Moleskine

Contribung to the development and sharing of human knowledge and culture

Moleskine

D’Ieteren

Acvity Report 2018

Moleskine

WHAT WE DO

Moleskine is an aspiraonal, global brand, synonymous with the lifestyle-of-the-creave-

class, with core values rooted in culture, travel, memory, creavity and personal identy. A

symbol of contemporary nomadism, Moleskine connects with contemporary creavity and

is present across a network of websites, blogs, online groups and virtual archives, not least

within the brand’s own online community, myMoleskine, which has circa 140,000 members.

With headquarters in Milan and oces in Cologne, New York, Hong Kong, Shanghai and

Tokyo, the company sells its products through a mulchannel distribuon plaorm (Whole

sale, Retail, E-commerce and B2B) in more than 115 countries and more than 29,000 outlets.

The porolio goes beyond the iconic paper-based product categories (notebooks, diaries

and journals) to encompass bags, wring instruments, reading accessories, digital apps and

hybrid products such as the Smart Wring System, which can migrate content from paper to

digital devices and vice versa.

The company also runs freestanding Moleskine Cafés in Milan and Beijing and in two addi-

onal locaons inside Geneva airport and at the Thalia bookstore in Hamburg. This innovave

format provides a contemporary take on the “Café Liéraire” concept, adding Moleskine

brand values and products to a unique café experience.

D’Ieteren

Acvity Report 2018

Moleskine

The last year has been another one of growth, development and evoluon

for Moleskine.

The nancial results were solid – with revenue increasing by 15% at

constant exchange rates to more than EUR 174 million. This growth was

fuelled by product innovaon and strengthened distribuon across all our

main geographies.

Moleskine is a global brand characterized by a disncve cultural posio

ning. To nurture this posioning, we have connued to innovate across

exisng core product ranges while sll extending the brand beyond paper

into adjacent categories. An important focus point was the bags category,

where innovaon was best exemplied by the launch of our iconic new

backpack range. Leveraging the success of the Moleskine Classic Backpack,

especially across direct-to-consumer channels, we decided to extend its

single design into an enre collecon with a wider selecon of colours

and materials.

Coherent with travel being one of our core values, we also launched a line

of luggage to be distributed in the course of 2019.

We also pursued a mul-channel approach to distribuon in 2018.

We held producve conversaons with our wholesale partners and our

major retailers on the evoluon of our brand presence at their points of

sale, while seng up a direct presence in Japan through our own subsidia

ry to beer cover and develop that market.

B2B played a key role in delivering results thanks to the connued deve-

lopment of large projects mainly in EMEA and APAC. There was strong

growth also in the Americas, where the market potenal is beginning to

open up.

Aer a few years of network expansion, store openings were a less impor

tant growth driver in 2018. We chose to focus on opmizing like-for-like

sales growth by upgrading store interiors (in Milan we launched a new

store format) and the in-store service proposion. Special focus was de

voted to travel retail locaons as the best-performing format where Mo-

leskine’s typical target audience is most likely to be found.

Our brand strategy remains focused on driving brand awareness: there is

a clear opportunity to aract new consumers and to ensure our exisng

customers are aware both of the breadth of our heritage product range

and our new products.

To deliver a consistent brand proposion remains key. We will connue

to pursue consistency by applying best pracces in each market and

leveraging our global capabilies across all channels in merchandising and

range selecon. Removing points of fricon and making it easy for our

customers to interact with the Moleskine brand across all channels will

remain a priority in 2019.

Looking at less penetrated markets, the brand’s strategy for China remains

in line with our long-term plan. China is a promising market. Consumer

tastes are evolving from luxury brands to those inuenced by pop culture

and we believe that Moleskine is well posioned for success. Furthermore,

today’s consumers are more connected to brands than ever before and

use digital devices as their primary source of research. Future customer

engagement and conversion therefore remains highly dependent on digi

tal capabilies and innovaon, hence our commitment to also upgrading

the brand presence in this space.

Throughout the year, we connued to build the team to develop and deli

ver our strategy. This has included promong internal talents and bringing

in fresh experse from outside.

We have connued to enrich the way we communicate with our

customers, with several excing iniaves like the Moleskine Café.

We have refreshed our digital plaorms, with more curated and edito-

rialized content (The Fold), generang increased customer engagement.

Moleskine’s purpose is clear: to contribute to the development and sha

ring of human knowledge and culture. Looking ahead to 2019, we will fo-

cus on embedding our vision into the organisaon because I truly believe

that corporate values should also dene the way we do business.

