the impact of various other factors on the volume of business written and ceded to PartnerRe.

Premium estimates are updated as new information is received from cedants and differences between such

estimates and actual amounts are recorded in the period in which the estimates are changed or the actual amounts

are determined. Net premiums written and earned are presented net of ceded premiums, which represent the cost

of retrocessional protection purchased by PartnerRe.

Premiums are earned on a basis that is consistent with the risks covered under the terms of the reinsurance

contracts, which is generally one to two years. For U.S. and European wind and certain other risks, premiums are

earned commensurate with the seasonality of the underlying exposure.

Reinstatement premiums are recognized as written and earned at the time a loss event occurs, where coverage

limits for the remaining life of the contract are reinstated under pre-defined contract terms. The accrual of

reinstatement premiums is based on Management’s estimate of losses and loss expenses associated with the loss

event. Unearned premiums represent the portion of premiums written which is applicable to the unexpired risks

under contracts in force.

Premiums related to life business are earned over the premium-paying period on the underlying policies.

Cost of sales

Cost of sales comprises expenses incurred in the manufacturing and distribution of the Group’s products, expenses

directly attributable to the financial services, sports activities and reinsurance acquisition costs as follows:

Manufacturing and Distribution - all directly attributable material and production costs, all overheads directly related

to production and/or the performance of services, depreciation of property, plant and equipment and the

amortization of intangible assets relating to production and write-downs of inventories, freight and insurance costs

relating to deliveries to dealers and agency fees in the case of direct sales and provisions made to cover the

estimated cost of product warranties.

Financial services - interest expenses related to financial services financing as a whole and provisions for risks and

write-downs of assets.

Sports activities - includes costs for players’ wages and technical staff, amortization and impairment losses on

players’ registration rights, operating and maintenance costs of sports facilities as well as all the costs incurred for

sports events.

Reinsurance acquisition costs for non-life and health contracts comprised of incremental brokerage fees,

commissions and excise taxes which vary directly with, and are related to, the acquisition of reinsurance contracts

which are capitalized and charged to expense as the related premium is earned. All other acquisition related costs,

including all indirect costs, are expensed as incurred. Acquisition costs related to life contracts are deferred and

amortized over the premium-paying periods in proportion to anticipated premium income, allowing for lapses,

terminations and anticipated investment income. Actual and anticipated losses and loss expenses, other costs and

investment income related to underlying premiums are considered in determining the recoverability of deferred

acquisition costs related to PartnerRe’s Non-life business. Actual and anticipated loss experience, together with the

present value of future gross premiums, the present value of future benefits, settlement and maintenance costs are

considered in determining the recoverability of deferred acquisition costs related to PartnerRe’s Life business.

Government grants

Government grants are recognized when there is reasonable assurance that the Group is compliant with the

conditions for receiving such grants and that the grants will be received. Government grants are recognized as

income over the periods necessary to match them with the related costs which they are intended to offset.

The benefit of a government loan at a below-market rate of interest is treated for accounting purposes as a

government grant. The benefit of the below-market rate of interest is measured as the difference between the initial

carrying amount of the loan (fair value plus transaction costs) and the proceeds received, and it is accounted for in

accordance with the policies used for the recognition of government grants.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

171

Income taxes

Income taxes include all taxes based upon the taxable profits of the Group. Income taxes are provided by each

consolidated company on the basis of a reasonable estimate of the definition of taxable income for tax purposes, in

accordance with existing laws in the individual countries in which the Group operates and takes into account tax

credit entitlement.

Current and deferred taxes are recognized as income or expense and included in the Consolidated Income

Statement for the period, except tax arising from a business combination or a transaction or event which is

recognized, in the same or a different period, either in Other comprehensive income or directly in Equity.

Deferred taxes are accounted for under the full liability method.

Deferred tax liabilities are recognized for all taxable temporary differences between the carrying amounts of assets

or liabilities and their tax base, except to the extent that the deferred tax liabilities arise from the initial recognition of

goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at

the time of the transaction, affects neither accounting profit nor taxable profit, or for differences related to

investments in subsidiaries where reversal will not take place in the foreseeable future.

Deferred tax assets and liabilities are measured at the substantively enacted tax rates in the respective jurisdictions

in which the Group operates that are expected to apply to the period when the asset is realized or liability is settled.

Deferred tax assets relating to the carry-forward of unused tax losses and tax credits, as well as those arising from

temporary differences, are recognized to the extent that it is probable that future profits will be available against

which they can be utilized.

The Group recognizes deferred tax assets associated with the deductible temporary differences on investments in

subsidiaries only to the extent that it is probable that the temporary differences will reverse in the foreseeable future

and taxable profit will be available against which the temporary difference can be utilized.

The Group recognizes deferred tax liabilities associated with the existence of a subsidiary’s undistributed profits,

except when it is able to control the timing of the reversal of the temporary difference and it is probable that this

temporary difference will not reverse in the foreseeable future.

The Group reassesses unrecognized deferred tax assets at the end of each year and recognizes a previously

unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the

deferred tax asset to be recovered.

Current income taxes and deferred taxes are offset when they relate to the same taxation authority and there is a

legally enforceable right of offset.

Other taxes not based on income, such as property taxes and capital taxes, are included in other income

(expenses).

Dividends

Dividends payable by the Group are reported as a movement in equity in the year in which they are approved by

the shareholders’ meeting.

Earnings per share

Basic earnings per share are calculated by dividing the profit (loss) attributable to owners of the parent entity by the

weighted average number of shares outstanding during the year. Special voting shares are not included in the

earnings per share calculation as they are not eligible for dividends and have only limited economic rights. For

diluted earnings per share, the weighted average number of shares outstanding is adjusted assuming conversion

of all shares having a potential dilutive effect.

Use of estimates

The Consolidated Financial Statements are prepared in accordance with IFRS which require the use of estimates,

judgments and assumptions that affect the carrying amount of assets and liabilities, the disclosures relating to

contingent assets and liabilities and the amounts of income and expense reported for the period. The estimates

and related assumptions are based on elements that are known when the financial statements are prepared, on

historical experience of the Group and on any other factors that are considered to be relevant.

172

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Particularly in light of the current economic uncertainty, developments may occur which may differ from Group's

estimates and assumptions, and therefore might require significant adjustments to the carrying amounts of certain

items, which as of the date of these Consolidated Financial Statements cannot be accurately estimated or

predicted.

The principal items affected by estimates are the allowances for doubtful accounts receivable and inventories, non-

current assets (tangible and intangible assets), the residual values of vehicles leased out under operating lease

arrangements or sold with buy-back commitments, sales allowances, product warranties, pension and other post-

employment benefits, deferred tax assets and contingent liabilities.

The estimates and underlying assumptions are reviewed periodically and if the items subject to estimates do not

perform as assumed then the actual results could differ from the estimates, which would require adjustment

accordingly. Due to the currently unforeseeable global consequences of the COVID-19 pandemic, these estimates

and assumptions are subject to increased uncertainty. Actual results could differ materially from the estimates and

assumptions used in preparation of the financial statements.

The effects of any changes in estimate are recognized in the Consolidated Income Statement in the period in which

the adjustment is made, or also in future periods if the revision affects both current and future periods.

The following are the critical measurement processes and key assumptions and estimates which may have

significant effects on the amounts recognized in the Consolidated Financial Statements or for which there is a risk

that a significant difference may arise in respect to the carrying amounts of assets and liabilities in the future.

These Consolidated Financial Statements include all updates of estimates and assumptions considered necessary

by management to fairly state the Group’s results of operations, financial position and cash flows. Updated

estimates and assumptions to incorporate the expected consequences of the COVID-19 pandemic were also

included in the analysis of the recoverability and collectability of financial assets, especially of receivables from

financing activities.

Recoverability of goodwill and intangible assets with indefinite useful lives

In accordance with IAS 36 – Impairment of Assets, goodwill and intangible assets with indefinite lives are not

amortized and are tested for impairment annually or more frequently if facts or circumstances indicate that the

asset may be impaired.

Goodwill and intangible assets with indefinite useful lives are allocated to operating segments or cash generating

units (“CGUs”) within the operating segments. The impairment test is performed by comparing the carrying amount

and the recoverable amount of each CGU to which goodwill has been allocated.

If indicators of impairment are present, the carrying amount of the assets is reduced to its recoverable amount that

is the higher of its fair value less disposal costs and its value in use. In assessing its value in use, the pre-tax

estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the risks specific to the asset. An impairment loss is

recognized when the recoverable amount is lower than the carrying amount.

The assumptions used in the impairment test represent management’s best estimate for the period under

consideration including in relation to expected cash flows, growth rates, discount rates and future developments in

the market where the Group operates.

During the year ended 31 December 2021 no impairment losses were recognized (€505 million impairment losses

for the year ended 31 December 2020).

Additional information about the impairment test on goodwill and intangible assets with indefinite useful lives is

presented in Note 14 Intangible assets.

Recoverability of non-current assets with definite useful lives

Non-current assets with definite useful lives include property, plant and equipment, intangible assets and assets

held for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures of

CNH Industrial Group and Ferrari Group. The Group's subsidiaries periodically review the carrying amount of non-

current assets with definite useful lives when events or circumstances indicate that an asset may be impaired. The

recoverability of non-current assets with definite useful lives is based on the estimated future cash flows, using the

Group’s subsidiaries current business plans, of the cash generating units to which the assets relate.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

173

The estimation of future cash flows is based on assumptions which are inherently uncertain in nature and therefore

require management judgement.

The business plans of the Group’s subsidiaries could change in response to these evolving requirements and

emerging technologies or in relation to any future business plans or strategies developed as part of partnership and

collaborations, which may result in changes to estimated future cash flows and could affect the recoverability of

non-current assets with definite useful lives. Any change in recoverability would be accounted for at the time such

change to the business plan occurs.

For the years ended 31 December 2021 and 2020, the impairment tests performed compared the carrying amount

of the assets included in the respective CGUs to their value in use. The value in use of the CGUs was determined

using a discounted cash flow methodology based primarily on unobservable inputs, including estimated pre-tax

future cash flows attributable to the CGUs and a pre-tax discount rate reflecting a current market assessment of the

time value of money and the risks specific to the CGU.

During the year ended 31 December 2021 no significant impairment losses to intangible assets with definite useful

life and to property, plant and equipment were recognized.

During the year ended 31 December 2020 impairment losses to intangible assets with definite useful lives totalled

€692 million and impairment losses to property, plant and equipment totalled €683 million were recognized. The

most significant components of these impairment losses were in FCA Group (€914 million).

Additional information about the impairment test on non-current assets with definite useful lives is presented in

Note 15 Property, plant and equipment.

Residual values of assets leased out under operating lease arrangements or sold with a buy-back commitment

The Group records assets rented to customers or leased to them under operating lease as tangible assets.

Furthermore, new vehicle sales with a buy-back commitment are not recognized as sales at the time of delivery but

are accounted for as operating lease if it is probable that the vehicle will be bought back. Income from such

operating lease is recognized on a straight-line basis over the term of the lease. Depreciation expense for assets

subject to operating lease is recognized on a straight-line basis over the lease term in amounts necessary to

reduce the cost of an asset to its estimated residual value at the end of the lease term. The estimated residual

value of leased assets is calculated at the lease commencement date on the basis of published industry

information and historical experience and are reviewed quarterly. Realization of the residual values is dependent on

the Group’s future ability to market the assets under the then-prevailing market conditions. The Group continually

evaluates whether events and circumstances have occurred which impact the estimated residual values of the

assets on operating lease. The used vehicle market was carefully monitored to ensure that write-downs were

properly determined. However, it cannot be excluded that additional write-downs may be required if market

conditions should deteriorate further.

Recoverability of deferred tax assets

Deferred tax assets are recognized to the extent that it is probable that sufficient taxable profit will be available to

allow the benefit of part or all of the deferred tax assets to be utilized. The recoverability of deferred tax assets

depends on the Group’s ability to generate sufficient future taxable income in the period in which it is assumed that

the deductible temporary differences reverse and tax losses carried forward can be utilized. In making this

assessment the Group considers future taxable income based on the most recent budgets and plans prepared

using the same criteria as those for the impairment of assets and goodwill. These estimates and assumptions are

subject to a high degree of uncertainty, in particular with regard to the future performance of CNH Industrial Group

in its agricultural and construction equipment segments in Brazil. Therefore, changes in current estimates due to

unanticipated events could have a significant impact on the Group’s consolidated financial statements.

Additional information about the recoverability of deferred tax assets is presented in Note 11 Tax expense.

Technical Insurance Reserves and Net Insurance Premiums

Technical reinsurance reserves require estimates involving actuarial and statistical projections at a given time to

reflect PartnerRe management’s expectations of the costs of the ultimate settlement and administration of claims.

Estimates of ultimate liabilities are contingent on many future events and the eventual outcome of these events

may be different from the assumptions underlying the reserve estimates. In the event that the business

environment and social trends diverge from historical trends, PartnerRe may have to adjust its loss reserves to

amounts falling significantly outside its current estimate.

174

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The estimates are regularly reviewed and the ultimate liability may be in excess of, or less than, the amounts

provided, for which any adjustments will be reflected in the period in which the need for an adjustment is

determined. For reserves relating to the life reinsurance business, PartnerRe makes a number of critical accounting

estimates regarding mortality, longevity, morbidity, lapses, surrenders and future investment income and expenses.

Net reinsurance premiums written and earned and acquisition costs involve significant estimation as in most cases

cedants seek protection for business that they have not yet written at the time they enter into reinsurance

agreements and have to estimate the volume of premiums they will cede to PartnerRe. Reporting delays are

inherent in the reinsurance industry and vary in length by reinsurance market (country of cedants) and type of

treaty. As reporting delays can vary from a few weeks to a year or sometimes longer, PartnerRe produces

accounting estimates to report premiums and acquisition costs until it receives the cedants’ actual results.

Estimates for premiums and acquisition costs are updated continuously as new information is received from

cedants.

The recovery of deferred policy acquisition costs is dependent upon the future profitability of the related business.

Deferred policy acquisition costs recoverability testing is performed periodically together with the reserve adequacy

test, based on the latest best estimate assumptions by line of business.

Pension and other post-employment benefits

Group companies sponsor pension and other post-employment benefits in various countries, mainly in the United

States, the United Kingdom and Germany.

Employee benefit liabilities, related assets, costs and net interest connected with them are measured on an

actuarial basis which requires the use of estimates and assumptions to determine the net defined benefit liability/

asset for the Group. The actuarial method takes into consideration parameters of a financial nature such as the

discount rate, the rate for expected return on plan assets, the rate of salary increases and the healthcare costs

trend rate and takes into consideration the likelihood of potential future events by using certain demographic

parameters such as mortality rates and dismissal or retirement rates. The discount rates selected are based on

yields or yield curves of high quality corporate bonds in the relevant market. Trends in healthcare costs are

developed on the basis of historical experience, the near-term outlook for costs and likely long-term trends. Rates

of salary increases reflect the Group’s long-term actual expectations in the reference market and inflation trends.

Changes in any of these assumptions may have an effect on future contributions to the plans.

The effects resulting from revising the estimates for the above parameters (“re-measurements”) are recognized

directly in other comprehensive income without reclassification to profit or loss in subsequent years: refer to

“Employee benefits” section above for further details.

Significant future changes in the yields of corporate bonds, other actuarial assumptions referred to above and

returns on plan assets may significantly impact the net liability/asset.

Allowance for obsolete and slow-moving inventory

The allowance for obsolete and slow-moving inventory reflects management’s estimate of the expected loss in

value, and has been determined on the basis of past experience and historical and expected future trends in the

used vehicle market. A worsening of the economic and financial situation could cause a further deterioration in

conditions in the used vehicle market compared to that taken into consideration in calculating the allowances

recognized in the financial statements.

Sales allowance

The Group grants certain sales incentives to support sales of its products to retail customers. At the later of the

time of sale or the time an incentive is announced to dealers, the Group records the estimated impact of sales

allowances in the form of dealer and customer incentives as a reduction of revenue. The expense for new

programs is accrued at the inception of the program. The amounts of incentives to be paid are estimated. The

determination of sales allowances requires management to make estimates based upon historical data, estimated

future market demand for products, field inventory levels, announced incentive programs, competitive pricing and

interest rates, among other things.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

175

Product warranties

The Group makes provisions for estimated expenses related to product warranties at the time products are sold.

Management establishes these estimates based on historical information on the nature, frequency and average

cost of warranty claims. The Group seeks to improve vehicle quality and minimize warranty expenses arising from

claims. Warranty costs may differ from those estimated if actual claim rates are higher or lower than historical rates.

Contingent liabilities

The Group’s subsidiaries are subject to various proceedings, claims and governmental investigations on a wide

range of topics. Some of these proceedings allege defects in specific products or general design defects. Such

proceedings seek recovery for damage to property, personal injuries or wrongful death and in some cases include

a claim for exemplary or punitive damages. Adverse decisions could require the relevant subsidiary to pay

substantial damages or undertake service actions, recall campaigns or other costly actions.

Litigation is subject to many uncertainties and the outcome of the individual matters is not predictable. An accrual is

recorded if it is probable that there will be an outflow of funds and when the amount can be reasonably estimated.

Since such accruals represent estimates, the final resolution could require the Group to make payments in excess

of the amounts accrued or in an amount or range that could not previously be estimated. The subsidiaries of the

Group monitor the status of pending legal proceedings and consult with experts on legal and tax matters on a

regular basis.

3.Scope of consolidation

The consolidated financial statements include the companies over which Exor exercises control, and from which,

directly or indirectly, Exor is able to derive benefit by virtue of its power to govern their corporate financial and

operating policies. The companies/groups included in the scope of consolidation at 31 December 2021 are the

following:

Company/Group

Country

Ownership

Group

Non-controlling

interest

Operating subsidiaries / Segment entities

CNH Industrial

the Netherlands

27.06%

72.94%

Ferrari

the Netherlands

24.17%

75.83%

PartnerRe

Bermuda

100%

—%

Juventus Football Club

Italy

63.77%

36.23%

GEDI Gruppo Editoriale

Italy

89.62%

10.38%

Exor Seeds

USA

79.96%

20.04%

Shang Xia(a)

People's Rep.of China

77.30%

22.70%

Exor Capital LLP(b)

United Kingdom

100.00%

—%

Other Exor entities

Exor Nederland N.V.

the Netherlands

100%

—%

Exor S.A.

Luxembourg

100%

—%

Exor Investments Limited

United Kingdom

100%

—%

Exor SN LLC

USA

100%

—%

Ancom USA Inc.

USA

100%

—%

(a)Owned through the holding Company Full More Group (Hong Kong).

(b)Formerly Exor Investments (UK) LLP.

At 31 December 2021 the Exor Group includes 275 subsidiaries consolidated line-by-line by the CNH Industrial,

Ferrari, PartnerRe, GEDI and Juventus.

176

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Changes in the Scope of Consolidation

2021 Investments held for sale and Discontinued operations

Deconsolidation of former FCA Group

On 17 December 2019, FCA and PSA entered into a combination agreement providing for the combination of FCA

and PSA through a cross-border merger, with FCA as the surviving legal entity in the merger.

On 14 September 2020, FCA and PSA agreed to amend the combination agreement. According to the combination

agreement amendment, the FCA extraordinary dividend, to be paid to former FCA shareholders was reduced to

€2.9 billion, with PSA’s 46% stake in Faurecia planned to be distributed to all Stellantis shareholders promptly after

closing following approval by the Stellantis board and shareholders.

On 4 January 2021, PSA and FCA extraordinary general shareholders meetings approved the merger and on

16 January 2021, PSA merged with and into FCA. By virtue of the merger, FCA issued 1.742 FCA common shares

for each outstanding PSA ordinary share and each PSA ordinary share ceased to exist. Each issued and

outstanding common share of FCA remained unchanged as one common share in FCA.

The surviving entity changed its name to Stellantis on 17 January 2021, which was the accounting acquisition date

for the business combination. Following the merger, Exor continues to hold 449,410,092 common shares of

Stellantis, corresponding to 14.4% of the outstanding capital.

On 29 January 2021, the extraordinary dividend of approximately €2.9 billion (Exor’s share €827 million) was paid

to holders of FCA common shares of record as of the close of business on Friday, 15 January 2021.

As part of the merger, Stellantis distributed to its shareholders its 39.34% stake in Faurecia and the proceeds

amounting to approximately €308 million generated by the sales of ordinary shares of Faurecia effected in 2020.

On 22 March 2021 Exor received 7,653,004 Faurecia ordinary shares and €43 million.

Exor accounted for the former FCA Group applying the line-by-line consolidation method for the period from

1 January 2021 to 16 January 2021 (the date of the completion of the merger). At that date, Exor lost control over

FCA and therefore derecognized the former FCA Group net assets at 16 January 2021 and reclassified to the

income statement, in the item Profit (loss) from discontinued operations, the amounts previously recognized in

other comprehensive income related to the subsidiary.

At the date of completion of the merger, Exor assessed to have significant influence on Stellantis and started

applying the equity method according to IAS 28 – Investment in Associates and Joint Ventures. On initial

recognition the investment was accounted for at cost, equal to €6,660 million, to be be attributed to Exor's share of

Stellantis' net fair value as part of the purchase price allocation, to be completed within one year from the initial

recognition. At 31 December 2021 the purchase price allocation process has been completed.

The presentation of the FCA Group is as follows:

▪The net results of FCA have been excluded from the Group’s continuing operations and are presented net of

taxes as a single line item within the Consolidated Income Statement for the years ended 31 December 2021

and 2020. In order to present the financial effects of a discontinued operation, revenues and expenses arising

from intercompany transactions were eliminated except for those revenues and expenses that are considered

to continue after the disposal of the discontinued operation. However, no profit or loss is recognized for

intercompany transactions.

•The assets and liabilities of the FCA Group at 16 January 2021 have been derecognized. The assets and

liabilities of FCA Group at 31 December 2020, presented for comparative purposes, have not been reclassified.

•Cash flows arising from FCA have been presented separately as discontinued cash flows from operating,

investing and financing activities within the Consolidated Statements of Cash Flows for the years ended

31 December 2021 and 2020. These cash flows represent those arising from transactions with third parties.

PartnerRe Group

On 16 December 2021 Exor and Covéa signed a Definitive Agreement for the sale of PartnerRe, the global

reinsurer wholly-owned by Exor. Subject to obtaining approvals from the applicable regulatory and competition

authorities, it is expected that the transaction will complete in mid-2022.

At 31 December 2021, the sale within the next twelve months became highly probable and PartnerRe Group

operations met the criteria to be classified as a disposal group held for sale. It also met the criteria to be classified

as a discontinued operation pursuant to IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

177

The presentation of the PartnerRe Group is as follows:

•The net results of PartnerRe have been excluded from the Group’s continuing operations and are presented

net of taxes as a single line item within the Consolidated Income Statement for the years ended

31 December 2021 and 2020. In order to present the financial effects of the discontinued operation, revenues

and expenses arising from intercompany transactions were eliminated except for those revenues and expenses

that are considered to continue after the disposal of the discontinued operation. However, no profit or loss was

recognized for intercompany transactions within the Consolidated Income Statement.

•The assets and liabilities of PartnerRe have been classified as assets held for sale and liabilities held for sale

within the Consolidated Statement of Financial Position at 31 December 2021, while the assets and liabilities of

PartnerRe Group at 31 December 2020, presented for comparative purposes, have not been reclassified.

•Cash flows arising from PartnerRe Group have been presented separately as discontinued cash flows from

operating, investing and financing activities within the Consolidated Statements of Cash Flows for the years

ended 31 December 2021 and 2020. These cash flows represent those arising from transactions with third

parties.

