Sabaf

Investor Presentation • Mar 23, 2021

FINANCIAL PRESENTATION

Milan, 23rd – 25th March 2021

Table of contents

• I. COMPANY PROFILE
• II. IV QUARTER 2020 AND 12 MONTHS RESULTS
• III. BUSINESS UPDATE AND 2021 OUTLOOK
• IV. BUSINESS PLAN 2021 2023

COMPANY PROFILE

Sabaf Group Timeline and history

Sabaf Group Business diversification in three divisions

5

Sabaf Group Product range

• Standard Burners
• Special Burners
• Professional Burners
• Oven and Grill Burners
• Gas Valves
• Gas Oven Thermostats

• Microswitches & Accessories

• Ovens

• Dishwashers
• Special applications
• Small compartments
• Catering appliances

GAS HINGES ELECTRONIC COMPONENTS

• Cooker Hoods
• Ovens
• Cookers
• Air Curtain
• Refrigerators/freezers
• Other products

Sabaf Group Industrial Footprint: present and near future

Total Group employees at 31 December 2020 1,331

SABAF TURKEY Standard burners 202 employees OKIDA ELEKTRONIK

Electronics for household appliances 173 employees

SABAF APPLIANCE COMPONENTS (KUNSHAN) Wok burners 8 employees

ARC HANDAN JV Professional wok burners

2020: 10 production plants (5 in Italy and 5 abroad)

SABAF S.P.A.

A.R.C. S.R.L.

21 employees

C.M.I. ITALY Oven hinges

Professional burners

Oven hinges

Dishwasher hinges 55 employees

Dishwasher hinges 144 employees

Standard burners Special burners 562 employees

7

Sabaf Group Market

Global leader

• in the segment of components for domestic gas cooking appliances, with 400 customers in 64 different countries. A strong leadership in Europe (market share above 40%), estimated market share worldwide of about 10%
• in the segment of hinges with estimated market share worldwide of about 35%

Weight of top 10 customers on total Group sales is 48% (47% in 2019)

No customer represents more than 11% of total Group sales

Long-term agreements and strong relationships with all the main players in the household appliances business, based on mutual trust, technical cooperation, co-engineering and tailor-made products

Sabaf Group Product & technology

Product Innovation: about 88 active patents

Know-how:

• ➢ Mechanical: forefront process technology internal development of special machinery, high performance molds for robotic die-casting, high speed and high precision tools not available on the market
• ➢ Electronic: strong skills in new product development

Intellectual capital: highly specialized and qualified staff (50+ R&D engineers)

Strong operational leverage: great flexibility in production volumes growth, ready to satisfy customers requests

Sabaf Group Main Shareholders

Pietro Iotti, CEO of Sabaf, owns 1.3% of shares

Sabaf Group Stock price and Dividend proposal

• € 0.55 per share
• Ex-date: 31st May 2021
• Dividend yield: 2.8%
• Payout ratio: 45.4%

Sabaf performance
Jan 21 Change
1-day (%)	0.50%
1-month (%)	0.75%
3-month (%)	30.52%
6-month (%)	73.21%
12-month (%)	98.57%
YTD (%)	33.55%

IV QUARTER 2020 AND 12 MONTHS FINANCIAL PERFORMANCE

Revenues 2020 - Quarter analysis

Business update

Performance data Income statement – IV quarter 2020

€ x 000	IV TRIM 2020		IV TRIM 2019		Δ % 20 - 19
Revenue	59,461	100.0%	40,671	100.0%	+46.2%
Other income	4,158	7.0%	1,393	3.4%
Total operatig revenue and income	63,619		42,064
Materials	(26,528)	(44.6%)	(15,401)	(37.9%)
Personnel costs	(13,215)	(22.2%)	(10,498)	(25.8%)
Change in inventories	2,712	4.6%	(1,961)	(4.8%)
Other operating costs	(12,363)	(20.8%)	(7,617)	(18.7%)
EBITDA	14,225	23.9%	6,587	16.2%	+116.0%
Depreciation	(4,263)	(7.2%)	(4,446)	(10.9%)
Gains/losses on fixed assets	45	0.1%	2	0.0%
Write-downs/write-backs of non-current assets	(141)	(0.2%)	-	0.0%
EBIT	9,866	16.6%	2,143	5.3%	+360.4%
Net financial expense	(1,239)	(2.1%)	264	0.6%
Exchange rate gains and losses	29	0.0%	(1,230)	(3.0%)
Profits and losses from equity investments	39	0.1%	(39)	(0.1%)
EBT	8,695	14.6%	1,138	2.8%	664.1%
Income taxes	1,200	2.0%	2,037	5.0%
PROFIT FOR THE YEAR	9,895	16.6%	3,175	7.8%	211.7%
Minority interests	(179)	(0.3%)	(52)	(0.1%)
PROFIT ATTRIBUTABLE TO THE GROUP	9,716	16.3%	3,123	7.7%	211.1%