We enter 2019 with considerable momentum, and our teams are focused

on delivering on our strategic pillars, including:

- innovaon - our product pipeline is strong, both in paper and non-paper

product categories;

- connued expansion of our global footprint– focusing on key under-

penetrated markets in APAC (parcularly Japan and China);

- digital relevance – our digital ecosystem is just beginning to be fully

exploited;

- people development – because when our people thrive, our business

thrives;

- operaonal excellence – focusing on every part of our operaons,

seeking to increase eciency, parcularly in the supply chain and

inventory management .

Given the scale of our ambion for the brand, we are making good pro

gress on the execuon of our strategy and our teams are energized by the

opportunies that lie ahead. We are building on strong foundaons and

are fully focused on delivering our mul-year strategic plan successfully.

MESSAGE FROM

LORENZO VIGLIONE

CEO OF MOLESKINE

Given the scale of our ambition for the brand,

we are making god progres on the execution of

our strategy and our teams are energized by

the oportunities that lie ahead.

Manfredi Ricca,

Chief Strategy Ocer of Interbrand

Manfredi Ricca is in charge of building and va-

luing highly inuenal brands across diverse

industries worldwide. He is an inuencer and

thought leader in his eld, contribung to Inter

brand’s Best Global Brand Studies. Moleskine

and Interbrand have been working together for

a few years on several projects, mainly related

to Moleskine’s brand development.

A word from

our stakeholders

In today’s ever-evolving business environment, what is driving consumer choices?

We live in an age of immediacy where, in markets where basic needs are broadly met, people not only expect more, beer and dierent on a

near daily basis, but also face an increasing abundance of choice. So while short-term business success sll derives from geng the fundamentals

right – product, distribuon, cost structure, and so forth – sustainable compeve advantage depends on forming strong customer relaonships.

This idea is not new - relaonships are a prerequisite to loyalty and, therefore, to achieving enduring results. However, their very nature has changed

in two fundamental ways. Firstly, relaonships are no longer just an emoonal bond - they are a deep, fact-based connecon, founded on mutual

understanding between businesses and individuals, fuelled by an ongoing exchange of data and experience. Today’s customers expect businesses to

know their desires and needs inmately and to deliver on them seamlessly.

Secondly, customer relaonships increasingly orbit around a common sense of purpose - brands that thrive today are able to add meaning to

customers’ lives, capturing their imaginaons and taking a clear stance on the societal issues of our mes.

How can brands drive business growth today?

A fundamental trait of some of the world’s most successful businesses is that they no longer create a promise around their capabilies, but rather

build those capabilies around an overarching promise - from Google’s ‘relevant informaon’ to Airbnb’s ‘belong anywhere’. Anchored to these

promises, these brands cross and combine categories, building seamless ecosystems of products, services, experiences and partnerships that appear

diverse, but are, in fact, all connected by that single promise. Similarly, Moleskine is a pure demand-side business, driven by people’s desires, rather

than limited by the company’s capabilies. The Moleskine Café is a case in point, bringing the ‘Inspiring Journeys’ promise to life in an enrely dierent

category. This concept makes the brand consistently relevant and meaningful and therefore more likely to achieve sustained growth.

How should the brand address the challenges created by the touchpoint cluer?

The key challenges for Moleskine are also its greatest opportunies. Three spring to mind. The rst challenge for consumer-facing businesses today

is to tear down the wall between digital and physical experiences – a divide that is no longer relevant to most individuals today, but that many

businesses struggle to get behind their backs. Moleskine has demonstrated a certain agnoscism vis-à-vis this divide, a good example being its Smart

Wring Set, which opens up opportunies in terms of new products, experiences and acvaons. A second challenge for many global brands will be

their relevance at a local level – being meaningful in the here and now, capturing the ‘zeitgeist’ of a specic me and place. To this end, Moleskine has

proved to be a powerful plaorm, for example by using limited edions to forge strong customer relaonships. Finally, and perhaps most importantly,

the future of brand experience is not about thinking in terms of touchpoints, but building the experience from the outside in, by starng from a deep

understanding of the customer’s world. What can Moleskine add to this world? What are the places, interfaces and moments where it can create

meaningful experiences? The choice and conguraon of touchpoints must be based on a deep understanding of the customer. Moleskine’s in-depth

analysis of its customers over the past few years provides a perfect springboard for a brand that can engage ever more strongly both with its core

community and legions of new customers.