The following table summarizes the results of FCA Group and PartnerRe Group that were excluded from the

Consolidated Income Statement for the year ended 31 December 2020:

Year ended 31 December

(€ million)

2020 as

reported

FCA

PartnerRe

2020

Net revenues

119,519

(86,676)

(6,459)

408

26,792

Cost of revenues

(103,337)

75,963

5,845

(408)

(21,937)

Selling, general and administrative expenses

(8,211)

5,629

337

—

(2,245)

Research and development costs

(4,678)

2,979

—

(1,699)

Other income (expenses), net

(671)

(59)

(4)

—

(734)

Result from investments

174

(179)

—

(1)

Net financial expenses

(1,459)

988

—

(390)

Profit (loss) before taxes

1,337

(1,355)

(196)

—

(214)

Tax expense

(1,336)

1,332

(12)

(16)

Profit (loss) from continuing operations

(23)

(208)

—

(230)

Profit (loss) from discontinued operations, net of tax

—

208

231

Profit (loss) for the period

—

Profit (loss) attributable to:

Owners of the parent

(30)

—

(30)

Non-controlling interests

—

Profit (loss) from continuing operations attributable

to:

Owners of the parent

(30)

(7)

(177)

—

(214)

Non-controlling interests

(16)

(31)

—

(16)

Earnings per share (in €)

Basic earnings per share

(0.13)

Diluted earnings per share

(0.13)

Earnings per share from continuing operations (in €)

Basic earnings per share

(0.13)

(0.94)

Diluted earnings per share

(0.13)

(0.95)

178

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The following table summarizes the results of FCA Group and PartnerRe Group that were excluded from the

Consolidated Statement of Comprehensive Income for the year ended 31 December 2020:

Year ended 31 December

(€ million)

2020 as

reported

FCA

PartnerRe

2020

Profit (loss) for the period from continuing operations

(23)

(208)

(230)

Profit (loss) for the period from discontinued operations

—

208

231

Profit (loss) for the period (A)

—

Items that will not be reclassified to the Consolidated Income Statement

in subsequent periods:

Gains (losses) on remeasurement of defined benefit plans

(143)

109

(19)

Share of gains (losses) on remeasurement of defined benefit plans for

equity method investees

—

Gains (losses) on financial assets at fair value through other

comprehensive income

102

—

108

Related tax effect

(21)

(3)

Items relating to discontinued operations, net of tax

(94)

(12)

(106)

Total items that will not be reclassified to the Consolidated

Income Statement in subsequent periods, net of tax (B1)

(2)

—

(2)

Items that may be reclassified to the Consolidated Income Statement in

subsequent periods:

Gains (losses) on cash flow hedging instruments

—

Foreign exchange translation gains (losses)

(4,296)

2,694

(1,552)

Share of other comprehensive income (loss) of equity method

investees

(171)

104

(1)

Related tax effect

(13)

(6)

(19)

Items relating to discontinued operations, net of tax

(2,814)

(116)

(2,930)

Total items that may be reclassified to the Consolidated Income

Statement in subsequent periods, net of tax (B2)

(4,435)

—

(4,435)

Total Other Comprehensive Income (Loss), net of tax

(B)=(B1)+(B2)

(4,437)

—

(4,437)

Total Comprehensive Income (A)+(B)

(4,436)

—

(4,436)

Total Comprehensive Income (Loss) attributable to:

Owners of the parent

(1,727)

—

(1,727)

Non-controlling interests

(2,709)

—

(2,709)

Total Comprehensive Income (Loss) attributable to owners of the

parent:

Continuing operations

(1,727)

236

(49)

(1,540)

Discontinued operations

—

(236)

(187)

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

179

The following table summarizes the cash-flows of FCA Group and PartnerRe Group that were presented as

discontinued cash-flows for the year ended 31 December 2020:

Year ended 31 December

(€ million)

2020 as

reported

FCA

PartnerRe

2020

Cash flows from operating activities:

Profit from continuing operations

(23)

(208)

(230)

Amortisation and depreciation

6,871

(5,143)

(39)

1,689

Gains on disposal of non-current assets

(134)

(102)

Other non-cash items

1,852

(1,192)

300

960

Dividends received

102

(73)

—

Change in provisions

(286)

434

—

148

Change in deferred taxes

557

(894)

(325)

Change in inventories, trade and other receivables and payables

5,098

(2,310)

(1,029)

1,759

Cash flows from operating activities – discontinued operations

—

9,182

951

10,133

Total

14,061

—

14,061

Cash flows used in investing activities:

Investments in property, plant and equipment and intangible assets

(10,253)

8,600

—

(1,653)

Investments in joint ventures, associates, unconsolidated

subsidiaries and financial assets

(412)

(331)

Consideration paid for the acquisition of GEDI net of cash and cash

equivalents acquired

(175)

—

(175)

Consideration paid for the acquisition of Full More Group net of cash

and cash equivalents acquired

(76)

—

(76)

Net change in Investments of Reinsurance companies (PartnerRe

Group)

(602)

—

602

—

Proceeds from disposal of investments, tangible, intangible and

financial assets

415

(148)

—

267

Net change in financial receivables

886

(396)

—

490

Net change in securities

103

(207)

—

(104)

Other changes

—

Net cash proceeds from disposal of discontinued operations

—

Cash flows used in investing activities – discontinued operations

—

(7,915)

(620)

(8,535)

Total

(10,102)

—

(10,102)

Cash flows used in financing activities:

Issuance of notes

7,018

(3,500)

(433)

3,085

Repayment of notes

(2,101)

1,376

—

(725)

Proceeds of other long-term debt

17,388

(15,215)

—

2,173

Repayment of other long-term debt

(10,073)

8,295

—

(1,778)

Net change in short-term debt and other financial assets/liabilities

(1,131)

(43)

—

(1,174)

Capital increase of subsidiaries

—

Exercise of stock options

—

Buyback of treasury shares

(28)

—

(28)

Dividends paid

(268)

—

(268)

Other changes

(211)

—

(208)

Cash flows used in financing activities – discontinued operations

—

9,087

430

9,517

Total

10,626

—

10,626

Translation exchange differences

(1,949)

—

(1,949)

Total Change in Cash and Cash Equivalents

12,636

180

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The following table represents the assets and liabilities of the FCA Group deconsolidated at 16 January 2021:

(€ million)

At 16 January 2021

Assets

Intangible assets

25,853

Property, plant and equipment

27,874

Investments and other financial assets

3,145

Deferred tax assets

1,075

Inventories

9,626

Trade and other receivables

4,005

Other assets

5,273

Assets held for sale

321

Cash and cash equivalents

22,514

Total Assets

99,686

Liabilities

Provisions for employee benefits

8,776

Other provisions

12,066

Deferred tax liabilities

1,895

Financial debt and other financial liabilities

21,593

Trade payables

20,293

Tax payables

499

Other liabilities

10,896

Liabilities held for sale

207

Total Liabilities

76,225

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

181

The following table represents the assets and liabilities of the PartnerRe business which were classified as held for

sale at 31 December 2021:

(€ million)

Note

31 December 2021

Assets classified as held for sale

Intangible assets

1,192

Property plant and equipment

Investments and other financial assets

1,153

Deferred tax assets

Inventories

—

Trade and other receivables

4,476

Investments of reinsurance companies

16,821

Other assets

1,062

Assets held for sale

—

Cash and cash equivalents

584

Total Assets held for sale

25,429

Liabilities classified as held for sale

Provisions for employee benefits

136

Other provisions

—

Technical reserves reinsurance companies

15,175

Deferred tax liabilities

102

Financial debt and other financial liabilities

1,937

Trade payables

658

Tax payables

Other liabilities

Total Liabilities held for sale

18,114

a.Investments of reinsurance companies

Investments of reinsurance companies at 31 December 2021 and 31 December 2020 are as follows:

(€ million)

At 31 December

2021

2020

Fixed maturities, at fair value

12,425

10,421

Funds held by reinsured companies

500

580

Equities, at fair value

1,547

1,219

Short-term investments, at fair value

180

339

Accrued investment income, at fair value

Other invested assets

2,086

1,788

Total investments of reinsurance companies

16,821

14,422

At 31 December 2021 approximately €93 million (€256 million at 31 December 2020) of cash and cash

equivalents and €4,841 million (€4,069 million at 31 December 2020) of securities of the PartnerRe Group were

deposited, pledged or held in escrow accounts in favour of ceding companies and other counterparties of

government authorities to comply with regulations on reinsurance contracts and insurance laws.

Net realised and unrealised gains of €404 million and losses of €55 million on investments designated as fair

value through profit or loss, were recognized in the Consolidated Income Statement during the years 2021 and

2020, respectively.

182

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

b.Technical reserves reinsurance companies

Technical reserves of reinsurance companies at 31 December 2021 and at 31 December 2020 are as follows:

(€ million)

At 31 December

2021

2020

Unpaid losses and Loss expenses

10,637

9,286

Life and health technical reinsurance reserves

2,329

2,204

Unearned premium reserves

2,209

1,846

Total Technical reinsurance reserves

15,175

13,336

Unpaid Losses and Loss Expenses

Unpaid losses and loss expenses are categorised into three types of reserves: Case reserve, ACRs and IBNR

reserves. Case reserves represent unpaid losses reported by the Company’s cedants and recorded by the

Company. ACRs are established for particular circumstances where, on the basis of individual loss reports, the

Company estimates that the particular loss or collection of losses covered by a treaty may be greater than

those advised by the cedant. IBNR reserves represent a provision for claims that have been incurred but not

yet reported to the Company, as well as future loss development on losses already reported, in excess of the

case reserves and ACRs.

The reconciliation of the beginning and ending gross and net liability for unpaid losses and loss expenses for

the years ended 31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Gross liability at the begin of the period

9,286

9,229

Reinsurance recoverable at the begin of the period

(638)

(672)

Net liability at the begin of the period

8,648

8,557

Net incurred losses

2,911

3,517

Net paid losses

(2,514)

(2,830)

Retroactive reinsurance recoverable

(303)

—

Translation differences and other changes

599

(596)

Net liability at the end of the period

9,341

8,648

Reinsurance recoverable at the end of the period

1,296

638

Gross liability at the end of the period

10,637

9,286

Life and health technical reinsurance reserves

The reconciliation of the beginning and ending gross and net liability for life and health technical reinsurance

reserves for the six months ended at 31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Gross liability at the begin of the period

2,204

2,152

Reinsurance recoverable at the begin of the period

(29)

(14)

Net liability at the begin of the period

2,175

2,138

Net incurred losses

1,218

1,154

Net paid losses

(1,195)

(1,077)

Translation differences

113

(40)

Net liability at the end of the period

2,311

2,175

Reinsurance recoverable at the end of the period

Gross liability at the end of the period

2,329

2,204

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

183

Reserves for unearned premiums

The reconciliation of the beginning and ending reserves for unearned premiums for the years ended

31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Reserves at 1 January

1,846

2,166

Net premiums written

6,032

5,516

Net premiums earned

(5,882)

(5,723)

Translation differences

213

(113)

Unearned premium reserves at 31 December

2,209

1,846

c.Financial debt and other financial liabilities

The composition of financial debt is as follows:

(€ million)

At 31 December

2021

2020

Notes

1,675

1,609

Lease liabilities

Payables represented by securities

179

233

Other financial debt

Total financial debt

1,937

1,912

Other financial liabilities

—

Total financial debt and other financial liabilities

1,937

1,915

Notes includes the Senior notes due 2026 issued for €750 million aggregate principal amount at 1.25% for

€745 million, the Senior notes due 2029 issued for $500 million aggregate principal amount at 5.5% for

€438 million, the Junior subordinate notes due 2050 issued for $500 million aggregate principal amount at 4.5%

for €437 million and the Capital Efficient notes (CENts) due 2066 for €55 million.

At 31 December 2021 the main committed credit facilities included the combined credit facility of $400 million

with the first $100 million being unsecured and the remainder secured. This facility matures each year on

14 November and unless cancelled by either party automatically renews. Other secured credit facilities for an

amount of $350 million. PartnerRe maintains committed secured letter of credit facilities which must be fully

secured with cash and or government bonds and or investment grade bonds.

Under the terms of certain reinsurance agreements, irrevocable letters of credit were issued for a total of

$102 million on an unsecured basis and $441 million on a secured basis at 31 December 2021 in respect of

losses and unearned premium reserves. The committed secured credit facilities maintained by PartnerRe are

used for the issuance of letters of credit which must be fully secured with either cash, government bonds and/or

investment grade bonds.

184

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The following table represents the results of the discontinued operations.

2021

2020

(€ million)

PartnerRe(a)

Net revenues

6,144

6,459

Expenses

(5,648)

(6,182)

Other income (expenses) and Result of investments

215

Net financial expenses

(75)

(81)

Profit (loss) before taxes from discontinued operations

637

197

Tax expense

(32)

Adjustments

(4)

—

Total

600

208

FCA

Net revenues

—

86,676

Expenses

—

(84,571)

Other income (expenses) and Result of investments

—

238

Net Financial expenses

—

(988)

Tax expense

—

(1,332)

FCA Profit (loss)

—

Exor Share of the FCA profit loss

—

Reversal of Exor's share in FCA OCI reserve

(490)

—

Other adjustments

(14)

—

Total

(496)

Profit (loss) from discontinued operation, net of tax

104

231

(a) Amounts presented are not representative of the income statement of PartnerRe on a stand-alone basis.

2021 Change in scope of consolidation

Acquisition of Shang Xia

At the end of December 2020 Exor acquired a 77.30% stake in Shang Xia (through the holding company Full More

Group) for a total consideration of €79 million.

The transaction was accounted for in accordance with IFRS 3, by applying the acquisition method on the basis of

the financial statements prepared in accordance with IFRS at 31 December 2020 (the acquisition date) and

therefore did not have any effect on the 2020 income statement.

In 2021 Exor finalized the purchase price allocation process, identifying a trademark of €48 million and a residual

goodwill of €49 million.

Acquisition of Raven Industries

On 30 November 2021, CNH Industrial completed the acquisition of Raven Industries, Inc. ("Raven"), a U.S.-based

leader in precision agriculture technology. CNH Industrial acquired 100% of the capital stock of Raven for $58 per

share funded with available cash on hand. Cash consideration paid to Raven shareholders and Raven equity

award holders totalled $2.1 billion.

The acquisition of Raven has been accounted for as a business combination using the acquisition method of

accounting in accordance with IFRS 3 – Business Combinations.

The valuation of assets acquired and liabilities assumed was preliminary at 31 December 2021 and will be finalized

during the one-year measurement period from the acquisition date. As a result, CNH Industrial recorded preliminary

estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date, including

$1.3 billion and $0.5 billion in preliminary goodwill and intangible assets.

The preliminary assessment will be updated as revised information becomes available, including the development

and review of the necessary valuations.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

185

Acquisition of Sampierana

On 30 December 2021, CNH Industrial completed its previously announced purchase of 90% of the capital stock of

Sampierana S.p.A ("Sampierana").

The acquisition of the remaining 10% of the capital stock in Sampierana will occur over the next four years through

predetermined mechanisms. Sampierana is an Italian company specializing in the development, manufacture and

commercialization of earthmoving machines, undercarriages and spare parts.

The acquisition of Sampierana has been accounted for as a business combination using the acquisition method of

accounting in accordance with IFRS 3 - Business Combinations.

The valuation of assets acquired and liabilities assumed was preliminary at 31 December 2021 and will be finalized

during the one-year measurement period from the acquisition date. As a result, CNH Industrial recorded preliminary

estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date, including

approximately $51 million in preliminary goodwill.

The preliminary assessment will be updated as revised information becomes available, including the development

and review of the necessary valuations.

2020 Change in scope of consolidation

Acquisition of GEDI

In 2020 Exor completed the acquisition of the control of GEDI Gruppo Editoriale S.p.A. for a total consideration of

€202 million at 31 December 2020 (89.62% of issued share capital).

Exor finalized the process of measuring the fair values assigned to GEDI’s assets and liabilities at the acquisition

date and identified a bargain purchase of €18 million, which represents the excess of the net assets of GEDI at the

acquisition date over the consideration paid. Such amount was booked as a gain in the income statement in the

second half of 2020.

4.Segment reporting

Reportable segments reflect the operating segments of the Group that are regularly reviewed by the Chief

Executive Officer, who is the Chief Operating Decision Maker ("CODM”), as defined under IFRS 8 – Operating

Segments, for making strategic decisions and allocating resources and assessing performance, and that exceed

the quantitative threshold provided in IFRS 8, or the disclosure of which is considered useful for the users of the

financial statements.

The Exor Group reportable segments coincide with the consolidated data of its principal investments, each of which

represents an investment in a major business segment: Stellantis, CNH Industrial, Ferrari, PartnerRe, Juventus

and GEDI. The column “Other and adjustments” includes unallocated income and expenses, share of profit in

equity investments of EXOR N.V., expenses related to corporate activities and finance income and expense of

EXOR N.V. and other Exor entities which are not included within the reportable segments as well as assets and

liabilities of the Holdings System entities.

Prior to the merger of PSA with and into FCA, Exor segment reporting included FCA as a reportable segment.

Following the merger, the economic data of FCA have been excluded from continuing operations and are

presented in a single line item within the Consolidated Income Statement for the years 2021 and 2020, as

discontinued operations, while the assets and liabilities of FCA Group at 31 December 2020 have not been

reclassified for the comparative consolidated statement of financial position.

As required by IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations, PartnerRe was classified

and presented as discontinued operations in these Consolidated Financial Statements and therefore the segment

reporting disclosures was appropriately adjusted.

186

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The following tables summarize selected financial information by reporting segment for the years ended

31 December 2021 and 2020. Data presented are prepared by each subsidiary for the Exor consolidation process

and may differ from data published by each subsidiary in its financial report.

(€ million)

Stellantis1

CNH

Industrial

Ferrari

PartnerRe2

Juventus

GEDI

Associates,

other and

adjustments

Consolidated

2021

Segment revenues

—

28,309

4,271

—

446

520

33,617

Revenues from transactions

with other operating segments

—

Revenues from external

customers

—

28,309

4,271

—

446

520

33,617

Profit (loss) from continuing

operations

1,905

1,502

833

—

(215)

(35)

(640)

3,350

Profit (loss) from discontinued

operations

—

104

Profit (loss) attributable to

owners of the parent3

1,905

398

201

580

(137)

(31)

(1,199)

1,717

31 December 2021

Total assets

8,624

45,129

6,863

25,429

962

675

3,429

91,111

Gross debt

—

21,569

2,667

—

239

161

4,314

28,950

Cash and cash equivalents

—

6,058

1,344

—

160

329

7,905

Total equity

8,624

7,440

2,211

7,316

303

193

(1,717)

24,370

Issued capital and reserves

attributable to owners of the

parent3

8,624

1,962

533

7,139

194

171

(1,864)

16,759

1)Consolidated with the equity method starting from 16 January 2021.

2)At 31 December 2021, PartnerRe Group data have been classified as a discontinued operation pursuant to IFRS 5 - Non-current Assets Held for Sale and

Discontinued Operations. See Note 3 Scope of consolidation for further information.

3)Exor share of the result or equity attributable to the owners of the parent of each segment entity.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

187

(€ million)

FCA1

CNH

Industrial

Ferrari

PartnerRe2

Juventus

GEDI

Associates,

other and

adjustments

Consolidated

2020

Segment revenues

—

22,749

3,460

—

509

367

(293)

26,792

Revenues from transactions with

other operating segments

—

(272)

(101)

—

(43)

(3)

419

—

Revenues from external

customers

—

22,477

3,359

—

466

364

126

26,792

Profit (loss) from continuing

operations

—

(608)

609

—

(153)

(13)

(65)

(230)

Profit (loss) from discontinued

operations

—

231

Profit (loss) attributable to

owners of the parent3

(178)

146

181

(98)

(11)

(78)

(30)

31 December 2020

Total assets

100,053

41,199

6,262

22,537

967

660

1,267

172,945

Gross debt4

21,750

21,805

2,727

1,915

396

143

4,196

52,932

Cash and cash equivalents

23,846

7,847

1,363

1,916

515

35,561

Total equity

25,861

5,489

1,789

6,583

125

231

(2,418)

37,660

Issued capital and reserves

attributable to owners of the

parent3

7,337

1,431

452

6,025

207

(2,442)

13,090

1)The economic data of FCA (now Stellantis) for 2020 are presented in the line Profit (loss) from discontinued operation.

2)At 31 December 2021, PartnerRe Group economic data have been classified as a discontinued operation pursuant to IFRS 5 - Non-current Assets Held for

Sale and Discontinued Operations. See Note 3 Scope of consolidation for further information.

3)Exor share of the result or equity attributable to the owners of the parent of each segment entity.

4)Gross debt is defined as financial debt and other financial liabilities.

Information by geographical area

The following tables present an analysis of the net revenues of the Group by country, irrespective of the origin of

the goods and services for the years ended 31 December 2021 and 2020:

Years ended 31 December

(€ million)

2021

2020

North America

7,810

6,218

Italy

4,132

2,532

France

2,947

2,593

Brazil

2,679

1,693

Germany

2,183

1,828

China

855

909

Other countries

13,011

11,019

Total net revenues

33,617

26,792

Other countries includes net revenues generated in the Netherlands for the year ended 31 December 2021

amounting to €287 million (€278 million for the year ended 31 December 2020).

188

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The following table presents an analysis of non-current assets of the Group at 31 December 2021 and 2020 by

country:

At 31 December

(€ million)

2021

2020

North America

6,764

42,435

Italy

6,725

17,634

France

1,019

1,137

China

439

318

Brazil

246

3,042

Poland

619

Bermuda

—

1,141

Other countries

2,926

7,148

Total non-current assets

18,205

73,474

Other countries includes non-current assets related to the Netherlands of €10 million at 31 December 2021

(€39 million at 31 December 2020).

5.Net revenues

Net revenues for the years ended 31 December 2021 and 2020 are as follows:

Years ended 31 December

(€ million)

2021

2020

Sales of goods

30,381

24,030

Services provided and other revenues

753

803

Revenues from sales of goods and services

31,134

24,833

Interest income of financial services activities

685

728

Rents and other income on operating leases

271

276

Other

1,527

955

Total net revenues

33,617

26,792

6.Cost of sales

Cost of revenues for the years ended 31 December 2021 and 2020 are as follows:

Years ended 31 December

(€ million)

2021

2020

Cost of goods

25,648

21,463

Reinsurance acquisition costs

—

Interest cost and other financial expenses from financial services companies

324

474

Total cost of sales

25,979

21,937

7.Research and development costs

Research and development costs for the years ended 31 December 2021 and 2020 are as follows:

Years ended 31 December

(€ million)

2021

2020

Research and development costs expensed

1,424

1,063

Amortisation of capitalised development costs

383

552

Impairment and write-off of costs previously capitalised

Total research and development costs

1,823

1,699

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

189

Impairment and write-offs of capitalized development costs referred to the CNH Industrial Group (€16 million in

2021 and €84 million in 2020).

8.Other income (expense), net

This line of the income statement consists of miscellaneous items which cannot be allocated to specific functional

areas, such as accruals for various provisions not attributable to other items of Cost of revenues or Selling, general

and administrative costs, net of income arising from operations which is not attributable to the Sale of goods and

services. In 2021 Other net expenses amount to €378 million, compared to a net expenses of €734 million for the

year ended 31 December 2020.

In 2021 the item related to CNH Industrial Group amounts to €339 million and mainly included €66 million of

restructuring costs, €158 million of separation costs in connection with the demerger of the Iveco Group,

€48 million for the transaction costs related to the acquisition of Raven Industries and a pre-tax gain of €80 million

related to a healthcare plan amendment in the U.S.

In 2020 the item, for the most part related to CNH Industrial Group, mainly included €505 million of impairment loss

on goodwill and €56 million of restructuring costs.

The restructuring costs of €72 million (€56 million in 2020) are related to CNH Industrial and GEDI for €66 million

and €6 million, respectively (in 2020 €49 million and €7 million, respectively).

9.Results from investments

Result from investments for the years ended 31 December 2021 and 2020 are as follows:

(€ million)

Years ended 31 December

2021

2020

Share of the profit of equity method investees

2,051

Impairment losses

(2)

(56)

Other income from investments

Total result from investments

2,057

(1)

The following table summarises the share of profits of equity method investees for the years ended

31 December 2021 and 2020:

(€ million)

Years ended 31 December

2021

2020

Joint ventures

(9)

Associates1

1,981

Share of the profit of equity method investees

2,051

1)In 2021 mainly related to Stellantis (€1,905 million).

190

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

10.Net financial expenses

Net financial expenses for the years ended 31 December 2021 and 2020 are as follows:

Years ended 31 December

(€ million)

2021

2020

Financial Income:

Interest and other financial income

Financial services income

685

728

Gains on disposal of securities

—

Total financial income

735

773

Related to:

Industrial companies (A)

Financial services companies (reported within net revenues)

685

728

Financial Expenses:

Interest expenses and other financial expenses

(662)

(657)

Write-downs and losses on financial assets and securities

(42)

(103)

Net interest expenses on employee benefits provisions

(7)

(14)

Total interest and other financial expenses

(711)

(774)

Net expenses from derivative financial instruments and exchange rate differences

167

(135)

Total financial expenses

(544)

(909)

Related to:

Industrial companies (B)

(219)

(435)

Financial services companies (reported within cost of revenues)

(324)

(474)

Net financial expenses relating to industrial companies (A+B)

(169)

(390)

Interest expenses and other financial expenses may be analysed as follows:

Years ended 31 December

(€ million)

2021

2020

Interest expenses on bonds

457

436

Interest expenses from banks

Interest on lease liabilities

Other interest and financial expenses

148

121

Total Interest expense

662

657

11.Tax expense

Exor N.V. and its subsidiaries have substantial worldwide operations. The Company’s subsidiaries incur tax

obligations in the jurisdictions in which they operate. Tax expense for the years ended 31 December 2021 and

2020 is as follows:

Years ended 31 December

(€ million)

2021

2020

Current tax

751

339

Deferred tax

(217)

(305)

Tax (benefit) expense relating to prior periods

768

(18)

Total tax expense

1,302

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

191

In 2021, Tax expense relating to prior periods includes the effects of a settlement signed by Exor with the Italian

Tax Authorities (“Agenzia delle Entrate”). On 18 February 2022, Exor settled a complex tax issue, specifically in

respect of the Italian exit tax and paid €746 million, of which €104 million represented by interest.

The issue is related to the Italian registered company Exor S.p.A. that in December 2016 merged with its Dutch

subsidiary Exor Holding N.V. to create today’s Exor domiciled fiscally in the Netherlands. At the time of this cross-

border merger, the exiting company Exor S.p.A. applied the Participation Exemption (PEX) regulations as set out in

Article 87 of the Italian Corporate Income Tax Act. Under this regime, 95% of any capital gains relating to the value

of its holdings was exempt and therefore excluded from the holding company’s taxable income for the

determination of the Exit Tax.