Performance data Income statement – 12 months 2020

€ 000 x	12	MONTHS 2020		MONTHS * 12 2019
Revenue	184 906 ,	100.0%	155 923 ,	100.0%	+18.6%
Other income	194 7 ,	3.9%	3 621 ,	2.3%
Total operatig and income revenue	192 100 ,		159 544 ,
Materials	(82 966) ,	(44 .9%)	(57 464) ,	(36 .9%)
Personnel costs	(43 700) ,	(23 .6%)	(37 103) ,	(23 .8%)
Change in inventories	6 406 ,	3.5%	(8 617) ,	(5 .5%)
Other operating costs	(34 743) ,	(18 .8%)	(29 327) ,	(18 .8%)
EBITDA	37 097 ,	20.1%	27 033 ,	17.3%	+37.2%
Depreciation	(16 968) ,	(9 .2%)	(15 183) ,	(9 .7%)
Gains/losses fixed assets on	105	0.1%	46	0.0%
Write-downs/write-backs of non-current assets	(141)	(0 .1%)	-	0.0%
EBIT	20 093 ,	10.9%	11 896 ,	7.6%	+68.9%
Net financial expense	(780)	(0 .4%)	(701)	(0 .4%)
Exchange gains and losses rate	(4 812) ,	(2 .6%)	(1 380) ,	(0 .9%)
Profits and losses from equity investments	8	0.0%	(39)	(0 .0%)
EBT	14 509 ,	7.8%	9 776 ,	6.3%	48.4%
Income taxes	(149)	(0 .1%)	407	0.3%
PROFIT FOR THE YEAR	14 360 ,	7.8%	10 183 ,	6.5%	41.0%
Minority interests	(399)	(0 .2%)	(268)	(0 .2%)
PROFIT ATTRIBUTABLE TO GROUP THE	13 961	7.6%	9 915	6.4%	40.8%
	,		,

Performance data Sales by market

x 000 €	MONTHS 12 2020	MONTHS 2019* 12
Italy	35 260 ,	31 161 ,	+13 2%
Western Europe	11 103 ,	12 277 ,	-9 6%
Eastern Europe (incl Turkey)	68 061 ,	55 059 ,	+23 6%
Middle East & Africa	12 040 ,	050 7 ,	8% +70
Asia (excl ME)	8 103 ,	9 198 ,	9% -11
Latin America	27 639 ,	23 451 ,	9% +17
North America	22 700 ,	17 727 ,	1% +28
Total	184 906 ,	155 923 ,	6% +18

Like-for-like consolidation scope	12 MONTHS 2020	12 MONTHS 2019
Italy	32 634 ,	31 161 ,	+4 7%
Western Europe	11 103 ,	12 277 ,	6% -9
(incl Turkey) Eastern Europe	60 360 ,	059 55 ,	6% +9
Middle East & Africa	12 040 ,	7 050 ,	8% +70
Asia (excl ME)	8 041 ,	9 198 ,	6% -12
Latin America	27 135 ,	23 451 ,	7% +15
North America	17 773 ,	17 727 ,	3% +0
Totale	169 086 ,	155 923 ,	+8 4%

	IV Q 2020	IV Q 2019
Italy	11 969 ,	7 145 ,	5% +67
Western Europe	3 536 ,	2 985 ,	+18 5%
Eastern Europe (incl Turkey)	21 119 ,	16 309 ,	5% +29
Middle Africa East &	3 522 ,	1 097 ,	+221 2%
Asia (excl ME)	3 088 ,	2 062 ,	7% +49
Latin America	9 469 ,	629 5 ,	+68 2%
North America	6 758 ,	5 444 ,	1% +24
Totale	59 461 ,	40 671 ,	2% +46

* C.M.I. Group has been consolidated since August 2019

Performance data Sales by product

€ x 000	MONTHS 12 2020	MONTHS 2019* 12
Gas parts	129 834 ,	122 206 ,	2% +6
Hinges	41 326 ,	23 774 ,	8% +73
Electronic components	13 746 ,	9 944 ,	2% +38
Total	184 906 ,	155 923 ,	+18 6%

