Sabaf

Investor Presentation • Mar 22, 2023

Informazione Regolamentata n. 0226-19-2023		Data/Ora Ricezione 22 Marzo 2023 13:55:41	Euronext Star Milan
Societa'	:	SABAF
Identificativo Informazione Regolamentata	:	173880
Nome utilizzatore	:	SABAFN04 - Beschi
Tipologia	:	REGEM
Data/Ora Ricezione	:	22 Marzo 2023 13:55:41
Data/Ora Inizio Diffusione presunta	:	22 Marzo 2023 13:55:43
Oggetto	:	Presentazione Finanziaria - Star Conference Marzo 2023
Testo del comunicato

Vedi allegato.

SABAF: THERE'S LIFE INSIDE

www.sabafgroup.com

FINANCIAL PRESENTATION

STAR Conference 2023

Milan, 21 - 23 Marzo 2023

Table of contents

• I. COMPANY PROFILE
• II. 2022 STRATEGIC MOVES
• III. FINANCIAL PERFORMANCE
• IV. SUSTAINABILITY

COMPANY PROFILE

Sabaf Group: product range evolution in 4 Business Units

SINCE 2000, further expansion since 2019 SINCE 2022

HINGES

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

Sabaf Group: evolution

Sabaf Group: Revenues and EBITDA last 4 years

FY 2022 Revenues at € 253.1 mn

FY 2022 EBITDA at € 40.1 mn

7

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

Sabaf Group: industrial footprint

• 2023: 14 production plants (6 in Italy and 8 abroad)
• 1,353 employees at 31st December 2022

SABAF TURKEY (2 PLANTS) Burners, valves, hinges and Electronics

OKIDA ELEKTRONIK Electronics for household appliances

SABAF APPLIANCE COMPONENTS (KUNSHAN) Wok burners

SABAF INDIA Valves and burners SOP - H1 2022

SABAF S.P.A. Valves and thermostats Standard burners Special burners

ARC S.R.L. Professional burners

FARINGOSI-HINGES S.R.L. Oven hinges Dishwasher hinges

CMI ITALY (2 PLANTS)

NEW

Oven hinges Dishwasher hinges

PGA Electronics for household

appliances

NEW

SABAF MEXICO Burners and hinges SOP - Q1 2023

CMI POLAND

Dishwasher hinges

Why invest in Sabaf

Strategy for value creation

Sabaf Group Main shareholders

Pietro Iotti, CEO of Sabaf, owns 1.7%

2022 STRATEGIC MOVES

Strategic moves (becoming in facts)

Sabaf Induction: business strategy

2

3

4

5

1

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

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

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

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

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

2022

The Sabaf Group enters the

INDUCTION COOKING SECTOR

Sabaf Induction: business strategy

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

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

Investment plan

• About €5 million in R&D in the period 2021 2023
• Setting up of a dedicated project team in Italy

R&D

MARKET

PROJECT

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

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

Sabaf Induction: business strategy

• 5 product platforms which cover the whole market (high, medium and basic range) with customisation opportunities
• The first prototypes were released in September 2022
• Production will start by the third quarter of 2023
• Sabaf network for sales and distribution
• Very positive customer feedback (agreements with some important players have been already signed)
• Objective: at least 5% of the non-captive European market by 2025, further expansion in the following years

P.G.A. acquisition

P.G.A. acquisition

The acquisition

• 100% of the share capital
• Preliminary valuation amounting to €9.76 million → 5x EBITDA (average annual consolidated 2020 2022)
• The purchase price will be determined on the basis of the final P.G.A. Group 2022 EBITDA and of the net financial position at the date of completion of the transaction
• 75% paid in a single payment
• 25% paid through the sale of Sabaf treasury shares
• Possible further price adjustment ("earn-out"), linked to the achievement of the Sabaf Group Electronics Division objectives

• Andrea and Paolo Cennimo remain at the head of P.G.A. as Chief Executive Officers

• The strategy

• The acquisition of P.G.A. reflects the aim of diversification and expansion of the offer defined in our Business Plan
• P.G.A. integrates perfectly with Okida, the Sabaf Group's company which is already active in the electronics sector and which is increasingly contributing to the Group's results
• The Electronics Division plays a decisive role in Sabaf's strategic development into a group with a full-fledged presence in advanced technologies in the household appliance industry → Electronics allows to reach diversified future expansions and higher profitability level
• Through this acquisition the 2023 Electronic division turnover is expected to be around €35 million

Widening Industrial Footprint

• Plot area: 24,000 sqm (built-up area 5,000 sqm)
• Expected capacity: € 6 mn
• Start of production: 3Q 2022
• Good outlook for growth in 2023

SABAF INDIA

• Production: burners for North and Central America markets
• Investments: € 6 mn in 3 years
• Plot area: 23,300 sqm (built-up area12,950 sqm)
• Expected capacity: € 11 mn already fully booked
• Start of production: 2Q 2023

