Sabaf

Investor Presentation • Nov 19, 2024

FINANCIAL PRESENTATION

Sabaf – Roadshow 20th November 2024

www.sabafgroup.com www.sabafgroup.com

Table of contents

• I. COMPANY PROFILE
• II. LATEST 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

5 acquisitions in the last 8 years 3 greenfield plants in the last 3 years

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

Sabaf Group: industrial footprint

• 2021: 10 production plants
• 2024: 15 production plants (6 in Italy and 9 abroad)
• 1,780 employees at 30 September 2024

OKIDA ELEKTRONIK Electronics for household appliances

SABAF APPLIANCE COMPONENTS (KUNSHAN) Wok burners

SABAF INDIA Valves and burners

Special burners ARC S.R.L. Professional burners FARINGOSI-HINGES S.R.L. Oven hinges

Valves and thermostats

SABAF S.P.A.

Standard burners

CMI ITALY (2 PLANTS)

Oven hinges Dishwasher hinges

Dishwasher hinges

PGA

Electronics for household appliances

MANSFIELD

Oven hinges Washing machines hinges Refrigerators hinges

SABAF MEXICO Burners

CMI POLAND

Dishwasher hinges

Why investing in Sabaf

Strategy for value creation

Sabaf Group Main shareholders

Cinzia Saleri S.a.p.A. Quaestio SGR Paloma Rheem Investments Fintel S.r.l. Treasury Shares 9.73 % Montinvest S.r.l.

Pietro Iotti, Sabaf CEO, owns 2.18% of voting rights

LATEST STRATEGIC MOVES

Latest strategic moves

Sabaf India

Sales start	2Q 2023
Investment	€ 5.2 million in 3 years
Division	Gas: production of valves and burners for the domestic market
Production capacity	6 million (scalable) €

Market characterized by:

• strong growth
• customization
• competitive price requests
• 9M 2024: revenues € 1.5 million
• 4Q 2024: expected revenues € 0.9 million → strong sales ramp-up

Completion of the entire production process of valves by 1H 2025

Sabaf Mexico

Sales start	1H 2024
Investment	12 million in 2021-2023 €
Division	Gas: production of burners for NA market
Production capacity	€ 9 million (scalable)

May 2024: start of sales to Mabe July 2024: start of sales to Whirlpool

Fast production ramp-up, working on 3 shifts

• 9M 2024: revenues € 1.5 million
• 4Q 2024: expected revenues € 1.2 million

Budget 2025: revenues € 7 million

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Sabaf Induction

Project start	2021
Sales start	1H 2024
Investment	About €5 million in R&D in the period 2021 – 2023

Sabaf has developed its own project know-how (proprietary patents, software and hardware)

Creation of innovative products which better meet manufacturers' needs and new consumer trends. The project flexibility will enable Sabaf to offer customised products to its clients

The Group benefits from the expertise gained from the acquisitions of Okida and P.G.A. where part of the induction cooking components are produced

Team of more than 60 electronic engineers

Q2 2024: one of the major multinational groups started to produce under Sabaf license

Q3 2024: delivery of samples to 9 customers for testing

Q4 2024 and Q1 2025: expected start of sales to many customers

FINANCIAL PERFORMANCE

Context analysis

Customers

Greater penetration of Turkish and Chinese players in the European market

• Arcelik with WHP EMEA (now Beko Europe)
• Haier with Candy acquisition
• Hisense with Gorenje acquisition
• Midea with Teka acquisition

Weakening of the historical Western players

Reduction in end-users purchasing power

The Sabaf Group thanks to its • global footprint • strong relationships with key market players is able to take full advantage of such trends

Competitors

The last 2 years highlighted the difficulty with resilience of some competitors, which could open opportunities for M&A and/or market share increase

Market trends

18

Europe

• After several quarters characterized by market weakness, the first signs of recovery are emerging

North America

• 2Q and 3Q 2024 industry shipments were positive (+5%). Market was driven by solid replacement demand, partially offset by weak discretionary purchases. Price/mix is negative.

• Strong growth in Latin America
• Asia is recovering compared to 2023
• Middle East and Africa performed well, but still affected by the geopolitical picture

9 MONTHS 2024 | Sabaf Group highlights

In this context Sabaf reported strong results

• Direct presence in emerging countries
• Product range expansion
• Product innovation allow the Group to gain market share and outperform the market

Thanks to its global industrial footprint and available production capacity, Sabaf is ready to respond to the expected recovery after a period of market weakness

	3Q 2024	9M 2024
REVENUE adj		+20.4%
(on like for like basis) a - -	+12.8%	+12.7%
EBITDA adj		+31.9%
(on like for like basis) a - -	+5.0%	+25.3%
EBITDA MARGIN adj		15.1%
(on like for like basis) a - -	13.3%	15.4%

