Annual Report • Apr 28, 2022
Annual Report
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ANNUAL REPORT
The creative concept of the Sabaf Annual Report 2021 focuses on the company's strategic vision, enabling to have a clear direction to follow, even within an unpredictable and turbulent scenario like the current one.
Sabaf's values, commitments and goals become real and tangible, carved like laws onto three-dimensional tablets, through aphorisms that faithfully condense an important principle into an expression that is powerful in its ability to be remembered and conveyed.
These seven panels describe Sabaf, a Group that aspires to be the author of its very own future.
Sabaf and environment Risks Health and safety, environmental and energy policy Process and product innovation and environmental sustainability Environmental impact Disputes Sabaf, the management of product quality and customer relations Risks Quality management policy Sabaf and supply chain management Risks Supply chain management policy Sabaf, Public Administration and Community Sabaf and shareholders Sabaf and lenders Sabaf and competitors EU Taxonomy GRI Content Index Independent auditors' report on the consolidated disclosure of non-financial information REPORT ON OPERATIONS
13 Summary of key performance indicators (KPI)
The publication of the Annual Report of the Sabaf Group, now in its seventeenth edition, confirms the Group's commitment, undertaken since 2005, to an integrated reporting of its economic, social, and environmental performance.
Sabaf, one of the first international-level companies to embrace the trend of integrated reporting, intends to continue along this path, aware that integrated, complete and transparent reporting can benefit both the companies themselves, through a better understanding of the structure of the strategy and greater internal cohesion, and the community of investors, which can thus more clearly understand the connection between strategy, governance and company performance.
The Annual Report provides an overview of the Group's business model and the process of creating corporate value. The business model and the main results achieved (summary of key performance indicators) are in fact presented from the standpoint of the capital employed (financial; social and relational; human; intellectual, infrastructural, and natural) to create value over time, thereby generating results for the business, with positive impacts on the community and on stakeholders as a whole. "Non-financial indicators" include the results achieved in managing and enhancing intangible capital, the main driver that allows monitoring the ability of the company's strategy to create value in a perspective of medium/long-term sustainability.
On 30 December 2016, Legislative Decree no. 254 came into force, which, in implementation of Directive 2014/95/EU on Non-financial and diversity information, requires relevant public interest entities to disclose non-financial and diversity information starting from the 2017 financial statements. As a relevant public-interest entity, Sabaf prepared for the fifth year the Consolidated disclosure of nonfinancial information presenting the main policies practiced by the company, the management models, the risks, the activities carried out by the Group during 2021, and the related performance indicators as pertains to the topics expressly referred to by Legislative Decree no. 254/2016 (environmental, social, personnel-related, respect for human rights, fight against corruption) and to the extent needed to ensure understanding of the business activity, its trend, its results, and the impacts it produces.
ECONOMIC CAPITAL 2021 2020 2019
| SALES REVENUES | €/000 | 263,259 | 184,906 | 155,923 |
|---|---|---|---|---|
| EBITDA | €/000 | 54,140 | 37,097 | 27,033 |
| EBIT | €/000 | 37,508 | 20,093 | 11,896 |
| PRE-TAX PROFIT | €/000 | 29,680 | 14,509 | 9,776 |
| NET PROFIT | €/000 | 23,903 | 13,961 | 9,915 |
| WORKING CAPITAL | €/000 | 68,631 | 52,229 | 49,693 |
| INVESTED CAPITAL | €/000 | 190,043 | 174,129 | 176,233 |
| SHAREHOLDERS' EQUITY | €/000 | 122,436 | 117,807 | 121,105 |
| NET FINANCIAL DEBT | €/000 | 67,607 | 56,322 | 55,128 |
| ROCE (RETURN ON CAPITAL EMPLOYED) |
% | 19.7 | 11.5 | 6.8 |
| DIVIDENDS PAID OUT | €/000 | 6,172 | 3,924 | 6,060 |
| TOTAL EMPLOYEES |
AVERAGE AGE OF PERSONNEL (sum of employee age/ total employees at 31/12) |
LEVEL OF EDUCATION (number of graduates/total employees at 31/12) |
LEAVING TURNOVER (employees no longer in office/ total employees at 31/12) |
||||||
|---|---|---|---|---|---|---|---|---|---|
| no. | % % |
YEARS | % | % | % | % | |||
| 2021 | 1,278 | 60.9 | 39.1 | 39.5 | 64.4 | 17.7 | 21.9 | 11.2 | |
| 2020 | 1,168 | 62.0 | 38.0 | 39.3 | 61.6 | 10.8 | 11.5 | 9.7 | |
| 2019 | 1,035 | 63.5 | 36.5 | 39.8 | 59.1 | 9.1 | 10.2 | 7.1 |
INJURY LOST DAY RATE1 (days of absence x 1,000/total hours worked)
SUMMARY INDICATOR OF INJURIES (injury rate x injury lost day rate x 100) JOBS CREATED (LOST)
no.
| 2021 | 0.21 | 327 | 110 |
|---|---|---|---|
| 2020 | 0.11 | 177 | 133 |
| 2019 | 0.51 | 539 | 15 |
1 The 2019 injury lost day rate has been restated due to the continued absence of an injury in 2021.
t
MWh
t
kg in €/000
CO2 emissions (scope 1+scope 2 market-based)
Intensity of CO2 emissions (scope 1 and 2 market-based emissions/turnover)
m3
tCO2eq tCO2eq/millions of Euro
3 The indicator does not include data relating to the Polish branch of C.M.I..
4 The indicator does not include data relating to C.G.D. s.r.l..
| INTELLECTUAL CAPITAL | 2021 | 2020 | 2019 |
|---|---|---|---|
| Capitalised investments | €/000 | €/000 | €/000 |
| in research and development | 1,770 | 465 | 460 |
| Hours dedicated to the development | % | % | % |
| of new products/hours worked5 | 3.1 | 3.3 | 1.0 |
| Hours dedicated to process engineering/hours worked (hours dedicated to orders for the construction of new machines for new products or to increase production capacity/total hours worked) |
% 1.7 |
% 2.6 |
% 2.2 |
| Investments | % | % | % |
| in intangible assets/turnover | 0.8 | 0.6 | 0.7 |
| Value of waste/turnover | % | % | % |
| (production waste/turnover) | 0.48 | 0.48 | 0.47 |
| Impact of quality costs/turnover | % | % | % |
| (charges and returns from customers/turnover) | 0.05 | 0.13 | 0.14 |
| Number of samples | no. | no. | no. |
| for customers | 5,571 | 5,034 | 6,184 |
5 The 2019 data does not include the C.M.I. Group and Okida.
Historically, the Sabaf Group is one of the world's leading manufacturers of components for household gas cooking appliances, with a market share of about 40% in Europe and over 10% worldwide.
In recent years, through a policy of organic investments and through acquisitions, the Group expanded its product range and is now active in the following segments of the household appliance market:
The reference market is represented by manufacturers of household appliances. The range also includes products for the professional sector.
On 23 March 2021, the Board of Directors approved the 2021-2023 Business Plan. The aim was to accelerate growth, both organic and through acquisitions, which was positively launched with the carrying-out of the 2018-2020 Plan.
The Business Plan set a revenue target of €300 million in 2023, gross profitability (EBITDA%) of at least 19%, and an improvement in return on invested capital (ROI) of at least one percentage point from 11.5% in 2020.
Over the three-year period, total investments of €130 million (including those for M&A) were planned.
The Group has set an average annual growth target for sales of more than 10%. Organic growth will be supported by strengthening technical and commercial relations with some of the major global players.
Research and development activities will increasingly focus on the study of ad hoc solutions to meet the specific needs of individual markets and the design of customised products.
Therefore, the industrial footprint to 2023 envisaged 13 production plants, of which 5 in Italy and 8 abroad with new sites in India, Turkey and Mexico.
The Group is also determinedly pursuing new growth opportunities through acquisitions and/or joint ventures, which will be aimed at further extending the product range and fully exploiting the Group's production potential.
With the new Plan, the Group promotes the improvement of the quality of the environment and the community in which it operates so that the basic needs of all are met in an environmentally sustainable way. To this end, specific objectives are defined in the Plan, such as the reduction of emissions, safety at work and the growth of its own people through training.
Valves: they regulate the flow of gas to the covered (of the oven or grill) or uncovered burners.
Burners: by mixing the gas with air and burning the gases used, they produce one or more flame rings.
Accessories: include spark plugs, microswitches, injectors and other components to complete the range.
They allow movement and balancing when opening and closing the oven door, washing machine door or dishwasher door.
Electronic control boards, timers and display and power units for ovens, refrigerators, freezers, hoods and other products.
In line with the followed commercial policies, most of the active commercial relations are characterised by relations consolidated over the long term. There are 48 customers with annual sales of more
2021 2020 2019
than €48 million (32 in 2020). The distribution by class of turnover is as follows:
| (no.) | 2021 | 2020 | 2019 |
|---|---|---|---|
| > €5,000,000 | 15 | 10 | 7 |
| from €1,000,001 to €5,000,000 | 33 | 22 | 25 |
| from €500,001 to €1,000,000 | 18 | 24 | 16 |
| from €100,001 to €500,000 | 81 | 64 | 75 |
| < €100,000 | 271 | 279 | 279 |
| Total customers | 418 | 399 | 402 |
6 Data processed considering customers with sales above €1,000.
INTRODUCTION TO THE ANNUAL REPORT
7 Including agency workers and trainees.
PERFORMANCE DATA ANALYSIS OF THE SCENARIO 8
Europe has historically been the Sabaf Group's main market. European household appliance production is char-
EUROPE (EXCLUDING TURKEY)
acterised by high quality, innovative contents - especially in terms of digitalisation and energy efficiency - and design. Therefore, the demand for components is also increasingly characterised by more technological and higher performance goods.
Turkey is the main production hub of household appliances for the European market. In this context, the opening of a production plant in 2012 and the acquisition of Okida Elektronik (September 2018) were key elements in support of the growth strategy. In 2021, Sabaf opened a new plant in Turkey to increase production capacity for electronic components.
Sabaf estimates that about 75% of sales in Turkey are exported by our customers; however, the Turkish domestic market is of increasing importance although subject to the fluctuations that can characterise emerging economies, such as currency crises and high inflation.
The Group's strategy is to further develop its activities in Turkey as early as 2022.
Sabaf's presence in North America is relatively recent, but sales and market share have been growing steadily in recent years, also thanks to the development of codesigned products with major customers.
In 2021, the Group acquired a plot of land in San Luis de
Potosi (Mexico), where work began on the construction of a plant for the production of burners and hinges.
We believe that the direct presence in North America, which will enable us to cut time and logistical costs, foreshadows further development opportunities.
8 Sales by geographical area (€/000) and percentage incidence on Group sales.
Sabaf has a well-established presence in Brazil (one plant has been operational since 2001).
The Sabaf Group believes that the development potential of this area is extremely interesting, considering the significant size of the market and the demographic growth trends. The product range for the local market was recently expanded, with the production of special burners in Brazil, also to meet the specific nature of demand.
Other markets of great interest to the Group are those in the Andean area.
Sabaf has a long-standing presence and reputation in the Middle East and Africa.
The Group considers the Middle East and Africa among the
most promising markets in the medium term, also in view of demographic trends and the growing rate of urbanisation.
China, with its production of more than 30 million hobs per year, is the most important market in the world. The Group aims to establish long-term partnerships with major Chinese customers. Another market with great potential is the Indian market, for which Sabaf developed a range of dedicated burners: a production site was acquired in Hosur (Tamil Nadu) in 2020, where production of gas parts will begin in 2022.
Although sales in China and India still represent a small share of Sabaf's total business, these areas are a strategic priority for the Group.
prepared pursuant to Article 4 of Legislative Decree 254/2016
The consolidated disclosure of non-financial information of the Sabaf Group (hereinafter also referred to as the "Disclosure"), prepared in accordance with Art. 4 of Legislative Decree 254/2016 as amended (hereinafter also referred to as the "Decree"), contains information (policies practiced, risks and related management methods, management models and performance indicators) on environmental, social, personnel, human rights and anti-corruption issues, to the extent necessary to ensure understanding of the activities carried out by the Group, its performance, results and impact. Each section also describes the main risks, generated or suffered, related to the above issues and deriving from the Group's activities.
The Sabaf Group identified the GRI Sustainability Reporting Standards (hereinafter also referred to as "GRI Standards") published by the Global Reporting Initiative (GRI) as the "reference standard" for fulfilling the obligations of Legislative Decree 254/2016, as the most widely recognised and internationally disseminated Guidelines. As from 2019, Sabaf reports on occupational health and safety using the GRI 403 indicator: Occupational Health and Safety 2018; as from 2020, it reports on taxes using the GRI 207 indicator: Tax 2019; as from 2021, it reports on waste using the GRI 306 indicator: Waste 2020.
This Disclosure is prepared according to the "in accordance - core" reporting option. The process of defining the contents and determining the material topics, also in relation to the areas envisaged by the Decree, was based on the principles envisaged by GRI Standards (materiality, stakeholder inclusiveness, sustainability context, completeness, comparability, accuracy, timeliness, clarity, reliability and balance). To help readers find the information in the document, the GRI Content Index is at the bottom of the disclosure.
This Disclosure was approved by the Board of Directors on 22 March 2022 and will be prepared annually. In accordance with one of the options envisaged by Art. 5 of Legislative Decree 254/2016, it constitutes a separate report from the Report on operations. Moreover, this Disclosure is subject to limited review according to ISAE 3000 Revised by the independent auditors EY S.p.A., appointed to audit the Group's accounts.
The reporting boundary of qualitative and quantitative data and information contained in the Consolidated Disclosure of Non-Financial Information of the Sabaf Group refers to the performance of the Sabaf Group (hereinafter also referred to as "Group" or "Sabaf") for the year ended 31 December 2021 and includes all companies consolidated on a line-by-line basis, except for:
The 2019 data relating to the C.M.I. Group is consolidated from the date Sabaf acquired control (31 July 2019). Any exceptions are clearly indicated in the text at specific indicators.
In 2019, the Board of Directors of Sabaf S.p.A. approved a procedure for the reporting process of non-financial information. The procedure defines the phases, activities, timing, roles and responsibilities for the management of the reporting process and for the definition, collection and validation of data and other contents of the Disclosure.
The procedure, which has been applied for the preparation of this Disclosure, envisages the involvement of the parent company's management ("group data owners") and the representatives of all subsidiaries ("subsidiary data owners"), who are responsible for the relevant areas and the related data and information covered by the Group's non-financial reporting.
In particular, the data and information included in this Disclosure derive from the company information system used for the management and accounting of the Group and from a non-financial reporting system (data collection package) specifically implemented to meet the requirements of Legislative Decree 254/2016 and GRI Standards. In order to ensure the reliability of the information contained in the Disclosure, directly measurable quantities have been included, limiting the use of estimates as much as possible. Calculations are based on the best information available or on sample surveys. The estimated quantities are clearly indicated as such. The economic and financial data and information are derived from the Consolidated Financial Statements at 31 December 2021.
An assessment of 2021 can only start with a very satisfying figure: the Sabaf Group achieved its highest ever revenues and margins for the year. This extraordinary performance reflects a particularly favourable market phase, but also rewards the strategic direction followed in recent years and the management choices that have accompanied it.
Let us start with the market. In 2021, global demand for household goods, already fuelled in the previous year by the new lifestyles imposed by the pandemic, remained at high levels. The growth in demand, estimated at 10%-15%, gave a strong boost to orders, also driven by the acquisition of new market shares. The Group was ready to handle this massive growth (over 40% compared to 2020) and was able to cope with its intensity: it was a test of resilience that our organisation passed brilliantly.
The record results prove the validity of the path of change started in 2018 to which I will return later in this letter. Suffice it to say that the expansion, through acquisitions, of the offered range of products, the development of synergies between the components of the Group and the strengthening of the industrial footprint significantly increased our development potential, which the market momentum has allowed us to fully exploit.
The organisation's ability to overcome difficulties also explains the performance. In 2021, the effects of the pandemic continued to obstruct operations. The climate of uncertainty that a phenomenon of this magnitude and extension generates, already an obstacle in itself in that it influences the strategic decisions of economic operators, was accompanied by the critical issues generated by the global economic recovery. It was difficult to manage logistics, the costs of which increased exponentially, to source raw materials, to absorb rising energy costs and to organise the work of employees. We have succeeded in doing this by negotiating sales price adjustments with our customers and implementing measures to reduce energy consumption, starting with measures to increase the efficiency of the most energy-intensive systems.
Last, but certainly not least, I would like to emphasise that the results of the 2021 financial year would not have been possible without the extraordinary commitment of our 1,500 employees, whose professionalism and dedication, already decisive in ensuring continuity of production after the outbreak of the pandemic, was also evident in 2021.
Going beyond the results, it is appropriate to dwell on how Sabaf is moving to ensure in the long term, for shareholders and stakeholders, a constant generation of economic and social value. With the business plan presented in 2018, updated in 2021, we have initiated a transformation aimed at a new market positioning: from a company mainly focused on gas cooking parts to an all-round player in smart appliances. The objective reflects a clear view of how consumption patterns and the global economy trends are evolving (including the income of Countries with the best growth prospects) and of the qualities our customers will demand of component suppliers. Sabaf is a player committed to improving the quality of domestic life.
This strategic policy was translated into actions that have already allowed us to increase our product portfolio, adding electronic components (displays and timers for programming ovens, electronic hobs, fridges, hood control boards) to the mechanical components (where our international leadership is solid). The path will continue, both with the development of new proprietary products and by evaluating acquisitions of specialised manufacturers.
Thanks in part to our financial strength, we are supporting the expansion of the offer with strong investments that came to €23.8 million in 2021, up from €17.3 million in 2020 and €12 million in 2019. We can say that today we have the skills and technologies to offer, even in the electronics
segment, competitive and cutting-edge products on energy transition.
We continue to increase production capacity with a threefold objective: to support the growth in demand, to be closer to our customers' plants to serve them better and to reduce logistics and transport costs. A new unit in India is nearing completion in the first half of this year. It will produce gas cooking parts for the domestic market and for a number of large players, already our customers, who have recently located to the Country. Work is underway on a new plant in Mexico, in San Luis de Potosi, which will serve the North American market from early 2023. In Turkey, the production capacity of the Electronics Division was doubled and production lines for gas valves and hinges for dishwashers were set up. Ospitaletto is, and will remain, the heart of the Group, home to its know-how and expertise.
The integration of the Environment, Social and Governance (ESG) principles into our organisation plays a central role in this process. Our company's and consumers' awareness of the environmental and social impact of production activities, already widespread globally for some time, has grown in the last two years. Inevitably, rules and regulations governing the compliance of institutional investors and banks with ESG principles are evolving in a more restrictive direction, which has become a pre-condition for accessing capital markets. There is much to be done, but Sabaf, which has been publishing its own Sustainability Report since 2000, can already claim to have adopted all three policy components that place it at the highest international standards. We are ahead, even though we know we have work to do because the path of ESG, like that of quality, requires continuous improvement.
I would like to close with a reference to the first quarter of 2022, marked by the beginning of the conflict between Russia and Ukraine. The outcome is, by definition, as unpredictable as the evolution of the geopolitical framework that will emerge. The Group's exposure to the effects of this crisis is mainly related to the increased costs of energy, raw materials and transport. We have taken steps to mitigate these effects, adjusting sales lists thanks to excellent customer relations (which recognised that it was necessary) and the production flexibility of our industrial footprint. We have also partially covered ourselves against this situation by signing some supply contracts at fixed prices and by increasing efficiency in cost control.
We have a solid organisation and the professional qualities required to cope with volatile times. This, I believe, is the best way to ensure the stability of the company despite the adverse and unpredictable events that this situation could generate.
2022 started with a very good flow of incoming orders from the main markets in which we operate. We are confident that this trend will be consolidated in the coming months, also thanks to new orders. We expect, net of a further escalation of the conflict, revenue growth compared to 2021.
Therefore, I believe that Sabaf will be able to cope successfully with the difficult times we are going through and continue to pursue its growth objectives.
Pietro Iotti
For the Sabaf Group, respect for business ethics and socially responsible behaviour are the fundamental elements of its business model. Accordingly, the Group developed a strategy and a governance model that can guarantee sustainable success over time.
The Sabaf Group is aware that sustainable success depends on the degree of harmony and the sharing of values with its stakeholders: compliance with common values increases mutual trust, encourages the development of common knowledge, and therefore contributes to the containment of transaction costs and control costs; in essence, it benefits the Group and all its stakeholders.
Sabaf takes the Person as its original value and therefore as the fundamental criterion of every choice: this results in an entrepreneurial vision that ensures dignity and freedom to the Person within shared rules of behaviour. The centricity of the Person represents a universal value, i.e. a hyper-standard applicable without differences in time and space. In compliance with this universal value, the Sabaf Group operates by promoting cultural diversity through the criterion of equity in space and time. Such a moral commitment implies an a priori renunciation of all choices that do not respect the physical, cultural and moral integrity of the Person, even if such decisions can be efficient, economically convenient and legally acceptable. Respecting the value of the Person means that, first of all, the dimension of the category of Being in relation to Doing and Having is the overriding consideration, and therefore implies the protection and enhancement of the "essential" manifestations expressing the fullness of the Person.
The Charter of Values is the governance tool through which the Sabaf Group clearly explains the Company's values, standards of behaviour and commitments in relations with its stakeholders – employees, shareholders, customers, suppliers, lenders, the Public Administration, the community and the environment.
The spirit of the Charter is to reconcile the principles of economic management with ethics based on the centricity of Man, as an essential condition for the sustainable success of business in the long term. Sustainable success, intended as the ability to combine at the same time:
for the benefit of future generations in compliance with current laws on the subject.
The Charter aims to give a vision of ethics, focusing mainly on positive and just actions to be taken and not only on incorrect behaviour to be avoided. This vision is the basis for a positive use of freedom by decision-makers, where ethical references guide decisions in a manner consistent with the Group's culture of social responsibility. The Sabaf Group aims to develop a process based on people being given a sense of responsibility within shared rules of behaviour with which to voluntarily comply.
According to this approach, it is still imperative to comply absolutely with the law and regulations in force in Italy and in the other countries where the Group operates, as well as with all the internal regulations of the Group and the values declared in the Charter.
The Charter of Values also represents a reference document as part of the Organisation, Management and Control Model pursuant to Legislative Decree 231/2001 and, as such, sets out a series of general rules of behaviour Group employees are required to comply with.
Table summarising the Policies of the Sabaf Group with reference to the contents of Legislative Decree 254/2016 as amended
| Topic envisaged by Legislative Decree 254/2016 | Reference policies |
|---|---|
| ENVIRONMENT | |
| Basic principles • Raise staff awareness and train the personnel to promote environmental awareness • Minimise direct and indirect environmental impacts • Adopt a precautionary approach to environmental impacts • Encourage the development and diffusion of environmentally friendly technologies and products • Define environmental objectives and improvement programmes • Search for the right balance between economic objectives and environmental sustainability |
• Charter of Values • Manual of the Integrated Management System of Health and Safety, Environment and Energy in compliance with ISO 14001, ISO 50001 and ISO 45001 standards |
| HUMAN RIGHTS | |
| Basic principles • Adopt socially responsible behaviour • Promote respect for the fundamental human rights of workers in all countries where the Group operates • Avoid all forms of discrimination and favouritism in respect of employment and occupation • Enhance and respect diversity |
• Charter of Values |
| PERSONNEL | |
| Basic principles • Encourage continuous learning, professional growth and knowledge sharing • Provide clear and transparent information on the tasks to be carried out and the position held • Encourage teamwork and the dissemination of creativity in order to allow the full expression of individual skills • Adopt criteria of merit and competence in employment relationships • Encourage the involvement and satisfaction of all the personnel |
• Charter of Values |
| PERSONNEL/HEALTH AND SAFETY | |
| Basic principles • Reach working standards that guarantee health and maximum safety, also through the modernisation and continuous improvement of workplaces • Minimise any form of exposure to risks at work • Disseminate the culture of risk prevention through systematic and effective training • Promote the protection not only of oneself, but also of colleagues and third parties • Encourage the diffusion of products with security systems |
• Charter of Values • Manual of the Integrated Management System of Health and Safety, Environment and Energy in compliance with ISO 14001, ISO 50001 and ISO 45001 standards |
| ANTI-CORRUPTION | |
| Basic principles • Raise awareness among all those who work for Sabaf so that they behave correctly and transparently in the performance of their activities • Comply with local anti-corruption regulations |
• Group Anti-corruption Policy • Organisation, management and control Model pursuant to Legislative Decree 231/2001 |
| SOCIAL/SUPPLY CHAIN | |
| Basic principles • Ensure absolute impartiality in the choice of suppliers • Establish long-term relationships based on fairness in negotiations, integrity and contractual fairness |
• Charter of Values |
The Charter of Values and the Anti-corruption Policy are applied and disseminated in all Group companies. Sabaf S.p.A. has an integrated Health and Safety, Environment and Energy management system certified to ISO 45001, ISO 14001 and ISO 50001. Faringosi Hinges s.r.l. and C.G.D. s.r.l. adopt a Health and Safety management system certified and compliant with ISO 45001 standard.
In any case, the ISO 14001, ISO 45001 and ISO 50001 standards are sources of reference and inspiration for the entire Group.
The Organisation, Management and Control Model pursuant to Legislative Decree 231/2001 is adopted by Sabaf S.p.A. and Faringosi Hinges s.r.l. and, limited to the part concerning Occupational Health and Safety, by C.G.D. s.r.l. and C.M.I. s.r.l.
Combine business decisions and results with ethical values by going beyond family capitalism and opting for a managerial rationale oriented not only towards the creation of value but also towards the respect of values.
Consolidate the technological and market leadership in the design, production and distribution of the entire range of components for household appliances through constant attention to innovation, safety and the enhancement of internal expertise. Associate the growth of company services with social and environmental sustainability, promoting an open dialogue with the legitimate expectations of stakeholders.
In line with its shared values and mission, Sabaf believes that there is a successful industrial and cultural model to be consolidated both through organic growth and growth through acquisitions. The Group believes that its business model - oriented towards long-term sustainability and characterised by a high level of verticalisation of production and production facilities close to the main markets - is adequate to face future challenges and new scenarios.
The distinctive features of the Sabaf model are set below.
Innovation represents one of the essential elements of Sabaf's industrial model and one of its main strategic levers. Thanks to continuous innovation, the Group has managed to achieve excellent results, identifying technological and production solutions that are among the most advanced and effective currently available and establishing a virtuous circle of continuous improvement of processes and products, until acquiring technological competence with characteristics that are difficult to match for competitors. The know-how acquired over the years in the development and internal production of machinery, tools and moulds, which is integrated synergistically with the know-how in the development and production of our products, represents the main critical success factor of the Group. With the acquisition of Okida, Sabaf has also acquired a strong electronic know-how that, together with the traditional and strong mechanical skills, can further expand the business spaces for the Group.
The investments in innovation allowed the Group to become a world leader in a highly specialised sector. The production sites in Italy and abroad are designed to guarantee products according to the highest levels of technology available today and represent a cutting-edge model both for environmental protection and safety of the employees.
Sabaf's product innovation strategy gives priority to the search for improved environmental performance. Attention to environmental issues is reflected both in innovative production processes that have a lower energy impact in the manufacture of products, and for what concerns gas parts, in the design of eco-efficient products during their daily use. Innovation efforts in this area are directed towards the development of burners that reduce fuel consumption (natural gas or other gases) and emissions (carbon dioxide and carbon monoxide, in particular) in users.
Safety has always been one of the essential elements of Sabaf's business project. Safety for Sabaf is not just a matter of complying with existing standards but a management philosophy oriented towards the continuous improvement of its performance, in order to guarantee the end user an increasingly safe product. In addition to investing in research and development of new products, the Group has chosen to play an active role in disseminating a safety culture: Sabaf has long been promoting the introduction of regulations worldwide - in the various institutional venues - that make it compulsory to adopt products with thermoelectric safety devices. Sabaf also promoted the ban on the use of zamak (zinc and aluminium alloy) for the production of gas valves for cooking, in consideration of the intrinsic danger. To date, the use of zamak is still permitted in Brazil, Mexico and other South American countries, limiting business opportunities in the valves segment for Sabaf.
Sabaf pursues its growth through its success in international markets by trying to replicate its industrial model in emerging countries with due consideration of local culture.
In line with its reference values and mission, the Group operates in emerging Countries in full respect of human rights and the environment and in compliance with the United Nations Code of Conduct for Transnational Corporations. This choice is driven by the awareness that only by operating in a socially responsible way it is possible to ensure long-term development of industrial experience in emerging markets.
The Group also intends to further strengthen its collaboration with customers and its position as main supplier of a complete range of products in the cooking components market, also thanks to its ability to adapt production processes to specific customer needs and provide an increasingly wide range of products.
In relations with large household appliance groups, the reliability of partners along the supply chain is more than ever an essential requirement. The presence of production facilities in all strategic geographical areas, the ability to react immediately to sudden changes in macroeconomic scenarios - such as those brought about by the pandemic - and financial solidity put the Sabaf Group in a favourable position compared to smaller, less structured competitors.
CONSOLIDATED DISCLOSURE OF NON-FINANCIAL INFORMATION SABAF . 2021 ANNUAL REPORT
The continuous expansion of the range aims to increase customer loyalty through the widest satisfaction of market requirements. The possibility of offering a complete range of components is an additional distinguishing feature for Sabaf compared to its competitors. In order to sustain a dynamic growth path, the Group intends to extend its product range to other components for household appliances. This expansion is pursued both through internal research and through growth through acquisitions, assessing opportunities for partnerships and acquisitions of other companies. Examples of this are the acquisition of A.R.C. s.r.l. in 2016 and 100% in Okida in 2018, through which Sabaf entered the professional burners and electronic components for household appliance sectors. Finally, in 2019, Sabaf acquired control of the C.M.I. Group, an important manufacturer of hinges for ovens and dishwashers, significantly strengthening its position also in this product range where it was already present through Faringosi Hinges.
Sabaf carefully monitors and increases the value of its intangible assets: the high technical and professional competence of the people who work there, the image synonymous with quality and reliability, the reputation of a company attentive to social and environmental issues and the requirements of its stakeholders.
The promotion of the idea of work and relations with stakeholders as a passion for a project based on common values in which everyone can recognise themselves symmetrically represents not only a moral commitment, but the real guarantee of enhancement of intangible assets. In this perspective, the sharing of values represents the link between the promotion of a corporate culture oriented towards social responsibility and the enhancement of its intellectual capital.
1
· Sales revenue +42.4% · EBITDA as a percentage of sales 20.6%
2
and equipment 84,718,000 €
· Burners sold no. of parts 44,218,936
5
· Water used 99,739 m3
· Waste (kg) on economic value generated by the Group (€/1,000) 45
6
39
The analysis of the determination and distribution of economic value among stakeholders, prepared in accordance with the indications of the GRI is shown below.
The table was prepared distinguishing between three levels of economic value. The generated one, the distributed one and the one retained by the Group. The economic value represents the overall wealth created by Sabaf, which is then distributed among the various stakeholders: suppliers (operating costs), employees, lenders, shareholders, public administration and community (external perks).
| (€/000) | 2021 | 2020 | Change |
|---|---|---|---|
| ECONOMIC VALUE GENERATED BY THE GROUP | 267,918 | 190,001 | 77,917 |
| Revenue | 263,259 | 184,906 | 78,353 |
| Other income | 8,649 | 7,184 | 1,465 |
| Financial income | 750 | 1,366 | (616) |
| Value adjustments | 2,525 | 1,502 | 1,023 |
| Bad debt provision | (103) | (118) | 15 |
| Exchange rate differences | (7,399) | (4,811) | (2,588) |
| Income/expenses from the sale of property, plant and equipment and intangible assets |
237 | 105 | 132 |
| Value adjustments to property, plant and equipment and intangible assets | 0 | (141) | 141 |
| Profits/losses from equity investments | 0 | 8 | (8) |
| ECONOMIC VALUE DISTRIBUTED BY THE GROUP | 232,521 | 161,995 | 70,526 |
| Remuneration of suppliers | 166,164 | 112,014 | 54,150 |
| Remuneration of employees | 53,964 | 43,700 | 10,264 |
| Remuneration of lenders | 1,179 | 2,146 | (967) |
| Remuneration of shareholders | 6,172 | 3,924 | 2,248 |
| Remuneration of the Public Administration1 | 4,997 | 150 | 4,847 |
| External perks | 45 | 61 | (16) |
| ECONOMIC VALUE RETAINED BY THE GROUP | 35,397 | 28,006 | 7,391 |
| Depreciations and amortisation | 16,869 | 16,968 | (99) |
| Provisions | 29 | 612 | (583) |
| Use of provisions | (12) | (10) | (2) |
| Reserves | 18,511 | 10,436 | 8,075 |
To transform the values and principles of sustainable development into intervention choices and management activities, Sabaf applies a structured methodology, the key factors of which are as follows:
The awareness of the social and environmental aspects that accompany the Group's activities, together with the consideration of the importance of a cooperative approach with stakeholders and the Group's good reputation, has led Sabaf to adopt a precautionary approach in managing the economic, social and environmental variables that it has to manage on a daily basis. To this end, the Group analysed specifically the main risks of the different operating dimensions. Detailed information on the internal control system and on the risk management system is provided in the next paragraph "Corporate Governance, Risk Management and Compliance".
Sabaf is committed to constantly strengthening the social value of its business activities through careful management of relations with stakeholders. The Group intends to establish an open and transparent dialogue, encouraging opportunities for discussion in order to identify lawful expectations, increase trust in the Group, manage risks and identify new opportunities.
The identification of stakeholders is an essential starting point for defining social and environmental reporting processes. The "stakeholder map" provides a summary representation of Sabaf's main stakeholders, identified on the basis of their business characteristics, the characteristic aspects of the market and the intensity of their relations with the latter. The Annual Report is the preferred communication tool for presenting the significant economic, social and environmental performance achieved during the year. The initiatives for involving each stakeholder that are carried out periodically are described in the previous table (generally every two or three years). In 2021, as a result of pandemic containment restrictions, some engagement activities took place remotely. The relevant issues arising from these activities are reported in the following paragraphs.
Sabaf complies with the code of conduct of APPLiA Europe, an association of manufacturers of household appliances representing companies in the household appliances industry.
The Code of Conduct confirms the commitment of the European household appliance industry to ethical and fair behaviour. The Code aims to promote fair and sustainable standards in working conditions and environmental protection to support fair competition in global markets.
The producers complying with the Code commit themselves voluntarily to implement decent working conditions, which include compliance with common standards regarding:
MINIMUM AGE
WORKING HOURS
HYGIENE AND SAFETY CONDITIONS
RESPECT FOR FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
RESPECT FOR ENVIRONMENTAL STANDARDS
The signatory companies also undertake to raise awareness among their suppliers of the principles of the Code of Conduct and encourage them to pursue them. They also require that the same principles be proposed to the whole supply chain through the latter.
The Annual Report of Sabaf is also the tool through which the Group reports year by year on the practical implementation of the principles of the Code and the progress achieved, as specifically required of the companies complying with it.
In 2004, Sabaf complied formally with the Global Compact, the United Nations initiative for companies that commit to upholding and promoting the ten universally accepted principles of human rights, labour rights, environmental protection and anti-corruption. With the publication of the 2021 Annual Report, we renew our commitment to making the Global Compact and its principles an integral part of our strategy, culture and day-to-day operations, and we also commit to explicitly declare our commitment to all employees, partners, customers and the general public. The consolidated disclosure of non-financial information sets out in detail the actions taken by the Sabaf Group in support of the
The GRI Standards require that the contents of the Disclosure of Non-Financial Information be defined on the basis of a materiality analysis. In compliance with the requests of GRI Standards, Sabaf has started since 2014 a process of identifying the material topics to be reported, i.e. those topics:
From this perspective, materiality takes into consideration not only the point of view of the organisation but also that of stakeholders. Considering the pervasive impacts of the pandemic, at the end of 2020 the Group deemed it appropriate to update the materiality analysis, integrate the material topics and resubmit them to management for assessment. The top managers involved were asked to express an evaluation (on a scale from 0 to 5) on the material topics identified and inherent to their responsibilities, both from an internal perspective and from the perspective of the stakeholders concerned. The materiality analysis was approved by the Board of Directors at its meeting on 11 February 2021. On 16 December 2021, the Board re-approved the materiality analysis, without changing its assessments. The materiality analysis shows:
It is noted that in defining material topics, the following topics are considered preconditions for operating and are therefore considered very important for both Sabaf and its stakeholders:
2This includes the fight against corruption, which is an essential aspect of managing the Group's business and therefore included in the preconditions. It is discussed in this document in the section "Corporate Governance, Risk Management and Compliance".
3 Only the topics considered relevant by the organisation and subject matter of reporting are represented.
| MATERIAL TOPICS | |||||||
|---|---|---|---|---|---|---|---|
| Scope Legislative Decree 254/16 |
ID | Material topic | Importance of the topic for Sabaf | Link to GRI Standards |
Internal impacts |
External impacts (*) |
|
| 1 | Use of raw materials and materials |
Use of materials for production, considering the maintenance of quality standards and assessing their environmental and social impact. |
GRI 301: Materials 2016 |
Sabaf | - | ||
| ENVIRONMENT | 2 | Emissions into the atmosphere, waste and management of environmental impacts |
Definition of monitoring and reduction activities of emissions of polluting substances into the atmosphere and of waste generated by the production processes of Sabaf. Impacts to be considered include smart working for part of the workforce, which has led to a reduction in travel by employees. |
GRI 302: Energy 2016 GRI 305: Emissions 2016 GRI 306: Waste 2020 |
Sabaf | Suppliers | |
| HUMAN RIGHTS | 3 | Protection of Human and Workers' Rights |
Protection of human rights as provided for in the "Universal Declaration of Human Rights" and the principles laid down in the conventions of the International Labour Organisation. One of the main objectives is to ensure working conditions with health and safety standards adapted to the health emergency period and, consequently, to safeguard business continuity. |
GRI 406: Non discrimination 2016 GRI 414: Supplier social assessment 2016 |
Sabaf | Suppliers | |
| 4 | Remuneration and incentive policy |
Definition of fixed and variable components of remuneration for employees. Incentive system based on the achievement of pre-established targets in order to pursue company targets. Establishment of a welfare bonus system to recognise activities carried out during the health emergency. |
GRI 202: Market Presence 2016 GRI 404: Training and education 2016 |
Sabaf | Trade union org. | ||
| PERSONNEL | 5 | Development of resources and skills |
Boost the Group's expansion, through organic growth, maintaining the excellence of its economic results and preserving its financial solidity. Increase skills through training activities with the aim of guaranteeing the continuous professional growth of employees. |
GRI 401: Employment 2016 GRI 404: Training and education 2016 |
Sabaf | - | |
| RELATED | 6 | Health and safety of personnel and contractors |
Management, in compliance with occupational health and safety regulations, of topics related to occupational health and safety: training, prevention, monitoring, improvement objectives, also with reference to the measures implemented against the spread of the Coronavirus during health emergencies in the workplace and the protection of frail persons in extraordinary working conditions. |
GRI 403: Occupational Health and Safety 2018 |
Sabaf | Suppliers | |
| 7 | Diversity and equal opportunities |
Commitment to ensuring equal opportunities for women and protectedcategories. |
GRI 405: Diversity and equal opportunity 2016 |
Sabaf | - |
CONSOLIDATED DISCLOSURE OF NON-FINANCIAL INFORMATION SABAF . 2021 ANNUAL REPORT
| MATERIAL TOPICS | ||||||
|---|---|---|---|---|---|---|
| Scope Legislative Decree 254/16 |
ID | Material topic | Importance of the topic for Sabaf | Link to GRI Standards |
Internal impacts |
External impacts (*) |
| SOCIAL | 8 | Management of relations with suppliers, supplier assessment and contractual conditions |
Sabaf's commitment to defining a relation with the supply chain based on the principles of fairness in negotiations, integrity and contractual fairness. These include supporting the supply chain by joining industry initiatives and observing contract payment terms in times of possible difficulty. Sharing corporate values with suppliers. Sabaf defines minimum criteria for the creation of a lasting relationship with suppliers, based on the principles of social responsibility. |
GRI 414: Supplier Social Assessment 2016 |
Sabaf | Suppliers |
| 9 | Industrial relations | The relationship between Sabaf and trade union representatives, based on the principles of transparency, mutual fairness and willingness to negotiate agreements aimed at ensuring healthy and safe working conditions. |
GRI 402: Labor management relations 2016 |
Sabaf | Trade union org. | |
| 10 | Compliance with the competitive system |
Compliance with regulations and behaviour that ensure Sabaf conducts its business in a balanced and regular competitive environment. |
GRI 206: Anti-competitive Behaviour 2016 |
Sabaf | - | |
| 11 | Customer satisfaction and customer support |
Ability to respond effectively to customer expectations, at all stages of the relationship (from design to after-sales service). |
GRI 416: Customer Health and Safety 2016 |
Sabaf | - | |
| TRANSVERSAL | 12 | Research and innovation of products and processes also with reference to safety and environmental performance |
Identification of new technological and production solutions (also with a special attention to safety and environmental performance) that allow the Group to strengthen its leadership in the industrial sector to which it belongs. |
GRI 416: Customer Health and Safety 2016 |
Sabaf | Customers |
| 13 | Partnership with multinational groups |
Sabaf's opening to strategic collaborations with the main players in the sector. |
(**) | Sabaf | - | |
| 14 | Production quality and eco-efficiency |
Search for better product or process performance and solutions in terms of environmental impact. Designing new eco-efficient products. Revision of business processes with the introduction of smart working, which can promote a lower environmental impact while maintaining standards of effectiveness and efficiency. |
Please refer to topics 2 and 12 |
Sabaf | - |
(*) Reporting is not extended to the external boundary.
(**) With regard to these topics (not directly related to a Material Topic envisaged by the GRI Standards Guidelines), Sabaf indicates in the document the adopted management approach.
Since its listing on the stock exchange in 1998, the corporate governance model of Sabaf has been based on a strict separation between the shareholding structure and management of the Company and of the Group. Sabaf is committed to maintaining a system of governance aligned with the recommendations and best practice. The Company has welcomed the new Corporate Governance Code, fully agrees with its innovations and has taken action on its own model to fully implement the Code.
The purpose of this section of the file is to highlight the choices made by Sabaf and the peculiarities of its governance system. Where possible, a comparison with other listed companies is also provided, using the information collected by Assonime in its document "Report on Corporate Governance in Italy: the implementation of the Italian Corporate Governance Code (2021)", published in January 2022 and concerning the Corporate Governance reports for the 2020 financial year of 219 listed Italian companies. The benchmark used below takes into account, where available, a panel of "non-financial" companies only. An analysis of the characteristics and functioning of the Board of Directors is also provided in comparison with the top 100 Italian listed companies (industrial and financial) and with the main European and non-European countries, based on data published by Spencer Stuart in the analysis "Boards around the world".
CONSOLIDATED DISCLOSURE OF NON-FINANCIAL INFORMATION SABAF . 2021 ANNUAL REPORT
Sabaf Group companies are active in the following business segments:
| GAS PARTS | ELECTRONIC COMPONENTS | HINGES FOR HOUSEHOLD APPLIANCES |
|---|---|---|
| • Sabaf S.p.A., valves and burners; • Sabaf Brazil, burners; • Sabaf Turkey, burners; • Sabaf Appliance Components, burners; • A.R.C. s.r.l. and A.R.C. Handan, professional burners; • Sabaf India, valves and burners (start of production scheduled for 2022); |
• Okida, electronic control boards, timers, display and power units for ovens, hoods, vacuum cleaners, refrigerators and freezers. |
• Faringosi Hinges s.r.l.; • C.M.I. Group. |
• Sabaf Mexico, burners and hinges (start of production scheduled at the end of 2022).
Sabaf adopted a traditional model of management and control, characterised by the presence of:
This model is supplemented, in accordance with the provisions of the Corporate Governance Code the Company complied with, by:
Finally, the Group's administration and control model is completed by the presence of the Supervisory Body, set up following the adoption of the organisation, management and control model pursuant to Legislative Decree 231/2001, adopted by Sabaf since 2006.
On 26 March 2018, Sabaf S.p.A. adopted a Policy on the composition of the Corporate Bodies. The Policy was updated by the Board of Directors on 11 February 2021, in view of the renewal of corporate offices and to implement the provisions of the new Corporate Governance Code.
The Policy sets out the Company's guidelines on the characteristics considered functional to ensuring an optimal composition of the corporate bodies (Board of Directors and Board of Statutory Auditors), with the aim of guiding the names put forward when renewing the Corporate Bodies, so that the benefits that can derive from a balanced composition of the Board and Board of Statutory Auditors inspired by criteria of diversity are taken into consideration. The Policy sets out the characteristics and factors considered necessary for the BoD to be able to carry out its assigned tasks more efficiently, take decisions thanks to the contribution of a number of qualified points of view and examine the issues under discussion from different perspectives, also within the framework of the internal board committees established from time to time.
The Policy sets out the following characteristics for the composition of each of the two bodies:
The Policy on the composition of the Corporate Bodies is published on the Group's website and described in the Report on corporate governance and ownership structure.
The Board of Directors currently in office, appointed by the Shareholders' Meeting on 6 May 2021 for the period 2021-2023, is composed of 9 members4 , including:
she has been holding the position of Chairman and CEO of Copan Italia S.p.A., she joined the BoD of Sabaf in 2018.
Degree in Economics and Commerce, he held management positions in investments and Corporate Development. Today, he is Senior Portfolio Manager at Quaestio Capital Management SGR S.p.A..
over 6022% 56-6045% 50-5533%
Overall average age
Sabaf 60 years old vs Assonime 57 years old
78% of the members of the Board in office are between 50 and 60 years old; the average age is higher than the average of the Assonime sample (60 vs 57 years old).
In 2021, the Board of Sabaf met on 12 occasions (slightly above the Assonime average), with an average attendance rate of 94%. In general, the attendance of the Sabaf directors at the Board meetings in the last three years is slightly below than that of the Assonime panel.
The meetings were attended by the Board of Statutory Auditors and - regularly - the managers of Sabaf, who were invited to attend and report on specific issues on the agenda.
SABAF ASSONIME AVERAGE
5Assonime panel including financial companies.
AVERAGE AGE OF NON-EXECUTIVE DIRECTORS % OF WOMEN IN THE BoD
% OF INDEPENDENT DIRECTORS IN THE BoD
AVERAGE NUMBER OF MEETINGS OF THE BoD
The comparison was made using data published by Spencer Stuart in the analysis "Boards around the world" 6 .
Also for 2021, the Board of Directors carried out its assessment of the size, membership (including professional competences, managerial skills and seniority) and operation of the Board of Directors and its Committees, opting for the self-assessment of individual directors, coordinated by the Lead Independent Director.
The results of the assessment were generally positive and were discussed at the Board of Directors' meeting of 11 February 2022.
Source: Spencer Stuart Boards Around the World 2021
6 https://www.spencerstuart.com/research-and-insight/boards-around-the-world?category=all-board-composition&topic=all-topics.
The Board of Statutory Auditors, appointed by the Shareholders' Meeting on 6 May 2021 for the period 2021 to 2023, is composed of 3 members7 with an average age of 60 years (higher than the Assonime average of 56 years). The Chairman of the Board of Statutory Auditors is the expression of the minority list.
AVERAGE AGE OF STATUTORY AUDITORS
Sabaf 60 years old vs Assonime 56 years old
The Board of Statutory Auditors of Sabaf met on average 8.7 times in the last three years (7 meetings in 2021), a number of times lower than the average number of meetings of the Assonime sample (12.3 meetings on average).
The attendance of members at meetings was 100% in the period 2019 to 2021, higher than that of other listed companies of the research.
In general, the commitment of the Board of Statutory Auditors of Sabaf is achieved not only by carrying out checks and attending the periodic meetings required by law, but also by involving all members in the meetings of the Board of Directors, of the Control, Risks and Sustainability Committee and of the Remuneration and Nomination Committee, in the half-yearly collective meetings with the Control Bodies and individual meetings with the independent auditors.
7 The Curriculum Vitae of each statutory auditor is available on the Group's website. 8 Assonime panel including financial companies.
8.1
The Control, Risks and Sustainability Committee currently in office, set up within the Board, consists of 3 members.
In line with the choice made by about 63% of the Assonime panel (referring only to CRC), the CRSC of Sabaf is made up exclusively of independent directors.
The Committee was also assigned the functions pertaining to the Related-Party Committee.
The Committee met on average 6.3 times in the last three years (7 meetings in 2021), a number of times lower than the average number of meetings of the Assonime sample (8.6 meetings on average). In 2021, the Committee, among other things:
NUMBER OF MEETINGS (2019-2021) 9
8.6 9.1
• made considerations on sustainability issues (sustainability objectives defined in the 2021-2023 Business Plan, new European standards for sustainability, participation in CDP's Climate Change and Water programmes, other possible projects to be analysed in the medium term).
The Remuneration and Nomination Committee, set up within the Board, comprises three non-executive members, the majority of them independent (in line with the choice made by 39% of the Assonime panel), with the knowledge and experience in accounting, finance and remuneration policies that is deemed adequate by the Board of Directors.
In the last three years, the Committee met a number of times higher than the Assonime average (6 vs 5.3). In particular, during the last financial year, the Committee met six times. In 2021, the Committee, among other things:
analysed the summary of the long-term incentive plan (or also "LTIP") for directors and employees of the Company and its subsidiaries through the free allocation of shares ("Stock Grant Plan"), approved by the Board of Directors on 15 May 2018; the Committee also drafted the regulations for a new Stock Grant Plan for the period from 2021 to 2023, which was approved by the Board of Directors on 13 May 2021;
proposed changes to the "Policy on the composition of corporate bodies", in line with the recommendations of the Corporate Code;
Sabaf has always believed that social and environmental topics are an integral part of the Group's strategy and, as such, are the responsibility of the Board of Directors.
With reference to the governance of these topics, at the meeting of the Board of Directors on 6 May 2021, it was confirmed that the criteria for implementing Corporate Social Responsibility ("CSR") are the responsibility of the Board itself. At the same meeting, the Board of Directors set up a Board committee, called the Control, Risks and Sustainability Committee, which, with reference to sustainability issues, has the task of:
• supporting the Board of Directors in the analysis of issues relevant to the Company and the Group, promoting a policy that integrates sustainability into business processes in order to ensure the creation of sustainable value over time for shareholders and all other stakeholders;
All Sabaf employees, as part of their responsibilities and competences, are required to implement CSR every day in the performance of their activities.
10 Assonime panel including finncial company and referred only to the Remuneration Commitee.
On 25 June 2019, the Board of Directors, upon the proposal of the Director in charge of the Internal Control and Risk Management System, as well as after hearing the Board of Statutory Auditors, entrusted the Group Internal Audit Department for the period from 1 July 2019 to 31 December 2021 to PricewaterhouseCoopers Advisory S.p.A. (PwC) identifying Giuseppe Garzillo, partner of the company, as the Head of the department. On 16 December 2021, the Board of Directors, subject to the favourable opinion of the Control, Risks and Sustainability Committee and after hearing the Board of Statutory Auditors, renewed the appointment of PwC for the threeyear period 2022 to 2024 and confirmed Garzillo as Head of Internal Audit.
The Head of Internal Audit reports hierarchically to the Board of Directors, which approves the Work Plan.
The Supervisory Body, appointed on 6 May 2021 by the Board of Directors for the three-year period 2021 to 2024, comprises Nicla Picchi, independent director and Vice Chairman of the Company, and Giuseppe Garzillo, Head of Internal Audit.
During 2021, the Supervisory Body of Sabaf met 6 times, asking the Company's management to attend the meetings in order to carry out in-depth analysis on specific topics.
Organisational carry-overs
Information flows
KEY
The administration and control model of Sabaf operates through a network of periodic and systematic information flows between the various corporate bodies.
Each body, according to the timing and methods defined by the Articles of Association, the Governance Model and other internal documents, reports to the functionally superior body on the activities carried out in the reference period and those planned for the following period, any observations noted and suggested actions.
60
In recent years, Sabaf has gradually moved closer to the concepts of risk assessment and risk management, developing a structured process of periodic identification, assessment and management of risks, defined and formalised in a Guideline of the Corporate Governance Manual.
The risk management process includes all the material topics identified by the Group as part of the materiality analysis carried out in accordance with the provisions of the GRI Standards.
The Guidelines define the roles and responsibilities of the risk assessment and risk management processes, indicating the subjects to be involved, the frequency of the process and the assessment scales. The most recent risk assessment activity, coordinated by the Internal Audit department and aimed at updating the risk assessment, was carried out in October and November 2021.
The identification of risks was carried out according to a structured approach that involved the following steps:
All risks were investigated in terms of initial impact and probability, inherent risk and, taking into account existing mitigation measures, residual risk. The result of this analysis was represented within specific "heat maps" representing the risks in terms of "residual risk" and "current level of control".
| SEVERITY RATE | ||||||||
|---|---|---|---|---|---|---|---|---|
| LOWER | MODERATE | SIGNIFICANT | VERY SIGNIFICANT | |||||
| SEVERITY DRIVERS | 1 | 2 | 3 | 4 | ||||
| ECONOMIC (EBITDA) |
< €0.5 million between €1.5 and €2 million |
between €2 and €5 million | > €5 million | |||||
| HSE | Limited or negligible temporary impact on health and safety and/or the environment (minor environmental damage). |
Moderate impacts/damage on health and safety and/or the environment (recoverable environmental damage). |
Serious impacts/damage on health and safety and/ or the environment (critical environmental damage). |
Very serious impacts/damage on health and safety and/or the environment (catastrophic pollution). |
||||
| REPUTATIONAL | Moderate impacts on the level Insignificant or small impacts on of trust of stakeholders but the level of trust of stakeholders. requiring targeted action by the company. |
Significant impacts on the level of trust of stakeholders requiring action by the company. |
Trust of key stakeholders significantly compromised with need for immediate action. |
|||||
| OPERATIONAL | No impact on business processes and/or customer relations. |
Low impacts on: i) efficiency/continuity of one or more non-critical business processes and/or ii) rapporto con clienti diversi dai "key account". |
Significant impacts on: i) efficiency/continuity of one or more key business processes and/or ii) relations with key customers (key account). |
Critical impacts on: i) efficiency/continuity of business and/or ii) relations with key customers (key account). |
| FREQUENCY RATE | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| FREQUENCY DRIVERS | RARE | UNLIKELY | LIKELY | ||||||
| 1 | 2 | 4 | |||||||
| Probability of occurrence in the following three years |
< 5% | from 5% to 25% | 3 from 25% to 50% |
> 50% | |||||
| Frequency | Event never occurred in the past | Event occurred in the past and | Event occurred in the past and | Event occurred (several times) | |||||
| of occurrence | and considered unlikely. | considered not very likely. | considered likely. | in the past/recently. |
| LEVEL OF CONTROL | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| LEVEL OF CONTROL | OPTIMAL 1 |
ADEQUATE (WITH POSSIBLE ROOM FOR IMPROVEMENT) 2 |
TO BE STRENGTHENED 3 |
LACKING/NON-EXISTENT 4 |
|||||
| Description | In line with best practices and best in class. |
There are policies, procedures and/or operating instructions. However, there is still room for improvement. |
Processes are not structured and are based on the skills of the individuals involved. |
Lack of controls, policies, procedures and organisational structures to manage and address risks/opportunities. |
|||||
| % of reduction of inherent risk |
75-90% | 50-75% | 30-50% | 0-30% |
The risks relating to the topics referred to in Legislative Decree 254/2016 are set out in this Disclosure, under the different chapters. For further details on risk factors, please also refer to the Report on Operations.
The risk management activity carried out by Sabaf also takes into account compliance requirements in order to achieve the company's objectives.
The internal control system is based on the following elements:
In particular, Sabaf prepares an integrated and risk-based Audit Plan,
broken down according to specific control objectives (operational risks, compliance risks with Law 262/2005, Legislative Decree 231/2001, GDPS, security of company information systems, etc.). The execution of the interventions is assigned, in outsourcing, to a single structure, the Internal Audit, in turn responsible for reporting the results of the activities carried out to the competent control bodies.
All this translates into an integrated compliance culture and tools.
Following compliance with the Corporate Governance Code for listed companies and in order to internalise the good governance practices sponsored in this document in its processes, Sabaf adopted a Corporate Governance Manual11 that regulates principles, rules and operating procedures.
This Manual, adopted by Board resolution of 19 December 2006, has been updated several times over the years in order
to reflect new laws and regulations in Corporate Governance, as well as best practices adopted by the Company over time.
