Sabaf

Investor Presentation • Mar 20, 2024

www.sabafgroup.com www.sabafgroup.com

FINANCIAL PRESENTATION

STAR Conference 2024

Table of contents

• I. COMPANY PROFILE
• II. STRATEGIC MOVES
• III. FINANCIAL PERFORMANCE
• IV. SUSTAINABILITY

COMPANY PROFILE

Sabaf Group: product range evolution in 4 Business Units

SINCE 2000, further expansion since 2019 SINCE 2022

HINGES

• Ovens
• Dishwashers
• Washing machines
• Refrigerators
• Special applications
• Small compartments
• Catering appliances

Sabaf Group: evolution

Sabaf Group: leading producer of components for household appliances and company evolution in 4 Business Units

Sabaf Group: industrial footprint

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• 2021: 10 production plants
• 2023: 15 production plants

(6 in Italy and 9 abroad)

▪ 1,641 employees at 31st December 2023

Why invest in Sabaf Strategy for value creation

Sabaf Group Main shareholders

Cinzia Saleri S.a.p.a. Paloma Rheem Investments

Pietro Iotti, Sabaf CEO, owns 2.0% of voting rights

STRATEGIC MOVES

Strategic moves

Sabaf Induction: business strategy

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The Sabaf Group aims to become a key player in the large induction cooking market

Through this strategic investment Sabaf intends to turn out as leader and innovator not only in the mechanical sector, but also in electronics and new technologies

The inclusion of induction technology will lead the Group to be one of the few players able to fully cover all the three cooking surface technologies (gas, radiant and induction)

Sabaf aims to carry on along the sustainable growth path in the respect of the environment

This project will push Sabaf to a further evolution and deep transformation in the next few years

The Sabaf Group enters the

INDUCTION COOKING SECTOR

Sabaf Induction: business strategy

The European market of induction cooking components, estimated at around €500 million

• Steady growth for several years at a rate of over 10%
• Highly concentrated market with few players (Technological complexity)

Investment plan

▪ About €5 million in R&D in the period 2021 – 2023

▪ Setting up of a dedicated project team in Italy

R&D

MARKET

PROJECT

• Sabaf has developed its own project know-how internally by filing proprietary patents, software and hardware
• Creation of innovative products which better meet manufacturers' needs and new consumer trends
• The Group benefits from the expertise gained from the acquisitions of Okida and P.G.A. where part of the induction cooking components will be produced
• Team of more than 60 electronic engineers

The project flexibility will enable Sabaf to offer customised products to its clients

Sabaf Induction: business strategy

• 5 product platforms which cover the whole market (high, medium and basic range) with customisation opportunities
• All electronic parts are designed and manufactured inside the Group's factories
• Production/sales starting in 2024 first half
• Sabaf network for sales and distribution
• Positive customer feedback (agreements with some important players)
• Objective: at least 5% of the non-captive European market by 2026, further expansion in the following years

Mansfield acquisition

The company

• Mansfield Engineered Components LLC is based in Mansfield (Ohio)
• Leading North American manufacturer of hinges for household appliances (mainly ovens, washing machines and refrigerators), designed and manufactured to meet the high quality levels and demanding standards required by the US market
• Founded in 1987 by Bruce, Steven and Claudia Cummins who still own 49%

The acquisition

• 51% of the share capital
• Valuation → USD 21 million
• Call option in favor of Sabaf for the remaining 49% of MEC's share capital
• Put option in favor of the minority shareholders (exercisable from 2025 to 2028)
• The local management continues to run the company

The strategy

• The Sabaf Group, already present on the market for hinges for household appliances through its subsidiaries C.M.I. s.r.l. and Faringosi Hinges s.r.l., becomes the leading manufacturer of hinges for household appliances in the Western world.
• The direct presence in the United States, together with Sabaf Mexico, which has recently started the production of burners, will allow us to consolidate relations with major American players with which the Sabaf Group has excellent business relations and which are MEC's historical customers.
• The impact of sales in the North American market will account for 26% of the Sabaf Group's turnover, up from 16% in 2022

Capital increase

• In connection with the acquisition, a reserved capital increase - for a total value of € 17.3 million – took place on 20 July 2023
• The capital increase has been fully subscribed by Montinvest s.r.l., a company controlled by Fulvio Montipò (Founder and Chairman of Interpump Group S.p.A.), who is the ideal partner for the Company thanks to his unquestionable entrepreneurial experience.