Quarterly adjusted¹ revenues comparison y-o-y

21

Yearly adjusted¹ revenues and EBITDA

Adjusted income statement¹ - 9 months 2024

€ x 000	9M 2024		9M 2023		% Δ 9M 24 - 9M 23	12	MONTHS 2023
Revenue	212 312 ,	100%	176 271 ,	100%	+20.4%	239 086 ,	100%
Other income	7 653 ,	3.6%	6 174 ,	3.5%		9 036 ,	3.8%
Total operating and income revenue	219 965 ,		182 445 ,			248 122 ,
Consumption	(99 076) ,	(46.7%)	(86 777) ,	(49.2%)		(116 008) ,	(48.5%)
Personnel costs	(51 364) ,	(24.2%)	(41 674) ,	(23.6%)		(57 809) ,	(24.2%)
Other operating costs	(37 380) ,	(17.6%)	(29 627) ,	(16.8%)		(41 258) ,	(17.3%)
EBITDA	32 145 ,	15.1%	24 367 ,	13.8%	+31.9%	33 047 ,	13.8%
Depreciation	(14 273) ,	(6.7%)	(12 722) ,	(7.2%)		(17 071) ,	(7.1%)
Gain/losses on fixed assets	9 0	0.0%	1 488 ,	0.8%		1 520 ,	0.6%
Write-downs/write-backs of non-current assets	(8)	(0.0%)	-	0.0%		-	0.0%
EBIT	17 954 ,	8.5%	13 133 ,	7.5%	+36.7%	17 496 ,	7.3%
financial Non expense	(1 294) ,	(0.6%)	(1 707) ,	(1.0%)		(3 334) ,	(1.4%)
Exchange and losses gains rate	584	0.3%	(1 292) ,	(0.7%)		(2 169) ,	(0.9%)
EBT	17 244 ,	8.1%	10 134 ,	5.7%	+70.2%	11 993 ,	5.0%
Income taxes	(3 960) ,	(1.9%)	(1 399) ,	(0.8%)		2 438 ,	1.0%
NET PROFIT FOR THE PERIOD	13 284 ,	6.3%	8 735 ,	5.0%	+52.1%	14 431 ,	6.0%
Minority interests	727	0.3%	336	0.2%		277	0.1%
PROFIT TO GROUP ATTRIBUTABLE THE	12 557 ,	5.9%	8 399 ,	4.8%	+49.5%	14 154 ,	5.9%

Income statement¹ - 9 months 2024

€ x 000	9 MONTHS 2024		9 MONTHS	2023	Δ % 9M24 - 9M23
Revenue	213 875 ,	0% 100	176 906 ,	0% 100	9% +20
Start sales -up	-		(15)
Hyperinflation - Turkey	(1 563) ,		(620)
Adjusted revenue	212 312 ,	0% 100	176 271 ,	0% 100	4% +20
EBITDA	32 901 ,	4% 15	22 146 ,	5% 12	6% +48
Start costs -up	-		1 905 ,
Hyperinflation - Turkey	(756)		316
Adjusted EBITDA	32 145 ,	1% 15	24 367 ,	8% 13	9% +31
EBIT	16 118 ,	5% 7	8 786 ,	0% 5	5% +83
Start costs -up	-		2 523 ,
Hyperinflation - Turkey	1 836 ,		1 824 ,
Adjusted EBIT	17 954 ,	5% 8	13 133 ,	5% 7	7% +36
Net result	9 560 ,	4 5%	1 365 ,	0 8%	n.a.
Start costs -up	-		2 395 ,
Hyperinflation - Turkey	2 997 ,		4 639 ,
Adjusted result Net	12 557 ,	9% 5	8 399 ,	8% 4	5% +49

Adjusted sales by market

€ x 000

	MONTHS 9 2024	MONTHS 9 2023	∆
(excluding	60	55	3%
Turkey)	489	346	+9
Europe	,	,
Turkey	024	45	+20
	55	578	7%
	,	,
North America	45 414 ,	33 953 ,	8% +33
South America	27 316 ,	21 051 ,	8% +29
Africa and Middle East	12 037 ,	13 751 ,	-12 5%
Asia	12	6	5%
and	032	592	+82
Oceania	,	,
Total	212	176	4%
	312	271	+20
	,	,

Adjusted sales by product

€ x 000

	MONTHS 9 2024	MONTHS 9 2023	∆
Gas	126	106	0%
	107	907	+18
	,	,
Hinges	65	50	+30
	467	180	5%
	,	,
Electronics	20	19	0%
	338	184	+6
	,	,
Induction	400		n.a.
Total	212	176	4%
	312	271	+20
	,	,