The Manual includes some operating guidelines, also approved by the Board of Directors, prepared for the purpose of the correct carrying-out of the activities pertaining to Sabaf's management and control bodies.
11 The latest version of the document in accordance with the provisions of the Corporate Governance Code, approved by the Board of Directors on 16 December 2021, is available on the Company website, at www.sabafgroup.com under the Investors - Corporate Governance section.
In 2006, Sabaf S.p.A. adopted the Organisation, Management and Control Model, as suggested by Legislative Decree 231/200112, aimed at preventing the commission of specific types of offences by employees and/or employees in the interest or for the benefit of the Company.
In the following years, the Company, under the supervision of the Supervisory Body, promptly responded to the need to adapt the Model and the control structure to the regulatory changes that had occurred from time to time.
The Company entrusts the Supervisory Body with the task of assessing the adequacy of the Model itself, i.e. its real capacity to prevent offences as well as to supervise the operation and correct observance of the adopted protocols.
In 2008, the subsidiary Faringosi Hinges s.r.l. also adopted Model 231 and appointed the SB, ensuring, in line with the parent company, its proper updating and effective operation.
In 2019 and in 2021, C.G.D. and C.M.I. respectively adopted their own Model 231, limited to the management of issues related to occupational health and safety.
In 2021, the Body:
12 The latest version of the document, approved by the Board of Directors on 13 May 2021, is available on the Company website, at www.sabafgroup.com under the Investors - Corporate Governance section.
The Sabaf Group, aware of the negative effects of corrupt practices in business management, is committed to preventing and combating the occurrence of offences in the carrying-out of its activities.
Sabaf is committed to preventing unlawful behaviour by disseminating the contents of its Charter of Values and of the Organisation, Management and Control Model pursuant to Legislative Decree 231/2001 (adopted by Sabaf S.p.A. and Faringosi-Hinges s.r.l. and, limited to the part concerning Health and Safety at Work, by C.M.I. s.r.l. and C.G.D. s.r.l.).
inspired by international best practices, rules of behaviour have been developed in the following main areas assessed as potentially exposed to risks of corruption:
As further confirmation of its commitment to fight against unlawful behaviour, during 2018, Sabaf adopted a Group Anti-Corruption Policy. The provisions and guidelines set out in the
There were no cases of corruption for the three-year period from 2019 to 2021.
Sabaf considers the Internal Control and Risk Management System for financial information an integral part of its risk management system. In this regard, Sabaf has integrated the activities relating to the management of the internal control system on financial reporting into its Audit and Compliance process since 2008.
The Group defined its own Accounting Control Model, approved for the first time by the Board of Directors on 12 February 2008, subsequently revised and updated.
The management of relations with the employees of the Sabaf Group cannot disregard the identification, assessment and management of potential risks. The relevant risk categories in this area are set out below.
Strategic risks, which could affect the achievement of the Group's development objectives, such as the lack of adequate skills, the loss of key resources or the difficulty of replacing them.
Legal and compliance risks, related to contractual liabilities, compliance with the regulations applicable to the Group and the commitments set out in the Charter of Values, such as the correct application of labour contracts in force in the various countries in which the Group operates, health and safety regulations, compliance with the criteria of fairness and impartiality in the management of human resources.
Operational risks, which may lead to malfunctions in the carrying-out of current activities, such as high turnover or conflicting industrial relations.
The Sabaf Group implements structured policies and defines centrally coordinated guidelines in the following areas:
To this end, the group's organisational structure includes the positions of Global Group HR Director and Group HSE Manager.
The combination of these systems and policies enables the Group to have an adequate control of the risks related to the management of relations with employees.
The following paragraphs outline, for each of these topics, the characteristics of the "Sabaf model" and the performance achieved.
In 2021, the pandemic again had a pervasive impact on the Group's business and the people who work for it.
Protecting the health and safety of people has always been a top priority, so strict protocols have been maintained in all companies to mitigate the risks of contagion. Serological tests and swabs were periodically performed, which prevented the spread of significant hotbeds.
For all functions that allow it, smart working has been widely used and forms of flexibility have been guaranteed to ensure a balance between personal and family needs and work commitments. An insurance policy is in place for all employees of Italian companies.
The extraordinary dedication of all the personnel, their competence and willingness to help enabled the organisation to react quickly to all the challenges posed by a highly dynamic scenario. In this regard, a one-off bonus was awarded for outstanding achievements despite the difficulties faced in the health emergency.
The commitment of the Sabaf Group to social responsibility and the protection of workers' health and safety are strategic elements for Sabaf and the compliance with labour standards that guarantee respect for human rights, health and maximum safety is an essential paradigm.
The Group is committed to pursuing the following objectives, which are also set out in the Charter of Values:
avoid any form of discrimination and favouritism during the recruitment phase of personnel, whose selection must be made on the basis of the applicants' profiles meeting the company's requirements;
value and respect diversity, avoiding any form of discrimination in career advancement on the grounds of gender, sexual orientation, age, nationality, state of health, political opinions, race and religious beliefs at all stages of the employment relationship;
From 2021, Sabaf S.p.A. has decided not to renew the SA8000 certification. The policies and procedures in place at all Group companies ensure full compliance with all the requirements of the Standard, regardless of external certification.
During 2021, no episodes of discrimination were observed, no transactions/activities with a high risk of recourse to child labour and forced or compulsory labour or with a high risk of violation of the right of workers to exercise their freedom of association and collective bargaining were identified.
The Sabaf Group had 1,278 employees at 31 December 2021 compared to 1,168 at the end of 2020. The increase in the number of employees compared to the previous year was 110 (+9.42%).
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Sabaf S.p.A. (Ospitaletto, Brescia - Italy) |
309 | 164 | 473 | 312 | 168 | 480 | 318 | 170 | 488 |
| Faringosi Hinges s.r.l. (Bareggio, Milan - Italy) |
22 | 23 | 45 | 23 | 23 | 46 | 23 | 21 | 44 |
| A.R.C. s.r.l. (Campodarsego, Padua - Italy) |
16 | 5 | 21 | 15 | 5 | 20 | 16 | 5 | 21 |
| C.M.I. s.r.l. (Loc. Crespellano – Valsamoggia, Bologna – Italy) |
31 | 53 | 84 | 31 | 51 | 82 | 33 | 52 | 85 |
| C.G.D. s.r.l. (Loc. Crespellano – Valsamoggia, Bologna – Italy) |
41 | 3 | 44 | 35 | 3 | 38 | 34 | 4 | 38 |
| C.M.I. - Polish branch (Myszków, Poland) |
19 | 26 | 45 | 19 | 25 | 44 | 18 | 29 | 47 |
| Sabaf Brazil (Jundiaí, São Paulo - Brazil) |
94 | 18 | 112 | 74 | 13 | 87 | 69 | 13 | 82 |
| Sabaf Turkey (Manisa - Turkey) |
144 | 94 | 238 | 129 | 69 | 198 | 84 | 42 | 126 |
| Okida (Esenyurt/Istanbul – Turkey) |
97 | 112 | 209 | 80 | 85 | 165 | 56 | 40 | 96 |
| Sabaf Appliance Components (Kunshan) Co., Ltd. (Kunshan, Jiangsu Province – China) |
5 | 2 | 7 | 6 | 2 | 8 | 6 | 2 | 8 |
| GROUP TOTAL | 778 | 500 | 1,278 | 724 | 444 | 1,168 | 657 | 378 | 1,035 |
As regards the types of contract adopted, at 31 December 2021, there are 1,268 employees with permanent contracts equal to 99.2% of the total (97.9% at the end of 2020) and 10 employees with a fixed-term contract, equal to 0.8% of the total (2.1% at the end of 2020).
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 770 | 498 | 1,268 | 711 | 432 | 1,143 | 621 | 369 | 990 |
| Fixed term | 8 | 2 | 10 | 13 | 12 | 25 | 36 | 9 | 45 |
| GROUP TOTAL | 778 | 500 | 1,278 | 724 | 444 | 1,168 | 657 | 378 | 1,035 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 307 | 162 | 469 | 306 | 166 | 472 | 312 | 167 | 479 |
| Fixed term | 2 | 2 | 4 | 6 | 2 | 8 | 6 | 3 | 9 |
| TOTAL | 309 | 164 | 473 | 312 | 168 | 480 | 318 | 170 | 488 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 22 | 23 | 45 | 23 | 23 | 46 | 23 | 21 | 44 |
| Fixed term | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| TOTAL | 22 | 23 | 45 | 23 | 23 | 46 | 23 | 21 | 44 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 16 | 5 | 21 | 15 | 5 | 20 | 16 | 5 | 21 |
| Fixed term | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| TOTAL | 16 | 5 | 21 | 15 | 5 | 20 | 16 | 5 | 21 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 31 | 53 | 84 | 28 | 51 | 79 | 30 | 51 | 81 |
| Fixed term | 0 | 0 | 0 | 3 | 0 | 3 | 3 | 1 | 4 |
| TOTAL | 31 | 53 | 84 | 31 | 51 | 82 | 33 | 52 | 85 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 36 | 3 | 39 | 34 | 3 | 37 | 33 | 4 | 37 |
| Fixed term | 5 | 0 | 5 | 1 | 0 | 1 | 1 | 0 | 1 |
| TOTAL | 41 | 3 | 44 | 35 | 3 | 38 | 34 | 4 | 38 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 19 | 26 | 45 | 19 | 25 | 44 | 17 | 29 | 46 |
| Fixed term | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
| TOTAL | 19 | 26 | 45 | 19 | 25 | 44 | 18 | 29 | 47 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 94 | 18 | 112 | 74 | 13 | 87 | 65 | 13 | 78 |
| Fixed term | 0 | 0 | 0 | 0 | 0 | 0 | 4 | 0 | 4 |
| TOTAL | 94 | 18 | 112 | 74 | 13 | 87 | 69 | 13 | 82 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 144 | 94 | 238 | 128 | 59 | 187 | 65 | 37 | 102 |
| Fixed term | 0 | 0 | 0 | 1 | 10 | 11 | 19 | 5 | 24 |
| TOTAL | 144 | 94 | 238 | 129 | 69 | 198 | 84 | 42 | 126 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 97 | 112 | 209 | 80 | 85 | 165 | 56 | 40 | 96 |
| Fixed term | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| TOTAL | 97 | 112 | 209 | 80 | 85 | 165 | 56 | 40 | 96 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (no.) | |||||||||
| Permanent | 4 | 2 | 6 | 4 | 2 | 6 | 4 | 2 | 6 |
| Fixed term | 1 | 0 | 1 | 2 | 0 | 2 | 2 | 0 | 2 |
| TOTAL | 5 | 2 | 7 | 6 | 2 | 8 | 6 | 2 | 8 |
| (no.) | 31.12.2021 | 31.12.2020 | 31.12.2019 |
|---|---|---|---|
| Agency workers | 198 | 155 | 42 |
| Trainees | 11 | 8 | 2 |
| (%) | 31.12.2021 | 31.12.2020 | 31.12.2019 |
|---|---|---|---|
| < 30 years old | 20.6 | 18.9 | 17.2 |
| 31–40 years old | 35.4 | 34.5 | 35.1 |
| 41–50 years old | 27.8 | 31.6 | 31.8 |
| over 50 years old | 16.2 | 15.0 | 15.9 |
| Total | 100.0 | 100.0 | 100.0 |
The low average age of Group employees (39.5 years old) confirms the strategy of hiring young workers, giving priority to training and internal growth rather than acquiring skills from outside.
The age of the youngest employees in the Group is 20 years old for Italy, 20 years old for Poland, 19 years old for Turkey, 17 years old for Brazil and 32 years old for China.
| (%) | 31.12.2021 | 31.12.2020 | 31.12.2019 |
|---|---|---|---|
| < 5 years | 48.4 | 44.5 | 37.2 |
| 6–10 years | 9.9 | 9.0 | 12.3 |
| 11–20 years | 27.9 | 31.9 | 36.6 |
| over 20 years | 13.8 | 14.6 | 13.9 |
| Total | 100.0 | 100.0 | 100.0 |
Sabaf is aware of the fundamental importance of having a stable and qualified workforce that is a key factor in maintaining its competitive advantage.
In order to attract the best resources, the recruitment policy aims to ensure equal opportunities for all candidates, avoiding any kind of discrimination. The selection procedure requires, inter alia:
The assessment of the applicants is based on their skills, training, previous experience, expectations and potential, tailoring them to the specific needs of the company.
| (%) | 31.12.2021 | 31.12.2020 | 31.12.2019 |
|---|---|---|---|
| Degree | 16.0 | 15.4 | 14.9 |
| High school leaving diploma | 48.4 | 46.2 | 44.2 |
| Middle school leaving certificate | 33.1 | 36.5 | 39.7 |
| Elementary school leaving certificate | 2.5 | 1.9 | 1.2 |
| TOTAL | 100.0 | 100.0 | 100.0 |
| (no.) | 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|---|
| H | T | H | T | H | T | ||
| < 30 years old | 37 | 19 | 52 | 19 | 18 | 9 | |
| 31-40 years old | 57 | 21 | 37 | 7 | 9 | 9 | |
| 41-50 years old | 13 | 13 | 20 | 10 | 6 | 8 | |
| > 50 years old | 5 | 3 | 0 | 7 | 0 | 1 | |
| TOTAL WOMEN | 112 | 56 | 109 | 43 | 33 | 27 | |
| < 30 years old | 131 | 88 | 72 | 27 | 46 | 32 | |
| 31-40 years old | 66 | 54 | 50 | 32 | 25 | 19 | |
| 41-50 years old | 21 | 16 | 21 | 8 | 3 | 10 | |
| > 50 years old | 6 | 12 | 7 | 16 | 2 | 6 | |
| TOTAL MEN | 224 | 170 | 150 | 83 | 76 | 67 | |
| TOTAL | 336 | 226 | 259 | 126 | 109 | 94 |
| (%) | 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|---|
| H | T | H | T | H | T | ||
| < 30 years old | 7.40 | 3.80 | 11.71 | 4.28 | 4.76 | 2.38 | |
| 31-40 years old | 11.40 | 4.20 | 8.33 | 1.58 | 2.38 | 2.38 | |
| 41-50 years old | 2.60 | 2.60 | 4.50 | 2.25 | 1.59 | 2.12 | |
| > 50 years old | 1.00 | 0.60 | 0.00 | 1.58 | 0.00 | 0.26 | |
| TOTAL WOMEN | 22.40 | 11.20 | 24.54 | 9.69 | 8.73 | 7.14 | |
| < 30 years old | 16.84 | 11.31 | 9.94 | 3.73 | 7.00 | 4.87 | |
| 31-40 years old | 8.48 | 6.94 | 6.91 | 4.42 | 3.81 | 2.89 | |
| 41-50 years old | 2.70 | 2.06 | 2.90 | 1.10 | 0.46 | 1.52 | |
| > 50 years old | 0.77 | 1.54 | 0.97 | 2.21 | 0.30 | 0.91 | |
| TOTAL MEN | 28.79 | 21.85 | 20.72 | 11.46 | 11.57 | 10.19 | |
| TOTAL | 26.29 | 17.68 | 22.17 | 10.79 | 10.53 | 9.08 |
| (%) | 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|---|
| H | T | H | T | H | T | ||
| < 30 years old | 1.21 | 0.00 | 0.00 | 0.40 | 1.59 | 0.51 | |
| 31-40 years old | 2.02 | 1.21 | 1.60 | 0.00 | 0.00 | 1.53 | |
| 41-50 years old | 0.40 | 2.42 | 1.20 | 0.80 | 0.40 | 1.53 | |
| > 50 years old | 0.40 | 1.21 | 0.00 | 2.40 | 0.00 | 0.51 | |
| TOTAL WOMEN | 4.03 | 4.84 | 2.80 | 3.60 | 1.98 | 4.08 | |
| < 30 years old | 3.34 | 0.95 | 0.48 | 0.00 | 0.71 | 0.56 | |
| 31-40 years old | 2.15 | 1.91 | 0.96 | 1.68 | 1.18 | 1.40 | |
| 41-50 years old | 1.19 | 1.43 | 0.96 | 0.48 | 0.00 | 1.96 | |
| > 50 years old | 0.48 | 2.15 | 0.96 | 3.13 | 0.47 | 0.84 | |
| TOTAL MEN | 7.16 | 6.44 | 3.36 | 5.29 | 2.36 | 4.76 | |
| TOTAL | 6.00 | 5.85 | 3.15 | 4.65 | 2.22 | 4.52 |
| (%) | 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|---|
| H | T | H | T | H | T | ||
| < 30 years old | 0.00 | 0.00 | 0.00 | 4.00 | 0.00 | 3.45 | |
| 31-40 years old | 3.85 | 3.85 | 0.00 | 0.00 | 10.34 | 3.45 | |
| 41-50 years old | 3.85 | 3.85 | 0.00 | 8.00 | 6.90 | 0.00 | |
| > 50 years old | 3.85 | 0.00 | 0.00 | 4.00 | 0.00 | 0.00 | |
| TOTAL WOMEN | 11.55 | 7.70 | 0.00 | 16.00 | 17.24 | 6.90 | |
| < 30 years old | 10.53 | 10.53 | 10.53 | 5.26 | 11.11 | 5.56 | |
| 31-40 years old | 0.00 | 5.26 | 0.00 | 0.00 | 0.00 | 0.00 | |
| 41-50 years old | 5.26 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| > 50 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| TOTAL MEN | 15.79 | 15.79 | 10.53 | 5.26 | 11.11 | 5.56 | |
| TOTAL | 13.33 | 11.11 | 4.55 | 11.36 | 14.89 | 6.38 |
| (%) | 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|---|
| H | T | H | T | H | T | ||
| < 30 years old | 5.56 | 0.00 | 0.00 | 0.00 | 0.00 | 7.60 | |
| 31-40 years old | 27.78 | 11.11 | 15.38 | 15.38 | 7.69 | 15.38 | |
| 41-50 years old | 0.00 | 0.00 | 7.69 | 7.69 | 0.00 | 15.38 | |
| > 50 years old | 5.56 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| TOTAL WOMEN | 38.90 | 11.11 | 23.07 | 23.07 | 7.69 | 38.46 | |
| < 30 years old | 38.30 | 26.60 | 14.86 | 17.57 | 8.70 | 7.25 | |
| 31-40 years old | 15.96 | 10.64 | 14.86 | 8.11 | 7.25 | 7.25 | |
| 41-50 years old | 6.38 | 2.13 | 2.70 | 2.70 | 1.45 | 4.35 | |
| > 50 years old | 1.06 | 1.06 | 2.70 | 0.00 | 0.00 | 0.00 | |
| TOTAL MEN | 61.70 | 40.43 | 35.12 | 28.38 | 17.40 | 18.85 | |
| TOTAL | 58.04 | 35.71 | 33.33 | 27.59 | 15.85 | 21.95 |
| (%) | 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|---|
| H | T | H | T | H | T | ||
| < 30 years old | 16.02 | 9.22 | 33.77 | 11.04 | 17.07 | 7.32 | |
| 31-40 years old | 22.33 | 7.28 | 20.13 | 3.25 | 6.10 | 3.66 | |
| 41-50 years old | 5.34 | 2.91 | 10.39 | 3.25 | 3.66 | 3.66 | |
| > 50 years old | 0.97 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| TOTAL WOMEN | 44.66 | 19.41 | 64.29 | 17.54 | 26.83 | 14.64 | |
| < 30 years old | 32.78 | 23.65 | 27.27 | 6.22 | 25.00 | 16.43 | |
| 31-40 years old | 17.43 | 14.11 | 16.75 | 9.09 | 10.71 | 6.43 | |
| 41-50 years old | 3.73 | 3.32 | 7.18 | 1.91 | 1.43 | 0.00 | |
| > 50 years old | 1.24 | 0.83 | 0.48 | 1.44 | 0.00 | 1.43 | |
| TOTAL MEN | 55.18 | 41.91 | 51.68 | 18.66 | 37.14 | 24.29 | |
| TOTAL | 50.34 | 31.54 | 57.02 | 18.18 | 33.33 | 20.72 |
| (%) | 2021 | 2020 | 2019 | ||||
|---|---|---|---|---|---|---|---|
| H | T | H | T | H | T | ||
| < 30 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| 31-40 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| 41-50 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| > 50 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| TOTAL WOMEN | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| < 30 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| 31-40 years old | 0.00 | 20.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| 41-50 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| > 50 years old | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| TOTAL MEN | 0.00 | 20.00 | 0.00 | 0.00 | 0.00 | 0.00 | |
| TOTAL | 0.00 | 14.29 | 0.00 | 0.00 | 0.00 | 0.00 |
In 2021, the very strong growth in business volumes and the volatility of demand, especially in Brazil and Turkey, led to a significant increase in hire and turnover rates, which were higher than historical levels and those considered physiological. The Group expects a gradual adjustment of these indicators, also due to the retention policies in place.
Within the Sabaf Group, the professional growth of employees is supported by continuous training.
The Group Human Resources Department, having consulted the rel-
evant heads and gathered the training requirements, prepares an annual training plan on the basis of which the specific courses to be carried out are planned.
| 2021 | 2020 | 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (hours) | |||||||||
| Training for new employees, apprentices, training contracts | 2,112 | 463 | 2,575 | 1,615 | 546 | 2,161 | 2,340 | 1,302 | 3,642 |
| Technical training and information systems | 3,671 | 1,040 | 4,711 | 2,393 | 823 | 3,216 | 2,316 | 117 | 2,433 |
| Quality, safety, environment, energy and social responsibility | 6,519 | 2,486 | 9,005 | 3,963 | 1,095 | 5,058 | 3,079 | 878 | 3,957 |
| Administration and organisation | 752 | 412 | 1,164 | 434 | 106 | 540 | 683 | 545 | 1,228 |
| Foreign languages | 1,447 | 959 | 2,406 | 470 | 268 | 738 | 1,234 | 540 | 1,774 |
| Other (e.g. lean philosophy/production/office) | 1,529 | 889 | 2,418 | 675 | 267 | 942 | 2,036 | 767 | 2,803 |
| TOTAL HOURS OF TRAINING RECEIVED | 16,030 | 6,249 | 22,279 | 9,550 | 3,105 | 12,655 | 11,688 | 4,149 | 15,837 |
| Hours of training provided by internal trainers 13 | 1,677 | 273 | 1,950 | 4,306 | 946 | 5,252 | 979 | 284 | 1,263 |
| TOTAL | 17,707 | 6,522 | 24,229 | 13,856 | 4,051 | 17,907 | 12,667 | 4,433 | 17,100 |
In 2021, the number of training hours provided to employees was 22,279 (12,655 in 2020, when training activities were slowed down due to the health emergency). In addition to this, 7,859 hours of training were received by agency workers (5,725 in 2020).
| 2021 | 2020 | 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (hours) | |||||||||
| Blue collars | 18.2 | 7.6 | 13.8 | 11.6 | 4.4 | 8.7 | 18.2 | 10.0 | 15.1 |
| White collars and middle managers | 29.2 | 34.8 | 31.0 | 16.9 | 18.2 | 17.3 | 16.9 | 15.2 | 16.3 |
| Managers | 11.6 | 11.1 | 11.6 | 24.7 | 4.0 | 22.6 | 11.6 | 3.5 | 10.8 |
| TOTAL EMPLOYEES | 20.6 | 12.5 | 17.4 | 13.2 | 7.0 | 10.8 | 17.8 | 11.0 | 15.3 |
| Agency workers | 44.4 | 32.5 | 39.7 | ||||||
| TOTAL PERSONNEL | 23.8 | 15.2 | 20.4 |
In 2021, the total cost incurred for training activities of Group employees was approximately €540,000 (approximately €360,000 in 2020). In addition, there are training costs for agency workers, which in 2021 were around €178,000 (around €123,000 in 2020).
With the aim of developing a dialogue and continuous involvement between the company and its employees, Sabaf organises meetings and sharing sessions in which the results of projects to improve quality, efficiency and productivity are presented.
The HR representatives provide assistance to all Group employees on matters relating to the employment relationship.
The focus on internal communication uses, among other things, advanced tools that can reach all employees, such as a dedicated portal and electronic bulletin boards.
Systematic meetings in the various departments promote communication and involvement of personnel.
Sabaf is constantly committed to ensuring equal opportunities for women employees, who at the end of 2021 represent 39.1% of the workforce (38% in 2020).
| 31.12.2021 | 31.12.2020 | 31.12.2019 | ||||
|---|---|---|---|---|---|---|
| no. | % | no. | % | no. | % | |
| 778 | 60.9 | 724 | 62.0 | 657 | 63.5 | |
| 500 | 39.1 | 444 | 38.0 | 378 | 36.5 | |
| TOTAL | 1,278 | 100.0 | 1,168 | 100.0 | 1,035 | 100.0 |
The Group, in accordance with the organisational and production requirements, is attentive to the family requirements of its employees. To date, most of the demands for reduced working time made by workers have been met.
| 31.12.2021 | 31.12.2020 | 31.12.2019 | ||||
|---|---|---|---|---|---|---|
| no. | % | no. | % | no. | % | |
| 776 | 60.7 | 722 | 61.8 | 651 | 62.9 | |
| Full-time | 446 | 34.9 | 387 | 33.1 | 327 | 31.6 |
| 1,222 | 95.6 | 1,109 | 94.9 | 978 | 94.5 | |
| 2 | 0.2 | 2 | 0.2 | 6 | 0.6 | |
| Part-time | 54 | 4.2 | 57 | 4.9 | 51 | 4.9 |
| 56 | 4.4 | 59 | 5.1 | 57 | 5.5 | |
| TOTAL | 1,278 | 100.0 | 1,168 | 100.0 | 1,035 | 100.0 |
| 31.12.2021 | 31.12.2020 | 31.12.2019 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (%) | ||||||||||
| < 30 years old | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| from 30 to 50 years old | 0 | 0 | 0 | 1 | 0 | 1 | 1 | 0 | 1 | |
| Managers | over 50 years old | 1 | 0 | 1 | 1 | 0 | 1 | 1 | 0 | 1 |
| TOTAL | 1 | 0 | 1 | 2 | 0 | 2 | 2 | 0 | 2 | |
| < 30 years old | 3 | 1 | 4 | 2 | 1 | 3 | 1 | 2 | 3 | |
| White collars and | from 30 to 50 years old | 10 | 5 | 15 | 10 | 5 | 15 | 10 | 5 | 15 |
| middle managers | over 50 years old | 2 | 1 | 3 | 2 | 1 | 3 | 2 | 1 | 3 |
| TOTAL | 15 | 7 | 22 | 14 | 7 | 21 | 13 | 8 | 21 | |
| < 30 years old | 11 | 5 | 16 | 10 | 4 | 14 | 10 | 3 | 13 | |
| from 30 to 50 years old | 27 | 22 | 49 | 29 | 22 | 51 | 31 | 22 | 53 | |
| Blue collars | over 50 years old | 7 | 5 | 12 | 7 | 4 | 11 | 7 | 4 | 11 |
| TOTAL | 45 | 32 | 77 | 46 | 30 | 76 | 48 | 29 | 77 | |
| < 30 years old | 14 | 6 | 20 | 12 | 6 | 18 | 10 | 5 | 15 | |
| from 30 to 50 years old | 37 | 27 | 64 | 40 | 27 | 67 | 42 | 27 | 69 | |
| TOTAL | over 50 years old | 10 | 6 | 16 | 10 | 5 | 15 | 11 | 5 | 16 |
| TOTAL | 61 | 39 | 100 | 62 | 38 | 100 | 63 | 37 | 100 |
The managers of all Group offices come from a geographical area close to the registered offices in which they operate, with the exception of the general manager at the premises of Sabaf China, who has been living in China for many years.
All Group companies apply local national contracts, supplemented with any best deals.
The employees of Sabaf S.p.A. are classified according to the provisions of the National Collective Labour Contract for the metal and engineering industry, supplemented by second-level negotiations, which include:
production bonus per level;
fixed performance bonus (part of which includes part of the previous variable bonus) for all levels;
As from 2019, Sabaf S.p.A. and Faringosi Hinges have launched a new corporate welfare platform (Edenred), which has been very well received by employees. The platform has also been extended to C.M.I. and C.G.D. as from 2020.
The Group believes that a fundamental element of the valuation system is represented by the training opportunities provided.
A long-term incentive plan (stock grant plan) was introduced in 2018, which envisages the free allocation of shares to parties (directors and employees) who hold or will hold key positions for Sabaf S.p.A. and its subsidiaries. In 2021, the shareholders' meeting approved a new long-term incentive plan, linked to the economic-financial and sustainability objectives set out in the 2021-2023 Business Plan. The socio-environmental sustainability objectives were defined with reference to the issues that the materiality analysis has highlighted as being of greatest relevance to Sabaf and its stakeholders:
| MATERIAL TOPIC | KPI | IMPACT ON THE LTI PLAN |
|---|---|---|
| Emissions into the atmosphere | CO2 emissions scope 1 + scope 2 market-based/Revenue | 15% |
| Development of resources and skills | Hours of training per capita (by collaborator) | 5% |
| Health and safety of personnel | Summary indicator of injuries (injury rate x injury lost day rate x 100) |
5% |
| KPI | Unit of measurement | 2020 FINAL BALANCE |
2021 OBJECTIVE |
2021 FINAL BALANCE |
2022 OBJECTIVE |
2023 OBJECTIVE |
|---|---|---|---|---|---|---|
| CO2 emissions | tCO2eq/millions of Euro |
132 | 126 | 111 | 120 | 114 |
| Hours of training | h | 13.9 | 11.0 | 20.4 | 13 | 15 |
| Summary indicator of injuries |
- | 177 | 140 | 327 | 120 | 100 |
The Remuneration Report explains the other key features of the LTI Plan.
A Group-wide incentive system linked to collective and individual objectives (MBOs) is in place, involving managers and other employees with managerial responsibilities. In 2021, this incentive system involved 63 employees of the Group (57 men and 6 women). The operating mechanisms of the LTI system are described in the Remuneration Report.
With the aim of rewarding the contribution of personnel to the achievement of company objectives, as from 2016 Sabaf S.p.A. introduced an incentive system related to quality objectives (reduction of waste and rework), production efficiency and precision in carrying out projects.
In 2021, improvement targets in these areas were set for 113 people involved in relevant business processes.
| (no.) | White Collars | Blue Collars | TOTAL |
|---|---|---|---|
| 39 | 65 | 104 | |
| 3 | 6 | 9 | |
| TOTAL | 42 | 71 | 113 |
In addition to being a tool for steering towards challenging objectives (580 objectives were assigned, achieved or exceeded in 62% of cases), the QFP award stimulated teamwork and favoured the sharing of short- and medium-long term development plans at all company levels.
The supplementary company contract of Sabaf S.p.A. envisages a variable performance bonus for all employees, also based on quality and productivity indicators, which also in 2021 could be enjoyed in the form of company welfare. In consideration of the results achieved, the VPB is 103.8% above target in 2021.
C.M.I. has a VPB agreement in place for the three-year period 2020 to 2022, with the possibility of converting all or part of the bonus achieved into company welfare. The VPB is 75% above target in 2021.
In 2021, at Faringosi Hinges, a VBP agreement was established for the first time, shared with trade union representatives and valid for the three-year period 2021 to 2023, with the possibility of converting all or part of the bonus achieved into company welfare. The VPB is 100% above target in 2021.
In 2018, Sabaf S.p.A. introduced a Personnel Participation Bonus (PPB) for all its employees who, through effective participation, help to achieve the company's objectives.
This bonus was paid also in 2021 in the form of company welfare.
The forms of social security in force for all Group employees are those envisaged by the regulations in force in the various Countries in which the Group operates.
| MINIMUM INCREASE (%) | 2021 | 2020 | 2019 | |||
|---|---|---|---|---|---|---|
| Sabaf S.p.A. | 29% | 29% | 29% | 29% | 29% | 29% |
| Faringosi Hinges s.r.l. | 3% | 3% | 3% | 3% | 3% | 3% |
| A.R.C. s.r.l. | 0% | 0% | 0% | 0% | 0% | 0% |
| C.M.I. s.r.l.15 | 2% | 2% | 2% | 2% | - | - |
| C.G.D. s.r.l. | 0% | 0% | 0% | 0% | 0% | 0% |
| C.M.I. Polish branch | 2% | 2% | 4% | 4% | 20% | 20% |
| Sabaf Turkey | 15% | 15% | 14% | 14% | 14% | 14% |
| Okida | 0% | 0% | 0% | 0% | 0% | 0% |
| Sabaf Brazi | 14% | 14% | 13% | 13% | 13% | 13% |
| Sabaf China | 338% | 292% | 395% | 342% | 240% | 204% |
The Group has procedures in place to systematically check the regular contribution of suppliers and contractors and the correct hiring of their employees.
| (%) | 2021 | 2020 | 2019 |
|---|---|---|---|
| White-collars, middle managers and managers | 82% | 78% | 83% |
| Blue Collars | 87% | 79% | 82% |
15 2019 data not available for C.M.I. s.r.l..
14 As part of the calculation of the data relating to the ratio between the standard salary of a newly hired employee by gender recognised by the Group companies and the minimum salary provided for in the contracts, more detailed data became available than was considered for the calculation carried out last year and reported in 2020 DNI. The data that became available during 2021 made it possible to refine the calculation both for the current reporting year (2021) and, consistently, for the previous years (2019 and 2020), in order to give as reliable and consistent a representation as possible; therefore, this DNI reports the most accurate data for both 2021 and 2019 and 2020. For a better representation of the data, compared to last year, the increases in percentage terms of the minimum salary recognised by Group companies compared to the minimum salary provided for by collective agreements are shown.
The Health & Safety risks to which Sabaf and contractors' personnel are exposed are related to the processes at the various sites where the business is carried out. In general, the main risks to workers' health and safety are:
• typical risks in metalworking companies, such as cuts and bruises. The Group is also exposed to the compliance risk, resulting from any failure to adopt measures to bring its procedures and operations into line with current health and safety regulations.
The Sabaf Group formally defines the responsibilities, criteria and operating procedures for identifying and planning prevention measures to eliminate and/or mitigate risks, as part of a system that allows the level of safety and hygiene to be optimised and constantly improved through preventive actions.
As from 2019, the function of Group HSE Manager was established with the aim of coordinating the management of Health, Safety and Environment of all companies based on a common policy.
The occupational health and safety management systems of Group companies are structured according to a risk-based approach. Prevention and reduction of risk levels are based on the following factors.
• Effective training: all training courses are planned and managed by internal personnel and/or external trainers, with a propensity to teach and with strong experience in the reference sector (first aid, fire-fighting, work at height, etc.). Job-specific training courses have been designed with a focus on the simulation of real cases and actual experiences, in order to make training meetings more effective. The approach to training aims to overcome the compulsory approach to encourage the active participation of all employees.
With reference to the Covid pandemic, in order to mitigate the risks of contagion, all Group companies promptly adopted preventive measures and strict protocols, which are currently in force and constantly adapted based on best practice.
In the Group companies based in Italy (Sabaf S.p.A., Faringosi Hinges s.r.l., A.R.C. s.r.l., C.M.I. s.r.l., C.G.D. s.r.l.), the risk assessment is carried out by the Employer through the collaboration of the Occupational Health and Safety Officer and the Company Physician, with the participation of all responsible parties (managers and representatives). The involvement of workers is envisaged, both through periodic meetings with safety representatives through the obligation to report possible additional risks. Equivalent systems, applied in accordance with applicable laws, are in place at the foreign offices.
In Sabaf S.p.A., in Faringosi Hinges s.r.l. and C.G.D. s.r.l., the health and safety management system has been certified according to ISO 45001 since 2017, 2021 and 2020, respectively.
The management systems of the other Group companies are not certified. Moreover, the coordination at central level directs all companies towards a shared approach and methodology. For example, the support management system used at Sabaf S.p.A. has been gradually extended to certain subsidiaries (Faringosi Hinges, A.R.C., Sabaf Brazil, Sabaf Turkey). The Group started the management and coordination of the related safety management systems for the recently acquired companies (Okida and the C.M.I. Group) as well.
| NUMBER AND DURATION OF INJURIES | 2021 | 2020 | 2019 |
|---|---|---|---|
| Hours worked | 2,308,816 | 1,801,120 | 1,513,620 |
| Near misses/Medical treatments without lost days | 47 | 103 | 39 |
| Recordable injuries17 (absence < 6 months) – excluding fatalities | 35 | 29 | 15 |
| of which injuries while travelling to/from work18 | 0 | 0 | 0 |
| Accidents with serious consequences (absence > 6 months) - excluding fatalities |
1 | 0 | 1 |
| of which injuries while travelling to/from work | 0 | 0 | 0 |
| Deaths as a result of injuries | 0 | 0 | 0 |
| of which injuries while travelling to/from work | 0 | 0 | 0 |
| Days lost due to injury | 484 | 194 | 77519 |
| Total injuries - including fatalities | 36 | 29 | 16 |
| of which injuries while travelling to/from work | 0 | 0 | 0 |
| INJURY RATE (number of injuries x 1,000,000/hours worked) | 2021 | 2020 | 2019 |
|---|---|---|---|
| Recordable injury rate | 15.16 | 16.10 | 9.91 |
| High-consequence injury rate | 0.43 | 0.00 | 0.66 |
| Fatality rate as a result of injuries | 0.00 | 0.00 | 0.00 |
| Total injury rate | 15.59 | 16.10 | 10.57 |
| INJURY LOST DAY RATE (days of absence x 1,000/hours worked) | 2021 | 2020 | 2019 |
|---|---|---|---|
| Rate based on recordable and high-consequence injuries | 0.21 | 0.11 | 0.51 |
18 Only if transport has been organised by the organisation and the transfers have taken place within working hours.
19 The 2019 days lost and injury severity index have been restated due to the continued absence of an injury in 2021.
17 Recordable injury includes any occupational injury, including fatal injury, that occurs to a person during or as a result of work, resulting in absence from work for less than 6 months, alternative activities or medical treatment.
| NUMBER AND DURATION OF INJURIES | 2021 | 2020 | 2019 |
|---|---|---|---|
| Hours worked | 460,135 | 201,761 | 85,927 |
| Recordable injuries20 (absence < 6 months) - excluding fatalities | 7 | 0 | 1 |
| of which injuries while travelling to/from work21 | 0 | 0 | 0 |
| Accidents with serious consequences (absence > 6 months) - excluding fatalities |
0 | 1 | 0 |
| of which injuries while travelling to/from work | 0 | 0 | 0 |
| Deaths as a result of injuries | 0 | 0 | 0 |
| of which injuries while travelling to/from work | 0 | 0 | 0 |
| Days lost due to injury | 76 | 198 | 32 |
| Total injuries - including fatalities | 7 | 1 | 1 |
| of which injuries while travelling to/from work | 0 | 0 | 0 |
| INJURY RATE (number of injuries x 1,000,000/hours worked) | 2021 | 2020 | 2019 |
|---|---|---|---|
| Recordable injury rate | 15.21 | 0.00 | 11.64 |
| High- consequence injury rate | 0.00 | 4.96 | 0.00 |
| Fatality rate as a result of injuries | 0.00 | 0.00 | 0.00 |
| Total injury rate | 15.21 | 4.96 | 11.64 |
| INJURY LOST DAY RATE (days of absence x 1,000/hours worked) | 2021 | 2020 | 2019 |
|---|---|---|---|
| Rate based on recordable and high-consequence injuries | 0.17 | 0.98 | 0.37 |
During 2021, there was an injury resulting in a period of absence of more than 6 months and related to a hand injury suffered by an operator during a routine maintenance activity. All other recorded injuries were minor and mainly related to operator distraction. The injury rate is slightly down compared to 2020. No cases of occupational disease were reported at Group level in 2021.
In compliance with the laws in force, Group companies prepared and implemented health supervisory plans for employees, with health inspections aimed at the specific risks of the work activities carried out.
20 Recordable injury includes any occupational injury, including fatal injury, that occurs to a person during or as a result of work, resulting in absence from work for less than 6 months, alternative activities or medical treatment.
21 Only if transport has been organised by the organisation and the transfers have taken place within working hours.
Since 2016, Sabaf S.p.A. has joined the WHP (Workplace Health Promotion) programme, committing itself to implementing good practices in the field of workplace health promotion. The company is committed not only to implementing all measures to prevent accidents and occupational diseases but also to offering its workers opportunities to improve their health, reducing general risk factors and in particular those most involved in the genesis of chronic diseases. Workplace health promotion is the result of the combined efforts of employers, workers and the company. The following factors contribute to this promotion:
The central idea is simple: Sabaf aims to build, through a participatory process, a context that encourages the adoption of positive behaviour and choices for health. The WHP Programme envisages the development of activities (good practices) in 6 thematic areas: food, fight against smoking, fitness training, safe and sustainable mobility, fight against addictions, wellbeing/reconciling life and work.
Only materials that fully comply with the requirements of Directive 2011/65/EU (RoHS Directive) which tends to limit the use of hazardous substances such as lead, mercury, cadmium and hexavalent chromium are used for production.
Sabaf complies with the labour laws of the various countries and the conventions of International Labour Organisation (ILO) on Workers' Rights (freedom of association and collective bargaining, consultation, right to strike, etc.), systematically promoting dialogue between the parties and seeking an adequate level of agreement and sharing of company strategies by the personnel.
In case of organisational changes, with regard to the minimum notice period, the Group complies with the provisions of the law and the reference contracts of the various countries. In January 2018, the second level company agreement of Sabaf S.p.A. was renewed, valid until June 2021. The agreement includes an extension clause and a renewal is being finalised at the beginning of 2022.
The key points of this agreement are set below:
• the sharing between the company and trade unions and Unitary Union Representative Body of priorities on which to channel resources and energy in the coming years (producing quality, creating and maintaining efficiency, becoming more flexible);
In the Group companies, at 31 December 2021, 150 employees, or 11.7% of the total, were members of trade unions (in 2020, 164 employees, or 14.0% of the total, were members).
Hours of participation in trade union activities during 2021 amounted to 0.24% of the hours worked (0.12% in 2020).
| PARTICIPATION IN TRADE UNION ACTIVITIES | 2021 | 2020 | 2019 | BENCHMARK22 |
|---|---|---|---|---|
| Meeting | ||||
| Number of hours | 1,537 | 209 | 2,373 | |
| Percentage over hours worked | 0.07 | 0.01 | 0.16 | |
| Number of hours per capita | 1.2 | 0.2 | 2.3 | 1.7 |
| Leave for trade union duties | ||||
| Number of hours | 1,766 | 1,009 | 1,579 | |
| Percentage over hours worked | 0.08 | 0.06 | 0.10 | |
| Number of hours per capita | 1.4 | 0.9 | 1.5 | |
| Strike | ||||
| Number of hours | 2,196 | 1,017 | 1,459 | |
| Percentage over hours worked | 0.10 | 0.06 | 0.10 | |
| Number of hours per capita | 1.7 | 0.9 | 1.4 | 2.3 |
| TOTAL | ||||
| Number of hours | 5,499 | 2,235 | 5,410 | |
| Percentage over hours worked | 0.24 | 0.12 | 0.36 | |
| Number of hours per capita | 4.3 | 1.9 | 5.2 | 4.0 |
Among the 2,196 hours of strikes in 2021, only 39 are attributable to internal causes. No social safety valves were used during 2021.
Between July and October 2021, a climate analysis called "Conoscere e Ascoltare" (Knowing and Listening) was carried out in a first set of Group companies and specifically at Sabaf S.p.A., C.M.I. (in Italy and Poland), C.G.D. and Faringosi Hinges.
The attendance was very high (601 total participants) and allowed people to express their perceptions of the key elements of their working life in our Group in a frank and direct manner.
The summary of the results reveals an undoubtedly positive and encouraging picture.
Among the elements of working life on which more than 70% of
people expressed a positive perception are safety issues, the sense of belonging and pride in their company, and the canteen.
Note also that the possession of expertise deemed appropriate to one's job and the relationship with one's colleagues are the real treasures of living in the company, which contribute concretely to the foundation of the business climate in the Sabaf Group.
The first results also give us an indication of the elements that people perceive as needing improvement, including the chapter on Training, Evaluation and Incentives and that on Information and Communication.
The Group makes use of all the instruments provided for in the contract for compliance with the company rules and social life. At 31 December 2021, 8 disputes were pending (all with former employees), 1 of which was started in 2021.
Environmental issues are managed through a risk-based approach, in line with the UNI EN ISO 14001:2015 standard. The relevant risk categories are set out below.
Risks of external context context(environmental sustainability), concerning climate change and the objectives of protecting the environment and the territory, through the reduction of environmental impacts and the containment of the use of natural and energy resources. These impacts are considered from the product design stage, through the different stages of its implementation and from a perspective that considers the whole life cycle of the product. With regard to physical risks related to climate change, such as the increase in global temperatures, sea level and the increase in extreme weather events, the Group has not identified any significant risks to date. On the other hand, transitional risks, such as the increase in energy costs, changes in consumer choices or those related to the introduction of new technologies, which the Group manages at a strategic level, are of significant impact and probability.
Strategic risks, including collaboration with strategic service providers with potential environmental risk (waste collection and disposal, cleaning services, maintenances).
Legal and compliance risks, related to compliance with law requirements (authorisations and compliance obligations) and requests of local institutions, also with regard to reporting obligations.
The following paragraph describes how these risks are managed.
The Group is committed to the following objectives:
Sabaf S.p.A. adopted and maintains an Integrated Management System of Health and Safety, Environment and Energy (EHS&En) that, by integrating with the other Management Systems operating within the company, is an effective means of pursuing a constant reduction in risks, environmental impacts and energy consumption through the following instruments:
Since 2003, the Environmental Management System of the Ospitaletto production site (which covers approximately 50% of the Group's total production) has been certified in compliance with ISO 14001.
In 2015, the Energy Management System implemented at the premises of Ospitaletto was certified in compliance with the ISO 50001 standard.
In 2008, Sabaf S.p.A. obtained the Integrated Environmental Authorisation (IPPC) from the Lombardy Region pursuant to Legislative Decree 59 of 18 February 2005.
With regard to the recently acquired companies (Okida and C.M.I. Group), the Group is starting the management and coordination activities for the purpose of managing environmental issues.
For many years, the Sabaf Group has been at the forefront in offering gas burners that are characterised by yields higher than standard burners. In the range of standard single ring flame sizes, since the beginning of 2000 Sabaf has introduced four series of burners (Series III, AE, AEO and HE) to the market, all of which guarantee high energy efficiency, with an efficiency of up to 68%.
The DCC series of special burners was introduced in the range of special burners: they are characterised by an energy efficiency of over 60%, the highest available on the market today for multiple flame ring burners. Moreover, DCC burners with a brass flamespreader ring and efficiency of more than 68% were produced specifically for the Chinese market, the top of what is currently available on that market.
High efficiency burners represent more than 25% of the total burners produced.
The production of aluminium alloy valves has several advantages compared to the production of brass valves: elimination of the hot moulding phase of brass, lower lead content in the product, lower weight and consequent reduction in consumption for packaging and transport. Light alloy valves currently account for around 90% of the valves produced by the Sabaf Group.
In the production process of valves and burners, it is essential to wash metals in several stages. Since 2013, Sabaf S.p.A. has been using a washing system based on a modified alcohol, a solvent that is redistillable (and therefore recyclable) due to its properties. The environmental impact and operating costs of this solvent have been substantially eliminated, as well as the emissions and production of special waste.
This efficient and sustainable technology has also been used at the Sabaf do Brasil production site (since 2016 ) and at the Sabaf Turkey production site (since 2018).
The SABAF Group is one of the strategic suppliers of the UK government's Hy4Heat feasibility project. The Hy4Heat project aims to determine whether it is technically possible, safe and cost-effective to replace natural gas (methane) with 100% hydrogen in residential and commercial buildings and gas appliances. The Hy4Heat project is funded by BEIS (the UK Government's Department for Business, Energy and Industrial Strategy) and involves ten separate working groups. The Sabaf Group, through its subsidiary A.R.C., participates in the Working Group 4, which deals with domestic cooking and heating appliances. A.R.C. developed and produced the burners that are now included in the world's first ranges of 100% hydrogen-powered cookers and hobs. These were installed on Glen Dimpex cooking appliances at HyHome, two purposebuilt houses featuring hydrogen-powered appliances in a "real life" scenario in Low Thornley, near Gateshead, in the North of England. In the next phase, cooking appliances with hydrogen burners will be included for the Community Trial involving 300 homes, organised by Scottish Gas Networks (SGN) in Fife and starting in 2022. In addition to the Community Trial, the UK government intends to commission a Village Trial with around 2,500 homes in 2025 and a Town Trial (10,000 homes) in the last part of the decade, before potentially converting the entire UK gas network to hydrogen in the future. A.R.C. also participates in the Working Group 5B (Development of Commercial Hydrogen Appliances, which includes commercial restaurant equipment) and has developed commercial hob burners for Falcon Foodservice Equipment Ltd.
Aware of the value of complete and transparent disclosure, in 2021, Sabaf joined for the second consecutive year the Climate Change and Water programmes of CDP, an international nonprofit organisation that provides businesses, local authorities and governments with a system to measure, track, manage and share information on the environment globally. In particular, companies are required to participate in an annual survey on the impact of their activities on the environment, the management of their environmental risks and the results achieved.
The aim is to make environmental performance central to business and investment decisions by leveraging information transparency.
In its second year of participation, Sabaf received a B- rating in the Climate Change section on a scale ranging from A to F.
Sabaf products can be easily recycled because they are made almost entirely of brass, aluminium alloys, copper and steel.
| (t) | 2021 Consumption | 2020 Consumption | 2019 Consumption |
|---|---|---|---|
| RAW MATERIALS | |||
| Steel | 26,801 | 26,046 | 21,881 |
| Aluminium alloys | 11,326 | 9,188 | 6,476 |
| Brass | 1,227 | 638 | 481 |
| Enamel | 289 | 246 | 193 |
| Cast iron | 144 | 96 | 142 |
| Stainless steel | 139 | 103 | 116 |
| Zamak | 12 | 10 | 11 |
| Copper | 7 | 8 | - |
| Bronze | 1 | 0 | 1 |
| PACKAGING MATERIALS | |||
| Cardboard | 1,019 | 706 | 397 |
| Wood | 935 | 683 | 479 |
| Plastic | 281 | 220 | 136 |
90% of brass, 70% of aluminium alloys and 33% of steel used in 2021 are produced by scrap recycling; the remaining 30% of aluminium alloys and 67% of steel are produced from ore. The use of recycled raw materials is constantly increasing.
The Group estimates that at least 40% of the cardboard and 66% of the plastic used for packaging comes from recycling. Cardboard and wood are renewable materials.
The increases in raw material and packaging consumption in 2021 reflect the Group's higher production levels compared to the previous year. Sabaf products fully comply with the requirements of Directive 2011/65/EU (RoHS Directive) which tends to limit the use of hazardous substances such as lead in the production of electrical and electronic equipment. Moreover, Sabaf products fully comply with the requirements of Directive 2000/53/EC (End of Life Vehicles), i.e. the heavy metal content (lead, mercury, cadmium, hexavalent chromium) is below the limits imposed by the Directive and/or any exemptions.
With regard to the REACH Regulation (Regulation no. 1907/2006 of 18/12/2006), Sabaf is a downstream user of substances and preparations. The products supplied by Sabaf are classified as articles that do not give rise to the intentional emission of substances during normal use, therefore there is no registration of the substances contained in them. Sabaf involved the suppliers to ensure that they fully comply with REACH Regulation and to obtain confirmation that they meet their obligations to pre-register and register the substances or preparations they use. The data collected was used to complete the SCIP (Substances of Concern In Products) database as per the provisions of the ECHA agency.
| 2021 Consumption | 2020 Consumption | 2019 Consumption | ||
|---|---|---|---|---|
| Electricity | MWh | 44,129 | 35,378 | 28,576 |
| from renewable sources | MWh | 4,853 | 158 | 50 |
| from non-renewable sources | MWh | 39,276 | 35,220 | 28,526 |
| Natural gas | m3 x1,000 |
5,474 | 4,478 | 3,740 |
| Diesel | lx1,000 | 79 | 57 | 51 |
| Gasoline | lx1,000 | 12 | 17 | 10 |
| LPG | lx1,000 | 0,10 | 0 | 0,09 |
| TOTAL CONSUMPTION | GJ | 358,285 | 290,125 | 238,887 |
The main sources used are:
Electricity from renewable sources is produced by a photovoltaic plant operating at the C.M.I. plant (151 MWh in 2021) or comes from the purchase of I-REC certificates (4,702 MWh in 2021).
Sabaf S.p.A., Sabaf Brazil and Sabaf Turkey use natural gas as an energy source for the casting of aluminium and for the firing of enamelled lids. The production of other Group companies does not use methane as an energy source.
| (kWh on turnover in €) | 2021 | 2020 | 2019 |
|---|---|---|---|
| Energy intensity | 0.378 | 0.436 | 0.426 |
The trend in energy consumption is closely related to production levels; in relation to sales revenues, there was a decrease in consumption, which was also made possible by constant interventions aimed at improving the energy efficiency of plants.
| (m3) | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| from waterworks | 69,109 | 50,682 | 56,409 | |
| of which freshwater | 69,109 | 50,682 | 56,409 | |
| of which other water | 0 | 0 | 0 | |
| from well | 30,630 | 27,675 | 35,516 | |
| of which freshwater | 30,630 | 27,675 | 35,516 | |
| of which other water | 0 | 0 | 0 | |
| TOTAL | 99,739 | 78,357 | 91,925 |
All the water used in the production processes by Group companies is destined for disposal or internal recycling for reuse in company processes: as a consequence, there is no industrial waste water.
The water used in the die-casting and enamelling processes at the plant of Ospitaletto, at the end of the production processes, is treated in chemical/physical concentration plants that make it possible to significantly reduce the quantities of water required and waste produced. Since 2019, a concentration plant has also been in operation at the Brazilian production site.
At the Ospitaletto plant, there is a plant for the collection of rainwater intended for use in industrial activities. In 2021, 2,708 m3 were collected.
Trimmings and waste from the production process are identified and collected separately for recycling or disposal. The risers deriving
from aluminium die-casting are intended for direct reuse. The waste, broken down by type and method of disposal, is summarised below24.
| 2021 (t) |
Incidence (%) |
2020 (t) |
Incidence (%) |
2019 (t) |
Incidence (%) |
|
|---|---|---|---|---|---|---|
| Similar to urban | 356 | 3.0 | 291 | 2.7 | 225 | 2.8 |
| Total hazardous | 2,238 | 18.7 | 2,256 | 21.1 | 1,631 | 20.3 |
| - reuse | 185 | 1.5 | 142 | 1.3 | 92 | 1.2 |
| - recycling | 67 | 0.6 | 5 | 0.1 | 1 | 0.0 |
| - incineration | 1,421 | 11.9 | 1,135 | 10.6 | 746 | 9.3 |
| - temporary and/or last year's storage | 147 | 1.2 | 111 | 1.0 | 59 | 0.7 |
| - other 25 | 418 | 3.5 | 863 | 8.1 | 733 | 9.1 |
| Total non hazardous | 9,385 | 78.3 | 8,132 | 76.2 | 6,164 | 76.9 |
| - reuse | 4,725 | 39.4 | 3,882 | 36.3 | 2,370 | 29.6 |
| - recycling | 2,427 | 20.3 | 2,068 | 19.4 | 747 | 9.3 |
| - recovery | 68 | 0.6 | 70 | 0.7 | 111 | 1.4 |
| - incineration | 856 | 7.0 | 690 | 6.5 | 1,359 | 17.0 |
| - temporary and/or last year's storage | 1,266 | 10.6 | 1,334 | 12.5 | 707 | 8.8 |
| - other | 43 | 0.4 | 88 | 0.8 | 870 | 10.8 |
| Total waste | 11,979 | 100.0 | 10,679 | 100.0 | 8,020 | 100.0 |
The breakdown of waste according to composition is given below:
| 2021 (t) |
Incidence (%) |
2020 (t) |
Incidence (%) |
||
|---|---|---|---|---|---|
| Metals | 8,042 | 67.1 | 6,935 | 64.9 | |
| Liquid waste | 2,611 | 21.8 | 2,606 | 24.4 | |
| Sludge and powdery waste | 433 | 3.6 | 353 | 3.3 | |
| Plastic | 68 | 0.6 | 58 | 0.6 | |
| Packaging waste | Cardboard and paper | 152 | 1.3 | 128 | 1.2 |
| Wood | 297 | 2.5 | 269 | 2.5 | |
| Other | 376 | 3.1 | 330 | 3.1 | |
| Total waste | 11,979 | 100.0 | 10,679 | 100.0 |
| 2021 | 2020 | 2019 | |
|---|---|---|---|
| Economic value generated by the Group (€/000) |
267,918 | 190,001 | 160,095 |
| Total hazardous waste/Generated economic value (kg in €/000) |
8 | 12 | 10 |
| Total waste/Generated economic value (kg in €/000) |
45 | 56 | 50 |
24 Data does not include the Polish branch of C.M.I..
25 Includes landfill disposal.
The increase in the volume of waste generated in 2021 is related to higher production levels. The incidence of waste on the economic value generated by the Group decreased significantly. The Group continues its efforts to reduce the production of special hazardous waste, also by purchasing raw materials and substances that are already not hazardous originally. All Group companies have separate waste collection.
