Marzocchi Pompe

Earnings Release • Sep 27, 2024

PRESS RELEASE

MARZOCCHI POMPE: APPROVED THE HALF-YEAR REPORT AS OF JUNE 30, 2024

REVENUES AND OPERATING MARGINS HELD WELL IN A VERY CHALLENGING MARKET SCENARIO AT A WORLDWIDE LEVEL

FURTHER INVESTMENTS IN THE PRODUCTION AND LOGISTICS AREA TO CONTINUE WITH THE EFFICIENCY IMPROVEMENT PLAN

• NET REVENUES: € 26.6 million, -17.3% vs. € 26.6 million as of June 30, 2023
• CORE BUSINESS¹ SALES: € 18.5 million, -13.1% vs. 1H 2023
• AUTOMOTIVE SALES: € 3.5 million, -34.3% vs. 1H 2023
• EBITDA: € 3.23 million, -34.8% vs. € 4.95 million as of June 30, 2023
• EBITDA Margin² : 14.6% vs. 18.4% in H1 2023
• NET PROFIT: € 1.3 million, -37.6% vs. € 2.1 million as of June 30, 2023
• NET FINANCIAL DEBT: € 7.0 million, +31% vs. € 5.3 million at end-2023 and down 15% year-on-year (€ 8.3 million at end-June 2023)
• NET EQUITY: € 22.96 million, unchanged vs. € 22.9 million at 31/12/2023

Bologna, 27 September 2024 – The Board of Directors of Marzocchi Pompe S.p.A. (EGM:MARP), a leading company in the design, production, and marketing of high-performance gear pumps and motors, met today under the chairmanship of Paolo Marzocchi, and approved the consolidated half-year financial report as at 30 June 2024, subject to limited audit by PricewaterhouseCoopers S.p.A..

Gabriele Bonfiglioli, CEO of Marzocchi Pompe, commented: "We can be satisfied with the results achieved in the first half of 2024, as they reflect the resilience and solidity of Marzocchi Pompe in an extremely challenging market environment. Volumes and margins have shown excellent hold, demonstrating once again our capability to adapt and react even in the most difficult conditions. The strategic actions undertaken, especially the investments to streamline our production and logistics processes, will put us in an even better position than in the past to face the challenges ahead. We are convinced that the relentless efforts we are continuing to make at the commercial

MARZOCCHI POMPE S.P.A.– Direzione e Coordinamento di ABBEY ROAD S.R.L.

¹ I Ricavi del Core Business (pompe idrauliche ad ingranaggi esterni ad elevate prestazioni per diversi settori industriali) si ottengono detraendo dai Ricavi delle Vendite totali quelli del mercato Automotive

² EBITDA Margin calcolato sui Ricavi da produzione e vendita, definiti come somma algebrica dei ricavi di vendita e della variazione (positiva o negativa) dei prodotti in corso di lavorazione e prodotti finiti

Via A. Grazia, 2 – 40069 Zola Predosa (Bo) Italy – Tel (+39) 051/6137511 Fax (+39) 051/592083

Nr. M. Bo 047739 – N.REA 422251 – Registro Imprese /Cod. Fisc. 03285900969 – P.IVA IT 03285900969 – C.S. Euro 6.538.750,00 i.v. e-mail: info@marzocchipompe.com - Web: www.marzocchipompe.com

level, combined with further new product launches, will enable us to resume growth in the medium term."

MAIN ECONOMIC AND FINANCIAL RESULTS AS OF JUNE 30 2024

It should be noted that for both the first half of 2024 and the first half of 2023 there were no events and situations such as to highlight the presence of non-recurring costs and revenues.

The half-year results testify to the great resilience of Marzocchi Pompe, which, despite the difficult global economic situation, is maintaining its leadership position in the industry.

Summary of Half-Year Results

€ Millions	30 June 2024	30 June 2023	Change %
Sales Revenue	22.0	26.6	-17.3%
Production Value	22.5	27.5	-18.2%
EBITDA	3.23	4.95	-34.8%
EBITDA Margin1	14.6%	18.4%
EBIT	1.8	3.1	-42.2%
EBIT Adjusted 2	1.9	3.4	-43.3%
Earnings before Tax	1.4	2.7	-48.1%
Net Profit	1.3	2.1	-37.6%
€ Millions	30 June 2024	31 December 2023
Net Invested Capital	35.4	31.3	+13.1%
Net Equity	22.96	22.93	-
Net Financial Position	(7.0)	(5.3)	+31.1%

1 Calculated on sales revenue (A1) including change in work in progress and finished goods (A2)

2 Net of revaluation amortisation resulting from the merger from LBO executed in 2018 for the acquisition of the majority shareholding by Paolo Marzocchi through Abbey Road

The current worldwide market contraction could not fail to have an effect on Marzocchi Pompe revenues as well, which had posted record values in the last two years.