FINANCIAL PERFORMANCE

Performance data Income statement – 12 months 2022 vs. 12 months 2021

€ x 000	12 MONTHS 2022		12 MONTHS 2021		% Δ 22 - 21
Revenue	253 053	100,0%	263 259	100,0%	-3,9%
Other income	10 188	4,0%	8 661	3,3%
Total operatig and income revenue	263 241		271 920
Consumption	(124 844)	(49 ,3%)	(112 433)	(42 ,7%)
Personnel costs	(49 926)	(19 ,7%)	(53 964)	(20 ,5%)
Other operating costs	(48 379)	(19 ,1%)	(51 383)	(19 ,5%)
EBITDA	40 092	15,8%	54 140	20,6%	-25,9%
Depreciation	(18 267)	(7 ,2%)	(16 869)	(6 ,4%)
Gains/losses on fixed assets	251	0,1%	237	0,1%
Write-downs/write-backs of non-current assets	(189)	(0 ,1%)	-	0,0%
EBIT	21 887	8,6%	37 508	14,2%	-41,6%
Net financial	(92)	(0 ,0%)	(429)	(0 ,2%)
expense Revenues (expenses from hyprinflation)	(9 023)	(3 ,6%)
Exchange gains and losses rate	(515)	(0 ,2%)	(7 399)	(2 ,8%)
Profits and losses from equity investments	(48)	(0 ,0%)	-	0,0%
EBT	12 209	4,8%	29 680	11,3%	-58,9%
Income taxes	3 040	1,2%	(4 997)	(1 ,9%)
PROFIT FOR THE YEAR	15 249		24 683
		6,0%		9,4%	-38,2%
Minority interests	-	0,0%	780	0,3%
PROFIT ATTRIBUTABLE TO GROUP THE	15 249	6,0%	23 903	9,1%	-36,2%

II half 2022 highlights and 2023 trend

II HALF 2022 HIGHLIGHTS

Positives

• STRONG CASH GENERATION
• WORKING CAPITAL IMPROVEMENT
• PRICE INCREASE
• FOREIGN EXCHANGE RATE EFFECT

Negatives

• DROP IN VOLUMES: Causes: market slowdown after two years of strong growth, inflation, destocking.
• INCREASE IN ENERGY COSTS
• INCREASE IN RAW MATERIAL COSTS

Performance data Sales by market

x 000 €	MONTHS 12 2022	MONTHS 12 2021
Europe (excluding Turkey)	87 281 ,	92 935 ,	1% -6
Turkey	66 845 ,	65 526 ,	0% +2
North America	39 800 ,	30 472 ,	+30 6%
South America	28 503 ,	39 589 ,	0% -28
Africa and Middle East	19 098 ,	19 614 ,	6% -2
Asia and Oceania	11 525 ,	15 123 ,	-23 8%
Total	253,053	263,259	9% -3

Performance data Sales by product

EMARKET DIR
CERTIFIED

€ x 000	12 MONTHS 2022	12 MONTHS 2021
Gas	158	182	2%
	340	468	-13
	,	,
Hinges	68	58	+17
	627	375	6%
	,	,
Electronics	26	22	4%
	086	416	+16
	,	,
Total	253	263	9%
	053	259	-3
	,	,

Performance data

Balance Sheet

25

€ 000 x	31/12/2022	31/12/2021
Fixed assets	171 276 ,	130 093 ,
Inventories	64 426 ,	64 153 ,
Trade receivables	59 159 ,	68 040 ,
receivables Tax	8 214 ,	6 165 ,
Other receivables current	2 910 ,	3 136 ,
Trade payables	(39 628) ,	(54 837) ,
Tax payables	(2 545) ,	(4 951) ,
Other payables	(13 156) ,	(13 075) ,
working capital Net	79 380 ,	68 631 ,
Provisions for risks and severance indemnity	(10 128) ,	(8 681) ,
Capital Employed	240 528 ,	190 043 ,
Equity debt Net	156 162 , 84 366 ,	122 436 , 67 607 ,
Sources of finance	240 528 ,	190 043 ,

Performance data Cash flow statement

€ 000 x	MONTHS 12 2022	MONTHS 12 2021
Cash the beginning of the period at	43 649 ,	13 318 ,
Net profit	16 239 ,	24 683 ,
Depreciation	18 266 ,	16 869 ,
Other income adjustments statement	965	5 810 ,
Change in working capital net
- Change in inventories	3 890 ,	(24 929) ,
- Change in receivables	10 253 ,	(4 604) ,
- Change in payables	(17 157) ,	13 064 ,
	(3 014) ,	(16 469) ,
Other changes in operating items	(8 135) ,	(7 677) ,
Operating cash flow	24 321 ,	23 216 ,
Investments of disposals , net	(20 856) ,	(23 752) ,
Cash Flow Free	3 465 ,	(536)
Cash flow from financial activity	(8 334) ,	47 405 ,
Own shares buyback	(1 862) ,	-
Dividends	(6 690) ,	(6 172) ,
PGA acquisition	(4 948) ,
CMI and ARC acquisitions		(6 393) ,
Deconsolidation / consolidation ARC Handan	(97)	97
Forex	(4 260) ,	(4 070) ,
financial flow Net	(22 726) ,	30 331 ,
Cash the end of the period at	20 923 ,	43 649 ,