No significant spills occurred in 2021.
A large part of atmospheric emissions of the Sabaf Group derives from activities defined as "negligible pollution".
final inspection of the finished product. This process generates negligible oily mists.
The efficiency level of the filtration systems is ensured through their regular maintenance and the regular monitoring of all emissions. Monitoring in 2021 showed that all emissions complied with the limits imposed by the law.
| CO2 EMISSIONS26 | 2021 | 2020 | 2019 | |
|---|---|---|---|---|
| Scope 1 (direct emissions) | tCO2eq | 11,493 | 9,409 | 7,793 |
| from refrigerant gases | tCO2eq | 231 | 162 | 59 |
| from fuel consumption | tCO2 | 11,262 | 9,247 | 7,734 |
| Scope 2 (indirect emissions) - location based | tCO2 | 14,150 | 11,998 | 9,979 |
| Scope 2 (indirect emissions) - market based | tCO2 | 17,641 | 14,969 | 12,484 |
| Total emissions Scope 1+2 (location based) | tCO2eq | 25,643 | 21,407 | 17,772 |
| Total emissions scope 1+2 (market based) | tCO2eq | 29,134 | 24,378 | 20,277 |
The use of natural gas to power melting furnaces results in the emission of NOX and SOX into the atmosphere; however, these emissions are not significant. Sabaf does not currently contain any substances that damage the atmospheric ozone layer, with the exception of the refrigerant used in some air conditioners, which is managed in compliance with the reference standards.
Over the three-year period from 2019 to 2021, the Group did not suffer any sanctions related to environmental compliance and no dispute is pending.
∙ year 2021: Scope 1 fuels and F-GAS: Defra 2021 where available, otherwise Ispra 2016 - Scope 2 location-based: Terna 2019 - Scope 2 market-based: AIB 2020, where available, otherwise Terna 2019. The increase in refrigerant gas emissions in 2021 was due to the recharging and maintenance of air conditioning systems.
26 The factors used for calculating emissions are:
∙ year 2019: Scope 1 fuels and F-GAS: Defra 2019 - Scope 2 location-based: Terna 2017 - Scope 2 market-based: AIB 2018, where available, otherwise Terna 2017;
∙ year 2020: Scope 1 fuels and F-GAS: Defra 2020 where available, otherwise Ispra 2016 - Scope 2 location-based: Terna 2018 - Scope 2 market-based: AIB 2019, where available, otherwise Terna 2018;
The new UNI EN ISO 9001:2015 standard with which Sabaf complies, introduces the concept of a "risk-based approach", which is fundamental for planning the Quality Management System. The relevant risk categories in this area are set out below.
Strategic risks, including intellectual property protection (there is a risk that some Group products, even if under patent protection, may be copied by competitors) and collaboration with critical suppliers.
Legal and compliance risks, relating to non-compliance with product regulations: Sabaf operates in international markets that adopt different laws and regulations. The product must therefore comply with the mandatory and voluntary requirements and the organisation must be able to show this consistency to the certification bodies responsible for control.
Business continuity risks, risk of non-delivery to customers due to stoppages for reasons of force majeure (unavailability of raw materials or components, critical logistics and transport issues, production stoppages or delays, total or partial lockdowns). This risk has become increasingly likely and impactful over the past two years, requiring immediate responses from the organisation to avoid or minimise the consequences.
The Sabaf Group's products represent strategic components in the household appliance supply chain. Since many components are supplied on an exclusive or customised basis, it is often impossible or difficult for other players to offer alternative products.
The Group is fully aware of the effects of any non-deliveries and has taken all steps to ensure continuity of supply. Specifically, in 2021, the Group:
• supported the peak demand of the individual plants also by using the production of the other plants;
The pandemic has made it even more obvious to large manufacturers of household appliances that they need a solid, reliable supplier base that can respond immediately to unpredictable changes in the economic scenario. In this context, the Sabaf Group is proving to be a partner you can count on.
The Quality Management System has the aim of enabling the achievement of the following objectives:
In order to contribute consistently to the pursuit of these objectives, the Sabaf Group undertakes a series of commitments explicitly stated in the Charter of Values:
During 2021, the Quality Management System was constantly monitored and maintained to ensure the correct implementation and compliance with the requirements of the ISO 9001 standard.
As part of the internal audit plan for 2021, a total of 16 functional areas of offices and production departments were checked at the Ospitaletto plant, 14 at Sabaf Brazil and 16 at Sabaf Turkey. The results of these checks did not reveal any critical aspects of the system, which therefore fully complies with the standard.
With regard to third-party inspections of the Quality Management System, annual inspections were carried out in 2021 at all certified plants, with the exception of the plants in Turkey, for which the next inspection is scheduled for 2022. The interventions were successfully concluded, confirming the adequacy of the System and the maintenance of the ISO 9001 certification. Some inspections were carried out remotely due to national regulations and adjustments made by the Group to reduce physical contact and ensure safety.
Sabaf protects the health of consumers by checking that the materials that make up its products comply with the international directives in force (REACH and RoHS directives and completion of the SCIP database).
To ensure the safe operation of valves, thermostats and burners, Sabaf carries out leak tests on 100% of its production.
Valves and thermostats are also certified by third parties that
The customer satisfaction survey, carried out every two years, is part of the stakeholder engagement activities that Sabaf undertakes in order to constantly improve the quality of the services offered and to
CUSTOMER COMPLAINT HANDLING
Sabaf systematically handles all complaints from customers. A specific process is in place and envisages:
With the exception of actions to recover receivables, there is no dispute with customers.
guarantee compliance with the operating and safety requirements required to be marketed on the world market.
Hinges and electronic components do not pose a significant risk to consumer safety.
During the reporting period, there were no instances of noncompliance with regulations regarding the health and safety impacts of products.
respond to customer expectations.
The last investigation was launched at the end of 2021; at the date of publication of this document, the results are not yet available.
• customer feedback through 8D reports (quality management tool that enables a cross-functional team to determine the causes of problems and provide effective solutions).
The supply chain presents different types of risks, which must be assessed and monitored in order to limit the possibility of damage to the companies of the Group.
Risks of external context. Considering that a significant (although not predominant) portion of purchases takes place on international markets, the Group monitors and manages the risk of instability in supplier Countries.
Strategic risks related to a socially responsible approach along the supply chain (quality of supply, respect for human rights and protection of workers, respect for the environment, energy consumption). The definition of the criticality level, especially environmental and social, derives from a risk assessment that takes into account the type of process, product or service provided and the geographical location of the supplier.
Operational risks, which became particularly important in 2021 and are mainly related to:
In the health emergency, the Sabaf Group has also acted in full compliance with the principles of conduct and the commitments made in the Charter of Values in its dealings with suppliers.
Maximum punctuality in meeting payments within the agreed deadline was always ensured.
In the context of the pandemic, sharing good social responsibility practices, mutual fairness and always viewing the relationship as a strategic partnership proved to be strategic factors in facing new and unpredictable challenges together with suppliers.
The support of suppliers has been instrumental in ensuring continuity of supply throughout the supply chain, which is essential for the whole household appliance sector.
All Group companies comply with the principles of conduct defined in the Charter of Values in managing relations with suppliers.
The Group is gradually implementing a purchasing management policy valid for all Group companies. Relations with suppliers of all Group companies are managed on the basis of uniform procedures.
With regard to the management by suppliers of quality, environment and social responsibility, if the law in force already requires Sabaf to meet the minimum requirements, the risk is considered to be lower, otherwise periodic audits are carried out on the management of these aspects. In 2021, class A and B suppliers were analysed to cover 95% of the expenditure²⁷.
This analysis revealed 40 cases of suppliers considered potentially critical, following which 14 audits were carried out from which no critical non-conformities were found but only observations. In connection with non-critical non-compliances, the suppliers were asked to take appropriate action.
27 The valuation is made for suppliers with an average annual turnover to Sabaf of more than €5,000 over the previous three years. Residual suppliers are considered not significant.
Relations with suppliers are based on long-term collaboration and on fairness in negotiations, integrity and contractual fairness and the sharing of growth strategies.
To encourage the sharing with suppliers of the values that underpin its business model, Sabaf has distributed the Charter of Values in a widespread manner.
Sabaf guarantees absolute impartiality in the choice of suppliers and undertakes to strictly comply with the agreed payment terms. Very short payment terms are agreed for artisan and less structured suppliers (mainly 30 days).
Sabaf requires its suppliers to be able to renew themselves technologically, so that the best quality/price ratios can always be proposed, and favours suppliers who have obtained or are obtaining Quality and Environmental System certifications.
In 2021, the turnover of suppliers of the Sabaf Group with a Certified Quality System was equal to 72% of the total (65% in 2020).
As shown in the table below, the Sabaf Group aims to encourage development in the area in which it operates and, therefore, in selecting suppliers, favours local companies28.
| Total 2021 purchases (€/000) |
% domestic purchases |
Total 2020 purchases (€/000) |
% domestic purchases |
|
|---|---|---|---|---|
| Sabaf S.p.A. | 115,185 | 78% | 71,882 | 75% |
| Faringosi Hinges | 14,382 | 99% | 8,102 | 100% |
| A.R.C. s.r.l. | 4,186 | 85% | 2,483 | 85% |
| C.M.I. Group | 34,051 | 98% | 20,391 | 98% |
| Sabaf Turkey | 18,115 | 66% | 12,506 | 55% |
| Okida | 14,644 | 65% | 7,917 | 72% |
| Sabaf Brazil | 21,550 | 95% | 12,341 | 84% |
| Sabaf China | 1,495 | 100% | 542 | 97% |
No disputes with suppliers have arisen in the last three years.
28 The data in the table does not take account of intercompany supplies. Values converted into euro at the annual average exchange rate.
Sabaf has always had an open dialogue with the authorities in every local community in which it is present, in order to promote shared and sustainable industrial development, with positive repercussions for local communities.
The Group, in line with the principles defined in the Charter of Values, acts according to the values of honesty, moral integrity, transparency and fairness also in the management of its tax activity. The Group also believes that the contribution from taxes paid is an important channel through which it can participate in the economic and social development of the countries in which it operates. For this reason, the Group pays attention to the compliance with tax regulations and therefore acts responsibly in the jurisdictions in which it is present.
Therefore, acting responsibly in terms of tax is for the Group a behaviour also oriented towards the protection of the company's assets and the creation of value in the medium-long term.
The Administration and Finance Department is responsible for managing tax issues. The Group has not defined a formalised tax strategy at Group level; individual companies operate in accordance with local tax regulations.
To date, the Group has no formalised tax governance. Responsibility for compliance lies with the Administration and Finance functions of each subsidiary, while the Administration and Finance Department of the parent company performs a supervisory, guidance and coordination function with regard to intra-group relations.
Tax risks are analysed and managed in accordance with the company's overall Enterprise Risk Management model.
To date, the Group has not received any requests from its stakeholders regarding tax issues. Should they arrive, they will be dealt with by the corporate functions in charge of compliance on this matter.
Relations with tax authorities are based on the principles of fairness and full compliance with the different regulations applicable in the Countries where the Group operates. Note that the Group does not engage in tax advocacy.
| (€/000) | ITALY | BRAZIL | TURKEY | CHINA | U.S.A. | INDIA | MEXICO | POLAND30 | TOTAL BEFORE CONSOLIDATION |
CONSOLIDATION ADJUSTMENTS |
TOTAL CONSOLIDATED FINANCIAL STATEMENTS |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Number of employees | 667 | 112 | 447 | 7 | - | - | - | 45 | 1,278 | - | 1,278 |
| Property, plant and equipment other than cash and cash equivalents |
196,850 | 19,866 | 40,328 | 2,983 | - | 1,850 | 2,803 | 4,432 | 269,112 | (31,989) | 237,123 |
| Sales to third parties | 178,071 | 16,632 | 56,138 | 1,817 | - | - | - | 10,601 | 263,259 | - | 263,259 |
| Intra-group revenues to other jurisdictions |
26,873 | - | 3,191 | 212 | 254 | - | - | 768 | 31,298 | (31,298) | - |
| Pre-tax profit | 22,438 | 2,080 | 6,392 | (446) | 40 | (57) | (134) | 746 | 31,059 | (1,379) | 29,680 |
| Income taxes paid | 1,907 | 694 | 2,550 | - | - | - | - | 145 | 5,296 | - | 5,296 |
| Income taxes for the year (A) |
4,943 | 710 | 1,819 | - | - | - | - | 145 | 7,617 | - | 7,617 |
| Differences between the theoretical tax burden and the tax burden booked in the financial statements (B) |
441 | (3) | (221) | - | - | - | - | (11) | 206 | - | 206 |
| Theoretical income tax (C) = (A)+(B) |
5,384 | 707 | 1,598 | (105) | - | - | - | 134 | 7,718 | - | 7,718 |
| Permanent tax differences (D) |
198 | (13) | - | - | - | - | - | - | 185 | - | 185 |
| Other changes (E) | (2.158) | - | (2.107) | 105 | - | - | - | 11 | (4.149) | - | (4.149) |
| Income taxes booked in the accounts, excluding IRAP and withholding taxes (current) (F) = (C)+(D)+(E) |
3,424 | 694 | (509) | - | - | - | - | 145 | 3,754 | 32 | 3,786 |
| IRAP (current) (G) | 1,211 | - | - | - | - | - | - | - | 1,211 | - | 1,211 |
| Total (H) = (F) + (G) |
4,635 | 694 | (509) | - | - | - | - | 145 | 4,965 | 32 | 4,997 |
29 The names and main activities carried out by Group companies are listed in the paragraph "Corporate Governance, Risk Management and Compliance" of this document. 30 CMI Polska z.o.o. was merged into C.M.I. Cerniere Meccaniche Industriali s.r.l. on 31 December 2021.
| (€/000) | ITALY | BRAZIL | TURKEY | CHINA | U.S.A. | INDIA | POLAND | TOTAL BEFORE CONSOLIDATION |
CONSOLIDATION ADJUSTMENTS |
TOTAL CONSOLIDATED FINANCIAL STATEMENTS |
|---|---|---|---|---|---|---|---|---|---|---|
| Number of employees | 666 | 87 | 363 | 8 | - | - | 44 | 1,168 | - | 1,168 |
| Property, plant and equipment other than cash and cash equivalents |
167,729 | 13,345 | 39,057 | 1,808 | - | 1,585 | 3,636 | 227,160 | (29,066) | 198,094 |
| Sales to third parties | 123,156 | 12,347 | 38,881 | 1,092 | - | - | 9,430 | 184,906 | - | 184,906 |
| Intra-group revenues to other jurisdictions |
20,794 | 2 | 1,927 | 123 | 263 | - | 535 | 23,645 | (23,645) | - |
| Pre-tax profit | 8,693 | 2,307 | 4,516 | (625) | 78 | (48) | 719 | 15,640 | (1,131) | 14,509 |
| Income taxes paid | 240 | 790 | 1,969 | - | - | - | - | 2,999 | - | 2,999 |
| Income taxes for the year (A) |
1,770 | 791 | 951 | - | - | - | 129 | 3,641 | - | 3,641 |
| Differences between the theoretical tax burden and the tax burden booked in the financial statements (B) |
560 | (6) | 43 | - | - | - | - | 597 | - | 597 |
| Theoretical income tax (C) = (A)+(B) |
2,330 | 785 | 994 | (150) | - | - | 129 | 4,088 | - | 4,088 |
| Permanent tax differences (D) |
233 | 6 | (265) | - | - | - | - | (26) | - | (26) |
| Other changes (E) | (1.332) | - | 222 | 150 | - | - | - | (960) | - | (960) |
| Income taxes booked in the accounts, excluding IRAP and withholding taxes (current) (F) = (C)+(D)+(E) |
1,231 | 791 | 951 | - | - | - | 129 | 3,102 | (276) | 2,826 |
| IRAP (current) (G) | 539 | - | - | - | - | - | - | 539 | - | 539 |
| Total (H) = (F) + (G) |
1,770 | 791 | 951 | - | - | - | 129 | 3,641 | (276) | 3,365 |
Sabaf S.p.A. is one of the founders of APPLiA Italia (former CECED Italia), the association that develops and coordinates in Italy the study activities promoted at European level by APPLiA – Home Appliance Europe with the related scientific, legal and institutional implications in the household appliances sector.
Sabaf S.p.A. has been a member of Confindustria Brescia since 2014.
Sabaf S.p.A. systematically organises company visits with groups of students and bears witness of best practices on sustainability at important conferences.
In 2021, Sabaf joined the "Un vaccino per tutti" (A vaccine for all) project, promoted by Confindustria Brescia and aimed at promoting the spread of Covid-19 vaccination interventions in the world's most economically fragile countries.
The Group's ongoing humanitarian initiatives include:
Since 2019, Sabaf S.p.A. has been associated with Fondazione Spedali Civili di Brescia.
There was a tax dispute in Sabaf Turkey, for which the third instance is pending. The outcome of the dispute was favourable to the company both in first and second instance. The confirmation of the unfavourable outcome would not imply significant charges for the Group, while a favourable outcome would result in a benefit of approximately 7.2 million Turkish lira.
There are no other significant disputes with Public Bodies or other representatives of the community.
The share capital of Sabaf S.p.A., fully subscribed and paid-up, is €11,533,450, consisting of 11,533,450 ordinary shares having the par value of €1.00 each. At the date of approval of this document (22 March 2022), a total of 3,618,028 shares had acquired voting rights (two votes for each share).
| NO. OF SHARES MAKING UP THE SHARE CAPITAL |
NUMBER OF VOTING RIGHTS | |
|---|---|---|
| Total | 11,533,450 | 15,151,478 |
| of which: | ||
| ordinary shares IT0001042610 |
7,915,422 | 7,915,422 |
| ordinary shares with increased vote IT0005253338 |
3,618,028 | 7,236,056 |
The shareholders entered in the shareholders' register at 1 March 2022 were 1,912, of whom:
61 own over 10,000 shares.
1,616 own up to 1,000 shares;
28.52% of the share capital is held by shareholders resident abroad.
| RELEVANT SHAREHOLDERS | ||||||||
|---|---|---|---|---|---|---|---|---|
| SHAREHOLDER | NUMBER OF SHARES | % OF SHARE CAPITAL |
VOTING RIGHTS | % HELD | ||||
| CINZIA SALERI S.a.p.A. | 2,415,644 | 20.94% | 2,415,644 | 15.94% | ||||
| QUAESTIO CAPITAL MANAGEMENT SGR S.p.A. | 2,306,690 | 20.00% | 4,613,380 | 30.45% | ||||
| FINTEL s.r.l. | 883,394 | 7.66% | 1,733,394 | 11.44% | ||||
| PALOMA RHEEM INVESTMENTS, INC. | 570,345 | 4.95% | 1,031,683 | 6.81% |
There are no other shareholders other than those highlighted above with a shareholding of more than 3%.
Since its listing on the Stock Exchange (1998), the Company has attached strategic importance to financial communication, which is based on the principles of fairness, transparency and continuity, in the belief that this approach allows investors to correctly evaluate the Company. In this perspective, Sabaf guarantees maximum willingness to engage in dialogue with financial analysts, institutional investors and proxy advisors. On 10 February 2022, the Company adopted the Policy for the Management of Dialogue with Shareholders, which regulates the opportunities for communication and attendance with all the Investors that require contact with the Board of Directors on the following matters:
The Policy entrusts the management of the dialogue with investors to the Chairman, the Chief Executive Officer and the CFO, also severally. During 2021, the company participated in the Star Conferences in March and October and Sustainability Week in July, events that were held in virtual format due to the health emergency.
In 2021, the Sabaf share recorded the highest official price on 1 November (€28.523) and lowest on 5 January (€15.102). The average volume traded was 19,581 shares per day, equal to an average value of €461,570 (€121,764 in 2020).
VOLUMES
The dividend policy aims to guarantee a valid remuneration of shareholders also through the annual dividend of €0.55 per share in 2021.
ESG (Environment, Social, Governance) criteria are increasingly important parameters for the screening and selection of investments by investors. Also through the preparation of this Disclosure, Sabaf strives to ensure maximum transparency on its sustainability strategy, social and environmental performance and level of alignment with best practices in terms of governance.
There is no dispute with shareholders.
At 31 December 2021, the net financial debt was €67.6 million, compared with €56.3 million at 31 December 2020; the ratio of net financial debt to EBITDA is 1.25 (1.52 at 31 December 2020).
Relations with banks have always been based on maximum transparency. Relations with institutions that are able to support the Group in all its financial needs and to propose solutions in a timely manner to meet specific needs are privileged.
During the year, the Group took out new unsecured loans for a total of €46 million to finance the investments made. All loans are signed with an original maturity of ranging from 5 to 6 years and are repayable in instalments.
In December 2021, Sabaf S.p.A. issued a €30 million bond fully subscribed by PRICOA with a maturity of 10 years, an average life of 8 years and a fixed coupon of 1.85% per year. This issue enabled Sabaf to diversify its sources of financing, improve financial flexibility and significantly lengthen the average duration of its debt.
There is no dispute with the lenders.
The household appliance industry shows the following trends.
In Europe, Sabaf estimates that it has a market share of about 40% in the sector of gas parts. The world market share is estimated at about 10%.
The main competitors of the Sabaf on the international market are Copreci, Defendi and Robertshaw.
Copreci is a cooperative located in Spain in the Basque Country, part of Mondragon Cooperative Corporation and represents Sabaf's main competitor in terms of valves and thermostats.
E.G.O. is a major component manufacturer based in Germany. In 2013, it acquired Defendi Italy (now E.G.O. Italia), a company mainly active in the production of burners in Italy and Brazil.
Robertshaw is the leading producer of gas parts for the North American market.
| VALVES AND THERMOSTATS |
BURNERS | HINGES | ELECTRONIC COMPONENTS |
|
|---|---|---|---|---|
| SABAF GROUP | ||||
| Copreci (Spain) | ||||
| EGO (Germany, Italy) | ||||
| Robertshaw (USA) | ||||
| Somipress (Italy) | ||||
| Nuova Star (Italy) |
| 2020 | 2019 | ||||||
|---|---|---|---|---|---|---|---|
| (€/000) | SALES | EBIT | NET RESULT | SALES | EBIT | NET RESULT | |
| SABAF GROUP | 184,906 | 20,093 | 13,961 | 155,923 | 11,896 | 9,915 | |
| E.G.O. Italy | 44,579 | 832 | 4,932 | 41,407 | (3,661) | (4,237) | |
| Somipress Group | 29,361 | 872 | 804 | 35,670 | 3,288 | 2,752 | |
| Nuova Star | 40,924 | 657 | 395 | 35,294 | 406 | 259 |
Sabaf firmly believes that competition between companies promotes both an effective economy and sustainable growth. In making business decisions, Sabaf also takes into account the risk of behaviour that is detrimental to free competition. Currently, the Group has not adopted a formalised policy aimed at preventing anti-competitive behaviour. According to the information available, there is no evidence of anticompetitive behaviour or infringement of antitrust regulations.
At 31 December 2021:
The Regulation (EU) 2020/852 (known as "Taxonomy") is part of the European Union's initiatives in favour of sustainable finance and aims to provide investors and the market with a common language of sustainability metrics. The Taxonomy focuses on the identification of economic activities considered to be eco-sustainable, defined as those economic activities that contribute substantially to the achievement of at least one of the intended environmental objectives32, provided that they do not cause significant damage to any of the other environmental objectives and are carried out in compliance with minimum safeguards. In June 2021, the European Commission formally adopted the Technical Delegated Acts defining the list of economic sectors and activities currently included in the Taxonomy and the related technical screening criteria to check whether they contribute substantially to achieving the environmental objectives of climate change mitigation and adaptation; further delegated acts are expected to be published during 2022 with regard to the remaining four environmental objectives.
The Sabaf Group immediately began analysing the regulations in order to understand their potential impact on the reporting process within the scope of its consolidated disclosure of non-financial information. This analysis showed that the Sabaf Group's revenues originate almost exclusively from the sale of components for household appliances, and these components are not included in the economic activities currently envisaged by the Taxonomy. Therefore, there are no "eligible" revenues, capital expenditures and operating expenses with respect to its core business. In this regard, note that, as confirmed by the Platform on Sustainable Finance, a body established pursuant to Article 20 of Regulation (EU) 2020/852 with advisory and support functions in favour of the European Commission on Taxonomy, the failure to identify revenues from "eligible" economic activities is not a measure of a company's environmental performance33.
Note that the Group identified certain minor projects "eligible" for the Taxonomy as part of its activities, which refer in particular to the production of electricity using photovoltaic solar technology; however, in the light of the margins of the amounts involved, it was not considered appropriate to report on a timely basis in this context.
The Sabaf Group will continue to monitor the evolution of the Taxonomy regulations in that the publication of further delegated acts relating to the remaining four environmental objectives (sustainable use and protection of water and marine resources, transition to a circular economy, prevention and reduction of pollution, and protection and restoration of biodiversity and ecosystems) could allow the Group's commitment in other areas of environmental sustainability to be reported and enhanced, such as recycling of raw and packaging materials and waste management.
32 Art. 9 identifies the following environmental objectives: climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, prevention and reduction of pollution, and protection and restoration of ecosystems and biodiversity.
33 In the document called Platform considerations on voluntary information as part of Taxonomy-eligibility reporting enclosed with the European Commission's FAQs published in December 2021 it is stated that "Eligibility is not an indicator of environmental performance; it is an indicator that an activity is in scope for testing and has the potential to be Taxonomy-aligned".
| GRI STANDARD | DISCLOSURE | PAGE (or direct reference) |
OMISSION | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| GRI 101: Foundation 2016 | ||||||||||
| General disclosures | ||||||||||
| Organisational profile | ||||||||||
| 102-1 | Name of the organisation | Front cover | ||||||||
| 102-2 | Activities, brands, products, and services | pp. 21-23 | ||||||||
| 102-3 | Location of headquarters | Via dei Carpini, 1 25035 OSPITALETTO (Brescia) Italy |
||||||||
| 102-4 | Location of operations | pp. 22-25 | ||||||||
| 102-5 | Ownership and legal form | pp. 48-50; 105 | ||||||||
| 102-6 | Markets served | pp. 22-25 | ||||||||
| 102-7 | Scale of the organisation | pp. 13-25 | ||||||||
| 102-8 | Information on employees and other workers | pp. 72-75 | ||||||||
| 102-9 | Supply chain | pp. 99-100 | ||||||||
| 102-10 | Significant changes to the organization and its supply chain | p. 30 | ||||||||
| 102-11 | Precautionary Principle or approach | pp. 41; 61-62 | ||||||||
| 102-12 | External initiatives | pp. 33; 43-44 | ||||||||
| 102-13 | Membership of associations | p. 104 | ||||||||
| Strategy | ||||||||||
| 102-14 | Statement from senior decision-maker (Chairman and CEO) | pp. 31-32 | ||||||||
| Ethics and integrity | ||||||||||
| 102-16 | Values, principles, standards and norms of behaviour | pp. 33-35 | ||||||||
| Governance | ||||||||||
| GRI 102: General | 102-18 | Governance structure | pp. 48-60 | |||||||
| disclosures 2016 | 102-22 | Composition of the highest governance body and its committees | pp. 50-55 | |||||||
| Stakeholder engagement | ||||||||||
| 102-40 | List of stakeholder groups | p. 42 | ||||||||
| 102-41 | Collective bargaining agreements | pp. 82-84 | ||||||||
| 102-42 | Identifying and selecting stakeholders | p. 42 | ||||||||
| 102-43 | Approach to stakeholder engagement | p. 42 | ||||||||
| 102-44 | Key topics and concerns raised | p. 42 | ||||||||
| Reporting practice | ||||||||||
| 102-45 | Entities included in the consolidated financial statements | p. 30 | ||||||||
| 102-46 | Defining report content and topic Boundaries | pp. 30; 45 | ||||||||
| 102-47 | List of material topics | pp. 45-47 | ||||||||
| 102-48 | Restatements of information | pp. 30; 84; 86 | ||||||||
| 102-49 | Changes in reporting | pp. 30; 45 | ||||||||
| 102-50 | Reporting period | p. 30 | ||||||||
| 102-51 | Date of most recent report | Year 2020 | ||||||||
| 102-52 | Reporting cycle | p. 30 | ||||||||
| 102-53 | Contact point for questions regarding the report | Tel: +39 0306843001 Fax: +39 0306848249 E-mail: [email protected] |
||||||||
| 102-54 | Claims of reporting in accordance with the GRI Standards | p. 30 | ||||||||
| 102-55 | GRI Content Index | pp. 111-114 | ||||||||
| 102-56 | External assurance | pp. 115-117 |
| GRI STANDARD | DISCLOSURE | PAGE (or direct reference) |
OMISSION | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Material topics | ||||||||||
| GRI 200 Economic Standard Series | ||||||||||
| Economic performance | ||||||||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||||||||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62 | |||||||
| 103-3 | Evaluation of the management approach | pp. 61-62 | ||||||||
| GRI 201: Economic performance 2016 |
201-1 | Direct economic value generated and distributed | p. 40 | |||||||
| Market presence | ||||||||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||||||||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 70-71; 82-84 | |||||||
| 103-3 | Evaluation of the management approach | pp. 61-62; 70-71; 82-84 | ||||||||
| GRI 202: Market Presence 2016 |
202-1 | Ratios of standard entry level wage by gender compared to local minimum wage |
p. 84 | |||||||
| Anti-corruption | ||||||||||
| GRI 103: Management approach 2016 |
103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | |||||||
| 103-2 | The management approach and its components | pp. 61-62 | ||||||||
| 103-3 | Evaluation of the management approach | pp. 61-62 | ||||||||
| GRI 205: Anti-corruption 2016 |
205-3 | Confirmed incidents of corruption and actions taken | p. 66 | |||||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||||||||
| GRI 103: Management approach 2016 |
Anti-competitive behaviour 103-2 The management approach and its components |
pp. 61-62; 108-109 | ||||||||
| 103-3 | Evaluation of the management approach | pp. 61-62; 108-109 | ||||||||
| GRI 206: Anti-competitive behaviour 2016 |
206-1 | Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices |
p. 109 | |||||||
| Tax | ||||||||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||||||||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 101-103 | |||||||
| 103-3 | Evaluation of the management approach | pp. 61-62; 101-103 | ||||||||
| 207-1 | Approach to tax | p. 101 | ||||||||
| GRI 207: | 207-2 | Tax governance, control and risk management | p. 101 | |||||||
| Tax 2019 | 207-3 | Stakeholder engagement and management of concerns related to tax | p. 101 | |||||||
| 207-4 | Country-by-Country Reporting | pp. 102-103 |
| E-MARKET SDIR |
|---|
| CERTIFIED |
| GRI STANDARD | DISCLOSURE | PAGE (or direct reference) |
OMISSION | |
|---|---|---|---|---|
| GRI 300 Environmental Standard Series | ||||
| Materials | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 90-92 | |
| 103-3 | Evaluation of the management approach | pp. 61-62; 90-92 | ||
| GRI 301: Materials 2016 |
301-1 | Materials used by weight or volume | p. 92 | |
| Energy | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 90-91; 93 | |
| 103-3 | Evaluation of the management approach | pp. 61-62; 90-91; 93 | ||
| 302-1 | Energy consumption within the organisation | p. 93 | ||
| GRI 302: Energy 2016 | 302-3 | Energy intensity | p. 93 | |
| Emissions | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 90-91; 95 | |
| 103-3 | Evaluation of the management approach | pp. 61-62; 90-91; 95 | ||
| GRI 305: Emissions | 305-1 | Direct (Scope 1) GHG emissions | p. 95 | |
| 2016 | 305-2 | Energy indirect (Scope 2) GHG emissions | p. 95 | |
| Waste | ||||
| GRI 103: Management approach 2016 |
103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | |
| 103-2 | The management approach and its components | pp. 61-62; 90-91; 94-95 | ||
| 103-3 | Evaluation of the management approach | pp. 61-62; 90-91; 94-95 | ||
| 306-1 | Waste generation and significant waste-related impacts | pp. 94-95 | ||
| GRI 306: Waste 2020 | 306-2 | Management of significant waste-related impacts | pp. 94-95 | |
| 306-3 | Waste generated | pp. 94-95 | ||
| Environmental compliance | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 90-91; 95 | |
| 103-3 | Evaluation of the management approach | pp. 61-62; 90-91; 95 | ||
| GRI 307: Environmental compliance 2016 |
307-1 | Non-compliance with environmental laws and regulations | p. 95 | |
| GRI 400 Series | ||||
| Employment | ||||
| GRI 103: Management | 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | |
| approach 2016 | 103-2 103-3 |
The management approach and its components Evaluation of the management approach |
pp. 61-62; 70-71; 76-79 pp. 61-62; 70-71; 76-79 |
|
| GRI 401: Employment 2016 |
401-1 | New employee hires and employee turnover | pp. 76-79 | |
| Industrial relations | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management | 103-2 | The management approach and its components | pp. 61-62; 70-71; 88-89 | |
| approach 2016 | 103-3 | Evaluation of the management approach | pp. 61-62; 70-71; 88-89 | |
| GRI 402: Labor/Management relations 2016 |
402-1 | Minimum notice periods regarding operational changes | pag. 88 | |
| Health and safety | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management | 103-2 | The management approach and its components | pp. 61-62; 85-88 | |
| approach 2016 | 103-3 | Evaluation of the management approach | pp. 61-62; 85-88 |
| GRI STANDARD | DISCLOSURE | PAGE (or direct reference) |
OMISSION | |
|---|---|---|---|---|
| 403-1 | Occupational health and safety management system | pp. 85-88 | ||
| 403-2 | Hazard identification, risk assessment, and incident investigation | pp. 85-88 | ||
| 403-3 | Occupational health services | pp. 85-88 | ||
| GRI 403: | 403-4 | Worker participation, consultation, and communication on occupational health and safety |
pp. 85-88 | |
| Occupational Health and Safety 2018 |
403-5 | Worker training on occupational health and safety | pp. 85-88 | |
| 403-6 | Promotion of worker health | pp. 85-88 | ||
| 403-7 | Prevention and mitigation of occupational health and safety impacts directly linked by business relationships |
pp. 85-88 | ||
| 403-9 | Work-related injuries | pag. 86-87 | ||
| Training and education | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 70-71; 80 | |
| 103-3 | Evaluation of the management approach | pp. 61-62; 70-71; 80 | ||
| GRI 404: Training and education 2016 |
404-1 | Average hours of training per year per employee | p. 80 | |
| Diversity and equal opportunities | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 51; 61-62; 70-71; 81 | |
| 103-3 | Evaluation of the management approach | pp. 51; 61-62; 70-71; 81 | ||
| GRI 405: Diversity and equal opportunity 2016 |
405-1 | Diversity of governance bodies and employees | pp. 52-58; 81 | |
| Non-discrimination | ||||
| GRI 103: Management approach 2016 |
103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | |
| 103-2 | The management approach and its components | pp. 61-62; 70-71 | ||
| 103-3 | Evaluation of the management approach | pp. 61-62; 70-71 | ||
| GRI 406: Non-discrimination 2016 |
406-1 | Incidents of discrimination and corrective actions taken | p. 71 | |
| Supplier social assessment | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management approach 2016 |
103-2 | The management approach and its components | pp. 61-62; 99-100 | |
| 103-3 | Evaluation of the management approach | pp. 61-62; 99-100 | ||
| GRI 414: Supplier Social Assessment 2016 |
414-2 | Negative social impacts in the supply chain and actions taken | pp. 99-100 | |
| Customer Health and Safety | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management | 103-2 | The management approach and its components | pp. 61-62; 96-98 | |
| approach 2016 | 103-3 | Evaluation of the management approach | pp. 61-62; 96-98 | |
| GRI 416: Customer Health and Safety 2016 |
416-1 | Assessment of the health and safety impacts of product and service categories |
p. 98 | |
| Customer satisfaction and customer support | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management | 103-2 | The management approach and its components | pp. 61-62; 96-98 | |
| approach 2016 | 103-3 | Evaluation of the management approach | pp. 61-62; 96-98 | |
| GRI 416: Customer Health and Safety 2016 |
416-2 | Incidents of non-compliance concerning the health and safety impacts of products and services |
p. 98 | |
| Topics not covered by specific standards | ||||
| Partnership with multinational groups | ||||
| 103-1 | Explanation of the material topic and its Boundary | pp. 45-47 | ||
| GRI 103: Management | 103-2 | The management approach and its components | pp. 36-37; 61-62 | |
| approach 2016 | 103-3 | Evaluation of the management approach | pp. 36-37; 61-62 |
| (€/000) | 2021 | % | 2020 | % | 2021-2020 Change |
% Change |
|---|---|---|---|---|---|---|
| Sales revenue | 263,259 | 100% | 184,906 | 100% | 78,353 | +42.4% |
| EBITDA | 54,140 | 20.6% | 37,097 | 20.1% | 17,043 | +45.9% |
| EBIT | 37,508 | 14.2% | 20,093 | 10.9% | 17,415 | +86.7% |
| Pre-tax profit | 29,680 | 11.3% | 14,509 | 7.8% | 15,171 | +104.6% |
| Profit attributable to the Group | 23,903 | 9.1% | 13,961 | 7.6% | 9,942 | +71.2% |
| Basic earnings per share (€) | 2.132 | 1.240 | 0.892 | +71.9% | ||
| Diluted earnings per share (€) | 2.132 | 1.240 | 0.892 | +71.9% |
The Sabaf Group ended the 2021 financial year with a record high revenue of €263 million, up 42.4% from €184.9 million in 2020.
The Group is successfully pursuing ahead of schedule the organic growth strategy outlined in the 2021-2023 Business Plan, which focuses on strengthening technical and commercial relations with some of the major global players, increasing internationalisation and exploiting synergies with the most recently acquired companies.
In 2021, demand was solid in all markets, with particularly high peaks in the first half of the year. In a highly dynamic environment, the Sabaf Group was able to react promptly and always guarantee the continuity and reliability of supplies to customers.
Average sales prices in 2021 were 3% higher than in 2020, largely offsetting considerable increases in the purchase prices of the main raw materials (aluminium alloys, steel and brass), electricity and gas.
Higher volumes and a high level of capacity utilisation further improved profitability: EBITDA was €54.1 million (20.6% of turnover), up 45.9% compared to €37.1 million last year (20.1% of turnover) and EBIT was €37.5 million (14.2% of turnover) with an 86.7% increase compared to €20.1 million in 2020. The net profit for 2021 was €23.9 million, up by 71.2% compared to the figure of €14 million in 2020.
The subdivision of sales revenues by product line is shown in the table below:
| (€/000) | 2021 | % | 2020 | % | % Change |
|---|---|---|---|---|---|
| Gas parts | 182,468 | 69.3% | 129,834 | 70.2% | +40.5% |
| Hinges | 58,375 | 22.3% | 41,326 | 22.3% | +41.3% |
| Electronic components | 22,416 | 7.4% | 13,746 | 7.4% | +63.1% |
| Total | 263,259 | 100% | 184,906 | 100% | +42.4% |
In 2021, the increase in sales of electronic components was also particularly significant, continuing to benefit from cross-selling
with the traditional products in the Group's portfolio and from the strong drive to develop new components.
The geographical breakdown of revenues is shown below:
| (€/000) | 2021 | % | 2020 | % | % Change |
|---|---|---|---|---|---|
| Europe (excluding Turkey) | 92,935 | 35.3% | 69,618 | 37.7% | +33.5% |
| Turkey | 65,526 | 24.9% | 44,806 | 24.2% | +46.2% |
| North America | 30,472 | 11.6% | 22,700 | 12.3% | +34.2% |
| South America | 39,589 | 15.0% | 27,639 | 14.9% | +43.2% |
| Africa and Middle East | 19,614 | 7.5% | 12,177 | 6.6% | +61.1% |
| Asia and Oceania | 15,123 | 5.7% | 7,966 | 4.3% | +89.8% |
| Total | 263,259 | 100% | 184,906 | 100% | +42.4% |
The increase in sales was very strong in all geographical areas, with peaks in Asia, Africa and the Middle East, indicating an increasingly global presence of our Group.
The impact of labour cost on sales decreased from 23.6% in 2020 to 20.5% in 2021.
Net finance expense as a percentage of turnover was extremely minimal, also in view of the low interest rates. During the year, the Group recognised in the income statement negative forex differences of €7.4 million, mainly due to fluctuations in exchange rates with the Turkish lira (€4.8 million of negative forex differences were recognised in 2020).
In 2021, the Group recognised positive income taxes of €5 million with a tax rate of 16.8%. The main impacts on the tax rate are shown in Note 32 to the consolidated financial statements.
The Group's statement of financial position, reclassified based on financial criteria, is illustrated below1 :
| (€/000) | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Non-current assets | 130,093 | 131,543 |
| Short-term assets2 | 141,494 | 108,246 |
| Short-term liabilities3 | (72,863) | (56,017) |
| Working capital4 | 68,631 | 52,229 |
| Provisions for risks and charges, Post-employment benefits, deferred taxes | (8,681) | (9,643) |
| Net invested capital | 190,043 | 174,129 |
| Short-term net financial position | 18,897 | (24,169) |
| Medium/long-term net financial position | (86,504) | (32,153) |
| Net financial debt | (67,607) | (56,322) |
| Shareholders' equity | 122,436 | 117,807 |
Cash flows for the financial year are summarised in the table below:
| (€/000) | 2021 | 2020 |
|---|---|---|
| Opening liquidity | 13,318 | 18,687 |
| Operating cash flow | 23,216 | 25,067 |
| Cash flow from investments | (23,752) | (17,296) |
| Free cash flow | (536) | 7,771 |
| Cash flow from financing activities | 41,233 | (8,133) |
| Acquisitions | (6,296) | (3,063) |
| Foreign exchange differences | (4,070) | (1,944) |
| Cash flow for the period | 30,331 | (5,369) |
| Closing liquidity | 43,649 | 13,318 |
In 2021, the Group generated an operating cash flow of €23.2 million (€25.1 million in 2020). The higher levels of activity and the increase in the price of materials led to an increase in working capital, which stood at €68.6 million at 31 December 2021, compared to €52.2 million at the end of 2020: moreover, its impact on turnover decreased to 26.1% compared to 28.2% in 2020.
In 2021, the Sabaf Group made net organic investments of €23.8 million (€17.3 million in 2020). During the period, key investments were made:
During the financial year, the Group paid dividends for €6.2 million, no treasury shares were purchased.
1Net financial debt and liquidity shown in the tables below are defined in compliance with the net financial position detailed in Note 22 of the consolidated financial statements, as required by CONSOB memorandum of 28 July 2006.
Sum of Inventories, Trade receivables, Tax receivables and Other current receivables.
Sum of Trade payables, Tax payables and Other liabilities.
4 Difference between short-term assets and short-term liabilities.
At 31 December 2021, the net financial debt was €67.6 million, compared with €56.3 million on 31 December 2020. The change in net financial debt during the year is summarised in the table below:
| Net financial debt at 31 December 2020 | (56,322) |
|---|---|
| Free cash flow | (536) |
| Dividends paid out | (6,172) |
| Buy-back of shares | - |
| Put options on minority interests – outlay lower than the recognised financial liabilities |
438 |
| Financial liabilities IFRS 16 - new contracts entered into in 2021 | (954) |
| Change in fair value of derivative financial instruments | (83) |
| Change in the scope of consolidation | 97 |
| Foreign exchange differences and other changes | (4,075) |
| Net financial debt at 31 December 2021 | (67,607) |
At 31 December 2021, shareholders' equity amounted to €122.4 thousand; the ratio between the net financial debt and the shareholders' equity was 0.55 versus 0.48 in 2020.
| 2021 | 2020 | |||
|---|---|---|---|---|
| pro forma5 | pro forma5 | |||
| Change in turnover | +42.4% | +42.3% | +18.6% | +8.4% |
| ROCE (return on capital employed) | 19.7% | 11.5% | ||
| Net debt/EBITDA | 1.25 | 1.52 | ||
| Net debt/equity ratio | 55% | 48% | ||
| Market capitalisation (31/12)/equity ratio | 2.26 | 1.49 |
Please refer to the introductory part of the Annual Report for a detailed examination of other key performance indicators.
In 2021, the coronavirus pandemic continued to directly and indirectly affect the company's activities. Since the outbreak of the pandemic, the Group Sabaf has promptly implemented several counteracting and mitigating actions to minimise the impact on the business. Although the most critical phase of the pandemic now seems to be over, all controls continue to be activated, and any elements that may change the following risk factors are constantly monitored:
In relation to the recent conflict between Ukraine and Russia, note that the Group has an insignificant direct exposure to the markets of Russia, Belarus and Ukraine. However, these are markets supplied by some of the Sabaf Group's customers, who are exposed to varying degrees in terms of market access and changes in consumer behaviour.The outbreak of the conflict immediately led to severe tensions in the prices of electricity, gas and raw materials used by the Group. Should the situation not be resolved rapidly, these factors could significantly affect demand and, more generally, the performance of the sector in which the Group operates, especially in Europe.The repercussions on the macroeconomic system are not quantifiable in that they are related to future developments of the conflict, which are currently unpredictable.
As part of its periodic risk assessment process, the Group identified and assessed the following main risks.
Risks deriving from the external context in which Sabaf operates, which could have a negative impact on the economic and financial sustainability of the business in the medium/long-term. The most significant risks in this category are related to general economic conditions, trend in demand and product competition.
Strategic risks that could negatively impact Sabaf's mediumterm performance, including, for example, risks related to low profitability of certain product lines, the risks arising from the mismatch between market needs and product innovation and the loss of business opportunities in the Chinese market.
Risks of suffering losses due to inadequate or malfunctioning processes, human resources and information systems. This category includes financial risks (e.g. losses deriving from the volatility of the price of raw materials and from fluctuations in exchange rates), risks related to production processes (e.g. product liability, saturation level of production capacity), organisational risks (e.g. loss of key staff and expertise and/or the difficulty of replacing them) and Information Technology risks.
Risks related to Sabaf's contractual liabilities and compliance with the regulations applicable to the Group, including: Legislative Decree 231/2001, Law 262/2005, HSE regulations, regulations applicable to listed companies, tax regulations, labour regulations, international trade regulations and intellectual property regulations.
The main risks are described in detail below as well as the relevant risk management actions that are currently being implemented.
The Group's financial position, results and cash flows are affected by several factors related to the performance of the sector, including:
To cope with this situation, the Group aims to retain and reinforce its leadership position wherever possible through:
• the maintenance of high quality and safety standards, which make it possible to differentiate the product through the use of resources and implementation of production processes that are not easily sustainable by competitors;
The Group is exposed to risks related to (political, economic, tax, regulatory) instability in some emerging countries where it produces or sells. Any embargoes or major political or economic instability, or changes in the regulatory and/or local law systems, or new tariffs or taxes imposed could negatively affect a portion of Group turnover and the related profitability.
Sabaf has taken the following measures to mitigate the above risk factors:
The presence of Sabaf in Turkey, the country that represents the main production hub of household appliances at European level, is of particular importance: over the years, local industry attracted heavy foreign investments and favoured the growth of important manufacturers. In this context, the Sabaf Group created a production plant in Turkey in 2012 that realises today 10% of total production. In 2018, the Group also acquired 100% of Okida Elektronik, a leader in Turkey in the design, manufacture and sale of electronic control boards for household appliances. In 2021 the Group opened a new plant in Turkey. In 2021, Turkey represented 18% of the Group's production and 25% of its total sales. The Turkish market is estimated to represent around 5% of the final destination of Sabaf components. In consideration of the strategic importance of this Country, the management assessed the risks that could arise from any difficulties/impossibilities of operating in Turkey and envisaged actions to mitigate this risk.
The Sabaf Group is mainly active in the production of gas cooking components (valves and burners); therefore, there is the risk of not correctly assessing the threats and opportunities deriving from the competition of alternative products (such as electric cooking), with the consequence of not adequately making use of any market opportunities and/or suffering from negative impacts on margins and turnover.In recent years, the Group carried out strategic operations aimed at reducing the dependence of its business on the gas cooking sector, concluding significant acquisitions of companies operating in related sectors.
The Group has recently undertaken a strategic development plan to extend its product range, setting up a dedicated project team in Italy. Research and development also benefits from the expertise derived from the acquisition of Okida, a Turkish leader in electronic components.
With a production of over 20 million hobs per year, China is one of the world's most important markets. After many years of commercial presence only, in 2015 Sabaf started a small production unit, which still does not guarantee an adequate economic return.
The Group is reviewing its strategy for approaching the Chinese market and intends to:
The Sabaf Group is exposed to a series of financial risks, due to:
For more information on financial risks and the related management methods, see Note 36 of the consolidated financial statements as regards disclosure for the purposes of IFRS 7.
In 2021, the Sabaf Group set up a dedicated team to develop new solutions for home cooking, with the aim of creating innovative products that meet the needs of manufacturers of household appliances and new consumer trends.
The most innovative projects in 2021 include the development and prototyping of burners capable of operating with 100% hydrogen (replacing methane), both in domestic cooking appliances and for the professional sector. In this context, the Sabaf Group is participating as a strategic supplier in the Hy4Heat project, funded by BEIS (Department for Business, Energy & Industrial Strategy), the UK Department for Business, Energy and Industrial Strategy. The Hy4Heat project aims to determine whether it is technically possible, safe and cost-effective to replace natural gas (methane) with 100% hydrogen in residential and commercial buildings and gas appliances.
The other most important research and development projects carried out in 2021 were as follows:
The improvement in production processes continued throughout the Group, also in order to minimise set-up times and make production more flexible. The Group also develops and manufactures its own machinery, equipment and moulds.
Development costs to the tune of €1,770,000 were capitalised, as all the conditions set by international accounting standards were met; in other cases, they were charged to the income statement.
Starting from 2017, the Sabaf Group publishes the consolidated disclosure of non-financial information required by Legislative Decree no. 254/2016 in a report separate from this Report on Operations. The disclosure of non-financial information provides all the information needed to ensure understanding of the Group's activities, performance, results and impact, with particular reference to environmental, social and personnel issues, respect for human rights and the fight against active and passive corruption, which are relevant considering the Group's activities and characteristics.
The disclosure of non-financial information is included in the same file in which the report on operations, the consolidated financial statements, the separate financial statements of the parent company Sabaf S.p.A. and the remuneration report are published.
It should be noted that since 2005, the Sabaf Group has drawn up an Annual Report on its economic, social and environmental sustainability performance.
In 2021, the Sabaf Group suffered no on-the-job deaths or serious accidents that led to serious or very serious injuries to staff for which the Group was definitively held responsible, nor was it held responsible for occupational illnesses of employees or former employees, or causes of mobbing.
For all other information, please refer to the Disclosure of nonfinancial information.
In 2021 there was no:
For all other information, please refer to the Disclosure of nonfinancial information.
For a complete description of the corporate governance system of the Sabaf Group, see the report on corporate governance and on the ownership structure, available in the Investor Relations section of the Group website.
The internal control system on financial reporting is described in detail in the report on corporate governance and on ownership structure. With reference to the "conditions for listing shares of parent companies set up and regulated by the law of states not belonging to the European Union" pursuant to articles 36 and 39 of the Market Regulations, the Company and its subsidiaries have administrative and accounting systems that can provide the public with the accounting situations prepared for drafting the consolidated report of the companies that fall within the scope of this regulation and can regularly supply management and the auditors of the Parent Company with the data necessary for drafting the consolidated financial statements. The Sabaf Group has also set up an effective information flow to the independent auditor as well as continuous information on the composition of the corporate bodies of the subsidiaries, together with information on the offices held, and requires the systematic and centralised gathering as well as regular updates of the formal documents relating to the articles of association and granting of powers to corporate bodies. The conditions exist as required by article 36, letters a), b) and c) of the Market Regulations issued by CONSOB.
The Organisation, Management and Control Model, adopted pursuant to Legislative Decree 231/2001, is described in the report on company governance and on the ownership structure, which should be reviewed for reference.
Sabaf S.p.A. has an Organisational Model for the management and protection of personal data consistent with the provisions of European Regulation 2016/679 (General Data Protection Regulation - GDPR). Specific projects are implemented or are being implemented for all Group companies for which the GDPR is applicable.
For the comments on this item, please see Note 36 of the consolidated financial statements.
Sabaf Group companies did not execute any unusual or atypical transactions in 2021.
Sabaf S.p.A. is not subject to management and coordination by other companies. Sabaf S.p.A. exercises management and coordination activities over its Italian subsidiaries, Faringosi Hinges s.r.l., A.R.C. s.r.l., C.M.I. s.r.l. and C.G.D. s.r.l..
The relationships between the Group companies, including those with the parent company, are regulated under market conditions, as well as the relationships with related parties, defined in accordance with the accounting standard IAS 24. The details of intra-group transactions and other related-party transactions are given in Note 37 of the consolidated financial statements and in Note 35 of the separate financial statements of Sabaf S.p.A..
In the first weeks of 2022, demand remained strong in many of the Group's major markets and sales order flow was good. This trend is expected to continue in the coming months, also supported by the gradual increase in supplies related to new orders. For the whole of 2022, the Sabaf Group expects to achieve revenues ranging from €275 to €280 million, up by 5%-6% on 2021.
The Group acted promptly to counteract the effects of the increases in energy and raw materials: further increases in sales prices were negotiated and actions were taken to contain energy consumption, also by increasing the efficiency of the most energy-consuming plants. Strategies to mitigate currency risk were also defined. In this way, the Group believes it will be able to maintain excellent profitability in line with historical averages.
These assumptions do not take into account the potential impacts of the recent conflict between Ukraine and Russia, which are currently not quantifiable as they are related to future developments in the conflict, the outcome of which cannot be determined. Although the Group has a non-significant direct exposure to the markets of Russia, Belarus and Ukraine, it is exposed to indirect effects on the price trends of raw materials, electricity and gas, the supply chain and final demand.
| (€/000) | 2021 | 2020 | Change | % Change |
|---|---|---|---|---|
| Sales revenue | 144,034 | 102,583 | 41,451 | +40.4% |
| EBITDA | 23,078 | 15,820 | 7,258 | +45.9% |
| EBIT | 13,837 | 6,610 | 7,227 | +109.3% |
| Pre-tax profit (EBT) | 14,227 | 6,304 | 7,923 | +125.7% |
| Net Profit | 10,044 | 6,410 | 3,634 | +56.7% |
The reclassification based on financial criteria is illustrated below:
| (€/000) | 31.12.2021 | 31.12.2020 |
|---|---|---|
| Non-current assets 6 | 142,549 | 123,679 |
| Non-current financial assets | 10,708 | 5,537 |
| Short-term assets7 | 82,572 | 69,738 |
| Short-term liabilities8 | (46,453) | (36,520) |
| Working capital9 | 36,119 | 33,218 |
| Provisions for risks and charges, Post-employment benefits, deferred taxes | (2,954) | (3,013) |
| Net invested capital | 186,422 | 159,421 |
| Short-term net financial position | 10,502 | (22,602) |
| Medium/long-term net financial position | (82,515) | (26,891) |
| Total financial debt10 | (72,013) | (49,493) |
| Shareholders' equity | 114,409 | 109,928 |
6 Excluding Financial assets.
Cash flows for the financial year are summarised in the table below:
| (€/000) | 2021 | 2020 |
|---|---|---|
| Opening liquidity | 1,595 | 8,343 |
| Operating cash flow | 17,187 | 9,590 |
| Cash flow from investments | (28,407) | (13,381) |
| Free cash flow | (11,220) | (3,791) |
| Cash flow from financing activities | 39,358 | (2,957) |
| Cash flow for the period | 28,138 | (6,748) |
| Closing liquidity | 29,733 | 1,595 |
The 2021 financial year ended with a turnover 40.4% higher than in 2020, thanks to a very strong demand, increased portions on certain strategic customers and increases in sales prices. The investments of the financial year were mainly used:
At 31 December 2021, working capital stood at €36.1 million compared with €33.2 million at the end of the previous year: its percentage impact on turnover stood at 25.1% from 32.4% at the end of 2020. The net financial debt was €72 million, compared with €49.5 million at 31 December 2020. At the end of the year, shareholders' equity amounted to €114.4 million, compared with €109.9 million in 2020. The ratio between the net financial debt and the shareholders' equity was 63%; it was 45% at the end of 2020.