Balance Sheet - Reported

€ x 000	30/09/2024	31/12/2023	30/09/2023
Fixed assets	177,042	181,167	180,274
Inventories	65 023 ,	61 985 ,	67 394 ,
Trade receivables	69 674 ,	55 826 ,	63 814 ,
Tax receivables	8 689 ,	11 722 ,	9 459 ,
Other receivables current	3 920 ,	3 868 ,	3 631 ,
Trade payables	(46 382) ,	(42 521) ,	(40 257) ,
Tax payables	(4 390) ,	(3 025) ,	(3 690) ,
Other payables	(17 578) ,	(16 007) ,	(14 794) ,
Net working capital	78,956	71,848	85,557
Provisions for risks and severance indemnity	(8 918) ,	(9 477) ,	(9 612) ,
Capital Employed	247,080	243,538	256,219
Equity Net debt	170,092 76,988	170,388 73,150	172,548 83,671
Sources of finance	247,080	243,538	256,219

At 30 September 2024, the impact of the net working capital on revenue was 27.7% compared to 36.3% at 30 September 2023 and 30.2% at the end of 2023

Net financial debt at 30 September 24

€77 million (€73.2 million at 31 December 2023) includes €10.8 million related to the recognition of the put option granted to MEC minorities

Cash flow statement

€ x 000	MONTHS 9 2024	MONTHS 12 2023	MONTHS 9 2023
Cash the beginning of the period at	36 353	20 923	20 923
profit Net Depreciation Other income adjustments statement	, 10 287 , 16 817 , 5 324 ,	, 3 380 , 20 066 , 5 229 ,	, 1 701 , 14 847 , 5 532 ,
Change working capital in net - Change in inventories - Change in receivables - Change in payables	(5 842) , (15 046) , 4 332 , (16 556) ,	4 079 , 7 375 , 2 438 , 13 892 ,	1 720 , 107 (16) 1 811 ,
Other changes in operating items	359	(2 715) ,	(1 986) ,
Operating cash flow Investments of	16 231 ,	39 852 ,	21 905 ,
disposals , net Free Cash Flow	(9 512) , 6 719 ,	(16 942) , 22 910 ,	(13 064) , 8 841 ,
Cash flow from financial activity Own shares buyback Dividends Share capital increase Mansfield aquisition PGA acquisition Forex	(5 442) , - (8 089) , - - - (1 268) ,	(14 208) , (462) - 17 312 , (8 325) , (783) (1 014) ,	(12 452) , (462) - 17 312 , (8 324) , (783) 521
financial flow Net	(8 080) ,	15 430 ,	4 653 ,
Cash the end of the period at	28 273 ,	36 353 ,	25 576 ,

Dividends: on 28 May 2024 distribution of a gross ordinary dividend of €0.54 per share

2024 Outlook

2024 Outlook The Group expects to close 2024 with revenues ranging from €276 to €280 million, up by 15-17% compared to 2023. In recent weeks, the order intake has been influenced by the inventory reduction policy of major customers, which is typical at the end of the year. In the coming months, potential more expansionary monetary policies could support the recovery of the housing sector in Europe and in the United States and thus the recovery of the market for household appliances. In 2025, Sabaf will continue to implement its Business Plan, which aims to increase and consolidate its global market shares, through - the increasingly widespread presence of the Group at a global level - the diversification of product offering - the enhancement of the synergies with acquired companies - the growth through acquisitions. Notably, an increasing contribution is expected from the Gas division, thanks also to the new plants in Mexico and India, from the Induction division and from the direct presence in the United States (thanks to the recent acquisition of MEC).

SUSTAINABILITY

Sabaf: a sustainable business

Sustainability in the Business plan 2024 - 2026

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 " "

ESG Performance - Corporate Governance Remuneration policy

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Environmental impact of different cooking fuels 1/3

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

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

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

5.5 billion people use fossil fuels (mainly natural gas and LPG) or electricity for cooking

Environmental impact of different cooking fuels 2/3

Environmental impact of different cooking fuels¹

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

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

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

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

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

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

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

Environmental impact of different cooking fuels 3/3

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

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

An induction hob causes lower CO² emissions than a gas hob only if the electricity is produced with a % of renewable sources (and/or nuclear energy) higher than 70%

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

• Sabaf is investing to promote diffusion of gas cooking appliances in emerging countries, replacing traditional cooking methods with much higher environmental impact
• At the same time, Sabaf is investing to enter the sector of induction cooking, the most efficient form of electric cooking, which is constantly growing in the European market, although such trend has slowed down in the last 3 years

A possible revolution - Hydrogen burners

The Sabaf Group actively takes part in research projects aimed at evaluating the feasibility of replacing natural gas (methane) with hydrogen as a source for gas cooking appliances

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

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

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

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

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

DISCLAIMER

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

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

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

For further information, please contact

Gianluca Beschi gianluca.beschi@sabaf.it Elena Gironi elena.gironi@sabaf.it