Net Revenues as at 30 June 2024 stood at € 22.0 million, down 17.3% from € 26.6 million as at 30 June 2023: an expected decline in line with the industry trend.

Consolidated sales for the first half of 2024 were affected by a general slowdown in the European and American industry, particularly in the Automotive sector, which recorded a drop of 34.3%, from € 5.3 million in H1 2023 to € 3.5 million in H1 2024. It should be noted, however, that this decrease is partially related to the life cycle of some end-applications: in recent years Marzocchi has acquired new contracts that will develop over a longer time horizon.

On the other hand, the drop in Core Business revenues, down 13.0% compared to the first half of 2023, is considered only temporary, as shown by the comparison with the second half of 2023, up +1.2%.

Eur 000	30-Jun-24		30-Jun-23		Change %
Sales Network	7,694	34.9%	9,790	36.8%	-21.4%
Automotive	3,535	16.1%	5,382	20.2%	-34.6%
Industrial	6,105	27.7%	6,116	23.0%	-0.2%
Mobile	4,683	21.3%	5,338	20.0%	-12.3%
Total Sales revenue	22,017	100.0%	26,626	100.0%	-17.3%
Of which
Core Business	18,482	83.9%	21,245	79.8%	-13.0%
Automotive	3,535	16.1%	5,382	20.2%	-34.3%

Breakdown of revenues by Sales Channel

At the geographic area level, there was an increase in the weight of the European market (excluding Italy), at 29% of total revenues (from 23.5% in H1 2023), against a slight decrease in the domestic market (to 29%, from 30.9%). America confirmed itself as Marzocchi largest market with 32% of revenues, albeit down from 36% in H1 2023 mainly due to the slowdown in the automotive industry.

The export share stood at 71%, unchanged from the whole of 2023 (71.6%).

EBITDA was € 3.23 million, down 34.8% vs. € 4.95 million in H1 2023.

The EBITDA margin, at 14.64% vs. 18.39% in H1 2023, was broadly in line with that of 2022 (15.22%), demonstrating the effectiveness of the actions aimed at recovering margins implemented this past year, which are continuing with unchanged vigor.

EBIT amounted to € 1.8 million, -42% vs. € 3.1 million as at 30 June 2023. Adjusted EBIT, calculated net of revaluation amortisation resulting from the merger transaction from LBO performed in 2018 amounting to € 0.13 million in the half-year, decreased to € 1.9 million, -43% vs. € 3.4 million at H1 2023.

The first half of 2024 closed with a Net Profit of € 1.3 million, -37.6% compared to € 2.1 million as at 30 June 2023.

Capital expenditure amounted to € 2.1 million, or 10% of sales, up from € 1.3 million (or 5% of sales) in the first half of 2023. Investments were mainly aimed at expanding production space at the Zola Predosa site, as part of the property rationalisation plan underway, aimed at significantly improving production and logistics efficiency.

Shareholders' Equity stood at € 22.96 million in the first half of 2024, unchanged vs. € 22.93 million at the end of 2023, net of the payment of the 2023 dividend in May of this year (€ 1.3 million +30% year-on-year, with a dividend yield of over 5%).

Eur 000	30-Jun-2024	31-Dec-2023
Share Capital	6,539	6,539
Share Premium reserve	6,463	6,463
Revaluation reserve	1,867	1,867
Legal reserve	1,308	1,159
Other reserves	5,689	4,051
Flow hedging transactions reserve	6	42
Profit(/loss) for the periods	1,313	3,006
Negative reserve treasury stock	(225)	(195)
Total Shareholders' Equity	22,960	22,932

Evolution of Shareholders' Equity

Net Financial Debt (calculated also including three- and six-month time deposits) rose to € 7.0 million, up 31% compared to 31 December 2023 (€ 5.3 million) due to various factors: investments for the expansion of the Zola Predosa site, the growth in working capital, as the reduction in orders for long-term purchase components will take place in the second half of the year, and the dividend payment.

The results of the first semester confirm the proven equity and financial solidity, as well as the validity of Marzocchi Pompe development strategy in a very challenging competitive scenario. The Group continues to invest both to improve efficiency and to fully seize all the growth opportunities that will arise at the restart of the market.