Pursuant to the CONSOB memorandum of 28 July 2006, a reconciliation statement of the result of the 2021 financial year and Group shareholders' equity at 31 December 2021 with the same values of the parent company Sabaf S.p.A. is given below:
| 31.12.2021 | 31.12.2020 | |||
|---|---|---|---|---|
| Description | Profit for the year | Shareholders' equity |
Profit for the year | Shareholders' equity |
| Profit and shareholders' equity of parent company Sabaf S.p.A. | 10,044 | 114,409 | 6,410 | 109,928 |
| Equity and consolidated company results | 15,008 | 96,538 | 8,734 | 90,566 |
| Derecognition of the carrying value of consolidated equity investments | 300 | (86,089) | 620 | (73,816) |
| Put options on minorities | 438 | 0 | 456 | (6,831) |
| Intercompany eliminations | (1,250) | (2,414) | (1,758) | (1,778) |
| Other adjustments | 143 | (8) | (103) | (262) |
| Minority interests | (780) | (911) | (398) | (4,809) |
| Profit and shareholders' equity attributable to the Group | 23,903 | 121,525 | 13,961 | 112,998 |
As we thank our employees, the Board of Statutory Auditors, the independent auditors and the Supervisory Authorities for their effective collaboration, we ask the shareholders to approve the financial statements for the year ended 31 December 2021, with the proposal to allocate the profit for the year of €10,043,877 in the following manner:
Ospitaletto, 22 March 2022
The Board of Directors
Parent company: SABAF S.p.A.
Subsidiaries and equity interest pertaining to the Group
Companies consolidated on a line-by-line basis
Faringosi Hinges s.r.l.
100%
Sabaf do Brasil Ltda. 100%
Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf Turkey)
100%
Sabaf Appliance Components (Kunshan) Co., Ltd. 100%
Okida Elektronik Sanayi ve Ticaret A.S. 100%
Sabaf US Corp. 100%
A.R.C. s.r.l. 100%
Handan A.R.C. Burners Co., Ltd. 51%
Sabaf India Private Limited 100%
Sabaf Mexico Appliance Components S.A. de c.v.
C.M.I. s.r.l. 100%
C.G.D. s.r.l. 100%
Honorary Chairman
Giuseppe Saleri
Board of Directors
| Chairman | Claudio Bulgarelli | Director | Cinzia Saleri |
|---|---|---|---|
| Vice Chairman* | Nicla Picchi | Director* | Carlo Scarpa |
| Chief Executive Officer | Pietro Iotti | Director* | Daniela Toscani |
| Director | Gianluca Beschi | Director* | Stefania Triva |
| Director | Alessandro Potestà | * independent directors |
| Claudio Bulgarelli | Director | Cinzia Saleri |
|---|---|---|
| Director* | ||
| Director* | ||
| Gianluca Beschi | Director* | Stefania Triva |
Board of Statutory Auditors Independent Auditors
| Chairman | Alessandra Tronconi |
|---|---|
| Statutory Auditor | Maria Alessandra Zunino de Pignier |
| Statutory Auditor | Mauro Vivenzi |
EY S.p.A.
| (€/000) | Notes | 31.12.2021 | 31.12.2020 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 1 | 82,407 | 76,507 |
| Investment property | 2 | 2,311 | 3,253 |
| Intangible assets | 3 | 35,553 | 43,017 |
| Equity investments | 4 | 83 | 173 |
| Non-current receivables | 5 | 1,100 | 518 |
| Deferred tax assets | 21 | 8,639 | 8,075 |
| TOTAL NON-CURRENT ASSETS | 130,093 | 131,543 | |
| CURRENT ASSETS | |||
| Inventories | 6 | 64,153 | 39,224 |
| Trade receivables | 7 | 68,040 | 63,436 |
| Tax receivables | 8 | 6,165 | 2,419 |
| Other current receivables | 9 | 3,136 | 3,167 |
| Current financial assets | 10 | 1,172 | 1,495 |
| Cash and cash equivalents | 11 | 43,649 | 13,318 |
| TOTAL CURRENT ASSETS | 186,315 | 123,059 | |
| ASSETS HELD FOR SALE | 0 | 0 | |
| TOTAL ASSETS | 316,408 | 254,602 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | |||
| Share capital | 12 | 11,533 | 11,533 |
| Retained earnings, Other reserves | 13 | 86,089 | 87,504 |
| Profit for the year | 23,903 | 13,961 | |
| Total equity interest of the Group | 121,525 | 112,998 | |
| Minority interests | 911 | 4,809 | |
| TOTAL SHAREHOLDERS' EQUITY | 122,436 | 117,807 | |
| NON-CURRENT LIABILITIES | |||
| Loans | 14 | 86,504 | 32,153 |
| Post-employment benefit and retirement provisions | 16 | 3,408 | 3,513 |
| Provisions for risks and charges | 17 | 1,334 | 1,433 |
| Deferred tax liabilities | 21 | 3,939 | 4,697 |
| Total non-current liabilities | 95,185 | 41,796 | |
| CURRENT LIABILITIES | |||
| Loans | 14 | 24,405 | 30,493 |
| Other financial liabilities | 15 | 1,519 | 8,489 |
| Trade payables | 18 | 54,837 | 41,773 |
| Tax payables | 19 | 4,951 | 3,287 |
| Other payables | 20 | 13,075 | 10,957 |
| TOTAL CURRENT LIABILITIES | 98,787 | 94,999 | |
| LIABILITIES HELD FOR SALE | 0 | 0 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 316,408 | 254,602 |
| (€/000) | Notes | 2021 | 2020 |
|---|---|---|---|
| INCOME STATEMENT COMPONENTS | |||
| OPERATING REVENUE AND INCOME | |||
| Revenue | 23 | 263,259 | 184,906 |
| Other income | 24 | 8,661 | 7,194 |
| TOTAL OPERATING REVENUE AND INCOME | 271,920 | 192,100 | |
| OPERATING COSTS | |||
| Materials | 25 | (142,355) | (82,966) |
| Change in inventories | 29,922 | 6,406 | |
| Services | 26 | (52,377) | (34,264) |
| Personnel costs | 27 | (53,964) | (43,700) |
| Other operating costs | 28 | (1,531) | (1,981) |
| Costs for capitalised in-house work | 2,525 | 1,502 | |
| TOTAL OPERATING COSTS | (217,780) | (155,003) | |
| OPERATING PROFIT BEFORE DEPRECIATION AND AMORTISATION, CAPITAL GAINS/LOSSES, AND WRITE-DOWNS/WRITE-BACKS OF NON-CURRENT ASSETS |
54,140 | 37,097 | |
| Depreciations and amortisation | 1, 2, 3 | (16,869) | (16,968) |
| Capital gains on disposals of non-current assets | 237 | 105 | |
| Value adjustments of non-current assets | 0 | (141) | |
| EBIT | 37,508 | 20,093 | |
| Financial income | 29 | 750 | 1,366 |
| Financial expenses | 30 | (1,179) | (2,146) |
| Exchange rate gains and losses | 31 | (7,399) | (4,812) |
| Profits and losses from equity investments | 4 | 0 | 8 |
| PROFIT BEFORE TAXES | 29,680 | 14,509 | |
| Income taxes | 32 | (4,997) | (149) |
| PROFIT FOR THE YEAR | 24,683 | 14,360 | |
| of which: | |||
| Minority interests | 780 | 399 | |
| PROFIT ATTRIBUTABLE TO THE GROUP | 23,903 | 13,961 | |
| EARNINGS PER SHARE (EPS) | 33 | ||
| Base (€) | 2.132 | 1.240 |
Diluted (€) 2.132 1.240
| (€/000) | 2021 | 2020 |
|---|---|---|
| PROFIT FOR THE YEAR | 24,683 | 14,360 |
| Total profits/losses that will not be subsequently reclassified under profit (loss) for the year |
||
| Actuarial evaluation of post-employment benefit | 26 | 16 |
| Tax effect | (6) | (3) |
| 20 | 13 | |
| Total profits/losses that will be subsequently reclassified under profit (loss) for the year |
||
| Forex differences due to translation of financial statements in foreign currencies | (14,552) | (12,564) |
| Hedge accounting for derivative financial instruments | (398) | 0 |
| TOTAL OTHER PROFITS/(LOSSES) NET OF TAXES FOR THE YEAR | (14,930) | (12,551) |
| TOTAL PROFIT | 9,753 | 1,809 |
| of which: | ||
| of which: | ||
|---|---|---|
| Net profit for the period attributable to minority interests | 780 | 399 |
| Total profits/losses that will be subsequently reclassified under profit (loss) for the year |
0 | 8 |
| TOTAL PROFIT ATTRIBUTABLE TO MINORITY INTERESTS | 780 | 407 |
| TOTAL PROFIT ATTRIBUTABLE TO THE GROUP | 8,973 | 1,402 |
| (€/000) | Share capital |
Share premium reserve |
Legal reserve |
Treasury shares |
Translation reserve |
Post employment benefit discounting reserve |
Other reserves |
Profit for the year |
Total Group shareholders' equity |
Minority interests |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at 31 December 2019 | 11,533 | 10,002 | 2,307 | (2,268) | (18,939) | (546) | 102,024 | 9,915 | 114,028 | 7,077 | 121,105 |
| Allocation of 2019 profit | |||||||||||
| - carried forward | 9,915 | (9,915) | 0 | 0 | |||||||
| IFRS 2 measurement Stock Grant plan | 658 | 658 | 658 | ||||||||
| Hedge accounting for derivatives | 240 | 240 | 7 | 247 | |||||||
| Purchase of treasury shares | (2,073) | (2,073) | (2,073) | ||||||||
| Change in the scope of consolidation | 2,657 | 2,657 | (2,657) | 0 | |||||||
| Dividends paid out | (3,924) | (3,924) | (3,924) | ||||||||
| Other changes | 10 | 10 | (25) | (15) | |||||||
| Total profit at 31 December 2020 | (12,564) | 5 | 13,961 | 1,402 | 407 | 1,809 | |||||
| Balance at 31 December 2020 | 11,533 | 10,002 | 2,307 | (4,341) | (31,503) | (541) | 111,580 | 13,961 | 112,998 | 4,809 | 117,807 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Allocation of 2020 profit | |||||||||||
| - carried forward | 7,789 | (7,789) | 0 | 0 | |||||||
| - dividends paid out | (6,172) | (6,172) | (6,172) | ||||||||
| IFRS 2 measurement Stock Grant plan | 805 | 805 | 805 | ||||||||
| Treasury share transactions | 438 | (438) | 0 | 0 | |||||||
| Change in the scope of consolidation | 4,909 | 4,909 | (4,678) | 231 | |||||||
| Other changes | 12 | 12 | 12 | ||||||||
| Total profit at 31 December 2021 | (14,552) | 20 | (398) | 23,903 | 8,973 | 780 | 9,753 | ||||
| Balance at 31 December 2021 | 11,533 | 10,002 | 2,307 | (3,903) | (46,055) | (521) | 124,259 | 23,903 | 121,525 | 911 | 122,436 |
| (€/000) | 2021 | 2020 |
|---|---|---|
| Cash and cash equivalents at beginning of year | 13,318 | 18,687 |
| Profit for the year | 24,683 | 14,360 |
| Adjustments for: | ||
| - Depreciations and amortisation | 16,869 | 16,968 |
| - Write-downs of non-current assets | 0 | 141 |
| - Realised gains/losses | (237) | (105) |
| - Valuation of the Stock Grant plan | 805 | 658 |
| - Profits and losses from equity investments | 0 | (8) |
| - Net financial income and expenses | 429 | 780 |
| - Income tax | 4,997 | 149 |
| Change in post-employment benefit | (85) | (180) |
| Change in risk provisions | (99) | 438 |
| Change in trade receivables | (4,604) | (16,507) |
| Change in inventories | (24,929) | (3,881) |
| Change in trade payables | 13,064 | 14,213 |
| Change in net working capital | (16,469) | (6,175) |
| Change in other receivables and payables, deferred taxes | (1,515) | 2,115 |
| Payment of taxes | (5,296) | (2,999) |
| Payment of financial expenses | (1,167) | (1,235) |
| Collection of financial income | 301 | 160 |
| Cash flows from operations | 23,216 | 25,067 |
| Investments in non-current assets | ||
| - intangible | (2,106) | (1,097) |
| - tangible | (22,803) | (16,623) |
| - financial | 0 | (50) |
| Disposal of non-current assets | 1,157 | 474 |
| Cash flow absorbed by investments | (23,752) | (17,296) |
| Free cash flow | (536) | 7,771 |
| Repayment of loans | (47,381) | (18,413) |
| Raising of loans | 94,726 | 16,216 |
| Short-term financial assets | 60 | 60 |
| Purchase/sale of treasury shares | 0 | (2,073) |
| Payment of dividends | (6,172) | (3,924) |
| Cash flow absorbed by financing activities | 41,233 | (8,133) |
| A.R.C. acquisition C.M.I. acquisition |
(1,650) | 0 |
| A.R.C. Handan consolidation | (4,743) | (3,063) |
| Foreign exchange differences | 97 (4,070) |
0 (1,944) |
| Net cash flows for the year | 30,331 | (5,369) |
| Cash and cash equivalents at end of year (Note 10 and 11) | 43,649 | 13,318 |
The consolidated financial statements of the Sabaf Group for the 2021 financial year have been prepared in compliance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and endorsed by the European Union. Reference to IFRS also includes all current International Accounting Standards (IAS). The financial statements have been prepared in euro, the current currency in the economies in which the Group mainly operates, rounding amounts to the nearest thousand, and are compared with consolidated financial statements for the previous year, prepared according to the same standards. They consist of the statement of financial position, the income statement, the statement of changes in shareholders' equity, the statement of cash flows and these explanatory notes. The financial statements have been prepared on a historical cost basis except for some revaluations of property, plant and equipment undertaken in previous years, and are considered a going concern. The Group assessed that it is a going concern (as defined by paragraphs 25 and 26 of IAS 1 and by Art. 2423-bis of the Italian Civil Code), also due to the strong competitive position, high profitability and solidity of the financial structure.
The Group has adopted the following formats:
Use of these formats permits the most meaningful representation of the Group's operating results, financial position and cash flows.
The scope of consolidation at 31 December 2021 comprises the parent company Sabaf S.p.A. and the following companies controlled by Sabaf S.p.A.:
Sabaf U.S.
Sabaf India Private Limited
Compared to the consolidated financial statements at 31 December 2020, the companies Sabaf Mexico Appliance Components, in which Sabaf S.p.A. made a capital contribution of €3,128 thousand during 2021, and Handan A.R.C. Burners Co. Ltd, a company indirectly held through A.R.C. s.r.l. and previously measured at equity, in which the Group acquired control of 51% during 2021 following the purchase of an additional 30% of the share capital of A.R.C. as described in the following paragraph, are consolidated on a line-by-line basis.
In October 2021, Sabaf S.p.A. completed the acquisition of 30% of the capital of A.R.C. s.r.l., in execution of the agreement signed between the parties in 2016, when Sabaf had acquired the 70% of A.R.C. As a result of this transaction Sabaf now holds 100% of A.R.C.
In November 2021, Sabaf S.p.A. also completed the acquisition of 15.75% of the share capital of C.M.I. s.r.l. by the minority shareholder Starfire s.r.l. (Guandong Xingye Investment Group). Sabaf S.p.A. had acquired 68.5% of C.M.I. in July 2019 and a further 15.75% stake in September 2020. As a result of this transaction Sabaf now holds 100% of C.M.I..
On 31 December 2021, the merger through incorporation of C.M.I. Polska Sp. Z.o.o. into C.M.I. s.r.l. became effective. This transaction did not affect the scope of consolidation or other elements of these consolidated financial statements.
The companies in which Sabaf S.p.A. simultaneously possess the following three elements are considered subsidiaries: (a) power over the company; (b) exposure or rights to variable returns resulting from involvement therein; (c) ability to affect the size of these returns by exercising power. Subsidiaries are consolidated from the date on which control begins until the date on which control ceases.
The data used for consolidation have been taken from the income statements and statements of financial position prepared by the directors of the individual subsidiary companies. These figures have been appropriately amended and restated, when necessary, to align them with international accounting standards and with uniform group-wide classification criteria.
The criteria applied for consolidation are as follows:
a.assets and liabilities, income and costs in financial statements consolidated on a line-by-line basis are incorporated into the Group financial statements, regardless of the entity of the equity interest concerned. Moreover, the carrying value of equity interests is derecognised against the shareholders' equity relating to investee companies;
Separate financial statements of each company belonging to the Group are prepared in the currency of the country in which that company operates (functional currency). For the purposes of the consolidated financial statements, the financial statement of each foreign entity is expressed in euro, which is the Group's functional currency and the reporting currency for the consolidated financial statements. Balance sheet items in accounts expressed in currencies other than euro are converted by applying current end-of-year exchange rates. Income statement items are converted at average exchange rates for the year. Foreign exchange differences arising from the comparison between opening shareholders' equity converted at current exchange rates and at historical exchange rates, together with the difference between the net result expressed at average and current exchange rates, are allocated to "Other Reserves" in shareholders' equity.
The exchange rates used for conversion into euro of the financial statements of the foreign subsidiaries, prepared in local currency, are shown in the following table:
| Description of currency | Exchange rate in effect at 31.12.2021 |
Average exchange rate 2021 |
Exchange rate in effect at 31.12.2020 |
Average exchange rate 2020 |
|---|---|---|---|---|
| Brazilian real | 6.3101 | 6.3778 | 6.3735 | 5.8929 |
| Turkish lira | 15.233 | 10.510 | 9.1131 | 8.0548 |
| Chinese renminbi | 7.1947 | 7.6271 | 8.0225 | 7.8664 |
| Polish Zloty | 4.5969 | 4.5651 | 4.5597 | 4.4431 |
| Indian Rupee | 84.229 | 87.439 | 89.660 | 84.638 |
| Mexican peso | 23.143 | - | - |
The Group's operating segments in accordance with IFRS 8 - Operating Segment are identified in the business segments that generate revenue and costs, whose results are periodically reassessed by top management in order to assess performance and decisions regarding resource allocation. The Group operating segments are the following:
The accounting standards and policies applied for the preparation of the consolidated financial statements at 31 December 2021, unchanged versus the previous year, are shown below.
These are recognised at purchase or manufacturing cost. The cost includes directly chargeable ancillary costs. These costs also include revaluations undertaken in the past based on monetary revaluation rules or pursuant to company mergers. Depreciation is calculated according to rates deemed appropriate to spread the carrying value of tangible assets over their useful working life. Estimated useful working life in years, unchanged compared to previous financial years, is as follows:
| Buildings | 33 |
|---|---|
| Light constructions | 10 |
| General plant | 10 |
| Specific plant and machinery | 6–10 |
| Equipment | 4–10 |
| Furniture | 8 |
| Electronic equipment | 5 |
| Vehicles and other transport means | 4–5 |
Ordinary maintenance costs are expensed in the year in which they are incurred; costs that increase the asset value or useful working life are capitalised and depreciated according to the residual possibility of utilisation of the assets to which they refer.
Land is not depreciated.
The Group assesses at the time of signing an agreement whether it is, or contains, a lease, or if the contract gives the right to control the use of an identified asset for a period of time in exchange for a consideration.
The Group adopts a single recognition and measurement model for all leases according to which the assets acquired relating to the right of use are shown under assets at purchase value less depreciation, any impairment losses and adjusted for any re-measurement of lease liabilities.
Assets are depreciated on a straight-line basis from the starting date of the agreement until the end of the useful life of the asset or the end of the lease agreement, whichever comes first. Set against recognition of such assets, the amounts payable to the lessor, are posted among short- and medium-/long-term payables, by measuring them at the present value of the lease payments not yet made. Moreover, financial charges pertaining to the period are charged to the income statement.
The Group applied IFRS 16 from 1 January 2019 by using the amended retrospective approach. When evaluating the lease liabilities, the Group discounted the payments due for the lease using the incremental borrowing rate, the weighted average of which was 3.86% on 31 December 2021 and 2.52% on 31 December 2020. The rate was defined taking also account of the currency in which the lease agreements are denominated and the country in which the leased asset is located.
The lease term is calculated based on the non-cancellable period of the lease, including the periods covered by the option to extend or to terminate the lease if it is reasonably certain that those options will be exercised or not exercised, taking account of all relevant factors that create an economic incentive relating to those decisions.
Goodwill is the difference between the purchase price and fair value of investee companies' identifiable assets and liabilities on the date of acquisition.
As regards acquisitions completed prior to the date of IFRS adoption, the Sabaf Group has used the option provided by IFRS 1 to refrain from applying IFRS 3 – concerning business combinations – to acquisitions that took place prior to the transition date.
Consequently, goodwill arising in relation to past acquisitions has not been recalculated and has been posted in accordance with Italian GAAPs, net of amortisation reported up to 31 December 2003 and any losses caused by a permanent value impairment.
After the transition date, goodwill – as an intangible asset with an indefinite useful life – is not amortised but subjected annually to impairment testing to check for value loss, or more frequently if there are signs that the asset may have suffered impairment (impairment test).
An associated company is a company on which the Group exercises significant influence. Significant influence is the power to participate in determining the financial and operational policies of the associated company without having control or joint control over it. A joint venture is a joint control agreement in which the parties holding the joint control have rights on the net assets of the agreement.
The Group's equity investment in associates and joint ventures is measured using the equity method: the equity investment is initially entered at cost, subsequently, the carrying value of the equity investment is increased or decreased to reflect the investor's share of the investee's profits and losses realised after the acquisition date. Goodwill pertaining to the associated company or joint venture is included at the carrying value of the equity investment and is not subject to individual assessment of impairment.
As established by IAS 38, other intangible assets acquired or internally produced are recognised as assets when it is probable that use of the asset will generate future economic benefits and when asset cost can be measured reliably. If it is considered that these future economic benefits will not be generated, the development costs are written down in the year in which this is ascertained.
Such assets are measured at purchase or production cost and - if the assets concerned have a finite useful life - are amortised on a straight-line basis over their estimated useful life. Estimated useful working life in years, unchanged compared to previous financial years, is as follows:
| Customer relationship | 15 |
|---|---|
| Brand | 15 |
| Patents | 9 |
| Know how | 7 |
| Development costs | 10 |
| Software | 3-5 |
At each end of reporting period, the Group reviews the carrying value of its tangible and intangible assets to determine whether there are signs of impairment losses of these assets. If there is any such indication, the recoverable amount of said assets is estimated so as to determine the total of the write-down. If it is not possible to estimate recoverable amount individually, the Group estimates the recoverable amount of the cash generating unit (CGU) to which the asset belongs.
In particular, the recoverable amount of the cash generating units (which generally coincide with the legal entity to which the capitalised assets refer) is verified by determining the value of use. The recoverable amount is the higher of the net selling price and value of use. In measuring the value of use, future cash flows net of taxes, estimated based on past experience, are discounted to their present value using a pre-tax rate that reflects current market valuations of the present cost of money and specific asset risk. The main assumptions used for calculating the value of use concern the discount rate, growth rate, expected changes in selling prices and cost trends during the period used for the calculation. The growth rates adopted are based on future market expectations in the relevant sector. Changes in the sales prices are based on past experience and on the expected future changes in the market. The Group prepares operating cash flow forecasts based on the most recent budgets approved by the Board of Directors of the consolidated companies, draws up the forecasts for the coming years and determines the terminal value (current value of perpetual income), which expresses the medium- and long-term operating flows in the specific sector.
If the recoverable amount of an asset (or CGU) is estimated to be lower than its carrying value, the asset's carrying value is reduced to the lower recoverable amount, recognising impairment in the income statement.
When there is no longer any reason for a write-down to be maintained, the carrying value of the asset (or of the cash-generating unit) - with the exception of goodwill - is increased to the new value resulting from the estimate of its recoverable amount, but not beyond the net
carrying value that the asset would have had if it had not been written down for impairment. Reversal of impairment loss is recognised in the income statement.
As allowed by IAS 40, non-operating buildings and constructions are assessed at cost net of depreciation and losses due to cumulative impairment. The depreciation criterion applied is the asset's estimated useful life, which is considered to be 33 years. If the recoverable amount of the investment property – determined based on the market value of the properties – is estimated to be lower than its carrying value, the asset's carrying value is reduced to the lower recoverable amount, recognising impairment in the income statement.
When there is no longer any reason for a write-down to be maintained, the carrying value of the asset (or cash generating unit) is increased to the new value stemming from the estimate of its recoverable amount – but not beyond the net carrying value that the asset would have had if it had not been written down for impairment. Reversal of impairment loss is recognised in the income statement.
Equity investments in companies other than subsidiaries, associates and joint ventures are classified as financial assets measured at fair value, which normally corresponds to the transaction price including directly attributable transaction costs. Subsequent changes in fair value are recognised through profit or loss (FVPL) or, if the option is exercised in accordance with the standard, in Other comprehensive income (FVOCI) under the heading "Instrument reserve at FVOCI". Non-current receivables are stated at their presumed realisable value.
Inventories are measured at the lower of purchase or production cost – determined using the weighted average cost method – and the corresponding fair value represented by the replacement cost for purchased materials and by the presumed realisable value for finished and semi-processed products – calculated taking into account any manufacturing costs and direct selling costs yet to be incurred. Inventory cost includes accessory costs and the portion of direct and indirect manufacturing costs that can reasonably be assigned to inventory items. Inventories subject to obsolescence and low turnover are written down in relation to their possibility of use or realisation. Inventory write-downs are derecognised in subsequent years if the reasons for such write-downs cease to exist.
Upon initial recognition, financial assets are classified, as the case may be, on the basis of subsequent measurement methods, i.e. at amortised cost, at fair value recognised in other comprehensive income (OCI) and at fair value through profit or loss. The classification of financial assets at initial recognition depends on the characteristics of the contractual cash flows of the financial assets and on the business model that the Group uses to manage them. Trade receivables that do not contain a significant financing component are valued at the transaction price determined in accordance with IFRS 15. See the "Revenue from Contracts with Customers" paragraph.
Other financial assets are recognised at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. For a financial asset to be classified and measured at amortised cost or at fair value recognised in OCI, it must generate cash flows that depend solely on the principal and interest on the amount of principal to be repaid (known as "solely payments of principal and interest (SPPI)"). This measurement is referred to as the SPPI test and is carried out at the instrument level.
The measurement of financial liabilities depends on their classification, as described below:
This category is the most important for the Group. The Group measures the financial assets at amortised cost if both of the following requirements are met:
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognised in the income statement when the asset is derecognised, modified or revalued. Financial assets at amortised cost of the Group include trade receivables.
This category includes all assets held for trading, assets designated at initial recognition as financial assets measured at fair value with changes recognised in the income statement, or financial assets that must be measured at fair value. Assets held for trading are all those assets acquired for sale or repurchase in the short term. Derivatives, separated or otherwise, are classified as financial instruments held for trading, unless they are designated as effective hedging instruments. Financial assets with cash flows that are not represented solely by principal and interest payments are classified and measured at fair value through profit or loss, regardless of the business model. Financial instruments at fair value with changes recognised in the income statement are recognised in the statement of financial position at fair value and net changes in fair value are recognised in the income statement. This category includes derivative instruments.
The Group does not hold financial assets at fair value recognised in other comprehensive income with reclassification of cumulative gains and losses or financial assets recognised in other comprehensive income without reversal of cumulative gains and losses upon derecognition.
A financial asset (or, if applicable, part of a financial asset or part of a group of similar financial assets) is firstly written off (e.g. removed from the statement of financial position of the Group) when:
If the Group has transferred the rights to receive cash flows from an asset or has signed an agreement on the basis of which it retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more beneficiaries (pass-through), it considers whether or to what extent it has retained the risks and benefits concerning the ownership. If it has not substantially transferred or retained all the risks and benefits or has not lost control over it, the asset continued to be recognised in the financial statements of the Group to the extent of its residual involvement in the asset itself. In this case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured in such a way as to reflect the rights and obligations that pertain to the Group. When the residual involvement of the entity is a guarantee in the transferred asset, the involvement is measured based on the amount of the asset or the maximum amount of the consideration received that the entity could be obliged to pay, whichever lower.
Provisions for risks and charges are provisioned to cover losses and debts, the existence of which is certain or probable, but whose amount or date of occurrence cannot be determined at the end of the year. Provisions are stated in the statement of financial position only when a legal or implicit obligation exists that determines the use of resources with an impact on profit and loss to meet that obligation and the amount can be reliably estimated. If the effect is significant, the provisions are calculated by updating future cash flows estimated at a rate including taxes such as to reflect current market valuations of the current value of the cash and specific risks associated with the liability.
The post-employment benefit is provisioned to cover the entire liability accruing vis-à-vis employees in compliance with current legislation and with national and supplementary company collective labour contracts. This liability is subject to revaluation via application of indices fixed by current regulations. Up to 31 December 2006, postemployment benefits were considered defined-benefit plans and accounted for in compliance with IAS 19, using the projected unitcredit method. The regulations of this fund were amended by Law no. 296 of 27 December 2006 and subsequent Decrees and Regulations issued during the first months of 2007. In the light of these changes, and, in particular, for companies with at least 50 employees, postemployment benefits must now be considered a defined-benefit plan only for the portions accruing before 1 January 2007 (and not yet paid as at the end of the reporting period). Conversely, portions accruing after that date are treated as defined-contribution plans. Actuarial gains or losses are recognised immediately under "Other total profits/(losses)".
All financial liabilities are initially recognised at fair value, in addition to directly attributable transaction costs in case of mortgages, loans and payables.
The Company's financial liabilities include trade payables and other payables, mortgages and loans, including current account overdrafts and derivative financial instruments.
The measurement of financial liabilities depends on their classification, as described below.
Financial liabilities at fair value with changes recognised in the income statement include liabilities held for trading and financial liabilities initially recognised at fair value, with changes recognised in the income statement. Liabilities held for trading are those liabilities acquired in order to discharge or transfer them in the short term. This category also includes derivative financial instruments subscribed by the Company and not designated as hedging instruments in a hedging relationship pursuant to IFRS 9. Embedded derivatives, separated from the main contract, are classified as financial instruments held for trading, unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the income statement. Financial liabilities are designated at fair value with changes recognised in the income statement from the date of initial recognition, only if the criteria of IFRS 9 are met.
This is the most important category for the Company and includes interest-bearing payables and loans. After initial statement, loans are valued using the amortised cost approach, applying the effective interest rate method. Gains and losses are recognised in the income statement when the liability is discharged, as well as through the amortisation process. Amortised cost is calculated by recognising the discount or premium on the acquisition and the fees or costs that are an integral part of the effective interest rate. Amortisation at the effective interest rate is included in financial expenses in the income statement.
A financial liability is derecognised when the obligation underlying the liability is discharged, cancelled or fulfilled. If an existing financial liability is replaced by another from the same lender, at substantially different conditions, or if the conditions of an existing liability are substantially changed, this replacement or change is treated as a derecognition of the original liability accompanied by the recognition of a new liability, with any differences between the carrying values recognised in the income statement.
Receivables and payables originally expressed in foreign currencies are converted into euro at the exchange rates in force on the date of the transactions originating them. Forex differences realised upon collection of receivables and payment of payables in foreign currency are posted in the income statement. Income and costs relating to foreign-currency transactions are converted at the rate in force on the transaction date.
At year-end, assets and liabilities expressed in foreign currencies, with the exception of non-current items, are posted at the spot exchange rate in force at the end of the reporting period and related foreign exchange gains and losses are posted in the income statement. If conversion generates a net gain, this value constitutes a non-distributable reserve until it is effectively realised.
The Group's business is exposed to financial risks relating to changes in exchange rates, commodity prices and interest rates. The company uses derivative instruments (mainly forward contracts on currencies and commodity options) to hedge risks stemming from changes in foreign currencies relating to irrevocable commitments or to planned future transactions.
Derivatives are initially recognised at cost and are then adjusted to fair value on subsequent closing dates.
Changes in the fair value of derivatives designated and recognised as effective for hedging future cash flows relating to the Group's contractual commitments and planned transactions are recognised directly in shareholders' equity, while the ineffective portion is immediately posted in the income statement. If the contractual commitments or planned transactions materialise in the recognition of assets or liabilities, when such assets or liabilities are recognised, the gains or losses on the derivative that were directly recognised in equity are factored back into the initial valuation of the cost of acquisition or carrying value of the asset or liability. For cash flow hedges that do not lead to recognition of assets or liabilities, the amounts that were directly recognised in equity are included in the income statement in the same period when the contractual commitment or planned transaction hedged impacts profit and loss – for example, when a planned sale actually takes place.
For effective hedges of exposure to changes in fair value, the item hedged is adjusted for the changes in fair value attributable to the risk hedged and recognised in the income statement. Gains and losses stemming from the derivative's valuation are also posted in the income statement.
Changes in the fair value of derivatives not designated as hedging instruments are recognised in the income statement in the period when they occur. Hedge accounting is discontinued when the hedging instrument expires, is sold or is exercised, or when it no longer qualifies as a hedge. At this time, the cumulative gains or losses of the hedging instrument recognised in equity are kept in the latter until the planned transaction actually takes place. If the transaction hedged is not expected to take place, cumulative gains or losses recognised directly in equity are transferred to the year's income statement.
Embedded derivatives included in other financial instruments or contracts are treated as separate derivatives when their risks and characteristics are not strictly related to those of their host contracts and the latter are not measured at fair value with posting of related gains and losses in the income statement.
The Group is engaged in the supply of components for household appliances (mainly gas parts, such as valves and burners, hinges and electronic components).
Revenue from contracts with customers is recognised when control of the goods is transferred to the customer for an amount that reflects the consideration that the Group expects to receive in exchange for the goods. The control of the goods passes to the customer according to the terms of return defined with the customer. The usual extended payment terms range from 30 to 120 days from shipment; the Group believes that the price does not include significant financing components.
The guarantees provided for in the contracts with customers are of a general nature and not extended and are accounted for in accordance with IAS 37.
Finance income includes interest receivable on funds invested and income from financial instruments, when not offset as part of hedging transactions. Interest income is recognised in the income statement at the time of vesting, taking effective output into consideration.
Financial expenses include interest payable on financial debt calculated using the effective interest method and bank expenses. All the other financial expenses are recognised as costs for the year in which they are incurred.
Income taxes include all taxes calculated on the Group's taxable income. Income taxes are directly recognised in the income statement, with the exception of those concerning items directly debited or credited to shareholders' equity, in which case the tax effect is recognised directly in shareholders' equity. Other taxes not relating to income, such as property taxes, are included among operating expenses. Deferred taxes are provisioned in accordance with the global liability provisioning method. They are calculated on all temporary differences emerging between the taxable base of an asset and liability and its book value in the consolidated financial statements, with the exception of goodwill that is not tax-deductible and of differences stemming from investments in subsidiaries for which cancellation is not envisaged in the foreseeable future. Deferred tax assets on unused tax losses and tax credits carried forward are recognised to the extent that it is probable that future taxable income will be available against which they can be recovered. Current and deferred tax assets and liabilities are offset when income taxes are levied by the same tax authority and when there is a legal right to settle on a net basis. Deferred tax assets and liabilities are measured using the tax rates that are expected to be applicable, according to the respective regulations of the countries where the Group operates, in the years when temporary differences will be realised or settled.
Dividends are posted on an accrual basis when the right to receive them materialises, i.e. when shareholders approve dividend distribution.
Treasury shares are booked as a reduction of shareholders' equity. The carrying value of treasury shares and revenues from any subsequent sales are recognised in the form of changes in shareholders' equity.
Some Group employees receive part of the remuneration in the form of share-based payments, therefore employees provide services in exchange for shares ("equity-settled transactions"). The cost of equity-settled transactions is determined by the fair value at the date on which the assignment is made using an appropriate measurement method, as explained in more detail in Note 38.
This cost, together with the corresponding increase in shareholders' equity, is recognised under personnel costs (Note 27) over the period in which the conditions relating to the achievement of objectives and/or the provision of the service are met. The cumulative costs recognised for such transactions at the end of each reporting period up to the vesting date are commensurate with the expiry of the vesting period and the best estimate of the number of equity instruments that will actually vest.
Service or performance conditions are not taken into account when defining the fair value of the plan at the assignment date. However, the probability of these conditions being met is taken into account when defining the best estimate of the number of equity instruments that will vest. Market conditions are reflected in the fair value at the assignment date. Any other condition related to the plan that does not involve a service obligation is not considered to be a vesting condition. Non-vesting conditions are reflected in the fair value of the plan and result in the immediate recognition of the cost of the plan, unless there are also service or performance conditions.
No cost is recognised for rights that do not vest in that the performance and/or service conditions are not met. When the rights include a market condition or a non-vesting condition, these are treated as if they had vested regardless of whether the market conditions or other non-vesting conditions to which they are subject are met or not, it being understood that all other performance and/or service conditions must be met.
If the conditions of the plan are changed, the minimum cost to be recognised is the fair value at the assignment date in the absence of the change in the plan itself, on the assumption that the original conditions of the plan are met. Moreover, a cost is recognised for each change that results in an increase in total fair value of the payment plan, or that is in any case favourable for employees; this cost is measured with reference to the date of change. When a plan is cancelled, any remaining element of the plan's fair value is immediately expensed to the income statement.
Basic EPS is calculated by dividing the profit or loss attributable to the direct parent company's shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the profit or loss attributable to the direct parent company's shareholders by the weighted average number of shares outstanding, adjusted to take into account the effects of all potential ordinary shares with a dilutive effect.
Preparation of the financial statements and notes in accordance with IFRS requires management to make estimates and assumptions that affect the carrying values of assets and liabilities and the disclosures on contingent assets and liabilities as of the end of the reporting period. Actual results might differ from these estimates. Estimates are used to measure tangible and intangible assets subject to impairment testing, as described earlier, as well as to measure provisions for bad debts, for inventory obsolescence, depreciation and amortisation, asset writedowns, employee benefits, taxes, and other provisions. Specifically:
The procedure for determining impairment losses of tangible and intangible assets described in "Impairment" implies – in estimating the value of use – the use of the Business Plans of investees, which are based on a series of assumptions relating to future events and actions of the investees' management bodies, which may not necessarily come about. In estimating market value, however, assumptions are made on the expected trend in trading between third parties based on historical trends, which may not actually be repeated.
Receivables are adjusted by the related bad debt provision to take into account their recoverable amount. To determine the size of the writedowns, management must make subjective assessments based on the documentation and information available regarding, among other things, the customer's solvency, as well as experience and historical payment trends.
Inventories subject to obsolescence and slow turnover are systematically valued, and written down if their recoverable amount is less than their carrying value. Write-downs are calculated based on management assumptions and estimates, resulting from experience and historical results.
The current value of liabilities for employee benefits depends on a series of factors determined using actuarial techniques based on certain assumptions. Assumptions concern the discount rate, estimates of future salary increases, and mortality and resignation rates. Any change in the above-mentioned assumptions might have significant effects on liabilities for pension benefits.
Estimating the fair value of share-based payments requires the determination of the most appropriate valuation model, which depends on the terms and conditions under which these instruments are granted. This also requires the identification of data to feed into the valuation model, including assumptions about the exercise period of the options, volatility and dividend yield. The Group uses a binomial model for the initial measurement of the fair value of share-based payments with employees.
The Group is subject to different bodies of tax legislation on income. Determining liabilities for Group taxes requires the use of management valuations in relation to transactions whose tax implications are not certain at the end of the reporting period. Furthermore, the valuation of deferred taxes is based on income expectations for future years; the valuation of expected income depends on factors that might change over time and have a significant effect on the valuation of deferred tax assets.
When estimating the risk of potential liabilities from disputes, the Directors rely on communications regarding the status of recovery procedures and disputes from the lawyers who represent the Group in litigation. These estimates are determined taking into account the gradual development of the disputes, considering existing exemptions.
With reference to the potential impact of climate change and energy transition on the Group's activities, the Management carries out targeted analyses to identify and manage the main risks and uncertainties to which the Group is exposed, adapting the corporate strategy accordingly. To date, these factors have not had a significant impact on the judgements and estimates used in preparing these Consolidated Financial Statements.
Management has reviewed the Group's exposure to the effects of the COVID-19 pandemic and its impact on the Group's financial position, results and cash flows, especially with regard to the recoverability of the value of intangible assets, the measurement of receivables, the measurement of inventories and the management of financial risks, with a special reference to credit and liquidity risks. The analysis carried out did not reveal any critical situations and the factors related to the COVID-19 pandemic did not have a significant impact on the judgements and estimates used in preparing these Consolidated Financial Statements.
Estimates and assumptions are regularly reviewed and the effects of each change immediately reflected in the income statement.
The Financial Stability Board released the report "Reforming Major Interest Rate Benchmarks" with recommendations to strengthen existing benchmark indexes, other potential interbank market-based benchmark rates and develop alternative near-risk-free benchmark rates. The European Parliament introduced a common framework to ensure the accuracy and integrity of these indexes.
Following this Regulation, the IASB published the Reform of benchmark indexes for determining interest rates in order to take into account the consequences of the reform on financial reporting and so that companies can continue to comply with the provisions assuming that the existing benchmark indexes are not changed as a result of the reform of interbank rates.
The amendments to the principles outlined provide a number of expedients, applicable to all hedging relationships directly affected by the interest rate benchmark reform, i.e., if the reform generates uncertainties about the timing and/or amount of cash flows based on benchmarks of the hedged item or hedging instrument. These changes had no impact on the Group's consolidated financial statements.
On 31 March 2021, the IASB issued the document "Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16)" by which it extends by one year the period of application of the amendment to IFRS 16, issued in 2020, relating to the accounting for facilities granted to lessees due to Covid-19. These changes that apply as from 1 April 2021 had no impact on the Group's consolidated financial statements.
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new standard on insurance contracts covering recognition and measurement, presentation and disclosure. The overall objective of IFRS 17 is to present an accounting model for insurance contracts that is more useful and consistent for insurers. This principle does not apply to the Group.
In January 2020, the IAS issued amendments to paragraphs 69-76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify what is meant by the right to postpone an expiry, that the right to postpone must exist at the end of the reporting period, that the classification is not affected by the likelihood that the entity will exercise its right to postpone, that only if a derivative embedded in a convertible liability is itself an equity instrument does the maturity of the liability have no impact on classification. The amendments will be effective for financial years beginning on or after 1 January 2023 and must be applied retrospectively. The Group is assessing the impact the changes will have on the current situation.
The amendments are intended to update a reference in IFRS 3 to the previous version of the IASB's Conceptual Framework (1989 Framework) without affecting the requirements of the standard.
The purpose of the amendments is not to allow the deduction from the cost of property, plant and equipment of the amount received from the sale of goods produced in the test phase of the asset. These sales revenues and related production costs will therefore be recognised in the income statement.
The amendment clarifies that all costs directly attributable to the contract must be taken into account when estimating the possible onerousness of a contract. Accordingly, the assessment of whether a contract is onerous includes not only incremental costs (such as the cost of direct material used in processing), but also all costs that the enterprise cannot avoid because it has entered into the contract (such as, for example, the share of depreciation of machinery used for the performance of the contract).
The amendments include amendments to the following principles:
All amendments will enter into force on 1 January 2022. Following the adoption of these amendments, the directors do not expect a significant effect on the Group's consolidated financial statements.
| Property | Plant and equipment |
Other assets | Assets under construction |
Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| COST | ||||||||||
| At 31 December 2019 | 56,074 | 215,631 | 53,428 | 3,164 | 328,297 | |||||
| Increases | 1,591 | 7,658 | 4,190 | 4,508 | 17,947 | |||||
| Disposals | - | (1,451) | (218) | - | (1,669) | |||||
| Change in the scope of consolidation | 1,575 | - | 4 | - | 1,579 | |||||
| Reclassifications | (518) | 1,709 | 277 | (2,834) | (1,366) | |||||
| Forex differences | (1,496) | (3,955) | (1,804) | (303) | (7,558) | |||||
| At 31 December 2020 | 57,226 | 219,592 | 55,877 | 4,535 | 337,230 | |||||
| Increases | 1,589 | 11,097 | 4,421 | 5,120 | 22,227 | |||||
| Disposals | (48) | (1,366) | (398) | (596) | (2,408) | |||||
| Change in the scope of consolidation | 942 | 83 | - | 1,531 | 2,556 | |||||
| Reclassifications | 375 | 2,092 | 18 | (3,480) | (995) | |||||
| Forex differences | (654) | (3,201) | (1,089) | (474) | (5,418) | |||||
| At 31 December 2021 | 59,430 | 228,297 | 58,829 | 6,636 | 353,192 | |||||
| ACCUMULATED DEPRECIATIONS | |||||
|---|---|---|---|---|---|
| At 31 December 2019 | 22,779 | 183,664 | 45,969 | - | 252,412 |
| Depreciations for the year | 2,321 | 8,696 | 2,909 | - | 13,926 |
| Disposals | - | (1,422) | (81) | - | (1,503) |
| Reclassifications | (530) | 184 | (43) | - | (389) |
| Forex differences | (423) | (2,184) | (1,116) | - | (3,723) |
| At 31 December 2020 | 24,147 | 188,938 | 47,638 | - | 260,723 |
| Depreciations for the year | 2,367 | 8,457 | 3,290 | - | 14,114 |
| Disposals | (14) | (1,462) | (319) | - | (1,795) |
| Reclassifications | - | (116) | 3 | - | (113) |
| Forex differences | (297) | (1,287) | (560) | - | (2,144) |
| NET CARRYING VALUE | |||||
|---|---|---|---|---|---|
| At 31 December 2021 | 33,227 | 33,767 | 8,777 | 6,636 | 82,407 |
| At 31 December 2020 | 33,079 | 30,654 | 8,239 | 4,535 | 76,507 |
The breakdown of the net carrying value of Property was as follows:
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Land | 8,613 | 7,675 | 938 |
| Industrial buildings | 24,614 | 25,404 | (790) |
| Total | 33,227 | 33,079 | 148 |
Changes in property, plant and equipment resulting from the application of IFRS 16 are shown below:
| Property | Plant and equipment |
Other assets | Total | |
|---|---|---|---|---|
| 1 January 2021 | 2,447 | 340 | 826 | 3,613 |
| Increases | 414 | 104 | 681 | 1,199 |
| Depreciations | (595) | (241) | (575) | (1,411) |
| Decreases | (47) | - | - | (47) |
| Foreign exchange differences | 2 | - | - | 2 |
| At 31 December 2021 | 2,221 | 203 | 932 | 3,356 |
The main investments of the financial year were allocated to:
Decreases mainly relate to the disposal of machinery no longer in use. Assets under construction include machinery under construction and advance payments to suppliers of capital equipment.
At 31 December 2021, the Group found no endogenous or exogenous indicators of impairment of its property, plant and equipment. As a result, the value of property, plant and equipment was not submitted to impairment testing.
| COST | ||||
|---|---|---|---|---|
| At 31 December 2019 | 11,836 | |||
| Increases | - | |||
| Disposals | (552) | |||
| At 31 December 2020 | 11,284 | |||
| Increases | - | |||
| Disposals | (1,107) | |||
| At 31 December 2021 | 10,177 |
| DEPRECIATIONS AND WRITE-DOWNS | ||||
|---|---|---|---|---|
| At 31 December 2019 | 7,860 | |||
| Depreciations for the year | 416 | |||
| Write-downs for the year | - | |||
| Derecognition due to disposal | (245) | |||
| At 31 December 2020 | 8,031 | |||
| Depreciations for the year | 369 | |||
| Write-downs for the year | - | |||
| Derecognition due to disposal | (534) | |||
| At 31 December 2021 | 7,866 |
| NET CARRYING VALUE | ||||
|---|---|---|---|---|
| At 31 December 2021 | 2,311 | |||
| At 31 December 2020 | 3,253 |
Changes in investment property resulting from the application of IFRS 16 are shown below:
| INVESTMENT PROPERTY | ||||
|---|---|---|---|---|
| 1 January 2021 | 38 | |||
| Increases | - | |||
| Decreases | (35) | |||
| Depreciations | - | |||
| Foreign exchange differences | - | |||
| At 31 December 2021 | 3 |
The item Investment property includes non-operating buildings owned by the Group: these are mainly properties for residential use, held for rental or sale. Disposals during the period resulted in capital gains totalling €109 thousand.
At 31 December 2021, the Group found no other endogenous or exogenous indicators of impairment of its investment property. As a result, the value of investment property was not submitted to impairment testing.
| Goodwill | Patents and software |
Development costs | Other intangible assets |
Total | |
|---|---|---|---|---|---|
| COST | |||||
| At 31 December 2019 | 31,615 | 8,962 | 6,728 | 24,959 | 72,264 |
| Increases | - | 547 | 465 | 85 | 1,097 |
| Decreases | - | 1 | - | (1) | - |
| Change in the scope of consolidation | - | 1 | - | - | 1 |
| Reclassifications | - | 33 | (607) | (786) | (1,360) |
| Forex differences | (4,501) | (143) | - | (2,658) | (7,302) |
| At 31 December 2020 | 27,114 | 9,401 | 6,586 | 21,599 | 64,700 |
| Increases | - | 420 | 1,770 | 44 | 2,234 |
| Decreases | - | (2) | - | (3) | (5) |
| Reclassifications | - | (70) | (58) | - | (128) |
| Forex differences | (4,978) | (164) | - | (2,939) | (8,081) |
| At 31 December 2021 | 22,136 | 9,585 | 8,298 | 18,701 | 58,720 |
| AMORTISATION/WRITE-DOWNS | |||||
| At 31 December 2019 | 4,546 | 8,179 | 4,338 | 3,533 | 20,596 |
| Amortisation for the year | - | 480 | 431 | 1,723 | 2,634 |
| Decreases | - | - | - | - | - |
| Change in the scope of consolidation | - | - | - | - | - |
| Reclassifications | - | (18) | (344) | (781) | (1,143) |
| Forex differences | - | (68) | - | (336) | (404) |
| At 31 December 2020 | 4,546 | 8,573 | 4,425 | 4,139 | 21,683 |
| Amortisation for the year | - | 419 | 375 | 1,553 | 2,347 |
| Decreases | - | - | - | - | - |
| Change in the scope of consolidation | - | - | - | - | - |
| Reclassifications | - | (93) | - | - | (93) |
| Forex differences | - | (112) | - | (658) | (770) |
| NET CARRYING VALUE | |||||
|---|---|---|---|---|---|
| At 31 December 2021 | 17,590 | 798 | 3,498 | 13,667 | 35,553 |
| At 31 December 2020 | 22,568 | 828 | 2,161 | 17,460 | 43,017 |
At 31 December 2021 4,546 8,787 4,800 5,034 23,167
Goodwill recognised at 31 December 2021 is allocated:
The Group verifies the ability to recover goodwill at least once a year or more frequently if there are indications of impairment. Recoverable amount is determined through value of use, by discounting expected cash flows.
The management defined a single plan for each CGU (approved by the Board of Directors) that represents the normal and expected scenario, with reference to the period from 2022 to 2026, and which was used to develop the impairment tests. The development of forward plans and the calculation of the value in use were carried out following an in-depth analysis that also considered the impact on profitability of the increase in purchase costs and the possibility of transferring this increase to sales prices. The recoverable amount of each CGU, determined on the basis of this plan, was subjected to stress tests and sensitivity analyses that also took into account economic parameters and as a result of which positive results emerged.
In 2021, the Hinges CGU achieved positive results - in terms of sales and profitability - both compared to the previous year and compared to the budget. The 2022-2026 forward plan envisages a further increase in sales at moderate growth rates.
At 31 December 2021, the Group tested - with the support of independent experts - the carrying value of its CGU Hinges for impairment, determining its recoverable amount, considered to be equivalent to its usable value, by discounting expected future cash flow in the forward plan drafted by the management. Cash flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses the operating flows that the CGU is expected to generate from the sixth year to infinity and determined based on the perpetual income. The value of use was calculated based on a discount rate (wacc) of 10.11% (8.62% in the impairment test carried out while preparing the consolidated financial statements at 31 December 2020) and a growth rate (g) of 2%, unchanged from the 2020 impairment test.
The recoverable amount calculated on the basis of the abovementioned assumptions and valuation techniques is €15.497 million, compared with a carrying value of the assets allocated to the Hinges unit of €14.294 million; consequently, the value recognised for goodwill at 31 December 2021 was deemed recoverable.
The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 1.75% | 2.00% | 2.25% | 2.50% |
| 9.11% | 16,750 | 17,163 | 17,605 | 18,079 | 18,590 |
| 9.61% | 15,746 | 16,102 | 16,482 | 16,888 | 17,322 |
| 10.11% | 14,858 | 15,168 | 15,497 | 15,847 | 16,220 |
| 10.61% | 14,068 | 14,339 | 14,626 | 14,931 | 15,254 |
| 11.11% | 13,359 | 13,598 | 13,851 | 14,117 | 14,400 |
The table below shows the change in recoverable amount as EBITDA changes according to the plan.
| EBITDA | |||||
|---|---|---|---|---|---|
| According to the plan -10% -20% |
|||||
| (€/000) | 15,497 | 13,567 | 11,638 |
It was found that under most of the assumptions presented above, which consider changes in the discount rate, growth rate and EBITDA, the recoverable amount of the CGU is higher than its carrying value.
The Professional Burners CGU performed well during the 2021 financial year in terms of both turnover and profitability. The 2022- 2026 forward plan envisages a further increase in sales at moderate growth rates and almost stable margins. At 31 December 2021, the Group tested - with the support of independent experts - the carrying value of its Professional burners CGU for impairment, determining its recoverable amount, considered to be equivalent to its usable value, by discounting expected future cash flow in the forward plan drafted at the beginning of 2022. Cash flows for the period from 2022 to 2026 were augmented by the so-called terminal value, which expresses the operating flows that the CGU is expected to generate from the sixth year to infinity and determined based on the perpetual income. The value of use was calculated based on a discount rate (wacc) of 6.93% (6.76% in the impairment test carried out while preparing the consolidated financial statements at 31 December 2020) and a growth rate (g) of 2%, unchanged with respect to the 2020 impairment test, considered by management to be the best estimate of the CGU's growth assumptions, considering the sector in which it operates and in line with the growth rate of other Italian CGUs.
The recoverable amount calculated on the basis of the abovementioned assumptions and valuation techniques is €19.071 million, compared with a carrying value of the assets allocated to the Professional burners unit of €5.131 million (including minority interests); consequently, the value recognised for goodwill at 31 December 2021 was deemed recoverable.
The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 1.75% | 2.00% | 2.25% | 2.50% |
| 5.93% | 21,726 | 22,879 | 24,179 | 25,655 | 27,347 |
| 6.43% | 19,417 | 20,325 | 21,336 | 22,467 | 23,743 |
| 6.93% | 17,535 | 18,266 | 19,071 | 19,962 | 20,954 |
| 7.43% | 15,972 | 16,571 | 17,226 | 17,943 | 18,734 |
| 7.93% | 14,654 | 15,152 | 15,693 | 16,281 | 16,923 |
| EBITDA | |||||
|---|---|---|---|---|---|
| According to the plan -10% -20% |
|||||
| (€/000) | 19,071 | 16,634 | 14,197 |
The Electronic Components CGU performed extremely well in 2021. At 31 December 2021, the Group tested - with the support of independent experts - the carrying value of its CGU Electronic components for impairment, determining its recoverable amount, considered to be equivalent to its usable value, by discounting expected future cash flow in the forward plan drafted by the management. Cash flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses the operating flows that the CGU is expected to generate from the fifth year to infinity and determined based on the perpetual income. The value of use was calculated based on a discount rate (wacc) of 15.21% (14.18% in the impairment test carried out while preparing the consolidated financial statements at 31 December 2020) and a growth rate (g) of 2.50%, unchanged from the 2020 impairment test.
The recoverable amount calculated on the basis of the abovementioned assumptions and valuation techniques is €51.556 million, compared with a carrying value of the assets allocated to the Electronic components unit of €18.705 million; consequently, the value recognised for goodwill at 31 December 2021 was deemed recoverable.