With a subsequent principle of law “Legal Principle 10/2021”, published on 11 May 2021, the Agenzia delle Entrate

contended that the PEX should not apply to cases in which a holding company transfers its fiscal domicile abroad

without maintaining a permanent establishment in Italy.

As a result of the subsequent principle of law published in 2021, a complex matter of interpretation on the

application of the PEX regulation back in 2016 has arisen. Exor remains convinced that it acted in accordance with

the rules. However, with the objective of avoiding the time and costs of a major tax dispute, it has decided to enter

into a settlement agreement with the Agenzia delle Entrate.

At 31 December 2021, the effect of this settlement is a recognition of a liability of €744 million, of which €643 million

of income taxes and €101 million of interest (recognized until 31 December 2021).

The reconciliation between the income tax expenses recognized in the consolidated financial statements and the

theoretical income tax expense, calculated on the basis of the theoretical tax rate in effect in the Netherlands, is as

follows:

Years ended 31 December

(€ million)

2021

2020

Theoretical tax expense

1,167

Tax effect on:

Recognition and utilisation of previously unrecognized deferred tax assets

(8)

Permanent differences

(459)

(79)

Deferred tax assets not recognized and write-downs

(60)

Differences between foreign tax rates and the theoretical tax rate and tax

holidays

(42)

(31)

Taxes relating to prior years

663

(16)

Other differences

(8)

Total tax expense, excluding IRAP

1,253

(22)

Effective tax rate

26.85%

10.44%

IRAP (current and deferred)

Total tax expense

1,302

The applicable tax rate used to determine the theoretical income expense was 25% in 2021 and 2020, which is the

tax rate applicable in the Netherlands. The increase in the effective tax rate is due to the settlement between Exor

and the Italian Tax Authorities and the operations of CNH Industrial and Ferrari, as commented below.

CNH Industrial’s effective tax rates for 2021 and 2020 were 16.8% and 7.3%, respectively. The current period

effective tax rate was positively impacted by €125 million related to recognizing deferred tax assets associated with

the agricultural and construction equipment operations in Brazil, pre-tax earnings in other jurisdictions which

allowed previously unrecognized deferred tax assets to be realized, and the impact of additional tax credit and

incentive benefits. These positive impacts were partially offset by the negative impacts of the non-deductible

expenses associated with the demerger of Iveco Group and the acquisition of Raven Industries. The 2020 effective

tax rate reflected the inability to record tax benefits for pre-tax losses in certain jurisdictions and the goodwill

impairment charge related to the Construction equipment segment, the effects of which were partially offset by the

impact of net discrete tax benefits, which were primarily non-cash and included €36 million related to the

recognition of certain deferred tax assets, primarily based on the recent profit history and expected future

profitability of consolidated tax reporting groups in certain jurisdictions.

192

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The increase in the effective tax rate of Ferrari from 8.7% in 2020 to 20.1% in 2021 was primarily attributable to the

tax benefits introduced in 2020 in Italy which allowed Ferrari a one-time partial step-up of its trademark for tax

purposes resulting in a net tax benefit of €75 million and to a lesser extent, the effects of deductions for eligible

research and development costs. The net benefit from the step up is included within “permanent and other

differences” for 2020 in the tax rate reconciliation above. The Patent Box benefit relating to 2021, 2020 and 2019 is

included within “permanent and other differences” in the tax rate reconciliation above.

Deferred tax assets and deferred tax liabilities recognized at 31 December 2021 and 2020 are as follows:

(€ million)

At 31 December

2021

2020

Deferred tax assets

1,165

2,192

Deferred tax liabilities

(358)

(2,256)

Total, net

807

(64)

The increase of €871 million in net deferred tax assets is mainly due to the deconsolidation of the FCA Group for

€820 million and the reclassification of the net deferred tax assets of PartnerRe as Assets and liabilities held for

sale for €25 million. Further increase is due to a net increase recognized by CNH Industrial Group in the income

statement of €206 million, which was largely driven by the recognition of certain deferred tax assets in Brazil, being

mostly offset by net reductions related to tax effects charged to equity, the impact of currency translation and the

effect of certain deferred tax liabilities related to the CNH Industrial's 2021 acquisitions.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

193

Deferred tax assets and liabilities at 31 December 2021 and 2020 and the changes during the years then ended

are as follows:

(€ million)

At 31

December

2020

Recognized

in Income

statement

Recognized in

Other

comprehensive

income

Deconsoli-

dation of FCA

Transferred

to Assets /

(Liabilities)

held for sale

Translation

differences

and other

changes

At 31

December

2021

Deferred tax assets arising

from:

Provisions

4,232

179

—

(3,375)

(78)

1,021

Provision for

employee benefits

1,623

(22)

(1,423)

(7)

182

Intangible assets

159

—

(275)

(1)

(55)

Inventories

428

—

(163)

(12)

(79)

184

Allowances for

doubtful accounts

237

—

(118)

—

122

Measurement of

derivative financial

instruments

(12)

(1)

—

Other

2,239

(56)

(6)

(1,351)

(122)

(49)

655

Total deferred tax assets

8,925

203

(40)

(6,706)

(220)

(21)

2,141

Deferred tax liabilities

arising from:

Accelerated

depreciation

(2,761)

—

2,315

—

(77)

(494)

Capitalisation of

development costs

(3,493)

(47)

—

3,033

—

(22)

(529)

Inventories

(105)

(20)

—

(96)

Provision for

employee benefits

(74)

(55)

114

—

(1)

(12)

Other

(1,919)

1,585

152

(63)

(213)

Total deferred tax

liabilities

(8,352)

(19)

(38)

7,049

152

(136)

(1,344)

Deferred tax assets

arising on tax loss carry-

forwards

6,346

—

(5,391)

(94)

(68)

881

Unrecognized deferred

tax assets

(6,983)

(66)

(1)

5,868

187

124

(871)

Total Net deferred tax

assets

(64)

206

(79)

820

(101)

807

194

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

(€ million)

At 31

December

2019

Recognized in

Income

statement

Recognized in

Other

comprehensive

income

Transferred to

Assets /

(Liabilities)

held for sale

Translation

differences and

other changes

At 31

December

2020

Deferred tax assets arising

from:

Provisions

4,567

(57)

—

(278)

4,232

Provision for employee

benefits

1,705

(10)

—

(118)

1,623

Intangible assets

107

—

(41)

159

Inventories

436

—

(18)

428

Allowances for doubtful

accounts

252

—

(44)

237

Impairment of financial

assets

232

(18)

—

232

Measurement of

derivative financial

instruments

(12)

—

(1)

Other

1,745

342

(2)

(78)

2,007

Total deferred tax assets

9,048

461

(24)

—

(560)

8,925

Deferred tax liabilities

arising from:

Accelerated

depreciation

(2,885)

(114)

—

238

(2,761)

Capitalisation of

development costs

(3,073)

(587)

—

167

(3,493)

Inventories

(105)

(15)

—

(105)

Provision for employee

benefits

(95)

(3)

—

(7)

(74)

Other

(1,917)

(117)

(2)

—

117

(1,919)

Total deferred tax

liabilities

(8,075)

(836)

—

530

(8,352)

Deferred tax assets

arising on tax loss carry-

forwards

5,901

1,111

—

(666)

6,346

Unrecognized deferred

tax assets

(6,352)

(1,369)

—

717

(6,983)

Total Net deferred tax

assets

522

(633)

—

(64)

At 31 December 2021 and 2020 the Group had the following recognized and unrecognized deferred tax assets:

(€ million)

Deferred tax assets relating to

Deductible

temporary

differences

of which not

recognized

Tax loss

carry forward

of which not

recognized

At 31 December 2021

2,141

271

881

600

At 31 December 2020

8,925

1,529

6,346

5,454

At 31 December 2021 net deferred tax assets include the amount of €281 million (€892 million at

31 December 2020) in respect of benefits on unused tax loss carryforwards.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

195

The decrease compared to the 31 December 2020 is mainly due to the deconsolidation of the FCA Group, in fact

part of the unused tax loss carry-forwards of the FCA Group. In particular, at 31 December 2020 the FCA Group

had tax loss carryforwards which can be carried forward indefinitely as follows:

FCA Group Net Deferred Tax Assets

(€ million)

Net Deferred

Tax Assets

Italy

of which

recognized

of which not

recognized

Net Deferred

Tax Assets

Brazil

of which

recognized

of which not

recognized

At 31 December 2020

3,682

253

3,429

1,692

—

1,692

Total deductible and taxable temporary differences and accumulated tax losses at 31 December 2021, together

with the amounts for which deferred tax assets have not been recognized, analysed by year of expiration, are as

follows:

Year of expiration

(€ million)

At 31

December

2021

2022

2023

2024

2025

Beyond

2025

Unlimited /

Indeterminable

Deductible temporary

differences

9,702

4,553

1,284

Taxable temporary differences

(5,926)

(919)

(1,243)

(1,239)

(1,241)

(44)

Tax losses and tax credits

3,538

136

884

2,336

Temporary differences and tax

losses for which deferred tax

assets have not been

recognized

(2,200)

(283)

(371)

(354)

(385)

(523)

(285)

Net temporary differences

and tax losses

5,114

3,487

(263)

(261)

(274)

405

2,020

Deferred tax liabilities have not been recognized on the undistributed earnings of subsidiaries except where it is

probable that distribution will occur in the foreseeable future.

At 31 December 2021, undistributed earnings in certain CNH Industrial subsidiaries outside the U.K. totalled

approximately €8 billion (€6 billion at 31 December 2020) for which no deferred tax liability has been recorded

because the remittance of earnings from certain jurisdictions would incur no tax or such earnings are indefinitely

reinvested. CNH Industrial has determined the amount of unrecognized deferred tax liability relating to the €8 billion

undistributed earnings is approximately €233 million and related to withholding taxes and incremental local country

income taxes in certain jurisdictions. Further, CNH Industrial evaluated the undistributed earnings from its joint

ventures in which it owned 50% or less and recorded €10 million of deferred tax liabilities at 31 December 2021.

The repatriation of undistributed earnings to the U.K. is generally exempt from U.K. income taxes.

12.Other information by nature

In 2021 personnel costs for the Group’s continuing operations amounted to €14,696 million (€15,910 million in

2020). These amounts include costs that were capitalised mainly in connection with product development activities.

In 2021 the Group’s continuing operations had an average number of employees of 263,284 (268,979 in 2020).

196

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

13.Earnings per share

The following table summarises the composition of earnings per share:

Years ended 31 December

2021

2020

Average number of ordinary shares outstanding

220,077,794

226,752,238

Profit (loss) attributable to owners of the parent

€ million

1,717

(30)

basic earnings per share

€

7.803

(0.13)

diluted earnings per share

€

7.792

(0.13)

Profit (loss) from continuing operations attributable to owners of the

parent

€ million

1,630

(214)

basic earnings per share

€

7.409

(0.944)

diluted earnings per share

€

7.398

0.946

Profit from discontinued operations attributable to owners of the parent

€ million

184

basic earnings per share

€

0.394

0.811

diluted earnings per share

€

0.383

0.809

In order to calculate the diluted earnings per share, the profit attributable to owners of the parent was adjusted to

take into account the dilutive effects arising from the theoretical exercise of the stock option plans granted by the

subsidiaries using their own equity instruments.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

197

14.Intangible assets

Changes in 2021 are the following:

(€ million)

Goodwill

Trademark

and

Intangible

assets with

an indefinite

useful life

Development

costs

externally

acquired

Development

costs

internally

generated

Patents,

concessions

and licenses

externally

acquired

Other

intangible

assets

externally

acquired

Players’

registration

rights

Total

Balance at

31 December 2020

Original cost

14,239

3,739

24,889

8,170

6,021

2,781

866

60,705

Accumulated amortisation

and impairment

(1,093)

(118)

(14,039)

(5,738)

(4,140)

(1,864)

(395)

(27,387)

Net carrying amount

13,146

3,621

10,850

2,432

1,881

917

471

33,318

Changes during the year

(original cost)

Additions

—

495

347

159

158

1,196

Disposals

—

(114)

(900)

(55)

(16)

(164)

(1,249)

Deconsolidation of FCA

(10,373)

(3,024)

(21,445)

(2,815)

(1,872)

(3,585)

—

(43,113)

Transfer to assets held for

sale

(583)

(214)

—

(8)

(1,152)

—

(1,957)

Change in scope of

consolidation

1,128

(25)

424

—

1,562

Translation differences

465

144

109

214

—

1,039

Other changes

(59)

(2)

(7)

(52)

(2,949)

2,987

—

(81)

Total

(9,422)

(3,163)

(20,952)

(3,285)

(4,807)

(967)

(6)

(42,602)

Changes during the year

(accumulated

amortisation and

impairment)

Amortisation

—

(1)

(378)

(256)

(65)

(111)

(179)

(990)

Impairment losses

—

(17)

—

(20)

(36)

Disposals

—

115

898

132

1,209

Deconsolidation of FCA

118

11,375

2,216

1,622

1,865

—

17,260

Change in scope of

consolidation

—

(22)

—

(1)

—

(1)

Transfer to assets held for

sale

—

750

—

750

Translation differences

(80)

(4)

(53)

(81)

(35)

(117)

—

(368)

Other changes

—

1,461

(1,440)

—

100

Total

11,073

2,806

3,037

956

(66)

17,923

Balance at 31 December

2021

Original cost

4,817

576

3,937

4,885

1,214

1,814

860

18,103

Accumulated amortisation

and impairment

(1,035)

(59)

(2,966)

(2,932)

(1,103)

(908)

(461)

(9,464)

Net carrying amount

3,783

518

970

1,953

111

906

399

8,639

198

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Changes in 2020 were the following:

(€ million)

Goodwill

Intangible

assets with

an indefinite

useful life

Development

costs

externally

acquired

Development

costs internally

generated

Patents,

concessions

and licenses

externally

acquired

Other

intangible

assets

externally

acquired

Players’

registration

rights

Total

Balance at

31 December 2019

Original cost

15,658

3,757

23,453

7,957

5,628

2,855

880

60,187

Accumulated

amortisation and

impairment

(923)

(121)

(12,700)

(5,391)

(3,827)

(1,773)

(385)

(25,120)

Net carrying

amount

14,735

3,636

10,753

2,566

1,801

1,082

494

35,067

Changes during

the year (original

cost)

Additions

—

2,842

437

784

289

198

4,551

Disposals

(265)

(8)

(79)

(14)

(135)

(174)

(212)

(887)

Consolidation GEDI

—

298

—

383

Transfer to assets

held for sale

—

Translation

differences

(1,212)

(309)

(1,336)

(205)

(362)

(219)

—

(3,643)

Other changes

—

(5)

—

103

Total

(1,419)

(18)

1,436

213

393

(73)

(14)

518

Changes during

the year

(accumulated

amortisation and

impairment)

Amortisation

—

(1)

(1,435)

(390)

(458)

(130)

(164)

(2,578)

Impairment losses

(505)

—

(470)

(117)

(1)

(81)

(23)

(1,197)

Disposals

257

—

177

511

Consolidation GEDI

—

(1)

—

(76)

—

(77)

Transfer to assets

held for sale

—

(11)

—

(11)

Translation

differences

532

149

221

141

—

1,130

Other changes

(5)

(19)

—

(22)

—

(45)

Total

(170)

(1,339)

(347)

(313)

(91)

(10)

(2,267)

Balance at

31 December 2020

Original cost

14,239

3,739

24,889

8,170

6,021

2,782

866

60,705

Accumulated

amortisation and

impairment

(1,093)

(118)

(14,039)

(5,738)

(4,140)

(1,864)

(395)

(27,387)

Net carrying

amount

13,146

3,621

10,850

2,432

1,881

918

471

33,318

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

199

Goodwill

The analysis of goodwill by segment is as follows:

At 31 December

(€ million)

2021

2020

Goodwill

Agricultural

2,704

1,418

Construction

—

Commercial and Specialty Vehicles

Powertrain

Financial Services

116

107

CNH Industrial

2,922

1,580

Ferrari

786

PartnerRe

—

538

Shang Xia

Juventus Football Club

GEDI

—

Other

FCA

—

10,131

Total goodwill

3,783

13,146

The acquisitions of Raven and Sampierana by CNH Industrial Group during the fourth quarter of 2021 led to an

increase in goodwill for Agriculture and Construction of €1.1 billion and €42 million, respectively. Goodwill related to

the acquisitions was calculated as the excess of the consideration transferred over the net assets recognized and

represents the future economic benefits arising from the other assets acquired that could not be individually

identified and separately recognized. The valuation of assets acquired and liabilities assumed has not yet been

finalized at 31 December 2021. Thus, goodwill associated with the acquisitions is subject to adjustment during the

measurement period.

Goodwill and intangible assets with indefinite useful lives are tested for impairment annually or more frequently if a

triggering event occurs.

Impairment Testing

The impairment tests are performed by comparing the carrying amount (which mainly comprises property, plant and

equipment, goodwill, brands and capitalised development expenditures) with the recoverable amount of each CGU

or group of CGUs to which goodwill has been allocated. The recoverable amount of a CGU is the higher of its fair

value less costs to sell and its value in use.

The assumptions used in the impairment test represent management’s best estimate for the period under

consideration and reflect a number of underlying assumptions (for example volumes and sales mix, gross margins,

operating costs, income tax rates, capital expenditures and changes in working capital requirements) that are

considered reasonable and sustainable and represent the best estimate of expected conditions regarding market

trends over the period considered. Expected cash flows used for the purposes of the impairment tests reflect the

current expectations regarding economic conditions and market trends as well as the Group’s initiatives for the

specific business plan periods. Cash flows reflect the CGU’s in their condition when preparing the financial

statements and exclude the estimated cash flows that might arise from restructuring plans or other structural

changes.

Expected future cash flows include a normalised terminal period to estimate the future result beyond the time

period explicitly considered in the business plans of the respective Group companies. The terminal value growth

rate is a key assumption used in determining the terminal value as it represents the annual growth of all

subsequent cash flows into perpetuity.

200

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Post-tax cash flows are discounted using a post-tax discount rate (WACC) which reflects the current market

assessment of the time value of money for the period being considered and the risks specific to the CGU under

consideration.

As well as determining the recoverable amount using the income approach, as described above, certain of the

Group companies perform additional analysis using a market approach based on multiples of comparable publicly

traded companies, such as revenue and EBITDA multiples, and for financial services CGUs, book value, tangible

book value and interest margin multiples, and by comparing to market capitalisation. Although it is clear no two

companies are entirely alike, the corporations selected as guideline companies must be engaged in the same, or a

similar, line of business or be subject to similar financial and business risks, including the opportunity for growth.

CNH Industrial Impairment Testing

During the second quarter of 2020, CNH Industrial considered whether a quantitative interim assessment of

goodwill for impairment was required as a result of the significant economic disruption caused by the COVID-19

pandemic. Based on the internal and external sources of information considered through 30 June 2020, including

the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its

impact on each of the cash-generating units, industry and market considerations, overall financial performance

(both current and projected) as well as the amount by which the recoverable amount of CNH Industrial’s cash-

generating units exceeded their respective carrying values at the date of the last quantitative assessment, CNH

Industrial, as part of the qualitative assessment performed, determined these conditions indicated that the carrying

value of the Construction cash-generating unit exceeded its recoverable amount.

Based on the assessment, CNH Industrial recognized a goodwill impairment loss of €505 million ($576 million) for

the Construction cash-generating unit, representing the total impairment of Construction goodwill. At

31 December 2020, CNH Industrial completed its annual impairment assessment and concluded there was no

impairment to goodwill for the other cash-generating units.

At 31 December 2021, the Company completed its annual assessment of goodwill excluding that related to the

acquisitions in 2021 and concluded that there was no impairment to goodwill for any of the cash-generating units.

CNH Industrial determines the recoverable amount of the cash-generating units using multiple valuation

methodologies, relying largely on an income approach but also incorporating value indicators from a market

approach with reference to the cash-generating units with the most significant allocated goodwill. Under the income

approach, CNH Industrial calculates the recoverable amount of a cash-generating unit based on the present value

of estimated future cash flows. The income approach is dependent on several critical management assumptions,

including estimates of future sales in the discrete future period, the weighted average cost of capital (discount rate)

and terminal value growth rates, and also less significant assumptions such as gross margins, operating costs,

income tax rates, capital expenditures and changes in working capital requirements. Discount rate assumptions

include an assessment of the risk inherent in the future cash flows of the respective cash-generating units.

The following discount rates before taxes at 31 December 2021 and 2020 were selected:

2021

2020 *

Agricultural

14.5%

14.2%

Construction

n.a.

13.9%

Financial Services

19.7%

21.1%

(*) For Agriculture and Financial Services, discount rate at 31 December 2020; for Construction, discount rate at 30 June 2020.

Expected cash flows used under the income approach are developed in conjunction with CNH Industrial budgeting

and forecasting processes. CNH Industrial used nine years of expected cash flows for Agriculture, and five years of

expected cash flows for Financial Services, as management believes that these periods generally reflect the

underlying market cycles for its businesses. Under the market approach, CNH Industrial estimates the recoverable

amount of the Agriculture cash-generating unit, using earnings before interest, tax, depreciation and amortization

multiples, and estimates the recoverable amount of the Financial Services cash-generating unit using book value

multiples. The multiples are derived from comparable publicly-traded companies with similar operating and

investment characteristics as the respective cash-generating units. The guideline company method makes use of

market price data of corporations whose stock is actively traded in a public, free and open market, either on an

exchange or over-the counter basis.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

201

Although it is clear no two companies are entirely alike, the corporations selected as guideline companies must be

engaged in the same, or a similar, line of business or be subject to similar financial and business risks, including

the opportunity for growth.

A terminal value is included at the end of the projection period used in the discounted cash flow analysis in order to

reflect the remaining value that each cash-generating unit is expected to generate. The terminal value represents

the present value in the last year of the projection period of all subsequent cash flows into perpetuity. The terminal

value growth rate is a key assumption used in determining the terminal value as it represents the annual growth of

all subsequent cash flows into perpetuity. The terminal value growth rate was 1.0% in 2021 and 2020 for the

Agriculture cash-generating unit, and 1.5% in 2021 and 2020 for Financial Services.

At 31 December 2021 the estimated recoverable amounts, (excluding the balance of the 2021 acquisitions)

calculated using the above method, of the Agriculture and Financial Services cash-generating units exceeded the

carrying values by approximately 294% and 75%, respectively. Thus, CNH Industrial did not recognize an

impairment for these cash-generating units.

At 31 December 2020 the estimated recoverable amounts, calculated using the above method, of the Agricultural

and Financial Services cash-generating units exceeded the carrying values by approximately 188% and 46%,

respectively. Thus, CNH Industrial did not recognize an impairment for these cash-generating units.

The results obtained for Commercial and Specialty Vehicles confirmed the absence of an impairment loss.

The sum of the recoverable amounts of CNH Industrial’s cash generating units was in excess of CNH Industrial’s

market capitalization at 31 December 2021. CNH Industrial believes that the difference between the recoverable

amount and market capitalization is reasonable (in the context of assessing whether any asset impairment exists)

when market-based control premiums are taken into consideration.

Finally, the estimates and budget data to which the above-mentioned parameters have been applied are those

determined by management based on past performance and expectations of developments in the markets in which

CNH Industrial operates. Impairment assessments inherently involve management judgments regarding a number

of assumptions such as those described above. Due to the many variables inherent in the estimation of a cash

generating unit’s recoverable amount, differences in assumptions could have a material effect on the estimated

recoverable amount and could result in a goodwill impairment loss in a future period. Circumstances and events,

which could potentially cause further impairment losses, are constantly monitored by CNH Industrial.

Ferrari Impairment Testing

The assumptions used in this process represent management’s best estimate for the period under consideration.

The estimate of the value in use of the CGU for purposes of performing the annual impairment test was based on

the following assumptions:

•The expected future cash flows covering the period from 2022 through 2025 have been derived from the

Ferrari business plan. In particular the estimate considers expected EBITDA adjusted to reflect the expected

capital expenditure. These cash flows relate to the CGU in its condition when preparing the financial

statements and exclude the estimated cash flows that might arise from restructuring plans or other structural

changes. Volumes and sales mix used for estimating the future cash flows are based on assumptions that are

considered reasonable and sustainable and represent the best estimate of expected conditions regarding

market trends for the CGU over the period considered.

•The expected future cash flows include a normalized terminal period used to estimate the future results beyond

the time period explicitly considered, which were calculated by using the specific medium/long-term growth rate

for the sector equal to 2.0 percent in 2021 (2.0 percent in 2020).

•The expected future cash flows have been estimated in Euro and discounted using a post-tax discount rate

appropriate for that currency, determined by using a base WACC of 6.84 percent in 2021 (6.83 percent in

2020). The WACC used reflects the current market assessment of the time value of money for the period being

considered and the risks specific to the CGU under consideration.

The recoverable amount of the CGU was significantly higher than its carrying amount. Furthermore, the exclusivity

of the business, its historical profitability and its future earnings prospects indicate that the carrying amount of the

goodwill will continue to be recoverable, even in the event of difficult economic and market conditions.