SIGNIFICANT EVENTS IN THE FIRST HALF OF 2024

In January, Marzocchi Pompe adopted the 'Organisation, Management and Control Model' prepared in accordance with Legislative Decree No. 231/2001, the so-called 'Model 231', together with a new version of the Code of Ethics, giving further impetus to the promotion of an ethical and regulatory-compliant corporate culture in the interest of all its stakeholders.

In the first half of 2024, work continued on optimizing logistics and production in Zola Predosa. After the expansion of the factory and the transfer of the shipping warehouse from the Casalecchio site, in February a new 2,500 square meter facility was purchased, 1,000 of which are covered, which will make it possible to unite the entire component warehouse in a single pole, further streamlining the operations of the production departments. The existing photovoltaic system will also be extended, which will have a positive impact both in terms of environmental impact and energy cost savings for the company.

In April, for the first time in its history, Marzocchi Pompe participated in the Aero Expo, at the Friedrichshafen airport exhibition center organized by Messe Frankfurt in Germany.

SIGNIFICANT EVENTS OCCURRING AFTER JUNE 2024

After 30 June 2024, no atypical or non-ordinary transactions took place that would require changes to these consolidated financial statements for the period.

In the second half of the year, Marzocchi Pompe plan to participate in the main trade fair events of the sector at a global level continued, exploring new business opportunities. In September, Marzocchi participated in the SMM boat show, at the Metropolis maritime exhibition center in Hamburg, dedicated to the marine and maritime industry.

In the first half of the year and the following months, the share buy-back programme continued. As of 27 September 2024, Marzocchi Pompe held a total of 57,250 treasury shares, representing 0.899% of the share capital.

FORESEEABLE DEVELOPMENTS IN OPERATIONS

Considering the short period of time since 30 June 2024 and also in light of the order book coverage as at the date of this press release, it is believed that the Group will be able to meet expectations for 2024, despite a second half of the year characterized by a further general slowdown in the world economy.

The Group proven equity and financial solidity guarantees, moreover, a large degree of financial autonomy, which allows it to continue with determination in its operational choices and in the implementation of its business development strategies; the wide diversification of the market segments in which the Group operates, some of which are still growing, put us in a position to continue with the commercial penetration program aimed at strengthening its market leadership position, as shown by the results achieved even in this not easy half-year period.

DOCUMENTATION STORAGE

A copy of the half-yearly financial report as at 30 June 2024, including the auditors' report, will be made available to the public within the terms of the law at the company's registered office in Bologna, as well as through publication on the institutional website https://www.marzocchipompe.com/it/bilanci-e-relazioni-periodiche-marzocchi-pompe and on the authorised storage mechanism managed by Computershare S.p.A.

***

The Management of Marzocchi Pompe will present by videoconference the first half 2024 results to Italian and international investors on 02 October 2024 at 10:00 a.m. CET.

Marzocchi Pompe presentation will be made public on the morning of the event on the Company website in the Investor Relations - Corporate Presentations section.

Pursuant to Article 17 of the Euronext Growth Milan Issuers' Regulations, the Company has updated the calendar of corporate events 2024 with an indication of the date on which the event will be held.

Marzocchi Pompe S.p.A.

Marzocchi Pompe is a leading company in the design, manufacturing and marketing of high performance gear pumps and motors, which find application in various fields: industrial, mobile and automotive. It closed 2023 with 49.7 million euro in sales revenue. Founded in 1949, it is controlled by the Marzocchi family, which holds the majority of shares and is represented in the company by Paolo Marzocchi, Chairman, and his son Carlo, Deputy Chairman. The shareholding structure also includes CEO Gabriele Bonfiglioli and three other managers. Production is carried out entirely in Italy at the two sites in Casalecchio di Reno (BO) and Zola Predosa (BO). Marzocchi Pompe is present in over 50 countries through an international distribution network.

Contatti

Marzocchi Pompe S.p.A. Integrae SIM S.p.A. – Euronext Growth Advisor Gabriele Bonfiglioli, CEO & IR ir@marzocchipompe.com Francesco D'Antonio francesco.dantonio@integraesim.it

Diego Carmignani diego.carmignani@integraesim.it

CDR Communication – Investor Relations e Media Relations

Paola Buratti (IR) paola.buratti@cdr-communication.it Martina Zuccherini (Media) martina.zuccherini@cdr-communication.it

The following are the main consolidated financial statements of Marzocchi Pompe S.p.A. for the half-year period ended 30 June 2023 compared with the corresponding comparative figures (amounts in Euro/000), and specifically

• profit and loss account; - balance sheet;

• cash flow statement.