The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||
|---|---|---|---|---|---|
| Discount rate | 2.00% | 2.25% | 2.50% | 2.75% | 3.00% |
| 14.21% | 54,611 | 55,388 | 56,198 | 57,043 | 57,925 |
| 14.71% | 52,345 | 53,049 | 53,781 | 54,544 | 55,340 |
| 15.21% | 50,252 | 50,892 | 51,556 | 52,248 | 52,968 |
| 15.71% | 48,314 | 48,897 | 49,502 | 50,131 | 50,784 |
| 16.21% | 46,513 | 47,047 | 47,599 | 48,173 | 48,768 |
The table below shows the change in recoverable amount as EBITDA changes according to the plan.
| EBITDA | |||||
|---|---|---|---|---|---|
| According to the plan -10% -20% |
|||||
| (€/000) | 51,556 | 45,676 | 39,796 |
The Hinges C.M.I. CGU recognised a strong increase in turnover in 2021 compared to the previous year. The positive trend is expected to continue for the period from 2022 to 2026, which forecasts further sales at moderate growth rates.
At 31 December 2021, the Group tested - with the support of independent experts - the carrying value of its CGU Hinges C.M.I. for impairment, determining its recoverable amount, considered to be equivalent to its usable value, by discounting expected future cash flow in the forward plan drafted by the management. Cash flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses the operating flows that the CGU is expected to generate from the third year to infinity and determined based on the perpetual income. The value of use was calculated based on a discount rate (wacc) of 11.31% (9.87% in the impairment test carried out while preparing the consolidated financial statements at 31 December 2020) and a growth rate (g) of 2%, unchanged with respect
to the 2020 impairment test, considered by management to be the best estimate of the CGU's growth assumptions, considering the sector in which it operates and in line with the growth rate of other Italian CGUs.
The recoverable amount calculated on the basis of the abovementioned assumptions and valuation techniques is €57.700 million, compared with a carrying value of the assets allocated to the C.M.I. Hinges unit of €29.313 million; consequently, the value recognised for goodwill at 31 December 2021 was deemed recoverable.
The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 1.75% | 2.00% | 2.25% | 2.50% |
| 10.31% | 62,424 | 63,900 | 65,465 | 67,128 | 68,896 |
| 10.81% | 58,694 | 59,990 | 61,387 | 62,810 | 64,347 |
| 11.31% | 55,349 | 56,494 | 57,700 | 58,974 | 60,319 |
| 11.81% | 52,333 | 53,350 | 54,419 | 55,544 | 56,729 |
| 12.31% | 49,600 | 50,508 | 51,460 | 52,459 | 53,509 |
The table below shows the change in recoverable amount as EBITDA changes according to the plan.
| EBITDA | |||
|---|---|---|---|
| According to the plan | -10% | -20% | |
| (€/000) | 57,700 | 52,378 | 43,693 |
Software investments are related to the extension of the application and corporate scope of the Group management system (SAP).
In 2021, the Sabaf Group set up a dedicated team to develop new solutions for home cooking, with the aim of creating innovative products that meet manufacturers' needs and new consumer trends. This is a strategically important innovation that allows Sabaf to enter a fast-growing segment.
Development activities continued in the Gas Components, Hinges and Electronics divisions, which are described in the Report on Operations. Increases in development costs include projects in progress and therefore not subject to amortisation.
With regard to patents, software and development costs, no internal and external indicators that would necessitate an impairment test were identified.
The other intangible assets recognised in these consolidated financial statements mainly derive from the Purchase Price Allocation carried out following the acquisition of Okida Elektronik in September 2018, and of C.M.I. s.r.l., in July 2019.
The net carrying value of other intangible assets is broken down as follows:
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Customer Relationship | 6,301 | 8,775 | (2,474) |
| Brand | 3,877 | 4,459 | (582) |
| Know-how | 236 | 503 | (267) |
| Patents | 3,038 | 3,498 | (460) |
| Other | 215 | 225 | (10) |
| Total | 13,667 | 17,460 | (3,793) |
At 31 December 2021, the recoverability of the amount of other intangible assets was verified as part of the impairment test of the related goodwill described in the previous paragraph.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Handan A.R.C. Burners Co. | - | 89 | (89) |
| Other equity investments | 83 | 84 | (1) |
| Total | 83 | 173 | (90) |
The investment in Handan A.R.C. Burners Co. Ltd., held through A.R.C. s.r.l. and previously measured using the equity method, is related to a Chinese joint venture set up with the aim to produce and market in China burners for professional cooking. During 2021, the Group's share increased from 35.7% to 51%, following the acquisition of an additional 30% of the share capital of A.R.C., therefore as from this financial year Handan A.R.C. Burners Co. Ltd is consolidated on a line-by-line basis.
Internal and external indicators that would necessitate an impairment test on equity investments were not identified.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Tax receivables | 985 | 392 | 593 |
| Guarantee deposits | 115 | 112 | 3 |
| Other | - | 14 | (14) |
| Total | 1,100 | 518 | 582 |
Tax receivables relate to indirect taxes expected to be recovered after 31 December 2022.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Raw Materials | 26,771 | 16,859 | 9,912 |
| Semi-processed goods | 15,133 | 10,414 | 4,719 |
| Finished products | 25,646 | 15,056 | 10,590 |
| Provision for inventory write-downs | (3,397) | (3,105) | (292) |
| Total | 64,153 | 39,224 | 24,929 |
The value of final inventories at 31 December 2021 increased compared to the end of the previous year to meet the higher volumes of activity. Moreover, in addition to the inflationary effect of the significant increases in metal prices, the Group raised the level of safety stocks to ensure continuity of production in a particularly turbulent scenario. The provision for write-downs is mainly allocated for hedging the obsolescence risk. At the end of the financial year, the appropriation is adjusted based on specific analyses carried out on slow-moving and non-moving products.
The following table shows the changes in the Provision for inventory write-downs during the current financial year:
| 31.12.2020 | 3,105 |
|---|---|
| Provisions | 696 |
| Utilisation | (223) |
| Forex differences | (181) |
| 31.12.2021 | 3,397 |
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Total trade receivables | 69,139 | 64,525 | 4,614 |
| Bad debt provision | (1,099) | (1,089) | (10) |
| Net total | 68,040 | 63,436 | 4,604 |
Trade receivables at 31 December 2021 were higher than the balance at the end of 2020 subsequent to higher sales during the financial year. There were no significant changes in the payment terms agreed with customers.The amount of trade receivables recognised in the financial statements includes approximately €24.3 million in insured receivables (€23.9 million at 31 December 2020).
Receivables assigned to factors without recourse (€8.398 thousand at 31 December 2021, €9.204 thousand at 31 December 2020) are derecognised from the Statement of Financial Position in that the reference contract provides for the assignment of ownership of the receivables, together with ownership of the cash flows generated by the receivable, as well as of all risks and benefits, to the assignee.
The breakdown of trade receivables by past due period is shown below:
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Current receivables (not past due) | 60,358 | 58,143 | 2,215 |
| Outstanding up to 30 days | 4,132 | 3,278 | 854 |
| Outstanding from 30 to 60 days | 1,290 | 1,249 | 41 |
| Outstanding from 60 to 90 days | 794 | 438 | 356 |
| Outstanding for more than 90 days | 2,565 | 1,417 | 1,148 |
| Total | 69,139 | 64,525 | 4,614 |
The bad debt provision was adjusted to the better estimate of the credit risk and expected losses at the end of the reporting period, also carried out by analysing each expired item. Changes during the year were as follows:
| 31.12.2020 | 1,089 |
|---|---|
| Provisions | 100 |
| Utilisation | (8) |
| Forex differences | (82) |
| 31.12.2021 | 1,099 |
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| For income tax | 1,395 | 1,179 | 216 |
| For VAT and other sales taxes | 4,751 | 1,195 | 3,556 |
| Other tax credits | 19 | 45 | (26) |
| Total | 6,165 | 2,419 | 3,746 |
At 31 December 2021, income tax receivables include:
The increase in receivables for VAT and other sales taxes is related to the strong growth in business volumes, which fully eroded the possibility of making tax-free purchases. The Group believes it will be able to recover this receivable in the first months of 2022.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Credits to be received from suppliers | 1,267 | 669 | 598 |
| Advances to suppliers | 859 | 1,032 | (173) |
| Accrued income and prepaid expenses | 476 | 487 | (11) |
| Other | 534 | 979 | (445) |
| Total | 3,136 | 3,167 | (31) |
Credits to be received from suppliers mainly refer to bonuses paid to the Group for the attainment of purchasing objectives, which were achieved in 2021 to a greater extent than in the previous year.
| 31.12.2021 | 31.12.2020 | |||
|---|---|---|---|---|
| Current | Non-current | Current | Non-current | |
| Restricted bank accounts | 1,172 | - | 1,233 | - |
| Currency derivatives | - | - | 262 | - |
| Total | 1,172 0 |
1,495 | 0 |
At 31 December 2021, a term deposit of €1,172 thousand, due by 2022, for the portion of the price not yet paid to the sellers of the C.M.I. equity investment and deposited as collateral in accordance with the terms of the C.M.I. acquisition agreement (Note 15).
Cash and cash equivalents, which amounted to €43,649 thousand at 31 December 2021 (€13,318 thousand at 31 December 2020) consisted of bank current account balances of €43.2 million (€12.8 million at 31 December 2020) and investments in liquidity of €432 thousand (€516 thousand at 31 December 2020). Changes in the cash and cash equivalents are analysed in the statement cash flows.
The parent company's share capital consists of 11,533,450 shares with a par value of €1.00 each. The share capital paid in and subscribed did not change during the year. At 31 December 2021, the structure of the share capital is shown in the table below.
| No. of shares | % of share capital | Rights and obligations | |
|---|---|---|---|
| Ordinary shares | 8,376,760 | 72.63% | - |
| Ordinary shares with increased vote | 3,156,690 | 27.37% | Two voting rights per share |
| Total | 11,533,450 | 100% |
With the exception of the right to increased vote, there are no rights, privileges or restrictions on the shares of the Parent Company. The availability of the Parent Company's reserves is indicated in the separate financial statements of Sabaf S.p.A..
With regard to the 2018 - 2020 Stock Grant Plan, following the expiry of the three-year vesting period, during the first half of 2021, 34,946 ordinary shares of Sabaf S.p.A. were allocated and transferred to the beneficiaries of Cluster 1, through the use of shares already available to the issuer. No other transactions on treasury shares were carried out during the year.
At 31 December 2021, the Parent company is the lawful owner of 311,802 treasury shares (2.703% of the share capital), reported in the financial statements as an adjustment to shareholders' equity at a weighted average unit value of €12.52 (the closing stock market price of the Share at 31 December 2021 was €24.00). Further to what was reported in the Interim Management Statement at 31 December 2021 published on 10 February 2022, it is confirmed that Sabaf S.p.A. recovered the full availability of 311,802 treasury shares on 1 March 2022.
There were 11,221,648 outstanding shares at 31 December 2021 (11,186,702 at 31 December 2020).
The item "Retained earnings, other reserves" of €86,089 thousand included, at 31 December 2021, the Stock Grant reserve of €1,701 thousand, which included the measurement at 31 December 2021 of the fair value of rights assigned to receive shares of the Parent Company relating to the following medium- and long-term incentive plans for directors and employees of the Sabaf Group:
For details of the Stock Grant Plan, refer to Note 38.
The following table shows the change in the Cash Flow Hedge reserve related to the application of IFRS 9 on derivative contracts and referring to the recognition in net equity of the effective part of the derivative contracts signed to hedge the foreign exchange rate risk for which the Group applies hedge accounting.
| Value at 31 December 2020 | 247 |
|---|---|
| Change during the period | (398) |
| Value at 31 December 2021 | (151) |
The characteristics of the derivative financial instruments that gave rise to the Cash Flow Hedge reserve and the accounting effects on other items in the financial statements are broken down in Note 36, in the paragraph Foreign exchange risk management.
| 31.12.2021 | 31.12.2020 | |||||
|---|---|---|---|---|---|---|
| Current | Non-current | Total | Current | Non-current | Total | |
| Bond issue | - | 29,649 | 29,649 | - | - | - |
| Unsecured loans | 19,044 | 53,913 | 72,957 | 15,801 | 28,647 | 44,448 |
| Short-term bank loans | 1,769 | - | 1,769 | 8,630 | - | 8,630 |
| Advances on bank receipts or invoices | 2,263 | - | 2,263 | 4,668 | - | 4,668 |
| Leases | 1,329 | 2,942 | 4,271 | 1,390 | 3,506 | 4,896 |
| Interest payable | - | - | - | 4 | - | 4 |
| Total | 24,405 | 86,504 | 110,909 | 30,493 | 32,153 | 62,646 |
During the year, the Group took out new unsecured loans for a total of €46 million to finance the investments made. All loans are signed with an original maturity of ranging from 5 to 6 years and are repayable in instalments.
Some of the outstanding unsecured loans have covenants, defined with reference to the consolidated financial statements at the end of the reporting period, as specified below:
Widely complied with at 31 December 2021 and for which, according to the Group's business plan, compliance is also expected in subsequent years.
All bank loans are denominated in euro, with the exception of a shortterm loan of USD 2 million.
To manage interest rate risk, unsecured loans are either fixed-rate or hedged by IRS. These consolidated financial statements include the negative fair value of the IRSs hedging rate risks of unsecured loans pending, for residual notional amounts of approximately €37.5 million and expiry until 31 December 2027. Financial expenses were recognised in the income statement with a balancing entry.
The following table shows the changes in lease liabilities during the year:
| Lease liabilities at 31 December 2019 | 4,528 |
|---|---|
| New agreements signed during 2020 | 1,706 |
| Repayments during 2020 | (1,400) |
| Forex differences | (64) |
| Lease liabilities at 31 December 2020 | 4,896 |
| New agreements signed during 2021 | 954 |
| Repayments during 2021 | (1,581) |
| Forex differences | 2 |
| Lease liabilities at 31 December 2021 | 4,271 |
Note 36 provides information on financial risks, pursuant to IFRS 7.
| 31.12.2021 | 31.12.2020 | |||
|---|---|---|---|---|
| Current | Non-current | Current | Non-current | |
| Option on A.R.C. minorities | - | - | 1,581 | - |
| Option on C.M.I. minorities | - | - | 5,250 | - |
| Payables to A.R.C. shareholders | - | - | 60 | - |
| Payables to C.M.I. shareholders | 1,173 | - | 1,173 | - |
| Derivative instruments on interest rates | 190 | - | 425 | - |
| Currency derivatives | 156 | - | - | - |
| Total | 1,519 | - | 8,489 | - |
At 31 December 2020, financial liabilities were recognised for options on minorities amounting to €6,831 thousand and relating to the accounting, in accordance with IAS 32, of call/put options subscribed in the context of the acquisition of A.R.C. s.r.l. (carried out in June 2016) and C.M.I. s.r.l. (carried out in June 2019), i.e. options to purchase by Sabaf and to sell by the minority shareholders, for the remaining shares of the share capital at contractually defined strike prices on the basis of income and financial parameters reported by the subsidiaries.
At 31 December 2021, both options were exercised, in particular:
• in October 2021, Sabaf S.p.A. completed the purchase of 30% of the capital of A.R.C. s.r.l., from Loris Gasparini for a consideration of €1,650 thousand. The difference with respect to the value of the financial liability recognised at 31 December 2020 amounting to €69 thousand, in accordance with IAS 39, was allocated to financial expenses. As a result of the transaction, Sabaf S.p.A. now holds 100% of A.R.C. s.r.l.;
• in November 2021, Sabaf S.p.A. also completed the acquisition of 15.75% of the share capital of C.M.I. s.r.l., following the exercise of the second put option by the minority shareholder Starfire s.r.l. (Guandong Xingye Investment Group). The fee was €4,743 thousand. The difference with respect to the value of the financial liability recognised at 31 December 2020 amounting to €507 thousand, in accordance with IAS 39, was allocated to financial income. As a result of this transaction, Sabaf S.p.A. now holds 100% of C.M.I. s.r.l..
The payable to the C.M.I. of €1,173 thousand at 31 December 2021 is related to the part of the price still to be paid to the sellers, which was deposited on a non-interest-bearing restricted account and will be released in favour of the sellers in accordance with contractual agreements and guarantees issued by the sellers. Currency derivatives refer to forward sales contracts recognised using hedge accounting. These financial instruments are broken down in Note 36 - Forex risk management.
At 31 December 2021, the Group has in place six interest rate swap (IRS) contracts for amounts and maturities coinciding with six unsecured loans that are being amortised, whose residual value at 31 December 2021 is €33,350 thousand. The contracts have not been designated as capital flow hedges and are therefore at their fair value through profit and loss, and recognised in the items "Financial assets" or "Other financial liabilities".
| Post-employment benefit | |
|---|---|
| At 31 December 2020 | 3,513 |
| Provisions | 220 |
| Financial expenses | 7 |
| Payments made | (226) |
| Tax effect | 20 |
| Change in the scope of consolidation | - |
| Forex differences | (126) |
| At 31 December 2021 | 3,408 |
Following the revision of IAS 19 - Employee benefits, from 1 January 2013, all actuarial gains or losses are recognised immediately in the comprehensive income statement ("Other comprehensive income") under the item "Actuarial income and losses".
Post-employment benefits are calculated as follows:
| Financial assumptions | |||||
|---|---|---|---|---|---|
| 31.12.2021 31.12.2020 |
|||||
| Discount rate | 0.40% | 0.23% | |||
| Inflation | 1.30% | 1.00% |
| Demographic theory | ||||
|---|---|---|---|---|
| 31.12.2021 | 31.12.2020 | |||
| Mortality rate | IPS55 ANIA | IPS55 ANIA | ||
| Disability rate | INPS 2000 | INPS 2000 | ||
| Staff turnover | 3% - 8% | 3% - 6% | ||
| Advance payouts | 2% - 4% | 5% - 6% per year | ||
| Retirement age | Pursuant to legislation in force at 31 December 2021 |
Pursuant to legislation in force at 31 December 2020 |
| 31.12.2020 | Provisions | Utilisation | Exchange rate differences |
31.12.2021 | |
|---|---|---|---|---|---|
| Provision for agents' indemnities | 221 | 29 | (1) | - | 249 |
| Product guarantee fund | 60 | - | - | - | 60 |
| Provision for legal risks | 970 | - | (550) | (4) | 416 |
| Other provisions for risks and charges | 182 | 500 | - | (73) | 609 |
| Total | 1,433 | 529 | (551) | (77) | 1,334 |
The provision for agents' indemnities covers amounts payable to agents if the Group terminates the agency relationship.
The product guarantee fund covers the risk of returns or charges by customers for products already sold and, if necessary, is adjusted at the end of the financial year on the basis of analyses carried out and past experience.
With regard to the provision for legal risks, note that, at the end of the 2020 financial year, a provision of €500 thousand had been recognised in relation to a patent dispute, for which a settlement was reached with the counterparty at the beginning of 2021. During 2021, the corresponding use of the provision was therefore recognised, against payment.
Note also that following the process of allocating the price paid for the acquisition of the C.M.I. Group on the net assets acquired (Purchase Price Allocation), completed during 2019, a provision for legal risks with a residual value of €328 thousand was recognised.
At 31 December 2021, a provision of €500 thousand was recognised under Other provisions for risks and charges, expressing the best estimate of the liability following the results of a tax audit on the Parent Company for the years from 2016 to 2018.
The provisions for risks, which represent the estimate of future payments made based on historical experience, have not been discounted because the effect is considered negligible.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Total | 54,837 | 41,773 | 13,064 |
The increase in trade payables is related to higher production volumes of the year. Average payment terms did not change versus the previous year. At 31 December 2021, there were no overdue payables of a significant amount and the Group did not receive any injunctions
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| For income tax | 3,450 | 1,923 | 1,527 |
| Withholding taxes | 954 | 1,029 | (75) |
| Other tax payables | 547 | 335 | 212 |
| Total | 4,951 | 3,287 | 1,664 |
for overdue payables. The income tax payables refer to the taxes for the year, for the portion exceeding the advances paid.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| To employees | 6,706 | 5,848 | 858 |
| To social security institutions | 2,844 | 2,679 | 165 |
| To agents | 283 | 286 | (3) |
| Advances from customers | 1,694 | 1,210 | 484 |
| Other current payables | 1,548 | 934 | 614 |
| Total | 13,075 | 10,957 | 2,118 |
At the beginning of 2022, payables due to employees and social security institutions were paid in accordance with the scheduled expiry dates. Other current payables include accrued liabilities and deferred income.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Deferred tax assets | 8,639 | 8,075 | 564 |
| Deferred tax liabilities | (3,939) | (4,697) | 758 |
| Net position | 4,700 | 3,378 | 1,372 |
The table below analyses the nature of the temporary differences that determine the recognition of deferred tax liabilities and assets and their changes during the year and the previous year.
| Non-current tangible and intangible assets |
Provisions and value adjustments |
Fair value of derivative instruments |
Goodwill | Tax incentives | Tax losses | Actuarial evaluation of post-employment benefit |
Other temporary differences |
Total | |
|---|---|---|---|---|---|---|---|---|---|
| 31.12.2020 | (3,461) | 1,397 | 46 | 1,240 | 2,645 | 396 | 208 | 907 | 3,378 |
| Through profit or loss | 1,389 | (107) | (11) | (177) | 1,455 | 612 | 0 | (194) | 2,967 |
| In shareholders' equity | 0 | 0 | 0 | 0 | 0 | 0 | (16) | 0 | (16) |
| Forex differences | 160 | (12) | 0 | 0 | (1,514) | (264) | 0 | 1 | (1,629) |
| 31.12.2021 | (1,912) | 1,278 | 35 | 1,063 | 2,586 | 744 | 192 | 714 | 4,700 |
Deferred tax assets recognised in the income statement in respect of "Non-current tangible and intangible assets" included €1,161 thousand in these consolidated financial statements as a result of the revaluation for tax purposes of the tangible assets of the Group's Turkish companies. The exercise of the revaluation option results in a substitute tax of approximately €106 thousand, which is accounted for in current taxes for the year.
Deferred tax assets relating to goodwill refer to the exemption of the value of the investment in Faringosi Hinges s.r.l. made in 2011 pursuant to Law Decree 98/2011, deductible in ten instalments starting in 2018. Deferred tax assets relating to tax incentives are commensurate to investments made in Turkey, for which the Group will benefit from a reduction in the effective tax rate in future years.
As required by the CONSOB memorandum of 28 July 2006, we disclose that the Group's net financial debt is as follows:
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| A. Cash | 43,217 | 12,802 | (443) |
| B. Cash equivalents | 432 | 516 | 45 |
| C. Other current financial assets | 1,172 | 1,495 | (320) |
| D. Liquidity (A+B+C) | 44,821 | 14,813 | (718) |
| E. Current financial payable | 5,551 | 23,181 | 6,961 |
| F. Current portion of non-current financial debt | 20,373 | 15,801 | 1,391 |
| G. Current financial debt (E+F) | 25,924 | 38,982 | 8,352 |
| H. Net current financial debt (G-D) | (18,897) | 24,169 | 9,070 |
| I. Non-current financial payable | 56,855 | 32,153 | 5,734 |
| J. Debt instruments | 29,649 | - | - |
| K. Trade payables and other non-current payables | - | - | - |
| L. Non-current financial debt (I+J+K) | 86,504 | 32,153 | 5,734 |
| M. Total financial debt (H+L) | 67,607 | 56,322 | 14,804 |
The consolidated statement of cash flows, which shows the changes in cash and cash equivalents (sum of letters A. and B. of this statement), describes in detail the cash flows that led to the change in the net financial debt. In particular, as can be seen from the Consolidated Statement of Cash Flows, the increase in net financial debt in the period is mainly attributable to:
In 2021, sales revenue totalled €263,259 thousand, up by €78,353 thousand (+42.4%) compared with 2020.
| 2021 | % | 2020 | % | % change | |
|---|---|---|---|---|---|
| Europe (excluding Turkey) | 92,935 | 35.3% | 69,618 | 37.7% | +33.5% |
| Turkey | 65,526 | 24.9% | 44,806 | 24.2% | +46.2% |
| North America | 30,472 | 11.6% | 22,700 | 12.3% | +34.2% |
| South America | 39,589 | 15.0% | 27,639 | 14.9% | +43.2% |
| Africa and Middle East | 19,614 | 7.5% | 12,177 | 6.6% | +61.1% |
| Asia and Oceania | 15,123 | 5.7% | 7,966 | 4.3% | +89.8% |
| Total | 263,259 | 100% | 184,906 | 100% | +42.4% |
| 2021 | % | 2020 | % | % change | |
|---|---|---|---|---|---|
| Gas parts | 182,468 | 69.3% | 129,834 | 70.2% | +40.5% |
| Hinges | 58,375 | 22.2% | 41,326 | 22.3% | +41.3% |
| Electronic components | 22,416 | 8.5% | 13,746 | 7.4% | +63.1% |
| Total | 263,259 | 100% | 184,906 | 100% | +42.4% |
In 2021, demand was solid in all markets, with particularly high peaks in the first half of the year. The increase in sales was very strong in all geographical areas, with peaks in Asia, Africa and the Middle East, indicating an increasingly global presence of our Group. In 2021, the increase in sales of electronic components was also particularly significant, continuing to benefit from cross-selling with the traditional products in the Group's portfolio and from the strong drive to develop new components.
Average sales prices in 2021 were 3% higher than in 2020.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Sale of trimmings | 5,546 | 2,909 | 2,637 |
| Contingent income | 374 | 999 | (625) |
| Rental income | 123 | 121 | 2 |
| Use of provisions for risks and charges |
12 | 94 | (82) |
| Other income | 2,606 | 3,071 | (465) |
| Total | 8,661 | 7,194 | 1,467 |
Other income mainly included: €1,234 thousand revenue from the sale of moulds and equipment, tax credits for investments in capital goods and for research and development of €356 thousand, Turkish public contributions of €332 thousand, referred to incentives for the hiring personnel, and €133 thousand related to the production of energy through photovoltaic plants.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Outsourced processing | 18,689 | 11,094 | 7,595 |
| Natural gas and power | 8,536 | 4,380 | 4,156 |
| Maintenance | 7,972 | 5,920 | 2,052 |
| Transport | 4,658 | 2,986 | 1,672 |
| Advisory services | 2,856 | 2,320 | 536 |
| Travel expenses and allowances |
292 | 219 | 73 |
| Commissions | 1,144 | 835 | 309 |
| Directors' fees | 829 | 693 | 136 |
| Insurance | 727 | 694 | 33 |
| Canteen | 797 | 560 | 237 |
| Other costs | 5,877 | 4,563 | 1,314 |
| Total | 52,377 | 34,264 | 18,113 |
| 2021 | 2020 | Change | |
|---|---|---|---|
| Commodities and outsourced components |
132,143 | 75,443 | 56,700 |
| Consumables | 10,212 | 7,523 | 2,689 |
| Total | 142,355 | 82,966 | 59,389 |
In 2021, the Group faced violent increases in the costs of its main raw materials (aluminium alloys, steel and brass), with a negative impact estimated at 6.2% of sales.
The main outsourced processing includes aluminium die-casting, hot moulding of brass and steel blanking as well as some mechanical processing and assembly. The increase in costs for outsourced processing reflects the increased use of subcontracting to cope with peaks in demand.
The increase in energy costs resulted, in addition to the increase in production volumes, from the extraordinary and sudden increase in electricity and gas prices in the second half of the year, which led to higher charges of €3.4 million. Other costs included expenses for the registration of patents, waste disposal, cleaning, leasing third-party assets and other minor charges.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Salaries and wages | 32,749 | 29,048 | 3,701 |
| Social Security costs | 10,175 | 8,831 | 1,344 |
| Temporary agency workers | 7,596 | 2,869 | 4,727 |
| Post-employment benefit and other costs |
2,639 | 2,294 | 345 |
| Stock Grant plan | 805 | 658 | 147 |
| Total | 53,964 | 43,700 | 10,264 |
The number of Group employees was 1,278 at 31 December 2021 (1,168 at 31 December 2020).
The number of temporary staff was 198 at 31 December 2021 (155 at 31 December 2020).
The item "Stock Grant Plan" included the measurement at 31 December 2021 of the fair value of options to the allocation of shares of the Parent Company assigned to Group employees. For details of the Stock Grant Plan, refer to Note 38.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Exercise of the C.M.I. put option (Note 15) |
507 | 1,137 | (630) |
| Adjustment to the fair value of the A.R.C. option |
- | 69 | (69) |
| Interest from bank current accounts |
227 | 155 | 72 |
| Other financial income | 16 | 5 | 11 |
| Total | 750 | 1,366 | (616) |
Financial income includes €507 thousand related to the difference between the fee actually paid and the carrying value of the second put option on the remaining 15.75% share of C.M.I. s.r.l. (Note 15).
In 2021, the Group reported net foreign exchange losses of €7,399 thousand, versus net losses of €4,812 thousand in 2020. The main portion of 2021 foreign exchange losses reflect the sudden devaluation of the Turkish lira and arise from the translation into lira (the currency in which the financial statements of the Group's Turkish companies are prepared) of trade and financial payables denominated in euro.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Non-income taxes | 651 | 692 | (41) |
| Other operating expenses | 694 | 524 | 170 |
| Contingent liabilities | 54 | 36 | 18 |
| Losses and write-downs of trade receivables |
103 | 118 | (15) |
| Provisions for risks | - | 576 | (576) |
| Other provisions | 29 | 35 | (6) |
| Total | 1,531 | 1,981 | (450) |
Non-income taxes chiefly relate to property tax.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Interest paid to banks | 598 | 1,002 | (404) |
| Interest paid on finance lease contracts |
138 | 112 | 26 |
| Banking expenses | 302 | 251 | 51 |
| Exercise of A.R.C. option (Note 15) |
69 | - | 69 |
| Adjustment to the Fair value of the C.M.I. option |
- | 750 | (750) |
| Other financial expense | 72 | 31 | 41 |
| Total | 1,179 | 2,146 | (967) |
Financial expenses include €69 thousand related to the difference between the carrying value of the put option related to the purchase of the remaining 30% share of A.R.C. s.r.l. and the fee actually paid (Note 15).
Interest paid to banks includes IRS spreads payable that hedge interest rate risks (Note 36).
| 2021 | 2020 | Change | |
|---|---|---|---|
| Current taxes for the year | 7,617 | 3,641 | 3,976 |
| Deferred tax assets and liabilities |
(2,967) | (4,259) | 1,292 |
| Taxes related to previous financial years |
347 | 767 | (420) |
| Total | 4,997 | 149 | 4,848 |
Reconciliation between the tax burden booked in the financial statements and the theoretical tax burden calculated according to the statutory tax rates currently in force in Italy is shown in the following table:
| 2021 | 2020 | |
|---|---|---|
| Theoretical income tax | 7,411 | 3,735 |
| Permanent tax differences | 113 | (192) |
| Taxes related to previous financial years | (151) | 767 |
| Tax effect from different foreign tax rates | 227 | 97 |
| Effect of non-recoverable tax losses | 105 | 150 |
| "Patent box" tax benefit | - | - |
| "Super and Iperammortamento" tax benefit | (844) | (812) |
| ACE tax benefit | (375) | - |
| Realignment between carrying values and tax values of properties (Note 21) | - | (1,360) |
| Revaluation of carrying values of fixed assets in Turkey | (1,161) | - |
| Tax incentives for investments in Turkey | (1,963) | (2,432) |
| Other differences | (164) | (441) |
| Income taxes booked in the accounts, excluding IRAP and withholding taxes (current and deferred) | 3,198 | (488) |
| IRAP (current and deferred) | 1,211 | 518 |
| Substitute tax on realignment of property values | 106 | 163 |
| Provision for tax risks | 500 | 0 |
| Tax credit on sanitisation costs | (18) | (44) |
| Total | 4,997 | 149 |
Theoretical taxes were calculated applying the current corporate income tax (IRES) rate, i.e. 24%, to the pre-tax result. IRAP is not taken into account for the purpose of reconciliation because, as it is a tax with a different assessment basis from pre-tax profit, it would generate distorting effects.
In these consolidated financial statements, the Group recognised:
• the tax benefits relating to "Superammortamento" (Super amortisation) and "Iperammortamento" (Hyper amortisation), related to the investments made in Italy, amounting to €844 thousand (€812 thousand in 2020);
• the tax benefits deriving from the investments made in Italy amounting to €1,963 thousand (€2,432 thousand in 2020).
Basic and diluted EPS are calculated based on the following data:
| EARNINGS | ||||
|---|---|---|---|---|
| (€/000) | 2021 | 2020 | ||
| Profit for the year | 23,903 | 13,961 | ||
| NUMBER OF SHARES | ||||
| 2021 | 2020 | |||
| Weighted average number of ordinary shares for determining basic earnings per share | 11,209,078 | 11,260,791 | ||
| Dilutive effect from potential ordinary shares | - | - | ||
| Weighted average number of ordinary shares for determining diluted earnings per share | 11,209,078 | 11,260,791 | ||
| EARNINGS PER SHARE | ||||
| (in €) | 2021 | 2020 | ||
| Basic earnings per share | 2.132 | 1.240 | ||
| Diluted earnings per share | 2.132 | 1.240 |
Basic earnings per share are calculated on the average number of outstanding shares minus treasury shares, equal to 324,372 in 2021 (272,659 in 2020).
Diluted earnings per share are calculated taking into account any shares approved but not yet subscribed.
On 2 June 2021, shareholders were paid an ordinary dividend of €0.55 per share (total dividends of €6,172 thousand).
The Directors have recommended payment of a dividend of €0.60 per share this year. This dividend is subject to approval of shareholders in the annual Shareholders' Meeting and was not included under liabilities in these financial statements.
The dividend proposed is scheduled for payment on 1 June 2022 (ex-date 30 May and record date 31 May).
Information by business segment for 2021 and 2020 is provided below.
| 2021 FY | ||||||||
|---|---|---|---|---|---|---|---|---|
| Gas parts (household and professional) |
Hinges | Electronic components | Total | |||||
| Sales | 182,618 | 58,671 | 21,970 | 263,259 | ||||
| Ebit | 23,649 | 6,292 | 7,567 | 37,508 | ||||
| 2020 FY | ||||||||
| Gas parts (household and professional) |
Hinges | Electronic components | Total | |||||
| Sales | 129,864 | 41,078 | 13,964 | 184,906 | ||||
| Ebit | 12,683 | 2,999 | 4,411 | 20,093 |
In accordance with IFRS 7, a breakdown of the financial instruments is shown below, among the categories set forth in IAS 39:
| 31.12.2021 | 31.12.2020 | |
|---|---|---|
| Financial assets | ||
| Amortised cost | ||
| Cash and cash equivalents | 43,649 | 13,318 |
| Term bank deposits | 1,172 | 1,233 |
| Trade receivables and other receivables | 72,276 | 67,121 |
| Hedge accounting | ||
| Derivatives to hedge cash flows | - | 262 |
| Financial liabilities | ||
| Amortised cost | ||
| Loans | 110,909 | 62,646 |
| Other financial liabilities | 1,173 | 1,233 |
| Trade payables | 54,837 | 41,773 |
| Fair Value through profit or loss | ||
| Put option on A.R.C. (Note 15) | - | 1,581 |
| C.M.I. put option (Note 15) | - | 5,250 |
| Derivatives to hedge cash flows | 190 | 425 |
| Hedge accounting | ||
| Derivatives to hedge cash flows | 156 | 262 |
The Group is exposed to financial risks related to its operations, mainly:
It is part of the Sabaf Group's policies to hedge exposure to changes in prices and in fluctuations in exchange and interest rates via derivative financial instruments. Hedging is done using forward contracts, options or combinations of these instruments. Generally speaking, the maximum duration covered by such hedging does not exceed 18 months. The Group does not enter into speculative transactions. When the derivatives used for hedging purposes meet the necessary requisites, hedge accounting rules are followed.
Trade receivables involve producers of domestic appliances, multinational groups and smaller manufacturers in a few or single markets. The Group assesses the creditworthiness of all its customers at the start of supply and systemically at least on an annual basis. After this assessment, each customer is assigned a credit limit.
The Group factors receivables with factoring companies based on without recourse agreements, thereby transferring the related risk. A credit insurance policy is in place, which guarantees cover for approximately 35% of trade receivables.
Credit risk relating to customers operating in emerging economies is generally attenuated by the expectation of revenue through letters of credit.
The key currencies other than the euro to which the Group is exposed are the US dollar, the Brazilian real and the Turkish lira, in relation to sales made in dollars (chiefly on some Asian and American markets) and the production units in Brazil and Turkey. Sales in US dollars represented 18.6% of total turnover in 2021, while purchases in dollars represented 4.8% of total turnover. During the year, operations in dollars were partially hedged through forward sales contracts. At 31 December 2021, the Group had in place forward sales contracts of USD 8 million, maturing in December 2022 at an average exchange rate of 1.1615. With reference to these contracts, the Group applies hedge accounting, checking compliance with IFRS 9.
The table below shows the balance sheet and income statement effects of forward sales contracts recognised under hedge accounting.
| (amounts in €/000) | 2021 |
|---|---|
| Reduction in financial assets | (262) |
| Increase in current financial liabilities | (156) |
| Adjustment to the Cash Flow Hedge reserve (equity reserve) | 398 |
| Negative impact through profit or loss | 20 |
The following table shows the characteristics of the derivative financial instruments described in the previous paragraph.
| EXCHANGE RATE RISK MANAGEMENT: CASH FLOW HEDGE IN ACCORDANCE WITH IFRS 9 ON COMMERCIAL TRANSACTIONS | |||||||
|---|---|---|---|---|---|---|---|
| Company | Counterparty | Instrument | Maturity | Value date | Notional | Fair value hierarchy | |
| 28/03/2022 | 500,000 | ||||||
| 27/06/2022 | 500,000 | ||||||
| Sabaf S.p.A. | Unicredit | Forward | 28/06/2022 | USD | 500,000 | ||
| 27/09/2022 | 500,000 | 2 | |||||
| 27/12/2022 | 500,000 | ||||||
| 28/03/2022 | USD | 500,000 | |||||
| Faringosi Hinges s.r.l. |
BPER Banca | Forward | 28/06/2022 | 500,000 | |||
| 28/09/2022 | 500,000 | ||||||
| 05/01/2022 | 500,000 | ||||||
| C.M.I. s.r.l. | Forward | 10/01/2022 | USD | 500,000 | |||
| BPER Banca | 06/04/2022 | 1,000,000 | |||||
| 06/07/2022 | 1,500,000 |
With reference to financial assets and liabilities in US dollars at 31 December 2021, a hypothetical and immediate revaluation of 10% of euro against the dollar would have led to a loss of €1,515 thousand.
The net value of assets and liabilities in foreign subsidiaries constitutes an investment in foreign currency, which generates a translation difference on consolidation of the Group, with an impact on the comprehensive income statement and the financial position. A 10% upward or downward change in the value of each currency against the euro would affect the Group's equity by approximately +/- €5.5 million at the end of 2021.
Owing to the current trend in interest rates, the Group favours fixedrate indebtedness: medium to long-term loans originated at a variable rate are converted to a fixed rate by entering into interest rate swaps (IRS) when the loan is opened. At 31 December 2021, IRS totalling €37.5 million were in place, mirrored in mortgages with the same residual debt, through which the Group transformed the floating rate of the mortgages into fixed rate. The derivative contracts were not designated as a cash flow hedge and were therefore recognised using the "fair value through profit or loss" method.
The following table shows the characteristics of the derivative financial instruments described in the previous paragraph.
| Company | Counterparty | Instrument | Maturity | Value date | Notional | Fair value hierarchy |
|---|---|---|---|---|---|---|
| MPS | 30/06/2023 | 1,500,000 | ||||
| Intesa Sanpaolo | 15/06/2024 | EUR | 6,000,000 | |||
| Sabaf S.p.A. | Intesa Sanpaolo | 15/06/2024 | 1,850,000 | |||
| Crédit Agricole | IRS | 30/06/2025 | 9,000,000 | 2 | ||
| Mediobanca | 28/04/2027 | 15,000,000 | ||||
| Sabaf Turkey | Intesa Sanpaolo | 17/06/2024 | 4,150,000 |
Considering the IRS in place, at the end of 2021 almost all of the Group's financial debt was at a fixed rate. Therefore, at 31 December
A significant portion of the Group's purchase costs is represented by aluminium, steel and brass. Metal prices rose sharply during 2021, forcing the Group to renegotiate sales prices several times to compensate for the increase in costs. Based on market conditions and contractual agreements, the Group may not be able to pass on changes in raw material prices to customers in a timely and/or complete manner, with consequent effects on margins. The Group also protects itself from the risk of changes in the price of aluminium, steel and brass with supply contracts signed with suppliers for delivery up to twelve months in advance or, alternatively, with derivative financial instruments. In 2021 and 2020, the Group did not use financial derivatives on commodities.
2021 no sensitivity analysis was carried out in that the exposure to interest rate risk, linked to a hypothetical increase (decrease) in interest rates, is not significant.
The Group operates with a debt ratio considered physiological (net financial debt/shareholders' equity at 31 December 2021 of 55.2%, net financial debt/EBITDA of 1.25) and has unused short-term lines of credit. To minimise the risk of liquidity, the Administration and Finance Department:
An analysis by expiry date of financial payables at 31 December 2021 and 31 December 2020 is shown below:
| At 31 December 2021 | Carrying value | Contractual cash flows |
Within 3 months | From 3 months to 1 year |
From 1 to 5 years | More than 5 years |
|---|---|---|---|---|---|---|
| Short-term bank loans | 4,378 | 4,378 | 4,378 | - | - | - |
| Unsecured loans | 72,957 | 74,574 | 1,906 | 17,720 | 49,273 | 5,675 |
| Bond issues | 29,649 | 34,440 | - | 555 | 2,220 | 31,665 |
| Finance leases | 4,271 | 4,766 | 361 | 1,058 | 2,793 | 554 |
| Payables to C.M.I. shareholders | 1,173 | 1,173 | - | 1,173 | - | - |
| Total financial payables | 112,428 | 119,331 | 6,645 | 20,506 | 54,286 | 37,894 |
| Trade payables | 54,837 | 54,837 | 51,218 | 3,619 | - | - |
| Total | 167,265 | 174,168 | 57,863 | 24,125 | 54,286 | 37,894 |
| At 31 December 2020 | Carrying value | Contractual cash flows |
Within 3 months | From 3 months to 1 year |
From 1 to 5 years | More than 5 years |
|---|---|---|---|---|---|---|
| Short-term bank loans | 13,727 | 13,727 | 13,727 | - | - | - |
| Unsecured loans | 44,448 | 45,211 | 2,074 | 14,022 | 29,115 | - |
| Finance leases | 4,896 | 5,143 | 383 | 1,125 | 3,206 | 429 |
| Payables to A.R.C. shareholders | 60 | 60 | - | 60 | - | - |
| Payables to C.M.I. shareholders | 1,173 | 1,173 | - | 1,173 | - | - |
| A.R.C. option | 1,581 | 1,581 | - | 1,581 | - | - |
| C.M.I. option | 5,250 | 5,250 | - | 5,250 | - | - |
| Total financial payables | 71,135 | 72,145 | 16,184 | 23,211 | 32,321 | 429 |
| Trade payables | 41,773 | 41,773 | 38,503 | 3,270 | - | - |
| Total | 112,908 | 113,918 | 54,687 | 26,481 | 32,321 | 429 |
The various due dates are based on the period between the end of the reporting period and the contractual expiry date of the commitments, the values indicated in the table correspond to non-discounted cash flows. Cash flows include the shares of principal and interest; for floating rate liabilities, the shares of interest are determined based on the value of the reference parameter at the end of the reporting period and increased by the spread set forth in each contract.
The revised IFRS 7 requires that financial instruments reported in the statement of financial position at fair value be classified based on a hierarchy that reflects the significance of the input used in determining the fair value. IFRS 7 makes a distinction between the following levels:
The following table shows the financial assets and liabilities valued at fair value at 31 December 2021, by hierarchical level of fair value assessment.
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| Other financial liabilities (interest rate derivatives) | - | 190 | - | 190 |
| Total liabilities | - | 190 | - | 190 |
Transactions between consolidated companies were derecognised from the consolidated financial statements and are not reported in these notes. The table below illustrates the impact of all transactions between the Group and other related parties on the balance sheet and income statement.
| Total 2021 |
Non-consolidated subsidiaries |
Other related parties |
Total related parties | Impact on the total | |
|---|---|---|---|---|---|
| Trade payables | 54,837 | - | 4 | 4 | 0.01% |
| Total 2020 |
Non-consolidated subsidiaries |
Other related parties |
Total related parties | Impact on the total | |
|---|---|---|---|---|---|
| Trade payables | 41,773 | - | 4 | 4 | 0.01% |
| Total 2021 |
Non-consolidated subsidiaries |
Other related parties |
Total related parties | Impact on the total | |
|---|---|---|---|---|---|
| Services | (52,377) | - | (22) | (22) | 0.04% |
| Total 2020 |
Non-consolidated subsidiaries |
Other related parties |
Total related parties | Impact on the total | |
|---|---|---|---|---|---|
| Services | (34,264) | - | (22) | (22) | 0.06% |
Transactions are regulated by specific contracts regulated at arm's length conditions.
Please see the 2021 Report on Remuneration for this information.
Two Stock Grant plans are in place, namely the 2018 - 2020 Stock Grant Plan and the 2021 - 2023 Stock Grant Plan. The Plans aim to promote and pursue the involvement of the beneficiaries whose activities are considered relevant for the implementation of the contents and the achievement of the objectives set out in the Business Plan, foster loyalty development and motivation of managers, by increasing their entrepreneurial approach as well as align the interests of management with those of the Company's shareholders more closely, with a view to encouraging the achievement of significant results in the economic and asset growth and sustainability of the Company and of the Group.
The Plan was approved by the Shareholders' Meeting on 8 May 2018 and the related Regulations by the Board of Directors on 15 May 2018, subsequently amended as on 14 May 2019.
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 370,000 Options, each of which entitles them to receive free of charge, under the terms and conditions provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share. The free allocation of Sabaf S.p.A. shares is conditional, among other things, on the achievement, in whole or in part of the business objectives related to the ROI, EBITDA and TSR indicators and, for a share not exceeding 30%, of individual objectives, on a progressive basis.
The Plan is intended for persons who hold or will hold key positions in the Company and/or its Subsidiaries, with reference to the implementation of the contents and the achievement of the objectives of the 2018 - 2020 Business Plan.
The Beneficiaries were divided into two groups:
The 2018 - 2020 Plan expires on 31 December 2022.
With reference to Cluster 1, based on the level of achievement of the objectives and the other conditions set out in the Plan, 34,946 rights accrued, therefore 34,946 shares have been allocated to the Beneficiaries during 2021.
With regard to Cluster 2, based on the level of achievement of the objectives set out in the Plan, 114,074 rights accrued. The allocation of the relevant shares will be made during 2022 and is conditional on the continuation of the employment relationship with the Beneficiaries at the date of approval of the financial statements for the year 2021 of Sabaf S.p.A..
The Group's shareholders' equity includes the Stock Grant reserve (Note 13), which includes €896 thousand for the fair value measurement of the Rights assigned to Cluster 2 beneficiaries. Please see the explanatory notes to the consolidated financial statements at 31 December 2020 for an explanation of how to determine the fair value of these rights.
The plan was approved by the Shareholders' Meeting on 6 May 2021 and the related Regulations by the Board of Directors on 13 May 2021.
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 260,000 Options, each of which entitles them to receive free of charge, under the terms and conditions provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share. The free allocation of Sabaf S.p.A. shares is conditional on the achievement, in whole or in part, with progressiveness, of the business targets related to the ROI and EBITDA and social and environmental targets.
The Plan is intended for persons who hold or will hold key positions in the Company and/or its Subsidiaries, with reference to the implementation of the contents and the achievement of the objectives of the 2021 - 2023 Business Plan. A total of 226,000 Rights were allocated to the Beneficiaries already identified.
The 2021 - 2023 Plan expires on 31 December 2024.
In connection with this Plan, €805 (Note 27) were recognised in personnel costs during the year (Note 27), an equity reserve of the same amount (Note 13) was recognised as a balancing entry.
In line with the date on which the beneficiaries became aware of the assignment of the rights and terms of the plan, the grant date was set at 13 May 2021.
The main assumptions made at the beginning of the vesting period and the methods for determining the fair value at the end of the reporting period are illustrated below. The following economic and financial parameters were taken into account in determining the fair value per share at the start of the vesting period:
| Share price on grant date adjusted for dividends |
23.09 |
|---|---|
| Dividend yield | 2.60% |
| Expected volatility per year | 28% |
| Interest rate per year | -0.40% |
Based on the exercise right at the different dates established by the Plan Regulations and on the estimate of the expected probability of achieving the objectives for each reference period, the unitary fair value at 31 December 2021 was determined as follows:
| RIGHTS RELATING TO BUSINESS OBJECTIVES | Total value on ROI | 15.82 | |||
|---|---|---|---|---|---|
| MEASURED ON ROI | Rights on ROI | 35% | Fair value | 5.54 | |
| RIGHTS RELATING TO BUSINESS OBJECTIVES MEASURED ON EBITDA |
Total value on EBITDA | 16.43 | |||
| Rights on EBITDA | 40% | Fair value | 6.57 | ||
| RIGHTS RELATING TO ESG OBJECTIVES | Total value on "Personell training" |
20.41 | |||
| MEASURED ON PERSONELL TRAINING | Rights on "Personell training" |
5% | Fair value | 1.02 | |
| RIGHTS RELATING TO ESG OBJECTIVES | Total value on "Safety indicator" |
7.82 | |||
| MEASURED ON SAFETY INDICATOR | Rights on "Safety indicator" |
5% | Fair value | 0.39 | |
| RIGHTS RELATING TO ESG OBJECTIVES | Total value on "Emissions reduction" |
20.41 | |||
| MEASURED ON EMISSIONS REDUCTION | Rights on "Emissions reduction" |
15% | Fair value | 3.06 | |
| 16.58 |
For the purposes of managing the Group's capital, it has been defined that this includes the issued share capital, the share premium reserve and all other capital reserves attributable to the shareholders of the Parent Company. The main objective of capital management is to maximise the value for shareholders. In order to maintain or correct its financial structure, the Group may intervene in dividends paid to shareholders, purchase its own shares, redeem capital to shareholders or issue new shares. The Group controls equity using a gearing ratio consisting of the ratio of net financial debt (as defined in Note 22) to shareholders' equity. The Group's policy is to keep this ratio below 1. In order to achieve this objective, the management of the Group's capital aims, among other things, to ensure that the covenants, linked to loans, which define the capital structure requirements, are complied with. Violations of covenants would allow the lenders to demand immediate repayment of loans (Note 14). During the current financial year, there were no breaches of the covenants linked to loans.
In the years ended 31 December 2021 and 2020, no changes were made to the objectives, policies and procedures for capital management.
Pursuant to CONSOB memorandum of 28 July 2006, the following section describes and comments on significant non-recurring events, the consequences of which are reflected in the economic, equity and financial results for the year:
| Group shareholders' equity |
Group net profit | Net financial debt | Cash flows | |
|---|---|---|---|---|
| Financial statement values (A) | 121,525 | 23,903 | 67,607 | 30,331 |
| Revaluation of tax values of properties (a) | (728) | (1,055) | 0 | 0 |
| Recognition of tax benefits on investments made in Turkey (b) |
(1,512) | (1,963) | (508) | (508) |
| Provision for tax risks (c) | 500 | 500 | 0 | 0 |
| Total non-recurring operations (B) | (1,740) | (2,518) | (508) | (508) |
| Financial statement notional value (A+B) | 119,785 | 21,385 | 67,099 | 29,823 |
In these consolidated financial statements, the Group recognised under income taxes:
The recent conflict between Ukraine and Russia led to a sudden change in the global economic scenario. Although the Group has a non-significant direct exposure to the markets of Russia, Belarus and Ukraine, it is exposed to indirect effects on the price trends of raw materials, electricity and gas, the supply chain and final demand. To date, these effects are not quantifiable as they are related to future developments in the conflict, the outcome of which cannot be determined.
Pursuant to CONSOB memorandum of 28 July 2006, the Group declares that no atypical and/or unusual transactions as defined by the CONSOB memorandum were executed during 2021.
The Sabaf Group has issued sureties to guarantee consumer and mortgage loans granted by banks to Group employees for a total of €3,443 thousand (€3,632 thousand at 31 December 2020).
| COMPANIES CONSOLIDATED USING THE FULL LINE-BY-LINE CONSOLIDATION METHOD | |||||
|---|---|---|---|---|---|
| Company name | Registered offices | Share capital | Shareholders | % ownership | |
| Faringosi Hinges s.r.l. | Ospitaletto (BS) | EUR 90,000 | Sabaf S.p.A. | 100% | |
| Sabaf do Brasil Ltda. | Jundiaí - São Paulo (Brazil) | BRL 53,348,061 | Sabaf S.p.A. | 100% | |
| Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki (Sabaf Turkey) |
Manisa (Turkey) | TRY 80,000,000 | Sabaf S.p.A. | 100% | |
| Okida Elektronik Sanayi ve Ticaret A.S. | Istanbul (Turkey) | TRY 5,000,000 | Sabaf S.p.A. Sabaf Turkey |
30% 70% |
|
| Sabaf Appliance Components Ltd. | Kunshan (China) | EUR 7,900,000 | Sabaf S.p.A. | 100% | |
| Sabaf US Corp. | Plainfield (USA) | USD 200,000 | Sabaf S.p.A. | 100% | |
| Sabaf India Private Limited | Bangalore (India) | INR 153,833,140 | Sabaf S.p.A. | 100% | |
| A.R.C. s.r.l. | Campodarsego (PD) | EUR 45,000 | Sabaf S.p.A. | 100% | |
| Handan A.R.C. Burners Co., Ltd. | Handan (China) | RMB 3,000,000 | A.R.C. s.r.l. | 51% | |
| Sabaf Mexico Appliance Components | San Louis Potosì (Mexico) | USD 3,650,000 | Sabaf S.p.A. | 100% | |
| C.M.I. Cerniere Meccaniche Industriali s.r.l | Valsamoggia (BO) | EUR 1,000,000 | Sabaf S.p.A. | 100% | |
| C.G.D. s.r.l. | Valsamoggia (BO) | EUR 26,000 | C.M.I. s.r.l. | 100% |
| Name of the parent company |
Sabaf S.p.A. |
|---|---|
| Legal status | Joint-stock company (S.p.A.) |
| Domicile of entity | Italy |
| Registered and administrative office |
Via dei Carpini, 1 – 25035 Ospitaletto (BS) - Italy |
| Main place of business | Via dei Carpini, 1 – 25035 Ospitaletto (BS) - Italy |
| Country of registration | Italy |
| Tax information |
R.E.A. Brescia 347512 |
|---|---|
| -------------------- | ----------------------- |
Tax Code 03244470179
VAT number 01786910982
| Contacts | Tel: +39 030 - 6843001 |
|---|---|
| Fax: +39 030 - 6848249 | |
| E-mail: [email protected] | |
| Web site: www.sabafgroup.com |
The purpose of the company is the design, production and sale of gas fittings and burners, thermostats, safety valves, other components and accessories for household appliances, as well as sanitary and plumbing fittings in general. The purpose of the company is also the design, construction and trade of machine tools, automation systems in general and related equipment, tools, as well as the provision of related maintenance, repair, support and business organisation services. The company, within the limits set by the relevant regulations in force, may carry out any other security, property, industrial and commercial transaction that is deemed necessary, appropriate or useful for the achievement of the company purpose. It may acquire shareholdings in other companies whose purpose is similar or related to its own as well as provide personal guarantees or collaterals including mortgages also for third parties' obligations provided that such activities do not take precedence over the company's business and are not carried out vis-à-vis the public and therefore within the limits and in the manner provided for by Legislative Decree No. 385/93; the company can perform the management and coordination function with regard to its subsidiaries, providing the organisational, technical, managerial and financial support and coordination deemed appropriate. However, the activities reserved to investment companies under Legislative Decree No. 415/96, and pursuant to the relevant provisions in force, are excluded.
The following table, prepared pursuant to Art. 149-duodecies of the CONSOB Issuers' Regulation, shows fees relating to 2021 for auditing and for services other than auditing provided by the Independent Auditors and their network.
| (in thousands of Euro) | Party providing the service | Recipient | Fees pertaining to the 2021 financial year |
|---|---|---|---|
| EY S.p.A. | Parent company | 35 | |
| Audit | EY S.p.A. | Italian subsidiaries | 41 |
| EY network | Foreign subsidiaries | 54 | |
| EY S.p.A. | Parent company | 331 | |
| Other services | EY S.p.A. | Italian subsidiaries | 42 |
| Total | 167 |
in accordance with Art. 154 bis of Legislative Decree 58/98
Pietro Iotti, the Chief Executive Officer, and Gianluca Beschi, the Financial Reporting Officer of Sabaf S.p.A., have taken into account the requirements of Art. 154-bis, paragraphs 3 and 4, of Legislative Decree 58 of 24 February 1998 and can certify:
of the administrative and accounting procedures for the formation of the consolidated financial statements during the 2021 financial year.