Widening Industrial Footprint : Sabaf INDIA

SABAF INDIA

• Production: valves and burners for local market and potential export
• Investments: € 5.2 mn in 3 years
• Plot area: 24,000 sqm (built-up area 5,000 sqm)
• Actual capacity: € 6 mn (expandable)
• Sales start: 2Q 2023
• Good outlook for growth in the next 3 years: the rapidly growing Indian market confirms the validity of the investment strategy

Widening Industrial Footprint: Sabaf MEXICO

SABAF MEXICO

• Production: burners for North and Central America markets
• Investments: € 12 mn (plant and machinery) in 3 years
• Plot area: 23,300 sqm (built-up area12,950 sqm)
• Expected capacity: € 9 mn (fully booked and expandable)
• Start of production: 4Q 2023
• Start of sales: 1H 2024

FINANCIAL PERFORMANCE

Context analysis

Players

Greater penetration of Turkish and Chinese players in the European market

• Arcelik with WHP acquisition
• Haier with Candy acquisition
• Hisense with Gorenje acquisition

Evident weakening of the historical Western players

Reduction in consumer purchasing power

Low-value sales, unbranded household appliances

Competitors

The last 2 years highlight the difficulty of resilience of various competitors, this could lead to the possibility of M&A and/or increase market shares

Fourth quarter 2023 highlights

In 2023, the final demand was characterized by strong weakness, particularly in the first part of the year, with a stabilization in the second half of the year.

The signs of recovery that emerged in the second part of the year gradually consolidated, generating, in the last quarter, better results compared to those of the same period of 2022.

In this context, Sabaf reports significantly improved 4Q 23 results:

• Revenue: +18.3% (+6.6% on a like-for-like basis) vs. 4Q 22
• EBITDA +42.1% (+38.2% on a like-for-like basis) vs. 4Q 22

Performance data Income statement¹ - 4Q 2023

€ x 000	4Q 2023		4Q 2022		Δ % 4Q23 - 4Q22
Revenue	61,043	100.0%	51,430	100.0%	+18.7%
Start-up sales	(8)		-
Hyperinflation - Turkey	1,780		1,649
Adjusted revenue	62,815	100.0%	53,079	100.0%	+ 18.3%
EBITDA	7,466	12.2%	6,636	12.9%	+12.5%
Start-up costs	744		274
Hyperinflation - Turkey	470		(802)
Adjusted EBITDA	8,680	13.8%	6,108	11.5%	+ 42.1%
EBIT	2,276	3.7%	1,863	3.6%	+22.2%
Start-up costs	1,201		321
Hyperinflation - Turkey	886		(488)
Adjusted EBIT	4,363	6.9%	1,696	3.2%	+ 157.3%
Net result	1,738	2.8%	2,153	4.2%	-19.3%
Start-up costs	1,135		294
Hyperinflation - Turkey	2,882		2,159
Adjusted Net result	5,755	9.2%	4,606	8.7%	+ 24.9%

¹Adjusted income statement: results exclude the impact of the application of IAS 29 (Financial Reporting in Hyperinflationary Economies) and the start-up costs of Sabaf India, Sabaf Mexico and the Induction division. This representation allows a better understanding of the Group's performance and of its comparison with previous periods.

Performance data Income statement¹ - 12 months 2023

€ x 000	12 MONTHS 2023		12 MONTHS 2022		Δ % 12M23 -12M22
Revenue	237,949	100.0%	253,053	100.0%	-6.0%
Start-up sales	(23)		-
Hyperinflation - Turkey	1,160		(1,091)
Adjusted revenue	239,086	100.0%	251,962	100.0%	-5.1%
EBITDA	29,612	12.4%	40,092	15.8%	-26.1%
Start-up costs	2,649		704
Hyperinflation - Turkey	786		(4,469)
Adjusted EBITDA	33,047	13.8%	36,327	14.4%	-9.0%
EBIT	11,062	4.6%	21,887	8.6%	-49.5%
Start-up costs	3,724		820
Hyperinflation - Turkey	2,710		(2,838)
Adjusted EBIT	17,496	7.3%	19,869	7.9%	-11.9%
Net result	3,103	1.3%	15,249	6.0%	-79.7%
Start-up costs	3,530		756
Hyperinflation - Turkey	7,521		6,077
Adjusted Net result	14,154	5.9%	22,082	8.8%	-35.9%

¹Adjusted income statement: results exclude the impact of the application of IAS 29 (Financial Reporting in Hyperinflationary Economies) and the start-up costs of Sabaf India, Sabaf Mexico and the Induction division. This representation allows a better understanding of the Group's performance and of its comparison with previous periods.