CONSOLIDATED INCOME STATEMENT

(National Accounting Standards + IAS 17)

Eur 000	30-Jun-24		30-Jun-23
Sales revenue	22,017	100%	26,626	100%
WIP changes	58		317
Other revenues	412		511
PRODUCTION VALUE	22,487		27,455
Raw material consumption	(4,998)	(22.6%)	(6,872)	(25.5%)
Service costs	(5,853)	(26.5%)	(7,225)	(26.8%)
Costs for use of third-party goods	(209)	(0.9%)	(185)	(0.7%)
Various operating costs	(243)	(1.1%)	(273)	(1.0%)
VALUE ADDED	11,184	50.67%	12,899	47.87%
Staff costs	(7,953)	(36.0%)	(7,944)	(29.5%)
EBITDA	3,231	14.64%	4,955	18.39%
Depreciation and amortization	(1,455)	(6.6%)	(1,881)	(7.0%)
Accounting for contingencies	0	0.00%	0	0.00%
OPERATING PROFIT (EBIT)	1,776	8.05%	3,074	11.41%
Financial income and changes	(337)	(1.5%)	(359)	(1.3%)
Financial value adjustments	(18)	(0.1%)	(27)	(0.1%)
EARNINGS BEFORE TAX	1,422	6.44%	2,688	9.98%
Income tax of the year	(108)	(0.5%)	(585)	(2.2%)
NET INCOME	1,313	5.95%	2,104	7.81%

CONSOLIDATED BALANCE SHEET

(National Accounting Standards + IAS 17)

Eur 000	30-Jun-24	31-Jun-23
A) NET FIXED ASSETS	17,218	16,837
Intangible fixed assets	705	852
Tangible fixed assets	15,733	15,156
Financial fixed assets	780	828
B) NET WORKING CAPITAL	19,429	15,725
Inventories	12,431	12,794
Assets intended for sale	0	0
Advances from customers	(42)	(65)
Trade receivables	8,837	7,376
Other receivables	7,381	5,332
Trade payables	(4,678)	(5,791)
Other payables	(3,764)	(3,169)
Provisions for risks and charges	(1,035)	(1,014)
Other assets/liabilities	299	261
C) GROSS INVESTED CAPITAL	36,647	32,562
D) EMPLOYEE SEVERANCE PAY	(1,204)	(1,287)
E) NET INVESTED CAPITAL	35,443	31,275
Covered by
F) NET EQUITY	(22,960)	(22,932)
G) NET FINANCIAL POSITION (*)	(12,483)	(8,343)
Medium/long-term financial payables	(12,711)	(14,321)
Short-term financial payables	(5,419)	(5,954)
Cash and cash equivalents	5,647	11,932
H) TOTAL HEDGES	(35,443)	(31,275)

(*) It does not include 5,476 thousand bank deposits with restricted savings, a value that increased compared to the Euro 3,000 thousand existing as of December 31, 2023.

CONSOLIDATED CASH FLOW STATEMENT

(National Accounting Standards + IAS 17)

Eur 000	30-Jun-24	31-Dec-23
Operating profit [EBIT]	1,776	4,458
Tax effect	(108)	(710)
Change in funds	(62)	(678)
Provisions and write-downs	1,455	3,643
Income cash-flow	3,061	6,713
Change in working capital
Inventories	364	1,214
Trade receivables	(1,509)	866
Other receivables	(2,049)	(3,240)
Payables to suppliers	(1,113)	(880)
Other Payables	558	273
Changes in working capital	(3,749)	(1,767)
Operating Cash Flow (Free cash flow)	(688)	4,946
Net tangible & intangible investments	(1,861)	(3,679)
Change other fixed assets	59	719
Financial value adjustments	(18)	69
Cash Flow from Investing Activity	(1,820)	(2,891)
Financial charges/income	(337)	(811)
Share capital increases/(decreases)	0	0
Other equity changes	(1,285)	(1,482)
Cash flow from financial activities	(1,621)	(2,293)
Net Cash Flow	(4,129)	(238)
Start-of-period cash or (exposure)	(8,335)	(8,105)
End-of-period cash or (exposure)	(12,464)	(8,343)
Net cash increase (decrease)	(4,129)	(238)