They also certify that:
Ospitaletto, 22 March 2022
Chief Executive Officer Pietro Iotti
The Financial Reporting Officer Gianluca Beschi
| Key Audit Matter | Audit Responses | |
|---|---|---|
Honorary Chairman Giuseppe Saleri
| Chairman | Claudio Bulgarelli |
|---|---|
| Vice Chairman* | Nicla Picchi |
| Chief Executive Officer | Pietro Iotti |
| Director | Gianluca Beschi |
| Director | Cinzia Saleri |
| Director | Alessandro Potestà |
|---|---|
| Director* | Carlo Scarpa |
| Director* | Daniela Toscani |
| Director* | Stefania Triva |
* Independent directors
Board of Statutory Auditors Independent Auditors
| Chairman | Alessandra Tronconi |
|---|---|
| Statutory Auditor | Maria Alessandra Zunino de Pignier |
| Statutory Auditor | Mauro Vivenzi |
EY S.p.A.
| (in €) | Notes | 31.12.2021 | 31.12.2020 |
|---|---|---|---|
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Property, plant and equipment | 1 | 48,593,970 | 48,662,264 |
| Investment property | 2 | 2,311,476 | 3,252,696 |
| Intangible assets | 3 | 3,778,108 | 2,315,819 |
| Equity investments | 4 | 84,512,138 | 65,524,289 |
| Non-current financial assets | 5 | 10,707,311 | 5,537,324 |
| - of which from related parties | 35 | 10,707,311 | 5,537,324 |
| Non-current receivables | 31,853 | 31,421 | |
| Deferred tax assets | 21 | 3,322,620 | 3,891,955 |
| TOTAL NON-CURRENT ASSETS | 129,215,768 | ||
| CURRENT ASSETS | 153,257,475 | ||
| Inventories | 6 | ||
| Trade receivables | 7 | 33,985,939 | 21,512,333 |
| - of which from related parties | 35 | 45,194,276 15,210,599 |
45,024,596 16,048,130 |
| Tax receivables | 8 | 1,462,789 | 1,254,041 |
| - of which from related parties | 35 | 766,557 | 316,208 |
| Other current receivables | 9 | 1,929,121 | 1,947,372 |
| Current financial assets | 10 | 1,172,947 | 1,359,993 |
| Cash and cash equivalents | 11 | 29,733,148 | 1,594,861 |
| TOTAL CURRENT ASSETS | 113,478,220 | 72,693,196 | |
| ASSETS HELD FOR SALE | 0 | 0 | |
| TOTAL ASSETS | 266,735,695 | 201,908,964 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| SHAREHOLDERS' EQUITY | |||
| Share capital | 12 | 11,533,450 | 11,533,450 |
| Retained earnings, Other reserves | 92,831,829 | 91,985,093 | |
| Profit for the year | 10,043,877 | 6,409,674 | |
| TOTAL SHAREHOLDERS' EQUITY | 114,409,156 | 109,928,218 | |
| NON-CURRENT LIABILITIES | |||
| Loans | 14 | 82,515,298 | 26,891,000 |
| Other financial liabilities | 15 | 0 | 0 |
| Post-employment benefit and retirement provisions | 16 | 1,779,634 | 1,929,190 |
| Provisions for risks and charges | 17 | 851,081 | 853,650 |
| Deferred tax liabilities | 21 | 323,942 | 230,450 |
| Total non-current liabilities | 85,469,955 | 29,904,290 | |
| CURRENT LIABILITIES | |||
| Loans | 14 | 19,010,029 | 23,996,484 |
| Other financial liabilities | 15 | 1,393,611 | 1,560,111 |
| Trade payables | 18 | 33,677,766 | 26,204,071 |
| - of which to related parties | 35 | 1,533,149 | 1,074,716 |
| Tax payables | 19 | 3,374,435 | 2,458,942 |
| - of which to related parties | 35 | 54,720 | 350,721 |
| Other payables | 20 | 9,400,743 | 7,856,847 |
| TOTAL CURRENT LIABILITIES | 66,856,584 | 48,646,143 | |
| LIABILITIES HELD FOR SALE | 0 | 0 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 266,735,695 | 201,908,964 |
| (in €) | Notes | 2021 | 2020 |
|---|---|---|---|
| INCOME STATEMENT COMPONENTS | |||
| OPERATING REVENUE AND INCOME | |||
| Revenue | 23 | 144,033,787 | 102,583,189 |
| - of which from related parties | 35 | 20,212,450 | 15,221,230 |
| Other income | 24 | 6,195,079 | 5,647,168 |
| TOTAL OPERATING REVENUE AND INCOME | 150,228,866 | 108,230,357 | |
| OPERATING COSTS | |||
| Materials | 25 | (72,122,067) | (43,270,717) |
| - of which by related parties | 3,315,935 | 1,935,572 | |
| Change in inventories | 12,473,605 | 1,650,153 | |
| Services | 26 | (34,254,138) | (22,208,703) |
| - of which by related parties | 35 | (446,675) | (457,769) |
| Personnel costs | 27 | (34,780,110) | (28,567,152) |
| Other operating costs | 28 | (727,503) | (1,307,048) |
| Costs for capitalised in-house work | 2,259,389 | 1,293,579 | |
| TOTAL OPERATING COSTS | (127,150,823) | (92,409,888) | |
| OPERATING PROFIT BEFORE DEPRECIATION AND AMORTISATION, CAPITAL GAINS/LOSSES, WRITE-DOWNS/WRITE-BACKS OF NON-CURRENT ASSETS |
23,078,043 | 15,820,469 | |
| Depreciations and amortisation | 1,2,3 | (9,179,378) | (9,414,020) |
| Capital gains/(losses) on disposal of non-current assets | 238,136 | 964,788 | |
| Write-downs/write-backs of non-current assets | 4 | (300,000) | (761,407) |
| - of which by related parties | (300,000) | (620,000) | |
| EBIT | 13,836,801 | 6,609,830 | |
| Financial income | 318,425 | 201,591 | |
| - of which from related parties | 255,441 | 176,889 | |
| Financial expenses | 29 | (530,464) | (717,703) |
| Exchange rate gains and losses | 30 | 426,824 | (398,970) |
| Profits and losses from equity investments | 31 | 175,504 | 609,252 |
| - of which from related parties | 175,504 | 609,252 | |
| PROFIT BEFORE TAXES | 14,227,088 | 6,304,001 |
| PROFIT FOR THE YEAR | 10,043,877 | 6,409,674 |
|---|---|---|
Income taxes 32 (4,183,212) 105,674
| (in €) | 2021 | 2020 |
|---|---|---|
| PROFIT FOR THE YEAR | 10,043,877 | 6,409,674 |
| Total profits/losses that will not be subsequently reclassified under profit (loss) for the year |
||
| Actuarial evaluation of post-employment benefit | 3,334 | (31,418) |
| Tax effect | (800) | 7,540 |
| Total profits/losses that will not be subsequently reclassified under profit (loss) for the year |
||
| Hedge accounting for derivative financial instruments | (198,499) | 0 |
| TOTAL OTHER PROFITS/(LOSSES) NET OF TAXES FOR THE YEAR | (195,965) | (23,878) |
| TOTAL PROFIT | 9,847,912 | 6,385,796 |
| (€/000) | Share Capital |
Share premium reserve |
Legal reserve |
Treasury shares |
Actuarial evaluation of post-employment benefit provision |
Other reserves |
Profit for the year |
Total shareholders' equity |
|---|---|---|---|---|---|---|---|---|
| Balance at 31 December 2019 | 11,533 | 10,002 | 2,307 | (2,268) | (505) | 83,864 | 3,822 | 108,755 |
| Allocation of 2019 profit | 3,822 | (3,822) | 0 | |||||
| 2020 dividend payment | (3,924) | (3,924) | ||||||
| Purchase of treasury shares | (2,073) | (2,073) | ||||||
| Stock Grant plan (IFRS 2) | 658 | 658 | ||||||
| Hedge accounting reserve | 127 | 127 | ||||||
| Total profit at 31 December 2020 | (24) | 6,409 | 6,385 |
| Balance at 31 December 2020 | 11,533 | 10,002 | 2,307 | (4,341) | (529) | 84,547 | 6,409 | 109,928 |
|---|---|---|---|---|---|---|---|---|
| Allocation of 2020 profit: | ||||||||
| - Payment of dividends | (6,172) | (6,172) | ||||||
| - To the extraordinary reserve | 237 | (237) | 0 | |||||
| Stock Grant plan (IFRS 2) | 805 | 805 | ||||||
| Treasury share transactions | 437 | (437) | 0 | |||||
| Total profit at 31 December 2021 | 2 | (198) | 10,044 | 9,848 |
| Balance at 31 December 2021 | 11,533 | 10,002 | 2,307 | (3,904) | (526) | 84,953 | 10,044 | 114,409 |
|---|---|---|---|---|---|---|---|---|
| (€/000) | 2021 FY | 2020 FY |
|---|---|---|
| Cash and cash equivalents at beginning of year | 1,595 | 8,343 |
| Profit for the year | 10,044 | 6,410 |
| Adjustments for: | ||
| - Depreciations and amortisation | 9,179 | 9,414 |
| - Realised gains | (238) | (965) |
| - Write-downs of non-current assets | 300 | 761 |
| - Profits and losses from equity investments | (176) | (609) |
| - Valuation of the Stock Grant plan | 805 | 657 |
| - Net financial income and expenses | 212 | 516 |
| - Non-monetary foreign exchange differences | (340) | (199) |
| - Income tax | 4,183 | (106) |
| Change in post-employment benefit | (147) | (166) |
| Change in risk provisions | 3 | 569 |
| Change in trade receivables | (170) | (16,461) |
| Change in inventories | (12,474) | (1,650) |
| Change in trade payables | 7,474 | 10,470 |
| Change in net working capital | (5,170) | (7,642) |
| Change in other receivables and payables, deferred taxes | 487 | 1,599 |
| Payment of taxes | (1,738) | (141) |
| Payment of financial expenses | (530) | (710) |
| Collection of financial income | 318 | 201 |
| Cash flows from operations | 17,187 | 9,590 |
| Investments in non-current assets | ||
| - intangible | (1,934) | (383) |
| - tangible | (9,288) | (7,652) |
| - financial | (19,288) | (8,974) |
| Disposal of non-current assets | 2,103 | 3,628 |
| Cash flow absorbed by investments | (28,407) | (13,381) |
| Free cash flow | (11,220) | (3,791) |
| Repayment of loans | (23,032) | (11,982) |
| Raising of loans | 73,229 | 12,811 |
| Change in financial assets | (4,842) | 1,602 |
| Purchase/Sale of treasury shares | - | (2,073) |
| Payment of dividends | (6,172) | (3,924) |
| Collection of dividends | 175 | 609 |
| Cash flow absorbed by financing activities | 39,358 | (2,957) |
| Total cash flows | 28,138 | (6,748) |
| Cash and cash equivalents at end of year (Note 11) | 29,733 | 1,595 |
The separate financial statements of Sabaf S.p.A. for the financial year 2021 have been prepared in compliance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and adopted by the European Union. Reference to IFRS also includes all current International Accounting Standards (IAS).
The separate financial statements are drawn up in euro, which is the currency in the economy in which the Company operates. The income statement, the comprehensive income statement and the statement of financial position schedules are prepared in euro, while the statement of cash flows, the statement of changes in shareholders' equity and the values reported in the explanatory notes are in thousands of euro.
The financial statements have been prepared on a historical cost basis except for some revaluations of property, plant and equipment undertaken in previous years, and are considered a going concern. With reference to this assumption, the Company assessed that it is a going concern (as defined by paragraphs 25 and 26 of IAS 1), also due to the strong competitive position, high profitability and solidity of the financial structure. Sabaf S.p.A., as the Parent Company, also prepared the consolidated financial statements of the Sabaf Group at 31 December 2021.
The Company adopted the following formats:
Use of these formats permits the most meaningful representation of the Company's capital, business and financial status.
The accounting standards and policies applied for the preparation of the separate financial statements at 31 December 2021, unchanged versus the previous year, are shown below.
These are recognised at purchase or manufacturing cost. The cost includes directly chargeable ancillary costs. These costs also include revaluations undertaken in the past based on monetary revaluation rules or pursuant to company mergers.
Depreciation is calculated according to rates deemed appropriate to spread the carrying value of tangible assets over their useful working life. Estimated useful working life in years, unchanged compared to previous financial years, is as follows:
| Buildings | 33 |
|---|---|
| Light constructions | 10 |
| General plant | 10 |
| Specific plant and machinery | 6–10 |
| Equipment | 4 |
| Furniture | 8 |
| Electronic equipment | 5 |
| Vehicles and other transport means | 5 |
Ordinary maintenance costs are expensed in the year in which they are incurred; costs that increase the asset value or useful working life are capitalised and depreciated according to the residual possibility of utilisation of the assets to which they refer. Land is not depreciated.
The Company applied IFRS 16 from 1 January 2019 by using the amended retrospective approach.
In adopting IFRS 16, the Company made use of the exemption granted in paragraph 5 a) in relation to leases with a duration of less than 12 months (known as short-term leases) and the exemption granted in paragraph 5 b) in relation to lease agreements whose underlying asset is a low-value asset. For these agreements, lease payments are recognised in the income statement on a straight-line basis for the duration of the respective agreements.
When evaluating the lease liabilities, Sabaf S.p.A. discounted the payments due for the lease using the incremental borrowing rate at 1 January 2019. The weighted average of the applied rate was 1.5% on 1 January 2021 and on 31 December 2021.
The lease term is calculated based on the non-cancellable period of the lease, including the periods covered by the option to extend or to terminate the lease if it is reasonably certain that those options will be exercised or not exercised, taking account of all relevant factors that create an economic incentive relating to those decisions.
Investment property is valued at cost, including revaluations undertaken in the past based on monetary revaluation rules or pursuant to company mergers.
The depreciation is calculated based on the estimated useful life, considered to be 33 years.
If the recoverable amount of the investment property – determined based on the market value of the properties – is estimated to be lower than its carrying value, the asset's carrying value is reduced to the lower recoverable amount, recognising impairment in the income statement.
When there is no longer any reason for a write-down to be maintained, the carrying value of the asset (or cash generating unit) is increased to the new value stemming from the estimate of its recoverable amount – but not beyond the net carrying value that the asset would have had if it had not been written down for impairment. Reversal of impairment loss is recognised in the income statement.
As established by IAS 38, intangible assets acquired or internally produced are recognised as assets when it is probable that use of the asset will generate future economic benefits and when asset cost can be measured reliably. If it is considered that these future economic benefits will not be generated, the development costs are written down in the year in which this is ascertained.
Such assets are measured at purchase or production cost and - if the assets concerned have a finite useful life - are amortised on a straight-line basis over their estimated useful life.
The useful life of projects for which development costs are capitalised is estimated to be 10 years.
The SAP management system is amortised over five years.
Equity investments in subsidiaries, associates and joint-ventures are stated in the accounts at cost. In accordance with IAS 36, the value recognised in the financial statements is subject to an impairment test if there are indications of possible impairment.
Equity investments in companies other than subsidiaries, associates and joint ventures are classified as financial assets measured at fair value, which normally corresponds to the transaction price including directly attributable transaction costs. Subsequent changes in fair value are recognised in the Income statement (FVPL) or, if the option is exercised in accordance with the standard, in the Statement of comprehensive income (FVOCI) under the heading "Instrument reserve at FVOCI".
At each end of the reporting period, Sabaf S.p.A. reviews the carrying value of its property, plant and equipment, intangible assets and equity investments to determine whether there are signs of impairment of these assets. If there is any such indication, the recoverable amount of said assets is estimated so as to determine the total of the write-down. If it is not possible to estimate the recoverable amount individually, the Company estimates the recoverable amount of the cash generating unit (CGU) to which the asset belongs. In particular, the recoverable amount of the cash generating units (which generally coincide with the legal entity to which the capitalised assets refer) is verified by determining the value of use. The recoverable amount is the higher of the net selling price and value of use. In measuring the value of use, future cash flows net of taxes, estimated based on past experience, are discounted to their present value using a pre-tax rate that reflects current market valuations of the present cost of money and specific asset risk. The main assumptions used for calculating the value of use concern the discount rate, growth rate, expected changes in selling prices and cost trends during the period used for the calculation. The growth rates adopted are based on future market expectations in the relevant sector. Changes in the sales prices are based on past experience and on the expected future changes in the market. The Company prepares operating cash flow forecasts based on the most recent budgets approved by the Boards of Directors of the investees, draws up four-year forecasts and determines the terminal value (current value of perpetual income), which expresses the medium- and long-term operating flows in the specific sector.
Furthermore, the Company checks the recoverable amount of its investees at least once a year when the separate financial statements are prepared.
If the recoverable amount of an asset (or CGU) is estimated to be lower than its carrying value, the asset's carrying value is reduced to the lower recoverable amount, recognising impairment of value in the income statement.
When there is no longer any reason for a write-down to be maintained, the carrying value of the asset (or cash generating unit) is increased to the new value stemming from the estimate of its recoverable amount – but not beyond the net carrying value that the asset would have had if it had not been written down for impairment. Reversal of impairment loss is recognised in the income statement.
Inventories are measured at the lower of purchase or production cost – determined using the weighted average cost method – and the corresponding fair value represented by the replacement cost for purchased materials and by the presumed realisable value for finished and semi-processed products – calculated taking into account any manufacturing costs and direct selling costs yet to be incurred. Inventory cost includes accessory costs and the portion of direct and indirect manufacturing costs that can reasonably be assigned to inventory items. Inventories subject to obsolescence and low turnover are written down in relation to their possibility of use or realisation. Inventory write-downs are derecognised in subsequent years if the reasons for such write-downs cease to exist.
Upon initial recognition, financial assets are classified, as the case may be, on the basis of subsequent measurement methods, i.e. at amortised cost, at fair value recognised in other comprehensive income (OCI) and at fair value recognised in the income statement.
The classification of financial assets at initial recognition depends on the characteristics of the contractual cash flows of the financial assets and on the business model that the Company uses to manage them. Trade receivables that do not contain a significant financing component are valued at the transaction price determined in accordance with IFRS 15. See the "Revenue from Contracts with Customers" paragraph.
Other financial assets are recognised at fair value plus, in the case of a financial asset not at fair value recognised in the income statement, transaction costs.
For a financial asset to be classified and measured at amortised cost or at fair value recognised in OCI, it must generate cash flows that depend solely on the principal and interest on the amount of
principal to be repaid (known as 'solely payments of principal and interest (SPPI)'). This measurement is referred to as the SPPI test and is carried out at the instrument level.
The measurement of financial liabilities depends on their classification, as described below.
This category is the most important for the Company. The Company measures the financial assets at amortised cost if both of the following requirements are met:
Financial assets at amortised cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognised in the income statement when the asset is derecognised, modified or revalued.
Financial assets at amortised cost of the Company include trade receivables.
This category includes all assets held for trading, assets designated at initial recognition as financial assets measured at fair value with changes recognised in the income statement, or financial assets that must be measured at fair value. Assets held for trading are all those assets acquired for sale or repurchase in the short term. Derivatives, separated or otherwise, are classified as financial instruments held for trading, unless they are designated as effective hedging instruments. Financial assets with cash flows that are not represented solely by principal and interest payments are classified and measured at fair value through profit or loss, regardless of the business model. Financial instruments at fair value with changes recognised in the income statement are recognised in the statement of financial position at fair value and net changes in fair value through profit or loss. This category includes derivative instruments.
The Company does not hold financial assets at fair value throughprofit or loss with reclassification of cumulative gains and losses or financial assets at fair value through profit or loss without reversal of cumulative gains and losses upon derecognition.
A financial asset (or, if applicable, part of a financial asset or part of a group of similar financial assets) is firstly written off (e.g. removed from the statement of financial position of the Company) when:
If the Company has transferred the rights to receive financial flows from an asset or has signed an agreement on the basis of which it retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the financial flows to one or more beneficiaries (pass-through), it considers whether or to what extent it has retained the risks and benefits concerning the ownership. If it has not substantially transferred or retained all the risks and benefits or has not lost control over it, the asset continued to be recognised in the financial statements of the Company to the extent of its residual involvement in the asset itself. In this case, the company also recognises an associated liability. The transferred asset and the associated liability are measured in such a way as to reflect the rights and obligations that pertain to the Company. When the residual involvement of the entity is a guarantee in the transferred asset, the involvement is measured based on the amount of the asset or the maximum amount of the consideration received that the entity could be obliged to pay, whichever lower.
Provisions for risks and charges are provisioned to cover losses and debts, the existence of which is certain or probable, but whose amount or date of occurrence cannot be determined at the end of the year. Provisions are stated in the statement of financial position only when a legal or implicit obligation exists that determines the use of resources with an impact on profit and loss to meet that obligation and the amount can be reliably estimated. If the effect is significant, the provisions are calculated by updating future cash flows estimated at a rate including taxes such as to reflect current market valuations of the current value of the cash and specific risks associated with the liability.
The post-employment benefit is provisioned to cover the entire liability accruing vis-à-vis employees in compliance with current legislation and with national and supplementary company collective labour contracts. This liability is subject to revaluation via application of indices fixed by current regulations. Up to 31 December 2006, post-employment benefits were considered defined-benefit plans and accounted for in compliance with IAS 19, using the projected unit-credit method. The regulations of this fund were amended by Law no. 296 of 27 December 2006 and subsequent Decrees and Regulations issued during the first months of 2007. In the light of these changes, and, in particular, for companies with at least 50 employees, post-employment benefits must now be considered a defined-benefit plan only for the portions accruing before 1 January 2007 (and not yet paid as at the end of the reporting period). Conversely, portions accruing after that date are treated as defined-contribution plans.
Actuarial gains or losses are recognised immediately under "Other total profits/(losses)".
All financial liabilities are initially recognised at fair value, in addition to directly attributable transaction costs in case of mortgages, loans and payables. The Company's financial liabilities include trade payables and other payables, mortgages and loans, including current account overdrafts and derivative financial instruments.
The measurement of financial liabilities depends on their classification, as described below.
Financial liabilities at fair value with changes recognised in the income statement include liabilities held for trading and financial liabilities initially recognised at fair value, with changes recognised in the income statement. Liabilities held for trading are those liabilities acquired in order to discharge or transfer them in the short term. This category also includes derivative financial instruments subscribed by the Company and not designated as hedging instruments in a hedging relationship pursuant to IFRS 9. Embedded derivatives, separated from the main contract, are classified as financial instruments held for trading, unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the income statement. Financial liabilities are designated at fair value with changes recognised in the income statement from the date of initial recognition, only if the criteria of IFRS 9 are met.
This is the most important category for the Company and includes interest-bearing payables and loans. After initial statement, loans are valued using the amortised cost approach, applying the effective interest rate method. Gains and losses are recognised in the income statement when the liability is discharged, as well as through the amortisation process. Amortised cost is calculated by recognising the discount or premium on the acquisition and the fees or costs that are an integral part of the effective interest rate. Amortisation at the effective interest rate is included in financial expenses in the income statement.
A financial liability is derecognised when the obligation underlying the liability is discharged, cancelled or fulfilled. If an existing financial liability is replaced by another from the same lender, at substantially different conditions, or if the conditions of an existing liability are substantially changed, this replacement or change is treated as a derecognition of the original liability accompanied by the recognition of a new liability, with any differences between the carrying values recognised in the income statement.
Receivables and payables originally expressed in foreign currencies are converted into euro at the exchange rates in force on the date of the transactions originating them. Forex differences realised upon collection of receivables and payment of payables in foreign currency are posted in the income statement. Income and costs relating to foreign-currency transactions are converted at the rate in force on the transaction date.
At year-end, assets and liabilities expressed in foreign currencies are posted at the spot exchange rate in force at the end of the reporting period and related foreign exchange gains and losses are posted in the income statement. If conversion generates a net gain, this value constitutes a non-distributable reserve until it is effectively realised.
The Company's business is exposed to financial risks relating to changes in exchange rates, commodity prices and interest rates. The Company may decide to use derivative financial instruments to hedge these risks.
Derivatives are initially recognised at cost and are then adjusted to fair value on subsequent closing dates.
Changes in the fair value of derivatives designated and recognised as effective for hedging future cash flows relating to the Company's contractual commitments and planned transactions are recognised directly in shareholders' equity, while the ineffective portion is immediately posted in the income statement. If the contractual commitments or planned transactions materialise in the recognition of assets or liabilities, when such assets or liabilities are recognised, the gains or losses on the derivative that were directly recognised in equity are factored back into the initial valuation of the cost of acquisition or carrying value of the asset or liability. For cash flow hedges that do not lead to recognition of assets or liabilities, the amounts that were directly recognised in equity are included in the income statement in the same period when the contractual commitment or planned transaction hedged impacts profit and loss – for example, when a planned sale actually takes place.
For effective hedges of exposure to changes in fair value, the item hedged is adjusted for the changes in fair value attributable to the risk hedged and recognised in the income statement. Gains and losses stemming from the derivative's valuation are also posted in the income statement.
Changes in the fair value of derivatives not designated as hedging instruments are recognised in the income statement in the period when they occur.
Hedge accounting is discontinued when the hedging instrument expires, is sold or is exercised, or when it no longer qualifies as a hedge. At this time, the cumulative gains or losses of the hedging instrument recognised in equity are kept in the latter until the planned transaction actually takes place. If the transaction hedged is not expected to take place, cumulative gains or losses recognised directly in equity are transferred to the year's income statement.
Embedded derivatives included in other financial instruments or contracts are treated as separate derivatives when their risks and characteristics are not strictly related to those of their host contracts and the latter are not measured at fair value with posting of related gains and losses in the income statement.
Revenue is recognised net of return sales, discounts, allowances and bonuses, as well as of the taxes directly associated with sale of goods and rendering of services.
Sales revenue is recognised when the company has transferred the significant risks and benefits associated with ownership of the goods and the amount of revenue can be reliably measured.
Revenues of a financial nature are recognised on an accrual basis.
Finance income includes interest receivable on funds invested and income from financial instruments, when not offset as part of hedging transactions. Interest income is recognised in the income statement at the time of vesting, taking effective output into consideration.
Financial expenses include interest payable on financial debt calculated using the effective interest method and bank expenses. All the other financial expenses are recognised as costs for the year in which they are incurred.
Income taxes include all taxes calculated on the Company's taxable income. Income taxes are directly recognised in the income statement, with the exception of those concerning items directly debited or credited to shareholders' equity, in which case the tax effect is recognised directly in shareholders' equity. Other taxes not relating to income, such as property taxes, are included among operating expenses. Deferred taxes are provisioned in accordance with the global liability provisioning method. They are calculated on all temporary differences that emerge from the taxable base of an asset or liability and its book value. Current and deferred tax assets and liabilities are offset when income taxes are levied by the same tax authority and when there is a legal right to settle on a net basis. Deferred tax assets and liabilities are measured using the tax rates that are expected to be applicable in the years when temporary differences will be realised or settled.
Dividends are posted on an accrual basis when the right to receive them materialises, i.e. when shareholders approve dividend distribution.
Treasury shares are booked as a reduction of shareholders' equity. The carrying value of treasury shares and revenues from any subsequent sales are recognised in the form of changes in shareholders' equity.
Some of the Company employees receive part of the remuneration in the form of share-based payments, therefore employees provide services in exchange for shares ("equity-settled transactions"). The cost of equity-settled transactions is determined by the fair value at the date on which the assignment is made using an appropriate measurement method, as explained in more detail in Note 43.
This cost, together with the corresponding increase in shareholders' equity, is recognised under personnel costs (Note 27) over the period in which the conditions relating to the achievement of objectives and/or the provision of the service are met. The cumulative costs recognised for such transactions at the end of each reporting period up to the vesting date are commensurate with the expiry of the vesting period and the best estimate of the number of equity instruments that will actually vest.
Service or performance conditions are not taken into account when defining the fair value of the plan at the assignment date. However, the probability of these conditions being met is taken into account when defining the best estimate of the number of equity instruments that will vest. Market conditions are reflected in the fair value at the assignment date. Any other condition related to the plan that does not involve a service obligation is not considered to be a vesting condition. Non-vesting conditions are reflected in the fair value of the plan and result in the immediate recognition of the cost of the plan, unless there are also service or performance conditions.
No cost is recognised for rights that do not vest in that the performance and/or service conditions are not met. When the rights include a market condition or a non-vesting condition, these are treated as if they had vested regardless of whether the market conditions or other non-vesting conditions to which they are subject are met or not, it being understood that all other performance and/or service conditions must be met.
If the conditions of the plan are changed, the minimum cost to be recognised is the fair value at the assignment date in the absence of the change in the plan itself, on the assumption that the original conditions of the plan are met. Moreover, a cost is recognised for each change that results in an increase in total fair value of the payment plan, or that is in any case favourable for employees; this cost is measured with reference to the date of change. When a plan is cancelled, any remaining element of the plan's fair value is immediately expensed to the income statement.
Preparation of the separate financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the carrying values of assets and liabilities and the disclosures on contingent assets and liabilities at the end of the reporting period. Actual results might differ from these estimates. Estimates are used to measure tangible and intangible assets and investments subject to impairment testing, as described earlier, as well as to measure the ability to recover prepaid tax assets, provisions for bad debts, for inventory obsolescence, depreciation and amortisation, asset writedowns, employee benefits, taxes, other provisions. Specifically:
The procedure for determining impairment losses of tangible and intangible assets described in "Impairment" implies – in estimating the value of use – the use of the Business Plans of investees, which are based on a series of assumptions relating to future events and actions of the investees' management bodies, which may not necessarily come about. In estimating market value, however, assumptions are made on the expected trend in trading between third parties based on historical trends, which may not actually be repeated.
Receivables are adjusted by the related bad debt provision to take into account their recoverable amount. To determine the size of the writedowns, management must make subjective assessments based on the documentation and information available regarding, among other things, the customer's solvency, as well as experience and historical payment trends.
Inventories subject to obsolescence and slow turnover are systematically measured and written down if their recoverable value is less than their carrying value. Write-downs are calculated based on management assumptions and estimates, resulting from experience and historical results.
The current value of liabilities for employee benefits depends on a series of factors determined using actuarial techniques based on certain assumptions. Assumptions concern the discount rate, estimates of future salary increases, and mortality and resignation rates. Any change in the above-mentioned assumptions might have an effect on liabilities for pension benefits.
Estimating the fair value of share-based payments requires the determination of the most appropriate valuation model, which depends on the terms and conditions under which these instruments are granted. This also requires the identification of data to feed into the valuation model, including assumptions about the exercise period of the options, volatility and dividend yield. The Company uses a binomial model for the initial measurement of the fair value of share-based payments with employees.
Determining liabilities for Company taxes requires the use of management valuations in relation to transactions whose tax implications are not certain at the end of the reporting period. Furthermore, the valuation of deferred taxes is based on income expectations for future years; the valuation of expected income depends on factors that might change over time and have a significant effect on the valuation of deferred tax assets.
When estimating the risk of potential liabilities from disputes, the Directors rely on communications regarding the status of recovery procedures and disputes from the lawyers who represent the Company in litigation. These estimates are determined taking into account the gradual development of the disputes, considering existing exemptions.
With reference to the potential impact of climate change and energy transition on the Company's activities, the Management carries out targeted analyses to identify and manage the main risks and uncertainties to which the Company is exposed, adapting the corporate strategy accordingly. To date, these factors have not had a significant impact on the opinions and estimates used in preparing these Separate Financial Statements.
Management has reviewed the Company's exposure to the effects of the COVID-19 pandemic and its impact on the Company's financial position, results and cash flows, especially with regard to the recoverability of the value of intangible assets, the measurement of receivables, the measurement of inventories and the management of financial risks, with a special reference to credit and liquidity risks. The analysis carried out did not reveal any critical situations and the factors related to the COVID-19 pandemic did not have a significant impact on the opinions and estimates used in preparing these Separate Financial Statements.
Estimates and assumptions are regularly reviewed and the effects of each change immediately reflected in the income statement.
The Financial Stability Board released the report "Reforming Major Interest Rate Benchmarks" with recommendations to strengthen existing benchmark indexes, other potential interbank market-based benchmark rates and develop alternative near-risk-free benchmark rates. The European Parliament introduced a common framework to ensure the accuracy and integrity of these indexes.
Following this Regulation, the IASB published the Reform of benchmark indexes for determining interest rates in order to take into account the consequences of the reform on financial reporting and so that companies can continue to comply with the provisions assuming that the existing benchmark indexes are not changed as a result of the reform of interbank rates.
The amendments to the principles outlined provide a number of expedients, applicable to all hedging relationships directly affected by the interest rate benchmark reform, i.e., if the reform generates uncertainties about the timing and/or amount of cash flows based on benchmarks of the hedged item or hedging instrument. These amendments had no impact on the Company's separate financial statements.
On 31 March 2021, the IASB issued the document "Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16)" by which it extends by one year the period of application of the amendment to IFRS 16, issued in 2020, relating to the accounting for facilities granted to lessees due to Covid-19. These changes that apply as from 1 April 2021 had no impact on the Company's separate financial statements.
In May 2017, the IASB issued IFRS 17 Insurance Contracts (IFRS 17), a comprehensive new standard on insurance contracts covering recognition and measurement, presentation and disclosure. The overall objective of IFRS 17 is to present an accounting model for insurance contracts that is more useful and consistent for insurers. This principle does not apply to the Group.
In January 2020, the IAS issued amendments to paragraphs 69-76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify what is meant by the right to postpone an expiry, that the right to postpone must exist at the end of the reporting period, that the classification is not affected by the likelihood that the entity will exercise its right to postpone, that only if a derivative embedded in a convertible liability is itself an equity instrument does the maturity of the liability have no impact on classification. The amendments will be effective for financial years beginning on or after 1 January 2023 and must be applied retrospectively. The Group is assessing the impact the changes will have on the current situation.
The amendments are intended to update a reference in IFRS 3 to the previous version of the IASB's Conceptual Framework (1989 Framework) without affecting the requirements of the standard.
The purpose of the amendments is not to allow the deduction from the cost of property, plant and equipment of the amount received from the sale of goods produced in the test phase of the asset. These sales revenues and related production costs will therefore be recognised in the income statement.
The amendment clarifies that all costs directly attributable to the contract must be taken into account when estimating the possible onerousness of a contract. Accordingly, the assessment of whether a contract is onerous includes not only incremental costs (such as the cost of direct material used in processing), but also all costs that the enterprise cannot avoid because it has entered into the contract (such as, for example, the share of depreciation of machinery used for the performance of the contract).
The amendments include amendments to the following principles:
All amendments will enter into force on 1 January 2022. Following the adoption of these amendments, the directors do not expect a significant effect on the Company's separate financial statements.
| Property | Plant and equipment |
Other assets | Assets under construction |
Total | ||||
|---|---|---|---|---|---|---|---|---|
| COST | ||||||||
| At 31 December 2019 | 43,324 | 175,386 | 36,447 | 2,217 | 257,374 | |||
| Increases | 344 | 3,566 | 2,481 | 2,717 | 9,108 | |||
| Disposals | - | (4,908) | (1,129) | - | (6,037) | |||
| Reclassification | - | 1,449 | 260 | (2,412) | (703) | |||
| At 31 December 2020 | 43,668 | 175,493 | 38,059 | 2,522 | 259,742 | |||
| Increases | 571 | 3,877 | 2,016 | 3,005 | 9,469 | |||
| Disposals | - | (1,694) | (404) | - | (2,098) | |||
| Reclassification | 223 | 1,108 | 38 | (1,676) | (307) | |||
| At 31 December 2021 | 44,462 | 178,784 | 39,709 | 3,851 | 266,806 |
| ACCUMULATED DEPRECIATION | 18,531 | 154,288 | 33,084 | - | 205,903 |
|---|---|---|---|---|---|
| At 31 December 2019 | 1,212 | 5,758 | 1,526 | - | 8,496 |
| Depreciations for the year | - | (3,391) | (69) | - | (3,460) |
| Derecognition due to disposal | - | 141 | - | - | 141 |
| At 31 December 2020 | 19,743 | 156,796 | 34,541 | - | 211,080 |
| Depreciations for the year | 1,258 | 5,558 | 1,562 | - | 8,378 |
| Derecognition due to disposal | - | (1,151) | (95) | - | (1,246) |
| Write-downs | - | - | - | - | - |
| At 31 December 2021 | 21,001 | 161,203 | 36,008 | - | 218,212 |
| NET CARRYING VALUE | |||||
|---|---|---|---|---|---|
| At 31 December 2021 | 23,461 | 17,581 | 3,701 | 3,851 | 48,594 |
| At 31 December 2020 | 23,925 | 18,697 | 3,518 | 2,522 | 48,662 |
The breakdown of the net carrying value of Property was as follows:
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Land | 5,404 | 5,404 | - |
| Industrial buildings | 18,057 | 18,521 | (464) |
| Total | 23,461 | 23,925 | (464) |
Changes in property, plant and equipment resulting from the application of IFRS 16 are shown below:
| Property | Plant and equipment |
Other assets | Total | |
|---|---|---|---|---|
| 1 January 2021 | 256 | - | 665 | 921 |
| Increases | - | - | 275 | 275 |
| Depreciations | (44) | - | (266) | (310) |
| At 31 December 2021 | 212 | - | 674 | 887 |
The main investments in the financial year were aimed at adapting production capacity and industrialising new products to significantly increase shares with certain strategic customers.
Investments in maintenance and replacement, so that production equipment is kept constantly up to date and efficient, are systematic. Decreases mainly relate to the disposal of machinery to other companies of the Sabaf Group. Assets under construction include machinery under construction and advance payments to suppliers of capital equipment.
At 31 December 2021, the Company found no endogenous or exogenous indicators of impairment of its property, plant and equipment. As a result, the value of property, plant and equipment was not submitted to impairment testing.
| COST | |
|---|---|
| At 31 December 2019 | 11,835 |
| Increases | - |
| Disposals | (552) |
| At 31 December 2020 | 11,283 |
| Increases | - |
| Disposals | (1,107) |
| At 31 December 2021 | 10,176 |
| ACCUMULATED DEPRECIATIONS | ||||
|---|---|---|---|---|
| At 31 December 2019 | 7,859 | |||
| Depreciations for the year | 420 | |||
| Derecognition due to disposal | (249) | |||
| At 31 December 2020 | 8,030 | |||
| Depreciations for the year | 369 | |||
| Derecognition due to disposal | (534) |
| NET CARRYING VALUE | |
|---|---|
| At 31 December 2021 | 2,311 |
| At 31 December 2020 | 3,253 |
This item includes non-operating buildings owned by the Company. Disposals during the period resulted in a capital gain of approximately €109 thousand.
Changes in investment property resulting from the application of IFRS 16 are shown below:
| INVESTMENT PROPERTY | |||||
|---|---|---|---|---|---|
| 1 January 2021 | 38 | ||||
| Depreciations | (35) | ||||
| At 31 December2021 | 3 |
At 31 December 2021, the Company found no endogenous or exogenous indicators of impairment of its investment property. As a result, the value of investment property was not submitted to impairment testing.
| Patents, know-how and software |
Development costs |
Other intangible assets |
Total | |
|---|---|---|---|---|
| COST | ||||
| At 31 December 2019 | 6,790 | 5,848 | 635 | 13,273 |
| Increases | 269 | 413 | 6 | 688 |
| Decreases | (85) | - | - | (85) |
| Reclassifications | - | (241) | - | (241) |
| At 31 December 2020 | 6,974 | 6,020 | 641 | 13,635 |
| Increases | 250 | 1,679 | 4 | 1,933 |
| Decreases | (2) | - | (3) | (5) |
| Reclassifications | 22 | (58) | - | (36) |
| At 31 December 2021 | 7,244 | 7,641 | 642 | 15,527 |
| AMORTISATION AND WRITE-DOWNS | ||||||||
|---|---|---|---|---|---|---|---|---|
| At 31 December 2019 | 6,508 | 3,767 | 545 | 10,820 | ||||
| Amortisation | 156 | 342 | 1 | 499 | ||||
| Decreases | - | - | - | - | ||||
| At 31 December 2020 | 6,664 | 4,109 | 546 | 11,319 | ||||
| Amortisation | 142 | 288 | - | 430 | ||||
| Decreases | - | - | - | - |
| NET CARRYING VALUE | ||||||||
|---|---|---|---|---|---|---|---|---|
| At 31 December 2021 | 438 | 3,244 | 96 | 3,778 | ||||
| At 31 December 2020 | 310 | 1,911 | 95 | 2,316 |
Intangible assets have a finite useful life and, as a result, are amortised throughout their life.
Increases in development costs include projects in progress and therefore not subject to amortisation.
In 2021, the Company set up a dedicated team to develop new solutions for home cooking, with the aim of creating innovative products that meet the needs of manufacturers of household appliances and new consumer trends. Investments in the development of gas parts continued, mainly in relation to the expansion of the range of burners.
At 31 December 2021, the Company found no endogenous or exogenous indicators of impairment of its intangible assets. As a result, the value of property, plant and equipment was not submitted to impairment testing.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| In subsidiaries | 84,429 | 65,441 | 18,988 |
| Other equity investments | 83 | 83 | 0 |
| Total | 84,512 | 65,524 | 18,988 |
| HISTORICAL COST |
Faringosi Hinges |
Sabaf do Brasil |
Sabaf U.S. |
Sabaf Appliance Components (China) |
Sabaf Mexico |
Sabaf Turkey |
A.R.C. | Okida | C.M.I | Sabaf India | Total |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 31.12.2019 | 10,329 | 8,469 | 139 | 4,900 | 0 | 12,005 | 4,800 | 8,782 | 13,392 | - | 62,816 |
| Purchase | - | - | - | - | - | - | - | - | 3,063 | 20 | 3,083 |
| Share capital increase | - | 1,092 | - | 3,000 | - | - | - | - | - | 1,750 | 5,842 |
| 31.12.2020 | 10,329 | 9,561 | 139 | 7,900 | 0 | 12,005 | 4,800 | 8,782 | 16,455 | 1,770 | 71,741 |
| Purchase | - | - | - | - | 1 | - | 1,650 | - | 4,743 | - | 6,394 |
| Share capital increase | - | 3,600 | - | - | 3,127 | 5,167 | - | - | - | 1,000 | 12,894 |
| 31.12.2021 | 10,329 | 13,161 | 139 | 7,900 | 3,128 | 17,172 | 6,450 | 8,782 | 21,198 | 2,770 | 91,029 |
| PROVISION FOR WRITE-DOWNS | |||||||||||
| 31.12.2019 | 0 | 0 | 0 | 4,900 | 0 | 0 | 0 | 0 | 0 | 0 | 4,900 |
| Write-downs | - | - | - | 1,400 | - | - | - | - | - | - | 1,400 |
The change in equity investments in subsidiaries is broken down in the table below:
| 31.12.2019 | 0 | 0 | 0 | 4,900 | 0 | 0 | 0 | 0 | 0 | 0 | 4,900 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Write-downs | - | - | - | 1,400 | - | - | - | - | - | - | 1,400 |
| 31.12.2020 | 0 | 0 | 0 | 6,300 | 0 | 0 | 0 | 0 | 0 | 0 | 6,300 |
| Write-downs | - | - | - | 300 | - | - | - | - | - | - | 300 |
| 31.12.2021 | 0 | 0 | 0 | 6,600 | 0 | 0 | 0 | 0 | 0 | 0 | 6,600 |
| NET CARRYING VALUE | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 31.12.2021 | 10,329 | 13,161 | 139 | 1,300 | 3,128 | 17,172 | 6,450 | 8,782 | 21,198 | 2,770 | 84,429 |
| 31.12.2020 | 10,329 | 9,561 | 139 | 1,600 | 0 | 12,005 | 4,800 | 8,782 | 16,455 | 1,770 | 65,441 |
| PORTION OF SHAREHOLDERS' EQUITY (CALCULATED IN COMPLIANCE WITH IFRS) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 8,462 15,716 158 1,317 3,092 15,396 7,371 2,961 15,503 2,755 72,731 31.12.2021 |
||||||||||
| 7,462 10,561 108 1,597 0 19,534 4,349 3,294 7,763 1,671 56,339 31.12.2020 |
| DIFFERENCE BETWEEN SHAREHOLDERS' EQUITY AND CARRYING VALUE | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 31.12.2021 | (1,867) | 2,555 | 19 | 17 | (36) | (1,776) | 921 | (5,821) | (5,695) | (15) | (11,698) |
| (2,867) 1,000 (31) (3) 0 7,529 (451) (5,488) (8,692) (99) (9,102) 31.12.2020 |
In 2021, the Faringosi Hinges achieved positive results - in terms of sales and profitability - both compared to the previous year and compared to the budget. The 2022-2026 forward plan prepared at the beginning of 2022 envisages a further increase in sales at moderate growth rates.
At 31 December 2021, Sabaf S.p.A. tested - with the support of independent experts - the carrying value of the equity investment for impairment, determining its recoverable amount, considered to be equivalent to its value of use plus available liquidity, by discounting expected future cash flows in the forward plan drafted by the management. Cash flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses the operating flows that the investee is expected to generate from the sixth year to infinity and determined based on the perpetual income. The management prepared a single plan for each CGU that represents the normal expected scenario, with reference to the period from 2022 to 2026.
The development of forward plans and the calculation of the value in use were carried out following an in-depth analysis that also considered the impact on profitability of the increase in purchase costs and the possibility of transferring this increase to sales prices. The value of use was calculated based on a discount rate (WACC) of 10.11% (8.62% in the impairment test carried out while preparing the separate financial statements at 31 December 2020) and a growth rate (g) of 2%, unchanged from the 2020 impairment test.
The recoverable amount calculated on the basis of the abovementioned assumptions and valuation techniques is €14.431 million, compared with a carrying value of the equity investment of €10.329 million; consequently, the amount recognised for equity investment at 31 December 2021 was deemed recoverable.
The recoverable amount of the equity investment was subjected to stress tests and sensitivity analyses that also took into account economic parameters and as a result of which positive results emerged. The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 1.75% | 2.00% | 2.25% | 2.50% |
| 9.11% | 15,684 | 16,097 | 16,539 | 17,013 | 17,524 |
| 9.61% | 14,680 | 15,036 | 15,416 | 15,822 | 16,256 |
| 10.11% | 13,792 | 14,102 | 14,431 | 14,781 | 15,154 |
| 10.61% | 13,002 | 13,273 | 13,560 | 13,865 | 14,188 |
| 11.11% | 12,293 | 12,532 | 12,785 | 13,051 | 13,334 |
The table below shows the change in recoverable amount as EBITDA changes according to the plan.
| EBITDA According to the plan -10% -20% |
|||||||
|---|---|---|---|---|---|---|---|
| (€/000) | 14,431 12,501 10,572 |
In 2021, Sabaf do Brasil continued to obtain positive results. Shareholders' equity (converted into euros at the end-of-year exchange rate) is higher than the carrying amount of the investment.
The subsidiary Sabaf U.S. operates as a commercial support for North America.
The difference between the carrying value and the shareholders' equity of the investee is attributable to the non-durable losses taking into consideration expected development on the North American market.
Sabaf Appliance Components (Kunshan) Co., Ltd. has been producing burners for the Chinese market since 2015. Furthermore, the company has performed the function as distributor on the Chinese market of Sabaf products manufactured in Italy and Turkey. Low production volumes have not allowed the company to reach the break-even point. During the financial year, the shareholding was written down by €300 thousand against the loss of 2021.
In 2021, Sabaf Turkey, a company active in the production of gas parts, recorded a strong sales growth rate and a largely positive operating result. As a result of the strong devaluation of the Turkish lira, the company recorded exchange rate losses from the conversion of eurodenominated liabilities, which led to a negative net result.
In June 2016, the Company acquired the controlling share (70%) of A.R.C. s.r.l., leading company in the production of burners for professional cooking. The transaction allowed Sabaf to enter into a new sector, contiguous with the traditional sector of components for household gas cooking appliances, and to enhance the consolidated international presence of the Sabaf Group. In October 2021, Sabaf S.p.A. completed the acquisition of the remaining 30% of the share capital of A.R.C. s.r.l., following the exercise of the put option by the minority shareholder. The fee was €1,650 thousand. As a result of the transaction, Sabaf S.p.A. now holds 100% of the share capital of C.M.I. s.r.l..
A.R.C. s.r.l. performed well during the 2021 financial year in terms of both turnover and profitability. The 2022-2026 forward plan envisages a further increase in sales at moderate growth rates and almost stable margins.
At 31 December 2021, Sabaf S.p.A. tested - with the support of independent experts - the carrying value of the equity investment for impairment, determining its recoverable amount, considered to be equivalent to its value of use plus available liquidity, by discounting expected future cash flows in the forward plan drafted by the management. Cash flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses the operating flows that the investee is expected to generate from the sixth year to infinity and determined based on the perpetual income. The management prepared a single plan for each CGU that represents the normal expected scenario, with reference to the period from 2022 to 2026.
The development of forward plans and the calculation of the value in use were carried out following an in-depth analysis that also considered the impact on profitability of the increase in purchase costs and the possibility of transferring this increase to sales prices. The value of use was calculated based on a discount rate (WACC) of 6.93% (6.76% in the impairment test carried out while preparing the Separate financial statements at 31 December 2020) and a growth rate (g) of 2% (unchanged from the impairment test carried out while preparing the separate financial statements at 31 December 2020). The recoverable amount calculated on the basis of the abovementioned assumptions and valuation techniques is €23.079 million, compared with a carrying value of the equity investment of €6.450 million; consequently, the amount recognised for equity investment at 31 December 2021 was deemed recoverable.
The recoverable amount of the equity investment was subjected to stress tests and sensitivity analyses that also took into account economic parameters and as a result of which positive results emerged. The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||||
|---|---|---|---|---|---|---|---|
| Discount rate | 1.50% | 1.75% | 2.00% | 2.25% | 2.50% | ||
| 5.93% | 25,734 | 26,887 | 28,187 | 29,663 | 31,355 | ||
| 6.43% | 23,425 | 24,333 | 25,344 | 26,475 | 27,751 | ||
| 6.93% | 21,543 | 22,274 | 23,079 | 23,970 | 24,962 | ||
| 7.43% | 19,980 | 20,579 | 21,234 | 21,951 | 22,742 | ||
| 7.93% | 18,662 | 19,160 | 19,701 | 20,289 | 20,931 |
The table below shows the change in recoverable amount as EBITDA changes according to the plan.
| EBITDA | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| According to the plan | -10% | -20% | |||||||
| (€/000) | 23,079 | 14,449 | 12,743 |
In 2018, the Company directly acquired 30% of Okida Elektronik (the remaining 70% was acquired through the subsidiary Sabaf Turkey). Okida is a leader in Turkey in the design and manufacture of electronic components for household appliances (mainly ovens and hoods); the transaction allowed Sabaf to enter into a new sector, contiguous with the traditional sector of components for household gas cooking appliances. Okida Elektronik performed extremely well in 2021. At 31 December 2021, the Company tested - with the support of independent experts - the carrying value of the equity investment for impairment, determining its recoverable amount considered to be equivalent to its value of use plus available liquidity, by discounting expected future cash flows in the forward plan
The recoverable amount of the equity investment was subjected to stress tests and sensitivity analyses that also took into account economic parameters and as a result of which positive results drafted by the management. Cash flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses the operating flows that the investee is expected to generate from the sixth year to infinity and determined based on the perpetual income. The management prepared a single plan for each CGU that represents the normal expected scenario, with reference to the period from 2022 to 2026.
The development of forward plans and the calculation of the value in use were carried out following an in-depth analysis that also considered the impact on profitability of the increase in purchase costs and the possibility of transferring this increase to sales prices. The value of use was calculated based on a discount rate (WACC) of 15.21% (14.18% in the impairment test carried out while preparing the separate financial statements at 31 December 2020) and a growth rate (g) of 2.50%, unchanged from the 2020 impairment test. The portion pertaining to Sabaf S.p.A. of the recoverable amount calculated on the basis of the above-mentioned assumptions and valuation techniques is €15.832 million (30% of total equity value), compared with a carrying value of the equity investment of €8.782 million; consequently, the carrying value recognised for equity investment at 31 December 2021 was deemed recoverable.
emerged. The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||||
|---|---|---|---|---|---|---|---|
| Discount rate | 1.00% | 1.25% | 2.50% | 1.75% | 2.00% | ||
| 14.21% | 16,748 | 16,981 | 17,224 | 17,477 | 17,742 | ||
| 14.71% | 16,068 | 16,279 | 16,499 | 16,728 | 16,967 | ||
| 15.21% | 15,440 | 15,632 | 15,832 | 16,039 | 16,255 | ||
| 15.71% | 14,859 | 15,034 | 15,215 | 15,444 | 15,600 | ||
| 16.21% | 14,319 | 14,479 | 14,645 | 14,817 | 14,995 |
The table below shows the change in recoverable amount as EBITDA changes according to the plan.
| EBITDA | |||
|---|---|---|---|
| According to the plan | -10% | -20% | |
| (€/000) | 15,832 | 14,068 | 12,303 |
In July 2019, the Company acquired 68.5% of C.M.I. s.r.l., one of the main players in the design, production and sale of hinges for household appliances. The acquisition of C.M.I. s.r.l. allowed Sabaf to achieve a leadership position on a global scale in the hinge sector, proposing itself also in this area as a reference partner for all manufacturers of household appliances. Sabaf S.p.A. had acquired a further 15.75% stake in September 2020. In November 2021, Sabaf S.p.A. also completed the acquisition of 15.75% of the share capital of C.M.I. s.r.l., following the exercise of the second put option by the minority shareholder. The fee was €4,743 thousand. As a result of the transaction, Sabaf S.p.A. now holds 100% of the share capital of C.M.I. s.r.l.. C.M.I. s.r.l. recognised a strong increase in turnover in 2021 compared to the previous year. The positive trend is expected to continue for the period from 2022 to 2026, which forecasts further sales at moderate growth rates. At 31 December 2021, the Company tested - with the support of independent experts - the carrying value of the equity investment for impairment, determining its recoverable amount considered to be equivalent to its value of use plus available liquidity, by discounting expected future cash flows in the forward plan drafted by the management. Cash flows for the period from 2022 to 2026 were augmented by the terminal value, which expresses the operating flows that the investee is expected to generate from the sixth year to infinity and determined based on the perpetual income. The management prepared a single plan for each CGU that represents the normal expected scenario, with reference to the period from 2022 to 2026.
The development of forward plans and the calculation of the value in use were carried out following an in-depth analysis that also considered the impact on profitability of the increase in purchase costs and the possibility of transferring this increase to sales prices. The value of use was calculated based on a discount rate (WACC) of 11.31% (9.87% in the impairment test carried out while preparing the Separate financial statements at 31 December 2020) and a growth rate (g) of 2% (unchanged from that used for the impairment test carried out while preparing the separate financial statements at 31 December 2020).
The recoverable amount calculated on the basis of the abovementioned assumptions and valuation techniques is €55.656 million, compared with a carrying value of the equity investment of €21.198 million; consequently, the amount recognised for equity investment at 31 December 2021 was deemed recoverable.
The recoverable amount of the equity investment was subjected to stress tests and sensitivity analyses that also took into account economic parameters and as a result of which positive results emerged. The table below shows the changes in recoverable amount depending on changes in the WACC discount rate and growth factor g:
| (€/000) | Growth rate | ||||
|---|---|---|---|---|---|
| Discount rate | 1.00% | 1.25% | 2.00% | 1.75% | 2.00% |
| 10.31% | 60,380 | 61,856 | 63,421 | 65,083 | 66,852 |
| 10.81% | 56,649 | 57,946 | 59,316 | 60,766 | 62,303 |
| 11.31% | 53,305 | 54,450 | 55,656 | 56,929 | 58,275 |
| 11.81% | 50,289 | 51,306 | 52,375 | 53,499 | 54,685 |
| 12.31% | 47,556 | 48,464 | 49,416 | 50,415 | 51,465 |
The table below shows the change in recoverable amount as EBITDA changes according to the plan.
| EBITDA | |||
|---|---|---|---|
| According to the plan | -10% | -20% | |
| (€/000) | 55,656 | 50,334 | 41,649 |
During the 2020 financial year, a new company was set up in India with the aim of producing gas parts for the local market, where strong growth is expected in the coming years. The impacts of the pandemic caused a postponement in preparatory activities for the start of operations, which is expected during 2022.