Performance data Financial indicators

12 MONTHS 2022 12 MONTHS 2021

Change in turnover (vs . previous year)	9% -3 12m 2021 vs.	4% +42 12m 20 vs.
Change in turnover (like-for-like basis)	vs. 9% -4 12m 2021 vs.	9m 2021 -
ROCE (return capital employed) on	10% 9	7% 19
debt/EBITDA Net	2 10	1 25
Net working capital/Turnover	4% 31	1% 26
debt/equity Net	0% 54	2% 55
of Sales Outstanding Days	84	101
Days of Payables Outstanding	82	96
of Outstanding Days Inventory	104	99

2023 Outlook

In the first quarter of 2023

• demand has normalised
• energy prices have fallen sharply
• commodity prices are gradually trending towards lower average levels than in 2022
• The destocking that characterized the second half of last year is now over
• Sales in the first half of 2023, while not reaching the records of early 2022, are expected to be higher in the second half of 2022

These factors, combined with:

• a very positive market response for induction cooking components
• the contribution of the new production plants in India and Mexico and
• the integration of P.G.A. (acquired in 2022) into the Electronics Division

lead us to expect a year of progressive and substantial recovery.

The implementation of the Business Plan, including the acceleration of growth through acquisitions, continues as planned.

The Board of Directors will propose to the shareholders to allocate the profit for the year of €2,246,997 entirely to the Extraordinary Reserve, in order to keep within the Group the financial resources needed to accelerate the path of growth and to be able to take advantage of opportunities even in the short term, consistently with the goals of the Business Plan.

SUSTAINABILITY

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

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

Sabaf: a sustainable business

KPI measurement

KPI	Unit of measurement	2023 Target vs. 2020	2020 ACTUAL	2021 TARGET	2021 ACTUAL	12M 2022 ACTUAL	2022 TARGET	2023 TARGET
CO 2 emissions/Reven ue	tCO / million 2eq of Euro	-14%	132	<128	111	91	<120	<114
Hours of training per capita	h	+40%	13.9	>11.0	20.4	25.7	>13	>15
Summary indicator of injuries	-	-44%	177	<140	327	106.8	<120	<100

NOTES

• KPI 1 CO2 emissions/Revenue = CO² emissions scope 1 + scope 2 market-based / Revenue
• KPI 3 Summary indicator of injuries = injury rate x injury lost day rate x 100
• injury rate = number of injuries x 1,000,000/total hour worked
• injury lost day rate = days of absence x 1,000/hours worked

ESG Performance - Corporate Governance

Remuneration policy

CO² Emissions for the production of electric power (2019 energy mix)

	EMISSIONS	ENERCY SOURCE
	g CO /kWh 2eq	Renewable	Fossil	Nuclear
Italy	315	33%	67%	-
France	56	19%	11%	70%
Europe	298	29%	50%	21%
US	374	16%	64%	20%
China	609	26%	70%	4%
India	684	18%	79%	3%
World	521	24%	65%	11%

CO² Emissions of gas hobs vs. induction hobs in Italy (from Journal of Cleaner production)

Source: https://www.sciencedirect.com/science/article/abs/pii/S0959652618308011 Journal of Cleaner production

Article «Comparative life cycle assessment of cooking appliances in Italian kitchens»

Claudio Favi ^a , Michele Germani ^b , Daniele Landi ^b , Marco Mengarelli ^c , Marta Rossi ^{b a} Università degli Studi di Parma ^b Università Politecnica delle Marche ^c Energy Research Institute, Nanyang Technological University

CO² Emissions of gas hobs vs. electric induction hobs

• Gas hob emission 1,050 / induction hob emission 1,590 = 1.51
• CO² emissions Break-Even Point Gas vs. Induction is:

315 / 1.51 = 208 g CO2eq /kWh → equivalent to ~70% of electric power generated by renewable energy sources

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

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

High efficiency burners

ESG Performance - Environment Hydrogen: project Hy4Heat

The Hy4Heat project aims to establish whether it is technically possible, safe and convenient to replace natural gas (methane) with 100% hydrogen in residential and commercial buildings and gas appliances. The Hy4Heat project is financed by BEIS, (the UK governments Department for Business, Energy, and Industrial Strategy) and involves ten separate work packages

The SABAF Group, through its subsidiary ARC, is involved in Work Package 4, which covers cooking and heating appliances. ARC has developed and produced the burners that have now been specified on the world's first UKCA Certified ranges of 100% hydrogen hobs and cookers. These have been installed on the cooking appliances Glen Dimpex at HyHome, two purpose built houses demonstrating hydrogen appliances in a 'real life' scenario at Low Thornley, near Gateshead in the North of England

Immediately following the Hy4Heat project, cooking appliances incorporating ARC burners will be specified for the Community Trial involving 300 homes commencing in 2022. Beyond 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 latter part of the decade prior to potentially converting the whole UK gas grid to hydrogen over future years

ARC is involved also in Work Package 5B (Commercial hydrogen gas appliance development) which , includes commercial catering equipment where ARC has developed commercial hob burners for Falcon Foodservice Equipment Ltd

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