202

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

PartnerRe Impairment Testing

PartnerRe is treated as a single cash generating unit. The recoverable value is based on fair value, using the

weighted average of industry accepted valuation methods including price to earnings and price to tangible book

value multiples of comparable companies as well as discounted cash flow projections. In the discounted cash flow

projection the premium growth was assumed to be 3% for the year ended 31 December 2021 (2020: 3%). The

average discount rate applied was 12% for the year ended (2020: 9%). Cash flows are projected for an initial 5

year period plus a terminal valuation. The fair value calculation is categorized as a Level 3 valuation, as per the fair

value hierarchy, as it utilises both observable and unobservable inputs. A reasonably possible change in one of the

assumptions would not result in the fair value being less than the carrying value.

No impairment losses were identified by PartnerRe Group for the years ended 31 December 2021 and 2020.

A brief summary of the impairment test assumptions is provided below.

(€ million)

CNH Industrial

Ferrari

PartnerRe

Business plan period

4 - 9 years

4 years

5 years

Growth rate

1% - 2%

WACC

14.2%-21.1%

6.84%

12%

Trademark and Other intangible assets with indefinite useful lives

Other intangible assets with indefinite useful lives amounting to €518 million at 31 December 2021 (€3,621 million

at 31 December 2020) mainly includes trademarks and other intangible assets of the CNH Industrial Group

attributable to the segments Agriculture and Construction.

In 2020 the item also included brands of the FCA Group, in particular the Chrysler, Jeep, Dodge, Ram and Mopar

brands relating to the acquisition of FCA US.

These rights are protected legally through registration with government agencies and through their continuous use

in commerce. As these rights have no legal, contractual, competitive or economic factors that limit their useful lives,

they are classified as intangible assets with indefinite useful lives and are therefore not amortised but are instead

tested annually for impairment.

For the purposes of impairment testing, the assets of CNH Industrial Group are attributed to the respective cash-

generating units, while, in 2020, brands of FCA Group are tested jointly with the goodwill allocated to the North

America segment.

No impairment loss was recognized in 2021.

Development costs and other intangible assets with finite useful lives

Capitalised development costs mainly relate to the CNH Industrial Group and include both internal and external

costs that are directly attributable to the internal product development process, primarily consisting of material

costs and personnel related expenses relating to engineering, design and development, focused on content

enhancement of existing vehicles, new models and powertrain programs.

The amortization of development costs and impairment losses are reported in the income statement as Research

and development costs. Amortisation of patents, concessions, licenses and credits and other intangibles are

recognized within Cost of revenues and Selling, general and administrative expenses.

Development costs are tested for impairment at the cash-generating unit level.

In 2020, €587 million of impairment losses and asset write-offs were recognized on capitalized development costs

of which €504 million related to the FCA Group as described in Note 15 Property, plant and equipment and

€83 million related to the CNH Industrial Group, as commented below.

During the second quarter of 2020, CNH Industrial recorded an impairment loss of €15 million ($17 million) related

to its Construction dealer network and €57 million ($65 million) related to certain software costs in its Agriculture

segment. These impairments are included in Cost of sales in the Consolidated Income Statement. Moreover, during

the second quarter of 2020, CNH Industrial recorded an impairment loss of €63 million ($72 million), included in

Research and development costs, related to its Agriculture segment.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

203

Further impairment charges of €28 million ($32 million) against development costs and other intangible assets were

recognized in the year ended 31 December 2020.

15.Property, plant and equipment

(€ million)

At 31 December 2021

At 31 December 2020

Other tangible assets

7,275

32,994

Right-of-use assets

502

2,175

Total Property, plant and equipment

7,777

35,169

At 31 December 2021 the Property, plant and equipment decreased primarily due to the deconsolidation of the FCA

Group for €27,874 million.

Property, plant and equipment and the related changes during the year ended 31 December 2021 are as follows:

(€ million)

Land

Industrial

buildings

Plant,

machinery

and

equipment

Assets sold

with a buy-

back

commitment

Other

tangible

assets

Advances

and tangible

assets in

progress

Total

Balance at 31 December 2020

Original cost

1,137

10,980

59,625

2,151

5,572

5,059

84,524

Accumulated depreciation and impairment

(33)

(5,307)

(42,208)

(778)

(3,190)

(14)

(51,530)

Net carrying amount

1,104

5,673

17,417

1,373

2,382

5,045

32,994

Changes during the year (original cost)

Additions

472

586

570

377

2,100

Disposals

(3)

(6)

(203)

(330)

(634)

(1)

(1,178)

Transfer to assets held for sale

—

(7)

—

(2)

—

(16)

Deconsolidation of FCA

(861)

(7,886)

(49,661)

—

(2,561)

(4,692)

(65,661)

Change in scope of consolidation

—

160

Translation differences

120

440

—

185

808

Other changes

—

159

(434)

(138)

(301)

(677)

Total

(835)

(7,618)

(48,708)

(178)

(2,562)

(4,564)

(64,464)

Changes during the year (accumulated

depreciation and impairment)

Depreciation

—

(110)

(626)

(220)

(292)

—

(1,248)

Impairment losses

—

(5)

(2)

(4)

(3)

—

(14)

Disposals

—

199

153

326

—

684

Transfer to assets held for sale

—

Deconsolidation of FCA

3,418

34,063

—

1,927

39,444

Change in scope of consolidation

(7)

(65)

—

(59)

—

(129)

Translation differences

—

(65)

(295)

(1)

(57)

—

(418)

Other changes

—

253

417

Total

3,260

33,328

181

1,937

38,745

Balance at 31 December 2021

Original cost

302

3,362

10,917

1,973

3,010

495

20,060

Accumulated depreciation and impairment

(3)

(2,047)

(8,880)

(597)

(1,253)

(4)

(12,785)

Net carrying amount

299

1,315

2,037

1,376

1,757

491

7,275

204

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Property, plant and equipment and the related changes during the year ended 31 December 2020 are as follows:

(€ million)

Land

Industrial

buildings

Plant,

machinery

and

equipment

Assets sold

with a buy-

back

commitment

Other

tangible

assets

Advances

and tangible

assets in

progress

Total

Balance at 31 December 2019

Original cost

1,171

11,243

60,552

2,391

5,693

4,271

85,321

Accumulated depreciation and impairment

(31)

(5,232)

(41,643)

(808)

(3,046)

(13)

(50,773)

Net carrying amount

1,140

6,011

18,909

1,583

2,647

4,258

34,548

Changes during the year (original cost)

Additions

678

3,013

580

721

1,901

6,903

Disposals

(3)

(47)

(989)

(554)

(161)

(3)

(1,757)

Transfer to assets held for sale

—

(14)

(2)

—

(16)

Change in scope of consolidation

200

—

164

—

408

Translation differences

(93)

(883)

(3,847)

(10)

(414)

(380)

(5,627)

Other changes

(35)

698

(256)

(430)

(730)

(707)

Total

(34)

(263)

(927)

(240)

(121)

788

(797)

Changes during the year (accumulated

depreciation and impairment)

Depreciation

—

(362)

(3,133)

(242)

(467)

—

(4,203)

Impairment losses

(3)

(65)

(451)

(125)

(33)

(5)

(682)

Disposals

—

960

324

135

1,439

Transfer to assets held for sale

—

Change in scope of consolidation

—

(24)

(186)

—

(150)

—

(361)

Translation differences

301

2,280

213

2,799

Other changes

—

(37)

158

239

Total

(2)

(75)

(565)

(144)

(1)

(757)

Balance at 31 December 2020

Original cost

1,137

10,980

59,625

2,151

5,572

5,059

84,524

Accumulated depreciation and impairment

(33)

(5,307)

(42,208)

(778)

(3,190)

(14)

(51,530)

Net carrying amount

1,104

5,673

17,417

1,373

2,382

5,045

32,994

In 2021 additions total €2,100 million and mainly refer to the CNH Industrial Group for €1,134 million and the

Ferrari Group for €365 million. In 2020 Additions totalled €6,903 million and mainly referred to the FCA Group for

€5,600 million, the CNH Industrial Group for €1,014 million and the Ferrari Group for €382 million.

In 2021, translation differences, a net positive of €390 million, primarily reflect the foreign currency translation

impacts of the U.S. Dollar to the Euro. In 2020, translation differences, a net negative of €2,828 million, primarily

reflected the foreign currency translation impacts of the U.S. Dollar to the Euro and of the Brazilian Real to the

Euro.

In 2021 Impairment losses of €14 million mainly include €6 million for the CNH Industrial Group. In 2020

Impairment losses of €682 million mainly included €410 million for the FCA Group and €269 million for the CNH

Industrial Group.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

205

Impairment losses CNH Industrial Group

As a result of the significant decline in industry demand and other market conditions due to the economic disruption

caused by the COVID-19 pandemic, during the second quarter of 2020 CNH Industrial reviewed its current

manufacturing footprint, and reassessed the recoverability of certain assets. As a result, Agriculture and

Construction recognized an impairment loss of €94 million and €38 million, respectively, against Property, plant and

equipment acquired. Furthermore, during the second quarter of 2020, Commercial and Specialty Vehicles

recognized impairment losses of $134 million in connection with new actions identified in order to realize the asset

portfolio of vehicles sold under buy-back commitments as a result of the significant deterioration of the used vehicle

markets in which the segment operates and the consequent impact on truck residual values. Commercial and

Specialty Vehicles also recognized impairment losses of €6 million against Property, plant and equipment acquired.

The impairment losses were recognized in Cost of sales.

Commercial and Specialty Vehicles recognized an impairment loss of €2 million on Assets sold with a buy-back

commitment for the year ended 31 December 2021 ($144 million for the year ended 31 December 2020). The

losses were recognized in Cost of sales.

Other changes mainly include the reclassification of the prior year balances for Advances and tangible assets in

progress to the appropriate categories when the assets were effectively acquired and put into operation, as well as

the reclassification to Inventory of Assets sold with a buy-back commitment ($217 million) that are held for sale at

the agreement expiry date.

Impairment losses FCA Group

Non-current assets with definite useful lives included property, plant and equipment, intangible assets and assets

held for sale. Intangible assets with definite useful lives mainly consist of capitalized development expenditures

primarily related to the North America and EMEA segments. The FCA Group periodically reviewed the carrying

amount of non-current assets with definite useful lives when events or circumstances indicated that an asset may

be impaired. The recoverability of non-current assets with definite useful lives was based on the estimated future

cash flows, using the FCA Group’s current business plan, of the CGUs to which the assets related.

The global automotive industry has historically experienced significant change as a result of evolving regulatory

requirements for fuel efficiency, greenhouse gas emissions and other tailpipe emissions as well as emerging

technology changes, such as electrification and autonomous driving. FCA’s business plan could change in

response to these evolving requirements and emerging technologies or in relation to any future business plans or

strategies developed as part of partnerships and collaborations. As FCA continues to assess the potential impacts

of these evolving requirements, emerging technologies or future plans and strategies, and of operationalizing and

implementing the strategic targets set out in the business plan, including reallocation of our resources, the

recoverability of certain of FCA’s assets or CGUs could be impacted in future periods.

These uncertainties could result in either impairments of, or reductions to the expected useful lives of, these

platforms, or both. Any change in recoverability would be accounted for at the time such change to the business

plan occurs. For the year ended 31 December 2020, the impairment tests performed compared the carrying

amount of the assets included in the respective CGUs to their value-in-use. The value-in-use of the CGUs was

determined using a discounted cash flow methodology based on estimated pre-tax future cash flows attributable to

the CGUs and a pre-tax discount rate reflecting a current market assessment of the time value of money and the

risks specific to the CGUs.

During the year ended 31 December 2020, impairment losses and supplier obligations of €927 million were

recognized, across EMEA, LATAM, North America and Maserati, primarily in relation to reduced volume

expectations, product renewal activities, change in strategy for the future B-segment platform and the increase in

the CAFE fine rate applicable in North America starting with model year 2022 vehicles. The portion related to the

tangible assets (€410 million) was recognized in Cost of revenues and €504 million in Research and development

costs.

206

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Changes in right-of-use assets are as follows:

(€ million)

Land

Industrial

buildings

Plant,

machinery

and

equipment

Other

assets

Total

Balance at 31 December 2020

1,506

330

306

2,175

Depreciation

—

(93)

(22)

(76)

(190)

Additions

—

189

Disposals

—

(11)

(2)

(10)

(23)

Deconsolidation of FCA

(18)

(1,152)

(295)

(194)

(1,659)

Change in scope of consolidation

—

Translation differences

—

Other changes

—

(18)

—

(7)

(25)

Balance at 31 December 2021

333

121

502

(€ million)

Land

Industrial

buildings

Plant,

machinery

and

equipment

Other

assets

Total

Balance at 1 January 2020

1,418

391

262

2,162

Depreciation

—

(231)

(125)

(204)

(560)

Additions

341

100

308

761

Disposal

—

(64)

(5)

(9)

(78)

Change in scope of consolidation

—

Translation differences

(3)

(105)

(29)

(16)

(153)

Other changes

(67)

100

(2)

(48)

(17)

Balance at 31 December 2020

1,506

330

306

2,175

At 31 December 2021, right-of-use assets of CNH Industrial refer primarily to the following lease contracts:

industrial buildings for €123 million (€253 million at 31 December 2020), plant, machinery and equipment for

€11 million (€29 million at 31 December 2020) and other assets for €34 million (€81 million at 31 December 2020).

Short-term and low-value leases are not recorded in the statement of financial position; CNH Industrial recognizes

lease expense (€8 million and €10 million in 2021 and 2020, respectively) in the income statement for these leases

on a straight-line basis over the lease term.

At 31 December 2021 the real estate mortgaged charge securing for a loan from the Istituto per il Credito Sportivo

to Juventus for the construction of the new stadium and for the renovation of premises in the east section, amounts

to a maximum amount of €140 million.

At 31 December 2021 the Group has contractual commitments for the acquisition of property, plant and equipment

amounting to €84 million (€1,213 million at 31 December 2020, of which €1,009 million related to the FCA Group).

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

207

16.Investments and other financial assets

Investments and other financial assets at 31 December 2021 and 2020 are as follows:

At 31 December

(€ million)

2021

2020

Equity method investments

10,214

3,528

Investments at FVTOCI

1,077

531

Other investments

644

325

Total investments

11,935

4,384

Financial receivables

175

Debt securities

540

492

Derivative assets

175

830

Other financial assets

—

293

Total other investments and other financial assets

12,746

6,174

Investments

Changes in investments in 2021 and 2020 are set out below:

€ million

At 31

December

2020

Revaluations/

(Write-downs)

Acquisition

and

capitalizations

Fair value re-

measurements

Translation

differences

Change in

scope of

consolidation

Disposals and

other changes

At 31

December

2021

Investments in

joint ventures

2,233

—

(15)

(1,965)

357

Investments in

associates

1,295

2,181

934

—

396

5,434

(383)

9,857

Equity method

investments

3,528

2,251

956

—

381

3,469

(371)

10,214

Investments at

FVTOCI

531

—

578

(28)

(32)

1,077

Other

investments

325

186

213

—

(110)

644

Total

investments

4,384

2,437

1,747

(28)

432

3,327

(364)

11,935

The increase is mainly due to the entry of the investment Stellantis accounted for in accordance with the equity

method (€8,624 million), the acquisition of the 24% interest in Christian Louboutin (€562 million) and the accounting

for Faurecia shares received from Stellantis, partially offset by the derecognition of investments and other financial

assets following the deconsolidation of FCA Group (€3,145 million).

At the date of completion of the merger of PSA with and into FCA, the surviving entity, renamed Stellantis, was

accounted for by the equity method, since Exor assessed to have significant influence. On initial recognition the

investment was accounted for at cost, equal to €6,660 million, attributable to Exor's share of Stellantis's net fair

value as part of the purchase price allocation. The application of the equity method at 31 December 2021

determined a carrying amount of €8,624 million. At 31 December 2021 the purchase price allocation process has

been completed.

On 13 April 2021 Exor closed the transaction for the acquisition of the 24% interest in Christian Louboutin, for a

total consideration of €541 million. At 31 December 2021 the investment was accounted for using the equity

method, in accordance with IAS 28, on the basis of the consolidated financial information prepared in accordance

with IFRS at that date. The 2021 Consolidated Income Statement includes the share of the result for the period

1 May to 31 December 2021. The application of the equity method determined a carrying amount at

31 December 2021 of €562 million. At 31 December 2021 the purchase price allocation processed has been

completed.

208

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Investments in joint ventures

Investments in joint ventures at 31 December 2021 and 2020 are as follows:

(€ million, except percentages)

At 31 December

2021

2020

Investments in joint ventures

New Holland HFT Japan Inc.

50.00%

Turk Traktor Ve Ziraat Makineleri A.S. (Turk Traktor”)

37.50%

CNH de Mexico SA de CV

50.00%

Naveco (Nanjing Iveco Motor Co.) Ltd. (“Naveco”)

50.00%

—

FCA Bank

50.00%

—

1,738

Tofas - Turk Otomobil Fabrikasi A.S. (“Tofas”)

37.90%

—

181

Other

209

112

Total Investments in joint ventures

357

2,233

During the first half of 2021, CNH Industrial and SAIC Group completed the regulatory filings required for the

finalization of the sale of a 30.1% of Naveco (Nanjing Iveco Motor Co.) to SAIC Group which occurred in the third

quarter of 2021. The sale resulted in the discontinuation of the equity method of accounting and the recognition of a

pre-tax and after-tax gain of €7 million, which is included in the item “Gains/(losses) on disposal of investments”.

The remaining 19.9% interest in Naveco is now measured at fair value through profit or loss.

Summarized financial information is as follows:

(€ million)

At 31 December

2021

2020

Turk Traktor

Ve Ziraat

Makineleri

Naveco Ltd

Turk Traktor

Ve Ziraat

Makineleri

Cash and cash equivalents

123

176

203

Non-current assets

259

101

Current assets

182

245

170

Total assets

377

680

474

Debt

144

Other liabilities

185

485

179

Total liabilities

261

572

324

Total equity

116

108

151

(€ million)

2021

2020

Turk Traktor

Ve Ziraat

Makineleri

Naveco Ltd

Turk Traktor

Ve Ziraat

Makineleri

Net revenues

1,053

489

719

Depreciation and amortisation

Net financial income (expenses)

(9)

(2)

(6)

Profit (loss) before taxes

145

(88)

Income tax (expenses)

(28)

(9)

Profit (loss) from continuing operations

117

(116)

Profit (loss) from discontinued operations

—

Profit (loss)

117

(116)

Total Other Comprehensive income, net of tax

—

Total Comprehensive income

117

(116)

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

209

This summarized financial information may be reconciled to the carrying amount of the % interest held in the

associate as follows:

(€ million)

2021

2020

Turk Traktor

Ve Ziraat

Makineleri

Naveco Ltd

Turk Traktor

Ve Ziraat

Makineleri

Total equity

116

108

151

CNH Group's interest (%)

37.5

50.0

37.5

Pro-quota equity

Adjustments made by using the equity method

—

Carrying amount

At 31 December 2020 investments in joint ventures included also the FCA Group's joint venture FCA Bank S.p.A.,

Tofas-Turk Otomobil Fabrikasi A.S. and GAC Fiat Chrysler Automobiles Co.

FCA Bank is a joint venture with Crédit Agricole Consumer Finance S.A. (“CACF”) which operates in Europe,

primarily in Italy, France, Germany, the UK and Spain. FCA Bank provides retail and dealer financing and long-term

rental services in the automotive sector, directly or through its subsidiaries as a partner of the Group's mass-market

vehicle brands and for Maserati vehicles. On 19 July 2019, FCA and Crédit Agricole Consumer Finance agreed to

extend the term of the agreement until 31 December 2024. The agreement will be automatically renewed unless

notice of non-renewal is provided no later than three years before the end of the term. A notice of non-renewal

would trigger certain put and call rights.

The financial statements of FCA Bank as at and for the year ended 31 December 2020 had not been authorized for

issuance at the date of issuance of the 2020 FCA Consolidated Financial Statements. The most recent publicly

available financial information is included in the tables below. The most recently available information was used to

estimate FCA's share of FCA Bank net income and net equity.

The following tables include summarised financial information relating to FCA Bank:

(€ million)

At 30 June

At 31

December

2020

2019

Financial assets

24,721

26,583

Of which Cash and cash equivalents

620

585

Other assets

5,253

5,123

Financial liabilities

25,145

27,029

Other liabilities

1,454

1,506

Equity (100%)

3,375

3,171

Net assets attributable to owners of the parent

3,317

3,116

Group's share of net assets

1,659

1,558

Elimination of unrealised profits and other adjustments

(57)

Carrying amount of interest in FCA Bank1

1,738

1,501

1)Amounts at 31 December 2020 and 2019 respectively.

210

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

(€ million)

Six months

ended 30 June

Year ended 31

December

2020

2019

Interest and similar income

441

930

Interest and similar expenses

116

237

Income tax expense

171

Profit from continuing operations

632

1,338

Net profit

225

467

Net profit attributable to owners of the parent (A)

222

460

Other comprehensive income (loss) attributable to owners of the parent (B)

(21)

Total Comprehensive income attributable to owners of the parent (A + B)

201

467

Group's share of net profit1

247

229

1)Amounts for the years ended 31 December 2020 and 2019 respectively.

The following table sets forth information relating to the Group’s joint ventures.

JV Partner

Activity

Listing

Fair Value at 31 December

(€ million)

2021

2020

Turk Traktor

KOC Holding

Tractor production and import

and distribution of agricultural

equipment in Turkey

Istanbul Stock

Exchange

188

Tofas

Koc Holding

Production of light and

commercial vehicles in Turkey

Istanbul Stock

Exchange

—

764

Investments in associates

Investments in associates at 31 December 2021 and 2020 are as follows:

(€ million, except percentages)

At 31 December

2021

2020

Investments in associates

Stellantis

14.35%

8,624

—

Christian Louboutin

24.03%

562

—

The Economist

43.40%

317

299

CNH Capital Europe

49.90%

186

192

Almacantar1

35.70%

—

403

Other

168

401

Total Investments in associates

9,857

1,295

1)The balance at 31 December 2021, in compliance with IFRS 5 has been reclassified in the Consolidated Statement of Financial Position to the line Assets

held for sale.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

211

Summarized financial information relating to Stellantis, material associate of the Group, is as follows:

(€ million)

At 31 December 2021

At 31 December 20201

Non-current assets

96,971

37,734

Current assets

74,795

37,551

Total assets

171,766

75,285

Non-current liabilities

50,602

19,952

Current liabilities

64,857

31,460

Total liabilities

125,028

51,412

Total Equity

46,738

23,873

1)Data of PSA Group at 1 January 2021 before the merger with FCA Group and after the reclassification made to align previously reported data of PSA to the

presentation adopted by Stellantis.

(€ million)

FY 2021

FY 20201

Net revenues

149,419

47,656

Profit (loss) before taxes

14,392

2,916

Profit (loss) from continuing operations

13,218

2,338

Profit (loss) from discontinued operations

990

(315)

Profit (loss)

14,208

2,023

Total Other comprehensive income, net of tax

3,826

(809)

Total Comprehensive income

18,034

1,214

1)Data of PSA Group before the merger with FCA Group and after the reclassification made to align previously reported assets and liabilities of PSA to the

presentation adopted by Stellantis.

Exor's interest in the Stellantis Group at 31 December 2021 is as follows:

€ million

At 31 December 2021

Exor's Interest (%)

14.35

Share of the profit (loss) for the period 17 January - 31 December 2021

1,905

Dividend received1

550

Carrying amount

8,624

Market value

7,499

1)Eliminated from the income statement following the application of the equity method. Includes €363 million corresponding to 7,653,004 ordinary shares of

Faurecia, distributed as a part of the merger of PSA with and into FCA, €144 million as ordinary dividend and €43 million as cash from the distribution of

Faurecia.

Investments at FVTOCI

Investments at FVTOCI include:

–The fair value, for a total of €224 million, of the approximately 6.6% investment held by CNH Industrial in

Nikola Corporation ("Nikola"), made in the context of the strategic partnership with Nikola to industrialize fuel-

cell and battery electric Heavy-Duty trucks. During the second quarter of 2020, Nikola completed a business

combination with VectoIQ Acquisition Corp., a publicly-traded special purpose acquisition company. Under the

terms and conditions of the business combination, the former shareholders of Nikola received 1.901 shares of

VectoIQ for each share held in Nikola and became shareholders of VectoIQ, which, in turn, changed its name

to “Nikola Corporation”. The combined company’s shares continued to list on NASDAQ under the new ticker

symbol “NKLA”. Before the completion of the business combination, CNH Industrial increased its investment in

Nikola to $250 million. The market price of Nikola shares as of 31 December 2021 was $9.87, determining a

value of €224 million for the 25,661,448 shares held by CNH Industrial through its fully-owned subsidiary Iveco

S.p.A. During the year ended 31 December 2021, CNH Industrial recorded in Other comprehensive income a

pre-tax loss of €117 million (€118 million after-tax) from the remeasurement at fair value of the investment in

Nikola.

212

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

–The fair value of the 7,653,004 Faurecia ordinary shares received from Stellantis, as part of the merger

agreement, for a total of €320 million. In 2021 Exor recorded in Other comprehensive income a pre-tax loss of

€43 million from the remeasurement at fair value of the investment in Faurecia.