During the 2021 financial year, a new company was established in Mexico. A plot of land was acquired on which a new plant for the production of components for the North American market will be built in 2022.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Financial receivables from subsidiaries | 10,708 | 5,537 | 5,171 |
| Total | 10,708 | 5,537 | 5,171 |
At 31 December 2021, financial receivables from subsidiaries consist of:
• an interest-bearing loan of USD 2.5 million (€2.208 million at the end-of-year exchange rate), granted to the subsidiary Sabaf do Brasil with the aim of optimising the Group's exposure to foreign exchange rate risk with maturity March 2023;
• an interest-bearing loan of €8.5 million to the subsidiary Sabaf Turkey, of which €3.5 million disbursed during 2018 and €5 million disbursed during 2021 as part of the coordination of the Group's financial management, with maturity in August 2024 and April 2024, respectively.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Raw materials | 13,381 | 9,062 | 4,319 |
| Semi-processed goods | 9,400 | 6,812 | 2,588 |
| Finished products | 12,990 | 7,374 | 5,616 |
| Provision for inventory write-downs | (1,785) | (1,736) | (49) |
| Total | 33,986 | 21,512 | 12,474 |
The value of final inventories at 31 December 2021 increased compared to the end of the previous year to meet the higher volumes of activity. Moreover, in addition to the inflationary effect of the significant increases in metal prices, the Company raised the level of safety stocks to ensure continuity of production in a particularly turbulent scenario.
The provision for write-downs is mainly allocated for hedging the obsolescence risk, quantified on the basis of specific analyses carried out at the end of the year on slow-moving and non-moving products, and refers to raw materials for €487 thousand, semifinished products for €328 thousand and finished products for €970 thousand. The following table shows the changes in the Provision for inventory write-downs during the current financial year:
| 31.12.2020 | 1,736 |
|---|---|
| Provisions | 297 |
| Utilisation | (248) |
| 31.12.2021 | 1,785 |
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Trade receivables from third parties | 30,584 | 29,477 | 1,107 |
| Trade receivables from subsidiaries | 15,210 | 16,048 | (838) |
| Bad debt provision | (600) | (500) | (100) |
| Net total | 45,194 | 45,025 | 169 |
At 31 December 2021, trade receivables included balances totalling USD 6,985 thousand, booked at the EUR/USD exchange rate in effect on 31 December 2021, equal to 1.13260. The amount of trade receivables recognised in the financial statements includes approximately €13 million in insured receivables (€17 million at 31 December 2020). There were no significant changes in average payment terms agreed with customers.
Receivables assigned to factors without recourse are derecognised from the Statement of Financial Position in that the reference contract provides for the assignment of ownership of the receivables, together with ownership of the cash flows generated by the receivable, as well as of all risks and benefits, to the assignee.
The following table shows the breakdown of receivables from third parties by maturity date:
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Current receivables (not past due) | 27,304 | 27,784 | (480) |
| Outstanding up to 30 days | 1,844 | 1,026 | 818 |
| Outstanding from 30 to 60 days | 348 | 315 | 33 |
| Outstanding from 60 to 90 days | 211 | 100 | 111 |
| Outstanding for more than 90 days | 877 | 252 | 625 |
| Total | 30,584 | 29,477 | 1,107 |
The bad debt provision was adjusted to the better estimate of the credit risk and expected losses at the end of the reporting period, also carried out by analysing each expired item. Changes during the year were as follows:
| 31.12.2020 | Provisions | Utilisation | 31.12.2021 | |
|---|---|---|---|---|
| Bad debt provision | 500 | 100 | - | 600 |
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| For income tax | 1,104 | 1,119 | (15) |
| For VAT | 359 | 135 | 224 |
| Total | 1,463 | 1,254 | 209 |
In the 2020 financial year, the Company has been part of the national tax consolidation scheme pursuant to Articles 117/129 of the Unified Income Tax Law.
At 31 December 2021, income tax receivables include:
relating to the balance of the 2021 income taxes transferred by the subsidiaries to the consolidating company Sabaf S.p.A., in accordance with the provisions of the tax regulations relating to the national tax consolidation and the tax consolidation cotracts entered into between the parties.
Income tax receivables also include €352 thousand of receivables for investments in capital equipment referred to Decree Law 160/2019 and Budget Law 178/2020.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Credits to be received from suppliers | 1,240 | 658 | 582 |
| Advances to suppliers | 426 | 431 | (5) |
| Due from INAIL | 5 | 42 | (37) |
| Other | 258 | 816 | (558) |
| Total | 1,929 | 1,947 | (18) |
Credits to be received from suppliers mainly refer to bonuses paid to the Company for the attainment for the year purchasing objectives, which were achieved in 2021 to a greater extent than in the previous year.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Restricted bank accounts | 1,173 | 1,233 | (60) |
| Currency derivatives | - | 127 | (127) |
| Total | 1,173 | 1,360 | (187) |
At 31 December 2021, a term deposit of €1.173 million, due by 2022, for the portion of the price not yet paid to the sellers of the C.M.I. equity investment and deposited as collateral in accordance with the terms of the C.M.I. acquisition agreement.
The item Cash and cash equivalents, equal to €29,733 thousand at 31 December 2021 (€1,595 thousand at 31 December 2020), refers almost exclusively to bank current account balances.
The Company's share capital consists of 11,533,450 shares with a par value of €1.00 each. The share capital paid in and subscribed did not change during the year.
At 31 December 2021, the structure of the share capital is shown in the table below.
| No. of shares | % of share capital | Rights and obligations | |
|---|---|---|---|
| Ordinary shares | 8,376,760 | 72.63% | -- |
| Ordinary shares with increased vote | 3,156,690 | 27.37% | Two voting rights per share |
| Total | 11,533,450 | 100% |
With the exception of the right to increased vote, there are no rights, privileges or restrictions on the Company. The availability of reserves is indicated in a table at the end of these Explanatory Notes.
With regard to the 2018 - 2020 Stock Grant Plan, following the expiry of the three-year vesting period, during the first half of 2021, 34,946 ordinary shares of the Company were allocated and transferred to the beneficiaries of Cluster 1, through the use of shares already available to the issuer.
No other transactions on treasury shares were carried out during the year.
At 31 December 2021, the Company is the lawful owner of 311,802 treasury shares (2.703% of the share capital), reported in the financial statements as an adjustment to shareholders' equity at a weighted average unit value of €12.52 (the closing stock market price of the Share at 31 December 2021 was €24.00). Further to what was reported in the Interim Management Statement at 31 December 2021 published on 10 February 2022, it is confirmed that the Company recovered the full availability of 311,802 treasury shares on 1 March 2022.
There were 11,221,648 outstanding shares at 31 December 2021 (11,186,702 at 31 December 2020).
The item "Retained earnings, other reserves" of €92,832 thousand included, at 31 December 2021:
• the stock grant reserve of €1,701 thousand, which included the measurement at 31 December 2021 of the fair value of rights assigned to receive Sabaf shares relating to the following mediumand long-term incentive plans:
For details of the Stock Grant Plan, refer to Note 43;
• the hedge accounting reserve, negative for €71 thousand. The following table shows the change in the Cash Flow Hedge reserve related to the application of IFRS 9 on derivative contracts and referring to the recognition in net equity of the effective part of the derivative contracts signed to hedge the foreign exchange rate risk for which the Company applies hedge accounting.
| Opening value at 31 December 2020 | 127 |
|---|---|
| Change during the period | (198) |
| Value at 31 December 2021 | (71) |
The characteristics of the derivative financial instruments that gave rise to the cash flow hedge reserve and the accounting effects on other items in the financial statements are broken down in Note 35, in the paragraph Foreign exchange risk management.
| 31.12.2021 | 31.12.2020 | |||||
|---|---|---|---|---|---|---|
| Current | Non-current | Total | Current | Non-current | Total | |
| Leases | 437 | 1,456 | 1,893 | 474 | 1,633 | 2,107 |
| Unsecured loans | 16,732 | 81,059 | 97,791 | 12,956 | 25,258 | 38,214 |
| Short-term bank loans | 1,841 | - | 1,841 | 10,567 | - | 10,567 |
| Total | 19,010 | 82,515 | 101,525 | 23,997 | 26,891 | 50,888 |
In December 2021, Sabaf S.p.A. issued a €30 million bond fully subscribed by PRICOA with a maturity of 10 years, an average life of 8 years and a fixed coupon of 1.85% per year. This issue enabled the Company to diversify its sources of financing, improve financial flexibility and significantly lengthen the average duration of its debt. The loan described has the following covenants, defined with reference to the Group consolidated figures widely complied with at 31 December 2021 and for which, according to the Group's business plan, compliance is also expected in subsequent years:
During the year, the Company took out new unsecured loans for a total of €45 million. All loans are signed with an original maturity of ranging from 5 to 6 years and are repayable in instalments.
Some of the outstanding unsecured loans have covenants, defined with reference to the consolidated financial statements at the end of the reporting period, as specified below:
widely complied with at 31 December 2021 and for which, according to the Group's business plan, compliance is also expected in subsequent years.
All bank loans are denominated in euro, with the exception of a short-term loan of USD 2 million.
To manage interest rate risk, unsecured loans are either fixed-rate or hedged by IRS. In these separate financial statements, "Other financial liabilities" (Note 15) includes the negative fair value of the IRSs hedging rate risks of unsecured loans pending, for residual notional amounts of approximately €33.4 million and expiry until 30 June 2027. Financial expenses were recognised in the income statement with a balancing entry.
The following table shows the changes in lease liabilities during the year:
| Lease liabilities at 1 January 2020 | 2,047 |
|---|---|
| New agreements signed during 2020 | 515 |
| Repayments during 2020 | (455) |
| Lease liabilities at 31 December 2020 | 2,107 |
| New agreements signed during 2021 | 275 |
| Repayments during 2021 | (489) |
| Lease liabilities at 31 December 2021 | 1,893 |
Note 36 provides information on financial risks, pursuant to IFRS 7.
| 31.12.2021 | 31.12.2020 | |||
|---|---|---|---|---|
| Current | Non-current | Current | Non-current | |
| Payables to A.R.C. shareholders | - | - | 60 | - |
| Payables to C.M.I. shareholders | 1,173 | - | 1,173 | - |
| Derivative instruments on interest rates | 72 | - | 327 | - |
| Currency derivatives | 149 | - | - | - |
| Total | 1,394 | - | 1,560 | - |
The payable to C.M.I. shareholders of €1,173 thousand at 31 December 2021, maturing during 2022, is related to the part of the price still to be paid to the Chinese group Guandong Xingye Investment, seller of C.M.I., which was deposited on a non-interest-bearing restricted account in accordance with contractual agreements and guarantees issued by the seller. Currency derivatives refer to forward sales contracts recognised using hedge accounting. These financial instruments are broken down in Note 35 - Forex risk management.
| At 31 December 2020 | 1,929 |
|---|---|
| Financial expenses | 4 |
| Payments made | (150) |
| Tax effect | (3) |
| At 31 December 2021 | 1,780 |
Actuarial gains or losses are recognised immediately in the comprehensive income statement ("Other comprehensive income") under the item "Actuarial income and losses".
Post-employment benefits are calculated as follows:
| Financial assumptions | ||||
|---|---|---|---|---|
| 31.12.2021 | 31.12.2020 | |||
| Discount rate | 0.40% | 0.23% | ||
| Inflation | 1.30% | 1.00% |
| Demographic theory | ||||
|---|---|---|---|---|
| 31.12.2021 | 31.12.2020 | |||
| Mortality rate | IPS55 ANIA | IPS55 ANIA | ||
| Disability rate | INPS 2000 | INPS 2000 | ||
| Staff turnover | 7% | 6% | ||
| Advance payouts | 2% per year | 5% per year | ||
| Retirement age | pursuant to legislation in force at 31 December 2021 |
pursuant to legislation in force on 31 December 2020 |
| 31.12.2020 | Provisions | Utilisation | 31.12.2021 | |
|---|---|---|---|---|
| Provision for agents' indemnities | 218 | 28 | (1) | 245 |
| Product guarantee fund | 60 | - | - | 60 |
| Provision for tax risks | - | 500 | - | 500 |
| Provision for legal risks | 576 | - | (530) | 46 |
| Total | 854 | 528 | (531) | 851 |
The provision for agents' indemnities covers amounts payable to agents if the Company terminates the agency relationship.
The product guarantee fund covers the risk of returns or charges by customers for products already sold and, if necessary, is adjusted at the end of the financial year on the basis of analyses carried out and past experience.
The fund was adjusted at the end of the year, on the basis of analyses conducted and past experience.
At 31 December 2021, a provision of €500 thousand was recognised in the provisions for tax, expressing the best estimate of the probable
liability following the results of a tax audit on the Company for the years from 2016 to 2018. With regard to the provision for legal risks, note that, at the end of the 2020 financial year, a provision of €500 thousand had been recognised in relation to a patent dispute, for which a settlement was reached with the counterparty at the beginning of 2021. During 2021, the corresponding use of the provision was therefore recognised, against payment.
The provisions for risks, which represent the estimate of future payments made based on historical experience, have not been discounted because the effect is considered negligible.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| Total | 33,678 | 26,204 | 7,474 |
The increase in trade payables is related to higher production volumes of the year. Average payment terms did not change versus the previous year.
At 31 December 2021, there were no overdue payables of a significant amount and the Company did not receive any injunctions for overdue payables.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| To inland revenue for income tax | 2,703 | 1,433 | 1,270 |
| To subsidiaries for income tax | 55 | 276 | (221) |
| To inland revenue for IRPEF tax deductions | 616 | 676 | (60) |
| Other tax payables | - | 74 | (74) |
| Total | 3,374 | 2,459 | 915 |
Payables to inland revenue for income tax are related to IRES for €2,383 thousand and IRAP for €320 thousand.
In the 2020 financial year, the Company has been part of the national tax consolidation scheme pursuant to Articles 117/129 of the Unified Income Tax Law. At 31 December 2021, payables to subsidiaries for
income taxes refer to tax advances received from the subsidiary CGD s.r.l..
Payables for IRPEF tax deductions, relating to employment and selfemployment, were duly paid at maturity.
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| To employees | 5,095 | 4,259 | 836 |
| To social security institutions | 2,238 | 2,094 | 144 |
| Advances from customers | 1,200 | 858 | 342 |
| To agents | 216 | 231 | (15) |
| Other current payables | 652 | 415 | 237 |
| Total | 9,401 | 7,857 | 1,544 |
At the beginning of 2022, payables due to employees and social security institutions were paid in accordance with the scheduled expiry dates. Other current payables include accrued liabilities and deferred income.
| 31.12.2021 | 31.12.2020 | |
|---|---|---|
| Deferred tax assets | 3,323 | 3,892 |
| Deferred tax liabilities | (324) | (230) |
| Net position | 2,999 | 3,662 |
The table below analyses the nature of the temporary differences that determine the recognition of deferred tax liabilities and assets and their changes during the year and the previous year.
| Amortisation and leasing |
Provisions and value adjustments |
Fair value of derivative instruments |
Goodwill | Tax loss | Actuarial evaluation of post-employment benefit |
Other temporary differences |
Total | |
|---|---|---|---|---|---|---|---|---|
| At 31 December 2019 | (476) | 896 | 65 | 1,417 | 419 | 168 | 53 | 2,542 |
| Through profit or loss | 1,403 | (18) | (20) | (177) | (419) | - | 343 | 1,112 |
| To shareholders' equity | - | - | - | - | - | 8 | - | 8 |
| At 31 December 2020 | 927 | 878 | 45 | 1,240 | 0 | 176 | 396 | 3,662 |
| Through profit or loss | (184) | (131) | (10) | (177) | - | - | (160) | (662) |
| To shareholders' equity | - | - | - | - | - | (1) | - | (1) |
| At 31 December 2021 | 743 | 747 | 35 | 1,063 | 0 | 175 | 236 | 2,999 |
Deferred tax assets relating to goodwill refer to the exemption of the value of the investment in Faringosi Hinges s.r.l. made in 2011 pursuant to Law Decree 98/2011, deductible in ten instalments starting in 2018.
As required by the CONSOB memorandum of 28 July 2006, we disclose that the Company's net financial debt is as follows:
| 31.12.2021 | 31.12.2020 | Change | |
|---|---|---|---|
| A. Cash (Note 11) | 8 | 9 | (1) |
| B. Positive balances of unrestricted bank accounts (Note 11) | 29,725 | 1,586 | 28,139 |
| C. Other cash equivalents | - | - | - |
| D. Liquidity (A+B+C) | 29,733 | 1,595 | 28,138 |
| E. Current financial receivables | 1,173 | 1,360 | (187) |
| F. Current bank payables (Note 14) | 1,841 | 10,567 | (8,726) |
| G. Current portion of non-current debt (Note 14) | 17,169 | 13,430 | 3,739 |
| H. Other current financial payables (Note 15) | 1,394 | 1,560 | (166) |
| I. Current financial debt (F+G+H) | 20,404 | 25,557 | (5,153) |
| J. Net current financial debt (I-D-E) | (10,502) | 22,602 | (33,104) |
| K. Non-current bank payables (Note 14) | 82,515 | 26,891 | 55,624 |
| L. Other non-current financial payables | - | - | - |
| M. Non-current financial debt (K+L) | 82,515 | 26,891 | 55,624 |
| N. Net financial debt (J+M) | 72,013 | 49,493 | 22,520 |
The statement of cash flows, which shows the changes in cash and cash equivalents (letter D. of this statement), describes in detail the cash flows that led to the change in the net financial position.
In 2021, sales revenue totalled €144,033,787, up 40.4% from €102,583,189 in 2020.
| 2021 | % | 2020 | % | % Change | |
|---|---|---|---|---|---|
| Europe (excluding Turkey) | 48,788 | 33.9% | 38,724 | 37.7% | +26.0% |
| Turkey | 35,496 | 24.6% | 25,607 | 25.0% | +38.6% |
| North America | 10,088 | 7.0% | 7,792 | 7.6% | +29.5% |
| South America | 20,688 | 14.4% | 13,711 | 13.4% | +50.9% |
| Africa and Middle East | 16,930 | 11.8% | 10,415 | 10.2% | +62.6% |
| Asia and Oceania | 12,044 | 8.4% | 6,334 | 6.2% | +90.1% |
| Total | 144,034 | 100% | 102,583 | 100% | +40.4% |
| 2021 | % | 2020 | % | % Change | |
|---|---|---|---|---|---|
| Valves and thermostats | 60,006 | 41.7% | 45,784 | 44.6% | +31.1% |
| Burners | 63,959 | 44.4% | 42,798 | 41.7% | +49.4% |
| Accessories and other revenues | 20,069 | 13.9% | 14,001 | 13.6% | +43.3% |
| Total | 144,034 | 100% | 102,583 | 100% | +40.4% |
In 2021, demand was solid in all markets, with particularly high peaks in the first half of the year. The increase in sales was very strong in all geographical areas, with peaks in Asia, Africa and the Middle East, indicating an increasingly global presence. Average sales prices in 2021 were 1.5% higher compared with 2020.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Sale of trimmings | 2,696 | 1,147 | 1,549 |
| Services to subsidiaries | 1,295 | 1,150 | 145 |
| Royalties to subsidiaries | 213 | 126 | 87 |
| Contingent income | 307 | 891 | (584) |
| Rental income | 123 | 121 | 2 |
| Use of provisions for risks and charges | 1 | 15 | (14) |
| Other income | 1,560 | 2,197 | (637) |
| Total | 6,195 | 5,647 | 548 |
Services to subsidiaries refer to administrative, commercial and technical services provided within the scope of the Group. Other income includes €638 in revenue from the sale of moulds and equipment and €106 thousand in benefits granted as a tax credit for investments made in 2021 (Law 160/2019 paragraphs 184 to 196).
| 2021 | 2020 | Change | |
|---|---|---|---|
| Commodities and outsourced components |
66,870 | 39,462 | 27,408 |
| Consumables | 5,252 | 3,809 | 1,443 |
| Total | 72,122 | 43,271 | 28,851 |
In 2021, the effective purchase prices of the main raw materials (aluminium alloys, steel and brass) were on average higher than in 2020, with a negative impact of 5.8% of sales.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Outsourced processing | 12,701 | 7,831 | 4,870 |
| Electricity and natural gas | 6,092 | 2,616 | 3,476 |
| Maintenance | 4,975 | 3,827 | 1,148 |
| Advisory services | 2,421 | 1,832 | 589 |
| Transport and export expenses | 2,475 | 1,420 | 1,055 |
| Directors' fees | 477 | 419 | 58 |
| Insurance | 541 | 536 | 5 |
| Commissions | 770 | 573 | 197 |
| Travel expenses and allowances | 136 | 122 | 14 |
| Waste disposal | 539 | 469 | 70 |
| Canteen | 325 | 251 | 74 |
| Temporary agency workers | 487 | 211 | 276 |
| Other costs | 2,315 | 2,102 | 213 |
| Total | 34,254 | 22,209 | 12,045 |
The main outsourced processing carried out by the Company include aluminium die-casting, hot moulding of brass and some mechanical processing and assembly. The increase in costs for outsourced processing reflects the higher levels of activity compared to the previous year.
The increase in energy costs resulted, in addition to the increase in production volumes, from the extraordinary and sudden increase in electricity and gas prices in the second half of the year.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Salaries and wages | 20,670 | 18,744 | 1,926 |
| Social Security costs | 6,433 | 5,718 | 715 |
| Temporary agency workers | 5,229 | 2,002 | 3,227 |
| Post-employment benefit and other costs |
1,643 | 1,446 | 197 |
| Stock Grant plan | 805 | 657 | 148 |
| Total | 34,780 | 28,567 | 6,213 |
Average of the Company headcount at 31 December 2021 totalled 473 employees (335 blue-collars, 125 white-collars and supervisors, 13 managers), compared with 480 in 2020 (345 blue-collars, 124 whitecollars and supervisors, 11 managers). The number of temporary staff with temporary work contract was 115 at 31 December 2021 (82 at the end of 2020).
The item "Stock Grant Plan" included the measurement at 31 December 2021 of the fair value of the options to the allocation of Sabaf shares to employees. For details of the Stock Grant Plan, refer to Note 43.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Provisions for risks | - | 558 | (558) |
| Non-income related taxes and duties |
375 | 413 | (38) |
| Losses and write-downs of trade receivables |
100 | 89 | 11 |
| Contingent liabilities | 53 | 36 | 17 |
| Other provisions | 28 | 26 | 2 |
| Other operating expenses | 172 | 185 | (13) |
| Total | 728 | 1,307 | (579) |
Non-income taxes mainly include IMU, TASI and the tax for the disposal of urban solid waste. Other provisions refer to the allocations to provisions for risks described in Note 17.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Interest paid to banks | 322 | 543 | (221) |
| Banking expenses | 177 | 141 | 36 |
| Other financial expense | 31 | 34 | (3) |
| Total | 530 | 718 | (188) |
Interest paid to banks includes IRS spreads payable that hedge interest rate risks.
In 2021, the Company reported net foreign exchange profit of €427 thousand (net loss of €399 thousand in 2020) due to the gradual strengthening of the dollar against the euro during the year.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Dividends received from Faringosi Hinges Srl |
- | 500 | (500) |
| Dividends received from Okida Elektronik |
176 | 109 | 67 |
| Total | 176 | 609 | (433) |
This item includes dividends received from investee companies.
| 2021 | 2020 | Change | |
|---|---|---|---|
| Current taxes | 2,961 | 934 | 2,027 |
| Deferred tax assets and liabilities |
662 | (1,112) | 1,774 |
| Taxes related to previous financial years |
36 | (89) | 125 |
| Substitute tax | - | 146 | (146) |
| Taxes on foreign dividends |
24 | 15 | 9 |
| Provision for tax risks | 500 | - | 500 |
| Total | 4,183 | (106) | 4,289 |
Current taxes for 2021 are related to IRAP (€759 thousand) and IRES (€2,202 thousand).
With regard to the provision for tax risks, please refer to Note 17.
Reconciliation between the tax burden booked in the financial statements and the theoretical tax burden calculated according to the statutory tax rates currently in force in Italy is shown in the following table:
| 2021 | 2020 | |
|---|---|---|
| Theoretical income tax | 3,414 | 1,513 |
| Taxes related to previous financial years | 28 | (127) |
| Tax effect of dividends from investee companies | (16) | (124) |
| "Iper and Superammortamento" tax benefit | (641) | (694) |
| Realignment between carrying values and tax values of properties | - | (1,360) |
| Substitute tax on realignment of property values | - | 146 |
| Permanent tax differences | 74 | 172 |
| Other differences | - | 2 |
| Tax credit on sanitisation costs | (14) | (28) |
| Provision for tax risks | 500 | - |
| IRES (current and deferred) | 3,345 | (500) |
| IRAP (current and deferred) | 838 | 394 |
| Total | 4,183 | (106) |
Theoretical taxes were calculated applying the current corporate income tax (IRES) rate, i.e. 24%, to the pre-tax result. IRAP is not taken into account for the purpose of reconciliation because, as it is a tax with a different assessment basis from pre-tax profit, it would generate distorting effects.
On 2 June 2021, shareholders were paid an ordinary dividend of €0.55 per share (total dividends of €6,172 thousand).
The Directors have recommended payment of a dividend of €0.60 per share this year. This dividend is subject to approval of shareholders in the annual Shareholders' Meeting and was not included under liabilities in these financial statements.
The dividend proposed is scheduled for payment on 1 June 2022 (ex-date 30 May and record date 31 May).
In accordance with IFRS 7, a breakdown of the financial instruments is shown below, among the categories set forth in IFRS 9.
| 31.12.2021 | 31.12.2020 | |
|---|---|---|
| Financial assets | ||
| Amortised cost | ||
| Cash and cash equivalents | 29,733 | 1,595 |
| Trade receivables and other receivables | 46,991 | 46,972 |
| Non-current loans | 10,708 | 5,537 |
| Other financial assets | 1,173 | 1,360 |
| Hedge Accounting | ||
| Derivatives cash flow hedges (on currency) | - | 127 |
segments in which the Group operates.
| 31.12.2021 | 31.12.2020 | |
|---|---|---|
| Financial liabilities | ||
| Fair Value through profit or loss | ||
| Derivatives cash flow hedges (on interest rates) | 149 | 327 |
| Amortised cost | ||
| Loans | 101,525 | 50,887 |
| Other financial liabilities | 1,173 | 1,233 |
| Trade payables | 33,545 | 26,204 |
| Hedge Accounting | ||
| Derivatives cash flow hedges (on currency) | 71 | - |
The Company is exposed to financial risks related to its operations, mainly:
It is part of Sabaf's policies to hedge exposure to changes in prices, exchange rates and interest rates via derivative financial instruments. Hedging is done using forward contracts, options or combinations of these instruments. Generally speaking, the maximum duration covered by such hedging does not exceed 18 months. The Company does not enter into speculative transactions. When the derivatives used for hedging purposes meet the necessary requisites, hedge accounting rules are followed.
Trade receivables involve producers of domestic appliances, multinational groups and smaller manufacturers in a few or single markets. The Company assesses the creditworthiness of all its customers at the start of supply and systemically at least on an annual basis. After this assess ment, each customer is assigned a credit limit. The Company factors receivables with factoring companies based on without recourse agreements, thereby transferring the related risk.
A credit insurance policy is in place, which guarantees cover for approximately 38% of trade receivables.
Credit risk relating to customers operating in emerging economies is generally attenuated by the expectation of revenue through letters of credit.
The main exchange rate to which the Company is exposed is the euro/ USD in relation to sales made in dollars (mainly in North America) and, to a lesser extent, to some purchases (mainly from Asian manufacturers). Sales in US dollars represented 13.1% of total turnover in 2021, while purchases in dollars represented 4.3% of total turnover. During the year, operations in dollars were partially hedged through forward sales contracts. At 31 December 2021, the Group had in place forward sales contracts of USD 3 million, maturing in December 2022 at an average exchange rate of 1.1658. With reference to these contracts, the Company applies hedge accounting, checking compliance with IFRS 9.
The table below shows the balance sheet and income statement effects of forward sales contracts recognised under hedge accounting.
| Company | Counterparty | Instrument | Maturity | Value date | Notional | Fair value hierarchy |
|---|---|---|---|---|---|---|
| 28/03/2022 | 1,000,000 | |||||
| 27/06/2022 | 500,000 | |||||
| Sabaf S.p.A. | Unicredit | Forward | 28/06/2022 | USD | 500,000 | 2 |
| 27/09/2022 | 500,000 | |||||
| 27/12/2022 | 500,000 |
With reference to financial assets and liabilities in US dollars at 31 December 2021, a hypothetical and immediate revaluation of 10% of euro against the dollar would have led to a loss of €466 thousand.
Owing to the current trend in interest rates, the Company favours fixed-rate indebtedness: medium to long-term loans originated at a variable rate are converted to a fixed rate by entering into interest rate swaps (IRS) at the same time as the loan is opened. At 31 December 2021, IRS totalling €33.4 million were in place, mirrored in mortgages with the same residual debt, through which the Company transformed the floating rate of the mortgages into fixed rate. The derivative contracts were not designated as a cash flow hedge and were therefore recognised using the "fair value through profit or loss" method.
The following table shows the characteristics of the derivative financial instruments described in the previous paragraph.
| Company | Counterparty | Instrument | Maturity | Value date | Notional | Fair value hierarchy |
|---|---|---|---|---|---|---|
| MPS | 30/06/2023 | 1,500,000 | ||||
| Intesa Sanpaolo | 15/06/2024 | 6,000,000 | ||||
| Sabaf S.p.A. | Intesa Sanpaolo | IRS | 15/06/2024 | EUR | 1,850,000 | 2 |
| Crédit Agricole | 30/06/2025 | 9,000,00 | ||||
| Mediobanca | 28/04/2027 | 15,000,000 |
Considering the IRS in place, at the end of 2021 almost all of the Company's financial debt was at a fixed rate. Therefore, at 31 December 2021 no sensitivity analysis was carried out in that the exposure to interest rate risk, linked to a hypothetical increase (decrease) in interest rates, is not significant.
A significant portion of the Company's purchase costs is represented by aluminium, steel and brass. Metal prices rose sharply during 2021, forcing the Company to renegotiate sales prices several times to compensate for the increase in costs. Based on market conditions and contractual agreements, the Company may not be able to pass on changes in raw material prices to customers in a timely and/ or complete manner, with consequent effects on margins. The Company also protects itself from the risk of changes in the price of aluminium, steel and brass with supply contracts signed with suppliers for delivery up to twelve months in advance or, alternatively, with derivative financial instruments. In 2021 and 2020, the Company did not use financial derivatives on commodities.
The management of liquidity and financial debt is coordinated at Group level. The Group operates with a debt ratio considered physiological (net financial debt/shareholders' equity at 31 December 2021 of 55.2%, net financial debt/EBITDA of 1.25) and has unused short-term lines of credit. To minimise the risk of liquidity, the Administration and Finance Department:
An analysis by expiry date of financial payables at 31 December 2021 and 31 December 2020 is shown below.
| At 31 December 2021 | Carrying value | Contractual cash flows |
Within 3 months | From 3 months to 1 year |
From 1 to 5 years | More than 5 years |
|---|---|---|---|---|---|---|
| Unsecured loans and leases | 70,035 | 71,469 | 1,819 | 15,830 | 47,984 | 5,836 |
| Bond issue | 29,649 | 34,440 | - | 555 | 2,220 | 31,665 |
| Short-term bank loans | 2,062 | 2,062 | 2,062 | - | - | - |
| Payables to C.M.I. shareholders | 1,173 | 1,173 | - | 1,173 | - | - |
| Total financial payables | 102,919 | 109,144 | 3,881 | 17,558 | 50,204 | 37,501 |
| Trade payables | 33,678 | 33,678 | 30,896 | 2,782 | - | - |
| Total | 136,597 | 142,822 | 34,777 | 20,340 | 50,204 | 37,501 |
| At 31 December 2020 | Carrying value | Contractual cash flows |
Within 3 months | From 3 months to 1 year |
From 1 to 5 years | More than 5 years |
|---|---|---|---|---|---|---|
| Unsecured loans and leases | 40,320 | 40,832 | 1,874 | 11,777 | 27,174 | 7 |
| Short-term bank loans | 10,567 | 10,567 | 10,567 | - | - | - |
| Payables to A.R.C. shareholders | 60 | 60 | - | 60 | - | - |
| Payables to C.M.I. shareholders | 1,173 | 1,173 | - | 1,173 | - | - |
| Total financial payables | 52,120 | 52,632 | 12,441 | 11,837 | 27,174 | 7 |
| Trade payables | 26,204 | 26,204 | 23,548 | 2,656 | - | - |
| Total | 78,324 | 78,836 | 35,989 | 14,493 | 27,174 | 7 |
The various due dates are based on the period between the end of the reporting period and the contractual expiry date of the commitments, the values indicated in the table correspond to non-discounted cash flows. Cash flows include the shares of principal and interest; for floating rate liabilities, the shares of interest are determined based on the value of the reference parameter at the end of the reporting period and increased by the spread set forth in each contract.
The revised IFRS 7 requires that financial instruments reported in the statement of financial position at fair value be classified based on a hierarchy that reflects the significance of the input used in determining the fair value. IFRS 7 makes a distinction between the following levels:
The following table shows the assets and liabilities valued at fair value at 31 December 2021, by hierarchical level of fair value assessment.
| Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|
| Other financial liabilities (interest rate derivatives) | - | 149 | - | 149 |
| Total assets and liabilities at fair value | - | 149 | - | 149 |
The table below illustrates the impact of all transactions between Sabaf S.p.A. and other related parties on the balance sheet and income statement items and related parties, with the exception of the directors' fees, auditors and key management personnel which is stated in the Report on Remuneration.
| Total 2021 |
Subsidiaries | Other related parties |
Total related parties |
Impact on the total |
|
|---|---|---|---|---|---|
| Non-current financial assets | 10,708 | 10,708 | - | 10,708 | 100% |
| Trade receivables | 45,194 | 15,211 | - | 15,211 | 33.66% |
| Tax receivables | 1,463 | 767 | - | 767 | 52.43% |
| Trade payables | 33,678 | 1,533 | 4 | 1,537 | 4.56% |
| Tax payables | 3,374 | 55 | - | 55 | 1.63% |
| Total 2020 |
Subsidiaries | Other related parties |
Total related parties |
Impact on the total |
|
|---|---|---|---|---|---|
| Non-current financial assets | 5,537 | 5,537 | - | 5,537 | 100% |
| Trade receivables | 45,025 | 16,048 | - | 16,048 | 35.64% |
| Tax receivables | 1,254 | 316 | - | 316 | 25.20% |
| Trade payables | 26,204 | 1,075 | 4 | 1,079 | 4.12% |
| Tax payables | 2,459 | 351 | - | 351 | 14.27% |
| Total 2021 |
Subsidiaries | Other related parties |
Total related parties |
Impact on the total |
|
|---|---|---|---|---|---|
| Revenue | 144,034 | 20,212 | - | 20,212 | 14.03% |
| Other income | 6,195 | 2,030 | - | 2,030 | 32.77% |
| Materials | 72,122 | 3,316 | - | 3,316 | 4.60% |
| Services | 34,254 | 447 | 21 | 468 | 1.37% |
| Capital gains on non-current assets | 238 | 155 | - | 155 | 65.13% |
| Financial income | 318 | 255 | - | 255 | 80.19% |
| Total 2020 |
Subsidiaries | Other related parties |
Total related parties |
Impact on the total |
|
|---|---|---|---|---|---|
| Revenue | 102,583 | 15,221 | - | 15,221 | 14.84% |
| Other income | 5,647 | 1,647 | - | 1,647 | 29.17% |
| Materials | 43,271 | 1,935 | - | 1,935 | 4.47% |
| Services | 22,209 | 458 | 21 | 479 | 2.16% |
| Capital gains on non-current assets | 965 | 723 | - | 723 | 74.92% |
| Write-downs of non-current assets | 761 | 620 | - | 620 | 81.47% |
| Financial income | 202 | 176 | - | 176 | 87.13% |
Relations with subsidiaries mainly consist of:
• charging for intra-group royalties;
Related party transactions are regulated by specific contracts regulated at arm's length conditions.
Pursuant to CONSOB memorandum of 28 July 2006, the following section describes and comments on significant non-recurring events, the consequences of which are reflected in the economic, equity and financial results for the year:
| Shareholders' equity | Net Profit | Net financial debt | Cash flows | |
|---|---|---|---|---|
| Financial statement values (A) | 114,409 | 10,044 | 72,013 | 28,138 |
| Provision for tax risks | 500 | 500 | - | - |
| Total non-recurring operations (B) | 500 | 500 | - | - |
| Financial statement notional value (A + B) | 114,909 | 10,544 | 72,013 | 28,138 |
In these separate financial statements, the Company recognised a provision for tax risks of €500 thousand against potential tax liabilities (Note 17 and Note 28).
The recent conflict between Ukraine and Russia led to a sudden change in the global economic scenario. Although the Company has a non-significant direct exposure to the markets of Russia, Belarus and Ukraine, it is exposed to indirect effects on the price trends of raw materials, electricity and gas, the supply chain and final demand. To date, these effects are not quantifiable as they are related to future developments in the conflict, the outcome of which cannot be determined.
Pursuant to CONSOB memorandum of 28 July 2006, the Company declares that no atypical and/or unusual transactions as defined by the CONSOB memorandum were executed during 2021.
The Company has two other active local units in addition to the registered office in Ospitaletto (Brescia):
Sabaf S.p.A. also issued sureties to guarantee mortgage loans granted by banks to employees for a total of €3,443 thousand (€3,632 thousand at 31 December 2020).
Fees to directors, statutory auditors and executives with strategic responsibilities are described in the Report on Remuneration that will be presented to the shareholders' meeting called to approve these separate financial statements.
Two stock grant plans are in place, namely the 2018 - 2020 Stock Grant Plan and the 2021 - 2023 Stock Grant Plan. The Plans aim to promote and pursue the involvement of the beneficiaries whose activities are considered relevant for the implementation of the contents and the achievement of the objectives set out in the Business Plan, foster loyalty development and motivation of managers, by increasing their entrepreneurial approach as well as align the interests of management with those of the Company's shareholders more closely, with a view to encouraging the achievement of significant results in the economic and asset growth and sustainability of the Company and of the Group.
The Plan was approved by the Shareholders' Meeting on 8 May 2018 and the related Regulations by the Board of Directors on 15 May 2018, subsequently amended as on 14 May 2019.
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 370,000 Options, each of which entitles them to receive free of charge, under the terms and conditions provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share. The free allocation of Sabaf S.p.A. shares is conditional, among other things, on the achievement, in whole or in part of the business objectives related to the ROI, EBITDA and TSR indicators and, for a share not exceeding 30%, of individual objectives, on a progressive basis.
The Plan is intended for persons who hold or will hold key positions in the Company and/or its Subsidiaries, with reference to the implementation of the contents and the achievement of the objectives of the 2018 - 2020 Business Plan. The Beneficiaries were divided into two groups:
The 2018 - 2020 Plan expires on 31 December 2022.
With reference to Cluster 1, based on the level of achievement of the objectives and the other conditions set out in the Plan, 34,946 rights accrued, therefore 34,946 shares have been allocated to the Beneficiaries during 2021.
With regard to Cluster 2, based on the level of achievement of the objectives set out in the Plan, 114,074 rights accrued. The allocation of the relevant shares will be made during 2022 and is conditional on the continuation of the employment relationship with the Beneficiaries at the date of approval of the financial statements for the year 2021 of Sabaf S.p.A..
The Company's shareholders' equity includes the Stock Grant reserve (Note 13), which includes €896 thousand for the fair value measurement of the Rights assigned to Cluster 2 beneficiaries. Please see the explanatory notes to the consolidated financial statements at 31 December 2020 for an explanation of how to determine the fair value of these rights.
The plan was approved by the Shareholders' Meeting on 6 May 2021 and the related Regulations by the Board of Directors on 13 May 2021.
The subject-matter of the Plan is the free allocation to the Beneficiaries of a maximum of 260,000 Options, each of which entitles them to receive free of charge, under the terms and conditions provided for by the Regulations of the relevant Plan, 1 Sabaf S.p.A. Share.The free allocation of Sabaf S.p.A. shares is conditional on the achievement, in whole or in part, with progressiveness, of the business targets related to the ROI and EBITDA and social and environmental targets.
The Plan is intended for persons who hold or will hold key positions in the Company and/or its Subsidiaries, with reference to the implementation of the contents and the achievement of the objectives of the 2021 - 2023 Business Plan. A total of 226,000 Rights were allocated to the Beneficiaries already identified.
The 2021 - 2023 Plan expires on 31 December 2024.
In connection with this Plan, €805 thousand (Note 27) were recognised in personnel costs during the year, an equity reserve of the same amount (Note 13) was recognised as a balancing entry.
In line with the date on which the beneficiaries became aware of the assignment of the rights and terms of the plan, the grant date was set at 13 May 2021.
The main assumptions made at the beginning of the vesting period and the methods for determining the fair value at the end of the reporting period are illustrated below. The following economic and financial parameters were taken into account in determining the fair value per share at the start of the vesting period:
| Share price on grant date adjusted for dividends |
23.09 |
|---|---|
| Dividend yield | 2.60% |
| Expected volatility per year | 28% |
| Interest rate per year | -0.40% |
Based on the exercise right at the different dates established by the Plan Regulations and on the estimate of the expected probability of achieving the objectives for each reference period, the unitary fair value at 31 December 2021 was determined as follows:
| Rights relating to business objectives measured on ROI | |||||
|---|---|---|---|---|---|
| Total value on ROI | 15.82 | 5.54 | |||
| Rights on ROI | 35% | fair value | |||
| Rights relating to business objectives measured on EBITDA | |||||
| Total value on EBITDA | 16.43 | ||||
| Rights on EBITDA | 40% | fair value | 6.57 |
| Rights relating to ESG objectives measured on personell training | |||||
|---|---|---|---|---|---|
| Total value on "Personell training" | 20.41 | ||||
| Rights on "Personell training" | 5% | fair value | 1.02 |
| Rights relating to ESG objectives measured on safety indicator | |||||
|---|---|---|---|---|---|
| Total value on "Safety indicator" | 7.82 | ||||
| Rights on "Safety indicator" | 5% | fair value | 0.39 |
| Rights relating to ESG objectives measured on emissions reduction | |||||
|---|---|---|---|---|---|
| Total value on "Emissions reduction" | 20.41 | ||||
| Rights on "Emissions reduction" | 15% | fair value | 3.06 |
Fair value per share 16.58
In compliance with the requirements of transparency and publicity envisaged pursuant to Law no. 124 of 4 August 2017, article 1, paragraphs 125-129, which imposed on companies the obligation to indicate in the explanatory notes "grants, contributions, and in any case economic advantages of any kind", the following are the details of the relative amounts, accounted for "on a cash basis", in addition to what has already been published in the National State Aid Register transparency of individual aid.
| Statutory References |
Contribution value |
Disbursing Subject |
|---|---|---|
| Super/Iper ammortamento (Super/ Hyper amortisation) |
641 | Italian State |
| Energy-intensive contributions |
485 | Italian State |
| Sanitisation credit | 14 | Italian State |
| Total | 1,196 |
LIST OF EQUITY INVESTMENTS IN SUBSIDIARIES1
Iperammortamento (Hyper amortisation): it allows an over-estimation for tax purposes of capital equipment to which "Industry 4.0" benefits are applicable, which differs according to the year of acquisition. The reference regulations are included in the Budget Laws from the year 2017 to the year 2020 and Budget Law 2021, Law 178/2020.
Super ammortamento (Super amortisation): it allows an overestimation for tax purposes of 130% or 140% of investments in new capital equipment; the reference regulations are contained in Law no. 205 of 27 December 2017.
Energy-intensive contributions: Accessible grants for companies that consume a lot of electricity, whose regulatory reference is the MISE Decree of 21 December 2017.
Tax credit for sanitisation and the purchase of personal protective equipment: tax credit equal to 60% of the expenses incurred in June, July and August 2021 with reference to Art. 32 of Law Decree no. 73 of 25 May 2021.
| Company name | Registered offices | Share capital at 31 December 2021 |
Shareholders | % of ownership | Shareholders' equity at 31 December 2021 |
2021 profit (loss) |
|---|---|---|---|---|---|---|
| Faringosi Hinges s.r.l. | Ospitaletto (BS) | EUR 90,000 | Sabaf S.p.A. | 100% | EUR 8,461,977 | EUR 1,102,439 |
| Sabaf do Brasil Ltda | Jundiaì (Brazil) | BRL 53,348,061 | Sabaf S.p.A. | 100% | BRL 99,168,885 | BRL 8,840,503 |
| Sabaf US Corp. | Plainfield (USA) | USD 200,000 | Sabaf S.p.A. | 100% | USD 179,369 | USD 46,748 |
| Sabaf Appliance Components (Kunshan) Co., Ltd. |
Kunshan (China) | EUR 7,900,000 | Sabaf S.p.A. | 100% | CNY 10,461,803 | CNY -3,349,677 |
| Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki |
Manisa (Turkey) | TRY 80,000,000 | Sabaf S.p.A. | 100% | TRY 212,728,107 | TRY -35,165,181 |
| A.R.C. s.r.l. | Campodarsego (PD) |
EUR 45,000 | Sabaf S.p.A. | 100% | EUR 7,665,156 | EUR 883,555 |
| Sabaf S.p.A. | 30% | |||||
| Okida Elektronik Sanayi ve Tickaret A.S. |
Istanbul (Turkey) | TRY 5,000,000 | Sabaf Beyaz Esya Parcalari Sanayi Ve Ticaret Limited Sirteki |
70% | TRY 156,217,914 | TRY 77,149,853 |
| Sabaf Mexico Appliance Components |
San Louis Potosì (Mexico) |
USD 3,650,000 | Sabaf S.p.A. | 100% | PESOS 71,264,460 | PESOS -3,511,040 |
| C.M.I s.r.l. | Valsamoggia (BO) | EUR 1,000,000 | Sabaf S.p.A. | 100% | EUR 15,503,588 | EUR 3,962,079 |
| C.G.D. s.r.l. | Valsamoggia (BO) | EUR 26,000 | C.M.I s.r.l. | 100% | EUR 1,050,145 | EUR 234,316 |
| Sabaf India Private Limited | Bangalore (India) | INR 153,833,140 | Sabaf S.p.A. | 100% | INR 148,278,330* | INR -5,554,810* |
| Handan A.R.C. Burners Co., Ltd. | Handan (China) | RMB 3,000,000 | A.R.C. s.r.l. | 51% | RMB 1,860,639 | RMB -68,027 |
* The values shown for Sabaf India Private Limited refer to 31 March 2021, the local reporting date.
None.
| Description | Amount | Possibility of utilisation |
Available share |
Amount subject to taxation for the company in the case of distribution |
||
|---|---|---|---|---|---|---|
| Capital reserves: | ||||||
| Share premium reserve | 10,002 | A, B, C | 10,002 | 0 | ||
| Revaluation reserve, Law 413/91 | 42 | A, B, C | 42 | 42 | ||
| Revaluation reserve, Law 342/00 | 1,592 | A, B, C | 1,592 | 1,592 |
| Retained earnings: | |||||
|---|---|---|---|---|---|
| Legal reserve | 2,307 | B | 0 | 0 | |
| Other retained earnings | 72,912 | A, B, C | 72,912 | 0 | |
| Revaluation reserve, Law Decree 104/20 | 4,873 | A, B | 4,873 | 4,727 |
| Valuation reserve: | ||||
|---|---|---|---|---|
| Post-employment benefit actuarial provision | (526) | 0 | 0 | |
| Reserve for Stock Grant plan | 1,701 | 0 | 0 | |
| Hedge accounting reserve | (71) | 0 | 0 | |
| Total | 92,832 | 89,421 | 6,361 |
A: for share capital increase
B: to hedge losses
C: for distribution to shareholders
| Gross value | Cumulative depreciation | Net value | ||
|---|---|---|---|---|
| Law 72/1983 | 137 | (137) | 0 | |
| 1989 merger | 516 | (501) | 15 | |
| Investment property | Law 413/1991 | 17 | (17) | 0 |
| 1994 merger | 1,320 | (1,063) | 257 | |
| Law 342/2000 | 2,870 | (2,712) | 158 | |
| 4,860 | (4,430) | 430 | ||
| Law 576/75 | 180 | (180) | 0 | |
| Law 72/1983 | 2,180 | (2,180) | 0 | |
| Plant and equipment | 1989 merger | 6,140 | (6,140) | 0 |
| 1994 merger | 6,820 | (6,820) | 0 | |
| 15,320 | (15,320) | 0 | ||
| Industrial and commercial equipment | Law 72/1983 | 161 | (161) | 0 |
| Other assets | Law 72/1983 | 50 | (50) | 0 |
| Total | 20,391 | (19,961) | 430 |
Sabaf S.p.A. is a company organised under the legal system of the Republic of Italy.
| Registered and administrative office |
Via dei Carpini, 1 - 25035 Ospitaletto (Brescia) | Tax R.E.A. Brescia 347512 information |
|---|---|---|
| Contacts | Tel: +39 030 - 6843001 | Tax Code 03244470179 |
| Fax: +39 030 - 6848249 | VAT Number 01786910982 | |
| E-mail: [email protected] | ||
| Web site: www.sabafgroup.com |
The following table, prepared pursuant to Art. 149-duodecies of the CONSOB Issuers' Regulation, shows fees relating to 2021 for auditing services and for services other than auditing provided by the Independent Auditors. No services were provided by entities belonging to the network.
| (€/000) | Party providing the service | Fees pertaining to the 2021 financial year |
|---|---|---|
| Audit | EY S.p.A | 35 |
| Certification services | EY S.p.A | - |
| Other audit services | EY S.p.A | 332 |
| Total | 68 |
pursuant to Art. 154-bis of Legislative Decree 58/98
Pietro Iotti, the Chief Executive Officer, and Gianluca Beschi, the Financial Reporting Officer of Sabaf S.p.A., have taken into account the requirements of Art. 154-bis, paragraphs 3 and 4, of Legislative Decree 58 of 24 February 1998 and can certify:
of the administrative and accounting procedures for the formation of the separate financial statements during the 2021 financial year.
They also certify that:
Ospitaletto, 22 March 2022
Chief Executive Officer Pietro Iotti
The Financial Reporting Officer Gianluca Beschi
in accordance with Art. 2429, paragraph 2 of the Italian Civil Code and Art. 153 of Legislative Decree no. 58/1998
The Board of Statutory Auditors of SABAF S.p.A. (hereinafter also "SABAF" or "Company"), pursuant to Art. 153 of Legislative Decree no. 58 of 1998 (hereinafter also T.U.F.) and Art. 2429, paragraph 2 of the Italian Civil Code, is called upon to report to the Shareholders' Meeting called to approve the Financial Statements on the supervisory activity carried out during the financial year in the performance of its duties on any omissions and reprehensible facts found and on the results of the financial year, as well as to formulate proposals regarding the Financial Statements, the approval thereof and matters falling within its competence.
First of all, note that the Board of Directors called the Shareholders' Meeting for the approval of the Financial statements for the year 2021 on 28 April 2022 and, therefore, within the term of one hundred and twenty days pursuant to Article 2364 of the Italian Civil Code. Note that the financial statement report is made available to the public in accordance with the terms of Art. 154-ter of the T.U.F..
During the year ended 31 December 2021 and up to date, the Board of Statutory Auditors carried out its supervisory activities in compliance with Law provisions, Rules of Behaviour of the Board of Statutory Auditors of listed companies issued by the Italian Board of Certified Public Accountants and Bookkeepers, the CONSOB provisions on corporate controls, the new Corporate Governance Code, as well as by the provisions contained in Art. 19 of Legislative Decree 39/2010.
The financial statements of SABAF were prepared in accordance with the IAS/IFRS international accounting standards issued by the International Accounting Standards Board (IASB) and approved by the European Union, as well as in accordance with the provisions issued by CONSOB in implementation of Art. 9, paragraph 3, of Legislative Decree 38/2005. The Financial Statements are also in XHTML - ESEF format in compliance with Legislative Decree No. 25 of 15 February 2016 implementing EU Directive 2013/50.
The Company's Financial Statements were prepared in accordance with the law and accompanied by the documents required by the Italian Civil Code and the T.U.F.. Moreover, in accordance with law provisions, the Company prepared the Consolidated financial statements and the consolidated disclosure of non-financial information for the year 2021.
The Board of Statutory Auditors acquired the information necessary for the performance of the supervisory duties assigned to it by attending the meetings of the Board of Directors and the Board Committees, the hearings of the Company's and the Group's management, the information acquired from the competent company structures, as well as through the additional control activities carried out.
The Board of Statutory Auditors in office at the date of this Report was appointed by the Shareholders' Meeting of 6 May 2021 in the persons of Alessandra Tronconi (Chairman), Maria Alessandra Zunino de Pignier (Statutory Auditor), Mauro Giorgio Vivenzi (Statutory Auditor), as well as Christian Carini and Federico Pozzi (Alternate Auditors). The control body will remain in office for three financial years and will expire on the date of the Shareholders' Meeting called to approve the Financial Statements for the year 2023.
The appointment was made on the basis of two lists submitted by the Shareholders Cinzia Saleri S.A.p.A and Quaestio Capital SGR S.p.A. respectively, in compliance with the applicable law, regulatory and statutory provisions.
The composition of the Board of Statutory Auditors complies with the gender distribution criterion set forth in Art. 148 of the T.U.F..
At the time of its appointment, the Board of Statutory Auditors checked the existence of the independence requirement as part of the broader process of self-assessment of the control body pursuant to Standard Q.1.1 of the Rules of Behaviour of listed companies; the check was carried out on the basis of the criteria envisaged by the aforesaid Standards and by the provisions of the Corporate Governance Code applicable to independent directors.
This assessment was carried out again on 10 March 2022 and consequently communicated to the Board of Directors, which disclosed it in the Report prepared pursuant to Art. 123-bis of the T.U.F..
In carrying out its duties, the Board of Statutory Auditors carried out the supervisory activities required by Art. 2403 of the Italian Civil Code, Art. 149 of the T.U.F., Art. 19 of Legislative Decree No. 39/2010, CONSOB recommendations on corporate controls and the activities of the Board of Statutory Auditors and referring to the indications contained in the new Corporate Governance Code, as well as the Rules of Behaviour of the Board of Statutory Auditors of listed companies.
In particular, the Board of Statutory Auditors notes that the Shareholders' Meeting of 6 May 2021 appointed, according to the list voting system set forth in Article 12 of the Company's Articles of Association, the new Board of Directors composed of Claudio Bulgarelli, Pietro Iotti, Gianluca Beschi, Alessandro Potestà, Cinzia Saleri, and the independent directors Nicla Picchi, Carlo Scarpa, Stefania Triva and Daniela Toscani. The Shareholders' Meeting also
set: (i) the total annual remuneration of the Board of Directors at €198,000.00, excluding the remuneration due to Directors holding special offices pursuant to Art. 2398, paragraph 3, of the Italian Civil Code, the determination of which was delegated to the Board of Directors, and (ii) the duration of the Board of Directors fixed until the date of approval of the Financial statements for the year ending 31 December 2023.
Following the appointment of the new Board of Directors, the latter met on the same date to appoint Bulgarelli as Chairman, Picchi as Vice Chairman and Lead Independent Director, Iotti as Chief Executive Officer, with broad powers and proxies, and Beschi as Chief Executive Officer with proxies and powers mainly in the financial area, and to assess the independence of the independent directors pursuant to the T.U.F. and the Corporate Governance Code. At that meeting, the Board also appointed:
(a) Giuseppe Saleri as Honorary Chairman until his revocation or resignation,
(b) pursuant to Article 154-bis of the T.U.F., Gianluca Beschi as the Financial Reporting Officer,
(c) pursuant to Legislative Decree No. 231/2001, the Supervisory Body composed of Nicla Picchi (Chairman) and Giuseppe Garzillo, defining the annual remuneration due to each of them as €15,000.00 and the annual expense fund as €20,000.00, and
(d) the following committees in accordance with the Corporate Governance Code:
During the Board of Directors' meeting of 13 May 2021 convened to resolve, among other things, on the determination of the remuneration for the office of Chairman, Vice Chairman and Chief Executive Officer and attendance at Committee meetings, the Board of Statutory Auditors, pursuant to Art. 2389, paragraph 3 of the Italian Civil Code, expressed its favourable opinion on the proposal prepared by the Remuneration and Nomination Committee.