Performance data Adjusted sales by market

€ x 000	12 MONTHS 2023	12 MONTHS 2022
Europe (excluding Turkey)	71,734	87,142	-17.7%
Turkey	63,419	65,994	-3.9%
North America	47,697	39,749	+20.0%
South America	27,858	28,481	-2.2%
Africa and Middle East	17,762	19,078	-6.9%
Asia and Oceania	10,616	11,518	-7.8%
Total	239,086	251,962	-5.1%

Performance data Adjusted sales by product

€ x 000	12 MONTHS 2023		12 MONTHS 2022
Gas	144,010	60%	157,983	63%	-8.8%
Hinges	70,410	29%	68,604	27%	+2.6%
Electronics	24,666	10%	25,375	10%	-+2.8%
Total	239,086	100%	251,962	100%	-5.1%

Performance data Balance Sheet - Reported

Balance Sheet - Reported
€ x 000	31/ 12/ 2023	30/ 09/ 2023	31/ 12/ 2022
Fixed assets	181,167	180,274	171,276
Inventories Trade receivables Tax receivables Other current receivables Trade payables Tax payables Other payables Net working capital Provisions for risks and severance	61,985 55,826 11,722 3,868 (42,521) (3,025) (16,007) 71,848	67,394 63,814 9,459 3,631 (40,257) (3,690) (14,794) 85,557	64,426 59,159 8,214 2,910 (39,628) (2,545) (13,156) 79,380
indemnity	(9,477)	(9,612)	(10,128)
Capital Employed Equity Net debt	243,538 170,388 73,150	256,219 172,548 83,671	240,528 156,162 84,366
Sources of finance	243,538	256,219	240,528

Performance data Cash flow statement

€ x 000	12 MONTHS	9 MONTHS	12 MONTHS
	2023	2023	2022
Cash at the beginning of the period	20,923	20,923	43,649
Net profit	3,380	1,701	15,249
Depreciation	20,066	14,847	18,267
Other income statement adjustments	5,229	5,532	1,885
Change in net working capital	4,079	1,720	3,890
- Change in inventories	7,375	107	10,312
- Change in receivables	2,438	(16)	(17,156)
- Change in payables	13,892	1,811	(2,954)
Other changes in operating items	(2,715)	(1,986)	(8,154)
Operating cash flow	39,852	21,905	24,293
Investments, net of disposals	(16,942)	(13,064)	(20,856)
Free Cash Flow	22,910	8,841	3,437
Cash flow from financial activity	(14,208)	(12,452)	(8,334)
Own shares buyback	(462)	(462)	(1,862)
Dividends	-	-	(6,690)
Share capital increase	17,312	17,312	-
Mansfield aquisition	(8,325)	(8,324)	-
PGA acquisition	(783)	(783)	(4,948)
Deconsolidation ARC Handan	-	-	(97)
Forex	(1,014)	521	(4,232)
Net financial flow	15,430	4,653	(22,726)
Cash at the end of the period	36,353	25,576	20,923

Investments: aimed at expanding the international production footprint. In Mexico, the work on the construction of the plant in San Luis de Potosi was completed.

In 2023 the positive free cash flow generated by the Sabaf Group was €22.9 million (€3.4 million in 2022).

Net financial debt :

• €73.2 million (€84.4 million at 31 December 2022)
• includes the financial liability of €11.7 million related to the recognition of the put option granted to the minority shareholders of MEC

Dividend proposal

The Board of Directors will propose to the shareholders the distribution of a gross ordinary dividend of €0.54 per share for shares outstanding on 28 May 2024 (the record date), excluding, therefore, treasury shares on that date

• The ex-date is scheduled for 27 May
• The payment date will be 29 May

2024 Outlook

2024 Outlook

The beginning of 2024 is characterised by a very positive business trend

• Based on the sales to date and the order book, we expect double-digit sales growth in the first quarter compared to the same period last year
• Orders for the second quarter confirm a similar trend

The recovery in production volumes will help to improve profitability

The technical and commercial synergies with the recently acquired companies (PGA and MEC), the product diversification initiatives (particularly in the induction cooking components segment) and internationalization (with the activities of the new production plants in India and Mexico) continue according to plan and will contribute to the 2024 results and ensure the Group's sustainable growth in the medium and long term.