–The fair value of the Via Transportation shares for a total of €449 million. In 2021 Exor increased the

investment for €158 million and recorded in Other comprehensive income a pre-tax gain of €128 million from

the remeasurement at fair value of the investment in Via Transportation.

Other investments

Other investments at 31 December 2021 and 2020 are as follows:

At 31 December

(€ million)

2021

2020

Investments at FVTPL

634

246

Unconsolidated subsidiaries

Total other investments

644

325

Financial receivables

Non-current financial receivables mainly consist of amounts placed on deposit or otherwise pledged to secure

obligations under various commercial agreements, as well as letters of credit and other agreements.

Debt securities

Debt securities primarily relate to bonds which are issued by leading counterparties and listed on active markets as

well as mutual funds and other non-current securities.

Other securities at 31 December 2021 and 2020 are as follows:

(€ million)

At 31 December

2021

2020

Debt securities at FVTPL

398

248

Debt securities at amortised cost

120

157

Debt securities at FVTOCI

Total Debt securities

540

492

Derivative assets

Derivative assets represent the fair value of derivative financial instruments analysed in Note 27 Other financial

assets and other financial liabilities.

17.Inventories

Inventories at 31 December 2021 and 2020 are as follows:

(€ million)

At 31 December

2021

2020

Raw materials

2,050

13,109

Work-in progress

1,078

995

Finished goods

3,823

218

Total inventories

6,951

14,322

At 31 December 2021 the inventories decreased primarily due to the deconsolidation of the FCA Group for

€9,626 million and included assets of the CNH Industrial Group which are no longer subject to operating lease

arrangements or buy-back commitments and were held for sale for a total amount of €75 million (€176 million at

31 December 2020).

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

213

At 31 December 2021, the amount of Inventories of the CNH Industrial Group measured at net realizable value

(estimated selling price less the estimated costs of completion and the estimated costs necessary to make the

sale) is €968 million (€1,115 million at 31 December 2020).

In 2021 the amount of inventory write-downs recognized as an expense was €33 million (€746 million in 2020),

while amounts recognized as income from the reversal of write-downs on items sold during the year are not

significant.

18.Trade and other receivables

Trade and other receivables at 31 December 2021 and 31 December 2020 are as follows:

(€ million)

At 31 December

2021

2020

Trade receivables

725

2,274

Receivables from financing activities

17,689

18,455

Receivables from reinsurance activities

—

3,373

Total trade and other receivables

18,415

24,102

At 31 December 2021 the trade and other receivables decreased primarily due to the deconsolidation of the FCA

Group for €4,005 million.

Trade receivables

The analysis of trade receivables by due date, at 31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Due within one year

725

2,273

Due between one and five years

—

Due beyond five years

—

Total trade receivables

725

2,274

The following table shows the expected credit loss (ECL) allowance for trade receivables measured at amortised

cost at 31 December 2021 and 2020:

(€ million)

At 31 December 2021

At 31 December 2020

Current and

less than 90

days past due

90 days or

more past due

Total

Current and

less than 90

days past due

90 days or

more past due

Total

Gross amount

617

126

743

2,219

381

2,600

ECL allowance

(55)

(31)

(86)

(81)

(257)

(338)

Carrying amount

562

657

2,138

124

2,262

The movement in the allowance for expected credit losses for trade receivables is as follows:

(€ million)

2021

2020

At 1 January

338

323

Provision for expected credit losses

Change in scope of consolidation

(212)

(45)

Use and other changes

(45)

At 31 December

338

214

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Receivables from financing activities

Receivables from financing activities at 31 December 2021 and 2020 are as follows:

(€ million)

At 31 December

2021

2020

Retail

Retail financing

9,547

8,586

Finance leases

503

458

Total Retail

10,050

9,044

Wholesale

Dealer financing

7,560

8,990

Total Wholesale

7,560

8,990

Other

421

Total receivables from financing activities

17,689

18,455

The analysis of receivables from financing activities by due date, for the years ended 31 December 2021 and 2020

is as follows:

(€ million)

At 31 December

2021

2020

Due within one year

10,235

11,832

Due between one and five years

7,018

6,317

Due beyond five years

436

306

Total receivables from financing activities

17,689

18,455

The detail of the receivables from financing activities is as follows:

(€ million)

At 31 December

2021

2020

CNH Industrial

16,545

15,099

Ferrari

1,144

940

FCA

—

2,416

Total receivables from financing activities

17,689

18,455

Receivables from financing activities mainly refer to CNH Industrial that accounts for its credit risk by appropriately

providing for expected credit losses on a timely basis.

CNH Industrial provides and administers financing for retail purchases of new and used equipment and vehicles

sold through its dealer network. The terms of retail and other notes and finance leases generally range from two to

six years, and interest rates vary depending on prevailing market interest rates and certain incentive programs

offered by Industrial Activities.

Wholesale receivables arise primarily from the sale of goods to dealers and distributors and, to a lesser extent, the

financing of dealer operations. Under the standard terms of the wholesale receivable agreements, these

receivables typically have “interest-free” periods of up to twelve months and stated original maturities of up to

twenty-four months, with repayment accelerated upon the sale of the underlying equipment by the dealer.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

215

During the “interest-free” period, Financial Services is compensated by Industrial Activities based on market

interest rates. After the expiration of any “interest-free” period, interest is charged to dealers on outstanding

balances until CNH Industrial receives payment in full. The “interest-free” periods are determined based on the type

of equipment sold and the time of year of the sale. CNH Industrial evaluates and assesses dealers on an ongoing

basis as to their credit worthiness. CNH Industrial may be obligated to repurchase the dealer’s equipment upon

cancellation or termination of the dealer’s contract for such causes as change in ownership, closeout of the

business, or default. There were no significant losses in 2021 and 2020 relating to the termination of dealer

contracts.

CNH Industrial assesses and monitors the credit quality of its financing receivables based on whether a receivable

is classified as performing or non-Performing. Financing receivables are considered past due if the required

principal and interest payments have not yet been received as of the date such payments were due. Delinquency is

reported on financing receivables greater than 30 days past due. Non-performing financing receivables represent

loans for which CNH Industrial has ceased accruing finance income. These receivables are generally 90 days past

due. Finance income for non-performing receivables is recognized on a cash basis. Accrued interest is charged-off

to interest income. Interest income charged-off was not material for the year ended 31 December 2021. Interest

accrual is resumed if the receivable becomes contractually current and collection becomes probable. Previously

suspended income is recognized at that time.

The ageing of Receivables from financing activities of CNH Industrial at 31 December 2021 and

31 December 2020 is as follows:

At 31 December 2021

€ million

Total current

31-60 Days

Past Due

61-90 Days

Past Due

Total

Performing

Non-

Performing

Total

Retail

North America

5,845

—

5,855

—

5,855

Europe

—

South America

1,836

—

1,836

—

1,836

Rest of World

1,130

1,150

1,155

Total Retail

8,882

8,911

8,917

Wholesale

North America

2,065

—

2,065

—

2,065

Europe

4,454

—

4,454

—

4,454

South America

553

—

553

572

Rest of World

456

—

458

—

458

Total Wholesale

7,529

—

7,531

7,550

Other

—

Total CNH Industrial

—

16,545

216

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

At 31 December 2020

€ million

Total current

31-60 Days

Past Due

61-90 Days

Past Due

Total

Performing

Non-

Performing

Total

Retail

North America

4,991

—

5,011

—

5,011

Europe

—

South America

1,536

1,540

1,550

Rest of World

947

956

958

Total Retail

7,555

7,588

7,600

Wholesale

North America

2,218

—

2,218

2,243

Europe

4,280

—

4,280

—

4,280

South America

438

—

438

472

Rest of World

442

—

444

—

444

Total Wholesale

7,378

—

7,380

7,439

Other

—

Total CNH Industrial

—

15,099

Receivables from financing activities have significant concentrations of credit risk in the agriculture, construction

and truck business sectors. On a geographic basis, there is not a disproportionate concentration of credit risk in

any area. CNH Industrial typically retains as collateral a security interest in the equipment associated with retail

notes, wholesale notes and finance leases.

A financial asset has experienced a significant increase in credit risk when the customer shows signs of operational

or financial weakness including past dues, which requires significant collection effort and monitoring and generally

occurs when the customer becomes past due greater than 30 days. The assessment considers available

information regarding the financial stability of the customer and other market/industry data; an account is typically

considered in default when it is 90 days past due.

CNH Industrial utilizes three categories for receivables from financing activities that reflect their credit risk and how

the loan provision is determined.

Internal risk grade

IFRS 9

classification

Definition

Basis for recognition of

expected credit loss

provision

Performing

Stage 1

Low risk of default; payments are generally less

than 30 days past due

12 month expected credit

losses

Performing

Stage 2

Significant increase in credit risk; payments

generally between 31 and 90 days past due

Lifetime expected credit losses

Non-performing

Stage 3

Accounts are credit impaired and/or a legal action

has been initiated; payments generally greater

than 90 days past due

Lifetime expected credit losses

Charge-off of principal amounts of receivables outstanding are deducted from the allowance at the point when it is

estimated that amounts due are deemed uncollectible. CNH Industrial continues to engage in collection efforts to

attempt to recover the receivables. When recoveries are collected, these are recognized as income.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

217

Allowance for Credit Losses

CNH Industrial’s allowance for credit losses is segregated into two portfolio segments: retail and wholesale. A

portfolio segment is the level at which CNH Industrial develops a systematic methodology for determining its

allowance for credit losses. Further, CNH Industrial evaluates its retail and wholesale portfolio segments by class of

receivable: North America, Europe, South America and Rest of World regions. Typically, CNH Industrial’s

receivables within a geographic region have similar risk profiles and methods for assessing and monitoring risk.

These classes align with management reporting.

The Group accounts for its credit risk by appropriately providing for expected credit losses on a timely basis. In

calculating the expected credit loss rates, CNH Industrial considers historical loss rates for each category of

customers and adjusts for forward looking macroeconomic data.

In calculating the expected credit losses, CNH Industrial’s calculations depend on whether the receivable has been

individually identified as being impaired. The first component of the allowance for credit losses covers the

receivables specifically reviewed by management for which CNH Industrial has determined it is probable that it will

not collect all of the contractual principal and interest. Receivables are individually reviewed for impairment based

on, among other items, amounts outstanding, days past due and prior collection history. Expected credit losses are

measured by considering: the unbiased and probability-weighted amount; the time value of money; and reasonable

and supportable information (available without undue costs or effort) at the reporting date about past events,

current conditions and forecasts of future economic conditions. Expected credit losses are measured as the

probability-weighted present value of all cash shortfalls over the expected life of each financial asset.

The second component of the allowance for credit losses covers all receivables that have not been individually

reviewed for impairment. The allowance for these receivables is based on aggregated portfolio evaluations,

generally by financial product. The allowance for wholesale and retail credit losses is based on loss forecast

models that consider a variety of factors that include, but are not limited to, historical loss experience, collateral

value, portfolio balance and delinquency. The loss forecast models are updated on a quarterly basis. The

calculation is adjusted for forward looking macroeconomic factors. In addition, qualitative factors that are not fully

captured in the loss forecast models are considered in the evaluation of the adequacy of the allowance for credit

losses. These qualitative factors are subjective and require a degree of management judgment.

Year ended 31 December 2021

Retail

Wholesale

(€ million)

Stage 1

months

Stage 2

Lifetime

ECL

Stage 3

Lifetime

ECL

Total

Stage 1

months

Stage 2

Lifetime

ECL

Stage 3

Lifetime

ECL

Total

Opening balance

156

248

120

142

Provision (benefit)

(12)

—

Charge-off net of recoveries

(3)

—

(37)

(41)

—

Transfers

(8)

(3)

—

(1)

(8)

Foreign currency translation

and other

—

(3)

—

Ending balance

152

226

—

129

155

Receivables

Ending balance

8,683

169

8,917

7,366

133

7,550

At 31 December 2021, the allowance for credit losses includes a reduction in retail reserves primarily due to the

improved outlook for the agricultural industry and a reduced expected impact on credit conditions from the

COVID-19 pandemic. CNH Industrial continues to monitor the situation and will update the macroeconomic factors

and qualitative factors in future periods, as warranted.

Allowance for credit losses activity for the year ended 31 December 2020 is as follows:

218

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Year ended 31 December 2020

Retail

Wholesale

(€ million)

Stage 1

months

Stage 2

Lifetime

ECL

Stage 3

Lifetime

ECL

Total

Stage 1

months

Stage 2

Lifetime

ECL

Stage 3

Lifetime

ECL

Total

Opening balance

196

261

109

141

Provision (benefit)

(6)

—

Charge-off net of recoveries

(7)

—

(39)

(46)

—

(12)

Transfers

(9)

—

(2)

—

Foreign currency translation

and other

(9)

(2)

(20)

(31)

(2)

—

(1)

(3)

Ending balance

156

250

120

142

Receivables

Ending balance

7,343

222

7,600

7,187

176

7,439

Finance lease receivables mainly relate to vehicles of commercial and Specialty Vehicles, Agriculture and

Construction leased out under finance lease arrangements. The interest rate implicit in the lease is determined at

the commencement of the lease for the whole lease term. The average interest rate implicit in total finance lease

receivables varies depending on prevailing market interest rates.

The item may be analysed as follows stated gross of an allowance of €79 million at 31 December 2021 (€92 million

at 31 December 2020):

(€ million)

At 31 December

2021

2020

Less than one year

114

141

One to two years

Two to three years

Three to four years

Four to five years

More than five years

Total undiscounted receivables for future minimum lease payments

366

350

Unearned finance income

(37)

(32)

Present value of future minimum lease payments

329

318

Troubled Debt Restructuring

A restructuring of a receivable constitutes a troubled debt restructuring (“TDR”) when the lender grants a

concession it would not otherwise consider to a borrower that is experiencing financial difficulties. As a collateral-

based lender, CNH Industrial typically will repossess collateral in lieu of restructuring receivables. As such, for retail

receivables, concessions are typically provided based on bankruptcy court proceedings. For wholesale receivables,

concessions granted may include extended contract maturities, inclusion of interest-only periods, modification of a

contractual interest rate to a below market interest rate and waiving of interest and principal.

TDRs are reviewed along with other receivables as part of management’s ongoing evaluation of the adequacy of

the allowance for credit losses. The allowance for credit losses attributable to TDRs is based on the most probable

source of repayment, which is normally the liquidation of the collateral. In determining collateral value, CNH

Industrial estimates the current fair market value of the equipment collateral and considers credit enhancements

such as additional collateral and third-party guarantees.

Before removing a receivable from TDR classification, a review of the borrower is conducted. If concerns exist

about the future ability of the borrower to meet its obligations based on a credit review, the TDR classification is not

removed from the receivable.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

219

At 31 December 2021, CNH Industrial had 173 retail and finance lease contracts classified as TDRs in North

America where a court has determined the concession. The pre-modification value of these contracts was

€4 million and the post-modification value was €4 million. Additionally, CNH Industrial had 332 accounts with a

balance of €19 million in North America undergoing bankruptcy proceedings where a concession has not yet been

determined.

At 31 December 2020, CNH Industrial had 253 retail and finance lease contracts classified as TDRs in North

America where a court has determined the concession. The pre-modification value of these contracts was

€7 million and the post-modification value was €7 million. Additionally, CNH Industrial had 362 accounts with a

balance of €21 million in North America undergoing bankruptcy proceedings where a concession has not yet been

determined. As the outcome of the bankruptcy cases is determined by a court based on available assets,

subsequent re-defaults are unusual and were not material for retail and finance lease contracts that were modified

in a TDR during the previous twelve months ended 31 December 2021 and 2020.

At 31 December 2021 and 2020, CNH Industrial’s wholesale TDRs were immaterial.

Transfers of financial receivables

The CNH Industrial Group transfers a number of its financial receivables to securitization programs or factoring

transactions.

A securitization transaction entails the sale of a portfolio of receivables to a securitization vehicle. This structured

entity finances the purchase of the receivables by issuing asset-backed securities (i.e. securities whose repayment

and interest flow depend upon the cash flow generated by the portfolio). Asset-backed securities are divided into

classes according to their degree of seniority and rating: the most senior classes are placed with investors on the

market; the junior class, whose repayment is subordinated to the senior classes, is normally subscribed for by the

seller.

The residual interest in the receivables retained by the seller is therefore limited to the junior securities it has

subscribed for. In accordance with IFRS 10 – Consolidated Financial Statements, all securitization vehicles are

included in the scope of consolidation because the subscription of the junior asset-backed securities by the seller

implies its control in substance over the structured entity.

Furthermore, factoring transactions may be either with recourse or without recourse; certain without recourse

transfers include deferred payment clauses (for example, when the payment by the factor of a minor part of the

purchase price is dependent on the total amount collected from the receivables), requiring first loss cover, meaning

that the transferor takes priority participation in the losses, or require a significant exposure to the cash flows

arising from the transferred receivables to be retained. These types of transactions do not comply with the

requirements of IFRS 9 – Financial Instruments for the derecognition of the assets, since the risks and rewards

connected with collection are not substantially transferred and, accordingly, the Group continues to recognize the

receivables transferred by this means in its consolidated statement of financial position and recognizes a financial

liability of the same amount under Asset-backed financing (see Note 26 Financial Debt and other financial

liabilities). The gains and losses arising from the transfer of these assets are only recognized when the assets are

derecognized.

At 31 December 2021 and 2020, the carrying amount of such transferred financial assets not derecognized and the

related liability and the respective fair values were as follows:

220

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

(€ million)

At 31 December 2021

At 31 December 2020

Receivables

from

financing

activities

transferred

Other

financial

assets

transferred

Total

Receivables

from

financing

activities

transferred

Other

financial

assets

transferred

Total

Carrying amount of assets

11,072

954

12,026

10,786

1,069

11,855

Carrying amount of the related liabilities

(8,792)

(969)

(9,761)

(8,656)

(1,060)

(9,716)

Liabilities for which the counterparty has the

right to obtain relief on the transferred

assets:

Fair value of the assets

11,118

954

12,072

10,857

1,069

11,926

Fair value of the liabilities

(8,700)

(968)

(9,668)

(8,662)

(1,059)

(9,721)

Net position

2,418

(14)

2,404

2,195

2,205

Other financial assets transferred also include the cash with a pre-determined use restricted to the repayment of

the securitization debt.

CNH Industrial has discounted receivables and bills without recourse having due dates beyond 31 December 2021

amounting to €170 million (€286 million at 31 December 2020, with due dates beyond that date), which refer to

trade receivables and other receivables for €157 million (€275 million at 31 December 2020), and receivables from

financing activities for €12 million (€11 million at 31 December 2020).

In 2020 the FCA Group, consolidated line-by-line, transferred certain of its financial, trade and tax receivables,

mainly through factoring transactions. The carrying amount of transferred financial assets not derecognized and the

related liabilities at 31 December 2020 was as follows:

(€ million)

Trade

receivables

Receivables

from financing

activities

Total

At 31 December 2020

Carrying amount of the assets transferred and not derecognized

Carrying amount of the related liabilities

19.Investments of reinsurance companies

Investments of reinsurance companies at 31 December 2021 and 31 December 2020 are as follows:

(€ million)

At 31 December

2021

2020

Fixed maturities, at fair value

—

10,421

Funds held by reinsured companies

—

580

Equities, at fair value

—

1,219

Short-term investments, at fair value

—

339

Accrued investment income, at fair value

—

Other invested assets

—

1,788

Total investments of reinsurance companies

—

14,422

The amounts at 31 December 2021, in compliance with IFRS 5, have been reclassified in the Consolidated

Statement of Financial Position at the line Liabilities held for sale.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

221

20.Cash and cash equivalents

Cash and cash equivalents at 31 December 2021 and at 31 December 2020 are as follows:

(€ million)

At 31 December

2021

2020

Cash at banks

6,997

18,701

Money market securities and other cash equivalents

16,133

Restricted cash

893

727

Total cash and cash equivalents

7,905

35,561

Cash and cash equivalents include cash at bank and other easily marketable securities that are readily convertible

into cash and are subject to an insignificant risk of changes in value.

At 31 December 2021 restricted cash includes €756 million of CNH Industrial Group mainly related to bank

deposits that may be used exclusively for the repayment of the debt relating to securitizations classified as Asset-

backed financing.

The Ferrari Group may be subject to restrictions which limit its ability to use cash in relation to its interest in Ferrari

International Cars Trading (Shanghai) Co. Ltd. In particular, cash held in China is subject to certain repatriation

restrictions and may only be repatriated as a repayment of payables or debt, or through a payment of dividends or

capital distributions. The Ferrari Group does not believe that such transfer restrictions have any adverse impacts on

its ability to meet liquidity requirements. Cash held in China by Ferrari Group at 31 December 2021 amounted to

€90 million (€56 million at 31 December 2020).

Cash collected from the settlement of receivables under securitization programs of Ferrari Group is subject to

certain restrictions regarding its use and is principally applied to repay principal and interest of the related funding.

Such cash amounted to €48 million at 31 December 2021 (€37 million at 31 December 2020).

At 31 December 2021 the cash and cash equivalents decreased primarily due to the deconsolidation of the FCA

Group for €22,514 million.

21.Equity

Share capital

On 13 December 2021, 124,717,132 Special Voting Shares A were issued to Giovanni Agnelli BV under the Exor

loyalty voting scheme. At 31 December 2021 Giovanni Agnelli BV owns 85.44% of the voting rights on Exor’s

outstanding capital

EXOR N.V. adopted a loyalty voting structure designed to incentivize long-term share ownership, on the basis of

which for each EXOR N.V. ordinary share held without interruption for a period of five years, shareholders will be

entitled to five voting rights at the end of that period, and for each EXOR N.V. ordinary share held without

interruption for a period of ten years, shareholders will be entitled to ten voting rights at the end of that period.

At 31 December 2021 the total issued capital of EXOR N.V. was equal to Euro 7,398,685, divided into

no. 241,000,000 shares each with a nominal value of Euro 0.01 and no.124,717,132 Special Voting Shares A each

with a nominal value of Euro 0.04.

AGM resolution

The Exor Annual General Meeting of 27 May 2021 adopted the 2020 Annual Report and approved the payment of

a dividend of €0.43 on each issued and outstanding ordinary share, for a total of €100 million. The Annual General

Meeting also approved the extension of the authorization for the purchase and disposal of Exor's ordinary shares

on the market for 18 months from the date of the Shareholders' resolution, up to a maximum number of shares not

to exceed the limit set by law, with a maximum disbursement of €500 million.

222

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Treasury stock

At 31 December 2021, 9,291,244 Exor ordinary shares with a nominal value of €0.01 per share are held as

treasury stock (9,993,244 at 31 December 2020). The movements in treasury stock are related to the shares

utilized under the Company’s stock option plans.

Other comprehensive income

Other comprehensive income for the years ended 31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Items that will not be reclassified to the Consolidated Income Statement in subsequent periods:

Gains (losses) on remeasurement of defined benefit plans

154

(19)

Share of gains (losses) on remeasurement of defined benefit plans for equity method

investees

252

—

Gains (losses) on financial assets at FVTOCI

(28)

108

Items relating to discontinued operations

197

(106)

Total items that will not be reclassified to the Consolidated Income Statement in

subsequent periods, before tax effect (B1)

575

(17)

Items that may be reclassified to the Consolidated Income Statements in subsequent periods:

Gains (losses) on cash flow hedging instruments arising during the period

—

109

Gains (losses) on cash flow hedging instruments reclassified to the income

Statement

—

(42)

Gains (losses) on cash flow hedging instruments

—

Foreign exchange translation gains (losses) arising during the period

1,061

(1,552)

Foreign exchange translation gains (losses) reclassified to the income

Statement

—

Foreign exchange translation gains (losses)

1,072

(1,552)

Share of other comprehensive income of equity method investees arising during the period

288

Share of other comprehensive income (loss) of equity method investees

reclassified to the income statement

(27)

(29)

Share of other comprehensive income (loss) of equity method investees

261

(1)

Items relating to discontinued operations

2,193

(2,930)

Total Items that may be reclassified to the Consolidated Income Statement in subsequent

periods, before tax effect (B2)

3,526

(4,416)

Total Other Comprehensive Income, before tax effect (B1)+(B2)=(B)

4,101

(4,433)

Tax effect

(20)

Tax effect - discontinued operations

(30)

Total Other Comprehensive Income (Loss), net of tax

4,088

(4,437)

With reference to the defined benefit plans of the Group, the gains and losses arising from the remeasurement

mainly include actuarial gains and losses arising during the period, the return on plan assets (net of interest income

recognized in the income statement) and any changes in the effect of the asset ceiling.

