Iervolino & Lady Bacardi Entertainment S p A: Consolidated half-yearly financial report for the year ended 30 June 2022

The consolidated semi-annual financial report is

June 30, 2022

Parent company: IERVOLINO & LADY BACARDI ENTERTAINMENT SPA

Registered Office: Via Barberini n. 29 – 00187 – Rome

Registered with: ROME

Tax and VAT number: 11636381003

Register with the REA of ROME. RM-1318599

Contributed capital EUR: 1,410,427.92 fully paid

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ILBE Group Management Report on Consolidated Financial Statements for the Half Year Ended 30 June 2022

1. introduce
2. Macroeconomic Context and “Media & Entertainment” Reference Industry
3. ILBE Group’s business model
4. Activities in the first half of 2022
5. To-dos and projects in development
6. Aggregated data and alternative performance metrics (APIs)
7. Transactions with related parties
8. Human Resources
9. Research and Development
10. Disclosure of key risks and uncertainties
11. Significant events that occurred after the end of the period
12. Business Outlook

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Condensed Consolidated Half-Yearly Financial Statements and Notes to Financial Statements for the Year Ended 30 June 2022

Half Yearly Consolidated Statement of Financial Position

Half-yearly consolidated consolidated income statement

Half-yearly consolidated statement of changes in shareholders’ equity

Consolidated Half-Year Cash Flow Statement

1. company information
2. Basis for the preparation and modification of the Group’s accounting standards
3. Operating Sector: Policy
4. business portfolio
5. Explanatory Notes

Ernst & Young SPA Auditor’s Report

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ILBE Group Consolidated Half Yearly Financial Statements Management Report for the year ended 30 June 2022

1. Introduction

Iervolino’s Condensed Consolidated Half-Yearly Financial Statements for the Year ended 30 June 2022

• Lady Bacardi Entertainment Group (hereafter referred to as ILBE Group or Group) includes parent company Iervolino & Lady Bacardi Entertainment SpA (formerly Iervolino Entertainment SpA) as well as investments in Arte Video Srl and Arte Video Llc, RED Carpet Srl, Wepost Srl, Iervolino Studios doo e Sobe Sport Srl, the range has changed in the last financial year.

Consolidated semi-annual financial statements due June 30, 2022, total revenue of EUR 83.26 million and EBIT after some non-recurring charges of EUR 1.511 million were EUR 11.207 million. The half-year EBIT margin was 13.46%.

At the same time, the net financial position (net of the full year 2022 net effect of €2.095 million in IFRS 16 related to new lease contracts) improved to €26,531 compared to €29,289 at 31 December 2021.

The results obtained are consistent and consistent with the backlog and projects under development and the guidelines for managing the foreseeable evolution reflected in the previous year’s consolidated management report.

Furthermore, these results are consistent with the following strategic choices:

1. Invest in high-quality intellectual property;
2. Mainly international market selection, mainly for streaming audiences;
3. Prioritize growth and value creation over time short-term profit;
4. Investment and growth in the context of financial balance.

In this regard, the international and domestic public on SKY-cinema, Apple TV, SKY-Dea Kids and Amazon Prime Video’s “Arctic Friends”, “The Puffin”, Waiting for the Savage, Suspicious Battle – Il Courage of Last, The Bleeder , The Humbleling, Shiraz – The City of Roses, Beyond the Edge, etc., confirm the correctness of the choices made.

2. Macroeconomic Context and Reference Industries for “Media and Entertainment”

The global entertainment and media (M&E) industry experienced substantial growth last year, significantly outpacing overall global economic growth. M&E revenue rose 10.4% in 2021, from $2.12 trillion to $2.34 trillion, following a pandemic-related 2.3% decline in 2020.

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The industry is becoming more digital, more mobile and more youth-oriented. Virtual reality (VR) and gaming are strong growth drivers, while digital advertising permeates the industry.

Expected results of industry research by a major international consulting firm include:

• Global video game and esports production totaled $215.6 billion in 2021 and is expected to grow at a CAGR of 8.5% to $323.5 billion in 2026.Asia Pacific will hold the largest share with $109.4 billion in revenue in 2021, almost double that of North America, which The second highest area. Gaming is now the third-largest M&E content category consuming data, after video and communications.
• VR remains the fastest growing M&E segment, albeit from a relatively small base. Global virtual reality spending up 36% After growing 39% in 2020, it will grow to $2.6 billion year-over-year in 2021. It is expected to grow at a CAGR of 24% between 2021 and 2026, bringing the segment to $7.6 billion. Gaming content is the largest contributor to VR revenue, with total revenue of $1.9 billion in 2021. It is expected to increase to $6.5 billion by 2026, accounting for 85% of total virtual reality revenue.
• The spread of advertising in the digital world has made it the dominant industry category. After falling nearly 7% in 2020, advertising grew an impressive 22.6% in 2021 to $747.2 billion. Driven almost entirely by numbers, advertising will grow at a CAGR of 6.6% through 2026. Internet advertising revenue is growing even faster, with a CAGR of 9.1%. By 2026, advertising is projected to be a $1 trillion market and the largest M&E revenue generator, surpassing consumer spending and internet access.
• After a 35.4% increase in 2020, In 2021, OTT video grew by another 22.8%, reaching $79.1 billion in revenue. OTT revenue growth will slow slightly; it is expected to grow at a CAGR of 7.6% through 2026, pushing revenue to $114.1 billion.
• Traditional TV can still generate substantial revenue despite competition from OTT streaming services, but its unstoppable downward trend will continue, with global revenue expected to shrink to -0.8% CAGR from $231.0 billion in 2021 to $222.1 billion in 2026.
• Global movie revenues are rebounding, reversing losses from the pandemic, and are expected to hit a new high of $46.4 billion in 2023. Box office revenue is expected to increase from $20.8 billion in 2021 to $49.4 billion in 2026, a CAGR of 18.9%. China has overtaken the US as the world’s largest film market in 2020, and this lead is expected to remain in place until 2026.
• Live music revenue is expected to exceed Pre-pandemic levels in 2024. Digital music streaming subscriptions are driving growth in the recorded music industry, with revenue expected to increase from $36.1 billion in 2021 to $45.8 billion in 2026.
• Content growth is driving massive data consumption: 2.6 million petabytes of data were consumed in 2021 and are expected to grow at a CAGR of 26% to 8.1 million petabytes by 2026. Gaming will be the fastest growing data consumer during the forecast period with an expected CAGR of 29.6%. Mobile phones will be the fastest growing device category between 2021 and 2026, with a CAGR of 28.8%, and is expected to drive mobile data consumption from 1.1 million petabytes to 3.8 million petabytes.

Essentially, what is emerging as an M&E market trend is that the choices billions of consumers make about where they will spend their time are driving industry transformation and driving trends. We basically see the emergence of a global M&E consumer base in the next few years that is younger, more digital, and more streaming and gaming than the current consumer base. This is shaping the future of the industry.

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