SUSTAINABILITY

Sabaf: a sustainable business Sustainability in the Business plan 2021 - 2023

Sabaf's strategy and governance model are aimed towards ensuring long-term sustainable growth. For Sabaf, sustainability is primarily based on sharing values with its stakeholders; compliance with common values increases mutual trust and encourages knowledge development " "

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ESG Performance - Corporate Governance Remuneration policy

Environmental impact of different cooking fuels 1/3

About 30% of people on our planet, i.e. 2.5 billion people, are st on solid biomass fuels for cooking (wood, charcoal, animal dung, crop residues).

This population is mainly concentrated in Sub-Saharan Africa, where the unavailability of clean fuels affects 82% of the population, but significant percentages characterize also Central Asia, India, China, South-East Asia and Latin America.

In addition to being harmful to the environment, the pollution produced by traditional fuels has important consequences on the health of users and families.

The remaining 5.5 billion people use fossil fuels (mainly methane and LPG) or electricity for cooking.

Environmental impact of different cooking fuels 2/3

Environmental impact of different cooking fuels¹

The environmental impact was measured using a scientific standard method (the ReCiPE 2016), which is based on 3 impact categories:

• damage to human health
• damage to ecosystem quality
• damage to resource availability

The environmental impact was highest in the case of coal cooking appliances (112) and lowest for LPG and methane cooking appliances (5 and 5.2 respectively).

Electric cooking appliances, with an impact of 9, highlighted an environmental impact equal to 180% of that deriving from gas hobs

Cooking through a gas hob instead of using firewood as cooking fuel, reduces the environmental impact of 80%

¹ https://www.itjfs.com/index.php/ijfs/article/view/2170

Italian Journal of Food Science, 2022 – Environmental impact of the main household cooking systems – A survey, 2022 Alessio Cimini and Mauro Moresi, Università della Tuscia

Environmental impact of different cooking fuels 3/3

From the perspective of sustainable development, the reduction of the environmental impact resulting from cooking food will necessarily have to go through a dual strategy

Promote access to energy sources with lower impact for the population that still uses solid fuels

Favor electric cooking only where and when the energy production mix is characterized by a predominant component of green energy

The Sabaf Group pursue a business development path consistent with the ecological transition plans:

• Growing presence on international markets, also through the recent launch of a plant for the production of gas cooking components in India, will be able to contribute to the spread of gas cooking appliances in emerging countries, replacing traditional forms traditional cooking methods with high environmental impact.
• Equally strategic are the Group's investments to enter the sector of components for induction cooking, the most efficient form of electric cooking, the diffusion of which is constantly growing on the European market.

ESG Performance - Environment

CO² Emissions of gas hobs vs. electric induction hobs

A necessary condition for an induction hob to generate lower CO² emissions than a gas hob is that the electricity is produced with a % of renewable sources (or nuclear energy) greater than 70%

Countries that have less than 70% renewable energy pollute more if they use electric induction hobs than gas

ESG Performance - Environment High efficiency burners

A possible revolution - Hydrogen burners

The Sabaf Group actively participates in some experimental projects aimed at evaluating the feasibility of using hydrogen to replace natural gas (methane) as a power source for gas cooking appliances

Burners capable of operating with 100% hydrogen: aboratory tests and prototypes created have confirmed the technical feasibility of these products

The possibility of using hydrogen on a large scale as a fuel source still has to overcome important technological challenges, both in terms of its production and distribution

A solution that could find application in a relatively short time is the use of a mix of methane and hydrogen, through the existing distribution network

Hy4Heat project, promoted by the British government, concluded in 2022 with positive results

Pilot project in collaboration with the Colombian client Industrias Haceb → European Union Sustainability certification LCBA (Low Carbon and Circular Economy Business Action)

DISCLAIMER

Certain information included in this document is forward looking and is subject to important risks and uncertainties that could cause actual results to differ materially.

The Company's business is in the domestic appliance industry, with special reference to the gas cooking sector, and its outlook is predominantly based on its interpretation of what it considers to be the key economic factors affecting this business. Forward-looking statements with regard to the Group's business involve a number of important factors that are subject to change, including: the many interrelated factors that affect consumer confidence and worldwide demand for durable goods; general economic conditions in the Group's markets; actions of competitors; commodity prices; interest rates and currency exchange rates; political and civil unrest; and other risks and uncertainties.

Pursuant to Article 154/2, paragraph 2 of the Italian Consolidated Finance Act (Testo Unico della Finanza), the company's Financial Reporting Officer Gianluca Beschi declares that the financial disclosure contained in this financial presentation corresponds to the company's records, books and accounting entries.

For further information, please contact

Gianluca Beschi - +39.030.6843236 gianluca.beschi@sabaf.it