The tax effect relating to other comprehensive income for the years ended 31 December 2021 and 2020 is as

follows:

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

223

At 31 December

(€ million)

2021

2020

Pre-tax

balance

Tax benefit

(expense)

Net-of-tax

balance

Pre-tax

balance

Tax benefit

(expense)

Net-of-tax

balance

Gains (losses) on remeasurement

of defined benefit plans

406

(20)

386

(19)

Gains (losses) on financial assets at

FVTOCI

(28)

—

(28)

108

—

108

Gains (losses) on cash flow

hedging instruments

—

(13)

Foreign exchange translation gains

(losses)

1,072

—

1,072

(1,552)

—

(1,552)

Share of other comprehensive

income (loss) of equity method

investees

261

—

261

(1)

—

(1)

Items relating to discontinued

operations

2,390

2,397

(3,036)

(30)

(3,066)

Total Other Comprehensive

Income (Loss)

4,101

(13)

4,088

(4,433)

(4)

(4,437)

Non-controlling interests

Non-controlling interests at 31 December 2021 and 2020 is as follows:

(€ million)

Attributable to non-controlling interests

Net Result

Equity

At 31 December 2021

FCA

71.46%

—

CNH Industrial

72.94%

1,104

5,501

Ferrari

75.83%

632

1,678

PartnerRe1

—

177

GEDI Gruppo Editoriale

10.38%

(3)

Shang Xia Trading

22.70%

(3)

—

Juventus

36.23%

(78)

110

Exor Seeds

20.04%

123

Total

1,737

7,611

At 31 December 2020

FCA

71,46%

18,448

CNH Industrial

72,90%

(426)

4,123

Ferrari

75,95%

463

1,360

PartnerRe1

—

522

GEDI Gruppo Editoriale

10.38%

(1)

Shang Xia Trading

22.70%

—

(1)

Juventus

36.23%

(56)

Exor Seeds

23.66%

Total

24,570

(1)Related to preferred shares.

The carrying value of the preferred shares of PartnerRe, recognized in non-controlling interests, at

31 December 2020 was €522 million or $640 million.

224

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

22.Share-based compensation

The subsidiaries of the Group have various stock option plans which amongst others include the award of

performance share units (“PSU”) and restricted share units (“RSU”). The PSU and RSU represent the right to

receive one common share of the relevant entity. PSU awards have financial performance targets whilst the RSU

awards have a service condition only. The total number of shares that will be issued may therefore vary from the

original award. During the year ended 31 December 2021 and 2020 the Group recognized share-based

compensation expense as follows:

Exor

2012 Long-term incentive plans

The plan, denominated “Company Performance Stock Options”, vested 1,019,200 options of which 450,000 to the

Chairman and Chief Executive Officer of the company and 569,200 to other beneficiaries; this allows them to

purchase a corresponding number of Exor ordinary shares at a price per share of €16.59 and €16.62, respectively.

The options were exercisable until the end of 2021. At the end of 2020, the options outstanding, vested and not

exercised, were 450,000 granted to the Chairman and Chief Executive Officer of the Company and 252,000 to

other beneficiaries. During 2021, all the options outstanding at 31 December 2020 have been exercised.

Stock Option Plan Exor 2016

The Stock Option Plan Exor 2016 has a maximum of 3,500,000 options corresponding to the same number of

shares. The number of stock options outstanding at 31 December 2021, of which 1,173,679 exercisable, is

2,937,135 (average exercise price of €32.38 per share).

Changes during 2021 and 2020 were as follows:

2021

2020

Number of

options

Weighted

average

exercise

price

(€)

Number of

options

Weighted

average

exercise

price

(€)

Outstanding at the beginning of the year

2,937,135

32.38

2,937,135

32.38

Granted during the year

—

Forfeited during the year

—

Exercised

—

Expired

—

Outstanding at the end of the year

2,937,135

32.38

2,937,135

32.38

Exercisable at the end of the year

1,173,679

586,839

The cost of the plan is as follows:

(€ thousand)

2021

2020

Options

outstanding

Cost

Options

outstanding

Cost

Chairman and Chief Executive Officer of Exor N.V.

2,013,950

1,474

2,013,950

3,596

Key employees

530,727

395

530,727

1,027

Key employees of companies in the Holdings System

392,458

297

392,458

725

Total

2,937,135

2,166

2,937,135

5,348

The cost for the year recorded in the stock option reserve amounts to €2,166 thousand (€5,348 thousand in 2020)

including €1,474 thousand (€3,596 thousand in 2020) classified as compensation to the Chairman and Chief

Executive Officer.

All the Exor share-based incentive plans are serviced exclusively by treasury stock without any new share issues

and therefore do not have any dilutive effect on issued capital.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

225

CNH Industrial

CNH Industrial’s equity awards are governed by several plans: i) CNH Industrial N.V. Equity Incentive Plan (“CNH

Industrial EIP”) and CNH Industrial N.V. Directors’ Compensation Plan (“CNH Industrial DCP”).

As part of CNH Industrial's demerger of the Iveco Group completed on 3 January 2022 (the "Demerger"), any

awards outstanding under the CNH Industrial EIP, and held by directors, officers and other employees vesting in

2022 were accelerated in December 2021 and the related equity incentives were issued by CNH Industrial in CNH

Industrial stock. As a result of the Demerger, remaining outstanding awards vesting in 2023 and 2024 were

converted to the entity the participant is employed with post spin. As such, for Iveco Group employees, the

underlying stock awards under the CNH Industrial EIP vesting in 2023 and 2024 were converted at the effective

date of the Demerger, subject to its terms, to Common Shares of Iveco Group N.V. The conversion of the CNH

Industrial EIP includes appropriate adjustment mechanisms to ensure that the value of the unvested awards

granted to all the beneficiaries under such plan remain unchanged pre and post demerger for employees in both

the Iveco Group N.V. and CNH Industrial N.V.

Performance Share Units

2017-2019 Long-Term Incentive Plan

In December 2017, CNH Industrial cancelled all Performance Share Units ("PSU’s") issued in 2014, 2015 and 2016

and issued a grant of PSU’s to key executive officers and select employees, with financial performance goals

covering the three-year period from 1 January 2017 to 31 December 2019. The performance goal was a market

condition with a payout schedule ranging from 0% to 130%. In 2018 and 2019, prorated share amounts covering

performance through this same period were issued to select new employees entering the plan. In 2018 and 2019,

0.6 million and 0.4 million additional PSU's were granted. On 28 February 2020 all PSU’s associated with these

grants failed to meet their performance goals and were therefore forfeited. CNH Industrial still incurred the expense

associated with these awards but the awards themselves were never issued to their recipients.

2021-2023 Long-Term Incentive Plan

In February 2020, the Board of Directors approved the 2020-2024 Long-Term Incentive Plan under the EIP.

In December 2020, CNH Industrial issued a new grant of PSUs to its key executive officers and select employees

with the financial performance goals covering a three-year period culminating with a cliff vest date of

28 February 2024. Two internal financial metrics, Industrial ROIC (the ratio of Adjusted EBIT (after-tax) over

Average Industrial Invested Capital) and Adjusted EPS (the net income (loss) excluding any non-recurring items

(after-tax), divided by the weighted average outstanding number of common shares on a fully diluted basis),

weighted 50% each, and a multiplier-based on CNH Industrial’s percentile ranking of Total Shareholder Return

among a comparator group, will determine the total PSUs earned. The internal financial metrics have a payout

factor of up to 200% and the market based TSR determinant has a payout factor of 125%. These metrics are

considered performance vesting conditions. As such, compensation cost will be accrued based on whether it is

considered probable that the performance conditions will be satisfied. At 31 December 2020 CNH Industrial issued

7 million PSU's. The total number of shares that will eventually be issued may vary from the original estimate due

to forfeiture or the level of achievement of the performance goals.

The fair value of the December 2020 PSU award group was calculated by using the CNH Industrial stock price on

the grant date adjusted for the present value of future dividends that would not be received during the vesting

period. The weighted average fair value of the awards that were issued in 2020 is $10.83 per share. The December

2020 PSU awards were issued on 4 December 2020 to key executive officers and select employees and on

14 December 2020 to the Chair of CNH Industrial.

During 2021, CNH Industrial issued an additional 3 million PSUs to key executive officers and select employees.

The weighted average fair value of the awards that were issued in 2021 was $13.15 per share.

The following table reflects the activity of PSUs under the 2020-2024 Long-Term Incentive Plan for the year ended

31 December 2021 and 2020.

226

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

2021

2020

Number of

Weighted

average fair

value at grant

date ($)

Number of

Weighted

average fair

value at grant

date ($)

Outstanding shares unvested at the beginning of the

year

6,931,030

10.83

4,883,479

7.82

Granted

3,035,985

13.15

6,931,030

10.83

Forfeited/cancelled

(545,790)

10.83

(4,883,479)

7.82

Vested

—

Outstanding shares unvested at the end of the year

9,421,225

11.55

6,931,030

10.83

Restricted Share Units

In 2019, 2020 and 2021 CNH Industrial issued approximately 0.8 million, 8 million, and 1 million Restricted Share

Units (“RSUs”) to key executive officers and select employees with a weighted average fair value of $9.95, $10.90

and $14.42 per share, respectively. The fair value of the award is measured using the CNH Industrial N.V. stock

price on the grant date adjusted for the present value of future dividends that employees will not receive during the

vesting period. The RSUs vest upon a time-based service requirement.

2017-2019 Long-Term Incentive Plan

On 3 April 2019, 536 thousand RSUs were issued to select key executive officers with a weighted average fair

value of $10.18 measured using the stock price on the grant date adjusted for the present value of future dividends

that would not be received during the vesting period. The grant had a cliff vest date of 1 February 2021 for all

awards except for 32 thousand RSUs, which vested on 30 June 2020. Of the remaining 490 thousand RSUs,

162 thousand were forfeited in the second quarter of 2020. The remaining 296 thousand RSUs vested on

1 February 2021.

2021-2023 Long-Term Incentive Plan

On 4 December 2020, CNH Industrial issued two separate RSU grants to key executive officers and select

employees. Under the first RSU grant, 1.7 million RSUs were awarded to select employees with a weighted

average fair value of $11.43. These awards vested on 31 December 2020. Under the second RSU grant, 5 million

RSUs were awarded to select employees and are set to vest in three equal instalments over a three-year period.

The first tranche which consisted of 1.7 million RSUs is set to vest on 28 February 2022. The second and third

tranches are set to vest on 28 February 2023 and 28 February 2024, respectively. The weighted average fair

values for the December 2020 three tranche award group are $11.23, $11.02, and $10.82, respectively.

On 14 December 2020, CNH Industrial issued 120 thousand RSUs to the Chair of CNH Industrial, of which

17 thousand vested on 31 December 2020. The weighted average fair value for these awards is $10.96. The

remaining 103 thousand RSUs vest in three equal instalments on 28 February 2022, 2023, and 2024, respectively.

The fair values for these awards are $10.76, $10.55 and $10.35, respectively.

During 2021, CNH Industrial issued an additional 1.5 million RSUs to select employees and key executive officers.

Of the awards that were issued, 1.2 million RSUs are set to vest in three equal instalments over a three-year

period. The first tranche, which consists of 0.4 million RSUs, was set to vest on 30 April 2022. The second and third

tranches are set to vest on 30 April 2023 and 30 April 2024, respectively. The weighted average fair value of these

awards are $14.08 per share for the first tranche, $13.89 per share for the second tranche, and $13.71 per share

for the third tranche. The remaining awards issued in 2021 had a cumulative weighted average fair value of $16.71.

In 2021, CNH Industrial, in anticipation of the Demerger, accelerated the vesting of awards with a vest date of

30 April 2022 to 1 December 2021, excluding shares awarded to the CEO and Chairperson. As a result CNH

Industrial recorded $6 million of expense due to the acceleration of these awards. The weighted average fair value

of the shares vested during 2021 was $11.59 per share.

The following table reflects the activity of RSUs under the 2020-2024 Long-Term Incentive Plan for the year ended

31 December 2021 and 2020.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

227

2021

2020

Restricted

Weighted

average grant-

date fair value

($)

Restricted

Weighted

average grant-

date fair value

($)

Outstanding shares unvested at the beginning of

the year

5,443,197

10.95

1,842,667

11.69

Granted

1,464,305

14.42

7,727,755

10.90

Forfeited

(396,086)

11.88

(380,221)

10.79

Vested

(2,141,337)

11.59

(3,747,004)

11.22

Outstanding shares unvested at the end of the year

4,370,079

11.72

5,443,197

10.95

CNH Industrial N.V. Directors' Compensation Plan ("CNH Industrial DCP")

There were 0.2 million common shares authorized for issuance under the CNH Industrial DCP. No stock options

were issued under this plan in 2021 or 2020 and at 31 December 2021, no stock options were outstanding under

the CNH Industrial DCP.

The following table sets forth information related to the income statement expense recognized and to be

recognized in relation to the CNH Industrial’s equity awards:

(€ million)

Years ended 31 December

2021

2020

Total expense

Unrecognized expense

164

112

Weighted average remaining period over which expense will be recognized (years)

2.1

2.8

Ferrari

The Group has several equity incentive plans under which a combination of performance share units (“PSUs”) and

retention restricted share units (“RSUs”), which each represent the right to receive one Ferrari common share,

have been awarded to the Executive Chairman, the Chief Executive Officer (“CEO”), members of the Ferrari

Leadership Team ("FLT"), formerly Senior Management Team (“SMT”) and other key employees of the Group.

Equity Incentive Plan 2016 - 2020

In the first quarter of 2021, 212,243 PSU awards vested (representing 100 percent of the target PSU awards) as a

result of Ferrari’s third place ranking in Total Shareholder Return (“TSR”) within the defined Peer Group for the

performance period from 2016 to 2020, and 31,120 RSU awards vested upon achievement of the related service

conditions. As a result, 243,363 common shares, which were previously held in treasury, were assigned to

participants of the plan in the first quarter of 2021. There are no further awards outstanding for the Equity Incentive

Plan 2016-2020.

Equity incentive plan 2019-2021

Under the Equity Incentive Plan 2019-2021, approximately 174 thousand PSUs and 111 thousand RSUs, which

each represent the right to receive one Ferrari common share, were awarded to the Executive Chairman, the

former CEO, members of the FLT and other key employees of the Group (Equity Incentive Plan 2019-2021).

228

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

PSU

Performance conditions

TSR Target - 50 percent vest based on the achievement of the TSR ranking of Ferrari

compared to an industry specific peer group of eight;

EBITDA Target - 30 percent vest based on the achievement of an EBITDA target

determined by comparing Adjusted EBITDA to the Adjusted EBITDA targets derived

from the business plan

Innovation Target - 20 percent vest based on the achievement of defined objectives for

technological innovation and the development of the new model pipeline over the

performance period

Performance Period

2019 to 2021

Vesting Dates

The awards vest in 2022, except for the awards to the former CEO which vest in three

tranches of 12 percent, 12 percent and 76 percent in 2020, 2021 and 2022,

respectively

Vested

17,572 in 2020, 80,510 in the first quarter 2021, 86,331 in the first quarter of 2022

RSU

Vesting Dates

The awards vest in 2022, except for those awarded to the former CEO, which vest in

three equal tranches in 2020, 2021 and 2022

Vested

18,892 in 2020, 32,694 in the first quarter of 2021, 75,857 in the first quarter of 2022

Equity Incentive Plan 2020-2022

Under a new equity incentive plan approved in 2020 (“Equity Incentive Plan 2020-2022”) Ferrari awarded

approximately 60 thousand 2020-2022 PSUs and approximately 48 thousand 2020-2022 RSUs to the Executive

Chairman, members of the SMT and other key employees of the Group. The PSUs and RSUs cover the three-year

performance and service periods from 2020 to 2022.

PSU

Performance conditions

TSR Target - 50 percent vest based on the achievement of the TSR ranking of Ferrari

compared to an industry specific peer group of eight;

EBITDA Target - 30 percent vest based on the achievement of an EBITDA target

determined by comparing Adjusted EBITDA to the Adjusted EBITDA targets derived

from the business plan

Innovation Target - 20 percent vest based on the achievement of defined objectives for

technological innovation and the development of the new model pipeline over the

performance period

Performance Period

2020 to 2022

Vesting Dates

The awards vest in 2023 and the total number of shares assigned upon vesting

depends on the level of achievement of the targets

RSU

Vesting Dates

The awards vest in 2023, subject to the recipient’s continued employment with the

Company at the time of vesting

Equity Incentive Plan 2021-2023

Under the Equity Incentive Plan 2021-2023 approved in 2021, the Company awarded approximately 50 thousand

2021-2023 PSUs and approximately 41 thousand 2021-2023 RSUs to the Executive Chairman, members of the

FLT and other key employees of the Group. The PSUs and RSUs cover the three-year performance and service

periods from 2021 to 2023.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

229

PSU

Performance conditions

TSR Target - 50 percent vest based on the achievement of the TSR ranking of Ferrari

compared to an industry specific peer group of eight;

EBITDA Target - 30 percent vest based on the achievement of an EBITDA target

determined by comparing Adjusted EBITDA to the Adjusted EBITDA targets derived

from the business plan

Innovation Target - 20 percent vest based on the achievement of defined objectives for

technological innovation and the development of the new model pipeline over the

performance period. Each target is settled independently of the other targets.

Performance Period

2021 to 2023

Vesting Dates

The awards vest in 2024 and the total number of shares assigned upon vesting

depends on the level of achievement of the targets

RSU

Vesting Dates

The awards vest in 2024, subject to the recipient’s continued employment with the

Company at the time of vesting

Supplementary information relating to the equity 2021-2023 incentive plans is summarized below.

TSR Target

The number of PSUs with a TSR Target that vest under the equity incentive plans is based on the Company’s TSR

performance over the relevant performance period compared to an industry-specific peer group as summarized

below.

Ferrari TSR Ranking

% of Target Awards that Vest(1)

150%

120%

100%

75%

50%

The defined peer groups (including Ferrari) for the TSR Target are presented below.

Equity Incentive Plan 2021-2023

Ferrari

Burberry

Hermes

LVMH

Moncler

Richemont

Kering

Aston Martin

EBITDA Target

The number of PSUs with an EBITDA Target that vest under the Equity Incentive Plan 2021-2023 is determined by

comparing Adjusted EBITDA to the Adjusted EBITDA targets derived from the Group’s business plan, as

summarized below.

Actual Adjusted EBITDA Compared to Business Plan

% of Awards that Vest

+10%

140%

+5%

120%

Business Plan Target

100%

-5%

80%

<-5%

Fair values and key assumptions

The fair value of the PSU awards used for accounting purposes was measured at the grant date using a Monte

Carlo Simulation model. The fair value of the RSU awards was measured using the share price at the grant date

adjusted for the present value of future distributions which employees will not receive during the vesting period.

The fair value of the PSUs and RSUs that were awarded under the equity incentive plans, which is determined

based on actuarial calculations that apply certain assumptions and take into consideration the specific

characteristics of the awards granted, is summarized in the following table.

230

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Equity Incentive plan

2019-2021

2020-2022

2021-2023

PSUs

€110.57-€111.64

€136.06

€130.42

RSUs

€119.54-€120.56

€139.39

€171.86

The Key assumption utilized to calculate the grant-date fair values of the PSUs that were awarded under the equity

incentive plans are summarized below:

Equity Incentive Plan

2019-2021

2020-2022

2021-2023

Key assumptions

Grant date share price

€122.60

€142.95

€175.80

Expected volatility

26.50%

26.6%

27.0%

Dividend yield

0.83%

0.8%

0.75%

Risk-free rate

The expected volatility was based on the observed volatility of the new peer group. The risk-free rate was based on

the iBoxx sovereign Eurozone yield.

Outstanding share awards

Changes in the outstanding number of PSU and RSU share awards under all the Ferrari equity incentive plans are

as follows:

Outstanding PSU Awards

Outstanding RSU Awards

Balance at 31 December 2020

414,839

159,063

Granted1

49,861

41,460

Forfeited

(19,775)

(13,048)

Vested

(292,753)

(63,814)

Balance at 31 December 2021

152,172

123,661

1.Granted under the Equity Incentive Plan 2021-2023.

Share-based compensation expense

The following table sets forth information related to the income statement expense recognized and to be

recognized in relation to the PSU and RSU awards:

(€ million)

Years ended 31 December

2021

2020

Total expense

Unrecognized expense

In 2021 the Group also recognized share-based compensation expense of €2.2 million as part of commercial

agreements with certain suppliers.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

231

23.Provisions for employee benefits

The Group’s provisions and net assets for employee benefits are as follows:

(€ million)

At 31 December

2021

2020

Present value of defined benefit obligations:

Pension plans

2,155

26,732

Healthcare and life insurance plans

255

2,573

Other post-employment benefits

321

1,104

Total present value of defined benefit obligations

2,730

30,409

Fair value of plan assets on pension plan

(1,626)

(21,879)

Fair value of plan assets of healthcare and life insurance plans

(115)

(118)

Asset ceiling

Total net defined benefits plan

1,007

8,439

of which:

Net defined benefit liability (A)

1,039

9,212

(Defined benefit plan assets)

(32)

(773)

Other provisions for employees (B)

553

1,459

Total provisions for employee benefits (A) + (B)

1,592

10,671

The Group provides post-employment benefits for certain of its active employees and retirees, either directly or by

contributing to independently administered funds. The way these benefits are provided varies according to the

legal, fiscal and economic conditions of each country in which the Group operates.

The Group provides post-employment benefits under defined contribution and defined benefit plans.

The plans are classified by the Group on the basis of the type of benefit provided as follows: pension benefits,

healthcare plans, life insurance plans, and other post-employment benefits.

Moreover, the Group provides post-employment benefits, such as pension or healthcare benefits, to its employees

under defined contribution plans. In this case, the Group pays contributions to the publicly or privately administered

insurance plans on a legally mandatory, contractual, or voluntary basis. By paying these contributions the Group

fulfils all of its obligations. The Group recognises the cost for defined contribution plans over the period in which the

employee renders service. In 2021 this cost amounts to €541 million (€1,803 million in 2020, of which

€1,308 million related to the FCA Group).

Pension benefits

Group companies in the United States and Canada sponsor both non-contributory and contributory defined benefit

pension plans. Liabilities arising from these plans are usually funded by contributions made by the Group and, at

times by their employees, into legally separate trusts which independently manage the assets servicing the plan

from which the employee benefits are paid.

The Group’s funding policy for defined benefit pension plans is to contribute the minimum amounts required by

applicable laws and regulations. Occasionally, additional discretionary contributions in excess of these legally

required are made to achieve certain desired funding levels.

To the extent that a fund is over funded, the Group is not required to make further contribution to the plan in respect

of minimum performance requirements so long as the fund is in surplus. In the U.S. these excess amounts are

tracked, and the resulting credit balance can be used to satisfy minimum funding requirements in future years.

In the fourth quarter of 2020, CNH Industrial signed group annuity contracts to transfer the outstanding pension

benefit obligations related to certain retirees and beneficiaries within the U.S. plans. In connection with these

transactions, €449 million of plan obligations were transferred along with €448 million of plan assets; the related

non-cash settlement impact recognized in the income statement in the fourth quarter of 2020 was immaterial.

232

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The expected benefit payments for pension plans are as follows:

(€ million)

2022

2023

2024

2025

2026

2027-2031

Expected benefit payments

Changes in pension plans are the following:

(€ million)

At 31 December

2021

2020

Defined

benefit

obligation

Fair

value of

plan

assets

Asset

ceiling

(Net asset)

Net

liability

obligation

Defined

benefit

obligation

Fair

value of

plan

assets

Asset

ceiling

(Net asset)

Net

liability

obligation

Amounts at

1 January

26,732

(21,879)

4,880

27,823

(22,734)

5,122

Included in the

income statement

—

544

(116)

—

428

Included in Other

comprehensive

income:

Actuarial (gains)

losses from:

- demographic

assumptions

(11)

—

(11)

—

- financial

assumptions

(54)

—

(54)

2,053

—

2,053

- other

(36)

—

(28)

(7)

—

(4)

(11)

Return on assets

—

(65)

—

(65)

—

(2,098)

—

(2,098)

Change in the

effect of limiting net

assets

—

Exchange

differences

123

(103)

(2,087)

1,680

(2)

(409)

Other changes:

Contribution by

employer

—

(51)

—

(51)

—

(181)

—

(181)

Contribution by plan

participants

(6)

—

(8)

—

Benefits paid

(89)

—

(21)

(1,613)

1,577

—

(36)

Deconsolidation of

FCA

(24,361)

20,258

(17)

(4,120)

—

(36)

Transfer to

Liabilities held for

sale

(187)

151

—

(36)

—

Other changes

—

(2)

(1)

—

Amounts at

31 December

2,155

(1,626)

546

26,732

(21,879)

4,880

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

233

Amounts recognized in the Consolidated Income Statement were as follows:

(€ million)

At 31 December

2021

2020

Current service cost

202

Interest expenses

810

Interest income

(15)

(677)

Other administrative costs

Past service costs (income) and (gains) losses arising from settlements

—

Total recognized in the Consolidated Income Statement

428

The fair value of plan assets by class is as follows:

(€ million)

At 31 December

2021

2020

Amount

of which have

quoted market

price in an

active market

Amount

of which have

quoted market

price in an

active market

Cash and cash equivalents

862

807

US equity securities

—

1,220

1,219

Non-US equity securities

—

670

Commingled fund

—

1,480

506

Equity instruments

—

3,370

2,395

Government securities

2,861

840

Corporate bonds (including convertible

and high-yield bonds)

—

5,813

—

Other fixed income securities

—

1,488

185

Fixed income securities

10,162

1,025

Private equity funds

—

2,332

—

Commingled funds

—

Mutual funds

1,360

—

1,386

—

Real estate funds

—

1,173

Hedge funds

—

2,199

Investment funds

1,360

—

7,160

131

Insurance contracts and other

185

—

325

—

Total fair value of plan assets

1,626

21,879

4,358

Non-U.S. equity securities are invested broadly in developed international and emerging markets. Debt instruments

are fixed income securities which comprise primarily long-term U.S. Treasury and global government bonds, as

well as U.S., developed international and emerging market companies’ debt securities diversified by sector,

geography and through a wide range of market capitalisation. Commingled funds include common collective trust

funds, mutual funds and other investment entities. Private equity funds include those in limited partnerships that

invest primarily in operating companies that are not publicly traded on a stock exchange. Real estate investments

include those in limited partnerships that invest in various commercial and residential real estate projects both

domestically and internationally. Hedge fund investments include those seeking to maximise absolute return using

a broad range of strategies to enhance returns and provide additional diversification.