D’Ieteren

Acvity Report 2018

Moleskine

Overview of 2018

Building a mul-channel plaorm

In 2018 the company grew consolidated revenues by 15% vs 2017 at

constant exchange rates, leveraging a mul-channel distribuon plaorm

and building on its brand strength and unique cultural posioning to at

tract global consumers. Connecng with customers through mulple mea-

ningful touchpoints is a crucial pillar for achieving sustainable long-term

growth. This is why the company has connued to strengthen its distribu

on capabilies across all channels.

In Wholesale (+7% vs 2017), the company connued to develop direct

relaonships with key retailers to strengthen brand experience at their

stores through dedicated visual merchandising. In Japan, it established a

subsidiary to improve coverage and to further capture that market’s po

tenal through increased customer proximity. The company also opened

up new specialized distribuon channels for non-paper products, with the

bags and consumer electronics channels adding relevant touchpoints. In

the US, in addion to the main large retailers such as Target, Barnes &

Noble and Amazon, the company has connued to nurture brand visibility

at leading independent booksellers, which have always been a historical

pillar of our US distribuon network, especially in the early stages of our

presence there. This strategy is now raising awareness of our brand among

US consumers.

Thanks to its capillarity and reach, Wholesale is an ideal channel to expose

the company’s corporate values and commitments. In September 2018,

the “I had a Dream” exhibion, curated by the Moleskine Foundaon and

supported by Moleskine, was held at La Rinascente in Rome, showcasing

a selecon of 54 notebooks created by students who took part in one

of the AtWork workshops organised by the Foundaon. The event was

aimed at strengthening the relaonship with one of the key retailers in Italy,

promong the acvies of the Moleskine Foundaon and supporng the

posioning of the brand as an enabler of art, culture and educaon.

B2B (+42% vs 2017) registered signicant growth, leveraging our proven

distribuon capabilies. An excellent driver of brand awareness, B2B

conrmed its business relevance, driven by the development of major

projects with global corporaons such as Starbucks in Korea. B2B is the

company’s second most important channel in terms of sales and is ex

pected to make a signicant contribuon to future growth. In addion

to represenng an important and growing component of our sales, B2B

is an eecve strategic tool to raise awareness of the Moleskine brand as

clients oen oer customized products to employees and/or partners for

markeng purposes (e.g. product launches, opening of sales outlets, inter

nal communicaon campaigns, arsc and cultural exhibions).

Direct Retail (+3% vs 2017) was conrmed as a strategic channel that

increases customer proximity and awareness. 2018 was marked by mo

derate perimeter expansion (9 new store openings), network raonali-

zaon (16 closures) and a focus on performance. Revenues were driven

by improved in-store execuon. The opmized merchandising strate

gy led to an overall increase of the average value of transacons as the

bags category connued to gain tracon. In addion, store personnel

development through ad-hoc training as well as in-store iniaves

(e.g. embossing machines for product personalizaon) contributed

posively to the increased conversion rate. Travel retail locaons were

again the most successful format, which is why all new openings in 2018

took place in the travel retail environment (London’s Liverpool street

staon, Paris Montparnasse staon, Naples airport, Paris Roissy airport,

Naples railway staon).

Finally, in September, a new retail format was launched at one of the

Milanese stores. The aim is to deliver an improved shopping experience

and forge closer links with the brand. Results were very posive during

the end-of-year period.

Moleskine developed a new retail format to improve shopping experience (Milan store)

Expanding product porolio

and oer of services

In 2018, Moleskine registered healthy growth in both paper and non-

paper (40% of total sales increase) collecons, the laer mainly driven by

bags, where the company is steadily building a reputaon as the category

increases its market penetraon.

Within the paper collecon, the company maintained its premium posio

ning thanks to the success of the Limited Edion collecons. Key launches

in 2018 included the celebraon of iconic characters such as SuperMario,

Barbie, James Bond, Astroboy and Looney Tunes and more regional pro

jects like Sakura, which celebrates the beginning of the Japanese spring

me with the cherry blossom. Sakura leaves are symbolic in Japan, repre

senng a period of renewal and oen referred to as an expression of life

and death.

Other product launches in the paper space included the Passion Journals

(themac notebooks dedicated to popular subjects such as babies, travel,

cooking, books, wellness, wine and weddings) and the Art collecon, a rich

selecon of sketchbooks, notepads and manuscript notebooks dedicated

to the core arsc segment of Moleskine’s clientele.

In the M+ category, which aims to bridge the analogue-digital gap expe

rienced in our everyday lives, the Company rolled-out the new ‘Ellipse’

Smart Pen, designed to be used in conjuncon with the Smart Notebooks

and Planners to combine the natural immediacy of wring on the pages

of a notebook with all the advantages of borderless digital creavity.