Like-for-like	MONTHS	MONTHS
consolidation	12	12
scope	2020	2019
Gas parts	129 834 ,	122 206 ,	2% +6
Hinges	25	23	3%
	506	774	+7
	,	,
Electronic components	13 746 ,	9 944 ,	2% +38
Total	169	155	4%
	086	923	+8
	,	,

€ x 000	Q IV 2020	Q IV 2019
Gas parts	42 314 ,	27 886 ,	+51 7%
Hinges	12 589 ,	10 205 ,	4% +23
Electronic components	4 558 ,	2 581 ,	6% +76
Total	59 461 ,	40 671 ,	2% +46

¹⁸ * C.M.I. Group has been consolidated since August 2019

Performance data Balance Sheet

€ 000 x	31 12 2020	31 12 2019
Fixed assets	131 543 ,	138 506 ,
Inventories	39 224 ,	35 343 ,
Trade receivables	63 436 ,	46 929 ,
Tax receivables	2 419 ,	4 458 ,
Other receivables current	3 167 ,	1 459 ,
Trade payables	(41 773) ,	(27 560) ,
payables Tax	(3 287) ,	(1 802) ,
Other payables	(10 957) ,	(9 134) ,
Net working capital	52 229 ,	49 693 ,
Provisions for risks and severance indemnity	(9 643) ,	(11 966) ,
Capital Employed	174 129 ,	176 233 ,
Equity debt Net	117 807 , 56 322 ,	121 105 , 55 128 ,
Sources of finance	174 129 ,	176 233 ,

Performance data Cash flow statement

€ x 000	31 12 2020	31 12 2019
Cash the beginning of the period at	18 687 ,	13 426 ,
profit Net Depreciation Other income adjustments statement	14 360 , 16 968 , 1 873 ,	10 183 , 15 183 , 1 538 ,
Change in working capital net - Change in inventories - Change in receivables - Change in payables	(3 881) , (16 507) , 14 213 , (6 175) ,	- 9 090 , 10 148 , (2 901) , 16 337 , -
Other changes in operating items	(1 959) ,	(2 309) , -
Operating cash flow	25 067 ,	40 932 ,
of disposals Investments , net Free Cash Flow	(17 296) , 7 771 ,	(12 014) , 28 918 ,
Cash flow from financial activity Own shares buyback Dividends CMI Acquisition OKIDA acquisition Forex	(2 136) , (2 073) , (3 924) , (3 063) , (1 944) ,	(10 433) , 3 146 , (6 060) , (10 475) , (317) 482 -
Net financial flow	(5 369) ,	5 261 ,
Cash the end of the period at	13 318 ,	18 687 ,
Current financial debt Non-current financial debt	37 487 , 32 153 ,	22 386 , 51 430 ,
Net financial debt	56 322 ,	55 128 ,

Working capital

• Increase in working capital due to higher levels of production and sales in the second half of the year
• Nevertheless lower incidence of NWC on turnover: 28.2% compared to pro-forma 28.7% in 2019

Investments

Investments in 2020 were mainly aimed at:

• industrializing new products to significantly increase shares with certain strategic customers
• increasing production capacity:
• in India (new plant)
• Turkey and Brazil (machinery and equipment)

Performance data Financial Indicators

	12 MONTHS 2020	12 MONTHS 2019 actual $*$	pro-forma**
Change in turnover (vs. previous year)	$+18,6%$	$+3,5%$
Change in turnover - Organic (vs. previous year)	$+8,4%$	$-8,9%$
ROCE (return on capital employed)	11,5%	6,8%	7,1%
Net debt/EBITDA	1,52	2,04	1,86
Net working capital/Turnover	28,2%	31,9%	28,7%
Net debt/equity	47,8%	45,5%

* C.M.I. Group contributions considered only for the period 31.07.2019 - 31.12.2019 (C.M.I. Group has been consolidated since August 2019)

** Proforma indicators are calculated considering annualized figures for companies acquired during the year

2021 OUTLOOK

Outlook 2021

These forecasts assume a macroeconomic scenario not affected by unpredictable events. If the economic situation were to change significantly, actual figures might diverge from the forecasts.