234

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The investment strategies and objectives for pension assets reflect a balance of liability-hedging and return-

seeking investment considerations. The investment objectives are to minimise the volatility of the value of the

pension assets relative to the pension liabilities and to ensure assets are sufficient to pay plan obligations. The

objective of minimising the volatility of assets relative to liabilities is addressed primarily through asset

diversification, partial asset-liability matching and hedging. Assets are broadly diversified across many asset

classes to achieve risk-adjusted returns that, in total, lower asset volatility relative to the liabilities. Additionally, in

order to minimise pension asset volatility relative to the pension liabilities, a portion of the pension plan assets are

allocated to fixed income securities. The Group policy for these plans ensures actual allocations are in line with

target allocations as appropriate.

Assets are actively managed, primarily, by external investment managers. Investment managers are not permitted

to invest outside of the asset class or strategy for which they have been appointed.

The Group uses investment guidelines to ensure investment managers invest solely within the mandated

investment strategy. Certain investment managers use derivative financial instruments to mitigate the risk of

changes in interest rates and foreign currencies impacting the fair values of certain investments. Derivative

financial instruments may also be used in place of physical securities when it is more cost effective and/or efficient

to do so.

Plan assets do not include shares of CNH Industrial, or properties occupied by Group companies.

The PartnerRe Group’s plan assets are related to insured funds and cash. The partially insured funds comprise the

accumulated pension plan contributions and investment returns thereon. The funds are held in a partially insured

scheme, under the pension provider (AXA) participating in a single investment pool. The coverage ratio applied to

the assets as at 31 December 2020 was 112% based on the performance of the assets.

Sources of potential risk in the pension plan assets measurements relate to market risk, interest rate risk and

operating risk. Market risk is mitigated by diversification strategies and as a result, there are no significant

concentrations of risk in terms of sector, industry, geography, market capitalisation, or counterparty. Interest rate

risk is mitigated by partial asset-liability matching.

The fixed income target asset allocation partially matches the bond-like and long-dated nature of the pension

liabilities. Interest rate increases generally will result in a decline in the fair value of the investments in fixed income

securities and the present value of the obligations. Conversely, interest rate decreases generally will increase the

fair value of the investments in fixed income securities and the present value of the obligations.

The weighted average assumptions used to determine the defined benefit obligations of the pension plans are as

follows:

(in %)

At 31 December

2021

2020

CNH Industrial

Discount rate

1.63

1.12

Future salary increase rate

2.12

2.07

Average duration (years)

CNH Industrial reviews annually mortality assumptions and demographic characteristics of its U.S. pension plan

participants.

In 2021, CNH Industrial adopted the updated mortality improvement scale issued by the SOA ("MP-2021"). The

adoption of the new mortality assumptions resulted in a total increase of €1.1 million to the Company’s benefit

obligations at 31 December 2021, of which €0.4 million and €0.7 million were related to pension plans and

healthcare plans, respectively.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

235

In 2020, CNH Industrial adopted the no-collar variant of the Pri-2012 base table for the US pension plans

subsequent to the settlement of a portion of the outstanding pension obligation through purchase of annuity

contracts. Additionally, CNH Industrial adopted the updated mortality improvement scale issued by the SOA

("MP-2020"). Management believes the new mortality assumptions most appropriately represent its plans’

experience and characteristics. The adoption of the new mortality assumptions resulted in a total increase of

€6.4 million to CNH Industrial’s benefit obligations at 31 December 2020, of which an increase of €7 million, and a

decrease of €0.6 million were related to pension plans and healthcare plans, respectively.

The effect of an increase or decrease in the assumed discount rate, holding all other assumptions constant, would

be as follows:

(€ million)

At 31 December

2021

2020

Increase

Decrease

Increase

Decrease

CNH Industrial (1)

(277)

350

(353)

(460)

(1)The effect of an increase or decrease of 1.0% in the assumed discount rate was considered.

Discount rates are used in measuring the obligation and the interest expense (income) of net period cost.

Weighted-average discount rates are used in measurements of pension, healthcare and other post-retirement

benefit obligations and net interest on the net defined benefit liability/asset. The weighted-average discount rates

are based on a benefit cash flow-matching approach and represent the rates at which the benefit obligations could

effectively be settled at the measurement date. The benefit cash flow-matching approach involves analysing the

Group’s projected cash flows against a high quality bond yield curve, mainly calculated using a wide population of

AA-yield corporate bonds subject to minimum amounts outstanding and meeting other defined selection criteria.

Healthcare and life insurance plans

Liabilities arising from these plans comprise obligations such as healthcare and life insurance granted to a number

of employees and retirees in the U.S. and Canada.

These plans generally cover a number of employees retiring on or after reaching the age of 55 who have

completed at least 10 years of employment. These benefits may be subject to deductibles, co-payment provisions

and other limitations, and the Group has reserved the right to change or terminate these benefits, subject to the

provisions of any collective bargaining agreement. These plans are not required to be funded. However, beginning

in 2007, the Group began making contributions on a voluntary basis to a separate and independently managed

fund established to finance the North American healthcare plans.

In 2021, CNH Industrial communicated plan changes for the US retiree medical plan. The plan changes resulted in

a reduction of the plan liability by €88 million, recognized immediately in profit or loss as a pre-tax plan amendment

gain of the same amount.

The expected benefits for healthcare and life insurance plans are the following:

2022

2023

2024

2025

2026

2027-2031

Expected benefit payments

236

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Changes in healthcare and life insurance plans are as follows:

(€ million)

At 31 December

2021

2020

Defined

benefit

obligation

Fair value

of plan

assets

(Net asset)

Net liability

obligation

Defined

benefit

obligation

Fair value

of plan

assets

(Net asset)

Net liability

obligation

Present value of obligations at 1 January

2,573

(118)

2,455

2,656

(135)

2,521

Included in income statement

(76)

(2)

(78)

108

(3)

105

Included in Other comprehensive

income:

Actuarial (gains) losses from:

- demographic assumptions

—

(25)

—

(25)

- financial assumptions

(12)

—

(12)

197

—

197

- other

(6)

—

(6)

—

Return on assets

—

(6)

—

(11)

Exchange differences

(9)

(216)

(205)

Other:

Contribution by employer

—

Contribution by plan participants

—

Benefits paid

(30)

(22)

(151)

(144)

Deconsolidation of FCA

(2,230)

—

(2,230)

—

Transfer to liabilities held for sale

—

Other changes

(22)

(1)

(23)

(1)

—

(1)

Present value of obligation at

31 December

255

(115)

140

2,573

(118)

2,455

Amounts recognized in the Consolidated Income Statement were as follows:

(€ million)

At 31 December

2021

2020

Current service cost

Interest expenses

Interest income

(2)

(3)

Past service costs (income) and (gains) losses arising from settlements/curtailments

(85)

Total recognized in the Consolidated Income Statement

(78)

105

Healthcare and life insurance plans are accounted for on an actuarial basis, which requires the selection of various

assumptions. In particular, it requires the use of estimates of the present value of the projected future payments to

all participants, taking into consideration the likelihood of potential future events such as healthcare cost increases

and demographic experience.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

237

The fair value of plan assets by class is as follows:

(€ million)

At 31 December

2021

2020

Amount

of which have a

quoted market

price in an active

market

Amount

of which have a

quoted market

price in an active

market

Cash and cash equivalents

US equity securities

—

Non-US equity securities

—

Equity instruments

—

Government securities

Corporate bonds (including convertible

and high-yield bonds)

—

Other fixed income

—

Debt instruments

Insurance contracts and other

—

Total fair value of plan assets

115

118

The weighted average assumptions used to determine the defined benefit obligations are as follows:

(in %)

At 31 December

2021

2020

CNH Industrial

Discount rate

2.54

2.12

Future salary increase rate

n/a

Weighted average initial healthcare cost trend rate

4.18

4.39

Weighted average ultimate healthcare cost trend rate

3.58

3.95

Average duration (years)

FCA

Discount rate

—

2.7

Future salary increase rate

—

1.3-1.5

Weighted average ultimate healthcare cost trend rate

—

4.0

Average duration (years)

—

13-17

Assumed discount rates are used in measurements of pension, healthcare and other post-employment benefit

obligations and net interest on the net defined benefit liability/asset. The Group selects its assumed discount rates

based on the consideration of equivalent yields on high-quality fixed income investments at the measurement date.

The assumed discount rate is used to discount future benefit obligations back to today’s dollars. The discount rates

for the U.S., European, U.K. and Canadian obligations are based on a benefit cash flow-matching approach and

represent the rates at which the benefit obligations could effectively be settled on the measurement date,

31 December. The benefit cash flow-matching approach involves analysing the Group’s projected cash flows

against a high-quality bond yield curve, mainly calculated using a wide population of AA-grade corporate bonds

subject to minimum amounts outstanding and meeting other defined selection criteria. The discount rates for the

Group’s remaining obligations are based on benchmark yield data of high-quality fixed income investments for

which the timing and amounts of payments approximate the timing and amounts of projected benefit payments.

The assumed healthcare trend rate represents the rate at which healthcare costs are assumed to increase. Rates

are determined based on the Group’s specific experience, consultation with actuaries and outside consultants, and

various trend factors including general and healthcare sector-specific inflation projections from the United States

Department of Health and Human Services Healthcare Financing Administration.

238

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

The initial trend is a short-term assumption based on recent experience and prevailing market conditions. The

ultimate trend is a long-term assumption of healthcare cost inflation based on general inflation, incremental medical

inflation, technology, new medicine, government cost-shifting, utilisation changes, an ageing population, and a

changing mix of medical services.

The Group uses the spot yield curve approach to estimate the service cost and net interest components by

applying the specific spot rates along the yield curve used to determine the benefit obligations to relevant projected

cash outflows. Historically, the service and net interest costs were determined using a single weighted-average

discount rate based on hypothetical AA yield curves used to measure the benefit obligation at the beginning of the

period.

For the CNH Industrial Group, the effect of an increase or decrease of one percentage point in the assumed

healthcare cost trend rates would be an increase of €16 million and decrease of €19 million, respectively, in the

defined healthcare benefit obligations at 31 December 2021.

Other post-employment benefits

Other post-employment benefits include employee benefits granted to Group employees in Europe and comprise,

among others, Italian employee leaving entitlements – TFR (obligation amounting to €181 million at

31 December 2021 and €744 million at 31 December 2020), consisting of the residual obligation for the benefit

accrued to employees of Italian companies until 31 December 2007, having more than 50 employees, and accrued

over the employee’s working life for the others, and settled when an employee leaves the Group. The schemes

included in this item are unfunded.

Changes in the obligations for other post-employment benefits are the following:

(€ million)

At 31 December

2021

2020

Present value of obligation at 1 January

1,104

1,110

Included in income statement:

Current service cost

Interest (income) expenses

—

Past service costs (income) and (gains) losses arising from settlements

—

Included in Other comprehensive income:

Actuarial (gains) losses from:

- demographic assumptions

(2)

(20)

- financial assumptions

(1)

- other

(4)

Exchange differences

(7)

Other changes:

Benefits paid

(29)

(56)

Deconsolidation of FCA Group

(766)

—

Other changes

Present value of obligation at 31 December

321

1,104

The main assumptions used in developing the required estimates for other post-employment benefits include the

discount rate, the retirement or employee leaving rate and mortality rates.

The discount rates used for the measurement of the Italian leaving entitlement obligation are based on yields of

high-quality (AA rated) fixed income securities for which the timing and amounts of payments match the timing and

amounts of the projected benefit payments.

Retirement or employee leaving rates are developed to reflect actual and projected Group experience and the legal

requirements for retirement in Italy.

As for the Ferrari Group, at 31 December 2021 the weighted average discount rates that reflect the estimated

timing and amount of the scheme future benefit payments was 0.9% (0.4% in 2020). The average duration of the

Italian leaving entitlement was approximately 8 years.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

239

Other provisions for employees

Other provisions for employees primarily include long-term disability benefits, supplemental unemployment

benefits, variable and other deferred compensation, as well as bonuses granted for tenure at the Group.

24.Other provisions

Changes in Other provisions during the 2021 are as follows:

(€ million)

At 31

December

2020

Charge

Utilisation

Decon-

solidation

of FCA

Transfer to

liabilities

held for

sale

Translation

differences

Other

changes

At 31

December

2021

Warranty recall

campaigns and

technical assistance

6,634

757

(724)

(5,731)

—

(44)

980

Restructuring

provisions

168

(50)

(87)

—

Investment provisions

—

(7)

Other charges and

risks

8,362

3,523

(3,336)

(6,248)

—

126

(103)

2,324

Total other

provisions

15,176

4,321

(4,110)

(12,066)

—

216

(153)

3,384

At 31 December 2021 the item Other provisions decreases primarily due to the deconsolidation of the FCA Group

for €12,066 million.

The warranty recall campaigns and technical assistance provision represent management’s best estimate of

commitments given by the Group for contractual, legal or constructive obligations arising from product warranties

given for a specified period of time which begins at the date of delivery to the customer. This estimate has been

calculated considering past experience and specific contractual terms. This provision also includes management’s

best estimate of the costs that are expected to be incurred in connection with product defects that could result in a

larger recall of vehicles. This provision for risks is developed through an assessment of reported damages or

returns on a case-by-case basis.

At 31 December 2021, the restructuring provision includes the estimated amount of benefits payable to employees

by CNH Industrial Group on termination in connection with restructuring plans amounting to €39 million (€37 million

at 31 December 2020), and other costs totalling €7 million (€27 million at 31 December 2020).

The provision for other charges and risks represents the amounts provided by the individual companies of the

Group in connection mainly with sales incentives and contractual, commercial and tax risks and disputes.

The detail is as follows:

(€ million)

At 31 December

2021

2020

Marketing and sales incentives programs

1,376

5,157

Legal proceedings and other disputes

224

779

Commercial risks

330

1,029

Environmental risks

Other provisions for risks and charges

353

1,342

Total other risks

2,324

8,362

In particular, the provision refers to:

•marketing and sales incentives program: relating to the estimated amount of sales consideration to be reversed

to the Group’s dealer networks if the dealers achieve a specific cumulative level of sales transactions during

the calendar year;

240

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

•legal proceedings and other disputes: relating to including legal proceedings arising in the ordinary course of

business with dealers, customers, suppliers or regulators (such as contractual or patent disputes), legal

proceedings involving claims with active and former employees and legal proceedings involving different tax

authorities;

•commercial risks: relating to sale of products and services such as onerous maintenance contracts and as a

result of certain regulatory emission requirements;

•Environmental risks: this provision represents management's best estimate of the Group's probable

environmental obligations. amounts included in the estimate comprise direct costs to be incurred in connection

with environmental obligations associated with current or formerly owned facilities and sites. This provision also

includes costs related to claims on environmental matters;

•other provisions for risks and charges which includes environmental risks, indemnities, provisions for disputes

with suppliers, provision for product liabilities, contract related disputes or other disputes not subject to legal

proceedings.

25.Technical reserves reinsurance companies

Technical reserves of reinsurance companies at 31 December 2021 and 2020 are as follows:

(€ million)

At 31 December

2021

2020

Unpaid losses and Loss expenses

—

9,286

Life and health technical reinsurance reserves

—

2,204

Unearned premium reserves

—

1,846

Total Technical reinsurance reserves

—

13,336

In compliance with IFRS 5 the balance at 31 December 2021 of Technical reinsurance reserves has been

transferred to Asset and Liabilities held for sale, the information and reconciliation of the beginning and ending

liabilities are disclosed in Note 3 Scope of consolidation at point b.

26.Financial debt and other financial liabilities

Total financial debt and other financial liabilities at 31 December 2021 and 2020 are as follows:

(€ million)

At 31 December

2021

2020

Financial debt

28,684

52,101

Other financial liabilities

266

831

Total financial debt and other financial liabilities

28,950

52,932

At 31 December 2021 the financial debt and other financial liabilities decreased primarily due to the

deconsolidation of the FCA Group for €21,593 million and the reclassification of the financial debt and other

financial liabilities of PartnerRe Group for €1,937 million, at liabilities held for sale, in compliance with IFRS 5.

The composition of financial debt is as follows:

(€ million)

At 31 December

2021

2020

Notes

13,283

23,865

Borrowings from banks

2,880

13,108

Asset-backed financing

10,661

10,518

Lease liabilities

504

2,253

Payables represented by securities

1,081

1,696

Other financial debt

275

661

Total financial debt

28,684

52,101

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

241

The composition of financial debt by entity is as follows:

(€ million)

At 31 December

2021

2020

Exor

4,235

4,030

CNH Industrial

21,414

21,746

Ferrari

2,630

2,725

PartnerRe1

—

1,912

Juventus

239

396

GEDI

161

143

Shang Xia

FCA

—

21,139

Total financial debt

28,684

52,101

1)The balance at 31 December 2021, in compliance with IFRS 5 have been reclassified in the Consolidated Statement of Financial Position at the line Liabilities

held for sale.

242

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Notes

The composition of notes at 31 December 2021 and 2020 is as follows:

At 31 December

Issuer

Currency

Face value

outstanding

(in million)

Coupon

Maturity

2021

2020

Outstanding amount

(in € million)

Exor

€

602

2.125%

Dec 2022

602

749

Exor

€

500

2.50%

Oct 2024

503

653

Exor

€

100

5.25%

Jan 2025

104

Exor

€

450

2.875%

Dec 2025

451

Exor

170

4.398% 6 months

May 2026

151

139

Exor

€

500

1.75%

Jan 2028

502

Exor

€

200

3.125’%

Feb 2038

202

201

Exor

€

500

2.25%

Apr 2030

500

499

Exor

€

500

0.875%

Jan 2031

498

—

Exor

Yen

10,000

2.80% 6 months

May 2031

Exor

€

500

1.75%

Oct 2034

479

477

Total Exor Notes

4,069

3,855

Medium Term Note Programme (MTNP)

CNH Industrial Group

€

4,327

0,00% - 3.875%

Sep 21 - Jul 2039

3,644

4,328

FCA N.V.

€

4,750

3.375% - 4.5%

July 2023 - July 2028

—

4,757

Fiat Chrysler Finance

Europe SENC

€

2,350

4.750%

March 2021 - July

2022

—

2,350

Total Medium Term Notes

3,644

11,435

Other Notes

CNH Industrial Group

3,831

0.00% - 4.875%

Apr 2021 - Nov 2027

3,382

3,367

CNH Industrial Group

AUD

175

2.10%

Dec 22

272

110

CNH Industrial Group

CAD

300

1.5%

Oct 2024

208

—

CNH Industrial Group

ARS

701

36.00%

Aug 21

—

Ferrari Group

€

1,485

1.5%

March 2023 - May

2025

1,487

1,883

PartnerRe Group1

1,062

3.7%-6.44%

July 2029 - Dec 2066

—

863

PartnerRe Group2

€

750

1.25%

Sep 26

—

745

Juventus

€

175

3.35%

Feb 24

179

178

FCA N.V.

3,000

4.5% - 5.25%

Apr 2020 - Apr 2023

—

1,223

Total Other Notes

5,529

8,376

Hedging effect and amortised cost valuation

199

Total Notes

13,283

23,865

1.The balance at 31 December 2021 of €930 million was reclassified in the Consolidated Statement of Financial Position in the line Liabilities held for sale.

2.The balance at 31 December 2021 of €745 million was reclassified in the Consolidated Statement of Financial Position in the line Liabilities held for sale.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

243

The new notes issued and notes repaid during the 2021 were as follows:

New Issues

Currency

Nominal

Amount

(in million)

Coupon

Issue Date

Maturity

Company

CNH Industrial Capital LLC

Usd

600

1.45%

May 2021

July 2026

CNH Industrial Capital Australia Pty

Aud

200

1.750%

July 2021

2024

CNH Industrial Capital Australia Pty

Aud

1.750%

September 2021

2024

CNH Industrial Capital Canada Ltd

Cad

300

1.500%

September 2021

2024

Exor

Eur

500

0.875%

19 Jan 2021

19 Jan 2031

Repayments

Name of Notes

Currency

Amount

(in million)

Repayment date

Company

Ferrari

2021 Bond

Eur

501

18 Jan 2021

CNH Industrial Finance Europe S.A.

Euro MTM Notes

Eur

316

March 20211

CNH Industrial Finance Europe S.A.

Euro MTM Notes

Eur

367

27 Sep 2021

CNH Industrial Capital LLC

Other notes

Usd

900

1 Apr 2021 -

15 Oct 2021

CNH Industrial Capital Argentina SA

Other notes

Ars

701

31 Aug 2021

Exor

Exor N.V. 2.50%

Eur

150

20 January 20211

Exor

Exor N.V. 2.125%

Eur

148

20 January 20211

1.Repurchased.

The partial repurchases of the Exor 2.5% and 2.125% bonds and the subsequent partial cancellation determined

one-off losses of €21 million recognized in the Net financial expenses.

Medium Term Note Programmes

The Medium Term Note Programmes CNH Industrial are for a maximum of €10 billion. At 31 December 2021 notes

outstanding under this programme for CNH Industrial were €3.6 billion (€4.3 billion at 31 December 2020).

The notes of CNH Industrial are in Euro and have been issued by CNH Industrial Finance Europe S.A and are

guaranteed by CNH Industrial N.V.

Notes issued under the Medium Note Programme are generally listed on either the Irish or Swiss stock exchanges.

At 31 December 2020 the Medium Term Note Programmes of FCA were for a maximum of €20 billion and notes

outstanding under this programme for FCA were €7.1 billion. Notes have been issued in Euro and are guaranteed

by FCA N.V.

Other Notes

At 31 December 2021 other notes include the following:

•Notes issued by CNH Capital LLC for a total nominal value of $2.7 billion, by CNH Industrial N.V. for a total

nominal value of $1.1 billion, for $0.3 million by CNH Industrial Capital Australia Pty and for $0.2 million by CNH

Industrial Capital Canada Ltd.

•Notes issued by Ferrari in 2017 and 2020 for a principal amount of €385 million and €650 million, respectively

which mature in 2023 and 2025, respectively. These notes are listed on the Irish stock exchange.

At 31 December 2020 other notes included the following:

•Notes issued by FCA in 2015 in two tranches each of $1.5 billion due in April 2020 and April 2023 respectively.

These notes rank pari passu in right of payment with respect to all of FCA's existing and future senior

unsecured indebtedness and senior in right of payment to any of FCA's future subordinated indebtedness and

existing indebtedness, which is by its terms subordinated in right of payment to these notes. On 15 April 2020,

FCA repaid in full at maturity $1.5 billion of the 4.5 percent unsecured notes issued on 15 April 2015.

244

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

•Notes issued by CNH Capital LLC for a total nominal value of $2.5 billion, by CNH Industrial N.V. for a total

nominal value of $1.1 billion and for $0.2 million by CNH Industrial Capital Australia Pty.

•Notes issued by Ferrari in 2017, 2019 and 2020 for a principal amount of €385 million, €500 million and

€650 million, respectively which mature in 2023, 2021 and 2025, respectively. These notes are listed on the

Irish stock exchange.

•$500 million senior notes issued by PartnerRe Finance B LLC and €750 million of senior secured notes issued

by PartnerRe Ireland Finance DAC maturing in July 2029 and September 2026, respectively. These notes are

senior unsecured obligations of the respective issuer and are guaranteed by PartnerRe.

•$500 million and $63 million junior subordinated capital efficient notes issued by PartnerRe Finance B LLC and

PartnerRe Finance II Inc. These notes mature in 2050 and 2066 and since 2016 are redeemable at the option

of the issuer. The notes are ranked as junior subordinated unsecured obligations of PartnerRe Finance II Inc

and are guaranteed by PartnerRe.

Borrowings from banks

Borrowings from banks at 31 December 2021 amount to €2,880 million (€13,108 million at 31 December 2020).

The composition is as follows:

(€ million)

At 31 December

2021

2020

Exor

150

—

CNH Industrial

2,490

2,824

Ferrari

154

Juventus

GEDI

FCA

—

10,193

Total Borrowings from banks

2,880

13,108

Exor

At 31 December 2021 Exor has a €150 million term loan with maturity 2024.

CNH Industrial

CNH Industrial's borrowings consists primarily of borrowings from banks which are at various terms and rates.

In March 2019, CNH Industrial signed a five-year committed revolving credit facility for €4 billion ($4.5 billion at

31 March 2019 exchange rate) due to mature in 2024 with two extension options of 1-year each, exercisable on the

first and second anniversary of the signing date. CNH Industrial exercised the first of the two extension options at

28 February 2020 and the second extension option at 26 February 2021. The facility is now due to mature in March

2026 for €3,950.5 million; the remaining €49.5 million will mature in March 2025.