Moreover, as part of its functions, the Board of Statutory Auditors:
the examination of company documents and the analysis of the results of the work carried out by the Independent Auditors;
As required by Recommendation 19 of the Corporate Governance Code, with the support of the Remuneration and Nomination Committee, the Board of Directors expressed its assessment of the size and composition of the Board and its operation, as well as the size, composition and operation of the board committees. The assessment - carried out on the basis of the results of a selfassessment questionnaire filled in by all the members of the Board of Directors - used the assessment criteria already adopted in the previous year.
The Board also acknowledges that it has issued its consent, pursu-
ant to Art. 5, paragraph 4, of Regulation (EU) 2014/537, to the provision by the Independent Auditors EY S.p.A. of services other than the external audit to C.M.I. S.r.l. belonging to the SABAF Group.
The Board of Statutory Auditors also gave its consent, pursuant to Art. 2426, paragraph 1, number 5, of the Italian Civil Code, to the recognition in the financial statements of development costs with a multi-year use of €1,679,000.
Pursuant to Art. 19 of Legislative Decree 39/2010 (Consolidated External Audit Act), the Board of Statutory Auditors is required to supervise:
The Board of Statutory Auditors carried out its activities in collaboration with the Control and Risk Committee in order to coordinate their responsibilities and avoid overlapping of activities.
The Board of Statutory Auditors supervised the existence of rules and procedures relating to the process of formation and dissemination of financial information. In this regard, it should be noted that the Report on Corporate Governance and Ownership Structures illustrates how the Group defined its Internal Control and Risk Management System in relation to the financial reporting process at the consolidated level. The Financial Reporting Officer is Gianluca Beschi. The Financial Reporting Officer is supported by the Internal Audit Department to check the operation of the administrative and accounting procedures through control testing.
The Board of Statutory Auditors acknowledges that it has received adequate information on the monitoring of business processes with an administrative and accounting impact within the Internal Control System, carried out both during the year in relation to the regular management reports, and during the closing of the accounts for the preparation of the Financial Statements, in compliance with the monitoring and certification requirements to which SABAF is subject pursuant to Law no. 262/2005. In particular, the Board of Statutory Auditors acknowledged the Risk Assessment for 2021, as well as the periodic update on testing activities pursuant to Law no. 262/2005.
The Board of Statutory Auditors also received adequate information regarding the impact of the COVID-19 health emergency on the business of the Company and its subsidiaries. In this regard, it is acknowledged that the Italian plants of the SABAF Group adopted the control measures envisaged by the regulations in force from time to time for access to workplaces, such as the monitoring of body temperature and the control of COVID-19 green certification, known as "Green Pass".
The adequacy of the administrative and accounting system was also assessed through the acquisition of information from the heads of the respective departments and the analysis of the results of the work carried out by the Independent Auditors. No particular critical issues or elements hindering the issue of the certification by the Financial Reporting Officer and by the Chief Executive Officer concerning the adequacy of the administrative and accounting procedures for the preparation of the Financial statements of SABAF and the Consolidated Financial Statements for the year 2021 emerged.
The Board of Statutory Auditors supervised compliance with the regulations related to the preparation and publication of the Half-Yearly Report and the Interim Management Reports, as well as the settings given to them and the correct application of the accounting standards, also using the information obtained from the Independent Auditors.
Furthermore, it is acknowledged that:
In particular, all the main phases of the audit activity were illustrated to the Board of Statutory Auditors, including the identification of the risk areas, with a description of the related audit procedures adopted; moreover, the main accounting principles applied by SABAF have been followed.
The Board also acknowledges that the Independent Auditors EY S.p.A. issued their opinions on the Consolidated Financial Statements and the Separate Financial Statements on 4 April 2022 and also issued on the same date the Additional Report to the Internal Control and Audit Committee pursuant to Art. 11 of Regulation (EU) 2014/537.
The reports on the Separate financial statements and the Consolidated financial statements do not give rise to any observations or requests for information.
It is also acknowledged that the Independent Auditors expressed, in the reports mentioned above, a positive opinion with regard to consistency with the financial statements and compliance with the law with reference:
In the audit work, a special attention was paid to the key aspects relating to the impairment test. Moreover, the reports issued by the Independent Auditors do not reveal any significant shortcomings in the Company's internal control system for financial information and accounting system.
The Board of Statutory Auditors supervised the independence of the Independent Auditors EY S.p.A., verifying the type and extent of services other than auditing with reference to SABAF and its subsidiaries and obtaining explicit confirmation from the Independent Auditors that the independence requirement was met. The statement on independence has been included, pursuant to Art. 11, paragraph 2, letter a), of Regulation (EU) 2014/537, in the above-mentioned Additional Report.
The fees paid by the SABAF Group to the Independent Auditors and to the companies belonging to the network of the Independent Auditors themselves are as follows:
| ASSETS | AMOUNT €/000 |
|---|---|
| Audit | 130 |
| Certification services | - |
| Other services | 37 |
| Total | 167 |
In the light of the above, the Board of Statutory Auditors considers that the Independent Auditors EY S.p.A. meet the requirement of independence.
The Board of Statutory Auditors assessed and supervised the adequacy of internal control and the effectiveness of the internal control and risk management systems. The Board of Statutory Auditors acknowledges that it has verified the most significant activities carried out by the overall internal control and risk management system by attending the meetings of the Control and Risk Committee (also with functions of Committee for related party transactions) attended by:
The Board of Statutory Auditors also acknowledges that it attended the periodic meetings among the Company's control bodies attended by:
In particular, as part of these activities, the Board of Statutory Auditors acknowledges that it has received and examined:
• the periodic reports on the activities carried out, prepared by the
Control and Risks Committee and the Internal Audit department;
The Board of Statutory Auditors then reviewed every six months the periodic reports on the activities carried out by the Supervisory Body and examined the activity plan and the budget allocated for 2021. Similarly, the Board of Statutory Auditors acknowledged the compliance with the provisions of Legislative Decree no. 231/2001 and the activity plan for 2021, examining and agreeing with the amendments made during the year to the Organisation and Management Model pursuant to Legislative Decree no. 231/2001.
Following the activities carried out during the 2021 financial year, as detailed above, the Board of Statutory Auditors shared the positive assessment expressed by the Control and Risk Committee with regard to the adequacy of the Internal Control and Risk Management System.
The main transactions carried out by the Company during 2021, with respect to which the Board of Statutory Auditors monitored compliance with the principles of proper management, are summarised below.
On 12 October 2021, the Company completed the purchase of 30% of the capital of A.R.C. S.r.l. from Loris Gasparini, in performance of the agreement that had been signed between the parties in 2016, when Sabaf had acquired 70% of A.R.C. S.r.l. The price for the acquisition of this equity investment was €1,650,000; as a result of this acquisition, the Company holds 100% of the share capital of A.R.C. S.r.l..
On 2 November 2021, the Company completed the purchase of 15.75% of the share capital of C.M.I. S.r.l., by the minority shareholder Starfire Industrial Engineering S.r.l. The purchase price was €4,743,000. As a result of this acquisition, the Company now holds 100% of the share capital of C.M.I. s.r.l..
Moreover, during the 2021 financial year, the Company implemented an important operation aimed at providing new resources to support the development objectives it intends to pursue. To this end, in December 2021, the Company completed the placement of a senior, unsecured, non-convertible and non-subordinated bond loan for a value of €30 million fully subscribed by PRICOA Private Capital Group (one of the leading operators in the international private placement market). The bonds were issued in a single tranche, have a maturity of 10 years and an average life of 8 years. The fixed coupon is 1.85%. With reference to this transaction, the Board of Statutory Auditors certified, pursuant to and for the purposes of Art. 2412 of the Italian Civil Code, compliance with the limit indicated in Article 2412, paragraph 1,
Note that, in the second half of December 2021, the Company learned of the erroneous enforcement of a decision to seize - with registration of the Treasury Shares in the name of the Fondo Unico di Giustizia (Asset forfeiture fund) - concerning 311,802 treasury shares (corresponding to 2.703% of the Company's share capital) in pursuance of a criminal sentence of which the Company has no knowledge. Therefore, the Company carried out the checks required and started any appropriate legal action, in acceptance of the application for an enforcement review, the recognition by order pronounced inaudita altera parte on 22 January 2022 of the unlawfulness of the enforcement of the seizure of the Treasury Shares and the revocation of such seizure, with the consequent order to return the treasury shares to the Company. On 1 March 2022, SABAF recovered the full availability of 311,802 treasury shares.
In terms of ordinary operations, SABAF's activities continued in line with previous years and consisted of industrial activities, strategic and management coordination of the Group, the search for the optimisation of the Group's financial flows, as well as the search and selection of equity investments with the aim of accelerating the Group's growth.
Following the supervision and control activities carried out during the year, the Board of Statutory Auditors can certify that:
The Board of Statutory Auditors, during the financial year ended 31 December 2021, assessed the application of the corporate governance rules set out in the Corporate Governance Code and the relative level of compliance, also by analysing the Report on corporate governance and ownership structures and comparing its contents with what emerged during the general supervisory activity carried out during the year. The Board also acknowledges that, on 16 December 2021, the Company's Board of Directors adopted the Corporate Governance Manual setting out the principles, rules and operating procedures to enable the Company to implement the recommendations of the Corporate Governance Code.
Moreover, compliance with the obligation on the part of SABAF to inform the market in its Report on corporate governance and ownership structures of its level of compliance with the Code itself was assessed, also in accordance with the provisions of Art. 123-bis of the T.U.F.. The Board of Statutory Auditors is of the opinion that the Report on corporate governance was prepared in accordance with the provisions of Art. 123-bis of the T.U.F. and the Corporate Governance Code and following the format made available by the Corporate Governance Committee of Borsa Italiana S.p.A.
With regard to the Separate financial statements for the year ended 31 December 2021, the Consolidated financial statements for the year ended on the same date and the related Report on operations, note the following:
when preparing the financial statements, did not depart from the law provisions pursuant to Art. 2423, paragraph 5 of the Italian Civil Code;
In relation to the presentation of the Consolidated disclosure of non-financial information, the Board of Statutory Auditors, in compliance with Legislative Decree no. 254 of 30 December 2016, supervised compliance with the provisions set out in the decree itself and in CONSOB resolution no. 20267 of 18 January 2018 for the preparation of the disclosures in question, also acquiring the certification issued by the appointed auditor EY S.p.A. on 4 April 2022. This activity did not reveal any facts that could be reported in this report.
The Board of Statutory Auditors supervised the adequacy of the instructions given by the Company to the subsidiaries, in accordance with Art. 114, paragraph 2 of the T.U.F..
Periodic meetings with the management and the company in charge of Internal Audit did not reveal any critical elements to be reported in this report. Finally, we acknowledged that to date no communications have been received from the Control Bodies of the Subsidiaries containing findings to be noted in this report.
In relation to the provisions of Art. 2391 bis of the Italian Civil Code, the Board of Statutory Auditors acknowledges that the Board of Directors adopted a procedure for the regulation of Related Party Transactions, whose main objective is to define the guidelines and criteria for identifying related party transactions and setting out roles, responsibilities and operating methods so as to guarantee, for such transactions, adequate information transparency and the related procedural and substantial correctness.
That procedure was prepared in compliance with what was established by the CONSOB Regulation on Related Parties (no.17221 dated 12 March 2010 as amended) and was last updated by the Board of Directors on 3 August 2021 in order to implement the amendments made to the aforementioned Regulation by CONSOB Resolution No. 21624/2020.
The Board of Statutory Auditors supervised the effective application
of the rules by the Company and has no observations to make in this regard in this Report
With reference to the Covid-19 pandemic, note that in the Explanatory Notes it is stated that the "Management has reviewed the Company's exposure to the effects of the COVID-19 pandemic and its impact on the Company's financial position, results and cash flows, especially with regard to the recoverability of the value of intangible assets, the measurement of receivables, the measurement of inventories and the management of financial risks, with a special reference to credit and liquidity risks. The analysis carried out did not reveal any critical situations and the factors related to the COVID-19 pandemic did not have a significant impact on the opinions and estimates used in preparing these Separate Financial Statements."
Note that the Explanatory Notes state that "on 31 March 2021, the IASB issued the document "Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16)" by which it extends by one year the period of application of the amendment to IFRS 16, issued in 2020, relating to the accounting for facilities granted to lessees due to Covid-19. These changes that apply as from 1 April 2021 had no impact on the Group's separate financial statements."
Also note that, in the context of the Covid-19 pandemic, in order to mitigate the risks of contagion, all Group companies promptly adopted preventive measures and strict protocols, which are currently in force and constantly adapted based on best practice.
The Notes to the Financial Statements acknowledge that "the Group assessed that it is a going concern in accordance with paragraphs 25 and 26 of IAS 1, also due to the strong competitive position, high profitability and solidity of the financial structure."
The Board of Statutory Auditors paid particular attention to the assessment carried out by the Company, both with regard to the existence of the going concern requirement and to the adequacy of the internal control system.
Russia's military invasion of Ukraine starting on 24 February 2022, together with the economic and financial sanctions adopted by the European Union and other countries against Russia and Belarus, appear to be leading to a situation of macroeconomic uncertainty that could negatively impact the global economy.
In line with Consob's request in its warning notice of 18 March 2022, the Company's Directors acknowledged the risks related to the ongoing conflict in the Report on Operations, highlighting that the Group has a non-significant direct exposure to the markets of Russia, Belarus and Ukraine, it is exposed to indirect effects on the price trends of raw materials, electricity and gas, the supply chain and final demand. Also in line with Consob's request in its warning notice of 18 March
2022, the Board of Statutory Auditors also acknowledges that the Company has put in place organisational control units on cybersecurity both within the procedures and protocols envisaged by the Organisation and Management Model pursuant to Legislative Decree no. 231/2001, and within its own internal control system, as well as a specific insurance policy aimed at protecting the Company from the risk of security breaches and violation of the confidentiality of personal data.
On 22 March 2022, the Board of Directors decided to propose to the Shareholders' Meeting that the Company's 2021 profit be allocated as follows:
The Board of Statutory Auditors expresses its favourable opinion for the approval of the Separate financial statements at 31 December 2021 and has no objections to make to the draft resolution presented by the Board of Directors as formulated in the Explanatory Notes and in the Directors' Report on Operations.
Ospitaletto, 5 April 2022
The Board of Statutory Auditors
Maria Alessandra Zunino de Pignier
Alessandra Tronconi
Statutory Auditor
Mauro Vivenzi
pursuant to Art. 123-ter of the T.U.F. and Art. 84-quater of the Issuers' Regulations
240 248 Section I - Remuneration policy Section II - Remuneration paid
Sabaf S.p.A.'s General Remuneration Policy (hereinafter also "remuneration policy"), approved by the Board of Directors on 22 December 2011, later updated on 20 March 2013, 4 August 2015, 26 September 2017, 24 March 2020 and 23 March 2021, defines the criteria and guidelines for the remuneration of members of the Board of Directors, Executives with strategic responsibilities and members of the Board of Statutory Auditors.
The remuneration policy was prepared:
The remuneration policy lasts three years.
at the suggestion of the Chief Executive Officer, defines the incentive plans based on short-term variable remuneration for company Management and other employees;
at the suggestion of the Remuneration and Nomination Committee, resolves to assign non-monetary benefits to executives;
The Board of Directors is responsible for properly implementing the remuneration policy.
monitors the actual application of the remuneration policy and assesses the level of achievement of the short- and long-term variable incentive objectives of Directors and executives;
prepares the proposals to the Board of Directors of remuneration plans based on financial instruments;
The Remuneration and Nomination Committee currently in office comprises three non-executive members, the majority of them independent (Daniela Toscani, Stefania Triva, e Alessandro Potestà), with the knowledge and experience in accounting, finance and remuneration policies that is deemed adequate by the Board of Directors. Minutes of the Committee meetings are taken and signed by the chairman of the meeting and the secretary - are kept in chronological order together with the relevant documentation.
The Chairman of the Committee reports to the Board of Directors during the meeting immediately after with regard to the activities carried out by the Committee.
No further rules on the methods of operation of the Committee are currently envisaged.
Actually enacts what is decided upon by the Board of Directors.
No independent expert took part in the preparation of the remuneration policy. The Company availed itself of the legal advice of Studio Trifirò & Partners in Milan.
The Company's intention is that the Remuneration Policy:
The remuneration policy envisages the structuring of the remuneration of executive directors and Executives with Strategic Responsibilities in such a way that it is significantly made up of variable remuneration, including financial instruments: (i) whose payment is conditional on the achievement of common objectives (in particular, Group EBITDA and EBIT) and individual objectives, not only of an economic-financial nature, but also of a technicalproductive and/or socio-environmental nature; (ii) subject, in part, to adequate retention and deferral mechanisms.
| Attracts, motivates and increases the loyalty of persons with appropriate professional expertise |
Brings the interests of the management into line with those of the shareholders |
||
|---|---|---|---|
| Favours the creation of sustainable value for shareholders in the medium to long term |
Protects the principles of internal equity and diversity |
The objectives to which the disbursement of significant portions of variable remuneration is conditioned are structured in such a way as to prevent them from being achieved through short-term management choices that would potentially undermine the sustainability and/or the Company's ability to generate profit in the long term.
In this context, the policy aims to encourage the achievement of the strategic objectives set out in the pro tempore business plans in force and to create long-term value for stakeholders, also in line with the principles of corporate social responsibility.
The principles and characteristics of the remuneration package regulated by the remuneration policy for the persons to whom the policy applies follow the same approach for determining, in general, the remuneration packages offered to employees. In defining each remuneration package proposed by Sabaf to its personnel, the following points are considered as priority elements for assessment:
In preparing the remuneration package referred to in this remuneration policy, account was therefore taken of the fact that employees are generally offered remuneration that includes, in addition to the pay envisaged by the National Collective Labour Contract for the metal and engineering industry, supplemented by second-level negotiations, an individual fixed component and variable components based on the achievement of common or individual objectives. The training opportunities provided and access to the company welfare platform are also part of the remuneration, incentive and enhancement system. Sabaf also aims to establish and maintain effective and efficient working partnerships, aimed at the pursuit of general and individual objectives and, in this perspective, also to encourage - where possible - the development of smart working conditions, including through the use of technologies that ensure continuous value for the company and for individuals and that improve work-life balance.
The definition of a fair and sustainable remuneration package takes into account three main tools:
Each remuneration component is analysed below.
The fixed component of the Directors' remuneration is such that it is able to attract and motivate individuals with appropriate expertise for the roles entrusted to them within the Board, and is set with reference to the remuneration awarded for the same positions by other listed Italian industrial groups of a similar size.
The Shareholders' Meeting determines the fixed remuneration paid to the members of the Board of Directors.
With regard to the remuneration for Directors holding special offices, the Board of Directors, at the suggestion of the Remuneration and Nomination Committee and subject to the opinion of the Board of Statutory Auditors, determines the additional fixed remuneration.
Directors who sit on committees formed within the Board (Control, Risk and Sustainability Committee, Remuneration and Nomination Committee) are paid fixed remuneration intended to reward the commitment required of them.
Executives with strategic responsibilities are paid a fixed annual remuneration, determined so that it is sufficient in itself to guarantee an appropriate basic salary level, even in the event that the variable components are not paid owing to a failure to reach the objectives.
The members of the Board of Statutory Auditors are paid a fixed remuneration, the amount of which is determined by the Shareholders' Meeting, at the time of their appointment.
| CORPORATE OFFICES | |||||
|---|---|---|---|---|---|
| COMPONENTS OF THE REMUNERATION |
Executive Directors | Non-Executive Directors | Members of committees within the BoD |
Executives with strategic responsibilities |
Statutory Auditors |
| Fixed remuneration for the office of Director |
Fixed remuneration for | Collective National Contract for Industrial Managers |
Fixed remuneration | ||
| FIXED COMPONENTS | Fixed remuneration for Directors holding special positions |
Fixed remuneration for the office of Director |
Directors members of Committees within the BoD |
The Board of Directors, at the suggestion of the Remuneration and Nomination Committee and in accordance with the budget, defines an MBO plan, for the benefit of:
This plan sets a common objective (Group EBIT, which is considered to be the Group's main indicator of financial performance) and quantifiable and measurable individual objectives economicfinancial, technical-productive and/or socio-environmental in nature. Some individual objectives refer to technical (e.g. efficiency and quality), management (e.g. meeting deadlines for completion of relevant projects) and sustainability (e.g. environmental performance) parameters. A variable portion of between 30% and 40% of the variable remuneration under the MBO plan is normally related to the common EBIT objective. The plan in question envisages, with regard to the EBIT objective, the payment of remuneration according to the objective achievement range. There is an entry threshold if 80% of the target is reached, entitling the employee to 70% of the variable remuneration, and an extra bonus if the target is exceeded by more than 15%, entitling the employee to a bonus of between 2.1% and 2.8% of gross annual remuneration. For the portion of the variable component of the MBO plan, the payment of which is linked to the achievement of the other objectives, no ranges are routinely provided according to the level of achievement of the target.
The MBO plan includes malus and/or claw back clauses in the event that the objectives of the plan were achieved on the basis of data that later proved to be incorrect.
The allocation of the variable component under the MBO plan is conditional on continued employment until the end of the vesting period.
The objectives of the Chief Executive Officer and of the Executives with strategic responsibilities are decided by the Board of Directors, at the suggestion of the Remuneration and Nomination Committee, in accordance with the budget.
The objectives of the other beneficiaries of the incentive plans are defined by the Chief Executive Officer, in accordance with the budget.
The Board of Directors, at the proposal of the Remuneration and Nomination Committee and subject to the opinion of the Board of Statutory Auditors in the cases referred to in Art. 2389 of the Italian Civil Code, may decide to pay a one-off bonus to Directors holding specific positions and/or to Executives with strategic responsibilities. The resolution must be motivated and justified by exceptional circumstances, consistent with the objectives of the remuneration policy and, in particular, with that of pursuing the sustainable success of the company. In no case may the one-off bonus exceed 50% of the fixed annual component of the remuneration of the Director holding specific positions or the Executive with strategic responsibilities concerned.
Non-executive directors are not paid any variable remuneration.
The remuneration policy envisages the adoption of long-term incentive plans based on financial instruments.
The beneficiaries, if not already identified in the incentive plan, are identified by the Board of Directors among the members of the Board of Directors and/or among the managers of the Company or its Subsidiary companies who hold or will hold key positions in the implementation of the Business Plan. In the case of the Chief Executive Officer and/or Executives with strategic responsibilities of the Company, the identification is made on the suggestion of the Remuneration and Nomination Committee.
The Board of Directors identifies the total number of rights to be assigned to each beneficiary (within the limits set by the Shareholders' Meeting).
The incentive plan normally provides for a multi-year vesting period, with subsequent allocation of the financial instruments.
On the basis of the remuneration policy, the total or partial allocation of financial instruments is made by the Board of Directors; for the Chief Executive Officer and Executives with strategic responsibilities, the allocation is made at the suggestion of the Remuneration and Nomination Committee.
The allocation of financial instruments is related to predetermined financial and non-financial performance targets measurable (also year by year) and linked to the creation of value for shareholders over a long-term horizon, based on business plans approved by the Board of Directors.
The incentive plan envisages a lock-up period, lasting at least one year, of a portion of the financial instruments allocated to each beneficiary, normally not less than 40% of the total.
The allocation of the shares related to a specific performance target is not envisaged, not even partially, in case of failure to achieve the performance target, within a minimum threshold set by the Board of Directors, which is normally not less than 80%.
The plan can contain catch-all clauses that allow, if the average or cumulative objective or the objective for the last year of the plan is achieved, the allocation of the shares - related to that objective envisaged for all periods of measurement of that objective set out in the plan.
The allocation of the shares is conditional on the continuation of the employment and/or collaboration and/or administration relationship between the beneficiary and the company at the date of approval of the financial statements for the year in which the allocation is envisaged, according to the criteria established by the incentive plan. The incentive plan provides for malus and/or claw back clauses in the following cases:
Following the Shareholders' Meeting of 6 May 2021, at the suggestion of the Remuneration and Nomination Committee, and after obtaining the opinion of the Board of Statutory Auditors, on 13 May 2021, the Board of Directors approved the regulation of a long-term sharebased incentive plan (Stock Grants) related to performance targets for the three-year period 2021 to 2023. The incentive plan includes the
• EXECUTIVE DIRECTORS (excluding the Chairman)
• EXECUTIVES WITH STRATEGIC RESPONSIBILITIES
• OTHER MANAGERS PROPOSED BY THE CHIEF EXECUTIVE OFFICER
• COMMON OBJECTIVE: GROUP EBIT
• INDIVIDUAL OBJECTIVES: ECONOMIC/FINANCIAL AND TECHNICAL AND PRODUCTION
following objectives: an objective based on the Group's EBITDA, to the achievement of which 40% of the attributable shares are linked; an objective based on Return on Investments (ROI), to the achievement of which 35% of the attributable shares are linked; social and environmental sustainability objectives, to the achievement of which 25% of the attributable shares are linked.
• CHIEF EXECUTIVE OFFICER
• CFO
• OTHER MANAGERS IDENTIFIED BY THE BoD WHO HOLD OR WILL HOLD KEY POSITIONS IN THE IMPLEMENTATION OF THE BUSINESS PLAN
• FINANCIAL PERFORMANCE TARGETS
• NON-FINANCIAL PERFORMANCE TARGETS
| COMPONENTS OF THE REMUNERATION | CORPORATE OFFICES | |||
|---|---|---|---|---|
| Executive directors and other executives with strategic responsibilities |
Other persons identified by the CEO/BoD |
|||
| SHORT-TERM VARIABLE COMPONENT | Annual MBO plan based on achieving a common objective and individual objectives |
Annual MBO plan based on achieving a common objective and individual objectives |
||
| VARIABLE COMPONENTS | Possible one-off bonus | Possible one-off bonus | ||
| LONG-TERM VARIABLE COMPONENT | Stock Grant Plan based on achieving financial and non-financial performance targets (and possibly individual objectives) |
Stock Grant Plan based on achieving financial and non-financial performance targets |
The current Chief Executive Officer entered into a permanent employment contract with the Company, effective as from 12 September 2017. The managerial employment relationship is regulated by the National Collective Bargaining Agreement for Managers of Companies producing goods and services. In case of early termination of employment at the Company's initiative not due to just cause, a fixed allowance for termination of employment shall be paid, as a redundancy incentive, equal to twice the remuneration including the fixed component and the short-term variable component (MBO). The same allowance is also envisaged in case of resignation for just cause from the office of chief executive officer or from the executive position. There are no specific provisions linking the payment of the termination allowance and the performance of the Company. Without prejudice to the relationships already in place, the remuneration policy envisages, as a general rule, that the contractual termination-of-employment allowances for the Chief Executive Officer shall not exceed, as a general rule, a maximum of 24 months of the total gross remuneration (including both the gross remuneration as an executive and any gross remuneration for the management position) paid to the chief executive officer, without prejudice to more favourable provisions of any applicable collective bargaining agreement. The remuneration policy also envisages that future agreements with chief executive officers will specify the portion of the termination-of-employment allowance based on the fixed component of remuneration and the portion of the termination-of-employment allowance based on the Company's performance, and provide for specific cases of exclusion of the payment of the termination-ofemployment allowance due to the failure to achieve, within predefined minimum thresholds, the objectives of the business plan. There are no agreements for other Directors or other Executives with strategic responsibilities regulating ex ante the economic part concerning the early termination of the employment relationship. In case of termination of the relationship for reasons other than just cause or justified reasons by the employer, the Company's remuneration policy allows for consensual agreements to end the relationship in compliance with legal and contractual obligations. These agreements must be approved by the Board of Directors at the suggestion of the Remuneration and Nomination Committee.
The Company does not provide Directors other than the Chief Executive Officer with benefits subsequent to the end of their service.
Non-competition agreements concerning employment relationships are entered into by the Company in accordance with Art. 2125 of the Italian Civil Code.
The Chief Executive Officer in office is bound, as a manager, by a postcontractual non-competition agreement for a period of 12 months following the termination of his employment, which provides for a fixed annual fee paid during the term of employment in monthly instalments, with a fixed guaranteed minimum threshold equal in total to slightly less than half of the gross annual fee paid to the Chief Executive Officer as a manager. The non-competition agreement is protected by a fixed penalty for breach, without prejudice to the possibility of compensation for greater damages. There is no link between the corporate performance and the payment of the fee for the non-competition agreement. Based on the remuneration policy, non-competition agreements are also envisaged with certain Executives with strategic responsibilities, the terms of which were approved by the Board of Directors, after obtaining the opinion of the Remuneration and Nomination Committee. These agreements have a duration of 24 months following the termination of the employment relationship and provide for annual fees, paid during the employment relationship in monthly instalments, equal to 10% of the gross annual remuneration. There is no link between the corporate performance and the payment of fees for non-competition agreements.
The termination of the employment or collaboration relationship with the Chief Executive Officer, the other Directors and the Executives with Strategic Responsibilities - if they are beneficiaries of incentive plans based on financial instruments - determines the effects indicated above under "LONG-TERM VARIABLE COMPONENT".
The remuneration policy does not envisage the assignment or maintenance of non-monetary benefits, nor the signing of consultancy contracts, for periods after the termination of the relationship with the Chief Executive Officer, other Directors or Executives with Strategic Responsibilities.
| CORPORATE OFFICES | |||||
|---|---|---|---|---|---|
| COMPONENTS OF THE REMUNERATION |
Executive Directors |
Non-Executive Directors |
Members of committees within the BoD |
Executives with strategic responsibilities |
Statutory Auditors |
| ALLOWANCE FOR EARLY TERMINATION OF EMPLOYMENT |
Remuneration for non-competition agreement (only for Chief Executive Officer) |
N/A | N/A | Remuneration for non-competition agreement |
N/A |
Third-party civil liability insurance policy: the Company has taken out a third-party civil liability insurance policy in favour of directors, statutory auditors and executives for unlawful acts committed in the carrying-out of their respective duties, in violation of obligations established by law and the Articles of Association, with the sole exclusion of deliberate intent. The taking-out of this policy is approved by the Shareholders' Meeting.
Life insurance policy and cover for medical expenses: the Company also provides a life insurance policy and cover for medical expenses (FASI) for executives, as established by the Collective National Contract for Industrial Managers; moreover, it has taken out an additional policy to cover medical expenses not covered by FASI reimbursements.
Company cars: at the suggestion of the Remuneration and Nomination Committee, the Board of Directors also assigns company cars to executives.
Accommodation costs: at the suggestion of the Remuneration and Nomination Committee, the Board of Directors can provide for housing to be made available to executives, for the possibility to reimburse the rent of the house or for the temporary reimbursement of the costs of accommodation in a hotel.
With the aim of attracting highly professional individuals, the Board may decide to give entry bonuses to newly hired executives.
As from 2018, the Company established mechanisms for the ex-post adjustment of the variable remuneration component or claw back clauses to demand the return of all or part of the variable components of remuneration paid out (or to withhold deferred sums), which were determined on the basis of data subsequently found to be clearly incorrect. In this regard, please see item "SHORT-TERM VARIABLE COMPONENT" and "LONG-TERM VARIABLE COMPONENT" of the remuneration policy.
Directors and other executives with strategic responsibilities may be paid remuneration – exclusively as a fixed amount – for offices held in subsidiaries. In addition to the approval of the subsidiaries' corporate bodies, this remuneration is subject to the favourable opinion of the Remuneration and Nomination Committee.
Based on the remuneration policy, where a variable component is recognised due to the total achievement of objectives, the overall remuneration is structured as follows:
| COMPONENTS OF THE REMUNERATION | CORPORATE OFFICES | |||||
|---|---|---|---|---|---|---|
| Executive Non-Executive Directors Directors |
Executives with strategic responsibilities |
Statutory Auditors | ||||
| Third-party liability insurance policy |
||||||
| BENEFITS AND OTHER COMPONENTS |
NON-MONETARY BENEFITS |
Third-party liability insurance policy |
Third-party liability insurance policy |
Life insurance policy to cover medical expenses (FASI), supplementary medical expenses |
Third-party liability insurance policy |
|
| Company cars | ||||||
| OFFICES IN SUBSIDIARIES |
Fixed remuneration for offices in subsidiaries |
N/A | Fixed remuneration for offices in subsidiaries |
N/A |
The Shareholders' Meeting is responsible for determining the annual gross remuneration (maximum amount) due to the Directors, which consists of a fixed amount.
The members of the Board of Director are covered by a third-party civil liability insurance policy for unlawful acts committed in the exercise of their respective duties, in violation of obligations established by law and the Articles of Association, with the sole exclusion of deliberate intent. The taking-out of this policy is approved by the Shareholders' Meeting. There are no specific remuneration schemes for independent directors.
There is an additional fixed remuneration for directors participating in committees.
No variable remuneration is paid to the Chairman and Vice Chairman of the Board of Directors, but only fixed remuneration in addition to those of directors for special offices held.
There is a fixed remuneration set by the Board of Directors for the Honorary Chairman.
The remuneration of the Chief Executive Officer includes the following components:
Fixed remuneration for the office of Director: the Chief Executive Officer is the recipient of the fixed remuneration for the office of Director (pursuant to Art. 2389 paragraph I Italian Civil Code) and an additional fixed remuneration for the office held.
Third-party civil liability insurance policy: the Company has taken out a third-party civil liability insurance policy for unlawful acts committed in the carrying-out of their respective duties, in violation of obligations established by law and the Articles of Association, with the sole exclusion of deliberate intent. The taking-out of this policy is approved by the Shareholders' Meeting.
Long-term variable component: the long-term incentive is dependent on the achievement of performance targets, proposed by the Remuneration and Nomination Committee to the Board of Directors, and extends over three years, coinciding with the mandate of the Board of Directors.
To be intended as the result of the sum of the fixed component established by the remuneration policy (including the remuneration in case of director and/or gross annual remuneration for employees), fringe benefits, remuneration for offices held in subsidiaries and annual payments for non-competition agreements.
If the Chief Executive Officer is also assigned an executive management role within the Sabaf Group, the Board decides on the assignment of the following additional remuneration instruments:
Fixed annual gross remuneration: Employment relationships with Executives with strategic responsibilities are regulated by the Collective National Contract for Industrial Managers. In this regard, fixed remuneration is determined so that it is sufficient in itself to guarantee an appropriate basic salary level, even in the event that the variable components are not paid owing to a failure to reach the objectives. Short- and long-term variable components: Executives with strategic responsibilities are the recipients of short- and long-term incentive plans (cf. paragraph 3). At the time of approval of shortand long-term incentive plans, the Board of Directors is responsible for setting the maximum amounts of variable remuneration, the methods and timing for the payment of this remuneration. Executives with strategic responsibilities can be paid a one-off bonus under the conditions and within the limits set out in the remuneration policy.
Benefits: Executives with strategic responsibilities receive the benefits envisaged for the executives of the Company (Life insurance policy and cover for medical expenses); assignment of company car) and are covered by an occupational risk policy.
The amount of remuneration for Statutory Auditors is set by the Shareholders' Meeting, which establishes a fixed amount for the Chairman and the other Standing Auditors.
The members of the Board of Statutory Auditors are covered by a third-party civil liability insurance policy for unlawful acts committed in the exercise of their respective duties, in violation of obligations established by law and the Articles of Association, with the sole exclusion of deliberate intent. The taking-out of this policy is approved by the Shareholders' Meeting.
The commitment required of the Board of Statutory Auditors for the performance of its duties can be inferred from the Report on the Corporate Governance System to which reference should be made.
Pursuant to Art. 123-ter (3)-bis of the T.U.F., in the presence of exceptional circumstances (as defined below), the company may temporarily depart from the remuneration policy, with regard to the provisions concerning long-term variable remuneration and allowance for early termination of employment, referred to in paragraph 4 of the remuneration policy. The departure may only be made in compliance with the procedures of Consob Regulation no. 17221 of 12 March 2010 (Related party Transactions).
Exceptional circumstances are only situations where the departure from the remuneration policy is required to pursue the longterm interests and sustainability of the company as a whole or to ensure its ability to stay in the market (such as, for example, the need to attract and/or retain key management figures or the need to incentivise key management figures in office with regard to specific industrial objectives that, in contingent conditions, are of particular importance).
The remuneration of the directors, both executive and non-executive, and of the members of the control body was defined taking into account the remuneration practices of industrial companies of similar size listed on the STAR segment, including in particular the following: Reno De Medici S.p.A., La Doria S.p.A., Aquafil S.p.A., Retelit S.p.A., GEDI S.p.A., Elica S.p.A., Massimo Zanetti Beverage Group S.p.A., Aeffe S.p.A., Prima Industrie S.p.A., B&C Speakers S.p.A., Emak S.p.A., Openjobmetis S.p.A., Landi Renzo S.p.A., Gefran S.p.A..
The current remuneration policy was approved by the Shareholders' Meeting on 6 May 2021 and will last three years. No changes were made to the version submitted to this Shareholders' Meeting during 2021.
This section, by name of Directors and Statutory Auditors:
The Directors in office for the year 2021 have been paid a fixed annual gross remuneration of €22,000 per unit. The following additional remuneration was also paid for the offices held or attendance to Committees set up within the Board:
A fixed remuneration component for employment and a fixed remuneration for offices in subsidiaries are paid to executive directors appointed as executives.
With reference to variable components, which are intended only for executive directors, the following is pointed out:
the Chief Executive Officer, Pietro Iotti, accrued variable remuneration of €86,800 for the partial achievement of the objectives of the 2021 MBO plan. The business objective, represented by the budget EBIT, was achieved in the highest range (exceeding the budget by more than 15%), individual objectives were achieved at 33.33%.
The Director, Gianluca Beschi, accrued variable remuneration of €44,100 for the partial achievement of the objectives of the 2021 MBO plan. The business objective, represented by the budget EBIT, was achieved in the highest range (exceeding the budget by more than 15%), individual objectives were achieved at 33.33%.
In compliance with point no. 3 of the remuneration policy, the Board of Directors, at the suggestion of the Remuneration Committee, resolved to award a one-off bonus of €142,400 to the Chief Executive Officer Pietro Iotti and €79,400 to director Gianluca Beschi for their efforts to limit the impact of the pandemic crisis and for achieving results that far exceeded targets.
The proportion of fixed and variable remuneration paid during the 2021 financial year within the total remuneration of executive directors is as follows:
For details of the elements included in this calculation, please refer to the Tables contained in the second part of this Report.
Note that, during 2021, with regard to executive directors:
On 6 May 2021, the Board of Directors appointed Giuseppe Saleri, the founder and historical Chairman of the Company, as permanent Honorary Chairman, awarding him a gross annual remuneration of €70,000.
The remuneration paid to the Statutory Auditors consists of a fixed remuneration determined by the Shareholders' Meeting of 6 May 2021, amounting to a total of €77,000, 8/12 of which accrued during the first year of office (€51,333). For the first four-month period, the remuneration accrued by the Statutory Auditors in office until 6 May 2021 was €23,517.
The remuneration of other executives with strategic responsibilities (Technical Director and two Sales Managers) consists of a fixed remuneration for employment totalling €420,743, and following variable remuneration:
d.with reference to the 2021-2023 stock incentive plan, whose beneficiaries include the Executives with Strategic Responsibilities, rights to receive shares have been assigned, the allocation of which is subject to the achievement of company targets (based on EBITDA, ROI and sustainability targets) over the three-year period 2021 to 2023 consistent with the objectives of the Business Plan. For further details, please refer to the information contained in the Information Document prepared pursuant to Art. 114-bis of Legislative Decree no. 58 of 24 February 1998, of Art. 84-bis of Consob resolution no. 11971/99, submitted to the Shareholders' Meeting on 6 May 2021.
In compliance with point no. 3 of the remuneration policy, the Board of Directors, at the suggestion of the Remuneration Committee, during 2021 resolved to award a one-off bonus to Executives with. strategic responsibilities amounting to €74,200 for their efforts to limit the impact of the pandemic crisis on the Group's results.
Remuneration totalling €93,500 was also disbursed by subsidiaries. The proportion of fixed and variable remuneration paid during the 2021 financial year within the total remuneration is as follows; fixed remuneration 89%, variable remuneration 11%.
For details of the elements included in this calculation, please refer to the Tables contained in the second part of this Report.
Note that, during 2021, with regard to Executives with Strategic Responsibilities:
| % Change 2020 vs. 2019 |
% Change 2021 vs. 2020 |
|
|---|---|---|
| Chief Executive Officer Pietro Iotti Total remuneration (a) |
+6.8% | +24.8% |
| Director Gianluca Beschi Total remuneration (b) |
+17.9% | +22.3% |
| Executives with strategic responsibilities Total remuneration (c) |
+10.1% | +5.8% |
| Sabaf Group turnover | +18.6% | +42.4% |
| Sabaf S.p.A. turnover | +8.1% | +40.4% |
| Sabaf Group EBITDA | +37.2% | +45.9% |
| Sabaf S.p.A. EBITDA | +20.5% | +45.9% |
| Sabaf Group EBIT | +68.9% | +86.7% |
| Sabaf S.p.A. EBIT | +124.2% | +109.3% |
| Sabaf Group Profit | +40.8% | +71.2% |
| Sabaf S.p.A. Profit | +67.7% | +56.7% |
| Average gross annual remuneration of employees (excluding persons marked with a), b), and c) in this table) |
+0.1% | +10.3% |
The Ordinary Shareholders' Meeting, held on 6 May 2021, approved the second section of the Report on remuneration policy and remuneration paid for 2020, with an advisory vote pursuant to and for the purposes of Art. 123 paragraph 6 of Legislative Decree No. 58/1998, as amended by Legislative Decree 49/19.
| Result of the voting | 2021 |
|---|---|
| For | 84.8% |
| Against | 15.2% |
| Abstention | 0% |
| Non-voters | 0% |
There were no indications from Shareholders to be considered for the purposes of this Report.
For a breakdown of the remuneration paid in 2021, please refer to the tables below (Table 1, Table 2 and Table 3), which contain remuneration paid to Directors and Statutory Auditors, and, at the aggregate level, to other executives with strategic responsibilities, taking into account any office held for a fraction of a year. Remuneration received from subsidiaries and/or affiliates, with the exception of that waived or paid back to the Company, is also indicated separately.
With particular reference to Table 1, the column:
For a breakdown of other items, see attachment 3A, statement 7-bis and 7-ter of Consob Regulation 11971 of 14 May 1999.
Table 2 shows the information relating to the Stock Grant plan approved by the Shareholders' Meeting and aimed at the Group's executive directors and executives who hold or will hold key positions in the implementation of the Business Plan. Specifically, the column:
financial instruments assigned during the year, indicating the fair value at the assignment date, the vesting period, the assignment date and the market price at the assignment;
"Vesting period" means the period between the time when the right to participate in the incentive scheme is assigned and the time when the right accrues. Financial instruments vested during the financial year and not assigned are financial instruments for which the vesting period ended during the financial year and which were not assigned to the recipient for failure to meet the conditions under which the assignment of the instrument was conditional (for example, failure to meet performance targets).
The value at the vesting date is the value of the financial instruments accrued, even if not yet paid (for example, due to the presence of lock up clauses), at the end of the vesting period.
For a breakdown of other items, see attachment 3A, statement 7-bis and 7-ter of Consob Regulation 11971 of 14 May 1999.
Table 3 contains information on monetary incentive plans for members of the administration body and other executives with strategic responsibilities; in particular, it shows:
For the section "Bonus for the year"
For the section "Bonus of previous years"
Lastly, the column "Other bonuses" shows the bonuses for the year not explicitly included in specific ex ante defined plans.
Finally, pursuant to Art. 84-quater, paragraph four of the Consob Issuers' Regulations, Table 4 shows shareholdings in Sabaf S.p.A. held by directors and executives with strategic responsibilities, as well as their non-separated spouses and dependent children, directly or through subsidiaries, trust companies or third parties, as shown in the shareholder register, communications received and other information acquired from the same parties. This includes all persons who held office during the year, even for only part of the year. The number of shares held is shown by individual director and in aggregate form for executives with strategic responsibilities.
(figures in euro)
| BOARD OF DIRECTORS | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Remuneration | Variable remuneration (non equity) |
Fair Value of | Allowance for end of |
|||||||||
| Name and surname |
Office | Period of office |
Expiry of office |
Fixed remuneration |
for attendance at Committee meetings |
Bonus and other incentives |
Profit sharing | Non-monetary benefits |
Other remuneration |
Total | equity remuneration |
office or termination of employment |
| Claudio Bulgarelli |
Chairman | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
| (I) Remuneration at Sabaf S.p.A. | 102,000(a) | 0 | 0 | 0 | 0 | 0 | 102,000 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 102,000 | 0 | 0 | 0 | 0 | 0 | 102,000 | 0 | 0 | |||
| (a) of which €22,000 as director and €80,000 as Chairman |
| Nicla Picchi |
Vice Chairman | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 32,000(a) | 21,000(b) | 0 | 0 | 0 | 15,000 | 68,000 | 0 | 0 | ||||
| (I) Remuneration at Sabaf S.p.A. (II) Remuneration from subsidiaries and affiliates |
0 | 0 | 0 | 0 | 0 | 5,000 | 5,000 | 0 | 0 | |||
| (III) Total | 32,000 | 21,000 | 0 | 0 | 0 | 20,000(c) | 73,000 | 0 | 0 |
(a) of which €22,000 as director and €10,000 as Vice Chairman
(b) of which €21,000 as a member of the Control, Risk and Sustainability Committee
(c) of which €15,000 as member of the Sabaf S.p.A. Supervisory Body and €5,000 as member of the Supervisory Body of the subsidiary Faringosi Hinges s.r.l.
| Pietro Iotti |
Chief Executive Officer |
1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 380,000(a) | 0 | 70,000 | 0 | 9,966 | 142,400 | 602,366 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 60,000 | 0 | 0 | 0 | 0 | 0 | 60,000 | 0 | 0 | |||
| (III) Total | 440,000 | 0 | 70,000 | 0 | 9,966 | 142,400 | 662,366 | 0 | 0 | |||
| (a) of which €22,000 as director, €8,000 as Chief Executive Officer, and €350,000 as General Manager (including €30,000 relating to Remuneration for non-competition agreement) |
| Gianluca Beschi |
Director | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 222,000(a) | 0 | 24,721 | 0 | 5,189 | 79,400 | 331,310 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 74,000 | 0 | 0 | 0 | 0 | 0 | 74,000 | 0 | 0 | |||
| (III) Total | 296,000 | 0 | 24,721 | 0 | 5,189 | 79,400 | 405,310 | 0 | 0 | |||
| (a) of which €22,000 as director and €200,000 as CFO |
(figures in euro)
| Remuneration | Variable remuneration (non equity) |
Fair Value of | Allowance for end of |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and surname |
Office | Period of office |
Expiry of office |
Fixed remuneration |
for attendance at Committee meetings |
Bonus and other incentives |
Profit sharing |
Non-monetary benefits |
Other remuneration |
Total | equity remuneration |
office or termination of employment |
| Carlo Scarpa |
Director | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 22,000(a) | 21,000(b) | 0 | 0 | 0 | 0 | 43,000 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 22,000 | 21,000 | 0 | 0 | 0 | 0 | 43,000 | 0 | 0 | |||
| (a) of which €22,000 as director |
(b) of which €21,000 as a member of the Control, Risk and Sustainability Committee
| Alessandro Potestà (C) |
Director | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 22,000(a) | 16,000(b) | 0 | 0 | 0 | 0 | 38,000 | 0 | 0 | |||
| (I) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 22,000 | 16,000 | 0 | 0 | 0 | 0 | 38,000 | 0 | 0 | |||
| (a) of which €22,000 as director |
(b) of which €16,000 as a member of the Remuneration and Nomination Committee
(c) the remuneration paid to the Director Alessandro Potestà is paid to the company Quaestio Capital Management SGR S.p.A.
| Cinzia Saleri |
Director | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 22,000(a) | 0 | 0 | 0 | 0 | 0 | 22,000 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 22,000 | 0 | 0 | 0 | 0 | 0 | 22,000 | 0 | 0 | |||
(a) of which €22,000 as director
| Daniela Toscani |
Director | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 22,000(a) | 37,000(b) | 0 | 0 | 0 | 0 | 59,000 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 22,000 | 37,000 | 0 | 0 | 0 | 0 | 59,000 | 0 | 0 | |||
| (a) of which €22,000 as director |
(b) of which €21,000 as a member of the Control, Risk and Sustainability Committee and €16,000 as a member of the Remuneration and Nomination Committee
| Stefania Triva |
Director | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 16,000(b) | 0 | 0 | 0 | 0 | 38,000 | 0 | 0 | ||||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 22,000 | 16,000 | 0 | 0 | 0 | 0 | 38,000 | 0 | 0 | |||
| (a) of which €22,000 as director (b) of which €16,000 as a member of the Remuneration and Nomination Committee |
(b) of which €16,000 as a member of the Remuneration and Nomination Committee
| Giuseppe Saleri |
Chairman | 1 Jan - 6 May 2021 |
Approval of 2020 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| 252 |
(figures in euro)
| Remuneration | Variable remuneration (non equity) |
Fair Value of | Allowance for | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and surname |
Office | Period of office |
Expiry of office |
Fixed remuneration |
for attendance at Committee meetings |
Bonus and other incentives |
Profit sharing | Non-monetary benefits |
Other remuneration |
Total | equity remuneration |
end of office or termination of employment |
| Alessandra Tronconi |
Chairman | 1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 32,000 | 0 | 0 | 0 | 0 | 0 | 32,000 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 9,000 | 0 | 0 | 0 | 0 | 0 | 9,000 | 0 | 0 | |||
| (III) Total | 41,000 | 0 | 0 | 0 | 0 | 0 | 41,000 | 0 | 0 |
| Mauro Giorgio Vivenzi |
Statutory Auditor |
1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 21,333 | 0 | 0 | 0 | 0 | 0 | 21,333 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 21,333 | 0 | 0 | 0 | 0 | 0 | 21,333 | 0 | 0 |
| Maria Alessandra Zunino de Pignier |
Statutory Auditor |
1 Jan - 31 Dec 2021 |
Approval of 2023 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A | 14,667 | 0 | 0 | 0 | 0 | 0 | 14,667 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 14,667 | 0 | 0 | 0 | 0 | 0 | 14,667 | 0 | 0 |
| Luisa Anselmi |
Statutory Auditor |
1 Jan - 6 May 2021 |
Approval of 2020 financial statements |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 6,850 | 0 | 0 | 0 | 0 | 0 | 6,850 | 0 | 0 | |||
| (II) Remuneration from subsidiaries and affiliates | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||
| (III) Total | 6,850 | 0 | 0 | 0 | 0 | 0 | 6,850 | 0 | 0 |
(figures in euro)
| Period of | Expiry of | Fixed | Remuneration for attendance |
Variable remuneration (non equity) |
Non-monetary | Other | Fair Value of | Allowance for end of office or |
||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and surname |
Office | office | office | remuneration | at Committee meetings |
Bonus and other incentives |
Profit sharing | benefits | remuneration | Total | equity remuneration |
termination of employment |
| Other executives with strategic responsibilities (3) |
1 Jan - 31 Dec 2021 |
n/a | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (I) Remuneration at Sabaf S.p.A. | 420,743(a) | 0 | 76,359 | 0 | 14,866 | 72,400 | 584,368 | 0 | 0 | ||
| (II) Remuneration from subsidiaries and affiliates | 93,500 | 0 | 0 | 0 | 0 | 0 | 93,500 | 0 | 0 | ||
| (III) Total | 514,243 | 0 | 76,359 | 0 | 14,866 | 72,400 | 677,868 | 0 | 0 | ||
| (a) remuneration including €44,613 related to Remuneration for non-competition agreement |
(figures in euro)
| FINANCIAL INSTRUMENTS | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name and surname |
Office | Plan | Financial instruments assigned in previous financial years not vested during the financial year |
Financial instruments assigned during financial year | Financial instruments vested during financial year and not assigned |
Financial instruments vested during financial year and assigned |
Financial instruments pertaining to the financial year |
||||||
| Number and type of financial instruments |
Vesting period |
Number and type of financial instruments |
Fair Value at the assignment date |
Vesting period |
Assignment date |
Market price on assignment |
Number and type of financial instruments |
Number and type of financial instruments |
Value at vesting date |
Fair value |
| Pietro Iotti |
Chief Executive Officer |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 Stock Grant Plan (May 2018) |
0 | - | - | - | - | - | - | 99,478 rights corresponding to 99,478 shares |
10,545 rights corresponding to 10,545 shares |
233,814 | - | ||
| Remuneration at Sabaf S.p.A. | 2021 Stock Grant Plan (May 2021) |
0 | - | 62,000 rights corresponding to 62,000 shares |
932,480 | 3 years | 13/05/2021 | €23.60 / share | 0 | 0 | - | 222,019 |
| Gianluca Beschi |
Director | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 Stock Grant Plan (May 2018) |
0 | - | - | - | - | - | - | 59,687 rights corresponding to 59,687 shares |
6,327 rights corresponding to 6,327 shares |
140,289 | - | ||
| Remuneration at Sabaf S.p.A. | 2021 Stock Grant Plan (May 2021) |
0 | - | 30,000 rights corresponding to 30,000 shares |
451,200 | 3 years | 13/05/2021 | €23.60 / share | 0 | 0 | - | 107,429 |
| Other executives with strategic responsibilities (3) |
||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2018 Stock Grant Plan (May 2018) |
0 | - | - | - | - | - | - | 95,925 rights corresponding to 95,925 shares |
10,167 rights corresponding to 10,167 shares |
225,433 | - | |
| Remuneration at Sabaf S.p.A. | 2021 Stock Grant Plan (May 2021) |
0 | - | 45,000 rights corresponding to 45,000 shares |
676,800 | 3 years | 13/05/2021 | €23.60 / share | 0 | 0 | - | 161,143 |
| Total | 2,060,480 | 599,536 | 490,591 |
(figures in euro)
| Bonus for the year | Bonus of previous years | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Name and surname |
Office | Plan | Payable/Paid | Deferred | Deferment period |
No longer payable | Payable/Paid | Still deferred | Other bonuses |
| Pietro Iotti |
Chief Executive Officer |
||||||||
| Remuneration at Sabaf S.p.A. | 2020 MBO Plan (March 2021) |
0 | 0 | 0 | 70,000 | 0 | 0 | ||
| Remuneration at Sabaf S.p.A. | 2021 MBO Plan (March 2022) |
0 | 86,800 | March 2022 | 0 | 0 | 0 | 0 | |
| Gianluca Beschi |
Executive Director |
||||||||
| Remuneration at Sabaf S.p.A. | 2020 MBO Plan (March 2021) |
0 | 0 | 0 | 24,721 | 0 | 0 | ||
| Remuneration at Sabaf S.p.A. | 2021 MBO Plan (March 2022) |
0 | 44,100 | March 2022 | 0 | 0 | 0 | 0 | |
| Other executives with strategic responsibilities (3) |
|||||||||
| Remuneration at Sabaf S.p.A. | 2020 MBO Plan (March 2021) |
0 | 0 | 0 | 76,359 | 0 | 0 | ||
| Remuneration at Sabaf S.p.A. | 2021 MBO Plan (March 2022) |
0 | 110,584 | March 2022 | 0 | 0 | 0 | 0 | |
| Total | 0 | 241,484 | 0 | 171,080 | 0 | 0 |
| Surname and name | Office | Type of Ownership | Investee Company | No. shares held at 31 December 2020 |
No. shares acquired | No. shares sold | No. shares held at 31 December 2021 |
|---|---|---|---|---|---|---|---|
| Iotti Pietro |
Chief Executive Officer |
Indirect through the subsidiary Petrae s.r.l. |
Sabaf S.p.A. | 122,300 | 1,000 | - | 123,300 |
| Direct | Sabaf S.p.A. | 23,700 | 12,945 | - | 36,365 | ||
| Toscani | Director | Indirect through spouse |
Sabaf S.p.A. | 2,419 | - | - | 2,419 |
| Daniela | Direct | Sabaf S.p.A. | 498 | - | - | 498 | |
| Bulgarelli | Director | Indirect through the company Fintel s.r.l. |
Sabaf S.p.A. | 868,827 | 9,124 | - | 877,951 |
| Claudio | Direct | Sabaf S.p.A. | 1,567 | - | - | 1,567 | |
| Vivenzi Mauro Giorgio |
Statutory Auditor |
Indirect through spouse |
Sabaf S.p.A. | 600 | - | - | 600 |
| Beschi Gianluca |
Director | Direct | Sabaf S.p.A. | - | 6,327 | - | 6,327 |
| No. 3 Executives with Strategic Responsibilities |
Direct | Sabaf S.p.A. | - | 10,167 | 6,000 | 4,167 |
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