BUSINESS PLAN 2021 - 2023

Business plan 2021 - 2023

KEY POINTS

Business plan 2021 - 2023 Organic growth

Business plan 2021 - 2023 Organic growth - Market development

MARKET	2020	2021	2022	2023	Var % 2023 vs. 2020
EUROPE (excl. Turkey)	69.6	76.3	80.3	86.6	5% +24
TURKEY	44.8	51.6	55.6	56.6	3% +26
NORTH AMERICA	22.7	27.5	32.2	37.2	6% +63
SOUTH AMERICA	27.6	29.0	30.4	32.9	9% +18
AFRICA AND MIDDLE EAST	12.2	14.1	14.1	16.1	5% +32
CHINA AND FAR EAST	6.8	10.3	11.5	14.2	1% +101
INDIA	1.2	1.7	4.3	6.9	0% +468
TOTAL	184.9	210.5	228.4	250.5	5% +35
Growth previous vs year		9% +13	5% +8	7% +9

Business plan 2021 - 2023 Organic growth - By division

HUGE NEW PROJECTS PIPELINE

PROJECTS		GAS	HINGES	ELECTRONICS	TOTAL	CAGR
ADDITIONAL SALES IN 3 YEARS	NEW	26.3 € mn	10.6 € mn	8.5 mn €	45.4 € mn	+7.6%
		11 projects No	5 projects No	25 projects No	41 projects No
COMPARED TO 2020	EXISTING	7.6 € mn	8.6 mn €	4.0 € mn	20.2 € mn	+3%
TOTAL		33.9 € mn	19.2 € mn	12.5 € mn	65.6 mn €	+10.6%

ORGANIC GROWTH +35.5% on 2020

STRONG RELATIONSHIPS WITH GLOBAL PLAYERS

Business plan 2021 - 2023 Organic growth - R&D

R&D activities will focus on ad hoc solutions to meet the needs of individual markets and on the design of customized products

More than 50 R&D engineers in force

Product innovation will be oriented to the following areas:

GAS

• Premium flame valves
• High performances burners for better combustion efficiency
• New burners for North America market
• New models of professional burners

HINGES

• Hinges for top load washers
• Customized hinges for specific markets and customers
• Motorized hinges

ELECTRONICS

• Development of new oven controls
• Vitroceramic hobs control cards
• Completion of product range for cooker hood controls
• Feasibility study of induction cooking
• Development of products for new business sectors like medical appliances, dishwashers, dryers, heaters, etc.

Business plan 2021 - 2023 Organic growth - New facilities

Business plan 2021 - 2023 Organic growth - Sustainability

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

«We believe in a world in which all people's basic needs, such as home, food and reliable energy, are fulfilled in an environmentally sustainable way.

SABAF GROUP VISION

We promote a company that improves the quality of the environment and the communities where we live and work»

BUSINESS PLAN KPI

	Area	KPI	SDGs
1	Development of resources and skills	Hours of training per capita
2		Accident frequency rate
	Health and safety	Accident severity rate
	Eco-efficiency and	tCO emissions on sales 2eq
3	Emissions into the atmosphere

M&A as a tool for achieving longterm targets through:

• the acquisition of know-how and technologies
• the expansion of the product offer
• the opening to new markets
• the risk diversification
• the ability to scale the business quickly

Growth of the competitive advantage by differentiating the Sabaf value proposition from competitors

Preservation of the identity of acquired companies, which maintain their brand, local supply chain and workforce

Retention of talents and soft skills

Achievement of significant commercial and industrial synergies

From an entrepreneurial to an industrial approach

Joint effort for growth and positives influence on margins

Preferably seller is taken onboard as a director and/or minority shareholder

INVESTMENT SECTORS

COMPONENTS FOR HOUSEHOLD APPLIANCES

ELECTRONICS

HEATING

4

PROFESSIONAL COOKING

Business plan 2021 - 2023 Growth by acquisitions - Target profile

TARGET PARAMETERS

TURNOVER	€ 5 - 70 mn sales
EBITDA	Steady positive results over past years No turnarounds
SHAREHOLDING	Preference for entrepreneurial ownership
EBITDA MULTIPLES	Non-dilutive

M&A TEAM

Dedicated to scouting and development of business contacts, creation of an internal Data Base, analysis and evaluation of opportunities, management of negotiations

Business plan 2021 - 2023 Summary - Targets

Around € 300 mn sales Total growth: 62% by 2023 vs. 2020 (Organic and by acquisitions growth) (CAGR 17.5%)

Total investments € 130 mn of which:

• ✓ € 58 mn organic growth
• ✓ € 72 mn growth by acquisitions ROI > 12.5%

• ✓ Dividends: € 20 mn

• ✓ Operating cash flow: € 85 mn

• ✓ New financial debt: € 65 mn

Sustainability targets:

• ✓ Hours of training per capita
• ✓ Accident frequency and severity rates
• ✓ CO2 emissions reduction

COMPARED TO 11.5% IN 2020

DISCLAIMER

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

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

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

For further information, please contact

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