Available committed unsecured facilities expiring after twelve months amounted to approximately $5.2 billion at

31 December 2021 ($6.1 billion at 31 December 2020). Total committed secured facilities expiring after twelve

months amounted to approximately $3.9 billion at 31 December 2021 ($3.9 billion at 31 December 2020), of which

$2.8 billion at 31 December 2021 ($3.7 billion at 31 December 2020).

Ferrari

Bank borrowings of Ferrari include an amortized term loan of €63 million borrowed in June by Ferrari S.p.A. for a

tenor of 36 months and bearing fixed interest at 0.118% and loans secured by FFF Inc, to support financial services

operations comprising €62 million (€28 million at 31 December 2020) drawn down under a US$ denominated credit

facility for up to $100 million (drawn down for $70 million at 31 December 2021) for a tenor of 24 months and

bearing interest at LIBOR plus 75 basis points.

In March 2021 Ferrari cancelled a credit line of €100 million and simultaneously replaced it with a new credit line for

€150 million with a tenor of 23 months. In April 2021, Ferrari replaced an uncommitted credit line of $50 million,

which was terminated, with a new committed credit line for $100 million with a tenor of 24 months bearing interest

at LIBOR plus 75 basis points. At 31 December 2021 the line had been drawn down for $70 million (€62 million),

representing the only committed credit line that has been drawn down by Ferrari.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

245

The new credit line replaces the funding previously provided by one of securitization programs in the US for funding

of up to $110 million that expired in April 2021 and was interest-bearing at LIBOR plus 115 basis points, as noted

above. In October 2021 an undrawn committed credit line previously negotiated in April 2020 for €100 million

expired.

In December 2019, Ferrari negotiated a €350 million unsecured committed revolving credit facility (the “RCF”),

which is intended for general corporate and working capital purposes. The RCF has a 5 year-tenor with two further

one-year extension options, exercisable on the first and second anniversary of the signing date on the Company’s

request and the approval of each participating bank. In December 2020 and in December 2021 the first and the

second one-year extension options were exercised by the Company and approved by all participating banks. At

31 December 2021 the RCF was undrawn.

At 31 December 2021 Ferrari had total committed credit lines available and undrawn amounting to €676 million

(€700 million at 31 December 2020).

Juventus

Bank borrowings of Juventus at 31 December 2021 mainly relate to €14 million drawn down under revocable credit

lines (€21 million at 31 December 2020).

GEDI

Bank borrowings of GEDI at 31 December 2021 include the loan finalized on 30 December 2020 for a duration of 4

years and drawn down for the total amount of €71 million on 5 January 2021. After signing the loan agreement

GEDI entered into a hedging contract with the same banks that reduced the overall minimum interest rate on the

loan from the previous 1.2% to 0.987%.

Undrawn Credit Facilities

The principal undrawn committed credit facilities of the Group at 31 December 2021 and 2020 are as follows:

(€ billion)

At 31 December

2021

2020

Exor

0.4

0.5

CNH Industrial

4.0

4.4

Ferrari

0.7

Juventus

0.3

PartnerRe1

—

0.8

FCA Group

—

7.3

1.In compliance with IFRS 5 PartnerRe assets and liabilities at 31 December 2021 have been classified at Assets and Liabilities held for sale.

At 31 December 2021 the main committed credit facilities are as follows:

•CNH Industrial €4 billion revolving credit facility expiring in 2024 with two extension options of 1-year each,

exercisable on the first and second anniversary of the signing date. CNH Industrial exercised the first of the two

extension options at 28 February 2020 and the second extension option at 26 February 2021. The facility is

now due to mature in March 2026 for €3,950.5 million, the remaining €49.5 million will mature in March 2025.

The Credit facility replaces the existing five-year €1.75 billion credit facility due to mature in 2021. The facility is

guaranteed by CNH Industrial N.V. with cross guarantees from each of the borrowers.

•Ferrari €350 million unsecured committed revolving credit facility, negotiated in 2019, with 5 year-tenure with

two further one-year extension options exercisable on the first and second year from the signing date, and the

additional committed credit lines of €350 million secured in April 2020 with tenures ranging from 18 to 24

months. The mentioned credit facilities were undrawn at 31 December 2020.

246

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

At 31 December 2020 the main committed credit facilities were as follows:

•CNH Industrial €4 billion revolving credit facility expiring in 2024 with two extension options of 1-year each,

exercisable on the first and second anniversary of the signing date. CNH Industrial exercised the first of the two

extension options at 28 February 2020 and the second extension option at 26 February 2021. The facility is

now due to mature in March 2026. for €3,950 million, the remaining €49.5 million will mature in March 2025.

The Credit facility replaces the existing five-year €1.75 billion credit facility due to mature in 2021. The facility is

guaranteed by CNH Industrial N.V. with cross guarantees from each of the borrowers.

•Ferrari €350 million unsecured committed revolving credit facility, negotiated in 2019, with 5 year-tenure with

two further one-year extension options exercisable on the first and second year from the signing date, and the

additional committed credit lines of €350 million secured in April 2020 with tenures ranging from 18 to 24

months. The mentioned credit facilities were undrawn at 31 December 2020.

•PartnerRe $400 million credit facility with the first $100 million being unsecured and the remainder secured.

This facility matures each year on 14 November and unless cancelled by either party automatically renews.

Other secured credit facilities for an amount of $350 million. PartnerRe maintains committed secured letter of

credit facilities which must be fully secured with cash and or government bonds and or investment grade bonds.

•At 31 December 2020, FCA undrawn committed credit lines totalled €7.3 billion including the €6.25 billion

syndicated revolving credit facility and €1.1 billion of other revolving lines of credit.

Covenants

Financial liabilities and the revolving credit facility agreements may impose covenants on the borrower and in

certain cases on the guarantor, which are typical of international practice for similar liabilities.

The covenants vary from facility to facility and may include among others: (i) negative pledge clauses which require

that, in case any security interest in assets of the issuer is granted in connection with other notes or debt securities

having the same ranking, such security should be equally and ratably extended to the outstanding notes, subject to

certain permitted exceptions; (ii) pari passu clauses, under which the debt rank and will rank pari passu with all

other present and future unsubordinated and unsecured obligations of the issuer; (iii) periodic disclosure

obligations; (iv) cross-default clauses which require immediate repayment of the debt under certain events of

default on other financial instruments of the relevant issuer, (v) limitation of new real guarantees and asset sales on

certain company assets without the consent of the creditor (vi) limitation on incurrence of liens (vii) limitations on

incurrence, repayment and prepayment of indebtedness and (iv) other clauses that are generally applicable to

securities of a similar type. A breach of these covenants may require the early repayment of the underlying

indebtedness.

At 31 December 2021 and 2020 the Group was in compliance with all covenants under its debt agreements.

Asset-backed financing

Asset-backed financing represents the amount of financing received through factoring transactions which do not

meet the asset derecognition requirements and which are recognized as assets for the same amount in the

Consolidated Statement of Financial Position. The composition of Asset-backed financing is as follows:

At 31 December

(€ million)

2021

2020

CNH Industrial

9,761

9,716

Ferrari

900

761

FCA

—

Total asset-backed financing

10,661

10,518

Cash collected from the settlement of receivables or lines of credit pledged as collateral for asset-backed financing

is subject to certain restrictions regarding its use and is principally applied to repay principal and interest of the

funding.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

247

Lease liabilities

Lease liabilities included in the Statement of financial position:

(€ million)

At 31 December

2021

2020

Exor

CNH Industrial

371

355

Ferrari

Juventus

GEDI

Shang Xia

PartnerRe1

—

FCA

—

1,693

Total Lease Liabilities

504

2,253

1.In compliance with IFRS 5 the balance at 31 December 2021 of €75 million has been reclassified to Liabilities held for sale

Maturity analysis of lease liabilities – contractual undiscounted cash flows:

(€ million)

At 31 December 2021

Due within one

year

Due between

one and five

years

Due beyond

five years

Total

Contractual undiscounted cash flows

135

264

105

504

Payables represented by securities

At 31 December 2021 payables represented by securities amount to €1,081 million (€1,696 million at

31 December 2020).

On 15 May 2018 Exor established its first Euro-Commercial Paper Program (ECP Program) allowing it to issue

short-term notes with maturity of up to 364 days and a maximum amount outstanding of €500 million.

The program enables Exor to achieve greater diversification of its funding sources in the capital markets and

enhance its liquidity management. In 2021 Exor repaid the outstanding amount of €160 million nominal value of

commercial paper.

With the purpose of further diversifying its funding structure, CNH Industrial has established various commercial

paper programs. CNH Industrial Financial Services S.A. in Europe issued commercial paper under a program

which had an amount of €73 million outstanding at 31 December 2021 (€91 million at 31 December 2020).

248

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Financial debt by due date

An analysis of financial debt by due date at 31 December 2021 and 2020 is as follows:

At 31 December

(€ million)

2021

2020

Due

within

one year

Due

between

one and

five years

Due

beyond

five years

Total

Due

within

one year

Due

between

one and

five years

Due

beyond

five years

Total

Notes

1,328

7,640

4,316

13,283

2,886

13,473

7,506

23,865

Borrowings from banks

1,707

1,094

2,880

3,508

9,478

122

13,108

Asset-backed financing

6,451

4,119

10,661

6,582

3,860

10,518

Payables represented by

securities

524

535

1,081

1,165

230

301

1,696

Lease liabilities

136

264

104

504

479

956

818

2,253

Other financial debt

246

275

658

—

661

Total financial debt

10,392

13,679

4,613

28,684

15,278

27,997

8,826

52,101

27.Other financial assets and other financial liabilities

The fair value of the Group’s derivative financial assets and liabilities at 31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Positive fair

value

Negative fair

value

Positive fair

value

Negative fair

value

Fair value hedges:

Interest rate risk – Interest rate swaps

(5)

(1)

Currency risks

—

Total Fair value hedges

(5)

(1)

Cash flow hedges:

Currency risks – Forward contracts, Currency swaps

and Currency options

(48)

241

(192)

Interest rate risk – Interest rate swaps

(16)

(264)

Interest rate and currency risk – Combined interest rate

and currency swap

—

(28)

138

(60)

Commodity price risk – Commodity swaps

—

(1)

(8)

Other

—

Total Cash flow hedges

(93)

484

(524)

Derivatives not designated as hedging instruments

Currency risks

(108)

246

(84)

Interest rates

(14)

(175)

Interest rate and currency risk – Combined interest rate and

currency swap

—

Equity

(46)

(47)

Total derivatives not designated as hedging instruments

100

(168)

258

(306)

Collateral deposits

—

Total other financial assets and other financial liabilities

175

(266)

830

(831)

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

249

The analysis of outstanding notional amounts of derivative financial instruments by due date, at 31 December 2021

and 2020 is as follows:

(€ million)

Due within

one year

Due between

one and five

years

Due beyond

five years

Total

At 31 December 2021

Currency risk management

8,500

365

—

8,864

Interest rate risk management

1,621

4,076

892

6,589

Interest rate and currency risk management

—

Commodity price risk management

—

Total notional amount

10,128

4,441

975

15,544

At 31 December 2020

Currency risk management

18,480

712

—

19,192

Interest rate risk management

1,593

4,308

1,956

7,857

Interest rate and currency risk management

978

1,000

Commodity price risk management

1,161

1,330

Total notional amount

21,240

5,122

3,017

29,379

Fair value hedges

The gains and losses arising from the valuation of outstanding interest rate derivatives (for managing interest rate

risk) and currency derivatives (for managing currency risk) are recognized in accordance with fair value hedge

accounting.

Gains and losses arising from respective hedged items at 31 December 2021 and 2020 are as follows:

(€ million)

At 31 December

2021

2020

Currency risk

Net gains (losses) on qualifying hedges

—

(205)

Fair value changes in hedged items

—

205

Interest rate risk

Net gains (losses) on qualifying hedges

(41)

Fair value changes in hedged items

(87)

Net gains (losses) on fair value hedges recognized in the income statement

Cash flow hedges

The effects recognized in the Consolidated Income Statement mainly relate to currency risk management and, to a

lesser extent, to hedges regarding commodity price risk management and cash flows that are exposed to interest

rate risk and sales exposed to the fluctuations in the Euro/USD exchange rate.

With respect to cash flow hedges, the Group reclassified losses of €55 million in 2021 (gains of €203 million in

2020), net of the tax effect, from Other comprehensive income to the Consolidated Income Statement. These

amounts are reported in the Consolidated Income Statement as follows:

250

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

(€ million)

At 31 December

2021

2020

Currency risk

Increase (Decrease) in net revenues

Decrease (Increase) in cost of sales

(10)

163

Result from investments

(22)

Financial income (expenses)

(3)

103

Interest rate risk

Decrease (Increase) in cost of sales

(5)

Financial income (expenses)

(11)

Other - cost of sales

—

Commodity price risk

Decrease (Increase) in cost of sales

—

(87)

Taxes - income (expenses)

—

(4)

Ineffectiveness – overhedges

(66)

(21)

Net gains (losses) on cash flow hedges recognized in the income statement

(55)

203

Derivatives for trading

At 31 December 2021 and 2020 derivatives for trading primarily consisted of derivative contracts entered for

hedging purposes not qualifying for hedge accounting and one embedded derivative in a bond issue in which the

yield is determined as a function of trends in the inflation rate and a related hedging derivative, which converts the

exposure to floating rate (the total value of the embedded derivative is offset by the value of the hedging

derivative).

28.Trade payables

The analysis of trade payables by due date at 31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Due within one year

7,002

26,770

Due between one and five years

Due beyond five years

—

Total payables

7,040

26,796

At 31 December 2021 the trade payables decreased primarily due to the deconsolidation of the FCA Group for

€ 20,293 million.

29.Other liabilities

Other liabilities at 31 December 2021 and 2020 are as follows:

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

251

(€ million)

At 31 December

2021

2020

Payable for buy-back agreements

1,012

2,286

Indirect tax payables

665

1,318

Payables to personnel

415

1,220

Social security payables

209

458

Amounts due to customers for contract work

104

Accrued expenses and deferred income

2,171

5,082

Other

1,507

2,744

Total other liabilities

5,987

13,212

At 31 December 2021 the other liabilities decreased primarily due to the deconsolidation of the FCA Group for

€10,896 million.

Payables for buy-back agreements refers to buy-back agreements entered into by the Group and includes the price

received for the product recognized as an advance at the date of the sale and subsequently the repurchase price

and the remaining lease instalments yet to be recognized.

Accrued expenses and deferred income include the remaining portion of government grants that will be recognized

as income in the Consolidated Income Statement over the same periods as the related costs which they are

intended to offset.

The analysis of other liabilities (excluding accrued expenses and deferred income) by due date at

31 December 2021 and 2020 is as follows:

(€ million)

At 31 December

2021

2020

Due

within

one year

Due

between

one and

five

years

Due

beyond

five

years

Total

Due

within

one year

Due

between

one and

five

years

Due

beyond

five

years

Total

Other liabilities (excluding accrued

expenses and deferred income)

2,951

317

130

3,398

7,088

941

101

8,130

30.Guarantees granted, commitments and contingent liabilities

Guarantees granted by the CNH Industrial Group

At 31 December 2021, Financial Services has various agreements to extend credit for the following financing

arrangements:

(€ million)

At 31 December 2021

Total Credit Limit

Utilized

Not utilized

Facility

Wholesale and dealer financing

6,665

2,406

4,259

At 31 December 2021 the CNH Industrial Group provided guarantees on the debt or commitments of third parties

and performance guarantees mainly in the interest of a joint venture related to commercial commitments of defence

vehicles amounting to €465 million (€501 million at 31 December 2020).

Guarantees granted by the PartnerRe Group

At 31 December 2021 approximately €93 million of cash and cash equivalents (€256 million at 31 December 2020)

and €4,841 million of securities (€4,069 million at 31 December 2020) were deposited, pledged or held in escrow

accounts in favour of ceding companies and other counterparties of government authorities to comply with

regulations on reinsurance contracts and insurance laws.

252

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Commitments of the Ferrari Group arising from contractual arrangements

Arrangements with key suppliers

From time to time, in the ordinary course of business, the Ferrari Group enters into various arrangements with key

third party suppliers in order to establish strategic and technological advantages. A limited number of these

arrangements contain unconditional purchase obligations to purchase a fixed or minimum quantity of goods and /or

services with fixed and determinable price provisions.

Arrangements with sponsors

Certain of the Ferrari Group’s sponsorship contracts include terms whereby the Ferrari Group is obligated to

purchase a minimum quantity of goods and/or services from its sponsors.

Future minimum purchase obligations under these arrangements at 31 December 2021 were as follows for the

Ferrari Group’s continuing operations:

(€ million)

Due within one year

Due between one and three years

Due between three and five years

Due beyond five years

Total

156

Commitments of Juventus

The commitments of Juventus included guarantees received from leading credit institutions of €40 million

(€56 million at 31 December 2020) issued to guarantee the payables arising from the acquisition of players’

registration rights (€33 million) and other commitments (€7 million).

Pending litigation and contingent liabilities

As a global group with a diverse business portfolio, Exor Group is exposed to numerous legal risks, particularly in

the areas of product liability, competition and antitrust law, environmental risks and tax matters, dealer and supplier

relationships and intellectual property rights. The outcome of any proceedings cannot be predicted with certainty.

These risks arise from pending legal proceedings or requests received by the Group seeking recovery for damage

to property, personal injuries and in some cases include a claim for exemplary or punitive damages. It is therefore

possible that legal judgments could give rise to expenses that are not covered, or not fully covered, by insurers’

compensation payments and could affect the Group’s financial position and results. The Group’s reinsurance

subsidiaries, and the insurance and reinsurance industry in general, are subject to litigation and arbitration in the

normal course of their business operations.

In addition to claims litigation, the Group may be subject to lawsuits and regulatory actions in the normal course of

business that do not arise from or directly relate to claims on reinsurance treaties. This category of business

litigation typically involves, among other things, allegations of underwriting errors or omissions, employment claims

or regulatory activity. While the outcome of business litigation cannot be predicted with certainty, the Group will

dispute all allegations against the Group and/or its subsidiaries that management believes are without merit.

Contingent liabilities of the CNH Industrial Group

At 31 December 2021, contingent liabilities estimated by the CNH Industrial Group amount to approximately

€41 million (approximately €27 million at 31 December 2020), for which no provisions have been recognized since

an outflow of resources is not considered probable at the present time.

Although the ultimate outcome of legal matters pending against CNH Industrial and its subsidiaries cannot be

predicted, CNH Industrial believes the reasonable possible range of losses for these unresolved legal matters in

addition to the amounts accrued would not have a material effect on its Consolidated Financial Statements.

Follow-up on Damages Claims

In 2011 Iveco S.p.A. ("Iveco") and its competitors in the European Union were subject to an investigation by the

European Commission (the “Commission”) into certain business practices in the European Union (in the period

1997-2011) in relation to Medium & Heavy trucks. On 19 July 2016, the Commission announced a settlement with

Iveco ("the Decision"). Following the Decision, CNH Industrial, Iveco and Iveco Magirus AG ("IMAG") have been

named as defendants in proceedings across Europe.

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

253

The consummation of the Iveco Group demerger will not allow CNH Industrial to be excluded from current and

future follow on proceedings originating from the Decision because under EU competition law a company cannot

use corporate reorganizations to avoid liability for private damage claims. In the event one or more of these judicial

proceedings would result in a decision against CNH Industrial ordering it to compensate such claimants as a result

of the conduct that was the subject matter of the Decision, and Iveco and IMAG does not comply with such

decisions, as a result of various intercompany arrangements, then CNH Industrial will ultimately have recourse

against Iveco and IMAG for the reimbursement of the damages effectively paid to such claimants. The extent and

outcome of these claims cannot be predicted at this time.

FPT Emissions Investigation

On 22 July 2020, a number of CNH Industrial's offices in Europe were visited by investigators in the context of a

request for assistance by the public prosecutors of Frankfurt am Main, Germany and Turin, Italy in relation to

alleged noncompliance of two engine models produced by FPT Industrial S.p.A. ("FPT"), which is now part of the

Iveco Group N.V., installed in certain Ducato (a vehicle distributed by Stellantis) and Iveco Daily vehicles. FPT is

providing its full cooperation to properly address the requests received. FPT, other companies of Iveco Group, and

in certain instances CNH Industrial and other third parties have received various requests for compensation by

German and Austrian customers on various contractual and tort grounds, including requests for damages resulting

from the termination of the purchase contracts, or in the form of requests for an alleged lower residual value of their

vehicles as a consequence of the alleged non-compliance with type approval regulations regarding emissions. In

certain instances, other customers have brought judicial claims on the same legal and factual bases. Although, at

the date hereof, CNH Industrial has been informed by the Iveco Group that it has no evidence of any wrongdoing, it

cannot predict at this time the extent and outcome of these requests and directly or indirectly related legal

proceedings, including customer claims or potential class actions alleging emissions non-compliance.

Contingent liabilities of the Ferrari Group

Takata airbag inflator recalls

On 4 May 2016, the United States National Highway Traffic Safety Administration (“NHTSA”) published a Consent

Order Amendment (the “Amended Consent Order”) to the 3 November 2015 Takata Consent Order regarding a

defect which may arise in the non-desiccated Takata passenger airbag inflators mounted on certain Ferrari cars. As

a result of such Amended Consent Order, Ferrari filed a Part 573 Defect Information Report on 23 May 2016 with

the NHTSA and initiated a global recall relating to certain cars produced between 2008 and 2011.

In December 2016, the NHTSA issued a Third Amendment to the Coordinated Remedy Order (“ACRO”) which

included the list of Ferrari vehicles sold in the United States up to model year 2017 to be recalled. As a

consequence of the ACRO, Ferrari decided to extend the Takata global recall campaign to all vehicles worldwide

mounting non-desiccated Takata passenger airbag inflators. In January 2017 Ferrari, in accordance with the

Amended Consent Order and the ACRO, filed with the NHTSA a Part 573 Defect Information Report to include

model year 2012 Zone A vehicles. In January 2018, Ferrari, in accordance with the Amended Consent Order and

the ACRO, also filed with the NHTSA a Part 573 Defect Information Report to include model year 2013 Zone A

vehicles. In January 2019, Ferrari, in accordance with the Amended Consent Order and the ACRO, filed with the

NHTSA a Part 573 Defect Information Report to include model year 2014 - 2018 vehicles. In January 2020, Ferrari,

in accordance with the Amended Consent Order and the ACRO, filed with the NHTSA a Part 573 Defect

Information Report to include vehicles that had received the so-called “like-for-like” repair. As a result of the ACRO

and the decision to extend the worldwide Takata airbag inflator recall, Ferrari recognized provisions of €37 million in

2016 for the estimated charges for Takata airbag inflators recalls to cover the cost of the worldwide global Takata

recall due to uncertainty of recoverability of the costs from Takata. At 31 December 2021 the provision amounted to

approximately €3 million, reflecting the current best estimate for future costs related to the entire recall campaign to

be carried out by Ferrari.

Legal proceedings and disputes

The provision for legal proceedings and disputes represents management’s best estimate of the expenditures

expected to be required to settle or otherwise resolve legal proceedings and disputes. This class of claims relate to

allegations by contractual counterparties that the Group has violated the terms of the arrangements, including by

terminating the applicable relationships. Judgments in these proceedings may be issued in 2021 or beyond,

although any such judgment may remain subject to judicial review. While the outcome of such proceedings is

uncertain, any losses in excess of the provisions recorded are not expected to be material to the Ferrari Group’s

financial condition or results of operations.

254

CONSOLIDATED FINANCIAL STATEMENTS AT 31 DECEMBER 2021

Contingent liabilities of the Juventus Group

Audit by Consob

By letter dated 12 July 2021, Consob (Italian Supervising Authority) initiated an inspection of Juventus pursuant to

Article 115, paragraph 1, letter c) of Legislative Decree no. 58/1998 concerning the acquisition of documentation

and information relating to the item "Income from players' registration rights" recorded in the financial statements at

30 June 2020 and 30 June 2021.

Juventus responded to the Authority's requests and provided due and full cooperation during the aforementioned

audits. At present, the Company has not received any notice of the initiation of proceedings by the said Authority.

Requests for information from sports Authorities

In a letter dated 4 October 2021, Co.Vi.So.C. (an Italian sport Authority), on the basis of press reports, requested

Juventus to provide information about the requests for inquiries regarding the separate and consolidated financial

statements of Juventus received in 2021 from inspection bodies and, in particular, information about the expected

response time and the elements of assessment regarding the facts subject to the said requests for inquiries;

subsequently, in a letter dated 29 November 2021, Co.Vi.So.C. requested Juventus to provide further information,

in particular with regard to the news published in the press concerning the criminal proceedings described in the

following section.

On 24 November 2021, the Procura Federale (Federal Prosecutor's Office) of the F.I.G.C. (Federazione Italiana

Giuoco Calcio) made a request to Juventus for documentation concerning the transfer of the rights to the

performances of various football players, in the framework of proceedings opened by the same Prosecutor's Office.

Juventus provided these documents and all the information requested.