The Smart Wring ecosystem (Paper Tablet notebook, Smart Pen+ and

Moleskine Notes companion app) targets today’s digitally-connected

professionals, knowledge workers and students, who prefer to create

their plans and develop their ideas on paper rst, without abandoning the

convenience of digital technology.

In 2018 Moleskine returned to the Pi trade fair with three new bag col

lecons, each conceived to simply and eortlessly synch with producve,

dynamic lifestyles on the move: the Moleskine Backpack Collecon took

an iconic Moleskine product – the Classic Backpack, with its simple, essen

al design and rigid shell-like case – and re-visited it with innovave mate-

rials that add a new dimension and ethos; the Classic Match Collecon is

designed for professionals on the move; while the Metro Bag Collecon is

designed for contemporary urban lifestyles, as its name suggests.

In E-commerce (+12% vs 2017), the company focused on ne-tuning its

strategy by improving governance. 2018 also saw the foundaons laid

for a digital strategy to be deployed in 2019 aimed at delivering a more

meaningful user experience. A special focus was placed on China leveraging

connued growth on the main local plaorms (e.g. JD, TMall).

The Moleskine Café conrmed its status as an innovave format that

exposes consumers to the brand and to the creave content it generates,

either directly or through its community of passionate followers. Priority

was given to dening a replicable and scalable format to leverage the

experiences of Milan and Beijing. The Moleskine Café conrms itself as a

key pillar of the Moleskine Creave Hub, a project aimed at encouraging and

sustaining creavity among its target audience. In 2018 ten cultural events

were organized in our Moleskine Cafés in Milan, Hamburg and Beijing. Of

these, we menon the Design of Words, a journey through the meless art

of calligraphy. The event included the presentaon of the book The Design

of Words, edited by Moleskine, a talk with world famous calligraphers Milen

Balbuzanov and Viktor Kamswill, followed by a live performance and an

exhibion of original notebooks donated by some of the world’s greatest

calligraphers. A number of other events were held in partnership with

Calligraphy Masters, the global community of calligraphers.

Adopting a local aproach remains crucial to

gaining a beter understanding of consumer

preferences and other local-specific requirements.

Moleskine café (Beijing)

The new Passion Journals collecon

D’Ieteren

Acvity Report 2018

Moleskine

the future of brand is building the experience

from the outside in, by starting from a dep

understanding of the customer’s world.

The “Sakura” notebook is a limited edion developed for the Japanese market.

Iconicity beyond paper:

The Backpack

The Classic Backpack has become one of Moleskine’s most-loved bags, which is why the company decided to extend the single design

created by Italian industrial designer and Moleskine Creave Director Giulio Iacche into an enre collecon with a wider selecon

of colours and materials that each speak to a dierent facet of our personalies. Conceived as roaming containers of identy and

ampliers of contemporary lifestyles and beings, the new Backpack collecon is available in four new fabrics and with a sophiscated,

subtle colour palee that embraces earthy tones. Wherever their journeys may take them, the Backpacks in this collecon become

perfect inspiraonal carriers of life’s essenals, not unlike Moleskine notebooks, which are a receptacle for ideas and inspiraon.

The expanded Backpack Collecon seals Moleskine’s reputaon for creang iconic non-paper products.

The Ellipse Smart Pen is the last-born of Moleskine’s Smart Wring products

D’Ieteren

Acvity Report 2018

Moleskine

Thinking globally, acng locally

In 2018 the company connued to grow. At year-end, Moleskine had 491

FTEs, up 23 on 2017. In parcular, 2018 was marked by the strengthe

ning of regional operaons in an eort to nd the most eecve balance

between centralized and local funcons, as knowledge of local customers

and localized execuon are deemed as crucial to developing the brand’s

compeve edge in each market. In essence, the guiding principle behind

the organisaonal overhaul was ‘think globally and execute locally’, with

each region holding full responsibility for prots and losses.

Adopng a local approach remains crucial to gaining a beer understanding

of consumer preferences and other local-specic requirements. It is only

with this understanding that we can adapt the markeng mix and other

business strategies so as to respond fully to consumer desires.

Focusing on organisaon and people

to deliver the brand promise

In 2018, starng from the belief that a strong corporate culture is the

most powerful way to create a purpose-driven organisaon, the company

launched the “Culture Project” with the aim of dening a set of corporate

values that will enable Moleskine to grow. These values and their ability to

benet the company in its day-to-day operaons were idened in 2018.

In 2019, the project will be rolled-out across the organisaon.

Moleskine also implemented an integrated plan christened the “Total

Rewards System”, with the aim of nurturing employee engagement and

increasing sta retenon. The laer implies that invesng in people

is not only linked to monetary reward (the base salary and variable

incenve bonuses), but is also related to a more general investment in

the corporate well-being of employees (workplace, learning, engage

ment). Following this approach, Moleskine dedicated 600+ hours to ini-

aves related to training and development over the year, involving about

200 people across the group. In addion, about 300 hours were devoted

to training for senior management.

Pursuing digital Innovaon

In 2018 Moleskine launched Acons, another successful applicaon aimed

at increasing personal producvity, with approximately 600,000 down

loads since its launch in April.

Moleskine has always innovated along the analogue-digital connuum.

In 2017 it launched the Moleskine Open Innovaon Programme, a call

for innovave ideas to add to the growing Moleskine+ ecosystem of

smart objects and services. The project invited talented start-ups to

submit concepts, projects and proposals in return for the chance to

work closely with Moleskine – sharing experse, building know-how

and turning inspiring ideas into business reality. The twelve most

successful applicants from all over the world were invited to the

Moleskine headquarters in Milan to present their projects. In 2018,

three nalists were selected to work with a group of Moleskine mentors,

facilitators and entrepreneurs as part of a 6-month incubator programme

to bring their proposals to life and to market. Moleskine is currently

exploring routes for long-term collaboraon with one of the three start-

ups that has launched an innovave applicaon in the area of personal

producvity.

Acons, the latest Moleskine app, is aimed at fostering personal producvity.

For Moleskine, a strong corporate culture is the most powerful way to create a purpose-driven

organisaon.

Engaging with communies

In 2018 the company maintained its commitment to strengthening

the relaonship with the Moleskine Foundaon in a joint mission

to promote creavity as an engine for posive social change. The

Moleskine Foundaon is a non-prot organisaon that believes that

quality educaon is key to producing posive change in society and

driving our collecve future. Its mission is to provide young people

with unconvenonal educaonal tools and experiences that help

foster crical thinking, creavity and life-long learning, with a focus on

communies aected by cultural and social deprivaon. In 2018 the

Moleskine Foundaon ran four AtWork Workshops (in Rome, Ndjamena,

Harare and Kampala) involving 100 students from 19 countries. AtWork is

an inerant educaonal format that uses the creave process to smulate

crical thinking and debate among parcipants. It aims to encourage the

emergence of a new generaon of thinkers.

The core component of each AtWork event is a workshop conducted by an

arst or a curator on a specic topic. The topic smulates collecve

discussion and personal self-reecon on issues such as identy, culture

and community. To conclude the workshop each student produces a

personalized notebook – each with its own unique character – that illus-

trates the process of self-reecon triggered by the event. The resulng

notebooks are then displayed in an exhibion co-curated by the students

themselves.

AtWork is an inerant educaonal format and is a key tool of the Quality Educaon Programme of the Moleskine Foundaon.

D’Ieteren

Acvity Report 2018

Moleskine

(EUR million) 2014 2015 2016 2017 2018

External revenue 98.8 128.2 145.2 155.4 174.1

Operang result 25.3 34.8 34.0 25.2 28.6

Operang margin 25.6% 27.2% 23.4% 16.2% 16.4%

Result before tax 24.1 34.6 32.9 15.2 18.9

Result aer tax 16.5 27.1 23.3 10.1 22.8

Number of stores 41 58 79 87 80

Number of employees

(year-end) 278 359 401 468 491

Note: Moleskine’s results are fully consolidated in D’Ieteren’s accounts as from 1 October 2016.

REVENUE AND OPERATING RESULT

(EUR million)

REVENUE BREAKDOWN

BY CHANNEL

REVENUE BREAKDOWN

BY PRODUCT RANGE

REVENUE BREAKDOWN

BY GEOGRAPHY

53%

Wholesale

E-Commerce

28%

B2B

14%

Retail

100

120

140

160

180

20172014 2015 2016 2018

1 2 3

100

120

140

160

180

20172014 2015 2016 2018

1 2 3

17%

APAC

(Asia-Pacic)

78%

Paper

M+

100

120

140

160

180

20172014 2015 2016 2018

1 2 3

13%

Non Paper

36%

Americas

47%

EMEA

(Europe,

Middle East and Africa)

Moleskine I Key Figures

100

120

140

160

180

20172014 2015 2016 2018

1 2 3

External revenue

Operang result